sr63011usbi.htm

JUNE 30, 2011

Semiannual Report

to Shareholders

DWS U.S. Bond Index Fund

Contents

4 Performance Summary

7 Information About Your Fund's Expenses

9 Portfolio Summary

10 Investment Portfolio

37 Statement of Assets and Liabilities

39 Statement of Operations

40 Statement of Changes in Net Assets

41 Financial Highlights

44 Notes to Financial Statements

52 Summary of Management Fee Evaluation by Independent Fee Consultant

56 Account Management Resources

57 Privacy Statement

This report must be preceded or accompanied by a prospectus. To obtain a summary prospectus, if available, or prospectus for any of our funds, refer to the Account Management Resources information provided in the back of this booklet. We advise you to consider the fund's objectives, risks, charges and expenses carefully before investing. The summary prospectus and prospectus contain this and other important information about the fund. Please read the prospectus carefully before you invest.

Bond investments are subject to interest-rate and credit risks. When interest rates rise, bond prices generally fall. Credit risk refers to the ability of an issuer to make timely payments of principal and interest. Various factors, including costs, cash flows and security selection, may cause the fund's performance to differ from that of the index. See the prospectus for details.

DWS Investments is part of Deutsche Bank's Asset Management division and, within the US, represents the retail asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Investment Management Americas Inc. and DWS Trust Company.

NOT FDIC/NCUA INSURED NO BANK GUARANTEE MAY LOSE VALUE NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

Performance Summary June 30, 2011

Average Annual Total Returns as of 6/30/11
Unadjusted for Sales Charge	6-Month‡	1-Year	3-Year	5-Year	10-Year
Class A	2.33%	3.07%	5.55%	5.86%	5.10%
Adjusted for the Maximum Sales Charge
Class A (max 2.75% load)	-0.49%	0.23%	4.58%	5.27%	4.81%
No Sales Charges
Class S	2.54%	3.36%	5.80%	6.12%	5.36%
Institutional Class	2.54%	3.44%	5.96%	6.30%	5.56%
Barclays Capital U.S. Aggregate Bond Index+	2.72%	3.90%	6.46%	6.52%	5.74%

‡ Total returns shown for periods less than one year are not annualized.

Performance in the Average Annual Total Returns table above and the Growth of an Assumed $10,000 Investment line graph that follows is historical and does not guarantee future results. Investment return and principal fluctuate, so your shares may be worth more or less when redeemed. Current performance may differ from performance data shown. Please visit www.dws-investments.com for the Fund's most recent month-end performance. Fund performance includes reinvestment of all distributions. Unadjusted returns do not reflect sales charges and would have been lower if they had.

The gross expense ratios of the Fund, as stated in the fee table of the prospectus dated April 29, 2011 are 0.69%, 0.59% and 0.39% for Class A, Class S and Institutional Class shares, respectively, and may differ from the expense ratios disclosed in the Financial Highlights tables in this report.

Index returns do not reflect any fees or expenses and it is not possible to invest directly into an index.

Performance figures do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Returns shown for Class A and Class S shares prior to their inception on February 17, 2009 are derived from the historical performance of Institutional Class shares of DWS U.S. Bond Index Fund during such periods have been adjusted to reflect the higher total annual operating expenses of each specific class. Any difference in expenses will affect performance.

Growth of an Assumed $10,000 Investment

(Adjusted for Maximum Sales Charge)

[] DWS U.S. Bond Index Fund — Class A

[] Barclays Capital U.S. Aggregate Bond Index+

Yearly periods ended June 30

The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 2.75%. This results in a net initial investment of $9,725.

The growth of $10,000 is cumulative.

Performance of other share classes will vary based on the sales charges and the fee structure of those classes.

+ The Barclays Capital U.S. Aggregate Bond Index is an unmanaged index representing domestic taxable investment-grade bonds, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities with an average maturity of one year or more.

Net Asset Value and Distribution Information
	Class A			Class S			Institutional Class
Net Asset Value: 6/30/11	$	10.71		$	10.72		$	10.71
12/31/10	$	10.60		$	10.60		$	10.60
Distribution Information: Six Months as of 6/30/11: Income Dividends	$	.14		$	.15		$	.16
June Income Dividend	$	.0230		$	.0247		$	.0267
SEC 30-day Yield as of 6/30/11++		1.83	%		2.13	%		2.37	%
Current Annualized Distribution Rate as of 6/30/11++		2.58	%		2.76	%		2.99	%

++ The SEC yield is net investment income per share earned over the month ended June 30, 2011, shown as an annualized percentage of the maximum offering price per share on the last day of the period. The SEC yield is computed in accordance with a standardized method prescribed by the Securities and Exchange Commission. The SEC yield would have been 1.80%, 1.86% and 2.18% for Class A, Class S and Institutional Class shares, respectively, had certain expenses not been reduced. Current annualized distribution rate is the latest monthly dividend shown as an annualized percentage of net asset value on June 30, 2011. Distribution rate simply measures the level of dividends and is not a complete measure of performance. The current annualized distribution rate would have been 2.55%, 2.49% and 2.80% for Class A, Class S and Institutional Class shares, respectively, had certain expenses not been reduced. Yields and distribution rates are historical, not guaranteed and will fluctuate.

Lipper Rankings — Intermediate Investment Grade Debt Funds Category as of 6/30/11
Period	Rank		Number of Fund Classes Tracked	Percentile Ranking (%)
Class A 1-Year	514	of	566	91
Class S 1-Year	498	of	566	88
Institutional Class 1-Year	493	of	566	87
3-Year	361	of	486	75
5-Year	198	of	394	51
10-Year	107	of	271	40

Source: Lipper Inc. Rankings are historical and do not guarantee future results. Rankings are based on total return unadjusted for sales charges with distributions reinvested. If sales charges had been included, rankings might have been less favorable.

Information About Your Fund's Expenses

As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include redemption fees and account maintenance fees, which are not shown in this section. The following tables are intended to help you understand your ongoing expenses (in dollars) of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. In the most recent six-month period, the Fund limited these expenses; had it not done so, expenses would have been higher. The example in the table is based on an investment of $1,000 invested at the beginning of the six-month period and held for the entire period (January 1, 2011 to June 30, 2011).

The tables illustrate your Fund's expenses in two ways:

•Actual Fund Return. This helps you estimate the actual dollar amount of ongoing expenses (but not transaction costs) paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses 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 "Expenses Paid per $1,000" line under the share class you hold.

• Hypothetical 5% Fund Return. This helps you to compare your Fund's ongoing expenses (but not transaction costs) with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.

Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expense of owning different funds. An account maintenance fee of $6.25 per quarter for Class S shares may apply for certain accounts whose balances did not meet the applicable minimum initial investment. This fee is not included in these tables. If it was, the estimate of expenses paid for Class S shares during the period would be higher, and account value durint the period would be lower, by this amount.

Expenses and Value of a $1,000 Investment for the six months ended June 30, 2011
Actual Fund Return	Class A		Class S		InstitutionalClass
Beginning Account Value 1/1/11	$	1,000.00	$	1,000.00	$	1,000.00
Ending Account Value 6/30/11	$	1,023.30	$	1,025.40	$	1,025.40
Expenses Paid per $1,000*	$	2.86	$	1.81	$	1.00
Hypothetical 5% Fund Return	Class A		Class S		Institutional Class
Beginning Account Value 1/1/11	$	1,000.00	$	1,000.00	$	1,000.00
Ending Account Value 6/30/11	$	1,021.97	$	1,023.01	$	1,023.80
Expenses Paid per $1,000*	$	2.86	$	1.81	$	1.00

* Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent six-month period, then divided by 365.

Annualized Expense Ratios	Class A	Class S	Institutional Class
DWS U.S. Bond Index Fund	.57%	.36%	.20%

For more information, please refer to the Fund's prospectus.

Portfolio Summary

Asset Allocation (As a % of Total Net Assets)	6/30/11	12/31/10

Government & Agency Obligations	42%	44%
Mortgage-Backed Securities Pass-Throughs	33%	32%
Corporate Bonds	19%	18%
Cash Equivalents & Other, net	3%	3%
Commercial Mortgage-Backed Securities	2%	3%
Municipal Bonds and Notes	1%	—
	100%	100%

Quality (As a % of Investment Portfolio excluding Securities Lending Collateral)	6/30/11	12/31/10

US Government Obligations	75%	77%
AAA	3%	3%
AA	5%	4%
A	10%	9%
BBB	7%	7%
	100%	100%

Interest Rate Sensitivity	6/30/11	12/31/10

Effective Maturity	7.3 years	7.0 years
Effective Duration	2.8 years	2.9 years

Effective maturity is the weighted average of the bonds held by the Fund taking into consideration any available maturity shortening features.

Effective duration is an approximate measure of the Fund's sensitivity to interest rate changes taking into consideration any maturity shortening features.

Asset allocation and interest rate sensitivity are subject to change.

The quality ratings represent the lower of Moody's Investors Services, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") credit ratings. The ratings of Moody's and S&P represent their opinions as to the quality of the securities they rate. Ratings are relative and subjective and are not absolute standards of quality. The Fund's credit quality does not remove market risk and is subject to change.

For more complete details about the Fund's investment portfolio, see page 10. A quarterly Fact Sheet is available upon request. Please see the Account Management Resources section for contact information.

Following the Fund's fiscal first and third quarter-end, a complete portfolio holdings listing is filed with the SEC on Form N-Q. The form will be available on the SEC's Web site at www.sec.gov, and it also may be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the SEC's Public Reference Room may be obtained by calling (800) SEC-0330. The Fund's portfolio holdings are also posted on www.dws-investments.com from time to time. Please see the Fund's current prospectus for more information.

Investment Portfolio as of June 30, 2011 (Unaudited)

	Principal Amount ($)		Value ($)

Corporate Bonds 19.0%
Consumer Discretionary 1.2%
CBS Corp., 5.75%, 4/15/2020		200,000		216,767
Comcast Cable Communications Holdings, Inc., 8.375%, 3/15/2013		90,000		100,804
Comcast Corp.:
5.7%, 5/15/2018		225,000		251,046
5.85%, 11/15/2015		50,000		56,704
6.4%, 5/15/2038		225,000		240,078
6.45%, 3/15/2037		170,000		181,824
6.95%, 8/15/2037		150,000		169,331
Cox Communications, Inc., 7.125%, 10/1/2012		100,000		107,253
DIRECTV Holdings LLC:
3.55%, 3/15/2015		150,000		156,721
5.875%, 10/1/2019		100,000		110,907
Hasbro, Inc., 6.35%, 3/15/2040		100,000		103,370
Home Depot, Inc., 5.4%, 3/1/2016		300,000		335,224
Johnson Controls, Inc., 5.0%, 3/30/2020		150,000		159,387
Lowe's Companies, Inc., 5.0%, 10/15/2015		125,000		141,103
McDonald's Corp.:
Series I, 5.8%, 10/15/2017		175,000		205,374
Series I, 6.3%, 10/15/2037		75,000		87,110
McGraw-Hill Companies, Inc., 5.9%, 11/15/2017		50,000		55,829
NBCUniversal Media LLC, 144A, 3.65%, 4/30/2015		550,000		577,452
News America, Inc.:
6.4%, 12/15/2035		50,000		52,288
6.65%, 11/15/2037		100,000		107,170
6.9%, 3/1/2019		100,000		116,384
6.9%, 8/15/2039		50,000		55,061
Nordstrom, Inc., 6.25%, 1/15/2018		150,000		173,327
Omnicom Group, Inc., 4.45%, 8/15/2020		100,000		99,198
Target Corp.:
5.375%, 5/1/2017		200,000		228,544
7.0%, 1/15/2038		75,000		89,781
TCI Communications, Inc., 7.125%, 2/15/2028		100,000		115,679
Time Warner Cable, Inc.:
5.85%, 5/1/2017		450,000		506,049
6.75%, 6/15/2039		225,000		246,131
8.75%, 2/14/2019		125,000		159,276
Time Warner, Inc.:
4.875%, 3/15/2020		100,000		103,555
5.875%, 11/15/2016		350,000		400,065
6.625%, 5/15/2029		10,000		10,899
6.95%, 1/15/2028		30,000		33,570
7.7%, 5/1/2032		25,000		30,184
VF Corp., 6.45%, 11/1/2037		20,000		22,477
Viacom, Inc., 6.875%, 4/30/2036		100,000		111,640
Walt Disney Co.:
Series B, 5.875%, 12/15/2017		50,000		58,687
6.2%, 6/20/2014		75,000		85,565
Whirlpool Corp., 5.5%, 3/1/2013		100,000		106,009
Yum! Brands, Inc., 6.25%, 4/15/2016		50,000		57,351
				6,225,174
Consumer Staples 1.6%
Altria Group, Inc.:
9.25%, 8/6/2019		125,000		162,993
9.7%, 11/10/2018		100,000		131,412
10.2%, 2/6/2039		200,000		286,853
Anheuser-Busch Companies, Inc.:
4.95%, 1/15/2014		100,000		108,417
5.5%, 1/15/2018		25,000		27,851
5.95%, 1/15/2033		50,000		53,302
Anheuser-Busch InBev Worldwide, Inc.:
4.125%, 1/15/2015		200,000		215,093
5.375%, 1/15/2020		300,000		330,479
Bottling Group LLC:
5.0%, 11/15/2013		50,000		54,617
5.5%, 4/1/2016		50,000		57,192
Coca-Cola Refreshments USA, Inc., 7.375%, 3/3/2014		100,000		116,159
ConAgra Foods, Inc.:
7.0%, 4/15/2019		50,000		57,210
7.125%, 10/1/2026		100,000		111,020
Costco Wholesale Corp., 5.5%, 3/15/2017		125,000		145,208
CVS Caremark Corp.:
5.75%, 6/1/2017		300,000		336,953
6.25%, 6/1/2027		100,000		110,470
Diageo Capital PLC, 5.75%, 10/23/2017		200,000		229,273
Estee Lauder Companies, Inc., 6.0%, 5/15/2037		20,000		21,702
Fortune Brands, Inc.:
4.875%, 12/1/2013		50,000		53,161
5.375%, 1/15/2016		100,000		108,357
General Mills, Inc.:
5.2%, 3/17/2015		225,000		250,571
5.7%, 2/15/2017		50,000		57,302
Kellogg Co.:
4.15%, 11/15/2019		150,000		154,603
5.125%, 12/3/2012		50,000		53,001
Series B, 7.45%, 4/1/2031		50,000		63,132
Kimberly-Clark Corp., 6.625%, 8/1/2037		150,000		181,074
Kraft Foods, Inc.:
6.125%, 2/1/2018		750,000		862,826
6.5%, 8/11/2017		100,000		117,557
Kroger Co.:
3.9%, 10/1/2015		100,000		105,764
5.5%, 2/1/2013		75,000		80,161
8.0%, 9/15/2029		50,000		62,655
Mead Johnson Nutrition Co.:
4.9%, 11/1/2019		50,000		52,760
5.9%, 11/1/2039		25,000		25,926
PepsiCo, Inc.:
3.1%, 1/15/2015		150,000		157,452
4.5%, 1/15/2020		300,000		318,052
4.65%, 2/15/2013		100,000		106,265
5.0%, 6/1/2018		100,000		110,767
Series B, 7.0%, 3/1/2029		25,000		31,089
Philip Morris International, Inc.:
4.875%, 5/16/2013		300,000		321,819
5.65%, 5/16/2018		150,000		168,701
6.375%, 5/16/2038		25,000		28,321
Procter & Gamble Co.:
4.7%, 2/15/2019		200,000		220,707
4.85%, 12/15/2015		150,000		168,872
Reynolds American, Inc., 7.625%, 6/1/2016		75,000		89,957
Safeway, Inc., 5.0%, 8/15/2019		100,000		104,658
Sara Lee Corp., 3.875%, 6/15/2013		100,000		104,244
Sysco Corp., 6.625%, 3/17/2039		50,000		61,275
Wal-Mart Stores, Inc.:
2.875%, 4/1/2015		400,000		416,730
4.25%, 4/15/2013		50,000		53,109
5.0%, 10/25/2040		500,000		470,765
5.25%, 9/1/2035		300,000		300,019
5.875%, 4/5/2027		50,000		55,600
6.2%, 4/15/2038		100,000		110,807
Walgreen Co., 5.25%, 1/15/2019		150,000		167,192
				8,351,455
Energy 1.7%
Alabama Power Co., 5.7%, 2/15/2033		50,000		52,824
Alberta Energy Co., Ltd., 7.375%, 11/1/2031		50,000		57,560
Anadarko Petroleum Corp.:
5.95%, 9/15/2016		300,000		337,676
6.2%, 3/15/2040		100,000		101,350
Apache Corp.:
6.0%, 9/15/2013		200,000		221,431
6.0%, 1/15/2037		100,000		108,711
Buckeye Partners LP, 6.05%, 1/15/2018		50,000		56,227
Burlington Resources, Inc., 7.375%, 3/1/2029		50,000		59,017
Canadian Natural Resources Ltd.:
5.45%, 10/1/2012		25,000		26,416
5.7%, 5/15/2017		350,000		398,253
6.25%, 3/15/2038		25,000		27,202
Cenovus Energy, Inc., 4.5%, 9/15/2014		200,000		217,061
Chevron Corp., 4.95%, 3/3/2019		300,000		335,224
Conoco, Inc., 6.95%, 4/15/2029		150,000		182,186
ConocoPhillips:
4.6%, 1/15/2015		200,000		220,909
5.75%, 2/1/2019		100,000		115,003
6.5%, 2/1/2039		200,000		233,628
6.65%, 7/15/2018		200,000		239,534
DCP Midstream LLC, 8.125%, 8/16/2030		25,000		31,093
Devon Energy Corp., 6.3%, 1/15/2019		50,000		58,801
El Paso Natural Gas Co., 5.95%, 4/15/2017		150,000		169,751
EnCana Corp.:
4.75%, 10/15/2013		50,000		53,801
5.9%, 12/1/2017		150,000		170,236
Energy Transfer Partners LP:
6.125%, 2/15/2017		25,000		27,847
6.625%, 10/15/2036		25,000		25,796
9.0%, 4/15/2019		125,000		155,425
Enterprise Products Operating LLC:
5.25%, 1/31/2020		300,000		319,172
Series G, 5.6%, 10/15/2014		50,000		55,547
Series L, 6.3%, 9/15/2017		150,000		172,047
Series D, 6.875%, 3/1/2033		25,000		27,772
EOG Resources, Inc., 5.625%, 6/1/2019		200,000		224,302
Halliburton Co.:
5.9%, 9/15/2018		75,000		86,524
6.7%, 9/15/2038		75,000		86,223
7.45%, 9/15/2039		50,000		62,453
Hess Corp., 7.125%, 3/15/2033		25,000		29,694
Husky Energy, Inc., 5.9%, 6/15/2014		200,000		222,597
Kinder Morgan Energy Partners LP:
6.85%, 2/15/2020		125,000		144,529
6.95%, 1/15/2038		150,000		162,916
7.3%, 8/15/2033		50,000		56,967
7.4%, 3/15/2031		50,000		56,955
Marathon Petroleum Corp., 144A, 6.5%, 3/1/2041		100,000		103,353
Nexen, Inc.:
7.5%, 7/30/2039		150,000		167,783
7.875%, 3/15/2032		50,000		59,036
ONEOK Partners LP:
6.15%, 10/1/2016		75,000		86,298
8.625%, 3/1/2019		25,000		31,783
ONEOK, Inc., 5.2%, 6/15/2015		50,000		54,708
Petro-Canada:
5.95%, 5/15/2035		100,000		101,930
6.8%, 5/15/2038		100,000		112,793
Petroleos Mexicanos, 6.0%, 3/5/2020		300,000		329,250
Plains All American Pipeline LP:
5.75%, 1/15/2020		50,000		54,204
6.5%, 5/1/2018		100,000		113,268
Spectra Energy Capital LLC, 6.2%, 4/15/2018		300,000		340,179
Statoil ASA, 5.25%, 4/15/2019		200,000		221,938
Suncor Energy, Inc., 5.95%, 12/1/2034		50,000		51,281
TransCanada PipeLines Ltd.:
5.85%, 3/15/2036		50,000		52,212
6.2%, 10/15/2037		50,000		53,959
6.35%, 5/15/2067		25,000		25,132
6.5%, 8/15/2018		150,000		176,465
Transcontinental Gas Pipe Line Corp., Series B, 8.875%, 7/15/2012		25,000		26,990
Transocean, Inc.:
6.0%, 3/15/2018		50,000		55,359
6.8%, 3/15/2038		25,000		26,843
Union Pacific Resources Group, Inc., 7.5%, 10/15/2026		60,000		72,719
Valero Energy Corp.:
6.125%, 2/1/2020		200,000		219,787
6.625%, 6/15/2037		35,000		36,493
7.5%, 4/15/2032		25,000		27,919
Weatherford International Ltd.:
5.5%, 2/15/2016		50,000		54,804
6.0%, 3/15/2018		200,000		219,234
Williams Companies, Inc., 8.75%, 3/15/2032		37,000		47,046
Williams Partners LP:
5.25%, 3/15/2020		300,000		315,841
7.25%, 2/1/2017		50,000		58,949
				8,688,216
Financials 8.2%
ACE INA Holdings, Inc.:
5.7%, 2/15/2017		100,000		111,450
6.7%, 5/15/2036		50,000		57,781
Allstate Corp., 5.35%, 6/1/2033		50,000		48,437
Allstate Life Global Funding Trusts, 5.375%, 4/30/2013		200,000		215,541
American Express Co.:
4.875%, 7/15/2013		75,000		79,743
6.15%, 8/28/2017		175,000		199,424
7.0%, 3/19/2018		100,000		117,684
8.125%, 5/20/2019		575,000		728,978
American International Group, Inc.:
4.25%, 5/15/2013		100,000		102,797
5.05%, 10/1/2015		100,000		104,377
Series G, 5.85%, 1/16/2018		50,000		52,319
Ameriprise Financial, Inc., 5.3%, 3/15/2020		150,000		160,795
Apache Finance Canada Corp., 7.75%, 12/15/2029		25,000		31,412
Asian Development Bank, 4.5%, 9/4/2012		500,000		523,452
Assurant, Inc., 5.625%, 2/15/2014		25,000		26,712
AvalonBay Communities, Inc., 6.125%, 11/1/2012		16,000		17,026
AXA SA, 8.6%, 12/15/2030		50,000		59,570
Bank of America Corp.:
4.5%, 4/1/2015		350,000		365,925
4.75%, 8/1/2015		100,000		104,917
4.9%, 5/1/2013		100,000		105,347
5.125%, 11/15/2014		200,000		212,224
5.375%, 6/15/2014		130,000		139,083
5.625%, 10/14/2016		100,000		107,026
5.75%, 8/15/2016		100,000		105,517
5.75%, 12/1/2017		425,000		451,893
Series L, 7.625%, 6/1/2019		500,000		579,196
Bank of America NA:
5.3%, 3/15/2017		250,000		257,686
6.0%, 10/15/2036		100,000		96,354
Bank of New York Mellon Corp.:
4.3%, 5/15/2014		100,000		108,096
Series G, 4.95%, 11/1/2012		25,000		26,415
5.45%, 5/15/2019		40,000		44,365
5.5%, 12/1/2017		50,000		55,052
Bank of Nova Scotia, 3.4%, 1/22/2015		400,000		420,231
Bank One Corp., 7.625%, 10/15/2026		50,000		59,454
Barclays Bank PLC:
5.125%, 1/8/2020		150,000		152,241
5.45%, 9/12/2012		200,000		210,721
6.75%, 5/22/2019		150,000		168,382
BB&T Capital Trust II, 6.75%, 6/7/2036		25,000		25,395
BB&T Corp., 5.2%, 12/23/2015		500,000		540,916
Bear Stearns Companies LLC:
5.3%, 10/30/2015		150,000		164,393
5.7%, 11/15/2014		100,000		110,447
7.25%, 2/1/2018		285,000		338,435
Berkshire Hathaway Finance Corp.:
4.625%, 10/15/2013		150,000		161,265
5.75%, 1/15/2040		200,000		207,772
Berkshire Hathaway, Inc., 3.2%, 2/11/2015		200,000		208,451
BHP Billiton Finance (USA) Ltd.:
5.4%, 3/29/2017		150,000		170,535
5.5%, 4/1/2014		50,000		55,639
6.5%, 4/1/2019		50,000		59,831
BlackRock, Inc., 3.5%, 12/10/2014		200,000		210,773
Boston Properties LP:
(REIT), 5.875%, 10/15/2019		100,000		109,564
(REIT), 6.25%, 1/15/2013		12,000		12,882
BP Capital Markets PLC, 4.75%, 3/10/2019		350,000		369,130
British Transco Finance, Inc., 6.625%, 6/1/2018		100,000		115,967
Bunge Ltd. Finance Corp., 5.35%, 4/15/2014		50,000		53,905
Capital One Financial Corp., 7.375%, 5/23/2014		250,000		285,459
Caterpillar Financial Services Corp.:
Series F, 4.75%, 2/17/2015		50,000		55,125
5.45%, 4/15/2018		100,000		113,095
6.125%, 2/17/2014		150,000		168,590
Charles Schwab Corp., 4.95%, 6/1/2014		50,000		54,821
China Development Bank Corp., 5.0%, 10/15/2015		50,000		54,788
Chubb Corp.:
6.0%, 5/11/2037		75,000		78,654
Series 1, 6.5%, 5/15/2038		25,000		27,772
Citigroup, Inc.:
5.0%, 9/15/2014		375,000		392,984
5.125%, 5/5/2014		100,000		107,184
5.3%, 1/7/2016		100,000		107,711
5.5%, 4/11/2013		450,000		477,754
5.5%, 2/15/2017		100,000		105,171
5.875%, 2/22/2033		100,000		94,011
6.0%, 8/15/2017		50,000		54,754
6.0%, 10/31/2033		100,000		95,637
6.125%, 11/21/2017		375,000		414,170
6.125%, 5/15/2018		100,000		110,123
6.5%, 8/19/2013		100,000		108,756
6.625%, 6/15/2032		75,000		77,641
8.125%, 7/15/2039		100,000		125,137
8.5%, 5/22/2019		100,000		123,965
Corp. Andina de Fomento, 5.2%, 5/21/2013		75,000		80,250
Credit Suisse (USA), Inc.:
4.875%, 1/15/2015		300,000		323,506
5.125%, 8/15/2015		25,000		27,478
5.375%, 3/2/2016		50,000		55,542
7.125%, 7/15/2032		50,000		59,567
Credit Suisse AG, 5.4%, 1/14/2020		400,000		404,951
Credit Suisse New York:
5.0%, 5/15/2013		200,000		213,483
6.0%, 2/15/2018		100,000		107,906
Daimler Finance North America LLC, 6.5%, 11/15/2013		75,000		83,436
Deutsche Telekom International Finance BV:
5.75%, 3/23/2016		300,000		339,281
5.875%, 8/20/2013		100,000		109,445
Devon Financing Corp., ULC, 7.875%, 9/30/2031		50,000		64,483
Diageo Finance BV, 5.5%, 4/1/2013		50,000		54,002
ERP Operating LP, (REIT), 4.75%, 7/15/2020		200,000		202,815
Export-Import Bank of Korea, 5.875%, 1/14/2015		300,000		328,971
Fifth Third Bancorp.:
4.5%, 6/1/2018		50,000		49,682
5.45%, 1/15/2017		25,000		26,778
8.25%, 3/1/2038		50,000		59,783
FleetBoston Financial Corp., 6.875%, 1/15/2028		45,000		46,375
General Electric Capital Corp.:
Series A, 3.75%, 11/14/2014		300,000		317,552
Series A, 4.875%, 3/4/2015		475,000		516,529
Series A, 5.0%, 1/8/2016		150,000		163,964
5.45%, 1/15/2013		450,000		478,919
5.5%, 1/8/2020		200,000		214,180
Series A, 5.625%, 5/1/2018		500,000		546,859
5.875%, 1/14/2038		150,000		151,735
Series A, 6.15%, 8/7/2037		125,000		129,653
Series A, 6.75%, 3/15/2032		100,000		111,105
Genworth Financial, Inc., 5.75%, 6/15/2014		25,000		26,103
GlaxoSmithKline Capital, Inc.:
4.85%, 5/15/2013		100,000		107,526
5.65%, 5/15/2018		125,000		142,579
6.375%, 5/15/2038		125,000		144,142
H.J. Heinz Finance Co., 6.75%, 3/15/2032		50,000		56,662
Hartford Financial Services Group, Inc.:
4.625%, 7/15/2013		50,000		52,234
5.95%, 10/15/2036		25,000		23,540
HCP, Inc., (REIT), 6.0%, 1/30/2017		250,000		275,287
HSBC Bank USA NA:
4.625%, 4/1/2014		50,000		53,297
7.0%, 1/15/2039		50,000		56,850
HSBC Finance Corp.:
4.75%, 7/15/2013		50,000		52,946
5.0%, 6/30/2015		50,000		53,792
5.5%, 1/19/2016		100,000		109,342
6.375%, 11/27/2012		50,000		53,491
HSBC Holdings PLC:
5.1%, 4/5/2021		1,000,000		1,024,784
5.25%, 12/12/2012		107,000		112,864
6.5%, 5/2/2036		200,000		205,754
Inter-American Development Bank:
1.625%, 7/15/2013		500,000		510,376
3.875%, 9/17/2019		500,000		533,480
International Finance Corp., 3.0%, 4/22/2014		300,000		317,126
Jefferies Group, Inc., 8.5%, 7/15/2019		100,000		118,269
John Deere Capital Corp.:
2.95%, 3/9/2015		150,000		156,176
4.9%, 9/9/2013		100,000		108,539
JPMorgan Chase & Co.:
3.7%, 1/20/2015		300,000		311,942
4.625%, 5/10/2021		500,000		495,954
4.75%, 5/1/2013		100,000		106,453
5.125%, 9/15/2014		350,000		378,227
6.0%, 1/15/2018		350,000		389,254
6.125%, 6/27/2017		50,000		55,874
6.3%, 4/23/2019		100,000		112,714
JPMorgan Chase Bank NA, 5.875%, 6/13/2016		250,000		276,731
KeyBank NA:
5.45%, 3/3/2016		25,000		27,123
5.8%, 7/1/2014		350,000		383,728
Lincoln National Corp., 8.75%, 7/1/2019		400,000		504,759
Marsh & McLennan Companies, Inc.:
5.375%, 7/15/2014		50,000		54,239
5.75%, 9/15/2015		50,000		54,947
Mellon Funding Corp., 5.0%, 12/1/2014		50,000		54,996
Merrill Lynch & Co., Inc.:
5.0%, 2/3/2014		25,000		26,915
Series C, 5.0%, 1/15/2015		125,000		132,322
Series C, 5.45%, 2/5/2013		100,000		106,079
Series C, 6.05%, 8/15/2012		200,000		210,542
6.05%, 5/16/2016		50,000		52,420
6.22%, 9/15/2026		50,000		50,195
Series C, 6.4%, 8/28/2017		50,000		54,579
6.5%, 7/15/2018		50,000		53,185
MetLife, Inc.:
5.0%, 6/15/2015		175,000		190,931
6.4%, 12/15/2036		25,000		24,375
6.75%, 6/1/2016		300,000		349,186
Morgan Stanley:
4.2%, 11/20/2014		100,000		103,851
4.75%, 4/1/2014		500,000		521,193
5.3%, 3/1/2013		100,000		105,731
5.45%, 1/9/2017		100,000		105,753
Series F, 5.625%, 9/23/2019		300,000		307,845
Series F, 6.0%, 4/28/2015		450,000		487,830
7.3%, 5/13/2019		125,000		141,753
National City Corp., 4.9%, 1/15/2015		100,000		109,291
National Rural Utilities Cooperative Finance Corp., Series C, 8.0%, 3/1/2032		100,000		130,339
Nationwide Financial Services, 5.9%, 7/1/2012		25,000		25,689
NiSource Finance Corp.:
5.25%, 9/15/2017		75,000		81,122
5.45%, 9/15/2020		75,000		78,994
Nordic Investment Bank, 5.0%, 2/1/2017		150,000		171,410
Novartis Capital Corp., 4.4%, 4/24/2020		150,000		158,419
Novartis Securities Investment Ltd., 5.125%, 2/10/2019		300,000		333,142
Petrobras International Finance Co.:
3.875%, 1/27/2016		200,000		203,664
5.75%, 1/20/2020		500,000		533,377
PNC Funding Corp.:
4.25%, 9/21/2015		150,000		160,935
6.7%, 6/10/2019		100,000		117,828
Principal Financial Group, Inc., 6.05%, 10/15/2036		300,000		311,926
Principal Life Income Funding Trust, 5.1%, 4/15/2014		25,000		27,217
Protective Life Corp.:
7.375%, 10/15/2019		50,000		56,847
8.45%, 10/15/2039		50,000		55,098
Prudential Financial, Inc.:
Series D, 3.875%, 1/14/2015		100,000		104,378
Series B, 5.1%, 9/20/2014		100,000		108,718
Series B, 5.75%, 7/15/2033		25,000		23,892
Series D, 6.625%, 12/1/2037		50,000		53,084
7.375%, 6/15/2019		100,000		118,591
Rio Tinto Finance (USA) Ltd., 9.0%, 5/1/2019		200,000		265,008
Royal Bank of Scotland Group PLC, 5.05%, 1/8/2015		100,000		99,439
Royal Bank of Scotland PLC, 4.875%, 3/16/2015		350,000		363,240
Shell International Finance BV:
4.3%, 9/22/2019		200,000		210,041
6.375%, 12/15/2038		350,000		405,821
Simon Property Group LP, (REIT):
5.1%, 6/15/2015		50,000		55,198
5.25%, 12/1/2016		100,000		109,849
6.125%, 5/30/2018		130,000		145,775
SLM Corp., Series A, 5.0%, 10/1/2013		25,000		26,000
State Street Corp., 4.3%, 5/30/2014		100,000		108,144
Swiss Re Solutions Holding Corp., 6.45%, 3/1/2019		150,000		163,102
Telecom Italia Capital SA:
5.25%, 10/1/2015		175,000		181,934
6.375%, 11/15/2033		75,000		66,881
7.721%, 6/4/2038		100,000		99,451
The Goldman Sachs Group, Inc.:
5.125%, 1/15/2015		275,000		295,103
5.15%, 1/15/2014		100,000		106,774
5.35%, 1/15/2016		125,000		134,886
5.375%, 3/15/2020		600,000		619,587
5.625%, 1/15/2017		25,000		26,466
5.95%, 1/18/2018		50,000		53,894
6.0%, 5/1/2014		400,000		438,785
6.125%, 2/15/2033		50,000		50,331
6.15%, 4/1/2018		250,000		272,086
6.25%, 9/1/2017		200,000		220,681
6.75%, 10/1/2037		400,000		399,993
The Travelers Companies, Inc.:
6.25%, 6/15/2037		150,000		160,483
6.75%, 6/20/2036		50,000		56,804
Total Capital SA, 3.0%, 6/24/2015		200,000		208,079
Toyota Motor Credit Corp., 3.2%, 6/17/2015		200,000		207,862
Tyco International Finance SA, 8.5%, 1/15/2019		100,000		126,771
UBS AG Stamford Branch:
Series 10, 5.875%, 7/15/2016		50,000		54,846
5.875%, 12/20/2017		325,000		356,515
UFJ Finance Aruba AEC, 6.75%, 7/15/2013		150,000		164,820
US Bancorp., 3.15%, 3/4/2015		150,000		156,643
Vale Overseas Ltd.:
6.25%, 1/23/2017		100,000		113,125
6.875%, 11/21/2036		150,000		162,868
6.875%, 11/10/2039		100,000		108,678
Verizon Global Funding Corp.:
7.75%, 12/1/2030		100,000		124,975
7.75%, 6/15/2032		100,000		123,897
Verizon Wireless Capital LLC:
5.55%, 2/1/2014		210,000		231,468
8.5%, 11/15/2018		200,000		259,713
Wachovia Bank NA:
4.875%, 2/1/2015		75,000		80,524
5.0%, 8/15/2015		200,000		214,368
Wachovia Corp.:
4.875%, 2/15/2014		50,000		53,188
5.25%, 8/1/2014		50,000		53,593
Series G, 5.5%, 5/1/2013		325,000		349,489
5.625%, 10/15/2016		100,000		108,558
5.75%, 6/15/2017		50,000		55,593
Wells Fargo & Co.:
4.625%, 4/15/2014		100,000		105,766
4.95%, 10/16/2013		50,000		53,204
5.0%, 11/15/2014		50,000		53,976
5.125%, 9/15/2016		50,000		53,472
5.375%, 2/7/2035		150,000		150,452
5.625%, 12/11/2017		250,000		276,151
Wells Fargo Bank NA, Series AI, 4.75%, 2/9/2015		350,000		374,355
Wells Fargo Financial, Inc., 5.5%, 8/1/2012		25,000		26,225
Western Union Co.:
5.93%, 10/1/2016		150,000		169,611
6.2%, 11/17/2036		25,000		25,419
Westpac Banking Corp.:
3.0%, 8/4/2015		350,000		353,794
4.875%, 11/19/2019		200,000		208,031
				41,616,986
Health Care 1.0%
Abbott Laboratories:
5.15%, 11/30/2012		250,000		265,774
5.3%, 5/27/2040		100,000		100,451
6.0%, 4/1/2039		75,000		82,939
6.15%, 11/30/2037		50,000		56,239
Aetna, Inc., 6.625%, 6/15/2036		50,000		55,692
Amgen, Inc.:
4.5%, 3/15/2020		200,000		206,262
4.85%, 11/18/2014		25,000		27,940
5.85%, 6/1/2017		125,000		144,745
AstraZeneca PLC:
5.4%, 9/15/2012		100,000		105,807
5.9%, 9/15/2017		250,000		291,337
Baxter International, Inc.:
1.8%, 3/15/2013		150,000		152,515
4.625%, 3/15/2015		25,000		27,401
Bristol-Myers Squibb Co.:
5.25%, 8/15/2013		50,000		54,645
5.875%, 11/15/2036		22,000		24,490
Covidien International Finance SA:
6.0%, 10/15/2017		75,000		87,652
6.55%, 10/15/2037		25,000		28,896
Eli Lilly & Co., 5.2%, 3/15/2017		125,000		141,613
Express Scripts, Inc., 7.25%, 6/15/2019		125,000		149,508
Genentech, Inc., 4.75%, 7/15/2015		50,000		55,112
Johnson & Johnson:
4.85%, 5/15/2041		250,000		241,983
5.55%, 8/15/2017		100,000		115,965
6.95%, 9/1/2029		50,000		63,164
McKesson Corp., 5.7%, 3/1/2017		75,000		85,012
Medco Health Solutions, Inc., 7.125%, 3/15/2018		75,000		87,638
Medtronic, Inc.:
Series B, 4.75%, 9/15/2015		75,000		83,289
6.5%, 3/15/2039		25,000		29,673
Merck & Co., Inc.:
4.75%, 3/1/2015		100,000		111,370
5.0%, 6/30/2019		350,000		387,368
5.3%, 12/1/2013		50,000		55,287
5.85%, 6/30/2039		25,000		27,386
6.5%, 12/1/2033		25,000		29,607
Pfizer, Inc., 6.2%, 3/15/2019		300,000		350,926
Pharmacia Corp., 6.6%, 12/1/2028		75,000		88,553
Quest Diagnostics, Inc.:
4.75%, 1/30/2020		150,000		155,128
6.95%, 7/1/2037		25,000		27,756
UnitedHealth Group, Inc.:
4.875%, 4/1/2013		25,000		26,507
5.0%, 8/15/2014		9,000		9,865
6.0%, 2/15/2018		500,000		566,940
WellPoint, Inc., 5.85%, 1/15/2036		150,000		152,970
Wyeth:
5.5%, 2/1/2014		150,000		166,311
5.5%, 2/15/2016		50,000		56,985
5.95%, 4/1/2037		150,000		160,971
				5,139,672
Industrials 1.3%
3M Co.:
Series E, 4.375%, 8/15/2013		100,000		107,989
5.7%, 3/15/2037		25,000		27,441
Archer-Daniels-Midland Co., 5.935%, 10/1/2032		75,000		81,432
Boeing Co.:
3.75%, 11/20/2016		100,000		107,358
5.125%, 2/15/2013		150,000		160,183
6.625%, 2/15/2038		50,000		59,558
Burlington Northern Santa Fe LLC:
5.75%, 5/1/2040		250,000		257,528
5.9%, 7/1/2012		100,000		104,922
Canadian National Railway Co.:
4.4%, 3/15/2013		100,000		106,010
6.375%, 11/15/2037		50,000		57,905
Caterpillar, Inc.:
6.05%, 8/15/2036		25,000		28,050
7.3%, 5/1/2031		120,000		153,219
CRH America, Inc., 5.3%, 10/15/2013		100,000		107,013
CSX Corp.:
6.0%, 10/1/2036		100,000		105,277
6.15%, 5/1/2037		50,000		53,540
6.25%, 4/1/2015		250,000		286,240
Danaher Corp., 5.625%, 1/15/2018		50,000		56,749
Deere & Co., 8.1%, 5/15/2030		50,000		68,133
Emerson Electric Co.:
5.25%, 10/15/2018		50,000		55,880
6.125%, 4/15/2039		50,000		57,026
General Dynamics Corp., 5.375%, 8/15/2015		100,000		113,001
General Electric Co.:
5.0%, 2/1/2013		200,000		212,280
5.25%, 12/6/2017		100,000		110,782
Honeywell International, Inc.:
5.3%, 3/15/2017		50,000		56,702
5.3%, 3/1/2018		50,000		56,179
5.7%, 3/15/2036		50,000		53,385
5.7%, 3/15/2037		50,000		53,304
Illinois Tool Works, Inc., 5.15%, 4/1/2014		300,000		332,894
Ingersoll-Rand Global Holding Co., Ltd., 6.875%, 8/15/2018		300,000		355,509
Koninklijke Philips Electronics NV, 6.875%, 3/11/2038		300,000		347,136
Lockheed Martin Corp.:
4.25%, 11/15/2019		150,000		153,922
Series B, 6.15%, 9/1/2036		75,000		81,603
M.D.C. Holdings, Inc., 5.375%, 7/1/2015		25,000		25,913
Norfolk Southern Corp.:
5.64%, 5/17/2029		96,000		101,838
7.25%, 2/15/2031		100,000		123,187
7.8%, 5/15/2027		4,000		5,186
Norfolk Southern Railway Co., 9.75%, 6/15/2020		40,000		55,432
Raytheon Co.:
4.4%, 2/15/2020		100,000		103,490
7.2%, 8/15/2027		75,000		93,470
Republic Services, Inc., 5.0%, 3/1/2020		100,000		105,689
Tyco International Ltd., 6.875%, 1/15/2021		50,000		58,785
Union Pacific Corp.:
5.75%, 11/15/2017		25,000		28,722
7.0%, 2/1/2016		50,000		59,327
7.875%, 1/15/2019		250,000		318,880
United Parcel Service of America, Inc., 8.375%, 4/1/2020		50,000		67,465
United Parcel Service, Inc., 5.5%, 1/15/2018		200,000		226,793
United Technologies Corp.:
4.875%, 5/1/2015		50,000		55,613
5.375%, 12/15/2017		100,000		114,110
6.125%, 7/15/2038		400,000		450,917
Waste Management, Inc.:
7.0%, 7/15/2028		50,000		58,106
7.1%, 8/1/2026		100,000		118,424
Xerox Corp., 6.75%, 2/1/2017		200,000		233,541
				6,373,038
Information Technology 0.7%
Cisco Systems, Inc.:
5.5%, 2/22/2016		250,000		284,251
5.5%, 1/15/2040		200,000		200,312
5.9%, 2/15/2039		50,000		52,827
Corning, Inc., 5.75%, 8/15/2040		50,000		49,884
Dell, Inc., 5.875%, 6/15/2019		350,000		392,773
Hewlett-Packard Co.:
2.2%, 12/1/2015		150,000		150,205
4.5%, 3/1/2013		300,000		317,715
4.75%, 6/2/2014		100,000		109,126
6.5%, 7/1/2012		50,000		52,806
International Business Machines Corp.:
1.0%, 8/5/2013		200,000		200,575
4.75%, 11/29/2012		100,000		105,695
5.6%, 11/30/2039		100,000		105,605
5.7%, 9/14/2017		150,000		174,397
6.5%, 1/15/2028		125,000		148,957
Microsoft Corp.:
0.875%, 9/27/2013		200,000		200,352
4.2%, 6/1/2019		100,000		105,161
5.2%, 6/1/2039		50,000		50,469
Oracle Corp.:
4.95%, 4/15/2013		75,000		80,464
5.0%, 7/8/2019		100,000		109,168
5.25%, 1/15/2016		100,000		112,851
6.125%, 7/8/2039		125,000		139,058
6.5%, 4/15/2038		100,000		115,956
Pitney Bowes, Inc., 3.875%, 6/15/2013		100,000		104,389
Tyco Electronics Group SA, 6.55%, 10/1/2017		250,000		294,562
				3,657,558
Materials 0.8%
Alcoa, Inc.:
5.55%, 2/1/2017		75,000		79,799
5.9%, 2/1/2027		25,000		24,430
5.95%, 2/1/2037		75,000		71,418
6.15%, 8/15/2020		200,000		211,877
ArcelorMittal:
5.375%, 6/1/2013		100,000		106,472
6.125%, 6/1/2018		100,000		107,108
9.85%, 6/1/2019		75,000		95,080
Barrick Gold Corp., 6.95%, 4/1/2019		125,000		148,603
Cliffs Natural Resources, Inc., 6.25%, 10/1/2040		50,000		49,340
Dow Chemical Co.:
6.0%, 10/1/2012		100,000		106,031
7.6%, 5/15/2014		250,000		289,909
E.I. du Pont de Nemours & Co.:
3.25%, 1/15/2015		200,000		209,571
6.0%, 7/15/2018		175,000		201,943
Freeport-McMoRan Copper & Gold, Inc., 8.375%, 4/1/2017		100,000		109,250
International Paper Co.:
7.5%, 8/15/2021		125,000		146,106
7.95%, 6/15/2018		100,000		119,069
Lafarge SA, 6.5%, 7/15/2016		50,000		54,039
Monsanto Co.:
5.5%, 8/15/2025		25,000		27,897
Series 1, 5.5%, 7/30/2035		50,000		53,701
Newmont Mining Corp.:
5.125%, 10/1/2019		100,000		107,401
5.875%, 4/1/2035		20,000		20,141
Nucor Corp.:
5.85%, 6/1/2018		25,000		28,543
6.4%, 12/1/2037		50,000		57,617
Potash Corp. of Saskatchewan, Inc., 6.5%, 5/15/2019		100,000		116,577
PPG Industries, Inc., 6.65%, 3/15/2018		300,000		352,521
Praxair, Inc.:
3.95%, 6/1/2013		50,000		53,047
4.5%, 8/15/2019		75,000		79,686
Rio Tinto Alcan, Inc.:
4.5%, 5/15/2013		100,000		106,153
4.875%, 9/15/2012		10,000		10,471
5.2%, 1/15/2014		25,000		27,161
5.75%, 6/1/2035		25,000		26,110
6.125%, 12/15/2033		50,000		55,054
Rohm & Haas Co., 6.0%, 9/15/2017		300,000		341,104
Southern Copper Corp., 6.75%, 4/16/2040		300,000		291,843
				3,885,072
Telecommunication Services 1.1%
America Movil SAB de CV:
5.75%, 1/15/2015		50,000		55,742
6.125%, 11/15/2037		100,000		104,090
6.125%, 3/30/2040		100,000		104,523
Ameritech Capital Funding Corp., 6.55%, 1/15/2028		100,000		106,382
AT&T, Inc.:
4.85%, 2/15/2014		100,000		108,617
5.1%, 9/15/2014		225,000		247,262
5.6%, 5/15/2018		200,000		222,720
5.8%, 2/15/2019		450,000		507,758
5.875%, 8/15/2012		150,000		158,390
6.55%, 2/15/2039		300,000		329,049
6.8%, 5/15/2036		50,000		55,902
8.0%, 11/15/2031		20,000		26,466
BellSouth Corp.:
5.2%, 9/15/2014		100,000		110,170
6.0%, 11/15/2034		100,000		101,010
British Telecommunications PLC:
5.95%, 1/15/2018		50,000		55,224
9.875%, 12/15/2030		70,000		96,161
Embarq Corp.:
7.082%, 6/1/2016		175,000		194,534
7.995%, 6/1/2036		125,000		128,077
France Telecom SA:
5.375%, 7/8/2019		150,000		167,844
8.5%, 3/1/2031		75,000		100,942
Koninklijke (Royal) KPN NV, 8.375%, 10/1/2030		50,000		64,325
Motorola Solutions, Inc., 7.5%, 5/15/2025		50,000		58,496
Nokia Corp., 5.375%, 5/15/2019		150,000		144,109
Qwest Corp., 8.375%, 5/1/2016		150,000		177,000
Rogers Communications, Inc., 6.8%, 8/15/2018		100,000		117,997
Telefonica Emisiones SAU:
6.421%, 6/20/2016		125,000		139,568
7.045%, 6/20/2036		150,000		158,696
Verizon Communications, Inc.:
5.55%, 2/15/2016		100,000		112,652
6.35%, 4/1/2019		675,000		784,084
Verizon Virginia, Inc., Series A, 4.625%, 3/15/2013		100,000		105,466
Vodafone Group PLC:
5.0%, 9/15/2015		575,000		633,848
6.15%, 2/27/2037		125,000		134,127
				5,611,231
Utilities 1.4%
Alabama Power Co., 6.125%, 5/15/2038		100,000		111,445
American Electric Power Co., Inc., 5.25%, 6/1/2015		100,000		109,901
Atmos Energy Corp., 4.95%, 10/15/2014		25,000		27,334
CenterPoint Energy Houston Electric LLC, Series J2, 5.7%, 3/15/2013		100,000		107,784
Cleveland Electric Illuminating Co.:
5.7%, 4/1/2017		150,000		164,014
Series D, 7.88%, 11/1/2017		75,000		91,961
Commonwealth Edison Co.:
5.8%, 3/15/2018		50,000		56,051
Series 106, 6.15%, 9/15/2017		100,000		115,734
Consolidated Edison Co. of New York:
4.875%, 2/1/2013		50,000		53,013
Series 2005-A, 5.3%, 3/1/2035		150,000		149,608
6.2%, 6/15/2036		125,000		139,181
Series 08-B, 6.75%, 4/1/2038		50,000		59,335
Constellation Energy Group, Inc., 4.55%, 6/15/2015		30,000		31,926
Detroit Edison Co., 5.7%, 10/1/2037		50,000		52,674
Dominion Resources, Inc.:
Series C, 5.15%, 7/15/2015		50,000		55,413
Series F, 5.25%, 8/1/2033		100,000		110,099
Series B, 5.95%, 6/15/2035		50,000		52,842
Duke Energy Carolinas LLC:
5.3%, 10/1/2015		75,000		84,621
6.05%, 4/15/2038		140,000		154,937
Duke Energy Indiana, Inc.:
5.0%, 9/15/2013		100,000		107,798
6.45%, 4/1/2039		150,000		170,865
Duke Energy Ohio, Inc., 2.1%, 6/15/2013		100,000		102,236
Emerson Electric Co., 4.75%, 10/15/2015		75,000		83,090
Entergy Texas, Inc., 7.125%, 2/1/2019		100,000		117,322
Exelon Corp., 5.625%, 6/15/2035		25,000		23,758
Exelon Generation Co., LLC, 5.2%, 10/1/2019		125,000		130,450
Florida Power & Light Co.:
4.95%, 6/1/2035		50,000		48,505
5.55%, 11/1/2017		400,000		467,909
5.65%, 2/1/2037		50,000		53,021
Florida Power Corp., 5.65%, 6/15/2018		125,000		142,606
Georgia Power Co., 4.25%, 12/1/2019		100,000		104,246
KeySpan Corp., 8.0%, 11/15/2030		50,000		62,224
MidAmerican Energy Co., 5.3%, 3/15/2018		100,000		110,663
MidAmerican Energy Holdings Co.:
5.875%, 10/1/2012		25,000		26,511
6.125%, 4/1/2036		175,000		188,456
6.5%, 9/15/2037		100,000		112,741
Nevada Power Co., Series N, 6.65%, 4/1/2036		25,000		28,862
Northern States Power Co., 6.25%, 6/1/2036		100,000		115,038
NSTAR Electric Co., 4.875%, 4/15/2014		25,000		27,292
Oncor Electric Delivery Co., 7.0%, 9/1/2022		300,000		357,664
Pacific Gas & Electric Co.:
5.4%, 1/15/2040		50,000		48,521
5.625%, 11/30/2017		25,000		28,379
5.8%, 3/1/2037		100,000		102,711
6.05%, 3/1/2034		200,000		211,480
PPL Energy Supply LLC, 5.4%, 8/15/2014		100,000		109,119
Progress Energy, Inc.:
6.0%, 12/1/2039		100,000		105,369
7.75%, 3/1/2031		50,000		62,575
PSE&G Power LLC, 5.5%, 12/1/2015		50,000		55,190
Public Service Co. of Colorado, 4.875%, 3/1/2013		75,000		79,950
Puget Sound Energy, Inc.:
5.483%, 6/1/2035		25,000		25,145
5.795%, 3/15/2040		100,000		105,132
San Diego Gas & Electric Co., 5.35%, 5/15/2040		50,000		51,346
Scottish Power Ltd., 5.375%, 3/15/2015		150,000		161,990
Sempra Energy, 6.0%, 2/1/2013		25,000		26,801
Sierra Pacific Power Co., 5.45%, 9/1/2013		50,000		54,229
Southern California Edison Co.:
Series 2008-A, 5.95%, 2/1/2038		55,000		60,741
6.0%, 1/15/2034		50,000		55,207
6.05%, 3/15/2039		50,000		56,045
6.65%, 4/1/2029		100,000		114,525
Southern California Gas Co., 5.75%, 11/15/2035		50,000		54,361
Southern Power Co., Series B, 6.25%, 7/15/2012		25,000		26,297
Southern Union Co., 8.25%, 11/15/2029		50,000		60,089
Southwestern Electric Power Co.:
Series F, 5.875%, 3/1/2018		150,000		165,283
6.2%, 3/15/2040		100,000		101,759
TransAlta Corp., 4.75%, 1/15/2015		150,000		160,184
Union Electric Co., 6.4%, 6/15/2017		100,000		115,916
United Utilities PLC, 5.375%, 2/1/2019		30,000		31,261
Virginia Electric & Power Co.:
Series A, 5.4%, 1/15/2016		200,000		227,264
5.4%, 4/30/2018		200,000		224,042
8.875%, 11/15/2038		50,000		74,017
Xcel Energy, Inc., 6.5%, 7/1/2036		75,000		85,465
				7,149,523
Total Corporate Bonds (Cost $91,285,421)				96,697,925

Mortgage-Backed Securities Pass-Throughs 32.7%
Federal Home Loan Mortgage Corp.:
2.305%*, 12/1/2033		50,200		52,044
2.375%*, 3/1/2035		15,455		16,094
2.5%*, 12/1/2035		120,048		125,862
2.52%*, 3/1/2036		561,794		587,876
2.55%*, 11/1/2035		56,072		58,649
2.725%*, 9/1/2035		35,878		37,744
2.865%*, 9/1/2035		118,953		124,446
2.92%*, 11/1/2035		90,414		95,623
3.5%, with various maturities from 3/1/2025 until 1/1/2041 (a)		1,986,561		1,992,848
4.0%, with various maturities from 1/1/2020 until 1/1/2041 (a)		7,709,053		7,823,008
4.5%, with various maturities from 1/1/2020 until 3/1/2041 (a)		13,689,620		14,248,817
4.923%*, 12/1/2034		40,468		43,296
5.0%, with various maturities from 12/1/2017 until 3/1/2040		10,300,797		10,975,918
5.15%*, 6/1/2035		51,864		55,300
5.441%*, 5/1/2037		28,484		30,216
5.5%, with various maturities from 11/1/2013 until 11/1/2038 (a)		8,433,729		9,138,837
5.543%*, 1/1/2037		40,456		43,191
5.616%*, 4/1/2036		34,822		36,957
5.708%*, 4/1/2037		113,068		122,263
5.718%*, 9/1/2037		112,270		119,708
5.729%*, 4/1/2037		39,069		41,657
5.822%*, 2/1/2038		149,917		162,426
5.844%*, 5/1/2037		46,366		49,463
5.889%*, 12/1/2036		27,621		29,463
5.925%*, 2/1/2037		53,711		57,606
6.0%, with various maturities from 9/1/2021 until 7/1/2038		4,341,249		4,780,564
6.39%*, 8/1/2036		25,522		26,740
6.5%, with various maturities from 12/1/2014 until 11/1/2037		1,533,356		1,723,991
7.0%, with various maturities from 12/1/2024 until 12/1/2026		39,920		45,294
7.5%, with various maturities from 5/1/2024 until 6/1/2027		6,266		7,117
Federal National Mortgage Association:
2.309%*, 6/1/2035		86,065		89,261
2.365%*, 3/1/2035		109,654		114,218
2.472%*, 6/1/2035		55,145		58,008
2.612%*, 1/1/2036		78,621		82,468
2.685%*, 4/1/2035		105,186		110,398
3.0%, 9/1/2025 (a)		400,000		397,250
3.5%, with various maturities from 8/1/2025 until 1/1/2041 (a)		3,285,203		3,285,635
3.598%*, 5/1/2040		299,491		313,314
4.0%, with various maturities from 12/1/2020 until 1/1/2041 (a)		14,516,815		14,721,563
4.5%, with various maturities from 2/1/2020 until 4/1/2041 (a)		17,966,709		18,707,364
4.781%*, 8/1/2036		27,036		28,827
4.937%*, 8/1/2035		112,707		121,272
5.0%, with various maturities from 11/1/2020 until 6/1/2040 (a)		13,824,056		14,753,479
5.086%*, 7/1/2035		40,804		43,420
5.512%*, 10/1/2036		41,442		43,337
5.5%, with various maturities from 8/1/2019 until 1/1/2040		11,921,307		12,913,433
5.506%*, 1/1/2036		108,754		115,555
5.622%*, 3/1/2037		28,106		29,968
5.625%*, 11/1/2036		52,388		55,396
5.648%*, 1/1/2037		32,805		34,978
5.721%*, 1/1/2037		24,099		25,331
5.742%*, 6/1/2036		132,340		137,977
5.971%*, 9/1/2036		31,226		33,285
6.0%, with various maturities from 12/1/2016 until 4/1/2039		7,471,054		8,227,912
6.5%, with various maturities from 1/1/2018 until 1/1/2038		2,506,694		2,834,872
7.0%, with various maturities from 6/1/2012 until 6/1/2038		590,085		667,084
7.5%, with various maturities from 1/1/2024 until 4/1/2028		17,201		19,459
8.0%, with various maturities from 12/1/2021 until 11/1/2031		26,544		30,341
8.5%, with various maturities from 12/1/2025 until 8/1/2031		8,524		9,822
Government National Mortgage Association:
4.0%, with various maturities from 11/15/2024 until 11/20/2040 (a)		4,619,858		4,717,746
4.5%, with various maturities from 5/15/2039 until 1/20/2041 (a)		12,125,379		12,789,871
5.0%, with various maturities from 10/20/2035 until 5/20/2041 (a)		8,912,263		9,688,978
5.5%, with various maturities from 9/15/2033 until 10/20/2040		3,650,594		4,023,180
6.0%, with various maturities from 2/15/2029 until 9/20/2040		2,918,612		3,242,146
6.5%, with various maturities from 11/15/2023 until 10/20/2037		778,827		880,145
7.0%, 1/15/2039		136,839		155,518
7.5%, with various maturities from 8/15/2029 until 6/15/2032		32,083		37,095
8.0%, with various maturities from 7/15/2022 until 3/15/2032		63,813		73,643
8.5%, 11/15/2029		18,643		21,502
Total Mortgage-Backed Securities Pass-Throughs (Cost $161,862,520)				166,288,069

Asset-Backed 0.3%
Automobile Receivables 0.1%
USAA Auto Owner Trust:
"A4", Series 2009-2, 2.53%, 7/15/2015		100,000		102,839
"A4", Series 2009-1, 4.77%, 9/15/2014		150,000		156,087
				258,926
Credit Card Receivables 0.2%
Chase Issuance Trust, "A2", Series 2006-A2, 5.16%, 4/16/2018		150,000		170,202
Citibank Credit Card Issuance Trust:
"A10", Series 2003-A10, 4.75%, 12/10/2015		100,000		108,826
"A8", Series 2004-A8, 4.9%, 12/12/2016		100,000		111,148
"A3", Series 2006-A3, 5.3%, 3/15/2018		100,000		113,862
"A8", Series 2007-A8, 5.65%, 9/20/2019		200,000		229,673
"A3", Series 2007-A3, 6.15%, 6/15/2039		35,000		41,341
"C6", Series 2008-C6, 6.3%, 6/20/2014		50,000		52,443
Discover Card Master Trust, "A4", Series 2008-A4, 5.65%, 12/15/2015		100,000		109,313
MBNA Credit Card Master Note Trust, "B1", Series 2004-B1, 4.45%, 8/15/2016		25,000		26,818
				963,626
Utilities 0.0%
CenterPoint Energy Transition Bond Co., LLC, "A4", Series 2005-A, 5.17%, 8/1/2019		100,000		112,897
Entergy Texas Restoration Funding LLC, "A3", Series 2009-A, 4.38%, 11/1/2023		50,000		52,608
				165,505
Total Asset-Backed (Cost $1,315,809)				1,388,057

Commercial Mortgage-Backed Securities 2.4%
Banc of America Commercial Mortgage, Inc.:
"A4", Series 2004-1, 4.76%, 11/10/2039		200,000		212,055
"A6", Series 2004-4, 4.877%, 7/10/2042		120,000		127,685
"AJ", Series 2005-6, 5.195%*, 9/10/2047		100,000		96,975
"AM", Series 2006-6, 5.39%, 10/10/2045		150,000		141,823
"A4", Series 2007-1, 5.451%, 1/15/2049		100,000		108,148
"A4", Series 2006-4, 5.634%, 7/10/2046		400,000		437,668
"AM", Series 2006-4, 5.675%, 7/10/2046		100,000		99,376
Bear Stearns Commercial Mortgage Securities, Inc.:
"A4", Series 2004-T14, 5.2%, 1/12/2041		500,000		537,464
"A4", Series 2007-T26, 5.471%, 1/12/2045		100,000		110,104
"A4", Series 2006-T24, 5.537%, 10/12/2041		300,000		328,254
"A4", Series 2006-PW13, 5.54%, 9/11/2041		250,000		272,443
"AJ", Series 2006-PW12, 5.759%*, 9/11/2038		50,000		46,765
Citigroup Commercial Mortgage Trust, "AJ", Series 2006-C4, 5.92%*, 3/15/2049		250,000		227,006
Commercial Mortgage Pass-Through Certificates:
"A4", Series 2006-C8, 5.306%, 12/10/2046		220,000		235,587
"A4", Series 2007-C9, 5.815%*, 12/10/2049		100,000		109,838
Credit Suisse Mortgage Capital Certificates:
"A3", Series 2006-C5, 5.311%, 12/15/2039		100,000		107,102
"A3", Series 2006-C4, 5.467%, 9/15/2039		125,000		134,807
"A4", Series 2006-C1, 5.609%*, 2/15/2039		380,000		413,922
CS First Boston Mortgage Securities Corp., "A5", Series 2003-C3, 3.936%, 5/15/2038		250,000		259,012
GMAC Commercial Mortgage Securities, Inc., "A4", Series 2003-C3, 5.023%, 4/10/2040		200,000		213,315
Greenwich Capital Commercial Funding Corp.:
"A7", Series 2004-GG1, 5.317%*, 6/10/2036		200,000		214,887
"A4", Series 2007-GG11, 5.736%, 12/10/2049		115,000		123,401
"AM", Series 2006-GG7, 5.881%*, 7/10/2038		150,000		154,123
GS Mortgage Securities Corp. II:
"A4A", Series 2005-GG4, 4.751%, 7/10/2039		100,000		106,595
"A4", Series 2006-GG6, 5.553%, 4/10/2038		100,000		108,676
"A4", Series 2006-GG8, 5.56%, 11/10/2039		150,000		162,547
GS Mortgage Securities Trust, "A4", Series 2007-GG10, 5.8%*, 8/10/2045		125,000		134,200
JPMorgan Chase Commercial Mortgage Securities Corp.:
"A2", Series 2002-CIB5, 5.161%, 10/12/2037		200,000		208,005
"A3", Series 2006-LDP9, 5.336%, 5/15/2047		323,000		343,919
"A3", Series 2007-LDPX, 5.42%, 1/15/2049		125,000		134,025
"A4", Series 2007-CB18, 5.44%, 6/12/2047		100,000		106,876
"AJ", Series 2005-LDP5, 5.492%*, 12/15/2044		100,000		95,944
"A4", Series 2007-CB19, 5.742%*, 2/12/2049		100,000		108,532
"A4", Series 2007-LD11, 6.005%*, 6/15/2049		380,000		409,829
LB-UBS Commercial Mortgage Trust:
"A4", Series 2003-C3, 4.166%, 5/15/2032		250,000		260,439
"A2", Series 2006-C6, 5.262%, 9/15/2039		33,346		33,405
"A3", Series 2006-C7, 5.347%, 11/15/2038		500,000		538,244
"A3", Series 2007-C2, 5.43%, 2/15/2040		175,000		186,513
"AM", Series 2006-C3, 5.712%, 3/15/2039		50,000		49,800
"A3", Series 2007-C7, 5.866%, 9/15/2045		105,000		114,172
"A2", Series 2008-C1, 6.315%*, 4/15/2041		300,000		334,091
Merrill Lynch Mortgage Trust:
"A2", Series 2004-BPC1, 4.071%, 10/12/2041		11,041		11,061
"A4", Series 2005-MCP1, 4.747%*, 6/12/2043		200,000		213,080
"A4", Series 2007-C1, 6.02%*, 6/12/2050		227,000		247,614
Merrill Lynch/Countrywide Commercial Mortgage Trust:
"A4", Series 2006-1, 5.43%*, 2/12/2039		200,000		218,261
"A4", Series 2007-6, 5.485%, 3/12/2051		100,000		106,212
Morgan Stanley Capital I:
"A4", Series 2003-IQ6, 4.97%, 12/15/2041		358,000		381,098
"A4", Series 2005-HQ5, 5.168%, 1/14/2042		400,000		430,934
"A4", Series 2006-IQ12, 5.332%, 12/15/2043		500,000		540,187
"AJ", Series 2006-HQ8, 5.679%*, 3/12/2044		100,000		93,021
"A4", Series 2007-T27, 5.789%*, 6/11/2042		385,000		426,229
Wachovia Bank Commercial Mortgage Trust:
"A4", Series 2004-C15, 4.803%, 10/15/2041		500,000		535,572
"A4", Series 2005-C22, 5.44%*, 12/15/2044		500,000		541,926
"AM", Series 2005-C22, 5.49%*, 12/15/2044		100,000		103,170
"AM", Series 2006-C26, 6.173%*, 6/15/2045		130,000		134,812
Total Commercial Mortgage-Backed Securities (Cost $11,018,256)				12,130,749

Government & Agency Obligations 42.0%
Other Government Related (b) 1.6%
European Investment Bank:
1.75%, 9/14/2012		200,000		202,970
2.375%, 3/14/2014		1,200,000		1,243,158
4.25%, 7/15/2013		200,000		214,166
4.625%, 5/15/2014		450,000		494,409
4.875%, 2/15/2036		200,000		206,153
5.125%, 5/30/2017		50,000		57,433
General Electric Capital Corp., FDIC Guaranteed, 2.125%, 12/21/2012		1,000,000		1,023,835
Hydro-Quebec, Series HY, 8.4%, 1/15/2022		100,000		137,933
International Bank for Reconstruction & Development:
1.75%, 7/15/2013		700,000		717,448
4.75%, 2/15/2035		25,000		25,906
5.0%, 4/1/2016		50,000		56,819
8.625%, 10/15/2016		100,000		130,119
Japan Finance Corp., 2.875%, 2/2/2015		300,000		316,385
Kreditanstalt fuer Wiederaufbau:
Zero Coupon, 6/29/2037		500,000		143,585
2.625%, 3/3/2015		600,000		626,336
3.25%, 3/15/2013		750,000		783,463
3.5%, 3/10/2014		100,000		106,561
4.125%, 10/15/2014		150,000		163,642
7.0%, 3/1/2013		275,000		300,802
Landwirtschaftliche Rentenbank:
3.125%, 7/15/2015		200,000		211,122
3.25%, 3/15/2013		250,000		260,982
5.125%, 2/1/2017		100,000		114,243
Oesterreichische Kontrollbank AG:
4.5%, 3/9/2015		350,000		386,647
4.75%, 10/16/2012		100,000		105,532
Ontario Electricity Financial Corp., 7.45%, 3/31/2013		50,000		55,578
Pemex Project Funding Master Trust:
5.75%, 3/1/2018		200,000		219,301
6.625%, 6/15/2035		50,000		52,701
				8,357,229
Sovereign Bonds 1.6%
Export Development Canada, 3.125%, 4/24/2014		300,000		317,984
Federal Republic of Brazil:
5.625%, 1/7/2041		250,000		256,875
6.0%, 1/17/2017		100,000		116,850
7.125%, 1/20/2037		50,000		61,750
7.875%, 3/7/2015		300,000		362,550
8.875%, 10/14/2019		100,000		137,250
8.875%, 4/15/2024		100,000		142,750
11.0%, 8/17/2040		755,000		1,029,443
Government of Canada, 2.375%, 9/10/2014		300,000		312,171
Province of Ontario:
4.0%, 10/7/2019		300,000		311,714
4.375%, 2/15/2013		100,000		105,875
4.4%, 4/14/2020		500,000		530,300
4.5%, 2/3/2015		150,000		165,501
4.95%, 11/28/2016		25,000		28,193
Province of Quebec:
4.625%, 5/14/2018		50,000		55,165
5.125%, 11/14/2016		50,000		57,005
Series NN, 7.125%, 2/9/2024		100,000		129,424
Series PD, 7.5%, 9/15/2029		100,000		133,695
Republic of Chile, 5.5%, 1/15/2013		200,000		212,900
Republic of Italy:
4.5%, 1/21/2015		250,000		266,057
5.375%, 6/12/2017		300,000		325,642
5.375%, 6/15/2033		100,000		97,556
6.875%, 9/27/2023		200,000		226,338
Republic of Korea:
4.875%, 9/22/2014		50,000		54,131
5.125%, 12/7/2016		100,000		109,939
Republic of Panama, 7.25%, 3/15/2015		300,000		353,400
Republic of Peru:
6.55%, 3/14/2037		50,000		55,775
7.35%, 7/21/2025		315,000		384,773
Republic of Poland, 6.375%, 7/15/2019		200,000		228,500
Republic of South Africa, 6.875%, 5/27/2019		100,000		119,250
State of Israel, 5.125%, 3/26/2019		100,000		107,048
United Mexican States:
5.625%, 1/15/2017		470,000		534,155
6.375%, 1/16/2013		350,000		377,125
Series A, 6.75%, 9/27/2034		216,000		251,100
				7,958,184
US Government Sponsored Agencies 6.3%
Federal Home Loan Bank:
1.625%, 9/26/2012		1,000,000		1,015,476
1.625%, 11/21/2012 (c)		1,500,000		1,525,561
1.75%, 8/22/2012		1,000,000		1,015,895
3.375%, 2/27/2013		1,000,000		1,048,251
3.875%, 6/14/2013 (c)		1,000,000		1,065,287
4.5%, 11/15/2012		1,000,000		1,055,042
Federal Home Loan Mortgage Corp.:
1.625%, 4/15/2013 (c)		3,000,000		3,061,941
2.125%, 9/21/2012 (c)		2,700,000		2,757,988
2.5%, 4/23/2014 (c)		2,200,000		2,297,489
2.5%, 5/27/2016		1,000,000		1,025,578
2.875%, 2/9/2015		1,000,000		1,053,016
3.75%, 3/27/2019		1,000,000		1,058,127
4.5%, 1/15/2013		500,000		531,336
6.25%, 7/15/2032		300,000		369,959
6.75%, 9/15/2029		3,000		3,818
Federal National Mortgage Association:
0.375%, 12/28/2012 (c)		2,000,000		2,000,456
1.625%, 10/26/2015 (c)		2,000,000		1,991,370
1.75%, 5/7/2013 (c)		2,000,000		2,044,938
3.25%, 4/9/2013 (c)		2,350,000		2,468,536
3.875%, 7/12/2013 (c)		1,400,000		1,496,053
5.125%, 8/19/2024		1,000,000		1,005,365
6.25%, 5/15/2029		1,000,000		1,214,099
7.125%, 1/15/2030		50,000		66,528
7.25%, 5/15/2030		200,000		269,511
Tennessee Valley Authority, 5.25%, 9/15/2039		500,000		529,405
				31,971,025
US Treasury Obligations 32.5%
US Treasury Bonds:
3.5%, 2/15/2039		1,950,000		1,674,562
3.875%, 8/15/2040 (c)		3,000,000		2,746,875
4.25%, 5/15/2039 (c)		3,225,000		3,163,525
4.375%, 2/15/2038		565,000		568,708
4.375%, 11/15/2039 (c)		3,290,000		3,291,543
4.375%, 5/15/2040 (c)		2,900,000		2,898,202
4.5%, 2/15/2036		50,000		51,672
4.5%, 8/15/2039 (c)		2,500,000		2,556,250
4.625%, 2/15/2040 (c)		1,100,000		1,146,922
6.0%, 2/15/2026		385,000		479,205
6.25%, 8/15/2023 (c)		1,200,000		1,522,313
7.25%, 8/15/2022		415,000		565,567
7.625%, 11/15/2022		90,000		126,141
7.875%, 2/15/2021		300,000		420,773
8.0%, 11/15/2021		565,000		804,507
US Treasury Notes:
0.75%, 8/15/2013 (c)		5,000,000		5,026,560
1.0%, 1/15/2014 (c)		4,000,000		4,035,312
1.125%, 12/15/2012 (c)		5,000,000		5,056,445
1.375%, 1/15/2013 (c)		5,000,000		5,077,345
1.375%, 11/30/2015		5,000,000		4,975,390
1.5%, 12/31/2013		1,000,000		1,021,484
1.75%, 4/15/2013 (c)		10,000,000		10,235,200
1.75%, 3/31/2014 (c)		3,000,000		3,083,436
1.875%, 6/15/2012		6,750,000		6,855,732
1.875%, 2/28/2014 (c)		4,000,000		4,124,688
1.875%, 6/30/2015 (c)		5,000,000		5,117,190
1.875%, 8/31/2017 (c)		6,000,000		5,880,000
2.0%, 11/30/2013 (c)		1,100,000		1,136,609
2.125%, 11/30/2014		2,000,000		2,074,376
2.25%, 5/31/2014 (c)		2,500,000		2,606,055
2.25%, 1/31/2015		2,000,000		2,081,094
2.25%, 3/31/2016		4,000,000		4,114,080
2.375%, 8/31/2014 (c)		3,000,000		3,138,984
2.375%, 9/30/2014		1,200,000		1,255,874
2.5%, 4/30/2015 (c)		5,000,000		5,243,750
2.625%, 7/31/2014 (c)		2,250,000		2,371,817
2.625%, 12/31/2014 (c)		4,500,000		4,743,279
2.625%, 2/29/2016		1,750,000		1,831,483
2.625%, 8/15/2020 (c)		3,250,000		3,145,899
2.625%, 11/15/2020		4,000,000		3,852,500
2.75%, 2/28/2013		500,000		519,512
2.75%, 2/15/2019 (c)		3,000,000		3,028,827
3.0%, 8/31/2016		2,000,000		2,117,500
3.125%, 9/30/2013 (c)		2,500,000		2,644,530
3.125%, 1/31/2017 (c)		5,000,000		5,301,560
3.25%, 3/31/2017 (c)		3,500,000		3,727,500
3.375%, 11/15/2019 (c)		3,500,000		3,648,750
3.625%, 12/31/2012		500,000		524,395
3.625%, 8/15/2019 (c)		2,500,000		2,663,672
3.625%, 2/15/2020 (c)		4,000,000		4,231,564
3.625%, 2/15/2021 (c)		4,000,000		4,170,936
3.75%, 11/15/2018		475,000		514,558
4.0%, 8/15/2018		600,000		661,219
4.25%, 9/30/2012		400,000		419,750
4.25%, 11/15/2013 (c)		2,950,000		3,202,364
4.5%, 11/15/2015		1,480,000		1,670,781
4.5%, 2/15/2016		660,000		746,471
4.5%, 5/15/2017		1,140,000		1,293,544
4.875%, 6/30/2012		1,500,000		1,569,199
4.875%, 8/15/2016 (c)		2,425,000		2,795,569
				165,553,548
Total Government & Agency Obligations (Cost $207,952,887)				213,839,986

Municipal Bonds and Notes 0.8%
California, Bay Area Toll Authority, Toll Bridge Revenue, Build America Bonds, 6.263%, 4/1/2049 (d)		200,000		217,630
California, Metropolitan Water District of Southern California, Build America Bonds, 6.947%, 7/1/2040 (d)		100,000		108,834
California, State Build America Bonds:
7.3%, 10/1/2039 (d)		350,000		392,857
7.55%, 4/1/2039 (d)		90,000		103,864
Chicago, IL, Board of Education, Qualified School Construction Bond, 6.319%, 11/1/2029 (d)		100,000		101,502
Chicago, IL, Transit Authority, Transfer Tax Receipts Revenue, Series A, 6.899%, 12/1/2040 (d)		50,000		53,395
Chicago, IL, Taxable Project, Series C1, 7.781%, 1/1/2035 (d)		50,000		57,450
Clark County, NV, Airport Revenue, Build America Bonds, Series C, 6.82%, 7/1/2045 (d)		120,000		132,143
Connecticut, State General Obligation, Series A, 5.85%, 3/15/2032 (d)		200,000		213,710
East Bay, CA, Municipal Utility District Water Systems Revenue, Build America Bonds, 5.874%, 6/1/2040 (d)		100,000		105,379
Georgia, Municipal Electric Authority, Build America Bonds, Plant Vogtle Units 3 & 4 Project, Series J, 6.637%, 4/1/2057 (d)		100,000		98,406
Illinois, State General Obligation, Taxable Pension, 5.1%, 6/1/2033 (d)		275,000		235,240
Illinois, State Build America Bonds, 6.63%, 2/1/2035 (d)		300,000		303,561
Los Angeles, CA, Department of Airports Revenue, Build America Bonds, Series C, 6.582%, 5/15/2039 (d)		125,000		133,541
Los Angeles, CA, Unified School District, Build America Bonds, 6.758%, 7/1/2034 (d)		200,000		226,654
Nashville & Davidson County, TN, Metropolitan Government, Convention Center Authority Revenue, Build America Bonds, Series B, 6.731%, 7/1/2043 (d)		50,000		52,305
New Jersey, State Transportation Trust Fund Authority, Build America Bonds:
Series C, 6.104%, 12/15/2028 (d)		300,000		307,875
Series B, 6.561%, 12/15/2040 (d)		50,000		54,220
New York, State Dormitory Authority, Personal Income Tax Revenue, Build America Bonds, 5.6%, 3/15/2040 (d)		125,000		128,986
New York, State Dormitory Authority, State Personal Income Tax Revenue, Build America Bonds, 5.628%, 3/15/2039 (d)		25,000		25,594
New York, Metropolitan Transportation Authority Revenue, Build America Bonds, 5.871%, 11/15/2039 (d)		150,000		147,165
New York, Build America Bonds, Series F-1, 6.646%, 12/1/2031 (d)		100,000		108,179
New York City, NY, Municipal Water Finance Authority, Water & Sewer Revenue, Build America Bonds:
5.724%, 6/15/2042 (d)		100,000		105,000
5.75%, 6/15/2041 (d)		200,000		210,024
North Texas, Tollway Authority Revenue, Build America Bonds, 6.718%, 1/1/2049 (d)		100,000		109,844
Ohio, State University General Receipts, Build America Bonds, 4.91%, 6/1/2040 (d)		50,000		48,087
Oregon, State General Obligation, Taxable Pension, 5.892%, 6/1/2027 (d)		25,000		26,781
Pennsylvania, State Public School Building Authority Revenue, Qualified School Construction Bond, Series A, 5.0%, 9/15/2027 (d)		100,000		94,162
Phoenix, AZ, Build America Bonds, Series A, 5.269%, 7/1/2034 (d)		40,000		40,583
Port Authority of New York & New Jersey, One Hundred Sixty-fourth Series, 5.647%, 11/1/2040 (d)		150,000		154,066
San Antonio, TX, Electric & Gas Revenue, Build America Bonds, 5.985%, 2/1/2039 (d)		50,000		55,243
Texas, University Revenues, Build America Bonds, Series C, 4.794%, 8/15/2046 (d)		50,000		47,556
Texas, Build America Bonds, 5.517%, 4/1/2039 (d)		50,000		52,997
Utah, Build America Bonds, Series B, 3.539%, 7/1/2025 (d)		50,000		47,754
Washington, Central Puget Sound Regional Transit Authority, Sales & Use Tax Revenue, Build American Bonds, 5.491%, 11/1/2039 (d)		50,000		52,523
Total Municipal Bonds and Notes (Cost $4,248,787)				4,353,110

Preferred Securities 0.2%
Financials
Capital One Capital V, 10.25%, 8/15/2039		100,000		106,000
Goldman Sachs Capital II, 5.793%, 6/1/2043 (e)		50,000		40,000
JPMorgan Chase Capital XXVII, Series AA, 7.0%, 11/1/2039		215,000		214,734
MUFG Capital Finance 1 Ltd., 6.346%, 7/25/2016 (e)		100,000		101,628
SunTrust Capital VIII, 6.1%, 12/15/2036		350,000		343,000
XL Group PLC, Series E, 6.5%, 4/15/2017 (e)		50,000		45,875
Total Preferred Securities (Cost $818,624)				851,237

	Shares		Value ($)

Securities Lending Collateral 25.3%
Daily Assets Fund Institutional, 0.13% (f) (g) (Cost $128,833,560)		128,833,560		128,833,560

Cash Equivalents 11.2%
Central Cash Management Fund, 0.11% (f) (Cost $57,287,701)		57,287,701		57,287,701

	% of Net Assets			Value ($)

Total Investment Portfolio ($664,623,565)+		133.9			681,670,394
Other Assets and Liabilities, Net		(33.9	)		(172,467,756	)
Net Assets		100.0			509,202,638

* These securities are shown at their current rate as of June 30, 2011. Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.

+ The cost for federal income tax purposes was $664,658,341. At June 30, 2011, net unrealized appreciation for all securities based on tax cost was $17,012,053. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $18,550,858 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $1,538,805.

(a) When-issued or delayed delivery security included.

(b) Government-backed debt issued by financial companies or government sponsored enterprises.

(c) All or a portion of these securities were on loan (see Notes to Financial Statements). The value of all securities loaned at June 30, 2011 amounted to $125,213,720, which is 24.6% of net assets.

(d) Taxable issue.

(e) Date shown is call date; not a maturity date for the perpetual preferred securities.

(f) Affiliated fund managed by Deutsche Investment Management Americas Inc. The rate shown is the annualized seven-day yield at period end.

(g) Represents collateral held in connection with securities lending. Income earned by the Fund is net of borrower rebates.

144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.

FDIC: Federal Deposit Insurance Corp.

REIT: Real Estate Investment Trust

Included in the portfolio are investments in mortgage- or asset-backed securities which are interests in separate pools of mortgages or assets. Effective maturities of these investments may be shorter than stated maturities due to prepayments. Some separate investments in the Federal Home Loan Mortgage Corp., Federal National Mortgage Association and Government National Mortgage Association issues which have similar coupon rates have been aggregated for presentation purposes in this investment portfolio.

Fair Value Measurements

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used as of June 30, 2011 in valuing the Fund's investments. For information on the Fund's policy regarding the valuation of investments, please refer to the Security Valuation section of Note A in the accompanying Notes to Financial Statements.

Assets	Level 1		Level 2		Level 3		Total

Fixed Income Investments (h)
Corporate Bonds	$	—	$	96,697,925	$	—	$	96,697,925
Mortgage-Backed Securities Pass-Throughs		—		166,288,069		—		166,288,069
Asset-Backed		—		1,388,057		—		1,388,057
Commercial Mortgage- Backed Securities		—		12,130,749		—		12,130,749
Government & Agency Obligations		—		213,839,986		—		213,839,986
Municipal Bonds and Notes		—		4,353,110		—		4,353,110
Preferred Securities		—		851,237		—		851,237
Short-Term Investments (h)		186,121,261		—		—		186,121,261
Total	$	186,121,261	$	495,549,133	$	—	$	681,670,394

There have been no transfers between Level 1 and Level 2 fair value measurements during the period ended June 30, 2011.

(h) See Investment Portfolio for additional detailed categorizations.

The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities

as of June 30, 2011 (Unaudited)
Assets
Investments: Investments in non-affiliated securities, at value (cost $478,502,304) — including $125,213,720 of securities loaned	$	495,549,133
Investment in Daily Assets Fund Institutional (cost $128,833,560)*		128,833,560
Investment in Central Cash Management Fund (cost $57,287,701)		57,287,701
Total investments in securities, at value (cost $664,623,565)		681,670,394
Cash		103,281
Receivable for investments sold		4,941,586
Receivable for Fund shares sold		514,616
Interest receivable		3,551,067
Due from Advisor		9,641
Other assets		21,623
Total assets		690,812,208
Liabilities
Payable upon return of securities loaned		128,833,560
Payable for investments purchased		1,337,137
Payable for investments purchased — when-issued/delayed delivery securities		49,293,307
Payable for Fund shares redeemed		1,658,581
Distributions payable		164,899
Accrued management fee		7,632
Accrued expenses		314,454
Total liabilities		181,609,570
Net assets, at value	$	509,202,638
Net Assets Consist of:
Distributions in excess of net investment income		(28,953	)
Net unrealized appreciation (depreciation) on investments		17,046,829
Accumulated net realized gain (loss)		2,231,101
Paid-in capital		489,953,661
Net assets, at value	$	509,202,638

* Represents collateral on securities loaned.

The accompanying notes are an integral part of the financial statements.

Statement of Assets and Liabilities as of June 30, 2011 (Unaudited) (continued)
Net Asset Value
Class A Net Asset Value, offering and redemption price per share ($93,029,789 ÷ 8,685,948 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$	10.71
Maximum offering price per share (100 ÷ 97.25 of $10.71)	$	11.01
Class S Net Asset Value, offering and redemption price per share ($25,197,054 ÷ 2,351,538 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$	10.72
Institutional Class Net Asset Value, offering and redemption price per share ($390,975,795 ÷ 36,493,183 outstanding shares of beneficial interest, $.01 par value, unlimited number of shares authorized)	$	10.71

The accompanying notes are an integral part of the financial statements.

Statement of Operations

for the six months ended June 30, 2011 (Unaudited)
Investment Income
Interest	$	7,951,658
Income distributions — Central Cash Management Fund		42,662
Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates		25,064
Total income		8,019,384
Expenses: Management fee		380,213
Administration fee		253,475
Services to shareholders		227,605
Distribution service fee		111,056
Custodian fee		15,781
Professional fees		46,163
Reports to shareholders		37,539
Registration fees		58,931
Trustees' fees and expenses		8,149
Other		46,140
Total expenses before expense reductions		1,185,052
Expense reductions		(485,896	)
Total expenses after expense reductions		699,156
Net investment income (loss)		7,320,228
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from investments		2,212,989
Change in net unrealized appreciation (depreciation) on investments		2,958,534
Net gain (loss)		5,171,523
Net increase (decrease) in net assets resulting from operations	$	12,491,751

The accompanying notes are an integral part of the financial statements.

Statement of Changes in Net Assets

Increase (Decrease) in Net Assets	Six Months Ended June 30, 2011 (Unaudited)			Year Ended December 31, 2010
Operations: Net investment income	$	7,320,228		$	14,072,621
Net realized gain (loss)		2,212,989			3,905,594
Change in net unrealized appreciation (depreciation)		2,958,534			8,973,859
Net increase (decrease) in net assets resulting from operations		12,491,751			26,952,074
Distributions to shareholders from: Net investment income: Class A		(1,154,903	)		(1,852,170	)
Class S		(432,913	)		(1,096,574	)
Institutional Class		(5,712,721	)		(11,152,674	)
Net realized gains: Class A		—			(786,119	)
Class S		—			(340,807	)
Institutional Class		—			(3,292,701	)
Total distributions		(7,300,537	)		(18,521,045	)
Fund share transactions: Proceeds from shares sold		80,476,220			304,158,365
Reinvestment of distributions		5,988,231			15,125,753
Payments for shares redeemed		(116,984,513	)		(179,590,034	)
Net increase (decrease) in net assets from Fund share transactions		(30,520,062	)		139,694,084
Increase from regulatory settlements (see Note G)		—			895
Increase (decrease) in net assets		(25,328,848	)		148,126,008
Net assets at beginning of period		534,531,486			386,405,478
Net assets at end of period (including distributions in excess of net investment income of $28,953 and $48,644, respectively)	$	509,202,638		$	534,531,486

The accompanying notes are an integral part of the financial statements.

Financial Highlights

Class A	Six Months Ended 6/30/11 (Unaudited)			Year Ended 12/31/10			Period Ended 12/31/09a
Selected Per Share Data
Net asset value, beginning of period	$	10.60		$	10.37		$	10.26
Income (loss) from investment operations: Net investment incomeb		.14			.28			.27
Net realized and unrealized gain (loss)		.11			.32			.16
Total from investment operations		.25			.60			.43
Less distributions from: Net investment income		(.14	)		(.28	)		(.29	)
Net realized gains		—			(.09	)		(.03	)
Total distributions		(.14	)		(.37	)		(.32	)
Net asset value, end of period	$	10.71		$	10.60		$	10.37
Total Return (%)c,d		2.33	**		5.69			4.43	**
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		93			94			12
Ratio of expenses before expense reductions (%)		.71	*		.69			.79	*
Ratio of expenses after expense reductions (%)		.57	*		.52			.57	*
Ratio of net investment income (%)		2.59	*		2.60			3.03	*
Portfolio turnover rate (%)		79	**		167			132
a For the period from February 17, 2009 (commencement of operations of Class A shares) to December 31, 2009. b Based on average shares outstanding during the period. c Total return does not reflect the effect of any sales charges. d Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized

Class S	Six Months Ended 6/30/11 (Unaudited)			Year Ended 12/31/10			Period Ended 12/31/09a
Selected Per Share Data
Net asset value, beginning of period	$	10.60		$	10.38		$	10.26
Income (loss) from investment operations: Net investment incomeb		.15			.30			.30
Net realized and unrealized gain (loss)		.12			.31			.16
Total from investment operations		.27			.61			.46
Less distributions from: Net investment income		(.15	)		(.30	)		(.31	)
Net realized gains		—			(.09	)		(.03	)
Total distributions		(.15	)		(.39	)		(.34	)
Net asset value, end of period	$	10.72		$	10.60		$	10.38
Total Return (%)c		2.54	**		5.89			4.59	**
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		25			43			32
Ratio of expenses before expense reductions (%)		.64	*		.59			.66	*
Ratio of expenses after expense reductions (%)		.36	*		.34			.34	*
Ratio of net investment income (%)		2.80	*		2.78			3.38	*
Portfolio turnover rate (%)		79	**		167			132
a For the period from February 17, 2009 (commencement of operations of Class S shares) to December 31, 2009. b Based on average shares outstanding during the period. c Total return would have been lower had certain expenses not been reduced. * Annualized ** Not annualized

	Six Months Ended 6/30/11 (Unaudited)			Years Ended December 31,
Institutional Class	Six Months Ended 6/30/11 (Unaudited)			2010			2009			2008			2007			2006
Selected Per Share Data
Net asset value, beginning of period	$	10.60		$	10.38		$	10.30		$	10.29		$	10.09		$	10.18
Income (loss) from investment operations: Net investment incomea		.16			.32			.38			.54			.52			.49
Net realized and unrealized gain (loss)		.11			.31			.13			.01			.20			(.07	)
Total from investment operations		.27			.63			.51			.55			.72			.42
Less distributions from: Net investment income		(.16	)		(.32	)		(.40	)		(.54	)		(.52	)		(.50	)
Net realized gains		—			(.09	)		(.03	)		—			—			(.01	)
Total distributions		(.16	)		(.41	)		(.43	)		(.54	)		(.52	)		(.51	)
Net asset value, end of period	$	10.71		$	10.60		$	10.38		$	10.30		$	10.29		$	10.09
Total Return (%)b		2.54	**		6.08			5.05			5.49			7.34			4.19
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions)		391			398			341			171			214			138
Ratio of expenses before expense reductions (%)		.40	*		.39			.42			.43			.40			.55
Ratio of expenses after expense reductions (%)		.20	*		.16			.15			.15			.15			.16
Ratio of net investment income (%)		2.96	*		2.96			3.72			5.24			5.16			4.94
Portfolio turnover rate (%)		79	**		167			132			47			35			25	c
a Based on average shares outstanding during the period. b Total return would have been lower had certain expenses not been reduced. c On January 13, 2006, the U.S. Bond Index Portfolio was closed. This ratio includes the purchase and sale of portfolio securities of the DWS U.S. Bond Index Fund as a stand-alone fund in addition to the U.S. Bond Index Portfolio. * Annualized ** Not annualized

Notes to Financial Statements (Unaudited)

A. Organization and Significant Accounting Policies

DWS U.S. Bond Index Fund (the "Fund") is a diversified series of the DWS Institutional Funds (the "Trust"), which is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company organized as a Massachusetts business trust.

The Fund offers multiple classes of shares which provide investors with different purchase options. Class A shares are offered to investors subject to an initial sales charge. Institutional Class shares are offered to a limited group of investors, are not subject to initial or contingent deferred sales charges and have lower ongoing expenses than other classes. Class S shares are not subject to initial or contingent deferred sales charges and are generally not available to new investors except under certain circumstances.

Investment income, realized and unrealized gains and losses, and certain fund-level expenses and expense reductions, if any, are borne pro rata on the basis of relative net assets by the holders of all classes of shares, except that each class bears certain expenses unique to that class such as services to shareholders, distribution and service fees, and certain other class-specific expenses. Differences in class-level expenses may result in payment of different per share dividends by class. All shares of the Fund have equal rights with respect to voting, subject to class-specific arrangements.

The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates. Actual results could differ from those estimates. The policies described below are followed consistently by the Fund in the preparation of its financial statements.

Security Valuation. Investments are stated at value determined as of the close of regular trading on the New York Stock Exchange on each day the exchange is open for trading.

Debt securities are valued by independent pricing services approved by the Fund's Board. If the pricing services are unable to provide valuations, securities are valued at the most recent bid quotation or evaluated price, as applicable, obtained from one or more broker-dealers. Such services may use various pricing techniques which take into account appropriate factors such as yield, quality, coupon rate, maturity, type of issue, trading characteristics and other data, as well as broker quotes. These securities are generally categorized as Level 2.

Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost, which approximates value, and are categorized as Level 2. Investments in open-end investment companies are valued at their net asset value each business day and are categorized as Level 1.

Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Board and are generally categorized as Level 3. In accordance with the Fund's valuation procedures, factors used in determining value may include, but are not limited to, the type of the security; the size of the holding; the initial cost of the security; the existence of any contractual restrictions on the security's disposition; the price and extent of public trading in similar securities of the issuer or of comparable companies; quotations or evaluated prices from broker-dealers and/or pricing services; information obtained from the issuer, analysts, and/or the appropriate stock exchange (for exchange-traded securities); an analysis of the company's or issuer's financial statements; an evaluation of the forces that influence the issuer and the market(s) in which the security is purchased and sold and with respect to debt securities; the maturity, coupon, creditworthiness, currency denomination and the movement of the market in which the security is normally traded. The value determined under these procedures may differ from published values for the same securities.

Disclosure about the classification of fair value measurements is included in a table following the Fund's Investment Portfolio.

Securities Lending. The Fund lends securities to certain financial institutions. The Fund retains beneficial ownership of the securities it has loaned and continues to receive interest and dividends paid by the issuer of securities and to participate in any changes in their market value. The Fund requires the borrowers of the securities to maintain collateral with the Fund consisting of either cash or liquid, unencumbered assets having a value at least equal to the value of the securities loaned. When the collateral falls below specified amounts, the lending agent will use its best effort to obtain additional collateral on the next business day to meet required amounts under the security lending agreement. The Fund may invest the cash collateral into a joint trading account in an affiliated money market fund pursuant to Exemptive Orders issued by the SEC. The Fund receives compensation for lending its securities either in the form of fees or by earning interest on invested cash collateral net of borrower rebates and fees paid to a lending agent. Either the Fund or the borrower may terminate the loan. There may be risks of delay and costs in recovery of securities or even loss of rights in the collateral should the borrower of the securities fail financially. The Fund is also subject to all investment risks associated with the reinvestment of any cash collateral received, including, but not limited to, interest rate, credit and liquidity risk associated with such investments.

Mortgage Dollar Rolls. The Fund may enter into mortgage dollar rolls in which the Fund sells to a bank or broker/dealer (the "counterparty") mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase similar, but not identical, securities on a fixed date. The counterparty receives all principal and interest payments, including prepayments, made on the security while it is the holder. The Fund receives compensation as consideration for entering into the commitment to repurchase. The compensation is paid in the form of a lower price for the security upon its repurchase, or alternatively, a fee. Mortgage dollar rolls may be renewed with a new sale and repurchase price and a cash settlement made at each renewal without physical delivery of the securities subject to the contract.

Certain risks may arise upon entering into mortgage dollar rolls from the potential inability of counterparties to meet the terms of their commitments. Additionally, the value of such securities may change adversely before the Fund is able to repurchase them. There can be no assurance that the Fund's use of the cash that it receives from a mortgage dollar roll will provide a return that exceeds its costs.

When-Issued/Delayed Delivery Securities. The Fund may purchase or sell securities with delivery or payment to occur at a later date beyond the normal settlement period. At the time the Fund enters into a commitment to purchase or sell a security, the transaction is recorded and the value of the transaction is reflected in the net asset value. The price of such security and the date when the security will be delivered and paid for are fixed at the time the transaction is negotiated. The value of the security may vary with market fluctuations. At the time the Fund enters into a purchase transaction it is required to segregate cash or other liquid assets at least equal to the amount of the commitment.

Certain risks may arise upon entering into when-issued or delayed delivery transactions from the potential inability of counterparties to meet the terms of their contracts or if the issuer does not issue the securities due to political, economic, or other factors. Additionally, losses may arise due to changes in the value of the underlying securities.

Federal Income Taxes. The Fund's policy is to comply with the requirements of the Internal Revenue Code, as amended, which are applicable to regulated investment companies, and to distribute all of its taxable income to its shareholders.

On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the "Act") was enacted. Under the Act, net capital losses may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. Previously, net capital losses were carried forward for eight years and treated as short-term losses. As a transition rule, the Act requires that post-enactment net capital losses be used before pre-enactment net capital losses. This change is effective for fiscal years beginning after the date of enactment.

The Fund has reviewed the tax positions for the open tax years as of December 31, 2010 and has determined that no provision for income tax is required in the Fund's financial statements. The Fund's federal tax returns for the prior three fiscal years remains open subject to examination by the Internal Revenue Service.

Distribution of Income and Gains. Net investment income of the Fund is declared as a daily dividend and distributed to shareholders monthly. Net realized gains from investment transactions, in excess of available capital loss carryforwards, would be taxable to the Fund if not distributed, and, therefore, will be distributed to shareholders at least annually.

The timing and characterization of certain income and capital gains distributions are determined annually in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences primarily relate to certain securities sold at a loss. As a result, net investment income (loss) and net realized gain (loss) on investment transactions for a reporting period may differ significantly from distributions during such period. Accordingly, the Fund may periodically make reclassifications among certain of its capital accounts without impacting the net asset value of the Fund.

The tax character of current year distributions will be determined at the end of the current fiscal year.

Contingencies. In the normal course of business, the Fund may enter into contracts with service providers that contain general indemnification clauses. The Fund's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet been made. However, based on experience, the Fund expects the risk of loss to be remote.

Other. Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is recorded on the accrual basis. Realized gains and losses from investment transactions are recorded on an identified cost basis and may include proceeds from litigation. All premiums and discounts are amortized/accreted for both tax and financial reporting purposes.

B. Purchases and Sales of Securities

During the six months ended June 30, 2011, purchases and sales of investment securities (excluding short-term investments and US Treasury obligations) aggregated $383,666,077 and $398,446,854, respectively. Purchases and sales of US Treasury obligations aggregated $13,834,491 and $28,417,138, respectively.

C. Related Parties

Management Agreement. Under the Investment Management Agreement with Deutsche Investment Management Americas Inc. ("DIMA" or the "Advisor"), an indirect, wholly owned subsidiary of Deutsche Bank AG, the Advisor directs the investments of the Fund in accordance with its investment objectives, policies and restrictions. The Advisor determines the securities, instruments and other contracts relating to investments to be purchased, sold or entered into by the Fund or delegates such responsibility to the Fund's subadvisor. Northern Trust Investments, Inc. ("NTI") serves as sub-advisor with respect to the investment and reinvestment of assets in the Fund, and is paid by the Advisor for its services. NTI is responsible for the day to day management of the Fund. The management fee payable under the Investment Management Agreement is equal to an annual rate of 0.15% of the Fund's average daily net assets, computed and accrued daily and payable monthly.

For the period from January 1, 2011 through April 30, 2011, the Advisor had contractually agreed to waive its fees and/or reimburse certain operating expenses of the Fund to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) of certain classes as follows:

Class A	.59%
Class S	.34%

For the period from May 1, 2011 through September 30, 2011, the Advisor has contractually agreed to waive its fees and/or reimburse certain operating expenses of the Fund to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) of certain classes as follows:

Class A	.68%
Class S	.43%

In addition, the Advisor has voluntarily agreed to waive its fees and/or reimburse certain operating expenses of Institutional Class shares to the extent necessary to maintain the operating expenses (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) at 0.20% for the period from January 1, 2011 through June 30, 2011. This voluntary waiver or reimbursement may be terminated at any time at the option of the Advisor.

For the six months ended June 30, 2011, the Advisor waived a portion of its management fee pursuant to the Investment Management Agreement aggregating $366,640, and the amount charged aggregated $13,573, which was equivalent to an annualized effective rate of 0.01% of the Fund's average daily net assets.

Administration Fee. Pursuant to an Administrative Services Agreement, DIMA provides most administrative services to the Fund. For all services provided under the Administrative Services Agreement, the Fund pays the Advisor an annual fee ("Administration Fee") of 0.10% of the Fund's average daily net assets, computed and accrued daily and payable monthly. For the six months ended June 30, 2011, the Administration Fee was $253,475, of which $42,077 is unpaid.

Service Provider Fees. DWS Investments Service Company ("DISC"), an affiliate of the Advisor, is the transfer agent, dividend-paying agent and shareholder service agent of the Fund. Pursuant to a sub-transfer agency agreement between DISC and DST Systems, Inc. ("DST"), DISC has delegated certain transfer agent, dividend-paying agent and shareholder service agent functions to DST. DISC compensates DST out of the shareholders servicing fee it receives from the Fund. For the six months ended June 30, 2011, the amounts charged to the Fund by DISC were as follows:

Services to Shareholders	Total Aggregated		Waived		Unpaid at June 30, 2011
Class A	$	22,139	$	—	$	14,520
Class S		11,692		11,692		—
Institutional Class		44,878		44,878		—
	$	78,709	$	56,570	$	14,520

In addition, the Advisor reimbursed the Fund $8,624 and $54,062 of sub-recordkeeping expenses for Class S and Institutional Class shares, respectively.

Distribution Service Fee. DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, provides information and administrative services for a fee ("Service Fee") to Class A shareholders at an annual rate of up to 0.25% of average daily net assets. DIDI in turn has various agreements with financial services firms that provide these services and pays these fees based upon the assets of shareholder accounts the firms service. For the six months ended June 30, 2011, the Service Fee was as follows:

Service Fee		Total Aggregated				Unpaid at June 30, 2011				Annualized Effective Rate
Class A		$	111,056			$	30,022				.25	%

Underwriting Agreement. DIDI is the principal underwriter for the Fund. There were no underwriting commissions paid in connection with the distribution of Class A shares for the six months ended June 30, 2011. A deferred sales charge of up to 0.85% is assessed on certain redemptions of Class A shares.

Typesetting and Filing Service Fees. Under an agreement with DIMA, DIMA is compensated for providing typesetting and certain regulatory filing services to the Fund. For the six months ended June 30, 2011, the amount charged to the Fund by the Advisor included in the Statement of Operations under "reports to shareholders" aggregated $10,498, of which $7,273 is unpaid.

Trustees' Fees and Expenses. The Fund paid each Trustee not affiliated with the Advisor retainer fees plus specified amounts for various committee services and for the Board Chairperson.

Affiliated Cash Management Vehicle. The Fund may invest uninvested cash balances in Central Cash Management Fund, which is managed by the Advisor. The Fund indirectly bears its proportionate share of the expenses of Central Cash Management Fund. Central Cash Management Fund does not pay the Advisor an investment management fee. Central Cash Management Fund seeks a high level of current income consistent with liquidity and the preservation of capital.

D. Line of Credit

The Fund and other affiliated funds (the "Participants") share in a $450 million revolving credit facility provided by a syndication of banks. The Fund may borrow for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. The Participants are charged an annual commitment fee which is allocated based on net assets, among each of the Participants. Interest is calculated at a rate per annum equal to the sum of the Federal Funds Rate plus 1.25 percent plus if LIBOR exceeds the Federal Funds Rate the amount of such excess. The Fund may borrow up to a maximum of 33 percent of its net assets under the agreement. The Fund had no outstanding loans at June 30, 2011.

E. Share Transactions

The following table summarizes share and dollar activity in the Fund:

	Six Months Ended June 30, 2011						Year Ended December 31, 2010
	Shares			Dollars			Shares			Dollars
Shares sold
Class A		1,025,425		$	10,937,225			9,535,160		$	100,897,212
Class S		447,845			4,755,508			1,967,864			20,804,258
Institutional Class		6,098,440			64,783,487			17,183,295			182,456,895
				$	80,476,220					$	304,158,365
Shares issued to shareholders in reinvestment of distributions
Class A		105,780		$	1,126,300			246,707		$	2,631,172
Class S		31,392			334,365			75,297			801,936
Institutional Class		425,056			4,527,566			1,097,860			11,692,645
				$	5,988,231					$	15,125,753
Shares redeemed
Class A		(1,344,236	)	$	(14,257,361	)		(2,042,973	)	$	(21,840,512	)
Class S		(2,146,796	)		(22,711,425	)		(1,197,380	)		(12,745,971	)
Institutional Class		(7,544,869	)		(80,015,727	)		(13,669,977	)		(145,003,551	)
				$	(116,984,513	)				$	(179,590,034	)
Net increase (decrease)
Class A		(213,031	)	$	(2,193,836	)		7,738,894		$	81,687,872
Class S		(1,667,559	)		(17,621,552	)		845,781			8,860,223
Institutional Class		(1,021,373	)		(10,704,674	)		4,611,178			49,145,989
				$	(30,520,062	)				$	139,694,084

F. Concentration of Ownership

From time to time the Fund may have a concentration of several shareholder accounts holding a significant percentage of shares outstanding. Investment activities of these shareholders could have a material impact on the Fund.

At June 30, 2011, there was one non-affiliated shareholder account which held approximately 14% and one affiliated shareholder account which held approximately 11% of the outstanding shares of the Fund.

G. Regulatory Settlements

On December 21, 2006, the Advisor settled proceedings with the SEC and the New York Attorney General regarding alleged improper trading of fund shares. In accordance with the distribution plan, developed by a distribution consultant, settlement proceeds were distributed to affected shareholders of the Fund, and unclaimed proceeds were then paid to the Fund in the amount of $895. This payment is included in "Increase from regulatory settlements" in the Statement of Changes in Net Assets. The amount of the payment was less than 0.01% of the Fund's average net assets, thus having no impact on total return.

Summary of Management Fee Evaluation by Independent Fee Consultant

October 3, 2010

Pursuant to an Order entered into by Deutsche Investment Management Americas and affiliates (collectively, "DeAM") with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds (formerly the DWS Scudder Funds). My duties include preparing an annual written evaluation of the management fees DeAM charges the Funds, considering among other factors the management fees charged by other mutual fund companies for like services, management fees DeAM charges other clients for like services, DeAM's costs of supplying services under the management agreements and related profit margins, possible economies of scale if a Fund grows larger, and the nature and quality of DeAM's services, including fund performance. This report summarizes my evaluation for 2010, including my qualifications, the evaluation process for each of the DWS Funds, consideration of certain complex-level factors, and my conclusions. I served in substantially the same capacity in 2007, 2008, and 2009.

Qualifications

For more than 35 years I have served in various professional capacities within the investment management business. I have held investment analysis and advisory positions, including securities analyst, portfolio strategist and director of investment policy with a large investment firm. I have also performed business management functions, including business development, financial management and marketing research and analysis.

Since 1991, I have been an independent consultant within the asset management industry. I have provided services to over 125 client organizations, including investment managers, mutual fund boards, product distributors and related organizations. Over the past ten years I have completed a number of assignments for mutual fund boards, specifically including assisting boards with management contract renewal.

I hold a Master of Business Administration degree, with highest honors, from Harvard University and Master of Science and Bachelor of Science (highest honors) degrees from the University of California at Berkeley. I am an independent director and audit committee financial expert for two closed-end mutual funds and have served in various leadership and financial oversight capacities with non-profit organizations.

Evaluation of Fees for each DWS Fund

My work focused primarily on evaluating, fund-by-fund, the fees charged to each of the 118 publicly offered Fund portfolios in the DWS Fund family. For each Fund, I considered each of the key factors mentioned above, as well as any other relevant information. In doing so I worked closely with the Funds' Independent Directors in their annual contract renewal process, as well as in their approval of contracts for several new funds (documented separately).

In evaluating each Fund's fees, I reviewed comprehensive materials provided by or on behalf of DeAM, including expense information prepared by Lipper Analytical, comparative performance information, profitability data, manager histories, and other materials. I also accessed certain additional information from the Lipper and Morningstar databases and drew on my industry knowledge and experience.

To facilitate evaluating this considerable body of information, I prepared for each Fund a document summarizing the key data elements in each area as well as additional analytics discussed below. This made it possible to consider each key data element in the context of the others.

In the course of contract renewal, DeAM agreed to implement a number of fee and expense adjustments requested by the Independent Directors which will favorably impact future fees and expenses, and my evaluation includes the effects of these changes.

Fees and Expenses Compared with Other Funds

The competitive fee and expense evaluation for each fund focused on two primary comparisons:

The Fund's contractual management fee (the advisory fee plus the administration fee where applicable) compared with those of a group of typically 12-15 funds in the same Lipper investment category (e.g. Large Capitalization Growth) having similar distribution arrangements and being of similar size.

The Fund's total expenses compared with a broader universe of funds from the same Lipper investment category and having similar distribution arrangements.

These two comparisons provide a view of not only the level of the fee compared with funds of similar scale but also the total expense the Fund bears for all the services it receives, in comparison with the investment choices available in the Fund's investment category and distribution channel. The principal figure-of-merit used in these comparisons was the subject Fund's percentile ranking against peers.

DeAM's Fees for Similar Services to Others

DeAM provided management fee schedules for all of its US domiciled fund and non-fund investment management accounts in any of the investment categories where there is a DWS Fund. These similar products included the other DWS Funds, non-fund pooled accounts, institutional accounts and sub-advisory accounts. Using this information, I calculated for each Fund the fee that would be charged to each similar product, at the subject Fund's asset level.

Evaluating information regarding non-fund products is difficult because there are varying levels of services required for different types of accounts, with mutual funds generally requiring considerably more regulatory and administrative types of service as well as having more frequent cash flows than other types of accounts. Also, while mutual fund fees for similar fund products can be expected to be similar, there will be some differences due to different pricing conditions in different distribution channels (e.g. retail funds versus those used in variable insurance products), differences in underlying investment processes and other factors.

Costs and Profit Margins

DeAM provided a detailed profitability analysis for each Fund. After making some adjustments so that the presentation would be more comparable to the available industry figures, I reviewed profit margins from investment management alone, from investment management plus other fund services (excluding distribution) provided to the Funds by DeAM (principally shareholder services), and DeAM profits from all sources, including distribution. A later section comments on overall profitability.

Economies of Scale

Economies of scale — an expected decline in management cost per dollar of fund assets as fund assets grow — are very rarely quantified and documented because of inherent difficulties in collecting and analyzing relevant data. However, in virtually every investment category that I reviewed, larger funds tend to have lower fees and lower total expenses than smaller funds. To see how each DWS Fund compares with this industry observation, I reviewed:

The trend in Fund assets over the last five years and the accompanying trend in total expenses. This shows if the Fund has grown and, if so, whether total expense (management fees as well as other expenses) have declined as a percent of assets.

Whether the Fund has break-points in its management fee schedule, the extent of the fee reduction built into the schedule and the asset levels where the breaks take effect, and in the case of a sub-advised Fund how the Fund's break-points compare with those of the sub-advisory fee schedule.

How the Fund's contractual fee schedule compares with trends in the industry data. To accomplish this, I constructed a chart showing how actual latest-fiscal-year contractual fees of the Fund and of other similar funds relate to average fund assets, with the subject Fund's contractual fee schedule superimposed.

Quality of Service — Performance

The quality-of-service evaluation focused on investment performance, which is the principal result of the investment management service. Each Fund's performance was reviewed over the past 1, 3, 5 and 10 years, as applicable, and compared with that of other funds in the same investment category and with a suitable market index.

In addition, I calculated and reviewed risk-adjusted returns relative to an index of similar mutual funds' returns and a suitable market index. The risk-adjusted returns analysis provides a way of determining the extent to which the Fund's return comparisons are mainly the product of investment value-added (or lack thereof) or alternatively taking considerably more or less risk than is typical in its investment category.

I also received and considered the history of portfolio manager changes for each Fund, as this provided an important context for evaluating the performance results.

Complex-Level Considerations

While this evaluation was conducted mainly at the individual fund level, there are some issues relating to the reasonableness of fees that can alternatively be considered across the whole fund complex:

I reviewed DeAM's profitability analysis for all DWS Funds, with a view toward determining if the allocation procedures used were reasonable and how profit levels compared with public data for other investment managers.

I considered whether DeAM and affiliates receive any significant ancillary or "fall-out" benefits that should be considered in interpreting the direct profitability results. These would be situations where serving as the investment manager of the Funds is beneficial to another part of the Deutsche Bank organization.

I considered how aggregated DWS Fund expenses had varied over the years, by asset class and in the context of trends in asset levels.

I reviewed the structure of the DeAM organization, trends in staffing levels, and information on compensation of investment management and other professionals compared with industry data.

Findings

Based on the process and analysis discussed above, which included reviewing a wide range of information from management and external data sources and considering among other factors the fees DeAM charges other clients, the fees charged by other fund managers, DeAM's costs and profits associated with managing the Funds, economies of scale, possible fall-out benefits, and the nature and quality of services provided, in my opinion the management fees charged the DWS Funds are reasonable.

Thomas H. Mack

Account Management Resources


For More Information		The automated telephone system allows you to access personalized account information and obtain information on other DWS funds using either your voice or your telephone keypad. Certain account types within Classes A and S also have the ability to purchase, exchange or redeem shares using this system. For more information, contact your financial advisor. You may also access our automated telephone system or speak with a DWS Investments representative by calling the appropriate number below: For shareholders of Classes A and Institutional Class: (800) 621-1048 For shareholders of Class S: (800) 728-3337
Web Site		www.dws-investments.com View your account transactions and balances, trade shares, monitor your asset allocation, and change your address, 24 hours a day. Obtain prospectuses and applications, blank forms, interactive worksheets, news about DWS funds, subscription to fund updates by e-mail, retirement planning information, and more.
Written Correspondence		DWS Investments PO Box 219151 Kansas City, MO 64121-9151
Proxy Voting		The fund's policies and procedures for voting proxies for portfolio securities and information about how the fund voted proxies related to its portfolio securities during the 12-month period ended June 30 are available on our Web site — www.dws-investments.com (click on "proxy voting"at the bottom of the page) — or on the SEC's Web site — www.sec.gov. To obtain a written copy of the fund's policies and procedures without charge, upon request, call us toll free at (800) 621-1048.
Principal Underwriter		If you have questions, comments or complaints, contact: DWS Investments Distributors, Inc. 222 South Riverside Plaza Chicago, IL 60606-5808 (800) 621-1148

	Class A	Class S	Institutional Class
Nasdaq Symbol	BONDX	BONSX	BTUSX
CUSIP Number	23339C 735	23339C 743	23339C 750
Fund Number	648	2048	548

Privacy Statement

FACTS	What Does DWS Investments Do With Your Personal Information?
Why?	Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share and protect your personal information. Please read this notice carefully to understand what we do.
What?	The types of personal information we collect and share can include: • Social Security number • Account balances • Purchase and transaction history • Bank account information • Contact information such as mailing address, e-mail address and telephone number
How?	All financial companies need to share customers' personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers' personal information, the reasons DWS Investments chooses to share and whether you can limit this sharing.

Reasons we can share your personal information	Does DWS Investments share?	Can you limit this sharing?
For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders or legal investigations	Yes	No
For our marketing purposes — to offer our products and services to you	Yes	No
For joint marketing with other financial companies	No	We do not share
For our affiliates' everyday business purposes — information about your transactions and experiences	No	We do not share
For our affiliates' everyday business purposes — information about your creditworthiness	No	We do not share
For non-affiliates to market to you	No	We do not share

Questions?

Call (800) 621-1048 or e-mail us at dws-investments.info@dws.com

Who we are
Who is providing this notice?	DWS Investments Distributors, Inc.; Deutsche Investment Management Americas, Inc.; DeAM Investor Services, Inc.; DWS Trust Company; the DWS Funds
What we do
How does DWS Investments protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings.
How does DWS Investments collect my personal information?	We collect your personal information, for example. When you: • open an account • give us your contact information • provide bank account information for ACH or wire transactions • tell us where to send money • seek advice about your investments
Why can't I limit all sharing?	Federal law gives you the right to limit only • sharing for affiliates' everyday business purposes — information about your creditworthiness • affiliates from using your information to market to you • sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing.
Definitions
Affiliates	Companies related by common ownership or control. They can be financial or non-financial companies. Our affiliates include financial companies with the DWS or Deutsche Bank ("DB") name, such as DB AG Frankfurt and DB Alex Brown.
Non-affiliates	Companies not related by common ownership or control. They can be financial and non-financial companies. Non-affiliates we share with include account service providers, service quality monitoring services, mailing service providers and verification services to help in the fight against money laundering and fraud.
Joint marketing	A formal agreement between non-affiliated financial companies that together market financial products or services to you. DWS Investments does not jointly market.

Rev. 09/2010

Notes

Date of fiscal year end:	12/31

Date of reporting period:	6/30/2011


ITEM 2.	CODE OF ETHICS

	Not applicable.

ITEM 3.	AUDIT COMMITTEE FINANCIAL EXPERT

	Not applicable

ITEM 4.	PRINCIPAL ACCOUNTANT FEES AND SERVICES

	Not applicable

ITEM 5.	AUDIT COMMITTEE OF LISTED REGISTRANTS

	Not applicable

ITEM 6.	SCHEDULE OF INVESTMENTS

	Not applicable

ITEM 7.	DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

	Not applicable

ITEM 8.	PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

	Not applicable

ITEM 9.	PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS

	Not applicable

ITEM 10.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

	There were no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board. The primary function of the Nominating and Governance Committee is to identify and recommend individuals for membership on the Board and oversee the administration of the Board Governance Guidelines. Shareholders may recommend candidates for Board positions by forwarding their correspondence by U.S. mail or courier service to Paul K. Freeman, Independent Chairman, DWS Funds, P.O. Box 101833, Denver, CO 80250-1833.

ITEM 11.	CONTROLS AND PROCEDURES

	(a)	The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

	(b)	There have been no changes in the registrant’s internal control over financial reporting that occurred during the 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 controls over financial reporting.

ITEM 12.	EXHIBITS

	(a)(1)	Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

	(b)	Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.

Registrant:	DWS U.S. Bond Index Fund, a series of DWS Institutional Funds


By:	/s/W. Douglas Beck W. Douglas Beck President

Date:	August 29, 2011

By:	/s/W. Douglas Beck W. Douglas Beck President

Date:	August 29, 2011



By:	/s/Paul Schubert Paul Schubert Chief Financial Officer and Treasurer

Date:	August 29, 2011

ITEM 1.	REPORT TO STOCKHOLDERS