N-CSRS 1 bfa_ncsr.htm N-CSR Unassociated Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM N-CSR
Certified Shareholder Report of
Registered Management Investment Companies

Investment Company Act File Number: 811-02444



The Bond Fund of America, Inc.
(Exact Name of Registrant as specified in charter)

333 South Hope Street
Los Angeles, California 90071
(Address of principal executive offices)




Registrant's telephone number, including area code: (213) 486-9200

Date of fiscal year end: December 31

Date of reporting period: June 30, 2006





Kimberly S. Verdick
Capital Research and Management Company
333 South Hope Street
Los Angeles, California 90071
(name and address of agent for service)


Copies to:
Michael Glazer
Paul, Hastings, Janofsky & Walker LLP
515 South Flower Street
Los Angeles, California 90071
(Counsel for the Registrant)


 
 
 

ITEM 1 - Reports to Stockholders
 
[logo - American Funds®]

The right choice for the long term®

The Bond Fund of America
[photo of a businessman looking over paperwork - pen in hand]

Semi-annual report for the six months ended June 30, 2006

The Bond Fund of AmericaSMseeks as high a level of current income as is consistent with preservation of capital through a diversified portfolio of bonds and other fixed-income obligations.

This fund is one of the 29 American Funds. The organization ranks among the nation’s three largest mutual fund families. For nearly 75 years, Capital Research and Management Company,SM the American Funds adviser, has invested with a long-term focus based on thorough research and attention to risk.

Figures shown are past results for Class A shares and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity. For current information and month-end results, visit americanfunds.com. Fund results shown, unless otherwise indicated, are at net asset value. If a sales charge (maximum 3.75%) had been deducted, the results would have been lower.

Here are the average annual total returns on a $1,000 investment with all distributions reinvested for periods ended June 30, 2006:

Class A shares
  
1 year
  
5 years
  
10 years
  
                     
Reflecting 3.75% maximum sales charge
    
-2.69
%
  
+5.04
%
  
+5.84
%

The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased the waiver to 10% on April 1, 2005. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 24-27 for details.

The fund’s 30-day yield for Class A shares as of July 31, 2006, calculated in accordance with the Securities and Exchange Commission formula, was 5.21%, which reflects a fee waiver (5.19% without the fee waiver). The fund’s distribution rate for Class A shares as of that date was 4.66%. Both reflect the 3.75% maximum sales charge. The SEC yield reflects the rate at which the fund is earning income on its current portfolio of securities while the distribution rate reflects the fund’s past dividends paid to shareholders. Accordingly, the fund’s SEC yield and distribution rate may differ.

Results for other share classes can be found on page 4. Please see the inside back cover for important information about other share classes.

The return of principal in bond funds is not guaranteed. Bond funds have the same interest rate, inflation and credit risks that are associated with the underlying bonds owned by the fund. High-yield bonds are subject to greater fluctuations in value and risk of loss of income and principal. Investing in non-U.S. bonds is subject to additional risks. They include currency fluctuations, political and social instability, differing securities regulations and accounting standards, higher transaction costs, possible changes in taxation and illiquidity. For more complete information, please read the prospectus.

[photo of a businessman looking over paperwork - pen in hand]
 
 
Fellow shareholders:

A continued rise in interest rates and the resulting decline in bond prices diminished returns for the six months ended June 30, 2006. The Bond Fund of America nonetheless continued to pay monthly dividends totaling 30.6 cents a share. These dividends reflect an income return of 2.3% for the period. (If we had included the portion of the January dividend that was pre-paid in December 2005 amounting to two cents a share, the income return would have been 2.5%, equivalent to 5.0% annualized.)

For the same period, the fund recorded a total return of 0.5%. The fund’s total return is a combination of its income return and any appreciation or depreciation in the fund’s share price. For the period, the fund’s share price slipped 1.8%, or 24 cents a share.

The fund’s total return surpassed that of its benchmark, the unmanaged Lehman Brothers Aggregate Bond Index, which posted a decline of 0.7% for the same period. In comparison, the Lipper Corporate Debt A-Rated Funds Average returned -1.0%.

The table below shows the fund’s returns and those of its primary references over longer, more meaningful time periods, offering a more complete picture of its relative results.

Results at a glance
(for periods ended June 30, 2006, with all distributions reinvested)

   
Average annual total returns
  
 
    
1 year
    
5 years
    
10 years
    
Lifetime1
  
                           
The Bond Fund of America
    
+1.13
%
  
+5.84
%
  
+6.24
%
  
+9.10
%
Lehman Brothers Aggregate
                         
Bond Index2
    
-0.81
    
+4.97
    
+6.22
    
+8.63
  
Lipper Corporate Debt A-Rated
                         
Funds Average3
    
-1.29
    
+4.58
    
+5.65
    
+8.57
  

1 Since May 28, 1974.
2 The unmanaged Lehman Brothers Aggregate Bond Index began on January 1, 1976. From May 28, 1974, through December 31, 1975, the Lehman Brothers Government/Credit Bond Index was used.
3 Source: Lipper. Lipper averages do not include the effects of sales charges.

Bond market overview

During the reporting period, the Federal Reserve continued to raise its target federal funds rate in quarter-point increments, as it has done at each of its meetings for the past two years. By the end of the period, this key short-term rate stood at 5.25%, up from 1.00% in June 2004. The Fed’s rate increases have had a direct effect on short-term bond rates and, more recently, on long-term bond rates, as well.

Over the past six months, the Fed and investors renewed their focus on prospects for inflation. Although inflation measures remain moderate by historical standards, they have inched above the Fed’s comfort level and remain a source of concern for both the stock and bond markets. If inflation measures continue to creep higher in the months ahead, additional rate increases are possible, and bond prices could weaken further.

During the past six months, short-term bonds were generally more stable in price than were long-term bonds. Though all sectors of the bond market suffered some price erosion, a few held up better than others. The high-yield corporate market stood out for its positive total return. Among the higher rated bonds, mortgages and asset-backed securities were more resistant to price declines.

How the fund responded

Since the Federal Reserve began raising rates in 2004, the portfolio counselors of The Bond Fund of America have generally pursued a defensive investment strategy aimed at preserving shareholder principal in the event of weakening bond prices. Part of this strategy involves selecting issues that are less sensitive to rising rates, such as short-term bonds. The fund’s relatively shorter portfolio structure versus the Lehman index, for example, contributed to better relative results for the period.

The fund’s ability to invest in high-yield and structured debt also bolstered results. However, it was not merely the sector allocation that proved helpful; our focus on select issuers and certain bonds also made a difference. Our targeted investments in lower rated automobile and airline issues, for example, helped the fund buck the tide of softer prices.

The number of individual securities held in the portfolio totaled 1,876 at the end of the period. Overall, the fund has maintained a broad exposure to all the major sectors of the bond market as evidenced by the pie chart on page 5, atop the summary portfolio. Since the start of the fiscal year, the fund’s exposure (percentage of net assets) to each of these sectors has changed little, even though net assets have grown about 6%. Portfolio investments in each of these sectors are greatly determined by the fundamental research of the fund’s fixed-income analysts who help portfolio counselors select companies and securities with good prospects for attractive returns. Portfolio counselors also rely on the macroeconomic research of our economists and market analysts who provide insight on larger trends or forces that could impact the value of fund holdings.

Looking ahead

The first half of this fiscal period has proved difficult for stocks and bonds alike, with prospects for continued interest rate increases and higher inflation weighing on the markets. Nonetheless, we believe that the long-term outlook for the fund remains bright. Bonds have historically shown greater resilience than stocks when economic conditions are uncertain, which makes them a valued part of a well-diversified investment portfolio.

Over the past three decades, The Bond Fund of America has established a solid track record, reflected in the results table on page 1. Income has been and remains a significant part of the fund’s total return history. As such, the fund remains committed to seeking as high a level of current income as is consistent with preservation of capital. We believe that this objective has served shareholders well through a wide variety of market conditions.

As always, we appreciate your confidence and support. We look forward to reporting to you again at year-end.

Cordially,

/s/ Paul G. Haaga, Jr.
 
Paul G. Haaga, Jr. 
Vice Chairman of the Board 
 
/s/ Abner D. Goldstine
 
Abner D. Goldstine
President
August 9, 2006

For current information about the fund, visit americanfunds.com.
 

 
Other share class results
unaudited
Class B, Class C, Class F and Class 529

Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. For current information and month-end results, visit americanfunds.com.

Average annual total returns for periods ended June 30, 2006:
              
                     
 
    
1 year
    
5 years
    
Life of class
  
Class B shares— first sold 3/15/00
                    
Reflecting applicable contingent deferred sales charge
                   
(CDSC), maximum of 5%, payable only if shares are
                   
sold within six years of purchase
    
-4.42
%
  
+4.72
%
  
+5.32
%
Not reflecting CDSC
    
+0.38
%
  
+5.05
%
  
+5.32
%
                     
Class C shares— first sold 3/15/01
                    
Reflecting CDSC, maximum of 1%, payable only if
                   
shares are sold within one year of purchase
    
-0.63
%
  
+4.97
%
  
+4.77
%
Not reflecting CDSC
    
+0.33
%
  
+4.97
%
  
+4.77
%
                     
Class F shares*— first sold 3/15/01
                    
Not reflecting annual asset-based fee charged by
                   
sponsoring firm
    
+1.15
%
  
+5.79
%
  
+5.57
%
                     
Class 529-A shares†— first sold 2/15/02
                    
Reflecting 3.75% maximum sales charge
    
-2.72
%
  
—
    
+4.89
%
Not reflecting maximum sales charge
    
+1.10
%
  
—
    
+5.82
%
                     
Class 529-B shares†— first sold 2/15/02
                    
Reflecting applicable CDSC, maximum of 5%, payable
                   
only if shares are sold within six years of purchase
    
-4.55
%
  
—
    
+4.50
%
Not reflecting CDSC
    
+0.25
%
  
—
    
+4.90
%
                     
Class 529-C shares†— first sold 2/19/02
                    
Reflecting CDSC, maximum of 1%, payable only if
                   
shares are sold within one year of purchase
    
-0.69
%
  
—
    
+4.96
%
Not reflecting CDSC
    
+0.27
%
  
—
    
+4.96
%
                     
Class 529-E shares*†— first sold 3/7/02
    
+0.79
%
  
—
    
+5.55
%
                     
Class 529-F shares*†— first sold 9/26/02
                    
Not reflecting annual asset-based fee charged by
                   
sponsoring firm
    
+1.29
%
  
—
    
+6.61
%
 
The fund’s investment adviser waived 5% of its management fees from September 1, 2004, through March 31, 2005, and increased the waiver to 10% on April 1, 2005. Fund results shown reflect the waiver, without which they would have been lower. Please see the Financial Highlights table on pages 24-27 for details.

*These shares are sold without any initial or contingent deferred sales charge.
† Results shown do not reflect the $10 initial account setup fee and an annual $10 account maintenance fee.
 
 
Summary investment portfolio, June 30, 2006                                                unaudited

The following summary investment portfolio is designed to streamline the report and help investors better focus on a fund’s principal holdings. For details on how to obtain a complete schedule of portfolio holdings, please see the inside back cover.
 
 
Corporate bonds & notes
    
47.1
%
Mortgage-backed obligations
    
20.8
 
U.S. government & government agency bonds & notes
    
10.1
 
Non-U.S. government & government agency bonds & notes
    
6.5
 
Asset-backed obligations
    
5.5
 
Short-term securities & other assets less liabilities
    
4.6
 
Preferred securities
    
3.8
 
Municipals
    
0.8
 
Convertible securities
    
0.4
 
Common stocks & warrants
    
0.4
 
 
 
   
Principal
 
Market
  
Percent
  
   
amount
  
value
  
of net
  
Bonds & notes - 90.85%
  
(000)
  
(000)
  
assets
  
Corporate bonds & notes - 47.13%
              
               
Financials - 19.24%
              
General Motors Acceptance Corp.:
                    
7.25% 2011
  
$
72,350
  
$
70,212
        
7.431% 2014 (2)
   
75,000
    
72,789
        
4.50%-7.75% 2006-2014 (2)
    
136,505
    
132,689
        
Residential Capital Corp. 6.00%-6.898% 2009-2015 (1) (2)
    
121,280
    
119,409
    
1.62
%
International Lease Finance Corp. 3.125%-5.875% 2007-2013
    
154,920
    
150,349
        
ILFC E-Capital Trust I 5.90% 2065 (1) (2)
    
67,000
    
65,375
        
ILFC E-Capital Trust II 6.25% 2065 (1) (2)
    
9,325
    
8,826
        
American General Finance Corp. 5.40%-5.85% 2013-2015
    
47,500
    
46,306
        
AIG SunAmerica Global Financing VII 5.85% 2008 (1)
   
24,250
    
24,348
        
ASIF Global Financing XVIII 3.85% 2007 (1)
   
5,785
    
5,650
        
ASIF Global Financing XXVIII 5.17% 2007 (1) (2)
   
2,000
    
2,001
        
ASIF Global Financing XIX 4.90% 2013 (1)
   
2,000
    
1,898
        
American International Group, Inc. 6.25% 2036 (1)
   
8,750
    
8,414
    
1.28
  
Washington Mutual Preferred Funding I Ltd. 6.534% (undated) (1) (2)
    
140,400
    
134,982
        
Washington Mutual, Inc. 4.375%-7.50% 2006-2017 (2)
   
125,735
    
123,934
        
Providian Financial Corp., Series A, 9.525% 2027 (1)
   
16,750
    
17,790
    
1.13
  
Household Finance Corp. 4.125%-7.875% 2007-2011
    
109,000
    
109,459
        
HSBC Finance Corp. 4.625%-5.679% 2010-2015 (2)
    
78,230
    
75,578
        
Midland Bank 5.875% Eurodollar note (undated) (2)
   
15,000
    
12,825
        
HSBC Finance Capital Trust IX 5.911% 2035 (2)
    
10,000
    
9,560
        
HSBC Bank USA 4.625% 2014 (1)
   
4,000
    
3,673
    
.87
  
J.P. Morgan Chase & Co. 4.00%-6.75% 2007-2015
   
149,740
    
146,160
        
Chase Capital II, Global Floating Rate Capital Securities, Series B, 5.649% 2027 (2)
   
20,000
    
19,283
        
Bank One Corp. 4.90% 2015
    
9,000
    
8,309
        
BANK ONE, Texas, NA 6.25% 2008
    
7,250
    
7,304
    
.74
  
Sumitomo Mitsui Banking Corp. 5.625% (undated) (1) (2)
    
130,795
    
122,196
    
.50
  
Ford Motor Credit Co. 7.875% 2010
    
124,000
    
114,483
    
.47
  
HBOS PLC, Series B, 5.92% (undated) (1) (2)
    
108,100
    
99,761
    
.41
  
Resona Bank, Ltd. 5.85% (undated) (1) (2)
    
90,585
    
84,431
    
.35
  
SocGen Real Estate Co. LLC, Series A, 7.64% (undated) (1) (2)
    
74,250
    
75,846
    
.31
  
Mizuho Capital Investment (USD) 1 Ltd. and Mizuho Capital Investment (EUR) 1 Ltd. 6.686% noncumulative preferred (undated) (1) (2)
    
64,010
    
60,848
    
.25
  
Other securities
          
2,762,995
    
11.31
  
           
4,697,683
    
19.24
  
                     
Consumer discretionary - 6.41%
                    
General Motors Corp.:
                    
7.25% 2013
    
€700
    
742
        
6.375%-9.40% 2008-2033
  
$
34,765
    
30,027
        
General Motors Nova Scotia Finance Co. 6.85% 2008
    
7,800
    
7,429
    
.15
  
Other securities
          
1,528,094
    
6.26
  
           
1,566,292
    
6.41
  
                     
Telecommunication services - 5.57%
                    
Nextel Communications, Inc.:
                    
Series E, 6.875% 2013
    
105,480
    
106,215
        
Series D, 7.375% 2015
    
104,705
    
106,649
    
.87
  
AT&T Wireless Services, Inc. 8.125% 2012
    
87,630
    
96,544
    
.40
  
France Télécom 7.75% 2011 (2)
    
85,050
    
91,450
    
.37
  
Verizon Wireless Capital LLC and Cellco Partnership 5.375% 2006
    
70,330
    
70,260
    
.29
  
Other securities
          
888,117
    
3.64
  
           
1,359,235
    
5.57
  
                     
Industrials - 5.38%
                    
Other securities
         
1,314,873
    
5.38
  
                     
                     
Energy - 2.72%
                    
Other securities
         
664,489
    
2.72
  
                     
                     
Utilities - 2.58%
                    
Other securities
         
629,575
    
2.58
  
                     
                     
Other corporate bonds & notes- 5.23%
                    
Other securities
          
1,276,847
    
5.23
  
                     
                     
Mortgage-backed obligations (3) - 20.83%
                    
Fannie Mae:
                    
5.50% 2033
   
77,465
    
74,673
        
5.50% 2035
   
121,695
    
117,231
        
5.50% 2036
   
82,192
    
78,921
        
0%-12.009% 2009-2042 (2)
    
726,935
    
706,851
    
4.00
  
Freddie Mac:
                    
6.00% 2036
    
282,708
    
278,270
        
0%-11.00% 2007-2036 (2)
    
296,087
    
282,207
    
2.30
  
Countrywide Alternative Loan Trust:
                    
Series 2005-46CB, Class A-8, 5.50% 2035
   
96,725
    
95,492
        
0%-6.00% 2019-2036 (2)
    
377,342
    
369,683
    
1.90
  
CS First Boston Mortgage Securities Corp. 0%-8.062% 2019-2041 (1) (2)
    
340,170
    
334,747
    
1.37
  
Government National Mortgage Assn.:
                    
6.00% 2036
   
190,000
    
187,995
        
4.00%-10.00% 2007-2036 (2)
    
59,975
    
59,190
    
1.01
  
CHL Mortgage Pass-Through Trust, Series 2005-HYB8, Class 4-A-1, 5.71% 2035 (2)
   
78,946
    
77,603
    
.32
  
Other securities
          
2,424,002
    
9.93
  
           
5,086,865
    
20.83
  
                     
U.S. government & government agency bonds & notes - 10.09%
                    
U.S. Treasury:
                    
7.00% 2006
    
100,000
    
100,055
        
6.25% 2007
    
131,115
    
131,832
        
3.625% 2009
    
192,000
    
183,990
        
5.00% 2011
    
84,195
    
83,958
        
4.25% 2013
    
166,900
    
158,373
        
11.25% 2015
    
70,000
    
99,433
        
8.875% 2017 (4)
    
70,000
    
91,350
        
6.875% 2025
    
129,700
    
153,796
        
6.50% 2026 (4)
    
66,850
    
76,700
        
4.50% 2036 (4)
    
336,675
    
301,957
        
0%-12.00% 2007-2032 (4) (5)
    
511,935
    
495,294
    
7.69
  
Fannie Mae:
                    
5.25% 2007
    
103,500
    
103,078
        
2.625%-5.25% 2006-2012
    
120,450
    
118,486
    
.91
  
Freddie Mac:
                    
5.50% 2011
    
74,000
    
74,126
        
2.875%-6.25% 2006-2012
    
126,845
    
124,656
    
.81
  
Federal Home Loan Bank 2.875%-5.823% 2006-2016
    
121,190
    
120,767
    
.49
  
Other securities
          
45,611
    
.19
  
           
2,463,462
    
10.09
  
                     
Non-U.S. government & government agency bonds & notes - 6.55%
                    
Israeli Government 7.50% 2014
    
ILS464,132
    
110,391
    
.45
  
United Mexican States Government, Series MI10, 9.50% 2014
    
MXP1,112,000
    
101,156
    
.41
  
Canadian Government 4.25% 2026 (5)
   
C$52,330
    
81,449
    
.33
  
Japanese Government 0.50% 2007
    
¥9,186,900
    
80,330
    
.33
  
Polish Government 5.75% 2010
    
PLZ237,410
    
75,387
    
.31
  
Korean Government 4.50% 2008
    
KRW71,938,000
    
75,205
    
.31
  
German Government 4.50% 2009
    
€55,000
    
71,863
    
.29
  
Other securities
          
1,007,830
    
4.12
  
           
1,603,611
    
6.55
  
                     
Asset-backed obligations - 5.45%
                    
Other securities
         
1,330,768
    
5.45
  
                     
                     
Municipals - 0.80%
                    
State of California, Golden State Tobacco Securitization Corp., Tobacco Settlement Asset-backed Bonds, Series 2003-A-1, 6.25% 2033
  
$
64,975
    
70,285
    
.29
  
Other securities
          
123,894
    
.51
  
           
194,179
    
.80
  
                     
Total bonds & notes (cost: $22,472,953,000)
          
22,187,879
    
90.85
 
                     
                     
 
          
Market
    
Percent
  
 
          
value
    
of net
  
Convertible securities - 0.39%
          
(000
)
  
assets
  
                     
                     
Other - 0.34%
                    
Other securities
        
$
83,191
    
.34
  
                     
Miscellaneous - 0.05%
                    
Other convertible securities in initial period of acquisition
          
12,205
    
.05
  
                     
                     
Total convertible securities (cost: $83,436,000)
          
95,396
    
.39
  
                     
                     
 
          
Market
    
Percent
  
 
          
value
    
of net
  
Preferred securities - 3.82%
    
Shares
    
(000
)
  
assets
  
                     
Financials - 3.82%
                    
Fuji JGB Investment LLC, Series A, 9.87% noncumulative preferred (1) (2)
    
121,238,000
  
$
129,873
        
IBJ Preferred Capital Co. LLC, Series A, 8.79% noncumulative preferred (1) (2)
    
57,500,000
    
60,450
    
.78
  
HSBC Capital Funding LP:
                    
Series 1, 9.547% noncumulative step-up perpetual preferred (1) (2)
    
85,750,000
    
96,175
        
Series 2, 10.176% noncumulative step-up perpetual preferred (1) (2)
   
25,000,000
    
34,260
        
8.03% noncumulative preferred (2)
    
20,000,000
    
30,077
        
HSBC Holdings PLC 4.61% (1) (2)
    
6,330,000
    
5,703
    
.68
  
Fannie Mae, Series O, 7.065% preferred (1) (2)
    
900,000
    
48,544
    
.20
  
Other securities
          
527,838
    
2.16
  
           
932,920
    
3.82
  
                     
Other - 0.00%
                    
Other securities
          
703
    
.00
  
                     
Total preferred securities (cost: $884,423,000)
          
933,623
    
3.82
  
                     
                     
 
          
Market
    
Percent
  
 
          
value
    
of net
  
Common stocks - 0.38%
    
Shares
    
(000
)
  
assets
  
                     
Other - 0.38%
                    
Other securities
        
$
91,198
    
.38
  
                     
Miscellaneous - 0.00%
                    
Other common stock in initial period of acquisition
          
282
    
.00
  
                     
Total common stocks (cost: $55,863,000)
          
91,480
    
.38
  
                     
                     
                     
 
          
Market
    
Percent
  
 
          
value
    
of net
  
Warrants - 0.00%
    
Shares
    
(000
)
  
assets
  
                     
Telecommunication Services - 0.00%
                    
Other securities
          
22
    
.00
  
                     
Total warrants (cost: $143,000)
          
22
    
.00
  
                     
                     
   
Principal
    
Market
    
Percent
  
 
    
amount
    
value
    
of net
  
Short-term securities - 5.62%
    
(000
)
  
(000
)
  
assets
  
                     
CAFCO, LLC 5.02%-5.07% due 7/12-7/25/2006 (1)
 
$
166,800
  
$
166,331
    
.68
  
Bank of America Corp. 5.025%-5.165% due 7/10-8/18/2006 (4)
    
100,000
    
99,587
        
Ranger Funding Co. LLC 5.06%-5.30% due 7/17-8/21/2006 (1) (4)
    
65,500
    
65,080
    
.68
  
Federal Home Loan Bank 4.97%-5.07% due 7/26-8/30/2006 (4)
    
153,700
    
152,734
    
.62
  
Variable Funding Capital Corp. 5.01%-5.30% due 7/13-8/25/2006 (1) (4)
    
129,370
    
129,034
    
.53
  
Clipper Receivables Co., LLC 4.96%-5.15% due 7/14-7/20/2006 (1)
   
121,000
    
120,701
    
.49
  
International Lease Finance Corp. 5.00%-5.06% due 7/7-7/19/2006
    
100,000
    
99,817
    
.41
  
Park Avenue Receivables Co., LLC 5.04%-5.21% due 7/6-8/24/2006 (1) (4)
    
96,525
    
96,251
    
.39
  
Wal-Mart Stores Inc. 4.96%-5.24% due 7/11-8/22/2006 (1) (4)
    
93,810
    
93,339
    
.38
  
HSBC Finance Corp. 5.02% due 7/26/2006
    
43,300
    
43,151
    
.18
  
Freddie Mac 4.956% due 7/27/2006
    
1,470
    
1,464
    
.01
  
Other securities
          
305,110
    
1.25
  
                     
Total short-term securities (cost: $1,372,577,000)
          
1,372,599
    
5.62
 
                     
                     
Total investment securities (cost: $24,869,395,000)
          
24,680,999
    
101.06
  
Other assets less liabilities
          
(258,791
)
  
(1.06
)
                     
                     
Net assets
        
$
24,422,208
    
100.00
%
                     
"Other securities" includes all issues that are not disclosed separately in the summary investment portfolio.
        
                     
"Miscellaneous" securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
        
                     

 
Investments in affiliates
 
A company is considered to be an affiliate of the fund under the Investment Company Act of 1940 if the fund's holdings in that company represent 5% or more of the outstanding voting shares of that company. The market value of the fund's holdings in affiliated companies is included in "Other securities" under their respective industry sectors in the preceding summary investment portfolio. Further details on these holdings and related transactions during the six months ended June 30, 2006, appear below.
 

                       
Market value
  
   
  
              
Dividend
  
of affiliates
  
 
  
Beginning
  
 
    
 
  
income
  
at 6/30/06
  
Company
  
shares
  
  Purchases
  
Sales
 
Ending shares
  
(000)
  
(000)
  
                                       
ZiLOG, Inc. (6)
    
879,000
   
-
   
-
   
879,000
 
$
-
  
$
2,971
  
ZiLOG, Inc. - MOD III Inc., units (6) (7)
    
1,447
   
-
   
-
   
1,447
   
-
   
215
 
Clarent Hospital Corp. (6) (7)
    
331,291
   
-
   
-
   
331,291
   
-
   
83
 
 
                             -  
$
3,269
  
 
                     
The following footnotes apply to either the individual securities noted or one or more of the securities aggregated and listed as a single line item.
 
                    
                     
(1) Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities, including those in "Other securities" in the summary investment portfolio, was $5,486,438,000, which represented 22.46% of the net assets of the fund.
(2) Coupon rate may change periodically.
                    
(3) Pass-through securities backed by a pool of mortgages or other loans on which principal payments are periodically made. Therefore, the effective maturities are shorter than the stated maturities.
(4) This security, or a portion of this security, has been segregated to cover funding requirements on investment transactions settling in the future.
(5) Index-linked bond whose principal amount moves with a government retail price index.
                    
(6) Security did not produce income during the last 12 months.
                    
(7) Valued under fair value procedures adopted by authority of the board of directors.
                    
                     
See Notes to Financial Statements
                    
                     

 
Financial statements
 
Statement of assets and liabilities
          
unaudited
  
at June 30, 2006
  
  (dollars and shares in thousands, except per-share amounts)
  
               
Assets:
              
Investment securities at market:
              
Unaffiliated issuers (cost: $24,852,243)
        
$
24,677,730
        
Affiliated issuers (cost: $17,152)
          
3,269
 
$
24,680,999
  
Cash
                
48,360
 
Receivables for:
                    
Sales of investments
          
40,219
       
Sales of fund's shares
          
63,568
       
Open forward currency contracts
          
3,818
       
Dividends and interest
          
276,470
   
384,075
 
                 
25,113,434
 
Liabilities:
                    
Payables for:
                    
Purchases of investments
          
612,252
       
Repurchases of fund's shares
          
32,752
       
Dividends on fund's shares
          
20,972
       
Open forward currency contracts
         
7,665
       
Closed forward currency contracts
         
2,717
       
Investment advisory services
          
4,599
       
Services provided by affiliates
          
9,415
       
Deferred directors' compensation
          
416
       
Other fees and expenses
          
438
   
691,226
 
Net assets at June 30, 2006
              
$
24,422,208
  
                     
Net assets consist of:
                    
Capital paid in on shares of capital stock
              
$
25,133,193
  
Undistributed net investment income
                
46,263
 
Accumulated net realized loss
                
(565,666
)
Net unrealized depreciation
                
(191,582
)
Net assets at June 30, 2006
              
$
24,422,208
  
                     
Total authorized capital stock - 2,500,000 shares, $.001 par value (1,881,722 total shares outstanding)
        
 
    
Net assets
    
Shares outstanding
    
Net asset value per share*
  
                     
Class A
 
$
18,557,737
    
1,429,866
  
$
12.98
  
Class B
    
1,393,212
   
107,347
    
12.98
  
Class C
   
1,545,032
   
119,044
    
12.98
  
Class F
   
1,019,753
   
78,572
    
12.98
  
Class 529-A
    
320,437
   
24,690
    
12.98
  
Class 529-B
    
61,214
   
4,717
    
12.98
  
Class 529-C
    
140,275
   
10,808
    
12.98
  
Class 529-E
   
17,785
   
1,370
    
12.98
  
Class 529-F
    
10,307
   
794
    
12.98
  
Class R-1
   
21,473
   
1,655
    
12.98
  
Class R-2
   
419,550
   
32,326
    
12.98
  
Class R-3
   
446,425
   
34,397
    
12.98
  
Class R-4
   
229,870
   
17,711
    
12.98
  
Class R-5
   
239,138
   
18,425
    
12.98
  
* Maximum offering price and redemption price per share were equal to the net asset value per share for all share classes, except for Class A and 529-A, for which the maximum offering prices per share were $13.49 each.
 
                     
                     
See Notes to Financial Statements
                    
                     
Statement of operations
                
unaudited
  
for the six months ended June 30, 2006
            
 (dollars in thousands
)
Investment income:
                    
Income:
                    
Interest (net of non-U.S. taxes of $425)
        
$
653,853
        
Dividends
         
7,539
 
$
661,392
  
                     
Fees and expenses*:
                    
Investment advisory services
         
29,489
       
Distribution services
          
42,193
       
Transfer agent services
          
11,838
       
Administrative services
         
4,408
       
Reports to shareholders
          
556
       
Registration statement and prospectus
         
955
       
Postage, stationery and supplies
          
1,361
       
Directors' compensation
          
84
       
Auditing and legal
         
67
       
Custodian
         
586
       
State and local taxes
          
185
       
Other
         
98
       
Total fees and expenses before reimbursements/waivers
          
91,820
       
Less reimbursements/waivers of fees and expenses:
                    
Investment advisory services
         
2,949
       
Administrative services
         
525
       
Total fees and expenses after reimbursements/waivers
                
88,346
 
Net investment income
                
573,046
 
                     
Net realized loss and unrealized
                    
depreciation on investments
                    
and non-U.S. currency:
                    
Net realized loss on:
                    
Investments
          
(51,941
)
      
Non-U.S. currency transactions
          
(36,634
)
  
(88,575
)
Net unrealized depreciation on:
                    
Investments
          
(386,928
)
      
Non-U.S. currency translations
          
(5,488
)
  
(392,416
)
Net realized loss and
                    
unrealized depreciation
                    
on investments and non-U.S. currency
                
(480,991
)
Net increase in net assets resulting
                    
from operations
              
$
92,055
  
                     
* Additional information related to class-specific fees and expenses is included in the Notes to Financial Statements.
        
                     
See Notes to Financial Statements
                    
                     
                     
                     
                     
                     
Statements of changes in net assets
          
(dollars in thousands)
  
                     
 
          
Six months
    
Year ended
  
         
ended June 30,
    
December 31,
  
 
          
2006*
    
2005
  
Operations:
                    
Net investment income
        
$
573,046
  
$
965,151
  
Net realized (loss) gain on investments and
                   
non-U.S. currency transactions
          
(88,575
)
  
193,485
 
Net unrealized depreciation
                    
on investments and non-U.S. currency translations
          
(392,416
)
  
(753,973
)
Net increase in net assets
                    
resulting from operations
          
92,055
   
404,663
 
                     
Dividends paid or accrued to shareholders from net investment income
         
(540,133
)
  
(1,081,144
)
                     
Capital share transactions
          
1,894,663
   
3,822,696
 
                     
Total increase in net assets
          
1,446,585
   
3,146,215
 
                     
Net assets:
                    
Beginning of period
          
22,975,623
   
19,829,408
 
End of period (including undistributed
                    
net investment income: $46,263 and $13,350,
                    
respectively)
        
$
24,422,208
  
$
22,975,623
  
                     
*Unaudited.
                   
                     
See Notes to Financial Statements
                    
 

Notes to financial statements                                                                   unaudited


1.   
Organization and significant accounting policies
 
Organization - The Bond Fund of America, Inc. (the "fund") is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company. The fund seeks as high a level of current income as is consistent with preservation of capital through a diversified portfolio of bonds and other fixed-income obligations.

The fund offers 14 share classes consisting of four retail share classes, five CollegeAmerica® savings plan share classes and five retirement plan share classes. The CollegeAmerica savings plan share classes (529-A, 529-B, 529-C, 529-E and 529-F) can be utilized to save for college education. The five retirement plan share classes (R-1, R-2, R-3, R-4 and R-5) are sold without any sales charges and do not carry any conversion rights. The fund’s share classes are described below:
 
Share class
  
Initial sales charge
  
Contingent deferred sales charge upon redemption
  
Conversion feature
Class A and 529-A
  
Up to 3.75%
  
None (except 1% for certain redemptions within one year of purchase without an initial sales charge)
  
None
Class B and 529-B
  
None
  
Declines from 5% to 0% for redemptions within six years of purchase
  
Class B and 529-B convert to Class A and 529-A, respectively, after eight years
Class C
  
None
  
1% for redemptions within one year of purchase
  
Class C converts to Class F after 10 years
Class 529-C
  
None
  
1% for redemptions within one year of purchase
  
None
Class 529-E
  
None
  
None
  
None
Class F and 529-F
  
None
  
None
  
None
Class R-1, R-2, R-3, R-4 and R-5
  
None
  
None
  
None

Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses ("class-specific fees and expenses"), primarily due to different arrangements for distribution, administrative and shareholder services. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.

Significant accounting policies - The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the fund:

Security valuation - Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. The ability of the issuers of the debt securities held by the fund to meet their obligations may be affected by economic developments in a specific industry, state or region. Forward currency contracts are valued at the mean of representative quoted bid and asked prices. Securities and other assets for which representative market quotations are not readily available or are considered unreliable are fair valued as determined in good faith under procedures adopted by authority of the fund's board of directors. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions.

Security transactions and related investment income - Security transactions are recorded by the fund as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the fund will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.

Class allocations -Income, fees and expenses (other than class-specific fees and expenses) are allocated daily among the various share classes based on the relative value of their settled shares. Realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution, administrative and shareholder services, are charged directly to the respective share class.

Dividends and distributions to shareholders -Dividends paid to shareholders are declared daily from net investment income and are paid to shareholders monthly. Distributions paid to shareholders are recorded on the ex-dividend date.

Non-U.S. currency translation - Assets and liabilities, including investment securities, denominated in non-U.S. currencies are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. In the accompanying financial statements, the effects of changes in non-U.S. exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in non-U.S. currencies are disclosed separately.
 
Forward currency contracts - The fund may enter into forward currency contracts, which represent agreements to exchange non-U.S. currencies on specific future dates at predetermined rates. The fund enters into these contracts to manage its exposure to changes in non-U.S. exchange rates arising from investments denominated in non-U.S. currencies. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in non-U.S. exchange rates. Due to these risks, the fund could incur losses up to the entire contract amount, which may exceed the net unrealized value shown on the accompanying financial statements. On a daily basis, the fund values forward currency contracts based on the applicable exchange rates and records unrealized gains or losses. The fund records realized gains or losses at the time the forward contract is closed or offset by another contract with the same broker for the same settlement date and currency.

Mortgage dollar rolls - The fund may enter into mortgage dollar roll transactions in which the fund sells a mortgage-backed security to a counterparty and simultaneously enters into an agreement with the same counterparty to buy back a similar security on a specific future date at a predetermined price. Each mortgage dollar roll is treated as a financing transaction; therefore, any gain or loss is considered unrealized until the roll reaches completion. Risks may arise due to the delayed payment date and the potential inability of counterparties to complete the transaction. Income is generated as consideration for entering into these transactions and is included in interest income on the accompanying financial statements.
 
2.   
Non-U.S. investments

Investment risk - The risks of investing in securities of non-U.S. issuers may include, but are not limited to, investment and repatriation restrictions; revaluation of currencies; adverse political, social and economic developments; government involvement in the private sector; limited and less reliable investor information; lack of liquidity; certain local tax law considerations; and limited regulation of the securities markets.

Taxation - Dividend and interest income is recorded net of non-U.S. taxes paid. Realized and unrealized gains on securities in certain countries are subject to non-U.S. taxes. The fund records a liability based on realized and unrealized gains to provide for potential non-U.S. taxes payable on these securities. For the six months ended June 30, 2006, non-U.S. taxes paid on unrealized gains were $29,000. As of June 30, 2006, there was no additional liability required for non-U.S. taxes based on realized and unrealized gains. 

3. Federal income taxation and distributions  

The fund complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The fund is not subject to income taxes to the extent such distributions are made.

Distributions - Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in non-U.S. securities; deferred expenses; cost of investments sold; paydowns on fixed-income securities; net capital losses; non-U.S. taxes on capital gains; and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes.

The components of distributable earnings on a tax basis are reported as of the fund’s most recent year-end. As of December 31, 2005, the fund had tax basis undistributed ordinary income of $28,638,000 and capital loss carryforwards of $183,032,000 and $243,982,000 expiring in 2010 and 2011, respectively. 

As of June 30, 2006, the tax basis unrealized appreciation (depreciation) and cost of investments were as follows (dollars in thousands):

Gross unrealized appreciation on investment securities
$375,971
Gross unrealized depreciation on investment securities
(625,690)
Net unrealized depreciation on investment securities
(249,719)
Cost of investment securities
24,930,718


Ordinary income distributions paid or accrued to shareholders from net investment income were as follows (dollars in thousands):

   
Six months ended
  
Year ended
  
   
June 30,
 
December 31,
 
Share class
  
2006
  
2005
  
Class A
  
$
424,021
  
$
867,764
  
Class B
    
27,613
   
61,634
 
Class C
    
28,959
   
55,743
 
Class F
    
21,155
   
33,288
 
Class 529-A
    
6,931
   
11,711
 
Class 529-B
    
1,144
   
2,278
 
Class 529-C
    
2,519
   
4,413
 
Class 529-E
    
362
   
618
 
Class 529-F
    
211
   
295
 
Class R-1
    
384
   
629
 
Class R-2
    
7,578
   
13,142
 
Class R-3
    
8,790
   
14,060
 
Class R-4
    
4,975
   
7,048
 
Class R-5
    
5,491
   
8,521
 
Total
  
$
540,133
  
$
1,081,144
  

4. Fees and transactions with related parties

Capital Research and Management Company ("CRMC"), the fund’s investment adviser, is the parent company of American Funds Service Company SM ("AFS"), the fund’s transfer agent, and American Funds Distributors, Inc.SM ("AFD"), the principal underwriter of the fund’s shares.

Investment advisory services -The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on a declining series of annual rates beginning with 0.30% on the first $60 million of daily net assets and decreasing to 0.12% on such assets in excess of $20 billion. The agreement also provides for monthly fees, accrued daily, based on a declining series of rates beginning with 2.25% on the first $8,333,333 of the fund's monthly gross income and decreasing to 1.75% on such income in excess of $41,666,667. CRMC is currently waiving 10% of investment advisory services fees. During the six months ended June 30, 2006, total investment advisory services fees waived by CRMC were $2,949,000. As a result, the fee shown on the accompanying financial statements of $29,489,000, which was equivalent to an annualized rate of 0.251%, was reduced to $26,540,000, or 0.226% of average daily net assets.

Class-specific fees and expenses - Expenses that are specific to individual share classes are accrued directly to the respective share class. The principal class-specific fees and expenses are described below: 

Distribution services - The fund has adopted plans of distribution for all share classes, except Class R-5. Under the plans, the board of directors approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares and service existing accounts. The plans provide for payments, based on an annualized percentage of average daily net assets, ranging from 0.25% to 1.00% as noted below. In some cases, the board of directors has limited the amounts that may be paid to less than the maximum allowed by the plans. All share classes may use up to 0.25% of average daily net assets to pay service fees, or to compensate AFD for paying service fees, to firms that have entered into agreements with AFD to provide certain shareholder services. The remaining amounts available to be paid under each plan are paid to dealers to compensate them for their sales activities.

For Class A and 529-A, the board of directors has also approved the reimbursement of dealer and wholesaler commissions paid by AFD for certain shares sold without a sales charge. These classes reimburse AFD for amounts billed within the prior 15 months but only to the extent that the overall annual expense limit of 0.25% is not exceeded. As of June 30, 2006, unreimbursed expenses subject to reimbursement totaled $7,745,000 for Class A. There were no unreimbursed expenses subject to reimbursement for Class 529-A.

Share class
Currently approved limits
Plan limits
Class A
0.25%
0.25%
Class 529-A
0.25
0.50
Class B and 529-B
1.00
1.00
Class C, 529-C and R-1
1.00
1.00
Class R-2
0.75
1.00
Class 529-E and R-3
0.50
0.75
Class F, 529-F and R-4
0.25
0.50

Transfer agent services - The fund has a transfer agent agreement with AFS for Class A and B. Under this agreement, these share classes compensate AFS for transfer agent services including shareholder recordkeeping, communications and transaction processing. AFS is also compensated for certain transfer agent services provided to all other share classes from the administrative services fees paid to CRMC described on the following page.

Administrative services - The fund has an administrative services agreement with CRMC to provide transfer agent and other related shareholder services for all share classes other than Class A and B. Each relevant share class pays CRMC annual fees up to 0.15% (0.10% for Class R-5) based on its respective average daily net assets. Each relevant share class also pays AFS additional amounts for certain transfer agent services. CRMC and AFS may use these fees to compensate third parties for performing these services. CRMC has agreed to pay AFS on the fund's behalf for a portion of the transfer agent services fees for some of the retirement plan share classes. For the six months ended June 30, 2006, the total administrative services fees paid by CRMC were $4,000 and $521,000 for Class R-1 and R-2, respectively. Administrative services fees are presented gross of any payments made by CRMC. Each 529 share class is subject to an additional annual administrative services fee of 0.10% of its respective average daily net assets; this fee is payable to the Commonwealth of Virginia for the maintenance of the CollegeAmerica plan. Although these amounts are included with administrative services fees on the accompanying financial statements, the Commonwealth of Virginia is not considered a related party. 

Expenses under the agreements described above for the six months ended June 30, 2006, were as follows (dollars in thousands):
 
Share class
Distribution services
Transfer agent services
Administrative services
CRMC administrative services
Transfer agent services
Commonwealth of Virginia administrative services
Class A
$22,516
$11,030
Not applicable
Not applicable
Not applicable
Class B
7,015
808
Not applicable
Not applicable
Not applicable
Class C
7,441
 
 
 
Included
in
administrative services
$1,002
$229
Not applicable
Class F
1,115
362
109
Not applicable
Class 529-A
289
131
33
$148
Class 529-B
298
26
16
30
Class 529-C
652
57
28
65
Class 529-E
42
7
2
8
Class 529-F
-
4
1
4
Class R-1
97
13
9
Not applicable
Class R-2
1,448
284
1,033
Not applicable
Class R-3
1,016
295
236
Not applicable
Class R-4
264
154
9
Not applicable
Class R-5
Not applicable
109
4
Not applicable 
Total
$42,193
$11,838
$2,444
$1,709
$255

Deferred directors’ compensation - Since the adoption of the deferred compensation plan in 1993, directors who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the fund, are treated as if invested in shares of the fund or other American Funds. These amounts represent general, unsecured liabilities of the fund and vary according to the total returns of the selected funds. Directors’compensation of $84,000, shown on the accompanying financial statements, includes $57,000 in current fees (either paid in cash or deferred) and a net increase of $27,000 in the value of the deferred amounts.

Affiliated officers and directors - Officers and certain directors of the fund are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or directors received any compensation directly from the fund.

5. Capital share transactions

Capital share transactions in the fund were as follows (dollars and shares in thousands):
 
 
  
Sales*  
 
Reinvestments of dividends  
 
Repurchases*  
 
Net increase   
  
 Share class
  
Amount
  
Shares
  
Amount
  
Shares
  
Amount
  
Shares
  
Amount
  
Shares
  
Six months ended June 30, 2006
                                  
Class A
  
$
2,609,754
    
198,828
 
$
357,414
    
27,297
 
$
(1,804,640
)
  
(137,529
)
$
1,162,528
    
88,596
 
Class B
    
106,370
   
8,108
   
22,266
   
1,700
   
(124,309
)
  
(9,474
)
  
4,327
   
334
 
Class C
    
294,242
   
22,417
   
23,504
   
1,795
   
(173,473
)
  
(13,222
)
  
144,273
   
10,990
 
Class F
    
337,686
   
25,749
   
16,060
   
1,227
   
(119,347
)
  
(9,095
)
  
234,399
   
17,881
 
Class 529-A
    
59,921
   
4,563
   
6,633
   
507
   
(13,806
)
  
(1,051
)
  
52,748
   
4,019
 
Class 529-B
    
5,735
   
437
   
1,098
   
84
   
(2,367
)
  
(180
)
  
4,466
   
341
 
Class 529-C
    
26,475
   
2,016
   
2,412
   
184
   
(6,903
)
  
(525
)
  
21,984
   
1,675
 
Class 529-E
    
3,259
   
248
   
346
   
27
   
(851
)
  
(65
)
  
2,754
   
210
 
Class 529-F
    
3,284
   
250
   
201
   
15
   
(318
)
  
(24
)
  
3,167
   
241
 
Class R-1
    
7,123
   
542
   
363
   
28
   
(3,260
)
  
(248
)
  
4,226
   
322
 
Class R-2
    
120,152
   
9,152
   
7,230
   
552
   
(52,063
)
  
(3,968
)
  
75,319
   
5,736
 
Class R-3
    
139,306
   
10,609
   
8,382
   
640
   
(54,911
)
  
(4,183
)
  
92,777
   
7,066
 
Class R-4
    
80,186
   
6,097
   
4,765
   
364
   
(32,462
)
  
(2,474
)
  
52,489
   
3,987
 
Class R-5
    
63,908
   
4,864
   
4,304
   
329
   
(29,006
)
  
(2,204
)
  
39,206
   
2,989
 
Total net increase
                                                 
(decrease)
  
$
3,857,401
    
293,880
 
$
454,978
    
34,749
 
$
(2,417,716
)
  
(184,242
)
$
1,894,663
    
144,387
 
                                                   
Year ended December 31, 2005
                                                  
Class A
  
$
4,739,784
    
353,095
 
$
753,982
    
56,328
 
$
(3,046,419
)
  
(227,453
)
$
2,447,347
    
181,970
 
Class B
    
210,741
   
15,691
   
51,049
   
3,814
   
(196,388
)
  
(14,642
)
  
65,402
   
4,863
 
Class C
    
539,360
   
40,179
   
46,353
   
3,465
   
(239,621
)
  
(17,876
)
  
346,092
   
25,768
 
Class F
    
439,809
   
32,789
   
26,293
   
1,966
   
(129,966
)
  
(9,713
)
  
336,136
   
25,042
 
Class 529-A
    
99,048
   
7,386
   
11,692
   
874
   
(17,655
)
  
(1,317
)
  
93,085
   
6,943
 
Class 529-B
    
11,021
   
821
   
2,274
   
170
   
(3,178
)
  
(237
)
  
10,117
   
754
 
Class 529-C
    
43,687
   
3,257
   
4,404
   
330
   
(10,279
)
  
(767
)
  
37,812
   
2,820
 
Class 529-E
    
5,516
   
411
   
616
   
46
   
(1,102
)
  
(82
)
  
5,030
   
375
 
Class 529-F
    
3,351
   
250
   
295
   
22
   
(383
)
  
(28
)
  
3,263
   
244
 
Class R-1
    
10,761
   
802
   
627
   
46
   
(3,762
)
  
(281
)
  
7,626
   
567
 
Class R-2
    
185,712
   
13,833
   
13,048
   
976
   
(75,678
)
  
(5,646
)
  
123,082
   
9,163
 
Class R-3
    
211,778
   
15,775
   
14,002
   
1,047
   
(68,049
)
  
(5,080
)
  
157,731
   
11,742
 
Class R-4
    
130,864
   
9,741
   
7,037
   
526
   
(29,203
)
  
(2,180
)
  
108,698
   
8,087
 
Class R-5
    
121,222
   
9,076
   
5,937
   
444
   
(45,884
)
  
(3,422
)
  
81,275
   
6,098
 
Total net increase
                                                 
(decrease)
  
$
6,752,654
    
503,106
 
$
937,609
    
70,054
 
$
(3,867,567
)
  
(288,724
)
$
3,822,696
    
284,436
 
                                                   
                                                   
* Includes exchanges between share classes of the fund.
                                            


6. Forward currency contracts

As of June 30, 2006, the fund had outstanding forward currency contracts to purchase or sell non-U.S. currencies as follows (amounts in thousands):

 

   
Contract amount
  
U.S. valuations at June 30, 2006
  
               
Unrealized
  
               
appreciation
  
Non-U.S. currency contracts
  
Non-U.S.
  
U.S.
  
Amount
  
(depreciation)
  
                   
Purchases:
                  
Euros
                          
expiring 7/13/2006
    
€21,725
 
$
26,257
  
$
27,786
  
$
1,529
  
                           
                           
Sales:
                          
Euros
                          
expiring 7/07 to 9/14/2006
    
€69,590
   
85,289
   
89,005
   
(3,716
)
                           
Swedish krona
                          
expiring 7/24/2006
    
SKr403,644
   
53,992
   
56,158
   
(2,166
)
                           
British pounds
                          
expiring 7/13 to 9/26/2006
    
£75,885
   
140,747
   
140,318
   
429
 
                           
Danish krone
                          
expiring 9/11/2006
    
DKr249,912
   
43,098
   
43,021
   
77
 
           
323,126
   
328,502
   
(5,376
)
                           
                           
Forward currency contracts - net
                    
$
(3,847
)


7. Investment transactions

The fund made purchases and sales of investment securities, excluding short-term securities, of $7,487,958,000 and $5,579,722,000, respectively, during the six months ended June 30, 2006.
 

Financial highlights (1)
                                                          
                                                               
       
Income from investment operations(2)
                                              
                                                               
   
Net asset value, beginning of period
 
Net investment income
 
Net (losses) gains on securities (both realized and unrealized)
 
Total from investment operations
 
Dividends (from net investment income)
 
Net asset value, end of period
 
Total return (3)
 
Net assets, end of period (in millions)
 
 
 
Ratio of expenses to average net assets before reimbursements/
waivers
 
 
 
Ratio of expenses to average net assets after reimbursements/
waivers (4)
 
 
 
Ratio of net income to average net assets
      
Class A:
                                                              
Six months ended 6/30/2006 (5)
  
$
13.22
  
$
.33
  
$
(.26
)
$
.07
  
$
(.31
)
$
12.98
    
.50
%
$
18,558
          
.66
%
  
(6
)
  
.63
%
  
(6
)
  
4.99
%
  
(6
)
Year ended 12/31/2005
    
13.65
    
.62
   
(.36
)
  
.26
   
(.69
)
  
13.22
   
1.94
   
17,738
          
.65
         
.62
         
4.60
       
Year ended 12/31/2004
    
13.51
    
.61
   
.16
   
.77
   
(.63
)
  
13.65
   
5.85
   
15,822
          
.65
         
.65
         
4.54
       
Year ended 12/31/2003
    
12.70
    
.68
   
.84
   
1.52
   
(.71
)
  
13.51
   
12.22
   
13,991
          
.67
         
.67
         
5.15
       
Year ended 12/31/2002
    
12.79
    
.82
   
(.08
)
  
.74
   
(.83
)
  
12.70
   
6.11
   
12,600
          
.71
         
.71
         
6.59
       
Year ended 12/31/2001
    
12.79
    
.93
   
(.03
)
  
.90
   
(.90
)
  
12.79
   
7.15
   
11,223
          
.71
         
.71
         
7.17
       
Class B:
                                                                                            
Six months ended 6/30/2006 (5)
    
13.22
    
.28
   
(.26
)
  
.02
   
(.26
)
  
12.98
   
.14
   
1,393
          
1.41
   
(6
)
  
1.38
   
(6
)
  
4.24
   
(6
)
Year ended 12/31/2005
    
13.65
    
.52
   
(.36
)
  
.16
   
(.59
)
  
13.22
   
1.19
   
1,415
          
1.38
         
1.36
         
3.87
       
Year ended 12/31/2004
    
13.51
    
.51
   
.16
   
.67
   
(.53
)
  
13.65
   
5.07
   
1,394
          
1.39
         
1.38
         
3.80
       
Year ended 12/31/2003
    
12.70
    
.58
   
.84
   
1.42
   
(.61
)
  
13.51
   
11.38
   
1,274
          
1.41
         
1.41
         
4.37
       
Year ended 12/31/2002
    
12.79
    
.72
   
(.08
)
  
.64
   
(.73
)
  
12.70
   
5.28
   
939
          
1.47
         
1.47
         
5.77
       
Year ended 12/31/2001
    
12.79
    
.83
   
(.03
)
  
.80
   
(.80
)
  
12.79
   
6.37
   
471
          
1.45
         
1.45
         
6.30
       
Class C:
                                                                                            
Six months ended 6/30/2006 (5)
    
13.22
    
.28
   
(.26
)
  
.02
   
(.26
)
  
12.98
   
.11
   
1,545
          
1.46
   
(6
)
  
1.43
   
(6
)
  
4.19
   
(6
)
Year ended 12/31/2005
    
13.65
    
.51
   
(.36
)
  
.15
   
(.58
)
  
13.22
   
1.12
   
1,429
          
1.44
         
1.42
         
3.81
       
Year ended 12/31/2004
    
13.51
    
.50
   
.16
   
.66
   
(.52
)
  
13.65
   
4.99
   
1,123
          
1.46
         
1.45
         
3.71
       
Year ended 12/31/2003
    
12.70
    
.57
   
.84
   
1.41
   
(.60
)
  
13.51
   
11.29
   
848
          
1.49
         
1.49
         
4.26
       
Year ended 12/31/2002
    
12.79
    
.71
   
(.08
)
  
.63
   
(.72
)
  
12.70
   
5.20
   
554
          
1.55
         
1.55
         
5.66
       
Period from 3/15/2001 to 12/31/2001
    
13.05
    
.63
   
(.27
)
  
.36
   
(.62
)
  
12.79
   
2.83
   
188
          
1.57
   
(6
)
  
1.57
   
(6
)
  
6.25
   
(6
)
Class F:
                                                                                            
Six months ended 6/30/2006 (5)
    
13.22
    
.33
   
(.26
)
  
.07
   
(.31
)
  
12.98
   
.52
   
1,020
          
.63
   
(6
)
  
.61
   
(6
)
  
5.01
   
(6
)
Year ended 12/31/2005
    
13.65
    
.62
   
(.36
)
  
.26
   
(.69
)
  
13.22
   
1.92
   
803
          
.65
         
.63
         
4.60
       
Year ended 12/31/2004
    
13.51
    
.60
   
.16
   
.76
   
(.62
)
  
13.65
   
5.80
   
487
          
.70
         
.69
         
4.46
       
Year ended 12/31/2003
    
12.70
    
.67
   
.84
   
1.51
   
(.70
)
  
13.51
   
12.15
   
292
          
.72
         
.72
         
5.02
       
Year ended 12/31/2002
    
12.79
    
.81
   
(.08
)
  
.73
   
(.82
)
  
12.70
   
6.04
   
180
          
.77
         
.77
         
6.44
       
Period from 3/15/2001 to 12/31/2001
    
13.05
    
.70
   
(.27
)
  
.43
   
(.69
)
  
12.79
   
3.35
   
76
          
.79
   
(6
)
  
.79
   
(6
)
  
7.03
   
(6
)
Class 529-A:
                                                                                            
Six months ended 6/30/2006 (5)
    
13.22
    
.32
   
(.26
)
  
.06
   
(.30
)
  
12.98
   
.49
   
320
          
.69
   
(6
)
  
.67
   
(6
)
  
4.97
   
(6
)
Year ended 12/31/2005
    
13.65
    
.61
   
(.36
)
  
.25
   
(.68
)
  
13.22
   
1.88
   
273
          
.69
         
.67
         
4.57
       
Year ended 12/31/2004
    
13.51
    
.60
   
.16
   
.76
   
(.62
)
  
13.65
   
5.80
   
187
          
.70
         
.70
         
4.48
       
Year ended 12/31/2003
    
12.70
    
.67
   
.84
   
1.51
   
(.70
)
  
13.51
   
12.21
   
110
          
.68
         
.68
         
5.05
       
Period from 2/15/2002 to 12/31/2002
    
12.76
    
.69
   
(.04
)
  
.65
   
(.71
)
  
12.70
   
5.33
   
50
          
.75
   
(6
)
  
.75
   
(6
)
  
6.46
   
(6
)
Class 529-B:
                                                                                            
Six months ended 6/30/2006 (5)
    
13.22
    
.27
   
(.26
)
  
.01
   
(.25
)
  
12.98
   
.08
   
61
          
1.54
   
(6
)
  
1.51
   
(6
)
  
4.12
   
(6
)
Year ended 12/31/2005
    
13.65
    
.50
   
(.36
)
  
.14
   
(.57
)
  
13.22
   
1.02
   
58
          
1.54
         
1.52
         
3.71
       
Year ended 12/31/2004
    
13.51
    
.48
   
.16
   
.64
   
(.50
)
  
13.65
   
4.86
   
49
          
1.59
         
1.58
         
3.60
       
Year ended 12/31/2003
    
12.70
    
.55
   
.84
   
1.39
   
(.58
)
  
13.51
   
11.18
   
35
          
1.61
         
1.61
         
4.13
       
Period from 2/15/2002 to 12/31/2002
    
12.76
    
.60
   
(.04
)
  
.56
   
(.62
)
  
12.70
   
4.55
   
17
          
1.64
   
(6
)
  
1.64
   
(6
)
  
5.57
   
(6
)
Class 529-C:
                                                                                            
Six months ended 6/30/2006 (5)
    
13.22
    
.27
   
(.26
)
  
.01
   
(.25
)
  
12.98
   
.09
   
140
          
1.52
   
(6
)
  
1.50
   
(6
)
  
4.14
   
(6
)
Year ended 12/31/2005
    
13.65
    
.50
   
(.36
)
  
.14
   
(.57
)
  
13.22
   
1.03
   
121
          
1.53
         
1.51
         
3.74
       
Year ended 12/31/2004
    
13.51
    
.48
   
.16
   
.64
   
(.50
)
  
13.65
   
4.88
   
86
          
1.57
         
1.57
         
3.61
       
Year ended 12/31/2003
    
12.70
    
.55
   
.84
   
1.39
   
(.58
)
  
13.51
   
11.19
   
56
          
1.59
         
1.59
         
4.15
       
Period from 2/19/2002 to 12/31/2002
    
12.73
    
.60
   
(.02
)
  
.58
   
(.61
)
  
12.70
   
4.75
   
28
          
1.63
   
(6
)
  
1.63
   
(6
)
  
5.58
   
(6
)
Class 529-E:
                                                                                            
Six months ended 6/30/2006 (5)
    
13.22
    
.30
   
(.26
)
  
.04
   
(.28
)
  
12.98
   
.34
   
18
          
1.00
   
(6
)
  
.97
   
(6
)
  
4.66
   
(6
)
Year ended 12/31/2005
    
13.65
    
.57
   
(.36
)
  
.21
   
(.64
)
  
13.22
   
1.56
   
15
          
1.01
         
.99
         
4.25
       
Year ended 12/31/2004
    
13.51
    
.55
   
.16
   
.71
   
(.57
)
  
13.65
   
5.43
   
11
          
1.05
         
1.05
         
4.13
       
Year ended 12/31/2003
    
12.70
    
.62
   
.84
   
1.46
   
(.65
)
  
13.51
   
11.77
   
7
          
1.06
         
1.06
         
4.68
       
Period from 3/7/2002 to 12/31/2002
    
12.70
    
.61
   
.02
   
.63
   
(.63
)
  
12.70
   
5.14
   
3
          
1.13
   
(6
)
  
1.13
   
(6
)
  
6.06
   
(6
)
Class 529-F:
                                                                                            
Six months ended 6/30/2006 (5)
    
13.22
    
.34
   
(.26
)
  
.08
   
(.32
)
  
12.98
   
.59
   
10
          
.50
   
(6
)
  
.47
   
(6
)
  
5.17
   
(6
)
Year ended 12/31/2005
    
13.65
    
.62
   
(.36
)
  
.26
   
(.69
)
  
13.22
   
1.98
   
7
          
.58
         
.56
         
4.69
       
Year ended 12/31/2004
    
13.51
    
.59
   
.16
   
.75
   
(.61
)
  
13.65
   
5.69
   
4
          
.80
         
.80
         
4.36
       
Year ended 12/31/2003
    
12.70
    
.64
   
.84
   
1.48
   
(.67
)
  
13.51
   
11.96
   
2
          
.82
         
.82
         
4.72
       
Period from 9/26/2002 to 12/31/2002
    
12.31
    
.19
   
.40
   
.59
   
(.20
)
  
12.70
   
4.81
   
-
    
(7
)
  
.30
         
.30
         
1.51
       
Class R-1:
                                                                                            
Six months ended 6/30/2006
  
$
13.22
  
$
.28
  
$
(.26
)
$
.02
  
$
(.26
)
$
12.98
    
.12
%
$
22
          
1.50
%
  
(6
)
  
1.44
%
  
(6
)
  
4.20
%
  
(6
)
Year ended 12/31/2005
    
13.65
    
.51
   
(.36
)
  
.15
   
(.58
)
  
13.22
   
1.11
   
18
          
1.51
         
1.43
         
3.82
       
Year ended 12/31/2004
    
13.51
    
.50
   
.16
   
.66
   
(.52
)
  
13.65
   
4.98
   
11
          
1.55
         
1.47
         
3.70
       
Year ended 12/31/2003
    
12.70
    
.57
   
.84
   
1.41
   
(.60
)
  
13.51
   
11.29
   
5
          
1.65
         
1.49
         
4.13
       
Period from 6/11/2002 to 12/31/2002
    
12.65
    
.38
   
.06
   
.44
   
(.39
)
  
12.70
   
3.59
   
1
          
2.53
   
(6
)
  
1.52
   
(6
)
  
5.55
   
(6
)
Class R-2:
                                                                                            
Six months ended 6/30/2006
    
13.22
    
.28
   
(.26
)
  
.02
   
(.26
)
  
12.98
   
.12
   
420
          
1.72
   
(6
)
  
1.42
   
(6
)
  
4.21
   
(6
)
Year ended 12/31/2005
    
13.65
    
.51
   
(.36
)
  
.15
   
(.58
)
  
13.22
   
1.14
   
352
          
1.74
         
1.41
         
3.84
       
Year ended 12/31/2004
    
13.51
    
.50
   
.16
   
.66
   
(.52
)
  
13.65
   
5.02
   
238
          
1.85
         
1.43
         
3.73
       
Year ended 12/31/2003
    
12.70
    
.57
   
.84
   
1.41
   
(.60
)
  
13.51
   
11.33
   
111
          
1.94
         
1.46
         
4.20
       
Period from 5/31/2002 to 12/31/2002
    
12.72
    
.40
   
(.01
)
  
.39
   
(.41
)
  
12.70
   
3.23
   
21
          
1.67
   
(6
)
  
1.48
   
(6
)
  
5.56
   
(6
)
Class R-3:
                                                                                            
Six months ended 6/30/2006
    
13.22
    
.30
   
(.26
)
  
.04
   
(.28
)
  
12.98
   
.32
   
446
          
1.04
   
(6
)
  
1.02
   
(6
)
  
4.62
   
(6
)
Year ended 12/31/2005
    
13.65
    
.56
   
(.36
)
  
.20
   
(.63
)
  
13.22
   
1.53
   
361
          
1.05
         
1.02
         
4.23
       
Year ended 12/31/2004
    
13.51
    
.55
   
.16
   
.71
   
(.57
)
  
13.65
   
5.42
   
213
          
1.06
         
1.05
         
4.12
       
Year ended 12/31/2003
    
12.70
    
.62
   
.84
   
1.46
   
(.65
)
  
13.51
   
11.76
   
95
          
1.12
         
1.07
         
4.59
       
Period from 6/4/2002 to 12/31/2002
    
12.73
    
.42
   
(.02
)
  
.40
   
(.43
)
  
12.70
   
3.31
   
18
          
1.20
   
(6
)
  
1.10
   
(6
)
  
5.95
   
(6
)
Class R-4:
                                                                                            
Six months ended 6/30/2006
    
13.22
    
.33
   
(.26
)
  
.07
   
(.31
)
  
12.98
   
.50
   
230
          
.68
   
(6
)
  
.66
   
(6
)
  
4.98
   
(6
)
Year ended 12/31/2005
    
13.65
    
.61
   
(.36
)
  
.25
   
(.68
)
  
13.22
   
1.91
   
182
          
.67
         
.65
         
4.61
       
Year ended 12/31/2004
    
13.51
    
.60
   
.16
   
.76
   
(.62
)
  
13.65
   
5.81
   
77
          
.68
         
.68
         
4.48
       
Year ended 12/31/2003
    
12.70
    
.67
   
.84
   
1.51
   
(.70
)
  
13.51
   
12.15
   
18
          
.72
         
.72
         
5.05
       
Period from 5/20/2002 to 12/31/2002
    
12.67
    
.47
   
.04
   
.51
   
(.48
)
  
12.70
   
4.21
   
11
          
.77
   
(6
)
  
.74
   
(6
)
  
6.20
   
(6
)
Class R-5:
                                                                                            
Six months ended 6/30/2006
    
13.22
    
.34
   
(.26
)
  
.08
   
(.32
)
  
12.98
   
.64
   
239
          
.38
   
(6
)
  
.35
   
(6
)
  
5.28
   
(6
)
Year ended 12/31/2005
    
13.65
    
.66
   
(.36
)
  
.30
   
(.73
)
  
13.22
   
2.21
   
204
          
.37
         
.35
         
4.91
       
Year ended 12/31/2004
    
13.51
    
.65
   
.16
   
.81
   
(.67
)
  
13.65
   
6.14
   
127
          
.37
         
.37
         
4.81
       
Year ended 12/31/2003
    
12.70
    
.71
   
.84
   
1.55
   
(.74
)
  
13.51
   
12.52
   
106
          
.40
         
.40
         
5.39
       
Period from 5/15/2002 to 12/31/2002
    
12.66
    
.52
   
.05
   
.57
   
(.53
)
  
12.70
   
4.66
   
78
          
.42
   
(6
)
  
.42
   
(6
)
  
6.75
   
(6
)




   
Six months ended
  
Year ended December 31
  
   
June 30, 2006(5)
  
2005
 
2004
 
2003
 
2002
 
2001
 
                           
Portfolio turnover rate for all classes of shares
    
26
%
  
50
%
  
45
%
  
60
%
  
50
%
  
64
%
                                       


(1) Based on operations for the periods shown (unless otherwise noted) and, accordingly, may not be representative of a full year.
(2) Based on average shares outstanding.
(3) Total returns exclude all sales charges, including contingent deferred sales charges.
(4) The ratios in this column reflect the impact, if any, of certain reimbursements/waivers from CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services for all share classes. In addition, during the start-up period for the retirement plan share classes (except Class R-5), CRMC agreed to pay a portion of the fees related to transfer agent services.
(5) Unaudited.
(6) Annualized.
(7) Amount less than $1 million.
 
 
See Notes to Financial Statements
 

 
Expense example                                               unaudited
 
 
As a shareholder of the fund, you incur two types of costs: (1) transaction costs such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006, through June 30, 2006).
 
 
Actual expenses:
 
The first line of each share class in the table on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses paid during period" to estimate the expenses you paid on your account during this period. There are some account fees that are charged to certain types of accounts, such as Individual Retirement Accounts and CollegeAmerica accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually) that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F and Class 529-F shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.
 
 
Hypothetical example for comparison purposes:
 
The second line of each share class in the table on the next page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds. There are some account fees that are charged to certain types of accounts, such as Individual Retirement Accounts and CollegeAmerica accounts (generally, a $10 fee is charged to set up the account and an additional $10 fee is charged to the account annually) that would increase the amount of expenses paid on your account. In addition, retirement plan participants may be subject to certain fees charged by the plan sponsor, and Class F and Class 529-F shareholders may be subject to fees charged by financial intermediaries, typically ranging from 0.75% to 1.50% of assets annually depending on services offered. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated on the previous page. In addition, your ending account value would also be lower by the amount of these fees.
 
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second line of each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
 
   
Beginning account value 1/1/2006
  
Ending account value 6/30/2006
  
Expenses paid during period*
  
Annualized expense ratio
  
                   
Class A -- actual return
  
$
1,000.00
  
$
1,005.05
  
$
3.13
    
.63
%
Class A -- assumed 5% return
   
1,000.00
    
1,021.67
    
3.16
    
.63
  
Class B -- actual return
    
1,000.00
    
1,001.37
    
6.85
    
1.38
  
Class B -- assumed 5% return
    
1,000.00
    
1,017.95
    
6.90
    
1.38
  
Class C -- actual return
    
1,000.00
    
1,001.13
    
7.10
    
1.43
  
Class C -- assumed 5% return
   
1,000.00
    
1,017.70
    
7.15
    
1.43
  
Class F -- actual return
    
1,000.00
    
1,005.23
    
3.03
    
.61
  
Class F -- assumed 5% return
   
1,000.00
    
1,021.77
    
3.06
    
.61
  
Class 529-A -- actual return
    
1,000.00
    
1,004.90
    
3.33
    
.67
  
Class 529-A -- assumed 5% return
   
1,000.00
    
1,021.47
    
3.36
    
.67
  
Class 529-B -- actual return
    
1,000.00
    
1,000.82
    
7.49
    
1.51
  
Class 529-B -- assumed 5% return
   
1,000.00
    
1,017.31
    
7.55
    
1.51
  
Class 529-C -- actual return
    
1,000.00
    
1,000.90
    
7.44
    
1.50
  
Class 529-C -- assumed 5% return
   
1,000.00
    
1,017.36
    
7.50
    
1.50
  
Class 529-E -- actual return
    
1,000.00
    
1,003.42
    
4.82
    
.97
  
Class 529-E -- assumed 5% return
   
1,000.00
    
1,019.98
    
4.86
    
.97
  
Class 529-F -- actual return
    
1,000.00
    
1,005.87
    
2.34
    
.47
  
Class 529-F -- assumed 5% return
   
1,000.00
    
1,022.46
    
2.36
    
.47
  
Class R-1 -- actual return
    
1,000.00
    
1,001.16
    
7.14
    
1.44
  
Class R-1 -- assumed 5% return
   
1,000.00
    
1,017.65
    
7.20
    
1.44
  
Class R-2 -- actual return
    
1,000.00
    
1,001.23
    
7.05
    
1.42
  
Class R-2 -- assumed 5% return
   
1,000.00
    
1,017.75
    
7.10
    
1.42
  
Class R-3 -- actual return
    
1,000.00
    
1,003.18
    
5.07
    
1.02
  
Class R-3 -- assumed 5% return
   
1,000.00
    
1,019.74
    
5.11
    
1.02
  
Class R-4 -- actual return
    
1,000.00
    
1,004.99
    
3.28
    
.66
  
Class R-4 -- assumed 5% return
   
1,000.00
    
1,021.52
    
3.31
    
.66
  
Class R-5 -- actual return
    
1,000.00
    
1,006.45
    
1.74
    
.35
  
Class R-5 -- assumed 5% return
   
1,000.00
    
1,023.06
    
1.76
    
.35
  
                           

* Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the period (181), and divided by 365 (to reflect the one-half year period).
 
 
 
Offices of the fund and of the
investment adviser
Capital Research and
Management Company
333 South Hope Street
Los Angeles, CA 90071-1406

135 South State College Boulevard
Brea, CA 92821-5823

Principal underwriter
American Funds Distributors, Inc.
333 South Hope Street
Los Angeles, CA 90071-1406

Transfer agent for shareholder
accounts
American Funds Service Company
(Please write to the address
nearest you.)

P.O. Box 25065
Santa Ana, CA 92799-5065

P.O. Box 659522
San Antonio, TX 78265-9522

P.O. Box 6007
Indianapolis, IN 46206-6007

P.O. Box 2280
Norfolk, VA 23501-2280

Custodian of assets
JPMorgan Chase Bank
270 Park Avenue
New York, NY 10017-2070

Counsel
Paul, Hastings, Janofsky &
Walker LLP
515 South Flower Street
Los Angeles, CA 90071-2228

Independent registered public
accounting firm
Deloitte & Touche LLP
695 Town Center Drive
Suite 1200
Costa Mesa, CA 92626-7188

There are several ways to invest in The Bond Fund of America. Class A shares are subject to a 3.75% maximum up-front sales charge that declines for accounts (and aggregated investments) of $100,000 or more and is eliminated for purchases of $1 million or more. Other share classes, which are generally not available for certain employer-sponsored retirement plans, have no up-front sales charges but are subject to additional annual expenses and fees. Annualized expenses for Class B shares were 0.75 percentage points higher than for Class A shares; Class B shares convert to Class A shares after eight years of ownership. If redeemed within six years, Class B shares may also be subject to a contingent deferred sales charge (“CDSC”) of up to 5% that declines over time. Class C shares were subject to annualized expenses 0.80 percentage points higher than those for Class A shares and a 1% CDSC if redeemed within the first year after purchase. Class C shares convert to Class F shares after 10 years. Class F shares, which are available only through certain fee-based programs offered by broker-dealer firms and registered investment advisers, had lower annualized expenses (by 0.02 percentage points) than did Class A shares, and an annual asset-based fee charged by the sponsoring firm. Expenses are deducted from income earned by the fund. As a result, dividends and investment results will differ for each share class.

Investors should carefully consider the investment objectives, risks, charges and expenses of the American Funds. This and other important information is contained in the fund’s prospectus, which can be obtained from your financial adviser and should be read carefully before investing. You may also call American Funds Service Company (AFS) at 800/421-0180 or visit the American Funds website at americanfunds.com.

“American Funds Proxy Voting Guidelines” — which describes how we vote proxies relating to portfolio securities — is available free of charge on the U.S. Securities and Exchange Commission (SEC) website at sec.gov, on the American Funds website or upon request by calling AFS. The fund files its proxy voting record with the SEC for the 12 months ended June 30 by August 31. The report also is available on the SEC and American Funds websites.

A complete June 30, 2006, portfolio of The Bond Fund of America’s investments is available free of charge by calling AFS or visiting the SEC website (where it is part of Form N-CSR).

The Bond Fund of America files a complete list of its portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. This filing is available free of charge on the SEC website. You may also review or, for a fee, copy this filing at the SEC’s Public Reference Room in Washington, D.C. (800/SEC-0330). Additionally, the list of portfolio holdings also is available by calling AFS.

This report is for the information of shareholders of The Bond Fund of America, but it may also be used as sales literature when preceded or accompanied by the current prospectus, which gives details about charges, expenses, investment objectives and operating policies of the fund. If used as sales material after September 30, 2006, this report must be accompanied by an American Funds statistical update for the most recently completed calendar quarter.

The Capital Group Companies

American Funds          Capital Research and Management             Capital International               Capital Guardian                 Capital Bank and Trust
 

 
Lit. No. MFGESR-908-0806P

Litho in USA BG/CG/6370-S7489

Printed on recycled paper

 
ITEM 2 - Code of Ethics

Not applicable for filing of semi-annual reports to shareholders.


ITEM 3 - Audit Committee Financial Expert

Not applicable for filing of semi-annual reports to shareholders.


ITEM 4 - Principal Accountant Fees and Services

Not applicable for filing of semi-annual reports to shareholders.


ITEM 5 - Audit Committee of Listed Registrants

Not applicable to this Registrant, insofar as the Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.


ITEM 6 - Schedule of Investments
 
[logo - American Funds®]

 
Bond Fund of America SM
Investment portfolio

June 30, 2006
   
unaudited
     
 
Principal amount
Market value
Bonds & notes — 90.85%
(000)
(000)
     
CORPORATE BONDS & NOTES — 47.13%
    
FINANCIALS — 19.24%
    
General Motors Acceptance Corp. 4.50% 2006
$ 4,600
$ 4,598
General Motors Acceptance Corp. 6.125% 2006
3,880
3,874
General Motors Acceptance Corp. 5.968% 20072 
27,000
26,924
General Motors Acceptance Corp. 6.039% 20072 
15,000
14,900
General Motors Acceptance Corp. 6.15% 2007
2,750
2,734
General Motors Acceptance Corp. 5.125% 2008
9,855
9,445
General Motors Acceptance Corp. 5.85% 2009
24,040
23,058
Residential Capital Corp. 6.168% 20092 
17,500
17,468
Residential Capital Corp. 6.898% 20091,2 
6,000
6,004
Residential Capital Corp. 6.375% 2010
40,000
39,490
General Motors Acceptance Corp. 7.75% 2010
5,880
5,854
Residential Capital Corp. 6.00% 2011
30,000
29,098
General Motors Acceptance Corp. 7.25% 2011
72,350
70,212
General Motors Acceptance Corp. 7.00% 2012
41,750
39,674
Residential Capital Corp. 6.50% 2013
25,000
24,567
General Motors Acceptance Corp. 6.75% 2014
1,750
1,628
General Motors Acceptance Corp. 7.431% 20142 
75,000
72,789
Residential Capital Corp. 6.875% 2015
2,780
2,782
International Lease Finance Corp., Series P, 3.125% 2007
2,000
1,957
ASIF Global Financing XVIII 3.85% 20071 
5,785
5,650
ASIF Global Financing XXVIII 5.17% 20071,2
2,000
2,001
International Lease Finance Corp. 4.35% 2008
21,000
20,404
International Lease Finance Corp. 4.50% 2008
15,500
15,179
AIG SunAmerica Global Financing VII 5.85% 20081 
24,250
24,348
International Lease Finance Corp. 3.50% 2009
13,000
12,275
International Lease Finance Corp., Series O, 4.55% 2009
18,355
17,699
International Lease Finance Corp. 4.75% 2009
22,000
21,413
International Lease Finance Corp. 5.00% 2010
4,565
4,437
International Lease Finance Corp. 5.125% 2010
25,000
24,410
International Lease Finance Corp., Series Q, 5.45% 2011
15,000
14,735
International Lease Finance Corp. 5.00% 2012
13,500
12,871
ASIF Global Financing XIX 4.90% 20131
2,000
1,898
American General Finance Corp., Series I, 5.85% 2013
27,500
27,300
International Lease Finance Corp. 5.875% 2013
5,000
4,969
American General Finance Corp., Series I, 5.40% 2015
20,000
19,006
American International Group, Inc. 6.25% 20361
8,750
8,414
ILFC E-Capital Trust I 5.90% 20651,2
67,000
65,375
ILFC E-Capital Trust II 6.25% 20651,2
9,325
8,826
Washington Mutual, Inc. 7.50% 2006
5,000
5,011
Washington Mutual, Inc. 4.375% 2008
11,735
11,501
Washington Mutual, Inc. 5.55% 2010
4,000
3,991
Washington Mutual, Inc. 5.00% 2012
14,000
13,325
Washington Mutual, Inc. 5.737% 20122 
41,000
40,917
Washington Mutual, Inc. 5.796% 20122
35,000
35,086
Washington Mutual, Inc. 5.95% 2013
5,000
4,949
Washington Mutual, Inc. 5.25% 2017
10,000
9,154
Providian Financial Corp., Series A, 9.525% 20271
16,750
17,790
Washington Mutual Preferred Funding I Ltd. 6.534% (undated)1,2
140,400
134,982
Ford Motor Credit Co. 4.875% 2007
€13,950
17,713
Ford Motor Credit Co. 7.20% 2007
$ 3,000
2,979
Ford Motor Credit Co. 5.80% 2009
3,500
3,199
Ford Motor Credit Co. 7.375% 2009
4,000
3,701
Ford Motor Credit Co. 6.638% 20102 
35,275
32,164
Ford Motor Credit Co. 7.875% 2010
124,000
114,483
Ford Motor Credit Co. 9.75% 20101
41,000
39,983
Ford Motor Credit Co. 10.486% 20111,2 
25,000
25,114
Household Finance Corp. 5.75% 2007
10,000
10,010
Household Finance Corp. 7.875% 2007
32,000
32,453
Household Finance Corp. 4.125% 2008
1,000
967
Household Finance Corp. 6.40% 2008
10,000
10,138
Household Finance Corp. 4.125% 2009
25,000
23,812
HSBC Finance Corp. 4.625% 2010
11,500
11,032
Household Finance Corp. 6.375% 2011
7,250
7,417
Household Finance Corp. 6.75% 2011
23,750
24,662
HSBC Finance Corp. 5.427% 20122 
15,000
15,102
HSBC Finance Corp. 5.679% 20122 
20,000
20,111
HSBC Bank USA 4.625% 20141
4,000
3,673
HSBC Finance Corp. 5.00% 2015
31,730
29,333
HSBC Finance Capital Trust IX 5.911% 20352
10,000
9,560
Midland Bank 5.875% Eurodollar note (undated)2
15,000
12,825
J.P. Morgan Chase & Co. 5.35% 2007
3,285
3,279
J.P. Morgan Chase & Co. 4.00% 2008
12,500
12,195
BANK ONE, Texas, NA 6.25% 2008
7,250
7,304
J.P. Morgan Chase & Co. 6.75% 2011
15,000
15,606
J.P. Morgan Chase & Co. 6.625% 2012
14,165
14,684
J.P. Morgan Chase & Co. 5.75% 2013
16,000
15,859
J.P. Morgan Chase & Co. 4.75% 2015
7,500
6,886
J.P. Morgan Chase & Co. 4.891% 2015
57,100
55,031
Bank One Corp. 4.90% 2015
9,000
8,309
J.P. Morgan Chase & Co. 5.15% 2015
24,190
22,620
Chase Capital II, Global Floating Rate Capital Securities, Series B, 5.649% 20272
20,000
19,283
CIT Group Inc. 3.65% 2007
25,720
25,016
CIT Group Inc. 5.75% 2007
13,500
13,496
CIT Group Inc. 4.00% 2008
14,000
13,596
CIT Group Inc. 3.375% 2009
5,000
4,714
CIT Group Inc. 6.875% 2009
31,000
31,967
CIT Group Inc. 4.25% 2010
30,000
28,593
CIT Group Inc. 7.75% 2012
26,875
29,167
CIT Group Inc. 5.40% 2013
15,000
14,531
Santander Issuances, SA Unipersonal 5.774% 20161,2 
20,000
20,023
Santander Issuances, SA Unipersonal 5.805% 20161,2
62,000
61,547
Abbey National PLC 6.70% (undated)2
18,380
18,638
Abbey National PLC 7.35% (undated)2
30,500
30,682
Abbey National PLC 7.50% (undated)2
£2,975
6,186
HBOS Treasury Services PLC 3.75% 20081 
$ 2,000
1,923
HBOS PLC, Series B, 5.92% (undated)1,2
108,100
99,761
Bank of Scotland 7.00% (undated)1,2
25,000
25,321
Sumitomo Mitsui Banking Corp. 5.625% (undated)1,2
130,795
122,196
Prudential Financial, Inc. 4.104% 2006
10,000
9,951
Prudential Insurance Co. of America 6.375% 20061
4,000
4,002
PRICOA Global Funding I, Series 2003-2, 3.90% 20081 
7,500
7,194
PRICOA Global Funding I, Series 2004-4, 4.35% 20081 
2,500
2,436
PRICOA Global Funding I 4.20% 20101
17,000
16,161
Prudential Financial, Inc., Series B, 4.75% 2014
4,000
3,702
Prudential Holdings, LLC, Series C, 8.695% 20231,3 
57,035
67,877
USA Education, Inc. 5.625% 2007
29,150
29,120
SLM Corp., Series A, 3.95% 2008
17,500
16,846
SLM Corp., Series A, 4.00% 2010
5,500
5,198
SLM Corp., Series A, 4.50% 2010
43,000
41,033
SLM Corp., Series A, 5.125% 2012
5,000
4,808
SLM Corp., Series A, 5.375% 2013
5,450
5,273
Resona Bank, Ltd. 3.75% 20152
€9,740
12,153
Resona Bank, Ltd. 5.85% (undated)1,2
$90,585
84,431
Westfield Capital Corp. Ltd. and WT Finance (Australia) Pty Ltd. and WEA
   
     Finance LLC 4.375% 20101 
57,950
54,731
Westfield Capital Corp. Ltd. and WT Finance (Australia) Pty Ltd. and WEA
   
     Finance LLC 5.125% 20141 
26,600
24,979
WT Finance (Australia) Pty Ltd., Westfield Europe Finance PLC, and WEA
   
     Finance LLC 5.50% 2017
£3,470
6,285
SocGen Real Estate Co. LLC, Series A, 7.64% (undated)1,2
$74,250
75,846
Bank of America Corp. 3.875% 2008
2,000
1,951
Bank of America Corp. 4.375% 2010
13,000
12,364
Bank of America Corp. 4.50% 2010
9,000
8,638
BankAmerica Corp. 7.125% 2011
1,750
1,862
Bank of America Corp. 4.875% 2012
2,000
1,908
MBNA Corp., Series F, 7.50% 2012
1,800
1,949
Bank of America Corp. 5.25% 2015
5,000
4,737
MBNA Capital A, Series A, 8.278% 2026
7,500
7,864
MBNA Global Capital Funding, Series B, 5.949% 20272 
33,000
32,689
Citigroup Inc. 3.50% 2008
20,000
19,375
Citigroup Inc. 4.25% 2009
15,000
14,443
Citigroup Inc. 4.125% 2010
26,000
24,740
Citigroup Inc. 5.125% 2011
10,000
9,775
Citigroup Inc. 5.625% 2012
5,675
5,614
Price REIT, Inc. 7.50% 2006
2,760
2,774
Kimco Realty Corp., Series C, 3.95% 2008
9,200
8,904
Kimco Realty Corp., Series C, 4.82% 2011
10,000
9,531
Kimco Realty Corp. 6.00% 2012
18,500
18,578
Kimco Realty Corp., Series C, 4.82% 2014
12,000
11,003
Kimco Realty Corp., Series C, 4.904% 2015
3,000
2,770
Kimco Realty Corp., Series C, 5.783% 2016
18,500
17,945
Mizuho Capital Investment (USD) 1 Ltd. and Mizuho Capital Investment (EUR) 1 Ltd. 6.686%
   
     noncumulative preferred (undated)1,2
64,010
60,848
Lazard Group LLC 7.125% 2015
57,915
58,627
EOP Operating LP 7.75% 2007
2,000
2,050
EOP Operating LP 6.75% 2008
24,500
24,851
EOP Operating LP 4.65% 2010
17,010
16,143
EOP Operating LP 7.00% 2011
2,500
2,600
EOP Operating LP 6.75% 2012
8,250
8,522
EOP Operating LP 7.50% 2029
1,710
1,801
ReliaStar Financial Corp. 8.00% 2006
23,160
23,325
ING Security Life Institutional Funding 2.70% 20071
4,730
4,635
ReliaStar Financial Corp. 6.50% 2008
6,016
6,112
ING Bank NV 5.50% 2012
€3,750
5,081
ING Groep NV 5.775% (undated)2
15,500
14,734
XL Capital Finance (Europe) PLC 6.50% 2012
12,455
12,654
Mangrove Bay Pass Through Trust 6.102% 20331,2
31,505
30,136
Twin Reefs Asset Trust (XLFA), Series B, 6.17% (undated)1,2 
10,200
10,200
Developers Diversified Realty Corp. 3.875% 2009
19,500
18,571
Developers Diversified Realty Corp. 5.00% 2010
2,500
2,425
Developers Diversified Realty Corp. 5.375% 2012
15,450
14,867
Developers Diversified Realty Corp. 5.50% 2015
17,500
16,505
TuranAlem Finance BV 7.75% 20131 
11,000
10,739
TuranAlem Finance BV 8.00% 2014
9,710
9,455
TuranAlem Finance BV 8.00% 20141 
5,000
4,869
TuranAlem Finance BV 8.50% 20151
20,560
20,277
TuranAlem Finance BV 8.50% 2015
6,890
6,795
Skandinaviska Enskilda Banken AB 4.958% (undated)1,2
32,805
29,289
Skandinaviska Enskilda Banken AB 5.471% (undated)1,2
8,390
7,685
Skandinaviska Enskilda Banken AB 7.50% (undated)2
12,500
13,135
Hospitality Properties Trust 7.00% 2008
1,000
1,016
Hospitality Properties Trust 6.75% 2013
17,845
18,286
Hospitality Properties Trust 5.125% 2015
6,850
6,294
Hospitality Properties Trust 6.30% 2016
24,175
23,855
Allstate Financial Global Funding LLC 5.25% 20071
26,500
26,448
Allstate Life Global Funding Trust, Series 2004-2, 5.27% 20072 
3,000
3,002
Allstate Financial Global Funding LLC 4.25% 20081
7,500
7,291
Allstate Life Global Funding Trust, Series 2004-1, 4.50% 2009
5,000
4,851
Allstate Financing II 7.83% 2045
5,000
5,221
PLD International Finance LLC 4.375% 2011
€4,150
5,273
ProLogis 5.50% 2012
$17,500
17,057
ProLogis 5.625% 20151
25,000
23,914
Lincoln National Corp. 7.00% 20662
45,770
45,495
Royal Bank of Scotland Group PLC 8.375% 2007
£6,500
12,215
Royal Bank of Scotland Group PLC 5.00% 2014
$ 6,500
6,151
Royal Bank of Scotland Group PLC 5.512% noncumulative trust preferred (undated)2
8,924
8,333
National Westminster Bank PLC 7.75% (undated)2
17,000
17,383
Monumental Global Funding Trust II, Series 2002-A, 5.20% 20071
17,500
17,460
AEGON NV 4.625% 2008
€7,750
10,064
Transamerica Corp. 9.375% 2008
$7,500
7,865
Monumental Global Funding II, Series 2004-F, 4.375% 20091
2,000
1,928
AEGON NV 6.125% 2031
£1,600
3,322
Kazkommerts International BV 7.00% 20091
$ 5,500
5,459
Kazkommerts International BV 8.50% 2013
8,500
8,755
Kazkommerts International BV 7.875% 20141 
9,200
9,085
Kazkommerts International BV 8.00% 20151 
15,500
15,113
ZFS Finance (USA) Trust I 6.15% 20651,2
32,680
31,340
ZFS Finance (USA) Trust II 6.45% 20651,2
6,000
5,499
HVB Funding Trust I 8.741% 20311 
18,339
21,656
HVB Funding Trust III 9.00% 20311
12,530
15,181
ACE Ltd. 6.00% 2007
1,000
1,001
ACE INA Holdings Inc. 5.875% 2014
20,275
19,619
ACE Capital Trust II 9.70% 2030
12,423
15,342
Development Bank of Singapore Ltd. 7.875% 20091 
20,000
21,070
DBS Bank Ltd. 5.98% 20211,2
12,500
12,500
American Honda Finance Corp. 5.125% 20101 
34,350
33,538
World Savings Bank, FSB, Bank Notes, Series 2008-FXR, 4.125% 2008
34,250
33,411
Berkshire Hathaway Finance Corp. 4.125% 2010
25,000
23,804
Berkshire Hathaway Finance Corp. 4.75% 2012
10,000
9,480
CNA Financial Corp. 6.75% 2006
3,000
3,010
CNA Financial Corp. 5.85% 2014
16,500
15,589
CNA Financial Corp. 7.25% 2023
14,300
14,307
Liberty Mutual Group Inc. 6.50% 20351
37,460
32,807
Nationwide Life Insurance Co. 5.35% 20071 
4,250
4,243
North Front Pass Through Trust 5.81% 20241,2
18,500
17,617
Nationwide Mutual Insurance Co. 7.875% 20331 
8,000
8,897
Nationwide Mutual Insurance Co. 6.60% 20341 
2,000
1,885
Simon Property Group, LP 4.875% 2010
12,000
11,584
Simon Property Group, LP 5.375% 2011
12,500
12,198
Simon Property Group, LP 5.75% 2012
4,000
3,945
Simon Property Group, LP 6.10% 2016
4,000
3,976
Principal Life Global Funding I 2.80% 20081 
11,625
11,022
Principal Life Global Funding I 4.40% 20101
16,600
15,720
Principal Life Income Fundings Trust, Series 2005-34, 5.20% 2010
2,000
1,959
Brandywine Operating Partnership, LP 5.75% 2012
26,550
26,018
iStar Financial, Inc. 5.375% 2010
10,675
10,431
iStar Financial, Inc., Series B, 5.125% 2011
1,500
1,438
iStar Financial, Inc. 6.05% 2015
14,285
13,994
Rouse Co. 3.625% 2009
5,200
4,858
Rouse Co. 7.20% 2012
17,700
17,839
Rouse Co. (TRC) 6.75% 20131
2,000
1,958
UnionBanCal Corp. 5.25% 2013
2,000
1,913
Union Bank of California, NA 5.95% 2016
22,000
21,895
Jackson National Life Global Funding, Series 2002-1, 5.25% 20071 
23,125
23,136
Plum Creek Timberlands, LP 5.875% 2015
23,500
22,488
Metropolitan Life Global Funding I, Series 2004-2, 5.411% 20071,2 
1,500
1,501
Met Life Global Funding I 2.60% 20081
20,000
18,839
MetLife, Inc. 5.00% 2015
2,000
1,853
John Hancock Global Funding II, Series 2002-G, 5.00% 20071 
5,000
4,954
John Hancock Global Funding II, Series 2004-A, 3.50% 20091
18,000
17,125
Assurant, Inc. 5.625% 2014
22,000
21,135
Canadian Imperial Bank of Commerce 5.125% Eurodollar note 20852
25,000
21,000
United Overseas Bank Ltd. 5.375% 20191,2
22,250
20,844
Zions Bancorporation 5.50% 2015
21,625
20,646
Hartford Financial Services Group, Inc. 4.70% 2007
16,250
16,054
Hartford Financial Services Group, Inc. 5.55% 2008
875
873
Hartford Financial Services Group, Inc. 4.625% 2013
4,000
3,688
Countrywide Home Loans, Inc., Series M, 4.125% 2009
20,000
19,034
Bank of Ireland 6.107% (undated)1,2
20,300
18,938
United Dominion Realty Trust, Inc., Series E, 4.50% 2008
17,000
16,640
Standard Chartered Bank 5.588% (undated)2
5,000
4,175
Standard Chartered Bank 5.688% Eurodollar note (undated)2
15,000
12,450
Credit Suisse First Boston (USA), Inc. 6.50% 2012
15,000
15,496
Capital One Bank 4.25% 2008
8,000
7,742
Capital One Financial Corp. 6.25% 2013
7,000
7,062
Protective Life Insurance Co., Series 2005-C, 4.85% 2010
15,000
14,612
Downey Financial Corp. 6.50% 2014
14,380
14,138
Advanta Capital Trust I, Series B, 8.99% 2026
12,500
12,656
Genworth Financial, Inc. 5.479% 20072
2,500
2,504
Genworth Financial, Inc. 4.75% 2009
10,345
10,108
ERP Operating LP 4.75% 2009
2,225
2,167
ERP Operating LP 6.625% 2012
5,000
5,181
ERP Operating LP 5.375% 2016
5,000
4,702
E*TRADE Financial Corp. 8.00% 2011
750
769
E*TRADE Financial Corp. 7.375% 2013
925
930
E*TRADE Financial Corp. 7.875% 2015
9,720
10,012
Independence Community Bank Corp. 4.90% 2010
12,000
11,520
MassMutual Global Funding II, Series 2002-1, 3.50% 20101
12,000
11,182
Comerica, Inc., Imperial Capital Trust I, Imperial Bancorp, Series B, 9.98% 2026
10,200
11,074
Wells Fargo & Co. 3.50% 2008
3,310
3,193
Wells Fargo & Co. 4.125% 2008
8,000
7,807
St. Paul Travelers Companies, Inc. 6.25% 2016
11,000
10,973
AB Spintab 6.00% 2009
SKr73,000
10,734
Banco Santander-Chile 5.375% 20141
$11,200
10,671
PNC Funding Corp. 4.20% 2008
6,750
6,585
PNC Funding Corp. 5.125% 2010
4,000
3,906
United Energy Distribution Pty Ltd., AMBAC insured, 4.70% 20111 
10,000
9,573
Post Apartment Homes, LP 7.70% 2010
1,400
1,484
Post Apartment Homes, LP 5.125% 2011
7,720
7,338
American Express Credit Corp. 3.00% 2008
9,060
8,648
Bank of Nova Scotia 5.125% 20852 
10,000
8,528
Shinsei Bank, Ltd. 3.75% 20162
€6,865
8,438
Chohung Bank 4.50% 20141,2
$8,000
7,538
Host Marriott, LP, Series G, 9.25% 2007
625
648
Host Marriott, LP, Series M, 7.00% 2012
6,595
6,570
Lloyds Bank, Series 2, 5.438% (undated)2
8,000
7,114
BCI U.S. Funding Trust I 8.01% noncumulative preferred (undated)1,2
6,500
6,749
Allied Irish Banks Ltd. 5.626% (undated)2
7,000
6,384
Weingarten Realty Investors, Series A, 4.857% 2014
6,080
5,631
National Australia Bank Ltd. 5.486% (undated)1,2
5,925
5,470
Irvine Apartment Communities, LP 7.00% 2007
5,000
4,997
Wachovia Corp., Series G, 4.375% 2010
5,000
4,785
Industrial Bank of Korea 4.00% 20141,2
5,000
4,715
Bergen Bank 5.125% (undated)2
5,000
4,200
National Bank of Canada 5.125% 20872
5,000
4,112
Christiana Bank Og Kreditkasse 5.466% (undated)2 
4,000
3,582
Federal Realty Investment Trust 4.50% 2011
3,500
3,276
FelCor Lodging LP 8.50% 20112
2,270
2,418
Willis North America Inc. 5.625% 20154
2,500
2,236
Deutsche Bank Financial LLC 5.375% 2015
2,000
1,924
Fairfax Financial Holdings Ltd. 7.75% 2012
2,000
1,750
UnumProvident Finance Co. PLC 6.85% 20151 
1,425
1,403
Crescent Real Estate LP 7.50% 2007
1,190
1,208
   
4,697,683
     
CONSUMER DISCRETIONARY — 6.41%
    
DaimlerChrysler North America Holding Corp. 4.05% 2008
4,750
4,595
DaimlerChrysler North America Holding Corp. 4.75% 2008
4,800
4,723
DaimlerChrysler North America Holding Corp. 5.74% 20092
30,000
30,043
DaimlerChrysler North America Holding Corp. 7.20% 2009
19,750
20,386
DaimlerChrysler North America Holding Corp. 4.875% 2010
37,750
36,117
DaimlerChrysler North America Holding Corp. 8.00% 2010
56,500
60,034
DaimlerChrysler North America Holding Corp. 7.75% 2011
26,350
27,841
DaimlerChrysler North America Holding Corp. 6.50% 2013
11,610
11,620
DaimlerChrysler North America Holding Corp. 8.50% 2031
1,610
1,828
Comcast Cable Communications, Inc. 6.20% 2008
7,150
7,225
Lenfest Communications, Inc. 7.625% 2008
6,750
6,921
Comcast Cable Communications, Inc. 6.875% 2009
15,194
15,644
Comcast Cable Communications, Inc. 6.75% 2011
15,000
15,494
Tele-Communications, Inc. 9.80% 2012
17,500
20,210
Comcast Cable Communications, Inc. 7.125% 2013
1,650
1,731
Tele-Communications, Inc. 7.875% 2013
7,500
8,090
Comcast Corp. 5.85% 2015
29,025
28,002
Comcast Corp. 6.50% 2015
23,000
23,218
Comcast Corp. 5.90% 2016
6,570
6,324
Comcast Corp. 5.65% 2035
6,670
5,679
Harrah’s Operating Co., Inc. 5.50% 2010
17,320
16,912
Harrah’s Operating Co., Inc. 5.625% 2015
27,650
25,618
Harrah’s Operating Co., Inc. 6.50% 2016
20,000
19,523
Harrah’s Operating Co., Inc. 5.75% 2017
12,000
10,954
Viacom Inc. 5.75% 20111 
1,130
1,111
Viacom Inc. 6.25% 20161 
34,110
33,172
Viacom Inc. 6.875% 20361
32,600
31,558
Clear Channel Communications, Inc. 6.625% 2008
5,375
5,420
Chancellor Media Corp. of Los Angeles 8.00% 2008
12,500
13,003
Clear Channel Communications, Inc. 7.65% 2010
15,826
16,520
Clear Channel Communications, Inc. 5.75% 2013
10,000
9,397
Clear Channel Communications, Inc. 5.50% 2014
3,000
2,720
Clear Channel Communications, Inc. 6.875% 2018
13,000
12,430
News America Holdings Inc. 6.625% 2008
12,900
13,070
News America Inc. 5.30% 2014
8,000
7,604
News America Holdings Inc. 8.00% 2016
1,000
1,123
News America Holding Inc. 8.25% 2018
8,990
10,317
News America Inc. 6.40% 2035
26,000
24,123
Royal Caribbean Cruises Ltd. 7.00% 2007
1,400
1,420
Royal Caribbean Cruises Ltd. 8.75% 2011
2,325
2,511
Royal Caribbean Cruises Ltd. 6.875% 2013
1,150
1,133
Royal Caribbean Cruises Ltd. 7.00% 2013
29,980
29,858
Royal Caribbean Cruises Ltd. 7.25% 2016
17,000
16,920
Time Warner Inc. 8.18% 2007
2,225
2,283
AOL Time Warner Inc. 6.875% 2012
33,500
34,663
AOL Time Warner Inc. 7.625% 2031
9,825
10,609
Toll Brothers, Inc. 6.875% 2012
9,875
9,850
Toll Brothers, Inc. 4.95% 2014
23,720
20,761
Toll Brothers, Inc. 5.15% 2015
14,000
12,239
General Motors Corp. 6.375% 2008
3,000
2,872
General Motors Nova Scotia Finance Co. 6.85% 2008
7,800
7,429
General Motors Corp. 7.20% 2011
11,700
10,413
General Motors Corp. 7.125% 2013
8,230
6,913
General Motors Corp. 7.25% 2013
€700
742
General Motors Corp. 7.70% 2016
8,760
7,227
General Motors Corp. 9.40% 2021
1,875
1,636
General Motors Corp. 8.375% 2033
1,200
966
Cox Communications, Inc. 5.869% 20072
5,000
5,026
Cox Communications, Inc. 7.875% 2009
1,000
1,051
Cox Communications, Inc. 4.625% 2010
5,000
4,773
Cox Communications, Inc. 7.75% 2010
10,000
10,600
Cox Communications, Inc. 5.45% 2014
12,750
11,808
Target Corp. 3.375% 2008
8,330
8,042
Target Corp. 5.375% 2009
24,500
24,388
Pulte Homes, Inc. 4.875% 2009
25,300
24,422
Pulte Homes, Inc. 7.625% 2017
7,500
7,846
Ryland Group, Inc. 5.375% 2008
2,000
1,970
Ryland Group, Inc. 5.375% 2012
30,900
28,568
Charter Communications Operating, LLC and Charter Communications Operating
   
     Capital Corp. 8.00% 20121
9,650
9,650
Charter Communications, Series B, 7.755% 20132
6,425
6,449
CCO Holdings, LLC and CCO Holdings Capital Corp. 8.75% 2013
10,750
10,535
Charter Communications Operating, LLC and Charter Communications Operating
   
     Capital Corp. 8.375% 20141
2,500
2,516
Viacom Inc. 5.625% 2007
6,600
6,594
Viacom Inc. 6.625% 2011
13,000
13,356
Viacom Inc. 5.625% 2012
8,500
8,317
Centex Corp. 5.80% 2009
2,500
2,471
Centex Corp. 5.25% 2015
6,725
6,049
Centex Corp. 6.50% 2016
20,000
19,469
Carnival Corp. 3.75% 2007
8,500
8,261
Carnival Corp. 6.15% 2008
18,623
18,715
J.C. Penney Co., Inc. 8.00% 2010
7,590
8,093
J.C. Penney Co., Inc. 9.00% 2012
995
1,142
J.C. Penney Co., Inc. 7.65% 2016
3,600
3,918
J.C. Penney Co., Inc. 7.95% 2017
8,000
8,954
J.C. Penney Co., Inc. 7.625% 2097
500
498
Johnson Controls, Inc. 5.25% 2011
7,550
7,365
Johnson Controls, Inc. 5.50% 2016
15,000
14,258
D.R. Horton, Inc. 9.75% 2010
1,150
1,268
D.R. Horton, Inc. 7.875% 2011
800
841
D.R. Horton, Inc. 6.50% 2016
20,060
19,322
American Media Operations, Inc., Series B, 10.25% 2009
15,690
14,709
American Media Operations, Inc. 8.875% 2011
7,060
6,283
Kohl’s Corp. 6.30% 2011
16,000
16,311
Kohl’s Corp. 7.375% 2011
1,500
1,590
Omnicom Group Inc. 5.90% 2016
17,750
17,029
Visteon Corp. 8.25% 2010
16,990
15,971
Cinemark USA, Inc. 9.00% 2013
8,325
8,783
Cinemark, Inc. 0%/9.75% 20145 
8,750
6,825
Mohegan Tribal Gaming Authority 6.375% 2009
14,410
14,104
Mohegan Tribal Gaming Authority 7.125% 2014
1,500
1,459
MGM MIRAGE 6.00% 2009
1,975
1,931
MGM MIRAGE 8.50% 2010
6,850
7,150
MGM MIRAGE 6.75% 2012
1,050
1,016
MGM MIRAGE 6.75% 20131
2,500
2,397
MGM MIRAGE 5.875% 2014
500
451
MGM MIRAGE 6.625% 2015
1,525
1,430
Seminole Tribe of Florida 5.798% 20131
14,750
14,306
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. 6.625% 2014
14,415
13,658
Circus and Eldorado Joint Venture and Silver Legacy Resort Casino 10.125% 2012
12,025
12,762
Delphi Automotive Systems Corp. 6.50% 20096 
6,000
5,040
Delphi Corp. 6.50% 20136
7,020
5,511
Delphi Automotive Systems Corp. 6.55% 20066
500
417
Delphi Automotive Systems Corp. 7.125% 20296 
1,350
1,060
Grupo Posadas, SA de CV 8.75% 20111
10,585
10,638
Grupo Posadas, SA de CV 8.75% 2011
1,050
1,055
Young Broadcasting Inc. 10.00% 2011
12,317
11,024
CanWest Media Inc., Series B, 8.00% 2012
10,926
10,871
Telenet Group Holding NV 0%/11.50% 20141,5 
12,709
10,834
NTL Cable PLC 8.75% 2014
5,825
5,810
NTL Cable PLC 8.75% 2014
€1,000
1,305
NTL Inc. 10.30% 20162
$ 3,675
3,675
Linens n’ Things, Inc. 10.702% 20141,2 
10,750
10,239
Bon-Ton Stores, Inc. 10.25% 20141
10,500
9,791
Lowe’s Companies, Inc. 8.25% 2010
8,450
9,225
Neiman Marcus Group, Inc. 9.00% 20151,7 
8,620
9,051
AMC Entertainment Inc., Series B, 8.625% 2012
3,000
3,097
AMC Entertainment Inc. 8.00% 2014
5,650
5,205
Iesy Repository GmbH 10.375% 20151
8,550
8,208
William Lyon Homes, Inc. 7.625% 2012
5,750
4,801
William Lyon Homes, Inc. 10.75% 2013
2,000
1,930
William Lyon Homes, Inc. 7.50% 2014
1,500
1,252
Kabel Deutschland GmbH 10.625% 20141
7,150
7,579
Toys "R" Us, Inc. 7.625% 2011
2,000
1,635
Toys "R" Us, Inc. 10.34% 20122
5,250
5,250
Toys "R" Us, Inc. 7.875% 2013
450
357
Technical Olympic USA, Inc. 9.00% 2010
2,600
2,541
Technical Olympic USA, Inc. 9.00% 2010
950
929
Technical Olympic USA, Inc. 7.50% 2011
3,750
3,337
Regal Cinemas Corp., Series B, 9.375% 20124
6,125
6,498
Liberty Media Corp. 7.875% 2009
2,500
2,601
Liberty Media Corp. 8.50% 2029
1,250
1,222
Liberty Media Corp. 8.25% 2030
2,750
2,646
Burlington Coat Factory Holdings, Inc. 11.125% 20141 
6,600
6,435
Century Communications Corp. 0% 20036
5,000
4,525
Adelphia Communications Corp. 10.25% 20066 
3,500
1,890
Tenneco Automotive Inc., Series B, 10.25% 2013
750
826
Tenneco Automotive Inc. 8.625% 2014
5,510
5,524
PETCO Animal Supplies, Inc. 10.75% 2011
5,750
6,095
Thomson Corp. 5.50% 2035
7,000
6,070
MDC Holdings, Inc. 5.50% 2013
6,555
5,992
Quebecor Media Inc. 7.75% 20161
5,900
5,811
Marriott International, Inc., Series F, 4.625% 2012
1,500
1,386
Marriott International, Inc., Series G, 5.81% 2015
4,500
4,347
RBS-Zero Editora Jornalística SA 11.00% 20101
5,492
5,684
Dollarama Group LP 8.875% 20121 
5,550
5,605
Payless ShoeSource, Inc. 8.25% 2013
4,850
5,038
Fisher Communications, Inc. 8.625% 2014
4,550
4,732
WCI Communities, Inc. 9.125% 2012
3,115
2,936
WCI Communities, Inc. 7.875% 2013
1,750
1,544
Emmis Operating Co. 6.875% 2012
4,250
4,186
Radio One, Inc., Series B, 8.875% 2011
4,000
4,165
Atlantic Broadband Finance, LLC and Atlantic Broadband Finance, Inc. 9.375% 2014
4,300
4,063
Six Flags, Inc. 8.875% 2010
1,500
1,432
Six Flags, Inc. 9.75% 2013
2,845
2,628
Cablevision Systems Corp., Series B, 8.00% 2012
3,635
3,603
Sealy Mattress Co. 8.25% 2014
3,500
3,518
Walt Disney Co., Series B, 5.375% 2007
3,500
3,492
Buffets, Inc. 11.25% 2010
3,275
3,402
Morris Publishing Group, LLC and Morris Publishing Finance Co., Series B, 7.00% 2013
3,540
3,381
K. Hovnanian Enterprises, Inc. 6.25% 2015
500
441
K. Hovnanian Enterprises, Inc. 7.50% 2016
3,135
2,923
Vidéotron Ltée 6.875% 2014
2,525
2,405
Vidéotron Ltée 6.375% 2015
1,000
918
Hyatt Equities, LLC 6.875% 20071
3,250
3,270
Stoneridge, Inc. 11.50% 2012
3,383
3,265
Warner Music Group 7.375% 2014
3,300
3,218
WDAC Subsidiary Corp. 8.375% 20141 
2,600
2,568
WDAC Subsidiary Corp. 8.50% 2014
€500
636
Kingfisher PLC 5.625% 2014
£1,740
$ 3,114
Starwood Hotels & Resorts Worldwide, Inc. 7.375% 2007
$ 250
253
Starwood Hotels & Resorts Worldwide, Inc. 7.875% 2012
2,550
2,674
YUM! Brands, Inc. 7.70% 2012
2,500
2,692
Seneca Gaming Corp. 7.25% 2012
2,500
2,434
Reader’s Digest Assn., Inc. 6.50% 2011
2,500
2,425
LBI Media, Inc. 10.125% 2012
2,250
2,408
Aztar Corp. 7.875% 2014
2,250
2,391
Gaylord Entertainment Co. 8.00% 2013
2,300
2,309
Gamestop Corp 8.865% 20112
2,000
2,065
KB Home 6.25% 2015
2,000
1,788
Cooper-Standard Automotive Inc. 7.00% 2012
1,850
1,665
DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. 8.375% 2013
1,493
1,571
Riddell Bell Holdings Inc. 8.375% 2012
1,430
1,416
Hilton Hotels Corp. 8.25% 2011
1,325
1,395
Lighthouse International Co. SA 8.00% 2014
€1,000
1,353
TRW Automotive Acquisition Corp. 9.375% 2013
$ 1,075
1,148
Dillard’s, Inc. 7.13% 2018
1,000
950
Warnaco, Inc. 8.875% 2013
925
944
Standard Pacific Corp. 5.125% 2009
1,000
943
Boyd Gaming Corp. 6.75% 2014
750
715
Carmike Cinemas, Inc., Series B, 7.937% 20122 
575
576
Dex Media, Inc., Series B, 8.00% 2013
525
530
Boyds Collection, Ltd., Series B, 9.00% 20084,6 
1,501
300
Education Management Corp. 10.25% 20161
200
200
   
1,566,292
     
TELECOMMUNICATION SERVICES — 5.57%
    
Nextel Partners, Inc. 8.125% 2011
3,000
3,154
US Unwired Inc., Series B, 10.00% 2012
4,400
4,906
Nextel Communications, Inc., Series E, 6.875% 2013
105,480
106,215
Nextel Communications, Inc., Series D, 7.375% 2015
104,705
106,649
Sprint Capital Corp. 6.875% 2028
15,000
15,154
AT&T Wireless Services, Inc. 7.875% 2011
28,355
30,572
AT&T Wireless Services, Inc. 8.125% 2012
87,630
96,544
SBC Communications Inc. 5.38% 20082
9,460
9,486
SBC Communications Inc. 4.125% 2009
31,345
29,801
SBC Communications Inc. 6.25% 2011
1,150
1,163
AT&T Corp. 7.30% 20112
5,917
6,288
SBC Communications Inc. 5.10% 2014
22,745
21,135
SBC Communications Inc. 5.625% 2016
18,000
17,094
SBC Communications Inc. 6.15% 2034
18,000
16,572
SBC Communications Inc. 6.45% 2034
2,000
1,907
AT&T Inc. 6.80% 2036
3,710
3,689
Telecom Italia Capital SA, Series A, 4.00% 2008
1,270
1,219
Sogerim SA 7.25% 2011
€ 2,650
3,768
Telecom Italia SpA 6.25% 2012
18,500
25,291
Telecom Italia Capital SA, Series B, 5.25% 2013
$ 9,050
8,379
Telecom Italia Capital SA 4.95% 2014
20,000
17,934
Telecom Italia Capital SA 5.25% 2015
47,000
42,616
France Télécom 6.75% 20082
€3,500
4,679
France Télécom 7.75% 20112
$85,050
91,450
BellSouth Corp. 4.20% 2009
33,250
31,722
BellSouth Corp. 4.75% 2012
27,725
25,741
BellSouth Corp. 6.55% 2034
24,500
23,402
Verizon Wireless Capital LLC and Cellco Partnership 5.375% 2006
70,330
70,260
Telefónica Emisiones, SAU 5.984% 2011
20,000
19,948
Telefónica Emisiones, SAU 6.421% 2016
20,000
19,995
Telefónica Emisiones, SAU 7.045% 2036
29,000
29,074
Vodafone Group PLC 7.75% 2010
35,285
37,323
Koninklijke KPN NV 4.75% 2008
€6,000
7,763
Koninklijke KPN NV 8.00% 2010
$27,575
29,274
Verizon Global Funding Corp. 6.125% 2007
3,625
3,639
Verizon Global Funding Corp. 7.375% 2012
7,360
7,833
Verizon Global Funding Corp. 7.75% 2030
21,500
23,255
British Telecommunications PLC 8.375% 20102
15,000
16,483
British Telecommunications PLC 7.125% 20112
€5,500
7,871
British Telecommunications PLC 8.625% 2020
£ 900
2,013
British Telecommunications PLC 5.75% 2028
1,800
3,157
British Telecommunications PLC 8.875% 2030
$1,600
1,972
Deutsche Telekom International Finance BV 6.625% 2011
€1,200
1,684
Deutsche Telekom International Finance BV 8.125% 20122
4,420
6,652
Deutsche Telekom International Finance BV 8.25% 20302
$20,000
23,156
Triton PCS, Inc. 8.75% 2011
3,975
2,862
Triton PCS, Inc. 9.375% 2011
10,000
7,200
Triton PCS, Inc. 8.50% 2013
17,825
16,444
Dobson Cellular Systems, Inc. 8.375% 20111 
3,600
3,717
Dobson Communications Corp. 9.318% 20122 
1,650
1,671
Dobson Cellular Systems, Inc. 9.875% 2012
13,300
14,098
Dobson Communications Corp. 8.875% 2013
5,000
4,937
Intelsat, Ltd. 7.625% 2012
1,000
830
Intelsat (Bermuda), Ltd. 9.614% 20122 
4,950
5,024
Intelsat (Bermuda), Ltd. 8.25% 2013
4,675
4,663
Intelsat (Bermuda), Ltd. 8.625% 2015
4,000
4,030
Intelsat (Bermuda), Ltd. 9.25% 20161 
6,500
6,744
Intelsat (Bermuda), Ltd. 11.25% 20161 
2,400
2,472
Windstream Corp. 8.125% 20131 
5,700
5,843
Windstream Corp. 8.625% 20161
15,300
15,721
Singapore Telecommunications Ltd. 6.375% 20111 
16,250
16,556
Singapore Telecommunications Ltd. 6.375% 2011
3,475
3,541
PCCW-HKT Capital Ltd. 8.00% 20111,2
15,000
16,087
PCCW-HKT Capital No.3 Ltd. 5.25% 20151
3,600
3,192
Qwest Capital Funding, Inc. 7.75% 2006
3,595
3,613
U S WEST Capital Funding, Inc. 6.375% 2008
3,400
3,366
Qwest Capital Funding, Inc. 7.90% 2010
950
950
Qwest Capital Funding, Inc. 7.25% 2011
4,150
4,057
Qwest Capital Funding, Inc. 7.625% 2021
500
466
U S WEST Capital Funding, Inc. 6.875% 2028
4,725
4,099
Qwest Capital Funding, Inc. 7.75% 2031
2,605
2,449
American Tower Corp. 7.125% 2012
17,275
17,318
Centennial Cellular Corp. 10.75% 2008
379
387
Centennial Communications Corp. 10.74% 20132 
7,500
7,688
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC and
   
     Centennial Puerto Rico Operations Corp. 8.125% 20142
9,300
8,998
Hughes Network Systems, LLC and HNS Finance Corp. 9.50% 20141
14,300
14,086
Hawaiian Telcom Communications, Inc. 9.75% 2013
6,790
6,943
Hawaiian Telcom Communications, Inc. 10.789% 20132
3,605
3,659
Hawaiian Telcom Communications, Inc., Series B, 12.50% 2015
3,050
3,210
Embarq Corp. 6.738% 2013
10,000
9,983
Rogers Wireless Inc. 7.25% 2012
1,275
1,291
Rogers Wireless Inc. 7.50% 2015
6,925
7,029
Rogers Cantel Inc. 9.75% 2016
1,250
1,447
ALLTEL Corp. 4.656% 2007
8,675
8,613
Cincinnati Bell Inc. 7.25% 2013
6,800
6,732
MetroPCS, Inc. 12.00% 20072 
4,110
4,326
MetroPCS, Inc. 9.25% 20112
2,250
2,295
Valor Telecommunications Enterprises, LLC and Valor Telecommunications Enterprises
   
     Finance Corp. 7.75% 2015
6,090
6,318
Rural Cellular Corp. 9.75% 2010
1,750
1,752
Rural Cellular Corp. 8.25% 20121
750
773
Rural Cellular Corp. 10.899% 20121,2 
3,260
3,362
TELUS Corp. 8.00% 2011
5,250
5,691
SK Telecom Co., Ltd. 4.25% 20111 
6,000
5,565
Telekom Austria AG 3.375% 2010
€4,200
5,205
NTELOS Inc., Series B, 7.48% 20112 
$ 4,987
4,994
Millicom International Cellular SA 10.00% 2013
3,930
4,402
Intelsat PanAmSat Opco 9.00% 20161
3,550
3,621
Nordic Telephone Co. Holding ApS 8.875% 20161
1,000
1,033
   
1,359,235
     
INDUSTRIALS — 5.38%
    
Continental Airlines, Inc., Series 2001-1, Class A-2, 6.503% 2011
14,050
14,031
Continental Airlines, Inc., Series 1999-2, Class A-2, 7.056% 20113
10,000
10,210
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.487% 20123
12,500
12,819
Continental Airlines, Inc., Series 2006-1, Class G, FGIC insured, 5.564% 20152
6,500
6,500
Continental Airlines, Inc., Series 1997-1, Class A, 7.461% 20163 
10,375
10,068
Continental Airlines, Inc., Series 1996-2, Class D, 11.50% 20163
1,728
1,737
Continental Airlines, Inc., Series 2001-1, Class B, 7.373% 20173 
205
195
Continental Airlines, Inc., Series 1998-1, Class B, 6.748% 20183 
1,149
1,086
Continental Airlines, Inc., Series 1997-4B, Class B, 6.90% 20183 
2,465
2,307
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 20193 
22,363
22,251
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 20193 
46,345
46,558
Continental Airlines, Inc., Series 2000-2, Class B, 8.307% 20193
2,255
2,215
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 20203
12,405
12,293
Continental Airlines, Inc., Series 1999-1, Class B, 6.795% 20203 
15,511
14,647
Continental Airlines, Inc., Series 2003-ERJ3, Class A, 7.875% 20203 
16,997
16,583
Continental Airlines, Inc., Series 1999-2, Class A-1, 7.256% 20213 
343
352
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 20223
12,274
12,210
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.707% 20223 
12,689
13,264
Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 20223 
10,249
10,819
Continental Airlines, Inc., Series 2000-1, Class B, 8.388% 20223
1,590
1,550
Delta Air Lines, Inc. 8.00% 20071,6
4,000
1,120
Delta Air Lines, Inc., Series 2001-1, Class A-1, 6.619% 20113 
7,799
7,835
Delta Air Lines, Inc., Series 2000-1, Class A-2, 7.57% 2012
3,500
3,515
Delta Air Lines, Inc., Series 2001-1, Class A-2, 7.111% 20133
10,000
10,063
Delta Air Lines, Inc., Series 2002-1, Class C, 7.779% 20133 
3,603
3,344
Delta Air Lines, Inc., Series 2002-1, Class G-2, MBIA insured, 6.417% 20143
53,658
54,250
Delta Air Lines, Inc., Series 1992-A2, 9.20% 20143,6 
7,500
6,080
Delta Air Lines, Inc. 10.375% 20226
2,577
728
Delta Air Lines, Inc., Series 2002-1, Class G-1, MBIA insured, 6.718% 20243
47,690
48,505
General Electric Capital Corp., Series A, 5.00% 2007
21,500
21,383
General Electric Capital Corp., Series A, 5.375% 2007
13,250
13,236
General Electric Capital Corp., Series A, 7.25% 2007
£1,030
1,947
General Electric Capital Corp., Series A, 3.50% 2008
$20,000
19,286
General Electric Capital Corp., Series A, 6.00% 2012
15,000
15,191
General Electric Co. 5.00% 2013
12,750
12,229
General Electric Capital Corp., Series A, 5.00% 2016
5,000
4,702
General Electric Capital Corp., Series A, 5.223% 20162 
18,000
18,023
General Electric Capital Corp., Series A, 5.53% 20262
25,000
25,080
American Airlines, Inc., Series 1999-1, Class A-1, 6.855% 20103 
8,088
8,175
AMR Corp., Series B, 10.45% 2011
150
142
American Airlines, Inc., Series 2001-2, Class A-1, 6.978% 20123 
27,116
27,647
American Airlines, Inc., Series 2001-2, Class B, 8.608% 2012
17,915
18,630
AMR Corp. 9.00% 2012
5,500
5,459
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 20133
36,430
38,639
American Airlines, Inc., Series 1991-C2, 9.73% 20143
6,410
5,965
AMR Corp. 9.00% 2016
300
294
American Airlines, Inc., Series 2001-1, Class B, 7.377% 20193
10,291
9,422
BAE Systems Holding Inc. 4.75% 20101
10,350
9,926
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class B, 7.156% 20111,3
44,910
46,054
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class G, MBIA insured, 6.664% 20131,3 
42,863
44,163
Hutchison Whampoa International Ltd. 7.00% 20111 
24,300
25,264
Hutchison Whampoa International Ltd. 6.50% 20131
59,200
60,021
Cendant Corp. 6.875% 2006
2,000
2,002
Cendant Corp. 6.25% 2008
29,000
29,271
Cendant Corp. 7.375% 2013
32,500
35,605
Cendant Corp. 7.125% 2015
5,710
6,296
Qantas Airways Ltd. 6.05% 20161
55,580
53,921
Tyco International Group SA 6.125% 2008
13,000
13,085
Tyco International Group SA 6.125% 2009
500
504
Tyco International Group SA 6.375% 2011
16,000
16,344
Tyco International Group SA 6.00% 2013
7,200
7,144
Burlington Northern and Santa Fe Railway Co. Pass Through Trust, Series 1996-B, 6.96% 20093 
1,574
1,603
Burlington Northern and Santa Fe Railway Co. Pass Through Trust, Series 2002-2, 5.14% 20213 
12,380
11,742
Burlington Northern and Santa Fe Railway Co. Pass Through Trust, Series 2002-1, 5.943% 20223 
6,399
6,417
BNSF Funding Trust I 6.613% 20552
13,600
12,810
Caterpillar Financial Services Corp., Series F, 2.35% 2006
5,000
4,969
Caterpillar Financial Services Corp. 2.70% 2008
845
797
Caterpillar Inc. 4.50% 2009
9,690
9,404
Caterpillar Financial Services Corp. 4.30% 2010
9,400
8,948
Caterpillar Inc. 5.30% 2035
1,300
1,163
Southwest Airlines Co., Series 2001-1, Class B, 6.126% 20063 
7,500
7,514
Southwest Airlines Co., Series 2001-1, Class A-2, 5.496% 20083
5,000
5,005
Southwest Airlines Co. 5.25% 2014
12,500
11,786
Union Pacific Railroad Co. Pass Through Trust, Series 2001-1, 6.63% 20223 
7,816
8,174
Union Pacific Railroad Co. Pass Through Trust, Series 2002-1, 6.061% 20233 
11,347
11,572
Union Pacific Railroad Co. Pass Through Trust, Series 2003-1, 4.698% 20243 
2,954
2,711
United Air Lines, Inc., Series 2001-1, Class A-2, 6.201% 20103 
3,233
3,235
United Air Lines, Inc., Series 2000-2, Class B, 7.811% 20113
4,418
4,608
United Air Lines, Inc., Series B, 8.986% 20122
9,200
9,327
United Air Lines, Inc., Series 2001-1, Class A-1, 6.071% 20143 
2,472
2,468
United Air Lines, Inc., Series 2001-1, Class A-3, 6.602% 20153
2,773
2,784
NTK Holdings Inc. 0%/10.75% 20145
15,118
11,017
THL Buildco, Inc. 8.50% 2014
10,650
10,357
Bombardier Inc. 6.30% 20141
19,800
17,325
Allied Waste North America, Inc. 8.50% 2008
7,500
7,800
Allied Waste North America, Inc., Series B, 6.50% 2010
500
485
Allied Waste North America, Inc., Series B, 5.75% 2011
2,500
2,344
Allied Waste North America, Inc., Series B, 6.125% 2014
3,000
2,715
Allied Waste North America, Inc., Series B, 7.375% 2014
3,750
3,581
Northwest Airlines, Inc. 9.875% 20076 
6,000
3,060
Northwest Airlines, Inc. 10.00% 20096
4,000
1,950
Northwest Airlines, Inc., Series 2001-1, Class A-2, 6.841% 2012
9,955
9,911
Northwest Airlines, Inc., Series 2001-1, Class A-1, 7.041% 20233
1,871
1,867
John Deere Capital Corp., Series D, 4.375% 2008
15,000
14,695
Holcim Finance (Luxembourg) SA 4.375% 2014
€8,860
11,007
Northrop Grumman Corp. 4.079% 2006
$2,000
1,989
Northrop Grumman Systems Corp. 7.125% 2011
8,000
8,427
Raytheon Co. 6.55% 2010
6,000
6,145
Raytheon Co. 8.30% 2010
3,000
3,242
Goodman Global Holdings, Inc., Series B, 7.875% 2012
8,795
8,443
DynCorp International and DIV Capital Corp., Series A, 9.50% 2013
7,530
7,869
United Rentals (North America), Inc., Series B, 6.50% 2012
7,150
6,793
United Rentals (North America), Inc. 7.75% 2013
900
860
Lockheed Martin Corp. 8.50% 2029
6,000
7,573
Horizon Lines, LLC and Horizon Lines Holding Corp. 9.00% 2012
7,071
7,212
TFM, SA de CV 9.375% 2012
4,450
4,762
TFM, SA de CV 12.50% 2012
2,145
2,376
AIR 2 US, Series A, 8.027% 20201,3 
6,879
6,900
Accuride Corp. 8.50% 2015
6,525
6,297
Southern Capital Corp. Pass Through Trust, Series 2002-1, Class G, MBIA insured, 5.70% 20231,3 
6,446
6,285
Jacuzzi Brands, Inc. 9.625% 2010
5,765
6,118
Waste Management, Inc. 6.50% 2008
5,220
5,304
Waste Management, Inc. 5.00% 2014
765
716
Standard Aero Holdings, Inc. 8.25% 2014
6,550
5,862
General Dynamics Corp. 4.50% 2010
5,000
4,803
K&F Industries, Inc. 7.75% 2014
4,275
4,232
CCMG Acquisition Corp. 8.875% 20141
1,250
1,288
CCMG Acquisition Corp. 10.50% 20161 
2,250
2,396
American Standard Inc. 7.625% 2010
3,500
3,657
Ashtead Group PLC 8.625% 20151
3,525
3,578
Quebecor World Inc. 8.75% 20161
3,755
3,445
Williams Scotsman, Inc. 8.50% 2015
2,900
2,878
ACIH, Inc. 0%/11.50% 20121,5 
3,390
2,712
DRS Technologies, Inc. 6.875% 2013
625
605
DRS Technologies, Inc. 7.625% 2018
2,000
2,000
FTI Consulting, Inc. 7.625% 2013
2,300
2,340
Terex Corp. 9.25% 2011
375
400
Terex Corp., Class B, 10.375% 2011
1,817
1,931
Argo-Tech Corp. 9.25% 2011
1,795
1,858
Kansas City Southern Railway Co. 9.50% 2008
1,500
1,579
UCAR Finance Inc. 10.25% 2012
1,385
1,468
Ahern Rentals, Inc. 9.25% 2013
950
964
Gol Finance 8.75% (undated)1
1,100
963
AGCO Corp. 6.875% 2014
€700
917
TransDign Inc., 7.75% 20141
$ 350
350
Jet Equipment Trust, Series 1994-A, 11.79% 20131,6 
4,000
—
Jet Equipment Trust, Series 1995-B, 10.91% 20141,6 
5,000
—
Jet Equipment Trust, Series 1995-D, 11.44% 20141,6 
2,500
—
   
1,314,873
     
ENERGY — 2.72%
    
Ras Laffan Liquefied Natural Gas Co. Ltd. 3.437% 20091,3 
35,769
34,363
Ras Laffan Liquefied Natural Gas Co. Ltd. 3.437% 20093 
1,974
1,896
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20141,3 
15,570
17,119
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 20143 
1,000
1,099
Ras Laffan Liquefied Natural Gas II 5.298% 20201,3 
45,970
42,939
Ras Laffan Liquefied Natural Gas III 5.838% 20271,3
15,000
14,007
Energy Transfer Partners, LP 5.65% 2012
21,770
21,036
Energy Transfer Partners, LP 5.95% 2015
61,670
59,484
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 20141,3 
59,400
57,692
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 20143
6,000
5,828
Enterprise Products Operating LP, Series B, 4.625% 2009
8,000
7,670
Enterprise Products Operating LP 4.95% 2010
8,000
7,674
Enterprise Products Operating LP 7.50% 2011
8,000
8,403
Enterprise Products Operating LP, Series B, 6.375% 2013
17,000
17,006
Enterprise Products Partners LP, Series B, 5.60% 2014
4,355
4,129
Enterprise Products Operating LP, Series B, 5.00% 2015
8,645
7,820
Pemex Finance Ltd. 8.875% 20103
24,000
26,063
Pemex Project Funding Master Trust 5.75% 20151
10,000
9,223
Pemex Finance Ltd., Series 1999-2, Class A-3, 10.61% 20173 
11,700
14,693
Pemex Project Funding Master Trust 8.625% 2022
750
840
Qatar Petroleum 5.579% 20111
38,400
38,223
Petroleum Export Ltd., Class A-1, MBIA insured, 4.623% 20101,3 
30,667
30,005
Petroleum Export Ltd., Class A-2, XLCA insured, 4.633% 20101,3 
5,778
5,653
Apache Corp. 6.25% 2012
28,000
28,708
Williams Companies, Inc. 6.375% 20101 
1,500
1,470
Williams Companies, Inc. 6.99% 20101,2 
2,500
2,544
Williams Companies, Inc. 7.125% 2011
500
503
Williams Partners LP 7.50% 20111
5,725
5,768
Williams Companies, Inc. 7.875% 2021
2,000
2,040
Williams Companies, Inc. 8.75% 2032
5,080
5,550
Delek & Avner-Yam Tethys Ltd. 5.326% 20131,3 
17,206
16,723
Kinder Morgan Energy Partners LP 6.75% 2011
2,500
2,556
Kinder Mogan Energy Partners LP 5.00% 2013
2,708
2,486
Kinder Morgan Energy Partners LP 5.125% 2014
12,292
11,240
Gulfstream Natural Gas System LLC 5.56% 20151 
5,000
4,815
Gulfstream Natural Gas System LLC 6.19% 20251
11,610
11,248
Premcor Refining Group Inc. 9.25% 2010
3,250
3,460
Premcor Refining Group Inc. 6.125% 2011
5,000
5,023
Premcor Refining Group Inc. 6.75% 2011
1,000
1,026
Premcor Refining Group Inc. 9.50% 2013
2,750
3,008
Premcor Refining Group Inc. 6.75% 2014
3,000
3,034
Sunoco, Inc. 4.875% 2014
14,830
13,630
El Paso Corp. 6.375% 20091
200
198
El Paso Energy Corp. 7.75% 20101 
500
510
Sonat Inc. 7.625% 2011
400
406
El Paso Energy Corp. 7.375% 2012
4,310
4,299
El Paso Corp. 7.875% 2012
1,625
1,662
El Paso Natural Gas Co. 7.50% 2026
250
246
Southern Natural Gas Co. 7.35% 2031
1,450
1,399
El Paso Corp. 7.75% 2032
4,000
3,915
Southern Natural Gas Co. 8.00% 2032
830
862
Pogo Producing Co. 7.875% 20131
6,725
6,775
Pogo Producing Co. 6.625% 2015
300
279
Pogo Producing Co. 6.875% 2017
6,850
6,379
Reliance Industries Ltd. 10.25% 20971 
8,750
11,616
Devon Financing Corp., ULC 6.875% 2011
8,500
8,847
Open Joint Stock Co. Gazprom 9.125% 2007
2,000
2,050
Gaz Capital SA 5.875% 2015
€5,125
6,659
Newfield Exploration Co. 7.625% 2011
$3,000
3,053
Newfield Exploration Co. 6.625% 2014
2,000
1,915
Newfield Exploration Co. 6.625% 2016
3,775
3,577
Drummond Co., Inc. 7.375% 20161 
7,375
6,877
OXYMAR 7.50% 20161,3
5,500
5,763
Teekay Shipping Corp. 8.875% 2011
5,175
5,447
Ultrapetrol (Bahamas) Ltd., First Preferred Ship Mortgage Notes, 9.00% 2014
5,225
4,742
American Commercial Lines LLC and ACL Finance Corp. 9.50% 2015
3,928
4,321
XTO Energy Inc. 5.65% 2016
4,250
4,037
Encore Acquisition Co. 6.00% 2015
4,450
4,027
PETRONAS Capital Ltd. 7.00% 20121 
2,250
2,362
Overseas Shipholding Group, Inc. 8.25% 2013
1,575
1,642
International Coal Group, Inc. 10.25% 20141
1,500
1,506
Peabody Energy Corp., Series B, 6.875% 2013
1,200
1,185
Petrozuata Finance, Inc., Series B, 8.22% 20171,3 
250
236
   
664,489
     
UTILITIES — 2.58%
    
PECO Energy Co., First and Refunding Mortgage Bonds, 3.50% 2008
5,000
4,812
Commonwealth Edison Co., Series 99, 3.70% 2008
7,125
6,904
Commonwealth Edison Co., First Mortgage Bonds, Series 102, 4.74% 2010
12,500
12,019
Exelon Corp. 6.75% 2011
2,200
2,276
Exelon Generation Co., LLC 6.95% 2011
22,975
23,980
PECO Energy Co., First and Refunding Mortgage Bonds, 4.75% 2012
3,900
3,672
Commonwealth Edison Co., First Mortgage Bonds, Series 103, 5.90% 2036
4,000
3,698
Edison Mission Energy 7.73% 2009
10,125
10,277
Southern California Edison Co., First and Refunding Mortgage Bonds, Series 2005-A, 5.00% 2016
4,000
3,728
Edison Mission Energy 7.75% 20161
6,025
5,950
Midwest Generation, LLC, Series B, 8.56% 20163 
7,120
7,480
Homer City Funding LLC 8.734% 20263
11,014
12,281
Midwest Generation, LLC and Midwest Finance Corp. 8.75% 2034
7,600
8,094
PSEG Power LLC 3.75% 2009
6,825
6,471
PSEG Power LLC 7.75% 2011
18,700
20,035
PSEG Power LLC 5.00% 2014
11,690
10,800
MidAmerican Energy Co. 5.125% 2013
7,500
7,215
MidAmerican Energy Co. 4.65% 2014
5,000
4,577
MidAmerican Energy Holdings Co., Series D, 5.00% 2014
8,500
7,955
MidAmerican Energy Holdings Co. 6.125% 20361
17,750
16,647
Ameren Corp. 4.263% 2007
2,500
2,467
Cilcorp Inc. 8.70% 2009
1,000
1,079
Union Electric Co. 5.25% 2012
1,490
1,443
Union Electric Co. 4.65% 2013
11,000
10,190
Union Electric Co. 5.40% 2016
5,750
5,476
Cilcorp Inc. 9.375% 2029
12,265
15,544
Dominion Resources, Inc., Series A, 3.66% 2006
3,000
2,978
Virginia Electric and Power Co., Series 2002-A, 5.375% 2007
14,140
14,104
Dominion Resources, Inc., Series 2002-C, 5.70% 20122
1,000
980
Dominion Resources, Inc., Series 2002-B, 6.25% 2012
10,000
10,082
Virginia Electric and Power Co., Series 2003-A, 4.75% 2013
6,000
5,573
Israel Electric Corp. Ltd. 7.95% 20111 
10,000
10,753
Israel Electric Corp. Ltd. 7.70% 20181 
8,500
9,075
Israel Electric Corp. Ltd. 8.10% 20961
12,000
12,664
Ohio Power Co., Series J, 5.30% 2010
8,000
7,832
Ohio Power Co., Series H, 4.85% 2014
5,965
5,543
Appalachian Power Co., Series I, 4.95% 2015
1,000
917
Ohio Power Co., Series K, 6.00% 2016
15,000
14,819
Constellation Energy Group, Inc. 6.125% 2009
10,500
10,577
Constellation Energy Group, Inc. 7.00% 2012
15,000
15,654
Baltimore Gas and Electric Co. 5.20% 2033
3,000
2,516
PacifiCorp, First Mortgage Bonds, 4.30% 2008
3,060
2,978
PacifiCorp, First Mortgage Bonds, 5.45% 2013
2,875
2,806
Scottish Power PLC 5.375% 2015
21,415
20,358
Duke Energy Corp., First and Refunding Mortgage Bonds, 4.50% 2010
4,500
4,317
Duke Capital Corp. 6.25% 2013
9,000
9,099
Duke Capital Corp. 5.50% 2014
10,000
9,636
Duke Capital LLC 5.668% 2014
2,000
1,936
Southern California Gas Co., First Mortgage Bonds, Series II, 4.375% 2011
5,000
4,742
San Diego Gas & Electric Co., Series CCC, 5.30% 2015
10,000
9,583
San Diego Gas & Electric Co., Series DDD, 6.00% 2026
5,000
4,929
Niagara Mohawk Power Corp., Series G, 7.75% 2008
17,460
18,178
SP PowerAssets Ltd. 3.80% 20081
10,000
9,581
SP PowerAssets Ltd. 5.00% 20131 
8,000
7,542
AES Corp. 9.50% 2009
4,677
4,981
AES Corp. 9.375% 2010
4,803
5,163
AES Corp. 8.75% 20131
1,000
1,075
AES Gener SA 7.50% 2014
5,000
5,026
Veolia Environnement 4.875% 2013
€10,860
14,051
Empresa Nacional de Electricidad SA, Series B, 8.50% 2009
$ 4,455
4,706
Empresa Nacional de Electricidad SA 8.35% 2013
5,000
5,391
Empresa Nacional de Electricidad SA 8.625% 2015
3,000
3,308
Old Dominion Electric Cooperative, Series 2003-A, 5.676% 20283
12,937
12,529
Consolidated Edison Co. of New York, Inc., Series 2003-A, 3.625% 2008
6,000
5,767
Consolidated Edison Co. of New York, Inc., Series B, 3.85% 2013
5,000
4,445
Consolidated Edison Co. of New York, Inc., Series 2003-C, 5.10% 2033
2,000
1,678
Progress Energy Florida, Inc., First Mortgage Bonds, 4.80% 2013
7,000
6,587
Carolina Power & Light Co. d/b/a Progress Energy Carolinas, Inc., First Mortgage Bonds, 5.125% 2013
5,000
4,777
Oncor Electric Delivery Co. 6.375% 2012
10,700
10,813
Pacific Gas and Electric Co., First Mortgage Bonds, 4.20% 2011
7,000
6,553
Pacific Gas and Electric Co., First Mortgage Bonds, 6.05% 2034
4,000
3,788
Reliant Energy Resources Corp. 7.75% 2011
7,000
7,491
Centerpoint Energy Resources Corp., Series B, 7.875% 2013
2,000
2,177
Kern River Funding Corp. 4.893% 20181,3 
9,460
8,921
Nevada Power Co., General and Refunding Mortgage Notes, Series I, 6.50% 2012
700
700
Nevada Power Co., General and Refunding Mortgage Notes, Series G, 9.00% 2013
2,811
3,056
Sierra Pacific Resources 8.625% 2014
900
958
Nevada Power Co., General and Refunding Mortgage Notes, Series L, 5.875% 2015
2,550
2,431
Nevada Power Co., Series M, 5.95% 20161
1,000
953
Anglian Water Services Financing PLC 4.625% 2013
€6,120
7,876
Energy East Corp. 6.75% 2012
$7,155
7,404
NiSource Finance Corp. 6.15% 2013
5,600
5,626
NGG Finance PLC 6.125% 2011
€3,480
4,795
Korea East-West Power Co., Ltd. 4.875% 20111 
$ 5,000
4,774
Florida Power & Light Co. 4.85% 2013
5,000
4,753
Alabama Power Co., Series R, 4.70% 2010
2,250
2,163
Southern Power Co., Series B, 6.25% 2012
2,500
2,523
FPL Energy National Wind, LLC 5.608% 20241,3
4,752
4,562
Tri-State Generation and Transmission Assn. Inc., Pass Through Trust, Series 2003-A, 6.04% 20181,3 
 3,500 3,435
Enersis SA 7.375% 2014
3,000
3,042
Equitable Resources, Inc. 5.15% 2018
2,500
2,307
Wisconsin Gas Co. 5.20% 2015
2,025
1,901
Mirant Americas Generation, Inc. 8.30% 2011
1,300
1,290
NRG Energy, Inc. 7.375% 2016
1,000
977
   
629,575
     
MATERIALS — 1.93%
    
Norske Skogindustrier ASA 7.625% 20111 
47,135
47,657
Norske Skogindustrier ASA 6.125% 20151 
4,000
3,584
Norske Skogindustrier ASA 7.125% 20331
4,100
3,534
International Paper Co. 5.375% 2006
€4,500
5,761
International Paper Co. 4.00% 2010
6,545
6,129
International Paper Co. 6.75% 2011
4,000
4,137
International Paper Co. 5.85% 2012
34,815
34,322
Stora Enso Oyj 5.125% 2014
€4,250
5,427
Stora Enso Oyj 6.404% 20161 
$28,040
27,226
Stora Enso Oyj 7.25% 20361
17,650
17,281
UPM-Kymmene Corp. 5.625% 20141
39,320
37,204
Weyerhaeuser Co. 5.95% 2008
3,000
3,004
Weyerhaeuser Co. 6.75% 2012
9,330
9,543
Weyerhaeuser Co. 7.375% 2032
14,750
14,976
Equistar Chemicals, LP 10.125% 2008
6,100
6,451
Equistar Chemicals, LP and Equistar Funding Corp. 8.75% 2009
12,800
13,280
Scotia Pacific Co. LLC, Series B, Class A-2, 7.11% 20283 
21,160
17,055
JSG Funding PLC 7.75% 2015
€2,000
2,396
JSG Funding PLC 7.75% 2015
$2,200
2,002
JSG Holdings PLC 11.50% 20157
€9,760
12,417
Stone Container Corp. 9.75% 2011
$ 2,793
2,884
Jefferson Smurfit Corp. (U.S.) 8.25% 2012
10,775
10,155
Stone Container Corp. 8.375% 2012
1,675
1,591
Jefferson Smurfit Corp. (U.S.) 7.50% 2013
250
225
Dow Chemical Co. 5.75% 2008
11,100
11,133
Dow Chemical Co. 6.00% 2012
2,400
2,421
Cytec Industries Inc. 6.00% 2015
12,885
12,257
Owens-Illinois, Inc. 8.10% 2007
3,130
3,161
Owens-Illinois, Inc. 7.35% 2008
5,250
5,316
Owens-Brockway Glass Container Inc. 8.875% 2009
1,500
1,553
Owens-Illinois, Inc. 7.50% 2010
2,250
2,211
Associated Materials Inc. 9.75% 2012
9,765
9,765
AMH Holdings, Inc. 0%/11.25% 20145 
3,000
1,822
BHP Finance (USA) Ltd. 8.50% 2012
10,000
11,418
Abitibi-Consolidated Co. of Canada 8.375% 2015
12,225
11,216
Building Materials Corp. of America, Series B, 8.00% 2007
1,000
1,010
Building Materials Corp. of America 8.00% 2008
1,975
2,000
Building Materials Corp. of America 7.75% 2014
8,250
7,920
Georgia-Pacific Corp. 7.449% 20122
2,985
2,989
Georgia-Pacific Corp. 8.30% 20132 
7,000
7,070
Graphic Packaging International, Inc. 8.50% 2011
3,325
3,333
Graphic Packaging International, Inc. 9.50% 2013
6,495
6,463
Rhodia 7.625% 2010
250
249
Rhodia SA 8.00% 2010
€2,100
2,797
Rhodia 10.25% 2010
$ 97
104
Rhodia 8.875% 2011
1,931
1,933
Rhodia SA 9.25% 2011
€2,511
3,352
Alcan Inc. 5.20% 2014
$8,000
7,591
Plastipak Holdings, Inc. 8.50% 20151
6,690
6,723
Boise Cascade, LLC and Boise Cascade Finance Corp. 7.125% 2014
6,800
6,052
Nalco Co. 7.75% 2011
775
777
Nalco Co. 8.875% 2013
3,200
3,240
Nalco Finance Holdings LLC and Nalco Finance Holdings Inc. 0%/9.00% 20145
1,254
947
Praxair, Inc. 2.75% 2008
5,000
4,730
Teck Cominco Ltd. 5.375% 2015
5,000
4,665
Domtar Inc. 7.125% 2015
4,475
3,916
Earle M. Jorgensen Co. 9.75% 2012
3,600
3,852
Ainsworth Lumber Co. Ltd. 7.25% 2012
700
577
Ainsworth Lumber Co. Ltd. 6.75% 2014
1,750
1,339
Ainsworth Lumber Co. Ltd. 6.75% 2014
1,750
1,339
Arbermarle Corp. 5.10% 2015
3,156
2,905
Crompton Corp. 9.875% 2012
500
565
Chemtura Corp. 6.875% 2016
2,400
2,331
Neenah Paper, Inc. 7.375% 2014
2,640
2,442
ICI Wilmington, Inc. 4.375% 2008
200
193
ICI Wilmington, Inc. 5.625% 2013
2,000
1,921
Crystal US Holdings 3 LLC and Crystal US Sub 3 Corp., Series B, 0%/10.50% 20145 
1,928
1,518
BCP Caylux Holdings Luxembourg SCA 9.625% 2014
535
583
AEP Industries Inc. 7.875% 2013
1,875
1,889
Rockwood Specialties Group, Inc. 10.625% 2011
218
234
Rockwood Specialties Group, Inc. 7.50% 2014
1,675
1,650
Covalence Specialty Materials Corp. 10.25% 20161 
1,750
1,689
Packaging Corp. of America 4.375% 2008
1,500
1,457
Freeport-McMoRan Copper & Gold Inc. 6.875% 2014
1,500
1,451
E.I. du Pont de Nemours and Co. 4.125% 2010
1,500
1,423
Huntsman LLC 12.318% 20112
275
287
Huntsman LLC 11.50% 2012
712
799
AK Steel Corp. 7.75% 2012
1,000
985
Foundation PA Coal Co. 7.25% 2014
975
955
Koppers Inc. 9.875% 2013
495
533
Airgas, Inc. 6.25% 2014
550
517
Ispat Inland ULC 9.75% 2014
206
227
   
472,036
     
HEALTH CARE — 1.44%
    
Humana Inc. 7.25% 2006
5,000
5,003
Humana Inc. 6.45% 2016
25,375
25,163
Humana Inc. 6.30% 2018
17,000
16,600
Wyeth 4.375% 20082
6,375
6,248
Wyeth 5.50% 2016
36,165
34,590
UnitedHealth Group Inc. 5.20% 2007
8,000
7,981
UnitedHealth Group Inc. 3.30% 2008
4,000
3,853
UnitedHealth Group Inc. 4.125% 2009
8,000
7,651
UnitedHealth Group Inc. 5.375% 2016
19,500
18,481
Cardinal Health, Inc. 6.25% 2008
3,000
3,022
Cardinal Health, Inc. 6.75% 2011
12,625
12,957
Cardinal Health, Inc. 5.85% 2017
12,000
11,465
Allegiance Corp. 7.00% 2026
9,260
9,456
Aetna Inc. 5.75% 2011
24,000
23,857
Amgen Inc. 4.00% 2009
24,000
22,831
Tenet Healthcare Corp. 7.375% 2013
3,050
2,798
Tenet Healthcare Corp. 9.875% 2014
12,450
12,512
Tenet Healthcare Corp. 9.25% 20151
6,475
6,378
Boston Scientific Corp. 6.00% 2011
1,700
1,679
Boston Scientific Corp. 6.40% 2016
15,000
14,639
Columbia/HCA Healthcare Corp. 8.85% 2007
2,000
2,032
Columbia/HCA Healthcare Corp. 8.70% 2010
1,750
1,840
HCA Inc. 6.95% 2012
2,000
1,962
HCA Inc. 6.25% 2013
2,500
2,347
Columbia/HCA Healthcare Corp. 7.69% 2025
5,750
5,462
WellPoint, Inc. 5.00% 2011
6,500
6,267
WellPoint, Inc. 5.25% 2016
6,455
6,061
Warner Chilcott Corp. 8.75% 2015
11,815
12,229
Hospira, Inc. 4.95% 2009
7,391
7,221
Hospira, Inc. 5.90% 2014
4,100
4,025
HealthSouth Corp. 11.418% 20141,2
3,650
3,659
HealthSouth Corp. 10.75% 20161
7,500
7,387
Universal Health Services, Inc. 7.125% 2016
9,890
9,953
Accellent Inc. 10.50% 2013
9,525
9,787
Bristol-Myers Squibb Co. 4.00% 2008
10,000
9,680
Concentra Operating Corp. 9.50% 2010
3,020
3,141
Concentra Operating Corp. 9.125% 2012
3,835
3,988
AMR HoldCo, Inc. and EmCare HoldCo, Inc. 10.00% 2015
2,000
2,105
Mylan Laboratories Inc. 5.75% 2010
2,025
1,939
Team Finance LLC and Health Finance Corp. 11.25% 2013
1,575
1,654
MedCath Holdings Corp. 9.875% 2012
1,000
1,037
   
350,940
     
INFORMATION TECHNOLOGY — 0.98%
    
Electronic Data Systems Corp. 6.334% 2006
18,000
18,012
Electronic Data Systems Corp., Series B, 6.50% 20132
55,575
54,902
Electronic Data Systems Corp. 7.45% 2029
17,790
18,378
Cisco Systems, Inc. 5.25% 2011
45,750
44,947
Sabre Holdings Corp. 6.35% 2016
18,085
16,945
Motorola, Inc. 8.00% 2011
4,750
5,214
Motorola, Inc. 5.22% 2097
14,250
10,749
Celestica Inc. 7.875% 2011
11,130
10,991
Celestica Inc. 7.625% 2013
4,170
4,066
Sanmina-SCI Corp. 6.75% 2013
12,750
11,953
SunGard Data Systems Inc. 9.125% 20131 
8,175
8,522
SunGard Data Systems Inc. 10.25% 20151
2,000
2,077
Hyundai Semiconductor America, Inc. 8.625% 20071 
10,150
10,257
Nortel Networks Ltd. 9.758% 20111,2 
2,500
2,556
Nortel Networks Ltd. 10.125% 20131 
2,225
2,275
Nortel Networks Lts. 10.75% 20161 
1,150
1,176
Sensata Technologies BV 8.00% 20141
5,100
4,947
Jabil Circuit, Inc. 5.875% 2010
4,750
4,715
Solectron Global Finance Ltd 8.00% 20161 
4,000
3,960
Iron Mountain Inc. 7.75% 2015
2,010
1,930
Flextronics International Ltd. 6.50% 2013
925
883
Freescale Semiconductor, Inc. 6.875% 2011
750
758
Serena Software, Inc. 10.375% 20161
180
181
Exodus Communications, Inc. 11.625% 20104,6 
1,132
—
   
240,394
     
CONSUMER STAPLES — 0.88%
    
CVS Corp. 6.117% 20131,3 
25,984
25,811
CVS Corp. 5.789% 20261,3 
9,870
9,299
Tyson Foods, Inc. 6.60% 2016
32,265
31,594
Rite Aid Corp. 6.125% 20081 
2,750
2,674
Rite Aid Corp. 9.50% 2011
4,500
4,691
Rite Aid Corp. 6.875% 2013
5,485
4,772
Rite Aid Corp. 9.25% 2013
2,575
2,485
Rite Aid Corp. 7.50% 2015
1,000
965
H.J. Heinz Co. 6.428% 20201
14,320
14,557
Wal-Mart Stores, Inc. 5.45% 2006
10,000
9,999
Diageo Capital PLC 3.50% 2007
5,000
4,853
Diageo Capital PLC 4.375% 2010
2,395
2,279
Grand Metropolitan Investment Corp. 7.45% 2035
2,290
2,613
Nabisco, Inc. 7.05% 2007
6,500
6,552
Kraft Foods Inc. 6.50% 2031
2,600
2,604
Vitamin Shoppe Industries, Inc. 12.67% 20121,2 
7,740
7,953
Jean Coutu Group (PJC) Inc. 7.625% 2012
800
780
Jean Coutu Group (PJC) Inc. 8.50% 2014
7,400
6,845
Dole Food Co., Inc. 7.25% 2010
1,350
1,215
Dole Food Co., Inc. 8.875% 2011
6,685
6,301
Gold Kist Inc. 10.25% 2014
6,783
7,105
SUPERVALU INC. 7.50% 2012
3,390
3,357
Albertson’s, Inc. 7.45% 2029
3,000
2,592
Albertson’s, Inc. 8.00% 2031
1,000
906
Petro Stopping Centers, LP and Petro Financial Corp. 9.00% 2012
6,560
6,544
Stater Bros. Holdings Inc. 8.829% 20102
475
483
Stater Bros. Holdings Inc. 8.125% 2012
5,360
5,320
Cadbury Schweppes Investments PLC, Series 41, 4.25% 2009
€4,250
5,447
Pathmark Stores, Inc. 8.75% 2012
$ 5,565
5,315
Molson Coors Capital Finance ULC 4.85% 2010
5,000
4,818
Ahold Lease Pass Through Trust, Series 2001-A-1, 7.82% 20203
524
534
Ahold Lease Pass Through Trust, Series 2001-A-2, 8.62% 20253
4,070
4,042
Delhaize America, Inc. 8.125% 2011
3,500
3,698
Winn-Dixie Stores, Inc. 8.875% 20086
2,300
2,001
Winn-Dixie Pass Through Trust, Series 1999-1, Class A-1, 6.30% 20171,3,6
1,345
1,090
Spectrum Brands, Inc. 7.375% 2015
3,500
2,861
Kellogg Co. 7.45% 2031
2,310
2,629
Playtex Products, Inc. 9.375% 2011
2,375
2,485
Elizabeth Arden, Inc. 7.75% 2014
1,780
1,758
WH Holdings (Cayman Islands) Ltd. and WH Capital Corp. 9.50% 2011
1,500
1,650
   
213,477
     
MORTGAGE-BACKED OBLIGATIONS3— 20.83%
    
Fannie Mae 7.00% 2009
69
69
Fannie Mae 7.50% 2009
121
122
Fannie Mae 7.50% 2009
113
115
Fannie Mae 7.50% 2009
28
28
Fannie Mae 7.50% 2009
24
24
Fannie Mae 7.50% 2009
19
19
Fannie Mae 7.50% 2009
19
19
Fannie Mae 8.50% 2009
61
62
Fannie Mae 9.50% 2009
25
26
Fannie Mae 7.00% 2010
59
60
Fannie Mae, Series 2000-T5B, 7.30% 2010
57,100
60,672
Fannie Mae, Series 2001-T6B, 6.088% 2011
48,000
48,958
Fannie Mae, Series 2003-T1, Class B, 4.491% 2012
46,225
43,545
Fannie Mae 4.89% 2012
25,000
23,942
Fannie Mae 4.00% 2015
31,982
29,771
Fannie Mae 7.00% 2016
287
292
Fannie Mae 11.50% 2016
631
704
Fannie Mae 5.00% 2018
24,900
24,076
Fannie Mae 5.00% 2018
17,372
16,797
Fannie Mae 5.00% 2018
9,573
9,256
Fannie Mae 5.50% 2018
3,167
3,114
Fannie Mae 9.00% 2018
43
46
Fannie Mae 10.00% 2018
459
505
Fannie Mae 5.50% 2019
32,962
32,410
Fannie Mae 5.50% 2019
12,725
12,498
Fannie Mae 12.00% 2019
565
639
Fannie Mae 4.50% 2020
7,268
6,872
Fannie Mae, Series 90-93, Class G, 5.50% 2020
44
43
Fannie Mae 11.00% 2020
192
213
Fannie Mae 11.265% 20202
548
617
Fannie Mae 6.00% 2021
11,205
11,242
Fannie Mae 9.00% 2022
186
196
Fannie Mae 7.50% 2023
131
137
Fannie Mae, Series 2001-4, Class GA, 10.269% 20252 
926
1,021
Fannie Mae, Series 2001-4, Class NA, 11.90% 20252
4,684
5,181
Fannie Mae 5.758% 20262
907
920
Fannie Mae 7.00% 2026
1,606
1,658
Fannie Mae 8.50% 2027
17
19
Fannie Mae, Series 1998-W5, Class B3, 6.50% 2028
2,835
2,720
Fannie Mae 7.00% 2028
957
982
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2028
6,496
6,671
Fannie Mae 6.50% 2029
313
312
Fannie Mae, Series 2002-W7, Class A-5, 7.50% 2029
988
1,016
Fannie Mae 7.50% 2029
78
81
Fannie Mae 7.50% 2029
77
80
Fannie Mae 7.00% 2030
223
228
Fannie Mae 7.50% 2030
255
265
Fannie Mae 7.00% 2031
387
397
Fannie Mae 7.50% 2031
627
649
Fannie Mae 7.50% 2031
72
74
Fannie Mae, Series 2001-20, Class E, 9.615% 20312 
164
180
Fannie Mae, Series 2001-20, Class C, 12.009% 20312 
207
231
Fannie Mae 6.00% 2032
1,207
1,194
Fannie Mae 7.00% 2032
295
302
Fannie Mae 3.75% 20332 
3,651
3,552
Fannie Mae 5.50% 2033
77,465
74,673
Fannie Mae 6.00% 2034
3,104
3,062
Fannie Mae 6.00% 2034
2,631
2,595
Fannie Mae 6.00% 2034
2,073
2,045
Fannie Mae 6.00% 2034
1,994
1,967
Fannie Mae 6.00% 2034
604
596
Fannie Mae 6.00% 2034
398
392
Fannie Mae 4.484% 20352 
4,312
4,185
Fannie Mae 4.581% 20352 
21,242
20,649
Fannie Mae 5.00% 2035
37,556
35,106
Fannie Mae 5.00% 2035
9,523
8,902
Fannie Mae 5.50% 2035
121,695
117,231
Fannie Mae 5.50% 2035
9,191
8,837
Fannie Mae, Series 2005-68, Class PG, 5.50% 2035
6,859
6,656
Fannie Mae 6.00% 2035
15,605
15,396
Fannie Mae 6.00% 2035
2,702
2,661
Fannie Mae 6.00% 2035
2,338
2,303
Fannie Mae 6.00% 2035
791
780
Fannie Mae 6.00% 2035
704
693
Fannie Mae, Series 2006-51, Class PO, principal only, 0% 2036
11,490
8,120
Fannie Mae 5.50% 2036
82,192
78,921
Fannie Mae 5.50% 2036
69,197
66,443
Fannie Mae 5.50% 2036
67,735
65,039
Fannie Mae 5.50% 2036
540
519
Fannie Mae 5.50% 2036
47
45
Fannie Mae, Series 2006-43, Class PX, 6.00% 2036
25,000
24,957
Fannie Mae 6.00% 2036
24,698
24,302
Fannie Mae 6.50% 2036
18,135
18,234
Fannie Mae, Series 2006-32, Class OA, principal only, 0% 2036
9,957
6,671
Fannie Mae, Series 2003-W10, Class 1A-2B, 3.112% 2037
210
209
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041
9,938
10,124
Fannie Mae, Series 2001-50, Class BA, 7.00% 2041
3,099
3,169
Fannie Mae, Series 2002-W1, Class 2A, 7.50% 2042
7,187
7,372
Freddie Mac 8.25% 2007
33
33
Freddie Mac 8.25% 2007
8
8
Freddie Mac 8.50% 2007
5
5
Freddie Mac 8.00% 2008
4
4
Freddie Mac 8.50% 2008
18
18
Freddie Mac 8.50% 2008
17
17
Freddie Mac 8.50% 2008
5
5
Freddie Mac 8.50% 2008
3
3
Freddie Mac 8.75% 2008
56
56
Freddie Mac 8.75% 2008
18
18
Freddie Mac 8.75% 2008
8
8
Freddie Mac 8.75% 2008
7
7
Freddie Mac 8.00% 2009
6
6
Freddie Mac 8.50% 2009
103
106
Freddie Mac 8.50% 2010
108
110
Freddie Mac 8.50% 2010
47
47
Freddie Mac 4.00% 2015
43,684
40,495
Freddie Mac 6.00% 2017
727
730
Freddie Mac, Series 2310, Class A, 10.602% 20172
1,004
1,081
Freddie Mac 5.00% 2018
23,945
23,126
Freddie Mac 11.00% 2018
134
147
Freddie Mac 8.50% 2020
234
248
Freddie Mac 8.50% 2020
76
80
Freddie Mac, Series 41, Class F, 10.00% 2020
183
182
Freddie Mac, Series 178, Class Z, 9.25% 2021
127
132
Freddie Mac 8.00% 2026
138
147
Freddie Mac 8.50% 2027
33
35
Freddie Mac 4.649% 20352 
25,698
24,921
Freddie Mac 4.789% 20352
13,380
13,024
Freddie Mac 5.00% 2035
47,132
44,014
Freddie Mac, Series 3061, Class PN, 5.50% 2035
61,868
60,811
Freddie Mac 5.50% 2035
23,371
22,444
Freddie Mac 5.50% 2035
23,352
22,426
Freddie Mac 6.00% 2036
282,708
278,270
Freddie Mac, Series 3156, Class NG, 6.00% 2036
17,867
17,906
Freddie Mac 6.50% 2036
2,735
2,751
Freddie Mac, Series 3136, Class OP, principal only, 0% 2036
9,953
7,056
Countrywide Alternative Loan Trust, Series 2004-5CB, Class 2-A-1, 5.00% 2019
11,031
10,549
Countrywide Alternative Loan Trust, Series 2006-J3, Class 2-A-1, 4.75% 2020
13,917
13,147
Countrywide Alternative Loan Trust, Series 2005-J8, Class 2-A-1, 5.00% 2020
18,697
17,837
Countrywide Alternative Loan Trust, Series 2004-28CB, Class 7-A-1, 5.00% 2020
4,640
4,444
Countrywide Alternative Loan Trust, Series 2005-9CB, Class 2-A-1, 6.00% 2020
8,425
8,331
Countrywide Alternative Loan Trust, Series 2005-J11, Class PO-A, principal only, 0% 2035
100
62
Countrywide Alternative Loan Trust, Series 2005-62, Class 2-A-1, 5.011% 20352
32,802
32,832
Countrywide Alternative Loan Trust, Series 2005-46CB, Class A-8, 5.50% 2035
96,725
95,492
Countrywide Alternative Loan Trust, Series 2005-54CB, Class 1-A-7, 5.50% 2035
59,304
58,710
Countrywide Alternative Loan Trust, Series 2005-49CB, Class A-1, 5.50% 2035
38,196
37,509
Countrywide Alternative Loan Trust, Series 2005-40CB, Class A-1, 5.50% 2035
36,530
34,886
Countrywide Alternative Loan Trust, Series 2005-21CB, Class A-9, 5.50% 2035
15,864
15,666
Countrywide Alternative Loan Trust, Series 2005-30CB, Class 2-A-1, 5.50% 2035
6,151
5,856
Countrywide Alternative Loan Trust, Series 2004-28CB, Class 5-A-1, 5.75% 2035
3,161
3,048
Countrywide Alternative Loan Trust, Series 2005-21CB, Class A-17, 6.00% 2035
35,804
35,269
Countrywide Alternative Loan Trust, Series 2004-36CB, Class 1-A-1, 6.00% 2035
18,703
18,610
Countrywide Alternative Loan Trust, Series 2004-28CB, Class 6-A-1, 6.00% 2035
1,327
1,295
Countrywide Alternative Loan Trust, Series 2005-73CB, Class 1-A-11, 5.50% 2036
9,573
8,873
Countrywide Alternative Loan Trust, Series 2006-16CB, Class A-2, 6.00% 2036
35,117
34,755
Countrywide Alternative Loan Trust, Series 2006-24CB, Class 2-A-1, 6.00% 2036
28,000
28,004
CS First Boston Mortgage Acceptance Corp., Series 2004-7, Class IV-A-1, 4.50% 2019
7,146
6,681
CS First Boston Mortgage Securities Corp., Series 2006-4, Class C-P, principal only, 0% 2021
272
191
CS First Boston Mortgage Securities Corp., Series 2002-30, Class I-A-1, 7.50% 2032
1,566
1,574
CS First Boston Mortgage Securities Corp., Series 2002-34, Class I-A-1, 7.50% 2032
170
172
CS First Boston Mortgage Securities Corp., Series 2003-AR12, Class II-A-2, 4.312% 20332 
989
971
CS First Boston Mortgage Securities Corp., Series 2003-21, Class V-A-1, 6.50% 2033
8,928
8,889
CS First Boston Mortgage Securities Corp., Series 2003-29, Class V-A-1, 7.00% 2033
2,290
2,299
CS First Boston Mortgage Securities Corp., Series 2004-AR5, Class VII-A-2, 4.607% 20342 
20,108
19,632
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 2034
12,076
11,788
CS First Boston Mortgage Securities Corp., Series 2001-CF2, Class A-3, 6.238% 2034
7,105
7,137
CS First Boston Mortgage Securities Corp., Series 2001-CF2, Class A-4, 6.505% 2034
460
471
CS First Boston Mortgage Acceptance Corp., Series 2005-11, Class A-P, principal only, 0% 2035
672
400
CS First Boston Mortgage Securities Corp., Series 2005-8, Class A-P, principal only, 0% 2035
537
340
CS First Boston Mortgage Securities Corp., Series 2002-CP5, Class A-1, 4.106% 2035
1,654
1,591
CS First Boston Mortgage Securities Corp., Series 2005-6, Class VI-A-1, 6.00% 2035
22,513
22,219
CS First Boston Mortgage Securities Corp., Series 2005-5, Class IV-A-1, 6.25% 2035
11,380
11,304
CS First Boston Mortgage Securities Corp., Series 2001-CK1, Class A-3, 6.38% 2035
67,122
68,411
CS First Boston Mortgage Securities Corp., Series 2002-CKP1, Class F, 7.067% 20351 
1,500
1,579
CS First Boston Mortgage Securities Corp., Series 2006-2, Class A-P, principal only, 0% 2036
410
268
CS First Boston Mortgage Securities Corp., Series 2006-4, Class D-P, principal only, 0% 2036
325
202
CS First Boston Mortgage Securities Corp., Series 2006-1, Class A-P, principal only, 0% 2036
257
161
CS First Boston Mortgage Securities Corp., Series 2006-3, Class A-P, principal only, 0% 2036
37
23
CS First Boston Mortgage Securities Corp., Series 2006-2, Class 5-A-6, 6.00% 2036
33,750
33,191
CS First Boston Mortgage Securities Corp., Series 2002-CKS4, Class G, 6.006% 20361 
500
495
CS First Boston Mortgage Securities Corp., Series 2001-CK6, Class A-3, 6.387% 2036
26,650
27,311
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-1A, 3.883% 2037
8,597
8,355
CS First Boston Mortgage Securities Corp., Series 2005-C3, Class A-AB, 4.614% 2037
20,000
18,729
CS First Boston Mortgage Securities Corp., Series 2002-CKN2, Class A-1, 4.637% 2037
831
827
CS First Boston Mortgage Securities Corp., Series 2004-C4, Class A-4, 4.283% 2039
20,600
19,245
CS First Boston Mortgage Securities Corp., Series 2006-C1, Class A-3, 5.711% 2039
14,000
13,815
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-3, 5.23% 2040
42,000
40,386
CS First Boston Mortgage Securities Corp., Series 1999-C1, Class D, 8.062% 20412
5,725
6,090
Government National Mortgage Assn. 7.50% 2007
6
6
Government National Mortgage Assn. 6.50% 2008
122
124
Government National Mortgage Assn. 6.50% 2008
37
38
Government National Mortgage Assn. 7.50% 2008
32
33
Government National Mortgage Assn. 7.50% 2008
26
26
Government National Mortgage Assn. 7.50% 2008
19
19
Government National Mortgage Assn. 7.50% 2008
19
19
Government National Mortgage Assn. 7.50% 2008
9
9
Government National Mortgage Assn. 6.50% 2009
41
42
Government National Mortgage Assn. 7.50% 2009
41
42
Government National Mortgage Assn. 7.50% 2009
40
40
Government National Mortgage Assn. 7.50% 2009
39
39
Government National Mortgage Assn. 7.50% 2009
35
36
Government National Mortgage Assn. 7.50% 2009
34
35
Government National Mortgage Assn. 7.50% 2009
25
25
Government National Mortgage Assn. 7.50% 2009
22
22
Government National Mortgage Assn. 9.00% 2009
432
441
Government National Mortgage Assn. 9.50% 2009
491
508
Government National Mortgage Assn. 9.50% 2009
36
37
Government National Mortgage Assn. 9.00% 2016
116
124
Government National Mortgage Assn. 9.00% 2017
35
38
Government National Mortgage Assn. 9.50% 2019
283
312
Government National Mortgage Assn. 8.50% 2020
50
53
Government National Mortgage Assn. 8.50% 2020
30
32
Government National Mortgage Assn. 9.50% 2020
98
109
Government National Mortgage Assn. 10.00% 2020
778
870
Government National Mortgage Assn. 8.50% 2021
266
283
Government National Mortgage Assn. 8.50% 2021
160
171
Government National Mortgage Assn. 8.50% 2021
91
96
Government National Mortgage Assn. 8.50% 2021
42
45
Government National Mortgage Assn. 10.00% 2021
1,732
1,913
Government National Mortgage Assn. 9.00% 2022
28
30
Government National Mortgage Assn. 8.50% 2023
32
34
Government National Mortgage Assn. 8.50% 2024
30
32
Government National Mortgage Assn. 8.50% 2024
26
28
Government National Mortgage Assn. 8.50% 2027
30
32
Government National Mortgage Assn. 8.50% 2028
25
26
Government National Mortgage Assn. 8.50% 2029
28
30
Government National Mortgage Assn. 6.50% 2034
389
392
Government National Mortgage Assn. 4.00% 20352 
15,309
14,915
Government National Mortgage Assn. 4.00% 20352 
6,790
6,593
Government National Mortgage Assn. 4.00% 20352
3,213
3,120
Government National Mortgage Assn. 5.50% 2036
8,918
8,605
Government National Mortgage Assn. 6.00% 2036
190,000
187,996
Government National Mortgage Assn. 6.00% 2036
19,970
19,766
Bear Stearns Commercial Mortgage Securities Inc., Series 1998-C1, Class A-1, 6.34% 2030
1,920
1,927
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-WF2,
   
     Class X, interest only, 0.407% 20312 
226,705
2,820
Bear Stearns Commercial Mortgage Securities Inc., Series 1999-C1,
   
     Class X, interest only, 1.243% 20311,2 
147,475
4,422
Bear Stearns Commercial Mortgage Securities Inc., Series 2000-WF2, Class A-2, 7.32% 2032
16,480
17,355
Bear Stearns Commercial Mortgage Securities Inc., Series 2002-PBW1, Class A-1, 3.97% 2035
22,167
21,377
Bear Stearns Commercial Mortgage Securities Inc., Series 2001-TOP2, Class D, 6.94% 20351 
3,000
3,122
Bear Stearns Commercial Mortgage Securities Inc., Series 2004-PWR6, Class A-1, 3.688% 2041
3,368
3,286
Bear Stearns Commercial Mortgage Securities Inc., Series 2004-PWR6, Class A-4, 4.521% 2041
10,000
9,398
Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PWR9, Class A-2, 4.735% 2042
64,000
61,723
Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PWR9, Class A-3, 4.868% 2042
38,825
36,587
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-S6, II-A-3, 4.75% 2018
1,473
1,391
WaMu Mortgage Pass-Through Certificates Trust, Series 2004-CB2, Class VII-A, 5.50% 2019
1,787
1,763
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR7, Class A-7, 3.842% 20332 
30,605
29,839
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR8, Class A, 4.03% 20332 
6,651
6,492
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR5, Class A-7, 4.208% 20332 
5,928
5,776
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR6, Class A-1, 4.339% 20332 
15,248
14,896
WaMu Mortgage Pass-Through Certificates Trust, Series 2004-AR11, Class A, 4.572% 20342 
34,863
33,883
WaMu Mortgage Pass-Through Certificates Trust, Series 2006-AR2, Class 2-A1, 5.844% 20372 
29,202
28,635
WaMu Mortgage Pass-Through Certificates Trust, Series 2005-AR15, Class A-1-A, 5.583% 20452 
22,322
22,395
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C2, Class F, 5.98% 20341
2,500
2,471
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12,
   
     Class A-3B, 5.511% 20372 
45,000
44,036
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2002-C1, Class E, 6.135% 20371
400
403
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2003-ML1,
   
     Class A-1, 3.972% 2039
15,819
15,128
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2004-C3,
   
     Class A-3, 4.545% 2042
$10,000
$ 9,425
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4,
   
     Class A-2, 4.79% 2042
10,508
10,137
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4,
   
     Class A-3A1, 4.871% 2042
25,000
23,940
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1,
   
Class A-2, 4.625% 2046
31,455
30,398
Residential Accredit Loans, Inc., Series 2004-QS6, Class A-1, 5.00% 2019
6,816
6,502
Residential Accredit Loans, Inc., Series 2004-QS16, Class 1-A-1, 5.50% 2034
13,852
13,656
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034
44,617
43,840
Residential Accredit Loans, Inc., Series 2004-QS12, Class M-1, 6.00% 2034
2,440
2,327
Residential Accredit Loans, Inc., Series 2005-QS4, Class A-3, 5.50% 2035
41,813
40,584
Residential Accredit Loans, Inc., Series 2005-QS9, Class A-6, 5.50% 2035
5,000
4,644
Residential Accredit Loans, Inc., Series 2005-QS5, Class A-5, 5.75% 2035
5,000
4,757
Residential Accredit Loans, Inc., Series 2005-QS14, Class 2-A-1, 6.00% 2035
5,690
5,548
Residential Accredit Loans, Inc., Series 2006-QS1, Class A-3, 5.75% 2036
9,316
9,260
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-22, Class 5-A1, 6.038% 20352 
29,926
29,621
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 5-A-1, 5.991% 20362 
53,994
53,319
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 4-A-1, 5.995% 20362 
18,232
17,986
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-2, Class 5-A-1, 6.00% 20362 
9,518
9,432
CHL Mortgage Pass-Through Trust, Series 2003-HYB3, Class 4-A-1, 3.462% 20332 
4,135
4,015
CHL Mortgage Pass-Through Trust, Series 2003-27, Class A-1, 3.704% 20332 
9,372
8,911
CHL Mortgage Pass-Through Trust, Series 2004-22, Class A-2, 4.641% 20342 
10,980
10,705
CHL Mortgage Pass-Through Trust, Series 2004-HYB6, Class A-3, 5.149% 20342 
4,691
4,626
CHL Mortgage Pass-Through Trust, Series 2005-J4, Class PO, principal only, 0% 2035
175
125
CHL Mortgage Pass-Through Trust, Series 2005-HYB8, Class 4-A-1, 5.71% 20352 
78,946
77,603
Bear Stearns ARM Trust, Series 2003-6, Class I-A-2, 3.984% 20332 
27,949
27,198
Bear Stearns ARM Trust, Series 2003-3, Class II-A-2, 4.054% 20332 
5,926
5,791
Bear Stearns ARM Trust, Series 2003-3, Class III-A-1, 5.118% 20332 
5,939
5,814
Bear Stearns ARM Trust, Series 2004-3, Class II-A, 4.251% 20342 
15,568
14,982
Bear Stearns ARM Trust, Series 2003-9, Class III-A-2, 4.98% 20342 
2,541
2,485
Bear Stearns ARM Trust, Series 2005-10, Class A-3, 4.65% 20352 
51,800
49,373
Crown Castle Towers LLC, Series 2005-1, Class A-FX, 4.643% 20351 
36,000
34,494
Crown Castle Towers LLC, Series 2005-1, Class C, 5.074% 20351
43,000
41,375
Chase Commercial Mortgage Securities Corp., Series 1998-2, Class A-2, 6.39% 2030
42,016
42,527
Chase Commercial Mortgage Securities Corp., Series 1998-1, Class A-2, 6.56% 2030
11,816
11,945
Chase Commercial Mortgage Securities Corp., Series 2000-2, Class A-1, 7.543% 2032
10,274
10,449
Chase Commercial Mortgage Securities Corp., Series 2000-1, Class A-2, 7.757% 2032
7,053
7,404
Banc of America Commercial Mortgage Inc., Series 2001-1, Class A-2, 6.503% 2036
54,375
55,848
Banc of America Commercial Mortgage Inc., Series 2004-5, Class A-3, 4.561% 2041
9,975
9,429
Bear Stearns ALT-A Trust, Series 2005-9, Class II-6A-1, 5.845% 20352 
31,728
31,365
Bear Stearns ALT-A Trust, Series 2006-2, Class II-4-A-1, 5.982% 20362
33,596
33,410
Wachovia Bank Commercial Mortgage Trust, Series 2003-C9, Class A-2, 3.958% 2035
4,200
4,031
Wachovia Bank Commercial Mortgage Trust, Series 2003-C9, Class A-3, 4.608% 2035
1,979
1,884
Wachovia Bank Commercial Mortgage Trust, Series 2005-C17, Class A-2, 4.782% 2042
24,000
23,271
Wachovia Bank Commercial Mortgage Trust, Series 2005-C17, Class A-4, 5.083% 2042
35,000
33,011
GMAC Commercial Mortgage Securities, Inc., Series 1997-C1, Class A-3, 6.869% 2029
8,969
9,046
GMAC Commercial Mortgage Securities, Inc., Series 1997-C1, Class D, 6.997% 2029
8,300
8,404
GMAC Commercial Mortgage Securities, Inc., Series 2001-C1, Class A-2, 6.465% 2034
30,250
30,975
GMAC Commercial Mortgage Securities, Inc., Series 1998-C2, Class C, 6.50% 2035
9,000
9,144
Residential Asset Mortgage Products Trust, Series 2004-RS9, Class A-I-4,
   
     AMBAC insured, 4.767% 2032
10,000
9,812
Residential Asset Mortgage Products Trust, Series 2003-RZ4, Class A-7, 4.79% 20332
10,000
9,506
Residential Asset Mortgage Products Trust, Series 2003-RS11, Class A-I-7, 4.828% 2033
9,000
8,591
Residential Asset Mortgage Products Trust, Series 2004-RS10, Class A-I-6, 4.55% 2034
26,100
24,628
Nykredit 4.00% 2035
DKr308,893
47,954
IndyMac INDX Mortgage Loan Trust, Series 2006-AR5, Class 2-A-1, 5.884% 20362 
$51,952
51,256
Banc of America Funding Corp., Series 2005-H, Class 9-A-1, 5.969% 20352 
49,994
49,557
Tower Ventures, LLC, Series 2006-1, Class A-2, 5.45% 20361
22,500
22,012
Tower Ventures, LLC, Series 2006-1, Class C, 5.707% 20361
3,670
3,602
Tower Ventures, LLC, Series 2006-1, Class D, 6.052% 20361
10,000
9,914
Tower Ventures, LLC, Series 2006-1, Class E, 6.495% 20361
4,000
3,966
Tower Ventures, LLC, Series 2006-1, Class F, 7.036% 20361
8,730
8,611
HarborView Mortgage Loan Trust, Series 2005-15, Class 2-A1A2, 6.067% 20452 
44,574
45,019
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 20261 
41,310
43,293
SBA CMBS Trust, Series 2005-1, Class A, 5.369% 20351 
33,000
32,349
SBA CMBS Trust, Series 2005-1, Class B, 5.565% 20351 
3,300
3,245
SBA CMBS Trust, Series 2005-1, Class E, 6.706% 20351
7,460
7,442
Salomon Brothers Commercial Mortgage Trust, Series 2000-C3, Class A-1, 6.341% 20331
2,959
2,972
Salomon Brothers Commercial Mortgage Trust, Series 2000-C3, Class A-2, 6.592% 2033
17,250
17,724
Salomon Brothers Commercial Mortgage Trust, Series 2001-C1, Class A-2, 6.226% 2035
5,462
5,479
Salomon Brothers Commercial Mortgage Trust, Series 2001-C1, Class A-3, 6.428% 2035
16,420
16,799
Merrill Lynch Mortgage Investors, Inc., Series 2003-A4, Class II-A, 4.61% 20332 
15,078
14,851
Merrill Lynch Mortgage Investors, Inc., Series 2004-A1, Class II-A-1, 4.595% 20342 
26,112
25,520
Deutsche Genossenschafts-Hypothekenbank AG 5.25% 2009
€29,447
39,141
Bear Stearns Asset-backed Securities I Trust, Series 2005-AC8, Class A-4, 5.50% 2035
$16,325
16,056
Bear Stearns Asset-backed Securities I Trust, Series 2006-AC-2, Class II-1A-1, 6.00% 2036
23,265
23,084
GMAC Mortgage Loan Trust, Series 2006-AR1, Class 2-A-1, 5.659% 20362
39,446
38,850
Banc of America Mortgage Securities Trust, Series 2003-F, Class 2-A-1, 3.734% 20332 
22,802
22,100
Banc of America Mortgage Securities Trust, Series 2003-G, Class 2-A-1, 4.088% 20332 
6,487
6,240
Banc of America Mortgage Securities Trust, Series 2003-I, Class 3-A-1, 4.532% 20332 
9,633
9,396
GS Mortgage Securities Corp. II, Series 1998-C1, Class E, 7.42% 20302 
31,076
32,009
GS Mortgage Securities Corp. II, Series 1998-C1, Class D, 7.42% 20302
3,750
3,864
Residential Asset Securitization Trust, Series 2005-A13, Class PO, principal only, 0% 2035
286
183
Residential Asset Securitization Trust, Series 2005-A8CB, Class A-11, 6.00% 2035
21,750
21,234
Residential Asset Securitization Trust, Series 2005-A6CB, Class A-7, 6.00% 2035
14,244
14,091
Banc of America Alternative Loan Trust, Series 2005-4, Class 2-A-1, 5.00% 2020
17,099
16,312
Banc of America Alternative Loan Trust, Series 2005-6, Class 2-CB-2, 6.00% 2035
16,587
16,378
Morgan Stanley Mortgage Loan Trust, Series 2004-3, Class 4-A, 5.693% 20342 
27,230
26,038
Morgan Stanley Mortgage Loan Trust, Series 2004-3, Class 3-A, 6.00% 2034
3,223
3,146
Adjustable Rate Mortgage Trust, Series 2006-1, Class 3-A-3, 5.978% 20362
29,446
29,135
MASTR Alternative Loan Trust, Series 2003-2, Class 6-A-1, 6.00% 2033
801
793
MASTR Alternative Loan Trust, Series 2004-2, Class 2-A-1, 6.00% 2034
1,496
1,460
MASTR Alternative Loan Trust, Series 2005-1, Class 1-A-1, 5.50% 2035
17,315
16,478
MASTR Alternative Loan Trust, Series 2005-3, Class 1-A-1, 5.50% 2035
4,284
4,070
MASTR Alternative Loan Trust, Series 2005-3, Class 2-A-1, 6.00% 2035
5,555
5,472
MASTR Alternative Loan Trust, Series 2005-3, Class 3-A-1, 6.50% 2035
634
631
Commercial Mortgage Trust, Series 2004-LB3A, Class A-4, 5.234% 2037
10,956
10,670
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038
20,000
18,057
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust,
   
     Series 1999-1, Class A-2, 7.439% 2031
5,000
5,227
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust,
   
     Series 1999-1, Class B, 7.619% 2031
17,125
18,046
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust,
   
     Series 1999-1, Class C, 7.625% 2031
5,000
5,272
Morgan Stanley Dean Witter Capital I Trust, Series 2001-TOP5, Class A-3, 6.16% 2035
17,468
17,682
Morgan Stanley Dean Witter Capital I Trust, Series 2003-TOP9, Class A-1, 3.98% 2036
8,174
7,779
Morgan Stanley Dean Witter Capital I Trust, Series 2002-IQ3, Class A-1, 3.48% 2037
1,067
1,051
Morgan Stanley Capital I, Inc., Series 1998-HF2, Class A-2, 6.48% 2030
14,425
14,606
Morgan Stanley Capital I, Inc., Series 1999-FNV1, Class A-2, 6.53% 2031
9,934
10,084
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A-1, 6.079% 2033
230
231
GE Capital Commercial Mortgage Corp., Series 2001-1, Class A-2, 6.531% 2033
17,590
18,097
GE Capital Commercial Mortgage Corp., Series 2001-3, Class A-1, 5.56% 2038
3,120
3,114
GE Capital Commercial Mortgage Corp., Series 2001-3, Class A-2, 6.07% 2038
2,500
2,538
LB-UBS Commercial Mortgage Trust, Series 2000-C3, Class A-2, 7.95% 2025
14,500
15,499
LB-UBS Commercial Mortgage Trust, Series 2002-C1, Class A-3, 6.226% 2026
8,300
8,416
Structured Asset Securities Corp., Series 1998-RF2, Class A, 8.526% 20271,2 
7,026
7,076
Structured Asset Securities Corp., Series 1998-RF1, Class A, 8.734% 20271,2 
2,572
2,589
Structured Asset Securities Corp., Series 1999-RF1, Class A, 7.853% 20281,2 
1,697
1,728
Structured Asset Securities Corp., Series 2003-17A, Class 3-A1, 4.01% 20332
2,194
2,166
Structured Asset Securities Corp., Series 2005-6, Class 5-A-4, 5.00% 2035
6,871
6,278
Structured Asset Securities Corp., Series 2005-6, Class 5-A-9, 5.00% 2035
2,766
2,655
Prudential Securities Secured Financing Corp., Series 1999-NRF1, Class C, 6.746% 2031
18,000
18,453
Citigroup Mortgage Loan Trust, Inc., Series 2004-HYB1, Class A-3-1, 4.55% 20342 
5,201
5,099
Citigroup Mortgage Loan Trust, Inc., Series 2005-8, Class 3-A-1, 5.50% 2035
10,950
10,425
GGP Mall Properties Trust, Series 2001-GGP1, Class A-2, 5.007% 20111
15,026
15,005
First Horizon Alternative Mortgage Securities Trust, Series 2005-FA8, Class I-A-14, 5.50% 2035
14,414
14,210
GSR Mortgage Loan Trust, Series 2005-AR1, Class 2-A-1, 4.946% 20352
13,807
13,530
Dexia Municipal Agency 3.50% 2009
€10,076
12,741
Bank of America, NA and First Union National Bank Commercial Mortgage Trust,
   
     Series 2001-3, Class A-1, 4.89% 2037
$10,905
10,783
Washington Mutual Securities Corp., Series 2005-AR1, Class A-1-A, 5.583% 20352 
8,863
8,881
Washington Mutual Securities Corp., WMALT Series 2005-1, Class 6-A-1, 6.50% 2035
1,698
1,698
Residential Funding Mortgage Securities I, Inc., Series 2004-SA1, Class A-II, 4.328% 20342 
10,893
10,526
DLJ Commercial Mortgage Corp., Series 1999-CG1, Class A-1B, 6.46% 2032
10,000
10,178
DLJ Mortgage Acceptance Corp., Series 1998-CF1, Class A-1B, 6.41% 2031
8,888
8,961
American General Mortgage Loan Trust, Series 2006-1, Class A-5, 5.75% 20351 
8,500
8,197
Hypothekenbank in Essen AG 5.25% 2008
€6,000
7,853
J.P. Morgan Mortgage Trust, Series 2005-A1, Class 4-A-1, 4.78% 20352 
$8,230
7,789
Morgan Stanley Capital I Trust, Series 2005-HQ7, Class A-2, 5.375% 20422 
7,875
7,650
First Union National Bank Commercial Mortgage Trust, Series 2000-C1, Class A-1, 7.739% 2032
4,383
4,452
First Union National Bank Commercial Mortgage Trust, Series 2001-C4, Class A-1, 5.673% 2033
2,840
2,840
Rheinische Hypothekenbank Eurobond 4.25% 2008
€5,000
6,462
Banc of America Mortgage Securities, Inc., Series 2003-10, Class 3-A-1, 5.00% 2019
$ 5,898
5,625
Hilton Hotel Pool Trust, Series 2000-HLTA, Class F, 7.75% 20151
5,000
5,085
RAAC Mortgage Loan Asset-backed Trust, Series 2004-SP3, Class A-I-5, 4.89% 2032
5,000
4,620
SACO I Trust, Series 2005-2, Class A, interest only, 6.00% 20071 
24,546
1,284
SACO I Trust, Series 2005-1, Class A, interest only, 6.00% 20071 
16,489
708
SACO I Trust, Series 2005-3, Class A, interest only, 6.00% 20351 
29,359
1,673
Wells Fargo Mortgage-backed Securities Trust, Series 2004-7, Class I-A-1, 4.50% 2019
2,255
2,109
Wells Fargo Mortgage-backed Securities Trust, Series 2006-1, Class A-PO, principal only, 0% 2021
260
158
Wells Fargo Mortgage-backed Securities Trust, Series 2006-2, Class 1-A-5, principal only, 0% 2036
1,739
1,265
Specialty Underwriting and Residential Finance Trust, Series 2004-AA1, Class I-A-1, 5.00% 2034
3,336
3,229
Ocwen Residential MBS Corp., Series 1998-R1, Class AWAC, 5.36% 20401,2 
2,369
2,291
Bank of America Large Loan, Inc., Series 2005-BOCA, Class E, 5.619% 20161,2 
1,750
1,751
TBW Mortgage-backed Trust, Series 2006-1, Class D-P, principal only, 0% 2036
588
363
TBW Mortgage-backed Trust, Series 2006-2, Class A-P, principal only, 0% 2036
293
209
TBW Mortgage-backed Trust, Series 2006-1, Class A-P, principal only, 0% 2036
296
185
TBW Mortgage-backed Trust, Series 2006-2, Class C-P, principal only, 0% 2036
65
46
GS Mortgage Securities Corp., Series 1998-2, Class M, 7.75% 20271 
639
656
Nomura Asset Securities Corp., Series 1998-D6, Class A-1A, 6.28% 2030
488
488
Financial Asset Securitization, Inc., Series 1997-NAM1, Class B-1, 7.75% 2027
452
451
Citicorp Mortgage Securities Trust, Series 2006-1, Class A-PO2, principal only, 0% 2021
49
31
Citicorp Mortgage Securities Trust, Series 2006-1, Class A-PO1, principal only, 0% 2036
363
250
First Boston Mortgage Securities Corp., Series D, interest only, 10.965% 2017
123
31
First Boston Mortgage Securities Corp., Series D, principal only, 0% 2017
123
98
   
5,086,865
     
U.S. GOVERNMENT & GOVERNMENT AGENCY BONDS & NOTES — 10.09%
    
U.S. Treasury 7.00% 2006
100,000
100,055
U.S. Treasury 3.125% 2007
9,275
9,105
U.S. Treasury 3.375% 20078
63,573
63,740
U.S. Treasury 6.25% 2007
131,115
131,832
U.S. Treasury 3.375% 2008
10,500
10,089
U.S. Treasury 3.625% 20088 
6,683
6,796
U.S. Treasury 3.625% 2009
192,000
183,990
U.S. Treasury 5.50% 2009
5,510
5,565
U.S. Treasury Principal Strip 0% 2009
8,250
7,048
U.S. Treasury 0.875% 20108 
13,265
12,511
U.S. Treasury 6.50% 2010
30,000
31,352
U.S. Treasury 3.50% 20118 
57,871
60,500
U.S. Treasury 4.25% 2011
15,000
14,484
U.S. Treasury 4.50% 2011
8,400
8,191
U.S. Treasury 5.00% 2011
84,195
83,958
U.S. Treasury 5.00% 2011
25,000
24,939
U.S. Treasury 3.00% 20128 
499
513
U.S. Treasury 10.375% 2012
24,500
26,165
U.S. Treasury 3.625% 2013
75,000
68,625
U.S. Treasury 4.25% 2013
166,900
158,373
U.S. Treasury 12.00% 2013
10,000
11,369
U.S. Treasury 2.00% 20148 
42,055
40,589
U.S. Treasury 4.25% 2014
20,000
18,838
U.S. Treasury 11.25% 2015
70,000
99,433
U.S. Treasury Principal Strip 0% 2015
20,020
12,518
U.S. Treasury 9.25% 2016
30,000
39,164
U.S. Treasury 8.875% 20179
70,000
91,350
U.S. Treasury Principal Strip 0% 20189 
31,220
16,750
U.S. Treasury 6.875% 2025
129,700
153,796
U.S. Treasury 6.50% 20269 
66,850
76,700
U.S. Treasury 3.875% 20298 
3,186
3,935
U.S. Treasury 3.375% 20328,9 
2,128
2,508
U.S. Treasury 4.50% 20369
336,675
301,957
Fannie Mae 2.625% 2006
70,450
69,700
Fannie Mae 5.25% 2007
103,500
103,078
Fannie Mae 5.25% 2012
50,000
48,786
Freddie Mac 2.875% 2006
16,675
16,476
Freddie Mac 3.75% 2006
56,920
56,548
Freddie Mac 4.125% 2009
25,000
24,000
Freddie Mac 4.125% 2010
13,250
12,605
Freddie Mac 5.50% 2011
74,000
74,126
Freddie Mac 6.25% 2012
15,000
15,027
Federal Home Loan Bank 2.875% 2006
37,500
37,305
Federal Home Loan Bank 3.70% 2007
20,000
19,596
Federal Home Loan Bank 5.823% 2009
46,690
47,060
Federal Home Loan Bank 5.625% 2016
17,000
16,806
Federal Agricultural Mortgage Corp. 4.25% 2008
17,000
16,577
Federal Agricultural Mortgage Corp. 4.875% 20111 
15,000
14,596
United States Government-Guaranteed Certificates of Participation, Overseas Private
   
     Investment Corp.,Series 2000-044-A, 3.74% 20153 
10,450
9,801
United States Agency for International Development, Republic of Egypt 4.45% 2015
5,000
4,637
   
2,463,462
     
NON-U.S. GOVERNMENT & GOVERNMENT AGENCY BONDS & NOTES — 6.55%
    
Japanese Government 0.50% 2007
¥9,186,900
80,330
Japanese Government 0.90% 2008
7,187,550
62,831
Japanese Government 1.80% 2010
487,350
4,357
Japanese Government 1.30% 2011
1,160,250
10,087
Japanese Government 1.50% 2014
1,760,950
15,042
Japanese Government 2.30% 2035
¥3,957,000
$ 33,040
United Mexican States Government Global 10.375% 2009
$ 14,500
16,102
United Mexican States Government, Series MI10, 9.50% 2014
MXP1,112,000
101,156
United Mexican States Government Global 11.375% 2016
$ 8,312
11,346
United Mexican States Government Global 5.625% 2017
13,800
12,868
United Mexican States Government, Series M20, 8.00% 2023
MXP153,800
11,956
United Mexican States Government, Series M20, 10.00% 2024
311,500
28,925
United Mexican States Government Global 8.30% 2031
$8,220
9,515
United Mexican States Government Global 7.50% 2033
6,705
7,141
German Government 4.50% 2006
€52,750
67,510
German Government 4.50% 2009
55,000
71,863
German Government 6.25% 2030
28,240
46,138
Korean Government 4.50% 2008
KRW71,938,000
75,205
Korean Government 4.50% 2009
18,516,000
19,321
Korean Government 4.00% 2010
8,515,000
8,666
Korean Government 5.00% 2011
27,550,000
28,974
Korean Government 4.25% 2014
44,725,000
44,747
Polish Government 5.75% 2010
PLZ237,410
75,387
Polish Government 6.00% 2010
157,250
50,414
United Kingdom 7.50% 2006
£13,070
24,431
United Kingdom 5.00% 2008
1,380
2,560
United Kingdom 4.75% 2010
11,890
21,925
United Kingdom 4.75% 2015
14,550
26,925
United Kingdom 4.75% 2038
23,305
46,308
Israeli Government 7.50% 2014
ILS464,132
110,391
Canadian Government 4.25% 20268
C$52,330
81,449
Swedish Government 5.00% 2009
SKr105,000
15,111
Swedish Government 5.25% 2011
311,885
45,967
French Government O.A.T. Eurobond Strip Principal 0% 2019
€14,000
10,314
French Government O.A.T. Eurobond 5.50% 2029
7,610
11,359
French Government O.A.T. Eurobond 4.75% 2035
26,150
35,603
Russian Federation 8.25% 2010
$ 3,556
3,702
Russian Federation 5.00%/7.50% 20305 
45,695
48,722
Russian Federation 5.00%/7.50% 20301,5 
145
155
Thai Government 4.125% 2009
THB1,325,000
33,350
Thai Government 5.00% 2014
735,810
18,553
Aries Vermögensverwaltungs GmbH, Series C, 9.60% 2014
$23,000
28,635
Export-Import Bank of China 4.875% 20151 
20,000
18,567
State of Qatar 9.75% 2030
12,220
17,047
Italian Government BTPS Eurobond 6.00% 2007
€10,354
13,662
Singapore (Republic of) 3.125% 2011
S$10,770
6,740
Singapore (Republic of) 3.75% 2016
10,500
6,727
Argentina (Republic of) 4.278% 20122 
$4,850
3,941
Argentina (Republic of) 7.255% 20337,8 
ARS15,903
5,547
Argentina (Republic of) GDP-Linked 2035
53,811
1,388
Argentina (Republic of) 0.764% 20388 
10,050
1,446
Spanish Government 4.25% 2007
€8,250
10,650
Banque Centrale de Tunisie 4.75% 2011
3,000
3,846
Banque Centrale de Tunisie 7.375% 2012
$4,500
4,703
Brazilian Treasury Bill 5.903% 20108
BRL850
539
Brazil (Federal Republic of) Global 7.875% 2015
$1,250
1,312
Brazil (Federal Republic of) Global 8.00% 2018
644
681
Brazil (Federal Republic of) Global 8.875% 2024
1,375
1,530
Brazil (Federal Republic of) Global 12.25% 2030
425
625
Brazil (Federal Republic of) Global 11.00% 2040
3,110
3,860
El Salvador (Republic of) 7.65% 20351
8,750
8,444
Corporación Andina de Fomento 6.875% 2012
5,895
6,175
Corporación Andina de Fomento 5.125% 2015
2,000
1,870
Panama (Republic of) Global 7.125% 2026
690
669
Panama (Republic of) Global 8.875% 2027
250
284
Panama (Republic of) Global 9.375% 2029
675
800
Panama (Republic of) Global 6.70% 2036
5,313
4,888
Columbia (Republic of) Global 8.25% 2014
2,500
2,638
Colombia (Republic of) Global 12.00% 2015
COP2,330,000
1,017
Turkey (Republic of) 12.375% 2009
$500
559
Turkey (Republic of) 15.00% 2010
TRY5,250
2,980
Peru (Republic of) 9.125% 2012
$ 432
480
Peru (Republic of) 8.375% 2016
2,500
2,713
Peru (Republic of) Past Due Interest Eurobond 5.00% 20172 
344
335
New Zealand Government 4.50% 20168 
NZ$3,000
2,479
Dominican Republic 9.50% 20111,7 
$2,290
2,427
Egypt (Arab Republic of) Treasury Bill 0% 2007
EGP6,175
1,023
Egypt (Arab Republic of) Treasury Bill 0% 2007
1,825
302
Venezuela (Republic of) Global 8.50% 2014
$ 245
260
Venezuela (Republic of) 9.25% 2027
780
922
Guatemala (Republic of) 10.25% 20111
1,000
1,154
   
1,603,611
     
ASSET-BACKED OBLIGATIONS3— 5.45%
    
Drive Auto Receivables Trust, Series 2005-2, Class A-2, MBIA insured, 4.12% 20101 
7,828
7,748
Drive Auto Receivables Trust, Series 2005-1, Class A-4, MBIA insured, 4.01% 2012
28,125
27,331
Drive Auto Receivables Trust, Series 2005-2, Class A-3, MBIA insured, 4.26% 20121 
60,520
58,400
Drive Auto Receivables Trust, Series 2005-3, Class A-4, FSA insured, 5.09% 20131 
17,500
17,295
Drive Auto Receivables Trust, Series 2006-1, Class A-4, FSA insured, 5.54% 20131 
60,000
59,701
ARG Funding Corp., Series 2005-1, Class A-1, MBIA insured, 4.02% 20091 
21,000
20,474
ARG Funding Corp., Series 2005-2, Class A-1, AMBAC insured, 4.54% 20091 
51,820
50,929
ARG Funding Corp., Series 2005-1, Class A-3, MBIA insured, 4.29% 20111 
32,000
30,549
ARG Funding Corp., Series 2005-2, Class A-4, AMBAC insured, 4.84% 20111
30,000
29,180
CPS Auto Receivables Trust, Series 2003-A, Class A-2, XLCA insured, 2.89% 20091 
2,589
2,540
CPS Auto Receivables Trust, Series 2002-B, Class A-2, XLCA insured, 3.50% 20091 
585
579
CPS Auto Receivables Trust, Series 2002-C, Class A-2, XLCA insured, 3.52% 20091 
354
350
CPS Auto Receivables Trust, Series 2004-A, Class A-2, FSA insured, 3.87% 20101 
7,141
7,004
CPS Auto Receivables Trust, Series 2004-D, Class A-2, XLCA insured, 3.86% 20111 
17,465
17,156
CPS Auto Receivables Trust, Series 2005-B, Class A-2, FSA insured, 4.36% 20121 
12,000
11,683
CPS Auto Receivables Trust, Series 2005-D, Class A-2, FSA insured, 5.06% 20121 
7,600
7,513
CPS Auto Receivables Trust, Series 2006-A, Class 1-A-4, FSA insured, 5.33% 20121 
10,000
9,812
CPS Auto Receivables Trust, Series 2006-B, Class A-4, MBIA insured, 5.81% 20161
23,000
23,000
MBNA Credit Card Master Note Trust, Series 2002-1, Class B, 5.15% 2009
17,000
16,952
MBNA Master Credit Card Trust II, Series 1999-B, Class A, 5.90% 2011
3,000
3,033
MBNA Master Credit Card Trust II, Series 1999-B, Class B, 6.20% 2011
3,750
3,814
MBNA Credit Card Master Note Trust, Series 2005-6, Class A, 4.50% 2013
42,500
40,973
WFS Financial Owner Trust, Series 2003-1, Class A-4, 2.74% 2010
2,840
2,784
WFS Financial Owner Trust, Series 2002-3, Class A-4, 3.50% 2010
5,959
5,958
WFS Financial Owner Trust, Series 2004-1, Class C, 2.49% 2011
1,985
1,940
WFS Financial Owner Trust, Series 2004-1, Class A-4, 2.81% 2011
14,600
14,203
WFS Financial Owner Trust, Series 2005-1, Class A-4, 3.87% 2012
35,250
34,159
CWABS, Inc., Series 2004-15, Class AF-2, 3.775% 2024
808
806
CWABS, Inc., Series 2004-12, Class 2-AV-2, 5.603% 20332 
9,718
9,729
CWABS, Inc., Series 2004-15, Class 2-AV-2, 5.593% 20342 
14,819
14,841
CWABS, Inc., Series 2005-11, Class AF-2, 4.657% 2036
22,666
22,245
Vanderbilt Mortgage and Finance, Inc., Series 2002-B, Class A-3, 4.70% 2018
5,100
5,035
Vanderbilt Mortgage and Finance, Inc., Series 2002-C, Class A-4, 6.57% 2024
7,660
7,724
Vanderbilt Mortgage and Finance, Inc., Series 1999-B, Class I-A-6, 6.925% 2024
10,250
10,468
Vanderbilt Mortgage and Finance, Inc., Series 2000-C, Class A-4, 7.905% 2026
3,700
3,861
Vanderbilt Mortgage and Finance, Inc., Series 1997-C, Class II-A-1, 5.34% 20272 
1,102
1,103
Vanderbilt Mortgage and Finance, Inc., Series 2000-D, Class A-4, 7.715% 2027
4,253
4,402
Vanderbilt Mortgage and Finance, Inc., Series 2000-C, Class A-5, 8.195% 2030
6,889
7,203
Vanderbilt Mortgage and Finance, Inc., Series 2001-C, Class M-1, 6.76% 2032
1,500
1,510
Vanderbilt Mortgage and Finance, Inc., Series 2002-C, Class M-1, 7.82% 2032
3,000
3,152
Vega ContainerVessel PLC, Series 2006-1, Class A, XLCA insured, 5.562% 20211 
45,000
43,657
Residential Asset Securities Corp. Trust, Series 2001-KS3, Class A-I-6, 5.96% 2031
18,774
18,657
Residential Asset Securities Corp. Trust, Series 2004-KS12, Class A-1-2, 5.553% 20352 
16,562
16,594
UPFC Auto Receivables Trust, Series 2005-A, Class A-3, AMBAC insured, 4.34% 2010
14,000
13,799
UPFC Auto Receivables Trust, Series 2005-B, Class A-3, XLCA insured, 4.98% 2011
20,000
19,828
Residential Funding Mortgage Securities II, Inc., Series 2005-HS1, Class A-1-2,
    
     FGIC insured, 4.66% 2020
12,500
12,020
Residential Funding Mortgage Securities II, Inc., Series 2005-HI1, Class A-4,
   
     FGIC insured, 4.70% 2034
19,594
19,193
Bear Stearns Asset-backed Securities I Trust, Series 2004-HE11, Class I-A-2, 5.623% 20332 
3,877
3,883
Bear Stearns Asset-backed Securities I Trust, Series 2005-CL1, Class A-1, 5.823% 20342 
24,306
24,359
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2005-2, Class A-6,
   
     AMBAC insured, 5.08% 20111 
14,500
14,118
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2005-1, Class A-5,
   
     MBIA insured, 5.08% 20111 
13,000
12,657
Spirit Master Funding LLC, Net-Lease Mortgage Notes, Series 2005-1, Class A-1,
   
AMBAC insured, 5.05% 20231 
28,822
26,702
Prestige Auto Receivables Trust, Series 2005-1A, Class A-2, FSA insured, 4.37% 20121 
10,000
9,850
Prestige Auto Receivables Trust, Series 2006-1A, Class A-2, FSA insured, 5.25% 20131 
15,000
14,902
Capital Auto Receivables Asset Trust, Series 2004-2, Class A-4, 3.75% 2009
21,750
21,077
Capital Auto Receivables Asset Trust, Series 2005-SN1, Class B-2, 5.949% 20092 
2,485
2,510
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class B-1, 7.30% 2021
10,148
10,068
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class A-4, 6.57% 2027
8,290
8,448
Vanderbilt Acquisition Loan Trust, Series 2002-1, Class A-5, 7.12% 2032
3,000
3,107
Green Tree Financial Corp., Series 1995-3, Class B-2, 8.10% 20256 
3,991
1,117
Green Tree Financial Corp., Series 1996-10, Class A-6, 7.30% 2028
3,800
3,867
Green Tree Financial Corp., Series 1997-6, Class A-7, 7.14% 2029
8,309
8,452
Green Tree Recreational, Equipment & Consumer Trust, Series 1997-D, 7.25% 2029
4,818
4,332
Green Tree Financial Corp., Series 1997-6, Class B-2, 7.75% 20296 
3,051
—
Green Tree Financial Corp., Series 1998-4, Class B-2, 8.11% 20306
8,028
1
Conseco Finance Home Equity Loan Trust, Series 2002-B, Class M-1, 6.949% 20332 
3,476
3,504
Long Beach Acceptance Auto Receivables Trust, Series 2005-B, Class A-4,
   
     FSA insured, 4.522% 2012
17,000
16,552
Long Beach Acceptance Auto Receivables Trust, Series 2006-A, Class A-4,
   
     FSA insured, 5.50% 2013
4,000
3,976
Morgan Stanley ABS Capital I, Inc., Series 2004-NC3, Class M-1, 5.853% 20342
20,000
20,083
Triad Automobile Receivables Trust, Series 2005-A, Class A-4,
   
     AMBAC insured, 4.22% 2012
20,000
19,376
Cendant Timeshare Receivables Funding, LLC, Series 2005-1, Class A-1,
    
     FGIC insured, 4.67% 20171 
19,594
19,125
Consumer Credit Reference Index Securities Program Trust, Series 2002-1A,
   
     Class A, 7.437% 20071,2 
10,158
10,310
Consumer Credit Reference Index Securities Program Trust, Series 2002-2A,
   
     Class FX, 10.421% 20071 
8,250
8,383
Providian Gateway Master Trust, Series 2004-DA, Class A, 3.35% 20111 
15,000
14,613
Providian Gateway Master Trust, Series 2004-AA, Class C, 6.099% 20111,2
4,000
4,024
First Investors Auto Owner Trust, Series 2003-A, Class A, MBIA insured, 2.58% 20111 
8,285
8,087
First Investors Auto Owner Trust, Series 2005-A, Class A-2, MBIA insured, 4.23% 20121 
9,079
8,963
Providian Master Note Trust, Series 2005-A1A, Class A, 5.259% 20121,2 
10,000
10,011
Providian Master Note Trust, Series 2005-B1A, Class B, 5.499% 20121,2 
3,000
3,012
Providian Master Note Trust, Series 2006-B1, Class B-1, 5.35% 20131
4,000
3,981
Chase Issuance Trust, Series 2005-7, Class A, 4.55% 2013
17,500
16,844
AmeriCredit Automobile Receivables Trust, Series 2003-A-M, Class A-4-A,
   
     MBIA insured, 3.10% 2009
1,168
1,144
AmeriCredit Automobile Receivables Trust, Series 2002-C, Class A-4,
   
     FSA insured, 3.55% 2009
2,246
2,224
AmeriCredit Automobile Receivables Trust, Series 2003-C-F, Class A-4,
   
     FSA insured, 3.48% 2010
13,208
13,070
CWHEQ Home Equity Loan Trust, Series 2006-S2, Class A, interest only,
   
     FGIC insured, 4.00% 2027
81,236
879
CWHEQ Home Equity Loan Trust, Series 2006-S2, Class A-5, FGIC insured, 5.753% 2027
15,750
15,487
PECO Energy Transition Trust, Series 1999-A, Class A-7, 6.13% 2009
14,250
14,356
New Century Home Equity Loan Trust, Series 2001-NC2, Class M-1, 6.497% 20312 
3,523
3,527
New Century Home Equity Loan Trust, Series 2004-A, Class A-II-5, FGIC insured, 5.25% 2034
11,000
10,801
CNL Funding, Series 2000-AA, Class A-2, MBIA insured, 8.044% 20171
13,800
14,225
Capital One Multi-asset Execution Trust, Series 2006-1, Class C, 5.489% 20142
7,500
7,501
Capital One Multi-asset Execution Trust, Series 2005-7, Class A, 4.70% 2015
4,750
4,542
MASTR Asset-backed Securities Trust, Series 2006-AB1, Class A-4, 5.719% 2036
11,500
11,135
PP&L Transition Bond Co. LLC, Series 1999-1, Class A-7, 7.05% 2009
9,483
9,571
Drivetime Auto Owner Trust, Series 2004-C, Class A-3, XLCA insured, 3.493% 20101 
5,584
5,505
Drivetime Auto Owner Trust, Series 2006-A, Class A-3, XLCA insured, 5.565% 20111 
4,000
3,999
Citibank Credit Card Issuance Trust, Class 2005-B1, 4.40% 2010
9,000
8,781
PG&E Energy Recovery Funding LLC, Series 2005-1, Class A-2, 3.87% 2011
8,825
8,604
Nordstrom Credit Card Master Note Trust, Series 2002-1, Class B, 5.899% 20101,2
8,000
8,038
Specialty Underwriting and Residential Finance Trust, Series 2004-BC4,
   
     Class A-2B, 5.633% 20352
7,450
7,472
Discover Card Master Trust I, Series 1996-4, Class B, 5.749% 20132
7,000
7,128
American Express Credit Account Master Trust, Series 2005-3, Class B, 5.339% 20112 
7,000
7,008
Capital One Auto Finance Trust, Series 2004-B, Class A-3, MBIA insured, 2.96% 2009
6,928
6,885
First USA Credit Card Master Trust, Series 1997-4, Class C, 6.252% 20101,2 
6,630
6,652
Home Equity Asset Trust, Series 2004-7, Class M-1, 5.943% 20352
6,500
6,568
ACLC Business Loan Receivables Trust, Series 2002-1, Class A-2, 7.462% 20221 
6,262
6,340
PCR Auto Receivables Trust, Series 2004-1, Class A-2, XLCA insured, 3.995% 20101
6,357
6,331
GreenPoint Credit Manufactured Housing Contract Trust, Series 2000-7, Class A-1,
   
     MBIA insured, 5.542% 20222 
5,832
5,857
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-3, 4.35% 2014
3,642
3,425
Lehman ABS Manufactured Housing Contract Trust, Series 2001-B, Class A-4, 5.27% 2018
1,867
1,814
Origen Manufactured Housing Contract Trust, Series 2004-B, Class A-1, 2.87% 2013
915
910
Origen Manufactured Housing Contract Trust, Series 2004-B, Class M-1, 5.73% 2035
2,500
2,351
Origen Manufactured Housing Contract Trust, Series 2004-B, Class M-2, 6.51% 2035
2,000
1,957
Chase Credit Card Owner Trust, Series 2003-6, Class B, 5.549% 20112 
5,000
5,030
West Penn Funding LLC, Series 1999-A, Class A-4, 6.98% 2008
4,500
4,577
Advanta Business Card Master Trust, Series 2005-C1, Class C, 5.777% 20112 
2,000
2,005
Advanta Business Card Master Trust, Series 2005-A2, Class A-2, 5.397% 20132
2,000
1,998
Credit-Based Asset Servicing and Securitization LLC, Series 2005-CB4,
   
     Class AF-4, 5.028% 20352
3,490
3,308
Countryplace Manufactured Housing Contract, Series 2005-1, Class A-2,
   
     AMBAC insured, 4.42% 20351
3,400
3,307
IndyMac Home Equity Mortgage Loan Asset-backed Trust, Series SPMD 2001-A,
   
     Class AF-6, 6.537% 2030
2,349
2,287
SLM Student Loan Trust, Series 2003-10, Class A-4, 5.15% 20391
£1,160
2,135
MMCA Auto Owner Trust, Series 2002-4, Class B, 3.82% 2009
$ 650
646
MMCA Auto Owner Trust, Series 2002-2, Class A-4, 4.30% 2010
1,415
1,415
Advanta Mortgage Loan Trust, Series 1999-2, Class A-6, AMBAC insured, 6.82% 2029
1,617
1,613
Park Place Securities, Inc., Series 2005-WHQ3, Class A-2-A, 5.403% 20352 
1,176
1,176
Capital One Master Trust, Series 2002-1A, Class B, 5.799% 20112 
1,000
1,012
New South Motor Vehicle Trust, Series 2002-A, Class A-3, AMBAC insured, 3.03% 2010
885
873
Harley-Davidson Motorcycle Trust, Series 2002-2, Class B, 2.84% 2010
808
788
Financial Pacific Funding II, LLC, Series 2003-A, Class A, FSA insured, 2.29% 20091
710
703
NPF XII, Inc., Series 1999-3, Class B, 2.389% 20031,2,6
3,000
  
NPF XII, Inc., Series 2001-1A, Class A, 1.989% 20041,2,6
7,000
192
NPF XII, Inc., Series 2001-3, Class A, 5.52% 20071,6
16,000
440
Option One Mortgage Loan Trust, Series 2002-1, Class M-1, 6.448% 20322 
581
581
California Infrastructure and Economic Development Bank, Special Purpose Trust, PG&E-1,
   
     Series 1997-1, Class A-7, 6.42% 2008
560
562
California Infrastructure and Economic Development Bank, Special Purpose Trust, SCE-1,
   
     Series 1997-1, Class A-6, 6.38% 2008
332
333
SeaWest Securitization, LLC, Series 2002-A, Class A-3, XLCA insured, 3.58% 20081 
166
165
SeaWest Securitization, LLC, Series 2003-A, Class A-2, XLCA insured, 2.84% 20091
86
85
Continental Auto Receivables Owner Trust, Series 2000-B, Class CTFS, MBIA insured, 7.11% 20071 
242
242
Ameriquest Mortgage Securities Inc., Series 2004-R4, Class A-4, 5.803% 20342
27
27
   
1,330,768
     
     
MUNICIPALS — 0.80%
    
State of California, Golden State Tobacco Securitization Corp., Tobacco Settlement
   
     Asset- backed Bonds, Series 2003-A-1, 6.25% 2033
$ 64,975
$ 70,285
State of Wisconsin, Badger Tobacco Asset Securitization Corp., Tobacco Settlement
   
     Asset- backed Bonds, 6.125% 2027
36,935
39,185
State of South Dakota, Educational Enhancement Funding Corp., Tobacco Settlement
   
     Asset- backed Bonds, Series 2002-A, Class A, 6.72% 2025
27,291
26,608
State of Louisiana, Tobacco Settlement Financing Corp., Tobacco Settlement Asset-backed Bonds,
   
     Series 2001-A, Class A, 6.36% 2025
18,067
17,956
State of Louisiana, Tobacco Settlement Authority, Asset-backed Bonds,
   
     Series 2001-B, 5.50% 2030
10,000
10,264
State of California, Los Angeles County Metropolitan Transportation Authority, General Revenue
   
     Refunding Bonds (Workers’ Compensation Funding Program), Series 2003, AMBAC insured, 3.83% 2008
 5,000  4,840
State of California, Los Angeles County Metropolitan Transportation Authority, General Revenue
   
Refunding Bonds (Workers’ Compensation Funding Program), Series 2003,
   
     AMBAC insured, 4.56% 2010
5,000
4,812
California Maritime Infrastructure Authority, Taxable Lease Revenue Bonds (San Diego Unified
   
     Port Dist.-South Bay Plant Acquisition), Series 1999, 6.63% 20091
8,861
8,922
State of Washington, Tobacco Settlement Authority, Asset-backed Bonds,
   
     Series 2002, 6.50% 2026
6,625
7,206
State of New York, Housing Finance Agency, State Personal Income Tax Revenue Bonds
   
     (Economic Development and Housing), Series B, 2.88% 2007
2,000
1,963
State of New York, Housing Finance Agency, State Personal Income Tax Revenue Bonds
   
     (Economic Development and Housing), Series B, 3.09% 2007
2,200
2,138
   
194,179
     
Total bonds & notes (cost: $22,472,953,000)
  
22,187,879
     
     
     
 
Shares or
  
Convertible securities — 0.39%
principal amount
  
     
INFORMATION TECHNOLOGY — 0.11%
    
Conexant Systems, Inc. 4.00% convertible notes 2007
$14,700,000
14,535
SCI Systems, Inc. 3.00% convertible debentures 2007
$12,000,000
11,670
   
26,205
     
TELECOMMUNICATION SERVICES — 0.09%
    
American Tower Corp. 5.00% convertible debentures 2010
$21,000,000
20,974
     
     
UTILITIES — 0.07%
    
AES Trust VII 6.00% convertible preferred 2008
351,450
16,957
     
     
CONSUMER DISCRETIONARY — 0.06%
    
Amazon.com, Inc. 6.875% PEACS convertible notes 2010
€ 9,005,000
11,706
Ford Motor Co. Capital Trust II 6.50% cumulative convertible trust preferred 2032
128,100
3,561
   
15,267
     
FINANCIALS — 0.01%
    
Equity Office Properties Trust, Series B, 5.25% convertible preferred 2008
70,400
3,788
     
     
MISCELLANEOUS — 0.05%
    
Other convertible securities in initial period of acquisition
  
12,205
     
     
Total convertible securities (cost: $83,436,000)
  
95,396
   
unaudited
     
   
Market value
Preferred securities — 3.82%
Shares
(000)
     
FINANCIALS — 3.82%
    
Fuji JGB Investment LLC, Series A, 9.87% noncumulative preferred1,2
121,238,000
$129,873
IBJ Preferred Capital Co. LLC, Series A, 8.79% noncumulative preferred1,2
57,500,000
60,450
HSBC Capital Funding LP, Series 1, 9.547% noncumulative step-up perpetual preferred1,2
85,750,000
96,175
HSBC Capital Funding LP, Series 2, 10.176% noncumulative step-up perpetual preferred1,2
25,000,000
34,260
HSBC Capital Funding LP 8.03% noncumulative preferred2
20,000,000
30,077
HSBC Holdings PLC 4.61%1,2
6,330,000
5,703
BNP Paribas 5.186% noncumulative1,2
53,610,000
48,690
BNP U.S. Funding LLC, Series A, 7.738% noncumulative preferred1,2
21,750,000
22,287
BNP Paribas Capital Trust 9.003% noncumulative trust preferred1,2
15,000,000
16,710
Shinsei Finance II (Cayman) Ltd. 7.16% noncumulative preferred1,2
67,475,000
64,420
Swire Pacific Capital Ltd. 8.84% cumulative guaranteed perpetual capital securities1
1,670,000
47,125
Swire Pacific Offshore Financing Ltd. 9.33% cumulative guaranteed perpetual preferred capital securities1
230,000
5,793
Fannie Mae, Series O, 7.065% preferred1,2
900,000
48,544
Wachovia Capital Trust III 5.80%
45,000,000
43,712
RBS Capital Trust I 4.709% noncumulative trust preferred2
33,585,000
30,401
Royal Bank of Scotland Group PLC 6.625%2
4,700,000
6,452
ING Capital Funding Trust III 8.439% noncumulative preferred2
32,020,000
35,070
National Bank of Canada, Series A, 8.35% exchangeable preferred depositary shares
1,200,000
31,524
Tokai Preferred Capital Co. LLC, Series A, 9.98% noncumulative preferred1,2
12,000,000
12,878
MUFG Capital Finance 1 Ltd. 6.346% noncumulative preferred2
9,375,000
9,032
MUFG Capital Finance 2 Ltd. 4.85% noncumulative preferred2
4,650,000
5,663
Chuo Mitsui Trust and Banking Co., Ltd. 5.506%1,2
24,970,000
22,809
SB Treasury Co. LLC, Series A, 9.40% noncumulative preferred1,2
17,638,000
18,744
Société Générale 7.85%1,2
17,705,000
18,003
Weingarten Realty Investors, Series D, 6.75% preferred 2008
400,000
10,000
Weingarten Realty Investors, Series E, 6.95% cumulative redeemable preferred depositary shares
250,000
6,200
Standard Chartered Capital Trust I 8.16%2
10,000,000
14,388
DBS Capital Funding Corp., Series A, 7.657% noncumulative guaranteed preference shares1,2
11,250,000
11,996
HVB Funding Trust VIII 7.055%2
7,400,000
10,534
Deutsche Bank Capital Funding Trust VII 5.628% noncumulative trust preferred1,2
10,000,000
9,278
HBOS Capital Funding LP, Series A, 6.461% noncumulative preferred2
3,000,000
5,833
ACE Ltd., Series C, 7.80% preferred depositary shares
217,355
5,619
New Plan Excel Realty Trust, Inc., Series D, 7.80% preferred cumulative step-up premium rate
112,500
5,576
Nationwide Health Properties, Inc., Series A, 7.677% preferred cumulative step-up premium rate
50,000
5,055
Westpac Capital Trust IV 5.256%1,2
4,500,000
4,046
   
932,920
     
CONSUMER STAPLES — 0.00%
    
Great Atlantic & Pacific Tea Co., Inc. 9.375% QUIBS preferred 2039
18,500
463
     
     
INFORMATION TECHNOLOGY — 0.00%
    
ZiLOG, Inc. - MOD III Inc., units4,10,11
1,447
215
     
     
CONSUMER DISCRETIONARY — 0.00%
    
Adelphia Communications Corp., Series B, 13.00% preferred 200910
50,565
25
     
     
TELECOMMUNICATION SERVICES — 0.00%
    
XO Holdings, Inc. 14.00% preferred 20094,7,10
24
0
     
     
Total preferred securities (cost: $884,423,000)
  
933,623
     
   
unaudited
     
   
Market value
Common stocks — 0.38%
Shares
(000)
     
UTILITIES — 0.28%
    
Drax Group PLC10
4,430,290
$67,262 
     
     
FINANCIALS — 0.04%
    
Beverly Hills Bancorp Inc.
883,800
8,502
     
     
TELECOMMUNICATION SERVICES — 0.03%
    
Dobson Communications Corp., Class A1,10
1,051,359
8,127
XO Holdings, Inc.10
7,614
34
   
8,161
     
INDUSTRIALS — 0.02%
    
DigitalGlobe Inc.1,4,10
3,984,039
3,984
Delta Air Lines, Inc.1,10
312,961
235
   
4,219
     
INFORMATION TECHNOLOGY — 0.01%
    
ZiLOG, Inc.10,11
879,000
2,971
     
     
HEALTH CARE — 0.00%
    
Clarent Hospital Corp.4,10,11
331,291
83
     
     
MISCELLANEOUS — 0.00%
    
Other common stocks in initial period of acquisition
  
282
     
     
Total common stocks (cost: $55,863,000)
  
91,480
     
     
     
     
     
Warrants — 0.00%
    
     
TELECOMMUNICATION SERVICES — 0.00%
    
XO Holdings, Inc., Series A, warrants, expire 201010
15,233
13
XO Holdings, Inc., Series B, warrants, expire 201010
11,424
5
XO Holdings, Inc., Series C, warrants, expire 201010
11,424
4
GT Group Telecom Inc., warrants, expire 20101,4,10
2,750
0
     
     
Total warrants (cost: $143,000)
  
22
     
   
unaudited
     
 
Principal amount
Market value
Short-term securities — 5.62%
(000)
(000)
     
CAFCO, LLC 5.02%-5.07% due 7/12-7/25/20061 
$166,800
$ 166,331
Bank of America Corp. 5.025% due 7/10/2006
50,000
49,930
Bank of America Corp. 5.165% due 8/18/20069
50,000
49,657
Ranger Funding Co. LLC 5.06% due 7/17/20061,9
50,000
49,617
Ranger Funding Co. LLC 5.30% due 8/21/20061 
15,500
15,463
Federal Home Loan Bank 5.02%-5.07% due 8/11-8/30/20069
133,100
132,208
Federal Home Loan Bank 4.97% due 7/26/06
20,600
20,526
Variable Funding Capital Corp. 5.01%-5.12% due 7/13-7/27/20061 
122,200
121,923
Variable Funding Capital Corp. 5.30% due 8/25/20061,9
7,170
7,111
Clipper Receivables Co., LLC 4.96%-5.15% due 7/14-7/20/20061 
121,000
120,701
International Lease Finance Corp. 5.00%-5.06% due 7/7-7/19/2006
100,000
99,817
Park Avenue Receivables Co., LLC 5.04%-5.05% due 7/6-7/12/20061 
71,255
71,178
Park Avenue Receivables Co., LLC 5.21% due 8/24/20061,9
25,270
25,073
Wal-Mart Stores Inc. 5.24% due 8/22/20061,9
50,000
49,614
Wal-Mart Stores Inc. 4.96%-5.05% due 7/11-7/18/20061 
43,810
43,725
Wells Fargo Bank, N.A. 5.02% due 7/5/2006
50,000
50,000
Hershey Co. 4.99%-5.00% due 7/11-7/24/20061 
50,000
49,888
BellSouth Corp. 5.25% due 8/3/20061,9
45,000
44,777
HSBC Finance Corp. 5.02% due 7/26/2006
43,300
43,151
Anheuser-Busch Companies, Inc. 5.16% due 8/16/20061,9
39,200
38,943
UnionBanCal Commercial Funding Corp. 5.34% due 8/28/20069
31,250
31,247
Gannett Co. 5.00% due 7/7/20061
28,200
28,173
General Dynamics Corp. 5.13% due 8/10/20061,9
25,000
24,854
Triple-A One Funding Corp. 5.13% due 7/10/20061
13,163
13,144
Concentrate Manufacturing Co. of Ireland 4.96% due 7/5/20061
11,000
10,992
Three Pillars Funding, LLC 5.28% due 7/3/20061
8,300
8,296
Coca-Cola Co. 4.93% due 7/6/2006
4,800
4,796
Freddie Mac 4.956% due 7/27/2006
1,470
1,464
     
     
Total short-term securities (cost: $1,372,577,000)
  
1,372,599
     
Total investment securities (cost: $24,869,395,000)
  
$24,680,999
Other assets less liabilities
  
(258,791)
     
Net assets
  
$24,422,208



“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.


1 Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require
registration. The total value of all such restricted securities was $5,486,438,000, which represented 22.46% of the net assets of the fund.
2 Coupon rate may change periodically.
3 Pass-through securities backed by a pool of mortgages or other loans on which principal payments are periodically made.
Therefore, the effective maturities are shorter than the stated maturities.
4 Valued under fair value procedures adopted by authority of the board of directors.
5 Step bond; coupon rate will increase at a later date.
6 Scheduled interest and/or principal payment was not received.
7 Payment in kind; the issuer has the option of paying additional securities in lieu of cash.
8 Index-linked bond whose principal amount moves with a government retail price index.
9 This security, or a portion of this security, has been segregated to cover funding requirements on investment transactions settling in the future.
10Security did not produce income during the last 12 months.
11Represents an affiliated company as defined under the Investment Company Act of 1940.

MFGEFP-908-0806-S6920


ITEM 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.


ITEM 8 - Portfolio Managers of Closed-End Management Investment Companies

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.


ITEM 9 - Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable to this Registrant, insofar as the Registrant is not a closed-end management investment company.


ITEM 10 - Submission of Matters to a Vote of Security Holders

There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors since the Registrant last submitted a proxy statement to its shareholders. The procedures are as follows. The Registrant has a Nominating and Governance Committee comprised solely of persons who are not considered ‘‘interested persons’’ of the Registrant within the meaning of the Investment Company Act of 1940, as amended. The committee periodically reviews such issues as the Board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full Board of Directors. While the committee normally is able to identify from its own resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the Board. Such suggestions must be sent in writing to the Nominating and Governance Committee of the Registrant, c/o the Registrant’s Secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the Nominating and Governance Committee.


ITEM 11 - Controls and Procedures

(a)
The Registrant’s Principal Executive Officer and Principal Financial Officer have concluded, based on their evaluation of the Registrant’s disclosure controls and procedures (as such term is defined in Rule 30a-3 under the Investment Company Act of 1940), that such controls and procedures are adequate and reasonably designed to achieve the purposes described in paragraph (c) of such rule.
   
(b)
There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.


ITEM 12 - Exhibits

(a)(1)
Not applicable for filing of semi-annual reports to shareholders.
   
(a)(2)
The certifications required by Rule 30a-2 of the Investment Company Act of 1940, as amended, and Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are attached as exhibits hereto.


 
 
 

SIGNATURES

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

 
THE BOND FUND OF AMERICA, INC.
   
 
By /s/ Abner D. Goldstine
 
Abner D. Goldstine, President and PEO
   
 
Date: September 7, 2006



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


By /s/ Abner D. Goldstine
Abner D. Goldstine, President and PEO
 
Date: September 7, 2006



By /s/ Susi M. Silverman
Susi M. Silverman, Treasurer and PFO
 
Date: September 7, 2006