Semi-Annual Report

Year-to-date investment returns have dramatically highlighted these circumstances: the broad stock market, as measured by the Standard & Poor’s 500 Equity Index, has lost nearly 30%, while Treasury securities, generally viewed as a safe haven from tumultuous markets, have posted double digit gains in the falling interest rate environment. Echoing the difficulties of the equity market, the corporate bond market came under pressure as weak technical conditions, i.e., a lack of demand for corporate securities, overwhelmed fundamental value considerations and led to poor relative performance. This was especially true of certain industries, namely telecommunications and energy, which experienced particularly weak price performance, a circumstance that was exacerbated by serial downgrades from the credit rating agencies.

	One Year Period Ended		Three Year Period (Annualized) Ended		Five Year Period (Annualized) Ended		Since Inception (Annualized) Through
	September 30, 2002		September 30, 2002		September 30, 2002		September 30, 2002
Metropolitan West Low Duration Bond Fund — Class M	-2.61	%	+4.31	%	+5.28	%	+5.70	%

Merrill Lynch 1-3 Year US Treasury Index*	+5.64	%	+7.24	%	+6.57	%	+6.75	%

Metropolitan West Total Return Bond Fund — Class M	-5.46	%	+4.60	%	+5.77	%	+6.67	%

Lehman Brothers Aggregate Index*	+8.60	%	+9.48	%	+7.83	%	+8.44	%

Metropolitan West AlphaTrak 500 Fund	-26.41	%	-14.33	%	N/A		-6.78	%

S&P 500 Equity Index*	-20.48	%	-12.87	%	N/A		-6.30	%

From a strategic perspective, with Treasury rates at the lowest levels since the 1950’s, the Funds’ Adviser (“MWAM”) sees increasing risks for rising interest rates. Given the considerable monetary and fiscal stimulus injected to the domestic economy over the past 21 months, MWAM’s ongoing expectation for a sustainably higher pace of economic growth underlies a defensive duration stance relative to the respective benchmarks. From a sector perspective, MWAM remains constructive on the yield opportunities in corporate and asset-backed securities. Notwithstanding the prevailing pessimism over the last several months in the corporate sector, MWAM remains committed to a long-term view and toward a return to rationality in a pricing environment that has appeared increasingly and unduly cheap (and, needless to say, without historical precedent). Among asset-backed securities, MWAM maintains a relative overweight to high quality issues backed by home-equity and manufactured housing loans. With the prospective risks in mortgage-backed securities now leaning toward duration extension, MWAM continues to favor structures with (1) less vulnerability to prepayments, and (2) seasoned loans as underlying collateral.

A truism of investing is that markets go through cycles – mostly between optimism and pessimism, but sometimes to the extremes of their radical cousins: greed and panic. While the late 1990’s saw the equity markets exude an “irrational exuberance” that lifted the NASDAQ to 5,000, today we find much of the corporate bond market projecting “irrational gloom” with prices reflecting fears of an economic depression. Through this exceptional period, in which all but the most sober-minded of investors apparently have grown impatient with discipline, we find optimism for better performance ahead rooted in a faithful adherence to a long-term perspective and an investment philosophy based on fundamental value and diversification.

	Principal Amount	Issues	Value

Bonds—88.37%
Asset-Backed Securities—20.25%³	$ 9,891,000	American Business Financial Services 2002-1 A5, 6.51%, 12/15/32	$10,858,468
	25,300,000	American Business Financial Services 2002-2 AIO (IO), 10.00%, 06/15/33	3,993,453
	1,403,353	Amresco Residential Securities Mortgage 1998-2 B1F, 7.72%, 06/25/28	1,384,057
	7,400,853	AQ Finance NIM Trust 2002-1 NOTE, 9.50%, 06/25/32⁴	7,411,214
	3,000,000	Atherton Franchisee Loan Funding 1999-A E, 8.25%, 10/15/15⁴	1,779,375
	3,000,000	Bankamerica Manufactured Housing Contract 1998-2 B1, 7.93%, 12/10/25	932,400
	3,100,000	Conseco Finance 2000-C B2 (FRN), 3.87%, 07/15/29	2,835,610
	7,500,000	Conseco Finance 2001-C A4, 6.19%, 03/15/30	8,042,964
	5,000,000	Conseco Finance 1999-F M2, 9.30%, 10/15/30	5,432,219
	5,000,000	Conseco Finance 2000-B MF1, 8.14%, 02/15/31	5,378,556
	3,040,000	Conseco Finance 2001-A IA5, 7.06%, 03/15/32	3,301,507
	2,500,000	Conseco Finance 2001-A IIA3, 7.20%, 03/15/32	2,743,346
	4,000,000	Conseco Finance 2001-A IM2, 8.02%, 03/15/32	4,319,828
	15,000,000	Conseco Finance 2002-A A2, 4.69%, 04/15/32	15,103,076
	5,000,000	Conseco Finance 2002-A B2 (FRN), 7.57%, 04/15/32⁴	4,455,000
	7,848,000	Conseco Finance 2001-C A5, 6.79%, 08/15/33	8,345,084
	2,812,000	Countrywide Asset-Backed Certificates 2001-HLV1 A4, 6.95%, 02/10/21	2,830,483
	6,227,000	Countrywide Asset-Backed Certificates 2001-HLV1 A5, 7.20%, 07/10/22	6,308,729
	3,000,000	Countrywide Asset-Backed Certificates 2001-1 BF2 (FRN), 4.01%, 07/25/31	3,035,791
	3,852,737	CS First Boston Mortgage Securities Corp. 2002-H1N A, 8.00%, 08/27/32⁴	3,744,980
	10,000,000	Duke Funding I Ltd., 1A B1, 8.27%, 11/10/35⁴	10,962,500
	10,353,000	Empire Funding Home Loan Owner Trust 1997-4 A5, 7.66%, 01/25/24	11,289,087
	995,346	Empire Funding Home Loan Owner Trust 1999-1 M2, 9.00%, 05/25/30	1,065,361
	1,000,000	Falcon Franchise Loan LLC 1999-1 D, 8.40%, 07/05/13⁴	1,027,656
	1,000,000	Falcon Franchise Loan LLC 1999-1 E, 6.50%, 01/05/14⁴	620,469
	1,050,335	First Union Home Equity Loan Trust 1997-3 B, 7.39%, 03/25/29	1,086,113



Bonds (continued)
Asset-Backed Securities (continued)	$ 3,000,000	FMAC Loans Receivables Trust 1998-CA A2, 6.66%, 01/15/12⁴	$ 2,626,875
Asset-Backed Securities (continued)	10,480,000	FMAC Loans Receivables Trust 1998-A A3, 6.69%, 09/15/20⁴	8,297,215
	14,719,086	FMAC Loans Receivables Trust 1998-BA A2, 6.74%, 11/15/20⁴	14,013,816
	17,605,000	Galileo Securities, Inc. 2002-1A A1 (FRN), 1.45%, 02/03/11	15,440,131
	11,023,960	GMAC Mortgage Corporation Loan Trust 2001-HE2 II3, 5.67%, 09/25/31	11,062,544
	2,305,000	Green Tree Financial Corp., 1995-5 B2, 7.65%, 09/15/26	817,720
	10,303,677	Green Tree Financial Corp., 1999-4 A4, 6.64%, 05/01/31	10,462,083
	1,000,000	Green Tree Home Equity Loan Trust 1997-B M1, 7.65%, 04/15/27	1,055,180
	4,250,000	Green Tree Home Equity Loan Trust 1998-C B2, 8.06%, 07/15/29	2,534,532
	2,000,000	Green Tree Home Improvement Loan Trust 1997-E HEB2, 7.77%, 01/15/29	1,322,893
	3,000,000	Green Tree Home Improvement Loan Trust 1998-B HEB2, 8.49%, 11/15/29	1,917,189
	5,000,000	Green Tree Home Improvement Loan Trust 1998-B HEM2, 7.33%, 11/15/29	5,216,405
	375,244	Green Tree Recreational Equipment & Consumer Trust 1998-A AH, 6.71%, 05/15/29	404,630
	750,489	Green Tree Recreational Equipment & Consumer Trust 1998-A A4H, 8.26%, 05/15/29	814,063
	5,195,000	Green Tree Recreational Equipment & Consumer Trust 1996-D CTFS, 7.24%, 12/15/22	5,205,817
	4,356,000	Indymac Home Equity Loan Asset-Backed Trust 2001-B AF5, 7.01%, 04/25/31	4,558,238
	360,239	Irwin Home Equity 1999-3 A2, 7.69%, 10/25/09	386,394
	10,000,000	Keystone Owner Trust 1998-P2 A5, 7.40%, 01/25/29⁴	10,803,130
	467,416	Master Financial Asset Securitization Trust 1998-2 A3, 6.60%, 11/20/18	474,153
	14,001,159	NC Finance Trust 2002-1 NOTE, 9.25%, 03/25/32⁴	14,020,760
	6,000,000	Newbury Funding CBO (IO), 18.25%, 02/15/06⁴	2,528,400
	2,750,000	Newbury Funding CBO Ltd. 2000-1 A3 (FRN), 4.50%, 02/15/30⁴	2,563,275
	7,500,000	Oakwood Mortgage Investors, Inc. 2000-A M1, 8.30%, 04/15/30	8,149,172
	7,546,404	Option One Mortgage Securities Corp. NIM 2002-2A CFTS, 8.83%, 06/26/32⁴	7,561,731

	Principal Amount	Issues	Value

Bonds (continued)
Asset-Backed Securities (continued)	$ 3,913,845	Pegasus Aviation Lease Securitization 2000-1 C1, 7.83%, 03/25/30⁴	$ 2,496,912
	16,535,026	Polaris Securities, Inc. A1 (PO), 6.34%⁵, 02/17/09^4,6	12,995,488
	1,404,874	Provident Bank Home Equity Loan Trust 1997-4 A3, 6.91%, 01/25/29	1,484,927
	2,903,461	Prudential 2000-1 CBO, 37.85%⁷, 10/15/35	1,863,659
	2,500,000	Prudential Structured Finance CBO 1A B2, 13.13%, 11/15/35⁴	1,614,062
	2,583,000	Residential Asset Mortgage Products, Inc. 2000-RZ1 A3, 8.27%, 10/25/29	2,798,138
	373,494	Residential Asset Mortgage Products, Inc. 2000-RS1 A1, 8.00%, 03/25/30	401,574
	14,825,000	Residential Asset Mortgage Products, Inc. 2002-RZ1 A5, 6.60%, 03/25/32	15,920,726
	12,749,000	Residential Asset Mortgage Products, Inc. 2002-RS5 AI5, 5.41%, 09/25/32	12,929,488
	2,250,000	Residential Funding Mortgage Securities 2000-HI1 AI7, 8.29%, 02/25/25	2,538,824
	4,300,000	Residential Funding Mortgage Securities 1999-HI6 AI7, 8.10%, 09/25/29	4,871,934
	5,000,000	Seneca Funding I Ltd. 1A A (FRN), 4.57%, 05/31/29⁴	4,253,320
	2,000,000	Signature 1 CBO, 16.97%⁷, 10/15/09	1,904,000
	3,000,000	Signature 5 L.P. 5A B2, 8.41%, 10/27/12⁴	3,176,718
	5,280,000	Vanderbilt Acquisition Loan Trust 2002-1 A4, 6.57%, 05/07/27	5,524,200
	3,886,554	Xerox Equipment Lease Owner Trust 2001-1 A (FRN), 3.82%, 02/15/08⁴	3,898,700

		Total Asset-Backed Securities	339,196,342


Corporates—37.15%²
Airlines—4.08%	22,581,687	American Airline 2001-1 B, 7.38%, 05/23/19	18,862,754
	4,308,208	American Airline 2001-1 A-1, 6.98%, 05/23/21	3,872,956
	9,831,753	Continental Airlines, Inc. 99-2, 7.26%, 03/15/20	9,513,254
	7,455,000	Delta Air Lines 2001-1 A-2, 7.11%, 09/18/11	7,857,916
	4,575,000	Delta Air Lines 2001-1 B, 7.71%, 09/18/11	4,404,134
	12,800,563	United Air Lines 97A (FRN), 2.03%, 12/02/02	11,547,708
	4,096,181	United Air Lines (FRN), 2.03%, 12/02/02⁴	3,695,267
	9,759,880	United Air Lines 2001-1 A-1, 6.07%, 03/01/13	8,640,422

			68,394,411



Corporates (continued)
Banks—1.88%	$ 500,000	BT Institutional Capital Trust Bank, 7.75%, 12/01/26⁴	$ 541,244
	22,000,000	Capital One Financial, 7.25%, 05/01/06	18,986,088
	1,500,000	Crestar Capital Trust I, 8.16%, 12/15/26	1,743,458
	500,000	Den Norske Bank (FRN), 1.94%, 08/29/49	384,613
	2,100,000	First Chicago NBD Institution Cap A, 7.95%, 12/01/26⁴	2,361,500
	50,000	Popular NA, Inc. (FRN) (MTN), 3.51%, 10/15/03	50,487
	6,170,000	Royal Bank Of Scotland Group PLC, 7.38%, 04/29/49	6,896,801
	500,000	Wachovia Bank NA, 7.70%, 08/01/10	556,793

			31,520,984

Chemicals—0.03%	1,500,000	Mississippi Chemical Corp., 7.25%, 11/15/17⁶	457,500

Commercial Services—0.45%	2,000,000	Hertz Corp., 6.00%, 01/15/03	2,001,600
Commercial Services—0.45%	5,500,000	PHH Corp. (MTN), 8.13%, 02/03/03	5,514,443

			7,516,043

Electric—1.35%	44,970,000	Calpine Canada Energy Finance Co., 8.50%, 05/01/08	18,662,550
	7,770,000	NRG Energy, 6.75%, 07/15/06⁶	1,748,250
	9,650,000	NRG Energy, 7.50%, 06/15/07⁶	2,171,250

			22,582,050

Finance—11.73%	5,000,000	Aeltus CBO II, 7.98%, 08/06/09⁴	4,072,655
	7,221,133	Air 2 US, 8.03%, 10/01/19⁴	5,108,266
	10,000,000	Air 2 US, 8.63%, 10/01/20⁴	6,456,250
	3,400,000	Capital One Bank, 6.38%, 02/15/03	3,350,156
	5,000,000	Capital One Bank, 6.65%, 03/15/04	4,737,480
	14,400,000	Capital One Bank, 6.88%, 02/01/06	13,477,248
	60,000,000	Corporate-Backed Trust Certificates RSA (IO), 1.25%, 10/15/29	7,120,920
	55,849,000	Finova Group, Inc., 7.50%, 11/15/09	17,313,190
	7,350,000	Ford Motor Credit Co. (FRN), 2.11%, 06/20/03	7,186,661
	5,880,000	Ford Motor Credit Co., 7.50%, 03/15/05	5,920,290
	6,614,000	Ford Motor Credit Co., 7.60%, 08/01/05	6,653,492
	11,000,000	Ford Motor Credit Co., 6.88%, 02/01/06	10,834,307
	6,600,000	Ford Motor Credit Co., 6.50%, 01/25/07	6,375,072
	19,275,000	Ford Motor Credit Co., 7.88%, 06/15/10	19,035,373
	8,240,000	Ford Motor Credit Co., 7.38%, 02/01/11	7,784,015
	6,685,000	Ford Motor Credit Co., 7.25%, 10/25/11	6,189,541

	Principal Amount		Issues	Value

Corporates (continued)
Finance (continued)	$	18,400,000	General Motors Acceptance Corp. (FRN) (MTN), 2.58%, 01/20/04	$	18,067,144
		3,610,000	General Motors Acceptance Corp. (FRN) (MTN), 2.61%, 05/04/04		3,521,999
		22,035,000	General Motors Acceptance Corp., 6.88%, 09/15/11		21,514,820
		4,500,000	MBNA America Bank NA (FRN), 2.08%, 06/10/04		4,409,482
		1,085,000	MBNA Corp. (FRN) (MTN), 2.42%, 05/23/03		1,080,759
		5,000,000	National Rural Utilities (FRN) (MTN), 2.82%, 04/26/04		5,014,990
		10,170,000	National Rural Utilities (MTN), 7.25%, 03/01/12		11,316,983

					196,541,093

Insurance—2.21%		10,080,000	American Financial Group, 7.13%, 04/15/09		9,636,571
		5,000,000	CNA Financial Corp., 7.25%, 11/15/23		4,301,820
		9,900,000	Conseco Finance Trust III, 8.80%, 04/01/27^6,9		74,250
		1,200,000	Conseco, Inc., 8.50%, 10/15/02^6,9		150,000
		19,200,000	Conseco, Inc., 8.75%, 02/09/04^6,9		2,400,000
		2,400,000	Conseco, Inc., 9.00%, 10/15/06^6,9		300,000
		5,250,000	Fairfax Financial Holdings, 7.38%, 03/15/06		3,871,733
		3,000,000	Liberty Mutual Insurance Co., 7.70%, 10/15/97^4,6		2,518,020
		2,500,000	Lumbermen's Mutual Casualty Co., 9.15%, 07/01/26^4,6		1,084,250
		1,300,000	Lumbermen's Mutual Casualty Co., 8.30%, 12/01/37^4,6		560,963
		3,250,000	Lumbermen's Mutual Casualty Co., 8.45%, 12/01/97^4,6		1,404,552
		750,000	MBIA, Inc., 6.63%, 10/01/28		797,441
		1,200,000	Nationwide Mutual Insurance, 8.25%, 12/01/31⁴		1,301,492
		7,270,000	Royal & Sun Alliance Ins., 8.95%, 10/15/29		7,029,792
		1,800,000	Zurich Capital Trust I, 8.38%, 06/01/37⁴		1,497,485

					36,928,369

Oil & Gas—1.12%		4,000,000	Noble Aff/Atlantic Meth, 8.95%, 12/15/04⁴		4,269,176
		14,000,000	Sempra Energy Co., 6.80%, 07/01/04		14,464,212

					18,733,388

Pipelines—2.64%		950,000	Williams Co., Inc., 9.25%, 03/15/04		726,750
		12,000,000	Williams Co., Inc., 7.13%, 09/01/11		7,500,000
		10,350,000	Williams Co., Inc., 8.13%, 03/15/12⁴		6,675,750
		23,900,000	Williams Co., Inc., 7.63%, 07/15/19		13,264,500



Corporates (continued)
Pipelines (continued)	$	11,600,000	Williams Co., Inc., 7.88%, 09/01/21	$	6,554,000
		12,500,000	Williams Co., Inc., 7.50%, 01/15/31		6,812,500
		5,000,000	Williams Co., Inc., 7.75%, 06/15/31		2,725,000

					44,258,500

Real Estate Investment Trust (REIT)—2.37%		500,000	Developers Diversifield Realty Corp. (MTN), 6.84%, 12/16/04		535,086
Real Estate Investment Trust (REIT)—2.37%		1,000,000	Developers Diversifield Realty Corp. (MTN), 7.50%, 07/15/18		969,574
		1,700,000	Highwoods Exercisable Put Option, 7.19%, 06/15/04⁴		1,753,538
		3,000,000	Highwoods Realty LP, 6.75%, 12/01/03		3,057,597
		5,000,000	Highwoods Realty LP, 8.00%, 12/01/03		5,165,560
		3,000,000	Simon Property Group, Inc., 7.05%, 04/01/03⁴		3,059,628
		1,000,000	Simon Property Group LP, 6.75%, 07/15/04		1,059,522
		18,420,000	United Dominion Realty Trust, 8.63%, 03/15/03		18,854,270
		2,000,000	United Dominion Realty Trust (MTN), 7.67%, 01/26/04		2,084,628
		2,800,000	United Dominion Realty Trust (MTN), 7.73%, 04/05/05		3,074,865

					39,614,268

Secured Assets —3.70%		2,000,000	Century Funding Ltd., 1A C, 10.00%, 02/15/11^4,6		975,938
		5,000,000	Hercules Trust I (FRN), 3.00%, 06/10/03⁴		4,760,000
		10,000,000	Ingress I Ltd., B-A, 7.38%, 03/30/40⁴		10,489,060
		11,250,000	Ingress I Ltd., C-A, 8.01%, 03/30/40⁴		11,889,563
		4,172,105	Magnus Funding Ltd., 1A B (FRN), 3.33%, 06/15/11⁴		3,012,260
		5,691,903	Magnus Funding Ltd., 1A C, 10.28%, 06/15/11^4,6		3,773,555
		5,000,000	ML CBO Series 1996-PM-1 B, 7.87%, 12/17/06^4,6		2,605,500
		13,750,000	NorthStar CBO Ltd., 1997-2 A3, 6.68%, 07/15/09⁴		4,498,835
		2,750,000	North Street 2000-1A C (FRN), 3.56%, 04/28/11⁴		2,475,000
		5,250,000	Pamco CLO 1998-1A B2 (FRN), 3.17%, 05/01/10⁴		2,782,500
		10,426,500	Triton CBO III Ltd., 1A B, 8.53%, 04/17/11⁴		7,459,827
		10,000,000	Van Kampen II Ltd., (FRN), 3.12%, 07/15/08⁴		7,289,060

					62,011,098

Telecommuni- cations—5.59%		6,000,000	AT&T Canada, Inc. 7.63%, 03/15/05^6,9		765,000
		300,000	AT&T Canada, Inc. 10.75%, 11/01/07^6,9		34,500
		6,750,000	Citizens Communications, 7.63%, 08/15/08		6,353,762
		9,783,000	Citizens Communications, 9.25%, 05/15/11		9,702,153

	Principal Amount		Issues	Value

Corporates (continued)
Telecommuni- cations—(continued)	$	5,000,000	MCI Communications Corp., 7.50%, 08/20/04^6,8	$	1,375,000
Telecommuni- cations—(continued)		17,000,000	Qwest Capital Funding, 5.88%, 08/03/04		11,560,000
		5,120,000	Qwest Capital Funding, 7.90%, 08/15/10		2,329,600
		2,700,000	Qwest Capital Funding, 7.25%, 02/15/11⁴		1,208,250
		4,500,000	Qwest Capital Funding, 7.25%, 02/15/11		2,025,000
		14,845,000	Qwest Capital Funding, 7.00%, 08/03/09		6,680,250
		10,053,000	Qwest Communications International, 7.50%, 11/01/08		3,970,935
		3,670,000	Sprint Capital Corp., 5.70%, 11/15/03		3,342,904
		26,650,000	Sprint Capital Corp., 6.00%, 01/15/07		18,336,239
		2,300,000	U.S. West Capital Funding, 6.25%, 07/15/05		1,288,000
		15,000,000	U.S. West Capital Funding, 6.38%, 07/15/08		6,675,000
		3,300,000	U.S. West Capital Funding, 6.88%, 07/15/28		1,270,500
		4,300,000	Worldcom, Inc., 7.38%, 01/15/03^4,6,8		537,500
		29,000,000	Worldcom, Inc., 7.88%, 05/15/03^6,8		3,625,000
		31,980,000	Worldcom, Inc., 6.25%, 08/15/03^6,8		3,997,500
		8,927,000	Worldcom, Inc., 7.55%, 04/01/04^6,8		1,115,875
		39,120,000	Worldcom, Inc., 6.50%, 05/15/04^6,8		4,890,000
		20,500,000	Worldcom, Inc., 7.38%, 01/15/06^4,6,8		2,562,500

					93,645,468

			Total Corporates		622,203,172


Mortgage-Backed—22.13%³
Commercial Mortgage-Backed —3.75%		22,250,000	Beckman Coulter, Inc. 2000-A A, 7.50%, 12/15/18⁴		24,068,248
Commercial Mortgage-Backed —3.75%		3,026,000	Commercial Mortgage Lease-Backed Certificate 2001-CMLB D, 7.88%, 06/20/31⁴		3,106,613
		5,026,000	Commercial Mortgage Lease-Backed Certificate 2001-CMLB E, 7.88%, 06/20/31⁴		5,028,352
		276,407,449	GMAC Commercial Mortgage Securities, Inc. 1998-C2 X (IO), 0.79%, 05/15/35⁶		9,117,438
		15,155,000	LB-UBS Commercial Mortgage Trust 2000-C4 A2, 7.37%, 08/15/26		17,906,896
		642,136	Lehman Structured Securities Corp. 1996-1 E2, 8.00%, 06/25/26		643,869



Mortgage-Backed (continued)
Commercial Mortgage-Backed (continued)	$	3,080,260	Resolution Trust Corp. 1994-C1 F, 8.00%, 06/25/26	$	3,082,185

					62,953,601

Non-Agency Mortgage-Backed —4.94%		8,616,228	ARC Net Interest Margin Trust 2002-1 A, 7.75%, 01/27/32⁴		8,521,992
Non-Agency Mortgage-Backed —4.94%		246,577	BA Mortgage Securities, Inc. 1998-2 2B3, 6.50%, 06/25/13⁴		243,610
		296,117	BA Mortgage Securities, Inc. 1998-3 2B3, 6.50%, 07/25/13⁴		304,380
		312,771	BA Mortgage Securities, Inc. 1998-4 2B3, 6.50%, 08/25/13⁴		323,772
		5,744,063	Banco de Credito y Securitizacion SA 2001-1 AF, 8.00%, 05/31/10^4,6		2,533,706
		87,536	Bear Stearns Mortgage Securities, Inc. 1998-5 B4, 6.51%, 12/25/08⁴		89,547
		84,877	Bear Stearns Mortgage Securities, Inc. 1997-7 4B4, 7.00%, 01/25/13⁴		85,385
		3,050,129	Bear Stearns Structured Products, Inc. 1999-1 C, 6.32%, 11/30/13⁴		3,129,518
		1,797,559	Bear Stearns Structured Products, Inc. 1999-1 D, 6.32%, 11/30/13⁴		1,740,542
		891,420	Bear Stearns Structured Products, Inc. 1999-1 E, 6.32%, 11/30/13⁴		785,006
		3,573,285	BHN Mortgage Fund 2000-1 AF, 8.00%, 03/31/11^4,6		1,576,176
		4,572,252	BHN Mortgage Fund 1997-2 A1 (FRN), 3.10%, 05/31/17^4,6		1,742,485
		8,672,420	BHN Mortgage Fund 1997-2 A2, 7.54%, 05/31/17^4,6		3,305,059
		24,678	Blackrock Capital Finance L.P. 1997-R2 AP, 9.30%, 12/25/35⁴		26,066
		3,000,000	Blaylock Mortgage Capital Corp. 1997-A B1, 6.43%, 10/25/04⁴		3,138,525
		2,000,000	Chase Mortgage Finance Corp. 2000-S1 A6, 7.25%, 02/25/30		2,028,950
		850,399	Citicorp Mortgage Securities, Inc. 1998-7 A4 (IO), 6.75%, 08/25/28⁶		52,363
		173,742	CMC Securities Corporation III 1998-1 2B4, 6.50%, 04/25/13⁴		166,689
		140,280	CMC Securities Corporation III 1994-A A19, 18.63%, 02/25/24		151,574
		3,707,354	Countrywide Alternative Loan Trust 1999-2 B2, 7.50%, 01/25/29		3,906,902
		454,847	Countrywide Home Loans 1998-14 B3, 6.50%, 09/25/13⁴		453,958
		2,090,743	DLJ Mortgage Acceptance Corp. 1994-QE1 S (IO), 3.82%, 04/25/24^4,6		57,725
		582,685	DLJ Mortgage Acceptance Corp. 1994-Q8 IIS (IO), 1.85%, 05/25/24⁶		15,609

	Principal Amount		Issues	Value

Mortgage-Backed (continued)
Non-Agency Mortgage-Backed (continued)	$	430,319	DLJ Mortgage Acceptance Corp. 1994-QE2 S (IO), 4.03%, 06/25/24^4,6	$	1,136
Non-Agency Mortgage-Backed (continued)		3,142,645	DLJ Mortgage Acceptance Corp. 1995-Q7 SA (IO), 3.08%, 11/25/25⁶		63,199
		3,407,220	DLJ Mortgage Acceptance Corp. 1996-QA S (IO), 3.02%, 01/25/26^4,6		150,136
		2,098,706	DLJ Mortgage Acceptance Corp. 1996-QE3 SA (IO), 3.78%, 03/25/26⁶		41,974
		2,408,799	DLJ Mortgage Acceptance Corp. 1996-Q5 SA (IO), 6.06%, 06/25/26⁶		120,440
		51,362	First Boston Mortgage Securities Corp. 1993-6 A2, 7.00%, 06/25/23		51,284
		350,000	GE Capital Mortgage Services, Inc. 1994-2 A14, 6.75%, 01/25/09		368,881
		500,000	GE Capital Mortgage Services, Inc. 1994-6 A11, 6.50%, 04/25/24		496,317
		19,593	Guardian Savings And Loan Association 1989-3 A, 7.16%, 05/25/19		19,585
		1,461,878	IMPAC Secured Assets CMN Owner Trust 1999-2 A9 (IO), 9.00%, 01/25/30⁶		156,010
		273,140	Independent National Mortgage Corp.1994-Q B4, 7.50%, 09/25/14⁴		286,003
		17,588	Independent National Mortgage Corp.1995-N A5, 7.50%, 10/25/25		17,562
		4,442,121	Merrill Lynch Mortgage Investors, Inc. 2002-NC1N N1, 9.08%, 05/25/33⁴		4,451,143
		210,028	Norwest Integrated Structured Assets, Inc. 1999-2 1A2, 23.75%, 09/25/29		226,244
		315,150	Ocwen Residential MBS Corp. 1998-R2 AP, 6.86%, 11/25/34⁴		297,628
		285,724	Residential Accredit Loans, Inc. 1998-QS16 B1, 6.50%, 11/25/13		264,295
		2,208,408	Residential Accredit Loans, Inc. 1998-QS7 NB2, 6.75%, 07/25/28		2,219,682
		54,335,881	Residential Accredit Loans, Inc. 2001-QS17 A9A (IO), 5.60%, 11/25/31⁶		2,494,343
		4,714,589	Residential Asset Securitization Trust 1997-A4 A8, 7.75%, 06/25/27		4,798,862
		2,185,450	Residential Asset Securitization Trust 1999-A7 B3, 7.50%, 10/25/29		2,292,723
		163,955	Residential Funding Mortgage Sec I 1993-S42 A10, 8.30%, 10/25/08		178,096
		694,960	Residential Funding Mortgage Sec I 1997-S16 B1, 6.75%, 10/25/12		714,505
		8,208,053	Residential Funding Mortgage Sec I 2000-S16 A2, 7.50%, 12/25/30		8,277,698
		61,721	Resolution Trust Corp. 1995-2 B6, 5.25%, 05/25/29		62,049
		701,762	Ryland Mortgage Securities Corp. 1994-5 M3, 4.68%, 10/25/23		617,989



Mortgage-Backed (continued)
Non-Agency Mortgage-Backed (continued)	$ 5,457,458	Ryland Mortgage Securities Corp. III 1992-A 1C, 8.27%, 03/29/30	$ 5,551,135
	291,335	Structured Asset Mortgage Investments, Inc. 1998-8 3B4, 6.72%, 07/25/13	297,571
	150,000	Structured Asset Securities Corp. 1995-3B 2A1, 6.50%, 01/28/24	156,383
	647,251	Structured Asset Securities Corp. 1996-6 1A5, 7.50%, 08/25/26	665,539
	2,500,000	Structured Asset Securities Corp. 1997-2 2A4, 7.25%, 03/28/30	2,596,187
	3,095,457	Structured Asset Securities Corp. 2000-3 1A7, 8.00%, 07/25/30	3,149,266
	50,490	Structured Mortgage Asset Residential Trust 1991-7 I (IO), 15.52%, 12/25/22⁶	10,462
	2,519,691	Summit Mortgage Trust 2000-1 B1, 6.12%, 12/28/12⁴	2,761,029
	4,459,630	Wells Fargo Mortgage Backed Securities 2001-9 A14, 6.75%, 05/25/31	4,476,030

			82,710,925

U.S. Agency Mortgage-Backed —13.44%	32,635	Collateralized Mortgage Obligation Trust 57 D, 9.90%, 02/01/19	32,958
U.S. Agency Mortgage-Backed —13.44%	33,011	Fannie Mae 1993-221 SD, 9.00%, 03/25/08	33,586
	3,143,764	Fannie Mae 1997-44 SB (IO), 4.24%, 06/25/08	184,607
	9,770,022	Fannie Mae 1999-46 PD, 6.50%, 03/25/20	9,898,152
	2,744,862	Fannie Mae 1993-132 D (PO), 0.00%, 10/25/22	2,503,958
	275,122	Fannie Mae 1993-115 S, 10.39%, 07/25/23	285,495
	5,983,295	Fannie Mae 1993-199 SD (IO), 0.88%, 10/25/23	108,614
	271,230	Fannie Mae 1997-34 SA, 15.31%, 10/25/23	347,254
	9,236,273	Fannie Mae 2001-82 SA, 28.40%, 07/25/29	12,256,367
	26,634,443	Fannie Mae 2002-7 SJ (IO), 5.44%, 01/25/32	1,103,018
	44,935,000	Fannie Mae Gold, 5.50%, 10/15/17	46,283,050
	5,052,828	Fannie Mae Pool C90573, 6.50%, 08/01/22	5,273,682
	62,342	Fannie Mae Pool 233672, 5.95%, 09/01/23	64,468
	19,621,476	Fannie Mae Pool P50019, 7.00%, 07/01/24	20,608,692
	74,277	Fannie Mae Pool 312155, 6.13%, 03/01/25	76,205
	23,617	Fannie Mae Pool 308798, 5.54%, 04/01/25	24,307
	230,619	Freddie Mac 1164 O (IO), 8.64%, 11/15/06	20,770

	Principal Amount	Issues	Value

Mortgage-Backed (continued)
U.S. Agency Mortgage-Backed	$ 208,765	Freddie Mac 1515 SA, 8.61%, 05/15/08	$ 234,629
(continued)	642,002	Freddie Mac 1564 SA, 12.41%, 08/15/08	671,401
	1,110,983	Freddie Mac 1627 E, 6.00%, 02/15/23	1,120,754
	12,601,000	Freddie Mac 2029 PC, 6.00%, 05/15/23	12,898,928
	19,675,557	Freddie Mac 2145 MA, 6.00%, 07/15/26	20,088,744
	2,570,000	Freddie Mac 2420 BC, 6.50%, 07/15/26	2,690,225
	2,151,319	Freddie Mac 1980 Z, 7.00%, 07/15/27	2,296,187
	849,283	Freddie Mac 2098 TZ, 6.00%, 01/15/28	785,765
	110,386,766	Freddie Mac 2474 NS (IO), 5.73%, 01/15/28	6,987,096
	264,664	Freddie Mac 2156 S, 28.38%, 05/15/29	276,133
	22,974,000	Freddie Mac 2265 PB, 7.50%, 12/15/29	24,027,503
	1,990,575	Freddie Mac 2312 JA, 6.50%, 02/15/30	2,049,893
	25,000,000	Freddie Mac 2316 PB, 6.50%, 09/15/30	26,229,108
	10,000,000	Government National Mortgage Association 1997-8 PD, 7.50%, 04/16/26	10,270,412
	46,676,167	Government National Mortgage Association 1999-38 SP (IO), 0.25%, 05/16/26	146,404
	16,011,868	Government National Mortgage Association 2000-22 SG (IO), 8.98%, 05/16/30	3,017,691
	5,000,000	Government National Mortgage Association 2001-2 PB, 7.00%, 07/20/30	5,388,472
	6,000,000	Government National Mortgage Association 2001-62 AS, 14.64%, 09/20/31	6,078,750
	676,869	Government National Mortgage Association Pool 470634, 6.50%, 07/15/29	707,091

			225,070,369

		Total Mortgage-Backed	370,734,895

U.S. Treasury Securities—8.84%
U.S. Treasury Notes—7.51%	40,819,000	U.S. Principal Strip, 5.25%, 11/15/28	10,925,165
	61,367,000	U.S. Treasury Notes, 6.75%, 08/15/26	78,197,391
	34,536,000	U.S. Treasury Notes, 5.25%, 02/15/29	36,774,105

			125,896,661



U.S. Treasury Securities (continued)
U.S. Inflation Index Notes—1.33%	$ 18,064,000	U.S. Treasury Notes, 4.25%, 01/15/10	$ 22,287,853


		Total U.S. Treasury Securities	148,184,514

		Total Bonds
		(Cost $1,661,066,031)	1,480,318,923

Short Term Investments—13.48%
Money Market RIC—0.14%	2,355,270	J.P. Morgan Institutional Prime Money Market	2,355,270

U.S. Treasury Bills—13.34%	223,700,000	U.S. Treasury Bill, 1.57% to 1.67%⁵, 10/31/02	223,394,302


		Total Short Term Investments
		(Cost $225,755,217)	225,749,572


		Total Investments—101.85%
		(Cost $1,886,821,248)¹	1,706,068,495


		Cash and Other Assets, Less Liabilities—(1.85)%	(31,021,802	)

		Net Assets—100.00%	$1,675,046,693

² Securities with a call or reset feature will have an effective maturity date less than the stated maturity.

³ Securities backed by mortgage or consumer loans where payment is periodically made will have an effective maturity date less than the stated maturity date.

⁴ Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualifield institutional buyers. The market value of these securities at September 30, 2002 was $301,905,409 representing 18.02% of total net assets.

⁵ Represents annualized yield at date of purchase.

Security	Date of Purchase	Cost		Value		% of TNA

AT&T Canada, Inc., 10.75%, 11/01/07	11/30/01	$	215,571	$	34,500	0.00%
AT&T Canada, Inc., 7.63%, 03/15/05	01/14/02		2,767,207		765,000	0.05%
Banco de Credito y Securitizacion SA
2001-1 AF, 8.00%, 05/31/10	01/23/01		5,643,079		2,533,706	0.15%
BHN Mortgage Fund
1997-2 A1, 3.10%, 05/31/17	08/21/00		4,387,396		1,742,485	0.10%
BHN Mortgage Fund
1997-2 A2, 7.54%, 05/31/17	09/18/00		8,183,700		3,305,059	0.20%
BHN Mortgage Fund
2000-1 AF, 8.00%, 03/31/11	04/05/00		3,484,523		1,576,176	0.09%
Citicorp Mortgage Securities, Inc. 1998-7 A4 (IO), 6.75%, 08/25/28	09/21/99		61,261		52,363	0.00%
Century Funding, Ltd., 1A C,
10.00%, 02/15/11	10/06/00		1,542,197		975,938	0.06%
Conseco Finance Trust III, 8.80%, 04/01/27	11/30/99		8,102,218		74,250	0.00%
Conseco, Inc., 8.50%, 10/15/02	09/11/02		1,186,234		150,000	0.01%
Conseco, Inc., 8.75%, 02/09/04	09/11/02		12,176,908		2,400,000	0.14%
Conseco, Inc., 9.00%, 10/15/06	09/11/02		1,434,272		300,000	0.02%
DLJ Mortgage Acceptance Corp. 1994-QE1 S (IO), 3.82%, 04/25/24	01/06/99		76,649		57,725	0.00%
DLJ Mortgage Acceptance Corp. 1994-Q8 IIS (IO), 1.85%, 05/25/24	06/19/97		56,660		15,609	0.00%
DLJ Mortgage Acceptance Corp. 1994-QE2 S (IO), 4.03%, 06/25/24	01/06/99		47,370		1,136	0.00%
DLJ Mortgage Acceptance Corp. 1995-Q7 SA (IO), 3.08%, 11/25/25	10/20/98		3,678		63,199	0.00%
DLJ Mortgage Acceptance Corp. 1996-QA S (IO), 3.02%, 01/25/26	10/20/98		108,241		150,136	0.01%
DLJ Mortgage Acceptance Corp. 1996-QE3 SA (IO), 3.78%, 03/25/26	01/22/99		115,735		41,974	0.00%
DLJ Mortgage Acceptance Corp. 1996-Q5 SA (IO), 6.06%, 06/25/26	11/02/98		0		120,440	0.01%
GMAC Commercial Mortgage Securities, Inc. 1998-C2 X (IO), 0.79%, 05/15/35	02/07/01		8,266,421		9,117,438	0.55%
IMPAC Secured Assets CMN Owner Trust 1999-2 A9 (IO), 9.00%, 01/25/30	01/07/00		570,570		156,010	0.01%
Liberty Mutual Insurance Co., 7.70%, 10/15/97	06/21/00		2,188,117		2,518,020	0.15%
Lumbermen’s Mutual Casualty Co., 9.15%, 07/01/26	02/08/00		2,462,014		1,084,250	0.07%
Lumbermen’s Mutual Casualty Co., 8.30%, 12/01/37	08/12/99		1,142,861		560,963	0.03%
Lumbermen’s Mutual Casualty Co., 8.45%, 12/01/97	11/30/99		3,025,036		1,404,552	0.08%
Magnus Funding, Ltd., 1A C, 10.28%, 06/15/11	12/04/00		4,593,859		3,773,555	0.23%
MCI Communications Corp., 7.50%, 08/20/04	04/18/02		4,546,271		1,375,000	0.08%

Security	Date of		Value	% of TNA

Mississippi Chemical Corp., 7.25%, 11/15/17	06/28/99	$ 1,343,545	$ 457,500	0.03%
ML CBO Series 1996-PM-1 Series B, 1996-PM-1, 7.87%, 12/17/06	05/23/00	3,839,143	2,605,500	0.16%
NRG Energy, 6.75%, 07/15/06	06/13/02	7,029,020	1,748,250	0.10%
NRG Energy, 7.50%, 06/15/07	06/05/02	8,795,147	2,171,250	0.13%
Polaris Trust A1 (PO), 6.34%, 02/17/09	11/01/01	11,742,098	12,995,488	0.78%
Residential Accredit Loans, Inc. 2001-QS17 A9A (IO), 5.60%, 11/25/31	11/01/01	787,172	2,494,343	0.15%
Structured Mortgage Asset Residential Trust 1991-7 I (IO), 15.52%, 12/25/22	06/25/97	75,398	10,462	0.00%
Worldcom, Inc., 7.38%, 01/15/03	04/11/02	4,261,049	537,500	0.03%
Worldcom, Inc., 7.88%, 05/15/03	04/24/02	11,416,294	3,625,000	0.22%
Worldcom, Inc., 6.25%, 08/15/03	04/11/02	19,886,248	3,997,500	0.24%
Worldcom, Inc., 7.55%, 04/01/04	04/11/02	7,955,804	1,115,875	0.07%
Worldcom, Inc., 6.50%, 05/15/04	04/23/02	26,970,299	4,890,000	0.29%
Worldcom, Inc., 7.38%, 01/15/06	05/21/02	11,634,124	2,562,500	0.15%

		$192,123,389	$73,560,652	4.39%

	Principal Amount	Issues	Value

Bonds—86.52%
Asset-Backed Securities —27.77%³	$ 1,686,846	Aerofreighter Finance Trust A A, 7.85%, 12/15/09⁴	$ 1,698,426
Asset-Backed Securities —27.77%³	997,112	Aircraft Lease Portfolio Securitization Ltd. 1996-1 CX (FRN), 3.67%, 06/15/06	1,000,427
	1,052,515	Amresco Residential Securities Mortgage 1998-2 B1F, 7.72%, 06/25/28	1,038,043
	1,205,980	Atherton Franchisee Loan Funding 1999-A E, 8.25%, 10/15/15⁴	715,297
	5,150,000	Citi Financial Mortgage Securities, Inc. 2002-1 AF1, 2.47%, 07/25/32	5,150,453
	1,656,082	CIT Group Home Equity Loan Trust 1997-1 M2, 7.10%, 07/15/27	1,744,808
	9,400,000	Conseco Finance 1999-H BF1, 10.00%, 11/15/29	10,150,889
	3,000,000	Conseco Finance 2001-A IM2, 8.02%, 03/15/32	3,239,871
	9,000,000	Conseco Finance 2002-A A4, 6.32%, 04/15/32	9,730,647
	27,675,000	Conseco Finance Securitizations Corp. 2001-3 AIO (IO), 2.50%, 05/01/33⁶	2,118,853
	11,786	Contimortgage Home Equity Loan Trust 1994-4 A6, 8.27%, 12/15/24	11,786
	5,500,000	Countrywide Asset-Backed Certificates 2001-1 MV2 (FRN), 2.76%, 07/25/31	5,506,928
	2,000,000	Delta Funding Home Equity Loan Trust 1996-2 A5, 8.01%, 10/25/27	2,223,509
	8,759,046	Empire Funding Home Loan Owner Trust 1999-1 M2, 9.00%, 05/25/30	9,375,177
	437,500	Falcon Franchise Loan LLC 1999-1 D, 8.40%, 07/05/13⁴	449,600
	1,586,500	Falcon Franchise Loan LLC 1999-1 E, 6.50%, 01/05/14⁴	984,374
	57,273	First Alliance Mortgage Loan Trust 1994-3 A1, 7.83%, 10/25/25	57,177
	456,668	First Union Home Equity Loan Trust 1997-3 B, 7.39%, 03/25/29	472,223
	1,572,434	Firstcity Capital Home Equity Funding Corp. 1998-1 A4, 6.72%, 06/25/28⁴	1,653,104
	7,000,000	Galileo Securities, Inc. 2002-1A A1 (FRN), 1.45%, 02/03/11	6,139,217
	2,750,000	Green Tree Financial Corp. 1994-1 A5, 7.65%, 04/15/19	3,009,246
	4,700,000	Green Tree Financial Corp. 1995-10 A6, 7.05%,02/15/27	5,242,767
	3,526,781	Green Tree Financial Corp. 1995-10 B1, 7.05%, 02/15/27	2,959,192
	1,210,000	Green Tree Home Equity Loan Trust 1997-B M1, 7.65%, 04/15/27	1,276,767
	7,000,000	Green Tree Home Equity Loan Trust 1998-C B2, 8.06%, 07/15/29	4,174,524



Bonds (continued)
Asset-Backed Securities (continued)	$ 507,459	Green Tree Home Improvement Loan Trust 1996-F HIM1, 7.30%, 11/15/27	$ 528,357
	4,000,000	Green Tree Home Improvement Loan Trust 1997-E HEM2, 7.48%, 01/15/29	4,348,674
	5,000,000	Green Tree Home Improvement Loan Trust 1998-B HEB2, 8.49%, 11/15/29	3,195,315
	6,750,000	Green Tree Home Improvement Loan Trust 1998-B HEM2, 7.33%, 11/15/29	7,042,147
	3,338,560	Green Tree Recreational, Equipment & Consumer Trust 1996-B CTFS, 7.70%, 07/15/18	3,345,807
	4,000,000	Green Tree Recreational, Equipment & Consumer Trust 1996-D CTFS, 7.24%, 12/15/22	4,008,329
	1,185,772	Green Tree Recreational, Equipment & Consumer Trust 1998-A A4H, 8.26%, 05/15/29	1,286,219
	1,444,396	IMPAC Secured Assets CMN Owner Trust 1998-1 M2, 7.77%, 07/25/25	1,519,538
	84,860,424	Lehman ABS Manufactured Housing Contract 2001-B AIO1 (IO), 1.10%, 12/15/02⁶	273,081
	558,500,000	Lehman ABS Manufactured Housing Contract 2001-B AIO2 (IO), 0.00%, 10/15/05⁶	10,058,585
	688,896,810	Lehman ABS Manufactured Housing Contract 2001-B AIOC (IO), 0.06%, 05/15/41⁶	7,793,487
	4,175,000	Long Beach Mortgage Loan Trust 2001-2 M2 (FRN), 2.76%, 07/25/31	4,109,370
	6,800,000	Newbury Funding CBO Ltd. 2000-1 A3 (FRN), 4.50%, 02/15/30⁴	6,338,280
	24,383,224	Oakwood Mortgage Investors, Inc. 2002-B AIO (IO), 6.00%, 05/15/10	5,638,937
	3,686,877	Oakwood Mortgage Investors, Inc. 2001-C A1, 5.16%, 10/15/12	3,719,270
	8,806,150	Pegasus Aviation Lease Securitization 2000-1 B1, 8.08%, 03/25/30⁴	8,056,245
	6,359,625	Polaris Trust A1 (PO), 6.34%⁵, 02/17/09^4,6	4,998,265
	731,730	Residential Funding Mortgage Securities I 2000-HI1 AII, 8.11%, 02/25/25	785,258
	3,653,506	Structured Settlements Fund 1999-A A, 7.25%, 12/20/15⁴	3,941,219
	1,238,149	Team Fleet Financing Corp. 1997-1 A, 7.35%, 05/15/03⁴	1,177,232
	4,386,947	TMI Home Loan Trust 1998-A A4, 7.56%, 05/25/18⁴	4,443,100

	Principal Amount	Issues	Value

Bonds (continued)
Asset-Backed Securities (continued)	$3,109,243	Xerox Equipment Lease Owner Trust 2001-1 A (FRN), 3.82%, 02/15/08⁴	$ 3,118,960

		Total Asset-Backed Securities	169,848,980

Corporates—29.62%²
Airlines—1.26%	8,533,709	United Air Lines (FRN), 2.03%, 12/02/02	7,698,472

Automotive —1.01%	6,000,000	DaimlerChrysler NA Holdings, 7.75%, 05/27/03	6,181,998

Banks—0.64%	2,100,000	AB Spintab, 6.80%, 12/29/49⁴	2,112,400
	500,000	Christiania Bank (FRN), 2.31%, 11/29/49	393,637
	1,500,000	Providian National Bank, 6.70%, 03/15/03	1,398,954

			3,904,991

Commercial Services—0.24%	1,450,000	Cendant Corp., 7.75%, 12/01/03	1,459,769
Commercial Services—0.24%

Electric—1.56%	8,900,000	Gulf States Utilities (FRN), 3.11%, 09/01/04⁴	8,876,344
	3,000,000	NRG Energy, Inc., 6.75%, 07/15/06⁶	675,000

			9,551,344

Finance—14.44%	2,105,000	Bombardier Capital, Inc., 7.30%, 12/15/02⁴	2,080,563
	4,200,000	Capital One Bank, 6.50%, 07/30/04	3,977,816
	6,850,000	Capital One Bank, 8.25%, 06/15/05	6,599,694
	5,422,000	Finova Group, Inc., 7.50%, 11/15/09	1,680,820
	8,500,000	Ford Credit Australia (EMTN) (FRN), 1.98%, 06/06/03	8,338,500
	810,000	Ford Motor Credit Co. (FRN) (MTN), 2.24%, 01/26/04	778,560
	1,820,000	Ford Motor Credit Co. (EMTN) (FRN), 2.31%, 07/07/05	1,647,646
	8,100,000	Ford Motor Credit Co., 6.88%, 02/01/06	7,977,990
	8,450,000	Ford Motor Credit Co., 6.50%, 02/15/06	8,227,748
	1,000,000	Ford Motor Credit Co., 6.50%, 01/25/07	965,920
	6,670,000	Ford Motor Credit Co. (EMTN) (FRN), 2.02%, 03/13/07	5,671,501
	5,000,000	General Motors Acceptance Corp. (FRN) (MTN), 3.31%, 10/16/03	4,977,025
	5,000,000	General Motors Acceptance Corp. (MTN), 6.63%, 10/20/03	5,130,440
	2,000,000	General Motors Acceptance Corp. (FRN) (MTN), 2.61%, 05/04/04	1,951,246
	3,500,000	General Motors Acceptance Corp., 6.75%, 01/15/06	3,629,892
	4,260,000	General Motors Acceptance Corp., 6.13%, 09/15/06	4,331,214
	5,200,000	Golden State Holdings (FRN), 2.82%, 08/01/03	5,183,183



Corporates (continued)
Finance (continued)	$ 900,000	MBNA America Bank NA (FRN), 2.16%, 05/12/04⁴	$ 884,106
	7,500,000	MBNA America Bank NA (FRN), 2.08%, 06/10/04	7,349,138
	6,430,000	National Rural Utilities (MTN), 6.50%, 03/01/07	6,923,940

			88,306,942

Industrial—0.33%	2,000,000	Arrow Electronics, Inc., 8.20%, 10/01/03	2,035,010

Insurance—0.99%	750,000	Conseco, Inc., 8.50%, 10/15/02^6,8	93,750
	2,000,000	Conseco, Inc., 9.00%, 10/15/06^6,8	250,000
	7,000,000	Fairfax Financial Holdings, 7.38%, 03/15/06	5,162,311
	1,250,000	Lumbermens Mutual Casualty, 8.30%, 12/01/37^4,6	539,387

			6,045,448

Oil & Gas—1.89%	6,000,000	Noble Affiliates, Inc./Atlantic Meth, 8.95%, 12/15/04⁴	6,403,764
	5,000,000	Sempra Energy, 6.80%, 07/01/04	5,165,790

			11,569,554

Pipelines—1.03%	5,700,000	Williams Co., Inc., 9.25%, 03/15/04	4,360,500
	3,000,000	Williams Co., Inc., 6.75%, 01/15/06	1,950,000

			6,310,500

Secured Asset —2.15%	5,000,000	Hercules Trust I (FRN), 3.00%, 06/10/03⁴	4,760,000
	5,000,000	Ingress I Ltd. BA, 7.38%, 03/30/40⁴	5,244,530
	3,500,000	North Street 2000-1 (FRN), 3.56%, 07/30/10⁴	3,150,000

			13,154,530

Telecommuni- cations—4.08%	5,600,000	Citizens Communications, 8.50%, 05/15/06	5,380,894
	1,400,000	Citizens Communications, 7.60%, 06/01/06	1,351,717
	4,550,000	Citizens Communications, 7.63%, 08/15/08	4,282,906
	1,850,000	Qwest Capital Funding, 5.88%, 08/03/04	1,258,000
	7,250,000	Qwest Capital Funding, 7.75%, 08/15/06	3,915,000
	1,000,000	Qwest Communications International, 7.50%, 11/01/08	395,000
	1,000,000	Qwest Corp., 6.63%, 09/15/05	875,000
	2,500,000	Verizon Global Funding Corp., 6.13%, 06/15/07	2,605,988
	16,700,000	Worldcom, Inc., 7.88%, 05/15/03^6,7	2,087,500
	22,255,000	Worldcom, Inc., 6.50%, 05/15/04^6,7	2,781,875

			24,933,880

		Total Corporates	181,152,438

	Principal Amount	Issues	Value

Mortgage-Backed—22.74%³
Commercial Mortgage-Backed —4.21%	$ 3,000,000	Beckman Coulter, Inc. 2000-A A, 7.50%, 12/15/18⁴	$ 3,245,157
Commercial Mortgage-Backed —4.21%	5,000,000	Commercial Mortgage Lease-Backed Certificates 2001-CMLB C, 7.88%, 06/20/31⁴	5,508,985
	7,000,000	CS First Boston Mortgage Securities 2001-LCCA D (FRN), 4.99%, 12/05/13⁴	7,008,846
	6,379,920	Lehman Structured Securities Corp. 1996-1 E2, 8.00%, 06/25/26	6,397,146
	3,584,114	Resolution Trust Corp. 1994-C1 F, 8.00%, 06/25/26	3,586,354

			25,746,488

Non-Agency Mortgage-Backed —8.10%	6,885,243	ABN Amro Mortgage Corp. 2001-1 A5, 6.50%, 05/25/31	6,993,789
Non-Agency Mortgage-Backed —8.10%	4,100,116	ARC Net Interest Margin Trust 2002-2 A, 7.75%, 05/27/32⁴	4,065,523
	5,026,055	Banco de Credito y Securitization 2001-1 AF, 8.00%, 05/31/10^4,6	2,216,993
	195,420	Bear Stearns Mortgage Securities, Inc. 1993-8 AS16, 10.75%, 08/25/24	213,649
	5,359,928	BHN Mortgage Fund 2000-1 AF, 8.00%, 03/31/11^4,6	2,364,264
	98,711	Blackrock Capital Finance L.P. 1997-R2 AP, 9.30%, 12/25/35⁴	104,263
	253,150	Citicorp Mortgage Securities, Inc. 1994-3 A12, 9.00%, 02/25/24	269,486
	214,404	Countrywide Funding Corp. 1993-11 A12, 8.50%, 02/25/09	224,689
	100,000	Countrywide Funding Corp. 1994-7 A7, 6.50%, 03/25/24	103,440
	11,495,014	Countrywide Home Loans 2001-32 A6 (FRN), 3.16%, 02/25/32	11,516,142
	601,279	Countrywide Mortgage Backed Securities, Inc. 1993-D A12, 7.50%, 01/25/09	610,479
	41,061	DLJ Mortgage Acceptance Corp. 1993-Q18 SC (IO), 2.86%, 01/25/24⁶	108
	123,131	DLJ Mortgage Acceptance Corp. 1994-QE1 A1, 5.79%, 04/25/24⁴	122,823
	3,620,379	DLJ Mortgage Acceptance Corp. 1994-Q8 IIS (IO), 1.85%, 05/25/24⁶	96,983
	3,926,405	DLJ Mortgage Acceptance Corp. 1996-QA S (IO), 3.02%, 01/25/26^4,6	173,013
	868,448	DLJ Mortgage Acceptance Corp. 1996-Q5 SA (IO), 6.06%, 06/25/26⁶	43,422
	77,045	First Boston Mortgage Securities Corp. 1993-6 A2, 7.00%, 06/25/23	76,928



Mortgage-Backed (continued)
Non-Agency Mortgage-Backed	$ 6,612	GE Capital Mortgage Services, Inc. 1993-10 A2, 9.00%, 09/25/23	$ 6,731
(continued)	6,701,057	GE Capital Mortgage Services, Inc. 1996-4 A5, 7.00%, 03/25/26	6,806,096
	2,581,413	IMPAC CMB Trust 2001-1 M2 (FRN), 2.86%, 07/25/31	2,568,334
	29,314	Independent National Mortgage Corp. 1995-N A5, 7.50%, 10/25/25	29,270
	59,698	Norwest Asset Securities Corp. 1998-15 A15, 8.00%, 07/25/28	59,699
	252,034	Norwest Integrated Structured Assets, Inc. 1999-2 1A2, 23.75%, 09/25/29	271,493
	1,597,252	Prudential Home Mortgage Securities 1995-A 2B, 8.65%, 03/28/25⁴	1,712,732
	46,075,875	Residential Accredit Loans, Inc. 2001-QS12 A3A (IO), 6.14%, 09/25/31⁶	1,462,587
	4,906	Residential Funding Mortgage Securities I 1993-S26 A9, 7.50%, 07/25/23	4,898
	93,318	Residential Funding Mortgage Securities I 1997-S12 A17, 7.25%, 08/25/27	93,349
	82,295	Resolution Trust Corp. 1995-2 B6, 5.25%, 05/25/29	82,732
	250,664	Ryland Acceptance Corp. IV 28 1, 11.50%, 12/25/16	252,460
	113,542	Ryland Mortgage Securities Corp. III 1992-D 1A, 7.88%, 09/25/22	113,372
	4,584,264	Ryland Mortgage Securities Corp. III 1992-A 1C, 8.27%, 03/29/30	4,662,953
	24,652	SLH Mortgage Trust 1990-1 G, 9.60%, 03/25/21	24,616
	1,522,943	Structured Asset Securities Corp. 1996-6 1A5, 7.50%, 08/25/26	1,565,974
	541,099	Summit Mortgage Trust 2000-1 B1, 6.12%, 12/28/12⁴	592,926

			49,506,216

U.S. Agency Mortgage-Backed —10.43%	7,942,361	Fannie Mae 1998-40 E, 6.50%, 07/18/06	8,330,544
U.S. Agency Mortgage-Backed —10.43%	66,022	Fannie Mae 1993-221 SD, 9.00%, 03/25/08	67,172
	489,247	Fannie Mae 1993-95 SB, 15.05%, 06/25/08	579,730
	8,982,183	Fannie Mae 1997-44 SB (IO), 4.24%, 06/25/08	527,448
	35,877,766	Fannie Mae 2001-4 SG (IO), 5.89%, 03/25/16	2,887,095
	7,000,000	Fannie Mae 1998-45 PH, 5.75%, 11/18/21	7,103,651
	176,000	Fannie Mae 1993-202 SJ, 9.00%, 11/25/23	179,165
	195,091	Fannie Mae 1994-2 SB, 10.00%, 01/25/24	196,986

	Principal Amount	Issues	Value

Mortgage-Backed (continued)
U.S. Agency Mortgage-Backed (continued)	$ 867,775	Fannie Mae 1997-76 FS (FRN), 2.29%, 09/17/27	$ 857,517
U.S. Agency Mortgage-Backed (continued)	12,000,000	Fannie Mae 2002-65 TP, 7.00%, 03/25/31	12,614,064
	1,183,972	Fannie Mae Pool 567002, 8.00%, 05/01/23	1,275,334
	2,349,260	Fannie Mae Pool P50019, 7.00%, 07/01/24	2,467,458
	89,949	Fireman's Fund Mortgage Corp. 1987-2 E, 9.95%, 01/25/18	90,618
	230,619	Freddie Mac 1164-O (IO), 8.64%, 11/15/06	20,770
	1,231,646	Freddie Mac 2149 JD (IO), 6.50%, 04/15/17⁶	32,746
	3,728,019	Freddie Mac 2149 KQ (IO), 6.50%, 08/15/18⁶	101,080
	1,621,816	Freddie Mac 2174 PA, 6.50%, 03/15/22	1,654,517
	200,000	Freddie Mac 1634 SE, 8.80%, 12/15/23	203,339
	6,692,497	Freddie Mac 2274 TV, 6.00%, 09/15/28	6,804,065
	396,997	Freddie Mac 2156 S, 28.38%, 05/15/29	414,200
	10,000,000	Freddie Mac 2410 OT, 6.38%, 04/15/30	10,411,528
	409,885	Freddie Mac Gold 21 SG, 9.39%, 10/25/23	422,441
	1,311,105	Freddie Mac Pool 786781, 6.38%, 08/01/29	1,384,522
	26,892	Government National Mortgage Association Pool 1849, 8.50%, 08/20/24	29,389
	75,095	Government National Mortgage Association Pool 2020, 8.50%, 06/20/25	81,756
	46,686	Government National Mortgage Association Pool 2286, 8.50%, 09/20/26	50,747
	204,942	Government National Mortgage Association Pool 2487, 8.50%, 09/20/27	222,037
	441,579	Government National Mortgage Association Pool 468156, 6.50%, 08/15/28	461,410
	373,260	Government National Mortgage Association Pool 422972, 6.50%, 07/15/29	389,926
	3,822,476	Government National Mortgage Association Pool 80589, 6.00%, 03/20/32	3,940,487

			63,801,742


		Total Mortgage-Backed	139,054,446

U.S. Agency Securities—2.83%
U.S. Agency Securities—2.83%	15,402,000	Fannie Mae, 7.00%, 07/15/05	17,293,304



U.S. Treasury Securities—3.56%
U.S. Treasury Notes—3.56%	$ 6,993,000	U.S. Treasury Notes, 6.13%, 08/15/07	$ 8,105,328
	5,158,000	U.S. Treasury Notes, 6.00%, 08/15/09	6,041,106
	6,570,000	U.S. Treasury Notes, 5.75%, 08/15/10	7,638,400


		Total U.S. Treasury Securities	21,784,834

		Total Bonds
		(Cost $576,060,709)	529,134,002


Short Term Investments—17.53%
Money Market RIC —0.18%	1,102,000	J.P. Morgan Institutional Prime Money Market	1,102,000


U.S. Agency Discount Notes —0.04%	265,000	Fannie Mae, 1.69%⁵, 11/13/02	264,484
U.S. Agency Discount Notes —0.04%
U.S. Treasury Bills—17.31%	106,000,000	U.S. Treasury Bill, 1.60% to 1.67%⁵, 10/31/02	105,855,146


		Total Short Term Investments
		(Cost $107,220,942)	107,221,630


		Total Investments—104.05%
		(Cost $683,281,651)¹	636,355,632


		Cash and Other Assets, Less Liabilities—(4.05)%	(24,753,850	)


		Net Assets—100.00%	$611,601,782

² Securities with a call or reset feature will have an effective maturity date less than the stated maturity.

³ Securities backed by mortgage or consumer loans where payment is periodically made will have an effective date less than the stated maturity date.

⁴ Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The market value of these securities at September 30,2002 was $98,740,721 representing 16.14% of total net assets.

⁵ Represents annualized yield at date of purchase.

⁶ Securities determined to be illiquid and procedures approved by the Fund's Board of Trustees. Information related to these securities are as follows:

Security	Date of Purchase	Cost	Value	% of TNA
Banco de Credito y Securitization 2001-1 AF, 8.00%, 05/31/10	01/23/01	$ 4,937,927	$ 2,216,993	0.36%
BHN Mortgage Fund 2000-1 AF, 8.00%, 03/31/11	04/05/00	5,120,278	2,364,264	0.39%
Conseco, Inc., 8.50%, 10/15/02	10/18/01	736,297	93,750	0.01%
Conseco, Inc., 9.00%, 10/15/06	04/06/00	1,725,504	250,000	0.04%
Conseco Finance Securitizations Corp. 2001-3 AIO (IO), 2.50%, 05/01/33	08/17/01	2,180,866	2,118,853	0.35%
DLJ Mortgage Acceptance Corp. 1993-Q18 SC (IO), 2.86%, 01/25/24	10/01/97	0	108	0.00%
DLJ Mortgage Acceptance Corp. 1994-Q8 IIS (IO), 1.85%, 05/25/24	06/19/97	239,596	96,983	0.02%
DLJ Mortgage Acceptance Corp. 1996-QA S (IO), 3.02%, 01/25/26	10/20/98	112,900	173,013	0.03%
DLJ Mortgage Acceptance Corp. 1996-QA5 SA (IO), 6.06%, 06/25/26	01/04/99	0	43,422	0.01%
Freddie Mac 2149 JD (IO), 6.50%, 04/15/17	06/29/99	68,713	32,746	0.01%
Freddie Mac 2149 KQ (IO), 6.50%, 08/15/18	06/29/99	227,859	101,080	0.02%
Lehman ABS Manufactured Housing Contract 2001-B AIO1 (IO), 1.10%, 12/15/02	10/25/01	225,217	273,081	0.04%
Lehman ABS Manufactured Housing Contract 2001-B AIO2 (IO), 0.00%, 10/15/05	05/01/02	10,607,227	10,058,585	1.64%
Lehman ABS Manufactured Housing Contract 2001-B AIO (IO), 0.06%, 05/15/41	05/03/02	7,005,049	7,793,487	1.27%
Lumbermens Mutual Casualty, 8.30%, 12/01/37	08/12/99	1,098,905	539,387	0.09%

	Principal Amount	Issues	Value

Fixed Income Securities—78.19%
Asset-Backed Securities	$ 600,000	Conseco Finance 2000-C B2 (FRN), 3.87%, 07/15/29	$ 548,828
—23.12%³	2,450,000	Conseco Finance 2002-A A2, 4.69%, 04/15/32	2,466,836
	2,000,000	Conseco Finance 2002-B A2, 5.31%, 05/15/33	2,079,911
	1,000,000	Citi Financial Mortgage Securities, Inc. 2002-1 AF1, 2.47%, 07/25/32	1,000,088
	1,700,000	Embarcadero Aircraft Securitization 2000-A A1 (FRN), 2.30%, 08/15/25⁴	1,412,360
	77,331	First Alliance Mortgage Loan Trust 1994-4 A1, 9.28%, 02/25/26	73,142
	1,500,000	Galileo Securities, Inc. 2002-1A A1 (FRN), 1.45%, 02/03/11	1,315,546
	520,000	Green Tree Financial Corp. 1995-5 B2, 7.65%, 09/15/26	184,475
	82,538	Green Tree Home Improvement Loan Trust 1996-B A, 6.45%, 10/15/15	82,610
	1,000,000	Green Tree Home Improvement Loan Trust 1999-B M1, 8.38%, 07/15/26	1,094,259
	250,000	Green Tree Home Improvement Loan Trust 1998-B HEM2, 7.33%, 11/15/29	260,820
	878,568	Green Tree Recreational, Equipment & Consumer Trust 1996-B CTFS, 7.70%, 07/15/18	880,475
	1,000,000	Green Tree Recreational, Equipment & Consumer Trust 1996-D CTFS, 7.24%, 12/15/22	1,002,082
	684,422	IMPAC Secured Assets CMN Owner Trust 1998-1 M2, 7.77%, 07/25/25	720,027
	2,208,251	Indymac Home Equity Loan Asset-Backed Trust 2000-A AF2, 7.82%, 05/25/26	2,245,515
	706,636	Keystone Home Improvement Loan Trust 1997-P2 IB, 7.94%, 04/25/18⁴	744,654
	5,172	Nationscredit Grantor Trust 1997-1 A, 6.75%, 08/15/13	5,564
	500,000	Newbury Funding CBO Ltd. 2000-1 A3 (FRN), 4.50%, 02/15/30⁴	466,050
	171,258	Structured Settlements Fund 1999-A A, 7.25%, 12/20/15⁴	184,745
	594,645	Xerox Equipment Lease Owner Trust 2001-1 A (FRN), 3.82%, 02/15/08⁴	596,501

		Total Asset-Backed Securities	17,364,488

Corporates—40.92%²
Airlines—1.73%	262,840	America West Airlines, 6.86%, 07/02/04	224,296
	1,194,719	United Air Lines (FRN), 2.03%, 12/02/02	1,077,786

			1,302,082

Auto Parts & Equipment	1,300,000	Goodyear Tire & Rubber Co., 8.13%, 03/15/03	1,293,774
—1.73%



Corporates (continued)
Automotive —1.37%	$1,000,000	DaimlerChrysler NA Holdings, 7.75%, 05/27/03	$1,030,333

Banks—2.55%	1,300,000	Providian National Bank, 6.70%, 03/15/03	1,212,427
	700,000	Societe Generale (EMTN) (FRN), 2.48%, 10/29/49	695,313

			1,907,740

Commercial Services—4.65%	1,600,000	Hertz Corp. (FRN), 2.28%, 08/13/04	1,486,102
	2,000,000	PHH Corp. (MTN), 8.13%, 02/03/03	2,005,252

			3,491,354

Electric—3.62%	1,200,000	Calpine Corp., 8.25%, 08/15/05	516,000
	1,200,000	Enterprise Cap Trust II (FRN), 3.02%, 06/30/28	1,052,419
	689,029	Kansas Gas & Electric Co., 6.76%, 09/29/03	682,966
	2,000,000	NRG Energy, Inc., 8.00%, 11/01/03⁶	470,000

			2,721,385

Finance—6.63%	2,300,000	Capital One Bank (FRN), 2.77%, 06/23/03	2,285,388
	500,000	Capital One Bank (FRN), 2.54%, 07/28/03	495,376
	1,064,000	Finova Group, Inc., 7.50%, 11/15/09	329,840
	500,000	Ford Motor Credit Co, (EMTN) (FRN), 2.31%, 07/07/05	452,650
	300,000	Lehman Brothers Holdings, PLC (EMTN) (FRN), 2.16%, 07/30/04	301,143
	500,000	MBNA America Bank NA (FRN), 2.16%, 05/12/04⁴	491,170
	325,000	MBNA Corp. (FRN) (MTN), 2.39%, 02/12/03	324,357
	300,000	MBNA Corp. (FRN) (MTN), 2.42%, 05/23/03	298,827

			4,978,751

Insurance—0.97%	800,000	Fairfax Financial Holdings, 7.75%, 12/15/03	729,726

Oil & Gas—2.06%	1,500,000	Sempra Energy Co., 6.80%, 07/01/04	1,549,737

Pipelines—2.44%	2,400,000	Williams Co., Inc., 9.25%, 03/15/04	1,836,000

Real Estate Investment Trust	700,000	New Plan Excel Realty Trust (MTN), 7.33%, 11/20/03	731,767
(REIT)—6.19%	1,200,000	Rouse Co., 8.50%, 01/15/03	1,201,673
	1,500,000	Simon Property Group, Inc., 7.05%, 04/01/03⁴	1,529,814
	300,000	Summit Properties Partnership, 6.63%, 12/15/03	308,833
	600,000	United Dominion Realty Trust, 8.63%, 03/15/03	614,146
	250,000	United Dominion Realty Trust (MTN), 7.67%, 01/26/04	260,579

			4,646,812

	Principal Amount	Issues	Value

Corporates (continued)
Secured Assets —2.15%	$ 1,043,026	Magnus Funding Ltd. 1A B (FRN), 3.33%, 06/15/11⁴	$ 753,065
	940,917	Zermatt CBO Ltd. 1A A (FRN), 2.32%, 09/01/10⁴	858,116

			1,611,181

Telecommunica- tions—4.83%	1,603	Intermedia Communication (PFD), 13.50%, 03/31/09^6,7	20,037
	1,500,000	Qwest Capital Funding, 5.88%, 08/03/04	1,020,000
	1,200,000	Sprint Capital Corp., 5.88%, 05/01/04	1,037,756
	1,700,000	U.S. West Capital Funding, 6.25%, 07/15/05	952,000
	1,000,000	Worldcom, Inc., 7.38%, 01/15/03^4,6,7	125,000
	1,800,000	Worldcom, Inc., 7.88%, 05/15/03^6,7	225,000
	2,000,000	Worldcom, Inc., 6.50%, 05/15/04^6,7	250,000

			3,629,793

		Total Corporates	30,728,668

Mortgage-Backed—12.50%³
Commercial Mortgage-Backed —3.34%	2,000,000	CS First Boston Mortgage Securities 2001-LCCA D (FRN), 4.99%, 12/05/13⁴	2,002,527
	139,300	Lehman Structured Securities Corp. 1996-1 E2, 8.00%, 06/25/26	139,676
	363,606	Resolution Trust Corp. 1994-C1 F, 8.00%, 06/25/26	363,833

			2,506,036

Non-Agency Mortgage-Backed —3.45%	12,802,414	BA Mortgage Securities, Inc. 1998-3 1X2 (IO), 0.05%, 07/25/28⁶	1,600
	84,752	DLJ Mortgage Acceptance Corp. 1992-Q4 A2, 5.70%, 07/25/22	84,621
	662,030	DLJ Mortgage Acceptance Corp. 1994-QE2 S (IO), 4.03%, 06/25/24^4,6	1,748
	91,084	IMPAC Secured Assets CMN Owner Trust 1999-2 A9 (IO), 9.00%, 01/25/30⁶	9,720
	1,078,579	Residential Funding Mortgage Security 1998-S5 A11, 22.51%, 03/25/28	1,121,587
	11,936	Ryland Acceptance Corp. IV 28 1, 11.50%, 12/25/16	12,022
	21,102	Ryland Mortgage Securities Corp. III 1992-A 1C, 8.27%, 03/29/30	21,464
	61,238	Summit Mortgage Trust 2000-1 B5, 6.12%, 12/28/12⁴	62,339
	1,242,945	Wells Fargo Mortgage Backed Securities Trust 2000-2 1A7, 7.75%, 06/25/30	1,274,535

			2,589,636



Mortage-Backed (continued)
U.S. Agency Mortgage-Backed	$ 17,468	Fannie Mae 1993-95 SB, 15.05%, 06/25/08	$ 20,699
—5.71%	3,974,785	Fannie Mae 1997-91 SL (IO), 7.50%, 11/25/23	531,722
	24,842	Fannie Mae G-36 ZB, 7.00%, 11/25/21	26,828
	54,396	Freddie Mac Gold 2 L, 8.00%, 11/25/22	65,587
	1,617,768	Freddie Mac 2145 MA, 6.00%, 07/15/26	1,651,741
	1,948,624	Freddie Mac 2479 HK, 6.10%, 02/15/29	1,991,726

			4,288,303

		Total Mortgage-Backed	9,383,975

U.S. Agency Securities—1.65%
U.S. Agency Securities—1.65%	1,196,000	Freddie Mac, 3.88%, 02/15/05	1,242,691
		Total U.S. Agency Securities	1,242,691

		Total Fixed Income Securities
		(Cost $68,313,687)	58,719,822


	Shares

Common Stock—0.33%
	3,030	S & P 500 Depository Receipt	247,884


		Total Common Stock
		(Cost $271,211)	247,884


	Principal Amount

Short Term Investments—23.59%
Commercial Paper—10.58%	$2,050,000	Ford Motor Credit Co., 1.95%⁵, 10/21/02	$ 2,047,779
	2,200,000	General Electric Capital Corp., 1.76%⁵, 10/08/02	2,199,247
	3,700,000	General Motors Acceptance Corp., 2.02%⁵, 10/09/02	3,698,339

			7,945,365

Money Market RIC—2.37%	1,782,000	J.P. Morgan Institutional Prime Money Market	1,782,000

U.S. Agency	300,000	Fannie Mae, 1.62%⁵, 10/16/02	299,801
Discount Notes	60,000	Fannie Mae, 1.65%⁵, 10/16/02	59,960
—10.64%	636,000	Fannie Mae, 1.69%⁵, 11/06/02	634,925
	1,100,000	Freddie Mac, 1.69%⁵, 10/10/02	1,099,535
	1,285,000	Freddie Mac, 1.70%⁵, 10/18/02	1,283,969
	4,620,000	Freddie Mac, 1.70%⁵, 11/27/02	4,608,150

			7,986,340


		Total Short Term Investments
		(Cost $17,713,115)	17,713,705


		Total Investments—102.11%
		(Cost $86,298,013)¹	76,681,411


		Cash and Other Assets, Less Liabilities—(2.11)%	(1,583,333	)


		Net Assets—100.00%	$75,098,078

Notes: ¹ Cost for Federal income tax purposes is $86,298,013 and net unrealized depreciation consists of:
	Gross unrealized appreciation	$	1,058,913
	Gross unrealized depreciation		(10,675,515	)

	Net unrealized depreciation	$	(9,616,602	)

² Securities with a call or reset feature will have an effective maturity date less than the stated maturity. ³Securities backed by mortgage or consumer loans where payment is periodically made will have an effective date less than the stated maturity date. ⁴ Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The market value of these securities at September 30, 2002 was $9,228,089 representing 12.29% of total net assets. ⁵ Represents annualized yield at date of purchase. ⁶ Securities determined to be illiquid and procedures approved by the Fund's Board of Trustees. Information related to these securities are as follows:

Security	Date of Purchase	Cost		Value		% of TNA

BA Mortgage Securitues, Inc.
1998-3 1X2 (IO), 0.05%, 07/25/28	01/25/00	$	53,766	$	1,600	0.00%
DLJ Mortgage Acceptance
Corp. 1994-QE2 S (IO), 4.03%, 06/25/24	01/28/99		215,258		1,748	0.00%
IMPAC Secured Assets CMN
Owner Trust 1999-2 A9 (IO), 9.00%, 01/25/30	01/12/00		60,141		9,720	0.01%
Intermedia Communication (PFD), 13.50%, 03/31/09	11/30/01		1,704,932		20,037	0.03%
NRG Energy, Inc., 8.00%, 11/01/03	01/04/02		1,993,797		470,000	0.63%
Worldcom, Inc., 7.38%, 01/15/03	05/08/02		934,781		125,000	0.17%
Worldcom, Inc., 7.88%, 05/15/03	04/24/02		1,467,664		225,000	0.30%
Worldcom, Inc., 6.50%, 05/15/04	04/16/02		1,865,365		250,000	0.33%

		$	8,295,704	$	1,103,105	1.47%


⁷ Non-income producing. Security is in default. Issuing company has filed for reorganization under Chapter 11 of the U.S. Bankruptcy code. ⁸ Non-income producing. Security is in default. (EMTN): Euro Medium term note (FRN): Floating rate note—The rate disclosed is that in effect at September 30, 2002. (IO): Interest only (MTN): Medium term note (PFD): Preferred Stock

	Principal Amount	Issues	Value

Bonds—86.05%
Asset-Backed Securities—10.10%³	$2,350,000	AmeriQuest Mortgage Securities, Inc. 2002-3 S (IO), 6.00%, 08/25/32	$ 245,133
	400,000	Bear Stearns Asset Backed Securities, Inc. 2001-A AI4, 6.82%, 02/15/31	418,250
	500,000	Conseco Finance 2001-D A5, 6.19%, 11/15/32	508,620
	500,000	FHLMC Structured Pass Through Securities T-49 AF1, 2.57%, 12/25/32	500,622
	3,000	Green Tree Financial Corp. 1996-10 M1, 7.24%, 11/15/28	3,203
	992	Green Tree Home Improvement Loan Trust 1995-C B2, 7.60%, 07/15/20	924
	500,000	Residential Asset Mortgage Products, Inc. 2002-RS5 AI5, 5.41%, 09/25/32	507,078
	400,000	Saxon Asset Securities Trust 2000-3 AF4, 7.63%, 09/25/23	409,750

		Total Asset-Backed Securities	2,593,580

Corporates—6.85%²
Automotive—1.20%	300,000	DaimlerChrysler NA Holdings, 7.75%, 05/27/03	309,100

Finance—2.90%	280,000	Capital One Bank, 6.65%, 03/15/04	265,299
	2,000	Ford Motor Credit Co., 7.60%, 08/01/05	2,012
	180,000	Ford Motor Credit Co., 7.38%, 10/28/09	171,424
	30,000	Ford Motor Credit Co., 7.88%, 06/15/10	29,627
	30,000	Ford Motor Credit Co., 7.38%, 02/01/11	28,340
	150,000	General Motors Acceptance Corp., 6.13%, 08/28/07	151,199
	100,000	General Motors Acceptance Corp., 6.88%, 09/15/11	97,639

			745,540

Pipelines—1.67%	300,000	El Paso Corp., 7.00%, 05/15/11	198,338
	300,000	Williams Co., Inc., 9.25%, 03/15/04	229,500

			427,838

Telecommunications —1.08%	280,000	Citizens Communications, 9.25%, 05/15/11	277,686

		Total Corporates	1,760,164

Mortgage-Backed—32.06%³
Non-Agency Mortgage-Backed—2.71%	230,811	ABN Amro Mortgage Corp. 2002-1A 1A1, 5.85%, 06/25/32	237,385
Non-Agency Mortgage-Backed—2.71%	452,539	Norwest Asset Securities Corp. 1998-29 A5, 6.25%, 12/25/28	459,514

			696,899

U.S. Agency Mortgage-Backed—29.35%	1,702	Fannie Mae 545646, 7.00%, 09/01/26	1,787
U.S. Agency Mortgage-Backed—29.35%	1,851	Fannie Mae 527247, 7.00%, 09/01/26	1,940
	717,006	Fannie Mae 549740, 6.50%, 10/01/27	748,854



Mortgage-Backed (continued)
U.S. Agency Mortgage-Backed (continued)	$ 3,139	Fannie Mae 545331, 7.00%, 07/01/29	$ 3,289
	511,553	Fannie Mae 253974, 7.00%, 08/01/31	535,593
	2,000	Fannie Mae 1998-45 PH, 5.75%, 11/18/21	2,030
	700,000	Freddie Mac 2149 LQ, 6.00%, 08/15/18	711,973
	350,000	Freddie Mac 1403 M, 6.50%, 12/15/21	357,678
	395,799	Freddie Mac 1588 QC, 6.50%, 10/15/22	413,115
	600,000	Freddie Mac 2029 PC, 6.00%, 05/15/23	614,186
	638,865	Freddie Mac 2058 TB, 6.25%, 12/15/23	644,296
	113,518	Freddie Mac 2093 SM, 12.00%, 02/15/24	117,349
	290,625	Freddie Mac 1710 Z, 6.10%, 03/15/24	296,332
	572,543	Freddie Mac Gold P60031, 6.50%, 07/01/14	602,334
	250,000	Freddie Mac Gold TBA, 5.50%, 10/15/17	257,500
	484,058	Freddie Mac Gold 190249, 6.50%, 10/01/23	505,298
	477,448	Freddie Mac Gold P50019, 7.00%, 07/01/24	501,470
	673,202	Government National Mortgage Association Pool 781477, 7.50%, 12/15/23	722,367
	479,437	Government National Mortgage Association Pool 780584, 7.00%, 06/15/27	504,415

			7,541,806

		Total Mortgage-Backed	8,238,705


U.S. Treasury Securities—37.04%
U.S. Treasury Notes—35.02%	1,100,000	U.S. Treasury Notes, 6.13%, 08/15/07	1,274,969
	812,000	U.S. Treasury Notes, 6.00%, 08/15/09	951,023
	5,215,000	U.S. Treasury Notes, 5.75%, 08/15/10	6,063,053
	557,000	U.S. Treasury Notes, 6.75%, 08/15/26	709,762

			8,998,807

U.S. Treasury Inflation Index —2.02%	420,000	U. S. Treasury Inflation Index, 4.25%, 01/15/10	518,208
		Total U.S. Treasury Securities	9,517,015

		Total Bonds (Cost $21,583,011)	22,109,464


Short Term Investments—16.61%
Commercial Paper—8.71%	400,000	Ford Motor Credit Co., 1.95%⁴, 10/21/02	399,567
	1,210,000	General Electric Capital Corp., 1.75%⁴, 10/08/02	1,209,588
	630,000	National Rural Utilities, 1.75%⁴, 10/24/02	629,296

			2,238,451

	Total Return			Low Duration			AlphaTrak 500			Intermediate
	Bond Fund			Bond Fund			Fund			Bond Fund**
Assets:
Investments, at value (Cost $1,886,821,248, $683,281,651, $86,298,013, and $25,850,342, respectively) (Note 2)	$	1,706,068,495		$	636,355,632		$	76,681,411		$	26,376,795
Cash and cash equivalents (Note 2)		1,583,014			747,608			22,873			19,031
Dividends and interest receivable		23,091,009			4,659,035			616,280			165,413
Receivable for securities sold		22,936,945			6,990,536			1,901,000			250,000
Receivable for capital stock sold		3,931,593			1,112,005			848,858			0
Deferred unamortized organizational costs (Note 2)		0			0			2,839			0
Due from Adviser (Note 5)		0			0			10,113			1,381
Other assets		200,337			137,590			1,057			0

Total assets		1,757,811,393			650,002,406			80,084,431			26,812,620


Liabilities:
Payable for securities purchased		46,194,542			32,398,286			1,073,520			1,006,947
Payable for capital stock redeemed		28,407,002			3,396,143			86,736			0
Variation Margin (Note 3)		0			278,000			3,778,364			0
Due to Adviser (Note 5)		459,638			117,651			0			0
Accrued expenses		222,055			122,427			47,733			20,265
Accrued 12b-1 expenses		104,171			58,688			0			0
Distributions payable		7,377,292			2,029,429			0			91,157

Total liabilities		82,764,700			38,400,624			4,986,353			1,118,369

Net assets	$	1,675,046,693		$	611,601,782		$	75,098,078		$	25,694,251


Class M Shares:
Net assets (Applicable to 67,261,550, 42,263,356, 14,392,668, and 0 shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.01 par value)	$	611,814,794		$	392,494,075		$	75,098,078			N/A

Net asset value, offering and redemption price per Class M share	$	9.10		$	9.29		$	5.22			N/A


*Class I Shares:**
Net assets (Applicable to 116,917,266, 23,585,716, 0, and 2,469,351 shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.01 par value)	$	1,063,231,899		$	219,107,707			N/A		$	25,694,251

Net asset value, offering and redemption price per Class I share	$	9.09		$	9.29			N/A		$	10.41


Net Assets Consist of:
Capital paid-in	$	1,890,382,694		$	670,608,888		$	133,603,259		$	24,943,566
Accumulated undistributed net investment income		0			0			1,220,446			0
Accumulated undistributed net realized (loss)/gain on investments and futures contracts		(34,583,248	)		(11,656,306	)		(41,798,455	)		224,232
Net unrealized (depreciation)/appreciation on investments and futures contracts		(180,752,753	)		(47,350,800	)		(17,927,172	)		526,453

	$	1,675,046,693		$	611,601,782		$	75,098,078		$	25,694,251

	Total Return Bond Fund			Low Duration Bond Fund			AlphaTrak 500 Fund			Intermediate Bond Fund*
	Total Return Bond Fund			Low Duration Bond Fund			AlphaTrak 500 Fund			Intermediate Bond Fund*
Investment Income:
Dividends	$	0		$	0		$	1,022		$	0
Interest		75,592,894			20,746,725			2,897,779			188,332

Total investment income		75,592,894			20,746,725			2,898,801			188,332


Expenses:
Investment advisory fees (Note 5)		3,272,253			1,053,919			110,353			15,225
Administration fees		571,348			230,774			40,666			1,679
Amortization of organizational expenses (Note 2)		0			0			1,929			0
Auditing and tax consulting fees		15,041			11,030			8,022			4,029
Custodian fees		105,716			45,584			11,362			1,007
Distribution fees		751,616			413,198			0			0
Insurance expenses		21,024			8,624			1,004			0
Legal fees		21,058			9,025			1,203			336
Miscellaneous expenses		8,022			6,518			752			336
Registration and filing fees		25,821			14,038			10,027			8,705
Reports to shareholders		24,066			14,038			5,264			2,854
Transfer agent fees		98,448			66,947			15,576			6,221
Trustees’ fees and expenses		16,796			6,518			752			168

Total operating expenses		4,931,209			1,880,213			206,910			40,560

Expenses waived and reimbursed (Note 5)		(64,807	)		(96,590	)		(5,116	)		(21,420	)

Net expenses		4,866,402			1,783,623			201,794			19,140


Net investment income		70,726,492			18,963,102			2,697,007			169,192


Realized and Unrealized Gain (Loss) on Investments and Future Contracts:
Net realized (loss)/gain on investments and futures contracts		(40,716,571	)		(232,485	)		(23,237,379	)		224,232
Net change in unrealized (depreciation)/appreciation on investments		(131,861,534	)		(43,438,569	)		(9,725,667	)		526,453
Net change in unrealized depreciation on futures contracts		0			(885,468	)		(8,401,800	)		0


Net realized and unrealized (loss)/gain on investments and futures contracts		(172,578,105	)		(44,556,522	)		(41,364,846	)		750,685


Net (Decrease)/Increase in Net Assets from Operations	$	(101,851,613	)	$	(25,593,420	)	$	(38,667,839	)	$	919,877

	Total Return Bond Fund
	Six Months Ended September 30, 2002 (Unaudited)			Year Ended March 31, 2002
Operations:
Net investment income	$	70,726,492		$	103,852,345
Net realized (loss)/gain on investments and futures contracts		(40,716,571	)		18,564,590
Net change in unrealized (depreciation) on investments		(131,861,534	)		(66,524,529	)

Net (decrease)/increase in net assets resulting from operations		(101,851,613	)		55,892,406


Dividends and Distributions to Shareholders from:
Net investment income:
Class M		(26,659,678	)		(40,487,581	)
Class I		(44,066,814	)		(63,361,449	)
Realized gains on investments:
Class M		0			(6,291,571	)
Class I		0			(9,106,610	)

Net decrease in net assets resulting from distributions		(70,726,492	)		(119,247,211	)


Capital Share Transactions:
Class M:
Proceeds from sale of shares		200,966,022			499,653,154
Shares issued in reinvestment of dividends and distributions		21,517,567			42,927,332
Cost of shares redeemed		(236,930,498	)		(251,219,740	)

Total class M capital share transactions		(14,446,909	)		291,360,746


Class I:
Proceeds from sale of shares		274,322,614			739,623,471
Shares issued in reinvestment of dividends and distributions		35,825,034			66,228,395
Cost of shares redeemed		(247,261,419	)		(266,298,196	)


Total class I capital share transactions		62,886,229			539,553,670


Net increase in net assets resulting from capital share transactions		48,439,320			830,914,416

Net increase in net assets		(124,138,785	)		767,559,611
Net assets at beginning of period		1,799,185,478			1,031,625,867


Net assets at end of period (including undistributed net investment income of $0 and $0, respectively)	$	1,675,046,693		$	1,799,185,478

	Low Duration Bond Fund
	Six Months Ended September 30, 2002 (Unaudited)			Year Ended March 31, 2002




Operations:
Net investment income	$	18,963,102		$	36,159,182
Net realized (loss) on investments and futures contracts		(232,485	)		(3,486,122	)
Net change in unrealized (depreciation) on investments		(43,438,569	)		(8,475,789	)
Net change in unrealized (depreciation)/appreciation on futures contracts		(885,468	)		283,039

Net (decrease)/increase in net assets resulting from operations		(25,593,420	)		24,480,310


Dividends and Distributions to Shareholders from:
Net investment income:
Class M		(11,551,246	)		(16,798,301	)
Class I		(7,411,856	)		(19,360,881	)
Realized gains on investments:
Class M		0			0
Class I		0			0

Net decrease in net assets resulting from distributions		(18,963,102	)		(36,159,182	)


Capital Share Transactions:
Class M:
Proceeds from sale of shares		140,115,912			385,012,181
Shares issued in reinvestment of dividends and distributions		9,932,648			16,183,205
Cost of shares redeemed		(154,798,720	)		(136,039,839	)

Total class M capital share transactions		(4,750,160	)		265,155,547

Class I:
Proceeds from sale of shares		112,240,608			418,967,695
Shares issued in reinvestment of dividends and distributions		5,393,424			16,637,436
Cost of shares redeemed		(208,640,110	)		(360,434,909	)

Total class I capital share transactions		(91,006,078	)		75,170,222

Net increase in net assets resulting from capital share transactions		(95,756,238	)		340,325,769

Net increase in net assets		(140,312,760	)		328,646,897
Net assets at beginning of period		751,914,542			423,267,645


Net assets at end of period (including undistributed net investment income of $0 and $0, respectively)	$	611,601,782		$	751,914,542

	AlphaTrak 500 Fund
	Six Months Ended September 30, 2002 (Unaudited)			Year Ended March 31, 2002
Operations:
Net investment income	$	2,697,007		$	3,913,061
Net realized (loss) on investments and futures contracts		(23,237,379	)		(8,911,312	)
Net change in unrealized (depreciation)/appreciation on investments		(9,725,667	)		224,201
Net change in unrealized (depreciation)/appreciation on futures contracts		(8,401,800	)		5,911,249

Net (decrease)/increase in net assets resulting from operations		(38,667,839	)		1,137,199


Dividends and Distributions to Shareholders from:
Net investment income		(2,603,855	)		(3,571,394	)
Realized gains on investments		0			0

Net decrease in net assets resulting from distributions		(2,603,855	)		(3,571,394	)


Capital Share Transactions:
Proceeds from sale of shares		39,098,899			55,320,116
Shares issued in reinvestment of dividends and distributions		2,515,596			3,563,680
Cost of shares redeemed		(11,993,962	)		(24,067,432	)


Net increase in net assets resulting from capital share transactions		29,620,533			34,816,364

Net increase in net assets		(11,651,161	)		32,382,169
Net assets at beginning of period		86,749,239			54,367,070


Net assets at end of period (including undistributed net investment income of $1,220,446 and $1,127,294, respectively)	$	75,098,078		$	86,749,239

	Intermediate Bond Fund*
	Period Ended September 30, 2002 (Unaudited)
Operations:
Net investment income	$	169,192
Net realized gain on investments and futures contracts		224,232
Net change in unrealized appreciation on investments		526,453


Net increase in net assets resulting from operations		919,877


Dividends and Distributions to Shareholders from:
Net investment income		(169,192	)
Realized gains on investments		0


Net decrease in net assets resulting from distributions		(169,192	)


Capital Share Transactions:
Proceeds from sale of shares		24,967,913
Shares issued in reinvestment of dividends and distributions		77,889
Cost of shares redeemed		(102,236	)


Net increase in net assets resulting from capital share transactions		24,943,566

Net increase in net assets		25,694,251
Net assets at beginning of period		0


Net assets at end of period (including undistributed net investment income of $0)	$	25,694,251

	Total Return Bond Fund
	Class M			Class M			Class M			Class M			Class M			Class M
	Six Months Ended September 30, 2002# (Unaudited)			Year Ended March 31, 2002#			Year Ended March 31, 2001#			Year Ended March 31, 2000#			Year Ended March 31, 1999#			Year Ended March 31, 1998#




Net Asset Value, Beginning of Period	$	9.95		$	10.34		$	10.08		$	10.53		$	10.49		$	10.00


Income from Investment Operations:
Net investment income		0.36			0.73			0.92			0.78			0.71			0.73
Net realized and unrealized (loss)/gain on investments and futures contracts		(0.85	)		(0.29	)		0.26			(0.44	)		0.19			0.60

Total from Investment Operations		(0.49	)		0.44			1.18			0.34			0.90			1.33


Less Distributions:
Dividends from net investment income		(0.36	)		(0.73	)		(0.92	)		(0.78	)		(0.71	)		(0.73	)
Distributions from net capital gains on investments		0.00			(0.10	)		0.00			(0.01	)		(0.15	)		(0.11	)

Total Distributions		(0.36	)		(0.83	)		(0.92	)		(0.79	)		(0.86	)		(0.84	)


Net Asset Value, End of Period	$	9.10		$	9.95		$	10.34		$	10.08		$	10.53		$	10.49


Total Return		(5.05	)%²		4.39	%		12.46	%		3.39	%		8.84	%		13.71	%

Ratios/Supplemental Data:
Net Assets, end of period (in thousands)	$	611,815		$	692,279		$	426,467		$	250,794		$	115,233		$	24,983
Ratio of Expenses to Average Net Assets
Before expense reimbursement		0.66	%¹		0.68	%		0.71	%		0.77	%		0.97	%		1.99	%
After expense reimbursement		0.65	%¹		0.65	%		0.65	%		0.65	%		0.65	%		0.65	%
Ratio of Net Income to Average Net Assets
Before expense reimbursement		7.44	%¹		7.11	%		9.10	%		7.56	%		6.60	%		6.05	%
After expense reimbursement		7.45	%¹		7.14	%		9.16	%		7.68	%		6.92	%		7.39	%
Portfolio Turnover Rate		48	%²		78	%		205	%		128	%		136	%		235	%

	Total Return Bond Fund*
	Class I			Class I			Class I
	Six Months Ended September 30, 2002# (Unaudited)			Year Ended March 31, 2002#			Year Ended March 31, 2001#




Net Asset Value, Beginning of Period	$	9.94		$	10.34		$	10.08


Income from Investment Operations:
Net investment income		0.37			0.75			0.94
Net realized and unrealized (loss)/gain on investments and futures contracts		(0.85	)		(0.30	)		0.26

Total from Investment Operations		(0.48	)		0.45			1.20


Less Distributions:
Dividends from net investment income		(0.37	)		(0.75	)		(0.94	)
Distributions from net capital gains on investments		0.00			(0.10	)		0.00

Total Distributions		(0.37	)		(0.85	)		(0.94	)


Net Asset Value, End of Period	$	9.09		$	9.94		$	10.34


Total Return		(4.96	)%²		4.51	%		12.70	%

Ratios/Supplemental Data:
Net Assets, end of period (in thousands)	$	1,063,232		$	1,106,907		$	605,159
Ratio of Expenses to Average Net Assets
Before expense reimbursement		0.45	%¹		0.47	%		0.50	%
After expense reimbursement		0.44	%¹		0.44	%		0.44	%
Ratio of Net Income to Average Net Assets
Before expense reimbursement		7.65	%¹		7.32	%		9.31	%
After expense reimbursement		7.66	%¹		7.35	%		9.37	%
Portfolio Turnover Rate		48	%²		78	%		205	%

	Low Duration Bond Fund
	Class M			Class M			Class M			Class M			Class M			Class M
	Six Months Ended September 30, 2002# (Unaudited)			Year Ended March 31, 2002#			Year Ended March 31, 2001#			Year Ended March 31, 2000#			Year Ended March 31, 1999#			Year Ended March 31, 1998#
Net Asset Value, Beginning of Period	$	9.87		$	10.03		$	9.99		$	10.15		$	10.18		$	10.00


Income from Investment Operations:
Net investment income		0.25			0.63			0.80			0.72			0.66			0.65
Net realized and unrealized (loss)/gain on investments and futures contracts		(0.58	)		(0.16	)		0.04			(0.11	)		(0.02	)		0.19

Total from Investment Operations		(0.33	)		0.47			0.84			0.61			0.64			0.84


Less Distributions:
Dividends from net investment income		(0.25	)		(0.63	)		(0.80	)		(0.72	)		(0.66	)		(0.65	)
Distributions from net capital gains on investments		0.00			0.00			0.00			(0.05	)		(0.01	)		(0.01	)

Total Distributions		(0.25	)		(0.63	)		(0.80	)		(0.77	)		(0.67	)		(0.66	)


Net Asset Value, End of Period	$	9.29		$	9.87		$	10.03		$	9.99		$	10.15		$	10.18


Total Return		(3.33	)%²		4.74	%		8.89	%		6.22	%		6.54	%		8.71	%

Ratios/Supplemental Data:
Net Assets, end of period (in thousands)	$	392,494		$	424,441		$	166,246		$	367,943		$	235,337		$	135,313
Ratio of Expenses to Average Net Assets
Before expense reimbursement		0.61	%¹		0.64	%		0.65	%		0.66	%		0.70	%		0.93	%
After expense reimbursement		0.58	%¹		0.58	%		0.58	%		0.58	%		0.58	%		0.58	%
Ratio of Net Income to Average Net Assets
Before expense reimbursement		5.30	%¹		6.15	%		8.01	%		7.14	%		6.49	%		6.37	%
After expense reimbursement		5.33	%¹		6.21	%		8.08	%		7.22	%		6.61	%		6.72	%
Portfolio Turnover Rate		37	%²		26	%		53	%		126	%		73	%		102	%

	Low Duration Bond Fund*
	Class I			Class I			Class I
	Six Months Ended September 30, 2002# (Unaudited)			Year Ended March 31, 2002#			Year Ended March 31, 2001#
Net Asset Value, Beginning of Period	$	9.87		$	10.03		$	9.99


Income from Investment Operations:
Net investment income		0.26			0.65			0.82
Net realized and unrealized (loss)/gain on investments and futures contracts		(0.58	)		(0.16	)		0.04

Total from Investment Operations		(0.32	)		0.49			0.86


Less Distributions:
Dividends from net investment income		(0.26	)		(0.65	)		(0.82	)
Distributions from net capital gains on investments		0.00			0.00			0.00

Total Distributions		(0.26	)		(0.65	)		(0.82	)


Net Asset Value, End of Period	$	9.29		$	9.87		$	10.03


Total Return		(3.24	)%²		4.94	%		9.10	%

Ratios/Supplemental Data:
Net Assets, end of period (in thousands)	$	219,108		$	327,473		$	257,021
Ratio of Expenses to Average Net Assets
Before expense reimbursement		0.42	%¹		0.45	%		0.46	%
After expense reimbursement		0.39	%¹		0.39	%		0.39	%
Ratio of Net Income to Average Net Assets
Before expense reimbursement		5.49	%¹		6.34	%		8.20	%
After expense reimbursement		5.52	%¹		6.40	%		8.27	%
Portfolio Turnover Rate		37	%²		26	%		53	%

	AlphaTrak 500 Fund*
	Six Months Ended September 30, 2002# (Unaudited)			Year Ended March 31, 2002#			Year Ended March 31, 2001#			Year Ended March 31, 2000#			Period Ended March 31, *1999#**
Net Asset Value, Beginning of Period	$	8.20		$	8.47		$	11.90		$	11.40		$	10.00


Income from Investment Operations:
Net investment income		0.20			0.48			0.75			0.63			0.44
Net realized and unrealized (loss)/gain on investments and futures contracts		(2.99	)		(0.27	)		(3.12	)		1.43			1.22

Total from Investment Operations		(2.79	)		0.21			(2.37	)		2.06			1.66


Less Distributions:
Dividends from net investment income		(0.19	)		(0.48	)		(0.74	)		(0.70	)		(0.26	)
Distributions from net capital gains on investments		0.00			0.00			(0.32	)		(0.86	)		0.00

Total Distributions		(0.19	)		(0.48	)		(1.06	)		(1.56	)		(0.26	)


Net Asset Value, End of Period	$	5.22		$	8.20		$	8.47		$	11.90		$	11.40


Total Return		(34.45	)%²		2.66	%		(21.20	)%		19.28	%		17.28	%²

Ratios/Supplemental Data:
Net Assets, end of period (in thousands)	$	75,098		$	86,749		$	54,367		$	26,931		$	8,104
Ratio of Expenses to Average Net Assets
Before expense reimbursement		0.45	%¹		0.89	%		0.88	%		1.59	%		3.39	%¹
After expense reimbursement		0.44	%¹		0.80	%		0.63	%		0.66	%		0.72	%¹
Ratio of Net Income to Average Net Assets
Before expense reimbursement		5.88	%¹		5.64	%		7.31	%		5.56	%		4.14	%¹
After expense reimbursement		5.89	%¹		5.73	%		7.56	%		6.49	%		6.81	%¹
Portfolio Turnover Rate		44	%²		23	%		82	%		280	%		74	%²

	Intermediate Bond Fund*
	Period Ended September 30, 2002# (Unaudited)
Net Asset Value, Beginning of Period	$	10.00


Income from Investment Operations:
Net investment income		0.09
Net realized and unrealized gain on investments and futures contracts		0.41

Total from Investment Operations		0.50


Less Distributions:
Dividends from net investment income		(0.09	)
Distributions from net capital gains on investments		0.00

Total Distributions		(0.09	)


Net Asset Value, End of Period	$	10.41


Total Return		4.98	%¹

Ratios/Supplemental Data:
Net Assets, end of period (in thousands)	$	25,694
Ratio of Expenses to Average Net Assets
Before expense reimbursement		0.92	%¹
After expense reimbursement		0.44	%¹
Ratio of Net Income to Average Net Assets
Before expense reimbursement		3.36	%¹
After expense reimbursement		3.85	%¹
Portfolio Turnover Rate		50	%²

The Metropolitan West Funds (the “Trust”) is an open-end management investment company organized as a Delaware business trust on December 9, 1996 and registered under the Investment Company Act of 1940, as amended. Metropolitan West Asset Management, LLC (the “Adviser”), a registered investment adviser, provides the Funds with investment management services. The Trust currently consists of six separate diversified portfolios (each a “Fund” and collectively, the “Funds”): Metropolitan West Total Return Bond Fund (the “Total Return Bond Fund”), Metropolitan West Low Duration Bond Fund (the “Low Duration Bond Fund”), Metropolitan West Intermediate Bond Fund (the “Intermediate Bond Fund”), Metropolitan West High Yield Bond Fund (the “High Yield Bond Fund”), Metropolitan West AlphaTrak 500 Fund (the “AlphaTrak 500 Fund”) and the Metropolitan West Short-Term Investment Fund (the “Short-Term Investment Fund”). The Total Return Bond Fund and Low Duration Bond Fund commenced investment operations on March 31, 1997. Effective March 31, 2000, the Low Duration Bond Fund and the Total Return Bond Fund offered two classes of shares: Class M (existing shares) and Class I shares. The AlphaTrak 500 Fund commenced investment operations on June 29, 1998. The Intermediate Bond Fund – Class I commenced operations on June 28, 2002. The High Yield Bond Fund – Class M commenced operations on September 30, 2002 and is not included in this report. The Short-Term Investment Fund was not operational at September 30, 2002.

Fixed-income securities for which market quotations are readily available are valued at the average of the latest bid and asked prices. However, securities with a demand feature exercisable within one to seven days are valued at par. The Funds receive pricing information from independent pricing vendors approved by the Board of Trustees. The Funds also use a benchmark pricing system to the extent vendors’ prices for their securities are either inaccurate (such as when the reported prices are different from recent known market transactions) or are not available from another pricing source. The benchmark pricing system is continuously reviewed by the Adviser and implemented according to the pricing policy reviewed by the Board of Trustees. This report uses bid quotations received from broker-dealers to value securities that have been priced during the reporting period using benchmark pricing. Debt securities which mature in less than 60 days are valued at amortized cost (unless the Board of Trustees determines that this method does not represent fair value). S&P 500 futures contracts are valued at the first sale price after 4 p.m. EST on the Chicago Mercantile Exchange. All other futures contracts are valued at the official settlement price of the exchange which it is traded. Equity securities, including depository receipts, are valued at the last reported sale price on the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the average of the bid and asked prices. In cases where equity securities

The Funds may invest in mortgage pass-through securities which represent interests in pools of mortgages in which payments of both principal and interest on the securities are generally made monthly, in effect “passing through” monthly payments made by borrowers on the residential or commercial mortgage loans which underlie the securities (net of any fees paid to the issuer or guarantor of the securities). Mortgage pass-through securities differ from other forms of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates.

Payment of principal and interest on some mortgage-related securities (but not the market value of the securities themselves) may be guaranteed by the full faith and credit of the U.S. Government (in the case of securities guaranteed by GNMA) or by agencies or instrumentalities of the U.S. Government (in the case of securities guaranteed by FNMA or the FHLMC, which are supported only by the discretionary authority of the U.S. Government to purchase the agency’s obligations). Mortgage pass-through securities created by non-governmental issuers (such as commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers) may be supported by various forms of insurance or guarantees, including individual loan, title, pool and hazard insurance, and letters of credit, which may be issued by governmental entities, private insurers or the mortgage poolers.

The Funds may also invest in Collateralized Mortgage Obligations (“CMO”). CMOs are debt obligations collateralized by residential or commercial mortgage loans or residential or commercial mortgage pass-through securities. Interest and principal are generally paid monthly. CMOs may be collateralized by whole mortgage loans or private mortgage pass-through securities but are more typically collateralized by portfolios of mortgage pass-through securities guaranteed by GNMA, FHLMC, or FNMA. The issuer of a series of CMOs may elect to be treated for tax purposes as a Real Estate Mortgage Investment Conduit (“REMIC”). CMOs are structured into multiple classes, each bearing a different stated maturity. Monthly payment of principal received from the pool of underlying mortgages, including prepayments, is first returned to investors holding the shortest maturity class. Investors holding the longer maturity classes usually receive principal only after shorter classes have been retired. An investor may be partially protected against a sooner than desired return of principal because of the sequential payments.

The Funds may invest in stripped mortgage-backed securities issued by the U.S. Government, its agencies and instrumentalities. Stripped mortgage-backed securities are usually structured with two classes that receive different proportions of the interest and principal distributions on a pool of mortgage assets. In certain cases, one class will receive all of the interest (the interest-only or “IO” class), while the other class will receive all of the principal (the principal-only or “PO” class). During the period ended September 30, 2002, certain interest only securities were held as part of the overall mortgage portfolio holdings. The yield to maturity on IOs is sensitive to the rate of principal repayments (including prepayments) on the related underlying mortgage assets, and principal payments may have a material effect on yield to maturity. If the underlying mortgage assets experience greater than anticipated prepayments of principal, a Fund may not fully recoup its initial investment in IOs. Such securities will be considered liquid only if so determined in accordance with guidelines established by the Trustees. The Funds also may invest in stripped mortgage-backed securities that are privately issued. These securities will be considered illiquid for purposes of each Fund’s limit on illiquid securities.

The Funds may purchase or sell exchange-traded futures contracts, which are contracts that obligate the Fund to make or take delivery of a financial instrument or the cash value of a security index at a specified future date at a specified price. The Funds may use futures contracts to manage exposure to the stock and bond markets or changes in interest rates and currency values, or for gaining exposure to markets. Risks of entering into futures contracts include the possibility that there may be an illiquid market at the time the Adviser to the Fund may be attempting to sell some or all the Fund holdings or that a change in the value of the contract may not correlate with changes in the value of the underlying securities. Upon entering into a futures contract, the Fund is required to deposit either cash or securities (initial margin). Subsequent payments (variation margin) are made or received by the Fund, generally on a daily basis. The variation margin payments are equal to the daily changes in the contract value and are recorded as unrealized gains or losses. The Funds recognize a realized gain or loss when the contract is closed or expires. The statement of operations reflects net realized and net unrealized gains and losses on these contracts.

In addition to the securities listed above, the AlphaTrak 500 Fund may invest in the following equity derivative instruments with a notional or contractual value up to its total assets: S&P 500 Index futures contracts, Mini S&P 500 Index futures contracts, options on the S&P 500 Index and S&P futures, and swap agreements involving the S&P 500 Index. When the above listed S&P Index derivatives appear to be overvalued relative to the S&P 500 Index, the Fund may invest up to 100% in the common stocks that comprise the S&P 500 Index. The Fund may also invest up to 25% of its total assets in these stocks indirectly by purchasing interests in one or more mutual funds, asset pools, or trusts that invest in such stocks.

As compensation for advisory services, the Adviser charges the Total Return Bond Fund, the Low Duration Bond Fund, and the Intermediate Bond Fund a fee, computed daily and payable monthly, at an annual rate of 0.35%, 0.30%, and 0.35%, respectively, of each Fund’s average daily net assets. The Adviser charges the AlphaTrak 500 Fund a base fee of 0.35% of the Fund’s average daily net assets. The base fee may be adjusted upward or downward (by up to 0.35% of the Fund’s average daily net assets), depending on whether, and to what extent, the investment performance of the AlphaTrak 500 Fund, for the relevant performance period, exceeds or is exceeded by, the performance of the S&P 500 Index over the same period. Under this agreement, the base fee was decreased by 0.11% resulting in $110,353 of total management fees, for the period ended September 30, 2002. Certain officers and trustees of the Funds are also officers and directors of the Adviser. Such officers and trustees serve without direct compensation from the Funds. Investment advisory fees and other transactions with affiliates, for the period ended September 30, 2002, were as follows:

The Trust has a Share Marketing Plan (or “the Plan”) pursuant to Rule 12b-1 of the 1940 Act with respect to the AlphaTrak 500 Fund and Class M shares of the Total Return Bond Fund and the Low Duration Bond Fund. The Total Return Bond Fund and Low Duration Bond Fund began accruing for Rule 12b-1expenses on April 1, 2000. Under the Plan, the Trust reimburses the Distributor, as the Trust’s distribution coordinator, at an annual rate up to 0.25% of the Fund’s aggregate average daily net assets to reimburse expenses in connection with the promotion and distribution of shares of the respective Fund. The Adviser has undertaken to limit the Rule 12b-1 expenses to 0.21% for the Total Return Bond Fund and 0.19% for the Low Duration Bond Fund for the fiscal year ending March 31, 2003. The AlphaTrak 500 Fund is currently waiving all Rule 12b-1 fees.

	Total Return Bond Fund
	Class M				Class I
	Period Ended September 30, 2002 (Unaudited)		Year Ended March 31, 2002		Period Ended September 30, 2002 (Unaudited)		Year Ended March 31, 2002
Change in Fund shares:
Shares outstanding at beginning of period	69,601,095		41,246,377		111,318,380		58,541,689
Shares sold	20,554,872		48,636,805		28,324,069		72,171,143
Shares issued through reinvestment of dividends	2,256,981		4,197,977		3,762,118		6,478,840
Shares redeemed	(25,151,398	)	(24,480,064	)	(26,487,301	)	(25,873,292	)

Net (decrease)/increase in fund shares	(2,339,545	)	28,354,718		5,598,886		52,776,691

Shares outstanding at end of period	67,261,550		69,601,095		116,917,266		111,318,380


	Low Duration Bond Fund
	Class M				Class I
	Period Ended September 30, 2002 (Unaudited)		Year Ended March 31, 2002		Period Ended September 30, 2002 (Unaudited)		Year Ended March 31, 2002
Change in Fund shares:
Shares outstanding at beginning of period	43,014,807		16,578,511		33,176,971		25,623,206
Shares sold	14,491,069		38,433,015		11,593,234		41,802,266
Shares issued through reinvestment of dividends	1,039,905		1,617,190		563,807		1,659,584
Shares redeemed	(16,282,425	)	(13,613,909	)	(21,748,296	)	(35,908,085	)

Net (decrease)/increase in Fund shares	(751,451	)	26,436,296		(9,591,255	)	7,553,765

Shares outstanding at end of period	42,263,356		43,014,807		23,585,716		33,176,971


							Intermediate Bond Fund
			Alpha Trak 500 Fund				Class I
			Period Ended September 30, 2002 (Unaudited)		Year Ended March 31, 2002		Period Ended September 30, 2002 (Unaudited)
Change in Fund shares:
Shares outstanding at beginning of period			10,574,517		6,416,853		0
Shares sold			5,380,399		6,681,097		2,471,729
Shares issued through reinvestment of dividends			355,767		437,007		7,587
Shares redeemed			(1,918,015	)	(2,960,440	)	(9,965	)

Net increase in Fund shares			3,818,151		4,157,664		2,469,351

Shares outstanding at end of period			14,392,668		10,574,517		2.469,351

Adviser:

Metropolitan West Asset Management, LLC

11766 Wilshire Boulevard, Suite 1580

Los Angeles, CA 90025

Custodian:

The Bank of New York

100 Church Street, 10th Floor

New York, NY 10286

Transfer Agent:

PFPC Inc.

P.O. Box 61503

King of Prussia, PA 19406

Auditors:

Deloitte & Touche LLP

350 S. Grand Avenue, Suite 200

Los Angeles, CA 90071

Distributor:

PFPC Distributors, Inc.

3200 Horizon Drive

King of Prussia, PA 19406

Legal Counsel:

Paul, Hastings, Janofsky & Walker LLP

55 Second Street, 24th Floor

San Francisco, CA 94105-3441


FUTURES CONTRACTS: SHORT POSITIONS
Number of Contracts		Unrealized Depreciation

278	U.S. Treasury 2 Year Note, December 2002	$(424,781	)

	Net unrealized depreciation	$(424,781	)


FUTURES CONTRACTS: LONG POSITIONS

Number of Contracts			Unrealized (Depreciation)

368	S & P Index, December 2002	$	(8,308,197	)
4	S & P Mini, December 2002		(2,373	)

	Net unrealized depreciation	$	(8,310,570	)

	Principal Amount	Issues	Value


Short Term Investments (continued)
Money Market RIC—4.01%	$1,030,000	J.P. Morgan Institutional Prime Money Market	$ 1,030,000

U.S. Agency Discount Notes—3.89%	1,000,000	Fannie Mae, 1.68%⁴, 10/25/02	998,880

		Total Short Term Investments
		(Cost $4,267,331)	4,267,331

		Total Investments—102.66%
		(Cost $25,850,342)¹	26,376,795

		Cash and Other Assets, Less Liabilities—(2.66)%	(682,544	)

		Net Assets—100.00%	$25,694,251


Gross unrealized appreciation	$	613,244
Gross unrealized depreciation		(86,791	)

Net unrealized appreciation		$526,453


Gross unrealized appreciation	$	74,043,299
Gross unrealized depreciation		(254,796,052	)

Net unrealized depreciation	$	(180,752,753	)

Gross unrealized appreciation	$23,310,949
Gross unrealized depreciation		(70,236,968	)

Net unrealized depreciation	$	(46,926,019	)

	Purchases	Sales

Total Return Bond Fund	$816,875,708	$828,429,336

Low Duration Bond Fund	221,631,751	289,358,409

AlphaTrak 500 Fund	32,281,113	29,840,624

Intermediate Bond Fund	31,460,184	9,829,899

	Investment Advisory Fee Rate		Voluluntary Expense Limitation
	Class M	Class I	Class M	Class I

Total Return Bond Fund	0.35%	0.35%	0.65%	0.44%

Low Duration Bond Fund	0.30	0.30	0.58	0.39

AlphaTrak 500 Fund	0.00 - 0.70	N/A	0.20 - 0.90	N/A

Intermediate Bond Fund	N/A	0.35	N/A	0.44

Fund	Expiring in 2009		Expiring in 2010

Total Return Bond Fund	$	0	$	0
Low Duration Bond Fund		3,331,863		7,389,225
AlphaTrak 500 Fund		2,732,213		15,738,725