N-Q 1 aminc_nq.htm QUARTERLY NOTICE OF PORTFOLIO HOLDINGS Quarterly Notice of Portfolio Holdings





UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


 
FORM N-Q
 
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
 




Investment Company Act file number 811-05642



American Income Fund, Inc.
(Exact name of registrant as specified in charter)



800 Nicollet Mall, Minneapolis, MN 55402
(Address of principal executive offices) (Zip code)



Charles D. Gariboldi, Jr., 800 Nicollet Mall, Minneapolis, MN 55402 
(Name and address of agent for service)



800-677-3863
Registrant's telephone number, including area code



Date of fiscal year end: 08/31/07



Date of reporting period: 11/30/06
 


 

Schedule of INVESTMENTS November 30, 2006 (unaudited)
 
American Income Fund
 

Description of Security
 
 
Principal
                           Value /
Shares
 
 
Market
Value (a)
(Percentages of each investment category relate to net assets)
       
         
High Yield Corporate Bonds - 35.9%
       
 
Basic Industry - 4.8%
       
   
Coeur D'Alene Mines, 1.25%, 1/15/24
 
$     100,000
 
$     99,375
   
FMG Finance Property, 10.00%, 9/1/13 (c)
 
250,000
 
245,625
   
Griffin Coal Mining, 9.50%, 12/1/16 (c)
 
200,000
 
201,500
   
Hexion, 9.75%, 11/15/14 (c)
 
250,000
 
253,750
   
Huntsman ICI Chemicals, 10.13%, 7/1/09
 
105,000
 
106,575
   
Ineos Group Holdings, 8.50%, 2/15/16 (c)
 
250,000
 
241,250
   
LPG International, 7.25%, 12/20/15
 
250,000
 
249,000
   
Lyondell Chemical Company, 8.00%, 9/15/14
 
250,000
 
257,812
   
NELL AF SARL, 8.38%, 8/15/15 (c)
 
250,000
 
255,937
   
Newark Group, 9.75%, 3/15/14
 
200,000
 
200,000
 
 
Noble Group, 6.63%, 3/17/15 (c)
 
250,000
 
227,177
   
OM Group, 9.25%, 12/15/11
 
300,000
 
312,000
   
Polyone, 8.88%, 5/1/12
 
200,000
 
202,750
 
 
Ryerson, 8.25%, 12/15/11
 
250,000
 
247,500
 
 
Sappi Papier Holding, 7.50%, 6/15/32 (c)
 
250,000
 
232,369
 
 
Sino Forest, 9.13%, 8/17/11 (c)
 
250,000
 
265,937
 
 
Stone Container, 8.38%, 7/1/12
 
200,000
 
193,500
 
 
Vedanta Resource, 6.63%, 2/22/10 (c)
 
250,000
 
245,625
 
 
       
4,037,682
           
 
Capital Goods - 2.1%
       
   
Allied Waste North America, 6.13%, 2/15/14
 
300,000
 
284,250
   
Case New Holland, 9.25%, 8/1/11
 
200,000
 
212,250
   
L-3 Communications, 5.88%, 1/15/15
 
200,000
 
194,000
   
Owens-Broadway Glass Container, 8.88%, 2/15/09
 
500,000
 
512,500
 
 
Sequa, 9.00%, 8/1/09
 
500,000
 
531,875
 
 
       
1,734,875
           
 
Communications - 6.6%
       
   
C & M Finance, 8.10%, 2/1/16 (c)
 
250,000
 
257,812
   
CCH, 11.00%, 10/1/15
 
250,000
 
245,000
   
Charter Communications Holdings, 8.00%, 4/30/12 (c)
 
400,000
 
411,000
   
Cricket Communications, 9.38%, 11/1/14 (c)
 
250,000
 
255,625
   
CSC Holdings, Series B, 7.63%, 4/1/11
 
250,000
 
254,687
   
Dex Media, 8.00%, 11/15/13
 
200,000
 
204,000
   
Echostar,
7.00%, 10/1/13 (c)
 
200,000
 
199,500
   
6.63%, 10/1/14
 
300,000
 
291,000
   
Horizon PCS, 11.38%, 7/15/12
 
200,000
 
222,000
   
Houghton-Mifflin, 0.00% through 10/15/08 thereafter 11.50%, 10/15/13 (b)
 
400,000
 
381,000
   
Idearc, 8.00%, 11/15/16 (c)
 
250,000
 
254,062
   
Intelsat, 8.63%, 1/15/15
 
250,000
 
259,687
   
Level 3 Financing, 12.25%, 3/15/13
 
250,000
 
282,500
   
MetroPCS Wireless, 9.25%, 11/1/14 (c)
 
250,000
 
254,062
 
 
Panamsat, 9.00%, 6/15/16 (c)
 
250,000
 
262,812
 
 
Panamsat, 9.00%, 8/15/14
 
195,000
 
204,750
 
 
Qwest, 8.88%, 3/15/12
 
400,000
 
445,500
 
 
Qwest Capital Funding, 7.00%, 8/3/09
 
400,000
 
406,000
 
 
Time Warner Telecommunications Holdings, 9.25%, 2/15/14
 
175,000
 
186,375
 
 
Vimplecom, 8.25%, 5/23/16 (c)
 
250,000
 
260,000
 
 
 
 
 
 
5,537,372
           
 
Consumer Cyclical - 4.7%
       
   
Ford Motor,
7.00%, 10/1/13
 
500,000
 
479,576
   
7.45%, 7/16/31
 
250,000
 
197,812
   
French Lick Resorts & Casino, 10.75%, 4/15/14 (c)
 
250,000
 
236,250
   
Galaxy Entertainment, 9.88%, 12/15/12 (c)
 
250,000
 
266,875
   
General Motors Acceptance,
       
   
5.63%, 5/15/09
 
300,000
 
298,115
   
6.75%, 12/1/14
 
300,000
 
307,627
   
General Motors, 8.25%, 7/15/23
 
250,000
 
227,812
   
Harrahs, 5.63%, 6/1/15
 
250,000
 
214,466
   
Hovnanian K Enterprises, 6.25%, 1/15/16
 
250,000
 
231,875
   
Libbey Glass, 12.44%, 6/1/11 (c) (f)
 
200,000
 
212,500
 
 
Mandalay Resort, Series B, 10.25%, 8/1/07
 
250,000
 
256,875
 
 
Mohegan Tribal Gaming, 6.38%, 7/15/09
 
250,000
 
249,062
 
 
Neiman Marcus Group, 10.38%, 10/15/15
 
300,000
 
331,875
 
 
Six Flags, 9.75%, 4/15/13
 
250,000
 
230,937
 
 
Wynn Las Vegas, 6.63%, 12/1/14
 
250,000
 
246,250
         
3,987,907
           
 
Consumer Non Cyclical - 2.4%
       
   
Delhaize America, 9.00%, 4/15/31
 
250,000
 
303,263
   
HCA,
6.75%, 7/15/13
 
250,000
 
220,000
   
9.63%, 11/15/16 (c)
 
200,000
 
209,500
   
Healthsouth, 10.75%, 6/15/16 (c)
 
250,000
 
266,250
 
 
RJ Reynolds Tobacco Holdings, 6.50%, 7/15/10 (c)
 
250,000
 
255,144
 
 
Stater Brothers Holdings, 8.13%, 6/15/12
 
250,000
 
252,500
 
 
Supervalue, 7.50%, 5/15/12
 
250,000
 
259,077
 
 
Tenet Healthcare, 9.25%, 2/1/15
 
250,000
 
245,000
         
2,010,734
           
 
Electric - 3.5%
       
 
 
AES Corp, 9.50%, 6/1/09
 
250,000
 
267,500
   
AVA Capital Trust III, 6.50%, 4/1/34 (f)
 
300,000
 
299,920
   
Allegheny Energy Supply, 7.80%, 3/15/11
 
200,000
 
212,500
   
CMS Energy, 8.50%, 4/15/11
 
500,000
 
546,250
   
Dynegy-Roseton Danskammer, Series B, 7.67%, 11/8/16
 
200,000
 
202,000
   
Mission Energy Holdings, 13.50%, 7/15/08
 
250,000
 
277,500
   
Nevada Power, 9.00%, 8/15/13
 
262,000
 
284,361
   
NRG Energy, 7.38%, 2/1/16
 
300,000
 
300,000
 
 
Reliant Energy, 9.50%, 7/15/13
 
250,000
 
265,938
 
 
Teco Energy, 7.20%, 5/1/11
 
250,000
 
263,750
         
2,919,719
           
 
Energy - 1.3%
       
   
Baytex Energy, 9.63%, 7/15/10
 
250,000
 
260,000
   
Bluewater Finance, 10.25%, 2/15/12
 
290,000
 
304,500
 
 
Chesapeake Energy, 7.00%, 8/15/14
 
250,000
 
251,250
 
 
Tesoro, 6.625%, 11/1/15 (c)
 
250,000
 
247,500
 
 
       
1,063,250
             
 
Industrials Other - 0.4%
       
 
 Chart Industries, 9.13%, 10/15/15 (c)
 
300,000
 
313,500
             
             
   Miscellaneous - 2.8%        
 
 Dow Jones
       
 
 Series 5-T2, 7.25%, 12/29/10
 
1,317,074
 
1,348,354
 
 Series 6-T1, 8.63%, 6/29/11
 
1,000,000
 
1,043,750
         
2,392,104
           
 
Natural Gas - 2.0%
       
   
El Paso, 7.75%, 6/15/10
 
200,000
 
209,000
   
SemGroup, 8.75%, 11/15/15 (c)
 
250,000
 
252,500
   
Southern Union, 7.20%, 11/1/66 (f)
 
200,000
 
201,363
   
Targa Resources, 8.50%, 11/1/13 (c)
 
250,000
 
252,500
   
Tennessee Gas Pipeline, 7.50%, 4/1/17
 
250,000
 
271,889
 
 
Williams, 7.13%, 9/1/11
 
500,000
 
517,500
 
 
       
1,704,752
             
  Real Estate - 0.6%         
    Greentown China Holdings, 9.00%, 11/8/13 (c)  
200,000 
  201,250 
    Senior Housing Property Trust - REIT, 8.63%, 1/15/12    300,000    324,750 
            526,000 
 
Sovereigns - 2.9%
       
   
Federal Republic of Brazil,
       
   
10.25%, 6/17/13
 
500,000
 
621,000
   
6.00%, 1/17/17
 
250,000
 
246,875
   
Republic of Panama 7.25%, 3/15/15
 
500,000
 
538,750
   
Republic of Philippines, 9.50%, 2/2/30
 
300,000
 
393,000
 
 
Republic of Uruguay, 8.00%, 11/18/22
 
250,000
 
278,750
 
 
Republic of Venezuela, 9.25%, 9/15/27
 
300,000
 
374,700
           
2,453,075
             
 
Technology - 1.3%
       
 
 
Compucom Systems, 12.00%, 11/1/14 (c)
 
250,000
 
257,500
 
 
Freescale Semiconductor, 10.13%, 12/15/16 (c)
 
100,000
 
101,125
   
Lucent Technologies, 6.45%, 3/15/29
 
250,000
 
225,000
 
 
NXP BV/NXP Funding, 9.50%, 10/15/15 (c)
 
250,000
 
256,563
 
 
Seagate Technology HDD Holdings, 6.80%, 10/1/16
 
250,000
 
248,125
           
1,088,313
             
 
Transportation - 0.9%
       
   
Avis Budget Car Rental, 7.63%, 5/15/14 (c)
 
250,000
 
241,563
   
Continental Airlines, 7.57%, 3/15/20
 
303,417
 
303,038
   
Hertz, 8.88%, 1/1/14 (c)
 
250,000
 
259,375
           
803,976
             
   
Total High Yield Corporate Bonds
(cost: $29,691,344)
     
30,573,259
         
U.S. Government Agency Mortgage-Backed Securities - 40.3%
       
 
Adjustable Rate (f) - 1.0%
       
   
Federal Home Loan Mortgage Corporation, 6.28%, 9/1/18, #605911
 
211
 
214
   
Federal National Mortgage Association,
       
   
6.34%, 7/1/27, #70179
 
2,577
 
2,569
   
6.55%, 10/1/32, #725110 (h)
 
482,765
 
490,138
   
Government National Mortgage Association, 5.13%, 12/20/22, #8096 (h)
 
337,567
 
338,926
           
831,847
             
 
Fixed Rate - 39.3%
       
   
Federal Home Loan Mortgage Corporation, 6.50%, 8/1/30, #C43641
 
118,247
 
121,609
   
Federal Home Loan Mortgage Corporation Gold,
       
   
6.50%, 11/1/28, #C00676
 
334,316
 
343,819
   
5.50%, 10/1/33, #A15120 (h)
 
1,187,340
 
1,186,080
   
Federal National Mortgage Association,
       
   
4.00%, 11/1/10, #254956 (h)
 
1,875,981
 
1,822,456
   
6.00%, 12/1/13, #190179
 
373,750
 
376,032
   
7.50%, 5/1/15, #537440
 
33,375
 
34,586
   
7.00%, 6/1/17, #254384 (h)
 
280,766
 
288,952
   
7.00%, 7/1/17, #254414 (h)
 
354,364
 
364,695
   
6.00%, 9/1/17, #653368 (h)
 
287,868
 
293,379
   
5.00%, 11/1/18, #750989 (h)
 
596,993
 
592,880
   
5.00%, 2/1/19, #767182 (h)
 
948,872
 
942,335
   
5.00%, 2/1/21, #745279 (h)
 
911,416
 
903,232
   
5.50%, 4/1/21, #840466 (h)
 
1,416,587
 
1,424,361
   
6.00%, 5/1/29, #323702 (h)
 
566,812
 
575,826
   
6.50%, 5/1/31, #540814
 
127,949
 
131,333
   
7.00%, 9/1/31, #596680 (h)
 
470,268
 
482,881
   
7.00%, 3/1/32, #635970
 
228,978
 
235,967
   
6.50%, 6/1/32, #596712 (h)
 
639,013
 
652,185
   
5.50%, 6/1/33, #709700
 
811,048
 
809,860
   
5.50%, 11/1/33, #555967 (h)
 
1,997,558
 
1,994,633
   
6.00%, 11/1/33, #743642
 
601,172
 
609,022
   
5.50%, 12/1/33, #756202 (h)
 
1,171,111
 
1,169,396
   
6.00%, 1/1/34, #763687 (h)
 
980,477
 
992,457
   
5.50%, 2/1/34, #766070 (h)
 
993,646
 
991,681
   
6.00%, 1/1/35, #810225 (h)
 
839,426
 
849,683
   
6.50%, 2/1/35, #735273 (h)
 
1,143,162
 
1,171,983
   
5.50%, 3/1/35, #815979 (h)
 
1,748,016
 
1,742,514
   
6.00%, 6/1/36, #882685
 
3,918,127
 
3,960,770
   
Federal National Mortgage Association,
6.00%, 1/1/37 (i)
 
5,500,000
 
5,597,966
   
Government National Mortgage Association,
       
   
6.50%, 4/15/33, #602233
 
403,684
 
415,982
   
5.50%, 8/15/33, #604567 (h)
 
1,333,535
 
1,337,267
   
6.00%, 7/15/34, #631574
 
683,734
 
695,329
           
33,111,151
             
   
Total U.S. Government Agency Mortgage-Backed Securities
(cost: $34,096,908)
     
33,942,998
             
Collateralized Mortgage Obligation -- Private Mortgage-Backed Securities - 33.1%
       
 
Adjustable Rate (f) - 8.7%
       
   
California Federal Bank Los Angeles, Series 1991-C12, Class A, 6.78%, 7/15/21 (g)
 
12,553
 
12,824
   
Credit Suisse First Boston Mortgage Securities Corporation,
       
   
Series 2003-8, Class DB1, 6.25%, 4/25/33
 
1,501,142
 
1,512,062
   
Goldman Sachs Mortgage Securities,
       
   
Series 2005-AR1, Class B1, 4.88%, 1/25/35
 
1,475,376
 
1,461,023
   
Series 2003-10, Class 1A1, 4.72%, 10/25/33 (h)
 
1,429,001
 
1,397,624
   
IndyMac Indx Mortgage Loan Trust,  Series 2006-AR13, Class A3, 6.11%, 7/25/36
 
1,500,000
 
1,526,250
   
Sequoia Mortgage Trust, Series 2004-5, Class X1, 0.80%, 6/20/34 (d)
 
31,208,022
 
188,191
   
Washington Mutual MCS Mortgage, Series 2003-AR3, Class B1, 5.33%, 6/25/33
 
1,003,408
 
1,001,878
   
Wells Fargo Mortgage-Backed Securities Trust, Series 2003-D, Class A1, 4.80%, 2/25/33
 
230,677
 
232,060
           
7,331,912
             
   
Fixed Rate - 24.4%
       
   
Citicorp Mortgage Securities,
       
   
Series 2004-5, Class B3, 5.28%, 8/25/34
 
1,202,558
 
1,114,444
 
 
Countrywide Alternative Loan Trust,  Series 2005-7CB, Class 2A4, 5.50%, 4/25/35
 
750,000
 
749,312
   
Credit Suisse First Boston Mortgage Securities Corporation,
       
   
Series 2005-11, Class 6A7, 6.00%, 12/25/35
 
1,000,000
 
1,019,473
   
Series 2005-12, Class DB4, 5.84%, 1/25/36
 
830,077
 
755,117
   
GMAC Mortgage Corporation Loan Trust,
       
   
Series 2003-GH2, Class A3, 5.00%, 3/25/23
 
620,017
 
616,779
   
Series 2003-J9, Class A15, 5.00%, 1/25/34
 
1,325,000
 
1,299,122
   
Series 2004-J5, Class A7, 6.50%, 1/25/35
 
941,418
 
953,774
   
Goldman Sachs Mortgage Securities,
       
   
Series 2001-2, Class A, 7.50%, 6/19/32 (c)
 
360,729
 
376,243
   
Series 2005-4F, Class B1, 5.73%, 5/25/35
 
1,281,570
 
1,279,621
   
Series 2003-1, Class B2, 6.90%, 3/25/43
  1,889,484    1,950,003 
   
Morgan Stanley Mortgage Loan Trust, Series 2004-9, Class 1A, 6.21%, 10/25/34
 
1,461,999
 
1,473,878
   
Nomura Asset Acceptance Corporation, Series 2004-R2, Class B1, 6.74%, 10/25/34 (c)
 
1,100,169
 
1,121,433
   
Prime Mortgage Trust,
       
   
Series 2004-2, Class B2, 5.04%, 11/25/19
 
387,925
 
375,352
   
Series 2004-2, Class B3, 5.04%, 11/25/19
 
290,719
 
275,226
   
Residential Accredit Loans, Series 2003-QS12, Class M1, 5.00%, 6/25/18
 
955,323
 
940,844
   
Residential Asset Mortgage Products,
       
   
Series 2003-SL1, Class M2, 7.32%, 4/25/31
 
1,040,069
 
1,037,427
   
Series 2004-SL4, Class A3, 6.50%, 7/25/32
 
1,150,919
 
1,174,370
   
Structured Asset Securities Corporation, Series 2005-6, Class 5A6, 5.00%, 5/25/35
 
1,000,000
 
998,714
   
Washington Mutual MSC Mortgage, Series 2003-MS9, Class CB2, 7.45%, 4/25/33
 
399,824
 
392,685
   
Wells Fargo Mortgage-Backed Securities Trust,
       
   
Series 2003-7, Class A3, 4.50%, 8/25/18
 
794,157
 
781,837
   
Series 2004-7, Class 2A2, 5.00%, 7/25/19
 
764,473
 
753,961
   
Series 2004-7, Class B2, 4.72%, 7/25/19
 
490,151
 
459,179
   
Series 2004-7, Class B3, 4.72%, 7/25/19
 
653,241
 
624,824
           
20,523,618
             
   
Total Collateralized Mortgage Obligation -- Private Mortgage-Backed Securities
(cost: $28,064,459)
     
27,855,530
         
Collateralized Mortgage Obligation -- U.S. Agency Mortgage-Backed Securities - 12.0%
       
 
Fixed Rate - 7.2%
       
   
Federal Home Loan Mortgage Corporation,
       
   
Series 2690, Class OE, 5.00%, 11/15/28
 
1,274,000
 
1,262,452
   
Series 2972, Class KA, 4.50%, 6/15/18
 
912,931
 
896,156
   
Federal National Mortgage Association,
       
   
Series 2004-27, Class HB, 4.00%, 5/25/19 (h)
 
1,923,137
 
1,748,360
   
Series 2004-29, Class WG, 4.50%, 5/25/19 (h)
 
942,115
 
895,236
   
Series 2004-90, Class GA, 4.35%, 3/25/34 (h)
 
838,226
 
815,209
   
Series 2002-WI, Class 2A, 7.50%, 2/25/42
 
472,059
 
491,858
           
6,109,271
             
 
Z-Bonds (e) - 4.7%
       
 
  Federal Home Loan Mortgage Corporation, Series 2676, Class GZ, 4.50%, 9/15/33 (h)
 
1,747,949
 
1,439,516
   
Government National Mortgage Association, Series 2001-8, Class Z, 6.50%, 3/20/31 (h)
 
2,457,614
 
2,532,596
           
3,972,112
             
   
Total Collateralized Mortgage Obligation -- U.S. Agency Mortgage-Backed Securities
(cost: $9,710,271)
     
10,081,383
             
Asset-Backed Securities - 8.6%
       
 
Home Equity - 6.0%
       
   
First Franklin Mortgage Loan, Series 2004-FFA, Class M2F, 4.62%, 3/25/24 (b)
 
816,635
 
812,994
   
Residential Funding Mortgage Securities I,
       
   
Series 2004-HI2, Class A4, 5.24%, 9/25/18
 
1,970,956
 
1,960,738
   
Series 2003-HI4, Class M1, 5.53%, 2/25/29 (b)
 
2,327,000
 
2,315,026
           
5,088,758
           
 
Manufactured Housing - 1.3%
       
   
Green Tree Financial, Series 1994-2, Class A5, 8.30%, 5/15/19
 
348,843
 
349,200
   
Origen Manufactured Housing, Series 2005-B, Class M1, 5.99%, 1/15/37
 
750,000
 
753,640
           
1,102,840
           
 
Other - 1.3%
       
   
Crown Castle Towers, 5.61%, 6/15/35
 
1,000,000
 
1,000,433
   
GRP/AG Real Estate Asset Trust,
       
   
Series 2004-2, Class A, 4.21%, 7/25/34 (b) (c)
 
18,483
 
18,291
   
Series 2005-1, Class A, 4.85%, 1/25/35 (b) (c)
 
46,954
 
46,582
           
1,065,306
             
   
Total Asset-Backed Securities
(cost: $7,305,589)
     
7,256,904
             
High Grade Corporate Bonds - 2.6%
       
 
Basic Industry - 0.8%
       
   
Southern Copper, 7.50%, 7/27/35
 
400,000
 
438,788
   
Vale Overseas, 6.25%, 1/11/16
 
250,000
 
252,744
           
691,532
           
 
Consumer Non Cyclical - 0.6%
       
   
Fisher Scientific International, 6.75%, 8/15/14
 
500,000
 
515,392
             
 
Energy - 0.2%
       
 
 
GAZ Capital, 6.21%, 11/22/16 (c)
 
200,000
 
201,250
             
 
Sovereign - 0.4%
       
   
United Mexican States, 5.63%, 1/15/17
 
300,000
 
301,650
             
 
Transportation - 0.6%
       
   
American Airlines, Series 99-1, 7.02%, 10/15/09
 
500,000
 
520,000
             
   
Total High Grade Corporate Bonds
(cost: $2,113,012)
     
2,229,824
             
Preferred Stocks - 0.3%
       
 
Real Estate Investment Trusts - 0.3%
       
 
 
National Retail Properties, Series C
 
4,000
 
102,000
 
 
Northstar Realty Finance, Series A
 
4,000
 
103,200
   
Thornburg Mortgage, Series D
 
4,000
 
98,600
             
   
Total Preferred Stocks
(cost: $302,400)
     
303,800
             
Municipal Bond- 0.9%
       
   
Sullivan County, Tennessee, Health, Educational, and Housing Facilities Board Hospital
Revenue, Wellmont Health-B, 6.95%, 9/1/16
 (cost: $750,000)
 
750,000
 
772,268
             
Short-Term Investments - 2.6%
       
 
Money Market Fund (k) - 2.5%
       
   
First American Prime Obligations Fund, Class Z
 
2,051,659
 
2,051,659
             
 
U.S. Treasury Obligation (j) - 0.1%
       
   
U.S. Treasury Bill, 4.86%, 12/7/06
 
110,000
 
109,912
             
   
Total Short-Term Investments
(cost: $2,161,571)
     
2,161,571
             
   
Total Investments in Securities (l) - 136.7%
(cost: $114,195,554)
     
$ 115,177,537
             
   
Other Assets and Liabilities - (36.7)%
     
(30,917,465)
   
Total Net Assets - 100.0%
     
$ 84,260,072

 
Notes to Schedule of Investments:
 
(a)
 
Debt obligations exceeding 60 days to maturity are valued by an independent pricing service that has been approved by the fund’s board of directors. The pricing service may employ methodologies that utilize actual market transactions, broker-dealer supplied valuations, or other formula-driven valuation techniques. These techniques generally consider such factors as yields or prices of bonds of comparable quality, type of issue, coupon, maturity, ratings, and general market conditions. Securities for which prices are not available from an independent pricing service but where an active market exists are valued using market quotations obtained from one or more dealers that make markets in the securities or from a widely-used quotation system. When market quotations are not readily available, securities are valued at fair value as determined in good faith by procedures established and approved by the fund’s board of directors. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on disposition; trading in similar securities of the same issuer or comparable companies; information from broker-dealers; and an evaluation of the forces that influence the market in which the security is purchased or sold. If events occur that materially affect the value of securities (including non-U.S. securities) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange, the securities will be valued at fair value. Debt obligations with 60 days or less remaining until maturity may be valued at their amortized cost, which approximates market value. Security valuations are performed at least once a week and at the end of each month.
 
As of November 30, 2006, the fund had no fair valued securities.
 
 
(b)
 
 
Delayed interest (Step Bonds) - Securities for which the coupon rate of interest will adjust on specified future date(s).
 
(c)
 
 
Securities sold within the terms of a private placement memorandum, exempt from registration under Rule 144A of the Securities Act of 1933, as amended, which may be sold only to dealers in that program or other “qualified institutional buyers.” These securities have been determined to be liquid under guidelines established by the fund’s board of directors. As of November 30, 2006, the value of these investments was $9,917,737 or 11.8% of net assets.
 
(d)
 
 
Interest only - Represents securities that entitle holders to receive only interest payments on the mortgage. The interest rate disclosed represents the coupon rate in effect as of November 30, 2006.
 
(e)
 
 
Z-Bond - Represents securities that pay no interest or principal during their accrual periods, but accrue additional principal at specified rates. Interest rate shown represents the current yield based upon the current cost basis and estimated future cash flows.
 
(f)
 
 
Variable Rate Security - The rate shown is the rate in effect as of November 30, 2006.
 
(g)
 
 
Security considered illiquid. As of November 30, 2006, the value of this investment was $12,824 or 0.02% of net assets.
 
(h)
 
 
On November 30, 2006, securities valued at $29,436,481 were pledged as collateral for the following outstanding reverse repurchase agreements:
   
 
Amount
 
 
Acquisition
Date
 
 
Rate*
 
 
Due
 
 
Accrued
Interest
 
 
Name of Broker
and Description
of Collateral
     
$ 4,821,000
 
11/1/06
 
5.33%
 
12/1/06
   
$ 21,413
 
(1)
     
14,368,327
 
11/13/06
 
5.35%
 
12/11/06
   
59,788
 
(2)
     
6,639,012  
11/20/06
5.45%
12/20/06
 
30,152
 
(2)
 
     
$25,828,339 
               
$ 111,353 
   
     
   
 
* Interest rate as of November 30, 2006. Rates are based on the London InterBank Offered Rate (LIBOR) and reset monthly.
     
 
Name of broker and description of collateral:
 
(1)
 
 
Goldman:
   
Federal National Mortgage Association, 4.00%, 11/1/10, $1,875,981 par
   
Federal National Mortgage Association, 5.00%, 2/1/21, $911,416 par
   
Federal National Mortgage Association, 5.50%, 12/1/33, $1,171,111 par
   
Government National Mortgage Association, 5.50%, 8/15/33, $1,333,535 par
     
 
(2)
 
 
Morgan Stanley:
   
Federal Home Loan Mortgage Corporation Gold, 5.50%, 10/1/33, $1,187,340 par
   
Federal Home Loan Mortgage Corporation, 4.50%, 9/15/33, $1,747,949 par
   
Federal National Mortgage Association, 7.00%, 6/1/17, $280,766 par
   
Federal National Mortgage Association, 7.00%, 7/1/17, $354,364 par
   
Federal National Mortgage Association, 6.00%, 9/1/17, $287,868 par
   
Federal National Mortgage Association, 5.00%, 11/1/18, $596,993 par
   
Federal National Mortgage Association, 5.00%, 2/1/19, $948,872 par
   
Federal National Mortgage Association, 4.00%, 5/25/19, $1,923,137 par
   
Federal National Mortgage Association, 4.50%, 5/25/19, $942,115 par
   
Federal National Mortgage Association, 5.50%, 4/1/21, $1,416,587 par
   
Federal National Mortgage Association, 6.00%, 5/1/29, $566,812 par
   
Federal National Mortgage Association, 7.00%, 9/1/31, $470,268 par
   
Federal National Mortgage Association, 6.50%, 6/1/32, $639,013 par
   
Federal National Mortgage Association, 5.50%, 11/1/33, $1,997,558 par
   
Federal National Mortgage Association, 6.00%, 1/1/34, $980,477 par
   
Federal National Mortgage Association, 4.35%, 3/25/34, $838,226 par
   
Federal National Mortgage Association, 5.50%, 2/1/34, $993,646 par
   
Federal National Mortgage Association, 6.00%, 1/1/35, $839,426 par
   
Federal National Mortgage Association, 6.50%, 2/1/35, $1,143,162 par
   
Federal National Mortgage Association, 5.50%, 3/1/35, $1,748,016 par
   
Federal National Mortgage Association, 6.55%, 10/1/32, $482,765 par
   
Goldman Sachs Mortgage Securities, 4.72%, 10/25/33, $1,429,001 par
   
Government National Mortgage Association, 5.13%, 12/20/22, $337,567 par
   
Government National Mortgage Association, 6.50%, 3/20/31, $2,457,614 par
     
 
(i)
 
 
This security has been purchased on a when-issued basis. On November 30, 2006, the total cost of investments purchased on a when-issued basis was $5,584,922.
 
(j)
 
 
Security has been deposited as initial margin on open futures contracts. Yield shown is effective yield as of November 30, 2006.
 
(k)
 
 
Investment in affiliated security. This money market fund is advised by FAF Advisors, Inc., which also serves as advisor for the fund.
 
(l)
 
 
On August 31, 2006, the cost of investments in securities was $114,195,554. The aggregate gross unrealized appreciation and depreciation of investments in securities, based on this cost, were as follows:
         
   
Gross unrealized appreciation
 
$ 2,039,466
   
Gross unrealized depreciation
 
(1,057,483)
   
Net unrealized appreciation
 
$ 981,983
   
 
Abbreviation:  REIT - Real Estate Investment Trust
 
Schedule of Open Futures Contracts
   
Description
Number of
Contracts
(Sold)
 
Notional
Contract
Value
Settlement
Month
Unrealized
Depreciation
   
U.S. Treasury 2 Year Note Futures
(38)
 
$ (7,790,000)
March 2007
$ (14,177)
               
   
U.S. Treasury 5 Year Note Futures
(66)
 
(7,006,313)
March 2007
(30,262)
               
   
U.S. Treasury 10 Year Note Futures
(32)
 
(3,494,000)
March 2007
(15,525)
               
   
U.S. Treasury Long Bond Futures
(1)
 
(114,375)
March 2007
(1,433)
     
(137)
 
$(18,404,688)
 
$(61,397)
               
   
 
Credit Default Swap Agreements
   
Counterparty
Reference Entity
 
Buy/Sell
Protection
Pay/Receive
Fixed Rate
Expiration Date
Notional
Amount
Unrealized
Depreciation
   
Credit Suisse
ABX-HE-BBB-06-2
 
Sell
2.420%
5/25/2046
$ 500,000
$ (3,953)
   
J.P Morgan
ABX-HE-BBB-06-2
 
Sell
2.420%
5/25/2046
500,000
(4,734)
                 
$ (8,687)


 

Item 2 - Controls and Procedures

(a)
The registrant’s Principal Executive Officer and Principal Financial Officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the date of this filing and have concluded that the registrant’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-Q was recorded, processed, summarized and reported timely.

(b)
There were no changes in the registrant’s internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3 - Exhibits

Certifications of the Principal Executive Officer and Principal Financial Officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act are filed 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.

American Income Fund, Inc.

By: 
/s/ Thomas S. Schreier, Jr.
Thomas S. Schreier, Jr. 
President

Date: January 19, 2007

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/ Thomas S. Schreier, Jr.
Thomas S. Schreier, Jr.
President

Date: January 19, 2007

By: 
/s/ Charles D. Gariboldi, Jr.
Charles D. Gariboldi, Jr.
Treasurer

Date: January 19, 2007