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, 2010

Courtney R. Taylor

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

   

The Bond Fund of AmericaSM

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Special feature

Balancing your portfolio with bonds

u See page 6

Annual report for the year ended December 31, 2010

The Bond Fund of America 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 33 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, 2010:
Class A shares	1 year			5 years			10 years
Reflecting 3.75% maximum sales charge		3.27	%		2.64	%		4.61	%

The total annual fund operating expense ratio was 0.59% 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. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 28 and 29 for details.

The fund’s 30-day yield for Class A shares as of January 31, 2011, calculated in accordance with the Securities and Exchange Commission formula, was 2.79%. The fund’s distribution rate for Class A shares as of that date was 3.60%. 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 33.

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/AAA (highest) to D (lowest), are assigned by credit rating agencies such as Moody’s, Standard & Poor’s and/or Fitch as an indication of an issuer’s creditworthiness. High-yield bonds are subject to greater fluctuations in value and risk of loss of income and principal than investment-grade bonds. Investing in bonds issued 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, illiquidity and price volatility. 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:

The bond market delivered solid returns for 2010, despite a period of weakness late in the year due to rising interest rates. Every major sector recorded positive results for the full year, with higher risk investments generally posting the strongest returns.

For the 12 months ended December 31, 2010, The Bond Fund of America produced a total return of 7.3%. This compared favorably to the unmanaged Barclays Capital U.S. Aggregate Index, the fund’s primary benchmark, which gained 6.5%, but fell short of the Lipper Corporate Debt A-Rated Bond Funds Average, a peer group measure, which returned 7.5%.

Income is an important component of the fund’s total return. For 2010, the fund paid monthly dividends totaling 46.3 cents a share. This represents an income return of approximately 4.0% for those who reinvested dividends. Those who took dividends in cash recorded a 3.9% income return. Importantly for our shareholders, this was the 26th consecutive year that the fund’s income return bested its peer group average.

Bond market overview

Changing perceptions about the strength of the U.S. economy steered the bond market for much of the year, although debt troubles in Europe had a decisive impact as well. Short-term bond yields were largely tethered by the ultra-low interest rates of the Federal Reserve and its quantitative easing efforts, which were implemented to help stimulate economic activity. In contrast, longer term bond rates fluctuated far more over the course of the year, with long-term Treasury yields serving as a barometer for shifting sentiments on the economy.

[Begin Sidebar]

Results at a glance
For periods ended December 31, 2010, with all distributions reinvested
	Total returns			Average annual total returns
	1 year			5 years			10 years			Lifetime
										(since 5/28/74)
The Bond Fund of America
(Class A shares)		7.30	%		3.44	%		5.01	%		8.42	%
Barclays Capital U.S. Aggregate
Index1		6.54			5.80			5.84			8.38
Lipper Corporate Debt A-Rated
Bond Funds Average2		7.51			4.82			5.27			8.35
1 The 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. These indexes are unmanaged and their results do not reflect the effect of sales charges, commissions, account fees, expenses or taxes.
2 Source: Lipper. Lipper averages do not include the effect of sales charges, account fees or taxes.

[End Sidebar]

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[Begin Sidebar]

In this report
	Special feature
6	Balancing your portfolio with bonds
	In this article, we discuss how The Bond Fund of America can help investors achieve investment goals through its broad exposure to the bond market. In the process, we’ll take a look at the stabilizing effect of income on bond returns and how the fund has fared over longer periods of rising and falling interest rates.
	Contents
1	Letter to shareholders
4	The value of a long-term perspective
12	Summary investment portfolio
17	Financial statements
34	Board of directors and other officers

[End Sidebar]

Early in the year, tentative signs of a recovering economy nudged 10-year Treasury yields up to 4.0% by the first week in April. Shortly thereafter, burgeoning concerns about the financial strength of Greece and a handful of other European countries sparked a flight to quality that rallied the Treasury market. Treasury yields fell and continued to decline through the summer months as emerging data hinted at another economic slowdown, or worse — a double-dip recession. Reflecting the market’s concerns, the 10-year Treasury yield tumbled to 2.4%, its low for the year reached in early October. By that time, however, new data pointed to an economy on the mend once again, and interest rates began to climb.

Rising rates during the fourth quarter dented returns for that period, but full-year results were boosted by strength during the previous three quarters. Overall, the Treasury sector produced solid results for the year, bolstered by high returns on longer maturity bonds. Federal agency debt and agency mortgage-backed obligations also logged good returns, though they lagged those of the Treasury sector. The credit-sensitive sectors of the market — notably corporate bonds and commercial mortgage-backed securities — provided some of the best results. The corporate sector was propelled by steady earnings growth, the strength of corporate balance sheets and ongoing investor demand. Commercial mortgages reaped the benefit of an improving outlook for the industry, though its extraordinary gains came from previously depressed levels.

Inside the portfolio

Throughout the year, portfolio counselors sought to guide the fund through the currents of uncertainties that governed the market. Their goal, as always, was to meet the fund’s objectives: preserve principal for shareholders and deliver as high a level of current income as possible. For much of the year, improving bond prices supported their efforts. However, the shifting direction of interest rates and rotating strengths among the various sectors of the market prompted some changes to the mix of securities held in the portfolio.

The fund’s weighting in mortgage-backed obligations was one of the notable changes. Portfolio counselors increased exposure to this class of securities from 23.8% at the start of the year to 29.1% by the end. Virtually all of the increase was among federal agency pass-through obligations. These bonds tend to retain more of their market value during rising rate periods and are prized among investors for the relatively steady stream of income they deliver. In contrast, the counselors continued to reduce the fund’s already low exposure to commercial mortgages and mortgages that were privately originated.

Given the narrowing of corporate bond spreads (the yield differential between a corporate bond and its comparable Treasury) and the corresponding price appreciation that occurred over the past year, portfolio counselors decided to trim exposure to corporate debt, mainly during the first half of the year. As a result, the fund’s weighting in corporates declined to 29.0% by the end of the year from 34.5% at the start.

Direct obligations of the U.S. government have always held a prominent place in the portfolio. Of these, Treasuries constitute the fund’s largest component. During the first half of the year, portfolio counselors modestly increased the weighting in Treasuries as prices rose significantly. Later in the year, they scaled back, leaving the Treasury weighting at 26.8% by year-end, up only slightly from the start of the year.

Less obvious, but as crucial to the success of the fund, were various changes in individual holdings. Most of these resulted from the recommendations of the fund’s research professionals, who continually seek to add value and avoid mishaps through their rigorous analysis of companies, industries and market-moving forces. While their recommendations may not be readily apparent in the sector weightings of the portfolio, they are well represented in its individual holdings.

Altogether, The Bond Fund of America held more than 1,900 individual securities at the end of 2010. These holdings represent some of the best investment ideas of the portfolio counselors and analysts who work together to manage this fund.

Looking ahead

Last year was a seesaw for investor concerns. First they worried about inflation, then deflation and then inflation once more. Thus far we’ve seen little evidence of either extreme. While the economy now seems clearly on the mend, there are also mitigating forces, such as weak housing markets and high unemployment, which are likely to keep the economy from overheating in the year ahead.

Perhaps the greater concern for bond investors in 2011 is that of rising rates. As interest rates rise, the market value of outstanding bonds declines; but here again, concerns may be overblown. Bond prices may weaken as interest rates rise, but as an asset class, they are highly unlikely to plunge in value as can happen with “hard” assets, such as real estate or commodities. In fact, rising rates may actually benefit those bondholders who are patient and reinvest income over time. To learn more about this phenomenon and better understand the long-term advantages that bonds can provide, we invite you to read our feature article, “Balancing your portfolio with bonds,” which begins on page 6.

For many, bonds have become an increasingly important asset class, especially when facing so much uncertainty about the economy and the future. The Bond Fund of America strives to alleviate some of that uncertainty with its professional management and broadly diversified portfolio of holdings. We hope that it will remain a core investment in your portfolio for years to come.

Cordially,

/s/ Paul G. Haaga, Jr.

Paul G. Haaga, Jr.

Vice Chairman of the Board

/s/ John H. Smet

John H. Smet

President

February 7, 2011

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

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, 2010)*
	1 year			5 years			10 years
Class A shares		3.27	%		2.64	%		4.61	%
*Assumes reinvestment of all distributions and payment of the maximum 3.75% sales charge.

The total annual fund operating expense ratio was 0.59% 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. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 28 and 29 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
2010		185,705		190,159		45,099

[end mountain chart]

Year ended December 31		1974	6	1975		1976		1977	1978	1979	1980
Total value
Dividends reinvested	$	418		907		1,020		1,126	1,211	1,401	1,724
Value at year-end	$	9,988		11,254		13,293		13,977	14,261	14,710	15,230
BFA’s total return		(0.1	)%	12.7		18.1		5.1	2.0	3.1	3.5
Year ended December 31		1981		1982		1983		1984	1985	1986	1987
Total value
Dividends reinvested		2,118		2,434		2,556		2,869	3,227	3,604	3,787
Value at year-end		16,242		21,586		23,628		26,450	33,488	38,568	39,324
BFA’s total return		6.6		32.9		9.5		11.9	26.6	15.2	2.0
Year ended December 31		1988		1989		1990		1991	1992	1993	1994
Total value
Dividends reinvested		3,953		4,471		4,699		4,909	5,275	5,325	5,733
Value at year-end		43,533		47,942		49,509		59,927	66,722	76,155	72,335
BFA’s total return		10.7		10.1		3.3		21.0	11.3	14.1	(5.0	)
Year ended December 31		1995		1996		1997		1998	1999	2000	2001
Total value
Dividends reinvested		6,178		6,473		6,704		7,007	7,398	8,190	8,228
Value at year-end		85,536		91,274		99,709		104,863	107,265	113,906	122,051
BFA’s total return		18.2		6.7		9.2		5.2	2.3	6.2	7.2
Year ended December 31		2002		2003		2004		2005	2006	2007	2008
Total value
Dividends reinvested		8,189		7,370		6,913		7,924	7,949	8,950	10,094
Value at year-end		129,514		145,335		153,837		156,815	166,032	171,635	150,619
BFA’s total return		6.1		12.2		5.8		1.9	5.9	3.4	(12.2	)
Year ended December 31		2009		2010	Average
Total value					annual total
Dividends reinvested		7,469		6,904	return for
Value at year-end		173,071		185,705	fund’s lifetime:
BFA’s total return		14.9		7.3		8.31	%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, account fees, expenses or taxes.

4Includes reinvested dividends of $184,709 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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Balancing your portfolio with bonds

[Begin Pull Quote]

“Investors should understand that bonds are in their portfolios to produce income and provide an offset to stock market volatility.”

[End Pull Quote]

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For nearly two years, investors have flocked to bond funds in unprecedented volumes. Throughout that period, short-term interest rates have been low, anchored by the resolve of the Federal Reserve to stimulate economic growth. More recently, however, longer term interest rates have begun to move higher, prompting some to question whether bonds still make sense in their investment portfolios. The short answer is yes, in most cases, but to get to that answer, investors must first understand the function and purpose of bonds as part of an overall investment strategy and then frame expectations accordingly.

In this article, we discuss how The Bond Fund of America can help investors achieve investment goals through its broad exposure to the bond market. In the process, we’ll take a look at the stabilizing effect of income on bond returns and how the fund has fared over longer periods of rising and falling interest rates. Additionally, we’ll explain how active management can help mitigate the negative effects of rising rates. We hope this discussion helps our shareholders better appreciate the purpose of this fund in their portfolio and avoid the temptation to chase or flee short-term market movements.

The stabilizing properties of bonds

Most bonds offer features that are nearly impossible to find in other asset classes: a relatively predictable and reliable stream of income, a defined maturity date and the return of principal at maturity. These traits work together to help moderate and balance returns over time, making bond funds an indispensible asset for most portfolios.

The interest a bond provides — its income — is both a modulating and an accumulating force in a bond portfolio. Income reinvested is a key component of a bond or bond fund’s total return; the other component is market value (price), which fluctuates over time. Interest rates and bond prices have an inverse relationship. When interest rates fall, bond prices typically rise. While that may sound appealing, bond investors then find that they have to reinvest interest income at ever lower rates, which can diminish the contribution of income to total return. Nonetheless, rising prices can mitigate the effects of lower reinvestment rates and thus bolster total return. We have seen plenty of evidence of this in recent years, as rates dipped to historic lows.

When interest rates are rising, the stabilizing effects reverse direction. Higher rates diminish the market value of outstanding bonds, yet they also afford opportunities to reinvest interest income at increasingly higher yields. At such times, the pace and amount of the increases can impact the ability of reinvested income to offset price declines — at least over the short term. If rates rise too rapidly, total returns may slump for a period. Nonetheless, rising income continues to exert a countervailing effect on price declines, and steadily increasing income can bolster total returns over time. In that manner, patient bondholders can be rewarded over full rising rate periods.

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Finally, a bond’s maturity also influences the magnitude of price variations. Bonds with short maturities are typically less subject to wide price fluctuations than are longer dated bonds. The main reason for this is that principal is returned sooner; consequently, investors face less reinvestment risk.

The return of principal at maturity is the ultimate stabilizing element specific to bonds. No matter how much prices fluctuate over time, bondholders are promised the return of their investment at maturity. There are, of course, some exceptions. If an issuer defaults, a bondholder is likely to lose money. Additionally, if an investor sells a bond before maturity, he or she may receive less — or more — than the par amount, depending on market conditions. The same is true for bond funds because they have no stated maturity — only the individual securities they hold do. Nonetheless, The Bond Fund of America has never posted a negative return over complete rate cycles during its 36-year history.

Those who grasp these fundamental bond characteristics can begin to appreciate the stabilizing effects that bonds can bring to an investment portfolio. Fund president and portfolio counselor John Smet reminds us, “Investors should understand that bonds are in their portfolios to produce income and provide an offset to stock market volatility. Generally, bonds are not as volatile as stocks and haven’t suffered big losses.” Nonetheless, bonds do carry some risks, and not all debt instruments provide the level of stability and security that investors seek. In most cases, individual security selection, diversification and professional management are the added factors that can help reduce risks and promote balanced returns over longer investment periods. This makes bond funds a compelli ng alternative to individual holdings for those seeking more stability in their portfolios.

[Begin Sidebar]

Decades of steady results

This chart shows the fund’s average annual total returns over 10-year rolling periods, beginning with the fund’s inception. Over the extended time periods, the fund has managed to deliver relatively consistent returns, despite briefer periods of bond market volatility. Income has played a vital role in these returns. As shown in the mountain chart on pages 4 to 5, virtually all of the fund’s cumulative gains since inception owe to income reinvested. Results for the fund’s earlier years reflect the high interest rate environment that dominated the late ’70s and early ’80s. Since then, interest rates have declined steadily, touching record lows in the past decade. Nonetheless, the fund has continued to provide positive average annual returns for these extended perio ds, despite lower levels of income.

10-year period	Average annual
ended	total return
12/31/84		10.23	%
12/31/85		11.52
12/31/86		11.24
12/31/87		10.90
12/31/88		11.81
12/31/89		12.54
12/31/90		12.51
12/31/91		13.95
12/31/92		11.95
12/31/93		12.42
12/31/94		10.58
12/31/95		9.83
12/31/96		9.00
12/31/97		9.75
12/31/98		9.19
12/31/99		8.39
12/31/00		8.69
12/31/01		7.37
12/31/02		6.86
12/31/03		6.68
12/31/04		7.84
12/31/05		6.25
12/31/06		6.17
12/31/07		5.58
12/31/08		3.69
12/31/09		4.90
12/31/10		5.01

[End Sidebar]

[Begin Sidebar]

Fund results shown 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. For current information and month-end results, visit americanfunds.com.

Income: The backbone of returns

This chart shows both the income return and the total return for each year since the fund’s inception. As shown, the income return has varied much less than the total return, which includes income plus price fluctuations. Additionally, total returns have been negative only twice in the fund’s 36-year history: 1994 and 2008. On both occasions, results improved significantly the following year aided by a bump in income and recovering bond prices.

[begin bar chart]

Year	Income return			Total return
1974*		4.34	%		3.73	%
1975		9.08	%		12.68	%
1976		9.06	%		18.11	%
1977		8.47	%		5.14	%
1978		8.66	%		2.03	%
1979		9.83	%		3.14	%
1980		11.72	%		3.54	%
1981		13.91	%		6.64	%
1982		14.99	%		32.90	%
1983		11.84	%		9.46	%
1984		12.14	%		11.94	%
1985		12.20	%		26.61	%
1986		10.76	%		15.17	%
1987		9.82	%		1.96	%
1988		10.05	%		10.70	%
1989		10.27	%		10.13	%
1990		9.80	%		3.27	%
1991		9.92	%		21.04	%
1992		8.80	%		11.34	%
1993		7.98	%		14.13	%
1994		7.53	%		-5.02	%
1995		8.54	%		18.25	%
1996		7.57	%		6.71	%
1997		7.34	%		9.24	%
1998		7.03	%		5.17	%
1999		7.06	%		2.29	%
2000		7.63	%		6.19	%
2001		7.22	%		7.15	%
2002		6.71	%		6.11	%
2003		5.69	%		12.22	%
2004		4.76	%		5.85	%
2005		5.15	%		1.94	%
2006		5.07	%		5.88	%
2007		5.39	%		3.37	%
2008		5.88	%		-12.24	%
2009		4.96	%		14.91	%
2010		3.99	%		7.30	%

[end bar chart]

*Partial time period (5/28/74–12/31/74)

[End Sidebar]

Diversification can help steady returns

While most bonds respond to interest rate changes, price fluctuations can vary significantly depending on the type of bond and the impetus for the altered rate environment. We’ve already noted that short-term bonds tend to be less impacted by interest rate movements, but responses can also vary among the different sectors of the market. Consider the following scenarios.

If rates rise because the economy is expanding rapidly, then Treasuries, which are highly sensitive to interest rate moves, are likely to decline in price. Some corporate bonds, however, may be unchanged in such an environment if investors believe that stronger economic growth will benefit the corporate issuer. Conversely, Treasury prices often rally during periods of geopolitical conflict or when the economy falters, because investors then tend to gravitate to the safest securities available. At those times, credit-sensitive bonds, such as corporates, may lag as investors shun riskier investments.

These distinctions, among others, are important for those seeking relatively stable returns over complete economic and interest rate cycles. The principle is simple: There is relative safety in variety and in numbers. Moreover, the increasing complexity of debt financings and the bond market itself argues for a broader mix of holdings — bonds of differing maturities, credit quality, payment structures and provisions. Those with only a handful of debt securities may find stability elusive when the market becomes unsettled or shifts direction.

The Bond Fund of America offers a wide variety of bonds encompassing nearly every segment of the market in a single package. This expansive reach makes the fund an ideal choice for a core bond holding. Altogether, the fund holds more than 1,900 individual securities. These include U.S. Treasuries, mortgage-backed obligations and corporate bonds, as well as a selection of government bonds from outside the U.S., federal agency debt and asset-backed securities. Additionally, these holdings bear maturities that span the traditional bond spectrum from three months out to 30 years. With respect to credit quality, the fund focuses primarily on investment-grade bonds (BBB and above), with a large concentration of AAA-rated bonds (including Treasuries and government mortgages). It also has significant holdin gs of A-rated and BBB-rated debt. Additionally, it maintains a modest exposure to high-yield bonds.

[Begin Pull Quote]

“Once purchased, bonds must be monitored regularly for any deterioration in their risk profile and relative value, as market conditions change constantly.”

[End Pull Quote]

[photo of construction of an elevated roadway]

This wide variety of holdings serves a dual purpose, as John Smet explains. “On one hand, the fund’s broad mandate gives us the freedom to investigate any opportunity that seems promising. At the same time, it can also be an effective risk-control device. No matter how careful you are, problems will occur — a downturn in the economy, a shift in the interest rate cycle, fraud or an unwelcome takeover. If one bond goes bad, however, it will have less of an impact if it’s only 1% of the portfolio than if it’s 10%.”

With this in mind, investors seeking stability from their bond portfolio may be better served by a bond fund rather than individual holdings. John adds, “The average investor would be hard-pressed to replicate the array of debt obligations that form the fund’s portfolio and even more hard-pressed to effectively manage so many bonds through markets as changeable as we have experienced this past decade.”

Active management aids results

While diversification helps to minimize risks by dispersing them broadly throughout a portfolio, professional management takes that a step further through individual bond selection, constant monitoring and continual adjustments to the mix of securities held. Changing relationships among the various sectors of the market can amplify or abate investment risks. Those same changes can also create pockets of opportunities for investors with the resources to find them.

[photo of a construction cone]

“When selecting individual bonds, investors need a precise understanding of the issuer’s credit profile and the bond’s terms and covenants,” explains portfolio counselor David Daigle. Nor is it sufficient to summon this intelligence only when buying bonds. David cautions, “Once purchased, bonds must be monitored regularly for any deterioration in their risk profile and relative value, as market conditions change constantly.”

The portfolio counselors of The Bond Fund of America regularly evaluate a broad range of data that is not normally the focus of individual investors. These include the current shape of the yield curve and the outlook for interest rates, the structure of a bond, its sensitivity to interest rate changes, its covenants and its position in the capital structure. This surveillance allows the portfolio counselors to continuously adjust the mix of holdings to benefit and protect shareholders.

Portfolio counselor Mark Dalzell adds, “The broadly diversified holdings of The Bond Fund of America afford us the advantage of being able to make changes at the margins — rather than large-scale adjustments — to address shifting market and risk scenarios.” This flexibility is an important tool in helping to maintain a relatively high level of current income, especially when interest rates are declining. It is also indispensible for portfolio counselors striving to preserve principal during periods of rising rates.

When interest rates are rising, portfolio counselors can shorten the average maturity of the fund by reducing the number of long-maturity bonds and increasing shorter dated holdings. This can help make the fund less sensitive to rate increases. At the same time, counselors can reinvest the proceeds from maturing bonds in obligations that provide higher yields. By continually adjusting the mix of bond securities in the portfolio, counselors can help the fund meet its objectives and help shareholders meet their financial goals.

In the end, it is the fund’s dual objectives — delivering income and preserving principal — that drive the fund’s investment decisions and contribute to its history of relatively steady returns over extended periods of time. A core holding in The Bond Fund of America can be an important part of a diversified portfolio of stocks and bonds. The relative stability that bonds have provided is critical in planning for future goals, such as a wedding or down payment on a new home, which require some certainty with regard to principal. n

Summary investment portfolio, December 31, 2010

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)
Bonds & notes of U.S. government & government agencies	30.79	%
Mortgage-backed obligations	29.08
Corporate bonds & notes	29.01
Bonds & notes of governments & government agencies outside the U.S.	6.36
Other bonds & notes	1.78
Other securities	0.54
Short-term securities & other assets less liabilities	2.44

[end pie chart]

Portfolio quality summary (percent of net assets)*
U.S. government obligations†	31.4	%
Federal agencies	22.8
AAA	6.4
AA	5.3
A	10.6
BBB	14.4
BB or below	6.2
Unrated	0.5
Short-term securities & other assets less liabilities	2.4
* 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 - 97.02%		(000	)		(000	)	assets
Bonds & notes of U.S. government & government agencies - 30.79%
U.S. Treasury:
0.875% 2011	$	156,250		$	156,613
1.125% 2011  (1)		262,675			264,677
4.625% 2011		133,500			139,163
4.875% 2011		115,250			117,002
1.00% 2012		617,590			622,376
1.00% 2012		185,250			186,769
4.25% 2012		232,000			247,189
4.875% 2012		395,480			415,345
1.125% 2013		431,575			435,166
1.375% 2013		184,900			187,710
1.50% 2013		110,000			111,594
3.375% 2013		154,250			164,258
3.875% 2013		100,000			106,867
4.25% 2013		715,808			779,501
4.25% 2015		100,000			110,746
2.375% 2016		150,000			151,933
2.625% 2016		268,000			274,437
4.50% 2017		159,500			178,516
4.625% 2017		110,700			124,671
3.50% 2018		223,850			235,542
3.75% 2018		387,300			412,021
4.00% 2018		120,000			130,064
8.125% 2019		75,000			104,525
2.625% 2020		149,260			140,806
3.625% 2020		112,800			117,088
7.125% 2023		103,050			138,507
6.875% 2025		124,400			166,346
4.50% 2036		356,707			369,509
4.25% 2039		231,860			228,484
4.50% 2039		225,210			231,392
3.875% 2040		156,750			144,401
4.625% 2040		425,950			446,362
0%-11.25% 2011-2040 (2)		2,040,452			2,168,706			26.78	%
Federal Home Loan Bank:
3.625% 2013		185,000			197,828
1.75%-5.375% 2012-2016		144,000			152,736			.96
Fannie Mae:
1.75% 2013		125,000			127,708
0.625%-6.125% 2011-2014		200,350			202,935			.90
Freddie Mac:
2.50% 2014		100,600			104,266
1.125%-5.25% 2011-2014		173,950			179,210			.77
Other securities					500,650			1.38
					11,273,619			30.79
Mortgage-backed obligations - 29.08%
Federal agency mortgage-backed obligations (3)- 23.72%
Fannie Mae:
3.50% 2025		167,093			168,686
4.50% 2025		102,124			107,326
3.50% 2026		359,500			362,084
6.00% 2038		109,202			118,846
6.50% 2038		128,168			142,572
4.00% 2040		127,414			126,918
4.50% 2040		154,132			158,404
4.50% 2040		112,490			115,608
0%-11.71% 2012-2047 (4)		4,825,525			5,004,990			17.22
Government National Mortgage Assn.:
4.00% 2040		155,623			157,084
4.00% 2040		127,886			129,087
4.50% 2040		141,821			147,479
0%-10.00% 2021-2041 (5)		849,774			864,012			3.54
Freddie Mac 0%-7.50% 2019-2047 (4)		1,002,894			1,061,949			2.90
Other securities					20,664			.06
					8,685,709			23.72
Commercial mortgage-backed securities (3) - 3.87%
Fannie Mae 4.491%-6.088% 2011-2012		94,475			98,147			.27
Other securities					1,320,826			3.60
					1,418,973			3.87
Other mortgage-backed securities - 1.49%
Other securities					545,560			1.49
Total mortgage-backed obligations					10,650,242			29.08
Corporate bonds & notes - 29.01%
Financials - 8.64%
Other securities					3,167,355			8.64
Consumer discretionary - 3.49%
Other securities					1,276,755			3.49
Energy - 3.12%
Other securities					1,141,513			3.12
Industrials - 2.91%
Other securities					1,063,429			2.91
Utilities - 2.63%
Other securities					963,848			2.63
Health care - 2.45%
Other securities					897,785			2.45
Telecommunication services - 2.15%
Other securities					787,157			2.15
Consumer staples - 1.88%
Other securities					692,499			1.88
Other corporate bonds & notes - 1.74%
Other securities					637,513			1.74
Total corporate bonds & notes					10,627,854			29.01
Bonds & notes of governments & government agencies outside the U.S. - 6.36%
Other securities					2,329,411			6.36
Asset-backed obligations - 1.50%
Other securities					547,434			1.50
Municipals - 0.28%
Other securities					101,379			.28
Total bonds & notes (cost: $34,478,676,000)					35,529,939			97.02
							Percent
				Value			of net
Convertible securities - 0.04%					(000	)	assets
Information technology - 0.04%
Other securities					15,247			.04
Total convertible securities (cost: $11,663,000)					15,247			.04
							Percent
				Value			of net
Preferred securities - 0.46%					(000	)	assets
Other - 0.46%
Other securities					169,885			.46
Total preferred securities (cost: $160,629,000)					169,885			.46
							Percent
				Value			of net
Common stocks - 0.04%					(000	)	assets
Other - 0.04%
Other securities					12,540			.04
Total common stocks (cost: $11,276,000)					12,540			.04
							Percent
				Value			of net
Warrants - 0.00%					(000	)	assets
Other - 0.00%
Other securities					324			.00
Total warrants (cost: $11,356,000)					324			.00
	Principal						Percent
	amount			Value			of net
Short-term securities - 2.98%		(000	)		(000	)	assets
Freddie Mac 0.165%-0.25% due 1/11-7/6/2011	$	261,850		$	261,700			.72	%
Federal Home Loan Bank 0.16%-0.36% due 1/4-11/14/2011		234,783			234,594			.64
General Electric Capital Corp. 0.17% due 1/19/2011		100,000			99,991
General Electric Capital Services, Inc. 0.23% due 2/28/2011		50,000			49,984			.41
Private Export Funding Corp. 0.16%-0.26% due 1/20-2/14/2011 (6)		120,000			119,973			.33
Fannie Mae 0.14% due 2/9/2011		33,200			33,195			.09
U.S. Treasury Bill 0.178% due 5/19/2011		22,100			22,087			.06
Other securities					267,732			.73
Total short-term securities (cost: $1,089,204,000)					1,089,256			2.98
Total investment securities (cost: $35,762,804,000)					36,817,191			100.54
Other assets less liabilities					(196,451	)		(.54	)
Net assets				$	36,620,740			100.00	%

"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio. Some of these securities (with an aggregate value of $15,554,000, which represented .04% of the net assets of the fund) may be subject to legal or contractual restrictions on resale.

Investments in affiliates

A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares. Further details on such holdings and related transactions during the year ended December 31, 2010, appear below.

	Beginning shares		Additions		Reductions			Ending shares		Dividend income (000)		Value of affiliate at 12/31/2010 (000)
Clarent Hospital Corp. Liquidating Trust (7)		331,291		-		(331,291	)		-		-		-

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) A portion of this security was pledged as collateral for losses on unsettled forward currency contracts with certain counterparties. The total value of pledged collateral was $252,000, which represented .07% 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) 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 $97,072,000, which represented .27% of the net assets of the fund.

(6) Acquired in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in "Other securities," was $4,147,679,000, which represented 11.33% of the net assets of the fund.

(7) Unaffiliated issuer at 12/31/2010.

See Notes to Financial Statements

Financial statements

Statement of assets and liabilities
at December 31, 2010	(dollars in thousands)
Assets:
Investment securities, at value (cost: $35,762,804)			$	36,817,191
Cash				17,033
Unrealized appreciation on open forward currency contracts				4,550
Receivables for:
Sales of investments		591,907
Sales of fund's shares		39,513
Closed forward currency contracts		3,164
Interest		328,657		963,241
				37,802,015
Liabilities:
Unrealized depreciation on open forward currency contracts				4,409
Payables for:
Purchases of investments		1,002,011
Repurchases of fund's shares		151,671
Closed forward currency contracts		324
Investment advisory services		6,506
Services provided by related parties		15,391
Directors' deferred compensation		482
Other		481		1,176,866
Net assets at December 31, 2010			$	36,620,740
Net assets consist of:
Capital paid in on shares of capital stock			$	39,385,765
Undistributed net investment income				12,164
Accumulated net realized loss				(3,831,982	)
Net unrealized appreciation				1,054,793
Net assets at December 31, 2010			$	36,620,740

	(dollars and shares in thousands, except per-share amounts)
Total authorized capital stock - 5,000,000 shares, $.001 par value (3,003,388 total shares outstanding)
		Net assets		Shares outstanding		Net asset value per share
Class A		$	25,627,312		2,101,781	$	12.19
Class B			891,024		73,076		12.19
Class C			2,931,497		240,422		12.19
Class F-1			1,865,958		153,033		12.19
Class F-2			401,675		32,943		12.19
Class 529-A			898,134		73,659		12.19
Class 529-B			72,640		5,958		12.19
Class 529-C			427,654		35,073		12.19
Class 529-E			48,519		3,979		12.19
Class 529-F-1			53,855		4,417		12.19
Class R-1			99,314		8,145		12.19
Class R-2			831,900		68,227		12.19
Class R-3			1,053,373		86,390		12.19
Class R-4			768,169		63,000		12.19
Class R-5			369,506		30,304		12.19
Class R-6			280,210		22,981		12.19
See Notes to Financial Statements

Statement of operations
for the year ended December 31, 2010	(dollars in thousands)
Investment income:
Income:
Interest (net of non-U.S. taxes of $679)	$	1,650,973
Dividends		809		$	1,651,782
Fees and expenses*:
Investment advisory services		83,015
Distribution services		135,726
Transfer agent services		34,233	��
Administrative services		20,030
Reports to shareholders		1,990
Registration statement and prospectus		903
Directors' compensation		371
Auditing and legal		187
Custodian		1,026
State and local taxes		308
Other		1,517			279,306
Net investment income					1,372,476
Net realized gain and unrealized appreciation
on investments, forward currency contracts and currency:
Net realized gain (loss) on:
Investments (net of non-U.S. taxes of $61; also includes $2,078 net loss from affiliate)		636,618
Forward currency contracts		43,690
Currency transactions		(3,037	)		677,271
Net unrealized appreciation (depreciation) on:
Investments		729,578
Forward currency contracts		(20,210	)
Currency translations		602			709,970
Net realized gain and unrealized appreciation
on investments, forward currency contracts and currency					1,387,241
Net increase in net assets resulting
from operations				$	2,759,717
(*) 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
		2010			2009
Operations:
Net investment income	$	1,372,476		$	1,707,337
Net realized gain (loss) on investments, forward currency contracts and currency transactions		677,271			(2,638,920	)
Net unrealized appreciation on investments, forward currency contracts and currency translations		709,970			6,138,102
Net increase in net assets resulting from operations		2,759,717			5,206,519
Dividends paid to shareholders from net investment income		(1,450,072	)		(1,665,583	)
Net capital share transactions		(4,283,059	)		3,865,207
Total (decrease) increase in net assets		(2,973,414	)		7,406,143
Net assets:
Beginning of year		39,594,154			32,188,011
End of year (including undistributed net investment income:
$12,164 and $9,590, respectively)	$	36,620,740		$	39,594,154
See Notes to Financial Statements

Notes to financial statements

1.   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. In 2009, shareholders approved a proposal to reorganize the fund from a Maryland corporation to a Delaware statutory trust. The reorganization is expected to be completed on March 1, 2011; however, the fund reserves the right to delay the implementation.

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

*Class B and 529-B shares of the fund are not available for purchase.

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.

2.   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 fund follows the significant accounting policies described below, as well as the valuation policies described in the next section on valuation.

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.

Mortgage dollar rolls — The fund may enter into mortgage dollar roll transactions in which the fund sells a mortgage-backed security to a counterparty and simultaneously enters into an agreement with the same counterparty to buy back a similar security on a specific future date at a predetermined price. Risks may arise due to the delayed payment date and the potential inability of counterparties to complete the transaction. Mortgage dollar rolls are accounted for as purchase and sale transactions, which may increase the fund’s port­folio turnover rate.

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.

3.   Valuation

The fund’s investments are reported at fair value as defined by accounting principles generally accepted in the United States of America. 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.

Methods and inputs – The fund uses the following methods and inputs to establish the fair value of its assets and liabilities. Use of particular methods and inputs may vary over time based on availability and relevance as market and economic conditions evolve.

Equity securities are generally 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 generally valued at prices obtained as of approximately 3:00 p.m. New York time from one or more pricing vendors. Vendors value such securities based on one or more of the inputs described in the following table. The table provides examples of inputs that are commonly relevant for valuing particular classes of fixed-income securities in which the fund is authorized to invest. However, these classifications are not exclusive, and any of the inputs may be used to value any other class of fixed-income security.

Fixed-income class	Examples of standard inputs
All	Benchmark yields, transactions, bids, offers, quotations from dealers and trading systems, new issues, spreads and other relationships observed in the markets among comparable securities; and proprietary pricing models such as yield measures calculated using factors such as cash flows, financial or collateral performance and other reference data (collectively referred to as “standard inputs”)
Corporate bonds & notes; convertible securities	Standard inputs and underlying equity of the issuer
Bonds & notes of governments & government agencies	Standard inputs and interest rate volatilities
Mortgage-backed; asset-backed obligations	Standard inputs and cash flows, prepayment information, default rates, delinquency and loss assumptions, collateral characteristics, credit enhancements and specific deal information
Municipal securities	Standard inputs and, for certain distressed securities, cash flows or liquidation values using a net present value calculation based on inputs that include, but are not limited to, financial statements and debt contracts

Where the investment adviser deems it appropriate to do so (such as when vendor prices are unavailable or not deemed to be representative), fixed-income 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.

Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are generally valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates fair 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. 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 inputs may be reviewed in order to make a good faith determination of a security’s fair value. These inputs 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 conditio ns. 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.

Classifications - The fund classifies its assets and liabilities into three levels based on the inputs 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 reflected as Level 2 because the inputs used to determine fair value may not always be quoted prices in an active market.The following tables presentthe fund’s valuation levels as of December 31, 2010 (dollars in thousands):

Investment securities:	Level 1			Level 2			Level 3		Total
Bonds & notes:
Bonds & notes of U.S. government & government agencies	$	-	��	$	11,273,619		$	-	$	11,273,619
Mortgage-backed obligations		-			10,608,977			41,265		10,650,242
Corporate bonds & notes		-			10,620,528			7,326		10,627,854
Bonds & notes of governments & government agencies outside the U.S.		-			2,329,411			-		2,329,411
Asset-backed obligations		-			529,390			18,044		547,434
Municipals		-			101,379			-		101,379
Convertible securities		-			15,247			-		15,247
Preferred securities		-			169,885			-		169,885
Common stocks		4,849			-			7,691		12,540
Warrants		132			-			192		324
Short-term securities		-			1,089,256			-		1,089,256
Total	$	4,981		$	36,737,692		$	74,518	$	36,817,191
Forward currency contracts (1):	Level 1			Level 2			Level 3		Total
Unrealized appreciation on open forward currency contracts	$	-		$	4,550		$	-	$	4,550
Unrealized depreciation on open forward currency contracts		-			(4,409	)		-		(4,409	)
Total	$	-		$	141		$	-	$	141
(1) Forward currency contracts are not included in the investment portfolio.

The following table reconciles the valuation of the fund's Level 3 investment securities and related transactions for the year ended December 31, 2010 (dollars in thousands):
	Beginning value at 1/1/2010		Net purchases and sales		Net  realized loss (2)			Net unrealized appreciation (2)		Net transfers into Level 3(3)		Ending value at 12/31/2010
Investment securities	$	27,221	$	11,216	$	(2,523	)	$	4,053	$	34,551	$	74,518
Net unrealized depreciation during the period on Level 3 investment securities held at December 31, 2010 (dollars in thousands) (2):												$	(2,930	)
(2) Net realized loss and unrealized appreciation (depreciation) are included in the related amounts on investments in the statement of operations.
(3) Transfers into or out of Level 3 are based on the beginning market value of the quarter in which they occurred.

4.   Risk factors

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

Market conditions — The prices of, and the income generated by, the securities held by the fund may decline due to market conditions and other factors, including those directly involving the issuers of securities held by the fund.

Investing in bonds — Rising interest rates will generally cause the prices of bonds and other debt securities to fall. Longer maturity debt securities may be subject to greater price fluctuations than shorter maturity debt securities. Bonds and other debt securities are 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.

Investing in mortgage-backed and asset-backed securities — Many types of bonds and other debt securities, including mortgage-backed securities, are subject to prepayment risk. If interest rates fall and the loans underlying these securities are prepaid faster than expected, the fund may have to reinvest the prepaid principal in lower yielding securities, thus reducing the fund’s income. Conversely, if interest rates increase and the loans underlying the securities are prepaid more slowly than expected, the expected duration of the securities may be extended. This reduces the potential for the fund to invest the principal in higher yielding securities.

Investing in securities backed by the U.S. government — Securities backed by the U.S. Treasury or the full faith and credit of the U.S. government are 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. government.

Thinly traded securities — There may be little trading in the secondary market for particular bonds or other debt securities, which may make them more difficult to value or sell.

Investing outside the U.S. — Securities of issuers domiciled outside the U.S., or with significant operations outside the U.S., may lose value because of political, social or economic developments in the country or region in which the issuer operates. These securities may also lose value due to changes in the exchange rate of the country’s currency against the U.S. dollar. Securities markets in certain countries may be more volatile and/or less liquid than those in the U.S. Investments outside the U.S. may also be subject to different settlement and account­ing practices and different regulatory, legal and reporting standards than those in the U.S. These risks may be heightened in connection with investments in developing count ries.

Management — The investment adviser to the fund actively manages the fund’s investments. Consequently, the fund is subject to the risk that the techniques and risk analyses employed by the investment adviser in this process may not produce the desired results. This could cause the fund to lose value or its results to lag relevant benchmarks or other funds with similar objectives.

5.   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, 2010, 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 2007, by state tax authorities for tax years before 2006 and by tax authorities outside the U.S. for tax years before 2005.

Non-U.S. taxation – Dividend and interest income is recorded net of non-U.S. taxes paid. Gains realized by the fund on the sale of securities in certain countries are subject to non-U.S. taxes.

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 gainsfor 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; unrealized appreciation of certain investments in securities outside the U.S.; deferred expenses; cost of investments sold; paydowns on fixed-income securities; 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, 2010, the fund reclassified $31,000 from undistributed net investment income and $11,250,000 from accumulated net realized loss to capital paid in on shares of capital stock; and $80,201,000 from accumulated net realized loss to undistributed net investment income to align financial reporting with tax reporting.

As of December 31, 2010, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:

	(dollars in thousands)
Undistributed ordinary income				$	25,126
Capital loss carryforwards*:
Expiring 2014	$	(265	)
Expiring 2015		(218	)
Expiring 2016		(841,762	)
Expiring 2017		(2,938,200	)		(3,780,445	)
Gross unrealized appreciation on investment securities					1,368,824
Gross unrealized depreciation on investment securities					(376,176	)
Net unrealized appreciation on investment securities					992,648
Cost of investment securities					35,824,543
*Reflects the utilization of capital loss carryforwards of $559,485,000. 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.

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), net capital losses recognized after December 31, 2010, may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Under the law in effect prior to the Act, pre-enactment net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses.

Tax-basis distributions paid to shareholders from ordinary income were as follows (dollars in thousands):

	Year ended December 31
Share class	2010		2009
Class A	$	1,039,685	$	1,171,526
Class B		32,389		49,620
Class C		95,182		108,139
Class F-1		83,521		126,279
Class F-2		21,639		20,625
Class 529-A		31,721		29,648
Class 529-B		2,435		3,028
Class 529-C		12,078		11,797
Class 529-E		1,574		1,491
Class 529-F-1		2,000		1,600
Class R-1		3,106		3,811
Class R-2		25,249		26,641
Class R-3		38,239		44,173
Class R-4		30,505		34,735
Class R-5		18,226		27,537
Class R-6*		12,523		4,933
Total	$	1,450,072	$	1,665,583
*Class R-6 was offered beginning May 1, 2009.

6.   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 provides for monthly fees accrued daily. These fees are based on a series of decreasing 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 series of decreasing 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, 2010, the investment advisory services fee was $83,015,000, which was equivalent to an annualized rate of 0.211% of average dailynet 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 below. In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans.All share classes with a plan may use up to 0.25% of average daily net assets to pay service fees, or to compens ate 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, 2010, there were no unreimbursed expenses subject to reimbursement for Classes A or 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 for all share classes, except Classes A and B, to provide certain services, including transfer agent and recordkeeping services; coordinating, monitoring, assisting and overseeing third-party service providers; and educating advisers and shareholders about the impact of market-related events, tax laws affecting investments, retirement plan restrictions, exchange limitations and other related matters. 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 series of decreasing 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 Commonw ealth of Virginia is not considered a related party.

Expenses under the agreements described on the previous page for the year ended December 31, 2010, were as follows (dollars in thousands):

					Administrative services
Share class	Distribution services		Transfer agent services		CRMC administrative services		Transfer agent services		Commonwealth of Virginia administrative services
Class A	$	66,283	$	32,997	Not applicable		Not applicable		Not applicable
Class B		10,557		1,236	Not applicable		Not applicable		Not applicable
Class C		31,627	Included in administrative services		$	4,461	$	743	Not applicable
Class F-1		5,468				2,982		224	Not applicable
Class F-2	Not applicable					680		35	Not applicable
Class 529-A		1,811				766		153	$	849
Class 529-B		823				74		29		82
Class 529-C		4,089				370		109		410
Class 529-E		228				41		8		46
Class 529-F-1		-				46		9		51
Class R-1		1,015				128		42	Not applicable
Class R-2		6,318				1,244		2,315	Not applicable
Class R-3		5,487				1,585		734	Not applicable
Class R-4		2,020				1,182		34	Not applicable
Class R-5	Not applicable					432		13	Not applicable
Class R-6	Not applicable					152		1	Not applicable
Total	$	135,726	$	34,233	$	14,143	$	4,449	$	1,438

Directors’ deferred compensation – Directors who are unaffiliated with CRMCmay elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Directors’ compensation of $371,000, shown on the accompanying financial statements, includes $337,000 in current fees (either paid in cash or deferred) and a net increase of $34,000 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.

7.   Capital share transactions

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

Share class	Sales(*)				Reinvestments of dividends and distributions				Repurchases(*)						Net (decrease) increase
	Amount		Shares		Amount		Shares		Amount			Shares			Amount			Shares
Year ended December 31, 2010
Class A	$	4,624,435		380,821	$	964,456		79,244	$	(8,217,301	)		(675,397	)	$	(2,628,410	)		(215,332	)
Class B		89,940		7,395		30,081		2,474		(478,979	)		(39,446	)		(358,958	)		(29,577	)
Class C		560,234		46,123		85,538		7,029		(1,008,776	)		(82,905	)		(363,004	)		(29,753	)
Class F-1		598,525		49,211		77,018		6,331		(1,217,084	)		(99,820	)		(541,541	)		(44,278	)
Class F-2		178,617		14,696		16,299		1,342		(550,601	)		(45,543	)		(355,685	)		(29,505	)
Class 529-A		213,708		17,574		31,601		2,595		(131,217	)		(10,771	)		114,092			9,398
Class 529-B		9,746		802		2,412		198		(28,978	)		(2,378	)		(16,820	)		(1,378	)
Class 529-C		112,286		9,237		12,025		987		(78,819	)		(6,469	)		45,492			3,755
Class 529-E		12,886		1,059		1,567		129		(7,601	)		(625	)		6,852			563
Class 529-F-1		17,020		1,400		1,989		163		(11,236	)		(923	)		7,773			640
Class R-1		31,352		2,580		3,071		252		(41,182	)		(3,393	)		(6,759	)		(561	)
Class R-2		290,256		23,876		25,004		2,054		(304,919	)		(25,034	)		10,341			896
Class R-3		357,644		29,422		37,864		3,111		(469,110	)		(38,562	)		(73,602	)		(6,029	)
Class R-4		304,919		25,093		30,205		2,481		(380,651	)		(31,331	)		(45,527	)		(3,757	)
Class R-5		171,239		14,109		18,013		1,480		(286,498	)		(23,505	)		(97,246	)		(7,916	)
Class R-6		105,738		8,701		12,522		1,028		(98,317	)		(8,078	)		19,943			1,651
Total net increase
(decrease)	$	7,678,545		632,099	$	1,349,665		110,898	$	(13,311,269	)		(1,094,180	)	$	(4,283,059	)		(351,183	)
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(†)		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
* Includes exchanges between share classes of the fund.
(†)Class R-6 was offered beginning May 1, 2009.

8.   Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $23,927,591,000 and $27,156,678,000, respectively, during the year ended December 31, 2010.

9.   Forward currency contracts

The fund has entered 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. To reduce these risks, the fund has entered into a collateral program with certain counterparties. The program calls for the fund to either receive or pledge collateral based on the net gain or loss on unsettled forward currency contracts by counterparty.The purpose of the collateral is to cover potential losses that could occur in the event that either party can not meet their contractual obligations.

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 settlement 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, 2010, the fund had open forward currency contracts to purchase or sell currencies, as shown on the following table. The open forward currency contracts shown are generally indicative of the level of activity over the prior 12-month period.

							(amounts in thousands)
			Contract amount				Unrealized appreciation (depreciation) at 12/31/2010
	Settlement date	Counterparty	Receive		Deliver
Purchases:
Australian dollars	1/14/2011	JPMorgan Chase	$	A19,825	$	19,500		739
Singapore dollars	1/12/2011	HSBC Bank	$	S25,381	$	19,500		277
								1,016
Sales:
Brazilian reais	1/13/2011	JPMorgan Chase	$	34,099	BRL58,800			(1,218	)
British pounds	2/15/2011	UBS AG	$	54,195	£	33,640		1,597
Danish kroner	1/10/2011	UBS AG	$	47,374	DKr265,000			(141	)
Euros	1/6/2011	Societe Generale	$	672	€	500		13
Euros	1/6/2011	JPMorgan Chase	$	61,825	€	46,680		(554	)
Euros	1/11/2011	Barclays Bank PLC	$	36,926	€	28,230		(798	)
Euros	1/11/2011	HSBC Bank	$	20,658	€	14,830		841
Euros	1/13/2011	Bank of New York Mellon	$	7,150	€	5,500		(194	)
Euros	2/17/2011	Societe Generale	$	14,120	€	10,375		258
Euros	2/23/2011	JPMorgan Chase	$	102	€	75		2
Euros	2/23/2011	UBS AG	$	55	€	40		1
Euros	2/25/2011	HSBC Bank	$	337	€	250		3
Euros	3/8/2011	JPMorgan Chase	$	1,324	€	1,000		(12	)
Euros	3/8/2011	Bank of New York Mellon	$	1,985	€	1,500		(19	)
Euros	3/15/2011	UBS AG	$	65,823	€	49,640		(495	)
Euros	3/16/2011	UBS AG	$	4,877	€	3,625		35
Euros	3/29/2011	Barclays Bank PLC	$	43,533	€	33,140		(738	)
Hungarian forints	2/10/2011	HSBC Bank	$	16,735	HUF3,332,855			784
Polish zloty	3/3/2011	HSBC Bank	$	3,724	PLN11,500			(145	)
Polish zloty	3/15/2011	UBS AG	$	3,772	PLN11,500			(95	)
								(875	)
Forward currency contracts - net								141

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 12/31/2010	$	11.80	$	.44	$	.41		$	.85		$	(.46	)	$	12.19		7.30	%	$	25,627		.59	%		.59	%		3.61	%
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
Class B:
Year ended 12/31/2010		11.80		.35		.41			.76			(.37	)		12.19		6.50			891		1.35			1.35			2.88
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
Class C:
Year ended 12/31/2010		11.80		.35		.41			.76			(.37	)		12.19		6.45			2,931		1.39			1.39			2.81
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
Class F-1:
Year ended 12/31/2010		11.80		.44		.41			.85			(.46	)		12.19		7.27			1,866		.62			.62			3.59
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
Class F-2:
Year ended 12/31/2010		11.80		.47		.41			.88			(.49	)		12.19		7.55			402		.36			.36			3.89
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 12/31/2010		11.80		.44		.41			.85			(.46	)		12.19		7.24			898		.65			.65			3.53
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
Class 529-B:
Year ended 12/31/2010		11.80		.34		.41			.75			(.36	)		12.19		6.39			73		1.45			1.45			2.76
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
Class 529-C:
Year ended 12/31/2010		11.80		.34		.41			.75			(.36	)		12.19		6.40			428		1.44			1.44			2.74
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
Class 529-E:
Year ended 12/31/2010		11.80		.40		.41			.81			(.42	)		12.19		6.93			49		.93			.93			3.24
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
Class 529-F-1:
Year ended 12/31/2010	$	11.80	$	.46	$	.41		$	.87		$	(.48	)	$	12.19		7.47	%	$	54		.44	%		.44	%		3.74	%
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
Class R-1:
Year ended 12/31/2010		11.80		.35		.41			.76			(.37	)		12.19		6.47			99		1.38			1.38			2.82
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
Class R-2:
Year ended 12/31/2010		11.80		.34		.41			.75			(.36	)		12.19		6.44			832		1.39			1.39			2.79
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
Class R-3:
Year ended 12/31/2010		11.80		.40		.41			.81			(.42	)		12.19		6.94			1,053		.93			.93			3.26
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
Class R-4:
Year ended 12/31/2010		11.80		.44		.41			.85			(.46	)		12.19		7.27			768		.62			.62			3.57
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
Class R-5:
Year ended 12/31/2010		11.80		.48		.41			.89			(.50	)		12.19		7.59			370		.32			.32			3.88
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
Class R-6:
Year ended 12/31/2010		11.80		.48		.41			.89			(.50	)		12.19		7.64			280		.27			.27			3.90
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
	2010			2009			2008			2007			2006
Portfolio turnover rate for all share classes		99	%		84	%		57	%		58	%		53	%

(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, 2010, 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, 2010, 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, 2010, 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 7, 2011

Expense example                                                                                                                        0;            

                 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, 2010, through December 31, 2010).

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 additi on, 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 7/1/2010		Ending account value 12/31/2010		Expenses paid during period*		Annualized expense ratio
Class A -- actual return	$	1,000.00	$	1,019.47	$	2.90		.57	%
Class A -- assumed 5% return		1,000.00		1,022.33		2.91		.57
Class B -- actual return		1,000.00		1,015.77		6.76		1.33
Class B -- assumed 5% return		1,000.00		1,018.50		6.77		1.33
Class C -- actual return		1,000.00		1,015.52		7.01		1.38
Class C -- assumed 5% return		1,000.00		1,018.25		7.02		1.38
Class F-1 -- actual return		1,000.00		1,019.24		3.16		.62
Class F-1 -- assumed 5% return		1,000.00		1,022.08		3.16		.62
Class F-2 -- actual return		1,000.00		1,020.57		1.78		.35
Class F-2 -- assumed 5% return		1,000.00		1,023.44		1.79		.35
Class 529-A -- actual return		1,000.00		1,019.16		3.26		.64
Class 529-A -- assumed 5% return		1,000.00		1,021.98		3.26		.64
Class 529-B -- actual return		1,000.00		1,015.22		7.31		1.44
Class 529-B -- assumed 5% return		1,000.00		1,017.95		7.32		1.44
Class 529-C -- actual return		1,000.00		1,015.26		7.26		1.43
Class 529-C -- assumed 5% return		1,000.00		1,018.00		7.27		1.43
Class 529-E -- actual return		1,000.00		1,017.76		4.73		.93
Class 529-E -- assumed 5% return		1,000.00		1,020.52		4.74		.93
Class 529-F-1 -- actual return		1,000.00		1,020.21		2.19		.43
Class 529-F-1 -- assumed 5% return		1,000.00		1,023.04		2.19		.43
Class R-1 -- actual return		1,000.00		1,015.59		6.96		1.37
Class R-1 -- assumed 5% return		1,000.00		1,018.30		6.97		1.37
Class R-2 -- actual return		1,000.00		1,015.57		6.96		1.37
Class R-2 -- assumed 5% return		1,000.00		1,018.30		6.97		1.37
Class R-3 -- actual return		1,000.00		1,017.78		4.68		.92
Class R-3 -- assumed 5% return		1,000.00		1,020.57		4.69		.92
Class R-4 -- actual return		1,000.00		1,019.28		3.16		.62
Class R-4 -- assumed 5% return		1,000.00		1,022.08		3.16		.62
Class R-5 -- actual return		1,000.00		1,020.75		1.63		.32
Class R-5 -- assumed 5% return		1,000.00		1,023.59		1.63		.32
Class R-6 -- actual return		1,000.00		1,021.00		1.38		.27
Class R-6 -- assumed 5% return		1,000.00		1,023.84		1.38		.27
*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, 2010:

Qualified dividend income	$	21,230,000
Corporate dividends received deduction	$	2,222,000
U.S. government income that may be exempt from state taxation	$	262,899,000

Individual shareholders should refer to their Form 1099 or other tax information, which was mailed in January 2011, to determine the calendar year amounts to be included on their 2010 tax returns. Shareholders should consult their tax advisers.

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, 2010:
							10 years1/
	1 year			5 years			Life of class
Class B shares2
Reflecting applicable contingent deferred sales charge
(CDSC), maximum of 5%, payable only if shares
are sold within six years of purchase		1.50	%		2.34	%		4.39	%
Not reflecting CDSC		6.50			2.68			4.39
Class C shares — first sold 3/15/01
Reflecting CDSC, maximum of 1%, payable only
if shares are sold  within one year of purchase		5.45			2.63			3.90
Not reflecting CDSC		6.45			2.63			3.90
Class F-1 shares3 — first sold 3/15/01
Not reflecting annual asset-based fee charged
by sponsoring firm		7.27			3.45			4.71
Class F-2 shares3 — first sold 8/4/08
Not reflecting annual asset-based fee charged
by sponsoring firm		7.55			—			4.81
Class 529-A shares4 — first sold 2/15/02
Reflecting 3.75% maximum sales charge		3.22			2.60			4.26
Not reflecting maximum sales charge		7.24			3.39			4.72
Class 529-B shares2,4 — first sold 2/15/02
Reflecting applicable CDSC, maximum of 5%, payable
only if shares are sold within six years of purchase		1.39			2.23			3.92
Not reflecting CDSC		6.39			2.56			3.92
Class 529-C shares4 — first sold 2/19/02
Reflecting CDSC, maximum of 1%, payable only
if shares are sold within one year of purchase		5.40			2.57			3.88
Not reflecting CDSC		6.40			2.57			3.88
Class 529-E shares3,4 — first sold 3/7/02		6.93			3.09			4.43
Class 529-F-1 shares3,4 — first sold 9/26/02
Not reflecting annual asset-based fee charged
by sponsoring firm		7.47			3.60			5.11

1Applicable to Class B shares only. All other share classes reflect results for the life of the class.

2These shares are not available for purchase.

3These shares are sold without any initial or contingent deferred sales charge.

4Results 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. Applicable fund results shown reflect the waiver, without which they would have been lower. See the Financial Highlights table on pages 28 and 29 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” directors1
	Year first
	elected a
	director of
Name and age	the fund2	Principal occupation(s) during past five years
Lee A. Ault III, 74	2010	Private investor and corporate director; former
		Chairman of the Board, In-Q-Tel, Inc. (technology
		venture company)
William H. Baribault, 65	2010	Chairman of the Board and CEO, Oakwood
		Enterprises (private investment and consulting)
James G. Ellis, 64	2006	Dean and Professor of Marketing, Marshall School of
		Business, University of Southern California
Martin Fenton, 75	1989	Chairman of the Board, Senior Resource Group LLC
Chairman of the Board		(development and management of senior living communities)
(Independent and Non-Executive)
Leonard R. Fuller, 64	1994	President and CEO, Fuller Consulting (financial
		management consulting firm)
W. Scott Hedrick, 65	2010	Founding General Partner, InterWest Partners
		(venture capital firm)
R. Clark Hooper, 64	2005	Private investor; former President, Dumbarton Group
		LLC (securities industry consulting)
Merit E. Janow, 52	2010	Professor, Columbia University, School of
		International and Public Affairs; former Member,
		World Trade Organization Appellate Body
Laurel B. Mitchell, Ph.D., 55	2009	Clinical Professor and Director, Accounting Program,
		University of Redlands
Frank M. Sanchez, 67	1999	Principal, The Sanchez Family Corporation dba
		McDonald’s Restaurants (McDonald’s licensee)
Margaret Spellings, 53	2010	President and CEO, Margaret Spellings & Company;
		Executive Vice President, National Chamber
		Foundation and Senior Advisor to the President and
		CEO, U.S. Chamber of Commerce; 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
Steadman Upham, Ph.D., 61	2007	President and Professor of Anthropology,
		The University of Tulsa
“Independent” directors1
	Number of
	portfolios
	in fund
	complex3
	overseen by
Name and age	director	Other directorships4 held by director
Lee A. Ault III, 74	40	Anworth Mortgage Asset Corporation;
		Office Depot, Inc.
William H. Baribault, 65	40	None
James G. Ellis, 64	44	Quiksilver, Inc.
Martin Fenton, 75	40	Capital Private Client Services Funds
Chairman of the Board
(Independent and Non-Executive)
Leonard R. Fuller, 64	44	None
W. Scott Hedrick, 65	40	Hot Topic, Inc.; Office Depot, Inc.
R. Clark Hooper, 64	46	JPMorgan Value Opportunities Fund, Inc.;
		The Swiss Helvetia Fund, Inc.
Merit E. Janow, 52	43	The NASDAQ Stock Market LLC;
		Trimble Navigation Limited
Laurel B. Mitchell, Ph.D., 55	40	None
Frank M. Sanchez, 67	40	None
Margaret Spellings, 53	40	None
Steadman Upham, Ph.D., 61	43	None

See page 35 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 fund2	principal underwriter of the fund
Paul G. Haaga, Jr., 62	1985	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, 81	1974	Senior Vice President — Fixed Income, Capital
		Research and Management Company; Director,
		Capital Research and Management Company
“Interested” directors5
	Number of
	portfolios
	in fund
	complex3
Name, age and	overseen by
position with fund	director	Other directorships4 held by director
Paul G. Haaga, Jr., 62	14	None
Vice Chairman of the Board
Abner D. Goldstine, 81	2	None

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

Other officers
	Year first
	elected	Principal occupation(s) during past five years
Name, age and	an officer	and positions held with affiliated entities
position with fund	of the fund2	or the principal underwriter of the fund
John H. Smet, 54	1994	Senior Vice President — Fixed Income, Capital
President		Research and Management Company; Director,
		The Capital Group Companies, Inc.6
David C. Barclay, 54	1997	Senior Vice President — Fixed Income, Capital
Senior Vice President		Research and Management Company; Director,
		Capital Research and Management Company
Mark R. Macdonald, 51	2001	Senior Vice President — Fixed Income, Capital
Senior Vice President		Research and Management Company; Director,
		Capital Research and Management Company
Mark H. Dalzell, 56	2009	Senior Vice President — Fixed Income, Capital
Vice President		Research and Management Company
Kristine M. Nishiyama, 40	2003	Senior Vice President and Senior Counsel — Fund
Vice President		Business Management Group, Capital Research and
		Management Company; Vice President and Senior Counsel, Capital Bank and Trust Company6
Courtney R. Taylor, 36	2006	Assistant Vice President — Fund Business
Secretary		Management Group, Capital Research and
		Management Company
Ari M. Vinocor, 36	2007	Vice President — Fund Business Management
Treasurer		Group, Capital Research and Management Company
Steven I. Koszalka, 46	2010	Vice President — Fund Business Management
Assistant Secretary		Group, Capital Research and Management Company
M. Susan Gupton, 37	2008	Vice President — Fund Business Management
Assistant Treasurer		Group, Capital Research and Management Company
Dori Laskin, 59	2010	Vice President — Fund Business Management
Assistant Treasurer		Group, Capital Research and Management Company

1The term “independent” director refers to a director who is not an “interested person” of the fund within the meaning of the Investment Company Act of 1940.

2Directors and officers of the fund serve until their resignation, removal or retirement.

3Capital Research and Management Company manages the American Funds, consisting of 33 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,® which is composed of 10 funds and is available through tax-deferred retirement plans and IRAs; and Endowments,SM which is available to certain nonprofit organizations.

4This 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.

5“Interested persons” within the meaning of the Investment Company Act of 1940, 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.

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

(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 prospectus and summary 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, 2010, 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 prospectus or summary prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after March 31, 2011, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.

   

What makes American Funds different?

For nearly 80 years, we have followed a consistent philosophy to benefit our investors. Our 33 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 more than 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 26 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 funds

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

American Balanced Fund®

American Funds Global Balanced FundSM

•Bond funds

Emphasis on current income through bonds

American Funds Mortgage FundSM

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

American Funds Tax-Exempt Fund of New YorkSM

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 Fund®

•American Funds Target Date Retirement Series®

The Capital Group Companies

American FundsCapital Research and ManagementCapital InternationalCapital GuardianCapital Bank and Trust

Lit. No. MFGEAR-908-0211P

Litho in USA BG/Q/8053-S26195

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 Frank M. Sanchez, 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 s tatements and condition.

ITEM 4 – Principal Accountant Fees and Services

Registrant:
	a)  Audit Fees:
		2009	$157,000
		2010	$137,000
	b)  Audit-Related Fees:
		2009	$9,000
		2010	$13,000
		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:
		2009	$7,000
		2010	$15,000
		The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns.
	d)  All Other Fees:
		2009	None
		2010	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:
		2009	$1,029,000
		2010	$1,092,000
		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:
		2009	None
		2010	$15,000
		The tax fees consist of consulting services relating to the Registrant’s investments.
	d)  All Other Fees:
		2009	$2,000
		2010	$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-audi t 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 $1,477,000 for fiscal year 2009 and $1,562,000 for fiscal year 2010. 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

Bond Fund of AmericaSM

Investment portfolio

December 31, 2010

Bonds & notes — 97.02%	Principal amount (000)			Value (000)
BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 30.79%
U.S. Treasury 0.875% 2011	$	156,250		$	156,613
U.S. Treasury 0.875% 2011		97,000			97,165
U.S. Treasury 0.875% 2011		30,000			30,087
U.S. Treasury 1.125% 20111		262,675			264,677
U.S. Treasury 4.50% 2011		5,000			5,034
U.S. Treasury 4.625% 2011		133,500			139,163
U.S. Treasury 4.875% 2011		115,250			117,002
U.S. Treasury 5.00% 2011		37,100			38,193
U.S. Treasury 5.00% 2011		2,150			2,162
U.S. Treasury 0.50% 2012		23,245			23,218
U.S. Treasury 0.625% 2012		41,600			41,729
U.S. Treasury 1.00% 2012		617,590			622,376
U.S. Treasury 1.00% 2012		185,250			186,769
U.S. Treasury 1.375% 2012		54,900			55,729
U.S. Treasury 1.875% 2012		4,600			4,698
U.S. Treasury 2.00% 20122		63,103			65,432
U.S. Treasury 4.25% 2012		232,000			247,189
U.S. Treasury 4.50% 2012		15,000			15,775
U.S. Treasury 4.875% 2012		395,480			415,345
U.S. Treasury 0.75% 2013		4,455			4,423
U.S. Treasury 1.125% 2013		431,575			435,166
U.S. Treasury 1.375% 2013		184,900			187,710
U.S. Treasury 1.375% 2013		34,200			34,724
U.S. Treasury 1.50% 2013		110,000			111,594
U.S. Treasury 1.875% 20132		29,769			31,778
U.S. Treasury 2.75% 2013		50,000			52,269
U.S. Treasury 3.125% 2013		50,000			53,052
U.S. Treasury 3.375% 2013		154,250			164,258
U.S. Treasury 3.875% 2013		100,000			106,867
U.S. Treasury 4.25% 2013		715,808			779,501
U.S. Treasury 1.75% 2014		78,900			80,460
U.S. Treasury 1.875% 2014		46,500			47,626
U.S. Treasury 2.00% 20142		56,964			61,208
U.S. Treasury 2.375% 2014		10,500			10,879
U.S. Treasury 2.625% 2014		50,000			52,302
U.S. Treasury 4.25% 2014		3,300			3,641
U.S. Treasury 1.375% 2015		5,545			5,389
U.S. Treasury 1.75% 2015		5,300			5,283
U.S. Treasury 1.625% 20152		85,216			90,934
U.S. Treasury 1.875% 2015		57,225			57,460
U.S. Treasury 2.125% 2015		38,250			38,456
U.S. Treasury 4.00% 2015		74,675			81,824
U.S. Treasury 4.25% 2015		100,000			110,746
U.S. Treasury 11.25% 2015		50,520			70,020
U.S. Treasury 2.00% 20162		9,091			9,910
U.S. Treasury 2.375% 2016		150,000			151,933
U.S. Treasury 2.625% 2016		268,000			274,437
U.S. Treasury 3.00% 2016		76,615			79,560
U.S. Treasury 3.25% 2016		50,000			52,642
U.S. Treasury 5.125% 2016		66,500			76,639
U.S. Treasury 7.50% 2016		52,200			67,114
U.S. Treasury 2.50% 2017		94,950			94,602
U.S. Treasury 3.25% 2017		50,000			52,234
U.S. Treasury 4.50% 2017		159,500			178,516
U.S. Treasury 4.625% 2017		110,700			124,671
U.S. Treasury 8.75% 2017		25,000			34,338
U.S. Treasury 8.875% 2017		17,100			23,761
U.S. Treasury 3.50% 2018		223,850			235,542
U.S. Treasury 3.75% 2018		387,300			412,021
U.S. Treasury 4.00% 2018		120,000			130,064
U.S. Treasury 2.125% 20192		5,144			5,701
U.S. Treasury 2.75% 2019		34,600			34,161
U.S. Treasury 3.625% 2019		43,575			45,531
U.S. Treasury 8.125% 2019		75,000			104,525
U.S. Treasury 2.625% 2020		149,260			140,806
U.S. Treasury 2.625% 2020		22,120			20,973
U.S. Treasury 3.50% 2020		28,700			29,404
U.S. Treasury 3.625% 2020		112,800			117,088
U.S. Treasury 8.50% 2020		8,000			11,451
U.S. Treasury 8.75% 2020		37,800			55,238
U.S. Treasury 8.00% 2021		27,100			38,352
U.S. Treasury 7.125% 2023		103,050			138,507
U.S. Treasury 7.50% 2024		26,500			37,153
U.S. Treasury 6.875% 2025		124,400			166,346
U.S. Treasury 7.625% 2025		5,600			7,945
U.S. Treasury 6.00% 2026		40,200			49,726
U.S. Treasury 6.25% 2030		11,175			14,372
U.S. Treasury 5.375% 2031		6,750			7,880
U.S. Treasury 4.50% 2036		356,707			369,509
U.S. Treasury 4.375% 2038		20,065			20,286
U.S. Treasury 4.50% 2038		14,100			14,538
U.S. Treasury 3.50% 2039		45,000			38,792
U.S. Treasury 4.25% 2039		231,860			228,484
U.S. Treasury 4.50% 2039		225,210			231,392
U.S. Treasury 3.875% 2040		156,750			144,401
U.S. Treasury 4.25% 2040		7,750			7,625
U.S. Treasury 4.375% 2040		65,900			66,229
U.S. Treasury 4.625% 2040		425,950			446,362
U.S. Treasury 0% 2040		43,900			11,599
Federal Home Loan Bank 1.75% 2012		69,000			70,294
Federal Home Loan Bank, Series 363, 4.50% 2012		50,000			53,540
Federal Home Loan Bank 3.625% 2013		185,000			197,828
Federal Home Loan Bank 5.375% 2016		25,000			28,902
Fannie Mae 1.75% 2011		20,000			20,070
Fannie Mae 0.625% 2012		83,000			83,166
Fannie Mae, Series 2, 1.25% 2012		70,100			70,827
Fannie Mae 6.125% 2012		20,000			21,358
Fannie Mae 1.75% 2013		125,000			127,708
Fannie Mae 2.50% 2014		7,250			7,514
Freddie Mac 5.25% 2011		20,000			20,544
Freddie Mac 1.125% 2012		23,950			24,153
Freddie Mac 1.75% 2012		50,000			50,882
Freddie Mac 2.125% 2012		20,000			20,487
Freddie Mac 2.50% 2014		100,600			104,266
Freddie Mac 3.00% 2014		60,000			63,144
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 0.286% 20123		50,000			50,038
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 0.304% 20123		11,020			11,031
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 1.875% 2012		20,000			20,389
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 1.875% 2012		20,000			20,366
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 1.875% 2012		10,000			10,187
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 2.125% 2012		11,000			11,253
United States Government Agency-Guaranteed (FDIC insured), Citigroup Inc. 2.25% 2012		25,050			25,765
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 1.625% 2011		8,250			8,251
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 1.80% 2011		9,665			9,694
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 2.125% 2012		52,500			53,868
United States Government Agency-Guaranteed (FDIC insured), General Electric Capital Corp., Series G, 2.25% 2012		29,250			29,882
United States Government Agency-Guaranteed (FDIC insured), Ally Financial Inc. 1.75% 2012		27,500			28,005
United States Government Agency-Guaranteed (FDIC insured), Ally Financial Inc. 2.20% 2012		32,500			33,388
CoBank ACB 7.875% 20184		23,615			26,285
CoBank ACB 0.902% 20223,4		41,365			32,801
United States Government Agency-Guaranteed (FDIC insured), Goldman Sachs Group, Inc. 3.25% 2012		25,000			25,895
United States Government Agency-Guaranteed (FDIC insured), State Street Corp. 2.15% 2012		20,000			20,409
United States Government Agency-Guaranteed (FDIC insured), Bank of America Corp. 2.375% 2012		17,500			17,941
Federal Farm Credit Banks, Consolidated Systemwide Designated Bonds, 2.625% 2014		5,000			5,201
Federal Farm Credit Banks, Consolidated Systemwide Designated Bonds, 3.00% 2014		10,000			10,512
Federal Agricultural Mortgage Corp. 4.875% 20114		10,000			10,014
Federal Agricultural Mortgage Corp. 5.125% 20174		5,000			5,351
Tennessee Valley Authority 5.25% 2039		13,750			14,529
United States Government Agency-Guaranteed (FDIC insured), John Deere Capital Corp. 2.875% 2012		10,000			10,333
United States Agency for International Development, Republic of Egypt 4.45% 2015		5,000			5,454
Private Export Funding Corp., Series W, 5.00% 2016		3,400			3,808
					11,273,619
MORTGAGE-BACKED OBLIGATIONS — 29.08%
FEDERAL AGENCY MORTGAGE-BACKED OBLIGATIONS5 — 23.72%
Fannie Mae 4.89% 2012		25,000			25,558
Fannie Mae, Series 2002-15, Class PG, 6.00% 2017		4,072			4,384
Fannie Mae 4.00% 2019		20,385			21,262
Fannie Mae 4.50% 2019		13,475			14,241
Fannie Mae 4.50% 2019		12,755			13,482
Fannie Mae 5.50% 2019		113			122
Fannie Mae 5.50% 2020		9,796			10,584
Fannie Mae 5.50% 2020		1,139			1,229
Fannie Mae 11.178% 20203		107			122
Fannie Mae, Series 2003-48, Class TJ, 4.50% 2022		10,941			11,344
Fannie Mae 5.00% 2023		5,587			5,945
Fannie Mae 5.50% 2023		31,103			33,477
Fannie Mae 5.50% 2023		27,915			30,129
Fannie Mae 6.00% 2023		3,056			3,324
Fannie Mae 4.00% 2024		31,256			32,247
Fannie Mae 4.50% 2024		23,959			25,135
Fannie Mae 6.00% 2024		8,026			8,839
Fannie Mae 3.00% 2025		44,000			43,182
Fannie Mae 3.00% 2025		41,000			40,238
Fannie Mae 3.00% 2025		35,000			34,314
Fannie Mae 3.00% 2025		29,856			29,277
Fannie Mae 3.00% 2025		21,888			21,481
Fannie Mae 3.00% 2025		19,500			19,137
Fannie Mae 3.00% 2025		15,000			14,721
Fannie Mae 3.00% 2025		2,000			1,961
Fannie Mae 3.50% 2025		167,093			168,686
Fannie Mae 3.50% 2025		96,599			97,520
Fannie Mae 3.50% 2025		94,073			94,970
Fannie Mae 3.50% 2025		77,797			78,538
Fannie Mae 3.50% 2025		65,785			66,412
Fannie Mae 3.50% 2025		60,000			60,572
Fannie Mae 3.50% 2025		54,118			54,587
Fannie Mae 3.50% 2025		47,861			48,317
Fannie Mae 3.50% 2025		36,795			37,146
Fannie Mae 3.50% 2025		28,982			29,258
Fannie Mae 3.50% 2025		24,077			24,307
Fannie Mae 3.50% 2025		21,064			21,265
Fannie Mae 3.50% 2025		14,828			14,969
Fannie Mae 3.50% 2025		13,918			14,050
Fannie Mae 3.50% 2025		12,934			13,057
Fannie Mae 3.50% 2025		11,871			11,984
Fannie Mae 3.50% 2025		11,648			11,759
Fannie Mae 3.50% 2025		8,960			9,045
Fannie Mae 3.50% 2025		250			252
Fannie Mae 4.00% 2025		98,793			102,158
Fannie Mae 4.00% 2025		63,346			65,504
Fannie Mae 4.00% 2025		50,210			51,921
Fannie Mae 4.00% 2025		44,067			45,568
Fannie Mae 4.00% 2025		31,933			33,021
Fannie Mae 4.00% 2025		25,028			25,881
Fannie Mae 4.00% 2025		17,939			18,550
Fannie Mae 4.00% 2025		12,643			13,073
Fannie Mae 4.00% 2025		11,050			11,427
Fannie Mae 4.00% 2025		9,425			9,746
Fannie Mae 4.00% 2025		6,376			6,593
Fannie Mae 4.00% 2025		6,109			6,317
Fannie Mae 4.00% 2025		5,681			5,875
Fannie Mae 4.00% 2025		5,429			5,614
Fannie Mae 4.00% 2025		3,844			3,975
Fannie Mae 4.50% 2025		102,124			107,326
Fannie Mae 4.50% 2025		32,896			34,572
Fannie Mae 4.50% 2025		15,237			16,013
Fannie Mae 4.50% 2025		15,219			15,994
Fannie Mae 4.50% 2025		14,933			15,694
Fannie Mae, Series 2001-4, Class GA, 9.893% 20253		307			358
Fannie Mae, Series 2001-4, Class NA, 11.71% 20253		1,039			1,172
Fannie Mae 3.00% 2026		96,515			94,509
Fannie Mae 3.00% 2026		40,000			39,216
Fannie Mae 3.00% 2026		34,940			34,263
Fannie Mae 3.00% 2026		20,000			19,612
Fannie Mae 3.00% 2026		13,096			12,842
Fannie Mae 3.00% 2026		12,801			12,563
Fannie Mae 3.00% 2026		10,000			9,806
Fannie Mae 3.50% 2026		359,500			362,084
Fannie Mae 3.50% 2026		30,000			30,260
Fannie Mae 3.50% 2026		27,138			27,397
Fannie Mae 4.118% 20263		382			399
Fannie Mae 6.00% 2026		19,168			21,110
Fannie Mae 5.50% 2027		11,610			12,505
Fannie Mae 6.00% 2028		4,988			5,445
Fannie Mae 6.00% 2028		4,330			4,715
Fannie Mae, Series 1998-W5, Class B3, 6.50% 2028		1,600			1,249
Fannie Mae, Series 2002-W7, Class A-5, 7.50% 2029		524			607
Fannie Mae, Series 2001-25, Class ZA, 6.50% 2031		3,812			4,169
Fannie Mae, Series 2001-20, Class E, 9.626% 20313		51			60
Fannie Mae 6.50% 2032		568			629
Fannie Mae 6.50% 2034		856			952
Fannie Mae, Series 2005-68, Class PG, 5.50% 2035		4,710			5,112
Fannie Mae 6.50% 2035		5,885			6,642
Fannie Mae, Series 2006-51, Class PO, principal only, 0% 2036		6,895			5,800
Fannie Mae, Series 2006-32, Class OA, principal only, 0% 2036		6,503			5,728
Fannie Mae, Series 2006-96, Class OP, principal only, 0% 2036		1,439			1,251
Fannie Mae, Series 2006-101, Class PC, 5.50% 2036		5,557			5,962
Fannie Mae 5.50% 2036		2,552			2,745
Fannie Mae, Series 2006-106, Class HG, 6.00% 2036		16,023			17,412
Fannie Mae 6.00% 2036		14,746			16,061
Fannie Mae, Series 2006-43, Class PX, 6.00% 2036		14,237			15,410
Fannie Mae 6.00% 2036		13,125			14,308
Fannie Mae 6.00% 2036		6,838			7,455
Fannie Mae 6.00% 2036		6,400			6,966
Fannie Mae 6.00% 2036		4,203			4,577
Fannie Mae 6.50% 2036		14,340			15,915
Fannie Mae 6.50% 2036		8,481			9,458
Fannie Mae 7.00% 2036		1,241			1,399
Fannie Mae 7.00% 2036		715			807
Fannie Mae 7.50% 2036		359			391
Fannie Mae 7.50% 2036		112			122
Fannie Mae 8.00% 2036		1,206			1,322
Fannie Mae 5.157% 20373		688			730
Fannie Mae 5.454% 20373		12,685			13,403
Fannie Mae 5.50% 2037		89,047			95,357
Fannie Mae 5.50% 2037		25,580			27,432
Fannie Mae, Series 2007-40, Class PT, 5.50% 2037		23,967			26,268
Fannie Mae 5.532% 20373		5,546			5,803
Fannie Mae 5.597% 20373		19,550			20,629
Fannie Mae 5.707% 20373		9,656			10,226
Fannie Mae 5.723% 20373		7,138			7,527
Fannie Mae 5.791% 20373		11,267			12,058
Fannie Mae 6.00% 2037		71,875			78,223
Fannie Mae 6.00% 2037		44,569			48,410
Fannie Mae 6.00% 2037		29,720			32,281
Fannie Mae 6.00% 2037		23,553			25,572
Fannie Mae 6.00% 2037		22,308			24,230
Fannie Mae 6.00% 2037		20,254			22,043
Fannie Mae 6.00% 2037		19,660			21,396
Fannie Mae 6.00% 2037		13,063			14,182
Fannie Mae 6.00% 2037		9,745			10,605
Fannie Mae 6.00% 2037		9,689			10,545
Fannie Mae 6.00% 2037		6,901			7,408
Fannie Mae 6.00% 2037		6,721			7,300
Fannie Mae 6.00% 2037		5,630			6,127
Fannie Mae 6.00% 2037		3,613			3,878
Fannie Mae, Series 2007-24, Class P, 6.00% 2037		3,213			3,455
Fannie Mae 6.00% 2037		2,633			2,871
Fannie Mae 6.00% 2037		1,964			2,143
Fannie Mae 6.00% 2037		1,724			1,876
Fannie Mae 6.00% 2037		1,688			1,838
Fannie Mae 6.00% 2037		1,458			1,591
Fannie Mae 6.00% 2037		103			112
Fannie Mae 6.50% 2037		17,031			18,902
Fannie Mae 6.50% 2037		16,024			17,825
Fannie Mae 6.50% 2037		14,929			16,569
Fannie Mae 6.50% 2037		10,268			11,359
Fannie Mae 6.50% 2037		8,875			9,739
Fannie Mae 6.50% 2037		1,450			1,610
Fannie Mae 7.00% 2037		4,838			5,323
Fannie Mae 7.00% 2037		4,354			4,790
Fannie Mae 7.00% 2037		1,213			1,368
Fannie Mae 7.00% 2037		716			808
Fannie Mae 7.00% 2037		539			604
Fannie Mae 7.00% 2037		252			283
Fannie Mae 7.50% 2037		2,296			2,587
Fannie Mae 7.50% 2037		985			1,070
Fannie Mae 7.50% 2037		823			895
Fannie Mae 7.50% 2037		741			805
Fannie Mae 7.50% 2037		709			771
Fannie Mae 7.50% 2037		658			715
Fannie Mae 7.50% 2037		642			698
Fannie Mae 7.50% 2037		591			643
Fannie Mae 7.50% 2037		588			639
Fannie Mae 7.50% 2037		567			616
Fannie Mae 7.50% 2037		426			463
Fannie Mae 7.50% 2037		256			278
Fannie Mae 7.50% 2037		234			255
Fannie Mae 7.50% 2037		192			215
Fannie Mae 7.50% 2037		170			185
Fannie Mae 7.50% 2037		130			147
Fannie Mae 7.50% 2037		131			142
Fannie Mae 7.50% 2037		108			117
Fannie Mae 7.50% 2037		91			99
Fannie Mae 7.50% 2037		68			74
Fannie Mae 8.00% 2037		1,208			1,363
Fannie Mae 8.00% 2037		483			530
Fannie Mae 8.00% 2037		339			383
Fannie Mae 8.00% 2037		250			274
Fannie Mae 4.916% 20383		11,541			12,208
Fannie Mae 5.351% 20383		5,958			6,250
Fannie Mae 5.50% 2038		70,898			75,912
Fannie Mae 5.50% 2038		40,271			43,119
Fannie Mae 5.50% 2038		34,640			37,089
Fannie Mae 5.50% 2038		30,212			32,283
Fannie Mae 5.50% 2038		9,578			10,255
Fannie Mae 5.50% 2038		7,898			8,471
Fannie Mae 5.50% 2038		7,252			7,764
Fannie Mae 5.50% 2038		433			464
Fannie Mae 5.50% 2038		282			302
Fannie Mae 5.50% 2038		243			261
Fannie Mae 5.501% 20383		1,508			1,587
Fannie Mae 5.616% 20383		11,545			12,176
Fannie Mae 6.00% 2038		109,202			118,846
Fannie Mae 6.00% 2038		32,601			35,480
Fannie Mae 6.00% 2038		29,876			32,515
Fannie Mae 6.00% 2038		22,288			24,250
Fannie Mae 6.00% 2038		21,344			23,183
Fannie Mae 6.00% 2038		18,174			19,779
Fannie Mae 6.00% 2038		15,073			16,356
Fannie Mae 6.00% 2038		11,949			13,005
Fannie Mae 6.00% 2038		11,363			12,330
Fannie Mae 6.00% 2038		9,620			10,439
Fannie Mae 6.00% 2038		9,245			10,058
Fannie Mae 6.00% 2038		8,477			9,226
Fannie Mae 6.00% 2038		7,944			8,643
Fannie Mae 6.00% 2038		7,087			7,711
Fannie Mae 6.00% 2038		6,850			7,432
Fannie Mae 6.00% 2038		5,838			6,354
Fannie Mae 6.00% 2038		5,588			6,081
Fannie Mae 6.00% 2038		4,805			5,228
Fannie Mae 6.00% 2038		3,411			3,711
Fannie Mae 6.50% 2038		128,168			142,572
Fannie Mae 6.50% 2038		52,661			58,579
Fannie Mae 6.50% 2038		24,236			26,955
Fannie Mae 3.577% 20393		35,707			37,058
Fannie Mae 3.606% 20393		11,487			11,913
Fannie Mae 3.607% 20393		31,032			32,247
Fannie Mae 3.63% 20393		12,831			13,269
Fannie Mae 3.669% 20393		1,117			1,158
Fannie Mae 3.764% 20393		5,338			5,539
Fannie Mae 3.779% 20393		36,661			38,174
Fannie Mae 3.813% 20393		9,277			9,627
Fannie Mae 3.823% 20393		5,149			5,393
Fannie Mae 3.847% 20393		3,135			3,257
Fannie Mae 3.852% 20393		7,906			8,278
Fannie Mae 3.898% 20393		3,574			3,714
Fannie Mae 3.941% 20393		12,498			13,109
Fannie Mae 3.959% 20393		2,502			2,610
Fannie Mae 4.50% 2039		18,099			18,603
Fannie Mae 5.00% 2039		47,382			49,855
Fannie Mae 5.00% 2039		36,202			38,318
Fannie Mae 5.00% 2039		25,068			26,376
Fannie Mae 5.00% 2039		12,380			13,026
Fannie Mae 5.113% 20393		16,827			17,852
Fannie Mae 5.50% 2039		28,826			30,859
Fannie Mae 5.50% 2039		22,949			24,568
Fannie Mae 5.50% 2039		4,468			4,784
Fannie Mae 6.00% 2039		13,459			14,612
Fannie Mae 6.00% 2039		12,913			14,020
Fannie Mae 6.00% 2039		7,348			8,015
Fannie Mae 6.00% 2039		6,286			6,839
Fannie Mae 6.00% 2039		6,256			6,786
Fannie Mae 6.00% 2039		3,452			3,756
Fannie Mae 6.00% 2039		683			741
Fannie Mae 3.146% 20403		6,147			6,296
Fannie Mae 3.203% 20403		47,489			48,912
Fannie Mae 3.50% 2040		55,100			52,693
Fannie Mae 3.50% 2040		32,700			31,271
Fannie Mae 3.50% 2040		21,500			20,561
Fannie Mae 3.50% 2040		10,000			9,563
Fannie Mae 3.635% 20403		13,721			14,241
Fannie Mae 4.00% 2040		127,414			126,918
Fannie Mae 4.00% 2040		96,260			95,885
Fannie Mae 4.00% 2040		35,000			34,874
Fannie Mae 4.00% 2040		35,000			34,864
Fannie Mae 4.00% 2040		33,490			33,360
Fannie Mae 4.00% 2040		25,807			25,705
Fannie Mae 4.00% 2040		25,000			24,903
Fannie Mae 4.50% 2040		154,132			158,404
Fannie Mae 4.50% 2040		112,490			115,608
Fannie Mae 4.50% 2040		90,393			92,898
Fannie Mae 4.50% 2040		72,476			74,485
Fannie Mae 4.50% 2040		55,334			56,868
Fannie Mae 4.50% 2040		47,216			48,525
Fannie Mae 4.50% 2040		1,025			1,053
Fannie Mae 5.00% 2040		62,140			65,383
Fannie Mae 5.00% 2040		23,082			24,286
Fannie Mae 5.50% 2040		60,591			64,744
Fannie Mae 5.50% 2040		37,238			39,791
Fannie Mae 5.50% 2040		20,518			21,965
Fannie Mae 5.50% 2040		2,383			2,551
Fannie Mae 3.50% 2041		65,800			62,860
Fannie Mae 4.00% 2041		95,100			94,625
Fannie Mae 4.50% 2041		50,000			51,336
Fannie Mae 5.00% 2041		50,000			52,570
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041		5,037			5,805
Fannie Mae, Series 2001-50, Class BA, 7.00% 2041		1,419			1,569
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2041		2,951			3,430
Fannie Mae, Series 2002-W1, Class 2A, 7.36% 20423		3,363			3,881
Fannie Mae 6.00% 2047		451			483
Fannie Mae 6.50% 2047		655			716
Fannie Mae 6.50% 2047		317			347
Fannie Mae 6.50% 2047		268			293
Fannie Mae 7.00% 2047		2,425			2,668
Fannie Mae 7.00% 2047		138			152
Fannie Mae 7.50% 2047		168			183
Government National Mortgage Assn. 10.00% 2021		561			637
Government National Mortgage Assn. 3.50% 2025		6,466			6,563
Government National Mortgage Assn. 3.50% 2025		2,485			2,522
Government National Mortgage Assn. 3.50% 2025		1,982			2,012
Government National Mortgage Assn., Series 2005-58, Class NO, principal only, 0% 2035		3,717			3,571
Government National Mortgage Assn. 6.00% 2038		49,182			53,676
Government National Mortgage Assn. 6.50% 2038		175			195
Government National Mortgage Assn. 3.50% 2039		12,496			12,056
Government National Mortgage Assn. 3.50% 2039		12,119			11,691
Government National Mortgage Assn. 3.50% 2039		6,518			6,289
Government National Mortgage Assn. 4.00% 2039		62,697			63,285
Government National Mortgage Assn. 4.00% 2039		19,429			19,611
Government National Mortgage Assn. 4.00% 2039		19,262			19,443
Government National Mortgage Assn. 4.00% 2039		13,741			13,870
Government National Mortgage Assn. 4.00% 2039		8,109			8,185
Government National Mortgage Assn. 4.00% 2039		5,237			5,287
Government National Mortgage Assn. 4.50% 2039		13,619			14,165
Government National Mortgage Assn. 3.50% 2040		25,000			24,119
Government National Mortgage Assn. 3.50% 20406		20,000			19,284
Government National Mortgage Assn. 3.50% 2040		10,000			9,648
Government National Mortgage Assn. 4.00% 2040		155,623			157,084
Government National Mortgage Assn. 4.00% 2040		127,886			129,087
Government National Mortgage Assn. 4.00% 2040		52,024			52,513
Government National Mortgage Assn. 4.00% 2040		42,615			43,015
Government National Mortgage Assn. 4.00% 2040		38,630			38,957
Government National Mortgage Assn. 4.00% 2040		23,000			23,216
Government National Mortgage Assn. 4.00% 2040		20,884			21,080
Government National Mortgage Assn. 4.00% 2040		17,818			17,985
Government National Mortgage Assn. 4.00% 2040		16,575			16,730
Government National Mortgage Assn. 4.00% 2040		15,035			15,176
Government National Mortgage Assn. 4.00% 2040		14,608			14,745
Government National Mortgage Assn. 4.00% 2040		14,112			14,244
Government National Mortgage Assn. 4.00% 2040		13,886			14,016
Government National Mortgage Assn. 4.00% 2040		9,971			10,065
Government National Mortgage Assn. 4.00% 2040		9,971			10,065
Government National Mortgage Assn. 4.00% 2040��		9,969			10,063
Government National Mortgage Assn. 4.00% 2040		9,941			10,034
Government National Mortgage Assn. 4.00% 2040		6,320			6,379
Government National Mortgage Assn. 4.00% 2040		5,965			6,021
Government National Mortgage Assn. 4.00% 2040		5,964			6,020
Government National Mortgage Assn. 4.00% 2040		4,568			4,611
Government National Mortgage Assn. 4.00% 2040		1,506			1,520
Government National Mortgage Assn. 4.00% 2040		638			644
Government National Mortgage Assn. 4.00% 2040		441			445
Government National Mortgage Assn. 4.50% 2040		141,821			147,479
Government National Mortgage Assn. 4.50% 2040		29,362			30,534
Government National Mortgage Assn. 4.50% 2040		26,084			27,124
Government National Mortgage Assn. 4.50% 2040		22,602			23,504
Government National Mortgage Assn. 4.50% 2040		13,874			14,428
Government National Mortgage Assn. 4.50% 2040		9,631			10,015
Government National Mortgage Assn. 4.50% 2040		8,988			9,347
Government National Mortgage Assn. 4.50% 2040		4,921			5,118
Government National Mortgage Assn. 4.50% 2040		3,732			3,880
Government National Mortgage Assn. 4.50% 2040		1,463			1,521
Government National Mortgage Assn. 5.00% 2040		13,581			14,450
Government National Mortgage Assn. 4.00% 2041		40,000			40,281
Government National Mortgage Assn. 4.50% 2041		48,300			50,157
Freddie Mac, Series 2890, Class KT, 4.50% 2019		2,500			2,636
Freddie Mac 5.50% 2019		5,312			5,746
Freddie Mac, Series K009, Class A1, 2.757% 2020		3,988			3,952
Freddie Mac, Series 2626, Class NG, 3.50% 2023		1,159			1,191
Freddie Mac, Series 2922, Class EL, 4.50% 2023		17,055			17,539
Freddie Mac 5.00% 2023		7,748			8,197
Freddie Mac 5.00% 2023		309			327
Freddie Mac 5.00% 2023		47			50
Freddie Mac, Series 1617, Class PM, 6.50% 2023		1,278			1,406
Freddie Mac 5.00% 2024		21,089			22,282
Freddie Mac 3.50% 2025		37,996			38,293
Freddie Mac 4.00% 2025		47,668			49,039
Freddie Mac 4.00% 2025		23,358			24,070
Freddie Mac 4.00% 2025		15,758			16,239
Freddie Mac 4.50% 2025		59,407			62,174
Freddie Mac 4.50% 2025		46,076			48,221
Freddie Mac 6.00% 2026		14,227			15,474
Freddie Mac 6.00% 2026		11,938			12,985
Freddie Mac 5.50% 2027		7,912			8,489
Freddie Mac 6.00% 2027		84,605			92,025
Freddie Mac, Series 2153, Class GG, 6.00% 2029		2,143			2,336
Freddie Mac, Series 2122, Class QM, 6.25% 2029		3,628			3,923
Freddie Mac 2.711% 20353		8,028			8,426
Freddie Mac, Series 3061, Class PN, 5.50% 2035		34,737			38,195
Freddie Mac, Series 3136, Class OP, principal only, 0% 2036		6,171			5,245
Freddie Mac, Series 3149, Class MO, principal only, 0% 2036		4,130			3,482
Freddie Mac, Series 3147, Class OD, principal only, 0% 2036		4,065			3,399
Freddie Mac, Series 3149, Class AO, principal only, 0% 2036		3,619			3,051
Freddie Mac, Series 3156, Class PO, principal only, 0% 2036		78			69
Freddie Mac, Series 3257, Class PA, 5.50% 2036		40,503			43,510
Freddie Mac, Series 3233, Class PA, 6.00% 2036		30,877			33,491
Freddie Mac, Series 3156, Class NG, 6.00% 2036		9,807			10,860
Freddie Mac, Series 3286, Class JN, 5.50% 2037		51,007			54,219
Freddie Mac, Series 3318, Class JT, 5.50% 2037		28,728			30,546
Freddie Mac, Series 3312, Class PA, 5.50% 2037		21,607			22,979
Freddie Mac 5.50% 2037		16,575			17,657
Freddie Mac 5.50% 2037		15,730			16,756
Freddie Mac 5.522% 20373		21,168			22,716
Freddie Mac 5.681% 20373		6,500			6,933
Freddie Mac 5.765% 20373		4,180			4,394
Freddie Mac 5.929% 20373		7,724			8,154
Freddie Mac, Series 3271, Class OA, 6.00% 2037		12,707			14,127
Freddie Mac 6.00% 2037		1,958			2,128
Freddie Mac 7.00% 2037		639			708
Freddie Mac 7.00% 2037		361			401
Freddie Mac 7.00% 2037		290			322
Freddie Mac 7.50% 2037		4,629			5,150
Freddie Mac 4.808% 20383		9,270			9,809
Freddie Mac 5.058% 20383		7,607			8,070
Freddie Mac 5.272% 20383		11,670			12,373
Freddie Mac 5.50% 2038		12,213			13,029
Freddie Mac 5.556% 20383		17,995			18,983
Freddie Mac 6.00% 2038		41,203			44,540
Freddie Mac 6.50% 2038		10,357			11,460
Freddie Mac 3.721% 20393		6,434			6,705
Freddie Mac 3.922% 20393		6,146			6,445
Freddie Mac 5.00% 2039		48,600			51,009
Freddie Mac 5.50% 2039		40,691			43,395
Freddie Mac 3.152% 20403		7,205			7,369
Freddie Mac 6.00% 2040		16,341			17,721
Freddie Mac 6.00% 2040		13,707			14,865
Freddie Mac 6.50% 2047		1,357			1,482
Freddie Mac 6.50% 2047		755			825
Freddie Mac 7.00% 2047		324			357
FDIC Structured Sale Guaranteed Notes, Series 2010-L1A, Class A-1, 0% 20114		1,850			1,840
FDIC Structured Sale Guaranteed Notes, Series 2010-L2A, Class A, 3.00% 20194		14,566			14,754
FDIC Structured Sale Guaranteed Notes, Series 2010-S1, Class 1-A, 0.811% 20483,4		798			800
NGN, Series 2010-R2, Class 1A, 0.635% 20173,6		3,271			3,270
					8,685,709
COMMERCIAL MORTGAGE-BACKED SECURITIES5 — 3.87%
CS First Boston Mortgage Securities Corp., Series 2001-CKN5, Class A-4, 5.435% 2034		859			874
CS First Boston Mortgage Securities Corp., Series 2001-CF2, Class A-4, 6.505% 2034		41			41
CS First Boston Mortgage Securities Corp., Series 2001-CK3, Class A-4, 6.53% 2034		1,049			1,054
CS First Boston Mortgage Securities Corp., Series 2002-CP5, Class A-1, 4.106% 2035		340			345
CS First Boston Mortgage Securities Corp., Series 2002-CKP1, Class F, 7.067% 20353,4		1,500			1,524
CS First Boston Mortgage Securities Corp., Series 2002-CKS4, Class G, 6.006% 20363,4		500			464
CS First Boston Mortgage Securities Corp., Series 2001-CK6, Class A-3, 6.387% 2036		25,311			26,054
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-2, 4.183% 2037		7,111			7,106
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-3, 4.499% 2037		12,900			13,028
CS First Boston Mortgage Securities Corp., Series 2005-C3, Class A-AB, 4.614% 2037		17,715			18,412
CS First Boston Mortgage Securities Corp., Series 2005-C2, Class A-MFX, 4.877% 2037		10,000			8,762
CS First Boston Mortgage Securities Corp., Series 2004-C1, Class E, 5.015% 20374		8,240			7,071
CS First Boston Mortgage Securities Corp., Series 2002-CKN2, Class A-3, 6.133% 2037		2,500			2,604
CS First Boston Mortgage Securities Corp., Series 2003-C3, Class F, 4.518% 20384		2,000			1,881
CS First Boston Mortgage Securities Corp., Series 2005-C5, Class A-AB, 5.10% 20383		12,000			12,681
CS First Boston Mortgage Securities Corp., Series 2004-C4, Class A-4, 4.283% 2039		20,855			21,075
CS First Boston Mortgage Securities Corp., Series 2006-C5, Class A-3, 5.311% 2039		57,676			60,158
CS First Boston Mortgage Securities Corp., Series 2006-C1, Class A-3, 5.539% 20393		10,000			10,558
CS First Boston Mortgage Securities Corp., Series 2006-C2, Class A-3, 5.659% 20393		7,305			7,686
CS First Boston Mortgage Securities Corp., Series 2007-C4, Class A-4, 5.804% 20393		14,645			15,095
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-3, 5.23% 20403		42,125			44,620
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C2, Class F, 5.915% 20343,4		2,500			2,470
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C3, Class A-1, 4.20% 2035		191			194
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-CBX, Class A-5, 4.654% 2037		2,500			2,561
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12, Class A-3B, 5.318% 20373		61,300			62,663
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C1, Class E, 6.135% 20374		400			397
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2003-ML1, Class A-1, 3.972% 2039		4,300			4,397
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3, Class A-3, 4.545% 2042		21,050			21,351
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP2, Class A-2, 4.575% 2042		2,231			2,234
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4, Class A-3A1, 4.871% 2042		21,991			22,183
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP3, Class A-4A, 4.936% 20423		1,655			1,754
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP5, Class A-2, 5.198% 2044		10,080			10,536
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-CIBC14, Class A-4, 5.481% 20443		15,130			16,018
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP7, Class A-4, 5.872% 20453		64,257			70,110
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1, Class A-2, 4.625% 2046		10,634			10,790
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2007-CB19, Class A-4, 5.742% 20493		18,678			19,873
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-2, 5.117% 2037		10,093			10,322
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-5, 5.224% 20373		11,000			11,627
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-4-1, 5.243% 20373		15,000			15,727
Greenwich Capital Commercial Funding Corp., Series 2006-GG7, Class A-4, 5.883% 20383		27,715			30,274
Greenwich Capital Commercial Funding Corp., Series 2007-GG9, Class A-4, 5.444% 2039		31,000			32,707
Fannie Mae, Series 2001-T6B, 6.088% 2011		48,250			49,110
Fannie Mae, Series 2003-T1, Class B, 4.491% 2012		46,225			49,037
American Tower Trust I, Series 2007-1A, Class A-FX, 5.42% 20374		18,500			19,850
American Tower Trust I, Series 2007-1A, Class B, 5.537% 20374		10,000			10,543
American Tower Trust I, Series 2007-1A, Class C, 5.615% 20374		10,000			10,543
American Tower Trust I, Series 2007-1A, Class D, 5.957% 20374		35,515			37,444
American Tower Trust I, Series 2007-1A, Class E, 6.249% 20374		8,250			8,698
American Tower Trust I, Series 2007-1A, Class F, 6.639% 20374		5,000			5,271
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2005-CD1, Class A-4, 5.222% 20443		17,005			18,321
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A-5, 5.617% 2048		44,734			48,100
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP6, Class A-4, 5.475% 20433		51,820			55,577
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP8, Class A-4, 5.399% 2045		9,040			9,637
Banc of America Commercial Mortgage Inc., Series 2001-1, Class A-2, 6.503% 2036		22,082			22,157
Banc of America Commercial Mortgage Inc., Series 2004-5, Class A-3, 4.561% 2041		9,975			10,153
Banc of America Commercial Mortgage Inc., Series 2004-5, Class A-AB, 4.673% 2041		1,365			1,418
Banc of America Commercial Mortgage Inc., Series 2004-4, Class B, 4.985% 2042		1,000			981
Banc of America Commercial Mortgage Inc., Series 2005-3, Class A-2, 4.501% 2043		848			859
Banc of America Commercial Mortgage Inc., Series 2005-5, Class A-4, 5.115% 20453		2,500			2,680
Banc of America Commercial Mortgage Inc., Series 2006-4, Class A-4, 5.634% 2046		15,990			17,178
Banc of America Commercial Mortgage Inc., Series 2007-3, Class A-4, 5.658% (undated)3		7,966			8,190
GE Commercial Mortgage Corp., Series 2004-C3, Class B, 5.235% 20393		8,000			7,116
GE Commercial Mortgage Corp., Series 2004-C2, Class B, 4.983% 2040		19,193			18,423
GE Commercial Mortgage Corp., Series 2006-C1, Class A-4, 5.335% 20443		33,700			36,323
Merrill Lynch Mortgage Trust, Series 2005-CKI1, Class AM, 5.241% 20373		4,620			4,804
Merrill Lynch Mortgage Trust, Series 2005-CIP1, Class A-3-A, 4.949% 20383		8,500			8,714
Merrill Lynch Mortgage Trust, Series 2006-C1, Class A-3, 5.656% 20393		3,050			3,143
Merrill Lynch Mortgage Trust, Series 2004-BPC1, Class A-5, 4.855% 20413		6,805			7,166
Merrill Lynch Mortgage Trust, Series 2005-MCP1, Class A-4, 4.747% 20433		12,080			12,808
Merrill Lynch Mortgage Trust, Series 2005-MCP1, Class AM, 4.805% 20433		6,300			6,488
Merrill Lynch Mortgage Trust, Series 2006-C2, Class A-4, 5.742% 20433		10,250			11,031
Wachovia Bank Commercial Mortgage Trust, Series 2003-C9, Class A-3, 4.608% 2035		1,418			1,484
Wachovia Bank Commercial Mortgage Trust, Series 2005-C18, Class A-PB, 4.807% 2042		2,630			2,721
Wachovia Bank Commercial Mortgage Trust, Series 2005-C20, Class A-7, 5.118% 20423		9,605			10,324
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-2, 5.242% 2044		2,534			2,531
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-4, 5.27% 20443		15,350			16,474
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-PB, 5.275% 20443		7,928			8,304
Wachovia Bank Commercial Mortgage Trust, Series 2006-C23, Class A-PB, 5.446% 2045		10,415			10,674
ML-CFC Commercial Mortgage Trust, Series 2006-4, Class A-3, 5.172% (undated)3		41,210			42,715
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20264,6		39,852			41,265
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-C1, Class X, interest only, 0.637% 20313,4		32,659			644
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-WF2, Class X, interest only, 0.662% 20313		37,391			1,275
Bear Stearns Commercial Mortgage Securities Inc., Series 2002-PBW1, Class A-1, 3.97% 2035		1,481			1,491
Bear Stearns Commercial Mortgage Securities Inc., Series 2001-TOP2, Class D, 6.94% 20354		3,000			2,933
Bear Stearns Commercial Mortgage Securities Inc., Series 2004-PWR6, Class A-4, 4.521% 2041		10,000			10,195
Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PWR9, Class A-3, 4.868% 2042		20,825			21,110
Crown Castle Towers LLC, Series 2010-1, Class C, 4.523% 20354		2,000			2,078
Crown Castle Towers LLC, Series 2010-5, Class C, 4.174% 20374		20,000			19,442
Crown Castle Towers LLC, Series 2010-2, Class C, 5.495% 20374		10,000			10,440
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038		20,000			20,791
Commercial Mortgage Trust, Series 2004-LNB2, Class A-3, 4.221% 2039		2,174			2,191
Citigroup Commercial Mortgage Trust, Series 2006-C4, Class A-3, 5.728% (undated)3		15,800			17,121
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A-2, 6.531% 2033		9,370			9,388
GE Capital Commercial Mortgage Corp., Series 2002-3, Class A-2, 4.996% 2037		2,500			2,616
GE Capital Commercial Mortgage Corp., Series 2001-3, Class A-1, 5.56% 2038		165			166
GE Capital Commercial Mortgage Corp., Series 2001-3, Class A-2, 6.07% 2038		2,500			2,568
COBALT CMBS Commerical Mortgage Trust, Series 2006-C1, Class A-2, 5.174% 2048		10,455			10,655
Ally Financial Inc., Series 1997-C1, Class F, 7.222% 2029		120			120
Ally Financial Inc., Series 2001-C1, Class A-2, 6.465% 2034		7,705			7,729
Ally Financial Inc., Series 2003-C1, Class F, 4.718% 20363,4		1,000			942
Ally Financial Inc., Series 2003-C1, Class G, 4.817% 20363,4		1,000			867
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class A-2, 5.103% 2030		2,210			2,210
LB-UBS Commercial Mortgage Trust, Series 2005-C7, Class A-4, 5.197% 20303		5,000			5,398
Morgan Stanley Capital I Trust, Series 2005-HQ7, Class A-2, 5.191% 20423		7,224			7,490
Bear Stearns Commercial Mortgage Securities Trust, Series 2006-PWR13, Class A-4, 5.54% 2041		6,000			6,447
Salomon Brothers Commercial Mortgage Trust, Series 2001-C1, Class A-3, 6.428% 2035		3,063			3,074
Salomon Brothers Commercial Mortgage Trust, Series 2001-C2, Class A-3, 6.499% 2036		1,801			1,852
Morgan Stanley Dean Witter Capital I Trust, Series 2003-TOP9, Class A-1, 3.98% 2036		203			204
					1,418,973
COLLATERALIZED MORTGAGE-BACKED OBLIGATIONS (PRIVATELY ORIGINATED)5 — 0.85%
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-22, Class 5-A-1, 5.814% 20353		2,805			2,234
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-8, Class 3-AF, 0.641% 20363		11,574			7,944
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-2, Class 5-A-1, 5.83% 20363		4,864			3,627
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-12, Class 2-A1, 5.605% 20373		16,657			12,573
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-6, Class 3-A-1, 5.662% 20373		16,866			11,922
WaMu Mortgage Pass-Through Certificates Trust, Series 2004-AR11, Class A, 2.717% 20343		15,010			13,959
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY7, Class 2-A1, 5.628% 20373		26,760			18,133
American General Mortgage Loan Trust, Series 2006-1, Class A-5, 5.75% 20353,4		7,066			7,390
American General Mortgage Loan Trust, Series 2010-1A, Class A-1, 5.15% 20583,4		15,689			16,346
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034		22,707			23,105
Bear Stearns ARM Trust, Series 2004-3, Class II-A, 2.694% 20343		6,541			5,691
Bear Stearns ARM Trust, Series 2005-6, Class I-A-1, 2.941% 20353		24,313			17,232
IndyMac IMSC Mortgage Loan Trust, Series 2007-F2, Class 2-A-1, 6.50% 2037		35,088			22,637
Countrywide Alternative Loan Trust, Series 2004-14T2, Class A-2, 5.50% 2034		8,484			8,384
Countrywide Alternative Loan Trust, Series 2005-J11, Class 1-A-16, 5.50% 2035		4,618			3,221
Countrywide Alternative Loan Trust, Series 2004-28CB, Class 5-A-1, 5.75% 2035		1,887			1,806
Countrywide Alternative Loan Trust, Series 2004-36CB, Class 1-A-1, 6.00% 2035		6,992			6,692
J.P. Morgan Alternative Loan Trust, Series 2006-A1, Class 2-A-1, 4.533% 20363		14,603			9,476
J.P. Morgan Alternative Loan Trust, Series 2006-A2, Class 5-A-1, 5.97% 20363		11,073			7,540
TBW Mortgage-backed Trust, Series 2007-2, Class A-4-B, 0.681% 20373		20,671			15,982
Thornburg Mortgage Securities Trust, Series 2006-5, Class A-1, 0.381% 20463		14,617			14,492
Banc of America Funding Trust, Series 2005-H, Class 9-A-1, 4.771% 20353		20,122			14,092
Bear Stearns ALT-A Trust, Series 2006-2, Class II-4-A-1, 5.626% 20363		19,308			12,273
CS First Boston Mortgage Securities Corp., Series 2002-30, Class I-A-1, 7.50% 2032		285			278
CS First Boston Mortgage Securities Corp., Series 2002-34, Class I-A-1, 7.50% 2032		36			36
CS First Boston Mortgage Securities Corp., Series 2003-21, Class V-A-1, 6.50% 2033		2,157			2,168
CS First Boston Mortgage Securities Corp., Series 2003-29, Class V-A-1, 7.00% 2033		38			39
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 2034		5,772			5,963
CS First Boston Mortgage Securities Corp., Series 2007-1, Class 1-A-6A, 5.863% 20373		4,714			2,761
GSR Mortgage Loan Trust, Series 2006-2F, Class 3A-4, 6.00% 2036		11,543			10,897
IndyMac INDX Mortgage Loan Trust, Series 2006-AR25, Class 3-A-1, 5.476% 20363		16,019			8,880
CHL Mortgage Pass-Through Trust, Series 2004-HYB6, Class A-3, 3.089% 20343		2,151			1,827
CHL Mortgage Pass-Through Trust, Series 2007-HY5, Class 1-A-1, 5.775% 20473		6,486			5,019
CHL Mortgage Pass-Through Trust, Series 2007-HY4, Class 1-A-1, 5.837% 20473		1,927			1,423
Citigroup Mortgage Loan Trust, Inc., Series 2007-AR5, Class 1-A2A, 5.405% 20373		5,227			3,543
J.P. Morgan Mortgage Trust, Series 2006-A3, Class 3-A-3, 5.72% 20363		4,000			3,306
Banc of America Mortgage Securities Inc., Series 2003-I, Class 3-A1, 3.256% 20333		2,819			2,804
Washington Mutual Mortgage, WMALT Series 2007-2, Class 3-A-1, 5.50% 2022		2,469			2,300
Harborview Mortgage Loan Trust, Series 2006-6, Class 1A, 2.943% 20363		2,429			1,595
					309,590
OTHER MORTGAGE-BACKED SECURITIES5 — 0.64%
Nykredit 4.00% 2035	DKr279,720				49,018
Nationwide Building Society, Series 2007-2, 5.50% 20124	$	35,000			37,094
Bank of America 5.50% 20124		35,000			36,842
HBOS Treasury Services PLC 5.00% 20114		2,000			2,060
HBOS Treasury Services PLC 5.25% 20174		11,000			11,423
HBOS Treasury Services PLC 5.25% 2017		7,000			7,269
Northern Rock PLC 5.625% 20174		20,000			20,433
Barclays Bank PLC 4.00% 2019	€	14,150			19,017
Royal Bank of Canada 3.125% 20154	$	18,160			18,676
Bank of Montreal 2.85% 20154		17,000			17,286
Compagnie de Financement Foncier 2.125% 20134		16,700			16,852
					235,970
Total mortgage-backed obligations					10,650,242
CORPORATE BONDS & NOTES — 29.01%
FINANCIALS — 8.64%
Banks — 2.69%
Abbey National Treasury Services PLC 3.875% 20144	$	6,130		$	6,080
Santander Issuances, SA Unipersonal 5.911% 20164		13,600			13,355
Sovereign Bancorp, Inc. 8.75% 2018		72,725			79,736
Santander Issuances, SA Unipersonal 6.50% 20193,4		41,700			40,323
HBOS PLC 6.75% 20184		105,638			99,053
HBOS PLC 4.375% 20193	€	2,870			3,479
Lloyds TSB Bank PLC 6.50% 20204	$	8,900			8,202
HBOS PLC 6.00% 20334		19,520			14,594
Royal Bank of Scotland PLC 3.40% 2013		16,500			16,678
Royal Bank of Scotland Group PLC 5.00% 2014		6,665			6,417
Royal Bank of Scotland PLC 3.95% 2015		24,500			24,110
Royal Bank of Scotland PLC 4.875% 2015		23,000			23,549
Royal Bank of Scotland Group PLC 5.05% 2015		8,240			7,935
Royal Bank of Scotland Group PLC 4.70% 2018		3,485			2,955
Royal Bank of Scotland PLC 6.934% 2018	€	12,590			15,951
Royal Bank of Scotland PLC 5.625% 2020	$	16,250			16,185
Société Générale 2.20% 20134		7,500			7,475
Société Générale 3.10% 20154		21,000			20,544
Société Générale 3.50% 20164		16,000			15,778
Société Générale 5.75% 20164		63,110			66,917
CIT Group Inc., Series A, 7.00% 2013		11,494			11,752
CIT Group Inc., Series A, 7.00% 2014		19,353			19,595
CIT Group Inc., Series A, 7.00% 2015		22,884			22,999
Standard Chartered PLC 3.85% 20154		21,327			21,979
Standard Chartered Bank 6.40% 20174		25,491			27,313
HSBC Finance Corp. 0.652% 20123		10,750			10,598
HSBC Bank PLC 3.50% 20154		7,000			7,183
HSBC Bank USA, NA 4.875% 2020		31,195			31,069
Bank of Tokyo-Mitsubishi, Ltd. 2.45% 20154		17,000			16,699
Union Bank of California, NA 5.95% 2016		26,831			28,592
Barclays Bank PLC 5.125% 2020		11,500			11,766
Barclays Bank PLC 5.14% 2020		36,000			32,451
Korea Development Bank 5.30% 2013		13,635			14,400
Korea Development Bank 8.00% 2014		15,365			17,568
UniCredito Italiano SpA 6.00% 20174		20,000			19,585
HVB Funding Trust I 8.741% 20314		8,264			8,264
SunTrust Banks, Inc. 6.00% 2017		20,000			21,032
ANZ National (International) Ltd. 3.125% 20154		19,000			18,918
Silicon Valley Bank 5.70% 2012		18,000			18,781
PNC Funding Corp. 5.40% 2014		10,000			10,971
PNC Bank NA 6.875% 2018		5,200			5,952
Westpac Banking Corp. 3.00% 2015		16,000			15,988
Wells Fargo & Co. 5.625% 2017		8,500			9,425
Wachovia Capital Trust III 5.80% (undated)3		6,700			5,837
Banco de Crédito del Perú 5.375% 20204		15,000			14,850
Paribas, New York Branch 6.95% 2013		3,470			3,898
BNP Paribas 5.125% 20154		9,147			9,702
VEB Finance Ltd. 6.902% 20204		9,100			9,555
VEB Finance Ltd. 6.80% 20254		1,500			1,504
BBVA Bancomer SA 7.25% 20204		9,875			10,470
Banco del Estado de Chile 4.125% 20204		10,000			9,550
Allied Irish Banks, PLC 12.50% 2019	€	21,764			7,724
Regions Financial Corp. 6.375% 2012	$	6,792			6,922
Banco Santander-Chile 5.375% 20144		5,380			5,652
Nordea Bank, Series 2, 3.70% 20144		3,000			3,095
Bergen Bank 0.625% (undated)3		5,000			2,946
Bank of Ireland 10.00% 2020	€	1,215			942
Development Bank of Singapore Ltd. 7.125% 20114	$	400			408
Norinchukin Finance (Cayman) Ltd. 5.625% 20163	£	205			324
					985,575
Real estate — 2.31%
PLD International Finance LLC 4.375% 2011	€	7,700			10,315
ProLogis 7.625% 2014	$	26,250			29,624
ProLogis 5.75% 2016		15,245			15,846
ProLogis 6.25% 2017		8,300			8,672
ProLogis 6.625% 2018		53,205			56,575
ProLogis 7.375% 2019		32,707			35,784
ProLogis 6.875% 2020		22,053			23,454
Kimco Realty Corp., Series C, 4.82% 2011		7,500			7,639
Kimco Realty Corp. 6.00% 2012		12,250			13,142
Pan Pacific Retail Properties, Inc. 6.125% 2013		1,605			1,701
Kimco Realty Corp., Series C, 4.82% 2014		29,280			30,905
Kimco Realty Corp., Series C, 4.904% 2015		10,765			11,197
Kimco Realty Corp., Series C, 5.783% 2016		19,500			21,243
Kimco Realty Corp. 5.70% 2017		28,450			30,597
Kimco Realty Corp. 4.30% 2018		26,185			25,731
Kimco Realty Corp. 6.875% 2019		4,000			4,533
Westfield Group 5.40% 20124		18,400			19,514
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 5.125% 20144		16,250			17,282
Westfield Group 7.50% 20144		12,500			14,198
Westfield Group 5.75% 20154		32,000			34,702
Westfield Group 5.70% 20164		14,195			15,340
Westfield Group 7.125% 20184		23,135			26,652
Simon Property Group, LP 6.75% 2014		11,265			12,691
Simon Property Group, LP 4.20% 2015		4,160			4,354
Simon Property Group, LP 5.25% 2016		7,595			8,204
Simon Property Group, LP 6.10% 2016		5,765			6,470
Simon Property Group, LP 5.875% 2017		15,000			16,487
Simon Property Group, LP 6.125% 2018		24,075			27,100
Simon Property Group, LP 10.35% 2019		8,995			12,316
Hospitality Properties Trust 6.75% 2013		14,745			15,583
Hospitality Properties Trust 7.875% 2014		950			1,052
Hospitality Properties Trust 5.125% 2015		6,665			6,766
Hospitality Properties Trust 6.30% 2016		26,868			28,288
Hospitality Properties Trust 5.625% 2017		1,195			1,189
Hospitality Properties Trust 6.70% 2018		32,170			33,776
Realogy Corp., Term Loan DD, 3.286% 20133,5,7		26,185			24,686
Realogy Corp., Term Loan B, 3.286% 20133,5,7		10,771			10,154
Realogy Corp., Letter of Credit, 3.297% 20133,5,7		1,472			1,388
Realogy Corp., Second Lien Term Loan A, 13.50% 20175,7		7,825			8,593
ERP Operating LP 5.25% 2014		9,000			9,823
ERP Operating LP 6.584% 2015		13,040			14,874
ERP Operating LP 5.75% 2017		1,530			1,679
ERP Operating LP 7.125% 2017		5,000			5,825
ERP Operating LP 4.75% 2020		9,500			9,593
Developers Diversified Realty Corp. 5.375% 2012		4,635			4,771
Developers Diversified Realty Corp. 5.50% 2015		11,643			11,988
Developers Diversified Realty Corp. 9.625% 2016		11,620			13,804
Developers Diversified Realty Corp. 7.50% 2017		7,655			8,562
Developers Diversified Realty Corp. 7.875% 2020		1,000			1,122
Brandywine Operating Partnership, LP 5.75% 2012		27,110			28,081
Brandywine Operating Partnership, LP 5.40% 2014		3,000			3,100
Rouse Co. 7.20% 2012		12,475			13,130
Rouse Co. 5.375% 2013		7,250			7,313
Rouse Co. 6.75% 20134		3,750			3,905
UDR, Inc., Series A, 5.25% 2015		13,030			13,620
Boston Properties, Inc. 5.875% 2019		10,000			10,863
Weingarten Realty Investors, Series A, 4.857% 2014		6,080			6,244
Host Marriott, LP, Series O, 6.375% 2015		2,000			2,040
Host Hotels & Resorts LP 9.00% 2017		1,800			2,007
					846,087
Diversified financials — 2.08%
Citigroup Inc. 4.587% 2015		74,215			77,455
Citigroup Inc. 4.75% 2015		40,000			41,925
Citigroup Inc. 6.125% 2017		24,500			26,887
Citigroup Inc. 5.375% 2020		1,500			1,561
JPMorgan Chase & Co., Series 2, 1.65% 2013		6,000			6,008
JPMorgan Chase & Co. 3.40% 2015		20,000			20,416
JPMorgan Chase & Co. 2.60% 2016		70,615			68,596
JPMorgan Chase & Co. 4.25% 2020		28,840			28,222
JPMorgan Chase & Co. 4.40% 2020		13,160			12,978
JPMorgan Chase & Co. 5.50% 2040		2,000			2,052
Countrywide Financial Corp., Series B, 5.80% 2012		18,000			18,944
Bank of America Corp. 3.70% 2015		16,500			16,375
Bank of America Corp. 0.549% 20163		1,500			1,332
Bank of America Corp. 5.75% 2017		7,845			8,175
Bank of America Corp. 5.65% 2018		19,405			19,857
Bank of America Corp. 5.625% 2020		2,500			2,553
Bank of America Corp. 5.875% 2021		66,810			69,253
Morgan Stanley 4.00% 2015		6,000			6,037
Morgan Stanley, Series F, 6.625% 2018		19,200			20,858
Morgan Stanley, Series F, 5.625% 2019		57,625			58,860
Goldman Sachs Group, Inc. 6.15% 2018		29,250			32,257
Goldman Sachs Group, Inc. 7.50% 2019		16,250			19,068
Goldman Sachs Group, Inc. 5.375% 2020		21,460			22,216
Goldman Sachs Group, Inc. 6.75% 2037		1,000			1,026
UBS AG 3.875% 2015		3,000			3,095
UBS AG 5.875% 2017		15,560			17,138
UBS AG 4.875% 2020		27,190			27,714
Lazard Group LLC 7.125% 2015		20,942			22,571
SLM Corp., Series A, 0.502% 20113		2,000			1,993
SLM Corp., Series A, 0.728% 20113		8,700			8,580
SLM Corp., Series A, 5.40% 2011		5,000			5,089
SLM Corp., Series A, 5.375% 2013		3,000			3,061
Bank of New York Mellon Corp., Series G, 2.50% 2016		16,000			15,834
Export-Import Bank of Korea 5.875% 2015		12,400			13,453
Northern Trust Corp. 4.625% 2014		8,475			9,170
Northern Trust Corp. 5.85% 20174		3,750			4,201
Capital One Financial Corp. 5.50% 2015		1,500			1,609
Capital One Financial Corp. 6.15% 2016		10,000			10,839
Capital One Capital IV 6.745% 20373		695			693
Development Bank of Kazakhstan 5.50% 20154		7,310			7,401
NASDAQ OMX Group, Inc. 5.25% 2018		6,525			6,592
Lehman Brothers Holdings Inc., Series G, 4.80% 20148		10,000			2,363
Lehman Brothers Holdings Inc., Series I, 6.875% 20188		15,000			3,788
ING Bank NV 5.50% 2012	€	3,750			5,154
Charles Schwab Corp., Series A, 6.375% 2017	$	4,000			4,520
International Lease Finance Corp., Series Q, 5.45% 2011		2,000			2,015
International Lease Finance Corp., Series Q, 5.75% 2011		370			374
International Lease Finance Corp. 5.00% 2012		390			394
American Express Co. 6.15% 2017		1,650			1,863
					762,415
Insurance — 1.51%
Liberty Mutual Group Inc. 5.75% 20144		10,435			10,861
Liberty Mutual Group Inc. 6.70% 20164		6,250			6,732
Liberty Mutual Group Inc. 6.50% 20354		43,810			38,924
Liberty Mutual Group Inc. 7.50% 20364		33,110			33,013
PRICOA Global Funding I 5.30% 20134		2,500			2,737
Prudential Holdings, LLC, Series C, 8.695% 20234,5		56,185			67,079
ACE INA Holdings Inc. 5.875% 2014		17,445			19,575
ACE INA Holdings Inc. 2.60% 2015		24,990			24,630
ACE INA Holdings Inc. 5.70% 2017		3,500			3,843
ACE INA Holdings Inc. 5.80% 2018		1,000			1,107
ACE Capital Trust II 9.70% 2030		12,423			15,382
CNA Financial Corp. 5.85% 2014		11,500			12,144
CNA Financial Corp. 6.50% 2016		10,000			10,722
CNA Financial Corp. 7.35% 2019		4,270			4,691
CNA Financial Corp. 7.25% 2023		24,145			25,098
Monumental Global Funding 5.50% 20134		16,370			17,527
Monumental Global Funding III 5.25% 20144		21,500			22,875
AEGON NV 6.125% 2031	£	1,730			2,526
MetLife Global Funding I 5.125% 20134	$	18,310			19,725
MetLife Global Funding I 2.50% 20154		19,500			19,238
AXA SA 8.60% 2030		2,315			2,601
AXA SA 6.463% (undated)3,4		40,000			36,100
New York Life Global Funding 5.25% 20124		15,300			16,468
New York Life Global Funding 4.65% 20134		9,370			10,082
Principal Life Insurance Co. 5.30% 2013		18,150			19,652
Allstate Life Global Funding Trust, Series 2008-4, 5.375% 2013		17,500			19,067
UnumProvident Finance Co. PLC 6.85% 20154		2,839			3,153
Unum Group 7.125% 2016		6,500			7,310
Unum Group 5.625% 2020		4,950			4,978
RSA Insurance Group PLC 9.375% 20393	£	3,765			6,896
RSA Insurance Group PLC 8.50% (undated)3		2,429			3,872
Jackson National Life Global 5.375% 20134	$	10,000			10,733
Lincoln National Corp. 5.65% 2012		10,000			10,641
Genworth Global Funding Trust, Series 2007-C, 5.25% 2012		10,000			10,364
United Energy Distribution Pty Ltd., AMBAC insured, 4.70% 20114		10,000			10,079
Nationwide Financial Services, Inc. 6.75% 20673		10,000			9,240
Berkshire Hathaway Inc. 3.20% 2015		5,000			5,164
Munich Re Finance BV 6.75% 20233	€	3,550			4,981
TIAA Global Markets 4.95% 20134	$	3,000			3,254
Chubb Corp. 6.375% 20673		1,000			1,047
Loews Corp. 6.00% 2035		225			220
					554,331
Automobiles & components — 0.05%
Toyota Motor Credit Corp. 1.375% 2013		16,500			16,578
Ford Motor Credit Co. 7.25% 2011		2,000			2,068
Ford Motor Credit Co. 7.375% 2011		300			301
					18,947
CONSUMER DISCRETIONARY — 3.49%
Media — 2.09%
Comcast Corp. 5.50% 2011	$	10,301		$	10,402
Comcast Cable Communications, Inc. 6.75% 2011		520			522
Tele-Communications, Inc. 9.80% 2012		17,500			19,053
Comcast Corp. 5.85% 2015		1,625			1,829
Comcast Corp. 5.90% 2016		1,400			1,569
Comcast Corp. 6.30% 2017		13,410			15,376
Comcast Corp. 5.875% 2018		37,820			42,051
Comcast Corp. 6.45% 2037		8,500			9,112
Comcast Corp. 6.95% 2037		15,520			17,611
Comcast Corp. 6.55% 2039		1,000			1,091
Comcast Corp. 6.40% 2040		20,100			21,618
Time Warner Cable Inc. 6.20% 2013		12,700			14,113
Time Warner Cable Inc. 7.50% 2014		15,675			17,989
Time Warner Cable Inc. 8.25% 2014		3,250			3,775
Time Warner Cable Inc. 6.75% 2018		48,140			56,200
Time Warner Cable Inc. 8.25% 2019		7,215			8,976
Time Warner Cable Inc. 4.125% 2021		15,000			14,302
Time Warner Cable Inc. 6.75% 2039		6,800			7,535
NBC Universal, Inc. 2.10% 20144		16,000			15,965
NBC Universal, Inc. 3.65% 20154		2,625			2,695
NBC Universal, Inc. 2.875% 20164		17,000			16,628
NBC Universal, Inc. 5.15% 20204		16,000			16,617
NBC Universal, Inc. 4.375% 20214		28,640			27,855
NBC Universal, Inc. 6.40% 20404		6,600			7,033
NBC Universal, Inc. 5.95% 20414		8,600			8,629
News America Holdings Inc. 8.00% 2016		1,000			1,231
News America Holdings Inc. 8.25% 2018		2,000			2,513
News America Inc. 6.90% 2019		30,750			36,900
News America Inc. 6.15% 2037		300			314
News America Inc. 6.65% 2037		38,900			43,227
Time Warner Inc. 5.875% 2016		30,670			34,661
Time Warner Companies, Inc. 7.25% 2017		1,600			1,912
Time Warner Companies, Inc. 7.57% 2024		12,340			14,986
AOL Time Warner Inc. 7.625% 2031		2,580			3,145
Time Warner Inc. 6.50% 2036		16,660			18,268
Time Warner Inc. 6.20% 2040		9,450			10,081
Thomson Reuters Corp. 6.50% 2018		47,225			55,141
Univision Communications Inc. 12.00% 20144		3,500			3,850
Univision Communications Inc. 10.50% 20153,4,9		19,265			20,232
Univision Communications Inc., Term Loan, 4.511% 20173,5,7		21,171			20,176
Univision Communications Inc. 8.50% 20214		495			504
Cox Communications, Inc. 7.125% 2012		7,000			7,680
Cox Communications, Inc. 5.45% 2014		17,045			18,781
Cox Communications, Inc. 9.375% 20194		7,225			9,464
Virgin Media Finance PLC, Series 1, 9.50% 2016		7,000			7,945
Virgin Media Finance PLC 8.375% 20194		8,050			8,835
Warner Music Group 7.375% 2014		2,100			2,027
Warner Music Group 9.50% 2016		7,175			7,731
Mediacom LLC and Mediacom Capital Corp. 9.125% 2019		9,000			9,225
Charter Communications, Inc. 13.50% 2016		7,334			8,782
Grupo Televisa, SAB 6.625% 2040		7,700			8,377
AMC Entertainment Inc. 8.75% 2019		7,775			8,339
Clear Channel Worldwide Holdings, Inc., Series B, 9.25% 2017		6,500			7,150
Radio One, Inc. 15.00% 20163,4,9		7,046			6,909
Regal Entertainment Group 9.125% 2018		4,000			4,280
Regal Cinemas Corp. 8.625% 2019		2,000			2,130
Ziggo Bond Co. BV 8.00% 2018	€	4,000			5,532
Nara Cable Funding Ltd. 8.875% 2018		3,250			4,196
UPC Holding BV 9.875% 20184	$	3,500			3,850
Cinemark USA, Inc., Term Loan, 3.52% 20163,5,7		407			410
Cinemark USA, Inc. 8.625% 2019		2,000			2,175
Walt Disney Co. 5.625% 2016		2,000			2,306
UPC Germany GmbH 9.625% 2019	€	1,250			1,842
Atlantic Broadband Finance, LLC and Atlantic Broadband Finance, Inc. 9.375% 2014	$	1,300			1,326
American Media, Inc. 13.50% 20184,6		1,316			1,284
					766,263
Retailing — 0.66%
Staples, Inc. 7.75% 2011		14,150			14,379
Staples, Inc. 9.75% 2014		30,627			37,140
Nordstrom, Inc. 6.75% 2014		25,860			29,331
Macy’s Retail Holdings, Inc. 8.375% 20153		21,770			25,580
Neiman Marcus Group, Inc. 9.00% 20153,9		14,867			15,648
Neiman Marcus Group, Inc. 10.375% 2015		4,325			4,590
Michaels Stores, Inc., Term Loan B1, 2.563% 20133,5,7		2,009			1,958
Michaels Stores, Inc. 0%/13.00% 201610		7,235			7,199
Michaels Stores, Inc., Term Loan B2, 4.813% 20163,5,7		681			682
Michaels Stores, Inc. 11.375% 2016		3,000			3,285
Michaels Stores, Inc. 7.75% 20184		6,500			6,516
Home Depot, Inc. 3.95% 2020		8,000			7,814
Home Depot, Inc. 5.875% 2036		6,000			6,262
Toys “R” Us-Delaware, Inc., Term Loan B, 6.00% 20163,5,7		4,339			4,387
Toys “R” Us Property Co. II, LLC 8.50% 2017		6,275			6,777
Toys “R” Us Property Co. I, LLC 10.75% 2017		650			744
Marks and Spencer Group PLC 6.25% 20174		8,500			9,052
Marks and Spencer Group PLC 7.125% 20374		850			850
Kohl’s Corp. 6.25% 2017		2,000			2,311
Kohl’s Corp. 6.00% 2033		3,878			3,966
Kohl’s Corp. 6.875% 2037		2,787			3,224
Bon-Ton Department Stores, Inc. 10.25% 2014		8,050			8,251
Sally Holdings LLC and Sally Capital Inc. 9.25% 2014		6,550			6,910
Sally Holdings LLC and Sally Capital Inc. 10.50% 2016		1,050			1,163
Dollar General Corp., Term Loan B2, 3.01% 20143,5,7		854			855
Dollar General Corp. 10.625% 2015		3,042			3,323
Dollar General Corp. 11.875% 20173,9		3,244			3,779
Edcon (Proprietary) Ltd. 4.276% 20143	€	6,000			6,815
Edcon (Proprietary) Ltd. 4.276% 20143		500			568
Lowe’s Companies, Inc. 3.75% 2021	$	4,000			3,875
Lowe’s Companies, Inc. 5.80% 2040		1,790			1,901
J.C. Penney Co., Inc. 7.65% 2016		1,000			1,093
J.C. Penney Co., Inc. 5.75% 2018		3,523			3,488
Burlington Coat Factory Warehouse Corp. 11.125% 2014		4,000			4,150
PETCO Animal Supplies, Inc. 9.25% 20184		2,050			2,171
Limited Brands, Inc. 7.60% 2037		1,000			985
					241,022
Automobiles & components — 0.34%
DaimlerChrysler North America Holding Corp., Series E, 5.75% 2011		7,505			7,756
DaimlerChrysler North America Holding Corp. 5.875% 2011		8,400			8,486
DaimlerChrysler North America Holding Corp. 7.75% 2011		14,930			14,964
DaimlerChrysler North America Holding Corp. 6.50% 2013		18,775			21,269
DaimlerChrysler North America Holding Corp. 8.50% 2031		10,750			14,404
Allison Transmission Holdings, Inc., Term Loan B, 3.02% 20143,5,7		2,493			2,446
Allison Transmission Holdings, Inc. 11.00% 20154		18,670			20,444
Allison Transmission Holdings, Inc. 11.25% 20153,4,9		12,402			13,580
Volkswagen International Finance NV 4.00% 20204		13,650			13,459
Tower Automotive Holdings 10.625% 20174		7,986			8,625
					125,433
Consumer services — 0.29%
MGM Resorts International 6.75% 2012		9,235			9,235
MGM Resorts International 6.75% 2013		4,375			4,371
MGM Resorts International 13.00% 2013		3,825			4,542
MGM Resorts International 5.875% 2014		3,425			3,177
MGM Resorts International 10.375% 2014		925			1,043
MGM Resorts International 6.625% 2015		2,600			2,395
MGM Resorts International 11.125% 2017		4,375			5,053
MGM Resorts International 9.00% 20204		2,900			3,205
Seminole Tribe of Florida 5.798% 20134,5		6,390			6,434
Seminole Tribe of Florida 7.804% 20204,5		8,325			8,121
Marriott International, Inc., Series I, 6.375% 2017		12,750			14,276
Boyd Gaming Corp. 6.75% 2014		6,450			6,369
Boyd Gaming Corp. 7.125% 2016		4,000			3,610
Boyd Gaming Corp. 9.125% 20184		1,500			1,489
Mohegan Tribal Gaming Authority 8.00% 2012		6,375			5,355
Mohegan Tribal Gaming Authority 7.125% 2014		6,750			4,286
Circus and Eldorado Joint Venture and Silver Legacy Resort Casino 10.125% 2012		7,525			7,271
Royal Caribbean Cruises Ltd. 11.875% 2015		3,900			4,836
Wynn Las Vegas, LLC and Wynn Capital Corp. 7.75% 2020		3,000			3,263
Seneca Gaming Corp. 8.25% 20184		2,775			2,796
Education Management LLC and Education Management Finance Corp. 8.75% 2014		1,850			1,905
NCL Corp Ltd 9.50% 20184		1,525			1,578
					104,610
Consumer durables & apparel — 0.11%
Fortune Brands, Inc. 6.375% 2014		20,000			21,692
Hanesbrands Inc., Series B, 3.831% 20143		11,105			11,091
Hanesbrands Inc. 8.00% 2016		3,100			3,341
Jarden Corp. 8.00% 2016		3,020			3,303
					39,427
ENERGY — 3.12%
Kinder Morgan Energy Partners LP 6.75% 2011		3,500			3,539
Kinder Morgan Energy Partners LP 5.00% 2013		11,571			12,580
Kinder Morgan Energy Partners LP 5.125% 2014		27,552			29,919
Kinder Morgan Energy Partners LP 5.625% 2015		14,100			15,489
Kinder Morgan Energy Partners LP 6.00% 2017		22,375			24,735
Kinder Morgan Energy Partners LP 9.00% 2019		4,395			5,543
Kinder Morgan Energy Partners LP 5.30% 2020		5,000			5,201
Kinder Morgan Energy Partners LP 6.85% 2020		47,435			54,444
Kinder Morgan Energy Partners LP 6.55% 2040		4,000			4,219
Enbridge Energy Partners, LP, Series B, 6.50% 2018		28,120			32,179
Enbridge Energy Partners, LP 9.875% 2019		27,505			36,223
Enbridge Energy Partners, LP 5.20% 2020		20,690			21,725
Enbridge Energy Partners, LP, Series B, 7.50% 2038		28,950			34,848
Enbridge Energy Partners, LP 8.05% 20773		3,880			4,117
Gazprom OJSC 5.092% 20154		28,225			29,072
Gazprom OJSC, Series 13, 6.605% 2018	€	5,200			7,409
Gazprom OJSC 9.25% 2019	$	18,900			23,319
Gazprom OJSC 6.51% 20224		14,500			14,863
Gazprom OJSC, Series 9, 6.51% 2022		3,500			3,588
Gazprom OJSC, Series 2, 8.625% 20344		2,050			2,470
Gazprom OJSC 7.288% 20374		4,500			4,703
Williams Partners L.P. and Williams Partners Finance Corp. 7.50% 2011		5,725			5,894
Williams Partners L.P. and Williams Partners Finance Corp. 3.80% 2015		17,500			18,102
Transcontinental Gas Pipe Line Corp. 6.40% 2016		5,000			5,756
Williams Partners L.P. and Williams Partners Finance Corp. 7.25% 2017		1,300			1,513
Williams Partners L.P. 4.125% 2020		10,000			9,491
Williams Partners L.P. and Williams Partners Finance Corp. 5.25% 2020		19,230			19,970
Williams Partners L.P. and Williams Partners Finance Corp. 6.30% 2040		9,250			9,661
Rockies Express Pipeline LLC 6.25% 20134		8,500			9,185
Rockies Express Pipeline LLC 6.85% 20184		56,700			60,551
StatoilHydro ASA 2.90% 2014		15,360			15,897
StatoilHydro ASA 3.875% 2014		7,000			7,443
StatoilHydro ASA 5.125% 20144		3,070			3,384
Statoil ASA 3.125% 2017		26,500			26,280
StatoilHydro ASA 5.25% 2019		13,080			14,594
Shell International Finance BV 1.30% 2011		17,125			17,239
Shell International Finance BV 1.875% 2013		16,500			16,758
Shell International Finance BV 4.00% 2014		2,120			2,258
Shell International Finance BV 3.10% 2015		10,000			10,280
Shell International Finance BV 4.30% 2019		7,875			8,225
TransCanada PipeLines Ltd. 3.40% 2015		4,865			5,060
TransCanada PipeLines Ltd. 6.50% 2018		7,500			8,866
TransCanada PipeLines Ltd. 7.125% 2019		7,540			9,244
TransCanada PipeLines Ltd. 6.10% 2040		1,500			1,657
TransCanada PipeLines Ltd. 6.35% 20673		25,895			25,603
Husky Energy Inc. 6.25% 2012		1,760			1,885
Husky Energy Inc. 5.90% 2014		3,250			3,575
Husky Energy Inc. 6.20% 2017		16,415			18,297
Husky Energy Inc. 7.25% 2019		17,830			21,207
Husky Energy Inc. 6.80% 2037		4,750			5,262
Enbridge Inc. 5.80% 2014		9,200			10,242
Enbridge Inc. 4.90% 2015		3,250			3,542
Enbridge Inc. 5.60% 2017		28,980			32,660
Chevron Corp. 3.95% 2014		3,200			3,419
Chevron Corp. 4.95% 2019		28,830			32,371
Devon Energy Corp. 5.625% 2014		7,750			8,571
Devon Energy Corp. 6.30% 2019		11,990			14,133
Devon Financing Corp. ULC 7.875% 2031		9,600			12,694
Ras Laffan Liquefied Natural Gas III 5.50% 2014		5,000			5,410
Ras Laffan Liquefied Natural Gas III 5.50% 20144		330			357
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20145		700			776
Ras Laffan Liquefied Natural Gas III 5.832% 20165		1,784			1,925
Ras Laffan Liquefied Natural Gas III 6.75% 20194		2,500			2,912
Ras Laffan Liquefied Natural Gas II 5.298% 20204,5		20,639			21,816
Ras Laffan Liquefied Natural Gas III 6.332% 20275		2,000			2,117
Total Capital SA 3.00% 2015		19,250			19,674
Total Capital SA 3.125% 2015		6,850			7,028
Total Capital SA 4.45% 2020		3,500			3,635
Pemex Finance Ltd., Series 1999-2, Class A-3, 10.61% 20175		11,700			14,112
Pemex Project Funding Master Trust 5.75% 2018		3,150			3,384
Pemex Project Funding Master Trust, Series 13, 6.625% 2035		11,750			12,014
Petrobras International 5.75% 2020		13,500			14,075
Petrobras International 6.875% 2040		14,010			14,786
Enterprise Products Operating LP 7.50% 2011		5,000			5,022
Enterprise Products Operating LLC 5.65% 2013		17,850			19,231
Enterprise Products Operating LLC 7.00% 20673		1,770			1,752
Apache Corp. 6.00% 2013		2,420			2,719
Apache Corp. 5.625% 2017		7,200			8,222
Apache Corp. 6.90% 2018		7,145			8,737
Apache Corp. 5.10% 2040		3,750			3,657
Reliance Holdings Ltd. 4.50% 20204		8,750			8,365
Reliance Holdings Ltd. 6.25% 20404		14,250			14,296
BG Energy Capital PLC 2.50% 20154		22,120			21,941
Petroplus Finance Ltd. 6.75% 20144		6,500			6,013
Petroplus Finance Ltd. 7.00% 20174		11,675			10,391
Petroplus Finance Ltd. 9.375% 20194		3,650			3,395
Williams Companies, Inc. 7.875% 2021		8,102			9,581
Williams Companies, Inc. 8.75% 2032		3,557			4,363
Odebrecht Drilling Norbe VIII/IX Ltd 6.35% 20214,5		11,085			11,584
Noble Energy, Inc. 8.25% 2019		6,750			8,448
Cenovus Energy Inc. 4.50% 2014		6,000			6,435
Qatar Petroleum 5.579% 20114,5		2,613			2,663
General Maritime Corp. 12.00% 2017		2,650			2,570
PETRONAS Capital Ltd. 7.00% 20124		2,250			2,421
Energy Transfer Partners, LP 7.50% 2020		2,200			2,277
Overseas Shipholding Group, Inc. 8.125% 2018		1,650			1,662
Teekay Corp. 8.50% 2020		725			793
					1,141,513
INDUSTRIALS — 2.91%
Transportation — 1.43%
Continental Airlines, Inc. 8.75% 2011		300			310
Continental Airlines, Inc., Series 2001-1, Class A-2, 6.503% 20125		14,435			14,624
United Air Lines, Inc., Term Loan B, 2.313% 20143,5,7		4,484			4,343
Continental Airlines, Inc., Series 2006-1, Class G, FGIC insured, 0.65% 20153,5		1,044			990
Continental Airlines, Inc., Series 1997-1, Class A, 7.461% 20165		22,131			23,168
Continental Airlines, Inc., Series 2001-1, Class B, 7.373% 20175		146			146
Continental Airlines, Inc., Series 1998-1, Class B, 6.748% 20185		1,109			1,109
Continental Airlines, Inc., Series 1997-4B, Class B, 6.90% 20185		192			191
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 20195		15,774			16,494
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 20195		34,007			36,239
Continental Airlines, Inc., Series 2000-2, Class B, 8.307% 20195		353			359
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20205		12,542			13,341
Continental Airlines, Inc., Series 1999-1, Class B, 6.795% 20205		10,213			10,188
Continental Airlines, Inc., Series 1999-2, Class A-1, 7.256% 20215		277			300
United Air Lines, Inc., Series 2007-1, Class B, 7.336% 20214,5		851			817
Continental Airlines, Inc., Series 1999-2, Class B, 7.566% 20215		3,163			3,183
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20225		10,899			11,607
Continental Airlines, Inc., Series 2007-1, Class B, 6.903% 20225		3,929			3,959
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.707% 20225		12,661			14,172
Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 20225		10,457			11,863
Continental Airlines, Inc., Series 2000-1, Class B, 8.388% 20225		1,031			1,049
Northwest Airlines, Inc., Term Loan B, 3.81% 20133,5,7		2,062			1,969
Delta Air Lines, Inc., Series 2001-1, Class A-2, 7.111% 20135		10,000			10,388
Delta Air Lines, Inc., Series 2002-1, Class G-2, MBIA insured, 6.417% 20145		8,040			8,362
Northwest Airlines, Inc., Term Loan A, 2.06% 20183,5,7		60,043			53,438
Delta Air Lines, Inc., Series 2002-1, Class G-1, MBIA insured, 6.718% 20245		4,484			4,596
Union Pacific Corp. 5.125% 2014		8,430			9,139
Union Pacific Corp. 5.75% 2017		22,965			25,822
Union Pacific Corp. 5.70% 2018		4,000			4,497
Union Pacific Corp. 4.00% 2021		14,500			14,322
Union Pacific Railroad Co. Pass Through Trust, Series 2001-1, 6.63% 20225		6,391			7,264
Union Pacific Corp. 6.15% 2037		10,930			11,951
Burlington Northern Santa Fe Corp. 4.30% 2013		2,640			2,827
Burlington Northern Santa Fe Corp. 7.00% 2014		5,125			5,861
Burlington Northern Santa Fe Corp. 5.65% 2017		12,500			13,950
Burlington Northern Santa Fe Corp. 5.75% 2018		10,035			11,324
Burlington Northern Santa Fe Corp. 4.70% 2019		9,800			10,261
Burlington Northern Santa Fe Corp. 3.60% 2020		7,500			7,195
Burlington Northern Santa Fe Corp. 6.15% 2037		4,500			4,855
AMR Corp., Series B, 10.45% 2011		150			152
American Airlines, Inc., Series 2001-1, Class A-2, 6.817% 20125		1,750			1,774
American Airlines, Inc., Series 2001-2, Class A-1, 6.978% 20125		1,915			1,925
American Airlines, Inc., Series 2001-2, Class B, 8.608% 20125		9,015			9,128
AMR Corp. 9.00% 2012		1,300			1,319
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 20135		34,650			35,819
American Airlines, Inc., Series 2001-1, Class B, 7.377% 20195		481			464
Norfolk Southern Corp. 6.75% 2011		991			997
Norfolk Southern Corp. 5.75% 2016		6,740			7,582
Norfolk Southern Corp. 5.75% 2018		5,000			5,655
Norfolk Southern Corp. 5.90% 2019		11,250			12,759
Norfolk Southern Corp. 7.05% 2037		3,400			4,076
CSX Corp. 5.75% 2013		8,385			9,147
CSX Corp. 7.375% 2019		15,000			18,122
CEVA Group PLC, Bridge Loan, 9.75% 20153,5,6,7		1,500			1,327
CEVA Group PLC 11.625% 20164		4,890			5,391
CEVA Group PLC 8.375% 20174		15,975			16,215
CEVA Group PLC 11.50% 20184		1,650			1,790
Kansas City Southern Railway Co. 13.00% 2013		2,190			2,617
Kansas City Southern Railway Co. 8.00% 2015		4,250			4,590
RailAmerica, Inc. 9.25% 2017		3,200			3,532
Navios Maritime Acquisition Corp. 8.625% 20174		2,950			3,031
Canadian National Railway Co. 6.375% 2037		1,000			1,157
					525,042
Capital goods — 1.33%
Volvo Treasury AB 5.95% 20154		60,603			65,888
Volvo Treasury AB 5.00% 2017	€	3,115			4,387
BAE Systems 2001 Asset Trust, Series 2001, Class B, 7.156% 20114,5	$	11,587			11,946
BAE Systems 2001 Asset Trust, Series 2001, Class G, MBIA insured, 6.664% 20134,5		25,450			27,526
BAE Systems Holdings Inc. 4.95% 20144		14,290			15,332
Nortek, Inc. 11.00% 2013		30,400			32,528
Nortek Inc. 10.00% 20184		6,550			6,796
Hawker Beechcraft Acquisition Co., LLC, Letter of Credit, 2.203% 20143,5,7		3,957			3,480
Hawker Beechcraft Acquisition Co., LLC, Term Loan B, 2.303% 20143,5,7		36,236			31,870
Hawker Beechcraft Acquisition Co., LLC, Term Loan B, 10.50% 20143,5,7		1,237			1,240
Hawker Beechcraft Acquisition Co., LLC 8.875% 20153,9		1,568			1,196
Hawker Beechcraft Acquisition Co., LLC 9.75% 2017		170			97
Northrop Grumman Systems Corp. 7.125% 2011		8,000			8,056
Northrop Grumman Corp. 3.70% 2014		9,500			9,985
Northrop Grumman Corp. 5.05% 2019		17,180			18,381
General Electric Capital Corp., Series A, 2.25% 2015		21,500			20,693
General Electric Capital Corp., Series A, 6.00% 2019		10,000			11,145
Hutchison Whampoa International Ltd. 7.00% 20114		23,300			23,467
Hutchison Whampoa International Ltd. 6.50% 20134		7,200			7,871
US Investigations Services, Inc., Term Loan B, 3.054% 20153,5,7		3,628			3,458
US Investigations Services, Inc., Term Loan B, 7.75% 20153,5,7		5,846			5,919
US Investigations Services, Inc. 10.50% 20154		9,200			9,487
US Investigations Services, Inc. 11.75% 20164		6,155			6,317
Lockheed Martin Corp. 4.121% 2013		6,000			6,380
Lockheed Martin Corp. 4.25% 2019		17,940			18,273
Raytheon Co. 6.40% 2018		9,500			11,130
Raytheon Co. 6.75% 2018		4,030			4,751
Raytheon Co. 4.40% 2020		7,895			8,088
United Technologies Corp. 4.50% 2020		14,430			15,176
United Technologies Corp. 5.70% 2040		5,000			5,471
DAE Aviation Holdings, Inc. and Standard Aero Ltd., Term Loan B1, 4.04% 20143,5,7		302			298
DAE Aviation Holdings, Inc. and Standard Aero Ltd., Term Loan B2, 4.04% 20143,5,7		292			288
DAE Aviation Holdings, Inc. 11.25% 20154		13,285			13,816
Ashtead Group PLC 8.625% 20154		4,675			4,868
Ashtead Capital, Inc. 9.00% 20164		7,450			7,804
Associated Materials, LLC  9.125% 20174		12,040			12,612
Ply Gem Industries, Inc. 11.75% 2013		11,600			12,470
Honeywell International Inc. 5.00% 2019		8,725			9,561
TransDigm Inc. 7.75% 20184		5,500			5,720
Atlas Copco AB 5.60% 20174		4,525			4,882
Esterline Technologies Corp. 6.625% 2017		2,400			2,436
Esterline Technologies Corp. 7.00% 20204		1,440			1,490
Sequa Corp., Term Loan B, 3.54% 20143,5,7		3,374			3,264
John Deere Capital Corp., Series D, 4.50% 2013		2,000			2,140
Manitowoc Company, Inc. 8.50% 2020		2,000			2,135
RBS Global, Inc. and Rexnord LLC 11.75% 2016		200			215
RBS Global, Inc. and Rexnord LLC 8.50% 2018		1,650			1,761
H&E Equipment Services, Inc. 8.375% 2016		1,750			1,794
Roofing Supply Group 8.625% 20174		800			828
RSC Equipment Rental, Inc. and RSC Holdings III, LLC 9.50% 2014		400			422
					485,138
Commercial & professional services — 0.15%
Nielsen Finance LLC and Nielsen Finance Co. 11.625% 2014		1,650			1,918
Nielsen Finance LLC and Nielsen Finance Co. 0%/12.50% 201610		34,775			36,688
Nielsen Finance LLC and Nielsen Finance Co. 11.50% 2016		475			551
ARAMARK Corp., Letter of Credit, 2.136% 20143,5,7		18			18
ARAMARK Corp., Term Loan B, 2.178% 20143,5,7		227			225
ARAMARK Corp. 3.787% 20153		3,450			3,390
ARAMARK Corp. 8.50% 2015		9,450			9,922
ARAMARK Corp., Letter of Credit, 3.361% 20163,5,7		33			33
ARAMARK Corp., Term Loan B, 3.553% 20163,5,7		502			504
					53,249
UTILITIES — 2.63%
Energy East Corp. 6.75% 2012		7,155			7,648
Iberdrola Finance Ireland 3.80% 20144		32,460			32,342
Scottish Power PLC 5.375% 2015		31,415			33,370
Iberdrola Finance Ireland 5.00% 20194		11,500			11,047
Jersey Central Power & Light Co. 5.625% 2016		1,310			1,444
Ohio Edison Co. 6.40% 2016		12,440			14,201
Jersey Central Power & Light Co. 5.65% 2017		3,000			3,283
Pennsylvania Electric Co. 6.05% 2017		5,165			5,597
Jersey Central Power & Light Co. 4.80% 2018		11,025			11,212
Cleveland Electric Illuminating Co. 8.875% 2018		24,600			31,324
Toledo Edison Co. 7.25% 2020		10,000			11,841
Toledo Edison Co. 6.15% 2037		3,815			3,954
National Rural Utilities Cooperative Finance Corp. 5.50% 2013		21,750			23,828
National Rural Utilities Cooperative Finance Corp. 10.375% 2018		41,425			57,225
MidAmerican Energy Holdings Co. 5.875% 2012		15,000			16,191
PacifiCorp, First Mortgage Bonds, 5.45% 2013		2,875			3,152
MidAmerican Energy Co. 4.65% 2014		5,000			5,408
MidAmerican Energy Holdings Co., Series D, 5.00% 2014		225			242
MidAmerican Energy Co. 5.95% 2017		3,000			3,430
MidAmerican Energy Co. 5.30% 2018		5,000			5,558
MidAmerican Energy Holdings Co. 5.75% 2018		37,700			42,546
E.ON International Finance BV 5.80% 20184		62,950			71,234
Niagara Mohawk Power 3.553% 20144		15,690			16,318
National Grid PLC 6.30% 2016		37,605			42,982
National Grid Co. PLC 5.875% 2024	£	170			287
Consumers Energy Co., First Mortgage Bonds, Series P, 5.50% 2016	$	2,500			2,813
Consumers Energy Co., First Mortgage Bonds, 5.15% 2017		5,000			5,475
Consumers Energy Co. 5.65% 2018		6,925			7,808
Consumers Energy Co., First Mortgage Bonds, 6.125% 2019		30,575			35,125
Consumers Energy Co., First Mortgage Bonds, 6.70% 2019		2,380			2,842
Veolia Environnement 5.25% 2013		18,235			19,710
Veolia Environnement 6.00% 2018		11,445			12,838
Veolia Environnement 6.125% 2033	€	12,275			17,960
Israel Electric Corp. Ltd. 7.25% 20194	$	24,800			27,335
Israel Electric Corp. 7.25% 2019		8,125			8,956
Israel Electric Corp. Ltd. 8.10% 20964		6,250			6,468
Enel Finance International SA 3.875% 20144		32,990			33,576
ENEL SpA 5.625% 2027	€	5,760			7,880
Northern States Power Co., First Mortgage Bonds, 5.25% 2018	$	6,500			7,180
Public Service Co. of Colorado 5.80% 2018		6,300			7,199
Public Service Co. of Colorado 5.125% 2019		4,350			4,752
Public Service Co. of Colorado 3.20% 2020		14,945			14,121
Carolina Power & Light Co. d/b/a Progress Energy Carolinas, Inc., First Mortgage Bonds, 5.125% 2013		5,000			5,488
Progress Energy, Inc. 6.05% 2014		2,100			2,334
Progress Energy, Inc. 7.05% 2019		15,175			18,033
Ohio Power Co., Series H, 4.85% 2014		5,965			6,325
Ohio Power Co., Series K, 6.00% 2016		15,000			16,906
Ohio Power Co., Series G, 6.60% 2033		1,500			1,673
Sierra Pacific Power Co., General and Refunding Mortgage Notes, Series Q, 5.45% 2013		4,275			4,664
Nevada Power Co., General and Refunding Mortgage Notes, Series L, 5.875% 2015		2,550			2,846
Nevada Power Co., General and Refunding Mortgage Notes, Series M, 5.95% 2016		1,000			1,124
Nevada Power Co., General and Refunding Mortgage Notes, Series S, 6.50% 2018		10,025			11,633
Teco Finance, Inc. 6.75% 2015		15,546			17,585
Teco Finance, Inc. 5.15% 2020		1,700			1,766
Abu Dhabi National Energy Co. PJSC (TAQA) 6.165% 20174		12,000			12,667
Abu Dhabi National Energy Co. PJSC (TAQA) 6.165% 2017		2,700			2,850
Abu Dhabi National Energy Co. PJSC (TAQA) 6.50% 20364		2,000			1,997
Union Electric Co. 4.65% 2013		3,000			3,209
Ameren Corp. 8.875% 2014		7,000			7,882
Union Electric Co. 5.40% 2016		5,750			6,336
Edison Mission Energy 7.75% 2016		2,025			1,752
Midwest Generation, LLC, Series B, 8.56% 20165		13,037			13,200
Homer City Funding LLC 8.734% 20265		1,868			1,728
Intergen Power 9.00% 20174		15,450			16,454
AES Corp. 7.75% 2015		11,575			12,414
AES Corp. 8.00% 2020		3,350			3,568
PSEG Power LLC 7.75% 2011		10,000			10,195
Public Service Electric and Gas Co., Series E, 5.30% 2018		4,990			5,590
Texas Competitive Electric Holdings Co. LLC, Term Loan B2, 3.764% 20143,5,7		14,951			11,595
Texas Competitive Electric Holdings Co. LLC, Series B, 10.25% 2015		3,005			1,698
Texas Competitive Electric Holdings Co. LLC, Series A, 10.25% 2015		1,820			1,037
Virginia Electric and Power Co., Series B, 5.95% 2017		10,000			11,511
Commonwealth Edison Co., First Mortgage Bonds, Series 105, 5.40% 2011		9,000			9,389
Empresa Nacional de Electricidad SA 8.35% 2013		5,000			5,609
Empresa Nacional de Electricidad SA 8.625% 2015		3,000			3,543
SP PowerAssets Ltd. 5.00% 20134		8,000			8,689
Old Dominion Electric Cooperative, Series 2003-A, 5.676% 20285		6,750			7,485
PG&E Corp. 5.75% 2014		2,000			2,191
Pacific Gas and Electric Co. 8.25% 2018		4,000			5,205
Kern River Funding Corp. 4.893% 20184,5		6,729			6,954
NRG Energy, Inc. 7.25% 2014		2,900			2,965
NRG Energy, Inc. 7.375% 2016		2,800			2,877
Colbun SA 6.00% 20204		5,400			5,636
Korea East-West Power Co., Ltd. 4.875% 20114		5,000			5,038
Tri-State Generation and Transmission Assn. Inc., Pass Through Trust, Series 2003-A, 6.04% 20184,5		2,414			2,561
CenterPoint Energy Houston Electric, LLC, General Mortgage Bonds, Series U, 7.00% 2014		1,700			1,944
					963,848
HEALTH CARE — 2.45%
Pharmaceuticals, biotechnology & life sciences — 1.42%
Roche Holdings Inc. 5.00% 20144		25,000			27,397
Roche Holdings Inc. 6.00% 20194		42,930			49,935
Roche Holdings Inc. 7.00% 20394		31,060			39,412
Pfizer Inc 4.45% 2012		11,040			11,523
Pfizer Inc 5.35% 2015		5,125			5,767
Pfizer Inc 6.20% 2019		39,900			46,814
Pfizer Inc 7.20% 2039		3,000			3,896
GlaxoSmithKline Capital Inc. 4.85% 2013		20,000			21,728
GlaxoSmithKline Capital Inc. 5.65% 2018		19,000			21,758
GlaxoSmithKline Capital Inc. 6.375% 2038		15,000			17,791
Schering-Plough Corp. 5.30% 20133		6,000			6,669
Schering-Plough Corp. 5.375% 2014	€	6,395			9,410
Merck & Co., Inc. 4.00% 2015	$	3,000			3,222
Schering-Plough Corp. 6.00% 2017		23,740			27,781
Merck & Co., Inc. 5.85% 2039		10,500			11,804
Biogen Idec Inc. 6.00% 2013		30,050			32,474
Biogen Idec Inc. 6.875% 2018		20,000			22,580
Elan Finance PLC and Elan Finance Corp. 8.875% 2013		16,400			16,728
Elan Finance PLC and Elan Finance Corp. 8.75% 2016		31,720			32,037
Elan Finance PLC and Elan Finance Corp. 8.75% 20164		1,500			1,511
Novartis Capital Corp. 1.90% 2013		15,000			15,248
Novartis Capital Corp. 4.125% 2014		11,025			11,774
Novartis Capital Corp. 2.90% 2015		7,750			7,970
Novartis Securities Investment Ltd. 5.125% 2019		4,530			5,019
Hospira, Inc. 6.05% 2017		26,473			29,697
Abbott Laboratories 2.70% 2015		11,500			11,737
Abbott Laboratories 5.125% 2019		10,000			11,029
AstraZeneca PLC 5.40% 2012		12,000			12,946
Quintiles Transnational 9.50% 20143,4,9		1,980			2,035
Patheon Inc. 8.625% 20174		2,010			2,015
Endo Pharmaceuticals Holdings Inc. 7.00% 20204		1,100			1,128
					520,835
Health care equipment & services — 1.03%
Cardinal Health, Inc. 5.50% 2013	$	12,535		$	13,586
Cardinal Health, Inc. 4.00% 2015		12,490			12,950
Cardinal Health, Inc. 4.625% 2020		6,020			6,018
Allegiance Corp. 7.00% 2026		9,635			10,822
UnitedHealth Group Inc. 5.25% 2011		2,463			2,484
UnitedHealth Group Inc. 6.00% 2017		26,892			30,031
UnitedHealth Group Inc. 3.875% 2020		7,100			6,787
UnitedHealth Group Inc. 5.70% 2040		1,250			1,249
Express Scripts Inc. 5.25% 2012		6,320			6,673
Express Scripts Inc. 6.25% 2014		28,133			31,476
HCA Inc. 9.125% 2014		295			310
HCA Inc. 9.25% 2016		530			567
HCA Inc. 9.625% 20163,9		557			598
HCA Inc. 7.75% 20214		31,475			31,554
Boston Scientific Corp. 6.25% 2015		14,265			15,148
Boston Scientific Corp. 5.125% 2017		4,265			4,262
Boston Scientific Corp. 6.00% 2020		8,000			8,354
Boston Scientific Corp. 7.375% 2040		400			438
VWR Funding, Inc., Series B, 10.25% 20153,9		25,784			27,202
Coventry Health Care, Inc. 6.30% 2014		13,395			14,156
Coventry Health Care, Inc. 5.95% 2017		11,440			11,646
PTS Acquisition Corp. 9.50% 20153,9		22,716			23,057
Aetna Inc. 5.75% 2011		17,500			17,890
Aetna Inc. 3.95% 2020		5,000			4,815
Medco Health Solutions, Inc. 2.75% 2015		19,150			19,020
Tenet Healthcare Corp. 7.375% 2013		8,195			8,441
Tenet Healthcare Corp. 9.25% 2015		6,770			7,244
Surgical Care Affiliates, Inc. 8.875% 20153,4,9		3,927			4,006
Surgical Care Affiliates, Inc. 10.00% 20174		6,845			6,982
Bausch & Lomb Inc. 9.875% 2015		9,625			10,347
Multiplan Inc. 9.875% 20184		9,500			10,117
WellPoint, Inc. 5.00% 2011		1,000			1,001
WellPoint, Inc. 4.35% 2020		4,000			3,976
WellPoint, Inc. 5.80% 2040		3,000			3,066
ConvaTec Healthcare 10.50% 20184		7,285			7,421
Symbion Inc. 11.75% 20153,9		8,383			6,939
HealthSouth Corp. 10.75% 2016		4,625			5,006
Merge Healthcare Inc 11.75% 2015		1,225			1,311
					376,950
TELECOMMUNICATION SERVICES — 2.15%
Olivetti Finance NV 7.25% 2012	€	8,830			12,567
Telecom Italia Capital SA 5.25% 2015	$	57,692			59,130
Telecom Italia Capital SA 6.999% 2018		31,400			33,295
Telecom Italia Capital SA 7.175% 2019		31,500			33,757
Telecom Italia Capital SA 6.375% 2033		2,833			2,438
Telecom Italia SpA 7.75% 2033	€	9,635			13,758
Telecom Italia Capital SA 7.721% 2038	$	5,917			5,880
Verizon Communications Inc. 3.75% 2011		47,625			48,213
ALLTEL Corp. 7.00% 2012		13,299			14,435
Verizon Global Funding Corp. 7.375% 2012		7,500			8,284
Verizon Communications Inc. 5.55% 2014		4,710			5,197
Verizon Communications Inc. 8.50% 2018		16,000			20,969
Verizon Communications Inc. 8.75% 2018		26,000			34,002
SBC Communications Inc. 5.875% 2012		12,587			13,567
AT&T Wireless Services, Inc. 8.125% 2012		12,630			13,801
AT&T Inc. 4.95% 2013		20,950			22,467
SBC Communications Inc. 5.625% 2016		29,575			33,201
AT&T Inc. 6.55% 2039		8,500			9,283
AT&T Inc. 5.35% 20404		4,800			4,530
Sprint Capital Corp. 8.375% 2012		900			956
Nextel Communications, Inc., Series E, 6.875% 2013		13,515			13,616
Nextel Communications, Inc., Series F, 5.95% 2014		29,070			28,707
Nextel Communications, Inc., Series D, 7.375% 2015		19,100			19,219
France Télécom 4.375% 2014		13,930			14,896
France Télécom 2.125% 2015		41,960			40,891
Vodafone Group PLC, Term Loan, 6.875% 20155,6,7,9		4,600			4,715
Vodafone Group PLC 5.625% 2017		5,580			6,237
Vodafone Group PLC 5.45% 2019		25,000			27,519
Telefónica Emisiones, SAU 4.375% 2016	€	19,675			26,863
Telefónica Emisiones, SAU 5.134% 2020	$	4,200			4,051
Clearwire Communications and Clearwire Finance, Inc. 12.00% 20154		15,485			16,762
Clearwire Communications and Clearwire Finance, Inc. 12.00% 20154		1,500			1,624
Clearwire Communications and Clearwire Finance, Inc. 12.00% 20174		9,150			9,493
Cricket Communications, Inc. 10.00% 2015		12,760			13,733
Cricket Communications, Inc. 7.75% 2016		11,600			12,093
Wind Acquisition SA 11.75% 20174		17,275			19,564
Wind Acquisition SA 7.25% 20184		5,675			5,788
Deutsche Telekom International Finance BV 4.875% 2014		16,250			17,479
Deutsche Telekom International Finance BV 6.75% 2018		5,900			6,988
Koninklijke KPN NV 8.375% 2030		12,725			16,588
PCCW-HKT Capital Ltd. 8.00% 20113,4		15,000			15,792
American Tower Corp. 4.625% 2015		14,875			15,555
Digicel Group Ltd. 12.00% 20144		5,000			5,850
Digicel Group Ltd. 8.875% 20154		8,540			8,668
América Móvil, SAB de CV 5.00% 2020		6,700			6,998
América Móvil, SAB de CV 8.46% 2036	MXN27,000				2,025
Trilogy International Partners, LLC, 10.25% 20164	$	7,000			6,965
SK Telecom Co., Ltd. 4.25% 20114		6,000			6,033
Singapore Telecommunications Ltd. 6.375% 2011		3,475			3,634
Singapore Telecommunications Ltd. 6.375% 20114		2,050			2,144
Frontier Communications Corp. 8.25% 2017		4,000			4,410
LightSquared, Term Loan B, 12.00% 20145,7,9		4,750			4,384
Crown Castle International Corp. 9.00% 2015		2,550			2,830
Crown Castle International Corp. 7.75% 20174		300			329
Intelsat Jackson Holding Co. 8.50% 20194		1,175			1,284
Hawaiian Telcom, Inc. 9.00% 20153,5,7,9		1,076			1,085
Orascom Telecom 7.875% 20144		1,010			954
SBA Telecommunications, Inc. 8.00% 2016		725			788
Syniverse Holdings, Inc. 9.125% 20194		500			519
Sorenson Communications 10.50% 20154		575			354
					787,157
CONSUMER STAPLES — 1.88%
Food & staples retailing — 1.01%
Kroger Co. 5.00% 2013		18,000			19,403
Kroger Co. 7.50% 2014		9,343			10,779
Kroger Co. 3.90% 2015		10,000			10,518
Kroger Co. 6.40% 2017		41,905			48,180
The Kroger Co. 7.00% 2018		4,372			4,997
CVS Caremark Corp. 6.117% 20134,5		656			705
CVS Caremark Corp. 6.60% 2019		17,521			20,548
CVS Caremark Corp. 5.789% 20264,5		14,455			14,574
CVS Caremark Corp. 6.036% 20285		18,905			19,443
CVS Caremark Corp. 6.943% 20305		22,004			23,986
CVS Caremark Corp. 6.125% 2039		5,700			6,111
Tesco PLC 5.50% 20174		31,959			35,706
Delhaize Group 5.875% 2014		6,850			7,565
Delhaize Group 6.50% 2017		19,205			21,801
Delhaize Group 5.70% 20404		5,465			5,220
Wal-Mart Stores, Inc. 2.875% 2015		11,550			11,860
Wal-Mart Stores, Inc. 5.80% 2018		12,800			14,729
Wal-Mart Stores, Inc. 3.25% 2020		3,570			3,362
Rite Aid Corp. 9.75% 2016		26,650			29,482
Safeway Inc. 6.25% 2014		100			111
Safeway Inc. 6.35% 2017		15,000			16,773
Safeway Inc. 5.00% 2019		1,000			1,030
Safeway Inc. 3.95% 2020		6,360			6,034
Safeway Inc. 7.25% 2031		3,000			3,357
Tops Holding Corp. and Tops Markets, LLC. 10.125% 2015		7,625			7,873
SUPERVALU INC. 7.50% 2012		365			371
Albertson’s, Inc. 7.25% 2013		2,025			2,040
SUPERVALU INC. 7.50% 2014		830			805
SUPERVALU INC. 8.00% 2016		4,200			4,043
Stater Bros. Holdings Inc. 7.75% 2015		5,150			5,317
Stater Bros. Holdings Inc. 7.375% 20184		1,100			1,133
Walgreen Co. 4.875% 2013		5,000			5,465
Costco Wholesale Corp. 5.30% 2012		3,000			3,157
Ingles Markets, Inc. 8.875% 2017		2,550			2,741
					369,219
Food, beverage & tobacco — 0.87%
Anheuser-Busch InBev NV 2.50% 2013		5,000			5,119
Anheuser-Busch InBev NV 7.20% 20144		27,500			31,471
Anheuser-Busch InBev NV 3.625% 2015		29,250			30,221
Anheuser-Busch InBev NV 4.125% 2015		37,375			39,401
Anheuser-Busch InBev NV 8.625% 2017	€	2,500			4,278
Anheuser-Busch InBev NV 6.875% 20194	$	7,740			9,242
Anheuser-Busch InBev NV 7.75% 20194		18,367			22,891
Anheuser-Busch InBev NV 5.00% 2020		2,500			2,647
Anheuser-Busch InBev NV 5.375% 2020		17,600			19,106
Coca-Cola Co. 1.50% 2015		23,380			22,467
Coca-Cola Co. 3.15% 2020		12,565			11,814
Kraft Foods Inc. 2.625% 2013		10,215			10,511
Kraft Foods Inc. 4.125% 2016		5,000			5,255
Kraft Foods Inc. 5.375% 2020		13,390			14,437
Kraft Foods Inc. 6.50% 2040		2,000			2,249
Altria Group, Inc. 9.25% 2019		13,000			16,992
Altria Group, Inc. 9.95% 2038		4,100			5,794
Altria Group, Inc. 10.20% 2039		4,000			5,798
PepsiCo, Inc. 3.10% 2015		22,000			22,970
PepsiCo, Inc. 3.125% 2020		2,500			2,354
PepsiCo, Inc. 4.875% 2040		2,000			1,948
British American Tobacco International Finance PLC 9.50% 20184		13,000			17,133
Smithfield Foods, Inc., Series B, 7.75% 2013		150			161
Smithfield Foods, Inc. 10.00% 20144		2,475			2,865
Smithfield Foods, Inc. 7.75% 2017		725			758
CEDC Finance Corp. 9.125% 20164		3,500			3,736
BFF International Ltd. 7.25% 20204		3,000			3,135
Constellation Brands, Inc. 8.375% 2014		550			604
Constellation Brands, Inc. 7.25% 2017		750			798
Tyson Foods, Inc. 10.50% 2014		700			831
Tyson Foods, Inc. 7.35% 20163		500			551
TreeHouse Foods, Inc. 7.75% 2018		1,200			1,304
Cott Beverages Inc. 8.375% 2017		1,000			1,085
					319,926
Household & personal products — 0.00%
Elizabeth Arden, Inc. 7.75% 2014		1,625			1,656
Spectrum Brands Inc. 9.50% 20184		1,400			1,540
Procter & Gamble Co. 3.50% 2015		150			158
					3,354
MATERIALS — 0.87%
Dow Chemical Co. 7.60% 2014		21,250			24,528
Dow Chemical Co. 5.70% 2018		1,700			1,842
Dow Chemical Co. 8.55% 2019		14,800			18,577
Dow Chemical Co. 9.40% 2039		1,200			1,747
International Paper Co. 7.40% 2014		26,750			30,372
International Paper Co. 7.95% 2018		6,970			8,306
International Paper Co. 7.50% 2021		4,330			5,124
Rio Tinto Finance (USA) Ltd. 8.95% 2014		2,500			3,029
Rio Tinto Finance (USA) Ltd. 9.00% 2019		22,670			30,495
ArcelorMittal 3.75% 2015		28,500			28,767
ArcelorMittal 7.00% 2039		3,000			3,123
POSCO 4.25% 20204		31,210			29,694
Reynolds Group 7.75% 20164		13,700			14,556
Reynolds Group 8.50% 20184		5,540			5,595
Reynolds Group 7.125% 20194		2,465			2,520
BHP Billiton Finance (USA) Ltd. 5.50% 2014		16,045			17,769
Georgia Gulf Corp. 9.00% 20174		14,975			16,323
CEMEX Finance LLC 9.50% 2016		5,925			6,140
CEMEX Finance LLC 9.50% 20164		5,200			5,389
CEMEX SA 9.25% 20204		1,126			1,112
Vale Overseas Ltd. 6.25% 2016		9,295			10,363
Plastipak Holdings, Inc. 8.50% 20154		7,165			7,416
Anglo American Capital PLC 2.15% 20134		5,130			5,178
Praxair, Inc. 4.375% 2014		1,850			1,978
Praxair, Inc. 4.625% 2015		2,500			2,724
Ball Corp. 7.125% 2016		1,270			1,375
Ball Corp. 6.75% 2020		690			728
Ball Corp. 5.75% 2021		1,850			1,795
Airgas, Inc. 7.125% 2018		3,000			3,323
Mercer International Inc. 9.50% 20174		3,210			3,314
Yara International ASA 7.875% 20194		2,675			3,193
Nalco Finance Holdings LLC and Nalco Finance Holdings Inc. 9.00% 2014		2,254			2,310
Nalco Co. 8.25% 2017		300			327
Arbermarle Corp. 5.10% 2015		2,156			2,306
E.I. du Pont de Nemours and Co. 5.25% 2016		2,000			2,240
ICI Wilmington, Inc. 5.625% 2013		2,000			2,185
Georgia-Pacific Corp. 8.125% 2011		2,065			2,142
Owens-Brockway Glass Container Inc. 6.75% 2014		325			332
Owens-Brockway Glass Container Inc. 7.375% 2016		1,645			1,756
Graphic Packaging International, Inc. 9.50% 2017		1,195			1,310
Graphic Packaging International, Inc. 7.875% 2018		700			737
Smurfit Capital Funding PLC 7.50% 2025		2,150			1,994
Potash Corp. of Saskatchewan Inc. 5.875% 2036		1,600			1,661
Ardagh Packaging Finance 7.375% 2017	€	500			675
Ardagh Packaging Finance 7.375% 20174	$	200			207
Ardagh Packaging Finance 9.125% 20204		300			313
LBI Escrow Corp 8.00% 20174		810			898
Rockwood Specialties Group, Inc. 7.625% 2014	€	500			685
Solutia Inc. 8.75% 2017	$	610			671
Newpage Corp. 11.375% 2014		365			345
					319,489
INFORMATION TECHNOLOGY — 0.87%
Semiconductors & semiconductor equipment — 0.39%
Freescale Semiconductor, Inc. 8.875% 2014		4,300			4,515
Freescale Semiconductor, Inc. 9.125% 20143,9		19,834			20,826
Freescale Semiconductor, Inc. 10.125% 2016		8,780			9,285
Freescale Semiconductor, Inc. 9.25% 20184		5,250			5,801
Freescale Semiconductor, Inc. 10.125% 20184		3,925			4,435
NXP BV and NXP Funding LLC 3.039% 20133		3,245			3,208
NXP BV and NXP Funding LLC 10.00% 201311		6,882			7,863
NXP BV and NXP Funding LLC 7.875% 2014		1,000			1,045
NXP BV and NXP Funding LLC 8.625% 2015	€	5,125			7,088
NXP BV and NXP Funding LLC 9.50% 2015	$	16,120			17,289
NXP BV and NXP Funding LLC 9.75% 20184		6,075			6,865
National Semiconductor Corp. 6.15% 2012		3,850			4,098
National Semiconductor Corp. 6.60% 2017		23,000			25,443
KLA-Tencor Corp. 6.90% 2018		20,000			22,032
Advanced Micro Devices, Inc. 8.125% 2017		3,075			3,275
					143,068
Software & services — 0.35%
First Data Corp., Term Loan B2, 3.011% 20143,5,7		4,516			4,184
First Data Corp. 9.875% 2015		1,222			1,164
First Data Corp. 9.875% 2015		224			214
First Data Corp. 10.55% 20159		859			796
First Data Corp. 11.25% 2016		26,950			23,716
First Data Corp. 8.875% 20204		6,000			6,360
First Data Corp. 8.25% 20214		10,302			9,941
First Data Corp. 12.625% 20214		20,631			19,806
First Data Corp. 8.75% 20223,4,9		10,327			10,043
International Business Machines Corp. 2.00% 2016		35,500			34,752
International Business Machines Corp. 5.60% 2039		6,000			6,562
Serena Software, Inc. 10.375% 2016		7,645			7,855
SunGard Data Systems Inc. 7.375% 20184		765			773
SunGard Data Systems Inc. 7.625% 20204		636			647
					126,813
Technology hardware & equipment — 0.13%
Cisco Systems, Inc. 2.90% 2014		10,125			10,512
Cisco Systems, Inc. 5.50% 2016		2,000			2,285
Cisco Systems, Inc. 4.95% 2019		2,500			2,729
Cisco Systems, Inc. 4.45% 2020		6,500			6,823
Sanmina-SCI Corp. 3.052% 20143,4		7,871			7,478
Sanmina-SCI Corp. 8.125% 2016		11,490			11,662
Jabil Circuit, Inc. 8.25% 2018		5,850			6,654
					48,143
Total corporate bonds & notes				$	10,627,854
BONDS & NOTES OF GOVERNMENTS & GOVERNMENT AGENCIES OUTSIDE THE U.S. — 6.36%
Polish Government, Series 0414, 5.75% 2014	PLN166,821				57,543
Polish Government 3.875% 2015	$	7,805			7,972
Polish Government, Series 1017, 5.25% 2017	PLN255,245				84,298
Polish Government 6.375% 2019	$	74,825			84,194
United Mexican States Government Global 6.375% 2013		5,150			5,652
United Mexican States Government, Series MI10, 9.50% 2014	MXN262,800				23,854
United Mexican States Government, Series M10, 7.25% 2016		435,000			36,646
United Mexican States Government 3.50% 20172		235,145			20,169
United Mexican States Government Global 5.95% 2019	$	11,170			12,510
United Mexican States Government, Series M20, 10.00% 2024	MXN549,800				55,608
United Mexican States Government Global, Series A, 6.75% 2034	$	2,495			2,819
United Mexican States Government, Series M30, 10.00% 2036	MXN138,000				13,877
United Mexican States Government 4.00% 20402		133,852			11,266
South Korean Government, Series 1303, 5.25% 2013	KRW31,498,750				28,848
South Korean Government 4.25% 2014		29,650,000			26,415
South Korean Government 4.75% 2014		48,640,000			44,524
South Korean Government 5.00% 2014		11,870,000			10,950
South Korean Government 5.75% 2014	$	21,100			23,085
South Korean Government 5.25% 2015	KRW24,200,000				22,475
South Korean Government 5.50% 2017		10,100,000			9,551
Turkey (Republic of) 10.00% 20122	TRY29,232				21,369
Turkey (Republic of) 16.00% 2012		9,555			6,774
Turkey (Republic of) 10.00% 2013		13,350			9,201
Turkey (Republic of) 16.00% 2013		21,045			16,493
Turkey (Republic of) 10.00% 2015		13,000			9,118
Turkey (Republic of) 7.50% 2017	$	5,725			6,798
Turkey (Republic of) 6.75% 2018		17,250			19,794
Turkey (Republic of) 5.625% 2021		8,000			8,360
Turkey (Republic of) 8.00% 2034		1,250			1,572
Turkey (Republic of) 6.75% 2040		9,300			10,183
Brazilian Treasury Bill 0% 2011	BRL 8,980				5,411
Brazil (Federal Republic of) 6.00% 20152		7,803			4,739
Brazil (Federal Republic of) Global 12.50% 2016		30,400			21,298
Brazil (Federal Republic of) 10.00% 2017		28,515			15,769
Brazil (Federal Republic of) 6.00% 20172		66,199			40,615
Brazil (Federal Republic of) Global 4.875% 2021	$	5,250			5,381
Brazil (Federal Republic of) Global 12.25% 2030		425			771
Brazil (Federal Republic of) Global 7.125% 2037		750			898
Brazil (Federal Republic of) Global 11.00% 2040		1,135			1,532
Hungarian Government, Series 14/C, 5.50% 2014	HUF4,427,730				20,019
Hungarian Government, Series 17/B, 6.75% 2017		738,000			3,357
Hungarian Government, Series 19/A, 6.50% 2019		500,000			2,180
Hungarian Government 6.25% 2020	$	66,950			64,998
Malaysian Government, Series 0109, 2.509% 2012	MYR22,045				7,098
Malaysian Government, Series 509, 3.21% 2013		61,000			19,833
Malaysian Government, Series 3/03, 3.702% 2013		38,870			12,773
Malaysian Government, Series 204, 5.094% 2014		75,350			25,861
Malaysian Government, Series 0409, 3.741% 2015		63,870			21,036
Indonesia (Republic of), Series 23, 11.00% 2012	IDR 4,090,000				496
Indonesia (Republic of), Series 33, 12.50% 2013		8,710,000			1,094
Indonesia (Republic of), Series 20, 14.275% 2013		2,110,000			283
Indonesia (Republic of), Series 51, 11.25% 2014		1,260,000			160
Indonesia (Republic of) 9.50% 2015		28,000,000			3,425
Indonesia (Republic of), Series 30, 10.75% 2016		176,767,000			22,875
Indonesia (Republic of) 11.50% 2019		107,388,000			14,826
Indonesia (Republic of) 11.625% 2019	$	10,254			15,253
Indonesia (Republic of) 5.875% 2020		6,800			7,497
Indonesia (Republic of) 5.875% 20204		6,200			6,835
Indonesia (Republic of) 7.75% 2038		10,500			12,862
Canadian Government 2.00% 2014	$	C83,205			83,204
Australia Government Agency-Guaranteed, National Australia Bank 0.79% 20143,4	$	25,000			25,037
Australia Government Agency-Guaranteed, National Australia Bank 3.375% 20144		50,550			52,552
United Kingdom 3.75% 2019	£	39,905			64,232
Russian Federation 5.00% 2020	$	21,000			21,105
Russian Federation 7.50% 20305		32,945			38,216
Russian Federation 7.50% 20304,5		130			151
France Government Agency-Guaranteed, Société Finance 2.25% 20124		12,585			12,832
France Government Agency-Guaranteed, Société Finance 2.875% 20144		33,200			34,280
France Government Agency-Guaranteed, Société Finance 3.375% 20144		10,000			10,518
Colombia (Republic of) Global 12.00% 2015	COP39,750,000				27,684
Colombia (Republic of) Global 7.75% 2021		4,035,000			2,506
Colombia (Republic of) Global 9.85% 2027		12,551,000			9,266
Colombia (Republic of) Global 7.375% 2037	$	13,600			16,184
Argentina (Republic of) 0.169% 20123,5		24,755			5,899
Argentina (Republic of) 7.00% 2015		9,345			8,827
Argentina (Republic of) 8.28% 20335,9		40,004			37,304
Argentina (Republic of) GDP-Linked 2035	ARS 9,238				341
Argentina (Republic of) 1.18% 20382,5		10,066			1,018
Australia Government Agency-Guaranteed, Commonwealth Bank of Australia 2.50% 20124	$	7,250			7,461
Australia Government Agency-Guaranteed, Commonwealth Bank of Australia 2.90% 20144		23,005			23,926
Australia Government Agency-Guaranteed, Commonwealth Bank of Australia 3.625% 20144		20,000			21,321
Irish Government 4.00% 2014	€	24,455			29,751
Irish Government 4.40% 2019		12,235			12,222
Irish Government 5.00% 2020		10,335			10,138
Japanese Government, Series 231, 1.30% 2011	¥	50			1
Japanese Government, Series 296, 1.50% 2018		2,468,700			31,987
Japanese Government 2.40% 2038		1,342,250			18,006
Israeli Government, Series 2683, 6.50% 2016	ILS64,800				20,397
Israeli Government 5.50% 2017		63,060			18,996
Israeli Government 5.125% 2019	$	7,250			7,796
Croatian Government 6.75% 20194		22,450			23,534
Croatian Government 6.75% 2019		19,650			20,599
Croatian Government 6.625% 20204		2,915			3,015
Italian Government 4.25% 2013	€	14,100			19,336
Italian Government 3.00% 2015		20,310			26,362
Sweden Government Agency-Guaranteed, Swedbank AB 2.80% 20124	$	9,000			9,207
Sweden Government Agency-Guaranteed, Swedbank AB 2.90% 20134		35,000			36,249
New Zealand Government Agency-Guaranteed, Westpac Securities Co. 2.50% 20124		8,250			8,392
New Zealand Government Agency-Guaranteed, Westpac Securities Co. 3.45% 20144		33,320			35,563
Denmark Government Agency-Guaranteed, Danish Finance Co. 2.45% 20124		42,220			43,108
New South Wales Treasury Corp., Series 19, 6.00% 2019	$	A33,350			34,449
Venezuela (Republic of) 8.50% 2014	$	245			208
Venezuela (Republic of) 7.65% 2025		985			623
Venezuela (Republic of) 9.25% 2027		31,745			23,809
Venezuela (Republic of) 9.25% 2028		11,160			7,589
Uruguay (Republic of) 5.00% 20182	UYU515,909				30,259
Uruguay (Republic of) 7.625% 20365	$	1,250			1,491
Peru (Republic of) 8.75% 2033		8,226			11,331
Peru (Republic of) 6.55% 20375		14,200			15,620
Europe Government Agency-Guaranteed, Dexia Credit Local 0.539% 20123,4		25,000			24,961
Aries Vermögensverwaltungs GmbH, Series C, 9.60% 2014		19,250			24,935
Iraq (Republic of) 5.80% 20285		25,300			23,339
Australia and New Zealand Government Agency-Guaranteed, Australia and New Zealand Banking Group Ltd. 3.25% 20124		21,750			22,321
South Africa (Republic of) 6.875% 2019		5,715			6,722
South Africa (Republic of) 5.50% 2020		12,000			12,825
Ireland Government Agency-Guaranteed, Irish Life & Permanent 3.60% 20134		19,600			17,849
Province of Ontario, Series 1, 1.875% 2012		17,375			17,717
Philippines (Republic of) 6.375% 2034		15,500			16,507
Egypt (Arab Republic of) 11.50% 2011	EGP30,000				5,292
Egypt (Arab Republic of) 11.55% 2013		61,000			10,279
United Kingdom Government Agency-Guaranteed, Lloyds TSB Bank PLC 2.80% 20124	$	15,000			15,283
Bermudan Government 5.603% 2020		6,090			6,345
Bermudan Government 5.603% 20204		6,000			6,251
German Government, Series 05, 3.25% 2015	€	4,590			6,520
German Government 3.75% 2019		2,060			2,949
Corporación Andina de Fomento 6.875% 2012	$	5,895			6,274
Corporación Andina de Fomento 5.125% 2015		2,000			2,121
Corporación Andina de Fomento 8.125% 2019		890			1,051
Dominican Republic 9.50% 20114,5		469			485
Dominican Republic 9.04% 20184,5		4,481			5,109
Dominican Republic 7.50% 20214,5		3,500			3,789
Banque Centrale de Tunisie 4.75% 2011	€	3,000			4,054
Banque Centrale de Tunisie 7.375% 2012	$	4,500			4,826
Netherlands Government Agency-Guaranteed, ING Bank NV 3.90% 20144		7,000			7,442
Panama (Republic of) Global 7.25% 2015		2,275			2,639
Panama (Republic of) Global 7.125% 2026		300			362
Panama (Republic of) Global 8.875% 2027		250			344
Panama (Republic of) Global 9.375% 2029		340			479
Panama (Republic of) Global 6.70% 20365		2,159			2,418
Gabonese Republic 8.20% 2017		5,300			6,227
El Salvador (Republic of) 7.375% 2019		4,800			5,328
Guatemala (Republic of) 10.25% 20114		1,000			1,077
LCR Finance PLC 5.10% 2051	£	165			296
					2,329,411
ASSET-BACKED OBLIGATIONS5 — 1.50%
CPS Auto Receivables Trust, Series 2005-D, Class A-2, FSA insured, 5.06% 20124	$	898			910
CPS Auto Receivables Trust, Series 2006-A, Class 1-A-4, FSA insured, 5.33% 20124		2,047			2,050
CPS Auto Receivables Trust, Series 2006-B, Class A-4, MBIA insured, 5.81% 20124		8,622			8,690
CPS Auto Receivables Trust, Series 2007-A, Class A-4, MBIA insured, 5.05% 20134		10,070			10,260
CPS Auto Receivables Trust, Series 2006-C, Class A-4, XLCA insured, 5.14% 20134		9,778			9,953
CPS Auto Receivables Trust, Series 2007-B, Class A-4, FSA insured, 5.60% 20144		14,215			14,579
CPS Auto Receivables Trust, Series 2007-C, Class A-4, FSA insured, 5.92% 20144		18,950			19,565
Aesop Funding II LLC, Series 2010-2A, Class A, 3.63% 20144		12,400			12,814
Aesop Funding II LLC, Series 2010-3A, Class B, 6.74% 20164		3,000			3,112
Aesop Funding II LLC, Series 2010-5A, Class A, 3.15% 20174		20,000			19,556
Washington Mutual Master Note Trust, Series 2006-A2A, Class A, 0.31% 20153,4		31,000			30,930
Vega ContainerVessel PLC, Series 2006-1, Class A, XLCA insured, 5.562% 20214		32,722			28,685
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2009-2A, Class A-1, 4.26% 20144		9,000			9,422
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2009-2A, Class A-2, 5.29% 20164		17,500			19,027
Long Beach Acceptance Auto Receivables Trust, Series 2006-B, Class A-4, FSA insured, 5.18% 2013		14,077			14,170
Long Beach Acceptance Auto Receivables Trust, Series 2007-A, Class A-4, FSA insured, 5.025% 2014		8,680			8,834
Vanderbilt Mortgage and Finance, Inc., Series 2002-C, Class A-4, 6.57% 2024		6,361			6,598
Vanderbilt Mortgage and Finance, Inc., Series 1999-B, Class I-A-6, 6.925% 2024		2,642			2,649
Vanderbilt Mortgage and Finance, Inc., Series 2000-C, Class A-4, 7.905% 2026		1,014			1,041
Vanderbilt Mortgage and Finance, Inc., Series 1997-C, Class II-A-1, 0.685% 20273		268			239
Vanderbilt Mortgage and Finance, Inc., Series 2000-D, Class A-4, 7.715% 2027		1,089			1,113
Vanderbilt Mortgage and Finance, Inc., Series 2000-C, Class A-5, 8.195% 2030		6,889			7,363
Vanderbilt Mortgage and Finance, Inc., Series 2001-C, Class M-1, 6.76% 2032		739			696
Vanderbilt Mortgage and Finance, Inc., Series 2002-C, Class M-1, 7.82% 2032		1,923			1,836
Capital One Auto Finance Trust, Series 2006-C, Class A-4, FGIC insured, 0.29% 20133		11,872			11,809
Capital One Auto Finance Trust, Series 2007-B, Class A-4, MBIA insured, 0.29% 20143		9,688			9,639
CarMax Auto Owner Trust, Series 2008-2, Class A-3a, 4.99% 2012		5,631			5,716
CarMax Auto Owner Trust, Series 2007-2, Class A-4, 5.27% 2012		15,315			15,607
Chase Issuance Trust, Series 2008-4, Class A, 4.65% 2015		18,000			19,350
AEP Texas Central Transitioning Funding II LLC, Secured Transition Bonds, Series A, Class A-3, 5.09% 2017		16,720			18,490
AmeriCredit Automobile Receivables Trust, Series 2006-B-G, Class A-4, FGIC insured, 5.21% 2013		13,667			13,924
AmeriCredit Automobile Receivables Trust, Series 2007-C-M, Class A-4-A, MBIA insured, 5.55% 2014		4,110			4,248
Spirit Master Funding LLC, Net-Lease Mortgage Notes, Series 2005-1, Class A-1, AMBAC insured, 5.05% 20234,6		22,004			18,044
RAMP Trust, Series 2004-RS10, Class A-I-6, 4.55% 2034		18,125			17,250
Prestige Auto Receivables Trust, Series 2007-1, Class A-3, FSA insured, 5.58% 20144		16,187			16,659
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class B-1, 7.30% 2021		3,759			3,827
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class A-4, 6.57% 2027		7,316			7,790
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class A-5, 7.12% 2032		3,000			3,270
Morgan Stanley ABS Capital I Inc., Series 2004-NC3, Class M-1, 1.056% 20343		18,564			14,177
USAA Auto Owner Trust, Series 2007-1, Class A-4, 5.55% 2013		13,940			14,055
AmeriCredit Prime Automobile Receivables Trust, Series 2007-2-M, Class A-4-A, MBIA insured, 5.35% 2016		9,411			9,876
MBNA Credit Card Master Note Trust, Series 2006-1, Class C, 0.68% 20153		10,000			9,709
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-3, 4.35% 2014		1,822			1,838
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-4, 5.27% 2018		934			935
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-5, 5.873% 2022		3,067			3,127
Lehman ABS Manufactured Housing Contract Trust, Series 2002-A, Class A, 0.71% 20333		3,933			3,655
Residential Asset Securities Corp. Trust, Series 2001-KS3, Class A-I-6, 5.96% 2031		8,463			8,205
First Horizon ABS Trust, Series 2006-HE2, Class A, FSA insured, 0.391% 20263		599			429
First Horizon ABS Trust, Series 2007-HE1, Class A, FSA insured, 0.391% 20293		9,727			7,303
CWHEQ Revolving Home Equity Loan Trust, Series 2006-I, Class 2-A, FSA insured, 0.40% 20373		5,936			4,595
CWHEQ Revolving Home Equity Loan Trust, Series 2007-B, Class A, FSA insured, 0.41% 20373		3,147			2,427
Ford Credit Auto Owner Trust, Series 2006-B, Class B, 5.43% 2012		6,632			6,659
Conseco Finance Securitizations Corp., Series 2002-2, Class A-2, 6.03% 2033		6,228			6,500
CWHEQ Home Equity Loan Trust, Series 2006-S2, Class A-5, FGIC insured, 5.753% 2027		10,740			5,825
Triad Automobile Receivables Trust, Series 2006-C, Class A-4, AMBAC insured, 5.31% 2013		5,654			5,709
Home Equity Asset Trust, Series 2004-7, Class M-1, 0.881% 20353		6,500			5,378
Green Tree Financial Corp., Series 1996-10, Class A-6, 7.30% 2028		848			871
Green Tree Financial Corp., Series 1997-6, Class A-7, 7.14% 2029		3,546			3,708
Conseco Finance Home Equity Loan Trust, Series 2002-B, Class M-1, 2.01% 20333		808			499
UCFC Manufactured Housing Contract, Series 1996-2, Class A, MBIA insured, 7.135% 2028		4,129			3,859
Consumers Funding LLC, Series 2001-1, Class A-5, 5.43% 2015		3,283			3,465
Origen Manufactured Housing Contract Trust, Series 2004-B, Class M-1, 5.73% 2035		1,932			1,931
Origen Manufactured Housing Contract Trust, Series 2004-B, Class M-2, 6.51% 2035		1,547			1,481
UPFC Auto Receivables Trust, Series 2007-A, Class A-3, MBIA insured, 5.53% 2013		3,358			3,375
Residential Funding Mortgage Securities II, Inc., Series 2005-HS1, Class A-1-2, FGIC insured, 4.66% 20353		1,651			1,598
Residential Funding Mortgage Securities II, Inc., Series 2006-HSA3, Class A, FSA insured, 0.391% 20363		1,630			1,271
Cendant Timeshare Receivables Funding, LLC, Series 2005-1, Class A-1, FGIC insured, 4.67% 20174		2,695			2,690
Wachovia Auto Loan Owner Trust, Series 2006-1, Class B, 5.15% 20124		2,469			2,470
World Omni Auto Receivables Trust, Series 2010-A, Class A-4, 2.21% 2015		2,350			2,400
Franklin Auto Trust, Series 2006-1, Class A-4, 5.03% 2014		276			276
Franklin Auto Trust, Series 2006-1, Class B, 5.14% 2014		2,000			2,009
SLM Student Loan Trust, Series 2003-10, Class A-4, 5.15% 20394	£	1,160			1,734
IndyMac Home Equity Mortgage Loan Asset-backed Trust, Series 2007-H1, Class A-1, FSA insured, 0.421% 20373	$	1,356			1,049
New Century Home Equity Loan Trust, Series 2004-A, Class A-II-5, FGIC insured, 5.25% 2034		945			942
Home Equity Mortgage Trust, Series 2006-2, Class 1A-1, 5.367% 20363		1,450			499
Home Equity Mortgage Trust, Series 2006-5, Class A-1, 5.50% 20373		2,020			365
IndyMac Home Equity Mortgage Loan Asset-backed Trust, Series SPMD 2001-A, Class AF-6, 6.537% 2030		636			558
Honda Auto Receivables Owner Trust, Series 2007-2, Class A-4, 5.57% 2013		138			138
ACLC Business Loan Receivables Trust, Series 2002-1, Class A-2, 7.462% 20224		147			129
					547,434
MUNICIPALS — 0.28%
State of New York, Long Island Power Authority, Electric System General Revenue Bonds, Series 2009-A, 5.75% 2039		24,330			25,167
Illinois General Obligation Bonds, Taxable Build America Bonds, Series 2010-3, 5.727% 2020		17,000			16,684
State of South Dakota, Educational Enhancement Funding Corp., Tobacco Settlement Asset-backed Bonds,
Series 2002-A, Class A, 6.72% 2025		17,346			15,189
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			12,828
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			12,709
State of Wisconsin, General Fund Annual Appropriation Bonds, Series 2009-A, 5.75% 2033		6,000			6,293
State of Texas, SA Energy Acquisition Public Facility Corp., Gas Supply Revenue Bonds, Series 2007, 5.50% 2023		6,000			6,259
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			6,118
State of Maryland, Howard Hughes Medical Institute, Taxable Bonds, 3.45% 2014		125			132
					101,379
Total bonds & notes (cost: $34,478,676,000)					35,529,939
Convertible securities — 0.04%
INFORMATION TECHNOLOGY — 0.04%
Linear Technology Corp., Series A, 3.00% convertible notes 2027	$	11,500			12,247
Advanced Micro Devices, Inc. 6.00% convertible notes 2015		2,963			3,000
Total convertible securities (cost: $11,663,000)					15,247
Preferred securities — 0.46%	Shares
FINANCIALS — 0.45%
AXA SA, Series B, 6.379%3,4		35,730,000			32,648
QBE Capital Funding II LP 6.797%3,4		36,255,000			31,610
Catlin Insurance Ltd. 7.249%3,4		32,375,000			28,652
BNP Paribas 7.195%3,4		23,600,000			22,774
HVB Funding Trust III 9.00% 20314		13,696,000			13,696
XL Capital Ltd., Series E, 6.50%3		13,215,000			11,497
HSBC Holdings PLC, Series 2, 8.00%		378,800			10,142
PNC Preferred Funding Trust I 6.517%3,4		10,700,000			8,502
SMFG Preferred Capital GBP 2 Ltd. 10.231%3		3,100,000			5,558
Barclays Bank PLC 7.434%3,4		1,500,000			1,481
					166,560
U.S. GOVERNMENT AGENCY SECURITIES  — 0.01%
US AgBank 6.11%3,4		5,000,000			3,325
Total preferred securities (cost: $160,629,000)					169,885
				Value
Common stocks — 0.04%	Shares				(000	)
CONSUMER DISCRETIONARY — 0.03%
American Media, Inc.6,11,12		453,779		$	7,602
Cooper-Standard Holdings Inc.4,12		60,544			2,725
Cooper-Standard Holdings Inc.4,12		24,906			1,121
					11,448
TELECOMMUNICATION SERVICES — 0.01%
Hawaiian Telcom Holdco, Inc.12		35,819			1,003
INDUSTRIALS— 0.00%
Atrium Corp.6,11,12		985			89
Total common stocks (cost: $11,276,000)					12,540
Warrants — 0.00%
TELECOMMUNICATION SERVICES — 0.00%
Hawaiian Telcom Holdco, Inc., warrants, expire 20156,12		47,929			192
CONSUMER DISCRETIONARY — 0.00%
Cooper-Standard Holdings Inc., warrants, expire 20174,12		5,096			132
Total warrants (cost: $11,356,000)					324
	Principal amount
Short-term securities — 2.98%		(000	)
Freddie Mac 0.165%–0.25% due 1/11–7/6/2011	$	261,850			261,700
Federal Home Loan Bank 0.16%–0.36% due 1/4–11/14/2011		234,783			234,594
General Electric Capital Corp. 0.17% due 1/19/2011		100,000			99,991
General Electric Capital Services, Inc. 0.23% due 2/28/2011		50,000			49,984
Private Export Funding Corp. 0.16%–0.26% due 1/20–2/14/20114		120,000			119,973
ExxonMobil Corp. 0.15% due 1/20/2011		75,000			74,994
Coca-Cola Co. 0.25% due 4/5/20114		51,900			51,869
Johnson & Johnson 0.15% due 1/3/20114		38,000			38,000
Google, Inc. 0.18%–0.20% due 1/10–3/4/20114		37,400			37,384
Fannie Mae 0.14% due 2/9/2011		33,200			33,195
Straight-A Funding LLC 0.24% due 2/22/20114		30,000			29,988
U.S. Treasury Bill 0.178% due 5/19/2011		22,100			22,087
Procter & Gamble Co. 0.22% due 1/4/20114		20,000			20,000
Federal Farm Credit Banks 0.35% due 2/10/2011		10,000			9,998
NetJets Inc. 0.17% due 1/20/20114		5,500			5,499
Total short-term securities (cost: $1,089,204,000)					1,089,256
Total investment securities (cost: $35,762,804,000)					36,817,191
Other assets less liabilities					(196,451	)
Net assets				$	36,620,740

1 A portion of this security was pledged as collateral for losses on unsettled forward currency contracts with certain counterparties. The total value of pledged collateral was $252,000, which represented .07% of the net assets of the fund.

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

3  Coupon rate may change periodically.

4 Acquired in a transaction exempt from registration under the Securities Act of 1933. May be resold in the U.S. in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $4,147,679,000, which represented 11.33% of the net assets of the fund.

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

6 Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities was $97,072,000, which represented .27% of the net assets of the fund.

7 Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $213,372,000, which represented .58% of the net assets of the fund.

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

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

10Step bond; coupon rate will increase at a later date.

11Acquired in a transaction exempt from registration under the Securities Act of 1933. May be subject to legal or contractual restrictions on resale.

    Further details on these holdings appear below.

	Acquisition	Cost			Value			Percent of
	date		(000	)		(000	)	net assets
NXP BV and NXP Funding LLC 10.00% 2013	7/17/2009	$	5,806		$	7,863			.02	%
American Media, Inc.	11/17/2010		7,603			7,602			.02
Atrium Corp.	4/30/2010		89			89			.00
Total restricted securities		$	13,498		$	15,554			.04	%

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

Key to abbreviations and symbols
ARS = Argentine pesos	DKr = Danish kroner	IDR = Indonesian rupiah	MYR = Malaysian ringgits
A$ = Australian dollars	EGP = Egyptian pounds	ILS = Israeli shekels	PLN = Polish zloty
BRL = Brazilian reais	€ = Euros	¥ = Japanese yen	TRY = Turkish liras
C$ = Canadian dollars	£ = British pounds	KRW = South Korean won	UYU = Uruguayan pesos
COP = Colombian pesos	HUF = Hungarian forints	MXN = Mexican pesos

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

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 prospectus and summary 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-908-0211O-S25557

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, 2010, and for the year then ended and have issued our report thereon dated February 7, 2011, 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, 2010, 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 7, 2011

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 28, 2011

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 28, 2011

By /s/ Ari M. Vinocor

Ari M. Vinocor, Treasurer and

Principal Financial Officer

Date: February 28, 2011