UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

 

FORM N-CSRS

 

| Investment Company Act file number | 811-1236 |
|------------------------------------|----------|

 

DWS Balanced Fund

(Exact Name of Registrant as Specified in Charter)

 

345 Park Avenue

New York, NY 10154-0004

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s Telephone Number, including Area Code:(212) 454-7190

 

Paul Schubert

345 Park Avenue

New York, NY 10154-0004

(Name and Address of Agent for Service)

 

| Date of fiscal year end: | 10/31 |
|--------------------------|-------|

 

| Date of reporting period: | 04/30/09 |
|---------------------------|----------|

 

 

**ITEM 1.**           **REPORT TO STOCKHOLDERS**

 

|  

APRIL 30, 2009
Semiannual Report                    to Shareholders |
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**DWS Balanced Fund**                                               |
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**Contents**

| **4**Performance Summary

**11**Information About Your Fund's Expenses

**13**Portfolio Management Review

**21**Portfolio Summary

**23**Investment Portfolio

**67**Financial Statements

**71**Financial Highlights

**76**Notes to Financial Statements

**88**Summary of Management Fee Evaluation by Independent Fee Consultant

**93**Summary of Administrative Fee Evaluation by Independent Fee Consultant

**94**Account Management Resources

**95**Privacy Statement |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**This report must be preceded or accompanied by a prospectus. To obtain a 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 prospectus contains this and other important information about the fund. Please read the prospectus carefully before        you invest.**

Investments in mutual funds involve risk. Some funds have more risk than others. Although asset allocation among different asset categories generally limits risk, the risk remains that the investment advisor may favor an asset category that performed poorly relative to other asset categories. The fund is subject to stock market risk, meaning stocks in the fund may decline in value for extended periods due to the        activities and financial prospects of individual companies, or due to general market and economic conditions. The fund also invests in individual bonds whose yields and market values fluctuate, so that your investment may be worth more or less than its original cost. Bond investments are subject to interest rate risk such that when interest rates rise, the prices of the bonds, and thus the value of the fund, can decline and the investor can lose principal value. The fund invests in        derivatives seeking to hedge positions in certain securities and to generate income in order to enhance the fund's returns. Derivatives can be more volatile and less liquid than traditional fixed-income securities. Please read the prospectus for details regarding the fund's risk.

*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 SummaryApril 30, 2009**

**Classes A, B, C and Institutional Class**

**All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Please visit www.dws-investments.com for the        Fund's most recent month-end performance.**

**The maximum sales charge for Class A shares is 5.75%. For Class B shares, the maximum contingent deferred sales charge (CDSC) is 4% within the first year after purchase, declining to 0% after six years. Class C shares have no front-end sales charges but redemptions within one year of purchase may be subject to a CDSC of 1%. Unadjusted returns do not reflect sales charges and would have been lower if they had.        Institutional Class shares are not subject to sales charges.**

**The total annual fund operating expense ratios, gross of any fee waivers or expense reimbursements, as stated in the fee table of the prospectus dated March 1, 2009 are 0.96%, 1.87%, 1.79% and 0.72% for Class A, Class B, Class C and Institutional Class shares, respectively. Please see the Information About Your Fund's Expenses, the Financial Highlights and Notes to the Financial Statements (Note C, Related Parties)        sections of this report for gross and net expense related disclosure for the period ended April 30, 2009.**

Returns and rankings for all periods shown for Class A and B shares and for the 1-year, 3-year, 5-year and 10-year periods shown for Class C and Institutional Class shares reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns and rankings would have been lower.

Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns and rankings may differ by share class.

| **Average Annual Total Returns**(Unadjusted for Sales Charge) as of 4/30/09 |
|-----------------------------------------------------------------------------|
| **DWS Balanced Fund**                                                       | **6-Month‡** | **1-Year** | **3-Year** | **5-Year** | **10-Year** |
| **Class A**                                                                 | **-.32%** | **-24.53%** | **-6.87%** | **-1.58%** | **-1.09%** |
| **Class B**                                                                 | **-.69%** | **-24.86%** | **-7.11%** | **-1.97%** | **-1.73%** |
| **Class C**                                                                 | **-.61%** | **-25.12%** | **-7.61%** | **-2.40%** | **-1.92%** |
| **Institutional Class**                                                     | **-.19%** | **-24.28%** | **-6.56%** | **-1.29%** | **-.77%** |
| Russell 1000® Index+                                                    | -7.39% | -35.30% | -10.76% | -2.32% | -2.03% |
| Barclays Capital US Aggregate Bond Index++                             | 7.74% | 3.84% | 6.01% | 4.78% | 5.71% |
| Blended Index+++                                                            | .07% | -23.11% | -4.66% | 1.41% | 2.16% |

*Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.*

| **Net Asset Value and Distribution Information**                         |
|--------------------------------------------------------------------------|
|                                                                     | **Class A** | **Class B** | **Class C** | **Institutional Class** |
| **Net Asset Value:**
4/30/09                                             | $ 7.02 | $ 7.04 | $ 7.01 | $ 7.03 |
| 10/31/08                                                                 | $ 7.11 | $ 7.15 | $ 7.10 | $ 7.12 |
| **Distribution Information:**
Six Months as of 4/30/09:
Income Dividends | $ .06 | $ .06 | $ .04 | $ .07 |

| **Class A Lipper Rankings — Mixed-Asset Target Allocation Moderate Funds Category**as of 4/30/09 |
|--------------------------------------------------------------------------------------------------------|
| **Period**                                                                                             | **Rank** |   | **Number of Funds Tracked** | **Percentile Ranking (%)** |
| 1-Year                                                                                                 | 356 | of | 524 | 68 |
| 3-Year                                                                                                 | 278 | of | 385 | 73 |
| 5-Year                                                                                                 | 237 | of | 290 | 81 |
| 10-Year                                                                                                | 125 | of | 148 | 84 |

**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. Rankings are for Class A shares; other share classes may vary.**

| **Growth of an Assumed $10,000 Investment**(Adjusted for Maximum Sales Charge)                                           |
|----------------------------------------------------------------------------------------------------------------------------------------------|
| **[]DWS Balanced Fund — Class A**

**[]Russell 1000 Index+**

**[]Barclays Capital US Aggregate Bond Index++**

**[]Blended Index+++** |
|                                                                                                                                              |
| Yearly periods ended April 30                                                                                                                |

**The Fund's growth of an assumed $10,000 investment is adjusted for the maximum sales charge of 5.75%. This results in a net initial investment of $9,425.**

| **Comparative Results**(Adjusted for Maximum Sales Charge) as of 4/30/09 |
|--------------------------------------------------------------------------|
| **DWS Balanced Fund**                                                    | **1-Year** | **3-Year** | **5-Year** | **10-Year** |
| **Class A**                                                              | Growth of $10,000 | $7,113 | $7,614 | $8,702 | $8,449 |
| Average annual total return                                              | -28.87% | -8.69% | -2.74% | -1.67% |
| **Class B**                                                              | Growth of $10,000 | $7,293 | $7,866 | $8,971 | $8,397 |
| Average annual total return                                              | -27.07% | -7.69% | -2.15% | -1.73% |
| **Class C**                                                              | Growth of $10,000 | $7,488 | $7,887 | $8,857 | $8,239 |
| Average annual total return                                              | -25.12% | -7.61% | -2.40% | -1.92% |
| Russell 1000 Index+                                                      | Growth of $10,000 | $6,470 | $7,107 | $8,891 | $8,147 |
| Average annual total return                                              | -35.30% | -10.76% | -2.32% | -2.03% |
| Barclays Capital US Aggregate Bond Index++                     | Growth of $10,000 | $10,384 | $11,913 | $12,628 | $17,432 |
| Average annual total return                                              | 3.84% | 6.01% | 4.78% | 5.71% |
| Blended Index+++                                                         | Growth of $10,000 | $7,689 | $8,667 | $10,727 | $12,381 |
| Average annual total return                                              | -23.11% | -4.66% | 1.41% | 2.16% |

*The growth of $10,000 is cumulative.*

| **Growth of an Assumed $1,000,000 Investment**                                                                                                           |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| **[]DWS Balanced Fund — Institutional Class**

**[]Russell 1000 Index+**

**[]Barclays Capital US Aggregate Bond Index++**

**[]Blended Index+++** |
|                                                                                                                                                          |
| Yearly periods ended April 30                                                                                                                            |

| **Comparative Results**as of 4/30/09            |
|-------------------------------------------------|
| **DWS Balanced Fund**                           | **1-Year** | **3-Year** | **5-Year** | **10-Year** |
| **Institutional Class**                         | Growth of $1,000,000 | $757,200 | $815,700 | $937,200 | $925,800 |
| Average annual total return                | -24.28% | -6.56% | -1.29% | -.77% |
| Russell 1000 Index+                             | Growth of $1,000,000 | $647,000 | $710,700 | $889,100 | $814,700 |
| Average annual total return                | -35.30% | -10.76% | -2.32% | -2.03% |
| Barclays Capital US Aggregate Bond Index++ | Growth of $1,000,000 | $1,038,400 | $1,191,300 | $1,262,800 | $1,743,200 |
| Average annual total return                | 3.84% | 6.01% | 4.78% | 5.71% |
| Blended Index+++                                | Growth of $10,000 | $768,900 | $866,700 | $1,072,700 | $1,238,100 |
| Average annual total return                     | -23.11% | -4.66% | 1.41% | 2.16% |

*The growth of $1,000,000 is cumulative.*

*The minimum initial investment for the Institutional Class is $1,000,000.*

**Class S**

Class S shares are generally not available to new investors except under certain circumstances. (Please refer to the Fund's Statement of Additional Information.)

**All performance shown is historical, assumes reinvestment of all dividend and capital gain distributions, and does not guarantee future results. Investment return and principal value fluctuate with changing market conditions so that, when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Please visit www.dws-investments.com for        the Fund's most recent month-end performance.**

**The total annual fund operating expense ratio, gross of any fee waivers or expense reimbursements, as stated in the fee table of the prospectus dated March 1, 2009 is 0.76% for Class S shares. Please see the Information About Your Fund's Expenses, the Financial Highlights and Notes to the Financial Statements (Note C, Related Parties) sections of this report for gross and net expense related disclosure for the        period ended April 30, 2009.**

Returns and rankings for all periods shown reflect a fee waiver and/or expense reimbursement. Without this waiver/reimbursement, returns and rankings would have been lower.

Performance figures do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemptions of fund shares. Returns may differ by share class.

| **Average Annual Total Returns**as of 4/30/09 |
|-----------------------------------------------|
| **DWS Balanced Fund**                         | **6-Month‡** | **1-Year** | **3-Year** | **Life of Class*** |
| **Class S**                                   | **-.09%** | **-24.28%** | **-6.64%** | **-2.89%** |
| Russell 1000 Index+                           | -7.39% | -35.30% | -10.76% | -4.91% |
| Barclays Capital US Aggregate Bond Index++    | 7.74% | 3.84% | 6.01% | 4.91% |
| Blended Index+++                              | .07% | -23.11% | -4.66% | -.44% |

*Sources: Lipper Inc. and Deutsche Investment Management Americas Inc.*

| **Net Asset Value and Distribution Information**                         |
|--------------------------------------------------------------------------|
|                                                                     | **Class S** |
| **Net Asset Value:**
4/30/09                                             | $ 7.03 |
| 10/31/08                                                                 | $ 7.11 |
| **Distribution Information:**
Six Months as of 4/30/09:
Income Dividends | $ .07 |

| **Class S Lipper Rankings — Mixed-Asset Target Allocation Moderate Funds Category**as of 4/30/09 |
|--------------------------------------------------------------------------------------------------------|
| **Period**                                                                                             | **Rank** |   | **Number of Funds Tracked** | **Percentile Ranking (%)** |
| 1-Year                                                                                                 | 345 | of | 524 | 66 |
| 3-Year                                                                                                 | 268 | of | 385 | 70 |

**Source: Lipper Inc. Rankings are historical and do not guarantee future results. Rankings are based on total return with distributions reinvested. Rankings are for Class S shares; other share classes may vary.**

| **Growth of an Assumed $10,000 Investment**                                                                                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------|
| **[]DWS Balanced Fund — Class S**

**[]Russell 1000 Index+**

**[]Barclays Capital US Aggregate Bond Index++**

**[]Blended Index+++** |
|                                                                                                                                              |
|                                                                                                                                         |

| **Comparative Results**as of 4/30/09  |
|---------------------------------------|
| **DWS Balanced Fund**                 | **1-Year** | **3-Year** | **Life of Class*** |
| **Class S**                           | Growth of $10,000 | $7,572 | $8,137 | $8,857 |
| Average annual total return           | -24.28% | -6.64% | -2.89% |
| Russell 1000 Index+                   | Growth of $10,000 | $6,470 | $7,107 | $8,141 |
| Average annual total return           | -35.30% | -10.76% | -4.91% |
| Barclays Capital US Aggregate Index++ | Growth of $10,000 | $10,384 | $11,913 | $12,160 |
| Average annual total return           | 3.84% | 6.01% | 4.91% |
| Blended Index+++                      | Growth of $10,000 | $7,689 | $8,667 | $9,822 |
| Average annual total return           | -23.11% | -4.66% | -.44% |

*The growth of $10,000 is cumulative.*

**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 sales charges (loads), 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 for Class A, B and S shares; 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(November 1, 2008 to April 30,        2009).

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        do 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 during the period would be lower, by this amount.

| **Expenses and Value of a $1,000 Investment**for the six months ended April 30, 2009 |
|-------------------------------------------------------------------------------------------------------------------------|
| **Actual Fund Return**                                                                                                  | **Class A** | **Class B** | **Class C** | **Class S** | **Institutional Class** |
| Beginning Account Value 11/1/08                                                                                         | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 |
| Ending Account Value 4/30/09                                                                                            | $ 996.80 | $ 993.10 | $ 993.90 | $ 999.10 | $ 998.10 |
| Expenses Paid per $1,000*                                                                                               | $ 5.00 | $ 8.65 | $ 9.39 | $ 3.67 | $ 3.42 |
| **Hypothetical 5% Fund Return**                                                                                         | **Class A** | **Class B** | **Class C** | **Class S** | **Institutional Class** |
| Beginning Account Value 11/1/08                                                                                         | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 | $ 1,000.00 |
| Ending Account Value 4/30/09                                                                                            | $ 1,019.79 | $ 1,016.12 | $ 1,015.37 | $ 1,021.12 | $ 1,021.37 |
| Expenses Paid per $1,000*                                                                                               | $ 5.06 | $ 8.75 | $ 9.49 | $ 3.71 | $ 3.46 |

| **Annualized Expense Ratios** | **Class A** | **Class B** | **Class C** | **Class S** | **Institutional Class** |
|-------------------------------|-------------|-------------|-------------|-------------|-------------------------|
| DWS Balanced Fund             | 1.01%       | 1.75%       | 1.90%       | .74%        | .69%                    |

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

**Portfolio Management Review**

In the following interview, the portfolio management team discusses the stock and bond markets, portfolio management strategy and the resulting performance of DWS Balanced Fund for the six-month period ended April 30, 2009.

*The views expressed in the following discussion reflect those of the portfolio management team only through the end of the period of the report as stated on the cover. The management team's views are subject to change at any time based on market and other conditions and should not be construed as a recommendation. Past performance is no guarantee of future results. Current and future portfolio holdings are subject to        risk.*

**Q: How would you describe the market environment over the last six months?**

**A:**In December 2008, the National Bureau of Economic Research officially declared that the US economy had fallen into a recession that began in December 2007. With the economy and financial markets closely inter-related, the limited availability of credit and a lack of investor confidence hit asset prices, and the resulting loss of wealth contributed further to an economic slowdown.        There was a pronounced decline in the equity market and in essentially all asset classes that carry risk in the final months of 2008. Although the equity markets remained weak into early 2009, there were nascent signs of improvement in the economy and the credit markets. Risky bonds began to recover in the first quarter of 2009, and the US equity market rallied in March and April.

Despite the rally at the end of the period, essentially all equity indices posted negative returns for the six months ended April 30, 2009. The Russell 3000® Index, which is generally regarded as a good indicator of the broad US stock market, returned -7.46% for the period.1 For the same six-month period, returns of the MSCI World Index, which measures performance of world equity markets, was        -5.44%.2

In contrast to recent prior periods, bonds with more credit risk generally performed better than less risky bonds. The Barclays Capital US Aggregate Bond Index, which measures return of the high-quality US bond market as a whole, returned 7.74%, but the return of the Credit Suisse High Yield Index, which measures performance of the high-yield bond market, was 12.39%.3

**Q: How is DWS Balanced Fund managed?**

**A:**The fund is invested in many types of securities including common stocks, convertible securities, corporate bonds, US government bonds, mortgage and asset-backed securities, and certain derivatives.4 The fund normally invests approximately 60% of its net assets in common stocks and other equity securities and approximately 40% of its net assets in fixed-income        securities, including lower-quality high-yield debt securities. These percentages may fluctuate in response to changing market conditions, but the fund will at all times invest at least 25% of net assets in fixed-income senior securities. The fund may also invest in exchange-traded funds (ETFs).5 We allocate the fund's assets among various asset categories, such as US and foreign equity of any size and style (including emerging-market equity), and US and foreign        fixed income of any credit quality (including emerging markets bonds and inflation-indexed bonds). We review the allocation among the various asset categories periodically and adjust the allocation based on current or expected market conditions or to manage risk.

Within each asset category, we may select securities using several different strategies that utilize a variety of quantitative and qualitative techniques. Each strategy is managed by a team of portfolio managers who specialize in a particular asset category. The managers represent both fundamental and quantitative management styles. Fundamental analysis refers to the use of all available information about a possible investment, such        as earnings growth, management capability, industry trends, a company's financial strength and quantitative measures, to determine value. The quantitatively managed portions of the portfolio use mathematical techniques to analyze the financial characteristics of potential investments and compare alternative investments.

In addition, we expanded the Global Tactical Asset Allocation (GTAA) strategy to apply to the whole fund. Previously, this strategy was used only on the fixed-income portion of the portfolio, and it used only bond and currency assets. This strategy, which DWS Investments calls iGAP (integrated Global Alpha Platform), is designed to add value by benefiting from short-term mispricings within global equity, bond and currency markets.        This strategy is expected to have a low correlation to the fund's security holdings.6 It utilizes stock and bond futures and currency forwards to take long and short positions in different asset classes without having to make dramatic shifts in the stock, bond and cash allocations of the underlying strategies, which are maintained at the percentages specific to the fund and are rebalanced to these percentages each month.

Between February and April 2009, we transitioned the fund to its new strategic asset allocation, establishing positions in emerging markets, global small-cap equities and global inflation-protected Treasury securities. These changes were balanced by reductions in the exposure to US large cap, US small cap and international equities as well as investment-grade bonds. We increased the diversification of the        investment-grade bond portion of the portfolio by establishing an allocation to the iShares Barclay Aggregate Bond ETF.7

**Q: How did the fund perform over the six-month period?**

**A:**For the six months ended April 30, 2009, the return of DWS Balanced Fund (Class A shares) was -0.32%. (Returns are unadjusted for sales charges. If sales charges had been included, returns would have been lower. Past performance is no guarantee of future results. Please see pages 4 through 10 for complete performance information.) In        evaluating performance, we look at the fund's returns relative to indices that represent the various asset classes and we also calculate a blended benchmark that is representative of the combination of asset classes in which the fund invests. The return of the equity benchmark, the Russell 1000 Index, over this period was -7.39%. The fixed-income benchmark, the Barclays Capital US Aggregate Bond Index, returned 7.74% over this period. The blended benchmark return was 0.07% during the        six-month period.8

We also compare returns with those of the fund's Lipper peer group of Mixed-Asset Target Allocation Moderate Funds.9 For the six months ended April 30, 2009, the average return of this group was -0.62%.

**Q: What were the main determinants of the fund's performance?**

**A:**Over the six-month period, the underlying strategies as a group contributed to performance. Strategies that added significant value were the fundamental large-cap value strategy, the quantitative international equity strategy and the quantitative large-cap value strategy. iGAP also added value. Strategies that detracted were quantitative large-cap growth, quantitative small-cap core        equity, fundamental large-cap growth, fundamental international equity, core fixed-income and high-yield bonds.

The fundamental large-cap value sleeve benefited from both sector allocation and stock selection. A strategic overweight in the information technology sector and an underweight in the financial sector added to performance.10 Positions in General Electric Company, Taiwan Semiconductor Manufacturing Co. Ltd.,* Brocade Communications Systems, Inc. and Carnival Corporation also added to performance.

In the quantitative international sleeve, currency positions, specifically underweights in the Japanese yen and the British pound, added considerable value. Underweights in financial stocks, particularly in Japan and Great Britain, also added value, as did overweights in the telecommunications sector in New Zealand and the materials sector in Ireland.

In the quantitative large-cap value strategy, industry sectors that contributed to performance include materials, insurance, and food, beverages and tobacco. Positions that contributed include The Dow Chemical Company, Seagate Technology and Bank of America Corporation.

Within the iGAP overlay, fixed-income positioning was the major contributor, as performance benefited from exposure to bond markets as yields dropped. The relative value position in favor of the UK government bonds versus German government bonds also added to return. Short positions in the euro and the British pound also added value.

**Q: What were some of the areas of the portfolio that detracted from performance?**

**A:**In the quantitative large-cap growth sleeve, positioning in the capital goods, pharmaceuticals & biotechnology and energy sectors detracted from performance. At the security level, detractors included active weights in Baxter International Inc., Mariner Energy, Inc. and Schering-Plough Corporation.*

In the quantitative small-cap core equity sleeve, positioning in the commercial services & supplies, telecommunications services and diversified financials detracted from performance. At the security level, detractors included active weights in Live Nation, Inc.,* Oriental Financial Group Inc. and Dime Community Bancshares, Inc.

In the fundamental large-cap growth sleeve, sector allocation contributed to performance, while stock selection detracted, resulting in underperformance for this sleeve versus the Russell 1000 Growth Index. Significant negatives were stock selection in the energy and health care sectors, as well as overweights in these sectors. In the energy sector, performance was hurt by a position in Devon Energy Corporation, an independent        energy company engaged in oil and gas exploration, development and production; since Devon is not included in the Russell 1000 Growth Index, a drop in this stock was a significant detractor from performance relative to the benchmark. Other detractors included insurer AFLAC Inc. and service provider State Street Corporation, both in the financials sector; these positions were sold.

In the fundamental international sleeve, the main detractors were stock selection in Germany and Japan and a deep underweight to the consumer discretionary sector. Stock selection in energy, utilities and materials contributed to performance, as did an overweight to Finland and Russia.

In the core fixed-income sleeve, a focus on bonds that trade at a yield spread to Treasuries detracted significantly from performance early in the period, as the unprecedented flight to quality boosted Treasuries at the expense of other bond categories.11 In particular, the fund had substantial exposure to commercial mortgage-backed securities and non-agency residential mortgage-backed        securities, two asset classes that suffered historically poor performance late in 2008. While both segments rallied to a degree as the period progressed and investor sentiment with respect to the credit environment improved, this did not make up for the earlier losses. Near the end of the semiannual period, we adjusted the quality profile of the bond portfolio, taking advantage of the partial recovery in mortgage-backed securities and non-agency mortgages to dramatically reduce the        fund's exposure to both areas. We used the proceeds from these sales to increase holdings of more liquid investment-grade corporate bonds.

Although high-yield bonds performed very poorly in the early portion of the period, the asset class ultimately recovered to post a positive return for the six months ending April 30, 2009. The high-yield sleeve of the fund underperformed versus the Credit Suisse High Yield Index. Performance contributors included underweight allocations to the automotive and media/cable industry sectors. Detractors included positions in the        utilities and chemicals industries.

Additionally our allocation to the Vanguard Emerging Markets ETF, which we established at the end of February, contributed to performance as emerging markets were up over 14% in March and over 16% in April.12

**Q: Do you have other comments for shareholders?**

**A:**DWS Balanced Fund gives shareholders an opportunity to invest in a wide variety of domestic and international asset classes. We believe that the broad diversification offered by this fund is especially important in difficult market conditions such as those experienced over the last year. We will continue to review asset allocation and manager allocation periodically, and we        are always looking for opportunities to expand our asset coverage universe and increase diversification among managers and investment styles.

1*The Russell 3000 Index measures the performance of the 3,000 largest US companies based on total market capitalization, which represents approximately 98% of the investable US equity market. Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees of expenses. It is not possible to invest directly in an index.*2*The Morgan Stanley Capital International (MSCI) World Index is an unmanaged, capitalization-weighted measure of global stock markets including the US, Canada, Europe, Australia and the Far East. The Index is calculated using closing local market prices and translates into US dollars using the London close foreign exchange rates.*3*The Barclays Capital US Aggregate Bond Index is an unmanaged, market-value- weighted measure of Treasury issues, corporate bond issues and mortgage securities. The Credit Suisse High Yield Index is an unmanaged, unleveraged trader-priced portfolio constructed to mirror the global high-yield debt market.**Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses. It is not possible to invest directly into an index.*4*A derivative is a financial arrangement that derives its value from a traditional security, such as a stock or bond, asset or index.*5*An exchange-traded fund (ETF) is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.*6*Correlation is a measure of how closely two variables move together over time. A 1.0 equals perfect correlation. A -1.0 equals total negative correlation.*7*The iShares Barclays Aggregate Bond Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the total United States investment grade bond market as defined by the Barclays Capital US Aggregate Index.*8*The Blended Index, effective April 1, 2009, consists of the Barclays Capital US Aggregate Bond Index (27%), Russell 1000 Growth Index (20%), Russell 1000 Value Index (20%), MSCI EAFE Index (8%), Russell 2000 Index (6%), Merrill Lynch 3 Month Treasury Bill Index (5%), Barclays Capital Global Inflation-Linked Index (5%), Credit Suisse High Yield Index (3%), MSCI Emerging Markets Index (3%) and the MSCI        EAFE Small Cap Index (3%).**Index returns assume reinvestment of dividends and, unlike fund returns, do not reflect any fees or expenses.*9*The Lipper Mixed-Asset Target Allocation Moderate Funds category is a group of mutual funds that, by portfolio practice, maintain a mix of 0% to 60% in equity securities, with the remainder invested in bonds, cash and cash equivalents. Category returns assume reinvestment of all distributions. It is not possible to invest directly into a Lipper category.*10*"Underweight" means the portfolio holds a lower weighting in a given sector or security than the benchmark.*11*"Yield spread" refers to differences between yields on differing debt instruments, calculated by deducting the yield of one instrument from another. The higher the yield spread, the greater the difference between the yields offered by each instrument.*12*Vanguard Extended Market ETF seeks to track the performance of a benchmark index that measures the investment return of small- and mid-capitalization stocks.***Not held in the portfolio as of April 30, 2009.*

**Portfolio Summary**

| **Asset Allocation**(As a % of Investment Portfolio excluding Securities Lending Collateral) | **4/30/09** | **10/31/08** |
|----------------------------------------------------------------------------------------------|-------------|--------------|
|                                                                                         |        |         |
| Common Stocks                                                                                | 56%         | 56%          |
| Government & Agency Obligations                                                          | 14%         | 8%           |
| Mortgage-Backed Securities Pass-Throughs                                                     | 10%         | 8%           |
| Corporate Bonds                                                                              | 8%          | 8%           |
| Cash Equivalents                                                                             | 5%          | 10%          |
| Exchange-Traded Funds                                                                        | 5%          | —      |
| Commercial Mortgage-Backed Securities                                                        | 2%          | 3%           |
| Collateralized Mortgage Obligations                                                          | —     | 6%           |
| Asset Backed                                                                                 | —     | 1%           |
|                                                                                         | 100%        | 100%         |

| **Sector Diversification**(As a % of Equities, Corporate Bonds and Senior Bank Loans) | **4/30/09** | **10/31/08** |
|---------------------------------------------------------------------------------------|-------------|--------------|
|                                                                                  |        |         |
| Information Technology                                                                | 15%         | 12%          |
| Financials                                                                            | 13%         | 17%          |
| Health Care                                                                           | 13%         | 15%          |
| Energy                                                                                | 12%         | 12%          |
| Industrials                                                                           | 11%         | 9%           |
| Consumer Staples                                                                      | 10%         | 11%          |
| Consumer Discretionary                                                                | 9%          | 8%           |
| Materials                                                                             | 6%          | 5%           |
| Utilities                                                                             | 6%          | 6%           |
| Telecommunication Services                                                            | 5%          | 5%           |
|                                                                                  | 100%        | 100%         |

*Asset allocation and sector diversification are subject to change.*

| **Ten Largest Equity Holdings at April 30, 2009**(6.9% of Net Assets)                   |
|-----------------------------------------------------------------------------------------|
| **1. ExxonMobil Corp.**Explorer and producer of oil and gas                             | **1.2%** |
| **2. Microsoft Corp.**Developer of computer software                                    | **1.0%** |
| **3. Wal-Mart Stores, Inc.**Operator of discount stores and supercenters                | **0.7%** |
| **4. Apple, Inc.**Manufacturer of personal computers and communication solutions        | **0.7%** |
| **5. AT&T, Inc.**Provider of communications services                                | **0.7%** |
| **6. QUALCOMM, Inc.**Developer and manufacturer of communication systems                | **0.6%** |
| **7. Abbott Laboratories**Developer of health care products                             | **0.5%** |
| **8. PepsiCo, Inc.**Provider of soft drinks, snack foods and food services              | **0.5%** |
| **9. Chevron Corp.**Operator of petroleum exploration, delivery and refining facilities | **0.5%** |
| **10. Johnson & Johnson**Provider of health care products                           | **0.5%** |

*Portfolio holdings are subject to change.*

*For more complete details about the Fund's investment portfolio, see page 23. A quarterly Fact Sheet is available upon request. A complete list of the Fund's portfolio holdings is posted as of the month end on www.dws-investments.com on or about the 15th day of the following month. More frequent posting of portfolio holdings information may be made from time to time on        www.dws-investments.com. 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.

**Investment Portfolioas of April 30, 2009 (Unaudited)**

|                                                        | **Shares**      | **Value ($)** |
|-------------------------------------------------------------|-----------------|---------------|
|                                                        |            |
| **Common Stocks 55.2%**                                     |
| **Consumer Discretionary 4.6%**                             |
| **Auto Components 0.1%**                                    |
| Aisin Seiki Co., Ltd.                                       | 400             | 8,190         |
| Bridgestone Corp.                                           | 1,000           | 14,840        |
| Compagnie Generale des Etablissements Michelin "B"          | 332             | 16,940        |
| Denso Corp.                                                 | 700             | 16,473        |
| Magna International, Inc. "A"                               | 1,200           | 41,200        |
| Minth Group Ltd.                                            | 636,200         | 393,776       |
| Nokian Renkaat Oyj                                          | 302             | 4,789         |
| Rieter Holding AG (Registered)                              | 52              | 7,696         |
| Stanley Electric Co., Ltd.                                  | 600             | 8,456         |
| Toyota Industries Corp.                                     | 400             | 10,641        |
| WABCO Holdings, Inc.                                        | 18,900          | 302,211       |
| Xinyi Glass Holdings Co., Ltd.                              | 840,000         | 526,133       |
|                                                        | **1,351,345**   |
| **Automobiles 0.2%**                                        |
| Bayerische Motoren Werke (BMW) AG                           | 271             | 9,363         |
| Daimler AG (Registered)                                     | 14,151          | 504,321       |
| Fiat SpA*                                                   | 3,484           | 34,044        |
| Honda Motor Co., Ltd.                                       | 2,400           | 69,775        |
| Mazda Motor Corp.                                           | 3,000           | 7,415         |
| Mitsubishi Motors Corp.*                                    | 8,000           | 12,176        |
| Nissan Motor Co., Ltd.                                      | 3,000           | 15,601        |
| PSA Peugeot Citroen                                         | 354             | 8,128         |
| Suzuki Motor Corp.                                          | 600             | 11,243        |
| Toyota Motor Corp.                                          | 29,500          | 1,154,815     |
| Volkswagen AG                                               | 237             | 74,567        |
|                                                        | **1,901,448**   |
| **Distributors 0.2%**                                       |
| Genuine Parts Co.                                           | 52,984          | 1,799,337     |
| Li & Fung Ltd.                                          | 44,000          | 123,855       |
|                                                        | **1,923,192**   |
| **Diversified Consumer Services 0.1%**                      |
| Capella Education Co.*                                      | 5,300           | 272,314       |
| Coinstar, Inc.*                                             | 5,500           | 195,745       |
| Lincoln Educational Services Corp.*                         | 20,100          | 333,459       |
| Steiner Leisure Ltd.*                                       | 13,400          | 423,976       |
|                                                        | **1,225,494**   |
| **Hotels Restaurants & Leisure 1.2%**                   |
| Accor SA                                                    | 479             | 20,333        |
| Ambassadors Group, Inc.                                     | 2,700           | 32,940        |
| Ameristar Casinos, Inc.                                     | 9,900           | 203,148       |
| Burger King Holdings, Inc.                                  | 43,344          | 708,241       |
| Carnival Corp. (Units)                                      | 102,676         | 2,759,931     |
| Carnival PLC                                                | 469             | 12,914        |
| CEC Entertainment, Inc.*                                    | 12,700          | 386,842       |
| CKE Restaurants, Inc.                                       | 44,400          | 424,908       |
| Compass Group PLC                                           | 6,414           | 30,657        |
| Crown Ltd.                                                  | 56,196          | 280,697       |
| Darden Restaurants, Inc.                                    | 32,000          | 1,183,040     |
| InterContinental Hotel Group PLC                            | 796             | 7,565         |
| Ladbrokes PLC                                               | 2,594           | 8,918         |
| Lottomatica SpA*                                            | 972             | 20,023        |
| Marriott International, Inc. "A"                            | 48,900          | 1,152,084     |
| McDonald's Corp.                                            | 94,900          | 5,057,221     |
| Paddy Power PLC                                             | 19,597          | 360,220       |
| REXLot Holdings Ltd.*                                       | 6,200,000       | 363,463       |
| Shangri-La Asia Ltd.                                        | 30,000          | 44,399        |
| Sodexo                                                      | 268             | 12,809        |
| TABCORP Holding Ltd.                                        | 15,107          | 81,841        |
| Tatts Group Ltd.                                            | 32,545          | 65,516        |
| The Cheesecake Factory, Inc.*                               | 6,100           | 105,957       |
| Whitbread PLC                                               | 725             | 10,059        |
|                                                        | **13,333,726**  |
| **Household Durables 0.1%**                                 |
| Advanced Digital Broadcast Holdings SA (Registered)*        | 4,313           | 120,799       |
| Electrolux AB "B"*                                          | 2,600           | 29,320        |
| Fortune Brands, Inc.                                        | 13,100          | 514,961       |
| Garmin Ltd.                                                 | 2,100           | 52,899        |
| Husqvarna AB "B"*                                           | 2,800           | 13,684        |
| NVR, Inc.*                                                  | 500             | 252,685       |
| Panasonic Corp.                                             | 3,000           | 43,648        |
| Rational AG                                                 | 2,600           | 263,322       |
| Ryland Group, Inc.                                          | 9,000           | 186,390       |
| Sharp Corp.                                                 | 1,000           | 10,431        |
| Sony Corp.                                                  | 1,500           | 38,811        |
|                                                        | **1,526,950**   |
| **Internet & Catalog Retail 0.1%**                      |
| Amazon.com, Inc.*                                           | 13,000          | 1,046,760     |
| Home Retail Group PLC                                       | 2,228           | 8,181         |
| HSN, Inc.*                                                  | 7,900           | 54,589        |
| Netflix, Inc.*                                              | 11,600          | 525,596       |
|                                                        | **1,635,126**   |
| **Leisure Equipment & Products 0.1%**                   |
| Hasbro, Inc.                                                | 12,500          | 333,250       |
| Nikon Corp.                                                 | 1,000           | 13,217        |
| Smith & Wesson Holding Corp.*                           | 57,500          | 412,275       |
|                                                        | **758,742**     |
| **Media 1.0%**                                              |
| Aegis Group PLC                                             | 143,791         | 193,260       |
| British Sky Broadcasting Group PLC                          | 4,143           | 29,505        |
| CBS Corp. "B"                                               | 68,300          | 480,832       |
| Comcast Corp. "A"                                           | 148,100         | 2,289,626     |
| DENTSU, Inc.                                                | 600             | 10,995        |
| Fairfax Media Ltd.                                          | 40,770          | 34,989        |
| Gestevision Telecinco SA                                    | 1,501           | 14,091        |
| ITV PLC                                                     | 10,128          | 4,703         |
| JC Decaux SA                                                | 19,430          | 277,678       |
| Lagardere SCA                                               | 340             | 10,645        |
| Liberty Media Corp. — Entertainment "A"*              | 12,200          | 297,070       |
| Marvel Entertainment, Inc.*                                 | 16,200          | 483,408       |
| McGraw-Hill Companies, Inc.                                 | 12,900          | 388,935       |
| Mediacom Communications Corp. "A"*                          | 61,300          | 348,797       |
| Mediaset SpA                                                | 20,694          | 116,195       |
| Modern Times Group MTG AB "B"                               | 525             | 14,241        |
| National CineMedia, Inc.                                    | 1,700           | 24,701        |
| Pearson PLC                                                 | 3,225           | 33,564        |
| Publicis Groupe                                             | 417             | 12,789        |
| Reed Elsevier NV                                            | 11,797          | 129,750       |
| Reed Elsevier PLC                                           | 6,115           | 45,398        |
| SES "A" (FDR)                                               | 606             | 10,919        |
| Shaw Communications, Inc. "B"                               | 2,600           | 40,308        |
| Singapore Press Holdings Ltd.                               | 268,000         | 523,005       |
| Thomson Reuters Corp.                                       | 5,800           | 162,826       |
| Thomson Reuters PLC                                         | 923             | 23,867        |
| Time Warner Cable, Inc.                                     | 95,148          | 3,066,620     |
| Time Warner, Inc.                                           | 68,133          | 1,487,343     |
| United Business Media Ltd.                                  | 1,276           | 8,657         |
| Vertis Holdings, Inc.*                                      | 5,114           | 0             |
| Vivendi                                                     | 2,506           | 67,561        |
| Wolters Kluwer NV                                           | 6,183           | 101,895       |
| WPP PLC                                                     | 4,008           | 27,413        |
| Yellow Pages Income Fund (Units)                            | 2,800           | 13,356        |
|                                                        | **10,774,942**  |
| **Multiline Retail 0.3%**                                   |
| Canadian Tire Corp., Ltd. "A"                               | 1,100           | 46,552        |
| Kohl's Corp.*                                               | 42,790          | 1,940,527     |
| Macy's, Inc.                                                | 31,900          | 436,392       |
| Marks & Spencer Group PLC                               | 94,627          | 470,667       |
| Next PLC                                                    | 536             | 12,822        |
| PPR                                                         | 179             | 13,681        |
|                                                        | **2,920,641**   |
| **Specialty Retail 0.7%**                                   |
| Advance Auto Parts, Inc.                                    | 12,100          | 529,375       |
| Aeropostale, Inc.*                                          | 13,500          | 458,595       |
| American Eagle Outfitters, Inc.                             | 23,500          | 348,270       |
| AnnTaylor Stores Corp.*                                     | 27,700          | 204,703       |
| Asbury Automotive Group, Inc.                               | 16,500          | 159,555       |
| Cato Corp. "A"                                              | 22,000          | 422,840       |
| Coldwater Creek, Inc.*                                      | 46,900          | 161,805       |
| Dress Barn, Inc.*                                           | 18,200          | 275,548       |
| Esprit Holdings Ltd.                                        | 21,400          | 131,175       |
| Fast Retailing Co., Ltd.                                    | 100             | 10,461        |
| Foot Locker, Inc.                                           | 31,000          | 368,590       |
| Hennes & Mauritz AB "B"                                 | 17,258          | 771,554       |
| Hot Topic, Inc.*                                            | 12,200          | 149,328       |
| Industria de Diseno Textil SA                               | 5,458           | 232,912       |
| Kingfisher PLC                                              | 6,218           | 16,928        |
| Nitori Co., Ltd.                                            | 3,300           | 185,570       |
| Rent-A-Center, Inc.*                                        | 26,000          | 500,500       |
| Ross Stores, Inc.                                           | 8,300           | 314,902       |
| The Buckle, Inc.                                            | 12,550          | 468,994       |
| The Gap, Inc.                                               | 29,700          | 461,538       |
| Tractor Supply Co.*                                         | 12,200          | 492,636       |
| Urban Outfitters, Inc.*                                     | 15,900          | 309,891       |
| Yamada Denki Co., Ltd.                                      | 150             | 6,921         |
|                                                        | **6,982,591**   |
| **Textiles, Apparel & Luxury Goods 0.5%**               |
| Adidas AG                                                   | 410             | 15,473        |
| Billabong International Ltd.                                | 772             | 5,875         |
| Burberry Group PLC                                          | 1,345           | 8,008         |
| Carter's, Inc.*                                             | 43,800          | 936,444       |
| Christian Dior SA                                           | 332             | 22,300        |
| Compagnie Financiere Richemont SA "A"                       | 9,765           | 174,899       |
| Deckers Outdoor Corp.*                                      | 3,800           | 214,776       |
| Fuqi International, Inc.*                                   | 8,900           | 55,892        |
| Gildan Activewear, Inc.*                                    | 1,800           | 20,605        |
| Hermes International                                        | 172             | 22,740        |
| Luxottica Group SpA                                         | 1,559           | 28,772        |
| LVMH Moet Hennessy Louis Vuitton SA                         | 524             | 39,617        |
| NIKE, Inc. "B"                                              | 50,200          | 2,633,994     |
| Steven Madden Ltd.*                                         | 14,700          | 432,474       |
| Swatch Group AG (Bearer)                                    | 627             | 86,966        |
| Swatch Group AG (Registered)                                | 1,215           | 35,060        |
| Timberland Co. "A"*                                         | 9,100           | 147,784       |
|                                                        | **4,881,679**   |
| **Consumer Staples 5.4%**                                   |
| **Beverages 0.8%**                                          |
| Anheuser-Busch InBev NV                                     | 5,043           | 153,923       |
| Asahi Breweries Ltd.                                        | 1,500           | 18,870        |
| C&C Group PLC                                           | 168,933         | 395,344       |
| Carlsberg AS "B"                                            | 22,338          | 1,077,968     |
| Central European Distribution Corp.*                        | 10,600          | 237,440       |
| Coca-Cola Amatil Ltd.                                       | 2,452           | 16,284        |
| Coca-Cola Co.                                               | 4,000           | 172,200       |
| Coca-Cola Enterprises, Inc.                                 | 35,300          | 602,218       |
| Coca-Cola Hellenic Bottling Co. SA                          | 14,100          | 225,223       |
| Diageo PLC                                                  | 6,131           | 73,590        |
| Foster's Group Ltd.                                         | 14,875          | 56,964        |
| Heineken NV                                                 | 918             | 27,300        |
| Kirin Holdings Co., Ltd.                                    | 4,000           | 44,014        |
| National Beverage Corp.*                                    | 3,700           | 38,961        |
| Pepsi Bottling Group, Inc.                                  | 5,600           | 175,112       |
| PepsiCo, Inc.                                               | 108,284         | 5,388,212     |
| Pernod Ricard SA                                            | 706             | 41,637        |
| SABMiller PLC                                               | 2,214           | 37,149        |
|                                                        | **8,782,409**   |
| **Food & Staples Retailing 1.8%**                       |
| AEON Co., Ltd.                                              | 3,700           | 28,885        |
| Carrefour SA*                                               | 2,304           | 93,178        |
| Casino Guichard-Perrachon SA                                | 260             | 16,288        |
| Colruyt SA                                                  | 158             | 35,978        |
| CVS Caremark Corp.                                          | 89,930          | 2,857,975     |
| Delhaize Group                                              | 718             | 48,318        |
| George Weston Ltd.                                          | 800             | 39,708        |
| J Sainsbury PLC                                             | 4,178           | 20,315        |
| Kesko Oyj "B"                                               | 423             | 10,990        |
| Koninklijke Ahold NV                                        | 6,132           | 67,464        |
| Kroger Co.                                                  | 63,688          | 1,376,935     |
| Lawson, Inc.                                                | 300             | 11,633        |
| Loblaw Companies Ltd.                                       | 1,800           | 48,496        |
| Metro AG                                                    | 2,692           | 114,442       |
| Metro, Inc. "A"                                             | 1,400           | 43,409        |
| Pantry, Inc.*                                               | 17,700          | 418,074       |
| Safeway, Inc.                                               | 16,100          | 317,975       |
| Seven & I Holdings Co., Ltd.                            | 24,600          | 555,965       |
| Shoppers Drug Mart Corp.                                    | 2,200           | 79,553        |
| SUPERVALU, Inc.                                             | 39,500          | 645,825       |
| Sysco Corp.                                                 | 132,400         | 3,088,892     |
| Tesco PLC                                                   | 18,684          | 92,759        |
| Wal-Mart Stores, Inc.                                       | 155,100         | 7,817,040     |
| Walgreen Co.                                                | 11,600          | 364,588       |
| Weis Markets, Inc.                                          | 4,200           | 155,358       |
| Wesfarmers Ltd.                                             | 4,643           | 76,233        |
| Wesfarmers Ltd. (PPS)                                       | 978             | 16,040        |
| William Morrison Supermarkets PLC                           | 5,191           | 18,861        |
| Woolworths Ltd.                                             | 5,367           | 104,146       |
|                                                        | **18,565,323**  |
| **Food Products 1.0%**                                      |
| Ajinomoto Co., Inc.                                         | 4,000           | 29,377        |
| Archer-Daniels-Midland Co.                                  | 76,200          | 1,876,044     |
| Bunge Ltd.                                                  | 27,300          | 1,310,673     |
| Cadbury PLC                                                 | 3,264           | 24,461        |
| Danisco AS                                                  | 2,755           | 90,350        |
| Danone SA                                                   | 1,704           | 81,225        |
| Darling International, Inc.*                                | 38,800          | 221,936       |
| Diamond Foods, Inc.                                         | 14,600          | 382,374       |
| General Mills, Inc.                                         | 23,974          | 1,215,242     |
| Green Mountain Coffee Roasters, Inc.*                       | 7,100           | 513,401       |
| J & J Snack Foods Corp.                                 | 11,100          | 430,236       |
| Kellogg Co.                                                 | 43,694          | 1,839,954     |
| Kerry Group PLC "A"                                         | 11,541          | 236,651       |
| Kraft Foods, Inc. "A"                                       | 35,377          | 827,822       |
| Lance, Inc.                                                 | 9,000           | 208,440       |
| Nestle SA (Registered)                                      | 36,131          | 1,175,094     |
| Nissin Foods Holdings Co., Ltd.                             | 500             | 13,517        |
| Parmalat SpA                                                | 9,453           | 18,830        |
| Saputo, Inc.                                                | 3,200           | 58,460        |
| SunOpta, Inc.*                                              | 119,200         | 214,560       |
| Tate & Lyle PLC                                         | 1,463           | 5,941         |
| Unilever NV (CVA)                                           | 9,259           | 183,098       |
| Unilever PLC                                                | 3,062           | 59,761        |
| Wilmar International Ltd.                                   | 4,000           | 9,581         |
| Yakult Honsha Co., Ltd.                                     | 700             | 11,964        |
|                                                        | **11,038,992**  |
| **Household Products 0.8%**                                 |
| Central Garden & Pet Co. "A"*                           | 5,700           | 51,699        |
| Colgate-Palmolive Co.                                       | 47,340          | 2,793,060     |
| Energizer Holdings, Inc.*                                   | 25,900          | 1,484,070     |
| Henkel AG & Co. KGaA                                    | 2,258           | 55,676        |
| Kao Corp.                                                   | 2,000           | 37,625        |
| Kimberly-Clark Corp.                                        | 46,700          | 2,294,838     |
| Procter & Gamble Co.                                    | 32,350          | 1,599,384     |
| Reckitt Benckiser Group PLC                                 | 1,071           | 42,178        |
|                                                        | **8,358,530**   |
| **Personal Products 0.1%**                                  |
| Beiersdorf AG                                               | 1,967           | 80,794        |
| Chattem, Inc.*                                              | 4,500           | 247,095       |
| China Sky One Medical, Inc.*                                | 26,900          | 379,559       |
| L'Oreal SA                                                  | 1,014           | 72,390        |
| Shiseido Co., Ltd.                                          | 2,000           | 35,140        |
|                                                        | **814,978**     |
| **Tobacco 0.9%**                                            |
| Altria Group, Inc.                                          | 208,578         | 3,406,079     |
| British American Tobacco PLC                                | 5,511           | 133,729       |
| Imperial Tobacco Group PLC                                  | 30,543          | 698,322       |
| Japan Tobacco, Inc.                                         | 193             | 481,856       |
| Lorillard, Inc.                                             | 15,500          | 978,515       |
| Philip Morris International, Inc.                           | 100,176         | 3,626,371     |
| Reynolds American, Inc.                                     | 7,600           | 288,648       |
| Swedish Match AB                                            | 19,204          | 274,790       |
|                                                        | **9,888,310**   |
| **Energy 6.3%**                                             |
| **Energy Equipment & Services 1.9%**                    |
| Acergy SA                                                   | 1,100           | 8,525         |
| Aker Solutions ASA                                          | 2,700           | 16,504        |
| AMEC PLC                                                    | 73,804          | 672,842       |
| Baker Hughes, Inc.                                          | 19,162          | 681,784       |
| Cameron International Corp.*                                | 64,800          | 1,657,584     |
| Compagnie Generale de Geophysique-Veritas*                  | 379             | 5,469         |
| Dresser-Rand Group, Inc.*                                   | 22,900          | 564,027       |
| ENSCO International, Inc.                                   | 39,528          | 1,117,852     |
| Fugro NV (CVA)                                              | 2,890           | 103,258       |
| Halliburton Co.                                             | 91,786          | 1,855,913     |
| John Wood Group PLC                                         | 61,549          | 215,414       |
| Key Energy Services, Inc.*                                  | 68,300          | 299,837       |
| Lamprell PLC                                                | 118,259         | 165,998       |
| Noble Corp.                                                 | 38,210          | 1,044,279     |
| Oil States International, Inc.*                             | 35,900          | 678,510       |
| Patterson-UTI Energy, Inc.                                  | 53,741          | 683,048       |
| Prosafe Production Public Ltd.*                             | 75,000          | 135,945       |
| ProSafe SE*                                                 | 49,480          | 205,779       |
| Rowan Companies, Inc.                                       | 79,400          | 1,239,434     |
| Saipem SpA                                                  | 43,527          | 935,958       |
| SBM Offshore NV                                             | 41,930          | 674,962       |
| Schlumberger Ltd.                                           | 21,750          | 1,065,533     |
| SEACOR Holdings, Inc.*                                      | 3,200           | 210,304       |
| Seadrill Ltd.                                               | 1,500           | 16,240        |
| Shinko Plantech Co., Ltd.                                   | 57,000          | 377,025       |
| Technip SA                                                  | 239             | 10,239        |
| Tecnicas Reunidas SA                                        | 7,541           | 265,953       |
| Tenaris SA                                                  | 1,045           | 13,181        |
| Tidewater, Inc.                                             | 11,100          | 480,075       |
| Transocean Ltd.*                                            | 60,004          | 4,049,070     |
| Unit Corp.*                                                 | 9,300           | 253,797       |
| Willbros Group, Inc.*                                       | 37,500          | 429,750       |
| WorleyParsons Ltd.                                          | 832             | 11,086        |
|                                                        | **20,145,175**  |
| **Oil, Gas & Consumable Fuels 4.4%**                    |
| Alpha Natural Resources, Inc.*                              | 16,200          | 331,776       |
| Apache Corp.                                                | 5,900           | 429,874       |
| BG Group PLC                                                | 63,353          | 1,018,660     |
| BP PLC                                                      | 14,659          | 103,946       |
| Cameco Corp.                                                | 500             | 11,481        |
| Canadian Natural Resources Ltd.                             | 600             | 27,659        |
| Canadian Oil Sands Trust (Units)                            | 300             | 6,195         |
| Chevron Corp.                                               | 81,350          | 5,377,235     |
| Cimarex Energy Co.                                          | 7,300           | 196,370       |
| Clayton Williams Energy, Inc.*                              | 10,500          | 315,315       |
| ConocoPhillips                                              | 116,266         | 4,766,906     |
| CVR Energy, Inc.*                                           | 9,800           | 72,128        |
| Delek US Holdings, Inc.                                     | 39,600          | 406,692       |
| Devon Energy Corp.                                          | 17,960          | 931,226       |
| Enbridge, Inc.                                              | 400             | 12,352        |
| EnCana Corp.                                                | 800             | 36,665        |
| Encore Acquisition Co.*                                     | 17,500          | 510,825       |
| Eni SpA                                                     | 8,884           | 192,532       |
| EOG Resources, Inc.                                         | 20,630          | 1,309,592     |
| EXCO Resources, Inc.*                                       | 30,000          | 353,400       |
| ExxonMobil Corp.                                            | 199,474         | 13,298,932    |
| Frontline Ltd.                                              | 240             | 4,814         |
| Gazprom (ADR)                                               | 47,950          | 842,474       |
| Husky Energy, Inc.                                          | 400             | 9,691         |
| Imperial Oil Ltd.                                           | 1,000           | 35,741        |
| INPEX Corp.                                                 | 3               | 18,800        |
| Marathon Oil Corp.                                          | 56,892          | 1,689,692     |
| McMoRan Exploration Co.*                                    | 44,500          | 244,305       |
| Murphy Oil Corp.                                            | 36,300          | 1,731,873     |
| Neste Oil Oyj                                               | 358             | 4,633         |
| Nexen, Inc.                                                 | 61,886          | 1,178,287     |
| Nippon Mining Holdings, Inc.                                | 11,000          | 50,149        |
| Nippon Oil Corp.                                            | 2,000           | 10,421        |
| Noble Energy, Inc.                                          | 28,027          | 1,590,532     |
| Occidental Petroleum Corp.                                  | 58,800          | 3,309,852     |
| OMV AG                                                      | 5,563           | 173,122       |
| Origin Energy Ltd.                                          | 6,248           | 74,050        |
| Petro-Canada                                                | 600             | 18,936        |
| Petroleo Brasileiro SA (ADR)                                | 18,900          | 634,473       |
| Repsol YPF SA                                               | 23,817          | 453,274       |
| Royal Dutch Shell PLC "A"                                   | 2,896           | 67,098        |
| Royal Dutch Shell PLC "B"                                   | 2,321           | 53,233        |
| Santos Ltd.                                                 | 4,665           | 55,785        |
| StatoilHydro ASA                                            | 48,200          | 902,714       |
| Suncor Energy, Inc.                                         | 61,707          | 1,552,888     |
| Talisman Energy, Inc.                                       | 800             | 10,023        |
| TonenGeneral Sekiyu KK                                      | 4,000           | 37,868        |
| Total SA                                                    | 15,731          | 786,677       |
| Tullow Oil PLC                                              | 1,051           | 12,409        |
| Ultra Petroleum Corp.*                                      | 25,300          | 1,082,840     |
| Venoco, Inc.*                                               | 55,600          | 242,972       |
| Western Refining, Inc.*                                     | 24,700          | 310,973       |
| Woodside Petroleum Ltd.                                     | 2,447           | 67,977        |
| World Fuel Services Corp.                                   | 12,600          | 480,438       |
|                                                        | **47,448,775**  |
| **Financials 6.3%**                                         |
| **Capital Markets 1.2%**                                    |
| Ashmore Group PLC                                           | 146,387         | 488,605       |
| Bank of New York Mellon Corp.                               | 43,400          | 1,105,832     |
| BGC Partners, Inc. "A"                                      | 28,100          | 72,779        |
| Calamos Asset Management, Inc. "A"                          | 1,800           | 20,538        |
| Charles Schwab Corp.                                        | 41,200          | 761,376       |
| Credit Suisse Group AG (Registered)                         | 24,833          | 949,022       |
| Daiwa Securities Group, Inc.                                | 3,000           | 15,611        |
| Greenhill & Co., Inc.                                   | 6,944           | 538,368       |
| IGM Financial, Inc.                                         | 400             | 11,923        |
| Jefferies Group, Inc.                                       | 18,100          | 354,217       |
| Julius Baer Holding AG (Registered)                         | 852             | 27,944        |
| Knight Capital Group, Inc. "A"*                             | 5,000           | 77,450        |
| LaBranche & Co., Inc.*                                  | 17,600          | 73,568        |
| Lazard Ltd. "A"                                             | 16,700          | 455,910       |
| Macquarie Group Ltd.                                        | 1,135           | 27,470        |
| Man Group PLC                                               | 1,445           | 5,328         |
| Mediobanca SpA                                              | 2,189           | 25,217        |
| Nomura Holdings, Inc.                                       | 4,000           | 23,987        |
| Northern Trust Corp.                                        | 19,196          | 1,043,495     |
| Partners Group Holding AG*                                  | 4,300           | 375,557       |
| Penson Worldwide, Inc.*                                     | 10,600          | 107,484       |
| Prospect Capital Corp.                                      | 12,924          | 117,221       |
| Reinet Investments SCA*                                     | 678             | 7,146         |
| T. Rowe Price Group, Inc.                                   | 46,800          | 1,802,736     |
| The Goldman Sachs Group, Inc.                               | 19,900          | 2,557,150     |
| UBS AG (Registered)*                                        | 80,741          | 1,110,638     |
| Waddell & Reed Financial, Inc. "A"                      | 22,800          | 510,948       |
|                                                        | **12,667,520**  |
| **Commercial Banks 1.5%**                                   |
| 1st Source Corp.                                            | 4,400           | 86,416        |
| Allied Irish Banks PLC                                      | 20,844          | 25,061        |
| Anglo Irish Bank Corp. PLC                                  | 36,330          | 10,431        |
| Australia & New Zealand Banking Group Ltd.              | 2,816           | 32,416        |
| Banca Carige SpA                                            | 3,091           | 11,311        |
| Banca Monte dei Paschi di Siena SpA                         | 14,444          | 23,131        |
| Banco Bilbao Vizcaya Argentaria SA                          | 5,730           | 61,769        |
| Banco Comercial Portugues SA (Registered)                   | 247,779         | 230,612       |
| Banco de Sabadell SA                                        | 2,031           | 11,691        |
| Banco Espirito Santo SA (Registered)                        | 11,498          | 56,401        |
| Banco Latinoamericano de Exportaciones SA "E"               | 34,500          | 424,350       |
| Banco Popolare Societa Cooperativa                          | 4,446           | 29,019        |
| Banco Popular Espanol SA                                    | 1,775           | 14,547        |
| Banco Santander SA                                          | 100,560         | 949,344       |
| Bank of East Asia Ltd.                                      | 6,600           | 15,711        |
| Bank of Montreal                                            | 900             | 29,791        |
| Bank of Nova Scotia                                         | 1,700           | 48,352        |
| Barclays PLC                                                | 11,573          | 47,089        |
| BNP Paribas                                                 | 14,026          | 738,484       |
| BOC Hong Kong (Holdings) Ltd.                               | 15,500          | 21,977        |
| Canadian Imperial Bank of Commerce                          | 600             | 26,935        |
| Cardinal Financial Corp.                                    | 14,600          | 114,610       |
| Chuo Mitsui Trust Holdings, Inc.                            | 2,000           | 6,541         |
| Commonwealth Bank of Australia                              | 1,927           | 48,996        |
| Credit Agricole SA                                          | 3,358           | 48,710        |
| Cullen/Frost Bankers, Inc.                                  | 10,788          | 508,007       |
| Danske Bank AS*                                             | 11,804          | 128,782       |
| DBS Group Holdings Ltd.                                     | 9,000           | 57,388        |
| Deutsche Postbank AG                                        | 1,088           | 23,163        |
| Dexia SA                                                    | 14,077          | 68,386        |
| DnB NOR ASA                                                 | 128,600         | 801,933       |
| Erste Group Bank AG                                         | 7,095           | 148,364       |
| Governor and Co. of the Bank of Ireland                     | 19,082          | 19,058        |
| Home Bancshares, Inc.                                       | 2,400           | 52,920        |
| HSBC Holdings PLC                                           | 174,841         | 1,242,004     |
| Industrial & Commercial Bank of China Ltd. "H"          | 1,444,000       | 824,743       |
| Intesa Sanpaolo                                             | 27,240          | 86,286        |
| Intesa Sanpaolo (RSP)                                       | 11,549          | 25,538        |
| Jyske Bank AS (Registered)*                                 | 1,200           | 30,850        |
| KBC Groep NV                                                | 3,201           | 70,214        |
| Lloyds Banking Group PLC                                    | 7,908           | 12,892        |
| M&T Bank Corp.                                          | 11,030          | 578,523       |
| Marshall & Ilsley Corp.                                 | 125,500         | 725,390       |
| Mitsubishi UFJ Financial Group, Inc.                        | 16,900          | 92,045        |
| Mizuho Financial Group, Inc.                                | 18,000          | 37,811        |
| Mizuho Trust & Banking Co., Ltd.*                       | 10,000          | 10,373        |
| National Australia Bank Ltd.                                | 2,506           | 37,444        |
| National Bank of Canada                                     | 400             | 14,632        |
| Natixis                                                     | 14,514          | 32,977        |
| NBT Bancorp., Inc.                                          | 18,700          | 442,816       |
| Nordea Bank AB                                              | 18,166          | 135,091       |
| Oriental Financial Group, Inc.                              | 46,900          | 435,701       |
| Oversea-Chinese Banking Corp., Ltd.                         | 24,000          | 94,484        |
| Park National Corp.                                         | 6,800           | 455,260       |
| Peoples Bancorp., Inc.                                      | 1,400           | 23,198        |
| PNC Financial Services Group, Inc.                          | 6,800           | 269,960       |
| PrivateBancorp., Inc.                                       | 20,500          | 415,125       |
| Prosperity Bancshares, Inc.                                 | 13,800          | 383,226       |
| Raiffeisen International Bank-Holding AG                    | 3,744           | 128,678       |
| Regions Financial Corp.                                     | 70,700          | 317,443       |
| Resona Holdings, Inc.                                       | 900             | 11,978        |
| Royal Bank of Canada                                        | 2,200           | 77,985        |
| Royal Bank of Scotland Group PLC                            | 10,314          | 6,272         |
| Santander BanCorp.                                          | 14,700          | 98,490        |
| Shinsei Bank Ltd.*                                          | 9,000           | 11,807        |
| Signature Bank*                                             | 16,400          | 445,916       |
| Skandinaviska Enskilda Banken AB "A"*                       | 5,129           | 20,008        |
| Societe Generale                                            | 998             | 50,499        |
| Southside Bancshares, Inc.                                  | 12,000          | 255,600       |
| Standard Chartered PLC                                      | 3,073           | 47,257        |
| Sumitomo Mitsui Financial Group, Inc.                       | 1,300           | 44,991        |
| Sumitomo Trust & Banking Co., Ltd.                      | 3,000           | 12,501        |
| SunTrust Banks, Inc.                                        | 62,100          | 896,724       |
| Svenska Handelsbanken AB "A"                                | 2,800           | 48,875        |
| Swedbank AB "A"*                                            | 4,746           | 26,841        |
| The Bank of Yokohama Ltd.                                   | 2,000           | 8,462         |
| The Chiba Bank Ltd.                                         | 2,000           | 9,885         |
| Tompkins Financial Corp.                                    | 4,400           | 185,460       |
| Toronto-Dominion Bank                                       | 900             | 35,523        |
| UBI Banca-Unione di Banche Italiane ScpA                    | 2,397           | 32,953        |
| UMB Financial Corp.                                         | 8,700           | 398,199       |
| UniCredit SpA                                               | 40,062          | 96,925        |
| United Overseas Bank Ltd.                                   | 10,000          | 76,976        |
| Wells Fargo & Co.                                       | 53,700          | 1,074,537     |
| Westpac Banking Corp.                                       | 5,280           | 73,478        |
| Wing Hang Bank Ltd.                                         | 74,500          | 443,704       |
|                                                        | **16,336,246**  |
| **Consumer Finance 0.1%**                                   |
| AEON Credit Service Co., Ltd.                               | 21,000          | 237,806       |
| Credit Saison Co., Ltd.                                     | 600             | 6,689         |
| Nelnet, Inc. "A"*                                           | 42,400          | 255,672       |
| ORIX Corp.                                                  | 160             | 7,548         |
|                                                        | **507,715**     |
| **Diversified Financial Services 1.0%**                     |
| ASX Ltd.                                                    | 696             | 16,514        |
| Bank of America Corp.                                       | 236,700         | 2,113,731     |
| Citigroup, Inc.                                             | 137,900         | 420,595       |
| CME Group, Inc.                                             | 12,087          | 2,675,457     |
| Compagnie Nationale a Portefeuille                          | 730             | 35,247        |
| Criteria Caixacorp SA                                       | 3,269           | 12,299        |
| Deutsche Boerse AG                                          | 676             | 49,898        |
| Eurazeo                                                     | 782             | 31,868        |
| Financiere Marc de Lacharriere SA                           | 6,997           | 331,193       |
| Fortis                                                      | 15,311          | 37,919        |
| Groupe Bruxelles Lambert SA                                 | 1,335           | 96,356        |
| Hellenic Exchanges SA                                       | 25,800          | 225,599       |
| Hong Kong Exchanges & Clearing Ltd.                     | 4,000           | 45,972        |
| Investor AB "B"                                             | 2,110           | 30,505        |
| JPMorgan Chase & Co.                                    | 123,014         | 4,059,462     |
| Medallion Financial Corp.                                   | 4,600           | 33,902        |
| Mitsubishi UFJ Lease & Finance Co., Ltd.                | 310             | 7,166         |
| NYSE Euronext                                               | 28,413          | 658,329       |
| Singapore Exchange Ltd.                                     | 9,000           | 37,791        |
|                                                        | **10,919,803**  |
| **Insurance 1.7%**                                          |
| Aegon NV                                                    | 16,556          | 84,130        |
| Alleanza Assicurazioni SpA                                  | 2,400           | 16,060        |
| Alleghany Corp.                                             | 0               | 61            |
| Allianz SE (Registered)                                     | 9,924           | 910,546       |
| Allied World Assurance Co. Holdings Ltd.                    | 12,200          | 453,108       |
| Allstate Corp.                                              | 44,600          | 1,040,518     |
| American Equity Investment Life Holding Co.                 | 54,900          | 309,087       |
| American Physicians Capital, Inc.                           | 900             | 37,494        |
| AMP Ltd.                                                    | 3,058           | 11,494        |
| Aon Corp.                                                   | 26,096          | 1,101,251     |
| Assicurazioni Generali SpA                                  | 3,475           | 70,595        |
| Assurant, Inc.                                              | 46,644          | 1,139,979     |
| Aviva PLC                                                   | 1,867           | 8,520         |
| AXA Asia Pacific Holdings Ltd.                              | 1,676           | 4,763         |
| AXA SA*                                                     | 59,407          | 989,924       |
| Baloise Holding AG (Registered)                             | 394             | 28,838        |
| China Life Insurance Co., Ltd. "H"                          | 258,700         | 909,399       |
| Chubb Corp.                                                 | 11,933          | 464,790       |
| Cincinnati Financial Corp.                                  | 21,158          | 506,734       |
| CNP Assurances                                              | 210             | 16,584        |
| Crawford & Co. "B"*                                     | 2,000           | 11,900        |
| Enstar Group Ltd.*                                          | 2,400           | 171,216       |
| First American Corp.                                        | 28,730          | 806,738       |
| Great-West Lifeco, Inc.                                     | 500             | 8,585         |
| Hallmark Financial Services, Inc.*                          | 7,400           | 49,728        |
| Hannover Rueckversicherung AG (Registered)                  | 234             | 7,599         |
| HCC Insurance Holdings, Inc.                                | 19,536          | 467,301       |
| Infinity Property & Casualty Corp.                      | 1,700           | 59,908        |
| Insurance Australia Group Ltd.                              | 3,370           | 8,494         |
| Irish Life & Permanent PLC                              | 5,295           | 13,245        |
| Legal & General Group PLC                               | 6,916           | 5,907         |
| Loews Corp.                                                 | 46,900          | 1,167,341     |
| Maiden Holdings Ltd.                                        | 20,400          | 92,004        |
| Manulife Financial Corp.                                    | 2,500           | 42,571        |
| Mapfre SA                                                   | 4,023           | 11,489        |
| MetLife, Inc.                                               | 35,335          | 1,051,216     |
| Mitsui Sumitomo Insurance Group Holdings, Inc.              | 600             | 16,341        |
| Muenchener Rueckversicherungs-Gesellschaft AG (Registered)  | 2,796           | 385,927       |
| National Financial Partners Corp.                           | 2,200           | 15,532        |
| NIPPONKOA Insurance Co., Ltd.                               | 1,000           | 5,431         |
| Odyssey Re Holdings Corp.                                   | 13,022          | 498,612       |
| Old Mutual PLC                                              | 28,741          | 28,760        |
| PartnerRe Ltd.                                              | 7,798           | 531,746       |
| Power Corp. of Canada                                       | 600             | 11,218        |
| Power Financial Corp.                                       | 400             | 8,001         |
| Progressive Corp.*                                          | 25,900          | 395,752       |
| Prudential PLC                                              | 1,794           | 10,348        |
| QBE Insurance Group Ltd.                                    | 1,226           | 19,338        |
| RenaissanceRe Holdings Ltd.                                 | 800             | 38,928        |
| Sampo Oyj "A"                                               | 14,611          | 273,331       |
| SCOR SE                                                     | 488             | 10,277        |
| Sompo Japan Insurance, Inc.                                 | 2,000           | 11,977        |
| Stewart Information Services Corp.                          | 19,200          | 434,112       |
| Sun Life Financial, Inc.                                    | 900             | 21,043        |
| Suncorp-Metway Ltd.                                         | 1,450           | 6,193         |
| Swiss Life Holding AG (Registered)                          | 62              | 4,812         |
| Swiss Re (Registered)                                       | 602             | 14,205        |
| T&D Holdings, Inc.                                      | 300             | 8,916         |
| The Travelers Companies, Inc.                               | 38,550          | 1,585,947     |
| Tokio Marine Holdings, Inc.                                 | 1,100           | 29,072        |
| Topdanmark AS*                                              | 425             | 50,324        |
| Tower Group, Inc.                                           | 2,100           | 57,099        |
| Transatlantic Holdings, Inc.                                | 6,700           | 254,131       |
| Trygvesta AS                                                | 773             | 42,331        |
| Validus Holdings Ltd.                                       | 21,500          | 481,600       |
| Vienna Insurance Group*                                     | 2,623           | 102,757       |
| Zurich Financial Services AG                                | 435             | 80,340        |
|                                                        | **17,513,518**  |
| **Real Estate Investment Trusts 0.5%**                      |
| AMB Property Corp. (REIT)                                   | 5,500           | 104,995       |
| Annaly Capital Management, Inc. (REIT)                      | 10,300          | 144,921       |
| Apartment Investment & Management Co. "A" (REIT)        | 7,779           | 56,787        |
| AvalonBay Communities, Inc. (REIT)                          | 4,216           | 239,511       |
| BioMed Realty Trust, Inc. (REIT)                            | 15,300          | 174,573       |
| Boston Properties, Inc. (REIT)                              | 4,900           | 242,158       |
| CapitaMall Trust (REIT)                                     | 10,000          | 8,391         |
| Colonial Properties Trust (REIT)                            | 17,400          | 125,976       |
| Corio NV (REIT)                                             | 227             | 10,051        |
| Cousins Properties, Inc. (REIT)                             | 11,400          | 96,330        |
| Digital Realty Trust, Inc. (REIT)                           | 1,400           | 50,414        |
| Entertainment Properties Trust (REIT)                       | 7,000           | 161,770       |
| Equity Residential (REIT)                                   | 10,700          | 244,923       |
| First Industrial Realty Trust, Inc. (REIT)                  | 27,600          | 104,052       |
| Glimcher Realty Trust (REIT)                                | 11,600          | 28,420        |
| HCP, Inc. (REIT)                                            | 4,400           | 96,580        |
| Healthcare Realty Trust, Inc. (REIT)                        | 8,000           | 134,320       |
| Home Properties, Inc. (REIT)                                | 5,500           | 200,420       |
| Hospitality Properties Trust (REIT)                         | 10,000          | 122,400       |
| Host Hotels & Resorts, Inc. (REIT)                      | 17,000          | 130,730       |
| Kimco Realty Corp. (REIT)                                   | 11,400          | 137,028       |
| LaSalle Hotel Properties (REIT)                             | 11,600          | 138,736       |
| Lexington Realty Trust (REIT)                               | 20,685          | 79,637        |
| Link (REIT)                                                 | 8,000           | 15,622        |
| Maguire Properties, Inc. (REIT)*                            | 9,700           | 10,573        |
| Mid-America Apartment Communities, Inc. (REIT)              | 5,200           | 192,348       |
| National Retail Properties, Inc. (REIT)                     | 7,800           | 138,372       |
| Parkway Properties, Inc. (REIT)                             | 8,200           | 113,734       |
| Pennsylvania Real Estate Investment Trust (REIT)            | 22,100          | 171,275       |
| ProLogis (REIT)                                             | 9,900           | 90,189        |
| Public Storage (REIT)                                       | 6,600           | 441,276       |
| Realty Income Corp. (REIT)                                  | 2,700           | 60,291        |
| Redwood Trust, Inc. (REIT)                                  | 10,900          | 177,343       |
| Senior Housing Properties Trust (REIT)                      | 16,500          | 270,435       |
| Simon Property Group, Inc. (REIT)                           | 5,786           | 298,558       |
| Sovran Self Storage, Inc. (REIT)                            | 5,100           | 114,954       |
| Stockland (REIT)                                            | 2,927           | 6,650         |
| Strategic Hotels & Resorts, Inc. (REIT)                 | 16,100          | 13,524        |
| Sunstone Hotel Investors, Inc. (REIT)                       | 17,399          | 92,041        |
| Unibail-Rodamco (REIT)                                      | 195             | 28,958        |
| Vornado Realty Trust (REIT)                                 | 6,916           | 338,123       |
| Washington Real Estate Investment Trust (REIT)              | 9,600           | 204,768       |
| Wereldhave NV (REIT)                                        | 152             | 10,389        |
| Westfield Group (REIT)                                      | 2,826           | 21,956        |
|                                                        | **5,644,502**   |
| **Real Estate Management & Development 0.2%**           |
| AEON Mall Co., Ltd.                                         | 31,000          | 406,269       |
| Brookfield Asset Management, Inc. "A"                       | 1,000           | 15,319        |
| CapitaLand Ltd.                                             | 17,000          | 31,296        |
| Cheung Kong (Holdings) Ltd.                                 | 6,000           | 62,509        |
| City Developments Ltd.                                      | 2,000           | 8,670         |
| Hang Lung Properties Ltd.                                   | 7,000           | 19,871        |
| Henderson Land Development Co., Ltd.                        | 4,000           | 18,654        |
| Hopewell Holdings Ltd.                                      | 5,000           | 12,928        |
| Lend Lease Corp., Ltd.                                      | 911             | 4,790         |
| Midland Holdings Ltd.                                       | 602,000         | 247,218       |
| Mitsubishi Estate Co., Ltd.                                 | 2,000           | 26,095        |
| Mitsui Fudosan Co., Ltd.                                    | 2,000           | 25,132        |
| New World Development Co., Ltd.                             | 16,000          | 20,987        |
| Sino Land Co., Ltd.                                         | 18,000          | 22,913        |
| Soho China                                                  | 869,000         | 424,551       |
| Sumitomo Realty & Development Co., Ltd.                 | 21,000          | 251,265       |
| Sun Hung Kai Properties Ltd.                                | 6,000           | 61,751        |
| Swire Pacific Ltd. "A"                                      | 3,000           | 23,414        |
| Wharf Holdings Ltd.                                         | 5,000           | 16,508        |
|                                                        | **1,700,140**   |
| **Thrifts & Mortgage Finance 0.1%**                     |
| Astoria Financial Corp.                                     | 24,400          | 201,544       |
| Dime Community Bancshares                                   | 24,900          | 207,666       |
| New York Community Bancorp., Inc.                           | 45,824          | 518,269       |
| Ocwen Financial Corp.*                                      | 600             | 6,672         |
| People's United Financial, Inc.                             | 27,925          | 436,189       |
|                                                        | **1,370,340**   |
| **Health Care 7.8%**                                        |
| **Biotechnology 1.1%**                                      |
| Actelion Ltd. (Registered)*                                 | 272             | 12,419        |
| Alexion Pharmaceuticals, Inc.*                              | 17,100          | 571,482       |
| Amgen, Inc.*                                                | 17,500          | 848,225       |
| BioMarin Pharmaceutical, Inc.*                              | 10,900          | 140,174       |
| Celgene Corp.*                                              | 45,200          | 1,930,944     |
| CSL Ltd.                                                    | 8,993           | 224,825       |
| Dendreon Corp.*                                             | 19,200          | 407,040       |
| Enzon Pharmaceuticals, Inc.*                                | 61,700          | 354,775       |
| Gilead Sciences, Inc.*                                      | 102,420         | 4,690,836     |
| Grifols SA                                                  | 23,908          | 419,838       |
| Intercell AG*                                               | 30,710          | 808,357       |
| Isis Pharmaceuticals, Inc.*                                 | 11,700          | 183,456       |
| Metabolix, Inc.*                                            | 14,100          | 111,390       |
| Myriad Genetics, Inc.*                                      | 10,700          | 415,053       |
| NPS Pharmaceuticals, Inc.*                                  | 23,800          | 82,348        |
| PDL BioPharma, Inc.                                         | 63,500          | 454,025       |
|                                                        | **11,655,187**  |
| **Health Care Equipment & Supplies 1.1%**               |
| Baxter International, Inc.                                  | 69,936          | 3,391,896     |
| Becton, Dickinson & Co.                                 | 26,278          | 1,589,294     |
| C.R. Bard, Inc.                                             | 8,900           | 637,507       |
| Cochlear Ltd.                                               | 838             | 30,304        |
| Edwards Lifesciences Corp.*                                 | 29,800          | 1,888,724     |
| Essilor International SA                                    | 1,068           | 45,968        |
| Getinge AB "B"                                              | 800             | 9,357         |
| Masimo Corp.*                                               | 1,800           | 52,020        |
| Medtronic, Inc.                                             | 33,860          | 1,083,520     |
| Nobel Biocare Holding AG (Bearer)                           | 485             | 9,904         |
| NxStage Medical, Inc.*                                      | 39,500          | 88,480        |
| Olympus Corp.                                               | 2,000           | 32,594        |
| Smith & Nephew PLC                                      | 4,258           | 30,097        |
| Somanetics Corp.*                                           | 26,300          | 426,323       |
| Sonova Holding AG (Registered)                              | 186             | 12,182        |
| St. Jude Medical, Inc.*                                     | 42,300          | 1,417,896     |
| Synthes, Inc.                                               | 36              | 3,656         |
| Terumo Corp.                                                | 1,400           | 52,951        |
| Thoratec Corp.*                                             | 27,600          | 802,056       |
| William Demant Holding AS*                                  | 125             | 5,929         |
|                                                        | **11,610,658**  |
| **Health Care Providers & Services 2.3%**               |
| Aetna, Inc.                                                 | 65,200          | 1,435,052     |
| AMERIGROUP Corp.*                                           | 21,800          | 651,166       |
| AmerisourceBergen Corp.                                     | 5,200           | 174,928       |
| Celesio AG                                                  | 1,152           | 25,515        |
| Centene Corp.*                                              | 23,700          | 435,369       |
| Chemed Corp.                                                | 11,100          | 469,863       |
| CorVel Corp.*                                               | 6,600           | 148,500       |
| Coventry Health Care, Inc.*                                 | 154,900         | 2,464,459     |
| Diagnosticos da America*                                    | 22,100          | 322,976       |
| Emergency Medical Services Corp. "A"*                       | 12,400          | 432,016       |
| Express Scripts, Inc.*                                      | 53,200          | 3,403,204     |
| Fresenius Medical Care AG & Co. KGaA                    | 64,117          | 2,523,916     |
| Gentiva Health Services, Inc.*                              | 23,900          | 380,727       |
| Healthspring, Inc.*                                         | 45,100          | 416,273       |
| HMS Holdings Corp.*                                         | 11,600          | 347,768       |
| Humana, Inc.*                                               | 7,400           | 212,972       |
| Laboratory Corp. of America Holdings*                       | 18,200          | 1,167,530     |
| LHC Group, Inc.*                                            | 17,600          | 401,632       |
| Magellan Health Services, Inc.*                             | 14,400          | 425,664       |
| McKesson Corp.                                              | 104,920         | 3,882,040     |
| Medco Health Solutions, Inc.*                               | 31,188          | 1,358,237     |
| Mediceo Paltac Holdings Co., Ltd.                           | 1,400           | 14,183        |
| Owens & Minor, Inc.                                     | 14,500          | 502,860       |
| RehabCare Group, Inc.*                                      | 24,200          | 404,140       |
| Sonic Healthcare Ltd.                                       | 6,569           | 55,740        |
| Suzuken Co., Ltd.                                           | 600             | 14,764        |
| UnitedHealth Group, Inc.                                    | 18,400          | 432,768       |
| Universal Health Services, Inc. "B"                         | 13,800          | 695,520       |
| WellPoint, Inc.*                                            | 30,093          | 1,286,777     |
|                                                        | **24,486,559**  |
| **Health Care Technology 0.0%**                             |
| So-net M3, Inc.                                             | 73              | **237,921**   |
| **Life Sciences Tools & Services 0.3%**                 |
| ICON PLC (ADR)                                              | 29,200          | 462,528       |
| Life Technologies Corp.*                                    | 12,600          | 469,980       |
| Lonza Group AG (Registered)                                 | 4,420           | 406,704       |
| QIAGEN NV*                                                  | 37,200          | 614,690       |
| Thermo Fisher Scientific, Inc.*                             | 31,678          | 1,111,264     |
|                                                        | **3,065,166**   |
| **Pharmaceuticals 3.0%**                                    |
| Abbott Laboratories                                         | 129,113         | 5,403,379     |
| Allergan, Inc.                                              | 13,800          | 643,908       |
| Astellas Pharma, Inc.                                       | 17,300          | 564,381       |
| AstraZeneca PLC                                             | 5,250           | 184,102       |
| Bayer AG*                                                   | 19,997          | 992,026       |
| Bristol-Myers Squibb Co.                                    | 23,627          | 453,638       |
| Caraco Pharmaceutical Laboratories Ltd.*                    | 32,200          | 144,256       |
| Chugai Pharmaceutical Co., Ltd.                             | 2,000           | 37,077        |
| Daiichi Sankyo Co., Ltd.                                    | 5,100           | 85,773        |
| Eisai Co., Ltd.                                             | 2,200           | 59,362        |
| Elan Corp. PLC*                                             | 70,168          | 419,020       |
| Eli Lilly & Co.                                         | 67,700          | 2,228,684     |
| Flamel Technologies SA (ADR)*                               | 54,400          | 320,960       |
| GlaxoSmithKline PLC                                         | 19,352          | 298,836       |
| Hisamitsu Pharmaceutical Co., Inc.                          | 600             | 16,952        |
| Johnson & Johnson                                       | 99,666          | 5,218,512     |
| Kyowa Hakko Kirin Co., Ltd.                                 | 2,000           | 17,530        |
| Merck & Co., Inc.                                       | 102,156         | 2,476,261     |
| Merck KGaA                                                  | 538             | 48,166        |
| MiddleBrook Pharmaceuticals, Inc.*                          | 134,900         | 190,209       |
| Mitsubishi Tanabe Pharma Corp.                              | 2,000           | 18,951        |
| Mylan, Inc.*                                                | 76,725          | 1,016,606     |
| Novartis AG (Registered)                                    | 19,629          | 741,346       |
| Noven Pharmaceuticals, Inc.*                                | 32,000          | 330,240       |
| Novo Nordisk AS "B"                                         | 5,750           | 272,830       |
| Ono Pharmaceutical Co., Ltd.                                | 900             | 38,175        |
| Par Pharmaceutical Companies, Inc.*                         | 22,500          | 241,425       |
| Pfizer, Inc.                                                | 281,900         | 3,766,184     |
| Roche Holding AG (Genusschein)                              | 1,554           | 196,364       |
| Sanofi-Aventis                                              | 7,098           | 408,540       |
| Shionogi & Co., Ltd.                                    | 2,000           | 34,429        |
| Shire PLC                                                   | 2,151           | 26,867        |
| Stada Arzneimittel AG                                       | 19,200          | 359,040       |
| Takeda Pharmaceutical Co., Ltd.                             | 6,000           | 213,260       |
| Teva Pharmaceutical Industries Ltd. (ADR)                   | 45,290          | 1,987,778     |
| UCB SA*                                                     | 9,903           | 269,670       |
| Watson Pharmaceuticals, Inc.*                               | 27,400          | 847,756       |
| Wyeth                                                       | 42,694          | 1,810,226     |
|                                                        | **32,382,719**  |
| **Industrials 6.8%**                                        |
| **Aerospace & Defense 2.0%**                            |
| American Science & Engineering, Inc.                    | 7,200           | 433,872       |
| BAE Systems PLC                                             | 16,730          | 88,004        |
| BE Aerospace, Inc.*                                         | 22,100          | 238,459       |
| Bombardier, Inc. "B"                                        | 11,600          | 36,745        |
| CAE, Inc.                                                   | 61,100          | 389,139       |
| Cobham PLC                                                  | 3,674           | 9,526         |
| Cubic Corp.                                                 | 14,300          | 410,553       |
| DynCorp International, Inc. "A"*                            | 24,000          | 366,000       |
| European Aeronautic Defence & Space Co.                 | 703             | 10,128        |
| Finmeccanica SpA                                            | 654             | 9,219         |
| General Dynamics Corp.                                      | 45,800          | 2,366,486     |
| Honeywell International, Inc.                               | 70,629          | 2,204,331     |
| L-3 Communications Holdings, Inc.                           | 14,200          | 1,081,330     |
| Lockheed Martin Corp.                                       | 38,900          | 3,054,817     |
| Northrop Grumman Corp.                                      | 63,500          | 3,070,225     |
| Precision Castparts Corp.                                   | 3,900           | 291,954       |
| Raytheon Co.                                                | 14,100          | 637,743       |
| Rockwell Collins, Inc.                                      | 43,700          | 1,675,895     |
| Rolls-Royce Group PLC*                                      | 6,433           | 32,038        |
| Rolls-Royce Group PLC "C"*                                  | 551,951         | 817           |
| Singapore Technologies Engineering Ltd.                     | 12,000          | 20,704        |
| Thales SA                                                   | 226             | 9,341         |
| TransDigm Group, Inc.*                                      | 13,100          | 460,334       |
| Triumph Group, Inc.                                         | 9,600           | 396,768       |
| United Technologies Corp.                                   | 78,340          | 3,826,126     |
|                                                        | **21,120,554**  |
| **Air Freight & Logistics 0.0%**                        |
| Deutsche Post AG (Registered)                               | 2,728           | 31,288        |
| TNT NV                                                      | 3,411           | 62,835        |
| Toll Holdings Ltd.                                          | 12,640          | 54,114        |
| United Parcel Service, Inc. "B"                             | 2,400           | 125,616       |
| Yamato Holdings Co., Ltd.                                   | 2,000           | 22,273        |
|                                                        | **296,126**     |
| **Airlines 0.1%**                                           |
| Air France-KLM                                              | 357             | 3,951         |
| Allegiant Travel Co.*                                       | 800             | 41,632        |
| Deutsche Lufthansa AG (Registered)                          | 905             | 11,526        |
| Hawaiian Holdings, Inc.*                                    | 80,600          | 402,194       |
| Qantas Airways Ltd.                                         | 16,139          | 23,271        |
| Ryanair Holdings PLC (ADR)*                                 | 14,700          | 402,045       |
| Singapore Airlines Ltd.                                     | 9,000           | 64,768        |
|                                                        | **949,387**     |
| **Building Products 0.2%**                                  |
| AAON, Inc.                                                  | 21,200          | 412,976       |
| Apogee Enterprises, Inc.                                    | 18,400          | 246,560       |
| Asahi Glass Co., Ltd.                                       | 2,000           | 11,923        |
| Assa Abloy AB "B"                                           | 1,200           | 14,212        |
| Compagnie de Saint-Gobain                                   | 19,543          | 698,900       |
| Daikin Industries Ltd.                                      | 400             | 10,674        |
| Geberit AG (Registered)                                     | 186             | 19,873        |
| NCI Building Systems, Inc.*                                 | 14,100          | 55,695        |
| Universal Forest Products, Inc.                             | 9,700           | 325,532       |
| Wienerberger AG                                             | 21,083          | 247,369       |
|                                                        | **2,043,714**   |
| **Commercial Services & Supplies 0.6%**                 |
| Babcock International Group PLC                             | 112,403         | 721,955       |
| Brambles Ltd.                                               | 18,859          | 80,896        |
| Comfort Systems USA, Inc.                                   | 38,400          | 414,336       |
| Courier Corp.                                               | 2,600           | 40,768        |
| Dai Nippon Printing Co., Ltd.                               | 1,000           | 10,584        |
| Daiseki Co., Ltd.                                           | 11,200          | 214,386       |
| Deluxe Corp.                                                | 30,300          | 439,350       |
| G4S PLC                                                     | 8,103           | 22,472        |
| Healthcare Services Group, Inc.                             | 10,000          | 178,800       |
| PRG-Schultz International, Inc.*                            | 12,600          | 37,296        |
| R.R. Donnelley & Sons Co.                               | 54,900          | 639,585       |
| Ritchie Bros. Auctioneers, Inc.                             | 900             | 19,858        |
| Schawk, Inc.                                                | 23,500          | 168,965       |
| Secom Co., Ltd.                                             | 300             | 11,096        |
| Securitas AB "B"*                                           | 2,851           | 23,668        |
| Serco Group PLC                                             | 116,582         | 628,357       |
| Standard Register Co.                                       | 20,100          | 104,922       |
| Stericycle, Inc.*                                           | 35,900          | 1,690,172     |
| Sykes Enterprises, Inc.*                                    | 22,200          | 436,452       |
| Tetra Tech, Inc.*                                           | 5,000           | 122,800       |
| The Brink's Co.                                             | 14,100          | 399,735       |
| Toppan Printing Co., Ltd.                                   | 1,000           | 7,548         |
|                                                        | **6,414,001**   |
| **Construction & Engineering 0.3%**                     |
| ACS, Actividades de Construccion y Servicios SA             | 4,030           | 201,617       |
| Aecom Technology Corp.*                                     | 28,900          | 743,597       |
| Balfour Beatty PLC                                          | 43,382          | 214,534       |
| Bouygues SA                                                 | 742             | 31,777        |
| Chicago Bridge & Iron Co. NV (NY Registered Shares)     | 22,100          | 236,470       |
| FLSmidth & Co. AS*                                      | 1,130           | 36,161        |
| Fluor Corp.                                                 | 22,600          | 855,862       |
| Fomento de Construcciones y Contratas SA                    | 881             | 31,555        |
| Granite Construction, Inc.                                  | 12,300          | 485,235       |
| Grupo Ferrovial SA                                          | 964             | 27,783        |
| Hochtief AG                                                 | 300             | 14,667        |
| JGC Corp.                                                   | 1,000           | 13,035        |
| Koninklijke Boskalis Westminster NV                         | 888             | 20,679        |
| Leighton Holdings Ltd.                                      | 1,959           | 29,896        |
| Perini Corp.*                                               | 5,800           | 100,340       |
| Skanska AB "B"                                              | 1,600           | 17,356        |
| SNC-Lavalin Group, Inc.                                     | 1,400           | 40,769        |
| Vinci SA                                                    | 989             | 44,205        |
|                                                        | **3,145,538**   |
| **Electrical Equipment 0.8%**                               |
| ABB Ltd. (Registered)*                                      | 60,424          | 853,797       |
| Alstom SA                                                   | 8,432           | 526,992       |
| AMETEK, Inc.                                                | 82,100          | 2,644,441     |
| Emerson Electric Co.                                        | 68,426          | 2,329,221     |
| EnerSys*                                                    | 23,500          | 400,675       |
| Gamesa Corp. Tecnologica SA                                 | 4,215           | 79,081        |
| GT Solar International, Inc.*                               | 57,000          | 404,130       |
| Mitsubishi Electric Corp.                                   | 3,000           | 15,911        |
| Powell Industries, Inc.*                                    | 700             | 25,193        |
| Q-Cells SE*                                                 | 746             | 15,885        |
| Rockwell Automation, Inc.                                   | 18,344          | 579,487       |
| Schneider Electric SA*                                      | 412             | 31,067        |
| SGL Carbon SE*                                              | 9,600           | 279,381       |
| Sumitomo Electric Industries Ltd.                           | 1,500           | 14,562        |
| Vestas Wind Systems AS*                                     | 2,803           | 182,440       |
| Woodward Governor Co.                                       | 4,000           | 79,840        |
|                                                        | **8,462,103**   |
| **Industrial Conglomerates 0.4%**                           |
| 3M Co.                                                      | 12,300          | 708,480       |
| Carlisle Companies, Inc.                                    | 9,100           | 207,025       |
| CSR Ltd.                                                    | 25,620          | 25,028        |
| Fraser & Neave Ltd.                                     | 3,000           | 5,279         |
| General Electric Co.                                        | 141,100         | 1,784,915     |
| Hutchison Whampoa Ltd.                                      | 38,000          | 222,113       |
| Keppel Corp., Ltd.                                          | 16,000          | 63,975        |
| Koninklijke (Royal) Philips Electronics NV                  | 38,617          | 696,292       |
| Orkla ASA                                                   | 3,000           | 21,716        |
| SembCorp Industries Ltd.                                    | 25,000          | 45,687        |
| Siemens AG (Registered)                                     | 2,902           | 194,793       |
| Smiths Group PLC                                            | 1,308           | 14,040        |
| Tredegar Corp.                                              | 24,600          | 432,468       |
| Wendel                                                      | 438             | 16,011        |
|                                                        | **4,437,822**   |
| **Machinery 1.0%**                                          |
| AGCO Corp.*                                                 | 12,200          | 296,460       |
| Alfa Laval AB                                               | 2,522           | 22,425        |
| Ampco-Pittsburgh Corp.                                      | 8,200           | 199,752       |
| Atlas Copco AB "A"                                          | 3,320           | 30,884        |
| Atlas Copco AB "B"                                          | 1,894           | 15,697        |
| Austal Ltd.                                                 | 177,583         | 335,390       |
| Chart Industries, Inc.*                                     | 23,600          | 326,388       |
| CIRCOR International, Inc.                                  | 3,200           | 82,336        |
| Danaher Corp.                                               | 5,900           | 344,796       |
| Dover Corp.                                                 | 45,919          | 1,413,387     |
| FANUC Ltd.                                                  | 300             | 21,596        |
| Flowserve Corp.                                             | 10,900          | 740,110       |
| Gardner Denver, Inc.*                                       | 19,200          | 511,104       |
| Hansen Transmissions*                                       | 83,542          | 181,030       |
| Hitachi Construction Machinery Co., Ltd.                    | 600             | 8,115         |
| Invensys PLC*                                               | 2,690           | 7,908         |
| Joy Global, Inc.                                            | 16,800          | 428,400       |
| KCI Konecranes Oyj                                          | 336             | 6,821         |
| Komatsu Ltd.                                                | 42,300          | 520,065       |
| Kone Oyj "B"                                                | 5,688           | 155,563       |
| Kubota Corp.                                                | 2,000           | 12,005        |
| MAN AG                                                      | 476             | 29,405        |
| Metso Corp.                                                 | 4,584           | 70,272        |
| Mitsubishi Heavy Industries Ltd.                            | 5,000           | 16,223        |
| Mueller Water Products, Inc. "A"                            | 65,300          | 273,607       |
| Oshkosh Corp.                                               | 92,300          | 886,080       |
| Parker Hannifin Corp.                                       | 26,000          | 1,179,100     |
| Sandvik AB                                                  | 2,914           | 19,132        |
| Scania AB "B"                                               | 2,119           | 22,619        |
| Schindler Holding AG                                        | 266             | 13,949        |
| SembCorp Marine Ltd.                                        | 16,000          | 22,523        |
| SKF AB "B"                                                  | 1,800           | 19,730        |
| SPX Corp.                                                   | 3,300           | 152,361       |
| Sulzer AG (Registered)                                      | 140             | 7,603         |
| The Weir Group PLC                                          | 16,748          | 119,004       |
| Timken Co.                                                  | 115,200         | 1,852,416     |
| Vallourec SA                                                | 105             | 11,402        |
| Volvo AB "B"                                                | 4,715           | 30,687        |
| Wartsila Oyj                                                | 2,886           | 94,957        |
| Zardoya Otis SA                                             | 3,267           | 66,865        |
|                                                        | **10,548,167**  |
| **Marine 0.0%**                                             |
| A P Moller-Maersk AS "A"*                                   | 8               | 45,644        |
| A P Moller-Maersk AS "B"*                                   | 17              | 98,497        |
| American Commercial Lines, Inc.*                            | 35,500          | 176,790       |
| Kuehne & Nagel International AG (Registered)            | 248             | 18,640        |
| Mitsui O.S.K. Lines Ltd.                                    | 2,000           | 11,416        |
| Nippon Yusen Kabushiki Kaisha                               | 2,000           | 8,181         |
| Pacific Basin Shipping Ltd.                                 | 35,000          | 17,389        |
|                                                        | **376,557**     |
| **Professional Services 0.4%**                              |
| Adecco SA (Registered)                                      | 573             | 22,596        |
| Bureau Veritas SA                                           | 4,845           | 197,405       |
| Capita Group PLC                                            | 1,502           | 15,125        |
| COMSYS IT Partners, Inc.*                                   | 11,200          | 59,136        |
| Duff & Phelps Corp. "A"*                                | 11,600          | 218,776       |
| Experian PLC                                                | 2,421           | 15,977        |
| FTI Consulting, Inc.*                                       | 16,900          | 927,472       |
| Manpower, Inc.                                              | 61,000          | 2,628,490     |
| Michael Page International PLC                              | 116,000         | 471,751       |
| Randstad Holdings NV                                        | 992             | 22,615        |
| SGS SA (Registered)                                         | 21              | 23,476        |
|                                                        | **4,602,819**   |
| **Road & Rail 0.7%**                                    |
| Burlington Northern Santa Fe Corp.                          | 9,400           | 634,312       |
| Canadian National Railway Co.                               | 3,100           | 125,320       |
| Canadian Pacific Railway Ltd.                               | 1,300           | 46,518        |
| Central Japan Railway Co.                                   | 2               | 11,829        |
| ComfortDelGro Corp., Ltd.                                   | 25,000          | 23,859        |
| CSX Corp.                                                   | 26,400          | 781,176       |
| DSV AS                                                      | 3,650           | 41,432        |
| East Japan Railway Co.                                      | 8,278           | 466,295       |
| FirstGroup PLC                                              | 3,797           | 18,505        |
| Marten Transport Ltd.*                                      | 20,800          | 431,392       |
| MTR Corp., Ltd.                                             | 26,500          | 67,160        |
| Norfolk Southern Corp.                                      | 75,205          | 2,683,314     |
| Ryder System, Inc.                                          | 29,100          | 805,779       |
| Tokyu Corp.                                                 | 3,000           | 12,780        |
| Union Pacific Corp.                                         | 13,900          | 683,046       |
| Werner Enterprises, Inc.                                    | 3,500           | 57,225        |
| West Japan Railway Co.                                      | 4               | 12,238        |
|                                                        | **6,902,180**   |
| **Trading Companies & Distributors 0.2%**               |
| Beacon Roofing Supply, Inc.*                                | 28,200          | 448,380       |
| Bunzl PLC                                                   | 3,659           | 29,610        |
| Finning International, Inc.                                 | 1,800           | 21,450        |
| Itochu Corp.                                                | 2,000           | 10,615        |
| Marubeni Corp.                                              | 3,000           | 10,781        |
| Mitsubishi Corp.                                            | 43,600          | 670,159       |
| Mitsui & Co., Ltd.                                      | 60,000          | 628,464       |
| Noble Group Ltd.                                            | 32,000          | 27,772        |
| Sumitomo Corp.                                              | 1,600           | 13,885        |
| WESCO International, Inc.*                                  | 8,900           | 231,400       |
| Wolseley PLC*                                               | 167             | 2,992         |
|                                                        | **2,095,508**   |
| **Transportation Infrastructure 0.1%**                      |
| Abertis Infraestructuras SA                                 | 5,439           | 97,575        |
| Atlantia SpA                                                | 591             | 10,412        |
| Brisa                                                       | 38,202          | 260,488       |
| Cintra Concesiones de Infraestructuras de Transporte SA*    | 4,048           | 22,055        |
| Hopewell Highway Infrastructure Ltd.                        | 500             | 272           |
| Koninklijke Vopak NV                                        | 4,892           | 215,388       |
| Macquarie Infrastructure Group (Units)                      | 47,418          | 46,556        |
| Transurban Group (Units)                                    | 17,281          | 56,104        |
|                                                        | **708,850**     |
| **Information Technology 9.3%**                             |
| **Communications Equipment 2.0%**                           |
| Alcatel-Lucent*                                             | 28,723          | 72,705        |
| BigBand Networks*                                           | 12,300          | 72,078        |
| Brocade Communications Systems, Inc.*                       | 278,533         | 1,609,921     |
| Cisco Systems, Inc.*                                        | 261,030         | 5,043,100     |
| DG Fastchannel, Inc.*                                       | 7,600           | 177,308       |
| EchoStar Corp. "A"*                                         | 34,500          | 545,790       |
| EMS Technologies, Inc.*                                     | 14,100          | 268,605       |
| Nokia Oyj                                                   | 72,386          | 1,031,680     |
| Nokia Oyj (ADR)                                             | 105,555         | 1,492,548     |
| QUALCOMM, Inc.                                              | 163,470         | 6,918,050     |
| Research In Motion Ltd.*                                    | 42,100          | 2,924,851     |
| Riverbed Technology, Inc.*                                  | 25,500          | 467,160       |
| Starent Networks Corp.*                                     | 22,100          | 436,033       |
| Symmetricom, Inc.*                                          | 23,200          | 115,536       |
| Tekelec*                                                    | 29,200          | 452,600       |
| Telefonaktiebolaget LM Ericsson "B"                         | 25,973          | 224,074       |
|                                                        | **21,852,039**  |
| **Computers & Peripherals 1.7%**                        |
| Apple, Inc.*                                                | 59,780          | 7,522,117     |
| Compal Electronics, Inc.                                    | 268,000         | 227,735       |
| Compellent Technologies, Inc.*                              | 1,700           | 18,972        |
| EMC Corp.*                                                  | 186,490         | 2,336,720     |
| Fujitsu Ltd.                                                | 4,000           | 17,098        |
| Hewlett-Packard Co.                                         | 24,600          | 885,108       |
| International Business Machines Corp.                       | 41,140          | 4,246,059     |
| Logitech International SA (Registered)*                     | 29,485          | 392,178       |
| NEC Corp.*                                                  | 1,000           | 3,288         |
| Seagate Technology                                          | 120,300         | 981,648       |
| Synaptics, Inc.*                                            | 14,700          | 477,456       |
| Toshiba Corp.                                               | 7,000           | 23,923        |
| Western Digital Corp.*                                      | 12,900          | 303,408       |
| Wincor Nixdorf AG                                           | 4,364           | 218,737       |
|                                                        | **17,654,447**  |
| **Electronic Equipment, Instruments & Components 1.0%** |
| Arrow Electronics, Inc.*                                    | 89,700          | 2,039,778     |
| Avnet, Inc.*                                                | 80,600          | 1,764,334     |
| Cogent, Inc.*                                               | 71,200          | 807,408       |
| Electrocomponents PLC                                       | 7,201           | 16,771        |
| Fujifilm Holdings Corp.                                     | 1,000           | 25,689        |
| Hirose Electric Co., Ltd.                                   | 100             | 10,401        |
| Hitachi Ltd.                                                | 7,000           | 24,369        |
| Hoya Corp.                                                  | 800             | 13,805        |
| Inspur International Ltd.                                   | 1,485,000       | 257,950       |
| Itron, Inc.*                                                | 13,600          | 625,600       |
| Jabil Circuit, Inc.                                         | 165,700         | 1,342,170     |
| Keyence Corp.                                               | 100             | 17,647        |
| Kingboard Chemical Holdings Ltd.                            | 253,000         | 619,056       |
| Kyocera Corp.                                               | 300             | 23,245        |
| Multi-Fineline Electronix, Inc.*                            | 20,200          | 405,414       |
| Murata Manufacturing Co., Ltd.                              | 400             | 16,049        |
| Nidec Corp.                                                 | 8,800           | 483,733       |
| Nippon Electric Glass Co., Ltd.                             | 1,000           | 8,041         |
| RadiSys Corp.*                                              | 11,500          | 82,455        |
| Rotork PLC                                                  | 16,493          | 197,482       |
| SYNNEX Corp.*                                               | 20,500          | 441,365       |
| TDK Corp.                                                   | 300             | 13,465        |
| Tech Data Corp.*                                            | 47,800          | 1,376,162     |
| Venture Corp., Ltd.                                         | 60,000          | 240,285       |
|                                                        | **10,852,674**  |
| **Internet Software & Services 0.4%**                   |
| EarthLink, Inc.*                                            | 13,000          | 98,540        |
| eBay, Inc.*                                                 | 19,700          | 324,459       |
| Google, Inc. "A"*                                           | 5,990           | 2,371,860     |
| Internet Initiative Japan, Inc.                             | 177             | 247,774       |
| Meetic*                                                     | 11,038          | 246,983       |
| S1 Corp.*                                                   | 46,700          | 289,540       |
| SAVVIS, Inc.*                                               | 30,800          | 350,504       |
| Sohu.com, Inc.*                                             | 2,200           | 114,730       |
| United Internet AG (Registered)                             | 52,114          | 544,685       |
| Yahoo! Japan Corp.                                          | 28              | 6,970         |
| Yahoo!, Inc.*                                               | 14,500          | 207,205       |
|                                                        | **4,803,250**   |
| **IT Services 1.0%**                                        |
| Accenture Ltd. "A"                                          | 91,340          | 2,688,136     |
| Acxiom Corp.                                                | 45,200          | 436,180       |
| Atos Origin SA                                              | 562             | 17,413        |
| Automatic Data Processing, Inc.                             | 40,200          | 1,415,040     |
| Broadridge Financial Solutions, Inc.                        | 37,000          | 715,950       |
| Cap Gemini SA*                                              | 1,495           | 55,879        |
| CGI Group, Inc. "A"*                                        | 2,000           | 17,732        |
| CIBER, Inc.*                                                | 42,000          | 135,660       |
| Computer Sciences Corp.*                                    | 7,000           | 258,720       |
| Computershare Ltd.                                          | 1,801           | 11,941        |
| CSG Systems International, Inc.*                            | 30,700          | 445,150       |
| Heartland Payment Systems, Inc.                             | 41,100          | 330,444       |
| iGATE Corp.                                                 | 25,300          | 95,887        |
| Indra Sistemas SA                                           | 23,201          | 459,366       |
| Logica PLC                                                  | 83,488          | 94,446        |
| ManTech International Corp. "A"*                            | 19,700          | 712,943       |
| NTT Data Corp.                                              | 3               | 7,867         |
| SAIC, Inc.*                                                 | 84,000          | 1,520,400     |
| Sapient Corp.*                                              | 28,100          | 144,153       |
| TeleTech Holdings, Inc.*                                    | 4,300           | 57,061        |
| Visa, Inc. "A"                                              | 7,100           | 461,216       |
| Xchanging PLC                                               | 89,810          | 245,556       |
|                                                        | **10,327,140**  |
| **Office Electronics 0.1%**                                 |
| Brother Industries Ltd.                                     | 1,000           | 8,054         |
| Canon, Inc.                                                 | 25,200          | 759,969       |
| Konica Minolta Holdings, Inc.                               | 1,000           | 8,094         |
| Neopost SA                                                  | 285             | 24,083        |
| Ricoh Co., Ltd.                                             | 1,000           | 12,234        |
|                                                        | **812,434**     |
| **Semiconductors & Semiconductor Equipment 1.2%**       |
| ARM Holdings PLC                                            | 181,119         | 317,970       |
| ASML Holding NV                                             | 11,900          | 241,857       |
| Broadcom Corp. "A"*                                         | 102,780         | 2,383,468     |
| Infineon Technologies AG*                                   | 12,363          | 32,581        |
| Integrated Device Technology, Inc.*                         | 42,500          | 230,775       |
| Intel Corp.                                                 | 305,297         | 4,817,587     |
| IXYS Corp.                                                  | 8,900           | 84,906        |
| Lam Research Corp.*                                         | 8,600           | 239,768       |
| NVIDIA Corp.*                                               | 69,000          | 792,120       |
| ROHM Co., Ltd.                                              | 200             | 12,182        |
| Semtech Corp.*                                              | 21,800          | 314,356       |
| Siliconware Precision Industries Co.                        | 339,000         | 426,179       |
| Skyworks Solutions, Inc.*                                   | 58,000          | 512,720       |
| STMicroelectronics NV                                       | 7,488           | 49,421        |
| Tessera Technologies, Inc.*                                 | 17,400          | 244,296       |
| Texas Instruments, Inc.                                     | 106,420         | 1,921,945     |
| Tokyo Electron Ltd.                                         | 300             | 13,674        |
| Volterra Semiconductor Corp.*                               | 36,500          | 419,385       |
|                                                        | **13,055,190**  |
| **Software 1.9%**                                           |
| Adobe Systems, Inc.*                                        | 50,050          | 1,368,867     |
| Advent Software, Inc.*                                      | 12,200          | 405,528       |
| ANSYS, Inc.*                                                | 4,600           | 127,052       |
| Commvault Systems, Inc.*                                    | 21,300          | 265,185       |
| Compuware Corp.*                                            | 58,700          | 439,076       |
| Dassault Systemes SA                                        | 902             | 37,195        |
| i2 Technologies, Inc.*                                      | 30,700          | 273,844       |
| Intuit, Inc.*                                               | 8,000           | 185,040       |
| Konami Corp.                                                | 400             | 5,880         |
| Microsoft Corp.                                             | 511,630         | 10,365,624    |
| Misys PLC                                                   | 5,338           | 10,914        |
| Nintendo Co., Ltd.                                          | 2,100           | 561,837       |
| Norkom Group PLC*                                           | 96,153          | 91,921        |
| Oracle Corp.                                                | 155,300         | 3,003,502     |
| Renaissance Learning, Inc.                                  | 5,900           | 56,640        |
| SAP AG                                                      | 5,637           | 215,591       |
| Software AG*                                                | 4,596           | 286,636       |
| Sourcefire, Inc.*                                           | 3,300           | 35,739        |
| Square Enix Holdings Co., Ltd.                              | 21,300          | 382,724       |
| Symantec Corp.*                                             | 43,700          | 753,825       |
| The Sage Group PLC                                          | 72,382          | 196,981       |
| Trend Micro, Inc.                                           | 500             | 15,201        |
| Tyler Technologies, Inc.*                                   | 25,700          | 424,050       |
| VanceInfo Technologies, Inc. (ADR)*                         | 34,600          | 275,416       |
|                                                        | **19,784,268**  |
| **Materials 3.2%**                                          |
| **Chemicals 2.0%**                                          |
| Agrium, Inc.                                                | 300             | 12,872        |
| Air Liquide SA                                              | 963             | 78,539        |
| Air Products & Chemicals, Inc.                          | 36,024          | 2,373,982     |
| Airgas, Inc.                                                | 8,100           | 349,272       |
| Akzo Nobel NV                                               | 3,103           | 130,330       |
| Asahi Kasei Corp.                                           | 4,000           | 16,109        |
| Ashland, Inc.                                               | 85,300          | 1,873,188     |
| BASF SE*                                                    | 19,815          | 744,973       |
| Celanese Corp. "A"                                          | 36,400          | 758,576       |
| CF Industries Holdings, Inc.                                | 3,200           | 230,560       |
| Dow Chemical Co.                                            | 104,900         | 1,678,400     |
| E.I. du Pont de Nemours & Co.                           | 18,600          | 518,940       |
| Eastman Chemical Co.                                        | 10,500          | 416,640       |
| Ecolab, Inc.                                                | 50,270          | 1,937,908     |
| GenTek, Inc.*                                               | 900             | 17,181        |
| Givaudan SA (Registered)                                    | 43              | 27,294        |
| Incitec Pivot Ltd.                                          | 4,325           | 6,675         |
| Innophos Holdings, Inc.                                     | 24,800          | 367,784       |
| JSR Corp.                                                   | 600             | 7,263         |
| K+S AG                                                      | 523             | 31,381        |
| Koninklijke DSM NV                                          | 1,511           | 46,701        |
| Kuraray Co., Ltd.                                           | 1,000           | 8,533         |
| Linde AG                                                    | 7,741           | 615,525       |
| Mitsubishi Chemical Holdings Corp.                          | 3,500           | 13,190        |
| Mitsubishi Gas Chemical Co., Inc.                           | 2,000           | 9,291         |
| Mitsui Chemicals, Inc.                                      | 2,000           | 5,981         |
| Monsanto Co.                                                | 40,300          | 3,421,067     |
| Nitto Denko Corp.                                           | 500             | 11,612        |
| Novozymes AS "B"                                            | 3,959           | 268,978       |
| Orica Ltd.                                                  | 1,732           | 21,270        |
| Potash Corp. of Saskatchewan, Inc.                          | 601             | 51,600        |
| Praxair, Inc.                                               | 26,989          | 2,013,649     |
| Shin-Etsu Chemical Co., Ltd.                                | 1,500           | 72,619        |
| Showa Denko KK                                              | 5,000           | 7,475         |
| Solvay SA                                                   | 3,688           | 316,633       |
| Stepan Co.                                                  | 7,600           | 300,732       |
| Sumitomo Chemical Co., Ltd.                                 | 6,000           | 23,510        |
| Syngenta AG (Registered)                                    | 555             | 118,411       |
| Teijin Ltd.                                                 | 4,000           | 10,188        |
| Terra Industries, Inc.                                      | 9,600           | 254,400       |
| The Mosaic Co.                                              | 31,300          | 1,266,085     |
| Toray Industries, Inc.                                      | 4,000           | 17,644        |
| Ube Industries Ltd.                                         | 4,000           | 7,471         |
| Umicore                                                     | 7,355           | 144,140       |
| Yara International ASA                                      | 13,380          | 361,676       |
|                                                        | **20,966,248**  |
| **Construction Materials 0.2%**                             |
| CRH PLC                                                     | 67,089          | 1,745,176     |
| Fletcher Building Ltd.                                      | 2,475           | 9,356         |
| Holcim Ltd. (Registered)                                    | 1,277           | 64,565        |
| Imerys SA                                                   | 225             | 9,315         |
| Lafarge SA                                                  | 519             | 29,304        |
| Martin Marietta Materials, Inc.                             | 2,600           | 218,478       |
|                                                        | **2,076,194**   |
| **Containers & Packaging 0.2%**                         |
| Bway Holding Co.*                                           | 35,800          | 333,656       |
| Owens-Illinois, Inc.*                                       | 18,100          | 441,459       |
| Silgan Holdings, Inc.                                       | 9,600           | 446,304       |
| Sonoco Products Co.                                         | 62,102          | 1,515,910     |
| Toyo Seikan Kaisha Ltd.                                     | 800             | 13,239        |
|                                                        | **2,750,568**   |
| **Metals & Mining 0.7%**                                |
| Acerinox SA                                                 | 19,145          | 291,592       |
| Agnico-Eagle Mines Ltd.                                     | 300             | 13,261        |
| Anglo American PLC                                          | 2,651           | 57,502        |
| ArcelorMittal                                               | 35,806          | 840,517       |
| Barrick Gold Corp.                                          | 56,200          | 1,634,040     |
| BHP Billiton Ltd.                                           | 39,740          | 956,695       |
| BHP Billiton PLC                                            | 2,760           | 57,982        |
| Cliffs Natural Resources, Inc.                              | 4,800           | 110,688       |
| Fortescue Metals Group Ltd.*                                | 2,210           | 3,772         |
| Goldcorp, Inc.                                              | 1,300           | 35,537        |
| JFE Holdings, Inc.                                          | 2,200           | 59,905        |
| Kinross Gold Corp.                                          | 24,413          | 377,130       |
| Kobe Steel Ltd.                                             | 9,000           | 14,727        |
| Mitsubishi Materials Corp.                                  | 4,000           | 11,468        |
| Newcrest Mining Ltd.                                        | 837             | 18,200        |
| Nippon Steel Corp.                                          | 22,000          | 73,331        |
| Nisshin Steel Co., Ltd.                                     | 4,000           | 7,731         |
| Norsk Hydro ASA                                             | 19,000          | 83,896        |
| OneSteel Ltd.                                               | 3,472           | 5,600         |
| Outokumpu Oyj                                               | 6,669           | 99,117        |
| OZ Minerals Ltd.                                            | 16,271          | 8,874         |
| Rautaruukki Oyj                                             | 4,887           | 91,282        |
| Rio Tinto Ltd.                                              | 340             | 15,897        |
| Rio Tinto PLC                                               | 1,474           | 60,294        |
| Salzgitter AG                                               | 99              | 7,034         |
| Sims Metal Management Ltd.                                  | 501             | 7,265         |
| SSAB Svenskt Stal AB "A"                                    | 6,762           | 64,349        |
| Stillwater Mining Co.*                                      | 23,000          | 103,730       |
| Sumitomo Metal Industries Ltd.                              | 17,000          | 39,486        |
| Sumitomo Metal Mining Co., Ltd.                             | 2,000           | 22,433        |
| ThyssenKrupp AG                                             | 1,162           | 24,861        |
| United States Steel Corp.                                   | 22,200          | 589,410       |
| Vedanta Resources PLC                                       | 477             | 7,473         |
| voestalpine AG                                              | 23,261          | 447,911       |
| Xstrata PLC                                                 | 93,301          | 820,115       |
| Yamana Gold, Inc.                                           | 700             | 5,491         |
|                                                        | **7,068,596**   |
| **Paper & Forest Products 0.1%**                        |
| Clearwater Paper Corp.*                                     | 9,242           | 140,663       |
| Glatfelter                                                  | 14,400          | 127,872       |
| International Paper Co.                                     | 30,900          | 391,194       |
| Oji Paper Co., Ltd.                                         | 3,000           | 12,896        |
| Schweitzer-Mauduit International, Inc.                      | 1,000           | 22,970        |
| Stora Enso Oyj "R"*                                         | 31,575          | 181,080       |
| Svenska Cellulosa AB "B"                                    | 20,643          | 199,719       |
| UPM-Kymmene Oyj                                             | 28,285          | 252,905       |
|                                                        | **1,329,299**   |
| **Telecommunication Services 2.3%**                         |
| **Diversified Telecommunication Services 1.7%**             |
| AT&T, Inc.                                              | 289,917         | 7,427,674     |
| Atlantic Tele-Network, Inc.                                 | 11,700          | 258,336       |
| BCE, Inc.                                                   | 6,100           | 130,404       |
| Belgacom SA                                                 | 1,686           | 48,900        |
| BT Group PLC                                                | 32,185          | 44,722        |
| Cable & Wireless PLC                                    | 10,538          | 23,194        |
| Deutsche Telekom AG (Registered)                            | 21,652          | 260,864       |
| Elisa Oyj                                                   | 1,543           | 20,484        |
| France Telecom SA                                           | 17,284          | 383,528       |
| Global Crossing Ltd.*                                       | 8,100           | 58,806        |
| Koninklijke (Royal) KPN NV                                  | 19,430          | 233,443       |
| Nippon Telegraph & Telephone Corp.                      | 14,197          | 532,142       |
| Portugal Telecom, SGPS, SA (Registered)                     | 37,594          | 287,688       |
| Singapore Telecommunications Ltd.                           | 347,000         | 596,730       |
| Swisscom AG (Registered)                                    | 905             | 235,580       |
| Tele2 AB "B"                                                | 5,300           | 50,191        |
| Telecom Corp. of New Zealand Ltd.                           | 438,422         | 700,547       |
| Telecom Italia SpA                                          | 144,546         | 182,702       |
| Telecom Italia SpA (RSP)                                    | 79,757          | 71,155        |
| Telefonica SA                                               | 56,003          | 1,063,369     |
| Telekom Austria AG                                          | 17,174          | 225,883       |
| Telenor ASA                                                 | 81,700          | 509,973       |
| TeliaSonera AB                                              | 36,027          | 170,182       |
| Telstra Corp., Ltd.                                         | 118,657         | 287,128       |
| Telus Corp.                                                 | 600             | 14,657        |
| Telus Corp. (Non-Voting Shares)                             | 1,500           | 34,882        |
| Verizon Communications, Inc.                                | 133,335         | 4,045,384     |
|                                                        | **17,898,548**  |
| **Wireless Telecommunication Services 0.6%**                |
| American Tower Corp. "A"*                                   | 51,300          | 1,629,288     |
| China Mobile Ltd.                                           | 100,500         | 869,691       |
| KDDI Corp.                                                  | 32              | 143,800       |
| Millicom International Cellular SA (SDR)                    | 1,175           | 57,409        |
| Mobistar SA                                                 | 167             | 10,012        |
| NTT DoCoMo, Inc.                                            | 171             | 238,245       |
| Rogers Communications, Inc. "B"                             | 3,600           | 88,454        |
| Softbank Corp.                                              | 8,200           | 128,471       |
| Syniverse Holdings, Inc.*                                   | 14,900          | 187,740       |
| Telephone & Data Systems, Inc.                          | 25,600          | 733,952       |
| United States Cellular Corp.*                               | 32,900          | 1,118,600     |
| USA Mobility, Inc.                                          | 37,800          | 420,336       |
| Vodafone Group PLC                                          | 688,501         | 1,264,646     |
|                                                        | **6,890,644**   |
| **Utilities 3.2%**                                          |
| **Electric Utilities 2.2%**                                 |
| Acciona SA                                                  | 248             | 25,381        |
| Allegheny Energy, Inc.                                      | 101,380         | 2,627,770     |
| American Electric Power Co., Inc.                           | 88,942          | 2,346,290     |
| Cheung Kong Infrastructure Holdings Ltd.                    | 4,000           | 15,483        |
| Chubu Electric Power Co., Inc.                              | 4,700           | 103,438       |
| Chugoku Electric Power Co., Inc.                            | 2,400           | 48,467        |
| CLP Holdings Ltd.                                           | 39,500          | 266,676       |
| Duke Energy Corp.                                           | 146,144         | 2,018,249     |
| E.ON AG                                                     | 34,911          | 1,179,127     |
| Edison International                                        | 75,100          | 2,141,101     |
| EDP — Energias de Portugal SA                         | 82,536          | 301,101       |
| Electricite de France                                       | 10,533          | 487,627       |
| Enel SpA                                                    | 64,882          | 351,492       |
| Entergy Corp.                                               | 26,218          | 1,698,140     |
| Exelon Corp.                                                | 48,628          | 2,243,210     |
| FirstEnergy Corp.                                           | 45,562          | 1,863,486     |
| Fortis, Inc.                                                | 5,700           | 105,803       |
| Fortum Oyj                                                  | 42,842          | 864,365       |
| FPL Group, Inc.                                             | 30,513          | 1,641,294     |
| Hokkaido Electric Power Co., Inc.                           | 1,900           | 34,971        |
| Hokuriku Electric Power Co.                                 | 1,600           | 36,103        |
| HongKong Electric Holdings Ltd.                             | 26,500          | 156,839       |
| Iberdrola SA                                                | 28,307          | 223,676       |
| Kansai Electric Power Co., Inc.                             | 5,500           | 112,049       |
| Kyushu Electric Power Co., Inc.                             | 3,200           | 65,998        |
| NV Energy, Inc.                                             | 107,200         | 1,098,800     |
| Oesterreichische Elektrizitaetswirtschafts AG (Verbund) "A" | 415             | 17,012        |
| Pepco Holdings, Inc.                                        | 20,500          | 244,975       |
| Red Electrica Corporacion SA                                | 695             | 29,188        |
| Scottish & Southern Energy PLC                          | 5,845           | 95,528        |
| Shikoku Electric Power Co., Inc.                            | 1,500           | 41,173        |
| Southern Co.                                                | 20,775          | 599,982       |
| Terna-Rete Elettrica Nationale SpA                          | 25,639          | 82,606        |
| Tohoku Electric Power Co., Inc.                             | 3,500           | 72,969        |
| Tokyo Electric Power Co., Inc.                              | 7,800           | 182,790       |
| Union Fenosa SA                                             | 2,672           | 25,100        |
| Westar Energy, Inc.                                         | 29,600          | 518,888       |
|                                                        | **23,967,147**  |
| **Gas Utilities 0.2%**                                      |
| Chesapeake Utilities Corp.                                  | 3,000           | 87,870        |
| Enagas                                                      | 870             | 15,208        |
| Gas Natural SDG SA                                          | 1,085           | 17,292        |
| Hong Kong & China Gas Co., Ltd.                         | 78,600          | 146,327       |
| ONEOK, Inc.                                                 | 16,400          | 429,188       |
| Osaka Gas Co., Ltd.                                         | 15,000          | 47,590        |
| Snam Rete Gas SpA                                           | 14,716          | 58,401        |
| The Laclede Group, Inc.                                     | 11,200          | 388,416       |
| Tokyo Gas Co., Ltd.                                         | 19,000          | 71,980        |
| WGL Holdings, Inc.                                          | 10,900          | 339,426       |
|                                                        | **1,601,698**   |
| **Independent Power Producers & Energy Traders 0.3%**   |
| Drax Group PLC                                              | 2,119           | 16,050        |
| Electric Power Development Co., Ltd.                        | 1,000           | 29,059        |
| Iberdrola Renovables*                                       | 4,169           | 16,990        |
| International Power PLC                                     | 13,366          | 48,403        |
| Mirant Corp.*                                               | 175,300         | 2,231,569     |
| NRG Energy, Inc.*                                           | 24,100          | 433,318       |
| TransAlta Corp.                                             | 4,300           | 74,015        |
|                                                        | **2,849,404**   |
| **Multi-Utilities 0.5%**                                    |
| A2A SpA                                                     | 14,784          | 24,382        |
| AGL Energy Ltd.                                             | 55,261          | 606,594       |
| Canadian Utilities Ltd. "A"                                 | 1,800           | 52,041        |
| Centrica PLC                                                | 29,415          | 98,624        |
| Dominion Resources, Inc.                                    | 11,700          | 352,872       |
| GDF Suez                                                    | 7,401           | 266,190       |
| National Grid PLC                                           | 18,797          | 156,892       |
| NiSource, Inc.                                              | 45,400          | 498,946       |
| PG&E Corp.                                              | 61,012          | 2,264,765     |
| RWE AG                                                      | 2,160           | 155,292       |
| Sempra Energy                                               | 12,600          | 579,852       |
| Suez Environnement SA*                                      | 863             | 13,149        |
| United Utilities Group PLC                                  | 4,223           | 31,691        |
| Veolia Environnement                                        | 2,542           | 69,747        |
|                                                        | **5,171,037**   |
| **Water Utilities 0.0%**                                    |
| California Water Service Group                              | 10,200          | 398,106       |
| Severn Trent PLC                                            | 1,502           | 23,105        |
|                                                        | **421,211**     |
| **Total Common Stocks** (Cost $617,905,027)                 | **588,591,724** |
|                                                        |
| **Rights 0.0%**                                             |
| **Financials 0.0%**                                         |
| Fortis, Expiration Date 7/4/2014*                           | 23,884          | **0**         |
| **Materials 0.0%**                                          |
| OneSteel Ltd., Expiration Date 5/6/2009*                    | 1,388           | **434**       |
| **Utilities 0.0%**                                          |
| Snam Rete Gas SpA, Expiration Date 5/15/2009*               | 14,716          | **11,293**    |
| **Total Rights** (Cost $16,286)                             | **11,727**      |
|                                                        |
| **Warrants 0.0%**                                           |
| **Financials 0.0%**                                         |
| New ASAT (Finance) Ltd., Expiration Date 2/1/2011*          | 75,400          | **3,331**     |
| **Industrials 0.0%**                                        |
| Dayton Superior Corp., 144A, Expiration Date 6/15/2009*     | 15              | **0**         |
| **Total Warrants** (Cost $0)                                | **3,331**       |
|                                                        |
| **Convertible Preferred Stocks 0.0%**                       |
| **Consumer Discretionary**                                  |
| ION Media Networks, Inc., 144A, 12.0%* (Cost $17,340)       | 25,001          | **0**         |
| * *                                                    |
| **Preferred Stocks 0.0%**                                   |
| **Consumer Discretionary 0.0%**                             |
| Porsche Automobil Holding SE                                | 426             | 30,511        |
| Volkswagen AG                                               | 195             | 12,353        |
|                                                        | **42,864**      |
| **Consumer Staples 0.0%**                                   |
| Henkel AG & Co. KGaA                                    | 3,289           | **89,027**    |
| **Health Care 0.0%**                                        |
| Fresenius SE*                                               | 1,032           | **53,258**    |
| **Utilities 0.0%**                                          |
| RWE AG                                                      | 71              | **4,411**     |
| **Total Preferred Stocks** (Cost $369,688)                  | **189,560**     |

|                                                                                               | **Principal Amount ($)(a)** | **Value ($)** |
|----------------------------------------------------------------------------------------------------|-----------------------------|---------------|
|                                                                                               |                        |
| **Corporate Bonds 7.9%**                                                                           |
| **Consumer Discretionary 0.9%**                                                                    |
| AMC Entertainment, Inc., 8.0%, 3/1/2014                                                            | 160,000                     | 146,400       |
| American Achievement Corp., 144A, 8.25%, 4/1/2012                                                  | 45,000                      | 35,550        |
| American Achievement Group Holding Corp., 16.75%, 10/1/2012 (PIK)                             | 97,058                      | 19,412        |
| Asbury Automotive Group, Inc.:                                                                     |                        |          |
| 7.625%, 3/15/2017                                                                                  | 105,000                     | 63,000        |
| 8.0%, 3/15/2014                                                                                    | 50,000                      | 30,000        |
| British Sky Broadcasting Group PLC, 144A, 9.5%, 11/15/2018                                    | 1,500,000                   | 1,671,933     |
| CanWest MediaWorks LP, 144A, 9.25%, 8/1/2015**                                                     | 75,000                      | 6,938         |
| Carrols Corp., 9.0%, 1/15/2013                                                                     | 45,000                      | 41,625        |
| Cox Communications, Inc., 7.125%, 10/1/2012                                                        | 1,150,000                   | 1,162,460     |
| CSC Holdings, Inc., 6.75%, 4/15/2012                                                               | 75,000                      | 73,312        |
| DIRECTV Holdings LLC, 7.625%, 5/15/2016                                                            | 225,000                     | 222,750       |
| DISH DBS Corp.:                                                                                    |                        |          |
| 6.625%, 10/1/2014                                                                                  | 130,000                     | 120,900       |
| 7.125%, 2/1/2016                                                                                   | 95,000                      | 88,825        |
| Dollarama Group Holdings LP,                    8.573%***, 8/15/2012 (c)                           | 108,000                     | 66,960        |
| Fontainebleau Las Vegas Holdings LLC, 144A, 11.0%, 6/15/2015                                  | 100,000                     | 3,500         |
| Fortune Brands, Inc., 5.375%, 1/15/2016                                                            | 620,000                     | 541,360       |
| Great Canadian Gaming Corp., 144A,                    7.25%, 2/15/2015                             | 90,000                      | 77,400        |
| Group 1 Automotive, Inc., 8.25%, 8/15/2013                                                         | 50,000                      | 41,500        |
| Hertz Corp., 8.875%, 1/1/2014                                                                      | 195,000                     | 151,125       |
| Idearc, Inc., 8.0%, 11/15/2016**                                                                   | 195,000                     | 3,169         |
| Indianapolis Downs LLC, 144A, 11.0%, 11/1/2012                                                     | 60,000                      | 33,600        |
| Isle of Capri Casinos, Inc., 7.0%, 3/1/2014                                                        | 50,000                      | 38,000        |
| Kabel Deutschland GmbH, 10.625%, 7/1/2014                                                          | 150,000                     | 153,000       |
| Lamar Media Corp., Series C, 6.625%, 8/15/2015                                                     | 70,000                      | 53,550        |
| MTR Gaming Group, Inc., Series B, 9.75%, 4/1/2010                                                  | 130,000                     | 111,475       |
| Norcraft Holdings LP, 9.75%, 9/1/2012                                                              | 250,000                     | 202,500       |
| Penske Automotive Group, Inc., 7.75%, 12/15/2016                                                   | 180,000                     | 131,400       |
| Pinnacle Entertainment, Inc., 8.75%, 10/1/2013                                                     | 65,000                      | 62,725        |
| Quebecor Media, Inc., 7.75%, 3/15/2016                                                             | 60,000                      | 50,100        |
| Quebecor World, Inc., 144A, 9.75%, 1/15/2015**                                                     | 115,000                     | 2,444         |
| Reader's Digest Association, Inc., 9.0%, 2/15/2017                                                 | 65,000                      | 3,656         |
| Ryland Group, Inc., 8.4%, 5/15/2017                                                                | 40,000                      | 39,202        |
| Sabre Holdings Corp., 8.35%, 3/15/2016                                                             | 80,000                      | 38,000        |
| Seminole Hard Rock Entertainment, Inc., 144A, 3.82%***, 3/15/2014                             | 105,000                     | 69,300        |
| Shingle Springs Tribal Gaming Authority, 144A, 9.375%, 6/15/2015                              | 75,000                      | 39,000        |
| Simmons Co., Step-up Coupon, 0% to 12/15/2009, 10.0% to 12/15/2014                       | 310,000                     | 3,100         |
| Sonic Automotive, Inc., Series B, 8.625%, 8/15/2013                                                | 90,000                      | 38,700        |
| Starwood Hotels & Resorts Worldwide, Inc., 7.875%, 10/15/2014 (b)                         | 65,000                      | 62,585        |
| TCI Communications, Inc., 8.75%, 8/1/2015                                                          | 1,638,000                   | 1,803,689     |
| Time Warner Cable, Inc., 8.25%, 2/14/2014                                                          | 1,000,000                   | 1,096,807     |
| Time Warner, Inc., 5.875%, 11/15/2016                                                              | 540,000                     | 520,951       |
| Travelport LLC:                                                                                    |                        |          |
| 5.886%***, 9/1/2014                                                                                | 70,000                      | 28,700        |
| 9.875%, 9/1/2014                                                                                   | 15,000                      | 7,350         |
| Trump Entertainment Resorts, Inc., 8.5%, 6/1/2015**                                                | 20,000                      | 1,450         |
| United Components, Inc., 9.375%, 6/15/2013                                                         | 15,000                      | 8,250         |
| Unity Media GmbH:                                                                                  |                        |          |
| 144A, 8.75%, 2/15/2015 EUR                                                                         | 190,000                     | 237,563       |
| 144A, 10.375%, 2/15/2015                                                                           | 75,000                      | 73,875        |
| UPC Holding BV, 144A, 7.75%, 1/15/2014 EUR                                                         | 90,000                      | 106,576       |
| Vertis, Inc., 13.5%, 4/1/2014 (PIK)                                                                | 108,840                     | 555           |
| Viacom, Inc., 6.875%, 4/30/2036                                                                    | 700,000                     | 570,836       |
| Young Broadcasting, Inc., 8.75%, 1/15/2014**                                                       | 430,000                     | 2,150         |
|                                                                                               | **10,159,208**              |
| **Consumer Staples 1.1%**                                                                          |
| Alliance One International, Inc., 8.5%, 5/15/2012                                                  | 45,000                      | 40,050        |
| Altria Group, Inc., 9.25%, 8/6/2019                                                                | 250,000                     | 286,271       |
| Anheuser-Busch InBev Worldwide, Inc., 144A, 7.75%, 1/15/2019                                  | 1,750,000                   | 1,832,197     |
| ConAgra Foods, Inc., 7.0%, 4/15/2019                                                               | 600,000                     | 637,492       |
| CVS Caremark Corp., 6.25%, 6/1/2027                                                                | 2,250,000                   | 2,122,218     |
| Delhaize America, Inc.:                                                                            |                        |          |
| 8.05%, 4/15/2027                                                                                   | 90,000                      | 88,736        |
| 9.0%, 4/15/2031                                                                                    | 199,000                     | 218,312       |
| Dr. Pepper Snapple Group, Inc., 6.12%, 5/1/2013                                                    | 750,000                     | 749,469       |
| General Nutrition Centers, Inc.,                    6.404%***, 3/15/2014 (PIK)                     | 55,000                      | 41,800        |
| Ingles Markets, Inc., 144A, 8.875%, 5/15/2017 (b)                                                  | 40,000                      | 38,619        |
| Kroger Co., 6.15%, 1/15/2020                                                                       | 2,000,000                   | 2,043,804     |
| North Atlantic Trading Co., 144A, 10.0%, 3/1/2012                                                  | 526,750                     | 189,630       |
| Reynolds American, Inc., 7.75%, 6/1/2018                                                           | 2,250,000                   | 2,042,973     |
| Safeway, Inc., 7.45%, 9/15/2027                                                                    | 450,000                     | 453,079       |
| SUPERVALU, Inc., 8.0%, 5/1/2016 (b)                                                                | 120,000                     | 116,400       |
| Viskase Companies, Inc., 11.5%, 6/15/2011                                                          | 1,425,000                   | 1,040,250     |
|                                                                                               | **11,941,300**              |
| **Energy 1.0%**                                                                                    |
| Atlas Energy Resources LLC, 144A,                    10.75%, 2/1/2018                              | 185,000                     | 163,262       |
| Belden & Blake Corp., 8.75%, 7/15/2012                                                         | 416,000                     | 320,320       |
| Bristow Group, Inc., 7.5%, 9/15/2017                                                               | 95,000                      | 76,950        |
| Chaparral Energy, Inc., 8.5%, 12/1/2015                                                            | 120,000                     | 48,000        |
| Chesapeake Energy Corp.:                                                                           |                        |          |
| 6.25%, 1/15/2018                                                                                   | 60,000                      | 50,550        |
| 6.875%, 1/15/2016                                                                                  | 290,000                     | 257,737       |
| 7.5%, 6/15/2014                                                                                    | 35,000                      | 33,075        |
| ConocoPhillips, 5.75%, 2/1/2019                                                                    | 860,000                     | 877,916       |
| DCP Midstream LLC, 144A, 9.75%, 3/15/2019                                                          | 1,500,000                   | 1,488,090     |
| Delta Petroleum Corp., 7.0%, 4/1/2015                                                              | 145,000                     | 47,125        |
| Devon Energy Corp., 5.625%, 1/15/2014                                                              | 2,250,000                   | 2,342,340     |
| Dynegy Holdings, Inc., 6.875%, 4/1/2011                                                            | 30,000                      | 28,200        |
| El Paso Corp., 7.25%, 6/1/2018                                                                     | 125,000                     | 114,062       |
| Enterprise Products Operating LLP, 6.3%, 9/15/2017                                                 | 680,000                     | 629,112       |
| Forest Oil Corp., 144A, 7.25%, 6/15/2019                                                           | 45,000                      | 37,463        |
| Frontier Oil Corp.:                                                                                |                        |          |
| 6.625%, 10/1/2011                                                                                  | 65,000                      | 64,025        |
| 8.5%, 9/15/2016                                                                                    | 120,000                     | 118,800       |
| Hess Corp., 8.125%, 2/15/2019                                                                      | 750,000                     | 821,662       |
| KCS Energy, Inc., 7.125%, 4/1/2012                                                                 | 345,000                     | 321,712       |
| Mariner Energy, Inc.:                                                                              |                        |          |
| 7.5%, 4/15/2013                                                                                    | 75,000                      | 60,750        |
| 8.0%, 5/15/2017                                                                                    | 65,000                      | 47,125        |
| Newfield Exploration Co., 7.125%, 5/15/2018                                                        | 135,000                     | 122,175       |
| ONEOK Partners LP, 8.625%, 3/1/2019                                                                | 1,480,000                   | 1,504,244     |
| OPTI Canada, Inc.:                                                                                 |                        |          |
| 7.875%, 12/15/2014                                                                                 | 115,000                     | 61,813        |
| 8.25%, 12/15/2014                                                                                  | 225,000                     | 123,750       |
| Petrohawk Energy Corp., 144A, 7.875%, 6/1/2015                                                     | 50,000                      | 46,875        |
| Plains Exploration & Production Co., 7.0%, 3/15/2017                                           | 65,000                      | 55,900        |
| Quicksilver Resources, Inc., 7.125%, 4/1/2016                                                      | 220,000                     | 137,500       |
| Stone Energy Corp.:                                                                                |                        |          |
| 6.75%, 12/15/2014                                                                                  | 160,000                     | 66,400        |
| 8.25%, 12/15/2011                                                                                  | 250,000                     | 131,250       |
| Tennessee Gas Pipeline Co., 7.625%, 4/1/2037                                                       | 75,000                      | 68,381        |
| Tesoro Corp., 6.5%, 6/1/2017                                                                       | 90,000                      | 73,125        |
| Whiting Petroleum Corp.:                                                                           |                        |          |
| 7.25%, 5/1/2012                                                                                    | 160,000                     | 145,600       |
| 7.25%, 5/1/2013                                                                                    | 20,000                      | 17,600        |
| Williams Companies, Inc., 8.125%, 3/15/2012                                                        | 275,000                     | 280,500       |
|                                                                                               | **10,783,389**              |
| **Financials 1.9%**                                                                                |
| Algoma Acquisition Corp., 144A, 9.875%, 6/15/2015                                                  | 190,000                     | 76,000        |
| Ashton Woods USA LLC, 144A, Step-up Coupon, 0% to 6/30/2012, 11.0% to 6/30/2015          | 111,800                     | 40,785        |
| BB&T Corp., 5.2%, 12/23/2015                                                                   | 750,000                     | 675,070       |
| Buffalo Thunder Development Authority, 144A, 9.375%, 12/15/2014**                             | 45,000                      | 4,725         |
| Citigroup, Inc.:                                                                                   |                        |          |
| 5.25%, 2/27/2012                                                                                   | 1,500,000                   | 1,357,159     |
| 6.5%, 8/19/2013                                                                                    | 40,000                      | 36,504        |
| Conproca SA de CV, REG S, 12.0%, 6/16/2010                                                         | 832,655                     | 862,839       |
| FIA Credit Services NA, 144A, 7.125%, 11/15/2012                                                   | 3,750,000                   | 3,417,349     |
| Ford Motor Credit Co., LLC:                                                                        |                        |          |
| 7.25%, 10/25/2011                                                                                  | 600,000                     | 492,032       |
| 7.875%, 6/15/2010                                                                                  | 135,000                     | 124,207       |
| General Electric Capital Corp., Series A,                    5.25%, 10/19/2012                     | 1,750,000                   | 1,746,533     |
| GMAC LLC:                                                                                          |                        |          |
| 144A, 6.875%, 9/15/2011                                                                            | 459,000                     | 399,330       |
| 144A, 7.75%, 1/19/2010                                                                             | 540,000                     | 496,800       |
| Inmarsat Finance II PLC, 10.375%, 11/15/2012                                                       | 95,000                      | 97,375        |
| iPayment, Inc., 9.75%, 5/15/2014                                                                   | 80,000                      | 46,400        |
| JPMorgan Chase & Co., 6.3%, 4/23/2019                                                          | 1,290,000                   | 1,269,415     |
| Local TV Finance LLC, 144A, 9.25%, 6/15/2015 (PIK)                                                 | 75,000                      | 8,625         |
| MetLife, Inc., 7.717%, 2/15/2019                                                                   | 750,000                     | 752,260       |
| New ASAT (Finance) Ltd., 9.25%, 2/1/2011**                                                         | 290,000                     | 2,900         |
| Orascom Telecom Finance SCA, 144A,                    7.875%, 2/8/2014                             | 100,000                     | 74,000        |
| PNC Bank NA, 6.875%, 4/1/2018                                                                      | 1,600,000                   | 1,523,781     |
| Prudential Financial, Inc., Series B, 5.1%, 9/20/2014                                              | 350,000                     | 277,025       |
| Qwest Capital Funding, Inc., 7.0%, 8/3/2009                                                        | 75,000                      | 75,000        |
| Rainbow National Services LLC, 144A,                    10.375%, 9/1/2014                          | 17,000                      | 17,680        |
| Sprint Capital Corp.:                                                                              |                        |          |
| 7.625%, 1/30/2011                                                                                  | 75,000                      | 72,281        |
| 8.375%, 3/15/2012                                                                                  | 310,000                     | 297,212       |
| Telecom Italia Capital SA, 5.25%, 11/15/2013                                                       | 800,000                     | 758,568       |
| The Goldman Sachs Group, Inc.:                                                                     |                        |          |
| 6.0%, 5/1/2014 (b)                                                                                 | 365,000                     | 363,596       |
| 6.15%, 4/1/2018                                                                                    | 1,500,000                   | 1,414,843     |
| Tropicana Entertainment LLC, 9.625%, 12/15/2014**                                                  | 235,000                     | 306           |
| UCI Holdco, Inc., 9.32%***, 12/15/2013 (PIK)                                                       | 117,072                     | 9,366         |
| Universal City Development Partners Ltd.,                    11.75%, 4/1/2010                      | 390,000                     | 369,525       |
| Verizon Wireless Capital LLC, 144A,                    7.375%, 11/15/2013                          | 1,000,000                   | 1,112,634     |
| Wachovia Corp., Series G, 5.5%, 5/1/2013                                                           | 1,790,000                   | 1,754,884     |
| Wind Acquisition Finance SA:                                                                       |                        |          |
| 144A, 9.75%, 12/1/2015 EUR                                                                         | 300,000                     | 369,145       |
| 144A, 10.75%, 12/1/2015                                                                            | 75,000                      | 78,000        |
|                                                                                               | **20,474,154**              |
| **Health Care 0.3%**                                                                               |
| Boston Scientific Corp., 6.0%, 6/15/2011                                                           | 80,000                      | 79,600        |
| Community Health Systems, Inc., 8.875%, 7/15/2015                                                  | 425,000                     | 422,875       |
| HCA, Inc.:                                                                                         |                        |          |
| 144A, 8.5%, 4/15/2019                                                                              | 150,000                     | 150,937       |
| 9.125%, 11/15/2014                                                                                 | 115,000                     | 113,850       |
| 9.25%, 11/15/2016                                                                                  | 430,000                     | 425,700       |
| 9.625%, 11/15/2016 (PIK)                                                                           | 125,000                     | 115,938       |
| HEALTHSOUTH Corp., 10.75%, 6/15/2016                                                               | 60,000                      | 61,200        |
| IASIS Healthcare LLC, 8.75%, 6/15/2014                                                             | 95,000                      | 93,338        |
| Medco Health Solutions, Inc., 7.125%, 3/15/2018                                                    | 974,000                     | 963,519       |
| Psychiatric Solutions, Inc., 7.75%, 7/15/2015                                                      | 35,000                      | 32,025        |
| Quest Diagnostics, Inc., 6.95%, 7/1/2037                                                           | 345,000                     | 306,386       |
| Surgical Care Affiliates, Inc., 144A, 8.875%, 7/15/2015 (PIK)                                      | 90,000                      | 61,200        |
| The Cooper Companies, Inc., 7.125%, 2/15/2015                                                      | 150,000                     | 140,250       |
| Vanguard Health Holding Co. I, LLC, Step-up Coupon, 0% to 10/1/2009, 11.25% to 10/1/2015 | 100,000                     | 89,000        |
| Vanguard Health Holding Co. II, LLC, 9.0%, 10/1/2014                                               | 245,000                     | 233,362       |
|                                                                                               | **3,289,180**               |
| **Industrials 0.5%**                                                                               |
| Actuant Corp., 6.875%, 6/15/2017                                                                   | 60,000                      | 54,300        |
| ARAMARK Corp., 8.5%, 2/1/2015                                                                      | 30,000                      | 28,650        |
| BE Aerospace, Inc., 8.5%, 7/1/2018                                                                 | 160,000                     | 144,800       |
| Belden, Inc., 7.0%, 3/15/2017                                                                      | 75,000                      | 66,000        |
| Browning-Ferris Industries, Inc., 7.4%, 9/15/2035                                                  | 255,000                     | 221,079       |
| Cenveo Corp., 144A, 10.5%, 8/15/2016                                                               | 25,000                      | 16,750        |
| Congoleum Corp., 8.625%, 8/1/2008**                                                                | 572,000                     | 171,600       |
| Esco Corp.:                                                                                        |                        |          |
| 144A, 5.195%***, 12/15/2013                                                                        | 50,000                      | 33,500        |
| 144A, 8.625%, 12/15/2013                                                                           | 85,000                      | 68,850        |
| Great Lakes Dredge & Dock Co., 7.75%, 12/15/2013                                               | 60,000                      | 49,800        |
| K. Hovnanian Enterprises, Inc., 8.875%, 4/1/2012                                                   | 90,000                      | 40,950        |
| Kansas City Southern de Mexico SA de CV:                                                           |                        |          |
| 7.375%, 6/1/2014                                                                                   | 65,000                      | 52,650        |
| 7.625%, 12/1/2013                                                                                  | 715,000                     | 586,300       |
| 9.375%, 5/1/2012                                                                                   | 190,000                     | 173,850       |
| Lockheed Martin Corp., 4.121%, 3/14/2013                                                           | 1,500,000                   | 1,522,539     |
| Mobile Mini, Inc., 9.75%, 8/1/2014                                                                 | 90,000                      | 78,750        |
| Moog, Inc., 144A, 7.25%, 6/15/2018                                                                 | 30,000                      | 27,750        |
| Navios Maritime Holdings, Inc., 9.5%, 12/15/2014                                                   | 115,000                     | 70,725        |
| R.H. Donnelley Corp., Series A-4, 8.875%, 10/15/2017**                                             | 250,000                     | 15,625        |
| RBS Global & Rexnord Corp., 9.5%, 8/1/2014                                                     | 65,000                      | 53,137        |
| Titan International, Inc., 8.0%, 1/15/2012                                                         | 265,000                     | 212,000       |
| TransDigm, Inc., 7.75%, 7/15/2014                                                                  | 45,000                      | 43,988        |
| United Rentals North America, Inc.:                                                                |                        |          |
| 6.5%, 2/15/2012                                                                                    | 50,000                      | 44,750        |
| 7.0%, 2/15/2014                                                                                    | 210,000                     | 130,200       |
| US Concrete, Inc., 8.375%, 4/1/2014                                                                | 125,000                     | 59,375        |
| Waste Management, Inc., 6.375%, 3/11/2015                                                          | 1,170,000                   | 1,171,636     |
|                                                                                               | **5,139,554**               |
| **Information Technology 0.1%**                                                                    |
| Alcatel-Lucent USA, Inc., 6.45%, 3/15/2029                                                         | 135,000                     | 66,825        |
| L-3 Communications Corp.:                                                                          |                        |          |
| 5.875%, 1/15/2015                                                                                  | 250,000                     | 228,750       |
| Series B, 6.375%, 10/15/2015                                                                       | 115,000                     | 108,962       |
| MasTec, Inc., 7.625%, 2/1/2017                                                                     | 105,000                     | 89,250        |
| SunGard Data Systems, Inc., 10.25%, 8/15/2015                                                      | 195,000                     | 169,650       |
| Vangent, Inc., 9.625%, 2/15/2015                                                                   | 80,000                      | 56,400        |
|                                                                                               | **719,837**                 |
| **Materials 0.5%**                                                                                 |
| Appleton Papers, Inc., Series B, 8.125%, 6/15/2011                                                 | 45,000                      | 27,000        |
| ARCO Chemical Co., 9.8%, 2/1/2020**                                                                | 635,000                     | 146,050       |
| Cascades, Inc., 7.25%, 2/15/2013                                                                   | 86,000                      | 67,940        |
| Clondalkin Acquisition BV, 144A,                    3.32%***, 12/15/2013                           | 90,000                      | 57,600        |
| CPG International I, Inc., 10.5%, 7/1/2013                                                         | 195,000                     | 87,750        |
| Exopack Holding Corp., 11.25%, 2/1/2014                                                            | 255,000                     | 178,500       |
| Freeport-McMoRan Copper & Gold, Inc.:                                                          |                        |          |
| 8.25%, 4/1/2015                                                                                    | 205,000                     | 201,925       |
| 8.375%, 4/1/2017                                                                                   | 400,000                     | 392,000       |
| GEO Specialty Chemicals, Inc.:                                                                     |                        |          |
| 144A, 7.5%***, 3/31/2015 (PIK)                                                                     | 607,464                     | 334,105       |
| 10.0%, 3/31/2015                                                                                   | 613,760                     | 337,568       |
| Georgia-Pacific LLC, 144A, 7.125%, 1/15/2017                                                       | 50,000                      | 47,250        |
| Hexcel Corp., 6.75%, 2/1/2015                                                                      | 305,000                     | 268,400       |
| Huntsman LLC, 11.625%, 10/15/2010                                                                  | 400,000                     | 408,000       |
| Innophos, Inc., 8.875%, 8/15/2014                                                                  | 35,000                      | 29,400        |
| Koppers Holdings, Inc., Step-up Coupon, 0% to 11/15/2009, 9.875% to 11/15/2014      | 215,000                     | 182,750       |
| Millar Western Forest Products Ltd.,                    7.75%, 11/15/2013                          | 40,000                      | 13,600        |
| Monsanto Co., 5.875%, 4/15/2038                                                                    | 1,500,000                   | 1,474,332     |
| NewMarket Corp., 7.125%, 12/15/2016                                                                | 195,000                     | 163,800       |
| OI European Group BV, 144A, 6.875%, 3/31/2017 EUR                                                  | 85,000                      | 97,843        |
| Pliant Corp., 11.85%, 6/15/2009**                                                                  | 10                          | 4             |
| Radnor Holdings Corp., 11.0%, 3/15/2010**                                                          | 120,000                     | 150           |
| Terra Capital, Inc., Series B, 7.0%, 2/1/2017                                                      | 160,000                     | 150,400       |
| The Mosaic Co., 144A, 7.375%, 12/1/2014                                                            | 135,000                     | 133,988       |
| Wolverine Tube, Inc., 15.0%, 6/30/2012 (PIK)                                                       | 135,000                     | 103,950       |
|                                                                                               | **4,904,305**               |
| **Telecommunication Services 0.7%**                                                                |
| AT&T Mobility LLC, 6.5%, 12/15/2011                                                            | 1,750,000                   | 1,865,188     |
| BCM Ireland Preferred Equity Ltd., 144A, 8.959%***, 2/15/2017 (PIK) EUR                       | 232,970                     | 18,906        |
| Centennial Communications Corp.:                                                                   |                        |          |
| 10.0%, 1/1/2013                                                                                    | 55,000                      | 58,300        |
| 10.125%, 6/15/2013                                                                                 | 120,000                     | 124,500       |
| Cincinnati Bell, Inc.:                                                                             |                        |          |
| 7.25%, 7/15/2013                                                                                   | 220,000                     | 217,250       |
| 8.375%, 1/15/2014                                                                                  | 85,000                      | 83,938        |
| Cricket Communications, Inc.:                                                                      |                        |          |
| 9.375%, 11/1/2014                                                                                  | 170,000                     | 168,300       |
| 144A, 10.0%, 7/15/2015                                                                             | 155,000                     | 156,550       |
| Grupo Iusacell Celular SA de CV, 10.0%, 3/31/2012                                                  | 48,802                      | 25,377        |
| Hellas Telecommunications Luxembourg V, 144A, 4.935%***, 10/15/2012 EUR                            | 100,000                     | 80,048        |
| Intelsat Corp.:                                                                                    |                        |          |
| 144A, 9.25%, 8/15/2014                                                                             | 30,000                      | 29,100        |
| 144A, 9.25%, 6/15/2016                                                                             | 415,000                     | 400,475       |
| Intelsat Subsidiary Holding Co., Ltd., 144A, 8.875%, 1/15/2015                                | 190,000                     | 188,100       |
| iPCS, Inc., 3.295%***, 5/1/2013                                                                    | 35,000                      | 28,350        |
| MetroPCS Wireless, Inc., 9.25%, 11/1/2014                                                          | 185,000                     | 185,231       |
| Millicom International Cellular SA, 10.0%, 12/1/2013                                               | 270,000                     | 270,000       |
| Qwest Corp.:                                                                                       |                        |          |
| 7.25%, 9/15/2025                                                                                   | 25,000                      | 19,125        |
| 7.875%, 9/1/2011                                                                                   | 210,000                     | 208,425       |
| 8.875%, 3/15/2012                                                                                  | 45,000                      | 45,675        |
| Rogers Communications, Inc., 6.8%, 8/15/2018                                                       | 685,000                     | 717,814       |
| Sprint Nextel Corp., 6.0%, 12/1/2016                                                               | 75,000                      | 62,250        |
| Stratos Global Corp., 9.875%, 2/15/2013                                                            | 55,000                      | 54,175        |
| Telesat Canada, 144A, 11.0%, 11/1/2015                                                             | 710,000                     | 660,300       |
| Verizon Communications, Inc., 6.35%, 4/1/2019                                                      | 750,000                     | 779,327       |
| Virgin Media Finance PLC:                                                                          |                        |          |
| 8.75%, 4/15/2014                                                                                   | 180,000                     | 178,200       |
| 8.75%, 4/15/2014 EUR                                                                               | 200,000                     | 247,420       |
| Windstream Corp.:                                                                                  |                        |          |
| 7.0%, 3/15/2019                                                                                    | 90,000                      | 84,600        |
| 8.625%, 8/1/2016                                                                                   | 15,000                      | 14,925        |
|                                                                                               | **6,971,849**               |
| **Utilities 0.9%**                                                                                 |
| AES Corp.:                                                                                         |                        |          |
| 8.0%, 10/15/2017                                                                                   | 110,000                     | 100,650       |
| 144A, 8.0%, 6/1/2020                                                                               | 155,000                     | 135,625       |
| 144A, 8.75%, 5/15/2013                                                                             | 486,000                     | 490,860       |
| 9.5%, 6/1/2009                                                                                     | 85,000                      | 85,000        |
| Alabama Power Co., 6.0%, 3/1/2039                                                                  | 740,000                     | 734,640       |
| Allegheny Energy Supply Co., LLC, 144A,                    8.25%, 4/15/2012                        | 595,000                     | 600,932       |
| Appalachian Power Co., 7.0%, 4/1/2038                                                              | 2,250,000                   | 2,008,676     |
| CMS Energy Corp., 8.5%, 4/15/2011                                                                  | 355,000                     | 362,471       |
| CP&L, Inc., 5.3%, 1/15/2019                                                                    | 1,500,000                   | 1,554,660     |
| DPL, Inc., 6.875%, 9/1/2011                                                                        | 1,500,000                   | 1,531,953     |
| Energy Future Holdings Corp., 10.875%, 11/1/2017                                                   | 115,000                     | 78,488        |
| Knight, Inc., 6.5%, 9/1/2012                                                                       | 45,000                      | 43,425        |
| Mirant Americas Generation LLC, 8.3%, 5/1/2011                                                     | 130,000                     | 130,000       |
| Mirant North America LLC, 7.375%, 12/31/2013                                                       | 60,000                      | 57,750        |
| NRG Energy, Inc.:                                                                                  |                        |          |
| 7.25%, 2/1/2014                                                                                    | 180,000                     | 173,700       |
| 7.375%, 2/1/2016                                                                                   | 165,000                     | 158,813       |
| 7.375%, 1/15/2017                                                                                  | 260,000                     | 248,300       |
| NV Energy, Inc.:                                                                                   |                        |          |
| 6.75%, 8/15/2017                                                                                   | 180,000                     | 161,772       |
| 8.625%, 3/15/2014                                                                                  | 31,000                      | 30,999        |
| Pepco Holdings, Inc., 6.125%, 6/1/2017                                                             | 1,350,000                   | 1,174,308     |
| Regency Energy Partners LP, 8.375%, 12/15/2013                                                     | 105,000                     | 98,175        |
| Reliant Energy, Inc., 7.875%, 6/15/2017                                                            | 30,000                      | 26,775        |
| Texas Competitive Electric Holdings Co., LLC, Series A, 10.25%, 11/1/2015                          | 210,000                     | 119,175       |
|                                                                                               | **10,107,147**              |
| **Total Corporate Bonds** (Cost $92,701,269)                                                       | **84,489,923**              |
|                                                                                               |
| **Asset-Backed 0.4%**                                                                              |
| **Automobile Receivables 0.3%**                                                                    |
| Capital Auto Receivables Asset Trust, "B", Series 2006-1, 5.26%, 10/15/2010                        | 1,643,000                   | 1,635,876     |
| Ford Credit Auto Owner Trust, "B", Series 2007-B, 5.69%, 11/15/2012                           | 1,517,000                   | 1,179,282     |
|                                                                                               | **2,815,158**               |
| **Home Equity Loans 0.1%**                                                                         |
| Countrywide Asset-Backed Certificates, "1AF2", Series 2005-17, 5.363%, 5/25/2036              | 1,815,861                   | **1,195,179** |
| **Total Asset-Backed** (Cost $4,975,300)                                                           | **4,010,337**               |
|                                                                                               |
| **Mortgage-Backed Securities Pass-Throughs 9.9%**                                                  |
| Federal Home Loan Bank, 6.0%, 11/1/2021                                                            | 1,027,458                   | 1,078,561     |
| Federal Home Loan Mortgage Corp., 6.5%, 10/1/2038                                                  | 8,792,774                   | 9,389,721     |
| Federal National Mortgage Association:                                                             |                        |          |
| 4.5%, 11/1/2028                                                                                    | 2,168,302                   | 2,214,548     |
| 5.0%, with various maturities from 3/1/2036 until 2/1/2038                                         | 17,112,477                  | 17,649,916    |
| 5.5%, with various maturities from 2/1/2037 until 4/1/2038                                         | 18,561,342                  | 19,250,359    |
| 6.0%, with various maturities from 3/1/2036 until 8/1/2037                                         | 27,056,208                  | 28,390,289    |
| 6.5%, with various maturities from 4/1/2017 until 9/1/2038                                         | 8,512,486                   | 9,094,078     |
| 8.0%, 9/1/2015                                                                                     | 477,296                     | 510,617       |
| Government National Mortgage Association:                                                          |                        |          |
| 5.0%, 12/1/2036(b)                                                                                 | 17,500,000                  | 18,105,664    |
| 6.5%, 8/20/2034                                                                                    | 302,806                     | 320,773       |
| **Total Mortgage-Backed Securities Pass-Throughs** (Cost $103,938,762)                             | **106,004,526**             |
|                                                                                               |
| **Commercial Mortgage-Backed Securities 1.6%**                                                     |
| GS Mortgage Securities Corp. II, "AAB", Series 2006-GG8, 5.535%, 11/10/2039                        | 5,300,000                   | 4,840,039     |
| Wachovia Bank Commercial Mortgage Trust:                                                           |                        |          |
| "APB", Series 2006-C23, 5.446%, 1/15/2045                                                          | 5,900,000                   | 5,375,168     |
| "APB", Series 2007-C34, 5.617%, 5/15/2046                                                          | 8,625,000                   | 7,460,959     |
| **Total Commercial Mortgage-Backed Securities** (Cost $19,749,916)                                 | **17,676,166**              |
|                                                                                               |
| **Collateralized Mortgage Obligations 0.1%**                                                       |
| Fannie Mae Whole Loan, "1A1", Series 2004-W15, 6.0%, 8/25/2044 (Cost $1,306,914)              | 1,283,451                   | **1,297,380** |
| * *                                                                                           |
| **Loan Participations and Assignments 0.1%**                                                       |
| **Senior Loans*****                                                                                |
| Alliance Mortgage Cycle Loan, Term Loan A, LIBOR plus 7.25%, 9.127%, 6/1/2010**                    | 233,333                     | 0             |
| Buffets, Inc.:                                                                                     |                        |          |
| Term Loan 2, LIBOR plus 7.25%, 9.127%, 4/30/2009 (PIK)**                                           | 1,443                       | 180           |
| Term Loan 3, LIBOR plus 7.25%, 9.127%, 4/30/2009 (PIK)**                                           | 144                         | 18            |
| Term Loan, LIBOR plus 7.25%, 9.127%, 11/1/2013 (PIK)**                                             | 3,001                       | 375           |
| Essar Steel Algoma, Inc., Term Loan B, LIBOR plus 2.5%, 4.377%, 6/20/2013                          | 59,545                      | 34,834        |
| General Nutrition Centers, Inc., Term Loan B, LIBOR plus 2.25%, 4.127%, 9/16/2013                  | 49,032                      | 40,696        |
| Golden Nugget, Inc., 2nd Lien Term Loan, LIBOR plus 3.25%, 5.127%, 12/31/2014                      | 100,000                     | 18,000        |
| Hawker Beechcraft Acquisition Co., LLC:                                                            |                        |          |
| Term Loan, LIBOR plus 2.0%, 3.877%, 3/26/2014                                                      | 49,925                      | 26,336        |
| Letter of Credit, LIBOR plus 2.1%, 3.977%, 3/26/2014                                               | 2,939                       | 1,550         |
| HCA, Inc., Term Loan A, LIBOR plus 2.0%, 3.877%, 11/16/2012                                   | 224,388                     | 203,886       |
| Hexion Specialty Chemicals, Inc.:                                                                  |                        |          |
| Term Loan C1, LIBOR plus 2.25%, 4.127%, 5/5/2013                                                   | 246,965                     | 123,329       |
| Term Loan C2, LIBOR plus 2.25%, 4.127%, 5/5/2013                                                   | 32,611                      | 16,286        |
| IASIS Healthcare LLC, Term Loan, LIBOR plus 5.25%, 7.127%, 6/13/2014 (PIK)                         | 235,558                     | 126,417       |
| Sabre, Inc., Term Loan B, LIBOR plus 2.25%, 4.127%, 9/30/2014                                 | 78,657                      | 44,048        |
| Telesat Canada:                                                                                    |                        |          |
| Term Loan II, LIBOR plus 2.0%,                    3.877%, 10/31/2014                               | 60,696                      | 56,274        |
| Term Delayed Draw, LIBOR plus 3.0%, 4.877%, 10/31/2014                                        | 5,217                       | 4,836         |
| Texas Competitive Electric Holdings Co., LLC:                                                      |                        |          |
| Term Loan B2, LIBOR plus 3.5%,                    5.377%, 10/10/2014                               | 293,760                     | 200,696       |
| Term Loan B3, LIBOR plus 3.5%,                    5.377%, 10/10/2014                               | 669,305                     | 454,943       |
| Tribune Co., Term Loan B, LIBOR plus 3.0%, 4.877%, 6/4/2014**                                 | 216,681                     | 63,921        |
| **Total Loan Participations and Assignments** (Cost $2,519,770)                                    | **1,416,625**               |
|                                                                                               |
| **Municipal Bonds and Notes 0.1%**                                                                 |
| California, State Build America Bonds,  7.5%, 4/1/2034                                        | 700,000                     | 728,672       |
| New Jersey, State Tumpike Authority Revenue, Build America Bonds, Series F, 7.414%, 1/1/2040  | 500,000                     | 547,550       |
| **Total Municipal Bonds and Notes** (Cost $1,205,145)                                              | **1,276,222**               |
|                                                                                               |
| **Government & Agency Obligations 13.9%**                                                      |
| **Other Government Related 2.5%**                                                                  |
| Bank of America Corp., Series L, FDIC Guaranteed, 2.1%, 4/30/2012                             | 4,500,000                   | 4,528,588     |
| Citigroup, Inc., FDIC Guaranteed, 2.125%, 4/30/2012                                                | 3,000,000                   | 3,014,268     |
| General Electric Capital Corp., Series G, FDIC Guaranteed, 2.2%, 6/8/2012                          | 12,000,000                  | 12,075,108    |
| PNC Funding Corp., FDIC Guaranteed, 2.3%, 6/22/2012                                                | 7,000,000                   | 7,022,918     |
|                                                                                               | **26,640,882**              |
| **Sovereign Bonds 3.0%**                                                                           |
| Federal Republic of Germany, 2.25%, 4/15/2013 EUR                                                  | 742,660                     | 1,022,940     |
| Government of Canada, 4.0%, 12/1/2031 CAD                                                          | 1,568,725                   | 1,769,295     |
| Government of France:                                                                              |                        |          |
| 1.0%, 7/25/2017 EUR                                                                                | 930,635                     | 1,174,436     |
| 1.6%, 7/25/2011 EUR                                                                                | 2,656,383                   | 3,579,013     |
| 2.25%, 7/25/2020 EUR                                                                               | 943,138                     | 1,296,508     |
| 3.15%, 7/25/2032 EUR                                                                               | 1,758,518                   | 2,787,101     |
| Government of Japan, 1.1%, 9/10/2016 JPY                                                           | 210,420,000                 | 1,885,928     |
| Government of Sweden, 3.5%, 12/1/2015 SEK                                                          | 9,500,000                   | 1,558,964     |
| Republic of Italy, 2.1%, 9/15/2017 EUR                                                             | 3,954,583                   | 5,151,416     |
| United Kingdom Treasury-Inflation Linked Bonds:                                                    |                        |          |
| 1.125%, 11/22/2037 GBP                                                                             | 595,684                     | 896,611       |
| 1.25%, 11/22/2032 GBP                                                                              | 829,337                     | 1,233,749     |
| 1.875%, 11/22/2022 GBP                                                                             | 1,325,746                   | 2,095,194     |
| 2.0%, 1/26/2035 GBP                                                                                | 712,000                     | 1,512,112     |
| 2.5%, 8/16/2013 GBP                                                                                | 745,000                     | 2,729,719     |
| 2.5%, 7/26/2016 GBP                                                                                | 398,000                     | 1,641,769     |
| 2.5%, 4/16/2020 GBP                                                                                | 341,000                     | 1,417,149     |
|                                                                                               | **31,751,904**              |
| **US Treasury Obligations 8.4%**                                                                   |
| US Treasury Bills:                                                                                 |                        |          |
| 0.04%****, 5/21/2009 (d)                                                                           | 58,000                      | 57,999        |
| 0.13%****, 6/11/2009 (d)                                                                           | 8,177,000                   | 8,176,444     |
| 0.15%****, 6/11/2009 (d)                                                                           | 743,000                     | 742,949       |
| 0.23%****, 6/18/2009 (d)                                                                           | 99,000                      | 98,992        |
| 0.29%****, 6/18/2009 (d)                                                                           | 4,443,000                   | 4,442,662     |
| US Treasury Bond, 3.5%, 2/15/2039                                                                  | 10,000,000                  | 9,060,900     |
| US Treasury Inflation-Indexed Bonds:                                                               |                        |          |
| 2.375%, 1/15/2025                                                                                  | 1,964,050                   | 1,947,477     |
| 3.625%, 4/15/2028                                                                                  | 1,436,333                   | 1,658,067     |
| 3.875%, 4/15/2029                                                                                  | 1,589,958                   | 1,908,943     |
| US Treasury Inflation-Indexed Notes:                                                               |                        |          |
| 1.875%, 7/15/2015                                                                                  | 1,096,184                   | 1,107,831     |
| 2.0%, 1/15/2014                                                                                    | 878,373                     | 894,843       |
| 2.0%, 1/15/2016                                                                                    | 3,047,519                   | 3,100,851     |
| 2.375%, 4/15/2011                                                                                  | 3,612,814                   | 3,688,460     |
| 2.375%, 1/15/2017                                                                                  | 3,924,072                   | 4,106,785     |
| 2.5%, 7/15/2016                                                                                    | 1,780,665                   | 1,877,489     |
| US Treasury Notes:                                                                                 |                        |          |
| 0.875%, 3/31/2011                                                                                  | 20,000,000                  | 20,000,000    |
| 2.75%, 2/15/2019                                                                                   | 4,500,000                   | 4,358,655     |
| 4.5%, 11/15/2015                                                                                   | 20,000,000                  | 22,562,500    |
|                                                                                               | **89,791,847**              |
| **Total Government & Agency Obligations** (Cost $148,805,847)                                  | **148,184,633**             |
|                                                                                               |
| **Preferred Securities 0.1%**                                                                      |
| **Financials**                                                                                     |
| Farm Credit Bank of Texas, Series 1, 7.561%, 12/15/2013 (e)                                        | 889,000                     | 532,760       |
| Xerox Capital Trust I, 8.0%, 2/1/2027                                                              | 80,000                      | 55,927        |
| **Total Preferred Securities** (Cost $1,042,603)                                                   | **588,687**                 |

|                                                         | **Units** | **Value ($)** |
|--------------------------------------------------------------|-----------|---------------|
|                                                         |      |
| **Other Investments 0.0%**                                   |
| **Materials**                                                |
| Hercules, Inc., (Bond Unit), 6.5%, 6/30/2029 (Cost $349,358) | 506,000   | **126,500**   |

|                                                   | **Shares**     | **Value ($)**  |
|--------------------------------------------------------|----------------|----------------|
|                                                   |           |
| **Exchange-Traded Funds 4.6%**                         |
| iShares Barclays Aggregate Bond Fund                   | 132,415        | 13,458,661     |
| iShares MSCI Japan Index Fund                          | 181,322        | 1,543,050      |
| Vanguard Emerging Markets                              | 1,217,252      | 33,681,362     |
| **Total Exchange-Traded Funds** (Cost $40,103,207)     | **48,683,073** |
|                                                   |
| **Closed-End Investment Company 0.0%**                 |
| Apollo Investment Corp. (Cost $289,017)                | 57,800         | **277,440**    |
|                                                   |
| **Cash Equivalents 5.1%**                              |
| Cash Management QP Trust, 0.46% (f) (Cost $54,289,432) | 54,289,432     | **54,289,432** |

|                                                       | **% of Net Assets** | **Value ($)**     |
|------------------------------------------------------------|---------------------|-------------------|
|                                                       |                |
| **Total Investment Portfolio** (Cost $1,089,584,881)+ | 99.0                | **1,057,117,286** |
| **Other Assets and Liabilities, Net**                      | 1.0                 | **10,071,363**    |
| **Net Assets**                                             | 100.0               | **1,067,188,649** |

| **Security**                          | **Coupon** | **Maturity Date** | **Principal Amount ($)** | **Acquisition Cost ($)** | **Value ($)** |
|---------------------------------------|------------|-------------------|-------------------------------|-------------------------------|---------------|
| ARCO Chemical Co.                | 9.8%       | 2/1/2020          | 635,000                       | USD                           | 574,897       | 146,050 |
| Alliance Mortgage Cycle Loan          | 9.127%     | 6/4/2010          | 233,333                       | USD                           | 233,333       | 0 |
| Buffalo Thunder Development Authority | 9.375%     | 12/15/2014        | 45,000                        | USD                           | 45,000        | 4,725 |
| Buffets, Inc., Term Loan         | 9.127%     | 11/1/2013         | 3,001                         | USD                           | 3,001         | 375 |
| Buffets, Inc., Term Loan 2       | 9.127%     | 4/30/2009         | 1,443                         | USD                           | 1,443         | 180 |
| Buffets, Inc., Term Loan 3       | 9.127%     | 4/30/2009         | 144                           | USD                           | 144           | 18 |
| CanWest MediaWorks LP                 | 9.25%      | 8/1/2015          | 75,000                        | USD                           | 75,000        | 6,938 |
| Congoleum Corp.                       | 8.625%     | 8/1/2008          | 572,000                       | USD                           | 573,205       | 171,600 |
| Idearc, Inc.                          | 8.0%       | 11/15/2016        | 195,000                       | USD                           | 191,838       | 3,169 |
| New ASAT (Finance) Ltd.               | 9.25%      | 2/1/2011          | 290,000                       | USD                           | 253,681       | 2,900 |
| Pliant Corp.                          | 11.85%     | 6/15/2009         | 10                            | USD                           | 10            | 4 |
| Quebecor World, Inc.             | 9.75%      | 1/15/2015         | 115,000                       | USD                           | 115,000       | 2,444 |
| R.H. Donnelley Corp.                  | 8.875%     | 10/15/2017        | 250,000                       | USD                           | 250,000       | 15,625 |
| Radnor Holdings Corp.                 | 11.0%      | 3/15/2010         | 120,000                       | USD                           | 79,038        | 150 |
| Tribune Co.                           | 4.877%     | 6/4/2014          | 216,681                       | USD                           | 216,545       | 63,921 |
| Tropicana Entertainment LLC           | 9.625%     | 12/15/2014        | 235,000                       | USD                           | 172,931       | 306 |
| Trump Entertainment Resorts, Inc.     | 8.5%       | 6/1/2015          | 20,000                        | USD                           | 19,175        | 1,450 |
| Young Broadcasting, Inc.              | 8.75%      | 1/15/2014         | 430,000                       | USD                           | 367,438       | 2,150 |
| * *                              |       |              |                          |                          | **3,171,679** | **422,005** |

*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.*

*FDR: Fiduciary Depositary Receipt*

*LIBOR: Represents the London InterBank Offered Rate.*

*MSCI: Morgan Stanley Capital International*

*PIK: Denotes that all or a portion of the income is paid in-kind.*

*PPS: Price Protected Shares*

*REG S: Securities sold under Regulation S may not be offered, sold or delivered within the United States or to, or for the account or benefit of, US persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.*

*REIT: Real Estate Investment Trust.*

*RSP: Risparmio (Convertible Savings Shares)*

*SDR: Swedish Depositary Receipt*

*At April 30, 2009, open futures contracts purchased were as follows:*

| **Futures**                                  | **Expiration Date** | **Contracts** | **Aggregated Face Value ($)** | **Value ($)** | **Unrealized Appreciation/ (Depreciation) ($)** |
|----------------------------------------------|---------------------|---------------|------------------------------------|--------------------|-------------------------------------------------|
| 10 Year Australian Treasury Bond             | 6/15/2009           | 165           | 13,578,648                         | 13,355,514         | (223,134)                                       |
| 10 Year US Treasury Note                     | 6/19/2009           | 212           | 25,999,851                         | 25,638,750         | (361,101)                                       |
| 2 Year US Treasury Note                 | 6/30/2009           | 77            | 16,695,794                         | 16,751,109         | 55,315                                          |
| 3 Year Australian Treasury Bond              | 6/15/2009           | 306           | 23,911,893                         | 23,858,037         | (53,856)                                        |
| AEX Index                                    | 5/15/2009           | 31            | 1,907,632                          | 1,972,054          | 64,422                                          |
| ASX SPI 200 Index                            | 6/18/2009           | 38            | 2,366,544                          | 2,600,093          | 233,549                                         |
| DJ Euro Stoxx 50 Index                  | 6/19/2009           | 27            | 721,152                            | 831,647            | 110,495                                         |
| Federal Republic of Germany Euro-Schatz | 6/8/2009            | 246           | 35,279,444                         | 35,170,011         | (109,433)                                       |
| FTSE 100 Index                               | 6/19/2009           | 279           | 15,906,557                         | 17,363,904         | 1,457,347                                       |
| Hang Seng Index                              | 5/27/2009           | 30            | 2,828,620                          | 2,978,109          | 149,489                                         |
| NASDAQ E-Mini 100 Index                      | 6/19/2009           | 98            | 2,327,148                          | 2,731,260          | 404,112                                         |
| Nikkei 225 Index                             | 6/11/2009           | 1             | 45,604                             | 44,475             | (1,129)                                         |
| Russell 2000 Mini Index                 | 6/19/2009           | 43            | 1,741,816                          | 2,092,810          | 350,994                                         |
| S&P E-Mini 500 Index                     | 6/19/2009           | 268           | 10,265,712                         | 11,658,000         | 1,392,288                                       |
| S&P MIB Index                            | 6/19/2009           | 8             | 824,634                            | 990,472            | 165,838                                         |
| United Kingdom Long Gilt Bond                | 6/26/2009           | 195           | 34,724,263                         | 34,789,851         | 65,588                                          |
| **Total net unrealized appreciation**        | **3,700,784**       |

*At April 30, 2009, open futures contracts sold were as follows:*

| **Futures**                           | **Expiration Date** | **Contracts** | **Aggregated Face Value ($)** | **Value ($)** | **Unrealized Appreciation/ (Depreciation) ($)** |
|---------------------------------------|---------------------|---------------|------------------------------------|--------------------|-------------------------------------------------|
| 10 Year Canadian Government Bond      | 6/19/2009           | 110           | 11,515,616                         | 11,418,503         | 97,113                                          |
| 10 Year Japanese Government Bond      | 6/11/2009           | 31            | 43,564,284                         | 43,061,144         | 503,140                                         |
| CAC 40 Index                          | 5/15/2009           | 62            | 2,392,093                          | 2,560,224          | (168,131)                                       |
| DAX Index                             | 6/19/2009           | 22            | 3,158,265                          | 3,491,891          | (333,626)                                       |
| Federal Republic of Germany Euro-Bund | 6/8/2009            | 78            | 12,722,914                         | 12,645,313         | 77,601                                          |
| IBEX 35 Index                         | 5/15/2009           | 6             | 681,765                            | 706,178            | (24,413)                                        |
| Russell 2000 Mini index               | 6/19/2009           | 252           | 10,088,518                         | 12,264,840         | (2,176,322)                                     |
| S&P TSE 60 Index                  | 6/18/2009           | 34            | 3,055,682                          | 3,213,375          | (157,693)                                       |
| TOPIX Index                           | 6/12/2009           | 129           | 9,381,870                          | 11,000,710         | (1,618,840)                                     |
| **Total net unrealized depreciation** | **(3,801,171)**     |

*As of April 30, 2009, the Fund had the following open forward foreign currency exchange contracts:*

| **Contracts to Deliver**          |          | **In Exchange For** |   | **Settlement Date** | **Unrealized Appreciation ($)** |
|-----------------------------------|---------------|---------------------|--------|---------------------|---------------------------------|
| CAD                               | 167,000       | * *            | USD    | 139,902             | * *                        | 5/5/2009 | 28 |
| CHF                               | 292,000       | * *            | USD    | 256,119             | * *                        | 5/5/2009 | 69 |
| EUR                               | 771,000       | * *            | USD    | 1,021,958           | * *                        | 5/5/2009 | 884 |
| NOK                               | 1,974,000     | * *            | USD    | 301,402             | * *                        | 5/5/2009 | 1,084 |
| USD                               | 1,224,795     | * *            | AUD    | 1,716,000           | * *                        | 5/20/2009 | 20,545 |
| USD                               | 10,923,976    | * *            | AUD    | 15,390,000          | * *                        | 5/20/2009 | 244,895 |
| USD                               | 1,471,464     | * *            | CAD    | 1,779,000           | * *                        | 5/20/2009 | 19,468 |
| USD                               | 12,939,621    | * *            | CAD    | 15,953,000          | * *                        | 5/20/2009 | 430,159 |
| USD                               | 2,404,810     | * *            | CHF    | 2,760,000           | * *                        | 5/20/2009 | 14,071 |
| USD                               | 21,617,537    | * *            | CHF    | 24,747,000          | * *                        | 5/20/2009 | 70,889 |
| USD                               | 9,140,916     | * *            | JPY    | 916,354,000         | * *                        | 5/20/2009 | 153,608 |
| USD                               | 369,794       | * *            | NOK    | 2,494,000           | * *                        | 5/20/2009 | 9,755 |
| USD                               | 3,335,421     | * *            | NOK    | 22,363,000          | * *                        | 5/20/2009 | 67,892 |
| EUR                               | 20,241,000    | * *            | USD    | 26,815,277          | * *                        | 5/20/2009 | 36,307 |
| EUR                               | 100           | * *            | USD    | 133                 | * *                        | 5/22/2009 | 1 |
| JPY                               | 436,100,000   | * *            | USD    | 4,486,026           | * *                        | 5/29/2009 | 68,929 |
| JPY                               | 210,008,600   | * *            | USD    | 2,147,810           | * *                        | 6/26/2009 | 19,810 |
| **Total unrealized appreciation** | **1,158,394** |

| **Contracts to Deliver**          |          | **In Exchange For** |   | **Settlement Date** | **Unrealized Depreciation ($)** |
|-----------------------------------|---------------|---------------------|--------|---------------------|---------------------------------|
| EUR                               | 57,760        | * *            | USD    | 76,405              | * *                        | 5/4/2009 | (16) |
| GBP                               | 296,025       |                | USD    | 436,696             |                            | 5/5/2009 | (1,226) |
| BRL                               | 6,564         |                | USD    | 2,991               |                            | 5/6/2009 | (28) |
| USD                               | 282,516       |                | NZD    | 499,000             |                            | 5/20/2009 | (592) |
| USD                               | 2,581,667     |                | NZD    | 4,476,000           |                            | 5/20/2009 | (52,818) |
| USD                               | 1,057,875     |                | JPY    | 102,196,000         |                            | 5/20/2009 | (21,307) |
| GBP                               | 6,602,000     |                | USD    | 9,711,608           |                            | 5/20/2009 | (54,834) |
| SEK                               | 698,000       |                | USD    | 85,219              |                            | 5/20/2009 | (1,549) |
| SEK                               | 6,258,000     |                | USD    | 762,343             |                            | 5/20/2009 | (15,584) |
| EUR                               | 2,257,000     |                | USD    | 2,959,830           |                            | 5/20/2009 | (26,195) |
| GBP                               | 736,000       |                | USD    | 1,073,316           |                            | 5/20/2009 | (15,460) |
| EUR                               | 8,500         |                | USD    | 11,078              |                            | 5/20/2009 | (167) |
| EUR                               | 602,800       |                | USD    | 794,238             |                            | 5/20/2009 | (3,264) |
| **Total unrealized depreciation** | **(193,040)** |

| **Currency Abbreviations**                                                                                                                                                                           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| AUD Australian DollarBRL Brazilian RealCAD Canadian DollarCHF Swiss FrancEUR EuroGBP British PoundJPY Japanese YenNOK Norwegian KroneNZD New Zealand DollarSEK Swedish KronaUSD United States Dollar |

*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.*

***Fair Value Measurements***

*Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, "Fair Value Measurements," establishes a three-tier hierarchy for measuring fair value and requires additional disclosure about the classification of 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 April 30, 2009 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 the Financial Statements.*

| **Valuation Inputs** | **Investments in Securities** | **Other Financial Instruments++** |
|----------------------|-------------------------------|-----------------------------------|
| Level 1              | $ 531,831,241                 | $ (100,387)                       |
| Level 2              | 524,664,608                   | 965,354                           |
| Level 3              | 621,437                       | —                           |
| **Total**            | **$ 1,057,117,286**           | **$ 864,967**                     |

*The following is a reconciliation of the Fund's Level 3 investments for which significant unobservable inputs were used in determining value at April 30, 2009:*

|                                                                                                      | **Investments in Securities** |
|-----------------------------------------------------------------------------------------------------------|-------------------------------|
| **Balance as of October 31, 2008**                                                                        | $ 1,436,759                   |
| Total realized gain (loss)                                                                                | (188,165)                     |
| Change in unrealized appreciation (depreciation)                                                          | (456,242)                     |
| Amortization premium/discount                                                                             | 2,809                         |
| Net purchases (sales)                                                                                     | (295,860)                     |
| Net transfers in (out) of Level 3                                                                         | 122,136                       |
| **Balance as of April 30, 2009**                                                                          | **$ 621,437**                 |
| **Net change in unrealized appreciation (depreciation) from investments still held as of April 30, 2009** | **$ (574,264)**               |

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

**Financial Statements**

| **Statement of Assets and Liabilities**as of April 30, 2009 (Unaudited)     |
|-----------------------------------------------------------------------------|
| **Assets**                                                                  |
| Investments:
Investments in securities, at value (cost $1,035,295,449) | $ 1,002,827,854 |
| Investment in Cash Management QP Trust (cost $54,289,432)              | 54,289,432 |
| Total investments, at value (cost $1,089,584,881)                      | 1,057,117,286 |
| Foreign currency, at value (cost $3,306,081)                           | 3,310,443 |
| Receivable for investments sold                                             | 43,774,024 |
| Dividends receivable                                                        | 984,905 |
| Interest receivable                                                         | 3,493,615 |
| Receivable for Fund shares sold                                             | 70,060 |
| Receivable for variation margin on open futures contracts                   | 10,364 |
| Unrealized appreciation on forward foreign currency exchange contracts      | 1,158,394 |
| Foreign taxes recoverable                                                   | 147,853 |
| Other assets                                                                | 51,917 |
| Total assets                                                                | 1,110,118,861 |
| **Liabilities**                                                             |
| Cash overdraft                                                              | 46,616 |
| Payable for investments purchased                                           | 21,449,924 |
| Payable for when-issued securities purchased                                | 18,731,476 |
| Payable for Fund shares redeemed                                            | 744,067 |
| Net payable on closed forward foreign currency exchange contracts           | 455 |
| Unrealized depreciation on forward foreign currency exchange contracts      | 193,040 |
| Accrued management fee                                                      | 306,300 |
| Other accrued expenses and payables                                         | 1,458,334 |
| Total liabilities                                                           | 42,930,212 |
| **Net assets, at value**                                                    | **$ 1,067,188,649** |

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

| **Statement of Assets and Liabilities**as of April 30, 2009 (Unaudited) (continued)                                                                                                                                                                                   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Net Assets Consist of**                                                                                                                                                                                                                                             |
| Undistributed net investment income                                                                                                                                                                                                                                   | 10,378,535 |
| Net unrealized appreciation (depreciation) on:
Investments                                                                                                                                                                                                            | (32,467,595) |
| Futures                                                                                                                                                                                                                                                               | (100,387) |
| Foreign currency                                                                                                                                                                                                                                                      | 962,538 |
| Accumulated net realized gain (loss)                                                                                                                                                                                                                                  | (253,858,747) |
| Paid-in capital                                                                                                                                                                                                                                                       | 1,342,274,305 |
| **Net assets, at value**                                                                                                                                                                                                                                              | **$ 1,067,188,649** |
| **Net Asset Value**                                                                                                                                                                                                                                                   |
| **Class A**
**Net Asset Value** and redemption price per share ($802,414,784 ÷ 114,254,244 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)                                                 | **$ 7.02** |
| Maximum offering price per share (100 ÷ 94.25 of $7.02)                                                                                                                                                                                              | **$ 7.45** |
| **Class B**
**Net Asset Value,** offering and redemption price (subject to contingent deferred sales charge) per share ($18,178,101÷ 2,580,635 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)  | **$ 7.04** |
| **Class C**
**Net Asset Value,** offering and redemption price (subject to contingent deferred sales charge) per share ($19,599,659 ÷ 2,796,864 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized) | **$ 7.01** |
| **Class S**
**Net Asset Value,** offering and redemption price per share ($223,100,655 ÷ 31,743,725 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)                                        | **$ 7.03** |
| **Institutional Class**
**Net Asset Value,** offering and redemption price per share ($3,895,450 ÷ 554,199 outstanding shares of beneficial interest, no par value, unlimited number of shares authorized)                                 | **$ 7.03** |

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

| **Statement of Operations**for the six months ended April 30, 2009 (Unaudited)                            |
|-----------------------------------------------------------------------------------------------------------|
| **Investment Income**                                                                                     |
| Income:Dividends (net of foreign taxes withheld of $203,579)                                         | $ 7,766,048 |
| Interest (net of foreign taxes withheld of $91)                                                           | 9,483,022 |
| Interest — Cash Management QP Trust                                                            | 427,710 |
| Securities lending income, including income from Daily Assets Fund Institutional, net of borrower rebates | 263,337 |
| Total Income                                                                                              | 17,940,117 |
| Expenses:Management fee                                                                                   | 1,834,117 |
| Administration fee                                                                                        | 495,707 |
| Services to shareholders                                                                                  | 1,195,520 |
| Distribution and service fees                                                                             | 1,058,895 |
| Custodian fee                                                                                             | 178,481 |
| Professional fees                                                                                         | 71,676 |
| Reports to shareholders                                                                                   | 85,095 |
| Registration fees                                                                                         | 38,074 |
| Trustees' fees and expenses                                                                               | 20,788 |
| Other                                                                                                     | 101,286 |
| Total expenses before expense reductions                                                                  | 5,079,639 |
| Expense reductions                                                                                        | (218,018) |
| Total expenses after expense reductions                                                                   | 4,861,621 |
| **Net investment income (loss)**                                                                          | **13,078,496** |
| **Realized and Unrealized Gain (Loss)**                                                                   |
| Net realized gain (loss) from:Investments                                                                 | (185,431,102) |
| Futures                                                                                                   | 5,689,707 |
| Credit default swaps                                                                                      | 21,366 |
| Foreign currency                                                                                          | 534,460 |
| * *                                                                                                  | (179,185,569) |
| Change in net unrealized appreciation (depreciation) on:Investments                                       | 161,546,889 |
| Futures                                                                                                   | (3,226,762) |
| Credit default swaps                                                                                      | 40,798 |
| Foreign currency                                                                                          | 67,172 |
| * *                                                                                                  | 158,428,097 |
| **Net gain (loss)**                                                                                       | **(20,757,472)** |
| **Net increase (decrease) in net assets resulting from operations**                                       | **$ (7,678,976)** |

*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 April 30, 2009 (Unaudited)** | **Year Ended October 31, 2008** |
| Operations:Net investment income (loss)                                                                                 | $ 13,078,496 | $ 38,515,728 |
| Net realized gain (loss)                                                                                                | (179,185,569) | (59,700,867) |
| Change in net unrealized appreciation (depreciation)                                                                    | 158,428,097 | (433,980,742) |
| Net increase (decrease) in net assets resulting from operations                                                         | (7,678,976) | (455,165,881) |
| Distributions to shareholders from:Net investment income:
Class A                                                       | (7,072,863) | (27,869,661) |
| Class B                                                                                                                 | (159,383) | (846,131) |
| Class C                                                                                                                 | (86,501) | (432,663) |
| Class S                                                                                                                 | (2,320,334) | (9,054,876) |
| Institutional Class                                                                                                     | (2,786) | (9,651) |
| Net realized gains:
Class A                                                                                             | — | (6,432,304) |
| Class B                                                                                                                 | — | (243,190) |
| Class C                                                                                                                 | — | (155,159) |
| Class S                                                                                                                 | — | (1,938,318) |
| Institutional Class                                                                                                     | — | (1,890) |
| Tax return of capital:
Class A                                                                                          | — | (4,267,519) |
| Class B                                                                                                                 | — | (142,881) |
| Class C                                                                                                                 | — | (100,275) |
| Class S                                                                                                                 | — | (1,286,678) |
| Institutional Class                                                                                                     | — | (1,317) |
| Total distributions                                                                                                     | (9,641,867) | (52,782,513) |
| Fund share transactions:Proceeds from shares sold                                                                       | 21,883,820 | 67,098,717 |
| Net assets acquired in tax-free reorganization                                                                          | 59,603,712 | — |
| Reinvestment of distributions                                                                                           | 8,961,411 | 49,132,419 |
| Cost of shares redeemed                                                                                                 | (106,328,855) | (282,834,277) |
| Redemption fees*                                                                                                        | — | 10,445 |
| Net increase (decrease) in net assets from Fund share transactions                                                      | (15,879,912) | (166,592,696) |
| **Increase (decrease) in net assets**                                                                                   | (33,200,755) | (674,541,090) |
| Net assets at beginning of period                                                                                       | 1,100,389,404 | 1,774,930,494 |
| Net assets at end of period (including undistributed net investment income of $10,378,535 and $6,941,906, respectively) | **$ 1,067,188,649** | **$ 1,100,389,404** |

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

**Financial Highlights**

| **Class A**

**Years Ended October 31,**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | **2009a**  | **2008**    | **2007**    | **2006**   | **2005**   | **2004**   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|-------------|------------|------------|------------|
| **Selected Per Share Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **Net asset value, beginning of period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **$ 7.11** | **$ 10.25** | **$ 9.70**  | **$ 8.99** | **$ 8.68** | **$ 8.44** |
| *Income (loss) from investment operations:*

Net investment incomeb                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | .09        | .23         | .26         | .23e       | .21        | .13        |
| Net realized and unrealized gain (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (.12)      | (3.05)      | .61         | .69        | .31        | .26        |
| **Total from investment operations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (.03)      | (2.82)      | .87         | .92        | .52        | .39        |
| *Less distributions from:*

Net investment income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (.06)      | (.23)       | (.32)       | (.21)      | (.21)      | (.15)      |
| Net realized gains                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | —    | (.05)       | —     | —    | —    | —    |
| Tax return of capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | —    | (.04)       | —     | —    | —    | —    |
| **Total distributions**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (.06)      | (.32)       | (.32)       | (.21)      | (.21)      | (.15)      |
| Redemption fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | —    | .00***      | .00***      | .00***     | .00***     | —    |
| **Net asset value, end of period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **$ 7.02** | **$ 7.11**  | **$ 10.25** | **$ 9.70** | **$ 8.99** | **$ 8.68** |
| Total Return (%)c                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (.32)d**   | (28.25)d    | 9.08d       | 10.40d,e   | 5.97d      | 4.59       |
| **Ratios to Average Net Assets and Supplemental Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Net assets, end of period ($ millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 802        | 815         | 1,299       | 1,367      | 1,459      | 1,620      |
| Ratio of expenses before expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1.03*      | .99         | .92         | .97        | .98        | 1.03       |
| Ratio of expenses after expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 1.01*      | .96         | .92         | .92        | .96        | 1.03       |
| Ratio of net investment income (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 2.61*      | 2.51        | 2.59        | 2.56e      | 2.40       | 1.55       |
| Portfolio turnover rate (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 134**      | 276         | 188         | 98         | 158        | 81         |
| a*For the six months ended April 30, 2009 (Unaudited).*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.*e*Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.007 per share and an increase in the ratio of net investment income of 0.07%. Excluding this non-recurring income, total                return would have been 0.07% lower.***Annualized****Not annualized*****Amount is less than $.005.* |

| **Class B**

**Years Ended October 31,**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | **2009a**  | **2008**    | **2007**    | **2006**   | **2005**   | **2004**   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|-------------|------------|------------|------------|
| **Selected Per Share Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **Net asset value, beginning of period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **$ 7.15** | **$ 10.30** | **$ 9.75**  | **$ 9.01** | **$ 8.69** | **$ 8.44** |
| *Income (loss) from investment operations:*

Net investment incomeb                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | .06        | .22         | .24         | .21e       | .16        | .06        |
| Net realized and unrealized gain (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (.11)      | (3.07)      | .60         | .70        | .30        | .25        |
| **Total from investment operations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (.05)      | (2.85)      | .84         | .91        | .46        | .31        |
| *Less distributions from:*

Net investment income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (.06)      | (.21)       | (.29)       | (.17)      | (.14)      | (.06)      |
| Net realized gains                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | —    | (.05)       | —     | —    | —    | —    |
| Tax return of capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | —    | (.04)       | —     | —    | —    | —    |
| **Total distributions**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (.06)      | (.30)       | (.29)       | (.17)      | (.14)      | (.06)      |
| Redemption fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | —    | .00***      | .00***      | .00***     | .00***     | —    |
| **Net asset value, end of period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **$ 7.04** | **$ 7.15**  | **$ 10.30** | **$ 9.75** | **$ 9.01** | **$ 8.69** |
| Total Return (%)c,d                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | (.69)**    | (28.34)     | 8.79        | 10.18e     | 5.30       | 3.71       |
| **Ratios to Average Net Assets and Supplemental Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Net assets, end of period ($ millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 18         | 22          | 52          | 77         | 114        | 178        |
| Ratio of expenses before expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2.16*      | 1.90        | 1.89        | 1.99       | 1.94       | 1.94       |
| Ratio of expenses after expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 1.75*      | 1.13        | 1.13        | 1.16       | 1.54       | 1.93       |
| Ratio of net investment income (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 1.87*      | 2.34        | 2.37        | 2.32e      | 1.82       | .65        |
| Portfolio turnover rate (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 134**      | 276         | 188         | 98         | 158        | 81         |
| a*For the six months ended April 30, 2009 (Unaudited).*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.*e*Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.007 per share and an increase in the ratio of net investment income of 0.07%. Excluding this non-recurring income, total                return would have been 0.07% lower.***Annualized****Not annualized*****Amount is less than $.005.* |

| **Class C**

**Years Ended October 31,**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | **2009a**  | **2008**    | **2007**    | **2006**   | **2005**   | **2004**   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|-------------|------------|------------|------------|
| **Selected Per Share Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **Net asset value, beginning of period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | **$ 7.10** | **$ 10.22** | **$ 9.68**  | **$ 8.97** | **$ 8.66** | **$ 8.42** |
| *Income (loss) from investment operations:*

Net investment incomeb                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | .06        | .15         | .18         | .16e       | .14        | .06        |
| Net realized and unrealized gain (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (.11)      | (3.03)      | .59         | .69        | .30        | .25        |
| **Total from investment operations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (.05)      | (2.88)      | .77         | .85        | .44        | .31        |
| *Less distributions from:*

Net investment income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (.04)      | (.15)       | (.23)       | (.14)      | (.13)      | (.07)      |
| Net realized gains                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | —    | (.05)       | —     | —    | —    | —    |
| Tax return of capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | —    | (.04)       | —     | —    | —    | —    |
| **Total distributions**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (.04)      | (.24)       | (.23)       | (.14)      | (.13)      | (.07)      |
| Redemption fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | —    | .00***      | .00***      | .00***     | .00***     | —    |
| **Net asset value, end of period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | **$ 7.01** | **$ 7.10**  | **$ 10.22** | **$ 9.68** | **$ 8.97** | **$ 8.66** |
| Total Return (%)c                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (.61)**    | (28.85)d    | 8.05        | 9.52e      | 5.09d      | 3.65       |
| **Ratios to Average Net Assets and Supplemental Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Net assets, end of period ($ millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 20         | 18          | 31          | 33         | 38         | 50         |
| Ratio of expenses before expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1.90*      | 1.82        | 1.75        | 1.77       | 1.86       | 1.90       |
| Ratio of expenses after expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 1.90*      | 1.82        | 1.75        | 1.76       | 1.78       | 1.89       |
| Ratio of net investment income (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 1.72*      | 1.65        | 1.75        | 1.72e      | 1.58       | .69        |
| Portfolio turnover rate (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 134**      | 276         | 188         | 98         | 158        | 81         |
| a*For the six months ended April 30, 2009 (Unaudited).*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.*e*Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.007 per share and an increase in the ratio of net investment income of 0.07%. Excluding this non-recurring income, total                return would have been 0.07% lower.***Annualized****Not annualized*****Amount is less than $.005.* |

| **Class S**

**Years Ended October 31,**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **2009a**  | **2008**    | **2007**    | **2006**   | **2005b**  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|-------------|------------|------------|
| **Selected Per Share Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **Net asset value, beginning of period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **$ 7.11** | **$ 10.25** | **$ 9.71**  | **$ 8.99** | **$ 8.98** |
| *Income (loss) from investment operations:*

Net investment incomec                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | .10        | .25         | .28         | .25e       | .14        |
| Net realized and unrealized gain (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (.11)      | (3.06)      | .60         | .70        | .04        |
| **Total from investment operations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | (.01)      | (2.81)      | .88         | .95        | .18        |
| *Less distributions from:*

Net investment income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (.07)      | (.24)       | (.34)       | (.23)      | (.17)      |
| Net realized gains                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | —    | (.05)       | —     | —    | —    |
| Tax return of capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | —    | (.04)       | —     | —    | —    |
| **Total distributions**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (.07)      | (.33)       | (.34)       | (.23)      | (.17)      |
| Redemption fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | —    | .00***      | .00***      | .00***     | .00***     |
| **Net asset value, end of period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **$ 7.03** | **$ 7.11**  | **$ 10.25** | **$ 9.71** | **$ 8.99** |
| Total Return (%)d                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | (.09)**    | (28.11)     | 9.17        | 10.76e     | 1.97**     |
| **Ratios to Average Net Assets and Supplemental Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Net assets, end of period ($ millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 223        | 245         | 393         | 411        | 153        |
| Ratio of expenses before expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | .85*       | .79         | .73         | .85        | .79*       |
| Ratio of expenses after expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | .74*       | .77         | .73         | .74        | .74*       |
| Ratio of net investment income (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | 2.88*      | 2.70        | 2.78        | 2.74e      | 2.43*      |
| Portfolio turnover rate (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 134**      | 276         | 188         | 98         | 158        |
| a*For the six months ended April 30, 2009 (Unaudited).*b*For the period from March 14, 2005 (commencement of operations of Class S shares) to October 31, 2005.*c*Based on average shares outstanding during the period.*d*Total return would have been lower had certain expenses not been reduced.*e*Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.007 per share and an increase in the ratio of net investment income of 0.07%. Excluding this non-recurring income, total                return would have been 0.07% lower.***Annualized****Not annualized*****Amount is less than $.005.* |

| **Institutional Class**

**Years Ended October 31,**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **2009a**  | **2008**    | **2007**    | **2006**   | **2005**   | **2004**   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|-------------|------------|------------|------------|
| **Selected Per Share Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **Net asset value, beginning of period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | **$ 7.12** | **$ 10.26** | **$ 9.72**  | **$ 9.01** | **$ 8.70** | **$ 8.45** |
| *Income (loss) from investment operations:*

Net investment incomeb                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | .10        | .26         | .29         | .26d       | .24        | .16        |
| Net realized and unrealized gain (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (.12)      | (3.06)      | .60         | .69        | .31        | .26        |
| **Total from investment operations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | (.02)      | (2.80)      | .89         | .95        | .55        | .42        |
| *Less distributions from:*

Net investment income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | (.07)      | (.25)       | (.35)       | (.24)      | (.24)      | (.17)      |
| Net realized gains                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | —    | (.05)       | —     | —    | —    | —    |
| Tax return of capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | —    | (.04)       | —     | —    | —    | —    |
| **Total distributions**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (.07)      | (.34)       | (.35)       | (.24)      | (.24)      | (.17)      |
| Redemption fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | —    | .00***      | .00***      | .00***     | .00***     | —    |
| **Net asset value, end of period**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **$ 7.03** | **$ 7.12**  | **$ 10.26** | **$ 9.72** | **$ 9.01** | **$ 8.70** |
| Total Return (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (.19)**    | (27.99)c    | 9.32c       | 10.76c,d   | 6.32c      | 5.01c      |
| **Ratios to Average Net Assets and Supplemental Data**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Net assets, end of period ($ millions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 4          | .27         | .42         | .42        | .39        | .35        |
| Ratio of expenses before expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | .69*       | .75         | .68         | .74        | .69        | .73        |
| Ratio of expenses after expense reductions (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | .69*       | .71         | .61         | .60        | .62        | .69        |
| Ratio of net investment income (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 2.93*      | 2.76        | 2.89        | 2.88d      | 2.74       | 1.89       |
| Portfolio turnover rate (%)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 134**      | 276         | 188         | 98         | 158        | 81         |
| a*For the six months ended April 30, 2009 (Unaudited).*b*Based on average shares outstanding during the period.*c*Total return would have been lower had certain expenses not been reduced.*d*Includes non-recurring income from the Advisor recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with sales of DWS Funds. The non-recurring income resulted in an increase in net investment income of $0.007 per share and an increase in the ratio of net investment income of 0.07%. Excluding this non-recurring income, total                return would have been 0.07% lower.***Annualized****Not annualized*****Amount is less than $.005.* |

**Notes to Financial Statements(Unaudited)**

**A. Significant Accounting Policies**

DWS Balanced Fund (the ``Fund'') is registered under the Investment Company Act of 1940, as amended (the ``1940 Act''), as an open-end, diversified 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. Class B shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions. Class B shares automatically convert to Class A        shares six years after issuance. Class C shares are offered to investors without an initial sales charge but are subject to higher ongoing expenses than Class A shares and a contingent deferred sales charge payable upon certain redemptions within one year of purchase. Class C shares do not automatically convert into another class. 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 distribution and service fees, administration fee, services to shareholders 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. Equity securities and exchange traded funds ("ETFs") are valued at the most recent sale price or official closing price reported on the exchange (US or foreign) or over-the-counter market on which the security or ETF is traded most        extensively. Securities and ETFs for which no sales are reported are valued at the calculated mean between the most recent bid and asked quotations on the relevant market or, if a mean cannot be determined, at the most recent bid quotation.

Debt securities are valued by independent pricing services approved by the Trustees of the Fund. If the pricing services are unable to provide valuations, the securities are valued at the average of the means based on the most recent bid 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.

Money market instruments purchased with an original or remaining maturity of sixty days or less, maturing at par, are valued at amortized cost. Investments in open-end investments companies and Cash Management QP Trust are valued at their net asset value each business day.

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 Trustees. 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 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.

The Fund adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"), effective at the beginning of the Fund's fiscal year. Disclosure about the classification of fair value measurements is included at the end of the Fund's Investment Portfolio.

**New Accounting Pronouncements.** In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161 ("FAS 161"), "Disclosures about Derivative Instruments and Hedging Activities." FAS 161 requires enhanced disclosure about an entity's derivative and hedging activities including qualitative disclosures about the objectives and strategies for using derivatives, quantitative disclosures        about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. FAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008. Management is currently reviewing the enhanced disclosure requirements for the adoption of FAS 161.

In addition, in April 2009, FASB issued FASB Staff Position No. 157-4, "Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" ("FSP 157-4"). FSP 157-4 provides additional guidance for estimating fair value in accordance with FAS 157, when the volume and level of activity for the asset or liability have        significantly decreased as well as guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for fiscal years and interim periods ending after June 15, 2009. Management is currently reviewing the enhanced disclosure requirements for the adoption of FSP 157-4.

**Securities Lending.** The Fund may lend securities to 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 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 agents will use their best efforts 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.

**Credit Default Swap Contracts.** A credit default swap is a contract between a buyer and a seller of protection against pre-defined credit events for the reference entity. The Fund may buy or sell credit default swap contracts to seek to increase the Fund's income, to add leverage to the portfolio, to gain exposure to an underlying issuer's credit quality characteristics without directly investing in that        issuer, or to hedge the risk of default on Fund securities. As a seller in the credit default swap contract, the Fund is required to pay the par (or other agreed-upon) value of the referenced entity to the counterparty with the occurrence of a credit event by a third party, such as a US or foreign corporate issuer, on the reference entity, which would likely result in a loss to the Fund. In return, the Fund receives from the counterparty a periodic stream of payments over the term of        the contract provided that no credit event has occurred. If no credit event occurs, the Fund keeps the stream of payments with no payment obligations. The Fund may also buy credit default swap contracts in order to hedge against the risk of a credit event on debt securities, in which case the Fund functions as the counterparty referenced above. This involves the risk that the contract may expire worthless. It also involves counterparty risk that the seller may fail to satisfy its        payment obligations to the Fund with the occurrence of a credit event. When the Fund sells a credit default swap contract it will cover its commitment. This may be achieved by, among other methods, maintaining cash or liquid assets equal to the aggregate notional value of the reference entities for all outstanding credit default swap contracts sold by the Fund.

Credit default swap contracts are marked to market daily based upon quotations from a board approved pricing vendor and the change in value, if any, is recorded daily as unrealized gain or loss. An upfront payment made by the Fund is recorded as an asset on the Statement of Assets and Liabilities. An upfront payment received by the Fund is recorded as a liability on the Statement of Assets and Liabilities. Under the        terms of the credit default swap contracts, the Fund receives or makes quarterly payments based on a specified interest rate on a fixed notional amount. These payments are recorded as a realized gain or loss on the Statement of Operations. Payments received or made as a result of a credit event or termination of the contract are recognized, net of a proportional amount of the upfront payment, as realized gains or losses.

**Foreign Currency Translations.** The books and records of the Fund are maintained in US dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into US dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into US dollars at the prevailing exchange rates on the        respective dates of the transactions.

Net realized and unrealized gains and losses on foreign currency transactions represent net gains and losses between trade and settlement dates on securities transactions, the disposition of forward foreign currency exchange contracts and foreign currencies, and the difference between the amount of net investment income accrued and the US dollar amount actually received. That portion of both realized and unrealized gains and losses        on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed but is included with net realized and unrealized gain/appreciation and loss/depreciation on investments.

**Forward Foreign Currency Exchange Contracts.** A forward foreign currency exchange contract ("forward currency contract") is a commitment to purchase or sell a foreign currency at the settlement date at a negotiated rate. The Fund may enter into forward currency contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign currency denominated portfolio holdings, to        facilitate transactions in foreign currency denominated securities and to enhance the total returns*.* The Fund may also enter into forward currency contracts as part of its global tactical asset allocation overlay strategy.

Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies and unrealized gain (loss) is recorded daily. Sales and purchases of forward currency contracts having the same settlement date and broker are offset and any gain (loss) is realized on the date of offset; otherwise, gain (loss) is realized on settlement date. Realized and unrealized gains and losses which represent the        difference between the value of a forward currency contract to buy and a forward currency contract to sell are included in net realized and unrealized gain (loss) from foreign currency.

Certain risks may arise upon entering into forward currency contracts from the potential inability of counterparties to meet the terms of their contracts. Additionally, when utilizing forward currency contracts to hedge, the Fund gives up the opportunity to profit from favorable exchange rate movement during the term of the contract.

**Futures Contracts.** A futures contract is an agreement between a buyer or seller and an established futures exchange or its clearinghouse in which the buyer or seller agrees to take or make a delivery of a specific amount of a financial instrument at a specified price on a specific date (settlement date). The Fund may utilize futures contracts as an efficient means of managing allocations between assets        or to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the market. The Fund may also utilize futures as part of its global tactical asset allocation overlay strategy.

Upon entering into a futures contract, the Fund is required to deposit with a financial intermediary an amount ("initial margin") equal to a certain percentage of the face value indicated in the futures contract. Subsequent payments ("variation margin") are made or received by the Fund dependent upon the daily fluctuations in the value of the underlying security and are recorded for financial reporting purposes as unrealized gains        or losses by the Fund. When entering into a closing transaction, the Fund will realize a gain or loss equal to the difference between the value of the futures contract to sell and the futures contract to buy. Futures contracts are valued at the most recent settlement price.

Certain risks may arise upon entering into futures contracts, including the risk that an illiquid secondary market will limit the Fund's ability to close out a futures contract prior to the settlement date and that a change in the value of a futures contract may not correlate exactly with the changes in the value of the securities. When utilizing futures contracts to hedge, the Fund gives up the opportunity to profit from favorable        price movements in the hedged positions during the term of the contract. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities.

**Senior Loans.** Senior loans are portions of loans originated by banks and sold in pieces to investors. These US dollar-denominated fixed and floating rate loans ("Loans") in which the Fund invests, are arranged through private negotiations between the borrower and one or more financial institutions ("Lenders"). The Fund invests in such Loans in the form of participations in Loans ("Participations") or        assignments of all or a portion of loans from third parties ("Assignments"). Participations typically result in the Fund having a contractual relationship only with the Lender, not with the borrower. The Fund has the right to receive payments of principal, interest and any fees to which it is entitled from the Lender selling the Participation and only upon receipt by the Lender of the payments from the borrower. In connection with purchasing Participations, the Fund generally has no        right to enforce compliance by the borrower with the terms of the loan agreement relating to the Loan, nor any rights of set-off against the borrower, and the Fund will not benefit directly from any collateral supporting the Loan in which it has purchased the Participation. As a result, the Fund assumes the credit risk of both the borrower and the Lender that is selling the Participation. Assignments typically result in the Fund having a direct contractual relationship with the        borrower, and the Fund may enforce compliance by the borrower with the terms of the loan agreement. All Senior Loans involve interest rate risk, liquidity risk and credit risk, including the potential default or insolvency of the borrower.

**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 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 a security, the transaction is recorded and the value of the security 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. No interest accrues to the Fund until payment takes place. At the time the Fund enters into this type of 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 securities 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.

At October 31, 2008, the Fund had a net tax basis capital loss carryforward of approximately $45,598,000, which may be applied against any realized net taxable capital gains of each succeeding year until fully utilized or until October 31, 2016, the expiration date, whichever occurs first.

The Fund has reviewed the tax positions for the open tax years as of October 31, 2008 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 remain subject to examination by the Internal Revenue Service.

**Distribution of Income and Gains.** Net investment income of the Fund, if any, is declared and distributed to shareholders quarterly. 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 investments in mortgage backed securities, premium amortization on debt securities, investments in futures and 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. Dividend income is recorded on the ex-dividend date net of foreign withholding taxes. Certain dividends from foreign        securities may be recorded subsequent to the ex-dividend date as soon as the Fund is informed of such dividends. Realized gains and losses from investment transactions are recorded on an identified cost basis. All premiums and discounts are amortized/accreted for financial reporting purposes, with the exception of securities in default of principal.

**B. Purchases and Sales of Securities**

During the six months ended April 30, 2009, purchases and sales of investment securities (excluding short-term investments and US Treasury securities) aggregated $1,063,558,079 and $1,052,719,437, respectively. Purchases and sales of US Treasury securities aggregated $249,879,843 and $222,998,120, respectively.

**C. Related Parties**

**Management Agreement.** Under the Amended and Restated 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. In addition to portfolio management services, the Advisor provides certain administrative services in accordance with the Amended and Restated Management Agreement.

Pursuant to a written contract with the Advisor, Deutsche Asset Management International GmbH ("DeAMi"), a direct, wholly owned subsidiary of Deutsche Bank AG, serves as the subadvisor to the Fund and is responsible for portfolio management of a portion of the large cap value allocation of the Fund. DeAMi is paid for its services by the Advisor from its fee as Investment Advisor to the Fund.

Under the Amended and Restated Management Agreement, the Fund pays a monthly management fee based on the Fund's average daily net assets, computed and accrued daily and payable monthly at the following rates:

| First $1.5 billion of the Fund's average daily net assets | .370% |
|-----------------------------------------------------------|-------|
| Next $500 million of such net assets                      | .345% |
| Next $1.5 billion of such net assets                      | .310% |
| Next $2.0 billion of such net assets                      | .300% |
| Next $2.0 billion of such net assets                      | .290% |
| Next $2.5 billion of such net assets                      | .280% |
| Next $2.5 billion of such net assets                      | .270% |
| Over $12.5 billion of such net assets                     | .260% |

Accordingly, for the six months ended April 30, 2009, the fee pursuant to the Management Agreement was equivalent to an annualized effective rate of 0.37% of the Fund's average daily net assets.

For the period from November 1, 2008 through the expiration dates noted, the Advisor has contractually agreed to waive all or a portion of its management fee and reimburse or pay certain operating expenses of the Fund (excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest) to the extent necessary to maintain the operating expenses of:

| * * |   | **Expiration Date** |
|----------|--------|---------------------|
| Class A  | .93%   | November 17, 2008   |
| Class B  | 1.95%  | September 30, 2009  |
| Class S  | .74%   | July 14, 2009       |

**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 April 30, 2009, the        Advisor received an Administration fee of $495,707, of which $82,878 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 for the Fund. Pursuant to a sub-transfer agency agreement among 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 shareholder servicing fee it receives from the Fund. For the six months ended April 30, 2009, the amounts charged to the Fund by DISC were as follows:

| **Services to Shareholders** | **Total Aggregated** | **Waived**    | **Unpaid at April 30, 2009** |
|------------------------------|----------------------|---------------|-----------------------------------|
| Class A                      | $ 704,328            | $ 49,065      | $ 234,218                         |
| Class B                      | 53,826               | —       | 40,069                            |
| Class C                      | 25,759               | —       | 10,975                            |
| Class S                      | 285,388              | 130,688       | 64,882                            |
| Institutional Class          | 242                  | —       | 80                                |
|                         | **$ 1,069,543**      | **$ 179,753** | **$ 350,224**                     |

**Distribution and Service Fees.** Under the Fund's Class B and C 12b-1 Plans, DWS Investments Distributors, Inc. ("DIDI"), an affiliate of the Advisor, receives a fee ("Distribution Fee") of 0.75% of average daily net assets of each of Class B and C shares shares. In accordance with the Fund's Underwriting and Distribution Services Agreement, DIDI enters into related selling group agreements with various        firms at various rates for sales of Class B and C shares. For the period from October 1, 2008 through January 31, 2009, DIDI had voluntarily agreed to waive the 0.75% 12b-1 distribution fee for Class B shares only. For the six months ended April 30, 2009, the Distribution Fee was as follows:

| **Distribution Fee** | **Total Aggregated** | **Waived**   | **Unpaid at April 30, 2009** |
|----------------------|----------------------|--------------|-----------------------------------|
| Class B              | $ 70,003             | $ 38,234     | $ —                         |
| Class C              | 61,532               | —      | 12,976                            |
|                 | **$ 131,535**        | **$ 38,234** | **$ 12,976**                      |

In addition, DIDI provides information and administrative services for a fee ("Service Fee") to Class A, B and C shareholders at an annual rate of up to 0.25% of average daily net assets for each such class. 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        April 30, 2009, the Service Fee was as follows:

| **Service Fee** | **Total Aggregated** | **Unpaid at April 30, 2009** | **Annualized Effective Rate** |
|-----------------|----------------------|-----------------------------------|------------------------------------|
| Class A         | $ 884,506            | $ 268,696                         | .24%                               |
| Class B         | 22,732               | 5,005                             | .24%                               |
| Class C         | 20,122               | 5,110                             | .25%                               |
|            | **$ 927,360**        | **$ 278,811**                     |                               |

**Underwriting and Contingent Deferred Sales Charge.** DIDI is the principal underwriter for the Fund. Underwriting commissions paid in connection with the distribution of Class A shares for the six months ended April 30, 2009 aggregated $14,496.

In addition, DIDI receives any contingent deferred sales charge ("CDSC") from Class B share redemptions occurring within six years of purchase and Class C share redemptions occurring within one year of purchase. There is no such charge upon redemption of any share appreciation or reinvested dividends. The CDSC is based on declining rates ranging from 4% to 1% for Class B and 1% for Class C, of the value of the shares redeemed.        For the six months ended April 30, 2009, the CDSC for Class B and C shares aggregated $20,312 and $306, respectively. A deferred sales charge of up to 1% is assessed on certain redemptions for Class A shares. For the six months ended April 30, 2009, DIDI received $47 for 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 April 30, 2009, the amount charged to the Fund by DIMA included in the Statement of Operations under "reports to shareholders" aggregated $32,580, all of which is paid.

**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.

**Cash Management QP Trust.** Pursuant to an Exemptive Order issued by the SEC, the Fund may invest in the Cash Management QP Trust (the "QP Trust") and other affiliated funds managed by the Advisor. The QP Trust seeks to provide as high a level of current income as is consistent with the preservation of capital and the maintenance of liquidity. The QP Trust does not pay the Advisor a management fee        for the affiliated funds' investments in the QP Trust.

**D. Fee Reductions**

In addition, the Fund has entered into an arrangement with its custodian and transfer agent whereby credits realized as a result of uninvested cash balances were used to reduce a portion of the Fund's custodian expenses. During the six months ended April 30, 2009, the Fund's custodian fee was reduced by $31 for the custody credits earned.

**E. 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.

**F. Share Transactions**

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

|                                                               | **Six Months Ended April 30, 2009** | **Year Ended October 31, 2008** |
|--------------------------------------------------------------------|-------------------------------------|--------------------------------------|
|                                                               | **Shares**                          | **Dollars**                          | **Shares** | **Dollars** |
| **Shares sold**                                                    |
| Class A                                                            | 2,320,805                           | $ 15,561,074                         | 5,165,160 | $ 47,909,912 |
| Class B                                                            | 128,695                             | 860,694                              | 246,224 | 2,284,341 |
| Class C                                                            | 215,672                             | 1,430,706                            | 318,017 | 2,950,515 |
| Class S                                                            | 604,801                             | 4,031,191                            | 1,500,840 | 13,953,949 |
| Institutional Class                                                | 24                                  | 155                                  | — | — |
| * *                                                           |                                | **$ 21,883,820**                     |   | **$ 67,098,717** |
| **Shares issued to shareholders in reinvestment of distributions** |
| Class A                                                            | 978,923                             | $ 6,605,065                          | 3,860,707 | $ 36,028,267 |
| Class B                                                            | 22,798                              | 154,769                              | 126,785 | 1,196,258 |
| Class C                                                            | 11,802                              | 79,562                               | 64,095 | 600,257 |
| Class S                                                            | 313,792                             | 2,119,230                            | 1,211,047 | 11,294,779 |
| Institutional Class                                                | 412                                 | 2,785                                | 1,380 | 12,858 |
| * *                                                           |                                | **$ 8,961,411**                      |   | **$ 49,132,419** |
| **Shares redeemed**                                                |
| Class A                                                            | (11,107,816)                        | $ (73,955,286)                       | (21,165,418) | $ (193,421,437) |
| Class B                                                            | (882,234)                           | (5,941,675)                          | (2,289,180) | (21,332,901) |
| Class C                                                            | (365,386)                           | (2,415,347)                          | (900,759) | (8,112,207) |
| Class S                                                            | (3,588,057)                         | (24,016,547)                         | (6,608,089) | (59,926,281) |
| Institutional Class                                                | —                             | —                              | (4,170) | (41,451) |
| * *                                                           |                                | **$ (106,328,855)**                  |   | **$ (282,834,277)** |
| **Redemption fees**                                                |                                | **$ —**                        |   | **$ 10,445** |
| **Shares issued in tax-free reorganization**                       |
| Class A                                                            | 7,431,198                           | $ 51,798,537                         | — | — |
| Class B                                                            | 177,610                             | 1,243,213                            | — | — |
| Class C                                                            | 425,411                             | 2,960,757                            | — | — |
| Institutional Class                                                | 515,915                             | 3,601,205                            | — | — |
|                                                               |                                | **$ 59,603,712**                     |   | **$ —** |
| **Net increase (decrease)**                                        |
| Class A                                                            | (376,890)                           | $ 9,390                              | (12,139,551) | $ (109,475,455) |
| Class B                                                            | (553,131)                           | (3,682,999)                          | (1,916,171) | (17,852,257) |
| Class C                                                            | 287,499                             | 2,055,678                            | (518,647) | (4,561,432) |
| Class S                                                            | (2,669,464)                         | (17,866,126)                         | (3,896,202) | (34,674,959) |
| Institutional Class                                                | 516,351                             | 3,604,145                            | (2,790) | (28,593) |
| * *                                                           |                                | **$ (15,879,912)**                   |   | **$ (166,592,696)** |

**G. Fund Merger**

On April 20, 2009, the Fund acquired all of the net assets of DWS Value Builder Fund pursuant to a plan of reorganization approved by shareholders on March 27, 2009. The acquisition was accomplished by a tax-free exchange of 7,460,097 Class A shares, 177,915 Class B shares, 421,956 Class C shares and 509,996 Institutional Class Shares of DWS Value Builder Fund for 7,431,198 Class A shares, 177,610 Class B shares, 425,411 Class C        shares and 515,915 Institutional Class Shares of DWS Balanced Fund, respectively, outstanding on April 20, 2009. DWS Value Builder Fund's net assets at that date, $59,603,712, including $6,626,156 of net unrealized depreciation, were combined with those of the Fund. The aggregate net assets of the Fund immediately before the acquisition were $1,005,036,041. The combined net assets of the Fund immediately following the acquisition were $1,064,639,753.

**Summary of Management Fee Evaluation by Independent Fee Consultant**

October 24, 2008

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 2008, 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.

**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, serve on the board of directors of a private market research company, 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 129 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, Strategic Insight, 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

**Summary of Administrative Fee Evaluation by Independent Fee Consultant**

September 29, 2008

Pursuant to an Order entered into by Deutsche Asset Management (DeAM) with the Attorney General of New York, I, Thomas H. Mack, have been appointed the Independent Fee Consultant for the DWS Funds and have as part of my duties evaluated the reasonableness of the proposed management fees to be charged by DeAM to the DWS Funds, taking onto account a proposal to pass through to the funds certain fund accounting-related charges in        connection with new regulatory requirements. My evaluation considered the following:

• While the proposal would alter the services to be provided under the Administration Agreement, which I consider to be part of fund management under the Order, it is my opinion that the change in services is slight and that the scope of prospective services under the combination of the Advisory and Administration Agreements continues to be comparable with those typically provided to competitive funds        under their management agreements.

• While the proposal would increase fund expenses, according to a pro forma analysis performed by management, the prospective effect is less than .01% for all but seven of the DeAM Funds' 438 active share classes, and in all cases the effect is less than .03% and overall expenses would remain reasonable in my opinion.

Based on the foregoing considerations, in my opinion the fees and expenses for all of the DWS Funds will remain reasonable if the Directors adopt this proposal.

        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, B, C 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, B, C 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**           | A description of 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 endedJune 30is 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 B** | **Class C** | **Class S** | **Institutional Class** |
|-------------------|-------------|-------------|-------------|-------------|-------------------------|
| **Nasdaq Symbol** | KTRAX       | KTRBX       | KTRCX       | KTRSX       | KTRIX                   |
| **CUSIP Number**  | 23336W 106  | 23336W 205  | 23336W 304  | 23336W 502  | 23336W 601              |
| **Fund Number**   | 002         | 202         | 302         | 2033        | 1402                    |

**Privacy Statement**

Dear Valued Client:

We want to make sure you know our policy regarding the way in which our clients' private information is handled at DWS Investments. The following information is issued by DWS Investments Distributors, Inc., Deutsche Investment Management Americas Inc., DeAM Investor Services, Inc., DWS Trust Company and the DWS Funds.

**We consider privacy fundamental to our client relationships and adhere to the policies and practices described below to protect current and former clients' information.**We never sell customer lists or individual client information. Internal policies are in place to protect confidentiality, while allowing client needs to be served. Only individuals who need to do so in carrying out their job        responsibilities may access client information. We maintain physical, electronic and procedural safeguards that comply with federal and state standards to protect confidentiality. These safeguards extend to all forms of interaction with us, including the Internet.

In the normal course of business, clients give us nonpublic personal information on applications and other forms, on our Web sites, and through transactions with us or our affiliates. Examples of the nonpublic personal information collected are name, address, Social Security number, and transaction and balance information. To be able to serve our clients, certain of this client information is shared with affiliated and nonaffiliated        third party service providers such as transfer agents, custodians and broker-dealers to assist us in processing transactions and servicing your account.

In addition, we may disclose the information we collect to companies that perform marketing services on our behalf or to other financial institutions with which we have joint marketing agreements. These organizations may only use client information for the purpose designated by the companies listed above, and additional requirements beyond federal law may be imposed by certain states. To the extent that these state laws apply, we        will comply with them before we share information about you.

We may also disclose nonpublic personal information about you to other parties as required or permitted by law. For example, we are required to or may provide information to government entities or regulatory bodies in response to requests for information or subpoenas, to private litigants in certain circumstances, to law enforcement authorities, or any time we believe it necessary to protect the firm.

At any time, if you have questions about our policy, please write to us at:

DWS Investments        Attention: Correspondence — Chicago        P.O. Box 219415        Kansas City, MO 64121-9415 September 2008

**Notes**

**Notes**

**Notes**

**Notes**

**Notes**

 

| **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**                                                                                                                                                                                                                                                                                                                                                                          |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |                                                                                                                                                                                                                                                                                                                                                                                                                             |
|         | 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 Chairman of the Board, P.O.                            Box 100176, Cape Coral, FL 33910. |
|         |                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **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. |

 

 

 

 

Form N-CSRS Item F

 

**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: | July 1, 2009 |
|-------|--------------|

 

 

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.

 

| Registrant: | DWS Balanced Fund |
|-------------|-------------------|

 

| By: | /s/Michael G. Clark |
|-----|---------------------|

|   | Michael G. Clark |
|--------|------------------|

President

 

| Date: | July 1, 2009 |
|-------|--------------|

 

 

| By: | /s/Paul Schubert |
|-----|------------------|

|   | Paul Schubert |
|--------|---------------|

Chief Financial Officer and Treasurer

 

Date:                                        July 1, 2009