Barings Funds Trust NCSRS Certified semi-annual shareholder report (management investment company)

Barings Funds Trust N-CSRSCertified semi-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(s) 811-22845

Babson Capital Funds Trust

(Exact Name of Registrant as Specified in Charter)

550 South Tryon Street

Suite 3300

Charlotte, NC 28202

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (704) 805-7200

Janice M. Bishop

Secretary and Chief Legal Officer

c/o Babson Capital Management LLC

Independence Wharf

470 Atlantic Avenue

Boston MA 02210

(Name and Address of Agent for Service)

Date of fiscal year end: June 30

Date of reporting period: December 31, 2015

Item 1. Reports to Stockholders.

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BABSON CAPITAL FUNDS TRUST

Semi-Annual Report

December 31, 2015

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Anthony Sciacca

President

Babson Capital Funds Trust

Babson Capital Funds Trust

Babson Global Floating Rate Fund

Babson Global Credit Income Opportunities Fund

Babson Active Short Duration Bond Fund

Babson Total Return Bond Fund

Babson Emerging Market Debt Blended Total Return Fund

Babson Emerging Market Local Currency Debt Fund

Babson Global High Yield Fund

Babson U.S. High Yield Fund

Dear Shareholder,

Markets were volatile throughout 2015, and the final six months of the year did little to soothe investors’ angst about the future direction of the global economy. Falling commodity prices, currency market swings, uneven economic growth and opposing central bank monetary policies cast a negative pall on the minds of investors in the third and fourth quarters. Policy divergence among central banks was notably evident in December, as the U.S. Federal Reserve (Fed) began tightening monetary policy by raising interest rates for the first time in nearly a decade while central banks in Europe, China and Japan continued a loose monetary policy stance. The Fed’s move in December offered a glimmer of hope that the U.S. economy had recovered sufficiently to begin to raise interest rates after a decade of moribund growth and elevated unemployment levels. But that glimmer may already be dissipating, as recent Fed policy guidance indicates additional interest rate increases in 2016 may be muted.

The dichotomy among central banks in their efforts to manage economies is just one of several headwinds facing investors in 2016. Decelerating global growth remains a concern, with China, the world’s second-largest economy, showing signs of strain. Inflation expectations are declining globally, making it difficult for central banks to identify catalysts to move interest rates significantly higher than current levels. Case in point—the European Central Bank (ECB) elected to extend its current quantitative easing program by at least six months to March 2017. Add to the mix the U.S. presidential election and rising geopolitical tensions across Europe, the Middle East and parts of Asia, and 2016 is off to an inauspicious beginning. Investors are understandably tentative.

At Babson, we believe that with uncertainty comes opportunity. Our mutual fund platform has been constructed to reflect the best of our core competencies as an organization. With the addition of six new funds during the fourth quarter, our platform offers a diverse selection of investment vehicles that provide investors with access to the global fixed income markets, leveraging the same investment experience that we provide to the many institutional clients that we are privileged to serve. Our investment teams conduct rigorous fundamental analysis on every company in which we invest, while also bringing local market insights from our investment teams around the globe. While we expect continued headwinds in the near term, we believe the market volatility will likely provide opportunities to invest in high-conviction names. The markets in which we invest are inherently volatile, but by adhering to a disciplined, repeatable, bottom-up investment process and investing through the economic cycle, we believe we can identify attractive investment opportunities and create portfolios that are able to weather market turbulence over the long term. Our process has served our clients well for decades, through many market cycles and in adverse market conditions.

On behalf of the entire Babson team, we thank you for your partnership and trust, and we look forward to helping you achieve your investment objectives.

Sincerely,

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Anthony Sciacca

Cautionary Notice: Certain statements contained in this report may be “forward looking” statements. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date in which they are made and reflect management’s current estimates, projections, expectations or beliefs, and which are subject to risks and uncertainties that may cause actual results to differ materially. These statements are subject to change at any time based upon economic, market or other conditions and may not be relied upon as investment advice or an indication of Babson Capital Funds Trust’s (the “Trust”) trading intent. References to specific securities are not recommendations of such securities, and may not be representative of the Trust’s current or future investments. We undertake no obligation to publicly update these forward looking statements, whether as a result of new information, future events, or otherwise.

ALPS Distributors, Inc. is the distributor for the Babson mutual funds. ALPS and Babson are separate and unaffiliated. A prospectus can be obtained by calling 1.855.439.5459. Read the prospectus carefully before investing. Investors should carefully consider the investment objective, risks, charges and expenses of any mutual fund before investing. This and other important information is contained in the prospectus and summary prospectus.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

Investment Objective

The investment objective of the Babson Global Floating Rate Fund (“Global Floating Rate Fund” or the “Fund”) is to seek a high level of current income. Preservation of capital is a secondary goal.

Portfolio Management Commentary

How did the Fund perform?

The Fund reported a net total rate of return for the semi-annual reporting period from July 1, 2015 through December 31, 2015 of -3.50% and underperformed the Credit Suisse Global Loan Benchmark, which returned -2.66%.¹

What factors influenced performance of the Fund?

For the semi-annual reporting period, the Fund was overweight to European assets. The Fund’s European assets provided positive contribution to returns, while U.S. assets detracted from the Fund’s performance.

The Fund’s investments in the Energy sector and Metals/Mining sector were the leading detractors to contribution to return. Continued volatility and pressure on the price of oil caused commodity-related issuers to face significant selling pressure over the period. Seven of the Fund’s bottom ten contributors to its performance were commodity-related issuers.

Describe recent portfolio activity.

The number of portfolio holdings decreased to 185 from 197 during the reporting period. As a result, the portfolio’s positioning in Floating Rate Debt increased to 86.07% from 83.65%, and Fixed Rate Debt holdings decreased to 6.55% from 9.47%.

The Fund’s positioning across geographies remains relatively unchanged as the Fund remained overweight to European assets relative to the European weight in the global senior secured loan market. Even with the overweight positioning, the Fund modestly increased its exposure to U.S. assets over the past six months as the U.S. market experienced greater pricing pressure than the European market.

Over the past six months, the Fund’s Top 5 Industry concentrations remain unchanged with Healthcare, Education and Childcare maintaining the highest concentration, followed by Diversified/Conglomerate Service, Finance, Chemicals, Plastics and Rubber, and Retails Stores, respectively.

Describe portfolio positioning at period end.

The Fund finished the semi-annual reporting period, December 31, 2015, with holdings primarily in senior secured debt, namely 77.3% in First Lien Senior Secured Loans, 5.5% in Second Lien Senior Secured Loans, and 9.5% in Senior Secured Bonds. Senior Unsecured bonds composed just 0.3% of the portfolio.

From an industry perspective, the Fund remains well-diversified across a number of sectors based on Moody’s Industry Classification, with higher concentrations in Healthcare, Education and Childcare (10.5%), Diversified/Conglomerate Service (7.7%), and non-bank related Finance companies (7.4%) as of December 31, 2015.

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Total return describes the return to an investor based on the Class Y net expense ratio and includes the reinvestment of dividends and capital gains. Performance results reflect past performance and are no guarantee of future results. Current performance may be lower or higher than the performance data quoted. The net asset value (NAV) will fluctuate with market conditions. All returns 1-year or less are cumulative. The Credit Suisse Global Loan Benchmark is a market capitalization weighted average of the Credit Suisse Leveraged Loan Index and the Credit Suisse Western European Leveraged Loan Index. The Credit Suisse Leveraged Loan Index is designed to mirror the investable universe of the U.S. dollar-denominated leveraged loan market. The Credit Suisse Western European Leveraged Loan Index is designed to mirror the investable universe of the Western European leveraged loan market, with loans denominated in U.S. and Western European currencies. Indices are unmanaged. It is not possible to invest directly in an index.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

As of December 31, 2015, the Fund had the following credit quality breakdown: 16.6% in Ba assets, 59.6% in single-B credits and a small exposure to Caa and below at 4.4%. Approximately 10.6% of the Fund’s assets are not publicly rated, primarily consisting of European issuers that we believe have a credit quality similar to that of other assets in the portfolio. Cash and accrued income was 7.4% and Baa assets accounted for the remaining 2.2% of the portfolio assets.²

The Top 5 countries in the portfolio at the end of the semi-annual reporting period are the U.S. (64.5%), the United Kingdom (14.6%), Germany (9.3%), France (3.2%) and Canada (2.7%). Overall, the Fund has exposure to 16 different countries, and we continue to focus on building a well-diversified portfolio of global floating rate securities.

Describe market and portfolio outlook.

As we look into 2016, the Energy and Commodity sectors will continue to remain volatile as a result of the supply and demand imbalance. This volatility should be primarily concentrated in the U.S., as the European loan market has very little exposure to the Energy sector.

Despite a volatile reporting period, we believe issuer fundamentals outside of Energy and Commodity related sectors remain largely intact. With the exception of those troubled sectors, we expect loan market default rates to remain below long-term averages; within Energy and Commodities, however, we anticipate an increase in defaults in 2016.

Further divergence of Fed and ECB monetary policy will likely impact the global loan market to varying degrees in 2016.

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Ratings shown are the highest rating given by one of the following national rating agencies: S&P or Moody’s. Additional information about ratings can be found at www.moodys.com and www.standardandpoors.com. Credit ratings are subject to change. AAA, AA, A, and BBB are investment grade ratings; BB, B, CCC/CC/C and D are below investment grade ratings. Bonds backed by U.S. Government or agency securities are given an implied rating equal to the rating of such securities. Holdings designated Not Publicly Rated are not rated by these national rating agencies.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

PORTFOLIO COMPOSITION (% OF ASSETS*)

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*	The percentages shown above represent a percentage of the assets as of December 31, 2015.

COUNTRY COMPOSITION (% OF ASSETS**)

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**	Percentage of assets are expressed by market value excluding cash and accrued income, and may vary over time. The percentages shown above represent a percentage of the assets as of December 31, 2015.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

Investment Objective

The investment objective of the Babson Global Credit Income Opportunities Fund (“Global Credit Income Opportunities Fund” or the “Fund”) is to seek an absolute return, primarily through current income and secondarily through capital appreciation.

Portfolio Management Commentary

How did the Fund perform?

The Fund reported a net total rate of return for the semi-annual reporting period from July 1, 2015 through December 31, 2015, of -4.95% and underperformed the 3 Month USD LIBOR + 500 basis points¹ Benchmark, which retuned 2.72%²

What factors influenced performance of the Fund?

During the semi-annual reporting period, European assets were the main contributors to performance, while the U.S. assets, special situations and CLO’s were the main detractors.

The Energy sector was the largest detractor to contribution to return over the six month period. Continued volatility and pressure on the price of oil caused commodity-related issuers to face significant selling pressure over the period. The Fund was negatively impacted by its exposure to these credits. Six of the Fund’s bottom ten contributors to its underperformance were commodity-related issuers.

During the period, CLO’s also faced significant selling pressure and three of the Fund’s bottom ten contributors were CLO’s.

The Fund’s special situation credits had a negative impact on performance during the semi-annual reporting period; however, we believe these assets provide attractive current income to the portfolio and should contribute to the Fund’s performance in the future.

Describe recent portfolio activity.

The number of holdings in the portfolio decreased slightly during the second half of the year even though the Fund’s assets grew slightly. Despite the small decrease in the number of holdings, the Fund’s positioning across geographies remained fairly consistent and the Fund continues to maintain significant positions in high conviction credits while maintaining an average credit rating of single-B.

The Fund increased its exposure to global high yield bonds while reducing senior secured loans in order to focus on what we believe to be a more attractive part of the below-investment grade market from a risk-adjusted basis.

The Fund remains well diversified across industries with the largest concentration in CLO’s at 17.7% (a 1.0% increase from June 30, 2015), the next two largest industries are Healthcare, Education and Childcare at 6.5% and Chemicals, Plastics and Rubber at 5.7%. Over the past six months, the Fund’s top 3 industry exposures have shifted as the Fund reduced exposure to Oil & Gas (down 3.1%) and Telecom (down 4.5%) and increased exposure to Chemicals, Plastics and Rubber (up 2.0%).

Describe portfolio positioning at period end.

The Fund finished the semi-annual reporting period, December 31, 2015, with an allocation of 51.0%, 22.0%, and 17.7% to global high yield bonds, global senior secured loans and CLOs, respectively. The remainder of the portfolio was invested in a few opportunistic special situation credits at 1.0%, derivatives at 0.2%, equity 0.5% and cash at 7.4%. A significant portion of the portfolio (40.4%) is senior secured in nature, which can potentially mitigate principal loss in the event that default rates increase.

^1.	A unit that is equal to 1/100th of 1% or 0.01%.

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Total return describes the return to an investor based on the Class Y net expense ratio and includes the reinvestment of dividends and capital gains. Performance results reflect past performance and are no guarantee of future results. Current performance may be lower or higher than the performance data quoted. The net asset value (NAV) will fluctuate with market conditions. All returns 1-year or less are cumulative. The 3 Month USD LIBOR (London Interbank Offered Rate) is an average interest rate, determined by the British Bankers Association, that banks charge one another for the use of short-term money (3 months) in England’s Eurodollar market. The return shown includes 3 Month USD LIBOR plus 500 bps, or 5% per annum. LIBOR is unmanaged. It is not possible to invest directly in LIBOR. No assurance can be given that the Fund’s performance will exceed that of LIBOR by any given increment, or at all.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

From an industry perspective, the Fund remains well-diversified across a number of sectors based on Moody’s Industry Classification, with higher concentrations in CLOs (17.7%), Healthcare, Education and Childcare (6.5%) and Chemicals, Plastics and Rubber (5.7%) as of December 31, 2015.

As of December 31, 2015, the Fund had the following credit quality breakdown: 28.0% in Ba assets, 49.2% in single-B credits and a modest exposure to Caa and below at 11.7%. Approximately 3.6% of the Fund’s assets are not publicly rated. Over the course of the last six months, the single-B and Caa and below increased slightly as the Fund’s exposure to unrated, Ba and Baa rated assets decreased slightly.³

The Top 5 countries in the portfolio at the end of the semi-annual reporting period are the U.S. (66.6%), the United Kingdom (11.5%), Germany (5.9%), the Netherlands (4.2%) and France (2.1%). The U.S. exposure includes the Cayman Islands, which is related to the Fund’s CLO holdings that is predominantly invested in U.S. senior secured loans. Overall, the Fund has exposure to 17 different countries, and we continue to focus on building a well-diversified portfolio of global high yield securities.

Describe market and portfolio outlook.

As we look into 2016, the Energy and Commodity sectors will continue to remain volatile as a result of the supply and demand imbalance. This volatility should be primarily concentrated in the U.S., as the European high yield markets have minimal exposure to the Energy sector.

Despite a volatile reporting period, we believe issuer fundamentals outside of Energy and Commodity related sectors remain largely intact. With the exception of those troubled sectors, we expect high yield market default rates to remain below long-term averages, with Europe expecting to experience the fewest defaults; within Energy and Commodities, mostly in the U.S., however, we anticipate an increase in defaults in 2016.

Further divergence of Fed and ECB monetary policy will likely impact the global high yield markets to varying degrees in 2016.

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Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

PORTFOLIO COMPOSITION (% OF ASSETS*)

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*	The percentages shown above represent a percentage of the assets as of December 31, 2015.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

COUNTRY COMPOSITION (% OF ASSETS**)

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**	Percentage of assets are expressed by market value excluding cash and accrued income, and may vary over time. The percentages shown above represent a percentage of the assets as of December 31, 2015.

Babson Active Short Duration Fund 2015 Semi-Annual Report

Investment Objective

Babson Active Short Duration Bond Fund (“Active Short Duration Bond Fund” or the “Fund”) seeks to achieve a high total rate of return primarily from current income while minimizing fluctuations in capital values by investing primarily in a diversified portfolio of short-term investment grade fixed income securities.

Portfolio Management Commentary

How did the Fund perform?

The Fund was launched on July 8, 2015 and reported a net total rate of return for the reporting period through December 31, 2015 of -0.93%, underperforming the Barclays U.S. 1-3 Year Government Bond Index, which returned -0.24%.¹

What factors influenced performance of the Fund?

The Fund’s allocation to investment grade corporate, BB-rated high yield bonds and convertible securities were detractors to performance driven largely by the sell-off in Metals & Mining and Oil & Gas producers.

The Securitized sector positively impacted performance over the period. Specific allocations that contributed were U.S. agency MBS, CMBS, non-agency residential mortgage backed securities (RMBS) and consumer ABS. Student loan ABS, however, was a modest negative due to rating agency action within the sector.

Duration positioning positively contributed to performance. The front-end of the yield curve, particularly the two to three year area, flattened as the market priced in a lower probability of an extended series of Fed interest rate hikes. The Fund was at its maximum duration of approximately 2.9 years for much of the period, given the steepness of the yield curve.

Describe recent portfolio activity.

The Fund experienced positive flows during the period and purchases were across Corporate, Securitized and Government sectors.

The Fund reduced holdings in lower quality energy corporates and convertible securities that were believed to be downgrade candidates. Purchases were in Automotive, Banking, Consumer, Insurance and Real Estate Investment Trust (REIT) sectors. The Fund selectively added exposure to student loan ABS due to pricing dislocations. These securities are backed by the federal government and pricing has become attractive as a result of rating agency action. However, this did negatively impact recent performance.

Describe portfolio positioning at period end.

The Fund duration ended the period at 2.9 years, which is about the maximum for the strategy. The steepness of the yield curve between three months and three years led us to retain a maximum duration for the period.

From a sector perspective, the Fund has been well-diversified across Corporates, Securitized and Governments. The Corporate allocation represents approximately 37.5%, with 31% in investment grade corporates and 6% in BB-rated and crossover high yield. Banking represents the largest industry at almost 10% followed by Diversified Industrials (9%). The Fund had a 2.7% allocation to Energy and 0.2% in Convertible Securities.

Securitized ABS represents a 14.5% allocation, it was largely comprised of traditional automotive loan collateral and compelling esoteric collateral such as timeshares, cell towers, medical receivables, and personal consumer loans. CMBS made up 3.8% of the Fund.

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Total return describes the return to an investor based on the Class Y net expense ratio and includes the reinvestment of dividends and capital gains. Performance results reflect past performance and are no guarantee of future results. Current performance may be lower or higher than the performance data quoted. The net asset value (NAV) will fluctuate with market conditions. All returns 1-year or less are cumulative. The Barclays U.S. 1-3 Year Government Bond Index is comprised of the U.S. Treasury and U.S. Agency Indices. The U.S. Government Index includes Treasuries (public obligations of the U.S. Treasury) and U.S. agency debentures (publicly issued debt of U.S. Government agencies, quasi-federal corporations, and corporate or foreign debt guaranteed by the U.S. Government) that have remaining maturities of more than one year and up to but not including 3 years. Indices are unmanaged. It is not possible to invest directly in an index.

Babson Active Short Duration Fund 2015 Semi-Annual Report

The agency MBS allocation (5.7%) was in lower coupon 15 year FNMAs. The Fund also had a small allocation to agency collateralize mortgage obligations (CMO) with compelling structural features.

Describe market and portfolio outlook.

Volatility will likely persist in 2016, driven by global monetary policies, shifting global growth patterns and fluctuating commodity prices.

U.S. Government yields rose modestly in 2015. However, the case for significantly higher rates is challenging to make, with inflation low and real growth hobbling along at 2%-2.5%. The shape of the short-end of the yield curve bears watching, as there has been a significant flattening from three months to three years. Should this continue, the duration of the Fund may start to shorten.

Commodities will continue to necessitate close monitoring. The Fund is taking opportunities to reduce Energy and Metals & Mining exposure, as well as any other names that may possess idiosyncratic risks.

The recent bout of spread widening should provide the Fund select opportunities. Short weighted average life CLOs offer attractive yields and have experienced less volatility than other asset classes. FFELP student loans may represent one of the better opportunities in ABS.

Babson Active Short Duration Fund 2015 Semi-Annual Report

PORTFOLIO COMPOSITION (% OF ASSETS*)

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*	The percentages shown above represent a percentage of the assets as of December 31, 2015.

Babson Total Return Bond Fund 2015 Semi-Annual Report

Investment Objective

Babson Total Return Bond Fund (“Total Return Bond Fund” or the “Fund”) seeks a superior total rate of return by investing in fixed income instruments.

Portfolio Management Commentary

How did the Fund perform?

The Fund was launched on July 8, 2015 and reported a net total rate of return for the reporting period through December 31, 2015 of -0.78%, underperforming the Barclays U.S. Aggregate Bond Index, which returned 0.16%.¹

What factors influenced performance of the Fund?

An overweight to investment grade corporate credit and an allocation to convertible and high yield corporate securities were the primary detractors to performance. Within those allocations, exposures to commodity related industries were the main negative drivers. The Fund was positioned in shorter maturity names, however credit curves flattened with shorter maturity credits underperforming the most. Asset backed securities (ABS) were the primary detractor in the Securitized sector largely due to holdings in government guaranteed FFELP student loans which underperformed during the period.

USD/CNH and IGCDX put spread options performed well during the period due to multiple devaluations of the Chinese yuan.

Describe recent portfolio activity.

Corporate purchases were in Banking, Technology and Consumer sectors with only modest purchases in Energy.

The Fund selectively added exposure to ABS in such esoteric sectors as business franchise whole loans and personal consumer loans.

The agency mortgage backed securities ( MBS) allocation began transitioning into more liquid specified pools.

Purchased synthetic investment grade credit put options due to heightened volatility within the credit markets.

Recent purchases also include AAA-rated, short weighted average life CLO’s.

Describe portfolio positioning at period end.

The Fund was duration and curve neutral relative to the benchmark.

The largest overweight relative to the benchmark was corporate credit representing approximately a 41.7% allocation versus 30.0% for the index. High yield corporate made up 8.5% of that exposure. Banking and diversified industrials were the largest industries within corporate credit. The energy allocation represented about 3.1% of the Fund and was 0.5% overweight relative to the benchmark. The allocation to convertible securities was 0.4%.

The Fund was underweight in agency MBS (25.0%) relative to the benchmark (28.6%). More recently, the Fund rotated into specified mortgage pools becoming more balanced along the coupon stack, this change also enhanced the overall liquidity profile of the Fund.

Securitized ABS represents a 11.8% allocation, it was largely comprised of traditional automotive loan collateral and compelling esoteric collateral such as timeshares, cell towers, medical receivables, and personal consumer loans.

Commercial mortgage backed securities (CMBS) made up 6.0% of the Fund representing a 4.2% overweight. BBB-rated tranches backed by 2012 vintage collateral represent the best value. However, they are difficult to source given their strong underwriting profile. The Fund gained exposure to these vintages using CMBX, a synthetic index.

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Total return describes the return to an investor based on the Class Y net expense ratio and includes the reinvestment of dividends and capital gains. Performance results reflect past performance and are no guarantee of future results. Current performance may be lower or higher than the performance data quoted. The net asset value (NAV) will fluctuate with market conditions. All returns 1-year or less are cumulative. The Barclays U.S. Aggregate Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major sectors are subdivided into more specific indices that are calculated and reported on a regular basis. Indices are unmanaged. It is not possible to invest directly in an index.

Babson Total Return Bond Fund 2015 Semi-Annual Report

Describe market and portfolio outlook.

Volatility will likely persist in 2016, driven by global monetary policies, shifting global growth patterns and fluctuating commodity prices.

U.S. Government yields rose modestly in 2015. However, the case for significantly higher rates is challenging to make, with inflation low and real growth hobbling along at 2%-2.5%.

Babson Total Return Bond Fund 2015 Semi-Annual Report

PORTFOLIO COMPOSITION (% OF ASSETS*)

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*	The percentages shown above represent a percentage of the assests as of December 31, 2015

Babson Emerging Markets Debt Blended Total Return Fund 2015 Semi-Annual Report

Investment Objective

The investment objective of the Babson Emerging Markets Debt Blended Total Return (“EMD Blended Total Return “ or the “Fund”) is to seek a long-term total return through a combination of current income and capital appreciation though exposure to a diversified portfolio of emerging markets corporate, sovereign hard currency and local currency-denominated debt securities.

Portfolio Management Commentary

How did the Fund perform?

The Fund reported a net total rate of return of -3.32¹ since the Fund’s inception date of October 21, 2015.

What factors influenced performance of the Fund?

For the period ended December 31, 2015, the Fund’s currency positions against the Russian Ruble, British Pound, Canadian Dollar, and Singaporean Dollar, as well as an Ecuadorian sovereign bond were the primary contributors to performance. Corporate holdings in Yasar, ICICI Bank and Sino-Ocean Land Holdings also aided returns. Key detractors from performance were the Fund’s local bond positions in South Africa, Mexico and Colombia, while the Fund’s holding in Digicel Group also detracted from returns.

Emerging Markets local currency bonds experienced large sell-offs during December on the heels of the U.S. Fed’s rate hike, the ECB’s disappointing actions and a further sell-off of commodities. Within the portfolio, South Africa detracted more than 1% following President Zuma’s unexpected termination of finance minister Neve, while naming someone who was perceived to be a weak replacement. Following heavy criticism at home, President Zuma then named Pravin Gordhan as finance minister. Although Minister Gordhan previously held the position from 2009-2014, investors were less than impressed; impacting both rates and pushing the currency to its weakest point ever.

Describe recent portfolio activity.

The portfolio launched on October 21, 2015 with US$10 million, therefore, the activity in Fund primarily represents the initial investment of seed capital and some monthly adjustments as a result of our currency framework.

Describe portfolio positioning at period end.

The Fund finished the year with a 37% exposure to Emerging Markets Corporate bonds, 39% exposure to Emerging Markets Local Debt and Currencies, 23% exposure to Sovereign Hard Currency bonds and a 1% cash position.

The Top 5 countries in the portfolio at the end of the period are Mexico (10.6%), Indonesia (6.9%), South Africa (5.4%), Israel (4.7%) and Turkey (4.6%). The top 3 corporate bonds are AES Corp (3.7%), Israel Electric Corp (2.4%) and Cemex (2.2%). Overall, the Fund has exposure to 17 countries, 21 corporates, and 24 different currencies.

Describe market and portfolio outlook.

We remain optimistic that some Emerging Markets headwinds are poised to reverse and become tailwinds or at least stabilize

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Babson Emerging Markets Debt Blended Total Return Fund 2015 Semi-Annual Report

Credit selection will be key to seeking the best risk-adjusted return opportunities across the Emerging Market corporate debt spectrum.

Lower net supply, driven by reduced issuance and heightened buyback activity, will likely serve as a strong supportive technical factor for Emerging Market corporate debt. For Emerging Market Sovereigns, we continue to favor Central European countries, as well as Caribbean and Central American countries, which should continue to be beneficiaries of the pickup in growth out of core Europe and the U.S.

Currency valuations have adjusted significantly over the past 24 months and we are now seeing some Emerging Market currencies at their most attractive levels in more than 10 years, thereby providing for selective Emerging Market growth prospects.

The portfolio continues to be positioned in selective rates where inflation is falling along with narrowing current account deficits. A picture of global disinflation should remain favorable for emerging markets local debt and the Fund.

Babson Emerging Markets Debt Blended Total Return Fund 2015 Semi-Annual Report

PORTFOLIO COMPOSITION (% OF ASSETS*)

LOGO

*	The percentages shown above represent a percentage of the assets as of December 31, 2015.

COUNTRY COMPOSITION (% OF ASSETS**)

LOGO

**	Percentage of assets are expressed by market value excluding cash and accrued income, and may vary over time. The percentages shown above represent a percentage of the assets as of December 31, 2015.

Babson Emerging Markets Local Currency Debt Fund 2015 Semi-Annual Report

Investment Objective

The investment objective of the Babson Emerging Markets Local Currency Debt Fund (“EM Local Currency Debt Fund” or the “Fund”) is to seek a high level of current income. Preservation of capital is a secondary goal.

Portfolio Management Commentary

How did the Fund perform?

The Fund reported a net total rate of return of -1.59%¹ since the Fund’s inception date of December 8, 2015.

What factors influenced performance of the Fund?

For the period ended December 31, 2015, the Fund’s positions in Colombia, Indonesia, Malaysia and South Africa were the primary detractors from performance relative to the benchmark. The Fund’s underweight in Brazilian rates and overall underweight exposure to emerging markets currencies positively impacted Fund performance.

Colombia, Indonesia, Malaysia and South Africa all experienced large sell-offs during December and our overweight positions were more negatively affected than the benchmark. South Africa, in particular, underperformed due to President Zuma’s unexpected termination of finance minister Neve, while naming someone who was perceived to be a weak replacement. Following heavy criticism at home, President Zuma then named Pravin Gordhan as finance minister. Although Minister Gordhan previously held the position from 2009-2014, investors were less than impressed; impacting both rates and pushing the currency to its weakest point ever.

Describe recent portfolio activity.

The portfolio launched on December 8, 2015 with US$5 million, therefore, the trades reflected initial seed capital being invested.

Describe portfolio positioning at period end.

The Fund finished the year with a 92.1% exposure to Emerging Market bonds and a 7.5% cash position.

The Top 5 countries in the portfolio at the end of the period are Malaysia (12.8%), Indonesia (11.4%), Colombia (11.4%), Brazil (9.8%) and South Africa (7.2%). Overall, the Fund has exposure to 16 different countries and 28 different currencies.

Describe market and portfolio outlook.

We remain optimistic that some Emerging Markets headwinds are poised to reverse and become tailwinds or at least stabilize.

Currency valuations have adjusted significantly over the past 24 months and we are now seeing some emerging markets currencies at their most attractive levels in more than 10 years, thereby providing for selective emerging markets growth prospects.

The portfolio continues to add to constructive positioning on selected European and Latin American currencies, less so on Asian currencies, while maintaining a watchful eye on commodity prices.

^1.

Babson Emerging Markets Local Currency Debt Fund 2015 Semi-Annual Report

COUNTRY COMPOSITION (% OF ASSETS*)

LOGO

*	Percentage of assets are expressed by market value excluding cash and accrued income, and may vary over time. The percentages shown above represent a percentage of the assets as of December 31, 2015.

CONTRIBUTION TO DURATION (IN YEARS)

LOGO

**	The values shown above represent the contribution to duration, in years, of the assets as of December 31, 2015.

Babson Global High Yield Fund 2015 Semi-Annual Report

Investment Objective

The investment objective of the Babson Global High Yield Fund (“Global High Yield Fund” or the “Fund”) is to provide high current income generation and, where appropriate, capital appreciation.

Portfolio Management Commentary

How did the Fund perform?

The Fund reported a total rate of return of -2.40% since the Fund’s inception date of October 30, 2015.

What factors influenced performance of the Fund?

The initial ramping of the portfolio positively influenced the performance of the Fund during this period as a higher cash balance helped protect the portfolio from the volatility the U.S. and European high yield bond markets experienced at the end of the year.

In addition, strong security selection, particularly high quality credits with improving outlooks, and the Fund’s underweight to commodities relative to the market positively influenced performance.

Describe recent portfolio activity.

During the period, the Fund continued to ramp the initial capital funding by constructing a well-diversified portfolio across issuers, ratings, countries and industries. As of December 31, 2015, the portfolio had a geographical weighting of 69.5% in U.S. and 30.5% in primarily European issuers and other non-U.S. domiciled issuers.

Due to the initial ramping of the portfolio, approximately one-third of the assets were purchased in the U.S. and European new issue market and the remaining two-thirds were purchased on the secondary markets to take advantage of opportunities that we believe offer attractive yields and the potential for capital appreciation.

Describe portfolio positioning at period end.

On a traded basis, the Fund ended the year with a 24.6% weighting to senior secured high yield bonds and a 75.4% weighting to senior unsecured bonds.

From an industry perspective, the Fund remains well-diversified across a number of Moody’s-based industries, with higher concentrations in Healthcare, Education and Childcare (11.6%), Finance (8.2%), and Telecommunications (7.7%) as of year-end.

In terms of portfolio credit quality as of December 31, 2015, the Fund had the following weighting breakdown: 3.3% in Baa, 33.2% in Ba, 50.8% in single-B, 5.7% in Caa and below and 6.4% in cash and accrued income. A small portion of the assets are not publicly rated (0.6%), but we believe have a similar ratings profile as other assets in the portfolio.

Describe market and portfolio outlook.

Although the Fed’s December announcement of the first interest rate increase since 2006 marks the conclusion of one of the biggest question marks for the market, uncertainty remains around the potential consequences increased interest rate volatility may have on currencies, treasury yields, and risk assets going forward. While the extensive volatility we have seen in the commodity space will likely persist, we expect general corporate fundamentals to remain intact. This should continue to support high yield valuations in the near-term as we believe the market is now pricing in a higher level of defaults than we anticipated. Despite recent pressure, any further pull back in prices will likely provide opportunities to add to positions in “high conviction” names offering attractive relative value.

Babson Global High Yield Fund 2015 Semi-Annual Report

CREDIT QUALITY COMPOSITION (% OF ASSETS*)

LOGO

*	The percentages shown above represent a percentage of the assets as of December 31, 2015.

Babson Global High Yield Fund 2015 Semi-Annual Report

COUNTRY COMPOSITION (% OF ASSETS*)

LOGO

*	Percentage of assets are expressed by market value excluding cash and accrued income, and may vary over time. The percentages shown above represent a percentage of the assets as of December 31, 2015.

Babson U.S. High Yield Fund 2015 Semi-Annual Report

Investment Objective

The investment objective of the Babson U.S. High Yield Fund (“U.S. High Yield Fund” or the “Fund”) is to seek a high level of total return, with an emphasis on current income.

Portfolio Management Commentary

How did the Fund perform?

The Fund reported a total rate of return of -2.84% since the Fund’s inception date of October 30, 2015.

What factors influenced performance of the Fund?

The initial ramping of the portfolio positively influenced the performance of the Fund during this period as a higher cash balance helped protect the portfolio from the volatility the U.S. high yield bond market experienced at the end of the year.

Describe recent portfolio activity.

During the period, the Fund continued to ramp the initial capital funding by constructing a well-diversified portfolio across issuers, ratings and industries.

Due to the initial ramping of the portfolio, approximately one-third of the assets were purchased in the U.S. new issue market and the remaining two-thirds were purchased on the secondary market to take advantage of opportunities that we believe offer attractive yields and the potential for capital appreciation.

Describe portfolio positioning at period end.

On a traded basis, the Fund ended the year with a 99.6% weighting to high yield bonds. The remaining balance of the portfolio was invested in senior secured loans (0.4%).

From an industry perspective, the Fund remains well-diversified across a number of Moody’s-based industries, with higher concentrations in Healthcare, Education and Childcare (12.8%), Oil and Gas (7.8%), and Aerospace and Defense (7.1%) as of year-end.

In terms of portfolio credit quality as of December 31, 2015, the Fund had the following weighting breakdown: 3.0% in Baa, 34.5% in Ba, 40.9% in single-B, 5.6% in Caa and below and cash and accrued income at 16.0%.

Describe market and portfolio outlook.

Although the Fed’s December announcement of the first interest rate increase since 2006 marks the conclusion of one of the biggest question marks for the market, uncertainty remains around the potential consequences increased interest rate volatility may have on currencies, treasury yields, and risk assets going forward. While the extensive volatility we have seen in the commodity space will likely persist, we expect general corporate fundamentals to remain intact. This should continue to support high yield valuations in the near-term as we believe the market is now pricing in a higher level of defaults than we anticipated. Despite recent pressure, any further pull back in prices will likely provide opportunities to add to positions in high conviction names offering attractive relative value.

Babson U.S. High Yield Fund 2015 Semi-Annual Report

CREDIT QUALITY COMPOSITION (% OF ASSETS*)

LOGO

*	The percentages shown above represent a percentage of the assets as of December 31, 2015.

COUNTRY COMPOSITION (% OF ASSETS*)

LOGO

*	Percentage of assets are expressed by market value excluding cash and accrued income, and may vary over time. The percentages shown above represent a percentage of the assets as of December 31, 2015.

Babson Capital Funds Trust 2015 Semi-Annual Report

SHAREHOLDER EXPENSES (UNAUDITED)

As a shareholder of Babson Global Floating Rate Fund, Babson Global Credit Income Opportunities Fund, Babson Active Short Duration Bond Fund, Babson Total Return Bond Fund, Babson Emerging Markets Debt Blended Total Return Fund, Babson Emerging Markets Local Currency Debt Fund, Babson Global High Yield Fund or Babson U.S. High Yield Fund (each a “Fund” and collectively, the “Funds”) you incur ongoing expenses, such as management fees, shareholder service fees, distribution fees and other fund expenses. The following table is intended to help you understand your ongoing expenses (in dollars and cents) of investing in the Funds and to compare these expenses with the ongoing expenses of investing in other funds.

The table is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2015 to December 31, 2015.

Actual Expenses

The first line in the table below provides information about the 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 for the Fund under the heading entitled “Operating Expenses Incurred” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line in the table below provides information about the hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account value 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 your Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Babson Global Floating Rate Fund


	EXPENSE RATIO			BEGINNING AMOUNT		ENDING VALUE		AVERAGE VALUE		OPERATING EXPENSE INCURRED*
Class A
Actual		1.05	%	$	1,000.00	$	963.60	$	981.80	$	5.18
Hypothetical		1.05	%		1,000.00		1,019.90		1,009.95		5.33

Class C
Actual		1.80	%		1,000.00		959.80		979.90		8.87
Hypothetical		1.80	%		1,000.00		1,016.10		1,008.05		9.12

Class I
Actual		0.75	%		1,000.00		965.00		982.50		3.70
Hypothetical		0.75	%		1,000.00		1,021.40		1,010.70		3.81

Class Y
Actual		0.75	%		1,000.00		964.70		982.35		3.70
Hypothetical		0.75	%		1,000.00		1,021.40		1,010.70		3.81

*	For each Class of the Fund, net expenses are equal to the annualized expense ratio net of any expenses waived or reimbursed by the advisor for such class multiplied by the average account value over the period, multiplied by 184/366.

Babson Capital Funds Trust 2015 Semi-Annual Report

SHAREHOLDER EXPENSES (UNAUDITED) (CONTINUED)

Babson Global Credit Income Opportunities Fund


	EXPENSE RATIO			BEGINNING AMOUNT		ENDING VALUE		AVERAGE VALUE		OPERATING EXPENSE INCURRED*
Class A
Actual		1.20	%	$	1,000.00	$	949.50	$	974.75	$	5.88
Hypothetical		1.20	%		1,000.00		1,019.10		1,009.55		6.09

Class C
Actual		1.95	%		1,000.00		945.90		972.95		9.54
Hypothetical		1.95	%		1,000.00		1,015.30		1,007.65		9.88

Class I
Actual		0.95	%		1,000.00		950.60		975.30		4.66
Hypothetical		0.95	%		1,000.00		1,020.40		1,010.20		4.82

Class Y
Actual		0.95	%		1,000.00		950.50		975.25		4.66
Hypothetical		0.95	%		1,000.00		1,020.40		1,010.20		4.82

*	For each Class of the Fund, net expenses are equal to the annualized expense ratio net of any expenses waived or reimbursed by the advisor for such class multiplied by the average account value over the period, multiplied by 184/366.

Babson Active Short Duration Bond Fund


	EXPENSE RATIO			BEGINNING AMOUNT		ENDING VALUE		AVERAGE VALUE		OPERATING EXPENSE INCURRED*
Class A
Actual		0.66	%	$	1,000.00	$	990.00	$	995.00	$	3.16
Hypothetical		0.66	%		1,000.00		1,020.90		1,010.45		3.21

Class C
Actual		1.44	%		1,000.00		986.10		993.05		6.88
Hypothetical		1.44	%		1,000.00		1,017.10		1,008.55		6.98

Class I
Actual		0.47	%		1,000.00		990.80		995.40		2.25
Hypothetical		0.47	%		1,000.00		1,021.80		1,010.90		2.28

Class Y
Actual		0.45	%		1,000.00		990.70		995.35		2.15
Hypothetical		0.45	%		1,000.00		1,021.90		1,010.95		2.19

*	For each Class of the Fund, net expenses are equal to the annualized expense ratio net of any expenses waived or reimbursed by the advisor for such class multiplied by the average account value over the period, multiplied by 176/366.

Expense Changes Impacting the Table

Changes to the Fund’s fee arrangements occurred during the period. Had these fee changes been in effect throughout the entire period, the annualized expense ratios would have been 0.65%, 1.40%, 0.40%, and 0.40% for Classes A, C, I, and Y, respectively; the actual expenses paid during the period would have been approximately $3.11, $6.69, $1.91, and $1.91 and the hypothetical expenses paid during the period would have been approximately $3.16, $6.79, $1.94, and $1.94 for Classes A, C, I, and Y, respectively.

Babson Capital Funds Trust 2015 Semi-Annual Report

SHAREHOLDER EXPENSES (UNAUDITED) (CONTINUED)

Babson Total Return Bond Fund


	EXPENSE RATIO			BEGINNING AMOUNT		ENDING VALUE		AVERAGE VALUE		OPERATING EXPENSE INCURRED*
Class A
Actual		0.80	%	$	1,000.00	$	991.00	$	995.50	$	3.83
Hypothetical		0.80	%		1,000.00		1,020.20		1,010.10		3.89

Class C
Actual		1.55	%		1,000.00		987.50		993.75		7.41
Hypothetical		1.55	%		1,000.00		1,016.60		1,008.30		7.52

Class I
Actual		0.55	%		1,000.00		992.20		996.10		2.63
Hypothetical		0.55	%		1,000.00		1,021.40		1,010.70		2.67

Class Y
Actual		0.55	%		1,000.00		992.20		996.10		2.63
Hypothetical		0.55	%		1,000.00		1,021.40		1,010.70		2.67

*	For each Class of the Fund, net expenses are equal to the annualized expense ratio net of any expenses waived or reimbursed by the advisor for such class multiplied by the average account value over the period, multiplied by 176/366.

Babson Emerging Markets Debt Blended Total Return Fund


	EXPENSE RATIO			BEGINNING AMOUNT		ENDING VALUE		AVERAGE VALUE		OPERATING EXPENSE INCURRED*
Class A
Actual		1.20	%	$	1,000.00	$	965.30	$	982.65	$	2.29
Hypothetical		1.20	%		1,000.00		1,007.40		1,003.70		2.34

Class C
Actual		1.95	%		1,000.00		964.00		982.00		3.71
Hypothetical		1.95	%		1,000.00		1,005.90		1,002.95		3.79

Class I
Actual		0.95	%		1,000.00		965.80		982.90		1.81
Hypothetical		0.95	%		1,000.00		1,007.90		1,003.95		1.85

Class Y
Actual		0.95	%		1,000.00		965.80		982.90		1.81
Hypothetical		0.95	%		1,000.00		1,007.90		1,003.95		1.85

*	For each Class of the Fund, net expenses are equal to the annualized expense ratio net of any expenses waived or reimbursed by the advisor for such class multiplied by the average account value over the period, multiplied by 71/366.

Babson Capital Funds Trust 2015 Semi-Annual Report

SHAREHOLDER EXPENSES (UNAUDITED) (CONTINUED)

Babson Emerging Markets Local Currency Debt Fund


	EXPENSE RATIO			BEGINNING AMOUNT		ENDING VALUE		AVERAGE VALUE		OPERATING EXPENSE INCURRED*
Class A
Actual		1.20	%	$	1,000.00	$	971.90	$	985.95	$	0.74
Hypothetical		1.20	%		1,000.00		1,002.40		1,001.20		0.76

Class C
Actual		1.95	%		1,000.00		971.60		985.80		1.21
Hypothetical		1.95	%		1,000.00		1,001.90		1,000.95		1.23

Class I
Actual		0.95	%		1,000.00		972.00		986.00		0.59
Hypothetical		0.95	%		1,000.00		1,002.50		1,001.25		0.60

Class Y
Actual		0.95	%		1,000.00		972.00		986.00		0.59
Hypothetical		0.95	%		1,000.00		1,002.50		1,001.25		0.60

*	For each Class of the Fund, net expenses are equal to the annualized expense ratio net of any expenses waived or reimbursed by the advisor for such class multiplied by the average account value over the period, multiplied by 23/366.

Babson Global High Yield Fund


	EXPENSE RATIO			BEGINNING AMOUNT		ENDING VALUE		AVERAGE VALUE		OPERATING EXPENSE INCURRED*
Class A
Actual		1.05	%	$	1,000.00	$	975.60	$	987.80	$	1.70
Hypothetical		1.05	%		1,000.00		1,006.50		1,003.25		1.73

Class C
Actual		1.80	%		1,000.00		974.50		987.25		2.91
Hypothetical		1.80	%		1,000.00		1,005.20		1,002.60		2.96

Class I
Actual		0.80	%		1,000.00		976.00		988.00		1.30
Hypothetical		0.80	%		1,000.00		1,006.90		1,003.45		1.32

Class Y
Actual		0.80	%		1,000.00		976.00		988.00		1.30
Hypothetical		0.80	%		1,000.00		1,006.90		1,003.45		1.32

*	For each Class of the Fund, net expenses are equal to the annualized expense ratio net of any expenses waived or reimbursed by the advisor for such class multiplied by the average account value over the period, multiplied by 60/366.

Babson Capital Funds Trust 2015 Semi-Annual Report

SHAREHOLDER EXPENSES (UNAUDITED) (CONTINUED)

Babson U.S. High Yield Fund


	EXPENSE RATIO			BEGINNING AMOUNT		ENDING VALUE		AVERAGE VALUE		OPERATING EXPENSE INCURRED*
Class A
Actual		1.00	%	$	1,000.00	$	971.20	$	985.60	$	1.62
Hypothetical		1.00	%		1,000.00		1,006.60		1,003.30		1.64

Class C
Actual		1.75	%		1,000.00		970.10		985.05		2.83
Hypothetical		1.75	%		1,000.00		1,005.30		1,002.65		2.88

Class I
Actual		0.75	%		1,000.00		971.60		985.80		1.21
Hypothetical		0.75	%		1,000.00		1,007.00		1,003.50		1.23

Class Y
Actual		0.75	%		1,000.00		971.60		985.80		1.21
Hypothetical		0.75	%		1,000.00		1,007.00		1,003.50		1.23

*	For each Class of the Fund, net expenses are equal to the annualized expense ratio net of any expenses waived or reimbursed by the advisor for such class multiplied by the average account value over the period, multiplied by 60/366.

Babson Capital Funds Trust 2015 Semi-Annual Report

BABSON CAPITAL FUNDS TRUST

FINANCIAL REPORT


Statement of Assets and Liabilities		31

Statement of Operations		35

Statements of Changes in Net Assets		39

Financial Highlights		43

Schedule of Investments		75-140

Notes to Financial Statements		141-181

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF ASSETS AND LIABILITIES

December 31, 2015 (Unaudited)


	BABSON GLOBAL FLOATING RATE FUND		BABSON GLOBAL CREDIT INCOME OPPORTUNITIES FUND		BABSON ACTIVE SHORT DURATION BOND FUND		BABSON TOTAL RETURN BOND FUND

Assets
Investments, at fair value (cost $172,954,252, $93,332,587, $99,872,848 and $30,208,344, respectively)	$	158,958,569	$	82,456,570	$	99,041,894	$	29,941,778
Foreign currency, at value (cost $635,089, $55,476, $0 and $0, respectively)		629,529		54,798		–		–
Receivable for investments sold		4,331,635		719,129		2,356,969		–
Receivable for Fund shares sold		84,756		1,590,937		136,766		–
Interest receivable		1,036,593		1,291,268		471,333		136,076
Receivable from adviser (see Note 3)		–		–		10,584		28,884
Receivable for variation margin on open futures contracts		–		–		3,407		3,697
Foreign tax reclaims receivable		–		–		2,139		–
Unrealized appreciation on forward foreign currency exchange contracts		394,403		197,214		–		4,766
Prepaid expenses		37,666		37,256		12,638		10,617

Total assets		165,473,151		86,347,172		102,035,730		30,125,818


Liabilities
Payable for investments purchased		9,948,630		2,124,412		10,729,984		5,207,799
Payable for Fund shares repurchased		265,933		1,033,040		212,407		–
Swap contracts, at fair value (up-front net premiums received of $0, $0, $562 and $147, respectively)		–		–		7,229		1,885
Investment advisory fee payable (see Note 3)		16,802		4,870		–		–
Distribution fees payable		6,773		5,439		2,452		209
Dividends payable		328,329		600,819		66,092		185,135
Written options, at fair value (premiums of $972,000)		–		207,921		–		–
Unrealized depreciation on forward foreign currency exchange contracts		11,957		8,461		–		12,870
Accrued expenses and other liabilities		263,531		216,824		179,476		183,361

Total liabilities		10,841,955		4,201,786		11,197,640		5,591,259

Total net assets	$	154,631,196	$	82,145,386	$	90,838,090	$	24,534,559

See accompanying Notes to Financial Statements.

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)

December 31, 2015 (Unaudited)


	BABSON GLOBAL FLOATING RATE FUND			BABSON GLOBAL CREDIT INCOME OPPORTUNITIES FUND			BABSON ACTIVE SHORT DURATION BOND FUND			BABSON TOTAL RETURN BOND FUND

Composition of net assets
Shares of beneficial interest outstanding (par value $0.00001 per share), unlimited number of shares authorized	$	171		$	94		$	92		$	25
Additional paid-in capital		170,715,425			94,602,432			91,904,125			25,131,900
Undistributed (distributions in excess of) net investment income		85,033			337,961			(3,130	)		(1,352	)
Accumulated net realized loss		(2,591,436	)		(2,891,685	)		(161,348	)		(311,100	)
Net unrealized depreciation		(13,577,997	)		(9,903,416	)		(901,649	)		(284,914	)

Total net assets	$	154,631,196		$	82,145,386		$	90,838,090		$	24,534,559


Class A
Net assets applicable to outstanding shares	$	5,578,247		$	11,924,553		$	10,518,584		$	196,032

Shares of beneficial interest outstanding		618,563			1,368,677			1,069,223			20,082

Net asset value per share outstanding	$	9.02		$	8.71		$	9.84		$	9.76

Maximum offering price per share outstanding (Net asset value plus sales charge of 3.00%, 4.00%, 0.00% and 4.00%, respectively)	$	9.30		$	9.07		$	–		$	10.17


Class C
Net assets applicable to outstanding shares	$	6,597,783		$	3,302,315		$	340,667		$	195,825

Shares of beneficial interest outstanding		734,085			379,418			34,649			20,061

Net asset value per share outstanding	$	8.99		$	8.70		$	9.83		$	9.76


Class I
Net assets applicable to outstanding shares	$	22,130,131		$	24,445,056		$	21,968,595		$	12,060,376

Shares of beneficial interest outstanding		2,449,029			2,806,051			2,234,436			1,235,482

Net asset value per share outstanding	$	9.04		$	8.71		$	9.83		$	9.76


Class Y
Net assets applicable to outstanding shares	$	120,325,035		$	42,473,462		$	58,010,244		$	12,082,326

Shares of beneficial interest outstanding		13,320,246			4,875,730			5,900,387			1,237,731

Net asset value per share outstanding	$	9.03		$	8.71		$	9.83		$	9.76

See accompanying Notes to Financial Statements.

��

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)

December 31, 2015 (Unaudited)


	BABSON EMERGING MARKETS DEBT BLENDED TOTAL RETURN FUND			BABSON EMERGING MARKETS LOCAL CURRENCY DEBT FUND			BABSON GLOBAL HIGH YIELD FUND			BABSON U.S. HIGH YIELD FUND

Assets
Investments, at fair value (cost $9,935,402, $4,928,972, $24,902,440 and $26,953,697, respectively)	$	9,521,067		$	4,828,638		$	23,969,550		$	26,020,071
Foreign currency, at value (cost $0, $0, $17,809 and $0, respectively)		–			–			17,362			–
Interest receivable		151,312			75,510			405,837			359,358
Receivable from adviser (see Note 3)		36,071			35,259			26,852			27,615
Receivable for variation margin on open futures contracts		7,524			–			–			–
Swap contracts, at fair value		10,877			7,952			–			–
Foreign tax reclaims receivable		–			383			–			–
Unrealized appreciation on forward foreign currency exchange contracts		130,248			24,387			61,325			–
Prepaid expenses		1,059			50			1,059			1,059

Total assets		9,858,158			4,972,179			24,481,985			26,408,103


Liabilities
Swap contracts, at fair value (up-front net premiums received of $9,276, $0, $0 and $0, respectively)		7,281			29,065			–			–
Directors’ fees payable		6,144			2,524			4,958			4,958
Distribution fees payable		204			77			103			103
Dividends payable		45,780			12,275			118,898			121,847
Unrealized depreciation on forward foreign currency exchange contracts		146,056			47,969			68,199			–
Accrued expenses and other liabilities		89,724			32,383			74,515			74,513

Total liabilities		295,189			124,293			266,673			201,421

Total net assets	$	9,562,969		$	4,847,886		$	24,215,312		$	26,206,682


Composition of net assets
Shares of beneficial interest outstanding (par value $0.00001 per share), unlimited number of shares authorized	$	10		$	5		$	25		$	27
Additional paid-in capital		10,003,090			4,999,995			25,007,488			27,102,498
Undistributed (distributions in excess of) net investment income		(1,110	)		–			–			–
Accumulated net realized gain (loss)		(20,407	)		(6,794	)		149,372			37,783
Net unrealized depreciation		(418,614	)		(145,320	)		(941,573	)		(933,626	)

Total net assets	$	9,562,969		$	4,847,886		$	24,215,312		$	26,206,682

See accompanying Notes to Financial Statements.

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)

December 31, 2015 (Unaudited)


	BABSON EMERGING MARKETS DEBT BLENDED TOTAL RETURN FUND		BABSON EMERGING MARKETS LOCAL CURRENCY DEBT FUND		BABSON GLOBAL HIGH YIELD FUND		BABSON U.S. HIGH YIELD FUND

Class A
Net assets applicable to outstanding shares	$	191,258	$	96,958	$	96,831	$	96,397

Shares of beneficial interest outstanding		20,006		10,000		10,000		10,000

Net asset value per share outstanding	$	9.56	$	9.70	$	9.68	$	9.64

Maximum offering price per share outstanding (Net asset value plus sales charge of 4.00%)	$	9.96	$	10.10	$	10.08	$	10.04


Class C
Net assets applicable to outstanding shares	$	191,254	$	96,958	$	96,831	$	96,397

Shares of beneficial interest outstanding		20,006		10,000		10,000		10,000

Net asset value per share outstanding	$	9.56	$	9.70	$	9.68	$	9.64


Class I
Net assets applicable to outstanding shares	$	4,590,229	$	2,326,985	$	12,007,048	$	14,060,706

Shares of beneficial interest outstanding		480,156		240,000		1,240,000		1,458,557

Net asset value per share outstanding	$	9.56	$	9.70	$	9.68	$	9.64


Class Y
Net assets applicable to outstanding shares	$	4,590,228	$	2,326,985	$	12,014,602	$	11,953,182

Shares of beneficial interest outstanding		480,156		240,000		1,240,780		1,240,000

Net asset value per share outstanding	$	9.56	$	9.70	$	9.68	$	9.64

See accompanying Notes to Financial Statements.

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF OPERATIONS

For the Six Months Ended December 31, 2015 (Unaudited)


	BABSON GLOBAL FLOATING RATE FUND			BABSON GLOBAL CREDIT INCOME OPPORTUNITIES FUND			BABSON ACTIVE SHORT DURATION BOND FUND ⁽¹⁾			BABSON TOTAL RETURN BOND FUND ⁽¹⁾

Investment Income
Interest income	$	4,511,456		$	3,023,582		$	584,971		$	272,670
Dividends		–			–			3,309			145,912
Other income		5,515			–			–			–

Total investment income		4,516,971			3,023,582			588,280			418,582


Operating Expenses
Advisory fees		527,713			320,968			101,599			47,892
12b-1 distribution and servicing plan
Class A		7,135			15,851			4,455			239
Class C		30,529			17,486			1,333			957
Administrator fees		89,601			53,814			46,089			46,089
Custody fees		77,173			50,585			38,715			38,715
Professional fees		70,653			70,653			58,512			58,511
Transfer agent fees		70,168			70,379			45,229			45,229
Directors’ fees		51,954			42,932			14,749			14,749
Registration fees		32,593			30,892			4,140			2,796
Printing and mailing expenses		22,256			20,913			7,374			7,374
Interest expense		–			–			17			6
Other operating expenses		27,077			16,467			14,749			14,749

Total operating expenses		1,006,852			710,940			336,961			277,306
Reimbursement of expenses
Class A		(24,028	)		(48,582	)		(18,868	)		(12,626	)
Class C		(25,422	)		(24,181	)		(12,077	)		(12,625	)
Class I		(56,600	)		(75,726	)		(72,856	)		(92,478	)
Class Y		(251,285	)		(122,555	)		(95,436	)		(92,524	)

Net operating expenses		649,517			439,896			137,724			67,053

Net investment income		3,867,454			2,583,686			450,556			351,529

See accompanying Notes to Financial Statements.

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF OPERATIONS (CONTINUED)

For the Six Months Ended December 31, 2015 (Unaudited)


	BABSON GLOBAL FLOATING RATE FUND			BABSON GLOBAL CREDIT INCOME OPPORTUNITIES FUND			BABSON ACTIVE SHORT DURATION BOND FUND ⁽¹⁾			BABSON TOTAL RETURN BOND FUND ⁽¹⁾

Realized and Unrealized Gains (Losses) on Investments
Net realized loss on investments	$	(2,330,721	)	$	(1,468,733	)	$	(84,163	)	$	(241,991	)
Net realized gain on forward foreign currency exchange contracts		670,025			439,379			–			–
Net realized gain on foreign currency and translation		305,264			261,643			–			–
Net realized gain on futures contracts		–			–			(80,683	)		(19,608	)
Net realized gain on swap contracts		–			–			3,498			913
Net realized gain (loss) on written options		–			(34,180	)		–			–

Net realized loss		(1,355,432	)		(801,891	)		(161,348	)		(260,686	)

Net change in unrealized depreciation on investments		(9,162,252	)		(7,103,347	)		(830,954	)		(266,566	)
Net change in unrealized appreciation on unfunded loan commitments		4,592			4,592			–			–
Net change in unrealized appreciation (depreciation) on forward foreign currency exchange contracts		752,516			332,385			–			(8,104	)
Net change in unrealized appreciation (depreciation) on foreign currency and translation		(68,670	)		(50,178	)		–			–
Net change in unrealized appreciation on futures contracts		–			–			(62,904	)		(8,212	)
Net change in unrealized appreciation on swap contracts		–			–			(7,791	)		(2,032	)
Net change in unrealized appreciation on written option contracts		–			701,556			–			–

Net change in unrealized depreciation		(8,473,814	)		(6,114,992	)		(901,649	)		(284,914	)

Net realized and unrealized losses on investments		(9,829,246	)		(6,916,883	)		(1,062,997	)		(545,600	)

Net decrease in net assets resulting from operations	$	(5,961,792	)	$	(4,333,197	)	$	(612,441	)	$	(194,071	)

(1)

Fund commenced operations on July 8, 2015.

See accompanying Notes to Financial Statements.

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF OPERATIONS (CONTINUED)

For the Six Months Ended December 31, 2015 (Unaudited)


	BABSON EMERGING MARKETS DEBT BLENDED TOTAL RETURN FUND ⁽¹⁾			BABSON EMERGING MARKETS LOCAL CURRENCY DEBT FUND ⁽³⁾			BABSON GLOBAL HIGH YIELD FUND ⁽²⁾			BABSON U.S. HIGH YIELD FUND ⁽²⁾

Investment Income
Interest income (net of withholding tax of $2,704, $4,388, $0 and $0, respectively)	$	110,152		$	12,275		$	224,294		$	223,202

Total investment income		110,152			12,275			224,294			223,202


Operating Expenses
Advisory fees		14,214			2,302			24,192			22,359
12b-1 distribution and servicing plan
Class A		95			15			41			40
Class C		379			61			161			161
Administrator fees		19,201			6,136			15,496			15,496
Custody fees		16,128			5,154			13,016			13,016
Professional fees		29,492			11,369			25,950			25,950
Transfer agent fees		18,843			6,021			15,206			15,206
Directors’ fees		6,144			2,524			4,958			4,958
Registration fees		275			57			624			624
Printing and mailing expenses		4,096			1,683			3,719			3,719
Other operating expenses		6,144			1,964			4,958			4,958

Total operating expenses		115,011			37,286			108,321			106,487
Reimbursement of expenses
Class A		(6,308	)		(2,144	)		(4,053	)		(4,050	)
Class C		(6,324	)		(2,190	)		(4,059	)		(4,056	)
Class I		(42,918	)		(16,476	)		(34,689	)		(34,931	)
Class Y		(42,918	)		(16,476	)		(34,693	)		(34,288	)

Net operating expenses		16,543			–			30,827			29,162

Net investment income		93,609			12,275			193,467			194,040

See accompanying Notes to Financial Statements.

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF OPERATIONS (CONTINUED)

For the Six Months Ended December 31, 2015 (Unaudited)


	BABSON EMERGING MARKETS DEBT BLENDED TOTAL RETURN FUND ⁽¹⁾			BABSON EMERGING MARKETS LOCAL CURRENCY DEBT FUND ⁽³⁾			BABSON GLOBAL HIGH YIELD FUND ⁽²⁾			BABSON U.S. HIGH YIELD FUND ⁽²⁾

Realized and Unrealized Gains (Losses) on Investments
Net realized gain (loss) on investments	$	(2,552	)	$	–		$	41,392		$	37,783
Net realized gain (loss) on forward foreign currency exchange contracts		(5,772	)		(11,053	)		81,280			–
Net realized gain (loss) on foreign currency and translation		(13,644	)		4,259			26,700			–
Net realized gain on futures contracts		3,818			–			–			–
Net realized gain on swap contracts		843			–			–			–

Net realized gain (loss)		(17,307	)		(6,794	)		149,372			37,783

Net change in unrealized depreciation on investments		(414,335	)		(100,334	)		(932,890	)		(933,626	)
Net change in unrealized appreciation (depreciation) on forward foreign currency exchange contracts		(15,808	)		(23,582	)		(6,874	)		–
Net change in unrealized appreciation (depreciation) on foreign currency and translation		(2,363	)		(291	)		(1,809	)		–
Net change in unrealized appreciation on futures contracts		1,022			–			–			–
Net change in unrealized appreciation on swap contracts		12,870			(21,113	)		–			–

Net change in unrealized depreciation		(418,614	)		(145,320	)		(941,573	)		(933,626	)

Net realized and unrealized losses on investments		(435,921	)		(152,114	)		(792,201	)		(895,843	)

Net decrease in net assets resulting from operations	$	(342,312	)	$	(139,839	)	$	(598,734	)	$	(701,803	)

(1)

Fund commenced operations on October 21, 2015.

(2)

Fund commenced operations on October 30, 2015.

(3)

Fund commenced operations on December 8, 2015.

See accompanying Notes to Financial Statements.

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF CHANGES IN NET ASSETS

(Unaudited)


	BABSON GLOBAL FLOATING RATE FUND						BABSON GLOBAL CREDIT INCOME OPPORTUNITIES FUND
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015			FOR THE YEAR ENDED JUNE 30, 2015			FOR THE SIX MONTHS ENDED DECEMBER 31, 2015			FOR THE YEAR ENDED JUNE 30, 2015

Operations
Net investment income	$	3,867,454		$	5,541,218		$	2,583,686		$	4,332,948
Net realized gain (loss) on investments		(1,355,432	)		1,558,409			(801,891	)		451,988
Net change in unrealized depreciation on investments		(8,473,814	)		(5,820,218	)		(6,114,992	)		(4,970,881	)

Net increase (decrease) in net assets from operations		(5,961,792	)		1,279,409			(4,333,197	)		(185,945	)


Dividends to Common Shareholders
Net investment income
Class A		(138,924	)		(805,770	)		(443,669	)		(1,114,861	)

Class C		(127,786	)		(199,251	)		(108,721	)		(136,768	)

Class I		(607,056	)		(2,251,195	)		(941,918	)		(2,110,134	)

Class Y		(3,294,114	)		(4,937,396	)		(1,584,258	)		(2,778,042	)

Net realized gain
Class A		–			(11,345	)		–			(186,020	)

Class C		–			(2,779	)		–			(25,871	)

Class I		–			(27,574	)		–			(340,131	)

Class Y		–			(49,009	)		–			(416,997	)

Total dividends to common shareholders		(4,167,880	)		(8,284,319	)		(3,078,566	)		(7,108,824	)


Capital Share Transactions
Net proceeds from sale of shares		37,680,828			103,090,790			15,826,739			42,681,717
Net Asset Value of shares issued to shareholders in payment of distributions declared		3,122,607			8,079,411			1,604,629			6,926,691
Cost of shares redeemed		(42,201,704	)		(52,643,055	)		(9,606,848	)		(24,420,068	)
Redemption fees		–			5,459			–			13,600

Net increase (decrease) in net assets resulting from capital stock transactions		(1,398,269	)		58,532,605			7,824,520			25,201,940

Total increase (decrease) in net assets		(11,527,941	)		51,527,695			412,757			17,907,171


Net Assets
Beginning of period		166,159,137			114,631,442			81,732,629			63,825,458

End of period (includes undistributed net investment income of $85,033, $385,459, $337,961 and $832,841, respectively)	$	154,631,196		$	166,159,137		$	82,145,386		$	81,732,629

See accompanying Notes to Financial Statements.

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

(Unaudited)


	BABSON ACTIVE SHORT DURATION BOND FUND			BABSON TOTAL RETURN BOND FUND
	PERIOD FROM JULY 9, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾			PERIOD FROM JULY 9, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾

Operations
Net investment income	$	450,556		$	351,529
Net realized loss on investments		(161,348	)		(260,686	)
Net change in unrealized depreciation on investments		(901,649	)		(284,914	)

Net decrease in net assets from operations		(612,441	)		(194,071	)


Dividends to Common Shareholders
Net investment income
Class A		(23,708	)		(2,591	)

Class C		(841	)		(1,871	)

Class I		(169,787	)		(174,113	)

Class Y		(259,350	)		(174,306	)

Net realized gain
Class A		–			(403	)

Class C		–			(402	)

Class I		–			(24,782	)

Class Y		–			(24,827	)

Total dividends to common shareholders		(453,686	)		(403,295	)


Capital Share Transactions
Net proceeds from sale of shares		93,882,507			25,022,092
Net Asset Value of shares issued to shareholders in payment of distributions declared		191,035			109,833
Cost of shares redeemed		(2,169,325	)		–

Net increase in net assets resulting from capital stock transactions		91,904,217			25,131,925

Total increase in net assets		90,838,090			24,534,559


Net Assets
Beginning of period		–			–

End of period (includes undistributed net investment income of $(3,130) and $(1,352), respectively)	$	90,838,090		$	24,534,559

(1)

Fund commenced operations on July 8, 2015.

See accompanying Notes to Financial Statements.

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

(Unaudited)


	BABSON EMERGING MARKETS DEBT BLENDED TOTAL RETURN FUND			BABSON EMERGING MARKETS LOCAL CURRENCY DEBT FUND
	PERIOD FROM OCTOBER 22, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾			PERIOD FROM DECEMBER 9, 2015 THROUGH DECEMBER 31, 2015 ⁽²⁾

Operations
Net investment income	$	93,609		$	12,275
Net realized loss on investments		(17,307	)		(6,794	)
Net change in unrealized depreciation on investments		(418,614	)		(145,320	)

Net decrease in net assets from operations		(342,312	)		(139,839	)


Dividends to Common Shareholders
Net investment income
Class A		(1,814	)		(235	)

Class C		(1,550	)		(199	)

Class I		(45,677	)		(5,920	)

Class Y		(45,678	)		(5,921	)

Net realized gain
Class A		(62	)		–

Class C		(62	)		–

Class I		(1,488	)		–

Class Y		(1,488	)		–

Total dividends to common shareholders		(97,819	)		(12,275	)


Capital Share Transactions
Net proceeds from sale of shares		10,000,000			5,000,000
Net Asset Value of shares issued to shareholders in payment of distributions declared		3,100			–
Net increase in net assets resulting from capital stock transactions		10,003,100			5,000,000

Total increase in net assets		9,562,969			4,847,886


Net Assets
Beginning of period		–			–

End of period (includes undistributed net investment income of $(1,110) and $0, respectively)	$	9,562,969		$	4,847,886

(1)

Fund commenced operations on October 21, 2015.

(2)

Fund commenced operations on December 8, 2015.

See accompanying Notes to Financial Statements.

Babson Capital Funds Trust 2015 Semi-Annual Report

STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)

(Unaudited)


	BABSON GLOBAL HIGH YIELD FUND			BABSON U.S. HIGH YIELD FUND
	PERIOD FROM NOVEMBER 2, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾			PERIOD FROM NOVEMBER 2, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾

Operations
Net investment income	$	193,467		$	194,040
Net realized gain on investments		149,372			37,783
Net change in unrealized depreciation on investments		(941,573	)		(933,626	)

Net decrease in net assets from operations		(598,734	)		(701,803	)


Dividends to Common Shareholders
Net investment income
Class A		(736	)		(729	)

Class C		(622	)		(615	)

Class I		(96,048	)		(97,611	)

Class Y		(96,061	)		(95,085	)

Net realized gain
Total dividends to common shareholders		(193,467	)		(194,040	)


Capital Share Transactions
Net proceeds from sale of shares		25,007,500			27,100,000
Net Asset Value of shares issued to shareholders in payment of distributions declared		13			2,525

Net increase in net assets resulting from capital stock transactions		25,007,513			27,102,525

Total increase in net assets		24,215,312			26,206,682


Net Assets
Beginning of period		—			—

End of period (includes undistributed net investment income of $0 and $0, respectively)	$	24,215,312		$	26,206,682

(1)

Fund commenced operations on October 30, 2015.

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS


	CLASS A
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾			FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	9.60		$	10.20		$	10.00
Income from investment operations:
Net investment income⁽³⁾		0.14			0.44			0.30
Net realized and unrealized gain (loss) on investments		(0.49	)		(0.35	)		0.08

Total increase (decrease) from investment operations		(0.35	)		0.09			0.38

Less dividends and distributions:
From net investment income		(0.23	)		(0.68	)		(0.18	)
From net realized gain		–			(0.01	)		–

Total dividends and distributions		(0.23	)		(0.69	)		(0.18	)

Redemption fees		–			0.00	⁽⁴⁾		–

Net asset value, at end of period	$	9.02		$	9.60		$	10.20

Total investment return⁽⁵⁾		(3.64	)%⁽⁶⁾		0.95	%		3.81	%⁽⁶⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	5,578		$	5,153		$	12,464
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		1.89	%⁽⁸⁾		1.74	%		2.27	%⁽⁸⁾
Ratio of net expenses to average net assets		1.05	%⁽⁸⁾		1.05	%		1.05	%⁽⁸⁾
Ratio of net investment income to average net assets		4.49	%⁽⁸⁾		4.44	%		3.76	%⁽⁸⁾
Portfolio turnover rate		35.54	%⁽⁶⁾		63.17	%		49.51	%⁽⁶⁾

(1)

Unaudited.

(2)

Fund commenced operations on September 16, 2013.

(3)

Calculated using average shares outstanding.

(4)

Amount rounds to less than $.01 per share.

(5)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(6)

Not annualized.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.05% as a percentage of average daily net assets.

(8)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS C
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾			FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 ⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	9.57		$	10.16		$	10.00
Income from investment operations:
Net investment income⁽³⁾		0.17			0.35			0.24
Net realized and unrealized gain (loss) on investments		(0.56	)		(0.33	)		0.07

Total increase (decrease) from investment operations		(0.39	)		0.02			0.31

Less dividends and distributions:
From net investment income		(0.19	)		(0.60	)		(0.15	)
From net realized gain		–			(0.01	)		–

Total dividends and distributions		(0.19	)		(0.61	)		(0.15	)

Redemption fees		–			0.00	⁽⁴⁾		–

Net asset value, at end of period	$	8.99		$	9.57		$	10.16

Total investment return⁽⁵⁾		(4.02	)%⁽⁶⁾		0.30	%		3.15	%⁽⁶⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	6,598		$	5,461		$	2,396
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		2.63	%⁽⁸⁾		3.12	%		4.97	%⁽⁸⁾
Ratio of net expenses to average net assets		1.80	%⁽⁸⁾		1.80	%		1.80	%⁽⁸⁾
Ratio of net investment income to average net assets		3.76	%⁽⁸⁾		3.60	%		3.07	%⁽⁸⁾
Portfolio turnover rate		35.54	%⁽⁶⁾		63.17	%		49.51	%⁽⁶⁾

(1)

Unaudited.

(2)

Fund commenced operations on September 16, 2013.

(3)

Calculated using average shares outstanding.

(4)

Amount rounds to less than $.01 per share.

(5)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(6)

Not annualized.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.80% as a percentage of average daily net assets.

(8)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS I
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾			FOR THE YEAR ENDED JUNE 30, 2015			FOR THE YEAR ENDED JUNE 30, 2014⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	9.62		$	10.21		$	10.00
Income from investment operations:
Net investment income⁽³⁾		0.24			0.46			0.30
Net realized and unrealized gain (loss) on investments		(0.58	)		(0.34	)		0.10

Total increase (decrease) from investment operations		(0.34	)		0.12			0.40

Less dividends and distributions:
From net investment income		(0.24	)		(0.70	)		(0.19	)
From net realized gain		–			(0.01	)		–

Total dividends and distributions		(0.24	)		(0.71	)		(0.19	)

Redemption fees		–			0.00	⁽⁴⁾		–

Net asset value, at end of period	$	9.04		$	9.62		$	10.21

Total investment return⁽⁵⁾		(3.50	)%⁽⁶⁾		1.34	%		4.04	%⁽⁶⁾


Supplemental Data and Ratios
Net assets, end of period (000��s)	$	22,130		$	25,885		$	32,772
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		1.23	%⁽⁸⁾		1.31	%		1.52	%⁽⁸⁾
Ratio of net expenses to average net assets		0.75	%⁽⁸⁾		0.75	%		0.75	%⁽⁸⁾
Ratio of net investment income to average net assets		4.81	%⁽⁸⁾		4.69	%		3.72	%⁽⁸⁾
Portfolio turnover rate		35.54	%⁽⁶⁾		63.17	%		49.51	%⁽⁶⁾

(1)

Unaudited.

(2)

Fund commenced operations on September 16, 2013.

(3)

Calculated using average shares outstanding.

(4)

Amount rounds to less than $.01 per share.

(5)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(6)

Not annualized.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .75% as a percentage of average daily net assets.

(8)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS Y
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾			FOR THE YEAR ENDED JUNE 30, 2015			FOR THE YEAR ENDED JUNE 30, 2014⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	9.62		$	10.21		$	10.00
Income from investment operations:
Net investment income⁽³⁾		0.23			0.45			0.30
Net realized and unrealized gain (loss) on investments		(0.58	)		(0.33	)		0.10

Total increase (decrease) from investment operations		(0.35	)		0.12			0.40

Less dividends and distributions:
From net investment income		(0.24	)		(0.70	)		(0.19	)
From net realized gain		–			(0.01	)		–

Total dividends and distributions		(0.24	)		(0.71	)		(0.19	)

Redemption fees		–			0.00	⁽⁴⁾		–

Net asset value, at end of period	$	9.03		$	9.62		$	10.21

Total investment return⁽⁵⁾		(3.53	)%⁽⁶⁾		1.28	%		4.04	%⁽⁶⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	120,325		$	129,659		$	66,999
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		1.15	%⁽⁸⁾		1.25	%		1.53	%⁽⁸⁾
Ratio of net expenses to average net assets		0.75	%⁽⁸⁾		0.75	%		0.75	%⁽⁸⁾
Ratio of net investment income to average net assets		4.82	%⁽⁸⁾		4.58	%		3.80	%⁽⁸⁾
Portfolio turnover rate		35.54	%⁽⁶⁾		63.17	%		49.51	%⁽⁶⁾

(1)

Unaudited.

(2)

Fund commenced operations on September 16, 2013.

(3)

Calculated using average shares outstanding.

(4)

Amount rounds to less than $.01 per share.

(5)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(6)

Not annualized.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .75% as a percentage of average daily net assets.

(8)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS


	CLASS A
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾			FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 ⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	9.51		$	10.45		$	10.00
Income from investment operations:
Net investment income⁽³⁾		0.27			0.54			0.40
Net realized and unrealized gain (loss) on investments		(0.75	)		(0.57	)		0.33

Total increase (decrease) from investment operations		(0.48	)		(0.03	)		0.73

Less dividends and distributions:
From net investment income		(0.32	)		(0.78	)		(0.28	)
From net realized gain		–			(0.13	)		–

Total dividends and distributions		(0.32	)		(0.91	)		(0.28	)

Redemption fees		–			0.00	⁽⁴⁾		–

Net asset value, at end of period	$	8.71		$	9.51		$	10.45

Total investment return⁽⁵⁾		(5.05	)%⁽⁶⁾		(0.11	)%		7.30	%⁽⁶⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	11,925		$	12,718		$	2,591
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		1.97	%⁽⁸⁾		1.98	%		3.95	%⁽⁸⁾
Ratio of net expenses to average net assets		1.20	%⁽⁸⁾		1.20	%		1.20	%⁽⁸⁾
Ratio of net investment income to average net assets		5.86	%⁽⁸⁾		5.46	%		4.88	%⁽⁸⁾
Portfolio turnover rate		36.91	%⁽⁶⁾		84.65	%		99.72	%⁽⁶⁾

(1)

Unaudited.

(2)

Fund commenced operations on September 16, 2013.

(3)

Calculated using average shares outstanding.

(4)

Amount rounds to less than $.01 per share.

(5)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(6)

Not annualized.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.20% as a percentage of average daily net assets.

(8)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS C
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾			FOR THE YEAR ENDED JUNE 30, 2015			PERIOD FROM SEPTEMBER 16, 2013 THROUGH JUNE 30, 2014 ⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	9.50		$	10.45		$	10.00
Income from investment operations:
Net investment income⁽³⁾		0.23			0.47			0.35
Net realized and unrealized gain (loss) on investments		(0.74	)		(0.58	)		0.32

Total increase (decrease) from investment operations		(0.51	)		(0.11	)		0.67

Less dividends and distributions:
From net investment income		(0.29	)		(0.71	)		(0.22	)
From net realized gain		–			(0.13	)		–

Total dividends and distributions		(0.29	)		(0.84	)		(0.22	)

Redemption fees		–			0.00	⁽⁴⁾		–

Net asset value, at end of period	$	8.70		$	9.50		$	10.45

Total investment return⁽⁵⁾		(5.41	)%⁽⁶⁾		(0.93	)%		6.75	%⁽⁶⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	3,302		$	3,579		$	944
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		3.33	%⁽⁸⁾		4.09	%		10.50	%⁽⁸⁾
Ratio of net expenses to average net assets		1.95	%⁽⁸⁾		1.95	%		1.95	%⁽⁸⁾
Ratio of net investment income to average net assets		5.07	%⁽⁸⁾		4.79	%		4.39	%⁽⁸⁾
Portfolio turnover rate		36.91	%⁽⁶⁾		84.65	%		99.72	%⁽⁶⁾

(1)

Unaudited.

(2)

Fund commenced operations on September 16, 2013.

(3)

Calculated using average shares outstanding.

(4)

Amount rounds to less than $.01 per share.

(5)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(6)

Not annualized.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.95% as a percentage of average daily net assets.

(8)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS I
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾			FOR THE YEAR ENDED JUNE 30, 2015			FOR THE YEAR ENDED JUNE 30, 2014⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	9.51		$	10.46		$	10.00
Income from investment operations:
Net investment income⁽³⁾		0.28			0.56			0.41
Net realized and unrealized gain (loss) on investments		(0.74	)		(0.58	)		0.35

Total increase (decrease) from investment operations		(0.46	)		(0.02	)		0.76

Less dividends and distributions:
From net investment income		(0.34	)		(0.80	)		(0.30	)
From net realized gain		–			(0.13	)		–

Total dividends and distributions		(0.34	)		(0.93	)		(0.30	)

Redemption fees		–			0.00	⁽⁴⁾		–

Net asset value, at end of period	$	8.71		$	9.51		$	10.46

Total investment return⁽⁵⁾		(4.94	)%⁽⁶⁾		0.05	%		7.59	%⁽⁶⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	24,445		$	26,428		$	26,406
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		1.53	%⁽⁸⁾		1.58	%		1.83	%⁽⁸⁾
Ratio of net expenses to average net assets		0.95	%⁽⁸⁾		0.95	%		0.95	%⁽⁸⁾
Ratio of net investment income to average net assets		6.11	%⁽⁸⁾		5.69	%		5.02	%⁽⁸⁾
Portfolio turnover rate		36.91	%⁽⁶⁾		84.65	%		99.72	%⁽⁶⁾

(1)

Unaudited.

(2)

Fund commenced operations on September 16, 2013.

(3)

Calculated using average shares outstanding.

(4)

Amount rounds to less than $.01 per share.

(5)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(6)

Not annualized.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .95% as a percentage of average daily net assets.

(8)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS Y
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾			FOR THE YEAR ENDED JUNE 30, 2015			FOR THE YEAR ENDED JUNE 30, 2014⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	9.51		$	10.46		$	10.00
Income from investment operations:
Net investment income⁽³⁾		0.28			0.56			0.41
Net realized and unrealized gain (loss) on investments		(0.74	)		(0.58	)		0.35

Total increase (decrease) from investment operations		(0.46	)		(0.02	)		0.76

Less dividends and distributions:
From net investment income		(0.34	)		(0.80	)		(0.30	)
From net realized gain		–			(0.13	)		–

Total dividends and distributions		(0.34	)		(0.93	)		(0.30	)

Redemption fees		–			0.00	⁽⁴⁾		–

Net asset value, at end of period	$	8.71		$	9.51		$	10.46

Total investment return⁽⁵⁾		(4.95	)%⁽⁶⁾		0.05	%		7.59	%⁽⁶⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	42,473		$	39,006		$	33,885
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		1.51	%⁽⁸⁾		1.58	%		1.84	%⁽⁸⁾
Ratio of net expenses to average net assets		0.95	%⁽⁸⁾		0.95	%		0.95	%⁽⁸⁾
Ratio of net investment income to average net assets		6.12	%⁽⁸⁾		5.67	%		5.04	%⁽⁸⁾
Portfolio turnover rate		36.91	%⁽⁶⁾		84.65	%		99.72	%⁽⁶⁾

(1)

Unaudited.

(2)

Fund commenced operations on September 16, 2013.

(3)

Calculated using average shares outstanding.

(4)

Amount rounds to less than $.01 per share.

(5)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(6)

Not annualized.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .95% as a percentage of average daily net assets.

(8)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS


	CLASS A
	PERIOD FROM JULY 8, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.06
Net realized and unrealized loss on investments		(0.16	)

Total decrease from investment operations		(0.10	)

Less dividends and distributions:
From net investment income		(0.06	)

Net asset value, at end of period	$	9.84

Total investment return⁽⁴⁾		(1.00	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	10,519
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		1.72	%⁽⁷⁾
Ratio of net expenses to average net assets		0.66	%⁽⁷⁾
Ratio of net investment income to average net assets		1.32	%⁽⁷⁾
Portfolio turnover rate		122.49	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on July 8, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .65% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS C
	PERIOD FROM JULY 8, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income		0.03
Net realized and unrealized loss on investments		(0.17	)

Total decrease from investment operations		(0.14	)

Less dividends and distributions:
From net investment income		(0.03	)

Net asset value, at end of period	$	9.83

Total investment return ⁽³⁾		(1.39	)%⁽⁴⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	341
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁵⁾		10.50	%⁽⁶⁾
Ratio of net expenses to average net assets		1.44	%⁽⁶⁾
Ratio of net investment income to average net assets		0.62	%⁽⁶⁾
Portfolio turnover rate		122.49	%⁽⁴⁾

(1)

Unaudited.

(2)

Fund commenced operations on July 8, 2015.

(3)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(4)

Not annualized.

(5)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .90% as a percentage of average daily net assets.

(6)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS I
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income		0.08
Net realized and unrealized loss on investments		(0.17	)

Total decrease from investment operations		(0.09	)

Less dividends and distributions:
From net investment income		(0.08	)

Net asset value, at end of period	$	9.83

Total investment return ⁽³⁾		(0.92	)%⁽⁴⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	21,969
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		1.15	%⁽⁵⁾
Ratio of net expenses to average net assets		0.47	%⁽⁵⁾
Ratio of net investment income to average net assets		1.58	%⁽⁵⁾
Portfolio turnover rate		122.49	%⁽⁴⁾

(1)

Unaudited.

(2)

Fund commenced operations on July 8, 2015.

(3)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(4)

Not annualized.

(5)

Annualized for periods less than one full year.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .40% as a percentage of average daily net assets.

See accompanying Notes to Financial Statements.

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS Y
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income		0.08
Net realized and unrealized loss on investments		(0.17	)

Total decrease from investment operations		(0.09	)

Less dividends and distributions:
From net investment income		(0.08	)

Net asset value, at end of period	$	9.83

Total investment return ⁽³⁾		(0.93	)%⁽⁴⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	58,010
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁵⁾		1.03	%⁽⁶⁾
Ratio of net expenses to average net assets		0.45	%⁽⁶⁾
Ratio of net investment income to average net assets		1.57	%⁽⁶⁾
Portfolio turnover rate		122.49	%⁽⁴⁾

(1)

Unaudited.

(2)

Fund commenced operations on July 8, 2015.

(3)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(4)

Not annualized.

(5)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .40% as a percentage of average daily net assets.

(6)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Total Return Bond Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS


	CLASS A
	PERIOD FROM JULY 8, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.13
Net realized and unrealized loss on investments		(0.20	)

Total decrease from investment operations		(0.07	)

Less dividends and distributions:
From net investment income		(0.15	)
From net realized gain		(0.02	)

Total dividends and distributions		(0.17	)

Net asset value, at end of period	$	9.76

Total investment return⁽⁴⁾		(0.90	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	196
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		13.99	%⁽⁷⁾
Ratio of net expenses to average net assets		0.80	%⁽⁷⁾
Ratio of net investment income to average net assets		2.69	%⁽⁷⁾
Portfolio turnover rate		250.13	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on July 8, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .80% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Total Return Bond Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS C
	PERIOD FROM JULY 8, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.09
Net realized and unrealized loss on investments		(0.20	)

Total decrease from investment operations		(0.11	)

Less dividends and distributions:
From net investment income		(0.11	)
From net realized gain		(0.02	)

Total dividends and distributions		(0.13	)

Net asset value, at end of period	$	9.76

Total investment return⁽⁴⁾		(1.25	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	196
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		14.75	%⁽⁷⁾
Ratio of net expenses to average net assets		1.55	%⁽⁷⁾
Ratio of net investment income to average net assets		1.95	%⁽⁷⁾
Portfolio turnover rate		250.13	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on July 8, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.55% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Total Return Bond Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS I
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.14
Net realized and unrealized loss on investments		(0.20	)

Total decrease from investment operations		(0.06	)

Less dividends and distributions:
From net investment income		(0.16	)
From net realized gain		(0.02	)

Total dividends and distributions		(0.18	)

Net asset value, at end of period	$	9.76

Total investment return⁽⁴⁾		(0.78	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	12,060
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		2.12	%⁽⁷⁾
Ratio of net expenses to average net assets		0.55	%⁽⁷⁾
Ratio of net investment income to average net assets		2.95	%⁽⁷⁾
Portfolio turnover rate		250.13	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on July 8, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .55% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Total Return Bond Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS Y
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.14
Net realized and unrealized loss on investments		(0.20	)

Total decrease from investment operations		(0.06	)

Less dividends and distributions:
From net investment income		(0.16	)
From net realized gain		(0.02	)

Total dividends and distributions		(0.18	)

Net asset value, at end of period	$	9.76

Total investment return⁽⁴⁾		(0.78	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	12,082
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		2.12	%⁽⁷⁾
Ratio of net expenses to average net assets		0.55	%⁽⁷⁾
Ratio of net investment income to average net assets		2.95	%⁽⁷⁾
Portfolio turnover rate		250.13	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on July 8, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .55% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Emerging Markets Debt Blended Total Return Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS


	CLASS A
	PERIOD FROM OCTOBER 21, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.09
Net realized and unrealized loss on investments		(0.44	)

Total decrease from investment operations		(0.35	)

Less dividends and distributions:
From net investment income		(0.09	)

Net asset value, at end of period	$	9.56

Total investment return⁽⁴⁾		(3.47	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	191
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		17.73	%⁽⁷⁾
Ratio of net expenses to average net assets		1.09	%⁽⁷⁾
Ratio of net investment income to average net assets		4.73	%⁽⁷⁾
Portfolio turnover rate		9.39	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 21, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.20% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Emerging Markets Debt Blended Total Return Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS C
	PERIOD FROM OCTOBER 21, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.08
Net realized and unrealized loss on investments		(0.44	)

Total decrease from investment operations		(0.36	)

Less dividends and distributions:
From net investment income		(0.08	)

Net asset value, at end of period	$	9.56

Total investment return⁽⁴⁾		(3.60	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	191
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		18.48	%⁽⁷⁾
Ratio of net expenses to average net assets		1.80	%⁽⁷⁾
Ratio of net investment income to average net assets		4.02	%⁽⁷⁾
Portfolio turnover rate		9.39	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 21, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.95% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Emerging Markets Debt Blended Total Return Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS I
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.10
Net realized and unrealized loss on investments		(0.44	)

Total decrease from investment operations		(0.34	)

Less dividends and distributions:
From net investment income		(0.10	)

Net asset value, at end of period	$	9.56

Total investment return⁽⁴⁾		(3.42	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	4,590
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		5.57	%⁽⁶⁾
Ratio of net expenses to average net assets		0.85	%⁽⁶⁾
Ratio of net investment income to average net assets		4.96	%⁽⁶⁾
Portfolio turnover rate		9.39	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 21, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

Annualized for periods less than one full year.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .95% as a percentage of average daily net assets.

See accompanying Notes to Financial Statements.

Babson Emerging Markets Debt Blended Total Return Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS Y
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.10
Net realized and unrealized loss on investments		(0.44	)

Total decrease from investment operations		(0.34	)

Less dividends and distributions:
From net investment income		(0.10	)

Net asset value, at end of period	$	9.56

Total investment return⁽⁴⁾		(3.42	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	4,590
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		5.57	%⁽⁶⁾
Ratio of net expenses to average net assets		0.85	%⁽⁶⁾
Ratio of net investment income to average net assets		4.96	%⁽⁶⁾
Portfolio turnover rate		9.39	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 21, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

Annualized for periods less than one full year.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .95% as a percentage of average daily net assets.

See accompanying Notes to Financial Statements.

Babson Emerging Markets Local Currency Debt Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS


	CLASS A
	PERIOD FROM DECEMBER 8, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.02
Net realized and unrealized loss on investments		(0.30	)

Total decrease from investment operations		(0.28	)

Less dividends and distributions:
From net investment income		(0.02	)

Net asset value, at end of period	$	9.70

Total investment return⁽⁴⁾		(2.81	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	97
Ratio of total expenses (before reductions and reimbursements) to average net assets ⁽⁶⁾		34.93	%⁽⁷⁾
Ratio of net expenses to average net assets		–	%⁽⁷⁾
Ratio of net investment income to average net assets		3.83	%⁽⁷⁾
Portfolio turnover rate		–	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on December 8, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.20% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Emerging Markets Local Currency Debt Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS C
	PERIOD FROM DECEMBER 8, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.02
Net realized and unrealized loss on investments		(0.30	)

Total decrease from investment operations		(0.28	)

Less dividends and distributions:
From net investment income		(0.02	)

Net asset value, at end of period	$	9.70

Total investment return⁽⁴⁾		(2.84	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	97
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		35.68	%⁽⁷⁾
Ratio of net expenses to average net assets		–	%⁽⁷⁾
Ratio of net investment income to average net assets		3.24	%⁽⁷⁾
Portfolio turnover rate		–	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on December 8, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.95% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Emerging Markets Local Currency Debt Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS I
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.02
Net realized and unrealized loss on investments		(0.30	)

Total decrease from investment operations		(0.28	)

Less dividends and distributions:
From net investment income		(0.02	)

Net asset value, at end of period	$	9.70

Total investment return⁽⁴⁾		(2.80	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	2,327
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		11.18	%⁽⁷⁾
Ratio of net expenses to average net assets		–	%⁽⁷⁾
Ratio of net investment income to average net assets		4.02	%⁽⁷⁾
Portfolio turnover rate		–	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on December 8, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 0.95% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Emerging Markets Local Currency Debt Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS Y
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.02
Net realized and unrealized loss on investments		(0.30	)

Total decrease from investment operations		(0.28	)

Less dividends and distributions:
From net investment income		(0.02	)

Net asset value, at end of period	$	9.70

Total investment return⁽⁴⁾		(2.80	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	2,327
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		11.18	%⁽⁷⁾
Ratio of net expenses to average net assets		–	%⁽⁷⁾
Ratio of net investment income to average net assets		4.02	%⁽⁷⁾
Portfolio turnover rate		–	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on December 8, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 0.95% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Global High Yield Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS


	CLASS A
	PERIOD FROM OCTOBER 30, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.07
Net realized and unrealized loss on investments		(0.32	)

Total decrease from investment operations		(0.25	)

Less dividends and distributions:
From net investment income		(0.07	)

Net asset value, at end of period	$	9.68

Total investment return⁽⁴⁾		(2.44	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	97
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		26.13	%⁽⁷⁾
Ratio of net expenses to average net assets		1.00	%⁽⁷⁾
Ratio of net investment income to average net assets		4.56	%⁽⁷⁾
Portfolio turnover rate		13.30	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 30, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.05% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Global High Yield Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS C
	PERIOD FROM OCTOBER 30, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.06
Net realized and unrealized loss on investments		(0.32	)

Total decrease from investment operations		(0.26	)

Less dividends and distributions:
From net investment income		(0.06	)

Net asset value, at end of period	$	9.68

Total investment return⁽⁴⁾		(2.55	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	97
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		26.87	%⁽⁷⁾
Ratio of net expenses to average net assets		1.70	%⁽⁷⁾
Ratio of net investment income to average net assets		3.86	%⁽⁷⁾
Portfolio turnover rate		13.30	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 30, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.80% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson Global High Yield Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS I
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.08
Net realized and unrealized loss on investments		(0.32	)

Total decrease from investment operations		(0.24	)

Less dividends and distributions:
From net investment income		(0.08	)

Net asset value, at end of period	$	9.68

Total investment return⁽⁴⁾		(2.40	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	12,007
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		2.49	%⁽⁶⁾
Ratio of net expenses to average net assets		0.76	%⁽⁶⁾
Ratio of net investment income to average net assets		4.80	%⁽⁶⁾
Portfolio turnover rate		13.30	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 30, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

Annualized for periods less than one full year.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .80% as a percentage of average daily net assets.

See accompanying Notes to Financial Statements.

Babson Global High Yield Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS Y
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.08
Net realized and unrealized loss on investments		(0.32	)

Total decrease from investment operations		(0.24	)

Less dividends and distributions:
From net investment income		(0.08	)

Net asset value, at end of period	$	9.68

Total investment return⁽⁴⁾		(2.40	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	12,015
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		2.49	%⁽⁷⁾
Ratio of net expenses to average net assets		0.76	%⁽⁷⁾
Ratio of net investment income to average net assets		4.80	%⁽⁷⁾
Portfolio turnover rate		13.30	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 30, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .80% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson U.S. High Yield Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS


	CLASS A
	PERIOD FROM OCTOBER 30, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.07
Net realized and unrealized loss on investments		(0.36	)

Total decrease from investment operations		(0.29	)

Less dividends and distributions:
From net investment income		(0.07	)

Net asset value, at end of period	$	9.64

Total investment return⁽⁴⁾		(2.88	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	96
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁶⁾		26.14	%⁽⁷⁾
Ratio of net expenses to average net assets		0.95	%⁽⁷⁾
Ratio of net investment income to average net assets		4.53	%⁽⁷⁾
Portfolio turnover rate		12.07	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 30, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.00% as a percentage of average daily net assets.

(7)

Annualized for periods less than one full year.

See accompanying Notes to Financial Statements.

Babson U.S. High Yield Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS C
	PERIOD FROM OCTOBER 30, 2015 THROUGH DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.06
Net realized and unrealized loss on investments		(0.36	)

Total decrease from investment operations		(0.30	)

Less dividends and distributions:
From net investment income		(0.06	)

Net asset value, at end of period	$	9.64

Total investment return⁽⁴⁾		(2.99	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	96
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		26.89	%⁽⁶⁾
Ratio of net expenses to average net assets		1.66	%⁽⁶⁾
Ratio of net investment income to average net assets		3.81	%⁽⁶⁾
Portfolio turnover rate		12.07	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 30, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation does not consider the effects of sales loads and assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

Annualized for periods less than one full year.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed 1.75% as a percentage of average daily net assets.

See accompanying Notes to Financial Statements.

Babson U.S. High Yield Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS I
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.08
Net realized and unrealized loss on investments		(0.36	)

Total decrease from investment operations		(0.28	)

Less dividends and distributions:
From net investment income		(0.08	)

Net asset value, at end of period	$	9.64

Total investment return⁽⁴⁾		(2.84	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	14,061
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		2.43	%⁽⁶⁾
Ratio of net expenses to average net assets		0.71	%⁽⁶⁾
Ratio of net investment income to average net assets		4.79	%⁽⁶⁾
Portfolio turnover rate		12.07	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 30, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

Annualized for periods less than one full year.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .75% as a percentage of average daily net assets.

See accompanying Notes to Financial Statements.

Babson U.S. High Yield Fund 2015 Semi-Annual Report

FINANCIAL HIGHLIGHTS (CONTINUED)


	CLASS Y
	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015 ⁽¹⁾⁽²⁾

Per Common Share Data
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income ⁽³⁾		0.08
Net realized and unrealized loss on investments		(0.36	)

Total decrease from investment operations		(0.28	)

Less dividends and distributions:
From net investment income		(0.08	)

Net asset value, at end of period	$	9.64

Total investment return⁽⁴⁾		(2.84	)%⁽⁵⁾


Supplemental Data and Ratios
Net assets, end of period (000’s)	$	11,953
Ratio of total expenses (before reductions and reimbursements) to average net assets⁽⁷⁾		2.43	%⁽⁶⁾
Ratio of net expenses to average net assets		0.71	%⁽⁶⁾
Ratio of net investment income to average net assets		4.77	%⁽⁶⁾
Portfolio turnover rate		12.07	%⁽⁵⁾

(1)

Unaudited.

(2)

Fund commenced operations on October 30, 2015.

(3)

Calculated using average shares outstanding.

(4)

Total investment return calculation assumes the reinvestment of dividends at actual prices pursuant to the Fund’s dividend reinvestment plan.

(5)

Not annualized.

(6)

Annualized for periods less than one full year.

(7)

The Adviser has agreed to waive and/or reimburse certain fees and/or expense so that, on an annualized basis, such expenses incurred will not exceed .75% as a percentage of average daily net assets.

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Fixed Income — 93.1%:**

*Bank Loans — 83.3%§:**

*Aerospace and Defense — 0.5%:**
Swissport Investments SA+		6.25	%		11/30/2021		700,000		$731,901		$759,302


*Automobile — 2.3%:**
Gates Global, Inc.		4.25			7/5/2021		1,486,206		1,481,275		1,390,658
RAC Finance (Holdings) Ltd.+		5.36			12/17/2021		990,000		1,478,964		1,457,371
RAC Finance (Holdings) Ltd.+		8.25			12/17/2022		500,000		791,805		737,410

Total Automobile							2,976,206		3,752,044		3,585,439


*Beverage, Food and Tobacco — 1.7%:**
1011778 B.C. Unlimited Liability Co.+		3.75			12/12/2021		797,981		790,001		790,001
Acosta Holdco, Inc.		4.25			9/26/2021		404,825		404,825		384,150
Del Monte Foods, Inc.		4.25			2/18/2021		245,625		244,722		235,800
Deoleo SA+		4.50			6/11/2021		500,000		677,157		474,399
JBS USA, LLC		3.75			9/18/2020		488,750		489,595		478,975
Telepizza SA+		7.00			10/20/2020		250,000		315,638		270,783

Total Beverage, Food and Tobacco							2,687,181		2,921,938		2,634,108


*Broadcasting and Entertainment — 4.9%:**
All3Media International+		5.25			6/30/2021		1,500,000		2,301,776		2,009,519
Charter Communications Operating LLC		3.00			1/4/2021		1,487,392		1,478,021		1,455,785
Cumulus Media Holdings, Inc.		4.25			12/23/2020		152,239		150,280		114,686
DLG Acquisitions Ltd.+		8.25			6/30/2022		500,000		671,653		502,622
Learfield Communications, Inc.		4.50			10/9/2020		411,259		410,881		407,146
Tech Finance & Co. S.C.A+		5.00			7/10/2020		500,000		558,172		543,147
Tele Columbus AG+		5.11			1/4/2021		500,000		546,572		532,659
Univision Communications, Inc.		4.00			3/1/2020		1,985,545		1,984,948		1,939,877

Total Broadcasting and Entertainment							7,036,435		8,102,303		7,505,441


*Buildings and Real Estate — 2.5%:**
Alison Bidco Sarl+		5.50			8/29/2021		293,542		291,156		286,937
Builders FirstSource, Inc.		6.00			7/31/2022		1,590,834		1,585,719		1,570,949
DTZ US Borrower LLC		4.25			11/4/2021		2,055,004		2,044,082		2,001,697

Total Buildings and Real Estate							3,939,380		3,920,957		3,859,583


*Cargo Transport — 1.5%:**
Direct ChassisLink, Inc.¤		8.25			11/12/2019		490,476		485,684		473,310
Direct ChassisLink, Inc. (Add-On Facility)¤		8.25			10/31/2019		500,633		500,633		483,111
XPO Logistics, Inc.		5.50			11/1/2021		1,446,320		1,426,488		1,438,481

Total Cargo Transport							2,437,429		2,412,805		2,394,902


*Chemicals, Plastics and Rubber — 5.9%:**
Chromaflo Technologies Corp.		4.50			12/2/2019		1,209,074		1,207,169		1,154,666
Flint Group GmbH+		4.25			9/7/2021		500,000		536,505		538,283
Flint Group GmbH+		4.50			9/7/2021		90,565		89,820		88,618

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)

Chemicals, Plastics and Rubber (Continued)
Flint Group U.S. LLC+		4.50	%		9/7/2021		547,846		$543,340		$536,067
MacDermid European Holdings B.V.		5.50			6/7/2020		498,750		525,751		530,163
MacDermid, Inc.		5.50			6/7/2020		1,477,458		1,448,304		1,430,548
Methanol Holdings (Trinidad) Ltd.		4.25			6/30/2022		1,129,784		1,119,266		1,039,401
OXEA Finance & Cy S.C.A.+		4.50			1/15/2020		497,462		525,678		526,198
OXEA Finance LLC+		4.25			1/15/2020		354,120		348,022		339,070
Styrolution Group GmbH+		6.50			11/7/2019		594,000		732,350		645,801
Univar, Inc.		4.25			7/1/2022		983,113		981,926		949,658
Vantage Specialty Chemicals, Inc.		5.00			2/10/2019		1,438,870		1,427,967		1,410,093

Total Chemicals, Plastics and Rubber							9,321,042		9,486,098		9,188,566


*Containers, Packaging and Glass — 4.9%:**
Consolidated Container Co. LLC		5.00			7/3/2019		1,488,461		1,486,727		1,345,569
Consolidated Container Co. LLC		7.75			1/3/2020		188,280		185,543		160,038
Hilex Poly Co. LLC		6.00			12/5/2021		402,814		399,356		401,001
Mauser U.S. Corporate LLC+		4.50			7/31/2021		1,564,389		1,564,484		1,525,279
Multi Packaging Solutions, Inc.		4.25			9/30/2020		917,857		917,852		881,143
Prolampac Intermediate, Inc.		5.75			8/18/2022		956,586		947,497		935,063
Prolampac Intermediate, Inc.		9.25			8/18/2023		1,000,000		980,872		895,000
Tekni-Plex, Inc.		4.50			6/1/2022		371,882		370,173		365,374
Verallia+		5.00			10/29/2022		1,000,000		1,092,382		1,085,283

Total Containers, Packaging and Glass							7,890,269		7,944,886		7,593,750


*Diversified Natural Resources, Precious Metals and Minerals — 0.3%:**
Cemex SAB de CV		4.11			7/23/2020		538,919		548,582		539,369


*Diversified/Conglomerate Manufacturing — 2.2%:**
Pelican Products, Inc.		5.25			4/10/2020		989,924		987,851		970,126
Quality Home Brands Holdings LLC		7.75			5/25/2018		258,399		256,979		258,185
STS Operating, Inc.		4.75			2/12/2021		311,347		311,619		295,001
Tennessee Acquisition Holding B.V.+		5.25			11/30/2022		500,000		534,009		535,903
Terex Corp.		4.50			12/31/2022		500,000		535,178		532,958
Triple Point Technology, Inc.		5.25			7/10/2020		339,095		316,511		244,148
Triple Point Technology, Inc.††		9.25			7/10/2021		145,676		137,307		87,406
West Corp.		2.86			7/1/2019		495,181		481,673		475,374

Total Diversified/Conglomerate Manufacturing							3,539,622		3,561,127		3,399,101


*Diversified/Conglomerate Service — 6.5%:**
Aquilex Holdings LLC		5.00			12/31/2020		196,139		195,786		186,332
Atrium Innovations, Inc.+		4.25			2/13/2021		823,547		822,391		757,663
Brock Holdings III, Inc.		6.00			3/16/2017		949,798		939,877		883,312
EIG Investors Corp.		5.00			11/9/2019		822,974		823,656		800,342
Garda World Security Corp.+		4.00			11/6/2020		1,163,279		1,156,817		1,107,058
Men’s Wearhouse, Inc. (The)		4.50			6/18/2021		880,484		790,193		772,625

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)

Diversified/Conglomerate Service (Continued)
MH Sub I LLC		4.75	%		7/8/2021		583,849		$581,193		$563,899
MH Sub I LLC		8.50			7/8/2022		400,000		396,731		377,332
MPH Acquisition Holdings LLC		3.75			3/31/2021		700,699		699,357		680,848
Northgate Information Solutions Ltd.+		4.61			3/18/2018		293,704		393,438		312,799
Northgate Information Solutions Ltd.+		5.11			3/18/2018		290,745		390,163		309,647
Power Team Services LLC		8.25			11/6/2020		500,000		496,496		473,750
RP Crown Parent LLC		6.00			12/21/2018		545,420		546,814		483,084
RP Crown Parent LLC		11.25			12/20/2019		678,571		689,038		551,903
SkillSoft Corp.		5.75			4/28/2021		398,989		396,368		307,221
Vogue International, Inc.		5.75			2/14/2020		1,433,080		1,443,651		1,426,818

Total Diversified/Conglomerate Service							10,661,278		10,761,969		9,994,633


*Ecological — 2.6%:**
Biffa Waste Services Ltd.+		5.61			1/30/2018		2,000,000		3,178,564		2,870,267
Emerald 3 Ltd.+		8.00			5/31/2022		390,426		387,249		367,001
PHS Group PLC+		6.00			4/17/2020		500,000		771,486		732,493

Total Ecological							2,890,426		4,337,299		3,969,761


*Electronics — 3.2%:**
CDW LLC		3.25			4/29/2020		1,190,819		1,185,648		1,159,262
Informatica Corp.		4.50			8/5/2022		1,596,000		1,594,105		1,532,735
Microsemi Corp.		5.11			12/2/2022		915,669		888,199		897,814
Renaissance Learning, Inc.		4.50			4/9/2021		1,486,137		1,467,505		1,419,260

Total Electronics							5,188,625		5,135,457		5,009,071


*Finance — 5.6%:**
Alliant Holdings I, Inc.		4.50			8/12/2022		1,246,867		1,236,204		1,214,137
Confie Seguros Holdings II Co.		5.75			11/9/2018		531,339		529,798		522,705
Cunningham Lindsey US, Inc.		5.00			12/10/2019		486,139		484,591		313,560
Cunningham Lindsey US, Inc.		9.25			6/10/2020		748,546		749,917		389,244
Eze Castle Software, Inc.		4.00			4/6/2020		971,818		967,372		950,758
First Data Corp.		4.36			7/8/2022		1,022,479		1,014,906		1,006,886
GENEX Holdings, Inc.		5.25			5/30/2021		1,496,203		1,490,805		1,467,520
Moneygram International, Inc.		4.25			3/27/2020		829,494		776,119		755,528
P2 Newco Acquisition, Inc.		5.50			10/22/2020		379,059		376,438		374,321
SAM Finance Lux Sarl+		5.00			12/17/2020		343,568		554,946		504,482
Sedgwick Claims Management Services, Inc.		3.75			3/1/2021		491,250		490,342		470,372
Sedgwick Claims Management Services, Inc.		6.75			2/28/2022		561,418		560,859		505,277
Wall Street Systems Delaware, Inc.		4.50			4/30/2021		241,948		241,024		237,563

Total Finance							9,350,128		9,473,321		8,712,353


*Healthcare, Education and Childcare — 9.1%:**
ADMI Corp.		5.50			4/30/2022		1,492,500		1,502,701		1,486,903
Amedes Holding AG+		5.36			8/19/2022		500,000		532,949		540,174

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)

Healthcare, Education and Childcare (Continued)
CareCore National LLC		5.50	%		3/5/2021		676,178		$675,808		$581,513
Drumm Investors LLC		6.75			5/4/2018		863,565		858,661		849,895
Financiere Verdi+		6.11			9/30/2022		500,000		529,281		537,490
Jaguar Holding Co. II		4.25			8/18/2022		902,634		898,347		875,555
Kindred Healthcare, Inc.		4.25			4/9/2021		1,694,716		1,640,661		1,631,165
MedImpact Healthcare Systems, Inc.		5.75			10/27/2022		444,741		440,381		438,070
Ortho-Clinical Diagnostics, Inc.		4.75			6/30/2021		2,036,007		2,024,257		1,717,881
Rodenstock GmbH+		5.11			5/30/2019		1,500,000		1,765,267		1,602,625
Synarc-Biocore Holdings LLC		5.50			3/10/2021		491,250		487,589		456,863
Synarc-Biocore Holdings LLC		9.25			3/10/2022		500,000		496,114		456,250
Team Health Inc.		4.50			11/23/2022		467,760		463,114		465,716
Tecomet, Inc.		5.75			12/5/2021		722,135		701,038		646,310
Tunstall Group Holdings Ltd.+		5.61			10/16/2020		500,000		793,936		691,341
Valeant Pharmaceuticals International		4.00			4/1/2022		1,089,449		1,076,818		1,045,598

Total Healthcare, Education and Childcare							14,380,935		14,886,922		14,023,349


*Home and Office Furnishings, Housewares, and Durable Consumer Products — 1.4%:**
HMK Intermediate Holdings LLC		5.00			3/30/2019		1,576,795		1,573,664		1,564,969
Leslie’s Poolmart, Inc.		4.25			10/16/2019		537,166		537,166		522,528

Total Home and Office Furnishings, Housewares, and Durable Consumer Products							2,113,961		2,110,830		2,087,497


*Hotels, Motels, Inns and Gaming — 1.4%:**
Compass Holdco 2 Ltd.+		5.86			10/31/2022		500,000		754,716		729,729
Cyan Blue Holdco 3 Ltd.+		6.50			2/25/2022		500,000		733,819		736,982
Full Moon Holdco 6 Ltd.+		6.00			6/19/2017		500,000		762,710		733,105

Total Hotels, Motels, Inns and Gaming							1,500,000		2,251,245		2,199,816


*Insurance — 2.7%:**
Asurion LLC		4.25			7/8/2020		588,678		545,623		535,945
Asurion LLC		5.00			5/24/2019		900,401		876,901		841,596
Hub International Ltd.		4.00			10/2/2020		1,721,281		1,715,285		1,620,156
York Risk Services Holding Corp.		4.75			10/1/2021		1,186,670		1,157,758		1,118,436

Total Insurance							4,397,030		4,295,567		4,116,133


*Leisure, Amusement, Entertainment — 3.6%:**
AP NMT Acquisition B.V.+		6.75			8/13/2021		523,382		508,133		462,759
AP NMT Acquisition B.V.+		7.00			8/13/2021		537,677		648,833		572,050
AP NMT Acquisition B.V.+		10.00			8/13/2022		100,000		83,875		80,500
Delta 2 (Lux) Sarl+		4.75			7/30/2021		1,587,247		1,582,771		1,530,948
Delta 2 (Lux) Sarl+		7.75			7/31/2022		437,500		436,786		402,281
SeaWorld Parks & Entertainment, Inc.		4.00			5/14/2020		987,514		988,197		956,239
WMG Acquisition Corp.		3.75			7/1/2020		1,586,820		1,569,595		1,498,878

Total Leisure, Amusement, Entertainment							5,760,140		5,818,190		5,503,655

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)

*Machinery Non-Agriculture, Non-Construction, Non-Electronic — 5.3%:**
Apex Tool Group LLC		4.50	%		1/31/2020		1,994,872		$1,963,809		$1,907,596
Doncasters Finance US LLC		4.50			4/9/2020		957,015		955,292		924,716
Gardner Denver, Inc.		4.25			7/30/2020		770,184		750,804		691,047
Husky Injection Molding Systems Ltd.+		4.25			6/30/2021		942,019		941,260		903,161
Husky Injection Molding Systems Ltd.+		7.25			6/30/2022		369,936		355,241		355,139
Intelligrated, Inc.		4.50			7/30/2018		1,104,270		1,096,283		1,076,663
Schenck Measuring and Process Technologies+		4.11			4/28/2017		2,000,000		1,944,800		1,975,000
Silver II US Holdings LLC		4.00			12/13/2019		435,311		431,504		367,185

Total Machinery Non-Agriculture, Non-Construction, Non-Electronic							8,573,607		8,438,993		8,200,507


*Mining, Steel, Iron and Non-Precious Metals — 1.6%:**
Arch Coal, Inc.		6.25			5/16/2018		1,479,606		1,249,310		651,441
Boomerang Tube LLC††~		11.00			10/11/2017		249,123		245,041		107,746
H.C. Starck GmbH+		3.36			5/30/2016		500,000		679,250		498,275
H.C. Starck GmbH+		3.36			5/30/2016		500,000		496,039		458,335
Murray Energy Corp.		7.50			4/16/2020		746,183		726,867		473,028
Peabody Energy Corp.		4.25			9/24/2020		620,378		563,140		291,577

Total Mining, Steel, Iron and Non-Precious Metals							4,095,290		3,959,647		2,480,402


*Oil and Gas — 2.3%:**
Caelus Energy Alaska O3 LLC		8.75			4/15/2020		1,692,308		1,536,666		888,462
CITGO Holding, Inc.		9.50			5/12/2018		724,383		721,705		717,740
Drillships Financing Holding, Inc.		6.00			3/31/2021		989,835		854,929		392,222
Drillships Ocean Ventures, Inc.		5.50			7/25/2021		252,049		250,035		117,833
Fieldwood Energy LLC		8.38			9/30/2020		1,613,838		1,088,975		242,076
Floatel International Ltd.		6.00			6/27/2020		404,410		401,343		177,132
Paragon Offshore Finance Co.		3.75			7/18/2021		545,863		447,449		138,103
Sabine Oil & Gas LLC~		8.75			12/31/2018		700,000		707,549		11,900
Seadrill Partners Finco LLC		4.00			2/21/2021		629,425		623,617		260,160
Southcross Holdings Borrower LP		6.00			8/4/2021		145,222		144,638		79,388
Templar Energy LLC		8.50			11/25/2020		361,162		278,996		37,922
TPF II Power LLC		5.50			10/2/2021		515,123		511,933		502,889

Total Oil and Gas							8,573,618		7,567,835		3,565,827


*Personal Transportation — 0.8%:**
Travelport Finance (Luxembourg) Sarl		5.75			9/2/2021		1,312,616		1,315,286		1,281,848


*Personal, Food and Miscellaneous — 0.1%:**
Redtop Acquisitions Ltd.+		8.25			6/3/2021		155,983		154,569		153,253


*Printing and Publishing — 2.2%:**
Cengage Learning Acquisitions, Inc.		7.00			3/31/2020		1,043,467		1,042,203		1,014,772
Eden Bidco Ltd.+		6.00			4/28/2022		547,250		573,747		591,007

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)

Printing and Publishing (Continued)
Springer Science+Business Media Deutschland GmbH+		4.75	%		8/14/2020		1,902,202		$1,891,745		$1,818,505

Total Printing and Publishing							3,492,919		3,507,695		3,424,284


*Retail Stores — 4.1%:**
Advantage Sales & Marketing, Inc.		4.25			7/23/2021		988,976		985,933		949,140
BJ’s Wholesale Club, Inc.		4.50			9/26/2019		1,626,117		1,629,154		1,554,291
FPC Holdings, Inc.		5.25			11/19/2019		1,474,111		1,460,957		1,186,659
Kirk Beauty One GmbH+		6.00			8/13/2022		799,999		889,312		868,557
Maxeda DIY B.V.+		7.00			6/28/2019		583,334		645,382		526,396
Neiman Marcus Group, Inc. (The)		4.25			10/25/2020		116,978		110,207		103,233
Pilot Travel Centers LLC		4.00			10/1/2021		405,191		405,191		405,191
Talbots, Inc. (The)		5.50			3/19/2020		737,487		727,646		693,238

Total Retail Stores							6,732,193		6,853,782		6,286,705


*Telecommunications — 3.6%:**
Altice Financing SA+		5.50			7/2/2019		260,312		262,084		258,199
Eircom Finco Sarl+		5.11			9/30/2019		988,319		1,326,548		1,053,111
Eircom Finco Sarl+		5.11			5/31/2022		500,000		544,419		531,220
Equinix, Inc.		4.50			11/20/2022		500,000		748,812		735,700
ION Trading Finance Ltd.		4.25			6/10/2021		1,835,857		1,822,786		1,771,602
Numericable Group S.A.+		4.56			7/29/2022		500,000		553,436		532,958
Numericable US LLC+		4.50			5/21/2020		662,506		657,647		636,668

Total Telecommunications							5,246,994		5,915,732		5,519,458


*Utilities — 0.5%:**
Calpine Construction Finance Co. LP		3.00			5/3/2020		489,950		489,076		459,940
Calpine Corp.		4.00			1/13/2023		361,360		357,759		345,099

Total Utilities							851,310		846,835		805,039

Total Bank Loans							136,343,536		141,013,815		128,793,152

*Corporate Bonds — 9.8%:**

*Aerospace and Defense — 0.1%:**
Swissport Investments SA+		6.75			12/15/2021		100,000		109,490		112,614


*Banking — 0.1%:**
Lock AS+		5.50	^#		8/15/2020		100,000		110,729		109,219
Lock AS+		7.00			8/15/2021		100,000		134,225		113,250

Total Banking							200,000		244,954		222,469


*Beverage, Food and Tobacco — 0.1%:**
Pizzaexpress Financing 2 PLC+		6.63			8/1/2021		100,000		169,730		150,844


*Broadcasting and Entertainment — 0.1%:**
Entertainment One Ltd.+		6.88			12/15/2022		100,000		150,251		146,757

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Buildings and Real Estate — 0.1%:**
Paroc Group Oy+		6.25	%		5/15/2020		100,000		$137,565		$103,799
Paroc Group Oy MTN+		5.17	^#		5/15/2020		100,000		137,565		102,698

Total Buildings and Real Estate							200,000		275,130		206,497


*Cargo Transport — 0.4%:**
Florida East Coast Holdings Corp.^		6.75			5/1/2019		550,000		543,305		503,250
WFS Global Holding SAS+		9.50			7/15/2022		100,000		113,435		113,798

Total Cargo Transport							650,000		656,740		617,048


*Chemicals, Plastics and Rubber — 0.4%:**
Ineos Finance PLC+		4.00			5/1/2023		150,000		162,383		155,677
Pinnacle Operating Corp.^		9.00			11/15/2020		500,000		531,133		470,000

Total Chemicals, Plastics and Rubber							650,000		693,516		625,677


*Containers, Packaging and Glass — 0.4%:**
Horizon Holdings III SASU+		5.13			8/1/2022		100,000		109,775		111,957
Innovia Group Finance PLC+		4.87	^#		3/31/2020		500,000		684,891		540,658

Total Containers, Packaging and Glass							600,000		794,666		652,615


*Diversified/Conglomerate Manufacturing — 0.3%:**
Appvion, Inc.^		9.00			6/1/2020		460,000		467,120		182,850
Galapagos SA+		4.62	^#		6/15/2021		200,000		272,630		207,569

Total Diversified/Conglomerate Manufacturing							660,000		739,750		390,419


*Diversified/Conglomerate Service — 1.2%:**
Carlson Travel Holdings, Inc. PIK^		7.50			8/15/2019		470,000		474,639		462,950
Sabre GLBL, Inc.^		5.25			11/15/2023		154,000		152,915		152,268
Sabre GLBL, Inc.^		5.38			4/15/2023		1,061,000		1,080,919		1,055,695
Verisure Holding AB+		6.00			11/1/2022		100,000		110,105		113,022

Total Diversified/Conglomerate Service							1,785,000		1,818,578		1,783,935


*Finance — 1.8%:**
Arrow Global Finance PLC+		5.14	^#		11/1/2021		150,000		167,752		164,952
First Data Corp.^		5.00			1/15/2024		179,000		179,000		178,105
Galaxy Bidco Ltd.+		5.57	^#		11/15/2019		100,000		161,111		147,346
Garfunkelux Holdco 3 SA+		8.50			11/1/2022		250,000		386,724		370,393
Marlin Intermediate Holdings PLC MTN+		10.50			8/1/2020		500,000		831,901		817,076
Travelex Financing PLC+		6.58	^#		8/1/2018		700,000		1,121,871		1,026,780
Travelex Financing PLC+		8.00			8/1/2018		100,000		158,662		153,096

Total Finance							1,979,000		3,007,021		2,857,748


*Grocery — 0.1%:**
Premier Foods Finance PLC+		5.58	^#		3/16/2020		100,000		167,370		137,401

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Healthcare, Education and Childcare — 1.4%:**
Care UK Health & Social Care PLC+		5.58	^#%		7/15/2019		343,000		$519,392		$458,878
Prospect Medical Holdings, Inc.^		8.38			5/1/2019		435,000		459,464		452,400
Tenet Healthcare Corp.^		4.01	^#		6/15/2020		819,000		815,314		798,525
Unilabs Subholding AB+		7.25	^#		7/15/2018		400,000		549,951		430,570

Total Healthcare, Education and Childcare							1,997,000		2,344,121		2,140,373


*Hotels, Motels, Inns and Gaming — 0.1%:**
Gala Group Finance PLC+		8.88			9/1/2018		109,632		172,207		168,781


*Insurance — 0.0%:**
TIG Finco PLC+		8.50	^#		3/2/2020		46,609		68,336		70,463


*Leisure, Amusement, Entertainment — 0.4%:**
Odeon & UCI Finco PLC MTN+		9.00			8/1/2018		100,000		158,256		153,096
Vougeot Bidco PLC+		5.20	^#		7/15/2020		100,000		135,056		108,466
WMG Acquisition Corp.		6.25			1/15/2021		387,000		467,171		430,035

Total Leisure, Amusement, Entertainment							587,000		760,483		691,597


*Oil and Gas — 0.5%:**
Sabine Pass Liquefaction LLC^		5.63			3/1/2025		495,000		495,000		418,894
Shelf Drilling Holdings Ltd.+^		8.63			11/1/2018		438,000		370,423		317,550

Total Oil and Gas							933,000		865,423		736,444


*Personal Transportation — 0.1%:**
AA Bond Co. Ltd.+		5.50			7/31/2043		150,000		223,140		209,797


*Personal, Food and Miscellaneous — 0.5%:**
Brakes Capital+		7.13			12/15/2018		300,000		513,314		453,316
Brakes Capital MTN+		4.87	^#		12/15/2018		100,000		136,645		108,675
Financiere Quick SAS+		4.70	^#		4/15/2019		200,000		275,642		180,427

Total Personal, Food and Miscellaneous							600,000		925,601		742,418


*Retail Stores — 1.0%:**
Boing Group Financing PLC MTN+		6.63			7/15/2019		350,000		396,843		355,639
Brighthouse Group PLC MTN+		7.88			5/15/2018		150,000		242,855		211,992
HD Supply, Inc.^		5.25			12/15/2021		400,000		409,666		408,000
House of Fraser Funding PLC+		6.34	^#		9/15/2020		300,000		463,966		445,577
HSS Financing PLC+		6.75			8/1/2019		68,000		112,557		99,243
Takko Luxembourg 2 S.C.A. MTN+		9.88			4/15/2019		100,000		132,739		57,819

Total Retail Stores							1,368,000		1,758,626		1,578,270


*Telecommunications — 0.7%:**
Numericable-SFR+		5.38			5/15/2022		100,000		138,295		110,848
Numericable-SFR SAS+		5.63			5/15/2024		100,000		138,165		109,898
Numericable-SFR SAS+^		6.00			5/15/2022		646,000		645,280		626,620

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

Telecommunications (Continued)
Wind Acquisition Finance SA+		4.13	^#%		7/15/2020		150,000		$159,292		$161,545

Total Telecommunications							996,000		1,081,032		1,008,911

Total Corporate Bonds							13,911,241		17,026,165		15,251,078

Total Fixed Income							150,254,777		158,039,980		144,044,230

*Short-Term Investments — 9.7%:**

*Bank Deposit — 9.6%:**
State Street Bank & Trust Co. Euro Time Deposit		0.01			1/4/2016		14,835,559		14,835,559		14,835,559


*Bank Loans — 0.1%§:**

*Mining, Steel, Iron and Non-Precious Metals — 0.1%:**
Boomerang Tube LLC¤		11.61			1/8/2016		78,780		78,713		78,780

Total Short-Term Investments							14,914,339		14,914,272		14,914,339


Total Investments							165,169,116		172,954,252		158,958,569


Other assets and liabilities — (2.8%)*											(4,327,373	)

Net Assets — 100.0%											$154,631,196

MTN	– Medium Term Note

PIK	– Payment-in-kind

‡‡	Unless otherwise indicated, all principal amounts are denominated in United States Dollars.

*	Calculated as a percentage of net assets applicable to common shareholders.

+	Foreign security.

Distributions of investments by country of risk (excluding temporary cash investments) as a percentage of total investments in securities, is as follows:


		United States			64.5%
		United Kingdom			14.6%
		Germany			9.3%
		France			3.2%
		Canada			2.7%
		Netherlands			1.5%
		Ireland			1.1%
		Other (Individually less than 1%)			3.1%

		Total			100.0%

^	Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers.

See accompanying Notes to Financial Statements.

Babson Global Floating Rate Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Bank loans are exempt from registration under the Securities Act of 1933, as amended, but contain certain restrictions on resale and cannot be sold publicly. These loans pay interest at rates which adjust periodically. The interest rates shown for bank loans are the current interest rates at December 31, 2015. Bank loans are also subject to mandatory and/or optional prepayment which cannot be predicted. As a result, the remaining maturity may be substantially less than the stated maturity shown.

¤	For fair value measurement disclosure purposes, security is categorized as Level 3 (See Note 2).

††	Illiquid security.

~	Defaulted security.

#	Variable rate security. The interest rate shown is the rate in effect at December 31, 2015.

A	summary of outstanding derivatives at December 31, 2015 is as follows:

Forward Foreign Currency Exchange Contracts to Buy


EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
1/14/16	Morgan Stanley & Co.		EUR	435,556		434,801		400,000	$	(755	)
1/14/16	Morgan Stanley & Co.		EUR	931,356		934,822		860,000		3,466

Net unrealized appreciation on forward foreign exchange contracts to buy									$	2,711

Forward Foreign Currency Exchange Contracts to Sell


EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
1/14/16	Morgan Stanley & Co.		EUR	17,281,833		18,785,392		18,774,190	$	(11,202	)
1/14/16	Morgan Stanley & Co.		EUR	40,000		43,480		43,841		362
1/14/16	Morgan Stanley & Co.		GBP	11,819,807		17,425,213		17,815,788		390,575

Net unrealized appreciation on forward foreign exchange contracts to sell									$	379,735

Currency Legend


EUR	–	Euro
GBP	–	British Pound Sterling

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED)

December 31, 2015


						SHARES		COST		FAIR VALUE
*Common Stocks — 0.5%:**

Maxeda DIY B.V.+¤							18,859,871		$373,738		$409,919
Maxeda DIY B.V.+¤							10,446		–		–

Total Common Stocks							18,870,317		373,738		409,919


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Fixed Income — 91.7%:**

*Asset-Backed Securities — 17.7%:**

*CDO/CLO — 17.7%:**
Apidos CLO XII 2013-12A F^		5.19	^#%		4/15/2025		500,000		450,051		341,048
Apidos CLO XV 2013-15A E^		5.79	^#		10/20/2025		500,000		463,822		346,303
Apidos CLO XVI 2013-16A D^		4.79	^#		1/19/2025		500,000		440,407		379,303
Atlas Senior Loan Fund VI Ltd. 2014-6A E^		5.49	^#		10/15/2026		800,000		733,286		643,639
Avery Point IV CLO Ltd. 2014-1A E^		4.90	^#		4/25/2026		500,000		462,506		364,314
BlueMountain CLO Ltd. 2014-1A^		Zero Coupon			4/30/2026		250,000		239,303		155,262
Cairn CLO B.V. 2013-3A E+^		4.61	^#		10/20/2028		1,000,000		1,023,096		983,381
Carlyle Global Market Strategies CLO Ltd. 2013-3A D^		4.89	^#		7/15/2025		500,000		459,254		395,765
Carlyle Global Market Strategies CLO Ltd. 2013-4A E^		4.79	^#		10/15/2025		500,000		464,335		408,854
Carlyle Global Market Strategies CLO Ltd. 2013-4A F^		5.49	^#		10/15/2025		500,000		456,814		359,517
Carlyle Global Market Strategies CLO Ltd. 2014-1A E^		4.74	^#		4/17/2025		1,000,000		889,157		787,776
Carlyle Global Market Strategies CLO Ltd. 2014-5A D^		5.92	^#		10/16/2025		500,000		454,020		404,341
Dryden 41 Senior Loan Fund 2015-41A E^		5.64	^#		1/15/2028		500,000		465,321		438,347
Dryden XXXI Senior Loan Fund 2014-31A E^		4.54	^#		4/18/2026		1,000,000		894,975		715,269
Dryden XXXI Senior Loan Fund 2014-31A F^		5.64	^#		4/18/2026		500,000		462,563		328,441
Eaton Vance CLO Ltd. 2013-1A D^		5.31	^#		11/13/2024		500,000		466,593		389,343
GoldenTree Loan Opportunities VII Ltd. 2013-7A F^		5.55	^#		4/25/2025		500,000		468,083		358,488
LCM XIII LP 13A E^		5.14	^#		1/19/2023		750,000		705,326		629,031
LCM XV LP 15A E1^		4.78	^#		8/25/2024		500,000		468,532		388,602
LCM XVII LP 17A E^		5.04	^#		10/15/2026		1,000,000		899,789		799,431
Madison Park Funding XIII Ltd. 2014-13A^		Zero Coupon			1/19/2025		500,000		389,334		321,010
Newhaven CLO 1A E+^		5.20	^#		11/15/2028		500,000		619,893		511,180
Oak Hill Credit Partners X Ltd. 2014-10A^		Zero Coupon			7/20/2026		500,000		451,316		247,352
OHA Credit Partners IX Ltd. 2013-9A E^		5.29	^#		10/20/2025		500,000		469,365		407,586
Pinnacle Park CLO Ltd. 2014-1A E^		5.24	^#		4/15/2026		500,000		470,803		408,080
Seneca Park CLO Ltd. 2014-1A E^		4.99	^#		7/17/2026		1,020,000		930,570		756,000
Silver Spring CLO Ltd. 2014-1A E^		5.19	^#		10/15/2026		1,000,000		907,810		640,821
Tryon Park CLO Ltd. 2013-1A D^		4.69	^#		7/15/2025		500,000		465,057		393,416
Voya CLO Ltd. 2013-2A E^		5.80	^#		4/25/2025		500,000		467,655		336,549

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Asset-Backed Securities (Continued)

CDO/CLO (Continued)
Voya CLO Ltd. 2013-3A D^		4.79	^#%		1/18/2026		750,000		$678,272		$586,012
Voya CLO Ltd. 2014-3A D^		5.30	^#		7/25/2026		500,000		458,520		352,551

Total CDO/CLO							19,070,000		17,675,828		14,577,012


Total Asset-Backed Securities							19,070,000		17,675,828		14,577,012


*Bank Loans — 22.7%§:**

*Aerospace and Defense — 0.7%:**
Swissport Investments SA+		6.25			11/30/2021		500,000		531,027		542,359


*Automobile — 0.9%:**
RAC Finance (Holdings) Ltd.+		8.25			12/17/2022		500,000		791,805		737,409


*Beverage, Food and Tobacco — 0.9%:**
Deoleo SA+		4.50			6/11/2021		500,000		552,905		474,399
Telepizza SA+		7.00			10/20/2020		250,000		315,638		270,783

Total Beverage, Food and Tobacco							750,000		868,543		745,182


*Broadcasting and Entertainment — 0.8%:**
All3Media International+		5.25			6/30/2021		500,000		834,327		669,840


*Buildings and Real Estate — 1.0%:**
Alison Bidco Sarl+		5.50			8/29/2021		146,770		145,579		143,468
Builders FirstSource, Inc.		6.00			7/31/2022		718,887		717,050		709,901

Total Buildings and Real Estate							865,657		862,629		853,369


*Cargo Transport — 0.9%:**
Direct ChassisLink, Inc.¤		8.25			11/12/2019		490,476		485,686		473,309
Direct ChassisLink, Inc. (Add-On Facility)¤		8.25			10/31/2019		250,317		250,316		241,556

Total Cargo Transport							740,793		736,002		714,865


*Chemicals, Plastics and Rubber — 1.6%:**
MacDermid, Inc.		5.50			6/7/2020		467,216		457,997		452,382
Methanol Holdings (Trinidad) Ltd.		4.25			6/30/2022		350,728		347,463		322,670
Styrolution Group GmbH+		6.50			11/7/2019		495,000		610,291		538,167

Total Chemicals, Plastics and Rubber							1,312,944		1,415,751		1,313,219


*Containers, Packaging and Glass — 0.6%:**
Consolidated Container Co. LLC		7.75			1/3/2020		94,140		92,772		80,019
Prolampac Intermediate, Inc.		9.25			8/18/2023		500,000		490,436		447,500

Total Containers, Packaging and Glass							594,140		583,208		527,519


*Diversified/Conglomerate Manufacturing — 0.9%:**
Quality Home Brands Holdings LLC		7.75			5/25/2018		129,200		128,490		129,093
Triple Point Technology, Inc.		5.25			7/10/2020		339,095		316,511		244,148

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)

Diversified/Conglomerate Manufacturing (Continued)
Triple Point Technology, Inc.††		9.25	%		7/10/2021		50,845		$47,632		$30,507
West Corp.		2.86			7/1/2019		366,003		356,019		351,363

Total Diversified/Conglomerate Manufacturing							885,143		848,652		755,111


*Diversified/Conglomerate Service — 2.7%:**
Aquilex Holdings LLC		5.00			12/31/2020		98,070		97,893		93,166
Atrium Innovations, Inc.+		4.25			2/13/2021		461,701		460,426		424,765
MH Sub I LLC		4.75			7/8/2021		181,630		180,804		175,424
MH Sub I LLC		8.50			7/8/2022		650,000		646,420		613,165
Power Team Services LLC		8.25			11/6/2020		300,000		298,927		284,250
RP Crown Parent LLC		6.00			12/21/2018		545,420		546,814		483,084
RP Crown Parent LLC		11.25			12/20/2019		178,571		182,506		145,237

Total Diversified/Conglomerate Service							2,415,392		2,413,790		2,219,091


*Ecological — 0.2%:**
Emerald 3 Ltd.+		8.00			5/31/2022		196,488		194,877		184,699


*Electronics — 0.6%:**
Microsemi Corp.		5.11			12/2/2022		500,000		490,625		490,250


*Finance — 1.0%:**
Moneygram International, Inc.		4.25			3/27/2020		635,899		603,682		579,195
Sedgwick Claims Management Services, Inc.		3.75			3/1/2021		293,425		292,883		280,955

Total Finance							929,324		896,565		860,150


*Healthcare, Education and Childcare — 1.2%:**
Synarc-Biocore Holdings LLC		5.50			3/10/2021		393,865		390,932		366,295
Synarc-Biocore Holdings LLC		9.25			3/10/2022		500,000		496,114		456,250
Tecomet, Inc.		5.75			12/5/2021		207,758		202,416		185,943

Total Healthcare, Education and Childcare							1,101,623		1,089,462		1,008,488


*Hotels, Motels, Inns and Gaming — 0.9%:**
Compass Holdco 2 Ltd.+		5.86			10/31/2022		500,000		754,716		729,729


*Leisure, Amusement, Entertainment — 1.0%:**
AP NMT Acquisition B.V.+		7.00			8/13/2021		401,254		488,602		426,905
AP NMT Acquisition B.V.+		10.00			8/13/2022		300,000		280,013		241,500
Delta 2 (Lux) Sarl+		7.75			7/31/2022		125,000		124,597		114,937

Total Leisure, Amusement, Entertainment							826,254		893,212		783,342


*Machinery Non-Agriculture, Non-Construction, Non-Electronic — 0.5%:**
Gardner Denver, Inc.		4.25			7/30/2020		469,575		453,809		421,326


*Mining, Steel, Iron and Non-Precious Metals — 0.7%:**
Arch Coal, Inc.		6.25			5/16/2018		738,546		731,296		325,167
Boomerang Tube LLC††~		11.00			10/11/2017		249,123		245,042		107,746

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Bank Loans (Continued)

Mining, Steel, Iron and Non-Precious Metals (Continued)
Murray Energy Corp.		7.50	%		4/16/2020		198,827		$193,680		$126,042

Total Mining, Steel, Iron and Non-Precious Metals							1,186,496		1,170,018		558,955


*Oil and Gas — 1.5%:**
American Energy — Marcellus LLC		8.50			8/4/2021		60,368		59,643		1,107
Caelus Energy Alaska O3 LLC		8.75			4/15/2020		846,154		764,907		444,231
Drillships Ocean Ventures, Inc.		5.50	��		7/25/2021		126,025		125,018		58,916
Fieldwood Energy LLC		8.38			9/30/2020		1,885,340		1,140,716		282,801
Floatel International Ltd.		6.00			6/27/2020		202,205		200,671		88,566
Jonah Energy LLC		7.50			5/12/2021		173,566		171,567		107,611
Paragon Offshore Finance Co.		3.75			7/18/2021		479,874		381,722		121,408
Seadrill Partners Finco LLC		4.00			2/21/2021		128,363		104,228		53,056
Southcross Holdings Borrower LP		6.00			8/4/2021		72,611		72,319		39,694

Total Oil and Gas							3,974,506		3,020,791		1,197,390


*Printing and Publishing — 3.2%:**
Cengage Learning Acquisitions, Inc.		7.00			3/31/2020		651,578		651,772		633,660
Eden Bidco Ltd.+		6.00			4/28/2022		497,500		521,588		537,279
Springer Science+Business Media Deutschland GmbH+		9.00			8/14/2021		1,300,000		1,499,186		1,441,030

Total Printing and Publishing							2,449,078		2,672,546		2,611,969


*Retail Stores — 0.9%:**
Bass Pro Group LLC		4.00			6/5/2020		178,458		178,060		171,468
Maxeda DIY B.V.+		7.00			6/28/2019		583,334		602,600		526,396

Total Retail Stores							761,792		780,660		697,864

Total Bank Loans							21,959,205		22,303,015		18,622,126


*Corporate Bonds — 51.3%:**

*Aerospace and Defense — 1.4%:**
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust		4.63			10/30/2020		332,000		332,000		339,885
CPI International, Inc.		8.75			2/15/2018		814,000		827,092		801,790

Total Aerospace and Defense							1,146,000		1,159,092		1,141,675


*Automobile — 3.7%:**
Allied Specialty Vehicles, Inc.^		8.50			11/1/2019		1,000,000		1,025,165		1,015,000
Gates Global LLC/Gates Global Co.^		6.00			7/15/2022		1,000,000		762,677		720,000
International Automotive Components Group SA^		9.13			6/1/2018		940,000		960,115		803,700
JB Poindexter & Co., Inc.^		9.00			4/1/2022		500,000		522,856		522,500

Total Automobile							3,440,000		3,270,813		3,061,200

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Banking — 0.3%:**
Lock AS+		7.00	%		8/15/2021		250,000		$335,562		$283,126


*Beverage, Food and Tobacco — 0.8%:**
Boparan Finance PLC+		5.50			7/15/2021		300,000		421,508		391,400
Pizzaexpress Financing 2 PLC+		6.63			8/1/2021		150,000		254,595		226,266

Total Beverage, Food and Tobacco							450,000		676,103		617,666


*Broadcasting and Entertainment — 3.0%:**
Entertainment One Ltd.+		6.88			12/15/2022		200,000		302,461		293,513
Gray Television, Inc.		7.50			10/1/2020		600,000		615,878		616,500
Harron Communications LP/Harron Finance Corp.^		9.13			4/1/2020		500,000		537,361		528,750
RCN Telecom Services LLC/RCN Capital Corp.^		8.50			8/15/2020		775,000		777,682		782,750
Unitymedia GmbH+		3.75			1/15/2027		300,000		335,460		279,730

Total Broadcasting and Entertainment							2,375,000		2,568,842		2,501,243


*Buildings and Real Estate — 2.3%:**
Cemex Finance LLC+^		9.38			10/12/2022		800,000		872,403		842,000
Keystone Financing PLC+		9.50			10/15/2019		350,000		564,053		536,609
Paroc Group Oy+		6.25			5/15/2020		100,000		137,565		103,799
Paroc Group Oy MTN+		5.17	^#		5/15/2020		100,000		137,565		102,698
William Lyon Homes, Inc.^		7.00			8/15/2022		295,000		300,699		295,737

Total Buildings and Real Estate							1,645,000		2,012,285		1,880,843


*Cargo Transport — 2.5%:**
DH Services Luxembourg Sarl^		7.75			12/15/2020		200,000		204,828		201,000
Moto Finance PLC+		6.38			9/1/2020		200,000		300,787		302,801
OPE KAG Finance Sub, Inc.^		7.88			7/31/2023		1,367,000		1,367,000		1,358,456
WFS Global Holding SAS+		9.50			7/15/2022		150,000		170,153		170,697

Total Cargo Transport							1,917,000		2,042,768		2,032,954


*Chemicals, Plastics and Rubber — 4.1%:**
Consolidated Energy Finance SA+^		6.75			10/15/2019		1,000,000		993,589		955,950
Huntsman International LLC		4.25			4/1/2025		300,000		276,719		264,080
Ineos Finance PLC+		4.00			5/1/2023		200,000		216,510		207,569
OMNOVA Solutions, Inc.		7.88			11/1/2018		723,000		734,977		708,540
Pinnacle Operating Corp.^		9.00			11/15/2020		600,000		614,493		564,000
PSPC Escrow Corp.		6.00			2/1/2023		250,000		241,296		232,293
TPC Group, Inc.^		8.75			12/15/2020		291,000		243,740		189,150
Trinseo Materials Operating SCA/Trinseo Materials Finance, Inc.		6.38			5/1/2022		200,000		219,361		215,720

Total Chemicals, Plastics and Rubber							3,564,000		3,540,685		3,337,302


*Containers, Packaging and Glass — 2.7%:**
Coveris Holdings SA^		7.88			11/1/2019		900,000		902,801		785,250

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

Containers, Packaging and Glass (Continued)
Horizon Holdings III SASU+		5.13	%		8/1/2022		100,000		$109,775		$111,957
Innovia Group Finance PLC+		4.87	^#		3/31/2020		100,000		136,140		108,131
Mustang Merger Corp.^		8.50			8/15/2021		750,000		746,365		778,125
SIG Combibloc Holdings SCA+		7.75			2/15/2023		400,000		459,340		453,175

Total Containers, Packaging and Glass							2,250,000		2,354,421		2,236,638


*Diversified Natural Resources, Precious Metals and Minerals — 0.1%:**
Cemex SAB de CV+		4.38			3/5/2023		100,000		111,980		98,079


*Diversified/Conglomerate Manufacturing — 2.7%:**
Appvion, Inc.^		9.00			6/1/2020		500,000		511,847		198,750
CTP Transportation Products LLC/CTP Finance, Inc.^		8.25			12/15/2019		648,000		663,773		675,540
EnPro Industries, Inc.		5.88			9/15/2022		250,000		252,450		247,500
Galapagos SA+		5.38			6/15/2021		175,000		219,461		183,335
StoneMor Partners LP/Cornerstone Family Services of West Virginia Subsidiary		7.88			6/1/2021		500,000		516,722		515,000
West Corp.^		5.38			7/15/2022		500,000		475,904		431,250

Total Diversified/Conglomerate Manufacturing							2,573,000		2,640,157		2,251,375


*Diversified/Conglomerate Service — 2.2%:**
Carlson Travel Holdings, Inc. PIK^		7.50			8/15/2019		665,000		673,257		655,025
Verisure Holding AB+		6.00			11/1/2022		450,000		500,729		508,599
Zachry Holdings, Inc.^		7.50			2/1/2020		671,000		672,959		657,580

Total Diversified/Conglomerate Service							1,786,000		1,846,945		1,821,204


*Electronics — 1.2%:**
Audatex North America, Inc.^		6.13			11/1/2023		1,000,000		995,218		1,006,250


*Finance — 3.7%:**
Cabot Financial Luxembourg SA+		10.38			10/1/2019		100,000		172,342		157,622
First Data Corp.^		7.00			12/1/2023		800,000		800,000		800,000
Galaxy Finco Ltd.+		7.88			11/15/2021		100,000		165,314		147,420
Garfunkelux Holdco 3 SA+		7.50			8/1/2022		100,000		111,014		111,761
Garfunkelux Holdco 3 SA+		8.50			11/1/2022		650,000		1,007,117		963,021
National Financial Partners Corp.^		9.00			7/15/2021		279,000		277,715		255,285
TMF Group Holding B.V.+		9.88			12/1/2019		500,000		713,622		581,520

Total Finance							2,529,000		3,247,124		3,016,629


*Grocery — 0.3%:**
Premier Foods Finance PLC+		6.50			3/15/2021		200,000		339,057		280,098


*Healthcare, Education and Childcare — 5.3%:**
Alere, Inc.^		6.38			7/1/2023		490,000		490,000		458,150
Care UK Health & Social Care PLC+		5.58	^#		7/15/2019		100,000		153,114		133,784
Cerberus Nightingale 1 Sarl+		8.25			2/1/2020		550,000		629,680		613,325

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

Healthcare, Education and Childcare (Continued)
Cognita Financing PLC+		7.75	%		8/15/2021		350,000		$545,630		$532,522
ConvaTec Healthcare E SA^		10.50			12/15/2018		200,000		202,959		201,832
Ephios Bondco PLC+		6.25			7/1/2022		100,000		114,749		112,729
HomeVi SAS+		6.88			8/15/2021		250,000		334,500		286,195
Priory Group No. 3 PLC MTN+		8.88			2/15/2019		500,000		806,090		759,139
Sterigenics-Nordion Holdings LLC^		6.50			5/15/2023		800,000		796,097		760,000
Tenet Healthcare Corp.		6.75			6/15/2023		294,000		292,607		272,685
Unilabs Subholding AB+		8.50			7/15/2018		200,000		283,163		225,224

Total Healthcare, Education and Childcare							3,834,000		4,648,589		4,355,585


*Hotels, Motels, Inns and Gaming — 0.1%:**
Gala Electric Casinos PLC+		11.50			6/1/2019		63,636		111,576		99,441


*Insurance — 0.0%:**
TIG Finco PLC+		8.50	^#		3/2/2020		15,734		25,178		23,787


*Leisure, Amusement, Entertainment — 3.0%:**
Allegiant Travel Co.		5.50			7/15/2019		700,000		716,238		708,750
CPUK Finance Ltd.+		7.00			2/28/2042		150,000		234,082		226,105
Interval Acquisition Corp.^		5.63			4/15/2023		459,000		459,000		455,558
Odeon & UCI Finco PLC MTN+		9.00			8/1/2018		200,000		320,247		306,191
Perform Group Financing PLC+		8.50			11/15/2020		150,000		223,790		205,673
WMG Acquisition Corp.^		6.75			4/15/2022		600,000		567,871		519,000

Total Leisure, Amusement, Entertainment							2,259,000		2,521,228		2,421,277


*Machinery Non-Agriculture, Non-Construction, Non-Electronic — 1.0%:**
KraussMaffei Group GmbH MTN+		8.75			12/15/2020		80,000		114,792		93,243
Xerium Technologies, Inc.		8.88			6/15/2018		720,000		734,560		705,690

Total Machinery Non-Agriculture, Non-Construction, Non-Electronic							800,000		849,352		798,933


*Mining, Steel, Iron and Non-Precious Metals — 0.6%:**
Constellium NV		7.00			1/15/2023		600,000		641,795		526,204


*Oil and Gas — 3.3%:**
Calumet Specialty Products Partners LP/Calumet Finance Corp.		6.50			4/15/2021		500,000		500,000		435,000
Citgo Holding, Inc.^		10.75			2/15/2020		350,000		339,422		339,500
EP Energy LLC/Everest Acquisition Finance, Inc.		9.38			5/1/2020		350,000		272,445		223,125
Genesis Energy LP/Genesis Energy Finance Corp.		6.75			8/1/2022		500,000		479,282		425,000
Kosmos Energy Ltd.^		7.88			8/1/2021		571,000		529,340		459,655
Seventy Seven Energy, Inc.		6.50			7/15/2022		313,000		313,000		48,515
Shelf Drilling Holdings Ltd.+^		8.63			11/1/2018		439,000		371,268		318,275
Sunoco LP/Sunoco Finance Corp.^		5.50			8/1/2020		302,000		302,000		286,145

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

Oil and Gas (Continued)
Welltec A/S+^		8.00	%		2/1/2019		174,000		$148,631		$163,125

Total Oil and Gas							3,499,000		3,255,388		2,698,340


*Personal Transportation — 0.3%:**
AA Bond Co. Ltd.+		5.50			7/31/2043		150,000		223,140		209,797


*Personal, Food and Miscellaneous — 0.5%:**
TeamSystem Holding SpA+		7.38			5/15/2020		350,000		475,964		393,751


*Printing and Publishing — 1.2%:**
Cimpress NV^		7.00			4/1/2022		470,000		456,278		451,200
MHGE Parent LLC/MHGE Parent Finance, Inc.^		8.50			8/1/2019		500,000		509,057		495,000

Total Printing and Publishing							970,000		965,335		946,200


*Retail Stores — 2.9%:**
Boing Group Financing PLC MTN+		6.63			7/15/2019		200,000		272,200		203,222
Brighthouse Group PLC MTN+		7.88			5/15/2018		150,000		242,854		211,992
Dollar Tree, Inc.^		5.25			3/1/2020		50,000		51,268		51,625
Dollar Tree, Inc.^		5.75			3/1/2023		815,000		841,270		843,525
Douglas GmbH+		6.25			7/15/2022		550,000		614,378		627,000
House of Fraser Funding PLC+		6.34	^#		9/15/2020		150,000		231,983		222,789
HSS Financing PLC+		6.75			8/1/2019		68,000		112,557		99,243
Takko Luxembourg 2 S.C.A. MTN+		9.88			4/15/2019		200,000		259,404		115,639

Total Retail Stores							2,183,000		2,625,914		2,375,035


*Telecommunications — 2.1%:**
CCO Holdings LLC/CCO Holdings Capital Corp.^		5.88			5/1/2027		391,000		391,000		389,045
eircom Finance Ltd.MTN+		9.25			5/15/2020		100,000		146,771		116,771
Level 3 Financing, Inc.^		5.38			1/15/2024		182,000		182,000		182,910
Numericable-SFR SAS+		5.63			5/15/2024		100,000		138,165		109,898
Numericable-SFR SAS+^		6.00			5/15/2022		315,000		315,000		305,550
T-Mobile USA, Inc.		6.50			1/15/2026		294,000		294,000		296,790
Wind Acquisition Finance SA+		3.95	^#		7/15/2020		100,000		135,965		107,860
Wind Acquisition Finance SA+		4.00			7/15/2020		200,000		243,319		216,263

Total Telecommunications							1,682,000		1,846,220		1,725,087

Total Corporate Bonds							41,631,370		45,330,731		42,139,719

Total Fixed Income							82,660,575		85,309,574		75,338,857

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	STRIKE PRICE			EXPIRATION DATE		NOTIONAL		COST		FAIR VALUE
*Purchased Option — 0.5%:**

*Put Option Purchased — 0.5%:**
OTC – BCM Swaption with Citibank		$98.00			3/16/2016		40,000,000		$1,348,000		$406,452


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Short-Term Investments — 7.7%:**

*Bank Deposit — 7.6%:**
State Street Bank & Trust Co. Euro Time Deposit		0.01	%		1/4/2016		6,222,562		6,222,562		6,222,562


*Bank Loan — 0.1%§:**

*Mining, Steel, Iron and Non-Precious Metals — 0.1%:**
Boomerang Tube LLC¤		11.61			1/8/2016		78,780		78,713		78,780

Total Short-Term Investments							6,301,342		6,301,275		6,301,342

Total Investments							147,832,234		93,332,587		82,456,570


Other assets and liabilities — (0.4%)*											(311,184	)

Net Assets — 100.0%											$82,145,386


MTN		Medium Term Note
OTC		Over the Counter
PIK		Payment-in-kind

‡‡	Unless otherwise indicated, all principal amounts are denominated in United States Dollars.

*	Calculated as a percentage of net assets applicable to common shareholders.

+	Foreign security.

Distributions of investments by country of risk (excluding temporary cash investments) as a percentage of total investments in securities, is as follows:


		United States			66.6%
		United Kingdom			11.5%
		Germany			5.9%
		Netherlands			4.2%
		France			2.1%
		Switzerland			1.6%
		Trinidad And Tobago			1.3%
		Mexico			1.2%
		Spain			1.0%
		Sweden			1.0%
		Other (Individually less than 1%)			3.6%

		Total			100.0%

^	Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers.

See accompanying Notes to Financial Statements.

Babson Global Credit Income Opportunities Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

¤	For fair value measurement disclosure purposes, security is categorized as Level 3 (See Note 2).

††	Illiquid security.

~	Defaulted security.

#	Variable rate security. The interest rate shown is the rate in effect at December 31, 2015.

A summary of outstanding derivatives at December 31, 2015 is as follows:

Forward Foreign Currency Exchange Contracts to Buy

EXPIRATION
DATE

COUNTERPARTY

LOCAL
CURRENCY

VALUE IN USD

IN
EXCHANGE
FOR USD

NET UNREALIZED
APPRECIATION

1/14/16

Morgan Stanley

EUR

380,000

413,061

412,044

1,017

Forward Foreign Currency Exchange Contracts to Sell


EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
1/14/16	Morgan Stanley		EUR	13,053,445		14,189,124		14,180,663	$	(8,461	)
1/14/16	Morgan Stanley		GBP	5,929,460		8,741,438		8,937,635		196,197

Net unrealized appreciation on forward foreign exchange contracts to sell									$	187,736

Currency Legend


EUR	–	Euro
GBP	–	British Pound Sterling

Written Options


TYPE OF CONTRACT	EXPIRATION DATE	STRIKE PRICE		COUNTERPARTY	NUMBER OF CONTRACTS/ NOTIONAL AMOUNTS		PREMIUMS RECEIVED		VALUE AT DECEMBER 31, 2015
Put – OTC – BMC Swaption	3/16/16	$	95.00	Citibank		40,000,000	$	972,000	$	(207,921	)

See accompanying Notes to Financial Statements.

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED)

December 31, 2015


	DIVIDEND RATE					SHARES		COST		FAIR VALUE
*Convertible Preferred Stock — 0.0%:**
Southwestern Energy Co.		6.25	%				900		$38,772		$16,695

	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Fixed Income — 96.4%:**

*Asset-Backed Securities — 19.4%:**

*CDO/CLO — 3.7%:**
ALM XIV Ltd. 2014-14A A1^		1.72	^#		7/28/2026		500,000		498,781		494,677
Atlas Senior Loan Fund V Ltd. 2014-1A A^		1.84	^#		7/16/2026		500,000		499,613		496,266
BlueMountain CLO Ltd. 2015-2A A1^		1.71			7/18/2027		250,000		246,281		246,584
Carlyle Global Market Strategies CLO Ltd. 2014-1A A^		1.81	^#		4/17/2025		500,000		500,000		497,610
Carlyle Global Market Strategies CLO Ltd. 2014-4A A1^		1.79	^#		10/15/2026		250,000		250,000		248,306
Galaxy XX CLO Ltd. 2015-20A A^		1.73	^#		7/20/2027		250,000		246,779		248,787
Madison Park Funding XII Ltd. 2014-12A A^		1.79	^#		7/20/2026		250,000		248,267		248,022
Madison Park Funding XIV Ltd. 2014-14A A2^		1.74	^#		7/20/2026		250,000		249,847		247,420
Seneca Park CLO Ltd. 2014-1A A^		1.77	^#		7/17/2026		360,000		358,440		357,916
Symphony CLO XV Ltd. 2014-15A A^		1.77	^#		10/17/2026		250,000		247,996		247,872

Total CDO/CLO							3,360,000		3,346,004		3,333,460


*Other Asset-Backed Securities — 15.7%:**
321 Henderson Receivables II LLC 2006-3A A1^		0.53	^#		9/15/2041		261,709		251,705		250,429
Access Group, Inc. 2015-1 A^		1.12	^#		7/25/2056		211,428		206,708		205,264
Access Group, Inc. 2015-1 B^		1.92	^#		7/25/2058		100,000		86,137		84,849
American Credit Acceptance Receivables Trust 2015-3 A^		1.95			9/12/2019		143,594		143,585		143,161
Arbys Funding LLC 2015-1A A2^		4.97			10/30/2045		80,000		80,000		79,992
Avis Budget Rental Car Funding AESOP LLC 2010-5A A^		3.15			3/20/2017		167,500		168,747		167,922
BlueVirgo Trust 2015-1A^		3.00			12/15/2022		429,245		427,349		426,485
California Republic Auto Receivables Trust 2015-4 A4^		2.58			6/15/2021		180,000		179,983		179,983
Capital Automotive REIT 2010-1A A^		5.73			12/15/2038		92,461		96,265		96,536
CarFinance Capital Auto Trust 2014-2^		1.44			11/16/2020		272,392		269,794		269,403
Citi Held For Asset Issuance 2015-PM1 A^		1.85			12/15/2021		67,264		67,263		67,131
Citi Held For Asset Issuance 2015-PM2 A^		2.35			3/15/2022		87,105		87,099		86,841
Citi Held For Asset Issuance 2015-PM3 A		2.60			5/16/2022		100,000		99,984		99,906
CKE Restaurant Holdings, Inc. 2013-1A A2^		4.47			3/20/2043		220,512		225,874		219,252
CLI Funding V LLC 2013-1A^		2.83			3/18/2028		72,500		72,126		69,890
CLI Funding V LLC 2014-1A A^		3.29			6/18/2029		210,620		204,219		203,658
College Loan Corp. Trust I 2005-2 B		0.81	^#		1/15/2037		253,451		221,258		219,623
CPS Auto Receivables Trust 2011-C A^		4.21			3/15/2019		88,566		89,639		88,926
CPS Auto Receivables Trust 2012-A A^		2.78			6/17/2019		138,656		139,569		139,088
CPS Auto Receivables Trust 2013-A A^		1.31			6/15/2020		223,631		222,726		221,371
CPS Auto Receivables Trust 2014-D A^		1.49			4/15/2019		276,183		274,737		274,426

See accompanying Notes to Financial Statements.

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Asset-Backed Securities (Continued)

Other Asset-Backed Securities (Continued)
CPS Auto Receivables Trust 2015-C A^		1.77	%		6/17/2019		89,462		$89,455		$89,258
CPS Auto Receivables Trust 2015-C B^		2.55			2/18/2020		100,000		99,983		99,488
DB Master Finance LLC 2015-1A A2I^		3.26			2/20/2045		203,462		203,525		201,324
Diamond Resorts Owner Trust 2015-1 A^		2.73			7/20/2027		74,574		74,567		74,433
Diamond Resorts Owner Trust 2015-2 B^		3.54			5/22/2028		115,055		115,049		115,049
Domino’s Pizza Master Issuer LLC 2015 1A-A2I^		3.48			10/25/2045		240,000		237,754		235,200
DRB Prime Student Loan Trust 2015-B A3^		2.54			4/27/2026		92,500		92,490		91,899
DRB Prime Student Loan Trust 2015-D A1^		1.90	^#		1/25/2040		300,000		293,458		293,445
Drive Auto Receivables Trust 2015-CA A3^		1.38			10/15/2018		225,000		224,993		224,491
Drug Royalty LP 1 2012-1 A1^		5.57	^#		7/15/2024		132,000		135,328		134,937
DT Auto Owner Trust 2015-3A A^		1.66			3/15/2019		86,173		86,167		85,941
Education Funding Capital Trust IV 2004-1 A5		1.45	^#		6/15/2043		50,000		47,016		47,514
Elara HGV Timeshare Issuer LLC 2014-A B^		3.02			2/25/2027		61,838		61,274		61,187
Element Rail Leasing II LLC 2015-1A A1^		2.71			2/19/2045		487,271		484,713		483,292
Entegry New Orleans Storm Recovery Funding I LLC 2015-1 A		2.67			6/1/2027		180,000		179,957		183,634
Exeter Automobile Receivables Trust 2015-3^		2.00			3/16/2020		81,869		81,863		81,586
First Investors Auto Owner Trust 2015-2A A1^		1.59			12/16/2019		51,279		51,278		51,146
Flagship Credit Auto Trust 2013-1^		1.32			4/16/2018		35,405		35,377		35,366
Flagship Credit Auto Trust 2014-1^		1.21			4/15/2019		255,460		254,747		254,247
Flagship Credit Auto Trust 2015-2 A^		1.98			10/15/2020		122,687		122,675		122,158
Flagship Credit Auto Trust 2015-3^		2.38			10/15/2020		156,265		156,265		155,314
FNA 2015-1 Trust^		3.24			12/10/2023		289,076		289,064		288,260
FRS I LLC 2013-1A A1^		1.80			4/15/2043		55,069		54,491		54,000
Global Container Assets 2013-1 Ltd.^		2.20			11/5/2028		204,073		203,844		203,546
Global SC Finance II SRL 2014-1A A1+^		3.19			7/17/2029		266,083		266,023		256,693
Goal Capital Funding Trust 2007-1 C1		1.00	^#		6/25/2042		524,043		514,218		516,316
Goal Structured Solution Trust 2015-1 B^		1.92	^#		9/25/2043		100,000		75,313		85,418
Green Tree Agency Advance Funding Trust I 2015-T2 AT2^		3.09			10/15/2048		100,000		100,000		98,934
GSAMP Trust 2005-SEA2 A1^		0.57	^#		1/25/2045		94,433		90,662		92,077
LCM XVI LP 16A A^		1.79	^#		7/15/2026		250,000		250,000		248,885
Miramax LLC 2014-1A A2^		3.34			7/20/2026		77,480		78,026		76,922
MVW Owner Trust 2013-1A A^		2.15			4/22/2030		278,348		274,543		273,664
MVW Owner Trust 2015-1A A^		2.52			12/20/2032		91,816		91,810		91,587
National Collegiate Student Loan Trust 2006-3		0.57	^#		10/25/2027		59,765		59,094		59,198
Navient Private Education Loan Trust 2015-BA A1^		0.93	^#		5/15/2023		50,044		49,981		49,981
Nelnet Student Loan Trust 2008-3 A4		2.04	^#		11/25/2024		225,000		229,461		226,444
Nextgear Floorplan Master Owner Trust 2015-2A A^		2.38			10/15/2020		100,000		99,991		99,039
NRZ Advance Receivables Trust 2015-T3 AT3^		2.54			11/15/2046		430,000		430,000		429,301
Ocwen Master Advance Receivables Trust 2015-T1 AT1^		2.54			9/17/2046		100,000		100,000		99,913
Ocwen Master Advance Receivables Trust 2015-T2 AT2^		2.53			11/15/2046		100,000		100,000		99,990

See accompanying Notes to Financial Statements.

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Asset-Backed Securities (Continued)

Other Asset-Backed Securities (Continued)
OneMain Financial Issuance Trust 2014-2A A^		2.47	%		9/18/2024		230,000		$230,823		$229,547
PHEAA Student Loan Trust 2003-1 A3		1.00	^#		7/25/2042		100,000		$99,938		$99,776
Popular ABS Mortgage Pass-Through Trust 2006-B A3		0.50	^#		5/25/2036		157,685		151,073		152,279
Santander Drive Auto Receivables Trust 2014-4 B		1.82			5/15/2019		260,000		261,148		260,233
Sierra Timeshare 2015-3 Receivables Funding LLC 2015 3A B^		3.08			9/20/2032		91,772		91,772		91,771
Sierra Timeshare 2015-3 Receivables Funding LLC 2015-3A A^		2.58			9/20/2032		91,772		91,754		91,754
Sierra Timeshare Receivables Funding LLC 2015-2A B^		3.02			6/20/2032		75,408		75,392		74,319
Sierra Timeshare Receivables Funding LLC 2014-1A A^		2.07			3/20/2030		177,858		176,719		176,387
SLC Private Student Loan Trust 2006-A A5		0.49	^#		7/15/2036		358,105		355,969		354,922
SLC Private Student Loan Trust 2006-A C		0.77	^#		7/15/2036		250,000		221,449		218,673
SLC Student Loan Trust 2005-1 B		0.56	^#		2/15/2045		222,929		190,047		186,119
SLM Student Loan Trust 2003-14 A6		0.62	^#		7/25/2025		40,000		38,311		38,436
SLM Student Loan Trust 2003-4 B		1.16	^#		6/15/2038		155,379		141,815		137,406
SLM Student Loan Trust 2005-4 B		0.50	^#		7/25/2040		485,490		401,379		408,353
SLM Student Loan Trust 2006-1 A5		0.43	^#		7/26/2021		100,000		96,483		97,813
SLM Student Loan Trust 2006-9 A5		0.42	^#		1/26/2026		150,000		145,716		145,279
SLM Student Loan Trust 2008-5 A4		2.02	^#		7/25/2023		100,000		101,186		100,590
SLM Student Loan Trust 2012-5 A2		0.72	^#		6/25/2019		121,860		121,039		120,610
SoFi Professional Loan Program 2015-C LLC^		2.51			8/25/2033		91,418		90,925		90,317
Sonic Capital LLC 2011-1A A2^		5.44			5/20/2041		215,390		226,065		219,795
SpringCastle America Funding LLC 2014-AA A^		2.70			5/25/2023		257,510		258,035		256,941
SPS Servicer Advance Receivable^		2.92			7/15/2047		100,000		99,991		99,908
TAL Advantage I LLC 2006-1A^		0.59	^#		4/20/2021		90,000		89,608		89,821
Trinity Rail Leasing LP 2012-1A A1^		2.27			1/15/2043		79,276		76,834		77,256
Westgate Resorts LLC 2015-2A A^		3.20			7/20/2028		417,550		417,000		416,112

Total Other Asset-Backed Securities							14,631,749		14,349,693		14,299,630

Total Asset-Backed Securities							17,991,749		17,695,697		17,633,090

*Convertible Bonds — 0.2%:**

*Oil and Gas — 0.1%:**
Whiting Petroleum Corp.^		1.25			4/1/2020		80,000		79,765		54,400


*Retail — 0.0%:**
GNC Holdings, Inc.^		1.50			8/15/2020		10,000		10,000		8,006


*Semiconductors — 0.1%:**
Micron Technology, Inc.		3.00			11/15/2043		135,000		124,847		112,219

Total Convertible Bonds							225,000		214,612		174,625

See accompanying Notes to Financial Statements.

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Corporate Bonds — 36.0%:**

*Aerospace/Defense — 0.4%:**
Harris Corp.		2.00	%		4/27/2018		250,000		$251,043		$247,192
Harris Corp.		2.70			4/27/2020		170,000		166,565		166,781

Total Aerospace/Defense							420,000		417,608		413,973


*Agriculture — 0.7%:**
Imperial Tobacco Finance PLC+^		2.05			7/20/2018		335,000		333,548		333,142
Reynolds American, Inc.		2.30			6/12/2018		335,000		339,381		337,104

Total Agriculture							670,000		672,929		670,246


*Apparel — 0.5%:**
Hanesbrands, Inc.		6.38			12/15/2020		415,000		431,816		429,525


*Auto Manufacturers — 1.2%:**
Ford Motor Credit Co. LLC		2.24			6/15/2018		530,000		528,036		525,181
General Motors Financial Co.		3.20			7/13/2020		440,000		436,632		433,225
Hyundai Capital America^		2.40			10/30/2018		150,000		150,076		149,535

Total Auto Manufacturers							1,120,000		1,114,744		1,107,941


*Biotechnology — 0.5%:**
Celgene Corp.		2.13			8/15/2018		420,000		421,016		420,093


*Chemicals — 0.8%:**
Airgas, Inc.		2.38			2/15/2020		250,000		247,677		247,040
Airgas, Inc.		3.05			8/1/2020		150,000		152,146		150,937
Incitec Pivot Finance LLC^		6.00			12/10/2019		195,000		212,583		211,439
RPM International, Inc.		6.13			10/15/2019		150,000		167,054		164,076

Total Chemicals							745,000		779,460		773,492


*Commercial Banks — 7.3%:**
ABN AMRO Bank NV^		2.50			10/30/2018		200,000		202,388		201,273
ABN AMRO Bank NV+^		4.25			2/2/2017		200,000		206,299		205,378
Banco Bilbao Vizcaya Argentaria SA		3.00			10/20/2020		420,000		418,388		418,197
Bank of America Corp.		5.42			3/15/2017		500,000		521,758		520,447
Bank of America Corp. MTN		2.25			4/21/2020		250,000		244,556		243,966
CIT Group, Inc.		4.25			8/15/2017		535,000		545,206		547,038
Credit Agricole SA+^		2.13			4/17/2018		245,000		246,975		245,601
Credit Suisse+		1.75			1/29/2018		420,000		420,605		418,820
First Horizon National Corp.		3.50			12/15/2020		450,000		448,900		446,092
Goldman Sachs Group, Inc. (The)		2.38			1/22/2018		590,000		598,474		595,098
Intesa Sanpaolo SpA+		3.88			1/16/2018		400,000		411,602		410,165
Itau Unibanco Holding SA+^		2.85			5/26/2018		400,000		394,281		380,400
Mitsubishi UFJ Trust & Banking Corp.^		2.65			10/19/2020		450,000		448,951		449,536
Morgan Stanley		2.13			4/25/2018		415,000		418,476		415,554
Nordea Bank AB+^		2.50			9/17/2020		290,000		289,771		288,279
Regions Bank		7.50			5/15/2018		212,000		239,017		235,562

See accompanying Notes to Financial Statements.

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

Commercial Banks (Continued)
Santander Holdings USA, Inc.		3.45	%		8/27/2018		400,000		$410,402		$406,658
SVB Financial Group		5.38			9/15/2020		200,000		222,452		218,809

Total Commercial Banks							6,577,000		6,688,501		6,646,873


*Commercial Services — 1.0%:**
ADT Corp. (The)		2.25			7/15/2017		415,000		413,906		412,925
McGraw Hill Financial, Inc.		2.50			8/15/2018		260,000		261,099		261,623
Western Union Co. (The)		5.93			10/1/2016		200,000		206,299		206,350

Total Commercial Services							875,000		881,304		880,898


*Construction Materials — 0.5%:**
Masco Corp.		7.13			3/15/2020		390,000		450,793		450,450


*Diversified Financial Services — 2.6%:**
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust+		2.75			5/15/2017		415,000		413,957		412,406
Air Lease Corp.		2.13			1/15/2018		330,000		328,382		324,225
Air Lease Corp.		2.63			9/4/2018		125,000		124,449		123,558
Air Lease Corp.		3.38			1/15/2019		200,000		204,617		201,000
Ally Financial, Inc.		4.75			9/10/2018		535,000		549,755		547,706
Icahn Enterprises LP / Icahn Enterprises Finance Corp.		3.50			3/15/2017		200,000		201,448		201,000
International Lease Finance Corp.		3.88			4/15/2018		250,000		252,403		251,875
Visa, Inc.		2.20			12/14/2020		310,000		309,739		309,423

Total Diversified Financial Services							2,365,000		2,384,750		2,371,193


*Electric — 0.6%:**
Ameren Corp.		2.70			11/15/2020		180,000		179,959		179,314
Entergy Texas, Inc.		7.13			2/1/2019		300,000		342,844		339,676

Total Electric							480,000		522,803		518,990


*Electronics — 0.1%:**
Tech Data Corp.		3.75			9/21/2017		60,000		61,763		60,717


*Environmental Control — 0.5%:**
Clean Harbors, Inc.		5.25			8/1/2020		415,000		424,289		423,300


*Food — 0.8%:**
JBS Investments GmbH+^		7.75			10/28/2020		415,000		448,053		398,400
Tyson Foods, Inc.		2.65			8/15/2019		335,000		338,095		335,186

Total Food							750,000		786,148		733,586


*Forestry and Paper Products — 0.5%:**
Domtar Corp.		10.75			6/1/2017		196,000		219,246		218,094
Sappi Papier Holding GmbH+^		7.75			7/15/2017		200,000		213,152		207,750

Total Forestry and Paper Products							396,000		432,398		425,844

See accompanying Notes to Financial Statements.

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Hand/Machine Tools — 0.2%:**
Stanley Black & Decker, Inc.		2.45	%		11/17/2018		175,000		$175,000		$175,683


*Healthcare-Products — 0.4%:**
Zimmer Biomet Holdings, Inc.		2.00			4/1/2018		330,000		330,547		327,967


*Healthcare-Services — 0.9%:**
Anthem, Inc.		1.88			1/15/2018		250,000		250,094		248,915
Humana, Inc.		6.30			8/1/2018		150,000		165,802		165,095
Laboratory Corp. of America Holdings		2.63			2/1/2020		420,000		419,102		414,646

Total Healthcare-Services							820,000		834,998		828,656


*Holding Companies-Divers — 0.3%:**
Hutchison Whampoa International 14 Ltd.+^		1.63			10/31/2017		250,000		249,685		247,793


*Home Builders — 1.0%:**
DR Horton, Inc.		3.75			3/1/2019		535,000		543,976		535,000
Lennar Corp.		4.50			6/15/2019		150,000		153,994		152,531
Lennar Corp.		4.50			11/15/2019		200,000		204,596		203,375

Total Home Builders							885,000		902,566		890,906


*Insurance — 1.4%:**
Reinsurance Group of America, Inc.		5.63			3/15/2017		450,000		470,250		468,973
TIAA Asset Management Finance Co. LLC^		2.95			11/1/2019		385,000		388,663		385,767
Willis Group Holdings PLC+		5.75			3/15/2021		370,000		411,632		408,893

Total Insurance							1,205,000		1,270,545		1,263,633


*Internet — 0.8%:**
Alibaba Group Holding Ltd.+		2.50			11/28/2019		250,000		248,183		244,240
Expedia, Inc.		7.46			8/15/2018		420,000		471,970		468,038

Total Internet							670,000		720,153		712,278


*Investment Company Security — 0.6%:**
Ares Capital Corp.		4.88			11/30/2018		200,000		209,055		208,235
FS Investment Corp.		4.00			7/15/2019		335,000		339,003		331,923

Total Investment Company Security							535,000		548,058		540,158


*IT Services — 0.3%:**
Leidos Holdings, Inc.		4.45			12/1/2020		250,000		251,725		248,847


*Lodging — 0.5%:**
Marriott International, Inc.		2.88			3/1/2021		275,000		274,076		272,839
Wyndham Worldwide Corp.		2.95			3/1/2017		220,000		221,889		221,338

Total Lodging							495,000		495,965		494,177

See accompanying Notes to Financial Statements.

100

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Machinery-Diversified — 0.4%:**
Case New Holland Industrial, Inc.+		7.88	%		12/1/2017		360,000		$387,478		$380,700


*Media — 0.9%:**
CCO Safari II LLC^		3.58			7/23/2020		415,000		415,708		412,514
Sirius XM Radio, Inc.^		4.25			5/15/2020		385,000		386,361		388,850

Total Media							800,000		802,069		801,364


*Mining — 0.3%:**
Glencore Finance Canada Ltd.+^		2.70			10/25/2017		350,000		349,921		320,250


*Miscellaneous Manufacturing — 0.7%:**
Harsco Corp.		5.75			5/15/2018		300,000		306,626		266,250
Tyco Electronics Group SA		2.35			8/1/2019		135,000		134,937		134,548
Tyco Electronics Group SA+		2.38			12/17/2018		200,000		202,353		199,724

Total Miscellaneous Manufacturing							635,000		643,916		600,522


*Oil and Gas — 1.1%:**
Pioneer Natural Resources Co.		3.45			1/15/2021		440,000		438,914		406,275
Rowan Cos., Inc.		7.88			8/1/2019		200,000		225,584		196,614
Southwestern Energy Co.		3.30			1/23/2018		200,000		204,726		164,000
Transocean, Inc.+		6.00			3/15/2018		200,000		201,260		178,000
WPX Energy, Inc.		7.50			8/1/2020		85,000		85,000		68,850

Total Oil and Gas							1,125,000		1,155,484		1,013,739


*Oil and Gas Services — 0.7%:**
Cameron International Corp.		6.38			7/15/2018		410,000		451,962		444,655
SESI LLC		7.13			12/15/2021		200,000		211,265		178,000

Total Oil and Gas Services							610,000		663,227		622,655


*Pharmaceuticals — 1.4%:**
AbbVie, Inc.		1.80			5/14/2018		420,000		419,578		418,066
Actavis Funding SCS+		2.35			3/12/2018		335,000		336,893		335,349
Baxalta, Inc.^		2.00			6/22/2018		330,000		329,948		326,614
Mylan, Inc.		2.60			6/24/2018		200,000		202,743		198,462

Total Pharmaceuticals							1,285,000		1,289,162		1,278,491


*Pipelines — 0.8%:**
Energy Transfer Partners LP		2.50			6/15/2018		415,000		414,922		397,506
Kinder Morgan, Inc.		7.00			6/15/2017		350,000		372,102		360,544

Total Pipelines							765,000		787,024		758,050


*Real Estate Investment Trusts — 2.0%:**
DDR Corp.		4.75			4/15/2018		445,000		467,739		465,500
DDR Corp. MTN		7.50			7/15/2018		31,000		34,874		34,785
Digital Delta Holdings LLC^		3.40			10/1/2020		85,000		84,819		85,093

See accompanying Notes to Financial Statements.

101

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

Real Estate Investment Trusts (Continued)
Duke Realty LP		5.95	%		2/15/2017		300,000		$315,193		$313,226
Duke Realty LP		6.50			1/15/2018		140,000		151,854		151,408
HCP, Inc.		6.00			1/30/2017		390,000		408,062		406,263
Highwoods Realty LP		7.50			4/15/2018		370,000		412,779		408,908

Total REITS							1,761,000		1,875,320		1,865,183


*Retail — 0.6%:**
AutoNation, Inc.		3.35			1/15/2021		355,000		356,297		353,738
Best Buy Co., Inc.		5.00			8/1/2018		200,000		207,559		207,700

Total Retail							555,000		563,856		561,438


*Semiconductors — 0.2%:**
KLA-Tencor Corp.		3.38			11/1/2019		200,000		205,148		202,055


*Software — 0.5%:**
Hewlett Packard Enterprise Co.^		2.85			10/5/2018		425,000		425,244		424,763


*Telecommunications — 0.7%:**
Crown Castle Towers LLC^		4.17			8/15/2037		220,000		227,325		224,957
Frontier Communications Corp.		8.25			4/15/2017		200,000		212,506		210,000
Sprint Communications, Inc.^		9.00			11/15/2018		200,000		223,781		210,500

Total Telecommunications							620,000		663,612		645,457


*Transportation — 0.8%:**
Asciano Finance Ltd.+^		5.00			4/7/2018		350,000		369,409		360,357
Penske Truck Leasing Co. LP/PTL Finance Corp.^		3.05			1/9/2020		200,000		202,673		198,345
PT Penske Truck Leasing Co. LP / L Finance Corp.^		3.20			7/15/2020		135,000		134,912		133,645
PT Penske Truck Leasing Co. LP / L Finance Corp.^		3.30			4/1/2021		60,000		59,732		59,154

Total Transportation							745,000		766,726		751,501


*Trucking and Leasing — 0.5%:**
Aviation Capital Group Corp.^		2.88			9/17/2018		480,000		477,908		477,246

Total Corporate Bonds							32,429,000		33,305,659		32,760,633

*Mortgage-Backed Securities — 4.2%:**
Banc of America Commercial Mortgage Trust 2007-4 AM		6.00	^#		2/10/2051		255,000		272,543		266,534
Banc of America Commercial Mortgage Trust 2008-1 A4		6.42	^#		2/10/2051		213,314		232,060		225,913
Bear Stearns Commercial Mortgage Securities Trust 2006-PWR12 AM		5.95	^#		9/11/2038		170,000		175,328		171,309

See accompanying Notes to Financial Statements.

102

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Mortgage-Backed Securities (Continued)
Bear Stearns Commercial Mortgage Securities Trust 2006-PWR14 AM		5.24	%		12/11/2038		220,000		$230,008		$224,283
Bear Stearns Commercial Mortgage Securities Trust 2006-TOP22 AM		5.82	^#		4/12/2038		220,000		225,296		221,039
Bear Stearns Commercial Mortgage Securities Trust 2006-TOP24 AM		5.57	^#		10/12/2041		220,000		230,602		224,470
Bear Stearns Commercial Mortgage Securities Trust 2007-PWR17 AM		5.92	^#		6/11/2050		160,000		171,806		168,306
COMM Mortgage Trust 2007-C9 AM		5.65	^#		12/10/2049		100,000		106,613		104,667
Fannie Mae Connecticut Avenue Securities CAS 2015-C03 1M1		1.72	^#		7/25/2025		203,999		204,090		204,060
Fannie Mae Connecticut Avenue Securities CAS 2015-C04 1M1		1.82	^#		4/25/2028		118,533		118,533		118,390
JPMorgan Chase Commercial Mortgage Securities Trust 2006-LDP7 AM		6.11	^#		4/15/2045		220,000		228,410		222,095
JPMorgan Chase Commercial Mortgage Securities Trust 2007-CIBC20 AM		6.09	^#		2/12/2051		210,000		228,304		221,720
ML-CFC Commercial Mortgage Trust 2006-3 AM		5.46	^#		7/12/2046		200,000		207,738		203,281
ML-CFC Commercial Mortgage Trust 2006-4 AM		5.20			12/12/2049		210,000		219,573		215,518
Morgan Stanley Capital I Trust 2006-IQ12 AM		5.37			12/15/2043		290,000		303,409		295,501
Morgan Stanley Capital I Trust 2008-TOP29 A4		6.46	^#		1/11/2043		203,255		222,514		216,280
Wachovia Bank Commercial Mortgage Trust 2006-C29 AM		5.34			11/15/2048		280,000		289,099		285,779
Wachovia Bank Commercial Mortgage Trust 2007-C33 A1A		6.15	^#		2/15/2051		198,898		214,068		208,349

Total Mortgage-Backed Securities							3,692,999		3,879,994		3,797,494

*U.S. Treasury & Government Agencies — 36.6%:**
Federal National Mortgage Association REMICS 2015-62 VA		4.00			10/25/2026		140,645		152,287		151,024
Federal National Mortgage Association TBA		2.50			1/1/2031		5,225,000		5,285,924		5,266,637
Federal National Motgage Association 2015-58 JP		2.50			3/25/2037		110,797		113,227		111,447
U.S. Treasury Note``		0.63			8/31/2017		16,250,000		16,189,616		16,145,902
U.S. Treasury Note		1.38			4/30/2020		11,770,000		11,650,692		11,617,814

Total U.S. Treasury & Government Agencies							33,496,442		33,391,746		33,292,824

Total Fixed Income							87,835,190		88,487,708		87,658,666

See accompanying Notes to Financial Statements.

103

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	STRIKE PRICE			EXPIRATION DATE		NOTIONAL		COST		FAIR VALUE
*Purchased Options — 0.1%:**

*Call Option Purchased — 0.1%:**
OTC—BCM Swaption with JPMorgan Chase Bank N.A.		$6.65			7/27/2016		2,040,000		$21,510		$54,242


*Put Option Purchased — 0.0%:**
OTC—BCM Swaption with JPMorgan Chase Bank N.A.		120.00			3/16/2016		12,500,000		25,845		14,650

Total Purchased Options							14,540,000		47,355		68,892


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Short-Term Investments — 12.5%:**

*Bank Deposit — 5.1%:**
State Street Bank & Trust Co. Euro Time Deposit		0.01	%		1/4/2016		4,606,134		4,606,134		4,606,134

*Commercial Paper — 5.9%:**

*Construction Materials — 2.2%:**
Holcim US Finance Sarl Cie		Zero Coupon			1/14/2016		2,000,000		1,999,300		1,999,495


*Media — 1.5%:**
Thomas Reutuers Corp.		Zero Coupon			1/12/2016		1,356,000		1,355,718		1,355,718


*Oil and Gas Services — 2.2%:**
Enbridge, Inc.		Zero Coupon			1/14/2016		2,000,000		1,999,314		1,999,314

Total Commercial Paper							5,356,000		5,354,332		5,354,527

*Corporate Bonds — 1.5%:**

*Agriculture — 0.5%:**
Bunge Ltd. Finance Corp.		4.10			3/15/2016		385,000		387,212		386,976


*Auto Manufacturers — 0.2%:**
Hyundai Capital America+^		3.75			4/6/2016		200,000		201,408		201,090


*Diversified Financial Services — 0.4%:**
International Lease Finance Corp.		5.75			5/15/2016		345,000		349,474		349,744


*Iron/Steel — 0.2%:**
Vale Overseas Ltd.+		6.25			1/11/2016		200,000		200,261		199,970

See accompanying Notes to Financial Statements.

104

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Oil and Gas — 0.2%:**
Petrobras Global Finance BV+		3.88	%		1/27/2016		200,000		$200,192		$199,200

Total Corporate Bonds							1,330,000		1,338,547		1,336,980

Total Short-Term Investments							11,292,134		11,299,013		11,297,641

Total Investments							113,668,224		99,872,848		99,041,894


Other assets and liabilities — (9.0%)*											(8,203,804	)

Net Assets — 100.0%											$90,838,090

MTN	Medium Term Note

OTC	Over the Counter

TBA	To Be Announced: Securities purchased on a forward commitment basis with an approximate principal amount and maturity date. The actual principal amount and maturity date will be determined upon settlement.

‡‡	Unless otherwise indicated, all principal amounts are denominated in United States Dollars.

*	Calculated as a percentage of net assets applicable to common shareholders.

+	Foreign security.

Distributions of investments by country of risk (excluding temporary cash investments) as a percentage of total investments in securities, is as follows:


		United States			91.1%
		Switzerland			1.3%
		Netherlands			1.3%
		Brazil			1.2%
		Other (Individually less than 1%)			5.1%

		Total			100.0%

^	Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers.

#	Variable rate security. The interest rate shown is the rate in effect at December 31, 2015.

†	When-issued security.

``	Security has been fully or partially segregated to cover margin requirements for open futures contracts as of December 31, 2015.

See accompanying Notes to Financial Statements.

105

Babson Active Short Duration Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

A summary of outstanding derivatives at December 31, 2015 is as follows:

Futures


TYPE	EXPIRATION DATE		CONTRACTS		POSITION		FAIR VALUE		UNREALIZED DEPRECIATION
U.S. 2-Year Treasury Note		03/31/16		152		Long	$	33,019,625	$	(61,555	)
U.S. 5-Year Treasury Note		03/31/16		58		Long		6,862,578		(14,972	)

									$	(76,527	)

TYPE

EXPIRATION DATE

CONTRACTS

POSITION

FAIR VALUE

UNREALIZED
APPRECIATION

U.S. 10-Year Treasury Note

03/21/16

Short

5,036,250

13,623

Credit Default Swaps — Sell Protection⁽¹⁾

REFERENCE
OBLIGATION

FIIXED-DEAL
RECEIVED
RATE

MATURITY
DATE

COUNTERPARTY

ORIGINAL
NOTIONAL
AMOUNT

CURRENT
NOTIONAL
AMOUNT⁽²⁾

UPFRONT
PREMIUMS
PAID/
(RECEIVED)

FAIR
VALUE⁽³⁾

UNREALIZED
DEPRECIATION

Markit CMBX.NA.

BBB-.6

3.00

11/17/45

JPMorgan Chase
Bank N.A.

230,000

562

(7,229

)

(7,791

)

⁽¹⁾

If the Fund is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay to the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.

⁽²⁾	The maximum potential amount the portfolio could be required to make as a seller of credit protection or receive as a buyer of credit event as defined under the terms of that particular swap agreement.

⁽³⁾

The quoted market prices and resulting values for credit default swap agreements on asset-backed securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the expected amount paid or received for the credit derivative if the amount of the swap agreement was closed/sold as of the period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreements.

See accompanying Notes to Financial Statements.

106

Babson Total Return Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Fixed Income — 87.5%:**

*Asset-Backed Securities — 17.4%:**

*CDO/CLO — 5.0%:**
ALM XIV Ltd. 2014-14A A1^		1.75	^#%		7/28/2026		250,000		$249,391		$247,339
Atlas Senior Loan Fund V Ltd. 2014-1A A^		1.87	^#		7/16/2026		250,000		249,806		248,133
Carlyle Global Market Strategies CLO Ltd. 2014-1A A^		1.84	^#		4/17/2025		250,000		250,000		248,805
Carlyle Global Market Strategies CLO Ltd. 2014-4A A1^		1.82	^#		10/15/2026		250,000		250,000		248,306
Madison Park Funding XIV Ltd. 2014-14A A2^		1.77	^#		7/20/2026		250,000		249,847		247,420

Total CDO/CLO							1,250,000		1,249,044		1,240,003


*Other Asset-Backed Securities — 12.4%:**
Access Group, Inc. 2006-1 B		0.84	^#		8/25/2037		84,373		73,376		74,654
Access Group, Inc. 2015-1 A^		1.12	^#		7/25/2056		91,925		89,873		89,245
Access Group, Inc. 2015-1 B^		1.92	^#		7/25/2058		100,000		86,137		84,849
Arbys Funding LLC 2015-1A A2^		4.97			10/30/2045		40,000		40,000		39,996
Avis Budget Rental Car Funding AESOP LLC 2010-5A A^		3.15			3/20/2017		62,500		62,965		62,657
Citi Held For Asset Issuance 2015-PM1 A^		1.85			12/15/2021		67,264		67,263		67,131
CKE Restaurant Holdings, Inc. 2013-1A A2^		4.47			3/20/2043		124,637		127,668		123,925
College Loan Corp. Trust I 2005-2 B		0.81	^#		1/15/2037		133,062		116,160		115,302
CPS Auto Receivables Trust 2011-C A^		4.21			3/15/2019		48,096		48,678		48,291
CPS Auto Receivables Trust 2013-A A^		1.31			6/15/2020		95,043		94,658		94,083
DB Master Finance LLC 2015-1A A2I^		3.26			2/20/2045		99,250		99,281		98,207
Diamond Resorts Owner Trust 2015-1 A^		2.73			7/20/2027		74,574		74,567		74,433
Domino’s Pizza Master Issuer LLC 2015 1A-A2I^		3.48			10/25/2045		60,000		60,000		58,800
Domino’s Pizza Master Issuer LLC 2015-1A A2II^		4.47			10/25/2045		60,000		60,000		59,737
Drive Auto Receivables Trust 2015-CA A3^		1.38			10/15/2018		125,000		124,997		124,717
Drug Royalty LP 1 2012-1 A1^		5.57	^#		7/15/2024		60,000		61,791		61,335
Entegry New Orleans Storm Recovery Funding I LLC 2015-1 A		2.67			6/1/2027		100,000		99,977		102,019
GSAMP Trust 2005-SEA2 A1^		0.77	^#		1/25/2045		26,050		25,010		25,401
J.G. Wentworth XXXV LLC 2015-2A A^		3.87			3/15/2058		49,950		49,911		49,391
Miramax LLC 2014-1A A2^		3.34			7/20/2026		77,480		78,026		76,923
Nelnet Student Loan Trust 2008-3 A4		2.04	^#		11/25/2024		125,000		127,478		125,802
NRZ Advance Receivables Trust 2015-T3 AT3^		2.54			11/15/2046		100,000		100,000		99,837
Ocwen Master Advance Receivables Trust 2015-T1 AT1^		2.54			9/17/2046		100,000		100,000		99,913
OneMain Financial Issuance Trust 2014-2A A^		2.47			9/18/2024		130,000		130,465		129,744
Popular ABS Mortgage Pass-Through Trust 2006-B A3		0.70	^#		5/25/2036		76,590		73,378		73,964
Santander Drive Auto Receivables Trust 2014-4 B		1.82			5/15/2019		120,000		120,530		120,108

See accompanying Notes to Financial Statements.

107

Babson Total Return Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Asset-Backed Securities (Continued)

Other Asset-Backed Securities (Continued)
Sierra Timeshare Receivables Funding LLC 2015-2A B^		3.02	%		6/20/2032		75,408		$75,392		$74,319
SLC Private Student Loan Trust 2006-A A5		0.49	^#		7/15/2036		102,316		101,705		101,406
SLC Private Student Loan Trust 2006-A C		0.77	^#		7/15/2036		140,000		124,012		122,457
SLC Student Loan Trust 2005-1 B		0.56	^#		2/15/2045		121,019		103,169		101,036
SLM Student Loan Trust 2002-7 A11		1.75	^#		3/15/2028		50,000		49,388		49,910
SLM Student Loan Trust 2003-4 B		1.16	^#		6/15/2038		88,048		80,362		77,863
SLM Student Loan Trust 2005-4 B		0.50	^#		7/25/2040		118,753		100,041		99,885
Sonic Capital LLC 2011-1A A2^		5.44			5/20/2041		118,464		124,336		120,887
SpringCastle America Funding LLC 2014-AA A^		2.70			5/25/2023		59,886		60,069		59,754
TAL Advantage I LLC 2006-1A^		0.59	^#		4/20/2021		50,000		49,782		49,901

Total Other Asset-Backed Securities							3,154,688		3,060,445		3,037,882

Total Asset-Backed Securities							4,404,688		4,309,489		4,277,885

*Convertible Bonds — 0.4%:**

*Oil and Gas — 0.1%:**
Whiting Petroleum Corp.^		1.25			4/1/2020		45,000		44,868		30,600


*Retail — 0.0%:**
GNC Holdings, Inc.^		1.50			8/15/2020		5,000		5,000		4,003


*Semiconductors — 0.3%:**
Micron Technology, Inc.		3.00			11/15/2043		75,000		69,359		62,344

Total Convertible Bonds							125,000		119,227		96,947

*Corporate Bonds — 32.1%:**

*Advertising — 0.1%:**
WPP Finance 2010+		5.63			11/15/2043		35,000		38,240		35,508


*Agriculture — 1.3%:**
Altria Group, Inc.		2.85			8/9/2022		50,000		48,219		48,744
Altria Group, Inc.		4.25			8/9/2042		30,000		26,806		27,526
Bunge Ltd. Finance Corp.		3.50			11/24/2020		5,000		4,996		4,972
Imperial Tobacco Finance PLC+^		3.75			7/21/2022		200,000		196,950		200,801
Reynolds American, Inc.		4.45			6/12/2025		30,000		30,648		31,375

Total Agriculture							315,000		307,619		313,418


*Auto Manufacturers — 0.6%:**
Ford Motor Co.		7.45			7/16/2031		60,000		76,598		74,041
General Motors Co.		5.20			4/1/2045		35,000		34,577		32,820
General Motors Financial Co., Inc.		4.30			7/13/2025		50,000		49,652		48,485

Total Auto Manufacturers							145,000		160,827		155,346


*Beverages — 0.2%:**
Anheuser-Busch InBev Worldwide, Inc.+		8.20			1/15/2039		35,000		52,599		50,451

See accompanying Notes to Financial Statements.

108

Babson Total Return Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Biotechnology — 0.4%:**
Amgen, Inc.		5.15	%		11/15/2041		25,000		$26,068		$25,381
Celgene Corp.		3.55			8/15/2022		60,000		59,845		60,583
Gilead Sciences, Inc.		4.75			3/1/2046		10,000		9,959		10,120

Total Biotechnology							95,000		95,872		96,084


*Chemicals — 0.7%:**
LYB International Finance B.V.		5.25			7/15/2043		35,000		36,014		33,603
RPM International, Inc.		6.13			10/15/2019		90,000		100,622		98,445
Westlake Chemical Corp.		3.60			7/15/2022		50,000		49,491		48,756

Total Chemicals							175,000		186,127		180,804


*Commercial Banks — 5.1%:**
Associated Banc-Corp		2.75			11/15/2019		45,000		45,237		44,667
Associated Banc-Corp		4.25			1/15/2025		70,000		70,021		70,043
Bank of America Corp.		7.63			6/1/2019		120,000		140,535		138,998
Bank of America Corp. MTN		3.95			4/21/2025		45,000		43,882		43,820
Bank of America Corp. MTN		4.00			4/1/2024		25,000		25,614		25,568
Bank of America Corp. MTN		5.88			2/7/2042		25,000		28,745		29,177
Bank of Nova Scotia (The)+		4.50			12/16/2025		20,000		19,998		19,908
Barclays PLC+		4.38			9/11/2024		60,000		58,045		58,669
Citigroup, Inc.		3.88			3/26/2025		60,000		58,352		58,397
Discover Bank		7.00			4/15/2020		30,000		34,447		34,158
Goldman Sachs Group, Inc. (The)		5.15			5/22/2045		70,000		67,739		67,997
Goldman Sachs Group, Inc. (The)		5.95			1/15/2027		50,000		56,175		55,618
ICICI Bank Ltd.+^		4.75			11/25/2016		200,000		205,381		204,727
JPMorgan Chase & Co.		4.50			1/24/2022		25,000		26,771		26,965
JPMorgan Chase & Co.		4.95			6/1/2045		40,000		39,298		39,992
Morgan Stanley		3.95			4/23/2027		100,000		94,692		97,058
Morgan Stanley MTN		6.63			4/1/2018		110,000		121,423		120,618
Santander Holdings USA, Inc.		2.65			4/17/2020		35,000		34,663		34,337
SVB Financial Group		3.50			1/29/2025		40,000		39,059		38,323
Wells Fargo & Co. MTN		4.30			7/22/2027		40,000		39,852		40,861

Total Commercial Banks							1,210,000		1,249,929		1,249,901


*Commercial Services — 0.5%:**
ERAC USA Finance LLC^		5.63			3/15/2042		20,000		21,568		21,465
McGraw Hill Financial, Inc.		3.30			8/14/2020		45,000		44,950		45,384
McGraw Hill Financial, Inc.		4.00			6/15/2025		50,000		50,206		50,122

Total Commercial Services							115,000		116,724		116,971


*Construction Materials — 0.2%:**
Owens Corning		4.20			12/1/2024		50,000		49,322		48,663


*Distribution/Wholesale — 0.2%:**
Ingram Micro, Inc.		4.95			12/15/2024		45,000		46,313		44,834

See accompanying Notes to Financial Statements.

109

Babson Total Return Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Diversified Financial Services — 1.6%:**
Affiliated Managers Group, Inc.		4.25	%		2/15/2024		50,000		$51,487		$50,506
Air Lease Corp.		2.63			9/4/2018		110,000		109,515		108,731
Air Lease Corp.		3.38			1/15/2019		25,000		25,599		25,125
Discover Financial Services		3.75			3/4/2025		30,000		28,821		28,809
General Electric Capital Corp. MTN		6.88			1/10/2039		35,000		47,063		47,708
Lazard Group LLC		4.25			11/14/2020		130,000		136,616		134,651

Total Diversified Financial Services							380,000		399,101		395,530


*Electric — 1.4%:**
Appalachian Power Co.		6.70			8/15/2037		30,000		37,713		35,920
CMS Energy Corp.		3.88			3/1/2024		50,000		51,413		50,757
Duke Energy Florida LLC		3.10			8/15/2021		50,000		51,446		51,061
LG&E and KU Energy LLC		4.38			10/1/2021		50,000		53,913		52,832
NiSource Finance Corp.		6.13			3/1/2022		50,000		57,501		57,231
Pacific Gas & Electric Co.		5.80			3/1/2037		25,000		29,412		29,067
Puget Sound Energy, Inc.		4.30			5/20/2045		30,000		30,671		30,386
Southwestern Public Service Co.		6.00			10/1/2036		30,000		35,767		34,921

Total Electric							315,000		347,836		342,175


*Electrical Components and Equipment — 0.2%:**
Legrand France SA+		8.50			2/15/2025		35,000		47,366		46,495


*Electronics — 0.4%:**
Agilent Technologies, Inc.		3.88			7/15/2023		50,000		50,605		50,036
Jabil Circuit, Inc.		7.75			7/15/2016		50,000		$51,548		$51,250

Total Electronics							100,000		102,153		101,286


*Environmental Control — 0.5%:**
Republic Services, Inc.		4.75			5/15/2023		50,000		54,400		54,470
Waste Management, Inc.		7.00			7/15/2028		50,000		65,542		62,951

Total Environmental Control							100,000		119,942		117,421


*Food — 0.2%:**
Kraft Heinz Foods Co.^		2.80			7/2/2020		40,000		40,253		39,897
Whole Foods Market, Inc.^		5.20			12/3/2025		20,000		19,972		19,970

Total Food							60,000		60,225		59,867


*Forestry and Paper Products — 0.7%:**
Celulosa Arauco y Constitucion SA+		4.75			1/11/2022		30,000		31,226		30,534
Domtar Corp.		4.40			4/1/2022		50,000		50,835		50,841
International Paper Co.		9.38			5/15/2019		73,000		88,121		87,608

Total Forestry and Paper Products							153,000		170,182		168,983


*Gas — 0.3%:**
CenterPoint Energy Resources Corp.		4.50			1/15/2021		25,000		26,911		26,241

See accompanying Notes to Financial Statements.

110

Babson Total Return Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

Gas (Continued)
CenterPoint Energy Resources Corp.		5.85	%		1/15/2041		20,000		$23,462		$22,091
Laclede Group, Inc. (The)		4.70			8/15/2044		25,000		25,261		24,677

Total Gas							70,000		75,634		73,009


*Healthcare-Products — 0.1%:**
Zimmer Biomet Holdings, Inc.		3.55			4/1/2025		35,000		34,231		34,010


*Housewares — 0.2%:**
Newell Rubbermaid, Inc.		3.90			11/1/2025		20,000		19,938		18,046
Toro Co. (The)		7.80			6/15/2027		25,000		32,290		31,572

Total Housewares							45,000		52,228		49,618


*Insurance — 2.1%:**
Allstate Corp. (The)		5.75	^#		8/15/2053		110,000		116,575		113,080
Arch Capital Group US, Inc.		5.14			11/1/2043		25,000		25,314		25,295
Brown & Brown, Inc.		4.20			9/15/2024		30,000		30,210		29,624
Liberty Mutual Group, Inc.^		4.25			6/15/2023		50,000		51,614		50,803
Marsh & McLennan Cos., Inc.		5.88			8/1/2033		20,000		23,217		22,959
Prudential Financial, Inc.		8.88	^#		6/15/2038		100,000		117,144		112,500
Unum Group		4.00			3/15/2024		30,000		30,881		29,949
Voya Financial, Inc.		5.65	^#		5/15/2053		35,000		35,861		34,475
Willis North America, Inc.+		7.00			9/29/2019		50,000		56,360		56,037
XLIT Ltd.+		5.50			3/31/2045		30,000		28,757		28,028

Total Insurance							480,000		515,933		502,750


*Internet — 1.2%:**
Baidu, Inc.+		2.25			11/28/2017		200,000		200,969		200,022
Expedia, Inc.^		5.00			2/15/2026		40,000		39,815		38,950
Expedia, Inc.		7.46			8/15/2018		45,000		50,675		50,147

Total Internet							285,000		291,459		289,119


*Investment Company Security — 0.3%:**
Ares Capital Corp.		3.88			1/15/2020		30,000		30,673		30,456
FS Investment Corp.		4.00			7/15/2019		30,000		30,546		29,724

Total Investment Company Security							60,000		61,219		60,180


*Iron/Steel — 0.8%:**
Reliance Steel & Aluminum Co.		6.20			11/15/2016		55,000		57,142		56,844
Vale Overseas Ltd.+		6.25			1/23/2017		120,000		124,903		119,772
Vale Overseas Ltd.+		6.88			11/10/2039		25,000		$23,959		$17,373

Total Iron/Steel							200,000		206,004		193,989


*IT Services — 0.2%:**
Leidos Holdings, Inc.		4.45			12/1/2020		50,000		50,396		49,769

See accompanying Notes to Financial Statements.

111

Babson Total Return Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Lodging — 0.4%:**
Wyndham Worldwide Corp.		5.63	%		3/1/2021		90,000		$98,554		$96,776


*Media — 0.8%:**
CCO Safari II LLC^		4.46			7/23/2022		90,000		90,000		89,686
Discovery Communications LLC		4.88			4/1/2043		25,000		22,733		20,578
Time Warner Cable, Inc.		4.50			9/15/2042		60,000		49,155		47,087
Time Warner Cable, Inc.		5.50			9/1/2041		35,000		32,612		31,627

Total Media							210,000		194,500		188,978


*Medical Equipment and Devices Manufacturing — 0.2%:**
St. Jude Medical, Inc.		2.80			9/15/2020		40,000		39,983		40,015


*Mining — 0.2%:**
Freeport-McMoRan, Inc.		4.00			11/14/2021		45,000		42,926		27,000
Newcrest Finance Pty Ltd.+^		4.45			11/15/2021		30,000		29,859		27,176

Total Mining							75,000		72,785		54,176


*Miscellaneous Manufacturing — 0.4%:**
Carlisle Cos., Inc.		3.75			11/15/2022		50,000		50,195		49,514
Textron, Inc.		4.30			3/1/2024		50,000		51,387		50,926

Total Miscellaneous Manufacturing							100,000		101,582		100,440


*Oil and Gas — 2.0%:**
Anadarko Petroleum Corp.		6.45			9/15/2036		45,000		52,511		43,374
Newfield Exploration Co.		5.38			1/1/2026		140,000		139,858		115,850
Petroleos Mexicanos+		5.50			1/21/2021		55,000		59,702		55,479
Phillips 66		4.30			4/1/2022		50,000		52,508		51,440
Phillips 66		4.65			11/15/2034		30,000		29,838		28,118
Pioneer Natural Resources Co.		7.50			1/15/2020		50,000		58,089		53,105
Rowan Cos., Inc.		4.88			6/1/2022		25,000		24,948		18,385
Rowan Cos., Inc.		5.00			9/1/2017		80,000		82,923		79,398
Southwestern Energy Co.		4.10			3/15/2022		75,000		74,200		47,172

Total Oil and Gas							550,000		574,577		492,321


*Oil and Gas Services — 0.6%:**
Schlumberger Holdings Corp.		4.00			12/21/2025		25,000		24,984		24,670
SESI LLC		7.13			12/15/2021		50,000		52,818		44,500
Weatherford International Ltd.		5.95			4/15/2042		30,000		25,087		21,075
Weatherford International Ltd.		6.00			3/15/2018		50,000		52,470		46,105

Total Oil and Gas Services							155,000		155,359		136,350


*Packaging and Containers — 0.4%:**
Brambles USA, Inc.+^		4.13			10/23/2025		10,000		9,976		10,056
Brambles USA, Inc.+^		5.35			4/1/2020		50,000		54,784		54,520
Sonoco Products Co.		4.38			11/1/2021		41,000		43,569		42,703

Total Packaging and Containers							101,000		108,329		107,279

See accompanying Notes to Financial Statements.

112

Babson Total Return Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Pharmaceuticals — 1.2%:**
AbbVie, Inc.		4.50	%		5/14/2035		30,000		$29,814		$29,388
Actavis Funding SCS+		3.45			3/15/2022		50,000		49,714		50,055
Allergan, Inc.		2.80			3/15/2023		50,000		46,337		47,091
AstraZeneca PLC+		6.45			9/15/2037		35,000		45,067		44,261
McKesson Corp.		6.00			3/1/2041		50,000		55,963		57,561
Mylan, Inc.		2.55			3/28/2019		60,000		59,645		59,215

Total Pharmaceuticals							275,000		286,540		287,571


*Pipelines — 0.7%:**
Energy Transfer Partners LP		4.75			1/15/2026		30,000		29,814		25,233
Enterprise Products Operating LLC		5.95			2/1/2041		25,000		26,740		22,963
Kinder Morgan Energy Partners LP MTN		6.95			1/15/2038		30,000		32,060		25,767
Kinder Morgan, Inc.		3.05			12/1/2019		35,000		35,121		32,393
MPLX LP		4.00			2/15/2025		90,000		88,151		75,642

Total Pipelines							210,000		211,886		181,998


*Property & Casualty Insurance — 0.0%:**
Marsh & McLennan Cos., Inc.		3.75			3/14/2026		10,000		9,992		10,013


*Real Estate — 0.1%:**
Prologis LP		3.35			2/1/2021		25,000		25,512		25,314


*Real Estate Investment Trusts — 1.0%:**
American Tower Corp.		3.45			9/15/2021		80,000		80,064		80,392
Brandywine Operating Partnership LP		4.95			4/15/2018		40,000		42,218		41,863
DDR Corp.		4.75			4/15/2018		3,000		3,168		3,138
Digital Delta Holdings LLC^		3.40			10/1/2020		20,000		19,958		20,022
Digital Realty Trust LP		3.95			7/1/2022		35,000		35,236		34,755
Host Hotels & Resorts LP		4.75			3/1/2023		50,000		52,413		51,677

Total REITS							228,000		233,057		231,847


*Retail — 2.3%:**
Advance Auto Parts, Inc.		4.50			12/1/2023		50,000		51,961		50,981
CVS Health Corp.		3.50			7/20/2022		120,000		119,951		122,107
CVS Pass-Through Trust^		5.93			1/10/2034		31,583		36,267		34,693
El Puerto de Liverpool SAB de CV+^		3.95			10/2/2024		200,000		199,042		194,250
O’Reilly Automotive, Inc.		3.85			6/15/2023		45,000		45,868		45,400
O’Reilly Automotive, Inc.		4.88			1/14/2021		30,000		32,845		32,451
Wal-Mart Stores, Inc.		5.63			4/1/2040		30,000		35,744		35,695
Walgreens Boots Alliance, Inc.		2.70			11/18/2019		25,000		25,189		24,953
Walgreens Boots Alliance, Inc.		3.80			11/18/2024		35,000		34,585		33,956

Total Retail							566,583		581,452		574,486

See accompanying Notes to Financial Statements.

113

Babson Total Return Bond Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Semiconductors — 0.3%:**
KLA-Tencor Corp.		4.65	%		11/1/2024		30,000		$30,158		$30,185
Lam Research Corp.		2.75			3/15/2020		50,000		49,918		48,353

Total Semiconductors							80,000		80,076		78,538


*Software — 0.2%:**
Hewlett Packard Enterprise Co.^		3.60			10/15/2020		20,000		19,995		20,046
Oracle Corp.		5.38			7/15/2040		35,000		39,097		38,936

Total Software							55,000		59,092		58,982


*Telecommunications — 1.3%:**
AT&T, Inc.		3.40			5/15/2025		40,000		38,423		38,444
AT&T, Inc.		6.55			2/15/2039		25,000		29,062		28,104
Crown Castle Towers LLC^		4.17			8/15/2037		120,000		123,995		122,704
Telefonaktiebolaget LM Ericsson+		4.13			5/15/2022		30,000		31,340		30,757
Verizon Communications, Inc.		3.50			11/1/2024		35,000		34,375		34,569
Verizon Communications, Inc.		7.75			12/1/2030		40,000		52,618		51,214

Total Telecommunications							290,000		309,813		305,792


*Transportation — 0.3%:**
Burlington Northern Santa Fe LLC		6.75			3/15/2029		25,000		31,211		30,809
Penske Truck Leasing Co. LP/PTL Finance Corp.^		3.38			2/1/2022		45,000		44,154		43,694

Total Transportation							70,000		75,365		74,503


*Trucking and Leasing — 0.2%:**
Aviation Capital Group Corp.^		2.88			9/17/2018		40,000		39,838		39,771

Total Corporate Bonds							7,758,583		8,095,773		7,861,331

*Foreign Government — 0.4%:**

*Canada — 0.2%:**
Province of Quebec Canada+		2.63			2/13/2023		25,000		25,241		24,784
Province of Quebec Canada+		7.50			9/15/2029		15,000		21,773		21,573

Total Canada							40,000		47,014		46,357


*Mexico — 0.2%:**
Mexico Government International Bond+		5.55			1/21/2045		60,000		64,737		61,350

Total Foreign Government							100,000		111,751		107,707

*Mortgage-Backed Securities — 6.7%:**
Banc of America Commercial Mortgage Trust 2008-1 A4		6.22	^#		2/10/2051		118,508		128,922		125,507
Bear Stearns Commercial Mortgage Securities Trust 2006-PWR14 AM		5.24			12/11/2038		120,000		125,459		122,336
Bear Stearns Commercial Mortgage Securities Trust 2006-TOP22 AM		5.62	^#		4/12/2038		130,000		133,129		130,614

See accompanying Notes to Financial Statements.

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December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Mortgage-Backed Securities (Continued)
Bear Stearns Commercial Mortgage Securities Trust 2006-TOP24 AM		5.57	^# %		10/12/2041		120,000		$125,783		$122,439
Bear Stearns Commercial Mortgage Securities Trust 2007-PWR17 AM		5.88	^#		6/11/2050		85,000		91,272		89,413
Fannie Mae Connecticut Avenue Securities CAS 2015-C03 1M1		1.92	^#		7/25/2025		97,143		97,264		97,171
Fannie Mae Connecticut Avenue Securities CAS 2015-C04 1M1		2.02	^#		4/25/2028		59,266		59,266		59,195
GS Mortgage Securities Trust 2015-GC32 B		4.40	^#		7/10/2048		100,000		102,970		102,414
JPMorgan Chase Commercial Mortgage Securities Trust 2006-LDP7 AM		5.91	^#		4/15/2045		120,000		124,587		121,143
JPMorgan Chase Commercial Mortgage Securities Trust 2007-CIBC20 AM		5.88	^#		2/12/2051		110,000		119,588		116,139
ML-CFC Commercial Mortgage Trust 2006-3 AM		5.46	^#		7/12/2046		70,000		72,708		71,149
ML-CFC Commercial Mortgage Trust 2006-4 AM		5.20			12/12/2049		120,000		125,470		123,153
Morgan Stanley Capital I Trust 2006-IQ12 AM		5.37			12/15/2043		120,000		125,998		122,276
Morgan Stanley Capital I Trust 2008-TOP29 A4		6.27	^#		1/11/2043		114,883		125,769		122,245
Wachovia Bank Commercial Mortgage Trust 2007-C33 A1A		5.95	^#		2/15/2051		108,490		116,765		113,645

Total Mortgage-Backed Securities							1,593,290		1,674,950		1,638,839

*U.S. Treasury & Government Agencies — 30.5%:**
Federal Home Loan Mortgage Corp.		3.50			11/1/2045		249,622		259,973		257,612
Federal Home Loan Mortgage Corp. TBA		3.50			1/1/2046		175,000		180,715		180,127
Federal Home Loan Mortgage Corp. TBA		4.00			1/1/2046		450,000		476,437		475,312
Federal National Mortgage Association		3.50			11/1/2045		323,638		337,431		334,555
Federal National Mortgage Association		3.50			12/1/2045		448,565		464,540		463,842
Federal National Mortgage Association TBA		2.50			1/1/2031		600,000		607,031		604,781
Federal National Mortgage Association TBA		2.50			1/1/2046		575,000		557,548		555,347
Federal National Mortgage Association TBA		3.00			1/1/2046		1,050,000		1,048,031		1,049,754
Federal National Mortgage Association TBA		4.00			1/1/2046		250,000		264,883		264,492
Government National Mortgage Association TBA		3.00			1/1/2046		350,000		354,594		354,566
Government National Mortgage Association TBA		3.50			1/1/2046		400,000		416,969		417,000
Government National Mortgage Association TBA		4.50			1/1/2046		1,175,000		1,259,269		1,262,391
U.S. Treasury Bond``		3.00			11/15/2044		795,000		795,385		792,112
U.S. Treasury Bond		3.50			2/15/2039		325,000		361,669		359,481
U.S. Treasury Note		1.38			4/30/2020		120,000		118,476		118,448

Total U.S. Treasury & Government Agencies							7,286,825		7,502,951		7,489,820

Total Fixed Income							21,268,386		21,814,141		21,472,529

See accompanying Notes to Financial Statements.

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SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


						SHARES		COST		FAIR VALUE
*Mutual Fund — 8.6%:**
Babson U.S. High Yield Fund							218,295		$2,100,000		$2,104,366


	STRIKE PRICE			EXPIRATION DATE		NOTIONAL		COST		FAIR VALUE
*Purchased Options — 0.5%:**

*Call Option Purchased — 0.5%:**
OTC—BCM Option with JPMorgan Chase Bank, N.A.		$6.65			7/27/2016		4,760,000		50,190		126,564


*Put Options Purchased — 0.0%:**
OTC—BCM Swaption with JPMorgan Chase Bank, N.A		120.00			3/16/2016		1,800,000		3,780		2,110
OTC—BCM Swaption with JPMorgan Chase Bank, N.A		120.00			3/16/2016		3,600,000		7,560		4,219
OTC—BCM Swaption with JPMorgan Chase Bank, N.A		120.00			3/16/2016		650,000		1,170		762

Total Put Options							6,050,000		12,510		7,091

Total Purchased Options							10,810,000		62,700		133,655


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Short-Term Investments — 25.4%:**

*Bank Deposit — 4.2%:**
State Street Bank & Trust Co. Euro Time Deposit		0.01	%		1/4/2016		1,029,894		1,029,894		1,029,894

*Commercial Paper — 20.7%:**

*Chemicals — 5.1%:**
Agrium, Inc.		Zero Coupon			1/15/2016		625,000		624,793		624,793
Airgas, Inc.		Zero Coupon			3/28/2016		625,000		623,565		623,565

Total Chemicals							1,250,000		1,248,358		1,248,358


*Electric — 2.5%:**
Public Service Enterprise Group, Inc.		Zero Coupon			1/28/2016		625,000		624,555		624,555


*Packaging and Containers — 2.9%:**
Bemis Co., Inc.		Zero Coupon			1/20/2016		700,000		699,704		699,704


*Pipelines — 2.5%:**
TransCanada		Zero Coupon			2/16/2016		625,000		624,026		624,026


*Software — 2.6%:**
Hewlett Packard Enterprise Co.		Zero Coupon			1/11/2016		625,000		624,835		624,835

See accompanying Notes to Financial Statements.

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December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Commercial Paper (Continued)

*Telecommunications — 5.1%:**
Deutsche Telecom AG+		Zero Coupon			1/29/2016		625,000		$624,587		$624,587
Telus Corp.+		Zero Coupon			2/17/2016		625,000		624,502		624,502

Total Telecommunications							1,250,000		1,249,089		1,249,089

Total Commercial Paper							5,075,000		5,070,567		5,070,567

*Corporate Bonds — 0.5%:**

*Commercial Banks — 0.1%:**
Bank of America Corp. MTN		3.63	%		3/17/2016		25,000		25,148		25,129


*Telecommunications — 0.3%:**
Embarq Corp.		7.08			6/1/2016		30,000		30,655		30,468
Telefonica Emisiones SAU+		3.99			2/16/2016		40,000		40,144		40,110

Total Telecommunications							70,000		70,799		70,578


*Transportation — 0.1%:**
Penske Truck Leasing Co. LP/PTL Finance Corp.^		2.50			3/15/2016		35,000		35,095		35,060

Total Corporate Bonds							130,000		131,042		130,767

Total Short-Term Investments							6,234,894		6,231,503		6,231,228

Total Investments							38,531,575		30,208,344		29,941,778


Other assets and liabilities — (22.0%)*											(5,407,219	)

Net Assets — 100.0%											$24,534,559

MTN	Medium Term Note

OTC	Over the Counter

TBA	To Be Announced: Securities purchased on a forward commitment basis with an approximate principal amount and maturity date. The actual principal amount and maturity date will be determined upon settlement.

‡‡	Unless otherwise indicated, all principal amounts are denominated in United States Dollars.

*	Calculated as a percentage of net assets applicable to common shareholders.

+	Foreign security.

Distributions of investments by country of risk (excluding temporary cash investments) as a percentage of total investments in securities, is as follows:


		United States			89.8%
		Canada			2.4%
		Germany			2.1%
		United Kingdom			1.2%
		Mexico			1.1%
		Other (Individually less than 1%)			3.4%

		Total			100.0%

See accompanying Notes to Financial Statements.

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December 31, 2015

^	Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers.

#	Variable rate security. The interest rate shown is the rate in effect at December 31, 2015.

``	Security has been fully or partially segregated to cover margin requirements for open futures contracts as of December 31, 2015.

A summary of outstanding derivatives at December 31, 2015 is as follows:

Cross Currency Forward Foreign Currency Exchange Contracts


EXPIRATION DATE	DELIVER/ RECEIVE	COUNTERPARTY	CONTRACT AMOUNT PURCHASED		CONTRACT AMOUNT SOLD		NET UNREALIZED APPRECIATION (DEPRECIATION)
3/1/16	HRK/EUR	Bank of America N.A.		99,494		13,000	$	(5	)
2/2/16	HUF/EUR	JPMorgan Chase Bank N.A.		7,841,130		25,000		(184	)
2/2/16	PLN/EUR	Citibank N.A.		136,861		32,000		67
2/2/16	RON/EUR	JPMorgan Chase Bank N.A.		57,719		13,000		(256	)

Net unrealized depreciation on cross currency forward foreign currency exchange contracts							$	(378	)

Forward Foreign Currency Exchange Contracts to Buy


EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
2/2/16	Bank of America N.A.		BRL	108,297		27,104		28,000	$	(896	)
2/2/16	Citibank N.A.		COP	39,553,080		12,424		14,000		(1,576	)
2/2/16	JPMorgan Chase Bank N.A.		IDR	196,546,000		14,081		14,000		81
2/2/16	Bank of America N.A.		KZT	4,449,200		12,412		14,000		(1,588	)
2/2/16	Bank of America N.A.		MXN	347,678		20,133		21,000		(867	)
2/2/16	Bank of America N.A.		MYR	90,453		20,958		21,000		(42	)
2/2/16	Bank of America N.A.		NOK	59,734		6,746		7,000		(254	)
2/2/16	JPMorgan Chase Bank N.A.		RUB	451,982		6,156		6,811		(655	)
2/2/16	Bank of America N.A.		SEK	59,740		7,083		7,000		83
2/2/16	Bank of America N.A.		TRY	101,524		34,522		35,000		(478	)
2/2/16	Bank of America N.A.		ZAR	685,859		44,125		49,000		(4,875	)

Net unrealized depreciation on forward foreign exchange contracts to buy									$	(11,067	)

See accompanying Notes to Financial Statements.

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December 31, 2015

Forward Foreign Currency Exchange Contracts to Sell


EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
2/2/16	Bank of America N.A.		AUD	15,490		11,272		11,000	$	(272	)
3/1/16	Bank of America N.A.		AUD	4,170		3,030		3,000		(30	)
2/2/16	Bank of America N.A.		BRL	108,297		27,105		27,762		657
2/2/16	Bank of America N.A.		CAD	14,416		10,419		11,000		581
2/2/16	JPMorgan Chase Bank N.A.		CHF	13,835		13,829		14,000		171
2/2/16	Citibank N.A.		CLP	7,679,650		10,802		11,000		198
3/1/16	Bank of America N.A.		CLP	2,156,400		3,024		3,000		(24	)
2/2/16	Bank of America N.A.		GBP	9,086		13,396		14,000		604
2/2/16	JPMorgan Chase Bank N.A.		IDR	196,546,000		14,081		13,986		(95	)
3/1/16	JPMorgan Chase Bank N.A.		IDR	396,340,000		28,143		28,000		(143	)
2/2/16	Bank of America N.A.		KZT	4,449,200		12,412		12,649		237
2/2/16	Citibank N.A.		MYR	29,757		6,895		7,000		105
2/2/16	JPMorgan Chase Bank N.A.		NOK	59,734		6,747		6,860		113
2/2/16	JPMorgan Chase Bank N.A.		NZD	27,180		18,558		18,000		(558	)
3/1/16	Bank of America N.A.		PEN	48,062		13,946		14,000		54
2/2/16	JPMorgan Chase Bank N.A.		PHP	660,226		14,036		14,000		(36	)
2/2/16	Bank of America N.A.		RUB	451,982		6,156		7,000		844
3/1/16	JPMorgan Chase Bank N.A.		RUB	474,030		6,410		7,000		590
2/2/16	JPMorgan Chase Bank N.A.		SEK	59,740		7,083		7,047		(36	)
2/2/16	JPMorgan Chase Bank N.A.		SGD	49,135		34,619		35,000		381

Net unrealized appreciation on forward foreign exchange contracts to sell									$	3,341

Currency Legend


AUD	–	Australian Dollar
BRL	–	Brazilian Real
CAD	–	Canadian Dollar
CHF	–	Swiss Franc
CLP	–	Chilean Peso
COP	–	Colombian Peso
GBP	–	British Pound Sterling
HRK	–	Croatian Kuna
HUF	–	Hungarian Forint
IDR	–	Indonesian Rupiah
KZT	–	Kazakhstani Tenge
MXN	–	Mexican Peso
MYR	–	Malaysian Ringgit
NOK	–	Norwegian Krona
NZD	–	New Zealand Dollar
PEN	–	Peruvian Nouveau Sol
PHP	–	Philippines Peso
PLN	–	Polish Zloty
RON	–	New Romanian Leu

See accompanying Notes to Financial Statements.

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December 31, 2015


RUB	–	Russian Ruble
SEK	–	Swedish Krona
SGD	–	Singapore Dollar
TRY	–	New Turkish Lira
ZAR	–	South African Rand

Futures


TYPE	EXPIRATION DATE	CONTRACTS		POSITION		FAIR VALUE		UNREALIZED APPRECIATION (DEPRECIATION)
U.S. 2-Year Treasury Note	03/31/16		15		Long	$	3,258,516	$	(5,993	)
U.S. 5-Year Treasury Note	03/31/16		24		Long		2,839,688		(6,193	)
U.S. Long Bond	03/21/16		1		Long		153,750		434
U.S. Ultra Bond	03/21/16		1		Long		158,687		950

								$	(10,802	)

TYPE

EXPIRATION
DATE

CONTRACTS

POSITION

FAIR VALUE

UNREALIZED
APPRECIATION

U.S. 10-Year Treasury Note

03/21/16

Short

755,438

2,590

Credit Default Swaps – Sell Protection⁽¹⁾

REFERENCE
OBLIGATION

FIIXED-DEAL
RECEIVED
RATE

MATURITY
DATE

COUNTERPARTY

ORIGINAL
NOTIONAL
AMOUNT

CURRENT
NOTIONAL
AMOUNT⁽²⁾

UPFRONT
PREMIUMS
PAID/
(RECEIVED)

FAIR
VALUE⁽³⁾

UNREALIZED
DEPRECIATION

Markit CMBX.NA.

BBB-.6

3.00

11/17/45

JPMorgan Chase
Bank N.A.

60,000

147

(1,885

)

(2,032

)

⁽¹⁾

⁽²⁾	The maximum potential amount the portfolio could be required to make as a seller of credit protection or receive as a buyer of credit event as defined under the terms of that particular swap agreement.

⁽³⁾

See accompanying Notes to Financial Statements.

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SCHEDULE OF INVESTMENTS (UNAUDITED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Fixed Income — 94.0%:**

*Corporate Bonds — 34.8%+:**

*Chemicals — 4.0%:**
Consolidated Energy Finance SA^		6.75	%		10/15/2019		200,000		$199,040		$191,190
OCP SA		6.88			4/25/2044		200,000		209,978		195,844

Total Chemicals							400,000		409,018		387,034


*Commercial Banks — 10.3%:**
BBVA Bancomer SA^		5.35	^#		11/12/2029		200,000		198,513		196,000
Emirates NBD Tier 1 Ltd.		5.75	^#		5/29/2049		200,000		200,499		191,000
ICICI Bank Ltd.^		7.25	^#		8/29/2049		200,000		202,497		202,000
NBK Tier 1 Financing Ltd.		5.75	^#		12/29/2049		200,000		203,244		198,500
Russian Agricultural Bank OJSC Via RSHB Capital SA^		5.30			12/27/2017		200,000		201,840		200,000

Total Commercial Banks							1,000,000		1,006,593		987,500


*Construction Materials — 2.2%:**
Cemex Finance LLC^		9.38			10/12/2022		200,000		218,852		210,500


*Electric — 6.1%:**
AES El Salvador Trust II^		6.75			3/28/2023		200,000		180,359		178,500
Empresa Electrica Angamos SA		4.88			5/25/2029		200,000		189,057		178,500
Israel Electric Corp. Ltd.^		6.88			6/21/2023		200,000		229,645		228,180

Total Electric							600,000		599,061		585,180


*Forestry and Paper Products — 1.9%:**
Klabin Finance SA^		5.25			7/16/2024		200,000		180,276		178,000


*Iron/Steel — 2.1%:**
Vale Overseas Ltd.		6.25			1/23/2017		200,000		204,254		199,620


*IT Services — 2.2%:**
Lenovo Group Ltd.		4.70			5/8/2019		200,000		208,783		206,558


*Real Estate — 4.3%:**
MAF Global Securities Ltd.		7.13	^#		10/29/2049		200,000		208,188		202,208
Sino-Ocean Land Perpetual Finance Ltd.^		10.25	^#		12/29/2049		200,000		207,245		204,736

Total Real Estate							400,000		415,433		406,944


*Telecommunications — 1.7%:**
Digicel Ltd.^		6.75			3/1/2023		200,000		187,243		167,000

Total Corporate Bonds							3,400,000		3,429,513		3,328,336

*Foreign Government — 59.2%+:**

*Colombia — 2.5%:**
Republic of Colombia		8.13			5/21/2024		200,000		248,881		239,800

See accompanying Notes to Financial Statements.

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SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Foreign Government (Continued)

*Costa Rica — 1.7%:**
Costa Rica Government Bond^		7.16	%		3/12/2045		200,000		$183,028		$167,500


*Croatia — 2.1%:**
Croatia Government Bond^		5.50			4/4/2023		200,000		208,082		203,040


*Dominican Republic — 2.1%:**
Dominican Republic International Bond^		5.88			4/18/2024		200,000		196,709		199,500


*El Salvador — 2.1%:**
Republic of El Salvador^		7.38			12/1/2019		200,000		206,725		199,300


*Ghana — 2.1%:**
Republic of Ghana^		10.75			10/14/2030		200,000		213,923		202,900


*Hungary — 4.3%:**
Hungary Government Bond		6.75			10/22/2028		90,000,000		423,779		407,078


*Indonesia — 6.8%:**
Indonesia Treasury Bond		8.38			3/15/2034		6,500,000,000		444,012		441,335
Republic of Indonesia^		5.88			1/15/2024		200,000		222,575		213,750

Total Indonesia							6,500,200,000		666,587		655,085


*Israel — 4.5%:**
Israel Government Bond		5.50			1/31/2042		1,200,000		448,574		432,466


*Jamaica — 2.1%:**
Government of Jamaica		6.75			4/28/2028		200,000		202,476		198,250


*Malaysia — 4.6%:**
Malaysia Government Bond		4.13			4/15/2032		2,000,000		447,340		438,113


*Mexico — 10.6%:**
Mexican Bonos		7.75			11/13/2042		10,000,000		682,571		636,050
United Mexican States		3.60			1/30/2025		200,000		199,508		194,800
United Mexican States		5.75			10/12/2049		200,000		188,003		186,500

Total Mexico							10,400,000		1,070,082		1,017,350


*Serbia — 4.2%:**
Serbia Treasury Bonds		10.00			2/5/2022		40,000,000		423,706		399,133


*Slovenia — 2.1%:**
Africa Finance Corp.^		4.38			4/29/2020		200,000		203,852		200,556


*South Africa — 5.3%:**
South Africa Government Bond		8.75			2/28/2048		9,300,000		624,632		507,292

See accompanying Notes to Financial Statements.

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December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Foreign Government (Continued)

*Uruguay — 2.1%:**
Republica Orient Uruguay		4.38	%		10/27/2027		200,000		$199,407		$196,500

Total Foreign Government							6,654,900,000		5,967,783		5,663,863

Total Fixed Income							6,658,300,000		9,397,296		8,992,199

*Short-Term Investments — 5.6%:**
*Bank Deposit — 0.9%:**
State Street Bank & Trust Co. Euro Time Deposit		0.01			1/4/2016		83,284		83,284		83,284

*Foreign Government — 4.7%+:**

*Turkey — 4.7%:**
Turkey Government Bond		2.50			5/4/2016		1,305,046		454,822		445,584

Total Short-Term Investments							1,388,330		538,106		528,868

Total Investments							6,659,688,330		9,935,402		9,521,067

Other assets and liabilities – 0.4%*											41,902

Net Assets – 100.0%											$9,562,969

‡‡	Unless otherwise indicated, all principal amounts are denominated in United States Dollars.

*	Calculated as a percentage of net assets applicable to common shareholders.

+	Foreign security.

Distributions of investments by country of risk (excluding temporary cash investments) as a percentage of total investments in securities, is as follows:


		Mexico			15.1%
		Israel			7.0%
		Indonesia			6.9%
		South Africa			5.4%
		Turkey			4.7%
		Malaysia			4.6%
		China			4.4%
		Hungary			4.3%
		Serbia			4.2%
		United Arab Emirates			4.2%
		El Salvador			4.0%
		Brazil			4.0%
		Jamaica			3.9%
		Colombia			2.5%
		Croatia			2.2%
		Ghana			2.2%
		India			2.1%
		Slovenia			2.1%
		Russia			2.1%
		Dominican Republic			2.1%

See accompanying Notes to Financial Statements.

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		Ukrainian Ssr			2.1%
		Uruguay			2.1%
		Morocco			2.1%
		Trinidad And Tobago			2.0%
		Chile			1.9%
		Costa Rica			1.8%

		Total			100.0%

^	Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers.

#	Variable rate security. The interest rate shown is the rate in effect at December 31, 2015.

A summary of outstanding derivatives at December 31, 2015 is as follows:

Cross Currency Forward Foreign Currency Exchange Contracts


EXPIRATION DATE	DELIVER/RECEIVE	COUNTERPARTY	CONTRACT AMOUNT PURCHASED		CONTRACT AMOUNT SOLD		NET UNREALIZED APPRECIATION (DEPRECIATION)
3/1/16	HRK/EUR	Bank of America N.A.		1,423,532		186,000	$	(81	)
1/26/16	PLN/EUR	Bank of America N.A.		222,369		52,000		121
1/26/16	PLN/EUR	JPMorgan Chase Bank N.A.		1,718,041		400,000		2,844
2/2/16	RON/EUR	Citibank N.A.		799,838		180,000		(3,381	)
2/2/16	RSD/EUR	Citibank N.A.		5,805,600		48,000		(438	)

Net unrealized depreciation on cross currency forward foreign currency exchange contracts							$	(935	)

Forward Foreign Currency Exchange Contracts to Buy


EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
2/2/16	Bank of America N.A.		BRL	1,535,497		384,303		397,000	$	(12,697	)
1/25/16	JPMorgan Chase Bank N.A.		CAD	391,837		283,192		299,000		(15,808	)
1/26/16	Bank of America N.A.		CLP	53,048,000		74,682		76,000		(1,318	)
2/2/16	Citibank N.A.		COP	562,178,980		176,590		199,000		(22,410	)
1/26/16	Citibank N.A.		IDR	2,518,615,000		181,016		181,000		16
2/2/16	Bank of America N.A.		KZT	63,242,200		176,422		199,000		(22,578	)
2/2/16	Citibank N.A.		NOK	840,117		94,884		99,000		(4,116	)
2/2/16	JPMorgan Chase Bank N.A.		RUB	6,392,311		87,065		96,331		(9,266	)
2/2/16	Bank of America N.A.		SEK	844,895		100,172		99,000		1,172
2/2/16	Bank of America N.A.		TRY	171,140		58,194		59,000		(806	)
2/2/16	Bank of America N.A.		ZAR	3,639,250		234,130		260,000		(25,870	)
2/9/16	Bank of America N.A.		ZAR	1,441,129		92,595		100,000		(7,405	)

Net unrealized depreciation on forward foreign exchange contracts to buy									$	(121,086	)

See accompanying Notes to Financial Statements.

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December 31, 2015

Forward Foreign Currency Exchange Contracts to Sell


EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
1/27/16	Bank of America N.A.		AUD	211,203		153,738		151,000	$	(2,738	)
3/1/16	Bank of America N.A.		AUD	65,336		47,479		47,000		(479	)
2/2/16	Bank of America N.A.		BRL	1,535,497		384,303		393,426		9,123
1/25/16	JPMorgan Chase Bank N.A.		CAD	590,621		426,859		450,000		23,141
2/2/16	JPMorgan Chase Bank N.A.		CHF	196,650		196,569		199,000		2,431
1/26/16	Citibank N.A.		CLP	156,555,000		220,400		225,000		4,600
3/1/16	Bank of America N.A.		CLP	39,534,000		55,437		55,000		(437	)
1/26/16	Bank of America N.A.		EUR	1,255,597		873,765		1,406,145		26,235
2/2/16	Bank of America N.A.		GBP	129,156		190,416		199,000		8,584
1/26/16	Citibank N.A.		IDR	6,124,059,500		440,144		434,485		(5,660	)
3/1/16	JPMorgan Chase Bank N.A.		IDR	8,436,380,000		599,041		596,000		(3,041	)
1/26/16	Citibank N.A.		ILS	1,742,400		447,939		450,652		2,714
2/2/16	Bank of America N.A.		KZT	63,242,200		176,422		179,793		3,371
2/2/16	Bank of America N.A.		MXN	2,500,633		144,802		151,000		6,198
2/16/16	Bank of America N.A.		MXN	4,037,004		233,538		243,789		10,251
2/2/16	Bank of America N.A.		MYR	639,400		148,151		148,000		(151	)
3/1/16	Citibank N.A.		MYR	404,301		93,596		95,000		1,404
2/2/16	JPMorgan Chase Bank N.A.		NOK	840,117		94,884		96,478		1,594
1/27/16	JPMorgan Chase Bank N.A.		NZD	373,857		255,364		249,000		(6,364	)
3/1/16	Bank of America N.A.		PEN	683,167		198,237		199,000		763
2/2/16	JPMorgan Chase Bank N.A.		PHP	9,384,641		199,507		199,000		(507	)
2/2/16	Bank of America N.A.		RUB	6,392,311		87,065		99,000		11,935
3/1/16	JPMorgan Chase Bank N.A.		RUB	6,704,132		90,656		99,000		8,344
2/2/16	JPMorgan Chase Bank N.A.		SEK	844,895		100,172		99,667		(505	)
2/2/16	JPMorgan Chase Bank N.A.		SGD	697,712		491,593		497,000		5,407

Net unrealized appreciation on forward foreign exchange contracts to sell									$	106,213

Currency Legend


AUD	–	Australian Dollar
BRL	–	Brazilian Real
CAD	–	Canadian Dollar
CHF	–	Swiss Franc
CLP	–	Chilean Peso
COP	–	Colombian Peso
EUR	–	Euro
GBP	–	British Pound Sterling
HRK	–	Croatian Kuna
IDR	–	Indonesian Rupiah
ILS	–	Israeli Shekel
KZT	–	Kazakhstani Tenge
MXN	–	Mexican Peso
MYR	–	Malaysian Ringgit

See accompanying Notes to Financial Statements.

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December 31, 2015


NOK	–	Norwegian Krona
NZD	–	New Zealand Dollar
PEN	–	Peruvian Nouveau Sol
PHP	–	Philippines Peso
PLN	–	Polish Zloty
RON	–	New Romanian Leu
RSD	–	Serbian Dinar.
RUB	–	Russian Ruble
SEK	–	Swedish Krona
SGD	–	Singapore Dollar
TRY	–	New Turkish Lira
ZAR	–	South African Rand

Future

TYPE

EXPIRATION
DATE

CONTRACTS

POSITION

FAIR
VALUE

UNREALIZED
APPRECIATION

U.S. 10-Year Treasury Note

03/21/16

Short

377,719

1,022

Credit Default Swaps – Sell Protection⁽¹⁾


REFERENCE OBLIGATION	FIIXED-DEAL RECEIVED RATE			MATURITY DATE		COUNTERPARTY		ORIGINAL NOTIONAL AMOUNT		CURRENT NOTIONAL AMOUNT⁽²⁾		UPFRONT PREMIUMS PAID/ (RECEIVED)		FAIR VALUE⁽³⁾			UNREALIZED APPRECIATION

Pernerbangan Malaysia Bhd		1.00	%		12/20/20		Bank of America N.A.		200,000		200,000	$	9,276	$	(7,281	)	$	1,994

⁽¹⁾

⁽²⁾	The maximum potential amount the portfolio could be required to make as a seller of credit protection or receive as a buyer of credit event as defined under the terms of that particular swap agreement.

⁽³⁾

See accompanying Notes to Financial Statements.

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December 31, 2015

OTC – Interest Rate Swaps


DESCRIPTION	NOTIONAL AMOUNT	UNREALIZED APPRECIATION		VALUE
Agreement with Bank of America N.A. dated 12/21/15 receiving a fixed rate of 16.16% paying the notional amount multiplied by the BRL-CDI rate. Expiring 1/2/25	961,503	$	10,877	$	10,877

See accompanying Notes to Financial Statements.

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December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Fixed Income — 90.1%:**

*Foreign Government — 90.1%+:**

*Brazil — 9.0%:**
Brazil Letras do Tesouro Nacional		Zero Coupon			1/1/2017		2,000,000		$463,542		$436,667


*Colombia — 10.5%:**
Colombian TES		7.75	%		9/18/2030		1,800,000,000		492,987		508,367


*Hungary — 4.4%:**
Hungary Government Bond		5.50			12/20/2018		57,000,000		215,244		213,157


*Indonesia — 10.5%:**
Indonesia Treasury Bond		8.38			3/15/2034		7,500,000,000		513,213		509,233


*Israel — 4.5%:**
Israel Government Bond		5.50			1/31/2042		600,000		221,137		216,230


*Malaysia — 11.8%:**
Malaysia Government Bond		3.48			3/15/2023		2,000,000		447,378		446,059
Malaysia Government Bond		4.50			4/15/2030		550,000		128,533		126,802

Total Malaysia							2,550,000		575,911		572,861


*Mexico — 4.4%:**
Mexican Bonos		7.75			11/13/2042		3,400,000		218,527		215,798


*Philippines — 4.5%:**
Philippine Government International Bond		4.95			1/15/2021		10,000,000		220,930		215,971


*Poland — 4.6%:**
Poland Government Bond		5.25			10/25/2020		775,000		221,948		223,043


*Romania — 4.3%:**
Romania Government Bond		6.75			6/11/2017		800,000		210,466		207,208


*Russia — 4.3%:**
Russian Federal Inflation Linked Bond		2.50			8/16/2023		15,375,150		221,676		209,930


*Serbia — 4.1%:**
Serbia Treasury Bonds		10.00			2/5/2022		20,000,000		202,658		199,835


*South Africa — 6.6%:**
South Africa Government Bond		8.75			2/28/2048		5,900,000		361,454		321,197


*Thailand — 4.6%:**
Thailand Government Bond		1.20			7/14/2021		8,510,800		225,887		223,676


*Uruguay — 2.0%:**
Uruguay Government International Bond		4.38			12/15/2028		3,225,630		99,258		97,044

Total Foreign Government							9,430,136,580		4,464,838		4,370,217

Total Fixed Income							9,430,136,580		4,464,838		4,370,217

See accompanying Notes to Financial Statements.

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December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Short-Term Investments — 9.5%:**
*Bank Deposit — 7.5%:**
State Street Bank & Trust Co. Euro Time Deposit		0.01	%		1/4/2016		363,781		$363,781		$363,781

*Foreign Government — 2.0%+:**

*Argentina — 2.0%:**
Argentine Bonad Bonds¤		1.75			10/28/2016		112,000		100,353		94,640

Total Short-Term Investments							475,781		464,134		458,421

Total Investments							9,430,612,361		4,928,972		4,828,638


Other assets and liabilities — 0.4%*											19,248

Net Assets — 100.0%											$4,847,886

‡‡	Unless otherwise indicated, all principal amounts are denominated in United States Dollars.

*	Calculated as a percentage of net assets applicable to common shareholders.

+	Foreign security.

Distributions of investments by country of risk (excluding temporary cash investments) as a percentage of total investments in securities, is as follows:


		Malaysia			12.8%
		Indonesia			11.4%
		Colombia			11.4%
		Brazil			9.8%
		South Africa			7.2%
		Thailand			5.0%
		Poland			5.0%
		Israel			4.9%
		Philippines			4.8%
		Mexico			4.8%
		Hungary			4.8%
		Russia			4.7%
		Romania			4.6%
		Serbia			4.5%
		Uruguay			2.2%
		Argentina			2.1%

		Total			100.0%

¤	For fair value measurement disclosure purposes, security is categorized as Level 3 (See Note 2).

See accompanying Notes to Financial Statements.

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December 31, 2015

Forward Foreign Currency Exchange Contracts to Buy


EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
3/8/16	Citibank N.A.		HUF	71,409,975		245,217		247,900	$	(2,683	)
3/8/16	JPMorgan Chase Bank N.A.		MXN	6,420,288		370,083		375,000		(4,917	)
3/8/16	Bank of America N.A.		NOK	435,492		49,169		50,000		(831	)
3/8/16	JPMorgan Chase Bank N.A.		PLN	2,677,802		677,275		675,000		2,275
3/8/16	Citibank N.A.		RSD	13,981,250		124,341		125,000		(659	)
3/8/16	Citibank N.A.		SEK	421,273		50,059		50,000		59
3/8/16	Citibank N.A.		TRY	2,040,134		686,347		683,550		2,797
3/8/16	Citibank N.A.		ZAR	6,935,295		442,384		470,450		(28,066	)

Net unrealized depreciation on forward foreign exchange contracts to buy									$	(32,025	)

Forward Foreign Currency Exchange Contracts to Sell


EXPIRATION DATE	COUNTERPARTY		LOCAL CURRENCY		VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
3/8/16	Citibank N.A.	AUD		139,422		101,120		100,000	$	(1,120	)
3/8/16	Bank of America N.A.	CAD		101,793		73,291		75,000		1,709
3/8/16	JPMorgan Chase Bank N.A.	CHF		98,547		98,711		100,000		1,289
3/8/16	Bank of America N.A.	CLP		67,386,200		94,415		94,750		335
3/8/16	JPMorgan Chase Bank N.A.	EUR		730,305		794,572		801,400		6,828
3/8/16	Bank of America N.A.	GBP		66,266		97,679		100,000		2,321
3/8/16	Citibank N.A.	IDR		2,130,034,825		151,251		148,450		(2,801	)
3/8/16	Bank of America N.A.	ILS		855,300		220,078		221,634		1,556
3/8/16	Bank of America N.A.	NZD		189,718		129,387		125,000		(4,387	)
3/8/16	Citibank N.A.	PHP		14,313,320		303,205		300,700		(2,505	)
3/8/16	Bank of America N.A.	RON		892,495		214,448		217,602		3,154
3/8/16	Citibank N.A.	SGD		352,442		247,936		250,000		2,064

Net unrealized appreciation on forward foreign exchange contracts to sell									$	8,443

Currency Legend


AUD	–	Australian Dollar
CAD	–	Canadian Dollar
CHF	–	Swiss Franc
CLP	–	Chilean Peso
EUR	–	Euro
GBP	–	British Pound Sterling
HUF	–	Hungarian Forint
IDR	–	Indonesian Rupiah
ILS	–	Israeli Shekel
MXN	–	Mexican Peso
NOK	–	Norwegian Krona

See accompanying Notes to Financial Statements.

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December 31, 2015


NZD	–	New Zealand Dollar
PHP	–	Philippines Peso
PLN	–	Polish Zloty
RON	–	New Romanian Leu
RSD	–	Serbian Dinar.
SEK	–	Swedish Krona
SGD	–	Singapore Dollar
TRY	–	New Turkish Lira
ZAR	–	South African Rand

OTC – Interest Rate Swaps


DESCRIPTION	NOTIONAL AMOUNT		UNREALIZED APPRECIATION (DEPRECIATION)			VALUE
Agreement with Bank of America N.A. dated 12/9/15 paying a fixed rate of 15.38% recieving the notional amount multiplied by the BRL-CDI rate. Expiring 1/2/25		357,308	$	7,952		$	7,952
Agreement with Bank of America N.A. dated 12/9/15 receiving a fixed rate of 8.68% paying the notional amount multiplied by the ZAR-JIBAR rate. Expiring 12/9/25		8,000,000		(26,145	)		(26,145	)
Agreement with JPMorgan Chase Bank N.A. dated 12/9/15 receiving a fixed rate of 6.35% paying the notional amount multiplied by the MXN-TIIE rate. Expiring 11/27/25		9,500,000		(2,920	)		(2,920	)

						$	(21,113	)

See accompanying Notes to Financial Statements.

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SCHEDULE OF INVESTMENTS (UNAUDITED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Fixed Income — 94.3%:**

*Corporate Bonds — 94.3%:**

*Aerospace and Defense — 7.4%:**
CPI International, Inc.		8.75	%		2/15/2018		500,000		$503,515		$492,500
DigitalGlobe, Inc.^		5.25			2/1/2021		250,000		223,739		210,000
Huntington Ingalls Industries, Inc.^		5.00			11/15/2025		700,000		700,000		710,500
Swissport Investments SA+		6.75			12/15/2021		150,000		164,235		168,922
TransDigm, Inc.^		6.50			5/15/2025		223,000		226,543		216,031

Total Aerospace and Defense							1,823,000		1,818,032		1,797,953


*Automobile — 3.2%:**
Affinia Group, Inc.		7.75			5/1/2021		250,000		260,656		254,450
Gates Global LLC/Gates Global Co.^		6.00			7/15/2022		125,000		95,335		90,000
Goodyear Tire & Rubber Co. (The)		5.13			11/15/2023		218,000		218,000		223,450
International Automotive Components Group SA^		9.13			6/1/2018		250,000		252,361		213,750

Total Automobile							843,000		826,352		781,650


*Banking — 0.9%:**
Lock AS+		7.00			8/15/2021		200,000		231,221		226,500


*Beverage, Food and Tobacco — 1.4%:**
Boparan Finance PLC+		5.50			7/15/2021		250,000		355,474		326,167


*Broadcasting and Entertainment — 5.3%:**
CCOH Safari LLC^		5.75			2/15/2026		750,000		750,000		751,875
Entertainment One Ltd.+		6.88			12/15/2022		100,000		150,251		146,757
Gray Television, Inc.		7.50			10/1/2020		174,000		181,560		178,785
Unitymedia Hessen GmbH & Co. KG / Unitymedia NRW GmbH+		3.50			1/15/2027		200,000		214,401		199,962

Total Broadcasting and Entertainment							1,224,000		1,296,212		1,277,379


*Buildings and Real Estate — 4.7%:**
Brookfield Residential Properties, Inc.+^		6.50			12/15/2020		250,000		249,390		240,938
M/I Homes, Inc.^		6.75			1/15/2021		250,000		250,000		246,250
Paroc Group Oy+		6.25			5/15/2020		150,000		158,362		155,698
Summit Materials LLC / Summit Materials Finance Corp.^		6.13			7/15/2023		500,000		496,913		492,500

Total Buildings and Real Estate							1,150,000		1,154,665		1,135,386


*Cargo Transport — 5.8%:**
Moto Finance PLC+		6.38			9/1/2020		100,000		156,347		151,400
OPE KAG Finance Sub, Inc.^		7.88			7/31/2023		750,000		781,437		745,313
WFS Global Holding SAS+		9.50			7/15/2022		250,000		281,825		284,495
XPO Logistics, Inc.^		6.50			6/15/2022		250,000		225,452		231,250

Total Cargo Transport							1,350,000		1,445,061		1,412,458

See accompanying Notes to Financial Statements.

132

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SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Chemicals, Plastics and Rubber — 5.1%:**
Consolidated Energy Finance SA+^		6.75	%		10/15/2019		370,000		$363,265		$353,701
Huntsman International LLC		4.88			11/15/2020		250,000		237,967		228,125
INEOS Group Holdings SA+		5.75			2/15/2019		200,000		221,244		217,350
LSB Industries, Inc.		7.75			8/1/2019		63,000		54,499		52,290
Platform Specialty Products Corp.^		10.38			5/1/2021		392,000		392,000		391,020

Total Chemicals, Plastics and Rubber							1,275,000		1,268,975		1,242,486


*Containers, Packaging and Glass — 5.4%:**
Ardagh Packaging Finance plc / Ardagh Holdings USA, Inc.^		6.25			1/31/2019		250,000		252,399		240,000
Coveris Holdings SA^		7.88			11/1/2019		250,000		240,480		218,125
Horizon Holdings I SASU+		7.25			8/1/2023		300,000		344,301		337,358
Mustang Merger Corp.^		8.50			8/15/2021		334,000		351,269		346,525
SIG Combibloc Holdings SCA+		7.75			2/15/2023		150,000		173,721		169,940

Total Containers, Packaging and Glass							1,284,000		1,362,170		1,311,948


*Diversified Natural Resources, Precious Metals and Minerals — 1.8%:**
Cemex SAB de CV+^		6.13			5/5/2025		500,000		480,731		427,500


*Diversified/Conglomerate Manufacturing — 1.8%:**
EnPro Industries, Inc.		5.88			9/15/2022		221,000		223,168		218,790
West Corp.^		5.38			7/15/2022		250,000		239,574		215,625

Total Diversified/Conglomerate Manufacturing							471,000		462,742		434,415


*Diversified/Conglomerate Service — 3.0%:**
Sabre GLBL, Inc.^		5.25			11/15/2023		307,000		307,000		303,546
Verisure Holding AB+		6.00			11/1/2022		150,000		168,899		169,533
Zachry Holdings, Inc.^		7.50			2/1/2020		250,000		253,027		245,000

Total Diversified/Conglomerate Service							707,000		728,926		718,079


*Finance — 8.2%:**
Ally Financial, Inc.		3.25			11/5/2018		750,000		748,988		735,937
CNH Industrial Capital LLC		4.38			11/6/2020		500,000		497,307		471,250
Galaxy Finco Ltd.+		7.88			11/15/2021		250,000		381,934		368,550
Garfunkelux Holdco 3 SA+		8.50			11/1/2022		200,000		312,881		296,314
Worldpay Finance PLC+		3.75			11/15/2022		100,000		108,765		110,713

Total Finance							1,800,000		2,049,875		1,982,764


*Healthcare, Education and Childcare — 11.6%:**
Alere, Inc.^		6.38			7/1/2023		250,000		257,292		233,750
Capsugel SA PIK^		7.00			5/15/2019		375,000		378,375		365,625
HCA, Inc.		5.38			2/1/2025		375,000		381,485		370,313
HCA, Inc.		5.88			2/15/2026		375,000		375,000		376,406
Kindred Healthcare, Inc.		8.75			1/15/2023		250,000		256,161		228,750

See accompanying Notes to Financial Statements.

133

Babson Global High Yield Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

Healthcare, Education and Childcare (Continued)
MEDNAX, Inc.^		5.25	%		12/1/2023		101,000		$101,000		$101,505
Molina Healthcare, Inc.^		5.38			11/15/2022		750,000		750,000		750,000
Valeant Pharmaceuticals International, Inc.^		6.13			4/15/2025		425,000		366,374		379,312

Total Healthcare, Education and Childcare							2,901,000		2,865,687		2,805,661


*Home and Office Furnishings, Housewares, and Durable Consumer Products — 1.4%:**
LSF9 Balta Issuer SA+		7.75			9/15/2022		300,000		344,738		341,968


*Hotels, Motels, Inns and Gaming — 1.0%:**
Churchill Downs, Inc.^		5.38			12/15/2021		246,000		248,444		246,615


*Insurance — 0.9%:**
York Risk Services Holding Corp.^		8.50			10/1/2022		250,000		223,813		205,000


*Leisure, Amusement, Entertainment — 3.2%:**
Brunswick Corp.		7.13			8/1/2027		167,000		179,925		177,020
CPUK Finance Ltd.+		7.00			2/28/2042		200,000		311,769		301,474
Odeon & UCI Finco PLC MTN+		9.00			8/1/2018		100,000		158,256		153,096
Perform Group Financing PLC+		8.50			11/15/2020		100,000		149,194		137,115

Total Leisure, Amusement, Entertainment							567,000		799,144		768,705


*Machinery Non-Agriculture, Non-Construction, Non-Electronic — 1.0%:**
Xerium Technologies, Inc.		8.88			6/15/2018		250,000		253,606		245,031


*Mining, Steel, Iron and Non-Precious Metals — 1.7%:**
Constellium NV		7.00			1/15/2023		250,000		239,754		219,252
Hecla Mining Co.		6.88			5/1/2021		250,000		212,704		182,500

Total Mining, Steel, Iron and Non-Precious Metals							500,000		452,458		401,752


*Oil and Gas — 7.3%:**
Calumet Specialty Products Partners LP / Calumet Finance Corp.^		7.75			4/15/2023		52,000		49,437		44,200
Citgo Holding, Inc.^		10.75			2/15/2020		341,000		346,010		330,770
EP Energy LLC/Everest Acquisition Finance, Inc.		9.38			5/1/2020		508,000		452,368		323,850
Genesis Energy LP/Genesis Energy Finance Corp.		6.75			8/1/2022		250,000		244,434		212,500
Newfield Exploration Co.		5.38			1/1/2026		250,000		241,350		206,875
PBF Holding Co. LLC / PBF Finance Corp.^		7.00			11/15/2023		500,000		500,000		487,500
Tullow Oil PLC+^		6.25			4/15/2022		250,000		193,345		167,500

Total Oil and Gas							2,151,000		2,026,944		1,773,195


*Personal Transportation — 0.9%:**
AA Bond Co. Ltd.+		5.50			7/31/2043		150,000		221,578		209,797

See accompanying Notes to Financial Statements.

134

Babson Global High Yield Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Retail Stores — 3.6%:**
Brighthouse Group PLC MTN+		7.88	%		5/15/2018		100,000		$146,910		$141,328
Debenhams PLC+		5.25			7/15/2021		150,000		232,803		220,010
Dollar Tree, Inc.^		5.75			3/1/2023		500,000		525,495		517,500

Total Retail Stores							750,000		905,208		878,838


*Telecommunications — 7.7%:**
Altice Financing SA+^		6.63			2/15/2023		250,000		251,718		246,875
Sprint Corp.		7.88			9/15/2023		250,000		229,040		187,750
T-Mobile USA, Inc.		6.50			1/15/2026		750,000		750,000		757,118
Virgin Media Secured Finance PLC MTN+		5.13			1/15/2025		150,000		227,108		209,521
Wind Acquisition Finance SA+		7.00			4/23/2021		250,000		269,758		268,291
Ziggo Bond Finance BV+		4.63			1/15/2025		200,000		205,604		201,592

Total Telecommunications							1,850,000		1,933,228		1,871,147

Total Corporate Bonds							22,792,000		23,755,284		22,822,394

Total Fixed Income							22,792,000		23,755,284		22,822,394

*Short-Term Investment — 4.7%:**

*Bank Deposit — 4.7%:**
State Street Bank & Trust Co. Euro Time Deposit		0.01			1/4/2016		1,147,156		1,147,156		1,147,156

Total Investments							23,939,156		24,902,440		23,969,550


Other assets and liabilities — 1.0%*											245,762

Net Assets — 100.0%											$24,215,312

MTN	Medium Term Note

PIK	Payment-in-kind

‡‡ Unless otherwise indicated, all principal amounts are denominated in United States Dollars.

*	Calculated as a percentage of net assets applicable to common shareholders.

+	Foreign security.

Distributions of investments by country of risk (excluding temporary cash investments) as a percentage of total investments in securities, is as follows:


		United States			69.5%
		United Kingdom			10.8%
		France			2.7%
		Switzerland			2.4%
		Germany			2.2%
		Mexico			1.9%
		Trinidad And Tobago			1.6%
		Belgium			1.5%
		Italy			1.2%

See accompanying Notes to Financial Statements.

135

Babson Global High Yield Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


		Portugal			1.1%
		Canada			1.1%
		Norway			1.0%
		Other (Individually less than 1%)			3.0%

		Total			100.0%

^	Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers.

A summary of outstanding derivatives at December 31, 2015 is as follows:

Forward Foreign Currency Exchange Contracts to Buy


EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED DEPRECIATION
1/8/16	JPMorgan Chase Bank N.A.		EUR	58,473		63,551		63,965	$	(414	)

Forward Foreign Currency Exchange Contracts to Sell


EXPIRATION DATE	COUNTERPARTY	LOCAL CURRENCY			VALUE IN USD		IN EXCHANGE FOR USD		NET UNREALIZED APPRECIATION (DEPRECIATION)
1/8/16	JPMorgan Chase Bank N.A.		EUR	2,799,255		3,042,330		2,974,544	$	(67,785	)
1/8/16	Bank of America N.A.		EUR	150,000		163,025		164,374		1,349
1/8/16	Bank of America N.A.		GBP	1,868,677		2,754,828		2,814,804		59,976

Net unrealized depreciation on forward foreign exchange contracts to sell									$	(6,460	)

Currency Legend


EUR	–	Euro
GBP	–	British Pound Sterling

See accompanying Notes to Financial Statements.

136

Babson U.S. High Yield Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
*Fixed Income — 84.6%:**

*Bank Loan — 0.3%§:**

*Oil and Gas — 0.3%:**
Fieldwood Energy LLC		8.38	^#%		9/30/2020		500,000		$196,110		$75,000

*Corporate Bonds — 84.3%:**

*Aerospace and Defense — 7.1%:**
American Airlines Group, Inc.^		4.63			3/1/2020		250,000		248,791		238,125
CPI International, Inc.		8.75			2/15/2018		500,000		503,515		492,500
DigitalGlobe, Inc.^		5.25			2/1/2021		250,000		223,738		210,000
Huntington Ingalls Industries, Inc.^		5.00			11/15/2025		700,000		700,000		710,500
TransDigm, Inc.^		6.50			5/15/2025		223,000		226,543		216,031

Total Aerospace and Defense							1,923,000		1,902,587		1,867,156


*Automobile — 3.0%:**
Affinia Group, Inc.		7.75			5/1/2021		250,000		260,656		254,450
Gates Global LLC/Gates Global Co.^		6.00			7/15/2022		125,000		95,335		90,000
Goodyear Tire & Rubber Co. (The)		5.13			11/15/2023		218,000		218,000		223,450
International Automotive Components Group SA^		9.13			6/1/2018		250,000		252,361		213,750

Total Automobile							843,000		826,352		781,650


*Beverage, Food and Tobacco — 2.3%:**
Carrols Restaurant Group, Inc.		8.00			5/1/2022		100,000		106,157		105,500
Constellation Brands, Inc.		4.75			12/1/2025		481,000		481,000		490,019

Total Beverage, Food and Tobacco							581,000		587,157		595,519


*Broadcasting and Entertainment — 4.5%:**
CCOH Safari LLC^		5.75			2/15/2026		750,000		750,000		751,875
Gray Television, Inc.		7.50			10/1/2020		174,000		181,560		178,785
RCN Telecom Services LLC/RCN Capital Corp.^		8.50			8/15/2020		250,000		257,955		252,500

Total Broadcasting and Entertainment							1,174,000		1,189,515		1,183,160


*Buildings and Real Estate — 4.7%:**
Allegion PLC		5.88			9/15/2023		250,000		264,904		255,000
Brookfield Residential Properties, Inc.+^		6.50			12/15/2020		250,000		249,390		240,937
M/I Homes, Inc.^		6.75			1/15/2021		250,000		250,000		246,250
Summit Materials LLC / Summit Materials Finance Corp.^		6.13			7/15/2023		500,000		496,913		492,500

Total Buildings and Real Estate							1,250,000		1,261,207		1,234,687


*Cargo Transport — 4.2%:**
OPE KAG Finance Sub, Inc.^		7.88			7/31/2023		750,000		781,437		745,313
XPO Logistics, Inc.^		6.50			6/15/2022		375,000		342,447		346,875

Total Cargo Transport							1,125,000		1,123,884		1,092,188

See accompanying Notes to Financial Statements.

137

Babson U.S. High Yield Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Chemicals, Plastics and Rubber — 4.4%:**
Consolidated Energy Finance SA+^		6.75	%		10/15/2019		370,000		$363,265		$353,702
Huntsman International LLC		4.88			11/15/2020		250,000		237,967		228,125
LSB Industries, Inc.		7.75			8/1/2019		63,000		54,497		52,290
OMNOVA Solutions, Inc.		7.88			11/1/2018		141,000		140,313		138,180
Platform Specialty Products Corp.^		10.38			5/1/2021		392,000		392,000		391,020

Total Chemicals, Plastics and Rubber							1,216,000		1,188,042		1,163,317


*Containers, Packaging and Glass — 3.5%:**
Coveris Holdings SA^		7.88			11/1/2019		250,000		240,479		218,125
Multi-Color Corp.^		6.13			12/1/2022		45,000		46,215		44,550
Mustang Merger Corp.^		8.50			8/15/2021		333,000		350,217		345,488
Sealed Air Corp.^		6.88			7/15/2033		300,000		310,630		306,750

Total Containers, Packaging and Glass							928,000		947,541		914,913


*Diversified Natural Resources, Precious Metals and Minerals — 1.6%:**
Cemex SAB de CV+^		6.13			5/5/2025		500,000		480,731		427,500


*Diversified/Conglomerate Manufacturing — 2.6%:**
EnPro Industries, Inc.		5.88			9/15/2022		220,000		222,158		217,800
StoneMor Partners LP/Cornerstone Family Services of West Virginia Subsidiary		7.88			6/1/2021		250,000		259,306		257,500
West Corp.^		5.38			7/15/2022		250,000		239,574		215,625

Total Diversified/Conglomerate Manufacturing							720,000		721,038		690,925


*Diversified/Conglomerate Service — 2.1%:**
Sabre GLBL, Inc.^		5.25			11/15/2023		307,000		307,000		303,546
Zachry Holdings, Inc.^		7.50			2/1/2020		250,000		253,027		245,000

Total Diversified/Conglomerate Service							557,000		560,027		548,546


*Finance — 5.6%:**
Ally Financial, Inc.		3.25			11/5/2018		750,000		748,989		735,937
CNH Industrial Capital LLC		4.38			11/6/2020		500,000		497,307		471,250
MSCI, Inc.^		5.75			8/15/2025		250,000		263,890		256,250

Total Finance							1,500,000		1,510,186		1,463,437


*Healthcare, Education and Childcare — 12.8%:**
Alere, Inc.^		6.38			7/1/2023		325,000		336,522		303,875
Capsugel SA PIK^		7.00			5/15/2019		375,000		378,375		365,625
DaVita HealthCare Partners, Inc.		5.00			5/1/2025		250,000		241,327		241,250
HCA, Inc.		5.38			2/1/2025		375,000		381,486		370,313
HCA, Inc.		5.88			2/15/2026		375,000		375,000		376,406
Kindred Healthcare, Inc.		8.75			1/15/2023		250,000		256,161		228,750
MEDNAX, Inc.^		5.25			12/1/2023		101,000		101,000		101,505
Molina Healthcare, Inc.^		5.38			11/15/2022		750,000		750,000		750,000

See accompanying Notes to Financial Statements.

138

Babson U.S. High Yield Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

Healthcare, Education and Childcare (Continued)
Tenet Healthcare Corp.		6.75	%		6/15/2023		250,000		$250,615		$231,875
Valeant Pharmaceuticals International, Inc.^		6.13			4/15/2025		425,000		366,374		379,312

Total Healthcare, Education and Childcare							3,476,000		3,436,860		3,348,911


*Hotels, Motels, Inns and Gaming — 1.0%:**
Churchill Downs, Inc.^		5.38			12/15/2021		247,000		249,453		247,618


*Insurance — 0.8%:**
York Risk Services Holding Corp.^		8.50			10/1/2022		250,000		223,813		205,000


*Leisure, Amusement, Entertainment — 2.1%:**
Brunswick Corp.^		4.63			5/15/2021		375,000		378,673		374,063
Brunswick Corp.		7.13			8/1/2027		167,000		179,925		177,020

Total Leisure, Amusement, Entertainment							542,000		558,598		551,083


*Machinery Non-Agriculture, Non-Construction, Non-Electronic — 0.9%:**
Xerium Technologies, Inc.		8.88			6/15/2018		250,000		253,606		245,031


*Mining, Steel, Iron and Non-Precious Metals — 0.7%:**
Hecla Mining Co.		6.88			5/1/2021		250,000		212,704		182,500


*Oil and Gas — 7.5%:**
Calumet Specialty Products Partners LP / Calumet Finance Corp.^		7.75			4/15/2023		53,000		50,388		45,050
Citgo Holding, Inc.^		10.75			2/15/2020		341,000		346,010		330,770
EP Energy LLC/Everest Acquisition Finance, Inc.		9.38			5/1/2020		507,000		451,474		323,212
Genesis Energy LP/Genesis Energy Finance Corp.		6.75			8/1/2022		250,000		244,434		212,500
Newfield Exploration Co.		5.38			1/1/2026		250,000		241,350		206,875
PBF Holding Co. LLC / PBF Finance Corp.^		7.00			11/15/2023		500,000		500,000		487,500
Tullow Oil PLC+^		6.25			4/15/2022		250,000		193,346		167,500
Welltec A/S+^		8.00			2/1/2019		200,000		188,595		187,500

Total Oil and Gas							2,351,000		2,215,597		1,960,907


*Personal Transportation — 0.9%:**
Watco Cos. LLC / Watco Finance Corp.^		6.38			4/1/2023		250,000		250,617		246,250


*Personal, Food and Miscellaneous — 1.6%:**
Landry’s, Inc.^		9.38			5/1/2020		405,000		433,408		426,263


*Printing and Publishing — 1.0%:**
MHGE Parent LLC/MHGE Parent Finance, Inc.^		8.50			8/1/2019		250,000		252,428		247,500


*Retail Stores — 3.9%:**
Dollar Tree, Inc.^		5.75			3/1/2023		500,000		525,495		517,500
Sally Holdings LLC / Sally Capital, Inc.		5.63			12/1/2025		500,000		500,000		505,000

Total Retail Stores							1,000,000		1,025,495		1,022,500

See accompanying Notes to Financial Statements.

139

Babson U.S. High Yield Fund 2015 Semi-Annual Report

SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


	EFFECTIVE INTEREST RATE			DUE DATE		PRINCIPAL ‡‡		COST		FAIR VALUE
Corporate Bonds (Continued)

*Telecommunications — 5.5%:**
Altice Financing SA+^		6.63	%		2/15/2023		250,000		$251,718		$246,875
Numericable-SFR SAS+^		6.00			5/15/2022		250,000		251,715		242,500
Sprint Corp.		7.88			9/15/2023		250,000		229,040		187,750
T-Mobile USA, Inc.		6.50			1/15/2026		750,000		750,000		757,117

Total Telecommunications							1,500,000		1,482,473		1,434,242

Total Corporate Bonds							23,088,000		22,893,319		22,080,803

Total Fixed Income							23,588,000		23,089,429		22,155,803

*Short-Term Investment — 14.7%:**

*Bank Deposit — 14.7%:**
State Street Bank & Trust Co. Euro Time Deposit		0.01			1/4/2016		3,864,268		3,864,268		3,864,268

Total Investments							27,452,268		26,953,697		26,020,071


Other assets and liabilities — 0.7%*											186,611

Net Assets — 100.0%											$26,206,682

PIK	Payment-in-kind

‡‡	Unless otherwise indicated, all principal amounts are denominated in United States Dollars.

*	Calculated as a percentage of net assets applicable to common shareholders.

+	Foreign security.

Distributions of investments by country of risk (excluding temporary cash investments) as a percentage of total investments in securities, is as follows:


		United States			91.6%
		Mexico			1.9%
		Trinidad And Tobago			1.6%
		Portugal			1.1%
		France			1.1%
		Canada			1.1%
		Other (Individually less than 1%)			1.6%

		Total			100.0%

^	Security acquired in a transaction exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified institutional buyers.

#	Variable rate security. The interest rate shown is the rate in effect at December 31, 2015.

See accompanying Notes to Financial Statements.

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1. Organization

Babson Capital Funds Trust (the “Trust”) was organized as a business trust under the laws of the Commonwealth of Massachusetts on May 3, 2013 and commenced operations on September 16, 2013. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. As of December 31, 2015, the Trust currently consists of eight non-diversified funds (separately, a “Fund” and collectively, the “Funds”): Babson Global Floating Rate Fund (“Global Floating Rate Fund”), Babson Global Credit Income Opportunities Fund (“Global Credit Income Opportunities Fund”), Babson Active Short Duration Bond Fund (“Active Short Duration Bond Fund”), Babson Total Return Bond Fund (“Total Return Bond Fund”), Babson Emerging Markets Debt Blended Total Return Fund (“Emerging Markets Blended Total Return Fund”), Babson Emerging Markets Local Currency Debt Fund (“Emerging Markets Local Currency Debt Fund”), Babson Global High Yield Fund (“Global High Yield Fund”) and Babson U.S. High Yield Fund (“U.S. High Yield Fund”). Active Short Duration Bond Fund and Total Return Bond Fund commenced operations on July 8, 2015. Emerging Markets Debt Blended Total Return Fund commenced operations on October 21, 2015. Emerging Markets Local Currency Debt Fund commenced operations on December 8, 2015. Global High Yield Fund and U.S. High Yield Fund commenced operations on October 30, 2015.

Babson Capital Management LLC (“BCGA”), a wholly-owned indirect subsidiary of Massachusetts Mutual Life Insurance Company, is a registered investment adviser under the Investment Advisers Act of 1940, as amended, and serves as investment adviser to the Funds.

Babson Capital Global Advisors Limited (the “Sub-Adviser”), an indirect wholly-owned subsidiary of the Adviser, serves as a sub-adviser with respect to the Global Floating Rate Fund, Global Credit Income Opportunities Fund, Emerging Markets Debt Blended Total Return Fund and Global High Yield Fund European investments.

Cornersone Real Estate Advisers LLC (“Cornerstone”), a direct wholly-owned subsidiary of the Adviser, serves as a sub-adviser to the Active Short Duration Bond Fund and Total Return Bond Fund investment in commercial mortgage-backed securities.

The primary investment objective of the Global Floating Rate Fund is to seek a high level of current income. The

Fund seeks preservation of capital as a secondary investment objective. The primary investment objective of the Global Credit Income Opportunities Fund is to seek an absolute return, primarily through current income and secondarily through capital appreciation. The primary investment objective of the Active Short Duration Bond Fund is to seek to achieve a high total rate of return primarily from current income while minimizing fluctuations in capital values by investing primarily in a diversified portfolio of short-term investment grade fixed income securities. The primary investment objective of the Total Return Bond Fund is to seek a superior total rate of return by investing in fixed income instruments. The primary investment objective of the Emerging Markets Debt Blended Total Return Fund is to seek to achieve maximum total return, consistent with preservation of capital and prudent investment management, through high current income generation and, where appropriate, capital appreciation. The primary investment objective of the Emerging Markets Local Currency Debt Fund is to seek long-term total return through investment in a diversified portfolio of emerging markets local currency denominated debt securities. The primary investment objective of the Global High Yield Fund is to seek to provide high current income generation and, where appropriate, capital appreciation. The primary investment objective of the U.S. High Yield Fund is to seek to achieve a high level of total return, with an emphasis on current income, by investing primarily in high yield debt and related securities.

There can be no assurance that the Funds will achieve their investment objectives. Under normal market conditions, the Global Floating Rate Fund will invest at least 80% of its net assets (including the amount of any borrowings for investment purposes) in income-producing floating rate debt securities, consisting of floating rate loans, bonds and notes, issued primarily by North American and Western European companies that are, at the time of purchase, rated below-investment grade (below Baa3 by Moody’s Investors Service, Inc. (“Moody’s”) or below BBB- by either Standard & Poor’s Rating Services, a division of the McGraw-Hill Company, Inc. (“S&P”) or Fitch, Inc. (“Fitch”)) or unrated but judged by the Adviser or BCGA to be of comparable quality. Under normal market conditions, the Global Credit Income Opportunities Fund will invest at least 80% of its net assets (including the amount of any borrowings for investment purposes) in debt instruments, consisting of loans, bonds and notes, based in U.S. and non-U.S.

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markets, as well as over-the-counter and exchange-traded derivatives. Investments may be issued or guaranteed by governments and their agencies, corporations, financial institutions and supranational organizations that the Global Floating Rate Fund and Global Credit Income Opportunities Fund believe have the potential to provide a high total return over time. A significant portion of the Global Floating Rate Fund and Global Credit Income Opportunities Fund’s investments in debt instruments will be denominated in a currency other than the U.S. dollar. Although the investments in non-U.S. dollar denominated assets may be on a currency hedged or unhedged basis, the Global Floating Rate Fund and Global Credit Income Opportunities Fund expect that, under current market conditions, they will seek to hedge substantially all of their exposure to foreign currencies. Under normal market conditions, the Active Short Duration Bond Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in investment grade fixed income securities (rated Baa or higher by Moody’s or BBB or higher by S&P or, if unrated, determined to be of comparable quality by the Adviser). These typically include U.S. dollar-denominated corporate obligations, securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, U.S. and foreign issuer dollar-denominated bonds including, but not limited to, corporate obligations, government and agency issues, private placement bonds, securities subject to resale pursuant to Rule 144A, mortgage-backed, and other asset-backed securities. Under normal market conditions, the Total Return Bond Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in fixed income securities. These typically include: U.S. dollar denominated corporate obligations and bank loans, securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, U.S. and foreign issuer dollar denominated bonds including, but not limited to, corporate obligations, government and agency issues, private placement bonds, securities subject to resale pursuant to Rule 144A, convertible bonds, mortgage-backed, and other asset-backed securities. Under normal market conditions, the Emerging Markets Debt Blended Total Return Fund will invest at least 80% of its net assets (including the amount of any borrowings for investment purposes) in (i) securities denominated in currencies of the emerging market countries, (ii) fixed income securities or debt instruments issued by emerging market

entities or sovereign nations, and/or (iii) debt instruments denominated in or based on the currencies, interest rates, or issues of emerging market countries. Emerging market countries are defined to include any country that did not become a member of the Organization for Economic Cooperation and Development (O.E.C.D.) prior to 1975 and Turkey. Certain emerging market countries are referred to as “frontier” market countries. The Fund will likely focus its investments in Asia, Africa, the Middle East, Latin America and the developing countries of Europe. Under normal market conditions, the Emerging Markets Local Currency Debt Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in local currency-denominated debt instruments issued by emerging markets governments, and their quasi sovereign agencies (including supranational and sub-national government issuers). The Adviser considers emerging market countries to include any country that did not become a member of the O.E.C.D. prior to 1975 and Turkey and intends to focus on those with relatively low gross national product per capita and the potential for rapid economic growth. The Adviser will select the Fund’s country and currency composition based on its evaluation of relative interest rates, inflation rates, exchange rates, monetary and fiscal policies, trade and current account balances, legal and political developments, and any other specific factors the Adviser believes to be relevant. The Fund will likely focus its investments in Asia, Africa, the Middle East, Latin America and the developing countries of Europe. Under normal conditions, the Global High Yield Fund will invest at least 80% of its net assets (including the amount of any borrowing for investment purposes) in below investment grade (“high yield”) fixed and floating rate corporate debt securities including bonds, notes and other fixed and floating rate income securities issued primarily by North American and Western European companies. For this purpose, debt instruments issued by issuers based in the Channel Islands, Cayman Islands and Bermuda will be considered North American and Western European companies. Such debt securities may be secured or unsecured, and, either senior or subordinated. Secured debt means that collateral has been pledged as security against default, while investors in senior debt instruments are legally entitled to be repaid ahead of investors in subordinated (i.e. non-senior) instruments issued by the same corporation. Derivative instruments that provide exposure to such high yield debt securities or have similar

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economic characteristics may be used to satisfy the Fund’s 80% policy. The Adviser expects that such instruments will primarily, at the time of purchase, be rated below investment grade (commonly referred to as “junk bonds”) by at least one credit rating agency (below Baa3 by Moody’s or below BBB- by either S&P, or Fitch) or unrated but judged by the Adviser or BCGA, to be of comparable quality. The Fund may invest in high yield securities of any rating, including securities that are in default at the time of purchase. Under normal circumstances, the U.S. High Yield Fund invests at least 80% of its net assets (including the amount of any borrowings for investment purposes) in lower rated fixed income securities (rated below Baa3 by Moody’s or BBB- by S&P (using the lower rating) or, if unrated, determined by the Adviser to be of comparable quality), and at least 80% of its net assets (including the amount of any borrowings for investment purposes) in securities of U.S. issuers. The Fund may also invest in convertible securities, preferred stocks, warrants, bank loans, and other fixed income securities, including Rule 144A securities, of both U.S. and foreign issuers. Currently, the Adviser does not expect that the Fund will invest more than 20% of its total assets in bank loans. The Fund may invest up to 15% of its total assets in securities that are not denominated in U.S. dollars including, but not limited to, corporate bonds, government and agency issues, Rule 144A securities, convertible securities, bank loans, mortgage-backed, and asset-backed securities.

Each Fund has four classes of shares: Class A, C, I, and Y, each with different expenses and dividends. A front-end sales charge is normally added to the net asset value (“NAV”) for Class A shares. There is no front-end sales charge in the case of Class C, I, and Y shares. There may be a contingent deferred sales charge (“CDSC”) in certain cases as follows: Class A shares purchased without an initial sales charge and redeemed within the first year of purchase (subject to certain exceptions as set forth in each Fund’s prospectus) and Class C shares redeemed within the first year of purchase. All classes of shares have equal voting rights, with the exception of matters that relate solely to one class.

2.	Significant Accounting Policies

The following is a summary of significant accounting policies followed consistently by the Funds in the preparation of their financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

A. Valuation of Investments

The Funds’ investments in fixed income securities are generally valued using the prices provided directly by independent third party services or provided directly from one or more broker dealers or market makers, each in accordance with the valuation policies and procedures approved by the Funds’ Board of Trustees (the “Board”).

The pricing services may use valuation models or matrix pricing, which consider yield or prices with respect to comparable bond quotations from bond dealers or by reference to other securities that are considered comparable in such characteristics as credit rating, interest rates and maturity date to determine the current value. The Funds’ investments in bank loans are normally valued at the bid quotation obtained from dealers in loans by an independent pricing service in accordance with the Funds’ valuation policies and procedures approved by the Board. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value. Over-the-Counter (“OTC”) options are valued by an independent pricing service using a mathematical model, which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.

A Valuation Committee, made up of officers of the Trust and employees of the Adviser, is responsible for determining, in accordance with the Funds’ valuation policies and procedures approved by the Board; (1) whether market quotations are readily available for investments held by the Funds; and (2) the fair value of investments held by the Funds for which market quotations are not readily available or are deemed not reliable by the Adviser. In certain cases, authorized pricing service vendors may not provide prices for a security held by the Funds, or the price provided by such pricing service vendor is deemed unreliable by the Adviser. In such cases, the Funds may use market maker quotations provided by an established market maker for that security (i.e., broker quotes) to value the security if the Adviser has experience obtaining quotations from the market maker and the Adviser determines that quotations obtained from the market maker in the past have generally been reliable (or, if the Adviser has no such experience with respect to a market maker, it determines based on other information available to it that quotations to be obtained by it from the market maker are reasonably likely to be reliable). In any such case, the Adviser will review any market quotations so obtained in

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light of other information in its possession for their general reliability.

Bond investments are valued on the basis of last available bid prices or current market quotations provided by dealers or pricing services. Bank loan positions are valued at the bid price from one or more brokers or dealers as obtained from a pricing service. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships observed in the market between investments and calculated yield measures. Asset-backed and mortgage-backed securities are valued by independent pricing services using models that consider estimated cash flows of each tranche of the security, establish a benchmark yield and develop an estimated tranche-specific spread to the benchmark yield based on the unique attributes of the tranche.

Bank loans in which the Funds may invest have similar risks to lower-rated fixed income securities. Changes in the financial condition of the borrower or economic conditions or other circumstances may reduce the capacity of the borrower to make principal and interest payments on such instruments and may lead to defaults. Senior secured bank loans are supported by collateral; however, the value of the collateral may be insufficient to cover the amount owed to the Funds. By relying on a third party to administer a loan, the Funds are subject to the risk that the third party will fail to perform its obligations. The loans in which the Funds will invest are largely floating rate instruments; therefore, the interest rate risk generally is lower than for fixed-rate debt obligations. However, from the perspective of the borrower, an increase in interest rates may adversely affect the borrower’s financial condition. Due to the unique and customized nature of loan agreements evidencing loans and the private syndication thereof, loans are not as easily purchased or sold as publicly traded securities. Although the range of investors in loans has broadened in recent years, there can be no assurance that future levels of supply and demand in loan trading will provide the degree of liquidity which currently exists in the market. In addition, the terms of the loans may restrict their transferability without borrower consent. These factors may have an adverse effect on the market price and the Funds’ ability to dispose of particular portfolio investments. A less liquid secondary market also

may make it more difficult for the Funds to obtain precise valuations of the high yield loans in its portfolio.

The Funds may invest in collateralized debt obligations (“CDOs”), which include collateralized bond obligations (“CBOs”) and collateralized loan obligations (“CLOs”). CBOs and CLOs are types of asset-backed securities. A CDO is an entity that is backed by a diversified pool of debt securities (CBOs) or syndicated bank loans (CLOs). The cash flows of the CDO can be split into multiple segments, called “tranches,” which will vary in risk profile and yield. The riskiest segment is the subordinated or “equity” tranche. This tranche bears the greatest risk of defaults from the underlying assets in the CDO and serves to protect the other, more senior, tranches from default in all but the most severe circumstances. Since it is shielded from defaults by the more junior tranches, a “senior” tranche will typically have higher credit ratings and lower yields than their underlying securities, and often receive investment grade ratings from one or more of the nationally recognized rating agencies. Despite the protection from the more junior tranches, senior tranches can experience substantial losses due to actual defaults, increased sensitivity to future defaults and the disappearance of one or more protecting tranches as a result of changes in the credit profile of the underlying pool of assets.

Fair value is defined as the price that the Funds would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy is utilized to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. For example, market participants would consider the risk inherent in a particular valuation technique used to measure fair value, such as a pricing model, and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability and

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are developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

Level 1 – quoted prices in active markets for identical securities

Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments)

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the

marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The following is a summary of the inputs used as of December 31, 2015 in valuing the Funds’ investments:

Global

Floating Rate Fund


DESCRIPTION	LEVEL 1		LEVEL 2			LEVEL 3		TOTAL INVESTMENTS

Assets:*
Fixed Income:
Bank Loans	$	–	$	127,297,362		$	1,495,790	$	128,793,152
Corporate Bonds		–		15,251,078			–		15,251,078

Total Fixed Income		–		142,548,440			1,495,790		144,044,230

Short-Term Investments:
Bank Deposit		–		14,835,559			–		14,835,559
Bank Loan		–		–			78,780		78,780

Total Short-Term Investments		–		14,835,559			78,780		14,914,339

Derivative Securities:
Forward Foreign Currency Exchange Contracts		–		394,403			–		394,403

Total		–		157,778,402			1,574,570		159,352,972


Liabilities:*
Derivative Securities:
Forward Foreign Currency Exchange Contracts		–		(11,957	)		–		(11,957	)

Total Investments	$	–	$	157,766,445		$	1,574,570	$	159,341,015

There were no transfers between levels during the period ended December 31, 2015.

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The following is a reconciliation of investments with unobservable inputs (Level 3) that were used in determining fair value:


INVESTMENTS IN SECURITIES	BALANCE AS OF JULY 1, 2015		REALIZED GAIN (LOSS)		CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)			NET TRANSFERS IN (OUT) OF LEVEL 3		ACCRUED PREMIUMS/ DISCOUNTS		PURCHASES		SALES			BALANCE AS OF DECEMBER 31, 2015		CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) FROM INVESTMENTS HELD AT DECEMBER 31, 2015

Fixed Income
Bank Loans	$	1,054,891	$	21	$	(26,139	)	$	–	$	2,137	$	548,582	$	(4,922	)	$	1,574,570	$	(26,139	)

Total	$	1,054,891	$	21	$	(26,139	)	$	–	$	2,137	$	548,582	$	(4,922	)	$	1,574,570	$	(26,139	)

Global

Credit Income Opportunities Fund


DESCRIPTION	LEVEL 1		LEVEL 2			LEVEL 3		TOTAL INVESTMENTS

Assets:*
Equities:
Common Stocks	$	–	$	–		$	409,919	$	409,919

Total Equities		–		–			409,919		409,919

Fixed Income:
Asset-Backed Securities		–		14,577,012			–		14,577,012
Bank Loans		–		17,907,261			714,865		18,622,126
Corporate Bonds		–		42,139,719			–		42,139,719

Total Fixed Income		–		74,623,992			714,865		75,338,857

Purchased Option:
Put Option Purchased		–		406,452			–		406,452
Short-Term Investments:
Bank Deposit		–		6,222,562			–		6,222,562
Bank Loan		–		–			78,780		78,780

Total Short-Term Investments		–		6,222,562			78,780		6,301,342

Derivative Securities:
Forward Foreign Currency Exchange Contracts		–		197,214			–		197,214

Total		–		81,450,220			1,203,564		82,653,784


Liabilities:*
Derivative Securities:
Forward Foreign Currency Exchange Contracts		–		(8,461	)		–		(8,461	)
Written Option		–		(207,921	)		–		(207,921	)

Total Derivative Securities		–		(216,382	)		–		(216,382	)


Total Investments	$	–	$	81,233,838		$	1,203,564	$	82,437,402

There were no transfers between levels during the period ended December 31, 2015.

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The following is a reconciliation of investments with unobservable inputs (Level 3) that were used in determining fair value:


INVESTMENTS IN SECURITIES	BALANCE AS OF JULY 1, 2015		REALIZED GAIN (LOSS)		CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)			NET TRANSFERS IN (OUT) OF LEVEL 3		ACCRUED PREMIUMS/ DISCOUNTS		PURCHASES		SALES			BALANCE AS OF DECEMBER 31, 2015		CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) FROM INVESTMENTS HELD AT DECEMBER 31, 2015

Equities
Common Stock	$	–	$	–	$	36,181		$	–	$	–	$	373,738	$	–		$	409,919	$	36,181


Fixed Income
Bank Loans		808,335		24		(13,199	)		—		2,136		—		(3,651	)		793,645		(13,199	)

Total	$	808,335	$	24	$	22,982		$	—	$	2,136	$	373,738	$	(3,651	)	$	1,203,564	$	22,982

Active

Short Duration Bond Fund


DESCRIPTION	LEVEL 1		LEVEL 2			LEVEL 3		TOTAL INVESTMENTS

Assets:*
Convertible Preferred Stock	$	–	$	16,695		$	–	$	16,695
Fixed Income:
Asset-Backed Securities		–		17,633,090			–		17,633,090
Convertible Bonds		–		174,625			–		174,625
Corporate Bonds		–		32,760,633			–		32,760,633
Mortgage-Backed Securities		–		3,797,494			–		3,797,494
U.S. Treasury & Government Agencies		–		33,292,824			–		33,292,824

Total Fixed Income		–		87,658,666			–		87,658,666

Purchased Options:
Call Option Purchased		–		54,242			–		54,242
Put Option Purchased		–		14,650			–		14,650

Total Purchased Options		–		68,892			–		68,892

Short-Term Investments:
Bank Deposit		–		4,606,134			–		4,606,134
Commercial Paper		–		5,354,527			–		5,354,527
Corporate Bonds		–		1,336,980			–		1,336,980

Total Short-Term Investments		–		11,297,641			–		11,297,641

Derivative Securities:
Futures		–		13,623			–		13,623

Total		–		99,055,517			–		99,055,517


Liabilities:*
Derivative Securities:
Credit Default Swaps		–		(7,229	)		–		(7,229	)
Futures		–		(76,527	)		–		(76,527	)

Total Derivative Securities		–		(83,756	)		–		(83,756	)


Total Investments	$	–	$	98,971,761		$	–	$	98,971,761

There were no transfers between levels during the period ended December 31, 2015.

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Total

Return Bond Fund


DESCRIPTION	LEVEL 1		LEVEL 2			LEVEL 3		TOTAL INVESTMENTS

Assets:*
Fixed Income:
Asset-Backed Securities	$	—	$	4,277,885		$	—	$	4,277,885
Convertible Bonds		—		96,947			—		96,947
Corporate Bonds		—		7,861,331			—		7,861,331
Foreign Government		—		107,707			—		107,707
Mortgage-Backed Securities		—		1,638,839			—		1,638,839
U.S. Treasury & Government Agencies		—		7,489,820			—		7,489,820

Total Fixed Income		—		21,472,529			—		21,472,529

Mutual Fund:
Mutual Fund		2,104,366		—			—		2,104,366
Purchased Options:
Call Option Purchased		—		126,564			—		126,564
Put Options Purchased		—		7,091			—		7,091

Total Purchased Options		—		133,655			—		133,655

Short-Term Investments:
Bank Deposit		—		1,029,894			—		1,029,894
Commercial Paper		—		5,070,567			—		5,070,567
Corporate Bonds		—		130,767			—		130,767

Total Short-Term Investments		—		6,231,228			—		6,231,228

Derivative Securities:
Forward Foreign Currency Exchange Contracts		—		4,766			—		4,766
Futures		—		3,974			—		3,974

Total Derivative Securities		—		8,740			—		8,740

Total		2,104,366		27,846,152			—		29,950,518


Liabilities:*
Derivative Securities:
Credit Default Swaps		—		(1,885	)		—		(1,885	)
Forward Foreign Currency Exchange Contracts		—		(12,870	)		—		(12,870	)
Futures		—		(12,186	)		—		(12,186	)

Total Derivative Securities		—		(26,941	)		—		(26,941	)


Total Investments	$	2,104,366	$	27,819,211		$	—	$	29,923,577

There were no transfers between levels during the period ended December 31, 2015.

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December 31, 2015

Emerging Markets Debt Blended Total Return Fund


DESCRIPTION	LEVEL 1		LEVEL 2			LEVEL 3		TOTAL INVESTMENTS

Assets:*
Fixed Income:
Corporate Bonds	$	—	$	3,328,336		$	—	$	3,328,336
Foreign Government		—		5,663,863			—		5,663,863

Total Fixed Income		—		8,992,199			—		8,992,199

Short-Term Investments:
Bank Deposit		—		83,284			—		83,284
Foreign Government		—		445,584			—		445,584

Total Short-Term Investments		—		528,868			—		528,868

Derivative Securities:
Forward Foreign Currency Exchange Contracts		—		130,248			—		130,248
Futures		—		1,022			—		1,022
Interest Rate Swaps		—		10,877			—		10,877

Total Derivative Securities		—		142,147			—		142,147

Total		—		9,663,214			—		9,663,214


Liabilities:*
Derivative Securities:
Credit Default Swaps		—		(7,281	)		—		(7,281	)
Forward Foreign Currency Exchange Contracts		—		(146,056	)		—		(146,056	)

Total Derivative Securities		—		(153,337	)		—		(153,337	)


Total Investments	$	—	$	9,509,877		$	—	$	9,509,877

There were no transfers between levels during the period ended December 31, 2015.

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Emerging

Markets Local Currency Debt Fund


DESCRIPTION	LEVEL 1		LEVEL 2			LEVEL 3		TOTAL INVESTMENTS

Assets:*
Fixed Income:
Foreign Government	$	—	$	4,370,217		$	—	$	4,370,217

Total Fixed Income		—		4,370,217			—		4,370,217

Short-Term Investments:
Bank Deposit		—		363,781			—		363,781
Foreign Government		—		—			94,640		94,640

Total Short-Term Investments		—		363,781			94,640		458,421

Derivative Securities:
Forward Foreign Currency Exchange Contracts		—		24,387			—		24,387
Interest Rate Swaps		—		7,952			—		7,952

Total Derivative Securities		—		32,339			—		32,339

Total		—		4,766,337			94,640		4,860,977


Liabilities:*
Derivative Securities:
Forward Foreign Currency Exchange Contracts		—		(47,969	)		—		(47,969	)
Interest Rate Swaps		—		(29,065	)		—		(29,065	)

Total Derivative Securities		—		(77,034	)		—		(77,034	)


Total Investments	$	—	$	4,689,303		$	94,640	$	4,783,943

There were no transfers between levels during the period ended December 31, 2015.

The following is a reconciliation of investments with unobservable inputs (Level 3) that were used in determining fair value:


INVESTMENTS IN SECURITIES	BALANCE AS OF JULY 1, 2015		REALIZED GAIN (LOSS)		CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)			NET TRANSFERS IN (OUT) OF LEVEL 3		ACCRUED PREMIUMS/ DISCOUNTS		PURCHASES		SALES		BALANCE AS OF DECEMBER 31, 2015		CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) FROM INVESTMENTS HELD AT DECEMBER 31, 2015

Fixed Income
Foreign Government	$	–	$	–	$	(5,713	)	$	–	$	673	$	99,680	$	–	$	94,640	$	(5,713	)

Total	$	–	$	–	$	(5,713	)	$	–	$	673	$	99,680	$	–	$	94,640	$	(5,713	)

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December 31, 2015

Global

High Yield Fund


DESCRIPTION	LEVEL 1		LEVEL 2			LEVEL 3		TOTAL INVESTMENTS

Assets:*
Fixed Income:
Corporate Bonds	$	—	$	22,822,394		$	—	$	22,822,394

Total Fixed Income		—		22,822,394			—		22,822,394

Short-Term Investment		—		1,147,156			—		1,147,156
Derivative Securities:
Forward Foreign Currency Exchange Contracts		—		61,325			—		61,325

Total		—		24,030,875			—		24,030,875


Liabilities:*
Derivative Securities:
Forward Foreign Currency Exchange Contracts		—		(68,199	)		—		(68,199	)


Total Investments	$	—	$	23,962,676		$	—	$	23,962,676

There were no transfers between levels during the period ended December 31, 2015.

U.S.

High Yield Fund


DESCRIPTION	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL INVESTMENTS

Assets:*
Fixed Income:
Bank Loan	$	—	$	75,000	$	—	$	75,000
Corporate Bonds		—		22,080,803		—		22,080,803

Total Fixed Income		—		22,155,803		—		22,155,803

Short-Term Investment		—		3,864,268		—		3,864,268

Total		—		26,020,071		—		26,020,071


Total Investments	$	—	$	26,020,071	$	—	$	26,020,071

There were no transfers between levels during the period ended December 31, 2015.

Forward Commitments and When-Issued Delayed Delivery Securities

The Funds may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Funds may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Funds may be required to pay more at settlement than the security is worth. In addition, the Funds are not entitled to any of

the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Funds assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, the Funds’ maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Schedule of Investments.

Cash and Short-Term Investments

Cash and cash equivalents consist principally of short-term investments that are readily convertible into cash and have original maturities of three months or less. At December 31, 2015, all cash and cash equivalents are held by the custodian.

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Investment Transactions, Related Investment Income and Expenses

Investment transactions are accounted for on a trade date basis. Interest income is recorded on the accrual basis, including the amortization of premiums and accretion of discounts on bonds held using the yield-to-maturity method.

Realized gains and losses on investment transactions and unrealized appreciation and depreciation of investments are reported for financial statement and Federal income tax purposes on the identified cost method.

Expenses are recorded on the accrual basis as incurred.

Redemption Fees

Effective July 1, 2015, the Funds no longer had redemption fees.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Federal Income Taxation

The Funds have elected to be taxed as a Regulated Investment Company (“RIC”) under sub-chapter M of the U.S. Internal Revenue Code of 1986, as amended, and intend to maintain this qualification and to distribute substantially all of their net taxable income to their shareholders. As of December 31, 2015, the Funds had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. The Funds file a U.S. Federal income tax return annually after their fiscal year-end, which is subject to examination by the Internal Revenue Service for a period of three years from the date of the filings.

Dividends and Distributions

Each Fund declares a dividend daily based on the Adviser’s projections of the Funds’ estimated net investment income and distributes such dividend monthly. To the extent that these distributions exceed net investment income, they may be classified as return of capital. The Funds also pay a distribution at least annually from their net realized capital gains, if any.

Dividends and distributions are recorded on the ex-dividend date. All common shares have equal dividend and other distribution rights. A notice disclosing the source(s) of a distribution will be provided if payment is made from any source other than net investment income. Any such notice would be provided only for informational purposes in order to comply with the requirements of Section 19(a) of the 1940 Act and not for tax reporting purposes. The tax composition of the Funds’ distributions for each calendar year is reported on Internal Revenue Service Form 1099-DIV.

Dividends from net investment income and distributions from realized gains from investment transactions have been determined in accordance with Federal income tax regulations and may differ from net investment income and realized gains recorded by the Funds for financial reporting purposes. These differences, which could be temporary or permanent in nature may result in reclassification of distributions; however, net investment income, net realized gains and losses, and net assets are not affected.

Bank Loans

The Funds may invest in bank loans, which usually take the form of loan participations and assignments. Loan participations and assignments are agreements to make money available to U.S. or foreign corporations, partnerships or other business entities (the “Borrower”) in a specified amount, at a specified rate and within a specified time. A loan is typically originated, negotiated and structured by a U.S. or foreign bank, insurance company or other financial institution (the “Agent”) for a group of loan investors (“Loan Investors”). The Agent typically administers and enforces the loan on behalf of the other Loan Investors in the syndicate and may hold any collateral on behalf of the Loan Investors. Such loan participations and assignments are typically senior, secured and collateralized in nature. The Funds record an investment when the Borrower withdraws money and records interest as earned. These loans pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. These base lending rates are generally the prime rate offered by a designated U.S. bank or London InterBank Offered Rate (“LIBOR”).

The loans in which the Funds invest may be subject to some restrictions on resale. For example, the Funds may be contractually obligated to receive approval from the Agent and/or Borrower prior to the sale of these investments. The Funds generally have no right to

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enforce compliance with the terms of the loan agreement with the Borrower. As a result, the Funds assume the credit risk of the Borrower, the selling participant and any other persons interpositioned between the Funds and the Borrower (“Intermediate Participants”). In the event that the Borrower, selling participant or Intermediate Participants become insolvent or enter into bankruptcy, the Funds may incur certain costs and delays in realizing payment or may suffer a loss of principal and/or interest.

Unfunded commitments represent the remaining obligation of the Funds to the Borrower. At any point in time, up to the maturity date of the issue, the Borrower may demand the unfunded portion. Until demanded by the Borrower, unfunded commitments are not recognized as an asset on the Statements of Assets and Liabilities. Unrealized appreciation/depreciation on unfunded commitments presented on the Statements of Assets and Liabilities represents mark to market of the unfunded portion of the Funds’ bank loans. As of December 31, 2015, the Funds had no unfunded loan commitments.

Derivative Instruments

The following is a description of the derivative instruments that the Funds utilize as part of their investment strategy, including the primary underlying risk exposures related to the instrument.

Forward Foreign Currency Exchange Contracts – The Funds are subject to foreign currency exchange rate risk in the normal course of pursuing their investment objectives. The Funds may use forward foreign currency exchange contracts to hedge against changes in the value of foreign currencies. The Funds may enter into forward foreign currency exchange contracts obligating the Funds to deliver or receive a currency at a specified future date. Forward contracts are valued daily and unrealized appreciation or depreciation is recorded daily as the difference between the contract exchange rate and the closing forward rate applied to the face amount of the contract. A realized gain or loss is recorded at the time the forward contract expires. Credit risk may arise as a result of the failure of the counterparty to comply with the terms of the contract. The Funds consider the creditworthiness of each counterparty to a contract in evaluating potential credit risk quarterly. The Funds are also subject to credit risk with respect to the counterparties to derivative contracts that are not cleared through a central counterparty but instead are traded

over-the-counter between two counterparties. If a counterparty to an over-the-counter derivative becomes bankrupt or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Funds may experience significant delays in obtaining any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. The Funds may obtain only a limited recovery or may obtain no recovery in such circumstances. The counterparty risk for cleared derivatives is generally lower than for uncleared over-the-counter derivative transactions since generally a clearing organization becomes substituted for each counterparty to a cleared derivative contract and, in effect, guarantees the parties’ performance under the contract as each party to a trade looks only to the clearing house for performance of financial obligations. However, there can be no assurance that the clearing house, or its members, will satisfy its obligations to the Funds. In addition, in the event of a bankruptcy of a clearing house, the Funds could experience a loss of the funds deposited with such clearing house as margin and of any profits on its open positions. The counterparty risk to the Funds is limited to the net unrealized gain, if any, on the contract.

The use of forward foreign currency exchange contracts does not eliminate fluctuations in the underlying prices of the Funds’ investment securities; however, it does establish a rate of exchange that can be achieved in the future. The use of forward foreign currency exchange contracts involves the risk that anticipated currency movements will not be accurately predicted. A forward foreign currency exchange contract would limit the risk of loss due to a decline in the value of a particular currency; however, it would also limit any potential gain that might result should the value of the currency increase instead of decrease. These contracts may involve market risk in excess of the amount of receivable or payable reflected on the Statement of Assets and Liabilities.

The Funds may purchase and sell futures contracts to enhance returns, to attempt to hedge some of its investment risk, or as a substitute position in lieu of holding the underlying asset on which the instrument is based. At the time of entering into a futures transaction, an investor is required to deposit and maintain a specified amount of cash or eligible securities called “initial margin.” Subsequent payments made or received by a Fund called “variation margin” are made on a daily basis as the market price of the futures contract fluctuates. Each Fund will

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record an unrealized gain (loss) based on the amount of variation margin. When a contract is closed, a realized gain (loss) is recorded equal to the difference between the opening and closing value of the contract.

The Funds may purchase call or put options. When a Fund purchases an option, the premium paid by the Fund is recorded as an asset and is subsequently adjusted to the current fair value of the option purchased. Purchasing call options tends to increase the Fund’s exposure to the underlying instrument. Purchasing put options tends to decrease the Fund’s exposure to the underlying instrument. Premiums paid for purchasing options that expire are treated as realized losses. Premiums paid for purchasing options that are exercised or closed are added to the amounts paid or offset against the proceeds on the underlying security to determine the realized gain or loss. The risks associated with purchasing put and call options are potential loss of the premium paid and, in the instances of over-the-counter derivatives, the failure of the counterparty to honor its obligation under the contract.

The Funds may enter into swap options (“swaptions”). A swaption is an option to enter into a pre-defined swap agreement by some specified date in the future. The writer of the swaption becomes the counterparty to the swap if the buyer exercises. The interest rate swaption agreement will specify whether the buyer of the swaption will be a fixed rate receiver or a fixed rate buyer. Depending on the terms of the particular option agreement, a Fund generally will incur a greater degree of risk when the Fund writes a swaption than the Fund will incur when it purchases a swaption. When a Fund purchases a swaption, the Fund’s risk of loss is limited to the amount of the premium it has paid should it decide to let the swaption expire unexercised.

When a Fund writes a covered call or a put option, an amount equal to the premium received by the Fund is included in the Fund’s Statement of Assets and Liabilities as an asset and as an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. The Fund receives a premium on the sale of a call option but gives up the opportunity to profit from any increase in stock value above the exercise price of the option, and when a Fund writes a put option, it is exposed to a decline in the price of the underlying security.

Whether an option which a Fund has written expires on its stipulated expiration date or a Fund enters into a

closing purchase transaction, the Fund realizes a gain (or loss, if the cost of a closing purchase transaction exceeds the premium received when the option was sold) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a call option which a Fund has written is exercised, the Fund realizes a capital gain or loss from the sale of the underlying security, and the cost basis of the lots sold are decreased by the premium originally received. When a put option which a Fund has written is exercised, the amount of the premium originally received will reduce the cost of the security which the Fund purchases upon exercise of the option. Realized gains (losses) on purchased options are included in net realized gain (loss) from investments.

The Funds’ use of written options involves, to varying degrees, elements of market risk in excess of the amount recognized in the Statements of Assets and Liabilities. The face or contract amounts of these instruments reflect the extent of the Funds’ exposure to market risk. The risks may be caused by an imperfect correlation between movements in the price of the instrument and the price of the underlying securities, currencies and interest rates.

Transactions in written option contracts for the Global Credit Income Opportunities Fund for the period ended December 31, 2015 are as follows:


	NUMBER OF CONTRACTS/ NOTIONAL AMOUNT			PREMIUMS RECEIVED
Options outstanding at June 30, 2015		30,000,000		$	382,000
Options written		80,000,000			1,465,020
Options terminated in closing purchase transactions		(70,000,000	)		(875,020	)
Options expired		–			–

Options outstanding at December 31, 2015		40,000,000		$	972,000

The Funds may enter into credit default swap contracts. As a seller of a credit default swap contract (“seller of protection”), a Fund is required to pay the notional amount or other agreed-upon value of a referenced debt obligation to the counterparty in the event of a default by or other credit event involving the referenced issuer, obligation or index. In return, a Fund receives from the counterparty a periodic stream of payments over the term of the contract.

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As a purchaser of a credit default swap contract (“buyer of protection”), a Fund would receive the notional amount or other agreed-upon value of a referenced debt obligation from the counterparty in the event of default by or other credit event involving the referenced issuer, obligation or index. In return, a Fund would make periodic payments to the counterparty over the term of the contracts, provided no event of default has occurred.

These credit default swaps may have as a reference obligation corporate or sovereign issuers or credit indices. These credit indices are comprised of a basket of securities representing a particular sector of the market. During the period, Active Short Duration Bond Fund and Total Return Bond Fund entered into credit default swaps based on a CMBX index, which is comprised of commercial mortgage-backed securities.

Credit default swaps are fair valued based upon quotations from counterparties, brokers or market makers and the change in value, if any, is recorded as an unrealized appreciation or depreciation. For a credit default swap sold by a Fund, payment of the agreed- upon amount made by a Fund in the event of default of the referenced debt obligation is recorded as the cost of the referenced debt obligation purchased/received. For a credit default swap purchased by a Fund, the agreed- upon amount received by a Fund in the event of default of the referenced debt obligation is recorded as proceeds from sale/delivery of the referenced debt obligation and the resulting gain or loss realized on the referenced debt obligation is recorded as such by a Fund.

Any upfront payments made or received upon entering a credit default swap contract would be amortized or accreted over the life of the swap and recorded as realized gains or losses. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the custodian bank or broker in accordance with the swap agreement. The value and credit rating of each credit default swap where a Fund is the seller of protection, are both measures of the current payment/performance risk of the swap. As the value of the swap changes as a positive or negative percentage of the total notional amount, the payment/performance risk may decrease or increase, respectively. The maximum potential amount of future payments (undiscounted) that a Fund as a seller of protection could be required to

make under a credit default swap agreement would be an amount equal to the notional amount of the agreement. These potential amounts would be partially offset by any recovery values of the respective referenced obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by a Fund for the same referenced entity or entities.

Entering into credit default swaps involves credit and market risk. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, that there may be unfavorable changes in interest rates, and that the Adviser does not correctly predict the creditworthiness of the issuers of the reference obligation on which the credit default swap is based.

Interest rate swaps involve the exchange by a Fund with another party of their respective commitments to receive or pay interest (e.g., an exchange of fixed rate payments for floating rate payments) with respect to a notional amount of principal.

During the period ended December 31, 2015, the Funds’ direct investment in derivatives consisted of forward foreign currency exchange contracts, futures contracts, credit default swaps, interest rate swaps, purchased options, and written options.

The following is a summary of the fair value of derivative instruments held directly by the Funds as of December 31, 2015:

Global Floating Rate Fund

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Global Credit Income Opportunities Fund


ASSET DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK		TOTAL
Forward Foreign Currency Exchange Contracts	Unrealized appreciation on forward foreign currency exchange contracts	$	197,214	$	–	$	197,214
Purchased Options	Investments, at fair value		–		406,452		406,452

Total		$	197,214	$	406,452	$	603,666


LIABILITY DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK			INTEREST RATE RISK			TOTAL
Forward Foreign Currency Exchange Contracts	Unrealized depreciation on forward foreign currency exchange contracts	$	(8,461	)	$	–		$	(8,461	)
Written Options	Written options, at fair value		–			(207,921	)		(207,921	)

Total		$	(8,461	)	$	(207,921	)	$	(216,382	)

Active Short Duration Bond Fund


ASSET DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK		TOTAL
Futures Contracts	Includes cumulative unrealized appreciation/ depreciation of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.	$	–	$	13,623	$	13,623
Purchased Options	Investments, at fair value		54,242		14,650		68,892

Total		$	54,242	$	28,273	$	82,515

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December 31, 2015


LIABILITY DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	INTEREST RATE RISK			CREDIT RISK			TOTAL
Futures Contracts	Includes cumulative unrealized appreciation/ depreciation of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.	$	(76,527	)	$	–		$	(76,527	)
Swaps Contracts	Swap contracts, at fair value		–			(7,229	)		(7,229	)

Total		$	(76,527	)	$	(7,229	)	$	(83,756	)

Total Return Bond Fund


ASSET DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK		TOTAL
Forward Foreign Currency Exchange Contracts	Unrealized appreciation on forward foreign currency exchange contracts	$	4,766	$	–	$	4,766
Futures Contracts	Includes cumulative unrealized appreciation/ depreciation of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.		–		3,974		3,974
Purchased Options	Investments, at fair value		126,564		7,091		133,655

Total		$	131,330	$	11,065	$	142,395


LIABILITY DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK			INTEREST RATE RISK			CREDIT RISK			TOTAL
Forward Foreign Currency Exchange Contracts	Unrealized depreciation on forward foreign currency exchange contracts	$	(12,870	)	$	–		$	–		$	(12,870	)
Futures Contracts	Includes cumulative unrealized appreciation/ depreciation of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.		–			(12,186	)		–			(12,186	)
Swaps Contracts	Swap contracts, at fair value		–			–			(1,885	)		(1,885	)

Total		$	(12,870	)	$	(12,186	)	$	(1,885	)	$	(26,941	)

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Emerging Markets Debt Blended Total Return Fund


ASSET DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK		TOTAL
Forward Foreign Currency Exchange Contracts	Unrealized appreciation on forward foreign currency exchange contracts	$	130,248	$	–	$	130,248
Futures Contracts	Includes cumulative unrealized appreciation/ depreciation of futures contracts as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.		–		1,022		1,022
Swaps Contracts	Swap contracts, at fair value				10,877		10,877

Total		$	130,248	$	11,899	$	142,147


LIABILITY DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK			CREDIT RISK			TOTAL
Forward Foreign Currency Exchange Contracts	Unrealized depreciation on forward foreign currency exchange contracts	$	(146,056	)	$	–		$	(146,056	)
Swaps Contracts	Swap contracts, at fair value					(7,281	)		(7,281	)

Total		$	(146,056	)	$	(7,281	)	$	(153,337	)

Emerging Markets Local Currency Debt Fund


ASSET DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK		TOTAL
Forward Foreign Currency Exchange Contracts	Unrealized appreciation on forward foreign currency exchange contracts	$	24,387	$	–	$	24,387
Swaps Contracts	Swap contracts, at fair value				7,952		7,952

Total		$	24,387	$	7,952	$	32,339


LIABILITY DERIVATIVES	STATEMENTS OF ASSETS AND LIABILITIES LOCATION	FOREIGN EXCHANGE CONTRACTS RISK			INTEREST RATE RISK			TOTAL
Forward Foreign Currency Exchange Contracts	Unrealized depreciation on forward foreign currency exchange contracts	$	(47,969	)	$	–		$	(47,969	)
Swaps Contracts	Swap contracts, at fair value					(29,065	)		(29,065	)

Total		$	(47,969	)	$	(29,065	)	$	(77,034	)

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December 31, 2015

Global High Yield Fund

Amount of Realized Gain/(Loss) on Derivatives:

Global Floating Rate Fund


	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts	$	670,025

Total	$	670,025

Global Credit Income Opportunities Fund


	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK			TOTAL
Forward Foreign Currency Exchange Contracts	$	439,379	$	–		$	439,379
Purchased Options		–		232,460			232,460
Written Options		–		(34,180	)		(34,180	)

Total	$	439,379	$	198,280		$	637,659

Active Short Duration Bond Fund


	INTEREST RATE RISK			CREDIT RISK		TOTAL
Futures Contracts	$	(80,683	)	$	–	$	(80,683	)
Swaps Contracts		–			3,498		3,498

Total	$	(80,683	)	$	3,498	$	(77,185	)

Total Return Bond Fund


	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK			CREDIT RISK		TOTAL
Futures Contracts	$	–	$	(19,608	)	$	–	$	(19,608	)
Purchased Options		76,374		(5,419	)		–		70,955
Swaps Contracts		–		–			913		913

Total	$	76,374	$	(25,027	)	$	913	$	52,260

Emerging Markets Debt Blended Total Return Fund


	FOREIGN EXCHANGE CONTRACTS RISK			INTEREST RATE RISK		CREDIT RISK		TOTAL
Forward Foreign Currency Exchange Contracts	$	(5,772	)	$	–	$	–	$	(5,772	)
Futures Contracts		–			3,818		–		3,818
Swaps Contracts		–			–		843		843

Total	$	(5,772	)	$	3,818	$	843	$	(1,111	)

159

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Emerging Markets Local Currency Debt Fund


	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts	$	(11,053	)

Total	$	(11,053	)

Global High Yield Fund


	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts	$	81,280

Total	$	81,280

Change in Unrealized Appreciation/(Depreciation) on Derivatives:

Global Floating Rate Fund


	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts	$	752,516

Total	$	752,516

Global Credit Income Opportunities Fund


	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK			TOTAL
Forward Foreign Currency Exchange Contracts	$	332,385	$	–		$	332,385
Purchased Options		–		(911,375	)		(911,375	)
Written Options		–		701,556			701,556

Total	$	332,385	$	(209,819	)	$	122,566

Active Short Duration Bond Fund


	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK			CREDIT RISK			TOTAL
Futures Contracts	$	–	$	(62,904	)	$	–		$	(62,904	)
Purchased Options		32,732		(11,195	)		–			21,537
Swaps Contracts		–		–			(7,791	)		(7,791	)

Total	$	32,732	$	(74,099	)	$	(7,791	)	$	(49,158	)

Total Return Bond Fund


	FOREIGN EXCHANGE CONTRACTS RISK			INTEREST RATE RISK			CREDIT RISK			TOTAL
Forward Foreign Currency Exchange Contracts	$	(8,104	)	$			$	–		$	(8,104	)
Futures Contracts		–			(8,212	)		–			(8,212	)
Purchased Options		76,374			(5,419	)		–			70,955
Swaps Contracts		–			–			(2,032	)		(2,032	)

Total	$	68,270		$	(13,631	)	$	(2,032	)	$	52,607

Emerging Markets Debt Blended Total Return Fund


	FOREIGN EXCHANGE CONTRACTS RISK			INTEREST RATE RISK		CREDIT RISK		TOTAL
Forward Foreign Currency Exchange Contracts	$	(15,808	)	$	–	$	–	$	(15,808	)
Futures Contracts		–			1,022		–		1,022
Swaps Contracts		–			10,877		1,994		12,871

Total	$	(15,808	)	$	11,899	$	1,994	$	(1,915	)

160

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Emerging Markets Local Currency Debt Fund


	FOREIGN EXCHANGE CONTRACTS RISK			INTEREST RATE RISK			TOTAL
Forward Foreign Currency Exchange Contracts	$	(23,582	)	$	–		$	(23,582	)
Swaps Contracts		–			(21,113	)		(21,113	)

Total	$	(23,582	)	$	(21,113	)	$	(44,695	)

Global High Yield Fund


	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts	$	(6,874	)

Total	$	(6,874	)

Global Floating Rate Fund


NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OF SHARES/UNITS	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts⁽¹⁾	$	41,693,519

Total	$	41,693,519

(1)

Volume of derivative activity is based on an average of month-end notional amounts outstanding during the period.

Global Credit Income Opportunities Fund


	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK			TOTAL
Forward Foreign Currency Exchange Contracts⁽¹⁾	$	23,748,605	$	–		$	23,748,605
Purchased Options⁽¹⁾		–		38,571,429			38,571,429
Written Options⁽¹⁾		–		(38,571,429	)		(38,571,429	)

Total	$	23,748,605	$	–		$	23,748,605

(1)

Volume of derivative activity is based on an average of month-end notional amounts outstanding during the period.

Active Short Duration Bond Fund


NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OF SHARES/ UNITS	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK		CREDIT RISK		TOTAL
Futures Contracts⁽¹⁾	$	–	$	170	$	–	$	170
Purchased Options⁽²⁾		2,040,000		6,250,000		–		8,290,000
Swap Contracts⁽²⁾		–		–		230,000		230,000

Total		2,040,000		6,250,170		230,000		8,520,170

(1)

Volume of derivative activity is based on an average of month-end contracts outstanding during the period.

(2)

Volume of derivative activity is based on an average of month-end notional amounts outstanding during the period.

161

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Total Return Bond Fund


NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OF SHARES/UNITS	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK		CREDIT RISK		TOTAL
Forward Foreign Currency Exchange Contracts⁽¹⁾	$	300,979	$	–	$	–	$	300,979
Futures Contracts⁽²⁾		–		45		–		45
Purchased Options⁽¹⁾		–		7,785,000		–		7,785,000
Swap Contracts⁽¹⁾		–		–		669,467		669,467

Total	$	300,979	$	7,785,045	$	669,467	$	8,755,491

(1)

Volume of derivative activity is based on an average of month-end notional amounts outstanding during the period.

(2)

Volume of derivative activity is based on an average of month-end contracts outstanding during the period.

Emerging Markets Debt Blended Total Return Fund


NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OF SHARES/UNITS	FOREIGN EXCHANGE CONTRACTS RISK		INTEREST RATE RISK		CREDIT RISK		TOTAL
Forward Foreign Currency Exchange Contracts⁽¹⁾	$	8,736,234	$	–	$	–	$	8,736,234
Futures Contracts⁽²⁾		–		3		–		3
Swap Contracts⁽¹⁾		–		–		200,000		200,000

Total	$	8,736,234	$	3	$	200,000	$	8,936,237

(1)

Volume of derivative activity is based on an average of month-end notional amounts outstanding during the period.

(2)

Volume of derivative activity is based on an average of month-end contracts outstanding during the period.

Emerging Markets Local Currency Debt Fund


NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OF SHARES/UNITS	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts⁽¹⁾	$	5,211,436

Total	$	5,211,436

(1)

Volume of derivative activity is based on an average of month-end notional amounts outstanding during the period.

Global High Yield Fund


NUMBER OF CONTRACTS, NOTIONAL AMOUNTS OF SHARES/UNITS	FOREIGN EXCHANGE CONTRACTS RISK
Forward Foreign Currency Exchange Contracts⁽¹⁾	$	5,699,993

Total	$	5,699,993

(1)

Volume of derivative activity is based on an average of month-end notional amounts outstanding during the period.

K.	Disclosures about Offsetting Assets and Liabilities

The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2011-11 “Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). These disclosure requirements are intended to help better assess the effect or potential effect of offsetting arrangements on a Fund’s financial position. In addition, FASB issued Accounting Standards Update No. 2013-01 “Clarifying the Scope of Offsetting Assets and Liabilities” (“ASU 2013-01”), specifying which transactions are subject to disclosures about offsetting.

The following tables illustrate gross and net information about recognized assets eligible for offset in the Statement of Assets and Liabilities; and disclose such amounts subject to an enforceable master netting agreement or similar agreement, by counterparty. A master netting agreement is an agreement between two counterparties who have multiple contracts with each other that provides for the net settlement of all contracts, as well as cash collateral, through a single payment in the event of default on or termination of any one contract:

162

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Global Floating Rate Fund


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED ASSETS		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	394,403	$	–	$	394,403

Total	$	394,403	$	–	$	394,403


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL RECEIVED^(a)		NET AMOUNT^(b)
Morgan Stanley & Co.	$	394,403	$	(11,957	)	$	–	$	382,446

Total	$	394,403	$	(11,957	)	$	–	$	382,446

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED LIABILITIES		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	11,957	$	–	$	11,957

Total	$	11,957	$	–	$	11,957


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL PLEDGED^(a)		NET AMOUNT^(b)
Morgan Stanley & Co.	$	11,957	$	(11,957	)	$	–	$	–

Total	$	11,957	$	(11,957	)	$	–	$	–

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.

163

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Global Credit Income Opportunities Fund


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED ASSETS		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	197,214	$	–	$	197,214
Purchased Options		406,452		–		406,452

Total	$	603,666	$	–	$	603,666


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL RECEIVED^(a)		NET AMOUNT^(b)
Citibank	$	406,452	$	(207,921	)	$	–	$	198,531
Morgan Stanley		197,214		(8,461	)		–		188,753

Total	$	603,666	$	(216,382	)	$	–	$	387,284

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED LIABILITIES		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	8,461	$	–	$	8,461
Written Options		207,921		–		207,921

Total	$	216,382	$	–	$	216,382


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL PLEDGED^(a)		NET AMOUNT^(b)
Citibank	$	207,921	$	(207,921	)	$	–	$	–
Morgan Stanley		8,461		(8,461	)		–		–

Total	$	216,382	$	(216,382	)	$	–	$	–

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.

164

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Active Short Duration Bond Fund


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED ASSETS		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Purchased Options	$	68,892	$	–	$	68,892

Total	$	68,892	$	–	$	68,892


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL RECEIVED^(a)		NET AMOUNT^(b)
JPMorgan Chase Bank N.A.	$	68,892	$	(7,229	)	$	–	$	61,663

Total	$	68,892	$	(7,229	)	$	–	$	61,663

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED LIABILITIES		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Credit Default Swaps	$	7,229	$	–	$	7,229

Total	$	7,229	$	–	$	7,229


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL PLEDGED^(a)		NET AMOUNT^(b)
JPMorgan Chase Bank N.A.	$	7,229	$	(7,229	)	$	–	$	–

Total	$	7,229	$	(7,229	)	$	–	$	–

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.

165

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Total Return Bond Fund


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED ASSETS		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	4,766	$	–	$	4,766
Purchased Options		133,655		–		133,655

Total	$	138,421	$	–	$	138,421


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL RECEIVED^(a)		NET AMOUNT^(b)
Bank of America N.A.	$	3,060	$	(3,060	)	$	–	$	–
Citibank N.A.		370		(370	)		–		–
JPMorgan Chase Bank N.A.		134,991		(3,848	)		–		131,143

Total	$	138,421	$	(7,278	)	$	–	$	131,143

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED LIABILITIES		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Credit Default Swaps	$	1,885	$	–	$	1,885
Forward Foreign Currency Exchange Contracts		12,870		–		12,870

Total	$	14,755	$	–	$	14,755

166

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL PLEDGED^(a)		NET AMOUNT^(b)
Bank of America N.A.	$	9,331	$	(3,060	)	$	–	$	6,271
Citibank N.A.		1,576		(370	)		–		1,206
JPMorgan Chase Bank N.A.		3,848		(3,848	)		–		–

Total	$	14,755	$	(7,278	)	$	–	$	7,477

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.

Emerging Markets Debt Blended Total Return Fund


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED ASSETS		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	130,248	$	–	$	130,248
Interest Rate Swaps		10,877		–		10,877

Total	$	141,125	$	–	$	141,125


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL RECEIVED^(a)		NET AMOUNT^(b)
Bank of America N.A.	$	88,630	$	(81,841	)	$	–	$	6,789
Citibank N.A.		8,734		(8,734	)		–		–
JPMorgan Chase Bank N.A.		43,761		(35,491	)		–		8,270

Total	$	141,125	$	(126,066	)	$	–	$	15,059

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.

167

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED LIABILITIES		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Credit Default Swaps	$	7,281	$	–	$	7,281
Forward Foreign Currency Exchange Contracts		146,056		–		146,056

Total	$	153,337	$	–	$	153,337


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL PLEDGED^(a)		NET AMOUNT^(b)
Bank of America N.A.	$	81,841	$	(81,841	)	$	–	$	–
Citibank N.A.		36,005		(8,734	)		–		27,271
JPMorgan Chase Bank N.A.		35,491		(35,491	)		–		–

Total	$	153,337	$	(126,066	)	$	–	$	27,271

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.

Emerging Markets Local Currency Debt Fund


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED ASSETS		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	24,387	$	–	$	24,387
Interest Rate Swaps		7,952		–		7,952

Total	$	32,339	$	–	$	32,339

168

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL RECEIVED^(a)		NET AMOUNT^(b)
Bank of America N.A.	$	17,027	$	(17,027	)	$	–	$	–
Citibank N.A.		4,920		(4,920	)		–		–
JPMorgan Chase Bank N.A.		10,392		(7,837	)		–		2,555

Total	$	32,339	$	(29,784	)	$	–	$	2,555

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED LIABILITIES		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	47,969	$	–	$	47,969
Interest Rate Swaps		29,065		–		29,065

Total	$	77,034	$	–	$	77,034


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)			CASH COLLATERAL PLEDGED^(a)		NET AMOUNT^(b)
Bank of America N.A.	$	31,363	$	(17,027	)	$	–	$	14,336
Citibank N.A.		37,834		(4,920	)		–		32,914
JPMorgan Chase Bank N.A.		7,837		(7,837	)		–		–

Total	$	77,034	$	(29,784	)	$	–	$	47,250

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.

169

Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Global High Yield Fund


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED ASSETS		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	61,325	$	–	$	61,325

Total	$	61,325	$	–	$	61,325


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF ASSETS PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)		CASH COLLATERAL RECEIVED^(a)		NET AMOUNT^(b)
Bank of America N.A.	$	61,325	$	–	$	–	$	61,325

Total	$	61,325	$	–	$	–	$	61,325

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.


DESCRIPTION	GROSS AMOUNTS OF RECOGNIZED LIABILITIES		GROSS AMOUNTS OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES		NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES
Forward Foreign Currency Exchange Contracts	$	68,199	$	–	$	68,199

Total	$	68,199	$	–	$	68,199


			GROSS AMOUNTS NOT OFFSET IN THE STATEMENTS OF ASSETS AND LIABILITIES
COUNTERPARTY	NET AMOUNTS OF LIABILITIES PRESENTED IN THE STATEMENTS OF ASSETS AND LIABILITIES		FINANCIAL INSTRUMENT^(a)		CASH COLLATERAL PLEDGED^(a)		NET AMOUNT^(b)
JPMorgan Chase Bank N.A.	$	68,199	$	–	$	–	$	68,199

Total	$	68,199	$	–	$	–	$	68,199

(a)

Collateral disclosed is limited to an amount not to exceed 100% of the net amount of assets presented in the Statements of Assets and Liabilities, for each respective counterparty.

(b)

Net Amount represents the amount that is subject to loss in the event of a counterparty failure as of December 31, 2015.

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December 31, 2015

Foreign Securities

Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and the U.S. government. These risks include valuation of currencies and adverse political and economic developments. Moreover, securities of many foreign companies, foreign governments, and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. companies and the U.S. government.

Foreign Currency Translation

The books and records of the Funds are maintained in U.S. dollars. Foreign currency transactions are translated into U.S. dollars on the following basis: (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Funds do not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities. However, for Federal income tax purposes, the Funds do isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gain or loss from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences.

Counterparty Risk

The Funds seek to manage counterparty credit risk by entering into agreements only with counterparties the Adviser believes have the financial resources to honor their obligations. The Adviser monitors the financial stability of the Funds’ counterparties.

3.	Advisory Fee

The Funds have entered into an Investment Management Agreement (the “Agreement”) with the Adviser. Pursuant to the Agreement, the Funds have agreed to pay the

Adviser a fee payable at the end of each calendar month as set forth below:


Global Floating Rate Fund		0.65% of average daily net assets
Global Credit Income Opportunities Fund		0.75% of average daily net assets
Active Short Duration Bond Fund		0.35% of average daily net assets
Total Return Bond Fund		0.40% of average daily net assets
Emerging Markets Blended Total Return Fund		0.75% of average daily net assets
Emerging Markets Local Currency Debt Fund		0.75% of average daily net assets
Global High Yield Fund		0.60% of average daily net assets
U.S. High Yield Fund		0.55% of average daily net assets

The Adviser has contractually agreed to waive and/or reimburse a portion of its fees and/or reimburse expenses (excluding 12b-1 fees, interest expenses, taxes, fees incurred in acquiring and disposing of securities and extraordinary expenses) such that total net annual operating expenses for each class do not exceed the following rates:


	CLASS A			CLASS C			CLASS I			CLASS Y
Global Floating Rate Fund		1.05	%		1.80	%		0.75	%		0.75	%
Global Credit Income Opportunities Fund		1.20	%		1.95	%		0.95	%		0.95	%
Active Short Duration Bond Fund*		0.65	%		0.90	%		0.40	%		0.40	%
Total Return Bond Fund		0.80	%		1.55	%		0.55	%		0.55	%
Emerging Markets Debt Blended Total Return Fund		1.20	%		1.95	%		0.95	%		0.95	%
Emerging Markets Local Currency Debt Fund		1.20	%		1.95	%		0.95	%		0.95	%
Global High Yield Fund		1.05	%		1.80	%		0.80	%		0.80	%
U.S. High Yield Fund		1.00	%		1.75	%		0.75	%		0.75	%

From the period July 9, 2015 through September 27, 2015, the rates were 0.80% for Class A, 1.55% for Class C, 0.55% for Class I and 0.55% for Class Y.

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December 31, 2015

Pursuant to the expense waiver/reimbursement agreement, the Adviser is entitled to be reimbursed for any fees the Adviser waives and Fund expenses that the Adviser reimburses for a period of three years following such fee waivers and expense reimbursements, to the extent that such reimbursement of the Adviser by a Fund will not cause the Fund to exceed any applicable expense limitation that is in place for the Fund.

The contractual management fee waiver and expense reimbursement agreements between the Funds and the Adviser will remain in effect until November 1, 2016 and may be terminated only upon the approval of the Funds’ Board of Trustees.

Subject to the supervision of the Adviser and the Board, BCGA and Cornerstone manage the investment and reinvestment of a portion of the assets of the Funds, as allocated from time to time to BCGG and Cornerstone. The Adviser (not the Funds) will pay a portion of the fees it receives to BCGG and Cornerstone in return for their services.

4.	12b-1 Distribution and Service Plan

ALPS Distributors, Inc. (the “Distributor”) is the Distributor of the Funds’ shares as of December 31, 2015.

The Funds have adopted a Distribution and Shareholder Services Plan (the “Plan”), pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, each Fund’s Class A and Class C shares may compensate certain financial institutions, including the Distributor, for certain distribution and shareholder servicing activities. The Funds’ Class A shares may expend an aggregate amount, on an annual basis, not to exceed 0.25% of the value of the average daily net assets of a Fund attributable to Class A shares and 1.00% of the value of the average daily net assets of a Fund attributable to Class C shares. The Plan provides that the distribution and service fees are payable to the Distributor regardless of the amounts actually expended by the Distributor for distribution of the Funds’ shares and service activities.

Under its terms, the Funds’ Plan shall remain in effect from year to year, provided such continuance is approved annually by a vote of a majority of the Boards’ members and a majority of those Boards’ members who are not “interested persons” of the Funds and who have no direct or indirect financial interest in the operation of the Plan or in any agreement related to the Plan.

5.	Sales Charges and Commissions

For the period ended December 31, 2015, the amount of sales charges retained by the Distributor on sales of Class A and Class C shares of the Funds were as follows:


	CLASS C
Global Floating Rate Fund	$	–
Global Credit Income Opportunities Fund		795
Active Short Duration Bond Fund		–
Total Return Bond Fund		–
Emerging Markets Debt Blended Total Return Fund		–
Global High Yield Fund		–
U.S. High Yield Fund		–
Emerging Markets Local Currency Debt Fund		–

For the period ended December 31, 2015, the Distributor received the following commissions on sales of shares of the Funds, after concessions were paid to authorized dealers:


	DISTRIBUTOR COMMISSIONS		DEALERS’ CONCESSIONS
Global Floating Rate Fund	$	3,347	$	59,230
Global Credit Income Opportunities Fund		578		13,447
Active Short Duration Bond Fund		–		800
Total Return Bond Fund		–		–
Emerging Markets Debt Blended Total Return Fund		–		–
Global High Yield Fund		–		–
U.S. High Yield Fund		–		–
Emerging Markets Local Currency Debt Fund		–		–

6.	Administrator, Custody, and Transfer Agent Fees

The Funds have engaged State Street Bank and Trust (“SSB”) to serve as the Funds’ administrator, custodian, and fund accountant. SSB also served as transfer agent from the period July 1, 2015 to November 6, 2015. Effective November 7, 2015, the Funds engaged ALPS as transfer agent. For each of these services, the Funds have agreed to pay SSB and ALPS fees payable at the end of each calendar month pursuant to fee agreements between SSB, ALPS, and the Funds, respectively. For the period ended December 31, 2015, the aggregate

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December 31, 2015

effective fee for these services was at the following annual rate of each Fund’s average daily managed assets:


Global Floating Rate Fund	0.29	%
Global Credit Income Opportunities Fund	0.41	%
Active Short Duration Bond Fund	0.45	%
Total Return Bond Fund	1.09	%
Emerging Markets Debt Blended Total Return Fund	2.86	%
Emerging Markets Local Currency Debt Fund	5.64	%
Global High Yield Fund	1.08	%
U.S. High Yield Fund	1.08	%

7.	Income Taxes

It is the Funds’ intention to qualify as a RIC under subchapter M of the Internal Revenue Code and distribute all of its taxable income. Accordingly, no provision for Federal income taxes is required in the financial statements.

The tax character of dividends paid to shareholders during the tax year ended June 30, 2015 was as follows:


	ORDINARY INCOME		NET LONG-TERM CAPITAL GAINS		TOTAL DISTRIBUTIONS PAID
Global Floating Rate Fund	$	8,284,319	$	–	$	8,284,319
Global Credit Income Opportunities Fund		7,108,559		265		7,108,824

In accordance with the Regulated Investment Company Modernization Act of 2010, the Funds will carryforward capital losses incurred in taxable years beginning after December 22, 2010 (“post-enactment losses”) indefinitely. Post-enactment losses will also retain their character as either short-term or long-term and be utilized before any pre-enactment losses.

As of December 31, 2015, the aggregate unrealized security gains and losses based on cost for U.S. Federal income tax purposes were as follows:


	COST OF INVESTMENTS		GROSS UNREALIZED APPRECIATION		GROSS UNREALIZED DEPRECIATION			NET UNREALIZED DEPRECIATION
Global Floating Rate Fund	$	173,271,411	$	142,156	$	(14,454,998	)	$	(14,312,842	)
Global Credit Income Opportunities Fund		93,349,595		178,871		(11,071,896	)		(10,893,025	)
Active Short Duration Bond Fund		99,913,942		70,742		(942,790	)		(872,048	)
Total Return Bond Fund		30,210,279		109,829		(378,330	)		(268,501	)
Emerging Markets Debt Blended Total Return Fund		9,935,402		2,791		(417,126	)		(414,335	)
Emerging Markets Local Currency Debt Fund		4,928,972		16,475		(116,809	)		(100,334	)
Global High Yield Fund		24,902,440		55,529		(988,419	)		(932,890	)
U.S. High Yield Fund		26,953,697	��	58,238		(991,864	)		(933,626	)

The difference between book-basis and tax-basis unrealized gains (losses) is attributable to wash sales.

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December 31, 2015

8.	Investment Transactions

Purchases and sales of securities (excluding short-term debt securities) for the period ended December 31, 2015 were as follows:


	PURCHASES		SALES		GOVERNMENT PURCHASES		GOVERNMENT SALES
Global Floating Rate Fund	$	53,186,452	$	53,517,182	$	–	$	–
Global Credit Income Opportunities Fund		36,875,889		28,879,383		–		–
Active Short Duration Bond Fund		58,997,071		2,169,561		104,699,578		71,565,183
Total Return Bond Fund		20,656,204		2,535,590		63,996,761		57,574,065
Emerging Markets Debt Blended Total Return Fund		10,243,957		837,500		–		–
Global High Yield Fund		26,786,000		3,076,391		–		–
U.S. High Yield Fund		25,790,921		2,749,783		–		–
Emerging Markets Local Currency Debt Fund		4,460,892		–		–		–

9.	Common Stock

Transactions in common stock for the period ended December 31, 2015 were as follows:

Global Floating Rate Fund


	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015						FOR THE YEAR ENDED JUNE 30, 2015
CLASS A	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		376,917		$	3,574,690			1,046,486		$	10,379,529
Shares sold through reinvestments of distributions		14,662			135,817			83,026			807,940
Shares redeemed		(309,637	)		(2,924,156	)		(1,815,123	)		(17,653,590	)
Redemption fees		–			–			–			676

Net increase (decrease)		81,942		$	786,351			(685,611	)	$	(6,465,445	)

CLASS C
Shares sold		287,726		$	2,689,377			335,871		$	3,264,612
Shares sold through reinvestments of distributions		12,631			116,556			19,258			185,848
Shares redeemed		(136,930	)		(1,283,038	)		(20,267	)		(195,905	)
Redemption fees		–			–			–			169

Net increase		163,427		$	1,522,895			334,862		$	3,254,724

CLASS I
Shares sold		–		$	1,326			–		$	–
Shares sold through reinvestments of distributions		19,954			189,886			234,264			2,279,655
Shares redeemed		(261,489	)		(2,500,000	)		(753,573	)		(7,271,983	)
Redemption fees		–			–			–			1,694

Net decrease		(241,535	)	$	(2,308,788	)		(519,309	)	$	(4,990,634	)

CLASS Y
Shares sold		3,330,921		$	31,415,435			9,236,912		$	89,446,649
Shares sold through reinvestments of distributions		287,904			2,680,348			493,939			4,805,968
Shares redeemed		(3,779,325	)		(35,494,510	)		(2,813,208	)		(27,521,577	)
Redemption fees		–			–			–			2,920

Net increase (decrease)		(160,500	)	$	(1,398,727	)		6,917,643		$	66,733,960

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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Global Credit Income Opportunities Fund


	FOR THE SIX MONTHS ENDED DECEMBER 31, 2015						FOR THE YEAR ENDED JUNE 30, 2015
CLASS A	SHARES			AMOUNT			SHARES			AMOUNT
Shares sold		249,754		$	2,321,902			2,316,931		$	23,545,838
Shares sold through reinvestments of distributions		44,106			399,686			127,930			1,237,474
Shares redeemed		(262,308	)		(2,418,504	)		(1,355,520	)		(13,184,266	)
Redemption fees		–			–			–			2,624

Net increase		31,552		$	303,084			1,089,341		$	11,601,670

CLASS C
Shares sold		58,024		$	532,797			285,284		$	2,802,118
Shares sold through reinvestments of distributions		9,185			83,032			13,552			130,085
Shares redeemed		(64,510	)		(591,956	)		(12,493	)		(121,540	)
Redemption fees		–			–			–			343

Net increase		2,699		$	23,873			286,343		$	2,811,006

CLASS I
Shares sold		–		$	–			–		$	–
Shares sold through reinvestments of distributions		27,127			255,092			253,647			2,450,842
Shares redeemed		–			–			–			–
Redemption fees		–			–			–			4,679

Net increase		27,127		$	255,092			253,647		$	2,455,521

CLASS Y
Shares sold		1,412,060		$	12,972,040			1,654,908		$	16,333,761
Shares sold through reinvestments of distributions		94,808			866,819			321,379			3,108,290
Shares redeemed		(732,942	)		(6,596,388	)		(1,114,834	)		(11,114,262	)
Redemption fees		–			–			–			5,954

Net increase		773,926		$	7,242,471			861,453		$	8,333,743

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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Active Short Duration Bond Fund


	PERIOD FROM JULY 9, 2015 THROUGH DECEMBER 31, 2015						FOR THE YEAR ENDED JUNE 30, 2015
CLASS A	SHARES			AMOUNT			SHARES		AMOUNT
Shares sold		1,163,542		$	11,527,601			–	$	–
Shares sold through reinvestments of distributions		2,160			21,319			–		–
Shares redeemed		(96,479	)		(954,354	)		–		–

Net increase		1,069,223		$	10,594,566			–	$	–

CLASS C
Shares sold		34,614		$	345,256			–	$	–
Shares sold through reinvestments of distributions		38			381			–		–
Shares redeemed		(3	)		(32	)		–		–

Net increase		34,649		$	345,605			–	$	–

CLASS I
Shares sold		2,230,000		$	22,300,000			–	$	–
Shares sold through reinvestments of distributions		4,436			44,099			–		–
Shares redeemed		–			–			–		–

Net increase		2,234,436		$	22,344,099			–	$	–

CLASS Y
Shares sold		6,010,467		$	59,709,650			–	$	–
Shares sold through reinvestments of distributions		12,667			125,236			–		–
Shares redeemed		(122,747	)		(1,214,939	)		–		–

Net increase		5,900,387		$	58,619,947			–	$	–

176

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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Total Return Bond Fund

PERIOD FROM
JULY 9, 2015
THROUGH
DECEMBER 31, 2015

FOR THE
YEAR ENDED
JUNE 30, 2015

CLASS A

SHARES

AMOUNT

SHARES

AMOUNT

Shares sold

20,000

200,000

–

Shares sold through reinvestments of distributions

806

–

Shares redeemed

–

Net increase

20,082

200,806

–

CLASS C

Shares sold

20,000

200,000

–

Shares sold through reinvestments of distributions

596

–

Shares redeemed

–

Net increase

20,061

200,596

–

CLASS I

Shares sold

1,230,000

12,300,000

–

Shares sold through reinvestments of distributions

5,482

54,097

–

Shares redeemed

–

Net increase

1,235,482

12,354,097

–

CLASS Y

Shares sold

1,232,225

12,322,092

–

Shares sold through reinvestments of distributions

5,506

54,334

–

Shares redeemed

–

Net increase

1,237,731

12,376,426

–

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Babson Capital Funds Trust 2015 Semi-Annual Report

NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Emerging Markets Debt Blended Total Return Fund

PERIOD FROM
OCTOBER 22, 2015
THROUGH
DECEMBER 31, 2015

FOR THE
YEAR ENDED
JUNE 30, 2015

CLASS A

SHARES

AMOUNT

SHARES

AMOUNT

Shares sold

20,000

200,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

20,006

200,062

–

CLASS C

Shares sold

20,000

200,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

20,006

200,062

–

CLASS I

Shares sold

480,000

4,800,000

–

Shares sold through reinvestments of distributions

156

1,488

–

Shares redeemed

–

Net increase

480,156

4,801,488

–

CLASS Y

Shares sold

480,000

4,800,000

–

Shares sold through reinvestments of distributions

156

1,488

–

Shares redeemed

–

Net increase

480,156

4,801,488

–

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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Emerging Markets Local Currency Debt Fund

PERIOD FROM
DECEMBER 9, 2015
THROUGH
DECEMBER 31, 2015

FOR THE
YEAR ENDED
JUNE 30, 2015

CLASS A

SHARES

AMOUNT

SHARES

AMOUNT

Shares sold

10,000

100,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

10,000

100,000

–

CLASS C

Shares sold

10,000

100,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

10,000

100,000

–

CLASS I

Shares sold

240,000

2,400,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

240,000

2,400,000

–

CLASS Y

Shares sold

240,000

2,400,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

240,000

2,400,000

–

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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

Global High Yield Fund

PERIOD FROM
NOVEMBER 2, 2015
THROUGH
DECEMBER 31, 2015

FOR THE
YEAR ENDED
JUNE 30, 2015

CLASS A

SHARES

AMOUNT

SHARES

AMOUNT

Shares sold

10,000

100,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

10,000

100,000

–

CLASS C

Shares sold

10,000

100,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

10,000

100,000

–

CLASS I

Shares sold

1,240,000

12,400,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

1,240,000

12,400,000

–

CLASS Y

Shares sold

1,240,779

12,407,500

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

1,240,780

12,407,513

–

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NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

December 31, 2015

U.S. High Yield Fund

PERIOD FROM
NOVEMBER 2, 2015
THROUGH
DECEMBER 31, 2015

FOR THE
YEAR ENDED
JUNE 30, 2015

CLASS A

SHARES

AMOUNT

SHARES

AMOUNT

Shares sold

10,000

100,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

10,000

100,000

–

CLASS C

Shares sold

10,000

100,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

10,000

100,000

–

CLASS I

Shares sold

1,458,295

14,500,000

–

Shares sold through reinvestments of distributions

262

2,525

–

Shares redeemed

–

Net increase

1,458,557

14,502,525

–

CLASS Y

Shares sold

1,240,000

12,400,000

–

Shares sold through reinvestments of distributions

–

Shares redeemed

–

Net increase

1,240,000

12,400,000

–

10.

Line of Credit

During the period ended December 31, 2015, the Trust (the “Borrower”) entered into a Credit Agreement (the “Credit Agreement”) with State Street Bank and Trust Company (the “Bank”). The Credit Agreement provides for a revolving credit facility of $40,000,000 (the “Facility Amount”) to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. Per the Credit Agreement, outstanding principal on the loan shall bear interest at a variable rate per annum equal to the higher of (a) the Federal Funds Rate as in effect on the day of the borrowing plus 1.25% and (b) the Overnight LIBOR rate as in effect on the day of the borrowing plus 1.25%. In addition, the Borrower shall pay to the Bank a commitment fee at the rate of 0.25% per annum on the daily unused portion of the Facility Amount. As of December 31, 2015, there were no loans outstanding pursuant to the Credit Agreement.

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Babson Capital Funds Trust 2015 Semi-Annual Report

BASIS FOR BOARD RENEWAL OF INVESTMENT MANAGEMENT AGREEMENT AND SUB-ADVISORY AGREEMENTS

The Investment Company Act of 1940 (the “1940 Act”) requires that a majority of both the full Board of Trustees and the Trustees who are not interested persons of the Trust, as defined under the 1940 Act (“Independent Trustees”), voting separately, annually approve the continuation of the Investment Management Agreement between the Trust, on behalf of each of its eight series funds (the “Funds”), and Babson Capital Management LLC (“Babson Capital”) (the “Management Agreement”), the Sub-Advisory Agreement between Babson Capital and Babson Capital Global Advisors Limited (“BCGA”) (the “BCGA Sub-Advisory Agreement”) and the Sub-Advisory Agreement between Babson Capital and Cornerstone Real Estate Advisers LLC (“Cornerstone”) (the “Cornerstone Sub-Advisory Agreement”, and together with the Management Agreement and the BCGA Sub-Advisory Agreement, the “Agreements”). The Trustees considered matters bearing on the Funds and the Agreements at their meetings throughout the year, including a review of the Funds’ performance at each regular meeting. At a meeting held on July 16, 2015 (the “Meeting”), the Trustees met for the purpose of considering whether to approve the continuation of the Agreements for the Funds. The Trustees’ review process and considerations in approval the Agreements are set forth below.

Prior to the Meeting, the Trustees requested and received from Ropes & Gray LLP, counsel to the Funds, a memorandum describing the Trustees’ legal responsibilities in connection with their review and approval of the Agreements. The Trustees noted that they initially approved the Agreements for Babson Global Floating Rate Fund and Babson Global Credit Income Opportunities Fund in July 2013, and that they initially approved the Agreements for Babson Active Short Duration Bond Fund, Babson Emerging Markets Debt Blended Total Return Fund, Babson Emerging Markets Local Currency Debt Fund, Babson Global High Yield Fund, Babson Total Return Bond Fund and Babson U.S. High Yield Fund in January 2015. The Trustees also requested and received from Babson Capital extensive written and oral information regarding other matters including: the principal terms of the Agreements; the reasons why Babson Capital was proposing the continuance of the Agreements; Babson Capital and its personnel; the Funds’ investment performance, including comparative performance information; the nature and quality of the services provided by Babson Capital to the Funds; financial strength of Babson Capital; the fee arrangements between Babson Capital and each Fund and each Fund’s fee and expense information, including comparative fee and expense information; profitability of the Agreements to Babson Capital; and “fallout” benefits to Babson Capital resulting from the Agreements.

The Trustees’ conclusion as to the continuation of the Agreements was based on a comprehensive consideration of all information provided to the Board and not the result of any single issue. Some of the factors that figured particularly in the Trustees’ deliberations are described below, although individual Trustees may have evaluated the information presented differently from one another, giving different weights to different factors. It is also important to recognize that the Board’s review of the Agreements is the result of ongoing review and discussion, rather than a single discussion. The Trustees’ conclusions may be based, in part, on their consideration of these arrangements during the course of the year and in prior years.

The Trustees considered the terms of the Agreements, including the scope of the advisory services provided under the Agreements. In evaluating the nature, scope and quality of the services provided by Babson Capital to Babson Emerging Markets Local Currency Debt Fund and Babson U.S. High Yield Fund, the Trustees considered Babson Capital’s specific responsibilities in the day-to-day management of the Fund, the qualifications, experience and responsibilities of the portfolio managers and other key personnel that are involved in the day-to-day management of the Fund, the ability of Babson Capital to attract and retain high-quality personnel, and the organizational depth and stability of Babson Capital. In evaluating the nature, scope and quality of the services provided by Babson Capital and BCGA to Babson Emerging Markets Debt Blended Total Return Fund, Babson Global High Yield Bond Fund, Babson Global Floating Rate Fund and Babson Global Credit Income Opportunities Fund (“BCGA sub-advised Funds”) and by Babson Capital and Cornerstone to Babson Active Short Duration Fund and Babson Total Return Bond Fund (“Cornerstone sub-advised Funds”), the Trustees considered Babson Capital’s specific responsibilities in the day-to-day management of the Fund, the qualifications, experience and responsibilities of the portfolio managers and other key personnel that are involved in the day-to-day management of the Fund, the ability of each of Babson Capital and BCGA and Cornerstone to attract and retain high-quality personnel, and the organizational depth and stability of each of Babson, BCGA and Cornerstone. The Trustees also considered the trading capabilities of Babson Capital.

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Babson Capital Funds Trust 2015 Semi-Annual Report

BASIS FOR BOARD RENEWAL OF INVESTMENT MANAGEMENT AGREEMENT AND SUB-ADVISORY AGREEMENTS (CONTINUED)

The Trustees reviewed the Funds’ total return investment performance, as well as the performance of peer groups of funds, over various time periods, using information provided by Lipper Inc. (“Lipper”) and Babson Capital. The Trustees noted that the total return performance of Babson Global Floating Rate Fund’s and Babson Global Credit Income Opportunities Fund’s shares each ranked in the 4^th quintile of the Lipper performance universe for the one-year period ended December 30, 2014 (the 1^st quintile being the best performers and the 5^th quintile being the worst performers). The Trustees noted that the remaining six Funds had commenced operations after June 30, 2015 or had not yet commenced operations, and had limited or no operating histories and performance records. As a result, the Trustees did not receive information on the investment performance of these Funds. However, in the case of Babson Active Short Duration Bond Fund, Babson Emerging Markets Local Currency Debt Fund, Babson Emerging Markets Debt Blended Total Return Fund and Babson Total Return Bond Fund, each of which was modeled on a substantially similar fund sub-advised by Babson Capital (each, a “similar fund”), the Trustees considered one-, three-, and five-year performance information for the corresponding similar fund. In the course of their deliberations, the Trustees also took into account information provided by Babson Capital during investment review meetings conducted with portfolio management personnel during the course of the year. After reviewing these and related factors, the Trustees concluded, within the context of their overall conclusions regarding the Agreements, that they were satisfied with the responses of Babson Capital and BCGA and Cornerstone.

The Trustees considered the investment management fee paid by each Fund to Babson Capital pursuant to the Management Agreement. The Trustees noted that Babson Capital (and not the BCGA sub-advised Funds) pays BCGA its sub-advisory fee under the BCGA Sub-Advisory Agreement and that Babson Capital (and not the Cornerstone sub-advised Funds) pays Cornerstone its sub-advisory fee under the Cornerstone Sub-Advisory Agreement. In assessing the reasonableness of the fee paid by the Funds under the Management Agreement, the Trustees considered, among other information, each Fund’s advisory fee and the total expense ratio for the Fund’s shares as a percentage of net asset value and the advisory fee and total expense ratios of peer groups of funds based on information provided by Lipper Inc. The Trustees considered that, according to the Lipper data (which takes into account any fee reductions or expense limitations that were in effect during the last fiscal year), Babson Global Floating Rate Fund’s effective advisory fee rate and total expense ratio were each lower than the Lipper expense group median. The Trustees considered that, according to the Lipper data, Babson Global Credit Income Opportunities Fund’s effective advisory fee rate was lower than the Lipper expense group median and its total expense ratio was approximately at the Lipper expense group median. The Trustees also considered that, according to the Lipper data, the effective advisory fee rate was expected to be lower than the Lipper expense group median and the total expense ratio was expected to be approximately at the Lipper expense group median for Babson Active Short Duration Bond Fund, Babson Emerging Markets Local Currency Debt Fund, Babson Emerging Markets Debt Blended Total Return Fund, Babson Global High Yield Fund, Babson Total Return Bond Fund, and Babson U.S. High Yield Fund.

The Trustees then considered that, as each Fund’s assets increase, each Fund and its shareholders would be expected to realize economies of scale as certain expenses, such as fixed operating costs, become a smaller percentage of overall assets. They considered the extent to which any such savings would benefit shareholders and Babson Capital’s statement that it would consider proposing breakpoints in the management fee payable by a Fund once a Fund approached the breakeven point.

The Trustees reviewed information prepared by Babson Capital regarding Babson Capital’s costs of managing the Funds, and the profitability of the Management Agreement to Babson Capital. In considering the profitability of the Babson Capital, the Board noted that BCGA and Cornerstone are affiliates of Babson Capital and are paid by Babson Capital, and, therefore, did not consider their profitability separately. The Trustees then considered potential “fall-out” benefits to Babson Capital and its affiliates as a result of Babson Capital’s relationship with BCFT. The Board concluded that, in light of the expected costs of providing investment management and other services to BCFT and Babson Capital’s commitment to cap the expenses of each Fund, the other ancillary benefits that Babson Capital and its affiliates expect to receive supported the approval of the Agreements. The Trustees concluded that, at this time, and in light of the nature, extent and quality of the respective services expected to be provided by Babson Capital, the fee rates and expenses of each Fund

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Babson Capital Funds Trust 2015 Semi-Annual Report

BASIS FOR BOARD RENEWAL OF INVESTMENT MANAGEMENT AGREEMENT AND SUB-ADVISORY AGREEMENTS (CONTINUED)

supported the approval of the Management Agreement, the BCGA Sub-Advisory Agreement and the Cornerstone Sub-Advisory Agreement.

Based on their evaluation of factors that they deemed to be material, including those factors described above, the Board of Trustees, including the Independent Trustees, concluding that the Management Agreement, the BCGA Sub-Advisory Agreement and the Cornerstone Sub-Advisory Agreement should be continued for an additional one-year period.

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LOGO Babson Capital Funds Trust

Item 2. Code of Ethics.

Not applicable to this semi-annual report.

Item 3. Audit Committee Financial Expert.

Not applicable to this semi-annual report.

Item 4. Principal Accountant Fees and Services.

Not applicable to this semi-annual report.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Schedule of Investments.

(a)	The Registrant’s Consolidated Schedule of Investments as of the close of the reporting period is included in the Semi-Annual Report to Shareholders filed under Item 1 of this form.

(b)	Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Investment Management Companies.

Not applicable.

Item 9.

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to procedures by which the shareholders may recommend nominees to the Registrant’s Board of Trustees.

Item 11. Controls and Procedures.

(a)

The Registrant’s principal executive officer and principal financial officer, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”), are effective as of a date within 90 days of the filing date of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended.

(b)

There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

(a)(1)

Not applicable to this semi-annual report.

(a)(2)

Certifications pursuant to Rule 30a-2(a) under the 1940 Act are attached hereto.

Exhibit 99.1 Cert

Exhibit 99.2 Cert

(a)(3)

Not applicable.

(b)	Certification pursuant to Rule 30a-2(b) under the 1940 Act is attached hereto.

Exhibit 99.906 Cert

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.


(Registrant)		Babson Capital Funds Trust



By (Signature and Title)		/s/ Anthony J. Sciacca
		*Anthony J. Sciacca, President (Principal Executive Officer)*



Date		March 7, 2016

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 (Signature and Title)		/s/ Anthony J. Sciacca
		*Anthony J. Sciacca, President (Principal Executive Officer)*



Date		March 7, 2016



By (Signature and Title)		/s/ Patrick Hoefling
		*Patrick Hoefling, Chief Financial Officer (Principal Financial Officer)*



Date		March 7, 2016

ASSET DERIVATIVES

STATEMENTS OF ASSETS
AND LIABILITIES
LOCATION

FOREIGN
EXCHANGE
CONTRACTS
RISK

Forward Foreign Currency Exchange Contracts

Unrealized appreciation on forward foreign currency exchange contracts