N-Q 1 nq073110bf.htm DWS BALANCED FUND nq073110bf.htm
 

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
_______________________________
 
Investment Company Act file number  811-01236
 
DWS Balanced Fund
(Exact name of registrant as specified in charter)

345 Park Avenue
New York, NY  10154
(Address of principal executive offices)             (Zip code)
 

Paul Schubert
345 Park Avenue
New York, NY  10154-0004
(Name and address of agent for service)
 
Registrant's telephone number, including area code:  (212) 454-7190
 
Date of fiscal year end:  10/31
 
Date of reporting period: 7/31/10

ITEM 1.
SCHEDULE OF INVESTMENTS


Investment Portfolio
as of July 31, 2010  (Unaudited)


DWS Balanced Fund

 
Shares
  
Value ($)
  
 
 
Common Stocks 53.9%
  
Consumer Discretionary 5.9%
  
Auto Components 0.2%
  
BorgWarner, Inc.* (a)
  
38,200
  
1,675,452
  
Minth Group Ltd.
  
358,000
  
537,403
  
Nippon Seiki Co., Ltd.
  
22,000
  
241,912
  
S&T Dynamics Co., Ltd.
  
20,930
  
339,671
  
 
 
2,794,438
  
Automobiles 0.4%
  
Bayerische Motoren Werke (BMW) AG
  
36,383
  
1,958,612
  
Fiat SpA
  
123,385
  
1,580,558
  
PSA Peugeot Citroen*
  
15,115
  
448,503
  
 
 
3,987,673
  
Distributors 0.4%
  
Genuine Parts Co.
  
106,312
  
4,553,343
  
Diversified Consumer Services 0.4%
  
H&R Block, Inc.
  
262,924
  
4,122,648
  
Hotels Restaurants & Leisure 1.1%
  
Carnival Corp. (Units)
  
91,217
  
3,163,406
  
Darden Restaurants, Inc.
  
57,200
  
2,396,108
  
Domino's Pizza UK & IRL PLC
  
42,740
  
274,432
  
Marriott International, Inc. "A" (a)
  
104,618
  
3,547,596
  
McDonald's Corp.
  
26,100
  
1,819,953
  
Paddy Power PLC
  
14,837
  
539,056
  
PartyGaming PLC*
  
70,844
  
333,494
  
REXLot Holdings Ltd.
  
5,125,000
  
442,066
  
 
 
12,516,111
  
Household Durables 0.1%
  
Advanced Digital Broadcast Holdings SA (Registered)
  
3,972
  
110,958
  
Jarden Corp.
  
7,900
  
228,705
  
Panasonic Corp.
  
74,106
  
979,560
  
 
 
1,319,223
  
Leisure Equipment & Products 0.0%
  
Universal Entertainment Corp.*
  
26,000
  
458,337
  
Media 0.7%
  
Aegis Group PLC
  
108,862
  
200,202
  
Dex One Corp.*
  
819
  
14,840
  
JC Decaux SA*
  
16,039
  
411,963
  
Pearson PLC
  
57,755
  
896,747
  
Scripps Networks Interactive "A"
  
97,500
  
4,156,425
  
SuperMedia, Inc.*
  
154
  
3,245
  
Vertis Holdings, Inc.*
  
5,114
  
0
  
WPP PLC
  
199,741
  
2,123,444
  
 
 
7,806,866
  
Multiline Retail 0.5%
  
Dollar General Corp.* (a)
  
50,300
  
1,467,754
  
Kohl's Corp.*
  
48,090
  
2,293,412
  
Nordstrom, Inc. (a)
  
66,900
  
2,274,600
  
 
 
6,035,766
  
Specialty Retail 1.2%
  
Advance Auto Parts, Inc. (a)
  
7,100
  
380,063
  
Aeropostale, Inc.* (a)
  
17,900
  
508,897
  
Guess?, Inc.
  
7,600
  
271,320
  
Hennes & Mauritz AB "B"
  
38,993
  
1,228,177
  
L'Occitane International SA*
  
102,000
  
223,238
  
Limited Brands, Inc.
  
180,100
  
4,617,764
  
Nitori Co., Ltd.
  
11,772
  
1,015,121
  
TJX Companies, Inc.
  
58,300
  
2,420,616
  
Urban Outfitters, Inc.* (a)
  
13,600
  
437,376
  
Yamada Denki Co., Ltd.
  
30,548
  
2,064,938
  
 
 
13,167,510
  
Textiles, Apparel & Luxury Goods 0.9%
  
Burberry Group PLC
  
19,087
  
252,032
  
Carter's, Inc.* (a)
  
14,700
  
356,328
  
Compagnie Financiere Richemont SA "A"
  
29,583
  
1,154,410
  
Deckers Outdoor Corp.*
  
11,200
  
569,968
  
NIKE, Inc. "B"
  
78,900
  
5,810,196
  
VF Corp.
  
33,495
  
2,657,159
  
 
 
10,800,093
  
Consumer Staples 5.1%
  
Beverages 0.8%
  
C&C Group PLC
  
129,529
  
549,262
  
Carlsberg AS "B"
  
15,133
  
1,341,792
  
Central European Distribution Corp.* (a)
  
10,600
  
276,342
  
Diageo PLC
  
87,051
  
1,512,118
  
PepsiCo, Inc.
  
87,639
  
5,688,647
  
 
 
9,368,161
  
Food & Staples Retailing 1.5%
  
Carrefour SA
  
28,828
  
1,327,062
  
CVS Caremark Corp.
  
124,718
  
3,827,596
  
Koninklijke Ahold NV
  
94,298
  
1,210,412
  
Kroger Co.
  
149,726
  
3,171,197
  
Seven & I Holdings Co., Ltd.
  
59,201
  
1,417,754
  
Sysco Corp.
  
98,800
  
3,059,836
  
Wal-Mart Stores, Inc.
  
49,800
  
2,549,262
  
 
 
16,563,119
  
Food Products 1.1%
  
Darling International, Inc.*
  
29,500
  
240,720
  
Diamond Foods, Inc. (a)
  
11,800
  
525,572
  
General Mills, Inc.
  
62,571
  
2,139,928
  
Green Mountain Coffee Roasters, Inc.* (a)
  
11,750
  
361,782
  
Kellogg Co.
  
53,037
  
2,654,502
  
Mead Johnson Nutrition Co.
  
38,333
  
2,037,016
  
Nestle SA (Registered)
  
59,618
  
2,947,420
  
SunOpta, Inc.*
  
90,100
  
453,203
  
Unilever PLC
  
31,518
  
895,656
  
 
 
12,255,799
  
Household Products 0.4%
  
Church & Dwight Co., Inc.
  
27,600
  
1,829,052
  
Colgate-Palmolive Co.
  
32,940
  
2,601,601
  
 
 
4,430,653
  
Personal Products 0.2%
  
Alberto-Culver Co. (a)
  
92,500
  
2,707,475
  
Tobacco 1.1%
  
Altria Group, Inc.
  
245,667
  
5,443,981
  
British American Tobacco PLC
  
77,679
  
2,674,265
  
Philip Morris International, Inc.
  
90,374
  
4,612,689
  
 
 
12,730,935
  
Energy 6.8%
  
Energy Equipment & Services 2.0%
  
AMEC PLC
  
168,444
  
2,307,459
  
Cameron International Corp.*
  
6,700
  
265,253
  
Dresser-Rand Group, Inc.*
  
9,200
  
342,332
  
Ensco PLC (ADR) (a)
  
80,423
  
3,362,486
  
Halliburton Co.
  
122,555
  
3,661,943
  
John Wood Group PLC
  
46,598
  
261,547
  
Lamprell PLC
  
76,890
  
329,380
  
Noble Corp.*
  
112,994
  
3,672,305
  
ProSafe SE
  
38,600
  
179,040
  
Saipem SpA
  
33,849
  
1,217,445
  
SBM Offshore NV
  
26,902
  
424,369
  
Schlumberger Ltd. (a)
  
60,050
  
3,582,583
  
Tecnicas Reunidas SA
  
4,773
  
247,305
  
Transocean Ltd.*
  
51,594
  
2,384,159
  
 
 
22,237,606
  
Oil, Gas & Consumable Fuels 4.8%
  
Alpha Natural Resources, Inc.*
  
95,300
  
3,652,849
  
Anadarko Petroleum Corp.
  
45,200
  
2,222,032
  
Canadian Natural Resources Ltd.
  
83,165
  
2,862,539
  
Chevron Corp.
  
62,281
  
4,746,435
  
ConocoPhillips
  
63,817
  
3,523,975
  
Eni SpA
  
94,696
  
1,936,195
  
EOG Resources, Inc.
  
33,100
  
3,227,250
  
EXCO Resources, Inc.
  
12,400
  
179,924
  
ExxonMobil Corp.
  
139,094
  
8,301,130
  
Marathon Oil Corp.
  
147,340
  
4,928,523
  
Nexen, Inc.
  
124,166
  
2,570,236
  
Northern Oil & Gas, Inc.*
  
18,000
  
264,240
  
Occidental Petroleum Corp.
  
50,800
  
3,958,844
  
Royal Dutch Shell PLC "A"
  
108,001
  
2,973,346
  
Statoil ASA
  
123,620
  
2,498,669
  
Suncor Energy, Inc.
  
153,835
  
5,068,863
  
Ultra Petroleum Corp.*
  
9,900
  
419,463
  
Woodside Petroleum Ltd.
  
46,225
  
1,739,702
  
 
 
55,074,215
  
Financials 5.2%
  
Capital Markets 1.0%
  
Affiliated Managers Group, Inc.*
  
3,200
  
226,656
  
Ameriprise Financial, Inc.
  
44,163
  
1,872,069
  
Ashmore Group PLC
  
115,643
  
512,265
  
Charles Schwab Corp.
  
133,900
  
1,980,381
  
ICAP PLC
  
33,664
  
211,824
  
Jefferies Group, Inc. (a)
  
19,300
  
476,517
  
Lazard Ltd. "A"
  
6,400
  
189,888
  
Morgan Stanley
  
84,800
  
2,288,752
  
Partners Group Holding AG
  
3,200
  
451,569
  
T. Rowe Price Group, Inc. (a)
  
64,100
  
3,091,543
  
Waddell & Reed Financial, Inc. "A"
  
9,400
  
224,002
  
 
 
11,525,466
  
Commercial Banks 1.2%
  
Banco Santander SA
  
87,637
  
1,138,502
  
BNP Paribas
  
18,641
  
1,280,433
  
Dah Sing Banking Group Ltd.*
  
186,800
  
274,158
  
Dexia SA*
  
197
  
966
  
DnB NOR ASA
  
54,734
  
679,732
  
Intesa Sanpaolo
  
274,807
  
909,612
  
Nordea Bank AB
  
121,692
  
1,216,979
  
Prosperity Bancshares, Inc.
  
8,700
  
294,756
  
Sberbank
  
351,217
  
983,407
  
Skandinaviska Enskilda Banken AB "A"
  
181,380
  
1,248,367
  
Societe Generale
  
46,220
  
2,664,346
  
Sumitomo Mitsui Financial Group, Inc.
  
24,350
  
754,217
  
UniCredit SpA
  
447,387
  
1,253,477
  
Wing Hang Bank Ltd.
  
45,000
  
485,774
  
 
 
13,184,726
  
Consumer Finance 0.0%
  
Kiatnakin Bank PCL
  
328,700
  
310,623
  
Magma Fincorp Ltd.
  
20,879
  
168,274
  
 
 
478,897
  
Diversified Financial Services 0.9%
  
Bank of America Corp.
  
99,553
  
1,397,724
  
Financiere Marc de Lacharriere SA
  
4,663
  
179,867
  
Hellenic Exchanges SA
  
18,300
  
132,355
  
ING Groep NV (CVA)*
  
120,520
  
1,159,071
  
IntercontinentalExchange, Inc.*
  
15,300
  
1,615,986
  
JPMorgan Chase & Co.
  
132,492
  
5,336,778
  
 
 
9,821,781
  
Insurance 2.0%
  
Allianz SE (Registered)
  
21,059
  
2,445,176
  
Assurant, Inc.
  
94,107
  
3,509,250
  
AXA SA
  
96,232
  
1,773,851
  
Fidelity National Financial, Inc. "A" (a)
  
184,078
  
2,718,832
  
HCC Insurance Holdings, Inc.
  
90,852
  
2,373,054
  
Lincoln National Corp.
  
166,286
  
4,330,087
  
MetLife, Inc.
  
27,700
  
1,165,062
  
PartnerRe Ltd.
  
63,146
  
4,569,876
  
 
 
22,885,188
  
Real Estate Management & Development 0.1%
  
K Wah International Holdings Ltd.
  
698,658
  
258,146
  
Midland Holdings Ltd.
  
686,000
  
644,712
  
 
 
902,858
  
Health Care 5.5%
  
Biotechnology 1.1%
  
Amgen, Inc.*
  
54,700
  
2,982,791
  
Celgene Corp.*
  
122,700
  
6,766,905
  
Gilead Sciences, Inc.*
  
90,720
  
3,022,790
  
Metabolix, Inc.* (a)
  
15,100
  
213,212
  
 
 
12,985,698
  
Health Care Equipment & Supplies 1.5%
  
Accuray, Inc.* (a)
  
33,700
  
221,746
  
Baxter International, Inc.
  
89,231
  
3,905,641
  
Becton, Dickinson & Co.
  
40,700
  
2,800,160
  
Covidien PLC
  
59,000
  
2,201,880
  
Edwards Lifesciences Corp.* (a)
  
73,000
  
4,219,400
  
NxStage Medical, Inc.*
  
29,600
  
467,384
  
Thoratec Corp.* (a)
  
18,000
  
662,040
  
Zimmer Holdings, Inc.*
  
39,100
  
2,071,909
  
 
 
16,550,160
  
Health Care Providers & Services 1.4%
  
Diagnosticos da America
  
37,800
  
363,428
  
Express Scripts, Inc.*
  
112,400
  
5,078,232
  
Fleury SA*
  
19,300
  
223,857
  
Fresenius Medical Care AG & Co. KGaA
  
25,000
  
1,371,729
  
McKesson Corp.
  
101,058
  
6,348,464
  
Owens & Minor, Inc. (a)
  
14,900
  
405,131
  
WellPoint, Inc.*
  
47,668
  
2,417,721
  
 
 
16,208,562
  
Health Care Technology 0.1%
  
M3, Inc.
  
78
  
353,007
  
Merge Healthcare, Inc.*
  
52,659
  
170,615
  
SXC Health Solutions Corp.*
  
4,100
  
278,390
  
 
 
802,012
  
Life Sciences Tools & Services 0.3%
  
ICON PLC (ADR)*
  
16,700
  
394,120
  
Life Technologies Corp.*
  
10,300
  
442,797
  
QIAGEN NV* (a)
  
22,800
  
423,542
  
Thermo Fisher Scientific, Inc.*
  
51,119
  
2,293,198
  
 
 
3,553,657
  
Pharmaceuticals 1.1%
  
Abbott Laboratories
  
27,000
  
1,325,160
  
Flamel Technologies SA (ADR)* (a)
  
51,700
  
327,261
  
GlaxoSmithKline PLC
  
97,330
  
1,696,778
  
Merck & Co., Inc.
  
134,266
  
4,626,807
  
Questcor Pharmaceuticals, Inc.* (a)
  
29,300
  
329,625
  
Teva Pharmaceutical Industries Ltd. (ADR)
  
93,071
  
4,546,518
  
VIVUS, Inc.* (a)
  
19,900
  
112,634
  
 
 
12,964,783
  
Industrials 7.3%
  
Aerospace & Defense 2.3%
  
BE Aerospace, Inc.*
  
15,000
  
441,000
  
Honeywell International, Inc.
  
72,236
  
3,096,035
  
L-3 Communications Holdings, Inc.
  
43,365
  
3,167,380
  
Lockheed Martin Corp.
  
47,230
  
3,549,334
  
Rockwell Collins, Inc.
  
61,600
  
3,521,056
  
Rolls-Royce Group PLC*
  
129,039
  
1,174,392
  
TransDigm Group, Inc. (a)
  
41,600
  
2,253,472
  
United Technologies Corp.
  
123,256
  
8,763,502
  
 
 
25,966,171
  
Air Freight & Logistics 0.0%
  
Atlas Air Worldwide Holdings, Inc.* (a)
  
7,500
  
438,600
  
Airlines 0.0%
  
Ryanair Holdings PLC (ADR)*
  
14,200
  
425,290
  
Singapore Airlines Ltd.
  
3,000
  
34,461
  
 
 
459,751
  
Building Products 0.0%
  
Wienerberger AG*
  
12,942
  
179,448
  
Commercial Services & Supplies 0.4%
  
Babcock International Group PLC
  
60,939
  
529,748
  
Daiseki Co., Ltd. (a)
  
14,600
  
298,438
  
EnerNOC, Inc.* (a)
  
9,400
  
313,396
  
Quad Graphics, Inc.*
  
177
  
7,530
  
Schawk, Inc.
  
10,600
  
157,198
  
Serco Group PLC
  
52,322
  
454,429
  
Stericycle, Inc.* (a)
  
42,700
  
2,690,100
  
 
 
4,450,839
  
Construction & Engineering 0.2%
  
Aecom Technology Corp.*
  
15,600
  
376,584
  
Chicago Bridge & Iron Co. NV (NY Registered Shares)* (a)
  
17,000
  
382,670
  
Shui On Construction & Materials Ltd.
  
178,000
  
221,598
  
Vinci SA
  
13,415
  
649,447
  
 
 
1,630,299
  
Electrical Equipment 1.2%
  
AMETEK, Inc. (a)
  
116,600
  
5,161,882
  
Emerson Electric Co. (a)
  
73,690
  
3,650,602
  
Nidec Corp.
  
6,600
  
619,550
  
Prysmian SpA
  
15,043
  
254,451
  
Roper Industries, Inc. (a)
  
68,800
  
4,300,000
  
 
 
13,986,485
  
Industrial Conglomerates 0.3%
  
Siemens AG (Registered)
  
29,962
  
2,920,176
  
Machinery 1.6%
  
Alfa Laval AB
  
43,838
  
679,461
  
Austal Ltd.
  
146,293
  
304,408
  
Dover Corp.
  
79,100
  
3,794,427
  
EVA Precision Industrial Holdings Ltd.
  
808,000
  
417,133
  
FANUC Ltd.
  
19,603
  
2,316,646
  
Joy Global, Inc.
  
7,400
  
439,338
  
Komatsu Ltd.
  
109,070
  
2,292,622
  
MAN SE
  
20,508
  
1,903,623
  
Navistar International Corp.* (a)
  
44,400
  
2,295,924
  
Parker Hannifin Corp.
  
47,100
  
2,925,852
  
Rational AG
  
2,200
  
360,660
  
Rotork PLC
  
15,339
  
363,445
  
 
 
18,093,539
  
Marine 0.3%
  
A P Moller-Maersk AS "B"
  
276
  
2,327,493
  
Mitsui O.S.K Lines Ltd.
  
98,795
  
668,963
  
 
 
2,996,456
  
Professional Services 0.2%
  
Brunel International NV
  
7,862
  
248,860
  
FTI Consulting, Inc.* (a)
  
12,800
  
452,480
  
Michael Page International PLC
  
65,109
  
396,097
  
SGS SA (Registered)
  
1,150
  
1,615,100
  
 
 
2,712,537
  
Road & Rail 0.5%
  
Norfolk Southern Corp.
  
86,600
  
4,872,982
  
Northgate PLC*
  
59,055
  
170,506
  
 
 
5,043,488
  
Trading Companies & Distributors 0.2%
  
MISUMI Group, Inc.
  
23,700
  
455,922
  
Mitsubishi Corp.
  
77,471
  
1,675,945
  
PT AKR Corporindo Tbk
  
2,106,000
  
280,063
  
 
 
2,411,930
  
Transportation Infrastructure 0.1%
  
Atlantia SpA
  
32,052
  
627,782
  
Koninklijke Vopak NV
  
12,256
  
498,068
  
 
 
1,125,850
  
Information Technology 9.2%
  
Communications Equipment 1.6%
  
Brocade Communications Systems, Inc.*
  
307,441
  
1,521,833
  
Cisco Systems, Inc.*
  
413,030
  
9,528,602
  
Harris Corp.
  
7,700
  
342,881
  
QUALCOMM, Inc.
  
161,270
  
6,141,162
  
Sycamore Networks, Inc.
  
10,500
  
244,440
  
Telefonaktiebolaget LM Ericsson "B"
  
30,676
  
338,642
  
 
 
18,117,560
  
Computers & Peripherals 2.2%
  
Apple, Inc.*
  
49,080
  
12,625,830
  
EMC Corp.*
  
245,990
  
4,868,142
  
Hewlett-Packard Co.
  
170,270
  
7,839,231
  
 
 
25,333,203
  
Electronic Equipment, Instruments & Components 0.1%
  
Itron, Inc.*
  
9,300
  
605,151
  
Kingboard Chemical Holdings Ltd.
  
91,500
  
422,307
  
Venture Corp., Ltd.
  
76,000
  
511,399
  
 
 
1,538,857
  
Internet Software & Services 0.7%
  
Akamai Technologies, Inc.*
  
26,100
  
1,001,196
  
Google, Inc. "A"*
  
10,290
  
4,989,106
  
Internet Initiative Japan, Inc.
  
122
  
337,355
  
Kakaku.com, Inc.
  
67
  
312,142
  
Meetic
  
7,225
  
205,253
  
NIC, Inc. (a)
  
34,800
  
258,216
  
United Internet AG (Registered)
  
26,500
  
328,068
  
 
 
7,431,336
  
IT Services 1.1%
  
Accenture PLC "A"
  
44,240
  
1,753,673
  
Atos Origin SA*
  
17,080
  
733,395
  
Automatic Data Processing, Inc.
  
62,414
  
2,575,826
  
Cap Gemini
  
49,084
  
2,335,960
  
hiSoft Technology International Ltd. (ADR)*
  
20,900
  
250,800
  
iGATE Corp.
  
21,500
  
381,625
  
International Business Machines Corp.
  
23,240
  
2,984,016
  
Telvent GIT SA* (a)
  
13,000
  
279,890
  
Visa, Inc. "A"
  
14,600
  
1,070,910
  
 
 
12,366,095
  
Office Electronics 0.2%
  
Canon, Inc.
  
52,097
  
2,270,331
  
Semiconductors & Semiconductor Equipment 1.3%
  
ARM Holdings PLC
  
106,267
  
547,270
  
Broadcom Corp. "A"
  
184,480
  
6,646,814
  
FSI International, Inc.*
  
53,600
  
189,744
  
Intel Corp.
  
345,933
  
7,126,220
  
Lam Research Corp.*
  
6,600
  
278,454
  
 
 
14,788,502
  
Software 2.0%
  
Check Point Software Technologies Ltd.* (a)
  
57,400
  
1,952,748
  
Concur Technologies, Inc.* (a)
  
58,100
  
2,688,868
  
Microsoft Corp.
  
251,400
  
6,488,634
  
Nintendo Co., Ltd.
  
8,155
  
2,280,512
  
Norkom Group PLC*
  
98,462
  
148,840
  
Oracle Corp.
  
261,400
  
6,179,496
  
QLIK Technologies, Inc.*
  
9,100
  
130,767
  
Rovi Corp.*
  
7,600
  
338,200
  
SAP AG
  
24,134
  
1,102,016
  
Solera Holdings, Inc.
  
34,100
  
1,295,118
  
TiVo, Inc.* (a)
  
22,400
  
192,192
  
VanceInfo Technologies, Inc. (ADR)* (a)
  
19,200
  
487,488
  
 
 
23,284,879
  
Materials 4.0%
  
Chemicals 1.8%
  
Air Liquide SA
  
20,973
  
2,360,577
  
Air Products & Chemicals, Inc.
  
54,923
  
3,986,311
  
Akzo Nobel NV
  
22,511
  
1,326,099
  
BASF SE
  
29,707
  
1,734,716
  
Linde AG
  
20,195
  
2,367,225
  
Praxair, Inc.
  
46,185
  
4,009,782
  
Shin-Etsu Chemical Co., Ltd.
  
35,581
  
1,772,975
  
The Mosaic Co.
  
61,000
  
2,906,650
  
 
 
20,464,335
  
Construction Materials 0.1%
  
Holcim Ltd. (Registered)
  
5,285
  
353,111
  
Martin Marietta Materials, Inc. (a)
  
2,900
  
247,660
  
 
 
600,771
  
Containers & Packaging 0.6%
  
FP Corp.
  
4,500
  
239,597
  
Owens-Illinois, Inc.*
  
113,200
  
3,129,980
  
Sonoco Products Co.
  
126,614
  
4,140,278
  
 
 
7,509,855
  
Metals & Mining 1.4%
  
BHP Billiton Ltd.
  
121,264
  
4,401,466
  
Cliffs Natural Resources, Inc.
  
6,100
  
345,077
  
Freeport-McMoRan Copper & Gold, Inc.
  
59,700
  
4,270,938
  
Kinross Gold Corp.
  
129,376
  
2,120,473
  
Lynas Corp., Ltd.*
  
373,514
  
256,818
  
North American Palladium Ltd.*
  
38,800
  
129,204
  
Northam Platinum Ltd.
  
36,752
  
221,663
  
Randgold Resources Ltd. (ADR) (a)
  
4,200
  
377,496
  
Rio Tinto PLC
  
71,807
  
3,723,375
  
Vista Gold Corp.*
  
25,200
  
34,524
  
 
 
15,881,034
  
Paper & Forest Products 0.1%
  
Schweitzer-Mauduit International, Inc.
  
11,300
  
598,109
  
Telecommunication Services 2.7%
  
Diversified Telecommunication Services 1.7%
  
AT&T, Inc.
  
225,343
  
5,845,397
  
BCE, Inc.
  
80,362
  
2,459,881
  
Belgacom SA
  
23,528
  
844,851
  
CenturyLink, Inc. (a)
  
157,315
  
5,603,560
  
Deutsche Telekom AG (Registered)
  
90,240
  
1,212,418
  
Singapore Telecommunications Ltd.
  
125,000
  
286,807
  
Verizon Communications, Inc.
  
102,931
  
2,991,175
  
 
 
19,244,089
  
Wireless Telecommunication Services 1.0%
  
American Tower Corp. "A"*
  
60,500
  
2,797,520
  
NTT DoCoMo, Inc.
  
918
  
1,461,022
  
Vodafone Group PLC
  
1,199,461
  
2,799,674
  
Vodafone Group PLC (ADR) (a)
  
172,994
  
4,061,899
  
 
 
11,120,115
  
Utilities 2.2%
  
Electric Utilities 1.7%
  
Allegheny Energy, Inc.
  
121,337
  
2,766,484
  
American Electric Power Co., Inc.
  
90,885
  
3,270,042
  
Duke Energy Corp.
  
158,910
  
2,717,361
  
Entergy Corp. (a)
  
43,285
  
3,355,020
  
Exelon Corp.
  
37,744
  
1,578,831
  
FirstEnergy Corp. (a)
  
80,857
  
3,048,309
  
Southern Co.
  
81,196
  
2,868,655
  
 
 
19,604,702
  
Multi-Utilities 0.5%
  
PG&E Corp.
  
122,950
  
5,458,980
  
 
Total Common Stocks (Cost $546,415,430)
  
612,822,081
  
 
 
Convertible Preferred Stocks 0.0%
  
Energy
    
Apache Corp., Series D, 6.0%  (Cost $38,850)
  
777
  
42,214
  
 
 
Warrants 0.0%
  
Consumer Discretionary 0.0%
  
Readers Digest Association, Inc., Expiration Date 2/19/2014*
  
207
  
6
  
Financials 0.0%
  
New ASAT (Finance) Ltd., Expiration Date 2/1/2011*
  
75,400
  
0
  
Information Technology 0.0%
  
Kingboard Chemical Holdings Ltd., Expiration Date 10/31/2012*
  
12,800
  
5,092
  
Materials 0.0%
  
Ashland, Inc., Expiration Date 3/31/2029*
  
506
  
0
  
 
Total Warrants (Cost $90,209)
  
5,098
  

 
Principal
Amount ($) (b)
  
Value ($)
  
 
 
Corporate Bonds 6.2%
  
Consumer Discretionary 0.6%
  
AMC Entertainment, Inc.:
          
 
8.0%, 3/1/2014
    
135,000
  
135,000
  
 
8.75%, 6/1/2019
    
120,000
  
126,000
  
American Achievement Corp., 144A, 8.25%, 4/1/2012
    
45,000
  
44,438
  
Ameristar Casinos, Inc., 9.25%, 6/1/2014
    
75,000
  
80,062
  
Asbury Automotive Group, Inc.:
          
 
7.625%, 3/15/2017
    
105,000
  
100,012
  
 
8.0%, 3/15/2014
    
50,000
  
50,000
  
CanWest MediaWorks LP, 144A, 9.25%, 8/1/2015 **
    
75,000
  
17,344
  
Carrols Corp., 9.0%, 1/15/2013
    
45,000
  
45,337
  
Clear Channel Worldwide Holdings, Inc.:
          
 
Series A, 144A, 9.25%, 12/15/2017
    
15,000
  
15,600
  
 
Series B, 144A, 9.25%, 12/15/2017
    
20,000
  
21,000
  
DIRECTV Holdings LLC, 6.35%, 3/15/2040
    
196,000
  
212,119
  
Discovery Communications LLC, 5.05%, 6/1/2020
    
1,700,000
  
1,809,618
  
DISH DBS Corp.:
          
 
6.625%, 10/1/2014
    
130,000
  
132,925
  
 
7.125%, 2/1/2016
    
95,000
  
97,612
  
Fontainebleau Las Vegas Holdings LLC, 144A, 11.0%, 6/15/2015 **
    
100,000
  
250
  
Goodyear Tire & Rubber Co., 10.5%, 5/15/2016
    
45,000
  
50,400
  
Great Canadian Gaming Corp., 144A, 7.25%, 2/15/2015
    
90,000
  
90,450
  
Hertz Corp., 8.875%, 1/1/2014
    
195,000
  
200,850
  
Isle of Capri Casinos, Inc., 7.0%, 3/1/2014
    
50,000
  
45,875
  
MGM Resorts International:
          
 
10.375%, 5/15/2014
    
65,000
  
71,825
  
 
11.125%, 11/15/2017
    
85,000
  
96,475
  
Norcraft Holdings LP, 9.75%, 9/1/2012
    
114,000
  
106,732
  
Penske Automotive Group, Inc., 7.75%, 12/15/2016
    
180,000
  
173,250
  
Sabre Holdings Corp., 8.35%, 3/15/2016
    
80,000
  
80,400
  
TCI Communications, Inc., 8.75%, 8/1/2015
    
638,000
  
795,747
  
Time Warner Cable, Inc., 8.25%, 2/14/2014
    
250,000
  
298,090
  
Time Warner, Inc.:
          
 
5.875%, 11/15/2016
    
540,000
  
618,363
  
 
6.2%, 3/15/2040
    
675,000
  
719,119
  
 
7.625%, 4/15/2031
    
675,000
  
815,137
  
Travelport LLC:
          
 
5.163% ***, 9/1/2014
    
70,000
  
67,200
  
 
9.875%, 9/1/2014
    
15,000
  
15,488
  
Trump Entertainment Resorts, Inc., 8.5%, 6/1/2015 **
    
20,000
  
25
  
United Components, Inc., 9.375%, 6/15/2013
    
15,000
  
15,225
  
UPC Holding BV, 144A, 7.75%, 1/15/2014
EUR
  
90,000
  
117,284
  
Vertis, Inc., 13.5%, 4/1/2014 (PIK)
    
124,028
  
51,162
  
Young Broadcasting, Inc., 8.75%, 1/15/2014 **
    
430,000
  
4
  
 
 
7,316,418
  
Consumer Staples 0.7%
  
Anheuser-Busch InBev Worldwide, Inc., 144A, 7.75%, 1/15/2019
    
1,750,000
  
2,179,434
  
CVS Caremark Corp.:
          
 
6.125%, 9/15/2039
    
925,000
  
987,339
  
 
6.25%, 6/1/2027
    
1,200,000
  
1,317,312
  
General Nutrition Centers, Inc., 5.75% ***, 3/15/2014 (PIK)
    
55,000
  
52,800
  
Kraft Foods, Inc., 5.375%, 2/10/2020
    
2,510,000
  
2,745,566
  
Kroger Co., 5.4%, 7/15/2040
    
410,000
  
412,415
  
North Atlantic Trading Co., 144A, 10.0%, 3/1/2012
    
526,750
  
445,104
  
SUPERVALU, Inc., 8.0%, 5/1/2016
    
35,000
  
35,262
  
 
 
8,175,232
  
Energy 0.8%
  
Atlas Energy Operating Co., LLC, 10.75%, 2/1/2018
    
185,000
  
206,275
  
Belden & Blake Corp., 8.75%, 7/15/2012
    
416,000
  
399,360
  
Bristow Group, Inc., 7.5%, 9/15/2017
    
95,000
  
94,525
  
Chaparral Energy, Inc., 8.5%, 12/1/2015
    
120,000
  
116,400
  
Chesapeake Energy Corp.:
          
 
6.25%, 1/15/2018
    
50,000
  
51,125
  
 
6.875%, 11/15/2020
    
25,000
  
26,031
  
DCP Midstream LLC, 144A, 9.75%, 3/15/2019
    
850,000
  
1,101,452
  
El Paso Corp., 7.25%, 6/1/2018
    
90,000
  
95,452
  
Enterprise Products Operating LLC, 6.125%, 10/15/2039
    
860,000
  
904,024
  
Frontier Oil Corp., 6.625%, 10/1/2011
    
65,000
  
65,325
  

Kinder Morgan Energy Partners LP:
              
 
6.5%, 9/1/2039
    
300,000
  
327,081
  
 
7.3%, 8/15/2033
    
1,140,000
  
1,334,776
  
Linn Energy LLC, 11.75%, 5/15/2017
    
120,000
  
138,600
  
Newfield Exploration Co., 7.125%, 5/15/2018
    
135,000
  
141,413
  
ONEOK Partners LP, 6.15%, 10/1/2016
    
804,000
  
923,614
  
OPTI Canada, Inc.:
              
 
7.875%, 12/15/2014
    
125,000
  
108,125
  
 
8.25%, 12/15/2014
    
45,000
  
39,094
  
Petrohawk Energy Corp., 7.875%, 6/1/2015
    
50,000
  
51,750
  
Plains All American Pipeline LP, 8.75%, 5/1/2019
    
2,000,000
  
2,491,818
  
Plains Exploration & Production Co., 7.0%, 3/15/2017
    
65,000
  
64,269
  
Quicksilver Resources, Inc., 7.125%, 4/1/2016
    
20,000
  
19,600
  
Regency Energy Partners LP:
              
 
8.375%, 12/15/2013
    
105,000
  
109,988
  
 
144A, 9.375%, 6/1/2016
    
125,000
  
136,250
  
Stone Energy Corp., 6.75%, 12/15/2014
    
95,000
  
84,075
  
Whiting Petroleum Corp., 7.25%, 5/1/2013
    
20,000
  
20,350
  
 
 
9,050,772
  
Financials 2.0%
  
Algoma Acquisition Corp., 144A, 9.875%, 6/15/2015
    
190,000
  
167,675
  
American Express Co., 7.0%, 3/19/2018
    
1,411,000
  
1,665,882
  
Ashton Woods USA LLC, 144A, Step-up Coupon, 0% to 6/30/2012, 11.0% to 6/30/2015
    
111,800
  
64,285
  
Bank of America Corp., Series L, 7.625%, 6/1/2019
    
1,550,000
  
1,811,511
  
Buffalo Thunder Development Authority, 144A, 9.375%, 12/15/2014 **
    
45,000
  
8,100
  
Calpine Construction Finance Co., LP, 144A, 8.0%, 6/1/2016
    
105,000
  
109,725
  
Citigroup, Inc.:
              
 
6.125%, 5/15/2018
    
1,500,000
  
1,604,778
  
 
8.5%, 5/22/2019
    
474,000
  
576,013
  
Covidien International Finance SA, 4.2%, 6/15/2020
    
1,220,000
  
1,267,220
  
DuPont Fabros Technology LP, (REIT), 8.5%, 12/15/2017
    
60,000
  
63,825
  
FCE Bank PLC, 9.375%, 1/17/2014
EUR
  
100,000
  
141,392
  
Fifth Third Bancorp., 5.45%, 1/15/2017
    
1,573,000
  
1,622,836
  
Ford Motor Credit Co., LLC, 9.875%, 8/10/2011
    
285,000
  
300,656
  
General Electric Capital Corp., Series A, 5.25%, 10/19/2012
    
1,750,000
  
1,882,461
  
Hartford Financial Services Group, Inc., 5.95%, 10/15/2036
    
570,000
  
492,449
  
iPayment, Inc., 9.75%, 5/15/2014
    
80,000
  
73,300
  
Jefferies Group, Inc., 6.875%, 4/15/2021
    
400,000
  
404,303
  
KeyBank NA, 5.7%, 11/1/2017
    
950,000
  
1,004,448
  
Lincoln National Corp., 8.75%, 7/1/2019
    
910,000
  
1,144,793
  
MetLife, Inc.:
              
 
6.75%, 6/1/2016
    
405,000
  
465,639
  
 
7.717%, 2/15/2019
    
750,000
  
919,288
  
Morgan Stanley:
              
 
Series F, 6.625%, 4/1/2018
    
900,000
  
978,812
  
 
7.3%, 5/13/2019
    
450,000
  
507,977
  
National Money Mart Co., 10.375%, 12/15/2016
    
115,000
  
120,462
  
New ASAT (Finance) Ltd., 9.25%, 2/1/2011 **
    
227,737
  
2,528
  
Orascom Telecom Finance SCA, 144A, 7.875%, 2/8/2014
    
100,000
  
92,500
  
Pinnacle Foods Finance LLC, 144A, 9.25%, 4/1/2015
    
105,000
  
108,544
  
PNC Bank NA, 6.875%, 4/1/2018
    
1,300,000
  
1,483,615
  
Prudential Financial, Inc.:
              
 
Series B, 5.1%, 9/20/2014
    
350,000
  
375,110
  
 
6.2%, 1/15/2015
    
390,000
  
432,539
  
 
7.375%, 6/15/2019
    
115,000
  
135,949
  
Rainbow National Services LLC, 144A, 10.375%, 9/1/2014
    
17,000
  
17,680
  
Sprint Capital Corp., 7.625%, 1/30/2011
    
75,000
  
76,687
  
Telecom Italia Capital SA, 5.25%, 11/15/2013
    
800,000
  
843,625
  
The Goldman Sachs Group, Inc., 6.15%, 4/1/2018
    
1,500,000
  
1,618,158
  
Tropicana Entertainment LLC, 9.625%, 12/15/2014 **
    
235,000
  
311
  
UCI Holdco, Inc., 8.537% ***, 12/15/2013 (PIK)
    
131,268
  
129,955
  
Wind Acquisition Finance SA:
              
 
144A, 11.0%, 12/1/2015
EUR
  
250,000
  
337,190
  
 
144A, 12.0%, 12/1/2015
    
75,000
  
79,312
  
WMG Acquisition Corp., 9.5%, 6/15/2016
    
70,000
  
76,125
  
 
 
23,207,658
  
Health Care 0.6%
  
Community Health Systems, Inc., 8.875%, 7/15/2015
    
425,000
  
445,188
  
Express Scripts, Inc.:
              
 
6.25%, 6/15/2014
    
930,000
  
1,063,109
  
 
7.25%, 6/15/2019
    
960,000
  
1,173,976
  
HCA, Inc.:
              
 
8.5%, 4/15/2019
    
150,000
  
165,750
  
 
9.125%, 11/15/2014
    
115,000
  
121,038
  
 
9.25%, 11/15/2016
    
430,000
  
464,400
  
 
9.625%, 11/15/2016 (PIK)
    
131,000
  
141,480
  
IASIS Healthcare LLC, 8.75%, 6/15/2014
    
95,000
  
97,375
  
Medco Health Solutions, Inc., 7.125%, 3/15/2018
    
1,499,000
  
1,792,907
  
Quest Diagnostics, Inc., 6.95%, 7/1/2037
    
845,000
  
936,902
  
The Cooper Companies, Inc., 7.125%, 2/15/2015
    
150,000
  
149,438
  
Valeant Pharmaceuticals International, 8.375%, 6/15/2016
    
55,000
  
62,150
  
 
 
6,613,713
  
Industrials 0.3%
  
Actuant Corp., 6.875%, 6/15/2017
    
60,000
  
60,300
  
ARAMARK Corp., 8.5%, 2/1/2015
    
30,000
  
31,013
  
BE Aerospace, Inc., 8.5%, 7/1/2018
    
160,000
  
174,000
  
Belden, Inc., 7.0%, 3/15/2017
    
75,000
  
75,000
  
Cenveo Corp., 144A, 10.5%, 8/15/2016
    
25,000
  
25,250
  
Congoleum Corp., 8.625%, 8/1/2008 **
    
572,000
  
134,420
  
Corrections Corp. of America, 7.75%, 6/1/2017
    
30,000
  
32,025
  
CSX Corp.:
              
 
6.15%, 5/1/2037
    
650,000
  
715,551
  
 
6.25%, 3/15/2018
    
710,000
  
818,462
  
Esco Corp., 144A, 4.412% ***, 12/15/2013
    
50,000
  
45,813
  
Great Lakes Dredge & Dock Co., 7.75%, 12/15/2013
    
60,000
  
60,750
  
K. Hovnanian Enterprises, Inc., 8.875%, 4/1/2012
    
90,000
  
84,262
  
Kansas City Southern de Mexico SA de CV, 7.375%, 6/1/2014
    
65,000
  
67,112
  
McJunkin Red Man Corp., 144A, 9.5%, 12/15/2016
    
90,000
  
88,650
  
Mobile Mini, Inc., 9.75%, 8/1/2014
    
90,000
  
92,700
  
Navios Maritime Holdings, Inc., 9.5%, 12/15/2014
    
115,000
  
112,700
  
Owens Corning, Inc., 9.0%, 6/15/2019
    
40,000
  
47,515
  
Titan International, Inc., 8.0%, 1/15/2012
    
265,000
  
275,600
  
TransDigm, Inc., 7.75%, 7/15/2014
    
45,000
  
46,350
  
United Rentals North America, Inc.:
              
 
7.0%, 2/15/2014
    
65,000
  
64,513
  
 
10.875%, 6/15/2016
    
130,000
  
143,650
  
 
 
3,195,636
  
Information Technology 0.1%
  
Alcatel-Lucent USA, Inc., 6.45%, 3/15/2029
    
105,000
  
70,875
  
MasTec, Inc., 7.625%, 2/1/2017
    
105,000
  
102,375
  
Oracle Corp., 144A, 5.375%, 7/15/2040
    
625,000
  
635,766
  
SunGard Data Systems, Inc., 10.25%, 8/15/2015
    
255,000
  
267,750
  
Vangent, Inc., 9.625%, 2/15/2015
    
80,000
  
76,400
  
 
 
1,153,166
  
Materials 0.4%
  
Appleton Papers, Inc., 144A, 11.25%, 12/15/2015
    
45,000
  
37,912
  
Clondalkin Acquisition BV, 144A, 2.537% ***, 12/15/2013
    
90,000
  
77,850
  
CPG International I, Inc., 10.5%, 7/1/2013
    
195,000
  
196,950
  
Crown Americas LLC, 144A, 7.625%, 5/15/2017
    
30,000
  
31,800
  
Domtar Corp., 10.75%, 6/1/2017
    
70,000
  
86,275
  
Dow Chemical Co., 8.55%, 5/15/2019
    
1,475,000
  
1,842,088
  
Exopack Holding Corp., 11.25%, 2/1/2014
    
255,000
  
259,144
  
GEO Specialty Chemicals, Inc.:
              
 
144A, 7.5%, 3/31/2015 (PIK)
    
622,934
  
548,182
  
 
10.0%, 3/31/2015
    
613,760
  
540,109
  
Georgia-Pacific LLC, 144A, 7.125%, 1/15/2017
    
50,000
  
52,062
  
Graphic Packaging International, Inc., 9.5%, 6/15/2017
    
85,000
  
90,950
  
Hexcel Corp., 6.75%, 2/1/2015
    
305,000
  
301,950
  
Innophos, Inc., 8.875%, 8/15/2014
    
35,000
  
36,094
  
Millar Western Forest Products Ltd., 7.75%, 11/15/2013
    
40,000
  
35,200
  
NewMarket Corp., 7.125%, 12/15/2016
    
195,000
  
195,975
  
Owens-Brockway Glass Container, Inc., 7.375%, 5/15/2016
    
160,000
  
171,600
  
Radnor Holdings Corp., 11.0%, 3/15/2010 **
    
120,000
  
12
  
Silgan Holdings, Inc., 7.25%, 8/15/2016
    
80,000
  
82,400
  
Viskase Companies, Inc., 144A, 9.875%, 1/15/2018
    
95,000
  
96,425
  
Wolverine Tube, Inc., 15.0%, 3/31/2012 (PIK)
    
141,295
  
73,473
  
 
 
4,756,451
  
Telecommunication Services 0.4%
  
AT&T Mobility LLC, 6.5%, 12/15/2011
    
1,125,000
  
1,208,528
  
Cricket Communications, Inc.:
              
 
9.375%, 11/1/2014
    
160,000
  
165,400
  
 
10.0%, 7/15/2015
    
155,000
  
165,850
  
Crown Castle Towers LLC, 144A, 4.883%, 8/15/2040 ©
    
400,000
  
402,708
  
ERC Ireland Preferred Equity Ltd., 144A, 7.683% ***, 2/15/2017 (PIK)
EUR
  
257,741
  
41,575
  
Grupo Iusacell Celular SA de CV, 10.0%, 3/31/2012 **
    
48,802
  
16,593
  
Intelsat Corp.:
              
 
9.25%, 8/15/2014
    
30,000
  
30,975
  
 
9.25%, 6/15/2016
    
415,000
  
443,012
  
Intelsat Subsidiary Holding Co. SA, 8.875%, 1/15/2015
    
190,000
  
197,125
  
iPCS, Inc., 2.469% ***, 5/1/2013
    
35,000
  
33,162
  
MetroPCS Wireless, Inc., 9.25%, 11/1/2014
    
135,000
  
141,075
  
Millicom International Cellular SA, 10.0%, 12/1/2013
    
270,000
  
278,100
  
Telesat Canada, 11.0%, 11/1/2015
    
245,000
  
280,525
  
Windstream Corp.:
              
 
7.0%, 3/15/2019
    
90,000
  
86,850
  
 
7.875%, 11/1/2017
    
90,000
  
91,575
  
 
8.625%, 8/1/2016
    
15,000
  
15,638
  
 
 
3,598,691
  
Utilities 0.3%
  
AES Corp.:
              
 
8.0%, 10/15/2017
    
110,000
  
116,737
  
 
8.0%, 6/1/2020
    
95,000
  
100,581
  
 
144A, 8.75%, 5/15/2013
    
230,000
  
233,450
  
DTE Energy Co., 7.625%, 5/15/2014
    
305,000
  
357,461
  
FirstEnergy Solutions Corp., 6.8%, 8/15/2039
    
838,000
  
853,285
  
Kinder Morgan, Inc., 6.5%, 9/1/2012
    
45,000
  
47,363
  
Mirant North America LLC, 7.375%, 12/31/2013
    
60,000
  
61,725
  
NRG Energy, Inc.:
              
 
7.25%, 2/1/2014
    
180,000
  
184,500
  
 
7.375%, 2/1/2016
    
165,000
  
168,300
  
 
7.375%, 1/15/2017
    
260,000
  
263,250
  
NV Energy, Inc.:
              
 
6.75%, 8/15/2017
    
80,000
  
81,306
  
 
8.625%, 3/15/2014
    
31,000
  
31,930
  
Sempra Energy, 6.5%, 6/1/2016
    
625,000
  
732,079
  
Texas Competitive Electric Holdings Co., LLC, Series A, 10.25%, 11/1/2015
    
155,000
  
103,850
  
 
 
3,335,817
  
 
Total Corporate Bonds (Cost $66,865,111)
  
70,403,554
  
 
 
Asset-Backed 0.2%
  
Automobile Receivables 0.1%
  
Ford Credit Auto Owner Trust, "B", Series 2007-B, 5.69%, 11/15/2012
  
1,517,000
  
1,616,256
  
Credit Card Receivables 0.1%
  
Citibank Omni Master Trust, "A8", Series 2009-A8, 144A, 2.441% ***, 5/16/2016
  
1,300,000
  
1,312,955
  
 
Total Asset-Backed (Cost $2,833,875)
  
2,929,211
  
 
 
Mortgage-Backed Securities Pass-Throughs 6.2%
  
Federal Home Loan Bank, 6.0%, 11/1/2021
  
578,432
  
642,247
  
Federal National Mortgage Association:
              
 
4.018% ***, 8/1/2037
    
654,083
  
686,318
  
 
4.5%, with various maturities from 11/1/2020 until 9/1/2038 (c)
    
15,552,488
  
16,400,495
  
 
5.0%, with various maturities from 7/1/2035 until 2/1/2038
    
17,500,797
  
18,701,868
  
 
5.5%, with various maturities from 3/1/2035 until 4/1/2038 (c)
    
11,048,816
  
11,920,820
  
 
6.0%, with various maturities from 9/1/2035 until 8/1/2037 (c)
    
10,849,615
  
11,818,539
  
 
6.5%, with various maturities from 4/1/2017 until 6/1/2017
    
536,656
  
586,148
  
 
8.0%, 9/1/2015
    
350,495
  
382,042
  
Government National Mortgage Association:
              
 
4.5%, 5/1/2039 (c)
    
2,700,000
  
2,847,023
  
 
5.0%, 5/1/2038 (c)
    
2,700,000
  
2,904,820
  
 
5.5%, 5/1/2036 (c)
    
2,700,000
  
2,934,562
  
 
6.5%, 8/20/2034
    
239,926
  
267,611
  
 
Total Mortgage-Backed Securities Pass-Throughs (Cost $67,693,715)
  
70,092,493
  
 
 
Commercial Mortgage-Backed Securities 1.3%
  
Banc of America Commercial Mortgage, Inc., "A4", Series 2007-4, 5.843% ***, 2/10/2051
  
2,000,000
  
2,085,618
  
Bear Stearns Commercial Mortgage Securities, Inc., "A4", Series 2007-PW18, 5.7%, 6/11/2050
  
1,350,000
  
1,386,993
  
Citigroup/Deutsche Bank Commercial Mortgage Trust, "A4", Series 2006-CD2, 5.363% ***, 1/15/2046
  
2,300,000
  
2,411,613
  
LB-UBS Commercial Mortgage Trust:
              
 
"A4", Series 2006-C1, 5.156%, 2/15/2031
    
2,570,000
  
2,738,372
  
 
"A3", Series 2006-C7, 5.347%, 11/15/2038
    
3,750,000
  
3,922,670
  
 
"A4", Series 2007-C6, 5.858%, 7/15/2040
    
1,800,000
  
1,799,560
  
 
Total Commercial Mortgage-Backed Securities (Cost $13,128,475)
  
14,344,826
  
 
 
Collateralized Mortgage Obligation 0.2%
  
FDIC Structured Sale Guaranteed Notes, "1A", Series 2010-S1, 144A, 0.866% ***, 2/25/2048 (Cost $2,575,130)
  
2,570,098
  
2,578,098
  
 
 
Government & Agency Obligations 12.7%
  
Sovereign Bonds 2.6%
  
Federal Republic of Germany, 2.25%, 4/15/2013
EUR
  
801,423
  
1,106,441
  
Government of Canada, 4.0%, 12/1/2031
CAD
  
1,603,438
  
2,280,905
  
Government of France:
              
 
1.0%, 7/25/2017
EUR
  
950,110
  
1,263,419
  
 
2.25%, 7/25/2020
EUR
  
1,929,558
  
2,778,024
  
 
3.15%, 7/25/2032
EUR
  
2,001,316
  
3,490,438
  
Government of Japan, Series 9, 1.1%, 9/10/2016
JPY
  
157,569,000
  
1,792,633
  
Government of Sweden, Series 3105, 3.5%, 12/1/2015
SEK
  
9,500,000
  
1,764,757
  
Republic of Italy, 2.1%, 9/15/2017
EUR
  
1,092,887
  
1,447,667
  
Republic of Poland, 6.375%, 7/15/2019
    
385,000
  
436,975
  
State of Qatar, 144A, 6.4%, 1/20/2040
    
350,000
  
381,500
  
United Kingdom Treasury-Inflation Linked Bonds:
              
 
1.125%, 11/22/2037
GBP
  
1,492,385
  
2,469,822
  
 
1.875%, 11/22/2022
GBP
  
1,467,612
  
2,536,394
  
 
2.0%, 1/26/2035
GBP
  
847,000
  
2,047,724
  
 
2.5%, 8/16/2013
GBP
  
450,000
  
1,949,498
  
 
2.5%, 7/26/2016
GBP
  
423,000
  
2,038,058
  
 
2.5%, 4/16/2020
GBP
  
361,000
  
1,743,556
  
 
 
29,527,811
  
US Treasury Obligations 10.1%
  
US Treasury Bill, 0.18% ****, 9/16/2010 (d)
    
557,000
  
556,895
  
US Treasury Bonds:
              
 
4.75%, 2/15/2037
    
7,000,000
  
7,970,158
  
 
5.375%, 2/15/2031
    
6,000,000
  
7,372,500
  
US Treasury Inflation-Indexed Bonds:
              
 
2.375%, 1/15/2025
    
2,934,042
  
3,225,613
  
 
3.625%, 4/15/2028
    
2,023,365
  
2,583,900
  
US Treasury Inflation-Indexed Notes:
              
 
1.875%, 7/15/2015
    
672,990
  
723,307
  
 
2.0%, 1/15/2016
    
1,759,867
  
1,902,719
  
 
2.375%, 1/15/2017
    
2,758,743
  
3,048,626
  
 
2.5%, 7/15/2016
    
1,831,142
  
2,043,011
  
 
3.375%, 1/15/2012
    
3,194,594
  
3,361,061
  
US Treasury Notes:
              
 
1.75%, 1/31/2014
    
30,000,000
  
30,775,770
  
 
3.125%, 5/15/2019
    
6,000,000
  
6,181,872
  
 
3.625%, 2/15/2020 (a)
    
10,000,000
  
10,614,840
  
 
4.5%, 11/15/2015 (a)
    
30,000,000
  
34,352,340
  
 
 
114,712,612
  
 
Total Government & Agency Obligations (Cost $135,712,386)
  
144,240,423
  
 
 
Loan Participations and Assignments 0.1%
  
Senior Loans ***
    
Alliance Mortgage Cycle Loan, Term Loan A, 9.5%, 6/1/2010 **
  
233,333
  
0
  
Hawker Beechcraft Acquisition Co., LLC:
              
 
Term Loan, 2.316%, 3/26/2014
    
49,288
  
40,057
  
 
Letter of Credit, 2.633%, 3/26/2014
    
2,939
  
2,388
  
Hexion Specialty Chemicals, Inc.:
              
 
Term Loan C1, 2.813%, 5/6/2013
    
119,265
  
113,302
  
 
Term Loan C2, 2.813%, 5/6/2013
    
32,192
  
30,583
  
IASIS Healthcare LLC, Term Loan, 5.725%, 6/13/2014 (PIK)
  
253,737
  
239,569
  
Sabre, Inc., Term Loan B, 2.316%, 9/30/2014
  
77,940
  
70,746
  
Sbarro, Inc., Term Loan, 4.825%, 1/31/2014
  
55,000
  
50,737
  
Texas Competitive Electric Holdings Co., LLC:
              
 
Term Loan B3, 3.845%, 10/10/2014
    
244,172
  
189,992
  
 
Term Loan B2, 4.066%, 10/10/2014
    
41,311
  
32,217
  
 
Total Loan Participations and Assignments (Cost $1,089,391)
  
769,591
  
 
 
Preferred Securities 0.1%
  
Financials 0.1%
  
Farm Credit Bank of Texas, Series 1, 7.561%, 12/15/2013 (e)
    
889,000
  
736,572
  
Materials 0.0%
  
Hercules, Inc., 6.5%, 6/30/2029
    
141,000
  
112,448
  
 
Total Preferred Securities (Cost $1,027,420)
  
849,020
  

 
Units
  
Value ($)
  
 
 
Other Investments 0.0%
  
Consumer Discretionary
    
AOT Bedding Super Holdings LLC *(Cost $6,000)
    
6
  
6,000
  

 
Shares
  
Value ($)
  
 
 
Exchange-Traded Funds 10.5%
  
iShares Barclays Aggregate Bond Fund
  
537,459
  
58,013,325
  
iShares JPMorgan USD Emerging Markets Bond Fund
  
10,179
  
1,098,314
  
iShares MSCI Japan Index Fund (a)
  
245,986
  
2,368,845
  
iShares Russell 2000 Value Index Fund
  
370,162
  
22,491,043
  
SPDR Barclays Capital International Treasury Bond
  
19,630
  
1,118,321
  
Vanguard Emerging Markets
  
819,658
  
34,319,081
  
 
Total Exchange-Traded Funds (Cost $99,124,206)
  
119,408,929
  
 
 
Securities Lending Collateral 5.4%
  
Daily Assets Fund Institutional, 0.33% (f) (g)
(Cost $62,059,203)
    
62,059,203
  
62,059,203
  
 
 
Cash Equivalents 8.8%
  
Central Cash Management Fund, 0.25% (f)
(Cost $100,095,530)
    
100,095,530
  
100,095,530
  

 
% of
Net Assets
  
Value ($)
  
 
Total Investment Portfolio (Cost $1,098,754,931) †
105.6
  
1,200,646,271
  
Other Assets and Liabilities, Net
(5.6)
  
(64,179,747)
  
 
Net Assets
100.0
  
1,136,466,524
  

For information on the Fund's policies regarding the valuation of investments and other significant accounting policies, please refer to the Fund's most recent semi-annual or annual financial statements.
*
Non-income producing security.
**
Non-income producing security.  Issuer has defaulted on the payment of principal or interest or has filed for bankruptcy.  The following table represents bonds and senior loans that are in default:

Security
  
Coupon
  
Maturity
Date
Principal Amount ($)
Acquisition
Cost ($)
    
Value ($)
  
Alliance Mortgage Cycle Loan
     9.5 %
6/1/2010
   233,333  
USD
   233,333       0  
Buffalo Thunder Development Authority
     9.375 %
12/15/2014
   45,000  
USD
   45,000       8,100  
CanWest MediaWorks LP
     9.25 %
8/1/2015
   75,000  
USD
   75,000       17,344  
Congoleum Corp.
     8.625 %
8/1/2008
   572,000  
USD
   573,205       134,420  
Fontainebleau Las Vegas Holdings LLC
     11.0 %
6/15/2015
   100,000  
USD
   100,000       250  
Grupo Iusacell Celular SA de CV
     10.0 %
3/31/2012
   48,802  
USD
   46,440       16,593  
New ASAT (Finance) Ltd.
     9.25 %
2/1/2011
   227,737  
USD
   197,236       2,528  
Radnor Holdings Corp.
     11.0 %
3/15/2010
   120,000  
USD
   79,038       12  
Tropicana Entertainment LLC
     9.625 %
12/15/2014
   235,000  
USD
   172,931       311  
Trump Entertainment Resorts, Inc.
     8.5 %
6/1/2015
   20,000  
USD
   19,175       25  
Young Broadcasting, Inc.
     8.75 %
1/15/2014
   430,000  
USD
   367,438       4  
                      1,908,796       179,587  

***
These securities are shown at their current rate as of July 31, 2010.  Floating rate securities' yields vary with a designated market index or market rate, such as the coupon-equivalent of the US Treasury bill rate.
****
Annualized yield at time of purchase; not a coupon rate.
†
The cost for federal income tax purposes was $1,126,003,063.  At July 31, 2010, net unrealized appreciation for all securities based on tax cost was $74,643,208.  This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $114,637,486 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $39,994,278.
(a)
All or a portion of these securities were on loan.  The value of all securities loaned at July 31, 2010 amounted to $60,653,876 which is 5.3% of net assets.
(b)
Principal amount stated in US dollars unless otherwise noted.
(c)
When-issued or delayed delivery security included.
(d)
At July 31, 2010, this security has been pledged, in whole or in part, to cover initial margin requirements for open futures contracts.
(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.
ADR: American Depositary Receipt
CVA: Certificaten Van Aandelen
FDIC: Federal Deposit Insurance Corp.
MSCI: Morgan Stanley Capital International
PIK: Denotes that all or a portion of the income is paid in kind.
REIT: Real Estate Investment Trust
SPDR: Standard & Poor's Depositary Receipt
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 National Mortgage Association issues which have similar coupon rates have been aggregated for presentation purposes in this investment portfolio.



At July 31, 2010, open futures contracts purchased were as follows:

Futures
Currency
Expiration
Date
  
Contracts
    
Notional
Value ($)
    
Unrealized
Appreciation/
(Depreciation) ($)
  
   
   
10 Year US Treasury Note
USD
9/21/2010
     507       62,772,937       974,414  
AEX Index
EUR
8/20/2010
     73       6,262,408       (48,768 )
CAC 40 Index
EUR
8/20/2010
     181       8,589,215       (233 )
Federal Republic of Germany Euro-Schatz
EUR
9/8/2010
     1,556       221,445,377       (429,556 )
FTSE MIB Index
EUR
9/17/2010
     39       5,350,886       337,178  
IBEX 35 Index
EUR
8/20/2010
     25       3,408,879       85,304  
NASDAQ 100 E-Mini Index
USD
9/17/2010
     92       3,426,540       28,773  
TOPIX Index
JPY
9/10/2010
     44       4,313,676       (62,515 )
United Kingdom Long Gilt Bond
GBP
9/28/2010
     59       11,249,372       261,185  

Total net unrealized appreciation
1,145,782
  
 

At July 31, 2010, open futures contracts sold were as follows:

Futures
    
Currency
  
Expiration
Date
  
Contracts
  
Notional
Value ($)
  
Unrealized
Appreciation/
(Depreciation) ($)
  
 
   
10 Year Australian Treasury Bond
  
AUD
  
9/15/2010
  
154
  
14,798,585
  
93,221
  
10 Year Canadian Government Bond
  
CAD
  
9/21/2010
  
251
  
30,262,585
  
(724,380)
  
10 Year Japanese Government Bond
  
JPY
  
9/9/2010
  
24
  
39,402,280
  
(11,452)
  
2 Year US Treasury Note
  
USD
  
9/30/2010
  
129
  
28,267,125
  
(54,914)
  
ASX SPI 200 Index
  
AUD
  
9/16/2010
  
62
  
6,258,397
  
60,130
  
DAX Index
  
EUR
  
9/17/2010
  
3
  
602,740
  
40
  
DJ Euro Stoxx 50 Index
  
EUR
  
9/17/2010
  
310
  
11,089,160
  
(182,597)
  
Federal Republic of Germany Euro-Bund
  
EUR
  
9/8/2010
  
614
  
102,857,288
  
300,637
  
FTSE 100 Index
  
GBP
  
9/17/2010
  
64
  
5,267,321
  
(448,592)
  
Hang Seng Index
  
HKD
  
8/30/2010
  
3
  
404,976
  
(1,712)
  
Russell 2000 Mini Index
  
USD
  
9/17/2010
  
15
  
974,400
  
1,165
  
S&P 500 E-Mini Index
  
USD
  
9/17/2010
  
24
  
1,317,960
  
(14,636)
  
S&P TSX 60 Index
  
CAD
  
9/16/2010
  
45
  
5,984,534
  
(16,733)
  

Total net unrealized depreciation
(999,823)
  



At July 31, 2010, the Fund had the following open forward foreign currency exchange contracts:

Contracts to Deliver
  
In Exchange For
  
Settlement
Date
  
Unrealized
Appreciation ($)
  
Counterparty
 
USD
     4,637,203  
NZD
     6,601,000  
8/18/2010
     145,914  
Royal Bank of Scotland PLC
USD
     13,945,992  
AUD
     16,198,000  
8/18/2010
     673,780  
Royal Bank of Scotland PLC
USD
     11,041,382  
SEK
     85,806,000  
8/18/2010
     842,546  
UBS AG
USD
     19,167,098  
CAD
     20,007,000  
8/18/2010
     289,703  
UBS AG
USD
     1,235,648  
CHF
     1,313,000  
8/18/2010
     25,045  
Royal Bank of Scotland PLC
USD
     10,822,272  
EUR
     8,643,000  
8/18/2010
     440,755  
Royal Bank of Scotland PLC
USD
     23,544,784  
SEK
     179,546,000  
8/18/2010
     1,321,912  
Royal Bank of Scotland PLC
USD
     4,701,939  
JPY
     411,477,000  
8/18/2010
     61,528  
UBS AG
USD
     27,748,213  
GBP
     18,247,000  
8/18/2010
     881,536  
UBS AG
USD
     3,099,386  
CAD
     3,286,000  
8/18/2010
     96,248  
UBS AG
EUR
     7,821  
USD
     10,219  
8/25/2010
     27  
Citigroup, Inc.

Total unrealized appreciation
      
4,778,994
  
 

Contracts to Deliver
  
In Exchange For
  
Settlement
Date
  
Unrealized
Depreciation ($)
  
Counterparty
 
GBP
     26,165,000  
USD
     39,207,075  
8/18/2010
     (1,846,105 )
Royal Bank of Scotland PLC
EUR
     49,405,000  
USD
     60,861,031  
8/18/2010
     (3,520,532 )
UBS AG
NOK
     110,153,000  
USD
     17,060,924  
8/18/2010
     (1,052,026 )
Royal Bank of Scotland PLC
AUD
     22,620,000  
USD
     19,011,318  
8/18/2010
     (1,404,735 )
UBS AG
EUR
     486,579  
USD
     628,230  
8/25/2010
     (5,847 )
Citigroup, Inc.

Total unrealized depreciation
      
(7,829,245)
  

Currency Abbreviations
  
 
AUD
Australian Dollar
      
CAD
Canadian Dollar
      
CHF
Swiss Franc
      
EUR
Euro
      
GBP
British Pound
      
HKD
Hong Kong Dollar
      
JPY
Japanese Yen
      
NOK
Norwegian Krone
      
NZD
New Zealand Dollar
      
SEK
Swedish Krona
      
USD
United States Dollar
      



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 July 31, 2010 in valuing the Fund's investments.

   
Level 1
    
Level 2
    
Level 3
    
Total
  
Assets
                        
Common Stock and/or Other Equity Investments(h)
                        
Consumer Discretionary
   $ 49,747,174     $ 17,814,834     $ 6     $ 67,562,014  
Consumer Staples
     44,180,401       13,875,741       —       58,056,142  
Energy
     63,239,578       14,114,457       —       77,354,035  
Financials
     38,644,620       20,154,296       0       58,798,916  
Health Care
     59,219,816       3,845,056       —       63,064,872  
Industrials
     57,476,634       24,938,935       —       82,415,569  
Information Technology
     93,262,365       11,873,490       —       105,135,855  
Materials
     26,296,482       18,757,622       0       45,054,104  
Telecommunication Services
     23,759,432       6,604,772       —       30,364,204  
Utilities
     25,063,682       —       —       25,063,682  
Fixed Income Investments(h)
                                
     Corporate Bonds
     —       69,315,259       1,088,295       70,403,554  
     Asset Backed
     —       2,929,211       —       2,929,211  
     Mortgage-Backed Securities Pass-
     Throughs
     —       70,092,493       —       70,092,493  
     Commercial Mortgage-Backed
     Securities
     —       14,344,826       —       14,344,826  
     Collateralized Mortgage Obligations
     —       2,578,098       —       2,578,098  
     Government & Agency Obligations
     —       143,683,528       —       143,683,528  
     Loan Participations and Assignments
     —       769,591       0       769,591  
     Preferred Securities
     —       849,020       —       849,020  
 Other Investments
     —       —       6,000       6,000  
Exchange-Traded Funds
     119,408,929       —       —       119,408,929  
Short-Term Investments(h)
     162,154,733       556,895       —       162,711,628  
Derivatives(i)
     145,959       4,778,994       —       4,924,953  
Total
   $ 762,599,805     $ 441,877,118     $ 1,094,301     $ 1,205,571,224  
Liabilities
                                
Derivatives(i)
   $ —     $ (7,829,245 )   $ —     $ (7,829,245 )
Total
   $ —     $ (7,829,245 )   $ —     $ (7,829,245 )

There have been no significant transfers in and out of Level 1 and Level 2 fair value measurements during the period ended July 31, 2010.
  
(h)
See Investment Portfolio for additional detailed categorizations.
(i)
Derivatives include unrealized appreciation (depreciation) on open futures contracts and forward foreign currency exchange contracts.




Level 3 Reconciliation

The following is a reconciliation of the Fund's Level 3 investments for which significant unobservable inputs were used in determining value:

 
Common Stock and/or Other Equity Investments
      
 
Consumer Discretionary
Financials
Materials
Corporate Bonds
Loan Participations and Assignments
Other Investments
Total
Balance as of
October 31, 2009
$                 0
$      843,120
$             0
$  1,139,905
$              41,000
$              —
$   2,024,025
Realized gain (loss)
(17,340)
397,129
—
—
(56,269)
—
323,520
Change in unrealized appreciation (depreciation)
17,346
62,378
—
147,184
55,009
0
281,917
Amortization premium/discount
—
—
—
9,291
260
—
9,551
Net purchases (sales)
0
(1,302,627)
—
—
(40,000)
6,000
(1,336,627)
Transfers into Level 3
—
—
—
4,300(j)
—
—
4,300
Transfers (out) of Level 3
—
—
—
(212,385)(k)
—
—
(212,385)
Balance as of
July 31, 2010
$                6
$               0
$             0
$   1,088,295
$                     0
$        6,000
$   1,094,301
Net change in unrealized appreciation (depreciation) from investments still held at July 31, 2010
$                6
$     (12,070)
$             0
$      147,184
$                    0
$                0
$     135,120

(j)
The investment was transferred from Level 2 to Level 3 because of the lack of observable market data due to a decrease in market activity.
(k)
The investment was transferred from Level 3 to Level 2 as a result of the availability of a pricing source supported by observable inputs.


Derivatives

The following table presents, by major type of derivative contract, the unrealized appreciation (depreciation) of the Fund's derivative instruments as of July 31, 2010 categorized by the primary underlying risk exposure. 

 
 
Primary Underlying Risk Disclosure
  
Futures
    
Forward Currency Contracts
  
Equity Contracts
   $ (263,196 )   $ —  
Foreign Exchange Contracts
   $ —     $ (3,050,251 )
Interest Rate Contracts
   $ 409,155     $ —  


 

 

ITEM 2.
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 registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting.
   
ITEM 3.
EXHIBITS
   
 
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.



 

 
SIGNATURES

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

Registrant:
DWS Balanced Fund
   
By:
/s/Michael G. Clark
Michael G. Clark
President
   
Date:
September 24, 2010


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


By:
/s/Michael G. Clark
Michael G. Clark
President
   
Date:
September 24, 2010
   
   
   
By:
/s/Paul Schubert
Paul Schubert
Chief Financial Officer and Treasurer
   
Date:
September 24, 2010