Federated Fixed Income Securities NCSR Certified annual shareholder report (management investment company)

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form N-CSR

Certified Shareholder Report of Registered Management Investment Companies

811-6447

(Investment Company Act File Number)

Federated Fixed Income Securities, Inc.

_______________________________________________________________

(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds

4000 Ericsson Drive

Warrendale, Pennsylvania 15086-7561

(Address of Principal Executive Offices)

(412) 288-1900

(Registrant's Telephone Number)

John W. McGonigle, Esquire

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

(Notices should be sent to the Agent for Service)

Date of Fiscal Year End: 9/30/09

Date of Reporting Period: 9/30/09

Item 1. Reports to Stockholders

Federated Municipal Ultrashort Fund

Established 2000

A Portfolio of Federated Fixed Income Securities, Inc.

ANNUAL SHAREHOLDER REPORT

September 30, 2009

Class A Shares

FINANCIAL HIGHLIGHTS
SHAREHOLDER EXPENSE EXAMPLE
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
PORTFOLIO OF INVESTMENTS SUMMARY TABLE
PORTFOLIO OF INVESTMENTS
STATEMENT OF ASSETS AND LIABILITIES
STATEMENT OF OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
NOTES TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BOARD OF DIRECTORS AND CORPORATION OFFICERS

EVALUATION AND APPROVAL OF ADVISORY CONTRACT
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
QUARTERLY PORTFOLIO SCHEDULE

Financial Highlights - Class A Shares

(For a Share Outstanding Throughout Each Period)¹

Year Ended September 30	2009	2008	2007	2006	2005
Net Asset Value, Beginning of Period	$9.92	$10.02	$10.05	$10.05	$10.10
Income From Investment Operations:
Net investment income	0.21	0.33	0.33	0.29	0.19
Net realized and unrealized gain (loss) on investments	0.10	(0.11)	(0.03)	(0.00)²	(0.05)
TOTAL FROM INVESTMENT OPERATIONS	0.31	0.22	0.30	0.29	0.14
Less Distributions:
Distributions from net investment income	(0.21)	(0.32)	(0.33)	(0.29)	(0.19)
Net Asset Value, End of Period	$10.02	$9.92	$10.02	$10.05	$10.05
Total Return³	3.21%	2.27%	3.01%	2.89%	1.42%
Ratios to Average Net Assets:
Net expenses	0.80%⁴	0.80%⁴	0.80%	0.80%	0.80%
Net investment income	1.77%	3.12%	3.26%	2.76%	1.86%
Expense waiver/reimbursement⁵	0.44%	0.45%	0.50%	0.49%	0.44%
Supplemental Data:
Net assets, end of period (000 omitted)	$2,543,523	$566,536	$67,502	$81,366	$230,669
Portfolio turnover	44%	123%	52%	46%	55%

1	On September 26, 2005, the Fund effected a one for five reverse share split. As a result of the reverse share split: (1) the number of outstanding Shares of the Fund decreased by a factor of five; and (2) since the Fund's total number of Shares outstanding decreased, the net asset value per Fund Share (NAV/Share) increased. The reverse share split did not affect the value of the Fund's net assets or each shareholder's proportional ownership interest in those assets. Per share data has been restated, where applicable.
2	Represents less than $0.01.
3	Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
4	The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.80% and 0.80% for the years ended September 30, 2009 and 2008, respectively, after taking into account these expense reductions.
5	This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

Shareholder Expense Example (unaudited)

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or shareholder services fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2009 to September 30, 2009.

ACTUAL EXPENSES

The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred 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 under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Annual Shareholder Report

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value 4/1/2009	Ending Account Value 9/30/2009	Expenses Paid During Period¹
Actual	$1,000	$1,012.00	$4.04
Hypothetical (assuming a 5% return before expenses)	$1,000	$1,021.06	$4.05

1	Expenses are equal to the Fund's annualized net expense ratio of 0.80%, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half-year period).

Annual Shareholder Report

Management's Discussion of Fund
Performance (unaudited)

The Fund's total return, based on net asset value, for the 12-month reporting period was 3.21% for the Class A Shares.¹ The total return of the Barclays Capital 1-Year Municipal Bond Index (BC1MB),² the Fund's benchmark index, was 4.70% and the total return of the Lipper Tax-Exempt Money Market Funds Average (LTEMMFA),³ a performance benchmark for the Fund, was 0.51% during the same period. The Fund's total return for the most recently completed fiscal year reflected actual cash flows, transaction costs and other expenses that were not reflected in the total return of the BC1MB.

During the reporting period, the Fund's investment strategy focused on: (a) the effective duration⁴ of its portfolio (which indicates the portfolio's price sensitivity to interest rates);⁵ (b) the selection of securities with different maturities (expressed by a yield curve showing the relative yield of securities with different maturities); (c) the allocation of the portfolio among securities of similar issuers (referred to as sectors); and (d) the credit quality and ratings of the portfolio securities (which indicates the risk that securities may default). These were the most significant factors affecting the Fund's performance relative to the BC1MB.

1	The Fund offers another class of shares, Institutional Shares. The Fund's total return, based on net asset value, for the 12-month reporting period was 3.67% for the Institutional Shares. A separate Annual Shareholder Report has been prepared for the Fund's Institutional Shares and it is available free of charge by visiting FederatedInvestors.com or calling 1-800-341-7400.
2	The BC1MB is the one-year (1-2) component of the Barclays Capital Municipal Bond Index, an unmanaged market value-weighted index for the tax-exempt bond market. To be included in the index, bonds must have a minimum credit rating of Baa, an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have an issue date after December 31, 1990, and must be a least one but not more than two years from their maturity date. The BC1MB includes both zero coupon bonds and bonds subject to the alternative minimum tax. The BC1MB is not adjusted to reflect sales charges, expenses and other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund's performance. The index is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
3	Lipper figures represent the average of the total returns reported by all the mutual funds designated by Lipper Inc. as falling into the respective categories indicated. They do not reflect sales charges. It is not possible to invest directly in an average.
4	Duration is a measure of a security's price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations.
5	Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices.

Annual Shareholder Report

The Fund's 3.21% total return for the Class A Shares for the reporting period consisted of 2.20% of tax-exempt dividend income and 1.01% of price appreciation as the net asset value of the fund increased by 10 cents to $10.02 during the reporting period.⁶

MARKET OVERVIEW

During the 12-month reporting period, the economy continued to contract, although the pace of contraction slowed. Economic data, at the end of the reporting period suggested that the pace of economic contraction was bottoming. Household spending showed signs of stabilizing but remained constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit. Pressures in the short-term bank funding markets eased, as evidenced by declines in the London Interbank Offered Rate and tentative signs of increased liquidity. Business and household confidence also picked up over the period. The Federal Reserve (the “Fed”) reduced the federal funds target rate (FFTR) from 2.00% to a range between 0.0% and 0.25%, while maintaining its bias to a downside risk to growth. Additionally, the Fed committed itself to employ all available tools to promote economic recovery and signaled that economic conditions warrant maintaining rates at these low levels for an extended period of time. The Fed also increased the size of its balance sheet through the increased purchase of agency mortgage-backed securities, agency debt and Treasury securities (known as quantitative easing) and launched the term Asset-Backed Securities Loan Facility in an attempt to facilitate the extension of credit to households and small businesses.

6	Income may be subject to the federal alternative minimum tax, as well as state and local taxes.

Annual Shareholder Report

Investors' flight to quality, tax-exempt, municipal debt and heightened demand for assets that historically had less risk led to a trend of appreciably lower interest rates and an environment in which tax-exempt municipal credit spreads continued to widen in the first several months of the reporting period. This meant that the yield difference increased between AAA-rated (or unrated comparable) tax-exempt municipal bonds and bonds of lower credit quality and similar maturity. However, financial markets began to ease in the second half of the reporting period. As a result, tax-exempt municipal credit spreads began to tighten in the second half of the reporting period as risk-taking and the demand for riskier assets improved. Long-term interest rates (using the 10-year Treasury rate) peaked at 4.07% in October 2008 and declined to a low of 2.05% in December 2008, while ending the reporting period at 3.31%. Fed activity, liquidity concerns and investor demands for shorter maturity debt resulted in a steepening of the tax-exempt municipal yield curve with long-term interest rates declining less than short-term interest rates (that is, while securities provided higher incremental income or yield as maturities became longer, the amount of the increase in incremental income was steepened). Congress passed the American Recovery and Reinvestment Act during the period which included a $53.6 billion state fiscal stabilization fund targeted at providing fiscal stimulus for education and infrastructure spending and Medicare expenses. The quantity of the federal government's fiscal assistance to state and local governments had not been seen since the 1930s and was intended to provide relief for the economic driven stresses that impacted regional growth throughout the United States.

The two-year Treasury note yield, reflecting this volatility at the end of the reporting period and the cuts in the FFTR, moved from 1.96% in October 2008 to 0.95% at period end. The AAA-rated, two-year tax-exempt municipal bond yield reacted with less daily volatility even though yields moved from 2.48% in October 2008 to 0.82% at period end. As Treasury note yields declined 101 basis points during the reporting period and tax-exempt municipal yields declined over 166 basis points, short-term, tax-exempt, high-grade municipal bonds outperformed Treasury notes as municipal bond prices rose more due to the significant decline in municipal yields.

The tax-exempt municipal yield curve steepened during the 12-month period with short-term interest rates (maturities less than three years) declining 170 basis points while long-term interest rates (maturities beyond 10 years) declined 120 basis points. A steepening of the yield curve means that as security maturities get longer incremental income from securities increases. Despite the steepening, intermediate and longer-term, tax-exempt municipal bonds outperformed short-term bonds over the reporting period as the price impact per unit of duration is greater for intermediate and long-term bonds and interest rates declined.

Annual Shareholder Report

DURATION

Because the Fund is an ultrashort tax-exempt municipal bond fund, the Fund's typical dollar-weighted average duration has generally ranged from 0.5 to 1.0 years. As determined at the end of the 12-month reporting period, the Fund's dollar-weighted average duration was 0.61 years, and the Fund's average dollar-weighted average duration over the reporting period was approximately 0.72 years. The duration of the BC1MB was 1.40 years at the end of the reporting period. The shorter a fund's duration relative to an index, the less its net asset value will react as interest rates change. Because the Fund has a structural duration range that is always shorter than the duration of the BC1MB, when interest rates decline, the Fund's net asset value will benefit less than BC1MB. The structural duration of the Fund relative to BC1MB benchmark detracted from Fund performance over the period, but helped the Fund relative to the LTEMMFA.

MATURITY/YIELD CURVE

With the Fed cutting the FFTR from 2.0% to a range of 0%-0.25% over the 12-month reporting period, the yield curve steepened. Tax-exempt municipal bonds with maturities from two to four years performed the best, followed by bonds with maturities from one to two years. With significant new cash flows into the Fund over the reporting period, the Fund was managed with a concentration on maintaining a barbell structure of 50% to 60% weighting in variable rate demand notes (VRDNs) and municipal auction rate securities (ARS) combined with a 40% to 50% weighting in bonds with maturities from zero to four years.

The BC1MB does not contain any bonds with less than one year remaining to maturity nor does it include any VRDNs or ARS. The Fund's portfolio weighting in liquid VRDNs and ARS of 50 to 60% slightly detracted from Fund performance relative to BC1MB, as these instruments slightly underperformed the positive price performance and total return of bonds contained in the BC1MB. Many of these instruments provided above-average, tax-exempt income but none of the price gain of the fixed-rate bonds in the BC1MB.⁶ The Fund also had significant weightings in bonds maturing from one to two years and two to four years and this decision helped Fund performance.

Annual Shareholder Report

SECTOR ALLOCATION

During the 12-month reporting period, as compared to the BC1MB, the Fund allocated more of its portfolio to securities backed by hospitals, local general obligations, public power, electric and gas and industrial development/pollution control projects. The Fund allocated less of the portfolio to pre-refunded bonds than the BC1MB. These allocations helped the Fund's performance due to the net decline in credit spreads within several of the overweight sectors and the demand by investors for incremental yield in the latter half of the reporting period. Investors also preferred the general obligation pledge of state and local issuers, and the Fund's allocations to these sectors helped performance. As the credit markets recovered, pre-refunded bonds lagged the overall index return, so the Fund's underweight allocation helped performance.

CREDIT QUALITY

With significant new cash inflows into the Fund, the overall credit quality and liquidity of the Fund remained high over the 12-month reporting period. The average credit quality of the Fund remained at AA- to AA during the reporting period.

The risk-taking environment shifted over the reporting period from one of risk aversion by investors to a more constructive investment tone for bonds rated AA, A and BBB (or unrated bonds of comparable quality). In the last six months of the reporting period, spreads began to tighten for bonds rated AA, A and BBB relative to AAA-rated bonds as investors sensed that they had become undervalued. As a result, the Fund's emphasis on mid-quality issues for the fixed coupon portion of the portfolio helped Fund performance over the period. For the variable rate portion of the portfolio, the Fund's income and total return was helped by VRDNs with credit/liquidity enhancement from split-rated banks (A-2, P-2 and/or F-2 rated). Overall, the shift to a more constructive credit view by market participants helped the Fund's performance over the period.

Annual Shareholder Report

GROWTH OF A $10,000 INVESTMENT - Class a Shares

The graph below illustrates the hypothetical investment of $10,000¹ in Federated Municipal Ultrashort Fund (Class A Shares) (the “Fund”) from October 24, 2000 (start of performance) to September 30, 2009, compared to the Barclays Capital 1-Year Municipal Bond Index (BC1MB)² and the Lipper Tax-Exempt Money Market Funds Classification Average (LTEMMFCA).²

Average Annual Total Returns³ for the Period Ended 9/30/2009
1 Year	1.17%
5 Years	2.14%
Start of Performance (10/24/2000)	2.27%

Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured. Total returns shown include the maximum sales charge of 2.00%.

Annual Shareholder Report

1Represents a hypothetical investment of $10,000. Effective February 14, 2003, a maximum sales charge of 2.00% for newly purchased Class A Shares was implemented. The Fund's performance assumes the reinvestment of all dividends and distributions. The BC1MB and the LTEMMFCA have been adjusted to reflect reinvestment of dividends on securities in the index and the average.

The BC1MB is the one-year (1-2) component of the Barclays Capital Municipal Bond Index. The Barclays Capital Municipal Bond Index is an unmanaged index of tax-exempt municipal bonds issued after January 1, 1991, with a minimum credit rating of at least Baa3 or BBB-, which have been issued as part of a deal of at least $75 million, have a minimum maturity value of at least $7 million and mature in at least one, but not more than two years. As of January 1996, the index also includes zero coupon bonds and bonds subject to the alternative minimum tax (AMT). The BC1MB is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund's performance. The BC1MB is unmanaged, and unlike the Fund, is not affected by cash flows. It is not possible to invest directly in the BC1MB. Lipper figures represent the average of the total returns reported by all the mutual funds designated by Lipper Inc. as falling into the respective categories indicated. They do not reflect sales charges. The Fund is not a money market fund and is not subject to the special regulatory requirements (including maturity and credit quality constraints) designed to enable money market funds to maintain a stable share price.

Total returns quoted reflect all applicable sales charges.

Annual Shareholder Report

Portfolio of Investments Summary Table (unaudited)

At September 30, 2009, the Fund's sector composition¹ was as follows:

Sector Composition	Percentage of Total Net Assets
Hospital	19.0%
General Obligation — Local	15.3%
General Obligation — State	14.9%
Education	9.5%
Public Power	7.7%
Special Tax	4.3%
Industrial Development Bond/Pollution Control Revenue	4.2%
Senior Care	4.1%
Transportation	3.7%
Electric and Gas	2.8%
Other²	11.9%
Other Assets and Liabilities — Net³	2.6%
TOTAL	100.0%

1	Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund's Adviser. For securities that have been enhanced by a third-party, including bond insurers and banks, sector classifications are based upon the economic sector and/or revenue source of the underlying obligor as determined by the Fund's Adviser. Pre-refunded securities are those whose debt service is paid from escrowed assets, usually U.S. government securities.
2	For purposes of this table, sector classifications constitute 85.5% of the Fund's total net assets. Remaining sectors have been aggregated under the designation “Other.”
3	Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

Annual Shareholder Report

Portfolio of Investments

September 30, 2009


Principal Amount		Value
	Municipal Bonds – 38.4%
	Alabama – 1.1%
$2,035,000	Alabama Special Care Facilities Financing Authority of Birmingham, Revenue Bonds (Series 2005A), 5.00% (Ascension Health Subordinate Credit Group), 6/1/2012	2,191,329
1,510,000	Alabama Special Care Facilities Financing Authority of Birmingham, Revenue Bonds (Series 2005A), 5.00% (Ascension Health Subordinate Credit Group), 6/1/2012	1,625,998
24,750,000	Health Care Authority for Baptist Health, AL, Affiliate of UAB Health (Montgomery)/(Series B) ARS (Assured Guaranty Corp. INS), 1.500%, 10/2/2009	24,750,000
635,000	Health Care Authority for Baptist Health, AL, Revenue Bonds (Series 2006D), 5.00%, 11/15/2009	636,441
1,300,000	Huntsville, AL, UT GO Bonds (Series 2009A), 5.00%, 9/1/2011	1,403,610
1,500,000	Huntsville, AL, UT GO Bonds (Series 2009B), 3.00%, 9/1/2011	1,562,520
4,000,000	Mobile, AL IDB, PCRBs (Series 2007A), 4.75% TOBs (Alabama Power Co.) Mandatory Tender 3/19/2012	4,243,440
500,000	Montgomery, AL Medical Clinic Board, Health Care Facility Revenue Bonds (Series 2006), 5.00% (Jackson Hospital & Clinic, Inc.), 3/1/2010	502,475
	TOTAL	36,915,813
	Arizona – 0.5%
2,000,000	Arizona Health Facilities Authority, Revenue Bonds (Series 2008D), 5.00% (Banner Health), 1/1/2010	2,018,200
2,000,000	Arizona Health Facilities Authority, Revenue Bonds (Series 2008D), 5.00% (Banner Health), 1/1/2011	2,078,120
1,000,000	Arizona Transportation Board, Transportation Excise Tax Revenue Bonds (Series 2009), 5.00% (Maricopa County, AZ Regional Area Road Fund), 7/1/2011	1,070,580
1,840,000	Arizona Transportation Board, Transportation Excise Tax Revenue Bonds (Series 2009), 5.00% (Maricopa County, AZ Regional Area Road Fund), 7/1/2012	2,026,631
1,000,000	Arizona Water Infrastructure Finance Authority, Water Quality Revenue Bonds (Series 2009A), 4.00%, 10/1/2011	1,064,690
1,000,000	Arizona Water Infrastructure Finance Authority, Water Quality Revenue Bonds (Series 2009A), 4.00%, 10/1/2012	1,088,370
2,135,000	Arizona Water Infrastructure Finance Authority, Water Quality Revenue Refunding Bonds (Series 2009A), 4.00%, 10/1/2012	2,323,670
1,100,000	Arizona Water Infrastructure Finance Authority, Water Quality Revenue Refunding Bonds (Series 2009A), 4.00%, 10/1/2011	1,171,159

Annual Shareholder Report


$2,500,000		Maricopa County, AZ, IDA, Health Facility Revenue Bonds (Series 2009A), 5.00% (Catholic Healthcare West), 7/1/2012	2,635,125
3,000,000	¹	Yavapai County, AZ IDA Solid Waste Disposal, 4.00% TOBs (Waste Management, Inc.), Mandatory Tender 6/1/2010	3,025,980
		TOTAL	18,502,525
		Arkansas – 0.0%
775,000		Jefferson County, AR, PCR Refunding Bonds (Series 2006), 4.60% (Entergy Arkansas, Inc.), 10/1/2017	785,982
		California – 3.9%
1,000,000		California Health Facilities Financing Authority, 5.00% (Adventist Health System/West), 3/1/2011	1,028,470
1,500,000		California Health Facilities Financing Authority, 5.00% (Adventist Health System/West), 3/1/2012	1,560,570
1,060,000		California Health Facilities Financing Authority, Insured Revenue Bonds (Series 2006), 4.25% (California-Nevada Methodist Homes)/(GTD by California Mortgage Insurance), 7/1/2011	1,061,272
7,000,000		California Health Facilities Financing Authority, Refunding Revenue Bonds, 3.45% TOBs (Stanford Hospital & Clinics), Mandatory Tender 6/15/2011	7,215,600
1,000,000		California Health Facilities Financing Authority, Revenue Bonds (Series 2008A), 5.00% (Sutter Health), 8/15/2010	1,027,160
1,145,000		California Health Facilities Financing Authority, Revenue Bonds (Series 2008A), 5.00% (Sutter Health), 8/15/2011	1,198,586
2,650,000		California Health Facilities Financing Authority, Revenue Bonds (Series 2009B), 4.00% (St. Joseph Health System), 7/1/2012	2,757,192
3,865,000		California Health Facilities Financing Authority, Revenue Bonds (Series 2009B), 4.50% (St. Joseph Health System), 7/1/2013	4,108,727
3,800,000		California Health Facilities Financing Authority, Revenue Bonds (Series 2009B), 5.00% (St. Joseph Health System), 7/1/2014	4,141,164
6,000,000		California Health Facilities Financing Authority, Variable Rate Health Facility Revenue Bonds (Series 2009C), 5.00% TOBs (Catholic Healthcare West), Mandatory Tender 7/2/2012	6,372,060
10,000,000		California Health Facilities Financing Authority, Variable Rate Refunding Revenue Bonds (Series 2009C), 5.00% TOBs (St. Joseph Health System), Mandatory Tender 10/16/2014	10,762,200
6,500,000		California Infrastructure & Economic Development Bank, Refunding Revenue Bonds (Series 2007 A-4), 1.65% TOBs (J. Paul Getty Trust), Mandatory Tender 4/1/2011	6,533,735
5,000,000		California Infrastructure & Economic Development Bank, Revenue Bonds (Series 2008A), 5.00% (California Independent System Operator Corp.), 2/1/2010	5,059,850
3,000,000	¹	California Municipal Finance Authority, Solid Waste Disposal Revenue Bonds (Series 2009A), 4.90% TOBs (Waste Management, Inc.), Mandatory Tender 2/1/2010	3,014,370

Annual Shareholder Report


$11,000,000	California PCFA, Environmental Improvement Refunding Revenue Bonds (Series 2009), 2.60% TOBs (BP West Coast Products LLC)/(GTD by BP PLC), Mandatory Tender 9/2/2014	11,103,510
1,000,000	California PCFA, Solid Waste Disposal Refunding Revenue Bonds (Series 1998B), 4.00% TOBs (Waste Management, Inc.), Mandatory Tender 6/1/2010	989,050
40,000,000	California State, (Series 2009 A-1), 3.00% RANs, 5/25/2010	40,491,200
1,000,000	California State, Economic Recovery Bonds (Series 2008A), 5.00% (California State Fiscal Recovery Fund), 1/1/2011	1,046,190
4,375,000	California State, Economic Recovery UT GO Bonds (Series 2004A), 5.25% (California State Fiscal Recovery Fund)/(National Public Finance Guarantee Corporation INS), 1/1/2011	4,590,644
8,000,000	Corona-Norco, CA USD, UT GO BANs, 3.50% BANs, 2/1/2010	8,048,640
1,000,000	Golden State Tobacco Securitization Corp., CA, Tobacco Settlement Asset-Backed Bonds (Series 2007A-1), 5.00%, 6/1/2011	1,035,270
4,200,000	San Bernardino County, CA Transportation Authority, Sales Tax Revenue Notes (Series 2009A), 4.00%, 5/1/2012	4,438,644
2,000,000	San Diego, CA Public Facilities Authority, Senior Sewer Revenue Refunding Bonds (Series 2009B), 5.00%, 5/15/2012	2,181,280
2,755,000	San Joaquin County, CA Transportation Authority, Measure K Senior Sales Tax Revenue Notes, Series 2008, 5.00%, 4/1/2011	2,891,235
	TOTAL	132,656,619
	Colorado – 0.4%
140,000	Beacon Point, CO Metropolitan District, Revenue Bonds (Series 2005B), 4.375% (Compass Bank, Birmingham LOC)/ (Original Issue Yield: 4.50%), 12/1/2015	136,944
500,000	Colorado Health Facilities Authority, Revenue Bonds (Series 2005), 4.50% (Covenant Retirement Communities, Inc.), 12/1/2009	500,690
2,500,000	Colorado Health Facilities Authority, Revenue Bonds (Series 2008C-2), 3.75% TOBs (Catholic Health Initiatives), Mandatory Tender 11/10/2009	2,505,700
1,000,000	Colorado Health Facilities Authority, Revenue Bonds (Series 2008C-6), 3.95% TOBs (Catholic Health Initiatives), Mandatory Tender 11/10/2010	1,022,830
6,840,000	Colorado State Higher Education Capital Construction Lease Purchase Financing Program, COP (Series 2008), 5.00%, 11/1/2009	6,865,581
3,105,000	Colorado State Higher Education Capital Construction Lease Purchase Financing Program, COP (Series 2008), 5.00%, 11/1/2010	3,232,212
	TOTAL	14,263,957
	Connecticut – 0.2%
5,000,000	Connecticut Development Authority, PCR Revenue Bonds, 5.25% TOBs (Connecticut Light & Power Co.), Mandatory Tender 4/1/2010	5,105,300

Annual Shareholder Report


$1,000,000		Connecticut State Development Authority, PCR Refunding Bonds (Series 1996), 5.75% TOBs (United Illuminating Co.), Mandatory Tender 2/1/2012	1,055,430
		TOTAL	6,160,730
		Delaware – 0.1%
3,000,000		University of Delaware, Variable Rate Revenue Bonds (Series 2009A), 2.00% TOBs, Mandatory Tender 6/1/2011	3,026,790
		District of Columbia – 0.2%
2,550,000		District of Columbia Revenue Bonds, University Refunding Revenue Bonds (Series 2009A), 5.00% (Georgetown University), 4/1/2012	2,725,848
3,000,000		District of Columbia Revenue Bonds, University Refunding Revenue Bonds (Series 2009A), 5.00% (Georgetown University), 4/1/2013	3,256,650
500,000		Washington Metropolitan Area Transit Authority, Gross Revenue Transit Bonds (Series 2009A), 5.00%, 7/1/2010	515,610
1,000,000		Washington Metropolitan Area Transit Authority, Gross Revenue Transit Bonds (Series 2009A), 5.00%, 7/1/2011	1,066,690
		TOTAL	7,564,798
		Florida – 2.4%
5,800,000		Broward County, FL, UT GO Bonds, 5.00%, 1/1/2011	6,104,500
54,610	³	Capital Trust Agency, FL, Housing Revenue Notes, 5.95% (Atlantic Housing Foundation Properties), 1/15/2039	27,308
25,000,000		Citizens Property Insurance Corp. FL, Senior Secured Bonds (Series 2009A-2), 4.50%, 6/1/2010	25,335,000
300,000		East Homestead, FL Community Development District, Special Assessment Revenue Bonds (Series 2006B), 5.00%, 5/1/2011	223,062
8,000,000		Escambia County, FL, (First Series), 1.75% TOBs (Gulf Power Co.), Mandatory Tender 4/21/2010	8,010,960
3,215,000		Florida State Board of Education, UT GO Capital Outlay Bonds (Series 2006E), 5.00%, 6/1/2010	3,314,279
3,375,000		Florida State Board of Education, UT GO Capital Outlay Bonds (Series 2006E), 5.00%, 6/1/2011	3,611,317
2,410,000		Florida State Department of Environmental Protection, Refunding Revenue Bonds (Series 2008A), 5.00% (Assured Guaranty Corp. INS), 7/1/2011	2,561,589
6,105,000		Florida State Turnpike Authority, Refunding Turnpike Revenue Bonds (Series 2008A), 5.00%, 7/1/2011	6,523,742
2,275,000		JEA, FL Electric System, Electric System Subordinated Revenue Bonds (Series 2009B), 5.00%, 10/1/2011	2,425,560
5,000,000		JEA, FL Electric System, Subordinated Revenue Bonds (Series 2009D), 5.00%, 10/1/2011	5,346,350
7,000,000		JEA, FL Electric System, Subordinated Revenue Bonds (Series 2009D), 5.00%, 10/1/2012	7,644,420

Annual Shareholder Report


$2,000,000	Miami-Dade County, FL IDA, Solid Waste Disposal Revenue Bonds (Series 2006), 2.75% TOBs (Waste Management, Inc.), Mandatory Tender 4/1/2010	1,999,940
1,650,000	Pasco County, FL School Board, (Series B) ARS (AMBAC INS), 0.700%, 10/2/2009	1,650,000
5,675,000	St. Petersburg, FL HFA, (Series B) ARS (All Children's Hospital)/ (AMBAC INS), 1.490%, 10/2/2009	5,675,000
	TOTAL	80,453,027
	Georgia – 2.2%
2,250,000	Atlanta, GA Water & Wastewater, Revenue Bonds (Series 2009A), 4.00%, 11/1/2011	2,339,505
3,000,000	Atlanta, GA Water & Wastewater, Revenue Bonds (Series 2009A), 4.00%, 11/1/2012	3,142,650
3,000,000	Burke County, GA Development Authority, PCRBs (Fifth Series 1994), 4.375% TOBs (Georgia Power Co.), Mandatory Tender 4/1/2010	3,043,050
4,100,000	Burke County, GA Development Authority, PCRBs (First Series 2008), 4.95% TOBs (Georgia Power Co.), Mandatory Tender 4/1/2011	4,275,398
2,100,000	Burke County, GA Development Authority, PCRBs (Series 2007E), 4.75% TOBs (Oglethorpe Power Corp.)/(National Public Finance Guarantee Corporation INS), Mandatory Tender 4/1/2011	2,183,643
4,595,000	Decatur County-Bainbridge, GA IDA, Revenue Bonds, 4.55% TOBs (John B. Sanifilippo & Son)/(Bank of America N.A. LOC), Mandatory Tender 6/1/2011	4,749,070
2,850,000	Floyd County, GA School District, GO Sales Tax Bonds (Series 2009), 3.00% (GTD by Georgia State), 8/1/2011	2,954,282
6,255,000	Forsyth County, GA, UT GO Bonds (Series 2008B), 5.00%, 3/1/2010	6,378,599
2,500,000	Fulton County, GA Facilities Corp., COP (Series 2009), 3.00%, 11/1/2011	2,572,450
1,000,000	Georgia State Road and Tollway Authority, Federal Highway Grant Anticipation Revenue Bonds (Series 2009-A), 4.00%, 6/1/2011	1,051,240
4,000,000	Georgia State Road and Tollway Authority, Federal Highway Grant Anticipation Revenue Bonds (Series 2009-A), 5.00%, 6/1/2012	4,397,200
8,120,000	Georgia State, UT GO Bonds (Series 2003D), 5.25%, 12/1/2011	8,912,187
8,000,000	Georgia State, UT GO Bonds (Series 2006G), 5.00%, 10/1/2011	8,684,640
5,850,000	Gwinnett County, GA Water and Sewer Authority, Revenue Bonds, 5.00% (United States Treasury PRF 8/1/2012@100)/ (Original Issue Yield: 5.10%), 8/1/2020	6,504,381
700,000	Medical Center Hospital Authority, GA, Revenue Refunding Bonds (Series 2007), 5.00% (Spring Harbor at Green Island), 7/1/2012	712,005
5,000,000	Monroe County, GA Development Authority, PCRBs (Series 1992A), 6.80% (Oglethorpe Power Corp.), 1/1/2011	5,283,600
2,000,000	Monroe County, GA Development Authority, PCRBs (First Series 1995), 4.50% TOBs (Georgia Power Co.), Mandatory Tender 4/1/2011	2,072,300

Annual Shareholder Report


$735,000	Municipal Electric Authority of Georgia, General Resolution Subordinated Bonds (Series 2008A), 4.00%, 1/1/2010	740,821
1,000,000	Private Colleges & Universities Facilities of GA, Revenue Bonds (Series 2008B), 5.00% (Emory University), 9/1/2011	1,080,500
1,500,000	Public Gas Partners, Inc., GA, Gas Project Revenue Bonds (Gas Supply Pool No. 1 Series 2009A), 5.00%, 10/1/2011	1,595,925
2,300,000	Public Gas Partners, Inc., GA, Gas Project Revenue Bonds (Gas Supply Pool No. 1 Series 2009A), 5.00%, 10/1/2012	2,493,476
1,400,000	Public Gas Partners, Inc., GA, Gas Project Revenue Bonds (Gas Supply Pool No. 1 Series 2009A), 5.00%, 10/1/2013	1,536,836
	TOTAL	76,703,758
	Illinois – 0.4%
2,000,000	Chicago, IL Water Revenue, Second Lien Water Refunding Revenue Bonds (Series 2008), 5.00% (FSA INS), 11/1/2011	2,156,400
8,825,000	Chicago, IL, Refunding UT GO Bonds (2005A), 5.00% (FSA INS), 1/1/2013	9,810,753
3,000,000	Illinois Development Finance Authority, Adjustable-Rate Gas Supply Refunding Revenue Bonds (Series 2003B), 3.75% TOBs (Peoples Gas Light & Coke Co.) Mandatory Tender 2/1/2012	3,008,670
	TOTAL	14,975,823
	Indiana – 0.3%
2,750,000	Indiana Health Facility Financing Authority, Revenue Bonds (Series 2005A-4), 5.00% (Ascension Health Subordinate Credit Group), 6/1/2012	2,943,463
2,000,000	Indiana State Finance Authority, Hospital Revenue Bonds (Series 2009A), 5.00% (Parkview Health System Obligated Group), 5/1/2010	2,035,340
1,000,000	Indiana State Finance Authority, Hospital Revenue Bonds (Series 2009A), 5.00% (Parkview Health System Obligated Group), 5/1/2011	1,042,430
2,000,000	Indiana State Finance Authority, Hospital Revenue Bonds (Series 2009A), 5.00% (Parkview Health System Obligated Group), 5/1/2012	2,115,660
1,000,000	Jasper County, IN, PCR Refunding Bonds (Series 1994A), 4.15% (Northern Indiana Public Service Company)/(National Public Finance Guarantee Corporation INS), 8/1/2010	1,013,770
1,500,000	St. Joseph County, IN, Variable Rate Educational Facilities Revenue Bonds (Series 2005), 3.875% TOBs (University of Notre Dame), Mandatory Tender 3/1/2012	1,566,225
	TOTAL	10,716,888
	Iowa – 0.5%
1,455,000	Iowa Finance Authority, Senior Living Facility Revenue Refunding Bonds (Series 2007A), 5.00% (Deerfield Retirement Community, Inc.), 11/15/2012	1,371,745

Annual Shareholder Report


$1,500,000	Iowa Finance Authority, Variable Rate Demand Health Facilities Revenue Bonds (Series 2005A), 5.00% (Iowa Health System)/(Assured Guaranty Corp. INS), 2/15/2012	1,594,590
5,000,000	Iowa Finance Authority, Variable Rate Demand Health Facilities Revenue Bonds (Series 2009F), 5.00% TOBs (Iowa Health System), Mandatory Tender 8/15/2012	5,382,900
7,050,000	Tobacco Settlement Authority, IA, Tobacco Settlement Asset-Backed Revenue Bonds (Series 2001B), 5.60% (United States Treasury PRF 6/1/2011@101)/(Original Issue Yield: 5.75%), 6/1/2035	7,616,679
	TOTAL	15,965,914
	Kansas – 0.2%
2,500,000	Junction City, KS, UT GO Notes (Series 2009B), 4.00%, 6/1/2010	2,553,175
450,000	Kansas State Development Finance Authority, Hospital Revenue Bonds (Series 2009D), 3.00% (Adventist Health System/Sunbelt Obligated Group), 11/15/2011	457,335
180,000	Kansas State Development Finance Authority, Hospital Revenue Bonds (Series 2009D), 3.50% (Adventist Health System/Sunbelt Obligated Group), 11/15/2012	185,913
200,000	Kansas State Development Finance Authority, Hospital Revenue Bonds (Series 2009D), 5.00% (Adventist Health System/Sunbelt Obligated Group), 11/15/2013	218,188
520,000	Wichita, KS, Hospital Facilities Refunding & Improvement Revenue Bonds (Series IIIA-2009), 2.00% (Via Christi Health System, Inc.), 11/15/2010	522,319
500,000	Wichita, KS, Hospital Facilities Refunding & Improvement Revenue Bonds (Series IIIA-2009), 3.00% (Via Christi Health System, Inc.), 11/15/2011	511,195
1,000,000	Wichita, KS, Hospital Facilities Refunding & Improvement Revenue Bonds (Series IIIA-2009), 4.50% (Via Christi Health System, Inc.), 11/15/2012	1,064,170
2,000,000	Wichita, KS, Hospital Facilities Refunding & Improvement Revenue Bonds (Series IIIA-2009), 5.00% (Via Christi Health System, Inc.), 11/15/2013	2,179,920
	TOTAL	7,692,215
	Kentucky – 0.8%
500,000	Kentucky EDFA, Hospital Revenue Bonds (Series 2009A), 5.00% (Baptist Healthcare System), 8/15/2010	516,885
1,000,000	Kentucky EDFA, Hospital Revenue Bonds (Series 2009A), 5.00% (Baptist Healthcare System), 8/15/2011	1,059,330
4,465,000	Louisville & Jefferson County, KY Metropolitan Sewer District, 5.00%, 5/15/2011	4,740,669
4,685,000	Louisville & Jefferson County, KY Metropolitan Sewer District, 5.00%, 5/15/2012	5,102,012

Annual Shareholder Report


$15,000,000	Owensboro, KY, GO BANs (Series 2009), 3.25%, 7/1/2012	15,243,150
	TOTAL	26,662,046
	Maryland – 0.8%
1,000,000	Maryland State Health & Higher Educational Facilities Authority, Revenue Bonds (Series 2008B), 5.00% TOBs (Johns Hopkins Hospital), Mandatory Tender 11/15/2011	1,061,720
16,290,000	Maryland State, State & Local Facilities UT GO Bonds (Second Series 2009B), 5.25%, 8/15/2012	18,278,194
5,000,000	Maryland State, UT GO Bonds (Second Series 2008), 5.00%, 7/15/2011	5,387,850
2,955,000	Maryland State, UT GO Bonds (Series 2006A), 5.00%, 3/1/2013	3,333,979
	TOTAL	28,061,743
	Massachusetts – 3.0%
5,100,000	Brockton, MA Area Transit Authority, 2.00% RANs (GTD by Commonwealth of Massachusetts), 8/6/2010	5,126,826
4,000,000	Commonwealth of Massachusetts, LT GO Construction Loan Bonds (Series C), 5.50% (FSA INS), 11/1/2011	4,387,520
4,175,000	Greater Attleboro-Taunton, MA Regional Transportation Authority, 2.50% RANs (GTD by Commonwealth of Massachusetts), 8/20/2010	4,212,199
10,905,000	Massachusetts HEFA, (Series 2005F) ARS (Partners Healthcare Systems)/(FSA INS), 1.000%, 10/2/2009	10,905,000
18,880,000	Massachusetts HEFA, (Series 2007G-2) ARS (Partners Healthcare Systems)/(FSA INS), 0.900%, 10/1/2009	18,880,000
1,000,000	Massachusetts HEFA, Revenue Bonds (Series 2008 T-2), 4.10% TOBs (Northeastern University), Mandatory Tender 4/19/2012	1,019,470
675,000	Massachusetts HEFA, Revenue Bonds (Series 2008R), 5.00% (Northeastern University), 10/1/2009	675,074
1,465,000	Massachusetts HEFA, Revenue Bonds (Series 2008R), 5.00% (Northeastern University), 10/1/2011	1,559,888
1,000,000	Massachusetts HEFA, Revenue Bonds (Series 2008R), 5.00% (Northeastern University), 10/1/2012	1,085,640
3,250,000	Massachusetts HEFA, Revenue Bonds (Series 2008T-1), 4.125% TOBs (Northeastern University), Mandatory Tender 2/16/2012	3,345,648
6,945,000	Massachusetts State HFA, (Series 2009-B), 2.50%, 2/1/2011	7,057,023
8,000,000	Massachusetts State HFA, Construction Loan Notes (Series 2009D), 4.00%, 9/1/2011	8,324,320
9,000,000	Massachusetts State HFA, Construction Loan Notes (Series 2009D), 5.00%, 9/1/2012	9,718,200
14,940,000	Montachusett, MA Regional Transit Authority, 2.25% RANs (GTD by Commonwealth of Massachusetts), 8/12/2010	15,051,602
4,000,000	Pioneer Valley, MA Transit Authority, 3.50% RANs, 2/26/2010	4,018,360

Annual Shareholder Report


$8,700,000	Southeastern Massachusetts Regional Transportation Authority, 2.50% RANs (GTD by Commonwealth of Massachusetts), 9/3/2010	8,766,381
	TOTAL	104,133,151
	Michigan – 0.3%
1,365,000	Kent Hospital Finance Authority, MI, Revenue Bonds (Series 2005A), 5.00% (Metropolitan Hospital), 7/1/2010	1,363,198
750,000	Michigan State Hospital Finance Authority, Revenue & Refunding Bonds (Series 2008A), 5.00% (McLaren Health Care Corp.), 5/15/2010	761,648
9,500,000	Michigan State Hospital Finance Authority, Revenue Bonds (Series 2001A-2), 3.75% TOBs (Ascension Health Credit Group), Mandatory Tender 3/15/2012	9,865,940
	TOTAL	11,990,786
	Minnesota – 0.9%
12,000,000	Bemidji, MN, Temporary Sales Tax UT GO Bonds, 4.50%, 2/1/2012	12,507,600
2,040,000	Chaska, MN ISD No.112, UT GO Bonds, 3.00% (GTD by Minnesota State), 2/1/2011	2,104,219
2,485,000	Chaska, MN ISD No.112, UT GO Bonds, 3.00% (GTD by Minnesota State), 2/1/2012	2,601,099
2,965,000	Chaska, MN ISD No.112, UT GO Bonds, 3.50% (GTD by Minnesota State), 2/1/2013	3,182,898
3,020,000	Chaska, MN ISD No.112, UT GO Bonds, 3.50% (GTD by Minnesota State), 2/1/2014	3,260,724
2,900,000	Minnesota State, UT GO Highway Bonds, 3.00%, 12/1/2011	3,040,766
2,500,000	Stillwater, MN ISD No. 834, UT GO Bonds, 4.00% (GTD by Minnesota State), 2/1/2011	2,611,900
	TOTAL	29,309,206
	Mississippi – 0.5%
3,240,000	Mississippi Development Bank, Marshall County Correctional Facility Refunding Bonds (Series 2008C), 5.00% (Mississippi State Department of Corrections), 8/1/2012	3,477,362
1,200,000	Mississippi Development Bank, Wilkinson County Correctional Facility Refunding Bonds (Series 2008D), 5.00% (Mississippi State Department of Corrections), 8/1/2012	1,287,912
10,000,000	Mississippi State, Refunding UT GO Bonds, 5.50%, 9/1/2012	11,250,200
	TOTAL	16,015,474
	Missouri – 0.1%
1,665,000	Missouri State Environmental Improvement & Energy Resources Authority, PCR Refunding Bonds (Series 2008), 4.375% TOBs (Associated Electric Cooperative, Inc.), Mandatory Tender 3/1/2011	1,718,913
	Nebraska – 0.1%
1,170,000	Nebraska Public Power District, General Revenue Bonds (Series 2008B), 5.00%, 1/1/2012	1,259,809

Annual Shareholder Report


$1,750,000	Omaha, NE, UT GO Bonds, 4.00%, 10/15/2011	1,865,937
1,250,000	Omaha, NE, UT GO Bonds, 5.00%, 10/15/2010	1,308,288
	TOTAL	4,434,034
	Nevada – 0.4%
2,000,000	Clark County, NV Airport System, Revenue Bonds (Senior Series 2008E), 5.00%, 7/1/2010	2,061,820
4,000,000	Clark County, NV School District, LT GO Building Bonds (Series 2008A), 5.00%, 6/15/2010	4,118,960
2,350,000	Clark County, NV, IDRBs (Series 2003C), 5.45% TOBs (Southwest Gas Corp.), Mandatory Tender 3/1/2013	2,426,704
1,680,000	Clark County, NV, LT GO Bond Bank Bonds (Series 2000), 6.00%, 7/1/2010	1,744,495
730,000	Clark County, NV, Special Assessment Revenue Bonds (Series 2005), 4.20% (Summerlin-Mesa SID No. 151), 8/1/2011	696,325
1,475,000	Henderson, NV, LID No. T-16 LT Obligation Improvement Bonds, 4.50% (Falls at Lake Las Vegas LID No. T-16), 3/1/2011	1,387,784
755,000	Henderson, NV, LID No. T-17 LT Obligation Improvement Bonds, 4.15% (Madeira Canyon LID No. T-17), 9/1/2010	746,725
	TOTAL	13,182,813
	New Hampshire – 0.6%
6,900,000	Cheshire County, NH, (Series A), 4.50% TANs, 12/31/2009	6,930,498
9,500,000	Strafford County, NH, (Series 2009A), 4.50% TANs, 12/31/2009	9,541,990
3,625,000	Strafford County, NH, (Series 2009B), 4.00% TANs, 12/31/2009	3,636,818
	TOTAL	20,109,306
	New Jersey – 3.4%
13,908,053	Aberdeen Township, NJ, UT GO Notes, 2.25% BANs, 7/23/2010	14,020,291
3,015,000	Alloway Township, NJ, (Series 2009A), 3.25% BANs, 5/5/2010	3,018,497
2,250,000	Atlantic County Utilities Authority, NJ, Sewer Revenue Refunding Bonds (Series 2009), 4.00% (Assured Guaranty Corp. INS), 1/15/2011	2,322,315
1,500,000	Atlantic County Utilities Authority, NJ, Sewer Revenue Refunding Bonds (Series 2009), 5.00% (Assured Guaranty Corp. INS), 1/15/2012	1,606,305
2,209,339	Barrington, NJ, UT GO BANs, 2.50% BANs, 6/8/2010	2,222,926
11,392,206	Beachwood, NJ, 3.00% BANs, 4/28/2010	11,461,129
5,116,250	Burlington, NJ, 2.50% BANs, 6/25/2010	5,151,655
3,983,980	Clifton, NJ Board of Education, 3.50% GANs, 7/6/2010	4,006,529
1,285,500	Franklin Township, Warren County, NJ, 6.75% BANs, 10/23/2009	1,287,184
8,125,000	High Bridge Borough, NJ, 5.25% BANs, 1/13/2010	8,170,825
4,000,000	Middlesex, NJ, 2.25% BANs, 4/1/2010	4,018,280
22,000,000	New Brunswick, NJ Parking Authority, Subordinate Project Notes (GTD by City of New Brunswick, NJ), 3.00% BANs, 12/15/2010	22,220,220

Annual Shareholder Report


$605,000		New Jersey EDA, School Facilities Construction Refunding Revenue Bonds (Series 2008W), 5.00% (New Jersey State), 3/1/2010	615,563
1,000,000		New Jersey EDA, School Facilities Construction Refunding Revenue Bonds (Series 2008W), 5.00% (New Jersey State), 3/1/2011	1,052,910
1,395,000		New Jersey EDA, School Facilities Construction Refunding Revenue Bonds (Series 2008W), 5.00% (New Jersey State)/(Escrowed In Treasuries COL), 3/1/2010	1,420,780
7,380,000		Newark, NJ, School Promissory Notes (Series 2009G), 3.25% BANs, 4/14/2010	7,440,147
2,950,000		Passaic, NJ Parking Authority, 4.00% RANs (GTD by Passaic, NJ), 11/22/2009	2,953,481
7,900,000		Passaic, NJ, General Improvement and Sewer Utility Bonds, 3.50% BANs, 8/6/2010	7,964,306
5,950,000		Rahway, NJ Redevelopment Agency, Tax-Exempt City-Secured Arts District Extension Project Notes (Series 2009), 2.75% GANs (Rahway, NJ), 9/15/2010	6,003,491
2,224,925		Rockaway Borough, NJ, 4.25% BANs, 12/22/2009	2,235,226
2,821,850		Seaside Heights Borough, NJ, (Series 2009A), 3.75% BANs, 2/5/2010	2,829,441
5,000,000		Ventnor, NJ, (Series 2009A), 2.25% BANs, 7/21/2010	5,035,500
		TOTAL	117,057,001
		New Mexico – 0.1%
2,000,000		Farmington, NM, Refunding Revenue Bonds (Series 2002A), 4.00% TOBs (El Paso Electric Co.)/(FGIC INS), Mandatory Tender 8/1/2012	2,001,160
1,370,000		Massachusetts HEFA, Revenue Bonds (Series 2008R), 5.00% (Northeastern University), 10/1/2010	1,418,005
130,000		Sandoval County, NM, Incentive Payment Refunding Revenue Bonds (Series 2005), 3.50% (Intel Corp.), 6/1/2010	132,121
		TOTAL	3,551,286
		New York – 3.3%
4,395,000	⁴	Evans, NY, 2.50% BANs, 10/7/2010	4,422,952
3,635,000		McGraw, NY CSD, 2.75% BANs, 7/9/2010	3,666,770
3,000,000		Monroe County, NY, Public Improvement Bonds (Series 2009A), 3.75% (Assured Guaranty Corp. INS), 6/1/2011	3,111,300
8,325,000		Monroe County, NY, UT GO Notes, 3.50% BANs, 7/14/2010	8,389,269
4,000,000		Nassau County, NY, Refunding UT GO Bonds (Series 2009E), 4.00%, 6/1/2011	4,189,880
1,500,000		Nassau County, NY, Refunding UT GO Bonds (Series 2009E), 4.00%, 6/1/2012	1,597,950
9,500,000		New York City, NY, (Series C-4) ARS (Assured Guaranty Corp. INS), 0.850%, 10/2/2009	9,500,000
5,000,000		New York City, NY, UT GO Bonds (Series 2009H-1), 5.00%, 3/1/2013	5,550,750

Annual Shareholder Report


$370,000	New York State Dormitory Authority, Revenue Bonds (Series 2005C), 5.00% (Mt. Sinai NYU Health Obligated Group), 7/1/2011	370,711
6,355,000	New York State Dormitory Authority, Revenue Bonds (Series 2009C), 4.00% (School District Financing Program), 10/1/2011	6,727,149
10,000,000	New York State Dormitory Authority, Third General Resolution Revenue Bonds (Series 2002B), 5.25% TOBs (State University of New York), Mandatory Tender 5/15/2012	10,789,800
17,000,000	New York State Thruway Authority, General Revenue BANs (Series 2009A), 4.00%, 7/15/2011	17,896,920
10,000,000	Pembroke, NY CSD, 1.75% BANs, 6/21/2010	10,021,500
7,501,000	Sleepy Hollow, NY, (Series 2009C), 2.50% BANs, 8/13/2010	7,585,536
16,000,000	Syracuse, NY, City School District Purposes (Series 2009A), 2.00% RANs, 6/30/2010	16,105,760
2,000,000	Triborough Bridge & Tunnel Authority, NY, General Revenue Bonds (Series 2008C), 4.00%, 11/15/2011	2,131,420
2,000,000	Triborough Bridge & Tunnel Authority, NY, General Revenue Bonds (Series 2008C), 5.00%, 11/15/2010	2,098,220
	TOTAL	114,155,887
	North Carolina – 0.7%
2,500,000	Charlotte, NC, UT GO Bonds, 5.00%, 8/1/2011	2,697,825
1,000,000	Mecklenburg County, NC, Refunding UT GO Bonds (Series 2009A), 4.00%, 8/1/2011	1,060,910
500,000	New Hanover County, NC, GO Refunding Bonds (Series 2009A), 3.00%, 12/1/2011	524,015
2,000,000	New Hanover County, NC, GO Refunding Bonds (Series 2009A), 5.00%, 12/1/2012	2,247,000
1,000,000	North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds (Series 2009A), 5.00%, 1/1/2012	1,063,910
1,200,000	North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds (Series 2009A), 5.00%, 1/1/2013	1,296,636
2,000,000	North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, 5.00% (Assured Guaranty Corp. INS), 1/1/2013	2,193,940
1,500,000	North Carolina Municipal Power Agency No. 1, Revenue Bonds (Series 2008C), 5.00%, 1/1/2011	1,568,910
3,265,000	North Carolina State University at Raleigh, General Revenue Bonds (Series 2008B), 5.00%, 10/1/2010	3,410,782
2,000,000	North Carolina State, Public Improvement UT GO Bonds (Series 2005A), 5.50%, 3/1/2011	2,138,600
2,000,000	North Carolina State, Refunding UT GO Bonds (Series 2003E), 5.00%, 2/1/2012	2,191,060
2,000,000	North Carolina State, UT GO Refunding Bonds (Series E), 5.00%, 2/1/2013	2,250,440
	TOTAL	22,644,028

Annual Shareholder Report


	Ohio – 1.8%
$1,000,000	Buckeye Tobacco Settlement Financing Authority, OH, Tobacco Settlement Asset-Backed Bonds (Series 2007A-1), 5.00%, 6/1/2012	1,042,530
7,500,000	Dover, OH, 3.25% BANs, 6/3/2010	7,537,800
3,000,000	Ironton, OH City School District, 3.375% BANs, 5/26/2010	3,017,070
2,145,000	Lucas County, OH, Adjustable Rate Demand Health Care Facilities Revenue Bonds (Series 2002), 3.75% TOBs (Franciscan Care Center), Optional Tender 3/1/2011	2,148,518
6,000,000	Ohio Air Quality Development Authority, PCR Refunding Bonds (Series 2009-B), 5.25% TOBs (FirstEnergy Generation Corp.), Mandatory Tender 3/1/2011	6,166,920
8,000,000	Ohio State Air Quality Development Authority, Air Quality Revenue Refunding Bonds (Series 2009A), 3.875% TOBs (Columbus Southern Power Company), Mandatory Tender 6/1/2014	8,167,040
10,000,000	Ohio State Air Quality Development Authority, PCR Refunding Bonds (Series 2009-D), 4.75% TOBs (FirstEnergy Generation Corp.), Mandatory Tender 8/1/2012	10,205,200
7,280,000	Ohio State Air Quality Development Authority, PCRBs (Series 2008B), 3.375% TOBs (FirstEnergy Nuclear Generation Corp.), Mandatory Tender 10/1/2009	7,293,541
3,000,000	Ohio State Higher Educational Facility Commission, Higher Educational Facility Revenue Bonds (Series 2009), 5.00% (Oberlin College), 10/1/2014	3,441,840
1,200,000	Ohio State, Hospital Revenue Bonds (Series 2008A), 4.00% (Cleveland Clinic), 1/1/2012	1,254,744
1,750,000	Ohio State, Hospital Revenue Bonds (Series 2008A), 4.00% (Cleveland Clinic), 1/1/2013	1,850,013
7,975,000	Tiffin, OH, 3.25% BANs, 6/2/2010	8,015,034
	TOTAL	60,140,250
	Oregon – 0.1%
2,040,000	Eugene, OR Electric Utility System, Revenue & Refunding Bonds (Series 2008), 4.00%, 8/1/2010	2,099,772
	Pennsylvania – 1.3%
1,500,000	Allegheny County, PA HDA, Hospital Revenue Bonds (Series 2008B), 5.00% (UPMC Health System), 6/15/2011	1,573,590
5,000,000	Allegheny County, PA HDA, Revenue Bonds (Series 2008A), 5.00% (UPMC Health System), 9/1/2011	5,264,150
1,120,000	Allegheny County, PA HDA, Revenue Bonds (Series 2008B), 5.00% (UPMC Health System), 6/15/2010	1,146,387
2,180,000	Allegheny County, PA, GO Bonds (Series C-63), 3.00%, 11/1/2011	2,241,716
6,970,000	Allegheny County, PA, GO Bonds (Series C-63), 5.00%, 11/1/2012	7,573,045
3,100,000	Pennsylvania EDFA, Exempt Facilities Revenue Refunding Bonds (Series 2009A), 5.00% TOBs (Exelon Generation Co. LLC), Mandatory Tender 6/1/2012	3,263,742

Annual Shareholder Report


$6,000,000	Pennsylvania EDFA, PCR Refunding Bonds (Series 2008), 4.85% TOBs (PPL Electric Utilities Corp.), Mandatory Tender 10/1/2010	6,108,840
3,500,000	Pennsylvania EDFA, Solid Waste Disposal Revenue Bonds (Series 2006), 3.60% TOBs (Waste Management, Inc.), Mandatory Tender 3/1/2010	3,508,575
1,000,000	Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 2008B), 5.00% (University of Pennsylvania Health System), 8/15/2013	1,094,660
2,555,000	Sayre, PA, Health Care Facilities Authority, Revenue Bonds, 0.883% (Guthrie Healthcare System, PA), 12/1/2017	2,171,111
7,125,000	South Fork Municipal Authority, PA, (Series A) ARS (Conemaugh Valley Memorial Hospital)/(Assured Guaranty Corp. INS), 1.280%, 10/1/2009	7,125,000
2,100,000	University of Pittsburgh, University Refunding Bonds (Series 2009A), 5.00%, 9/15/2011	2,271,969
750,000	Westmoreland County, PA IDA, Retirement Community Revenue Bonds (Series 2005A), 5.00% (Redstone Presbyterian Seniorcare Obligated Group), 1/1/2010	750,945
	TOTAL	44,093,730
	South Carolina – 0.9%
3,545,000	Greenville, SC Hospital System, Hospital Refunding Revenue Bonds (Series 2008A), 4.00%, 5/1/2010	3,596,225
5,960,000	South Carolina Jobs-EDA, Hospital Revenue Bonds, Floating Rate Notes, 1.15% (Palmetto Health Alliance), 8/1/2013 Mandatory Tender	5,608,360
15,402,000	South Carolina State Housing Finance & Development Authority, Multi-Family Rental Housing Revenue Bonds (Series 2008), 1.15% TOBs (GE Funding Capital Market Services, Inc.)/(GTD by GE Capital Corp.), Mandatory Tender 9/1/2010	15,394,453
5,285,000	South Carolina State Public Service Authority (Santee Cooper), Refunding Revenue Obligations (Series 2009A), 5.00%, 1/1/2012	5,753,410
	TOTAL	30,352,448
	Tennessee – 0.2%
500,000	Sumner County, TN Health, Educational & Housing Facilities Board, Hospital Revenue & Refunding Improvement Bonds (Series 2007A), 5.25% (Sumner Regional Health Systems, Inc.), 11/1/2011	320,050
460,000	Sumner County, TN Health, Educational & Housing Facilities Board, Hospital Revenue & Refunding Improvement Bonds (Series 2007A), 5.25% (Sumner Regional Health Systems, Inc.), 11/1/2012	285,246
1,000,000	Sumner County, TN Health, Educational & Housing Facilities Board, Hospital Revenue & Refunding Improvement Bonds (Series 2007A), 5.25% (Sumner Regional Health Systems, Inc.), 11/1/2013	590,100
5,585,000	Tennessee State, GO Bonds (Series 2009A), 4.00%, 5/1/2012	6,020,574
	TOTAL	7,215,970

Annual Shareholder Report


	Texas – 2.7%
$1,500,000	Austin, TX, Water and Wastewater System Revenue Refunding Bonds (Series 2008A), 3.00%, 11/15/2011	1,563,720
6,500,000	Dallas, TX ISD, UT GO Refunding Bonds (Series 2009), 4.00%, 2/15/2011	6,768,190
2,000,000	Dallas-Fort Worth, TX International Airport, Joint Revenue Refunding Bonds (Series 2009A), 4.00%, 11/1/2011	2,110,680
2,000,000	Dallas-Fort Worth, TX International Airport, Joint Revenue Refunding Bonds (Series 2009A), 4.00%, 11/1/2012	2,134,600
1,855,000	Grapevine, TX, Combination Tax & Tax Increment Reinvestment Zone Number One Revenue Refunding Bonds (Series 2009A), 3.00%, 2/15/2011	1,906,161
1,540,000	Grapevine, TX, Combination Tax & Tax Increment Reinvestment Zone Number One Revenue Refunding Bonds (Series 2009A), 4.25%, 2/15/2012	1,644,874
3,170,000	Grapevine, TX, Refunding LT GO Bonds (Series 2009), 3.00%, 2/15/2011	3,257,429
4,345,000	Grapevine, TX, Refunding LT GO Bonds (Series 2009), 5.00%, 2/15/2012	4,716,845
1,000,000	Gulf Coast, TX Waste Disposal Authority, Solid Waste Disposal Revenue Bonds (Series 2003D), 4.55% (Waste Management, Inc.), 4/1/2012	1,003,990
2,300,000	Harris County, TX Cultural Education Facilities Finance Corp., Revenue Bonds (Series 2008B), 5.25% (Methodist Hospital, Harris County, TX), 12/1/2012	2,520,961
1,500,000	Harris County, TX Education Facilities Finance Corp., Medical Facilities Revenue Refunding Bonds (Series 2008D), 3.00% (Baylor College of Medicine), 11/15/2009	1,501,905
500,000	Harris County, TX Education Facilities Finance Corp., Medical Facilities Revenue Refunding Bonds (Series 2008D), 4.00% (Baylor College of Medicine), 11/15/2010	509,770
755,000	Harris County, TX Education Facilities Finance Corp., Medical Facilities Revenue Refunding Bonds (Series 2008D), 4.00% (Baylor College of Medicine), 11/15/2011	778,435
3,500,000	Harris County, TX HFDC, (Series A-3) ARS (Christus Health System)/ (FSA INS), 1.767%, 10/6/2009	3,500,000
4,450,000	Harris County, TX HFDC, (Series A-5) ARS (Christus Health System)/ (FSA INS), 1.585%, 10/1/2009	4,450,000
14,650,000	Harris County, TX HFDC, (Series A-6) ARS (Christus Health System)/ (FSA INS), 1.585%, 10/2/2009	14,650,000
1,000,000	Harris County, TX, Permanent Improvement Refunding LT GO Bonds (Series 2008B), 4.00%, 10/1/2010	1,034,860
1,250,000	Harris County, TX, Permanent Improvement Refunding LT GO Bonds (Series 2008B), 5.00%, 10/1/2011	1,353,838
1,000,000	Harris County, TX, Refunding UT GO Bonds (Series 2008A), 5.00%, 8/15/2010	1,039,930

Annual Shareholder Report


$3,500,000	Houston, TX Combined Utility System, First Lien Revenue Refunding Bonds (Series 2004C-2B), 5.00% TOBs (AMBAC INS), Mandatory Tender 5/15/2011	3,672,620
500,000	Lower Colorado River Authority, TX, Refunding Revenue Bonds (Series 20008), 5.00% (LCRA Transmission Services Corp.), 5/15/2011	527,710
500,000	Lower Colorado River Authority, TX, Refunding Revenue Bonds (Series 2008), 5.00% (LCRA Transmission Services Corp.), 5/15/2010	511,860
500,000	Lower Colorado River Authority, TX, Refunding Revenue Bonds (Series 2008), 5.00% (LCRA Transmission Services Corp.)/(Berkshire Hathaway Assurance Corp. INS), 5/15/2011	532,495
7,000,000	Lubbock, TX HFDC, Variable Rate Refunding Revenue Bonds (Series 2008A), 3.05% TOBs (St. Joseph Health System), Mandatory Tender 10/16/2012	7,053,760
1,000,000	Tarrant County, TX Cultural Education Facilities Finance Corp., Retirement Facilities Revenue Bonds (Series 2007), 5.25% (Buckingham Senior Living Community), 11/15/2010	996,440
635,000	Texas Municipal Gas Acquisition & Supply Corp. II, Gas Supply Revenue Bonds (Series 2007A), 0.60%, 9/15/2010	625,475
5,000,000	Texas State Public Finance Authority, Refunding UT GO Bonds (Series 2009A), 4.00% (Texas State), 10/1/2011	5,310,050
6,415,000	Texas State Public Finance Authority, Refunding UT GO Bonds (Series 2009A), 5.00% (Texas State), 10/1/2012	7,140,921
7,250,000	Texas State Public Finance Authority, UT GO Bonds (Series 2008A), 5.00% (Texas State), 10/1/2010	7,575,162
1,000,000	Texas State Transportation Commission, First Tier Revenue Bonds, 5.00%, 4/1/2010	1,023,590
1,500,000	Texas State Transportation Commission, First Tier Revenue Bonds, 5.00%, 4/1/2011	1,597,890
	TOTAL	93,014,161
	Utah – 1.0%
3,300,000	Box Elder County, UT, PCRBs (Series 1984), 3.00% TOBs (Nucor Corp.), Optional Tender 10/1/2009	3,330,030
3,000,000	Intermountain Power Agency, UT, Subordinated Power Supply Revenue Refunding Bonds (Series 2008A), 5.25%, 7/1/2011	3,209,250
5,000,000	Intermountain Power Agency, UT, Subordinated Supply Revenue Refunding Bonds (Series 2009A), 4.00%, 7/1/2010	5,117,900
2,765,000	Intermountain Power Agency, UT, Subordinated Supply Revenue Refunding Bonds (Series 2009A), 5.00%, 7/1/2011	2,945,914
3,000,000	Intermountain Power Agency, UT, Subordinated Supply Revenue Refunding Bonds (Series 2009A), 5.00%, 7/1/2012	3,275,250
5,320,000	Utah State, GO Bonds (Series 2009C), 3.00%, 7/1/2012	5,620,048
10,600,000	Utah State, UT GO Bonds (Series 2003A), 5.00%, 7/1/2012	11,772,784
	TOTAL	35,271,176

Annual Shareholder Report


	Virginia – 1.2%
$2,540,000	Fairfax County, VA Sewer Revenue, Revenue Bonds (Series 2009), 5.00%, 7/15/2012	2,822,854
1,500,000	King George County IDA, VA, 6.00% TOBs (Waste Management, Inc.), Mandatory Tender 5/3/2010	1,522,335
3,000,000	Louisa, VA IDA, PCR Refunding Bonds (Series 2008C), 5.00% TOBs (Virginia Electric & Power Co.), Mandatory Tender 12/1/2011	3,152,820
1,000,000	Louisa, VA IDA, Solid Waste & Sewage Disposal Revenue Bonds (Series 2001A), 4.35% TOBs (Virginia Electric & Power Co.), Mandatory Tender 3/1/2010	1,006,050
2,140,000	Manassas Park, VA, UT GO Bonds, 4.50% (United States Treasury PRF 10/1/2009@100), 10/1/2011	2,140,257
1,650,000	Virginia College Building Authority, Educational Facilities Revenue Bonds (Series 2009A), 5.00%, 2/1/2012	1,803,533
10,150,000	Virginia Commonwealth Transportation Board, Federal Highway Reimbursement Anticipation Notes (Series 2002), 5.00% (Virginia State), 9/27/2012	11,326,486
4,000,000	Virginia Peninsula Port Authority, Revenue Refunding Bonds (Series 2003), 5.00% TOBs (Dominion Terminal Associates)/(GTD by Dominion Resources, Inc.), Mandatory Tender 10/1/2011	4,087,080
2,825,000	Virginia State Public Building Authority, Public Facilities Revenue Bonds (Series 2006B), 5.00%, 8/1/2012	3,137,473
3,290,000	Virginia State Public Building Authority, Public Facilities Revenue Bonds (Series 2009B), 5.00%, 8/1/2011	3,545,469
3,000,000	Virginia State Public Building Authority, Public Facilities Revenue Bonds (Series 2009C), 4.00%, 8/1/2012	3,241,080
3,570,000	York County, VA EDA, PCR Refunding Bonds (Series 2009A), 4.05% TOBs (Virginia Electric & Power Co.), Mandatory Tender 5/1/2014	3,734,648
	TOTAL	41,520,085
	Washington – 0.7%
2,165,000	Chelan County, WA Public Utility District No. 1, Consolidated System Subordinate Revenue Notes (Series 2008A), 5.00%, 7/1/2013	2,413,174
1,000,000	Clark County, WA Public Utility District No. 001, Electric System Revenue & Refunding Bonds (Series 2009), 5.00%, 1/1/2011	1,045,170
2,155,000	Clark County, WA Public Utility District No. 001, Electric System Revenue & Refunding Bonds (Series 2009), 5.00%, 1/1/2012	2,311,475
3,140,000	Energy Northwest, WA, Project 1 Electric Revenue Refunding Bonds (Series 2008D), 5.00%, 7/1/2010	3,247,953
3,000,000	Energy Northwest, WA, Project 1 Electric Revenue Refunding Bonds (Series 2008D), 5.00%, 7/1/2011	3,211,740
1,585,000	Energy Northwest, WA, Project 3 Electric Revenue Refunding Bonds (Series 2008D), 5.00%, 7/1/2010	1,639,492

Annual Shareholder Report


$9,335,000	Washington State, Motor Vehicle Fuel Tax GO Bonds (Series 2010B), 5.00%, 8/1/2012	10,350,928
	TOTAL	24,219,932
	West Virginia – 0.2%
5,000,000	West Virginia EDA, PCR Revenue Refunding Bonds (Series 2008D), 4.85% TOBs (Appalachian Power Co.), Mandatory Tender 9/4/2013	5,214,250
	Wisconsin – 0.8%
3,750,000	Oak Creek, WI Waterworks System, BANs (Series 2009), 4.00%, 4/1/2011	3,790,200
12,000,000	Wisconsin Health & Educational Facilities Authority, Revenue Bonds (Series 2009B), 4.75% TOBs (Aurora Health Care, Inc.), Mandatory Tender 8/15/2014	12,096,000
1,985,000	Wisconsin Public Power System, Power Supply System Revenue Bonds (Series 2008A), 4.00%, 7/1/2010	2,021,901
2,840,000	Wisconsin Public Power System, Power Supply System Revenue Bonds (Series 2008A), 4.00%, 7/1/2011	2,950,533
2,000,000	Wisconsin State Transportation, Revenue Bonds (Series 2009A), 3.50%, 7/1/2013	2,144,640
2,420,000	Wisconsin State Transportation, Revenue Bonds (Series 2009A), 3.50%, 7/1/2014	2,601,960
750,000	Wisconsin State Transportation, Revenue Bonds (Series 2009A), 4.00%, 7/1/2012	806,047
	TOTAL	26,411,281
	Wyoming – 0.1%
4,200,000	Albany County, WY, PCRBs (Series 1985), 4.00% TOBs (Union Pacific Railroad Co.)/(GTD by Union Pacific Corp.), Optional Tender 12/1/2009	4,208,946
	TOTAL MUNICIPAL BONDS (IDENTIFIED COST $1,301,143,513)	1,313,172,514
	Short-term municipals – 59.0%;5
	Alabama – 2.3%
3,350,000	Marshall County, AL, Special Obligation School Refunding Warrant (Series 1994) Weekly VRDNs (Marshall County, AL Board of Education)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	3,350,000
6,220,000	Mobile, AL Downtown Redevelopment Authority, (Series 2007) Weekly VRDNs (Lafayette Plaza Hotel)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	6,220,000
50,000,000	Mobile, AL Special Care Facilities Financing Authority, (Series 2006-B) Weekly VRDNs (Infirmary Health System, Inc.)/(Regions Bank, Alabama LOC), 1.600%, 10/7/2009	50,000,000
12,140,000	Talladega County, AL Special Obligation, School Warrants (Series 2003) Weekly VRDNs (Talladega County, AL Board of Education)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	12,140,000

Annual Shareholder Report


$5,600,000	Washington County, AL IDA, (Series 2007: Gulf Opportunity Zone Bonds) Weekly VRDNs (Bay Gas Storage Company, Ltd.)/(Regions Bank, Alabama LOC), 2.500%, 10/7/2009	5,600,000
	TOTAL	77,310,000
	California – 10.3%
35,700,000	California Health Facilities Financing Authority, (Series 2003D) Weekly VRDNs (Stanford Hospital & Clinics)/(FSA INS)/(Dexia Credit Local LIQ), 0.430%, 10/7/2009	35,700,000
56,375,000	California State Department of Water Resources Power Supply Program, (Series 2005G-5) Weekly VRDNs (FSA INS)/(Bank of Nova Scotia, Toronto and Fortis Bank SA/NV LIQs), 0.450%, 10/1/2009	56,375,000
25,000,000	California State, Economic Recovery Bonds (Series 2004C-2) Daily VRDNs (California State Fiscal Recovery Fund)/(Bank of America N.A. LIQ), 1.000%, 10/1/2009	25,000,000
50,000,000	California State, Economic Recovery Bonds (Series 2004C-4) Daily VRDNs (California State Fiscal Recovery Fund)/(JPMorgan Chase Bank, N.A. LIQ), 1.000%, 10/1/2009	50,000,000
7,525,000	California State, GO Tax Exempt Notes, 0.70% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 10/5/2009	7,525,000
31,200,000	California State, GO Tax Exempt Notes, 0.70% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 10/9/2009	31,200,000
24,000,000	California State, GO Tax Exempt Notes, 0.80% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 10/27/2009	24,000,000
25,215,000	California State, GO Tax Exempt Notes, 0.95% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 12/9/2009	25,215,000

Annual Shareholder Report


$6,815,000	California State, GO Tax Exempt Notes, 1.15% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 12/9/2009	6,815,000
6,050,000	California State, GO Tax Exempt Notes, 1.40% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 10/8/2009	6,050,000
16,650,000	California State, GO Tax Exempt Notes, 2.40% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 11/10/2009	16,650,000
9,110,000	California State, GO Tax Exempt Notes, 2.60% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 11/10/2009	9,110,000
60,000,000	Victorville, CA Joint Powers Financing Authority, (Series 2007A: Cogeneration Facility) Weekly VRDNs (Victorville, CA)/(Fortis Bank SA/NV LOC), 0.850%, 10/1/2009	60,000,000
	TOTAL	353,640,000
	District of Columbia – 0.4%
14,165,000	District of Columbia Revenue Bonds, (Series 2009) Weekly VRDNs (American Society of Hematology, Inc.)/(SunTrust Bank LOC), 0.850%, 10/7/2009	14,165,000
	Florida – 4.5%
30,000,000	Bay Medical Center, FL Board of Trustees, (Series 2007B) Weekly VRDNs (Bay Medical Center)/(Regions Bank, Alabama LOC), 3.000%, 10/7/2009	30,000,000
16,125,000	Brevard County, FL Educational Facilities Authority, (Series B) Weekly VRDNs (Florida Institute of Technology)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/1/2009	16,125,000
7,125,000	Florida Higher Educational Facilities Financing Authority, (Series 2002) Weekly VRDNs (St. Leo University, FL)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	7,125,000
28,965,000	Florida State Municipal Power Agency, (Series 2008E) Daily VRDNs (SunTrust Bank LOC), 0.410%, 10/1/2009	28,965,000
29,765,000	New College of Florida Development Corp., (Series 2006) Weekly VRDNs (SunTrust Bank LOC), 0.850%, 10/7/2009	29,765,000

Annual Shareholder Report


$11,225,000		Orange County, FL IDA, (Series 2004) Weekly VRDNs (UCF Hospitality School Student Housing Foundation)/(SunTrust Bank LOC), 0.850%, 10/7/2009	11,225,000
5,100,000		Tampa, FL, (Series 2000) Weekly VRDNs (Tampa Preparatory School, Inc.)/(SunTrust Bank LOC), 0.940%, 10/7/2009	5,100,000
20,000,000		UCF Health Facilities Corp., Capital Improvement Revenue Bonds (Series 2007) Weekly VRDNs (UCF Health Sciences Campus at Lake Nona)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	20,000,000
7,000,000		Volusia County, FL Education Facility Authority, (Series 2001) Weekly VRDNs (Bethune-Cookman College, Inc.)/(SunTrust Bank LOC), 0.850%, 10/7/2009	7,000,000
		TOTAL	155,305,000
		Georgia – 0.9%
10,000,000		Fulton County, GA Development Authority, (Series 1999) Weekly VRDNs (YMCA of Metropolitan Atlanta, Inc.)/(SunTrust Bank LOC), 0.890%, 10/1/2009	10,000,000
4,300,000		Fulton County, GA IDA, (Series 2005) Weekly VRDNs (Phoenix Stamping Group LLC)/(FHLB of Atlanta LOC), 0.800%, 10/1/2009	4,300,000
17,000,000		Rabun County, GA Development Authority, (Series 1999) Weekly VRDNs (Rabun Gap-Nacoochee, Inc.)/(SunTrust Bank LOC), 0.950%, 10/7/2009	17,000,000
		TOTAL	31,300,000
		Illinois – 1.4%
9,900,000		Chicago, IL Board of Education, (Series 2000D) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 0.350%, 10/1/2009	9,900,000
5,000,000		Illinois Finance Authority, (Series 2006) Weekly VRDNs (Lawrence Hall Youth Services)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	5,000,000
9,600,000		Illinois Finance Authority, (Series 2006) Weekly VRDNs (Reliable Materials Lyons LLC)/(Marshall & Ilsley Bank, Milwaukee LOC), 4.370%, 10/7/2009	9,600,000
11,905,000	^1,2	Illinois State, (PT-3523) Weekly VRDNs (Dexia Credit Local LIQ), 1.300%, 10/1/2009	11,905,000
10,410,000	^1,2	Illinois State, (PT-3524) Weekly VRDNs (Dexia Credit Local LIQ), 1.300%, 10/1/2009	10,410,000
		TOTAL	46,815,000
		Indiana – 1.3%
11,760,000		Indiana Health Facility Financing Authority, (Series 2002) Weekly VRDNs (Union Hospital, Inc.)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	11,760,000
33,100,000		St. Joseph County, IN Hospital Authority, Health System Revenue Refunding Bonds (Series 2008B) Weekly VRDNs (Memorial Health System, Inc.)/(Fifth Third Bank, Cincinnati LOC), 1.140%, 10/7/2009	33,100,000
		TOTAL	44,860,000

Annual Shareholder Report


		Kentucky – 1.0%
$21,375,000		Henderson County, KY, (Series 2003B) Weekly VRDNs (Community United Methodist Hospital, Inc.)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	21,375,000
5,000,000		Lexington-Fayette, KY Urban County Government, (Series 2008) Weekly VRDNs (Roman Catholic Diocese of Lexington)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	5,000,000
6,215,000		Lexington-Fayette, KY Urban County Government, Variable Rate Educational Facilities Revenue Bonds (Series 2001) Weekly VRDNs (Sayre School)/(Fifth Third Bank, Cincinnati LOC), 1.140%, 10/1/2009	6,215,000
		TOTAL	32,590,000
		Louisiana – 0.8%
7,250,000		Louisiana Public Facilities Authority, (Series 2008A) Daily VRDNs (Air Products & Chemicals, Inc.), 0.320%, 10/1/2009	7,250,000
9,000,000		Louisiana State Offshore Terminal Authority, (Series 2003A) Daily VRDNs (Loop LLC)/(SunTrust Bank LOC), 0.410%, 10/1/2009	9,000,000
10,000,000		St. Tammany Parish Development District, LA, (Series 2008A) Weekly VRDNs (Slidell Development Company, LLC)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	10,000,000
		TOTAL	26,250,000
		Maryland – 0.6%
5,125,000		Maryland State Health & Higher Educational Facilities Authority, (Series 2004: French International School) Weekly VRDNs (La Fondation Du Lycee Francais International De Washington)/(SunTrust Bank LOC), 0.850%, 10/7/2009	5,125,000
16,370,000		Maryland State Health & Higher Educational Facilities Authority, (Series 2004A) Weekly VRDNs (Shore Health System)/(SunTrust Bank LOC), 0.950%, 10/1/2009	16,370,000
		TOTAL	21,495,000
		Massachusetts – 1.5%
31,724,000		Massachusetts Development Finance Agency, (Issue 4), 0.42% CP (FHLB of Boston LOC), Mandatory Tender 10/1/2009	31,724,000
19,850,000		Massachusetts HEFA, (Series A) Weekly VRDNs (Suffolk University)/(FHLB of Boston LOC), 0.400%, 10/1/2009	19,850,000
		TOTAL	51,574,000
		Michigan – 2.5%
82,615,000	^1,2	Detroit, MI City School District, (PT-3480) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 1.300%, 10/1/2009	82,615,000
1,400,000		Michigan State Hospital Finance Authority, (Series 1999 A) Weekly VRDNs (Covenant Retirement Communities, Inc.)/(Bank of America N.A. LOC), 0.330%, 10/1/2009	1,400,000
		TOTAL	84,015,000

Annual Shareholder Report


		Mississippi – 2.3%
$32,000,000		Mississippi Business Finance Corp., (Series 2007) Weekly VRDNs (DDR Gulfport Promenade LLC)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	32,000,000
13,500,000		Mississippi Business Finance Corp., (Series 2007) Weekly VRDNs (Gulf Ship, LLC)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	13,500,000
6,850,000		Mississippi Business Finance Corp., (Series 2008) Weekly VRDNs (200 Renaissance, LLC)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	6,850,000
7,340,000		Mississippi Business Finance Corp., (Series A) Weekly VRDNs (Mississippi College)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	7,340,000
17,355,000		Mississippi Development Bank, (Series 2008) Weekly VRDNs (Mississippi Convention Center)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	17,355,000
		TOTAL	77,045,000
		New Hampshire – 0.1%
5,100,000		New Hampshire Higher Educational & Health Facilities Authority, (Series 2001A) Weekly VRDNs (Dartmouth-Hitchcock Obligated Group)/(FSA INS)/(Dexia Credit Local and JPMorgan Chase Bank, N.A. LIQs), 0.500%, 10/1/2009	5,100,000
		New Jersey – 2.2%
51,000,000	^1,2	New Jersey EDA, (PT-3824) Weekly VRDNs (GTD by Dexia Credit Local)/(Dexia Credit Local LIQ), 1.280%, 10/1/2009	51,000,000
4,020,000	^1,2	New Jersey Turnpike Authority, (PT-2493) Weekly VRDNs (GTD by Dexia Credit Local)/(Dexia Credit Local LIQ), 1.280%, 10/1/2009	4,020,000
19,600,000		New Jersey Turnpike Authority, (Series 2003C-3) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 0.450%, 10/7/2009	19,600,000
		TOTAL	74,620,000
		New York – 7.2%
5,470,000		Columbia County, NY IDA, (Series 2008A) Weekly VRDNs (Columbia Memorial Hospital)/(Key Bank, N.A. LOC), 2.150%, 10/1/2009	5,470,000
11,845,000		Long Island Power Authority, NY, (Series 2003D) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 0.400%, 10/7/2009	11,845,000
33,890,000		Long Island Power Authority, NY, (Series 2003H) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 0.400%, 10/7/2009	33,890,000
30,240,000		Long Island Power Authority, NY, Electric System General Revenue Bonds (Series 2003-K) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 0.400%, 10/5/2009	30,240,000
6,235,000		Metropolitan Transportation Authority, NY, (Series 2008A) Weekly VRDNs (MTA Dedicated Tax Fund)/(FSA INS)/(Dexia Credit Local LIQ), 0.410%, 10/1/2009	6,235,000
10,000,000		New York City Housing Development Corp., (Series 2008A: Beekman Tower) Weekly VRDNs (FC Beekman Associates LLC)/(RBS Citizens Bank N.A. LOC), 0.800%, 10/7/2009	10,000,000

Annual Shareholder Report


$3,550,000		New York City, NY IDA, Liberty Revenue Bonds (Series 2004 B) Daily VRDNs (One Bryant Park LLC)/(Bank of America N.A. and Citibank NA, New York LOCs), 0.340%, 10/1/2009	3,550,000
38,200,000		New York City, NY Municipal Water Finance Authority, (Series 2000C) Daily VRDNs (Dexia Credit Local LIQ), 0.350%, 10/1/2009	38,200,000
26,100,000		New York City, NY Municipal Water Finance Authority, (Series 2001 F-1) Daily VRDNs (Dexia Credit Local LIQ), 0.350%, 10/1/2009	26,100,000
17,910,000		New York City, NY Transitional Finance Authority, New York City Recovery Bonds (2003 Subseries 2-E) Weekly VRDNs (Dexia Credit Local LIQ), 0.300%, 10/7/2009	17,910,000
22,520,000		New York City, NY Transitional Finance Authority, Subordinate Bonds (Series 2007A-3) Weekly VRDNs (Dexia Credit Local LIQ), 0.300%, 10/7/2009	22,520,000
11,500,000		New York City, NY, (Fiscal 2008 Subseries J-5) Daily VRDNs (Dexia Credit Local LIQ), 0.310%, 10/1/2009	11,500,000
2,400,000		New York City, NY, (Fiscal 2008 Subseries L-5) Daily VRDNs (Dexia Credit Local LIQ), 0.310%, 10/1/2009	2,400,000
10,980,000	^1,2	New York State Thruway Authority, ROCs RR II (R-12305) Weekly VRDNs (FSA INS)/(Citibank NA, New York LIQ), 0.800%, 10/1/2009	10,980,000
7,900,000		Saratoga County, NY Industrial Development Agency, (Series 2007A) Weekly VRDNs (Saratoga Hospital Obligated Group)/(Key Bank, N.A. LOC), 2.150%, 10/1/2009	7,900,000
7,520,000		St. Lawrence County, NY IDA, (Series 2006) Weekly VRDNs (Claxton-Hepburn Medical Center)/(Key Bank, N.A. LOC), 2.150%, 10/1/2009	7,520,000
		TOTAL	246,260,000
		North Carolina – 1.5%
20,000,000		Charlotte-Mecklenburg Hospital Authority, NC, (Series 2007B) Weekly VRDNs (Carolinas HealthCare System)/(Bayerische Landesbank LIQ), 2.000%, 10/1/2009	20,000,000
30,835,000		Charlotte-Mecklenburg Hospital Authority, NC, (Series 2007C) Weekly VRDNs (Carolinas HealthCare System)/(Bayerische Landesbank LIQ), 2.500%, 10/1/2009	30,835,000
		TOTAL	50,835,000
		Ohio – 6.2%
7,250,000		Delaware County, OH Healthcare Facilities, (Series 2007B) Weekly VRDNs (Willow Brook Christian Communities)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	7,250,000
4,385,000		Evendale, OH, Tax Increment Revenue Bonds (Series 2009) Weekly VRDNs (Evendale Commons Ltd.)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/1/2009	4,385,000
59,600,000		Geauga County, OH, Revenue Bonds (Series 2007A) Daily VRDNs (South Franklin Circle)/(Key Bank, N.A. LOC), 0.450%, 10/1/2009	59,600,000

Annual Shareholder Report


$59,100,000	Geauga County, OH, Revenue Bonds (Series 2007B) Daily VRDNs (South Franklin Circle)/(Key Bank, N.A. LOC), 0.450%, 10/1/2009	59,100,000
46,000,000	Hancock County, OH, (Series 2004) Weekly VRDNs (Blanchard Valley Regional Health Center)/(FSA INS)/(Fifth Third Bank, Cincinnati LIQ), 2.000%, 10/1/2009	46,000,000
19,565,000	Montgomery County, OH Hospital Authority, (Series 2008A) Weekly VRDNs (Kettering Health Network Obligated Group)/(FSA INS)/(Dexia Credit Local LIQ), 0.500%, 10/7/2009	19,565,000
7,500,000	Montgomery County, OH Hospital Authority, (Series 2008B) Weekly VRDNs (Kettering Health Network Obligated Group)/(FSA INS)/(Dexia Credit Local LIQ), 0.500%, 10/7/2009	7,500,000
10,000,000	Ohio State Air Quality Development Authority, (Series 2006-A) Weekly VRDNs (FirstEnergy Generation Corp.)/(Key Bank, N.A. LOC), 1.100%, 10/7/2009	10,000,000
	TOTAL	213,400,000
	Oklahoma – 0.0%
1,000,000	Garfield County, OK Industrial Authority Pollution Control, (Series 1995-A) Weekly VRDNs (Oklahoma Gas and Electric Co.), 0.600%, 10/7/2009	1,000,000
	Pennsylvania – 3.4%
5,500,000	Chester County, PA IDA, (Series 2007) Weekly VRDNs (YMCA of the Brandywine Valley)/(Fulton Bank LOC), 2.750%, 10/1/2009	5,500,000
25,000,000	Delaware Valley, PA Regional Finance Authority, (Series 1985B) Weekly VRDNs (Bayerische Landesbank LOC), 0.500%, 10/7/2009	25,000,000
6,800,000	Delaware Valley, PA Regional Finance Authority, (Series 1985C) Weekly VRDNs (Bayerische Landesbank LOC), 0.500%, 10/7/2009	6,800,000
23,100,000	Delaware Valley, PA Regional Finance Authority, (Series 1985D) Weekly VRDNs (Bayerische Landesbank LOC), 0.500%, 10/7/2009	23,100,000
2,240,000	Lancaster, PA IDA, (Series 2005A) Weekly VRDNs (Farm & Home Foundation of Lancaster)/(Fulton Bank LOC), 2.750%, 10/1/2009	2,240,000
40,720,000	Pennsylvania State Higher Education Facilities Authority, (Series 2007B) Weekly VRDNs (La Salle University)/(Citizens Bank of Pennsylvania LOC), 1.000%, 10/7/2009	40,720,000
4,285,000	Southcentral PA, General Authority, (Series 2000) Weekly VRDNs (Cerebral Palsy Home, Inc.)/(Fulton Bank LOC), 2.750%, 10/1/2009	4,285,000
9,300,000	Southcentral PA, General Authority, (Series 2008D) Weekly VRDNs (Wellspan Health Obligated Group)/(SunTrust Bank LOC), 0.940%, 10/7/2009	9,300,000
	TOTAL	116,945,000
	Rhode Island – 0.8%
8,475,000	Rhode Island State Health and Educational Building Corp., (Series 2000) Weekly VRDNs (Moses Brown School)/(RBS Citizens Bank N.A. LOC), 1.750%, 10/7/2009	8,475,000

Annual Shareholder Report


$4,475,000	Rhode Island State Health and Educational Building Corp., (Series 2003) Weekly VRDNs (St. John Baptist De La Salle Institute)/(RBS Citizens Bank N.A. LOC), 1.750%, 10/7/2009	4,475,000
10,900,000	Rhode Island State Health and Educational Building Corp., (Series 2006) Weekly VRDNs (Child and Family Services of Newport County)/(RBS Citizens Bank N.A. LOC), 1.750%, 10/7/2009	10,900,000
4,990,000	Rhode Island State Health and Educational Building Corp., (Series 2007) Weekly VRDNs (CVS-Highlander Charter School, Inc.)/(RBS Citizens Bank N.A. LOC), 1.750%, 10/7/2009	4,990,000
	TOTAL	28,840,000
	South Carolina – 0.6%
8,800,000	Piedmont Municipal Power Agency, SC, (Series 2008D) Weekly VRDNs (Assured Guaranty Corp. INS)/(Dexia Credit Local LIQ), 0.540%, 10/1/2009	8,800,000
10,000,000	South Carolina Jobs-EDA, (Series 1997) Weekly VRDNs (Waste Management, Inc.)/(SunTrust Bank LOC), 1.100%, 10/7/2009	10,000,000
	TOTAL	18,800,000
	Tennessee – 2.3%
5,495,000	Blount County, TN Health and Educational Facilities Board, (Series 2000) Weekly VRDNs (Presbyterian Homes of TN, Inc.)/(SunTrust Bank LOC), 0.950%, 10/7/2009	5,495,000
7,800,000	Dickson County, TN IDB, (Series 1997) Weekly VRDNs (Jackson Foundation)/(SunTrust Bank LOC), 0.900%, 10/7/2009	7,800,000
10,600,000	Hendersonville, TN IDB, (Series 2000) Weekly VRDNs (Pope John Paul II High School, Inc.)/(SunTrust Bank LOC), 0.950%, 10/7/2009	10,600,000
25,000,000	Johnson City, TN Health & Education Facilities Board, (Series 2007A) Weekly VRDNs (Mountain States Health Alliance)/(Regions Bank, Alabama LOC), 2.500%, 10/7/2009	25,000,000
6,885,000	Knox County, TN Health Education & Housing Facilities Board, (Series 2000) Weekly VRDNs (Johnson Bible College)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	6,885,000
13,565,000	Memphis-Shelby County, TN Industrial Development Board, (Series 1999) Weekly VRDNs (UT Medical Group, Inc.)/ (SunTrust Bank LOC), 0.900%, 10/1/2009	13,565,000
9,070,000	Metropolitan Nashville, TN Airport Authority, (Series 2003) Weekly VRDNs (SunTrust Bank LOC), 1.000%, 10/7/2009	9,070,000
	TOTAL	78,415,000
	Texas – 0.8%
17,870,000	Austin, TX, Travis and Williamson Counties (Series 2008) Weekly VRDNs (Austin, TX Water and Wastewater System)/(Dexia Credit Local LOC), 0.450%, 10/1/2009	17,870,000

Annual Shareholder Report


$10,000,000	Harris County, TX Education Facilities Finance Corp., (Series 2008E) Daily VRDNs (Young Men's Christian Association of the Greater Houston Area)/(Regions Bank, Alabama LOC), 0.500%, 10/1/2009	10,000,000
	TOTAL	27,870,000
	Utah – 0.5%
15,500,000	Salt Lake County, UT Solid Waste Disposal, (Series A) Weekly VRDNs (Kennecott Utah Copper Corp.)/(GTD by Rio Tinto PLC), 3.250%, 10/7/2009	15,500,000
	Virginia – 1.3%
11,750,000	Albemarle County, VA IDA, (Series 2007) Weekly VRDNs (Thomas Jefferson Foundation, Inc.)/(SunTrust Bank LOC), 0.850%, 10/7/2009	11,750,000
12,565,000	Madison County, VA IDA, (Series 2007) Daily VRDNs (Woodberry Forest School)/(SunTrust Bank LOC), 0.410%, 10/1/2009	12,565,000
2,400,000	Richmond, VA IDA, (Series 2001) Daily VRDNs (Church Schools in the Diocese of Virginia)/(SunTrust Bank LOC), 0.600%, 10/1/2009	2,400,000
13,895,000	Richmond, VA IDA, (Series 2005) Daily VRDNs (Church Schools in the Diocese of Virginia)/(SunTrust Bank LOC), 0.600%, 10/1/2009	13,895,000
4,000,000	Roanoke, VA IDA, (Series 2005A-1) Daily VRDNs (Carilion Health System Obligated Group)/(FSA INS)/(Wachovia Bank N.A. LIQ), 0.320%, 10/1/2009	4,000,000
	TOTAL	44,610,000
	West Virginia – 0.9%
30,800,000	Cabell County, WV, (Series 2007A) Weekly VRDNs (MSH-Marshall LLC)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	30,800,000
	Wisconsin – 1.4%
2,000,000	Columbus, WI, (Series 1994) Weekly VRDNs (Maysteel Corp.)/(U.S. Bank, N.A. LOC), 1.400%, 10/1/2009	2,000,000
6,165,000	Wisconsin State HEFA, (Series 2005) Daily VRDNs (National Regency of New Berlin, Inc.)/(Marshall & Ilsley Bank, Milwaukee LOC), 3.500%, 10/1/2009	6,165,000
38,330,000	Wisconsin State HEFA, (Series 2008) Weekly VRDNs (Agnesian Healthcare, Inc.)/(Marshall & Ilsley Bank, Milwaukee LOC), 2.320%, 10/1/2009	38,330,000
	TOTAL	46,495,000
	TOTAL SHORT-TERM MUNICIPALS (IDENTIFIED COST $2,015,854,000)	2,015,854,000
	TOTAL INVESTMENTS — 97.4% (IDENTIFIED COST $3,316,997,513)⁶	3,329,026,514
	OTHER ASSETS AND LIABILITIES - NET — 2.6%⁷	89,731,566
	TOTAL NET ASSETS — 100%	$3,418,758,080

Securities that are subject to the federal alternative minimum tax (AMT) represent 2.0% of the portfolio as calculated based upon total market value (percentage is unaudited).

Annual Shareholder Report

1	Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At September 30, 2009, these restricted securities amounted to $176,970,350, which represented 5.2% of total net assets.
2	Denotes a restricted security that may be resold without restriction to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Fund's Board of Directors (the “Directors”). At September 30, 2009, these liquid restricted securities amounted to $170,930,000, which represented 5.0% of total net assets.
3	Non-income producing security.
4	Market quotations and price evaluations are not available. Fair value determined in accordance with procedures established by and under the general supervision of the Directors.
5	Current rate and next reset date shown for Variable Rate Demand Notes.
6	The cost of investments for federal tax purposes amounts to $3,316,993,074.
7	Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

Note: The categories of investments are shown as a percentage of total net assets at September 30, 2009.

Annual Shareholder Report

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:
Level 1 — quoted prices in active markets for identical securities
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used, as of September 30, 2009, in valuing the Fund's assets carried at fair value:

Valuation Inputs
	Level 1 - Quoted Prices and Investments in Mutual Funds	Level 2 - Other Significant Observable Inputs	Level 3 - Significant Unobservable Inputs	Total
Debt Securities:
Municipal Bonds	$ —	$1,313,172,514	$ —	$1,313,172,514
Short-Term Municipals	—	2,015,854,000	—	2,015,854,000
TOTAL SECURITIES	$ —	$3,329,026,514	$ —	$3,329,026,514

Annual Shareholder Report

The following acronyms are used throughout this portfolio:

AMBAC	— American Municipal Bond Assurance Corporation
ARS	— Auction Rate Securities
BANs	— Bond Anticipation Notes
COL	— Collateralized
COP	— Certificates of Participation
CP	— Commercial Paper
CSD	— Central School District
EDA	— Economic Development Authority
EDFA	— Economic Development Financing Authority
FGIC	— Financial Guaranty Insurance Company
FHLB	— Federal Home Loan Bank
FSA	— Financial Security Assurance
GANs	— Grant Anticipation Notes
GO	— General Obligation
GTD	— Guaranteed
HDA	— Hospital Development Authority
HEFA	— Health and Education Facilities Authority
HFA	— Housing Finance Authority
HFDC	— Health Facility Development Corporation
IDA	— Industrial Development Authority
IDB	— Industrial Development Bond
IDRBs	— Industrial Development Revenue Bonds
INS	— Insured
ISD	— Independent School District
LID	— Local Improvement District
LIQ(s)	— Liquidity Agreement(s)
LOC(s)	— Letter(s) of Credit
LT	— Limited Tax
PCFA	— Pollution Control Finance Authority
PCR	— Pollution Control Revenue
PCRBs	— Pollution Control Revenue Bonds
PRF	— Pre-refunded
RANs	— Revenue Anticipation Notes
ROCs	— Reset Option Certificates
SID	— Special Improvement District
TANs	— Tax Anticipation Notes
TOBs	— Tender Option Bonds
USD	— Unified School District
UT	— Unlimited Tax
VRDNs	— Variable Rate Demand Notes

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

Statement of Assets and Liabilities

September 30, 2009

Assets:
Total investments in securities, at value (identified cost $3,316,997,513)		$3,329,026,514
Cash		37,106
Income receivable		14,886,418
Receivable for investments sold		89,572,537
Receivable for shares sold		54,560,336
TOTAL ASSETS		3,488,082,911
Liabilities:
Payable for investments purchased	$40,120,316
Payable for shares redeemed	27,429,130
Income distribution payable	624,030
Payable for distribution services fee (Note 5)	397,356
Payable for shareholder services fee (Note 5)	480,863
Accrued expenses	273,136
TOTAL LIABILITIES		69,324,831
Net assets for 341,196,757 shares outstanding		$3,418,758,080
Net Assets Consist of:
Paid-in capital		$3,412,463,267
Net unrealized appreciation of investments		12,029,001
Accumulated net realized loss on investments		(5,735,215)
Undistributed net investment income		1,027
TOTAL NET ASSETS		$3,418,758,080
Net Asset Value, Offering Price and Redemption Proceeds Per Share
Institutional Shares:
$875,234,729 ÷ 87,349,639 shares outstanding, $0.001 par value, 500,000,000 shares authorized		$10.02
Offering price per share		$10.02
Redemption proceeds per share		$10.02
Class A Shares:
$2,543,523,351 ÷ 253,847,118 shares outstanding, $0.001 par value, 500,000,000 shares authorized		$10.02
Offering price per share (100/98.00 of $10.02)		$10.22
Redemption proceeds per share		$10.02

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

Statement of Operations

Year Ended September 30, 2009

Investment Income:
Interest			$38,846,220
Expenses:
Investment adviser fee (Note 5)		$9,011,784
Administrative personnel and services fee (Note 5)		1,165,764
Custodian fees		59,979
Transfer and dividend disbursing agent fees and expenses		133,871
Directors'/Trustees' fees		7,858
Auditing fees		24,800
Legal fees		5,165
Portfolio accounting fees		173,235
Distribution services fee — Class A Shares (Note 5)		2,835,120
Shareholder services fee — Class A Shares (Note 5)		2,833,477
Account administration fee — Class A Shares		1,642
Share registration costs		399,005
Printing and postage		41,636
Insurance premiums		6,927
Taxes		92,185
Miscellaneous		3,810
TOTAL EXPENSES		16,796,258
Waivers and Reduction:
Waiver of investment adviser fee (Note 5)	$(5,772,341)
Waiver of administrative personnel and services fee (Note 5)	(22,770)
Waiver of distribution services fee — Class A Shares (Note 5)	(567,024)
Reduction of custodian fees (Note 6)	(146)
TOTAL WAIVERS AND REDUCTION		$(6,362,281)
Net expenses			$10,433,977
Net investment income			28,412,243
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments			(1,405,085)
Net change in unrealized depreciation of investments			15,979,467
Net realized and unrealized gain on investments			14,574,382
Change in net assets resulting from operations			$42,986,625

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

Statement of Changes in Net Assets

Year Ended September 30	2009	2008
Increase (Decrease) in Net Assets
Operations:
Net investment income	$28,412,243	$12,585,266
Net realized loss on investments	(1,405,085)	(1,286,613)
Net change in unrealized appreciation/depreciation of investments	15,979,467	(3,289,467)
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS	42,986,625	8,009,186
Distributions to Shareholders:
Distributions from net investment income
Institutional Shares	(8,320,726)	(5,676,675)
Class A Shares	(20,089,793)	(6,895,399)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS	(28,410,519)	(12,572,074)
Share Transactions:
Proceeds from sale of shares	3,823,621,229	876,468,265
Net asset value of shares issued to shareholders in payment of distributions declared	21,677,679	7,994,458
Cost of shares redeemed	(1,202,373,304)	(330,237,970)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS	2,642,925,604	554,224,753
Change in net assets	2,657,501,710	549,661,865
Net Assets:
Beginning of period	761,256,370	211,594,505
End of period (including undistributed net investment income of $1,027 and $2,983, respectively)	$3,418,758,080	$761,256,370

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

Notes to Financial Statements

September 30, 2009

1. ORGANIZATION

Federated Fixed Income Securities, Inc. (the “Corporation”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Corporation consists of two portfolios. The financial statements included herein are only those of Federated Municipal Ultrashort Fund (the “Fund”), a diversified portfolio. The financial statements of the other portfolio are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers two classes of shares: Institutional Shares and Class A Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The financial highlights of the Institutional Shares are presented separately. The investment objective of the Fund is to provide current income exempt from federal regular income tax. Interest income from the Fund's investments may be subject to the federal AMT for individuals and corporations and state and local taxes.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with U.S. generally accepted accounting principles (GAAP).

Investment Valuation

In calculating its net asset value (NAV), the Fund generally values investments as follows:

Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Directors.
Fixed-income securities acquired with remaining maturities of 60 days or less are valued at their cost (adjusted for the accretion of any discount or amortization of any premium).
Shares of other mutual funds are valued based upon their reported NAVs.
Derivative contracts listed on exchanges are valued at their reported settlement or closing price.
Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Directors.

If the Fund cannot obtain a price or price evaluation from a pricing service for an investment, the Fund may attempt to value the investment based upon the mean of bid and asked quotations or fair value the investment based on price evaluations, from one or more dealers. If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could purchase or sell an investment at the price used to calculate the Fund's NAV.

Fair Valuation and Significant Events Procedures

The Directors have authorized the use of pricing services to provide evaluations of the current fair value of certain investments for purposes of calculating the NAV. Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid Annual Shareholder Report

evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for U.S. Treasury and Agency securities and municipal securities. The Fund normally uses mid evaluations for other types of fixed-income securities and OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Directors.

The Directors also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:

With respect to price evaluations of fixed-income securities determined before the close of regular trading on the NYSE, actions by the Federal Reserve Open Market Committee and other significant trends in U.S. fixed-income markets;
Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; and
Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.

The Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Fund will determine the fair value of the investment using another method approved by the Directors.

Investment Income, Gains and Losses, Expenses and Distributions

Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income are declared daily and paid monthly. Non-cash dividends included in dividend income, if any, are recorded at fair value. Investment income, realized and unrealized gains and losses and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that each class may bear certain expenses unique to that class such as account administration, distribution services and shareholder services fees. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Premium and Discount Amortization

All premiums and discounts on fixed-income securities are amortized/accreted for financial statement purposes.

Federal Taxes

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the year ended September 30, 2009, the Fund did not have a liability for any uncertain tax positions. The Fund Annual Shareholder Report

recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of September 30, 2009, tax years 2006 through 2009 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America, the state of Maryland and the Commonwealth of Pennsylvania.

Other Taxes

As an open-end management investment company incorporated in the state of Maryland but domiciled in the Commonwealth of Pennsylvania, the Fund is subject to the Pennsylvania Franchise Tax. This franchise tax is assessed annually on the value of the Fund, as represented by average net assets for the tax year.

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Restricted Securities

Restricted securities are securities that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) are subject to contractual restrictions on public sales. In some cases, when a security cannot be offered for public sale without first being registered, the issuer of the restricted security has agreed to register such securities for resale, at the issuer's expense, either upon demand by the Fund or in connection with another registered offering of the securities. Many such restricted securities may be resold in the secondary market in transactions exempt from registration. Restricted securities may be determined to be liquid under criteria established by the Directors. The Fund will not incur any registration costs upon such resales. The Fund's restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined in accordance with procedures established by and under the general supervision of the Directors.

Additional information on restricted securities, excluding securities purchased under Rule 144A, if applicable, that have been deemed liquid by the Directors, held at September 30, 2009, is as follows:

Security	Acquisition Date	Acquisition Cost	Market Value
California Municipal Finance Authority, Solid Waste Disposal Revenue Bonds (Series 2009A), 4.90% TOBs (Waste Management, Inc.), Mandatory Tender 2/1/2010	3/4/2009	$3,000,000	$3,014,370
Yavapai County, AZ IDA Solid Waste Disposal, 4.00% TOBs (Waste Management, Inc.), Mandatory Tender 6/1/2010	5/24/2005	$3,000,000	$3,025,980

Annual Shareholder Report

Other

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

3. CAPITAL STOCK

The following tables summarize capital stock activity:

Year Ended September 30	2009		2008
Institutional Shares:	Shares	Amount	Shares	Amount
Shares sold	93,260,398	$931,780,305	18,256,416	$181,907,226
Shares issued to shareholders in payment of distributions declared	427,808	4,269,296	200,472	1,997,037
Shares redeemed	(25,973,055)	(259,253,515)	(13,203,938)	(131,652,809)
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS	67,715,151	$676,796,086	5,252,950	$52,251,454

Year Ended September 30	2009		2008
Class A Shares:	Shares	Amount	Shares	Amount
Shares sold	289,473,031	$2,891,840,924	69,734,047	$694,561,039
Shares issued to shareholders in payment of distributions declared	1,744,983	17,408,383	602,669	5,997,421
Shares redeemed	(94,495,438)	(943,119,789)	(19,949,515)	(198,585,161)
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS	196,722,576	$1,966,129,518	50,387,201	$501,973,299
NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS	264,437,727	$2,642,925,604	55,640,151	$554,224,753

4. FEDERAL TAX INFORMATION

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are due to differing treatments for discount accretion/premium amortization on debt securities.

For the year ended September 30, 2009, permanent differences identified and reclassified among the components of net assets were as follows:

Increase (Decrease)
Undistributed Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)
$(3,680)		$3,680

Net investment income (loss), net realized gains (losses) and net assets were not affected by this reclassification.

Annual Shareholder Report

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended September 30, 2009 and 2008, was as follows:

	2009	2008
Ordinary income	$18,100	$ —
Tax-exempt income	$28,392,419	$12,572,074

As of September 30, 2009, the components of distributable earnings on a tax basis were as follows:

Undistributed tax-exempt income	$1,027
Net unrealized appreciation	$12,033,440
Capital loss carryforwards and deferrals	$(5,739,654)

The difference between book-basis and tax-basis net unrealized appreciation/depreciation is attributable to differing treatments for discount accretion/premium amortization on debt securities.

At September 30, 2009, the cost of investments for federal tax purposes was $3,316,993,074. The net unrealized appreciation of investments for federal tax purposes was $12,033,440. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $13,954,440 and net unrealized depreciation from investments for those securities having an excess of cost over value of $1,921,000.

At September 30, 2009, the Fund had a capital loss carryforward of $4,362,766 which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income tax. Pursuant to the Code, such capital loss carryforward will expire as follows:

Expiration Year	Expiration Amount
2010	$541
2011	$353,600
2012	$59,924
2013	$884,421
2014	$978,739
2015	$631,311
2016	$148,172
2017	$1,306,058

Under current tax regulations, capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. As of September 30, 2009, for federal income tax purposes, post-October losses of $1,376,888 were deferred to October 1, 2009.

Annual Shareholder Report

5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company is the Fund's investment adviser (the “Adviser”). The advisory agreement between the Fund and the Adviser provides for an annual fee equal to 0.60% of the Fund's average daily net assets. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion. For the year ended September 30, 2009, the Adviser voluntarily waived $5,772,341 of its fee.

Administrative Fee

Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of certain Federated funds as specified below:

Administrative Fee	Average Aggregate Daily Net Assets of the Federated Funds
0.150%	on the first $5 billion
0.125%	on the next $5 billion
0.100%	on the next $10 billion
0.075%	on assets in excess of $20 billion

The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares. Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion. For the year ended
September 30, 2009, the net fee paid to FAS was 0.076% of average daily net assets of the Fund. FAS waived $22,770 of its fee.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund's Class A Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at 0.25% of average daily net assets, annually, to compensate FSC. Subject to the terms described in the Expense Limitation note, FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion. For the year ended September 30, 2009, FSC voluntarily waived $567,024 of its fee. When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended September 30, 2009, FSC retained $1,140,477 of fees paid by the Fund.

Sales Charges

Front-end sales charges and contingent deferred sales charges do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended September 30, 2009, FSC did not retain any sales charges from the sale of Class A Shares.

Annual Shareholder Report

Shareholder Services Fee

The Fund may pay fees (Service Fees) up to 0.25% of the average daily net assets of the Fund's Class A Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for shareholder services fees. This voluntary reimbursement can be modified or terminated at any time. For the year ended September 30, 2009, FSSC received $3,312 of fees paid by the Fund.

Interfund Transactions

During the year ended September 30, 2009, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $906,460,000 and $1,160,684,000, respectively.

Expense Limitation

The Adviser and its affiliates (which may include FSC, FAS and FSSC) have voluntarily agreed to waive their fees and/or reimburse expenses so that the total operating expenses (as shown in the financial highlights) paid by the Fund's Institutional Shares and Class A Shares (after the voluntary waivers and reimbursements) will not exceed 0.35% and 0.80% respectively through the later of (the “Termination Date”): (a) November 30, 2010 or (b) the date of the Fund's next effective prospectus. While the Adviser and its affiliates currently do not anticipate terminating these arrangements prior to the Termination Date, these arrangements may only be terminated prior to the Termination Date with the agreement of the Fund's Board of Directors.

General

Certain Officers and Directors of the Fund are Officers and Directors or Trustees of the above companies.

6. EXPENSE Reduction

Through arrangements with the Fund's custodian, net credits realized as a result of uninvested cash balances were used to reduce custody expenses. For the year ended September 30, 2009, the Fund's expenses were reduced by $146 under these arrangements.

7. Investment TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended September 30, 2009, were as follows:

Purchases	$1,122,191,187
Sales	$308,594,058

8. LINE OF CREDIT

The Fund participates in a $100,000,000 unsecured, uncommitted revolving line of credit (LOC) agreement with PNC Bank. The LOC was made available for extraordinary or emergency purposes, primarily for financing redemption payments. Borrowings are charged interest at a rate offered to the Fund by PNC Bank at the time of the borrowing. As of September 30, 2009, there were no outstanding loans. During the year ended September 30, 2009, the Fund did not utilize the LOC.

Annual Shareholder Report

9. INTERFUND LENDING

Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (SEC), the Fund, along with other funds advised by subsidiaries of Federated Investors, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from other participating affiliated funds. As of September 30, 2009, there were no outstanding loans. During the year ended September 30, 2009, the program was not utilized.

10. Legal Proceedings

Since October 2003, Federated Investors, Inc. and related entities (collectively, “Federated”), and various Federated funds (“Federated Funds”) have been named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. These lawsuits began to be filed shortly after Federated's first public announcement that it had received requests for information on shareholder trading activities in the Federated Funds from the SEC, the Office of the New York State Attorney General (NYAG), and other authorities. In that regard, on November 28, 2005, Federated announced that it had reached final settlements with the SEC and the NYAG with respect to those matters. As Federated previously reported in 2004, it has already paid approximately $8.0 million to certain funds as determined by an independent consultant. As part of these settlements, Federated agreed to pay for the benefit of fund shareholders additional disgorgement and a civil money penalty in the aggregate amount of an additional $72.0 million. Federated entities have also been named as defendants in several additional lawsuits that are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees. The Board of the Federated Funds retained the law firm of Dickstein Shapiro LLP to represent the Federated Funds in these lawsuits. Federated and the Federated Funds and their respective counsel have been defending this litigation, and none of the Federated Funds remains a defendant in any of the lawsuits (though some could potentially receive any recoveries as nominal defendants). Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these lawsuits, all of which seek unquantified damages, attorneys' fees and expenses, and future potential similar suits is uncertain. Although we do not believe that these lawsuits will have a material adverse effect on the Federated Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the regulatory investigations will not result in increased Federated Fund redemptions, reduced sales of Federated Fund shares or other adverse consequences for the Federated Funds.

11. Subsequent events

Management has evaluated subsequent events through November 24, 2009, the date the financial statements were issued, and determined that no events have occurred that require additional disclosure.

12. FEDERAL TAX INFORMATION (UNAUDITED)

For the year ended September 30, 2009, 99.94% of the distributions from net investment income is exempt from federal income tax, other than the federal AMT.

Annual Shareholder Report

Report of Independent Registered Public Accounting Firm

TO THE BOARD OF DIRECTORS OF Federated fixed income securities, inc. AND SHAREHOLDERS OF Federated municipal Ultrashort fund:

We have audited the accompanying statement of assets and liabilities of Federated Municipal Ultrashort Fund (the “Fund”), one of the portfolios constituting Federated Fixed Income Securities, Inc., including the portfolio of investments, as of September 30, 2009, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with 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. We were not engaged to perform an audit of the Fund'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 Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements 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 September 30, 2009, 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 Federated Municipal Ultrashort Fund, a portfolio of Federated Fixed Income Securities, Inc., at September 30, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

November 24, 2009

Annual Shareholder Report

Board of Directors and Corporation Officers

The Board is responsible for managing the Corporation's business affairs and for exercising all the Corporation's powers except those reserved for the shareholders. The following tables give information about each Board member and the senior officers of the Fund. Where required, the tables separately list Board members who are “interested persons” of the Fund (i.e., “Interested” Board members) and those who are not (i.e., “Independent” Board members). Unless otherwise noted, the address of each person listed is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222. The address of all Independent Board members listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2008, the Corporation comprised two portfolios, and the Federated Fund Complex consisted of 40 investment companies (comprising 149 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Board member oversees all portfolios in the Federated Fund Complex and serves for an indefinite term. The Fund's Statement of Additional Information includes additional information about Corporation Directors and is available, without charge and upon request, by calling 1-800-341-7400.

Interested DIRECTORS Background

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
John F. Donahue* Birth Date: July 28, 1924 DIRECTOR Began serving: October 1991	Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Complex's Executive Committee. Previous Positions: Chairman of the Federated Fund Complex; Trustee, Federated Investment Management Company; Chairman and Director, Federated Investment Counseling.
J. Christopher Donahue* Birth Date: April 11, 1949 PRESIDENT AND DIRECTOR Began serving: January 2000	Principal Occupations: Principal Executive Officer and President of the Federated Fund Complex; Director or Trustee of some of the Funds in the Federated Fund Complex; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd.

*	Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries.

Annual Shareholder Report

INDEPENDENT DIRECTORS Background

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
John T. Conroy, Jr., Ph.D. Birth Date: June 23, 1937 DIRECTOR Began serving: October 1991	Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman of the Board, Investment Properties Corporation; Partner or Trustee in private real estate ventures in Southwest Florida; Assistant Professor in Theology at Barry University and Blessed Edmund Rice School for Pastoral Ministry. Previous Positions: President, Investment Properties Corporation; Senior Vice President, John R. Wood and Associates, Inc., Realtors; President, Naples Property Management, Inc. and Northgate Village Development Corporation.
Nicholas P. Constantakis Birth Date: September 3, 1939 DIRECTOR Began serving: February 1998	Principal Occupation: Director or Trustee of the Federated Fund Complex. Other Directorships Held: Director and Chairman of the Audit Committee, Michael Baker Corporation (architecture, engineering and construction services). Previous Position: Partner, Andersen Worldwide SC.
John F. Cunningham Birth Date: March 5, 1943 DIRECTOR Began serving: January 1999	Principal Occupation: Director or Trustee of the Federated Fund Complex. Other Directorships Held: Chairman, President and Chief Executive Officer, Cunningham & Co., Inc. (strategic business consulting); Trustee Associate, Boston College. Previous Positions: Director, Redgate Communications and EMC Corporation (computer storage systems); Chairman of the Board and Chief Executive Officer, Computer Consoles, Inc.; President and Chief Operating Officer, Wang Laboratories; Director, First National Bank of Boston; Director, Apollo Computer, Inc.
Maureen Lally-Green Birth Date: July 5, 1949 DIRECTOR Began serving: May 2009	Principal Occupations: Director or Trustee of the Federated Fund Complex; Director, Office of Church Relations, Diocese of Pittsburgh; Adjunct Professor of Law, Duquesne University School of Law. Other Directorships Held: Director, Auberle; Trustee St. Francis University; Director, Ireland Institute of Pittsburgh; Director, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society, Allegheny County; Director, Carlow University. Previous Position: Pennsylvania Superior Court Judge.

Annual Shareholder Report

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
Peter E. Madden Birth Date: March 16, 1942 DIRECTOR Began serving: October 1991	Principal Occupation: Director or Trustee and Chairman of the Board of the Federated Fund Complex. Other Directorship Held: Board of Overseers, Babson College. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange.
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 DIRECTOR Began serving: January 1999	Principal Occupations: Director or Trustee and Chairman of the Audit Committee of the Federated Fund Complex; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly, Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President DVC Group, Inc. (marketing, communications and technology).
R. James Nicholson Birth Date: February 4, 1938 DIRECTOR Began serving: November 2007	Principal Occupations: Director or Trustee of the Federated Fund Complex; Senior Counsel, Brownstein Hyatt Farber Schrek, P.C.; Former Secretary of the U.S. Dept. of Veterans Affairs; Former U.S. Ambassador to the Holy See; Former Chairman of the Republican National Committee. Other Directorships Held: Director, Horatio Alger Association; Director, The Daniels Fund. Previous Positions: Colonel, U.S. Army Reserve; Partner, Calkins, Kramer, Grimshaw and Harring, P.C.; General Counsel, Colorado Association of Housing and Building; Chairman and CEO, Nicholson Enterprises, Inc. (real estate holding company); Chairman and CEO, Renaissance Homes of Colorado.
Thomas M. O'Neill Birth Date: June 14, 1951 DIRECTOR Began serving: October 2006	Principal Occupations: Director or Trustee of the Federated Fund Complex; Managing Director and Partner, Navigator Management Company, L.P. (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College. Previous Positions: Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); Director, Midway Pacific (lumber).

Annual Shareholder Report

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
John S. Walsh Birth Date: November 28, 1957 DIRECTOR Began serving: January 1999	Principal Occupations: Director or Trustee of the Federated Fund Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Previous Position: Vice President, Walsh & Kelly, Inc.
James F. Will Birth Date: October 12, 1938 DIRECTOR Began serving: April 2006	Principal Occupations: Director or Trustee of the Federated Fund Complex; formerly, Vice Chancellor and President, Saint Vincent College. Other Directorships Held: Trustee, Saint Vincent College; Alleghany Corporation. Previous Positions: Chairman, President and Chief Executive Officer, Armco, Inc.; President and Chief Executive Officer, Cyclops Industries; President and Chief Operating Officer, Kaiser Steel Corporation.

OFFICERS

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years and Previous Position(s)
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Began serving: November 1991	Principal Occupations: Executive Vice President and Secretary of the Federated Fund Complex; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp.
Richard A. Novak Birth Date: December 25, 1963 TREASURER Began serving: January 2006	Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. Previous Positions: Controller of Federated Investors, Inc.; Vice President, Finance of Federated Services Company; held various financial management positions within The Mercy Hospital of Pittsburgh; Auditor, Arthur Andersen & Co.
Richard B. Fisher Birth Date: May 17, 1923 VICE CHAIRMAN Began serving: August 2002	Principal Occupations: Vice Chairman or Vice President of some of the Funds in the Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp. Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice President, Federated Investors, Inc.; Director and Chief Executive Officer, Federated Securities Corp.

Annual Shareholder Report

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years and Previous Position(s)
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Began serving: August 2004	Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Complex; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of its subsidiaries. Mr. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin.
Robert J. Ostrowski Birth Date: April 26, 1963 CHIEF INVESTMENT OFFICER Began serving: May 2004	Principal Occupations: Robert J. Ostrowski joined Federated in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. He has been a Senior Vice President of the Fund's Adviser since 1997. Mr. Ostrowski is a Chartered Financial Analyst. He received his M.S. in Industrial Administration from Carnegie Mellon University.
Mary Jo Ochson Birth Date: September 12, 1953 CHIEF INVESTMENT OFFICER Began serving: May 2004	Principal Occupations: Mary Jo Ochson was named Chief Investment Officer of tax-exempt, fixed-income products in 2004. She joined Federated in 1982 and has been a Senior Portfolio Manager and a Senior Vice President of the Fund's Adviser since 1996. Ms. Ochson is a Chartered Financial Analyst and received her M.B.A. in Finance from the University of Pittsburgh.
Joseph M. Balestrino Birth Date: November 3, 1954 VICE PRESIDENT Began serving: November 1998	Principal Occupations: Joseph M. Balestrino is Vice President of the Corporation. Mr. Balestrino joined Federated in 1986 and has been a Senior Portfolio Manager and Senior Vice President of the Fund's Adviser since 1998. He was a Portfolio Manager and a Vice President of the Fund's Adviser from 1995 to 1998. Mr. Balestrino served as a Portfolio Manager and an Assistant Vice President of the Adviser from 1993 to 1995. Mr. Balestrino is a Chartered Financial Analyst and received his Master's Degree in Urban and Regional Planning from the University of Pittsburgh.
Jeff A. Kozemchak Birth Date: January 15, 1960 VICE PRESIDENT Began serving: November 1998	Principal Occupations: Jeff A. Kozemchak has been the Fund's Portfolio Manager since October 2000. Jeff A. Kozemchak is Vice President of the Corporation. Mr. Kozemchak joined Federated in 1987 and has been a Senior Portfolio Manager since 1996 and a Senior Vice President of the Fund's Adviser since 1999. He was a Portfolio Manager until 1996 and a Vice President of the Fund's Adviser from 1993 to 1998. Mr. Kozemchak is a Chartered Financial Analyst and received his M.S. in Industrial Administration from Carnegie Mellon University in 1987.

Annual Shareholder Report

Evaluation and Approval of Advisory Contract - May 2009

Federated Municipal Ultrashort Fund (the “Fund”)

The Fund's Board reviewed the Fund's investment advisory contract at meetings held in May 2009. The Board's decision regarding the contract reflects the exercise of its business judgment on whether to continue the existing arrangements.

In this connection, the Federated funds' Board had previously appointed a Senior Officer, whose duties include specified responsibilities relating to the process by which advisory fees are to be charged to a Federated fund. The Senior Officer has the authority to retain consultants, experts, or staff as may be reasonably necessary to assist in the performance of his duties, reports directly to the Board, and may be terminated only with the approval of a majority of the independent members of the Board. The Senior Officer prepared and furnished to the Board an independent, written evaluation that covered topics discussed below. The Board considered that evaluation, along with other information, in deciding to approve the advisory contract.

During its review of the contract, the Board considered compensation and benefits received by the Adviser. This included the fees received for services provided to the Fund by other entities in the Federated organization and research services received by the Adviser from brokers that execute Federated fund trades, as well as advisory fees. The Board is also familiar with and considered judicial decisions concerning allegedly excessive investment advisory fees, which have indicated that the following factors may be relevant to an Adviser's fiduciary duty with respect to its receipt of compensation from a fund: the nature and quality of the services provided by the Adviser, including the performance of the fund; the Adviser's cost of providing the services; the extent to which the Adviser may realize “economies of scale” as a fund grows larger; any indirect benefits that may accrue to the Adviser and its affiliates as a result of the Adviser's relationship with a fund; performance and expenses of comparable funds; and the extent to which the independent Board members are fully informed about all facts the Board deems relevant bearing on the Adviser's services and fees. The Board further considered management fees (including any components thereof) charged to institutional and other clients of the Adviser for what might be viewed as like services, and the cost to the Adviser and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit and profit margins of the Adviser and its affiliates for supplying such services. The Board was aware of these factors and was guided by them in its review of the Fund's advisory contract to the extent it considered them to be appropriate and relevant, as discussed further below.

Annual Shareholder Report

The Board considered and weighed these circumstances in light of its substantial accumulated experience in governing the Fund and working with Federated on matters relating to the Federated funds, and was assisted in its deliberations by independent legal counsel. Throughout the year, the Board has requested and received substantial and detailed information about the Fund and the Federated organization that was in addition to the extensive materials that comprise and accompany the Senior Officer's evaluation. Federated provided much of this information at each regular meeting of the Board, and furnished additional reports in connection with the particular meeting at which the Board's formal review of the advisory contract occurred. Between regularly scheduled meetings, the Board also received information on particular matters as the need arose. Thus, the Board's consideration of the advisory contract included review of the Senior Officer's evaluation, accompanying data and additional reports covering such matters as: the Adviser's investment philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund's short- and long-term performance (in absolute terms, both on a gross basis and net of expenses, as well as in relationship to its particular investment program and certain competitor or “peer group” funds and/or other benchmarks, as appropriate), and comments on the reasons for performance; the Fund's investment objectives; the Fund's expenses (including the advisory fee itself and the overall expense structure of the Fund, both in absolute terms and relative to similar and/or competing funds, with due regard for contractual or voluntary expense limitations); the use and allocation of brokerage commissions derived from trading the Fund's portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders and their relative sophistication; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund's relationship to the Federated family of funds which include a comprehensive array of funds with different investment objectives, policies and strategies which are available for exchange without the incurrence of additional sales charges; compliance and audit reports concerning the Federated funds and the Federated companies that service them (including communications from regulatory agencies), as well as Federated's responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated funds and/or Federated are responding to them. The Board's evaluation process is evolutionary. The criteria considered and the emphasis placed on relevant criteria change in recognition of changing circumstances in the mutual fund marketplace. With respect to the Fund's performance and expenses in particular, the Board has found the use of comparisons to other mutual funds with comparable investment programs to be particularly useful, given the high degree of competition in the mutual fund business. The Board focused on comparisons Annual Shareholder Report

with other similar mutual funds more heavily than non-mutual fund products or services because it is believed that they are more relevant. For example, other mutual funds are the products most like the Fund, they are readily available to Fund shareholders as alternative investment vehicles, and they are the type of investment vehicle in fact chosen and maintained by the Fund's investors. The range of their fees and expenses therefore appears to be a generally reliable indication of what consumers have found to be reasonable in the precise marketplace in which the Fund competes. The Fund's ability to deliver competitive performance when compared to its peer group was a useful indicator of how the Adviser is executing the Fund's investment program, which in turn assisted the Board in reaching a conclusion that the nature, extent, and quality of the Adviser's investment management services were such as to warrant continuation of the advisory contract. In this regard, the Senior Officer has reviewed Federated's fees for providing advisory services to products outside the Federated family of funds (e.g., institutional and separate accounts). He concluded that mutual funds and institutional accounts are inherently different products. Those differences include, but are not limited to, different types of targeted investors; being subject to different laws and regulations; different legal structures; different average account sizes; different associated costs; different portfolio management techniques made necessary by different cash flows; and portfolio manager time spent in review of securities pricing. The Senior Officer did not consider these fee schedules to be determinative in judging the appropriateness of mutual fund advisory contracts.

The Senior Officer reviewed reports compiled by Federated, using data supplied by independent fund ranking organizations, regarding the performance of, and fees charged by, other mutual funds, noting his view that comparisons to fund peer groups are highly important in judging the reasonableness of proposed fees.

For the periods covered by the report, the Fund's performance for the three-year and five-year period was above the median of the relevant peer group, and the Fund's performance was at the median of the relevant peer group for the one-year period.

The Board also received financial information about Federated, including reports on the compensation and benefits Federated derived from its relationships with the Federated funds. These reports covered not only the fees under the advisory contracts, but also fees received by Federated's subsidiaries for providing other services to the Federated funds under separate contracts (e.g., for serving as the Federated funds' administrator). The reports also discussed any indirect benefit Federated may derive from its receipt of research services from brokers who execute Federated fund trades. In addition, the Board considered the fact that, in order for a fund to be competitive in the marketplace, Federated and its affiliates frequently waived fees and/or Annual Shareholder Report

reimbursed expenses and have disclosed to fund investors and/or indicated to the Board their intention to do so in the future, where appropriate. Moreover, the Board receives regular reports regarding the institution or elimination of these voluntary waivers.

Federated furnished reports, requested by the Senior Officer, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses on a fund-by-fund basis, using allocation methodologies specified by the Senior Officer. The Senior Officer noted that, although they may apply consistent allocation processes, the inherent difficulties in allocating costs (and the unavoidable arbitrary aspects of that exercise) and the lack of consensus on how to allocate those costs may render such allocation reports unreliable. The allocation reports were considered in the analysis by the Board but were determined to be of limited use.

The Board and the Senior Officer also reviewed a report compiled by Federated comparing profitability information for Federated to other publicly held fund management companies. In this regard, the Senior Officer noted the limited availability of such information, but nonetheless concluded that Federated's profit margins did not appear to be excessive and the Board agreed.

The Senior Officer's evaluation also discussed the notion of possible realization of “economies of scale” as a fund grows larger. The Board considered in this regard that the Adviser has made significant and long-term investments in areas that support all of the Federated funds, such as personnel and processes for the portfolio management, compliance, and risk management functions; and systems technology; and that the benefits of these efforts (as well as any economies, should they exist) were likely to be enjoyed by the fund complex as a whole. Finally, the Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which (as discussed in the Senior Officer's evaluation) is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fee as the fund attains a certain size. The Senior Officer did not recommend institution of breakpoints in pricing Federated's fund advisory services at this time.

It was noted in the materials for the Board meeting that for the period covered by the report, the Fund's investment advisory fee, after waivers and expense reimbursements, if any, was below the median of the relevant peer group. The Board reviewed the fees and other expenses of the Fund with the Adviser and was satisfied that the overall expense structure of the Fund remained competitive.

The Senior Officer's evaluation noted his belief that the information and observations contained in his evaluation supported a finding that the proposed management fees are reasonable, and that Federated appeared to provide appropriate administrative services to the Fund for the fees paid. Under these Annual Shareholder Report

circumstances, no changes were recommended to, and no objection was raised to, the continuation of the Fund's advisory. The Board concluded that the nature, quality and scope of services provided the Fund by the Adviser and its affiliates were satisfactory.

In its decision to continue an existing investment advisory contract, the Board was mindful of the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew an advisory contract. In particular, the Board recognized that many shareholders have invested in the Fund on the strength of the Adviser's industry standing and reputation and with the expectation that the Adviser will have a continuing role in providing advisory services to the Fund. Thus, the Board's approval of the advisory contract reflected the fact that it is the shareholders who have effectively selected the Adviser by virtue of having invested in the Fund.

The Board based its decision to approve the advisory contract on the totality of the circumstances and relevant factors and with a view to past and future long-term considerations. Not all of the factors and considerations identified above were necessarily relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were relevant, the Board's decision to approve the contract reflects its determination that Federated's performance and actions provided a satisfactory basis to support the decision to continue the existing arrangements.

Annual Shareholder Report

Voting Proxies on Fund Portfolio Securities

A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available from Federated's Web site at FederatedInvestors.com. To access this information from the “Products” section of the Web site, click on the “Prospectuses and Regulatory Reports” link under “Related Information,” then select the appropriate link opposite the name of the Fund; or select the name of the Fund and from the Fund's page, click on the “Prospectuses and Regulatory Reports” link. Form N-PX filings are also available at the SEC's Web site at www.sec.gov.

Quarterly Portfolio Schedule

The Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on “Form N-Q.” These filings are available on the SEC's Web site at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) You may also access this information from the “Products” section of Federated's Web site at FederatedInvestors.com by clicking on “Portfolio Holdings” under “Related Information,” then selecting the appropriate link opposite the name of the Fund; or select the name of the Fund and from the Fund's page, click on the “Portfolio Holdings” link.

Annual Shareholder Report

Mutual funds are not bank deposits or obligations, are not guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.

This Report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund's Prospectus, which contains facts concerning its objective and policies, management fees, expenses and other information.

Federated Municipal Ultrashort Fund

Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561

Federated Securities Corp., Distributor

Cusip 31417P866

29303 (11/09)

Federated is a registered mark of Federated Investors, Inc.
2009 Federated Investors, Inc.

Federated Municipal Ultrashort Fund

A Portfolio of Federated Fixed Income Securities, Inc.

ANNUAL SHAREHOLDER REPORT

September 30, 2009

Institutional Shares

Financial Highlights - Institutional Shares

(For a Share Outstanding Throughout Each Period)¹

Year Ended September 30	2009	2008	2007	2006	2005
Net Asset Value, Beginning of Period	$9.92	$10.02	$10.05	$10.05	$10.10
Income From Investment Operations:
Net investment income	0.26	0.37	0.37	0.33	0.24
Net realized and unrealized gain (loss) on investments	0.10	(0.10)	(0.03)	(0.00)²	(0.05)
TOTAL FROM INVESTMENT OPERATIONS	0.36	0.27	0.34	0.33	0.19
Less Distributions:
Distributions from net investment income	(0.26)	(0.37)	(0.37)	(0.33)	(0.24)
Net Asset Value, End of Period	$10.02	$9.92	$10.02	$10.05	$10.05
Total Return³	3.67%	2.73%	3.47%	3.36%	1.88%
Ratios to Average Net Assets:
Net expenses	0.35%⁴	0.35%⁴	0.35%	0.35%	0.35%
Net investment income	2.25%	3.64%	3.71%	3.26%	2.31%
Expense waiver/reimbursement⁵	0.39%	0.40%	0.45%	0.44%	0.39%
Supplemental Data:
Net assets, end of period (000 omitted)	$875,235	$194,720	$144,092	$159,072	$282,472
Portfolio turnover	44%	123%	52%	46%	55%

1	On September 26, 2005, the Fund effected a one for five reverse share split. As a result of the reverse share split: (1) the number of outstanding Shares of the Fund decreased by a factor of five; and (2) since the Fund's total number of Shares outstanding decreased, the net asset value per Fund Share (NAV/Share) increased. The reverse share split did not affect the value of the Fund's net assets or each shareholder's proportional ownership interest in those assets. Per share data has been restated, where applicable.
2	Represents less than $0.01.
3	Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
4	The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.35% and 0.35% for the years ended September 30, 2009 and 2008, respectively, after taking into account these expense reductions.
5	This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

Shareholder Expense Example (unaudited)

As a shareholder of the Fund, you incur ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or shareholder services fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2009 to September 30, 2009.

ACTUAL EXPENSES

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

Annual Shareholder Report

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

	Beginning Account Value 4/1/2009	Ending Account Value 9/30/2009	Expenses Paid During Period¹
Actual	$1,000	$1,014.30	$1.77
Hypothetical (assuming a 5% return before expenses)	$1,000	$1,023.31	$1.78

1	Expenses are equal to the Fund's annualized net expense ratio of 0.35%, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half-year period).

Annual Shareholder Report

Management's Discussion of Fund
Performance (unaudited)

The Fund's total return, based on net asset value, for the 12-month reporting period was 3.67% for the Institutional Shares.¹ The total return of the Barclays Capital 1-Year Municipal Bond Index (BC1MB),² the Fund's benchmark index, was 4.70% and the total return of the Lipper Tax-Exempt Money Market Funds Average (LTEMMFA),³ a performance benchmark for the Fund, was 0.51% during the same period. The Fund's total return for the most recently completed fiscal year reflected actual cash flows, transaction costs and other expenses that were not reflected in the total return of the BC1MB.

1	The Fund offers another class of shares, Class A Shares. The Fund's total return, based on net asset value, for the 12-month reporting period was 3.21% for the A Shares. A separate Annual Shareholder Report has been prepared for the Fund's Class A Shares and it is available free of charge by visiting FederatedInvestors.com or calling 1-800-341-7400.
2	The BC1MB is the one-year (1-2) component of the Barclays Capital Municipal Bond Index, an unmanaged market value-weighted index for the tax-exempt bond market. To be included in the index, bonds must have a minimum credit rating of Baa, an outstanding par value of at least $7 million and be issued as part of a transaction of at least $75 million. The bonds must be fixed rate, have an issue date after December 31, 1990 and must be at least one but not more than two years from their maturity date. The BC1MB includes both zero coupon bonds and bonds subject to the alternative minimum tax. The BC1MB is not adjusted to reflect sales charges, expenses and other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund's performance. The index is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
3	Lipper figures represent the average of the total returns reported by all the mutual funds designated by Lipper Inc. as falling into the respective categories indicated. They do not reflect sales charges. It is not possible to invest directly in an average.
4	Duration is a measure of a security's price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations.
5	Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices.

Annual Shareholder Report

The Fund's 3.67% total return for the Institutional Shares for the reporting period consisted of 2.66% of tax-exempt dividend income and 1.01% of price appreciation as the net asset value of the Fund increased by 10 cents to $10.02 during the reporting period.⁶

MARKET OVERVIEW

During the 12-month reporting period, the economy continued to contract, although the pace of contraction slowed. Economic data at the end of the reporting period suggested that the pace of economic contraction was bottoming. Household spending showed signs of stabilizing but remained constrained by ongoing job losses, sluggish income growth, lower housing wealth and tight credit. Pressures in the short-term bank funding markets eased, as evidenced by declines in the London Interbank Offered Rate and tentative signs of increased liquidity. Business and household confidence also picked up over the period. The Federal Reserve (the “Fed”) reduced the federal funds target rate (FFTR) from 2.00% to a range between 0.0% and 0.25%, while maintaining its bias to a downside risk to growth. Additionally, the Fed committed itself to employ all available tools to promote economic recovery and signaled that economic conditions warrant maintaining rates at these low levels for an extended period of time. The Fed also increased the size of its balance sheet through the increased purchase of agency mortgage-backed securities, agency debt and Treasury securities (known as quantitative easing) and launched the Term Asset-Backed Securities Loan Facility in an attempt to facilitate the extension of credit to households and small businesses.

Annual Shareholder Report

Investors' flight to quality, tax-exempt, municipal debt and heightened demand for assets that historically had less risk led to a trend of appreciably lower interest rates and an environment in which tax-exempt municipal credit spreads continued to widen in the first several months of the reporting period. This meant that the yield difference increased between AAA-rated (or unrated comparable) tax-exempt municipal bonds and bonds of lower credit quality and similar maturity. However, financial markets began to ease in the second half of the reporting period. As a result, tax-exempt municipal credit spreads began to tighten in the second half of the reporting period as risk-taking and the demand for riskier assets improved. Long-term interest rates (using the 10-year Treasury rate) peaked at 4.07% in October 2008, and declined to a low of 2.05% in December 2008, while ending the reporting period at 3.31%. Fed activity, liquidity concerns and investor demands for shorter maturity debt resulted in a steepening of the tax-exempt municipal yield curve with long-term interest rates declining less than short-term interest rates (that is, while securities provided higher incremental income or yield as maturities became longer, the amount of the increase in incremental income was steepened). Congress passed the American Recovery and Reinvestment Act during the period which included a $53.6 billion state fiscal stabilization fund targeted at providing fiscal stimulus for education and infrastructure spending and Medicare expenses. The quantity of the federal government's fiscal assistance to state and local governments had not been seen since the 1930s and was intended to provide relief for the economic driven stresses that impacted regional growth throughout the United States.

The two-year Treasury note yield, reflecting this volatility at the end of the reporting period and the cuts in the FFTR, moved from 1.96% in October 2008 to 0.95% at period end. The AAA-rated, two-year, tax-exempt municipal bond yield reacted with less daily volatility even though yields moved from 2.48% in October 2008 to 0.82% at period end. As Treasury note yields declined 101 basis points during the reporting period and tax-exempt municipal yields declined over 166 basis points, short-term, tax-exempt, high-grade municipal bonds outperformed Treasury notes as municipal bond prices rose more due to the significant decline in municipal yields.

Annual Shareholder Report

DURATION

MATURITY/YIELD CURVE

The BC1MB does not contain any bonds with less than one year remaining to maturity nor does it include any VRDNs or ARS. The Fund's portfolio weighting in liquid VRDNs and ARS of 50% to 60% slightly detracted from Fund performance relative to BC1MB, as these instruments slightly underperformed the positive price performance and total return of bonds contained in the BC1MB. Many of these instruments provided above-average tax-exempt income but none of the price gain of the fixed-rate bonds in the BC1MB.⁶The Fund also had significant weightings in bonds maturing from one to two years and two to four years and this decision helped Fund performance.

6	Income may be subject to the federal alternative minimum tax, as well as state and local taxes.

Annual Shareholder Report

SECTOR ALLOCATION

During the 12-month reporting period, as compared to the BC1MB, the Fund allocated more of its portfolio to securities backed by hospitals, local general obligations, public power, electric and gas and industrial development/pollution control projects. The Fund allocated less of the portfolio to pre-refunded bonds than the BC1MB. These allocations helped the Fund's performance due to the net decline in credit spreads within several of the overweight sectors and the demand by investors for incremental yield in the latter half of the reporting period. Investors also preferred the general obligation pledge of state and local issuers and the Fund's allocations to these sectors helped performance. As the credit markets recovered, pre-refunded bonds lagged the overall index return, so the Fund's underweight allocation helped performance.

CREDIT QUALITY

The risk-taking environment shifted over the reporting period from one of risk aversion by investors to a more constructive investment tone for bonds rated AA, A and BBB (or unrated bonds of comparable quality). In the last six months of the reporting period, spreads began to tighten for bonds rated AA, A and BBB relative to AAA rated bonds as investors sensed that they had become undervalued. As a result, the Fund's emphasis on mid-quality issues for the fixed coupon portion of the portfolio helped Fund performance over the period. For the variable rate portion of the portfolio, the Fund's income and total return was helped by VRDNs with credit/liquidity enhancement from split-rated banks (A-2, P-2, and/or F-2 rated). Overall, the shift to a more constructive credit view by market participants helped the Fund's performance over the period.

Annual Shareholder Report

GROWTH OF A $10,000 INVESTMENT - Institutional Shares

The graph below illustrates the hypothetical investment of $10,000¹ in Federated Municipal Ultrashort Fund (Institutional Shares) (the “Fund”) from October 24, 2000 (start of performance) to September 30, 2009, compared to the Barclays Capital 1-Year Municipal Bond Index (BC1MB)² and the Lipper Tax-Exempt Money Market Funds Classification Average (LTEMMFCA).²

Average Annual Total Returns for the Period Ended 9/30/2009
1 Year	3.67%
5 Years	3.02%
Start of Performance (10/24/2000)	2.95%

Annual Shareholder Report

1Represents a hypothetical investment of $10,000. The Fund's performance assumes the reinvestment of all dividends and distributions. The BC1MB and the LTEMMFCA have been adjusted to reflect reinvestment of dividends on securities in the index and the average.

The BC1MB is the one-year (1-2) component of the Barclays Capital Municipal Bond Index. The Barclays Capital Municipal Bond Index is an unmanaged index of tax-exempt municipal bonds issued after January 1, 1991, with a minimum credit rating of at least Baa3 or BBB-, which have been issued as part of a deal of at least $75 million, have a minimum maturity value of at least $7 million, and mature in at least one, but not more than two, years. As of January 1996, the index also includes zero coupon bonds and bonds subject to the alternative minimum tax (AMT). The BC1MB is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund's performance. The BC1MB is unmanaged, and unlike the Fund, is not affected by cash flows. It is not possible to invest directly in the BC1MB. Lipper figures represent the average of the total returns reported by all the mutual funds designated by Lipper Inc. as falling into the respective categories indicated. They do not reflect sales charges. The Fund is not a money market fund and is not subject to the special regulatory requirements (including maturity and credit quality constraints) designed to enable money market funds to maintain a stable share price.

Annual Shareholder Report

Portfolio of Investments Summary Table (unaudited)

At September 30, 2009, the Fund's sector composition¹ was as follows:

Sector Composition	Percentage of Total Net Assets
Hospital	19.0%
General Obligation — Local	15.3%
General Obligation — State	14.9%
Education	9.5%
Public Power	7.7%
Special Tax	4.3%
Industrial Development Bond/Pollution Control Revenue	4.2%
Senior Care	4.1%
Transportation	3.7%
Electric and Gas	2.8%
Other²	11.9%
Other Assets and Liabilities — Net³	2.6%
TOTAL	100.0%

1	Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying obligor, as determined by the Fund's Adviser. For securities that have been enhanced by a third-party, including bond insurers and banks, sector classifications are based upon the economic sector and/or revenue source of the underlying obligor as determined by the Fund's Adviser. Pre-refunded securities are those whose debt service is paid from escrowed assets, usually U.S. government securities.
2	For purposes of this table, sector classifications constitute 85.5% of the Fund's total net assets. Remaining sectors have been aggregated under the designation “Other.”
3	Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

Annual Shareholder Report

Portfolio of Investments

September 30, 2009


Principal Amount		Value
	Municipal Bonds – 38.4%
	Alabama – 1.1%
$2,035,000	Alabama Special Care Facilities Financing Authority of Birmingham, Revenue Bonds (Series 2005A), 5.00% (Ascension Health Subordinate Credit Group), 6/1/2012	2,191,329
1,510,000	Alabama Special Care Facilities Financing Authority of Birmingham, Revenue Bonds (Series 2005A), 5.00% (Ascension Health Subordinate Credit Group), 6/1/2012	1,625,998
24,750,000	Health Care Authority for Baptist Health, AL, Affiliate of UAB Health (Montgomery)/(Series B) ARS (Assured Guaranty Corp. INS), 1.500%, 10/2/2009	24,750,000
635,000	Health Care Authority for Baptist Health, AL, Revenue Bonds (Series 2006D), 5.00%, 11/15/2009	636,441
1,300,000	Huntsville, AL, UT GO Bonds (Series 2009A), 5.00%, 9/1/2011	1,403,610
1,500,000	Huntsville, AL, UT GO Bonds (Series 2009B), 3.00%, 9/1/2011	1,562,520
4,000,000	Mobile, AL IDB, PCRBs (Series 2007A), 4.75% TOBs (Alabama Power Co.) Mandatory Tender 3/19/2012	4,243,440
500,000	Montgomery, AL Medical Clinic Board, Health Care Facility Revenue Bonds (Series 2006), 5.00% (Jackson Hospital & Clinic, Inc.), 3/1/2010	502,475
	TOTAL	36,915,813
	Arizona – 0.5%
2,000,000	Arizona Health Facilities Authority, Revenue Bonds (Series 2008D), 5.00% (Banner Health), 1/1/2010	2,018,200
2,000,000	Arizona Health Facilities Authority, Revenue Bonds (Series 2008D), 5.00% (Banner Health), 1/1/2011	2,078,120
1,000,000	Arizona Transportation Board, Transportation Excise Tax Revenue Bonds (Series 2009), 5.00% (Maricopa County, AZ Regional Area Road Fund), 7/1/2011	1,070,580
1,840,000	Arizona Transportation Board, Transportation Excise Tax Revenue Bonds (Series 2009), 5.00% (Maricopa County, AZ Regional Area Road Fund), 7/1/2012	2,026,631
1,000,000	Arizona Water Infrastructure Finance Authority, Water Quality Revenue Bonds (Series 2009A), 4.00%, 10/1/2011	1,064,690
1,000,000	Arizona Water Infrastructure Finance Authority, Water Quality Revenue Bonds (Series 2009A), 4.00%, 10/1/2012	1,088,370
2,135,000	Arizona Water Infrastructure Finance Authority, Water Quality Revenue Refunding Bonds (Series 2009A), 4.00%, 10/1/2012	2,323,670
1,100,000	Arizona Water Infrastructure Finance Authority, Water Quality Revenue Refunding Bonds (Series 2009A), 4.00%, 10/1/2011	1,171,159

Annual Shareholder Report


$2,500,000		Maricopa County, AZ, IDA, Health Facility Revenue Bonds (Series 2009A), 5.00% (Catholic Healthcare West), 7/1/2012	2,635,125
3,000,000	¹	Yavapai County, AZ IDA Solid Waste Disposal, 4.00% TOBs (Waste Management, Inc.), Mandatory Tender 6/1/2010	3,025,980
		TOTAL	18,502,525
		Arkansas – 0.0%
775,000		Jefferson County, AR, PCR Refunding Bonds (Series 2006), 4.60% (Entergy Arkansas, Inc.), 10/1/2017	785,982
		California – 3.9%
1,000,000		California Health Facilities Financing Authority, 5.00% (Adventist Health System/West), 3/1/2011	1,028,470
1,500,000		California Health Facilities Financing Authority, 5.00% (Adventist Health System/West), 3/1/2012	1,560,570
1,060,000		California Health Facilities Financing Authority, Insured Revenue Bonds (Series 2006), 4.25% (California-Nevada Methodist Homes)/(GTD by California Mortgage Insurance), 7/1/2011	1,061,272
7,000,000		California Health Facilities Financing Authority, Refunding Revenue Bonds, 3.45% TOBs (Stanford Hospital & Clinics), Mandatory Tender 6/15/2011	7,215,600
1,000,000		California Health Facilities Financing Authority, Revenue Bonds (Series 2008A), 5.00% (Sutter Health), 8/15/2010	1,027,160
1,145,000		California Health Facilities Financing Authority, Revenue Bonds (Series 2008A), 5.00% (Sutter Health), 8/15/2011	1,198,586
2,650,000		California Health Facilities Financing Authority, Revenue Bonds (Series 2009B), 4.00% (St. Joseph Health System), 7/1/2012	2,757,192
3,865,000		California Health Facilities Financing Authority, Revenue Bonds (Series 2009B), 4.50% (St. Joseph Health System), 7/1/2013	4,108,727
3,800,000		California Health Facilities Financing Authority, Revenue Bonds (Series 2009B), 5.00% (St. Joseph Health System), 7/1/2014	4,141,164
6,000,000		California Health Facilities Financing Authority, Variable Rate Health Facility Revenue Bonds (Series 2009C), 5.00% TOBs (Catholic Healthcare West), Mandatory Tender 7/2/2012	6,372,060
10,000,000		California Health Facilities Financing Authority, Variable Rate Refunding Revenue Bonds (Series 2009C), 5.00% TOBs (St. Joseph Health System), Mandatory Tender 10/16/2014	10,762,200
6,500,000		California Infrastructure & Economic Development Bank, Refunding Revenue Bonds (Series 2007 A-4), 1.65% TOBs (J. Paul Getty Trust), Mandatory Tender 4/1/2011	6,533,735
5,000,000		California Infrastructure & Economic Development Bank, Revenue Bonds (Series 2008A), 5.00% (California Independent System Operator Corp.), 2/1/2010	5,059,850
3,000,000	¹	California Municipal Finance Authority, Solid Waste Disposal Revenue Bonds (Series 2009A), 4.90% TOBs (Waste Management, Inc.), Mandatory Tender 2/1/2010	3,014,370

Annual Shareholder Report


$11,000,000	California PCFA, Environmental Improvement Refunding Revenue Bonds (Series 2009), 2.60% TOBs (BP West Coast Products LLC)/(GTD by BP PLC), Mandatory Tender 9/2/2014	11,103,510
1,000,000	California PCFA, Solid Waste Disposal Refunding Revenue Bonds (Series 1998B), 4.00% TOBs (Waste Management, Inc.), Mandatory Tender 6/1/2010	989,050
40,000,000	California State, (Series 2009 A-1), 3.00% RANs, 5/25/2010	40,491,200
1,000,000	California State, Economic Recovery Bonds (Series 2008A), 5.00% (California State Fiscal Recovery Fund), 1/1/2011	1,046,190
4,375,000	California State, Economic Recovery UT GO Bonds (Series 2004A), 5.25% (California State Fiscal Recovery Fund)/(National Public Finance Guarantee Corporation INS), 1/1/2011	4,590,644
8,000,000	Corona-Norco, CA USD, UT GO BANs, 3.50% BANs, 2/1/2010	8,048,640
1,000,000	Golden State Tobacco Securitization Corp., CA, Tobacco Settlement Asset-Backed Bonds (Series 2007A-1), 5.00%, 6/1/2011	1,035,270
4,200,000	San Bernardino County, CA Transportation Authority, Sales Tax Revenue Notes (Series 2009A), 4.00%, 5/1/2012	4,438,644
2,000,000	San Diego, CA Public Facilities Authority, Senior Sewer Revenue Refunding Bonds (Series 2009B), 5.00%, 5/15/2012	2,181,280
2,755,000	San Joaquin County, CA Transportation Authority, Measure K Senior Sales Tax Revenue Notes, Series 2008, 5.00%, 4/1/2011	2,891,235
	TOTAL	132,656,619
	Colorado – 0.4%
140,000	Beacon Point, CO Metropolitan District, Revenue Bonds (Series 2005B), 4.375% (Compass Bank, Birmingham LOC)/ (Original Issue Yield: 4.50%), 12/1/2015	136,944
500,000	Colorado Health Facilities Authority, Revenue Bonds (Series 2005), 4.50% (Covenant Retirement Communities, Inc.), 12/1/2009	500,690
2,500,000	Colorado Health Facilities Authority, Revenue Bonds (Series 2008C-2), 3.75% TOBs (Catholic Health Initiatives), Mandatory Tender 11/10/2009	2,505,700
1,000,000	Colorado Health Facilities Authority, Revenue Bonds (Series 2008C-6), 3.95% TOBs (Catholic Health Initiatives), Mandatory Tender 11/10/2010	1,022,830
6,840,000	Colorado State Higher Education Capital Construction Lease Purchase Financing Program, COP (Series 2008), 5.00%, 11/1/2009	6,865,581
3,105,000	Colorado State Higher Education Capital Construction Lease Purchase Financing Program, COP (Series 2008), 5.00%, 11/1/2010	3,232,212
	TOTAL	14,263,957
	Connecticut – 0.2%
5,000,000	Connecticut Development Authority, PCR Revenue Bonds, 5.25% TOBs (Connecticut Light & Power Co.), Mandatory Tender 4/1/2010	5,105,300

Annual Shareholder Report


$1,000,000		Connecticut State Development Authority, PCR Refunding Bonds (Series 1996), 5.75% TOBs (United Illuminating Co.), Mandatory Tender 2/1/2012	1,055,430
		TOTAL	6,160,730
		Delaware – 0.1%
3,000,000		University of Delaware, Variable Rate Revenue Bonds (Series 2009A), 2.00% TOBs, Mandatory Tender 6/1/2011	3,026,790
		District of Columbia – 0.2%
2,550,000		District of Columbia Revenue Bonds, University Refunding Revenue Bonds (Series 2009A), 5.00% (Georgetown University), 4/1/2012	2,725,848
3,000,000		District of Columbia Revenue Bonds, University Refunding Revenue Bonds (Series 2009A), 5.00% (Georgetown University), 4/1/2013	3,256,650
500,000		Washington Metropolitan Area Transit Authority, Gross Revenue Transit Bonds (Series 2009A), 5.00%, 7/1/2010	515,610
1,000,000		Washington Metropolitan Area Transit Authority, Gross Revenue Transit Bonds (Series 2009A), 5.00%, 7/1/2011	1,066,690
		TOTAL	7,564,798
		Florida – 2.4%
5,800,000		Broward County, FL, UT GO Bonds, 5.00%, 1/1/2011	6,104,500
54,610	³	Capital Trust Agency, FL, Housing Revenue Notes, 5.95% (Atlantic Housing Foundation Properties), 1/15/2039	27,308
25,000,000		Citizens Property Insurance Corp. FL, Senior Secured Bonds (Series 2009A-2), 4.50%, 6/1/2010	25,335,000
300,000		East Homestead, FL Community Development District, Special Assessment Revenue Bonds (Series 2006B), 5.00%, 5/1/2011	223,062
8,000,000		Escambia County, FL, (First Series), 1.75% TOBs (Gulf Power Co.), Mandatory Tender 4/21/2010	8,010,960
3,215,000		Florida State Board of Education, UT GO Capital Outlay Bonds (Series 2006E), 5.00%, 6/1/2010	3,314,279
3,375,000		Florida State Board of Education, UT GO Capital Outlay Bonds (Series 2006E), 5.00%, 6/1/2011	3,611,317
2,410,000		Florida State Department of Environmental Protection, Refunding Revenue Bonds (Series 2008A), 5.00% (Assured Guaranty Corp. INS), 7/1/2011	2,561,589
6,105,000		Florida State Turnpike Authority, Refunding Turnpike Revenue Bonds (Series 2008A), 5.00%, 7/1/2011	6,523,742
2,275,000		JEA, FL Electric System, Electric System Subordinated Revenue Bonds (Series 2009B), 5.00%, 10/1/2011	2,425,560
5,000,000		JEA, FL Electric System, Subordinated Revenue Bonds (Series 2009D), 5.00%, 10/1/2011	5,346,350
7,000,000		JEA, FL Electric System, Subordinated Revenue Bonds (Series 2009D), 5.00%, 10/1/2012	7,644,420

Annual Shareholder Report


$2,000,000	Miami-Dade County, FL IDA, Solid Waste Disposal Revenue Bonds (Series 2006), 2.75% TOBs (Waste Management, Inc.), Mandatory Tender 4/1/2010	1,999,940
1,650,000	Pasco County, FL School Board, (Series B) ARS (AMBAC INS), 0.700%, 10/2/2009	1,650,000
5,675,000	St. Petersburg, FL HFA, (Series B) ARS (All Children's Hospital)/ (AMBAC INS), 1.490%, 10/2/2009	5,675,000
	TOTAL	80,453,027
	Georgia – 2.2%
2,250,000	Atlanta, GA Water & Wastewater, Revenue Bonds (Series 2009A), 4.00%, 11/1/2011	2,339,505
3,000,000	Atlanta, GA Water & Wastewater, Revenue Bonds (Series 2009A), 4.00%, 11/1/2012	3,142,650
3,000,000	Burke County, GA Development Authority, PCRBs (Fifth Series 1994), 4.375% TOBs (Georgia Power Co.), Mandatory Tender 4/1/2010	3,043,050
4,100,000	Burke County, GA Development Authority, PCRBs (First Series 2008), 4.95% TOBs (Georgia Power Co.), Mandatory Tender 4/1/2011	4,275,398
2,100,000	Burke County, GA Development Authority, PCRBs (Series 2007E), 4.75% TOBs (Oglethorpe Power Corp.)/(National Public Finance Guarantee Corporation INS), Mandatory Tender 4/1/2011	2,183,643
4,595,000	Decatur County-Bainbridge, GA IDA, Revenue Bonds, 4.55% TOBs (John B. Sanifilippo & Son)/(Bank of America N.A. LOC), Mandatory Tender 6/1/2011	4,749,070
2,850,000	Floyd County, GA School District, GO Sales Tax Bonds (Series 2009), 3.00% (GTD by Georgia State), 8/1/2011	2,954,282
6,255,000	Forsyth County, GA, UT GO Bonds (Series 2008B), 5.00%, 3/1/2010	6,378,599
2,500,000	Fulton County, GA Facilities Corp., COP (Series 2009), 3.00%, 11/1/2011	2,572,450
1,000,000	Georgia State Road and Tollway Authority, Federal Highway Grant Anticipation Revenue Bonds (Series 2009-A), 4.00%, 6/1/2011	1,051,240
4,000,000	Georgia State Road and Tollway Authority, Federal Highway Grant Anticipation Revenue Bonds (Series 2009-A), 5.00%, 6/1/2012	4,397,200
8,120,000	Georgia State, UT GO Bonds (Series 2003D), 5.25%, 12/1/2011	8,912,187
8,000,000	Georgia State, UT GO Bonds (Series 2006G), 5.00%, 10/1/2011	8,684,640
5,850,000	Gwinnett County, GA Water and Sewer Authority, Revenue Bonds, 5.00% (United States Treasury PRF 8/1/2012@100)/ (Original Issue Yield: 5.10%), 8/1/2020	6,504,381
700,000	Medical Center Hospital Authority, GA, Revenue Refunding Bonds (Series 2007), 5.00% (Spring Harbor at Green Island), 7/1/2012	712,005
5,000,000	Monroe County, GA Development Authority, PCRBs (Series 1992A), 6.80% (Oglethorpe Power Corp.), 1/1/2011	5,283,600
2,000,000	Monroe County, GA Development Authority, PCRBs (First Series 1995), 4.50% TOBs (Georgia Power Co.), Mandatory Tender 4/1/2011	2,072,300

Annual Shareholder Report


$735,000	Municipal Electric Authority of Georgia, General Resolution Subordinated Bonds (Series 2008A), 4.00%, 1/1/2010	740,821
1,000,000	Private Colleges & Universities Facilities of GA, Revenue Bonds (Series 2008B), 5.00% (Emory University), 9/1/2011	1,080,500
1,500,000	Public Gas Partners, Inc., GA, Gas Project Revenue Bonds (Gas Supply Pool No. 1 Series 2009A), 5.00%, 10/1/2011	1,595,925
2,300,000	Public Gas Partners, Inc., GA, Gas Project Revenue Bonds (Gas Supply Pool No. 1 Series 2009A), 5.00%, 10/1/2012	2,493,476
1,400,000	Public Gas Partners, Inc., GA, Gas Project Revenue Bonds (Gas Supply Pool No. 1 Series 2009A), 5.00%, 10/1/2013	1,536,836
	TOTAL	76,703,758
	Illinois – 0.4%
2,000,000	Chicago, IL Water Revenue, Second Lien Water Refunding Revenue Bonds (Series 2008), 5.00% (FSA INS), 11/1/2011	2,156,400
8,825,000	Chicago, IL, Refunding UT GO Bonds (2005A), 5.00% (FSA INS), 1/1/2013	9,810,753
3,000,000	Illinois Development Finance Authority, Adjustable-Rate Gas Supply Refunding Revenue Bonds (Series 2003B), 3.75% TOBs (Peoples Gas Light & Coke Co.) Mandatory Tender 2/1/2012	3,008,670
	TOTAL	14,975,823
	Indiana – 0.3%
2,750,000	Indiana Health Facility Financing Authority, Revenue Bonds (Series 2005A-4), 5.00% (Ascension Health Subordinate Credit Group), 6/1/2012	2,943,463
2,000,000	Indiana State Finance Authority, Hospital Revenue Bonds (Series 2009A), 5.00% (Parkview Health System Obligated Group), 5/1/2010	2,035,340
1,000,000	Indiana State Finance Authority, Hospital Revenue Bonds (Series 2009A), 5.00% (Parkview Health System Obligated Group), 5/1/2011	1,042,430
2,000,000	Indiana State Finance Authority, Hospital Revenue Bonds (Series 2009A), 5.00% (Parkview Health System Obligated Group), 5/1/2012	2,115,660
1,000,000	Jasper County, IN, PCR Refunding Bonds (Series 1994A), 4.15% (Northern Indiana Public Service Company)/(National Public Finance Guarantee Corporation INS), 8/1/2010	1,013,770
1,500,000	St. Joseph County, IN, Variable Rate Educational Facilities Revenue Bonds (Series 2005), 3.875% TOBs (University of Notre Dame), Mandatory Tender 3/1/2012	1,566,225
	TOTAL	10,716,888
	Iowa – 0.5%
1,455,000	Iowa Finance Authority, Senior Living Facility Revenue Refunding Bonds (Series 2007A), 5.00% (Deerfield Retirement Community, Inc.), 11/15/2012	1,371,745

Annual Shareholder Report


$1,500,000	Iowa Finance Authority, Variable Rate Demand Health Facilities Revenue Bonds (Series 2005A), 5.00% (Iowa Health System)/(Assured Guaranty Corp. INS), 2/15/2012	1,594,590
5,000,000	Iowa Finance Authority, Variable Rate Demand Health Facilities Revenue Bonds (Series 2009F), 5.00% TOBs (Iowa Health System), Mandatory Tender 8/15/2012	5,382,900
7,050,000	Tobacco Settlement Authority, IA, Tobacco Settlement Asset-Backed Revenue Bonds (Series 2001B), 5.60% (United States Treasury PRF 6/1/2011@101)/(Original Issue Yield: 5.75%), 6/1/2035	7,616,679
	TOTAL	15,965,914
	Kansas – 0.2%
2,500,000	Junction City, KS, UT GO Notes (Series 2009B), 4.00%, 6/1/2010	2,553,175
450,000	Kansas State Development Finance Authority, Hospital Revenue Bonds (Series 2009D), 3.00% (Adventist Health System/Sunbelt Obligated Group), 11/15/2011	457,335
180,000	Kansas State Development Finance Authority, Hospital Revenue Bonds (Series 2009D), 3.50% (Adventist Health System/Sunbelt Obligated Group), 11/15/2012	185,913
200,000	Kansas State Development Finance Authority, Hospital Revenue Bonds (Series 2009D), 5.00% (Adventist Health System/Sunbelt Obligated Group), 11/15/2013	218,188
520,000	Wichita, KS, Hospital Facilities Refunding & Improvement Revenue Bonds (Series IIIA-2009), 2.00% (Via Christi Health System, Inc.), 11/15/2010	522,319
500,000	Wichita, KS, Hospital Facilities Refunding & Improvement Revenue Bonds (Series IIIA-2009), 3.00% (Via Christi Health System, Inc.), 11/15/2011	511,195
1,000,000	Wichita, KS, Hospital Facilities Refunding & Improvement Revenue Bonds (Series IIIA-2009), 4.50% (Via Christi Health System, Inc.), 11/15/2012	1,064,170
2,000,000	Wichita, KS, Hospital Facilities Refunding & Improvement Revenue Bonds (Series IIIA-2009), 5.00% (Via Christi Health System, Inc.), 11/15/2013	2,179,920
	TOTAL	7,692,215
	Kentucky – 0.8%
500,000	Kentucky EDFA, Hospital Revenue Bonds (Series 2009A), 5.00% (Baptist Healthcare System), 8/15/2010	516,885
1,000,000	Kentucky EDFA, Hospital Revenue Bonds (Series 2009A), 5.00% (Baptist Healthcare System), 8/15/2011	1,059,330
4,465,000	Louisville & Jefferson County, KY Metropolitan Sewer District, 5.00%, 5/15/2011	4,740,669
4,685,000	Louisville & Jefferson County, KY Metropolitan Sewer District, 5.00%, 5/15/2012	5,102,012

Annual Shareholder Report


$15,000,000	Owensboro, KY, GO BANs (Series 2009), 3.25%, 7/1/2012	15,243,150
	TOTAL	26,662,046
	Maryland – 0.8%
1,000,000	Maryland State Health & Higher Educational Facilities Authority, Revenue Bonds (Series 2008B), 5.00% TOBs (Johns Hopkins Hospital), Mandatory Tender 11/15/2011	1,061,720
16,290,000	Maryland State, State & Local Facilities UT GO Bonds (Second Series 2009B), 5.25%, 8/15/2012	18,278,194
5,000,000	Maryland State, UT GO Bonds (Second Series 2008), 5.00%, 7/15/2011	5,387,850
2,955,000	Maryland State, UT GO Bonds (Series 2006A), 5.00%, 3/1/2013	3,333,979
	TOTAL	28,061,743
	Massachusetts – 3.0%
5,100,000	Brockton, MA Area Transit Authority, 2.00% RANs (GTD by Commonwealth of Massachusetts), 8/6/2010	5,126,826
4,000,000	Commonwealth of Massachusetts, LT GO Construction Loan Bonds (Series C), 5.50% (FSA INS), 11/1/2011	4,387,520
4,175,000	Greater Attleboro-Taunton, MA Regional Transportation Authority, 2.50% RANs (GTD by Commonwealth of Massachusetts), 8/20/2010	4,212,199
10,905,000	Massachusetts HEFA, (Series 2005F) ARS (Partners Healthcare Systems)/(FSA INS), 1.000%, 10/2/2009	10,905,000
18,880,000	Massachusetts HEFA, (Series 2007G-2) ARS (Partners Healthcare Systems)/(FSA INS), 0.900%, 10/1/2009	18,880,000
1,000,000	Massachusetts HEFA, Revenue Bonds (Series 2008 T-2), 4.10% TOBs (Northeastern University), Mandatory Tender 4/19/2012	1,019,470
675,000	Massachusetts HEFA, Revenue Bonds (Series 2008R), 5.00% (Northeastern University), 10/1/2009	675,074
1,465,000	Massachusetts HEFA, Revenue Bonds (Series 2008R), 5.00% (Northeastern University), 10/1/2011	1,559,888
1,000,000	Massachusetts HEFA, Revenue Bonds (Series 2008R), 5.00% (Northeastern University), 10/1/2012	1,085,640
3,250,000	Massachusetts HEFA, Revenue Bonds (Series 2008T-1), 4.125% TOBs (Northeastern University), Mandatory Tender 2/16/2012	3,345,648
6,945,000	Massachusetts State HFA, (Series 2009-B), 2.50%, 2/1/2011	7,057,023
8,000,000	Massachusetts State HFA, Construction Loan Notes (Series 2009D), 4.00%, 9/1/2011	8,324,320
9,000,000	Massachusetts State HFA, Construction Loan Notes (Series 2009D), 5.00%, 9/1/2012	9,718,200
14,940,000	Montachusett, MA Regional Transit Authority, 2.25% RANs (GTD by Commonwealth of Massachusetts), 8/12/2010	15,051,602
4,000,000	Pioneer Valley, MA Transit Authority, 3.50% RANs, 2/26/2010	4,018,360

Annual Shareholder Report


$8,700,000	Southeastern Massachusetts Regional Transportation Authority, 2.50% RANs (GTD by Commonwealth of Massachusetts), 9/3/2010	8,766,381
	TOTAL	104,133,151
	Michigan – 0.3%
1,365,000	Kent Hospital Finance Authority, MI, Revenue Bonds (Series 2005A), 5.00% (Metropolitan Hospital), 7/1/2010	1,363,198
750,000	Michigan State Hospital Finance Authority, Revenue & Refunding Bonds (Series 2008A), 5.00% (McLaren Health Care Corp.), 5/15/2010	761,648
9,500,000	Michigan State Hospital Finance Authority, Revenue Bonds (Series 2001A-2), 3.75% TOBs (Ascension Health Credit Group), Mandatory Tender 3/15/2012	9,865,940
	TOTAL	11,990,786
	Minnesota – 0.9%
12,000,000	Bemidji, MN, Temporary Sales Tax UT GO Bonds, 4.50%, 2/1/2012	12,507,600
2,040,000	Chaska, MN ISD No.112, UT GO Bonds, 3.00% (GTD by Minnesota State), 2/1/2011	2,104,219
2,485,000	Chaska, MN ISD No.112, UT GO Bonds, 3.00% (GTD by Minnesota State), 2/1/2012	2,601,099
2,965,000	Chaska, MN ISD No.112, UT GO Bonds, 3.50% (GTD by Minnesota State), 2/1/2013	3,182,898
3,020,000	Chaska, MN ISD No.112, UT GO Bonds, 3.50% (GTD by Minnesota State), 2/1/2014	3,260,724
2,900,000	Minnesota State, UT GO Highway Bonds, 3.00%, 12/1/2011	3,040,766
2,500,000	Stillwater, MN ISD No. 834, UT GO Bonds, 4.00% (GTD by Minnesota State), 2/1/2011	2,611,900
	TOTAL	29,309,206
	Mississippi – 0.5%
3,240,000	Mississippi Development Bank, Marshall County Correctional Facility Refunding Bonds (Series 2008C), 5.00% (Mississippi State Department of Corrections), 8/1/2012	3,477,362
1,200,000	Mississippi Development Bank, Wilkinson County Correctional Facility Refunding Bonds (Series 2008D), 5.00% (Mississippi State Department of Corrections), 8/1/2012	1,287,912
10,000,000	Mississippi State, Refunding UT GO Bonds, 5.50%, 9/1/2012	11,250,200
	TOTAL	16,015,474
	Missouri – 0.1%
1,665,000	Missouri State Environmental Improvement & Energy Resources Authority, PCR Refunding Bonds (Series 2008), 4.375% TOBs (Associated Electric Cooperative, Inc.), Mandatory Tender 3/1/2011	1,718,913
	Nebraska – 0.1%
1,170,000	Nebraska Public Power District, General Revenue Bonds (Series 2008B), 5.00%, 1/1/2012	1,259,809

Annual Shareholder Report


$1,750,000	Omaha, NE, UT GO Bonds, 4.00%, 10/15/2011	1,865,937
1,250,000	Omaha, NE, UT GO Bonds, 5.00%, 10/15/2010	1,308,288
	TOTAL	4,434,034
	Nevada – 0.4%
2,000,000	Clark County, NV Airport System, Revenue Bonds (Senior Series 2008E), 5.00%, 7/1/2010	2,061,820
4,000,000	Clark County, NV School District, LT GO Building Bonds (Series 2008A), 5.00%, 6/15/2010	4,118,960
2,350,000	Clark County, NV, IDRBs (Series 2003C), 5.45% TOBs (Southwest Gas Corp.), Mandatory Tender 3/1/2013	2,426,704
1,680,000	Clark County, NV, LT GO Bond Bank Bonds (Series 2000), 6.00%, 7/1/2010	1,744,495
730,000	Clark County, NV, Special Assessment Revenue Bonds (Series 2005), 4.20% (Summerlin-Mesa SID No. 151), 8/1/2011	696,325
1,475,000	Henderson, NV, LID No. T-16 LT Obligation Improvement Bonds, 4.50% (Falls at Lake Las Vegas LID No. T-16), 3/1/2011	1,387,784
755,000	Henderson, NV, LID No. T-17 LT Obligation Improvement Bonds, 4.15% (Madeira Canyon LID No. T-17), 9/1/2010	746,725
	TOTAL	13,182,813
	New Hampshire – 0.6%
6,900,000	Cheshire County, NH, (Series A), 4.50% TANs, 12/31/2009	6,930,498
9,500,000	Strafford County, NH, (Series 2009A), 4.50% TANs, 12/31/2009	9,541,990
3,625,000	Strafford County, NH, (Series 2009B), 4.00% TANs, 12/31/2009	3,636,818
	TOTAL	20,109,306
	New Jersey – 3.4%
13,908,053	Aberdeen Township, NJ, UT GO Notes, 2.25% BANs, 7/23/2010	14,020,291
3,015,000	Alloway Township, NJ, (Series 2009A), 3.25% BANs, 5/5/2010	3,018,497
2,250,000	Atlantic County Utilities Authority, NJ, Sewer Revenue Refunding Bonds (Series 2009), 4.00% (Assured Guaranty Corp. INS), 1/15/2011	2,322,315
1,500,000	Atlantic County Utilities Authority, NJ, Sewer Revenue Refunding Bonds (Series 2009), 5.00% (Assured Guaranty Corp. INS), 1/15/2012	1,606,305
2,209,339	Barrington, NJ, UT GO BANs, 2.50% BANs, 6/8/2010	2,222,926
11,392,206	Beachwood, NJ, 3.00% BANs, 4/28/2010	11,461,129
5,116,250	Burlington, NJ, 2.50% BANs, 6/25/2010	5,151,655
3,983,980	Clifton, NJ Board of Education, 3.50% GANs, 7/6/2010	4,006,529
1,285,500	Franklin Township, Warren County, NJ, 6.75% BANs, 10/23/2009	1,287,184
8,125,000	High Bridge Borough, NJ, 5.25% BANs, 1/13/2010	8,170,825
4,000,000	Middlesex, NJ, 2.25% BANs, 4/1/2010	4,018,280
22,000,000	New Brunswick, NJ Parking Authority, Subordinate Project Notes (GTD by City of New Brunswick, NJ), 3.00% BANs, 12/15/2010	22,220,220

Annual Shareholder Report


$605,000		New Jersey EDA, School Facilities Construction Refunding Revenue Bonds (Series 2008W), 5.00% (New Jersey State), 3/1/2010	615,563
1,000,000		New Jersey EDA, School Facilities Construction Refunding Revenue Bonds (Series 2008W), 5.00% (New Jersey State), 3/1/2011	1,052,910
1,395,000		New Jersey EDA, School Facilities Construction Refunding Revenue Bonds (Series 2008W), 5.00% (New Jersey State)/(Escrowed In Treasuries COL), 3/1/2010	1,420,780
7,380,000		Newark, NJ, School Promissory Notes (Series 2009G), 3.25% BANs, 4/14/2010	7,440,147
2,950,000		Passaic, NJ Parking Authority, 4.00% RANs (GTD by Passaic, NJ), 11/22/2009	2,953,481
7,900,000		Passaic, NJ, General Improvement and Sewer Utility Bonds, 3.50% BANs, 8/6/2010	7,964,306
5,950,000		Rahway, NJ Redevelopment Agency, Tax-Exempt City-Secured Arts District Extension Project Notes (Series 2009), 2.75% GANs (Rahway, NJ), 9/15/2010	6,003,491
2,224,925		Rockaway Borough, NJ, 4.25% BANs, 12/22/2009	2,235,226
2,821,850		Seaside Heights Borough, NJ, (Series 2009A), 3.75% BANs, 2/5/2010	2,829,441
5,000,000		Ventnor, NJ, (Series 2009A), 2.25% BANs, 7/21/2010	5,035,500
		TOTAL	117,057,001
		New Mexico – 0.1%
2,000,000		Farmington, NM, Refunding Revenue Bonds (Series 2002A), 4.00% TOBs (El Paso Electric Co.)/(FGIC INS), Mandatory Tender 8/1/2012	2,001,160
1,370,000		Massachusetts HEFA, Revenue Bonds (Series 2008R), 5.00% (Northeastern University), 10/1/2010	1,418,005
130,000		Sandoval County, NM, Incentive Payment Refunding Revenue Bonds (Series 2005), 3.50% (Intel Corp.), 6/1/2010	132,121
		TOTAL	3,551,286
		New York – 3.3%
4,395,000	⁴	Evans, NY, 2.50% BANs, 10/7/2010	4,422,952
3,635,000		McGraw, NY CSD, 2.75% BANs, 7/9/2010	3,666,770
3,000,000		Monroe County, NY, Public Improvement Bonds (Series 2009A), 3.75% (Assured Guaranty Corp. INS), 6/1/2011	3,111,300
8,325,000		Monroe County, NY, UT GO Notes, 3.50% BANs, 7/14/2010	8,389,269
4,000,000		Nassau County, NY, Refunding UT GO Bonds (Series 2009E), 4.00%, 6/1/2011	4,189,880
1,500,000		Nassau County, NY, Refunding UT GO Bonds (Series 2009E), 4.00%, 6/1/2012	1,597,950
9,500,000		New York City, NY, (Series C-4) ARS (Assured Guaranty Corp. INS), 0.850%, 10/2/2009	9,500,000
5,000,000		New York City, NY, UT GO Bonds (Series 2009H-1), 5.00%, 3/1/2013	5,550,750

Annual Shareholder Report


$370,000	New York State Dormitory Authority, Revenue Bonds (Series 2005C), 5.00% (Mt. Sinai NYU Health Obligated Group), 7/1/2011	370,711
6,355,000	New York State Dormitory Authority, Revenue Bonds (Series 2009C), 4.00% (School District Financing Program), 10/1/2011	6,727,149
10,000,000	New York State Dormitory Authority, Third General Resolution Revenue Bonds (Series 2002B), 5.25% TOBs (State University of New York), Mandatory Tender 5/15/2012	10,789,800
17,000,000	New York State Thruway Authority, General Revenue BANs (Series 2009A), 4.00%, 7/15/2011	17,896,920
10,000,000	Pembroke, NY CSD, 1.75% BANs, 6/21/2010	10,021,500
7,501,000	Sleepy Hollow, NY, (Series 2009C), 2.50% BANs, 8/13/2010	7,585,536
16,000,000	Syracuse, NY, City School District Purposes (Series 2009A), 2.00% RANs, 6/30/2010	16,105,760
2,000,000	Triborough Bridge & Tunnel Authority, NY, General Revenue Bonds (Series 2008C), 4.00%, 11/15/2011	2,131,420
2,000,000	Triborough Bridge & Tunnel Authority, NY, General Revenue Bonds (Series 2008C), 5.00%, 11/15/2010	2,098,220
	TOTAL	114,155,887
	North Carolina – 0.7%
2,500,000	Charlotte, NC, UT GO Bonds, 5.00%, 8/1/2011	2,697,825
1,000,000	Mecklenburg County, NC, Refunding UT GO Bonds (Series 2009A), 4.00%, 8/1/2011	1,060,910
500,000	New Hanover County, NC, GO Refunding Bonds (Series 2009A), 3.00%, 12/1/2011	524,015
2,000,000	New Hanover County, NC, GO Refunding Bonds (Series 2009A), 5.00%, 12/1/2012	2,247,000
1,000,000	North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds (Series 2009A), 5.00%, 1/1/2012	1,063,910
1,200,000	North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds (Series 2009A), 5.00%, 1/1/2013	1,296,636
2,000,000	North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, 5.00% (Assured Guaranty Corp. INS), 1/1/2013	2,193,940
1,500,000	North Carolina Municipal Power Agency No. 1, Revenue Bonds (Series 2008C), 5.00%, 1/1/2011	1,568,910
3,265,000	North Carolina State University at Raleigh, General Revenue Bonds (Series 2008B), 5.00%, 10/1/2010	3,410,782
2,000,000	North Carolina State, Public Improvement UT GO Bonds (Series 2005A), 5.50%, 3/1/2011	2,138,600
2,000,000	North Carolina State, Refunding UT GO Bonds (Series 2003E), 5.00%, 2/1/2012	2,191,060
2,000,000	North Carolina State, UT GO Refunding Bonds (Series E), 5.00%, 2/1/2013	2,250,440
	TOTAL	22,644,028

Annual Shareholder Report


	Ohio – 1.8%
$1,000,000	Buckeye Tobacco Settlement Financing Authority, OH, Tobacco Settlement Asset-Backed Bonds (Series 2007A-1), 5.00%, 6/1/2012	1,042,530
7,500,000	Dover, OH, 3.25% BANs, 6/3/2010	7,537,800
3,000,000	Ironton, OH City School District, 3.375% BANs, 5/26/2010	3,017,070
2,145,000	Lucas County, OH, Adjustable Rate Demand Health Care Facilities Revenue Bonds (Series 2002), 3.75% TOBs (Franciscan Care Center), Optional Tender 3/1/2011	2,148,518
6,000,000	Ohio Air Quality Development Authority, PCR Refunding Bonds (Series 2009-B), 5.25% TOBs (FirstEnergy Generation Corp.), Mandatory Tender 3/1/2011	6,166,920
8,000,000	Ohio State Air Quality Development Authority, Air Quality Revenue Refunding Bonds (Series 2009A), 3.875% TOBs (Columbus Southern Power Company), Mandatory Tender 6/1/2014	8,167,040
10,000,000	Ohio State Air Quality Development Authority, PCR Refunding Bonds (Series 2009-D), 4.75% TOBs (FirstEnergy Generation Corp.), Mandatory Tender 8/1/2012	10,205,200
7,280,000	Ohio State Air Quality Development Authority, PCRBs (Series 2008B), 3.375% TOBs (FirstEnergy Nuclear Generation Corp.), Mandatory Tender 10/1/2009	7,293,541
3,000,000	Ohio State Higher Educational Facility Commission, Higher Educational Facility Revenue Bonds (Series 2009), 5.00% (Oberlin College), 10/1/2014	3,441,840
1,200,000	Ohio State, Hospital Revenue Bonds (Series 2008A), 4.00% (Cleveland Clinic), 1/1/2012	1,254,744
1,750,000	Ohio State, Hospital Revenue Bonds (Series 2008A), 4.00% (Cleveland Clinic), 1/1/2013	1,850,013
7,975,000	Tiffin, OH, 3.25% BANs, 6/2/2010	8,015,034
	TOTAL	60,140,250
	Oregon – 0.1%
2,040,000	Eugene, OR Electric Utility System, Revenue & Refunding Bonds (Series 2008), 4.00%, 8/1/2010	2,099,772
	Pennsylvania – 1.3%
1,500,000	Allegheny County, PA HDA, Hospital Revenue Bonds (Series 2008B), 5.00% (UPMC Health System), 6/15/2011	1,573,590
5,000,000	Allegheny County, PA HDA, Revenue Bonds (Series 2008A), 5.00% (UPMC Health System), 9/1/2011	5,264,150
1,120,000	Allegheny County, PA HDA, Revenue Bonds (Series 2008B), 5.00% (UPMC Health System), 6/15/2010	1,146,387
2,180,000	Allegheny County, PA, GO Bonds (Series C-63), 3.00%, 11/1/2011	2,241,716
6,970,000	Allegheny County, PA, GO Bonds (Series C-63), 5.00%, 11/1/2012	7,573,045
3,100,000	Pennsylvania EDFA, Exempt Facilities Revenue Refunding Bonds (Series 2009A), 5.00% TOBs (Exelon Generation Co. LLC), Mandatory Tender 6/1/2012	3,263,742

Annual Shareholder Report


$6,000,000	Pennsylvania EDFA, PCR Refunding Bonds (Series 2008), 4.85% TOBs (PPL Electric Utilities Corp.), Mandatory Tender 10/1/2010	6,108,840
3,500,000	Pennsylvania EDFA, Solid Waste Disposal Revenue Bonds (Series 2006), 3.60% TOBs (Waste Management, Inc.), Mandatory Tender 3/1/2010	3,508,575
1,000,000	Pennsylvania State Higher Education Facilities Authority, Revenue Bonds (Series 2008B), 5.00% (University of Pennsylvania Health System), 8/15/2013	1,094,660
2,555,000	Sayre, PA, Health Care Facilities Authority, Revenue Bonds, 0.883% (Guthrie Healthcare System, PA), 12/1/2017	2,171,111
7,125,000	South Fork Municipal Authority, PA, (Series A) ARS (Conemaugh Valley Memorial Hospital)/(Assured Guaranty Corp. INS), 1.280%, 10/1/2009	7,125,000
2,100,000	University of Pittsburgh, University Refunding Bonds (Series 2009A), 5.00%, 9/15/2011	2,271,969
750,000	Westmoreland County, PA IDA, Retirement Community Revenue Bonds (Series 2005A), 5.00% (Redstone Presbyterian Seniorcare Obligated Group), 1/1/2010	750,945
	TOTAL	44,093,730
	South Carolina – 0.9%
3,545,000	Greenville, SC Hospital System, Hospital Refunding Revenue Bonds (Series 2008A), 4.00%, 5/1/2010	3,596,225
5,960,000	South Carolina Jobs-EDA, Hospital Revenue Bonds, Floating Rate Notes, 1.15% (Palmetto Health Alliance), 8/1/2013 Mandatory Tender	5,608,360
15,402,000	South Carolina State Housing Finance & Development Authority, Multi-Family Rental Housing Revenue Bonds (Series 2008), 1.15% TOBs (GE Funding Capital Market Services, Inc.)/(GTD by GE Capital Corp.), Mandatory Tender 9/1/2010	15,394,453
5,285,000	South Carolina State Public Service Authority (Santee Cooper), Refunding Revenue Obligations (Series 2009A), 5.00%, 1/1/2012	5,753,410
	TOTAL	30,352,448
	Tennessee – 0.2%
500,000	Sumner County, TN Health, Educational & Housing Facilities Board, Hospital Revenue & Refunding Improvement Bonds (Series 2007A), 5.25% (Sumner Regional Health Systems, Inc.), 11/1/2011	320,050
460,000	Sumner County, TN Health, Educational & Housing Facilities Board, Hospital Revenue & Refunding Improvement Bonds (Series 2007A), 5.25% (Sumner Regional Health Systems, Inc.), 11/1/2012	285,246
1,000,000	Sumner County, TN Health, Educational & Housing Facilities Board, Hospital Revenue & Refunding Improvement Bonds (Series 2007A), 5.25% (Sumner Regional Health Systems, Inc.), 11/1/2013	590,100
5,585,000	Tennessee State, GO Bonds (Series 2009A), 4.00%, 5/1/2012	6,020,574
	TOTAL	7,215,970

Annual Shareholder Report


	Texas – 2.7%
$1,500,000	Austin, TX, Water and Wastewater System Revenue Refunding Bonds (Series 2008A), 3.00%, 11/15/2011	1,563,720
6,500,000	Dallas, TX ISD, UT GO Refunding Bonds (Series 2009), 4.00%, 2/15/2011	6,768,190
2,000,000	Dallas-Fort Worth, TX International Airport, Joint Revenue Refunding Bonds (Series 2009A), 4.00%, 11/1/2011	2,110,680
2,000,000	Dallas-Fort Worth, TX International Airport, Joint Revenue Refunding Bonds (Series 2009A), 4.00%, 11/1/2012	2,134,600
1,855,000	Grapevine, TX, Combination Tax & Tax Increment Reinvestment Zone Number One Revenue Refunding Bonds (Series 2009A), 3.00%, 2/15/2011	1,906,161
1,540,000	Grapevine, TX, Combination Tax & Tax Increment Reinvestment Zone Number One Revenue Refunding Bonds (Series 2009A), 4.25%, 2/15/2012	1,644,874
3,170,000	Grapevine, TX, Refunding LT GO Bonds (Series 2009), 3.00%, 2/15/2011	3,257,429
4,345,000	Grapevine, TX, Refunding LT GO Bonds (Series 2009), 5.00%, 2/15/2012	4,716,845
1,000,000	Gulf Coast, TX Waste Disposal Authority, Solid Waste Disposal Revenue Bonds (Series 2003D), 4.55% (Waste Management, Inc.), 4/1/2012	1,003,990
2,300,000	Harris County, TX Cultural Education Facilities Finance Corp., Revenue Bonds (Series 2008B), 5.25% (Methodist Hospital, Harris County, TX), 12/1/2012	2,520,961
1,500,000	Harris County, TX Education Facilities Finance Corp., Medical Facilities Revenue Refunding Bonds (Series 2008D), 3.00% (Baylor College of Medicine), 11/15/2009	1,501,905
500,000	Harris County, TX Education Facilities Finance Corp., Medical Facilities Revenue Refunding Bonds (Series 2008D), 4.00% (Baylor College of Medicine), 11/15/2010	509,770
755,000	Harris County, TX Education Facilities Finance Corp., Medical Facilities Revenue Refunding Bonds (Series 2008D), 4.00% (Baylor College of Medicine), 11/15/2011	778,435
3,500,000	Harris County, TX HFDC, (Series A-3) ARS (Christus Health System)/ (FSA INS), 1.767%, 10/6/2009	3,500,000
4,450,000	Harris County, TX HFDC, (Series A-5) ARS (Christus Health System)/ (FSA INS), 1.585%, 10/1/2009	4,450,000
14,650,000	Harris County, TX HFDC, (Series A-6) ARS (Christus Health System)/ (FSA INS), 1.585%, 10/2/2009	14,650,000
1,000,000	Harris County, TX, Permanent Improvement Refunding LT GO Bonds (Series 2008B), 4.00%, 10/1/2010	1,034,860
1,250,000	Harris County, TX, Permanent Improvement Refunding LT GO Bonds (Series 2008B), 5.00%, 10/1/2011	1,353,838
1,000,000	Harris County, TX, Refunding UT GO Bonds (Series 2008A), 5.00%, 8/15/2010	1,039,930

Annual Shareholder Report


$3,500,000	Houston, TX Combined Utility System, First Lien Revenue Refunding Bonds (Series 2004C-2B), 5.00% TOBs (AMBAC INS), Mandatory Tender 5/15/2011	3,672,620
500,000	Lower Colorado River Authority, TX, Refunding Revenue Bonds (Series 20008), 5.00% (LCRA Transmission Services Corp.), 5/15/2011	527,710
500,000	Lower Colorado River Authority, TX, Refunding Revenue Bonds (Series 2008), 5.00% (LCRA Transmission Services Corp.), 5/15/2010	511,860
500,000	Lower Colorado River Authority, TX, Refunding Revenue Bonds (Series 2008), 5.00% (LCRA Transmission Services Corp.)/(Berkshire Hathaway Assurance Corp. INS), 5/15/2011	532,495
7,000,000	Lubbock, TX HFDC, Variable Rate Refunding Revenue Bonds (Series 2008A), 3.05% TOBs (St. Joseph Health System), Mandatory Tender 10/16/2012	7,053,760
1,000,000	Tarrant County, TX Cultural Education Facilities Finance Corp., Retirement Facilities Revenue Bonds (Series 2007), 5.25% (Buckingham Senior Living Community), 11/15/2010	996,440
635,000	Texas Municipal Gas Acquisition & Supply Corp. II, Gas Supply Revenue Bonds (Series 2007A), 0.60%, 9/15/2010	625,475
5,000,000	Texas State Public Finance Authority, Refunding UT GO Bonds (Series 2009A), 4.00% (Texas State), 10/1/2011	5,310,050
6,415,000	Texas State Public Finance Authority, Refunding UT GO Bonds (Series 2009A), 5.00% (Texas State), 10/1/2012	7,140,921
7,250,000	Texas State Public Finance Authority, UT GO Bonds (Series 2008A), 5.00% (Texas State), 10/1/2010	7,575,162
1,000,000	Texas State Transportation Commission, First Tier Revenue Bonds, 5.00%, 4/1/2010	1,023,590
1,500,000	Texas State Transportation Commission, First Tier Revenue Bonds, 5.00%, 4/1/2011	1,597,890
	TOTAL	93,014,161
	Utah – 1.0%
3,300,000	Box Elder County, UT, PCRBs (Series 1984), 3.00% TOBs (Nucor Corp.), Optional Tender 10/1/2009	3,330,030
3,000,000	Intermountain Power Agency, UT, Subordinated Power Supply Revenue Refunding Bonds (Series 2008A), 5.25%, 7/1/2011	3,209,250
5,000,000	Intermountain Power Agency, UT, Subordinated Supply Revenue Refunding Bonds (Series 2009A), 4.00%, 7/1/2010	5,117,900
2,765,000	Intermountain Power Agency, UT, Subordinated Supply Revenue Refunding Bonds (Series 2009A), 5.00%, 7/1/2011	2,945,914
3,000,000	Intermountain Power Agency, UT, Subordinated Supply Revenue Refunding Bonds (Series 2009A), 5.00%, 7/1/2012	3,275,250
5,320,000	Utah State, GO Bonds (Series 2009C), 3.00%, 7/1/2012	5,620,048
10,600,000	Utah State, UT GO Bonds (Series 2003A), 5.00%, 7/1/2012	11,772,784
	TOTAL	35,271,176

Annual Shareholder Report


	Virginia – 1.2%
$2,540,000	Fairfax County, VA Sewer Revenue, Revenue Bonds (Series 2009), 5.00%, 7/15/2012	2,822,854
1,500,000	King George County IDA, VA, 6.00% TOBs (Waste Management, Inc.), Mandatory Tender 5/3/2010	1,522,335
3,000,000	Louisa, VA IDA, PCR Refunding Bonds (Series 2008C), 5.00% TOBs (Virginia Electric & Power Co.), Mandatory Tender 12/1/2011	3,152,820
1,000,000	Louisa, VA IDA, Solid Waste & Sewage Disposal Revenue Bonds (Series 2001A), 4.35% TOBs (Virginia Electric & Power Co.), Mandatory Tender 3/1/2010	1,006,050
2,140,000	Manassas Park, VA, UT GO Bonds, 4.50% (United States Treasury PRF 10/1/2009@100), 10/1/2011	2,140,257
1,650,000	Virginia College Building Authority, Educational Facilities Revenue Bonds (Series 2009A), 5.00%, 2/1/2012	1,803,533
10,150,000	Virginia Commonwealth Transportation Board, Federal Highway Reimbursement Anticipation Notes (Series 2002), 5.00% (Virginia State), 9/27/2012	11,326,486
4,000,000	Virginia Peninsula Port Authority, Revenue Refunding Bonds (Series 2003), 5.00% TOBs (Dominion Terminal Associates)/(GTD by Dominion Resources, Inc.), Mandatory Tender 10/1/2011	4,087,080
2,825,000	Virginia State Public Building Authority, Public Facilities Revenue Bonds (Series 2006B), 5.00%, 8/1/2012	3,137,473
3,290,000	Virginia State Public Building Authority, Public Facilities Revenue Bonds (Series 2009B), 5.00%, 8/1/2011	3,545,469
3,000,000	Virginia State Public Building Authority, Public Facilities Revenue Bonds (Series 2009C), 4.00%, 8/1/2012	3,241,080
3,570,000	York County, VA EDA, PCR Refunding Bonds (Series 2009A), 4.05% TOBs (Virginia Electric & Power Co.), Mandatory Tender 5/1/2014	3,734,648
	TOTAL	41,520,085
	Washington – 0.7%
2,165,000	Chelan County, WA Public Utility District No. 1, Consolidated System Subordinate Revenue Notes (Series 2008A), 5.00%, 7/1/2013	2,413,174
1,000,000	Clark County, WA Public Utility District No. 001, Electric System Revenue & Refunding Bonds (Series 2009), 5.00%, 1/1/2011	1,045,170
2,155,000	Clark County, WA Public Utility District No. 001, Electric System Revenue & Refunding Bonds (Series 2009), 5.00%, 1/1/2012	2,311,475
3,140,000	Energy Northwest, WA, Project 1 Electric Revenue Refunding Bonds (Series 2008D), 5.00%, 7/1/2010	3,247,953
3,000,000	Energy Northwest, WA, Project 1 Electric Revenue Refunding Bonds (Series 2008D), 5.00%, 7/1/2011	3,211,740
1,585,000	Energy Northwest, WA, Project 3 Electric Revenue Refunding Bonds (Series 2008D), 5.00%, 7/1/2010	1,639,492

Annual Shareholder Report


$9,335,000	Washington State, Motor Vehicle Fuel Tax GO Bonds (Series 2010B), 5.00%, 8/1/2012	10,350,928
	TOTAL	24,219,932
	West Virginia – 0.2%
5,000,000	West Virginia EDA, PCR Revenue Refunding Bonds (Series 2008D), 4.85% TOBs (Appalachian Power Co.), Mandatory Tender 9/4/2013	5,214,250
	Wisconsin – 0.8%
3,750,000	Oak Creek, WI Waterworks System, BANs (Series 2009), 4.00%, 4/1/2011	3,790,200
12,000,000	Wisconsin Health & Educational Facilities Authority, Revenue Bonds (Series 2009B), 4.75% TOBs (Aurora Health Care, Inc.), Mandatory Tender 8/15/2014	12,096,000
1,985,000	Wisconsin Public Power System, Power Supply System Revenue Bonds (Series 2008A), 4.00%, 7/1/2010	2,021,901
2,840,000	Wisconsin Public Power System, Power Supply System Revenue Bonds (Series 2008A), 4.00%, 7/1/2011	2,950,533
2,000,000	Wisconsin State Transportation, Revenue Bonds (Series 2009A), 3.50%, 7/1/2013	2,144,640
2,420,000	Wisconsin State Transportation, Revenue Bonds (Series 2009A), 3.50%, 7/1/2014	2,601,960
750,000	Wisconsin State Transportation, Revenue Bonds (Series 2009A), 4.00%, 7/1/2012	806,047
	TOTAL	26,411,281
	Wyoming – 0.1%
4,200,000	Albany County, WY, PCRBs (Series 1985), 4.00% TOBs (Union Pacific Railroad Co.)/(GTD by Union Pacific Corp.), Optional Tender 12/1/2009	4,208,946
	TOTAL MUNICIPAL BONDS (IDENTIFIED COST $1,301,143,513)	1,313,172,514
	Short-term municipals – 59.0%;5
	Alabama – 2.3%
3,350,000	Marshall County, AL, Special Obligation School Refunding Warrant (Series 1994) Weekly VRDNs (Marshall County, AL Board of Education)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	3,350,000
6,220,000	Mobile, AL Downtown Redevelopment Authority, (Series 2007) Weekly VRDNs (Lafayette Plaza Hotel)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	6,220,000
50,000,000	Mobile, AL Special Care Facilities Financing Authority, (Series 2006-B) Weekly VRDNs (Infirmary Health System, Inc.)/(Regions Bank, Alabama LOC), 1.600%, 10/7/2009	50,000,000
12,140,000	Talladega County, AL Special Obligation, School Warrants (Series 2003) Weekly VRDNs (Talladega County, AL Board of Education)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	12,140,000

Annual Shareholder Report


$5,600,000	Washington County, AL IDA, (Series 2007: Gulf Opportunity Zone Bonds) Weekly VRDNs (Bay Gas Storage Company, Ltd.)/(Regions Bank, Alabama LOC), 2.500%, 10/7/2009	5,600,000
	TOTAL	77,310,000
	California – 10.3%
35,700,000	California Health Facilities Financing Authority, (Series 2003D) Weekly VRDNs (Stanford Hospital & Clinics)/(FSA INS)/(Dexia Credit Local LIQ), 0.430%, 10/7/2009	35,700,000
56,375,000	California State Department of Water Resources Power Supply Program, (Series 2005G-5) Weekly VRDNs (FSA INS)/(Bank of Nova Scotia, Toronto and Fortis Bank SA/NV LIQs), 0.450%, 10/1/2009	56,375,000
25,000,000	California State, Economic Recovery Bonds (Series 2004C-2) Daily VRDNs (California State Fiscal Recovery Fund)/(Bank of America N.A. LIQ), 1.000%, 10/1/2009	25,000,000
50,000,000	California State, Economic Recovery Bonds (Series 2004C-4) Daily VRDNs (California State Fiscal Recovery Fund)/(JPMorgan Chase Bank, N.A. LIQ), 1.000%, 10/1/2009	50,000,000
7,525,000	California State, GO Tax Exempt Notes, 0.70% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 10/5/2009	7,525,000
31,200,000	California State, GO Tax Exempt Notes, 0.70% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 10/9/2009	31,200,000
24,000,000	California State, GO Tax Exempt Notes, 0.80% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 10/27/2009	24,000,000
25,215,000	California State, GO Tax Exempt Notes, 0.95% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 12/9/2009	25,215,000

Annual Shareholder Report


$6,815,000	California State, GO Tax Exempt Notes, 1.15% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 12/9/2009	6,815,000
6,050,000	California State, GO Tax Exempt Notes, 1.40% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 10/8/2009	6,050,000
16,650,000	California State, GO Tax Exempt Notes, 2.40% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 11/10/2009	16,650,000
9,110,000	California State, GO Tax Exempt Notes, 2.60% CP (Bayerische Landesbank, CALPERS (California Public Employees Retirement System), CALSTRS (California State Teachers' Retirement System), Calyon, Paris, Dexia Credit Local, Landesbank Hessen-Thueringen, Royal Bank of Canada, Montreal and Wells Fargo Bank, N.A. LOCs), Mandatory Tender 11/10/2009	9,110,000
60,000,000	Victorville, CA Joint Powers Financing Authority, (Series 2007A: Cogeneration Facility) Weekly VRDNs (Victorville, CA)/(Fortis Bank SA/NV LOC), 0.850%, 10/1/2009	60,000,000
	TOTAL	353,640,000
	District of Columbia – 0.4%
14,165,000	District of Columbia Revenue Bonds, (Series 2009) Weekly VRDNs (American Society of Hematology, Inc.)/(SunTrust Bank LOC), 0.850%, 10/7/2009	14,165,000
	Florida – 4.5%
30,000,000	Bay Medical Center, FL Board of Trustees, (Series 2007B) Weekly VRDNs (Bay Medical Center)/(Regions Bank, Alabama LOC), 3.000%, 10/7/2009	30,000,000
16,125,000	Brevard County, FL Educational Facilities Authority, (Series B) Weekly VRDNs (Florida Institute of Technology)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/1/2009	16,125,000
7,125,000	Florida Higher Educational Facilities Financing Authority, (Series 2002) Weekly VRDNs (St. Leo University, FL)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	7,125,000
28,965,000	Florida State Municipal Power Agency, (Series 2008E) Daily VRDNs (SunTrust Bank LOC), 0.410%, 10/1/2009	28,965,000
29,765,000	New College of Florida Development Corp., (Series 2006) Weekly VRDNs (SunTrust Bank LOC), 0.850%, 10/7/2009	29,765,000

Annual Shareholder Report


$11,225,000		Orange County, FL IDA, (Series 2004) Weekly VRDNs (UCF Hospitality School Student Housing Foundation)/(SunTrust Bank LOC), 0.850%, 10/7/2009	11,225,000
5,100,000		Tampa, FL, (Series 2000) Weekly VRDNs (Tampa Preparatory School, Inc.)/(SunTrust Bank LOC), 0.940%, 10/7/2009	5,100,000
20,000,000		UCF Health Facilities Corp., Capital Improvement Revenue Bonds (Series 2007) Weekly VRDNs (UCF Health Sciences Campus at Lake Nona)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	20,000,000
7,000,000		Volusia County, FL Education Facility Authority, (Series 2001) Weekly VRDNs (Bethune-Cookman College, Inc.)/(SunTrust Bank LOC), 0.850%, 10/7/2009	7,000,000
		TOTAL	155,305,000
		Georgia – 0.9%
10,000,000		Fulton County, GA Development Authority, (Series 1999) Weekly VRDNs (YMCA of Metropolitan Atlanta, Inc.)/(SunTrust Bank LOC), 0.890%, 10/1/2009	10,000,000
4,300,000		Fulton County, GA IDA, (Series 2005) Weekly VRDNs (Phoenix Stamping Group LLC)/(FHLB of Atlanta LOC), 0.800%, 10/1/2009	4,300,000
17,000,000		Rabun County, GA Development Authority, (Series 1999) Weekly VRDNs (Rabun Gap-Nacoochee, Inc.)/(SunTrust Bank LOC), 0.950%, 10/7/2009	17,000,000
		TOTAL	31,300,000
		Illinois – 1.4%
9,900,000		Chicago, IL Board of Education, (Series 2000D) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 0.350%, 10/1/2009	9,900,000
5,000,000		Illinois Finance Authority, (Series 2006) Weekly VRDNs (Lawrence Hall Youth Services)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	5,000,000
9,600,000		Illinois Finance Authority, (Series 2006) Weekly VRDNs (Reliable Materials Lyons LLC)/(Marshall & Ilsley Bank, Milwaukee LOC), 4.370%, 10/7/2009	9,600,000
11,905,000	^1,2	Illinois State, (PT-3523) Weekly VRDNs (Dexia Credit Local LIQ), 1.300%, 10/1/2009	11,905,000
10,410,000	^1,2	Illinois State, (PT-3524) Weekly VRDNs (Dexia Credit Local LIQ), 1.300%, 10/1/2009	10,410,000
		TOTAL	46,815,000
		Indiana – 1.3%
11,760,000		Indiana Health Facility Financing Authority, (Series 2002) Weekly VRDNs (Union Hospital, Inc.)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	11,760,000
33,100,000		St. Joseph County, IN Hospital Authority, Health System Revenue Refunding Bonds (Series 2008B) Weekly VRDNs (Memorial Health System, Inc.)/(Fifth Third Bank, Cincinnati LOC), 1.140%, 10/7/2009	33,100,000
		TOTAL	44,860,000

Annual Shareholder Report


		Kentucky – 1.0%
$21,375,000		Henderson County, KY, (Series 2003B) Weekly VRDNs (Community United Methodist Hospital, Inc.)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	21,375,000
5,000,000		Lexington-Fayette, KY Urban County Government, (Series 2008) Weekly VRDNs (Roman Catholic Diocese of Lexington)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	5,000,000
6,215,000		Lexington-Fayette, KY Urban County Government, Variable Rate Educational Facilities Revenue Bonds (Series 2001) Weekly VRDNs (Sayre School)/(Fifth Third Bank, Cincinnati LOC), 1.140%, 10/1/2009	6,215,000
		TOTAL	32,590,000
		Louisiana – 0.8%
7,250,000		Louisiana Public Facilities Authority, (Series 2008A) Daily VRDNs (Air Products & Chemicals, Inc.), 0.320%, 10/1/2009	7,250,000
9,000,000		Louisiana State Offshore Terminal Authority, (Series 2003A) Daily VRDNs (Loop LLC)/(SunTrust Bank LOC), 0.410%, 10/1/2009	9,000,000
10,000,000		St. Tammany Parish Development District, LA, (Series 2008A) Weekly VRDNs (Slidell Development Company, LLC)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	10,000,000
		TOTAL	26,250,000
		Maryland – 0.6%
5,125,000		Maryland State Health & Higher Educational Facilities Authority, (Series 2004: French International School) Weekly VRDNs (La Fondation Du Lycee Francais International De Washington)/(SunTrust Bank LOC), 0.850%, 10/7/2009	5,125,000
16,370,000		Maryland State Health & Higher Educational Facilities Authority, (Series 2004A) Weekly VRDNs (Shore Health System)/(SunTrust Bank LOC), 0.950%, 10/1/2009	16,370,000
		TOTAL	21,495,000
		Massachusetts – 1.5%
31,724,000		Massachusetts Development Finance Agency, (Issue 4), 0.42% CP (FHLB of Boston LOC), Mandatory Tender 10/1/2009	31,724,000
19,850,000		Massachusetts HEFA, (Series A) Weekly VRDNs (Suffolk University)/(FHLB of Boston LOC), 0.400%, 10/1/2009	19,850,000
		TOTAL	51,574,000
		Michigan – 2.5%
82,615,000	^1,2	Detroit, MI City School District, (PT-3480) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 1.300%, 10/1/2009	82,615,000
1,400,000		Michigan State Hospital Finance Authority, (Series 1999 A) Weekly VRDNs (Covenant Retirement Communities, Inc.)/(Bank of America N.A. LOC), 0.330%, 10/1/2009	1,400,000
		TOTAL	84,015,000

Annual Shareholder Report


		Mississippi – 2.3%
$32,000,000		Mississippi Business Finance Corp., (Series 2007) Weekly VRDNs (DDR Gulfport Promenade LLC)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	32,000,000
13,500,000		Mississippi Business Finance Corp., (Series 2007) Weekly VRDNs (Gulf Ship, LLC)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	13,500,000
6,850,000		Mississippi Business Finance Corp., (Series 2008) Weekly VRDNs (200 Renaissance, LLC)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	6,850,000
7,340,000		Mississippi Business Finance Corp., (Series A) Weekly VRDNs (Mississippi College)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	7,340,000
17,355,000		Mississippi Development Bank, (Series 2008) Weekly VRDNs (Mississippi Convention Center)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	17,355,000
		TOTAL	77,045,000
		New Hampshire – 0.1%
5,100,000		New Hampshire Higher Educational & Health Facilities Authority, (Series 2001A) Weekly VRDNs (Dartmouth-Hitchcock Obligated Group)/(FSA INS)/(Dexia Credit Local and JPMorgan Chase Bank, N.A. LIQs), 0.500%, 10/1/2009	5,100,000
		New Jersey – 2.2%
51,000,000	^1,2	New Jersey EDA, (PT-3824) Weekly VRDNs (GTD by Dexia Credit Local)/(Dexia Credit Local LIQ), 1.280%, 10/1/2009	51,000,000
4,020,000	^1,2	New Jersey Turnpike Authority, (PT-2493) Weekly VRDNs (GTD by Dexia Credit Local)/(Dexia Credit Local LIQ), 1.280%, 10/1/2009	4,020,000
19,600,000		New Jersey Turnpike Authority, (Series 2003C-3) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 0.450%, 10/7/2009	19,600,000
		TOTAL	74,620,000
		New York – 7.2%
5,470,000		Columbia County, NY IDA, (Series 2008A) Weekly VRDNs (Columbia Memorial Hospital)/(Key Bank, N.A. LOC), 2.150%, 10/1/2009	5,470,000
11,845,000		Long Island Power Authority, NY, (Series 2003D) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 0.400%, 10/7/2009	11,845,000
33,890,000		Long Island Power Authority, NY, (Series 2003H) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 0.400%, 10/7/2009	33,890,000
30,240,000		Long Island Power Authority, NY, Electric System General Revenue Bonds (Series 2003-K) Weekly VRDNs (FSA INS)/(Dexia Credit Local LIQ), 0.400%, 10/5/2009	30,240,000
6,235,000		Metropolitan Transportation Authority, NY, (Series 2008A) Weekly VRDNs (MTA Dedicated Tax Fund)/(FSA INS)/(Dexia Credit Local LIQ), 0.410%, 10/1/2009	6,235,000
10,000,000		New York City Housing Development Corp., (Series 2008A: Beekman Tower) Weekly VRDNs (FC Beekman Associates LLC)/(RBS Citizens Bank N.A. LOC), 0.800%, 10/7/2009	10,000,000

Annual Shareholder Report


$3,550,000		New York City, NY IDA, Liberty Revenue Bonds (Series 2004 B) Daily VRDNs (One Bryant Park LLC)/(Bank of America N.A. and Citibank NA, New York LOCs), 0.340%, 10/1/2009	3,550,000
38,200,000		New York City, NY Municipal Water Finance Authority, (Series 2000C) Daily VRDNs (Dexia Credit Local LIQ), 0.350%, 10/1/2009	38,200,000
26,100,000		New York City, NY Municipal Water Finance Authority, (Series 2001 F-1) Daily VRDNs (Dexia Credit Local LIQ), 0.350%, 10/1/2009	26,100,000
17,910,000		New York City, NY Transitional Finance Authority, New York City Recovery Bonds (2003 Subseries 2-E) Weekly VRDNs (Dexia Credit Local LIQ), 0.300%, 10/7/2009	17,910,000
22,520,000		New York City, NY Transitional Finance Authority, Subordinate Bonds (Series 2007A-3) Weekly VRDNs (Dexia Credit Local LIQ), 0.300%, 10/7/2009	22,520,000
11,500,000		New York City, NY, (Fiscal 2008 Subseries J-5) Daily VRDNs (Dexia Credit Local LIQ), 0.310%, 10/1/2009	11,500,000
2,400,000		New York City, NY, (Fiscal 2008 Subseries L-5) Daily VRDNs (Dexia Credit Local LIQ), 0.310%, 10/1/2009	2,400,000
10,980,000	^1,2	New York State Thruway Authority, ROCs RR II (R-12305) Weekly VRDNs (FSA INS)/(Citibank NA, New York LIQ), 0.800%, 10/1/2009	10,980,000
7,900,000		Saratoga County, NY Industrial Development Agency, (Series 2007A) Weekly VRDNs (Saratoga Hospital Obligated Group)/(Key Bank, N.A. LOC), 2.150%, 10/1/2009	7,900,000
7,520,000		St. Lawrence County, NY IDA, (Series 2006) Weekly VRDNs (Claxton-Hepburn Medical Center)/(Key Bank, N.A. LOC), 2.150%, 10/1/2009	7,520,000
		TOTAL	246,260,000
		North Carolina – 1.5%
20,000,000		Charlotte-Mecklenburg Hospital Authority, NC, (Series 2007B) Weekly VRDNs (Carolinas HealthCare System)/(Bayerische Landesbank LIQ), 2.000%, 10/1/2009	20,000,000
30,835,000		Charlotte-Mecklenburg Hospital Authority, NC, (Series 2007C) Weekly VRDNs (Carolinas HealthCare System)/(Bayerische Landesbank LIQ), 2.500%, 10/1/2009	30,835,000
		TOTAL	50,835,000
		Ohio – 6.2%
7,250,000		Delaware County, OH Healthcare Facilities, (Series 2007B) Weekly VRDNs (Willow Brook Christian Communities)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/2/2009	7,250,000
4,385,000		Evendale, OH, Tax Increment Revenue Bonds (Series 2009) Weekly VRDNs (Evendale Commons Ltd.)/(Fifth Third Bank, Cincinnati LOC), 0.900%, 10/1/2009	4,385,000
59,600,000		Geauga County, OH, Revenue Bonds (Series 2007A) Daily VRDNs (South Franklin Circle)/(Key Bank, N.A. LOC), 0.450%, 10/1/2009	59,600,000

Annual Shareholder Report


$59,100,000	Geauga County, OH, Revenue Bonds (Series 2007B) Daily VRDNs (South Franklin Circle)/(Key Bank, N.A. LOC), 0.450%, 10/1/2009	59,100,000
46,000,000	Hancock County, OH, (Series 2004) Weekly VRDNs (Blanchard Valley Regional Health Center)/(FSA INS)/(Fifth Third Bank, Cincinnati LIQ), 2.000%, 10/1/2009	46,000,000
19,565,000	Montgomery County, OH Hospital Authority, (Series 2008A) Weekly VRDNs (Kettering Health Network Obligated Group)/(FSA INS)/(Dexia Credit Local LIQ), 0.500%, 10/7/2009	19,565,000
7,500,000	Montgomery County, OH Hospital Authority, (Series 2008B) Weekly VRDNs (Kettering Health Network Obligated Group)/(FSA INS)/(Dexia Credit Local LIQ), 0.500%, 10/7/2009	7,500,000
10,000,000	Ohio State Air Quality Development Authority, (Series 2006-A) Weekly VRDNs (FirstEnergy Generation Corp.)/(Key Bank, N.A. LOC), 1.100%, 10/7/2009	10,000,000
	TOTAL	213,400,000
	Oklahoma – 0.0%
1,000,000	Garfield County, OK Industrial Authority Pollution Control, (Series 1995-A) Weekly VRDNs (Oklahoma Gas and Electric Co.), 0.600%, 10/7/2009	1,000,000
	Pennsylvania – 3.4%
5,500,000	Chester County, PA IDA, (Series 2007) Weekly VRDNs (YMCA of the Brandywine Valley)/(Fulton Bank LOC), 2.750%, 10/1/2009	5,500,000
25,000,000	Delaware Valley, PA Regional Finance Authority, (Series 1985B) Weekly VRDNs (Bayerische Landesbank LOC), 0.500%, 10/7/2009	25,000,000
6,800,000	Delaware Valley, PA Regional Finance Authority, (Series 1985C) Weekly VRDNs (Bayerische Landesbank LOC), 0.500%, 10/7/2009	6,800,000
23,100,000	Delaware Valley, PA Regional Finance Authority, (Series 1985D) Weekly VRDNs (Bayerische Landesbank LOC), 0.500%, 10/7/2009	23,100,000
2,240,000	Lancaster, PA IDA, (Series 2005A) Weekly VRDNs (Farm & Home Foundation of Lancaster)/(Fulton Bank LOC), 2.750%, 10/1/2009	2,240,000
40,720,000	Pennsylvania State Higher Education Facilities Authority, (Series 2007B) Weekly VRDNs (La Salle University)/(Citizens Bank of Pennsylvania LOC), 1.000%, 10/7/2009	40,720,000
4,285,000	Southcentral PA, General Authority, (Series 2000) Weekly VRDNs (Cerebral Palsy Home, Inc.)/(Fulton Bank LOC), 2.750%, 10/1/2009	4,285,000
9,300,000	Southcentral PA, General Authority, (Series 2008D) Weekly VRDNs (Wellspan Health Obligated Group)/(SunTrust Bank LOC), 0.940%, 10/7/2009	9,300,000
	TOTAL	116,945,000
	Rhode Island – 0.8%
8,475,000	Rhode Island State Health and Educational Building Corp., (Series 2000) Weekly VRDNs (Moses Brown School)/(RBS Citizens Bank N.A. LOC), 1.750%, 10/7/2009	8,475,000

Annual Shareholder Report


$4,475,000	Rhode Island State Health and Educational Building Corp., (Series 2003) Weekly VRDNs (St. John Baptist De La Salle Institute)/(RBS Citizens Bank N.A. LOC), 1.750%, 10/7/2009	4,475,000
10,900,000	Rhode Island State Health and Educational Building Corp., (Series 2006) Weekly VRDNs (Child and Family Services of Newport County)/(RBS Citizens Bank N.A. LOC), 1.750%, 10/7/2009	10,900,000
4,990,000	Rhode Island State Health and Educational Building Corp., (Series 2007) Weekly VRDNs (CVS-Highlander Charter School, Inc.)/(RBS Citizens Bank N.A. LOC), 1.750%, 10/7/2009	4,990,000
	TOTAL	28,840,000
	South Carolina – 0.6%
8,800,000	Piedmont Municipal Power Agency, SC, (Series 2008D) Weekly VRDNs (Assured Guaranty Corp. INS)/(Dexia Credit Local LIQ), 0.540%, 10/1/2009	8,800,000
10,000,000	South Carolina Jobs-EDA, (Series 1997) Weekly VRDNs (Waste Management, Inc.)/(SunTrust Bank LOC), 1.100%, 10/7/2009	10,000,000
	TOTAL	18,800,000
	Tennessee – 2.3%
5,495,000	Blount County, TN Health and Educational Facilities Board, (Series 2000) Weekly VRDNs (Presbyterian Homes of TN, Inc.)/(SunTrust Bank LOC), 0.950%, 10/7/2009	5,495,000
7,800,000	Dickson County, TN IDB, (Series 1997) Weekly VRDNs (Jackson Foundation)/(SunTrust Bank LOC), 0.900%, 10/7/2009	7,800,000
10,600,000	Hendersonville, TN IDB, (Series 2000) Weekly VRDNs (Pope John Paul II High School, Inc.)/(SunTrust Bank LOC), 0.950%, 10/7/2009	10,600,000
25,000,000	Johnson City, TN Health & Education Facilities Board, (Series 2007A) Weekly VRDNs (Mountain States Health Alliance)/(Regions Bank, Alabama LOC), 2.500%, 10/7/2009	25,000,000
6,885,000	Knox County, TN Health Education & Housing Facilities Board, (Series 2000) Weekly VRDNs (Johnson Bible College)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	6,885,000
13,565,000	Memphis-Shelby County, TN Industrial Development Board, (Series 1999) Weekly VRDNs (UT Medical Group, Inc.)/ (SunTrust Bank LOC), 0.900%, 10/1/2009	13,565,000
9,070,000	Metropolitan Nashville, TN Airport Authority, (Series 2003) Weekly VRDNs (SunTrust Bank LOC), 1.000%, 10/7/2009	9,070,000
	TOTAL	78,415,000
	Texas – 0.8%
17,870,000	Austin, TX, Travis and Williamson Counties (Series 2008) Weekly VRDNs (Austin, TX Water and Wastewater System)/(Dexia Credit Local LOC), 0.450%, 10/1/2009	17,870,000

Annual Shareholder Report


$10,000,000	Harris County, TX Education Facilities Finance Corp., (Series 2008E) Daily VRDNs (Young Men's Christian Association of the Greater Houston Area)/(Regions Bank, Alabama LOC), 0.500%, 10/1/2009	10,000,000
	TOTAL	27,870,000
	Utah – 0.5%
15,500,000	Salt Lake County, UT Solid Waste Disposal, (Series A) Weekly VRDNs (Kennecott Utah Copper Corp.)/(GTD by Rio Tinto PLC), 3.250%, 10/7/2009	15,500,000
	Virginia – 1.3%
11,750,000	Albemarle County, VA IDA, (Series 2007) Weekly VRDNs (Thomas Jefferson Foundation, Inc.)/(SunTrust Bank LOC), 0.850%, 10/7/2009	11,750,000
12,565,000	Madison County, VA IDA, (Series 2007) Daily VRDNs (Woodberry Forest School)/(SunTrust Bank LOC), 0.410%, 10/1/2009	12,565,000
2,400,000	Richmond, VA IDA, (Series 2001) Daily VRDNs (Church Schools in the Diocese of Virginia)/(SunTrust Bank LOC), 0.600%, 10/1/2009	2,400,000
13,895,000	Richmond, VA IDA, (Series 2005) Daily VRDNs (Church Schools in the Diocese of Virginia)/(SunTrust Bank LOC), 0.600%, 10/1/2009	13,895,000
4,000,000	Roanoke, VA IDA, (Series 2005A-1) Daily VRDNs (Carilion Health System Obligated Group)/(FSA INS)/(Wachovia Bank N.A. LIQ), 0.320%, 10/1/2009	4,000,000
	TOTAL	44,610,000
	West Virginia – 0.9%
30,800,000	Cabell County, WV, (Series 2007A) Weekly VRDNs (MSH-Marshall LLC)/(Regions Bank, Alabama LOC), 1.600%, 10/1/2009	30,800,000
	Wisconsin – 1.4%
2,000,000	Columbus, WI, (Series 1994) Weekly VRDNs (Maysteel Corp.)/(U.S. Bank, N.A. LOC), 1.400%, 10/1/2009	2,000,000
6,165,000	Wisconsin State HEFA, (Series 2005) Daily VRDNs (National Regency of New Berlin, Inc.)/(Marshall & Ilsley Bank, Milwaukee LOC), 3.500%, 10/1/2009	6,165,000
38,330,000	Wisconsin State HEFA, (Series 2008) Weekly VRDNs (Agnesian Healthcare, Inc.)/(Marshall & Ilsley Bank, Milwaukee LOC), 2.320%, 10/1/2009	38,330,000
	TOTAL	46,495,000
	TOTAL SHORT-TERM MUNICIPALS (IDENTIFIED COST $2,015,854,000)	2,015,854,000
	TOTAL INVESTMENTS — 97.4% (IDENTIFIED COST $3,316,997,513)⁶	3,329,026,514
	OTHER ASSETS AND LIABILITIES - NET — 2.6%⁷	89,731,566
	TOTAL NET ASSETS — 100%	$3,418,758,080

Securities that are subject to the federal alternative minimum tax (AMT) represent 2.0% of the portfolio as calculated based upon total market value (percentage is unaudited).

Annual Shareholder Report

1	Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At September 30, 2009, these restricted securities amounted to $176,970,350, which represented 5.2% of total net assets.
2	Denotes a restricted security that may be resold without restriction to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Fund's Board of Directors (the “Directors”). At September 30, 2009, these liquid restricted securities amounted to $170,930,000, which represented 5.0% of total net assets.
3	Non-income producing security.
4	Market quotations and price evaluations are not available. Fair value determined in accordance with procedures established by and under the general supervision of the Directors.
5	Current rate and next reset date shown for Variable Rate Demand Notes.
6	The cost of investments for federal tax purposes amounts to $3,316,993,074.
7	Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

Note: The categories of investments are shown as a percentage of total net assets at September 30, 2009.

Annual Shareholder Report

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:
Level 1 — quoted prices in active markets for identical securities
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used, as of September 30, 2009, in valuing the Fund's assets carried at fair value:

Valuation Inputs
	Level 1 - Quoted Prices and Investments in Mutual Funds	Level 2 - Other Significant Observable Inputs	Level 3 - Significant Unobservable Inputs	Total
Debt Securities:
Municipal Bonds	$ —	$1,313,172,514	$ —	$1,313,172,514
Short-Term Municipals	—	2,015,854,000	—	2,015,854,000
TOTAL SECURITIES	$ —	$3,329,026,514	$ —	$3,329,026,514

Annual Shareholder Report

The following acronyms are used throughout this portfolio:

AMBAC	— American Municipal Bond Assurance Corporation
ARS	— Auction Rate Securities
BANs	— Bond Anticipation Notes
COL	— Collateralized
COP	— Certificates of Participation
CP	— Commercial Paper
CSD	— Central School District
EDA	— Economic Development Authority
EDFA	— Economic Development Financing Authority
FGIC	— Financial Guaranty Insurance Company
FHLB	— Federal Home Loan Bank
FSA	— Financial Security Assurance
GANs	— Grant Anticipation Notes
GO	— General Obligation
GTD	— Guaranteed
HDA	— Hospital Development Authority
HEFA	— Health and Education Facilities Authority
HFA	— Housing Finance Authority
HFDC	— Health Facility Development Corporation
IDA	— Industrial Development Authority
IDB	— Industrial Development Bond
IDRBs	— Industrial Development Revenue Bonds
INS	— Insured
ISD	— Independent School District
LID	— Local Improvement District
LIQ(s)	— Liquidity Agreement(s)
LOC(s)	— Letter(s) of Credit
LT	— Limited Tax
PCFA	— Pollution Control Finance Authority
PCR	— Pollution Control Revenue
PCRBs	— Pollution Control Revenue Bonds
PRF	— Pre-refunded
RANs	— Revenue Anticipation Notes
ROCs	— Reset Option Certificates
SID	— Special Improvement District
TANs	— Tax Anticipation Notes
TOBs	— Tender Option Bonds
USD	— Unified School District
UT	— Unlimited Tax
VRDNs	— Variable Rate Demand Notes

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

Statement of Assets and Liabilities

September 30, 2009

Assets:
Total investments in securities, at value (identified cost $3,316,997,513)		$3,329,026,514
Cash		37,106
Income receivable		14,886,418
Receivable for investments sold		89,572,537
Receivable for shares sold		54,560,336
TOTAL ASSETS		3,488,082,911
Liabilities:
Payable for investments purchased	$40,120,316
Payable for shares redeemed	27,429,130
Income distribution payable	624,030
Payable for distribution services fee (Note 5)	397,356
Payable for shareholder services fee (Note 5)	480,863
Accrued expenses	273,136
TOTAL LIABILITIES		69,324,831
Net assets for 341,196,757 shares outstanding		$3,418,758,080
Net Assets Consist of:
Paid-in capital		$3,412,463,267
Net unrealized appreciation of investments		12,029,001
Accumulated net realized loss on investments		(5,735,215)
Undistributed net investment income		1,027
TOTAL NET ASSETS		$3,418,758,080
Net Asset Value, Offering Price and Redemption Proceeds Per Share
Institutional Shares:
$875,234,729 ÷ 87,349,639 shares outstanding, $0.001 par value, 500,000,000 shares authorized		$10.02
Offering price per share		$10.02
Redemption proceeds per share		$10.02
Class A Shares:
$2,543,523,351 ÷ 253,847,118 shares outstanding, $0.001 par value, 500,000,000 shares authorized		$10.02
Offering price per share (100/98.00 of $10.02)		$10.22
Redemption proceeds per share		$10.02

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

Statement of Operations

Year Ended September 30, 2009

Investment Income:
Interest			$38,846,220
Expenses:
Investment adviser fee (Note 5)		$9,011,784
Administrative personnel and services fee (Note 5)		1,165,764
Custodian fees		59,979
Transfer and dividend disbursing agent fees and expenses		133,871
Directors'/Trustees' fees		7,858
Auditing fees		24,800
Legal fees		5,165
Portfolio accounting fees		173,235
Distribution services fee — Class A Shares (Note 5)		2,835,120
Shareholder services fee — Class A Shares (Note 5)		2,833,477
Account administration fee — Class A Shares		1,642
Share registration costs		399,005
Printing and postage		41,636
Insurance premiums		6,927
Taxes		92,185
Miscellaneous		3,810
TOTAL EXPENSES		16,796,258
Waivers and Reduction:
Waiver of investment adviser fee (Note 5)	$(5,772,341)
Waiver of administrative personnel and services fee (Note 5)	(22,770)
Waiver of distribution services fee — Class A Shares (Note 5)	(567,024)
Reduction of custodian fees (Note 6)	(146)
TOTAL WAIVERS AND REDUCTION		$(6,362,281)
Net expenses			$10,433,977
Net investment income			28,412,243
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments			(1,405,085)
Net change in unrealized depreciation of investments			15,979,467
Net realized and unrealized gain on investments			14,574,382
Change in net assets resulting from operations			$42,986,625

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

Statement of Changes in Net Assets

Year Ended September 30	2009	2008
Increase (Decrease) in Net Assets
Operations:
Net investment income	$28,412,243	$12,585,266
Net realized loss on investments	(1,405,085)	(1,286,613)
Net change in unrealized appreciation/depreciation of investments	15,979,467	(3,289,467)
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS	42,986,625	8,009,186
Distributions to Shareholders:
Distributions from net investment income
Institutional Shares	(8,320,726)	(5,676,675)
Class A Shares	(20,089,793)	(6,895,399)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS	(28,410,519)	(12,572,074)
Share Transactions:
Proceeds from sale of shares	3,823,621,229	876,468,265
Net asset value of shares issued to shareholders in payment of distributions declared	21,677,679	7,994,458
Cost of shares redeemed	(1,202,373,304)	(330,237,970)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS	2,642,925,604	554,224,753
Change in net assets	2,657,501,710	549,661,865
Net Assets:
Beginning of period	761,256,370	211,594,505
End of period (including undistributed net investment income of $1,027 and $2,983, respectively)	$3,418,758,080	$761,256,370

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

Notes to Financial Statements

September 30, 2009

1. ORGANIZATION

Federated Fixed Income Securities, Inc. (the “Corporation”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Corporation consists of two portfolios. The financial statements included herein are only those of Federated Municipal Ultrashort Fund (the “Fund”), a diversified portfolio. The financial statements of the other portfolio are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers two classes of shares: Institutional Shares and Class A Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The financial highlights of the Class A Shares are presented separately. The investment objective of the Fund is to provide current income exempt from federal regular income tax. Interest income from the Fund's investments may be subject to the federal AMT for individuals and corporations and state and local taxes.

2. SIGNIFICANT ACCOUNTING POLICIES

Investment Valuation

In calculating its net asset value (NAV), the Fund generally values investments as follows:

Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Directors.
Fixed-income securities acquired with remaining maturities of 60 days or less are valued at their cost (adjusted for the accretion of any discount or amortization of any premium).
Shares of other mutual funds are valued based upon their reported NAVs.
Derivative contracts listed on exchanges are valued at their reported settlement or closing price.
Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Directors.

Fair Valuation and Significant Events Procedures

With respect to price evaluations of fixed-income securities determined before the close of regular trading on the NYSE, actions by the Federal Reserve Open Market Committee and other significant trends in U.S. fixed-income markets;
Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; and
Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.

Investment Income, Gains and Losses, Expenses and Distributions

Premium and Discount Amortization

All premiums and discounts on fixed-income securities are amortized/accreted for financial statement purposes.

Federal Taxes

Other Taxes

When-Issued and Delayed Delivery Transactions

Restricted Securities

Security	Acquisition Date	Acquisition Cost	Market Value
California Municipal Finance Authority, Solid Waste Disposal Revenue Bonds (Series 2009A), 4.90% TOBs (Waste Management, Inc.), Mandatory Tender 2/1/2010	3/4/2009	$3,000,000	$3,014,370
Yavapai County, AZ IDA Solid Waste Disposal, 4.00% TOBs (Waste Management, Inc.), Mandatory Tender 6/1/2010	5/24/2005	$3,000,000	$3,025,980

Annual Shareholder Report

Other

3. CAPITAL STOCK

The following tables summarize capital stock activity:

Year Ended September 30	2009		2008
Institutional Shares:	Shares	Amount	Shares	Amount
Shares sold	93,260,398	$931,780,305	18,256,416	$181,907,226
Shares issued to shareholders in payment of distributions declared	427,808	4,269,296	200,472	1,997,037
Shares redeemed	(25,973,055)	(259,253,515)	(13,203,938)	(131,652,809)
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS	67,715,151	$676,796,086	5,252,950	$52,251,454

Year Ended September 30	2009		2008
Class A Shares:	Shares	Amount	Shares	Amount
Shares sold	289,473,031	$2,891,840,924	69,734,047	$694,561,039
Shares issued to shareholders in payment of distributions declared	1,744,983	17,408,383	602,669	5,997,421
Shares redeemed	(94,495,438)	(943,119,789)	(19,949,515)	(198,585,161)
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS	196,722,576	$1,966,129,518	50,387,201	$501,973,299
NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS	264,437,727	$2,642,925,604	55,640,151	$554,224,753

4. FEDERAL TAX INFORMATION

For the year ended September 30, 2009, permanent differences identified and reclassified among the components of net assets were as follows:

Increase (Decrease)
Undistributed Net Investment Income (Loss)		Accumulated Net Realized Gain (Loss)
$(3,680)		$3,680

Net investment income (loss), net realized gains (losses) and net assets were not affected by this reclassification.

Annual Shareholder Report

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended September 30, 2009 and 2008, was as follows:

	2009	2008
Ordinary income	$18,100	$ —
Tax-exempt income	$28,392,419	$12,572,074

As of September 30, 2009, the components of distributable earnings on a tax basis were as follows:

Undistributed tax-exempt income	$1,027
Net unrealized appreciation	$12,033,440
Capital loss carryforwards and deferrals	$(5,739,654)

The difference between book-basis and tax-basis net unrealized appreciation/depreciation is attributable to differing treatments for discount accretion/premium amortization on debt securities.

Expiration Year	Expiration Amount
2010	$541
2011	$353,600
2012	$59,924
2013	$884,421
2014	$978,739
2015	$631,311
2016	$148,172
2017	$1,306,058

Under current tax regulations, capital losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. As of September 30, 2009, for federal income tax purposes, post October losses of $1,376,888 were deferred to October 1, 2009.

Annual Shareholder Report

5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Administrative Fee

Administrative Fee	Average Aggregate Daily Net Assets of the Federated Funds
0.150%	on the first $5 billion
0.125%	on the next $5 billion
0.100%	on the next $10 billion
0.075%	on assets in excess of $20 billion

The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares. Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion. For the year ended September 30, 2009, the net fee paid to FAS was 0.076% of average daily net assets of the Fund. FAS waived $22,770 of its fee.

Distribution Services Fee

Sales Charges

Annual Shareholder Report

Shareholder Services Fee

Interfund Transactions

Expense Limitation

General

Certain Officers and Directors of the Fund are Officers and Directors or Trustees of the above companies.

6. EXPENSE Reduction

7. Investment TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended September 30, 2009, were as follows:

Purchases	$1,122,191,187
Sales	$308,594,058

8. LINE OF CREDIT

Annual Shareholder Report

9. INTERFUND LENDING

10. Legal Proceedings

Since October 2003, Federated Investors, Inc. and related entities (collectively, “Federated”) and various Federated funds (Federated Funds) have been named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. These lawsuits began to be filed shortly after Federated's first public announcement that it had received requests for information on shareholder trading activities in the Federated Funds from the SEC, the Office of the New York State Attorney General (NYAG) and other authorities. In that regard, on November 28, 2005, Federated announced that it had reached final settlements with the SEC and the NYAG with respect to those matters. As Federated previously reported in 2004, it has already paid approximately $8.0 million to certain funds as determined by an independent consultant. As part of these settlements, Federated agreed to pay for the benefit of fund shareholders additional disgorgement and a civil money penalty in the aggregate amount of an additional $72.0 million. Federated entities have also been named as defendants in several additional lawsuits that are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees. The Board of the Federated Funds retained the law firm of Dickstein Shapiro LLP to represent the Federated Funds in these lawsuits. Federated and the Federated Funds, and their respective counsel have been defending this litigation, and none of the Federated Funds remains a defendant in any of the lawsuits (though some could potentially receive any recoveries as nominal defendants). Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these lawsuits, all of which seek unquantified damages, attorneys' fees and expenses, and future potential similar suits is uncertain. Although we do not believe that these lawsuits will have a material adverse effect on the Federated Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the regulatory investigations will not result in increased Federated Fund redemptions, reduced sales of Federated Fund shares or other adverse consequences for the Federated Funds.

11. Subsequent events

Management has evaluated subsequent events through November 24, 2009, the date the financial statements were issued, and determined that no events have occurred that require additional disclosure.

12. FEDERAL TAX INFORMATION (UNAUDITED)

For the year ended September 30, 2009, 99.94% of the distributions from net investment income is exempt from federal income tax, other than the federal AMT.

Annual Shareholder Report

Report of Independent Registered Public Accounting Firm

TO THE BOARD OF DIRECTORS OF Federated fixed income securities, inc. AND SHAREHOLDERS OF Federated municipal Ultrashort fund:

Boston, Massachusetts

November 24, 2009

Annual Shareholder Report

Board of Directors and Corporation Officers

Interested DIRECTORS Background

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
John F. Donahue* Birth Date: July 28, 1924 DIRECTOR Began serving: October 1991	Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Complex's Executive Committee. Previous Positions: Chairman of the Federated Fund Complex; Trustee, Federated Investment Management Company; Chairman and Director, Federated Investment Counseling.
J. Christopher Donahue* Birth Date: April 11, 1949 PRESIDENT AND DIRECTOR Began serving: January 2000	Principal Occupations: Principal Executive Officer and President of the Federated Fund Complex; Director or Trustee of some of the Funds in the Federated Fund Complex; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd.

*	Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries.

Annual Shareholder Report

INDEPENDENT DIRECTORS Background

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
John T. Conroy, Jr., Ph.D. Birth Date: June 23, 1937 DIRECTOR Began serving: October 1991	Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman of the Board, Investment Properties Corporation; Partner or Trustee in private real estate ventures in Southwest Florida; Assistant Professor in Theology at Barry University and Blessed Edmund Rice School for Pastoral Ministry. Previous Positions: President, Investment Properties Corporation; Senior Vice President, John R. Wood and Associates, Inc., Realtors; President, Naples Property Management, Inc. and Northgate Village Development Corporation.
Nicholas P. Constantakis Birth Date: September 3, 1939 DIRECTOR Began serving: February 1998	Principal Occupation: Director or Trustee of the Federated Fund Complex. Other Directorships Held: Director and Chairman of the Audit Committee, Michael Baker Corporation (architecture, engineering and construction services). Previous Position: Partner, Andersen Worldwide SC.
John F. Cunningham Birth Date: March 5, 1943 DIRECTOR Began serving: January 1999	Principal Occupation: Director or Trustee of the Federated Fund Complex. Other Directorships Held: Chairman, President and Chief Executive Officer, Cunningham & Co., Inc. (strategic business consulting); Trustee Associate, Boston College. Previous Positions: Director, Redgate Communications and EMC Corporation (computer storage systems); Chairman of the Board and Chief Executive Officer, Computer Consoles, Inc.; President and Chief Operating Officer, Wang Laboratories; Director, First National Bank of Boston; Director, Apollo Computer, Inc.
Maureen Lally-Green Birth Date: July 5, 1949 DIRECTOR Began serving: May 2009	Principal Occupations: Director or Trustee of the Federated Fund Complex; Director, Office of Church Relations, Diocese of Pittsburgh; Adjunct Professor of Law, Duquesne University School of Law. Other Directorships Held: Director, Auberle; Trustee St. Francis University; Director, Ireland Institute of Pittsburgh; Director, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society, Allegheny County; Director, Carlow University. Previous Position: Pennsylvania Superior Court Judge.

Annual Shareholder Report

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
Peter E. Madden Birth Date: March 16, 1942 DIRECTOR Began serving: October 1991	Principal Occupation: Director or Trustee and Chairman of the Board of the Federated Fund Complex. Other Directorship Held: Board of Overseers, Babson College. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange.
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 DIRECTOR Began serving: January 1999	Principal Occupations: Director or Trustee and Chairman of the Audit Committee of the Federated Fund Complex; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly, Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President DVC Group, Inc. (marketing, communications and technology).
R. James Nicholson Birth Date: February 4, 1938 DIRECTOR Began serving: November 2007	Principal Occupations: Director or Trustee of the Federated Fund Complex; Senior Counsel, Brownstein Hyatt Farber Schrek, P.C.; Former Secretary of the U.S. Dept. of Veterans Affairs; Former U.S. Ambassador to the Holy See; Former Chairman of the Republican National Committee. Other Directorships Held: Director, Horatio Alger Association; Director, The Daniels Fund. Previous Positions: Colonel, U.S. Army Reserve; Partner, Calkins, Kramer, Grimshaw and Harring, P.C.; General Counsel, Colorado Association of Housing and Building; Chairman and CEO, Nicholson Enterprises, Inc. (real estate holding company); Chairman and CEO, Renaissance Homes of Colorado.
Thomas M. O'Neill Birth Date: June 14, 1951 DIRECTOR Began serving: October 2006	Principal Occupations: Director or Trustee of the Federated Fund Complex; Managing Director and Partner, Navigator Management Company, L.P. (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College. Previous Positions: Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); Director, Midway Pacific (lumber).

Annual Shareholder Report

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
John S. Walsh Birth Date: November 28, 1957 DIRECTOR Began serving: January 1999	Principal Occupations: Director or Trustee of the Federated Fund Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Previous Position: Vice President, Walsh & Kelly, Inc.
James F. Will Birth Date: October 12, 1938 DIRECTOR Began serving: April 2006	Principal Occupations: Director or Trustee of the Federated Fund Complex; formerly, Vice Chancellor and President, Saint Vincent College. Other Directorships Held: Trustee, Saint Vincent College; Alleghany Corporation. Previous Positions: Chairman, President and Chief Executive Officer, Armco, Inc.; President and Chief Executive Officer, Cyclops Industries; President and Chief Operating Officer, Kaiser Steel Corporation.

OFFICERS

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years and Previous Position(s)
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Began serving: November 1991	Principal Occupations: Executive Vice President and Secretary of the Federated Fund Complex; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp.
Richard A. Novak Birth Date: December 25, 1963 TREASURER Began serving: January 2006	Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. Previous Positions: Controller of Federated Investors, Inc.; Vice President, Finance of Federated Services Company; held various financial management positions within The Mercy Hospital of Pittsburgh; Auditor, Arthur Andersen & Co.
Richard B. Fisher Birth Date: May 17, 1923 VICE CHAIRMAN Began serving: August 2002	Principal Occupations: Vice Chairman or Vice President of some of the Funds in the Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp. Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice President, Federated Investors, Inc.; Director and Chief Executive Officer, Federated Securities Corp.

Annual Shareholder Report

Name Birth Date Positions Held with Corporation Date Service Began	Principal Occupation(s) for Past Five Years and Previous Position(s)
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Began serving: August 2004	Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Complex; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of its subsidiaries. Mr. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin.
Robert J. Ostrowski Birth Date: April 26, 1963 CHIEF INVESTMENT OFFICER Began serving: May 2004	Principal Occupations: Robert J. Ostrowski joined Federated in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. He has been a Senior Vice President of the Fund's Adviser since 1997. Mr. Ostrowski is a Chartered Financial Analyst. He received his M.S. in Industrial Administration from Carnegie Mellon University.
Mary Jo Ochson Birth Date: September 12, 1953 CHIEF INVESTMENT OFFICER Began serving: May 2004	Principal Occupations: Mary Jo Ochson was named Chief Investment Officer of tax-exempt, fixed-income products in 2004. She joined Federated in 1982 and has been a Senior Portfolio Manager and a Senior Vice President of the Fund's Adviser since 1996. Ms. Ochson is a Chartered Financial Analyst and received her M.B.A. in Finance from the University of Pittsburgh.
Joseph M. Balestrino Birth Date: November 3, 1954 VICE PRESIDENT Began serving: November 1998	Principal Occupations: Joseph M. Balestrino is Vice President of the Corporation. Mr. Balestrino joined Federated in 1986 and has been a Senior Portfolio Manager and Senior Vice President of the Fund's Adviser since 1998. He was a Portfolio Manager and a Vice President of the Fund's Adviser from 1995 to 1998. Mr. Balestrino served as a Portfolio Manager and an Assistant Vice President of the Adviser from 1993 to 1995. Mr. Balestrino is a Chartered Financial Analyst and received his Master's Degree in Urban and Regional Planning from the University of Pittsburgh.
Jeff A. Kozemchak Birth Date: January 15, 1960 VICE PRESIDENT Began serving: November 1998	Principal Occupations: Jeff A. Kozemchak has been the Fund's Portfolio Manager since October 2000. Jeff A. Kozemchak is Vice President of the Corporation. Mr. Kozemchak joined Federated in 1987 and has been a Senior Portfolio Manager since 1996 and a Senior Vice President of the Fund's Adviser since 1999. He was a Portfolio Manager until 1996 and a Vice President of the Fund's Adviser from 1993 to 1998. Mr. Kozemchak is a Chartered Financial Analyst and received his M.S. in Industrial Administration from Carnegie Mellon University in 1987.

Annual Shareholder Report

Evaluation and Approval of Advisory Contract - May 2009

Federated Municipal Ultrashort Fund (the “Fund”)

Annual Shareholder Report

Voting Proxies on Fund Portfolio Securities

Quarterly Portfolio Schedule

Annual Shareholder Report

Federated Municipal Ultrashort Fund
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561

Federated Securities Corp., Distributor

Cusip 31417P858

29363 (11/09)

Federated is a registered mark of Federated Investors, Inc.
2009 Federated Investors, Inc.

Item 2. Code of Ethics

(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics (the "Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers") that applies to the registrant's Principal Executive Officer and Principal Financial Officer; the registrant's Principal Financial Officer also serves as the Principal Accounting Officer.

(d) Not Applicable

(e) Not Applicable

(f)(3) The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.

Item 3. Audit Committee Financial Expert

The registrant's Board has determined that each of the following members of the Board's Audit Committee is an “audit committee financial expert,” and is "independent," for purposes of this Item: Nicholas P. Constantakis, Charles F. Mansfield, Jr. and Thomas M. O’Neill.

Item 4. Principal Accountant Fees and Services

(a) Audit Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2009 - $48,900

Fiscal year ended 2008 - $47,500

(b) Audit-Related Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2009 - $0

Fiscal year ended 2008 - $0

Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.

Fiscal year ended 2009 - $0

Fiscal year ended 2008 - $0

Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.

(d) All Other Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2009 - $0

Fiscal year ended 2008 - $0

Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.

(e)(1) Audit Committee Policies regarding Pre-approval of Services.

The Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditor in order to assure that the provision of such services do not impair the auditor’s independence. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.

Certain services have the general pre-approval of the Audit Committee. The term of the general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will annually review the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee and may grant general pre-approval for such services. The Audit Committee will revise the list of general pre-approved services from time to time, based on subsequent determinations. The Audit Committee will not delegate its responsibilities to pre-approve services performed by the independent auditor to management.

The Audit Committee has delegated pre-approval authority to its Chairman. The Chairman will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval authority when the Chairman is unavailable.

AUDIT SERVICES

The annual Audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee. The Audit Committee must approve any changes in terms, conditions and fees resulting from changes in audit scope, registered investment company (RIC) structure or other matters.

In addition to the annual Audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other Audit Services, which are those services that only the independent auditor reasonably can provide. The Audit Committee has pre-approved certain Audit services, all other Audit services must be specifically pre-approved by the Audit Committee.

AUDIT-RELATED SERVICES

Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor, and has pre-approved certain Audit-related services, all other Audit-related services must be specifically pre-approved by the Audit Committee.

TAX SERVICES

The Audit Committee believes that the independent auditor can provide Tax services to the Company such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the Audit Committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee has pre-approved certain Tax services, all Tax services involving large and complex transactions must be specifically pre-approved by the Audit Committee.

ALL OTHER SERVICES

With respect to the provision of services other than audit, review or attest services the pre-approval requirement is waived if:

(1)

The aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant to its accountant during the fiscal year in which the services are provided;

(2)

Such services were not recognized by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant at the time of the engagement to be non-audit services; and

(3)

Such services are promptly brought to the attention of the Audit Committee of the issuer and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the Audit Committee.

The Audit Committee may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, and would not impair the independence of the auditor.

The SEC’s rules and relevant guidance should be consulted to determine the precise definitions of prohibited non-audit services and the applicability of exceptions to certain of the prohibitions.

PRE-APPROVAL FEE LEVELS

Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee.

PROCEDURES

Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the independent auditor and the Principal Accounting Officer and/or Internal Auditor, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.

(e)(2) Percentage of services identified in items 4(b) through 4(d) that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:

4(b)

Fiscal year ended 2009 – 0%

Fiscal year ended 2008 - 0%

Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.

4(c)

Fiscal year ended 2009 – 0%

Fiscal year ended 2008 – 0%

4(d)

Fiscal year ended 2009 – 0%

Fiscal year ended 2008– 0%

(f)

(g)	Non-Audit Fees billed to the registrant, the registrant’s investment adviser, and certain entities controlling, controlled by or under common control with the investment adviser:

Fiscal year ended 2009 - $112,380

Fiscal year ended 2008 - $130,362

(h) The registrant’s Audit Committee has considered that the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5. Audit Committee of Listed Registrants

Not Applicable

Item 6. Schedule of Investments

Not Applicable

Item 7.

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

Not Applicable

Item 8.

Portfolio Managers of Closed-End Management Investment Companies

Not Applicable

Item 9.

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

Not Applicable

Item 10. Submission of Matters to a Vote of Security Holders

Not Applicable

Item 11. Controls and Procedures

(a) The registrant’s President and Treasurer have concluded that the

registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Exhibits

SIGNATURES

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

Registrant Federated Fixed Income Securities, Inc.



By:	/s/ Richard A. Novak
	Richard A. Novak
	Principal Financial Officer

Date	November 19, 2009

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



By:	/s/ J. Christopher Donahue
	J. Christopher Donahue
	Principal Executive Officer

Date	November 19, 2009



By:	/s/ Richard A. Novak
	Richard A. Novak
	Principal Financial Officer

Date	November 19, 2009

Federated Fixed Income Securities N-CSRCertified annual shareholder report (management investment company)