UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
Certified Shareholder Report of
Registered Management Investment Companies
Investment Company Act File Number: 811-01880
The Income Fund of America, Inc.
(Exact Name of Registrant as Specified in Charter)
P.O. Box 7650, One Market, Steuart Tower
San Francisco, California 94120
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (415) 421-9360
Date of fiscal year end: July 31
Date of reporting period: July 31, 2008
Patrick F. Quan
Capital Research and Management Company
P.O. Box 7650, One Market, Steuart Tower
San Francisco, California 94120
(Name and Address of Agent for Service)
Copies to:
Michael Glazer
Paul, Hastings, Janofsky & Walker LLP
515 South Flower Street, 25th Floor
Los Angeles, California 90071
(Counsel for the Registrant)
ITEM 1 – Reports to Stockholders
[logo - American Funds®]
The right choice for the long term®
The Income Fund of America
Looking back, looking forward:
Reflections on a challenging year
[photo of a body of water with trees in the background]
Annual report for the year ended July 31, 2008
The Income Fund of America® seeks current income while secondarily striving for capital growth through investments in stocks and fixed-income securities.
This fund is one of the 30 American Funds. American Funds is one of the nation’s largest mutual fund families. For more than 75 years, Capital Research and Management Company,SM the American Funds adviser, has invested with a long-term focus based on thorough research and attention to risk.
Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity. For current information and month-end results, visit americanfunds.com.
Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended June 30, 2008 (the most recent calendar quarter-end):
Class A shares | 1 year | 5 years | 10 years | |||||||||
Reflecting 5.75% maximum sales charge | –16.56 | % | 7.27 | % | 6.02 | % |
The total annual fund operating expense ratio for Class A shares as of the most recent fiscal year-end was 0.57%. This figure does not reflect a fee waiver currently in effect; therefore, the actual expense ratio is lower.
The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased the waiver to 10% on April 1, 2005. Fund results shown reflect actual expenses, with the waiver applied. Fund results would have been lower without the waiver. Please see the Financial Highlights table on pages 29 and 30 for details.
The fund’s 30-day yield for Class A shares as of August 31, 2008, calculated in accordance with the Securities and Exchange Commission formula, was 4.86% (4.83% without the fee waiver). The fund’s distribution rate for Class A shares as of that date was 4.86%. Both reflect the 5.75% maximum sales charge. The SEC yield reflects the rate at which the fund is earning income on its current portfolio of securities while the distribution rate reflects the fund’s past dividends paid to shareholders. Accordingly, the fund’s SEC yield and distribution rate may differ.
Results for other share classes can be found on page 34.
The return of principal for the bond holdings in The Income Fund of America is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. High-yield bonds are subject to greater fluctuations in value and risk of loss of income and principal. Investing outside the United States may be subject to additional risks, such as currency fluctuations and political instability, which are detailed in the fund’s prospectus.
Fellow shareholders:
[photo of a body of water with trees in the background]
For the 12 months ended July 31, 2008, shares of The Income Fund of America fell 9.5%. This return was ahead of the –11.1% figure turned in by the unmanaged Standard & Poor’s 500 Composite Index (a broad measure of the U.S. stock market), but trailed the 6.2% positive return of the Lehman Brothers U.S. Aggregate Index, a gauge of the U.S. bond market.
The Income Fund of America also finished behind the Lipper Income Funds Index, a measure of its peer group, which dropped 3.1%.
While we are disappointed with the one-year return, we maintain a long-term perspective when managing the fund and would encourage shareholders to take a similar approach to evaluating its results. A review of the table below reveals that the fund has outpaced all of its benchmarks for each of the longer time periods shown.
[Begin Sidebar]
Results at a glance (with dividends reinvested or interest compounded) | ||||||||||||||||
Average annual total returnsfor periods ended July 31, 2008 | ||||||||||||||||
1 year | 5 years | 10 years | Lifetime1 | |||||||||||||
The Income Fund of America (Class A shares) | –9.5 | % | 8.3 | % | 6.7 | % | 11.9 | % | ||||||||
Standard & Poor’s 500 Composite Index | –11.1 | 7.0 | 2.9 | 11.2 | ||||||||||||
Lipper Income Funds Index2 | –3.1 | 5.9 | 4.7 | — | 3 | |||||||||||
Lehman Brothers U.S. Aggregate Index | 6.2 | 4.6 | 5.7 | 8.2 | 4 | |||||||||||
Consumer Price Index (inflation)5 | 5.6 | 3.6 | 3.0 | 4.6 | ||||||||||||
1 Since December 1, 1973, when Capital Research and Management Company became the fund’s investment adviser. | ||||||||||||||||
2 Source: Lipper. Figures do not reflect the effect of sales charges. | ||||||||||||||||
3 The inception date for the index was December 31, 1988. | ||||||||||||||||
4 From December 1, 1973, through December 31, 1975, the Lehman Brothers U.S. Government/Credit Index was used because the Lehman Brothers U.S. Aggregate Index did not yet exist. | ||||||||||||||||
5 Computed from data supplied by the U.S. Department of Labor, Bureau of Labor Statistics. |
The market indexes are unmanaged and their results do not reflect the effect of sales charges, commissions or expenses. Fund returns do not reflect the effect of sales charges.
[End Sidebar]
Our income focus
Notwithstanding challenging market conditions for dividend-focused investors, we continued to deliver on our primary objective — providing quarterly income to shareholders. During the period, the fund’s 5.2% 12-month yield was more than double the 2.3% yield of the S&P 500 and well above the 4.0% figure registered by the Lipper Income Funds Average.
[Begin Sidebar]
In this report
Special Feature | |
6 | Looking back, looking forward: Reflections on a challenging year |
Contents | |
1 | Letter to shareholders |
4 | The value of a long-term perspective |
12 | About your fund |
13 | The portfolio at a glance |
14 | Summary investment portfolio |
20 | Financial statements |
35 | Board of directors and other officers |
Providing fund shareholders with a sizable dividend can pose a significant challenge during tumultuous economic times. That’s because some companies facing tough business environments roll back their dividends and use the retained cash to shore up ailing operations. That happened during the period, when several of our holdings lowered their payouts. Despite this, we did not reduce our dividend. Our commitment to income is paramount and we prepare for difficult markets and challenging dividend environments as we build the fund’s portfolio.
In December 2007, The Income Fund of America also paid a special dividend of 13 cents a share and made a capital gain distribution of 84.8 cents a share.
Few safe havens
The economic and market tumult that had begun to appear during the latter part of the fund’s 2007 fiscal year picked up steam throughout the most recent 12 months. The environment was marked by multiple jolts to the financial system — notably the pronounced trouble in the subprime mortgage area, increasing losses among many prominent financial institutions and the failure of Bear Stearns and IndyMac. Steeply rising oil prices added to the economic uncertainty and weighed heavily on consumers. These factors resulted in economic weakness and translated into a significant drop in equity markets.
While the market downturn was broad-based, many of the high-dividend-paying sectors in which the fund has historically maintained sizable concentrations suffered disproportionately. Indeed, as a group, the highest dividend-paying companies within the S&P 500 posted the worst results, creating a particularly difficult investment environment for an income-focused fund.
Not surprisingly, stocks of financial companies — particularly some of the thrifts and mortgage finance companies with direct exposure to subprime mortgages — were hit hardest.
Another historically high-yielding area, pharmaceuticals, declined in the face of a variety of headwinds that included patent expirations, unfavorable research results and uncertainty over the public policy environment that will result from a new presidency.
U.S. telecommunications companies dropped sharply after rising steadily for a number of years. Economic softening and the ongoing transformation of the domestic telephony environment were to blame.
Fixed-income challenges
At the close of the period, 27.0% of the fund’s assets were invested in fixed-income securities, up from 23.6% the previous year. As would be expected in this environment, having a considerable portion of the fund’s assets invested in bonds was preferable to an all equity portfolio. As a group, however, our fixed-income holdings recorded a slight decline in value. As was the case with equities, much of the trouble centered on financial companies. Though going into the period we did not own any of the subprime mortgage securities at the heart of the problem, we did own bonds of firms involved in the mortgage business. Many of our holdings among high-yield bonds, which are economically sensitive and tend to move in step with equity markets, also struggled.
[Begin Sidebar]
Striking a balance between return and volatility
The Income Fund of America takes a prudent path to income. Looking back 10 years, as shown at right, the fund has provided higher returns than stocks, bonds and the average income fund, and lower volatility than the broader stock market.
[begin chart]
5 Years | 10 Years | Since 12/31/75 | ||||||||||||||||||||||
Fund | Annual Return | Annual Std Dev | Annual Return | Annual Std Dev | Annual Return | Annual Std Dev | ||||||||||||||||||
Income Fund of America | 8.33 | 7.11 | 6.69 | 8.47 | 11.93 | 8.95 | ||||||||||||||||||
Lehman Aggregate Bond | 4.55 | 3.13 | 5.65 | 3.49 | 8.25 | 5.75 | ||||||||||||||||||
S&P 500 | 7.02 | 9.39 | 2.91 | 14.88 | 11.22 | 14.62 | ||||||||||||||||||
Lipper Income Funds Index | 5.87 | 4.27 | 4.66 | 6.10 |
Sources: Stocks — S&P 500; Bonds — Lehman Brothers U.S. Aggregate Index;
Income Funds Index — Lipper. Returns include reinvestment of all distributions.
Volatility is calculated at net asset value by Lipper using annualized standard deviation (based on monthly returns), a measure of how returns over time have varied from the mean; a lower number signifies lower volatility.
[End Sidebar]
Not all bad news
In last year’s annual report, we notified shareholders that we had increased the amount of the fund’s assets we were able to invest in equities of companies based outside the United States from 20% to 25%. We sought this increase not in response to the specific market conditions at that time, but rather to increase our ability to take advantage of future opportunities.
Interestingly, our percentage of assets in stocks of companies domiciled outside the United States actually stayed relatively flat in the wake of that change, going from 17.6% to 17.9% of holdings
over the last 12 months. However, many of those investments — particularly a select group within the utilities and telecommunications areas — were among the most positive contributors to the fund’s results. They also paid healthy dividends. This underscores the value of being able to cast our net globally as we search for investment opportunities.
To aid us in taking advantage of such future opportunities, the fund has considerable cash on hand. Currently, 9.1% of assets are held in cash and equivalents, up slightly from 8.6% a year ago.
Looking forward
Market declines challenge investors and investment professionals alike, yet The Income Fund of America has successfully weathered past difficult environments thanks to the dividend-focused, research-driven approach we continue to employ.
To learn more about that approach and the philosophy at the heart of the fund’s long-term success, and for an even closer look at the most recent fiscal year, please turn to the round-table discussion “Looking back, looking forward: Reflections on a challenging year” that begins on page 6.
Cordially,
/s/ Hilda L. Applbaum
Hilda L. Applbaum
Vice Chairman and Principal Executive Officer
/s/ David C. Barclay
David C. Barclay
President
September 4, 2008
For current information about the fund, visit americanfunds.com.
[Begin Sidebar]
A lifetime of high current income
The Income Fund of America’s 12-month dividend yield vs. benchmarks
Year ended July 31
• The Income Fund of America
• Lipper Income Funds Average
• S&P 500
[begin line chart]
Year-end | IFA | Lipper Inc Average | S&P 500 | |||||||||
1/31/1975 | 7.30 | 7.34 | 4.71 | |||||||||
7/31/1975 | 7.24 | 6.98 | 4.18 | |||||||||
1/31/1976 | 6.30 | 6.53 | 3.65 | |||||||||
7/31/1976 | 7.06 | 6.54 | 3.66 | |||||||||
1/31/1977 | 6.94 | 6.31 | 4.01 | |||||||||
7/31/1977 | 6.15 | 6.26 | 4.47 | |||||||||
1/31/1978 | 6.61 | 6.83 | 5.28 | |||||||||
7/31/1978 | 6.70 | 6.68 | 4.92 | |||||||||
1/31/1979 | 7.56 | 7.07 | 5.12 | |||||||||
7/31/1979 | 7.38 | 7.04 | 5.19 | |||||||||
1/31/1980 | 7.83 | 7.36 | 4.99 | |||||||||
7/31/1980 | 7.63 | 7.37 | 4.95 | |||||||||
1/31/1981 | 8.07 | 7.95 | 4.81 | |||||||||
7/31/1981 | 8.16 | 8.45 | 4.91 | |||||||||
1/31/1982 | 8.75 | 9.52 | 5.53 | |||||||||
7/31/1982 | 9.81 | 10.39 | 6.37 | |||||||||
1/31/1983 | 7.95 | 8.74 | 4.74 | |||||||||
7/31/1983 | 7.95 | 8.36 | 4.28 | |||||||||
1/31/1984 | 7.86 | 8.54 | 4.36 | |||||||||
7/31/1984 | 8.60 | 9.42 | 4.87 | |||||||||
1/31/1985 | 7.69 | 8.40 | 4.22 | |||||||||
7/31/1985 | 7.45 | 8.20 | 4.07 | |||||||||
1/31/1986 | 7.30 | 7.80 | 3.75 | |||||||||
7/31/1986 | 7.27 | 7.43 | 3.45 | |||||||||
1/31/1987 | 6.85 | 6.84 | 3.03 | |||||||||
7/31/1987 | 7.02 | 6.90 | 2.69 | |||||||||
1/31/1988 | 7.62 | 7.33 | 3.31 | |||||||||
7/31/1988 | 6.96 | 7.53 | 3.27 | |||||||||
1/31/1989 | 6.69 | 7.45 | 3.34 | |||||||||
7/31/1989 | 6.67 | 7.25 | 3.04 | |||||||||
1/31/1990 | 6.99 | 8.05 | 3.37 | |||||||||
7/31/1990 | 7.07 | 8.12 | 3.31 | |||||||||
1/31/1991 | 8.12 | 9.10 | 3.52 | |||||||||
7/31/1991 | 7.09 | 7.96 | 3.11 | |||||||||
1/31/1992 | 6.33 | 7.22 | 2.96 | |||||||||
7/31/1992 | 6.05 | 6.72 | 2.89 | |||||||||
1/31/1993 | 6.44 | 6.18 | 2.83 | |||||||||
7/31/1993 | 6.19 | 5.54 | 2.79 | |||||||||
1/31/1994 | 5.56 | 5.12 | 2.64 | |||||||||
7/31/1994 | 6.06 | 5.21 | 2.80 | |||||||||
1/31/1995 | 6.14 | 5.64 | 2.81 | |||||||||
7/31/1995 | 5.55 | 5.22 | 2.41 | |||||||||
1/31/1996 | 5.07 | 4.89 | 2.18 | |||||||||
7/31/1996 | 5.19 | 5.02 | 2.28 | |||||||||
1/31/1997 | 5.09 | 4.60 | 1.89 | |||||||||
7/31/1997 | 4.74 | 4.24 | 1.61 | |||||||||
1/31/1998 | 4.27 | 4.49 | 1.59 | |||||||||
7/31/1998 | 4.32 | 4.40 | 1.43 | |||||||||
1/31/1999 | 4.79 | 4.21 | 1.29 | |||||||||
7/31/1999 | 4.86 | 4.44 | 1.24 | |||||||||
1/31/2000 | 5.40 | 4.88 | 1.19 | |||||||||
7/31/2000 | 5.49 | 4.95 | 1.15 | |||||||||
1/31/2001 | 4.78 | 4.87 | 1.20 | |||||||||
7/31/2001 | 4.80 | 4.68 | 1.30 | |||||||||
1/31/2002 | 5.01 | 4.29 | 1.40 | |||||||||
7/31/2002 | 5.49 | 4.04 | 1.75 | |||||||||
1/31/2003 | 5.45 | 3.75 | 1.88 | |||||||||
7/31/2003 | 4.69 | 3.37 | 1.66 | |||||||||
1/31/2004 | 4.05 | 2.82 | 1.54 | |||||||||
7/31/2004 | 3.98 | 2.76 | 1.69 | |||||||||
1/31/2005 | 3.57 | 2.54 | 1.64 | |||||||||
7/31/2005 | 3.44 | 2.45 | 1.70 | |||||||||
1/31/2006 | 3.75 | 2.73 | 1.75 | |||||||||
7/31/2006 | 3.84 | 2.81 | 1.83 | |||||||||
1/31/2007 | 4.52 | 3.02 | 1.75 | |||||||||
7/31/2007 | 4.43 | 3.15 | 1.81 | |||||||||
1/31/2008 | 4.68 | 3.65 | 2.03 | |||||||||
7/31/2008 | 5.23 | 3.95 | 2.29 |
All numbers calculated by Lipper.
[End Sidebar]
The value of a long-term perspective
How a $10,000 investment has grown
There have always been reasons not to invest. If you look beyond the negative headlines, however, you will find that despite occasional stumbles, financial markets have tended to reward investors over the long term. Active management — bolstered by experience and careful research — can add even more value. As the chart below shows, over its lifetime, The Income Fund of America (IFA) has delivered higher returns than both the broader stock and bond markets. Dividends, particularly when reinvested, have accounted for a large portion of the fund’s overall results.
Average annual total returns based on a $1,000 investment | ||||||||||||
(for periods ended July 31, 2008)* | ||||||||||||
1 year | 5 years | 10 years | ||||||||||
Class A shares | –14.66 | % | 7.06 | % | 6.06 | % | ||||||
*Assumes reinvestment of all distributions and payment of the maximum 5.75% sales charge. |
The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased the waiver to 10% on April 1, 2005. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 29 and 30 for details.
[begin mountain chart]
Year End July 31 | IFA1,7,8 remaining amounts if dividends taken in cash | IFA1,4,8 with dividends reinvested | Lehman Bros. U.S. Aggregate Index5,6 with interest compounded | Standard & Poor’s 500 Composite Index5 with dividends reinvested | ||||||||||||||
1974# | 8,767 | 9,088 | 9,378 | 8,481 | ||||||||||||||
1975 | 10,141 | 11,391 | 10,580 | 9,951 | ||||||||||||||
1976 | 12,155 | 14,750 | 11,871 | 12,066 | ||||||||||||||
1977 | 12,701 | 16,392 | 13,189 | 12,042 | ||||||||||||||
1978 | 12,584 | 17,403 | 13,474 | 12,926 | ||||||||||||||
1979 | 12,693 | 18,921 | 14,373 | 14,069 | ||||||||||||||
1980 | 12,490 | 20,161 | 14,602 | 17,412 | ||||||||||||||
1981 | 12,818 | 22,484 | 13,871 | 19,675 | ||||||||||||||
1982 | 12,256 | 23,663 | 16,720 | 17,063 | ||||||||||||||
1983 | 16,112 | 33,683 | 20,383 | 27,174 | ||||||||||||||
1984 | 15,738 | 35,721 | 22,154 | 26,367 | ||||||||||||||
1985 | 19,443 | 47,674 | 27,452 | 34,914 | ||||||||||||||
1986 | 21,668 | 57,146 | 33,353 | 44,833 | ||||||||||||||
1987 | 23,568 | 66,671 | 34,859 | 62,449 | ||||||||||||||
1988 | 22,341 | 67,812 | 37,497 | 55,109 | ||||||||||||||
1989 | 25,644 | 83,698 | 43,200 | 72,685 | ||||||||||||||
1990 | 24,351 | 84,639 | 46,253 | 77,386 | ||||||||||||||
1991 | 25,390 | 95,046 | 51,204 | 87,239 | ||||||||||||||
1992 | 28,370 | 113,237 | 58,770 | 98,377 | ||||||||||||||
1993 | 29,917 | 126,680 | 64,746 | 106,947 | ||||||||||||||
1994 | 28,788 | 129,171 | 64,807 | 112,457 | ||||||||||||||
1995 | 31,571 | 150,378 | 71,358 | 141,775 | ||||||||||||||
1996 | 34,007 | 170,618 | 75,311 | 165,244 | ||||||||||||||
1997 | 41,731 | 220,576 | 83,417 | 251,353 | ||||||||||||||
1998 | 44,436 | 245,542 | 89,980 | 299,807 | ||||||||||||||
1999 | 45,588 | 264,664 | 92,220 | 360,395 | ||||||||||||||
2000 | 42,276 | 259,165 | 97,721 | 392,724 | ||||||||||||||
2001 | 46,460 | 299,416 | 110,124 | 336,476 | ||||||||||||||
2002 | 41,359 | 280,397 | 118,420 | 257,015 | ||||||||||||||
2003 | 44,136 | 314,550 | 124,835 | 284,354 | ||||||||||||||
2004 | 49,057 | 364,136 | 130,876 | 321,781 | ||||||||||||||
2005 | 54,032 | 415,525 | 137,146 | 366,973 | ||||||||||||||
2006 | 56,985 | 456,119 | 139,146 | 386,700 | ||||||||||||||
2007 | 61,946 | 518,361 | 146,909 | 449,054 | ||||||||||||||
2008 | 53,502 | 469,245 | 155,944 | 399,251 |
[end mountain chart]
Fund results shown are for past periods for Class A shares and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com. Fund figures reflect deduction of the maximum sales charge of 5.75% on the $10,000 investment.1 Thus, the net amount invested was $9,425.2
Expense ratios and turnover rates*
Year ended July 31, 2008 | ||||||||
The Income Fund of America | Industry average† | |||||||
Expense ratio | 0.54 | %†† | 0.69 | % | ||||
Portfolio turnover rate | 38 | % | 43 | % | ||||
* The expense ratio is the annual percentage of net assets used to pay fund expenses. The portfolio turnover rate is a measure of how often securities are bought and sold by a fund. | ||||||||
† Front-end load income funds, as measured by Lipper. | ||||||||
†† Reflects the fee waiver, 0.57% without the fee waiver. |
Year ended July 31 | 1974 | 3 | 1975 | 1976 | 1977 | 1978 | 1979 | 1980 | 1981 | |||||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||||||
Dividends in cash8 | $ | 343 | 734 | 859 | 781 | 843 | 937 | 952 | 1,046 | |||||||||||||||||||||||
Dividends reinvested8 | $ | 346 | 785 | 997 | 970 | 1,117 | 1,333 | 1,463 | 1,743 | |||||||||||||||||||||||
Value of investment | ||||||||||||||||||||||||||||||||
Dividends in cash8 | $ | 8,767 | 10,141 | 12,155 | 12,701 | 12,584 | 12,693 | 12,490 | 12,818 | |||||||||||||||||||||||
Dividends reinvested8 | $ | 9,088 | 11,391 | 14,750 | 16,392 | 17,403 | 18,921 | 20,161 | 22,484 | |||||||||||||||||||||||
IFA total return | (9.1 | )% | 25.3 | 29.5 | 11.1 | 6.2 | 8.7 | 6.6 | 11.5 | |||||||||||||||||||||||
Year ended July 31 | 1982 | 1983 | 1984 | 1985 | 1986 | 1987 | 1988 | 1989 | ||||||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||||||
Dividends in cash8 | 1,202 | 1,280 | 1,344 | 1,438 | 1,550 | 1,636 | 1,542 | 1,710 | ||||||||||||||||||||||||
Dividends reinvested8 | 2,187 | 2,548 | 2,895 | 3,365 | 3,909 | 4,431 | 4,479 | 5,337 | ||||||||||||||||||||||||
Value of investment | ||||||||||||||||||||||||||||||||
Dividends in cash8 | 12,256 | 16,112 | 15,738 | 19,443 | 21,668 | 23,568 | 22,341 | 25,644 | ||||||||||||||||||||||||
Dividends reinvested8 | 23,663 | 33,683 | 35,721 | 47,674 | 57,146 | 66,671 | 67,812 | 83,698 | ||||||||||||||||||||||||
IFA total return | 5.2 | 42.3 | 6.0 | 33.5 | 19.9 | 16.7 | 1.7 | 23.4 | ||||||||||||||||||||||||
Year ended July 31 | 1990 | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | ||||||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||||||
Dividends in cash8 | 1,577 | 1,764 | 1,715 | 1,713 | 1,727 | 1,752 | 1,766 | 1,968 | ||||||||||||||||||||||||
Dividends reinvested8 | 5,269 | 6,311 | 6,579 | 6,995 | 7,471 | 8,046 | 8,581 | 10,074 | ||||||||||||||||||||||||
Value of investment | ||||||||||||||||||||||||||||||||
Dividends in cash8 | 24,351 | 25,390 | 28,370 | 29,917 | 28,788 | 31,571 | 34,007 | 41,731 | ||||||||||||||||||||||||
Dividends reinvested8 | 84,639 | 95,046 | 113,237 | 126,680 | 129,171 | 150,378 | 170,618 | 220,576 | ||||||||||||||||||||||||
IFA total return | 1.1 | 12.3 | 19.1 | 11.9 | 2.0 | 16.4 | 13.5 | 29.3 | ||||||||||||||||||||||||
Year ended July 31 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||||||
Dividends in cash8 | 1,959 | 2,210 | 2,320 | 2,226 | 2,272 | 2,071 | 1,944 | 1,850 | ||||||||||||||||||||||||
Dividends reinvested8 | 10,530 | 12,446 | 13,740 | 13,913 | 14,927 | 14,311 | 14,072 | 13,921 | ||||||||||||||||||||||||
Value of investment | ||||||||||||||||||||||||||||||||
Dividends in cash8 | 44,436 | 45,588 | 42,276 | 46,460 | 41,359 | 44,136 | 49,057 | 54,032 | ||||||||||||||||||||||||
Dividends reinvested8 | 245,542 | 264,664 | 259,165 | 299,416 | 280,397 | 314,550 | 364,136 | 415,525 | ||||||||||||||||||||||||
IFA total return | 11.3 | 7.8 | (2.1 | ) | 15.5 | (6.4 | ) | 12.2 | 15.8 | 14.1 | ||||||||||||||||||||||
Year ended July 31 | 2006 | 2007 | 2008 | |||||||||||||||||||||||||||||
Value of dividends | ||||||||||||||||||||||||||||||||
Dividends in cash8 | 2,180 | 2,728 | 2,784 | |||||||||||||||||||||||||||||
Dividends reinvested8 | 17,020 | 22,200 | 23,692 | |||||||||||||||||||||||||||||
Value of investment | ||||||||||||||||||||||||||||||||
Dividends in cash8 | 56,985 | 61,946 | 53,502 | |||||||||||||||||||||||||||||
Dividends reinvested8 | 456,119 | 518,361 | 469,245 | |||||||||||||||||||||||||||||
IFA total return | 9.8 | 13.6 | (9.5 | ) |
Average annual total return for fund’s lifetime: 11.7%1
1As outlined in the prospectus, the sales charge is reduced for accounts (and aggregated investments) of $25,000 or more and is eliminated for purchases of $1 million or more. There is no sales charge on dividends or capital gain distributions that are reinvested in additional shares. |
2The maximum initial sales charge was 8.5% prior to July 1, 1988. |
3For the period December 1, 1973 (when Capital Research and Management Company became the fund’s investment adviser), through July 31, 1974. |
4Includes reinvested dividends of $268,005 and reinvested capital gain distributions of $131,223. |
5The indexes are unmanaged and include reinvested distributions, but do not reflect the effect of sales charges, commissions or expenses. |
6From December 1, 1973, through December 31, 1975, the Lehman Brothers U.S. Government/Credit Index was used because the Lehman Brothers U.S. Aggregate Index did not yet exist. |
7Includes capital gain distributions of $24,067, but does not reflect income dividends of $56,722 taken in cash. |
8From April 1990 to September 1994 and from September 2003 to the present, the fund accrued dividends daily but paid quarterly. Dividends reflect quarterly dividends actually paid during the period, while year-end values are adjusted for cumulative dividends accrued but not yet paid. |
The results shown are before taxes on fund distributions and sale of fund shares.
Looking back, looking forward: Reflections on a challenging year
Five of The Income Fund of America’s investment professionals offer their perspectives on coping with the past year’s volatile markets and preparing for the opportunities ahead.
This year marks the 35th year that Capital Research and Management Company has managed The Income Fund of America. Over those three-and-a-half decades, the fund has averaged an 11.9% annual rate of return for a total return exceeding 4,800%. Owing to its research-driven, income-focused approach, the fund has outpaced its key benchmarks and helped shareholders meet their crucial long-term objectives.
Yet this year — much like the first of those 35, when the fund finished in negative territory — proved to be a difficult one, with a broad-based market downturn challenging investment professionals and fund shareholders alike.
In the following pages, vice chairman of the fund and equity portfolio counselor Hilda Applbaum, her fellow equity counselors Dina Perry, Steve Watson and Andrew Suzman, and fixed-income counselor and fund president David Barclay examine the challenges of the previous year and discuss how the past informs their approach to navigating the current market volatility. The group also offers perspective on how tough times have historically provided excellent opportunity to pursue the fund’s objectives.
[Begin Sidebar]
Fund results shown are for past results for Class A shares and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share price and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com. Fund results shown, unless otherwise indicated, are at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower.
[End Sidebar]
[photo of a lake - trees and mountains in the background]
What made this a difficult year for the fund?
Hilda: Well, as we know, it was a tough year for markets generally and while the fund declined less than the broader stock market, it did finish in negative territory. In many past downturns, the fund has held up significantly better. However, the current situation has proved especially challenging because much of the market weakness was in some of the higher yielding sectors that have historically been fishing ponds for the fund.
Andrew: For instance, financial stocks have traditionally offered high yields, and we have long had significant concentrations within the sector. In the last 12 months, weakening in the housing market has created turmoil within the banking system and the stock values of banks have suffered. Beyond financials, other historically high-yielding sectors such as pharmaceuticals, U.S. telecommunications and real estate investment trusts (REITS) were down as well. Safe havens were in short supply and navigating through unscathed proved tough.
Hilda: In the case of pharmaceuticals, it wasn’t a single factor that weighed on the sector but rather a number of separate situations that affected numerous companies — expiring patents, studies that didn’t go as hoped and uncertainty over the kinds of policies a new presidential administration might implement. In the telecommunications area, many of the U.S. providers have been negatively affected by the slowing economy. Nonetheless, earnings have been reasonably good, cash flows strong and companies are maintaining and, in some cases, growing dividends. So one might argue that this sector, which had provided excellent returns for several years, got caught in the downturn.
Dina: In addition to the difficulties created by the financials, we had steeply rising oil prices, which delivered a kind of one-two punch to the economy. The cost of the whole consumer basket — the goods that we buy during the course of our daily lives — has gone up and as people spend more of their income on food and gasoline, they have less to spend on other things. That causes the
economy to slow and broadly affects the stock market.
[Begin Pull Quote]
[photo of a person in a kayak in a lake - trees in the background]
“I feel confident that this is the time for us to do what we do best: perform in-depth research and focus on individual companies. And we bring considerable resources to that effort.”
— Hilda Applbaum
[End Pull Quote]
[photo of a lake - trees in the background]
[Begin Photo Caption]
[photo of Hilda Applbaum]
Hilda Applbaum
San Francisco
[End Photo Caption]
[Begin Photo Caption]
[photo of David Barclay]
David Barclay
Los Angeles
[End Photo Caption]
[Begin Photo Caption]
[photo of Dina Perry]
Dina Perry
Washington, D.C.
[End Photo Caption]
[Begin Photo Caption]
[photo of Steve Watson]
Steve Watson
Hong Kong
[End Photo Caption]
[Begin Photo Caption]
[photo of Andrew Suzman]
Andrew Suzman
New York
[End Photo Caption]
David: The bond market was challenging as well. Going into the period, we didn’t hold any of the subprime mortgage securities that turned out to be so problematic, but we did own bonds in many of the companies that were involved in the mortgage business and were adversely affected by the market troubles. And as with stocks, the bond market as a whole was negatively affected by the weakening economy. The only area that was relatively unscathed was U.S. government bonds. However, those securities made up a relatively small percentage of the fund’s portfolio, as has been the case throughout much of IFA’s history.
Hilda: Yet despite these conditions, one of the bright spots for IFA’s shareholders is that even in a period like this when many companies — especially financials — cut their dividends, we did not cut the fund’s dividend. We never lose sight of the fact that providing regular quarterly income is our primary objective and we manage the fund with that goal in mind.
How did you respond to the downturn?
Dina: This question of “How did IFA respond?” is tough to answer because the fund has several managers and we don’t all share the same views on markets and the economy. We each have a different perspective and respond in our own ways. And we have an investment method known as the multiple portfolio counselor system in which each of us independently manages a portion of the fund’s assets. This enables us to invest according to our individual view of the market and the economy. It’s a system that has been in place throughout the fund’s lifetime and it is part of the reason for the fund’s long-term consistency.
Steve: When a stock falls, it’s painful, and there’s a tendency to want to alleviate the anxiety. In an investment context, this typically means selling, and sometimes that is the right thing to do, but not always. The long-term investor needs the discipline to look at a company during a difficult period and ask, “What is this company and this stock really worth?” And if after rechecking our assumptions and re-examining our investment thesis we conclude that the stock is worth more than it’s trading for today, then we should continue to own it and, in some cases, buy more. In all market environments, we subject our holdings to this kind of analysis.
[Begin Pull Quote]
“When attempting to gain insight into complicated issues such as the condition of certain complex financial institutions, the collaboration among our equity and fixed-income analysts — with their different points of view — is very beneficial.”
— David Barclay
[End Pull Quote]
Hilda: During volatile and declining markets, we as investment professionals share some of the challenges faced by shareholders. One thing we keep in the forefront of our minds is that during sharply rising and falling markets, things tend to get exaggerated. Valuations go to excesses in ways that are not substantiated by measurements like earnings, revenues and growth. As is typical, we didn’t get to the present excesses overnight and we’re not going to return to equilibrium overnight. However, the U.S. market and economy ultimately facilitate a return to equilibrium. It takes time and it’s important that we don’t get whipsawed by overreacting to the market’s moves by, for example, abandoning a holding that we believe is at a market low.
Take telecom companies: On the heels of the downturn in stock prices, many investors seem to have lost faith in the sector and sold their holdings. But just as Steve mentioned, we retested our assumptions and investment thesis and our conviction remains in place. We continue to believe they are solid long-term investments with attractive and sustainable dividends.
David: Ultimately, whether markets are good or bad, our analytical challenges and tasks are essentially the same: We try to understand the economic cycle and focus on securities that can weather all phases of it. And while individual investors facing a steady stream of bad news may wonder whether they’re in the midst of something unprecedented, as investment professionals we often do the opposite and ask, “What is similar to past cycles?” and “What insights can we gain to benefit our decision-making and shareholder returns?” For instance, this period echoes my experience analyzing and investing in high-yield bonds. High yield — and financial markets in general — regularly goes through periods when credit standards get relaxed and financing is too easy. This eventually results in defaults, which pressures financial institutions and leads to a tightening of credit and shortage of financing. During these periods of tight credit, there’s a tendency for only the better companies to have access to financing. This provides opportunity for those with the experience, research resources and fortitude to continue to invest.
Where are you finding opportunities for the fund?
Steve: It’s been very difficult to see the price declines in the U.S. market and in some of the sectors traditionally of greatest importance to the fund. But difficult times and uncertain markets do present opportunities. In fact, when everyone is feeling the same way about the market, I get nervous because too much consensus can lead to markets getting inappropriately priced and the creation of bubbles. Right now, real value is appearing as many investors take flight. Indeed, based on the valuations of many financials, pharmaceuticals and telecom companies, there are attractive investment opportunities in the U.S. The caveat is that you really have to do your research and think long term, and by long term I mean five-years-plus in many cases. Thankfully, at American Funds, we have the freedom to do so as we don’t focus on the month-to-month or day-to-day in our search for value.
Andrew: There are values to be had outside the sectors Steve mentioned. As we discussed in last year’s annual report, when stock prices fall and dividend payouts remain constant, yields rise. Generally speaking, since a stock must have a certain yield for us to invest in it, a broad-based downturn in the market can effectively expand the number of potential investments available to the fund. That is certainly happening now. For instance, there are some high-quality growth cyclicals — companies that typically rise and fall with the economic cycle — that are now eligible for the fund to invest in. This is helping us set up the portfolio for the next three to five years.
[Begin Pull Quote]
[photo of a stream - - stones in the water - trees in the background]
“When everyone is feeling the same way about the market, I get nervous because too much consensus can lead to markets getting inappropriately priced and the creation of bubbles. Right now, real value is appearing as many investors take flight.”
— Steve Watson
[End Pull Quote]
Hilda: I feel confident that this is the time for us to do what we do best: perform in-depth research and focus on individual companies. And we bring considerable resources to that effort. For instance, when it comes to the financial companies, our internal research teams comprise multiple equity and fixed-income analysts stationed around the world. Their collaborative efforts produce meaningful insights into these firms. We also have long-standing relationships with many company management teams. We meet with them to learn how well they understand the dynamics of the business environment and how proactive they are being in terms of righting the ship. We also look at all the ways to invest in a company — whether that’s through stocks, bonds or convertible issues.
David: That’s an important point. We benefit greatly from the ability to invest in both stocks and bonds as we seek to provide income for shareholders. In recent years, we might have been able to provide the same level of income by investing in stocks alone, but bonds have helped reduce volatility by also acting as a buffer for the portfolio during market downturns. It’s perhaps less apparent during this market downturn but the fund’s longer term history certainly bears this out. Also, when attempting to gain insight into complicated issues such as the condition of certain complex financial institutions, the collaboration among our equity and fixed-income analysts — with their different points of view — is very beneficial.
Dina: For me, the financial sector is still the most interesting because it’s depressed and many companies still have attractive yields. The companies that can weather the storm will emerge stronger, and I also think there’s going to be significant consolidation in the sector. But the question of whether or not to buy more is still a challenging one. Even though shares in many of the companies seem very attractive, the future is not assured so we have to be careful.
Hilda: To follow up on Andrew’s point, as we mentioned in last year’s report, we are now able to own some technology companies in the fund. This speaks to a change in philosophy by some of the more thoughtful company managements that, having seen fewer opportunities to deploy their cash profitability, are appropriately returning some of it to shareholders. This has enabled us to further diversify our holdings.
David: Some sectors of the bond market without direct exposure to the financials area are quite beaten up. Thus far, we have been opportunistic across the board and haven’t been focused on any one sector. As for financials, we have a good understanding of these companies, and we should be well positioned to take advantage of opportunities if we think that doing so makes sense for shareholders.
[photo of a tree-lined pond]
Why is the fund’s income objective still relevant and important to investors?
Hilda: We remain focused on providing regular quarterly income to shareholders. In addition to being an important part of our shareholders’ investment strategies, that focus provides a valuable framework for managing the fund and evaluating companies. We’re forced to ask and try to get to the root of tough questions: “Can this company continue to pay its dividend?” “Based on its business prospects, should this company continue to pay its dividend?” This imposes a kind of discipline on us that compels us to check and recheck our assumptions. While that process may occasionally lead to a loss of faith in a given company or investment, we continue to have confidence and faith in the soundness of the fund’s objective and our methodology.
Andrew: Even the most disciplined investment approach can encounter difficulties. But we believe that investing for income through dividend-paying stocks and a diverse mix of bonds is more relevant than ever. Capital appreciation and total return are important, and the fund has a history of providing both, but environments like this one really underscore the attractiveness of current income, which is a tangible return. It can help meet current expenses, offset inflation and aid investors with their long-term objectives.
[Begin Sidebar]
Experience counts
The portfolio counselors who manage The Income Fund of America average over 25 years of investment industry experience, most of it with American Funds. This can play a key role in navigating today’s challenging investment environment. The seasoning they gained helps them analyze cycles, detect patterns, identify opportunities and manage risk for shareholders.
Investment | Years with | |
Portfolio counselor | industry experience | American Funds |
Hilda Applbaum | 22 | 14 |
David Barclay | 27 | 20 |
Abner Goldstine | 56 | 41 |
Dina Perry | 31 | 17 |
Andrew Suzman | 15 | 15 |
Jody Jonsson | 19 | 18 |
John Smet | 26 | 25 |
Steve Watson | 21 | 18 |
Grant Cambridge | 15 | 11 |
[End Sidebar]
About your fund
Fund results shown in this report, unless otherwise indicated, are for Class A shares at net asset value. If a sales charge (maximum 5.75%) had been deducted, the results would have been lower. Results are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.
Resilience during stock declines | The Income Fund of America (IFA) vs. the S&P 500 during market declines* | |||||||||||
Dates of decline | S&P 500 | IFA | IFA advantage | |||||||||
cumulative | cumulative | (percentage | ||||||||||
total return | total return | points) | ||||||||||
September 21, 1976, through March 6, 1978 | –13.5 | % | 1.9 | % | 15.4 | % | ||||||
November 28, 1980, through August 12, 1982 | –20.2 | 19.0 | 39.2 | |||||||||
August 25 through December 4, 1987 | –32.8 | –13.6 | 19.2 | |||||||||
July 16 through October 11, 1990 | –19.2 | –10.2 | 9.0 | |||||||||
July 17 through August 31, 1998 | –19.1 | –9.5 | 9.6 | |||||||||
March 24, 2000, through October 9, 2002 | –47.4 | 0.7 | 48.1 | |||||||||
*Periods show S&P 500 price declines of 15% or greater. S&P 500 total returns, which include reinvestment of all distributions, may be higher. There have been times when the index, which is unmanaged, has done better. |
Withdrawing income: the dividend advantage
Most fund shareholders reinvest their dividends, but some — including many nonprofit organizations — use dividends to meet current expenses. As the charts below show, the fund’s income has allowed withdrawals to be made without invading principal.
Higher dividends
[Begin bar chart]
Dividends produced | ||||
IFA | $ | 1,468,267 | ||
S&P 500 | 392,599 |
[End bar chart]
...... have helped to keep principal
intact, letting compounding do
its work.
[Begin bar chart]
IFA | S&P 500 | |||||||
Amount withdrawn | $ | 425,335 | $ | 425,335 | ||||
Ending value | 2,213,044 | 1,154,742 | ||||||
Initial investment | 100,000 | 100,000 |
[End bar chart]
Charts show hypothetical $100,000 investments in the fund (at net asset value) and the S&P 500 from January 1, 1974, to July 31, 2008. Example assumes a 5% withdrawal, increased 5% annually. The first withdrawal, on December 31, 1974, was $5,000. Total withdrawals over the fund’s lifetime come to $425,335.
Historical benefits of income
This chart shows one-year snapshots of the annual income produced by three hypothetical $10,000 investments made on July 31, 1974, in each of The Income Fund of America, the S&P 500, and three-month certificates of deposit (CDs). Over the past 34 years, income from the fund has been substantially higher.
Year ended July 31
[Begin bar chart]
[Begin bar chart]
The Income Fund of America | S&P 500 | CDs | ||||||||||
7/31/1975 | $ | 864 | $ | 479 | $ | 924 | ||||||
7/31/1976 | $ | 1,097 | $ | 511 | $ | 652 | ||||||
7/31/1977 | $ | 1,067 | $ | 617 | $ | 598 | ||||||
7/31/1978 | $ | 1,229 | $ | 728 | $ | 814 | ||||||
7/31/1979 | $ | 1,467 | $ | 838 | $ | 1,283 | ||||||
7/31/1980 | $ | 1,610 | $ | 980 | $ | 1,998 | ||||||
7/31/1981 | $ | 1,918 | $ | 1,110 | $ | 2,302 | ||||||
7/31/1982 | $ | 2,407 | $ | 1,241 | $ | 3,003 | ||||||
7/31/1983 | $ | 2,804 | $ | 1,339 | $ | 2,235 | ||||||
7/31/1984 | $ | 3,186 | $ | 1,477 | $ | 2,376 | ||||||
7/31/1985 | $ | 3,702 | $ | 1,637 | $ | 2,617 | ||||||
7/31/1986 | $ | 4,301 | $ | 1,788 | $ | 2,217 | ||||||
7/31/1987 | $ | 4,876 | $ | 1,948 | $ | 1,940 | ||||||
7/31/1988 | $ | 4,928 | $ | 2,084 | $ | 2,417 | ||||||
7/31/1989 | $ | 5,873 | $ | 2,555 | $ | 3,240 | ||||||
7/31/1990 | $ | 5,797 | $ | 2,969 | $ | 3,382 | ||||||
7/31/1991 | $ | 6,944 | $ | 3,140 | $ | 3,171 | ||||||
7/31/1992 | $ | 7,239 | $ | 3,303 | $ | 2,226 | ||||||
7/31/1993 | $ | 7,696 | $ | 3,469 | $ | 1,548 | ||||||
7/31/1994 | $ | 8,220 | $ | 3,658 | $ | 1,680 | ||||||
7/31/1995 | $ | 8,853 | $ | 3,963 | $ | 2,920 | ||||||
7/31/1996 | $ | 9,442 | $ | 4,388 | $ | 3,049 | ||||||
7/31/1997 | $ | 11,085 | $ | 4,713 | $ | 3,189 | ||||||
7/31/1998 | $ | 11,587 | $ | 4,955 | $ | 3,414 | ||||||
7/31/1999 | $ | 13,694 | $ | 5,236 | $ | 3,313 | ||||||
7/31/2000 | $ | 15,119 | $ | 5,333 | $ | 4,011 | ||||||
7/31/2001 | $ | 15,308 | $ | 5,130 | $ | 4,233 | ||||||
7/31/2002 | $ | 16,425 | $ | 5,265 | $ | 1,806 | ||||||
7/31/2003 | $ | 15,747 | $ | 5,526 | $ | 1,164 | ||||||
7/31/2004 | $ | 15,484 | $ | 6,344 | $ | 837 | ||||||
7/31/2005 | $ | 15,318 | $ | 7,290 | $ | 1,844 | ||||||
7/31/2006 | $ | 18,727 | $ | 8,261 | $ | 3,532 | ||||||
7/31/2007 | $ | 24,427 | $ | 9,483 | $ | 4,586 | ||||||
7/31/2008 | $ | 26,068 | $ | 10,663 | $ | 3,842 |
All results are calculated at net asset value with dividends and capital gains (where applicable) reinvested. Source for CDs is the Federal Reserve. CD income assumes reinvestment of both principal and interest at prevailing rates at the time of purchase. CDs are guaranteed; the fund is not.
The portfolio at a glance
The following summary investment portfolio is designed to streamline the report and help investors better focus on a fund’s principal holdings. For details on how to obtain a complete schedule of portfolio holdings, please see the inside back cover.
July 31, 2008
[begin pie chart]
U.S. common stocks | 42.6 | % | ||
Common stocks of issuers outside the U.S. | 17.9 | |||
Convertible securities & preferred stocks | 3.5 | |||
U. S. Treasury & agency bonds & notes | 2.4 | |||
Other fixed-income securities | 24.6 | |||
Short-term securities & other assets less liabilities | 9.0 |
[end pie chart]
Five largest sectors in common stock holdings | ||||
Percent of net assets | ||||
Financials | 10.1 | % | ||
Telecommunication services | 8.0 | |||
Utilities | 7.2 | |||
Consumer staples | 6.5 | |||
Industrials | 6.4 | |||
Ten largest common stock holdings | ||||
Percent of net assets | ||||
AT&T | 2.3 | % | ||
Verizon Communications | 2.0 | |||
Chevron | 1.9 | |||
General Electric | 1.8 | |||
Merck | 1.2 | |||
Bank of America | 1.2 | |||
Citigroup | 1.2 | |||
McDonald's | 1.1 | |||
Kraft Foods | 1.0 | |||
H.J. Heinz | 1.0 | |||
Country diversification | ||||
Percent of net assets | ||||
United States | 68.3 | % | ||
Euro zone* | 10.5 | |||
United Kingdom | 3.3 | |||
Canada | 1.1 | |||
Australia | 1.1 | |||
Hong Kong | 1.1 | |||
Other countries | 5.6 | |||
Short-term securities & other assets less liabilities | 9.0 | |||
*Countries using the euro as a common currency; those represented in the fund's portfolio are Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands and Spain. |
July 31, 2007
[begin pie chart]
U.S. common stocks | 46.5 | % | ||
Common stocks of issuers outside the U.S. | 17.6 | |||
Convertible securities & preferred stocks | 3.7 | |||
U. S. Treasury & agency bonds & notes | 2.2 | |||
Other fixed-income securities | 21.4 | |||
Short-term securities & other assets less liabilities | 8.6 |
[end pie chart]
Five largest sectors in common stock holdings | ||||
Percent of net assets | ||||
Financials | 14.5 | % | ||
Telecommunication services | 7.9 | |||
Utilities | 6.9 | |||
Consumer staples | 6.5 | |||
Industrials | 6.4 | |||
Ten largest common stock holdings | ||||
Percent of net assets | ||||
AT&T | 2.9 | % | ||
Chevron | 2.6 | |||
General Electric | 2.3 | |||
Verizon Communications | 2.0 | |||
Citigroup | 1.5 | |||
Merck | 1.5 | |||
Bristol-Myers Squibb | 1.5 | |||
Coca-Cola | 1.1 | |||
Washington Mutual | 1.1 | |||
Vodafone | 1.0 | |||
Country diversification | ||||
Percent of net assets | ||||
United States | 69.8 | % | ||
Euro zone* | 7.7 | |||
United Kingdom | 4.1 | |||
Australia | 1.6 | |||
Hong Kong | 1.3 | |||
Canada | 1.1 | |||
Other countries | 5.8 | |||
Short-term securities & other assets less liabilities | 8.6 | |||
*Countries using the euro as a common currency; those represented in the fund's portfolio are Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands and Spain. |
Summary investment portfolio, July 31, 2008
Common stocks - 60.43% | Shares | Market value (000) | Percent of net assets | |||||||||
Financials - 10.10% | ||||||||||||
Bank of America Corp. | 28,563,550 | $ | 939,741 | 1.23 | ||||||||
Citigroup Inc. | 47,000,000 | 878,430 | 1.15 | |||||||||
U.S. Bancorp | 16,337,400 | 500,088 | .65 | |||||||||
Lloyds TSB Group PLC | 61,959,000 | 362,520 | .47 | |||||||||
PNC Financial Services Group, Inc. | 4,897,000 | 349,107 | .46 | |||||||||
Equity Residential, shares of beneficial interest | 7,842,800 | 338,574 | .44 | |||||||||
Unibail-Rodamco, non-registered shares | 1,375,000 | 309,181 | .41 | |||||||||
Other securities | 4,046,634 | 5.29 | ||||||||||
7,724,275 | 10.10 | |||||||||||
Telecommunication services - 8.00% | ||||||||||||
AT&T Inc. | 56,084,621 | 1,727,967 | 2.26 | |||||||||
Verizon Communications Inc. | 43,974,000 | 1,496,875 | 1.96 | |||||||||
Vodafone Group PLC | 249,415,000 | 672,449 | .88 | |||||||||
Koninklijke KPN NV | 30,795,000 | 538,047 | .70 | |||||||||
Telekomunikacja Polska SA | 34,117,900 | 380,560 | .50 | |||||||||
Other securities | 1,299,734 | 1.70 | ||||||||||
6,115,632 | 8.00 | |||||||||||
Utilities - 7.19% | ||||||||||||
E.ON AG | 4,025,000 | 768,173 | 1.01 | |||||||||
GDF Suez | 10,841,565 | 681,652 | .89 | |||||||||
Entergy Corp. | 4,842,600 | 517,771 | .68 | |||||||||
FirstEnergy Corp. | 4,516,500 | 332,189 | .43 | |||||||||
Enel SpA | 35,518,000 | 329,105 | .43 | |||||||||
Exelon Corp. | 3,800,000 | 298,756 | .39 | |||||||||
Other securities | 2,568,243 | 3.36 | ||||||||||
5,495,889 | 7.19 | |||||||||||
Consumer staples - 6.53% | ||||||||||||
Kraft Foods Inc., Class A | 24,826,892 | 789,992 | 1.03 | |||||||||
H.J. Heinz Co. | 15,411,700 | 776,441 | 1.02 | |||||||||
Philip Morris International Inc. | 12,530,000 | 647,175 | .85 | |||||||||
Coca-Cola Co. | 7,840,000 | 403,760 | .53 | |||||||||
Hershey Co. (1) | 10,821,000 | 397,888 | .52 | |||||||||
Unilever NV, depository receipts | 6,380,000 | 176,404 | ||||||||||
Unilever NV (New York registered) | 5,051,750 | 139,984 | .41 | |||||||||
Diageo PLC | 17,950,000 | 313,207 | .41 | |||||||||
Other securities | 1,348,658 | 1.76 | ||||||||||
4,993,509 | 6.53 | |||||||||||
Industrials - 6.44% | ||||||||||||
General Electric Co. | 47,650,000 | 1,348,018 | 1.76 | |||||||||
Waste Management, Inc. | 19,150,500 | 680,609 | .89 | |||||||||
Emerson Electric Co. | 9,370,000 | 456,319 | .60 | |||||||||
Schneider Electric SA | 3,775,409 | 420,260 | .55 | |||||||||
Deutsche Post AG | 13,521,400 | 318,013 | .41 | |||||||||
Other securities | 1,706,004 | 2.23 | ||||||||||
4,929,223 | 6.44 | |||||||||||
Energy - 5.32% | ||||||||||||
Chevron Corp. | 17,030,000 | 1,440,057 | 1.88 | |||||||||
Diamond Offshore Drilling, Inc. | 5,015,000 | 598,289 | .78 | |||||||||
TOTAL SA (ADR) | 3,640,000 | 278,460 | ||||||||||
TOTAL SA | 3,390,000 | 261,013 | .70 | |||||||||
Spectra Energy Corp | 19,311,414 | 524,691 | .69 | |||||||||
Other securities | 970,670 | 1.27 | ||||||||||
4,073,180 | 5.32 | |||||||||||
Materials - 3.89% | ||||||||||||
E.I. du Pont de Nemours and Co. | 15,200,000 | 665,912 | .87 | |||||||||
Weyerhaeuser Co. (1) | 10,728,000 | 573,519 | .75 | |||||||||
Dow Chemical Co. | 13,125,000 | 437,194 | .57 | |||||||||
MeadWestvaco Corp. (1) | 11,500,696 | 308,334 | .40 | |||||||||
Other securities | 989,246 | 1.30 | ||||||||||
2,974,205 | 3.89 | |||||||||||
Consumer discretionary - 3.88% | ||||||||||||
McDonald's Corp. | 13,600,300 | 813,162 | 1.06 | |||||||||
Vivendi SA | 11,030,000 | 463,651 | .61 | |||||||||
Esprit Holdings Ltd. | 40,949,000 | 440,117 | .57 | |||||||||
Carnival Corp., units | 9,461,997 | 349,526 | .46 | |||||||||
Other securities | 899,993 | 1.18 | ||||||||||
2,966,449 | 3.88 | |||||||||||
Health care - 3.85% | ||||||||||||
Merck & Co., Inc. | 28,675,000 | 943,407 | 1.23 | |||||||||
Bristol-Myers Squibb Co. | 30,025,500 | 634,139 | .83 | |||||||||
Eli Lilly and Co. | 11,100,000 | 522,921 | .69 | |||||||||
Pfizer Inc | 20,500,000 | 382,735 | .50 | |||||||||
Other securities | 460,594 | .60 | ||||||||||
2,943,796 | 3.85 | |||||||||||
Information technology - 1.36% | ||||||||||||
Microchip Technology Inc. (1) | 14,128,000 | 451,107 | .59 | |||||||||
Maxim Integrated Products, Inc. | 15,190,000 | 298,332 | .39 | |||||||||
Other securities | 290,852 | .38 | ||||||||||
1,040,291 | 1.36 | |||||||||||
Miscellaneous - 3.87% | ||||||||||||
Other common stocks in initial period of acquisition | 2,963,258 | 3.87 | ||||||||||
Total common stocks (cost: $44,396,026,000) | 46,219,707 | 60.43 | ||||||||||
Preferred stocks - 1.21% | Shares | Market value (000) | Percent of net assets | |||||||||
Financials - 1.04% | ||||||||||||
Bank of America Corp., Series K, 8.00% noncumulative (2) | 102,750,000 | $ | 94,939 | .12 | ||||||||
Fannie Mae, Series O, 7.00% (2) (3) | 1,818,075 | 54,997 | .07 | |||||||||
Freddie Mac, Series W, 5.66% | 1,912,800 | 22,786 | .03 | |||||||||
Other securities | 623,686 | .82 | ||||||||||
796,408 | 1.04 | |||||||||||
Miscellaneous - 0.17% | ||||||||||||
Other preferred stocks in initial period of acquisition | 126,350 | .17 | ||||||||||
Total preferred stocks (cost: $1,310,343,000) | 922,758 | 1.21 | ||||||||||
Warrants - 0.00% | ||||||||||||
Telecommunication services - 0.00% | ||||||||||||
Other securities | 1 | .00 | ||||||||||
Total warrants (cost: $779,000) | 1 | .00 | ||||||||||
Convertible securities - 2.28% | ||||||||||||
Other - 2.08% | ||||||||||||
Citigroup Inc., Series J, 7.00% noncumulative convertible preferred depositary shares (4) (5) | 3,570,000 | $ | 173,730 | .23 | ||||||||
Fannie Mae, Series 2004-1, 5.375% convertible preferred | 1,979 | 83,118 | .11 | |||||||||
Other securities | 1,332,162 | 1.74 | ||||||||||
1,589,010 | 2.08 | |||||||||||
Miscellaneous - 0.20% | ||||||||||||
Other convertible securities in initial period of acquisition | 151,950 | .20 | ||||||||||
Total convertible securities (cost: $1,949,147,000) | 1,740,960 | 2.28 | ||||||||||
Bonds & notes - 27.04% | Principal amount (000) | |||||||||||
Financials - 4.88% | ||||||||||||
Countrywide Financial Corp. 0%-5.80% 2010-2037 (2) (3) | $ | 93,888 | $ | 89,292 | ||||||||
Countrywide Home Loans, Inc. 4.00%-5.625% 2009-2011 | 33,823 | 32,923 | ||||||||||
MBNA Global Capital Funding, Series B, 3.673% 2027 (2) | 35,000 | 28,032 | ||||||||||
Bank of America Corp. 4.90%-5.30% 2013-2017 | 5,815 | 5,540 | .20 | |||||||||
Citigroup Capital XXI 8.30% 2077 (2) | 63,050 | 57,718 | ||||||||||
Citigroup Inc. 5.125%-8.40% 2011-2017 (2) | 58,950 | 53,074 | .15 | |||||||||
Other securities | 3,462,894 | 4.53 | ||||||||||
3,729,473 | 4.88 | |||||||||||
Mortgage-backed obligations (6) - 4.39% | ||||||||||||
Fannie Mae 4.00%-11.878% 2010-2047 (2) (5) | 922,528 | 938,281 | 1.23 | |||||||||
Freddie Mac 4.50%-11.421% 2009-2038 (2) | 414,534 | 405,936 | .53 | |||||||||
Bank of America 5.50% 2012 (3) | 22,500 | 22,861 | .03 | |||||||||
Other securities | 1,990,527 | 2.60 | ||||||||||
3,357,605 | 4.39 | |||||||||||
Consumer discretionary - 3.80% | ||||||||||||
Other securities | 2,908,103 | 3.80 | ||||||||||
Bonds & notes of U.S. government & government agencies - 2.44% | ||||||||||||
U.S. Treasury 0%-8.875% 2009-2037 (5) (7) | 1,291,016 | 1,278,193 | 1.67 | |||||||||
Fannie Mae 4.625%-6.25% 2011-2029 | 297,265 | 303,394 | .40 | |||||||||
Freddie Mac 5.00%-5.25% 2011-2018 | 253,915 | 238,634 | .31 | |||||||||
Federal Home Loan Bank 5.125% 2013 | 18,000 | 18,866 | .02 | |||||||||
Other securities | 30,685 | .04 | ||||||||||
1,869,772 | 2.44 | |||||||||||
Telecommunication services - 2.04% | ||||||||||||
SBC Communications Inc. 5.10%-6.25% 2011-2016 | 54,000 | 53,404 | ||||||||||
AT&T Corp. 7.30%-8.00% 2011-2031 (2) | 19,789 | 21,431 | ||||||||||
AT&T Wireless Services, Inc. 8.125% 2012 | 16,935 | 18,598 | ||||||||||
AT&T Inc. 4.95%-6.40% 2013-2038 | 15,750 | 15,447 | .14 | |||||||||
Verizon Communications Inc. 5.50%-6.90% 2017-2038 | 95,300 | 90,447 | ||||||||||
Verizon Global Funding Corp. 4.90%-7.75% 2015-2030 | 10,265 | 10,356 | .13 | |||||||||
Other securities | 1,353,529 | 1.77 | ||||||||||
1,563,212 | 2.04 | |||||||||||
Information technology - 1.76% | ||||||||||||
Other securities | 1,342,643 | 1.76 | ||||||||||
Industrials - 1.64% | ||||||||||||
General Electric Capital Corp. 3.164%-4.80% 2013-2026 (2) | 38,000 | 34,144 | ||||||||||
General Electric Co. 5.25% 2017 | 11,250 | 10,919 | .06 | |||||||||
Other securities | 1,211,244 | 1.58 | ||||||||||
1,256,307 | 1.64 | |||||||||||
Health care - 1.28% | ||||||||||||
Other securities | 977,595 | 1.28 | ||||||||||
Utilities - 1.28% | ||||||||||||
E.ON International Finance BV 5.80% 2018 (3) | 23,000 | 22,635 | .03 | |||||||||
Other securities | 954,123 | 1.25 | ||||||||||
976,758 | 1.28 | |||||||||||
Energy - 1.14% | ||||||||||||
Other securities | 869,258 | 1.14 | ||||||||||
Asset-backed obligations - 1.02% | ||||||||||||
Other securities | 783,248 | 1.02 | ||||||||||
Other - 1.37% | ||||||||||||
Kraft Foods Inc. 6.875% 2038 | 5,875 | 5,688 | .01 | |||||||||
Other securities | 1,040,061 | 1.36 | ||||||||||
1,045,749 | 1.37 | |||||||||||
Total bonds & notes (cost: $22,812,593,000) | 20,679,723 | 27.04 | ||||||||||
Short-term securities - 9.10% | Principal amount (000) | Market value (000) | Percent of net assets | |||||||||
Federal Home Loan Bank 1.70%-2.55% due 8/13-12/10/2008 | $ | 1,053,362 | $ | 1,050,202 | 1.37 | |||||||
Freddie Mac 1.736%-2.55% due 8/18-9/29/2008 | 978,019 | 975,906 | 1.28 | |||||||||
U.S. Treasury Bills 1.44%-1.865% due 8/14-11/13/2008 | 848,645 | 846,757 | 1.11 | |||||||||
Procter & Gamble International Funding S.C.A. 2.06%-2.27% due 8/8-10/3/2008 (3) | 437,400 | 436,261 | .57 | |||||||||
Coca-Cola Co. 2.03%-2.37% due 8/7-10/9/2008 (3) | 357,300 | 356,280 | .47 | |||||||||
Fannie Mae 2.07%-2.35% due 8/1-10/28/2008 | 317,800 | 317,047 | .41 | |||||||||
General Electric Capital Corp. 2.62% due 8/12/2008 | 75,000 | 74,941 | ||||||||||
Edison Asset Securitization LLC 2.47% due 9/17/2008 (3) | 50,371 | 50,205 | .16 | |||||||||
Merck & Co. Inc. 2.14%-2.15% due 8/15-9/23/2008 | 100,000 | 99,745 | .13 | |||||||||
Bank of America Corp. 2.575%-2.68% due 9/8-10/7/2008 | 100,000 | 99,594 | .13 | |||||||||
AT&T Inc. 2.30% due 8/20/2008 (3) | 50,000 | 49,924 | .07 | |||||||||
Ciesco LLC 2.70% due 8/26/2008 (3) | 42,300 | 42,210 | .05 | |||||||||
Other securities | 2,565,323 | 3.35 | ||||||||||
Total short-term securities (cost: $6,964,841,000) | 6,964,395 | 9.10 | ||||||||||
Total investment securities (cost: $77,433,729,000) | 76,527,544 | 100.06 | ||||||||||
Other assets less liabilities | (41,408 | ) | (.06 | ) | ||||||||
Net assets | $ | 76,486,136 | 100.00 | % | ||||||||
"Miscellaneous" securities include holdings in their initial period of acquisition that have not previously been publicly disclosed. | ||||||||||||
"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio. |
Investments in affiliates | ||||||
A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares of that company. The fund's affiliated holdings listed below are either shown in the preceding summary investment portfolio or included in the market value of "Other securities" under their respective industry sectors. Further details on these holdings and related transactions during the year ended July 31, 2008, appear below. |
Beginning shares or principal amount | Additions | Reductions | Ending shares or principal amount | Dividend or interest income (000) | Market value of affiliates at 7/31/08 (000) | |||||||||||||||||||
Weyerhaeuser Co. | 10,728,000 | - | - | 10,728,000 | $ | 32,184 | $ | 573,519 | ||||||||||||||||
Weyerhaeuser Co. 7.375% 2032 | $ | - | $ | 3,500,000 | $ | - | $ | 3,500,000 | 75 | 3,347 | ||||||||||||||
Weyerhaeuser Co. 6.875% 2033 | $ | - | $ | 2,500,000 | $ | - | $ | 2,500,000 | 61 | 2,261 | ||||||||||||||
Weyerhaeuser Co. 5.95% 2008 | $ | 5,331,000 | $ | - | $ | 5,331,000 | $ | - | 33 | - | ||||||||||||||
Microchip Technology Inc. | 11,265,000 | 2,863,000 | - | 14,128,000 | 17,038 | 451,107 | ||||||||||||||||||
Hershey Co. | - | 10,821,000 | - | 10,821,000 | 3,750 | 397,888 | ||||||||||||||||||
MeadWestvaco Corp. | 10,865,696 | 635,000 | - | 11,500,696 | 13,080 | 308,334 | ||||||||||||||||||
iStar Financial, Inc. | 8,207,550 | 1,654,600 | 1,287,800 | 8,574,350 | 25,696 | 70,395 | ||||||||||||||||||
iStar Financial, Inc. 8.625% 2013 | $ | - | $ | 35,675,000 | $ | - | $ | 35,675,000 | 545 | 27,684 | ||||||||||||||
iStar Financial, Inc., Series B, 5.125% 2011 | $ | 10,000,000 | $ | 5,000,000 | $ | - | $ | 15,000,000 | 599 | 11,482 | ||||||||||||||
iStar Financial, Inc. 5.375% 2010 | $ | 10,925,000 | $ | 3,085,000 | $ | - | $ | 14,010,000 | 598 | 11,212 | ||||||||||||||
iStar Financial, Inc. 6.00% 2010 | $ | 3,750,000 | $ | 3,200,000 | $ | - | $ | 6,950,000 | 232 | 5,458 | ||||||||||||||
iStar Financial, Inc., Series F, 7.80% cumulative redeemable | 400,000 | - | - | 400,000 | 708 | 4,760 | ||||||||||||||||||
iStar Financial, Inc. 6.50% 2013 | $ | - | $ | 5,133,000 | $ | - | $ | 5,133,000 | 165 | 3,597 | ||||||||||||||
iStar Financial, Inc. 6.05% 2015 | $ | 4,285,000 | $ | - | $ | 133,000 | $ | 4,152,000 | 258 | 2,868 | ||||||||||||||
iStar Financial, Inc. 5.50% 2012 | $ | - | $ | 3,700,000 | $ | - | $ | 3,700,000 | 2 | 2,685 | ||||||||||||||
iStar Financial, Inc. 3.027% 2010 (3) | $ | - | $ | 3,248,000 | $ | - | $ | 3,248,000 | 6 | 2,551 | ||||||||||||||
iStar Financial, Inc. 5.65% 2011 | $ | - | $ | 3,418,000 | $ | - | $ | 3,418,000 | 1 | 2,548 | ||||||||||||||
iStar Financial, Inc., Series B, 5.70% 2014 | $ | - | $ | 2,918,000 | $ | - | $ | 2,918,000 | 1 | 2,072 | ||||||||||||||
iStar Financial, Inc., Series B, 5.95% 2013 | $ | - | $ | 808,000 | $ | - | $ | 808,000 | - | 572 | ||||||||||||||
iStar Financial, Inc. 7.00% 2008 | $ | 6,525,000 | $ | - | $ | 6,525,000 | $ | - | 214 | - | ||||||||||||||
iStar Financial, Inc., Series B, 4.875% 2009 | $ | 5,000,000 | $ | - | $ | 5,000,000 | $ | - | 185 | - | ||||||||||||||
iStar Financial, Inc. 5.80% 2011 | $ | 5,000,000 | $ | - | $ | 5,000,000 | $ | - | 261 | - | ||||||||||||||
iStar Financial, Inc. 5.875% 2016 | $ | - | $ | 2,900,000 | $ | 2,900,000 | $ | - | 9 | - | ||||||||||||||
Arthur J. Gallagher & Co. | 5,403,700 | - | - | 5,403,700 | 6,809 | 137,416 | ||||||||||||||||||
Macquarie Korea Infrastructure Fund | 21,023,070 | - | - | 21,023,070 | 8,680 | 128,798 | ||||||||||||||||||
Goodman Fielder Ltd. | 67,000,000 | - | - | 67,000,000 | 7,752 | 82,504 | ||||||||||||||||||
Polaris Industries Inc. (8) | 1,500,000 | 207,000 | 1,707,000 | 2,526 | 73,059 | |||||||||||||||||||
Clarent Hospital Corp. (5) (9) | 484,684 | - | - | 484,684 | - | 24 | ||||||||||||||||||
Bell Aliant Regional Communications Income Fund (8) (10) | 4,488,700 | 1,916,300 | 894,900 | 5,510,100 | 14,043 | - | ||||||||||||||||||
Beverly Hills Bancorp Inc. (10) | 950,000 | - | 950,000 | - | 81 | - | ||||||||||||||||||
Brookdale Senior Living Inc. (10) | 5,906,600 | 691,000 | 6,597,600 | - | 6,985 | - | ||||||||||||||||||
H.J. Heinz Co. (10) | 18,104,640 | 2,492,060 | 5,185,000 | 15,411,700 | 31,617 | - | ||||||||||||||||||
Packaging Corp. of America (10) | 6,792,800 | - | 6,792,800 | - | 1,698 | - | ||||||||||||||||||
Packaging Corp. of America 4.375% 2008 (10) | $ | 2,500,000 | $ | - | $ | - | $ | 2,500,000 | 112 | - | ||||||||||||||
SunCom Wireless Holdings, Inc., Class A (10) | 4,732,277 | - | 4,732,277 | - | - | - | ||||||||||||||||||
Sunstone Hotel Investors, Inc. (10) | 4,038,400 | - | 4,038,400 | - | 1,453 | - | ||||||||||||||||||
Triton PCS, Inc. 8.50% 2013 (10) | $ | 94,050,000 | $ | - | $ | 94,050,000 | $ | - | 6,897 | - | ||||||||||||||
Tupperware Brands Corp (10) | 3,865,000 | - | 3,865,000 | - | 653 | - | ||||||||||||||||||
$ | 185,007 | $ | 2,306,141 |
The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item. | |||
(1) Represents an affiliated company as defined under the Investment Company Act of 1940. | |||
(2) Coupon rate may change periodically. | |||
(3) Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the United States in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities, including those in "Other securities," was $6,809,625,000, which represented 8.90% of the net assets of the fund. | |||
(4) Purchased in a transaction exempt from registration under the Securities Act of 1933. This security (acquired 1/15/2008 at a cost of $178,500,000) may be subject to legal or contractual restrictions on resale. | |||
(5) Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities, including those in "Other securities," was $691,650,000, which represented .90% of the net assets of the fund. | |||
(6) Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. | |||
(7) Index-linked bond whose principal amount moves with a government retail price index. | |||
(8) The holding was an unaffiliated issuer in its initial period of acquisition at 7/31/2007 and was not publicly disclosed. | |||
(9) Security did not produce income during the last 12 months. | |||
(10) Unaffiliated issuer at 7/31/2008. | |||
The industry classifications shown in the summary investment portfolio were obtained from sources believed to be reliable and are not covered by the Report of Independent Registered Public Accounting Firm. | |||
Key to abbreviation | |||
ADR = American Depositary Receipts | |||
See Notes to Financial Statements |
Financial statements
Statement of assets and liabilities | ||||||||
at July 31, 2008 | (dollars in thousands) | |||||||
Assets: | ||||||||
Investment securities at market: | ||||||||
Unaffiliated issuers (cost: $74,746,858) | $ | 74,221,403 | ||||||
Affiliated issuers (cost: $2,686,871) | 2,306,141 | $ | 76,527,544 | |||||
Cash | 2,115 | |||||||
Receivables for: | ||||||||
Sales of investments | 42,959 | |||||||
Sales of fund's shares | 78,931 | |||||||
Dividends and interest | 526,493 | |||||||
Other | 323 | 648,706 | ||||||
77,178,365 | ||||||||
Liabilities: | ||||||||
Payables for: | ||||||||
Purchases of investments | 149,576 | |||||||
Repurchases of fund's shares | 97,035 | |||||||
Dividends on fund's shares | 384,789 | |||||||
Investment advisory services | 15,830 | |||||||
Services provided by affiliates | 41,934 | |||||||
Directors' deferred compensation | 2,685 | |||||||
Other | 380 | 692,229 | ||||||
Net assets at July 31, 2008 | $ | 76,486,136 | ||||||
Net assets consist of: | ||||||||
Capital paid in on shares of capital stock | $ | 77,169,188 | ||||||
Undistributed net investment income | 245,333 | |||||||
Distributions in excess of net realized gain | (22,968 | ) | ||||||
Net unrealized depreciation | (905,417 | ) | ||||||
Net assets at July 31, 2008 | $ | 76,486,136 |
(dollars and shares in thousands, except per-share amounts) | ||||||||||||
Total authorized capital stock - 5,500,000 shares, $.001 par value (4,510,745 total shares outstanding) | ||||||||||||
Net assets | Shares outstanding | Net asset value per share* | ||||||||||
Class A | $ | 58,029,230 | 3,417,701 | $ | 16.98 | |||||||
Class B | 4,149,039 | 245,930 | 16.87 | |||||||||
Class C | 7,676,274 | 455,761 | 16.84 | |||||||||
Class F-1 | 2,711,541 | 159,936 | 16.95 | |||||||||
Class 529-A | 661,740 | 39,018 | 16.96 | |||||||||
Class 529-B | 109,785 | 6,490 | 16.92 | |||||||||
Class 529-C | 276,377 | 16,328 | 16.93 | |||||||||
Class 529-E | 32,131 | 1,898 | 16.93 | |||||||||
Class 529-F-1 | 20,859 | 1,230 | 16.96 | |||||||||
Class R-1 | 85,603 | 5,058 | 16.92 | |||||||||
Class R-2 | 516,496 | 30,626 | 16.86 | |||||||||
Class R-3 | 1,060,771 | 62,622 | 16.94 | |||||||||
Class R-4 | 596,821 | 35,188 | 16.96 | |||||||||
Class R-5 | 559,469 | 32,959 | 16.97 | |||||||||
(*) Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Class A and 529-A, for which the maximum offering prices per share were $18.02 and $17.99, respectively. | ||||||||||||
See Notes to Financial Statements |
Statement of operations | ||||||||
for the year ended July 31, 2008 | (dollars in thousands) | |||||||
Investment income: | ||||||||
Income: | ||||||||
Dividends (net of non-U.S. taxes of $76,511; also includes $174,753 from affiliates) | $ | 2,314,220 | ||||||
Interest (includes $10,254 from affiliates) | 1,969,722 | $ | 4,283,942 | |||||
Fees and expenses*: | ||||||||
Investment advisory services | 210,885 | |||||||
Distribution services | 311,145 | |||||||
Transfer agent services | 46,057 | |||||||
Administrative services | 20,757 | |||||||
Reports to shareholders | 1,954 | |||||||
Registration statement and prospectus | 1,435 | |||||||
Postage, stationery and supplies | 4,791 | |||||||
Directors' compensation | 35 | |||||||
Auditing and legal | 233 | |||||||
Custodian | 3,414 | |||||||
Other | 150 | |||||||
Total fees and expenses before reimbursements/waivers | 600,856 | |||||||
Less reimbursements/waivers of fees and expenses: | ||||||||
Investment advisory services | 21,094 | |||||||
Administrative services | 1 | |||||||
Total fees and expenses after reimbursements/waivers | 579,761 | |||||||
Net investment income | 3,704,181 | |||||||
Net realized gain and unrealized depreciation on investments and currency: | ||||||||
Net realized gain (loss) on: | ||||||||
Investments (including $75,370 net gain from affiliates) | 1,086,076 | |||||||
Currency transactions | (5,441 | ) | 1,080,635 | |||||
Net unrealized (depreciation) appreciation on: | ||||||||
Investments | (13,174,488 | ) | ||||||
Currency translations | 533 | (13,173,955 | ) | |||||
Net realized gain and unrealized depreciation on investments and currency | (12,093,320 | ) | ||||||
Net decrease in net assets resulting from operations | $ | (8,389,139 | ) | |||||
(*) Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements. | ||||||||
See Notes to Financial Statements | ||||||||
Statements of changes in net assets | (dollars in thousands) | |||||||
Year ended July 31 | ||||||||
2008 | 2007 | |||||||
Operations: | ||||||||
Net investment income | $ | 3,704,181 | $ | 3,250,382 | ||||
Net realized gain on investments and currency transactions | 1,080,635 | 2,819,041 | ||||||
Net unrealized (depreciation) appreciation on investments and currency translations | (13,173,955 | ) | 3,452,873 | |||||
Net (decrease) increase in net assets resulting from operations | (8,389,139 | ) | 9,522,296 | |||||
Dividends and distributions paid or accrued to shareholders: | ||||||||
Dividends from net investment income and currency gain | (3,903,711 | ) | (3,454,007 | ) | ||||
Distributions from net realized gain on investments | (3,639,343 | ) | (1,728,252 | ) | ||||
Total dividends and distributions paid or accrued to shareholders | (7,543,054 | ) | (5,182,259 | ) | ||||
Net capital share transactions | 6,122,868 | 13,497,369 | ||||||
Total (decrease) increase in net assets | (9,809,325 | ) | 17,837,406 | |||||
Net assets: | ||||||||
Beginning of year | 86,295,461 | 68,458,055 | ||||||
End of year (including undistributed net investment income: $245,333 and $461,625, respectively) | $ | 76,486,136 | $ | 86,295,461 | ||||
See Notes to Financial Statements |
Notes to financial statements
1. Organization and significant accounting policies
Organization – The Income Fund of America, Inc. (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks current income while secondarily striving for capital growth through investments in stocks and fixed-income securities.
The fund offers 14 share classes consisting of four retail share classes, five 529 college savings plan share classes and five retirement plan share classes. The 529 college savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F-1) can be used to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are sold without any sales charges and do not carry any conversion rights. The fund’s share classes are described below:
Share class | Initial sales charge | Contingent deferred sales charge upon redemption | Conversion feature |
Class A and 529-A | Up to 5.75% | None (except 1% for certain redemptions within one year of purchase without an initial sales charge) | None |
Class B and 529-B | None | Declines from 5% to 0% for redemptions within six years of purchase | Class B and 529-B convert to Class A and 529-A, respectively, after eight years |
Class C | None | 1% for redemptions within one year of purchase | Class C converts to Class F-1 after 10 years |
Class 529-C | None | 1% for redemptions within one year of purchase | None |
Class 529-E | None | None | None |
Class F-1 and 529-F-1 | None | None | None |
Class R-1, R-2, R-3, R-4 and R-5 | None | None | None |
On August 1, 2008, the fund made an additional retail share class (Class F-2) available for sale pursuant to an amendment to its registration statement filed with the Securities and Exchange Commission (“SEC”) and effective as of July 30, 2008. In addition, Class F shares were renamed Class F-1 and Class 529-F shares were renamed Class 529-F-1. Refer to the fund's prospectus for more details.
Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses ("class-specific fees and expenses"), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.
Significant accounting policies – The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the fund:
Security valuation – Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. The ability of the issuers of debt securities held by the fund to meet their obligations may be affected by economic developments in a specific industry, state or region.
Securities and other assets for which representative market quotations are not readily available or are considered unreliable by the investment adviser are fair valued as determined in good faith under procedures adopted by authority of the fund's board of directors. Market quotations may be considered unreliable if events occur that materially affect the value of securities (particularly securities outside the U.S.) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions.
Security transactions and related investment income – Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations – Income, fees and expenses (other than class-specific fees and expenses) are allocated daily among the various share classes based on the relative value of their settled shares. Realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, administrative and shareholder services, are charged directly to the respective share class.
Dividends and distributions to shareholders – Dividends paid to shareholders are declared daily from net investment income and are paid to shareholders quarterly. Distributions paid to shareholders are recorded on the ex-dividend date.
Currency translation – Assets and liabilities, including investment securities, denominated in currencies other than U.S. dollars are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. On the accompanying financial statements, the effects of changes in exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in currencies other than U.S. dollars are disclosed separately.
Mortgage dollar rolls – The fund may enter into mortgage dollar roll transactions in which the fund sells a mortgage-backed security to a counterparty and simultaneously enters into an agreement with the same counterparty to buy back a similar security on a specific future date at a predetermined price. Each mortgage dollar roll is treated as a financing transaction; therefore, any gain or loss is considered unrealized until the roll reaches completion. Risks may arise due to the delayed payment date and the potential inability of counterparties to complete the transaction. Income is generated as consideration for entering into these transactions and is included in interest income on the accompanying financial statements.
Loan transactions – The fund may enter into loan transactions in which the fund acquires a loan either through an agent, by assignment from another holder, or as a participation interest in another holder's portion of a loan. The loan is often administered by a financial institution that acts as agent for the holders of the loan, and the fund may be required to receive approval from the agent and/or borrower prior to the sale of the investment. The loan's interest rate and maturity date may change based on the terms of the loan, including potential early payments of principal. Risks may arise due to the delayed settlement date of the loan transaction and the ability of the agent and/or borrower to meet the obligations of the loan.
2. Investments outside the U.S.
Investment risk – The risks of investing in securities of issuers outside the U.S. may include, but are not limited to, investment and repatriation restrictions; revaluation of currencies; adverse political, social and economic developments; government involvement in the private sector; limited and less reliable investor information; lack of liquidity; certain local tax law considerations; and limited regulation of the securities markets.
Taxation –Dividend and interest income is recorded net of non-U.S. taxes paid.
3. Federal income taxation and distributions
The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made. Therefore, no federal income tax provision is required.
As of and during the period ended July 31, 2008, the fund did not have a liability for any unrecognized tax benefits. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the statement of operations. During the period, the fund did not incur any interest or penalties.
The fund is not subject to examination by U.S. federal tax authorities for tax years before 2004 and by state tax authorities for tax years before 2003.
Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; paydowns on fixed-income securities; and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
During the year ended July 31, 2008, the fund reclassified $16,466,000 from undistributed net investment income to distributions in excess of net realized gain, and $296,000 from undistributed net investment income and $177,400,000 from distributions in excess of net realized gains to capital paid in on shares of capital stock to align financial reporting with tax reporting.
As of July 31, 2008, the tax basis components of distributable earnings, unrealized appreciation (depreciation) and cost of investment securities were as follows:
(dollars in thousands) | ||||
Undistributed ordinary income | $ | 633,122 | ||
Post-October currency loss deferrals (realized during the period November 1, 2007, through July 31, 2008)* | (6,101 | ) | ||
Gross unrealized appreciation on investment securities | 6,845,118 | |||
Gross unrealized depreciation on investment securities | (7,772,620 | ) | ||
Net unrealized depreciation on investment securities | (927,502 | ) | ||
Cost of investment securities | 77,455,046 | |||
*These deferrals are considered incurred in the subsequent year. |
The tax character of distributions paid or accrued to shareholders was as follows (dollars in thousands):
Year ended July 31, 2008 | Year ended July 31, 2007 | |||||||||||||||||||||||
Ordinary income | Long-term capital gains | Total distributions paid or accrued | Ordinary income | Long-term capital gains | Total distributions paid or accrued | |||||||||||||||||||
Share class | ||||||||||||||||||||||||
Class A | $ | 3,047,396 | $ | 2,754,859 | $ | 5,802,255 | $ | 2,741,287 | $ | 1,330,299 | $ | 4,071,586 | ||||||||||||
Class B | 192,964 | 209,621 | 402,585 | 184,596 | 108,711 | 293,307 | ||||||||||||||||||
Class C | 345,974 | 379,554 | 725,528 | 296,266 | 174,425 | 470,691 | ||||||||||||||||||
Class F-1 | 143,928 | 131,893 | 275,821 | 115,303 | 55,201 | 170,504 | ||||||||||||||||||
Class 529-A | 32,028 | 28,944 | 60,972 | 24,723 | 11,936 | 36,659 | ||||||||||||||||||
Class 529-B | 4,561 | 5,017 | 9,578 | 3,874 | 2,332 | 6,206 | ||||||||||||||||||
Class 529-C | 11,330 | 12,364 | 23,694 | 8,909 | 5,270 | 14,179 | ||||||||||||||||||
Class 529-E | 1,467 | 1,412 | 2,879 | 1,167 | 605 | 1,772 | ||||||||||||||||||
Class 529-F-1 | 1,060 | 924 | 1,984 | 678 | 297 | 975 | ||||||||||||||||||
Class R-1 | 3,369 | 3,565 | 6,934 | 2,010 | 1,091 | 3,101 | ||||||||||||||||||
Class R-2 | 21,554 | 23,660 | 45,214 | 17,170 | 10,098 | 27,268 | ||||||||||||||||||
Class R-3 | 47,747 | 46,144 | 93,891 | 32,101 | 16,294 | 48,395 | ||||||||||||||||||
Class R-4 | 26,228 | 22,570 | 48,798 | 15,313 | 7,141 | 22,454 | ||||||||||||||||||
Class R-5 | 24,105 | 18,816 | 42,921 | 10,610 | 4,552 | 15,162 | ||||||||||||||||||
Total | $ | 3,903,711 | $ | 3,639,343 | $ | 7,543,054 | $ | 3,454,007 | $ | 1,728,252 | $ | 5,182,259 |
4. Fees and transactions with related parties
Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Service Company® ("AFS"), the fund’s transfer agent, and American Funds Distributors,® Inc. ("AFD"), the principal underwriter of the fund’s shares.
Investment advisory services - The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.250% on the first $500 million of daily net assets and decreasing to 0.125% on such assets in excess of $71 billion. The agreement also provides for monthly fees, accrued daily, of 2.25% of the fund’s monthly gross income. Prior to January 1, 2008, CRMC reduced total investment advisory services fees by decreasing the annual rate on net assets in excess of $89 billion from a rate of 0.125% to 0.123%. The board of directors approved an amended agreement effective January 1, 2008, which reflected this reduction in the annual rate on net assets in excess of $89 billion. In addition, CRMC is currently waiving 10% of investment advisory services fees. During the year ended July 31, 2008, total investment advisory services fees waived by CRMC were $21,094,000. As a result, the fee shown on the accompanying financial statements of $210,885,000, which was equivalent to an annualized rate of 0.250%, was reduced to $189,791,000, or 0.225% of average daily net assets.
Class-specific fees and expenses – Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below:
Distribution services – The fund has adopted plans of distribution for all share classes, except Class R-5. Under the plans, the board of directors approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted below. In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.
For Class A and 529-A, the board of directors has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of July 31, 2008, there were no unreimbursed expenses subject to reimbursement for Class A or 529-A.
Share class | Currently approved limits | Plan limits |
Class A | 0.25% | 0.25% |
Class 529-A | 0.25 | 0.50 |
Class B and 529-B | 1.00 | 1.00 |
Class C, 529-C and R-1 | 1.00 | 1.00 |
Class R-2 | 0.75 | 1.00 |
Class 529-E and R-3 | 0.50 | 0.75 |
Class F-1, 529-F-1 and R-4 | 0.25 | 0.50 |
Transfer agent services – The fund has a transfer agent agreement with AFS for Class A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC described below.
Administrative services – The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Class A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services. CRMC has agreed to pay AFS on the fund's behalf for a portion of the transfer agent services fees for some of the retirement plan share classes. For the year ended July 31, 2008, the total administrative services fees paid by CRMC were $1,000 for Class R-2. Administrative services fees are presented gross of any payments made by CRMC. Each 529 share class is subject to an additional annual administrative services fee of 0.10% of its respective average daily net assets; this fee is payable to the Commonwealth of Virginia for the maintenance of the 529 college savings plan. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party.
Expenses under the agreements described above for the year ended July 31, 2008, were as follows (dollars in thousands):
Share class | Distribution services | Transfer agent services | Administrative services | ||
CRMC administrative services | Transfer agent services | Commonwealth of Virginia administrative services | |||
Class A | $151,516 | $42,813 | Not applicable | Not applicable | Not applicable |
Class B | 47,894 | 3,244 | Not applicable | Not applicable | Not applicable |
Class C | 86,640 | Included in administrative services | $8,841 | $1,008 | Not applicable |
Class F-1 | 7,614 | 2,689 | 310 | Not applicable | |
Class 529-A | 1,440 | 480 | 61 | $684 | |
Class 529-B | 1,173 | 83 | 25 | 117 | |
Class 529-C | 2,910 | 205 | 49 | 291 | |
Class 529-E | 167 | 23 | 3 | 22 | |
Class 529-F-1 | - | 15 | 2 | 34 | |
Class R-1 | 852 | 81 | 32 | Not applicable | |
Class R-2 | 4,123 | 802 | 1,570 | Not applicable | |
Class R-3 | 5,420 | 1,552 | 503 | Not applicable | |
Class R-4 | 1,396 | 799 | 28 | Not applicable | |
Class R-5 | Not applicable | 436 | 12 | Not applicable | |
Total | $311,145 | $46,057 | $16,006 | $3,603 | $1,148 |
Directors’ deferred compensation – Since the adoption of the deferred compensation plan in 1993, directors who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Directors’ compensation of $35,000, shown on the accompanying financial statements, includes $314,000 in current fees (either paid in cash or deferred) and a net decrease of $279,000 in the value of the deferred amounts.
Affiliated officers and directors – Officers and certain directors of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or directors received any compensation directly from the fund.
5. Capital share transactions
Capital share transactions in the fund were as follows (dollars and shares in thousands):
Share class | Sales(*) | Reinvestments of dividends and distributions | Repurchases(*) | Net increase (decrease) | ||||||||||||||||||||||||||||
Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | |||||||||||||||||||||||||
Year ended July 31, 2008 | ||||||||||||||||||||||||||||||||
Class A | $ | 8,146,230 | 423,511 | $ | 5,292,485 | 276,012 | $ | (9,068,488 | ) | (480,352 | ) | $ | 4,370,227 | 219,171 | ||||||||||||||||||
Class B | 335,424 | 17,532 | 359,218 | 18,809 | (743,435 | ) | (39,833 | ) | (48,793 | ) | (3,492 | ) | ||||||||||||||||||||
Class C | 1,289,999 | 67,111 | 638,186 | 33,450 | (1,521,685 | ) | (81,759 | ) | 406,500 | 18,802 | ||||||||||||||||||||||
Class F-1 | 879,704 | 45,563 | 226,732 | 11,841 | (893,923 | ) | (47,364 | ) | 212,513 | 10,040 | ||||||||||||||||||||||
Class 529-A | 150,265 | 7,824 | 60,016 | 3,138 | (72,570 | ) | (3,856 | ) | 137,711 | 7,106 | ||||||||||||||||||||||
Class 529-B | 15,162 | 792 | 9,456 | 495 | (9,895 | ) | (525 | ) | 14,723 | 762 | ||||||||||||||||||||||
Class 529-C | 67,666 | 3,539 | 23,327 | 1,220 | (43,922 | ) | (2,335 | ) | 47,071 | 2,424 | ||||||||||||||||||||||
Class 529-E | 7,434 | 387 | 2,834 | 149 | (4,142 | ) | (218 | ) | 6,126 | 318 | ||||||||||||||||||||||
Class 529-F-1 | 7,451 | 385 | 1,936 | 101 | (4,146 | ) | (222 | ) | 5,241 | 264 | ||||||||||||||||||||||
Class R-1 | 43,273 | 2,254 | 6,695 | 351 | (23,119 | ) | (1,220 | ) | 26,849 | 1,385 | ||||||||||||||||||||||
Class R-2 | 202,674 | 10,639 | 44,310 | 2,325 | (164,675 | ) | (8,734 | ) | 82,309 | 4,230 | ||||||||||||||||||||||
Class R-3 | 511,403 | 26,501 | 91,683 | 4,801 | (307,548 | ) | (16,371 | ) | 295,538 | 14,931 | ||||||||||||||||||||||
Class R-4 | 391,084 | 20,374 | 47,284 | 2,481 | (180,160 | ) | (9,619 | ) | 258,208 | 13,236 | ||||||||||||||||||||||
Class R-5 | 378,573 | 19,654 | 38,894 | 2,045 | (108,822 | ) | (5,759 | ) | 308,645 | 15,940 | ||||||||||||||||||||||
Total net increase | ||||||||||||||||||||||||||||||||
(decrease) | $ | 12,426,342 | 646,066 | $ | 6,843,056 | 357,218 | $ | (13,146,530 | ) | (698,167 | ) | $ | 6,122,868 | 305,117 | ||||||||||||||||||
Year ended July 31, 2007 | ||||||||||||||||||||||||||||||||
Class A | $ | 11,380,559 | 552,805 | $ | 3,645,817 | 179,124 | $ | (5,882,210 | ) | (285,623 | ) | $ | 9,144,166 | 446,306 | ||||||||||||||||||
Class B | 592,214 | 28,970 | 258,866 | 12,801 | (479,658 | ) | (23,462 | ) | 371,422 | 18,309 | ||||||||||||||||||||||
Class C | 2,229,591 | 109,165 | 410,555 | 20,323 | (824,465 | ) | (40,327 | ) | 1,815,681 | 89,161 | ||||||||||||||||||||||
Class F-1 | 1,294,485 | 63,019 | 133,621 | 6,566 | (435,975 | ) | (21,103 | ) | 992,131 | 48,482 | ||||||||||||||||||||||
Class 529-A | 178,893 | 8,686 | 35,737 | 1,756 | (39,519 | ) | (1,922 | ) | 175,111 | 8,520 | ||||||||||||||||||||||
Class 529-B | 19,217 | 936 | 6,115 | 301 | (5,615 | ) | (273 | ) | 19,717 | 964 | ||||||||||||||||||||||
Class 529-C | 85,314 | 4,147 | 13,876 | 684 | (27,708 | ) | (1,349 | ) | 71,482 | 3,482 | ||||||||||||||||||||||
Class 529-E | 8,454 | 411 | 1,734 | 85 | (2,660 | ) | (130 | ) | 7,528 | 366 | ||||||||||||||||||||||
Class 529-F-1 | 9,629 | 468 | 930 | 46 | (1,175 | ) | (57 | ) | 9,384 | 457 | ||||||||||||||||||||||
Class R-1 | 46,174 | 2,246 | 2,924 | 144 | (12,774 | ) | (619 | ) | 36,324 | 1,771 | ||||||||||||||||||||||
Class R-2 | 226,310 | 11,043 | 26,541 | 1,312 | (116,865 | ) | (5,682 | ) | 135,986 | 6,673 | ||||||||||||||||||||||
Class R-3 | 516,588 | 25,057 | 46,778 | 2,300 | (200,112 | ) | (9,691 | ) | 363,254 | 17,666 | ||||||||||||||||||||||
Class R-4 | 235,448 | 11,404 | 21,573 | 1,058 | (76,506 | ) | (3,699 | ) | 180,515 | 8,763 | ||||||||||||||||||||||
Class R-5 | 206,608 | 9,878 | 12,745 | 625 | (44,685 | ) | (2,169 | ) | 174,668 | 8,334 | ||||||||||||||||||||||
Total net increase | ||||||||||||||||||||||||||||||||
(decrease) | $ | 17,029,484 | 828,235 | $ | 4,617,812 | 227,125 | $ | (8,149,927 | ) | (396,106 | ) | $ | 13,497,369 | 659,254 | ||||||||||||||||||
(*) Includes exchanges between share classes of the fund. |
6. Investment transactions
The fund made purchases and sales of investment securities, excluding short-term securities and U.S. government obligations, if any, of $30,027,284,000 and $27,212,964,000, respectively, during the year ended July 31, 2008.
Financial highlights
(Loss) income from investment operations(1) | Dividends and distributions | |||||||||||||||
Net asset value, beginning of year | Net investment income | Net (losses) gains on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of year | Total return (2) (3) | Net assets, end of year (in millions) | Ratio of expenses to average net assets before reimbursements/ waivers | Ratio of expenses to average net assets after reimbursements/ waivers (3) | Ratio of net income to average net assets (3) | ||||
Class A: | ||||||||||||||||
Year ended 7/31/2008 | $20.54 | $.87 | $ | (2.67) | $(1.80) | $(.91) | $(.85) | $(1.76) | $16.98 | (9.46)% | $58,029 | .57% | .54% | 4.53% | ||
Year ended 7/31/2007 | 19.33 | .87 | 1.73 | 2.60 | (.93) | (.46) | (1.39) | 20.54 | 13.66 | 65,713 | .56 | .54 | 4.22 | |||
Year ended 7/31/2006 | 18.70 | .81 | .94 | 1.75 | (.76) | (.36) | (1.12) | 19.33 | 9.77 | 53,188 | .56 | .53 | 4.35 | |||
Year ended 7/31/2005 | 17.10 | .77 | 1.61 | 2.38 | (.65) | (.13) | (.78) | 18.70 | 14.12 | 47,196 | .55 | .54 | 4.26 | |||
Year ended 7/31/2004 | 15.44 | .70 | 1.70 | 2.40 | (.74) | - | (.74) | 17.10 | 15.76 | 36,075 | .57 | .57 | 4.15 | |||
Class B: | ||||||||||||||||
Year ended 7/31/2008 | 20.43 | .72 | (2.66) | (1.94) | (.77) | (.85) | (1.62) | 16.87 | (10.16) | 4,149 | 1.33 | 1.31 | 3.76 | |||
Year ended 7/31/2007 | 19.22 | .70 | 1.74 | 2.44 | (.77) | (.46) | (1.23) | 20.43 | 12.83 | 5,094 | 1.32 | 1.30 | 3.46 | |||
Year ended 7/31/2006 | 18.61 | .66 | .93 | 1.59 | (.62) | (.36) | (.98) | 19.22 | 8.87 | 4,442 | 1.33 | 1.31 | 3.58 | |||
Year ended 7/31/2005 | 17.01 | .63 | 1.61 | 2.24 | (.51) | (.13) | (.64) | 18.61 | 13.32 | 4,135 | 1.34 | 1.32 | 3.48 | |||
Year ended 7/31/2004 | 15.36 | .56 | 1.69 | 2.25 | (.60) | - | (.60) | 17.01 | 14.84 | 3,231 | 1.35 | 1.35 | 3.37 | |||
Class C: | ||||||||||||||||
Year ended 7/31/2008 | 20.39 | .71 | (2.65) | (1.94) | (.76) | (.85) | (1.61) | 16.84 | (10.22) | 7,676 | 1.38 | 1.35 | 3.72 | |||
Year ended 7/31/2007 | 19.19 | .69 | 1.73 | 2.42 | (.76) | (.46) | (1.22) | 20.39 | 12.80 | 8,911 | 1.37 | 1.35 | 3.41 | |||
Year ended 7/31/2006 | 18.58 | .65 | .93 | 1.58 | (.61) | (.36) | (.97) | 19.19 | 8.83 | 6,675 | 1.38 | 1.36 | 3.52 | |||
Year ended 7/31/2005 | 16.99 | .61 | 1.60 | 2.21 | (.49) | (.13) | (.62) | 18.58 | 13.17 | 5,756 | 1.43 | 1.41 | 3.38 | |||
Year ended 7/31/2004 | 15.34 | .55 | 1.69 | 2.24 | (.59) | - | (.59) | 16.99 | 14.75 | 3,833 | 1.44 | 1.44 | 3.26 | |||
Class F-1: | ||||||||||||||||
Year ended 7/31/2008 | 20.52 | .86 | (2.68) | (1.82) | (.90) | (.85) | (1.75) | 16.95 | (9.56) | 2,712 | .61 | .58 | 4.48 | |||
Year ended 7/31/2007 | 19.30 | .86 | 1.74 | 2.60 | (.92) | (.46) | (1.38) | 20.52 | 13.69 | 3,075 | .60 | .57 | 4.18 | |||
Year ended 7/31/2006 | 18.68 | .80 | .93 | 1.73 | (.75) | (.36) | (1.11) | 19.30 | 9.68 | 1,957 | .60 | .57 | 4.30 | |||
Year ended 7/31/2005 | 17.08 | .75 | 1.61 | 2.36 | (.63) | (.13) | (.76) | 18.68 | 14.01 | 1,603 | .67 | .65 | 4.14 | |||
Year ended 7/31/2004 | 15.42 | .67 | 1.71 | 2.38 | (.72) | - | (.72) | 17.08 | 15.65 | 1,000 | .69 | .69 | 4.02 | |||
Class 529-A: | ||||||||||||||||
Year ended 7/31/2008 | 20.52 | .85 | (2.66) | (1.81) | (.90) | (.85) | (1.75) | 16.96 | (9.55) | 662 | .65 | .63 | 4.46 | |||
Year ended 7/31/2007 | 19.31 | .85 | 1.73 | 2.58 | (.91) | (.46) | (1.37) | 20.52 | 13.57 | 655 | .65 | .63 | 4.14 | |||
Year ended 7/31/2006 | 18.68 | .80 | .94 | 1.74 | (.75) | (.36) | (1.11) | 19.31 | 9.70 | 452 | .63 | .61 | 4.27 | |||
Year ended 7/31/2005 | 17.08 | .75 | 1.61 | 2.36 | (.63) | (.13) | (.76) | 18.68 | 13.98 | 328 | .70 | .68 | 4.13 | |||
Year ended 7/31/2004 | 15.42 | .68 | 1.70 | 2.38 | (.72) | - | (.72) | 17.08 | 15.61 | 195 | .67 | .67 | 4.06 | |||
Class 529-B: | ||||||||||||||||
Year ended 7/31/2008 | 20.47 | .69 | (2.65) | (1.96) | (.74) | (.85) | (1.59) | 16.92 | (10.25) | 110 | 1.46 | 1.43 | 3.65 | |||
Year ended 7/31/2007 | 19.26 | .68 | 1.73 | 2.41 | (.74) | (.46) | (1.20) | 20.47 | 12.71 | 117 | 1.45 | 1.43 | 3.34 | |||
Year ended 7/31/2006 | 18.65 | .64 | .92 | 1.56 | (.59) | (.36) | (.95) | 19.26 | 8.71 | 92 | 1.47 | 1.44 | 3.44 | |||
Year ended 7/31/2005 | 17.05 | .59 | 1.61 | 2.20 | (.47) | (.13) | (.60) | 18.65 | 13.05 | 74 | 1.55 | 1.53 | 3.28 | |||
Year ended 7/31/2004 | 15.36 | .53 | 1.70 | 2.23 | (.54) | - | (.54) | 17.05 | 14.67 | 51 | 1.57 | 1.57 | 3.16 | |||
Class 529-C: | ||||||||||||||||
Year ended 7/31/2008 | 20.49 | .70 | (2.67) | (1.97) | (.74) | (.85) | (1.59) | 16.93 | (10.29) | 276 | 1.45 | 1.43 | 3.66 | |||
Year ended 7/31/2007 | 19.27 | .69 | 1.74 | 2.43 | (.75) | (.46) | (1.21) | 20.49 | 12.77 | 285 | 1.45 | 1.42 | 3.35 | |||
Year ended 7/31/2006 | 18.65 | .64 | .93 | 1.57 | (.59) | (.36) | (.95) | 19.27 | 8.77 | 201 | 1.46 | 1.43 | 3.45 | |||
Year ended 7/31/2005 | 17.06 | .59 | 1.60 | 2.19 | (.47) | (.13) | (.60) | 18.65 | 13.00 | 153 | 1.54 | 1.52 | 3.29 | |||
Year ended 7/31/2004 | 15.39 | .53 | 1.71 | 2.24 | (.57) | - | (.57) | 17.06 | 14.69 | 95 | 1.56 | 1.56 | 3.17 | |||
Class 529-E: | ||||||||||||||||
Year ended 7/31/2008 | 20.49 | .79 | (2.66) | (1.87) | (.84) | (.85) | (1.69) | 16.93 | (9.83) | 32 | .94 | .92 | 4.17 | |||
Year ended 7/31/2007 | 19.28 | .79 | 1.73 | 2.52 | (.85) | (.46) | (1.31) | 20.49 | 13.27 | 32 | .94 | .91 | 3.86 | |||
Year ended 7/31/2006 | 18.66 | .74 | .93 | 1.67 | (.69) | (.36) | (1.05) | 19.28 | 9.32 | 23 | .94 | .92 | 3.96 | |||
Year ended 7/31/2005 | 17.06 | .69 | 1.61 | 2.30 | (.57) | (.13) | (.70) | 18.66 | 13.63 | 17 | 1.02 | 1.01 | 3.80 | |||
Year ended 7/31/2004 | 15.40 | .62 | 1.70 | 2.32 | (.66) | - | (.66) | 17.06 | 15.24 | 10 | 1.04 | 1.04 | 3.69 | |||
Class 529-F-1: | ||||||||||||||||
Year ended 7/31/2008 | $20.52 | $.89 | $ | (2.66) | $(1.77) | $(.94) | $(.85) | $(1.79) | $16.96 | (9.35)% | $21 | .44% | .42% | 4.67% | ||
Year ended 7/31/2007 | 19.30 | .90 | 1.73 | 2.63 | (.95) | (.46) | (1.41) | 20.52 | 13.87 | 20 | .44 | .41 | 4.37 | |||
Year ended 7/31/2006 | 18.68 | .83 | .93 | 1.76 | (.78) | (.36) | (1.14) | 19.30 | 9.85 | 10 | .44 | .42 | 4.46 | |||
Year ended 7/31/2005 | 17.08 | .75 | 1.60 | 2.35 | (.62) | (.13) | (.75) | 18.68 | 13.96 | 5 | .70 | .68 | 4.14 | |||
Year ended 7/31/2004 | 15.42 | .67 | 1.69 | 2.36 | (.70) | - | (.70) | 17.08 | 15.53 | 3 | .79 | .79 | 3.95 | |||
Class R-1: | ||||||||||||||||
Year ended 7/31/2008 | 20.48 | .71 | (2.67) | (1.96) | (.75) | (.85) | (1.60) | 16.92 | (10.25) | 86 | 1.39 | 1.37 | 3.73 | |||
Year ended 7/31/2007 | 19.27 | .70 | 1.72 | 2.42 | (.75) | (.46) | (1.21) | 20.48 | 12.75 | 75 | 1.41 | 1.39 | 3.41 | |||
Year ended 7/31/2006 | 18.65 | .64 | .94 | 1.58 | (.60) | (.36) | (.96) | 19.27 | 8.79 | 37 | 1.45 | 1.41 | 3.46 | |||
Year ended 7/31/2005 | 17.05 | .61 | 1.61 | 2.22 | (.49) | (.13) | (.62) | 18.65 | 13.15 | 19 | 1.50 | 1.45 | 3.36 | |||
Year ended 7/31/2004 | 15.39 | .55 | 1.70 | 2.25 | (.59) | - | (.59) | 17.05 | 14.75 | 8 | 1.55 | 1.48 | 3.27 | |||
Class R-2: | ||||||||||||||||
Year ended 7/31/2008 | 20.42 | .70 | (2.66) | (1.96) | (.75) | (.85) | (1.60) | 16.86 | (10.26) | 516 | 1.44 | 1.42 | 3.66 | |||
Year ended 7/31/2007 | 19.22 | .69 | 1.72 | 2.41 | (.75) | (.46) | (1.21) | 20.42 | 12.73 | 539 | 1.44 | 1.39 | 3.38 | |||
Year ended 7/31/2006 | 18.60 | .64 | .94 | 1.58 | (.60) | (.36) | (.96) | 19.22 | 8.83 | 379 | 1.52 | 1.40 | 3.48 | |||
Year ended 7/31/2005 | 17.01 | .61 | 1.60 | 2.21 | (.49) | (.13) | (.62) | 18.60 | 13.16 | 271 | 1.58 | 1.42 | 3.39 | |||
Year ended 7/31/2004 | 15.36 | .55 | 1.69 | 2.24 | (.59) | - | (.59) | 17.01 | 14.75 | 139 | 1.75 | 1.44 | 3.30 | |||
Class R-3: | ||||||||||||||||
Year ended 7/31/2008 | 20.50 | .79 | (2.66) | (1.87) | (.84) | (.85) | (1.69) | 16.94 | (9.83) | 1,061 | .95 | .93 | 4.16 | |||
Year ended 7/31/2007 | 19.29 | .79 | 1.73 | 2.52 | (.85) | (.46) | (1.31) | 20.50 | 13.26 | 978 | .94 | .92 | 3.86 | |||
Year ended 7/31/2006 | 18.67 | .73 | .93 | 1.66 | (.68) | (.36) | (1.04) | 19.29 | 9.29 | 579 | .96 | .94 | 3.94 | |||
Year ended 7/31/2005 | 17.07 | .70 | 1.60 | 2.30 | (.57) | (.13) | (.70) | 18.67 | 13.68 | 394 | .97 | .96 | 3.85 | |||
Year ended 7/31/2004 | 15.41 | .62 | 1.70 | 2.32 | (.66) | - | (.66) | 17.07 | 15.25 | 176 | 1.02 | 1.02 | 3.70 | |||
Class R-4: | ||||||||||||||||
Year ended 7/31/2008 | 20.53 | .85 | (2.68) | (1.83) | (.89) | (.85) | (1.74) | 16.96 | (9.56) | 597 | .66 | .63 | 4.49 | |||
Year ended 7/31/2007 | 19.31 | .85 | 1.74 | 2.59 | (.91) | (.46) | (1.37) | 20.53 | 13.57 | 451 | .65 | .63 | 4.15 | |||
Year ended 7/31/2006 | 18.69 | .79 | .93 | 1.72 | (.74) | (.36) | (1.10) | 19.31 | 9.60 | 255 | .66 | .64 | 4.22 | |||
Year ended 7/31/2005 | 17.09 | .76 | 1.60 | 2.36 | (.63) | (.13) | (.76) | 18.69 | 14.00 | 120 | .67 | .65 | 4.17 | |||
Year ended 7/31/2004 | 15.43 | .68 | 1.70 | 2.38 | (.72) | - | (.72) | 17.09 | 15.64 | 30 | .69 | .69 | 4.05 | |||
Class R-5: | ||||||||||||||||
Year ended 7/31/2008 | 20.54 | .91 | (2.68) | (1.77) | (.95) | (.85) | (1.80) | 16.97 | (9.26) | 559 | .36 | .33 | 4.80 | |||
Year ended 7/31/2007 | 19.32 | .91 | 1.74 | 2.65 | (.97) | (.46) | (1.43) | 20.54 | 13.94 | 350 | .36 | .33 | 4.42 | |||
Year ended 7/31/2006 | 18.70 | .85 | .93 | 1.78 | (.80) | (.36) | (1.16) | 19.32 | 9.92 | 168 | .36 | .34 | 4.56 | |||
Year ended 7/31/2005 | 17.10 | .80 | 1.61 | 2.41 | (.68) | (.13) | (.81) | 18.70 | 14.33 | 81 | .37 | .35 | 4.45 | |||
Year ended 7/31/2004 | 15.44 | .73 | 1.71 | 2.44 | (.78) | - | (.78) | 17.10 | 16.01 | 57 | .37 | .37 | 4.35 |
Year ended July 31 | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
Portfolio turnover rate for all classes of shares | 38 | % | 32 | % | 35 | % | 24 | % | 27 | % |
(1) Based on average shares outstanding. | |||||||
(2) Total returns exclude any applicable sales charges, including contingent deferred sales charges. | |||||||
(3) This column reflects the impact, if any, of certain reimbursements/waivers from CRMC. During some of the years shown, CRMC reduced fees for investment advisory services. In addition, during some of the years shown, CRMC paid a portion of the fund's transfer agent fees for certain retirement plan share classes. | |||||||
See Notes to Financial Statements |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of The Income Fund of America, Inc.:
We have audited the accompanying statement of assets and liabilities, including the summary investment portfolio, of The Income Fund of America, Inc. (the “Fund”), as of July 31, 2008, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years then ended, and the financial highlights for each of the years presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Income Fund of America, Inc. as of July 31, 2008, the results of its operations for the year then ended, the changes in its net assets for each of the two years then ended, and the financial highlights for each of the years presented, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Costa Mesa, California
September 10, 2008
Expense example
unaudited
As a shareholder of the fund, you incur two types of costs: (1) transaction costs such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (February 1, 2008, through July 31, 2008).
Actual expenses:
The first line of each share class in the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes:
The second line of each share class in the table on the next page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds.
Notes:
There are some account fees that are charged to certain types of accounts, such as individual retirement accounts and 529 college savings plan accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually) that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F-1 and 529-F-1 shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning account value 2/1/2008 | Ending account value 7/31/2008 | Expenses paid during period* | Annualized expense ratio | |||||||||||||
Class A -- actual return | $ | 1,000.00 | $ | 933.58 | $ | 2.69 | .56 | % | ||||||||
Class A -- assumed 5% return | 1,000.00 | 1,022.08 | 2.82 | .56 | ||||||||||||
Class B -- actual return | 1,000.00 | 930.07 | 6.33 | 1.32 | ||||||||||||
Class B -- assumed 5% return | 1,000.00 | 1,018.30 | 6.62 | 1.32 | ||||||||||||
Class C -- actual return | 1,000.00 | 929.74 | 6.57 | 1.37 | ||||||||||||
Class C -- assumed 5% return | 1,000.00 | 1,018.05 | 6.87 | 1.37 | ||||||||||||
Class F-1 -- actual return | 1,000.00 | 933.26 | 2.88 | .60 | ||||||||||||
Class F-1 -- assumed 5% return | 1,000.00 | 1,021.88 | 3.02 | .60 | ||||||||||||
Class 529-A -- actual return | 1,000.00 | 933.08 | 3.12 | .65 | ||||||||||||
Class 529-A -- assumed 5% return | 1,000.00 | 1,021.63 | 3.27 | .65 | ||||||||||||
Class 529-B -- actual return | 1,000.00 | 929.69 | 6.91 | 1.44 | ||||||||||||
Class 529-B -- assumed 5% return | 1,000.00 | 1,017.70 | 7.22 | 1.44 | ||||||||||||
Class 529-C -- actual return | 1,000.00 | 929.75 | 6.91 | 1.44 | ||||||||||||
Class 529-C -- assumed 5% return | 1,000.00 | 1,017.70 | 7.22 | 1.44 | ||||||||||||
Class 529-E -- actual return | 1,000.00 | 931.63 | 4.47 | .93 | ||||||||||||
Class 529-E -- assumed 5% return | 1,000.00 | 1,020.24 | 4.67 | .93 | ||||||||||||
Class 529-F-1 -- actual return | 1,000.00 | 934.10 | 2.07 | .43 | ||||||||||||
Class 529-F-1 -- assumed 5% return | 1,000.00 | 1,022.73 | 2.16 | .43 | ||||||||||||
Class R-1 -- actual return | 1,000.00 | 929.57 | 6.52 | 1.36 | ||||||||||||
Class R-1 -- assumed 5% return | 1,000.00 | 1,018.10 | 6.82 | 1.36 | ||||||||||||
Class R-2 -- actual return | 1,000.00 | 929.51 | 6.91 | 1.44 | ||||||||||||
Class R-2 -- assumed 5% return | 1,000.00 | 1,017.70 | 7.22 | 1.44 | ||||||||||||
Class R-3 -- actual return | 1,000.00 | 931.63 | 4.51 | .94 | ||||||||||||
Class R-3 -- assumed 5% return | 1,000.00 | 1,020.19 | 4.72 | .94 | ||||||||||||
Class R-4 -- actual return | 1,000.00 | 933.10 | 3.08 | .64 | ||||||||||||
Class R-4 -- assumed 5% return | 1,000.00 | 1,021.68 | 3.22 | .64 | ||||||||||||
Class R-5 -- actual return | 1,000.00 | 934.64 | 1.64 | .34 | ||||||||||||
Class R-5 -- assumed 5% return | 1,000.00 | 1,023.17 | 1.71 | .34 |
*The “expenses paid during period” are equal to the “annualized expense ratio,” multiplied by the average account value over the period, multiplied by the number of days in the period (182), and divided by 366 (to reflect the one-half year period).
Tax information
unaudited
We are required to advise you within 60 days of the fund’s fiscal year-end regarding the federal tax status of certain distributions received by shareholders during such fiscal year. The fund hereby designates the following amounts for the fund’s fiscal year ended July 31, 2008:
Long-term capital gains | $ | 3,816,742,000 | ||
Qualified dividend income | 2,455,040,000 | |||
Corporate dividends received deduction | 1,549,532,000 | |||
U.S. government income that may be exempt from state taxation | 104,561,000 |
Individual shareholders should refer to their Form 1099 or other tax information, which will be mailed in January 2009, to determine the calendar year amounts to be included on their 2008 tax returns. Shareholders should consult their tax advisers.
Other share class results
unaudited
Fund results shown are for past periods and are not predictive of results for future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.
Class B, Class C, Class F-1 and Class 529
Average annual total returns for periods ended June 30, 2008 (the most recent calendar quarter-end): | ||||||||||||
1 year | 5 years | Life of class | ||||||||||
Class B shares — first sold 3/15/00 | ||||||||||||
Reflecting applicable contingent deferred sales | ||||||||||||
charge (CDSC), maximum of 5%, payable only | ||||||||||||
if shares are sold within six years of purchase | –16.20 | % | 7.42 | % | 7.35 | % | ||||||
Not reflecting CDSC | –12.16 | 7.72 | 7.35 | |||||||||
Class C shares — first sold 3/15/01 | ||||||||||||
Reflecting CDSC, maximum of 1%, payable only | ||||||||||||
if shares are sold within | ||||||||||||
one year of purchase | –12.98 | 7.65 | 6.27 | |||||||||
Not reflecting CDSC | –12.17 | 7.65 | 6.27 | |||||||||
Class F-1 shares* — first sold 3/15/01 | ||||||||||||
Not reflecting annual asset-based fee charged | ||||||||||||
by sponsoring firm | –11.46 | 8.48 | 7.08 | |||||||||
Class 529-A shares† — first sold 2/15/02 | ||||||||||||
Reflecting 5.75% maximum sales charge | –16.64 | 7.17 | 6.48 | |||||||||
Not reflecting maximum sales charge | –11.54 | 8.44 | 7.47 | |||||||||
Class 529-B shares† — first sold 2/19/02 | ||||||||||||
Reflecting applicable CDSC, maximum of 5%, payable | ||||||||||||
only if shares are sold within six years of purchase | –16.28 | 7.26 | 6.73 | |||||||||
Not reflecting CDSC | –12.24 | 7.56 | 6.73 | |||||||||
Class 529-C shares† — first sold 2/19/02 | ||||||||||||
Reflecting CDSC, maximum of 1%, payable only | ||||||||||||
if shares are sold within one year of purchase | –13.04 | 7.57 | 6.74 | |||||||||
Not reflecting CDSC | –12.23 | 7.57 | 6.74 | |||||||||
Class 529-E shares*† — first sold 2/25/02 | –11.78 | 8.12 | 7.11 | |||||||||
Class 529-F-1 shares*† — first sold 9/17/02 | ||||||||||||
Not reflecting annual asset-based fee charged | ||||||||||||
by sponsoring firm | –11.31 | 8.55 | 9.70 | |||||||||
*These shares are sold without any initial or contingent deferred sales charge. | ||||||||||||
† Results shown do not reflect the $10 initial account setup fee and an annual $10 account maintenance fee. |
The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased the waiver to 10% on April 1, 2005. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 29 and 30 for details.
For information regarding the differences among the various share classes, please refer to the fund’s prospectus.
Board of directors and other officers
“Independent” directors | ||
Year first | ||
elected | ||
a director | ||
Name and age | of the fund1 | Principal occupation(s) during past five years |
Mary Jane Elmore, 54 | 2008 | Managing Director and General Partner, Institutional Venture Partners; former Product Marketing Manager, Intel Corporation’s Development Systems Division |
Robert A. Fox, 71 | 1972 | Managing General Partner, Fox Investments LP; corporate director; retired President and CEO, |
Foster Farms (poultry producer) | ||
Leonade D. Jones, 60 | 1993 | Co-founder, VentureThink LLC (developed and |
Chairman of the Board | managed e-commerce businesses) and Versura Inc. | |
(Independent and Non-Executive) | (education loan exchange); former Treasurer, The Washington Post Company | |
William D. Jones, 53 | 2008 | Real estate developer/owner, President and CEO, CityLink Investment Corporation |
John M. Lillie, 71 | 2003 | Former President, Sequoia Associates LLC (investment firm specializing in medium-size buyouts); former CEO, American President Companies (container shipping and transportation services); former CEO, Lucky Stores; former CEO, Leslie Salt |
John G. McDonald, 71 | 1976 | Stanford Investors Professor, Graduate School of Business, Stanford University |
James J. Postl, 62 | 2008 | Former President and CEO, Pennzoil-Quaker State Company (automotive products and services) |
Henry E. Riggs, 73 | 1989 | President Emeritus, Keck Graduate Institute of Applied Life Sciences |
Isaac Stein, 61 | 2004 | President, Waverly Associates (private investment fund); Chairman Emeritus of the Board of Trustees, Stanford University |
Patricia K. Woolf, Ph.D., 74 | 1985 | Private investor; corporate director; former Lecturer, Department of Molecular Biology, Princeton University |
“Independent” directors | ||
Number of | ||
portfolios | ||
in fund | ||
complex2 | ||
overseen by | ||
Name and age | director | Other directorships3 held by director |
Mary Jane Elmore, 54 | 2 | None |
Robert A. Fox, 71 | 7 | Chemtura Corporation |
Leonade D. Jones, 60 | 6 | None |
Chairman of the Board | ||
(Independent and Non-Executive) | ||
William D. Jones, 53 | 4 | Sempra Energy; Southwest Water Company |
John M. Lillie, 71 | 2 | None |
John G. McDonald, 71 | 8 | iStar Financial, Inc.; Plum Creek Timber Co.; Scholastic Corporation; Varian, Inc. |
James J. Postl, 62 | 2 | Centex Corporation; Cooper Industries; Northwest Airlines |
Henry E. Riggs, 73 | 4 | None |
Isaac Stein, 61 | 2 | Alexza Pharmaceuticals, Inc.; Maxygen, Inc. |
Patricia K. Woolf, Ph.D., 74 | 6 | None |
“Interested” director4 | ||
Year first | ||
elected a | ||
director or | ||
Name, age and | officer of | Principal occupation(s) during past five years and |
position with fund | the fund1 | positions held with affiliated entities of the fund |
Hilda L. Applbaum, 47 | 1998 | Senior Vice President — Capital World Investors, |
Vice Chairman of the Board | Capital Research and Management Company | |
“Interested” director4 | ||
Number of | ||
portfolios | ||
in fund | ||
complex2 | ||
Name, age and | overseen by | |
position with fund | director | Other directorships3 held by director |
Hilda L. Applbaum, 47 | 1 | None |
Vice Chairman of the Board |
The statement of additional information includes additional information about fund directors and is available without charge upon request by calling American Funds Service Company at 800/421-0180. The address for all directors and officers of the fund is 333 South Hope Street, Los Angeles,
CA 90071, Attention: Secretary.
1Directors and officers of the fund serve until their resignation, removal or retirement. |
2Capital Research and Management Company manages the American Funds, consisting of 30 funds. Capital Research and Management Company also manages American Funds Insurance Series,® which is composed of 15 funds and serves as the underlying investment vehicle for certain variable insurance contracts; American Funds Target Date Retirement Series,® Inc., which is composed of nine funds and is available to investors in tax-deferred retirement plans and IRAs; and Endowments, which is composed of two portfolios and is available to certain nonprofit organizations. |
3This includes all directorships (other than those in the American Funds or other funds managed by Capital Research and Management Company) that are held by each director as a director of a public company or a registered investment company. |
4“Interested persons” within the meaning of the 1940 Act, on the basis of their affiliation with the fund’s investment adviser, Capital Research and Management Company, or affiliated entities (including the fund’s principal underwriter). |
5Company affiliated with Capital Research and Management Company. |
6All of the officers listed, except Joanna F. Jonsson, Mary E. Sheridan and Andrew B. Suzman, are officers and/or directors/trustees of one or more of the other funds for which Capital Research and Management Company serves as investment adviser. |
Other officers6
Year first | ||
elected | Principal occupation(s) during past five years | |
Name, age and | an officer | and positions held with affiliated entities or the |
position with fund | of the fund1 | principal underwriter of the fund |
David C. Barclay, 51 | 1998 | Senior Vice President — Fixed Income, Capital |
President | Research and Management Company; Director, The Capital Group Companies, Inc.5 | |
Abner D. Goldstine, 78 | 1993 | Senior Vice President — Fixed Income, Capital |
Senior Vice President | Research and Management Company; Director, Capital Research and Management Company | |
Dina N. Perry, 62 | 1994 | Senior Vice President — Capital World Investors, |
Senior Vice President | Capital Research and Management Company; Director, Capital Research and Management Company | |
Paul F. Roye, 54 | 2007 | Senior Vice President — Fund Business Management |
Senior Vice President | Group, Capital Research and Management Company; Director, American Funds Service Company;5 former Director of Investment Management, United States Securities and Exchange Commission | |
Andrew B. Suzman, 41 | 2004 | Senior Vice President — Capital World Investors, |
Senior Vice President | Capital Research Company5 | |
Joanna F. Jonsson, 45 | 2006 | Senior Vice President — Capital World Investors, |
Vice President | Capital Research Company;5 Director, The Capital Group Companies, Inc.;5 Director, American Funds Distributors, Inc.;5 Director, Capital International Limited5 | |
Mary E. Sheridan, 58 | 2004 | Vice President — Capital World Investors, Capital |
Vice President | Research Company5 | |
John H. Smet, 52 | 1994 | Senior Vice President — Fixed Income, Capital |
Vice President | Research and Management Company; Director, American Funds Distributors, Inc.5 | |
Steven T. Watson, 53 | 2006 | Senior Vice President — Capital World Investors, |
Vice President | Capital Research Company;5 Director, Capital Research Company;5 Director, The Capital Group Companies, Inc.5 | |
Patrick F. Quan, 50 | 1986 | Vice President — Fund Business Management |
Secretary | Group, Capital Research and Management Company | |
Jennifer M. Buchheim, 35 | 2005 | Vice President — Fund Business Management |
Treasurer | Group, Capital Research and Management Company | |
Bryan K. Nielsen, 35 | 2008 | Vice President, Capital Guardian Trust Company;5 |
Assistant Treasurer | Assistant Vice President, Capital International, Inc.5 |
Please see page 35 for footnotes.
Result of meeting of shareholders held August 7, 2008
Shares outstanding (all classes) on record date (June 9, 2008) | 4,528,289,891 | |||||||
Total shares voting on August 7, 2008 | 3,485,038,608 | (77 | %) |
Election of directors: | ||||||||||||||||
Percent | Percent | |||||||||||||||
of shares | of shares | |||||||||||||||
Director | Votes for | voting for | Votes withheld | withheld | ||||||||||||
Hilda L. Applbaum | 3,433,620,693 | 99 | % | 51,417,915 | 1 | % | ||||||||||
Mary Jane Elmore | 3,433,780,187 | 99 | 51,258,420 | 1 | ||||||||||||
Robert A. Fox | 3,431,468,798 | 98 | 53,569,810 | 2 | ||||||||||||
Leonade D. Jones | 3,433,163,580 | 99 | 51,875,028 | 1 | ||||||||||||
William D. Jones | 3,433,206,295 | 99 | 51,832,312 | 1 | ||||||||||||
John M. Lillie | 3,432,563,711 | 98 | 52,474,896 | 2 | ||||||||||||
John G. McDonald | 3,430,060,890 | 98 | 54,977,718 | 2 | ||||||||||||
James J. Postl | 3,433,560,180 | 99 | 51,478,427 | 1 | ||||||||||||
Henry E. Riggs | 3,431,685,555 | 98 | 53,353,052 | 2 | ||||||||||||
Isaac Stein | 3,433,639,456 | 99 | 51,399,152 | 1 | ||||||||||||
Patricia K. Woolf | 3,430,912,291 | 98 | 54,126,317 | 2 |
Office of the fund
One Market
Steuart Tower, Suite 1800
Mailing address: P.O. Box 7650
San Francisco, CA 94120-7650
Investment adviser
Capital Research and
Management Company
333 South Hope Street
Los Angeles, CA 90071-1406
6455 Irvine Center Drive
Irvine, CA 92618
Transfer agent for shareholder accounts
American Funds Service Company
(Please write to the address nearest you.)
P.O. Box 25065
Santa Ana, CA 92799-5065
P.O. Box 659522
San Antonio, TX 78265-9522
P.O. Box 6007
Indianapolis, IN 46206-6007
P.O. Box 2280
Norfolk, VA 23501-2280
Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070
Counsel
Paul, Hastings, Janofsky & Walker LLP
515 South Flower Street
Los Angeles, CA 90071-2228
Independent registered public accounting firm
Deloitte & Touche LLP
695 Town Center Drive
Suite 1200
Costa Mesa, CA 92626-7188
Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406
Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s prospectus, which can be obtained from your financial adviser and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.
“American Funds Proxy Voting Guidelines” — which describes how we vote proxies relating to portfolio securities — is available free of charge on the U.S. Securities and Exchange Commission (SEC) website at sec.gov, on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the SEC for the 12 months ended June 30 by August 31. The report also is available on the SEC and American Funds websites.
A complete July 31, 2008, portfolio of The Income Fund of America’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).
The Income Fund of America files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. (800/SEC-0330). Additionally, the list of portfolio holdings also is available by calling AFS.
This report is for the information of shareholders of The Income Fund of America, but it also may be used as sales literature when preceded or accompanied by the current prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after September 30, 2008, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.
[logo - American Funds®]
The right choice for the long term®
What makes American Funds different?
For more than 75 years, we have followed a consistent philosophy to benefit our investors. Our 30 carefully conceived, broadly diversified funds, in addition to the target date retirement series, offer opportunities that have attracted over 50 million shareholder accounts.
Our unique combination of strengths includes these five factors:
•A long-term, value-oriented approach |
We seek to buy securities at reasonable prices relative to their prospects and hold them for the long term. |
•An extensive global research effort |
Our investment professionals travel the world to find the best investment opportunities and gain a comprehensive understanding of companies and markets. |
•The multiple portfolio counselor system |
Our unique method of portfolio management, developed 50 years ago, blends teamwork with individual accountability and has provided American Funds with a sustainable method of achieving fund objectives. |
•Experienced investment professionals |
American Funds portfolio counselors have an average of 26 years of investment experience, providing a wealth of knowledge and experience that few organizations have. |
•A commitment to low operating expenses |
The American Funds provide exceptional value for shareholders, with operating expenses that are among the lowest in the mutual fund industry. |
American Funds span a range of investment objectives
•Growth funds |
Emphasis on long-term growth through stocks |
AMCAP Fund® |
EuroPacific Growth Fund® |
The Growth Fund of America® |
The New Economy Fund® |
New Perspective Fund® |
New World FundSM |
SMALLCAP World Fund® |
•Growth-and-income funds |
Emphasis on long-term growth and dividends through stocks |
American Mutual Fund® |
Capital World Growth and Income FundSM |
Fundamental InvestorsSM |
The Investment Company of America® |
Washington Mutual Investors FundSM |
•Equity-income funds |
Emphasis on above-average income and growth through stocks and/or bonds |
Capital Income Builder® |
>The Income Fund of America® |
•Balanced fund |
Emphasis on long-term growth and current income through stocks and bonds |
American Balanced Fund® |
•Bond funds |
Emphasis on current income through bonds |
American High-Income TrustSM |
The Bond Fund of AmericaSM |
Capital World Bond Fund® |
Intermediate Bond Fund of America® |
Short-Term Bond Fund of AmericaSM |
U.S. Government Securities FundSM |
•Tax-exempt bond funds |
Emphasis on tax-free current income through municipal bonds |
American High-Income Municipal Bond Fund® |
Limited Term Tax-Exempt Bond Fund of AmericaSM |
The Tax-Exempt Bond Fund of America® |
State-specific tax-exempt funds |
The Tax-Exempt Fund of California® |
The Tax-Exempt Fund of Maryland® |
The Tax-Exempt Fund of Virginia® |
•Money market funds |
The Cash Management Trust of America® |
The Tax-Exempt Money Fund of AmericaSM |
The U.S. Treasury Money Fund of AmericaSM |
•American Funds Target Date Retirement Series® |
The Capital Group Companies
American Funds Capital Research and Management Capital International Capital Guardian Capital Bank and Trust
Lit No. MFGEAR-906-0908P
Litho in USA BAG/AC/8061-S16800
Printed on paper containing 10% post-consumer waste
Printed with inks containing soy and/or vegetable oil
ITEM 2 – Code of Ethics
The Registrant has adopted a Code of Ethics that applies to its Principal Executive Officer and Principal Financial Officer. The Registrant undertakes to provide to any person without charge, upon request, a copy of the Code of Ethics. Such request can be made to American Funds Service Company at 800/421-0180 or to the Secretary of the Registrant, One Market, Steuart Tower, Suite 1800, San Francisco, California 94105.
ITEM 3 – Audit Committee Financial Expert
The Registrant’s board has determined that Robert A. Fox, a member of the Registrant’s audit committee, is an “audit committee financial expert” and "independent," as such terms are defined in this Item. This designation will not increase the designee’s duties, obligations or liability as compared to his or her duties, obligations and liability as a member of the audit committee and of the board, nor will it reduce the responsibility of the other audit committee members. There may be other individuals who, through education or experience, would qualify as "audit committee financial experts" if the board had designated them as such. Most importantly, the board believes each member of the audit committee contributes significantly to the effective oversight of the Registrant’s financial statements and condition.
ITEM 4 – Principal Accountant Fees and Services
Registrant: | ||||
a) Audit Fees: | ||||
2007 | $108,000 | |||
2008 | $113,000 | |||
b) Audit-Related Fees: | ||||
2007 | $27,000 | |||
2008 | $27,000 | |||
The audit-related fees consist of assurance and related services relating to the examination of the Registrant’s investment adviser conducted in accordance with Statement on Auditing Standards Number 70 issued by the American Institute of Certified Public Accountants. | ||||
c) Tax Fees: | ||||
2007 | $6,000 | |||
2008 | $7,000 | |||
The tax fees consist of professional services relating to the preparation of the Registrant’s tax returns. | ||||
d) All Other Fees: | ||||
2007 | None | |||
2008 | None | |||
Adviser and affiliates (includes only fees for non-audit services billed to the adviser and affiliates for engagements that relate directly to the operations and financial reporting of the Registrant and were subject to the pre-approval policies described below): | ||||
a) Not Applicable | ||||
b) Audit-Related Fees: | ||||
2007 | $850,000 | |||
2008 | $1,109,000 | |||
The audit–related fees consist of assurance and related services relating to the examination of the Registrant’s transfer agent, principal underwriter and investment adviser conducted in accordance with Statement on Auditing Standards Number 70 issued by the American Institute of Certified Public Accountants. | ||||
c) Tax Fees: | ||||
2007 | $12,000 | |||
2008 | $8,000 | |||
The tax fees consist of consulting services relating to the Registrant’s investments. | ||||
d) All Other Fees: | ||||
2007 | None | |||
2008 | None | |||
The Registrant’s audit committee will pre-approve all audit and permissible non-audit services that the committee considers compatible with maintaining the independent registered public accounting firm’s independence. The pre-approval requirement will extend to all non-audit services provided to the Registrant, the investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant, if the engagement relates directly to the operations and financial reporting of the Registrant. The committee will not delegate its responsibility to pre-approve these services to the investment adviser. The committee may delegate to one or more committee members the authority to review and pre-approve audit and permissible non-audit services. Actions taken under any such delegation will be reported to the full committee at its next meeting. The pre-approval requirement is waived with respect to non-audit services if certain conditions are met. The pre-approval requirement was not waived for any of the non-audit services listed above provided to the Registrant, adviser, and affiliates.
Aggregate non-audit fees paid to the Registrant’s auditors, including fees for all services billed to the Registrant and the adviser and affiliates that provide ongoing services to the Registrant were $1,163,000 for fiscal year 2007 and $1,458,000 for fiscal year 2008. The non-audit services represented by these amounts were brought to the attention of the committee and considered to be compatible with maintaining the auditors’ independence.
ITEM 5 – Audit Committee of Listed Registrants
Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.
ITEM 6 – Schedule of Investments
[logo – American Funds®]
The Income Fund of America®
Investment portfolio
July 31, 2008
Market value | ||||||||
Common stocks — 60.43% | Shares | (000 | ) | |||||
FINANCIALS — 10.10% | ||||||||
Bank of America Corp. | 28,563,550 | $ | 939,741 | |||||
Citigroup Inc. | 47,000,000 | 878,430 | ||||||
U.S. Bancorp | 16,337,400 | 500,088 | ||||||
Lloyds TSB Group PLC | 61,959,000 | 362,520 | ||||||
PNC Financial Services Group, Inc. | 4,897,000 | 349,107 | ||||||
Equity Residential, shares of beneficial interest | 7,842,800 | 338,574 | ||||||
Unibail-Rodamco, non-registered shares | 1,375,000 | 309,181 | ||||||
JPMorgan Chase & Co. | 7,170,000 | 291,317 | ||||||
Kimco Realty Corp. | 7,967,866 | 281,186 | ||||||
Wells Fargo & Co. | 7,623,500 | 230,763 | ||||||
Simon Property Group, Inc. | 2,450,000 | 226,944 | ||||||
Société Générale | 2,162,500 | 201,689 | ||||||
Wachovia Corp. | 11,671,300 | 201,563 | ||||||
Banco Santander, SA | 9,030,828 | 175,662 | ||||||
Banco Itaú Holding Financeira SA, preferred nominative | 8,181,250 | 175,182 | ||||||
Boston Properties, Inc. | 1,800,000 | 173,142 | ||||||
ING Groep NV, depository receipts | 4,426,202 | 144,907 | ||||||
SunTrust Banks, Inc. | 3,500,000 | 143,710 | ||||||
Arthur J. Gallagher & Co.1 | 5,403,700 | 137,416 | ||||||
AMB Property Corp. | 2,650,000 | 129,744 | ||||||
Malayan Banking Bhd. | 51,243,350 | 125,176 | ||||||
Crédit Agricole SA | 5,000,000 | 107,310 | ||||||
CapitalSource Inc. | 8,828,441 | 102,586 | ||||||
Fidelity National Financial, Inc. | 7,610,250 | 101,673 | ||||||
DnB NOR ASA | 7,500,000 | 96,956 | ||||||
Hospitality Properties Trust | 4,500,000 | 95,850 | ||||||
BNP Paribas SA | 910,000 | 90,489 | ||||||
American Capital, Ltd. | 4,445,000 | 90,322 | ||||||
HCP, Inc. | 2,442,300 | 88,094 | ||||||
Itaúsa — Investimentos Itaú SA, preferred nominative | 11,058,500 | 72,875 | ||||||
Boardwalk REIT | 1,884,000 | 72,152 | ||||||
iStar Financial, Inc.1 | 8,574,350 | 70,395 | ||||||
Allied Capital Corp. | 4,859,520 | 66,818 | ||||||
Unibanco-União de Bancos Brasileiros SA, units (GDR) | 484,000 | 63,709 | ||||||
Singapore Exchange Ltd. | 12,300,000 | 61,338 | ||||||
Developers Diversified Realty Corp. | 1,595,000 | 50,976 | ||||||
AMP Ltd. | 6,500,000 | 40,082 | ||||||
HRPT Properties Trust | 5,449,700 | 38,202 | ||||||
Brandywine Realty Trust | 2,000,000 | 32,100 | ||||||
Wilmington Trust Corp. | 1,300,000 | 30,641 | ||||||
XL Capital Ltd., Class A | 1,175,000 | 21,021 | ||||||
Cousins Properties Inc. | 666,525 | 14,644 | ||||||
7,724,275 | ||||||||
TELECOMMUNICATION SERVICES — 8.00% | ||||||||
AT&T Inc. | 56,084,621 | $ | 1,727,967 | |||||
Verizon Communications Inc. | 43,974,000 | 1,496,875 | ||||||
Vodafone Group PLC | 249,415,000 | 672,449 | ||||||
Koninklijke KPN NV | 30,795,000 | 538,047 | ||||||
Telekomunikacja Polska SA | 34,117,900 | 380,560 | ||||||
Telstra Corp. Ltd. | 52,868,954 | 223,636 | ||||||
Chunghwa Telecom Co., Ltd. (ADR)2 | 5,023,500 | 126,542 | ||||||
Chunghwa Telecom Co., Ltd.2 | 35,064,162 | 88,948 | ||||||
Telecom Italia SpA | 66,565,000 | 120,659 | ||||||
Telecom Italia SpA, nonvoting | 56,438,000 | 76,379 | ||||||
Qwest Communications International Inc. | 44,280,000 | 169,592 | ||||||
Bell Aliant Regional Communications Income Fund | 5,510,100 | 142,904 | ||||||
Hutchison Telecommunications International Ltd.2 | 84,753,000 | 111,244 | ||||||
StarHub Ltd | 45,306,250 | 92,428 | ||||||
Singapore Telecommunications Ltd. | 30,000,000 | 78,532 | ||||||
SK Telecom Co., Ltd. (ADR) | 2,775,000 | 59,163 | ||||||
Sprint Nextel Corp., Series 1 | 760,501 | 6,191 | ||||||
American Tower Corp., Class A2 | 42,271 | 1,771 | ||||||
Embarq Corp. | 38,025 | 1,741 | ||||||
XO Holdings, Inc.2 | 9,158 | 4 | ||||||
6,115,632 | ||||||||
UTILITIES — 7.19% | ||||||||
E.ON AG | 4,025,000 | 768,173 | ||||||
GDF Suez | 10,841,565 | 681,652 | ||||||
Entergy Corp. | 4,842,600 | 517,771 | ||||||
FirstEnergy Corp. | 4,516,500 | 332,189 | ||||||
Enel SpA | 35,518,000 | 329,105 | ||||||
Exelon Corp. | 3,800,000 | 298,756 | ||||||
Southern Co. | 8,405,000 | 297,453 | ||||||
RWE AG | 2,250,000 | 269,887 | ||||||
DTE Energy Co. | 6,500,000 | 266,370 | ||||||
Duke Energy Corp. | 13,431,172 | 236,120 | ||||||
Public Service Enterprise Group Inc. | 4,834,000 | 202,061 | ||||||
Consolidated Edison, Inc. | 4,480,000 | 177,856 | ||||||
American Electric Power Co., Inc. | 4,250,000 | 167,875 | ||||||
Ameren Corp. | 3,240,994 | 133,172 | ||||||
Hongkong Electric Holdings Ltd. | 17,686,000 | 102,922 | ||||||
NiSource Inc. | 5,804,600 | 99,143 | ||||||
PPL Corp. | 2,000,000 | 93,920 | ||||||
Progress Energy, Inc. | 2,045,400 | 86,541 | ||||||
MDU Resources Group, Inc. | 2,655,000 | 84,721 | ||||||
DUET Group | 23,251,114 | 64,475 | ||||||
Equitable Resources, Inc. | 1,202,048 | 62,807 | ||||||
Northeast Utilities | 2,250,000 | 56,610 | ||||||
Dominion Resources, Inc. | 1,000,000 | 44,180 | ||||||
CLP Holdings Ltd. | 5,250,000 | 43,136 | ||||||
Ratchaburi Electricity Generating Holding PCL | 31,800,000 | 37,507 | ||||||
Electricity Generating PCL | 12,062,472 | 29,355 | ||||||
Glow Energy PCL | 14,640,000 | 12,131 | ||||||
SUEZ SA | 20 | 1 | ||||||
5,495,889 | ||||||||
CONSUMER STAPLES — 6.53% | ||||||||
Kraft Foods Inc., Class A | 24,826,892 | 789,992 | ||||||
H.J. Heinz Co. | 15,411,700 | 776,441 | ||||||
Philip Morris International Inc. | 12,530,000 | 647,175 | ||||||
Coca-Cola Co. | 7,840,000 | 403,760 | ||||||
Hershey Co.1 | 10,821,000 | 397,888 | ||||||
Unilever NV, depository receipts | 6,380,000 | $ | 176,404 | |||||
Unilever NV (New York registered) | 5,051,750 | 139,984 | ||||||
Diageo PLC | 17,950,000 | 313,207 | ||||||
General Mills, Inc. | 4,521,800 | 291,159 | ||||||
ConAgra Foods, Inc. | 9,962,600 | 215,989 | ||||||
Altria Group, Inc. | 8,530,000 | 173,586 | ||||||
Kimberly-Clark Corp. | 2,750,000 | 159,032 | ||||||
Anheuser-Busch Companies, Inc. | 2,085,000 | 141,280 | ||||||
UST Inc. | 2,000,000 | 105,220 | ||||||
SABMiller PLC | 4,311,000 | 89,617 | ||||||
Goodman Fielder Ltd.1 | 67,000,000 | 82,504 | ||||||
Reynolds American Inc. | 860,132 | 48,021 | ||||||
Coca-Cola Amatil Ltd. | 5,822,118 | 42,250 | ||||||
4,993,509 | ||||||||
INDUSTRIALS — 6.44% | ||||||||
General Electric Co. | 47,650,000 | 1,348,018 | ||||||
Waste Management, Inc. | 19,150,500 | 680,609 | ||||||
Emerson Electric Co. | 9,370,000 | 456,319 | ||||||
Schneider Electric SA | 3,775,409 | 420,260 | ||||||
Deutsche Post AG | 13,521,400 | 318,013 | ||||||
Vallourec SA | 837,500 | 250,832 | ||||||
Atlas Copco AB, Class A | 15,850,000 | 247,509 | ||||||
Sandvik AB | 16,080,000 | 211,908 | ||||||
Cooper Industries, Ltd., Class A | 4,500,000 | 189,765 | ||||||
Masco Corp. | 11,253,200 | 185,565 | ||||||
Hubbell Inc., Class B | 3,272,100 | 137,952 | ||||||
Macquarie Korea Infrastructure Fund1 | 21,023,070 | 128,798 | ||||||
PACCAR Inc | 2,708,550 | 113,922 | ||||||
R.R. Donnelley & Sons Co. | 2,845,400 | 75,972 | ||||||
Avery Dennison Corp. | 1,498,182 | 65,935 | ||||||
SembCorp Industries Ltd | 16,689,500 | 55,160 | ||||||
Singapore Technologies Engineering Ltd. | 15,281,000 | 31,063 | ||||||
Northwest Airlines Corp.2 | 677,690 | 6,208 | ||||||
Delta Air Lines, Inc.2 | 652,168 | 4,917 | ||||||
UAL Corp.2 | 59,995 | 498 | ||||||
4,929,223 | ||||||||
ENERGY — 5.32% | ||||||||
Chevron Corp. | 17,030,000 | 1,440,057 | ||||||
Diamond Offshore Drilling, Inc. | 5,015,000 | 598,289 | ||||||
TOTAL SA (ADR) | 3,640,000 | 278,460 | ||||||
TOTAL SA | 3,390,000 | 261,013 | ||||||
Spectra Energy Corp | 19,311,414 | 524,691 | ||||||
Marathon Oil Corp. | 5,790,000 | 286,431 | ||||||
Royal Dutch Shell PLC, Class A (ADR) | 2,500,000 | 176,975 | ||||||
Royal Dutch Shell PLC, Class B | 2,797,147 | 98,778 | ||||||
Penn West Energy Trust | 6,555,000 | 196,375 | ||||||
Occidental Petroleum Corp. | 2,000,000 | 157,660 | ||||||
Banpu PCL | 2,405,900 | 29,885 | ||||||
Centennial Coal Co. Ltd. | 5,045,082 | 24,566 | ||||||
4,073,180 | ||||||||
MATERIALS — 3.89% | ||||||||
E.I. du Pont de Nemours and Co. | 15,200,000 | 665,912 | ||||||
Weyerhaeuser Co.1 | 10,728,000 | 573,519 | ||||||
Dow Chemical Co. | 13,125,000 | 437,194 | ||||||
MeadWestvaco Corp.1 | 11,500,696 | 308,334 | ||||||
Rohm and Haas Co. | 3,150,000 | 236,250 | ||||||
Vulcan Materials Co. | 2,790,000 | $ | 179,090 | |||||
International Paper Co. | 5,500,000 | 152,460 | ||||||
PPG Industries, Inc. | 1,885,000 | 114,306 | ||||||
RPM International, Inc. | 5,385,000 | 110,392 | ||||||
Alcoa Inc. | 3,036,400 | 102,478 | ||||||
UPM-Kymmene Oyj | 4,100,000 | 65,245 | ||||||
Freeport-McMoRan Copper & Gold Inc. | 300,000 | 29,025 | ||||||
2,974,205 | ||||||||
CONSUMER DISCRETIONARY — 3.88% | ||||||||
McDonald’s Corp. | 13,600,300 | 813,162 | ||||||
Vivendi SA | 11,030,000 | 463,651 | ||||||
Esprit Holdings Ltd. | 40,949,000 | 440,117 | ||||||
Carnival Corp., units | 9,461,997 | 349,526 | ||||||
VF Corp. | 2,040,000 | 146,023 | ||||||
Leggett & Platt, Inc. | 6,500,000 | 126,750 | ||||||
CBS Corp., Class B | 7,000,000 | 114,520 | ||||||
Regal Entertainment Group, Class A | 5,660,000 | 94,239 | ||||||
DSG International PLC | 83,830,000 | 74,757 | ||||||
Polaris Industries Inc.1 | 1,707,000 | 73,059 | ||||||
H & M Hennes & Mauritz AB, Class B | 1,200,000 | 64,446 | ||||||
Kesa Electricals PLC | 17,900,000 | 53,386 | ||||||
Stockmann Oyj, Class B | 1,576,000 | 48,685 | ||||||
Gannett Co., Inc. | 2,500,000 | 45,300 | ||||||
Macquarie Media Group | 6,055,676 | 20,207 | ||||||
Marks and Spencer Group PLC | 3,195,000 | 16,367 | ||||||
Time Warner Cable Inc., Class A2 | 398,337 | 11,325 | ||||||
Ford Motor Co.2 | 2,169,728 | 10,415 | ||||||
Adelphia Recovery Trust, Series ACC-12 | 19,531,478 | 514 | ||||||
2,966,449 | ||||||||
HEALTH CARE — 3.85% | ||||||||
Merck & Co., Inc. | 28,675,000 | 943,407 | ||||||
Bristol-Myers Squibb Co. | 30,025,500 | 634,139 | ||||||
Eli Lilly and Co. | 11,100,000 | 522,921 | ||||||
Pfizer Inc | 20,500,000 | 382,735 | ||||||
Wyeth | 6,500,000 | 263,380 | ||||||
Abbott Laboratories | 3,500,000 | 197,190 | ||||||
Clarent Hospital Corp.1,2,3 | 484,684 | 24 | ||||||
2,943,796 | ||||||||
INFORMATION TECHNOLOGY — 1.36% | ||||||||
Microchip Technology Inc.1 | 14,128,000 | 451,107 | ||||||
Maxim Integrated Products, Inc. | 15,190,000 | 298,332 | ||||||
Microsoft Corp. | 4,000,000 | 102,880 | ||||||
Lite-On Technology Corp. | 107,917,127 | 96,009 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR) | 5,527,729 | 52,513 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 16,080,668 | 29,505 | ||||||
Quanta Computer Inc. | 4,547,450 | 6,495 | ||||||
ZiLOG, Inc.2 | 455,000 | 1,811 | ||||||
Micron Technology, Inc.2,4 | 339,328 | 1,639 | ||||||
1,040,291 | ||||||||
MISCELLANEOUS — 3.87% | ||||||||
Other common stocks in initial period of acquisition | 2,963,258 | |||||||
Total common stocks (cost: $44,396,026,000) | 46,219,707 | |||||||
Market value | ||||||||
Preferred stocks — 1.21% | Shares | (000 | ) | |||||
FINANCIALS — 1.04% | ||||||||
Bank of America Corp., Series K, 8.00% noncumulative5 | 102,750,000 | $ | 94,939 | |||||
Barclays Bank PLC 7.434%4,5 | 82,880,000 | 71,459 | ||||||
Vornado Realty Trust, Series I, 6.625% | 3,380,000 | 67,769 | ||||||
Washington Mutual Preferred Funding Trust IV 9.75%3,4,5 | 80,700,000 | 41,157 | ||||||
Washington Mutual Preferred Funding Trust I, Series A-1, 6.534%4,5 | 61,100,000 | 18,370 | ||||||
Fannie Mae, Series O, 7.00%4,5 | 1,818,075 | 54,997 | ||||||
MUFG Capital Finance 1 Ltd. 6.346% noncumulative5 | 46,240,000 | 39,699 | ||||||
HSBC Capital Funding LP, Series 1, 9.547% noncumulative step-up4,5 | 25,000,000 | 26,030 | ||||||
HSBC Capital Funding LP, Series 2, 10.176% noncumulative step-up4,5 | 10,000,000 | 11,900 | ||||||
BNP Paribas 7.195%4,5 | 28,500,000 | 24,567 | ||||||
BNP Paribas Capital Trust 9.003% noncumulative trust4,5 | 8,000,000 | 8,158 | ||||||
Standard Chartered PLC 6.409%4,5 | 25,500,000 | 20,396 | ||||||
Standard Chartered PLC 7.014% noncumulative redeemable preference shares4,5 | 11,000,000 | 9,267 | ||||||
Shinsei Finance II (Cayman) Ltd. 7.16% noncumulative4,5 | 45,950,000 | 29,365 | ||||||
Santander Finance Preferred S.A., Unipersonal, 6.50% | 1,524,000 | 29,337 | ||||||
Public Storage, Inc., Series F, 6.45% | 1,000,000 | 19,180 | ||||||
Public Storage, Inc., Series V, 7.50% cumulative depositary shares | 400,000 | 9,400 | ||||||
Chuo Mitsui Trust and Banking Co., Ltd. 5.506%4,5 | 31,710,000 | 26,011 | ||||||
PNC Preferred Funding Trust I 6.517%4,5 | 35,400,000 | 24,206 | ||||||
Freddie Mac, Series W, 5.66% | 1,912,800 | 22,786 | ||||||
SMFG Preferred Capital USD 1 Ltd. 6.078%4,5 | 26,770,000 | 21,963 | ||||||
AXA SA, Series B, 6.379%4,5 | 24,250,000 | 19,680 | ||||||
Mizuho Capital Investment (USD) 1 Ltd. 6.686% noncumulative4,5 | 18,758,000 | 15,816 | ||||||
QBE Capital Funding II LP 6.797%4,5 | 18,715,000 | 15,436 | ||||||
ILFC E-Capital Trust II 6.25%4,5 | 18,790,000 | 15,422 | ||||||
National Bank of Canada, Series A, 8.35% exchangeable depositary shares | 520,000 | 13,598 | ||||||
Société Générale 5.922%4,5 | 15,935,000 | 13,316 | ||||||
Lloyds TSB Group PLC 6.267%4,5 | 12,400,000 | 9,772 | ||||||
XL Capital Ltd., Series E, 6.50%5 | 12,750,000 | 8,300 | ||||||
DBS Capital Funding Corp., Series A, 7.657% noncumulative guaranteed preference shares4,5 | 6,500,000 | 6,568 | ||||||
iStar Financial, Inc., Series F, 7.80% cumulative redeemable1 | 400,000 | 4,760 | ||||||
CBG Florida REIT Corp., Series A, Class A, 7.114%4,5 | 9,000,000 | 2,570 | ||||||
IndyMac Bancorp, Inc., Series A, 8.50% noncumulative4 | 2,948,000 | 214 | ||||||
796,408 | ||||||||
MISCELLANEOUS — 0.17% | ||||||||
Other preferred stocks in initial period of acquisition | 126,350 | |||||||
Total preferred stocks (cost: $1,310,343,000) | 922,758 | |||||||
Warrants — 0.00% | ||||||||
TELECOMMUNICATION SERVICES — 0.00% | ||||||||
XO Holdings, Inc., Series A, warrants, expire 20102,3 | 18,316 | 1 | ||||||
XO Holdings, Inc., Series B, warrants, expire 20102 | 13,738 | — | ||||||
XO Holdings, Inc., Series C, warrants, expire 20102 | 13,738 | — | ||||||
GT Group Telecom Inc., warrants, expire 20102,3,4 | 15,000 | — | ||||||
Total warrants (cost: $779,000) | 1 | |||||||
Shares or | ||||||||
Convertible securities — 2.28% | principal amount | Market value(000 | ) | |||||
HEALTH CARE — 0.60% | ||||||||
Schering-Plough Corp., 6.00% convertible preferred 2010 | 982,100 | $ | 192,639 | |||||
Mylan Inc. 6.50% convertible preferred 2010 | 140,000 | 125,174 | ||||||
Medtronic, Inc. 1.625% convertible notes 2013 | $ | 45,500,000 | 49,254 | |||||
Medtronic, Inc. 1.50% convertible notes 2011 | $ | 69,900,000 | 75,317 | |||||
Incyte Corp. 3.50% convertible notes 20114 | $ | 15,000,000 | 14,850 | |||||
457,234 | ||||||||
FINANCIALS — 0.54% | ||||||||
Citigroup Inc., Series J, 7.00% noncumulative convertible preferred depositary shares3,6 | 3,570,000 | 173,730 | ||||||
Metropolitan Life Insurance Co., Class B, 6.375% convertible preferred 2008 | 4,000,000 units | 100,720 | ||||||
Fannie Mae, Series 2004-1, 5.375% convertible preferred | 1,979 | 83,118 | ||||||
Wachovia Corp., Class A, Series L, 7.50% noncumulative convertible preferred | 50,000 | 43,773 | ||||||
XL Capital Ltd. 7.00% convertible preferred 2009 | 1,320,000 units | 10,085 | ||||||
411,426 | ||||||||
MATERIALS — 0.31% | ||||||||
Cia. Vale do Rio Doce, Class A, 5.50% convertible preferred 2010 | 800,000 | 47,200 | ||||||
Cia. Vale do Rio Doce, Series 1, 5.50% convertible preferred 2010 | 2,590,000 | 148,744 | ||||||
Freeport-McMoRan Copper & Gold Inc. 6.75% convertible preferred 2010 | 290,000 | 40,666 | ||||||
236,610 | ||||||||
UTILITIES — 0.18% | ||||||||
PG&E Corp. 9.50% convertible notes 2010 | $ | 28,000,000 | 74,935 | |||||
NRG Energy, Inc. 5.75% convertible preferred 2009 | 200,000 | 62,350 | ||||||
137,285 | ||||||||
ENERGY — 0.14% | ||||||||
El Paso Corp. 4.99% convertible preferred4 | 75,000 | 108,956 | ||||||
INFORMATION TECHNOLOGY — 0.11% | ||||||||
Advanced Micro Devices, Inc. 6.00% convertible notes 2015 | $ | 92,245,000 | 48,659 | |||||
Advanced Micro Devices, Inc. 5.75% convertible notes 2012 | $ | 63,525,000 | 40,021 | |||||
88,680 | ||||||||
CONSUMER STAPLES — 0.10% | ||||||||
Bunge Ltd. 4.875% convertible preferred | 247,700 | 30,067 | ||||||
Bunge Ltd. 5.125% convertible preferred 2010 | 50,000 | 45,805 | ||||||
75,872 | ||||||||
INDUSTRIALS — 0.05% | ||||||||
UAL Corp. 4.50% convertible notes 20214 | $ | 72,600,000 | 36,653 | |||||
CONSUMER DISCRETIONARY — 0.05% | ||||||||
Ford Motor Co. 4.25% convertible notes 2036 | $ | 26,316,700 | 18,422 | |||||
Amazon.com, Inc. 4.75% convertible debentures 2009 | $ | 16,415,000 | 17,872 | |||||
36,294 | ||||||||
MISCELLANEOUS — 0.20% | ||||||||
Other convertible securities in initial period of acquisition | 151,950 | |||||||
Total convertible securities (cost: $1,949,147,000) | 1,740,960 | |||||||
Principal amount | Market value | |||||||
Bonds & notes — 27.04% | (000 | ) | (000 | ) | ||||
FINANCIALS — 4.88% | ||||||||
General Motors Acceptance Corp. 3.951% 20085 | $ | 3,700 | $ | 3,663 | ||||
Residential Capital Corp. 8.125% 2008 | 2,550 | 2,346 | ||||||
GMAC LLC 3.926% 20095 | 1,300 | 1,151 | ||||||
General Motors Acceptance Corp. 7.75% 2010 | 5,000 | 4,041 | ||||||
Residential Capital Corp. 8.375% 20105 | 71,615 | 22,559 | ||||||
Residential Capital Corp. 8.50% 20104 | 5,726 | 4,080 | ||||||
General Motors Acceptance Corp. 6.875% 2011 | 92,370 | 61,030 | ||||||
General Motors Acceptance Corp. 7.25% 2011 | 99,015 | 67,952 | ||||||
General Motors Acceptance Corp. 6.875% 2012 | 15,270 | 9,591 | ||||||
General Motors Acceptance Corp. 7.00% 2012 | 51,780 | 32,782 | ||||||
General Motors Acceptance Corp. 4.882% 20145 | 17,000 | 9,193 | ||||||
Ford Motor Credit Co. 5.625% 2008 | 5,615 | 5,548 | ||||||
Ford Motor Credit Co. 5.80% 2009 | 4,000 | 3,881 | ||||||
Ford Motor Credit Co. 7.375% 2009 | 1,200 | 1,093 | ||||||
Ford Motor Credit Co. 7.875% 2010 | 7,000 | 5,964 | ||||||
Ford Motor Credit Co. 9.75% 20105 | 81,750 | 70,613 | ||||||
Ford Motor Credit Co. 7.25% 2011 | 4,450 | 3,366 | ||||||
Ford Motor Credit Co. 7.375% 2011 | 1,800 | 1,452 | ||||||
Ford Motor Credit Co. 9.875% 2011 | 7,500 | 6,119 | ||||||
Ford Motor Credit Co. 5.538% 20125 | 97,905 | 71,035 | ||||||
Ford Motor Credit Co. 7.80% 2012 | 3,500 | 2,631 | ||||||
Ford Motor Credit Co. 8.00% 2016 | 12,375 | 8,758 | ||||||
Sumitomo Mitsui Banking Corp. 5.625% (undated)4,5 | 23,125 | 20,800 | ||||||
SMFG Preferred Capital USD 2 Ltd. 8.75% noncumulative preferred (undated) | 7,600 | 7,821 | ||||||
SMFG Preferred Capital USD 3 Ltd. 9.50% (undated)4,5 | 151,370 | 151,635 | ||||||
Countrywide Home Loans, Inc., Series M, 4.125% 2009 | 13,187 | 12,821 | ||||||
Countrywide Home Loans, Inc., Series K, 5.625% 2009 | 17,833 | 17,494 | ||||||
Countrywide Financial Corp., Series A, 4.50% 2010 | 2,695 | 2,535 | ||||||
Countrywide Home Loans, Inc., Series L, 4.00% 2011 | 2,803 | 2,608 | ||||||
Countrywide Financial Corp., Series B, 3.21% 20125 | 11,250 | 10,406 | ||||||
Countrywide Financial Corp., Series B, 5.80% 2012 | 40,943 | 38,448 | ||||||
Bank of America Corp. 4.90% 2013 | 4,000 | 3,878 | ||||||
Bank of America Corp. 5.30% 2017 | 1,815 | 1,662 | ||||||
MBNA Global Capital Funding, Series B, 3.673% 20275 | 35,000 | 28,032 | ||||||
Countrywide Financial Corp., Series A, 0% 20374,5 | 39,000 | 37,903 | ||||||
Merrill Lynch & Co., Inc., Series C, 5.45% 2013 | 23,000 | 21,356 | ||||||
Merrill Lynch & Co., Inc. 6.875% 2018 | 122,000 | 114,401 | ||||||
Liberty Mutual Group Inc. 6.50% 20354 | 21,275 | 16,657 | ||||||
Liberty Mutual Group Inc. 7.50% 20364 | 5,655 | 4,750 | ||||||
Liberty Mutual Group Inc., Series A, 7.80% 20874 | 12,030 | 8,949 | ||||||
Liberty Mutual Group Inc., Series C, 10.75% 20884,5 | 108,470 | 100,000 | ||||||
Citigroup Inc. 5.125% 2011 | 12,500 | 12,423 | ||||||
Citigroup Inc. 6.125% 2017 | 8,000 | 7,681 | ||||||
Citigroup Inc., Series E, 8.40% (undated)5 | 38,450 | 32,970 | ||||||
Citigroup Capital XXI 8.30% 20775 | 63,050 | 57,718 | ||||||
Westfield Group 5.40% 20124 | 5,000 | 4,726 | ||||||
Westfield Capital Corp. Ltd., WT Finance (Australia) Pty Ltd. and WEA Finance LLC 5.125% 20144 | 22,500 | 20,546 | ||||||
Westfield Group 5.70% 20164 | 46,105 | 41,479 | ||||||
Westfield Group 7.125% 20184 | 33,500 | 32,293 | ||||||
Realogy Corp., Term Loan, Letter of Credit, 5.313% 20135,7,8 | 6,321 | 5,147 | ||||||
Realogy Corp., Term Loan B, 5.459% 20135,7,8 | 18,751 | 15,269 | ||||||
Realogy Corp. 10.50% 2014 | 91,945 | 60,224 | ||||||
Realogy Corp. 11.00% 20149 | 18,000 | 9,855 | ||||||
Realogy Corp. 12.375% 2015 | 11,125 | 5,340 | ||||||
JPMorgan Chase & Co. 4.891% 20155 | 10,000 | 9,981 | ||||||
JPMorgan Chase Bank NA 6.00% 2017 | 6,500 | 6,323 | ||||||
Bear Stearns Companies Inc. 7.25% 2018 | 16,000 | 16,661 | ||||||
JPMorgan Chase Capital XXV, Series Y, 6.80% 2037 | 13,615 | 11,537 | ||||||
JPMorgan Chase & Co., Series I, 7.90% (undated)5 | 48,985 | 45,445 | ||||||
JPMorgan Chase Capital XXII, Series V, 6.45% 20875 | 3,100 | 2,511 | ||||||
Simon Property Group, LP 4.875% 2010 | 5,000 | 4,969 | ||||||
Simon Property Group, LP 5.375% 2011 | 32,700 | 32,323 | ||||||
Simon Property Group, LP 6.35% 2012 | 5,000 | 5,006 | ||||||
Simon Property Group, LP 5.30% 2013 | 6,000 | 5,718 | ||||||
Simon Property Group, LP 5.75% 2015 | 2,500 | 2,440 | ||||||
Simon Property Group, LP 5.25% 2016 | 25,040 | 22,156 | ||||||
Simon Property Group, LP 6.10% 2016 | 4,250 | 4,104 | ||||||
Simon Property Group, LP 5.875% 2017 | 5,825 | 5,597 | ||||||
Simon Property Group, LP 6.125% 2018 | 6,375 | 5,916 | ||||||
Lehman Brothers Holdings Inc., Series I, 3.018% 20125 | 2,195 | 1,890 | ||||||
Lehman Brothers Holdings Inc., Series G, 4.80% 2014 | 9,895 | 8,781 | ||||||
Lehman Brothers Holdings Inc., Series I, 6.20% 2014 | 3,000 | 2,764 | ||||||
Lehman Brothers Holdings Inc., Series I, 6.875% 2018 | 61,028 | 57,391 | ||||||
Lehman Brothers Holdings Inc., Series I, 7.00% 2027 | 9,891 | 8,764 | ||||||
Lehman Brothers Holdings Inc. 6.875% 2037 | 3,330 | 2,767 | ||||||
Lehman Brothers Holdings E-Capital Trust I 3.499% 20655 | 3,085 | 2,176 | ||||||
International Lease Finance Corp. 5.00% 2012 | 5,000 | 4,239 | ||||||
International Lease Finance Corp., Series R, 5.40% 2012 | 10,000 | 8,806 | ||||||
International Lease Finance Corp., Series R, 6.625% 2013 | 3,500 | 3,137 | ||||||
American General Finance Corp., Series I, 5.40% 2015 | 17,250 | 13,466 | ||||||
American General Finance Corp., Series J, 6.50% 2017 | 8,000 | 6,302 | ||||||
American General Finance Corp., Series J, 6.90% 2017 | 12,500 | 10,043 | ||||||
American International Group, Inc. 8.175% 20584,5 | 16,000 | 14,372 | ||||||
ILFC E-Capital Trust I 5.90% 20654,5 | 25,300 | 18,898 | ||||||
American International Group, Inc., Series A-1, 6.25% 20875 | 4,775 | 3,635 | ||||||
Rouse Co. 3.625% 2009 | 32,561 | 31,478 | ||||||
Rouse Co. 7.20% 2012 | 36,789 | 32,088 | ||||||
Rouse Co. 5.375% 2013 | 2,770 | 2,144 | ||||||
Rouse Co. 6.75% 20134 | 13,400 | 11,335 | ||||||
Washington Mutual, Inc. 5.55% 2010 | 3,000 | 2,401 | ||||||
Washington Mutual Bank, FA, Series 11, 6.875% 2011 | 750 | 544 | ||||||
Washington Mutual, Inc. 5.00% 2012 | 7,000 | 4,904 | ||||||
Washington Mutual Bank 3.115% 20135 | 10,000 | 6,509 | ||||||
Washington Mutual Bank, FA 5.50% 2013 | 1,585 | 1,095 | ||||||
Washington Mutual, Inc. 5.95% 2013 | 5,000 | 3,453 | ||||||
Washington Mutual Bank, FA 5.65% 2014 | 16,168 | 10,845 | ||||||
Washington Mutual Bank, FA, Series 16, 5.125% 2015 | 39,488 | 25,699 | ||||||
Washington Mutual, Inc. 6.75% 2036 | 2,589 | 1,583 | ||||||
Washington Mutual Preferred Funding II Ltd. 6.665% (undated)4,5 | 18,100 | 5,889 | ||||||
Washington Mutual Preferred Funding Trust III 6.895% (undated)3,4,5 | 36,200 | 11,946 | ||||||
CIT Group Inc. 2.787% 20095 | 1,259 | 1,161 | ||||||
CIT Group Inc. 4.125% 2009 | 1,600 | 1,421 | ||||||
CIT Group Inc. 6.875% 2009 | 15,000 | 13,837 | ||||||
CIT Group Inc. 4.25% 2010 | 9,294 | 7,993 | ||||||
CIT Group Inc. 4.75% 2010 | 4,733 | 3,863 | ||||||
CIT Group Inc. 3.075% 20115 | 2,500 | 1,902 | ||||||
CIT Group Inc. 5.60% 2011 | 100 | 81 | ||||||
CIT Group Inc. 5.40% 2012 | 50 | 39 | ||||||
CIT Group Inc. 7.625% 2012 | 17,560 | 14,926 | ||||||
CIT Group Inc. 7.75% 2012 | 865 | 726 | ||||||
CIT Group Inc. 5.40% 2013 | 9,842 | 7,426 | ||||||
CIT Group Inc. 5.00% 2014 | 6,065 | 4,433 | ||||||
CIT Group Inc. 5.125% 2014 | 235 | 171 | ||||||
CIT Group Inc. 5.85% 2016 | 685 | 489 | ||||||
CIT Group Inc. 5.65% 2017 | 2,715 | 1,942 | ||||||
CIT Group Inc. 5.80% 2036 | 12,000 | 8,274 | ||||||
CIT Group Inc. 6.10% 20675 | 13,890 | 5,512 | ||||||
iStar Financial, Inc. 3.027% 20101,5 | 3,248 | 2,551 | ||||||
iStar Financial, Inc. 5.375% 20101 | 14,010 | 11,212 | ||||||
iStar Financial, Inc. 6.00% 20101 | 6,950 | 5,458 | ||||||
iStar Financial, Inc., Series B, 5.125% 20111 | 15,000 | 11,482 | ||||||
iStar Financial, Inc. 5.65% 20111 | 3,418 | 2,548 | ||||||
iStar Financial, Inc. 5.50% 20121 | 3,700 | 2,685 | ||||||
iStar Financial, Inc., Series B, 5.95% 20131 | 808 | 572 | ||||||
iStar Financial, Inc. 6.50% 20131 | 5,133 | 3,597 | ||||||
iStar Financial, Inc. 8.625% 20131 | 35,675 | 27,684 | ||||||
iStar Financial, Inc., Series B, 5.70% 20141 | 2,918 | 2,072 | ||||||
iStar Financial, Inc. 6.05% 20151 | 4,152 | 2,868 | ||||||
HSBK (Europe) BV 7.75% 2013 | 10,275 | 9,445 | ||||||
HSBK (Europe) BV 7.75% 20134 | 2,165 | 1,990 | ||||||
HSBK (Europe) BV 7.25% 20174 | 65,640 | 55,157 | ||||||
HSBK (Europe) BV 7.25% 2017 | 3,125 | 2,626 | ||||||
Independence Community Bank Corp. 4.90% 2010 | 5,000 | 4,403 | ||||||
Sovereign Bancorp, Inc. 4.375% 20135 | 5,710 | 4,390 | ||||||
Sovereign Bancorp, Inc. 5.125% 2013 | 19,395 | 15,706 | ||||||
Independence Community Bank 3.75% 20145 | 10,990 | 7,980 | ||||||
Sovereign Bancorp, Inc. 8.75% 2018 | 38,550 | 33,484 | ||||||
TuranAlem Finance BV 8.00% 2014 | 6,005 | 4,774 | ||||||
TuranAlem Finance BV 8.50% 2015 | 22,485 | 17,763 | ||||||
TuranAlem Finance BV 8.50% 20154 | 10,000 | 7,900 | ||||||
TuranAlem Finance BV 8.25% 20374 | 35,000 | 27,169 | ||||||
TuranAlem Finance BV, Series 8, 8.25% 2037 | 5,385 | 4,180 | ||||||
UniCredito Italiano SpA 5.584% 20174,5 | 32,750 | 31,144 | ||||||
UniCredito Italiano SpA 6.00% 20174 | 25,300 | 23,751 | ||||||
HVB Funding Trust I 8.741% 20314 | 3,265 | 2,863 | ||||||
HBOS PLC 6.75% 20184 | 36,725 | 33,167 | ||||||
HBOS PLC 5.375% (undated)4,5 | 24,110 | 20,416 | ||||||
HBOS PLC 6.657% (undated)4,5 | 5,950 | 3,784 | ||||||
Capmark Financial Group Inc. 3.366% 20105 | 37,255 | 26,471 | ||||||
Capmark Financial Group Inc. 5.875% 2012 | 22,625 | 14,430 | ||||||
Capmark Financial Group Inc. 6.30% 2017 | 21,435 | 12,605 | ||||||
HSBC Finance Corp. 4.625% 2010 | 14,000 | 13,908 | ||||||
HSBC Holdings PLC 6.50% 2037 | 39,350 | 35,634 | ||||||
Midland Bank 3.438% Eurodollar note (undated)5 | 5,000 | 3,303 | ||||||
E*TRADE Financial Corp. 8.00% 2011 | 26,350 | 23,320 | ||||||
E*TRADE Financial Corp. 7.375% 2013 | 8,100 | 6,885 | ||||||
E*TRADE Financial Corp. 7.875% 2015 | 24,700 | 20,872 | ||||||
Metropolitan Life Global Funding I, 5.125% 20134 | 10,000 | 9,870 | ||||||
MetLife Capital Trust IV 7.875% 20674,5 | 21,500 | 19,878 | ||||||
MetLife Capital Trust X 9.25% 20684,5 | 19,000 | 19,324 | ||||||
Standard Chartered Bank 6.40% 20174 | 40,550 | 37,998 | ||||||
Standard Chartered Bank 3.25% Eurodollar note (undated)5 | 15,000 | 9,450 | ||||||
SLM Corp., Series A, 4.00% 2010 | 1,155 | 1,080 | ||||||
SLM Corp., Series A, 4.50% 2010 | 1,845 | 1,700 | ||||||
SLM Corp., Series A, 5.40% 2011 | 15,000 | 13,478 | ||||||
SLM Corp., Series A, 3.10% 20145 | 10,000 | 8,068 | ||||||
SLM Corp., Series A, 5.00% 2015 | 12,000 | 9,778 | ||||||
SLM Corp., Series A, 8.45% 2018 | 12,500 | 11,817 | ||||||
Royal Bank of Scotland Group PLC 6.99% (undated)4,5 | 53,575 | 44,871 | ||||||
UnumProvident Corp. 5.859% 2009 | 11,500 | 11,612 | ||||||
UnumProvident Finance Co. PLC 6.85% 20154 | 33,500 | 33,070 | ||||||
Kimco Realty Corp. 6.00% 2012 | 3,250 | 3,179 | ||||||
Kimco Realty Corp., Series C, 5.783% 2016 | 20,000 | 18,563 | ||||||
Kimco Realty Corp. 5.70% 2017 | 21,985 | 20,211 | ||||||
Hartford Financial Services Group, Inc. 6.30% 2018 | 9,250 | 9,187 | ||||||
Glen Meadow Pass-Through Trust 6.505% 20674,5 | 38,500 | 32,745 | ||||||
Santander Issuances, SA Unipersonal 3.163% 20164,5 | 15,200 | 14,189 | ||||||
Santander Issuances, SA Unipersonal 5.805% 20164,5 | 15,700 | 15,218 | ||||||
Santander Perpetual, SA Unipersonal 6.671% (undated)4,5 | 12,900 | 12,233 | ||||||
Wachovia Bank NA 5.85% 2037 | 2,545 | 1,793 | ||||||
Wachovia Bank NA 6.60% 2038 | 47,863 | 37,724 | ||||||
Charles Schwab Corp., Series A, 6.375% 2017 | 16,200 | 16,116 | ||||||
Schwab Capital Trust I 7.50% 20375 | 24,900 | 22,115 | ||||||
Hospitality Properties Trust 6.75% 2013 | 18,365 | 17,101 | ||||||
Hospitality Properties Trust 5.125% 2015 | 2,160 | 1,745 | ||||||
Hospitality Properties Trust 6.30% 2016 | 2,368 | 1,934 | ||||||
Hospitality Properties Trust 5.625% 2017 | 1,485 | 1,138 | ||||||
Hospitality Properties Trust 6.70% 2018 | 16,175 | 13,262 | ||||||
ZFS Finance (USA) Trust I 6.15% 20654,5 | 6,000 | 5,486 | ||||||
ZFS Finance (USA) Trust II 6.45% 20654,5 | 12,500 | 10,917 | ||||||
ZFS Finance (USA) Trust V 6.50% 20674,5 | 20,360 | 17,475 | ||||||
Fifth Third Capital Trust IV 6.50% 20675 | 59,500 | 32,930 | ||||||
Zions Bancorporation 5.65% 2014 | 19,000 | 14,607 | ||||||
Zions Bancorporation 5.50% 2015 | 25,335 | 16,497 | ||||||
Lazard Group LLC 7.125% 2015 | 28,540 | 25,969 | ||||||
Lazard Group LLC 6.85% 2017 | 5,712 | 4,986 | ||||||
Prudential Holdings, LLC, Series C, 8.695% 20234,7 | 22,250 | 25,458 | ||||||
Prudential Financial, Inc. 8.875% 20685 | 5,000 | 4,858 | ||||||
Northern Rock PLC 5.60% (undated)3,4,5 | 16,380 | 9,582 | ||||||
Northern Rock PLC 6.594% (undated)3,4,5 | 33,985 | 19,881 | ||||||
Korea Development Bank 5.30% 2013 | 29,500 | 29,214 | ||||||
Lincoln National Corp. 5.65% 2012 | 12,000 | 11,930 | ||||||
Lincoln National Corp. 7.00% 20665 | 17,525 | 15,406 | ||||||
Kazkommerts International BV 8.50% 20134 | 2,500 | 2,125 | ||||||
Kazkommerts International BV 7.875% 20144 | 10,000 | 8,000 | ||||||
Kazkommerts International BV 8.00% 2015 | 14,500 | 11,165 | ||||||
Kazkommerts International BV, Series 4, 7.50% 2016 | 7,500 | 5,462 | ||||||
Woori Bank 6.208% 20674,5 | 33,200 | 26,402 | ||||||
Capital One Financial Corp. 6.25% 2013 | 20,000 | 18,728 | ||||||
Capital One Capital III 7.686% 20365 | 10,000 | 7,592 | ||||||
Resona Bank, Ltd. 5.85% (undated)4,5 | 31,500 | 25,837 | ||||||
ProLogis 5.625% 2015 | 2,605 | 2,439 | ||||||
ProLogis 6.625% 2018 | 25,000 | 23,263 | ||||||
Host Marriott, LP, Series M, 7.00% 2012 | 17,650 | 16,679 | ||||||
Host Marriott, LP, Series K, 7.125% 2013 | 7,000 | 6,475 | ||||||
Host Hotels & Resorts, LP, Series S, 6.875% 2014 | 1,675 | 1,499 | ||||||
Catlin Insurance Ltd. 7.249% (undated)4,5 | 40,090 | 23,922 | ||||||
CNA Financial Corp. 6.60% 2008 | 7,130 | 7,174 | ||||||
CNA Financial Corp. 5.85% 2014 | 5,625 | 5,367 | ||||||
CNA Financial Corp. 7.25% 2023 | 11,625 | 10,724 | ||||||
Development Bank of Singapore Ltd. 7.875% 20104 | 10,000 | 10,583 | ||||||
Development Bank of Singapore Ltd. 7.125% 20114 | 5,000 | 5,284 | ||||||
DBS Bank Ltd. 3.401% 20214,5 | 7,250 | 6,454 | ||||||
Banco Bilbao Vizcaya Argentaria, SA, 5.919% (undated)5 | 23,825 | 18,196 | ||||||
Monumental Global Funding 5.50% 20134 | 10,000 | 10,041 | ||||||
Monumental Global Funding III 2.991% 20144,5 | 8,000 | 7,138 | ||||||
New York Life Global Funding 4.65% 20134 | 17,000 | 16,867 | ||||||
American Express Co. 6.15% 2017 | 12,610 | 11,972 | ||||||
American Express Co. 8.15% 2038 | 4,500 | 4,662 | ||||||
Allstate Corp., Series B, 6.125% 20675 | 8,020 | 7,221 | ||||||
Allstate Corp., Series A, 6.50% 20675 | 9,775 | 8,442 | ||||||
Goldman Sachs Group, Inc. 5.95% 2018 | 4,900 | 4,663 | ||||||
Goldman Sachs Group, Inc. 6.15% 2018 | 11,100 | 10,712 | ||||||
Mangrove Bay Pass Through Trust 6.102% 20333,4,5 | 25,980 | 14,439 | ||||||
Twin Reefs Asset Trust (XLFA), Series B, 3.459% 20794,5 | 7,200 | 729 | ||||||
Wells Fargo & Co. 4.375% 2013 | 8,500 | 8,095 | ||||||
Wells Fargo Bank, National Assn. 4.75% 2015 | 7,500 | 6,968 | ||||||
Developers Diversified Realty Corp. 4.625% 2010 | 8,695 | 8,377 | ||||||
Developers Diversified Realty Corp. 5.375% 2012 | 2,000 | 1,842 | ||||||
Developers Diversified Realty Corp. 5.50% 2015 | 5,000 | 4,390 | ||||||
North Front Pass Through Trust 5.81% 20244,5 | 10,000 | 9,301 | ||||||
Nationwide Mutual Insurance Co. 7.875% 20334 | 5,000 | 4,785 | ||||||
Genworth Financial, Inc. 6.15% 20665 | 17,665 | 13,307 | ||||||
National City Preferred Capital Trust I 12.00% (undated)3,5 | 20,000 | 13,000 | ||||||
AXA SA 6.463% (undated)4,5 | 15,000 | 12,074 | ||||||
ORIX Corp. 5.48% 2011 | 12,000 | 11,615 | ||||||
Banco Mercantil del Norte, SA 6.135% 20164 | 2,000 | 1,965 | ||||||
Banco Mercantil del Norte, SA 6.862% 20214,5 | 10,250 | 9,620 | ||||||
Downey Financial Corp. 6.50% 2014 | 18,060 | 11,398 | ||||||
Skandinaviska Enskilda Banken AB 7.50% (undated)4,5 | 10,405 | 10,414 | ||||||
Protective Life Insurance Co., Series 2005-C, 4.85% 2010 | 10,000 | 10,034 | ||||||
Principal Life Insurance Co. 5.30% 2013 | 10,000 | 9,994 | ||||||
United Overseas Bank Ltd. 5.375% 20194,5 | 10,000 | 9,491 | ||||||
Chubb Corp. 6.375% 20675 | 10,250 | 9,366 | ||||||
Credit Agricole SA 6.637% (undated)4,5 | 9,233 | 7,483 | ||||||
Nationwide Financial Services, Inc. 6.75% 20675 | 9,780 | 7,084 | ||||||
Société Générale 5.75% 20164 | 7,400 | 7,000 | ||||||
Plum Creek Timberlands, LP 5.875% 2015 | 7,145 | 6,563 | ||||||
Bank of Nova Scotia 3.188% 20853,5 | 10,000 | 6,100 | ||||||
Canadian Imperial Bank of Commerce 3.188% Eurodollar note 20853,5 | 10,000 | 6,000 | ||||||
Barclays Bank PLC 7.70% (undated)4,5 | 6,000 | 5,816 | ||||||
Assurant, Inc. 5.625% 2014 | 5,740 | 5,361 | ||||||
Silicon Valley Bank 5.70% 2012 | 5,000 | 4,613 | ||||||
ERP Operating LP 6.584% 2015 | 2,705 | 2,637 | ||||||
ERP Operating LP 5.75% 2017 | 1,660 | 1,496 | ||||||
Brandywine Operating Partnership, LP 5.75% 2012 | 4,190 | 3,932 | ||||||
SunTrust Banks, Inc. 7.25% 2018 | 4,000 | 3,877 | ||||||
KeyBank NA 5.50% 2012 | 4,000 | 3,619 | ||||||
PNC Funding Corp., Series II, 6.113% (undated)4,5 | 3,800 | 2,555 | ||||||
United Dominion Realty Trust, Inc. 5.00% 2012 | 2,500 | 2,400 | ||||||
Ambac Financial Group, Inc. 6.15% 20875 | 10,385 | 2,368 | ||||||
Shinhan Bank 5.663% 20355 | 2,075 | 1,677 | ||||||
Shinhan Bank 6.819% 20365 | 400 | 333 | ||||||
LaBranche & Co Inc. 11.00% 2012 | 1,750 | 1,796 | ||||||
BOI Capital Funding (No. 2) LP 5.571% (undated)4,5 | 2,500 | 1,677 | ||||||
3,729,473 | ||||||||
MORTGAGE-BACKED OBLIGATIONS7 — 4.39% | ||||||||
Fannie Mae, Series 2000-T5, Class B, 7.30% 2010 | 36,750 | 38,830 | ||||||
Fannie Mae 9.00% 2010 | 39 | 39 | ||||||
Fannie Mae 4.89% 2012 | 10,000 | 10,004 | ||||||
Fannie Mae 4.00% 2015 | 4,976 | 4,944 | ||||||
Fannie Mae 7.00% 2016 | 163 | 170 | ||||||
Fannie Mae 5.00% 2018 | 13,490 | 13,462 | ||||||
Fannie Mae 5.50% 2018 | 11,406 | 11,600 | ||||||
Fannie Mae 10.00% 2018 | 211 | 237 | ||||||
Fannie Mae 5.50% 2020 | 30,651 | 31,026 | ||||||
Fannie Mae 6.00% 2021 | 1,325 | 1,356 | ||||||
Fannie Mae, Series 2003-48, Class TJ, 4.50% 2022 | 21,914 | 21,644 | ||||||
Fannie Mae 9.50% 2022 | 225 | 249 | ||||||
Fannie Mae 7.50% 2023 | 7 | 7 | ||||||
Fannie Mae 10.00% 2025 | 147 | 165 | ||||||
Fannie Mae, Series 2001-4, Class GA, 10.191% 20255 | 815 | 907 | ||||||
Fannie Mae, Series 2001-4, Class NA, 11.878% 20255 | 66 | 72 | ||||||
Fannie Mae 6.00% 2026 | 18,308 | 18,548 | ||||||
Fannie Mae 6.50% 2026 | 5,730 | 5,895 | ||||||
Fannie Mae 6.50% 2026 | 889 | 915 | ||||||
Fannie Mae 7.00% 2026 | 2,371 | 2,484 | ||||||
Fannie Mae 6.50% 2027 | 1,411 | 1,452 | ||||||
Fannie Mae 6.50% 2027 | 1,404 | 1,445 | ||||||
Fannie Mae 6.50% 2027 | 1,217 | 1,252 | ||||||
Fannie Mae 6.50% 2027 | 1,053 | 1,083 | ||||||
Fannie Mae 6.00% 2028 | 27,538 | 27,830 | ||||||
Fannie Mae 7.00% 2028 | 7,102 | 7,438 | ||||||
Fannie Mae 7.00% 2028 | 1,271 | 1,331 | ||||||
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2028 | 685 | 730 | ||||||
Fannie Mae 7.50% 2031 | 293 | 314 | ||||||
Fannie Mae, Series 2001-20, Class E, 9.62% 20315 | 664 | 733 | ||||||
Fannie Mae 5.50% 2033 | 4,235 | 4,171 | ||||||
Fannie Mae 4.55% 20355 | 5,190 | 5,217 | ||||||
Fannie Mae 5.50% 2035 | 15,468 | 15,205 | ||||||
Fannie Mae 5.50% 2035 | 7,007 | 6,888 | ||||||
Fannie Mae 6.50% 2035 | 447 | 463 | ||||||
Fannie Mae 7.00% 2035 | 7,361 | 7,712 | ||||||
Fannie Mae, Series 2006-43, Class PX, 6.00% 2036 | 8,072 | 8,111 | ||||||
Fannie Mae 6.50% 2036 | 16,901 | 17,277 | ||||||
Fannie Mae 6.50% 2036 | 13,501 | 13,890 | ||||||
Fannie Mae 5.50% 2037 | 98,187 | 96,243 | ||||||
Fannie Mae, Series 2007-33, Class HE, 5.50% 2037 | 24,114 | 23,881 | ||||||
Fannie Mae 5.50% 2037 | 18,149 | 17,790 | ||||||
Fannie Mae 5.615% 20375 | 15,568 | 15,877 | ||||||
Fannie Mae 6.00% 2037 | 27,867 | 28,041 | ||||||
Fannie Mae 6.00% 2037 | 24,747 | 24,908 | ||||||
Fannie Mae 6.00% 20373 | 20,414 | 20,256 | ||||||
Fannie Mae, Series 2007-24, Class P, 6.00% 2037 | 18,305 | 18,462 | ||||||
Fannie Mae 6.00% 2037 | 16,754 | 16,858 | ||||||
Fannie Mae 6.00% 2037 | 10,514 | 10,579 | ||||||
Fannie Mae 6.00% 2037 | 2,318 | 2,318 | ||||||
Fannie Mae 6.50% 2037 | 56,665 | 57,924 | ||||||
Fannie Mae 6.50% 2037 | 17,963 | 18,553 | ||||||
Fannie Mae 6.50% 2037 | 13,703 | 14,007 | ||||||
Fannie Mae 6.50% 20373 | 13,385 | 13,589 | ||||||
Fannie Mae 6.50% 2037 | 7,320 | 7,483 | ||||||
Fannie Mae 6.50% 2037 | 6,421 | 6,632 | ||||||
Fannie Mae 6.50% 2037 | 4,069 | 4,202 | ||||||
Fannie Mae 6.792% 20375 | 1,641 | 1,695 | ||||||
Fannie Mae 7.00% 2037 | 37,785 | 39,256 | ||||||
Fannie Mae 7.00% 2037 | 32,832 | 34,378 | ||||||
Fannie Mae 7.00% 2037 | 14,571 | 15,257 | ||||||
Fannie Mae 7.00% 2037 | 14,086 | 14,635 | ||||||
Fannie Mae 7.00% 2037 | 11,593 | 12,045 | ||||||
Fannie Mae 7.00% 2037 | 10,864 | 11,287 | ||||||
Fannie Mae 7.00% 2037 | 9,029 | 9,454 | ||||||
Fannie Mae 7.00% 2037 | 8,636 | 8,972 | ||||||
Fannie Mae 7.00% 20373 | 4,701 | 4,838 | ||||||
Fannie Mae 7.00% 20373 | 3,769 | 3,879 | ||||||
Fannie Mae 7.00% 2037 | 1,868 | 1,941 | ||||||
Fannie Mae 7.00% 2037 | 1,275 | 1,335 | ||||||
Fannie Mae 7.50% 2037 | 24,100 | 25,273 | ||||||
Fannie Mae 7.50% 2037 | 4,845 | 5,081 | ||||||
Fannie Mae 7.50% 2037 | 3,404 | 3,569 | ||||||
Fannie Mae 7.50% 2037 | 1,601 | 1,679 | ||||||
Fannie Mae 7.50% 20373 | 1,466 | 1,524 | ||||||
Fannie Mae 7.50% 20373 | 747 | 777 | ||||||
Fannie Mae 8.00% 2037 | 2,035 | 2,130 | ||||||
Fannie Mae 8.00% 2037 | 1,414 | 1,479 | ||||||
Fannie Mae, Series 2001-50, Class BA, 7.00% 2041 | 1,412 | 1,485 | ||||||
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041 | 964 | 1,011 | ||||||
Fannie Mae, Series 2002-W1, Class 2A, 7.50% 2042 | 1,528 | 1,610 | ||||||
Fannie Mae 6.50% 2047 | 6,619 | 6,758 | ||||||
Fannie Mae 6.50% 2047 | 5,873 | 5,997 | ||||||
Fannie Mae 6.50% 2047 | 5,510 | 5,626 | ||||||
Fannie Mae 6.50% 2047 | 5,053 | 5,159 | ||||||
Fannie Mae 6.50% 2047 | 3,797 | 3,877 | ||||||
Fannie Mae 6.50% 2047 | 2,487 | 2,539 | ||||||
Fannie Mae 6.50% 2047 | 1,415 | 1,445 | ||||||
Fannie Mae 6.50% 2047 | 1,040 | 1,062 | ||||||
Fannie Mae 7.00% 2047 | 6,305 | 6,563 | ||||||
Fannie Mae 7.00% 2047 | 3,718 | 3,870 | ||||||
Fannie Mae 7.00% 2047 | 3,503 | 3,646 | ||||||
Fannie Mae 7.00% 2047 | 2,695 | 2,805 | ||||||
Fannie Mae 7.00% 2047 | 1,581 | 1,645 | ||||||
Freddie Mac 8.50% 2009 | 13 | 13 | ||||||
Freddie Mac 8.50% 2010 | 26 | 27 | ||||||
Freddie Mac 5.00% 2018 | 8,297 | 8,269 | ||||||
Freddie Mac 5.50% 2018 | 4,120 | 4,196 | ||||||
Freddie Mac 11.00% 2018 | 168 | 188 | ||||||
Freddie Mac, Series 2890, Class KT, 4.50% 2019 | 25,425 | 23,220 | ||||||
Freddie Mac 5.50% 2019 | 11,133 | 11,273 | ||||||
Freddie Mac, Series 178, Class Z, 9.25% 2021 | 75 | 78 | ||||||
Freddie Mac, Series 2289, Class NB, 11.421% 20225 | 163 | 184 | ||||||
Freddie Mac 5.00% 2023 | 30,839 | 30,289 | ||||||
Freddie Mac 5.00% 2023 | 28,817 | 28,303 | ||||||
Freddie Mac 5.00% 2023 | 23,777 | 23,353 | ||||||
Freddie Mac 5.00% 2023 | 16,031 | 15,745 | ||||||
Freddie Mac 5.00% 2023 | 8,441 | 8,290 | ||||||
Freddie Mac 5.00% 2023 | 4,864 | 4,777 | ||||||
Freddie Mac 6.00% 2026 | 4,777 | 4,839 | ||||||
Freddie Mac 6.00% 2027 | 8,129 | �� | 8,215 | |||||
Freddie Mac 4.636% 20355 | 6,899 | 6,928 | ||||||
Freddie Mac 5.00% 2035 | 11,980 | 11,423 | ||||||
Freddie Mac, Series 3061, Class PN, 5.50% 2035 | 5,642 | 5,714 | ||||||
Freddie Mac 5.00% 2036 | 10,423 | 9,918 | ||||||
Freddie Mac, Series 3257, Class PA, 5.50% 2036 | 23,288 | 22,998 | ||||||
Freddie Mac 7.00% 2036 | 1,689 | 1,754 | ||||||
Freddie Mac 4.50% 2037 | 953 | 873 | ||||||
Freddie Mac 4.50% 2037 | 891 | 816 | ||||||
Freddie Mac 4.50% 2037 | 856 | 784 | ||||||
Freddie Mac 4.50% 2037 | 250 | 229 | ||||||
Freddie Mac 4.50% 2037 | 106 | 97 | ||||||
Freddie Mac 4.50% 2037 | 57 | 52 | ||||||
Freddie Mac 4.50% 2037 | 33 | 31 | ||||||
Freddie Mac 5.00% 2037 | 3,352 | 3,187 | ||||||
Freddie Mac 5.442% 20375 | 11,579 | 11,674 | ||||||
Freddie Mac, Series 3286, Class JN, 5.50% 2037 | 31,417 | 30,949 | ||||||
Freddie Mac, Series 3312, Class PA, 5.50% 2037 | 23,952 | 23,607 | ||||||
Freddie Mac, Series 3318, Class JT, 5.50% 2037 | 17,491 | 17,217 | ||||||
Freddie Mac, Series 3271, Class OA, 6.00% 2037 | 22,753 | 23,359 | ||||||
Freddie Mac 6.50% 2037 | 8,261 | 8,494 | ||||||
Freddie Mac 4.50% 2038 | 25,000 | 22,889 | ||||||
Freddie Mac 4.50% 2038 | 6,200 | 5,676 | ||||||
Freddie Mac 4.50% 2038 | 4,200 | 3,845 | ||||||
Freddie Mac 4.50% 2038 | 911 | 834 | ||||||
Freddie Mac 4.50% 2038 | 96 | 88 | ||||||
Freddie Mac 4.50% 2038 | 96 | 87 | ||||||
Freddie Mac 5.935% 20385 | 4,079 | 4,092 | ||||||
Freddie Mac 6.00% 2038 | 16,985 | 17,062 | ||||||
Countrywide Alternative Loan Trust, Series 2006-J3, Class 2-A-1, 4.75% 2020 | 6,833 | 6,008 | ||||||
Countrywide Alternative Loan Trust, Series 2005-49CB, Class A-1, 5.50% 2035 | 87,384 | 78,689 | ||||||
Countrywide Alternative Loan Trust, Series 2005-40CB, Class A-1, 5.50% 2035 | 13,911 | 12,006 | ||||||
Countrywide Alternative Loan Trust, Series 2005-54CB, Class 2-A-5, 5.50% 2035 | 11,354 | 7,316 | ||||||
Countrywide Alternative Loan Trust, Series 2005-46CB, Class A-8, 5.50% 2035 | 6,846 | 6,212 | ||||||
Countrywide Alternative Loan Trust, Series 2005-64CB, Class 1-A-7, 5.50% 2035 | 5,929 | 5,664 | ||||||
Countrywide Alternative Loan Trust, Series 2005-54CB, Class 1-A-7, 5.50% 2035 | 5,705 | 5,599 | ||||||
Countrywide Alternative Loan Trust, Series 2005-50CB, Class 3-A-1, 6.00% 2035 | 12,468 | 7,925 | ||||||
Countrywide Alternative Loan Trust, Series 2004-36CB, Class 1-A-1, 6.00% 2035 | 4,033 | 3,533 | ||||||
Countrywide Alternative Loan Trust, Series 2006-6CB, Class 1-A-1, 5.50% 2036 | 7,548 | 6,569 | ||||||
Countrywide Alternative Loan Trust, Series 2006-6CB, Class 1-A-4, 5.50% 2036 | 10,000 | 6,483 | ||||||
Countrywide Alternative Loan Trust, Series 2007-J1, Class 3-A-4, 5.755% 20365 | 20,000 | 13,733 | ||||||
Countrywide Alternative Loan Trust, Series 2007-14T2, Class A-4, 2.811% 20375 | 28,180 | 18,635 | ||||||
Countrywide Alternative Loan Trust, Series 2007-2CB, Class 1-A-9, 5.75% 2037 | 15,745 | 12,691 | ||||||
Countrywide Alternative Loan Trust, Series 2007-HY4, Class 3-A-1, 5.873% 20475 | 30,585 | 18,141 | ||||||
Countrywide Alternative Loan Trust, Series 2007-HY4, Class 4-A-1, 5.946% 20475 | 17,033 | 10,228 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-S8, Class A-2, 5.00% 2018 | 56,288 | 53,744 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-S10, Class A-2, 5.00% 2018 | 34,930 | 33,352 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-S6, Class II-A-1, 5.00% 2018 | 12,379 | 11,820 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR1, Class A-6, 5.765% 20335 | 204 | 179 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY5, Class 3-A1, 5.827% 20375 | 35,492 | 29,915 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY7, Class 4-A2, 5.87% 20375 | 16,523 | 13,739 | ||||||
WaMu Mortgage Pass-Through Certificates Trust, Series 2007-HY7, Class 2-A1, 5.877% 20375 | 18,130 | 14,525 | ||||||
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class II-A-4, 6.00% 2037 | 14,000 | 10,967 | ||||||
Wells Fargo Alternative Loan Trust, Series 2007-PA4, Class III-A-1, 6.085% 20375 | 16,103 | 9,550 | ||||||
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class III-A-1, 6.25% 2037 | 33,018 | 28,858 | ||||||
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class IV-A-1, 6.50% 2037 | 44,651 | 34,744 | ||||||
Wells Fargo Alternative Loan Trust, Series 2007-PA3, Class V-A-1, 7.00% 2037 | 22,538 | 16,840 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-CIBC5, Class A-1, 4.372% 2037 | 3,899 | 3,861 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12, Class A-2, 4.739% 2037 | 1,860 | 1,855 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC11, Class A-2, 5.016% 2037 | 14,040 | 14,005 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C1, Class A-3, 4.719% 2038 | 7,000 | 6,596 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2003-ML1, Class A-1, 3.972% 2039 | 844 | 812 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3, Class A-2, 4.223% 2042 | 11,687 | 11,563 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4, Class A-2, 4.79% 2042 | 2,970 | 2,948 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-CIBC14, Class A-4, 5.481% 20445 | 3,840 | 3,672 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2006-LDP7, Class A-4, 5.875% 20455 | 27,700 | 26,773 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1, Class A-2, 4.625% 2046 | 20,000 | 19,924 | ||||||
CS First Boston Mortgage Securities Corp., Series 2005-7, Class III-A-1, 5.00% 2020 | 5,585 | 4,932 | ||||||
CS First Boston Mortgage Securities Corp., Series 2001-CKN5, Class A-4, 5.435% 2034 | 3,904 | 3,929 | ||||||
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 2034 | 2,964 | 2,299 | ||||||
CS First Boston Mortgage Securities Corp., Series 2001-CP4, Class A-4, 6.18% 2035 | 7,375 | 7,498 | ||||||
CS First Boston Mortgage Securities Corp., Series 2005-5, Class IV-A-1, 6.25% 2035 | 5,114 | 4,020 | ||||||
CS First Boston Mortgage Securities Corp., Series 2001-CK1, Class A-3, 6.38% 2035 | 9,357 | 9,601 | ||||||
CS First Boston Mortgage Securities Corp., Series 2006-2R, Class A-PO, principal only, 0% 20364 | 18,861 | 11,214 | ||||||
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-2, 4.183% 2037 | 9,951 | 9,910 | ||||||
CS First Boston Mortgage Securities Corp., Series 2005-C3, Class A-AB, 4.614% 2037 | 10,000 | 9,572 | ||||||
CS First Boston Mortgage Securities Corp., Series 2002-CKN2, Class A-3, 6.133% 2037 | 6,910 | 7,016 | ||||||
CS First Boston Mortgage Securities Corp., Series 2005-C5, Class A-2, 5.10% 20385 | 8,000 | 7,964 | ||||||
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-2FX, 5.207% 20405 | 3,050 | 3,044 | ||||||
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-3, 5.23% 20405 | 10,900 | 10,624 | ||||||
Residential Accredit Loans, Inc., Series 2003-QS16, Class A-1, 5.00% 2018 | 11,603 | 10,980 | ||||||
Residential Accredit Loans, Inc., Series 2004-QS6, Class A-1, 5.00% 2019 | 9,663 | 9,069 | ||||||
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034 | 7,010 | 4,946 | ||||||
Residential Accredit Loans, Inc., Series 2005-QS9, Class A-6, 5.50% 2035 | 100 | 65 | ||||||
Residential Accredit Loans, Inc., Series 2007-QS9, Class A-33, 6.50% 2037 | 54,671 | 39,815 | ||||||
Residential Accredit Loans, Inc., Series 2007-QS7, Class II-A-1, 6.75% 2037 | 14,490 | 10,612 | ||||||
Residential Accredit Loans, Inc., Series 2007-QS11, Class A-1, 7.00% 2037 | 15,809 | 11,810 | ||||||
American Tower Trust I, Series 2007-1A, Class A-FX, 5.42% 20374 | 7,250 | 6,863 | ||||||
American Tower Trust I, Series 2007-1A, Class B, 5.537% 20373,4 | 20,000 | 17,769 | ||||||
American Tower Trust I, Series 2007-1A, Class D, 5.957% 20373,4 | 37,375 | 30,966 | ||||||
American Tower Trust I, Series 2007-1A, Class E, 6.249% 20373,4 | 20,500 | 16,678 | ||||||
American Tower Trust I, Series 2007-1A, Class F, 6.639% 20373,4 | 5,550 | 4,679 | ||||||
CHL Mortgage Pass-Through Trust, Series 2003-56, Class 6-A-1, 4.837% 20335 | 964 | 950 | ||||||
CHL Mortgage Pass-Through Trust, Series 2004-22, Class A-2, 4.632% 20345 | 3,691 | 2,744 | ||||||
CHL Mortgage Pass-Through Trust, Series 2005-HYB8, Class 4-A-1, 5.609% 20355 | 6,308 | 4,548 | ||||||
CHL Mortgage Pass-Through Trust, Series 2007-HY5, Class 3-A-1, 6.204% 20375 | 19,337 | 16,327 | ||||||
CHL Mortgage Pass-Through Trust, Series 2007-HY5, Class 1-A-1, 5.931% 20475 | 40,165 | 33,141 | ||||||
CHL Mortgage Pass-Through Trust, Series 2007-HY4, Class 1-A-1, 6.094% 20475 | 22,517 | 19,016 | ||||||
Crown Castle Towers LLC, Series 2005-1, Class A-FX, 4.643% 20354 | 10,000 | 9,866 | ||||||
Crown Castle Towers LLC, Series 2005-1, Class D, 5.612% 20354 | 37,750 | 35,672 | ||||||
Crown Castle Towers LLC, Series 2006-1, Class E, 6.065% 20364 | 9,000 | 7,861 | ||||||
Crown Castle Towers LLC, Series 2006-1, Class F, 6.650% 20363,4 | 16,575 | 14,435 | ||||||
Crown Castle Towers LLC, Series 2006-1, Class G, 6.795% 20363,4 | 1,250 | 1,064 | ||||||
SBA CMBS Trust, Series 2005-1, Class A, 5.369% 20353,4 | 10,000 | 9,943 | ||||||
SBA CMBS Trust, Series 2005-1, Class B, 5.565% 20353,4 | 7,000 | 6,841 | ||||||
SBA CMBS Trust, Series 2006-1A, Class A, 5.314% 20364 | 12,000 | 11,654 | ||||||
SBA CMBS Trust, Series 2006-1A, Class D, 5.852% 20364 | 5,000 | 4,438 | ||||||
SBA CMBS Trust, Series 2006-1A, Class F, 6.709% 20363,4 | 18,000 | 16,297 | ||||||
SBA CMBS Trust, Series 2006-1A, Class G, 6.904% 20363,4 | 17,000 | 15,368 | ||||||
SBA CMBS Trust, Series 2006-1A, Class H, 7.389% 20363,4 | 1,670 | 1,506 | ||||||
Wachovia Bank Commercial Mortgage Trust, Series 2005-C16, Class A-PB, 4.692% 2041 | 15,000 | 14,477 | ||||||
Wachovia Bank Commercial Mortgage Trust, Series 2005-C17, Class A-2, 4.782% 2042 | 10,389 | 10,367 | ||||||
Wachovia Bank Commercial Mortgage Trust, Series 2005-C17, Class A-4, 5.083% 20425 | 5,000 | 4,748 | ||||||
Wachovia Bank Commercial Mortgage Trust, Series 2005-C22, Class A-4, 5.265% 20445 | 22,000 | 20,943 | ||||||
Wachovia Bank Commercial Mortgage Trust, Series 2006-C23, Class A-PB, 5.446% 2045 | 12,500 | 12,183 | ||||||
Tower Ventures, LLC, Series 2006-1, Class A1-FX, 5.361% 20363,4 | 12,000 | 11,856 | ||||||
Tower Ventures, LLC, Series 2006-1, Class A-2, 5.45% 20363,4 | 11,100 | 10,951 | ||||||
Tower Ventures, LLC, Series 2006-1, Class C, 5.707% 20364 | 8,000 | 7,472 | ||||||
Tower Ventures, LLC, Series 2006-1, Class D, 6.052% 20363,4 | 29,000 | 26,838 | ||||||
Wells Fargo Mortgage-backed Securities Trust, Series 2003-13, Class A-1, 4.50% 2018 | 14,906 | 13,892 | ||||||
Wells Fargo Mortgage-backed Securities Trust, Series 2004-7, Class II-A-1, 4.50% 2019 | 21,282 | 19,834 | ||||||
Wells Fargo Mortgage-backed Securities Trust, Series 2006-1, Class A-3, 5.00% 2021 | 7,945 | 7,109 | ||||||
Wells Fargo Mortgage-backed Securities Trust, Series 2006-AR15, Class A-1, 5.652% 20365 | 13,759 | 12,158 | ||||||
IndyMac INDX Mortgage Loan Trust, Series 2006-AR5, Class 2-A-1, 5.813% 20365 | 29,303 | 19,272 | ||||||
IndyMac INDX Mortgage Loan Trust, Series 2006-AR25, Class 3-A-1, 6.359% 20365 | 41,845 | 30,271 | ||||||
IndyMac IMSC Mortgage Loan Trust, Series 2007-F3, Class 2-A-1, 6.50% 2037 | 19,924 | 16,491 | ||||||
IndyMac IMSC Mortgage Loan Trust, Series 2007-F3, Class 3-A-1, 7.00% 2037 | 39,933 | 31,831 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-8, Class 3-AF, 3.18% 20365 | 7,022 | 5,252 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 5-A-1, 5.907% 20365 | 11,607 | 8,518 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 6-A, 5.919% 20365 | 27,948 | 21,800 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-12, Class 2-A1, 5.956% 20375 | 11,088 | 7,329 | ||||||
Structured Adjustable Rate Mortgage Loan Trust, Series 2007-9, Class 2-A1, 5.996% 20375 | 6,385 | 4,769 | ||||||
GE Commercial Mortgage Corp., Series 2004-C1, Class A-2, 3.915% 2038 | 5,550 | 5,503 | ||||||
GE Commercial Mortgage Corp., Series 2006-C1, Class A-4, 5.339% 20445 | 13,000 | 12,143 | ||||||
GE Commercial Mortgage Corp., Series 2005-C4, Class A-3A, 5.333% 20455 | 17,000 | 16,777 | ||||||
GE Commercial Mortgage Corp., Series 2005-C4, Class A-M, 5.333% 20455 | 1,650 | 1,560 | ||||||
Lehman Mortgage Trust, Series 2005-2, Class 3-A3, 5.50% 2035 | 8,116 | 7,735 | ||||||
Lehman Mortgage Trust, Series 2007-6, Class 2-A1, 6.891% 20375 | 25,534 | 19,077 | ||||||
Lehman Mortgage Trust, Series 2007-7, Class 6-A4, 7.00% 2037 | 7,363 | 6,473 | ||||||
Bear Stearns ARM Trust, Series 2003-9, Class III-A-2, 4.957% 20345 | 1,880 | 1,728 | ||||||
Bear Stearns ARM Trust, Series 2005-10, Class A-3, 4.65% 20355 | 20,000 | 17,905 | ||||||
Bear Stearns ARM Trust, Series 2005-6, Class I-A-1, 4.753% 20355 | 14,778 | 10,123 | ||||||
Banc of America Mortgage Securities, Inc., Series 2004-7, Class 7-A-1, 5.00% 2019 | 28,968 | 27,659 | ||||||
Banc of America Mortgage Securities, Inc., Series 2003-G, Class 2-A-1, 4.158% 20335 | 1,988 | 1,968 | ||||||
CitiMortgage Alternative Loan Trust, Series 2005-A1, Class IIA-1, 5.00% 2020 | 15,642 | 14,596 | ||||||
CitiMortgage Alternative Loan Trust, Series 2007-A3, Class IA-1, 6.00% 2037 | 20,000 | 12,858 | ||||||
Citigroup Mortgage Loan Trust, Inc., Series 2003-UST1, Class A-3, 5.00% 2018 | 6,052 | 5,627 | ||||||
Citigroup Mortgage Loan Trust, Inc., Series 2006-AR5, Class 2-A7A, 6.216% 20365 | 24,338 | 16,288 | ||||||
Citigroup Mortgage Loan Trust, Inc., Series 2007-AR5, Class 1-A2A, 5.61% 20375 | 5,820 | 4,562 | ||||||
Banc of America Commercial Mortgage Inc., Series 2001-1, Class A-2, 6.503% 2036 | 8,433 | 8,621 | ||||||
Banc of America Commercial Mortgage Inc., Series 2005-5, Class A-3B, 5.227% 20455 | 17,730 | 17,439 | ||||||
ML-CFC Commercial Mortgage Trust, Series 2006-4, Class A-3, 5.172% 20495 | 27,410 | 25,130 | ||||||
American Home Mortgage Assets Trust, Series 2007-3, Class II-2A-1, 6.25% 20375 | 30,747 | 24,542 | ||||||
Bank of America 5.50% 20124 | 22,500 | 22,861 | ||||||
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20264 | 22,129 | 21,965 | ||||||
GS Mortgage Securities Corp. II, Series 1998-C1, Class D, 7.17% 20305 | 20,000 | 19,966 | ||||||
J.P. Morgan Chase Commercial Mortgage Securities Trust, Series 2006-LDP6, Class A-4, 5.475% 20435 | 20,250 | 19,043 | ||||||
Citigroup-Deutsche Bank Commercial Mortgage Trust, Series 2006-CD3, Class A-5, 5.617% 2048 | 20,000 | 18,913 | ||||||
Morgan Stanley Mortgage Loan Trust, Series 2005-10, Class 5-A-1, 6.00% 2035 | 11,268 | 8,739 | ||||||
Morgan Stanley Mortgage Loan Trust, Series 2006-3AR, Class 3-A-1, 5.978% 20365 | 937 | 620 | ||||||
Morgan Stanley Mortgage Loan Trust, Series 2007-11AR, Class 2-A-1, 6.625% 20375 | 13,668 | 9,503 | ||||||
GSR Mortgage Loan Trust, Series 2004-2F, Class VIIA-1, 4.50% 2019 | 16,225 | 14,634 | ||||||
GSR Mortgage Loan Trust, Series 2004-15F, Class 5A-1, 5.50% 2020 | 3,979 | 3,878 | ||||||
Structured Products Asset Return Certificates Trust, Series 2001-CF1, Class A, 6.36% 20333 | 18,327 | 18,467 | ||||||
Nationwide Building Society, Series 2007-2, 5.50% 20124 | 17,500 | 17,887 | ||||||
Morgan Stanley Capital I Trust, Series 2005-HQ7, Class A-2, 5.208% 20425 | 17,875 | 17,585 | ||||||
Thornburg Mortgage Securities Trust, Series 2006-5, Class A-1, 2.581% 20465 | 17,663 | 16,370 | ||||||
Bear Stearns Asset-backed Securities I Trust, Series 2005-AC3, Class II-A-1, 5.25% 2020 | 7,410 | 6,630 | ||||||
Bear Stearns Asset-backed Securities I Trust, Series 2005-AC8, Class A-4, 5.50% 2035 | 5,531 | 4,992 | ||||||
Bear Stearns Asset-backed Securities I Trust, Series 2006-AC2, Class II-1A-1, 6.00% 2036 | 3,015 | 2,657 | ||||||
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038 | 6,925 | 6,480 | ||||||
Commercial Mortgage Trust, Series 2004-LNB2, Class A-2, 3.60% 2039 | 7,203 | 7,173 | ||||||
Chase Mortgage Finance Trust, Series 2003-S2, Class A-1, 5.00% 2018 | 13,930 | 13,300 | ||||||
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-C1, Class X, interest only, 1.011% 20314,5 | 65,829 | 689 | ||||||
Bear Stearns Commercial Mortgage Securities Inc., Series 2002-PBW1, Class A-1, 3.97% 2035 | 4,186 | 4,137 | ||||||
Bear Stearns Commercial Mortgage Securities Inc., Series 2001-TOP2, Class A-2, 6.48% 2035 | 7,665 | 7,842 | ||||||
GMAC Commercial Mortgage Securities, Inc., Series 2001-C1, Class A-2, 6.465% 2034 | 12,082 | 12,440 | ||||||
Host Marriott Pool Trust, Series 1999-HMTA, Class D, 7.97% 20154 | 10,990 | 11,368 | ||||||
First Horizon Alternative Mortgage Securities Trust, Series 2005-FA11, Class I-A-5, 5.75% 2036 | 1,230 | 1,068 | ||||||
First Horizon Alternative Mortgage Securities Trust, Series 2006-FA3, Class A-6, 6.00% 2036 | 11,120 | 10,094 | ||||||
Greenwich Capital Commercial Funding Corp., Series 2005-GG5, Class A-4-1, 5.243% 20375 | 10,000 | 9,819 | ||||||
Merrill Lynch Mortgage Investors, Inc., Series 1999-C1, Class A-2, 7.56% 2031 | 9,172 | 9,366 | ||||||
BCAP LLC Trust, Series 2006-AA2, Class A-1, 2.631% 20375 | 14,924 | 8,933 | ||||||
American General Mortgage Loan Trust, Series 2006-1, Class A-5, 5.75% 20354,5 | 10,000 | 8,861 | ||||||
Citigroup Commercial Mortgage Trust, Series 2006-C4, Class A-M, 5.724% (undated)5 | 8,000 | 7,314 | ||||||
GMAC Mortgage Loan Trust, Series 2006-AR1, Class 2-A-1, 5.635% 20365 | 7,682 | 6,616 | ||||||
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A-1, 6.079% 2033 | 946 | 949 | ||||||
GE Capital Commercial Mortgage Corp., Series 2002-3, Class A-1, 4.229% 2037 | 5,604 | 5,528 | ||||||
Bear Stearns ALT-A Trust, Series 2006-2, Class II-4-A-1, 5.886% 20365 | 10,946 | 6,419 | ||||||
Four Times Square Trust, Series 2000-4TS, Class C, 7.86% 20154 | 6,000 | 6,416 | ||||||
Banc of America Alternative Loan Trust, Series 2003-11, Class 5-A-1, 5.50% 2019 | 6,115 | 5,867 | ||||||
TBW Mortgage-Backed Trust, Series 2006-1, Class 2-A-1, 6.50% 2036 | 7,045 | 5,478 | ||||||
Chase Commercial Mortgage Securities Corp., Series 2000-1, Class A-2, 7.757% 2032 | 5,247 | 5,440 | ||||||
American Home Mortgage Investment Trust, Series 2004-1, Class III-A, 3.28% 2044 | 5,063 | 4,818 | ||||||
Government National Mortgage Assn. 9.50% 2009 | 71 | 72 | ||||||
Government National Mortgage Assn. 9.00% 2016 | 37 | 40 | ||||||
Government National Mortgage Assn. 8.50% 2017 | 8 | 9 | ||||||
Government National Mortgage Assn. 8.50% 2017 | 3 | 3 | ||||||
Government National Mortgage Assn. 10.00% 2020 | 768 | 875 | ||||||
Government National Mortgage Assn. 8.50% 2021 | 177 | 193 | ||||||
Government National Mortgage Assn. 8.50% 2021 | 33 | 36 | ||||||
Government National Mortgage Assn. 8.50% 2021 | 6 | 6 | ||||||
Government National Mortgage Assn. 9.50% 2021 | 98 | 110 | ||||||
Government National Mortgage Assn. 10.00% 2021 | 1,106 | 1,259 | ||||||
Government National Mortgage Assn. 10.00% 2025 | 1,059 | 1,200 | ||||||
Harborview Mortgage Loan Trust, Series 2006-6, Class 1A, 5.30% 20365 | 3,575 | 2,251 | ||||||
J.P. Morgan Mortgage Trust, Series 2006-A3, Class 3-A-3, 5.735% 20365 | 2,000 | 1,597 | ||||||
Structured Asset Securities Corp., Series 1998-RF2, Class A, 8.486% 20274,5 | 246 | 245 | ||||||
Structured Asset Securities Corp., Series 1998-RF1, Class A, 8.737% 20274,5 | 199 | 199 | ||||||
Financial Asset Securitization, Inc., Series 1997-NAM1, Class B-1, 7.75% 2027 | 289 | 273 | ||||||
3,357,605 | ||||||||
CONSUMER DISCRETIONARY — 3.80% | ||||||||
CCH II, LLC and CCH II Capital Corp. 10.25% 2010 | 39,050 | 37,390 | ||||||
Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corp. 13.50% 2011 | 4,375 | 3,456 | ||||||
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.00% 20124 | 53,548 | 51,272 | ||||||
CCO Holdings, LLC and CCO Holdings Capital Corp. 8.75% 2013 | 23,350 | 21,715 | ||||||
Charter Communications Operating, LLC, Term Loan B, 4.80% 20145,7,8 | 50,073 | 44,062 | ||||||
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.375% 20144 | 20,000 | 19,100 | ||||||
Charter Communications Operating, LLC, Term Loan B, 8.50% 20145,7,8 | 26,933 | 26,658 | ||||||
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 10.875% 20144 | 24,550 | 25,655 | ||||||
CCH I, LLC and CCH I Capital Corp. 11.00% 2015 | 30,575 | 23,313 | ||||||
Allison Transmission Holdings, Inc., Term Loan B, 5.22% 20145,7,8 | 116,222 | 104,618 | ||||||
Allison Transmission Holdings, Inc. 11.00% 20154 | 25,800 | 23,478 | ||||||
Allison Transmission Holdings, Inc. 11.25% 20154,9 | 76,450 | 66,894 | ||||||
Univision Communications, Inc., Second Lien Term Loan B, 4.963% 20095,7,8 | 3,325 | 3,183 | ||||||
Univision Communications Inc. 7.85% 2011 | 20,325 | 18,851 | ||||||
Univision Communications, Inc., First Lien Term Loan B, 5.049% 20145,7,8 | 62,284 | 50,995 | ||||||
Univision Communications Inc. 9.75% 20154,9 | 132,950 | 102,039 | ||||||
General Motors Nova Scotia Finance Co. 6.85% 2008 | 1,675 | 1,650 | ||||||
General Motors Corp. 7.20% 2011 | 68,695 | 45,339 | ||||||
General Motors Corp. 7.125% 2013 | 56,695 | 32,458 | ||||||
General Motors Corp. 7.70% 2016 | 4,000 | 2,070 | ||||||
General Motors Corp. 8.80% 2021 | 28,470 | 14,377 | ||||||
General Motors Corp. 9.40% 2021 | 9,100 | 4,823 | ||||||
General Motors Corp. 8.25% 2023 | 7,000 | 3,500 | ||||||
Comcast Cable Communications, Inc. 6.20% 2008 | 49,000 | 49,143 | ||||||
Comcast Corp. 3.088% 20095 | 1,250 | 1,236 | ||||||
Comcast Cable Communications, Inc. 6.75% 2011 | 3,300 | 3,416 | ||||||
Comcast Cable Communications, Inc. 7.125% 2013 | 8,100 | 8,566 | ||||||
Comcast Corp. 5.85% 2015 | 13,200 | 12,927 | ||||||
Comcast Corp. 5.90% 2016 | 8,475 | 8,294 | ||||||
Comcast Corp. 6.45% 2037 | 10,000 | 9,184 | ||||||
Comcast Corp. 6.95% 2037 | 10,275 | 9,926 | ||||||
Michaels Stores, Inc., Term Loan B, 4.75% 20135,7,8 | 24,199 | 19,535 | ||||||
Michaels Stores, Inc. 10.00% 2014 | 81,100 | 65,488 | ||||||
Michaels Stores, Inc. 0%/13.00% 201610 | 14,450 | 5,997 | ||||||
Michaels Stores, Inc. 11.375% 2016 | 6,800 | 4,828 | ||||||
Time Warner Inc. 2.915% 20095 | 14,700 | 14,369 | ||||||
Time Warner Inc. 5.50% 2011 | 1,000 | 987 | ||||||
AOL Time Warner Inc. 6.875% 2012 | 11,950 | 12,215 | ||||||
Time Warner Companies, Inc. 9.125% 2013 | 5,000 | 5,470 | ||||||
Time Warner Inc. 5.875% 2016 | 18,900 | 17,741 | ||||||
Time Warner Companies, Inc. 7.25% 2017 | 9,500 | 9,514 | ||||||
AOL Time Warner Inc. 7.625% 2031 | 10,750 | 10,684 | ||||||
Time Warner Inc. 6.50% 2036 | 18,000 | 15,650 | ||||||
K. Hovnanian Enterprises, Inc. 8.875% 2012 | 10,515 | 7,098 | ||||||
K. Hovnanian Enterprises, Inc. 7.75% 2013 | 14,265 | 8,488 | ||||||
K. Hovnanian Enterprises, Inc. 6.375% 2014 | 7,891 | 4,971 | ||||||
K. Hovnanian Enterprises, Inc. 6.50% 2014 | 25,796 | 16,380 | ||||||
K. Hovnanian Enterprises, Inc. 6.25% 2015 | 28,080 | 17,550 | ||||||
K. Hovnanian Enterprises, Inc. 6.25% 2016 | 16,170 | 9,945 | ||||||
K. Hovnanian Enterprises, Inc. 7.50% 2016 | 14,930 | 9,481 | ||||||
K. Hovnanian Enterprises, Inc. 8.625% 2017 | 17,250 | 11,644 | ||||||
Federated Retail Holdings, Inc. 5.35% 2012 | 7,000 | 6,505 | ||||||
Macy’s Retail Holdings, Inc. 7.875% 2015 | 23,875 | 23,766 | ||||||
Federated Retail Holdings, Inc. 5.90% 2016 | 48,915 | 42,471 | ||||||
Federated Retail Holdings, Inc. 6.375% 2037 | 14,300 | 10,829 | ||||||
MGM MIRAGE 6.00% 2009 | 35,100 | 34,398 | ||||||
Mandalay Resort Group 6.50% 2009 | 7,122 | 6,997 | ||||||
MGM MIRAGE 8.50% 2010 | 22,830 | 22,088 | ||||||
MGM MIRAGE 6.75% 2012 | 9,150 | 8,075 | ||||||
MGM MIRAGE 6.75% 2013 | 8,200 | 6,888 | ||||||
MGM MIRAGE 7.50% 2016 | 4,000 | 3,210 | ||||||
Time Warner Cable Inc. 5.40% 2012 | 25,000 | 24,870 | ||||||
Time Warner Cable Inc. 6.75% 2018 | 22,500 | 22,731 | ||||||
Time Warner Cable Inc. 6.55% 2037 | 25,000 | 23,089 | ||||||
Tenneco Automotive Inc., Series B, 10.25% 2013 | 5,144 | 5,350 | ||||||
Tenneco Automotive Inc. 8.625% 2014 | 54,300 | 45,883 | ||||||
Tenneco Inc. 8.125% 2015 | 19,550 | 17,497 | ||||||
KB Home 5.875% 2015 | 33,545 | 27,675 | ||||||
KB Home 6.25% 2015 | 40,920 | 34,270 | ||||||
Sally Holdings LLC and Sally Capital Inc. 9.25% 2014 | 61,025 | 59,804 | ||||||
NTL Cable PLC 8.75% 2014 | 30,564 | 28,654 | ||||||
NTL Cable PLC 9.125% 2016 | 32,000 | 29,760 | ||||||
Toys “R” Us, Inc. 7.625% 2011 | 45,375 | 40,497 | ||||||
Toys “R” Us-Delaware, Inc., Term Loan B, 6.969% 20125,7,8 | 14,940 | 14,324 | ||||||
Liberty Media Corp. 7.75% 2009 | 10,950 | 11,100 | ||||||
Liberty Media Corp. 7.875% 2009 | 28,350 | 28,771 | ||||||
Liberty Media Corp. 8.25% 2030 | 13,870 | 12,356 | ||||||
News America Holdings Inc. 8.00% 2016 | 6,000 | 6,639 | ||||||
News America Inc. 7.25% 2018 | 1,405 | 1,495 | ||||||
News America Holdings Inc. 8.25% 2018 | 7,000 | 7,867 | ||||||
News America Inc. 6.40% 2035 | 750 | 697 | ||||||
News America Inc. 6.65% 2037 | 18,000 | 17,149 | ||||||
News America Inc. 6.75% 2038 | 15,000 | 15,325 | ||||||
J.C. Penney Co., Inc. 8.00% 2010 | 35,705 | 36,791 | ||||||
J.C. Penney Co., Inc. 9.00% 2012 | 10,506 | 11,266 | ||||||
Cox Communications, Inc. 7.875% 2009 | 12,500 | 12,777 | ||||||
Cox Communications, Inc. 4.625% 2010 | 8,250 | 8,197 | ||||||
Cox Communications, Inc. 7.75% 2010 | 10,000 | 10,520 | ||||||
Cox Communications, Inc. 5.45% 2014 | 13,500 | 13,073 | ||||||
TL Acquisitions, Inc., Term Loan B, 4.96% 20145,7,8 | 15,268 | 13,564 | ||||||
Thomson Learning 0%/13.25% 20154,10 | 2,250 | 1,654 | ||||||
Thomson Learning 10.50% 20154 | 33,050 | 29,249 | ||||||
CanWest Media Inc., Series B, 8.00% 2012 | 47,573 | 41,626 | ||||||
CanWest MediaWorks Inc. 9.25% 20154 | 3,150 | 2,457 | ||||||
Delphi Automotive Systems Corp. 6.50% 200911 | 54,466 | 9,395 | ||||||
Delphi Corp. 6.50% 201311 | 72,580 | 12,701 | ||||||
Delphi Automotive Systems Corp. 6.55% 200611 | 17,105 | 2,951 | ||||||
Delphi Automotive Systems Corp. 7.125% 202911 | 104,355 | 18,001 | ||||||
Delphi Trust I 8.25% 203311 | 30,031 | 375 | ||||||
Quebecor Media Inc. 7.75% 2016 | 30,450 | 28,242 | ||||||
Quebecor Media Inc. 7.75% 2016 | 11,195 | 10,383 | ||||||
Radio One, Inc., Series B, 8.875% 2011 | 25,630 | 21,657 | ||||||
Radio One, Inc. 6.375% 2013 | 22,565 | 16,585 | ||||||
Ford Motor Co. 9.50% 2011 | 1,000 | 800 | ||||||
Ford Motor Co., Term Loan B, 5.46% 20135,7,8 | 39,631 | 31,347 | ||||||
Ford Motor Co. 6.50% 2018 | 5,742 | 2,900 | ||||||
Ford Motor Co. 8.875% 2022 | 1,320 | 680 | ||||||
Mohegan Tribal Gaming Authority 6.375% 2009 | 19,780 | 19,187 | ||||||
Mohegan Tribal Gaming Authority 8.00% 2012 | 2,100 | 1,774 | ||||||
Mohegan Tribal Gaming Authority 6.125% 2013 | 4,175 | 3,653 | ||||||
Mohegan Tribal Gaming Authority 7.125% 2014 | 4,950 | 3,613 | ||||||
Mohegan Tribal Gaming Authority 6.875% 2015 | 8,775 | 6,186 | ||||||
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. 6.625% 2014 | 36,535 | 33,247 | ||||||
Boyd Gaming Corp. 7.75% 2012 | 28,400 | 23,714 | ||||||
Boyd Gaming Corp. 6.75% 2014 | 8,004 | 5,923 | ||||||
Technical Olympic USA, Inc. 9.00% 201011 | 10,675 | 5,711 | ||||||
Technical Olympic USA, Inc. 9.00% 201011 | 7,815 | 4,181 | ||||||
Technical Olympic USA, Inc. 9.25% 20114,11 | 33,175 | 17,417 | ||||||
Harrah’s Operating Co., Inc. 5.50% 2010 | 26,375 | 23,078 | ||||||
Harrah’s Operating Co., Inc. 5.625% 2015 | 8,800 | 4,048 | ||||||
Royal Caribbean Cruises Ltd. 8.75% 2011 | 26,850 | 26,582 | ||||||
Dollar General Corp., Term Loan B2, 5.213% 20145,7,8 | 2,575 | 2,347 | ||||||
Dollar General Corp. 10.625% 2015 | 16,975 | 17,187 | ||||||
Dollar General Corp. 11.875% 20175,9 | 6,200 | 5,890 | ||||||
Standard Pacific Corp. 5.125% 2009 | 13,750 | 13,509 | ||||||
Standard Pacific Corp. 6.875% 2011 | 3,385 | 2,962 | ||||||
Standard Pacific Corp. 6.25% 2014 | 7,050 | 5,675 | ||||||
Standard Pacific Corp. 7.00% 2015 | 3,830 | 3,069 | ||||||
American Media Operations, Inc., Series B, 10.25% 2009 | 17,230 | 13,569 | ||||||
American Media Operations, Inc., Series B, 10.25% 20094 | 582 | 458 | ||||||
American Media Operations, Inc. 8.875% 2011 | 8,930 | 7,055 | ||||||
American Media Operations, Inc. 8.875% 20114 | 325 | 257 | ||||||
Vidéotron Ltée 6.875% 2014 | 16,599 | 16,101 | ||||||
Vidéotron Ltée 6.375% 2015 | 4,905 | 4,574 | ||||||
Target Corp. 6.00% 2018 | 11,350 | 11,468 | ||||||
Target Corp. 7.00% 2038 | 8,750 | 9,011 | ||||||
Seminole Tribe of Florida 6.535% 20204,7 | 10,000 | 9,728 | ||||||
Seminole Tribe of Florida 7.804% 20204,7 | 10,750 | 10,672 | ||||||
Kabel Deutschland GmbH 10.625% 2014 | 19,675 | 20,216 | ||||||
Meritage Corp. 7.00% 2014 | 5,335 | 4,295 | ||||||
Meritage Homes Corp. 6.25% 2015 | 10,125 | 7,895 | ||||||
Meritage Corp. 7.731% 20173,4 | 12,500 | 7,725 | ||||||
Warner Music Group 7.375% 2014 | 25,000 | 19,875 | ||||||
Thomson Reuters Corp. 5.95% 2013 | 3,625 | 3,667 | ||||||
Thomson Reuters Corp. 6.50% 2018 | 15,760 | 15,810 | ||||||
Gap, Inc. 10.05% 20085 | 18,840 | 19,283 | ||||||
Clear Channel Communications, Inc. 7.65% 2010 | 15,000 | 14,107 | ||||||
Clear Channel Communications, Inc. 5.50% 2014 | 9,170 | 5,003 | ||||||
Beazer Homes USA, Inc. 8.375% 2012 | 11,298 | 8,586 | ||||||
Beazer Homes USA, Inc. 8.125% 2016 | 13,050 | 9,314 | ||||||
Viacom Inc. 5.75% 2011 | 3,000 | 2,974 | ||||||
Viacom Inc. 6.25% 2016 | 14,250 | 13,613 | ||||||
CSC Holdings, Inc., Series B, 8.125% 2009 | 14,025 | 14,200 | ||||||
CSC Holdings, Inc., Series B, 6.75% 2012 | 400 | 383 | ||||||
Cablevision Systems Corp., Series B, 8.00% 2012 | 2,050 | 1,973 | ||||||
Cooper-Standard Automotive Inc. 7.00% 2012 | 19,150 | 15,895 | ||||||
DaimlerChrysler North America Holding Corp. 7.75% 2011 | 15,000 | 15,747 | ||||||
DaimlerChrysler Financial Services Americas LLC, First Lien Term Loan, 6.78% 20125,7,8 | 19,004 | 15,743 | ||||||
Dex Media West LLC, Dex Media West Finance Co., Series B, 8.50% 2010 | 5,000 | 4,825 | ||||||
Dex Media, Inc., Series B, 0%/9.00% 201310 | 9,000 | 5,445 | ||||||
R.H. Donnelley Corp., Series A-2, 6.875% 2013 | 5,825 | 2,912 | ||||||
R.H. Donnelley Corp., Series A-3, 8.875% 2016 | 4,325 | 2,108 | ||||||
LBI Media, Inc. 8.50% 20174 | 19,605 | 15,120 | ||||||
AMC Entertainment Inc., Series B, 8.625% 2012 | 14,650 | 15,089 | ||||||
DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. 8.375% 2013 | 12,187 | 12,644 | ||||||
Claire’s Stores, Inc., Term Loan B, 5.399% 20145,7,8 | 7,079 | 4,863 | ||||||
Claire’s Stores, Inc. 9.25% 2015 | 16,875 | 7,678 | ||||||
D.R. Horton, Inc. 8.00% 2009 | 12,225 | 12,225 | ||||||
Bon-Ton Department Stores, Inc. 10.25% 2014 | 21,925 | 11,730 | ||||||
Neiman Marcus Group, Inc. 9.00% 20159 | 11,300 | 11,131 | ||||||
McGraw-Hill Companies, Inc. 5.375% 2012 | 5,170 | 5,182 | ||||||
McGraw-Hill Companies, Inc. 5.90% 2017 | 6,000 | 5,909 | ||||||
Hanesbrands Inc., Series B, 6.508% 20145 | 12,300 | 11,009 | ||||||
Centex Corp. 5.25% 2015 | 7,315 | 5,669 | ||||||
Centex Corp. 6.50% 2016 | 6,375 | 5,259 | ||||||
Education Management LLC and Education Management Finance Corp. 8.75% 2014 | 7,775 | 7,036 | ||||||
Education Management LLC and Education Management Finance Corp. 10.25% 2016 | 4,370 | 3,813 | ||||||
Young Broadcasting Inc. 10.00% 2011 | 21,855 | 10,545 | ||||||
Young Broadcasting Inc. 8.75% 2014 | 535 | 231 | ||||||
YUM! Brands, Inc. 7.70% 2012 | 10,000 | 10,643 | ||||||
Seneca Gaming Corp. 7.25% 2012 | 8,000 | 7,340 | ||||||
Seneca Gaming Corp., Series B, 7.25% 2012 | 3,275 | 3,005 | ||||||
Gaylord Entertainment Co. 8.00% 2013 | 6,804 | 6,362 | ||||||
Gaylord Entertainment Co. 6.75% 2014 | 4,000 | 3,570 | ||||||
Staples, Inc. 7.375% 2012 | 9,000 | 9,247 | ||||||
Visteon Corp. 7.00% 2014 | 18,000 | 9,045 | ||||||
William Lyon Homes, Inc. 7.625% 2012 | 17,000 | 6,970 | ||||||
William Lyon Homes, Inc. 10.75% 2013 | 2,500 | 1,088 | ||||||
Marriott International, Inc., Series J, 5.625% 2013 | 5,000 | 4,693 | ||||||
Marriott International, Inc., Series I, 6.375% 2017 | 3,500 | 3,198 | ||||||
Ryland Group, Inc. 5.375% 2012 | 9,000 | 7,830 | ||||||
ERAC USA Finance Co. 7.00% 20374 | 10,000 | 7,628 | ||||||
Regal Cinemas Corp., Series B, 9.375% 20123 | 7,250 | 7,427 | ||||||
Pinnacle Entertainment, Inc. 7.50% 2015 | 9,400 | 7,050 | ||||||
Sealy Mattress Co. 8.25% 2014 | 7,250 | 6,054 | ||||||
Warnaco, Inc. 8.875% 2013 | 5,625 | 5,857 | ||||||
MDC Holdings, Inc. 7.00% 2012 | 5,000 | 5,017 | ||||||
Pulte Homes, Inc. 7.875% 2011 | 5,000 | 4,850 | ||||||
Morris Publishing Group, LLC and Morris Publishing Finance Co., Series B, 7.00% 2013 | 9,015 | 4,733 | ||||||
Fox Acquisition LLC 13.375% 20164 | 4,175 | 4,222 | ||||||
Local T.V. Finance LLC 9.25% 20154,9 | 4,775 | 3,653 | ||||||
Cinemark USA, Inc., Term Loan B, 4.44% 20135,7,8 | 3,734 | 3,549 | ||||||
Walt Disney Co. 5.70% 2011 | 1,000 | 1,047 | ||||||
Walt Disney Co. 5.625% 2016 | 2,000 | 2,029 | ||||||
Goodyear Tire & Rubber Co. 6.678% 20095 | 3,000 | 2,985 | ||||||
WCI Communities, Inc. 9.125% 2012 | 7,300 | 2,884 | ||||||
Toll Brothers, Inc. 4.95% 2014 | 2,000 | 1,710 | ||||||
2,908,103 | ||||||||
BONDS & NOTES OF U.S. GOVERNMENT & GOVERNMENT AGENCIES — 2.44% | ||||||||
U.S. Treasury 3.625% 2009 | 10,000 | 10,130 | ||||||
U.S. Treasury 3.875% 2009 | 14,000 | 14,180 | ||||||
U.S. Treasury 4.50% 2011 | 16,165 | 16,975 | ||||||
U.S. Treasury 4.625% 2011 | 122,750 | 129,415 | ||||||
U.S. Treasury 4.875% 2011 | 26,115 | 27,571 | ||||||
U.S. Treasury 4.125% 2012 | 15,250 | 15,853 | ||||||
U.S. Treasury 4.25% 2012 | 112,490 | 117,614 | ||||||
U.S. Treasury 4.875% 2012 | 25,000 | 26,661 | ||||||
U.S. Treasury 3.625% 2013 | 163,125 | 166,012 | ||||||
U.S. Treasury 4.25% 2013 | 242,057 | 253,346 | ||||||
U.S. Treasury Principal Strip 0% 2013 | 10,000 | 8,365 | ||||||
U.S. Treasury 4.25% 2014 | 91,000 | 95,362 | ||||||
U.S. Treasury Principal Strip 0% 2014 | 51,560 | 42,106 | ||||||
U.S. Treasury Principal Strip 0% 2014 | 46,030 | 38,006 | ||||||
U.S. Treasury Principal Strip 0% 2014 | 30,000 | 24,375 | ||||||
U.S. Treasury Principal Strip 0% 2014 | 10,000 | 8,298 | ||||||
U.S. Treasury Principal Strip 0% 2014 | 10,000 | 8,076 | ||||||
U.S. Treasury Principal Strip 0% 2014 | 10,000 | 7,986 | ||||||
U.S. Treasury 4.50% 2017 | 106,250 | 110,853 | ||||||
U.S. Treasury 8.875% 2017 | 7,500 | 10,216 | ||||||
U.S. Treasury 3.50% 2018 | 28,650 | 27,598 | ||||||
U.S. Treasury 6.00% 2026 | 20,000 | 23,305 | ||||||
U.S. Treasury 5.50% 2028 | 35,000 | 38,773 | ||||||
U.S. Treasury 3.375% 20323,12 | 11,134 | 13,776 | ||||||
U.S. Treasury 4.50% 2036 | 31,940 | 31,334 | ||||||
U.S. Treasury Principal Strip 0% 2037 | 45,000 | 12,007 | ||||||
Fannie Mae 5.00% 2011 | 39,865 | 41,409 | ||||||
Fannie Mae 6.25% 2011 | 5,400 | 5,517 | ||||||
Fannie Mae 5.25% 2012 | 74,000 | 71,778 | ||||||
Fannie Mae 4.625% 2013 | 80,000 | 75,941 | ||||||
Fannie Mae 5.25% 2016 | 27,000 | 28,268 | ||||||
Fannie Mae 6.25% 2029 | 71,000 | 80,481 | ||||||
Freddie Mac 5.25% 2011 | 83,915 | 87,713 | ||||||
Freddie Mac 5.00% 2018 | 170,000 | 150,921 | ||||||
Federal Home Loan Bank 5.125% 2013 | 18,000 | 18,866 | ||||||
CoBank ACB 7.875% 20184 | 10,000 | 9,752 | ||||||
CoBank ACB 3.376% 20224,5 | 8,315 | 6,622 | ||||||
Federal Agricultural Mortgage Corp. 4.875% 20114 | 1,000 | 1,029 | ||||||
United States Agency for International Development, Republic of Egypt 4.45% 2015 | 10,000 | 10,155 | ||||||
Federal Agricultural Mortgage Corp. 5.50% 20114 | 3,000 | 3,127 | ||||||
1,869,772 | ||||||||
TELECOMMUNICATION SERVICES — 2.04% | ||||||||
U S WEST Communications, Inc. 5.625% 2008 | 18,020 | 18,020 | ||||||
Qwest Capital Funding, Inc. 7.90% 2010 | 32,510 | 32,347 | ||||||
Qwest Capital Funding, Inc. 7.25% 2011 | 136,770 | 130,957 | ||||||
Qwest Communications International Inc. 7.25% 2011 | 30,025 | 28,899 | ||||||
Qwest Corp. 8.875% 2012 | 12,400 | 12,431 | ||||||
Qwest Capital Funding, Inc. 7.625% 2021 | 7,225 | 5,888 | ||||||
U S WEST Capital Funding, Inc. 6.875% 2028 | 21,175 | 15,881 | ||||||
Qwest Capital Funding, Inc. 7.75% 2031 | 39,335 | 30,878 | ||||||
Sprint Capital Corp. 6.375% 2009 | 1,925 | 1,925 | ||||||
Nextel Communications, Inc., Series E, 6.875% 2013 | 103,850 | 81,577 | ||||||
Nextel Communications, Inc., Series F, 5.95% 2014 | 43,000 | 32,716 | ||||||
Nextel Communications, Inc., Series D, 7.375% 2015 | 134,905 | 103,941 | ||||||
Sprint Nextel Corp. 6.00% 2016 | 5,000 | 4,219 | ||||||
Sprint Capital Corp. 6.90% 2019 | 5,120 | 4,373 | ||||||
Sprint Capital Corp. 8.75% 2032 | 33,085 | 29,597 | ||||||
Centennial Communications Corp. 8.541% 20135 | 47,300 | 47,359 | ||||||
Centennial Communications Corp. 10.00% 2013 | 2,250 | 2,351 | ||||||
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC 10.125% 2013 | 17,500 | 18,287 | ||||||
Centennial Communications Corp., Centennial Cellular Operating Co. LLC and | ||||||||
Centennial Puerto Rico Operations Corp. 8.125% 20145 | 60,275 | 61,179 | ||||||
American Tower Corp. 7.125% 2012 | 59,775 | 61,120 | ||||||
American Tower Corp. 7.50% 2012 | 43,300 | 44,274 | ||||||
American Tower Corp. 7.00% 20174 | 11,135 | 11,163 | ||||||
SBC Communications Inc. 6.25% 2011 | 5,500 | 5,693 | ||||||
AT&T Corp. 7.30% 20115 | 14,789 | 15,736 | ||||||
AT&T Wireless Services, Inc. 8.125% 2012 | 16,935 | 18,598 | ||||||
AT&T Inc. 4.95% 2013 | 8,750 | 8,761 | ||||||
SBC Communications Inc. 5.10% 2014 | 38,500 | 37,794 | ||||||
SBC Communications Inc. 5.625% 2016 | 10,000 | 9,917 | ||||||
AT&T Corp. 8.00% 20315 | 5,000 | 5,695 | ||||||
AT&T Inc. 6.40% 2038 | 7,000 | 6,686 | ||||||
Verizon Global Funding Corp. 4.90% 2015 | 3,560 | 3,368 | ||||||
Verizon Communications Inc. 5.50% 2017 | 27,000 | 25,945 | ||||||
Verizon Communications Inc. 6.10% 2018 | 11,300 | 11,294 | ||||||
Verizon Global Funding Corp. 7.75% 2030 | 6,705 | 6,988 | ||||||
Verizon Communications Inc. 6.25% 2037 | 50,000 | 46,245 | ||||||
Verizon Communications Inc. 6.90% 2038 | 7,000 | 6,963 | ||||||
Windstream Corp. 8.125% 2013 | 7,500 | 7,613 | ||||||
Valor Telecommunications Enterprises, LLC and Valor Telecommunications Enterprises Finance Corp. 7.75% 2015 | 17,125 | 17,287 | ||||||
Windstream Corp. 8.625% 2016 | 63,950 | 65,069 | ||||||
Telecom Italia Capital SA 4.00% 2010 | 1,470 | 1,448 | ||||||
Telecom Italia Capital SA 4.875% 2010 | 1,630 | 1,619 | ||||||
Telecom Italia Capital SA, Series B, 5.25% 2013 | 2,700 | 2,551 | ||||||
Telecom Italia Capital SA 5.25% 2015 | 14,000 | 12,781 | ||||||
Telecom Italia Capital SA 6.999% 2018 | 24,400 | 24,299 | ||||||
Telecom Italia Capital SA 7.20% 2036 | 18,400 | 17,287 | ||||||
Telecom Italia Capital SA 7.721% 2038 | 30,100 | 29,715 | ||||||
Cricket Communications, Inc. 9.375% 2014 | 35,450 | 34,918 | ||||||
Cricket Communications, Inc. 10.875% 2014 | 19,000 | 18,715 | ||||||
Rural Cellular Corp. 8.25% 2012 | 4,000 | 4,110 | ||||||
Rural Cellular Corp. 8.623% 20125 | 11,590 | 11,735 | ||||||
Rural Cellular Corp. 5.682% 20135 | 36,300 | 36,482 | ||||||
British Telecommunications PLC 8.625% 20105 | 2,000 | 2,149 | ||||||
British Telecommunications PLC 5.15% 2013 | 8,750 | 8,567 | ||||||
British Telecommunications PLC 5.95% 2018 | 33,250 | 32,050 | ||||||
British Telecommunications PLC 9.125% 20305 | 5,800 | 6,898 | ||||||
MetroPCS Wireless, Inc., Term Loan B, 5.125% 20135,7,8 | 13,802 | 13,181 | ||||||
MetroPCS Wireless, Inc. 9.25% 2014 | 17,300 | 16,868 | ||||||
Rogers Wireless Inc. 7.25% 2012 | 9,175 | 9,677 | ||||||
Rogers Wireless Inc. 7.50% 2015 | 16,750 | 17,770 | ||||||
Cincinnati Bell Inc. 7.25% 2013 | 26,275 | 25,487 | ||||||
Vodafone Group PLC 5.625% 2017 | 9,200 | 8,849 | ||||||
Vodafone Group PLC 6.15% 2037 | 16,560 | 14,960 | ||||||
ALLTEL Corp. 7.00% 2012 | 7,885 | 8,122 | ||||||
ALLTEL Corp., Term Loan B3, 5.208% 20155,7,8 | 13,027 | 13,008 | ||||||
France Télécom 7.75% 20115 | 15,500 | 16,517 | ||||||
Singapore Telecommunications Ltd. 6.375% 20114 | 6,000 | 6,306 | ||||||
Singapore Telecommunications Ltd. 6.375% 2011 | 4,825 | 5,071 | ||||||
Singapore Telecommunications Ltd. 7.375% 20314 | 3,800 | 4,128 | ||||||
Koninklijke KPN NV 8.00% 2010 | 10,000 | 10,591 | ||||||
Koninklijke KPN NV 8.375% 2030 | 3,020 | 3,453 | ||||||
Hawaiian Telcom Communications, Inc. 8.486% 20135 | 15,920 | 5,652 | ||||||
Hawaiian Telcom Communications, Inc. 9.75% 2013 | 16,945 | 6,270 | ||||||
Hawaiian Telcom Communications, Inc., Series B, 12.50% 2015 | 7,075 | 1,521 | ||||||
Intelsat, Ltd. 6.50% 2013 | 14,850 | 11,063 | ||||||
PCCW-HKT Capital No. 3 Ltd. 5.25% 20154 | 12,000 | 10,582 | ||||||
Level 3 Financing, Inc. 9.25% 2014 | 8,000 | 7,320 | ||||||
NTELOS Inc., Term Loan B, 5.27% 20115,7,8 | 5,806 | 5,712 | ||||||
Embarq Corp. 6.738% 2013 | 5,000 | 4,819 | ||||||
Trilogy International Partners LLC, Term Loan B, 6.301% 20125,7,8 | 5,250 | 4,750 | ||||||
Nordic Telephone Co. Holding ApS 8.875% 20164 | 4,000 | 3,880 | ||||||
Citizens Communications Co. 7.875% 2027 | 3,725 | 3,297 | ||||||
1,563,212 | ||||||||
INFORMATION TECHNOLOGY — 1.76% | ||||||||
NXP BV and NXP Funding LLC 5.541% 20135 | 114,045 | 89,953 | ||||||
NXP BV and NXP Funding LLC 7.875% 2014 | 120,850 | 101,212 | ||||||
NXP BV and NXP Funding LLC 9.50% 2015 | 204,515 | 142,138 | ||||||
Freescale Semiconductor, Inc., Term Loan B, 4.221% 20135,7,8 | 10,013 | 9,052 | ||||||
Freescale Semiconductor, Inc. 6.651% 20145 | 7,900 | 6,221 | ||||||
Freescale Semiconductor, Inc. 8.875% 2014 | 56,382 | 48,066 | ||||||
Freescale Semiconductor, Inc. 9.125% 20149 | 123,175 | 100,388 | ||||||
Freescale Semiconductor, Inc. 10.125% 2016 | 152,550 | 120,514 | ||||||
Electronic Data Systems Corp. 7.125% 2009 | 10,315 | 10,606 | ||||||
Electronic Data Systems Corp., Series B, 6.50% 20135 | 117,650 | 123,793 | ||||||
Electronic Data Systems Corp. 7.45% 2029 | 10,555 | 11,092 | ||||||
Sanmina-SCI Corp. 5.526% 20104,5 | 1,732 | 1,723 | ||||||
Sanmina-SCI Corp. 6.75% 2013 | 25,085 | 22,451 | ||||||
Sanmina-SCI Corp. 5.526% 20144,5 | 15,500 | 14,492 | ||||||
Sanmina-SCI Corp. 8.125% 2016 | 66,275 | 59,316 | ||||||
Jabil Circuit, Inc. 5.875% 2010 | 50,640 | 49,627 | ||||||
Jabil Circuit, Inc. 8.25% 2018 | 39,225 | 39,225 | ||||||
First Data Corp., Term Loan B2, 5.552% 20145,7,8 | 60,964 | 56,177 | ||||||
First Data Corp., Bridge Loan, 9.375% 20153,5,7,8 | 10,000 | 8,662 | ||||||
SunGard Data Systems Inc. 3.75% 2009 | 11,050 | 10,953 | ||||||
SunGard Data Systems Inc. 9.125% 2013 | 48,900 | 50,245 | ||||||
KLA-Tencor Corp. 6.90% 2018 | 50,500 | 49,428 | ||||||
Western Union Co. 2.869% 20085 | 17,000 | 16,992 | ||||||
Western Union Co. 5.40% 2011 | 5,000 | 5,002 | ||||||
Western Union Co. 5.93% 2016 | 24,000 | 23,238 | ||||||
Celestica Inc. 7.875% 2011 | 16,540 | 16,705 | ||||||
Celestica Inc. 7.625% 2013 | 23,320 | 22,387 | ||||||
Ceridian Corp. 11.25% 20154 | 28,425 | 25,938 | ||||||
National Semiconductor Corp. 6.15% 2012 | 18,750 | 18,995 | ||||||
Hughes Communications, Inc. 9.50% 2014 | 15,750 | 16,006 | ||||||
Sensata Technologies BV, Term Loan B, 4.543% 20135,7,8 | 3,792 | 3,324 | ||||||
Sensata Technologies BV 8.00% 20145 | 11,000 | 9,405 | ||||||
Serena Software, Inc. 10.375% 2016 | 13,430 | 12,473 | ||||||
Oracle Corp. 5.75% 2018 | 10,000 | 9,995 | ||||||
Hewlett-Packard Co. 5.50% 2018 | 9,500 | 9,351 | ||||||
Nortel Networks Ltd. 7.041% 20115 | 6,500 | 6,159 | ||||||
Nortel Networks Ltd. 10.125% 2013 | 3,250 | 3,189 | ||||||
Xerox Corp. 7.125% 2010 | 9,000 | 9,299 | ||||||
MagnaChip Semiconductor SA and MagnaChip Semiconductor Finance Co. 8.00% 2014 | 30,005 | 8,851 | ||||||
1,342,643 | ||||||||
INDUSTRIALS — 1.64% | ||||||||
Continental Airlines, Inc. 8.75% 2011 | 29,250 | 20,548 | ||||||
Continental Airlines, Inc., Series 2000-2, Class A-2, 7.487% 20127 | 11,700 | 11,335 | ||||||
Continental Airlines, Inc., Series 1997-1, Class A, 7.461% 20167 | 9,988 | 8,290 | ||||||
Continental Airlines, Inc., Series 2001-1, Class B, 7.373% 20177 | 5,741 | 5,368 | ||||||
Continental Airlines, Inc., Series 1998-1, Class B, 6.748% 20187 | 1,318 | 1,028 | ||||||
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 20197 | 17,650 | 16,061 | ||||||
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 20197 | 5,013 | 4,362 | ||||||
Continental Airlines, Inc., Series 2000-2, Class B, 8.307% 20197 | 862 | 718 | ||||||
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20207 | 16,036 | 14,192 | ||||||
Continental Airlines, Inc., Series 1999-1, Class B, 6.795% 20207 | 837 | 651 | ||||||
Continental Airlines, Inc., Series 2003-ERJ3, Class A, 7.875% 20207 | 11,719 | 7,973 | ||||||
Continental Airlines, Inc., Series 1999-2, Class A-1, 7.256% 20217 | 705 | 627 | ||||||
Continental Airlines, Inc., Series 1999-2, Class B, 7.566% 20217 | 5,408 | 4,555 | ||||||
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20227 | 14,448 | 12,588 | ||||||
Continental Airlines, Inc., Series 2007-1, Class B, 6.903% 20227 | 11,380 | 8,023 | ||||||
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.707% 20227 | 2,704 | 2,361 | ||||||
Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 20227 | 6,823 | 6,425 | ||||||
Continental Airlines, Inc., Series 2000-1, Class B, 8.388% 20227 | 5,852 | 4,684 | ||||||
Nielsen Finance LLC, Term Loan B, 4.734% 20135,7,8 | 5,984 | 5,570 | ||||||
Nielsen Finance LLC and Nielsen Finance Co. 10.00% 2014 | 55,100 | 55,789 | ||||||
Nielsen Finance LLC and Nielsen Finance Co. 10.00% 20144 | 10,100 | 10,226 | ||||||
Nielsen Finance LLC and Nielsen Finance Co. 0%/12.50% 201610 | 64,150 | 44,103 | ||||||
United Air Lines, Inc., Series 2001-1, Class A-2, 6.201% 20107 | 4,717 | 4,670 | ||||||
United Air Lines, Inc., Series 2000-2, Class B, 7.811% 20117,11 | 5,302 | 6,031 | ||||||
United Air Lines, Inc., Series 2000-2, Class A-2, 7.186% 20127 | 35,060 | 34,720 | ||||||
United Air Lines, Inc., Term Loan B, 4.50% 20145,7,8 | 43,236 | 31,604 | ||||||
United Air Lines, Inc., Series 2001-1, Class A-1, 6.071% 20147 | 3,499 | 3,442 | ||||||
United Air Lines, Inc., Series 2001-1, Class A-3, 6.602% 20157 | 1,853 | 1,823 | ||||||
United Air Lines, Inc., Series 1996-A2, 7.87% 20197,11 | 2,453 | 849 | ||||||
United Air Lines, Inc., Series 2007-1, Class B, 7.336% 20214,7 | 5,225 | 3,932 | ||||||
United Air Lines, Inc., Series 2007-1, Class A, 6.636% 20247 | 9,330 | 7,634 | ||||||
US Investigations Services, Inc., Term Loan B, 5.551% 20155,7,8 | 18,857 | 17,474 | ||||||
US Investigations Services, Inc. 10.50% 20154 | 41,545 | 37,806 | ||||||
US Investigations Services, Inc. 11.75% 20164 | 15,775 | 13,488 | ||||||
Delta Air Lines, Inc., Series 2000-1, Class A-2, 7.57% 20127 | 8,050 | 7,587 | ||||||
Delta Air Lines, Inc., Series 2002-1, Class G-2, MBIA insured, 6.417% 20147 | 46,035 | 40,050 | ||||||
Delta Air Lines, Inc., Series 1992-A2, 9.20% 20147,11 | 3,345 | 3,173 | ||||||
Delta Air Lines, Inc., Series 2002-1, Class G-1, MBIA insured, 6.718% 20247 | 19,813 | 16,197 | ||||||
Ashtead Group PLC 8.625% 20154 | 15,700 | 13,816 | ||||||
Ashtead Capital, Inc. 9.00% 20164 | 58,885 | 52,113 | ||||||
American Airlines, Inc., Series 2003-1, Class G, AMBAC insured, 3.857% 20127 | 1,404 | 1,275 | ||||||
American Airlines, Inc., Series 2001-1, Class A-2, 6.817% 20127 | 17,745 | 13,575 | ||||||
American Airlines, Inc., Series 2001-2, Class A-1, 6.978% 20127 | 2,349 | 2,220 | ||||||
American Airlines, Inc., Series 2001-2, Class B, 8.608% 20127 | 4,595 | 3,722 | ||||||
AMR Corp. 9.00% 2012 | 11,000 | 6,545 | ||||||
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 20137 | 17,138 | 15,767 | ||||||
AMR Corp. 9.00% 2016 | 2,000 | 1,190 | ||||||
American Airlines, Inc., Series 2001-1, Class B, 7.377% 20197 | 14,806 | 7,616 | ||||||
AMR Corp. 10.00% 20213 | 3,000 | 1,800 | ||||||
American Airlines, Inc., Series 2001-1, Class A-1, 6.977% 20227 | 7,423 | 5,642 | ||||||
Allied Waste North America, Inc., Series B, 6.50% 2010 | 12,000 | 12,060 | ||||||
Allied Waste North America, Inc., Series B, 5.75% 2011 | 18,800 | 18,659 | ||||||
Allied Waste North America, Inc. 7.875% 2013 | 2,500 | 2,556 | ||||||
Allied Waste North America, Inc., Series B, 6.125% 2014 | 2,500 | 2,356 | ||||||
Allied Waste North America, Inc., Series B, 7.375% 2014 | 4,500 | 4,511 | ||||||
Allied Waste North America, Inc. 7.25% 2015 | 8,500 | 8,436 | ||||||
Allied Waste North America, Inc. 6.875% 2017 | 7,250 | 6,996 | ||||||
Northwest Airlines, Inc., Term Loan B, 6.31% 20133,5,7,8 | 6,397 | 5,461 | ||||||
Northwest Airlines, Inc., Term Loan A, 4.56% 20183,5,7,8 | 60,067 | 48,880 | ||||||
General Electric Capital Corp., Series A, 4.80% 2013 | 13,000 | 12,818 | ||||||
General Electric Co. 5.25% 2017 | 11,250 | 10,919 | ||||||
General Electric Capital Corp., Series A, 3.164% 20265 | 25,000 | 21,326 | ||||||
ARAMARK Corp., Term Loan B, 4.676% 20145,7,8 | 12,047 | 11,503 | ||||||
ARAMARK Corp., Term Loan B, Letter of Credit, 4.676% 20145,7,8 | 765 | 731 | ||||||
ARAMARK Corp. 6.373% 20155 | 8,050 | 7,446 | ||||||
ARAMARK Corp. 8.50% 2015 | 24,575 | 24,606 | ||||||
Sequa Corp., Term Loan B, 6.06% 20145,7,8 | 38,982 | 36,972 | ||||||
Koninklijke Philips Electronics NV 5.75% 2018 | 26,000 | 25,723 | ||||||
Koninklijke Philips Electronics NV 6.875% 2038 | 10,700 | 11,036 | ||||||
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class B, 7.156% 20114,7 | 24,805 | 25,693 | ||||||
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class G, MBIA insured, 6.664% 20134,7 | 10,092 | 10,420 | ||||||
Hutchison Whampoa International Ltd. 7.00% 20114 | 5,000 | 5,246 | ||||||
Hutchison Whampoa International Ltd. 6.50% 20134 | 25,000 | 25,689 | ||||||
Waste Management, Inc. 6.50% 2008 | 5,000 | 5,041 | ||||||
Waste Management, Inc. 5.00% 2014 | 7,000 | 6,493 | ||||||
WMX Technologies, Inc. 7.10% 2026 | 10,125 | 9,795 | ||||||
NTK Holdings Inc. 0%/10.75% 20147,10 | 13,500 | 5,636 | ||||||
THL Buildco, Inc. 8.50% 2014 | 27,325 | 15,609 | ||||||
Hawker Beechcraft Acquisition Co., LLC 8.50% 2015 | 5,300 | 5,327 | ||||||
Hawker Beechcraft Acquisition Co., LLC 8.875% 20159 | 11,530 | 11,444 | ||||||
Hawker Beechcraft Acquisition Co., LLC 9.75% 2017 | 4,105 | 4,074 | ||||||
USG Corp. 6.30% 2016 | 10,000 | 8,000 | ||||||
USG Corp. 8.00% 2018 | 14,650 | 12,746 | ||||||
CSX Corp. 5.75% 2013 | 4,960 | 4,824 | ||||||
CSX Corp. 6.25% 2015 | 3,460 | 3,357 | ||||||
CSX Corp. 6.15% 2037 | 11,800 | 9,539 | ||||||
American Standard Inc. 7.625% 2010 | 16,501 | 17,290 | ||||||
Navios Maritime Holdings Inc. 9.50% 2014 | 15,825 | 15,548 | ||||||
CEVA Group PLC 10.00% 20144 | 8,825 | 8,957 | ||||||
CEVA Group PLC, Bridge Loan, 7.208% 20153,5,7,8 | 6,691 | 4,516 | ||||||
Atrium Companies, Inc., Term Loan B, 6.54% 20125,7,8 | 14,002 | 11,528 | ||||||
ACIH, Inc. 11.50% 20124,11 | 6,125 | 1,868 | ||||||
Caterpillar Financial Services Corp., Series F, 2.865% 20085 | 400 | 400 | ||||||
Caterpillar Financial Services Corp., Series F, 4.85% 2012 | 5,000 | 5,056 | ||||||
Caterpillar Financial Services Corp., Series F, 5.50% 2016 | 5,000 | 5,027 | ||||||
Caterpillar Financial Services Corp., Series F, 5.85% 2017 | 2,000 | 2,047 | ||||||
Atlas Copco AB 5.60% 20174 | 11,405 | 11,091 | ||||||
DRS Technologies, Inc. 6.875% 2013 | 275 | 278 | ||||||
DRS Technologies, Inc. 6.625% 2016 | 10,250 | 10,404 | ||||||
DRS Technologies, Inc. 7.625% 2018 | 200 | 209 | ||||||
B/E Aerospace 8.50% 2018 | 9,525 | 9,858 | ||||||
Norfolk Southern Corp. 5.75% 2018 | 10,000 | 9,788 | ||||||
Union Pacific Corp. 5.75% 2017 | 2,065 | 2,009 | ||||||
Union Pacific Corp. 5.70% 2018 | 8,000 | 7,744 | ||||||
Tyco International Group SA 6.125% 2008 | 8,000 | 8,020 | ||||||
Tyco International Group SA 7.00% 20194 | 600 | 602 | ||||||
Tyco International Group SA 6.875% 20214 | 1,000 | 994 | ||||||
DynCorp International and DIV Capital Corp., Series A, 9.50% 2013 | 5,230 | 5,184 | ||||||
DynCorp International and DIV Capital Corp. 9.50% 20134 | 4,445 | 4,412 | ||||||
John Deere Capital Corp. 4.875% 2009 | 4,000 | 4,043 | ||||||
John Deere Capital Corp. 5.40% 2011 | 2,000 | 2,039 | ||||||
John Deere Capital Corp. 5.10% 2013 | 500 | 504 | ||||||
John Deere Capital Corp., Series D, 5.50% 2017 | 2,500 | 2,485 | ||||||
Accuride Corp. 8.50% 2015 | 12,100 | 8,289 | ||||||
RBS Global, Inc. and Rexnord LLC 9.50% 2014 | 7,800 | 7,488 | ||||||
RBS Global, Inc. and Rexnord LLC 8.875% 2016 | 575 | 529 | ||||||
Esco Corp. 6.651% 20134,5 | 3,725 | 3,520 | ||||||
Esco Corp. 8.625% 20134 | 4,000 | 4,010 | ||||||
Esterline Technologies Corp. 6.625% 2017 | 7,500 | 7,200 | ||||||
RSC Holdings III, LLC, Second Lien Term Loan B, 6.30% 20133,5,7,8 | 8,105 | 6,970 | ||||||
TransDigm Inc. 7.75% 2014 | 6,865 | 6,728 | ||||||
H&E Equipment Services, Inc. 8.375% 2016 | 6,800 | 5,882 | ||||||
Lockheed Martin Corp. 4.121% 2013 | 5,000 | 4,843 | ||||||
BNSF Funding Trust I 6.613% 20555 | 2,910 | 2,580 | ||||||
Canadian National Railway Co. 4.95% 2014 | 2,000 | 1,990 | ||||||
Alion Science and Technology Corp. 10.25% 2015 | 1,740 | 1,211 | ||||||
1,256,307 | ||||||||
HEALTH CARE — 1.28% | ||||||||
Tenet Healthcare Corp. 6.375% 2011 | 3,345 | 3,312 | ||||||
Tenet Healthcare Corp. 7.375% 2013 | 3,495 | 3,303 | ||||||
Tenet Healthcare Corp. 9.875% 2014 | 140,615 | 142,021 | ||||||
Tenet Healthcare Corp. 9.25% 2015 | 31,845 | 31,805 | ||||||
HealthSouth Corp. 9.133% 20145 | 41,025 | 41,948 | ||||||
HealthSouth Corp. 10.75% 2016 | 85,700 | 92,127 | ||||||
Boston Scientific Corp. 5.45% 2014 | 10,400 | 9,724 | ||||||
Boston Scientific Corp. 6.40% 2016 | 43,898 | 42,362 | ||||||
Boston Scientific Corp. 5.125% 2017 | 12,785 | 11,251 | ||||||
Boston Scientific Corp. 7.00% 2035 | 54,145 | 48,730 | ||||||
HCA Inc., Term Loan B, 5.051% 20135,7,8 | 87,153 | 82,110 | ||||||
HCA Inc. 9.125% 2014 | 2,090 | 2,158 | ||||||
HCA Inc. 9.25% 2016 | 3,650 | 3,769 | ||||||
HCA Inc. 9.625% 20169 | 3,400 | 3,511 | ||||||
VWR Funding, Inc. 10.25% 20155,9 | 73,210 | 67,536 | ||||||
PTS Acquisition Corp. 9.50% 20159 | 55,635 | 49,376 | ||||||
Warner Chilcott Corp. 8.75% 2015 | 44,424 | 45,312 | ||||||
Elan Finance PLC and Elan Finance Corp. 7.75% 2011 | 4,250 | 4,091 | ||||||
Elan Finance PLC and Elan Finance Corp. 6.807% 20135 | 13,570 | 12,417 | ||||||
Elan Finance PLC and Elan Finance Corp. 8.875% 2013 | 19,350 | 18,963 | ||||||
Mylan Inc., Term Loan B, 6.063% 20145,7,8 | 33,452 | 33,175 | ||||||
Cardinal Health, Inc. 4.00% 2015 | 25,000 | 22,713 | ||||||
Cardinal Health, Inc. 5.80% 2016 | 10,000 | 9,773 | ||||||
GlaxoSmithKline Capital Inc. 4.85% 2013 | 13,500 | 13,513 | ||||||
GlaxoSmithKline Capital Inc. 6.375% 2038 | 16,850 | 16,825 | ||||||
Team Finance LLC and Health Finance Corp. 11.25% 2013 | 26,600 | 27,797 | ||||||
Coventry Health Care, Inc. 6.30% 2014 | 26,750 | 25,078 | ||||||
UnitedHealth Group Inc. 4.875% 2013 | 3,500 | 3,370 | ||||||
UnitedHealth Group Inc. 4.875% 2013 | 1,500 | 1,454 | ||||||
UnitedHealth Group 6.00% 2017 | 12,430 | 11,811 | ||||||
CHS/Community Health Systems, Inc. 8.875% 2015 | 15,665 | 15,861 | ||||||
Hospira, Inc. 3.281% 20105 | 10,000 | 9,617 | ||||||
Hospira, Inc. 5.55% 2012 | 5,295 | 5,243 | ||||||
Surgical Care Affiliates, Inc. 8.875% 20154,9 | 5,250 | 4,607 | ||||||
Surgical Care Affiliates, Inc. 10.00% 20174 | 9,500 | 7,363 | ||||||
Humana Inc. 6.45% 2016 | 10,000 | 9,513 | ||||||
AMR HoldCo, Inc. and EmCare HoldCo, Inc. 10.00% 2015 | 8,565 | 9,036 | ||||||
Symbion Inc. 11.00% 20154,5,9 | 10,250 | 7,790 | ||||||
AstraZeneca PLC 5.40% 2012 | 7,000 | 7,205 | ||||||
Viant Holdings Inc. 10.125% 20174 | 8,335 | 7,085 | ||||||
Biogen Idec Inc. 6.00% 2013 | 6,000 | 5,965 | ||||||
Abbott Laboratories 5.60% 2017 | 4,615 | 4,663 | ||||||
Bausch & Lomb Inc. 9.875% 20154 | 2,250 | 2,312 | ||||||
977,595 | ||||||||
UTILITIES — 1.28% | ||||||||
Texas Competitive Electric Holdings Co. LLC, Term Loan B2, 6.234% 20145,7,8 | 19,377 | 18,250 | ||||||
Texas Competitive Electric Holdings Co. LLC 10.25% 20154 | 164,804 | 165,628 | ||||||
Texas Competitive Electric Holdings Co. LLC, Series B, 10.25% 20154 | 60,355 | 60,657 | ||||||
Edison Mission Energy 7.50% 2013 | 32,525 | 32,850 | ||||||
Edison Mission Energy 7.75% 2016 | 35,300 | 35,565 | ||||||
Midwest Generation, LLC, Series B, 8.56% 20167 | 11,625 | 12,002 | ||||||
Edison Mission Energy 7.00% 2017 | 19,525 | 18,549 | ||||||
Edison Mission Energy 7.20% 2019 | 39,450 | 37,280 | ||||||
Homer City Funding LLC 8.734% 20267 | 12,561 | 13,378 | ||||||
Edison Mission Energy 7.625% 2027 | 20,850 | 18,452 | ||||||
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2006-E, 5.55% 2037 | 6,500 | 6,002 | ||||||
AES Corp. 9.50% 2009 | 39,554 | 40,741 | ||||||
AES Corp. 9.375% 2010 | 7,502 | 7,933 | ||||||
AES Corp. 8.75% 20134 | 38,707 | 40,352 | ||||||
AES Corp. 7.75% 2015 | 10,000 | 9,925 | ||||||
AES Red Oak, LLC, Series A, 8.54% 20197 | 36,423 | 37,880 | ||||||
AES Red Oak, LLC, Series B, 9.20% 20297 | 7,000 | 7,280 | ||||||
NRG Energy, Inc. 7.25% 2014 | 24,525 | 23,973 | ||||||
NRG Energy, Inc. 7.375% 2016 | 76,625 | 74,518 | ||||||
Nevada Power Co., General and Refunding Mortgage Bonds, Series A, 8.25% 2011 | 6,000 | 6,481 | ||||||
Sierra Pacific Power Co., General and Refunding Mortgage Notes, Series H, 6.25% 2012 | 7,500 | 7,704 | ||||||
Nevada Power Co., General and Refunding Mortgage Notes, Series I, 6.50% 2012 | 4,250 | 4,401 | ||||||
Sierra Pacific Resources 8.625% 2014 | 2,725 | 2,868 | ||||||
Nevada Power Co., General and Refunding Mortgage Notes, Series L, 5.875% 2015 | 5,675 | 5,627 | ||||||
Nevada Power Co., General and Refunding Mortgage Notes, Series M, 5.95% 2016 | 13,700 | 13,578 | ||||||
Sierra Pacific Resources 6.75% 2017 | 3,000 | 2,940 | ||||||
MidAmerican Energy Co. 4.65% 2014 | 3,200 | 3,083 | ||||||
MidAmerican Energy Co. 5.95% 2017 | 7,000 | 7,118 | ||||||
MidAmerican Energy Holdings Co. 5.75% 20184 | 20,000 | 19,742 | ||||||
MidAmerican Energy Holdings Co. 6.125% 2036 | 10,150 | 9,563 | ||||||
MidAmerican Energy Holdings Co. 6.50% 2037 | 3,000 | 2,968 | ||||||
Israel Electric Corp. Ltd. 7.95% 20114 | 5,000 | 5,175 | ||||||
Israel Electric Corp. Ltd. 7.70% 20184 | 22,500 | 22,879 | ||||||
Israel Electric Corp. Ltd. 7.25% 20194 | 1,800 | 1,786 | ||||||
Israel Electric Corp. Ltd. 8.10% 20963,4 | 4,905 | 4,391 | ||||||
Cilcorp Inc. 8.70% 2009 | 9,000 | 9,168 | ||||||
Union Electric Co. 5.40% 2016 | 8,000 | 7,482 | ||||||
Illinois Power Co. 6.125% 2017 | 5,000 | 4,768 | ||||||
Cilcorp Inc. 9.375% 2029 | 3,000 | 3,109 | ||||||
E.ON International Finance BV 5.80% 20184 | 23,000 | 22,635 | ||||||
Abu Dhabi National Energy Co. PJSC (TAQA) 5.875% 20164 | 11,000 | 10,361 | ||||||
Abu Dhabi National Energy Co. PJSC (TAQA) 6.165% 20174 | 4,000 | 3,813 | ||||||
Abu Dhabi National Energy Co. PJSC (TAQA) 6.50% 20364 | 7,750 | 6,763 | ||||||
National Rural Utilities Cooperative Finance Corp. 5.50% 2013 | 19,000 | 19,335 | ||||||
PSEG Power LLC 7.75% 2011 | 7,500 | 7,898 | ||||||
PSEG Power LLC 5.00% 2014 | 10,000 | 9,500 | ||||||
Public Service Electric and Gas Co., Series E, 5.30% 2018 | 1,000 | 977 | ||||||
Virginia Electric and Power Co., Series 2003-A, 4.75% 2013 | 6,000 | 5,887 | ||||||
Virginia Electric and Power Co., Series B, 5.95% 2017 | 4,500 | 4,539 | ||||||
Virginia Electric and Power Co., Series A, 6.00% 2037 | 2,250 | 2,096 | ||||||
Mirant Americas Generation, Inc. 8.30% 2011 | 9,000 | 9,225 | ||||||
Veolia Environnement 5.25% 2013 | 8,000 | 8,001 | ||||||
AES Panamá, SA 6.35% 20164 | 8,000 | 7,947 | ||||||
Appalachian Power Co., Series M, 5.55% 2011 | 3,000 | 3,015 | ||||||
Ohio Power Co., Series K, 6.00% 2016 | 5,000 | 4,921 | ||||||
Alabama Power Co., Series R, 4.70% 2010 | 1,250 | 1,270 | ||||||
Alabama Power Co., Series Q, 5.50% 2017 | 5,000 | 5,015 | ||||||
Carolina Power & Light Co. d/b/a Progress Energy Carolinas, Inc. 5.25% 2015 | 6,000 | 6,016 | ||||||
Duke Energy Corp., First and Refunding Mortgage Bonds, 5.30% 2015 | 5,000 | 5,016 | ||||||
PECO Energy Co., First and Refunding Mortgage Bonds, 5.70% 2037 | 5,000 | 4,560 | ||||||
Constellation Energy Group, Inc. 6.125% 2009 | 4,030 | 4,070 | ||||||
Pacific Gas and Electric Co., First Mortgage Bonds, 6.05% 2034 | 4,000 | 3,786 | ||||||
Enersis SA 7.375% 2014 | 3,500 | 3,728 | ||||||
Intergen Power 9.00% 20174 | 3,000 | 3,075 | ||||||
Centerpoint Energy, Inc., Series B, 6.85% 2015 | 3,000 | 3,056 | ||||||
Tri-State Generation and Transmission Assn. Inc., Pass Through Trust, Series 2003-A, 6.04% 20184,7 | 2,461 | 2,461 | ||||||
FPL Energy National Wind Portfolio, LLC 6.125% 20194,7 | 1,754 | 1,746 | ||||||
976,758 | ||||||||
ENERGY — 1.14% | ||||||||
Ras Laffan Liquefied Natural Gas Co. Ltd. 3.437% 20094,7 | 15,892 | 15,928 | ||||||
Ras Laffan Liquefied Natural Gas Co. Ltd. 3.437% 20097 | 306 | 306 | ||||||
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20144,7 | 13,329 | 14,760 | ||||||
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20147 | 4,325 | 4,789 | ||||||
Ras Laffan Liquefied Natural Gas II 5.298% 20204,7 | 49,350 | 46,181 | ||||||
Ras Laffan Liquefied Natural Gas III 5.838% 20274,7 | 55,650 | 48,068 | ||||||
Williams Companies, Inc. and Credit Linked Certificate Trust 6.75% 20094 | 8,000 | 8,140 | ||||||
Williams Companies, Inc. 4.791% 20104,5 | 8,000 | 7,880 | ||||||
Williams Companies, Inc. 6.375% 20104 | 4,700 | 4,841 | ||||||
Transcontinental Gas Pipe Line Corp., Series B, 7.00% 2011 | 10,000 | 10,450 | ||||||
Williams Companies, Inc. 7.125% 2011 | 38,750 | 40,494 | ||||||
Williams Companies, Inc. 8.125% 2012 | 14,810 | 15,921 | ||||||
Williams Companies, Inc. 7.875% 2021 | 15,125 | 16,146 | ||||||
Williams Companies, Inc. 8.75% 2032 | 12,500 | 14,250 | ||||||
Enterprise Products Operating LP 4.95% 2010 | 2,400 | 2,391 | ||||||
Enterprise Products Operating LP 7.50% 2011 | 2,400 | 2,516 | ||||||
Enterprise Products Operating LLC 5.65% 2013 | 10,000 | 9,989 | ||||||
Enterprise Products Operating LP, Series B, 5.00% 2015 | 7,000 | 6,628 | ||||||
Enterprise Products Operating LP 6.875% 2033 | 5,750 | 5,577 | ||||||
Enterprise Products Operating LP 8.375% 20665 | 30,280 | 29,626 | ||||||
Enterprise Products Operating LP 7.034% 20685 | 35,720 | 31,197 | ||||||
Southern Natural Gas Co. 5.90% 20174 | 11,740 | 11,351 | ||||||
El Paso Natural Gas Co. 5.95% 2017 | 7,500 | 7,227 | ||||||
Tennessee Gas Pipeline Co. 7.00% 2028 | 71,500 | 69,191 | ||||||
Gaz Capital SA 8.146% 20184 | 3,250 | 3,307 | ||||||
Gaz Capital SA 6.51% 20224 | 42,310 | 37,402 | ||||||
Gaz Capital SA, Series 9, 6.51% 2022 | 9,500 | 8,398 | ||||||
Gaz Capital SA 7.288% 20374 | 24,925 | 22,328 | ||||||
TransCanada PipeLines Ltd. 6.20% 2037 | 800 | 730 | ||||||
TransCanada PipeLines Ltd. 6.35% 20675 | 78,600 | 66,527 | ||||||
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 20144,7 | 26,466 | 24,881 | ||||||
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 20147 | 8,358 | 7,857 | ||||||
Drummond Co., Inc. 7.375% 20164 | 35,705 | 32,492 | ||||||
Premcor Refining Group Inc. 6.125% 2011 | 14,500 | 14,622 | ||||||
Premcor Refining Group Inc. 6.75% 2011 | 11,150 | 11,380 | ||||||
Enbridge Energy Partners, LP 6.50% 20184 | 5,225 | 5,204 | ||||||
Enbridge Energy Partners, LP 8.05% 20675 | 20,045 | 18,226 | ||||||
Enbridge Inc. 5.60% 2017 | 20,400 | 19,553 | ||||||
Sunoco, Inc. 4.875% 2014 | 10,060 | 9,363 | ||||||
Sunoco, Inc. 5.75% 2017 | 10,000 | 9,527 | ||||||
Kinder Morgan Energy Partners LP 5.85% 2012 | 2,400 | 2,429 | ||||||
Kinder Morgan Energy Partners LP 5.125% 2014 | 10,325 | 9,830 | ||||||
Kinder Morgan Energy Partners LP 6.00% 2017 | 5,200 | 5,144 | ||||||
Qatar Petroleum 5.579% 20114,7 | 13,334 | 13,610 | ||||||
Canadian Natural Resources Ltd. 5.45% 2012 | 5,600 | 5,619 | ||||||
Canadian Natural Resources Ltd. 5.70% 2017 | 7,350 | 7,173 | ||||||
Forest Oil Corp. 7.25% 2019 | 13,500 | 12,758 | ||||||
Williams Partners L.P. and Williams Partners Finance Corp. 7.25% 2017 | 12,325 | 12,356 | ||||||
Pemex Project Funding Master Trust 7.875% 2009 | 1,297 | 1,334 | ||||||
Pemex Project Funding Master Trust 5.75% 20184 | 4,500 | 4,403 | ||||||
Pemex Project Funding Master Trust 6.625% 20354 | 5,000 | 4,914 | ||||||
Devon Financing Corp., ULC 6.875% 2011 | 10,000 | 10,572 | ||||||
Rockies Express Pipeline LLC 6.85% 20184 | 10,000 | 10,190 | ||||||
XTO Energy Inc. 5.90% 2012 | 2,400 | 2,426 | ||||||
XTO Energy Inc. 6.25% 2017 | 7,750 | 7,747 | ||||||
Husky Energy Inc. 6.20% 2017 | 800 | 797 | ||||||
Husky Energy Inc. 6.80% 2037 | 8,625 | 8,431 | ||||||
TEPPCO Partners LP 7.00% 20675 | 8,055 | 6,983 | ||||||
Petroplus Finance Ltd. 6.75% 20144 | 3,750 | 3,300 | ||||||
Petroplus Finance Ltd. 7.00% 20174 | 3,750 | 3,263 | ||||||
Petrobas International Finance Co. 6.125% 2016 | 6,000 | 6,090 | ||||||
Marathon Oil Corp. 6.00% 2017 | 800 | 791 | ||||||
Marathon Oil Corp. 5.90% 2018 | 5,000 | 4,873 | ||||||
PETRONAS Capital Ltd. 7.00% 20124 | 4,000 | 4,311 | ||||||
Delek & Avner-Yam Tethys Ltd. 5.326% 20134,7 | 2,891 | 2,905 | ||||||
TNK-BP Finance SA 7.50% 20164 | 1,500 | 1,365 | ||||||
869,258 | ||||||||
ASSET-BACKED OBLIGATIONS7 — 1.02% | ||||||||
Drive Auto Receivables Trust, Series 2005-1, Class A-4, MBIA insured, 4.01% 2012 | 4,585 | 4,582 | ||||||
Drive Auto Receivables Trust, Series 2005-2, Class A-3, MBIA insured, 4.26% 20124 | 7,154 | 7,055 | ||||||
Drive Auto Receivables Trust, Series 2005-3, Class A-4, FSA insured, 5.09% 20134 | 20,000 | 19,775 | ||||||
Drive Auto Receivables Trust, Series 2006-2, Class A-3, MBIA insured, 5.33% 20144 | 20,000 | 19,050 | ||||||
Washington Mutual Master Note Trust, Series 2006-A3A, Class A-3, 2.488% 20134,5 | 8,000 | 7,570 | ||||||
Washington Mutual Master Note Trust, Series 2007-C1, Class C-1, 2.858% 20144,5 | 7,550 | 5,753 | ||||||
Washington Mutual Master Note Trust, Series 2007-A4A, Class A-4, 5.20% 20144 | 17,475 | 16,503 | ||||||
Washington Mutual Master Note Trust, Series 2006-A2A, Class A, 2.508% 20154,5 | 17,000 | 14,920 | ||||||
Washington Mutual Master Note Trust, Series 2006-C2A, Class C-2, 2.958% 20154,5 | 2,300 | 1,695 | ||||||
CSAB Mortgage-backed Trust, Series 2006-3, Class A-2, 2.621% 20365 | 18,294 | 15,473 | ||||||
CSAB Mortgage-backed Trust, Series 2006-4, Class A-2-B, 2.621% 20365 | 8,651 | 6,034 | ||||||
CSAB Mortgage-backed Trust, Series 2006-2, Class A-2, 2.631% 20365 | 22,064 | 18,903 | ||||||
CSAB Mortgage-backed Trust, Series 2006-2, Class A-6-A, 5.72% 20365 | 6,923 | 5,648 | ||||||
Honda Auto Receivables Owner Trust, Series 2006-3, Class A-4, 5.11% 2012 | 17,500 | 17,642 | ||||||
Honda Auto Receivables Owner Trust, Series 2007-2, Class A-4, 5.57% 2013 | 24,500 | 25,144 | ||||||
Citigroup Mortgage Loan Trust, Inc., Series 2006-WF2, Class A-2D, 6.164% 20365 | 22,289 | 14,439 | ||||||
Citigroup Mortgage Loan Trust, Inc., Series 2006-WF2, Class A-2E, 6.351% 20365 | 7,000 | 4,550 | ||||||
Citigroup Mortgage Loan Trust, Inc., Series 2007-AMC2, Class A-3B, 2.641% 20375 | 25,000 | 15,305 | ||||||
AmeriCredit Automobile Receivables Trust, Series 2007-C-M, Class A-4-A, MBIA insured, 5.55% 2014 | 12,000 | 10,684 | ||||||
AmeriCredit Automobile Receivables Trust, Series 2007-D-F, Class A-4-A, FSA insured, 5.56% 2014 | 7,000 | 6,813 | ||||||
AmeriCredit Automobile Receivables Trust, Series 2008-A-F, Class A-4, FSA insured, 6.96% 2014 | 15,000 | 14,970 | ||||||
UPFC Auto Receivables Trust, Series 2005-B, Class A-3, XLCA insured, 4.98% 2011 | 3,973 | 3,792 | ||||||
UPFC Auto Receivables Trust, Series 2007-B, Class A-3, AMBAC insured, 6.15% 2014 | 23,250 | 21,928 | ||||||
CPS Auto Receivables Trust, Series 2006-A, Class 1-A-4, FSA insured, 5.33% 20124 | 7,500 | 6,957 | ||||||
CPS Auto Receivables Trust, Series 2006-C, Class A-4, XLCA insured, 5.14% 20134 | 10,000 | 8,832 | ||||||
CPS Auto Receivables Trust, Series 2007-B, Class A-4, FSA insured, 5.60% 20144 | 10,000 | 8,997 | ||||||
PG&E Energy Recovery Funding LLC, Series 2005-1, Class A-3, 4.14% 2012 | 10,000 | 10,068 | ||||||
PG&E Energy Recovery Funding LLC, Series 2005-2, Class A-3, 5.12% 2014 | 8,040 | 8,154 | ||||||
ARG Funding Corp., Series 2005-2, Class A-4, AMBAC insured, 4.84% 20114 | 20,000 | 18,191 | ||||||
Advanta Business Card Master Trust, Series 2005-A2, Class A-2, 2.588% 20135 | 18,000 | 17,184 | ||||||
CWABS Asset-backed Certificates Trust, Series 2007-2, Class 2-A-3, 2.601% 20375 | 20,000 | 11,255 | ||||||
CWABS Asset-backed Certificates Trust, Series 2006-14, Class 2-A-2, 2.611% 20375 | 7,125 | 5,191 | ||||||
Triad Automobile Receivables Trust, Series 2006-C, Class A-3, AMBAC insured, 5.26% 2011 | 7,573 | 7,398 | ||||||
Triad Automobile Receivables Trust, Series 2005-A, Class A-4, AMBAC insured, 4.22% 2012 | 8,946 | 8,541 | ||||||
American Express Issuance Trust, Series 2005-1, Class C, 2.788% 20115 | 17,500 | 15,917 | ||||||
J.P. Morgan Alternative Loan Trust, Series 2006-S1, Class 3-A-5, 5.73% 20365 | 19,462 | 14,769 | ||||||
Santander Drive Auto Receivables Trust, Series 2007-1, Class A-3, FGIC insured, 5.05% 2011 | 15,000 | 14,766 | ||||||
Long Beach Acceptance Auto Receivables Trust, Series 2006-B, Class A-3, FSA insured, 5.17% 2011 | 3,797 | 3,764 | ||||||
Long Beach Acceptance Auto Receivables Trust, Series 2006-B, Class A-4, FSA insured, 5.18% 2013 | 11,500 | 10,834 | ||||||
Residential Funding Mortgage Securities II, Inc., Series 2006-HSA2, Class A-I-5, FGIC insured, 5.63% 20365 | 10,000 | 4,183 | ||||||
Residential Funding Mortgage Securities II, Inc., Series 2007-HSA2, Class A-1F, MBIA insured, 8.47% 20375 | 10,810 | 10,297 | ||||||
Susquehanna Auto Lease Trust, Series 2007-1, Class A-3, 5.25% 20104 | 14,250 | 14,476 | ||||||
CWHEQ Revolving Home Equity Loan Trust, Series 2007-C, Class A, FGIC insured, 2.608% 20375 | 34,672 | 14,114 | ||||||
Nissan Auto Lease Trust, Series 2008-A, Class A-3a, 5.14% 2011 | 14,000 | 14,081 | ||||||
Home Equity Mortgage Trust, Series 2006-2, Class 1A-1, 5.367% 20363,5 | 2,894 | 1,013 | ||||||
Home Equity Mortgage Trust, Series 2006-4, Class A-1, 5.671% 20365 | 5,951 | 1,883 | ||||||
Home Equity Mortgage Trust, Series 2006-6, Class 2A-1, 2.561% 20375 | 25,030 | 6,074 | ||||||
Home Equity Mortgage Trust, Series 2006-5, Class A-1, 5.50% 20375 | 15,091 | 4,312 | ||||||
Securitized Asset-backed Receivables LLC Trust, Series 2006-HE2, Class A-2C, 2.611% 20363,5 | 17,043 | 8,010 | ||||||
Securitized Asset-backed Receivables LLC Trust, Series 2006-NC3, Class A-2B, 2.611% 20365 | 7,950 | 5,103 | ||||||
Prestige Auto Receivables Trust, Series 2005-1A, Class A-2, FSA insured, 4.37% 20124 | 4,342 | 4,348 | ||||||
Prestige Auto Receivables Trust, Series 2006-1A, Class A-2, FSA insured, 5.25% 20134 | 7,151 | 6,999 | ||||||
Capital One Multi-asset Execution Trust, Series 2005-1, Class C, 2.858% 20135 | 6,000 | 5,505 | ||||||
Capital One Multi-asset Execution Trust, Series 2006-1, Class C, 2.748% 20145 | 2,000 | 1,719 | ||||||
Capital One Multi-asset Execution Trust, Series 2003-3, Class C, 4.708% 20165 | 4,600 | 4,026 | ||||||
BMW Vehicle Owner Trust, Series 2006-A, Class A-4, 5.07% 2011 | 11,044 | 11,132 | ||||||
Drivetime Auto Owner Trust, Series 2005-C, Class A-3, MBIA insured, 5.006% 20114,5 | 2,863 | 2,801 | ||||||
Drivetime Auto Owner Trust, Series 2006-A, Class A-3, XLCA insured, 5.501% 20114,5 | 7,782 | 7,512 | ||||||
Discover Card Execution Note Trust, Series 2008-3, Class A, 5.10% 2013 | 10,125 | 10,187 | ||||||
Chase Issuance Trust, Series 2008-4, Class A, 4.65% 2015 | 10,000 | 9,805 | ||||||
SACO I Trust, Series 2005-4, Class M-1, 3.061% 20353,4,5 | 3,000 | 1,022 | ||||||
SACO I Trust, Series 2006-7, Class A, 2.591% 20365 | 27,882 | 5,961 | ||||||
SACO I Trust, Series 2006-12, Class I-A, 2.601% 20365 | 13,033 | 2,427 | ||||||
J.P. Morgan Mortgage Acquisition Corp., Series 2005-FRE1, Class A-F-4, 5.488% 20355 | 11,978 | 9,118 | ||||||
Option One Mortgage Loan Trust, Series 2006-3, Class II-A-2, 2.561% 20375 | 10,000 | 8,970 | ||||||
MBNA Credit Card Master Note Trust, Series 2003-1, Class C, 4.158% 20125 | 3,600 | 3,529 | ||||||
MBNA Credit Card Master Note Trust, Series 2001-C, Class C, 7.10% 20134 | 5,000 | 4,906 | ||||||
Conseco Finance Home Loan Trust, Series 1999-G, Class B-2, 10.96% 20293 | 15,194 | 8,357 | ||||||
Ameriquest Mortgage Securities Trust, Series 2006-M3, Class A-2C, 2.621% 20365 | 12,000 | 8,200 | ||||||
AEP Texas Central Transitioning Funding II LLC, Senior Secured Transition Bonds, Series A, Class A-3, 5.09% 2015 | 8,265 | 8,160 | ||||||
Home Equity Asset Trust, Series 2004-7, Class M-1, 3.081% 20355 | 10,000 | 7,697 | ||||||
Home Equity Asset Trust, Series 2005-2, Class B-4, 5.961% 20353,4,5 | 4,820 | 2 | ||||||
GMAC Mortgage Loan Trust, Series 2007-HE2, Class A-2, FGIC insured, 6.054% 20375 | 5,000 | 2,800 | ||||||
GMAC Mortgage Loan Trust, Series 2007-HE2, Class A-3, FGIC insured, 6.193% 20375 | 10,000 | 4,694 | ||||||
New Century Home Equity Loan Trust, Series 2006-2, Class A-2-b, 2.621% 20365 | 9,000 | 7,292 | ||||||
CWABS, Inc., Series 2005-11, Class AF-2, 4.657% 20365 | 7,194 | 7,090 | ||||||
CarMax Auto Owner Trust, Series 2007-2, Class A-3, 5.23% 2011 | 7,000 | 7,003 | ||||||
Vanderbilt Mortgage and Finance, Inc., Series 1999-B, Class I-A-6, 6.925% 2024 | 6,981 | 6,970 | ||||||
Residential Asset Securities Corp. Trust, Series 2001-KS3, Class A-I-6, 5.96% 2031 | 5,058 | 4,452 | ||||||
Residential Asset Securities Corp. Trust, Series 2003-KS6, Class A-2, 3.061% 20335 | 140 | 90 | ||||||
Residential Asset Securities Corp. Trust, Series 2006-KS3, Class M-2, 2.801% 20363,5 | 10,000 | 2,316 | ||||||
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2005-2, Class A-6, AMBAC insured, 5.08% 20114 | 6,375 | 6,002 | ||||||
Structured Asset Investment Loan Trust, Series 2006-BNC2, Class A-5, 2.621% 20365 | 10,000 | 5,788 | ||||||
Ameriquest Mortgage Securities Inc., Series 2003-12, Class M-1, 3.211% 20345 | 7,000 | 5,743 | ||||||
RAMP Trust, Series 2003-RZ4, Class A-7, 4.79% 20335 | 6,008 | 5,669 | ||||||
MASTR Asset-backed Securities Trust, Series 2007-HE1, Class A-2, 2.611% 20375 | 6,600 | 5,378 | ||||||
First Franklin Mortgage Loan Trust, Series 2006-FFA, Class A-3, 2.581% 20265 | 16,940 | 5,361 | ||||||
BNC Mortgage Loan Trust, Series 2007-3, Class A3, 2.591% 20375 | 5,819 | 4,783 | ||||||
Citibank Credit Card Issuance Trust, Series 2008, Class C6, 6.30% 2014 | 2,000 | 1,826 | ||||||
Citibank Credit Card Issuance Trust, Series 2008, Class A5, 4.85% 2015 | 3,000 | 2,956 | ||||||
MBNA Master Credit Card Trust II, Series 2000-H, Class B, 3.058% 20135 | 5,000 | 4,768 | ||||||
CWHEQ Home Equity Loan Trust, Series 2006-S2, Class A-5, FGIC insured, 5.753% 2027 | 10,000 | 4,654 | ||||||
Metropolitan Asset Funding, Inc., Series 1998-A, Class B-1, 7.728% 20143,4 | 4,651 | 4,462 | ||||||
Bear Stearns Asset-backed Securities I Trust, Series 2005-CL1, Class A-1, 2.961% 20345 | 4,726 | 3,489 | ||||||
BA Credit Card Trust, Series 2007-2, Class C-2, 2.728% 20125 | 3,315 | 3,157 | ||||||
Long Beach Mortgage Loan Trust, Series 2006-A, Class A-1, 2.551% 20365 | 16,157 | 2,580 | ||||||
NovaStar Mortgage Funding Trust, Series 2004-4, Class B-1, 4.161% 20355 | 7,500 | 2,578 | ||||||
GSAA Home Equity Trust, Series 2006-7, Class AF-5A, 6.205% 20465 | 2,800 | 2,356 | ||||||
First USA Credit Card Master Trust, Series 1998-6, Class C, 6.16% 20114 | 2,000 | 1,999 | ||||||
Merrill Lynch Mortgage Investors Trust, Series 2007-SL1, Class A-1, 2.761% 20375 | 4,002 | 1,316 | ||||||
Nebhelp Trust, Student Loan Interest Margin Securities, Series 1, Class A, MBIA insured, 6.68% 20163,4 | 567 | 567 | ||||||
Structured Asset Securities Corp., Series 2005-WF4, Class B-1, 4.961% 20355 | 1,500 | 134 | ||||||
783,248 | ||||||||
MATERIALS — 0.78% | ||||||||
ArcelorMittal 5.375% 20134 | 16,165 | 15,918 | ||||||
ArcelorMittal 6.125% 20184 | 50,775 | 48,690 | ||||||
International Paper Co. 7.40% 2014 | 12,500 | 12,499 | ||||||
International Paper Co. 7.95% 2018 | 47,545 | 47,358 | ||||||
Jefferson Smurfit Corp. (U.S.) 8.25% 2012 | 3,700 | 3,265 | ||||||
Stone Container Corp. 8.375% 2012 | 19,558 | 17,358 | ||||||
Jefferson Smurfit Corp. (U.S.) 7.50% 2013 | 15,825 | 13,214 | ||||||
Smurfit-Stone Container Enterprises, Inc. 8.00% 2017 | 18,665 | 15,352 | ||||||
Freeport-McMoRan Copper & Gold Inc. 6.875% 2014 | 3,100 | 3,173 | ||||||
Freeport-McMoRan Copper & Gold Inc. 8.25% 2015 | 24,130 | 25,188 | ||||||
Freeport-McMoRan Copper & Gold Inc. 8.375% 2017 | 17,735 | 18,606 | ||||||
Georgia Gulf Corp. 7.125% 2013 | 850 | 629 | ||||||
Georgia Gulf Corp. 9.50% 2014 | 52,970 | 40,257 | ||||||
Georgia Gulf Corp. 10.75% 2016 | 2,535 | 1,331 | ||||||
Domtar Corp. 5.375% 2013 | 3,350 | 2,898 | ||||||
Domtar Corp. 7.125% 2015 | 37,750 | 35,674 | ||||||
C5 Capital (SPV) Ltd. 6.196% (undated)4,5 | 3,000 | 2,881 | ||||||
C8 Capital (SPV) Ltd. 6.64% (undated)4,5 | 16,000 | 14,659 | ||||||
C10 Capital (SPV) Ltd. 6.722% (undated)4,5 | 12,500 | 11,415 | ||||||
Nalco Co. 7.75% 2011 | 15,010 | 15,235 | ||||||
Nalco Co. 8.875% 2013 | 1,000 | 1,037 | ||||||
Nalco Finance Holdings LLC and Nalco Finance Holdings Inc. 0%/9.00% 201410 | 7,200 | 6,516 | ||||||
Georgia-Pacific Corp. 8.125% 2011 | 9,825 | 9,727 | ||||||
Georgia-Pacific Corp. 9.50% 2011 | 5,000 | 5,062 | ||||||
Georgia-Pacific Corp., First Lien Term Loan B, 4.446% 20125,7,8 | 6,319 | 5,970 | ||||||
Stora Enso Oyj 6.404% 20164 | 12,485 | 10,584 | ||||||
Stora Enso Oyj 7.25% 20364 | 13,000 | 9,824 | ||||||
Abitibi-Consolidated Inc. 8.55% 2010 | 10,193 | 5,504 | ||||||
Abitibi-Consolidated Co. of Canada 15.50% 20104 | 2,320 | 1,752 | ||||||
Abitibi-Consolidated Co. of Canada 6.276% 20115 | 5,225 | 2,403 | ||||||
Abitibi-Consolidated Inc. 7.75% 2011 | 6,865 | 3,227 | ||||||
Abitibi-Consolidated Co. of Canada 6.00% 2013 | 1,955 | 802 | ||||||
Abitibi-Consolidated Co. of Canada 8.375% 2015 | 14,675 | 6,090 | ||||||
Graphic Packaging International, Inc. 8.50% 2011 | 18,975 | 18,216 | ||||||
Owens-Illinois, Inc. 7.50% 2010 | 750 | 767 | ||||||
Owens-Brockway Glass Container Inc. 8.25% 2013 | 16,000 | 16,480 | ||||||
Boise Cascade, LLC and Boise Cascade Finance Corp. 7.125% 2014 | 21,530 | 14,963 | ||||||
NewPage Corp., Series B, 10.00% 2012 | 10,500 | 10,106 | ||||||
NewPage Corp., Series A, 12.00% 2013 | 3,170 | 3,051 | ||||||
Allegheny Technologies, Inc. 8.375% 2011 | 10,500 | 11,119 | ||||||
Momentive Performance Materials Inc. 9.75% 2014 | 12,000 | 10,680 | ||||||
AMH Holdings, Inc. 0%/11.25% 201410 | 16,795 | 10,371 | ||||||
Metals USA Holdings Corp. 8.791% 20125,9 | 8,095 | 7,468 | ||||||
Metals USA, Inc. 11.125% 2015 | 2,150 | 2,236 | ||||||
Algoma Steel Inc. 9.875% 20154 | 7,500 | 7,087 | ||||||
FMG Finance Pty Ltd. 10.625% 20164 | 6,000 | 6,990 | ||||||
Airgas, Inc. 6.25% 2014 | 1,400 | 1,375 | ||||||
Airgas, Inc. 7.125% 20184 | 5,500 | 5,528 | ||||||
AEP Industries Inc. 7.875% 2013 | 8,220 | 6,617 | ||||||
Building Materials Corp. of America 7.75% 2014 | 8,400 | 6,594 | ||||||
UPM-Kymmene Corp. 5.625% 20144 | 7,500 | 6,545 | ||||||
JSG Funding PLC 7.75% 2015 | 6,500 | 5,883 | ||||||
Weyerhaeuser Co. 7.375% 20321 | 3,500 | 3,347 | ||||||
Weyerhaeuser Co. 6.875% 20331 | 2,500 | 2,261 | ||||||
Rohm and Haas Co. 5.60% 2013 | 4,020 | 4,045 | ||||||
Dow Chemical Co. 5.70% 2018 | 4,000 | 3,783 | ||||||
Rockwood Specialties Group, Inc. 7.50% 2014 | 3,240 | 3,200 | ||||||
E.I. du Pont de Nemours and Co. 5.00% 2013 | 3,025 | 3,037 | ||||||
Packaging Corp. of America 4.375% 2008 | 2,500 | 2,500 | ||||||
Arbermarle Corp. 5.10% 2015 | 2,570 | 2,433 | ||||||
Plastipak Holdings, Inc. 8.50% 20154 | 2,275 | 1,945 | ||||||
Berry Plastics Holding Corp. 10.25% 2016 | 2,950 | 1,932 | ||||||
Corporación Nacional del Cobre de Chile 6.375% 20124 | 1,500 | 1,575 | ||||||
Neenah Paper, Inc. 7.375% 2014 | 277 | 237 | ||||||
596,469 | ||||||||
CONSUMER STAPLES — 0.46% | ||||||||
Wesfarmers Ltd. 6.998% 20134 | 50,000 | 51,864 | ||||||
SUPERVALU INC., Term Loan B, 3.642% 20125,7,8 | 14,129 | 13,381 | ||||||
SUPERVALU INC. 7.50% 2012 | 3,323 | 3,323 | ||||||
Albertson’s, Inc. 7.25% 2013 | 14,122 | 14,193 | ||||||
SUPERVALU INC. 7.50% 2014 | 1,000 | 991 | ||||||
Albertson’s, Inc. 8.00% 2031 | 12,650 | 12,218 | ||||||
Tyson Foods, Inc. 6.85% 20165 | 39,900 | 37,116 | ||||||
Stater Bros. Holdings Inc. 8.125% 2012 | 22,625 | 22,625 | ||||||
Stater Bros. Holdings Inc. 7.75% 2015 | 13,750 | 13,200 | ||||||
CVS Caremark Corp. 2.982% 20105 | 5,000 | 4,897 | ||||||
CVS Corp. 5.789% 20264,7 | 4,405 | 3,950 | ||||||
CVS Corp. 6.036% 20284,7 | 13,495 | 12,565 | ||||||
CVS Caremark Corp. 6.943% 20304,7 | 5,943 | 5,775 | ||||||
Dole Food Co., Inc. 8.625% 2009 | 7,850 | 7,723 | ||||||
Dole Food Co., Inc. 7.25% 2010 | 7,875 | 7,284 | ||||||
Dole Food Co., Inc. 8.875% 2011 | 10,735 | 9,836 | ||||||
Yankee Candle Co., Inc., Series B, 8.50% 2015 | 22,995 | 17,016 | ||||||
Yankee Candle Co., Inc., Series B, 9.75% 2017 | 11,895 | 6,899 | ||||||
Kroger Co. 6.40% 2017 | 17,950 | 18,375 | ||||||
Duane Reade Inc. 9.75% 2011 | 14,120 | 12,496 | ||||||
Vitamin Shoppe Industries Inc. 10.176% 20123,5 | 11,650 | 11,912 | ||||||
Tesco PLC 6.15% 20374 | 10,600 | 9,628 | ||||||
Delhaize Group 6.50% 2017 | 3,850 | 3,848 | ||||||
Delhaize America, Inc. 9.00% 2031 | 5,000 | 5,760 | ||||||
Safeway Inc. 6.35% 2017 | 8,000 | 8,162 | ||||||
Rite Aid Corp. 8.625% 2015 | 3,000 | 1,943 | ||||||
Rite Aid Corp. 7.70% 2027 | 9,000 | 4,635 | ||||||
Rite Aid Corp. 6.875% 2028 | 2,500 | 1,163 | ||||||
Pilgrim’s Pride Corp. 7.625% 2015 | 7,000 | 5,950 | ||||||
Pilgrim’s Pride Corp. 8.375% 2017 | 2,000 | 1,540 | ||||||
Constellation Brands, Inc. 8.375% 2014 | 3,675 | 3,776 | ||||||
Constellation Brands, Inc. 7.25% 2017 | 3,000 | 2,910 | ||||||
Kraft Foods Inc. 6.875% 2038 | 5,875 | 5,688 | ||||||
Elizabeth Arden, Inc. 7.75% 2014 | 3,675 | 3,482 | ||||||
Smithfield Foods, Inc., Series B, 8.00% 2009 | 875 | 878 | ||||||
Smithfield Foods, Inc., Series B, 7.75% 2013 | 2,800 | 2,548 | ||||||
349,550 | ||||||||
BONDS & NOTES OF GOVERNMENTS & GOVERNMENT AGENCIES OUTSIDE THE U.S. — 0.12% | ||||||||
United Mexican States Government Global 6.375% 2013 | 14,765 | 15,577 | ||||||
United Mexican States Government Global 11.375% 2016 | 9,118 | 12,606 | ||||||
United Mexican States Government Global 5.625% 2017 | 3,640 | 3,680 | ||||||
United Mexican States Government Global 6.75% 2034 | 7,740 | 8,344 | ||||||
United Mexican States Government Global 6.05% 2040 | 2,000 | 1,930 | ||||||
Russian Federation 8.25% 20107 | 1,333 | 1,387 | ||||||
Russian Federation 7.50% 20307 | 24,398 | 27,479 | ||||||
State of Qatar 9.75% 2030 | 4,000 | 6,010 | ||||||
El Salvador (Republic of) 7.75% 2023 | 3,000 | 3,150 | ||||||
El Salvador (Republic of) 7.75% 20234 | 1,250 | 1,312 | ||||||
El Salvador (Republic of) 7.65% 20354 | 750 | 737 | ||||||
Banque Centrale de Tunisie 7.375% 2012 | 3,500 | 3,723 | ||||||
Bulgaria (Republic of) 8.25% 2015 | 3,000 | 3,386 | ||||||
Aries Vermögensverwaltungs GmbH, Series C, 9.60% 2014 | 2,500 | 3,124 | ||||||
Corporación Andina de Fomento 5.75% 2017 | 2,000 | 1,909 | ||||||
94,354 | ||||||||
MUNICIPALS — 0.01% | ||||||||
State of South Dakota, Educational Enhancement Funding Corp., Tobacco Settlement Asset-backed Bonds, | ||||||||
Series 2002-A, Class A, 6.72% 2025 | 3,617 | 3,310 | ||||||
State of Louisiana, Tobacco Settlement Financing Corp., Tobacco Settlement Asset-backed Bonds, | ||||||||
Series 2001-A, Class A, 6.36% 2025 | 2,110 | 2,066 | ||||||
5,376 | ||||||||
Total bonds & notes (cost: $22,812,593,000) | 20,679,723 | |||||||
Short-term securities — 9.10% | ||||||||
Federal Home Loan Bank 1.70%–2.55% due 8/13–12/10/2008 | 1,053,362 | 1,050,202 | ||||||
Freddie Mac 1.736%–2.55% due 8/18–9/29/2008 | 978,019 | 975,906 | ||||||
U.S. Treasury Bills 1.44%–1.865% due 8/14–11/13/2008 | 848,645 | 846,757 | ||||||
Procter & Gamble International Funding S.C.A. 2.06%–2.27% due 8/8–10/3/20084 | 437,400 | 436,261 | ||||||
Coca-Cola Co. 2.03%–2.37% due 8/7–10/9/20084 | 357,300 | 356,280 | ||||||
Fannie Mae 2.07%–2.35% due 8/1–10/28/2008 | 317,800 | 317,047 | ||||||
JPMorgan Chase & Co. 2.50%–2.65% due 9/2–10/16/2008 | 147,300 | 146,680 | ||||||
Jupiter Securitization Co., LLC 2.50% due 8/7/20084 | 50,000 | 49,972 | ||||||
Park Avenue Receivables Co., LLC 2.72% due 9/5/20084 | 31,300 | 31,205 | ||||||
Johnson & Johnson 2.02%–2.15% due 8/11–10/14/20084 | 225,000 | 224,642 | ||||||
Wells Fargo & Co. 2.17%–2.34% due 8/15–10/7/2008 | 217,200 | 216,479 | ||||||
United Parcel Service Inc. 2.04%–2.17% due 8/1–10/1/20084 | 194,800 | 194,397 | ||||||
International Bank for Reconstruction and Development 1.89% due 9/17/2008 | 175,000 | 174,559 | ||||||
IBM Corp. 2.08%–2.24% due 9/3–9/11/20084 | 104,500 | 104,215 | ||||||
IBM Capital Inc. 2.25% due 9/18/20084 | 50,000 | 49,818 | ||||||
Honeywell International Inc. 2.00%–2.29% due 8/13–9/29/20084 | 154,262 | 153,818 | ||||||
Pfizer Inc 2.16%–2.18% due 9/5–9/8/20084 | 134,500 | 134,127 | ||||||
General Electric Capital Corp. 2.62% due 8/12/2008 | 75,000 | 74,941 | ||||||
Edison Asset Securitization LLC 2.47% due 9/17/20084 | 50,371 | 50,205 | ||||||
Paccar Financial Corp. 1.97%–2.01% due 8/13–8/19/2008 | 112,397 | 112,276 | ||||||
Private Export Funding Corp. 2.045%–2.22% due 8/12–9/18/20084 | 110,890 | 110,704 | ||||||
Walt Disney Co. 2.03%–2.13% due 8/18–10/9/2008 | 108,500 | 108,269 | ||||||
Wal-Mart Stores Inc. 1.99%–2.07% due 8/5–10/6/20084 | 100,000 | 99,754 | ||||||
Merck & Co. Inc. 2.14%–2.15% due 8/15–9/23/2008 | 100,000 | 99,745 | ||||||
Bank of America Corp. 2.575%–2.68% due 9/8–10/7/2008 | 100,000 | 99,594 | ||||||
John Deere Capital Corp. 2.12%–2.17% due 9/4–9/23/20084 | 85,000 | 84,725 | ||||||
Eaton Corp. 2.20%–2.35% due 8/11–9/4/20084 | 82,900 | 82,736 | ||||||
NetJets Inc. 2.08%–2.17% due 9/8–9/19/20084 | 80,000 | 79,801 | ||||||
Variable Funding Capital Corp. 2.63% due 9/16/20084 | 59,100 | 58,871 | ||||||
Union Bank of California, N.A. 2.62% due 8/15/2008 | $ | 50,000 | $ | 50,000 | ||||
AT&T Inc. 2.30% due 8/20/20084 | 50,000 | 49,924 | ||||||
Medtronic Inc. 2.20% due 8/26/20084 | 50,000 | 49,901 | ||||||
E.I. duPont de Nemours and Co. 2.18% due 8/28/20084 | 50,000 | 49,894 | ||||||
Brown-Forman Corp. 2.08%–2.20% due 8/5–8/21/20084 | 48,125 | 48,073 | ||||||
Ciesco LLC 2.70% due 8/26/20084 | 42,300 | 42,210 | ||||||
Genentech, Inc. 2.11%–2.20% due 8/14–8/25/20084 | 41,555 | 41,504 | ||||||
3M Co. 2.01% due 8/27/2008 | 34,000 | 33,949 | ||||||
Wm. Wrigley Jr. Co. 2.10% due 8/1/20084 | 25,000 | 24,998 | ||||||
Harvard University 2.06% due 8/4/2008 | 25,000 | 24,992 | ||||||
Becton, Dickinson and Co. 2.10% due 8/25/2008 | 25,000 | 24,964 | ||||||
Total short-term securities (cost: $6,964,841,000) | 6,964,395 | |||||||
Total investment securities (cost: $77,433,729,000) | 76,527,544 | |||||||
Other assets less liabilities | (41,408 | ) | ||||||
Net assets | $ | 76,486,136 |
“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
1 | Represents an affiliated company as defined under the Investment Company Act of 1940. |
2 | Security did not produce income during the last 12 months. |
3 | Valued under fair value procedures adopted by authority of the board of directors. The total value of all such securities was $691,650,000, which represented .90% of the net assets of the fund. |
4 | Purchased in a transaction exempt from registration under the Securities Act of 1933. May be resold in the United States in transactions exempt from registration, normally to qualified institutional buyers. The total value of all such securities was $6,809,625,000, which represented 8.90% of the net assets of the fund. |
5 | Coupon rate may change periodically. |
6 | Purchased in a transaction exempt from registration under the Securities Act of 1933. This security (acquired 1/15/2008 at a cost of $178,500,000) may be subject to legal or contractual restrictions on resale. |
7 | Principal payments may be made periodically. Therefore, the effective maturity date may be earlier than the stated maturity date. |
8 | Loan participations and assignments; may be subject to legal or contractual restrictions on resale. The total value of all such loans was $803,165,000, which represented 1.05% of the net assets of the fund. |
9 | Payment in kind; the issuer has the option of paying additional securities in lieu of cash. |
10 | Step bond; coupon rate will increase at a later date. |
11 | Scheduled interest and/or principal payment was not received. |
12 | Index-linked bond whose principal amount moves with a government retail price index. |
Key to abbreviations
ADR = American Depositary Receipts
GDR = Global Depositary Receipts
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so you may lose money.
Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information
is contained in each fund’s prospectus, which can be obtained from your financial professional and should be read carefully before investing.
MFGEFP-906-0908O-S15877
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INVESTMENT PORTFOLIO
To the Shareholders and Board of Directors of
The Income Fund of America, Inc.:
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements of The Income Fund of America, Inc. (the “Fund”) as of July 31, 2008, and for the year then ended and have issued our report thereon dated September 10, 2008, which report and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR. Our audit also included the Fund’s investment portfolio (the “Schedule”) as of July 31, 2008, appearing in Item 6 of this Form N-CSR. This Schedule is the responsibility of the Fund’s management. Our responsibility is to express an opinion based on our audit. In our opinion, the Schedule referred to above, when considered in relation to the basic financial statements taken as a whole of the Fund referred to above, presents fairly, in all material respects, the information set forth therein.
DELOITTE & TOUCHE LLP
Costa Mesa, California
September 10, 2008
ITEM 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 8 – Portfolio Managers of Closed-End Management Investment Companies
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.
ITEM 10 – Submission of Matters to a Vote of Security Holders
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s board of directors since the Registrant last submitted a proxy statement to its shareholders. The procedures are as follows. The Registrant has a nominating committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of directors. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating committee of the Registrant, c/o the Registrant’s Secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the nominating committee.
ITEM 11 – Controls and Procedures
(a) | The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule. |
(b) | There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
ITEM 12 – Exhibits
(a)(1) | The Code of Ethics that is the subject of the disclosure required by Item 2 is attached as an exhibit hereto. |
(a)(2) | The certifications required by Rule 30a-2 of the Investment Company Act of 1940 and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE INCOME FUND OF AMERICA, INC. | |
By /s/ Hilda L. Applbaum | |
Hilda L. Applbaum, Vice Chairman and Principal Executive Officer | |
Date: October 8, 2008 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By /s/ Hilda L. Applbaum |
Hilda L. Applbaum, Vice Chairman and Principal Executive Officer |
Date: October 8, 2008 |
By /s/ Jennifer M. Buchheim |
Jennifer M. Buchheim, Treasurer and Principal Financial Officer |
Date: October 8, 2008 |