N-Q 1 incomenqform06302012.htm FIRST INVESTORS INCOME FUNDS UNITED STATES

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM N-Q

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QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT

INVESTMENT COMPANY

INVESTMENT COMPANY ACT FILE NUMBER 811-3967

 

FIRST INVESTORS INCOME FUNDS

(Exact name of registrant as specified in charter)

110 Wall Street

New York, NY 10005

(Address of principal executive offices) (Zip code)

Joseph I. Benedek

First Investors Management Company, Inc.

Raritan Plaza I

Edison, NJ 08837-3620

(Name and address of agent for service)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:

1-212-858-8000

DATE OF FISCAL YEAR END: SEPTEMBER 30, 2012

DATE OF REPORTING PERIOD: JUNE 30, 2012

   

 

Item 1. Schedule of Investments

The Quarterly Schedule of Portfolio Holdings follows


Portfolio of Investments (unaudited)
CASH MANAGEMENT FUND
June 30, 2012

                     
                     
                     
Principal           Interest      
Amount     Security     Rate *   Value
      CORPORATE NOTES-37.5%              
$ 6,500 M   Abbott Laboratories, 7/30/2012   (a)   0.14 % $       6,499,292
6,000 M   BASF SE, 9/26/2012   (a)   0.19     5,997,276
5,000 M   Coca-Cola Co., 10/4/2012   (a)   0.23     4,996,996
2,900 M   Google, Inc., 8/21/2012   (a)   0.13     2,899,476
2,500 M   Honeywell International, Inc., 9/27/2012 (a)   0.14     2,499,154
2,300 M   Johnson & Johnson, 10/4/2012   (a)   0.15     2,299,099
6,500 M   Novartis Securities Investment, Ltd., 8/13/2012 (a)   0.15     6,498,862
6,500 M   PepsiCo, Inc., 8/14/2012   (a)   0.11     6,499,146
3,500 M   Unilever Capital Corp., 9/24/2012 (a)   0.18     3,498,530
4,000 M   Wal-Mart Stores, Inc., 8/6/2012   (a)   0.13     3,999,495
5,500 M   Walt Disney Co., 7/10/2012   (a)   0.12     5,499,853
Total Value of Corporate Notes (cost $51,187,179)             51,187,179
      VARIABLE AND FLOATING RATE NOTES-26.2%            
      Federal Farm Credit Bank:              
7,000 M   8/8/2012       0.25     7,000,216
3,000 M   9/24/2012       0.20     2,999,589
5,100 M   3/6/2013       0.25     5,100,519
      Freddie Mac:              
1,290 M   10/12/2012       0.29     1,290,328
4,800 M   3/21/2013       0.20     4,801,424
3,000 M   General Electric Capital Corp., 7/27/2012     0.64     3,000,801
5,700 M   Mississippi Business Finance Corp. (Chevron USA, Inc.), 12/1/2030     0.14     5,700,000
5,835 M   Valdez, Alaska Marine Terminal Rev. (Exxon Pipeline Co., Project B), 12/1/2033     0.13     5,835,000
Total Value of Variable and Floating Rate Notes (cost $35,727,877)           35,727,877
      U.S. GOVERNMENT AGENCY OBLIGATIONS-24.7%            
      Fannie Mae:              
6,000 M   7/17/2012       0.07     5,999,825
4,285 M   9/15/2012       0.15     4,321,821
      Federal Home Loan Bank:              
1,000 M   7/18/2012       0.12     999,947
1,200 M   7/20/2012       0.12     1,199,928
3,446 M   9/12/2012       0.14     3,445,070
3,000 M   9/21/2012       0.12     2,999,190
      Freddie Mac:              
2,950 M   7/11/2012       0.10     2,949,926
3,200 M   7/16/2012       0.12     3,199,851
1,000 M   7/20/2012       0.13     999,938
7,600 M   8/21/2012       0.14     7,598,574
Total Value of U.S. Government Agency Obligations (cost $33,714,070)           33,714,070
      SHORT-TERM U.S. GOVERNMENT OBLIGATIONS-10.3%            
      U.S. Treasury Bills:              
4,000 M   7/26/2012       0.04     3,999,894
5,000 M   8/9/2012       0.11     4,999,419
5,000 M   8/23/2012       0.06     4,999,581
Total Value of Short-Term U.S. Government Obligations (cost $13,998,894)           13,998,894
Total Value of Investments (cost $134,628,020)** 98.7 %         134,628,020
Other Assets, Less Liabilities 1.3           1,745,395
Net Assets       100.0 %       $    136,373,415

 


*  The interest rates shown are the effective rates at the time of purchase by the Fund. The
  interest rates shown on variable and floating rate notes are adjusted periodically; the rates
  shown are the rates in effect at June 30, 2012.
   
(a)  Security exempt from registration under Section 4(2) of the Securities Act of 1933. Certain
  restricted securities are exempt from the registration requirements under Section 4(2) of
  the Securities Act of 1933 and may only be sold to qualified institutional investors. At June
  30, 2012, the Fund held eleven Section 4(2) securities with an aggregate value of
  $51,187,179 representing 37.5% of the Fund's net assets.
   
**  Aggregate cost for federal income tax purposes is the same.

 


Accounting Standards Codification ("ASC") 820 established a three-tier hierarchy of inputs to establish a classification of fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below:

Level 1 - Unadjusted quoted prices in active markets for identical securities that the Fund has the ability to access.

Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumption about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

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

The following is a summary, by category of Level, of inputs used to value the Fund's investments as of June 30, 2012:

      Level 1     Level 2     Level 3   Total
Corporate Notes   $ -   $ 51,187,179   $ -   $ 51,187,179
Variable and Floating Rate Notes:            
U.S. Government Agency            
Obligations   -     21,192,076   -     21,192,076
Municipal Bonds   -     11,535,000   -     11,535,000
Corporate Notes   -     3,000,801   -     3,000,801
U.S. Government Agency            
Obligations   -     33,714,070   -     33,714,070
Short-Term U.S. Government            
Obligations   -     13,998,894   -     13,998,894
Total Investments in Securities   $ -   $ 134,628,020   $ -   $ 134,628,020

 

There were no transfers into or from Level 1 and Level 2 by the Fund for the period ended June 30, 2012. Transfers, if any, between Levels are recognized at the end of the reporting period.


Portfolio of Investments (unaudited)
GOVERNMENT FUND
June 30, 2012

                     
 
 
Principal        
Amount     Security             Value
      RESIDENTIAL MORTGAGE-BACKED SECURITIES-99.6%      
      Fannie Mae-4.4%      
$ 7,460 M   5%, 8/1/2039 - 11/1/2039           $ 8,178,082
7,626 M   5.5%, 7/1/2033 - 10/1/2039             8,423,387
                    16,601,469
  Government National Mortgage Association I Program-88.8%          
29,588 M   4%, 8/15/2040 - 1/15/2042     32,408,063
130,526 M   4.5%, 9/15/2033 - 8/15/2041     143,332,501
70,034 M   5%, 6/15/2033 - 6/15/2040     77,559,013
36,125 M   5.5%, 3/15/2033 - 10/15/2039     40,433,142
31,355 M   6%, 3/15/2031 - 5/15/2040     35,581,539
2,350 M   6.5%, 6/15/2034 - 3/15/2038     2,710,359
3,615 M   7%, 6/15/2023 - 4/15/2034             4,333,978
                    336,358,595
  Government National Mortgage Association II Program-6.4%        
22,326 M   4%, 3/20/2042             24,457,705
Total Value of Residential Mortgage-Backed Securities (cost $360,757,606) 99.6 %   377,417,769
Other Assets, Less Liabilities .4           1,437,091
Net Assets       100.0 %       $ 378,854,860

 


  At June 30, 2012, the cost of investments for federal income tax purposes
  was $360,757,606. Accumulated net unrealized appreciation on investments
  was $16,660,163, consisting of $16,713,041 gross unrealized appreciation
  and $52,878 gross unrealized depreciation.

 


Accounting Standards Codification ("ASC") 820 established a three-tier hierarchy of inputs to establish a classification of fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below:

Level 1 - Unadjusted quoted prices in active markets for identical securities that the Fund has the ability to access.

Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumption about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

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

The following is a summary, by category of Level, of inputs used to value the Fund's investments as of June 30, 2012:

      Level 1   Level 2   Level 3   Total
Residential Mortgage-Backed              
Securities   $ -   $ 377,417,769   $ -   $ 377,417,769

 

There were no transfers into or from Level 1 and Level 2 by the Fund for the period ended June 30, 2012. Transfers, if any, between Levels are recognized at the end of the reporting period.


Portfolio of Investments (unaudited)
INVESTMENT GRADE FUND
June 30, 2012

                     
     
     
Principal            
Amount     Security             Value
  CORPORATE BONDS-97.8%          
  Aerospace/Defense-.4%          
$ 1,800 M   BAE Systems Holdings, Inc., 4.95%, 6/1/2014     (a)     $ 1,894,919
  Agriculture-.6%          
2,725 M   Cargill, Inc., 6%, 11/27/2017     (a)       3,244,965
  Automotive-.8%          
4,000 M   Daimler Finance NA, LLC, 2.95%, 1/11/2017     (a)       4,155,236
  Chemicals-1.7%          
3,000 M   Chevron Phillips Chemicals Co., LLC, 8.25%, 6/15/2019     (a)       4,143,042
4,000 M   Dow Chemical Co., 4.25%, 11/15/2020              4,354,848
                     8,497,890
  Consumer Durables-1.0%          
1,550 M   Newell Rubbermaid, Inc., 4.7%, 8/15/2020         1,679,735
3,000 M   Stanley Black & Decker, 5.2%, 9/1/2040              3,368,364
                     5,048,099
  Energy-10.8%          
3,900 M   Canadian Oil Sands, Ltd., 7.75%, 5/15/2019     (a)       4,786,763
4,800 M   DCP Midstream, LLC, 9.75%, 3/15/2019     (a)       6,230,818
5,000 M   Enbridge Energy Partners, LP, 4.2%, 9/15/2021         5,299,170
3,514 M   Maritime & Northeast Pipeline, LLC, 7.5%, 5/31/2014     (a)       3,760,311
4,000 M   Nabors Industries, Inc., 6.15%, 2/15/2018         4,595,764
5,000 M   Petrobras International Finance Co., 5.375%, 1/27/2021         5,413,855
4,100 M   Reliance Holdings USA, Inc., 4.5%, 10/19/2020     (a)       3,859,650
5,800 M   Spectra Energy Capital, LLC, 6.2%, 4/15/2018         6,931,737
4,400 M   Suncor Energy, Inc., 6.85%, 6/1/2039         5,548,963
2,700 M   Valero Energy Corp., 9.375%, 3/15/2019         3,553,060
4,000 M   Weatherford International, Inc., 6.35%, 6/15/2017              4,624,152
                     54,604,243
  Financial Services-14.1%          
2,250 M   Aflac, Inc., 8.5%, 5/15/2019         2,941,186
6,000 M   American Express Co., 7%, 3/19/2018         7,435,728
4,000 M   American International Group, Inc., 4.875%, 9/15/2016         4,246,964
3,800 M   Berkshire Hathaway, Inc., 3.4%, 1/31/2022         3,991,816
4,000 M   BlackRock, Inc., 5%, 12/10/2019         4,579,364
3,260 M   CoBank, ACB, 7.875%, 4/16/2018     (a)       3,981,969
1,800 M   Compass Bank, 6.4%, 10/1/2017         1,682,271
  ERAC USA Finance Co.:          
2,950 M   6.375%, 10/15/2017     (a)       3,451,943
2,800 M   4.5%, 8/16/2021     (a)       2,984,134
4,000 M   Ford Motor Credit Co., LLC, 5%, 5/15/2018         4,257,528
  General Electric Capital Corp.:          
4,000 M   5.625%, 9/15/2017         4,595,540
2,700 M   5.5%, 1/8/2020         3,095,080
4,000 M   Glencore Funding, LLC, 6%, 4/15/2014     (a)       4,206,660
    Harley-Davidson Funding Corp.:        
3,800 M   5.75%, 12/15/2014     (a)       4,117,292
2,100 M   6.8%, 6/15/2018     (a)       2,506,745
4,000 M   Liberty Mutual Group, Inc., 4.95%, 5/1/2022     (a)       3,982,840
4,000 M   Protective Life Corp., 7.375%, 10/15/2019       4,629,984
4,600 M   Prudential Financial Corp., 4.75%, 9/17/2015              4,956,109
                    71,643,153
  Financials-17.7%        
  Bank of America Corp.:        
1,900 M   5.65%, 5/1/2018       2,034,182
1,800 M   5%, 5/13/2021       1,860,386
900 M   5.875%, 2/7/2042       989,457
2,700 M   Barclays Bank, PLC, 5.125%, 1/8/2020       2,934,538
3,168 M   Bear Stearns Cos., Inc., 7.25%, 2/1/2018       3,791,881
  Citigroup, Inc.:        
3,400 M   6.375%, 8/12/2014       3,641,301
6,800 M   6.125%, 11/21/2017       7,542,574
3,000 M   Fifth Third Bancorp, 3.5%, 3/15/2022       3,037,878
  Goldman Sachs Group, Inc.:        
6,000 M   6.15%, 4/1/2018       6,512,376
900 M   5.75%, 1/24/2022       951,794
1,600 M   6.125%, 2/15/2033       1,647,902
2,750 M   6.75%, 10/1/2037       2,703,195
  JPMorgan Chase & Co.:        
6,000 M   6%, 1/15/2018       6,895,386
2,000 M   4.5%, 1/24/2022       2,158,646
  Merrill Lynch & Co., Inc.:        
4,000 M   5%, 1/15/2015       4,141,060
3,600 M   6.4%, 8/28/2017       3,920,213
1,800 M   Mizuho Corporate Bank, Ltd., 2.55%, 3/17/2017     (a)       1,828,278
  Morgan Stanley:        
5,800 M   5.95%, 12/28/2017       5,964,459
5,000 M   6.625%, 4/1/2018       5,234,060
6,000 M   SunTrust Banks, Inc., 6%, 9/11/2017       6,837,432
6,000 M   UBS AG, 4.875%, 8/4/2020       6,421,278
  Wells Fargo & Co.:        
4,000 M   5.625%, 12/11/2017       4,676,480
1,800 M   4.6%, 4/1/2021       2,011,804
1,800 M   3.5%, 3/8/2022              1,855,928
                     89,592,488
  Food/Beverage/Tobacco-8.4%        
4,000 M   Altria Group, Inc., 9.7%, 11/10/2018       5,542,076
4,000 M   Anheuser-Busch InBev Worldwide, Inc., 5.375%, 1/15/2020       4,774,036
2,700 M   Bottling Group, LLC, 5.125%, 1/15/2019       3,184,059
2,600 M   Bunge Limited Finance Corp., 3.2%, 6/15/2017       2,608,720
4,000 M   Corn Products International, Inc., 4.625%, 11/1/2020       4,341,836
4,000 M   Dr. Pepper Snapple Group, Inc., 6.82%, 5/1/2018       4,936,560
4,000 M   Lorillard Tobacco Co., 6.875%, 5/1/2020       4,737,568
3,000 M   Mead Johnson Nutrition Co., 4.9%, 11/1/2019       3,417,555
4,000 M   Philip Morris International, Inc., 5.65%, 5/16/2018       4,836,932
4,000 M   SABMiller Holdings, Inc., 3.75%, 1/15/2022     (a)       4,262,364
                    42,641,706
  Forest Products/Container-.6%        
2,200 M   International Paper Co., 9.375%, 5/15/2019              2,957,392
    Health Care-2.7%        
  Aristotle Holding, Inc.:        
2,700 M   4.75%, 11/15/2021     (a)       2,993,474
1,350 M   3.9%, 2/15/2022     (a)       1,402,096
4,000 M   Biogen IDEC, Inc., 6.875%, 3/1/2018       4,887,660
2,400 M   Novartis Securities Investment, Ltd., 5.125%, 2/10/2019       2,865,427
1,000 M   Roche Holdings, Inc., 6%, 3/1/2019     (a)       1,245,605
                     13,394,262
  Information Technology-5.6%        
3,500 M   Corning, Inc., 4.75%, 3/15/2042       3,682,494
3,000 M   Dell, Inc., 5.875%, 6/15/2019       3,534,732
4,000 M   Harris Corp., 4.4%, 12/15/2020       4,308,152
  Motorola Solutions, Inc.:        
5,000 M   6%, 11/15/2017       5,685,515
3,000 M   3.75%, 5/15/2022       2,964,555
4,000 M   Pitney Bowes, Inc., 5.75%, 9/15/2017       4,182,656
4,000 M   Symantec Corp., 3.95%, 6/15/2022             3,982,016
                    28,340,120
  Manufacturing-3.6%        
3,000 M   CRH America, Inc., 8.125%, 7/15/2018       3,577,944
2,700 M   General Electric Co., 5.25%, 12/6/2017       3,156,689
4,000 M   Ingersoll-Rand Global Holdings Co., Ltd., 6.875%, 8/15/2018       4,877,904
3,200 M   Johnson Controls, Inc., 5%, 3/30/2020       3,623,443
2,725 M   Tyco Electronics Group SA, 6.55%, 10/1/2017              3,256,830
                     18,492,810
  Media-Broadcasting-4.4%        
3,950 M   British Sky Broadcasting Group, PLC, 9.5%, 11/15/2018     (a)       5,332,141
  Comcast Corp.:        
4,000 M   5.15%, 3/1/2020       4,651,020
3,100 M   6.95%, 8/15/2037       3,995,001
4,500 M   DirecTV Holdings, LLC, 5.15%, 3/15/2042       4,546,256
3,000 M   Time Warner Entertainment Co., LP, 8.375%, 3/15/2023              4,071,432
                    22,595,850
  Media-Diversified-1.7%        
  McGraw-Hill Cos., Inc.:        
1,800 M   5.9%, 11/15/2017       2,074,397
2,300 M   6.55%, 11/15/2037       2,641,134
3,450 M   Vivendi SA, 6.625%, 4/4/2018     (a)       3,818,074
                     8,533,605
  Metals/Mining-5.7%        
4,000 M   Alcoa, Inc., 6.15%, 8/15/2020       4,217,492
4,000 M   ArcelorMittal, 6.125%, 6/1/2018       4,060,768
3,800 M   Newmont Mining Corp., 5.125%, 10/1/2019       4,299,301
5,000 M   Rio Tinto Finance USA, Ltd., 3.75%, 9/20/2021       5,380,950
  Vale Overseas, Ltd.:        
4,000 M   5.625%, 9/15/2019       4,454,276
2,000 M   4.375%, 1/11/2022       2,046,646
4,000 M   Xstrata Canada Financial Corp., 4.95%, 11/15/2021     (a)       4,140,700
                    28,600,133
  Real Estate Investment Trusts-5.7%        
5,000 M   Boston Properties, LP, 5.875%, 10/15/2019       5,772,455
4,000 M   Digital Realty Trust, LP, 5.25%, 3/15/2021       4,265,504
5,000 M   HCP, Inc., 5.375%, 2/1/2021       5,538,615
4,000 M   ProLogis, LP, 6.625%, 5/15/2018       4,619,396
  4,000 M   Simon Property Group, LP, 5.75%, 12/1/2015       4,472,712
4,000 M   Ventas Realty, LP, 4.75%, 6/1/2021           4,162,716
                    28,831,398
  Retail-General Merchandise-1.5%        
2,500 M   GAP, Inc., 5.95%, 4/12/2021       2,595,688
4,000 M   Home Depot, Inc., 5.875%, 12/16/2036            5,139,240
                    7,734,928
  Telecommunications-3.5%        
3,700 M   BellSouth Corp., 6.55%, 6/15/2034       4,358,766
1,200 M   BellSouth Telecommunications, 6.375%, 6/1/2028       1,415,598
3,000 M   Deutsche Telekom International Finance BV, 4.875%, 3/6/2042   (a)       2,861,013
3,300 M   GTE Corp., 6.84%, 4/15/2018       4,046,764
4,045 M   Verizon New York, Inc., 7.375%, 4/1/2032            5,023,028
                    17,705,169
  Transportation-1.3%        
3,000 M   Con-way, Inc., 7.25%, 1/15/2018       3,458,970
3,100 M   GATX Corp., 4.75%, 6/15/2022            3,140,368
                     6,599,338
  Utilities-5.2%        
4,000 M   Arizona Public Service Co., 4.5%, 4/1/2042       4,145,248
3,000 M   E.ON International Finance BV, 5.8%, 4/30/2018   (a)       3,519,957
1,900 M   Electricite de France SA, 6.5%, 1/26/2019   (a)       2,239,315
4,000 M   Exelon Generation Co., LLC, 6.2%, 10/1/2017       4,616,888
  Great River Energy Co.:        
602 M   5.829%, 7/1/2017   (a)       644,070
3,700 M   4.478%, 7/1/2030   (a)       4,130,166
3,000 M   Ohio Power Co., 5.375%, 10/1/2021       3,548,472
2,561 M   Sempra Energy, 9.8%, 2/15/2019            3,554,340
                    26,398,456
  Waste Management-.8%        
3,755 M   Republic Services, Inc., 3.8%, 5/15/2018           4,022,480
Total Value of Corporate Bonds (cost $458,310,912) 97.8 %     495,528,640
Other Assets, Less Liabilities 2.2            11,000,606
Net Assets       100.0 %        $ 506,529,246

 


(a)  Security exempt from registration under Rule 144A of the Securities Act of
  1933. Certain restricted securities are exempt from the registration
  requirements under Rule 144A of the Securities Act of 1933 and may only
  be sold to qualified institutional investors. At June 30, 2012, the Fund
  held twenty-eight 144A securities with an aggregate value of $95,724,540
  representing 18.9% of the Fund's net assets.
 
  At June 30, 2012, the cost of investments for federal income tax purposes
  was $458,310,912. Accumulated net unrealized appreciation on
  investments was $37,217,728, consisting of $38,285,745 gross unrealized
  appreciation and $1,068,017 gross unrealized depreciation.

 


Accounting Standards Codification ("ASC") 820 established a three-tier hierarchy of inputs to establish a classification of fair value measurements
for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below:

 

Level 1 - Unadjusted quoted prices in active markets for identical securities that the Fund has the ability to access.
 
Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or
indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments,
interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
 
Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the
Fund's own assumption about the assumptions a market participant would use in valuing the asset or liability, and would be based on
the best information available.
 
The inputs methodology used for valuing securities are not necessarily an indication of the risk associated with
investing in those securities.
 
The following is a summary, by category of Level, of inputs used to value the Fund's investments as of June 30, 2012:

 

  Level 1   Level 2   Level 3   Total
Corporate Bonds*   $ -   $ 495,528,640   $ - $ 495,528,640
 

* The Portfolio of Investments provides information on the industry categorization.

 

There were no transfers into or from Level 1 and Level 2 by the Fund for the period ended June 30, 2012. Transfers, if any, between Levels are recognized at the end of the reporting period.

 

 

 


Portfolio of Investments (unaudited)
FUND FOR INCOME
June 30, 2012

                     
                     
                     
Principal                    
Amount                    
or Shares     Security             Value
      CORPORATE BONDS-94.2%              
      Automotive-3.5%              
      Chrysler Group, LLC/CG Co-Issuer, Inc.:              
$ 525 M   8%, 6/15/2019           $ 542,062
4,425 M   8.25%, 6/15/2021             4,568,812
3,000 M   Cooper Tire & Rubber Co., 8%, 12/15/2019             3,225,000
2,825 M   Cooper-Standard Automotive, Inc., 8.5%, 5/1/2018             3,061,594
3,950 M   Exide Technologies, 8.625%, 2/1/2018             3,135,312
1,925 M   Ford Motor Co., 6.625%, 10/1/2028             2,174,553
1,400 M   Jaguar Land Rover, PLC, 7.75%, 5/15/2018     (a)       1,449,000
2,100 M   Oshkosh Corp., 8.5%, 3/1/2020              2,341,500
                     20,497,833
      Building Materials-2.1%              
2,650 M   Associated Materials, LLC, 9.125%, 11/1/2017             2,378,375
      Building Materials Corp.:              
3,625 M   6.875%, 8/15/2018     (a)       3,869,687
1,375 M   7.5%, 3/15/2020     (a)       1,498,750
2,285 M   Griffon Corp., 7.125%, 4/1/2018             2,330,700
2,150 M   Texas Industries, Inc., 9.25%, 8/15/2020              2,160,750
                      12,238,262
      Capital Goods-.5%              
2,650 M   Belden CDT, Inc., 9.25%, 6/15/2019             2,901,750
      Chemicals-3.5%              
2,950 M   Ferro Corp., 7.875%, 8/15/2018             2,891,000
2,575 M   Kinove German Bondco GmbH, 9.625%, 6/15/2018     (a)       2,665,125
      LyondellBasell Industries NV:              
1,200 M   5%, 4/15/2019     (a)       1,264,500
1,250 M   6%, 11/15/2021     (a)       1,378,125
2,475 M   PolyOne Corp., 7.375%, 9/15/2020             2,635,875
6,325 M   Rhodia SA, 6.875%, 9/15/2020     (a)       6,989,125
      Solutia, Inc.:              
1,125 M   8.75%, 11/1/2017             1,267,031
1,275 M   7.875%, 3/15/2020             1,494,938
                    20,585,719
      Consumer Non-Durables-1.9%              
2,400 M   Easton-Bell Sports, Inc., 9.75%, 12/1/2016             2,637,000
      Levi Strauss & Co.:              
925 M   7.625%, 5/15/2020             987,438
2,625 M   6.875%, 5/1/2022     (a)       2,707,031
1,125 M   Libbey Glass, Inc., 6.875%, 5/15/2020     (a)       1,161,563
3,025 M   Phillips Van-Heusen Corp., 7.375%, 5/15/2020               3,365,313
                     10,858,345
      Energy-14.7%              
      AmeriGas Finance, LLC:              
550 M   6.75%, 5/20/2020             562,375
1,500 M   7%, 5/20/2022             1,548,750
      Basic Energy Services, Inc.:              
450 M   7.125%, 4/15/2016             446,625
  1,025 M   7.75%, 2/15/2019             989,125
2,475 M   Berry Petroleum Co., 6.375%, 9/15/2022             2,561,625
2,125 M   Calumet Specialty Products Partners, LP, 9.625%, 8/1/2020     (a)       2,167,500
      Chesapeake Energy Corp.:              
2,650 M   7.25%, 12/15/2018             2,716,250
125 M   6.625%, 8/15/2020             124,375
1,350 M   Chesapeake Midstream Partners, LP, 6.125%, 7/15/2022             1,329,750
2,300 M   Concho Resources, Inc., 8.625%, 10/1/2017             2,547,250
      Consol Energy, Inc.:              
1,875 M   8%, 4/1/2017             1,954,687
3,700 M   8.25%, 4/1/2020             3,903,500
      Copano Energy, LLC:              
500 M   7.75%, 6/1/2018             520,000
2,775 M   7.125%, 4/1/2021             2,872,125
3,450 M   Crosstex Energy, LP, 8.875%, 2/15/2018             3,650,531
2,775 M   Denbury Resources, Inc., 8.25%, 2/15/2020             3,052,500
2,750 M   El Paso Corp., 6.5%, 9/15/2020             3,026,444
1,575 M   El Paso Pipeline Partners Operating Co., LLC, 5%, 10/1/2021             1,711,912
750 M   Encore Acquisition Co., 9.5%, 5/1/2016             823,125
2,076 M   Expro Finance Luxembourg SCA, 8.5%, 12/15/2016     (a)       1,998,150
      Ferrellgas Partners, LP:              
3,450 M   9.125%, 10/1/2017             3,622,500
1,363 M   8.625%, 6/15/2020             1,219,885
3,975 M   Forest Oil Corp., 7.25%, 6/15/2019             3,666,937
3,375 M   Genesis Energy, LP, 7.875%, 12/15/2018             3,476,250
3,875 M   Hilcorp Energy I, LP, 8%, 2/15/2020     (a)       4,194,687
      Inergy, LP:              
2,475 M   7%, 10/1/2018             2,561,625
715 M   6.875%, 8/1/2021             718,575
2,175 M   Kodiak Oil & Gas Corp., 8.125%, 12/1/2019     (a)       2,242,969
      Linn Energy, LLC:              
3,525 M   6.25%, 11/1/2019     (a)       3,458,906
475 M   8.625%, 4/15/2020             514,188
2,450 M   Murray Energy Corp., 10.25%, 10/15/2015     (a)       2,162,125
450 M   Newfield Exploration Co., 7.125%, 5/15/2018             478,688
500 M   Penn Virginia Corp., 7.25%, 4/15/2019             415,000
1,525 M   Petrohawk Energy Corp., 10.5%, 8/1/2014             1,690,398
1,175 M   Plains Exploration & Production Co., 6.125%, 6/15/2019             1,186,750
      Quicksilver Resources, Inc.:              
1,075 M   8.25%, 8/1/2015             1,010,500
2,100 M   11.75%, 1/1/2016             2,055,375
2,100 M   9.125%, 8/15/2019             1,837,500
1,475 M   SandRidge Energy, Inc., 7.5%, 3/15/2021             1,463,938
1,125 M   SESI, LLC, 6.375%, 5/1/2019             1,184,063
      SM Energy Co.:              
600 M   6.625%, 2/15/2019             618,000
1,175 M   6.5%, 11/15/2021             1,201,438
1,150 M   6.5%, 1/1/2023     (a)       1,160,063
2,875 M   Vanguard Natural Resources, LLC, 7.875%, 4/1/2020             2,878,594
1,500 M   Western Refining, Inc., 11.25%, 6/15/2017     (a)       1,691,250
                     85,216,803
      Financials-4.8%              
      Ally Financial, Inc.:              
1,525 M   5.5%, 2/15/2017             1,550,570
4,075 M   6.25%, 12/1/2017             4,307,524
3,900 M   8%, 3/15/2020             4,504,500
675 M   CNH Capital, LLC, 6.25%, 11/1/2016     (a)       725,625
      Ford Motor Credit Co., LLC:              
  275 M   7%, 4/15/2015             306,317
175 M   12%, 5/15/2015             218,750
550 M   6.625%, 8/15/2017             626,298
4,600 M   5.875%, 8/2/2021             5,126,663
      International Lease Finance Corp.:              
500 M   5.875%, 5/1/2013             513,750
275 M   6.625%, 11/15/2013             286,000
5,450 M   8.625%, 9/15/2015             6,042,688
1,900 M   8.75%, 3/15/2017             2,142,250
1,275 M   8.25%, 12/15/2020              1,463,283
                    27,814,218
      Food/Beverage/Tobacco-.8%              
475 M   CF Industries, Inc., 6.875%, 5/1/2018             564,656
1,600 M   JBS USA, LLC, 7.25%, 6/1/2021     (a)       1,496,000
2,750 M   Pilgrim's Pride Corp., 7.875%, 12/15/2018               2,801,563
                     4,862,219
      Food/Drug-2.3%              
6,175 M   McJunkin Red Man Corp., 9.5%, 12/15/2016             6,699,875
3,600 M   NBTY, Inc., 9%, 10/1/2018             3,996,000
1,225 M   SUPERVALU, Inc., 7.5%, 11/15/2014             1,246,438
1,525 M   Tops Holding Corp./Tops Markets, LLC, 10.125%, 10/15/2015               1,627,938
                     13,570,251
      Forest Products/Containers-3.5%              
1,325 M   Ardagh Packaging Finance, 7.375%, 10/15/2017     (a)       1,414,437
2,450 M   Ball Corp., 7.375%, 9/1/2019             2,719,500
2,375 M   Clearwater Paper Corp., 7.125%, 11/1/2018             2,517,500
1,750 M   Exopack Holding Corp., 10%, 6/1/2018             1,763,125
1,400 M   JSG Funding, PLC (Smurfit Kappa Funding, PLC), 7.75%, 4/1/2015             1,421,000
1,600 M   Mead Products, LLC/ACCO Brands, 6.75%, 4/30/2020     (a)       1,696,000
3,050 M   Reynolds Group Escrow, LLC, 7.75%, 10/15/2016     (a)       3,225,375
1,525 M   Sappi Papier Holdings GmbH, 8.375%, 6/15/2019     (a) (b)     1,532,625
1,750 M   Sealed Air Corp., 8.125%, 9/15/2019     (a)       1,960,000
2,150 M   Tekni-Plex, Inc., 9.75%, 6/1/2019     (a)        2,176,875
                      20,426,437
      Gaming/Leisure-.9%              
1,775 M   Ameristar Casinos, Inc., 7.5%, 4/15/2021             1,908,125
      National CineMedia, LLC:              
1,550 M   7.875%, 7/15/2021             1,650,750
1,575 M   6%, 4/15/2022     (a)        1,610,438
                     5,169,313
      Health Care-5.7%              
1,800 M   AMERIGROUP Corp., 7.5%, 11/15/2019             1,944,000
4,375 M   Aviv Healthcare Properties, LP, 7.75%, 2/15/2019             4,528,125
1,250 M   Capella Healthcare, 9.25%, 7/1/2017             1,300,000
      Community Health Systems, Inc.:              
1,406 M   8.875%, 7/15/2015             1,444,665
1,825 M   8%, 11/15/2019             1,952,750
1,425 M   DaVita, Inc., 6.375%, 11/1/2018             1,474,875
      Fresenius Medical Care US Finance II, Inc.:              
1,150 M   5.625%, 7/31/2019     (a)       1,201,750
925 M   5.875%, 1/31/2022     (a)       965,469
4,400 M   Genesis Health Ventures, Inc., 9.75%, 6/15/2005     (c) (d)     2,750
      HCA, Inc.:              
675 M   6.375%, 1/15/2015             720,562
2,075 M   8%, 10/1/2018             2,334,375
675 M   6.5%, 2/15/2020             733,219
475 M   7.25%, 9/15/2020             524,875
1,950 M   7.75%, 5/15/2021             2,101,125
  1,625 M   7.5%, 2/15/2022             1,775,312
      Healthsouth Corp.:              
2,275 M   7.25%, 10/1/2018             2,434,250
1,025 M   7.75%, 9/15/2022             1,104,437
1,225 M   LVB Acquisition, Inc. (Biomet, Inc.), 10%, 10/15/2017             1,314,577
1,600 M   Universal Hospital Services, Inc., 8.5%, 6/1/2015             1,639,000
      Vanguard Health Holding Co. II, LLC:              
1,925 M   8%, 2/1/2018             1,977,938
1,325 M   7.75%, 2/1/2019     (a)       1,344,875
                    32,818,929
      Information Technology-4.0%              
2,000 M   Audatex North America, Inc., 6.75%, 6/15/2018     (a)       2,115,000
3,225 M   Computer Sciences Corp., 6.5%, 3/15/2018             3,450,750
      Equinix, Inc.:              
1,875 M   8.125%, 3/1/2018             2,085,937
1,250 M   7%, 7/15/2021             1,378,125
      Fidelity National Information Services, Inc.:              
150 M   7.625%, 7/15/2017     (a)       165,375
1,200 M   7.625%, 7/15/2017             1,329,000
2,400 M   7.875%, 7/15/2020             2,712,000
      Jabil Circuit, Inc.:              
350 M   7.75%, 7/15/2016             400,750
3,825 M   8.25%, 3/15/2018             4,503,938
2,925 M   Lawson Software, Inc., 9.375%, 4/1/2019     (a)       3,137,063
2,100 M   MEMC Electronic Materials, Inc., 7.75%, 4/1/2019              1,669,500
                     22,947,438
      Manufacturing-2.4%              
1,550 M   Amsted Industries, 8.125%, 3/15/2018     (a)       1,646,875
2,725 M   Bombardier, Inc., 5.75%, 3/15/2022     (a)       2,728,406
3,850 M   Case New Holland, Inc., 7.875%, 12/1/2017             4,466,000
1,550 M   EDP Finance BV, 6%, 2/2/2018     (a)       1,349,909
2,000 M   Rexel SA, 6.125%, 12/15/2019     (a)       2,022,500
1,275 M   Terex Corp., 10.875%, 6/1/2016              1,435,969
                     13,649,659
      Media-Broadcasting-4.4%              
2,450 M   Allbritton Communication Co., 8%, 5/15/2018             2,572,500
      Belo Corp.:              
725 M   7.75%, 6/1/2027             714,125
4,000 M   7.25%, 9/15/2027             3,830,000
2,825 M   Block Communications, Inc., 7.25%, 2/1/2020     (a)       2,881,500
2,975 M   Cumulus Media Holdings, Inc., 7.75%, 5/1/2019             2,818,812
2,475 M   Nexstar/Mission Broadcasting, Inc., 8.875%, 4/15/2017             2,626,594
4,000 M   Sinclair Television Group, Inc., 9.25%, 11/1/2017     (a)       4,440,000
5,250 M   XM Satellite Radio, Inc., 7.625%, 11/1/2018     (a)       5,670,000
                    25,553,531
      Media-Cable TV-7.5%              
3,400 M   Cablevision Systems Corp., 8.625%, 9/15/2017             3,808,000
      CCO Holdings, LLC:              
1,200 M   7.25%, 10/30/2017             1,314,000
1,700 M   7.875%, 4/30/2018             1,857,250
1,150 M   7%, 1/15/2019             1,247,750
1,175 M   7.375%, 6/1/2020             1,296,906
1,900 M   Cequel Communications Holdings I, Inc., 8.625%, 11/15/2017     (a)       2,056,750
      Clear Channel Worldwide:              
2,500 M   9.25%, 12/15/2017 Series "A"             2,731,250
2,475 M   9.25%, 12/15/2017 Series "B"             2,710,125
200 M   7.625%, 3/15/2020 Series "A"     (a)       192,500
1,875 M   7.625%, 3/15/2020 Series "B"     (a)       1,842,187
  400 M   CSC Holdings, LLC, 6.75%, 11/15/2021     (a)       428,000
      DISH DBS Corp.:              
2,575 M   7.875%, 9/1/2019             2,980,562
500 M   6.75%, 6/1/2021             542,500
700 M   5.875%, 7/15/2022     (a)       710,500
1,800 M   Echostar DBS Corp., 7.125%, 2/1/2016             1,984,500
1,625 M   Harron Communications, LP, 9.125%, 4/1/2020     (a)       1,690,000
5,725 M   Nara Cable Funding, Ltd., 8.875%, 12/1/2018     (a)       4,952,125
3,112 M   Quebecor Media, Inc., 7.75%, 3/15/2016             3,205,360
4,850 M   UPC Germany GmbH, 8.125%, 12/1/2017     (a)       5,238,000
2,800 M   UPC Holding BV, 9.875%, 4/15/2018     (a)       3,080,000
                     43,868,265
      Media-Diversified-1.5%              
3,232 M   Entravision Communications Corp., 8.75%, 8/1/2017             3,442,080
3,625 M   Lamar Media Corp., 7.875%, 4/15/2018             4,005,625
1,000 M   NAI Entertainment Holdings, LLC, 8.25%, 12/15/2017     (a)       1,110,000
                     8,557,705
      Metals/Mining-9.3%              
      AK Steel Corp.:              
825 M   7.625%, 5/15/2020             701,250
675 M   8.375%, 4/1/2022             577,125
      ArcelorMittal:              
325 M   4.5%, 2/25/2017             320,361
3,356 M   9.85%, 6/1/2019             3,998,936
1,350 M   5.5%, 3/1/2021             1,279,953
1,125 M   6.25%, 2/25/2022             1,103,798
      Arch Coal, Inc.:              
2,775 M   7.25%, 10/1/2020             2,358,750
2,950 M   7.25%, 6/15/2021             2,485,375
      FMG Resources (August 2006) Property, Ltd.:              
350 M   7%, 11/1/2015     (a)       358,750
1,250 M   6.375%, 2/1/2016     (a)       1,271,875
975 M   6%, 4/1/2017     (a)       982,312
1,850 M   6.875%, 2/1/2018     (a)       1,875,437
675 M   8.25%, 11/1/2019     (a)       718,875
850 M   6.875%, 4/1/2022     (a)       858,500
1,400 M   JMC Steel Group, 8.25%, 3/15/2018     (a)       1,396,500
1,000 M   Kaiser Aluminum Corp., 8.25%, 6/1/2020     (a)       1,025,000
2,750 M   Metals USA, Inc., 11.125%, 12/1/2015             2,870,313
1,625 M   Molycorp, Inc., 10%, 6/1/2020     (a)       1,616,875
5,425 M   Novelis, Inc., 8.375%, 12/15/2017             5,831,875
      Peabody Energy Corp.:              
2,375 M   6%, 11/15/2018     (a)       2,375,000
1,700 M   6.5%, 9/15/2020             1,729,750
3,175 M   6.25%, 11/15/2021     (a)       3,159,125
      Schaeffler Finance BV:              
1,725 M   7.75%, 2/15/2017     (a)       1,806,938
1,900 M   8.5%, 2/15/2019     (a)       2,037,750
      United States Steel Corp.:              
850 M   7%, 2/1/2018             843,625
3,700 M   7.375%, 4/1/2020             3,589,000
1,350 M   7.5%, 3/15/2022             1,302,750
      Vulcan Materials Co.:              
1,350 M   6.5%, 12/1/2016             1,427,625
3,725 M   7%, 6/15/2018              3,985,750
                     53,889,173
      Real Estate Investment Trusts-1.0%              
      Developers Diversified Realty Corp.:              
  675 M   9.625%, 3/15/2016             820,557
550 M   7.875%, 9/1/2020             658,663
      Omega Healthcare Investors, Inc.:              
975 M   7.5%, 2/15/2020             1,067,625
1,550 M   6.75%, 10/15/2022             1,662,375
1,400 M   Taylor Morrison Communities, Inc., 7.75%, 4/15/2020     (a)       1,466,500
                    5,675,720
      Retail-General Merchandise-4.8%              
960 M   CKE Restaurants, Inc., 11.375%, 7/15/2018             1,101,600
1,850 M   J.C. Penney Corp., Inc., 7.95%, 4/1/2017             1,859,250
2,700 M   Landry's, Inc., 9.375%, 5/1/2020     (a)       2,757,375
2,050 M   Limited Brands, Inc., 8.5%, 6/15/2019             2,419,000
1,975 M   Monitronics International, Inc., 9.125%, 4/1/2020     (a)       1,905,875
3,685 M   Needle Merger Sub Corp., 8.125%, 3/15/2019     (a)       3,685,000
3,550 M   NPC International, Inc., 10.5%, 1/15/2020             3,949,375
1,475 M   QVC, Inc., 7.5%, 10/1/2019     (a)       1,638,100
1,525 M   Sally Holdings, LLC/Sally Capital, Inc., 6.875%, 11/15/2019             1,666,063
1,400 M   Toys R Us Property Co. II, Inc., 8.5%, 12/1/2017             1,464,750
3,150 M   Wendy's/Arby's Restaurants, LLC, 10%, 7/15/2016             3,398,094
1,675 M   YCC Holdings, LLC/Yankee Finance, Inc., 10.25%, 2/15/2016              1,712,687
                    27,557,169
      Services-2.3%              
2,050 M   CoreLogic, Inc., 7.25%, 6/1/2021     (a)       2,111,500
1,550 M   Covanta Holding Corp., 6.375%, 10/1/2022             1,646,091
      Iron Mountain, Inc.:              
1,525 M   7.75%, 10/1/2019             1,654,625
2,300 M   8.375%, 8/15/2021             2,507,000
2,850 M   PHH Corp., 9.25%, 3/1/2016             3,042,375
2,375 M   Reliance Intermediate Holdings, LP, 9.5%, 12/15/2019     (a)       2,624,375
                     13,585,966
      Telecommunications-6.5%              
625 M   CenturyLink, Inc., 5.8%, 3/15/2022             623,332
      Citizens Communications Co.:              
5,500 M   7.125%, 3/15/2019             5,582,500
1,475 M   9%, 8/15/2031             1,416,000
2,525 M   GCI, Inc., 8.625%, 11/15/2019             2,657,562
5,850 M   Inmarsat Finance, PLC, 7.375%, 12/1/2017     (a)       6,274,125
      Intelsat Jackson Holdings SA:              
4,450 M   7.25%, 10/15/2020     (a)       4,694,750
450 M   7.5%, 4/1/2021             478,125
800 M   PAETEC Holding Corp., 9.875%, 12/1/2018             898,000
1,125 M   Qwest Communications International, Inc., 7.125%, 4/1/2018             1,191,094
425 M   Qwest Corp., 6.5%, 6/1/2017             478,001
      Sprint Capital Corp.:              
2,000 M   6.9%, 5/1/2019             1,890,000
3,825 M   6.875%, 11/15/2028             3,098,250
1,700 M   Telesat Canada/Telesat, LLC, 6%, 5/15/2017     (a)       1,738,250
580 M   Virgin Media Finance, PLC, 9.5%, 8/15/2016             649,600
      Wind Acquisition Finance SA:              
750 M   11.75%, 7/15/2017     (a)       609,375
2,175 M   7.25%, 2/15/2018     (a)       1,914,000
      Windstream Corp.:              
1,725 M   7.875%, 11/1/2017             1,888,875
1,775 M   7.75%, 10/15/2020              1,890,375
                    37,972,214
      Transportation-1.2%              
2,975 M   CHC Helicopter SA, 9.25%, 10/15/2020             2,922,937
      Navios Maritime Holdings:              
  2,025 M   8.875%, 11/1/2017             2,050,313
2,700 M   8.125%, 2/15/2019              2,322,000
                     7,295,250
      Utilities-4.1%              
      AES Corp.:              
875 M   9.75%, 4/15/2016             1,041,250
800 M   8%, 10/15/2017             914,000
1,275 M   7.375%, 7/1/2021     (a)       1,424,812
3,475 M   Atlantic Power Corp., 9%, 11/15/2018   (a)       3,570,562
2,600 M   Calpine Construction Finance Co., LP, 8%, 6/1/2016   (a)       2,821,000
650 M   Calpine Corp., 7.5%, 2/15/2021   (a)       705,250
1,346 M   Indiantown Cogeneration Utilities, LP, 9.77%, 12/15/2020           1,405,079
2,750 M   Intergen NV, 9%, 6/30/2017   (a)       2,708,750
      NRG Energy, Inc.:              
4,625 M   7.375%, 1/15/2017             4,821,563
2,350 M   7.625%, 5/15/2019             2,391,125
2,110 M   NSG Holdings, LLC, 7.75%, 12/15/2025   (a)       2,120,550
                     23,923,941
      Wireless Communications-1.0%            
2,100 M   MetroPCS Wireless, Inc., 7.875%, 9/1/2018           2,189,250
1,175 M   Nextel Communications, Inc., 5.95%, 3/15/2014           1,182,344
      Sprint Nextel Corp.:              
950 M   6%, 12/1/2016             914,375
950 M   9.125%, 3/1/2017     (a)       999,875
575 M   ViaSat, Inc., 6.875%, 6/15/2020   (a)       583,625
                     5,869,469
Total Value of Corporate Bonds (cost $536,999,018)              547,305,579
      LOAN PARTICIPATIONS-2.4%            
      Chemicals-.9%              
2,693 M   PL Propylene, LLC, 7%, 3/23/2017   (e)       2,725,246
2,694 M   PolyOne Corp., 5%, 12/20/2017   (e)       2,702,498
                    5,427,744
      Energy-.5%              
2,875 M   Chesapeake Energy Corp., 8.5% 12/2/2017   (e)       2,854,932
      Forest Products/Containers-.5%            
2,693 M   Sealed Air Corp., 4.75%, 10/3/2018   (e)       2,719,783
      Metals/Mining-.5%              
2,875 M   Arch Coal, Inc., 5.75%, 5/16/2018   (e)       2,832,191
Total Value of Loan Participations (cost $13,715,730)           13,834,650
      COMMON STOCKS-.0%            
      Automotive-.0%              
2,523   * Safelite Realty Corporation   (c)       25
      Telecommunications-.0%            
8   * Viatel Holding (Bermuda), Ltd.   (c)       -
18,224   * World Access, Inc.              7
Total Value of Common Stocks (cost $385,770)              32
Total Value of Investments (cost $551,100,518) 96.6 %         561,140,261
Other Assets, Less Liabilities 3.4            19,539,788
Net Assets       100.0 %       $ 580,680,049

 


*  Non-income producing
 
(a)  Security exempt from registration under Rule 144A of the Securities
  Act of 1933. Certain restricted securities are exempt from the
  registration requirements under Rule 144A of the Securities Act of
  1933 and may only be sold to qualified institutional investors. At June
  30, 2012, the Fund held eighty-two 144A securities with an aggregate
  value of $174,701,301 representing 30.1% of the Fund's net assets.
 
(b)  A portion or all of the security purchased on a when-issued or delayed
  delivery basis.
 
(c)  Securities fair valued as determined in good faith pursuant to
  procedures adopted by the Fund's Board of Trustees. At June 30,
  2012, the Fund held three securities that were fair valued by the
  Valuation Committee with an aggregate value of $2,775 representing
  0% of the Fund's net assets.
 
(d)  In default as to principal and /or interest payment.
 
(e)  Interest rates are determined and reset periodically. The interest rates
  above are the rates in effect at June 30, 2012.
 
  At June 30, 2012, the cost of investments for federal income tax
  purposes was $551,101,518. Accumulated net unrealized appreciation
  on investments was $10,038,743, consisting of $23,160,534 gross
  unrealized appreciation and $13,121,791 gross unrealized
  depreciation.

 


Accounting Standards Codification ("ASC") 820 established a three-tier hierarchy of inputs to establish a classification of fair value measurements for
disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below:

 

Level 1 - Unadjusted quoted prices in active markets for identical securities that the Fund has the ability to access.
 
Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or
indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest
rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
 
Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or
indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest
rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
 
The inputs methodology used for valuing securities are not necessarily an indication of the risk associated with
investing in those securities.
 
The following is a summary, by category of Level, of inputs used to value the Fund's investments as of June 30, 2012:

 

    Level 1   Level 2   Level 3 Total
Corporate Bonds   $ -   $ 547,302,829   $ 2,750 $ 547,305,579
Loan Participations     -     13,834,650     - 13,834,650
Common Stocks     7     -     25   32
Total Investments in Securities*   $ 7   $ 561,137,479   $ 2,775 $ 561,140,261
 

* The Portfolio of Investments provides information on the industry categorization.

 

There were no transfers into or from Level 1 and Level 2 by the Fund for the period ended June 30, 2012. Transfers, if any, between Levels are recognized at the end of the reporting period.

 

The following is a reconciliation of Fund investments valued using Level 3 inputs for the period:

 

    Investments in   Investments in            
    Corporate Bonds   Common Stocks   Total      
Balance, September 30, 2011   $ 2,750   $ 4,793   $ 7,543      
Purchases     -     -     -      
Sales     -     (1,532)     (1,532)      
Change in unrealized                        
appreciation (depreciation)     -     -     -      
Realized gain     -     1,532     1,532      
Transfer into Level 3     -     -     -      
Transfer out of Level 3     -     (4,768)     (4,768)      
Balance, June 30, 2012   $ 2,750   $ 25   $ 2,775      

 

The following is a summary of Level 3 inputs by industry

 

Health Care   $ 2,750  
Automotive     25  
Telecommunications     -  
    $ 2,775  

 

The following table presents additional information about valuation methodologies and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2012.

 

              Impact to Valuation
  Fair Value   Valuation   Unobservable     from and Increase
    June 30, 2012   Methodologies   Input(s)(1)   Range   in Input(2)
 
Common Stock   $ 25   Market   Market   100%   Increase
        Comparables   Comparables/    
          Bankruptcy    
 
Fixed Income   $ 2,750   Market   Market   100%   Increase
        Comparables   Comparables/    
          Bankruptcy    

 

  (1)  In determining certain of these inputs, management evaluates a variety of factors including
  economic conditions, industry and market developments, market valuations of comparable
  companies and company specific developments including exit strategies and realization
  opportunities. Management has determined that market participants would
  take these inputs into account when valuing the investments.
 
  (2)  This column represents the directional change in the fair value of the Level 3 investments that
  would result from an increase to the corresponding unobservable input. A decrease to the
  unobservable input would have the opposite effect.

 


Security Valuation - Except as provided below, a security listed or traded on an exchange or the Nasdaq Stock Market
is valued at its last sale price on the exchange or market where the security is principally traded, and lacking any sales,
the security is valued at the mean between the closing bid and asked prices. Securities traded in the over-the-counter
("OTC") market (including securities listed on exchanges whose primary market is believed to be OTC) are valued at
the mean between the last bid and asked prices based on quotes furnished by a market maker for such securities.
Securities may also be priced by pricing services approved by the Trust's Board of Trustees (the "Board"). The pricing
services consider security type, rating, market condition and yield data as well as market quotations, prices provided by
market makers and other available information in determining value. Short-term debt securities that mature in 60 days
or less are valued at amortized cost.
 
The Funds monitor for significant events occurring prior to the close of trading on the New York Stock Exchange that
could have a material impact on the value of any securities that are held by the Funds. Examples of such events include
trading halts, natural disasters, political events and issuer-specific developments. If the Valuation Committee decides
that such events warrant using fair value estimates, it will take such events into consideration in determining the fair
values of such securities. If market quotations or prices are not readily available or determined to be unreliable, the
securities will be valued at fair value as determined in good faith pursuant to procedures adopted by the Board.
 
The Cash Management Fund values its portfolio securities in accordance with the amortized cost method of valuation
under Rule 2a-7 of the 1940 Act. Amortized cost is an approximation of market value of an instrument, whereby the
difference between its acquisition cost and market value at maturity is amortized on a straight-line basis over the
remaining life of the instrument. The effect of changes in the market value of a security as a result of fluctuating
interest rates is not taken into account and thus the amortized cost method of valuation may result in the value of a
security being higher or lower than its actual market value.
 
In accordance with Accounting Standards Codification ("ASC") 820 "Fair Value Measurements and Disclosures"
("ASC 820"), investments held by the Funds are carried at "fair value". As defined by ASC 820, fair value is the price
that a fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal
or most advantageous market for the investment under current market conditions. Various inputs are used in
determining the value of the Funds' investments.
 
In addition to defining fair value, ASC 820 established a three-tier hierarchy of inputs to establish a classification of
fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad
Levels listed below:

 

Level 1 - Unadjusted quoted prices in active markets for identical securities that the Fund has the ability to access.
 
Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or
  liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument
  on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield
  curves, default rates and similar data.
 
Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available,
  representing the Fund's own assumption about the assumptions a market participant would use in valuing
  the asset or liability, and would be based on the best information available.

 


Equity securities traded on an exchange or the Nasdaq Stock Market are categorized in Level 1 of the fair value
hierarchy to the extent that they are actively traded and valuation adjustments are not applied. Foreign securities
that are fair valued in the event that fluctuations in U.S. securities markets exceed a predetermined level or if a
foreign market is closed are categorized in Level 2. Corporate and municipal bonds, asset backed, U.S.
Government and U.S. Agency securities are categorized in Level 2 to the extent that the inputs are observable and
timely, otherwise they would be categorized as Level 3. Short-term notes that are valued at amortized cost are
categorized in Level 2. Foreign exchange contracts that are considered derivative instruments and are valued at the
net unrealized appreciation or depreciation on the instruments are categorized in Level 2. Restricted securities and
securities that are fair valued by the Valuation Committee may be categorized in either Level 2 or Level 3 of the
fair value hierarchy depending on the relative significance of valuation inputs.
 
The aggregate value by input level, as of June 30, 2012, for each Fund's investments is included at the end of each
Fund's schedule of investments.
 
Investments in securities issued on a when-issued or delayed delivery basis are generally reflected in the assets of the
Funds on the first business day following the date the securities are purchased and the Funds segregated assets for these
transactions.

 

 

 

Item 2. Controls and Procedures

(a) The Registrant's Principal Executive Officer and Principal

Financial Officer have concluded that the Registrant's disclosure controls

and procedures (as defined in Rule 30a-3(c) under the Investment Company

Act of 1940, as amended) are effective, based on their evaluation of these

disclosure controls and procedures as of a date within 90 days of the

filing date of this report.

(b) There were no changes in the Registrant's internal control over financial

reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940,

as amended)  that occurred during the Registrant's last fiscal quarter that have

materially affected, or are reasonably likely to materially affect, the Registrant's

internal control over financial reporting.

 

Item 3. Exhibits

(a) Certifications required by Rule 30a-2(a) under the Investment

Company Act of 1940 (17 CFR 270.30a-2(a)) - filed herewith

 

 

 

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.

First Investors Income Funds

By /S/ DEREK BURKE

Derek Burke

President

Date: August 24, 2012

 

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.

 

First Investors Income Funds

By /S/ DEREK BURKE

Derek Burke

President

 

By /S/ JOSEPH I. BENEDEK

Joseph I. Benedek

Treasurer and Principal Financial Officer

Date: August 24, 2012