Neuberger Berman Strategic Income Fund NCSR Certified annual shareholder report (management investment company)

As filed with the Securities and Exchange Commission on January 7, 2011

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: 811-3802

NEUBERGER BERMAN INCOME FUNDS

(Exact Name of the Registrant as Specified in Charter)

c/o Neuberger Berman Management LLC

605 Third Avenue, 2nd Floor

New York, New York 10158-0180

(Address of Principal Executive Offices – Zip Code)

Registrant's telephone number, including area code: (212) 476-8800

Robert Conti

Chief Executive Officer and President

c/o Neuberger Berman Management LLC

Neuberger Berman Income Funds

605 Third Avenue, 2nd Floor

New York, New York 10158-0180

Arthur C. Delibert, Esq.

K&L Gates LLP

1601 K Street, N.W.

Washington, D.C. 20006-1600

(Names and Addresses of agents for service)

Date of fiscal year end: October 31, 2010

Date of reporting period: October 31, 2010

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Report to Shareholders

	Neuberger Berman Income Funds

	Investor Class Shares		Class A Shares
	Institutional Class Shares		Class C Shares
	Trust Class Shares		Class R3 Shares


	Core Bond Fund Floating Rate Income Fund High Income Bond Fund		Municipal Intermediate Bond Fund Short Duration Bond Fund Strategic Income Fund

Annual Report

October 31, 2010

	Contents

	THE FUNDS

	President's Letter	1

	PORTFOLIO COMMENTARY

	Core Bond Fund	2

	Floating Rate Income Fund	5

	High Income Bond Fund	8

	Municipal Intermediate Bond Fund	11

	Short Duration Bond Fund	14

	Strategic Income Fund	17

	FUND EXPENSE INFORMATION	25

	SCHEDULE OF INVESTMENTS

	Core Bond Fund	27

	Floating Rate Income Fund	33

	High Income Bond Fund	39

	Municipal Intermediate Bond Fund	46

	Short Duration Bond Fund	51

	Strategic Income Fund	54

	FINANCIAL STATEMENTS	84

The "Neuberger Berman" name and logo are registered service marks of Neuberger Berman Group LLC. "Neuberger Berman Management LLC" and the individual Fund names in this piece are either service marks or registered service marks of Neuberger Berman Management LLC. ©2010 Neuberger Berman Management LLC. All rights reserved.

FINANCIAL HIGHLIGHTS (ALL CLASSES)/PER SHARE DATA

	Core Bond Fund	106

	Floating Rate Income Fund	106

	High Income Bond Fund	108

	Municipal Intermediate Bond Fund	108

	Short Duration Bond Fund	110

	Strategic Income Fund	112

	Reports of Independent Registered Public Accounting Firms	116

	Directory	118

	Trustees and Officers	119

	Proxy Voting Policies and Procedures	128

	Quarterly Portfolio Schedule	128

	Notice to Shareholders	128

	Board Consideration of the Management and Sub-Advisory Agreements	128

President's Letter

Dear Fellow Shareholder,

The fixed income markets generally provided solid results in the fiscal year ended October 31, 2010. While there were periods of heightened volatility, they were largely offset by robust risk appetite, as investors looked to generate incremental income in the low-interest-rate environment. Against this backdrop, non-Treasury securities outperformed their Treasury counterparts. Also supporting non-Treasuries were the continued economic expansion, benign inflation and strengthening corporate balance sheets.

Our Fixed Income Funds were generally positioned to benefit from the outperformance of non-Treasuries. In particular, exposure to the areas of the market that had lagged the most during the credit crisis enhanced the Funds' results during the reporting period.

Looking ahead, while the lengthiest recession since the Great Depression has finally been declared over, the U.S. economy still faces a number of headwinds. These include continued elevated unemployment and a housing market that is struggling to regain its footing. Despite these challenges, it is our belief that the economy has enough momentum to avoid a double-dip recession. That said, we expect to see growth that is more modest than previous periods exiting a severe recession.

One factor that we believe will support the economy going forward is continued low interest rates. With economic growth moderating during the second half of the reporting period, the Federal Reserve kept the Federal Funds rate at a historically low range of 0% to 0.25%. In addition, during its September 2010 meeting, Federal Reserve Chairman Ben Bernanke indicated that the Fed was "prepared to provide additional accommodation if needed to support the economic recovery..." In November, after the reporting period had concluded, the Federal Reserve announced its intention to purchase $600 billion in Treasuries by the end of June 2011, in an attempt to keep longer-term rates low and support the economy. Whether this plan has its desired effect, of course, remains to be seen.

Against a backdrop of moderately positive economic growth and mild inflation, we believe that non-Treasuries could continue to generate solid results, and our Fixed Income Funds are positioned accordingly. In addition, it is our belief that demand for non-Treasuries will remain strong given the low yields offered by Treasury securities.

In conclusion, as the last few years have shown, the financial markets can experience periods of unsettling volatility. Given uncertainties surrounding the economy and the Federal Reserve's policies, we believe there is a chance that the financial markets will experience higher volatility going forward. Should such volatility occur, we urge shareholders to maintain a long-term perspective.

Thank you for your continued support and trust. We look forward to continue serving your investment needs in the years to come.

Sincerely,

Robert Conti

President and CEO

Neuberger Berman Mutual Funds

Core Bond Fund Commentary (Unaudited)

For the fiscal year ended October 31, 2010, Neuberger Berman Core Bond Fund posted a strong absolute return and outperformed its benchmark, the Barclays Capital U.S. Aggregate Index.

To a great extent, risk appetite was robust during the reporting period as investors were drawn to investments that offered relatively high yields in the low interest rate environment. Two notable exceptions occurred in late April and May, when concerns regarding the European sovereign debt crisis escalated, and again in August, as moderating economic data led to fears of a double-dip recession. However, these proved to be only temporary setbacks and risk aversion was quickly replaced by continued strong demand for non-Treasury fixed income securities. Also supporting non-Treasuries were strengthening corporate balance sheets and better-than-generally-expected corporate profits, continued low interest rates, benign inflation and indications that the Federal Reserve would introduce another round of quantitative easing (QE2) to support the economy. Against this backdrop, non-Treasuries generally outperformed equal-duration Treasuries during the reporting period.

Many of the best performing sectors in the investment grade fixed income market were those that offered the most attractive yields, including commercial mortgage-backed securities (CMBS) and investment grade bonds.

The Fund was well positioned for an environment that favored non-Treasuries. In particular, the Fund's overweight positions versus the benchmark in CMBS and investment-grade bonds enhanced results as their spreads (the difference in yield between Treasuries and other bond sectors) significantly narrowed during the 12-month reporting period. Within the investment grade sector, the Fund's industrial and financial bonds produced the best results.

Also contributing to performance was the Fund's yield curve positioning and an allocation to Treasury Inflation Protected Securities (TIPS). Throughout most of the period, the Fund had an overweight to the intermediate portion of the yield curve. This was beneficial to results as intermediate-term rates declined more than their short- and long-term counterparts. TIPS benefited from a decline in real (excluding inflation) yields and increasing expectations for higher inflation.

Modestly hampering absolute performance was the Fund's exposure to U.S. Treasuries and agency mortgage-backed securities, as lower yielding and higher quality bonds lagged the overall fixed income market during the period.

We made a number of adjustments to the portfolio during the reporting period, such as paring its investment-grade bond exposure to capture profits given the sector's strong results. The proceeds of those sales were used to increase the Fund's exposure to U.S. Treasury securities in October. This was done to broaden diversification and reduce overall risk exposure.

Looking ahead, we believe that the U.S. economy will avert a double-dip recession and that inflation will remain benign. However, we feel economic growth could be muted by historical standards coming out of a severe recession. In addition, the Federal Reserve has signaled that short-term interest rates could remain low "for an extended period" and in our view QE2 could keep longer-term rates relatively low as well. Against this backdrop, we believe that demand for non-Treasuries will remain strong. We feel the portfolio is well positioned for such an environment given our overweight to non-Treasuries as we seek to generate solid risk-adjusted returns.

Sincerely,

Thanos Bardas, David M. Brown, Andrew A. Johnson and Bradley C. Tank

Portfolio Co-Managers

Information about the principal risks of investing in the Fund is set forth in the prospectus and statement of additional information.

The composition, industries and holdings of the Fund are subject to change.

Core Bond Fund

TICKER SYMBOLS
Investor Class		NCRIX
Institutional Class		NCRLX
Class A		NCRAX
Class C		NCRCX

PORTFOLIO BY TYPE OF SECURITY
(as a % of Total Net Assets)
Asset-Backed	13.1	%
Corporate Debt	25.8
Mortgage-Backed Securities	30.1
U.S. Treasury Securities	45.5
Short-Term Investments	2.7	��
Liabilities, less cash, receivables and other assets	(17.2	)
Total	100.0

PERFORMANCE HIGHLIGHTS3,10
	Average Annual Total Return Ended 10/31/2010
	Inception Date	1 Year			5 Years			10 Years			Life of Fund
At NAV
Investor Class	02/01/1997		10.03	%		6.39	%		6.01	%		5.81	%
Institutional Class	10/01/1995		10.45	%		6.81	%		6.45	%		6.21	%
Class A15	12/20/2007		10.04	%		6.53	%		6.30	%		6.11	%
Class C15	12/20/2007		9.31	%		6.09	%		6.08	%		5.97	%
With Sales Charge
Class A15			5.38	%		5.61	%		5.84	%		5.81	%
Class C15			8.31	%		6.09	%		6.08	%		5.97	%
Index
Barclays Capital U.S. Aggregate Index13,14			8.01	%		6.45	%		6.38	%		6.41	%

Performance data quoted represent past performance, which is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Results are shown on a "total return" basis and include reinvestment of all income dividends and distributions.

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, please visit www.nb.com/performance.

For the period ended October 31, 2010, the 30-day SEC yield was 1.85%, 2.23%, 1.77% and 1.12% for Investor Class, Institutional Class, Class A and Class C shares, respectively.

As stated in the Fund's most recent prospectus, the total annual operating expense ratios for fiscal year 2009 were 1.17%, 0.72%, 1.13% and 2.45% for Investor Class, Institutional Class, Class A and Class C shares, respectively (prior to any fee waivers or expense reimbursements). The expense ratios net of waivers and/or reimbursements were 0.88%, 0.48%, 0.88% and 1.63% for Investor Class, Institutional Class, Class A and Class C shares, respectively. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through 10/31/2020 for Investor Class, Institutional Class, Class A and Class C shares.

Total Returns shown with a sales charge reflect the deduction of the current maximum initial sales charge of 4.25% for Class A shares and the applicable contingent deferred sales charges (CDSC) for Class C shares. The maximum CDSC for Class C shares is 1%, which is reduced to 0% after 1 year. The performance of the Fund's share classes will differ primarily due to different sales charge structures and class expenses. Please see the prospectus for more information about sales charge structures, if any, and class expenses for your share class.

Core Bond Fund

COMPARISON OF A $1,000,000 INVESTMENT

(000's Omitted)

This chart shows the value of a hypothetical $1,000,000 investment in the Fund over the past 10 fiscal years. The graph is based on the Institutional Class shares only; performance of other classes will vary due to differences in fee structures (see Performance Highlights chart on previous page). The result is compared with one or more benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indices have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of income dividends and distributions. Neither the Fund's returns nor the market indices shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. R esults represent past performance and do not indicate future results.

Please see Endnotes and Glossary of Indices for additional information.

Floating Rate Income Fund Commentary (Unaudited)

We are pleased to provide the first annual report for Neuberger Berman Floating Rate Income Fund, which was launched on December 29, 2009. As portfolio managers for the Fund, we seek to generate a high level of current income for shareholders while maintaining a focus on capital preservation. The Fund invests primarily in floating rate senior secured loans that we believe have the potential for attractive risk-adjusted returns. Central to our discipline is rigorous credit research, as we look for companies with historically stable cash flows, liquidity and a tangible asset base.

For the period from its inception through October 31, 2010, the Fund posted a solid absolute return but underperformed its benchmark, the S&P/LSTA Leveraged Loan Index.

While there were periods of volatility, most notably in late April and May given concerns regarding the European debt crisis, the floating rate bank loan market produced strong results during the reporting period. Supporting the market were generally strong demand from investors seeking incremental yields in the low interest rate environment and a contracting supply of floating rate bank loans. There was also a meaningful decline in floating rate loan defaults. During the reporting period, the default rate among the securities in the benchmark fell from approximately 9.6% to 2.3%. As was the case in 2009, lower-quality securities outperformed their higher-quality counterparts. Calendar year-to-date through October 31, 2010, the S&P/LSTA Leveraged Loan Index returned 8.41%, CCC-rated securities in the index gained 16.9% and BB-rated se curities rose 6.6%, respectively.

During the period, we increased the Fund's allocation to non-floating rate securities. We have the flexibility to allocate up to 20% of the portfolio to these securities and within this segment, we invested in fixed-rate senior secured bonds that offered higher yields than the floating rate loans offered by the same issuers. Given our focus on generating high current income, 17.7% of the Fund was held in fixed-rate securities at the end of the reporting period.

We also continued to actively participate in the new issuance market, emphasizing securities in the primary rather than the secondary bank loan market due to the former's higher current yields. In addition, we emphasized larger, highly liquid names that offered attractive yields in order to maintain a liquid portfolio.

Our higher-quality bias detracted from relative performance during the reporting period. Throughout the period, the Fund was underweighted in CCC-rated securities and overweighted in BB and B-rated issues versus the benchmark. We felt this positioning was appropriate given weak economic data and continued economic headwinds, such as elevated unemployment and ongoing strains in the housing market.

From a sector perspective, security selection in radio/TV, building and development, chemicals and aerospace and defense detracted the most from results. In contrast, our security selection in electronics, autos, financial and telecommunications added the most to positive performance.

Looking ahead, we have a positive outlook for the floating rate loan market. In our opinion, the supply/demand dynamics in the market will remain favorable. We expect to see a continued shrinking of the loan market. Moreover, given the likelihood of relatively low interest rates, we feel that demand for the segment will continue to be strong as investors search for higher yields. During the first 11 months of calendar year 2010, roughly $11.3 billion was invested in retail bank loan mutual funds. In contrast, $3.4 billion was invested in these mutual funds during all of 2009. We believe the economy will avert a double-dip recession. This, coupled with strengthening corporate balance sheets, could result in continued low default rates in 2011.

Sincerely,

Stephen J. Casey, Ann H. Benjamin, Thomas P. O'Reilly and Joseph P. Lynch

Portfolio Co-Managers

Information about the principal risks of investing in the Fund is set forth in the prospectus and statement of additional information.

The composition, industries and holdings of the Fund are subject to change.

Floating Rate Income Fund

TICKER SYMBOLS
Institutional Class		NFIIX
Class A		NFIAX
Class C		NFICX

PORTFOLIO BY MATURITY DISTRIBUTION
(as a % of Total Investments)
Less than One Year	12.9	%
One to Five Years	31.6
Five to Ten Years	52.7
Ten Years or Greater	2.8
Total	100.0

PERFORMANCE HIGHLIGHTS6
	Inception Date	Cumulative Total Return Ended 10/31/2010 Life of Fund
At NAV
Institutional Class17	12/30/2009		6.24	%
Class A	12/29/2009		5.85	%
Class C17	12/30/2009		5.39	%
With Sales Charge
Class A			1.39	%
Class C17			4.39	%
Index
S&P/LSTA Leveraged Loan Index13,14			8.80	%

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, please visit www.nb.com/performance.

For the period ended October 31, 2010, the 30-day SEC yield was 5.16%, 4.56% and 4.05% for Institutional Class, Class A and Class C shares, respectively.

As stated in the Fund's most recent prospectus, the total annual operating expense ratios for fiscal year 2009 were 1.38%, 1.75% and 2.50% for Institutional Class, Class A and Class C shares, respectively (prior to any fee waivers or expense reimbursements). The expense ratios net of waivers and/or reimbursements were 0.70%, 1.07% and 1.82% for Institutional Class, Class A and Class C, respectively. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through 10/31/2013 for Institutional Class, Class A and Class C.

Floating Rate Income Fund

COMPARISON OF A $10,000 INVESTMENT (WITH SALES CHARGE)

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception, if it has not operated for 10 years. The graph is based on the Class A shares only; performance of other classes will vary due to differences in fee structures (see Performance Highlights chart on previous page). The result is compared with one or more benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indices have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of income dividends and distributions. Neither the Fund's returns nor the market indices shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.

Please see Endnotes and Glossary of Indices for additional information.

High Income Bond Fund Commentary (Unaudited)

For the fiscal year ended October 31, 2010, Neuberger Berman High Income Bond Fund Investor Class posted a strong absolute return and modestly outperformed its benchmark, the Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index. (Please see Performance Highlights on next page for performance of all classes.)

To a great extent, the same factors that had triggered the high yield market rally that began in the spring of 2009 continued during the reporting period. These included the stabilizing economy, modest inflation, strengthening corporate balance sheets, better-than-expected profits and falling default rates. Aside from some temporary periods of volatility — triggered by the sovereign debt crisis in Europe and concerns regarding a possible double-dip recession — investor risk appetite was robust, further supporting high yield bond prices. All told, the Fund's benchmark posted positive returns during 11 of the 12 months covered by this report and gained 19.10% overall. The high yield market's gains were broad-based, as bonds rated CCC (a relatively low rating) and BB securities (rated higher) in the index returned 20.2% and 18.9% , respectively.

For the Fund, security selection in non-captive diversified finance, autos and media/non-cable were the largest positive contributors to relative performance. In contrast, an underweight in banking, along with security selection in retail and technology, were the largest detractors from relative results.

We made several adjustments to the portfolio during the reporting period, such as reducing the Fund's exposure to CCC-rated securities. This was accomplished through the sale of certain holdings that had appreciated and reached our target prices. In addition, a number of our holdings rated CCC were upgraded. Given these upgrades, the Fund's exposure to securities rated BB increased during the period. We also focused on buying higher-quality names in the new issue market, as we believed them to be attractively structured and priced. Elsewhere, given signs of moderating economic growth during the second half of the reporting period, we pared our exposure to more cyclical names and increased the Fund's weighting to certain defensive sectors.

Even with its outstanding results over the last two years, we continue to have a positive outlook for the high yield market. We believe that inflation will remain muted and that the U.S. economic recovery will continue, although growth rates could be muted by historical standards coming out of a severe recession. This type of environment has generally been historically positive for high yield bonds. In addition, the Federal Reserve has signaled that short-term interest rates could remain low "for an extended period" and we believe the additional quantitative easing announced in November could keep longer-term rates relatively low as well. Against this backdrop, we believe that demand for high yield bonds will remain strong. Other factors that could support the high yield market, if they continue, could be additional improvements in corpor ate earnings and declining high yield defaults. After peaking at 10.3% in 2009, default rates were approximately 2.4% at the end of the reporting period. We feel that defaults could decline further based on the gradually improving economy and the lack of potential default triggers within high yield issuers' balance sheets.

As always, we will continue to conduct extensive research on potential securities for the portfolio as we seek to generate consistently strong risk-adjusted returns.

Sincerely,

Ann H. Benjamin and Thomas P. O'Reilly

Portfolio Co-Managers

Information about the principal risks of investing in the Fund is set forth in the prospectus and statement of additional information.

The composition, industries and holdings of the Fund are subject to change.

High Income Bond Fund

TICKER SYMBOLS
Investor Class		NHINX
Institutional Class		NHILX
Class A		NHIAX
Class C		NHICX
Class R3		NHIRX

PORTFOLIO BY MATURITY DISTRIBUTION
(as a % of Total Investments)
Less than One Year	2.2	%
One to Five Years	23.9
Five to Ten Years	62.2
Ten Years or Greater	11.7
Total	100.0

PERFORMANCE HIGHLIGHTS2,9
	Average Annual Total Return Ended 10/31/2010
	Inception Date	1 Year			5 Years			10 Years			Life of Fund
At NAV
Investor Class	02/01/1992		19.71	%		9.23	%		8.27	%		8.28	%
Institutional Class12	05/27/2009		19.81	%		9.33	%		8.32	%		8.30	%
Class A12	05/27/2009		19.52	%		9.18	%		8.24	%		8.26	%
Class C12	05/27/2009		18.60	%		8.96	%		8.13	%		8.20	%
Class R312	05/27/2009		19.08	%		9.11	%		8.21	%		8.24	%
With Sales Charge
Class A12			14.49	%		8.23	%		7.77	%		8.01	%
Class C12			17.60	%		8.96	%		8.13	%		8.20	%
Index
Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index13,14			19.10	%		9.13	%		8.71	%		N/A

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, please visit www.nb.com/performance.

For the period ended October 31, 2010, the 30-day SEC Yield was 6.22%, 6.46%, 5.83%, 5.35% and 5.85% for Investor Class, Institutional Class, Class A, Class C and Class R3 shares, respectively.

As stated in the Fund's most recent prospectus, the total annual operating expense ratios for fiscal year 2009 were 1.06%, 0.93%, 1.29%, 2.04% and 5.55% for Investor Class, Institutional Class, Class A, Class C and Class R3 shares, respectively (prior to any fee waivers or expense reimbursements). The expense ratios net of waivers and/or reimbursements were 1.03%, 0.77%, 1.14%, 1.89% and 1.39% for Investor Class, Institutional Class, Class A, Class C and Class R3 shares, respectively. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through 10/31/2013 for Investor Class, Institutional Class, Class A, Class C and Class R3 shares.

High Income Bond Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures (see Performance Highlights chart on previous page). The result is compared with one or more benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indices have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of income dividends and distributions. Neither the Fund's returns nor the market indices shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results r epresent past performance and do not indicate future results.

Please see Endnotes and Glossary of Indices for additional information.

Municipal Intermediate Bond Fund Commentary (Unaudited)

For the fiscal year ended October 31, 2010, Neuberger Berman Municipal Intermediate Bond Fund posted a positive return but lagged its benchmark, the Barclays Capital 7-Year General Obligation Index.

Even though numerous states and local municipalities continued to face budgetary challenges, the municipal bond market generated solid results during the reporting period. Investor demand for municipal securities was generally robust as they looked to generate additional yield given the relatively low interest rate environment. Also supporting the market were low inflation and the falling supply of traditional tax-exempt municipal bonds. This was due, in large part, to increased issuance of taxable Build America Bonds (BABs). In many cases, municipalities preferred to issue BABs because the federal government provides cash subsidy payments equal to 35% of the issuing municipality's interest costs.

The Fund's underperformance versus its benchmark was largely the result of its defensive positioning and higher quality bias. With investors looking for higher yields, lower-rated municipal bonds outperformed their higher-rated counterparts. To illustrate, the Barclays Capital BAA Municipal Bond Index gained 11.2% during the reporting period, while the Barclays Capital AAA Municipal Bond Index returned 5.9%. We believed a higher-quality portfolio was warranted given only a modestly improving economy, continued high unemployment and relatively weak tax revenues.

From a sector perspective, we emphasized higher quality revenue and general obligation bonds that tend to perform relatively well in difficult economic times. This was not rewarded, as what we consider lower-quality sectors, such as health care, produced stronger results during the reporting period.

Also detracting from performance was the Fund's yield curve positioning. Throughout the reporting period, we utilized a barbell approach (investing in shorter and longer maturities). In contrast, the benchmark is concentrated in the six- to eight-year portion of the curve, which was among the best-performing portions of the municipal yield curve.

We made a number of adjustments to the portfolio during the reporting period, such as increasing our allocation to single family housing municipal securities. We believe these federally-backed mortgage bonds are high quality, have minimal prepayment risk and are compellingly valued relative to their credit quality.

Looking ahead, we continue to have a positive long-term outlook for the municipal market. While the economy is growing at a modest pace, we do not expect it to fall back into a recession. We also believe that demand for municipal securities will remain strong. This demand could be driven by higher federal, state and local tax rates. In addition, the Federal Reserve has signaled that short-term interest rates could remain low "for an extended period" and we think additional quantitative easing could keep longer-term rates relatively low as well. This could be supportive of continued strong demand for municipal securities. Finally, the municipal market, in our opinion, remains attractively valued when compared to Treasury counterparts.

That is not to say that we will not experience periods of increased volatility in the municipal market. Based on the results of the mid-term elections, there could be less federal government support for financially challenged state and local governments. Less federal assistance, coupled with only a modestly improving economy and relatively weak tax revenues, could result in an increase in municipal bond downgrades. Against this backdrop, we believe that maintaining our defensive posture and what we consider a higher quality portfolio is appropriate. In addition, we believe that active management and thorough, in-house fundamental research on the underlying credit characteristics of our existing and potential holdings will be essential to produce consistently strong risk-adjusted returns.

Sincerely,

James L. Iselin and S. Blake Miller

Portfolio Co-Managers

Information about the principal risks of investing in the Fund is set forth in the prospectus and statement of additional information.

The composition, industries and holdings of the Fund are subject to change.

Municipal Intermediate Bond Fund

TICKER SYMBOLS
Investor Class		NMUIX
Institutional Class		NMNLX
Class A		NMNAX
Class C		NMNCX

PORTFOLIO BY STATE AND TERRITORY
(as a % of Total Investments)
Alaska	0.5	%
Arizona	3.9
California	12.2
Colorado	4.3
District of Columbia	2.5
Florida	2.5
Georgia	2.0
Illinois	10.6
Indiana	2.5
Iowa	1.2
Kansas	3.2
Louisiana	0.5
Massachusetts	6.0
Michigan	3.9
Minnesota	1.4
Mississippi	1.8
Missouri	1.8
Nebraska	1.5
Nevada	2.3
New Jersey	3.7
New Mexico	1.9
New York	8.7
North Carolina	0.9
Ohio	0.5
Oregon	1.1
Pennsylvania	1.4
Puerto Rico	2.0
Rhode Island	1.0
South Carolina	0.1
South Dakota	0.8
Tennessee	1.5
Texas	7.3
Virginia	1.4
Washington	1.8
Wisconsin	1.3
Total	100.0

PERFORMANCE HIGHLIGHTS1,7,8

	Average Annual Total Return Ended 10/31/2010
	Inception Date	1 Year			5 Years			10 Years			Life of Fund
At NAV
Investor Class	07/09/1987		6.56	%		4.18	%		4.37	%		5.24	%
Institutional Class18	06/21/2010		6.62	%		4.19	%		4.38	%		5.25	%
Class A18	06/21/2010		6.57	%		4.18	%		4.37	%		5.24	%
Class C18	06/21/2010		6.18	%		4.10	%		4.34	%		5.23	%
With Sales Charge
Class A18			2.04	%		3.28	%		3.92	%		5.05	%
Class C18			5.18	%		4.10	%		4.34	%		5.23	%
Index
Barclays Capital 7-Year GO Index13,14			8.45	%		5.93	%		5.66	%		6.26	%

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, please visit www.nb.com/performance.

For the period ended October 31, 2010, the 30-day SEC Yield was 2.17%, 2.32%, 1.95% and 1.23% for Investor Class, Institutional Class, Class A and Class C shares, respectively. The tax-equivalent yield was 3.34%, 3.57%, 3.00% and 1.89% for Investor Class, Institutional Class, Class A and Class C shares, respectively, for an investor in the highest federal income tax bracket (35%).

As stated in the Fund's most recent prospectus, the total annual operating expense ratios for fiscal year 2009 were 1.12%, 0.58%, 0.95% and 1.70% for Investor Class, Institutional Class, Class A and Class C shares, respectively (prior to any fee waivers or expense reimbursements). The expense ratios net of waivers and/or reimbursements were 0.65%, 0.50%, 0.87% and 1.62% for the Investor Class, Institutional Class, Class A and Class C shares, respectively. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through 10/31/2013 for Investor Class, Institutional Class, Class A and Class C shares.

Municipal Intermediate Bond Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures (see Performance Highlights chart above). The result is compared with one or more benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indices have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of income dividends and distributions. Neither the Fund's returns nor the market indices shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represent pa st performance and do not indicate future results.

Please see Endnotes and Glossary of Indices for additional information.

Short Duration Bond Fund Commentary (Unaudited)

For the fiscal year ended October 31, 2010, Neuberger Berman Short Duration Bond Fund posted a positive return and outperformed its benchmark, the Barclays Capital 1-3 Year U.S. Government/Credit Index. The Fund also outperformed its previous benchmark, the BofA Merrill Lynch 1-3 Year Treasury Index, over the same period.

The Fund was well positioned for an environment that favored non-Treasuries. In particular, the Fund's commercial mortgage-backed securities (CMBS), non-agency mortgage-backed securities, investment-grade bonds and asset-backed securities enhanced results as their spreads (the difference in yield between Treasuries and other bond sectors) significantly narrowed during the 12-month reporting period. Within the investment grade sector, the Fund's financial bonds produced the best results.

Detracting somewhat from results was the Fund's defensive duration positioning. When the reporting period began, the Fund's duration was marginally shorter than that of its benchmark. We adjusted duration even shorter in May as interest rates fell sharply, given that we did not believe they would move substantially lower. However, this positioning was not rewarded as short-term rates fell to historically low levels toward the end of the reporting period. During the period, we used Treasury futures to manage the Fund's duration positioning.

We made a number of adjustments to the Fund during the reporting period, such as opportunistically reducing its weighting in non-agency mortgage-backed securities to take advantage of strengthening prices. We also pared our exposure to investment grade financials and increased its position in BBB-rated industrial bonds, where, in our opinion, we found attractively valued opportunities. The portfolio's exposure to CMBS was also reduced given their strong results. In addition to selling certain CMBS securities, a number of the Fund's positions matured. We largely reinvested the proceeds in a combination of asset-backed securities and corporate bonds.

Looking ahead, we believe the U.S. economy will avert a double-dip recession and inflation will remain benign. However, we feel that economic growth could be muted by historical standards coming out of a severe recession. In addition, the Federal Reserve has signaled that short-term interest rates could remain low "for an extended period" and in our view QE2 could keep longer-term rates relatively low as well. Against this backdrop, we believe that demand for non-Treasuries will remain strong. We feel the portfolio is appropriately positioned for such an environment with our overweight versus the benchmark in non-Treasuries as we seek to generate solid risk-adjusted returns.

Sincerely,

Thomas Sontag, Michael Foster and Richard Grau

Portfolio Co-Managers

Information about the principal risks of investing in the Fund is set forth in the prospectus and statement of additional information.

The composition, industries and holdings of the Fund are subject to change.

Short Duration Bond Fund

TICKER SYMBOLS
Investor Class		NSBIX
Trust Class		NSBTX
Institutional Class		NSHLX
Class A		NSHAX
Class C		NSHCX

PORTFOLIO BY TYPE OF SECURITY
(as a % of Total Net Assets)
Asset-Backed	8.3	%
Corporate Debt	23.2
U.S. Government Agency Securities	4.0
Mortgage-Backed Securities	35.8
U.S. Treasury Securities	27.6
Short-Term Investments	2.4
Liabilities, less cash, receivables and other assets	(1.3	)
Total	100.0

PERFORMANCE HIGHLIGHTS5

	Average Annual Total Return Ended 10/31/2010
	Inception Date	1 Year			5 Years			10 Years			Life of Fund
At NAV
Investor Class	06/09/1986		7.08	%		2.25	%		3.13	%		4.99	%
Trust Class16	08/30/1993		7.01	%		2.15	%		3.02	%		4.93	%
Institutional Class16	06/21/2010		7.16	%		2.27	%		3.14	%		4.99	%
Class A16	06/21/2010		7.10	%		2.26	%		3.13	%		4.99	%
Class C16	06/21/2010		6.81	%		2.20	%		3.11	%		4.98	%
With Sales Charge
Class A16			2.55	%		1.37	%		2.69	%		4.80	%
Class C16			5.81	%		2.20	%		3.11	%		4.98	%
Index
Barclays Capital 1-3 Year
U.S. Government/Credit Index13,14			3.23	%		4.75	%		4.60	%		6.02	%
BofA Merrill Lynch 1-3 Year Treasury Index13,14			2.53	%		4.40	%		4.18	%		5.81	%

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, please visit www.nb.com/performance.

For the period ended October 31, 2010, the 30-day SEC Yield was 1.31%, 1.22%, 1.50%, 1.10% and 0.49% for Investor Class, Trust Class, Institutional Class, Class A and Class C shares, respectively.

As stated in the Fund's most recent prospectus, the total annual operating expense ratios for fiscal year 2009 were 1.19%, 1.59%, 0.70%, 1.07% and 1.82% for Investor Class, Trust Class, Institutional Class, Class A and Class C shares, respectively (prior to any fee waivers or expense reimbursements). The expense ratios net of waivers and/or reimbursements were 0.72%, 0.82%, 0.52%, 0.89% and 1.64% for Investor Class, Trust Class, Institutional Class, Class A and Class C shares, respectively. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through 10/31/2013 for Investor Class, Trust Class, Institutional Class, Class A and Class C shares.

The Fund's broad-based index used for comparison purposes has been changed from the BofA Merrill Lynch 1-3 Year Treasury Index to the Barclays Capital 1-3 Year U.S. Government/Credit Index because the new index more closely resembles the characteristics of the Fund's investments.

Short Duration Bond Fund

COMPARISON OF A $10,000 INVESTMENT

This chart shows the value of a hypothetical $10,000 investment in the Fund over the past 10 fiscal years. The graph is based on the Investor Class shares only; performance of other classes will vary due to differences in fee structures (see Performance Highlights on previous page). The result is compared with one or more benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indices have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of income dividends and distributions. Neither the Fund's returns nor the market indices shown in the graph and table reflect the effect of taxes an investor would pay on Fund distributions or on the redemption of Fund shares. Results represe nt past performance and do not indicate future results.

Please see Endnotes and Glossary of Indices for additional information.

Strategic Income Fund Commentary (Unaudited)

For the fiscal year ended October 31, 2010, Neuberger Berman Strategic Income Fund posted a positive absolute return and outperformed its benchmark, the Barclays Capital U.S. Aggregate Index.

To a great extent, risk appetite was robust during the reporting period as investors were drawn to investments that offered relatively high yields in the low interest rate environment. Two notable exceptions occurred in late April and May, when concerns regarding the European sovereign debt crisis escalated, and again in August, as moderating economic data led to fears of a double-dip recession. However, these proved to be only temporary setbacks and risk aversion was quickly replaced by continued strong demand for non-Treasury fixed income securities. Also supporting non-Treasuries were strengthening corporate balance sheets and better-than-expected corporate profits, continued low interest rates, benign inflation and indications that the Federal Reserve would introduce another round of quantitative easing (QE2) to support the economy. A gainst this backdrop, non-Treasuries generally outperformed equal-duration Treasuries during the reporting period.

Many of the best performing sectors in the fixed income market were those that offered the most attractive yields, including high yield bonds, emerging market debt, commercial mortgage-backed securities (CMBS), investment grade bonds and non-agency mortgage-backed securities.

The Fund was well positioned for an environment that favored non-Treasuries. In particular, the Fund's overweight positions versus the benchmark in CMBS, high yield bonds, emerging market debt and investment-grade bonds enhanced results as their spreads (the difference in yield between Treasuries and other bond sectors) significantly narrowed during the 12-month reporting period. Within the corporate bond market, the Fund's industrial and financial bonds produced the best results.

Also contributing to performance was the Fund's yield curve positioning and an allocation to Treasury Inflation Protected Securities (TIPS). Throughout most of the period, the Fund had an overweight to the intermediate portion of the yield curve. This was beneficial for results as intermediate-term rates declined more than their short- and long-term counterparts. TIPS benefited from a decline in real (excluding inflation) yields and increasing expectations for higher inflation.

Modestly detracting from performance was the Fund's exposure to U.S. Treasuries and agency mortgage-backed securities as lower yielding and higher quality bonds lagged the overall fixed income market during the period.

We made a number of adjustments to the portfolio during the reporting period, such as opportunistically increasing its exposure to high yield bonds. In contrast, we pared the Fund's exposure to TIPS.

Looking ahead, we believe that the U.S. economy will avert a double-dip recession and that inflation will remain benign. However, we feel economic growth could be muted by historical standards coming out of a severe recession. In addition, the Federal Reserve has signaled that short-term interest rates could remain low "for an extended period" and in our view QE2 could keep longer-term rates relatively low as well. Against this backdrop, we believe that demand for non-Treasuries will remain strong. We feel the portfolio is well positioned for such an environment given our overweight in non-Treasuries as we seek to generate solid risk-adjusted returns.

Sincerely,

Thanos Bardas, David M. Brown, Andrew A. Johnson and Bradley C. Tank

Portfolio Co-Managers

Information about the principal risks of investing in the Fund is set forth in the prospectus and statement of additional information.

The composition, industries and holdings of the Fund are subject to change.

Strategic Income Fund

TICKER SYMBOLS
Institutional Class		NSTLX
Trust Class		NSTTX
Class A		NSTAX
Class C		NSTCX

PORTFOLIO BY TYPE OF SECURITY
(as a % of Total Net Assets)
Asset-Backed	12.5	%
Corporate Debt	41.8
Bank Loans	12.9
Government Securities	2.6
Mortgage-Backed Securities	15.0
U.S. Treasury Securities	20.9
Short-Term Investments	7.0
Liabilities, less cash, receivables and other assets	(12.7	)
Total	100.0

PERFORMANCE HIGHLIGHTS4
	Average Annual Total Return Ended 10/31/2010
	Inception Date	1 Year			5 Years			Life of Fund
At NAV
Institutional Class	07/11/2003		13.17	%		9.31	%		9.00	%
Trust Class11	04/02/2007		12.78	%		9.06	%		8.82	%
Class A11	12/20/2007		12.72	%		9.07	%		8.84	%
Class C11	12/20/2007		11.93	%		8.61	%		8.52	%
With Sales Charge
Class A11			7.93	%		8.13	%		8.19	%
Class C11			10.93	%		8.61	%		8.52	%
Index
Barclays Capital U.S. Aggregate Index13,14			8.01	%		6.45	%		5.19	%

Current performance may be lower or higher than the performance data quoted. For performance data current to the most recent month end, please visit www.nb.com/performance. Because the Fund had a different goal and strategy, which included managing assets by an asset allocation committee, prior to February 28, 2008, its performance during that time might have been different if current policies had been in effect.

For the period ended October 31, 2010, the 30-day SEC yield was 3.62%, 3.28%, 3.09% and 2.55% for Institutional Class, Trust Class, Class A and Class C shares, respectively.

As stated in the Fund's most recent prospectus, the total annual operating expense ratios for fiscal year 2009 were 2.51%, 3.03%, 1.96% and 2.58% for Institutional Class,Trust Class, Class A and Class C shares, respectively (prior to any fee waivers or expense reimbursements). The expense ratios net of waivers and/or reimbursements were 0.78%, 1.13%, 1.18% and 1.88% for Institutional Class, Trust Class, Class A and Class C shares, respectively. Neuberger Berman Management LLC has contractually agreed to limit certain expenses of the Fund through 10/31/2020 for Institutional Class, Class A and Class C shares, and 10/31/2013 for Trust Class shares.

Strategic Income Fund

COMPARISON OF A $1,000,000 INVESTMENT

(000's Omitted)

This chart shows the value of a hypothetical $1,000,000 investment in the Fund over the past 10 fiscal years, or since the Fund's inception, if it has not operated for 10 years. The graph is based on the Institutional Class shares only; performance of other classes will vary due to differences in fee structures (see Average Annual Total Return above).The result is compared with one or more benchmarks, which may include a broad-based market index and/or a narrower index. Please note that market indices have not been reduced to reflect any of the fees and costs of investing. All results include the reinvestment of income dividends and distributions. Neither the Fund's returns nor the market indices shown in the graph and table reflect the effect of taxes an investor would pay on Fu nd distributions or on the redemption of Fund shares. Results represent past performance and do not indicate future results.

Please see Endnotes and Glossary of Indices for additional information.

Endnotes

1	Neuberger Berman Management LLC ("Management") has contractually undertaken to forgo current payment of fees and/or reimburse Neuberger Berman Municipal Intermediate Bond Fund so that its total annual operating expenses (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, if any) ("Operating Expenses") are limited to 0.65%, 0.50%, 0.87% and 1.62% of average daily net assets for the Investor Class, Institutional Class, Class A and Class C, respectively. These undertakings last until October 31, 2013. Each class of the Fund has agreed to repay Management for fees and expenses forgone and/or its excess Operating Expenses previously reimbursed by Management, pursuant to the contractual expense limitation, so long as its annual Operating Expenses during the period do not exceed its abo ve-stated expense limitation, and the repayment is made within three years after the year in which Management issued the reimbursement or waived fees. Absent such forgone fees and/or reimbursements, the performance of each class of the Fund would have been lower. For the year ended October 31, 2010, there were no repayments of expenses to Management.

2	Management has contractually undertaken to forgo current payment of fees and/or reimburse Neuberger Berman High Income Bond Fund so that its total annual operating expenses (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, if any) ("Operating Expenses") are limited to 1.00%, 0.75%, 1.12%, 1.87% and 1.37% of average daily net assets for the Investor Class, Institutional Class, Class A, Class C and Class R3, respectively. These undertakings last until October 31, 2013. Each class of the Fund has agreed to repay Management for fees and expenses forgone and/or its excess Operating Expenses previously reimbursed by Management, pursuant to the contractual expense limitation, so long as its annual Operating Expenses during the period do not exceed its above-stated expense limitation, and the repayment is made within three years after the year in which Management issued the reimbursement or waived fees. Absent such forgone fees and/or reimbursements, the performance of each class of the Fund would have been lower. For the year ended October 31, 2010, the Investor Class of the Fund reimbursed Management $93,652.

3	Management has contractually undertaken to forgo current payment of fees and/or reimburse Neuberger Berman Core Bond Fund so that its total annual operating expenses (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, if any) ("Operating Expenses") are limited to 0.85%, 0.45%, 0.85% and 1.60% of average daily net assets for the Investor Class, Institutional Class, Class A and Class C, respectively. These undertakings last until October 31, 2020. Each class of the Fund has agreed to repay Management for fees and expenses forgone and/or its excess Operating Expenses previously reimbursed by Management, pursuant to the contractual expense limitation, so long as its annual Operating Expenses during the period do not exceed its above-stated expense limitation, and the repayment is mad e within three years after the year in which Management issued the reimbursement or waived fees. Absent such forgone fees and/or reimbursements, the performance of each class of the Fund would have been lower. For the year ended October 31, 2010, there were no repayments of expenses to Management. In addition, Management has voluntarily agreed to waive its management fee in the amount of 0.18% (0.25% prior to March 3, 2010 and 0.20% prior to March 1, 2006) of the Fund's average daily net assets. Management may, at its sole discretion, modify or terminate this voluntary waiver at any time without notice to the Fund. Absent such waiver, the performance of each class of the Fund would have been lower.

4	Management has contractually undertaken to forgo current payment of fees and/or reimburse Neuberger Berman Strategic Income Fund so that its total annual operating expenses (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, if any) ("Operating Expenses") are limited to 1.10%, 0.75% (effective March 1, 2008, and 0.85% through February 28, 2008), 1.15% and 1.85% of average daily net assets for the Trust Class, Institutional Class, Class A and Class C, respectively. These undertakings last until October 31, 2013 for the Trust Class and until October 31, 2020 for the Institutional Class, Class A and Class C. Each class of the Fund has agreed to repay Management for fees and expenses forgone and/or its excess Operating Expenses previously reimbursed by Management, pursuant to the con tractual expense limitation, so long as its annual

	Operating Expenses during the period do not exceed its above-stated expense limitation, and the repayment is made within three years after the year in which Management issued the reimbursement or waived fees. Absent such forgone fees and/or reimbursements, the performance of each class of the Fund would have been lower. For the year ended October 31, 2010, there were no repayments of expenses to Management.

5	Neuberger Berman Management LLC ("Management") has contractually undertaken to forgo current payment of fees and/or reimburse Short Duration Bond Fund so that the total annual operating expenses (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, if any) ("Operating Expenses") are limited to 0.70%, 0.50%, 0.80%, 0.87% and 1.62% for the Investor Class, Institutional Class, Trust Class, Class A and Class C, respectively. These undertakings last until October 31, 2013. Each class of the Fund has agreed to repay Management for fees and expenses forgone and/or its excess Operating Expenses previously reimbursed by Management, pursuant to the contractual expense limitation, so long as its annual Operating Expenses during the period do not exceed its above-stated expense limitation, and the repayment is made within three years after the year in which Management issued the reimbursement or waived fees. Absent such forgone fees and/or reimbursements, the performance of each class of the Fund would have been lower. For the year ended October 31, 2010, there were no repayments of expenses to Management.

6	Management has contractually undertaken to forgo current payment of fees and/or reimburse Neuberger Berman Floating Rate Income Fund so that its total annual operating expenses (excluding interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, if any) ("Operating Expenses") are limited to 0.70%, 1.07% and 1.82% of average daily net assets for the Institutional Class, Class A and Class C, respectively. These undertakings last until October 31, 2013. Each class of the Fund has agreed to repay Management for fees and expenses forgone and/or its excess Operating Expenses previously reimbursed by Management, pursuant to the contractual expense limitation, so long as its annual Operating Expenses during the period do not exceed its above-stated expense limitation, and the repayment is made within thr ee years after the year in which Management issued the reimbursement or waived fees. Absent such forgone fees and/or reimbursements, the performance of each class of the Fund would have been lower. For the year ended October 31, 2010, there were no repayments of expenses to Management.

7	Tax-equivalent effective yield is the taxable effective yield that an investor would have had to receive in order to realize the same level of yield after federal income taxes at the highest federal tax rate, currently 35%, assuming that all of a fund's income is exempt from federal income taxes.

8	A portion of the income may be a tax preference item for purposes of the federal alternative minimum tax for certain investors.

9	The Fund is the successor to Lipper High Income Bond Fund ("Lipper Fund"). The total return data for the periods prior to September 7, 2002, are those of Lipper Fund Premier Class. The performance information for Investor Class is that of Lipper Fund Premier Class for the period April 1, 1996, through September 6, 2002. The investment policies, objectives, guidelines and restrictions of the Fund are in all material respects the same as those of Lipper Fund. Returns would have been lower if the manager of Lipper Fund had not waived certain of its fees during the periods shown.

10	The Fund is the successor to Ariel Premier Bond Fund ("Ariel Bond Fund"). The total return data for the periods prior to June 13, 2005, are those of Ariel Bond Fund Institutional Class and Ariel Bond Fund Investor Class. The performance information for Institutional Class is that of Ariel Bond Fund Institutional Class for the period October 1, 1995 (date of inception) through June 10, 2005. The performance information for Investor Class is that of Ariel Bond Fund Institutional Class for the period October 1, 1995 through January 31, 1997 (the period prior to the class' commencement of operations), and that of Ariel Bond Fund Investor Class for the period February 1, 1997 (class' commencement of operations) through June 10, 2005. Ariel Bond Fund Institutional Class had lower expenses and typically higher returns than Ariel Bond Fund Invest or Class. The investment policies, guidelines and restrictions of the Fund are in all material respects the same as those of Ariel Bond Fund. Returns would have been lower if the manager of Ariel Bond Fund had not waived certain of its fees during the periods shown.

11	The Trust Class, Class A and Class C of Neuberger Berman Strategic Income Fund commenced operations on April 2, 2007, December 20, 2007 and December 20, 2007, respectively. The performance information for Trust Class, Class A and Class C prior to the class' commencement of operations is that of the Institutional Class of Neuberger Berman Strategic Income Fund. In making this translation, the performance information of the Institutional Class has been adjusted to reflect the appropriate sales charge applicable to Class A and Class C shares, but has not been adjusted to take into account differences in class specific Operating Expenses (such as 12b-1 fees). The Institutional Class has lower expenses and typically higher returns than Class A, Class C or Class R3.

12	The Institutional Class, Class A, Class C and Class R3 of Neuberger Berman High Income Bond Fund each commenced operations on May 27, 2009. The performance information for Institutional Class, Class A, Class C and Class R3 prior to the class' commencement of operations is that of the Investor Class of Neuberger Berman High Income Bond Fund. In making this translation, the performance information of the Investor Class has been adjusted to reflect the appropriate sales charge applicable to Class A and Class C shares, but has not been adjusted to take into account differences in class specific Operating Expenses (such as 12b-1 fees). The Investor Class has lower expenses and typically higher returns than Class A, Class C or Class R3. The Institutional Class has lower expenses and typically higher returns than Investor Class.

13	The date used to calculate Life of Fund performance for the index is the inception date of the oldest share class.

14	Please see "Glossary of Indices" starting on page 24 for a description of indices. Please note that indices do not take into account any fees and expenses or tax consequences of investing in the individual securities that they track, and that individuals cannot invest directly in any index. Data about the performance of these indices are prepared or obtained by Management and include reinvestment of all income dividends and distributions. The Fund may invest in securities not included in the described indices or may not invest in all securities included in the described indices.

15	Class A and Class C of Neuberger Berman Core Bond Fund each commenced operations on December 20, 2007. The performance information for Class A and Class C prior to the class' commencement of operations is that of the Institutional Class of Neuberger Berman Core Bond Fund. In making this translation, the performance information for the Institutional Class has been adjusted to reflect the appropriate sales charge applicable to Class A and Class C shares, but has not been adjusted to take into account differences in class specific Operating Expenses (such as Rule 12b-1 fees). The Institutional Class has lower expenses and typically higher returns than Class A or Class C.

16	For Neuberger Berman Short Duration Bond Fund, Life of Fund performance shown for the Trust Class, Institutional Class, Class A and Class C is that of the Fund's Investor Class from the inception date of the Investor Class to the inception date of each Class. The Trust Class of Short Duration Bond Fund commenced operations on August 30, 1993. The Institutional Class, Class A and Class C of Neuberger Berman Short Duration Bond Fund each commenced operations on June 21, 2010. The performance information for Trust Class, Institutional Class, Class A and Class C prior to the class' commencement of operations is that of the Investor Class of Neuberger Berman Short Duration Bond Fund. In making this translation, the performance information of the Investor Class has been adjusted to reflect the appropriate sales charge applicable to Class A and Class C shares, but has not been adjusted to take into account differences in class specific Operating Expenses (such as 12b-1 fees). The Investor Class has lower expenses and typically higher returns than Class A or Class C. The Institutional Class has lower expenses and typically higher returns than Investor Class.

17	The Institutional Class and Class C of Neuberger Berman Floating Rate Income Fund each commenced operations on December 30, 2009. The performance information for Institutional Class and Class C prior to the class' commencement of operations is that of Class A of Neuberger Berman Floating Rate Income Fund. In making this translation, the performance information (at NAV) of Class A has been adjusted to reflect the appropriate sales charge applicable to Class C shares, but has not been adjusted to take into account differences in class specific operating expenses (such as Rule 12b-1 fees). Class A has higher expenses and typically lower returns (at NAV) than Institutional Class. Class A has lower expenses and typically higher returns (at NAV) than Class C.

The Institutional Class, Class A and Class C of Neuberger Berman Municipal Intermediate Bond Fund each commenced operations on June 21, 2010. The performance information for Institutional Class, Class A and Class C prior to the class' commencement of operations is that of the Investor Class of Neuberger Berman Municipal Intermediate Bond Fund. In making this translation, the performance information of the Investor Class has been adjusted to reflect the appropriate sales charge applicable to Class A and Class C shares, but has not been adjusted to take into account differences in class specific Operating Expenses (such as 12b-1 fees). The Investor Class has lower expenses and typically higher returns than Class A and Class C. The Institutional Class has lower expenses and typically higher returns than Investor Class.

Glossary of Indices

Barclays Capital 1-3 Year U.S. Government/Credit Index:		An unmanaged index that includes all bonds in the U.S. Government/Credit Index with at least one to three years to maturity. The U.S. Government/Credit Index includes all securities in the Government and Credit Indices. The Government Index includes treasuries (i.e., public obligations of the U.S. Treasury that have remaining maturities of more than one year) and agencies (i.e., publicly issued debt of U.S. Government agencies, quasi-federal corporations, and corporate or foreign debt guaranteed by the U.S. Government). The Credit Index includes publicly issued U.S. corporate and foreign debentures and secured notes that meet specified maturity, liquidity, and quality requirements. All bonds in the index must meet the following additional criteria: must have at least one year to final maturity regardless of call features; must have at lea st $250 million par amount outstanding; must be rated investment-grade (Baa3/BBB- or higher) by at least two of the following ratings agencies: Standard & Poor's, Moody's Investors Services, Inc., and Fitch Inc.; must be fixed rate; must be dollar-denominated and non-convertible; and must be publicly issued.

Barclays Capital 7-Year General Obligation Index:		An unmanaged total return performance benchmark for the 7-year (6-8) maturity component of the Barclays Capital General Obligation ("G.O.") Index, which tracks the performance of the investment grade G.O. (state and local) tax-exempt bond market.

Barclays Capital U.S. Aggregate Index:		An unmanaged index that represents the U.S. domestic investment grade bond market. It is comprised of the Barclays Capital Government/Corporate Bond Index, Mortgage-Backed Securities Index, and Asset-Backed Securities Index, including securities that are of investment-grade quality or better, have at least one year to maturity, and have an outstanding par value of at least $100 million.

Barclays Capital U.S. Corporate High Yield 2% Issuer Cap Index:		An unmanaged sub-index of the Barclays Capital U.S. Corporate High Yield Index (which includes all U.S. dollar-denominated, taxable, fixed rate, noninvestment grade debt), capped such that no single issuer accounts for more than 2% of the index weight.

S&P/LTSA Leverage Loan Index:		A daily total return index that uses Loan Syndications and Trading Association (LSTA)/Loan Pricing Corporation (LPC) mark-to-market pricing to calculate market value change. On a real-time basis, the Index tracks the current outstanding balance and spread over LIBOR for fully funded term loans. The Index represents a broad cross section of leveraged loans syndicated in the United States, including dollar-denominated loans to overseas issuers.

BofA Merrill Lynch 1-3 Year Treasury Index:		An unmanaged total return market value index consisting of all coupon-bearing U.S. Treasury publicly placed debt securities with maturities between 1 and 3 years.

Please note that indices do not take into account any fees and expenses or any tax consequences of investing in the individual securities that they track and that individuals cannot invest directly in any index. Data about the performance of these indices or averages are prepared or obtained by Management and include reinvestment of all income dividends and distributions. The Funds may invest in securities not included in the above-described indices.

Information About Your Fund's Expenses

These tables are designed to provide information regarding costs related to your investments. All mutual funds incur operating expenses, which include management fees, fees for administrative services and costs of shareholder reports, among others. You may also incur transaction costs, such as sales charges (loads). The following examples are intended to help you understand your ongoing costs of investing in a fund, which are the operating expenses described above, and do not include transaction costs. The following examples are based on an investment of $1,000 made at the beginning of the six month period ended October 31, 2010 and held for the entire period. The table illustrates each fund's costs in two ways:

Actual Expenses and Performance:		The first section of the table provides information about actual account values and actual expenses in dollars, based on the fund's actual performance during the period. You may use the information in this line, together with the amount you invested, to estimate the expenses 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 section of the table under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid over the period.

Hypothetical Example for Comparison Purposes:		The second section of the table provides information about hypothetical account values and hypothetical expenses based on the fund's actual expense ratio and an assumed rate of return at 5% per year before expenses. This return is not the fund's actual return. 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 these funds versus other funds. To do so, compare the expenses shown in this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses in the tables are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the information under the heading "Hypothetical (5% annual return before expenses)" 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 transaction costs were included, your costs would have been higher.

Expense Information as of 10/31/10 (Unaudited)

Neuberger Berman Income Funds
	ACTUAL											HYPOTHETICAL (5% ANNUAL RETURN BEFORE EXPENSES)(3)
		Beginning Account Value 5/1/10		Ending Account Value 10/31/10			Expenses Paid During the Period(1) 5/1/10 - 10/31/10		Expense Ratio			Beginning Account Value 5/1/10		Ending Account Value 10/31/10		Expenses Paid During the Period(1) 5/1/10 - 10/31/10		Expense Ratio
Neuberger Berman Core Bond Fund
Investor Class		$	1,000.00	$	1,054.50		$	4.40		.85	%	$	1,000.00	$	1,020.92	$	4.33		.85	%
Institutional Class		$	1,000.00	$	1,056.50		$	2.33		.45	%	$	1,000.00	$	1,022.94	$	2.29		.45	%
Class A		$	1,000.00	$	1,054.50		$	4.40		.85	%	$	1,000.00	$	1,020.92	$	4.33		.85	%
Class C		$	1,000.00	$	1,050.50		$	8.27		1.60	%	$	1,000.00	$	1,017.14	$	8.13		1.60	%
Neuberger Berman Floating Rate Income Fund
Institutional Class		$	1,000.00	$	1,032.60		$	3.59		.70	%	$	1,000.00	$	1,021.68	$	3.57		.70	%
Class A		$	1,000.00	$	1,029.50		$	5.47		1.07	%	$	1,000.00	$	1,019.81	$	5.45		1.07	%
Class C		$	1,000.00	$	1,026.80		$	9.30		1.82	%	$	1,000.00	$	1,016.03	$	9.25		1.82	%
Neuberger Berman High Income Bond Fund
Investor Class		$	1,000.00	$	1,071.90		$	5.01		.96	%	$	1,000.00	$	1,020.37	$	4.89		.96	%
Institutional Class		$	1,000.00	$	1,071.80		$	3.92		.75	%	$	1,000.00	$	1,021.42	$	3.82		.75	%
Class A		$	1,000.00	$	1,069.90		$	5.84		1.12	%	$	1,000.00	$	1,019.56	$	5.70		1.12	%
Class C		$	1,000.00	$	1,065.80		$	9.74		1.87	%	$	1,000.00	$	1,015.78	$	9.50		1.87	%
Class R3		$	1,000.00	$	1,068.60		$	7.14		1.37	%	$	1,000.00	$	1,018.30	$	6.97		1.37	%
Neuberger Berman Municipal Intermediate Bond Fund
Investor Class		$	1,000.00	$	1,034.60		$	3.33		.65	%	$	1,000.00	$	1,021.93	$	3.31		.65	%
Institutional Class		$	1,000.00	$	1,032.50	(2)	$	1.85		.50	%	$	1,000.00	$	1,022.68	$	2.55		.50	%
Class A		$	1,000.00	$	1,032.00	(2)	$	3.22		.87	%	$	1,000.00	$	1,020.82	$	4.43		.87	%
Class C		$	1,000.00	$	1,028.30	(2)	$	5.99		1.62	%	$	1,000.00	$	1,017.04	$	8.24		1.62	%
Neuberger Berman Short Duration Bond Fund
Investor Class		$	1,000.00	$	1,022.20		$	3.57		.70	%	$	1,000.00	$	1,021.68	$	3.57		.70	%
Institutional Class		$	1,000.00	$	1,027.30	(2)	$	1.85		.50	%	$	1,000.00	$	1,022.68	$	2.55		.50	%
Trust Class		$	1,000.00	$	1,020.70		$	4.07		.80	%	$	1,000.00	$	1,021.17	$	4.08		.80	%
Class A		$	1,000.00	$	1,026.70	(2)	$	3.21		.87	%	$	1,000.00	$	1,020.82	$	4.43		.87	%
Class C		$	1,000.00	$	1,023.90	(2)	$	5.97		1.62	%	$	1,000.00	$	1,017.04	$	8.24		1.62	%
Neuberger Berman Strategic Income Fund
Institutional Class		$	1,000.00	$	1,058.10		$	3.89		.75	%	$	1,000.00	$	1,021.42	$	3.82		.75	%
Trust Class		$	1,000.00	$	1,056.30		$	5.70		1.10	%	$	1,000.00	$	1,019.66	$	5.60		1.10	%
Class A		$	1,000.00	$	1,055.90		$	5.96		1.15	%	$	1,000.00	$	1,019.41	$	5.85		1.15	%
Class C		$	1,000.00	$	1,052.20		$	9.57		1.85	%	$	1,000.00	$	1,015.88	$	9.40		1.85	%

(1)	For each class, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period shown), unless otherwise indicated.

(2)	For each class, expenses are equal to the annualized expense ratio for the class, multiplied by the average account value over the period, multiplied by 133/365 (to reflect the period shown of June 21, 2010 to October 31, 2010).

(3)	Hypothetical 5% annual return before expenses is calculated by multiplying the number of days in the most recent period divided by 365.

Schedule of Investments Neuberger Berman Core Bond Fund

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

U.S. Treasury Securities-Backed by the Full Faith and Credit of the U.S. Government (45.5%)
$	15,000	U.S. Treasury Bills, 0.01%, due 11/18/10	$	14,999
	10,000	U.S. Treasury Bills, 0.05%, due 12/9/10		9,999
	3,000	U.S. Treasury Bills, 0.09%, due 12/23/10		2,999
	5,000	U.S. Treasury Bills, 0.09%, due 2/10/11		4,998
	5,000	U.S. Treasury Bills, 0.16%, due 4/21/11		4,996
	1,365	U.S. Treasury Bonds, 8.75%, due 5/15/20		2,087
	205	U.S. Treasury Bonds, 6.88%, due 8/15/25		292
	2,305	U.S. Treasury Bonds, 4.50%, due 2/15/36		2,524
	8,476	U.S. Treasury Inflation Index Notes, 2.38%, due 1/15/17		9,713	ØØ
	6,470	U.S. Treasury Notes, 2.38%, due 10/31/14		6,859	ØØ
	12,200	U.S. Treasury Notes, 3.13%, due 1/31/17		13,258
	2,305	U.S. Treasury Notes, 3.63%, due 8/15/19		2,528	ØØ

	Total U.S. Treasury Securities-Backed by the Full Faith and Credit of the U.S. Government (Cost $73,651)			75,252

Mortgage-Backed Securities (30.1%)

Adjustable Rate Mortgages (1.4%)
	235	Banc of America Funding Corp., Ser. 2005-F, Class 4A1, 3.15%, due 9/20/35		188	µ
	306	First Horizon Mortgage Pass-Through Trust, Ser. 2005-AR5, Class 2A1, 2.76%, due 11/25/35		268	µ
	236	GSR Mortgage Loan Trust, Ser. 2005-AR3, Class 6A1, 2.95%, due 5/25/35		199	µ
	403	GSR Mortgage Loan Trust, Ser. 2007-AR1, Class 2A1, 5.65%, due 3/25/47		312	µ
	225	HSI Asset Loan Obligation, Ser. 2007-AR1, Class 2A1, 5.95%, due 1/25/37		147	µ
	49	IndyMac INDX Mortgage Loan Trust, Ser. 2006-AR7, Class 3A1, 5.35%, due 5/25/36		28	µ
	433	IndyMac INDX Mortgage Loan Trust, Ser. 2006-AR11, Class 2A1, 5.09%, due 6/25/36		241	µ
	590	JP Morgan Mortgage Trust, Ser. 2005-A3, Class 7CA1, 2.91%, due 6/25/35		521	µ
	257	Residential Accredit Loans, Inc., Ser. 2005-QA10, Class A31, 3.86%, due 9/25/35		177	µØØ
	339	Residential Accredit Loans, Inc., Ser. 2006-QA1, Class A21, 5.83%, due 1/25/36		185	µØØ
				2,266
Fannie Mae (21.0%)
	5,681	Pass-Through Certificates, 6.00%, due 11/1/15 – 6/1/38		6,178
	1,383	Pass-Through Certificates, 5.00%, due 3/1/21 – 7/1/39		1,474
	94	Pass-Through Certificates, 8.50%, due 4/1/34		109
	7,039	Pass-Through Certificates, 5.50%, due 11/1/35 – 1/1/39		7,565
	910	Pass-Through Certificates, 5.00%, TBA, 30 Year Maturity		967	Ø
	975	Pass-Through Certificates, 6.00%, TBA, 30 Year Maturity		1,059	Ø
	16,235	Pass-Through Certificates, 5.50%, TBA, 30 Year Maturity		17,430	Ø
				34,782
Freddie Mac (7.7%)
	492	Pass-Through Certificates, 5.00%, due 5/1/23 – 1/1/39		524
	54	Pass-Through Certificates, 6.50%, due 11/1/25		60
	345	Pass-Through Certificates, 5.31%, due 2/1/37		365	µ
	835	Pass-Through Certificates, 5.29%, due 4/1/37		888	µ
	894	Pass-Through Certificates, 5.50%, due 10/1/38 & 11/1/38		961
	8,260	Pass-Through Certificates, 4.00%, TBA, 30 Year Maturity		8,501	Ø
	1,375	Pass-Through Certificates, 5.50%, TBA, 30 Year Maturity		1,473	Ø
				12,772
	Total Mortgage-Backed Securities (Cost $49,735)			49,820

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Corporate Debt Securities (25.8%)

Airlines (1.6%)
$	530	Continental Airlines, Inc., Pass-Through Certificates, Ser. A, 7.25%, due 11/10/19	$	588
	434	Continental Airlines, Inc., Pass-Through Certificates, Ser. 2007-1, Class A, 5.98%, due 4/19/22		459
	505	Delta Air Lines, Inc., Pass-Through Certificates, 6.20%, due 7/2/18		541
	890	Delta Air Lines, Inc., Pass-Through Certificates, Ser. A, 7.75%, due 12/17/19		997
				2,585
Banking (6.9%)
	690	Bank of America Corp., Senior Unsecured Medium-Term Notes, Ser. L, 7.38%, due 5/15/14		782
	360	Bank of America Corp., Senior Unsecured Notes, 4.50%, due 4/1/15		375
	595	Bank of America Corp., Senior Unsecured Medium-Term Notes, Ser. L, 5.65%, due 5/1/18		626
	905	Bank of Tokyo-Mitsubishi UFJ Ltd., Notes, 1.60%, due 9/11/13		914	ñ
	520	Citigroup, Inc., Senior Unsecured Notes, 6.13%, due 11/21/17		579
	350	Citigroup, Inc., Senior Unsecured Notes, 8.13%, due 7/15/39		440
	685	Goldman Sachs Group, Inc., Senior Unsecured Medium-Term Notes, 3.63%, due 8/1/12		714
	325	Goldman Sachs Group, Inc., Senior Unsecured Medium-Term Notes, 6.00%, due 5/1/14		365
	580	Goldman Sachs Group, Inc., Subordinated Notes, 6.75%, due 10/1/37		608
	590	JP Morgan Chase & Co., Senior Unsecured Notes, 4.25%, due 10/15/20		594
	480	JP Morgan Chase & Co., Senior Unsecured Notes, 5.50%, due 10/15/40		484
	315	JP Morgan Chase Capital XV, Guaranteed Notes, 5.88%, due 3/15/35		302
	915	Morgan Stanley, Senior Unsecured Notes, 3.45%, due 11/2/15		920	Ø
	690	Morgan Stanley, Senior Unsecured Medium-Term Notes, Ser. F, 6.63%, due 4/1/18		775
	1,540	Morgan Stanley, Senior Unsecured Medium-Term Notes, Ser. F, 5.63%, due 9/23/19		1,617	ØØ
	465	Wachovia Corp., Senior Unsecured Medium-Term Notes, Ser. G, 5.50%, due 5/1/13		512	ØØ
	685	Wells Fargo & Co., Senior Notes, 3.63%, due 4/15/15		722
				11,329
Beverages (0.5%)
	625	Anheuser-Busch InBev Worldwide, Inc., Guaranteed Notes, 7.75%, due 1/15/19		808	ñØØ

Chemicals (0.4%)
	475	The Dow Chemical Co., Senior Unsecured Notes, 8.55%, due 5/15/19		610

Commercial Services (0.9%)
	885	ERAC USA Finance Co., Guaranteed Notes, 6.38%, due 10/15/17		1,035	ñØØ
	430	ERAC USA Finance Co., Guaranteed Notes, 7.00%, due 10/15/37		476	ñ
				1,511
Diversified Capital Goods (0.2%)
	315	Ingersoll-Rand Global Holding Co. Ltd., Guaranteed Notes, 6.00%, due 8/15/13		353

Diversified Financial Services (2.7%)
	560	American Express Credit Corp., Senior Unsecured Medium-Term Notes, Ser. C, 5.88%, due 5/2/13		616
	555	American Express Credit Corp., Senior Unsecured Notes, 2.75%, due 9/15/15		560
	805	American Honda Finance Corp., Senior Unsecured Notes, 3.50%, due 3/16/15		851	ñØØ
	830	General Electric Capital Corp., Senior Unsecured Notes, 5.90%, due 5/13/14		944
	730	General Electric Capital Corp., Senior Unsecured Medium-Term Notes, Ser. A, 6.88%, due 1/10/39		839
	615	Merrill Lynch & Co., Senior Unsecured Medium-Term Notes, Ser. C, 5.45%, due 2/5/13		654	ØØ
				4,464

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Electric - Integrated (0.1%)
$	235	FirstEnergy Solutions Corp., Guaranteed Notes, 4.80%, due 2/15/15	$	254
Food (1.6%)
	1,400	Grupo Bimbo SAB de CV, Guaranteed Notes, 4.88%, due 6/30/20		1,465	ñØØ
	140	Kraft Foods, Inc., Senior Unsecured Notes, 6.13%, due 2/1/18		165	ØØ
	820	Kraft Foods, Inc., Senior Unsecured Notes, 6.50%, due 2/9/40		940
				2,570
Gas Distribution (0.5%)
	420	Kinder Morgan Energy Partners L.P., Senior Unsecured Notes, 5.95%, due 2/15/18		480
	325	Kinder Morgan Energy Partners L.P., Senior Unsecured Notes, 6.50%, due 9/1/39		345	ØØ
				825
Industrial (1.4%)
	335	Husky Energy, Inc., Senior Unsecured Notes, 5.90%, due 6/15/14		374
	455	Medco Health Solutions, Inc., Senior Unsecured Notes, 4.13%, due 9/15/20		459
	300	Rio Tinto Finance (USA) Ltd., Guaranteed Notes, 5.20%, due 11/2/40		302
	675	Vale Overseas Ltd., Guaranteed Notes, 4.63%, due 9/15/20		699
	490	Weatherford Int'l Ltd., Guaranteed Notes, 5.13%, due 9/15/20		513
				2,347
Insurance (1.3%)
	450	Hartford Financial Services Group, Inc., Senior Unsecured Notes, 5.38%, due 3/15/17		468
	550	Hartford Financial Services Group, Inc., Senior Unsecured Notes, 5.50%, due 3/30/20		562
	260	Lincoln National Corp., Senior Unsecured Notes, 7.00%, due 6/15/40		285
	545	Prudential Financial, Inc., Senior Unsecured Medium-Term Notes, Ser. D, 3.88%, due 1/14/15		575	ØØ
	180	Prudential Financial, Inc., Senior Unsecured Notes, 6.63%, due 6/21/40		198
				2,088
Media (1.7%)
	650	DirecTV Holdings LLC, Guaranteed Notes, 3.55%, due 3/15/15		683
	575	DirecTV Holdings LLC, Guaranteed Notes, 6.00%, due 8/15/40		585
	285	News America, Inc., Guaranteed Notes, 6.90%, due 8/15/39		330
	580	Time Warner Cable, Inc., Guaranteed Notes, 8.75%, due 2/14/19		772	ØØ
	430	Time Warner, Inc., Guaranteed Notes, 6.10%, due 7/15/40		458
				2,828
Media - Broadcast (0.8%)
	955	NBC Universal, Inc., Senior Unsecured Notes, 4.38%, due 4/1/21		975	ñ
	365	NBC Universal, Inc., Senior Unsecured Notes, 5.95%, due 4/1/41		373	ñ
				1,348
Media - Cable (0.1%)
	220	Comcast Corp., Guaranteed Notes, 6.40%, due 3/1/40		243

Metals/Mining Excluding Steel (0.3%)
	530	Southern Copper Corp., Senior Unsecured Notes, 6.75%, due 4/16/40		569

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Office/Business Equipment (0.1%)
$	170	Xerox Corp., Senior Unsecured Notes, 6.40%, due 3/15/16	$	201
Pharmaceuticals (0.1%)
	90	Express Scripts, Inc., Guaranteed Notes, 5.25%, due 6/15/12		96
Pipelines (0.3%)
	425	Plains All American Pipeline L.P., Guaranteed Notes, 4.25%, due 9/1/12		446	ØØ
Real Estate (0.2%)
	330	WEA Finance LLC, Guaranteed Notes, 7.50%, due 6/2/14		384	ñØØ
REITs (0.4%)
	420	Simon Property Group LP, Senior Unsecured Notes, 10.35%, due 4/1/19		594	ØØ
Retail (0.3%)
	425	CVS Pass-Through Trust, Pass-Through Certificates, 7.51%, due 1/10/32		496	ñ
Specialty Retail (0.3%)
	420	Home Depot, Inc., Senior Unsecured Notes, 5.88%, due 12/16/36		436
Steel Producers/Products (1.5%)
	1,070	ArcelorMittal, Senior Unsecured Notes, 6.13%, due 6/1/18		1,170	ØØ
	745	ArcelorMittal, Senior Unsecured Notes, 9.85%, due 6/1/19		961
	405	ArcelorMittal, Senior Unsecured Notes, 5.25%, due 8/5/20		410
				2,541
Telecommunications (0.9%)
	465	AT&T, Inc., Senior Unsecured Notes, 4.85%, due 2/15/14		516
	430	Telecom Italia Capital SA, Guaranteed Unsecured Notes, 4.95%, due 9/30/14		465	ØØ
	410	Verizon New Jersey, Inc., Senior Unsecured Notes, Ser. A, 5.88%, due 1/17/12		433
				1,414
Tobacco (0.7%)
	795	Lorillard Tobacco Co., Guaranteed Notes, 8.13%, due 6/23/19		918	ØØ
	285	Lorillard Tobacco Co., Guaranteed Notes, 6.88%, due 5/1/20		306
				1,224
Total Corporate Debt Securities (Cost $39,720)				42,564
Asset-Backed Securities (13.1%)
	185	Banc of America Commercial Mortgage, Inc., Ser. 2007-3, Class A4, 5.84%, due 6/10/49		193	µ
	500	Banc of America Commercial Mortgage, Inc., Ser. 2007-4, Class ASB, 5.71%, due 2/10/51		544
	12	Banc of America Funding Corp., Ser. 2006-G, Class 2A2, 0.34%, due 7/20/36		12	µ
	77	Banc of America Funding Corp., Ser. 2006-G, Class 2A1, 0.48%, due 7/20/36		56	µ
	1,000	Bear Stearns Commercial Mortgage Securities, Ser. 2007-PW15, Class A4, 5.33%, due 2/11/44		1,041	ØØ
	400	Bear Stearns Commercial Mortgage Securities, Ser. 2007-PW17, Class A4, 5.69%, due 6/11/50		431
	330	Carrington Mortgage Loan Trust, Ser. 2006-NC3, Class A3, 0.41%, due 8/25/36		166	µ

See Notes to Schedule of Investments

PRINCIPAL AMOUNT

VALUE†

(000's omitted)			(000's omitted)

$	24	Chase Funding Mortgage Loan Asset-Backed Certificates, Ser. 2004-1, Class 2A2, 0.72%,	$	22	µ
		due 12/25/33
	110	Citigroup Mortgage Loan Trust, Inc., Ser. 2006-WFH1, Class M2, 0.63%, due 1/25/36		40	µ
	1,050	Commercial Mortgage Loan Trust, Ser. 2008-LS1, Class A4B, 6.21%, due 12/10/49		1,121	µ
	500	Commercial Mortgage Pass-Through Certificates, Ser. 2006-C8, Class A4, 5.31%, due 12/10/46		525
	144	Countrywide Asset-Backed Certificates, Ser. 2005-IM2, Class A3, 0.53%, due 1/25/36		110	µ
	75	Countrywide Asset-Backed Certificates, Ser. 2006-BC1, Class 1A, 0.46%, due 4/25/36		66	µ
	110	Countrywide Asset-Backed Certificates, Ser. 2007-BC2, Class 2A1, 0.35%, due 6/25/37		107	µ
	140	Credit Suisse First Boston Mortgage Securities Corp., Ser. 2001-CK6, Class A3, 6.39%, due 8/15/36		145
	225	Credit Suisse First Boston Mortgage Securities Corp., Ser. 2005-C4, Class A3, 5.12%, due 8/15/38		233
	139	Credit Suisse Mortgage Capital Certificates, Ser. 2007-TF2A, Class A1, 0.44%, due 4/15/22		122	ñµ
	80	Credit Suisse Mortgage Capital Certificates, Ser. 2007-C3, Class A4, 5.91%, due 6/15/39		83	µ
	1,200	Credit Suisse Mortgage Capital Certificates, Ser. 2006-C4, Class A3, 5.47%, due 9/15/39		1,281	ØØ
	45	Credit Suisse Mortgage Capital Certificates, Ser. 2007-C4, Class A4, 6.00%, due 9/15/39		47	µ
	100	Credit Suisse Mortgage Capital Certificates, Ser. 2007-C1, Class A3, 5.38%, due 2/15/40		101
	130	Credit Suisse Mortgage Capital Certificates, Ser. 2007-C5, Class A4, 5.70%, due 9/15/40		135
	250	Credit Suisse Mortgage Capital Certificates, Ser. 2008-C1, Class A3, 6.42%, due 2/15/41		268	µ
	38	Credit-Based Asset Servicing and Securitization, Ser. 2005-CB5, Class AV2, 0.52%, due 8/25/35		36	µ
	506	Credit-Based Asset Servicing and Securitization, Ser. 2006-CB3, Class AV3, 0.43%, due 3/25/36		413	µ
	66	Credit-Based Asset Servicing and Securitization, Ser. 2006-CB6, Class A22, 0.35%, due 7/25/36		66	µ
	750	CW Capital Cobalt Ltd., Ser. 2007-C3, Class A4, 6.01%, due 5/15/46		790	µ
	45	Equifirst Mortgage Loan Trust, Ser. 2003-2, Class 3A3, 1.01%, due 9/25/33		41	µ
	26	Fannie Mae Grantor Trust, Ser. 2002-T5, Class A1, 0.50%, due 5/25/32		25	µ
	98	Fannie Mae Whole Loan, Ser. 2003-W5, Class A, 0.48%, due 4/25/33		93	µ
	175	Greenwich Capital Commercial Funding Corp., Ser. 2007-GG11, Class A4, 5.74%, due 12/10/49		185
	600	GS Mortgage Securities Corp. II, Ser. 2006-GG6, Class A4, 5.55%, due 4/10/38		651
	400	GS Mortgage Securities Corp. II, Ser. 2006-GG8, Class A4, 5.56%, due 11/10/39		432
	500	GS Mortgage Securities Corp. II, Ser. 2007-GG10, Class A4, 6.00%, due 8/10/45		529	µ
	78	Household Home Equity Loan Trust, Ser. 2006-1, Class A1, 0.42%, due 1/20/36		71	µ
	93	Household Home Equity Loan Trust, Ser. 2006-2, Class A2, 0.44%, due 3/20/36		86	µ
	170	HSI Asset Securitization Corp. Trust, Ser. 2006-WMC1, Class A2, 0.36%, due 7/25/36		63	µ
	134	Impac Secured Assets Corp., Ser. 2006-3, Class A4, 0.35%, due 11/25/36		123	µ
	795	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2006-LDP9, Class A3, 5.34%, due 5/15/47		837
	1,200	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2007-LDPX, Class A3, 5.42%, due 1/15/49		1,256

2,380	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2007-CB19, Class A4, 5.93%, due 2/12/49	2,532	µØØ
1,270	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2007-LD11, Class A4, 6.00%, due 6/15/49	1,348	µØØ
555	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2007-CB20, Class ASB, 5.69%, due 2/12/51	609	ØØ
1,219	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2007-LD12, Class A4, 5.88%, due 2/15/51	1,303	ØØ
46	JP Morgan Mortgage Acquisition Corp., Ser. 2006-CW2, Class AV3, 0.36%, due 8/25/36	46	µ
642	Knollwood CDO Ltd., Ser. 2006-2A, Class A2J, 0.71%, due 7/13/46	0	#µØØ
10	Merrill Lynch First Franklin Mortgage Loan, Ser. 2007-2, Class A2A, 0.37%, due 5/25/37	10	µØØ
700	Merrill Lynch/Countrywide Commercial Mortgage Trust, Ser. 2007-5, Class A4, 5.38%, due 8/12/48	715	ØØ
1,400	Merrill Lynch/Countrywide Commercial Mortgage Trust, Ser. 2007-7, Class A4, 5.81%, due 6/12/50	1,455	µØØ
42	Morgan Stanley Capital I, Ser. 2004-WMC3, Class B3, 4.31%, due 1/25/35	2	µØØ
300	Morgan Stanley Capital I, Ser. 2007-IQ16, Class A4, 5.81%, due 12/12/49	315	ØØ
54	MSCC Heloc Trust, Ser. 2003-2, Class A, 0.52%, due 4/25/16	47	µØØ
183	Nomura Asset Acceptance Corp., Ser. 2007-2, Class A1A, 0.38%, due 4/25/47	101	µØØ
146	Opteum Mortgage Acceptance Corp., Ser. 2005-3, Class A1B, 0.52%, due 7/25/35	131	µØØ
405	Option One Mortgage Loan Trust, Ser. 2006-2, Class 2A2, 0.36%, due 7/25/36	312	µØØ

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

$	150	Residential Accredit Loans, Inc., Ser. 2006-QO7, Class 3A2, 0.46%, due 9/25/46	$	62	µØØ
	13	Residential Asset Mortgage Products, Inc., Ser. 2003-RS2, Class AII, 0.94%, due 3/25/33		8	µØØ
	34	Residential Asset Mortgage Products, Inc., Ser. 2003-RS3, Class AII, 0.98%, due 4/25/33		21	µØØ
	9	Saxon Asset Securities Trust, Ser. 2004-1, Class A, 0.80%, due 3/25/35		7	µØØ
	115	SLM Student Loan Trust, Ser. 2008-6, Class A1, 0.69%, due 10/27/14		116	µØØ
	4	Specialty Underwriting & Residential Finance, Ser. 2003-BC1, Class A, 0.94%, due 1/25/34		3	µØØ

	Total Asset-Backed Securities (Cost $20,985)			21,689

NUMBER OF SHARES

Short-Term Investments (2.7%)
	4,395,141	State Street Institutional Liquid Reserves Fund Institutional Class (Cost $4,395)		4,395

	Total Investments (117.2%) (Cost $188,486)			193,720	##

	Liabilities, less cash, receivables and other assets [(17.2%)]			(28,445	)

	Total Net Assets (100.0%)		$	165,275

See Notes to Schedule of Investments

Schedule of Investments Neuberger Berman Floating Rate Income Fund

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Bank Loan Obligationsµ (80.7%)

Aerospace & Defense (1.2%)
$	496	Booz Allen & Hamilton, Inc., Term Loan C, 6.00%, due 7/31/15	$	496
	496	TASC, Inc., Term Loan B, 5.75%, due 12/18/15		500
				996
All Telecom (8.3%)
	280	Cincinnati Bell, Inc., Term Loan, 6.50%, due 6/12/17		282
	249	Integra Telecom Holdings, Inc., Term Loan B, 9.25%, due 4/15/15		251
	800	Knology, Inc., Term Loan B, 5.50%, due 10/17/16		802
	250	Level 3 Financing, Inc., Term Loan A, 2.54%, due 3/13/14		233
	999	NTELOS, Inc., Term Loan B, 5.75%, due 8/7/15		1,005
	1,130	Sitel LLC, Term Loan B, due 1/30/14		1,022	¢^^
	832	Springboard Finance, LLC, Term Loan A, 7.00%, due 2/23/15		835
	1,500	Transaction Network Services, Inc., Term Loan C, 6.00%, due 11/18/15		1,503
	1,050	Yankee Cable Acquisition, LLC, Term Loan B1, 6.50%, due 8/26/16		1,040	¢^^
				6,973
Automotive (1.1%)
	925	United Components, Inc., Term Loan B, 6.25%, due 3/23/17		930
Building & Development (2.0%)
	796	Capital Automotive LP, Term Loan C, 2.76%, due 12/14/12		786
	711	Custom Building Products, Inc., Term Loan B, 5.75%, due 3/19/15		709
	27	Realogy Corp., Letter of Credit, 3.26%, due 10/10/13		24
	194	Realogy Corp., Term Loan, 3.26%, due 10/10/13		178
				1,697
Business Equipment & Services (3.1%)
	499	Advantage Sales & Marketing LLC, Second Lien Term Loan, 8.50%, due 5/5/17		504
	790	Brickman Group Holdings, Inc., Term Loan B, 7.25%, due 10/14/16		798	¢^^
	227	MSCI, Inc., Term Loan, 4.75%, due 6/1/16		228
	374	Protection One Alarm Monitoring, Inc., Term Loan B, 6.00%, due 5/16/16		373
	750	SourceCorp, Inc., Term Loan B, 5.76%, due 7/12/13		706
				2,609
Cable & Satellite Television (1.3%)
	222	Charter Communications Operating LLC, Term Loan, 7.25%, due 3/6/14		229
	833	Midcontinent Communications, Term Loan B, 6.25%, due 12/31/16		835
				1,064
Chemicals & Plastics (5.0%)
	870	General Chemical Holding Co., Term Loan B, 6.75%, due 10/6/15		876	¢^^
	333	Lyondell Chemical Co., Term Loan, 5.50%, due 4/8/16		335
	397	Momentive Performance Materials, Inc., Term Loan B, 2.56%, due 12/4/13		388
	685	PQ Corp., Second Lien Term Loan, 6.76%, due 7/30/15		645	¢^^
	402	Rockwood Specialties Group, Inc., Term Loan H, 6.00%, due 5/15/14		403
	790	Styron Corp., Term Loan B, 7.50%, due 6/17/16		803
	780	Univar NV, Term Loan, 3.26%, due 10/10/14		775
				4,225

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Clothing/Textiles (0.8%)
$	631	Phillips-Van Heusen Corp., Term Loan B, 4.75%, due 5/6/16	$	635

Conglomerates (3.6%)
	1,125	Goodman Global, Inc., Term Loan B, due 10/28/16		1,139	¢^^
	45	Goodman Global, Inc., Term Loan B, due 10/30/17		46	¢^^
	250	Goodman Global, Inc., Term Loan B, 6.25%, due 2/13/14		250
	470	JohnsonDiversey, Inc., Term Loan B, 5.50%, due 11/24/15		472
	1,125	Pinafore LLC, Term Loan B, 6.75%, due 9/29/16		1,137
				3,044
Containers & Glass Products (2.5%)
	365	BWAY Holding Co., Term Loan B,5.50% – 6.00%, due 6/16/17		365
	932	Graham Packaging Co. L.P., Term Loan C, 6.75%, due 4/5/14		939
	300	Graham Packaging Co. L.P., Term Loan D, 6.00%, due 9/23/16		303
	34	ICL Industrial Containers, Term Loan C, 6.00%, due 6/16/17		34
	500	Reynolds Group Holdings, Inc., Term Loan D, due 5/5/16		504	^^††
				2,145
Drugs (1.6%)
	364	Warner Chilcott Co. LLC, Term Loan A, 6.00%, due 10/30/14		362
	448	Warner Chilcott Co. LLC, Term Loan B2, 6.25%, due 4/30/15		450
	39	Warner Chilcott Co. LLC, Term Loan B4, 6.50%, due 2/22/16		40
	70	Warner Chilcott Corp., Term Loan, 6.25%, due 4/30/15		70
	269	Warner Chilcott Corp., Term Loan B1, 6.25%, due 4/30/15		270
	121	Warner Chilcott Corp., Term Loan B3, 6.50%, due 2/22/16		122
				1,314
Electric - Generation (1.1%)
	1,000	TPF Generation Holdings LLC, Second Lien Term Loan C, 4.54%, due 12/15/14		914	¢^^
Electronics/Electrical (6.6%)
	398	Aspect Software, Inc., Term Loan B, 6.25%, due 4/19/16		399
	750	AutoTrader.com, Inc., Term Loan B, 6.00%, due 6/14/16		752	¢^^
	530	Fidelity National Information Services, Inc., Term Loan B, 5.25%, due 7/18/16		537
	600	Fifth Third Processing Solutions, Term Loan B, due 11/30/16		606	¢^^
	150	Fifth Third Processing Solutions, Term Loan, due 11/30/17		152	¢^^
	1,122	Interactive Data Corp., Term Loan B, 6.75%, due 1/27/17		1,141
	853	Reynolds & Reynolds Co., Term Loan B, 5.25%, due 4/21/17		856
	374	SkillSoft Corp., Term Loan B, 6.50%, due 5/26/17		377
	750	Verint Systems, Inc., Term Loan B, 5.25%, due 5/25/14		741
				5,561
Equipment Leasing (2.0%)
	141	AIG/Delos Aircraft, Inc., Term Loan B2, 7.00%, due 3/17/16		144
	692	AIG/International Lease Finance Corp., Term Loan B1, 6.75%, due 3/17/15		707
	800	AWAS, First Lien Term Loan, 7.75%, due 6/10/16		817
				1,668
Farming/Agriculture (0.8%)
	700	WM Bolthouse Farms, Inc., First Lien Term Loan, 5.50%, due 2/11/16		702

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Financial Intermediaries (4.9%)
$	833	American General Finance Corp., Term Loan B, 7.25%, due 4/21/15	$	840
	380	CB Richard Ellis Services, Term Loan B, 5.75%, due 12/20/13		380
	500	CIT Group, Inc., Term Loan 3, 6.25%, due 8/11/15		508
	900	FIG LLC, Term Loan B, 5.75%, due 9/30/15		906
	239	First Data Corp., Term Loan B2, 3.01%, due 9/24/14		215
	498	LPL Holdings, Inc., Term Loan, 5.25%, due 6/28/17		494
	829	Ocwen Financial Corp., Term Loan, 9.00%, due 7/28/15		823
				4,166
Food Products (3.3%)
	564	Michael Foods, Inc., Term Loan B, 6.25%, due 6/29/16		573
	1,125	NBTY, Inc., Term Loan B, 6.25%, due 10/2/17		1,139
	1,047	Pinnacle Foods Holdings Corp., Term Loan D, 6.00%, due 4/2/14		1,058
				2,770
Food Service (0.9%)
	770	DineEquity, Inc., Term Loan B, 6.00%, due 10/19/17		776

Food/Drug Retailers (1.5%)
	325	Rite Aid Corp., Term Loan B, due 6/4/14		292	¢^^
	993	Rite Aid Corp., Term Loan 3, 6.00%, due 6/4/14		986
				1,278
Health Care (7.8%)
	499	Aurora Diagnostics LLC, Term Loan B, 6.25%, due 5/21/16		490
	500	Grifols SA, Term Loan B, due 6/4/16		505	¢^^
	750	HCA, Inc., Term Loan A, 1.54%, due 11/19/12		736
	280	IASIS Healthcare Corp., Term Loan, 5.54%, due 6/13/14		271
	594	IMS Health, Inc., Term Loan B, 5.25%, due 2/26/16		599
	1,051	Multiplan, Inc., Term Loan B, 6.50%, due 8/26/17		1,053
	927	RehabCare Group, Inc., Term Loan B, 6.00%, due 11/24/15		931
	1,100	Universal Health Services, Inc., Term Loan B, due 7/28/16		1,112	¢^^
	900	Valeant Pharmaceuticals Int'l, Term Loan B, due 9/27/16		909	¢^^
				6,606
Industrial Equipment (0.6%)
	250	Generac Acquisition Corp., Term Loan B, 2.76% – 2.79%, due 11/11/13		237
	242	Manitowoc Co., Inc., Term Loan B, 8.00%, due 11/6/14		243
				480
Insurance (0.9%)
	747	Sedgwick CMS Holdings, Inc., First Lien Term Loan, 5.50%, due 5/27/16		746	¢^^

Leisure Goods/Activities/Movies (2.6%)
	1,047	Cedar Fair L.P., Term Loan B, 5.50%, due 12/15/16		1,062
	350	Six Flags Theme Parks, Inc., Term Loan, due 12/31/16		361	¢^^
	734	Six Flags Theme Parks, Inc., Term Loan B, 6.00%, due 6/30/16		736
				2,159

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Lodging & Casinos (3.1%)
$	900	CityCenter Construction, Term Loan, due 6/30/12	$	870	¢^^
	450	Harrah's Operating Co., Inc., Term Loan B2, 3.29%, due 1/28/15		397
	497	Harrah's Operating Co., Inc., Term Loan B4, 9.50%, due 10/31/16		517
	306	VML US Finance LLC, Term Loan B, 4.78%, due 5/25/12		306	¢^^
	529	VML US Finance LLC, Term Loan B, 4.78%, due 5/27/13		529	¢^^
				2,619
Media - Broadcast (0.2%)
	221	Univision Communications, Inc., Term Loan, 4.51%, due 3/31/17		209

Nonferrous Metals/Minerals (1.4%)
	1,145	Fairmount Minerals Ltd., Term Loan B, 6.25%, due 8/5/16		1,157

Oil & Gas (1.2%)
	993	MEG Energy Corp., Term Loan D, 6.00%, due 4/3/16		994

Publishing (3.6%)
	246	Cengage Learning Acquisitions, Inc., Term Loan, 2.54%, due 7/3/14		225
	499	Cengage Learning Acquisitions, Inc., Term Loan 1, 7.50%, due 7/3/14		498
	229	Dex Media East LLC, Term Loan, 2.79% – 2.80%, due 10/24/14		186
	432	Dex Media West LLC, Term Loan, 7.00%, due 10/24/14		399
	919	Postmedia Network, Inc., Term Loan, 9.00%, due 7/13/16		929
	798	Quad Graphics, Inc., Term Loan B, 5.50%, due 4/14/16		793
				3,030
Radio & Television (1.1%)
	250	Clear Channel Communications, Inc., Term Loan B, 3.91%, due 1/28/16		198
	735	Fox Acquisition Sub LLC, Term Loan, 7.50%, due 7/14/15		727
				925
Retailers (except food & drug) (2.2%)
	398	Bass Pro Group LLC, Term Loan, 5.00% – 5.75%, due 4/9/15		398
	750	Michaels Stores, Inc., Term Loan B2, 4.81% – 5.00%, due 7/31/16		743	¢^^
	23	ServiceMaster Co., Term Loan DD, 2.76%, due 7/24/14		21
	227	ServiceMaster Co., Term Loan, 2.76% – 2.80%, due 7/24/14		216
	475	Toys 'R' Us-Delaware, Inc., Term Loan, 6.00%, due 9/1/16		477
				1,855
Surface Transport (0.6%)
	451	Hertz Corp., Term Loan B, 2.01%, due 12/21/12		447
	47	Hertz Corp., Letter of Credit, .34%, due 12/21/12		46
				493
Utilities (3.8%)
	925	Bicent Power LLC, Term Loan B, 2.29%, due 6/30/14		802
	250	FirstLight Power Resources, Second Lien Term Loan, 4.81%, due 5/1/14		229
	204	Great Point Power, Term Loan DD, 5.50%, due 3/10/17		204
	517	Longview Power LLC, Term Loan DD, due 2/28/14		443	¢^^

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

$	443	Longview Power LLC, Term Loan B, due 2/28/14	$	381	¢^^
	665	New Development Holdings LLC, Term Loan, 7.00%, due 7/3/17		677
	460	RRI Energy, Inc., Term Loan B, due 9/8/17		460	¢^^
				3,196
	Total Bank Loan Obligations (Cost $67,129)			67,936

Corporate Debt Securities (17.9%)

AirTransport (1.3%)
	500	Continental Airlines, Inc., Senior Secured Notes, 6.75%, due 9/15/15		521	ñØØ
	240	Continental Airlines, Inc., Pass-Through Certificates, Ser. 2009-1, Class A, 9.00%, due 7/8/16		278	ØØ
	150	Delta Air Lines, Inc., Pass-Through Certificates, Ser. 2001-1, Class B, 7.71%, due 9/18/11		154	ØØ
	135	Delta Air Lines, Inc., Senior Secured Notes, 9.50%, due 9/15/14		149	ñ
				1,102
Auto Loans (1.0%)
	250	Ford Motor Credit Co. LLC, Senior Unsecured Notes, 8.00%, due 12/15/16		293	ØØ
	480	Ford Motor Credit Co. LLC, Senior Unsecured Notes, 6.63%, due 8/15/17		537	ØØ
				830
Banking (1.2%)
	275	CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/14		277	ØØ
	750	CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/16		747	ØØ
				1,024
Chemicals (0.3%)
	250	Momentive Performance Materials, Inc., Guaranteed Notes, 12.50%, due 6/15/14		286

Consumer/Commercial/Lease Financing (0.6%)
	105	Int'l Lease Finance Corp., Senior Secured Notes, 6.50%, due 9/1/14		113	ñ
	250	Int'l Lease Finance Corp., Senior Secured Notes, 6.75%, due 9/1/16		272	ñ
	85	Int'l Lease Finance Corp., Senior Secured Notes, 7.13%, due 9/1/18		94	ñ
				479
Department Stores (0.9%)
	745	Sears Holdings Corp., Senior Secured Notes, 6.63%, due 10/15/18		743	ñØØ

Electric - Generation (3.6%)
	1,050	Calpine Corp., Senior Secured Notes, 7.25%, due 10/15/17		1,092	ñØØ
	400	Dynegy-Roseton Danskammer, Pass-Through Certificates, Ser. B, 7.67%, due 11/8/16		372	ØØ
	995	Energy Future Holdings Corp., Senior Secured Notes, 10.00%, due 1/15/20		1,042	ñØØ
	553	Homer City Funding LLC, Senior Secured Notes, 8.14%, due 10/1/19		520	ØØ
				3,026
Electronics (1.3%)
	250	NXP BV Funding LLC, Senior Secured Floating Rate Notes, 3.04%, due 10/15/13		238	µ
	770	NXP BV Funding LLC, Senior Secured Notes, 9.75%, due 8/1/18		840	ñ
				1,078

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Gas Distribution (1.4%)
$	905	Energy Transfer Equity L.P., Guaranteed Notes, 7.50%, due 10/15/20	$	986	ØØ
	250	Sabine Pass LNG L.P., Senior Secured Notes, 7.50%, due 11/30/16		231	ØØ
				1,217
Health Care (0.7%)
	250	HCA, Inc., Senior Secured Notes, 8.50%, due 4/15/19		281
	300	HCA, Inc., Senior Secured Notes, 7.25%, due 9/15/20		328
				609
Media - Broadcast (0.3%)
	245	Univision Communications, Inc., Senior Secured Notes, 7.88%, due 11/1/20		257	ñ

Media - Cable (1.1%)
	500	Echostar DBS Corp., Guaranteed Notes, 7.75%, due 5/31/15		544	ØØ
	365	Virgin Media Secured Finance PLC, Senior Secured Notes, 6.50%, due 1/15/18		392
				936
Packaging (0.6%)
	505	Reynolds Group Issuer, Inc., Senior Secured Notes, 7.13%, due 4/15/19		526	ñ

Specialty Retail (1.3%)
	1,025	Toys "R: US-Delaware, Inc., Senior Secured Notes, 7.38%, due 9/1/16		1,067	ñØØ

Support - Services (0.5%)
	350	RSC Equipment Rental, Inc., Senior Secured Notes, 10.00%, due 7/15/17		391	ñØØ

Telecom - Integrated/Services (0.9%)
	665	PAETEC Holding Corp., Senior Secured Notes, 8.88%, due 6/30/17		717

Telecom - Wireless (0.9%)
	700	Cricket Communications, Inc., Senior Secured Notes, 7.75%, due 5/15/16		754	ØØ
		Total Corporate Debt Securities (Cost $14,423)		15,042

NUMBER OF SHARES

Short-Term Investments (14.3%)
	30	State Street Institutional Government Money Market Fund Institutional Class		0
	12,023,359	State Street Institutional Liquid Reserves Fund Institutional Class		12,023	ØØ

	Total Short-Term Investments (Cost $12,023)			12,023

	Total Investments (112.9%) (Cost $93,575)			95,001	##

	Liabilities, less cash, receivables and other assets [(12.9%)]			(10,869	)

	Total Net Assets (100.0%)		$	84,132

See Notes to Schedule of Investments

Schedule of Investments Neuberger Berman High Income Bond Fund

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Bank Loan Obligationsµ (0.2%)

Media - Broadcast (0.2%)
$	1,609	Univision Communications, Inc., Term Loan B, 4.51%, due 3/31/17 (Cost $1,400)	$	1,523

Corporate Debt Securities (96.1%)

Aerospace/Defense (0.7%)
	2,500	BE Aerospace, Inc., Senior Unsecured Notes, 8.50%, due 7/1/18		2,800
	3,270	L-3 Communications Corp., Guaranteed Notes, Ser. B, 6.38%, due 10/15/15		3,368
				6,168
Airlines (2.0%)
	7,520	Continental Airlines, Inc., Senior Secured Notes, 6.75%, due 9/15/15		7,830	ñ
	2,210	Delta Air Lines, Inc., Senior Secured Notes, 9.50%, due 9/15/14		2,431	ñ
	6,890	United Airlines, Inc., Pass-Through Certificates, Ser. 2009-2, Class A, 9.75%, due 1/15/17		8,097
				18,358
Auto Loans (2.9%)
	2,750	Ford Motor Credit Co. LLC, Senior Unsecured Notes, 8.00%, due 12/15/16		3,219
	11,260	Ford Motor Credit Co. LLC, Senior Unsecured Notes, 6.63%, due 8/15/17		12,594	ØØ
	9,245	Ford Motor Credit Co. LLC, Senior Unsecured Notes, 8.13%, due 1/15/20		11,305
				27,118
Auto Parts & Equipment (0.2%)
	1,970	Goodyear Tire & Rubber Co., Guaranteed Notes, 8.25%, due 8/15/20		2,098

Automakers (1.5%)
	1,600	Ford Holdings, Inc., Guaranteed Notes, 9.30%, due 3/1/30		2,000	ØØ
	2,725	Ford Motor Co., Senior Unsecured Notes, 7.45%, due 7/16/31		3,093
	2,233	Ford Motor Co., Senior Unsecured Notes, 9.98%, due 2/15/47		2,783
	5,875	Navistar Int'l Corp., Guaranteed Notes, 8.25%, due 11/1/21		6,440
				14,316
Banking (6.7%)
	6,240	Ally Financial, Inc., Subordinated Notes, 8.00%, due 12/31/18		6,458
	4,980	Ally Financial, Inc., Guaranteed Notes, 8.00%, due 3/15/20		5,503	ñ
	11,060	Ally Financial, Inc., Guaranteed Notes, 8.00%, due 11/1/31		12,083
	5,305	CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/13		5,371
	8,390	CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/14		8,432
	9,763	CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/16		9,727
	15,053	CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/17		14,977
				62,551
Beverages (0.3%)
	2,390	Constellation Brands, Inc., Guaranteed Notes, 7.25%, due 9/1/16		2,629

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Building & Construction (0.3%)
$	3,330	Meritage Homes Corp., Guaranteed Notes, 7.15%, due 4/15/20	$	3,230

Building Materials (1.8%)
	1,540	Associated Materials LLC, Senior Secured Notes, 9.13%, due 11/1/17		1,617	ñ
	4,325	Masco Corp., Senior Unsecured Notes, 6.13%, due 10/3/16		4,428
	4,465	Ply Gem Industries, Inc., Senior Secured Notes, 11.75%, due 6/15/13		4,794
	4,300	USG Corp., Guaranteed Notes, 9.75%, due 8/1/14		4,494	ñ
	1,215	USG Corp., Senior Unsecured Notes, 6.30%, due 11/15/16		1,088
				16,421
Chemicals (2.8%)
	3,360	Ashland, Inc., Guaranteed Notes, 9.13%, due 6/1/17		3,872
	3,195	CF Industries, Inc., Guaranteed Notes, 6.88%, due 5/1/18		3,642
	775	CF Industries, Inc., Guaranteed Notes, 7.13%, due 5/1/20		899
	4,330	Huntsman Int'l LLC, Guaranteed Notes, 5.50%, due 6/30/16		4,303
	4,610	LBI Escrow Corp., Senior Secured Notes, 8.00%, due 11/1/17		5,048	ñ
	1,261	Momentive Performance Materials, Inc., Guaranteed Notes, 12.50%, due 6/15/14		1,441
	2,890	Momentive Performance Materials, Inc., Guaranteed Notes, 11.50%, due 12/1/16		3,128
	3,940	Momentive Performance Materials, Inc., Secured Notes, 9.00%, due 1/15/21		4,088	ñØ
				26,421
Consumer/Commercial/Lease Financing (2.4%)
	1,150	American General Finance Corp., Senior Unsecured Medium-Term Notes, Ser. I, 5.85%, due 6/1/13		1,067
	1,850	Int'l Lease Finance Corp., Senior Unsecured Notes, Ser. Q, 5.25%, due 1/10/13		1,866
	2,695	Int'l Lease Finance Corp., Senior Unsecured Medium-Term Notes, 5.88%, due 5/1/13		2,745
	2,200	Int'l Lease Finance Corp., Senior Unsecured Medium-Term Notes, Ser. R, 5.65%, due 6/1/14		2,200
	8,000	Int'l Lease Finance Corp., Senior Unsecured Notes, 8.63%, due 9/15/15		9,000	ñ
	2,885	Int'l Lease Finance Corp., Senior Unsecured Notes, 8.75%, due 3/15/17		3,282	ñ
	1,840	Int'l Lease Finance Corp., Senior Unsecured Notes, 8.88%, due 9/1/17		2,102
				22,262
Department Stores (0.5%)
	4,910	Sears Holdings Corp., Senior Secured Notes, 6.63%, due 10/15/18		4,898	ñ

Electric - Generation (4.4%)
	8,435	Calpine Corp., Senior Secured Notes, 7.25%, due 10/15/17		8,772	ñ
	5,995	Dynegy Holdings, Inc., Senior Unsecured Notes, 7.50%, due 6/1/15		4,646
	7,545	Dynegy Holdings, Inc., Senior Unsecured Notes, 7.75%, due 6/1/19		5,150
	4,165	Dynegy-Roseton Danskammer, Pass-Through Certificates, Ser. B, 7.67%, due 11/8/16		3,873
	2,835	Edison Mission Energy, Senior Unsecured Notes, 7.20%, due 5/15/19		2,041
	7,858	Edison Mission Energy, Senior Unsecured Notes, 7.63%, due 5/15/27		5,285
	4,791	Energy Future Intermediate Holding Co. LLC, Senior Secured Notes, 10.00%, due 12/1/20		5,018
	2,180	NRG Energy, Inc., Guaranteed Notes, 8.25%, due 9/1/20		2,311	ñ
	4,360	RRI Energy, Inc., Senior Unsecured Notes, 7.63%, due 6/15/14		4,393
				41,489
Electric - Integrated (0.2%)
	1,690	IPALCO Enterprises, Inc., Senior Secured Notes, 7.25%, due 4/1/16		1,842	ñ

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Electronics (2.8%)
$	4,930	Advanced Micro Devices, Inc., Senior Unsecured Notes, 8.13%, due 12/15/17	$	5,325
	1,135	Advanced Micro Devices, Inc., Senior Unsecured Notes, 7.75%, due 8/1/20		1,203	ñ
	5,715	Flextronics Int'l Ltd., Senior Subordinated Notes, 6.25%, due 11/15/14		5,822
	1,670	Freescale Semiconductor, Inc., Guaranteed Notes, 10.13%, due 12/15/16		1,630
	3,490	Freescale Semiconductor, Inc., Senior Secured Notes, 9.25%, due 4/15/18		3,734	ñ
	1,290	Freescale Semiconductor, Inc., Guaranteed Notes, 10.75%, due 8/1/20		1,338	ñ
	6,570	NXP BV Funding LLC, Senior Secured Notes, 9.75%, due 8/1/18		7,170	ñ
				26,222
Energy - Exploration & Production (5.0%)
	15,455	ATP Oil & Gas Corp., Senior Secured Notes, 11.88%, due 5/1/15		14,103	ñ
	5,525	Chesapeake Energy Corp., Guaranteed Notes, 9.50%, due 2/15/15		6,409
	1,555	Chesapeake Energy Corp., Guaranteed Notes, 6.63%, due 8/15/20		1,646
	2,345	Cimarex Energy Co., Guaranteed Notes, 7.13%, due 5/1/17		2,486
	1,586	Denbury Resources, Inc., Guaranteed Notes, 8.25%, due 2/15/20		1,768
	3,300	Linn Energy LLC, Senior Unsecured Notes, 8.63%, due 4/15/20		3,564	ñ
	4,445	Linn Energy LLC, Guaranteed Notes, 7.75%, due 2/1/21		4,590	ñ
	1,305	Pioneer Natural Resources Co., Senior Guaranteed Notes, 5.88%, due 7/15/16		1,367
	1,980	Quicksilver Resources, Inc., Guaranteed Notes, 11.75%, due 1/1/16		2,287
	8,300	SandRidge Energy, Inc., Guaranteed Notes, 8.00%, due 6/1/18		8,300	ñ
				46,520
Food & Drug Retailers (1.5%)
	3,370	Rite Aid Corp., Senior Secured Notes, 9.75%, due 6/12/16		3,656
	2,470	Rite Aid Corp., Senior Secured Notes, 10.38%, due 7/15/16		2,628
	5,285	Rite Aid Corp., Senior Secured Notes, 7.50%, due 3/1/17		5,093
	3,000	SUPERVALU, Inc., Senior Unsecured Notes, 8.00%, due 5/1/16		3,049
				14,426
Food - Wholesale (1.2%)
	2,395	Del Monte Corp., Guaranteed Notes, 7.50%, due 10/15/19		2,629
	1,980	Michael Foods, Inc., Senior Notes, 9.75%, due 7/15/18		2,158	ñ
	5,745	NBTY, Inc., Guaranteed Notes, 9.00%, due 10/1/18		6,104	ñ
				10,891
Forestry/Paper (0.6%)
	2,080	Georgia-Pacific LLC, Guaranteed Notes, 8.25%, due 5/1/16		2,387	ñ
	2,390	PE Paper Escrow GmbH, Senior Secured Notes, 12.00%, due 8/1/14		2,772	ñ
				5,159
Gaming (4.2%)
	6,115	FireKeepers Development Authority, Senior Secured Notes, 13.88%, due 5/1/15		7,170	ñ
	2,950	Harrah's Operating Co., Inc., Guaranteed Notes, 5.63%, due 6/1/15		2,198
	6,325	Harrah's Operating Co., Inc., Guaranteed Notes, 10.75%, due 2/1/16		5,748
	1,920	Harrah's Operating Co., Inc., Senior Secured Notes, 12.75%, due 4/15/18		1,901	ñ
	1,840	Marina District Finance Co., Inc., Senior Secured Notes, 9.50%, due 10/15/15		1,815	ñ
	1,840	MGM Mirage, Inc., Guaranteed Notes, 7.50%, due 6/1/16		1,637
	3,160	MGM Mirage, Inc., Senior Secured Notes, 11.13%, due 11/15/17		3,634
	550	MGM Mirage, Inc., Senior Unsecured Notes, 11.38%, due 3/1/18		570
	5,145	MGM Mirage, Inc., Senior Secured Notes, 9.00%, due 3/15/20		5,627	ñ

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

$	6,491	Pokagon Gaming Authority, Senior Notes, 10.38%, due 6/15/14	$	6,751	ñ
	2,365	San Pasqual Casino Development Group, Inc., Notes, 8.00%, due 9/15/13		2,294	ñ
				39,345
Gas Distribution (6.4%)
	400	El Paso Corp., Senior Unsecured Notes, 7.00%, due 6/15/17		436
	5,150	El Paso Energy Corp., Global Medium-Term Notes, 7.80%, due 8/1/31		5,510	ØØ
	12,530	Energy Transfer Equity L.P., Guaranteed Notes, 7.50%, due 10/15/20		13,658
	2,305	Ferrellgas L.P., Senior Unsecured Notes, 6.75%, due 5/1/14		2,334
	3,500	Ferrellgas Partners L.P., Senior Unsecured Notes, 6.75%, due 5/1/14		3,544
	3,355	Ferrellgas Partners L.P., Senior Unsecured Notes, 9.13%, due 10/1/17		3,707
	950	Inergy L.P., Guaranteed Notes, 8.75%, due 3/1/15		1,033
	2,580	Inergy L.P., Guaranteed Notes, 8.25%, due 3/1/16		2,709
	2,100	Inergy L.P., Guaranteed Notes, 7.00%, due 10/1/18		2,194	ñ
	2,200	Kinder Morgan Finance Co., Guaranteed Notes, 5.70%, due 1/5/16		2,269
	1,905	MarkWest Energy Partners L.P., Guaranteed Notes, Ser. B, 6.88%, due 11/1/14		1,948
	5,140	MarkWest Energy Partners L.P., Guaranteed Notes, Ser. B, 8.75%, due 4/15/18		5,641
	3,480	Regency Energy Partners L.P., Guaranteed Notes, 6.88%, due 12/1/18		3,645
	12,510	Sabine Pass LNG L.P., Senior Secured Notes, 7.50%, due 11/30/16		11,556
				60,184
Health Care (2.4%)
	1,345	Columbia Healthcare Corp., Senior Unsecured Notes, 7.50%, due 12/15/23		1,271
	1,985	Columbia/HCA Corp., Senior Unsecured Notes, 7.69%, due 6/15/25		1,866
	1,370	Columbia/HCA Corp., Senior Unsecured Notes, 7.05%, due 12/1/27		1,209
	5,085	HCA, Inc., Secured Notes, 9.25%, due 11/15/16		5,504
	4,330	HCA, Inc., Secured Notes, 9.63%, due 11/15/16		4,709
	7,135	HCA, Inc., Senior Secured Notes, 8.50%, due 4/15/19		8,027
				22,586
Health Facilities (2.3%)
	5,885	Community Health Systems, Inc., Guaranteed Notes, 8.88%, due 7/15/15		6,297
	4,210	Health Management Associates, Inc., Senior Secured Notes, 6.13%, due 4/15/16		4,336
	2,625	LVB Acquisition, Inc., Guaranteed Notes, 10.38%, due 10/15/17		2,927
	1,090	LVB Acquisition, Inc., Guaranteed Notes, 11.63%, due 10/15/17		1,228
	4,140	National MENTOR Holdings, Inc., Guaranteed Notes, 11.25%, due 7/1/14		4,254
	2,290	Tenet Healthcare Corp., Senior Secured Notes, 8.88%, due 7/1/19		2,576
				21,618
Health Services (1.3%)
	1,045	AMGH Merger Sub, Inc., Guaranteed Notes, 9.25%, due 11/1/18		1,082	ñ
	1,965	Omnicare, Inc., Guaranteed Notes, 6.88%, due 12/15/15		2,014
	700	Service Corp. Int'l, Senior Unsecured Notes, 6.75%, due 4/1/15		737
	4,345	Service Corp. Int'l, Senior Unsecured Notes, 7.50%, due 4/1/27		4,291
	3,860	Warner Chilcott Co. LLC, Guaranteed Notes, 7.75%, due 9/15/18		4,014	ñ
				12,138
Hotels (1.1%)
	1,780	Host Hotels & Resorts L.P., Guaranteed Notes, 6.88%, due 11/1/14		1,837
	1,225	Host Hotels & Resorts L.P., Guaranteed Notes, Ser. O, 6.38%, due 3/15/15		1,256
	2,720	Host Hotels & Resorts L.P., Guaranteed Notes, Ser. Q, 6.75%, due 6/1/16		2,825
	3,725	Starwood Hotels & Resorts Worldwide, Inc., Senior Unsecured Notes, 6.75%, due 5/15/18		4,125
				10,043

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Investments & Misc. Financial Services (0.8%)
$	7,230	Icahn Enterprises L.P., Guaranteed Notes, 7.75%, due 1/15/16	$	7,429

Leisure (0.9%)
	4,195	Cedar Fair L.P., Guaranteed Notes, 9.13%, due 8/1/18		4,510	ñ
	3,270	Royal Caribbean Cruises Ltd., Senior Unsecured Notes, 7.00%, due 6/15/13		3,540
	335	Royal Caribbean Cruises Ltd., Senior Unsecured Notes, 7.25%, due 6/15/16		365
				8,415
Machinery (1.5%)
	7,830	Case New Holland, Inc., Senior Notes, 7.88%, due 12/1/17		8,750	ñ
	4,965	The Manitowoc Co., Inc., Guaranteed Notes, 8.50%, due 11/1/20		5,182
				13,932
Media - Broadcast (2.6%)
	5,925	Clear Channel Communications, Inc., Senior Unsecured Notes, 5.75%, due 1/15/13		5,332
	3,075	Sirius XM Radio, Inc., Guaranteed Notes, 8.75%, due 4/1/15		3,317	ñ
	5,609	Umbrella Acquisition, Inc., Guaranteed Notes, 9.75%, due 3/15/15		5,878	ñ
	2,710	Univision Communications, Inc., Senior Secured Notes, 7.88%, due 11/1/20		2,845	ñ
	5	XM Satellite Radio, Inc., Guaranteed Notes, 13.00%, due 8/1/13		6	ñ
	6,895	XM Satellite Radio, Inc., Senior Unsecured Notes, 7.63%, due 11/1/18		7,085	ñ
				24,463
Media - Cable (5.7%)
	5,350	CCO Holdings LLC, Guaranteed Notes, 7.25%, due 10/30/17		5,524	ñ
	2,890	CCO Holdings LLC, Guaranteed Notes, 8.13%, due 4/30/20		3,121	ñ
	7,240	Cequel Communications Holdings I LLC, Senior Unsecured Notes, 8.63%, due 11/15/17		7,747	ñ
	4,265	CSC Holdings, Inc., Senior Unsecured Notes, 8.50%, due 6/15/15		4,697
	6,655	DISH DBS Corp., Guaranteed Notes, 7.75%, due 5/31/15		7,246
	6,450	DISH DBS Corp., Guaranteed Notes, 7.88%, due 9/1/19		7,071
	3,300	Videotron Ltee, Guaranteed Senior Unsecured Notes, 6.88%, due 1/15/14		3,345
	3,615	Videotron Ltee, Guaranteed Notes, 9.13%, due 4/15/18		4,071
	1,655	Virgin Media Finance PLC, Guaranteed Notes, 9.13%, due 8/15/16		1,769
	6,775	Virgin Media Finance PLC, Guaranteed Notes, Ser. 1, 9.50%, due 8/15/16		7,698
	550	Virgin Media Finance PLC, Guaranteed Notes, 8.38%, due 10/15/19		613
				52,902
Media - Services (1.3%)
	2,440	Nielsen Finance LLC, Guaranteed Notes, 11.50%, due 5/1/16		2,806
	8,465	WMG Acquisition Corp., Senior Secured Notes, 9.50%, due 6/15/16		9,121
				11,927
Metals/Mining Excluding Steel (1.3%)
	5,930	Arch Coal, Inc., Guaranteed Notes, 8.75%, due 8/1/16		6,656
	1,096	Arch Western Finance LLC, Guaranteed Notes, 6.75%, due 7/1/13		1,107
	3,050	FMG Resources (August 2006) Pty Ltd., Senior Notes, 7.00%, due 11/1/15		3,126	ñ
	1,310	Peabody Energy Corp., Guaranteed Notes, 7.38%, due 11/1/16		1,484
				12,373

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Multi - Line Insurance (0.9%)
$	7,765	American Int'l Group, Inc., Junior Subordinated Debentures, 8.18%, due 5/15/58	$	8,270	µ

Packaging (2.8%)
	2,550	Ardagh Packaging Finance PLC, Senior Secured Notes, 7.38%, due 10/15/17		2,703	ñ
	1,605	Ardagh Packaging Finance PLC, Guaranteed Notes, 9.13%, due 10/15/20		1,701	ñ
	1,295	Ball Corp., Guaranteed Notes, 6.63%, due 3/15/18		1,344
	2,200	Berry Plastics Corp., Secured Notes, 8.88%, due 9/15/14		2,239
	1,090	Berry Plastics Corp., Senior Secured Notes, 8.88%, due 9/15/14		1,109
	8,285	Berry Plastics Corp., Senior Secured Notes, 9.50%, due 5/15/18		8,119
	1,225	Crown Americas LLC, Guaranteed Notes, 7.63%, due 5/15/17		1,335
	1,030	Graham Packaging Co. L.P., Guaranteed Notes, 8.25%, due 10/1/18		1,066	ñ
	2,170	Reynolds Group Issuer, Inc., Senior Notes, 9.00%, due 4/15/19		2,254	ñ
	3,735	Reynolds Group Issuer, Inc., Senior Secured Notes, 7.13%, due 4/15/19		3,894	ñ
				25,764
Pharmaceuticals (0.6%)
	2,705	Valeant Pharmaceuticals Int'l, Guaranteed Notes, 6.75%, due 10/1/17		2,823	ñ
	2,470	Valeant Pharmaceuticals Int'l, Guaranteed Notes, 7.00%, due 10/1/20		2,594	ñ
				5,417
Printing & Publishing (1.3%)
	4,295	Cengage Learning Acquisitions, Inc., Senior Notes, 10.50%, due 1/15/15		4,445	ñ
	3,410	Gannett Co., Inc., Guaranteed Notes, 9.38%, due 11/15/17		3,828
	4,165	Gannett Co., Inc., Guaranteed Notes, 7.13%, due 9/1/18		4,285	ñ
				12,558
REITs (0.8%)
	820	Ventas Realty L.P., Guaranteed Notes, 6.50%, due 6/1/16		863
	5,425	Ventas Realty L.P., Guaranteed Notes, Ser. 1, 6.50%, due 6/1/16		5,711
	965	Ventas Realty L.P., Guaranteed Notes, 6.75%, due 4/1/17		998
				7,572
Software/Services (3.8%)
	2,180	Ceridian Corp., Guaranteed Notes, 11.25%, due 11/15/15		2,120
	9,330	Ceridian Corp., Guaranteed Notes, 12.25%, due 11/15/15		9,073
	3,920	Fidelity National Information Services, Inc., Guaranteed Notes, 7.63%, due 7/15/17		4,244	ñ
	2,740	Fidelity National Information Services, Inc., Guaranteed Notes, 7.88%, due 7/15/20		2,994	ñ
	5,170	Lender Processing Services, Inc., Guaranteed Notes, 8.13%, due 7/1/16		5,325
	1,194	SunGard Data Systems, Inc., Guaranteed Notes, 9.13%, due 8/15/13		1,222
	2,810	SunGard Data Systems, Inc., Guaranteed Notes, 10.63%, due 5/15/15		3,140
	6,665	SunGard Data Systems, Inc., Guaranteed Notes, 10.25%, due 8/15/15		7,023
				35,141
Specialty Retail (1.0%)
	7,845	Toys "R" Us Property Co. I LLC, Guaranteed Notes, 10.75%, due 7/15/17		8,963

Steel Producers/Products (1.1%)
	1,070	Steel Dynamics, Inc., Guaranteed Notes, 6.75%, due 4/1/15		1,109
	1,665	Steel Dynamics, Inc., Guaranteed Notes, 7.75%, due 4/15/16		1,778

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

$	4,445	Tube City IMS Corp., Guaranteed Notes, 9.75%, due 2/1/15	$	4,628
	3,330	United States Steel Corp., Senior Unsecured Notes, 6.65%, due 6/1/37		2,955
				10,470
Support - Services (2.2%)
	1,860	Knowledge Learning Corp., Inc., Guaranteed Notes, 7.75%, due 2/1/15		1,869	ñ
	2,390	RSC Equipment Rental, Inc., Senior Unsecured Notes, 9.50%, due 12/1/14		2,494
	1,230	RSC Equipment Rental, Inc., Guaranteed Notes, 10.25%, due 11/15/19		1,338
	2,430	United Rentals N.A., Inc., Guaranteed Notes, 7.00%, due 2/15/14		2,479
	2,915	United Rentals N.A., Inc., Guaranteed Notes, 10.88%, due 6/15/16		3,323
	3,005	United Rentals N.A., Inc., Guaranteed Notes, 8.38%, due 9/15/20		3,050
	2,455	West Corp., Guaranteed Notes, 11.00%, due 10/15/16		2,651
	3,245	West Corp., Guaranteed Notes, 8.63%, due 10/1/18		3,367	ñ
				20,571
Telecom - Integrated/Services (8.4%)
	13,025	Citizens Communications Corp., Senior Unsecured Notes, 9.00%, due 8/15/31		14,523
	1,915	Dycom Investments, Inc., Guaranteed Notes, 8.13%, due 10/15/15		1,963
	5,360	GCI, Inc., Senior Unsecured Notes, 8.63%, due 11/15/19		5,896
	5,355	Integra Telecom Holdings, Inc., Senior Secured Notes, 10.75%, due 4/15/16		5,663	ñ
	12,752	Intelsat Bermuda Ltd., Guaranteed Notes, 11.50%, due 2/4/17		13,620	ØØ
	1,655	Intelsat Jackson Holdings Ltd., Guaranteed Notes, 8.50%, due 11/1/19		1,808	ñ
	8,185	Level 3 Financing, Inc., Guaranteed Notes, 9.25%, due 11/1/14		8,021
	5,680	Level 3 Financing, Inc., Guaranteed Notes, 10.00%, due 2/1/18		5,439
	1,090	PAETEC Holding Corp., Guaranteed Notes, 9.50%, due 7/15/15		1,153
	3,370	PAETEC Holding Corp., Senior Secured Notes, 8.88%, due 6/30/17		3,631
	3,600	Qwest Communications Int'l, Inc., Guaranteed Notes, 7.13%, due 4/1/18		3,825	ñ
	5,350	Qwest Corp., Senior Unsecured Notes, 8.38%, due 5/1/16		6,447
	1,585	Windstream Corp., Guaranteed Notes, 8.13%, due 8/1/13		1,745
	4,310	Windstream Corp., Guaranteed Notes, 8.63%, due 8/1/16		4,579
				78,313
Telecom - Wireless (3.6%)
	9,985	Clearwire Communications LLC, Senior Secured Notes, 12.00%, due 12/1/15		11,059	ñ
	4,425	Cricket Communications, Inc., Senior Secured Notes, 7.75%, due 5/15/16		4,768
	3,592	MetroPCS Wireless, Inc., Guaranteed Notes, 9.25%, due 11/1/14		3,763
	14,700	Sprint Capital Corp., Guaranteed Notes, 6.88%, due 11/15/28		13,854
				33,444
	Total Corporate Debt Securities (Cost $834,183)			896,857

NUMBER OF SHARES

Short-Term Investments (2.2%)
	20,336,655	State Street Institutional Liquid Reserves Fund Institutional Class (Cost $20,337)		20,337

	Total Investments (98.5%) (Cost $855,920)			918,717	##

	Cash, receivables and other assets, less liabilities (1.5%)			14,460

	Total Net Assets (100.0%)		$	933,177

See Notes to Schedule of Investments

Schedule of Investments Neuberger Berman Municipal Intermediate Bond Fund

PRINCIPAL AMOUNT			SECURITY@@	VALUE†

(000's omitted)				(000's omitted)

Municipal Debt Securities (99.2%)
Alaska (0.5%)
	$ 500	Anchorage G.O., Ser. 2008-A, 5.00%, due 8/1/20		$	570

Arizona (3.9%)
	875	Northern Arizona Univ. Cert. of Participation (Research Infrastructure Proj.), Ser. 2005, (AMBAC Insured), 4.00%, due 9/1/14			928
	2,000	Pima Co. Cert. of Participation, Ser. 2009, 4.00%, due 6/1/12			2,081
	1,550	Salt River Proj. Agricultural Imp. & Pwr. Dist. Elec. Sys. Ref. Rev., Ser. 2002-A, 5.25%, due 1/1/18			1,642
					4,651
California (12.1%)
	450	California Ind. G.O., Ser. 2009-B, 5.00%, due 7/1/20			514
	1,000	California Pub. Works Board Lease Rev. Dept. of Mental Hlth. (Coalinga St. Hosp.), Ser. 2004-A, 5.50%, due 6/1/21			1,050
	2,000	California St. G.O., Ser. 2010, 5.25%, due 3/1/30			2,112
	200	California St. G.O. (Muni. Sec. Trust Receipts), Ser. 2001-SGA135, (AMBAC Insured), 0.31%, due 12/1/30			200	ñµa
	850	Folsom Spec. Tax Ref. (Comm. Facs. Dist. Number 2), Ser. 2010, 5.00%, due 12/1/19			902
	1,000	Los Angeles Dept. of Wtr. & Pwr. Sys. Rev., Ser. 2009-B, 5.25%, due 7/1/23			1,157	ØØ
	1,000	Sacramento City Fin. Au. Ref. Rev. (Master Lease Prog. Facs.), Ser. 2006-E, (AMBAC Insured), 5.25%, due 12/1/24			1,066
	905	San Diego Pub. Fac. Fin. Au. Lease Ref. Rev. (Ballpark), Ser. 2007-A, (AMBAC Insured), 5.25%, due 2/15/21			960	ñ
	1,500	San Diego Pub. Facs. Fin. Au. Sr. Swr. Ref. Rev., Ser. 2009-B, 5.00%, due 5/15/21			1,718
	630	San Francisco City & Co. Redev. Agcy. Lease Rev. Cap. Appreciation (George R. Moscone Convention Ctr.), Ser. 1992, 0.00%, due 7/1/12			619
	1,500	San Jose Redev. Agcy. Tax Allocation, Ser. 2005-A, (National Public Finance Guarantee Corp. Insured), 5.00%, due 8/1/19			1,581
	1,125	Santa Clara Co. East Side Union High Sch. Dist. G.O. (Election 2008), Ser. 2010-B, (Assured Guaranty Insured), 5.00%, due 8/1/23			1,232
	1,300	Walnut Pub. Fin. Au. Tax Allocation Rev. (Walnut Imp. Proj.), Ser. 2002, (AMBAC Insured), 5.38%, due 9/1/22			1,330	ØØ
					14,441
Colorado (4.3%)
	2,600	Colorado Ed. & Cultural Facs. Au. Rev. (Nat'l Jewish Federal Board Prog.), Ser. 2009-C7, (LOC: U.S. Bank), 0.28%, due 3/1/39			2,600	µß
	1,645	Colorado Wtr. Res. & Pwr. Dev. Au. Clean Wtr. Rev., Ser. 2010-A, 4.00%, due 9/1/25			1,730
	730	Denver City & Co. Cert. of Participation (Wastewater/ Rosyn Properties), Ser. 2010-B, 3.00%, due 12/1/16			767
					5,097
District of Columbia (2.5%)
	950	Dist. of Columbia Ref. Rev. (The American Univ.), Ser. 2008, (LOC: Bank of America), 0.30%, due 10/1/38			950	µß
	1,865	Dist. of Columbia Univ. Ref. Rev. (Georgetown Univ.), Ser. 2009-A, 5.00%, due 4/1/21			2,023	ß
					2,973

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			SECURITY@@	VALUE†

(000's omitted)				(000's omitted)

Florida (2.5%)
	$ 1,255	Port St. Lucie Research Facs. Rev. (Oregon Hlth. and Science Univ. Vaccine and Gene		$	1,326	ß
		Therapy Institute Florida Corp. Proj.), Ser. 2010, 5.00%, due 5/1/22
	1,580	Port St. Lucie Research Facs. Rev. (Oregon Hlth. and Science Univ. Vaccine and Gene Therapy Institute Florida Corp. Proj.), Ser. 2010, 5.00%, due 5/1/23			1,654	ß
					2,980
Georgia (2.0%)
	1,000	Gwinnett Co. Sch. Dist. G.O. Ref., Ser. 2010, 5.00%, due 2/1/25			1,217
	1,000	Gwinnett Co. Sch. Dist. G.O. Ref., Ser. 2010, 5.00%, due 2/1/27			1,172
					2,389
Illinois (10.4%)
	2,000	Chicago G.O., Ser. 2010-A, 5.00%, due 12/1/15			2,295
	1,000	Chicago O'Hare Int'l Arpt. Gen. Arpt. Third Lien Ref. Rev., Ser. 2005-B, (National Public Finance Guarantee Corp. Insured), 5.25%, due 1/1/17			1,135
	1,600	Cook Co. Sch. Dist. Number 144 G.O. (Ltd. Sch.), Ser. 2010-A, (AGM Insured), 5.25%, due 12/1/27			1,680
	600	Illinois Fin. Au. Rev. (Univ. of Chicago), Ser. 2007, 5.00%, due 7/1/22			664	ß
	1,650	Illinois St. (Build Illinois), Ser. 2010, 5.00%, due 6/15/17			1,888	ØØ
	2,000	Illinois St. G.O., Ser. 1997, (National Public Finance Guarantee Corp. Insured), 5.25%, due 7/1/22			2,005
	1,060	Illinois St. G.O., Ser. 2007, (National Public Finance Guarantee Corp. Insured), 5.00%, due 4/1/20			1,127
	1,500	Illinois St. G.O. Ref., Ser. 2010, (AGM Insured), 5.00%, due 1/1/15			1,646
					12,440
Indiana (2.4%)
	940	Indiana Muni. Pwr. Agcy. Pwr. Supply Sys. Ref. Rev., Ser. 2010-B, 5.00%, due 1/1/22			1,055
	1,615	Indiana St. Fin. Au. Rev. (St. Revolving Fund Prog.), Ser. 2009-A1, 5.00%, due 2/1/21			1,856
					2,911
Iowa (1.2%)
	1,345	Iowa Fin. Au. Hlth. Care Fac. Rev. (Genesis Hlth. Sys.), Ser. 2010, 5.00%, due 7/1/13			1,476	ß

Kansas (3.2%)
	1,000	Kansas St. Dev. Fin. Au. Hlth. Facs. Rev. (Hays Med. Ctr., Inc.), Ser. 2010-Q, 5.00%, due 5/15/35			981	Ø
	1,740	Kansas St. Dev. Fin. Au. Rev. (Dept. of Commerce Impact Prog.), Ser. 2009, 5.00%, due 6/1/16			2,009
	750	Wichita Hosp. Rev. (Facs. Imp.), Ser. 2009-IIIA, 4.50%, due 11/15/12			795	ß
					3,785
Louisiana (0.5%)
	570	Terrebonne Parish LA Hosp. Svc. Dist. Number 1 Hosp. Ref. Rev. (Gen. Med. Ctr. Proj.), Ser. 2010, 4.00%, due 4/1/15			595

Massachusetts (5.9%)
	2,000	Massachusetts Bay Trans. Au. Rev. (Assessment), Ser. 2006-A, 5.25%, due 7/1/30			2,393
	1,000	Massachusetts Bay Trans. Au. Sr. Sales Tax Rev., Ser. 2005-B, (National Public Finance Guarantee Corp. Insured), 5.50%, due 7/1/24			1,233
	1,000	Massachusetts Bay Trans. Au. Sr. Sales Tax Rev., Ser. 2006-A, 5.25%, due 7/1/34			1,170
	1,225	Massachusetts St. HFA Hsg. Rev. (Single Family), Ser. 2009-144, 3.95%, due 6/1/18			1,252
	500	Massachusetts St. Hlth. & Ed. Fac. Au. Rev. (Berklee College of Music), Ser. 2007-A, 5.00%, due 10/1/15			573	ß
	440	Massachusetts St. Turnpike Au. Western Turnpike Rev., Ser. 1997-A, (National Public Finance Guarantee Corp. Insured), 5.55%, due 1/1/17			442
					7,063

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			SECURITY@@	VALUE†

(000's omitted)				(000's omitted)

Michigan (3.8%)
$	1,000	Michigan St. Hsg. Dev. Au., Ser. 2009-B, 3.10%, due 6/1/11		$	1,004
	1,000	Michigan St. Trunk Line Ref. Rev., Ser. 2009, 5.00%, due 11/1/19			1,162
	2,160	Saginaw Valley St. Univ. Rev., Ser. 2010-A, 5.00%, due 7/1/13			2,350
					4,516
Minnesota (1.4%)
	1,500	Becker PCR (No. St. Pwr. Co.), Ser. 1992-A, 8.50%, due 3/1/19			1,702	ß

Mississippi (1.8%)
	1,045	Mississippi Dev. Bank Spec. Oblig. (Dept. Corrections), Ser. 2010-D, 5.00%, due 8/1/22			1,151
	790	Mississippi St. G.O. Ref., Ser. 2003-A, 5.25%, due 11/1/20			955
					2,106
Missouri (1.8%)
	1,040	Missouri St. Dev. Fin. Board Infrastructure Facs. Ref. Rev. Wtr. Sys., Ser. 2009-E, 4.00%, due 11/1/15			1,109
	1,000	Missouri St. Hlth. & Ed. Fac. Au. Rev. (Children's Mercy Hosp.), Ser. 2009, 5.13%, due 5/15/24			1,057	ß
					2,166
Nebraska (1.5%)
	1,520	Omaha Pub. Fac. Corp. Lease Rev. (Baseball Stadium Proj.), Ser. 2009, 5.00%, due 6/1/22			1,729

Nevada (2.3%)
	1,345	Clark Co. G.O. (Limited Tax Bond Bank), Ser. 2001, (National Public Finance Guarantee Corp. Insured), 5.50%, due 6/1/13			1,383
	450	Las Vegas Convention & Visitors Au. Rev., Ser. 1999, (AMBAC Insured), 6.00%, due 7/1/11			451
	750	Las Vegas Redev. Agcy. Tax Increment Rev., Ser. 2009-A, 7.50%, due 6/15/23			875
					2,709
New Jersey (3.7%)
	790	New Jersey St. Higher Ed. Assist. Au. Std. Loan Ref. Rev., Ser. 2010-1A, 4.75%, due 12/1/23			809
	1,000	New Jersey St. Turnpike Au. Turnpike Rev., Ser. 2009-H, 5.00%, due 1/1/20			1,149
	1,000	New Jersey Trans. Trust Fund Au. Trans. Sys. Rev., Ser. 2006-A, 5.25%, due 12/15/19			1,154
	1,255	Newark G.O., Ser. 2010-A, 4.00%, due 10/1/21			1,286
					4,398
New Mexico (1.9%)
	1,000	Albuquerque Muni. Sch. Dist. Number 012 (Sch. Bldg.) G.O., Ser. 2008-B, 4.50%, due 8/1/19			1,110
	1,000	New Mexico Fin. Au. St. Trans. Rev. Sr. Lien, Ser. 2004-A, (National Public Finance Guarantee Corp. Insured), 5.25%, due 6/15/21 Pre-Refunded 6/15/14			1,154
					2,264
New York (8.6%)
	400	Long Island Pwr. Au. Elec. Sys. Rev., Ser. 2006-F, (National Public Finance Guarantee Corp. Insured), 5.00%, due 5/1/19			446
	3,640	New York St. Dorm. Au. Rev., Ser. 2002-B, 5.25%, due 11/15/23 Putable 5/15/12			3,878	µ
	1,500	New York St. Dorm. Au. Rev. Non St. Supported Debt (Mtge. United Hlth. Hosp.), Ser. 2009, (FHA Insured), 4.00%, due 8/1/14			1,598	ß
	1,030	New York St. Env. Fac. Corp. Spec. Oblig. Rev. Ref. (Riverbank St. Park), Ser. 1996, (AMBAC Insured), 6.25%, due 4/1/12			1,079

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			SECURITY@@	VALUE†

(000's omitted)				(000's omitted)

$	250	New York St. Urban Dev. Corp. Ref. Rev. (Correctional Facs.), Ser. 1994-A, (AGM Insured),		$	267
		5.50%, due 1/1/14
	750	New York St. Urban Dev. Corp. Rev. (St. Personal Income Tax), Ser. 2009-A1, 5.00%, due 12/15/19			892
	2,000	Port Au. New York & New Jersey Rev. (One Hundred Fifty-Third), Ser. 2008, 4.50%, due 7/15/27			2,113
					10,273
North Carolina (0.9%)
	650	North Carolina St. Cap. Imp. Ltd. Oblig. (Annual Appropriation), Ser. 2009-A, 5.00%, due 5/1/19			765
	295	Western Carolina Univ. Research & Dev. Corp. Cert. of Participation (Western Carolina Univ. Std. Hsg.), Ser. 2008, (Assured Guaranty Insured), 5.25%, due 6/1/20			339	ß
					1,104
Ohio (0.5%)
	530	North Olmsted G.O., Ser. 1996, (AMBAC Insured), 6.20%, due 12/1/11			546

Oregon (1.1%)
	1,240	Oregon St. Hsg. & Comm. Svc. Dept. Mtge. Rev. (Single Family Mtge. Prog.), Ser. 2005-D, 4.40%, due 7/1/19			1,273

Pennsylvania (1.4%)
	1,285	Pennsylvania HFA Single Family Mtge. Rev., Ser. 2010-109, 2.45%, due 4/1/16			1,283
	340	Pennsylvania St. Pub. Sch. Bldg. Au. College Rev. (Montgomery Co. Comm. College), Ser. 2008, (AGM Insured), 5.00%, due 5/1/21			385	ß
					1,668
Puerto Rico (2.0%)
	500	Puerto Rico Elec. Pwr. Au. Pwr. Rev., Ser. 2010-XX, 5.25%, due 7/1/35			513
	1,745	Puerto Rico Elec. Pwr. Au. Pwr. Rev., Ser. 2010-XX, 5.25%, due 7/1/40			1,819
					2,332
Rhode Island (1.0%)
	1,200	Rhode Island St. Std. Loan Au. Std. Loan Rev. (Sr. Prog.), Ser. 2010-A, 4.40%, due 12/1/19			1,222

South Carolina (0.1%)
	200	Piedmont Muni. Pwr. Agcy. Elec. Rev. (Cap. Appreciation), Ser. 1988-A, (AMBAC Insured), 0.00%, due 1/1/13			168

South Dakota (0.8%)
	1,000	South Dakota St. Hlth. & Ed. Facs. Au. Rev. (Reg. Hlth.), Ser. 2010, 4.38%, due 9/1/24			1,004	ß

Tennessee (1.5%)
	1,600	Metro. Nashville Arpt. Au. Ref. Rev. Impt., Ser. 2010-B, (AGM Insured), 4.00%, due 7/1/15			1,757

Texas (7.2%)
	500	Dallas Fort Worth Int'l Arpt. Ref. Rev., Ser. 2009-A, 5.00%, due 11/1/24			537
	750	Fort Bend Independent Sch. Dist. Ref. G.O. (Sch. Bldg.), Ser. 2008, (PSF Insured), 5.00%, due 8/15/21			863
	1,000	Grapevine Combination Tax & Tax Increment Reinvestment Zone Rev. Cert. of Oblig. G.O., Ser. 2000, (National Public Finance Guarantee Corp. Insured), 5.63%, due 8/15/15			1,003

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			SECURITY@@	VALUE†

(000's omitted)				(000's omitted)
	$ 1,000	Harris Co. Cultural Ed. Fac. Fin. Corp. Ref. Rev. (Methodist Hosp. Sys.), Ser. 2009-B1,		$	1,067	µß
		5.00%, due 12/1/28 Putable 6/1/12
	500	Harris Co. Cultural Ed. Fac. Fin. Corp. Rev. (Methodist Hosp. Sys.), Ser. 2008-B, 5.25%, due 12/1/17			570	ß
	825	Houston Ref. G.O. (Pub. Imp.), Ser. 2009-A, 4.00%, due 3/1/16			925
	1,000	Houston Wtr. & Swr. Sys. Jr. Lien Ref. Rev., Ser. 2001-B, (National Public Finance Guarantee Corp. Insured), 5.50%, due 12/1/24			1,277
	450	Mesquite Independent Sch. Dist. G.O. (Sch. Bldg.), Ser. 2009, 5.00%, due 8/15/17			527
	590	Mesquite Independent Sch. Dist. G.O. (Sch. Bldg.), Ser. 2009, 5.00%, due 8/15/18			696
	1,000	Weatherford Independent Sch. Dist. G.O. (Sch. Bldg.), Ser. 2002-A, (PSF Insured), 5.00%, due 2/1/12			1,057
					8,522
Virginia (1.4%)
	1,690	Virginia St. Hsg. Dev. Au. Homeownership Mtge. Rev., Ser. 2010-B, 2.10%, due 9/1/15			1,688

Washington (1.8%)
	2,000	Energy Northwest Elec. Ref. Rev. (Proj. Number 1), Ser. 2002-B, (National Public Finance Guarantee Corp. Insured), 6.00%, due 7/1/17			2,169

Wisconsin (1.3%)
	500	Wisconsin St. G.O., Ser. 2002-C, (National Public Finance Guarantee Corp. Insured), 5.25%, due 5/1/14 Pre-Refunded 5/1/12			536
	1,000	Wisconsin St. Hlth. & Ed. Fac. Au. Rev. (Marquette Univ.), Ser. 1998, (National Public Finance Guarantee Corp. Insured), 5.25%, due 6/1/13			1,003	ß
					1,539
	Total Investments (99.2%) (Cost $114,935)				118,226	##

	Cash, receivables and other assets, less liabilities (0.8%)				910

	Total Net Assets (100.0%)			$	119,136

See Notes to Schedule of Investments

Schedule of Investments Neuberger Berman Short Duration Bond Fund

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

U.S. Treasury Securities-Backed by the Full Faith and Credit of the U.S. Government (27.6%)
	$ 3,550	U.S. Treasury Notes, 4.75%, due 3/31/11	$	3,617
	6,200	U.S. Treasury Notes, 1.00%, due 9/30/11		6,242
	5,105	U.S. Treasury Notes, 3.88%, due 10/31/12		5,468
	2,655	U.S. Treasury Notes, 2.00%, due 11/30/13		2,774

	Total U.S. Treasury Securities-Backed by the Full Faith and Credit of the U.S. Government (Cost $17,944)			18,101

U.S. Government Agency Securities (4.0%)
	1,325	Citigroup Funding, Inc., Guaranteed FDIC Floating Rate Medium-Term Notes, 0.59%, due 3/30/12		1,334	µ@
	1,275	Wells Fargo & Co., Guaranteed FDIC Floating Rate Notes, 0.51%, due 6/15/12		1,280	µ@

	Total U.S. Government Agency Securities (Cost $2,600)			2,614

Mortgage-Backed Securities (35.8%)

Adjustable Alt-A Mixed Balance (0.9%)
	808	Countrywide Home Loan Mortgage Pass-Through Trust, Ser. 2006-HYB3, Class 1A1A, 3.18%, due 5/20/36		573	µ

Adjustable Alt-B Mixed Balance (0.8%)
	676	Lehman XS Trust, Floating Rate, Ser. 2005-1, Class 2A1, 1.76%, due 7/25/35		506	µ

Adjustable Conforming Balance (1.8%)
	1,640	Adjustable Rate Mortgage Trust, Ser. 2005-10, Class 4A1, 3.14%, due 1/25/36		1,190	µ

Adjustable Jumbo Balance (3.9%)
	1,589	GMAC Mortgage Corp. Loan Trust, Ser. 2006-AR1, Class 1A1, 4.98%, due 4/19/36		1,289	µ
	1,500	Wells Fargo Mortgage Backed Securities Trust, Ser. 2005-AR16, Class 4A2, 2.89%, due 10/25/35		1,273	µ
				2,562
Adjustable Mixed Balance (3.8%)
	1,126	Credit Suisse First Boston Mortgage Securities Corp., Ser. 2004-AR4, Class 2A1, 2.84%, due 5/25/34		1,012	µ
	1,589	First Horizon Mortgage Pass-Through Trust, Ser. 2005-AR5, Class 2A1, 2.99%, due 11/25/35		1,394	µ
	185	Harborview Mortgage Loan Trust, Ser. 2004-4, Class 3A, 1.38%, due 6/19/34		122	µ
				2,528
Commercial Mortgage-Backed (16.3%)
	1,825	Bear Stearns Commercial Mortgage Securities, Inc., Ser. 2005-PWR8, Class AAB, 4.58%, due 6/11/41		1,907
	1,025	Commercial Mortgage Pass-Through Certificates, Ser. 2003-LB1A, Class C, 4.23%, due 6/10/38		1,046
	1,500	Credit Suisse Mortgage Capital Certificates, Ser. 2007-C2, Class A2, 5.45%, due 1/15/49		1,539
	600	GE Capital Commercial Mortgage Corp., Ser. 2002-2A, Class A2, 4.97%, due 8/11/36		619
	1,133	GMAC Commercial Mortgage Securities, Inc., Ser. 2004-C3, Class AAB, 4.70%, due 12/10/41		1,206
	188	LB-UBS Commercial Mortgage Trust, Ser. 2006-C3, Class A1, 5.48%, due 3/15/32		189
	1,500	LB-UBS Commercial Mortgage Trust, Ser. 2003-C1, Class C, 4.50%, due 12/15/36		1,542
	875	LB-UBS Commercial Mortgage Trust, Ser. 2003-C7, Class C, 5.02%, due 7/15/37		923	µ
	1,615	Wachovia Bank Commercial Mortgage Trust, Ser. 2003-C6, Class D, 5.13%, due 8/15/35		1,681
				10,652

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Mortgage-Backed Non-Agency (4.0%)
$	692	Countrywide Home Loans, Ser. 2005-R2, Class 2A4, 8.50%, due 6/25/35	$	631	ñ
	1,612	GSMPS Mortgage Loan Trust, Ser. 2005-RP2, Class 1A4, 8.50%, due 3/25/35		1,631	ñ
	343	GSMPS Mortgage Loan Trust, Ser. 2005-RP3, Class 1A4, 8.50%, due 9/25/35		333	ñ
				2,595
Fannie Mae (1.3%)
	759	Whole Loan, Ser. 2004-W8, Class PT, 11.01%, due 6/25/44		860	µ
Freddie Mac (3.0%)
	7	ARM Certificates, 1.88%, due 1/1/17		7	µ
	986	Pass-Through Certificates, 8.00%, due 11/1/26		1,135
	715	Pass-Through Certificates, 8.50%, due 10/1/30		837
				1,979
Government National Mortgage Association (0.0%)
	6	Pass-Through Certificates, 7.00%, due 4/15/11		7
	7	Pass-Through Certificates, 12.00%, due 12/15/12 & 3/15/14		7
				14
	Total Mortgage-Backed Securities (Cost $25,206)			23,459

Corporate Debt Securities (23.2%)
Banks (8.2%)
	750	Bear Stearns Cos. LLC, Senior Unsecured Notes, 5.35%, due 2/1/12		792
	325	Bear Stearns Cos. LLC, Senior Unsecured Medium-Term Notes, Ser. B, 6.95%, due 8/10/12		358
	1,150	Citigroup, Inc., Senior Unsecured Notes, 6.00%, due 12/13/13		1,272
	1,000	Goldman Sachs Group, Inc., Senior Unsecured Notes, 5.30%, due 2/14/12		1,053
	770	Merrill Lynch & Co., Inc., Senior Unsecured Medium-Term Notes, Ser. C, 6.05%, due 8/15/12		821
	1,000	Morgan Stanley, Senior Unsecured Global Medium-Term Notes, Ser. F, 5.75%, due 8/31/12		1,080
				5,376
Beverages (1.0%)
	575	Anheuser-Busch Cos., Inc., Guaranteed Unsecured Notes, 4.95%, due 1/15/14		629
Diversified Financial Services (4.6%)
	945	American Express Credit Corp., Senior Unsecured Medium-Term Notes, Ser. C, 5.88%, due 5/2/13		1,040
	380	Caterpillar Financial Services Corp., Unsecured Medium-Term Notes, Ser. F, 4.70%, due 3/15/12		400
	175	General Electric Capital Corp., Senior Unsecured Global Medium-Term Notes, 5.00%, due 4/10/12		185
	1,200	General Electric Capital Corp., Senior Unsecured Notes, 5.90%, due 5/13/14		1,364
				2,989
Food (1.6%)
	965	Kraft Foods, Inc., Senior Unsecured Notes, 6.25%, due 6/1/12		1,046

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Media (3.1%)
$	600	Comcast Cable Communications LLC, Guaranteed Notes, 6.75%, due 1/30/11	$	609
	525	NBC Universal, Inc., Senior Unsecured Notes, 2.10%, due 4/1/14		532	ñ
	850	Time Warner Cable, Inc., Guaranteed Notes, 5.40%, due 7/2/12		909
				2,050
Office/Business Equipment (1.0%)
	650	Xerox Corp., Senior Unsecured Notes, 5.50%, due 5/15/12		690

Oil & Gas (0.7%)
	425	XTO Energy, Inc., Senior Unsecured Notes, 5.90%, due 8/1/12		464

Retail (1.1%)
	625	Home Depot, Inc., Senior Unsecured Notes, 5.25%, due 12/16/13		696

Telecommunications (1.9%)
	560	Telecom Italia Capital SA, Guaranteed Notes, 5.25%, due 11/15/13		609
	645	Telefonica Emisiones SAU, Guaranteed Notes, 2.58%, due 4/26/13		662
				1,271
	Total Corporate Debt Securities (Cost $14,897)			15,211
Asset-Backed Securities (8.3%)
	400	ACE Securities Corp. Home Equity Loan Trust, Ser. 2006-OP1, Class A2C, 0.41%, due 4/25/36		256	µ
	676	ACE Securities Corp. Home Equity Loan Trust, Ser. 2006-ASP5, Class A2B, 0.39%, due 10/25/36		507	µ
	400	Bear Stearns Asset Backed Securities Trust, Ser. 2006-HE9, Class 1A2, 0.41%, due 11/25/36		215	µ
	528	Carrington Mortgage Loan Trust, Ser. 2006-OPT1, Class A3, 0.44%, due 2/25/36		476	µ
	850	Carrington Mortgage Loan Trust, Ser. 2007-FRE1, Class A3, 0.52%, due 2/25/37		384	µ
	450	Countrywide Asset-Backed Certificates Trust, Ser. 2006-3, Class 2A2, 0.44%, due 6/25/36		391	µ
	271	Countrywide Asset-Backed Certificates Trust, Ser. 2006-5, Class 2A2, 0.44%, due 8/25/36		236	µ
	488	Countrywide Asset-Backed Certificates Trust, Ser. 2006-6, Class 2A2, 0.44%, due 9/25/36		405	µ
	1,100	Honda Auto Receivables Owner Trust, Ser. 2010-3, Class A3, 0.70%, due 4/21/14		1,100
	137	Impac Secured Assets Corp., Ser. 2006-3, Class A4, 0.35%, due 11/25/36		126	µ
	413	Knollwood CDO Ltd., Ser. 2006-2A, Class A2J, 0.71%, due 7/13/46		0	#µ
	427	Residential Asset Mortgage Products, Inc., Ser. 2006-RS1, Class AI2, 0.49%, due 1/25/36		317	µ
	1,100	Soundview Home Equity Loan Trust, Ser. 2006-OPT3, Class 2A3, 0.43%, due 6/25/36		901	µ
	159	Structured Asset Investment Loan Trust, Ser. 2006-3, Class A4, 0.35%, due 6/25/36		158	µ

	Total Asset-Backed Securities (Cost $7,140)			5,472

NUMBER OF SHARES

Short-Term Investments (2.4%)
	1,581,999	State Street Institutional Liquid Reserves Fund Institutional Class (Cost $1,582)		1,582

	Total Investments (101.3%) (Cost $69,369)			66,439	##

	Liabilities, less cash, receivables and other assets [(1.3%)]			(849	)

	Total Net Assets (100.0%)		$	65,590

See Notes to Schedule of Investments

Schedule of Investments Neuberger Berman Strategic Income Fund

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Bank Loan Obligationsµ (12.9%)

All Telecom (1.3%)
$	255	Asurion Corp., Term Loan, 6.76%, due 7/3/15	$	238
	263	Cincinnati Bell, Inc., Term Loan, 6.50%, due 6/12/17		265
	299	Integra Telecom Holdings, Inc., Term Loan B, 9.25%, due 4/15/15		301
	200	Knology, Inc., Term Loan B, 5.50%, due 10/17/16		201
	300	Level 3 Financing, Inc., Term Loan A, 2.54%, due 3/13/14		280
	499	NTELOS Corp., Term Loan B, 5.75%, due 8/7/15		502
	730	Sitel LLC, Term Loan B, due 1/30/14		661	¢^^
	494	Springboard Finance, LLC, Term Loan A, 7.00%, due 2/23/15		495
	1,000	Transaction Network Services, Inc., Term Loan C, 6.00%, due 11/18/15		1,002
	1,050	Yankee Cable Acquisition, LLC, Term Loan B1, 6.50%, due 8/26/16		1,039	¢^^
				4,984
Automotive (0.0%)
	125	United Components, Inc., Term Loan B, 6.25%, due 3/23/17		126

Building & Development (0.3%)
	259	Capital Automotive LP, Term Loan C, 2.76%, due 12/14/12		255
	289	Custom Building Products, Inc., Term Loan B, 5.75%, due 3/19/15		288
	54	Realogy Corp., Letter of Credit, 3.26%, due 10/10/13		49
	393	Realogy Corp., Term Loan, 3.26%, due 10/10/13		359
				951
Business Equipment & Services (0.4%)
	600	Advantage Sales & Marketing LLC, Second Lien Term Loan, 8.50%, due 5/5/17		606
	370	Brickman Group Holdings, Inc., Term Loan B, 7.25%, due 10/14/16		374
	299	MSCI, Inc., Term Loan, 4.75%, due 6/1/16		301
	299	Protection One Alarm Monitoring, Inc., Term Loan B, 6.00%, due 5/16/16		298
				1,579
Cable & Satellite Television (0.6%)
	886	Charter Communications Operating LLC, Term Loan, due 3/6/14		917	¢^^
	833	Midcontinent Communications, Term Loan B, 6.25%, due 12/31/16		834
	493	TWCC Holding Corp., Term Loan, 5.00%, due 9/14/15		495
				2,246
Chemicals & Plastics (0.4%)
	255	General Chemical Holding Co., Term Loan B, 6.75%, due 10/6/15		257
	299	Lyondell Chemical Co., Term Loan, 5.50%, due 4/8/16		302
	499	Momentive Performance Materials, Inc., Term Loan B, 2.56%, due 12/4/13		488
	300	PQ Corp., Second Lien Term Loan, due 7/30/15		282	¢^^
	245	Univar NV, Term Loan, 3.26%, due 10/10/14		243
				1,572
Clothing/Textiles (0.1%)
	500	Phillips-Van Heusen Corp., Term Loan B, 4.75%, due 5/6/16		503

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Conglomerates (0.4%)
$	775	Goodman Global, Inc., Term Loan, due 10/28/16	$	784	¢^^
	30	Goodman Global, Inc., Term Loan, due 10/30/17		31	¢^^
	472	JohnsonDiversy, Inc., Term Loan B, 5.50%, due 11/24/15		475
	375	Pinafore LLC, Term Loan B, 6.75%, due 9/29/16		379
				1,669
Containers & Glass Products (0.3%)
	456	BWAY Holding Co., Term Loan B, 5.50% – 6.00%, due 6/16/17		457
	43	BWAY Holding Co., Term Loan C, 5.50% – 6.00%, due 6/16/17		43
	200	Graham Packaging Co. L.P., Term Loan D, 6.00%, due 9/23/16		202
	350	Reynolds Group Holdings, Inc., Term Loan D, due 5/5/16		352	^^††
				1,054
Drugs (0.1%)
	98	Warner Chilcott Co. LLC, Term Loan B4, 6.50%, due 2/22/16		99
	302	Warner Chilcott Corp., Term Loan B3, 6.50%, due 2/22/16		304
				403
Ecological Services & Equipment (0.2%)
	873	EnergySolutions LLC, Term Loan, 6.25%, due 8/12/16		883

Electric - Generation (0.2%)
	625	TPF Generation Holdings LLC, Second Lien Term Loan C, 4.54%, due 12/15/14		571

Electronics/Electrical (1.0%)
	499	Aspect Software, Inc., Term Loan B, 6.25%, due 4/19/16		500
	500	AutoTrader.com, Inc., Term Loan B, 6.00%, due 6/14/16		501
	530	Fidelity National Information Services, Inc., Term Loan B, 5.25%, due 7/18/16		537
	400	Fifth Third Processing Solutions, Term Loan B, due 11/1/16		404	¢^^
	100	Fifth Third Processing Solutions, Term Loan, due 11/1/17		101	¢^^
	1,122	Interactive Data Corp., Term Loan B, 6.75%, due 1/27/17		1,141
	284	Reynolds & Reynolds Co., Term Loan B, 5.25%, due 4/21/17		286
	299	SkillSoft Corp., Term Loan B, 6.50%, due 5/26/17		302
				3,772
Farming/Agriculture (0.1%)
	299	WM Bolthouse Farms, Inc., First Lien Term Loan, 5.50%, due 2/11/16		300

Financial Intermediaries (1.0%)
	500	American General Finance Corp., Term Loan B, 7.25%, due 4/21/15		504
	750	CIT Group, Inc., Term Loan 3, 6.25%, due 8/11/15		762
	600	FIG LLC, Term Loan B, 5.75%, due 9/30/15		604
	287	First Data Corp., Term Loan B2, 3.01%, due 9/24/14		258
	499	LPL Holdings, Inc., Term Loan, 5.25%, due 6/28/17		495
	1,073	Ocwen Financial Corp., Term Loan, 9.00%, due 7/28/15		1,066
				3,689

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Food Products (0.7%)
$	210	Dole Food Co., Inc., Term Loan B, 5.00% – 5.50%, due 3/2/17	$	211
	522	Dole Food Co., Inc., Term Loan C, 5.00% – 5.50%, due 3/2/17		524
	584	Michael Foods, Inc., Term Loan B, 6.25%, due 6/29/16		594
	375	NBTY, Inc., Term Loan B, 6.25%, due 10/2/17		380
	948	Pinnacle Foods Holdings Corp., Term Loan D, 6.00%, due 4/2/14		957
				2,666
Food Service (0.1%)
	360	DineEquity, Inc., Term Loan B, 6.00%, due 10/19/17		363

Food/Drug Retailers (0.3%)
	225	Rite Aid Corp., Term Loan B, due 6/4/14		202	¢^^
	1,011	Rite Aid Corp., Term Loan 3, 6.00%, due 6/4/14		1,004
				1,206
Health Care (1.5%)
	499	Aurora Diagnostics LLC, Term Loan B, 6.25%, due 5/21/16		490
	375	Grifols SA, Term Loan B, due 6/4/16		379	¢^^
	300	HCA, Inc., Term Loan A, 1.54%, due 11/19/12		294
	245	IASIS Healthcare Corp., Term Loan, 5.54%, due 6/13/14		237
	500	IMS Health, Inc., Term Loan B, due 2/26/16		504	¢^^
	941	Multiplan, Inc., Term Loan B, 6.50%, due 8/26/17		943
	697	RehabCare Group, Inc., Term Loan B, 6.00%, due 11/24/15		700
	494	Rural/Metro Operating Co. LLC, Term Loan, 7.00%, due 12/9/14		495
	1,100	Universal Health Services, Inc., Term Loan B, due 7/28/16		1,112	¢^^
	275	Valeant Pharmaceuticals Int'l, Term Loan B, due 9/27/16		278	¢^^
				5,432
Industrial Equipment (0.2%)
	300	Generac Acquisition Corp., Term Loan B, 2.76% – 2.79%, due 11/11/13		285
	300	Rental Services Corp., Term Loan, 3.80% – 4.04%, due 12/2/13		293
				578
Insurance (0.1%)
	299	Sedgwick CMS Holdings, Inc., First Lien Term Loan, 5.50%, due 5/27/16		299

Leisure Goods/Activities/Movies (0.5%)
	1,047	Cedar Fair L.P., Term Loan B, 5.50%, due 12/15/16		1,062
	484	Six Flags Theme Parks, Inc., Term Loan B, 6.00%, due 6/30/16		485
	250	Six Flags Theme Parks, Inc., Term Loan B, due 12/31/16		258	¢^^
				1,805
Lodging & Casinos (0.4%)
	600	CityCenter Construction, Term Loan, due 6/30/12		580	¢^^
	500	Harrah's Operating Co., Inc., Term Loan B2, 3.29%, due 1/28/15		441
	299	Harrah's Operating Co., Inc., Term Loan B4, 9.50%, due 10/31/16		311
	110	VML US Finance, LLC, Term Loan B, due 5/25/12		110	¢^^
	190	VML US Finance, LLC, Term Loan B, due 5/27/13		190	¢^^
				1,632

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Media - Broadcast (0.1%)
$	293	Univision Communications, Inc., Term Loan, 4.51%, due 3/31/17	$	277

Nonferrous Metals/Minerals (0.2%)
	555	Fairmount Minerals Ltd., Term Loan B, 6.25%, due 8/5/16		561

Oil & Gas (0.3%)
	250	Dresser, Inc., Term Loan, 6.11%, due 5/4/15		249
	798	MEG Energy Corp., Term Loan D, 6.00%, due 4/3/16		799
				1,048
Publishing (0.6%)
	499	Cengage Learning Acquisitions, Inc., Term Loan, 2.54%, due 7/3/14		456
	285	DEX Media East LLC, Term Loan, 2.79% – 2.80%, due 10/24/14		231
	472	DEX Media West LLC, Term Loan, 7.00%, due 10/24/14		436
	446	Postmedia Network, Inc., Term Loan, 9.00%, due 7/13/16		451
	748	Quad Graphics, Inc., Term Loan B, 5.50%, due 4/14/16		744
				2,318
Radio & Television (0.3%)
	300	Clear Channel Communications, Inc., Term Loan B, 3.91%, due 1/28/16		238
	499	Fox Acquisition Sub, LLC, Term Loan, 7.50%, due 7/14/15		493
	299	Local TV on Satellite, LLC, Term Loan B, 2.29%, due 5/7/13		279
				1,010
Retailers (except food & drug) (0.4%)
	499	Bass Pro Group LLC, Term Loan, 5.00% – 5.75%, due 4/9/15		499
	300	Michaels Stores, Inc., Term Loan B2, 4.81% – 5.00%, due 7/31/16		297
	272	ServiceMaster Co., Term Loan, 2.76% – 2.80%, due 7/24/14		258
	27	ServiceMaster Co., Term Loan DD, 2.76%, due 7/24/14		26
	425	Toys "R' Us-Delaware, Inc., Term Loan, 6.00%, due 9/1/16		427
				1,507
Surface Transport (0.1%)
	78	Hertz Corp., Letter of Credit, 0.34%, due 12/21/12		77
	421	Hertz Corp., Term Loan B, 2.01%, due 12/21/12		417
				494
Utilities (0.7%)
	625	Bicent Power LLC, Term Loan B, 2.29%, due 6/30/14		542
	295	Longview Power LLC, Term Loan B, due 2/28/14		253	¢^^
	345	Longview Power LLC, Term Loan DD, due 2/28/14		296	¢^^
	998	New Development Holdings LLC, Term Loan, 7.00%, due 7/3/17		1,016
	340	RRI Energy, Inc., Term Loan B, due 9/8/17		340	¢^^
				2,447
	Total Bank Loan Obligations (Cost $46,369)			47,945

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

U.S. Treasury Securities-Backed by the Full Faith and Credit of the U.S. Government (20.9%)
$	6,000	U.S. Treasury Bills, 0.01%, due 11/18/10	$	6,000	ØØ
	20,000	U.S. Treasury Bills, 0.05%, due 12/9/10		19,997
	1,500	U.S. Treasury Bills, 0.09%, due 12/23/10		1,500
	8,000	U.S. Treasury Bills, 0.09%, due 2/10/11		7,997
	15,000	U.S. Treasury Bills, 0.16%, due 4/21/11		14,988
	1,360	U.S. Treasury Bonds, 8.75%, due 5/15/20		2,079
	555	U.S. Treasury Bonds, 6.88%, due 8/15/25		790
	2,875	U.S. Treasury Bonds, 4.50%, due 2/15/36		3,148
	5,791	U.S. Treasury Inflation Index Notes, 2.38%, due 1/15/25		6,905
	2,575	U.S. Treasury Notes, 2.38%, due 10/31/14		2,730
	5,175	U.S. Treasury Notes, 3.13%, due 1/31/17		5,624
	5,350	U.S. Treasury Notes, 3.63%, due 8/15/19		5,868	ØØ

	Total U.S. Treasury Securities-Backed by the Full Faith and Credit of the U.S. Government (Cost $76,889)			77,626

Mortgage-Backed Securities (15.0%)

Adjustable Rate Mortgages (0.3%)
	1,352	Merrill Lynch Mortgage Investors Trust, Ser. 2006-A1, Class 1A1, 4.78%, due 3/25/36		861	µ
	275	WaMu Mortgage Pass-Through Certificates, Ser. 2006-AR10, Class 1A1, 5.87%, due 9/25/36		225	µ
				1,086
Fannie Mae (4.6%)
	750	Pass-Through Certificates, 4.00%, due 10/1/39 – 10/1/40		774
	285	Pass-Through Certificates, 5.00%, due 8/1/33 – 5/1/37		303	ØØ
	3,860	Pass-Through Certificates, 5.00%, TBA, 30 Year Maturity		4,102	Ø
	6,336	Pass-Through Certificates, 5.50%, due 7/1/33 – 1/1/39		6,809	ØØ
	647	Pass-Through Certificates, 6.00%, due 9/1/33 & 7/1/38		703	ØØ
	4,000	Pass-Through Certificates, 6.00%, TBA, 30 Year Maturity		4,342	Ø
	3	Pass-Through Certificates, 6.50%, due 9/1/32		3	ØØ
	9	Pass-Through Certificates, 7.00%, due 7/1/29		11	ØØ
	2	Pass-Through Certificates, 7.50%, due 12/1/32		3	ØØ
				17,050
Freddie Mac (10.1%)
	33,085	Pass-Through Certificates, 4.00%, TBA, 30 Year Maturity		34,052	Ø
	9	Pass-Through Certificates, 4.50%, due 8/1/18		9	ØØ
	1,826	Pass-Through Certificates, 5.00%, due 5/1/18 – 8/1/39		1,938	ØØ
	1,012	Pass-Through Certificates, 5.50%, due 9/1/17 – 11/1/38		1,089	ØØ
	285	Pass-Through Certificates, 5.50%, TBA, 30 Year Maturity		305	Ø
	28	Pass-Through Certificates, 6.00%, due 4/1/17 – 12/1/33		30	ØØ
	2	Pass-Through Certificates, 6.50%, due 3/1/16		2	ØØ
	2	Pass-Through Certificates, 7.00%, due 6/1/32		3	ØØ
				37,428
Government National Mortgage Association (0.0%)
	4	Pass-Through Certificates, 6.50%, due 7/15/32		5	ØØ
	3	Pass-Through Certificates, 7.00%, due 8/15/32		4	ØØ
				9
	Total Mortgage-Backed Securities (Cost $54,978)			55,573

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Corporate Debt Securities (41.8%)

Aerospace/Defense (0.1%)
$	225	BE Aerospace, Inc., Senior Unsecured Notes, 8.50%, due 7/1/18	$	252

Airlines (1.5%)
	1,020	Continental Airlines, Inc., Senior Secured Notes, 6.75%, due 9/15/15		1,062	ñ
	470	Continental Airlines, Inc., Pass-Through Certificates, Ser. 2009-2, Class A, 7.25%, due 11/10/19		522
	617	Continental Airlines, Inc., Pass-Through Certificates, Ser. 2007-1, Class A, 5.98%, due 4/19/22		653	ØØ
	300	Delta Air Lines, Inc., Pass-Through Certificates, Ser. 2001-1, Class B, 7.71%, due 9/18/11		309
	175	Delta Air Lines, Inc., Senior Secured Notes, 9.50%, due 9/15/14		193	ñ
	520	Delta Air Lines, Inc., Pass-Through Certificates, Ser. 2010-1, Class A, 6.20%, due 7/2/18		556	ØØ
	1,136	Delta Air Lines, Inc., Pass-Through Certificates, Ser. 2009-1, Class A, 7.75%, due 12/17/19		1,272	ØØ
	406	Delta Air Lines, Inc., Pass-Through Certificates, Ser. 2007-1, Class A, 6.82%, due 8/10/22		439	ØØ
	381	United Airlines, Inc., Pass-Through Certificates, Ser. 2009-2, Class A, 9.75%, due 1/15/17		447
				5,453
Auto Loans (0.6%)
	1,050	Ford Motor Credit Co. LLC, Senior Unsecured Notes, 6.63%, due 8/15/17		1,174
	822	Ford Motor Credit Co. LLC, Senior Unsecured Notes, 8.13%, due 1/15/20		1,005
				2,179
Auto Parts & Equipment (0.0%)
	130	Goodyear Tire & Rubber Co., Guaranteed Notes, 8.25%, due 8/15/20		138

Automakers (0.4%)
	240	Ford Holdings, Inc., Guaranteed Notes, 9.30%, due 3/1/30		300
	435	Ford Motor Co., Senior Unsecured Notes, 7.45%, due 7/16/31		494
	145	Ford Motor Co., Senior Unsecured Notes, 9.98%, due 2/15/47		181
	595	Navistar Int'l Corp., Guaranteed Notes, 8.25%, due 11/1/21		652
				1,627
Banking (6.8%)
	280	Ally Financial, Inc., Guaranteed Notes, Ser. 8, 6.75%, due 12/1/14		293
	245	Ally Financial, Inc., Subordinated Notes, 8.00%, due 12/31/18		254
	780	Ally Financial, Inc., Guaranteed Notes, 8.00%, due 11/1/31		852
	635	Bank of America Corp., Senior Unsecured Medium-Term Notes, Ser. L, 7.38%, due 5/15/14		720	ØØ
	300	Bank of America Corp., Senior Unsecured Notes, 4.50%, due 4/1/15		312
	1,130	Bank of Tokyo-Mitsubishi UFJ Ltd., Notes, 1.60%, due 9/11/13		1,141	ñ
	775	CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/14		779
	785	CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/16		782
	919	CIT Group, Inc., Senior Secured Notes, 7.00%, due 5/1/17		915	ØØ
	1,650	Citigroup, Inc., Senior Unsecured Notes, 6.13%, due 11/21/17		1,837	ØØ
	255	Citigroup, Inc., Senior Unsecured Notes, 6.88%, due 3/5/38		283
	620	Citigroup, Inc., Senior Unsecured Notes, 8.13%, due 7/15/39		780
	420	Deutsche Bank AG, Senior Unsecured Notes, 3.88%, due 8/18/14		451
	360	Goldman Sachs Group, Inc., Senior Unsecured Global Medium-Term Notes, 3.63%, due 8/1/12		375
	100	Goldman Sachs Group, Inc., Senior Unsecured Notes, 5.15%, due 1/15/14		109	ØØ
	285	Goldman Sachs Group, Inc., Senior Unsecured Medium-Term Notes, 6.00%, due 5/1/14		320	ØØ
	790	Goldman Sachs Group, Inc., Senior Unsecured Notes, 6.15%, due 4/1/18		885
	515	Goldman Sachs Group, Inc., Subordinated Notes, 6.75%, due 10/1/37		540	ØØ
	3,100	JP Morgan Chase & Co., Senior Unsecured Notes, 4.25%, due 10/15/20		3,123
	1,295	JP Morgan Chase & Co., Senior Unsecured Notes, 5.50%, due 10/15/40		1,305
	50	JP Morgan Chase Capital XV, Guaranteed Notes, 5.88%, due 3/15/35		48	ØØ
	885	JP Morgan Chase Capital XVII, Guaranteed Notes, Ser. Q, 5.85%, due 8/1/35		838
	250	Morgan Stanley, Subordinated Notes, 4.75%, due 4/1/14		261	ØØ
	1,315	Morgan Stanley, Senior Unsecured Notes, 3.45%, due 11/2/15		1,322	Ø

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

$	2,065	Morgan Stanley, Senior Unsecured Global Medium-Term Notes, Ser. F, 6.63%, due 4/1/18	$	2,319
	3,260	Morgan Stanley, Senior Unsecured Global Medium-Term Notes, Ser. F, 5.63%, due 9/23/19		3,423	ØØ
	995	Wells Fargo & Co., Senior Notes, 3.63%, due 4/15/15		1,048
				25,315
Beverages (0.5%)
	1,275	Anheuser-Busch InBev Worldwide, Inc., Guaranteed Notes, 7.75%, due 1/15/19		1,649	ñØØ
	135	Constellation Brands, Inc., Guaranteed Notes, 8.38%, due 12/15/14		152
	175	Constellation Brands, Inc., Guaranteed Notes, 7.25%, due 9/1/16		192
				1,993
Building & Construction (0.1%)
	270	Meritage Homes Corp., Guaranteed Notes, 7.15%, due 4/15/20		262
Building Materials (0.3%)
	100	Associated Materials LLC, Senior Secured Notes, 9.13%, due 11/1/17		105	ñ
	410	Masco Corp., Senior Unsecured Notes, 6.13%, due 10/3/16		420
	250	Owens Corning, Inc., Guaranteed Notes, 9.00%, due 6/15/19		303
	270	USG Corp., Guaranteed Notes, 9.75%, due 8/1/14		282	ñ
				1,110
Chemicals (1.6%)
	565	Ashland, Inc., Guaranteed Notes, 9.13%, due 6/1/17		651
	215	CF Industries, Inc., Guaranteed Notes, 6.88%, due 5/1/18		245
	220	CF Industries, Inc., Guaranteed Notes, 7.13%, due 5/1/20		255
	585	Huntsman Int'l LLC, Guaranteed Notes, 5.50%, due 6/30/16		581
	490	LBI Escrow Corp., Senior Secured Notes, 8.00%, due 11/1/17		537	ñ
	560	Nalco Co., Senior Notes, 8.25%, due 5/15/17		624
	325	The Dow Chemical Co., Senior Unsecured Notes, 5.90%, due 2/15/15		366
	1,940	The Dow Chemical Co., Senior Unsecured Notes, 8.55%, due 5/15/19		2,492	ØØ
				5,751
Commercial Services (0.4%)
	905	ERAC USA Finance Co., Guaranteed Notes, 6.38%, due 10/15/17		1,059	ñ
	450	ERAC USA Finance Co., Guaranteed Notes, 7.00%, due 10/15/37		498	ñØØ
				1,557
Consumer/Commercial/Lease Financing (0.4%)
	195	Int'l Lease Finance Corp., Senior Unsecured Medium-Term Notes, Ser. Q, 5.25%, due 1/10/13		197
	190	Int'l Lease Finance Corp., Senior Unsecured Notes, 5.88%, due 5/1/13		193
	770	Int'l Lease Finance Corp., Senior Unsecured Medium-Term Notes, Ser. R, 5.65%, due 6/1/14		770
	95	Int'l Lease Finance Corp., Senior Secured Notes, 6.50%, due 9/1/14		103	ñ
	75	Int'l Lease Finance Corp., Senior Secured Notes, 7.13%, due 9/1/18		82	ñ
				1,345
Department Stores (0.2%)
	800	Sears Holdings Corp., Senior Secured Notes, 6.63%, due 10/15/18		798	ñ

Diversified Capital Goods (0.3%)
	1,105	Ingersoll-Rand Global Holding Co. Ltd., Guaranteed Notes, 6.00%, due 8/15/13		1,240	ØØ

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Diversified Financial Services (2.1%)
$	650	American Express Credit Corp., Senior Unsecured Medium-Term Notes, Ser. C, 5.88%,	$	716	ØØ
		due 5/2/13
	290	American Express Credit Corp., Senior Unsecured Medium-Term Notes, Ser. D, 5.13%, due 8/25/14		320
	700	American Express Credit Corp., Senior Unsecured Notes, 2.75%, due 9/15/15		706
	675	American Honda Finance Corp., Senior Unsecured Notes, 3.50%, due 3/16/15		713	ñ
	535	Ameriprise Financial, Inc., Senior Unsecured Notes, 5.30%, due 3/15/20		587
	150	General Electric Capital Corp., Global Medium-Term Notes, Ser. A, 5.25%, due 10/19/12		162	ØØ
	450	General Electric Capital Corp., Senior Unsecured Notes, 5.90%, due 5/13/14		512	ØØ
	755	General Electric Capital Corp., Senior Unsecured Global Medium-Term Notes, Ser. A, 5.63%, due 5/1/18		844
	2,210	General Electric Capital Corp., Senior Unsecured Notes, 4.38%, due 9/16/20		2,229
	495	General Electric Capital Corp., Senior Unsecured Global Medium-Term Notes, Ser. A, 6.88%, due 1/10/39		569	ØØ
	460	Merrill Lynch & Co., Senior Unsecured Medium-Term Notes, Ser. C, 5.45%, due 2/5/13		490	ØØ
	75	Merrill Lynch & Co., Subordinated Notes, 6.11%, due 1/29/37		71	ØØ
				7,919
Electric - Generation (0.6%)
	830	Calpine Corp., Senior Secured Notes, 7.25%, due 10/15/17		863	ñ
	470	Dynegy Holdings, Inc., Senior Unsecured Notes, 7.75%, due 6/1/19		321
	405	Dynegy-Roseton Danskammer, Pass-Through Certificates, Ser. B, 7.67%, due 11/8/16		377
	95	Edison Mission Energy, Senior Unsecured Notes, 7.20%, due 5/15/19		68
	235	Edison Mission Energy, Senior Unsecured Notes, 7.63%, due 5/15/27		158
	135	NRG Energy, Inc., Guaranteed Notes, 7.25%, due 2/1/14		138
	130	NRG Energy, Inc., Guaranteed Notes, 8.25%, due 9/1/20		138	ñ
	250	RRI Energy, Inc., Senior Unsecured Notes, 7.63%, due 6/15/14		252
				2,315
Electric - Integrated (0.1%)
	220	FirstEnergy Solutions Corp., Guaranteed Notes, 4.80%, due 2/15/15		238

Electronics (0.2%)
	235	Advanced Micro Devices, Inc., Senior Unsecured Notes, 8.13%, due 12/15/17		254
	90	Advanced Micro Devices, Inc., Senior Unsecured Notes, 7.75%, due 8/1/20		95	ñ
	275	Freescale Semiconductor, Inc., Senior Secured Notes, 9.25%, due 4/15/18		294	ñ
	180	NXP BV Funding LLC, Senior Secured Notes, 9.75%, due 8/1/18		197	ñ
				840
Energy (0.1%)
	290	CMS Energy Corp., Senior Unsecured Notes, 4.25%, due 9/30/15		296

Energy - Alternate Sources (0.1%)
	230	PSALM Corp., Guaranteed Notes, 7.39%, due 12/2/24		285	ñ

Energy - Exploration & Production (1.3%)
	530	ATP Oil & Gas Corp., Senior Secured Notes, 11.88%, due 5/1/15		484	ñ
	50	Chesapeake Energy Corp., Guaranteed Notes, 7.63%, due 7/15/13		55
	815	Chesapeake Energy Corp., Guaranteed Notes, 9.50%, due 2/15/15		945
	125	Chesapeake Energy Corp., Guaranteed Notes, 6.63%, due 8/15/20		132
	590	Cimarex Energy Co., Guaranteed Notes, 7.13%, due 5/1/17		625
	264	Denbury Resources, Inc., Guaranteed Notes, 8.25%, due 2/15/20		294

See Notes to Schedule of Investments

PRINCIPAL AMOUNT				VALUE†

(000's omitted)				(000's omitted)

$	290	Forest Oil Corp., Guaranteed Notes, 7.25%, due 6/15/19	$		305
	280	Linn Energy LLC, Senior Unsecured Notes, 8.63%, due 4/15/20			302	ñ
	160	Linn Energy LLC, Guaranteed Notes, 7.75%, due 2/1/21			165	ñ
	540	Newfield Exploration Co., Senior Subordinated Notes, 6.63%, due 4/15/16			562
	370	Pioneer Natural Resources Co., Senior Guaranteed Notes, 5.88%, due 7/15/16			388
	190	Quicksilver Resources, Inc., Guaranteed Notes, 11.75%, due 1/1/16			220
	525	SandRidge Energy, Inc., Guaranteed Notes, 8.00%, due 6/1/18			525	ñ
					5,002
Food (1.3%)
	2,195	Grupo Bimbo SAB de CV, Guaranteed Notes, 4.88%, due 6/30/20			2,297	ñØØ
	315	Kraft Foods, Inc., Senior Unsecured Notes, 6.75%, due 2/19/14			368	ØØ
	75	Kraft Foods, Inc., Senior Unsecured Notes, 6.13%, due 2/1/18			88
	1,915	Kraft Foods, Inc., Senior Unsecured Notes, 6.50%, due 2/9/40			2,195	ØØ
					4,948
Food & Drug Retailers (0.2%)
	150	Rite Aid Corp., Senior Secured Notes, 9.75%, due 6/12/16			163
	70	Rite Aid Corp., Senior Secured Notes, 10.38%, due 7/15/16			74
	195	SUPERVALU, Inc., Senior Unsecured Medium-Term Notes, 7.50%, due 11/15/14			197
	250	SUPERVALU, Inc., Senior Unsecured Notes, 8.00%, due 5/1/16			254
					688
Food - Wholesale (0.2%)
	255	Del Monte Corp., Guaranteed Notes, 7.50%, due 10/15/19			280	ØØ
	380	NBTY, Inc., Guaranteed Notes, 9.00%, due 10/1/18			404	ñ
					684
Forestry/Paper (0.0%)
	150	Georgia-Pacific LLC, Guaranteed Notes, 8.25%, due 5/1/16			172	ñØØ

Gaming (0.5%)
	465	FireKeepers Development Authority, Senior Secured Notes, 13.88%, due 5/1/15			545	ñ
	55	Marina District Finance Co., Inc., Senior Secured Notes, 9.88%, due 8/15/18			54	ñ
	365	MGM Mirage, Inc., Senior Secured Notes, 11.13%, due 11/15/17			420	ØØ
	95	MGM Mirage, Inc., Senior Secured Notes, 9.00%, due 3/15/20			104	ñ
	570	Pokagon Gaming Authority, Senior Notes, 10.38%, due 6/15/14			593	ñ
	175	San Pasqual Casino Development Group, Inc., Notes, 8.00%, due 9/15/13			170	ñ
					1,886
Gas Distribution (2.2%)
	550	AmeriGas Partners L.P., Senior Unsecured Notes, 7.13%, due 5/20/16			573
	340	El Paso Corp., Senior Unsecured Medium-Term Notes, 8.25%, due 2/15/16			386
	240	El Paso Corp., Senior Unsecured Notes, 7.00%, due 6/15/17			262
	265	El Paso Energy Corp., Global Medium-Term Notes, 7.80%, due 8/1/31			284
	1,325	Energy Transfer Equity L.P., Guaranteed Notes, 7.50%, due 10/15/20			1,444
	365	Enterprise Products Operating LLC, Guaranteed Notes, Ser. G, 5.60%, due 10/15/14			412	ØØ
	645	Ferrellgas Partners L.P., Senior Unsecured Notes, 9.13%, due 10/1/17			713	ØØ
	185	Inergy L.P., Guaranteed Notes, 8.75%, due 3/1/15			201
	45	Inergy L.P., Guaranteed Notes, 8.25%, due 3/1/16			47
	165	Inergy L.P., Guaranteed Notes, 7.00%, due 10/1/18			173	ñ
	1,115	Kinder Morgan Energy Partners L.P., Senior Unsecured Notes, 5.95%, due 2/15/18			1,274	ØØ
	460	MarkWest Energy Partners L.P., Guaranteed Notes, Ser. B, 8.75%, due 4/15/18			505

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

$	230	Regency Energy Partners L.P., Guaranteed Notes, 6.88%, due 12/1/18	$	241
	1,625	Sabine Pass LNG L.P., Senior Secured Notes, 7.50%, due 11/30/16		1,501
				8,016
Health Care (0.5%)
	80	Columbia Healthcare Corp., Senior Unsecured Notes, 7.50%, due 12/15/23		76
	620	HCA, Inc., Secured Notes, 9.25%, due 11/15/16		671
	180	HCA, Inc., Secured Notes, 9.63%, due 11/15/16		196
	755	HCA, Inc., Senior Secured Notes, 8.50%, due 4/15/19		849
				1,792
Health Facilities (0.4%)
	215	Community Health Systems, Inc., Guaranteed Notes, 8.88%, due 7/15/15		230
	635	Health Management Associates, Inc., Senior Secured Notes, 6.13%, due 4/15/16		654
	275	LVB Acquisition, Inc., Guaranteed Notes, 10.38%, due 10/15/17		307
	360	Tenet Healthcare Corp., Senior Secured Notes, 8.88%, due 7/1/19		405
				1,596
Health Services (0.2%)
	135	AMGH Merger Sub, Inc., Guaranteed Notes, 9.25%, due 11/1/18		140	ñ
	160	Omnicare, Inc., Guaranteed Notes, 6.88%, due 12/15/15		164
	230	Service Corp. Int'l, Senior Unsecured Notes, 7.38%, due 10/1/14		251
	255	Warner Chilcott Co. LLC, Guaranteed Notes, 7.75%, due 9/15/18		265	ñ
				820
Hotels (0.4%)
	117	Host Hotels & Resorts L.P., Guaranteed Notes, 7.13%, due 11/1/13		119
	65	Host Hotels & Resorts L.P., Guaranteed Notes, 6.88%, due 11/1/14		67
	75	Host Hotels & Resorts L.P., Guaranteed Notes, Ser. O, 6.38%, due 3/15/15		77
	440	Host Hotels & Resorts L.P., Guaranteed Notes, Ser. Q, 6.75%, due 6/1/16		457
	580	Starwood Hotels & Resorts Worldwide, Inc., Senior Unsecured Notes, 6.75%, due 5/15/18		642	ØØ
				1,362
Industrial (2.5%)
	415	Boston Scientific Corp., Senior Unsecured Notes, 4.50%, due 1/15/15		436
	425	Corn Products Int'l, Inc., Senior Unsecured Notes, 4.63%, due 11/1/20		440
	535	Corn Products Int'l, Inc., Senior Unsecured Notes, 6.63%, due 4/15/37		579
	460	Hess Corp., Senior Unsecured Notes, 5.60%, due 2/15/41		470
	705	Hospira, Inc., Senior Unsecured Notes, 5.60%, due 9/15/40		703
	1,305	Husky Energy, Inc., Senior Unsecured Notes, 5.90%, due 6/15/14		1,460
	210	Lamar Media Corp., Guaranteed Notes, 9.75%, due 4/1/14		243
	490	Macy's Retail Holdings, Inc., Guaranteed Notes, 6.38%, due 3/15/37		481
	580	Medco Health Solutions, Inc., Senior Unsecured Notes, 4.13%, due 9/15/20		585
	665	Rio Tinto Finance (USA) Ltd., Guaranteed Notes, 5.20%, due 11/2/40		669
	275	UPC Holding BV, Secured Notes, 9.88%, due 4/15/18		300	ñ
	850	Vale Overseas Ltd., Guaranteed Notes, 4.63%, due 9/15/20		880
	1,140	Wal-Mart Stores, Inc., Senior Unsecured Notes, 5.00%, due 10/25/40		1,131
	975	Weatherford Int'l Ltd., Guaranteed Notes, 5.13%, due 9/15/20		1,021
				9,398
Industrial Equipment (0.1%)
	300	RSC Equipment Rental, Inc., Senior Secured Notes, 10.00%, due 7/15/17		335	ñ

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Insurance (0.6%)
$	390	Hartford Financial Services Group, Inc., Senior Unsecured Notes, 5.38%, due 3/15/17	$	405
	800	Hartford Financial Services Group, Inc., Senior Unsecured Notes, 5.50%, due 3/30/20		818
	260	Lincoln National Corp., Senior Unsecured Notes, 7.00%, due 6/15/40		285
	460	Prudential Financial, Inc., Senior Unsecured Medium-Term Notes, Ser. D, 3.88%, due 1/14/15		486
	290	Prudential Financial, Inc., Senior Unsecured Notes, 6.63%, due 6/21/40		319	ØØ
				2,313
Integrated Energy (0.1%)
	325	Petrobras Int'l Finance Co., Guaranteed Notes, 5.75%, due 1/20/20		363

Investments & Misc. Financial Services (0.1%)
	175	Icahn Enterprises L.P., Guaranteed Notes, 7.75%, due 1/15/16		180

Leisure (0.1%)
	355	Cedar Fair L.P., Guaranteed Notes, 9.13%, due 8/1/18		381	ñ
	20	Royal Caribbean Cruises Ltd., Senior Unsecured Notes, 7.25%, due 6/15/16		22
				403
Machinery (0.3%)
	530	Case New Holland, Inc., Senior Notes, 7.88%, due 12/1/17		592	ñØØ
	330	The Manitowoc Co., Inc., Guaranteed Notes, 8.50%, due 11/1/20		345
				937
Media (1.5%)
	1,080	DirecTV Holdings LLC, Guaranteed Notes, 3.55%, due 3/15/15		1,134	ØØ
	1,080	DirecTV Holdings LLC, Guaranteed Notes, 6.00%, due 8/15/40		1,100
	1,600	Time Warner Cable, Inc., Guaranteed Notes, 6.75%, due 7/1/18		1,920	ØØ
	345	Time Warner Cable, Inc., Guaranteed Notes, 8.75%, due 2/14/19		459
	900	Time Warner, Inc., Guaranteed Notes, 6.10%, due 7/15/40		959	ØØ
				5,572
Media - Broadcast (1.0%)
	185	Clear Channel Communications, Inc., Senior Unsecured Notes, 5.75%, due 1/15/13		167
	330	NBC Universal, Inc., Senior Unsecured Notes, 5.15%, due 4/30/20		358	ñ
	1,210	NBC Universal, Inc., Senior Unsecured Notes, 4.38%, due 4/1/21		1,236	ñ
	465	NBC Universal, Inc., Senior Unsecured Notes, 5.95%, due 4/1/41		475	ñ
	323	Umbrella Acquisition, Inc., Guaranteed Notes, 9.75%, due 3/15/15		343	ñ
	415	Univision Communications, Inc., Senior Secured Notes, 7.88%, due 11/1/20		431	ñ
	135	XM Satellite Radio, Inc., Guaranteed Notes, 13.00%, due 8/1/13		161	ñ
	340	XM Satellite Radio, Inc., Senior Unsecured Notes, 7.63%, due 11/1/18		349	ñ
				3,520
Media - Cable (1.4%)
	350	CCO Holdings LLC, Guaranteed Notes, 7.25%, due 10/30/17		361	ñ
	245	CCO Holdings LLC, Guaranteed Notes, 8.13%, due 4/30/20		265	ñ
	470	Cequel Communications Holdings I LLC, Senior Unsecured Notes, 8.63%, due 11/15/17		503	ñ
	595	Comcast Corp., Guaranteed Notes, 6.40%, due 3/1/40		656
	250	CSC Holdings, Inc., Senior Unsecured Notes, 8.50%, due 6/15/15		275
	260	DISH DBS Corp., Guaranteed Notes, 7.75%, due 5/31/15		283
	150	DISH DBS Corp., Guaranteed Notes, 7.88%, due 9/1/19		164

See Notes to Schedule of Investments

PRINCIPAL AMOUNT

VALUE†

(000's omitted)


$	465	EchoStar DBS Corp., Guaranteed Notes, 7.00%, due 10/1/13	$	498
	480	Videotron Ltee, Guaranteed Notes, 9.13%, due 4/15/18		541
	260	Virgin Media Finance PLC, Guaranteed Notes, 9.13%, due 8/15/16		278
	375	Virgin Media Finance PLC, Guaranteed Notes, Ser.1, 9.50%, due 8/15/16		426
	885	Virgin Media Secured Finance PLC, Senior Secured Notes, 6.50%, due 1/15/18		949
				5,199
Media - Services (0.2%)
	530	WMG Acquisition Corp., Senior Secured Notes, 9.50%, due 6/15/16		571

Metals/Mining Excluding Steel (0.4%)
	360	Arch Coal, Inc., Guaranteed Notes, 8.75%, due 8/1/16		404
	185	Arch Western Finance LLC, Guaranteed Notes, 6.75%, due 7/1/13		187	ØØ
	200	FMG Resources (August 2006) Pty Ltd., Senior Notes, 7.00%, due 11/1/15		205	ñ
	120	Peabody Energy Corp., Guaranteed Notes, 7.38%, due 11/1/16		136
	635	Southern Copper Corp., Senior Unsecured Notes, 6.75%, due 4/16/40		682
				1,614
Multi - Line Insurance (0.1%)
	305	American Int'l Group, Inc., Junior Subordinated Debentures, 8.18%, due 5/15/58		325	µ

Office/Business Equipment (0.7%)
	315	Xerox Corp., Senior Unsecured Notes, 5.50%, due 5/15/12		334	ØØ
	1,450	Xerox Corp., Senior Unsecured Notes, 6.40%, due 3/15/16		1,711	ØØ
	530	Xerox Corp., Senior Notes, 5.63%, due 12/15/19		594
				2,639
Oil & Gas (0.4%)
	995	Motiva Enterprises LLC, Notes, 5.75%, due 1/15/20		1,148	ñ
	400	Noble Holding Int'l Ltd., Guaranteed Notes, 4.90%, due 8/1/20		440
				1,588
Oil Refining & Marketing (0.2%)
	460	Valero Energy Corp., Senior Unsecured Notes, 6.13%, due 2/1/20		509
	370	Valero Energy Corp., Guaranteed Notes, 6.63%, due 6/15/37		374
				883
Packaging (0.4%)
	295	Ardagh Packaging Finance PLC, Senior Secured Notes, 7.38%, due 10/15/17		313	ñ
	450	Ball Corp., Guaranteed Notes, 7.13%, due 9/1/16		490
	215	Berry Plastics Corp., Senior Secured Notes, 9.50%, due 5/15/18		211
	150	Crown Americas LLC, Guaranteed Notes, 7.63%, due 5/15/17		164
	135	Owens-Brockway Glass Container, Inc., Guaranteed Notes, 7.38%, due 5/15/16		147
	245	Reynolds Group Issuer, Inc., Senior Secured Notes, 7.13%, due 4/15/19		255	ñ
				1,580
Pharmaceuticals (0.3%)
	675	Express Scripts, Inc., Guaranteed Notes, 5.25%, due 6/15/12		719	ØØ
	175	Valeant Pharmaceuticals Int'l, Guaranteed Notes, 6.75%, due 10/1/17		183	ñ
	160	Valeant Pharmaceuticals Int'l, Guaranteed Notes, 7.00%, due 10/1/20		168	ñ
				1,070

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Pipelines (0.1%)
$	170	Plains All American Pipeline L.P., Guaranteed Notes, 4.25%, due 9/1/12	$	178

Printing & Publishing (0.2%)
	450	Gannett Co., Inc., Guaranteed Notes, 9.38%, due 11/15/17		505
	195	Gannett Co., Inc., Guaranteed Notes, 7.13%, due 9/1/18		201	ñ
				706
Real Estate (0.2%)
	660	WEA Finance LLC, Guaranteed Notes, 7.50%, due 6/2/14		769	ñØØ

REITs (0.3%)
	330	Simon Property Group L.P., Senior Unsecured Notes, 10.35%, due 4/1/19		466
	580	Ventas Realty L.P., Guaranteed Notes. Ser. 1, 6.50%, due 6/1/16		611
	135	Ventas Realty L.P., Guaranteed Notes, 6.75%, due 4/1/17		140
				1,217
Retail (0.1%)
	425	CVS Pass-Through Trust, Pass-Through Certificates, 7.51%, due 1/10/32		496	ñ

Software/Services (0.3%)
	375	Fidelity National Information Services, Inc., Guaranteed Notes, 7.63%, due 7/15/17		406	ñ
	215	Fidelity National Information Services, Inc., Guaranteed Notes, 7.88%, due 7/15/20		235	ñ
	275	Lender Processing Services, Inc., Guaranteed Notes, 8.13%, due 7/1/16		283
	90	SunGard Data Systems, Inc., Guaranteed Notes, 9.13%, due 8/15/13		92
	35	SunGard Data Systems, Inc., Guaranteed Notes, 10.63%, due 5/15/15		39
				1,055
Specialty Retail (0.5%)
	780	Home Depot, Inc., Senior Unsecured Notes, 5.88%, due 12/16/36		810
	490	Toys "R" Us Property Co. I LLC, Guaranteed Notes, 10.75%, due 7/15/17		560
	475	Toys "R" Us-Delaware, Inc., Senior Secured Notes, 7.38%, due 9/1/16		495	ñ
				1,865
Steel Producers/Products (1.4%)
	1,410	ArcelorMittal, Senior Unsecured Notes, 6.13%, due 6/1/18		1,542	ØØ
	745	ArcelorMittal, Senior Unsecured Notes, 9.85%, due 6/1/19		961	ØØ
	1,560	ArcelorMittal, Senior Unsecured Notes, 5.25%, due 8/5/20		1,579
	165	Steel Dynamics, Inc., Guaranteed Notes, 6.75%, due 4/1/15		171
	285	Steel Dynamics, Inc., Guaranteed Notes, 7.75%, due 4/15/16		304
	240	Tube City IMS Corp., Guaranteed Notes, 9.75%, due 2/1/15		250
	345	United States Steel Corp., Senior Unsecured Notes, 6.65%, due 6/1/37		306
				5,113
Support - Services (0.3%)
	265	Knowledge Learning Corp., Guaranteed Notes, 7.75%, due 2/1/15		266	ñ
	110	United Rentals N.A., Inc., Guaranteed Notes, 7.00%, due 2/15/14		112
	440	United Rentals N.A., Inc., Guaranteed Notes, 10.88%, due 6/15/16		502
	135	West Corp., Guaranteed Notes, 8.63%, due 10/1/18		140	ñ
				1,020

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

Telecom - Integrated/Services (1.2%)
$	395	Citizens Communications Co., Senior Unsecured Notes, 9.00%, due 8/15/31	$	440
	135	Citizens Utilities Co., Senior Unsecured Notes, 6.63%, due 3/15/15		144
	285	Dycom Investments, Inc., Guaranteed Notes, 8.13%, due 10/15/15		292
	330	GCI, Inc., Senior Unsecured Notes, 8.63%, due 11/15/19		363	ØØ
	478	Intelsat Bermuda Ltd., Guaranteed Notes, 11.50%, due 2/4/17		510
	135	Intelsat Jackson Holdings Ltd., Guaranteed Notes, 8.50%, due 11/1/19		147	ñ
	65	Intelsat Subsidiary Holding Co., Ltd, Guaranteed Notes, Ser. B, 8.88%, due 1/15/15		67	ñ
	550	PAETEC Holding Corp., Senior Secured Notes, 8.88%, due 6/30/17		593	ØØ
	235	Qwest Communications Int'l, Inc., Guaranteed Notes, 7.13%, due 4/1/18		250	ñ
	550	Qwest Corp., Senior Unsecured Notes, 8.88%, due 3/15/12		604	ØØ
	335	Qwest Corp., Senior Unsecured Notes, 8.38%, due 5/1/16		404
	450	Windstream Corp., Guaranteed Notes, 8.13%, due 8/1/13		495
	185	Windstream Corp., Guaranteed Notes, 8.63%, due 8/1/16		197	ØØ
				4,506
Telecom - Wireless (0.8%)
	460	CC Holdings GS V LLC/Crown Castle GS III Corp., Senior Secured Notes, 7.75%, due 5/1/17		516	ñ
	120	Clearwire Communications LLC, Senior Secured Notes, 12.00%, due 12/1/15		133	ñ
	1,060	Cricket Communications, Inc., Senior Secured Notes, 7.75%, due 5/15/16		1,142
	199	MetroPCS Wireless, Inc., Guaranteed Notes, 9.25%, due 11/1/14		209
	995	Sprint Capital Corp., Guaranteed Notes, 6.88%, due 11/15/28		938
				2,938
Telecommunications (0.7%)
	825	America Movil SAB de CV, Guaranteed Notes, 5.00%, due 3/30/20		902
	750	AT&T, Inc., Senior Unsecured Notes, 4.85%, due 2/15/14		831
	360	Telecom Italia Capital SA, Guaranteed Unsecured Notes, 4.95%, due 9/30/14		389
	370	Verizon New Jersey, Inc., Senior Unsecured Notes, Ser. A, 5.88%, due 1/17/12		391
				2,513
Tobacco (1.3%)
	2,105	Altria Group, Inc., Guaranteed Notes, 9.70%, due 11/10/18		2,904	ØØ
	1,510	Lorillard Tobacco Co., Guaranteed Notes, 8.13%, due 6/23/19		1,745	ØØ
	250	Lorillard Tobacco Co., Guaranteed Notes, 6.88%, due 5/1/20		268
				4,917
Transport - Rail (0.1%)
	405	RZD Capital Ltd., Medium-Term Loan Participation Notes, 5.74%, due 4/3/17		427

Utilities (0.3%)
	710	Energy Future Holdings Corp., Senior Secured Notes, 10.00%, due 1/15/20		743	ñ
	402	Homer City Funding LLC, Senior Secured Notes, 8.14%, due 10/1/19		378
				1,121
	Total Corporate Debt Securities (Cost $146,015)			155,210

Asset-Backed Securities (12.5%)
	839	Banc of America Commercial Mortgage, Inc., Ser. 2006-3, Class A4, 5.89%, due 7/10/44		919
	600	Banc of America Commercial Mortgage, Inc., Ser. 2006-6, Class A4, 5.36%, due 10/10/45		641
	730	Banc of America Commercial Mortgage, Inc., Ser. 2006-4, Class A4, 5.63%, due 7/10/46		788
	700	Banc of America Commercial Mortgage, Inc., Ser. 2006-5, Class A4, 5.41%, due 9/10/47		748
	435	Banc of America Commercial Mortgage, Inc., Ser. 2007-1, Class A4, 5.45%, due 1/15/49		459

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

$	1,750	Banc of America Commercial Mortgage, Inc., Ser. 2007-3, Class A4, 5.66%, due 6/10/49	$	1,822	µØØ
	2,500	Bear Stearns Commercial Mortgage Securities, Ser. 2007-PW15, Class A4, 5.33%, due 2/11/44		2,603	ØØ
	550	Bear Stearns Commercial Mortgage Securities, Ser. 2007-PW17, Class A4, 5.69%, due 6/11/50		592
	1,280	Citigroup Mortgage Loan Trust, Inc., Ser. 2006-AMC1, Class A2B, 0.16%, due 9/25/36		586	µ
	1,160	Citigroup/Deutsche Bank Commercial Mortgage Trust, Ser. 2007-CD5, Class A4, 5.89%, due 11/15/44		1,253	ØØ
	2,000	Citigroup/Deutsche Bank Commercial Mortgage Trust, Ser. 2007-CD4, Class A4, 5.32%, due 12/11/49		2,086	ØØ
	2,000	Commercial Mortgage Loan Trust, Ser. 2008-LS1, Class A4B, 6.01%, due 12/10/49		2,135	µØ
	500	Commercial Mortgage Pass-Through Certificates, Ser. 2006-C8, Class A4, 5.31%, due 12/10/46		525
	2,000	Credit Suisse Mortgage Capital Certificates, Ser. 2007-C3, Class A4, 5.72%, due 6/15/39		2,075	µ
	1,060	Credit Suisse Mortgage Capital Certificates, Ser. 2006-C4, Class A3, 5.47%, due 9/15/39		1,132
	300	Credit Suisse Mortgage Capital Certificates, Ser. 2007-C4, Class A4, 5.80%, due 9/15/39		311	µØØ
	400	Credit Suisse Mortgage Capital Certificates, Ser. 2006-C5, Class A3, 5.31%, due 12/15/39		421	ØØ
	1,925	CWCapital Cobalt Ltd., Ser. 2007-C3, Class A4, 5.82%, due 5/15/46		2,026	µØØ
	718	CWCapital Cobalt Ltd., Ser. 2007-C2, Class A2, 5.33%, due 4/15/47		748
	500	CWCapital Cobalt Ltd., Ser. 2007-C2, Class A3, 5.48%, due 4/15/47		523
	335	Greenwich Capital Commercial Funding Corp., Ser. 2007-GG9, Class A4, 5.44%, due 3/10/39		358
	1,000	GS Mortgage Securities Corp. II, Ser. 2006-GG6, Class A4, 5.55%, due 4/10/38		1,085
	500	GS Mortgage Securities Corp. II, Ser. 2005-GG4, Class A3, 4.61%, due 7/10/39		509	ØØ
	700	GS Mortgage Securities Corp. II, Ser. 2005-GG4, Class A4, 4.76%, due 7/10/39		731	ØØ
	2,000	GS Mortgage Securities Corp. II, Ser. 2007-GG10, Class A4, 5.81%, due 8/10/45		2,118	µØØ
	400	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2006-LDP7, Class A4, 5.87%, due 4/15/45		444	µ
	500	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2006-LDP9, Class A3, 5.34%, due 5/15/47		526
	1,725	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2007-CB18, Class A4, 5.44%, due 6/12/47		1,820	ØØ
	2,500	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2007-CB19, Class A4, 5.74%, due 2/12/49		2,660	µØØ
	1,790	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2007-LD11, Class A4, 5.82%, due 6/15/49		1,900	µØØ
	1,610	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2007-CB20, Class A4, 5.79%, due 2/12/51		1,746	ØØ
	2,200	JP Morgan Chase Commercial Mortgage Securities Corp., Ser. 2007-LD12, Class A4, 5.88%, due 2/15/51		2,351	ØØ
��	915	LB-UBS Commercial Mortgage Trust, Ser. 2007-C6, Class A4, 5.86%, due 7/15/40		973	ØØ
	1,935	Merrill Lynch/Countrywide Commercial Mortgage Trust, Ser. 2007-5, Class A4, 5.38%, due 8/12/48		1,978	ØØ
	2,000	Merrill Lynch/Countrywide Commercial Mortgage Trust, Ser. 2007-7, Class A4, 5.81%, due 6/12/50		2,079	µØØ
	900	Morgan Stanley Capital I, Ser. 2007-IQ16, Class A4, 5.81%, due 12/12/49		945	ØØ
	837	Morgan Stanley Home Equity Loan Trust, Ser. 2006-3, Class A3, 0.42%, due 4/25/36		546	µ
	400	Wachovia Bank Commercial Mortgage Trust, Ser. 2005-C19, Class A5, 4.66%, due 5/15/44		415
	250	Wachovia Bank Commercial Mortgage Trust, Ser. 2007-C31, Class A4, 5.51%, due 4/15/47		259	ØØ
	957	Wells Fargo Home Equity Trust, Ser. 2006-3, Class A2, 0.41%, due 1/25/37		651	µ

	Total Asset-Backed Securities (Cost $39,536)			46,487

Government Securities (2.6%)

Quasi - Sovereign (0.6%)
	422	Banco Nacional de Desenvolvimento Economico e Social, Senior Unsecured Notes, 5.50%, due 7/12/20		456
	215	Bank of China (Hong Kong) Ltd., Subordinated Notes, 5.55%, due 2/11/20		227
	165	Empresa Nacional del Petroleo, Unsecured Notes, 5.25%, due 8/10/20		174
	175	Intergas Finance BV, Senior Unsecured Notes, 6.38%, due 5/14/17		191
	110	KazMunaiGaz Finance Sub BV, Guaranteed Global Medium-Term Notes, Ser. 2, 9.13%, due 7/2/18		132
	125	Nak Naftogaz Ukraine, Gov't Guaranteed Notes, 9.50%, due 9/30/14		135
	210	Petroleos de Venezuela SA, Guaranteed Notes, 5.25%, due 4/12/17		124
	110	Petroleos de Venezuela SA, Guaranteed Notes, 5.38%, due 4/12/27		53

See Notes to Schedule of Investments

PRINCIPAL AMOUNT			VALUE†

(000's omitted)			(000's omitted)

$	335	Petronas Capital Ltd., Guaranteed Notes, 5.25%, due 8/12/19	$	371
	114	Republic of Croatia, Senior Unsecured Notes, 6.75%, due 11/5/19		130
				1,993
Sovereign (2.0%)
	348	Federative Republic of Brazil, Senior Unsecured Notes, 4.88%, due 1/22/21		386
	265	Lebanese Republic, Notes, 8.50%, due 1/19/16		307
	102	Lebanese Republic, Unsubordinated Medium-Term Notes, 6.38%, due 3/9/20		106
	100	Majapahit Holding BV, Guaranteed Notes, 7.25%, due 6/28/17		117
	130	Majapahit Holding BV, Guaranteed Notes, 7.88%, due 6/29/37		162
	258	Pemex Project Funding Master Trust, Guaranteed Notes, 5.75%, due 3/1/18		290
	120	Pemex Project Funding Master Trust, Guaranteed Notes, 6.63%, due 6/15/38		134
	30	Republic of Argentina, Senior Unsecured Notes, 8.75%, due 6/2/17		31
	231	Republic of Argentina, Senior Unsecured Notes, 8.28%, due 12/31/33		219
	65	Republic of Argentina, Unsubordinated Notes, Step-Up, 2.50%/5.25%, due 12/31/38		30	**
	55	Republic of Bulgaria, Unsubordinated Notes, 8.25%, due 1/15/15		65
	100	Republic of Chile, Senior Unsecured Notes, 3.88%, due 8/5/20		104
	210	Republic of Colombia, Senior Unsecured Notes, 8.13%, due 5/21/24		287
	180	Republic of Colombia, Unsecured Notes, 7.38%, due 1/27/17		224
	85	Republic of El Salvador, Senior Unsecured Notes, 7.75%, due 1/24/23		99
	50	Republic of El Salvador, Unsecured Notes, 7.65%, due 6/15/35		57
	17	Republic of Hungary, Senior Unsecured Notes, 4.75%, due 2/3/15		18
	130	Republic of Hungary, Senior Unsecured Notes, 6.25%, due 1/29/20		143
	105	Republic of Indonesia, Senior Unsecured Notes, 7.25%, due 4/20/15		125
	249	Republic of Indonesia, Senior Unsecured Notes, 5.88%, due 3/13/20		289
	150	Republic of Lithuania, Senior Unsecured Notes, 7.38%, due 2/11/20		175
	55	Republic of Panama, Senior Unsecured Notes, 7.25%, due 3/15/15		67
	100	Republic of Panama, Senior Unsecured Notes, 5.20%, due 1/30/20		113
	162	Republic of Panama, Senior Unsecured Notes, 6.70%, due 1/26/36		204
	255	Republic of Peru, Senior Unsecured Notes, 7.35%, due 7/21/25		338
	43	Republic of Peru, Senior Unsecured Notes, 8.75%, due 11/21/33		66
	400	Republic of Philippines, Senior Unsecured Notes, 6.50%, due 1/20/20		480
	335	Republic of Poland, Senior Unsecured Notes, 5.00%, due 10/19/15		372
	100	Republic of South Africa, Senior Unsecured Notes, 6.50%, due 6/2/14		115
	175	Republic of South Africa, Senior Unsecured Notes, 6.88%, due 5/27/19		216
	447	Republic of Turkey, Senior Unsecured Notes, 7.00%, due 6/5/20		554
	100	Republic of Turkey, Senior Unsecured Notes, 5.63%, due 3/30/21		112
	100	Republic of Turkey, Senior Unsecured Notes, 7.38%, due 2/5/25		127
	222	Republic of Uruguay, Senior Unsecured Notes, 6.88%, due 9/28/25		276
	13	Republic of Uruguay, Unsecured Notes, 7.88%, due 1/15/33		18
	241	Republic of Venezuela, Senior Unsecured Notes, 7.75%, due 10/13/19		164
	124	Republic of Venezuela, Senior Unsecured Notes, 9.38%, due 1/13/34		83
	200	RSHB Capital SA, Senior Secured Notes, 6.30%, due 5/15/17		211
	100	Russian Federation Bond, Notes, 5.00%, due 4/29/20		104
	11	Russian Federation Bond, Senior Unsecured Notes, 7.50%, due 3/31/30		13
	4	Russian Federation Bond, Senior Unsecured Notes, 7.50%, due 3/31/30		4
	100	Ukraine Government Bond, Senior Unsubordinated Notes, 6.58%, due 11/21/16		98
	308	United Mexican States, Senior Unsecured Medium-Term Notes, Ser. A, 5.13%, due 1/15/20		346
				7,449
	Total Government Securities (Cost $9,376)			9,442

NUMBER OF SHARES

Short-Term Investments (7.0%)
	26,118,169	State Street Institutional Liquid Reserves Fund Institutional Class (Cost $26,118)		26,118

	Total Investments (112.7%) (Cost $399,281)			418,401	##

	Liabilities, less cash, receivables and other assets [(12.7%)]			(47,179	)

	Total Net Assets (100.0%)		$	371,222

See Notes to Schedule of Investments

Notes to Schedule of Investments

†	In accordance with Accounting Standards Codification ("ASC") 820 "Fair Value Measurements and Disclosures" ("ASC 820"), all investments held by each of Neuberger Berman Core Bond Fund ("Core Bond"), Neuberger Berman Floating Rate Income Fund ("Floating Rate Income"), Neuberger Berman High Income Bond Fund ("High Income"), Neuberger Berman Municipal Intermediate Bond Fund ("Municipal Intermediate Bond"), Neuberger Berman Short Duration Bond Fund ("Short Duration"), and Neuberger Berman Strategic Income Fund ("Strategic Income") (each individually a "Fund", and collectively the "Funds") are carried at the value that Neuberger Berman Management LLC ("Management") believes a fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment under curr ent market conditions. Various inputs, including the volume and level of activity for the asset or liability in the market, are considered in valuing the Funds' investments, some of which are discussed below. Significant management judgment may be necessary to value investments in accordance with ASC 820.

	ASC 820 established a three-tier hierarchy of inputs to create a classification of value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below.

	●	Level 1 – quoted prices in active markets for identical investments

	●	Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, amortized cost, etc.)

	●	Level 3 – significant unobservable inputs (including a Fund's own assumptions in determining the fair value of investments)

	The inputs or methodology used for valuing an investment are not necessarily an indication of the risk associated with investing in those securities.

	The value of the Funds' investments in debt securities is determined by Management primarily by obtaining valuations from independent pricing services based on readily available bid quotations, or if quotations are not available, by methods which include various considerations based on security type (generally Level 2 inputs). In addition to the consideration of yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions, the following is a description of other Level 2 inputs and related valuation techniques used by an independent pricing service to value certain types of debt securities and short term investments of the Funds:

	Corporate Debt Securities. Inputs used to value corporate debt securities generally include relative credit information, observed market movements, sector news, spread to the U.S. Treasury market, and other market information which may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data, such as market research publications, when available ("Other Market Information").

	U.S. Treasury Securities. Inputs used to value U.S. Treasury securities generally include quotes from several inter-dealer brokers and Other Market Information.

	Asset-Backed Securities and Mortgage Backed Securities. Inputs used to value asset-backed securities and mortgage backed securities generally include models that consider a number of factors, which may include the following: prepayment speeds, cash flows, spread adjustments and Other Market Information.

	High Yield Securities. Inputs used to value high yield securities generally include a number of observations of equity and credit default swap curves related to the issuer and Other Market Information.

	Municipal Debt Securities. Inputs used to evaluate municipal debt securities include current trades, bid-wanted lists (which informs the market that a holder is interested in selling a position and that offers will be considered), offerings, general information on market movement, direction, trends, and specific data on specialty issues.

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)
	Emerging Markets Debt. Inputs used to value emerging markets debt generally include dealer quotes, bond market activity, discounted cash flow models, and other relevant information such as credit spreads and benchmark curves.

	Inputs used by independent pricing services to value bank loan securities include multiple broker quotes (generally Level 2 inputs). Financial futures contracts are determined by obtaining valuations from independent pricing services at the settlement price at the market close. Management has developed a process to periodically review information provided by independent pricing services for all types of securities. Investments in State Street Institutional Government Money Market Fund Institutional Class and State Street Institutional Liquid Reserves Fund Institutional Class are valued using the respective fund's daily calculated NAV. For debt securities, if a valuation is not available from an independent pricing service, or if Management has reason to believe that the valuation received does not represent the amount a fund might reasonably expect to receive on a current sale in an orderly transaction, the Funds seek to obtain quotations from principal market makers (generally considered Level 3 inputs). If such quotations are not readily available, the security is valued using methods the Board of Trustees of Neuberger Berman Income Funds (the "Board") has approved on the belief that they reflect fair value. Numerous factors may be considered when determining the fair value of a security based on Level 2 or 3 inputs, including available analyst, media or other reports, trading in futures or ADRs and whether the issuer of the security being fair valued has other securities outstanding. These fair value prices are necessarily estimates, and there is no assurance that such a price will be at or close to the price at which the security is next quoted or next trades. The following is a summary, categorized by Level, of inputs used to value the Funds' investments as of October 31, 2010:

Asset Valuation Inputs (000's omitted)	Level 1	Level 2		Level 3§		Total
Core Bond
Investments:
U.S. Treasury Securities-Backed by the Full Faith and Credit of the U.S. Government	$—		$75,252		$—		$75,252
Mortgage-Backed Securities
Adjustable Rate Mortgages	—		2,266		—		2,266
Fannie Mae	—		34,782		—		34,782
Freddie Mac	—		12,772		—		12,772
Total Mortgage-Backed Securities	—		49,820		—		49,820
Corporate Debt Securities
Airlines	—		—		2,585		2,585
Banking	—		11,329		—		11,329
Beverages	—		808		—		808
Chemicals	—		610		—		610
Commercial Services	—		1,511		—		1,511
Diversified Capital Goods	—		353		—		353
Diversified Financial Services	—		4,464		—		4,464
Electric—Integrated	—		254		—		254

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

Asset Valuation Inputs (000's omitted)	Level 1		Level 2		Level 3§		Total
Food		$—		$2,570		$—		$2,570
Gas Distribution		—		825		—		825
Industrial		—		2,347		—		2,347
Insurance		—		2,088		—		2,088
Media		—		2,828		—		2,828
Media—Broadcast		—		1,348		—		1,348
Media—Cable		—		243		—		243
Metals/Mining Excluding Steel		—		569		—		569
Office/Business Equipment		—		201		—		201
Pharmaceuticals		—		96		—		96
Pipelines		—		446		—		446
Real Estate		—		384		—		384
REITs		—		594		—		594
Retail		—		496		—		496
Specialty Retail		—		436		—		436
Steel Producers/Products		—		2,541		—		2,541
Telecommunications		—		1,414		—		1,414
Tobacco		—		1,224		—		1,224
Total Corporate Debt Securities		—		39,979		2,585		42,564
Asset-Backed Securities		—		21,689		0		21,689
Short-Term Investments		—		4,395		—		4,395
Total Investments		—		191,135		2,585		193,720
Floating Rate Income
Investments:
Bank Loan Obligations
Aerospace & Defense		—		996		—		996
All Telecom		—		6,973		—		6,973
Automotive		—		930		—		930
Building & Development		—		988		709		1,697
Business Equipment & Services		—		1,732		877		2,609
Cable & Satellite Television		—		1,064		—		1,064
Chemicals & Plastics		—		4,225		—		4,225
Clothing/Textiles		—		635		—		635
Conglomerates		—		3,044		—		3,044
Containers & Glass Products		—		2,145		—		2,145
Drugs		—		1,314		—		1,314
Electric—Generation		—		914		—		914
Electronics/Electrical		—		5,561		—		5,561
Equipment Leasing		—		1,668		—		1,668
Farming/Agriculture		—		702		—		702

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

Asset Valuation Inputs (000's omitted)	Level 1		Level 2		Level 3§		Total
Financial Intermediaries	$	—	$	2,849	$	1,317	$	4,166
Food Products		—		2,770		—		2,770
Food Service		—		776		—		776
Food/Drug Retailers		—		1,278		—		1,278
Health Care		—		6,606		—		6,606
Industrial Equipment		—		480		—		480
Insurance		—		746		—		746
Leisure Goods/Activities/Movies		—		2,159		—		2,159
Lodging & Casinos		—		2,619		—		2,619
Media—Broadcast		—		209		—		209
Nonferrous Metals/Minerals		—		1,157		—		1,157
Oil & Gas		—		994		—		994
Publishing		—		3,030		—		3,030
Radio & Television		—		925		—		925
Retailers (except food & drug)		—		1,855		—		1,855
Surface Transport		—		493		—		493
Utilities		—		3,196		—		3,196
Total Bank Loan Obligations				65,033		2,903		67,936
Corporate Debt Securities
AirTransport		—		670		432		1,102
Auto Loans		—		830		—		830
Banking		—		1,024		—		1,024
Chemicals		—		286		—		286
Consumer/Commercial/Lease Financing		—		479		—		479
Department Stores		—		743		—		743
Electric—Generation		—		2,654		372		3,026
Electronics		—		1,078		—		1,078
Gas Distribution		—		1,217		—		1,217
Health Care		—		609		—		609
Media—Broadcast		—		257		—		257
Media—Cable		—		936		—		936
Packaging		—		526		—		526
Specialty Retail		—		1,067		—		1,067
Support—Services		—		391		—		391
Telecom—Integrated/Services		—		717		—		717
Telecom—Wireless		—		754		—		754
Total Corporate Debt Securities		—		14,238		804		15,042
Short-Term Investments		—		12,023		—		12,023
Total Investments		—		91,294		3,707		95,001

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

Asset Valuation Inputs (000's omitted)	Level 1		Level 2		Level 3§		Total
High Income
Investments:
Bank Loan Obligations
Media—Broadcast		$—		$1,523		$—		$1,523
Corporate Debt Securities
Aerospace/Defense		—		6,168		—		6,168
Airlines		—		10,261		8,097		18,358
Auto Loans		—		27,118		—		27,118
Auto Parts & Equipment		—		2,098		—		2,098
Automakers		—		14,316		—		14,316
Banking		—		62,551		—		62,551
Beverages		—		2,629		—		2,629
Building & Construction		—		3,230		—		3,230
Building Materials		—		16,421		—		16,421
Chemicals		—		26,421		—		26,421
Consumer/Commercial/Lease Financing		—		22,262		—		22,262
Department Stores		—		4,898		—		4,898
Electric—Generation		—		37,616		3,873		41,489
Electric—Integrated		—		1,842		—		1,842
Electronics		—		26,222		—		26,222
Energy—Exploration & Production		—		46,520		—		46,520
Food & Drug Retailers		—		14,426		—		14,426
Food—Wholesale		—		10,891		—		10,891
Forestry/Paper		—		5,159		—		5,159
Gaming		—		39,345		—		39,345
Gas Distribution		—		60,184		—		60,184
Health Care		—		22,586		—		22,586
Health Facilities		—		21,618		—		21,618
Health Services		—		12,138		—		12,138
Hotels		—		10,043		—		10,043
Investments & Misc. Financial Services		—		7,429		—		7,429
Leisure		—		8,415		—		8,415
Machinery		—		13,932		—		13,932
Media—Broadcast		—		24,463		—		24,463
Media—Cable		—		52,902		—		52,902
Media—Services		—		11,927		—		11,927
Metals/Mining Excluding Steel		—		12,373		—		12,373
Multi—Line Insurance		—		8,270		—		8,270
Packaging		—		25,764		—		25,764

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

Asset Valuation Inputs (000's omitted)	Level 1		Level 2		Level 3§		Total
Pharmaceuticals		$—		$5,417		$—		$5,417
Printing & Publishing		—		12,558		—		12,558
REITs		—		7,572		—		7,572
Software/Services		—		35,141		—		35,141
Specialty Retail		—		8,963		—		8,963
Steel Producers/Products		—		10,470		—		10,470
Support—Services		—		20,571		—		20,571
Telecom—Integrated/Services		—		78,313		—		78,313
Telecom—Wireless		—		33,444		—		33,444
Total Corporate Debt Securities		—		884,887		11,970		896,857
Short-Term Investments		—		20,337		—		20,337
Total Investments		—		906,747		11,970		918,717
Municipal Intermediate Bond
Investments:
Municipal Debt Securities^		—		118,226		—		118,226
Total Investments		—		118,226		—		118,226
Short Duration
Investments:
U.S. Treasury Securities-Backed by the Full Faith and Credit of the U.S. Government		—		18,101		—		18,101
U.S. Government Agency Securities		—		2,614		—		2,614
Mortgage-Backed Securities^		—		23,459		—		23,459
Corporate Debt Securities^		—		15,211		—		15,211
Asset-Backed Securities		—		4,372		1,100		5,472
Short-Term Investments		—		1,582		—		1,582
Total Investments		—		65,339		1,100		66,439
Strategic Income
Investments:
Bank Loan Obligations
All Telecom		—		4,984		—		4,984
Automotive		—		126		—		126
Building & Development		—		663		288		951
Business Equipment & Services		—		675		904		1,579
Cable & Satellite Television		—		2,246		—		2,246
Chemicals & Plastics		—		1,572		—		1,572
Clothing/Textiles		—		503		—		503
Conglomerates		—		1,669		—		1,669
Containers & Glass Products		—		1,054		—		1,054
Drugs		—		403		—		403

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

Asset Valuation Inputs (000's omitted)	Level 1		Level 2		Level 3§		Total
Ecological Services & Equipment		$—		$883		$—		$883
Electric—Generation		—		571		—		571
Electronics/Electrical		—		3,772		—		3,772
Farming/Agriculture		—		300		—		300
Financial Intermediaries		—		2,128		1,561		3,689
Food Products		—		2,666		—		2,666
Food Service		—		363		—		363
Food/Drug Retailers		—		1,206		—		1,206
Health Care		—		5,432		—		5,432
Industrial Equipment		—		578		—		578
Insurance		—		299		—		299
Leisure Goods/Activities/Movies		—		1,805		—		1,805
Lodging & Casinos		—		1,632		—		1,632
Media—Broadcast		—		277		—		277
Nonferrous Metals/Minerals		—		561		—		561
Oil & Gas		—		1,048		—		1,048
Publishing		—		2,318		—		2,318
Radio & Television		—		1,010		—		1,010
Retailers (except food & drug)		—		1,507		—		1,507
Surface Transport		—		494		—		494
Utilities		—		2,447		—		2,447
Total Bank Loan Obligations		—		45,192		2,753		47,945
U.S. Treasury Securities-Backed by the Full Faith and Credit of the U.S. Government		—		77,626		—		77,626
Mortgage-Backed Securities
Adjustable Rate Mortgages		—		1,086		—		1,086
Fannie Mae		—		17,050		—		17,050
Freddie Mac		—		37,428		—		37,428
Government National Mortgage Association		—		9		—		9
Total Mortgage-Backed Securities		—		55,573		—		55,573
Corporate Debt Securities
Aerospace/Defense		—		252		—		252
Airlines		—		1,255		4,198		5,453
Auto Loans		—		2,179		—		2,179
Auto Parts & Equipment		—		138		—		138
Automakers		—		1,627		—		1,627
Banking		—		25,315		—		25,315
Beverages		—		1,993		—		1,993
Building & Construction		—		262		—		262

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

Asset Valuation Inputs (000's omitted)	Level 1		Level 2		Level 3§		Total
Building Materials		$—		$1,110		$—		$1,110
Chemicals		—		5,751		—		5,751
Commercial Services		—		1,557		—		1,557
Consumer/Commercial/Lease Financing		—		1,345		—		1,345
Department Stores		—		798		—		798
Diversified Capital Goods		—		1,240		—		1,240
Diversified Financial Services		—		7,919		—		7,919
Electric—Generation		—		1,938		377		2,315
Electric—Integrated		—		238		—		238
Electronics		—		840		—		840
Energy		—		296		—		296
Energy—Alternate Sources		—		285		—		285
Energy—Exploration & Production		—		5,002		—		5,002
Food		—		4,948		—		4,948
Food & Drug Retailers		—		688		—		688
Food—Wholesale		—		684		—		684
Forestry/Paper		—		172		—		172
Gaming		—		1,886		—		1,886
Gas Distribution		—		8,016		—		8,016
Health Care		—		1,792		—		1,792
Health Facilities		—		1,596		—		1,596
Health Services		—		820		—		820
Hotels		—		1,362		—		1,362
Industrial		—		9,398		—		9,398
Industrial Equipment		—		335		—		335
Insurance		—		2,313		—		2,313
Integrated Energy		—		363		—		363
Investments & Misc. Financial Services		—		180		—		180
Leisure		—		403		—		403
Machinery		—		937		—		937
Media		—		5,572		—		5,572
Media—Broadcast		—		3,520		—		3,520
Media—Cable		—		5,199		—		5,199
Media—Services		—		571		—		571
Metals/Mining Excluding Steel		—		1,614		—		1,614
Multi—Line Insurance		—		325		—		325
Office/Business Equipment		—		2,639		—		2,639

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

Asset Valuation Inputs (000's omitted)	Level 1		Level 2		Level 3§		Total
Oil & Gas		$—		$1,588		$—		$1,588
Oil Refining & Marketing		—		883		—		883
Packaging		—		1,580		—		1,580
Pharmaceuticals		—		1,070		—		1,070
Pipelines		—		178		—		178
Printing & Publishing		—		706		—		706
Real Estate		—		769		—		769
REITs		—		1,217		—		1,217
Retail		—		496		—		496
Software/Services		—		1,055		—		1,055
Specialty Retail		—		1,865		—		1,865
Steel Producers/Products		—		5,113		—		5,113
Support-Services		—		1,020		—		1,020
Telecom—Integrated/Services		—		4,506		—		4,506
Telecom—Wireless		—		2,938		—		2,938
Telecommunications		—		2,513		—		2,513
Tobacco		—		4,917		—		4,917
Transport—Rail		—		427		—		427
Utilities		—		1,121		—		1,121
Total Corporate Debt Securities		—		150,635		4,575		155,210
Asset-Backed Securities		—		46,487		—		46,487
Government Securities
Quasi—Sovereign		—		1,993		—		1,993
Sovereign		—		7,449		—		7,449
Total Government Securities		—		9,442		—		9,442
Short-Term Investments		—		26,118		—		26,118
Total Investments		—		411,073		7,328		418,401

^ The Schedule of Investments provides information on the industry or state categorization for the portfolio.

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

§ The following is a reconciliation between the beginning and ending balances of investments in which significant unobservable inputs (Level 3) were used in determining value:

(000's omitted)	Beginning balance, as of 11/1/09		Accrued discounts/ (premiums)		Realized gain/loss and change in unrealized appreciation/ (depreciation)		Net purchases/ (sales)		Net transfers in and/or out of Level 3		Balance, as of 10/31/10		Net change in unrealized appreciation/ (depreciation) from investments still held as of 10/31/10
Investments in Securities:
Core Bond
Corporate Debt Securities
Industrial/Airlines		$1,255		$—		$200		$1,130		$—		$2,585		$200
Asset-Backed Securities		23		—		(3)		(20)		—		0		0
Total		1,278		—		197		1,110		—		2,585		200
Floating Rate Income
Bank Loan Obligations
Building & Development		—		—		3		706		—		709		3
Business Equipment & Services		—		—		11		866		—		877		11
Financial Intermediaries		—		2		14		1,301		—		1,317		10
Corporate Debt Securities
AirTransport		—		—		15		417		—		432		15
Electric—Generation		—		—		(10)		382		—		372		(10)
Total		—		2		33		3,672		—		3,707		29
High Income
Corporate Debt Securities
Airlines		6,931		—		1,237		(71)		—		8,097		821
Electric—Generation		1,010		—		380		(9,154)		11,637		3,873		127
Total		7,941		—		1,617		(9,225)		11,637		11,970		948
Short Duration
Asset-Backed Securities		0		—		—		1,100		—		1,100		—
Total		0		—		—		1,100		—		1,100		—
Strategic Income
Bank Loan Obligations
Building & Development		—		—		1		287		—		288		1
Business Equipment & Services		—		—		4		900		—		904		4
Financial Intermediaries		—		3		8		1,550		—		1,561		7

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

(000's omitted)	Beginning balance, as of 11/1/09		Accrued discounts/ (premiums)		Realized gain/loss and change in unrealized appreciation/ (depreciation)		Net purchases/ (sales)		Net transfers in and/or out of Level 3		Balance, as of 10/31/10		Net change in unrealized appreciation/ (depreciation) from investments still held as of 10/31/10
Corporate Debt Securities
Airlines		$1,559		$—		$388		$2,251		$—		$4,198		$318
Electric—Generation		—		—		33		(193)		537		377		(17)
Food & Beverage		442		—		(4)		(438)		—		—		—
Total		2,001		3		430		4,357		537		7,328		313

The Funds had no significant transfers between Levels 1 and 2 during the year ended October 31, 2010. During the year ended October 31, 2010, one security in High Income and Strategic Income transferred from Level 2 to Level 3 as a result of a decrease in the number of quotations that were readily available to the independent pricing service.

Liability Valuation Inputs

The following is a summary, categorized by Level, of inputs used to value the Funds' derivatives as of October 31, 2010:

(000's omitted)	Level 1		Level 2		Level 3		Total
Core Bond
Futures Contracts		$(89)		$—		$—		$(89)
Strategic Income
Futures Contracts		(181)		—		—		(181)

##	At October 31, 2010, selected fund information on a U.S. federal income tax basis was as follows:

(000's omitted)	Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Net Unrealized Appreciation (Depreciation)
Core Bond		$188,558		$7,664		$2,502		$5,162
Floating Rate Income		93,594		1,553		146		1,407
High Income		857,204		61,820		307		61,513
Municipal Intermediate Bond		114,935		3,485		194		3,291
Short Duration		69,966		422		3,949		(3,527)
Strategic Income		399,956		18,790		345		18,445

@@	Approximately 44% of the municipal securities held by Municipal Intermediate Bond have credit enhancement features backing them.

ñ	Restricted security subject to restrictions on resale under federal securities laws. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers under Rule 144A under the Securities Act of 1933, as amended, and have been deemed by the investment manager to be liquid. At October 31, 2010, these securities amounted to approximately $7,899,000 or 4.8% of net assets for Core Bond, approximately

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

	$7,107,000 or 8.4% of net assets for Floating Rate Income, approximately $263,890,000 or 28.3% of net assets for High Income, approximately $1,160,000 or 1.0% of net assets for Municipal Intermediate Bond, approximately $3,127,000 or 4.8% of net assets for Short Duration, and approximately $29,713,000 or 8.0% of net assets for Strategic Income.

ß	Security is guaranteed by the corporate or non-profit obligor.

Ø	All or a portion of this security was purchased on a when-issued basis. At October 31, 2010, these securities amounted to $30,350,000 for Core Bond, $4,088,000 for High Income, $981,000 for Municipal Intermediate Bond and $45,191,000 for Strategic Income, respectively.

¢	All or a portion of this security was purchased on a delayed delivery basis.

††	As of October 31, 2010, the value of unfunded loan commitments was approximately $504,000 for Floating Rate Income and $352,000 for Strategic Income pursuant to the following loan agreements:

Floating Rate Income
Borrower	Principal Amount		Value
Reynolds Group Holdings, Inc., Term Loan D, due 5/5/16		$500,000		$504,000
Strategic Income
Borrower	Principal Amount		Value
Reynolds Group Holdings, Inc., Term Loan D, due 5/5/16		$350,000		$352,000

^^	All or a portion of this security has not settled as of October 31, 2010 and thus does not have an interest rate in effect. Interest rates do not take effect until settlement.

ØØ	All or a portion of this security is segregated in connection with obligations for when-issued purchase commitments and/or financial futures contracts and/or delayed delivery purchase commitments.

µ	Floating rate securities are securities whose yields vary with a designated market index or market rate. These securities are shown at their current rates as of October 31, 2010 and their final maturity dates.

**	Step Bond: Coupon rate is a fixed rate for an initial period then resets at a specific date and rate.

@	This debt is guaranteed under the Federal Deposit Insurance Corporation's ("FDIC") Temporary Liquidity Guarantee Program and is backed by the full faith and credit of the United States. At October 31, 2010, these securities amounted to approximately $2,614,000 or 4.0% of net assets for Short Duration.

a	Security is subject to a guarantee provided by Societe Generale, backing 100% of the total principal.

#	Restricted security subject to restrictions on resale under federal securities laws. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers under Rule 144A under the Securities Act of 1933, as amended, and have been deemed by the investment manager to be illiquid and restricted. At October 31, 2010, these securities amounted to approximately $0 or 0.0% of net assets for Core Bond and approximately $0 or 0.0% of net assets for Short Duration.

See Notes to Financial Statements

Notes to Schedule of Investments (cont'd)

(000's omitted)

Restricted Security

Acquisition

Date

Acquisition

Cost

Acquisition

Cost

Percentage

of Net Assets

as of

Acquisition

Date

Value as of

October 31, 2010

Fair Value

Percentage

of Net Assets

as of

October 31, 2010

Core Bond

Knollwood

CDO Ltd.,

Ser. 2006-2A,

Class A2J, 0.71%,

due 7/13/46

6/29/2006

$642

0.9%

0.0%

Short Duration

Knollwood

CDO Ltd.,

Ser. 2006-2A,

Class A2J, 0.71%,

due 7/13/46

9/14/2007

227

0.2

0.0

See Notes to Financial Statements

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Statements of Assets and Liabilities

Neuberger Berman Income Funds

(000's omitted except per share amounts)

	CORE BOND FUND			FLOATING RATE INCOME FUND			HIGH INCOME BOND FUND
	October 31, 2010			October 31, 2010			October 31, 2010
Assets
Investments in securities, at value* (Notes A & F)—see Schedule of Investments:
Unaffiliated issuers		$193,720			$95,001			$918,717
Cash		533			42			1,525
Deposits with brokers for futures contracts (Note A)		306			—			—
Dividends and interest receivable		1,111			556			20,687
Receivable for securities sold		2,387			821			8,277
Receivable for Fund shares sold		35			25			4,658
Receivable from Management—net (Note B)		10			44			—
Prepaid expenses and other assets		6			1			24
Total Assets		198,108			96,490			953,888
Liabilities
Distributions payable		109			6			850
Payable for securities purchased		32,444			12,074			14,632
Payable for Fund shares redeemed		74			152			4,345
Payable to investment manager (Notes A & B)		35			35			371
Payable to administrator—net (Note B)		—			—			233
Payable for variation margin (Note A)		89			—			—
Accrued expenses and other payables		82			91			280
Total Liabilities		32,833			12,358			20,711
Net Assets at value		$165,275			$84,132			$933,177
Net Assets consist of:
Paid-in capital		$156,087			$82,528			$864,044
Undistributed net investment income (loss)		—			—			544
Distributions in excess of net investment income		(109	)		(3	)		—
Accumulated net realized gains (losses) on investments		4,152			181			5,792
Net unrealized appreciation (depreciation) in value of investments		5,145			1,426			62,797
Net Assets at value		$165,275			$84,132			$933,177
Net Assets
Investor Class		$18,639			$—			$363,560
Institutional Class		120,349			70,535			266,194
Trust Class		—			—			—
Class A		23,368			12,869			277,477
Class C		2,919			728			25,480
Class R3		—			—			466
Shares Outstanding ($.001 par value; unlimited shares authorized)
Investor Class		1,716			—			38,314
Institutional Class		11,058			6,936			28,009
Trust Class		—			—			—
Class A		2,154			1,265			29,234
Class C		269			72			2,681
Class R3		—			—			49
Net Asset Value, offering and redemption price per share
Investor Class		10.86			$—			$9.49
Institutional Class		10.88			10.17			9.50
Trust Class		—			—			—
Class R3		—			—			9.49
Net Asset Value and redemption price per share
Class A		$10.85			$10.17			$9.49
Offering Price per share
Class A‡		$11.33			$10.62			$9.91
Net Asset Value and offering price per share
Class C^		$10.86			$10.17			$9.50
*Cost of Investments:		$188,486			$93,575			$855,920

‡ On single retail sales of less than $50,000. On sales of $50,000 or more or in certain other circumstances described in the Fund's prospectus, offering price is reduced.

^ Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See Notes to Financial Statements

	MUNICIPAL INTERMEDIATE BOND FUND		SHORT DURATION BOND FUND			STRATEGIC INCOME FUND
	October 31, 2010		October 31, 2010			October 31, 2010
Assets
Investments in securities, at value* (Notes A & F)—see Schedule of Investments:
Unaffiliated issuers		$118,226		$66,439			$418,401
Cash		45		—			378
Deposits with brokers for futures contracts (Note A)		—		—			678
Dividends and interest receivable		1,639		489			3,392
Receivable for securities sold		510		8			14,509
Receivable for Fund shares sold		45		6			3,233
Receivable from Management—net (Note B)		93		93			—
Prepaid expenses and other assets		5		5			10
Total Assets		120,563		67,040			440,601
Liabilities
Distributions payable		20		10			412
Payable for securities purchased		995		1,264			68,150
Payable for Fund shares redeemed		277		63			267
Payable to investment manager (Notes A & B)		25		14			166
Payable to administrator—net (Note B)		—		—			72
Payable for variation margin (Note A)		—		—			181
Accrued expenses and other payables		110		99			131
Total Liabilities		1,427		1,450			69,379
Net Assets at value		$119,136		$65,590			$371,222
Net Assets consist of:
Paid-in capital		$115,335		$86,360			$345,863
Undistributed net investment income (loss)		—		203			305
Distributions in excess of net investment income		—		—			—
Accumulated net realized gains (losses) on investments		510		(18,043	)		6,115
Net unrealized appreciation (depreciation) in value of investments		3,291		(2,930	)		18,939
Net Assets at value		$119,136		$65,590			$371,222
Net Assets
Investor Class		$118,848		$56,089			$—
Institutional Class		65		31			118,815
Trust Class		—		9,388			16,270
Class A		159		51			142,873
Class C		64		31			93,264
Class R3		—		—			—
Shares Outstanding ($.001 par value; unlimited shares authorized)
Investor Class		10,252		6,929			—
Institutional Class		6		4			10,583
Trust Class		—		1,217			1,449
Class A		14		7			12,716
Class C		6		4			8,307
Class R3		—		—			—
Net Asset Value, offering and redemption price per share
Investor Class		$11.59		$8.09			$—
Institutional Class		11.59		8.09			11.23
Trust Class		—		7.71			11.23
Class R3		—		—			—
Net Asset Value and redemption price per share
Class A		$11.60		$7.72			$11.24
Offering Price per share
Class A‡		$12.11		$8.06			$11.74
Net Asset Value and offering price per share
Class C^		$11.59		$7.72			$11.23
*Cost of Investments:		$114,935		$69,369			$399,281

Statements of Operations

Neuberger Berman Income Funds

(000's omitted)

	CORE BOND FUND		FLOATING RATE INCOME FUND		HIGH INCOME BOND FUND
	For the Year Ended October 31, 2010		For the Period from December 29, 2009 (Commencement of Operations) to October 31, 2010		For the Year Ended October 31, 2010
Investment Income:
Income (Note A):
Interest income—unaffiliated issuers		$4,918		$2,337		$59,338
Income from securities loaned—net (Note F)		—		—		64
Total income		$4,918		$2,337		$59,402
Expenses:
Investment management fees (Note B)		354		196		3,055
Administration fees (Note B)		85		23		382
Administration fees (Note B):
Investor Class		41		—		795
Institutional Class		90		30		150
Trust Class		—		—		—
Class A		41		10		169
Class C		4		1		22
Class R3		—		—		—
Distribution fees (Note B):
Investor Class		49		—		—
Trust Class		—		—		—
Class A		49		12		200
Class C		21		4		105
Class R3		—		—		1
Shareholder servicing agent fees:
Investor Class		24		—		223
Institutional Class		13		5		15
Trust Class		—		—		—
Class A		4		2		29
Class C		1		2		6
Class R3		—		—		1
Organization expense (Note A)		—		103		—
Audit fees		25		28		51
Custodian fees (Note B)		122		107		214
Insurance expense		8		1		34
Legal fees		93		81		117
Registration and filing fees		79		91		146
Reimbursement of expenses previously assumed by administrator (Note B)		—		—		94
Shareholder reports		24		29		127
Trustees' fees and expenses		47		40		47
Miscellaneous		13		4		67
Total expenses		1,187		769		6,050

See Notes to Financial Statements

	MUNICIPAL INTERMEDIATE BOND FUND		SHORT DURATION BOND FUND		STRATEGIC INCOME FUND
	For the Year Ended October 31, 2010		For the Year Ended October 31, 2010		For the Year Ended October 31, 2010
Investment Income:
Income (Note A):
Interest income—unaffiliated issuers		$4,172		$1,891		$13,205
Income from securities loaned—net (Note F)		—		—		—
Total income		$4,172		$1,891		$13,205
Expenses:
Investment management fees (Note B)		277		163		1,295
Administration fees (Note B)		66		39		141
Administration fees (Note B):
Investor Class		232		119		—
Institutional Class		—		—		65
Trust Class		—		39		37
Class A		—		—		190
Class C		—		—		130
Class R3		—		—		—
Distribution fees (Note B):
Investor Class		—		—		—
Trust Class		—		—		11
Class A		—		—		227
Class C		—		—		617
Class R3		—		—		—
Shareholder servicing agent fees:
Investor Class		135		52		—
Institutional Class		4		4		11
Trust Class		—		5		6
Class A		4		4		44
Class C		4		4		25
Class R3		—		—		—
Organization expense (Note A)		—		—		—
Audit fees		50		52		50
Custodian fees (Note B)		82		69		198
Insurance expense		5		5		8
Legal fees		129		143		98
Registration and filing fees		68		82		99
Reimbursement of expenses previously assumed by administrator (Note B)		—		—		—
Shareholder reports		18		25		52
Trustees' fees and expenses		47		47		47
Miscellaneous		13		9		31
Total expenses		1,134		861		3,382

Statements of Operations (cont'd)

Neuberger Berman Income Funds (cont'd)

(000's omitted)

	CORE BOND FUND		FLOATING RATE INCOME FUND		HIGH INCOME BOND FUND
	For the Year Ended October 31, 2010		For the Period from December 29, 2009 (Commencement of Operations) to October 31, 2010		For the Year Ended October 31, 2010
Expenses reimbursed by Management (Note B)		(88)		(474)		(71)
Management and administration fees waived (Notes A & B)		(282)		—		—
Expenses reduced by custodian fee expense offset arrangement (Note B)		—		—		(1)
Total net expenses		817		295		5,978
Net investment income (loss)		$4,101		$2,042		$53,424
Realized and Unrealized Gain (Loss) on Investments (Note A)
Net realized gain (loss) on:
Sales of investment securities of unaffiliated issuers		4,584		180		46,242
Financial futures contracts		(319)		—		—
Change in net unrealized appreciation (depreciation) in value of:
Unaffiliated investment securities		6,132		1,426		19,561
Affiliated investment securities		(11)		—		—
Financial futures contracts		(75)		—		—
Net gain (loss) on investments		10,311		1,606		65,803
Net increase (decrease) in net assets resulting from operations		$14,412		$3,648		$119,227

See Notes to Financial Statements

	MUNICIPAL INTERMEDIATE BOND FUND		SHORT DURATION BOND FUND		STRATEGIC INCOME FUND
	For the Year Ended October 31, 2010		For the Year Ended October 31, 2010		For the Year Ended October 31, 2010
Expenses reimbursed by Management (Note B)		(413)		(394)		(536)
Management and administration fees waived (Notes A & B)		—		—		—
Expenses reduced by custodian fee expense offset arrangement (Note B)		(1)		—		—
Total net expenses		720		467		2,846
Net investment income (loss)		$3,452		$1,424		$10,359
Realized and Unrealized Gain (Loss) on Investments (Note A)
Net realized gain (loss) on:
Sales of investment securities of unaffiliated issuers		846		(588)		7,688
Financial futures contracts		—		286		(907)
Change in net unrealized appreciation (depreciation) in value of:
Unaffiliated investment securities		2,747		3,419		12,654
Affiliated investment securities		—		—		—
Financial futures contracts		—		(71)		(157)
Net gain (loss) on investments		3,593		3,046		19,278
Net increase (decrease) in net assets resulting from operations		$7,045		$4,470		$29,637

Statements of Changes in Net Assets

Neuberger Berman Income Funds

(000's omitted)

	CORE BOND FUND				FLOATING RATE INCOME FUND		HIGH INCOME BOND FUND
	Year Ended October 31, 2010		Year Ended October 31, 2009		Period from December 29, 2009 (Commencement of Operations) to October 31, 2010		Year Ended October 31, 2010		Year Ended October 31, 2009
Increase (Decrease) in Net Assets:
From Operations (Note A):
Net investment income (loss)		$4,101		$3,216		$2,042		$53,424		$31,495
Net realized gain (loss) on investments		4,265		582		180		46,242		13,429
Change in net unrealized appreciation (depreciation) of investments		6,046		11,672		1,426		19,561		85,767
Net increase (decrease) in net assets resulting from operations		14,412		15,470		3,648		119,227		130,691
Distributions to Shareholders From (Note A):
Net investment income:
Investor Class		(534)		(1,356)		—		(34,110)		(27,611)
Institutional Class		(3,103)		(1,584)		(1,792)		(14,672)		(1,317)
Trust Class		—		—		—		—		—
Class A		(533)		(219)		(236)		(6,353)		(264)
Class C		(40)		(15)		(16)		(756)		(36)
Class R3		—		—		—		(18)		(2)
Net realized gain on investments:
Investor Class		(112)		(17)		—		—		—
Institutional Class		(375)		(18)		—		—		—
Trust Class		—		—		—		—		—
Class A		(82)		(3)		—		—		—
Class C		(6)		—		—		—		—
Total distributions to shareholders		(4,785)		(3,212)		(2,044)		(55,909)		(29,230)
From Fund Share Transactions (Note D):
Proceeds from shares sold:
Investor Class		5,301		9,831		—		125,230		369,323
Institutional Class		77,785		54,887		71,397		220,011		83,277
Trust Class		—		—		—		—		—
Class A		11,288		19,189		22,594		273,774		23,619
Class C		2,330		755		993		22,494		2,531
Class R3		—		—		—		451		70
Proceeds from reinvestment of dividends and distributions:
Investor Class		566		1,080		—		32,109		25,779
Institutional Class		2,377		1,390		1,772		7,404		415
Trust Class		—		—		—		—		—
Class A		522		188		222		5,735		222
Class C		12		6		15		284		8
Class R3		—		—		—		10		2
Payments for shares redeemed:
Investor Class		(13,317)		(35,233)		—		(250,124)		(241,645)
Institutional Class		(25,994)		(35,023)		(3,921)		(64,330)		(1,123)
Trust Class		—		—		—		—		—
Class A		(8,290)		(2,242)		(10,244)		(37,637)		(495)
Class C		(411)		(165)		(300)		(1,113)		(113)
Class R3		—		—		—		(109)		—
Net increase (decrease) from Fund share transactions		52,169		14,663		82,528		334,189		261,870
Net Increase (Decrease) in Net Assets		61,796		26,921		84,132		397,507		363,331
Net Assets:
Beginning of year		103,479		76,558		—		535,670		172,339
End of year		$165,275		$103,479		$84,132		$933,177		$535,670
Undistributed net investment income (loss) at end of year		$—		$—		$—		$544		$3,029
Distributions in excess of net investment income at end of year		(109)		$—		$(3)		$—		$—

See Notes to Financial Statements

	MUNICIPAL INTERMEDIATE BOND FUND				SHORT DURATION BOND FUND
	Year Ended October 31, 2010		Year Ended October 31, 2009		Year Ended October 31, 2010		Year Ended October 31, 2009
Increase (Decrease) in Net Assets:
From Operations (Note A):
Net investment income (loss)		$3,452		$1,438		$1,424		$2,843
Net realized gain (loss) on investments		846		63		(302)		(7,877)
Change in net unrealized appreciation (depreciation) of investments		2,747		1,443		3,348		6,745
Net increase (decrease) in net assets resulting from operations		7,045		2,944		4,470		1,711
Distributions to Shareholders From (Note A):
Net investment income:
Investor Class		(3,450)		(1,438)		(2,012)		(2,678)
Institutional Class		(1)		—		(0)		—
Trust Class		—		—		(303)		(409)
Class A		(1)		—		(1)		—
Class C		(0)		—		(0)		—
Class R3		—		—		—		—
Net realized gain on investments:
Investor Class		—		—		—		—
Institutional Class		—		—		—		—
Trust Class		—		—		—		—
Class A		—		—		—		—
Class C		—		—		—		—
Total distributions to shareholders		(3,452)		(1,438)		(2,316)		(3,087)
From Fund Share Transactions (Note D):
Proceeds from shares sold:
Investor Class		48,490		73,302		16,238		7,877
Institutional Class		64		—		30		—
Trust Class		—		—		3,180		2,444
Class A		158		—		50		—
Class C		64		—		30		—
Class R3		—		—		—		—
Proceeds from reinvestment of dividends and distributions:
Investor Class		3,207		1,044		1,844		2,480
Institutional Class		—		—		—		—
Trust Class		—		—		284		400
Class A		—		—		—		—
Class C		—		—		1		—
Class R3		—		—		—		—
Payments for shares redeemed:
Investor Class		(28,773)		(9,084)		(16,495)		(18,058)
Institutional Class		—		—		—		—
Trust Class		—		—		(2,513)		(3,795)
Class A		—		—		—		—
Class C		—		—		—		—
Class R3		—		—		—		—
Net increase (decrease) from Fund share transactions		23,210		65,262		2,649		(8,652)
Net Increase (Decrease) in Net Assets		26,803		66,768		4,803		(10,028)
Net Assets:
Beginning of year		92,333		25,565		60,787		70,815
End of year		$119,136		$92,333		$65,590		$60,787
Undistributed net investment income (loss) at end of year		$—		$—		$203		$294
Distributions in excess of net investment income at end of year		$—		$—		$—		$—

Statements of Changes in Net Assets (cont'd)

Neuberger Berman Income Funds (cont'd)

(000's omitted)

	STRATEGIC INCOME FUND
	Year Ended October 31, 2010		Year Ended October 31, 2009
Increase (Decrease) in Net Assets:
From Operations (Note A):
Net investment income (loss)		$10,359		$2,000
Net realized gain (loss) on investments		6,781		2,090
Change in net unrealized appreciation (depreciation) of investments		12,497		6,941
Net increase (decrease) in net assets resulting from operations		29,637		11,031
Distributions to Shareholders From (Note A):
Net investment income:
Investor Class		—		—
Institutional Class		(3,651)		(397)
Trust Class		(514)		(115)
Class A		(4,179)		(1,089)
Class C		(2,422)		(398)
Class R3		—		—
Net realized gain on investments:
Investor Class		—		—
Institutional Class		(646)		—
Trust Class		(97)		—
Class A		(744)		—
Class C		(534)		—
Total distributions to shareholders		(12,787)		(1,999)
From Fund Share Transactions (Note D):
Proceeds from shares sold:
Investor Class		—		—
Institutional Class		111,374		14,705
Trust Class		9,774		6,948
Class A		110,619		70,930
Class C		57,032		34,836
Class R3		—		—
Proceeds from reinvestment of dividends and distributions:
Investor Class		—		—
Institutional Class		2,032		382
Trust Class		600		112
Class A		3,887		558
Class C		1,206		129
Class R3		—		—
Payments for shares redeemed:
Investor Class		—		—
Institutional Class		(18,534)		(2,534)
Trust Class		(1,519)		(1,227)
Class A		(46,275)		(8,316)
Class C		(5,567)		(1,021)
Class R3		—		—
Net increase (decrease) from Fund share transactions		224,629		115,502
Net Increase (Decrease) in Net Assets		241,479		124,534
Net Assets:
Beginning of year		129,743		5,209
End of year		$371,222		$129,743
Undistributed net investment income (loss) at end of year		$305		$95
Distributions in excess of net investment income at end of year		$—		$—

See Notes to Financial Statements

Notes to Financial Statements Income Funds

Note A—Summary of Significant Accounting Policies:

1	General: The Funds are separate operating series of Neuberger Berman Income Funds, (the "Trust"), a Delaware statutory trust organized pursuant to an Amended and Restated Trust Instrument dated June 24, 2009. The Trust is registered as a diversified, open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and its shares are registered under the Securities Act of 1933, as amended (the "1933 Act"). Four Funds offer Investor Class shares, six offer Institutional Class shares, two offer Trust Class shares, six offer Class A shares, six offer Class C shares and one offers Class R3 shares. The Board may establish additional series or classes of shares without the approval of sh areholders. The assets of each Fund belong only to that Fund, and the liabilities of each Fund are borne solely by that Fund and no other. The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires Management to make estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates.

2	Portfolio valuation: Investment securities are valued as indicated in the notes following the Funds' Schedules of Investments.

3	Foreign currency translation: Core Bond, Floating Rate Income, High Income, Short Duration and Strategic Income may invest in foreign securities denominated in foreign currencies. The accounting records of the Funds are maintained in U.S. dollars. Foreign currency amounts are translated daily into U.S. dollars using the exchange rate as of 4:00 p.m., Eastern time, to determine the value of investments, other assets and liabilities. Purchase and sale prices of securities, and income and expenses, are translated into U.S. dollars at the prevailing rate of exchange on the respective dates of such transactions. Net unrealized foreign currency gain (loss), if any, arises from changes in the value of assets and liabilities, oth er than investments in securities, as a result of changes in exchange rates and is stated separately in the Statements of Operations.

4	Securities transactions and investment income: Securities transactions are recorded on trade date for financial reporting purposes. Dividend income is recorded on the ex-dividend date or, for certain foreign dividends, as soon as the Fund becomes aware of the dividends. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, including accretion of discount (adjusted for original issue discount, where applicable) and amortization of premium, where applicable, is recorded on the accrual basis. Realized gains and losses from securities transactions (for each Fund) and foreign currency transactions (for Core Bond, Floating Rate Income, High Inc ome, Short Duration and Strategic Income), if any, are recorded on the basis of identified cost and stated separately in the Statements of Operations. Included in net realized gain (loss) on investments are proceeds from the settlements of class action litigation in which High Income, Short Duration and Strategic Income participated as a plaintiff. The amounts of such proceeds for the year ended October 31, 2010 were $162,208, $166,638 and $379 for High Income, Short Duration and Strategic Income, respectively.

5	Income tax information: Each Fund is treated as a separate entity for U.S. federal income tax purposes. It is the policy of each Fund, except Floating Rate Income, to continue to, and the intention of Floating Rate Income to qualify as a regulated investment company by complying with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its earnings to its shareholders. Therefore, no federal income or excise tax provision is required. The Funds have adopted the provisions of ASC 740 "Income Taxes" ("ASC 740"). ASC 740 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken, or expected to be taken, in a tax return. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as an income tax expense in the Statements of Operations. The Funds are subject to examination by U.S. federal and state tax

authorities for returns filed for the prior three fiscal years 2007 - 2009. As of October 31, 2010, the Funds did not have any unrecognized tax benefits.

Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities held by each Fund, timing differences and differing characterization of distributions made by each Fund as a whole. The Funds may also utilize earnings and profits distributed to shareholders on redemption of shares as a part of the dividends paid deduction for income tax purposes.

As determined on October 31, 2010, permanent differences resulting primarily from different book and tax accounting for amortization of bond premium, paydown gains and losses, non-deductible 12b-1 fees and contingent payment debt instrument income adjustments were reclassified at fiscal year-end. These reclassifications had no effect on net income, net asset value or net asset value per share of each Fund.

The tax character of distributions paid during the years ended October 31, 2010 and October 31, 2009 was as follows:

	Distributions Paid From:
	Taxable Income					Tax-Exempt Income					Long-Term Capital Gain					Return of Capital					Total
	2010			2009		2010			2009		2010			2009		2010			2009		2010			2009
Core Bond		$4,784,336			$3,212,281		$—			$—		$—			$—		$—			$—		$4,784,336			$3,212,281
Floating Rate Income		2,044,059	(1)		—		—	(1)		—		—	(1)		—		—	(1)		—		2,044,059	(1)		—
High Income		55,908,863			29,230,047		—			—		—			—		—			—		55,908,863			29,230,047
Municipal Intermediate Bond		798			16,815		3,450,922			1,421,035		—			—		—			—		3,451,720			1,437,850
Short Duration		2,315,688			3,087,008		—			—		—			—		—			—		2,315,688			3,087,008
Strategic Income		12,787,114			1,998,867		—			—		—			—		—			—		12,787,114			1,998,867

(1)	Period from December 29, 2009 (Commencement of Operations) to October 31, 2010.

	As of October 31, 2010, the components of distributable earnings (accumulated losses) on a U.S. federal income tax basis were as follows:

	Undistributed Ordinary Income		Undistributed Tax-Exempt Income	Undistributed Long-Term Gain	Unrealized Appreciation (Depreciation)		Loss Carryforwards and Deferrals		Total
Core Bond		$3,851,677	$—	$282,709	$5,161,466		$—		$9,295,852
Floating Rate Income		292,799	—	—	1,407,118		—		1,699,917
High Income		1,393,997	—	7,075,803	61,512,727		—		69,982,527
Municipal Intermediate Bond		24,294	20,192	486,102	3,290,900		—		3,821,488
Short Duration		212,506	—	—	(3,527,187	)	(17,445,334	)	(20,760,015	)
Strategic Income		6,598,510	—	727,286	18,444,290		—		25,770,086

The differences between book basis and tax basis distributable earnings are attributable primarily to timing differences of distribution payments, delayed settlement compensation on bank loans, timing differences of wash sales, mark to market on certain futures contract transactions, organization expenses, capital loss carryforwards and amortization of bond premium.

To the extent each Fund's net realized capital gains, if any, can be offset by capital loss carryforwards, it is the policy of each Fund not to distribute such gains. As determined on October 31, 2010, the following Funds had unused capital loss carryforwards available for federal income tax purposes to offset net realized capital gains, if any, as follows:

	Expiring in:
	2011		2012		2013		2014		2015		2016		2017		2018
Short Duration		$—		$2,468,731		$3,168,736		$2,244,689		$643,625		$—		$8,069,282		$850,271

	During the year ended October 31, 2010, High Income and Municipal Intermediate Bond utilized capital loss carryforwards of $39,249,160 and $335,979, respectively.

6	Distributions to shareholders: Each Fund earns income, net of expenses, daily on its investments. Ordinarily, distributions from net investment income are declared on each business day and paid monthly, and distributions from net realized capital gains, if any, are generally distributed once a year (usually in December). Distributions to shareholders are recorded on the ex-date.

7	Organization expenses: Costs incurred by Floating Rate Income in connection with its organization, which amount to $102,640, have been expensed as incurred.

8	Expense allocation: Certain expenses are applicable to multiple funds. Expenses directly attributable to a Fund are charged to that Fund. Expenses of the Trust that are not directly attributable to a particular series of the Trust (e.g., a Fund) are allocated among the series of the Trust, on the basis of relative net assets, except where a more appropriate allocation of expenses to each of the series can otherwise be made fairly. Expenses borne by the complex of related investment companies, which includes open-end and closed-end investment companies for which Management serves as investment manager, that are not directly attributable to a particular investment company in the complex (e.g., the Trust) or series thereof are allocated among the investment companies in the complex or series thereof, on the basis of relative net assets, except where a more appropriate allocation of expenses to each of the investment companies in the complex or series thereof can otherwise be made fairly. Each Fund's expenses (other than those specific to each class) are allocated proportionally each day between the classes based upon the relative net assets of each class.

9	Security lending: A third party, eSecLending, has assisted Core Bond, High Income and Short Duration in conducting a bidding process to try to identify a principal that would pay a guaranteed amount to each Fund in consideration of that Fund entering into an exclusive securities lending arrangement. During most of the fiscal year, eSecLending served as exclusive lending agent for each of these Funds. As a result of a bidding process on October 1, 2009, no principal had an exclusive securities lending arrangement with any Fund; as such, no Fund was guaranteed any particular level of income during the fiscal year. As of August 27, 2010, the Funds no longer participate in a security lending program.

	Under the securities lending arrangements, each Fund received cash collateral at the beginning of each transaction equal to at least 102% of the prior day's market value of the loaned securities (105% in the case of international securities). Each Fund invested all the cash collateral in Neuberger Berman Securities Lending Quality Fund, LLC ("Quality Fund"), a fund managed by Neuberger Berman Fixed Income LLC ("NBFI"), an affiliate of Management, and sub-advised by Dwight Asset Management Company LLC. Quality Fund was not a money market fund registered under the 1940 Act and did not operate in accordance with all requirements of Rule 2a-7 under the 1940 Act. Each Fund redeemed all of its investments in Quality Fund, if any, as of August 27, 2010.

	Net income from the applicable securities lending program represents any amounts received from a principal, plus income earned on the cash collateral invested in Quality Fund or in other investments, if applicable, less cash collateral fees and other expenses associated with the loans. Short Duration did not loan any securities during the fiscal year ended October 31, 2010. For Core Bond and High Income, for the fiscal year ended October 31, 2010, the amount of net income received under the securities lending arrangements, which is reflected in the Statements of

Operations under the caption "Income from securities loaned — net", and the amount of interest income that was earned from Quality Fund are as follows:

	Net Income Received under the Securities Lending Arrangements		Interest Income Earned From the Quality Fund
Core Bond		—		$373
High Income		64,247		18,216

10	Repurchase agreements: Each Fund may enter into repurchase agreements with institutions that Management has determined are creditworthy. Each repurchase agreement is recorded at cost. Each Fund requires that the securities purchased in a repurchase agreement be transferred to the custodian in a manner sufficient to enable the Fund to assert a perfected security interest in those securities in the event of a default under the repurchase agreement. Each Fund monitors, on a daily basis, the value of the securities transferred to ensure that their value, including accrued interest, is greater than amounts owed to the Fund under each such repurchase agreement.

11	Dollar rolls: Core Bond, Floating Rate Income, High Income, Short Duration, and Strategic Income may enter into dollar roll transactions with respect to mortgage-backed securities. In a dollar roll transaction, a Fund sells securities for delivery in the current month and simultaneously agrees to repurchase substantially similar (i.e., same type and coupon) securities on a specified future date from the same party. During the period before this repurchase, a Fund forgoes principal and interest payments on the securities. A Fund is compensated by the difference between the current sales price and the forward price for the future purchase (often referred to as the "drop"), as well as by the interest earned on the cash proceeds of the initial sale. Dollar rolls may increase fluctuations in a Fund's net asset value and may be viewed as a form of leverage. There is a risk that the counter party will be unable or unwilling to complete the transaction as scheduled, which may result in losses to a Fund.

12	When-Issued/Delayed Delivery Securities: Each Fund may purchase securities with delivery or payment to occur at a later date beyond the normal settlement period. At the time a Fund enters into a commitment to purchase a security, the transaction is recorded and the value of the security is reflected in the net asset value. The price of such security and the date when the security will be delivered and paid for are fixed at the time the transaction is negotiated. The value of the security may vary with market fluctuations. No interest accrues to a Fund until payment takes place. At the time a Fund enters into this type of transaction it is required to segregate cash or other liquid assets at least equal to the amount of the c ommitment. Certain risks may arise upon entering into when-issued or delayed delivery securities from the potential inability of counterparties to meet the terms of their contracts or if the issuer does not issue the securities due to political, economic, or other factors. Additionally, losses may arise due to changes in the value of the underlying securities.

13	Foreign taxes: Foreign taxes withheld represent amounts withheld by foreign tax authorities, net of refunds recoverable.

14	Investments in foreign securities: Investing in foreign securities may involve certain sovereign and other risks, in addition to the credit and market risks normally associated with domestic securities. These additional risks include the possibility of adverse political and economic developments (including political instability, nationalization, expropriation, or confiscatory taxation) and the potentially adverse effects of unavailability of public information regarding issuers, less government supervision and regulation of financial markets, reduced liquidity of certain financial markets, and the lack of uniform accounting, auditing, and financial reporting standards or the application of standards that are different or les s stringent than those applied in the United States. Foreign securities also may experience greater price volatility, higher rates of inflation, and delays in settlement.

15	Derivative instruments: During the year ended October 31, 2010, the Funds' use of derivatives was limited to financial futures contracts. The Funds have adopted the provisions of ASC 815 "Derivatives and Hedging" ("ASC 815"). The disclosure requirements of ASC 815 distinguish between derivatives that qualify for hedge accounting and those

that do not. Because investment companies value their derivatives at fair value and recognize changes in fair value through the Statements of Operations, they do not qualify for hedge accounting. Accordingly, even though a Fund's investments in derivatives may represent economic hedges, they are considered non-hedge transactions for purposes of this disclosure.

Financial futures contracts: Each of Core Bond, Floating Rate Income, High Income, Municipal Intermediate Bond, Short Duration, and Strategic Income may buy and sell financial futures contracts to hedge against changes in securities prices resulting from changes in prevailing interest rates, and each of Core Bond and Strategic Income may also invest in financial futures contracts for investment purposes. At the time a Fund enters into a financial futures contract, it is required to deposit with the futures commission merchant a specified amount of cash or liquid securities, known as "initial margin," ranging upward from 1.1% of the value of the financial futures contract being traded. Each day, the futures contract is valued at the official settlement price of the board of trade or U.S. commodity exchange on which such futures contract is traded. Subsequent payments, known as "variation margin," to and from the broker are made on a daily basis, or as needed for Core Bond and Strategic Income, as the market price of the financial futures contract fluctuates. Daily variation margin adjustments, arising from this "mark to market," are recorded by the Funds as unrealized gains or losses.

Although some financial futures contracts by their terms call for actual delivery or acceptance of financial instruments, in most cases the contracts are closed out prior to delivery by offsetting purchases or sales of matching financial futures contracts. When the contracts are closed, a Fund recognizes a gain or loss. Risks of entering into futures contracts include the possibility there may be an illiquid market, possibly at a time of rapidly declining prices, and/or a change in the value of the contract may not correlate with changes in the value of the underlying securities. Futures have minimal counterparty risk to a Fund because the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.

For U.S. federal income tax purposes, the futures transactions undertaken by a Fund may cause that Fund to recognize gains or losses from marking contracts to market even though its positions have not been sold or terminated, may affect the character of the gains or losses recognized as long-term or short-term, and may affect the timing of some capital gains and losses realized by the Fund. Also, a Fund's losses on transactions involving futures contracts may be deferred rather than being taken into account currently in calculating such Fund's taxable income.

During the year ended October 31, 2010, Floating Rate Income, High Income and Municipal Intermediate Bond did not enter into any financial futures contracts. During the year ended October 31, 2010, Core Bond, Short Duration and Strategic Income entered into financial futures contracts for economic hedging purposes, including as a maturity or duration management device. At October 31, 2010, open positions in financial futures contracts were:

Fund	Expiration	Open Contracts	Position	Unrealized Appreciation (Depreciation)
Core Bond	December 2010	47 U.S. Treasury Notes, 10 Year	Short		$(89,227)
Strategic Income	December 2010	102 U.S. Treasury Notes, 10 Year	Short		$(193,64)
Strategic Income	December 2010	9 U.S. Treasury Notes, 30 Year	Short		$12,375

	During the year ended October 31, 2010, the average notional amount of financial futures contracts was:

Core Bond		$	(3,120,000)
Strategic Income			(6,280,000)

	At October 31, 2010, the Funds had deposited the following in segregated accounts to cover margin requirements on open futures contracts:
	Core Bond: $305,674 Strategic Income: $678,155

At October 31, 2010, the Funds had the following derivatives (which did not qualify for as hedging instruments under ASC 815), grouped by primary risk exposure:

Liability Derivatives
	Interest Rate Risk
Core Bond
Futures Contracts(1)	$(89,227)
Total Value	$(89,227)
Strategic Income
Futures Contracts(1)	$(181,266)
Total Value	$(181,266)

(1)

Reflected in the Statements of Assets and Liabilities; included under the caption "Net unrealized appreciation (depreciation) in value of investments," and is the cumulative appreciation (depreciation) of futures contracts as of October 31, 2010 as shown in "Futures Contracts" above. The outstanding variation margin as of October 31, 2010, if any, is reflected in the Statements of Assets and Liabilities under the caption "Receivable/Payable for variation margin."

The impact of the use of these derivative instruments on the Statements of Operations during the year ended October 31, 2010, was as follows:

Realized Gain (Loss)(1)

	Interest Rate Risk
Core Bond
Futures Contracts		$(319,326)
Total Realized Gain (Loss)		$(319,326)
Short Duration
Futures Contracts		$285,603
Total Realized Gain (Loss)		$285,603
Strategic Income
Futures Contracts		$(906,845)
Total Realized Gain (Loss)		$(906,845)

Change in Appreciation (Depreciation)(2)

	Interest Rate Risk
Core Bond
Futures Contracts		$(75,165)
Total Change in Appreciation (Depreciation)		$(75,165)
Short Duration
Futures Contracts		$(71,125)
Total Change in Appreciation (Depreciation)		$(71,125)
Strategic Income
Futures Contracts		$(157,250)
Total Change in Appreciation (Depreciation)		$(157,250)

(1)	Reflected in the Statements of Operations under the caption "Net realized gain (loss) on financial futures contracts."

(2)	Reflected in the Statements of Operations under the caption "Change in net unrealized appreciation (depreciation) in value of financial futures contracts." Management has concluded that the Funds, except Core Bond, Short Duration and Strategic Income, did not hold any derivative instruments during the year ended October 31, 2010 that require additional disclosures pursuant to ASC 815.

16	Indemnifications: Like many other companies, the Trust's organizational documents provide that its officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, both in some of its principal service contracts and in the normal course of its business, the Trust enters into contracts that provide indemnifications to other parties for certain types of losses or liabilities. The Trust's maximum exposure under these arrangements is unknown as this could involve future claims against the Trust.

17	Other: All net investment income and realized and unrealized capital gains and losses of each Fund are allocated, on the basis of relative net assets, pro rata among its respective classes.

Note B—Management Fees, Administration Fees, Distribution Arrangements, and Other Transactions with Affiliates:

Each Fund retains Management as its investment manager under a Management Agreement. For such investment management services, each Fund (except Floating Rate Income, High Income, and Strategic Income) pays Management a fee at the annual rate of 0.25% of the first $500 million of that Fund's average daily net assets, 0.225% of the next $500 million, 0.20% of the next $500 million, 0.175% of the next $500 million, and 0.15% of average daily net assets in excess of $2 billion. Floating Rate Income, High Income, and Strategic Income each pay Management a fee for investment management services at the annual rates of 0.50%, 0.48%, and 0.55%, respectively, of its average daily net assets. Management has voluntarily agreed to waive its management fee in the amount of 0.18% (0.25% prior t o March 3, 2010; 0.12% as of November 1, 2010) of the average daily net assets of Core Bond. Management may, at its sole discretion, modify or terminate this voluntary waiver without notice to the Fund. For the year ended October 31, 2010, such waived fees amounted to $282,072 for Core Bond.

Each Fund retains Management as its administrator under an Administration Agreement. Each Fund pays Management an administration fee at the annual rate of 0.06% of its average daily net assets under this agreement. In addition, Investor Class of each Fund that offers that class pays Management an administration fee at the annual rate of 0.21% of its average daily net assets, Institutional Class of each Fund that offers that class pays Management

an administration fee at the annual rate of 0.09% of its average daily net assets, Trust Class of each of Short Duration and Strategic Income pays Management an administration fee at the annual rate of 0.44% and 0.34%, respectively, of its average daily net assets, Class A and Class C of each Fund that offers that class pays Management an administration fee at the annual rate of 0.21% of its average daily net assets, and Class R3 of each Fund that offers that class pays Management an administration fee at the annual rate of 0.21% of its average daily net assets under this agreement. Additionally, Management retains State Street Bank and Trust Company ("State Street") as its sub-administrator under a Sub-Administration Agreement. Management pays State Street a fee for all services received under the agreement.

Management has contractually agreed to forgo current payment of fees and/or reimburse certain expenses of the Investor Class, Institutional Class, Trust Class, Class A, Class C and Class R3 of each Fund that offers those classes so that the total annual operating expenses of those classes do not exceed the expense limitations as detailed in the following table. These undertakings apply to a Fund's direct expenses and do not cover interest, taxes, brokerage commissions, acquired fund fees and expenses, and extraordinary expenses, if any; consequently, net expenses may exceed the contractual expense limitations. Each Fund has agreed that each of its respective classes will repay Management for fees and expenses forgone or reimbursed for that class provided that repayment does not c ause the class' annual operating expenses to exceed its contractual expense limitation. Any such repayment must be made within three years after the year in which Management incurred the expense.

During the year ended October 31, 2010, the Investor Class of High Income reimbursed Management $93,652 under its contractual expense limitation.

At October 31, 2010, contingent liabilities to Management under the contractual expense limitations were as follows:

					Expenses Deferred in Fiscal Period Ending October 31,
					2008			2009			2010
					Subject to Repayment until October 31,
Class	Contractual Expense Limitation(1)			Expiration	2011			2012			2013
Core Bond Investor Class		0.85	%	10/31/20		$62,629			$90,020			$25,560
Core Bond Institutional Class		0.45	%	10/31/20		60,609			81,405			54,638
Core Bond Class A		0.85	%	10/31/20		1,700	(2)		14,617			6,716
Core Bond Class C		1.60	%	10/31/20		1,695	(2)		3,790			957
Floating Rate Income Institutional Class		0.70	%	10/31/13		—			—			410,835	(6)
Floating Rate Income Class A		1.07	%	10/31/13		—			—			57,005	(5)
Floating Rate Income Class C		1.82	%	10/31/13		—			—			6,128	(6)
High Income Investor Class		1.00	%	10/31/13		—			—			—
High Income Institutional Class		0.75	%	10/31/13		—			22,388	(4)		28,917
High Income Class A		1.12	%	10/31/13		—			4,496	(4)		34,122
High Income Class C		1.87	%	10/31/13		—			693	(4)		6,499
High Income Class R3		1.37	%	10/31/13		—			1,035	(4)		800
Municipal Intermediate Bond Investor Class		0.65	%	10/31/13		170,458			213,114			402,491
Municipal Intermediate Bond Institutional Class		0.50	%	10/31/13		—			—			3,630	(7)
Municipal Intermediate Bond Class A		0.87	%	10/31/13		—			—			3,660	(7)
Municipal Intermediate Bond Class C		1.62	%	10/31/13		—			—			3,637	(7)
Short Duration Investor Class		0.70	%	10/31/13		202,732			247,213			322,782

100

					Expenses Deferred in Fiscal Period Ending October 31,
					2008			2009		2010
					Subject to Repayment until October 31,
Class	Contractual Expense Limitation(1)			Expiration	2011			2012		2013
Short Duration Institutional Class		0.50	%	10/31/13		$—			$—		$3,653	(7)
Short Duration Trust Class		0.80	%	10/31/13		52,852			62,762		59,964
Short Duration Class A		0.87	%	10/31/13		—			—		3,698	(7)
Short Duration Class C		1.62	%	10/31/13		—			—		3,646	(7)
Strategic Income Institutional Class		0.75	%(3)	10/31/20		372,887			148,644		153,882
Strategic Income Trust Class		1.10	%	10/31/13		24,251			50,305		28,331
Strategic Income Class A		1.15	%	10/31/20		6,744	(2)		198,132		196,672
Strategic Income Class C		1.85	%	10/31/20		6,026	(2)		78,520		157,265

(1)	Expense limitation per annum of the respective class' average daily net assets.

(2)	Period from December 20, 2007 to October 31, 2008.

(3)	Prior to February 28, 2008, the expense limitation was .85%.

(4)	Period from May 27, 2009 to October 31, 2009.

(5)	Period from December 29, 2009 to October 31, 2010.

(6)	Period from December 30, 2009 to October 31, 2010.

(7)	Period from June 21, 2010 to October 31, 2010. On May 4, 2009, NBSH Acquisition, LLC ("NBSH"), an entity organized by key members of Neuberger Berman's senior management, acquired a majority interest in Neuberger Berman's business and the fixed income and certain alternative asset management businesses of Lehman Brothers Holdings Inc.'s ("LBHI") Investment Management Division (together with Neuberger Berman, the "Acquired Businesses") (the "Acquisition"). Prior to that date, the predecessor of Management and NBFI were wholly owned subsidiaries of LBHI. On September 15, 2008, LBHI filed a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code, and on December 22, 2008, the bankruptcy court having jurisdiction over the LBHI matter approved the sale of the Acquired Businesses to NBSH (or its successor or assign), as the successful bidder in a public auction. The Acquired Businesses are now indirectly owned by, among others, portfolio managers, Neuberger Berman's management team, and certain key members and senior professionals who are employed in various parts of the Neuberger Berman complex of companies, with a minority interest retained by LBHI and certain affiliates of LBHI. The closing of the Acquisition resulted in an "assignment" of the Funds' Management Agreements and Sub-Advisory Agreements. Such an assignment, by law, automatically terminated those agreements. Accordingly, prior to the closing, the Board, including the Trustees who are not "interested persons" of the Funds' investment manager and its affiliates or the Funds, considered and approved a new Management Agreement and new Sub-Advisory Agreements for the Funds. The new agreements, which are virtually identical to those previously in effect, were also approved by a vote of the Funds' shareholders. These events have not had a material impact on the Funds or their operations. Management and NBFI continue to operate in the ordinary course of business as the investment manager and sub-adviser, respectively, of the Funds. NBFI, as the sub-adviser to High Income, Municipal Intermediate Bond, Short Duration, and Strategic Income, is retained by Management to furnish it with investment recommendations and research information without added cost to each Fund it sub-advises. NBFI, as sub-adviser to Core Bond and Floating Rate Income, is retained by Management to provide day-to-day investment management services and receives a monthly fee paid by

101

Management. As investment manager, Management is responsible for overseeing the investment activities of NBFI. Several individuals who are officers and/or Trustees of the Trust are also employees of NBFI, Neuberger Berman LLC ("Neuberger") and/or Management.

Each Fund also has a distribution agreement with Management with respect to each class of shares. Management acts as agent in arranging for the sale of class shares without sales commission or other compensation, except as described below for Class A and Class C shares, and bears advertising and promotion expenses. However, Management receives fees from Core Bond's Investor Class, Class A, and Class C, Floating Rate Income's Class A and Class C, High Income's Class A, Class C, and Class R3, Municipal Intermediate Bond's Class A and Class C, Short Duration's Class A and Class C and Strategic Income's Trust Class, Class A, and Class C, under their distribution plans (each a "Plan", collectively, the "Plans") pursuant to Rule 12b-1 under the 1940 Act.

The Plans provide that, as compensation for administrative and other services provided to these classes, Management's activities and expenses related to the sale and distribution of these classes of shares, and ongoing services provided to investors in these classes, Management receives from each of these classes a fee at the annual rate of 0.25% of Core Bond Investor Class', Core Bond Class A's, Floating Rate Income Class A's, High Income Class A's, Municipal Intermediate Bond Class A's, Short Duration Class A's and Strategic Income Class A's average daily net assets, respectively; 0.10% of Strategic Income Trust Class' average daily net assets; 0.50% of High Income Class R3's average daily net assets; and 1.00% of Core Bond Class C's, Floating Rate Income Class C's, High Income Class C's, Municipal Intermediate Bond Class C's, Short Duration Class C's and Strategic Income Class C's average daily net assets, respectively. Management receives this amount to provide distribution and shareholder servicing for these classes and pays a portion of it to institutions that provide such services. Those institutions may use the payments for, among other purposes, compensating employees engaged in sales and/or shareholder servicing. The amount of fees paid by each class during any year may be more or less than the cost of distribution and other services provided to that class. NASD rules limit the amount of annual distribution fees that may be paid by a mutual fund and impose a ceiling on the cumulative distribution fees paid. The Trust's Plans comply with those rules.

Class A shares of each Fund are generally sold with an initial sales charge of up to 4.25% and no contingent deferred sales charge ("CDSC"), except that a CDSC of 1.00% applies to certain redemptions made within 18 months following purchases of $1 million or more without an initial sales charge. Class C shares are sold with no initial sales charge and a 1.00% CDSC if shares are sold within one year after purchase.

For the year ended October 31, 2010, Management, acting as underwriter and broker-dealer, received net commissions from the sale of Class A and Class C shares and CDSCs from the redemptions of Class A and Class C shares as follows:

	Underwriter				Broker-Dealer
	Net Commissions		CDSC		Net Commissions		CDSC
Core Bond Class A		$1,683		$—		$—		$—
Core Bond Class C		—		1,505		—		—
Floating Rate Income Class A		262		—		—		—
Floating Rate Income Class C		—		418		—		—
High Income Class A		28,754		2		—		—
High Income Class C		—		6,299		—		—
Municipal Intermediate Bond Class A		—		—		—		—
Municipal Intermediate Bond Class C		—		—		—		—
Short Duration Class A		—		—		—		—
Short Duration Class C		—		—		—		—
Strategic Income Class A		28,918		11		—		—
Strategic Income Class C		—		23,063		—		—

102

Each Fund has an expense offset arrangement in connection with its custodian contract. For the year ended October 31, 2010, the impact of this arrangement was a reduction of expenses of $98, $253, $812, $526, $75 and $263 for Core Bond, Floating Rate Income, High Income, Municipal Intermediate Bond, Short Duration, and Strategic Income, respectively.

Note C—Securities Transactions:

Cost of purchases and proceeds of sales and maturities of long-term securities (excluding short-term securities and financial futures contracts) for the year ended October 31, 2010, were as follows:

	Purchases of U.S. Government and Agency Obligations		Purchases excluding U.S. Government and Agency Obligations		Sales and Maturities of U.S. Government and Agency Obligations		Sales and Maturities excluding U.S. Government and Agency Obligations
Core Bond		$502,051,625		$6,690,445		$430,096,230		$40,979,466
Floating Rate Income		—		132,211,808		—		51,349,875
High Income		—		1,226,174,128		—		900,407,161
Municipal Intermediate Bond		—		134,812,422		—		110,929,045
Short Duration		24,925,622		22,231,690		23,533,161		20,104,749
Strategic Income		373,729,692		371,802,347		326,497,920		214,599,113

Note D—Fund Share Transactions:

Share activity for the years ended October 31, 2010 and October 31, 2009 was as follows:

	For the Year Ended October 31, 2010								For the Year Ended October 31, 2009
(000's omitted)	Shares Sold		Shares Issued on Reinvestment of Dividends and Distributions		Shares Redeemed		Total		Shares Sold		Shares Issued on Reinvestment of Dividends and Distributions		Shares Redeemed		Total
Core Bond:
Investor Class		511		54		(1,301)		(736)		1,052		118		(3,836)		(2,666)
Institutional Class		7,486		227		(2,450)		5,263		5,704		150		(3,768)		2,086
Class A		1,083		50		(800)		333		2,013		19		(227)		1,805
Class C		225		1		(39)		187		82		1		(18)		65
Floating Rate Income:
Institutional Class(2)		7,149		177		(390)		6,936		—		—		—		—
Class A(1)		2,254		22		(1,011)		1,265		—		—		—		—
Class C(2)		100		2		(30)		72		—		—		—		—
High Income:
Investor Class		13,963		3,577		(27,976)		(10,436)		51,650		3,412		(32,540)		22,522
Institutional Class		24,328		816		(7,111)		18,033		10,062		49		(135)		9,976	(3)
Class A		29,897		629		(4,092)		26,434		2,834		26		(60)		2,800	(3)
Class C		2,477		31		(122)		2,386		307		1		(13)		295	(3)
Class R3		51		1		(12)		40		9		—		—		9	(3)

103

	For the Year Ended October 31, 2010								For the Year Ended October 31, 2009
(000's omitted)	Shares Sold		Shares Issued on Reinvestment of Dividends and Distributions		Shares Redeemed		Total		Shares Sold		Shares Issued on Reinvestment of Dividends and Distributions		Shares Redeemed		Total
Municipal Intermediate Bond:
Investor Class		4,241		280		(2,498)		2,023		6,539		94		(816)		5,817
Institutional Class(4)		6		—		—		6		—		—		—		—
Class A(4)		14		—		—		14		—		—		—		—
Class C(4)		6		—		—		6		—		—		—		—
Short Duration:
Investor Class		2,041		232		(2,065)		208		1,059		334		(2,452)		(1,059)
Institutional Class(4)		4		—		—		4		—		—		—		—
Trust Class		419		38		(331)		126		349		56		(541)		(136)
Class A(4)		7		—		—		7		—		—		—		—
Class C(4)		4		—		—		4		—		—		—		—
Strategic Income:
Institutional Class		10,340		189		(1,714)		8,815		1,472		38		(264)		1,246
Trust Class		904		56		(142)		818		709		11		(128)		592
Class A		10,236		361		(4,322)		6,275		7,204		55		(837)		6,422
Class C		5,290		112		(513)		4,889		3,493		12		(101)		3,404

(1) Period from December 29, 2009 (Commencement of Operations) to October 31, 2010.

(2) Period from December 30, 2009 (Commencement of Operations) to October 31, 2010.

(3) Period from May 27, 2009 (Commencement of Operations) to October 31, 2009.

(4) Period from June 21, 2010 (Commencement of Operations) to October 31, 2010.

Note E—Line of Credit:

During the fiscal year ended October 31, 2010, Core Bond, Floating Rate Income (added to the line of credit on March 25, 2010), High Income, Short Duration and Strategic Income were participants in a single committed, unsecured $200,000,000 ($150,000,000 prior to September 17, 2010) line of credit with State Street, to be used only or temporary or emergency purposes. Other investment companies managed by Management also participate in this line of credit on the same terms. Interest is charged on borrowings under this line of credit at the higher of (a) the Federal Funds Rate plus 1.25% per annum or (b) the Overnight LIBOR Rate plus 1.25% per annum. A facility fee of 0.125% (0.15% prior to September 17, 2010) per annum of the available line of credit is charged, of which each part icipating Fund has agreed to pay its pro rata share, based on the ratio of its individual net assets to the net assets of all participants at the time the fee is due and payable. The fee is paid quarterly in arrears. Because several mutual funds participate, there is no assurance that an individual Fund will have access to all or any part of the $200,000,000 ($150,000,000 prior to September 17, 2010) at any particular time. There were no loans outstanding pursuant to this line of credit at October 31, 2010. During the fiscal year ended October 31, 2010, none of the Funds utilized this line of credit.

104

Note F—Investments In Affiliates:

	Balance of Shares Held October 31, 2009		Gross Purchases and Additions		Gross Sales and Reductions		Balance of Shares Held October 31, 2010		Value October 31, 2010		Income from Investments in Affiliated Issuers Included in Total Income
Core Bond:
Neuberger Berman Securities Lending Quality Fund, LLC*		1,080,134		63,813		1,143,947		—		$—		$373
High Income:
Neuberger Berman Securities Lending Quality Fund, LLC*		12,894,714		133,930,526		146,825,240		—		$—	$	$18,216

Quality Fund, a fund that was managed by NBFI, an affiliate of Management, was used to invest cash the Funds received as collateral for securities loaned as approved by the Board. Because all shares of Quality Fund were held by funds in the related investment management complex, Quality Fund may have been considered an affiliate of the Funds.

105

Financial Highlights

The following tables include selected data for a share outstanding throughout each period and other performance information derived from the Financial Statements.

	Net Asset Value, Beginning of Year		Net Investment Income (Loss)@		Net Gains or Losses on Securities (both realized and unrealized)		Total From Investment Operations		Dividends from Net Investment Income		Distributions from Net Realized Capital Gains		Tax Return of Capital		Total Distributions
Core Bond Fund
Investor Class
10/31/2010	$	10.19	$	0.28	$	0.72	$	1.00	$	(0.28)	$	(0.05)	$	—	$	(0.33)
10/31/2009	$	8.64	$	0.40	$	1.55	$	1.95	$	(0.40)	$	(0.00)	$	—	$	(0.40)
10/31/2008	$	9.76	$	0.39	$	(1.12)	$	(0.73)	$	(0.39)	$	—	$	—	$	(0.39)
10/31/2007	$	9.85	$	0.44	$	(0.09)	$	0.35	$	(0.44)	$	—	$	—	$	(0.44)
10/31/2006	$	10.09	$	0.41	$	0.09	$	0.50	$	(0.43)	$	(0.31)	$	—	$	(0.74)
Institutional Class
10/31/2010	$	10.21	$	0.32	$	0.73	$	1.05	$	(0.33)	$	(0.05)	$	—	$	(0.38)
10/31/2009	$	8.65	$	0.43	$	1.57	$	2.00	$	(0.44)	$	(0.00)	$	—	$	(0.44)
10/31/2008	$	9.77	$	0.43	$	(1.12)	$	(0.69)	$	(0.43)	$	—	$	—	$	(0.43)
10/31/2007	$	9.86	$	0.48	$	(0.09)	$	0.39	$	(0.48)	$	—	$	—	$	(0.48)
10/31/2006	$	10.11	$	0.45	$	0.08	$	0.53	$	(0.47)	$	(0.31)	$	—	$	(0.78)
Class A
10/31/2010	$	10.18	$	0.28	$	0.72	$	1.00	$	(0.28)	$	(0.05)	$	—	$	(0.33)
10/31/2009	$	8.64	$	0.37	$	1.57	$	1.94	$	(0.40)	$	(0.00)	$	—	$	(0.40)
Period from 12/20/2007^ to 10/31/2008	$	9.77	$	0.33	$	(1.13)	$	(0.80)	$	(0.33)	$	—	$	—	$	(0.33)
Class C
10/31/2010	$	10.18	$	0.19	$	0.74	$	0.93	$	(0.20)	$	(0.05)	$	—	$	(0.25)
10/31/2009	$	8.64	$	0.32	$	1.55	$	1.87	$	(0.33)	$	(0.00)	$	—	$	(0.33)
Period from 12/20/2007^ to 10/31/2008	$	9.77	$	0.26	$	(1.12)	$	(0.86)	$	(0.27)	$	—	$	—	$	(0.27)
Floating Rate Income Fund
Institutional Class
Period from 12/30/2009^ to 10/31/2010	$	10.00	$	0.44	$	0.17	$	0.61	$	(0.44)	$	—	$	—	$	(0.44)
Class A
Period from 12/29/2009^ to 10/31/2010	$	10.00	$	0.41	$	0.16	$	0.57	$	(0.40)	$	—	$	—	$	(0.40)

See Notes to Financial Highlights

106

	Capital Contributions		Net Asset Value, End of Year		Total Return††			Net Assets, End of Year (in millions)		Ratio of Gross Expenses to Average Net Assets#			Ratio of Net Expenses to Average Net Assets			Ratio of Net Investment Income/ (Loss) to Average Net Assets			Portfolio Turnover Rate
Core Bond Fund
Investor Class
10/31/2010	$	—	$	10.86		10.03	%	$	18.6		.85	%		.85	%‡		2.66	%		340	%
10/31/2009	$	—	$	10.19		23.10	%	$	25.0		.86	%		.86	%‡		4.39	%		450	%
10/31/2008	$	—	$	8.64		(7.72	)%	$	44.2		.85	%		.85	%‡		4.08	%		430	%
10/31/2007	$	—	$	9.76		3.67	%	$	35.9		.85	%		.85	%‡		4.51	%		404	%
10/31/2006	$	—	$	9.85		5.21	%	$	33.9		.86	%		.85	%‡		4.22	%		399	%
Institutional Class
10/31/2010	$	—	$	10.88		10.45	%	$	120.3		.45	%		.45	%‡		3.02	%		340	%
10/31/2009	$	—	$	10.21		23.70	%	$	59.1		.45	%		.45	%‡		4.60	%		450	%
10/31/2008	$	—	$	8.65		(7.34	)%	$	32.1		.45	%		.45	%‡		4.48	%		430	%
10/31/2007	$	—	$	9.77		4.08	%	$	47.2		.45	%		.45	%‡		4.91	%		404	%
10/31/2006	$	—	$	9.86		5.52	%	$	44.5		.46	%		.45	%‡		4.60	%		399	%
Class A
10/31/2010	$	—	$	10.85		10.04	%	$	23.4		.85	%		.85	%‡		2.64	%		340	%
10/31/2009	$	—	$	10.18		22.96	%	$	18.5		.85	%		.85	%‡		3.81	%		450	%
Period from 12/20/2007^ to 10/31/2008	$	—	$	8.64		(8.37	)%**	$	0.1		.85	%*		.85	%‡*		4.01	%*		430	%^^
Class C
10/31/2010	$	—	$	10.86		9.31	%	$	2.9		1.60	%		1.60	%‡		1.83	%		340	%
10/31/2009	$	—	$	10.18		22.04	%	$	0.8		1.61	%		1.61	%‡		3.39	%		450	%
Period from 12/20/2007^ to 10/31/2008	$	—	$	8.64		(8.98	)%**	$	0.1		1.60	%*		1.60	%‡*		3.24	%*		430	%^^
Floating Rate Income Fund
Institutional Class
Period from 12/30/2009^ to 10/31/2010	$	—	$	10.17		6.24	%**	$	70.5		.70	%*		.70	%‡*		5.28	%*		112	%**
Class A
Period from 12/29/2009^ to 10/31/2010	$	—	$	10.17		5.85	%**	$	12.9		1.07	%*		1.07	%‡*		4.87	%*		112	%**

107

Financial Highlights (cont'd)

	Net Asset Value, Beginning of Year		Net Investment Income (Loss)@		Net Gains or Losses on Securities (both realized and unrealized)			Total From Investment Operations			Dividends from Net Investment Income			Distributions from Net Realized Capital Gains			Tax Return of Capital		Total Distributions
Class C
Period from 12/30/2009^ to 10/31/2010	$	10.00	$	0.35	$	0.18		$	0.53		$	(0.36	)	$	—		$	—	$	(0.36	)
High Income Bond Fund
Investor Class
10/31/2010	$	8.66	$	0.76	$	0.87		$	1.63		$	(0.80	)	$	—		$	—	$	(0.80	)
10/31/2009	$	6.57	$	0.74	$	2.02		$	2.76		$	(0.67	)	$	—		$	—	$	(0.67	)
10/31/2008	$	9.00	$	0.66	$	(2.44	)	$	(1.78	)	$	(0.66	)	$	—		$	—	$	(0.66	)
10/31/2007	$	9.08	$	0.68	$	(0.08	)	$	0.60		$	(0.68	)	$	—		$	—	$	(0.68	)
10/31/2006	$	9.10	$	0.59	$	(0.02	)	$	0.57		$	(0.59	)	$	—		$	—	$	(0.59	)
Institutional Class
10/31/2010	$	8.68	$	0.77	$	0.87		$	1.64		$	(0.82	)	$	—		$	—	$	(0.82	)
Period from 5/27/2009^ to 10/31/2009	$	7.51	$	0.36	$	1.14		$	1.50		$	(0.33	)	$	—		$	—	$	(0.33	)
Class A
10/31/2010	$	8.66	$	0.70	$	0.91		$	1.61		$	(0.78	)	$	—		$	—	$	(0.78	)
Period from 5/27/2009^ to 10/31/2009	$	7.51	$	0.33	$	1.13		$	1.46		$	(0.31	)	$	—		$	—	$	(0.31	)
Class C
10/31/2010	$	8.67	$	0.64	$	0.91		$	1.55		$	(0.72	)	$	—		$	—	$	(0.72	)
Period from 5/27/2009^ to 10/31/2009	$	7.51	$	0.30	$	1.14		$	1.44		$	(0.28	)	$	—		$	—	$	(0.28	)
Class R3
10/31/2010	$	8.67	$	0.69	$	0.89		$	1.58		$	(0.76	)	$	—		$	—	$	(0.76	)
Period from 5/27/2009^ to 10/31/2009	$	7.51	$	0.33	$	1.13		$	1.46		$	(0.30	)	$	—		$	—	$	(0.30	)
Municipal Intermediate Bond Fund
Investor Class
10/31/2010	$	11.22	$	0.36	$	0.37		$	0.73		$	(0.36	)	$	—		$	—	$	(0.36	)
10/31/2009	$	10.60	$	0.35	$	0.64		$	0.99		$	(0.37	)	$	—		$	—	$	(0.37	)
10/31/2008	$	11.20	$	0.41	$	(0.59	)	$	(0.18	)	$	(0.41	)	$	(0.01	)	$	—	$	(0.42	)
10/31/2007	$	11.36	$	0.41	$	(0.12	)	$	0.29		$	(0.41	)	$	(0.04	)	$	—	$	(0.45	)
10/31/2006	$	11.33	$	0.40	$	0.08		$	0.48		$	(0.40	)	$	(0.05	)	$	—	$	(0.45	)

See Notes to Financial Highlights

108

	Capital Contributions		Net Asset Value, End of Year		Total Return††			Net Assets, End of Year (in millions)		Ratio of Gross Expenses to Average Net Assets#				Ratio of Net Expenses to Average Net Assets			Ratio of Net Investment Income/ (Loss) to Average Net Assets			Portfolio Turnover Rate
Class C
Period from 12/30/2009^ to 10/31/2010	$	—	$	10.17		5.39	%**	$	0.7		1.82	%*			1.82	%‡*		4.23	%*		112	%**
High Income Bond Fund
Investor Class
10/31/2010	$	—	$	9.49		19.71	%	$	363.6		.96	%			.96	%§		8.50	%		144	%
10/31/2009	$	—	$	8.66		44.38	%	$	422.2		1.00	%			1.00	%‡		9.90	%		167	%
10/31/2008	$	0.01	$	6.57		(20.86	)%	$	172.3		.92	%			.92	%‡		7.96	%		115	%
10/31/2007	$	—	$	9.00		6.73	%	$	369.2		.92	%			.92	%‡		7.41	%		153	%
10/31/2006	$	—	$	9.08		6.53	%	$	588.3		.90	%			.89	%‡		6.52	%		136	%
Institutional Class
10/31/2010	$	—	$	9.50		19.81	%	$	266.2		.75	%			.75	%‡		8.55	%		144	%
Period from 5/27/2009^ to 10/31/2009	$	—	$	8.68		20.23	%**	$	86.6		.75	%*			.75	%‡*		9.86	%*		167	%^^
Class A
10/31/2010	$	—	$	9.49		19.52	%	$	277.5		1.12	%			1.12	%‡		7.75	%		144	%
Period from 5/27/2009^ to 10/31/2009	$	—	$	8.66		19.69	%**	$	24.3		1.12	%*			1.12	%‡*		9.19	%*		167	%^^
Class C
10/31/2010	$	—	$	9.50		18.60	%	$	25.5		1.87	%	��		1.87	%‡		7.05	%		144	%
Period from 5/27/2009^ to 10/31/2009	$	—	$	8.67		19.43	%**	$	2.6		1.87	%*			1.87	%‡*		8.26	%*		167	%^^
Class R3
10/31/2010	$	—	$	9.49		19.08	%	$	0.5		1.37	%			1.37	%‡		7.60	%		144	%
Period from 5/27/2009^ to 10/31/2009	$	—	$	8.67		19.76	%**	$	0.1		1.37	%*			1.37	%‡*		9.29	%*		167	%^^
Municipal Intermediate Bond Fund
Investor Class
10/31/2010	$	—	$	11.59		6.56	%	$	118.8		.65	%			.65	%‡		3.12	%		101	%
10/31/2009	$	—	$	11.22		9.42	%	$	92.3		.65	%			.65	%‡		3.15	%		146	%
10/31/2008	$	—	$	10.60		(1.74	)%	$	25.6		.66	%			.64	%‡		3.65	%		39	%
10/31/2007	$	—	$	11.20		2.61	%	$	27.8		.66	%			.65	%‡		3.61	%		9	%
10/31/2006	$	—	$	11.36		4.38	%	$	32.1		.66	%			.65	%‡		3.56	%		28	%

109

Financial Highlights (cont'd)

	Net Asset Value, Beginning of Year		Net Investment Income (Loss)@		Net Gains or Losses on Securities (both realized and unrealized)			Total From Investment Operations			Dividends from Net Investment Income			Distributions from Net Realized Capital Gains		Tax Return of Capital		Total Distributions
Institutional Class
Period from 6/21/2010^ to 10/31/2010	$	11.36	$	0.14	$	0.23		$	0.37		$	(0.14	)	$	—	$	—	$	(0.14	)
Class A
Period from 6/21/2010^ to 10/31/2010	$	11.36	$	0.12	$	0.24		$	0.36		$	(0.12	)	$	—	$	—	$	(0.12	)
Class C
Period from 6/21/2010^ to 10/31/2010	$	11.36	$	0.09	$	0.23		$	0.32		$	(0.09	)	$	—	$	—	$	(0.09	)
Short Duration Bond Fund
Investor Class
10/31/2010	$	7.83	$	0.17	$	0.38		$	0.55		$	(0.29	)	$	—	$	—	$	(0.29	)
10/31/2009	$	7.91	$	0.35	$	(0.05	)	$	0.30		$	(0.38	)	$	—	$	—	$	(0.38	)
10/31/2008	$	9.13	$	0.41	$	(1.18	)	$	(0.77	)	$	(0.45	)	$	—	$	—	$	(0.45	)
10/31/2007	$	9.11	$	0.41	$	0.06		$	0.47		$	(0.45	)	$	—	$	—	$	(0.45	)
10/31/2006	$	9.13	$	0.35	$	0.03		$	0.38		$	(0.40	)	$	—	$	—	$	(0.40	)
Institutional Class
Period from 6/21/2010^ to 10/31/2010	$	7.97	$	0.06	$	0.16		$	0.22		$	(0.10	)	$	—	$	—	$	(0.10	)
Trust Class
10/31/2010	$	7.46	$	0.16	$	0.35		$	0.51		$	(0.26	)	$	—	$	—	$	(0.26	)
10/31/2009	$	7.54	$	0.33	$	(0.06	)	$	0.27		$	(0.35	)	$	—	$	—	$	(0.35	)
10/31/2008	$	8.70	$	0.38	$	(1.12	)	$	(0.74	)	$	(0.42	)	$	—	$	—	$	(0.42	)
10/31/2007	$	8.68	$	0.39	$	0.05		$	0.44		$	(0.42	)	$	—	$	—	$	(0.42	)
10/31/2006	$	8.70	$	0.32	$	0.03		$	0.35		$	(0.37	)	$	—	$	—	$	(0.37	)
Class A
Period from 6/21/2010^ to 10/31/2010	$	7.60	$	0.05	$	0.15		$	0.20		$	(0.08	)	$	—	$	—	$	(0.08	)
Class C
Period from 6/21/2010^ to 10/31/2010	$	7.60	$	0.03	$	0.15		$	0.18		$	(0.06	)	$	—	$	—	$	(0.06	)

See Notes to Financial Highlights

110

	Capital Contributions		Net Asset Value, End of Year		Total Return††			Net Assets, End of Year (in millions)		Ratio of Gross Expenses to Average Net Assets#			Ratio of Net Expenses to Average Net Assets			Ratio of Net Investment Income/ (Loss) to Average Net Assets			Portfolio Turnover Rate
Institutional Class
Period from 6/21/2010^ to 10/31/2010	$	—	$	11.59		3.25	%**	$	0.1		.50	%*		.50	%‡*		3.30	%*		101	%^^
Class A
Period from 6/21/2010^ to 10/31/2010	$	—	$	11.60		3.20	%**	$	0.2		.87	%*		.87	%‡*		3.00	%*		101	%^^
Class C
Period from 6/21/2010^ to 10/31/2010	$	—	$	11.59		2.83	%**	$	0.1		1.62	%*		1.62	%‡*		2.14	%*		101	%^^
Short Duration Bond Fund
Investor Class
10/31/2010	$	—	$	8.09		7.08	%	$	56.1		.70	%		.70	%‡		2.19	%		69	%
10/31/2009	$	—	$	7.83		4.18	%	$	52.6		.70	%		.70	%‡		4.73	%		48	%
10/31/2008	$	—	$	7.91		(8.70	)%	$	61.6		.70	%		.70	%‡		4.73	%		10	%
10/31/2007	$	—	$	9.13		5.24	%	$	93.4		.70	%		.70	%‡		4.54	%		53	%
10/31/2006	$	—	$	9.11		4.28	%	$	108.1		.71	%		.70	%‡		3.80	%		74	%
Institutional Class
Period from 6/21/2010^ to 10/31/2010	$	—	$	8.09		2.73	%**	$	0.0		.50	%*		.50	%‡*		2.16	%*		69	%^^
Trust Class
10/31/2010	$	—	$	7.71		7.01	%	$	9.4		.80	%		.80	%‡		2.09	%		69	%
10/31/2009	$	—	$	7.46		4.02	%	$	8.1		.80	%		.80	%‡		4.62	%		48	%
10/31/2008	$	—	$	7.54		(8.76	)%	$	9.3		.80	%		.80	%‡		4.64	%		10	%
10/31/2007	$	—	$	8.70		5.15	%	$	13.1		.80	%		.80	%‡		4.44	%		53	%
10/31/2006	$	—	$	8.68		4.16	%	$	16.6		.81	%		.80	%‡		3.69	%		74	%
Class A
Period from 6/21/2010^ to 10/31/2010	$	—	$	7.72		2.67	%**	$	0.1		.87	%*		.87	%‡*		1.83	%*		69	%^^
Class C
Period from 6/21/2010^ to 10/31/2010	$	—	$	7.72		2.39	%**	$	0.0		1.62	%*		1.62	%‡*		1.04	%*		69	%^^

111

Financial Highlights (cont'd)

	Net Asset Value, Beginning of Year		Net Investment Income (Loss)@		Net Gains or Losses on Securities (both realized and unrealized)			Total From Investment Operations			Dividends from Net Investment Income			Distributions from Net Realized Capital Gains			Tax Return of Capital			Total Distributions
Strategic Income Fund
Institutional Class
10/31/2010	$	10.58	$	0.53	$	0.81		$	1.34		$	(0.56	)	$	(0.13	)	$	—		$	(0.69	)
10/31/2009	$	8.78	$	0.45	$	1.79		$	2.24		$	(0.44	)	$	—		$	—		$	(0.44	)
10/31/2008	$	10.38	$	0.44	$	(1.02	)	$	(0.58	)	$	(0.31	)@	$	(0.61	)@	$	(0.10	)@	$	(1.02	)
10/31/2007	$	10.65	$	0.43	$	0.15		$	0.58		$	(0.45	)	$	(0.40	)	$	—		$	(0.85	)
10/31/2006	$	10.90	$	0.38	$	0.65		$	1.03		$	(0.46	)	$	(0.82	)	$	—		$	(1.28	)
Trust Class
10/31/2010	$	10.58	$	0.49	$	0.81		$	1.30		$	(0.52	)	$	(0.13	)	$	—		$	(0.65	)
10/31/2009	$	8.77	$	0.43	$	1.78		$	2.21		$	(0.40	)	$	—		$	—		$	(0.40	)
10/31/2008	$	10.38	$	0.42	$	(1.05	)	$	(0.63	)	$	(0.27	)@	$	(0.61	)@	$	(0.10	)@	$	(0.98	)
Period from 4/2/2007^ to 10/31/2007	$	10.39	$	0.24	$	(0.02	)	$	0.22		$	(0.23	)	$	—		$	—		$	(0.23	)
Class A
10/31/2010	$	10.59	$	0.48	$	0.81		$	1.29		$	(0.51	)	$	(0.13	)	$	—		$	(0.64	)
10/31/2009	$	8.78	$	0.43	$	1.77		$	2.20		$	(0.39	)	$	—		$	—		$	(0.39	)
Period from 12/20/2007^ to 10/31/2008	$	10.19	$	0.36	$	(0.78	)	$	(0.42	)	$	(0.28	)@	$	(0.61	)@	$	(0.10	)@	$	(0.99	)
Class C
10/31/2010	$	10.58	$	0.41	$	0.81		$	1.22		$	(0.44	)	$	(0.13	)	$	—		$	(0.57	)
10/31/2009	$	8.78	$	0.36	$	1.76		$	2.12		$	(0.32	)	$	—		$	—		$	(0.32	)
Period from 12/20/2007^ to 10/31/2008	$	10.19	$	0.29	$	(0.77	)	$	(0.48	)	$	(0.22	)@	$	(0.61	)@	$	(0.10	)@	$	(0.93	)

See Notes to Financial Highlights

112

	Capital Contributions		Net Asset Value, End of Year		Total Return††			Net Assets, End of Year (in millions)		Ratio of Gross Expenses to Average Net Assets#			Ratio of Net Expenses to Average Net Assets			Ratio of Net Investment Income/ (Loss) to Average Net Assets			Portfolio Turnover Rate
Strategic Income Fund
Institutional Class
10/31/2010	$	—	$	11.23		13.17	%	$	118.8		.75	%		.75	%‡		4.88	%		238	%
10/31/2009	$	—	$	10.58		25.97	%	$	18.7		.75	%		.75	%‡		4.59	%		322	%
10/31/2008	$	—	$	8.78		(6.09	)%	$	4.6		.84	%		.83	%‡		4.54	%		323	%
10/31/2007	$	—	$	10.38		5.64	%	$	17.0		.86	%		.85	%‡		4.10	%		99	%
10/31/2006	$	—	$	10.65		10.34	%	$	20.4		.86	%		.85	%‡		3.66	%		111	%
Trust Class
10/31/2010	$	—	$	11.23		12.78	%	$	16.3		1.10	%		1.10	%‡		4.56	%		238	%
10/31/2009	$	—	$	10.58		25.66	%	$	6.7		1.10	%		1.10	%‡		4.32	%		322	%
10/31/2008	$	—	$	8.77		(6.54	)%	$	0.3		1.15	%		1.14	%‡		4.36	%		323	%
Period from 4/2/2007^ to 10/31/2007	$	—	$	10.38		2.16	%**	$	0.2		1.11	%*		1.10	%‡*		3.92	%*		99	%^^
Class A
10/31/2010	$	—	$	11.24		12.72	%	$	142.9		1.15	%		1.15	%‡		4.44	%		238	%
10/31/2009	$	—	$	10.59		25.51	%	$	68.2		1.15	%		1.15	%‡		4.25	%		322	%
Period from 12/20/2007^ to 10/31/2008	$	—	$	8.78		(4.64	)%**	$	0.2		1.21	%*		1.20	%‡*		4.36	%*		323	%^^
Class C
10/31/2010	$	—	$	11.23		11.93	%	$	93.3		1.85	%		1.85	%‡		3.75	%		238	%
10/31/2009	$	—	$	10.58		24.47	%	$	36.2		1.85	%		1.85	%‡		3.53	%		322	%
Period from 12/20/2007^ to 10/31/2008	$	—	$	8.78		(5.22	)%**	$	0.1		1.91	%*		1.90	%‡*		3.56	%*		323	%^^

113

Notes to Financial Highlights Income Funds

††	Total return based on per share NAV reflects the effects of changes in NAV on the performance of each Fund during each fiscal period and assumes income dividends and other distributions, if any, were reinvested, but does not reflect the effect of sales charges. Results represent past performance and do not guarantee future results. Current returns may be lower or higher than the performance data quoted. Investment returns and principal may fluctuate and shares when redeemed may be worth more or less than original cost. For each Fund, total return would have been lower if Management had not reimbursed and/or waived certain expenses. Total return would have been higher if Management had not recouped previously reimbursed expenses. For the year ended October 31, 2007, Management rei mbursed Short Duration for losses incurred in connection with the disposition of foreign currency contracts, which had no impact on total return. For the year ended October 31, 2008, High Income recorded a capital contribution from Management in connection with a reallocation of expenses that are shared by the Fund and Management, which had a (.12)% impact on total return.

#	The Fund is required to calculate an expense ratio without taking into consideration any expense reductions related to expense offset arrangements.

‡	After reimbursement of expenses and/or waiver of a portion of the investment management fee by Management. Had Management not undertaken such actions, the annualized ratios of net expenses to average daily net assets would have been:

	Year Ended October 31,
	2010			2009			2008			2007			2006
Core Bond Fund Investor Class		1.19	%		1.40	%		1.25	%		1.30	%		1.46	%
Core Bond Fund Institutional Class		.70	%		.94	%		.83	%		.83	%		.91	%
Core Bond Fund Class A		1.09	%		1.36	%		2.73	%(1)		—			—	��
Core Bond Fund Class C		1.84	%		2.68	%		3.43	%(1)		—			—
Floating Rate Income Fund Institutional Class		1.87	%(5)		—			—			—			—
Floating Rate Income Fund Class A		2.21	%(4)		—			—			—			—
Floating Rate Income Fund Class C		3.39	%(5)		—			—			—			—
High Income Bond Fund Investor Class		—			1.04	%		.92	%		.92	%		.90	%
High Income Bond Fund Institutional Class		.77	%		.91	%(3)		—			—			—
High Income Bond Fund Class A		.1.16	%		1.27	%(3)		—			—			—
High Income Bond Fund Class C		1.93	%		2.02	%(3)		—			—			—
High Income Bond Fund Class R3		1.72	%		5.53	%(3)		—			—			—
Municipal Intermediate Bond Fund Investor Class		1.01	%		1.12	%		1.24	%		1.17	%		1.19	%
Municipal Intermediate Bond Fund Institutional Class		26.10	%(6)		—			—			—			—
Municipal Intermediate Bond Fund Class A		23.88	%(6)		—			—			—			—
Municipal Intermediate Bond Fund Class C		22.28	%(6)		—			—			—			—
Short Duration Bond Fund Investor Class		1.27	%		1.18	%		.95	%		.90	%		.80	%
Short Duration Bond Fund Institutional Class		33.53	%(6)		—			—			—			—
Short Duration Bond Fund Trust Class		1.48	%		1.58	%		1.27	%		1.18	%		1.06	%
Short Duration Bond Fund Class A		26.42	%(6)		—			—			—			—
Short Duration Bond Fund Class C		34.63	%(6)		—			—			—			—
Strategic Income Fund Institutional Class		.96	%		2.47	%		4.03	%		2.73	%		2.29	%
Strategic Income Fund Trust Class		1.36	%		3.00	%		9.14	%		4.81	%(2)		—
Strategic Income Fund Class A		1.37	%		1.93	%		7.52	%(1)		—			—
Strategic Income Fund Class C		2.10	%		2.55	%		8.75	%(1)		—			—

114

Notes to Financial Highlights (cont'd)

(1)	Period from December 20, 2007 to October 31, 2008.

(2)	Period from April 2, 2007 to October 31, 2007.

(3)	Period from May 27, 2009 to October 31, 2009.

(4)	Period from December 29, 2009 to October 31, 2010. Organization expense, which is an extraordinary non-recurring expense, is included in ratios on a non-annualized basis.

(5)	Period from December 30, 2009 to October 31, 2010. Organization expense, which is an extraordinary non-recurring expense, is included in ratios on a non-annualized basis.

(6)	Period from June 21, 2010 to October 31, 2010.

§	After reimbursement of expenses previously paid by Management. Had the Fund not made such reimbursements, the annualized ratios of net expenses to average daily net assets would have been:

		Year Ended October 31, 2010
High Income Bond Fund Investor Class		.93%

^	The date investment operations commenced.

@	Calculated based on the average number of shares outstanding during each fiscal period.

*	Annualized.

**	Not annualized.

^^	Portfolio turnover is calculated at the Fund level. Percentage indicated was calculated for the year ended October 31, 2007 for Strategic Income (Trust Class), for the year ended October 31, 2008 for Core Bond and Strategic Income (Class A and C), for the year ended October 31, 2009 for High Income (Institutional Class, Class A, Class C and Class R3) and for the year ended October 31, 2010 for Municipal Intermediate Bond and Short Duration (Institutional Class, Class A and Class C).

115

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of

Neuberger Berman High Income Bond Fund

Neuberger Berman Municipal Intermediate Bond Fund

Neuberger Berman Short Duration Bond Fund

Neuberger Berman Strategic Income Fund

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Neuberger Berman High Income Bond Fund, Neuberger Berman Municipal Intermediate Bond Fund, Neuberger Berman Short Duration Bond Fund, and Neuberger Berman Strategic Income Fund, four of the series constituting the Neuberger Berman Income Funds (the "Trust") as of October 31, 2010, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Trust'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 audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Trust's 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 Trust'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 and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2010 by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. 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 Neuberger Berman High Income Bond Fund, Neuberger Berman Municipal Intermediate Bond Fund, Neuberger Berman Short Duration Bond Fund, and Neuberger Berman Strategic Income Fund at October 31, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

December 17, 2010

116

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders

Neuberger Berman Income Funds

We have audited the accompanying statements of assets and liabilities of the Neuberger Berman Core Bond Fund and the Neuberger Berman Floating Rate Income Fund, each a series of the Neuberger Berman Income Funds (the "Trust"), including the schedules of investments, as of October 31, 2010, and the related statements of operations for the year then ended (with respect to Neuberger Berman Floating Rate Income Fund, the period December 29, 2009 to October 31, 2010), the statements of changes in net assets for each of the two years in the period then ended (with respect to Neuberger Berman Floating Rate Income Fund, the period December 29, 2009 to October 31, 2010), and the financial highlights for each of the five years in the period then ended (with respect to Neuberger Berman Floating Rate Income Fund, the period December 29, 2009 to Octob er 31, 2010). These financial statements and financial highlights are the responsibility of the Trust'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 Trust 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 Trust's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amou nts 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 October 31, 2010, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. 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 above mentioned series of the Neuberger Berman Income Funds, as of October 31, 2010, and the results of their operations, the changes in their net assets, and the financial highlights for the periods indicated above, in conformity with accounting principles generally accepted in the United States of America.

Philadelphia, Pennsylvania

December 17, 2010

117

Neuberger Berman Strategic Income Fund (NRSIX) N-CSRCertified annual shareholder report (management investment company)