N-CSRS

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

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-4707

Fidelity Advisor Series II
(Exact name of registrant as specified in charter)

82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices)       (Zip code)

Scott C. Goebel, Secretary

82 Devonshire St.

Boston, Massachusetts 02109
(Name and address of agent for service)

Registrant's telephone number, including area code: 617-563-7000

Date of fiscal year end:	August 31
Date of reporting period:	February 28, 2009

Item 1. Reports to Stockholders

(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Intermediate Bond
Fund - Class A, Class T, Class B
and Class C

Semiannual Report

February 28, 2009

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message	<Click Here>	Ned Johnson's message to shareholders.
Shareholder Expense Example	<Click Here>	An example of shareholder expenses.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.

One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.

You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).

A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.

We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2008 to February 28, 2009).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio	Beginning Account Value September 1, 2008	Ending Account Value February 28, 2009	Expenses Paid During Period* September 1, 2008 to February 28, 2009
Class A	.88%
Actual		$ 1,000.00	$ 938.70	$ 4.23
HypotheticalA		$ 1,000.00	$ 1,020.43	$ 4.41
Class T	.82%
Actual		$ 1,000.00	$ 939.00	$ 3.94
HypotheticalA		$ 1,000.00	$ 1,020.73	$ 4.11
Class B	1.55%
Actual		$ 1,000.00	$ 935.50	$ 7.44
HypotheticalA		$ 1,000.00	$ 1,017.11	$ 7.75
Class C	1.62%
Actual		$ 1,000.00	$ 935.10	$ 7.77
HypotheticalA		$ 1,000.00	$ 1,016.76	$ 8.10
Institutional Class	.54%
Actual		$ 1,000.00	$ 939.50	$ 2.60
HypotheticalA		$ 1,000.00	$ 1,022.12	$ 2.71

^A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.

Semiannual Report

Investment Changes (Unaudited)

The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments in each non-money market Fidelity Central Fund.

Quality Diversification (% of fund's net assets)
As of February 28, 2009		As of August 31, 2008
	U.S. Government and U.S. Government Agency Obligations 36.1%		U.S. Government and U.S. Government Agency Obligations 39.3%
	AAA 11.7%		AAA 14.1%
	AA 6.5%		AA 8.2%
	A 14.8%		A 10.8%
	BBB 23.3%		BBB 20.1%
	BB and Below 5.1%		BB and Below 4.5%
	Not Rated 0.4%		Not Rated 0.3%
	Short-Term Investments and Net Other Assets 2.1%		Short-Term Investments and Net Other Assets 2.7%

We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Securities rated BB or below were rated investment grade at the time of acquisition.

Weighted Average Maturity as of February 28, 2009
		6 months ago
Years	4.7	4.5

The weighted average maturity is based on the dollar-weighted average length of time until principal payments are expected or until securities reach maturity, taking into account any maturity shortening feature such as a call, refunding or redemption provision.

Duration as of February 28, 2009
		6 months ago
Years	3.5	4.0

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)
As of February 28, 2009 *		As of August 31, 2008 **
	Corporate Bonds 45.8%		Corporate Bonds 39.2%
	U.S. Government and U.S. Government Agency Obligations 36.1%		U.S. Government and U.S. Government Agency Obligations 39.3%
	Asset-Backed Securities 4.3%		Asset-Backed Securities 5.3%
	CMOs and Other Mortgage Related Securities 11.4%		CMOs and Other Mortgage Related Securities 13.1%
	Other Investments 0.3%		Other Investments 0.4%
	Short-Term Investments and Net Other Assets 2.1%		Short-Term Investments and Net Other Assets 2.7%

* Foreign investments	9.1%	** Foreign investments	10.1%
* Futures and Swaps	17.7%	** Futures and Swaps	18.7%

A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com.

Semiannual Report

Investments February 28, 2009 (Unaudited)

Showing Percentage of Net Assets

Nonconvertible Bonds - 33.1%
	Principal Amount		Value
CONSUMER DISCRETIONARY - 2.6%
Auto Components - 0.2%
DaimlerChrysler NA Holding Corp.:
5.75% 9/8/11	$ 1,126,000		$ 1,060,123
5.875% 3/15/11	418,000		397,883
			1,458,006
Hotels, Restaurants & Leisure - 0.1%
McDonald's Corp. 5.35% 3/1/18	471,000		485,572
Household Durables - 0.1%
Fortune Brands, Inc. 5.125% 1/15/11	853,000		840,700
Media - 1.6%
AOL Time Warner, Inc.:
6.75% 4/15/11	379,000		384,622
6.875% 5/1/12	491,000		494,928
Comcast Cable Communications, Inc. 6.75% 1/30/11	103,000		106,728
Comcast Corp.:
4.95% 6/15/16	378,000		337,863
5.5% 3/15/11	77,000		78,122
5.7% 5/15/18	597,000		551,686
5.85% 1/15/10	12,000		12,148
COX Communications, Inc.:
4.625% 1/15/10	431,000		427,317
4.625% 6/1/13	899,000		812,825
News America, Inc.:
4.75% 3/15/10	49,000		47,809
5.3% 12/15/14	176,000		165,753
6.9% 3/1/19 (b)	3,089,000		2,924,659
Time Warner Cable, Inc.:
5.4% 7/2/12	492,000		473,350
5.85% 5/1/17	1,328,000		1,200,953
6.2% 7/1/13	468,000		453,231
6.75% 7/1/18	1,486,000		1,408,838
8.75% 2/14/19	673,000		718,390
Time Warner, Inc. 5.875% 11/15/16	1,232,000		1,154,409
Viacom, Inc. 6.125% 10/5/17	905,000		744,828
			12,498,459
Multiline Retail - 0.0%
Macy's Retail Holdings, Inc. 7.875% 7/15/15	472,000		338,589
Nonconvertible Bonds - continued
	Principal Amount		Value
CONSUMER DISCRETIONARY - continued
Specialty Retail - 0.6%
Home Depot, Inc. 2.0463% 12/16/09 (g)	$ 861,000		$ 836,066
Staples, Inc. 9.75% 1/15/14	3,990,000		4,186,172
			5,022,238
TOTAL CONSUMER DISCRETIONARY			20,643,564
CONSUMER STAPLES - 2.2%
Beverages - 0.5%
Anheuser-Busch Companies, Inc. 6.45% 9/1/37	15,000		12,802
Diageo Capital PLC:
5.2% 1/30/13	209,000		212,724
5.75% 10/23/17	2,056,000		2,048,091
FBG Finance Ltd. 5.125% 6/15/15 (b)	591,000		501,975
PepsiCo, Inc. 7.9% 11/1/18	840,000		1,009,443
			3,785,035
Food & Staples Retailing - 0.4%
CVS Caremark Corp.:
2.5025% 6/1/10 (g)	462,000		447,864
6.036% 12/10/28 (b)	462,422		352,953
6.302% 6/1/37 (g)	3,463,000		2,129,745
			2,930,562
Food Products - 0.4%
Cargill, Inc. 6% 11/27/17 (b)	142,000		132,470
General Mills, Inc.:
5.2% 3/17/15	867,000		870,731
5.65% 2/15/19	319,000		318,733
Kraft Foods, Inc.:
5.625% 11/1/11	737,000		770,218
6.125% 2/1/18	1,012,000		1,005,429
6.75% 2/19/14	109,000		116,347
			3,213,928
Personal Products - 0.0%
Avon Products, Inc. 4.8% 3/1/13	360,000		351,202
Tobacco - 0.9%
Altria Group, Inc. 9.7% 11/10/18	3,399,000		3,558,746
Philip Morris International, Inc.:
4.875% 5/16/13	1,211,000		1,223,969
5.65% 5/16/18	807,000		783,291
Nonconvertible Bonds - continued
	Principal Amount		Value
CONSUMER STAPLES - continued
Tobacco - continued
Reynolds American, Inc.:
6.75% 6/15/17	$ 589,000		$ 497,445
7.25% 6/15/37	1,575,000		1,146,465
			7,209,916
TOTAL CONSUMER STAPLES			17,490,643
ENERGY - 3.6%
Energy Equipment & Services - 0.5%
DCP Midstream LLC 9.75% 3/15/19 (b)	687,000		666,026
Noble Drilling Corp. 5.875% 6/1/13	218,000		211,537
Transocean Ltd. 5.25% 3/15/13	698,000		691,357
Weatherford International Ltd.:
4.95% 10/15/13	351,000		299,069
5.15% 3/15/13	1,803,000		1,594,754
			3,462,743
Oil, Gas & Consumable Fuels - 3.1%
Anadarko Petroleum Corp. 6.45% 9/15/36	540,000		412,365
BW Group Ltd. 6.625% 6/28/17 (b)	595,000		312,375
Canadian Natural Resources Ltd.:
5.15% 2/1/13	906,000		866,243
5.7% 5/15/17	233,000		205,766
Canadian Oil Sands Ltd. 4.8% 8/10/09 (b)	830,000		825,243
ConocoPhillips:
4.75% 2/1/14	212,000		214,397
5.75% 2/1/19	1,600,000		1,565,690
Devon Energy Corp. 5.625% 1/15/14	472,000		475,644
Duke Capital LLC 6.25% 2/15/13	201,000		199,251
Duke Energy Field Services:
5.375% 10/15/15 (b)	246,000		201,783
6.875% 2/1/11	466,000		465,033
7.875% 8/16/10	209,000		211,502
El Paso Natural Gas Co. 5.95% 4/15/17	188,000		160,846
Empresa Nacional de Petroleo 6.75% 11/15/12 (b)	341,000		342,211
Enbridge Energy Partners LP:
5.875% 12/15/16	364,000		312,155
6.5% 4/15/18	477,000		416,089
9.875% 3/1/19	590,000		612,419
EnCana Holdings Finance Corp. 5.8% 5/1/14	581,000		563,949
Nonconvertible Bonds - continued
	Principal Amount		Value
ENERGY - continued
Oil, Gas & Consumable Fuels - continued
Enterprise Products Operating LP:
4.625% 10/15/09	$ 392,000		$ 390,080
5.6% 10/15/14	394,000		365,852
5.65% 4/1/13	140,000		133,914
Gazstream SA 5.625% 7/22/13 (b)	1,604,145		1,435,710
Gulf South Pipeline Co. LP 5.75% 8/15/12 (b)	778,000		706,650
Lukoil International Finance BV 6.656% 6/7/22 (b)	246,000		167,280
Nakilat, Inc. 6.067% 12/31/33 (b)	302,000		197,164
Nexen, Inc.:
5.05% 11/20/13	774,000		703,061
5.2% 3/10/15	183,000		156,993
6.4% 5/15/37	1,015,000		716,304
NGPL PipeCo LLC 6.514% 12/15/12 (b)	1,517,000		1,466,584
Pemex Project Funding Master Trust 3.2963% 6/15/10 (b)(g)	251,000		242,215
Petro-Canada:
6.05% 5/15/18	435,000		358,576
6.8% 5/15/38	285,000		209,876
Petroleos Mexicanos 8% 5/3/19 (b)	199,000		195,518
Plains All American Pipeline LP 7.75% 10/15/12	475,000		478,310
Ras Laffan Liquid Natural Gas Co. Ltd. 8.294% 3/15/14 (b)	601,000		619,100
Ras Laffan Liquid Natural Gas Co. Ltd. III 5.832% 9/30/16 (b)	270,000		236,048
Rockies Express Pipeline LLC 6.25% 7/15/13 (b)	548,000		533,313
Source Gas LLC 5.9% 4/1/17 (b)	713,000		534,487
Suncor Energy, Inc. 6.1% 6/1/18	1,222,000		1,007,060
TEPPCO Partners LP:
5.9% 4/15/13	652,000		588,821
6.65% 4/15/18	588,000		495,743
Texas Eastern Transmission LP 6% 9/15/17 (b)	1,462,000		1,365,675
TransCanada PipeLines Ltd. 6.35% 5/15/67 (g)	477,000		288,585
Transcontinental Gas Pipe Line Corp. 6.4% 4/15/16	525,000		503,484
Valero Energy Corp. 6.625% 6/15/37	745,000		568,823
XTO Energy, Inc.:
5% 1/31/15	352,000		326,767
Nonconvertible Bonds - continued
	Principal Amount		Value
ENERGY - continued
Oil, Gas & Consumable Fuels - continued
XTO Energy, Inc.: - continued
5.65% 4/1/16	$ 242,000		$ 227,133
5.9% 8/1/12	896,000		888,064
			24,470,151
TOTAL ENERGY			27,932,894
FINANCIALS - 15.0%
Capital Markets - 3.2%
Bear Stearns Companies, Inc.:
1.2625% 10/22/10 (g)	471,000		453,166
1.346% 8/21/09 (g)	236,000		232,322
1.3525% 7/16/09 (g)	116,000		114,626
2.4556% 9/9/09 (g)	256,000		251,859
3.25% 3/25/09	138,000		138,005
4.245% 1/7/10	245,000		240,140
4.5% 10/28/10	369,000		366,172
5.3% 10/30/15	236,000		217,660
5.85% 7/19/10	759,000		765,503
6.95% 8/10/12	272,000		281,538
BlackRock, Inc. 6.25% 9/15/17	2,338,000		2,223,291
Goldman Sachs Group, Inc.:
5.25% 10/15/13	1,188,000		1,099,008
5.45% 11/1/12	759,000		731,626
5.95% 1/18/18	803,000		717,780
6.15% 4/1/18	397,000		360,734
6.6% 1/15/12	344,000		345,012
6.75% 10/1/37	1,280,000		910,122
6.875% 1/15/11	55,000		55,752
7.5% 2/15/19	2,354,000		2,331,505
Janus Capital Group, Inc.:
6.125% 9/15/11	483,000		338,026
6.5% 6/15/12	840,000		567,158
Lazard Group LLC:
6.85% 6/15/17	773,000		577,694
7.125% 5/15/15	277,000		210,270
Merrill Lynch & Co., Inc.:
5.45% 2/5/13	2,104,000		1,878,333
6.15% 4/25/13	583,000		512,749
6.875% 4/25/18	534,000		444,317
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Capital Markets - continued
Morgan Stanley:
1.6475% 1/9/12 (g)	$ 1,126,000		$ 925,347
1.6975% 1/9/14 (g)	1,007,000		674,887
4.75% 4/1/14	160,000		134,161
5.05% 1/21/11	613,000		604,548
5.45% 1/9/17	200,000		172,580
5.95% 12/28/17	511,000		450,972
6.6% 4/1/12	1,151,000		1,142,887
6.625% 4/1/18	1,475,000		1,362,016
6.75% 4/15/11	168,000		168,688
Northern Trust Corp. 5.5% 8/15/13	272,000		281,379
The Bank of New York, Inc. 4.95% 11/1/12	778,000		782,530
UBS AG Stamford Branch:
5.75% 4/25/18	2,246,000		1,963,808
5.875% 12/20/17	601,000		532,454
			25,560,625
Commercial Banks - 3.2%
American Express Bank FSB 5.5% 4/16/13	2,685,000		2,541,049
ANZ National International Ltd. 6.2% 7/19/13 (b)	221,000		213,721
Bank One Corp.:
5.25% 1/30/13	187,000		181,658
7.875% 8/1/10	139,000		143,427
BB&T Corp. 6.5% 8/1/11	250,000		254,879
Chase Manhattan Corp. 7.875% 6/15/10	313,000		320,346
Credit Suisse First Boston 6% 2/15/18	2,057,000		1,866,156
Credit Suisse First Boston New York Branch 5% 5/15/13	1,368,000		1,320,721
DBS Bank Ltd. (Singapore) 1.4544% 5/16/17 (b)(g)	1,050,580		829,958
Export-Import Bank of Korea:
5.125% 2/14/11	588,000		568,376
5.25% 2/10/14 (b)	114,000		102,336
5.5% 10/17/12	454,000		429,775
Fifth Third Bancorp:
4.5% 6/1/18	25,000		15,680
8.25% 3/1/38	423,000		306,532
HBOS PLC 6.75% 5/21/18 (b)	679,000		545,088
HSBC Holdings PLC 1.6125% 10/6/16 (g)	130,000		104,248
JPMorgan Chase Bank 6% 10/1/17	422,000		399,260
KeyBank NA 7% 2/1/11	226,000		223,372
Korea Development Bank:
3.875% 3/2/09	720,000		720,000
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Commercial Banks - continued
Korea Development Bank: - continued
4.625% 9/16/10	$ 369,000		$ 359,110
4.75% 7/20/09	189,000		188,111
Manufacturers & Traders Trust Co. 2.935% 4/1/13 (b)(g)	82,159		68,733
National City Bank, Cleveland:
4.15% 8/1/09	1,907,000		1,893,418
4.5% 3/15/10	592,000		588,230
PNC Funding Corp.:
1.3144% 1/31/12 (g)	1,204,000		957,662
7.5% 11/1/09	408,000		406,560
Rabobank Capital Funding Trust II 5.26% (b)(g)	115,000		49,450
Santander Issuances SA Unipersonal:
1.885% 6/20/16 (b)(g)	397,758		299,487
5.805% 6/20/16 (b)(g)	846,000		592,200
Sovereign Bank 2.88% 8/1/13 (g)	186,453		139,051
Standard Chartered Bank 6.4% 9/26/17 (b)	3,661,000		2,928,185
UniCredit Luxembourg Finance SA 5.584% 1/13/17 (b)(g)	590,000		265,500
Union Planters Corp. 7.75% 3/1/11	121,000		117,571
UnionBanCal Corp. 5.25% 12/16/13	133,000		124,029
Wachovia Bank NA 4.875% 2/1/15	283,000		252,527
Wachovia Corp.:
1.2244% 10/15/11 (g)	808,000		716,897
1.255% 4/23/12 (g)	109,000		94,004
2.2525% 12/1/09 (g)	219,000		216,359
5.625% 10/15/16	684,000		608,322
5.75% 6/15/17	590,000		553,509
Wells Fargo & Co.:
4.2% 1/15/10	530,000		529,333
5.625% 12/11/17	2,063,000		1,958,156
			24,992,986
Consumer Finance - 2.0%
American Express Credit Corp. 5.875% 5/2/13	117,000		107,454
American General Finance Corp. 6.9% 12/15/17	960,000		381,707
Capital One Financial Corp. 2.4694% 9/10/09 (g)	660,000		635,479
Discover Financial Services:
2.6288% 6/11/10 (g)	810,000		717,763
6.45% 6/12/17	460,000		348,004
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Consumer Finance - continued
General Electric Capital Corp.:
4.8% 5/1/13	$ 5,300,000		$ 4,992,107
5.625% 9/15/17	1,414,000		1,232,375
6.375% 11/15/67 (g)	1,700,000		985,584
Household Finance Corp.:
6.375% 10/15/11	374,000		364,201
7% 5/15/12	94,000		93,473
HSBC Finance Corp.:
5.25% 1/14/11	263,000		258,123
5.25% 1/15/14	212,000		198,179
MBNA Corp. 7.5% 3/15/12	324,000		299,016
Nissan Motor Acceptance Corp. 4.625% 3/8/10 (b)	855,000		803,321
ORIX Corp. 5.48% 11/22/11	77,000		53,320
SLM Corp.:
1.2994% 7/27/09 (g)	531,000		494,347
1.3194% 7/26/10 (g)	2,393,000		1,971,777
1.3894% 10/25/11 (g)	472,000		330,708
2.1963% 3/15/11 (g)	23,000		17,467
4.5% 7/26/10	1,636,000		1,293,373
Systems 2001 Asset Trust LLC 7.156% 12/15/11 (b)	82,954		70,598
			15,648,376
Diversified Financial Services - 2.2%
Bank of America Corp. 7.4% 1/15/11	1,744,000		1,619,095
BTM Curacao Holding NV 1.8975% 12/19/16 (b)(g)	215,437		166,480
CIT Group, Inc.:
1.3866% 6/8/09 (g)	236,000		225,628
4.75% 12/15/10	165,000		125,285
5.4% 2/13/12	494,000		372,898
Citigroup, Inc.:
1.3356% 5/18/11 (g)	566,000		473,546
5.3% 10/17/12	2,125,000		1,884,956
5.5% 4/11/13	2,400,000		2,173,222
6.125% 5/15/18	333,000		287,166
6.5% 1/18/11	263,000		248,065
6.5% 8/19/13	1,239,000		1,155,116
CME Group, Inc. 5.75% 2/15/14	102,000		102,659
GlaxoSmithKline Capital, Inc. 5.65% 5/15/18	1,260,000		1,297,212
ILFC E-Capital Trust I 5.9% 12/21/65 (b)(g)	603,000		120,600
International Lease Finance Corp.:
5.4% 2/15/12	577,000		372,227
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Diversified Financial Services - continued
International Lease Finance Corp.: - continued
5.65% 6/1/14	$ 2,025,000		$ 1,184,315
6.375% 3/25/13	303,000		175,740
6.625% 11/15/13	548,000		312,360
JPMorgan Chase & Co.:
4.891% 9/1/15 (g)	549,000		440,921
5.6% 6/1/11	623,000		635,127
5.75% 1/2/13	446,000		440,520
6.75% 2/1/11	76,000		77,665
Prime Property Funding, Inc.:
5.125% 6/1/15 (b)	219,000		144,540
5.5% 1/15/14 (b)	140,000		95,810
5.7% 4/15/17 (b)	341,000		218,311
TECO Finance, Inc. 7% 5/1/12	1,500,000		1,419,386
TransCapitalInvest Ltd. 5.67% 3/5/14 (b)	652,000		479,220
ZFS Finance USA Trust II 6.45% 12/15/65 (b)(g)	1,008,000		410,280
ZFS Finance USA Trust IV 5.875% 5/9/32 (b)(g)	503,000		193,816
ZFS Finance USA Trust V 6.5% 5/9/67 (b)(g)	805,000		317,975
			17,170,141
Insurance - 1.4%
Assurant, Inc.:
5.625% 2/15/14	385,000		317,870
6.75% 2/15/34	396,000		247,243
Axis Capital Holdings Ltd. 5.75% 12/1/14	112,000		86,486
Great-West Life & Annuity Insurance Co. 7.153% 5/16/46 (b)(g)	300,000		186,000
Jackson National Life Global Funding 5.375% 5/8/13 (b)	152,000		138,883
Liberty Mutual Group, Inc. 6.5% 3/15/35 (b)	120,000		72,919
MetLife, Inc.:
5% 6/15/15	234,000		217,203
6.125% 12/1/11	199,000		199,340
7.717% 2/15/19	1,116,000		1,076,811
Metropolitan Life Global Funding I:
4.625% 8/19/10 (b)	664,000		646,646
5.125% 4/10/13 (b)	113,000		107,950
Monumental Global Funding II 5.65% 7/14/11 (b)	333,000		335,954
Monumental Global Funding III 5.5% 4/22/13 (b)	443,000		390,456
Pacific Life Global Funding 5.15% 4/15/13 (b)	1,522,000		1,484,579
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Insurance - continued
Pennsylvania Mutual Life Insurance Co. 6.65% 6/15/34 (b)	$ 3,000,000		$ 2,498,835
Prudential Financial, Inc.:
5.15% 1/15/13	436,000		390,070
5.4% 6/13/35	91,000		53,826
5.5% 3/15/16	86,000		71,865
5.7% 12/14/36	77,000		47,031
8.875% 6/15/68 (g)	598,000		340,860
QBE Insurance Group Ltd. 5.647% 7/1/23 (b)(g)	673,000		316,310
Symetra Financial Corp. 6.125% 4/1/16 (b)	1,043,000		822,082
The Chubb Corp. 5.75% 5/15/18	415,000		399,103
The St. Paul Travelers Companies, Inc. 8.125% 4/15/10	252,000		256,052
			10,704,374
Real Estate Investment Trusts - 2.1%
AMB Property LP 5.9% 8/15/13	519,000		359,713
Arden Realty LP 5.2% 9/1/11	270,000		271,965
AvalonBay Communities, Inc.:
4.95% 3/15/13	74,000		65,506
5.5% 1/15/12	482,000		449,104
6.625% 9/15/11	165,000		159,193
Brandywine Operating Partnership LP:
4.5% 11/1/09	621,000		598,470
5.625% 12/15/10	821,000		725,218
5.7% 5/1/17	481,000		240,034
5.75% 4/1/12	436,000		239,800
BRE Properties, Inc.:
4.875% 5/15/10	520,000		489,366
5.75% 9/1/09	123,000		122,440
Camden Property Trust:
4.375% 1/15/10	298,000		268,200
5.375% 12/15/13	132,000		108,240
5.875% 11/30/12	596,000		512,560
Colonial Properties Trust 4.75% 2/1/10	1,138,000		1,088,124
CPG Partners LP 6% 1/15/13	205,000		182,219
Developers Diversified Realty Corp.:
4.625% 8/1/10	607,000		428,401
5% 5/3/10	451,000		315,700
5.25% 4/15/11	490,000		241,162
5.375% 10/15/12	259,000		124,031
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Real Estate Investment Trusts - continued
Duke Realty LP:
4.625% 5/15/13	$ 126,000		$ 84,725
5.25% 1/15/10	91,000		86,763
5.4% 8/15/14	641,000		437,236
5.625% 8/15/11	595,000		506,944
5.875% 8/15/12	113,000		86,578
5.95% 2/15/17	110,000		67,993
6.25% 5/15/13	1,550,000		1,162,500
6.5% 1/15/18	855,000		529,085
Equity One, Inc.:
6% 9/15/17	172,000		113,437
6.25% 1/15/17	99,000		67,320
Federal Realty Investment Trust:
5.4% 12/1/13	83,000		63,161
6% 7/15/12	590,000		485,407
6.2% 1/15/17	125,000		95,000
Hospitality Properties Trust 5.625% 3/15/17	242,000		134,725
HRPT Properties Trust:
5.75% 11/1/15	179,000		118,140
6.25% 6/15/17	248,000		153,245
6.65% 1/15/18	124,000		78,912
Liberty Property LP:
5.125% 3/2/15	171,000		124,184
5.5% 12/15/16	299,000		206,190
6.625% 10/1/17	735,000		530,974
Mack-Cali Realty LP:
5.05% 4/15/10	163,000		153,220
7.25% 3/15/09	587,000		585,958
7.75% 2/15/11	196,000		184,240
Simon Property Group LP:
4.6% 6/15/10	221,000		211,709
4.875% 8/15/10	136,000		130,242
5% 3/1/12	73,000		62,780
5.375% 6/1/11	125,000		116,451
5.6% 9/1/11	547,000		508,531
5.75% 5/1/12	255,000		221,850
7.75% 1/20/11	165,000		157,751
Tanger Properties LP 6.15% 11/15/15	5,000		3,690
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Real Estate Investment Trusts - continued
UDR, Inc. 5.5% 4/1/14	$ 1,470,000		$ 1,165,281
Washington (REIT) 5.95% 6/15/11	732,000		637,718
			16,261,386
Real Estate Management & Development - 0.3%
ERP Operating LP:
5.375% 8/1/16	270,000		218,503
5.5% 10/1/12	484,000		440,956
5.75% 6/15/17	790,000		642,086
Post Apartment Homes LP:
5.45% 6/1/12	273,000		229,320
6.3% 6/1/13	483,000		396,060
Regency Centers LP:
4.95% 4/15/14	123,000		89,884
5.25% 8/1/15	429,000		297,632
5.875% 6/15/17	213,000		147,815
			2,462,256
Thrifts & Mortgage Finance - 0.6%
Bank of America Corp.:
4.9% 5/1/13	892,000		785,779
5.65% 5/1/18	1,500,000		1,270,199
Countrywide Financial Corp.:
1.6863% 3/24/09 (g)	465,000		463,907
4.5% 6/15/10	96,000		93,212
5.8% 6/7/12	587,000		537,940
Countrywide Home Loans, Inc.:
4.125% 9/15/09	775,000		767,881
6.25% 4/15/09	122,000		122,174
Independence Community Bank Corp.:
3.585% 6/20/13 (g)	311,525		224,298
3.75% 4/1/14 (g)	849,000		568,830
4.9% 9/23/10	341,000		318,876
			5,153,096
TOTAL FINANCIALS			117,953,240
HEALTH CARE - 0.7%
Biotechnology - 0.1%
Amgen, Inc. 5.85% 6/1/17	595,000		607,408
Nonconvertible Bonds - continued
	Principal Amount		Value
HEALTH CARE - continued
Health Care Providers & Services - 0.1%
Coventry Health Care, Inc.:
5.95% 3/15/17	$ 352,000		$ 230,121
6.3% 8/15/14	728,000		530,032
			760,153
Pharmaceuticals - 0.5%
AstraZeneca PLC:
5.9% 9/15/17	930,000		980,072
6.45% 9/15/37	695,000		734,010
Bristol-Myers Squibb Co. 5.45% 5/1/18	590,000		601,887
Novartis Capital Corp. 4.125% 2/10/14	590,000		595,470
Roche Holdings, Inc. 5% 3/1/14 (b)	1,196,000		1,209,579
Teva Pharmaceutical Finance LLC 5.55% 2/1/16	193,000		189,812
			4,310,830
TOTAL HEALTH CARE			5,678,391
INDUSTRIALS - 2.0%
Aerospace & Defense - 0.2%
BAE Systems Holdings, Inc.:
4.75% 8/15/10 (b)	531,000		529,748
6.4% 12/15/11 (b)	165,000		170,808
Bombardier, Inc. 6.3% 5/1/14 (b)	1,575,000		1,055,250
			1,755,806
Airlines - 1.1%
American Airlines, Inc. pass-thru trust certificates:
6.855% 10/15/10	14,993		14,768
6.978% 10/1/12	83,118		76,884
7.024% 4/15/11	570,000		552,900
7.324% 4/15/11	500,000		475,000
7.858% 4/1/13	1,094,000		946,310
Continental Airlines, Inc.:
6.648% 9/15/17	649,993		513,494
6.82% 5/1/18	44,468		33,796
6.9% 7/2/19	174,768		140,688
7.056% 3/15/11	354,000		343,380
Delta Air Lines, Inc. pass-thru trust certificates:
6.821% 8/10/22	76,235		55,270
7.57% 11/18/10	3,200,000		2,928,000
Nonconvertible Bonds - continued
	Principal Amount		Value
INDUSTRIALS - continued
Airlines - continued
U.S. Airways pass-thru trust certificates:
6.85% 7/30/19	$ 456,597		$ 328,750
8.36% 7/20/20	310,934		239,419
United Air Lines, Inc. pass-thru trust certificates:
Class 1A, 6.636% 1/2/24	113,586		81,214
6.071% 9/1/14	73,003		70,813
6.201% 3/1/10	46,507		43,949
6.602% 9/1/13	131,781		124,533
7.032% 4/1/12	403,228		386,091
7.186% 10/1/12	1,003,634		960,980
			8,316,239
Building Products - 0.1%
Masco Corp. 2.3988% 3/12/10 (g)	523,444		469,605
Industrial Conglomerates - 0.6%
Covidien International Finance SA:
5.15% 10/15/10	509,000		521,178
5.45% 10/15/12	124,000		126,902
6% 10/15/17	590,000		594,172
General Electric Co. 5.25% 12/6/17	3,525,000		3,244,325
			4,486,577
Machinery - 0.0%
Atlas Copco AB 5.6% 5/22/17 (b)	123,000		116,978
Road & Rail - 0.0%
CSX Corp. 6.25% 4/1/15	310,000		288,498
TOTAL INDUSTRIALS			15,433,703
INFORMATION TECHNOLOGY - 0.4%
Communications Equipment - 0.1%
Cisco Systems, Inc.:
4.95% 2/15/19	707,000		683,272
5.9% 2/15/39	113,000		105,223
			788,495
Electronic Equipment & Components - 0.2%
Tyco Electronics Group SA:
5.95% 1/15/14	594,000		513,989
6% 10/1/12	780,000		687,490
6.55% 10/1/17	475,000		358,140
			1,559,619
Nonconvertible Bonds - continued
	Principal Amount		Value
INFORMATION TECHNOLOGY - continued
Office Electronics - 0.0%
Xerox Corp. 5.5% 5/15/12	$ 322,000		$ 298,478
Semiconductors & Semiconductor Equipment - 0.1%
National Semiconductor Corp.:
2.2463% 6/15/10 (g)	353,429		307,024
6.15% 6/15/12	299,000		234,480
			541,504
TOTAL INFORMATION TECHNOLOGY			3,188,096
MATERIALS - 0.6%
Chemicals - 0.0%
E.I. du Pont de Nemours & Co. 5% 1/15/13	95,000		97,038
Lubrizol Corp. 8.875% 2/1/19	187,000		191,728
			288,766
Construction Materials - 0.0%
CRH America, Inc. 6% 9/30/16	369,000		263,424
Containers & Packaging - 0.1%
Pactiv Corp.:
5.875% 7/15/12	345,000		320,721
6.4% 1/15/18	352,000		287,004
Sealed Air Corp. 6.95% 5/15/09 (b)	131,000		131,548
			739,273
Metals & Mining - 0.4%
BHP Billiton Financial USA Ltd. 5.125% 3/29/12	398,000		407,012
Corporacion Nacional del Cobre (Codelco) 6.375% 11/30/12 (b)	403,000		414,920
Rio Tinto Finance Ltd.:
5.875% 7/15/13	657,000		597,209
6.5% 7/15/18	1,252,000		1,106,141
United States Steel Corp. 5.65% 6/1/13	299,000		244,627
Vale Overseas Ltd. 6.25% 1/23/17	467,000		449,470
			3,219,379
Nonconvertible Bonds - continued
	Principal Amount		Value
MATERIALS - continued
Paper & Forest Products - 0.1%
International Paper Co.:
5.85% 10/30/12	$ 30,000		$ 26,715
7.4% 6/15/14	521,000		419,094
			445,809
TOTAL MATERIALS			4,956,651
TELECOMMUNICATION SERVICES - 1.9%
Diversified Telecommunication Services - 1.5%
AT&T Broadband Corp. 8.375% 3/15/13	520,000		554,713
AT&T, Inc.:
5.8% 2/15/19	1,769,000		1,717,867
6.7% 11/15/13	236,000		249,697
British Telecommunications PLC 8.625% 12/15/10	547,000		569,999
Deutsche Telekom International Financial BV:
5.25% 7/22/13	493,000		494,577
6.75% 8/20/18	731,000		747,725
SBC Communications, Inc.:
5.1% 9/15/14	437,000		433,344
5.875% 2/1/12	550,000		568,316
5.875% 8/15/12	197,000		204,371
Telecom Italia Capital SA:
4% 1/15/10	984,000		966,902
4.95% 9/30/14	646,000		556,504
5.25% 10/1/15	527,000		444,553
6.999% 6/4/18	361,000		325,783
Telefonica Emisiones SAU:
1.555% 2/4/13 (g)	484,000		415,831
6.421% 6/20/16	234,000		237,751
Telefonos de Mexico SA de CV 4.75% 1/27/10	1,249,000		1,261,490
Verizon Communications, Inc. 6.1% 4/15/18	700,000		693,064
Verizon Global Funding Corp. 7.25% 12/1/10	552,000		582,914
Verizon New England, Inc. 6.5% 9/15/11	179,000		184,072
Verizon New York, Inc. 6.875% 4/1/12	534,000		545,620
			11,755,093
Wireless Telecommunication Services - 0.4%
America Movil SAB de CV:
4.125% 3/1/09	245,000		245,000
5.625% 11/15/17	364,000		338,413
Sprint Nextel Corp. 6% 12/1/16	230,000		149,500
Nonconvertible Bonds - continued
	Principal Amount		Value
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunication Services - continued
Verizon Wireless Capital LLC:
5.55% 2/1/14 (b)	$ 478,000		$ 475,222
8.5% 11/15/18 (b)	708,000		797,001
Vodafone Group PLC:
5% 12/16/13	462,000		463,212
5.5% 6/15/11	556,000		563,837
7.75% 2/15/10	372,000		386,636
			3,418,821
TOTAL TELECOMMUNICATION SERVICES			15,173,914
UTILITIES - 4.1%
Electric Utilities - 2.5%
AmerenUE 6.4% 6/15/17	601,000		586,148
Cleveland Electric Illuminating Co.:
5.65% 12/15/13	828,000		788,424
8.875% 11/15/18	238,000		262,934
Commonwealth Edison Co.:
5.4% 12/15/11	1,278,000		1,299,700
5.8% 3/15/18	1,300,000		1,234,879
Duke Energy Carolinas LLC:
5.25% 1/15/18	710,000		716,313
7% 11/15/18	126,000		143,885
EDP Finance BV:
5.375% 11/2/12 (b)	401,000		394,305
6% 2/2/18 (b)	2,033,000		1,887,907
Enel Finance International SA:
5.7% 1/15/13 (b)	168,000		166,350
6.25% 9/15/17 (b)	679,000		597,226
Exelon Corp.:
4.9% 6/15/15	644,000		552,765
6.75% 5/1/11	134,000		134,016
FirstEnergy Corp. 6.45% 11/15/11	397,000		396,583
FPL Group Capital, Inc. 7.875% 12/15/15	311,000		351,490
Illinois Power Co. 6.125% 11/15/17	83,000		78,096
Jersey Central Power & Light Co. 7.35% 2/1/19	355,000		356,375
Nevada Power Co.:
6.5% 5/15/18	3,950,000		3,729,590
6.5% 8/1/18	316,000		298,102
Oncor Electric Delivery Co. 6.375% 5/1/12	550,000		549,770
Nonconvertible Bonds - continued
	Principal Amount		Value
UTILITIES - continued
Electric Utilities - continued
Oncor Electric Delivery Co. LLC 5.95% 9/1/13 (b)	$ 728,000		$ 714,381
PacifiCorp 6% 1/15/39	242,000		239,162
Pennsylvania Electric Co. 6.05% 9/1/17	154,000		141,126
Pepco Holdings, Inc.:
4% 5/15/10	449,000		438,803
6.125% 6/1/17	121,000		107,192
6.45% 8/15/12	751,000		733,231
PPL Capital Funding, Inc. 6.7% 3/30/67 (g)	1,200,000		720,000
Progress Energy, Inc. 7.1% 3/1/11	681,000		699,505
Sierra Pacific Power Co. 5.45% 9/1/13	314,000		303,863
West Penn Power Co. 5.95% 12/15/17 (b)	63,000		55,706
Wisconsin Electric Power Co. 6.25% 12/1/15	606,000		643,753
			19,321,580
Gas Utilities - 0.1%
Southern Natural Gas Co. 5.9% 4/1/17 (b)	89,000		75,934
Texas Eastern Transmission Corp. 7.3% 12/1/10	624,000		645,400
			721,334
Independent Power Producers & Energy Traders - 0.7%
Constellation Energy Group, Inc. 7% 4/1/12	1,297,000		1,262,618
Duke Capital LLC 5.668% 8/15/14	414,000		382,117
Exelon Generation Co. LLC 5.35% 1/15/14	308,000		284,506
PPL Energy Supply LLC:
6.3% 7/15/13	2,000,000		1,985,860
6.5% 5/1/18	865,000		749,213
TXU Corp. 5.55% 11/15/14	1,645,000		822,500
			5,486,814
Multi-Utilities - 0.8%
CenterPoint Energy, Inc. 5.95% 2/1/17	360,000		293,600
CMS Energy Corp. 6.55% 7/17/17	1,740,000		1,535,392
Dominion Resources, Inc.:
4.75% 12/15/10	791,000		795,803
6.3% 9/30/66 (g)	803,000		473,770
7.5% 6/30/66 (g)	1,025,000		666,250
DTE Energy Co. 7.05% 6/1/11	198,000		199,850
KeySpan Corp. 7.625% 11/15/10	100,000		104,230
MidAmerican Energy Holdings, Co. 5.875% 10/1/12	588,000		605,867
National Grid PLC 6.3% 8/1/16	297,000		283,584
NiSource Finance Corp.:
5.25% 9/15/17	170,000		125,227
Nonconvertible Bonds - continued
	Principal Amount		Value
UTILITIES - continued
Multi-Utilities - continued
NiSource Finance Corp.: - continued
5.4% 7/15/14	$ 271,000		$ 212,786
5.45% 9/15/20	57,000		39,031
6.4% 3/15/18	311,000		244,155
7.875% 11/15/10	206,000		201,751
Wisconsin Energy Corp. 6.25% 5/15/67 (g)	1,242,000		757,620
WPS Resources Corp. 6.11% 12/1/66 (g)	178,000		94,340
			6,633,256
TOTAL UTILITIES			32,162,984
TOTAL NONCONVERTIBLE BONDS (Cost $275,500,569)		260,614,080
U.S. Government and Government Agency Obligations - 15.6%
U.S. Government Agency Obligations - 4.5%
Fannie Mae:
4.375% 7/17/13	4,850,000		5,205,408
5% 2/16/12 (d)	28,035,000		30,479,302
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			35,684,710
U.S. Treasury Inflation Protected Obligations - 9.1%
U.S. Treasury Inflation-Indexed Notes:
2% 1/15/14 (d)	32,096,676		31,958,152
2% 7/15/14	29,008,200		28,892,146
2.625% 7/15/17	10,147,200		10,367,792
TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS			71,218,090
U.S. Treasury Obligations - 2.0%
U.S. Treasury Notes:
1.875% 2/28/14	947,000		940,494
U.S. Government and Government Agency Obligations - continued
	Principal Amount		Value
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
3.75% 11/15/18	$ 3,800,000		$ 4,026,518
4% 8/15/18	10,000,000		10,789,840
TOTAL U.S. TREASURY OBLIGATIONS			15,756,852
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $121,899,285)		122,659,652
U.S. Government Agency - Mortgage Securities - 14.6%
Fannie Mae - 8.6%
3.782% 6/1/34 (g)	551,826		553,376
3.915% 7/1/35 (g)	437,563		439,432
4% 8/1/18	2,283,831		2,310,251
4.303% 3/1/33 (g)	54,501		55,400
4.318% 7/1/35 (g)	371,315		375,054
4.331% 2/1/35 (g)	414,374		417,075
4.34% 1/1/35 (g)	139,918		142,235
4.386% 2/1/35 (g)	215,736		219,520
4.389% 12/1/33 (g)	4,640,498		4,697,634
4.411% 4/1/33 (g)	223,289		223,458
4.423% 5/1/35 (g)	64,309		65,250
4.432% 3/1/35 (g)	197,236		200,425
4.435% 6/1/35 (g)	480,068		486,826
4.456% 7/1/35 (g)	334,741		333,124
4.481% 3/1/35 (g)	412,179		417,437
4.5% 4/1/20 to 3/1/35	1,854,957		1,877,215
4.54% 5/1/35 (g)	286,304		290,235
4.543% 11/1/34 (g)	345,582		348,630
4.547% 3/1/35 (g)	652,312		655,665
4.548% 10/1/33 (g)	90,008		90,880
4.55% 10/1/35 (g)	2,203,556		2,232,245
4.583% 8/1/34 (g)	306,351		310,764
4.6% 10/1/33 (g)	102,317		102,584
4.603% 7/1/35 (g)	49,222		49,636
4.616% 9/1/35 (g)	2,158,066		2,200,163
4.623% 2/1/33 (g)	100,170		100,766
4.646% 2/1/35 (g)	2,944,364		2,991,537
4.649% 10/1/35 (g)	260,522		262,877
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
4.651% 10/1/33 (g)	$ 40,344		$ 40,500
4.667% 7/1/35 (g)	550,833		561,366
4.686% 10/1/34 (g)	424,251		427,751
4.69% 12/1/34 (g)	264,496		267,540
4.742% 12/1/34 (g)	107,355		108,568
4.747% 4/1/35 (g)	45,539		46,274
4.765% 8/1/33 (g)	114,712		115,782
4.765% 2/1/34 (g)	34,115		34,758
4.784% 7/1/34 (g)	2,535,934		2,571,557
4.792% 1/1/35 (g)	78,568		79,711
4.798% 4/1/36 (g)	1,529,159		1,534,803
4.806% 11/1/34 (g)	326,934		331,085
4.81% 2/1/36 (g)	145,381		147,525
4.855% 10/1/34 (g)	1,445,058		1,462,960
4.891% 10/1/35 (g)	41,687		42,311
4.946% 7/1/34 (g)	49,010		49,546
4.987% 7/1/35 (g)	3,117,184		3,171,064
5.046% 3/1/35 (g)	19,839		19,940
5.06% 9/1/34 (g)	861,817		871,403
5.087% 10/1/33 (g)	1,943,084		1,975,356
5.089% 9/1/34 (g)	109,536		110,755
5.141% 5/1/35 (g)	78,860		80,447
5.16% 10/1/18 (g)	47,890		48,476
5.185% 3/1/35 (g)	60,870		61,963
5.192% 5/1/35 (g)	1,433,956		1,466,382
5.193% 6/1/35 (g)	445,895		449,802
5.198% 3/1/35 (g)	73,308		73,666
5.264% 11/1/36 (g)	465,954		477,499
5.31% 12/1/34 (g)	152,152		154,134
5.408% 1/1/36 (g)	592,097		600,434
5.456% 2/1/36 (g)	2,191,808		2,265,236
5.5% 8/1/14 to 12/1/14	1,477,602		1,545,171
5.51% 11/1/36 (g)	774,695		789,430
5.564% 1/1/36 (g)	662,947		685,299
5.593% 7/1/37 (g)	343,965		354,932
5.607% 1/1/34 (g)	234,248		237,821
5.798% 1/1/36 (g)	455,834		474,185
5.821% 7/1/46 (g)	3,996,795		4,153,153
5.822% 3/1/36 (g)	1,449,234		1,503,206
5.995% 3/1/33 (g)	40,571		41,035
6% 5/1/16 to 4/1/17	558,433		584,380
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
6.013% 4/1/36 (g)	$ 266,602		$ 277,112
6.192% 2/1/35 (g)	65,731		66,859
6.243% 6/1/36 (g)	125,359		127,396
6.328% 4/1/36 (g)	262,430		273,133
6.5% 12/1/13 to 3/1/35	11,464,938		12,094,113
7% 11/1/11 to 6/1/33	1,554,994		1,661,093
7.5% 8/1/17 to 9/1/28	523,129		557,823
8.5% 5/1/21 to 9/1/25	92,249		98,257
9.5% 2/1/25	15,202		16,426
10.5% 8/1/20	18,773		21,409
11% 8/1/15	21,641		22,153
12.5% 12/1/13 to 4/1/15	10,324		11,883
TOTAL FANNIE MAE			67,694,557
Freddie Mac - 2.2%
3.456% 2/1/34 (g)	109,267		109,154
3.883% 1/1/35 (g)	221,638		223,503
4.275% 6/1/35 (g)	176,565		179,080
4.315% 12/1/34 (g)	145,811		148,172
4.322% 3/1/35 (g)	249,974		253,854
4.361% 2/1/35 (g)	330,024		334,500
4.407% 3/1/35 (g)	180,340		182,977
4.471% 3/1/35 (g)	166,726		169,180
4.522% 2/1/35 (g)	311,026		316,074
5% 3/1/19	5,896,466		6,108,392
5% 3/12/39 (c)	1,000,000		1,015,776
5.142% 4/1/35 (g)	816,573		834,825
5.288% 3/1/35 (g)	113,273		113,889
5.294% 1/1/34 (g)	961,275		977,558
5.521% 1/1/36 (g)	926,805		954,840
5.526% 2/1/35 (g)	202,117		203,229
5.694% 10/1/35 (g)	229,541		239,225
5.86% 6/1/36 (g)	301,239		312,317
5.977% 6/1/36 (g)	273,418		283,683
6.095% 3/1/33 (g)	25,767		26,171
6.101% 6/1/36 (g)	293,437		305,343
6.594% 1/1/37 (g)	1,731,287		1,806,491
6.837% 10/1/36 (g)	2,190,269		2,285,410
8.5% 9/1/24 to 8/1/27	75,200		80,705
10.5% 5/1/21	801		808
11% 12/1/11	136		137
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Freddie Mac - continued
11.5% 10/1/15	$ 5,066		$ 5,657
11.75% 10/1/10	3,205		3,324
TOTAL FREDDIE MAC			17,474,274
Government National Mortgage Association - 3.8%
4.25% 7/20/34 (g)	304,253		305,385
5.5% 3/18/39 (c)	7,000,000		7,189,608
5.5% 3/18/39 (c)	8,000,000		8,216,694
5.5% 3/18/39 (c)	6,000,000		6,162,521
5.5% 3/18/39 (c)	7,000,000		7,189,608
7% 7/15/28 to 11/15/28	382,193		406,832
7.5% 2/15/28 to 10/15/28	6,279		6,645
8% 6/15/24 to 10/15/24	6,840		7,271
8.5% 5/15/17 to 10/15/21	95,546		103,668
11% 7/20/19 to 8/20/19	4,785		5,553
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			29,593,785
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $112,573,446)		114,762,616
Asset-Backed Securities - 2.7%
Accredited Mortgage Loan Trust:
Series 2004-4 Class A2D, 0.8238% 1/25/35 (g)	11,532		4,110
Series 2005-1 Class M1, 0.9438% 4/25/35 (g)	212,546		125,374
ACE Securities Corp. Series 2006-NC2:
Class M7, 1.2238% 7/25/36 (g)	95,099		732
Class M8, 1.3238% 7/25/36 (g)	47,123		250
Class M9, 2.1738% 7/25/36 (g)	31,137		109
ACE Securities Corp. Home Equity Loan Trust:
Series 2003-HS1:
Class M1, 1.5988% 6/25/33 (g)	31		31
Class M2, 3.0988% 6/25/33 (g)	14,181		9,857
Series 2004-HE1 Class M1, 0.9738% 2/25/34 (g)	33,851		29,977
Series 2004-OP1 Class M1, 0.9938% 4/25/34 (g)	70,866		30,846
Series 2005-HE2 Class M2, 0.9238% 4/25/35 (g)	29,895		24,486
Series 2005-SD1 Class A1, 0.8738% 11/25/50 (g)	3,927		3,576
Series 2006-HE2:
Class M3, 0.8138% 5/25/36 (g)	41,322		1,273
Class M4, 0.8738% 5/25/36 (g)	34,920		737
Asset-Backed Securities - continued
	Principal Amount		Value
ACE Securities Corp. Home Equity Loan Trust: - continued
Series 2006-HE2:
Class M5, 0.9138% 5/25/36 (g)	$ 50,770		$ 792
Series 2006-OP1:
Class M4, 0.8438% 4/25/36 (g)	19,400		793
Class M5, 0.8638% 4/25/36 (g)	18,430		632
Advanta Business Card Master Trust:
Series 2005-A2 Class A2, 0.6% 5/20/13 (g)	1,200,000		900,000
Series 2006-A7 Class A7, 0.49% 10/20/12 (g)	550,000		440,000
Series 2006-C1 Class C1, 0.95% 10/20/14 (g)	135,664		9,496
Series 2007-A4 Class A4, 0.5% 4/22/13 (g)	497,203		367,930
Series 2007-B1 Class B, 0.72% 12/22/14 (g)	287,139		43,071
Series 2007-D1 Class D, 1.87% 1/22/13 (b)(g)	1,420,000		99,400
ALG Student Loan Trust I Series 2006-1 Class A1, 1.1938% 10/28/18 (b)(g)	111,433		109,918
American Express Credit Account Master Trust Series 2004-C Class C, 0.9613% 2/15/12 (b)(g)	28,292		25,684
AmeriCredit Automobile Receivables Trust Series 2005-1 Class C, 4.73% 7/6/10	64,434		63,991
Ameriquest Mortgage Securities, Inc. Series 2006-M3 Class M7, 1.3238% 10/25/36 (g)	20,392		12
Ameriquest Mortgage Securities, Inc. pass-thru certificates:
Series 2003-10 Class M1, 1.1738% 12/25/33 (g)	18,501		11,708
Series 2004-R10 Class M1, 1.1738% 11/25/34 (g)	77,309		34,436
Series 2004-R11 Class M1, 1.1338% 11/25/34 (g)	66,534		32,652
Series 2004-R2:
Class M1, 0.9038% 4/25/34 (g)	29,255		22,316
Class M3, 1.0238% 4/25/34 (g)	19,176		7,304
Series 2005-R1 Class M1, 0.9238% 3/25/35 (g)	107,398		62,602
Series 2005-R10 Class A2B, 0.6938% 12/25/35 (g)	97,414		66,784
Series 2005-R2 Class M1, 0.9238% 4/25/35 (g)	235,341		135,498
Amortizing Residential Collateral Trust Series 2002-BC3 Class A, 0.8038% 6/25/32 (g)	20,578		10,311
Argent Securities, Inc.:
Series 2006-M1 Class M7, 1.4738% 7/25/36 (g)	86,250		233
Series 2006-M2 Class M7, 1.3738% 9/25/36 (g)	78,844		71
Argent Securities, Inc. pass-thru certificates:
Series 2003-W7 Class A2, 0.7794% 3/1/34 (g)	5,463		1,106
Series 2004-W11 Class M2, 1.1738% 11/25/34 (g)	63,962		23,717
Series 2004-W5 Class M1, 1.0738% 4/25/34 (g)	77,406		45,562
Series 2004-W7:
Class M1, 1.0238% 5/25/34 (g)	67,706		21,406
Asset-Backed Securities - continued
	Principal Amount		Value
Argent Securities, Inc. pass-thru certificates: - continued
Series 2004-W7:
Class M2, 1.0738% 5/25/34 (g)	$ 59,170		$ 31,972
Series 2006-W4 Class A2C, 0.6338% 5/25/36 (g)	176,909		62,250
Asset Backed Funding Corp. Series 2006-OPT2 Class M7, 1.2538% 10/25/36 (g)	148,507		1,856
Asset Backed Funding Corp. Trust Series 2005-HE1 Class M1, 0.8938% 12/25/34 (g)	163,466		79,187
Asset Backed Securities Corp. Home Equity Loan Trust:
Series 2003-HE3 Class M1, 1.7063% 6/15/33 (g)	27,812		12,375
Series 2003-HE6 Class M1, 1.1238% 11/25/33 (g)	61,149		31,836
Series 2004-HE2 Class M1, 1.0238% 4/25/34 (g)	304,192		131,811
Series 2004-HE3:
Class M1, 1.0138% 6/25/34 (g)	26,927		10,657
Class M2, 1.5938% 6/25/34 (g)	47,415		29,684
Series 2004-HE6 Class A2, 0.8338% 6/25/34 (g)	47,497		18,308
Series 2006-HE6:
Class M7, 1.2738% 11/25/36 (g)	46,948		577
Class M9, 2.6238% 11/25/36 (g)	125,421		640
Axon Financial Funding Ltd. Series 2007-1A Class A1, 5.96% 4/4/17 (a)(b)(g)	388,000		0
Bank of America Credit Card Master Trust Series 2006-HE7 Class B4, 0.535% 3/15/12 (g)	391,376		351,872
Bayview Financial Acquisition Trust Series 2004-C Class A1, 1.0388% 5/28/44 (g)	37,007		22,497
Bayview Financial Mortgage Loan Trust Series 2004-A Class A, 1.0838% 2/28/44 (g)	73,314		45,581
Bear Stearns Asset Backed Securities I Trust:
Series 2005-3 Class A1, 0.9238% 9/25/35 (g)	12,441		9,074
Series 2005-FR1 Class M1, 0.9738% 6/25/35 (g)	110,386		50,150
Series 2005-HE2:
Class M1, 0.9738% 2/25/35 (g)	173,975		57,632
Class M2, 1.2238% 2/25/35 (g)	570,000		264,521
Brazos Higher Education Authority, Inc. Series 2006-2 Class A9, 1.4763% 12/26/24 (g)	261,833		234,092
C-BASS Trust Series 2006-CB7 Class A2, 0.5338% 10/25/36 (g)	56,332		48,452
Capital Auto Receivables Asset Trust Series 2005-1 Class B, 0.83% 6/15/10 (g)	71,852		70,774
Capital One Auto Finance Trust Series 2006-C Class A3B, 0.465% 7/15/11 (g)	43,503		40,478
Capital One Multi-Asset Execution Trust Series 2007-C3 Class C3, 0.745% 4/15/13 (b)(g)	331,468		238,601
Capital Trust Ltd. Series 2004-1:
Class A2, 0.92% 7/20/39 (b)(g)	52,147		13,037
Asset-Backed Securities - continued
	Principal Amount		Value
Capital Trust Ltd. Series 2004-1: - continued
Class B, 1.22% 7/20/39 (b)(g)	$ 30,070		$ 4,210
Class C, 1.57% 7/20/39 (b)(g)	38,684		3,482
Carrington Mortgage Loan Trust:
Series 2006-FRE1 Class M1, 0.7738% 7/25/36 (g)	130,038		6,255
Series 2006-NC2 Class M7, 1.3238% 6/25/36 (g)	48,500		970
Series 2006-NC3 Class M10, 2.4738% 8/25/36 (b)(g)	215,000		2,602
Series 2006-RFC1 Class M9, 2.3438% 5/25/36 (g)	21,243		576
Series 2007-RFC1 Class A3, 0.6138% 12/25/36 (g)	205,465		49,740
Cendant Timeshare Receivables Funding LLC Series 2005 1A Class 2A2, 0.65% 5/20/17 (b)(g)	31,093		22,535
Chase Issuance Trust Series 2004-3 Class C, 0.9313% 6/15/12 (g)	60,489		54,526
CIT Equipment Collateral Trust Series 2006-VT2 Class D, 5.46% 4/20/14	38,887		19,444
Citigroup Mortgage Loan Trust:
Series 2003-HE4 Class A, 0.8838% 12/25/33 (b)(g)	43,504		29,532
Series 2006-AMC1 Class M7, 0.82% 9/25/36 (g)	86,233		1,035
Series 2007-AMC4 Class M1, 0.7438% 5/25/37 (g)	87,242		3,350
CNH Wholesale Master Note Trust Series 2006-1A:
Class A, 0.515% 7/15/12 (b)(g)	149,147		146,860
Class B, 0.735% 7/15/12 (b)(g)	149,147		140,663
Countrywide Home Loan Trust Series 2006-13 Class N, 7% 8/25/37 (b)	37,648		4
Countrywide Home Loans, Inc.:
Series 2002-6 Class AV1, 1.3338% 5/25/33 (g)	5,908		3,225
Series 2004-3:
Class 3A4, 0.7238% 8/25/34 (g)	21,794		11,664
Class M1, 0.9738% 6/25/34 (g)	75,408		49,621
Class M4, 1.4438% 4/25/34 (g)	18,217		8,631
Series 2004-4:
Class A, 0.8438% 8/25/34 (g)	4,770		2,255
Class M2, 1.0038% 6/25/34 (g)	67,016		44,353
Series 2005-1:
Class M1, 0.8938% 8/25/35 (g)	58,433		42,131
Class MV2, 0.9138% 7/25/35 (g)	161,175		112,415
Series 2005-3 Class MV1, 0.8938% 8/25/35 (g)	282,580		246,323
Series 2005-AB1 Class A2, 0.6838% 8/25/35 (g)	54,117		44,708
CPS Auto Receivables Trust Series 2004-D Class A2, 3.86% 12/15/11 (b)	17,379		15,858
DB Master Finance LLC Series 2006-1 Class M1, 8.285% 6/20/31 (b)	715,000		464,300
Asset-Backed Securities - continued
	Principal Amount		Value
Discover Card Master Trust I:
Series 2006-1 Class B1, 0.605% 8/16/11 (g)	$ 242,461		$ 240,484
Series 2006-2 Class B1, 0.575% 1/17/12 (g)	331,468		297,063
Series 2007-1 Class B, 0.555% 8/15/12 (g)	331,468		259,000
Fannie Mae subordinate REMIC pass-thru certificates Series 2004-T5 Class AB3, 0.8983% 5/28/35 (g)	4,436		2,316
Fieldstone Mortgage Investment Corp.:
Series 2004-3 Class M5, 2.6488% 8/25/34 (g)	33,155		8,246
Series 2006-3 Class 2A3, 0.6338% 11/25/36 (g)	513,111		144,633
First Franklin Mortgage Loan Trust:
Series 2004-FF2 Class M3, 1.2988% 3/25/34 (g)	2,587		1,362
Series 2006-FF12 Class A2, 0.5138% 9/25/36 (g)	55,632		50,945
First Investors Auto Owner Trust Series 2006-A Class A3, 4.93% 2/15/11 (b)	20,050		19,843
Ford Credit Auto Owner Trust:
Series 2006-B Class D, 7.26% 2/15/13 (b)	850,000		425,000
Series 2006-C Class D, 6.89% 5/15/13 (b)	585,000		291,038
Series 2007-A Class D, 7.05% 12/15/13 (b)	310,000		155,000
Ford Credit Floorplan Master Owner Trust:
Series 2006-3 Class B, 0.905% 6/15/11 (g)	230,782		161,547
Series 2006-4 Class B, 1.005% 6/15/13 (g)	88,095		44,425
Fremont Home Loan Trust:
Series 2004-1:
Class M1, 1.1488% 2/25/34 (g)	8,218		2,342
Class M2, 1.2238% 2/25/34 (g)	14,046		8,983
Series 2004-A Class M1, 1.2988% 1/25/34 (g)	136,902		73,121
Series 2005-A:
Class M1, 0.9038% 1/25/35 (g)	11,907		10,974
Class M2, 0.9338% 1/25/35 (g)	200,130		73,154
Class M3, 0.9638% 1/25/35 (g)	108,136		46,211
Class M4, 1.1538% 1/25/35 (g)	41,438		20,307
Series 2006-A:
Class M4, 0.8738% 5/25/36 (g)	103,111		1,413
Class M5, 0.9738% 5/25/36 (g)	55,232		685
GCO Education Loan Funding Master Trust II Series 2007-1A Class C1L, 1.6288% 9/25/30 (b)(g)	268,496		180,891
GE Business Loan Trust Series 2003-1 Class A, 0.8913% 4/15/31 (b)(g)	40,918		25,369
GE Capital Credit Card Master Note Trust:
Series 2006-1:
Class B, 0.5713% 9/17/12 (g)	101,443		71,010
Class C, 0.7013% 9/17/12 (g)	78,880		51,272
Series 2007-1 Class C, 0.7313% 3/15/13 (g)	541,047		357,091
Asset-Backed Securities - continued
	Principal Amount		Value
GS Auto Loan Trust Series 2006-1 Class D, 6.25% 1/15/14 (b)	$ 479,536		$ 191,815
GSAMP Trust:
Series 2002-HE Class M1, 2.345% 11/20/32 (g)	70,963		34,561
Series 2003-FM1 Class M1, 1.7% 3/20/33 (g)	136,559		82,742
Series 2004-AR1:
Class B4, 5% 6/25/34 (b)(g)	142,877		12,009
Class M1, 1.1238% 6/25/34 (g)	250,008		95,036
Series 2004-FM1 Class M1, 1.4488% 11/25/33 (g)	46,464		24,864
Series 2004-FM2 Class M1, 1.2238% 1/25/34 (g)	119,518		68,787
Series 2004-HE1 Class M1, 1.0238% 5/25/34 (g)	65,461		21,249
Series 2007-HE1 Class M1, 0.7238% 3/25/47 (g)	103,732		4,948
GSR Mortgage Loan Trust:
Series 2004-OPT Class A1, 0.8138% 11/25/34 (g)	1,808		853
Series 2005-MTR1 Class A1, 0.6138% 10/25/35 (g)	40,413		37,338
Series 2006-FM1 Class M3, 0.8238% 4/25/36 (g)	49,160		624
Guggenheim Structured Real Estate Funding Ltd.:
Series 2005-1 Class C, 1.5538% 5/25/30 (b)(g)	75,229		33,853
Series 2006-3:
Class B, 0.8738% 9/25/46 (b)(g)	74,651		11,944
Class C, 1.0238% 9/25/46 (b)(g)	174,018		20,882
Helios Finance L.P. Series 2007-S1 Class B1, 1.17% 10/20/14 (b)(g)	401,561		204,796
Home Equity Asset Trust:
Series 2002-3 Class A5, 1.3538% 2/25/33 (g)	46		10
Series 2003-3 Class M1, 1.7638% 8/25/33 (g)	114,000		51,982
Series 2003-4 Class M1, 1.6738% 10/25/33 (g)	33,755		14,949
Series 2003-5:
Class A2, 1.1738% 12/25/33 (g)	3,753		1,103
Class M1, 1.5238% 12/25/33 (g)	39,023		23,460
Series 2003-7 Class A2, 1.2338% 3/25/34 (g)	189		39
Series 2003-8 Class M1, 1.5538% 4/25/34 (g)	59,361		27,533
Series 2004-3 Class M2, 2.1738% 8/25/34 (g)	38,676		23,518
Series 2004-7 Class A3, 0.8638% 1/25/35 (g)	70		26
Series 2005-1 Class M1, 0.9038% 5/25/35 (g)	148,669		132,833
Series 2005-3 Class M1, 0.8838% 8/25/35 (g)	101,636		90,851
Series 2005-5 Class 2A2, 0.7238% 11/25/35 (g)	45,504		40,201
Series 2006-1 Class 2A3, 0.6988% 4/25/36 (g)	416,108		287,288
Series 2006-7 Class M4, 0.8538% 1/25/37 (g)	130,756		601
Household Home Equity Loan Trust Series 2004-1 Class M, 0.8794% 9/20/33 (g)	32,204		19,587
HSBC Credit Card Master Note Trust I Series 2006-1 Class B, 0.6013% 6/15/12 (g)	256,449		227,770
Asset-Backed Securities - continued
	Principal Amount		Value
HSBC Home Equity Loan Trust:
Series 2005-2:
Class M1, 0.8194% 1/20/35 (g)	$ 88,073		$ 46,593
Class M2, 0.8494% 1/20/35 (g)	66,063		32,378
Series 2005-3 Class A1, 0.6194% 1/20/35 (g)	46,324		24,785
Series 2006-2:
Class M1, 0.74% 3/20/36 (g)	72,607		37,973
Class M2, 0.76% 3/20/36 (g)	120,061		58,948
Series 2006-3 Class A1V, 0.55% 3/20/36 (g)	79,280		75,619
HSI Asset Securitization Corp. Trust Series 2007-HE1 Class 2A3, 0.6638% 1/25/37 (g)	141,116		42,357
JPMorgan Mortgage Acquisition Trust Series 2007-CH1:
Class AV4, 0.6038% 11/25/36 (g)	141,698		60,222
Class MV1, 0.7038% 11/25/36 (g)	115,100		11,687
Keycorp Student Loan Trust:
Series 1999-A Class A2, 4.0988% 12/27/09 (g)	126,385		98,156
Series 2006-A Class 2A1, 1.4963% 9/27/21 (g)	85,839		83,568
Lancer Funding Ltd. Series 2006-1A Class A3, 3.1125% 4/6/46 (b)(g)	30,638		306
Long Beach Mortgage Loan Trust:
Series 2003-2 Class M1, 1.7038% 6/25/33 (g)	241,930		108,905
Series 2004-2:
Class M1, 1.0038% 6/25/34 (g)	70,849		37,390
Class M2, 1.5538% 6/25/34 (g)	50,366		38,392
Series 2006-9 Class M4, 0.8438% 11/25/36 (g)	41,372		79
MASTR Asset Backed Securities Trust:
Series 2006-AM3 Class M1, 0.7338% 10/25/36 (g)	51,216		1,864
Series 2006-NC2 Class M7, 1.2238% 9/25/36 (g)	24,087		7
Series 2007-HE1 Class M1, 0.7738% 5/25/37 (g)	89,453		3,748
Merna Reinsurance Ltd. Series 2007-1 Class B, 3.2088% 6/30/12 (b)(g)	1,695,000		1,551,434
Merrill Lynch Mortgage Investors Trust:
Series 2003-HE1 Class M1, 1.1738% 7/25/34 (g)	67,940		43,620
Series 2003-OPT1 Class M1, 1.1238% 7/25/34 (g)	18,632		12,975
Series 2006-FM1 Class A2B, 0.5838% 4/25/37 (g)	296,490		210,204
Series 2006-OPT1 Class A1A, 0.7338% 6/25/35 (g)	193,498		89,100
Morgan Stanley ABS Capital I Trust:
Series 2002-HE3 Class M1, 2.1238% 12/27/32 (g)	4,962		2,873
Series 2003-NC7 Class M1, 1.5238% 6/25/33 (g)	60,046		33,964
Series 2003-NC8 Class M1, 1.5238% 9/25/33 (g)	46,366		26,852
Series 2004-HE6 Class A2, 0.8138% 8/25/34 (g)	6,539		1,134
Series 2004-NC2 Class M1, 1.2988% 12/25/33 (g)	117,424		56,458
Series 2005-HE1 Class M2, 0.9438% 12/25/34 (g)	55,600		26,816
Asset-Backed Securities - continued
	Principal Amount		Value
Morgan Stanley ABS Capital I Trust: - continued
Series 2005-HE2 Class M1, 0.8738% 1/25/35 (g)	$ 50,304		$ 17,157
Series 2005-NC1 Class M1, 0.9138% 1/25/35 (g)	45,571		15,528
Series 2005-NC2 Class B1, 1.6438% 3/25/35 (g)	58,200		28,039
Series 2006-HE3 Class B1, 1.3738% 4/25/36 (g)	25,872		57
Series 2006-NC4:
Class M4, 0.8238% 6/25/36 (g)	38,800		404
Class M6, 0.9238% 6/25/36 (g)	19,400		107
Series 2007-HE2 Class A2A, 0.5138% 1/25/37 (g)	12,900		10,412
Series 2007-HE4 Class A2A, 0.5838% 2/25/37 (g)	12,547		8,401
Series 2007-NC3 Class A2A, 0.5338% 5/25/37 (g)	6,817		5,425
Morgan Stanley Dean Witter Capital I Trust:
Series 2001-NC4 Class M1, 1.9738% 1/25/32 (g)	3,004		832
Series 2002-AM3 Class A3, 1.4538% 2/25/33 (g)	11,696		9,561
Series 2002-HE2 Class M1, 1.9738% 8/25/32 (g)	74,098		41,729
Series 2002-NC1 Class M1, 1.6738% 2/25/32 (b)(g)	63,286		36,327
Series 2002-NC3:
Class A3, 1.1538% 8/25/32 (g)	3,928		704
Class M1, 1.5538% 8/25/32 (g)	7,168		3,269
Series 2003-NC1 Class M1, 2.0488% 11/25/32 (g)	46,491		22,868
Morgan Stanley Home Equity Loans Trust:
Series 2006-3 Class M5, 0.8838% 4/25/36 (g)	38,800		481
Series 2007-2 Class A1, 0.5738% 4/25/37 (g)	9,202		6,989
National Collegiate Student Loan Trust:
Series 2006-3 Class A1, 0.5038% 9/25/19 (g)	143,285		134,553
Series 2006-4 Class A1, 0.5038% 3/25/25 (g)	116,740		104,152
New Century Home Equity Loan Trust:
Series 2003-6 Class M1, 1.5538% 1/25/34 (g)	133,254		74,491
Series 2005-4 Class M2, 0.9838% 9/25/35 (g)	162,650		24,221
Series 2005-D Class M2, 0.9438% 2/25/36 (g)	33,892		2,291
Nomura Home Equity Loan Trust:
Series 2006-AF1 Class A1, 6.032% 10/25/36	30,115		26,247
Series 2006-FM2 Class M7, 1.2738% 7/25/36 (g)	110,774		631
Series 2006-HE2 Class A2, 0.5938% 3/25/36 (g)	94,859		85,856
Ocala Funding LLC:
Series 2005-1A Class A, 1.97% 3/20/10 (b)(g)	64,563		22,597
Series 2006-1A Class A, 1.87% 3/20/11 (b)(g)	134,073		53,629
Onyx Acceptance Owner Trust Series 2005-B Class A4, 4.34% 5/15/12	793,876		717,947
Option One Mortgage Loan Trust Series 2004-3 Class M3, 1.1238% 11/25/34 (g)	39,207		24,668
Asset-Backed Securities - continued
	Principal Amount		Value
Park Place Securities, Inc.:
Series 2004-WCW1:
Class M2, 1.1538% 9/25/34 (g)	$ 31,738		$ 18,211
Class M3, 1.7238% 9/25/34 (g)	60,741		13,609
Class M4, 1.9238% 9/25/34 (g)	77,891		8,240
Series 2004-WCW2 Class M3, 1.0238% 7/25/35 (g)	45,668		7,576
Series 2004-WHQ2 Class M1, 1.0638% 2/25/35 (g)	132,580		96,981
Series 2004-WWF1:
Class M2, 1.1538% 2/25/35 (g)	183,311		107,612
Class M3, 1.2138% 2/25/35 (g)	22,717		9,148
Series 2005-WCH1:
Class M2, 0.9938% 1/25/35 (g)	87,921		50,233
Class M3, 1.0338% 1/25/35 (g)	54,533		21,550
Class M4, 1.3038% 1/25/35 (g)	168,217		25,938
Series 2005-WHQ2:
Class M7, 1.7238% 5/25/35 (g)	608,374		23,797
Class M9, 2.3538% 5/25/35 (g)	67,415		1,943
People's Choice Financial Realty Mortgage Securities Trust Series 2006-1:
Class M4, 0.8338% 9/25/36 (g)	194,388		1,205
Class M5, 0.8638% 9/25/36 (g)	96,903		426
Providian Master Note Trust Series 2006-C1A Class C1, 1.005% 3/16/15 (b)(g)	414,093		178,060
Salomon Brothers Mortgage Securities VII, Inc. Series 2003-HE1 Class A, 1.2738% 4/25/33 (g)	582		105
Saxon Asset Securities Trust Series 2004-1 Class M1, 1.2688% 3/25/35 (g)	215,437		102,452
Sierra Receivables Funding Co. Series 2007-1A Class A2, 0.92% 3/20/19 (b)(g)	122,415		91,824
SLM Private Credit Student Loan Trust Series 2004-A Class C, 2.9463% 6/15/33 (g)	145,034		65,265
Sovereign Dealer Floor Plan Master LLC Series 2006-1:
Class B, 0.635% 8/15/11 (b)(g)	197,143		167,572
Class C, 0.835% 8/15/11 (b)(g)	89,900		67,425
Specialty Underwriting & Residential Finance Trust Series 2003-BC3 Class M2, 2.0738% 8/25/34 (g)	26,709		17,358
Structured Asset Investment Loan Trust Series 2004-8 Class M5, 1.6238% 9/25/34 (g)	10,400		4,184
Structured Asset Securities Corp.:
Series 2004-GEL1 Class A, 0.8338% 2/25/34 (g)	15,647		6,914
Series 2006-BC3 Class M7, 1.2738% 10/25/36 (g)	335		0
Asset-Backed Securities - continued
	Principal Amount		Value
Structured Asset Securities Corp.: - continued
Series 2007-GEL1 Class A2, 0.6638% 1/25/37 (b)(g)	$ 149,147		$ 43,343
Superior Wholesale Inventory Financing Trust:
Series 2004-A10:
Class A, 0.5613% 9/15/11 (g)	599,460		482,565
Class B, 0.7413% 9/15/11 (g)	448,315		179,326
Series 2007-AE1:
Class A, 0.555% 1/15/12 (g)	111,531		78,072
Class B, 0.755% 1/15/12 (g)	97,039		38,816
Class C, 1.055% 1/15/12 (g)	120,590		36,177
Swift Master Auto Receivables Trust Series 2007-1 Class A, 0.555% 6/15/12 (g)	327,569		235,850
Terwin Mortgage Trust:
Series 2003-4HE Class A1, 0.9038% 9/25/34 (g)	3,285		679
Series 2003-6HE Class A1, 0.9438% 11/25/33 (g)	4,157		1,396
Turquoise Card Backed Securities PLC:
Series 2006-1A Class C, 0.785% 5/16/11 (b)(g)	322,603		306,775
Series 2006-2:
Class B, 0.605% 10/17/11 (g)	390,386		341,588
Class C, 0.805% 10/17/11 (g)	366,776		296,446
Series 2007-1 Class C, 0.8313% 6/15/12 (g)	418,225		269,132
Wachovia Auto Loan Owner Trust Series 2006-2A Class E, 7.05% 5/20/14 (b)	955,000		276,950
WaMu Asset Holdings Corp. Series 2006-8 Class N1, 6.048% 10/25/46 (b)	101,166		10
WaMu Asset-Backed Certificates Series 2006-HE3:
Class M4, 0.8538% 10/25/36 (g)	68,715		1,244
Class M7, 1.2738% 10/25/36 (g)	49,742		557
WaMu Master Note Trust:
Series 2006-A3A Class A3, 0.485% 9/16/13 (b)(g)	626,213		596,416
Series 2006-C2A Class C2, 0.955% 8/15/15 (b)(g)	798,019		346,723
Series 2006-C3A Class C3A, 0.835% 10/15/13 (b)(g)	558,526		450,722
Series 2007-A4A Class A4, 5.2% 10/15/14 (b)	420,000		375,900
Series 2007-C1 Class C1, 0.855% 5/15/14 (b)(g)	486,028		285,969
Wells Fargo Home Equity Trust Series 2004-3 Class A, 4.5% 11/27/34 (b)(j)	864		0
Asset-Backed Securities - continued
	Principal Amount		Value
WFS Financial Owner Trust Series 2005-1 Class C, 3.82% 8/17/12	$ 2,060		$ 2,053
Whinstone Capital Management Ltd. Series 1A Class B3, 2.0594% 10/25/44 (b)(g)	203,978		24,477
TOTAL ASSET-BACKED SECURITIES (Cost $25,929,328)		21,026,536
Collateralized Mortgage Obligations - 4.5%
Private Sponsor - 1.3%
Arkle Master Issuer PLC floater:
Series 2006-1A Class 3C, 1.6275% 2/17/52 (b)(g)	76,320		57,240
Series 2006-2A:
Class 2B, 1.3575% 2/17/52 (b)(g)	268,574		250,674
Class 2M, 1.4375% 2/17/52 (b)(g)	182,651		164,108
Arran Residential Mortgages Funding No. 1 PLC floater Series 2006-1A Class DB, 1.7838% 4/12/56 (b)(g)	171,422		72,767
Banc of America Mortgage Securities, Inc.:
Series 2003-K Class 1A1, 5.2035% 12/25/33 (g)	7,698		6,251
Series 2004-B Class 1A1, 6.433% 3/25/34 (g)	8,565		6,523
Series 2004-C Class 1A1, 5.971% 4/25/34 (g)	15,186		11,969
Bear Stearns Alt-A Trust floater:
Series 2005-1 Class A1, 0.7538% 1/25/35 (g)	350,705		173,213
Series 2005-2 Class 1A1, 0.7238% 3/25/35 (g)	65,017		36,076
Series 2005-5 Class 1A1, 0.6938% 7/25/35 (g)	82,680		41,888
Chase Mortgage Finance Trust Series 2007-A1 Class 1A5, 4.9685% 2/25/37 (g)	234,667		175,953
Countrywide Alternative Loan Trust planned amortization class Series 2003-5T2 Class A2, 0.8738% 5/25/33 (g)	11,746		11,180
Countrywide Home Loans, Inc. Series 2003-46 Class 4A1, 4.698% 1/19/34 (g)	2,078,233		1,613,809
Credit Suisse First Boston Adjustable Rate Mortgage Trust floater:
Series 2004-1 Class 9A2, 0.8738% 1/25/34 (g)	6,614		3,293
Series 2004-2 Class 7A3, 0.8738% 2/25/35 (g)	14,383		6,741
Series 2004-4 Class 5A2, 0.8738% 3/25/35 (g)	3,162		1,323
Series 2005-1 Class 5A2, 0.8038% 5/25/35 (g)	52,850		25,166
Series 2005-10:
Class 5A1, 0.7338% 1/25/36 (g)	83,855		40,057
Class 5A2, 0.7938% 1/25/36 (g)	37,733		15,128
Series 2005-2:
Class 6A2, 0.7538% 6/25/35 (g)	13,157		5,835
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Credit Suisse First Boston Adjustable Rate Mortgage Trust floater: - continued
Series 2005-2:
Class 6M2, 0.9538% 6/25/35 (g)	$ 168,140		$ 41,072
Series 2005-3 Class 8A2, 0.7138% 7/25/35 (g)	62,436		31,694
Series 2005-4 Class 7A2, 0.7038% 8/25/35 (g)	19,790		9,759
Series 2005-8 Class 7A2, 0.7538% 11/25/35 (g)	49,268		27,858
Credit Suisse First Boston Mortgage Securities Corp. floater:
Series 2004-AR4 Class 5A2, 1.2138% 5/25/34 (g)	1,825		1,064
Series 2004-AR5 Class 11A2, 1.2138% 6/25/34 (g)	3,702		1,912
Series 2004-AR6 Class 9A2, 1.2138% 10/25/34 (g)	18,015		9,025
Series 2004-AR7 Class 6A2, 1.2338% 8/25/34 (g)	5,433		2,476
Series 2004-AR8 Class 8A2, 0.8538% 9/25/34 (g)	3,399		2,025
Series 2007-AR7 Class 2A1, 4.6052% 11/25/34 (g)	508,587		358,064
Deutsche Alt-A Securities Mortgage Loan Trust floater Series 2007-BAR1 Class A3, 0.6338% 3/25/37 (g)	391,531		203,414
DSLA Mortgage Loan Trust Series 2006-AR2 Class 2AB1, 0.5563% 9/19/36 (g)	80,961		65,885
First Horizon Mortgage pass-thru Trust floater Series 2004-FL1 Class 2A1, 2.15% 12/25/34 (g)	6,507		4,112
Fosse Master Issuer PLC floater Series 2006-1A:
Class B2, 1.3025% 10/18/54 (b)(g)	325,823		249,971
Class C2, 1.6125% 10/18/54 (b)(g)	109,222		54,611
Class M2, 1.3925% 10/18/54 (b)(g)	187,268		121,013
Gracechurch Mortgage Financing PLC floater Series 2006-1 Class D2, 1.7213% 11/20/56 (b)(g)	279,515		130,684
Gracechurch Mortgage Funding PLC floater Series 1A Class DB, 1.8238% 10/11/41 (b)(g)	355,001		153,737
Granite Master Issuer PLC floater:
Series 2006-1A Class C2, 1.07% 12/20/54 (b)(g)	685,130		47,959
Series 2006-2 Class C1, 0.94% 12/20/54 (g)	610,149		61,015
Series 2006-3 Class C2, 0.97% 12/20/54 (g)	128,118		7,892
Series 2006-4:
Class B1, 0.56% 12/20/54 (g)	342,740		68,548
Class C1, 0.85% 12/20/54 (g)	209,578		14,670
Class M1, 0.64% 12/20/54 (g)	90,229		13,534
Series 2007-1:
Class 1C1, 0.77% 12/20/54 (g)	211,732		21,173
Class 1M1, 0.62% 12/20/54 (g)	137,740		20,661
Class 2C1, 0.9% 12/20/54 (g)	96,631		9,663
Class 2M1, 0.72% 12/20/54 (g)	176,850		28,296
Series 2007-2 Class 2C1, 0.8913% 12/17/54 (g)	245,041		24,504
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Granite Mortgages PLC floater Series 2003-3 Class 1C, 2.5925% 1/20/44 (g)	$ 49,066		$ 12,267
Harborview Mortgage Loan Trust floater Series 2005-2 Class 2A1A, 0.6863% 5/19/35 (g)	48,540		21,756
Holmes Master Issuer PLC floater Series 2006-1A Class 2C, 1.4844% 7/15/40 (b)(g)	69,433		48,603
Home Equity Loan Trust floater Series 2007-FRE1 Class 2AV1, 0.6038% 4/25/37 (g)	222,932		127,003
Homestar Mortgage Acceptance Corp. floater Series 2004-5 Class A1, 0.9238% 10/25/34 (g)	17,834		10,126
Impac CMB Trust floater:
Series 2004-11 Class 2A2, 1.2138% 3/25/35 (g)	29,898		17,679
Series 2005-1:
Class M4, 1.2238% 4/25/35 (g)	3,537		589
Class M5, 1.2438% 4/25/35 (g)	3,537		433
Class M6, 1.2938% 4/25/35 (g)	5,657		811
Series 2005-3 Class A1, 0.7138% 8/25/35 (g)	70,798		35,941
Series 2005-4 Class 1B1, 1.6894% 5/25/35 (g)	22,103		757
Series 2005-6 Class 1M3, 1.0838% 10/25/35 (g)	19,165		1,515
JPMorgan Mortgage Trust:
Series 2004-A5 Class 2A1, 4.6116% 12/25/34 (g)	290,810		236,669
Series 2006-A2 Class 5A1, 5.1373% 11/25/33 (g)	454,406		389,939
Lehman Structured Securities Corp. floater Series 2005-1 Class A2, 0.8669% 9/26/45 (b)(g)	56,565		28,895
MASTR Adjustable Rate Mortgages Trust:
floater Series 2005-1 Class 1A1, 0.7438% 3/25/35 (g)	8,473		5,249
Series 2007-3 Class 22A2, 0.6838% 5/25/47 (g)	162,591		78,558
Merrill Lynch Alternative Note Asset Trust floater Series 2007-OAR1 Class A1, 0.6438% 2/25/37 (g)	204,653		85,954
Merrill Lynch Floating Trust floater Series 2006-1:
Class B, 0.625% 6/15/22 (b)(g)	23,707		13,039
Class C, 0.645% 6/15/22 (b)(g)	145,170		72,585
Class D, 0.655% 6/15/22 (b)(g)	55,853		25,134
Class E, 0.665% 6/15/22 (b)(g)	89,337		35,735
Class F, 0.695% 6/15/22 (b)(g)	161,078		56,377
Class G, 0.765% 6/15/22 (b)(g)	33,484		10,045
Class H, 0.785% 6/15/22 (b)(g)	67,046		16,762
Class J, 0.825% 6/15/22 (b)(g)	78,221		15,644
Merrill Lynch Mortgage Investors Trust floater:
Series 2003-A Class 2A1, 0.8638% 3/25/28 (g)	25,346		14,743
Series 2003-B Class A1, 0.8138% 4/25/28 (g)	26,971		15,736
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Merrill Lynch Mortgage Investors Trust floater: - continued
Series 2003-D Class A, 0.7838% 8/25/28 (g)	$ 22,880		$ 14,672
Series 2003-E Class A2, 2.0813% 10/25/28 (g)	38,158		22,769
Series 2003-F Class A2, 3.805% 10/25/28 (g)	30,649		18,361
Series 2004-A Class A2, 3.715% 4/25/29 (g)	35,239		21,812
Series 2004-B Class A2, 2.8388% 6/25/29 (g)	26,892		15,907
Series 2004-C Class A2, 2.15% 7/25/29 (g)	31,094		18,456
Series 2004-D Class A2, 3.4625% 9/25/29 (g)	26,434		15,649
Series 2004-E:
Class A2B, 3.825% 11/25/29 (g)	62,574		39,963
Class A2D, 4.015% 11/25/29 (g)	9,075		5,317
Series 2004-G Class A2, 3.48% 11/25/29 (g)	30,251		18,248
Series 2005-A Class A2, 3.3525% 2/25/30 (g)	29,241		17,595
Series 2005-B Class A2, 2.7988% 7/25/30 (g)	89,346		55,688
Series 2006-MLN1 Class M4, 0.8338% 7/25/37 (g)	185,755		873
MortgageIT Trust floater:
Series 2004-2:
Class A1, 0.8438% 12/25/34 (g)	32,209		20,984
Class A2, 0.9238% 12/25/34 (g)	43,570		30,284
Series 2005-2 Class 1A1, 0.7338% 5/25/35 (g)	36,754		24,296
Opteum Mortgage Acceptance Corp. floater Series 2005-3 Class APT, 0.7638% 7/25/35 (g)	371,225		181,633
Option One Mortgage Loan Trust floater Series 2007-CP1 Class M1, 0.7738% 3/25/37 (g)	278,584		13,121
Permanent Financing No. 8 PLC floater Class 3C, 2.7094% 6/10/42 (g)	233,925		158,427
Permanent Master Issuer PLC floater Series 2006-1 Class 2C, 1.4944% 7/17/42 (g)	59,519		44,044
Provident Funding Mortgage Loan Trust Series 2005-2 Class 3A, 4.5836% 10/25/35 (g)	951,349		758,474
RESI Finance LP/RESI Finance DE Corp. floater:
Series 2003-B:
Class B5, 2.7988% 7/10/35 (b)(g)	155,475		75,638
Class B6, 3.2988% 7/10/35 (b)(g)	635,983		281,677
Series 2003-CB1:
Class B3, 1.8988% 6/10/35 (b)(g)	119,880		64,136
Class B4, 2.0988% 6/10/35 (b)(g)	483,166		248,975
Class B5, 2.6988% 6/10/35 (b)(g)	328,553		163,619
Class B6, 3.1988% 6/10/35 (b)(g)	196,487		96,377
Series 2004-A:
Class B4, 1.6488% 2/10/36 (b)(g)	91,382		31,655
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
RESI Finance LP/RESI Finance DE Corp. floater: - continued
Series 2004-A:
Class B5, 2.1488% 2/10/36 (b)(g)	$ 60,916		$ 19,536
Series 2004-B:
Class B4, 1.5488% 2/10/36 (b)(g)	39,635		10,919
Class B5, 1.9988% 2/10/36 (b)(g)	30,695		7,615
Class B6, 2.4488% 2/10/36 (b)(g)	10,707		2,203
Series 2004-C:
Class B4, 1.3988% 9/10/36 (b)(g)	50,956		14,945
Class B5, 1.7988% 9/10/36 (b)(g)	57,137		15,330
Class B6, 2.1988% 9/10/36 (b)(g)	12,653		2,772
Residential Accredit Loans, Inc. floater Series 2006-QO7 Class 3A1, 0.5738% 9/25/46 (g)	196,935		151,821
Residential Asset Mortgage Products, Inc.:
sequential payer Series 2003-SL1 Class A31, 7.125% 4/25/31	27,907		24,653
Series 2005-AR5 Class 1A1, 5.3771% 9/19/35 (g)	28,508		20,909
Residential Funding Securities Corp. floater Series 2003-RP2 Class A1, 0.9238% 6/25/33 (b)(g)	31,260		23,450
ResMAE Mortgage Loan Trust floater Series 2006-1 Class A2A, 0.5738% 2/25/36 (b)(g)	7,077		6,897
Sequoia Mortgage Trust floater:
Series 2003-5 Class A2, 3.7963% 9/20/33 (g)	51,215		31,216
Series 2004-1 Class A, 1.8888% 2/20/34 (g)	18,289		11,712
Series 2004-10 Class A4, 4.5188% 11/20/34 (g)	26,478		16,379
Series 2004-12 Class 1A2, 2.1538% 1/20/35 (g)	79,859		49,089
Series 2004-3 Class A, 3.885% 5/20/34 (g)	25,069		15,313
Series 2004-4 Class A, 4.4388% 5/20/34 (g)	95,801		59,616
Series 2004-5 Class A3, 2.9113% 6/20/34 (g)	37,550		22,964
Series 2004-6:
Class A3A, 2.1613% 6/20/35 (g)	28,822		18,485
Class A3B, 2.3038% 7/20/34 (g)	5,506		3,384
Series 2004-7:
Class A3A, 1.9138% 8/20/34 (g)	29,062		17,409
Class A3B, 2.1388% 7/20/34 (g)	3,581		2,100
Series 2004-8 Class A2, 2.15% 9/20/34 (g)	72,176		46,750
Series 2005-1 Class A2, 1.8388% 2/20/35 (g)	48,390		29,974
Series 2005-2 Class A2, 2.03% 3/20/35 (g)	60,453		36,348
Series 2005-3 Class A1, 0.67% 5/20/35 (g)	29,362		15,773
Soundview Home Equity Loan Trust floater Series 2006-EQ1 Class M7, 1.2738% 9/25/36 (g)	59,946		785
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Structured Asset Securities Corp. floater Series 2004-NP1 Class A, 0.8738% 9/25/33 (b)(g)	$ 10,747		$ 4,555
TBW Mortgage-Backed pass-thru certificates floater Series 2006-4 Class A3, 0.5894% 9/25/36 (g)	373,140		190,235
WaMu Mortgage pass-thru certificates floater:
Series 2006-AR11 Class C1B1, 0.5538% 9/25/46 (g)	17,279		16,537
Series 2006-AR7 Class C1B1, 0.5338% 7/25/46 (g)	7,003		6,769
Wells Fargo Mortgage Backed Securities Trust:
Series 2004-H Class A1, 4.5322% 6/25/34 (g)	389,581		317,010
Series 2005-AR10 Class 2A2, 4.2192% 6/25/35 (g)	235,583		183,756
Series 2005-AR12 Class 2A6, 4.313% 7/25/35 (g)	168,543		128,768
Series 2005-AR3 Class 2A1, 4.4106% 3/25/35 (g)	454,794		350,048
TOTAL PRIVATE SPONSOR			10,218,704
U.S. Government Agency - 3.2%
Fannie Mae Grantor Trust floater Series 2005-90 Class FG, 0.7238% 10/25/35 (g)	3,903,918		3,773,281
Fannie Mae subordinate REMIC pass-thru certificates:
planned amortization class:
Series 2001-68 Class QZ, 5.5% 12/25/16	1,092,980		1,137,914
Series 2002-9 Class PC, 6% 3/25/17	166,238		174,352
Series 2003-84 Class GC, 4.5% 5/25/15	1,234,237		1,254,091
Series 2005-67 Class HD, 5.5% 12/25/30	2,835,000		2,937,087
Series 2006-4 Class PB, 6% 9/25/35	2,298,138		2,391,961
sequential payer:
Series 2002-56 Class MC, 5.5% 9/25/17	590,806		613,369
Series 2004-3 Class BA, 4% 7/25/17	99,484		101,088
Series 2004-45 Class AV, 4.5% 10/25/22	183,552		183,142
Series 2004-86 Class KC, 4.5% 5/25/19	457,152		468,151
Freddie Mac planned amortization class Series 2104 Class PG, 6% 12/15/28	1,062,388		1,102,038
Freddie Mac Multi-class participation certificates guaranteed:
planned amortization class:
Series 2356 Class GD, 6% 9/15/16	608,486		639,210
Series 2363 Class PF, 6% 9/15/16	853,363		891,227
Series 2702 Class WB, 5% 4/15/17	1,831,189		1,888,813
Series 3033 Class UD, 5.5% 10/15/30	1,075,000		1,116,717
Series 3049 Class DB, 5.5% 6/15/31	2,495,000		2,579,650
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed: - continued
sequential payer:
Series 2528 Class HN, 5% 11/15/17	$ 1,515,000		$ 1,581,944
Series 2777 Class AB, 4.5% 6/15/29	2,272,169		2,325,608
Series 2809 Class UA, 4% 12/15/14	269,385		271,215
TOTAL U.S. GOVERNMENT AGENCY			25,430,858
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $36,636,245)		35,649,562
Commercial Mortgage Securities - 1.9%
Banc of America Large Loan, Inc. floater:
Series 2005-MIB1:
Class F, 0.9313% 3/15/22 (b)(g)	70,189		31,585
Class G, 0.9913% 3/15/22 (b)(g)	45,493		17,287
Series 2006-BIX1:
Class F, 0.765% 10/15/19 (b)(g)	180,653		81,294
Class G, 0.785% 10/15/19 (b)(g)	123,054		43,069
Bayview Commercial Asset Trust floater:
Series 2003-2 Class M1, 1.3238% 12/25/33 (b)(g)	12,015		6,909
Series 2004-1:
Class A, 0.8338% 4/25/34 (b)(g)	156,815		117,611
Class B, 2.3738% 4/25/34 (b)(g)	17,424		6,534
Class M1, 1.0338% 4/25/34 (b)(g)	14,123		8,827
Class M2, 1.6738% 4/25/34 (b)(g)	12,717		6,676
Series 2004-2:
Class A, 0.9038% 8/25/34 (b)(g)	118,633		94,907
Class M1, 1.0538% 8/25/34 (b)(g)	26,925		16,828
Series 2004-3:
Class A1, 0.8438% 1/25/35 (b)(g)	238,768		173,107
Class A2, 0.8938% 1/25/35 (b)(g)	34,378		24,065
Class M1, 0.9738% 1/25/35 (b)(g)	41,312		26,853
Class M2, 1.4738% 1/25/35 (b)(g)	26,733		14,703
Series 2005-2A:
Class A1, 0.7838% 8/25/35 (b)(g)	174,825		122,377
Class M1, 0.9038% 8/25/35 (b)(g)	12,972		5,189
Class M2, 0.9538% 8/25/35 (b)(g)	21,394		8,558
Class M3, 0.9738% 8/25/35 (b)(g)	11,837		4,143
Class M4, 1.0838% 8/25/35 (b)(g)	10,866		3,260
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust floater: - continued
Series 2005-3A:
Class A1, 0.7938% 11/25/35 (b)(g)	$ 95,290		$ 61,938
Class A2, 0.8738% 11/25/35 (b)(g)	61,777		40,155
Class M1, 0.9138% 11/25/35 (b)(g)	11,270		4,283
Class M2, 0.9638% 11/25/35 (b)(g)	14,309		5,437
Class M3, 0.9838% 11/25/35 (b)(g)	12,806		4,482
Class M4, 1.0738% 11/25/35 (b)(g)	15,956		5,584
Series 2005-4A:
Class A2, 0.8638% 1/25/36 (b)(g)	224,027		128,815
Class B1, 1.8738% 1/25/36 (b)(g)	19,360		6,776
Class M1, 0.9238% 1/25/36 (b)(g)	72,267		41,553
Class M2, 0.9438% 1/25/36 (b)(g)	21,680		11,924
Class M3, 0.9738% 1/25/36 (b)(g)	31,662		15,831
Class M4, 1.0838% 1/25/36 (b)(g)	17,511		8,318
Class M5, 1.1238% 1/25/36 (b)(g)	17,511		7,880
Class M6, 1.1738% 1/25/36 (b)(g)	18,599		7,811
Series 2006-1:
Class A2, 0.8338% 4/25/36 (b)(g)	34,852		22,932
Class M1, 0.8538% 4/25/36 (b)(g)	12,465		6,233
Class M2, 0.8738% 4/25/36 (b)(g)	13,170		5,926
Class M3, 0.8938% 4/25/36 (b)(g)	11,332		4,759
Class M4, 0.9938% 4/25/36 (b)(g)	6,421		3,484
Class M5, 1.0338% 4/25/36 (b)(g)	6,233		2,368
Class M6, 1.1138% 4/25/36 (b)(g)	12,427		6,437
Series 2006-2A:
Class A1, 0.7038% 7/25/36 (b)(g)	342,015		273,612
Class A2, 0.7538% 7/25/36 (b)(g)	30,877		24,702
Class B1, 1.3438% 7/25/36 (b)(g)	11,561		2,312
Class B3, 3.1738% 7/25/36 (b)(g)	17,467		3,493
Class M1, 0.7838% 7/25/36 (b)(g)	32,397		16,198
Class M2, 0.8038% 7/25/36 (b)(g)	22,857		10,972
Class M3, 0.8238% 7/25/36 (b)(g)	18,960		8,532
Class M4, 0.8938% 7/25/36 (b)(g)	12,803		5,121
Class M5, 0.9438% 7/25/36 (b)(g)	15,736		5,507
Class M6, 1.0138% 7/25/36 (b)(g)	23,478		8,217
Series 2006-3A:
Class B1, 1.2738% 10/25/36 (b)(g)	20,023		6,187
Class B2, 1.8238% 10/25/36 (b)(g)	14,442		4,245
Class B3, 3.0738% 10/25/36 (b)(g)	23,502		5,218
Class M4, 0.9038% 10/25/36 (b)(g)	22,129		9,637
Class M5, 0.9538% 10/25/36 (b)(g)	26,492		10,597
Class M6, 1.0338% 10/25/36 (b)(g)	51,857		19,446
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust floater: - continued
Series 2006-4A:
Class A1, 0.7038% 12/25/36 (b)(g)	$ 95,467		$ 64,936
Class A2, 0.7438% 12/25/36 (b)(g)	430,258		298,513
Class B1, 1.1738% 12/25/36 (b)(g)	15,019		3,004
Class B2, 1.7238% 12/25/36 (b)(g)	15,542		7,159
Class B3, 2.9238% 12/25/36 (b)(g)	26,116		11,494
Class M1, 0.7638% 12/25/36 (b)(g)	31,085		19,957
Class M2, 0.7838% 12/25/36 (b)(g)	20,908		13,172
Class M3, 0.8138% 12/25/36 (b)(g)	21,177		8,894
Class M4, 0.8738% 12/25/36 (b)(g)	25,376		10,150
Class M5, 0.9138% 12/25/36 (b)(g)	23,269		9,308
Class M6, 0.9938% 12/25/36 (b)(g)	20,908		11,621
Series 2007-1:
Class A2, 0.7438% 3/25/37 (b)(g)	80,916		46,527
Class B1, 1.1438% 3/25/37 (b)(g)	26,424		9,248
Class B2, 1.6238% 3/25/37 (b)(g)	19,111		6,068
Class B3, 3.8238% 3/25/37 (b)(g)	51,527		15,072
Class M1, 0.7438% 3/25/37 (b)(g)	23,054		12,507
Class M2, 0.7638% 3/25/37 (b)(g)	17,295		8,950
Class M3, 0.7938% 3/25/37 (b)(g)	15,401		7,700
Class M4, 0.8438% 3/25/37 (b)(g)	12,808		6,148
Class M5, 0.8938% 3/25/37 (b)(g)	19,266		8,670
Class M6, 0.9738% 3/25/37 (b)(g)	26,920		10,768
Series 2007-2A:
Class A1, 0.7438% 7/25/37 (b)(g)	71,708		43,383
Class A2, 0.7938% 7/25/37 (b)(g)	67,161		41,472
Class B1, 2.0738% 7/25/37 (b)(g)	21,044		6,681
Class B2, 2.7238% 7/25/37 (b)(g)	18,237		5,654
Class B3, 3.8238% 7/25/37 (b)(g)	20,510		6,153
Class M1, 0.8438% 7/25/37 (b)(g)	23,937		12,986
Class M2, 0.8838% 7/25/37 (b)(g)	13,432		6,951
Class M3, 0.9638% 7/25/37 (b)(g)	13,604		6,700
Class M4, 1.1238% 7/25/37 (b)(g)	26,192		10,935
Class M5, 1.2238% 7/25/37 (b)(g)	23,162		9,091
Class M6, 1.4738% 7/25/37 (b)(g)	29,396		10,803
Series 2007-3:
Class A2, 0.7638% 7/25/37 (b)(g)	118,990		88,386
Class B1, 1.4238% 7/25/37 (b)(g)	19,257		9,168
Class B2, 2.0738% 7/25/37 (b)(g)	47,506		22,622
Class B3, 4.4738% 7/25/37 (b)(g)	25,823		11,848
Class M1, 0.7838% 7/25/37 (b)(g)	17,138		9,948
Class M2, 0.8138% 7/25/37 (b)(g)	18,290		10,264
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust floater: - continued
Series 2007-3:
Class M3, 0.8438% 7/25/37 (b)(g)	$ 28,258		$ 14,912
Class M4, 0.9738% 7/25/37 (b)(g)	44,438		23,255
Class M5, 1.0738% 7/25/37 (b)(g)	23,588		12,113
Class M6, 1.2738% 7/25/37 (b)(g)	17,961		9,117
Series 2007-4A:
Class B1, 3.0238% 9/25/37 (b)(g)	26,271		8,341
Class B2, 3.9238% 9/25/37 (b)(g)	93,359		27,308
Class M1, 1.4238% 9/25/37 (b)(g)	25,142		12,571
Class M2, 1.5238% 9/25/37 (b)(g)	25,142		11,314
Class M4, 2.0738% 9/25/37 (b)(g)	62,804		25,122
Class M5, 2.2238% 9/25/37 (b)(g)	62,804		23,551
Class M6, 2.4238% 9/25/37 (b)(g)	62,892		22,012
Bear Stearns Commercial Mortgage Securities Trust:
floater:
Series 2006-BBA7:
Class G, 0.9013% 3/15/19 (b)(g)	91,801		52,391
Class H, 1.1113% 3/15/19 (b)(g)	61,770		27,797
Class J, 1.3113% 3/15/19 (b)(g)	46,405		18,562
Series 2007-BBA8:
Class D, 0.705% 3/15/22 (b)(g)	47,569		29,546
Class E, 0.755% 3/15/22 (b)(g)	247,020		144,850
Class F, 0.805% 3/15/22 (b)(g)	151,475		84,852
Class G, 0.855% 3/15/22 (b)(g)	38,931		21,158
Class H, 1.005% 3/15/22 (b)(g)	47,569		21,406
Class J, 1.155% 3/15/22 (b)(g)	47,569		19,028
Series 2003-T12 Class X2, 0.5161% 8/13/39 (b)(g)(i)	11,515,427		123,596
C-BASS Trust floater Series 2006-SC1 Class A, 0.7438% 5/25/36 (b)(g)	124,779		54,181
Citigroup Commercial Mortgage Trust:
floater Series 2006-FL2:
Class G, 0.785% 11/15/36 (b)(g)	50,634		15,697
Class H, 0.825% 11/15/36 (b)(g)	40,527		12,158
Series 2007-C6 Class A1, 5.622% 12/10/49 (g)	2,144,141		1,834,238
Citigroup/Deutsche Bank Commercial Mortgage Trust sequential payer Series 2006-CD3 Class A3, 5.607% 10/15/48	3,000,000		2,136,455
COMM pass-thru certificates floater:
Series 2005-F10A:
Class D, 0.765% 4/15/17 (b)(g)	108,291		51,232
Class E, 0.825% 4/15/17 (b)(g)	34,474		16,137
Class F, 0.865% 4/15/17 (b)(g)	19,555		8,663
Commercial Mortgage Securities - continued
	Principal Amount		Value
COMM pass-thru certificates floater: - continued
Series 2005-F10A:
Class G, 1.005% 4/15/17 (b)(g)	$ 19,555		$ 8,471
Class H, 1.075% 4/15/17 (b)(g)	19,555		7,985
Class J, 1.305% 4/15/17 (b)(g)	14,996		6,770
Series 2005-FL11:
Class F, 0.9113% 11/15/17 (b)(g)	44,319		14,808
Class G, 0.9613% 11/15/17 (b)(g)	30,720		9,576
Credit Suisse Commercial Mortgage Trust sequential payer Series 2007-C2 Class A1, 5.269% 1/15/49	450,653		439,267
Credit Suisse Mortgage Capital Certificates floater Series 2007-TFL1:
Class C:
0.6313% 2/15/22 (b)(g)	212,546		63,764
0.7313% 2/15/22 (b)(g)	75,912		18,978
Class F, 0.7813% 2/15/22 (b)(g)	151,805		33,397
Ginnie Mae guaranteed Multi-family REMIC pass-thru securities sequential payer Series 2002-35 Class C, 5.8718% 10/16/23 (g)	31,989		32,326
Ginnie Mae guaranteed REMIC pass-thru securities sequential payer:
Series 2003-47 Class C, 4.227% 10/16/27	1,694,176		1,702,217
Series 2003-59 Class D, 3.654% 10/16/27	3,060,000		3,035,906
GMAC Commercial Mortgage Securities, Inc. Series 2004-C3 Class X2, 0.6604% 12/10/41 (g)(i)	9,708,464		115,344
Greenwich Capital Commercial Funding Corp. Series 2006-GG7 Class A4, 5.9139% 7/10/38 (g)	960,000		668,510
GS Mortgage Securities Corp. II floater Series 2006-FL8A Class F, 0.885% 6/6/20 (b)(g)	95,176		54,250
JPMorgan Chase Commercial Mortgage Securities Trust floater Series 2006-FLA2:
Class D, 0.6913% 11/15/18 (b)(g)	26,312		12,367
Class E, 0.7413% 11/15/18 (b)(g)	37,286		16,779
Class F, 0.7913% 11/15/18 (b)(g)	55,923		24,606
Class G, 0.8213% 11/15/18 (b)(g)	48,602		20,413
Class H, 0.9613% 11/15/18 (b)(g)	37,286		14,915
LB-UBS Commercial Mortgage Trust sequential payer:
Series 2006-C7 Class A1, 5.279% 11/15/38	296,104		288,861
Series 2007-C2 Class A1, 5.226% 2/15/40	377,464		368,300
Lehman Brothers Floating Rate Commercial Mortgage Trust floater Series 2006-LLFA:
Class F, 0.795% 9/15/21 (b)(g)	130,294		53,559
Class G, 0.815% 9/15/21 (b)(g)	257,399		94,178
Class H, 0.855% 9/15/21 (b)(g)	66,405		22,966
Commercial Mortgage Securities - continued
	Principal Amount		Value
Morgan Stanley Capital I Trust:
floater:
Series 2006-XLF Class C, 1.662% 7/15/19 (b)(g)	$ 93,780		$ 9,378
Series 2007-XCLA Class A1, 0.662% 7/17/17 (b)(g)	312,375		171,806
Series 2007-XLCA Class B, 0.9613% 7/17/17 (b)(g)	177,809		16,003
Series 2007-XLFA:
Class D, 0.652% 10/15/20 (b)(g)	76,067		19,017
Class E, 0.712% 10/15/20 (b)(g)	95,138		19,028
Class F, 0.762% 10/15/20 (b)(g)	57,094		10,277
Class G, 0.802% 10/15/20 (b)(g)	70,577		10,587
Class H, 0.892% 10/15/20 (b)(g)	44,426		4,443
Class J, 1.042% 10/15/20 (b)(g)	50,712		4,057
Class MHRO, 1.152% 10/15/20 (b)(g)	20,614		2,268
Class MJPM, 1.462% 10/15/20 (b)(g)	6,975		628
Class MSTR, 1.162% 10/15/20 (b)(g)	12,707		1,779
Class NHRO, 1.352% 10/15/20 (b)(g)	30,105		2,709
Class NSTR, 1.312% 10/15/20 (b)(g)	11,834		1,302
Series 2007-XLC1:
Class C, 1.0613% 7/17/17 (b)(g)	242,693		19,415
Class D, 1.1613% 7/17/17 (b)(g)	114,195		7,994
Class E, 1.2613% 7/17/17 (b)(g)	92,798		5,568
STRIPS III Ltd./STRIPS III Corp. floater Series 2004-1A Class A, 0.9525% 3/24/18 (b)(g)	20,027		16,422
Wachovia Bank Commercial Mortgage Trust floater:
Series 2005-WL5A Class K, 1.655% 1/15/18 (b)(g)	145,481		80,015
Series 2006-WL7A:
Class E, 0.735% 9/15/21 (b)(g)	158,847		65,127
Class F, 0.795% 8/11/18 (b)(g)	214,060		64,218
Class G, 0.815% 8/11/18 (b)(g)	202,788		50,697
Class J, 0.9331% 8/11/18 (b)(g)	45,086		16,231
Class X1A, 0.0239% 9/15/21 (b)(g)(i)	322,727		2
Series 2007-WHL8:
Class AP1, 1.155% 6/15/20 (b)(g)	10,647		2,662
Class AP2, 1.255% 6/15/20 (b)(g)	17,436		3,487
Class F, 0.935% 6/15/20 (b)(g)	338,588		108,348
Class LXR2, 1.255% 6/15/20 (b)(g)	230,831		34,625
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $16,993,359)		15,271,784
Foreign Government and Government Agency Obligations - 0.1%
	Principal Amount		Value
Chilean Republic 7.125% 1/11/12 (Cost $673,964)	$ 613,000		$ 668,967
Supranational Obligations - 0.0%
Corporacion Andina de Fomento:
5.2% 5/21/13	49,000		43,103
6.875% 3/15/12	79,000		75,658
TOTAL SUPRANATIONAL OBLIGATIONS (Cost $119,410)		118,761
Bank Notes - 0.1%
National City Bank, Cleveland 2.3025% 3/1/13 (g) (Cost $692,668)	1,000,000		780,000

Fixed-Income Funds - 25.4%
	Shares
Fidelity 1-3 Year Duration Securitized Bond Central Fund (h)	361,343		25,630,041
Fidelity Commercial Mortgage-Backed Securities Central Fund (h)	987,552		67,153,521
Fidelity Corporate Bond 1-10 Year Central Fund (h)	859,752		76,285,794
Fidelity Corporate Bond 1-5 Year Central Fund (h)	111,069		10,217,217
Fidelity Specialized High Income Central Fund (h)	264,717		20,573,791
TOTAL FIXED-INCOME FUNDS (Cost $258,465,605)		199,860,364
Preferred Securities - 0.1%
	Principal Amount
FINANCIALS - 0.1%
Diversified Financial Services - 0.1%
ING Groep NV 5.775% (g)	$ 212,000		66,908
MUFG Capital Finance 1 Ltd. 6.346% (g)	932,000		583,379
TOTAL PREFERRED SECURITIES (Cost $690,964)		650,287
Cash Equivalents - 5.1%
	Maturity Amount		Value
Investments in repurchase agreements in a joint trading account at 0.26%, dated 2/27/09 due 3/2/09 (Collateralized by U.S. Government Obligations) # (Cost $40,231,000)	$ 40,231,868	$ 40,231,000
TOTAL INVESTMENT PORTFOLIO - 103.2% (Cost $890,405,843)		812,293,609
NET OTHER ASSETS - (3.2)%		(24,852,302)
NET ASSETS - 100%		$ 787,441,307

Swap Agreements
	Expiration Date		Notional Amount
Credit Default Swaps
Receive monthly notional amount multiplied by .52% and pay Bank of America upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R8 Class M6, 6.835% 9/25/34 (Rating-Caa2) (e)	Oct. 2034		$ 918,926	(638,237)
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R9 Class M5, 5.5913% 10/25/34 (Rating-Ba2) (e)	Nov. 2034		409,000	(378,805)
Receive monthly notional amount multiplied by 3.05% and pay Merrill Lynch upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8, Class B3, 7.2913% 9/25/34 (Rating-B1) (e)	Oct. 2034		119,687	(64,278)
Receive monthly notional amount multiplied by 5% and pay Deutsche Bank upon credit event of MASTR Asset Backed Securities Trust, par value of the notional amount of MASTR Asset Backed Securities Trust Series 2003-NC1 Class M6, 8.1913% 4/25/33 (Rating-Baa3) (e)	May 2033		409,000	(343,651)
Swap Agreements - continued
	Expiration Date		Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by 6.25% and pay Deutsche Bank upon credit event of Residential Asset Mortgage Products, Inc., par value of the notional amount of Residential Asset Mortgage Products, Inc. Series 2006-RS5, 7.17% 9/25/36 (Rating-C) (e)	Oct. 2036		$ 335,099	$ (323,462)
Receive monthly notional amount multiplied by 2.5% and pay Credit Suisse First Boston upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R11 Class M9, 8.03% 11/25/34 (Rating-C) (e)	Dec. 2034		248,360	(234,477)
Receive monthly notional amount multiplied by 3.35% and pay Morgan Stanley, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-HE7, Class B3, 9.01% 8/25/34 (Rating-C) (e)	Sept. 2034		119,548	(109,815)
Receive quarterly a fixed rate of .4% multiplied by the notional amount and pay to Merrill Lynch, Inc., upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 4 Index, par value of the proportional notional amount (Rating-Baa3) (f)	June 2010		9,760,000	(619,575)
Receive quarterly a fixed rate of .5% multiplied by the notional amount and pay to Merrill Lynch, Inc., upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 3 Index, par value of the proportional notional amount (Rating-Baa3) (f)	March 2010		6,219,400	(287,972)
Receive monthly notional amount multiplied by .8% and pay Deutsche Bank upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WCH1 Class M6, 6.365% 1/25/35 (Rating-Baa3) (e)	Feb. 2035		600,000	(565,808)
Swap Agreements - continued
	Expiration Date		Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by .82% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC6 Class M3, 5.6413% 7/25/34 (Rating-Baa2) (e)	August 2034		$ 98,734	$ (58,054)
Receive monthly notional amount multiplied by .85% and pay Deutsche Bank upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WHQ2 Class M6, 6.105% 5/25/35 (Rating-Caa2) (e)	June 2035		600,000	(568,952)
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8 Class M6, 5.4413% 9/25/34 (Rating-A3) (e)	Oct. 2034		122,388	(72,516)
Receive monthly notional amount multiplied by 2.54% and pay Merrill Lynch upon credit event of Countrywide Home Loans, Inc., par value of the notional amount of Countrywide Home Loans, Inc. Series 2003-BC1 Class B1, 7.6913% 3/25/32 (Rating-Baa3) (e)	April 2032		36,015	(29,267)
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-1 Class M9, 7.3913% 2/25/34 (Rating-Baa3) (e)	March 2034		21,052	(1,404)
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-A Class B3, 7.0413% 1/25/34 (Rating-Ba2) (e)	Feb. 2034		806	(762)
Swap Agreements - continued
	Expiration Date		Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by 3% and pay UBS upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2005-R4 Class M9, 7.07% 7/25/35 (Rating-Ca) (e)	August 2035		$ 700,000	$ (657,317)
Receive quarterly a fixed rate of .45% multiplied by the notional amount and pay to Goldman Sachs, upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 5 Index, par value of the proportional notional amount (Rating-Baa3) (f)	Dec. 2010		14,640,000	(1,013,091)
TOTAL CREDIT DEFAULT SWAPS			35,358,015	(5,967,443)
Interest Rate Swaps
Receive semi-annually a fixed rate equal to 3.475% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	Jan. 2013		25,000,000	1,072,963
Receive semi-annually a fixed rate equal to 3.567% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	May 2011		19,783,000	962,089
Receive semi-annually a fixed rate equal to 4.449% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	May 2018		6,931,000	727,141
Receive semi-annually a fixed rate equal to 4.94% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	March 2012		25,000,000	2,537,753
Receive semi-annually a fixed rate equal to 5.02% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	Nov. 2011		20,000,000	1,895,576
TOTAL INTEREST RATE SWAPS			96,714,000	7,195,522
		$ 132,072,015		$ 1,228,079

Legend

(a) Non-income producing - Issuer is in default.

(b) 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. At the end of the period, the value of these securities amounted to $53,780,352 or 6.8% of net assets.

(c) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(d) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $1,852,144.

(e) Represents a credit default swap contract in which the fund has sold protection on the underlying reference entity. For the underlying reference entity, ratings disclosed are from Moody's Investor Services, Inc. Where Moody's ratings are not available, S&P ratings are disclosed and are indicated as such. Any underlying reference entity which is Not Rated (NR) by Moody's or S&P is designated as such. All ratings are as of the report date and do not reflect subsequent changes.

(f) Represents a tradable index of credit default swaps on investment grade debt of U.S. companies. In addition, the swap represents a contract in which the fund has sold protection on the underlying securities within the index. Ratings represent a weighted average of the ratings of all securities included in the index. Ratings used in the weighted average are from Moody's Investor Services, Inc., or S&P where Moody's ratings are not available. All ratings are as of the report date and do not reflect subsequent changes.

(g) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(h) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request.

(i) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.

(j) Non-income producing

# Additional Information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value
$40,231,000 due 3/02/09 at 0.26%
Goldman, Sachs & Co.	$ 15,774,577
UBS Securities LLC	24,456,423
	$ 40,231,000

Affiliated Central Funds

Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:

Fund	Income earned
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ 692,998
Fidelity Commercial Mortgage-Backed Securities Central Fund	2,531,281
Fidelity Corporate Bond 1-10 Year Central Fund	7,257,245
Fidelity Corporate Bond 1-5 Year Central Fund	371,176
Fidelity Specialized High Income Central Fund	870,843
Fidelity Ultra-Short Central Fund	486,340
Total	$ 12,209,883

Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows:

Fund	Value, beginning of period	Purchases	Sales Proceeds	Value, end of period	% ownership, end of period
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ 47,438,002	$ 692,998	$ 17,316,138	$ 25,630,041	3.2%
Fidelity Commercial Mortgage-Backed Securities Central Fund	99,633,125	2,531,287	12,995,240	67,153,521	2.9%
Fidelity Corporate Bond 1-10 Year Central Fund	275,919,248	7,286,616	187,226,317*	76,285,794	3.1%
Fidelity Corporate Bond 1-5 Year Central Fund	18,814,985	371,176	7,835,596	10,217,217	2.9%
Fidelity Specialized High Income Central Fund	23,421,149	870,843	-	20,573,791	5.3%
Fidelity Ultra-Short Central Fund	68,380,155	-	57,552,245 *	-	0.0%
Total	$ 533,606,664	$ 11,752,920	$ 282,925,536	$ 199,860,364

* Includes the value of shares redeemed through in-kind contributions. See Note 6 of the Notes to Financial Statements.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Investments (Unaudited) - continued

Other Information

The following is a summary of the inputs used, as of February 28, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:
Description	Total	Level 1	Level 2	Level 3
Investments in Securities	$ 812,293,609	$ 199,860,364	$ 608,617,667	$ 3,815,578
Other Financial Instruments*	$ 1,228,079	$ -	$ 4,307,371	$ (3,079,292)

* Other financial instruments include Swap Agreements.

The following is a reconciliation of assets for which Level 3 inputs were used in determining value:

	Investments in Securities	Other Financial Instruments
Beginning Balance	$ 215,029	$ (6,691,180)
Total Realized Gain (Loss)	27,456	-*
Total Unrealized Gain (Loss)	987,424	3,696,575
Cost of Purchases	4,347,492	-
Proceeds of Sales	(87,523)	-
Amortization/Accretion	(1,674,300)	-
Transfer in/out of Level 3	-	(84,687)
Ending Balance	$ 3,815,578	$ (3,079,292)

* The realized gain (loss) for derivative instruments is not included in the rollforward. For the period, the realized gain (loss) on these instruments totaled $(313,172).

The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities or Other Financial Instruments identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period.

Income Tax Information

At August 31, 2008, the fund had a capital loss carryforward of approximately $16,598,133 of which $8,055,126 and $8,543,007 will expire on August 31, 2014 and 2016, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

	February 28, 2009 (Unaudited)
Assets
Investment in securities, at value (including repurchase agreements of $40,231,000) - See accompanying schedule: Unaffiliated issuers (cost $631,940,238)	$ 612,433,244
Fidelity Central Funds (cost $258,465,605)	199,860,365
Total Investments (cost $890,405,843)		$ 812,293,609
Cash		19,883
Receivable for investments sold		7,500,984
Receivable for swap agreements		20,391
Receivable for fund shares sold		1,096,558
Interest receivable		5,398,324
Distributions receivable from Fidelity Central Funds		1,614,214
Unrealized appreciation on swap agreements		7,195,522
Prepaid expenses		7,278
Other receivables		386,084
Total assets		835,532,847
Liabilities
Payable for investments purchased Regular delivery	$ 2,585,073
Delayed delivery	29,721,438
Payable for swap agreements	397,241
Payable for fund shares redeemed	8,299,497
Distributions payable	174,470
Unrealized depreciation on swap agreements	5,967,443
Accrued management fee	215,240
Distribution fees payable	148,488
Other affiliated payables	154,491
Other payables and accrued expenses	428,159
Total liabilities		48,091,540
Net Assets		$ 787,441,307
Net Assets consist of:
Paid in capital		$ 942,136,133
Distributions in excess of net investment income		(3,853,986)
Accumulated undistributed net realized gain (loss) on investments		(70,222,892)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		(80,617,948)
Net Assets		$ 787,441,307

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Assets and Liabilities - continued

	February 28, 2009 (Unaudited)
Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($178,558,265 ÷ 18,874,320 shares)		$ 9.46
Maximum offering price per share (100/97.25 of $9.46)		$ 9.73
Class T: Net Asset Value and redemption price per share ($276,605,549 ÷ 29,223,318 shares)		$ 9.47
Maximum offering price per share (100/97.25 of $9.47)		$ 9.74
Class B: Net Asset Value and offering price per share ($12,212,651 ÷ 1,292,263 shares)A		$ 9.45
Class C: Net Asset Value and offering price per share ($52,145,437 ÷ 5,522,571 shares)A		$ 9.44
Institutional Class: Net Asset Value, offering price and redemption price per share ($267,919,405 ÷ 28,255,622 shares)		$ 9.48

^A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

Six months ended February 28, 2009 (Unaudited)
Investment Income
Interest		$ 5,046,900
Income from Fidelity Central Funds		12,209,883
Total income		17,256,783
Expenses
Management fee	$ 1,347,083
Transfer agent fees	808,544
Distribution fees	909,970
Accounting and security lending fees	155,669
Custodian fees and expenses	11,932
Independent trustees' compensation	1,570
Registration fees	51,550
Audit	46,664
Legal	1,839
Miscellaneous	(22,867)
Total expenses before reductions	3,311,954
Expense reductions	(4,122)	3,307,832
Net investment income		13,948,951
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	6,050,025
Fidelity Central Funds	(54,109,453)
Swap agreements	(3,132,045)
Total net realized gain (loss)		(51,191,473)
Change in net unrealized appreciation (depreciation) on: Investment securities	(26,222,138)
Swap agreements	4,954,985
Total change in net unrealized appreciation (depreciation)		(21,267,153)
Net gain (loss)		(72,458,626)
Net increase (decrease) in net assets resulting from operations		$ (58,509,675)

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

	Six months ended February 28, 2009 (Unaudited)	Year ended August 31, 2008
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 13,948,951	$ 54,822,787
Net realized gain (loss)	(51,191,473)	(4,076,446)
Change in net unrealized appreciation (depreciation)	(21,267,153)	(24,788,132)
Net increase (decrease) in net assets resulting from operations	(58,509,675)	25,958,209
Distributions to shareholders from net investment income	(19,323,285)	(56,702,503)
Share transactions - net increase (decrease)	(126,015,790)	(533,888,338)
Total increase (decrease) in net assets	(203,848,750)	(564,632,632)
Net Assets
Beginning of period	991,290,057	1,555,922,689
End of period (including distributions in excess of net investment income of $3,853,986 and undistributed net investment income of $1,520,348, respectively)	$ 787,441,307	$ 991,290,057

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 J	2005 I	2004 I	2003 I
Selected Per-Share Data
Net asset value, beginning of period	$ 10.31	$ 10.64	$ 10.78	$ 10.87	$ 11.34	$ 11.32	$ 11.06
Income from Investment Operations
Net investment income E	.156	.457	.487	.385	.397	.385	.420
Net realized and unrealized gain (loss)	(.789)	(.319)	(.167)	(.043)	(.338)	.120	.254
Total from investment operations	(.633)	.138	.320	.342	.059	.505	.674
Distributions from net investment income	(.217)	(.468)	(.460)	(.382)	(.379)	(.385)	(.414)
Distributions from net realized gain	-	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.217)	(.468)	(.460)	(.432)	(.529)	(.485)	(.414)
Net asset value, end of period	$ 9.46	$ 10.31	$ 10.64	$ 10.78	$ 10.87	$ 11.34	$ 11.32
Total Return B, C, D	(6.13)%	1.28%	2.99%	3.23%	.54%	4.58%	6.16%
Ratios to Average Net Assets F, H
Expenses before reductions	.88% A	.85%	.79%	.75% A	.81%	.84%	.81%
Expenses net of fee waivers, if any	.88% A	.85%	.79%	.75% A	.81%	.84%	.81%
Expenses net of all reductions	.88% A	.85%	.78%	.74% A	.80%	.84%	.81%
Net investment income	3.25% A	4.32%	4.52%	4.30% A	3.60%	3.42%	3.72%
Supplemental Data
Net assets, end of period (000 omitted)	$ 178,558	$ 216,683	$ 255,591	$ 229,490	$ 219,441	$ 186,748	$ 166,701
Portfolio turnover rate G	101% A	81%	89% K	43% A	73%	96%	108%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower had certain expenses not been reduced during the periods shown. ^D Total returns do not include the effect of the sales charges. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I For the period ended October 31. ^J For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. ^K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class T

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 J	2005 I	2004 I	2003 I
Selected Per-Share Data
Net asset value, beginning of period	$ 10.32	$ 10.64	$ 10.79	$ 10.88	$ 11.35	$ 11.32	$ 11.06
Income from Investment Operations
Net investment income E	.158	.462	.484	.377	.386	.374	.408
Net realized and unrealized gain (loss)	(.788)	(.310)	(.178)	(.043)	(.338)	.130	.253
Total from investment operations	(.630)	.152	.306	.334	.048	.504	.661
Distributions from net investment income	(.220)	(.472)	(.456)	(.374)	(.368)	(.374)	(.401)
Distributions from net realized gain	-	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.220)	(.472)	(.456)	(.424)	(.518)	(.474)	(.401)
Net asset value, end of period	$ 9.47	$ 10.32	$ 10.64	$ 10.79	$ 10.88	$ 11.35	$ 11.32
Total Return B, C, D	(6.10)%	1.41%	2.85%	3.15%	.43%	4.56%	6.03%
Ratios to Average Net Assets F, H
Expenses before reductions	.82% A	.82%	.82%	.84% A	.91%	.95%	.93%
Expenses net of fee waivers, if any	.82% A	.82%	.82%	.84% A	.91%	.95%	.93%
Expenses net of all reductions	.82% A	.82%	.82%	.83% A	.91%	.95%	.93%
Net investment income	3.31% A	4.35%	4.48%	4.21% A	3.49%	3.32%	3.60%
Supplemental Data
Net assets, end of period (000 omitted)	$ 276,606	$ 344,229	$ 503,737	$ 563,677	$ 622,245	$ 680,947	$ 711,263
Portfolio turnover rate G	101% A	81%	89% K	43% A	73%	96%	108%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower had certain expenses not been reduced during the periods shown. ^D Total returns do not include the effect of the sales charges. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I For the period ended October 31. ^J For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. ^K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class B

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 J	2005 I	2004 I	2003 I
Selected Per-Share Data
Net asset value, beginning of period	$ 10.30	$ 10.63	$ 10.77	$ 10.86	$ 11.33	$ 11.31	$ 11.05
Income from Investment Operations
Net investment income E	.123	.385	.409	.316	.310	.295	.331
Net realized and unrealized gain (loss)	(.788)	(.318)	(.169)	(.043)	(.338)	.120	.253
Total from investment operations	(.665)	.067	.240	.273	(.028)	.415	.584
Distributions from net investment income	(.185)	(.397)	(.380)	(.313)	(.292)	(.295)	(.324)
Distributions from net realized gain	-	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.185)	(.397)	(.380)	(.363)	(.442)	(.395)	(.324)
Net asset value, end of period	$ 9.45	$ 10.30	$ 10.63	$ 10.77	$ 10.86	$ 11.33	$ 11.31
Total Return B, C, D	(6.45)%	.60%	2.24%	2.57%	(.25)%	3.75%	5.32%
Ratios to Average Net Assets F, H
Expenses before reductions	1.55% A	1.53%	1.52%	1.52% A	1.61%	1.66%	1.60%
Expenses net of fee waivers, if any	1.55% A	1.53%	1.52%	1.52% A	1.60%	1.65%	1.60%
Expenses net of all reductions	1.55% A	1.53%	1.52%	1.52% A	1.60%	1.65%	1.60%
Net investment income	2.58% A	3.64%	3.78%	3.52% A	2.80%	2.62%	2.92%
Supplemental Data
Net assets, end of period (000 omitted)	$ 12,213	$ 15,141	$ 22,609	$ 46,344	$ 73,017	$ 118,751	$ 154,697
Portfolio turnover rate G	101% A	81%	89% K	43% A	73%	96%	108%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower had certain expenses not been reduced during the periods shown. ^D Total returns do not include the effect of the contingent deferred sales charge. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I For the period ended October 31. ^J For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. ^K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class C

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 J	2005 I	2004 I	2003 I
Selected Per-Share Data
Net asset value, beginning of period	$ 10.29	$ 10.62	$ 10.76	$ 10.85	$ 11.32	$ 11.30	$ 11.04
Income from Investment Operations
Net investment income E	.120	.378	.400	.308	.301	.289	.322
Net realized and unrealized gain (loss)	(.788)	(.317)	(.167)	(.042)	(.337)	.120	.254
Total from investment operations	(.668)	.061	.233	.266	(.036)	.409	.576
Distributions from net investment income	(.182)	(.391)	(.373)	(.306)	(.284)	(.289)	(.316)
Distributions from net realized gain	-	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.182)	(.391)	(.373)	(.356)	(.434)	(.389)	(.316)
Net asset value, end of period	$ 9.44	$ 10.29	$ 10.62	$ 10.76	$ 10.85	$ 11.32	$ 11.30
Total Return B, C, D	(6.49)%	.54%	2.18%	2.51%	(.33)%	3.70%	5.26%
Ratios to Average Net Assets F, H
Expenses before reductions	1.62% A	1.59%	1.59%	1.60% A	1.67%	1.70%	1.67%
Expenses net of fee waivers, if any	1.62% A	1.59%	1.59%	1.60% A	1.67%	1.70%	1.67%
Expenses net of all reductions	1.62% A	1.59%	1.58%	1.60% A	1.67%	1.70%	1.67%
Net investment income	2.52% A	3.58%	3.72%	3.45% A	2.73%	2.57%	2.86%
Supplemental Data
Net assets, end of period (000 omitted)	$ 52,145	$ 52,529	$ 58,693	$ 63,946	$ 74,522	$ 91,149	$ 113,849
Portfolio turnover rate G	101% A	81%	89% K	43% A	73%	96%	108%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower had certain expenses not been reduced during the periods shown. ^D Total returns do not include the effect of the contingent deferred sales charge. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I For the period ended October 31. ^J For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. ^K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Institutional Class

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 I	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.34	$ 10.66	$ 10.80	$ 10.89	$ 11.36	$ 11.34	$ 11.08
Income from Investment Operations
Net investment income D	.173	.494	.513	.401	.417	.400	.437
Net realized and unrealized gain (loss)	(.800)	(.311)	(.169)	(.043)	(.339)	.122	.254
Total from investment operations	(.627)	.183	.344	.358	.078	.522	.691
Distributions from net investment income	(.233)	(.503)	(.484)	(.398)	(.398)	(.402)	(.431)
Distributions from net realized gain	-	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.233)	(.503)	(.484)	(.448)	(.548)	(.502)	(.431)
Net asset value, end of period	$ 9.48	$ 10.34	$ 10.66	$ 10.80	$ 10.89	$ 11.36	$ 11.34
Total Return B, C	(6.05)%	1.71%	3.22%	3.37%	.71%	4.72%	6.30%
Ratios to Average Net Assets E, G
Expenses before reductions	.54% A	.53%	.55%	.57% A	.63%	.70%	.66%
Expenses net of fee waivers, if any	.54% A	.53%	.55%	.57% A	.63%	.70%	.66%
Expenses net of all reductions	.54% A	.53%	.55%	.57% A	.63%	.70%	.66%
Net investment income	3.60% A	4.64%	4.75%	4.48% A	3.77%	3.57%	3.87%
Supplemental Data
Net assets, end of period (000 omitted)	$ 267,919	$ 362,708	$ 715,292	$ 582,070	$ 465,201	$ 269,727	$ 155,302
Portfolio turnover rate F	101% A	81%	89% J	43% A	73%	96%	108%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower had certain expenses not been reduced during the periods shown. ^D Calculated based on average shares outstanding during the period. ^E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. ^F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^H For the period ended October 31. ^I For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. ^J Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Notes to Financial Statements

For the period ended February 28, 2009 (Unaudited)

1. Organization.

Fidelity Advisor Intermediate Bond Fund (the Fund) is a fund of Fidelity Advisor Series II (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of four years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

2. Investments in Fidelity Central Funds.

The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.

Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.

Fidelity Central Fund	Investment Manager	Investment Objective	Investment Practices
Fidelity 1-3 Year Duration Securitized Bond Central Fund	Fidelity Investment Money Management, Inc. (FIMM)	Seeks a high level of income by normally investing in investment-grade securitized debt securities and repurchase agreements for those securities.	Futures Repurchase Agreements Restricted Securities Swap Agreements

Semiannual Report

2. Investments in Fidelity Central Funds - continued

Fidelity Central Fund	Investment Manager	Investment Objective	Investment Practices
Fidelity Commercial Mortgage-Backed Securities Central Fund	FIMM	Seeks a high level of income by normally investing in investment-grade commercial mortgage-backed securities and repurchase agreements for those securities.	Futures Repurchase Agreements Restricted Securities Swap Agreements
Fidelity Corporate Bond 1-5 Year Central Fund	FIMM	Seeks a high level of income by normally investing in investment-grade corporate bonds and other corporate debt securities and repurchase agreements for those securities.	Repurchase Agreements Restricted Securities Swap Agreements
Fidelity Corporate Bond 1-10 Year Central Fund	FIMM	Seeks a high level of income by normally investing in investment-grade corporate bonds and other corporate debt securities and repurchase agreements for those securities.	Delayed Delivery & When Issued Securities Repurchase Agreements Restricted Securities Swap Agreements
Fidelity Specialized High Income Central Fund	Fidelity Management & Research Company, Inc. (FMRC)	Seeks a high level of current income by normally investing in income-producing debt securities, with an emphasis on lower-quality debt securities.	Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities

An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

3. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Fund uses independent pricing services approved by the Board of Trustees to value its investments.

Debt securities, including restricted securities, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Swaps are marked-to-market daily based on valuations from independent pricing services or dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value. Actual prices received at disposition may differ.

When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.

The Fund adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in

Semiannual Report

3. Significant Accounting Policies - continued

Security Valuation - continued

active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:

Level 1	Quoted prices in active markets for identical securities.
Level 2	Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3	Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.

The aggregate value by input level, as of February 28, 2009, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted to the rate of inflation. Interest is accrued based on the principal value, which is adjusted for inflation. Any increase in the principal amount of an inflation-indexed bond is recorded as interest income, even though principal is not received until maturity. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

3. Significant Accounting Policies - continued

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years.

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to swap agreements, prior period premium and discount on debt securities, market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation	$ 7,729,686
Unrealized depreciation	(85,083,117)
Net unrealized appreciation (depreciation)	$ (77,353,431)
Cost for federal income tax purposes	$ 889,647,040

New Accounting Pronouncement. In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for reporting periods beginning after

Semiannual Report

3. Significant Accounting Policies - continued

New Accounting Pronouncement - continued

November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance.

4. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Delayed Delivery Transactions and When-Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

4. Operating Policies - continued

Swap Agreements. The Fund entered into swap agreements, which are contracts between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Gains or losses are realized in the event of an early termination of a swap agreement. Risks of loss may exceed amounts recognized on the Fund's Statement of Asset and Liabilities. Risks of loss may include unfavorable changes in the returns of the underlying instruments or indexes, adverse fluctuations of interest rates, failure of the counterparty to perform under the terms of the agreement and lack of liquidity in the market. Details of swap agreements open at period end are included in the Fund's Schedule of Investments under the caption "Swap Agreements." Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian bank in accordance with the swap agreement and if required, is identified in the Fund's Schedule of Investments. The Fund could experience delays and costs in gaining access to the collateral even though it is held in the Fund's custodian bank.

The Fund entered into interest rate swap agreements to manage its exposure to interest rate changes. Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates (e.g. fixed rate, floating rate), applied to a notional principal amount. Changes in interest rates can have a negative effect on both the value of the Fund's bond holdings as well as the amount of interest income earned. In general, the value of bonds can fall when interest rates rise and can rise when interest rates fall.

The Fund entered into credit default swap agreements to provide a measure of protection against defaults of an issuer ("buyer of protection") and/or to gain credit exposure to an issuer to which it is not otherwise exposed ("seller of protection"). The issuer may be either a single issuer or a "basket" of issuers. As a buyer of protection, the Fund does so when it holds bonds of the issuer or without owning the underlying asset or debt issued by the reference entity. Under the terms of a credit default swap the buyer of protection (buyer) receives credit protection in exchange for making periodic payments to the seller of protection (seller) based on a fixed percentage applied to a notional principal amount. In return for these payments, the seller acts as a guarantor of the credit worthiness of a reference obligation. Any upfront payments made or received upon entering a credit default swap contract would be amortized or accreted over the life of the swap and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Periodic payments are made over the life of the contract provided that no credit event occurs. For credit default swaps on asset-backed securities, a credit event may be triggered by events such as failure to pay principal, maturity extension, rating downgrade or write-down. For credit default swaps on corporate or sovereign issuers, a credit event

Semiannual Report

4. Operating Policies - continued

Swap Agreements - continued

may be triggered by events such as bankruptcy, failure to pay, obligation acceleration, repudiation/moratorium or restructuring. If a credit event were to occur during the term of the contract, upon notification from the buyer, the seller is obligated to take delivery from the buyer the notional amount of a reference obligation, at par. The difference between the value of the obligation received and the notional amount paid is recorded as a realized loss to the seller. For credit default swaps on asset-backed securities, the reference obligation described represents the security that will be put to the seller. For credit default swaps on corporate or sovereign issuers, under the terms of the agreement, the obligation that is put to the seller is not limited to the specific reference obligation described in the Fund's Schedule of Investments.

The notional amount of credit default swaps is included in the Fund's Schedule of Investments and approximates the maximum potential amount of future payments that the Fund could be required to make if the Fund is the seller of protection and a credit event were to occur. The total notional amount of all credit default swaps open at period end where the Fund is the seller of protection amounted to $35,358,015 representing 4.5% of net assets.

The value of each credit default swap and credit rating disclosed for each reference obligation in the Fund's Schedule of Investments, where the Fund is the seller of protection, are both measures of the current payment/performance risk of the swap. As the value of the swap changes as a positive or negative percentage of the total notional amount, the payment/performance risk may decrease or increase, respectively. Any current or future declines in the value of the swap may be partially offset by upfront payments received by the Fund as the seller of protection if applicable. In addition to these measures, FMR monitors a variety of factors including cash flow assumptions, market activity and market sentiment as part of its ongoing process of assessing payment/performance risk.

5. Purchases and Sales of Investments.

Purchases and sales of securities (including the Fixed-Income Central Funds), other than short-term securities and U.S. government securities, aggregated $212,776,810 and $295,187,861, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20%

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

6. Fees and Other Transactions with Affiliates - continued

Management Fee - continued

of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .32% of the Fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

	Distribution Fee	Service Fee	Paid to FDC	Retained by FDC
Class A	-%	.25%	$ 235,054	$ 11,775
Class T	-%	.25%	369,055	4,792
Class B	.65%	.25%	58,168	42,207
Class C	.75%	.25%	247,693	20,688
			$ 909,970	$ 79,462

Sales Load. FDC receives a front-end sales charge of up to 2.75% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 3% to 1% for Class B, 1% for Class C, ..75% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

	Retained by FDC
Class A	$ 8,150
Class T	3,751
Class B*	16,446
Class C*	2,568
	$ 30,915

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Semiannual Report

6. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class were as follows:

	Amount	% of Average Net Assets*
Class A	$ 230,962	.25
Class T	277,113	.19
Class B	16,671	.26
Class C	55,193	.23
Institutional Class	228,605	.16
	$ 808,544

* Annualized

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Other Affiliated Transactions. On January 23, 2009, Fidelity Ultra-Short Central Fund ("Ultra-Short"), a Fidelity Central Fund in which the Fund invests, was liquidated pursuant to a Plan of Liquidation and Dissolution approved by its Board of Trustees on January 15, 2009. Under the plan, Ultra-Short distributed in-kind all of its net assets to its shareholders pro-rata at its net asset value (NAV) per share of $62.53 determined as of the close of business on the liquidation date. As a result, the Fund received cash and securities, including accrued interest, of $34,413,111 in return for its 550,378 shares of Ultra-Short. This is considered taxable to the Fund for federal income tax purposes.

On February 20, 2009, the Fund redeemed in-kind 1,969,867 shares of Fidelity Corporate Bond 1-10 Year Central Fund, a Fidelity Central Fund in which the Fund invests, valued at $177,302,227 by receiving cash and securities of equal value, including accrued interest. This is considered taxable to the Fund for federal income tax purposes.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2,634 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. Security Lending.

The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in cash equivalents. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of interest income. Net income from lending portfolio securities during the period amounted to $15,671.

9. Expense Reductions.

Through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $3,909. During the period, credits reduced each class' transfer agent expense as noted in the table below.

	Transfer Agent expense reduction
Class A	$ 213

Semiannual Report

10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

	Six months ended February 28, 2009	Year ended August 31, 2008
From net investment income
Class A	$ 4,243,609	$ 11,114,337
Class T	6,734,581	19,685,484
Class B	248,969	698,735
Class C	935,568	2,134,294
Institutional Class	7,160,558	23,069,653
Total	$ 19,323,285	$ 56,702,503

11. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class A
Shares sold	3,280,847	7,478,814	$ 31,664,251	$ 79,389,123
Reinvestment of distributions	385,525	913,344	3,670,163	9,656,597
Shares redeemed	(5,801,511)	(11,412,910)	(55,761,991)	(120,176,822)
Net increase (decrease)	(2,135,139)	(3,020,752)	$ (20,427,577)	$ (31,131,102)
Class T
Shares sold	4,482,202	10,443,380	$ 43,382,649	$ 110,997,567
Reinvestment of distributions	674,655	1,758,963	6,428,526	18,626,931
Shares redeemed	(9,293,195)	(26,180,797)	(89,999,382)	(277,194,128)
Net increase (decrease)	(4,136,338)	(13,978,454)	$ (40,188,207)	$ (147,569,630)
Class B
Shares sold	355,157	542,893	$ 3,421,658	$ 5,772,343
Reinvestment of distributions	23,233	58,357	220,987	616,990
Shares redeemed	(555,693)	(1,259,274)	(5,368,914)	(13,340,826)
Net increase (decrease)	(177,303)	(658,024)	$ (1,726,269)	$ (6,951,493)
Class C
Shares sold	1,452,272	1,247,916	$ 13,932,508	$ 13,263,460
Reinvestment of distributions	81,074	166,125	770,048	1,753,152
Shares redeemed	(1,113,482)	(1,839,485)	(10,695,243)	(19,383,480)
Net increase (decrease)	419,864	(425,444)	$ 4,007,313	$ (4,366,868)
Institutional Class
Shares sold	2,602,480	4,941,786	$ 25,200,052	$ 52,330,544
Reinvestment of distributions	717,438	2,074,699	6,849,721	22,020,750
Shares redeemed	(10,154,024)	(39,037,602)	(99,730,823)	(418,220,539)
Net increase (decrease)	(6,834,106)	(32,021,117)	$ (67,681,050)	$ (343,869,245)

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

12. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

The Fidelity Advisor Freedom Funds were the owners of record, in the aggregate, of approximately 25% of the total outstanding shares of the Fund. Subsequent to period end, the Fidelity Advisor Freedom Funds sold all their shares of the Fund.

Effective after the close of business on April 17, 2009, the Fidelity Commercial Mortgage-Backed Securities Central Fund ("CMBS"), a Fidelity Central Fund in which the Fund invests, was liquidated pursuant to a Plan of Liquidation and Dissolution approved by its Board of Directors in March 2009. Under the plan, the Fund received in-kind its pro-rata portion of CMBS' net assets.

In March 2009, the Board of Directors of the Fidelity 1-3 Year Duration Securitized Bond Central Fund ("1-3 Year"), a Fidelity Central Fund in which the Fund invests, approved a Plan of Liquidation and Dissolution. Under the plan, 1-3 Year will distribute in-kind all of its net assets to its shareholders pro-rata at the NAV per share of 1-3 Year determined as of the close of business on or about June 19, 2009.

13. Credit Risk.

The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers backed by residential mortgage loans, credit card receivables and automotive loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Research & Analysis Company

Fidelity Investments Money
Management, Inc.

FIL Investment Advisors

FIL Investment Advisors
(U.K.) Ltd.

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York Mellon

New York, NY

LTB-USAN-0409
1.784888.106

(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Intermediate Bond
Fund - Institutional Class

Semiannual Report

February 28, 2009

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message	<Click Here>	Ned Johnson's message to shareholders.
Shareholder Expense Example	<Click Here>	An example of shareholder expenses.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.

One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.

You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).

A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.

We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2008 to February 28, 2009).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio	Beginning Account Value September 1, 2008	Ending Account Value February 28, 2009	Expenses Paid During Period* September 1, 2008 to February 28, 2009
Class A	.88%
Actual		$ 1,000.00	$ 938.70	$ 4.23
HypotheticalA		$ 1,000.00	$ 1,020.43	$ 4.41
Class T	.82%
Actual		$ 1,000.00	$ 939.00	$ 3.94
HypotheticalA		$ 1,000.00	$ 1,020.73	$ 4.11
Class B	1.55%
Actual		$ 1,000.00	$ 935.50	$ 7.44
HypotheticalA		$ 1,000.00	$ 1,017.11	$ 7.75
Class C	1.62%
Actual		$ 1,000.00	$ 935.10	$ 7.77
HypotheticalA		$ 1,000.00	$ 1,016.76	$ 8.10
Institutional Class	.54%
Actual		$ 1,000.00	$ 939.50	$ 2.60
HypotheticalA		$ 1,000.00	$ 1,022.12	$ 2.71

^A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.

Semiannual Report

Investment Changes (Unaudited)

The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments in each non-money market Fidelity Central Fund.

Quality Diversification (% of fund's net assets)
As of February 28, 2009		As of August 31, 2008
	U.S. Government and U.S. Government Agency Obligations 36.1%		U.S. Government and U.S. Government Agency Obligations 39.3%
	AAA 11.7%		AAA 14.1%
	AA 6.5%		AA 8.2%
	A 14.8%		A 10.8%
	BBB 23.3%		BBB 20.1%
	BB and Below 5.1%		BB and Below 4.5%
	Not Rated 0.4%		Not Rated 0.3%
	Short-Term Investments and Net Other Assets 2.1%		Short-Term Investments and Net Other Assets 2.7%

We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades. Securities rated BB or below were rated investment grade at the time of acquisition.

Weighted Average Maturity as of February 28, 2009
		6 months ago
Years	4.7	4.5

The weighted average maturity is based on the dollar-weighted average length of time until principal payments are expected or until securities reach maturity, taking into account any maturity shortening feature such as a call, refunding or redemption provision.

Duration as of February 28, 2009
		6 months ago
Years	3.5	4.0

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)
As of February 28, 2009 *		As of August 31, 2008 **
	Corporate Bonds 45.8%		Corporate Bonds 39.2%
	U.S. Government and U.S. Government Agency Obligations 36.1%		U.S. Government and U.S. Government Agency Obligations 39.3%
	Asset-Backed Securities 4.3%		Asset-Backed Securities 5.3%
	CMOs and Other Mortgage Related Securities 11.4%		CMOs and Other Mortgage Related Securities 13.1%
	Other Investments 0.3%		Other Investments 0.4%
	Short-Term Investments and Net Other Assets 2.1%		Short-Term Investments and Net Other Assets 2.7%

* Foreign investments	9.1%	** Foreign investments	10.1%
* Futures and Swaps	17.7%	** Futures and Swaps	18.7%

A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com.

Semiannual Report

Investments February 28, 2009 (Unaudited)

Showing Percentage of Net Assets

Nonconvertible Bonds - 33.1%
	Principal Amount		Value
CONSUMER DISCRETIONARY - 2.6%
Auto Components - 0.2%
DaimlerChrysler NA Holding Corp.:
5.75% 9/8/11	$ 1,126,000		$ 1,060,123
5.875% 3/15/11	418,000		397,883
			1,458,006
Hotels, Restaurants & Leisure - 0.1%
McDonald's Corp. 5.35% 3/1/18	471,000		485,572
Household Durables - 0.1%
Fortune Brands, Inc. 5.125% 1/15/11	853,000		840,700
Media - 1.6%
AOL Time Warner, Inc.:
6.75% 4/15/11	379,000		384,622
6.875% 5/1/12	491,000		494,928
Comcast Cable Communications, Inc. 6.75% 1/30/11	103,000		106,728
Comcast Corp.:
4.95% 6/15/16	378,000		337,863
5.5% 3/15/11	77,000		78,122
5.7% 5/15/18	597,000		551,686
5.85% 1/15/10	12,000		12,148
COX Communications, Inc.:
4.625% 1/15/10	431,000		427,317
4.625% 6/1/13	899,000		812,825
News America, Inc.:
4.75% 3/15/10	49,000		47,809
5.3% 12/15/14	176,000		165,753
6.9% 3/1/19 (b)	3,089,000		2,924,659
Time Warner Cable, Inc.:
5.4% 7/2/12	492,000		473,350
5.85% 5/1/17	1,328,000		1,200,953
6.2% 7/1/13	468,000		453,231
6.75% 7/1/18	1,486,000		1,408,838
8.75% 2/14/19	673,000		718,390
Time Warner, Inc. 5.875% 11/15/16	1,232,000		1,154,409
Viacom, Inc. 6.125% 10/5/17	905,000		744,828
			12,498,459
Multiline Retail - 0.0%
Macy's Retail Holdings, Inc. 7.875% 7/15/15	472,000		338,589
Nonconvertible Bonds - continued
	Principal Amount		Value
CONSUMER DISCRETIONARY - continued
Specialty Retail - 0.6%
Home Depot, Inc. 2.0463% 12/16/09 (g)	$ 861,000		$ 836,066
Staples, Inc. 9.75% 1/15/14	3,990,000		4,186,172
			5,022,238
TOTAL CONSUMER DISCRETIONARY			20,643,564
CONSUMER STAPLES - 2.2%
Beverages - 0.5%
Anheuser-Busch Companies, Inc. 6.45% 9/1/37	15,000		12,802
Diageo Capital PLC:
5.2% 1/30/13	209,000		212,724
5.75% 10/23/17	2,056,000		2,048,091
FBG Finance Ltd. 5.125% 6/15/15 (b)	591,000		501,975
PepsiCo, Inc. 7.9% 11/1/18	840,000		1,009,443
			3,785,035
Food & Staples Retailing - 0.4%
CVS Caremark Corp.:
2.5025% 6/1/10 (g)	462,000		447,864
6.036% 12/10/28 (b)	462,422		352,953
6.302% 6/1/37 (g)	3,463,000		2,129,745
			2,930,562
Food Products - 0.4%
Cargill, Inc. 6% 11/27/17 (b)	142,000		132,470
General Mills, Inc.:
5.2% 3/17/15	867,000		870,731
5.65% 2/15/19	319,000		318,733
Kraft Foods, Inc.:
5.625% 11/1/11	737,000		770,218
6.125% 2/1/18	1,012,000		1,005,429
6.75% 2/19/14	109,000		116,347
			3,213,928
Personal Products - 0.0%
Avon Products, Inc. 4.8% 3/1/13	360,000		351,202
Tobacco - 0.9%
Altria Group, Inc. 9.7% 11/10/18	3,399,000		3,558,746
Philip Morris International, Inc.:
4.875% 5/16/13	1,211,000		1,223,969
5.65% 5/16/18	807,000		783,291
Nonconvertible Bonds - continued
	Principal Amount		Value
CONSUMER STAPLES - continued
Tobacco - continued
Reynolds American, Inc.:
6.75% 6/15/17	$ 589,000		$ 497,445
7.25% 6/15/37	1,575,000		1,146,465
			7,209,916
TOTAL CONSUMER STAPLES			17,490,643
ENERGY - 3.6%
Energy Equipment & Services - 0.5%
DCP Midstream LLC 9.75% 3/15/19 (b)	687,000		666,026
Noble Drilling Corp. 5.875% 6/1/13	218,000		211,537
Transocean Ltd. 5.25% 3/15/13	698,000		691,357
Weatherford International Ltd.:
4.95% 10/15/13	351,000		299,069
5.15% 3/15/13	1,803,000		1,594,754
			3,462,743
Oil, Gas & Consumable Fuels - 3.1%
Anadarko Petroleum Corp. 6.45% 9/15/36	540,000		412,365
BW Group Ltd. 6.625% 6/28/17 (b)	595,000		312,375
Canadian Natural Resources Ltd.:
5.15% 2/1/13	906,000		866,243
5.7% 5/15/17	233,000		205,766
Canadian Oil Sands Ltd. 4.8% 8/10/09 (b)	830,000		825,243
ConocoPhillips:
4.75% 2/1/14	212,000		214,397
5.75% 2/1/19	1,600,000		1,565,690
Devon Energy Corp. 5.625% 1/15/14	472,000		475,644
Duke Capital LLC 6.25% 2/15/13	201,000		199,251
Duke Energy Field Services:
5.375% 10/15/15 (b)	246,000		201,783
6.875% 2/1/11	466,000		465,033
7.875% 8/16/10	209,000		211,502
El Paso Natural Gas Co. 5.95% 4/15/17	188,000		160,846
Empresa Nacional de Petroleo 6.75% 11/15/12 (b)	341,000		342,211
Enbridge Energy Partners LP:
5.875% 12/15/16	364,000		312,155
6.5% 4/15/18	477,000		416,089
9.875% 3/1/19	590,000		612,419
EnCana Holdings Finance Corp. 5.8% 5/1/14	581,000		563,949
Nonconvertible Bonds - continued
	Principal Amount		Value
ENERGY - continued
Oil, Gas & Consumable Fuels - continued
Enterprise Products Operating LP:
4.625% 10/15/09	$ 392,000		$ 390,080
5.6% 10/15/14	394,000		365,852
5.65% 4/1/13	140,000		133,914
Gazstream SA 5.625% 7/22/13 (b)	1,604,145		1,435,710
Gulf South Pipeline Co. LP 5.75% 8/15/12 (b)	778,000		706,650
Lukoil International Finance BV 6.656% 6/7/22 (b)	246,000		167,280
Nakilat, Inc. 6.067% 12/31/33 (b)	302,000		197,164
Nexen, Inc.:
5.05% 11/20/13	774,000		703,061
5.2% 3/10/15	183,000		156,993
6.4% 5/15/37	1,015,000		716,304
NGPL PipeCo LLC 6.514% 12/15/12 (b)	1,517,000		1,466,584
Pemex Project Funding Master Trust 3.2963% 6/15/10 (b)(g)	251,000		242,215
Petro-Canada:
6.05% 5/15/18	435,000		358,576
6.8% 5/15/38	285,000		209,876
Petroleos Mexicanos 8% 5/3/19 (b)	199,000		195,518
Plains All American Pipeline LP 7.75% 10/15/12	475,000		478,310
Ras Laffan Liquid Natural Gas Co. Ltd. 8.294% 3/15/14 (b)	601,000		619,100
Ras Laffan Liquid Natural Gas Co. Ltd. III 5.832% 9/30/16 (b)	270,000		236,048
Rockies Express Pipeline LLC 6.25% 7/15/13 (b)	548,000		533,313
Source Gas LLC 5.9% 4/1/17 (b)	713,000		534,487
Suncor Energy, Inc. 6.1% 6/1/18	1,222,000		1,007,060
TEPPCO Partners LP:
5.9% 4/15/13	652,000		588,821
6.65% 4/15/18	588,000		495,743
Texas Eastern Transmission LP 6% 9/15/17 (b)	1,462,000		1,365,675
TransCanada PipeLines Ltd. 6.35% 5/15/67 (g)	477,000		288,585
Transcontinental Gas Pipe Line Corp. 6.4% 4/15/16	525,000		503,484
Valero Energy Corp. 6.625% 6/15/37	745,000		568,823
XTO Energy, Inc.:
5% 1/31/15	352,000		326,767
Nonconvertible Bonds - continued
	Principal Amount		Value
ENERGY - continued
Oil, Gas & Consumable Fuels - continued
XTO Energy, Inc.: - continued
5.65% 4/1/16	$ 242,000		$ 227,133
5.9% 8/1/12	896,000		888,064
			24,470,151
TOTAL ENERGY			27,932,894
FINANCIALS - 15.0%
Capital Markets - 3.2%
Bear Stearns Companies, Inc.:
1.2625% 10/22/10 (g)	471,000		453,166
1.346% 8/21/09 (g)	236,000		232,322
1.3525% 7/16/09 (g)	116,000		114,626
2.4556% 9/9/09 (g)	256,000		251,859
3.25% 3/25/09	138,000		138,005
4.245% 1/7/10	245,000		240,140
4.5% 10/28/10	369,000		366,172
5.3% 10/30/15	236,000		217,660
5.85% 7/19/10	759,000		765,503
6.95% 8/10/12	272,000		281,538
BlackRock, Inc. 6.25% 9/15/17	2,338,000		2,223,291
Goldman Sachs Group, Inc.:
5.25% 10/15/13	1,188,000		1,099,008
5.45% 11/1/12	759,000		731,626
5.95% 1/18/18	803,000		717,780
6.15% 4/1/18	397,000		360,734
6.6% 1/15/12	344,000		345,012
6.75% 10/1/37	1,280,000		910,122
6.875% 1/15/11	55,000		55,752
7.5% 2/15/19	2,354,000		2,331,505
Janus Capital Group, Inc.:
6.125% 9/15/11	483,000		338,026
6.5% 6/15/12	840,000		567,158
Lazard Group LLC:
6.85% 6/15/17	773,000		577,694
7.125% 5/15/15	277,000		210,270
Merrill Lynch & Co., Inc.:
5.45% 2/5/13	2,104,000		1,878,333
6.15% 4/25/13	583,000		512,749
6.875% 4/25/18	534,000		444,317
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Capital Markets - continued
Morgan Stanley:
1.6475% 1/9/12 (g)	$ 1,126,000		$ 925,347
1.6975% 1/9/14 (g)	1,007,000		674,887
4.75% 4/1/14	160,000		134,161
5.05% 1/21/11	613,000		604,548
5.45% 1/9/17	200,000		172,580
5.95% 12/28/17	511,000		450,972
6.6% 4/1/12	1,151,000		1,142,887
6.625% 4/1/18	1,475,000		1,362,016
6.75% 4/15/11	168,000		168,688
Northern Trust Corp. 5.5% 8/15/13	272,000		281,379
The Bank of New York, Inc. 4.95% 11/1/12	778,000		782,530
UBS AG Stamford Branch:
5.75% 4/25/18	2,246,000		1,963,808
5.875% 12/20/17	601,000		532,454
			25,560,625
Commercial Banks - 3.2%
American Express Bank FSB 5.5% 4/16/13	2,685,000		2,541,049
ANZ National International Ltd. 6.2% 7/19/13 (b)	221,000		213,721
Bank One Corp.:
5.25% 1/30/13	187,000		181,658
7.875% 8/1/10	139,000		143,427
BB&T Corp. 6.5% 8/1/11	250,000		254,879
Chase Manhattan Corp. 7.875% 6/15/10	313,000		320,346
Credit Suisse First Boston 6% 2/15/18	2,057,000		1,866,156
Credit Suisse First Boston New York Branch 5% 5/15/13	1,368,000		1,320,721
DBS Bank Ltd. (Singapore) 1.4544% 5/16/17 (b)(g)	1,050,580		829,958
Export-Import Bank of Korea:
5.125% 2/14/11	588,000		568,376
5.25% 2/10/14 (b)	114,000		102,336
5.5% 10/17/12	454,000		429,775
Fifth Third Bancorp:
4.5% 6/1/18	25,000		15,680
8.25% 3/1/38	423,000		306,532
HBOS PLC 6.75% 5/21/18 (b)	679,000		545,088
HSBC Holdings PLC 1.6125% 10/6/16 (g)	130,000		104,248
JPMorgan Chase Bank 6% 10/1/17	422,000		399,260
KeyBank NA 7% 2/1/11	226,000		223,372
Korea Development Bank:
3.875% 3/2/09	720,000		720,000
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Commercial Banks - continued
Korea Development Bank: - continued
4.625% 9/16/10	$ 369,000		$ 359,110
4.75% 7/20/09	189,000		188,111
Manufacturers & Traders Trust Co. 2.935% 4/1/13 (b)(g)	82,159		68,733
National City Bank, Cleveland:
4.15% 8/1/09	1,907,000		1,893,418
4.5% 3/15/10	592,000		588,230
PNC Funding Corp.:
1.3144% 1/31/12 (g)	1,204,000		957,662
7.5% 11/1/09	408,000		406,560
Rabobank Capital Funding Trust II 5.26% (b)(g)	115,000		49,450
Santander Issuances SA Unipersonal:
1.885% 6/20/16 (b)(g)	397,758		299,487
5.805% 6/20/16 (b)(g)	846,000		592,200
Sovereign Bank 2.88% 8/1/13 (g)	186,453		139,051
Standard Chartered Bank 6.4% 9/26/17 (b)	3,661,000		2,928,185
UniCredit Luxembourg Finance SA 5.584% 1/13/17 (b)(g)	590,000		265,500
Union Planters Corp. 7.75% 3/1/11	121,000		117,571
UnionBanCal Corp. 5.25% 12/16/13	133,000		124,029
Wachovia Bank NA 4.875% 2/1/15	283,000		252,527
Wachovia Corp.:
1.2244% 10/15/11 (g)	808,000		716,897
1.255% 4/23/12 (g)	109,000		94,004
2.2525% 12/1/09 (g)	219,000		216,359
5.625% 10/15/16	684,000		608,322
5.75% 6/15/17	590,000		553,509
Wells Fargo & Co.:
4.2% 1/15/10	530,000		529,333
5.625% 12/11/17	2,063,000		1,958,156
			24,992,986
Consumer Finance - 2.0%
American Express Credit Corp. 5.875% 5/2/13	117,000		107,454
American General Finance Corp. 6.9% 12/15/17	960,000		381,707
Capital One Financial Corp. 2.4694% 9/10/09 (g)	660,000		635,479
Discover Financial Services:
2.6288% 6/11/10 (g)	810,000		717,763
6.45% 6/12/17	460,000		348,004
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Consumer Finance - continued
General Electric Capital Corp.:
4.8% 5/1/13	$ 5,300,000		$ 4,992,107
5.625% 9/15/17	1,414,000		1,232,375
6.375% 11/15/67 (g)	1,700,000		985,584
Household Finance Corp.:
6.375% 10/15/11	374,000		364,201
7% 5/15/12	94,000		93,473
HSBC Finance Corp.:
5.25% 1/14/11	263,000		258,123
5.25% 1/15/14	212,000		198,179
MBNA Corp. 7.5% 3/15/12	324,000		299,016
Nissan Motor Acceptance Corp. 4.625% 3/8/10 (b)	855,000		803,321
ORIX Corp. 5.48% 11/22/11	77,000		53,320
SLM Corp.:
1.2994% 7/27/09 (g)	531,000		494,347
1.3194% 7/26/10 (g)	2,393,000		1,971,777
1.3894% 10/25/11 (g)	472,000		330,708
2.1963% 3/15/11 (g)	23,000		17,467
4.5% 7/26/10	1,636,000		1,293,373
Systems 2001 Asset Trust LLC 7.156% 12/15/11 (b)	82,954		70,598
			15,648,376
Diversified Financial Services - 2.2%
Bank of America Corp. 7.4% 1/15/11	1,744,000		1,619,095
BTM Curacao Holding NV 1.8975% 12/19/16 (b)(g)	215,437		166,480
CIT Group, Inc.:
1.3866% 6/8/09 (g)	236,000		225,628
4.75% 12/15/10	165,000		125,285
5.4% 2/13/12	494,000		372,898
Citigroup, Inc.:
1.3356% 5/18/11 (g)	566,000		473,546
5.3% 10/17/12	2,125,000		1,884,956
5.5% 4/11/13	2,400,000		2,173,222
6.125% 5/15/18	333,000		287,166
6.5% 1/18/11	263,000		248,065
6.5% 8/19/13	1,239,000		1,155,116
CME Group, Inc. 5.75% 2/15/14	102,000		102,659
GlaxoSmithKline Capital, Inc. 5.65% 5/15/18	1,260,000		1,297,212
ILFC E-Capital Trust I 5.9% 12/21/65 (b)(g)	603,000		120,600
International Lease Finance Corp.:
5.4% 2/15/12	577,000		372,227
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Diversified Financial Services - continued
International Lease Finance Corp.: - continued
5.65% 6/1/14	$ 2,025,000		$ 1,184,315
6.375% 3/25/13	303,000		175,740
6.625% 11/15/13	548,000		312,360
JPMorgan Chase & Co.:
4.891% 9/1/15 (g)	549,000		440,921
5.6% 6/1/11	623,000		635,127
5.75% 1/2/13	446,000		440,520
6.75% 2/1/11	76,000		77,665
Prime Property Funding, Inc.:
5.125% 6/1/15 (b)	219,000		144,540
5.5% 1/15/14 (b)	140,000		95,810
5.7% 4/15/17 (b)	341,000		218,311
TECO Finance, Inc. 7% 5/1/12	1,500,000		1,419,386
TransCapitalInvest Ltd. 5.67% 3/5/14 (b)	652,000		479,220
ZFS Finance USA Trust II 6.45% 12/15/65 (b)(g)	1,008,000		410,280
ZFS Finance USA Trust IV 5.875% 5/9/32 (b)(g)	503,000		193,816
ZFS Finance USA Trust V 6.5% 5/9/67 (b)(g)	805,000		317,975
			17,170,141
Insurance - 1.4%
Assurant, Inc.:
5.625% 2/15/14	385,000		317,870
6.75% 2/15/34	396,000		247,243
Axis Capital Holdings Ltd. 5.75% 12/1/14	112,000		86,486
Great-West Life & Annuity Insurance Co. 7.153% 5/16/46 (b)(g)	300,000		186,000
Jackson National Life Global Funding 5.375% 5/8/13 (b)	152,000		138,883
Liberty Mutual Group, Inc. 6.5% 3/15/35 (b)	120,000		72,919
MetLife, Inc.:
5% 6/15/15	234,000		217,203
6.125% 12/1/11	199,000		199,340
7.717% 2/15/19	1,116,000		1,076,811
Metropolitan Life Global Funding I:
4.625% 8/19/10 (b)	664,000		646,646
5.125% 4/10/13 (b)	113,000		107,950
Monumental Global Funding II 5.65% 7/14/11 (b)	333,000		335,954
Monumental Global Funding III 5.5% 4/22/13 (b)	443,000		390,456
Pacific Life Global Funding 5.15% 4/15/13 (b)	1,522,000		1,484,579
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Insurance - continued
Pennsylvania Mutual Life Insurance Co. 6.65% 6/15/34 (b)	$ 3,000,000		$ 2,498,835
Prudential Financial, Inc.:
5.15% 1/15/13	436,000		390,070
5.4% 6/13/35	91,000		53,826
5.5% 3/15/16	86,000		71,865
5.7% 12/14/36	77,000		47,031
8.875% 6/15/68 (g)	598,000		340,860
QBE Insurance Group Ltd. 5.647% 7/1/23 (b)(g)	673,000		316,310
Symetra Financial Corp. 6.125% 4/1/16 (b)	1,043,000		822,082
The Chubb Corp. 5.75% 5/15/18	415,000		399,103
The St. Paul Travelers Companies, Inc. 8.125% 4/15/10	252,000		256,052
			10,704,374
Real Estate Investment Trusts - 2.1%
AMB Property LP 5.9% 8/15/13	519,000		359,713
Arden Realty LP 5.2% 9/1/11	270,000		271,965
AvalonBay Communities, Inc.:
4.95% 3/15/13	74,000		65,506
5.5% 1/15/12	482,000		449,104
6.625% 9/15/11	165,000		159,193
Brandywine Operating Partnership LP:
4.5% 11/1/09	621,000		598,470
5.625% 12/15/10	821,000		725,218
5.7% 5/1/17	481,000		240,034
5.75% 4/1/12	436,000		239,800
BRE Properties, Inc.:
4.875% 5/15/10	520,000		489,366
5.75% 9/1/09	123,000		122,440
Camden Property Trust:
4.375% 1/15/10	298,000		268,200
5.375% 12/15/13	132,000		108,240
5.875% 11/30/12	596,000		512,560
Colonial Properties Trust 4.75% 2/1/10	1,138,000		1,088,124
CPG Partners LP 6% 1/15/13	205,000		182,219
Developers Diversified Realty Corp.:
4.625% 8/1/10	607,000		428,401
5% 5/3/10	451,000		315,700
5.25% 4/15/11	490,000		241,162
5.375% 10/15/12	259,000		124,031
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Real Estate Investment Trusts - continued
Duke Realty LP:
4.625% 5/15/13	$ 126,000		$ 84,725
5.25% 1/15/10	91,000		86,763
5.4% 8/15/14	641,000		437,236
5.625% 8/15/11	595,000		506,944
5.875% 8/15/12	113,000		86,578
5.95% 2/15/17	110,000		67,993
6.25% 5/15/13	1,550,000		1,162,500
6.5% 1/15/18	855,000		529,085
Equity One, Inc.:
6% 9/15/17	172,000		113,437
6.25% 1/15/17	99,000		67,320
Federal Realty Investment Trust:
5.4% 12/1/13	83,000		63,161
6% 7/15/12	590,000		485,407
6.2% 1/15/17	125,000		95,000
Hospitality Properties Trust 5.625% 3/15/17	242,000		134,725
HRPT Properties Trust:
5.75% 11/1/15	179,000		118,140
6.25% 6/15/17	248,000		153,245
6.65% 1/15/18	124,000		78,912
Liberty Property LP:
5.125% 3/2/15	171,000		124,184
5.5% 12/15/16	299,000		206,190
6.625% 10/1/17	735,000		530,974
Mack-Cali Realty LP:
5.05% 4/15/10	163,000		153,220
7.25% 3/15/09	587,000		585,958
7.75% 2/15/11	196,000		184,240
Simon Property Group LP:
4.6% 6/15/10	221,000		211,709
4.875% 8/15/10	136,000		130,242
5% 3/1/12	73,000		62,780
5.375% 6/1/11	125,000		116,451
5.6% 9/1/11	547,000		508,531
5.75% 5/1/12	255,000		221,850
7.75% 1/20/11	165,000		157,751
Tanger Properties LP 6.15% 11/15/15	5,000		3,690
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Real Estate Investment Trusts - continued
UDR, Inc. 5.5% 4/1/14	$ 1,470,000		$ 1,165,281
Washington (REIT) 5.95% 6/15/11	732,000		637,718
			16,261,386
Real Estate Management & Development - 0.3%
ERP Operating LP:
5.375% 8/1/16	270,000		218,503
5.5% 10/1/12	484,000		440,956
5.75% 6/15/17	790,000		642,086
Post Apartment Homes LP:
5.45% 6/1/12	273,000		229,320
6.3% 6/1/13	483,000		396,060
Regency Centers LP:
4.95% 4/15/14	123,000		89,884
5.25% 8/1/15	429,000		297,632
5.875% 6/15/17	213,000		147,815
			2,462,256
Thrifts & Mortgage Finance - 0.6%
Bank of America Corp.:
4.9% 5/1/13	892,000		785,779
5.65% 5/1/18	1,500,000		1,270,199
Countrywide Financial Corp.:
1.6863% 3/24/09 (g)	465,000		463,907
4.5% 6/15/10	96,000		93,212
5.8% 6/7/12	587,000		537,940
Countrywide Home Loans, Inc.:
4.125% 9/15/09	775,000		767,881
6.25% 4/15/09	122,000		122,174
Independence Community Bank Corp.:
3.585% 6/20/13 (g)	311,525		224,298
3.75% 4/1/14 (g)	849,000		568,830
4.9% 9/23/10	341,000		318,876
			5,153,096
TOTAL FINANCIALS			117,953,240
HEALTH CARE - 0.7%
Biotechnology - 0.1%
Amgen, Inc. 5.85% 6/1/17	595,000		607,408
Nonconvertible Bonds - continued
	Principal Amount		Value
HEALTH CARE - continued
Health Care Providers & Services - 0.1%
Coventry Health Care, Inc.:
5.95% 3/15/17	$ 352,000		$ 230,121
6.3% 8/15/14	728,000		530,032
			760,153
Pharmaceuticals - 0.5%
AstraZeneca PLC:
5.9% 9/15/17	930,000		980,072
6.45% 9/15/37	695,000		734,010
Bristol-Myers Squibb Co. 5.45% 5/1/18	590,000		601,887
Novartis Capital Corp. 4.125% 2/10/14	590,000		595,470
Roche Holdings, Inc. 5% 3/1/14 (b)	1,196,000		1,209,579
Teva Pharmaceutical Finance LLC 5.55% 2/1/16	193,000		189,812
			4,310,830
TOTAL HEALTH CARE			5,678,391
INDUSTRIALS - 2.0%
Aerospace & Defense - 0.2%
BAE Systems Holdings, Inc.:
4.75% 8/15/10 (b)	531,000		529,748
6.4% 12/15/11 (b)	165,000		170,808
Bombardier, Inc. 6.3% 5/1/14 (b)	1,575,000		1,055,250
			1,755,806
Airlines - 1.1%
American Airlines, Inc. pass-thru trust certificates:
6.855% 10/15/10	14,993		14,768
6.978% 10/1/12	83,118		76,884
7.024% 4/15/11	570,000		552,900
7.324% 4/15/11	500,000		475,000
7.858% 4/1/13	1,094,000		946,310
Continental Airlines, Inc.:
6.648% 9/15/17	649,993		513,494
6.82% 5/1/18	44,468		33,796
6.9% 7/2/19	174,768		140,688
7.056% 3/15/11	354,000		343,380
Delta Air Lines, Inc. pass-thru trust certificates:
6.821% 8/10/22	76,235		55,270
7.57% 11/18/10	3,200,000		2,928,000
Nonconvertible Bonds - continued
	Principal Amount		Value
INDUSTRIALS - continued
Airlines - continued
U.S. Airways pass-thru trust certificates:
6.85% 7/30/19	$ 456,597		$ 328,750
8.36% 7/20/20	310,934		239,419
United Air Lines, Inc. pass-thru trust certificates:
Class 1A, 6.636% 1/2/24	113,586		81,214
6.071% 9/1/14	73,003		70,813
6.201% 3/1/10	46,507		43,949
6.602% 9/1/13	131,781		124,533
7.032% 4/1/12	403,228		386,091
7.186% 10/1/12	1,003,634		960,980
			8,316,239
Building Products - 0.1%
Masco Corp. 2.3988% 3/12/10 (g)	523,444		469,605
Industrial Conglomerates - 0.6%
Covidien International Finance SA:
5.15% 10/15/10	509,000		521,178
5.45% 10/15/12	124,000		126,902
6% 10/15/17	590,000		594,172
General Electric Co. 5.25% 12/6/17	3,525,000		3,244,325
			4,486,577
Machinery - 0.0%
Atlas Copco AB 5.6% 5/22/17 (b)	123,000		116,978
Road & Rail - 0.0%
CSX Corp. 6.25% 4/1/15	310,000		288,498
TOTAL INDUSTRIALS			15,433,703
INFORMATION TECHNOLOGY - 0.4%
Communications Equipment - 0.1%
Cisco Systems, Inc.:
4.95% 2/15/19	707,000		683,272
5.9% 2/15/39	113,000		105,223
			788,495
Electronic Equipment & Components - 0.2%
Tyco Electronics Group SA:
5.95% 1/15/14	594,000		513,989
6% 10/1/12	780,000		687,490
6.55% 10/1/17	475,000		358,140
			1,559,619
Nonconvertible Bonds - continued
	Principal Amount		Value
INFORMATION TECHNOLOGY - continued
Office Electronics - 0.0%
Xerox Corp. 5.5% 5/15/12	$ 322,000		$ 298,478
Semiconductors & Semiconductor Equipment - 0.1%
National Semiconductor Corp.:
2.2463% 6/15/10 (g)	353,429		307,024
6.15% 6/15/12	299,000		234,480
			541,504
TOTAL INFORMATION TECHNOLOGY			3,188,096
MATERIALS - 0.6%
Chemicals - 0.0%
E.I. du Pont de Nemours & Co. 5% 1/15/13	95,000		97,038
Lubrizol Corp. 8.875% 2/1/19	187,000		191,728
			288,766
Construction Materials - 0.0%
CRH America, Inc. 6% 9/30/16	369,000		263,424
Containers & Packaging - 0.1%
Pactiv Corp.:
5.875% 7/15/12	345,000		320,721
6.4% 1/15/18	352,000		287,004
Sealed Air Corp. 6.95% 5/15/09 (b)	131,000		131,548
			739,273
Metals & Mining - 0.4%
BHP Billiton Financial USA Ltd. 5.125% 3/29/12	398,000		407,012
Corporacion Nacional del Cobre (Codelco) 6.375% 11/30/12 (b)	403,000		414,920
Rio Tinto Finance Ltd.:
5.875% 7/15/13	657,000		597,209
6.5% 7/15/18	1,252,000		1,106,141
United States Steel Corp. 5.65% 6/1/13	299,000		244,627
Vale Overseas Ltd. 6.25% 1/23/17	467,000		449,470
			3,219,379
Nonconvertible Bonds - continued
	Principal Amount		Value
MATERIALS - continued
Paper & Forest Products - 0.1%
International Paper Co.:
5.85% 10/30/12	$ 30,000		$ 26,715
7.4% 6/15/14	521,000		419,094
			445,809
TOTAL MATERIALS			4,956,651
TELECOMMUNICATION SERVICES - 1.9%
Diversified Telecommunication Services - 1.5%
AT&T Broadband Corp. 8.375% 3/15/13	520,000		554,713
AT&T, Inc.:
5.8% 2/15/19	1,769,000		1,717,867
6.7% 11/15/13	236,000		249,697
British Telecommunications PLC 8.625% 12/15/10	547,000		569,999
Deutsche Telekom International Financial BV:
5.25% 7/22/13	493,000		494,577
6.75% 8/20/18	731,000		747,725
SBC Communications, Inc.:
5.1% 9/15/14	437,000		433,344
5.875% 2/1/12	550,000		568,316
5.875% 8/15/12	197,000		204,371
Telecom Italia Capital SA:
4% 1/15/10	984,000		966,902
4.95% 9/30/14	646,000		556,504
5.25% 10/1/15	527,000		444,553
6.999% 6/4/18	361,000		325,783
Telefonica Emisiones SAU:
1.555% 2/4/13 (g)	484,000		415,831
6.421% 6/20/16	234,000		237,751
Telefonos de Mexico SA de CV 4.75% 1/27/10	1,249,000		1,261,490
Verizon Communications, Inc. 6.1% 4/15/18	700,000		693,064
Verizon Global Funding Corp. 7.25% 12/1/10	552,000		582,914
Verizon New England, Inc. 6.5% 9/15/11	179,000		184,072
Verizon New York, Inc. 6.875% 4/1/12	534,000		545,620
			11,755,093
Wireless Telecommunication Services - 0.4%
America Movil SAB de CV:
4.125% 3/1/09	245,000		245,000
5.625% 11/15/17	364,000		338,413
Sprint Nextel Corp. 6% 12/1/16	230,000		149,500
Nonconvertible Bonds - continued
	Principal Amount		Value
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunication Services - continued
Verizon Wireless Capital LLC:
5.55% 2/1/14 (b)	$ 478,000		$ 475,222
8.5% 11/15/18 (b)	708,000		797,001
Vodafone Group PLC:
5% 12/16/13	462,000		463,212
5.5% 6/15/11	556,000		563,837
7.75% 2/15/10	372,000		386,636
			3,418,821
TOTAL TELECOMMUNICATION SERVICES			15,173,914
UTILITIES - 4.1%
Electric Utilities - 2.5%
AmerenUE 6.4% 6/15/17	601,000		586,148
Cleveland Electric Illuminating Co.:
5.65% 12/15/13	828,000		788,424
8.875% 11/15/18	238,000		262,934
Commonwealth Edison Co.:
5.4% 12/15/11	1,278,000		1,299,700
5.8% 3/15/18	1,300,000		1,234,879
Duke Energy Carolinas LLC:
5.25% 1/15/18	710,000		716,313
7% 11/15/18	126,000		143,885
EDP Finance BV:
5.375% 11/2/12 (b)	401,000		394,305
6% 2/2/18 (b)	2,033,000		1,887,907
Enel Finance International SA:
5.7% 1/15/13 (b)	168,000		166,350
6.25% 9/15/17 (b)	679,000		597,226
Exelon Corp.:
4.9% 6/15/15	644,000		552,765
6.75% 5/1/11	134,000		134,016
FirstEnergy Corp. 6.45% 11/15/11	397,000		396,583
FPL Group Capital, Inc. 7.875% 12/15/15	311,000		351,490
Illinois Power Co. 6.125% 11/15/17	83,000		78,096
Jersey Central Power & Light Co. 7.35% 2/1/19	355,000		356,375
Nevada Power Co.:
6.5% 5/15/18	3,950,000		3,729,590
6.5% 8/1/18	316,000		298,102
Oncor Electric Delivery Co. 6.375% 5/1/12	550,000		549,770
Nonconvertible Bonds - continued
	Principal Amount		Value
UTILITIES - continued
Electric Utilities - continued
Oncor Electric Delivery Co. LLC 5.95% 9/1/13 (b)	$ 728,000		$ 714,381
PacifiCorp 6% 1/15/39	242,000		239,162
Pennsylvania Electric Co. 6.05% 9/1/17	154,000		141,126
Pepco Holdings, Inc.:
4% 5/15/10	449,000		438,803
6.125% 6/1/17	121,000		107,192
6.45% 8/15/12	751,000		733,231
PPL Capital Funding, Inc. 6.7% 3/30/67 (g)	1,200,000		720,000
Progress Energy, Inc. 7.1% 3/1/11	681,000		699,505
Sierra Pacific Power Co. 5.45% 9/1/13	314,000		303,863
West Penn Power Co. 5.95% 12/15/17 (b)	63,000		55,706
Wisconsin Electric Power Co. 6.25% 12/1/15	606,000		643,753
			19,321,580
Gas Utilities - 0.1%
Southern Natural Gas Co. 5.9% 4/1/17 (b)	89,000		75,934
Texas Eastern Transmission Corp. 7.3% 12/1/10	624,000		645,400
			721,334
Independent Power Producers & Energy Traders - 0.7%
Constellation Energy Group, Inc. 7% 4/1/12	1,297,000		1,262,618
Duke Capital LLC 5.668% 8/15/14	414,000		382,117
Exelon Generation Co. LLC 5.35% 1/15/14	308,000		284,506
PPL Energy Supply LLC:
6.3% 7/15/13	2,000,000		1,985,860
6.5% 5/1/18	865,000		749,213
TXU Corp. 5.55% 11/15/14	1,645,000		822,500
			5,486,814
Multi-Utilities - 0.8%
CenterPoint Energy, Inc. 5.95% 2/1/17	360,000		293,600
CMS Energy Corp. 6.55% 7/17/17	1,740,000		1,535,392
Dominion Resources, Inc.:
4.75% 12/15/10	791,000		795,803
6.3% 9/30/66 (g)	803,000		473,770
7.5% 6/30/66 (g)	1,025,000		666,250
DTE Energy Co. 7.05% 6/1/11	198,000		199,850
KeySpan Corp. 7.625% 11/15/10	100,000		104,230
MidAmerican Energy Holdings, Co. 5.875% 10/1/12	588,000		605,867
National Grid PLC 6.3% 8/1/16	297,000		283,584
NiSource Finance Corp.:
5.25% 9/15/17	170,000		125,227
Nonconvertible Bonds - continued
	Principal Amount		Value
UTILITIES - continued
Multi-Utilities - continued
NiSource Finance Corp.: - continued
5.4% 7/15/14	$ 271,000		$ 212,786
5.45% 9/15/20	57,000		39,031
6.4% 3/15/18	311,000		244,155
7.875% 11/15/10	206,000		201,751
Wisconsin Energy Corp. 6.25% 5/15/67 (g)	1,242,000		757,620
WPS Resources Corp. 6.11% 12/1/66 (g)	178,000		94,340
			6,633,256
TOTAL UTILITIES			32,162,984
TOTAL NONCONVERTIBLE BONDS (Cost $275,500,569)		260,614,080
U.S. Government and Government Agency Obligations - 15.6%
U.S. Government Agency Obligations - 4.5%
Fannie Mae:
4.375% 7/17/13	4,850,000		5,205,408
5% 2/16/12 (d)	28,035,000		30,479,302
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			35,684,710
U.S. Treasury Inflation Protected Obligations - 9.1%
U.S. Treasury Inflation-Indexed Notes:
2% 1/15/14 (d)	32,096,676		31,958,152
2% 7/15/14	29,008,200		28,892,146
2.625% 7/15/17	10,147,200		10,367,792
TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS			71,218,090
U.S. Treasury Obligations - 2.0%
U.S. Treasury Notes:
1.875% 2/28/14	947,000		940,494
U.S. Government and Government Agency Obligations - continued
	Principal Amount		Value
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
3.75% 11/15/18	$ 3,800,000		$ 4,026,518
4% 8/15/18	10,000,000		10,789,840
TOTAL U.S. TREASURY OBLIGATIONS			15,756,852
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $121,899,285)		122,659,652
U.S. Government Agency - Mortgage Securities - 14.6%
Fannie Mae - 8.6%
3.782% 6/1/34 (g)	551,826		553,376
3.915% 7/1/35 (g)	437,563		439,432
4% 8/1/18	2,283,831		2,310,251
4.303% 3/1/33 (g)	54,501		55,400
4.318% 7/1/35 (g)	371,315		375,054
4.331% 2/1/35 (g)	414,374		417,075
4.34% 1/1/35 (g)	139,918		142,235
4.386% 2/1/35 (g)	215,736		219,520
4.389% 12/1/33 (g)	4,640,498		4,697,634
4.411% 4/1/33 (g)	223,289		223,458
4.423% 5/1/35 (g)	64,309		65,250
4.432% 3/1/35 (g)	197,236		200,425
4.435% 6/1/35 (g)	480,068		486,826
4.456% 7/1/35 (g)	334,741		333,124
4.481% 3/1/35 (g)	412,179		417,437
4.5% 4/1/20 to 3/1/35	1,854,957		1,877,215
4.54% 5/1/35 (g)	286,304		290,235
4.543% 11/1/34 (g)	345,582		348,630
4.547% 3/1/35 (g)	652,312		655,665
4.548% 10/1/33 (g)	90,008		90,880
4.55% 10/1/35 (g)	2,203,556		2,232,245
4.583% 8/1/34 (g)	306,351		310,764
4.6% 10/1/33 (g)	102,317		102,584
4.603% 7/1/35 (g)	49,222		49,636
4.616% 9/1/35 (g)	2,158,066		2,200,163
4.623% 2/1/33 (g)	100,170		100,766
4.646% 2/1/35 (g)	2,944,364		2,991,537
4.649% 10/1/35 (g)	260,522		262,877
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
4.651% 10/1/33 (g)	$ 40,344		$ 40,500
4.667% 7/1/35 (g)	550,833		561,366
4.686% 10/1/34 (g)	424,251		427,751
4.69% 12/1/34 (g)	264,496		267,540
4.742% 12/1/34 (g)	107,355		108,568
4.747% 4/1/35 (g)	45,539		46,274
4.765% 8/1/33 (g)	114,712		115,782
4.765% 2/1/34 (g)	34,115		34,758
4.784% 7/1/34 (g)	2,535,934		2,571,557
4.792% 1/1/35 (g)	78,568		79,711
4.798% 4/1/36 (g)	1,529,159		1,534,803
4.806% 11/1/34 (g)	326,934		331,085
4.81% 2/1/36 (g)	145,381		147,525
4.855% 10/1/34 (g)	1,445,058		1,462,960
4.891% 10/1/35 (g)	41,687		42,311
4.946% 7/1/34 (g)	49,010		49,546
4.987% 7/1/35 (g)	3,117,184		3,171,064
5.046% 3/1/35 (g)	19,839		19,940
5.06% 9/1/34 (g)	861,817		871,403
5.087% 10/1/33 (g)	1,943,084		1,975,356
5.089% 9/1/34 (g)	109,536		110,755
5.141% 5/1/35 (g)	78,860		80,447
5.16% 10/1/18 (g)	47,890		48,476
5.185% 3/1/35 (g)	60,870		61,963
5.192% 5/1/35 (g)	1,433,956		1,466,382
5.193% 6/1/35 (g)	445,895		449,802
5.198% 3/1/35 (g)	73,308		73,666
5.264% 11/1/36 (g)	465,954		477,499
5.31% 12/1/34 (g)	152,152		154,134
5.408% 1/1/36 (g)	592,097		600,434
5.456% 2/1/36 (g)	2,191,808		2,265,236
5.5% 8/1/14 to 12/1/14	1,477,602		1,545,171
5.51% 11/1/36 (g)	774,695		789,430
5.564% 1/1/36 (g)	662,947		685,299
5.593% 7/1/37 (g)	343,965		354,932
5.607% 1/1/34 (g)	234,248		237,821
5.798% 1/1/36 (g)	455,834		474,185
5.821% 7/1/46 (g)	3,996,795		4,153,153
5.822% 3/1/36 (g)	1,449,234		1,503,206
5.995% 3/1/33 (g)	40,571		41,035
6% 5/1/16 to 4/1/17	558,433		584,380
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
6.013% 4/1/36 (g)	$ 266,602		$ 277,112
6.192% 2/1/35 (g)	65,731		66,859
6.243% 6/1/36 (g)	125,359		127,396
6.328% 4/1/36 (g)	262,430		273,133
6.5% 12/1/13 to 3/1/35	11,464,938		12,094,113
7% 11/1/11 to 6/1/33	1,554,994		1,661,093
7.5% 8/1/17 to 9/1/28	523,129		557,823
8.5% 5/1/21 to 9/1/25	92,249		98,257
9.5% 2/1/25	15,202		16,426
10.5% 8/1/20	18,773		21,409
11% 8/1/15	21,641		22,153
12.5% 12/1/13 to 4/1/15	10,324		11,883
TOTAL FANNIE MAE			67,694,557
Freddie Mac - 2.2%
3.456% 2/1/34 (g)	109,267		109,154
3.883% 1/1/35 (g)	221,638		223,503
4.275% 6/1/35 (g)	176,565		179,080
4.315% 12/1/34 (g)	145,811		148,172
4.322% 3/1/35 (g)	249,974		253,854
4.361% 2/1/35 (g)	330,024		334,500
4.407% 3/1/35 (g)	180,340		182,977
4.471% 3/1/35 (g)	166,726		169,180
4.522% 2/1/35 (g)	311,026		316,074
5% 3/1/19	5,896,466		6,108,392
5% 3/12/39 (c)	1,000,000		1,015,776
5.142% 4/1/35 (g)	816,573		834,825
5.288% 3/1/35 (g)	113,273		113,889
5.294% 1/1/34 (g)	961,275		977,558
5.521% 1/1/36 (g)	926,805		954,840
5.526% 2/1/35 (g)	202,117		203,229
5.694% 10/1/35 (g)	229,541		239,225
5.86% 6/1/36 (g)	301,239		312,317
5.977% 6/1/36 (g)	273,418		283,683
6.095% 3/1/33 (g)	25,767		26,171
6.101% 6/1/36 (g)	293,437		305,343
6.594% 1/1/37 (g)	1,731,287		1,806,491
6.837% 10/1/36 (g)	2,190,269		2,285,410
8.5% 9/1/24 to 8/1/27	75,200		80,705
10.5% 5/1/21	801		808
11% 12/1/11	136		137
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Freddie Mac - continued
11.5% 10/1/15	$ 5,066		$ 5,657
11.75% 10/1/10	3,205		3,324
TOTAL FREDDIE MAC			17,474,274
Government National Mortgage Association - 3.8%
4.25% 7/20/34 (g)	304,253		305,385
5.5% 3/18/39 (c)	7,000,000		7,189,608
5.5% 3/18/39 (c)	8,000,000		8,216,694
5.5% 3/18/39 (c)	6,000,000		6,162,521
5.5% 3/18/39 (c)	7,000,000		7,189,608
7% 7/15/28 to 11/15/28	382,193		406,832
7.5% 2/15/28 to 10/15/28	6,279		6,645
8% 6/15/24 to 10/15/24	6,840		7,271
8.5% 5/15/17 to 10/15/21	95,546		103,668
11% 7/20/19 to 8/20/19	4,785		5,553
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			29,593,785
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $112,573,446)		114,762,616
Asset-Backed Securities - 2.7%
Accredited Mortgage Loan Trust:
Series 2004-4 Class A2D, 0.8238% 1/25/35 (g)	11,532		4,110
Series 2005-1 Class M1, 0.9438% 4/25/35 (g)	212,546		125,374
ACE Securities Corp. Series 2006-NC2:
Class M7, 1.2238% 7/25/36 (g)	95,099		732
Class M8, 1.3238% 7/25/36 (g)	47,123		250
Class M9, 2.1738% 7/25/36 (g)	31,137		109
ACE Securities Corp. Home Equity Loan Trust:
Series 2003-HS1:
Class M1, 1.5988% 6/25/33 (g)	31		31
Class M2, 3.0988% 6/25/33 (g)	14,181		9,857
Series 2004-HE1 Class M1, 0.9738% 2/25/34 (g)	33,851		29,977
Series 2004-OP1 Class M1, 0.9938% 4/25/34 (g)	70,866		30,846
Series 2005-HE2 Class M2, 0.9238% 4/25/35 (g)	29,895		24,486
Series 2005-SD1 Class A1, 0.8738% 11/25/50 (g)	3,927		3,576
Series 2006-HE2:
Class M3, 0.8138% 5/25/36 (g)	41,322		1,273
Class M4, 0.8738% 5/25/36 (g)	34,920		737
Asset-Backed Securities - continued
	Principal Amount		Value
ACE Securities Corp. Home Equity Loan Trust: - continued
Series 2006-HE2:
Class M5, 0.9138% 5/25/36 (g)	$ 50,770		$ 792
Series 2006-OP1:
Class M4, 0.8438% 4/25/36 (g)	19,400		793
Class M5, 0.8638% 4/25/36 (g)	18,430		632
Advanta Business Card Master Trust:
Series 2005-A2 Class A2, 0.6% 5/20/13 (g)	1,200,000		900,000
Series 2006-A7 Class A7, 0.49% 10/20/12 (g)	550,000		440,000
Series 2006-C1 Class C1, 0.95% 10/20/14 (g)	135,664		9,496
Series 2007-A4 Class A4, 0.5% 4/22/13 (g)	497,203		367,930
Series 2007-B1 Class B, 0.72% 12/22/14 (g)	287,139		43,071
Series 2007-D1 Class D, 1.87% 1/22/13 (b)(g)	1,420,000		99,400
ALG Student Loan Trust I Series 2006-1 Class A1, 1.1938% 10/28/18 (b)(g)	111,433		109,918
American Express Credit Account Master Trust Series 2004-C Class C, 0.9613% 2/15/12 (b)(g)	28,292		25,684
AmeriCredit Automobile Receivables Trust Series 2005-1 Class C, 4.73% 7/6/10	64,434		63,991
Ameriquest Mortgage Securities, Inc. Series 2006-M3 Class M7, 1.3238% 10/25/36 (g)	20,392		12
Ameriquest Mortgage Securities, Inc. pass-thru certificates:
Series 2003-10 Class M1, 1.1738% 12/25/33 (g)	18,501		11,708
Series 2004-R10 Class M1, 1.1738% 11/25/34 (g)	77,309		34,436
Series 2004-R11 Class M1, 1.1338% 11/25/34 (g)	66,534		32,652
Series 2004-R2:
Class M1, 0.9038% 4/25/34 (g)	29,255		22,316
Class M3, 1.0238% 4/25/34 (g)	19,176		7,304
Series 2005-R1 Class M1, 0.9238% 3/25/35 (g)	107,398		62,602
Series 2005-R10 Class A2B, 0.6938% 12/25/35 (g)	97,414		66,784
Series 2005-R2 Class M1, 0.9238% 4/25/35 (g)	235,341		135,498
Amortizing Residential Collateral Trust Series 2002-BC3 Class A, 0.8038% 6/25/32 (g)	20,578		10,311
Argent Securities, Inc.:
Series 2006-M1 Class M7, 1.4738% 7/25/36 (g)	86,250		233
Series 2006-M2 Class M7, 1.3738% 9/25/36 (g)	78,844		71
Argent Securities, Inc. pass-thru certificates:
Series 2003-W7 Class A2, 0.7794% 3/1/34 (g)	5,463		1,106
Series 2004-W11 Class M2, 1.1738% 11/25/34 (g)	63,962		23,717
Series 2004-W5 Class M1, 1.0738% 4/25/34 (g)	77,406		45,562
Series 2004-W7:
Class M1, 1.0238% 5/25/34 (g)	67,706		21,406
Asset-Backed Securities - continued
	Principal Amount		Value
Argent Securities, Inc. pass-thru certificates: - continued
Series 2004-W7:
Class M2, 1.0738% 5/25/34 (g)	$ 59,170		$ 31,972
Series 2006-W4 Class A2C, 0.6338% 5/25/36 (g)	176,909		62,250
Asset Backed Funding Corp. Series 2006-OPT2 Class M7, 1.2538% 10/25/36 (g)	148,507		1,856
Asset Backed Funding Corp. Trust Series 2005-HE1 Class M1, 0.8938% 12/25/34 (g)	163,466		79,187
Asset Backed Securities Corp. Home Equity Loan Trust:
Series 2003-HE3 Class M1, 1.7063% 6/15/33 (g)	27,812		12,375
Series 2003-HE6 Class M1, 1.1238% 11/25/33 (g)	61,149		31,836
Series 2004-HE2 Class M1, 1.0238% 4/25/34 (g)	304,192		131,811
Series 2004-HE3:
Class M1, 1.0138% 6/25/34 (g)	26,927		10,657
Class M2, 1.5938% 6/25/34 (g)	47,415		29,684
Series 2004-HE6 Class A2, 0.8338% 6/25/34 (g)	47,497		18,308
Series 2006-HE6:
Class M7, 1.2738% 11/25/36 (g)	46,948		577
Class M9, 2.6238% 11/25/36 (g)	125,421		640
Axon Financial Funding Ltd. Series 2007-1A Class A1, 5.96% 4/4/17 (a)(b)(g)	388,000		0
Bank of America Credit Card Master Trust Series 2006-HE7 Class B4, 0.535% 3/15/12 (g)	391,376		351,872
Bayview Financial Acquisition Trust Series 2004-C Class A1, 1.0388% 5/28/44 (g)	37,007		22,497
Bayview Financial Mortgage Loan Trust Series 2004-A Class A, 1.0838% 2/28/44 (g)	73,314		45,581
Bear Stearns Asset Backed Securities I Trust:
Series 2005-3 Class A1, 0.9238% 9/25/35 (g)	12,441		9,074
Series 2005-FR1 Class M1, 0.9738% 6/25/35 (g)	110,386		50,150
Series 2005-HE2:
Class M1, 0.9738% 2/25/35 (g)	173,975		57,632
Class M2, 1.2238% 2/25/35 (g)	570,000		264,521
Brazos Higher Education Authority, Inc. Series 2006-2 Class A9, 1.4763% 12/26/24 (g)	261,833		234,092
C-BASS Trust Series 2006-CB7 Class A2, 0.5338% 10/25/36 (g)	56,332		48,452
Capital Auto Receivables Asset Trust Series 2005-1 Class B, 0.83% 6/15/10 (g)	71,852		70,774
Capital One Auto Finance Trust Series 2006-C Class A3B, 0.465% 7/15/11 (g)	43,503		40,478
Capital One Multi-Asset Execution Trust Series 2007-C3 Class C3, 0.745% 4/15/13 (b)(g)	331,468		238,601
Capital Trust Ltd. Series 2004-1:
Class A2, 0.92% 7/20/39 (b)(g)	52,147		13,037
Asset-Backed Securities - continued
	Principal Amount		Value
Capital Trust Ltd. Series 2004-1: - continued
Class B, 1.22% 7/20/39 (b)(g)	$ 30,070		$ 4,210
Class C, 1.57% 7/20/39 (b)(g)	38,684		3,482
Carrington Mortgage Loan Trust:
Series 2006-FRE1 Class M1, 0.7738% 7/25/36 (g)	130,038		6,255
Series 2006-NC2 Class M7, 1.3238% 6/25/36 (g)	48,500		970
Series 2006-NC3 Class M10, 2.4738% 8/25/36 (b)(g)	215,000		2,602
Series 2006-RFC1 Class M9, 2.3438% 5/25/36 (g)	21,243		576
Series 2007-RFC1 Class A3, 0.6138% 12/25/36 (g)	205,465		49,740
Cendant Timeshare Receivables Funding LLC Series 2005 1A Class 2A2, 0.65% 5/20/17 (b)(g)	31,093		22,535
Chase Issuance Trust Series 2004-3 Class C, 0.9313% 6/15/12 (g)	60,489		54,526
CIT Equipment Collateral Trust Series 2006-VT2 Class D, 5.46% 4/20/14	38,887		19,444
Citigroup Mortgage Loan Trust:
Series 2003-HE4 Class A, 0.8838% 12/25/33 (b)(g)	43,504		29,532
Series 2006-AMC1 Class M7, 0.82% 9/25/36 (g)	86,233		1,035
Series 2007-AMC4 Class M1, 0.7438% 5/25/37 (g)	87,242		3,350
CNH Wholesale Master Note Trust Series 2006-1A:
Class A, 0.515% 7/15/12 (b)(g)	149,147		146,860
Class B, 0.735% 7/15/12 (b)(g)	149,147		140,663
Countrywide Home Loan Trust Series 2006-13 Class N, 7% 8/25/37 (b)	37,648		4
Countrywide Home Loans, Inc.:
Series 2002-6 Class AV1, 1.3338% 5/25/33 (g)	5,908		3,225
Series 2004-3:
Class 3A4, 0.7238% 8/25/34 (g)	21,794		11,664
Class M1, 0.9738% 6/25/34 (g)	75,408		49,621
Class M4, 1.4438% 4/25/34 (g)	18,217		8,631
Series 2004-4:
Class A, 0.8438% 8/25/34 (g)	4,770		2,255
Class M2, 1.0038% 6/25/34 (g)	67,016		44,353
Series 2005-1:
Class M1, 0.8938% 8/25/35 (g)	58,433		42,131
Class MV2, 0.9138% 7/25/35 (g)	161,175		112,415
Series 2005-3 Class MV1, 0.8938% 8/25/35 (g)	282,580		246,323
Series 2005-AB1 Class A2, 0.6838% 8/25/35 (g)	54,117		44,708
CPS Auto Receivables Trust Series 2004-D Class A2, 3.86% 12/15/11 (b)	17,379		15,858
DB Master Finance LLC Series 2006-1 Class M1, 8.285% 6/20/31 (b)	715,000		464,300
Asset-Backed Securities - continued
	Principal Amount		Value
Discover Card Master Trust I:
Series 2006-1 Class B1, 0.605% 8/16/11 (g)	$ 242,461		$ 240,484
Series 2006-2 Class B1, 0.575% 1/17/12 (g)	331,468		297,063
Series 2007-1 Class B, 0.555% 8/15/12 (g)	331,468		259,000
Fannie Mae subordinate REMIC pass-thru certificates Series 2004-T5 Class AB3, 0.8983% 5/28/35 (g)	4,436		2,316
Fieldstone Mortgage Investment Corp.:
Series 2004-3 Class M5, 2.6488% 8/25/34 (g)	33,155		8,246
Series 2006-3 Class 2A3, 0.6338% 11/25/36 (g)	513,111		144,633
First Franklin Mortgage Loan Trust:
Series 2004-FF2 Class M3, 1.2988% 3/25/34 (g)	2,587		1,362
Series 2006-FF12 Class A2, 0.5138% 9/25/36 (g)	55,632		50,945
First Investors Auto Owner Trust Series 2006-A Class A3, 4.93% 2/15/11 (b)	20,050		19,843
Ford Credit Auto Owner Trust:
Series 2006-B Class D, 7.26% 2/15/13 (b)	850,000		425,000
Series 2006-C Class D, 6.89% 5/15/13 (b)	585,000		291,038
Series 2007-A Class D, 7.05% 12/15/13 (b)	310,000		155,000
Ford Credit Floorplan Master Owner Trust:
Series 2006-3 Class B, 0.905% 6/15/11 (g)	230,782		161,547
Series 2006-4 Class B, 1.005% 6/15/13 (g)	88,095		44,425
Fremont Home Loan Trust:
Series 2004-1:
Class M1, 1.1488% 2/25/34 (g)	8,218		2,342
Class M2, 1.2238% 2/25/34 (g)	14,046		8,983
Series 2004-A Class M1, 1.2988% 1/25/34 (g)	136,902		73,121
Series 2005-A:
Class M1, 0.9038% 1/25/35 (g)	11,907		10,974
Class M2, 0.9338% 1/25/35 (g)	200,130		73,154
Class M3, 0.9638% 1/25/35 (g)	108,136		46,211
Class M4, 1.1538% 1/25/35 (g)	41,438		20,307
Series 2006-A:
Class M4, 0.8738% 5/25/36 (g)	103,111		1,413
Class M5, 0.9738% 5/25/36 (g)	55,232		685
GCO Education Loan Funding Master Trust II Series 2007-1A Class C1L, 1.6288% 9/25/30 (b)(g)	268,496		180,891
GE Business Loan Trust Series 2003-1 Class A, 0.8913% 4/15/31 (b)(g)	40,918		25,369
GE Capital Credit Card Master Note Trust:
Series 2006-1:
Class B, 0.5713% 9/17/12 (g)	101,443		71,010
Class C, 0.7013% 9/17/12 (g)	78,880		51,272
Series 2007-1 Class C, 0.7313% 3/15/13 (g)	541,047		357,091
Asset-Backed Securities - continued
	Principal Amount		Value
GS Auto Loan Trust Series 2006-1 Class D, 6.25% 1/15/14 (b)	$ 479,536		$ 191,815
GSAMP Trust:
Series 2002-HE Class M1, 2.345% 11/20/32 (g)	70,963		34,561
Series 2003-FM1 Class M1, 1.7% 3/20/33 (g)	136,559		82,742
Series 2004-AR1:
Class B4, 5% 6/25/34 (b)(g)	142,877		12,009
Class M1, 1.1238% 6/25/34 (g)	250,008		95,036
Series 2004-FM1 Class M1, 1.4488% 11/25/33 (g)	46,464		24,864
Series 2004-FM2 Class M1, 1.2238% 1/25/34 (g)	119,518		68,787
Series 2004-HE1 Class M1, 1.0238% 5/25/34 (g)	65,461		21,249
Series 2007-HE1 Class M1, 0.7238% 3/25/47 (g)	103,732		4,948
GSR Mortgage Loan Trust:
Series 2004-OPT Class A1, 0.8138% 11/25/34 (g)	1,808		853
Series 2005-MTR1 Class A1, 0.6138% 10/25/35 (g)	40,413		37,338
Series 2006-FM1 Class M3, 0.8238% 4/25/36 (g)	49,160		624
Guggenheim Structured Real Estate Funding Ltd.:
Series 2005-1 Class C, 1.5538% 5/25/30 (b)(g)	75,229		33,853
Series 2006-3:
Class B, 0.8738% 9/25/46 (b)(g)	74,651		11,944
Class C, 1.0238% 9/25/46 (b)(g)	174,018		20,882
Helios Finance L.P. Series 2007-S1 Class B1, 1.17% 10/20/14 (b)(g)	401,561		204,796
Home Equity Asset Trust:
Series 2002-3 Class A5, 1.3538% 2/25/33 (g)	46		10
Series 2003-3 Class M1, 1.7638% 8/25/33 (g)	114,000		51,982
Series 2003-4 Class M1, 1.6738% 10/25/33 (g)	33,755		14,949
Series 2003-5:
Class A2, 1.1738% 12/25/33 (g)	3,753		1,103
Class M1, 1.5238% 12/25/33 (g)	39,023		23,460
Series 2003-7 Class A2, 1.2338% 3/25/34 (g)	189		39
Series 2003-8 Class M1, 1.5538% 4/25/34 (g)	59,361		27,533
Series 2004-3 Class M2, 2.1738% 8/25/34 (g)	38,676		23,518
Series 2004-7 Class A3, 0.8638% 1/25/35 (g)	70		26
Series 2005-1 Class M1, 0.9038% 5/25/35 (g)	148,669		132,833
Series 2005-3 Class M1, 0.8838% 8/25/35 (g)	101,636		90,851
Series 2005-5 Class 2A2, 0.7238% 11/25/35 (g)	45,504		40,201
Series 2006-1 Class 2A3, 0.6988% 4/25/36 (g)	416,108		287,288
Series 2006-7 Class M4, 0.8538% 1/25/37 (g)	130,756		601
Household Home Equity Loan Trust Series 2004-1 Class M, 0.8794% 9/20/33 (g)	32,204		19,587
HSBC Credit Card Master Note Trust I Series 2006-1 Class B, 0.6013% 6/15/12 (g)	256,449		227,770
Asset-Backed Securities - continued
	Principal Amount		Value
HSBC Home Equity Loan Trust:
Series 2005-2:
Class M1, 0.8194% 1/20/35 (g)	$ 88,073		$ 46,593
Class M2, 0.8494% 1/20/35 (g)	66,063		32,378
Series 2005-3 Class A1, 0.6194% 1/20/35 (g)	46,324		24,785
Series 2006-2:
Class M1, 0.74% 3/20/36 (g)	72,607		37,973
Class M2, 0.76% 3/20/36 (g)	120,061		58,948
Series 2006-3 Class A1V, 0.55% 3/20/36 (g)	79,280		75,619
HSI Asset Securitization Corp. Trust Series 2007-HE1 Class 2A3, 0.6638% 1/25/37 (g)	141,116		42,357
JPMorgan Mortgage Acquisition Trust Series 2007-CH1:
Class AV4, 0.6038% 11/25/36 (g)	141,698		60,222
Class MV1, 0.7038% 11/25/36 (g)	115,100		11,687
Keycorp Student Loan Trust:
Series 1999-A Class A2, 4.0988% 12/27/09 (g)	126,385		98,156
Series 2006-A Class 2A1, 1.4963% 9/27/21 (g)	85,839		83,568
Lancer Funding Ltd. Series 2006-1A Class A3, 3.1125% 4/6/46 (b)(g)	30,638		306
Long Beach Mortgage Loan Trust:
Series 2003-2 Class M1, 1.7038% 6/25/33 (g)	241,930		108,905
Series 2004-2:
Class M1, 1.0038% 6/25/34 (g)	70,849		37,390
Class M2, 1.5538% 6/25/34 (g)	50,366		38,392
Series 2006-9 Class M4, 0.8438% 11/25/36 (g)	41,372		79
MASTR Asset Backed Securities Trust:
Series 2006-AM3 Class M1, 0.7338% 10/25/36 (g)	51,216		1,864
Series 2006-NC2 Class M7, 1.2238% 9/25/36 (g)	24,087		7
Series 2007-HE1 Class M1, 0.7738% 5/25/37 (g)	89,453		3,748
Merna Reinsurance Ltd. Series 2007-1 Class B, 3.2088% 6/30/12 (b)(g)	1,695,000		1,551,434
Merrill Lynch Mortgage Investors Trust:
Series 2003-HE1 Class M1, 1.1738% 7/25/34 (g)	67,940		43,620
Series 2003-OPT1 Class M1, 1.1238% 7/25/34 (g)	18,632		12,975
Series 2006-FM1 Class A2B, 0.5838% 4/25/37 (g)	296,490		210,204
Series 2006-OPT1 Class A1A, 0.7338% 6/25/35 (g)	193,498		89,100
Morgan Stanley ABS Capital I Trust:
Series 2002-HE3 Class M1, 2.1238% 12/27/32 (g)	4,962		2,873
Series 2003-NC7 Class M1, 1.5238% 6/25/33 (g)	60,046		33,964
Series 2003-NC8 Class M1, 1.5238% 9/25/33 (g)	46,366		26,852
Series 2004-HE6 Class A2, 0.8138% 8/25/34 (g)	6,539		1,134
Series 2004-NC2 Class M1, 1.2988% 12/25/33 (g)	117,424		56,458
Series 2005-HE1 Class M2, 0.9438% 12/25/34 (g)	55,600		26,816
Asset-Backed Securities - continued
	Principal Amount		Value
Morgan Stanley ABS Capital I Trust: - continued
Series 2005-HE2 Class M1, 0.8738% 1/25/35 (g)	$ 50,304		$ 17,157
Series 2005-NC1 Class M1, 0.9138% 1/25/35 (g)	45,571		15,528
Series 2005-NC2 Class B1, 1.6438% 3/25/35 (g)	58,200		28,039
Series 2006-HE3 Class B1, 1.3738% 4/25/36 (g)	25,872		57
Series 2006-NC4:
Class M4, 0.8238% 6/25/36 (g)	38,800		404
Class M6, 0.9238% 6/25/36 (g)	19,400		107
Series 2007-HE2 Class A2A, 0.5138% 1/25/37 (g)	12,900		10,412
Series 2007-HE4 Class A2A, 0.5838% 2/25/37 (g)	12,547		8,401
Series 2007-NC3 Class A2A, 0.5338% 5/25/37 (g)	6,817		5,425
Morgan Stanley Dean Witter Capital I Trust:
Series 2001-NC4 Class M1, 1.9738% 1/25/32 (g)	3,004		832
Series 2002-AM3 Class A3, 1.4538% 2/25/33 (g)	11,696		9,561
Series 2002-HE2 Class M1, 1.9738% 8/25/32 (g)	74,098		41,729
Series 2002-NC1 Class M1, 1.6738% 2/25/32 (b)(g)	63,286		36,327
Series 2002-NC3:
Class A3, 1.1538% 8/25/32 (g)	3,928		704
Class M1, 1.5538% 8/25/32 (g)	7,168		3,269
Series 2003-NC1 Class M1, 2.0488% 11/25/32 (g)	46,491		22,868
Morgan Stanley Home Equity Loans Trust:
Series 2006-3 Class M5, 0.8838% 4/25/36 (g)	38,800		481
Series 2007-2 Class A1, 0.5738% 4/25/37 (g)	9,202		6,989
National Collegiate Student Loan Trust:
Series 2006-3 Class A1, 0.5038% 9/25/19 (g)	143,285		134,553
Series 2006-4 Class A1, 0.5038% 3/25/25 (g)	116,740		104,152
New Century Home Equity Loan Trust:
Series 2003-6 Class M1, 1.5538% 1/25/34 (g)	133,254		74,491
Series 2005-4 Class M2, 0.9838% 9/25/35 (g)	162,650		24,221
Series 2005-D Class M2, 0.9438% 2/25/36 (g)	33,892		2,291
Nomura Home Equity Loan Trust:
Series 2006-AF1 Class A1, 6.032% 10/25/36	30,115		26,247
Series 2006-FM2 Class M7, 1.2738% 7/25/36 (g)	110,774		631
Series 2006-HE2 Class A2, 0.5938% 3/25/36 (g)	94,859		85,856
Ocala Funding LLC:
Series 2005-1A Class A, 1.97% 3/20/10 (b)(g)	64,563		22,597
Series 2006-1A Class A, 1.87% 3/20/11 (b)(g)	134,073		53,629
Onyx Acceptance Owner Trust Series 2005-B Class A4, 4.34% 5/15/12	793,876		717,947
Option One Mortgage Loan Trust Series 2004-3 Class M3, 1.1238% 11/25/34 (g)	39,207		24,668
Asset-Backed Securities - continued
	Principal Amount		Value
Park Place Securities, Inc.:
Series 2004-WCW1:
Class M2, 1.1538% 9/25/34 (g)	$ 31,738		$ 18,211
Class M3, 1.7238% 9/25/34 (g)	60,741		13,609
Class M4, 1.9238% 9/25/34 (g)	77,891		8,240
Series 2004-WCW2 Class M3, 1.0238% 7/25/35 (g)	45,668		7,576
Series 2004-WHQ2 Class M1, 1.0638% 2/25/35 (g)	132,580		96,981
Series 2004-WWF1:
Class M2, 1.1538% 2/25/35 (g)	183,311		107,612
Class M3, 1.2138% 2/25/35 (g)	22,717		9,148
Series 2005-WCH1:
Class M2, 0.9938% 1/25/35 (g)	87,921		50,233
Class M3, 1.0338% 1/25/35 (g)	54,533		21,550
Class M4, 1.3038% 1/25/35 (g)	168,217		25,938
Series 2005-WHQ2:
Class M7, 1.7238% 5/25/35 (g)	608,374		23,797
Class M9, 2.3538% 5/25/35 (g)	67,415		1,943
People's Choice Financial Realty Mortgage Securities Trust Series 2006-1:
Class M4, 0.8338% 9/25/36 (g)	194,388		1,205
Class M5, 0.8638% 9/25/36 (g)	96,903		426
Providian Master Note Trust Series 2006-C1A Class C1, 1.005% 3/16/15 (b)(g)	414,093		178,060
Salomon Brothers Mortgage Securities VII, Inc. Series 2003-HE1 Class A, 1.2738% 4/25/33 (g)	582		105
Saxon Asset Securities Trust Series 2004-1 Class M1, 1.2688% 3/25/35 (g)	215,437		102,452
Sierra Receivables Funding Co. Series 2007-1A Class A2, 0.92% 3/20/19 (b)(g)	122,415		91,824
SLM Private Credit Student Loan Trust Series 2004-A Class C, 2.9463% 6/15/33 (g)	145,034		65,265
Sovereign Dealer Floor Plan Master LLC Series 2006-1:
Class B, 0.635% 8/15/11 (b)(g)	197,143		167,572
Class C, 0.835% 8/15/11 (b)(g)	89,900		67,425
Specialty Underwriting & Residential Finance Trust Series 2003-BC3 Class M2, 2.0738% 8/25/34 (g)	26,709		17,358
Structured Asset Investment Loan Trust Series 2004-8 Class M5, 1.6238% 9/25/34 (g)	10,400		4,184
Structured Asset Securities Corp.:
Series 2004-GEL1 Class A, 0.8338% 2/25/34 (g)	15,647		6,914
Series 2006-BC3 Class M7, 1.2738% 10/25/36 (g)	335		0
Asset-Backed Securities - continued
	Principal Amount		Value
Structured Asset Securities Corp.: - continued
Series 2007-GEL1 Class A2, 0.6638% 1/25/37 (b)(g)	$ 149,147		$ 43,343
Superior Wholesale Inventory Financing Trust:
Series 2004-A10:
Class A, 0.5613% 9/15/11 (g)	599,460		482,565
Class B, 0.7413% 9/15/11 (g)	448,315		179,326
Series 2007-AE1:
Class A, 0.555% 1/15/12 (g)	111,531		78,072
Class B, 0.755% 1/15/12 (g)	97,039		38,816
Class C, 1.055% 1/15/12 (g)	120,590		36,177
Swift Master Auto Receivables Trust Series 2007-1 Class A, 0.555% 6/15/12 (g)	327,569		235,850
Terwin Mortgage Trust:
Series 2003-4HE Class A1, 0.9038% 9/25/34 (g)	3,285		679
Series 2003-6HE Class A1, 0.9438% 11/25/33 (g)	4,157		1,396
Turquoise Card Backed Securities PLC:
Series 2006-1A Class C, 0.785% 5/16/11 (b)(g)	322,603		306,775
Series 2006-2:
Class B, 0.605% 10/17/11 (g)	390,386		341,588
Class C, 0.805% 10/17/11 (g)	366,776		296,446
Series 2007-1 Class C, 0.8313% 6/15/12 (g)	418,225		269,132
Wachovia Auto Loan Owner Trust Series 2006-2A Class E, 7.05% 5/20/14 (b)	955,000		276,950
WaMu Asset Holdings Corp. Series 2006-8 Class N1, 6.048% 10/25/46 (b)	101,166		10
WaMu Asset-Backed Certificates Series 2006-HE3:
Class M4, 0.8538% 10/25/36 (g)	68,715		1,244
Class M7, 1.2738% 10/25/36 (g)	49,742		557
WaMu Master Note Trust:
Series 2006-A3A Class A3, 0.485% 9/16/13 (b)(g)	626,213		596,416
Series 2006-C2A Class C2, 0.955% 8/15/15 (b)(g)	798,019		346,723
Series 2006-C3A Class C3A, 0.835% 10/15/13 (b)(g)	558,526		450,722
Series 2007-A4A Class A4, 5.2% 10/15/14 (b)	420,000		375,900
Series 2007-C1 Class C1, 0.855% 5/15/14 (b)(g)	486,028		285,969
Wells Fargo Home Equity Trust Series 2004-3 Class A, 4.5% 11/27/34 (b)(j)	864		0
Asset-Backed Securities - continued
	Principal Amount		Value
WFS Financial Owner Trust Series 2005-1 Class C, 3.82% 8/17/12	$ 2,060		$ 2,053
Whinstone Capital Management Ltd. Series 1A Class B3, 2.0594% 10/25/44 (b)(g)	203,978		24,477
TOTAL ASSET-BACKED SECURITIES (Cost $25,929,328)		21,026,536
Collateralized Mortgage Obligations - 4.5%
Private Sponsor - 1.3%
Arkle Master Issuer PLC floater:
Series 2006-1A Class 3C, 1.6275% 2/17/52 (b)(g)	76,320		57,240
Series 2006-2A:
Class 2B, 1.3575% 2/17/52 (b)(g)	268,574		250,674
Class 2M, 1.4375% 2/17/52 (b)(g)	182,651		164,108
Arran Residential Mortgages Funding No. 1 PLC floater Series 2006-1A Class DB, 1.7838% 4/12/56 (b)(g)	171,422		72,767
Banc of America Mortgage Securities, Inc.:
Series 2003-K Class 1A1, 5.2035% 12/25/33 (g)	7,698		6,251
Series 2004-B Class 1A1, 6.433% 3/25/34 (g)	8,565		6,523
Series 2004-C Class 1A1, 5.971% 4/25/34 (g)	15,186		11,969
Bear Stearns Alt-A Trust floater:
Series 2005-1 Class A1, 0.7538% 1/25/35 (g)	350,705		173,213
Series 2005-2 Class 1A1, 0.7238% 3/25/35 (g)	65,017		36,076
Series 2005-5 Class 1A1, 0.6938% 7/25/35 (g)	82,680		41,888
Chase Mortgage Finance Trust Series 2007-A1 Class 1A5, 4.9685% 2/25/37 (g)	234,667		175,953
Countrywide Alternative Loan Trust planned amortization class Series 2003-5T2 Class A2, 0.8738% 5/25/33 (g)	11,746		11,180
Countrywide Home Loans, Inc. Series 2003-46 Class 4A1, 4.698% 1/19/34 (g)	2,078,233		1,613,809
Credit Suisse First Boston Adjustable Rate Mortgage Trust floater:
Series 2004-1 Class 9A2, 0.8738% 1/25/34 (g)	6,614		3,293
Series 2004-2 Class 7A3, 0.8738% 2/25/35 (g)	14,383		6,741
Series 2004-4 Class 5A2, 0.8738% 3/25/35 (g)	3,162		1,323
Series 2005-1 Class 5A2, 0.8038% 5/25/35 (g)	52,850		25,166
Series 2005-10:
Class 5A1, 0.7338% 1/25/36 (g)	83,855		40,057
Class 5A2, 0.7938% 1/25/36 (g)	37,733		15,128
Series 2005-2:
Class 6A2, 0.7538% 6/25/35 (g)	13,157		5,835
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Credit Suisse First Boston Adjustable Rate Mortgage Trust floater: - continued
Series 2005-2:
Class 6M2, 0.9538% 6/25/35 (g)	$ 168,140		$ 41,072
Series 2005-3 Class 8A2, 0.7138% 7/25/35 (g)	62,436		31,694
Series 2005-4 Class 7A2, 0.7038% 8/25/35 (g)	19,790		9,759
Series 2005-8 Class 7A2, 0.7538% 11/25/35 (g)	49,268		27,858
Credit Suisse First Boston Mortgage Securities Corp. floater:
Series 2004-AR4 Class 5A2, 1.2138% 5/25/34 (g)	1,825		1,064
Series 2004-AR5 Class 11A2, 1.2138% 6/25/34 (g)	3,702		1,912
Series 2004-AR6 Class 9A2, 1.2138% 10/25/34 (g)	18,015		9,025
Series 2004-AR7 Class 6A2, 1.2338% 8/25/34 (g)	5,433		2,476
Series 2004-AR8 Class 8A2, 0.8538% 9/25/34 (g)	3,399		2,025
Series 2007-AR7 Class 2A1, 4.6052% 11/25/34 (g)	508,587		358,064
Deutsche Alt-A Securities Mortgage Loan Trust floater Series 2007-BAR1 Class A3, 0.6338% 3/25/37 (g)	391,531		203,414
DSLA Mortgage Loan Trust Series 2006-AR2 Class 2AB1, 0.5563% 9/19/36 (g)	80,961		65,885
First Horizon Mortgage pass-thru Trust floater Series 2004-FL1 Class 2A1, 2.15% 12/25/34 (g)	6,507		4,112
Fosse Master Issuer PLC floater Series 2006-1A:
Class B2, 1.3025% 10/18/54 (b)(g)	325,823		249,971
Class C2, 1.6125% 10/18/54 (b)(g)	109,222		54,611
Class M2, 1.3925% 10/18/54 (b)(g)	187,268		121,013
Gracechurch Mortgage Financing PLC floater Series 2006-1 Class D2, 1.7213% 11/20/56 (b)(g)	279,515		130,684
Gracechurch Mortgage Funding PLC floater Series 1A Class DB, 1.8238% 10/11/41 (b)(g)	355,001		153,737
Granite Master Issuer PLC floater:
Series 2006-1A Class C2, 1.07% 12/20/54 (b)(g)	685,130		47,959
Series 2006-2 Class C1, 0.94% 12/20/54 (g)	610,149		61,015
Series 2006-3 Class C2, 0.97% 12/20/54 (g)	128,118		7,892
Series 2006-4:
Class B1, 0.56% 12/20/54 (g)	342,740		68,548
Class C1, 0.85% 12/20/54 (g)	209,578		14,670
Class M1, 0.64% 12/20/54 (g)	90,229		13,534
Series 2007-1:
Class 1C1, 0.77% 12/20/54 (g)	211,732		21,173
Class 1M1, 0.62% 12/20/54 (g)	137,740		20,661
Class 2C1, 0.9% 12/20/54 (g)	96,631		9,663
Class 2M1, 0.72% 12/20/54 (g)	176,850		28,296
Series 2007-2 Class 2C1, 0.8913% 12/17/54 (g)	245,041		24,504
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Granite Mortgages PLC floater Series 2003-3 Class 1C, 2.5925% 1/20/44 (g)	$ 49,066		$ 12,267
Harborview Mortgage Loan Trust floater Series 2005-2 Class 2A1A, 0.6863% 5/19/35 (g)	48,540		21,756
Holmes Master Issuer PLC floater Series 2006-1A Class 2C, 1.4844% 7/15/40 (b)(g)	69,433		48,603
Home Equity Loan Trust floater Series 2007-FRE1 Class 2AV1, 0.6038% 4/25/37 (g)	222,932		127,003
Homestar Mortgage Acceptance Corp. floater Series 2004-5 Class A1, 0.9238% 10/25/34 (g)	17,834		10,126
Impac CMB Trust floater:
Series 2004-11 Class 2A2, 1.2138% 3/25/35 (g)	29,898		17,679
Series 2005-1:
Class M4, 1.2238% 4/25/35 (g)	3,537		589
Class M5, 1.2438% 4/25/35 (g)	3,537		433
Class M6, 1.2938% 4/25/35 (g)	5,657		811
Series 2005-3 Class A1, 0.7138% 8/25/35 (g)	70,798		35,941
Series 2005-4 Class 1B1, 1.6894% 5/25/35 (g)	22,103		757
Series 2005-6 Class 1M3, 1.0838% 10/25/35 (g)	19,165		1,515
JPMorgan Mortgage Trust:
Series 2004-A5 Class 2A1, 4.6116% 12/25/34 (g)	290,810		236,669
Series 2006-A2 Class 5A1, 5.1373% 11/25/33 (g)	454,406		389,939
Lehman Structured Securities Corp. floater Series 2005-1 Class A2, 0.8669% 9/26/45 (b)(g)	56,565		28,895
MASTR Adjustable Rate Mortgages Trust:
floater Series 2005-1 Class 1A1, 0.7438% 3/25/35 (g)	8,473		5,249
Series 2007-3 Class 22A2, 0.6838% 5/25/47 (g)	162,591		78,558
Merrill Lynch Alternative Note Asset Trust floater Series 2007-OAR1 Class A1, 0.6438% 2/25/37 (g)	204,653		85,954
Merrill Lynch Floating Trust floater Series 2006-1:
Class B, 0.625% 6/15/22 (b)(g)	23,707		13,039
Class C, 0.645% 6/15/22 (b)(g)	145,170		72,585
Class D, 0.655% 6/15/22 (b)(g)	55,853		25,134
Class E, 0.665% 6/15/22 (b)(g)	89,337		35,735
Class F, 0.695% 6/15/22 (b)(g)	161,078		56,377
Class G, 0.765% 6/15/22 (b)(g)	33,484		10,045
Class H, 0.785% 6/15/22 (b)(g)	67,046		16,762
Class J, 0.825% 6/15/22 (b)(g)	78,221		15,644
Merrill Lynch Mortgage Investors Trust floater:
Series 2003-A Class 2A1, 0.8638% 3/25/28 (g)	25,346		14,743
Series 2003-B Class A1, 0.8138% 4/25/28 (g)	26,971		15,736
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Merrill Lynch Mortgage Investors Trust floater: - continued
Series 2003-D Class A, 0.7838% 8/25/28 (g)	$ 22,880		$ 14,672
Series 2003-E Class A2, 2.0813% 10/25/28 (g)	38,158		22,769
Series 2003-F Class A2, 3.805% 10/25/28 (g)	30,649		18,361
Series 2004-A Class A2, 3.715% 4/25/29 (g)	35,239		21,812
Series 2004-B Class A2, 2.8388% 6/25/29 (g)	26,892		15,907
Series 2004-C Class A2, 2.15% 7/25/29 (g)	31,094		18,456
Series 2004-D Class A2, 3.4625% 9/25/29 (g)	26,434		15,649
Series 2004-E:
Class A2B, 3.825% 11/25/29 (g)	62,574		39,963
Class A2D, 4.015% 11/25/29 (g)	9,075		5,317
Series 2004-G Class A2, 3.48% 11/25/29 (g)	30,251		18,248
Series 2005-A Class A2, 3.3525% 2/25/30 (g)	29,241		17,595
Series 2005-B Class A2, 2.7988% 7/25/30 (g)	89,346		55,688
Series 2006-MLN1 Class M4, 0.8338% 7/25/37 (g)	185,755		873
MortgageIT Trust floater:
Series 2004-2:
Class A1, 0.8438% 12/25/34 (g)	32,209		20,984
Class A2, 0.9238% 12/25/34 (g)	43,570		30,284
Series 2005-2 Class 1A1, 0.7338% 5/25/35 (g)	36,754		24,296
Opteum Mortgage Acceptance Corp. floater Series 2005-3 Class APT, 0.7638% 7/25/35 (g)	371,225		181,633
Option One Mortgage Loan Trust floater Series 2007-CP1 Class M1, 0.7738% 3/25/37 (g)	278,584		13,121
Permanent Financing No. 8 PLC floater Class 3C, 2.7094% 6/10/42 (g)	233,925		158,427
Permanent Master Issuer PLC floater Series 2006-1 Class 2C, 1.4944% 7/17/42 (g)	59,519		44,044
Provident Funding Mortgage Loan Trust Series 2005-2 Class 3A, 4.5836% 10/25/35 (g)	951,349		758,474
RESI Finance LP/RESI Finance DE Corp. floater:
Series 2003-B:
Class B5, 2.7988% 7/10/35 (b)(g)	155,475		75,638
Class B6, 3.2988% 7/10/35 (b)(g)	635,983		281,677
Series 2003-CB1:
Class B3, 1.8988% 6/10/35 (b)(g)	119,880		64,136
Class B4, 2.0988% 6/10/35 (b)(g)	483,166		248,975
Class B5, 2.6988% 6/10/35 (b)(g)	328,553		163,619
Class B6, 3.1988% 6/10/35 (b)(g)	196,487		96,377
Series 2004-A:
Class B4, 1.6488% 2/10/36 (b)(g)	91,382		31,655
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
RESI Finance LP/RESI Finance DE Corp. floater: - continued
Series 2004-A:
Class B5, 2.1488% 2/10/36 (b)(g)	$ 60,916		$ 19,536
Series 2004-B:
Class B4, 1.5488% 2/10/36 (b)(g)	39,635		10,919
Class B5, 1.9988% 2/10/36 (b)(g)	30,695		7,615
Class B6, 2.4488% 2/10/36 (b)(g)	10,707		2,203
Series 2004-C:
Class B4, 1.3988% 9/10/36 (b)(g)	50,956		14,945
Class B5, 1.7988% 9/10/36 (b)(g)	57,137		15,330
Class B6, 2.1988% 9/10/36 (b)(g)	12,653		2,772
Residential Accredit Loans, Inc. floater Series 2006-QO7 Class 3A1, 0.5738% 9/25/46 (g)	196,935		151,821
Residential Asset Mortgage Products, Inc.:
sequential payer Series 2003-SL1 Class A31, 7.125% 4/25/31	27,907		24,653
Series 2005-AR5 Class 1A1, 5.3771% 9/19/35 (g)	28,508		20,909
Residential Funding Securities Corp. floater Series 2003-RP2 Class A1, 0.9238% 6/25/33 (b)(g)	31,260		23,450
ResMAE Mortgage Loan Trust floater Series 2006-1 Class A2A, 0.5738% 2/25/36 (b)(g)	7,077		6,897
Sequoia Mortgage Trust floater:
Series 2003-5 Class A2, 3.7963% 9/20/33 (g)	51,215		31,216
Series 2004-1 Class A, 1.8888% 2/20/34 (g)	18,289		11,712
Series 2004-10 Class A4, 4.5188% 11/20/34 (g)	26,478		16,379
Series 2004-12 Class 1A2, 2.1538% 1/20/35 (g)	79,859		49,089
Series 2004-3 Class A, 3.885% 5/20/34 (g)	25,069		15,313
Series 2004-4 Class A, 4.4388% 5/20/34 (g)	95,801		59,616
Series 2004-5 Class A3, 2.9113% 6/20/34 (g)	37,550		22,964
Series 2004-6:
Class A3A, 2.1613% 6/20/35 (g)	28,822		18,485
Class A3B, 2.3038% 7/20/34 (g)	5,506		3,384
Series 2004-7:
Class A3A, 1.9138% 8/20/34 (g)	29,062		17,409
Class A3B, 2.1388% 7/20/34 (g)	3,581		2,100
Series 2004-8 Class A2, 2.15% 9/20/34 (g)	72,176		46,750
Series 2005-1 Class A2, 1.8388% 2/20/35 (g)	48,390		29,974
Series 2005-2 Class A2, 2.03% 3/20/35 (g)	60,453		36,348
Series 2005-3 Class A1, 0.67% 5/20/35 (g)	29,362		15,773
Soundview Home Equity Loan Trust floater Series 2006-EQ1 Class M7, 1.2738% 9/25/36 (g)	59,946		785
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Structured Asset Securities Corp. floater Series 2004-NP1 Class A, 0.8738% 9/25/33 (b)(g)	$ 10,747		$ 4,555
TBW Mortgage-Backed pass-thru certificates floater Series 2006-4 Class A3, 0.5894% 9/25/36 (g)	373,140		190,235
WaMu Mortgage pass-thru certificates floater:
Series 2006-AR11 Class C1B1, 0.5538% 9/25/46 (g)	17,279		16,537
Series 2006-AR7 Class C1B1, 0.5338% 7/25/46 (g)	7,003		6,769
Wells Fargo Mortgage Backed Securities Trust:
Series 2004-H Class A1, 4.5322% 6/25/34 (g)	389,581		317,010
Series 2005-AR10 Class 2A2, 4.2192% 6/25/35 (g)	235,583		183,756
Series 2005-AR12 Class 2A6, 4.313% 7/25/35 (g)	168,543		128,768
Series 2005-AR3 Class 2A1, 4.4106% 3/25/35 (g)	454,794		350,048
TOTAL PRIVATE SPONSOR			10,218,704
U.S. Government Agency - 3.2%
Fannie Mae Grantor Trust floater Series 2005-90 Class FG, 0.7238% 10/25/35 (g)	3,903,918		3,773,281
Fannie Mae subordinate REMIC pass-thru certificates:
planned amortization class:
Series 2001-68 Class QZ, 5.5% 12/25/16	1,092,980		1,137,914
Series 2002-9 Class PC, 6% 3/25/17	166,238		174,352
Series 2003-84 Class GC, 4.5% 5/25/15	1,234,237		1,254,091
Series 2005-67 Class HD, 5.5% 12/25/30	2,835,000		2,937,087
Series 2006-4 Class PB, 6% 9/25/35	2,298,138		2,391,961
sequential payer:
Series 2002-56 Class MC, 5.5% 9/25/17	590,806		613,369
Series 2004-3 Class BA, 4% 7/25/17	99,484		101,088
Series 2004-45 Class AV, 4.5% 10/25/22	183,552		183,142
Series 2004-86 Class KC, 4.5% 5/25/19	457,152		468,151
Freddie Mac planned amortization class Series 2104 Class PG, 6% 12/15/28	1,062,388		1,102,038
Freddie Mac Multi-class participation certificates guaranteed:
planned amortization class:
Series 2356 Class GD, 6% 9/15/16	608,486		639,210
Series 2363 Class PF, 6% 9/15/16	853,363		891,227
Series 2702 Class WB, 5% 4/15/17	1,831,189		1,888,813
Series 3033 Class UD, 5.5% 10/15/30	1,075,000		1,116,717
Series 3049 Class DB, 5.5% 6/15/31	2,495,000		2,579,650
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed: - continued
sequential payer:
Series 2528 Class HN, 5% 11/15/17	$ 1,515,000		$ 1,581,944
Series 2777 Class AB, 4.5% 6/15/29	2,272,169		2,325,608
Series 2809 Class UA, 4% 12/15/14	269,385		271,215
TOTAL U.S. GOVERNMENT AGENCY			25,430,858
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $36,636,245)		35,649,562
Commercial Mortgage Securities - 1.9%
Banc of America Large Loan, Inc. floater:
Series 2005-MIB1:
Class F, 0.9313% 3/15/22 (b)(g)	70,189		31,585
Class G, 0.9913% 3/15/22 (b)(g)	45,493		17,287
Series 2006-BIX1:
Class F, 0.765% 10/15/19 (b)(g)	180,653		81,294
Class G, 0.785% 10/15/19 (b)(g)	123,054		43,069
Bayview Commercial Asset Trust floater:
Series 2003-2 Class M1, 1.3238% 12/25/33 (b)(g)	12,015		6,909
Series 2004-1:
Class A, 0.8338% 4/25/34 (b)(g)	156,815		117,611
Class B, 2.3738% 4/25/34 (b)(g)	17,424		6,534
Class M1, 1.0338% 4/25/34 (b)(g)	14,123		8,827
Class M2, 1.6738% 4/25/34 (b)(g)	12,717		6,676
Series 2004-2:
Class A, 0.9038% 8/25/34 (b)(g)	118,633		94,907
Class M1, 1.0538% 8/25/34 (b)(g)	26,925		16,828
Series 2004-3:
Class A1, 0.8438% 1/25/35 (b)(g)	238,768		173,107
Class A2, 0.8938% 1/25/35 (b)(g)	34,378		24,065
Class M1, 0.9738% 1/25/35 (b)(g)	41,312		26,853
Class M2, 1.4738% 1/25/35 (b)(g)	26,733		14,703
Series 2005-2A:
Class A1, 0.7838% 8/25/35 (b)(g)	174,825		122,377
Class M1, 0.9038% 8/25/35 (b)(g)	12,972		5,189
Class M2, 0.9538% 8/25/35 (b)(g)	21,394		8,558
Class M3, 0.9738% 8/25/35 (b)(g)	11,837		4,143
Class M4, 1.0838% 8/25/35 (b)(g)	10,866		3,260
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust floater: - continued
Series 2005-3A:
Class A1, 0.7938% 11/25/35 (b)(g)	$ 95,290		$ 61,938
Class A2, 0.8738% 11/25/35 (b)(g)	61,777		40,155
Class M1, 0.9138% 11/25/35 (b)(g)	11,270		4,283
Class M2, 0.9638% 11/25/35 (b)(g)	14,309		5,437
Class M3, 0.9838% 11/25/35 (b)(g)	12,806		4,482
Class M4, 1.0738% 11/25/35 (b)(g)	15,956		5,584
Series 2005-4A:
Class A2, 0.8638% 1/25/36 (b)(g)	224,027		128,815
Class B1, 1.8738% 1/25/36 (b)(g)	19,360		6,776
Class M1, 0.9238% 1/25/36 (b)(g)	72,267		41,553
Class M2, 0.9438% 1/25/36 (b)(g)	21,680		11,924
Class M3, 0.9738% 1/25/36 (b)(g)	31,662		15,831
Class M4, 1.0838% 1/25/36 (b)(g)	17,511		8,318
Class M5, 1.1238% 1/25/36 (b)(g)	17,511		7,880
Class M6, 1.1738% 1/25/36 (b)(g)	18,599		7,811
Series 2006-1:
Class A2, 0.8338% 4/25/36 (b)(g)	34,852		22,932
Class M1, 0.8538% 4/25/36 (b)(g)	12,465		6,233
Class M2, 0.8738% 4/25/36 (b)(g)	13,170		5,926
Class M3, 0.8938% 4/25/36 (b)(g)	11,332		4,759
Class M4, 0.9938% 4/25/36 (b)(g)	6,421		3,484
Class M5, 1.0338% 4/25/36 (b)(g)	6,233		2,368
Class M6, 1.1138% 4/25/36 (b)(g)	12,427		6,437
Series 2006-2A:
Class A1, 0.7038% 7/25/36 (b)(g)	342,015		273,612
Class A2, 0.7538% 7/25/36 (b)(g)	30,877		24,702
Class B1, 1.3438% 7/25/36 (b)(g)	11,561		2,312
Class B3, 3.1738% 7/25/36 (b)(g)	17,467		3,493
Class M1, 0.7838% 7/25/36 (b)(g)	32,397		16,198
Class M2, 0.8038% 7/25/36 (b)(g)	22,857		10,972
Class M3, 0.8238% 7/25/36 (b)(g)	18,960		8,532
Class M4, 0.8938% 7/25/36 (b)(g)	12,803		5,121
Class M5, 0.9438% 7/25/36 (b)(g)	15,736		5,507
Class M6, 1.0138% 7/25/36 (b)(g)	23,478		8,217
Series 2006-3A:
Class B1, 1.2738% 10/25/36 (b)(g)	20,023		6,187
Class B2, 1.8238% 10/25/36 (b)(g)	14,442		4,245
Class B3, 3.0738% 10/25/36 (b)(g)	23,502		5,218
Class M4, 0.9038% 10/25/36 (b)(g)	22,129		9,637
Class M5, 0.9538% 10/25/36 (b)(g)	26,492		10,597
Class M6, 1.0338% 10/25/36 (b)(g)	51,857		19,446
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust floater: - continued
Series 2006-4A:
Class A1, 0.7038% 12/25/36 (b)(g)	$ 95,467		$ 64,936
Class A2, 0.7438% 12/25/36 (b)(g)	430,258		298,513
Class B1, 1.1738% 12/25/36 (b)(g)	15,019		3,004
Class B2, 1.7238% 12/25/36 (b)(g)	15,542		7,159
Class B3, 2.9238% 12/25/36 (b)(g)	26,116		11,494
Class M1, 0.7638% 12/25/36 (b)(g)	31,085		19,957
Class M2, 0.7838% 12/25/36 (b)(g)	20,908		13,172
Class M3, 0.8138% 12/25/36 (b)(g)	21,177		8,894
Class M4, 0.8738% 12/25/36 (b)(g)	25,376		10,150
Class M5, 0.9138% 12/25/36 (b)(g)	23,269		9,308
Class M6, 0.9938% 12/25/36 (b)(g)	20,908		11,621
Series 2007-1:
Class A2, 0.7438% 3/25/37 (b)(g)	80,916		46,527
Class B1, 1.1438% 3/25/37 (b)(g)	26,424		9,248
Class B2, 1.6238% 3/25/37 (b)(g)	19,111		6,068
Class B3, 3.8238% 3/25/37 (b)(g)	51,527		15,072
Class M1, 0.7438% 3/25/37 (b)(g)	23,054		12,507
Class M2, 0.7638% 3/25/37 (b)(g)	17,295		8,950
Class M3, 0.7938% 3/25/37 (b)(g)	15,401		7,700
Class M4, 0.8438% 3/25/37 (b)(g)	12,808		6,148
Class M5, 0.8938% 3/25/37 (b)(g)	19,266		8,670
Class M6, 0.9738% 3/25/37 (b)(g)	26,920		10,768
Series 2007-2A:
Class A1, 0.7438% 7/25/37 (b)(g)	71,708		43,383
Class A2, 0.7938% 7/25/37 (b)(g)	67,161		41,472
Class B1, 2.0738% 7/25/37 (b)(g)	21,044		6,681
Class B2, 2.7238% 7/25/37 (b)(g)	18,237		5,654
Class B3, 3.8238% 7/25/37 (b)(g)	20,510		6,153
Class M1, 0.8438% 7/25/37 (b)(g)	23,937		12,986
Class M2, 0.8838% 7/25/37 (b)(g)	13,432		6,951
Class M3, 0.9638% 7/25/37 (b)(g)	13,604		6,700
Class M4, 1.1238% 7/25/37 (b)(g)	26,192		10,935
Class M5, 1.2238% 7/25/37 (b)(g)	23,162		9,091
Class M6, 1.4738% 7/25/37 (b)(g)	29,396		10,803
Series 2007-3:
Class A2, 0.7638% 7/25/37 (b)(g)	118,990		88,386
Class B1, 1.4238% 7/25/37 (b)(g)	19,257		9,168
Class B2, 2.0738% 7/25/37 (b)(g)	47,506		22,622
Class B3, 4.4738% 7/25/37 (b)(g)	25,823		11,848
Class M1, 0.7838% 7/25/37 (b)(g)	17,138		9,948
Class M2, 0.8138% 7/25/37 (b)(g)	18,290		10,264
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust floater: - continued
Series 2007-3:
Class M3, 0.8438% 7/25/37 (b)(g)	$ 28,258		$ 14,912
Class M4, 0.9738% 7/25/37 (b)(g)	44,438		23,255
Class M5, 1.0738% 7/25/37 (b)(g)	23,588		12,113
Class M6, 1.2738% 7/25/37 (b)(g)	17,961		9,117
Series 2007-4A:
Class B1, 3.0238% 9/25/37 (b)(g)	26,271		8,341
Class B2, 3.9238% 9/25/37 (b)(g)	93,359		27,308
Class M1, 1.4238% 9/25/37 (b)(g)	25,142		12,571
Class M2, 1.5238% 9/25/37 (b)(g)	25,142		11,314
Class M4, 2.0738% 9/25/37 (b)(g)	62,804		25,122
Class M5, 2.2238% 9/25/37 (b)(g)	62,804		23,551
Class M6, 2.4238% 9/25/37 (b)(g)	62,892		22,012
Bear Stearns Commercial Mortgage Securities Trust:
floater:
Series 2006-BBA7:
Class G, 0.9013% 3/15/19 (b)(g)	91,801		52,391
Class H, 1.1113% 3/15/19 (b)(g)	61,770		27,797
Class J, 1.3113% 3/15/19 (b)(g)	46,405		18,562
Series 2007-BBA8:
Class D, 0.705% 3/15/22 (b)(g)	47,569		29,546
Class E, 0.755% 3/15/22 (b)(g)	247,020		144,850
Class F, 0.805% 3/15/22 (b)(g)	151,475		84,852
Class G, 0.855% 3/15/22 (b)(g)	38,931		21,158
Class H, 1.005% 3/15/22 (b)(g)	47,569		21,406
Class J, 1.155% 3/15/22 (b)(g)	47,569		19,028
Series 2003-T12 Class X2, 0.5161% 8/13/39 (b)(g)(i)	11,515,427		123,596
C-BASS Trust floater Series 2006-SC1 Class A, 0.7438% 5/25/36 (b)(g)	124,779		54,181
Citigroup Commercial Mortgage Trust:
floater Series 2006-FL2:
Class G, 0.785% 11/15/36 (b)(g)	50,634		15,697
Class H, 0.825% 11/15/36 (b)(g)	40,527		12,158
Series 2007-C6 Class A1, 5.622% 12/10/49 (g)	2,144,141		1,834,238
Citigroup/Deutsche Bank Commercial Mortgage Trust sequential payer Series 2006-CD3 Class A3, 5.607% 10/15/48	3,000,000		2,136,455
COMM pass-thru certificates floater:
Series 2005-F10A:
Class D, 0.765% 4/15/17 (b)(g)	108,291		51,232
Class E, 0.825% 4/15/17 (b)(g)	34,474		16,137
Class F, 0.865% 4/15/17 (b)(g)	19,555		8,663
Commercial Mortgage Securities - continued
	Principal Amount		Value
COMM pass-thru certificates floater: - continued
Series 2005-F10A:
Class G, 1.005% 4/15/17 (b)(g)	$ 19,555		$ 8,471
Class H, 1.075% 4/15/17 (b)(g)	19,555		7,985
Class J, 1.305% 4/15/17 (b)(g)	14,996		6,770
Series 2005-FL11:
Class F, 0.9113% 11/15/17 (b)(g)	44,319		14,808
Class G, 0.9613% 11/15/17 (b)(g)	30,720		9,576
Credit Suisse Commercial Mortgage Trust sequential payer Series 2007-C2 Class A1, 5.269% 1/15/49	450,653		439,267
Credit Suisse Mortgage Capital Certificates floater Series 2007-TFL1:
Class C:
0.6313% 2/15/22 (b)(g)	212,546		63,764
0.7313% 2/15/22 (b)(g)	75,912		18,978
Class F, 0.7813% 2/15/22 (b)(g)	151,805		33,397
Ginnie Mae guaranteed Multi-family REMIC pass-thru securities sequential payer Series 2002-35 Class C, 5.8718% 10/16/23 (g)	31,989		32,326
Ginnie Mae guaranteed REMIC pass-thru securities sequential payer:
Series 2003-47 Class C, 4.227% 10/16/27	1,694,176		1,702,217
Series 2003-59 Class D, 3.654% 10/16/27	3,060,000		3,035,906
GMAC Commercial Mortgage Securities, Inc. Series 2004-C3 Class X2, 0.6604% 12/10/41 (g)(i)	9,708,464		115,344
Greenwich Capital Commercial Funding Corp. Series 2006-GG7 Class A4, 5.9139% 7/10/38 (g)	960,000		668,510
GS Mortgage Securities Corp. II floater Series 2006-FL8A Class F, 0.885% 6/6/20 (b)(g)	95,176		54,250
JPMorgan Chase Commercial Mortgage Securities Trust floater Series 2006-FLA2:
Class D, 0.6913% 11/15/18 (b)(g)	26,312		12,367
Class E, 0.7413% 11/15/18 (b)(g)	37,286		16,779
Class F, 0.7913% 11/15/18 (b)(g)	55,923		24,606
Class G, 0.8213% 11/15/18 (b)(g)	48,602		20,413
Class H, 0.9613% 11/15/18 (b)(g)	37,286		14,915
LB-UBS Commercial Mortgage Trust sequential payer:
Series 2006-C7 Class A1, 5.279% 11/15/38	296,104		288,861
Series 2007-C2 Class A1, 5.226% 2/15/40	377,464		368,300
Lehman Brothers Floating Rate Commercial Mortgage Trust floater Series 2006-LLFA:
Class F, 0.795% 9/15/21 (b)(g)	130,294		53,559
Class G, 0.815% 9/15/21 (b)(g)	257,399		94,178
Class H, 0.855% 9/15/21 (b)(g)	66,405		22,966
Commercial Mortgage Securities - continued
	Principal Amount		Value
Morgan Stanley Capital I Trust:
floater:
Series 2006-XLF Class C, 1.662% 7/15/19 (b)(g)	$ 93,780		$ 9,378
Series 2007-XCLA Class A1, 0.662% 7/17/17 (b)(g)	312,375		171,806
Series 2007-XLCA Class B, 0.9613% 7/17/17 (b)(g)	177,809		16,003
Series 2007-XLFA:
Class D, 0.652% 10/15/20 (b)(g)	76,067		19,017
Class E, 0.712% 10/15/20 (b)(g)	95,138		19,028
Class F, 0.762% 10/15/20 (b)(g)	57,094		10,277
Class G, 0.802% 10/15/20 (b)(g)	70,577		10,587
Class H, 0.892% 10/15/20 (b)(g)	44,426		4,443
Class J, 1.042% 10/15/20 (b)(g)	50,712		4,057
Class MHRO, 1.152% 10/15/20 (b)(g)	20,614		2,268
Class MJPM, 1.462% 10/15/20 (b)(g)	6,975		628
Class MSTR, 1.162% 10/15/20 (b)(g)	12,707		1,779
Class NHRO, 1.352% 10/15/20 (b)(g)	30,105		2,709
Class NSTR, 1.312% 10/15/20 (b)(g)	11,834		1,302
Series 2007-XLC1:
Class C, 1.0613% 7/17/17 (b)(g)	242,693		19,415
Class D, 1.1613% 7/17/17 (b)(g)	114,195		7,994
Class E, 1.2613% 7/17/17 (b)(g)	92,798		5,568
STRIPS III Ltd./STRIPS III Corp. floater Series 2004-1A Class A, 0.9525% 3/24/18 (b)(g)	20,027		16,422
Wachovia Bank Commercial Mortgage Trust floater:
Series 2005-WL5A Class K, 1.655% 1/15/18 (b)(g)	145,481		80,015
Series 2006-WL7A:
Class E, 0.735% 9/15/21 (b)(g)	158,847		65,127
Class F, 0.795% 8/11/18 (b)(g)	214,060		64,218
Class G, 0.815% 8/11/18 (b)(g)	202,788		50,697
Class J, 0.9331% 8/11/18 (b)(g)	45,086		16,231
Class X1A, 0.0239% 9/15/21 (b)(g)(i)	322,727		2
Series 2007-WHL8:
Class AP1, 1.155% 6/15/20 (b)(g)	10,647		2,662
Class AP2, 1.255% 6/15/20 (b)(g)	17,436		3,487
Class F, 0.935% 6/15/20 (b)(g)	338,588		108,348
Class LXR2, 1.255% 6/15/20 (b)(g)	230,831		34,625
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $16,993,359)		15,271,784
Foreign Government and Government Agency Obligations - 0.1%
	Principal Amount		Value
Chilean Republic 7.125% 1/11/12 (Cost $673,964)	$ 613,000		$ 668,967
Supranational Obligations - 0.0%
Corporacion Andina de Fomento:
5.2% 5/21/13	49,000		43,103
6.875% 3/15/12	79,000		75,658
TOTAL SUPRANATIONAL OBLIGATIONS (Cost $119,410)		118,761
Bank Notes - 0.1%
National City Bank, Cleveland 2.3025% 3/1/13 (g) (Cost $692,668)	1,000,000		780,000

Fixed-Income Funds - 25.4%
	Shares
Fidelity 1-3 Year Duration Securitized Bond Central Fund (h)	361,343		25,630,041
Fidelity Commercial Mortgage-Backed Securities Central Fund (h)	987,552		67,153,521
Fidelity Corporate Bond 1-10 Year Central Fund (h)	859,752		76,285,794
Fidelity Corporate Bond 1-5 Year Central Fund (h)	111,069		10,217,217
Fidelity Specialized High Income Central Fund (h)	264,717		20,573,791
TOTAL FIXED-INCOME FUNDS (Cost $258,465,605)		199,860,364
Preferred Securities - 0.1%
	Principal Amount
FINANCIALS - 0.1%
Diversified Financial Services - 0.1%
ING Groep NV 5.775% (g)	$ 212,000		66,908
MUFG Capital Finance 1 Ltd. 6.346% (g)	932,000		583,379
TOTAL PREFERRED SECURITIES (Cost $690,964)		650,287
Cash Equivalents - 5.1%
	Maturity Amount		Value
Investments in repurchase agreements in a joint trading account at 0.26%, dated 2/27/09 due 3/2/09 (Collateralized by U.S. Government Obligations) # (Cost $40,231,000)	$ 40,231,868	$ 40,231,000
TOTAL INVESTMENT PORTFOLIO - 103.2% (Cost $890,405,843)		812,293,609
NET OTHER ASSETS - (3.2)%		(24,852,302)
NET ASSETS - 100%		$ 787,441,307

Swap Agreements
	Expiration Date		Notional Amount
Credit Default Swaps
Receive monthly notional amount multiplied by .52% and pay Bank of America upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R8 Class M6, 6.835% 9/25/34 (Rating-Caa2) (e)	Oct. 2034		$ 918,926	(638,237)
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R9 Class M5, 5.5913% 10/25/34 (Rating-Ba2) (e)	Nov. 2034		409,000	(378,805)
Receive monthly notional amount multiplied by 3.05% and pay Merrill Lynch upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8, Class B3, 7.2913% 9/25/34 (Rating-B1) (e)	Oct. 2034		119,687	(64,278)
Receive monthly notional amount multiplied by 5% and pay Deutsche Bank upon credit event of MASTR Asset Backed Securities Trust, par value of the notional amount of MASTR Asset Backed Securities Trust Series 2003-NC1 Class M6, 8.1913% 4/25/33 (Rating-Baa3) (e)	May 2033		409,000	(343,651)
Swap Agreements - continued
	Expiration Date		Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by 6.25% and pay Deutsche Bank upon credit event of Residential Asset Mortgage Products, Inc., par value of the notional amount of Residential Asset Mortgage Products, Inc. Series 2006-RS5, 7.17% 9/25/36 (Rating-C) (e)	Oct. 2036		$ 335,099	$ (323,462)
Receive monthly notional amount multiplied by 2.5% and pay Credit Suisse First Boston upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R11 Class M9, 8.03% 11/25/34 (Rating-C) (e)	Dec. 2034		248,360	(234,477)
Receive monthly notional amount multiplied by 3.35% and pay Morgan Stanley, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-HE7, Class B3, 9.01% 8/25/34 (Rating-C) (e)	Sept. 2034		119,548	(109,815)
Receive quarterly a fixed rate of .4% multiplied by the notional amount and pay to Merrill Lynch, Inc., upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 4 Index, par value of the proportional notional amount (Rating-Baa3) (f)	June 2010		9,760,000	(619,575)
Receive quarterly a fixed rate of .5% multiplied by the notional amount and pay to Merrill Lynch, Inc., upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 3 Index, par value of the proportional notional amount (Rating-Baa3) (f)	March 2010		6,219,400	(287,972)
Receive monthly notional amount multiplied by .8% and pay Deutsche Bank upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WCH1 Class M6, 6.365% 1/25/35 (Rating-Baa3) (e)	Feb. 2035		600,000	(565,808)
Swap Agreements - continued
	Expiration Date		Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by .82% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC6 Class M3, 5.6413% 7/25/34 (Rating-Baa2) (e)	August 2034		$ 98,734	$ (58,054)
Receive monthly notional amount multiplied by .85% and pay Deutsche Bank upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WHQ2 Class M6, 6.105% 5/25/35 (Rating-Caa2) (e)	June 2035		600,000	(568,952)
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8 Class M6, 5.4413% 9/25/34 (Rating-A3) (e)	Oct. 2034		122,388	(72,516)
Receive monthly notional amount multiplied by 2.54% and pay Merrill Lynch upon credit event of Countrywide Home Loans, Inc., par value of the notional amount of Countrywide Home Loans, Inc. Series 2003-BC1 Class B1, 7.6913% 3/25/32 (Rating-Baa3) (e)	April 2032		36,015	(29,267)
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-1 Class M9, 7.3913% 2/25/34 (Rating-Baa3) (e)	March 2034		21,052	(1,404)
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-A Class B3, 7.0413% 1/25/34 (Rating-Ba2) (e)	Feb. 2034		806	(762)
Swap Agreements - continued
	Expiration Date		Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by 3% and pay UBS upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2005-R4 Class M9, 7.07% 7/25/35 (Rating-Ca) (e)	August 2035		$ 700,000	$ (657,317)
Receive quarterly a fixed rate of .45% multiplied by the notional amount and pay to Goldman Sachs, upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 5 Index, par value of the proportional notional amount (Rating-Baa3) (f)	Dec. 2010		14,640,000	(1,013,091)
TOTAL CREDIT DEFAULT SWAPS			35,358,015	(5,967,443)
Interest Rate Swaps
Receive semi-annually a fixed rate equal to 3.475% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	Jan. 2013		25,000,000	1,072,963
Receive semi-annually a fixed rate equal to 3.567% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	May 2011		19,783,000	962,089
Receive semi-annually a fixed rate equal to 4.449% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	May 2018		6,931,000	727,141
Receive semi-annually a fixed rate equal to 4.94% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	March 2012		25,000,000	2,537,753
Receive semi-annually a fixed rate equal to 5.02% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	Nov. 2011		20,000,000	1,895,576
TOTAL INTEREST RATE SWAPS			96,714,000	7,195,522
		$ 132,072,015		$ 1,228,079

Legend

(a) Non-income producing - Issuer is in default.

(b) 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. At the end of the period, the value of these securities amounted to $53,780,352 or 6.8% of net assets.

(c) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(d) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $1,852,144.

(e) Represents a credit default swap contract in which the fund has sold protection on the underlying reference entity. For the underlying reference entity, ratings disclosed are from Moody's Investor Services, Inc. Where Moody's ratings are not available, S&P ratings are disclosed and are indicated as such. Any underlying reference entity which is Not Rated (NR) by Moody's or S&P is designated as such. All ratings are as of the report date and do not reflect subsequent changes.

(f) Represents a tradable index of credit default swaps on investment grade debt of U.S. companies. In addition, the swap represents a contract in which the fund has sold protection on the underlying securities within the index. Ratings represent a weighted average of the ratings of all securities included in the index. Ratings used in the weighted average are from Moody's Investor Services, Inc., or S&P where Moody's ratings are not available. All ratings are as of the report date and do not reflect subsequent changes.

(g) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(h) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements are available on the SEC's web site or upon request.

(i) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.

(j) Non-income producing

# Additional Information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value
$40,231,000 due 3/02/09 at 0.26%
Goldman, Sachs & Co.	$ 15,774,577
UBS Securities LLC	24,456,423
	$ 40,231,000

Affiliated Central Funds

Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:

Fund	Income earned
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ 692,998
Fidelity Commercial Mortgage-Backed Securities Central Fund	2,531,281
Fidelity Corporate Bond 1-10 Year Central Fund	7,257,245
Fidelity Corporate Bond 1-5 Year Central Fund	371,176
Fidelity Specialized High Income Central Fund	870,843
Fidelity Ultra-Short Central Fund	486,340
Total	$ 12,209,883

Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows:

Fund	Value, beginning of period	Purchases	Sales Proceeds	Value, end of period	% ownership, end of period
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ 47,438,002	$ 692,998	$ 17,316,138	$ 25,630,041	3.2%
Fidelity Commercial Mortgage-Backed Securities Central Fund	99,633,125	2,531,287	12,995,240	67,153,521	2.9%
Fidelity Corporate Bond 1-10 Year Central Fund	275,919,248	7,286,616	187,226,317*	76,285,794	3.1%
Fidelity Corporate Bond 1-5 Year Central Fund	18,814,985	371,176	7,835,596	10,217,217	2.9%
Fidelity Specialized High Income Central Fund	23,421,149	870,843	-	20,573,791	5.3%
Fidelity Ultra-Short Central Fund	68,380,155	-	57,552,245 *	-	0.0%
Total	$ 533,606,664	$ 11,752,920	$ 282,925,536	$ 199,860,364

* Includes the value of shares redeemed through in-kind contributions. See Note 6 of the Notes to Financial Statements.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Investments (Unaudited) - continued

Other Information

The following is a summary of the inputs used, as of February 28, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:
Description	Total	Level 1	Level 2	Level 3
Investments in Securities	$ 812,293,609	$ 199,860,364	$ 608,617,667	$ 3,815,578
Other Financial Instruments*	$ 1,228,079	$ -	$ 4,307,371	$ (3,079,292)

* Other financial instruments include Swap Agreements.

The following is a reconciliation of assets for which Level 3 inputs were used in determining value:

	Investments in Securities	Other Financial Instruments
Beginning Balance	$ 215,029	$ (6,691,180)
Total Realized Gain (Loss)	27,456	-*
Total Unrealized Gain (Loss)	987,424	3,696,575
Cost of Purchases	4,347,492	-
Proceeds of Sales	(87,523)	-
Amortization/Accretion	(1,674,300)	-
Transfer in/out of Level 3	-	(84,687)
Ending Balance	$ 3,815,578	$ (3,079,292)

* The realized gain (loss) for derivative instruments is not included in the rollforward. For the period, the realized gain (loss) on these instruments totaled $(313,172).

The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities or Other Financial Instruments identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period.

Income Tax Information

At August 31, 2008, the fund had a capital loss carryforward of approximately $16,598,133 of which $8,055,126 and $8,543,007 will expire on August 31, 2014 and 2016, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

	February 28, 2009 (Unaudited)
Assets
Investment in securities, at value (including repurchase agreements of $40,231,000) - See accompanying schedule: Unaffiliated issuers (cost $631,940,238)	$ 612,433,244
Fidelity Central Funds (cost $258,465,605)	199,860,365
Total Investments (cost $890,405,843)		$ 812,293,609
Cash		19,883
Receivable for investments sold		7,500,984
Receivable for swap agreements		20,391
Receivable for fund shares sold		1,096,558
Interest receivable		5,398,324
Distributions receivable from Fidelity Central Funds		1,614,214
Unrealized appreciation on swap agreements		7,195,522
Prepaid expenses		7,278
Other receivables		386,084
Total assets		835,532,847
Liabilities
Payable for investments purchased Regular delivery	$ 2,585,073
Delayed delivery	29,721,438
Payable for swap agreements	397,241
Payable for fund shares redeemed	8,299,497
Distributions payable	174,470
Unrealized depreciation on swap agreements	5,967,443
Accrued management fee	215,240
Distribution fees payable	148,488
Other affiliated payables	154,491
Other payables and accrued expenses	428,159
Total liabilities		48,091,540
Net Assets		$ 787,441,307
Net Assets consist of:
Paid in capital		$ 942,136,133
Distributions in excess of net investment income		(3,853,986)
Accumulated undistributed net realized gain (loss) on investments		(70,222,892)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		(80,617,948)
Net Assets		$ 787,441,307

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Assets and Liabilities - continued

	February 28, 2009 (Unaudited)
Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($178,558,265 ÷ 18,874,320 shares)		$ 9.46
Maximum offering price per share (100/97.25 of $9.46)		$ 9.73
Class T: Net Asset Value and redemption price per share ($276,605,549 ÷ 29,223,318 shares)		$ 9.47
Maximum offering price per share (100/97.25 of $9.47)		$ 9.74
Class B: Net Asset Value and offering price per share ($12,212,651 ÷ 1,292,263 shares)A		$ 9.45
Class C: Net Asset Value and offering price per share ($52,145,437 ÷ 5,522,571 shares)A		$ 9.44
Institutional Class: Net Asset Value, offering price and redemption price per share ($267,919,405 ÷ 28,255,622 shares)		$ 9.48

^A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

Six months ended February 28, 2009 (Unaudited)
Investment Income
Interest		$ 5,046,900
Income from Fidelity Central Funds		12,209,883
Total income		17,256,783
Expenses
Management fee	$ 1,347,083
Transfer agent fees	808,544
Distribution fees	909,970
Accounting and security lending fees	155,669
Custodian fees and expenses	11,932
Independent trustees' compensation	1,570
Registration fees	51,550
Audit	46,664
Legal	1,839
Miscellaneous	(22,867)
Total expenses before reductions	3,311,954
Expense reductions	(4,122)	3,307,832
Net investment income		13,948,951
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	6,050,025
Fidelity Central Funds	(54,109,453)
Swap agreements	(3,132,045)
Total net realized gain (loss)		(51,191,473)
Change in net unrealized appreciation (depreciation) on: Investment securities	(26,222,138)
Swap agreements	4,954,985
Total change in net unrealized appreciation (depreciation)		(21,267,153)
Net gain (loss)		(72,458,626)
Net increase (decrease) in net assets resulting from operations		$ (58,509,675)

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

	Six months ended February 28, 2009 (Unaudited)	Year ended August 31, 2008
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 13,948,951	$ 54,822,787
Net realized gain (loss)	(51,191,473)	(4,076,446)
Change in net unrealized appreciation (depreciation)	(21,267,153)	(24,788,132)
Net increase (decrease) in net assets resulting from operations	(58,509,675)	25,958,209
Distributions to shareholders from net investment income	(19,323,285)	(56,702,503)
Share transactions - net increase (decrease)	(126,015,790)	(533,888,338)
Total increase (decrease) in net assets	(203,848,750)	(564,632,632)
Net Assets
Beginning of period	991,290,057	1,555,922,689
End of period (including distributions in excess of net investment income of $3,853,986 and undistributed net investment income of $1,520,348, respectively)	$ 787,441,307	$ 991,290,057

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 J	2005 I	2004 I	2003 I
Selected Per-Share Data
Net asset value, beginning of period	$ 10.31	$ 10.64	$ 10.78	$ 10.87	$ 11.34	$ 11.32	$ 11.06
Income from Investment Operations
Net investment income E	.156	.457	.487	.385	.397	.385	.420
Net realized and unrealized gain (loss)	(.789)	(.319)	(.167)	(.043)	(.338)	.120	.254
Total from investment operations	(.633)	.138	.320	.342	.059	.505	.674
Distributions from net investment income	(.217)	(.468)	(.460)	(.382)	(.379)	(.385)	(.414)
Distributions from net realized gain	-	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.217)	(.468)	(.460)	(.432)	(.529)	(.485)	(.414)
Net asset value, end of period	$ 9.46	$ 10.31	$ 10.64	$ 10.78	$ 10.87	$ 11.34	$ 11.32
Total Return B, C, D	(6.13)%	1.28%	2.99%	3.23%	.54%	4.58%	6.16%
Ratios to Average Net Assets F, H
Expenses before reductions	.88% A	.85%	.79%	.75% A	.81%	.84%	.81%
Expenses net of fee waivers, if any	.88% A	.85%	.79%	.75% A	.81%	.84%	.81%
Expenses net of all reductions	.88% A	.85%	.78%	.74% A	.80%	.84%	.81%
Net investment income	3.25% A	4.32%	4.52%	4.30% A	3.60%	3.42%	3.72%
Supplemental Data
Net assets, end of period (000 omitted)	$ 178,558	$ 216,683	$ 255,591	$ 229,490	$ 219,441	$ 186,748	$ 166,701
Portfolio turnover rate G	101% A	81%	89% K	43% A	73%	96%	108%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower had certain expenses not been reduced during the periods shown. ^D Total returns do not include the effect of the sales charges. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I For the period ended October 31. ^J For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. ^K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class T

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 J	2005 I	2004 I	2003 I
Selected Per-Share Data
Net asset value, beginning of period	$ 10.32	$ 10.64	$ 10.79	$ 10.88	$ 11.35	$ 11.32	$ 11.06
Income from Investment Operations
Net investment income E	.158	.462	.484	.377	.386	.374	.408
Net realized and unrealized gain (loss)	(.788)	(.310)	(.178)	(.043)	(.338)	.130	.253
Total from investment operations	(.630)	.152	.306	.334	.048	.504	.661
Distributions from net investment income	(.220)	(.472)	(.456)	(.374)	(.368)	(.374)	(.401)
Distributions from net realized gain	-	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.220)	(.472)	(.456)	(.424)	(.518)	(.474)	(.401)
Net asset value, end of period	$ 9.47	$ 10.32	$ 10.64	$ 10.79	$ 10.88	$ 11.35	$ 11.32
Total Return B, C, D	(6.10)%	1.41%	2.85%	3.15%	.43%	4.56%	6.03%
Ratios to Average Net Assets F, H
Expenses before reductions	.82% A	.82%	.82%	.84% A	.91%	.95%	.93%
Expenses net of fee waivers, if any	.82% A	.82%	.82%	.84% A	.91%	.95%	.93%
Expenses net of all reductions	.82% A	.82%	.82%	.83% A	.91%	.95%	.93%
Net investment income	3.31% A	4.35%	4.48%	4.21% A	3.49%	3.32%	3.60%
Supplemental Data
Net assets, end of period (000 omitted)	$ 276,606	$ 344,229	$ 503,737	$ 563,677	$ 622,245	$ 680,947	$ 711,263
Portfolio turnover rate G	101% A	81%	89% K	43% A	73%	96%	108%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower had certain expenses not been reduced during the periods shown. ^D Total returns do not include the effect of the sales charges. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I For the period ended October 31. ^J For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. ^K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class B

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 J	2005 I	2004 I	2003 I
Selected Per-Share Data
Net asset value, beginning of period	$ 10.30	$ 10.63	$ 10.77	$ 10.86	$ 11.33	$ 11.31	$ 11.05
Income from Investment Operations
Net investment income E	.123	.385	.409	.316	.310	.295	.331
Net realized and unrealized gain (loss)	(.788)	(.318)	(.169)	(.043)	(.338)	.120	.253
Total from investment operations	(.665)	.067	.240	.273	(.028)	.415	.584
Distributions from net investment income	(.185)	(.397)	(.380)	(.313)	(.292)	(.295)	(.324)
Distributions from net realized gain	-	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.185)	(.397)	(.380)	(.363)	(.442)	(.395)	(.324)
Net asset value, end of period	$ 9.45	$ 10.30	$ 10.63	$ 10.77	$ 10.86	$ 11.33	$ 11.31
Total Return B, C, D	(6.45)%	.60%	2.24%	2.57%	(.25)%	3.75%	5.32%
Ratios to Average Net Assets F, H
Expenses before reductions	1.55% A	1.53%	1.52%	1.52% A	1.61%	1.66%	1.60%
Expenses net of fee waivers, if any	1.55% A	1.53%	1.52%	1.52% A	1.60%	1.65%	1.60%
Expenses net of all reductions	1.55% A	1.53%	1.52%	1.52% A	1.60%	1.65%	1.60%
Net investment income	2.58% A	3.64%	3.78%	3.52% A	2.80%	2.62%	2.92%
Supplemental Data
Net assets, end of period (000 omitted)	$ 12,213	$ 15,141	$ 22,609	$ 46,344	$ 73,017	$ 118,751	$ 154,697
Portfolio turnover rate G	101% A	81%	89% K	43% A	73%	96%	108%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower had certain expenses not been reduced during the periods shown. ^D Total returns do not include the effect of the contingent deferred sales charge. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I For the period ended October 31. ^J For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. ^K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class C

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 J	2005 I	2004 I	2003 I
Selected Per-Share Data
Net asset value, beginning of period	$ 10.29	$ 10.62	$ 10.76	$ 10.85	$ 11.32	$ 11.30	$ 11.04
Income from Investment Operations
Net investment income E	.120	.378	.400	.308	.301	.289	.322
Net realized and unrealized gain (loss)	(.788)	(.317)	(.167)	(.042)	(.337)	.120	.254
Total from investment operations	(.668)	.061	.233	.266	(.036)	.409	.576
Distributions from net investment income	(.182)	(.391)	(.373)	(.306)	(.284)	(.289)	(.316)
Distributions from net realized gain	-	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.182)	(.391)	(.373)	(.356)	(.434)	(.389)	(.316)
Net asset value, end of period	$ 9.44	$ 10.29	$ 10.62	$ 10.76	$ 10.85	$ 11.32	$ 11.30
Total Return B, C, D	(6.49)%	.54%	2.18%	2.51%	(.33)%	3.70%	5.26%
Ratios to Average Net Assets F, H
Expenses before reductions	1.62% A	1.59%	1.59%	1.60% A	1.67%	1.70%	1.67%
Expenses net of fee waivers, if any	1.62% A	1.59%	1.59%	1.60% A	1.67%	1.70%	1.67%
Expenses net of all reductions	1.62% A	1.59%	1.58%	1.60% A	1.67%	1.70%	1.67%
Net investment income	2.52% A	3.58%	3.72%	3.45% A	2.73%	2.57%	2.86%
Supplemental Data
Net assets, end of period (000 omitted)	$ 52,145	$ 52,529	$ 58,693	$ 63,946	$ 74,522	$ 91,149	$ 113,849
Portfolio turnover rate G	101% A	81%	89% K	43% A	73%	96%	108%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower had certain expenses not been reduced during the periods shown. ^D Total returns do not include the effect of the contingent deferred sales charge. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I For the period ended October 31. ^J For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. ^K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Institutional Class

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 I	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.34	$ 10.66	$ 10.80	$ 10.89	$ 11.36	$ 11.34	$ 11.08
Income from Investment Operations
Net investment income D	.173	.494	.513	.401	.417	.400	.437
Net realized and unrealized gain (loss)	(.800)	(.311)	(.169)	(.043)	(.339)	.122	.254
Total from investment operations	(.627)	.183	.344	.358	.078	.522	.691
Distributions from net investment income	(.233)	(.503)	(.484)	(.398)	(.398)	(.402)	(.431)
Distributions from net realized gain	-	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.233)	(.503)	(.484)	(.448)	(.548)	(.502)	(.431)
Net asset value, end of period	$ 9.48	$ 10.34	$ 10.66	$ 10.80	$ 10.89	$ 11.36	$ 11.34
Total Return B, C	(6.05)%	1.71%	3.22%	3.37%	.71%	4.72%	6.30%
Ratios to Average Net Assets E, G
Expenses before reductions	.54% A	.53%	.55%	.57% A	.63%	.70%	.66%
Expenses net of fee waivers, if any	.54% A	.53%	.55%	.57% A	.63%	.70%	.66%
Expenses net of all reductions	.54% A	.53%	.55%	.57% A	.63%	.70%	.66%
Net investment income	3.60% A	4.64%	4.75%	4.48% A	3.77%	3.57%	3.87%
Supplemental Data
Net assets, end of period (000 omitted)	$ 267,919	$ 362,708	$ 715,292	$ 582,070	$ 465,201	$ 269,727	$ 155,302
Portfolio turnover rate F	101% A	81%	89% J	43% A	73%	96%	108%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower had certain expenses not been reduced during the periods shown. ^D Calculated based on average shares outstanding during the period. ^E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. ^F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^H For the period ended October 31. ^I For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. ^J Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Notes to Financial Statements

For the period ended February 28, 2009 (Unaudited)

1. Organization.

Fidelity Advisor Intermediate Bond Fund (the Fund) is a fund of Fidelity Advisor Series II (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of four years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

2. Investments in Fidelity Central Funds.

The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.

Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.

Fidelity Central Fund	Investment Manager	Investment Objective	Investment Practices
Fidelity 1-3 Year Duration Securitized Bond Central Fund	Fidelity Investment Money Management, Inc. (FIMM)	Seeks a high level of income by normally investing in investment-grade securitized debt securities and repurchase agreements for those securities.	Futures Repurchase Agreements Restricted Securities Swap Agreements

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2. Investments in Fidelity Central Funds - continued

Fidelity Central Fund	Investment Manager	Investment Objective	Investment Practices
Fidelity Commercial Mortgage-Backed Securities Central Fund	FIMM	Seeks a high level of income by normally investing in investment-grade commercial mortgage-backed securities and repurchase agreements for those securities.	Futures Repurchase Agreements Restricted Securities Swap Agreements
Fidelity Corporate Bond 1-5 Year Central Fund	FIMM	Seeks a high level of income by normally investing in investment-grade corporate bonds and other corporate debt securities and repurchase agreements for those securities.	Repurchase Agreements Restricted Securities Swap Agreements
Fidelity Corporate Bond 1-10 Year Central Fund	FIMM	Seeks a high level of income by normally investing in investment-grade corporate bonds and other corporate debt securities and repurchase agreements for those securities.	Delayed Delivery & When Issued Securities Repurchase Agreements Restricted Securities Swap Agreements
Fidelity Specialized High Income Central Fund	Fidelity Management & Research Company, Inc. (FMRC)	Seeks a high level of current income by normally investing in income-producing debt securities, with an emphasis on lower-quality debt securities.	Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities

An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds are available on the SEC's web site or upon request.

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Notes to Financial Statements (Unaudited) - continued

3. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Fund uses independent pricing services approved by the Board of Trustees to value its investments.

Debt securities, including restricted securities, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Swaps are marked-to-market daily based on valuations from independent pricing services or dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value. Actual prices received at disposition may differ.

When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.

The Fund adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in

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3. Significant Accounting Policies - continued

Security Valuation - continued

active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:

Level 1	Quoted prices in active markets for identical securities.
Level 2	Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3	Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.

The aggregate value by input level, as of February 28, 2009, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted to the rate of inflation. Interest is accrued based on the principal value, which is adjusted for inflation. Any increase in the principal amount of an inflation-indexed bond is recorded as interest income, even though principal is not received until maturity. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.

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Notes to Financial Statements (Unaudited) - continued

3. Significant Accounting Policies - continued

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years.

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to swap agreements, prior period premium and discount on debt securities, market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation	$ 7,729,686
Unrealized depreciation	(85,083,117)
Net unrealized appreciation (depreciation)	$ (77,353,431)
Cost for federal income tax purposes	$ 889,647,040

New Accounting Pronouncement. In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for reporting periods beginning after

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3. Significant Accounting Policies - continued

New Accounting Pronouncement - continued

November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance.

4. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Delayed Delivery Transactions and When-Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.

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Notes to Financial Statements (Unaudited) - continued

4. Operating Policies - continued

Swap Agreements. The Fund entered into swap agreements, which are contracts between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Gains or losses are realized in the event of an early termination of a swap agreement. Risks of loss may exceed amounts recognized on the Fund's Statement of Asset and Liabilities. Risks of loss may include unfavorable changes in the returns of the underlying instruments or indexes, adverse fluctuations of interest rates, failure of the counterparty to perform under the terms of the agreement and lack of liquidity in the market. Details of swap agreements open at period end are included in the Fund's Schedule of Investments under the caption "Swap Agreements." Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian bank in accordance with the swap agreement and if required, is identified in the Fund's Schedule of Investments. The Fund could experience delays and costs in gaining access to the collateral even though it is held in the Fund's custodian bank.

The Fund entered into interest rate swap agreements to manage its exposure to interest rate changes. Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates (e.g. fixed rate, floating rate), applied to a notional principal amount. Changes in interest rates can have a negative effect on both the value of the Fund's bond holdings as well as the amount of interest income earned. In general, the value of bonds can fall when interest rates rise and can rise when interest rates fall.

The Fund entered into credit default swap agreements to provide a measure of protection against defaults of an issuer ("buyer of protection") and/or to gain credit exposure to an issuer to which it is not otherwise exposed ("seller of protection"). The issuer may be either a single issuer or a "basket" of issuers. As a buyer of protection, the Fund does so when it holds bonds of the issuer or without owning the underlying asset or debt issued by the reference entity. Under the terms of a credit default swap the buyer of protection (buyer) receives credit protection in exchange for making periodic payments to the seller of protection (seller) based on a fixed percentage applied to a notional principal amount. In return for these payments, the seller acts as a guarantor of the credit worthiness of a reference obligation. Any upfront payments made or received upon entering a credit default swap contract would be amortized or accreted over the life of the swap and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Periodic payments are made over the life of the contract provided that no credit event occurs. For credit default swaps on asset-backed securities, a credit event may be triggered by events such as failure to pay principal, maturity extension, rating downgrade or write-down. For credit default swaps on corporate or sovereign issuers, a credit event

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4. Operating Policies - continued

Swap Agreements - continued

may be triggered by events such as bankruptcy, failure to pay, obligation acceleration, repudiation/moratorium or restructuring. If a credit event were to occur during the term of the contract, upon notification from the buyer, the seller is obligated to take delivery from the buyer the notional amount of a reference obligation, at par. The difference between the value of the obligation received and the notional amount paid is recorded as a realized loss to the seller. For credit default swaps on asset-backed securities, the reference obligation described represents the security that will be put to the seller. For credit default swaps on corporate or sovereign issuers, under the terms of the agreement, the obligation that is put to the seller is not limited to the specific reference obligation described in the Fund's Schedule of Investments.

The notional amount of credit default swaps is included in the Fund's Schedule of Investments and approximates the maximum potential amount of future payments that the Fund could be required to make if the Fund is the seller of protection and a credit event were to occur. The total notional amount of all credit default swaps open at period end where the Fund is the seller of protection amounted to $35,358,015 representing 4.5% of net assets.

The value of each credit default swap and credit rating disclosed for each reference obligation in the Fund's Schedule of Investments, where the Fund is the seller of protection, are both measures of the current payment/performance risk of the swap. As the value of the swap changes as a positive or negative percentage of the total notional amount, the payment/performance risk may decrease or increase, respectively. Any current or future declines in the value of the swap may be partially offset by upfront payments received by the Fund as the seller of protection if applicable. In addition to these measures, FMR monitors a variety of factors including cash flow assumptions, market activity and market sentiment as part of its ongoing process of assessing payment/performance risk.

5. Purchases and Sales of Investments.

Purchases and sales of securities (including the Fixed-Income Central Funds), other than short-term securities and U.S. government securities, aggregated $212,776,810 and $295,187,861, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20%

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Notes to Financial Statements (Unaudited) - continued

6. Fees and Other Transactions with Affiliates - continued

Management Fee - continued

of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .32% of the Fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

	Distribution Fee	Service Fee	Paid to FDC	Retained by FDC
Class A	-%	.25%	$ 235,054	$ 11,775
Class T	-%	.25%	369,055	4,792
Class B	.65%	.25%	58,168	42,207
Class C	.75%	.25%	247,693	20,688
			$ 909,970	$ 79,462

Sales Load. FDC receives a front-end sales charge of up to 2.75% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 3% to 1% for Class B, 1% for Class C, ..75% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

	Retained by FDC
Class A	$ 8,150
Class T	3,751
Class B*	16,446
Class C*	2,568
	$ 30,915

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

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6. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class were as follows:

	Amount	% of Average Net Assets*
Class A	$ 230,962	.25
Class T	277,113	.19
Class B	16,671	.26
Class C	55,193	.23
Institutional Class	228,605	.16
	$ 808,544

* Annualized

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Other Affiliated Transactions. On January 23, 2009, Fidelity Ultra-Short Central Fund ("Ultra-Short"), a Fidelity Central Fund in which the Fund invests, was liquidated pursuant to a Plan of Liquidation and Dissolution approved by its Board of Trustees on January 15, 2009. Under the plan, Ultra-Short distributed in-kind all of its net assets to its shareholders pro-rata at its net asset value (NAV) per share of $62.53 determined as of the close of business on the liquidation date. As a result, the Fund received cash and securities, including accrued interest, of $34,413,111 in return for its 550,378 shares of Ultra-Short. This is considered taxable to the Fund for federal income tax purposes.

On February 20, 2009, the Fund redeemed in-kind 1,969,867 shares of Fidelity Corporate Bond 1-10 Year Central Fund, a Fidelity Central Fund in which the Fund invests, valued at $177,302,227 by receiving cash and securities of equal value, including accrued interest. This is considered taxable to the Fund for federal income tax purposes.

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Notes to Financial Statements (Unaudited) - continued

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $2,634 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. Security Lending.

The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in cash equivalents. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of interest income. Net income from lending portfolio securities during the period amounted to $15,671.

9. Expense Reductions.

Through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $3,909. During the period, credits reduced each class' transfer agent expense as noted in the table below.

	Transfer Agent expense reduction
Class A	$ 213

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10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

	Six months ended February 28, 2009	Year ended August 31, 2008
From net investment income
Class A	$ 4,243,609	$ 11,114,337
Class T	6,734,581	19,685,484
Class B	248,969	698,735
Class C	935,568	2,134,294
Institutional Class	7,160,558	23,069,653
Total	$ 19,323,285	$ 56,702,503

11. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class A
Shares sold	3,280,847	7,478,814	$ 31,664,251	$ 79,389,123
Reinvestment of distributions	385,525	913,344	3,670,163	9,656,597
Shares redeemed	(5,801,511)	(11,412,910)	(55,761,991)	(120,176,822)
Net increase (decrease)	(2,135,139)	(3,020,752)	$ (20,427,577)	$ (31,131,102)
Class T
Shares sold	4,482,202	10,443,380	$ 43,382,649	$ 110,997,567
Reinvestment of distributions	674,655	1,758,963	6,428,526	18,626,931
Shares redeemed	(9,293,195)	(26,180,797)	(89,999,382)	(277,194,128)
Net increase (decrease)	(4,136,338)	(13,978,454)	$ (40,188,207)	$ (147,569,630)
Class B
Shares sold	355,157	542,893	$ 3,421,658	$ 5,772,343
Reinvestment of distributions	23,233	58,357	220,987	616,990
Shares redeemed	(555,693)	(1,259,274)	(5,368,914)	(13,340,826)
Net increase (decrease)	(177,303)	(658,024)	$ (1,726,269)	$ (6,951,493)
Class C
Shares sold	1,452,272	1,247,916	$ 13,932,508	$ 13,263,460
Reinvestment of distributions	81,074	166,125	770,048	1,753,152
Shares redeemed	(1,113,482)	(1,839,485)	(10,695,243)	(19,383,480)
Net increase (decrease)	419,864	(425,444)	$ 4,007,313	$ (4,366,868)
Institutional Class
Shares sold	2,602,480	4,941,786	$ 25,200,052	$ 52,330,544
Reinvestment of distributions	717,438	2,074,699	6,849,721	22,020,750
Shares redeemed	(10,154,024)	(39,037,602)	(99,730,823)	(418,220,539)
Net increase (decrease)	(6,834,106)	(32,021,117)	$ (67,681,050)	$ (343,869,245)

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

12. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

The Fidelity Advisor Freedom Funds were the owners of record, in the aggregate, of approximately 25% of the total outstanding shares of the Fund. Subsequent to period end, the Fidelity Advisor Freedom Funds sold all their shares of the Fund.

Effective after the close of business on April 17, 2009, the Fidelity Commercial Mortgage-Backed Securities Central Fund ("CMBS"), a Fidelity Central Fund in which the Fund invests, was liquidated pursuant to a Plan of Liquidation and Dissolution approved by its Board of Directors in March 2009. Under the plan, the Fund received in-kind its pro-rata portion of CMBS' net assets.

In March 2009, the Board of Directors of the Fidelity 1-3 Year Duration Securitized Bond Central Fund ("1-3 Year"), a Fidelity Central Fund in which the Fund invests, approved a Plan of Liquidation and Dissolution. Under the plan, 1-3 Year will distribute in-kind all of its net assets to its shareholders pro-rata at the NAV per share of 1-3 Year determined as of the close of business on or about June 19, 2009.

13. Credit Risk.

The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers backed by residential mortgage loans, credit card receivables and automotive loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Research & Analysis Company

Fidelity Investments Money
Management, Inc.

FIL Investment Advisors

FIL Investment Advisors
(U.K.) Ltd.

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York Mellon

New York, NY

LTBI-USAN-0409
1.784889.106

(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Mortgage Securities
Fund - Class A, Class T, Class B
and Class C

Semiannual Report

February 28, 2009

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message	<Click Here>	Ned Johnson's message to shareholders.
Shareholder Expense Example	<Click Here>	An example of shareholder expenses.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.

One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.

You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).

A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.

We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2008 to February 28, 2009).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio	Beginning Account Value September 1, 2008	Ending Account Value February 28, 2009	Expenses Paid During Period* September 1, 2008 to February 28, 2009
Class A	.86%
Actual		$ 1,000.00	$ 1,015.40	$ 4.30
HypotheticalA		$ 1,000.00	$ 1,020.53	$ 4.31
Class T	.86%
Actual		$ 1,000.00	$ 1,015.40	$ 4.30
HypotheticalA		$ 1,000.00	$ 1,020.53	$ 4.31
Class B	1.51%
Actual		$ 1,000.00	$ 1,012.10	$ 7.53
HypotheticalA		$ 1,000.00	$ 1,017.31	$ 7.55
Class C	1.61%
Actual		$ 1,000.00	$ 1,011.70	$ 8.03
HypotheticalA		$ 1,000.00	$ 1,016.81	$ 8.05
Fidelity Mortgage Securities Fund	.45%
Actual		$ 1,000.00	$ 1,017.40	$ 2.25
HypotheticalA		$ 1,000.00	$ 1,022.56	$ 2.26
Institutional Class	.53%
Actual		$ 1,000.00	$ 1,017.10	$ 2.65
HypotheticalA		$ 1,000.00	$ 1,022.17	$ 2.66

^A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Coupon Distribution as of February 28, 2009
	% of fund's investments	% of fund's investments 6 months ago
Less than 4%	5.6	5.2
4 - 4.99%	6.5	7.7
5 - 5.99%	45.2	44.9
6 - 6.99%	35.3	30.8
7% and over	5.2	4.9

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments.

Weighted Average Maturity as of February 28, 2009
		6 months ago
Years	3.5	5.2

The weighted average maturity is based on the dollar-weighted average length of time until principal payments are expected or until securities reach maturity, taking into account any maturity shortening feature such as a call, refunding or redemption provision.

Duration as of February 28, 2009
		6 months ago
Years	2.1	4.3

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)
As of February 28, 2009 *		As of August 31, 2008 **
	Mortgage Securities 115.1%		Mortgage Securities 106.4%
	CMOs and Other Mortgage Related Securities 19.7%		CMOs and Other Mortgage Related Securities 20.0%
	Asset-Backed Securities 4.8%		Asset-Backed Securities 5.1%
	Short-Term Investments and Net Other Assets† (39.6)%		Short-Term Investments and Net Other Assets† (31.5)%

* Foreign investments	0.7%	** Foreign investments	1.3%
* Futures and Swaps	(4.4)%	** Futures and Swaps	(8.8)%

^† Short-Term Investments and Net Other Assets are not included in the pie chart.

Semiannual Report

Investments February 28, 2009 (Unaudited)

Showing Percentage of Net Assets

U.S. Government Agency - Mortgage Securities - 115.1%
	Principal Amount (000s)		Value (000s)
Fannie Mae - 67.1%
3.575% 1/1/32 (g)	$ 144		$ 144
4.162% 1/1/35 (g)	1,899		1,921
4.303% 3/1/33 (g)	86		87
4.328% 1/1/35 (g)	2,246		2,261
4.34% 1/1/35 (g)	210		213
4.423% 5/1/35 (g)	129		130
4.432% 3/1/35 (g)	303		308
4.456% 7/1/35 (g)	931		926
4.5% 10/1/19 to 9/1/31 (c)	22,840		23,194
4.5% 3/12/39 (b)(c)	12,000		12,032
4.548% 10/1/33 (g)	135		136
4.55% 10/1/35 (g)	1,179		1,195
4.583% 8/1/34 (g)	473		479
4.667% 7/1/35 (g)	173		176
4.7% 2/1/35 (g)	1,001		1,018
4.739% 8/1/35 (g)	741		752
4.742% 12/1/34 (g)	170		172
4.747% 4/1/35 (g)	65		66
4.752% 10/1/35 (g)	2,636		2,674
4.823% 12/1/35 (g)	1,812		1,836
4.846% 4/1/33 (g)	1,653		1,676
4.87% 7/1/35 (g)	1,060		1,087
4.933% 1/1/35 (g)	537		544
4.933% 7/1/35 (g)	45		47
4.987% 7/1/35 (g)	3,088		3,141
5% 9/1/16 to 7/1/38 (c)(e)	90,595		92,538
5% 3/12/39 (b)	9,000		9,156
5.048% 1/1/37 (g)	1,270		1,297
5.095% 7/1/34 (g)	357		359
5.141% 5/1/35 (g)	124		126
5.16% 10/1/18 (g)	77		78
5.174% 8/1/34 (g)	1,053		1,071
5.198% 3/1/35 (g)	110		110
5.265% 12/1/36 (g)	543		555
5.307% 7/1/35 (g)	760		786
5.328% 6/1/36 (g)	1,818		1,886
5.336% 7/1/35 (g)	436		446
5.342% 2/1/37 (g)	561		575
5.481% 6/1/32 (g)	341		343
5.5% 6/1/11 to 5/1/38 (c)	97,371		100,354
5.5% 3/17/24 (b)	2,000		2,073
5.5% 3/17/24 (b)	2,000		2,073
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
5.5% 3/17/24 (b)	$ 6,800		$ 7,050
5.5% 3/12/39 (b)	20,000		20,489
5.5% 3/12/39 (b)	7,000		7,171
5.5% 3/12/39 (b)(c)	50,500		51,734
5.5% 3/12/39 (b)(c)	14,500		14,854
5.573% 10/1/36 (g)	285		296
5.658% 6/1/36 (g)	1,414		1,463
5.77% 3/1/36 (g)	3,223		3,341
5.798% 1/1/36 (g)	563		586
5.806% 11/1/36 (g)	886		906
5.819% 9/1/36 (g)	873		888
5.823% 7/1/36 (g)	609		634
5.845% 3/1/36 (g)	1,849		1,926
5.851% 3/1/36 (g)	1,492		1,545
5.952% 4/1/36 (g)	398		413
5.952% 9/1/36 (g)	781		813
5.954% 5/1/36 (g)	565		587
6% 3/1/09 to 11/1/37 (c)	109,977		114,484
6% 9/1/36 (g)	663		691
6% 3/12/39 (b)(c)	18,000		18,594
6% 3/12/39 (b)(c)	62,000		64,046
6.008% 4/1/36 (g)	6,024		6,258
6.091% 9/1/36 (g)	640		667
6.118% 4/1/36 (g)	869		904
6.192% 2/1/35 (g)	104		106
6.198% 5/1/37 (g)	83		87
6.226% 5/1/36 (g)	1,844		1,920
6.241% 6/1/36 (g)	3,144		3,275
6.243% 6/1/36 (g)	137		139
6.245% 8/1/46 (g)	320		334
6.346% 5/1/36 (g)	1,315		1,371
6.433% 4/1/37 (g)	964		1,006
6.499% 12/1/36 (g)	204		212
6.5% 5/1/12 to 9/1/47 (c)	58,235		61,262
6.5% 3/12/39 (b)	1,000		1,045
6.555% 12/1/36 (g)	285		298
6.784% 9/1/37 (g)	1,489		1,554
6.862% 9/1/37 (g)	676		705
6.946% 9/1/37 (g)	536		559
7% 12/1/15 to 7/1/37	9,014		9,597
7.075% 9/1/37 (g)	720		752
7.5% 8/1/22 to 5/1/37	13,539		14,380
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
8% 12/1/29 to 3/1/37	$ 176		$ 186
8.5% 1/1/16 to 7/1/31	218		236
9% 2/1/13 to 10/1/30	536		583
9.5% 11/1/09 to 8/1/22	80		88
11% 8/1/10	9		9
12.25% 5/1/15	14		16
12.5% 8/1/15 to 3/1/16	17		20
12.75% 2/1/15	4		4
13.5% 9/1/14	3		4
			690,129
Freddie Mac - 36.0%
3.456% 2/1/34 (g)	166		166
3.741% 5/1/34 (g)	31		32
4.275% 6/1/35 (g)	283		287
4.315% 12/1/34 (g)	229		233
4.329% 11/1/31 (g)	62		62
4.407% 3/1/35 (g)	286		290
4.471% 3/1/35 (g)	256		259
4.546% 3/1/34 (g)	2,392		2,422
4.569% 12/1/33 (g)	1,036		1,044
4.58% 6/1/33 (g)	2,020		2,062
4.709% 11/1/35 (g)	935		947
4.789% 2/1/36 (g)	254		260
4.801% 3/1/35 (g)	499		504
5% 6/1/18 to 6/1/38 (c)	35,899		36,599
5% 3/12/39 (b)	2,000		2,032
5% 3/12/39 (b)	5,000		5,079
5.023% 4/1/35 (g)	140		144
5.158% 10/1/33 (g)	1,647		1,674
5.288% 3/1/35 (g)	174		175
5.443% 4/1/37 (g)	365		374
5.5% 6/1/09 to 1/1/38	42,700		43,987
5.5% 3/12/39 (b)	18,000		18,436
5.5% 3/12/39 (b)(c)	18,000		18,436
5.5% 3/12/39 (b)(c)	18,000		18,436
5.5% 3/12/39 (b)(c)	23,000		23,557
5.5% 4/13/39 (b)	23,000		23,495
5.5% 4/13/39 (b)	18,000		18,388
5.5% 4/13/39 (b)	18,000		18,387
5.548% 1/1/37 (g)	1,842		1,886
5.694% 10/1/35 (g)	246		257
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac - continued
5.757% 3/1/37 (g)	$ 1,966		$ 1,994
5.78% 4/1/37 (g)	1,896		1,944
5.812% 6/1/37 (g)	1,532		1,588
5.834% 5/1/37 (g)	585		599
5.948% 4/1/36 (g)	1,277		1,322
6% 4/1/14 to 7/1/37	38,372		40,064
6% 3/1/39 (b)	8,500		8,799
6.006% 6/1/36 (g)	576		598
6.098% 4/1/37 (g)	596		621
6.139% 10/1/36 (g)	130		136
6.142% 12/1/36 (g)	877		912
6.169% 7/1/36 (g)	3,267		3,392
6.181% 5/1/36 (g)	545		565
6.228% 3/1/36 (g)	2,926		3,049
6.303% 7/1/36 (g)	587		609
6.362% 10/1/36 (g)	3,289		3,425
6.416% 12/1/36 (g)	1,587		1,654
6.418% 6/1/37 (g)	167		174
6.5% 4/1/11 to 8/1/47	26,126		27,474
6.581% 12/1/36 (g)	3,755		3,918
6.594% 1/1/37 (g)	1,853		1,934
6.619% 6/1/37 (g)	187		195
6.625% 7/1/36 (g)	2,758		2,878
6.644% 6/1/36 (g)	389		406
6.65% 8/1/37 (g)	1,169		1,217
6.837% 10/1/36 (g)	2,346		2,447
7% 6/1/21 to 9/1/36	6,264		6,648
7.128% 2/1/37 (g)	256		267
7.5% 11/1/10 to 4/1/37	10,442		11,061
7.524% 4/1/37 (g)	122		127
8% 11/1/16 to 1/1/37	245		258
8.5% 7/1/09 to 9/1/20	25		27
9% 7/1/13 to 5/1/21	206		222
10% 6/1/09 to 5/1/19	40		43
10.5% 8/1/10 to 2/1/16	3		3
12.5% 10/1/12 to 12/1/14	27		29
13% 12/1/13 to 6/1/15	60		68
			370,577
Government National Mortgage Association - 12.0%
4.5% 3/18/39 (b)	12,000		12,045
5% 1/20/33 to 2/20/39	9,988		10,205
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Government National Mortgage Association - continued
5.5% 3/18/39 (b)	$ 13,000		$ 13,331
5.5% 3/18/39 (b)	1,000		1,027
5.5% 3/18/39 (b)	18,000		18,458
5.5% 3/18/39 (b)	300		308
5.5% 3/18/39 (b)	14,000		14,379
5.5% 3/18/39 (b)	4,000		4,102
5.5% 3/18/39 (b)	3,000		3,076
6% 1/15/36	7,770		8,075
6% 3/18/39 (b)	10,000		10,327
6% 3/18/39 (b)	14,000		14,457
6.5% 5/15/28 to 7/15/36	7,158		7,526
7% 2/15/24 to 7/15/32	3,335		3,542
7.5% 9/15/16 to 4/15/32	1,142		1,202
8% 6/15/21 to 12/15/25	451		480
8.5% 8/15/16 to 10/15/28	638		691
9% 11/20/17	2		2
10.5% 12/20/15 to 2/20/18	56		64
13.5% 7/15/11	2		2
			123,299
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $1,164,697)		1,184,005
Asset-Backed Securities - 4.8%
Ameriquest Mortgage Securities, Inc. Series 2006-M3 Class A2A, 0.5238% 10/25/36 (g)	158		153
Ameriquest Mortgage Securities, Inc. pass-thru certificates Series 2005-R10 Class A2B, 0.6938% 12/25/35 (g)	522		358
Argent Securities, Inc. Series 2006-M2 Class A2A, 0.5238% 9/25/36 (g)	197		195
Bear Stearns Asset Backed Securities I Trust:
Series 2005-AQ2 Class M7, 2.1238% 9/25/35 (g)	335		1
Series 2005-FR1 Class M1, 0.9738% 6/25/35 (g)	600		273
Series 2006-HE1 Class 1A2, 0.6938% 12/25/35 (g)	3,574		2,853
Series 2007-HE3 Class 1A1, 0.5938% 4/25/37 (g)	565		432
C-BASS Trust Series 2006-CB7 Class A2, 0.5338% 10/25/36 (g)	306		263
Capital Auto Receivables Asset Trust Series 2007-SN1 Class D, 6.05% 1/17/12	970		485
Citigroup Mortgage Loan Trust:
Series 2006-HE2 Class A2A, 0.5238% 8/26/36 (g)	13		13
Asset-Backed Securities - continued
	Principal Amount (000s)		Value (000s)
Citigroup Mortgage Loan Trust: - continued
Series 2006-NC2 Class A2A, 0.5138% 9/25/36 (g)	$ 51		$ 50
Series 2006-WF2 Class A2B, 5.735% 5/25/36	255		250
Countrywide Asset-Backed Certificates Trust:
Series 2006-13 Class 1AF1, 0.5938% 1/25/37 (g)	49		46
Series 2007-11 Class 2A1, 0.5338% 6/25/47 (g)	4,178		3,708
Series 2007-4 Class A1A, 0.5938% 9/25/37 (g)	3,346		3,020
Series 2007-5 Class 2A1, 0.5738% 4/25/29 (g)	2,080		1,800
Series 2007-BC2 Class 2A1, 0.5638% 6/25/37 (g)	629		536
First Franklin Mortgage Loan Trust Series 2006-FF5 Class 2A2, 0.5838% 4/25/36 (g)	354		324
Ford Credit Auto Owner Trust:
Series 2006-C Class D, 6.89% 5/15/13 (a)	715		356
Series 2007-A Class D, 7.05% 12/15/13 (a)	350		175
Fremont Home Loan Trust Series 2006-3 Class 2A1, 0.5438% 2/25/37 (g)	12		11
GSAMP Trust:
Series 2004-AR1 Class B4, 5% 6/25/34 (a)(g)	160		13
Series 2004-AR2 Class B1, 2.3738% 8/25/34 (g)	796		35
GSR Mortgage Loan Trust Series 2006-6 Class AV1, 0.4594% 3/25/36 (g)	25		24
Helios Finance L.P. Series 2007-S1 Class B1, 1.17% 10/20/14 (a)(g)	2,325		1,186
Home Equity Asset Trust Series 2006-8 Class 2A1, 0.5238% 3/25/37 (g)	42		36
JPMorgan Mortgage Acquisition Trust Series 2006-WF1:
Class A1A, 5.6% 7/25/36	25		25
Class A1B, 0.5738% 7/25/36 (g)	199		196
Leafs CMBS I Ltd. Series 2002-1A Class D, 4.13% 11/20/37 (a)	10,820		4,112
Long Beach Mortgage Loan Trust:
Series 2005-WL1 Class M2, 1.0238% 6/25/35 (g)	1,785		1,005
Series 2006-2 Class 2A2, 0.6038% 3/25/36 (g)	134		131
Series 2006-8 Class 2A1, 0.5138% 9/25/36 (g)	196		185
Merrill Lynch Mortgage Investors Trust Series 2006-MLN1 Class A2A, 0.5438% 7/25/37 (g)	402		369
Morgan Stanley ABS Capital I Trust:
Series 2005-3 Class A3, 0.8538% 8/25/35 (g)	6,101		5,086
Series 2006-HE6 Class A2A, 0.5138% 9/25/36 (g)	619		585
Series 2007-HE2 Class A2A, 0.5138% 1/25/37 (g)	70		57
Series 2007-HE4 Class A2A, 0.5838% 2/25/37 (g)	70		47
Series 2007-NC3 Class A2A, 0.5338% 5/25/37 (g)	43		34
Asset-Backed Securities - continued
	Principal Amount (000s)		Value (000s)
Morgan Stanley Home Equity Loans Trust Series 2007-2 Class A1, 0.5738% 4/25/37 (g)	$ 898		$ 682
Morgan Stanley IXIS Real Estate Capital Trust Series 2006-2 Class A1, 0.5238% 11/25/36 (g)	97		90
National Collegiate Student Loan Trust:
Series 2006-4 Class AIO, 6.35% 2/27/12 (h)	4,205		570
Series 2007-1 Class AIO, 7.27% 4/25/12 (h)	6,370		1,041
Series 2007-2 Class AIO, 6.7% 7/25/12 (h)	4,540		717
Newcastle CDO VIII Series 2006-8A Class 4, 0.9894% 11/1/52 (a)(g)	5,000		600
Nomura Home Equity Loan Trust Series 2006-AF1 Class A1, 6.032% 10/25/36	162		141
NovaStar Mortgage Funding Trust Series 2006-6 Class A2A, 0.5438% 1/25/37 (g)	130		120
Ocala Funding LLC Series 2006-1A Class A, 1.87% 3/20/11 (a)(g)	2,100		840
Option One Mortgage Loan Trust:
Series 2007-5 Class 2A1, 0.5638% 5/25/37 (g)	242		215
Series 2007-6 Class 2A1, 0.5338% 7/25/37 (g)	283		254
Ownit Mortgage Loan Trust Series 2006-6 Class A2A, 0.5338% 9/25/37 (g)	417		395
People's Choice Financial Realty Mortgage Securities Trust Series 2006-1 Class 1A1, 0.5438% 9/25/36 (g)	448		428
RAMP Trust Series 2006-RS4 Class A2, 0.5838% 7/25/36 (g)	4,169		3,709
Residential Asset Mortgage Products, Inc. Series 2003-RZ2 Class A1, 3.6% 4/25/33	401		361
Residential Asset Securities Corp. Series 2007-KS2 Class AI1, 0.5438% 2/25/37 (g)	302		265
Securitized Asset Backed Receivables LLC Trust:
Series 2005-FR4 Class B3, 2.1938% 1/25/36 (g)	500		13
Series 2006-FR4 Class A2A, 0.5538% 8/25/36 (g)	351		218
Series 2007-NC1 Class A2A, 0.5238% 12/25/36 (g)	234		185
Soundview Home Loan Trust Series 2006-WF1 Class A1F, 5.998% 10/25/36	50		50
Structured Asset Securities Corp.:
Series 2005-NC2 Class M3, 0.9038% 5/25/35 (g)	1,995		632
Series 2007-BC4 Class A3, 0.6394% 11/25/37 (g)	2,307		1,885
Structured Asset Securities Corp. Mortgage Loan Trust Series 2007-OSI Class A2, 0.5638% 6/25/37 (g)	5,286		4,005
WaMu Asset Holdings Corp.:
Series 2006-5 Class N1, 5.926% 7/25/46 (a)	1,148		0*
Asset-Backed Securities - continued
	Principal Amount (000s)		Value (000s)
WaMu Asset Holdings Corp.: - continued
Series 2006-7 Class N1, 5.926% 10/25/46 (a)	$ 912		$ 0*
Series 2006-8 Class N1, 6.048% 10/25/46 (a)	1,160		0*
Wells Fargo Home Equity Trust:
Series 2006-2 Class A2, 0.5738% 7/25/36 (g)	824		745
Series 2007-2 Class A1, 0.5638% 4/25/37 (g)	3,683		3,038
TOTAL ASSET-BACKED SECURITIES (Cost $76,470)		49,627
Collateralized Mortgage Obligations - 17.6%
Private Sponsor - 4.0%
American Home Mortgage Investment Trust floater Series 2004-2 Class 4A5, 4.55% 2/25/44 (g)	6,360		2,862
Arkle Master Issuer PLC floater Series 2006-1A Class 3C, 1.6275% 2/17/52 (a)(g)	910		683
Banc of America Mortgage Securities, Inc.:
Series 2003-J Class 2A2, 5.2918% 11/25/33 (g)	501		406
Series 2004-1 Class 2A2, 4.6723% 10/25/34 (g)	1,697		1,321
Series 2004-A:
Class 2A1, 5.1951% 2/25/34 (g)	339		276
Class 2A2, 5.1951% 2/25/34 (g)	1,464		1,194
Series 2004-D Class 2A1, 3.6163% 5/25/34 (g)	200		154
Series 2004-J Class 2A1, 4.7597% 11/25/34 (g)	874		680
Series 2005-H:
Class 1A1, 5.3329% 9/25/35 (g)	196		141
Class 2A2, 4.8028% 9/25/35 (g)	1,877		605
Citigroup Mortgage Loan Trust Series 2006-AR7 Class 1A1, 5.7236% 11/25/36 (g)	202		116
Credit Suisse First Boston Adjustable Rate Mortgage Trust floater Series 2004-4 Class 5A2, 0.8738% 3/25/35 (g)	69		29
Credit Suisse First Boston Mortgage Securities Corp. Series 2002-15R Class A1, 3.3796% 1/28/32 (a)(g)	229		110
First Horizon Mortgage pass-thru Trust Series 2004-AR5 Class 2A1, 5.1001% 10/25/34 (g)	2,047		1,575
Fosse Master Issuer PLC floater Series 2006-1A Class C2, 1.6125% 10/18/54 (a)(g)	770		385
Gracechurch Mortgage Financing PLC floater Series 2006-1 Class D2, 1.7213% 11/20/56 (a)(g)	1,675		783
Gracechurch Mortgage Funding PLC floater Series 1A Class DB, 1.8238% 10/11/41 (a)(g)	2,520		1,091
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
Private Sponsor - continued
Granite Master Issuer PLC floater:
Series 2005-4 Class C2, 1.02% 12/20/54 (g)	$ 700		$ 49
Series 2006-2 Class C1, 0.94% 12/20/54 (g)	155		16
Series 2007-1:
Class 1C1, 0.77% 12/20/54 (g)	940		94
Class 2C1, 0.9% 12/20/54 (g)	500		50
Series 2007-2 Class 2C1, 0.8913% 12/17/54 (g)	1,355		136
Granite Mortgages PLC floater Series 2003-3 Class 1B, 1.5925% 1/20/44 (g)	661		231
GSR Mortgage Loan Trust Series 2007-AR2 Class 2A1, 4.8324% 4/25/35 (g)	897		617
Holmes Master Issuer PLC floater Series 2006-1A Class 2C, 1.4844% 7/15/40 (a)(g)	490		343
Luminent Mortgage Trust floater Series 2006-1 Class A1, 0.7138% 4/25/36 (g)	2,570		1,022
MASTR Adjustable Rate Mortgages Trust Series 2007-3 Class 22A2, 0.6838% 5/25/47 (g)	1,000		483
MASTR Alternative Loan Trust Series 2003-2 Class 4A1, 6.5% 4/25/18	2,773		2,325
Merrill Lynch Alternative Note Asset Trust floater Series 2007-OAR1 Class A1, 0.6438% 2/25/37 (g)	4,062		1,706
Merrill Lynch Floating Trust floater Series 2006-1 Class TM, 0.955% 6/15/22 (a)(g)	4,998		3,074
Merrill Lynch Mortgage Investors Trust:
Series 2004-A4 Class A1, 4.2286% 8/25/34 (g)	2,947		2,254
Series 2006-A6 Class A4, 5.3897% 10/25/33 (g)	2,506		2,042
Permanent Financing No. 4 PLC Class 3C, 2.9894% 6/10/42 (g)	1,405		1,401
Permanent Financing No. 8 PLC floater Class 3C, 2.7094% 6/10/42 (g)	610		413
Residential Asset Mortgage Products, Inc. sequential payer:
Series 2003-SL1 Class A31, 7.125% 4/25/31	715		632
Series 2004-SL2 Class A1, 6.5% 10/25/16	82		71
Residential Funding Mortgage Securities I, Inc. Series 2004-SA1 Class A2, 4.272% 7/25/34 (g)	1,597		1,297
Structured Asset Securities Corp.:
Series 2003-15A Class 4A, 5.4533% 4/25/33 (g)	1,527		1,238
Series 2003-20 Class 1A1, 5.5% 7/25/33	1,114		954
WaMu Mortgage pass-thru certificates:
Series 2004-AR7 Class A6, 3.9389% 7/25/34 (g)	395		391
Series 2005-AR16 Class 1A3, 5.102% 12/25/35 (g)	2,065		1,173
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
Private Sponsor - continued
Wells Fargo Mortgage Backed Securities Trust:
Series 2004-W:
Class A1, 4.5429% 11/25/34 (g)	$ 1,495		$ 1,193
Class A9, 4.5429% 11/25/34 (g)	3,490		2,195
Series 2005-AR12 Class 2A6, 4.313% 7/25/35 (g)	907		693
Series 2005-AR2 Class 1A2, 4.6413% 3/25/35 (g)	657		267
Series 2005-AR3 Class 2A1, 4.4106% 3/25/35 (g)	311		239
Series 2006-AR8 Class 3A1, 5.2374% 4/25/36 (g)	3,448		2,466
TOTAL PRIVATE SPONSOR			41,476
U.S. Government Agency - 13.6%
Fannie Mae:
planned amortization class:
Series 1994-23:
Class PX, 6% 8/25/23	3,448		3,584
Class PZ, 6% 2/25/24	2,687		2,731
Series 1999-15 Class PC, 6% 9/25/18	654		658
Series 2006-105 Class MD, 5.5% 6/25/35	1,145		1,141
Series 1993-165 Class SH, 18.3855% 9/25/23 (g)(j)	156		177
Series 1999-17 Class PG, 6% 4/25/29	5,442		5,677
Series 2003-22 Class IO, 6% 4/25/33 (h)	4,081		400
Series 2003-26 Class KI, 5% 12/25/15 (h)	1,554		50
Series 2003-39 Class IA, 5.5% 10/25/22 (g)(h)	1,859		138
Series 2006-48 Class LF, 0% 8/25/34 (g)(j)	14		14
Fannie Mae Stripped Mortgage-Backed Securities:
sequential payer Series 377 Class 1, 10/1/36 (i)	3,691		3,237
Series 339 Class 29, 5.5% 7/1/18 (h)	1,799		139
Series 348 Class 14, 6.5% 8/1/34 (h)	864		119
Series 351:
Class 12, 5.5% 4/1/34 (h)	650		65
Class 13, 6% 3/1/34 (h)	828		98
Series 359, Class 19 6% 7/1/35 (h)	838		97
Series 384 Class 6, 5% 7/25/37 (h)	4,427		490
Fannie Mae subordinate REMIC pass-thru certificates:
floater:
Series 2007-36 Class FG, 0.8738% 4/25/37 (g)	3,035		2,969
Series 2007-57 Class FA, 0.7038% 6/25/37 (g)	7,484		7,310
planned amortization class:
Series 1999-32 Class PL, 6% 7/25/29	3,902		4,068
Series 2001-52 Class YZ, 6.5% 10/25/31	211		221
Series 2001-63 Class TC, 6% 12/25/31	4,065		4,223
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Fannie Mae subordinate REMIC pass-thru certificates: - continued
planned amortization class:
Series 2001-72 Class NZ, 6% 12/25/31	$ 1,196		$ 1,238
Series 2005-14 Class ME, 5% 10/25/33	1,785		1,801
Series 2005-39 Class TE, 5% 5/25/35	1,120		1,105
Series 2005-73 Class SA, 16.3183% 8/25/35 (g)	912		976
sequential payer:
Series 2001-20 Class Z, 6% 5/25/31	4,621		4,790
Series 2001-31 Class ZC, 6.5% 7/25/31	1,615		1,695
Series 2002-16 Class ZD, 6.5% 4/25/32	710		741
Series 2002-79 Class Z, 5.5% 11/25/22	2,208		2,246
Series 2003-80 Class CG, 6% 4/25/30	595		620
Series 2005-41 Class LA, 5.5% 5/25/35	3,179		3,281
Series 1999-33 Class PK, 6% 7/25/29	2,596		2,702
Series 2001-63 Class PG, 6% 12/25/31	1,943		2,017
Series 2001-74 Class QE, 6% 12/25/31	1,846		1,916
Series 2003-21 Class SK, 7.6263% 3/25/33 (g)(h)(j)	819		94
Series 2003-3 Class HS, 7.1763% 9/25/16 (g)(h)(j)	49		1
Series 2003-35:
Class BS, 6.5263% 4/25/17 (g)(h)(j)	547		19
Class TQ, 7.0263% 5/25/18 (g)(h)	719		63
Series 2003-42:
Class HS, 6.6263% 12/25/17 (g)(h)(j)	6,606		475
Class SJ, 6.5763% 11/25/22 (g)(h)	923		75
Series 2003-48 Class HI, 5% 11/25/17 (h)	2,691		198
Series 2004-54 Class SW, 5.5263% 6/25/33 (g)(h)(j)	3,711		226
Series 2006-4 Class IT, 6% 10/25/35 (h)	421		35
Series 2007-36:
Class GO, 4/25/37 (i)	486		380
Class SG, 6.1263% 4/25/37 (g)(h)(j)	6,302		544
Series 2007-57 Class SA, 37.7775% 6/25/37 (g)(j)	4,712		6,318
Series 2007-66:
Class FB, 0.8738% 7/25/37 (g)	1,995		1,960
Class SA, 36.7575% 7/25/37 (g)(j)	3,111		3,929
Class SB, 36.7575% 7/25/37 (g)(j)	937		1,264
Freddie Mac:
floater Series 3318:
Class CY, 0% 11/15/36 (g)	186		183
Class GY, 0% 5/15/37 (g)	216		210
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac: - continued
planned amortization class:
Series 2095 Class PE, 6% 11/15/28 (e)	$ 4,890		$ 5,074
Series 2104 Class PG, 6% 12/15/28	1,457		1,511
Series 2162 Class PH, 6% 6/15/29	332		346
Series 70 Class C, 9% 9/15/20	98		106
sequential payer Series 2114 Class ZM, 6% 1/15/29	704		734
Freddie Mac Manufactured Housing participation certificates guaranteed planned amortization class Series 2043 Class CJ, 6.5% 4/15/28	1,687		1,754
Freddie Mac Multi-class participation certificates guaranteed:
floater:
Series 2958 Class TF, 0% 4/15/35 (g)	500		425
Series 3129 Class MF, 0% 7/15/34 (g)	352		340
Series 3222 Class HF, 0% 9/15/36 (g)	531		485
planned amortization class:
Series 2121 Class MG, 6% 2/15/29	1,907		1,988
Series 2131 Class BG, 6% 3/15/29	7,676		7,973
Series 2137 Class PG, 6% 3/15/29	1,845		1,913
Series 2154 Class PT, 6% 5/15/29	2,883		3,004
Series 2435 Class VG, 6% 2/15/13	655		675
Series 2488 Class PR, 6% 8/15/32	1,018		1,058
Series 2520 Class BE, 6% 11/15/32	1,970		2,050
Series 2585 Class KS, 7.145% 3/15/23 (g)(h)(j)	471		33
Series 2590 Class YR, 5.5% 9/15/32 (h)	135		18
Series 2802 Class OB, 6% 5/15/34 (d)(e)	3,375		3,458
Series 2810 Class PD, 6% 6/15/33	2,540		2,649
Series 3077 Class TO, 4/15/35 (i)	3,993		3,168
sequential payer:
Series 2135 Class JE, 6% 3/15/29	2,186		2,279
Series 2274 Class ZM, 6.5% 1/15/31	755		794
Series 2281 Class ZB, 6% 3/15/30	912		952
Series 2388 Class ZA, 6% 12/15/31	4,725		4,901
Series 2417 Class KZ, 6% 2/15/32	1,017		1,056
Series 2502 Class ZC, 6% 9/15/32	1,696		1,759
Series 2504 Class Z, 6% 9/15/32	1,469		1,528
Series 2564 Class ES, 7.145% 2/15/22 (g)(h)(j)	757		49
Series 2575 Class ID, 5.5% 8/15/22 (h)	127		11
Series 2750 Class ZT, 5% 2/15/34	2,785		2,645
Series 2817 Class SD, 6.595% 7/15/30 (g)(h)(j)	1,383		89
Series 3097 Class IA, 5.5% 3/15/33 (h)	3,677		308
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed: - continued
Series 1658 Class GZ, 7% 1/15/24	$ 2,111		$ 2,183
Series 2587 Class IM, 6.5% 3/15/33 (h)	1,373		176
Series 2844:
Class SC, 43.8425% 8/15/24 (g)(j)	97		135
Class SD, 80.535% 8/15/24 (g)(j)	141		300
Series 2957 Class SW, 5.545% 4/15/35 (g)(h)	5,713		302
Series 3002 Class SN, 6.045% 7/15/35 (g)(h)(j)	5,727		415
Ginnie Mae guaranteed REMIC pass-thru securities:
sequential payer Series 2002-42 Class ZA, 6% 6/20/32	1,847		1,921
Series 2003-11 Class S, 6.095% 2/16/33 (g)(h)(j)	4,467		337
Series 2004-32 Class GS, 6.5% 5/16/34 (g)(h)(j)	1,293		102
TOTAL U.S. GOVERNMENT AGENCY			139,712
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $201,079)		181,188
Commercial Mortgage Securities - 2.1%
Asset Securitization Corp. Series 1997-D5:
Class A-6, 7.4181% 2/14/43 (g)	8,300		6,980
Class PS1, 1.5863% 2/14/43 (g)(h)	15,229		540
Bayview Commercial Asset Trust floater:
Series 2006-3A:
Class B1, 1.2738% 10/25/36 (a)(g)	256		79
Class B2, 1.8238% 10/25/36 (a)(g)	167		49
Class B3, 3.0738% 10/25/36 (a)(g)	300		67
Class M4, 0.9038% 10/25/36 (a)(g)	256		111
Class M5, 0.9538% 10/25/36 (a)(g)	326		130
Class M6, 1.0338% 10/25/36 (a)(g)	632		237
Series 2006-4A:
Class B1, 1.1738% 12/25/36 (a)(g)	100		20
Class B2, 1.7238% 12/25/36 (a)(g)	96		44
Class B3, 2.9238% 12/25/36 (a)(g)	178		78
Series 2007-1:
Class B1, 1.1438% 3/25/37 (a)(g)	148		52
Class B2, 1.6238% 3/25/37 (a)(g)	108		34
Class B3, 3.8238% 3/25/37 (a)(g)	308		90
Class M1, 0.7438% 3/25/37 (a)(g)	124		67
Commercial Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Bayview Commercial Asset Trust floater: - continued
Series 2007-1:
Class M2, 0.7638% 3/25/37 (a)(g)	$ 96		$ 50
Class M3, 0.7938% 3/25/37 (a)(g)	84		42
Class M4, 0.8438% 3/25/37 (a)(g)	64		31
Class M5, 0.8938% 3/25/37 (a)(g)	104		47
Class M6, 0.9738% 3/25/37 (a)(g)	148		59
Series 2007-2A:
Class B1, 2.0738% 7/25/37 (a)(g)	115		37
Class B2, 2.7238% 7/25/37 (a)(g)	98		30
Class B3, 3.8238% 7/25/37 (a)(g)	111		33
Class M4, 1.1238% 7/25/37 (a)(g)	142		59
Class M5, 1.2238% 7/25/37 (a)(g)	129		51
Class M6, 1.4738% 7/25/37 (a)(g)	160		59
Series 2007-3:
Class B1, 1.4238% 7/25/37 (a)(g)	100		48
Class B2, 2.0738% 7/25/37 (a)(g)	263		125
Class B3, 4.4738% 7/25/37 (a)(g)	136		62
Class M1, 0.7838% 7/25/37 (a)(g)	89		52
Class M2, 0.8138% 7/25/37 (a)(g)	93		52
Class M3, 0.8438% 7/25/37 (a)(g)	150		79
Class M4, 0.9738% 7/25/37 (a)(g)	239		125
Class M5, 1.0738% 7/25/37 (a)(g)	120		61
Class M6, 1.2738% 7/25/37 (a)(g)	93		47
Series 2007-4A:
Class B1, 3.0238% 9/25/37 (a)(g)	136		43
Class B2, 3.9238% 9/25/37 (a)(g)	504		148
CDC Commercial Mortgage Trust Series 2002-FX1 Class XCL, 0.908% 5/15/35 (a)(g)(h)	26,920		1,063
Chase Commercial Mortgage Securities Corp. Series 1999-2:
Class E, 7.734% 1/15/32	1,110		1,072
Class F, 7.734% 1/15/32	600		575
Credit Suisse Commercial Mortgage Trust sequential payer:
Series 2007-C2 Class A1, 5.269% 1/15/49	564		550
Series 2007-C3 Class A1, 5.664% 6/15/39 (g)	652		638
Credit Suisse First Boston Mortgage Securities Corp. floater:
Series 2006-TF2A:
Class A2, 1.9613% 7/15/19 (a)(g)	175		35
Class SHDC, 1.4613% 7/15/19 (a)(g)	84		21
Series 2006-TFL2 Class SHDD, 1.8113% 7/15/19 (a)(g)	47		10
Commercial Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Credit Suisse Mortgage Capital Certificates sequential payer Series 2007-C1 Class A1, 5.227% 2/15/40	$ 684		$ 668
GS Mortgage Securities Corp. II floater Series 2007-EOP:
Class C, 0.765% 3/6/20 (a)(g)	780		499
Class D, 0.815% 3/6/20 (a)(g)	235		150
Class F, 0.925% 3/6/20 (a)(g)	195		119
Class G, 0.965% 3/6/20 (a)(g)	95		57
Class H, 1.095% 3/6/20 (a)(g)	160		96
Class J, 1.295% 3/6/20 (a)(g)	230		131
GS Mortgage Securities Trust sequential payer Series 2007-GG10 Class A1, 5.69% 8/10/45	1,110		883
JPMorgan Chase Commercial Mortgage Securities Trust sequential payer Series 2007-LDP10 Class A1, 5.122% 1/15/49	633		614
LB-UBS Commercial Mortgage Trust:
sequential payer:
Series 2006-C7 Class A1, 5.279% 11/15/38	402		393
Series 2007-C1 Class A1, 5.391% 2/15/40 (g)	568		555
Series 2007-C2 Class A1, 5.226% 2/15/40	514		502
Series 2004-C2 Class XCP, 0.8376% 3/15/36 (a)(g)(h)	62,797		1,229
Series 2007-C1 Class XCP, 0.4751% 2/15/40 (g)(h)	14,259		227
Merrill Lynch-CFC Commercial Mortgage Trust sequential payer:
Series 2007-5 Class A1, 4.275% 12/12/11	479		460
Series 2007-6 Class A1, 5.175% 3/12/51	564		549
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $28,796)		21,014

Cash Equivalents - 3.0%
	Maturity Amount (000s)		Value (000s)
Investments in repurchase agreements in a joint trading account at 0.26%, dated 2/27/09 due 3/2/09 (Collateralized by U.S. Government Obligations) # (Cost $30,805)	$ 30,806		$ 30,805
TOTAL INVESTMENT PORTFOLIO - 142.6% (Cost $1,501,847)			1,466,639
NET OTHER ASSETS - (42.6)%			(438,062)
NET ASSETS - 100%		$ 1,028,577

Futures Contracts
	Expiration Date	Underlying Face Amount at Value (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Sold
Treasury Contracts
48 CBOT 2 Year U.S. Treasury Notes Index Contracts	July 2009	$ 10,397	$ (5)

The face value of futures sold as a percentage of net assets - 1%

Swap Agreements
		Notional Amount (000s)	Value (000s)
Credit Default Swaps
Receive monthly notional amount multiplied by 2.22% and pay JPMorgan Chase, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2005-HE3 Class B2, 6.87% 7/25/35 (Rating-Caa2) (f)	August 2035	$ 1,000	$ (938)
Swap Agreements - continued
	Expiration Date	Notional Amount (000s)	Value (000s)
Interest Rate Swaps
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 2.5425% with Credit Suisse First Boston	Jan. 2019	$ 530	$ 35
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 3.41% with Credit Suisse First Boston	Sept. 2010	57,000	(2,329)
TOTAL INTEREST RATE SWAPS		57,530	(2,294)
		$ 58,530	$ (3,232)

Legend

(a) 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. At the end of the period, the value of these securities amounted to $19,559,000 or 1.9% of net assets.

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(c) A portion of the security is subject to a forward commitment to sell.

(d) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $133,000.

(e) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $3,915,000.

(f) Represents a credit default swap contract in which the fund has sold protection on the underlying reference entity. For the underlying reference entity, ratings disclosed are from Moody's Investor Services, Inc. Where Moody's ratings are not available, S&P ratings are disclosed and are indicated as such. Any underlying reference entity which is Not Rated (NR) by Moody's or S&P is designated as such. All ratings are as of the report date and do not reflect subsequent changes.

(g) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(h) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.

(i) Principal Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans.

(j) Coupon is inversely indexed to a floating interest rate multiplied by a specified factor. The price may be considerably more volatile than the price of a comparable fixed rate security.

* Amount represents less than $1,000.

# Additional Information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value (Amounts in thousands)
$30,805,000 due 3/02/09 at 0.26%
Goldman, Sachs & Co.	$ 12,079
UBS Securities LLC	18,726
	$ 30,805

Other Information

The following is a summary of the inputs used, as of February 28, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:
Description (Amounts in thousands)	Total	Level 1	Level 2	Level 3
Investments in Securities	$ 1,466,639	$ -	$ 1,443,311	$ 23,328
Other Financial Instruments*	$ (3,467)	$ (5)	$ (2,524)	$ (938)

* Other financial instruments include Futures Contracts, Swap Agreements and Forward Commitments.

The following is a reconciliation of assets for which Level 3 inputs were used in determining value:

(Amounts in thousands)	Investments in Securities	Other Financial Instruments
Beginning Balance	$ 2,301	$ (804)
Total Realized Gain (Loss)	71	- *
Total Unrealized Gain (Loss)	(10,087)	756
Cost of Purchases	9,218	-
Proceeds of Sales	(3,511)	-
Amortization/Accretion	(1,753)	-
Transfer in/out of Level 3	27,089	(890)
Ending Balance	$ 23,328	$ (938)

* The realized gain (loss) for derivative instruments is not included in the rollforward. For the period, the realized gain (loss) on these instruments totaled $(897,000).

The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities or Other Financial Instruments identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period.

Income Tax Information

At August 31, 2008, the fund had a capital loss carryforward of approximately $34,825,000 of which $2,470,000, $14,312,000, $3,550,000 and $14,493,000 will expire on August 31, 2013, 2014, 2015 and 2016, respectively.

The fund intends to elect to defer to its fiscal year ending August 31, 2009 approximately $107,093,000 of losses recognized during the period November 1, 2007 to August 31, 2008.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amounts)	February 28, 2009 (Unaudited)
Assets
Investment in securities, at value (including repurchase agreements of $30,805) - See accompanying schedule: Unaffiliated issuers (cost $1,501,847)		$ 1,466,639
Commitment to sell securities on a delayed delivery basis	$ (303,051)
Receivable for securities sold on a delayed delivery basis	302,821	(230)
Receivable for investments sold, regular delivery		23,417
Cash		8
Receivable for swap agreements		4
Receivable for fund shares sold		593
Interest receivable		5,483
Other receivables		114
Unrealized appreciation on swap agreements		35
Total assets		1,496,063
Liabilities
Payable for investments purchased Regular delivery	$ 601
Delayed delivery	460,377
Payable for swap agreements	920
Payable for fund shares redeemed	1,345
Distributions payable	389
Unrealized depreciation on swap agreements	3,267
Accrued management fee	277
Distribution fees payable	50
Payable for daily variation on futures contracts	16
Other affiliated payables	128
Other payables and accrued expenses	116
Total liabilities		467,486
Net Assets		$ 1,028,577
Net Assets consist of:
Paid in capital		$ 1,204,419
Distributions in excess of net investment income		(6,099)
Accumulated undistributed net realized gain (loss) on investments		(131,068)
Net unrealized appreciation (depreciation) on investments		(38,675)
Net Assets		$ 1,028,577

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

Amounts in thousands (except per-share amounts)	February 28, 2009 (Unaudited)
Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($44,431 ÷ 4,438 shares)		$ 10.01
Maximum offering price per share (100/96.00 of $10.01)		$ 10.43
Class T: Net Asset Value and redemption price per share ($39,460 ÷ 3,935 shares)		$ 10.03
Maximum offering price per share (100/96.00 of $10.03)		$ 10.45
Class B: Net Asset Value and offering price per share ($25,108 ÷ 2,508 shares)A		$ 10.01
Class C: Net Asset Value and offering price per share ($16,272 ÷ 1,627 shares)A		$ 10.00
Fidelity Mortgage Securities Fund: Net Asset Value, offering price and redemption price per share ($895,783 ÷ 89,286 shares)		$ 10.03
Institutional Class: Net Asset Value, offering price and redemption price per share ($7,523 ÷ 752 shares)		$ 10.00

^A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

Amounts in thousands	Six months ended February 28, 2009 (Unaudited)
Investment Income
Interest		$ 29,298
Expenses
Management fee	$ 1,750
Transfer agent fees	645
Distribution fees	309
Fund wide operations fee	162
Independent trustees' compensation	2
Miscellaneous	5
Total expenses before reductions	2,873
Expense reductions	(1)	2,872
Net investment income		26,426
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	11,233
Futures contracts	(539)
Swap agreements	(781)
Total net realized gain (loss)		9,913
Change in net unrealized appreciation (depreciation) on: Investment securities	(17,972)
Futures contracts	99
Swap agreements	(1,225)
Delayed delivery commitments	1,326
Total change in net unrealized appreciation (depreciation)		(17,772)
Net gain (loss)		(7,859)
Net increase (decrease) in net assets resulting from operations		$ 18,567

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

Amounts in thousands	Six months ended February 28, 2009 (Unaudited)	Year ended August 31, 2008
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 26,426	$ 65,979
Net realized gain (loss)	9,913	(102,798)
Change in net unrealized appreciation (depreciation)	(17,772)	41,977
Net increase (decrease) in net assets resulting from operations	18,567	5,158
Distributions to shareholders from net investment income	(27,059)	(68,876)
Share transactions - net increase (decrease)	(146,241)	(404,510)
Total increase (decrease) in net assets	(154,733)	(468,228)
Net Assets
Beginning of period	1,183,310	1,651,538
End of period (including distributions in excess of net investment income of $6,099 and distributions in excess of net investment income of $5,466, respectively)	$ 1,028,577	$ 1,183,310

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.33	$ 11.30	$ 11.26
Income from Investment Operations
Net investment income E	.226	.467	.521	.404	.408	.365	.282
Net realized and unrealized gain (loss)	(.073)	(.461)	(.401)	(.021)	(.267)	.181	.112
Total from investment operations	.153	.006	.120	.383	.141	.546	.394
Distributions from net investment income	(.233)	(.486)	(.520)	(.403)	(.421)	(.366)	(.274)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.233)	(.486)	(.520)	(.403)	(.481)	(.516)	(.354)
Net asset value, end of period	$ 10.01	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.33	$ 11.30
Total Return B, C, D	1.54%	.06%	1.04%	3.56%	1.26%	4.97%	3.56%
Ratios to Average Net Assets G
Expenses before reductions	.86% A	.85%	.79%	.74% A	.82%	.86%	.81%
Expenses net of fee waivers, if any	.86% A	.85%	.79%	.74% A	.82%	.86%	.81%
Expenses net of all reductions	.86% A	.85%	.78%	.74% A	.82%	.86%	.81%
Net investment income	4.54% A	4.52%	4.77%	4.44% A	3.65%	3.24%	2.51%
Supplemental Data
Net assets, end of period (in millions)	$ 44	$ 39	$ 54	$ 54	$ 50	$ 55	$ 69
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class T

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.11	$ 10.59	$ 10.99	$ 11.00	$ 11.34	$ 11.31	$ 11.28
Income from Investment Operations
Net investment income E	.227	.470	.519	.399	.400	.353	.270
Net realized and unrealized gain (loss)	(.074)	(.462)	(.403)	(.012)	(.268)	.181	.101
Total from investment operations	.153	.008	.116	.387	.132	.534	.371
Distributions from net investment income	(.233)	(.488)	(.516)	(.397)	(.412)	(.354)	(.261)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.233)	(.488)	(.516)	(.397)	(.472)	(.504)	(.341)
Net asset value, end of period	$ 10.03	$ 10.11	$ 10.59	$ 10.99	$ 11.00	$ 11.34	$ 11.31
Total Return B, C, D	1.54%	.07%	1.01%	3.59%	1.18%	4.86%	3.34%
Ratios to Average Net Assets G
Expenses before reductions	.86% A	.83%	.82%	.81% A	.89%	.96%	.93%
Expenses net of fee waivers, if any	.86% A	.83%	.82%	.81% A	.89%	.96%	.93%
Expenses net of all reductions	.86% A	.83%	.82%	.81% A	.89%	.96%	.93%
Net investment income	4.54% A	4.53%	4.73%	4.37% A	3.57%	3.14%	2.39%
Supplemental Data
Net assets, end of period (in millions)	$ 39	$ 41	$ 68	$ 89	$ 126	$ 131	$ 155
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class B

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.32	$ 11.30	$ 11.26
Income from Investment Operations
Net investment income E	.194	.400	.443	.336	.323	.278	.197
Net realized and unrealized gain (loss)	(.073)	(.461)	(.401)	(.022)	(.257)	.172	.112
Total from investment operations	.121	(.061)	.042	.314	.066	.450	.309
Distributions from net investment income	(.201)	(.419)	(.442)	(.334)	(.336)	(.280)	(.189)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.201)	(.419)	(.442)	(.334)	(.396)	(.430)	(.269)
Net asset value, end of period	$ 10.01	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.32	$ 11.30
Total Return B, C, D	1.21%	(.58)%	.32%	2.91%	.58%	4.08%	2.78%
Ratios to Average Net Assets G
Expenses before reductions	1.51% A	1.50%	1.50%	1.50% A	1.58%	1.63%	1.57%
Expenses net of fee waivers, if any	1.51% A	1.50%	1.50%	1.50% A	1.58%	1.63%	1.57%
Expenses net of all reductions	1.51% A	1.50%	1.50%	1.50% A	1.58%	1.63%	1.57%
Net investment income	3.89% A	3.86%	4.05%	3.68% A	2.89%	2.48%	1.75%
Supplemental Data
Net assets, end of period (in millions)	$ 25	$ 32	$ 50	$ 74	$ 101	$ 134	$ 182
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class C

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.08	$ 10.56	$ 10.96	$ 10.98	$ 11.31	$ 11.29	$ 11.25
Income from Investment Operations
Net investment income E	.188	.389	.434	.328	.316	.273	.189
Net realized and unrealized gain (loss)	(.072)	(.459)	(.401)	(.021)	(.257)	.172	.112
Total from investment operations	.116	(.070)	.033	.307	.059	.445	.301
Distributions from net investment income	(.196)	(.410)	(.433)	(.327)	(.329)	(.275)	(.181)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.196)	(.410)	(.433)	(.327)	(.389)	(.425)	(.261)
Net asset value, end of period	$ 10.00	$ 10.08	$ 10.56	$ 10.96	$ 10.98	$ 11.31	$ 11.29
Total Return B, C, D	1.17%	(.68)%	.25%	2.85%	.52%	4.04%	2.71%
Ratios to Average Net Assets G
Expenses before reductions	1.61% A	1.60%	1.58%	1.57% A	1.64%	1.68%	1.64%
Expenses net of fee waivers, if any	1.61% A	1.60%	1.58%	1.57% A	1.64%	1.68%	1.64%
Expenses net of all reductions	1.61% A	1.60%	1.58%	1.57% A	1.64%	1.68%	1.64%
Net investment income	3.79% A	3.77%	3.97%	3.61% A	2.82%	2.42%	1.68%
Supplemental Data
Net assets, end of period (in millions)	$ 16	$ 15	$ 23	$ 31	$ 41	$ 58	$ 99
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Fidelity Mortgage Securities Fund

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 E	2005 G	2004 G	2003 G
Selected Per-Share Data
Net asset value, beginning of period	$ 10.11	$ 10.59	$ 10.99	$ 11.01	$ 11.34	$ 11.31	$ 11.28
Income from Investment Operations
Net investment income D	.247	.509	.559	.432	.438	.390	.306
Net realized and unrealized gain (loss)	(.074)	(.462)	(.403)	(.023)	(.257)	.183	.102
Total from investment operations	.173	.047	.156	.409	.181	.573	.408
Distributions from net investment income	(.253)	(.527)	(.556)	(.429)	(.451)	(.393)	(.298)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.253)	(.527)	(.556)	(.429)	(.511)	(.543)	(.378)
Net asset value, end of period	$ 10.03	$ 10.11	$ 10.59	$ 10.99	$ 11.01	$ 11.34	$ 11.31
Total Return B, C	1.74%	.46%	1.38%	3.80%	1.61%	5.21%	3.68%
Ratios to Average Net Assets F
Expenses before reductions	.45% A	.45%	.45%	.45% A	.55%	.62%	.60%
Expenses net of fee waivers, if any	.45% A	.45%	.45%	.45% A	.55%	.62%	.60%
Expenses net of all reductions	.45% A	.45%	.45%	.45% A	.55%	.62%	.60%
Net investment income	4.94% A	4.91%	5.10%	4.73% A	3.91%	3.48%	2.72%
Supplemental Data
Net assets, end of period (in millions)	$ 896	$ 1,049	$ 1,446	$ 1,612	$ 1,807	$ 1,525	$ 1,302
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Institutional Class

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 E	2005 G	2004 G	2003 G
Selected Per-Share Data
Net asset value, beginning of period	$ 10.08	$ 10.56	$ 10.97	$ 10.98	$ 11.32	$ 11.29	$ 11.25
Income from Investment Operations
Net investment income D	.242	.499	.548	.424	.432	.387	.302
Net realized and unrealized gain (loss)	(.073)	(.461)	(.411)	(.011)	(.266)	.182	.112
Total from investment operations	.169	.038	.137	.413	.166	.569	.414
Distributions from net investment income	(.249)	(.518)	(.547)	(.423)	(.446)	(.389)	(.294)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.249)	(.518)	(.547)	(.423)	(.506)	(.539)	(.374)
Net asset value, end of period	$ 10.00	$ 10.08	$ 10.56	$ 10.97	$ 10.98	$ 11.32	$ 11.29
Total Return B, C	1.71%	.37%	1.20%	3.85%	1.48%	5.19%	3.75%
Ratios to Average Net Assets F
Expenses before reductions	.53% A	.54%	.53%	.52% A	.60%	.66%	.63%
Expenses net of fee waivers, if any	.53% A	.54%	.53%	.52% A	.60%	.66%	.63%
Expenses net of all reductions	.53% A	.54%	.53%	.52% A	.60%	.66%	.63%
Net investment income	4.87% A	4.83%	5.02%	4.66% A	3.87%	3.45%	2.69%
Supplemental Data
Net assets, end of period (in millions)	$ 8	$ 7	$ 10	$ 14	$ 16	$ 13	$ 16
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Notes to Financial Statements

For the period ended February 28, 2009 (Unaudited)

(Amounts in thousands except ratios)

1. Organization.

Fidelity Advisor Mortgage Securities Fund (the Fund) is a fund of Fidelity Advisor Series II (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Fidelity Mortgage Securities Fund, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

2. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Fund uses independent pricing services approved by the Board of Trustees to value its investments.

Debt securities, including restricted securities, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Swaps are marked-to-market daily based on valuations from independent pricing services or dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Investments in open-end mutual funds are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value. Actual prices received at disposition may differ.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Significant Accounting Policies - continued

Security Valuation - continued

When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.

The Fund adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:

Level 1	Quoted prices in active markets for identical securities.
Level 2	Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3	Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.

The aggregate value by input level, as of February 28, 2009, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.

Semiannual Report

2. Significant Accounting Policies - continued

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years.

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to futures transactions, swap agreements, market discount, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation	$ 26,595
Unrealized depreciation	(61,807)
Net unrealized appreciation (depreciation)	$ (35,212)
Cost for federal income tax purposes	$ 1,501,851

New Accounting Pronouncement. In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for reporting periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance.

3. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Delayed Delivery Transactions and When-Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of

Semiannual Report

3. Operating Policies - continued

Delayed Delivery Transactions and When-Issued Securities - continued

Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Futures Contracts. The Fund may use futures contracts to manage its exposure to the bond market and to fluctuations in interest rates. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms.

Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.

Swap Agreements. The Fund entered into swap agreements, which are contracts between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gains or

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

3. Operating Policies - continued

Swap Agreements - continued

losses in the Fund's accompanying Statement of Operations. Gains or losses are realized in the event of an early termination of a swap agreement. Risks of loss may exceed amounts recognized on the Fund's Statement of Assets and Liabilities. Risks of loss may include unfavorable changes in the returns of the underlying instruments or indexes, adverse fluctuations of interest rates, failure of the counterparty to perform under the terms of the agreement and lack of liquidity in the market. Details of swap agreements open at period end are included in the Fund's Schedule of Investments under the caption "Swap Agreements." Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian bank in accordance with the swap agreement and if required, is identified in the Fund's Schedule of Investments. The Fund could experience delays and costs in gaining access to the collateral even though it is held in the Fund's custodian bank.

The Fund entered into interest rate swap agreements to manage its exposure to interest rate changes. Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates (e.g. fixed rate, floating rate), applied to a notional principal amount. Changes in interest rates can have a negative effect on both the value of the Fund's bond holdings as well as the amount of interest income earned. In general, the value of bonds can fall when interest rates rise and can rise when interest rates fall.

The Fund entered into credit default swap agreements to provide a measure of protection against defaults of an issuer ("buyer of protection") and/or to gain credit exposure to an issuer to which it is not otherwise exposed ("seller of protection"). The issuer may be either a single issuer or a "basket" of issuers. As a buyer of protection, the Fund does so when it holds bonds of the issuer or without owning the underlying asset or debt issued by the reference entity. Under the terms of a credit default swap the buyer of protection (buyer) receives credit protection in exchange for making periodic payments to the seller of protection (seller) based on a fixed percentage applied to a notional principal amount. In return for these payments, the seller acts as a guarantor of the credit worthiness of a reference obligation. Any upfront payments made or received upon entering a credit default swap contract would be amortized or accreted over the life of the swap and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Periodic payments are made over the life of the contract provided that no credit event occurs. For credit default swaps on asset-backed securities, a credit event may be triggered by events such as failure to pay principal, maturity extension, rating downgrade or write-down. For credit default swaps on corporate or sovereign issuers, a credit event

Semiannual Report

3. Operating Policies - continued

Swap Agreements - continued

may be triggered by events such as bankruptcy, failure to pay, obligation acceleration, repudiation/moratorium or restructuring. If a credit event were to occur during the term of the contract, upon notification from the buyer, the seller is obligated to take delivery from the buyer the notional amount of a reference obligation, at par. The difference between the value of the obligation received and the notional amount paid is recorded as a realized loss to the seller. For credit default swaps on asset-backed securities, the reference obligation described represents the security that will be put to the seller. For credit default swaps on corporate or sovereign issuers, under the terms of the agreement, the obligation that is put to the seller is not limited to the specific reference obligation described in the Fund's Schedule of Investments.

The notional amount of credit default swaps is included in the Fund's Schedule of Investments and approximates the maximum potential amount of future payments that the Fund could be required to make if the Fund is the seller of protection and a credit event were to occur. The total notional amount of all credit default swaps open at period end where the Fund is the seller of protection amounted to $1,000 representing 0.0% of net assets.

The value of each credit default swap and credit rating disclosed for each reference obligation in the Fund's Schedule of Investments, where the Fund is the seller of protection, are both measures of the current payment/performance risk of the swap. As the value of the swap changes as a positive or negative percentage of the total notional amount, the payment/performance risk may decrease or increase, respectively. Any current or future declines in the value of the swap may be partially offset by upfront payments received by the Fund as the seller of protection if applicable. In addition to these measures, FMR monitors a variety of factors including cash flow assumptions, market activity and market sentiment as part of its ongoing process of assessing payment/performance risk.

4. Purchases and Sales of Investments.

Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $31,179 and $51,239, respectively.

5. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20%

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

5. Fees and Other Transactions with Affiliates - continued

Management Fee - continued

of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .32% of the Fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

	Distribution Fee	Service Fee	Paid to FDC	Retained by FDC
Class A	0%	.25%	$ 53	$ 4
Class T	0%	.25%	51	1
Class B	.65%	.25%	127	92
Class C	.75%	.25%	78	5
			$ 309	$ 102

Sales Load. FDC receives a front-end sales charge of up to 4.00% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, ..75% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

	Retained by FDC
Class A	$ 2
Class T	1
Class B*	20
Class C*	2
	$ 25

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Semiannual Report

5. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of each respective class of the Fund, with the exception of Fidelity Mortgage Securities Fund. FIIOC receives an asset-based fee of .10% of Fidelity Mortgage Securities Fund's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:

	Amount	% of Average Net Assets*
Class A	$ 53	.25
Class T	51	.25
Class B	35	.25
Class C	19	.25
Fidelity Mortgage Securities Fund	479	.10
Institutional Class	8	.18
	$ 645

* Annualized

Fundwide Operations Fee. Pursuant to the Fundwide Operations and Expense Agreement (FWOE), FMR has agreed to provide for fund level expenses (which do not include transfer agent, Rule 12b-1 fees, compensation of the independent Trustees, interest (including commitment fees), taxes or extraordinary expenses, if any) in return for a FWOE fee equal to .35% less the total amount of the management fee. The FWOE paid by the Fund is reduced by an amount equal to the fees and expenses paid to the independent Trustees. For the period, the FWOE fee was equivalent to an annualized rate of .03% of average net assets.

6. Committed Line of Credit.

The Fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

7. Expense Reductions.

Through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's management fee by $1.

8. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

	Six months ended February 28, 2009	Year ended August 31, 2008
From net investment income
Class A	$ 988	$ 2,205
Class T	944	2,500
Class B	559	1,654
Class C	305	733
Fidelity Mortgage Securities Fund	24,054	61,360
Institutional Class	209	424
Total	$ 27,059	$ 68,876

9. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class A
Shares sold	1,323	1,233	$ 13,269	$ 12,720
Reinvestment of distributions	82	189	825	1,952
Shares redeemed	(853)	(2,645)	(8,577)	(27,288)
Net increase (decrease)	552	(1,223)	$ 5,517	$ (12,616)
Class T
Shares sold	756	652	$ 7,676	$ 6,745
Reinvestment of distributions	88	227	881	2,348
Shares redeemed	(945)	(3,306)	(9,499)	(34,313)
Net increase (decrease)	(101)	(2,427)	$ (942)	$ (25,220)
Class B
Shares sold	114	74	$ 1,147	$ 761
Reinvestment of distributions	47	133	470	1,376
Shares redeemed	(812)	(1,820)	(8,157)	(18,803)
Net increase (decrease)	(651)	(1,613)	$ (6,540)	$ (16,666)

Semiannual Report

9. Share Transactions - continued

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class C
Shares sold	418	130	$ 4,222	$ 1,330
Reinvestment of distributions	24	57	235	589
Shares redeemed	(314)	(838)	(3,153)	(8,656)
Net increase (decrease)	128	(651)	$ 1,304	$ (6,737)
Fidelity Mortgage Securities Fund
Shares sold	6,701	12,801	$ 67,565	$ 131,962
Reinvestment of distributions	2,218	5,511	22,222	57,031
Shares redeemed	(23,384)	(51,088)	(235,660)	(529,926)
Net increase (decrease)	(14,465)	(32,776)	$ (145,873)	$ (340,933)
Institutional Class
Shares sold	391	224	$ 3,934	$ 2,294
Reinvestment of distributions	15	32	149	335
Shares redeemed	(378)	(482)	(3,790)	(4,967)
Net increase (decrease)	28	(226)	$ 293	$ (2,338)

10. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

11. Credit Risk.

The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers backed by residential mortgage loans, credit card receivables and automotive loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Investments Money Management, Inc.

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan), Inc.

Fidelity Research & Analysis Company

FIL Investment Advisors

FIL Investment Advisors
(U.K.) Ltd.

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York Mellon

New York, NY

AMOR-USAN-0409
1.784898.106

(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Mortgage Securities
Fund - Institutional Class

Semiannual Report

February 28, 2009

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message	<Click Here>	Ned Johnson's message to shareholders.
Shareholder Expense Example	<Click Here>	An example of shareholder expenses.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.

One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.

You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).

A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.

We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2008 to February 28, 2009).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio	Beginning Account Value September 1, 2008	Ending Account Value February 28, 2009	Expenses Paid During Period* September 1, 2008 to February 28, 2009
Class A	.86%
Actual		$ 1,000.00	$ 1,015.40	$ 4.30
HypotheticalA		$ 1,000.00	$ 1,020.53	$ 4.31
Class T	.86%
Actual		$ 1,000.00	$ 1,015.40	$ 4.30
HypotheticalA		$ 1,000.00	$ 1,020.53	$ 4.31
Class B	1.51%
Actual		$ 1,000.00	$ 1,012.10	$ 7.53
HypotheticalA		$ 1,000.00	$ 1,017.31	$ 7.55
Class C	1.61%
Actual		$ 1,000.00	$ 1,011.70	$ 8.03
HypotheticalA		$ 1,000.00	$ 1,016.81	$ 8.05
Fidelity Mortgage Securities Fund	.45%
Actual		$ 1,000.00	$ 1,017.40	$ 2.25
HypotheticalA		$ 1,000.00	$ 1,022.56	$ 2.26
Institutional Class	.53%
Actual		$ 1,000.00	$ 1,017.10	$ 2.65
HypotheticalA		$ 1,000.00	$ 1,022.17	$ 2.66

^A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Coupon Distribution as of February 28, 2009
	% of fund's investments	% of fund's investments 6 months ago
Less than 4%	5.6	5.2
4 - 4.99%	6.5	7.7
5 - 5.99%	45.2	44.9
6 - 6.99%	35.3	30.8
7% and over	5.2	4.9

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments.

Weighted Average Maturity as of February 28, 2009
		6 months ago
Years	3.5	5.2

The weighted average maturity is based on the dollar-weighted average length of time until principal payments are expected or until securities reach maturity, taking into account any maturity shortening feature such as a call, refunding or redemption provision.

Duration as of February 28, 2009
		6 months ago
Years	2.1	4.3

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)
As of February 28, 2009 *		As of August 31, 2008 **
	Mortgage Securities 115.1%		Mortgage Securities 106.4%
	CMOs and Other Mortgage Related Securities 19.7%		CMOs and Other Mortgage Related Securities 20.0%
	Asset-Backed Securities 4.8%		Asset-Backed Securities 5.1%
	Short-Term Investments and Net Other Assets† (39.6)%		Short-Term Investments and Net Other Assets† (31.5)%

* Foreign investments	0.7%	** Foreign investments	1.3%
* Futures and Swaps	(4.4)%	** Futures and Swaps	(8.8)%

^† Short-Term Investments and Net Other Assets are not included in the pie chart.

Semiannual Report

Investments February 28, 2009 (Unaudited)

Showing Percentage of Net Assets

U.S. Government Agency - Mortgage Securities - 115.1%
	Principal Amount (000s)		Value (000s)
Fannie Mae - 67.1%
3.575% 1/1/32 (g)	$ 144		$ 144
4.162% 1/1/35 (g)	1,899		1,921
4.303% 3/1/33 (g)	86		87
4.328% 1/1/35 (g)	2,246		2,261
4.34% 1/1/35 (g)	210		213
4.423% 5/1/35 (g)	129		130
4.432% 3/1/35 (g)	303		308
4.456% 7/1/35 (g)	931		926
4.5% 10/1/19 to 9/1/31 (c)	22,840		23,194
4.5% 3/12/39 (b)(c)	12,000		12,032
4.548% 10/1/33 (g)	135		136
4.55% 10/1/35 (g)	1,179		1,195
4.583% 8/1/34 (g)	473		479
4.667% 7/1/35 (g)	173		176
4.7% 2/1/35 (g)	1,001		1,018
4.739% 8/1/35 (g)	741		752
4.742% 12/1/34 (g)	170		172
4.747% 4/1/35 (g)	65		66
4.752% 10/1/35 (g)	2,636		2,674
4.823% 12/1/35 (g)	1,812		1,836
4.846% 4/1/33 (g)	1,653		1,676
4.87% 7/1/35 (g)	1,060		1,087
4.933% 1/1/35 (g)	537		544
4.933% 7/1/35 (g)	45		47
4.987% 7/1/35 (g)	3,088		3,141
5% 9/1/16 to 7/1/38 (c)(e)	90,595		92,538
5% 3/12/39 (b)	9,000		9,156
5.048% 1/1/37 (g)	1,270		1,297
5.095% 7/1/34 (g)	357		359
5.141% 5/1/35 (g)	124		126
5.16% 10/1/18 (g)	77		78
5.174% 8/1/34 (g)	1,053		1,071
5.198% 3/1/35 (g)	110		110
5.265% 12/1/36 (g)	543		555
5.307% 7/1/35 (g)	760		786
5.328% 6/1/36 (g)	1,818		1,886
5.336% 7/1/35 (g)	436		446
5.342% 2/1/37 (g)	561		575
5.481% 6/1/32 (g)	341		343
5.5% 6/1/11 to 5/1/38 (c)	97,371		100,354
5.5% 3/17/24 (b)	2,000		2,073
5.5% 3/17/24 (b)	2,000		2,073
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
5.5% 3/17/24 (b)	$ 6,800		$ 7,050
5.5% 3/12/39 (b)	20,000		20,489
5.5% 3/12/39 (b)	7,000		7,171
5.5% 3/12/39 (b)(c)	50,500		51,734
5.5% 3/12/39 (b)(c)	14,500		14,854
5.573% 10/1/36 (g)	285		296
5.658% 6/1/36 (g)	1,414		1,463
5.77% 3/1/36 (g)	3,223		3,341
5.798% 1/1/36 (g)	563		586
5.806% 11/1/36 (g)	886		906
5.819% 9/1/36 (g)	873		888
5.823% 7/1/36 (g)	609		634
5.845% 3/1/36 (g)	1,849		1,926
5.851% 3/1/36 (g)	1,492		1,545
5.952% 4/1/36 (g)	398		413
5.952% 9/1/36 (g)	781		813
5.954% 5/1/36 (g)	565		587
6% 3/1/09 to 11/1/37 (c)	109,977		114,484
6% 9/1/36 (g)	663		691
6% 3/12/39 (b)(c)	18,000		18,594
6% 3/12/39 (b)(c)	62,000		64,046
6.008% 4/1/36 (g)	6,024		6,258
6.091% 9/1/36 (g)	640		667
6.118% 4/1/36 (g)	869		904
6.192% 2/1/35 (g)	104		106
6.198% 5/1/37 (g)	83		87
6.226% 5/1/36 (g)	1,844		1,920
6.241% 6/1/36 (g)	3,144		3,275
6.243% 6/1/36 (g)	137		139
6.245% 8/1/46 (g)	320		334
6.346% 5/1/36 (g)	1,315		1,371
6.433% 4/1/37 (g)	964		1,006
6.499% 12/1/36 (g)	204		212
6.5% 5/1/12 to 9/1/47 (c)	58,235		61,262
6.5% 3/12/39 (b)	1,000		1,045
6.555% 12/1/36 (g)	285		298
6.784% 9/1/37 (g)	1,489		1,554
6.862% 9/1/37 (g)	676		705
6.946% 9/1/37 (g)	536		559
7% 12/1/15 to 7/1/37	9,014		9,597
7.075% 9/1/37 (g)	720		752
7.5% 8/1/22 to 5/1/37	13,539		14,380
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
8% 12/1/29 to 3/1/37	$ 176		$ 186
8.5% 1/1/16 to 7/1/31	218		236
9% 2/1/13 to 10/1/30	536		583
9.5% 11/1/09 to 8/1/22	80		88
11% 8/1/10	9		9
12.25% 5/1/15	14		16
12.5% 8/1/15 to 3/1/16	17		20
12.75% 2/1/15	4		4
13.5% 9/1/14	3		4
			690,129
Freddie Mac - 36.0%
3.456% 2/1/34 (g)	166		166
3.741% 5/1/34 (g)	31		32
4.275% 6/1/35 (g)	283		287
4.315% 12/1/34 (g)	229		233
4.329% 11/1/31 (g)	62		62
4.407% 3/1/35 (g)	286		290
4.471% 3/1/35 (g)	256		259
4.546% 3/1/34 (g)	2,392		2,422
4.569% 12/1/33 (g)	1,036		1,044
4.58% 6/1/33 (g)	2,020		2,062
4.709% 11/1/35 (g)	935		947
4.789% 2/1/36 (g)	254		260
4.801% 3/1/35 (g)	499		504
5% 6/1/18 to 6/1/38 (c)	35,899		36,599
5% 3/12/39 (b)	2,000		2,032
5% 3/12/39 (b)	5,000		5,079
5.023% 4/1/35 (g)	140		144
5.158% 10/1/33 (g)	1,647		1,674
5.288% 3/1/35 (g)	174		175
5.443% 4/1/37 (g)	365		374
5.5% 6/1/09 to 1/1/38	42,700		43,987
5.5% 3/12/39 (b)	18,000		18,436
5.5% 3/12/39 (b)(c)	18,000		18,436
5.5% 3/12/39 (b)(c)	18,000		18,436
5.5% 3/12/39 (b)(c)	23,000		23,557
5.5% 4/13/39 (b)	23,000		23,495
5.5% 4/13/39 (b)	18,000		18,388
5.5% 4/13/39 (b)	18,000		18,387
5.548% 1/1/37 (g)	1,842		1,886
5.694% 10/1/35 (g)	246		257
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac - continued
5.757% 3/1/37 (g)	$ 1,966		$ 1,994
5.78% 4/1/37 (g)	1,896		1,944
5.812% 6/1/37 (g)	1,532		1,588
5.834% 5/1/37 (g)	585		599
5.948% 4/1/36 (g)	1,277		1,322
6% 4/1/14 to 7/1/37	38,372		40,064
6% 3/1/39 (b)	8,500		8,799
6.006% 6/1/36 (g)	576		598
6.098% 4/1/37 (g)	596		621
6.139% 10/1/36 (g)	130		136
6.142% 12/1/36 (g)	877		912
6.169% 7/1/36 (g)	3,267		3,392
6.181% 5/1/36 (g)	545		565
6.228% 3/1/36 (g)	2,926		3,049
6.303% 7/1/36 (g)	587		609
6.362% 10/1/36 (g)	3,289		3,425
6.416% 12/1/36 (g)	1,587		1,654
6.418% 6/1/37 (g)	167		174
6.5% 4/1/11 to 8/1/47	26,126		27,474
6.581% 12/1/36 (g)	3,755		3,918
6.594% 1/1/37 (g)	1,853		1,934
6.619% 6/1/37 (g)	187		195
6.625% 7/1/36 (g)	2,758		2,878
6.644% 6/1/36 (g)	389		406
6.65% 8/1/37 (g)	1,169		1,217
6.837% 10/1/36 (g)	2,346		2,447
7% 6/1/21 to 9/1/36	6,264		6,648
7.128% 2/1/37 (g)	256		267
7.5% 11/1/10 to 4/1/37	10,442		11,061
7.524% 4/1/37 (g)	122		127
8% 11/1/16 to 1/1/37	245		258
8.5% 7/1/09 to 9/1/20	25		27
9% 7/1/13 to 5/1/21	206		222
10% 6/1/09 to 5/1/19	40		43
10.5% 8/1/10 to 2/1/16	3		3
12.5% 10/1/12 to 12/1/14	27		29
13% 12/1/13 to 6/1/15	60		68
			370,577
Government National Mortgage Association - 12.0%
4.5% 3/18/39 (b)	12,000		12,045
5% 1/20/33 to 2/20/39	9,988		10,205
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Government National Mortgage Association - continued
5.5% 3/18/39 (b)	$ 13,000		$ 13,331
5.5% 3/18/39 (b)	1,000		1,027
5.5% 3/18/39 (b)	18,000		18,458
5.5% 3/18/39 (b)	300		308
5.5% 3/18/39 (b)	14,000		14,379
5.5% 3/18/39 (b)	4,000		4,102
5.5% 3/18/39 (b)	3,000		3,076
6% 1/15/36	7,770		8,075
6% 3/18/39 (b)	10,000		10,327
6% 3/18/39 (b)	14,000		14,457
6.5% 5/15/28 to 7/15/36	7,158		7,526
7% 2/15/24 to 7/15/32	3,335		3,542
7.5% 9/15/16 to 4/15/32	1,142		1,202
8% 6/15/21 to 12/15/25	451		480
8.5% 8/15/16 to 10/15/28	638		691
9% 11/20/17	2		2
10.5% 12/20/15 to 2/20/18	56		64
13.5% 7/15/11	2		2
			123,299
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $1,164,697)		1,184,005
Asset-Backed Securities - 4.8%
Ameriquest Mortgage Securities, Inc. Series 2006-M3 Class A2A, 0.5238% 10/25/36 (g)	158		153
Ameriquest Mortgage Securities, Inc. pass-thru certificates Series 2005-R10 Class A2B, 0.6938% 12/25/35 (g)	522		358
Argent Securities, Inc. Series 2006-M2 Class A2A, 0.5238% 9/25/36 (g)	197		195
Bear Stearns Asset Backed Securities I Trust:
Series 2005-AQ2 Class M7, 2.1238% 9/25/35 (g)	335		1
Series 2005-FR1 Class M1, 0.9738% 6/25/35 (g)	600		273
Series 2006-HE1 Class 1A2, 0.6938% 12/25/35 (g)	3,574		2,853
Series 2007-HE3 Class 1A1, 0.5938% 4/25/37 (g)	565		432
C-BASS Trust Series 2006-CB7 Class A2, 0.5338% 10/25/36 (g)	306		263
Capital Auto Receivables Asset Trust Series 2007-SN1 Class D, 6.05% 1/17/12	970		485
Citigroup Mortgage Loan Trust:
Series 2006-HE2 Class A2A, 0.5238% 8/26/36 (g)	13		13
Asset-Backed Securities - continued
	Principal Amount (000s)		Value (000s)
Citigroup Mortgage Loan Trust: - continued
Series 2006-NC2 Class A2A, 0.5138% 9/25/36 (g)	$ 51		$ 50
Series 2006-WF2 Class A2B, 5.735% 5/25/36	255		250
Countrywide Asset-Backed Certificates Trust:
Series 2006-13 Class 1AF1, 0.5938% 1/25/37 (g)	49		46
Series 2007-11 Class 2A1, 0.5338% 6/25/47 (g)	4,178		3,708
Series 2007-4 Class A1A, 0.5938% 9/25/37 (g)	3,346		3,020
Series 2007-5 Class 2A1, 0.5738% 4/25/29 (g)	2,080		1,800
Series 2007-BC2 Class 2A1, 0.5638% 6/25/37 (g)	629		536
First Franklin Mortgage Loan Trust Series 2006-FF5 Class 2A2, 0.5838% 4/25/36 (g)	354		324
Ford Credit Auto Owner Trust:
Series 2006-C Class D, 6.89% 5/15/13 (a)	715		356
Series 2007-A Class D, 7.05% 12/15/13 (a)	350		175
Fremont Home Loan Trust Series 2006-3 Class 2A1, 0.5438% 2/25/37 (g)	12		11
GSAMP Trust:
Series 2004-AR1 Class B4, 5% 6/25/34 (a)(g)	160		13
Series 2004-AR2 Class B1, 2.3738% 8/25/34 (g)	796		35
GSR Mortgage Loan Trust Series 2006-6 Class AV1, 0.4594% 3/25/36 (g)	25		24
Helios Finance L.P. Series 2007-S1 Class B1, 1.17% 10/20/14 (a)(g)	2,325		1,186
Home Equity Asset Trust Series 2006-8 Class 2A1, 0.5238% 3/25/37 (g)	42		36
JPMorgan Mortgage Acquisition Trust Series 2006-WF1:
Class A1A, 5.6% 7/25/36	25		25
Class A1B, 0.5738% 7/25/36 (g)	199		196
Leafs CMBS I Ltd. Series 2002-1A Class D, 4.13% 11/20/37 (a)	10,820		4,112
Long Beach Mortgage Loan Trust:
Series 2005-WL1 Class M2, 1.0238% 6/25/35 (g)	1,785		1,005
Series 2006-2 Class 2A2, 0.6038% 3/25/36 (g)	134		131
Series 2006-8 Class 2A1, 0.5138% 9/25/36 (g)	196		185
Merrill Lynch Mortgage Investors Trust Series 2006-MLN1 Class A2A, 0.5438% 7/25/37 (g)	402		369
Morgan Stanley ABS Capital I Trust:
Series 2005-3 Class A3, 0.8538% 8/25/35 (g)	6,101		5,086
Series 2006-HE6 Class A2A, 0.5138% 9/25/36 (g)	619		585
Series 2007-HE2 Class A2A, 0.5138% 1/25/37 (g)	70		57
Series 2007-HE4 Class A2A, 0.5838% 2/25/37 (g)	70		47
Series 2007-NC3 Class A2A, 0.5338% 5/25/37 (g)	43		34
Asset-Backed Securities - continued
	Principal Amount (000s)		Value (000s)
Morgan Stanley Home Equity Loans Trust Series 2007-2 Class A1, 0.5738% 4/25/37 (g)	$ 898		$ 682
Morgan Stanley IXIS Real Estate Capital Trust Series 2006-2 Class A1, 0.5238% 11/25/36 (g)	97		90
National Collegiate Student Loan Trust:
Series 2006-4 Class AIO, 6.35% 2/27/12 (h)	4,205		570
Series 2007-1 Class AIO, 7.27% 4/25/12 (h)	6,370		1,041
Series 2007-2 Class AIO, 6.7% 7/25/12 (h)	4,540		717
Newcastle CDO VIII Series 2006-8A Class 4, 0.9894% 11/1/52 (a)(g)	5,000		600
Nomura Home Equity Loan Trust Series 2006-AF1 Class A1, 6.032% 10/25/36	162		141
NovaStar Mortgage Funding Trust Series 2006-6 Class A2A, 0.5438% 1/25/37 (g)	130		120
Ocala Funding LLC Series 2006-1A Class A, 1.87% 3/20/11 (a)(g)	2,100		840
Option One Mortgage Loan Trust:
Series 2007-5 Class 2A1, 0.5638% 5/25/37 (g)	242		215
Series 2007-6 Class 2A1, 0.5338% 7/25/37 (g)	283		254
Ownit Mortgage Loan Trust Series 2006-6 Class A2A, 0.5338% 9/25/37 (g)	417		395
People's Choice Financial Realty Mortgage Securities Trust Series 2006-1 Class 1A1, 0.5438% 9/25/36 (g)	448		428
RAMP Trust Series 2006-RS4 Class A2, 0.5838% 7/25/36 (g)	4,169		3,709
Residential Asset Mortgage Products, Inc. Series 2003-RZ2 Class A1, 3.6% 4/25/33	401		361
Residential Asset Securities Corp. Series 2007-KS2 Class AI1, 0.5438% 2/25/37 (g)	302		265
Securitized Asset Backed Receivables LLC Trust:
Series 2005-FR4 Class B3, 2.1938% 1/25/36 (g)	500		13
Series 2006-FR4 Class A2A, 0.5538% 8/25/36 (g)	351		218
Series 2007-NC1 Class A2A, 0.5238% 12/25/36 (g)	234		185
Soundview Home Loan Trust Series 2006-WF1 Class A1F, 5.998% 10/25/36	50		50
Structured Asset Securities Corp.:
Series 2005-NC2 Class M3, 0.9038% 5/25/35 (g)	1,995		632
Series 2007-BC4 Class A3, 0.6394% 11/25/37 (g)	2,307		1,885
Structured Asset Securities Corp. Mortgage Loan Trust Series 2007-OSI Class A2, 0.5638% 6/25/37 (g)	5,286		4,005
WaMu Asset Holdings Corp.:
Series 2006-5 Class N1, 5.926% 7/25/46 (a)	1,148		0*
Asset-Backed Securities - continued
	Principal Amount (000s)		Value (000s)
WaMu Asset Holdings Corp.: - continued
Series 2006-7 Class N1, 5.926% 10/25/46 (a)	$ 912		$ 0*
Series 2006-8 Class N1, 6.048% 10/25/46 (a)	1,160		0*
Wells Fargo Home Equity Trust:
Series 2006-2 Class A2, 0.5738% 7/25/36 (g)	824		745
Series 2007-2 Class A1, 0.5638% 4/25/37 (g)	3,683		3,038
TOTAL ASSET-BACKED SECURITIES (Cost $76,470)		49,627
Collateralized Mortgage Obligations - 17.6%
Private Sponsor - 4.0%
American Home Mortgage Investment Trust floater Series 2004-2 Class 4A5, 4.55% 2/25/44 (g)	6,360		2,862
Arkle Master Issuer PLC floater Series 2006-1A Class 3C, 1.6275% 2/17/52 (a)(g)	910		683
Banc of America Mortgage Securities, Inc.:
Series 2003-J Class 2A2, 5.2918% 11/25/33 (g)	501		406
Series 2004-1 Class 2A2, 4.6723% 10/25/34 (g)	1,697		1,321
Series 2004-A:
Class 2A1, 5.1951% 2/25/34 (g)	339		276
Class 2A2, 5.1951% 2/25/34 (g)	1,464		1,194
Series 2004-D Class 2A1, 3.6163% 5/25/34 (g)	200		154
Series 2004-J Class 2A1, 4.7597% 11/25/34 (g)	874		680
Series 2005-H:
Class 1A1, 5.3329% 9/25/35 (g)	196		141
Class 2A2, 4.8028% 9/25/35 (g)	1,877		605
Citigroup Mortgage Loan Trust Series 2006-AR7 Class 1A1, 5.7236% 11/25/36 (g)	202		116
Credit Suisse First Boston Adjustable Rate Mortgage Trust floater Series 2004-4 Class 5A2, 0.8738% 3/25/35 (g)	69		29
Credit Suisse First Boston Mortgage Securities Corp. Series 2002-15R Class A1, 3.3796% 1/28/32 (a)(g)	229		110
First Horizon Mortgage pass-thru Trust Series 2004-AR5 Class 2A1, 5.1001% 10/25/34 (g)	2,047		1,575
Fosse Master Issuer PLC floater Series 2006-1A Class C2, 1.6125% 10/18/54 (a)(g)	770		385
Gracechurch Mortgage Financing PLC floater Series 2006-1 Class D2, 1.7213% 11/20/56 (a)(g)	1,675		783
Gracechurch Mortgage Funding PLC floater Series 1A Class DB, 1.8238% 10/11/41 (a)(g)	2,520		1,091
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
Private Sponsor - continued
Granite Master Issuer PLC floater:
Series 2005-4 Class C2, 1.02% 12/20/54 (g)	$ 700		$ 49
Series 2006-2 Class C1, 0.94% 12/20/54 (g)	155		16
Series 2007-1:
Class 1C1, 0.77% 12/20/54 (g)	940		94
Class 2C1, 0.9% 12/20/54 (g)	500		50
Series 2007-2 Class 2C1, 0.8913% 12/17/54 (g)	1,355		136
Granite Mortgages PLC floater Series 2003-3 Class 1B, 1.5925% 1/20/44 (g)	661		231
GSR Mortgage Loan Trust Series 2007-AR2 Class 2A1, 4.8324% 4/25/35 (g)	897		617
Holmes Master Issuer PLC floater Series 2006-1A Class 2C, 1.4844% 7/15/40 (a)(g)	490		343
Luminent Mortgage Trust floater Series 2006-1 Class A1, 0.7138% 4/25/36 (g)	2,570		1,022
MASTR Adjustable Rate Mortgages Trust Series 2007-3 Class 22A2, 0.6838% 5/25/47 (g)	1,000		483
MASTR Alternative Loan Trust Series 2003-2 Class 4A1, 6.5% 4/25/18	2,773		2,325
Merrill Lynch Alternative Note Asset Trust floater Series 2007-OAR1 Class A1, 0.6438% 2/25/37 (g)	4,062		1,706
Merrill Lynch Floating Trust floater Series 2006-1 Class TM, 0.955% 6/15/22 (a)(g)	4,998		3,074
Merrill Lynch Mortgage Investors Trust:
Series 2004-A4 Class A1, 4.2286% 8/25/34 (g)	2,947		2,254
Series 2006-A6 Class A4, 5.3897% 10/25/33 (g)	2,506		2,042
Permanent Financing No. 4 PLC Class 3C, 2.9894% 6/10/42 (g)	1,405		1,401
Permanent Financing No. 8 PLC floater Class 3C, 2.7094% 6/10/42 (g)	610		413
Residential Asset Mortgage Products, Inc. sequential payer:
Series 2003-SL1 Class A31, 7.125% 4/25/31	715		632
Series 2004-SL2 Class A1, 6.5% 10/25/16	82		71
Residential Funding Mortgage Securities I, Inc. Series 2004-SA1 Class A2, 4.272% 7/25/34 (g)	1,597		1,297
Structured Asset Securities Corp.:
Series 2003-15A Class 4A, 5.4533% 4/25/33 (g)	1,527		1,238
Series 2003-20 Class 1A1, 5.5% 7/25/33	1,114		954
WaMu Mortgage pass-thru certificates:
Series 2004-AR7 Class A6, 3.9389% 7/25/34 (g)	395		391
Series 2005-AR16 Class 1A3, 5.102% 12/25/35 (g)	2,065		1,173
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
Private Sponsor - continued
Wells Fargo Mortgage Backed Securities Trust:
Series 2004-W:
Class A1, 4.5429% 11/25/34 (g)	$ 1,495		$ 1,193
Class A9, 4.5429% 11/25/34 (g)	3,490		2,195
Series 2005-AR12 Class 2A6, 4.313% 7/25/35 (g)	907		693
Series 2005-AR2 Class 1A2, 4.6413% 3/25/35 (g)	657		267
Series 2005-AR3 Class 2A1, 4.4106% 3/25/35 (g)	311		239
Series 2006-AR8 Class 3A1, 5.2374% 4/25/36 (g)	3,448		2,466
TOTAL PRIVATE SPONSOR			41,476
U.S. Government Agency - 13.6%
Fannie Mae:
planned amortization class:
Series 1994-23:
Class PX, 6% 8/25/23	3,448		3,584
Class PZ, 6% 2/25/24	2,687		2,731
Series 1999-15 Class PC, 6% 9/25/18	654		658
Series 2006-105 Class MD, 5.5% 6/25/35	1,145		1,141
Series 1993-165 Class SH, 18.3855% 9/25/23 (g)(j)	156		177
Series 1999-17 Class PG, 6% 4/25/29	5,442		5,677
Series 2003-22 Class IO, 6% 4/25/33 (h)	4,081		400
Series 2003-26 Class KI, 5% 12/25/15 (h)	1,554		50
Series 2003-39 Class IA, 5.5% 10/25/22 (g)(h)	1,859		138
Series 2006-48 Class LF, 0% 8/25/34 (g)(j)	14		14
Fannie Mae Stripped Mortgage-Backed Securities:
sequential payer Series 377 Class 1, 10/1/36 (i)	3,691		3,237
Series 339 Class 29, 5.5% 7/1/18 (h)	1,799		139
Series 348 Class 14, 6.5% 8/1/34 (h)	864		119
Series 351:
Class 12, 5.5% 4/1/34 (h)	650		65
Class 13, 6% 3/1/34 (h)	828		98
Series 359, Class 19 6% 7/1/35 (h)	838		97
Series 384 Class 6, 5% 7/25/37 (h)	4,427		490
Fannie Mae subordinate REMIC pass-thru certificates:
floater:
Series 2007-36 Class FG, 0.8738% 4/25/37 (g)	3,035		2,969
Series 2007-57 Class FA, 0.7038% 6/25/37 (g)	7,484		7,310
planned amortization class:
Series 1999-32 Class PL, 6% 7/25/29	3,902		4,068
Series 2001-52 Class YZ, 6.5% 10/25/31	211		221
Series 2001-63 Class TC, 6% 12/25/31	4,065		4,223
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Fannie Mae subordinate REMIC pass-thru certificates: - continued
planned amortization class:
Series 2001-72 Class NZ, 6% 12/25/31	$ 1,196		$ 1,238
Series 2005-14 Class ME, 5% 10/25/33	1,785		1,801
Series 2005-39 Class TE, 5% 5/25/35	1,120		1,105
Series 2005-73 Class SA, 16.3183% 8/25/35 (g)	912		976
sequential payer:
Series 2001-20 Class Z, 6% 5/25/31	4,621		4,790
Series 2001-31 Class ZC, 6.5% 7/25/31	1,615		1,695
Series 2002-16 Class ZD, 6.5% 4/25/32	710		741
Series 2002-79 Class Z, 5.5% 11/25/22	2,208		2,246
Series 2003-80 Class CG, 6% 4/25/30	595		620
Series 2005-41 Class LA, 5.5% 5/25/35	3,179		3,281
Series 1999-33 Class PK, 6% 7/25/29	2,596		2,702
Series 2001-63 Class PG, 6% 12/25/31	1,943		2,017
Series 2001-74 Class QE, 6% 12/25/31	1,846		1,916
Series 2003-21 Class SK, 7.6263% 3/25/33 (g)(h)(j)	819		94
Series 2003-3 Class HS, 7.1763% 9/25/16 (g)(h)(j)	49		1
Series 2003-35:
Class BS, 6.5263% 4/25/17 (g)(h)(j)	547		19
Class TQ, 7.0263% 5/25/18 (g)(h)	719		63
Series 2003-42:
Class HS, 6.6263% 12/25/17 (g)(h)(j)	6,606		475
Class SJ, 6.5763% 11/25/22 (g)(h)	923		75
Series 2003-48 Class HI, 5% 11/25/17 (h)	2,691		198
Series 2004-54 Class SW, 5.5263% 6/25/33 (g)(h)(j)	3,711		226
Series 2006-4 Class IT, 6% 10/25/35 (h)	421		35
Series 2007-36:
Class GO, 4/25/37 (i)	486		380
Class SG, 6.1263% 4/25/37 (g)(h)(j)	6,302		544
Series 2007-57 Class SA, 37.7775% 6/25/37 (g)(j)	4,712		6,318
Series 2007-66:
Class FB, 0.8738% 7/25/37 (g)	1,995		1,960
Class SA, 36.7575% 7/25/37 (g)(j)	3,111		3,929
Class SB, 36.7575% 7/25/37 (g)(j)	937		1,264
Freddie Mac:
floater Series 3318:
Class CY, 0% 11/15/36 (g)	186		183
Class GY, 0% 5/15/37 (g)	216		210
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac: - continued
planned amortization class:
Series 2095 Class PE, 6% 11/15/28 (e)	$ 4,890		$ 5,074
Series 2104 Class PG, 6% 12/15/28	1,457		1,511
Series 2162 Class PH, 6% 6/15/29	332		346
Series 70 Class C, 9% 9/15/20	98		106
sequential payer Series 2114 Class ZM, 6% 1/15/29	704		734
Freddie Mac Manufactured Housing participation certificates guaranteed planned amortization class Series 2043 Class CJ, 6.5% 4/15/28	1,687		1,754
Freddie Mac Multi-class participation certificates guaranteed:
floater:
Series 2958 Class TF, 0% 4/15/35 (g)	500		425
Series 3129 Class MF, 0% 7/15/34 (g)	352		340
Series 3222 Class HF, 0% 9/15/36 (g)	531		485
planned amortization class:
Series 2121 Class MG, 6% 2/15/29	1,907		1,988
Series 2131 Class BG, 6% 3/15/29	7,676		7,973
Series 2137 Class PG, 6% 3/15/29	1,845		1,913
Series 2154 Class PT, 6% 5/15/29	2,883		3,004
Series 2435 Class VG, 6% 2/15/13	655		675
Series 2488 Class PR, 6% 8/15/32	1,018		1,058
Series 2520 Class BE, 6% 11/15/32	1,970		2,050
Series 2585 Class KS, 7.145% 3/15/23 (g)(h)(j)	471		33
Series 2590 Class YR, 5.5% 9/15/32 (h)	135		18
Series 2802 Class OB, 6% 5/15/34 (d)(e)	3,375		3,458
Series 2810 Class PD, 6% 6/15/33	2,540		2,649
Series 3077 Class TO, 4/15/35 (i)	3,993		3,168
sequential payer:
Series 2135 Class JE, 6% 3/15/29	2,186		2,279
Series 2274 Class ZM, 6.5% 1/15/31	755		794
Series 2281 Class ZB, 6% 3/15/30	912		952
Series 2388 Class ZA, 6% 12/15/31	4,725		4,901
Series 2417 Class KZ, 6% 2/15/32	1,017		1,056
Series 2502 Class ZC, 6% 9/15/32	1,696		1,759
Series 2504 Class Z, 6% 9/15/32	1,469		1,528
Series 2564 Class ES, 7.145% 2/15/22 (g)(h)(j)	757		49
Series 2575 Class ID, 5.5% 8/15/22 (h)	127		11
Series 2750 Class ZT, 5% 2/15/34	2,785		2,645
Series 2817 Class SD, 6.595% 7/15/30 (g)(h)(j)	1,383		89
Series 3097 Class IA, 5.5% 3/15/33 (h)	3,677		308
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed: - continued
Series 1658 Class GZ, 7% 1/15/24	$ 2,111		$ 2,183
Series 2587 Class IM, 6.5% 3/15/33 (h)	1,373		176
Series 2844:
Class SC, 43.8425% 8/15/24 (g)(j)	97		135
Class SD, 80.535% 8/15/24 (g)(j)	141		300
Series 2957 Class SW, 5.545% 4/15/35 (g)(h)	5,713		302
Series 3002 Class SN, 6.045% 7/15/35 (g)(h)(j)	5,727		415
Ginnie Mae guaranteed REMIC pass-thru securities:
sequential payer Series 2002-42 Class ZA, 6% 6/20/32	1,847		1,921
Series 2003-11 Class S, 6.095% 2/16/33 (g)(h)(j)	4,467		337
Series 2004-32 Class GS, 6.5% 5/16/34 (g)(h)(j)	1,293		102
TOTAL U.S. GOVERNMENT AGENCY			139,712
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $201,079)		181,188
Commercial Mortgage Securities - 2.1%
Asset Securitization Corp. Series 1997-D5:
Class A-6, 7.4181% 2/14/43 (g)	8,300		6,980
Class PS1, 1.5863% 2/14/43 (g)(h)	15,229		540
Bayview Commercial Asset Trust floater:
Series 2006-3A:
Class B1, 1.2738% 10/25/36 (a)(g)	256		79
Class B2, 1.8238% 10/25/36 (a)(g)	167		49
Class B3, 3.0738% 10/25/36 (a)(g)	300		67
Class M4, 0.9038% 10/25/36 (a)(g)	256		111
Class M5, 0.9538% 10/25/36 (a)(g)	326		130
Class M6, 1.0338% 10/25/36 (a)(g)	632		237
Series 2006-4A:
Class B1, 1.1738% 12/25/36 (a)(g)	100		20
Class B2, 1.7238% 12/25/36 (a)(g)	96		44
Class B3, 2.9238% 12/25/36 (a)(g)	178		78
Series 2007-1:
Class B1, 1.1438% 3/25/37 (a)(g)	148		52
Class B2, 1.6238% 3/25/37 (a)(g)	108		34
Class B3, 3.8238% 3/25/37 (a)(g)	308		90
Class M1, 0.7438% 3/25/37 (a)(g)	124		67
Commercial Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Bayview Commercial Asset Trust floater: - continued
Series 2007-1:
Class M2, 0.7638% 3/25/37 (a)(g)	$ 96		$ 50
Class M3, 0.7938% 3/25/37 (a)(g)	84		42
Class M4, 0.8438% 3/25/37 (a)(g)	64		31
Class M5, 0.8938% 3/25/37 (a)(g)	104		47
Class M6, 0.9738% 3/25/37 (a)(g)	148		59
Series 2007-2A:
Class B1, 2.0738% 7/25/37 (a)(g)	115		37
Class B2, 2.7238% 7/25/37 (a)(g)	98		30
Class B3, 3.8238% 7/25/37 (a)(g)	111		33
Class M4, 1.1238% 7/25/37 (a)(g)	142		59
Class M5, 1.2238% 7/25/37 (a)(g)	129		51
Class M6, 1.4738% 7/25/37 (a)(g)	160		59
Series 2007-3:
Class B1, 1.4238% 7/25/37 (a)(g)	100		48
Class B2, 2.0738% 7/25/37 (a)(g)	263		125
Class B3, 4.4738% 7/25/37 (a)(g)	136		62
Class M1, 0.7838% 7/25/37 (a)(g)	89		52
Class M2, 0.8138% 7/25/37 (a)(g)	93		52
Class M3, 0.8438% 7/25/37 (a)(g)	150		79
Class M4, 0.9738% 7/25/37 (a)(g)	239		125
Class M5, 1.0738% 7/25/37 (a)(g)	120		61
Class M6, 1.2738% 7/25/37 (a)(g)	93		47
Series 2007-4A:
Class B1, 3.0238% 9/25/37 (a)(g)	136		43
Class B2, 3.9238% 9/25/37 (a)(g)	504		148
CDC Commercial Mortgage Trust Series 2002-FX1 Class XCL, 0.908% 5/15/35 (a)(g)(h)	26,920		1,063
Chase Commercial Mortgage Securities Corp. Series 1999-2:
Class E, 7.734% 1/15/32	1,110		1,072
Class F, 7.734% 1/15/32	600		575
Credit Suisse Commercial Mortgage Trust sequential payer:
Series 2007-C2 Class A1, 5.269% 1/15/49	564		550
Series 2007-C3 Class A1, 5.664% 6/15/39 (g)	652		638
Credit Suisse First Boston Mortgage Securities Corp. floater:
Series 2006-TF2A:
Class A2, 1.9613% 7/15/19 (a)(g)	175		35
Class SHDC, 1.4613% 7/15/19 (a)(g)	84		21
Series 2006-TFL2 Class SHDD, 1.8113% 7/15/19 (a)(g)	47		10
Commercial Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Credit Suisse Mortgage Capital Certificates sequential payer Series 2007-C1 Class A1, 5.227% 2/15/40	$ 684		$ 668
GS Mortgage Securities Corp. II floater Series 2007-EOP:
Class C, 0.765% 3/6/20 (a)(g)	780		499
Class D, 0.815% 3/6/20 (a)(g)	235		150
Class F, 0.925% 3/6/20 (a)(g)	195		119
Class G, 0.965% 3/6/20 (a)(g)	95		57
Class H, 1.095% 3/6/20 (a)(g)	160		96
Class J, 1.295% 3/6/20 (a)(g)	230		131
GS Mortgage Securities Trust sequential payer Series 2007-GG10 Class A1, 5.69% 8/10/45	1,110		883
JPMorgan Chase Commercial Mortgage Securities Trust sequential payer Series 2007-LDP10 Class A1, 5.122% 1/15/49	633		614
LB-UBS Commercial Mortgage Trust:
sequential payer:
Series 2006-C7 Class A1, 5.279% 11/15/38	402		393
Series 2007-C1 Class A1, 5.391% 2/15/40 (g)	568		555
Series 2007-C2 Class A1, 5.226% 2/15/40	514		502
Series 2004-C2 Class XCP, 0.8376% 3/15/36 (a)(g)(h)	62,797		1,229
Series 2007-C1 Class XCP, 0.4751% 2/15/40 (g)(h)	14,259		227
Merrill Lynch-CFC Commercial Mortgage Trust sequential payer:
Series 2007-5 Class A1, 4.275% 12/12/11	479		460
Series 2007-6 Class A1, 5.175% 3/12/51	564		549
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $28,796)		21,014

Cash Equivalents - 3.0%
	Maturity Amount (000s)		Value (000s)
Investments in repurchase agreements in a joint trading account at 0.26%, dated 2/27/09 due 3/2/09 (Collateralized by U.S. Government Obligations) # (Cost $30,805)	$ 30,806		$ 30,805
TOTAL INVESTMENT PORTFOLIO - 142.6% (Cost $1,501,847)			1,466,639
NET OTHER ASSETS - (42.6)%			(438,062)
NET ASSETS - 100%		$ 1,028,577

Futures Contracts
	Expiration Date	Underlying Face Amount at Value (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Sold
Treasury Contracts
48 CBOT 2 Year U.S. Treasury Notes Index Contracts	July 2009	$ 10,397	$ (5)

The face value of futures sold as a percentage of net assets - 1%

Swap Agreements
		Notional Amount (000s)	Value (000s)
Credit Default Swaps
Receive monthly notional amount multiplied by 2.22% and pay JPMorgan Chase, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2005-HE3 Class B2, 6.87% 7/25/35 (Rating-Caa2) (f)	August 2035	$ 1,000	$ (938)
Swap Agreements - continued
	Expiration Date	Notional Amount (000s)	Value (000s)
Interest Rate Swaps
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 2.5425% with Credit Suisse First Boston	Jan. 2019	$ 530	$ 35
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 3.41% with Credit Suisse First Boston	Sept. 2010	57,000	(2,329)
TOTAL INTEREST RATE SWAPS		57,530	(2,294)
		$ 58,530	$ (3,232)

Legend

(a) 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. At the end of the period, the value of these securities amounted to $19,559,000 or 1.9% of net assets.

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(c) A portion of the security is subject to a forward commitment to sell.

(d) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $133,000.

(e) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $3,915,000.

(f) Represents a credit default swap contract in which the fund has sold protection on the underlying reference entity. For the underlying reference entity, ratings disclosed are from Moody's Investor Services, Inc. Where Moody's ratings are not available, S&P ratings are disclosed and are indicated as such. Any underlying reference entity which is Not Rated (NR) by Moody's or S&P is designated as such. All ratings are as of the report date and do not reflect subsequent changes.

(g) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(h) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.

(i) Principal Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans.

(j) Coupon is inversely indexed to a floating interest rate multiplied by a specified factor. The price may be considerably more volatile than the price of a comparable fixed rate security.

* Amount represents less than $1,000.

# Additional Information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value (Amounts in thousands)
$30,805,000 due 3/02/09 at 0.26%
Goldman, Sachs & Co.	$ 12,079
UBS Securities LLC	18,726
	$ 30,805

Other Information

The following is a summary of the inputs used, as of February 28, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:
Description (Amounts in thousands)	Total	Level 1	Level 2	Level 3
Investments in Securities	$ 1,466,639	$ -	$ 1,443,311	$ 23,328
Other Financial Instruments*	$ (3,467)	$ (5)	$ (2,524)	$ (938)

* Other financial instruments include Futures Contracts, Swap Agreements and Forward Commitments.

The following is a reconciliation of assets for which Level 3 inputs were used in determining value:

(Amounts in thousands)	Investments in Securities	Other Financial Instruments
Beginning Balance	$ 2,301	$ (804)
Total Realized Gain (Loss)	71	- *
Total Unrealized Gain (Loss)	(10,087)	756
Cost of Purchases	9,218	-
Proceeds of Sales	(3,511)	-
Amortization/Accretion	(1,753)	-
Transfer in/out of Level 3	27,089	(890)
Ending Balance	$ 23,328	$ (938)

* The realized gain (loss) for derivative instruments is not included in the rollforward. For the period, the realized gain (loss) on these instruments totaled $(897,000).

The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities or Other Financial Instruments identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period.

Income Tax Information

At August 31, 2008, the fund had a capital loss carryforward of approximately $34,825,000 of which $2,470,000, $14,312,000, $3,550,000 and $14,493,000 will expire on August 31, 2013, 2014, 2015 and 2016, respectively.

The fund intends to elect to defer to its fiscal year ending August 31, 2009 approximately $107,093,000 of losses recognized during the period November 1, 2007 to August 31, 2008.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amounts)	February 28, 2009 (Unaudited)
Assets
Investment in securities, at value (including repurchase agreements of $30,805) - See accompanying schedule: Unaffiliated issuers (cost $1,501,847)		$ 1,466,639
Commitment to sell securities on a delayed delivery basis	$ (303,051)
Receivable for securities sold on a delayed delivery basis	302,821	(230)
Receivable for investments sold, regular delivery		23,417
Cash		8
Receivable for swap agreements		4
Receivable for fund shares sold		593
Interest receivable		5,483
Other receivables		114
Unrealized appreciation on swap agreements		35
Total assets		1,496,063
Liabilities
Payable for investments purchased Regular delivery	$ 601
Delayed delivery	460,377
Payable for swap agreements	920
Payable for fund shares redeemed	1,345
Distributions payable	389
Unrealized depreciation on swap agreements	3,267
Accrued management fee	277
Distribution fees payable	50
Payable for daily variation on futures contracts	16
Other affiliated payables	128
Other payables and accrued expenses	116
Total liabilities		467,486
Net Assets		$ 1,028,577
Net Assets consist of:
Paid in capital		$ 1,204,419
Distributions in excess of net investment income		(6,099)
Accumulated undistributed net realized gain (loss) on investments		(131,068)
Net unrealized appreciation (depreciation) on investments		(38,675)
Net Assets		$ 1,028,577

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

Amounts in thousands (except per-share amounts)	February 28, 2009 (Unaudited)
Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($44,431 ÷ 4,438 shares)		$ 10.01
Maximum offering price per share (100/96.00 of $10.01)		$ 10.43
Class T: Net Asset Value and redemption price per share ($39,460 ÷ 3,935 shares)		$ 10.03
Maximum offering price per share (100/96.00 of $10.03)		$ 10.45
Class B: Net Asset Value and offering price per share ($25,108 ÷ 2,508 shares)A		$ 10.01
Class C: Net Asset Value and offering price per share ($16,272 ÷ 1,627 shares)A		$ 10.00
Fidelity Mortgage Securities Fund: Net Asset Value, offering price and redemption price per share ($895,783 ÷ 89,286 shares)		$ 10.03
Institutional Class: Net Asset Value, offering price and redemption price per share ($7,523 ÷ 752 shares)		$ 10.00

^A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

Amounts in thousands	Six months ended February 28, 2009 (Unaudited)
Investment Income
Interest		$ 29,298
Expenses
Management fee	$ 1,750
Transfer agent fees	645
Distribution fees	309
Fund wide operations fee	162
Independent trustees' compensation	2
Miscellaneous	5
Total expenses before reductions	2,873
Expense reductions	(1)	2,872
Net investment income		26,426
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	11,233
Futures contracts	(539)
Swap agreements	(781)
Total net realized gain (loss)		9,913
Change in net unrealized appreciation (depreciation) on: Investment securities	(17,972)
Futures contracts	99
Swap agreements	(1,225)
Delayed delivery commitments	1,326
Total change in net unrealized appreciation (depreciation)		(17,772)
Net gain (loss)		(7,859)
Net increase (decrease) in net assets resulting from operations		$ 18,567

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

Amounts in thousands	Six months ended February 28, 2009 (Unaudited)	Year ended August 31, 2008
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 26,426	$ 65,979
Net realized gain (loss)	9,913	(102,798)
Change in net unrealized appreciation (depreciation)	(17,772)	41,977
Net increase (decrease) in net assets resulting from operations	18,567	5,158
Distributions to shareholders from net investment income	(27,059)	(68,876)
Share transactions - net increase (decrease)	(146,241)	(404,510)
Total increase (decrease) in net assets	(154,733)	(468,228)
Net Assets
Beginning of period	1,183,310	1,651,538
End of period (including distributions in excess of net investment income of $6,099 and distributions in excess of net investment income of $5,466, respectively)	$ 1,028,577	$ 1,183,310

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.33	$ 11.30	$ 11.26
Income from Investment Operations
Net investment income E	.226	.467	.521	.404	.408	.365	.282
Net realized and unrealized gain (loss)	(.073)	(.461)	(.401)	(.021)	(.267)	.181	.112
Total from investment operations	.153	.006	.120	.383	.141	.546	.394
Distributions from net investment income	(.233)	(.486)	(.520)	(.403)	(.421)	(.366)	(.274)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.233)	(.486)	(.520)	(.403)	(.481)	(.516)	(.354)
Net asset value, end of period	$ 10.01	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.33	$ 11.30
Total Return B, C, D	1.54%	.06%	1.04%	3.56%	1.26%	4.97%	3.56%
Ratios to Average Net Assets G
Expenses before reductions	.86% A	.85%	.79%	.74% A	.82%	.86%	.81%
Expenses net of fee waivers, if any	.86% A	.85%	.79%	.74% A	.82%	.86%	.81%
Expenses net of all reductions	.86% A	.85%	.78%	.74% A	.82%	.86%	.81%
Net investment income	4.54% A	4.52%	4.77%	4.44% A	3.65%	3.24%	2.51%
Supplemental Data
Net assets, end of period (in millions)	$ 44	$ 39	$ 54	$ 54	$ 50	$ 55	$ 69
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class T

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.11	$ 10.59	$ 10.99	$ 11.00	$ 11.34	$ 11.31	$ 11.28
Income from Investment Operations
Net investment income E	.227	.470	.519	.399	.400	.353	.270
Net realized and unrealized gain (loss)	(.074)	(.462)	(.403)	(.012)	(.268)	.181	.101
Total from investment operations	.153	.008	.116	.387	.132	.534	.371
Distributions from net investment income	(.233)	(.488)	(.516)	(.397)	(.412)	(.354)	(.261)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.233)	(.488)	(.516)	(.397)	(.472)	(.504)	(.341)
Net asset value, end of period	$ 10.03	$ 10.11	$ 10.59	$ 10.99	$ 11.00	$ 11.34	$ 11.31
Total Return B, C, D	1.54%	.07%	1.01%	3.59%	1.18%	4.86%	3.34%
Ratios to Average Net Assets G
Expenses before reductions	.86% A	.83%	.82%	.81% A	.89%	.96%	.93%
Expenses net of fee waivers, if any	.86% A	.83%	.82%	.81% A	.89%	.96%	.93%
Expenses net of all reductions	.86% A	.83%	.82%	.81% A	.89%	.96%	.93%
Net investment income	4.54% A	4.53%	4.73%	4.37% A	3.57%	3.14%	2.39%
Supplemental Data
Net assets, end of period (in millions)	$ 39	$ 41	$ 68	$ 89	$ 126	$ 131	$ 155
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class B

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.32	$ 11.30	$ 11.26
Income from Investment Operations
Net investment income E	.194	.400	.443	.336	.323	.278	.197
Net realized and unrealized gain (loss)	(.073)	(.461)	(.401)	(.022)	(.257)	.172	.112
Total from investment operations	.121	(.061)	.042	.314	.066	.450	.309
Distributions from net investment income	(.201)	(.419)	(.442)	(.334)	(.336)	(.280)	(.189)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.201)	(.419)	(.442)	(.334)	(.396)	(.430)	(.269)
Net asset value, end of period	$ 10.01	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.32	$ 11.30
Total Return B, C, D	1.21%	(.58)%	.32%	2.91%	.58%	4.08%	2.78%
Ratios to Average Net Assets G
Expenses before reductions	1.51% A	1.50%	1.50%	1.50% A	1.58%	1.63%	1.57%
Expenses net of fee waivers, if any	1.51% A	1.50%	1.50%	1.50% A	1.58%	1.63%	1.57%
Expenses net of all reductions	1.51% A	1.50%	1.50%	1.50% A	1.58%	1.63%	1.57%
Net investment income	3.89% A	3.86%	4.05%	3.68% A	2.89%	2.48%	1.75%
Supplemental Data
Net assets, end of period (in millions)	$ 25	$ 32	$ 50	$ 74	$ 101	$ 134	$ 182
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class C

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.08	$ 10.56	$ 10.96	$ 10.98	$ 11.31	$ 11.29	$ 11.25
Income from Investment Operations
Net investment income E	.188	.389	.434	.328	.316	.273	.189
Net realized and unrealized gain (loss)	(.072)	(.459)	(.401)	(.021)	(.257)	.172	.112
Total from investment operations	.116	(.070)	.033	.307	.059	.445	.301
Distributions from net investment income	(.196)	(.410)	(.433)	(.327)	(.329)	(.275)	(.181)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.196)	(.410)	(.433)	(.327)	(.389)	(.425)	(.261)
Net asset value, end of period	$ 10.00	$ 10.08	$ 10.56	$ 10.96	$ 10.98	$ 11.31	$ 11.29
Total Return B, C, D	1.17%	(.68)%	.25%	2.85%	.52%	4.04%	2.71%
Ratios to Average Net Assets G
Expenses before reductions	1.61% A	1.60%	1.58%	1.57% A	1.64%	1.68%	1.64%
Expenses net of fee waivers, if any	1.61% A	1.60%	1.58%	1.57% A	1.64%	1.68%	1.64%
Expenses net of all reductions	1.61% A	1.60%	1.58%	1.57% A	1.64%	1.68%	1.64%
Net investment income	3.79% A	3.77%	3.97%	3.61% A	2.82%	2.42%	1.68%
Supplemental Data
Net assets, end of period (in millions)	$ 16	$ 15	$ 23	$ 31	$ 41	$ 58	$ 99
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Fidelity Mortgage Securities Fund

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 E	2005 G	2004 G	2003 G
Selected Per-Share Data
Net asset value, beginning of period	$ 10.11	$ 10.59	$ 10.99	$ 11.01	$ 11.34	$ 11.31	$ 11.28
Income from Investment Operations
Net investment income D	.247	.509	.559	.432	.438	.390	.306
Net realized and unrealized gain (loss)	(.074)	(.462)	(.403)	(.023)	(.257)	.183	.102
Total from investment operations	.173	.047	.156	.409	.181	.573	.408
Distributions from net investment income	(.253)	(.527)	(.556)	(.429)	(.451)	(.393)	(.298)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.253)	(.527)	(.556)	(.429)	(.511)	(.543)	(.378)
Net asset value, end of period	$ 10.03	$ 10.11	$ 10.59	$ 10.99	$ 11.01	$ 11.34	$ 11.31
Total Return B, C	1.74%	.46%	1.38%	3.80%	1.61%	5.21%	3.68%
Ratios to Average Net Assets F
Expenses before reductions	.45% A	.45%	.45%	.45% A	.55%	.62%	.60%
Expenses net of fee waivers, if any	.45% A	.45%	.45%	.45% A	.55%	.62%	.60%
Expenses net of all reductions	.45% A	.45%	.45%	.45% A	.55%	.62%	.60%
Net investment income	4.94% A	4.91%	5.10%	4.73% A	3.91%	3.48%	2.72%
Supplemental Data
Net assets, end of period (in millions)	$ 896	$ 1,049	$ 1,446	$ 1,612	$ 1,807	$ 1,525	$ 1,302
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Institutional Class

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 E	2005 G	2004 G	2003 G
Selected Per-Share Data
Net asset value, beginning of period	$ 10.08	$ 10.56	$ 10.97	$ 10.98	$ 11.32	$ 11.29	$ 11.25
Income from Investment Operations
Net investment income D	.242	.499	.548	.424	.432	.387	.302
Net realized and unrealized gain (loss)	(.073)	(.461)	(.411)	(.011)	(.266)	.182	.112
Total from investment operations	.169	.038	.137	.413	.166	.569	.414
Distributions from net investment income	(.249)	(.518)	(.547)	(.423)	(.446)	(.389)	(.294)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.249)	(.518)	(.547)	(.423)	(.506)	(.539)	(.374)
Net asset value, end of period	$ 10.00	$ 10.08	$ 10.56	$ 10.97	$ 10.98	$ 11.32	$ 11.29
Total Return B, C	1.71%	.37%	1.20%	3.85%	1.48%	5.19%	3.75%
Ratios to Average Net Assets F
Expenses before reductions	.53% A	.54%	.53%	.52% A	.60%	.66%	.63%
Expenses net of fee waivers, if any	.53% A	.54%	.53%	.52% A	.60%	.66%	.63%
Expenses net of all reductions	.53% A	.54%	.53%	.52% A	.60%	.66%	.63%
Net investment income	4.87% A	4.83%	5.02%	4.66% A	3.87%	3.45%	2.69%
Supplemental Data
Net assets, end of period (in millions)	$ 8	$ 7	$ 10	$ 14	$ 16	$ 13	$ 16
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Notes to Financial Statements

For the period ended February 28, 2009 (Unaudited)

(Amounts in thousands except ratios)

1. Organization.

Fidelity Advisor Mortgage Securities Fund (the Fund) is a fund of Fidelity Advisor Series II (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Fidelity Mortgage Securities Fund, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

2. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Fund uses independent pricing services approved by the Board of Trustees to value its investments.

Debt securities, including restricted securities, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Swaps are marked-to-market daily based on valuations from independent pricing services or dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Investments in open-end mutual funds are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value. Actual prices received at disposition may differ.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Significant Accounting Policies - continued

Security Valuation - continued

When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.

The Fund adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:

Level 1	Quoted prices in active markets for identical securities.
Level 2	Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3	Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.

The aggregate value by input level, as of February 28, 2009, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.

Semiannual Report

2. Significant Accounting Policies - continued

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years.

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to futures transactions, swap agreements, market discount, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation	$ 26,595
Unrealized depreciation	(61,807)
Net unrealized appreciation (depreciation)	$ (35,212)
Cost for federal income tax purposes	$ 1,501,851

New Accounting Pronouncement. In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for reporting periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance.

3. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Delayed Delivery Transactions and When-Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of

Semiannual Report

3. Operating Policies - continued

Delayed Delivery Transactions and When-Issued Securities - continued

Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Futures Contracts. The Fund may use futures contracts to manage its exposure to the bond market and to fluctuations in interest rates. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms.

Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.

Swap Agreements. The Fund entered into swap agreements, which are contracts between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gains or

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

3. Operating Policies - continued

Swap Agreements - continued

losses in the Fund's accompanying Statement of Operations. Gains or losses are realized in the event of an early termination of a swap agreement. Risks of loss may exceed amounts recognized on the Fund's Statement of Assets and Liabilities. Risks of loss may include unfavorable changes in the returns of the underlying instruments or indexes, adverse fluctuations of interest rates, failure of the counterparty to perform under the terms of the agreement and lack of liquidity in the market. Details of swap agreements open at period end are included in the Fund's Schedule of Investments under the caption "Swap Agreements." Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian bank in accordance with the swap agreement and if required, is identified in the Fund's Schedule of Investments. The Fund could experience delays and costs in gaining access to the collateral even though it is held in the Fund's custodian bank.

The Fund entered into interest rate swap agreements to manage its exposure to interest rate changes. Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates (e.g. fixed rate, floating rate), applied to a notional principal amount. Changes in interest rates can have a negative effect on both the value of the Fund's bond holdings as well as the amount of interest income earned. In general, the value of bonds can fall when interest rates rise and can rise when interest rates fall.

The Fund entered into credit default swap agreements to provide a measure of protection against defaults of an issuer ("buyer of protection") and/or to gain credit exposure to an issuer to which it is not otherwise exposed ("seller of protection"). The issuer may be either a single issuer or a "basket" of issuers. As a buyer of protection, the Fund does so when it holds bonds of the issuer or without owning the underlying asset or debt issued by the reference entity. Under the terms of a credit default swap the buyer of protection (buyer) receives credit protection in exchange for making periodic payments to the seller of protection (seller) based on a fixed percentage applied to a notional principal amount. In return for these payments, the seller acts as a guarantor of the credit worthiness of a reference obligation. Any upfront payments made or received upon entering a credit default swap contract would be amortized or accreted over the life of the swap and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Periodic payments are made over the life of the contract provided that no credit event occurs. For credit default swaps on asset-backed securities, a credit event may be triggered by events such as failure to pay principal, maturity extension, rating downgrade or write-down. For credit default swaps on corporate or sovereign issuers, a credit event

Semiannual Report

3. Operating Policies - continued

Swap Agreements - continued

may be triggered by events such as bankruptcy, failure to pay, obligation acceleration, repudiation/moratorium or restructuring. If a credit event were to occur during the term of the contract, upon notification from the buyer, the seller is obligated to take delivery from the buyer the notional amount of a reference obligation, at par. The difference between the value of the obligation received and the notional amount paid is recorded as a realized loss to the seller. For credit default swaps on asset-backed securities, the reference obligation described represents the security that will be put to the seller. For credit default swaps on corporate or sovereign issuers, under the terms of the agreement, the obligation that is put to the seller is not limited to the specific reference obligation described in the Fund's Schedule of Investments.

The notional amount of credit default swaps is included in the Fund's Schedule of Investments and approximates the maximum potential amount of future payments that the Fund could be required to make if the Fund is the seller of protection and a credit event were to occur. The total notional amount of all credit default swaps open at period end where the Fund is the seller of protection amounted to $1,000 representing 0.0% of net assets.

The value of each credit default swap and credit rating disclosed for each reference obligation in the Fund's Schedule of Investments, where the Fund is the seller of protection, are both measures of the current payment/performance risk of the swap. As the value of the swap changes as a positive or negative percentage of the total notional amount, the payment/performance risk may decrease or increase, respectively. Any current or future declines in the value of the swap may be partially offset by upfront payments received by the Fund as the seller of protection if applicable. In addition to these measures, FMR monitors a variety of factors including cash flow assumptions, market activity and market sentiment as part of its ongoing process of assessing payment/performance risk.

4. Purchases and Sales of Investments.

Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $31,179 and $51,239, respectively.

5. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20%

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

5. Fees and Other Transactions with Affiliates - continued

Management Fee - continued

of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .32% of the Fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

	Distribution Fee	Service Fee	Paid to FDC	Retained by FDC
Class A	0%	.25%	$ 53	$ 4
Class T	0%	.25%	51	1
Class B	.65%	.25%	127	92
Class C	.75%	.25%	78	5
			$ 309	$ 102

Sales Load. FDC receives a front-end sales charge of up to 4.00% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, ..75% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

	Retained by FDC
Class A	$ 2
Class T	1
Class B*	20
Class C*	2
	$ 25

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Semiannual Report

5. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of each respective class of the Fund, with the exception of Fidelity Mortgage Securities Fund. FIIOC receives an asset-based fee of .10% of Fidelity Mortgage Securities Fund's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:

	Amount	% of Average Net Assets*
Class A	$ 53	.25
Class T	51	.25
Class B	35	.25
Class C	19	.25
Fidelity Mortgage Securities Fund	479	.10
Institutional Class	8	.18
	$ 645

* Annualized

Fundwide Operations Fee. Pursuant to the Fundwide Operations and Expense Agreement (FWOE), FMR has agreed to provide for fund level expenses (which do not include transfer agent, Rule 12b-1 fees, compensation of the independent Trustees, interest (including commitment fees), taxes or extraordinary expenses, if any) in return for a FWOE fee equal to .35% less the total amount of the management fee. The FWOE paid by the Fund is reduced by an amount equal to the fees and expenses paid to the independent Trustees. For the period, the FWOE fee was equivalent to an annualized rate of .03% of average net assets.

6. Committed Line of Credit.

The Fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

7. Expense Reductions.

Through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's management fee by $1.

8. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

	Six months ended February 28, 2009	Year ended August 31, 2008
From net investment income
Class A	$ 988	$ 2,205
Class T	944	2,500
Class B	559	1,654
Class C	305	733
Fidelity Mortgage Securities Fund	24,054	61,360
Institutional Class	209	424
Total	$ 27,059	$ 68,876

9. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class A
Shares sold	1,323	1,233	$ 13,269	$ 12,720
Reinvestment of distributions	82	189	825	1,952
Shares redeemed	(853)	(2,645)	(8,577)	(27,288)
Net increase (decrease)	552	(1,223)	$ 5,517	$ (12,616)
Class T
Shares sold	756	652	$ 7,676	$ 6,745
Reinvestment of distributions	88	227	881	2,348
Shares redeemed	(945)	(3,306)	(9,499)	(34,313)
Net increase (decrease)	(101)	(2,427)	$ (942)	$ (25,220)
Class B
Shares sold	114	74	$ 1,147	$ 761
Reinvestment of distributions	47	133	470	1,376
Shares redeemed	(812)	(1,820)	(8,157)	(18,803)
Net increase (decrease)	(651)	(1,613)	$ (6,540)	$ (16,666)

Semiannual Report

9. Share Transactions - continued

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class C
Shares sold	418	130	$ 4,222	$ 1,330
Reinvestment of distributions	24	57	235	589
Shares redeemed	(314)	(838)	(3,153)	(8,656)
Net increase (decrease)	128	(651)	$ 1,304	$ (6,737)
Fidelity Mortgage Securities Fund
Shares sold	6,701	12,801	$ 67,565	$ 131,962
Reinvestment of distributions	2,218	5,511	22,222	57,031
Shares redeemed	(23,384)	(51,088)	(235,660)	(529,926)
Net increase (decrease)	(14,465)	(32,776)	$ (145,873)	$ (340,933)
Institutional Class
Shares sold	391	224	$ 3,934	$ 2,294
Reinvestment of distributions	15	32	149	335
Shares redeemed	(378)	(482)	(3,790)	(4,967)
Net increase (decrease)	28	(226)	$ 293	$ (2,338)

10. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

11. Credit Risk.

The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers backed by residential mortgage loans, credit card receivables and automotive loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Investments Money Management, Inc.

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan), Inc.

Fidelity Research & Analysis Company

FIL Investment Advisors

FIL Investment Advisors
(U.K.) Ltd.

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York Mellon

New York, NY

AMORI-USAN-0409
1.784899.106

Fidelity
Mortgage Securities
Fund

(A Class of Fidelity® Advisor Mortgage
Securities Fund)

Semiannual Report

February 28, 2009

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message	<Click Here>	Ned Johnson's message to shareholders.
Shareholder Expense Example	<Click Here>	An example of shareholder expenses.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.

One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.

You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).

A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.

We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2008 to February 28, 2009).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio	Beginning Account Value September 1, 2008	Ending Account Value February 28, 2009	Expenses Paid During Period* September 1, 2008 to February 28, 2009
Class A	.86%
Actual		$ 1,000.00	$ 1,015.40	$ 4.30
HypotheticalA		$ 1,000.00	$ 1,020.53	$ 4.31
Class T	.86%
Actual		$ 1,000.00	$ 1,015.40	$ 4.30
HypotheticalA		$ 1,000.00	$ 1,020.53	$ 4.31
Class B	1.51%
Actual		$ 1,000.00	$ 1,012.10	$ 7.53
HypotheticalA		$ 1,000.00	$ 1,017.31	$ 7.55
Class C	1.61%
Actual		$ 1,000.00	$ 1,011.70	$ 8.03
HypotheticalA		$ 1,000.00	$ 1,016.81	$ 8.05
Fidelity Mortgage Securities Fund	.45%
Actual		$ 1,000.00	$ 1,017.40	$ 2.25
HypotheticalA		$ 1,000.00	$ 1,022.56	$ 2.26
Institutional Class	.53%
Actual		$ 1,000.00	$ 1,017.10	$ 2.65
HypotheticalA		$ 1,000.00	$ 1,022.17	$ 2.66

^A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Semiannual Report

Investment Changes (Unaudited)

Coupon Distribution as of February 28, 2009
	% of fund's investments	% of fund's investments 6 months ago
Less than 4%	5.6	5.2
4 - 4.99%	6.5	7.7
5 - 5.99%	45.2	44.9
6 - 6.99%	35.3	30.8
7% and over	5.2	4.9

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments.

Weighted Average Maturity as of February 28, 2009
		6 months ago
Years	3.5	5.2

The weighted average maturity is based on the dollar-weighted average length of time until principal payments are expected or until securities reach maturity, taking into account any maturity shortening feature such as a call, refunding or redemption provision.

Duration as of February 28, 2009
		6 months ago
Years	2.1	4.3

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)
As of February 28, 2009 *		As of August 31, 2008 **
	Mortgage Securities 115.1%		Mortgage Securities 106.4%
	CMOs and Other Mortgage Related Securities 19.7%		CMOs and Other Mortgage Related Securities 20.0%
	Asset-Backed Securities 4.8%		Asset-Backed Securities 5.1%
	Short-Term Investments and Net Other Assets† (39.6)%		Short-Term Investments and Net Other Assets† (31.5)%

* Foreign investments	0.7%	** Foreign investments	1.3%
* Futures and Swaps	(4.4)%	** Futures and Swaps	(8.8)%

^† Short-Term Investments and Net Other Assets are not included in the pie chart.

Semiannual Report

Investments February 28, 2009 (Unaudited)

Showing Percentage of Net Assets

U.S. Government Agency - Mortgage Securities - 115.1%
	Principal Amount (000s)		Value (000s)
Fannie Mae - 67.1%
3.575% 1/1/32 (g)	$ 144		$ 144
4.162% 1/1/35 (g)	1,899		1,921
4.303% 3/1/33 (g)	86		87
4.328% 1/1/35 (g)	2,246		2,261
4.34% 1/1/35 (g)	210		213
4.423% 5/1/35 (g)	129		130
4.432% 3/1/35 (g)	303		308
4.456% 7/1/35 (g)	931		926
4.5% 10/1/19 to 9/1/31 (c)	22,840		23,194
4.5% 3/12/39 (b)(c)	12,000		12,032
4.548% 10/1/33 (g)	135		136
4.55% 10/1/35 (g)	1,179		1,195
4.583% 8/1/34 (g)	473		479
4.667% 7/1/35 (g)	173		176
4.7% 2/1/35 (g)	1,001		1,018
4.739% 8/1/35 (g)	741		752
4.742% 12/1/34 (g)	170		172
4.747% 4/1/35 (g)	65		66
4.752% 10/1/35 (g)	2,636		2,674
4.823% 12/1/35 (g)	1,812		1,836
4.846% 4/1/33 (g)	1,653		1,676
4.87% 7/1/35 (g)	1,060		1,087
4.933% 1/1/35 (g)	537		544
4.933% 7/1/35 (g)	45		47
4.987% 7/1/35 (g)	3,088		3,141
5% 9/1/16 to 7/1/38 (c)(e)	90,595		92,538
5% 3/12/39 (b)	9,000		9,156
5.048% 1/1/37 (g)	1,270		1,297
5.095% 7/1/34 (g)	357		359
5.141% 5/1/35 (g)	124		126
5.16% 10/1/18 (g)	77		78
5.174% 8/1/34 (g)	1,053		1,071
5.198% 3/1/35 (g)	110		110
5.265% 12/1/36 (g)	543		555
5.307% 7/1/35 (g)	760		786
5.328% 6/1/36 (g)	1,818		1,886
5.336% 7/1/35 (g)	436		446
5.342% 2/1/37 (g)	561		575
5.481% 6/1/32 (g)	341		343
5.5% 6/1/11 to 5/1/38 (c)	97,371		100,354
5.5% 3/17/24 (b)	2,000		2,073
5.5% 3/17/24 (b)	2,000		2,073
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
5.5% 3/17/24 (b)	$ 6,800		$ 7,050
5.5% 3/12/39 (b)	20,000		20,489
5.5% 3/12/39 (b)	7,000		7,171
5.5% 3/12/39 (b)(c)	50,500		51,734
5.5% 3/12/39 (b)(c)	14,500		14,854
5.573% 10/1/36 (g)	285		296
5.658% 6/1/36 (g)	1,414		1,463
5.77% 3/1/36 (g)	3,223		3,341
5.798% 1/1/36 (g)	563		586
5.806% 11/1/36 (g)	886		906
5.819% 9/1/36 (g)	873		888
5.823% 7/1/36 (g)	609		634
5.845% 3/1/36 (g)	1,849		1,926
5.851% 3/1/36 (g)	1,492		1,545
5.952% 4/1/36 (g)	398		413
5.952% 9/1/36 (g)	781		813
5.954% 5/1/36 (g)	565		587
6% 3/1/09 to 11/1/37 (c)	109,977		114,484
6% 9/1/36 (g)	663		691
6% 3/12/39 (b)(c)	18,000		18,594
6% 3/12/39 (b)(c)	62,000		64,046
6.008% 4/1/36 (g)	6,024		6,258
6.091% 9/1/36 (g)	640		667
6.118% 4/1/36 (g)	869		904
6.192% 2/1/35 (g)	104		106
6.198% 5/1/37 (g)	83		87
6.226% 5/1/36 (g)	1,844		1,920
6.241% 6/1/36 (g)	3,144		3,275
6.243% 6/1/36 (g)	137		139
6.245% 8/1/46 (g)	320		334
6.346% 5/1/36 (g)	1,315		1,371
6.433% 4/1/37 (g)	964		1,006
6.499% 12/1/36 (g)	204		212
6.5% 5/1/12 to 9/1/47 (c)	58,235		61,262
6.5% 3/12/39 (b)	1,000		1,045
6.555% 12/1/36 (g)	285		298
6.784% 9/1/37 (g)	1,489		1,554
6.862% 9/1/37 (g)	676		705
6.946% 9/1/37 (g)	536		559
7% 12/1/15 to 7/1/37	9,014		9,597
7.075% 9/1/37 (g)	720		752
7.5% 8/1/22 to 5/1/37	13,539		14,380
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
8% 12/1/29 to 3/1/37	$ 176		$ 186
8.5% 1/1/16 to 7/1/31	218		236
9% 2/1/13 to 10/1/30	536		583
9.5% 11/1/09 to 8/1/22	80		88
11% 8/1/10	9		9
12.25% 5/1/15	14		16
12.5% 8/1/15 to 3/1/16	17		20
12.75% 2/1/15	4		4
13.5% 9/1/14	3		4
			690,129
Freddie Mac - 36.0%
3.456% 2/1/34 (g)	166		166
3.741% 5/1/34 (g)	31		32
4.275% 6/1/35 (g)	283		287
4.315% 12/1/34 (g)	229		233
4.329% 11/1/31 (g)	62		62
4.407% 3/1/35 (g)	286		290
4.471% 3/1/35 (g)	256		259
4.546% 3/1/34 (g)	2,392		2,422
4.569% 12/1/33 (g)	1,036		1,044
4.58% 6/1/33 (g)	2,020		2,062
4.709% 11/1/35 (g)	935		947
4.789% 2/1/36 (g)	254		260
4.801% 3/1/35 (g)	499		504
5% 6/1/18 to 6/1/38 (c)	35,899		36,599
5% 3/12/39 (b)	2,000		2,032
5% 3/12/39 (b)	5,000		5,079
5.023% 4/1/35 (g)	140		144
5.158% 10/1/33 (g)	1,647		1,674
5.288% 3/1/35 (g)	174		175
5.443% 4/1/37 (g)	365		374
5.5% 6/1/09 to 1/1/38	42,700		43,987
5.5% 3/12/39 (b)	18,000		18,436
5.5% 3/12/39 (b)(c)	18,000		18,436
5.5% 3/12/39 (b)(c)	18,000		18,436
5.5% 3/12/39 (b)(c)	23,000		23,557
5.5% 4/13/39 (b)	23,000		23,495
5.5% 4/13/39 (b)	18,000		18,388
5.5% 4/13/39 (b)	18,000		18,387
5.548% 1/1/37 (g)	1,842		1,886
5.694% 10/1/35 (g)	246		257
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac - continued
5.757% 3/1/37 (g)	$ 1,966		$ 1,994
5.78% 4/1/37 (g)	1,896		1,944
5.812% 6/1/37 (g)	1,532		1,588
5.834% 5/1/37 (g)	585		599
5.948% 4/1/36 (g)	1,277		1,322
6% 4/1/14 to 7/1/37	38,372		40,064
6% 3/1/39 (b)	8,500		8,799
6.006% 6/1/36 (g)	576		598
6.098% 4/1/37 (g)	596		621
6.139% 10/1/36 (g)	130		136
6.142% 12/1/36 (g)	877		912
6.169% 7/1/36 (g)	3,267		3,392
6.181% 5/1/36 (g)	545		565
6.228% 3/1/36 (g)	2,926		3,049
6.303% 7/1/36 (g)	587		609
6.362% 10/1/36 (g)	3,289		3,425
6.416% 12/1/36 (g)	1,587		1,654
6.418% 6/1/37 (g)	167		174
6.5% 4/1/11 to 8/1/47	26,126		27,474
6.581% 12/1/36 (g)	3,755		3,918
6.594% 1/1/37 (g)	1,853		1,934
6.619% 6/1/37 (g)	187		195
6.625% 7/1/36 (g)	2,758		2,878
6.644% 6/1/36 (g)	389		406
6.65% 8/1/37 (g)	1,169		1,217
6.837% 10/1/36 (g)	2,346		2,447
7% 6/1/21 to 9/1/36	6,264		6,648
7.128% 2/1/37 (g)	256		267
7.5% 11/1/10 to 4/1/37	10,442		11,061
7.524% 4/1/37 (g)	122		127
8% 11/1/16 to 1/1/37	245		258
8.5% 7/1/09 to 9/1/20	25		27
9% 7/1/13 to 5/1/21	206		222
10% 6/1/09 to 5/1/19	40		43
10.5% 8/1/10 to 2/1/16	3		3
12.5% 10/1/12 to 12/1/14	27		29
13% 12/1/13 to 6/1/15	60		68
			370,577
Government National Mortgage Association - 12.0%
4.5% 3/18/39 (b)	12,000		12,045
5% 1/20/33 to 2/20/39	9,988		10,205
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Government National Mortgage Association - continued
5.5% 3/18/39 (b)	$ 13,000		$ 13,331
5.5% 3/18/39 (b)	1,000		1,027
5.5% 3/18/39 (b)	18,000		18,458
5.5% 3/18/39 (b)	300		308
5.5% 3/18/39 (b)	14,000		14,379
5.5% 3/18/39 (b)	4,000		4,102
5.5% 3/18/39 (b)	3,000		3,076
6% 1/15/36	7,770		8,075
6% 3/18/39 (b)	10,000		10,327
6% 3/18/39 (b)	14,000		14,457
6.5% 5/15/28 to 7/15/36	7,158		7,526
7% 2/15/24 to 7/15/32	3,335		3,542
7.5% 9/15/16 to 4/15/32	1,142		1,202
8% 6/15/21 to 12/15/25	451		480
8.5% 8/15/16 to 10/15/28	638		691
9% 11/20/17	2		2
10.5% 12/20/15 to 2/20/18	56		64
13.5% 7/15/11	2		2
			123,299
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $1,164,697)		1,184,005
Asset-Backed Securities - 4.8%
Ameriquest Mortgage Securities, Inc. Series 2006-M3 Class A2A, 0.5238% 10/25/36 (g)	158		153
Ameriquest Mortgage Securities, Inc. pass-thru certificates Series 2005-R10 Class A2B, 0.6938% 12/25/35 (g)	522		358
Argent Securities, Inc. Series 2006-M2 Class A2A, 0.5238% 9/25/36 (g)	197		195
Bear Stearns Asset Backed Securities I Trust:
Series 2005-AQ2 Class M7, 2.1238% 9/25/35 (g)	335		1
Series 2005-FR1 Class M1, 0.9738% 6/25/35 (g)	600		273
Series 2006-HE1 Class 1A2, 0.6938% 12/25/35 (g)	3,574		2,853
Series 2007-HE3 Class 1A1, 0.5938% 4/25/37 (g)	565		432
C-BASS Trust Series 2006-CB7 Class A2, 0.5338% 10/25/36 (g)	306		263
Capital Auto Receivables Asset Trust Series 2007-SN1 Class D, 6.05% 1/17/12	970		485
Citigroup Mortgage Loan Trust:
Series 2006-HE2 Class A2A, 0.5238% 8/26/36 (g)	13		13
Asset-Backed Securities - continued
	Principal Amount (000s)		Value (000s)
Citigroup Mortgage Loan Trust: - continued
Series 2006-NC2 Class A2A, 0.5138% 9/25/36 (g)	$ 51		$ 50
Series 2006-WF2 Class A2B, 5.735% 5/25/36	255		250
Countrywide Asset-Backed Certificates Trust:
Series 2006-13 Class 1AF1, 0.5938% 1/25/37 (g)	49		46
Series 2007-11 Class 2A1, 0.5338% 6/25/47 (g)	4,178		3,708
Series 2007-4 Class A1A, 0.5938% 9/25/37 (g)	3,346		3,020
Series 2007-5 Class 2A1, 0.5738% 4/25/29 (g)	2,080		1,800
Series 2007-BC2 Class 2A1, 0.5638% 6/25/37 (g)	629		536
First Franklin Mortgage Loan Trust Series 2006-FF5 Class 2A2, 0.5838% 4/25/36 (g)	354		324
Ford Credit Auto Owner Trust:
Series 2006-C Class D, 6.89% 5/15/13 (a)	715		356
Series 2007-A Class D, 7.05% 12/15/13 (a)	350		175
Fremont Home Loan Trust Series 2006-3 Class 2A1, 0.5438% 2/25/37 (g)	12		11
GSAMP Trust:
Series 2004-AR1 Class B4, 5% 6/25/34 (a)(g)	160		13
Series 2004-AR2 Class B1, 2.3738% 8/25/34 (g)	796		35
GSR Mortgage Loan Trust Series 2006-6 Class AV1, 0.4594% 3/25/36 (g)	25		24
Helios Finance L.P. Series 2007-S1 Class B1, 1.17% 10/20/14 (a)(g)	2,325		1,186
Home Equity Asset Trust Series 2006-8 Class 2A1, 0.5238% 3/25/37 (g)	42		36
JPMorgan Mortgage Acquisition Trust Series 2006-WF1:
Class A1A, 5.6% 7/25/36	25		25
Class A1B, 0.5738% 7/25/36 (g)	199		196
Leafs CMBS I Ltd. Series 2002-1A Class D, 4.13% 11/20/37 (a)	10,820		4,112
Long Beach Mortgage Loan Trust:
Series 2005-WL1 Class M2, 1.0238% 6/25/35 (g)	1,785		1,005
Series 2006-2 Class 2A2, 0.6038% 3/25/36 (g)	134		131
Series 2006-8 Class 2A1, 0.5138% 9/25/36 (g)	196		185
Merrill Lynch Mortgage Investors Trust Series 2006-MLN1 Class A2A, 0.5438% 7/25/37 (g)	402		369
Morgan Stanley ABS Capital I Trust:
Series 2005-3 Class A3, 0.8538% 8/25/35 (g)	6,101		5,086
Series 2006-HE6 Class A2A, 0.5138% 9/25/36 (g)	619		585
Series 2007-HE2 Class A2A, 0.5138% 1/25/37 (g)	70		57
Series 2007-HE4 Class A2A, 0.5838% 2/25/37 (g)	70		47
Series 2007-NC3 Class A2A, 0.5338% 5/25/37 (g)	43		34
Asset-Backed Securities - continued
	Principal Amount (000s)		Value (000s)
Morgan Stanley Home Equity Loans Trust Series 2007-2 Class A1, 0.5738% 4/25/37 (g)	$ 898		$ 682
Morgan Stanley IXIS Real Estate Capital Trust Series 2006-2 Class A1, 0.5238% 11/25/36 (g)	97		90
National Collegiate Student Loan Trust:
Series 2006-4 Class AIO, 6.35% 2/27/12 (h)	4,205		570
Series 2007-1 Class AIO, 7.27% 4/25/12 (h)	6,370		1,041
Series 2007-2 Class AIO, 6.7% 7/25/12 (h)	4,540		717
Newcastle CDO VIII Series 2006-8A Class 4, 0.9894% 11/1/52 (a)(g)	5,000		600
Nomura Home Equity Loan Trust Series 2006-AF1 Class A1, 6.032% 10/25/36	162		141
NovaStar Mortgage Funding Trust Series 2006-6 Class A2A, 0.5438% 1/25/37 (g)	130		120
Ocala Funding LLC Series 2006-1A Class A, 1.87% 3/20/11 (a)(g)	2,100		840
Option One Mortgage Loan Trust:
Series 2007-5 Class 2A1, 0.5638% 5/25/37 (g)	242		215
Series 2007-6 Class 2A1, 0.5338% 7/25/37 (g)	283		254
Ownit Mortgage Loan Trust Series 2006-6 Class A2A, 0.5338% 9/25/37 (g)	417		395
People's Choice Financial Realty Mortgage Securities Trust Series 2006-1 Class 1A1, 0.5438% 9/25/36 (g)	448		428
RAMP Trust Series 2006-RS4 Class A2, 0.5838% 7/25/36 (g)	4,169		3,709
Residential Asset Mortgage Products, Inc. Series 2003-RZ2 Class A1, 3.6% 4/25/33	401		361
Residential Asset Securities Corp. Series 2007-KS2 Class AI1, 0.5438% 2/25/37 (g)	302		265
Securitized Asset Backed Receivables LLC Trust:
Series 2005-FR4 Class B3, 2.1938% 1/25/36 (g)	500		13
Series 2006-FR4 Class A2A, 0.5538% 8/25/36 (g)	351		218
Series 2007-NC1 Class A2A, 0.5238% 12/25/36 (g)	234		185
Soundview Home Loan Trust Series 2006-WF1 Class A1F, 5.998% 10/25/36	50		50
Structured Asset Securities Corp.:
Series 2005-NC2 Class M3, 0.9038% 5/25/35 (g)	1,995		632
Series 2007-BC4 Class A3, 0.6394% 11/25/37 (g)	2,307		1,885
Structured Asset Securities Corp. Mortgage Loan Trust Series 2007-OSI Class A2, 0.5638% 6/25/37 (g)	5,286		4,005
WaMu Asset Holdings Corp.:
Series 2006-5 Class N1, 5.926% 7/25/46 (a)	1,148		0*
Asset-Backed Securities - continued
	Principal Amount (000s)		Value (000s)
WaMu Asset Holdings Corp.: - continued
Series 2006-7 Class N1, 5.926% 10/25/46 (a)	$ 912		$ 0*
Series 2006-8 Class N1, 6.048% 10/25/46 (a)	1,160		0*
Wells Fargo Home Equity Trust:
Series 2006-2 Class A2, 0.5738% 7/25/36 (g)	824		745
Series 2007-2 Class A1, 0.5638% 4/25/37 (g)	3,683		3,038
TOTAL ASSET-BACKED SECURITIES (Cost $76,470)		49,627
Collateralized Mortgage Obligations - 17.6%
Private Sponsor - 4.0%
American Home Mortgage Investment Trust floater Series 2004-2 Class 4A5, 4.55% 2/25/44 (g)	6,360		2,862
Arkle Master Issuer PLC floater Series 2006-1A Class 3C, 1.6275% 2/17/52 (a)(g)	910		683
Banc of America Mortgage Securities, Inc.:
Series 2003-J Class 2A2, 5.2918% 11/25/33 (g)	501		406
Series 2004-1 Class 2A2, 4.6723% 10/25/34 (g)	1,697		1,321
Series 2004-A:
Class 2A1, 5.1951% 2/25/34 (g)	339		276
Class 2A2, 5.1951% 2/25/34 (g)	1,464		1,194
Series 2004-D Class 2A1, 3.6163% 5/25/34 (g)	200		154
Series 2004-J Class 2A1, 4.7597% 11/25/34 (g)	874		680
Series 2005-H:
Class 1A1, 5.3329% 9/25/35 (g)	196		141
Class 2A2, 4.8028% 9/25/35 (g)	1,877		605
Citigroup Mortgage Loan Trust Series 2006-AR7 Class 1A1, 5.7236% 11/25/36 (g)	202		116
Credit Suisse First Boston Adjustable Rate Mortgage Trust floater Series 2004-4 Class 5A2, 0.8738% 3/25/35 (g)	69		29
Credit Suisse First Boston Mortgage Securities Corp. Series 2002-15R Class A1, 3.3796% 1/28/32 (a)(g)	229		110
First Horizon Mortgage pass-thru Trust Series 2004-AR5 Class 2A1, 5.1001% 10/25/34 (g)	2,047		1,575
Fosse Master Issuer PLC floater Series 2006-1A Class C2, 1.6125% 10/18/54 (a)(g)	770		385
Gracechurch Mortgage Financing PLC floater Series 2006-1 Class D2, 1.7213% 11/20/56 (a)(g)	1,675		783
Gracechurch Mortgage Funding PLC floater Series 1A Class DB, 1.8238% 10/11/41 (a)(g)	2,520		1,091
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
Private Sponsor - continued
Granite Master Issuer PLC floater:
Series 2005-4 Class C2, 1.02% 12/20/54 (g)	$ 700		$ 49
Series 2006-2 Class C1, 0.94% 12/20/54 (g)	155		16
Series 2007-1:
Class 1C1, 0.77% 12/20/54 (g)	940		94
Class 2C1, 0.9% 12/20/54 (g)	500		50
Series 2007-2 Class 2C1, 0.8913% 12/17/54 (g)	1,355		136
Granite Mortgages PLC floater Series 2003-3 Class 1B, 1.5925% 1/20/44 (g)	661		231
GSR Mortgage Loan Trust Series 2007-AR2 Class 2A1, 4.8324% 4/25/35 (g)	897		617
Holmes Master Issuer PLC floater Series 2006-1A Class 2C, 1.4844% 7/15/40 (a)(g)	490		343
Luminent Mortgage Trust floater Series 2006-1 Class A1, 0.7138% 4/25/36 (g)	2,570		1,022
MASTR Adjustable Rate Mortgages Trust Series 2007-3 Class 22A2, 0.6838% 5/25/47 (g)	1,000		483
MASTR Alternative Loan Trust Series 2003-2 Class 4A1, 6.5% 4/25/18	2,773		2,325
Merrill Lynch Alternative Note Asset Trust floater Series 2007-OAR1 Class A1, 0.6438% 2/25/37 (g)	4,062		1,706
Merrill Lynch Floating Trust floater Series 2006-1 Class TM, 0.955% 6/15/22 (a)(g)	4,998		3,074
Merrill Lynch Mortgage Investors Trust:
Series 2004-A4 Class A1, 4.2286% 8/25/34 (g)	2,947		2,254
Series 2006-A6 Class A4, 5.3897% 10/25/33 (g)	2,506		2,042
Permanent Financing No. 4 PLC Class 3C, 2.9894% 6/10/42 (g)	1,405		1,401
Permanent Financing No. 8 PLC floater Class 3C, 2.7094% 6/10/42 (g)	610		413
Residential Asset Mortgage Products, Inc. sequential payer:
Series 2003-SL1 Class A31, 7.125% 4/25/31	715		632
Series 2004-SL2 Class A1, 6.5% 10/25/16	82		71
Residential Funding Mortgage Securities I, Inc. Series 2004-SA1 Class A2, 4.272% 7/25/34 (g)	1,597		1,297
Structured Asset Securities Corp.:
Series 2003-15A Class 4A, 5.4533% 4/25/33 (g)	1,527		1,238
Series 2003-20 Class 1A1, 5.5% 7/25/33	1,114		954
WaMu Mortgage pass-thru certificates:
Series 2004-AR7 Class A6, 3.9389% 7/25/34 (g)	395		391
Series 2005-AR16 Class 1A3, 5.102% 12/25/35 (g)	2,065		1,173
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
Private Sponsor - continued
Wells Fargo Mortgage Backed Securities Trust:
Series 2004-W:
Class A1, 4.5429% 11/25/34 (g)	$ 1,495		$ 1,193
Class A9, 4.5429% 11/25/34 (g)	3,490		2,195
Series 2005-AR12 Class 2A6, 4.313% 7/25/35 (g)	907		693
Series 2005-AR2 Class 1A2, 4.6413% 3/25/35 (g)	657		267
Series 2005-AR3 Class 2A1, 4.4106% 3/25/35 (g)	311		239
Series 2006-AR8 Class 3A1, 5.2374% 4/25/36 (g)	3,448		2,466
TOTAL PRIVATE SPONSOR			41,476
U.S. Government Agency - 13.6%
Fannie Mae:
planned amortization class:
Series 1994-23:
Class PX, 6% 8/25/23	3,448		3,584
Class PZ, 6% 2/25/24	2,687		2,731
Series 1999-15 Class PC, 6% 9/25/18	654		658
Series 2006-105 Class MD, 5.5% 6/25/35	1,145		1,141
Series 1993-165 Class SH, 18.3855% 9/25/23 (g)(j)	156		177
Series 1999-17 Class PG, 6% 4/25/29	5,442		5,677
Series 2003-22 Class IO, 6% 4/25/33 (h)	4,081		400
Series 2003-26 Class KI, 5% 12/25/15 (h)	1,554		50
Series 2003-39 Class IA, 5.5% 10/25/22 (g)(h)	1,859		138
Series 2006-48 Class LF, 0% 8/25/34 (g)(j)	14		14
Fannie Mae Stripped Mortgage-Backed Securities:
sequential payer Series 377 Class 1, 10/1/36 (i)	3,691		3,237
Series 339 Class 29, 5.5% 7/1/18 (h)	1,799		139
Series 348 Class 14, 6.5% 8/1/34 (h)	864		119
Series 351:
Class 12, 5.5% 4/1/34 (h)	650		65
Class 13, 6% 3/1/34 (h)	828		98
Series 359, Class 19 6% 7/1/35 (h)	838		97
Series 384 Class 6, 5% 7/25/37 (h)	4,427		490
Fannie Mae subordinate REMIC pass-thru certificates:
floater:
Series 2007-36 Class FG, 0.8738% 4/25/37 (g)	3,035		2,969
Series 2007-57 Class FA, 0.7038% 6/25/37 (g)	7,484		7,310
planned amortization class:
Series 1999-32 Class PL, 6% 7/25/29	3,902		4,068
Series 2001-52 Class YZ, 6.5% 10/25/31	211		221
Series 2001-63 Class TC, 6% 12/25/31	4,065		4,223
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Fannie Mae subordinate REMIC pass-thru certificates: - continued
planned amortization class:
Series 2001-72 Class NZ, 6% 12/25/31	$ 1,196		$ 1,238
Series 2005-14 Class ME, 5% 10/25/33	1,785		1,801
Series 2005-39 Class TE, 5% 5/25/35	1,120		1,105
Series 2005-73 Class SA, 16.3183% 8/25/35 (g)	912		976
sequential payer:
Series 2001-20 Class Z, 6% 5/25/31	4,621		4,790
Series 2001-31 Class ZC, 6.5% 7/25/31	1,615		1,695
Series 2002-16 Class ZD, 6.5% 4/25/32	710		741
Series 2002-79 Class Z, 5.5% 11/25/22	2,208		2,246
Series 2003-80 Class CG, 6% 4/25/30	595		620
Series 2005-41 Class LA, 5.5% 5/25/35	3,179		3,281
Series 1999-33 Class PK, 6% 7/25/29	2,596		2,702
Series 2001-63 Class PG, 6% 12/25/31	1,943		2,017
Series 2001-74 Class QE, 6% 12/25/31	1,846		1,916
Series 2003-21 Class SK, 7.6263% 3/25/33 (g)(h)(j)	819		94
Series 2003-3 Class HS, 7.1763% 9/25/16 (g)(h)(j)	49		1
Series 2003-35:
Class BS, 6.5263% 4/25/17 (g)(h)(j)	547		19
Class TQ, 7.0263% 5/25/18 (g)(h)	719		63
Series 2003-42:
Class HS, 6.6263% 12/25/17 (g)(h)(j)	6,606		475
Class SJ, 6.5763% 11/25/22 (g)(h)	923		75
Series 2003-48 Class HI, 5% 11/25/17 (h)	2,691		198
Series 2004-54 Class SW, 5.5263% 6/25/33 (g)(h)(j)	3,711		226
Series 2006-4 Class IT, 6% 10/25/35 (h)	421		35
Series 2007-36:
Class GO, 4/25/37 (i)	486		380
Class SG, 6.1263% 4/25/37 (g)(h)(j)	6,302		544
Series 2007-57 Class SA, 37.7775% 6/25/37 (g)(j)	4,712		6,318
Series 2007-66:
Class FB, 0.8738% 7/25/37 (g)	1,995		1,960
Class SA, 36.7575% 7/25/37 (g)(j)	3,111		3,929
Class SB, 36.7575% 7/25/37 (g)(j)	937		1,264
Freddie Mac:
floater Series 3318:
Class CY, 0% 11/15/36 (g)	186		183
Class GY, 0% 5/15/37 (g)	216		210
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac: - continued
planned amortization class:
Series 2095 Class PE, 6% 11/15/28 (e)	$ 4,890		$ 5,074
Series 2104 Class PG, 6% 12/15/28	1,457		1,511
Series 2162 Class PH, 6% 6/15/29	332		346
Series 70 Class C, 9% 9/15/20	98		106
sequential payer Series 2114 Class ZM, 6% 1/15/29	704		734
Freddie Mac Manufactured Housing participation certificates guaranteed planned amortization class Series 2043 Class CJ, 6.5% 4/15/28	1,687		1,754
Freddie Mac Multi-class participation certificates guaranteed:
floater:
Series 2958 Class TF, 0% 4/15/35 (g)	500		425
Series 3129 Class MF, 0% 7/15/34 (g)	352		340
Series 3222 Class HF, 0% 9/15/36 (g)	531		485
planned amortization class:
Series 2121 Class MG, 6% 2/15/29	1,907		1,988
Series 2131 Class BG, 6% 3/15/29	7,676		7,973
Series 2137 Class PG, 6% 3/15/29	1,845		1,913
Series 2154 Class PT, 6% 5/15/29	2,883		3,004
Series 2435 Class VG, 6% 2/15/13	655		675
Series 2488 Class PR, 6% 8/15/32	1,018		1,058
Series 2520 Class BE, 6% 11/15/32	1,970		2,050
Series 2585 Class KS, 7.145% 3/15/23 (g)(h)(j)	471		33
Series 2590 Class YR, 5.5% 9/15/32 (h)	135		18
Series 2802 Class OB, 6% 5/15/34 (d)(e)	3,375		3,458
Series 2810 Class PD, 6% 6/15/33	2,540		2,649
Series 3077 Class TO, 4/15/35 (i)	3,993		3,168
sequential payer:
Series 2135 Class JE, 6% 3/15/29	2,186		2,279
Series 2274 Class ZM, 6.5% 1/15/31	755		794
Series 2281 Class ZB, 6% 3/15/30	912		952
Series 2388 Class ZA, 6% 12/15/31	4,725		4,901
Series 2417 Class KZ, 6% 2/15/32	1,017		1,056
Series 2502 Class ZC, 6% 9/15/32	1,696		1,759
Series 2504 Class Z, 6% 9/15/32	1,469		1,528
Series 2564 Class ES, 7.145% 2/15/22 (g)(h)(j)	757		49
Series 2575 Class ID, 5.5% 8/15/22 (h)	127		11
Series 2750 Class ZT, 5% 2/15/34	2,785		2,645
Series 2817 Class SD, 6.595% 7/15/30 (g)(h)(j)	1,383		89
Series 3097 Class IA, 5.5% 3/15/33 (h)	3,677		308
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed: - continued
Series 1658 Class GZ, 7% 1/15/24	$ 2,111		$ 2,183
Series 2587 Class IM, 6.5% 3/15/33 (h)	1,373		176
Series 2844:
Class SC, 43.8425% 8/15/24 (g)(j)	97		135
Class SD, 80.535% 8/15/24 (g)(j)	141		300
Series 2957 Class SW, 5.545% 4/15/35 (g)(h)	5,713		302
Series 3002 Class SN, 6.045% 7/15/35 (g)(h)(j)	5,727		415
Ginnie Mae guaranteed REMIC pass-thru securities:
sequential payer Series 2002-42 Class ZA, 6% 6/20/32	1,847		1,921
Series 2003-11 Class S, 6.095% 2/16/33 (g)(h)(j)	4,467		337
Series 2004-32 Class GS, 6.5% 5/16/34 (g)(h)(j)	1,293		102
TOTAL U.S. GOVERNMENT AGENCY			139,712
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $201,079)		181,188
Commercial Mortgage Securities - 2.1%
Asset Securitization Corp. Series 1997-D5:
Class A-6, 7.4181% 2/14/43 (g)	8,300		6,980
Class PS1, 1.5863% 2/14/43 (g)(h)	15,229		540
Bayview Commercial Asset Trust floater:
Series 2006-3A:
Class B1, 1.2738% 10/25/36 (a)(g)	256		79
Class B2, 1.8238% 10/25/36 (a)(g)	167		49
Class B3, 3.0738% 10/25/36 (a)(g)	300		67
Class M4, 0.9038% 10/25/36 (a)(g)	256		111
Class M5, 0.9538% 10/25/36 (a)(g)	326		130
Class M6, 1.0338% 10/25/36 (a)(g)	632		237
Series 2006-4A:
Class B1, 1.1738% 12/25/36 (a)(g)	100		20
Class B2, 1.7238% 12/25/36 (a)(g)	96		44
Class B3, 2.9238% 12/25/36 (a)(g)	178		78
Series 2007-1:
Class B1, 1.1438% 3/25/37 (a)(g)	148		52
Class B2, 1.6238% 3/25/37 (a)(g)	108		34
Class B3, 3.8238% 3/25/37 (a)(g)	308		90
Class M1, 0.7438% 3/25/37 (a)(g)	124		67
Commercial Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Bayview Commercial Asset Trust floater: - continued
Series 2007-1:
Class M2, 0.7638% 3/25/37 (a)(g)	$ 96		$ 50
Class M3, 0.7938% 3/25/37 (a)(g)	84		42
Class M4, 0.8438% 3/25/37 (a)(g)	64		31
Class M5, 0.8938% 3/25/37 (a)(g)	104		47
Class M6, 0.9738% 3/25/37 (a)(g)	148		59
Series 2007-2A:
Class B1, 2.0738% 7/25/37 (a)(g)	115		37
Class B2, 2.7238% 7/25/37 (a)(g)	98		30
Class B3, 3.8238% 7/25/37 (a)(g)	111		33
Class M4, 1.1238% 7/25/37 (a)(g)	142		59
Class M5, 1.2238% 7/25/37 (a)(g)	129		51
Class M6, 1.4738% 7/25/37 (a)(g)	160		59
Series 2007-3:
Class B1, 1.4238% 7/25/37 (a)(g)	100		48
Class B2, 2.0738% 7/25/37 (a)(g)	263		125
Class B3, 4.4738% 7/25/37 (a)(g)	136		62
Class M1, 0.7838% 7/25/37 (a)(g)	89		52
Class M2, 0.8138% 7/25/37 (a)(g)	93		52
Class M3, 0.8438% 7/25/37 (a)(g)	150		79
Class M4, 0.9738% 7/25/37 (a)(g)	239		125
Class M5, 1.0738% 7/25/37 (a)(g)	120		61
Class M6, 1.2738% 7/25/37 (a)(g)	93		47
Series 2007-4A:
Class B1, 3.0238% 9/25/37 (a)(g)	136		43
Class B2, 3.9238% 9/25/37 (a)(g)	504		148
CDC Commercial Mortgage Trust Series 2002-FX1 Class XCL, 0.908% 5/15/35 (a)(g)(h)	26,920		1,063
Chase Commercial Mortgage Securities Corp. Series 1999-2:
Class E, 7.734% 1/15/32	1,110		1,072
Class F, 7.734% 1/15/32	600		575
Credit Suisse Commercial Mortgage Trust sequential payer:
Series 2007-C2 Class A1, 5.269% 1/15/49	564		550
Series 2007-C3 Class A1, 5.664% 6/15/39 (g)	652		638
Credit Suisse First Boston Mortgage Securities Corp. floater:
Series 2006-TF2A:
Class A2, 1.9613% 7/15/19 (a)(g)	175		35
Class SHDC, 1.4613% 7/15/19 (a)(g)	84		21
Series 2006-TFL2 Class SHDD, 1.8113% 7/15/19 (a)(g)	47		10
Commercial Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Credit Suisse Mortgage Capital Certificates sequential payer Series 2007-C1 Class A1, 5.227% 2/15/40	$ 684		$ 668
GS Mortgage Securities Corp. II floater Series 2007-EOP:
Class C, 0.765% 3/6/20 (a)(g)	780		499
Class D, 0.815% 3/6/20 (a)(g)	235		150
Class F, 0.925% 3/6/20 (a)(g)	195		119
Class G, 0.965% 3/6/20 (a)(g)	95		57
Class H, 1.095% 3/6/20 (a)(g)	160		96
Class J, 1.295% 3/6/20 (a)(g)	230		131
GS Mortgage Securities Trust sequential payer Series 2007-GG10 Class A1, 5.69% 8/10/45	1,110		883
JPMorgan Chase Commercial Mortgage Securities Trust sequential payer Series 2007-LDP10 Class A1, 5.122% 1/15/49	633		614
LB-UBS Commercial Mortgage Trust:
sequential payer:
Series 2006-C7 Class A1, 5.279% 11/15/38	402		393
Series 2007-C1 Class A1, 5.391% 2/15/40 (g)	568		555
Series 2007-C2 Class A1, 5.226% 2/15/40	514		502
Series 2004-C2 Class XCP, 0.8376% 3/15/36 (a)(g)(h)	62,797		1,229
Series 2007-C1 Class XCP, 0.4751% 2/15/40 (g)(h)	14,259		227
Merrill Lynch-CFC Commercial Mortgage Trust sequential payer:
Series 2007-5 Class A1, 4.275% 12/12/11	479		460
Series 2007-6 Class A1, 5.175% 3/12/51	564		549
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $28,796)		21,014

Cash Equivalents - 3.0%
	Maturity Amount (000s)		Value (000s)
Investments in repurchase agreements in a joint trading account at 0.26%, dated 2/27/09 due 3/2/09 (Collateralized by U.S. Government Obligations) # (Cost $30,805)	$ 30,806		$ 30,805
TOTAL INVESTMENT PORTFOLIO - 142.6% (Cost $1,501,847)			1,466,639
NET OTHER ASSETS - (42.6)%			(438,062)
NET ASSETS - 100%		$ 1,028,577

Futures Contracts
	Expiration Date	Underlying Face Amount at Value (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Sold
Treasury Contracts
48 CBOT 2 Year U.S. Treasury Notes Index Contracts	July 2009	$ 10,397	$ (5)

The face value of futures sold as a percentage of net assets - 1%

Swap Agreements
		Notional Amount (000s)	Value (000s)
Credit Default Swaps
Receive monthly notional amount multiplied by 2.22% and pay JPMorgan Chase, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2005-HE3 Class B2, 6.87% 7/25/35 (Rating-Caa2) (f)	August 2035	$ 1,000	$ (938)
Swap Agreements - continued
	Expiration Date	Notional Amount (000s)	Value (000s)
Interest Rate Swaps
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 2.5425% with Credit Suisse First Boston	Jan. 2019	$ 530	$ 35
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 3.41% with Credit Suisse First Boston	Sept. 2010	57,000	(2,329)
TOTAL INTEREST RATE SWAPS		57,530	(2,294)
		$ 58,530	$ (3,232)

Legend

(a) 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. At the end of the period, the value of these securities amounted to $19,559,000 or 1.9% of net assets.

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(c) A portion of the security is subject to a forward commitment to sell.

(d) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $133,000.

(e) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $3,915,000.

(f) Represents a credit default swap contract in which the fund has sold protection on the underlying reference entity. For the underlying reference entity, ratings disclosed are from Moody's Investor Services, Inc. Where Moody's ratings are not available, S&P ratings are disclosed and are indicated as such. Any underlying reference entity which is Not Rated (NR) by Moody's or S&P is designated as such. All ratings are as of the report date and do not reflect subsequent changes.

(g) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(h) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.

(i) Principal Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans.

(j) Coupon is inversely indexed to a floating interest rate multiplied by a specified factor. The price may be considerably more volatile than the price of a comparable fixed rate security.

* Amount represents less than $1,000.

# Additional Information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value (Amounts in thousands)
$30,805,000 due 3/02/09 at 0.26%
Goldman, Sachs & Co.	$ 12,079
UBS Securities LLC	18,726
	$ 30,805

Other Information

The following is a summary of the inputs used, as of February 28, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:
Description (Amounts in thousands)	Total	Level 1	Level 2	Level 3
Investments in Securities	$ 1,466,639	$ -	$ 1,443,311	$ 23,328
Other Financial Instruments*	$ (3,467)	$ (5)	$ (2,524)	$ (938)

* Other financial instruments include Futures Contracts, Swap Agreements and Forward Commitments.

The following is a reconciliation of assets for which Level 3 inputs were used in determining value:

(Amounts in thousands)	Investments in Securities	Other Financial Instruments
Beginning Balance	$ 2,301	$ (804)
Total Realized Gain (Loss)	71	- *
Total Unrealized Gain (Loss)	(10,087)	756
Cost of Purchases	9,218	-
Proceeds of Sales	(3,511)	-
Amortization/Accretion	(1,753)	-
Transfer in/out of Level 3	27,089	(890)
Ending Balance	$ 23,328	$ (938)

* The realized gain (loss) for derivative instruments is not included in the rollforward. For the period, the realized gain (loss) on these instruments totaled $(897,000).

The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities or Other Financial Instruments identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period.

Income Tax Information

At August 31, 2008, the fund had a capital loss carryforward of approximately $34,825,000 of which $2,470,000, $14,312,000, $3,550,000 and $14,493,000 will expire on August 31, 2013, 2014, 2015 and 2016, respectively.

The fund intends to elect to defer to its fiscal year ending August 31, 2009 approximately $107,093,000 of losses recognized during the period November 1, 2007 to August 31, 2008.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amounts)	February 28, 2009 (Unaudited)
Assets
Investment in securities, at value (including repurchase agreements of $30,805) - See accompanying schedule: Unaffiliated issuers (cost $1,501,847)		$ 1,466,639
Commitment to sell securities on a delayed delivery basis	$ (303,051)
Receivable for securities sold on a delayed delivery basis	302,821	(230)
Receivable for investments sold, regular delivery		23,417
Cash		8
Receivable for swap agreements		4
Receivable for fund shares sold		593
Interest receivable		5,483
Other receivables		114
Unrealized appreciation on swap agreements		35
Total assets		1,496,063
Liabilities
Payable for investments purchased Regular delivery	$ 601
Delayed delivery	460,377
Payable for swap agreements	920
Payable for fund shares redeemed	1,345
Distributions payable	389
Unrealized depreciation on swap agreements	3,267
Accrued management fee	277
Distribution fees payable	50
Payable for daily variation on futures contracts	16
Other affiliated payables	128
Other payables and accrued expenses	116
Total liabilities		467,486
Net Assets		$ 1,028,577
Net Assets consist of:
Paid in capital		$ 1,204,419
Distributions in excess of net investment income		(6,099)
Accumulated undistributed net realized gain (loss) on investments		(131,068)
Net unrealized appreciation (depreciation) on investments		(38,675)
Net Assets		$ 1,028,577

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

Amounts in thousands (except per-share amounts)	February 28, 2009 (Unaudited)
Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($44,431 ÷ 4,438 shares)		$ 10.01
Maximum offering price per share (100/96.00 of $10.01)		$ 10.43
Class T: Net Asset Value and redemption price per share ($39,460 ÷ 3,935 shares)		$ 10.03
Maximum offering price per share (100/96.00 of $10.03)		$ 10.45
Class B: Net Asset Value and offering price per share ($25,108 ÷ 2,508 shares)A		$ 10.01
Class C: Net Asset Value and offering price per share ($16,272 ÷ 1,627 shares)A		$ 10.00
Fidelity Mortgage Securities Fund: Net Asset Value, offering price and redemption price per share ($895,783 ÷ 89,286 shares)		$ 10.03
Institutional Class: Net Asset Value, offering price and redemption price per share ($7,523 ÷ 752 shares)		$ 10.00

^A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

Amounts in thousands	Six months ended February 28, 2009 (Unaudited)
Investment Income
Interest		$ 29,298
Expenses
Management fee	$ 1,750
Transfer agent fees	645
Distribution fees	309
Fund wide operations fee	162
Independent trustees' compensation	2
Miscellaneous	5
Total expenses before reductions	2,873
Expense reductions	(1)	2,872
Net investment income		26,426
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	11,233
Futures contracts	(539)
Swap agreements	(781)
Total net realized gain (loss)		9,913
Change in net unrealized appreciation (depreciation) on: Investment securities	(17,972)
Futures contracts	99
Swap agreements	(1,225)
Delayed delivery commitments	1,326
Total change in net unrealized appreciation (depreciation)		(17,772)
Net gain (loss)		(7,859)
Net increase (decrease) in net assets resulting from operations		$ 18,567

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

Amounts in thousands	Six months ended February 28, 2009 (Unaudited)	Year ended August 31, 2008
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 26,426	$ 65,979
Net realized gain (loss)	9,913	(102,798)
Change in net unrealized appreciation (depreciation)	(17,772)	41,977
Net increase (decrease) in net assets resulting from operations	18,567	5,158
Distributions to shareholders from net investment income	(27,059)	(68,876)
Share transactions - net increase (decrease)	(146,241)	(404,510)
Total increase (decrease) in net assets	(154,733)	(468,228)
Net Assets
Beginning of period	1,183,310	1,651,538
End of period (including distributions in excess of net investment income of $6,099 and distributions in excess of net investment income of $5,466, respectively)	$ 1,028,577	$ 1,183,310

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.33	$ 11.30	$ 11.26
Income from Investment Operations
Net investment income E	.226	.467	.521	.404	.408	.365	.282
Net realized and unrealized gain (loss)	(.073)	(.461)	(.401)	(.021)	(.267)	.181	.112
Total from investment operations	.153	.006	.120	.383	.141	.546	.394
Distributions from net investment income	(.233)	(.486)	(.520)	(.403)	(.421)	(.366)	(.274)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.233)	(.486)	(.520)	(.403)	(.481)	(.516)	(.354)
Net asset value, end of period	$ 10.01	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.33	$ 11.30
Total Return B, C, D	1.54%	.06%	1.04%	3.56%	1.26%	4.97%	3.56%
Ratios to Average Net Assets G
Expenses before reductions	.86% A	.85%	.79%	.74% A	.82%	.86%	.81%
Expenses net of fee waivers, if any	.86% A	.85%	.79%	.74% A	.82%	.86%	.81%
Expenses net of all reductions	.86% A	.85%	.78%	.74% A	.82%	.86%	.81%
Net investment income	4.54% A	4.52%	4.77%	4.44% A	3.65%	3.24%	2.51%
Supplemental Data
Net assets, end of period (in millions)	$ 44	$ 39	$ 54	$ 54	$ 50	$ 55	$ 69
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class T

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.11	$ 10.59	$ 10.99	$ 11.00	$ 11.34	$ 11.31	$ 11.28
Income from Investment Operations
Net investment income E	.227	.470	.519	.399	.400	.353	.270
Net realized and unrealized gain (loss)	(.074)	(.462)	(.403)	(.012)	(.268)	.181	.101
Total from investment operations	.153	.008	.116	.387	.132	.534	.371
Distributions from net investment income	(.233)	(.488)	(.516)	(.397)	(.412)	(.354)	(.261)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.233)	(.488)	(.516)	(.397)	(.472)	(.504)	(.341)
Net asset value, end of period	$ 10.03	$ 10.11	$ 10.59	$ 10.99	$ 11.00	$ 11.34	$ 11.31
Total Return B, C, D	1.54%	.07%	1.01%	3.59%	1.18%	4.86%	3.34%
Ratios to Average Net Assets G
Expenses before reductions	.86% A	.83%	.82%	.81% A	.89%	.96%	.93%
Expenses net of fee waivers, if any	.86% A	.83%	.82%	.81% A	.89%	.96%	.93%
Expenses net of all reductions	.86% A	.83%	.82%	.81% A	.89%	.96%	.93%
Net investment income	4.54% A	4.53%	4.73%	4.37% A	3.57%	3.14%	2.39%
Supplemental Data
Net assets, end of period (in millions)	$ 39	$ 41	$ 68	$ 89	$ 126	$ 131	$ 155
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class B

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.32	$ 11.30	$ 11.26
Income from Investment Operations
Net investment income E	.194	.400	.443	.336	.323	.278	.197
Net realized and unrealized gain (loss)	(.073)	(.461)	(.401)	(.022)	(.257)	.172	.112
Total from investment operations	.121	(.061)	.042	.314	.066	.450	.309
Distributions from net investment income	(.201)	(.419)	(.442)	(.334)	(.336)	(.280)	(.189)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.201)	(.419)	(.442)	(.334)	(.396)	(.430)	(.269)
Net asset value, end of period	$ 10.01	$ 10.09	$ 10.57	$ 10.97	$ 10.99	$ 11.32	$ 11.30
Total Return B, C, D	1.21%	(.58)%	.32%	2.91%	.58%	4.08%	2.78%
Ratios to Average Net Assets G
Expenses before reductions	1.51% A	1.50%	1.50%	1.50% A	1.58%	1.63%	1.57%
Expenses net of fee waivers, if any	1.51% A	1.50%	1.50%	1.50% A	1.58%	1.63%	1.57%
Expenses net of all reductions	1.51% A	1.50%	1.50%	1.50% A	1.58%	1.63%	1.57%
Net investment income	3.89% A	3.86%	4.05%	3.68% A	2.89%	2.48%	1.75%
Supplemental Data
Net assets, end of period (in millions)	$ 25	$ 32	$ 50	$ 74	$ 101	$ 134	$ 182
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class C

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 F	2005 H	2004 H	2003 H
Selected Per-Share Data
Net asset value, beginning of period	$ 10.08	$ 10.56	$ 10.96	$ 10.98	$ 11.31	$ 11.29	$ 11.25
Income from Investment Operations
Net investment income E	.188	.389	.434	.328	.316	.273	.189
Net realized and unrealized gain (loss)	(.072)	(.459)	(.401)	(.021)	(.257)	.172	.112
Total from investment operations	.116	(.070)	.033	.307	.059	.445	.301
Distributions from net investment income	(.196)	(.410)	(.433)	(.327)	(.329)	(.275)	(.181)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.196)	(.410)	(.433)	(.327)	(.389)	(.425)	(.261)
Net asset value, end of period	$ 10.00	$ 10.08	$ 10.56	$ 10.96	$ 10.98	$ 11.31	$ 11.29
Total Return B, C, D	1.17%	(.68)%	.25%	2.85%	.52%	4.04%	2.71%
Ratios to Average Net Assets G
Expenses before reductions	1.61% A	1.60%	1.58%	1.57% A	1.64%	1.68%	1.64%
Expenses net of fee waivers, if any	1.61% A	1.60%	1.58%	1.57% A	1.64%	1.68%	1.64%
Expenses net of all reductions	1.61% A	1.60%	1.58%	1.57% A	1.64%	1.68%	1.64%
Net investment income	3.79% A	3.77%	3.97%	3.61% A	2.82%	2.42%	1.68%
Supplemental Data
Net assets, end of period (in millions)	$ 16	$ 15	$ 23	$ 31	$ 41	$ 58	$ 99
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Fidelity Mortgage Securities Fund

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 E	2005 G	2004 G	2003 G
Selected Per-Share Data
Net asset value, beginning of period	$ 10.11	$ 10.59	$ 10.99	$ 11.01	$ 11.34	$ 11.31	$ 11.28
Income from Investment Operations
Net investment income D	.247	.509	.559	.432	.438	.390	.306
Net realized and unrealized gain (loss)	(.074)	(.462)	(.403)	(.023)	(.257)	.183	.102
Total from investment operations	.173	.047	.156	.409	.181	.573	.408
Distributions from net investment income	(.253)	(.527)	(.556)	(.429)	(.451)	(.393)	(.298)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.253)	(.527)	(.556)	(.429)	(.511)	(.543)	(.378)
Net asset value, end of period	$ 10.03	$ 10.11	$ 10.59	$ 10.99	$ 11.01	$ 11.34	$ 11.31
Total Return B, C	1.74%	.46%	1.38%	3.80%	1.61%	5.21%	3.68%
Ratios to Average Net Assets F
Expenses before reductions	.45% A	.45%	.45%	.45% A	.55%	.62%	.60%
Expenses net of fee waivers, if any	.45% A	.45%	.45%	.45% A	.55%	.62%	.60%
Expenses net of all reductions	.45% A	.45%	.45%	.45% A	.55%	.62%	.60%
Net investment income	4.94% A	4.91%	5.10%	4.73% A	3.91%	3.48%	2.72%
Supplemental Data
Net assets, end of period (in millions)	$ 896	$ 1,049	$ 1,446	$ 1,612	$ 1,807	$ 1,525	$ 1,302
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Institutional Class

	Six months ended February 28, 2009	Years ended August 31,
	(Unaudited)	2008	2007	2006 E	2005 G	2004 G	2003 G
Selected Per-Share Data
Net asset value, beginning of period	$ 10.08	$ 10.56	$ 10.97	$ 10.98	$ 11.32	$ 11.29	$ 11.25
Income from Investment Operations
Net investment income D	.242	.499	.548	.424	.432	.387	.302
Net realized and unrealized gain (loss)	(.073)	(.461)	(.411)	(.011)	(.266)	.182	.112
Total from investment operations	.169	.038	.137	.413	.166	.569	.414
Distributions from net investment income	(.249)	(.518)	(.547)	(.423)	(.446)	(.389)	(.294)
Distributions from net realized gain	-	-	-	-	(.060)	(.150)	(.080)
Total distributions	(.249)	(.518)	(.547)	(.423)	(.506)	(.539)	(.374)
Net asset value, end of period	$ 10.00	$ 10.08	$ 10.56	$ 10.97	$ 10.98	$ 11.32	$ 11.29
Total Return B, C	1.71%	.37%	1.20%	3.85%	1.48%	5.19%	3.75%
Ratios to Average Net Assets F
Expenses before reductions	.53% A	.54%	.53%	.52% A	.60%	.66%	.63%
Expenses net of fee waivers, if any	.53% A	.54%	.53%	.52% A	.60%	.66%	.63%
Expenses net of all reductions	.53% A	.54%	.53%	.52% A	.60%	.66%	.63%
Net investment income	4.87% A	4.83%	5.02%	4.66% A	3.87%	3.45%	2.69%
Supplemental Data
Net assets, end of period (in millions)	$ 8	$ 7	$ 10	$ 14	$ 16	$ 13	$ 16
Portfolio turnover rate	473% A	397%	409%	232% A	183%	204%	356%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G For the period ended October 31.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Notes to Financial Statements

For the period ended February 28, 2009 (Unaudited)

(Amounts in thousands except ratios)

1. Organization.

Fidelity Advisor Mortgage Securities Fund (the Fund) is a fund of Fidelity Advisor Series II (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Fidelity Mortgage Securities Fund, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

2. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Fund uses independent pricing services approved by the Board of Trustees to value its investments.

Debt securities, including restricted securities, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Swaps are marked-to-market daily based on valuations from independent pricing services or dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Investments in open-end mutual funds are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value. Actual prices received at disposition may differ.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Significant Accounting Policies - continued

Security Valuation - continued

When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.

The Fund adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:

Level 1	Quoted prices in active markets for identical securities.
Level 2	Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3	Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.

The aggregate value by input level, as of February 28, 2009, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.

Semiannual Report

2. Significant Accounting Policies - continued

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years.

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to futures transactions, swap agreements, market discount, deferred trustees compensation, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation	$ 26,595
Unrealized depreciation	(61,807)
Net unrealized appreciation (depreciation)	$ (35,212)
Cost for federal income tax purposes	$ 1,501,851

New Accounting Pronouncement. In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for reporting periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance.

3. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Delayed Delivery Transactions and When-Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of

Semiannual Report

3. Operating Policies - continued

Delayed Delivery Transactions and When-Issued Securities - continued

Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Futures Contracts. The Fund may use futures contracts to manage its exposure to the bond market and to fluctuations in interest rates. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms.

Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.

Swap Agreements. The Fund entered into swap agreements, which are contracts between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gains or

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

3. Operating Policies - continued

Swap Agreements - continued

losses in the Fund's accompanying Statement of Operations. Gains or losses are realized in the event of an early termination of a swap agreement. Risks of loss may exceed amounts recognized on the Fund's Statement of Assets and Liabilities. Risks of loss may include unfavorable changes in the returns of the underlying instruments or indexes, adverse fluctuations of interest rates, failure of the counterparty to perform under the terms of the agreement and lack of liquidity in the market. Details of swap agreements open at period end are included in the Fund's Schedule of Investments under the caption "Swap Agreements." Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian bank in accordance with the swap agreement and if required, is identified in the Fund's Schedule of Investments. The Fund could experience delays and costs in gaining access to the collateral even though it is held in the Fund's custodian bank.

The Fund entered into interest rate swap agreements to manage its exposure to interest rate changes. Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates (e.g. fixed rate, floating rate), applied to a notional principal amount. Changes in interest rates can have a negative effect on both the value of the Fund's bond holdings as well as the amount of interest income earned. In general, the value of bonds can fall when interest rates rise and can rise when interest rates fall.

The Fund entered into credit default swap agreements to provide a measure of protection against defaults of an issuer ("buyer of protection") and/or to gain credit exposure to an issuer to which it is not otherwise exposed ("seller of protection"). The issuer may be either a single issuer or a "basket" of issuers. As a buyer of protection, the Fund does so when it holds bonds of the issuer or without owning the underlying asset or debt issued by the reference entity. Under the terms of a credit default swap the buyer of protection (buyer) receives credit protection in exchange for making periodic payments to the seller of protection (seller) based on a fixed percentage applied to a notional principal amount. In return for these payments, the seller acts as a guarantor of the credit worthiness of a reference obligation. Any upfront payments made or received upon entering a credit default swap contract would be amortized or accreted over the life of the swap and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Periodic payments are made over the life of the contract provided that no credit event occurs. For credit default swaps on asset-backed securities, a credit event may be triggered by events such as failure to pay principal, maturity extension, rating downgrade or write-down. For credit default swaps on corporate or sovereign issuers, a credit event

Semiannual Report

3. Operating Policies - continued

Swap Agreements - continued

may be triggered by events such as bankruptcy, failure to pay, obligation acceleration, repudiation/moratorium or restructuring. If a credit event were to occur during the term of the contract, upon notification from the buyer, the seller is obligated to take delivery from the buyer the notional amount of a reference obligation, at par. The difference between the value of the obligation received and the notional amount paid is recorded as a realized loss to the seller. For credit default swaps on asset-backed securities, the reference obligation described represents the security that will be put to the seller. For credit default swaps on corporate or sovereign issuers, under the terms of the agreement, the obligation that is put to the seller is not limited to the specific reference obligation described in the Fund's Schedule of Investments.

The notional amount of credit default swaps is included in the Fund's Schedule of Investments and approximates the maximum potential amount of future payments that the Fund could be required to make if the Fund is the seller of protection and a credit event were to occur. The total notional amount of all credit default swaps open at period end where the Fund is the seller of protection amounted to $1,000 representing 0.0% of net assets.

The value of each credit default swap and credit rating disclosed for each reference obligation in the Fund's Schedule of Investments, where the Fund is the seller of protection, are both measures of the current payment/performance risk of the swap. As the value of the swap changes as a positive or negative percentage of the total notional amount, the payment/performance risk may decrease or increase, respectively. Any current or future declines in the value of the swap may be partially offset by upfront payments received by the Fund as the seller of protection if applicable. In addition to these measures, FMR monitors a variety of factors including cash flow assumptions, market activity and market sentiment as part of its ongoing process of assessing payment/performance risk.

4. Purchases and Sales of Investments.

Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $31,179 and $51,239, respectively.

5. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20%

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

5. Fees and Other Transactions with Affiliates - continued

Management Fee - continued

of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .32% of the Fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

	Distribution Fee	Service Fee	Paid to FDC	Retained by FDC
Class A	0%	.25%	$ 53	$ 4
Class T	0%	.25%	51	1
Class B	.65%	.25%	127	92
Class C	.75%	.25%	78	5
			$ 309	$ 102

Sales Load. FDC receives a front-end sales charge of up to 4.00% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, ..75% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

	Retained by FDC
Class A	$ 2
Class T	1
Class B*	20
Class C*	2
	$ 25

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Semiannual Report

5. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of each respective class of the Fund, with the exception of Fidelity Mortgage Securities Fund. FIIOC receives an asset-based fee of .10% of Fidelity Mortgage Securities Fund's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:

	Amount	% of Average Net Assets*
Class A	$ 53	.25
Class T	51	.25
Class B	35	.25
Class C	19	.25
Fidelity Mortgage Securities Fund	479	.10
Institutional Class	8	.18
	$ 645

* Annualized

Fundwide Operations Fee. Pursuant to the Fundwide Operations and Expense Agreement (FWOE), FMR has agreed to provide for fund level expenses (which do not include transfer agent, Rule 12b-1 fees, compensation of the independent Trustees, interest (including commitment fees), taxes or extraordinary expenses, if any) in return for a FWOE fee equal to .35% less the total amount of the management fee. The FWOE paid by the Fund is reduced by an amount equal to the fees and expenses paid to the independent Trustees. For the period, the FWOE fee was equivalent to an annualized rate of .03% of average net assets.

6. Committed Line of Credit.

The Fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

7. Expense Reductions.

Through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's management fee by $1.

8. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

	Six months ended February 28, 2009	Year ended August 31, 2008
From net investment income
Class A	$ 988	$ 2,205
Class T	944	2,500
Class B	559	1,654
Class C	305	733
Fidelity Mortgage Securities Fund	24,054	61,360
Institutional Class	209	424
Total	$ 27,059	$ 68,876

9. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class A
Shares sold	1,323	1,233	$ 13,269	$ 12,720
Reinvestment of distributions	82	189	825	1,952
Shares redeemed	(853)	(2,645)	(8,577)	(27,288)
Net increase (decrease)	552	(1,223)	$ 5,517	$ (12,616)
Class T
Shares sold	756	652	$ 7,676	$ 6,745
Reinvestment of distributions	88	227	881	2,348
Shares redeemed	(945)	(3,306)	(9,499)	(34,313)
Net increase (decrease)	(101)	(2,427)	$ (942)	$ (25,220)
Class B
Shares sold	114	74	$ 1,147	$ 761
Reinvestment of distributions	47	133	470	1,376
Shares redeemed	(812)	(1,820)	(8,157)	(18,803)
Net increase (decrease)	(651)	(1,613)	$ (6,540)	$ (16,666)

Semiannual Report

9. Share Transactions - continued

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class C
Shares sold	418	130	$ 4,222	$ 1,330
Reinvestment of distributions	24	57	235	589
Shares redeemed	(314)	(838)	(3,153)	(8,656)
Net increase (decrease)	128	(651)	$ 1,304	$ (6,737)
Fidelity Mortgage Securities Fund
Shares sold	6,701	12,801	$ 67,565	$ 131,962
Reinvestment of distributions	2,218	5,511	22,222	57,031
Shares redeemed	(23,384)	(51,088)	(235,660)	(529,926)
Net increase (decrease)	(14,465)	(32,776)	$ (145,873)	$ (340,933)
Institutional Class
Shares sold	391	224	$ 3,934	$ 2,294
Reinvestment of distributions	15	32	149	335
Shares redeemed	(378)	(482)	(3,790)	(4,967)
Net increase (decrease)	28	(226)	$ 293	$ (2,338)

10. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

11. Credit Risk.

The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers backed by residential mortgage loans, credit card receivables and automotive loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults.

Semiannual Report

Managing Your Investments

Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.

By Phone

Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.

(phone_graphic)

Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555

Press

For mutual fund and brokerage trading.

For quotes.*

For account balances and holdings.

To review orders and mutual
fund activity.

To change your PIN.

To speak to a Fidelity representative.

By PC

Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.

(computer_graphic)

Fidelity's Web Site
www.fidelity.com

* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.

Semiannual Report

To Visit Fidelity

For directions and hours, 
please call 1-800-544-9797.

Arizona

7001 West Ray Road
Chandler, AZ

15445 N. Scottsdale Road
Scottsdale, AZ

California

815 East Birch Street
Brea, CA

1411 Chapin Avenue
Burlingame, CA

851 East Hamilton Avenue
Campbell, CA

19200 Von Karman Avenue
Irvine, CA

601 Larkspur Landing Circle
Larkspur, CA

2000 Avenue of the Stars
Los Angeles, CA

27101 Puerta Real
Mission Viejo, CA

73-575 El Paseo
Palm Desert, CA

251 University Avenue
Palo Alto, CA

123 South Lake Avenue
Pasadena, CA

16656 Bernardo Ctr. Drive
Rancho Bernardo, CA

1220 Roseville Parkway
Roseville, CA

1740 Arden Way
Sacramento, CA

7676 Hazard Center Drive
San Diego, CA

11943 El Camino Real
San Diego, CA

8 Montgomery Street
San Francisco, CA

3793 State Street
Santa Barbara, CA

1200 Wilshire Boulevard
Santa Monica, CA

398 West El Camino Real
Sunnyvale, CA

111 South Westlake Blvd
Thousand Oaks, CA

21701 Hawthorne Boulevard
Torrance, CA

2001 North Main Street
Walnut Creek, CA

6326 Canoga Avenue
Woodland Hills, CA

Colorado

281 East Flatiron Circle
Broomfield, CO

1625 Broadway
Denver, CO

9185 Westview Road
Lone Tree, CO

Connecticut

48 West Putnam Avenue
Greenwich, CT

265 Church Street
New Haven, CT

300 Atlantic Street
Stamford, CT

29 South Main Street
West Hartford, CT

Delaware

400 Delaware Avenue
Wilmington, DE

Florida

175 East Altamonte Drive
Altamonte Springs, FL

4400 N. Federal Highway
Boca Raton, FL

121 Alhambra Plaza
Coral Gables, FL

2948 N. Federal Highway
Ft. Lauderdale, FL

4671 Town Center Parkway
Jacksonville, FL

8880 Tamiami Trail, North
Naples, FL

230 Royal Palm Way
Palm Beach, FL

3501 PGA Boulevard
Palm Beach Gardens, FL

3550 Tamiami Trail, South
Sarasota, FL

1502 N. Westshore Blvd.
Tampa, FL

2465 State Road 7
Wellington, FL

Georgia

3445 Peachtree Road, N.E.
Atlanta, GA

1000 Abernathy Road
Atlanta, GA

Illinois

One North LaSalle Street
Chicago, IL

401 North Michigan Avenue
Chicago, IL

One Skokie Valley Road
Highland Park, IL

1415 West 22nd Street
Oak Brook, IL

15105 S LaGrange Road
Orland Park, IL

1572 East Golf Road
Schaumburg, IL

Indiana

4729 East 82nd Street
Indianapolis, IN

8480 Keystone Crossing
Indianapolis, IN

Kansas

5400 College Boulevard
Overland Park, KS

Maine

Three Canal Plaza
Portland, ME

Maryland

7315 Wisconsin Avenue
Bethesda, MD

610 York Road
Towson, MD

Massachusetts

801 Boylston Street
Boston, MA

155 Congress Street
Boston, MA

300 Granite Street
Braintree, MA

44 Mall Road
Burlington, MA

238 Main Street
Cambridge, MA

200 Endicott Street
Danvers, MA

Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC

Semiannual Report

405 Cochituate Road
Framingham, MA

551 Boston Turnpike
Shrewsbury, MA

Michigan

500 E. Eisenhower Pkwy.
Ann Arbor, MI

280 Old N. Woodward Ave.
Birmingham, MI

30200 Northwestern Hwy.
Farmington Hills, MI

43420 Grand River Avenue
Novi, MI

Minnesota

7740 France Avenue South
Edina, MN

8342 3rd Street North
Oakdale, MN

Missouri

1524 South Lindbergh Blvd.
St. Louis, MO

Nevada

2225 Village Walk Drive
Henderson, NV

New Jersey

501 Route 73 South
Marlton, NJ

150 Essex Street
Millburn, NJ

35 Morris Street
Morristown, NJ

396 Route 17, North
Paramus, NJ

3518 Route 1 North
Princeton, NJ

530 Broad Street
Shrewsbury, NJ

New Mexico

2261 Q Street NE
Albuquerque, NM

New York

1130 Franklin Avenue
Garden City, NY

37 West Jericho Turnpike
Huntington Station, NY

1271 Avenue of the Americas
New York, NY

980 Madison Avenue
New York, NY

61 Broadway
New York, NY

350 Park Avenue
New York, NY

200 Fifth Avenue
New York, NY

733 Third Avenue
New York, NY

11 Penn Plaza
New York, NY

2070 Broadway
New York, NY

1075 Northern Blvd.
Roslyn, NY

799 Central Park Avenue
Scarsdale, NY

North Carolina

4611 Sharon Road
Charlotte, NC

7011 Fayetteville Road
Durham, NC

Ohio

3805 Edwards Road
Cincinnati, OH

1324 Polaris Parkway
Columbus, OH

1800 Crocker Road
Westlake, OH

28699 Chagrin Boulevard
Woodmere Village, OH

Oregon

7493 SW Bridgeport Road
Tigard, OR

Pennsylvania

600 West DeKalb Pike
King of Prussia, PA

1735 Market Street
Philadelphia, PA

12001 Perry Highway
Wexford, PA

Rhode Island

10 Memorial Boulevard
Providence, RI

Tennessee

3018 Peoples Street
Johnson City, TN

7628 West Farmington Blvd.
Germantown, TN

2035 Mallory Lane
Franklin, TN

Texas

10000 Research Boulevard
Austin, TX

4001 Northwest Parkway
Dallas, TX

12532 Memorial Drive
Houston, TX

2701 Drexel Drive
Houston, TX

6560 Fannin Street
Houston, TX

1701 Lake Robbins Drive
The Woodlands, TX

6500 N. MacArthur Blvd.
Irving, TX

6005 West Park Boulevard
Plano, TX

14100 San Pedro
San Antonio, TX

1576 East Southlake Blvd.
Southlake, TX

Utah

279 West South Temple
Salt Lake City, UT

Virginia

1861 International Drive
McLean, VA

Washington

10500 NE 8th Street
Bellevue, WA

1518 6th Avenue
Seattle, WA

Washington, DC

1900 K Street, N.W.
Washington, DC

Wisconsin

16020 West Bluemound Road
Brookfield, WI

Semiannual Report

To Write Fidelity

We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.

(letter_graphic)

Making Changes
To Your Account

(such as changing name, address, bank, etc.)

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002

(letter_graphic)

For Non-Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

(letter_graphic)

For Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Investments Money Management, Inc.

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan), Inc.

Fidelity Research & Analysis Company

FIL Investment Advisors

FIL Investment Advisors
(U.K.) Ltd.

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York Mellon

New York, NY

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)

TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

Fidelity Automated Service
Telephone (FAST®) 1-800-544-5555

Automated line for quickest service

MOR-USAN-0409
1.784900.106

(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Short Fixed-Income
Fund - Class A, Class T, Class B and Class C

Semiannual Report

February 28, 2009

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message	<Click Here>	Ned Johnson's message to shareholders.
Shareholder Expense Example	<Click Here>	An example of shareholder expenses.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.
Report of Independent Registered Public Accounting Firm	<Click Here>

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.

One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.

You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).

A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.

We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2008 to February 28, 2009).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that in the underlying Fidelity Central Funds, will indirectly bear its pro appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholderrata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio	Beginning Account Value September 1, 2008	Ending Account Value February 28, 2009	Expenses Paid During Period* September 1, 2008 to February 28, 2009
Class A	.79%
Actual		$ 1,000.00	$ 981.10	$ 3.88
HypotheticalA		$ 1,000.00	$ 1,020.88	$ 3.96
Class T	.77%
Actual		$ 1,000.00	$ 981.20	$ 3.78
HypotheticalA		$ 1,000.00	$ 1,020.98	$ 3.86
Class B	1.55%
Actual		$ 1,000.00	$ 972.90	$ 7.58
HypotheticalA		$ 1,000.00	$ 1,017.11	$ 7.75
Class C	1.60%
Actual		$ 1,000.00	$ 976.10	$ 7.84
HypotheticalA		$ 1,000.00	$ 1,016.86	$ 8.00
Institutional Class	.54%
Actual		$ 1,000.00	$ 985.70	$ 2.66
HypotheticalA		$ 1,000.00	$ 1,022.12	$ 2.71

^A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.

Semiannual Report

Investment Changes (Unaudited)

The information in the following table is based on the combined investments of the Fund and its pro-rata share of the investments in each non-money market Fidelity Central Fund.

Quality Diversification (% of fund's net assets)
As of February 28, 2009		As of August 31, 2008
	U.S. Government and U.S. Government Agency Obligations†† 68.7%		U.S. Government and U.S. Government Agency Obligations 53.4%
	AAA 8.7%		AAA 12.6%
	AA 4.4%		AA 4.9%
	A 6.9%		A 7.8%
	BBB 9.8%		BBB 13.4%
	BB and Below 1.3%		BB and Below 0.8%
	Not Rated 0.3%		Not Rated 0.3%
	Short-Term Investments and Net Other Assets † (0.1)%		Short-Term Investments and Net Other Assets 6.8%

We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades.

Weighted Average Maturity as of February 28, 2009
		6 months ago
Years	2.3	1.8

The weighted average maturity is based on the dollar-weighted average length of time until principal payments are expected or until securities reach maturity, taking into account any maturity shortening feature such as a call, refunding or redemption provision.

Duration as of February 28, 2009
		6 months ago
Years	1.7	1.6

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)
As of February 28, 2009*			As of August 31, 2008**
	Corporate Bonds 14.8%			Corporate Bonds 16.5%
	U.S. Government and U.S. Government Agency Obligations†† 68.7%			U.S. Government and U.S. Government Agency Obligations 53.4%
	Asset-Backed Securities 9.3%			Asset-Backed Securities 13.1%
	CMOs and Other Mortgage Related Securities 7.3%			CMOs and Other Mortgage Related Securities 10.2%
	Short-Term Investments and Net Other Assets† (0.1)%			Short-Term Investments and Net Other Assets 6.8%
* Foreign investments		4.4%	** Foreign investments		6.4%
* Futures and Swaps		8.1%	** Futures and Swaps		16.1%

^† Short-Term Investments and Net Other Assets are not included in the pie chart.

^†† Includes FDIC Guaranteed Corporate Securities

A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com.

Semiannual Report

Investments February 28, 2009

Showing Percentage of Net Assets

Nonconvertible Bonds - 14.8%
	Principal Amount		Value
CONSUMER DISCRETIONARY - 1.1%
Auto Components - 0.4%
DaimlerChrysler NA Holding Corp. 5.75% 8/10/09	$ 4,820,000		$ 4,786,877
Media - 0.7%
AOL Time Warner, Inc. 6.75% 4/15/11	1,000,000		1,014,834
Comcast Cable Communications, Inc. 6.75% 1/30/11	2,645,000		2,740,725
Comcast Corp. 5.85% 1/15/10	2,000,000		2,024,738
Time Warner Cable, Inc. 5.4% 7/2/12	1,245,000		1,197,806
Viacom, Inc. 5.75% 4/30/11	860,000		833,955
			7,812,058
TOTAL CONSUMER DISCRETIONARY			12,598,935
CONSUMER STAPLES - 0.2%
Food Products - 0.2%
Kraft Foods, Inc. 5.625% 8/11/10	2,810,000		2,886,997
ENERGY - 1.2%
Oil, Gas & Consumable Fuels - 1.2%
Canadian Oil Sands Ltd. 4.8% 8/10/09 (e)	1,865,000		1,854,312
Chevron Corp. 3.45% 3/3/12	3,121,000		3,128,703
Delek & Avner-Yam Tethys Ltd. 5.326% 8/1/13 (e)	2,092,117		1,956,925
Duke Capital LLC:
4.37% 3/1/09	2,045,000		2,045,000
7.5% 10/1/09	1,525,000		1,553,783
Enterprise Products Operating LP 4.625% 10/15/09	3,070,000		3,054,963
Petroleum Export Ltd.:
4.623% 6/15/10 (e)	505,000		467,600
4.633% 6/15/10 (e)	303,333		280,890
			14,342,176
FINANCIALS - 5.1%
Capital Markets - 1.0%
Bear Stearns Companies, Inc.:
3.25% 3/25/09	1,565,000		1,565,059
5.85% 7/19/10	4,015,000		4,049,401
Credit Suisse USA, Inc. 0.5275% 6/5/09 (j)	2,875,000		2,852,630
Janus Capital Group, Inc. 6.125% 9/15/11	955,000		668,353
Morgan Stanley:
5.05% 1/21/11	1,283,000		1,265,310
6.75% 4/15/11	1,695,000		1,701,946
			12,102,699
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Commercial Banks - 1.6%
American Express Bank FSB 0.5369% 4/26/10 (j)	$ 1,576,000		$ 1,470,025
Bank of America NA 1.8219% 5/12/10 (j)	2,350,000		2,295,957
Bank One Corp. 7.875% 8/1/10	885,000		913,184
Chase Manhattan Corp. 7.875% 6/15/10	1,990,000		2,036,705
DBS Bank Ltd. (Singapore) 1.4544% 5/16/17 (e)(j)	147,614		116,615
HSBC Holdings PLC:
1.6125% 10/6/16 (j)	145,000		116,276
7.5% 7/15/09	1,215,000		1,220,458
Korea Development Bank 3.875% 3/2/09	1,600,000		1,600,000
Manufacturers & Traders Trust Co. 2.935% 4/1/13 (e)(j)	91,476		76,528
National Australia Bank Ltd. 8.6% 5/19/10	1,260,000		1,299,851
Santander Issuances SA Unipersonal 1.885% 6/20/16 (e)(j)	442,865		333,450
Sovereign Bank 2.88% 8/1/13 (j)	207,598		154,820
US Bancorp 4.5% 7/29/10	1,120,000		1,131,342
Wachovia Corp. 1.2244% 10/15/11 (j)	1,598,000		1,417,824
Wells Fargo & Co. 3.98% 10/29/10	5,710,000		5,555,636
			19,738,671
Consumer Finance - 0.8%
Capital One Financial Corp. 2.4694% 9/10/09 (j)	1,576,000		1,517,447
Household Finance Corp.:
4.125% 11/16/09	2,280,000		2,261,117
4.75% 5/15/09	1,563,000		1,565,012
MBNA Capital I 8.278% 12/1/26	1,200,000		660,000
Nelnet, Inc.:
5.125% 6/1/10	550,000		333,398
7.4% 9/29/36 (j)	2,860,000		429,000
Nissan Motor Acceptance Corp. 4.625% 3/8/10 (e)	2,090,000		1,963,674
Systems 2001 Asset Trust LLC 7.156% 12/15/11 (e)	638,108		543,058
			9,272,706
Diversified Financial Services - 0.6%
Bank of America Corp.:
4.375% 12/1/10	859,000		799,845
7.4% 1/15/11	275,000		255,305
7.8% 2/15/10	522,000		495,783
BTM Curacao Holding NV 1.8975% 12/19/16 (e)(j)	239,868		185,359
Citigroup Funding, Inc. 0.4731% 4/23/09 (j)	1,125,000		1,111,368
Citigroup, Inc. 1.3356% 5/18/11 (j)	1,200,000		1,003,985
Iberbond 2004 PLC 4.826% 12/24/17 (m)	2,198,532		1,780,811
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Diversified Financial Services - continued
ICB OJSC 6.2% 9/29/15 (Issued by Or-ICB for ICB OJSC) (j)	$ 270,000		$ 146,679
JPMorgan Chase & Co. 4.891% 9/1/15 (j)	2,440,000		1,959,647
			7,738,782
Insurance - 0.2%
Metropolitan Life Global Funding I 2.2163% 6/25/10 (e)(j)	2,105,000		1,999,540
Real Estate Investment Trusts - 0.7%
Brandywine Operating Partnership LP 5.625% 12/15/10	2,910,000		2,570,505
Colonial Properties Trust 4.75% 2/1/10	1,245,000		1,190,434
Developers Diversified Realty Corp. 5% 5/3/10	1,310,000		917,000
Duke Realty LP:
5.25% 1/15/10	615,000		586,364
5.625% 8/15/11	915,000		779,586
6.95% 3/15/11	719,000		636,178
Mack-Cali Realty LP 7.25% 3/15/09	520,000		519,077
Simon Property Group LP 4.6% 6/15/10	1,130,000		1,082,496
			8,281,640
Thrifts & Mortgage Finance - 0.2%
Countrywide Home Loans, Inc. 4.125% 9/15/09	1,163,000		1,152,317
Independence Community Bank Corp. 3.585% 6/20/13 (j)	1,123,347		808,810
			1,961,127
TOTAL FINANCIALS			61,095,165
HEALTH CARE - 0.3%
Health Care Providers & Services - 0.2%
UnitedHealth Group, Inc.:
4.125% 8/15/09	675,000		675,128
5.125% 11/15/10	1,643,000		1,619,388
			2,294,516
Pharmaceuticals - 0.1%
Roche Holdings, Inc. 4.5% 3/1/12 (e)	1,600,000		1,626,298
TOTAL HEALTH CARE			3,920,814
Nonconvertible Bonds - continued
	Principal Amount		Value
INDUSTRIALS - 1.7%
Aerospace & Defense - 0.2%
BAE Systems Holdings, Inc. 4.75% 8/15/10 (e)	$ 2,600,000		$ 2,593,872
Air Freight & Logistics - 0.3%
FedEx Corp. 5.5% 8/15/09	3,900,000		3,934,468
Airlines - 0.5%
American Airlines, Inc. pass-thru trust certificates:
6.855% 10/15/10	110,680		109,020
6.978% 10/1/12	46,555		43,063
7.024% 4/15/11	2,000,000		1,940,000
Continental Airlines, Inc. 7.056% 3/15/11	749,000		726,530
Delta Air Lines, Inc. pass-thru trust certificates 7.57% 11/18/10	1,645,000		1,505,175
United Air Lines, Inc. pass-thru trust certificates:
6.071% 9/1/14	266,743		258,740
6.201% 3/1/10	216,822		204,897
6.602% 9/1/13	525,364		496,469
7.186% 10/1/12	651,521		623,832
			5,907,726
Building Products - 0.0%
Masco Corp. 2.3988% 3/12/10 (j)	338,969		304,104
Commercial Services & Supplies - 0.3%
R.R. Donnelley & Sons Co.:
3.75% 4/1/09	1,265,000		1,260,597
5.625% 1/15/12	3,030,000		2,671,536
			3,932,133
Industrial Conglomerates - 0.4%
Covidien International Finance SA 5.15% 10/15/10	2,900,000		2,969,385
Hutchison Whampoa International (03/33) Ltd. 5.45% 11/24/10 (e)	980,000		1,005,200
			3,974,585
TOTAL INDUSTRIALS			20,646,888
INFORMATION TECHNOLOGY - 0.2%
Computers & Peripherals - 0.2%
Hewlett-Packard Co. 4.25% 2/24/12	1,820,000		1,842,512
Semiconductors & Semiconductor Equipment - 0.0%
National Semiconductor Corp. 2.2463% 6/15/10 (j)	393,509		341,842
TOTAL INFORMATION TECHNOLOGY			2,184,354
Nonconvertible Bonds - continued
	Principal Amount		Value
TELECOMMUNICATION SERVICES - 2.9%
Diversified Telecommunication Services - 2.1%
Ameritech Capital Funding Corp. 6.25% 5/18/09	$ 1,765,000		$ 1,775,611
BellSouth Corp. 4.2% 9/15/09	1,775,000		1,795,610
Deutsche Telekom International Financial BV 5.375% 3/23/11	4,000,000		4,086,044
SBC Communications, Inc. 5.875% 2/1/12	486,000		502,184
Telecom Italia Capital SA 4% 1/15/10	4,770,000		4,687,116
Telefonica Emisiones SAU 5.984% 6/20/11	4,000,000		4,137,596
Telefonos de Mexico SA de CV 4.75% 1/27/10	2,455,000		2,479,550
Verizon Global Funding Corp. 7.25% 12/1/10	3,435,000		3,627,374
Verizon New England, Inc. 6.5% 9/15/11	1,475,000		1,516,793
			24,607,878
Wireless Telecommunication Services - 0.8%
America Movil SAB de CV 4.125% 3/1/09	3,925,000		3,925,000
Verizon Wireless Capital LLC 5.25% 2/1/12 (e)	1,252,000		1,234,202
Vodafone Group PLC:
5.5% 6/15/11	3,380,000		3,427,641
7.75% 2/15/10	950,000		987,376
			9,574,219
TOTAL TELECOMMUNICATION SERVICES			34,182,097
UTILITIES - 2.1%
Electric Utilities - 1.1%
Commonwealth Edison Co. 5.4% 12/15/11	992,000		1,008,844
Entergy Corp. 7.75% 12/15/09 (e)	2,500,000		2,396,203
Exelon Corp. 4.45% 6/15/10	3,750,000		3,713,591
Pepco Holdings, Inc. 4% 5/15/10	1,125,000		1,099,451
Progress Energy, Inc. 7.1% 3/1/11	2,181,000		2,240,266
Southern Co. 1.9513% 8/20/10 (j)	2,505,000		2,441,123
			12,899,478
Independent Power Producers & Energy Traders - 0.4%
Constellation Energy Group, Inc. 6.125% 9/1/09	3,035,000		3,036,942
PSEG Power LLC 3.75% 4/1/09	1,415,000		1,415,218
			4,452,160
Multi-Utilities - 0.6%
Dominion Resources, Inc.:
2.9213% 6/17/10 (j)	1,505,000		1,459,585
6.3% 9/30/66 (j)	1,680,000		991,200
DTE Energy Co. 7.05% 6/1/11	1,600,000		1,614,946
Nonconvertible Bonds - continued
	Principal Amount		Value
UTILITIES - continued
Multi-Utilities - continued
KeySpan Corp. 7.625% 11/15/10	$ 790,000		$ 823,415
NiSource Finance Corp. 7.875% 11/15/10	780,000		763,912
NSTAR 8% 2/15/10	715,000		743,078
Sempra Energy 4.75% 5/15/09	1,055,000		1,055,093
			7,451,229
TOTAL UTILITIES			24,802,867
TOTAL NONCONVERTIBLE BONDS (Cost $184,306,366)		176,660,293
U.S. Government and Government Agency Obligations - 58.0%
U.S. Government Agency Obligations - 18.9%
Fannie Mae:
0% 9/25/09	14,920,000		14,869,391
1.75% 3/23/11	31,250,000		31,295,938
2% 1/9/12	23,230,000		23,333,699
2.75% 2/5/14	3,063,000		3,061,919
3% 7/12/10	53,000,000		54,110,774
3.625% 8/15/11	12,000,000		12,599,448
Freddie Mac:
1.5% 1/7/11	75,303,000		75,235,980
2.125% 3/23/12	12,185,000		12,175,106
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			226,682,255
U.S. Treasury Obligations - 38.0%
U.S. Treasury Notes:
0.875% 1/31/11 (d)(n)	161,691,000		161,343,002
0.875% 2/28/11 (n)	21,384,000		21,314,107
1.125% 12/15/11	68,378,000		68,020,110
1.25% 11/30/10	63,447,000		63,744,566
1.375% 2/15/12	12,000,000		11,987,760
1.75% 11/15/11	11,568,000		11,705,428
4.625% 8/31/11	14,209,000		15,407,884
4.875% 5/31/11 (g)(h)	86,098,000		93,275,043
4.875% 7/31/11	6,861,000		7,468,308
TOTAL U.S. TREASURY OBLIGATIONS			454,266,208
U.S. Government and Government Agency Obligations - continued
	Principal Amount		Value
Other Government Related - 1.1%
Bank of America Corp. 1.4744% 4/30/12 (FDIC Guaranteed) (f)(j)	$ 1,000,000		$ 1,004,479
Goldman Sachs Group, Inc.:
1.4913% 11/9/11 (FDIC Guaranteed) (f)(j)	4,220,000		4,214,311
1.625% 7/15/11 (FDIC Guaranteed) (f)	2,120,000		2,109,470
JPMorgan Chase & Co. 1.65% 2/23/11 (FDIC Guaranteed) (f)	4,010,000		4,011,091
Morgan Stanley 3.25% 12/1/11 (FDIC Guaranteed) (f)	2,140,000		2,206,135
TOTAL OTHER GOVERNMENT RELATED			13,545,486
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $690,381,662)		694,493,949
U.S. Government Agency - Mortgage Securities - 8.0%
Fannie Mae - 6.6%
4.082% 6/1/35 (j)	251,976		253,566
4.175% 5/1/35 (j)	1,100,695		1,105,259
4.263% 7/1/35 (j)	213,801		215,895
4.291% 5/1/33 (j)	25,872		26,084
4.303% 3/1/33 (j)	54,501		55,400
4.318% 7/1/35 (j)	338,552		341,961
4.331% 2/1/35 (j)	391,353		393,904
4.34% 1/1/35 (j)	125,926		128,011
4.361% 10/1/37 (j)	694,042		707,302
4.376% 2/1/35 (j)	912,424		926,660
4.38% 7/1/33 (j)	642,775		653,808
4.405% 8/1/35 (j)	186,021		187,568
4.423% 5/1/35 (j)	64,309		65,250
4.43% 6/1/35 (j)	651,121		658,051
4.432% 3/1/35 (j)	182,064		185,008
4.455% 2/1/35 (j)	1,295,780		1,314,087
4.456% 7/1/35 (j)	3,213,080		3,197,563
4.487% 10/1/33 (j)	968,055		968,389
4.548% 10/1/33 (j)	82,508		83,306
4.55% 10/1/35 (j)	1,506,202		1,525,812
4.552% 5/1/35 (j)	1,955,206		1,992,200
4.562% 6/1/33 (j)	1,142,178		1,167,042
4.576% 7/1/35 (j)	1,740,987		1,774,526
4.6% 10/1/33 (j)	89,527		89,761
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
4.649% 10/1/35 (j)	$ 233,098		$ 235,205
4.667% 7/1/35 (j)	385,783		393,160
4.686% 10/1/34 (j)	576,981		581,742
4.688% 7/1/35 (j)	561,349		572,465
4.701% 11/1/35 (j)	738,331		755,604
4.739% 8/1/35 (j)	643,955		653,545
4.742% 12/1/34 (j)	98,409		99,521
4.747% 4/1/35 (j)	39,034		39,663
4.77% 7/1/35 (j)	5,996,258		6,126,536
4.784% 8/1/35 (j)	309,115		316,268
4.785% 2/1/36 (j)	1,867,869		1,912,129
4.792% 1/1/35 (j)	74,678		75,765
4.806% 11/1/34 (j)	294,241		297,976
4.81% 2/1/36 (j)	123,014		124,829
4.853% 1/1/35 (j)	673,957		684,228
4.893% 2/1/36 (j)	9,015,167		9,217,143
4.919% 7/1/35 (j)	1,304,613		1,333,585
4.935% 7/1/34 (j)	392,168		399,296
4.98% 5/1/35 (j)	299,565		301,715
4.987% 7/1/35 (j)	6,497,213		6,609,517
5% 3/1/18 to 6/1/18	1,986,940		2,057,800
5.003% 9/1/34 (j)	1,436,931		1,455,558
5.042% 3/1/37 (j)	677,554		689,549
5.053% 7/1/35 (j)	1,574,838		1,612,112
5.089% 9/1/34 (j)	109,536		110,755
5.125% 5/1/36 (j)	610,501		623,667
5.141% 5/1/35 (j)	73,383		74,861
5.156% 9/1/35 (j)	3,631,459		3,726,306
5.157% 9/1/35 (j)	2,081,588		2,136,031
5.16% 10/1/18 (j)	44,697		45,245
5.185% 3/1/35 (j)	60,870		61,963
5.193% 6/1/35 (j)	400,396		403,903
5.198% 3/1/35 (j)	65,977		66,299
5.331% 10/1/35 (j)	387,705		398,744
5.379% 11/1/35 (j)	567,381		584,961
5.496% 2/1/35 (j)	20,437		20,629
5.5% 7/1/13 to 6/1/19	7,460,282		7,777,481
5.51% 11/1/36 (j)	687,712		700,792
5.557% 5/1/36 (j)	1,634,326		1,697,950
6.192% 2/1/35 (j)	60,253		61,287
6.5% 6/1/11 to 3/1/35	5,261,462		5,538,233
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
7% 1/1/16 to 6/1/32	$ 519,547		$ 551,895
7.5% 5/1/12 to 10/1/14	50,284		53,059
11.5% 11/1/15	15,443		16,073
TOTAL FANNIE MAE			79,211,458
Freddie Mac - 1.3%
3.456% 2/1/34 (j)	99,766		99,662
3.883% 1/1/35 (j)	210,703		212,476
4.275% 6/1/35 (j)	176,565		179,080
4.315% 12/1/34 (j)	145,811		148,172
4.361% 2/1/35 (j)	171,124		173,444
4.407% 3/1/35 (j)	180,340		182,977
4.422% 4/1/35 (j)	921,618		935,291
4.471% 3/1/35 (j)	155,611		157,901
4.481% 4/1/35 (j)	710,925		724,845
4.522% 2/1/35 (j)	296,889		301,707
4.592% 1/1/35 (j)	1,805,427		1,840,607
4.62% 2/1/35 (j)	126,616		128,385
4.696% 11/1/35 (j)	1,239,046		1,269,868
4.705% 12/1/35 (j)	846,056		849,998
4.745% 4/1/35 (j)	1,094,771		1,114,376
4.777% 4/1/35 (j)	628,183		633,558
4.84% 11/1/35 (j)	609,130		618,702
4.921% 9/1/35 (j)	710,036		727,295
4.976% 4/1/35 (j)	1,193,215		1,205,459
5.117% 1/1/36 (j)	565,133		574,685
5.282% 8/1/36 (j)	428,829		440,929
5.288% 3/1/35 (j)	105,722		106,296
5.294% 6/1/35 (j)	407,657		417,244
5.333% 8/1/34 (j)	268,879		272,529
5.353% 6/1/37 (j)	779,147		799,739
5.526% 2/1/35 (j)	190,567		191,616
5.576% 5/1/36 (j)	1,570,708		1,625,645
8.5% 5/1/26 to 7/1/28	133,892		143,599
12% 11/1/19	8,156		9,026
TOTAL FREDDIE MAC			16,085,111
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Government National Mortgage Association - 0.1%
4.25% 7/20/34 (j)	$ 304,253		$ 305,385
7% 1/15/25 to 6/15/32	577,184		613,962
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			919,347
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $94,438,099)		96,215,916
Asset-Backed Securities - 9.2%
Accredited Mortgage Loan Trust:
Series 2003-3 Class A1, 4.46% 1/25/34	584,781		330,767
Series 2004-4 Class A2D, 0.8238% 1/25/35 (j)	163,029		58,104
Series 2005-1 Class M1, 0.9438% 4/25/35 (j)	236,650		139,592
ACE Securities Corp. Series 2006-NC2:
Class M7, 1.2238% 7/25/36 (j)	105,883		815
Class M8, 1.3238% 7/25/36 (j)	52,466		278
Class M9, 2.1738% 7/25/36 (j)	34,668		121
ACE Securities Corp. Home Equity Loan Trust:
Series 2003-HE1 Class M1, 1.4488% 11/25/33 (j)	405,273		211,077
Series 2003-HS1:
Class M1, 1.5988% 6/25/33 (j)	35		35
Class M2, 3.0988% 6/25/33 (j)	15,790		10,976
Series 2004-HE1 Class M1, 0.9738% 2/25/34 (j)	37,690		33,376
Series 2004-OP1 Class M1, 0.9938% 4/25/34 (j)	78,904		34,345
Series 2005-HE2 Class M2, 0.9238% 4/25/35 (j)	33,286		27,263
Series 2005-SD1 Class A1, 0.8738% 11/25/50 (j)	4,372		3,981
Series 2006-HE2:
Class M3, 0.8138% 5/25/36 (j)	46,008		1,417
Class M4, 0.8738% 5/25/36 (j)	38,880		820
Class M5, 0.9138% 5/25/36 (j)	56,527		882
Series 2006-OP1:
Class M4, 0.8438% 4/25/36 (j)	21,600		883
Class M5, 0.8638% 4/25/36 (j)	20,520		704
Advanta Business Card Master Trust:
Series 2006-C1 Class C1, 0.95% 10/20/14 (j)	151,049		10,573
Series 2007-A4 Class A4, 0.5% 4/22/13 (j)	553,586		409,654
Series 2007-B1 Class B, 0.72% 12/22/14 (j)	319,702		47,955
ALG Student Loan Trust I Series 2006-1 Class A1, 1.1938% 10/28/18 (e)(j)	124,070		122,383
American Express Credit Account Master Trust Series 2004-C Class C, 0.9613% 2/15/12 (e)(j)	163,986		148,869
Asset-Backed Securities - continued
	Principal Amount		Value
AmeriCredit Automobile Receivables Trust:
Series 2005-1:
Class C, 4.73% 7/6/10	$ 71,741		$ 71,248
Class D, 5.04% 5/6/11	2,500,000		2,383,137
Series 2005-DA Class A4, 5.02% 11/6/12	2,060,000		1,809,291
Series 2006-1 Class D, 5.49% 4/6/12	1,115,000		816,830
AmeriCredit Prime Automobile Receivables Trust Series 2007-2M Class A3, 5.22% 4/8/10	1,240,000		1,096,537
Ameriquest Mortgage Securities, Inc. Series 2006-M3 Class M7, 1.3238% 10/25/36 (j)	22,705		14
Ameriquest Mortgage Securities, Inc. pass-thru certificates:
Series 2003-10 Class M1, 1.1738% 12/25/33 (j)	20,599		13,036
Series 2004-R10 Class M1, 1.1738% 11/25/34 (j)	1,456,076		648,583
Series 2004-R11 Class M1, 1.1338% 11/25/34 (j)	1,922,989		943,719
Series 2004-R2:
Class M1, 0.9038% 4/25/34 (j)	32,573		24,847
Class M3, 1.0238% 4/25/34 (j)	21,351		8,132
Series 2004-R9 Class M2, 1.1238% 10/25/34 (j)	1,515,000		613,322
Series 2005-R1 Class M1, 0.9238% 3/25/35 (j)	119,578		69,702
Series 2005-R10 Class A2B, 0.6938% 12/25/35 (j)	108,461		74,358
Series 2005-R2 Class M1, 0.9238% 4/25/35 (j)	262,030		150,865
Amortizing Residential Collateral Trust Series 2002-BC3 Class A, 0.8038% 6/25/32 (j)	113,964		57,102
Argent Securities, Inc.:
Series 2006-M1 Class M7, 1.4738% 7/25/36 (j)	96,031		259
Series 2006-M2 Class M7, 1.3738% 9/25/36 (j)	87,785		79
Argent Securities, Inc. pass-thru certificates:
Series 2003-W7:
Class A2, 0.7794% 3/1/34 (j)	82,560		16,706
Class M1, 1.0794% 3/1/34 (j)	2,500,000		1,293,406
Series 2003-W9 Class M1, 1.1638% 3/25/34 (j)	1,544,402		671,126
Series 2004-W11 Class M2, 1.1738% 11/25/34 (j)	71,215		26,407
Series 2004-W5 Class M1, 1.0738% 4/25/34 (j)	916,184		539,274
Series 2004-W7:
Class M1, 1.0238% 5/25/34 (j)	75,384		23,833
Class M2, 1.0738% 5/25/34 (j)	65,880		35,597
Series 2006-W4 Class A2C, 0.6338% 5/25/36 (j)	196,970		69,309
Asset Backed Funding Corp. Series 2006-OPT2 Class M7, 1.2538% 10/25/36 (j)	165,348		2,067
Asset Backed Funding Corp. Trust Series 2005-HE1 Class M1, 0.8938% 12/25/34 (j)	182,004		88,167
Asset-Backed Securities - continued
	Principal Amount		Value
Asset Backed Securities Corp. Home Equity Loan Trust:
Series 2003-HE3 Class M1, 1.7063% 6/15/33 (j)	$ 30,965		$ 13,778
Series 2003-HE6 Class M1, 1.1238% 11/25/33 (j)	68,083		35,447
Series 2004-HE2 Class M1, 1.0238% 4/25/34 (j)	338,688		146,758
Series 2004-HE3:
Class M1, 1.0138% 6/25/34 (j)	29,981		11,866
Class M2, 1.5938% 6/25/34 (j)	586,766		367,340
Series 2004-HE6 Class A2, 0.8338% 6/25/34 (j)	622,485		239,936
Series 2006-HE6:
Class M7, 1.2738% 11/25/36 (j)	52,272		643
Class M9, 2.6238% 11/25/36 (j)	139,644		712
Axon Financial Funding Ltd. Series 2007-1A Class A1, 5.96% 4/4/17 (b)(e)(j)	432,000		0
Bank of America Credit Card Master Trust Series 2006-HE7 Class B4, 0.535% 3/15/12 (j)	435,758		391,774
Bayview Financial Acquisition Trust Series 2004-C Class A1, 1.0388% 5/28/44 (j)	499,567		303,695
Bayview Financial Mortgage Loan Trust Series 2004-A Class A, 1.0838% 2/28/44 (j)	449,521		279,476
Bear Stearns Asset Backed Securities I Trust:
Series 2004-HE8 Class M1, 1.1238% 9/25/34 (j)	906,926		153,973
Series 2005-3 Class A1, 0.9238% 9/25/35 (j)	13,852		10,103
Series 2005-FR1 Class M1, 0.9738% 6/25/35 (j)	122,904		55,837
Series 2005-HE2 Class M1, 0.9738% 2/25/35 (j)	193,704		64,168
Series 2007-HE3 Class 1A1, 0.5938% 4/25/37 (j)	554,923		424,649
Brazos Higher Education Authority, Inc. Student Loan Rev. Series 2006 A2R, 5.03% 12/1/41	2,370,000		2,227,800
Brazos Higher Education Authority, Inc. Series 2006-2 Class A9, 1.4763% 12/26/24 (j)	291,525		260,638
C-BASS Trust Series 2006-CB7 Class A2, 0.5338% 10/25/36 (j)	62,720		53,946
Capital Auto Receivables Asset Trust:
Series 2005-1 Class B, 0.83% 6/15/10 (j)	897,623		884,159
Series 2006-1 Class B, 5.26% 10/15/10	500,000		492,404
Series 2007-1 Class B, 5.15% 9/17/12	1,085,000		775,266
Series 2007-SN1 Class D, 6.05% 1/17/12	750,000		375,000
Capital One Auto Finance Trust:
Series 2005-BSS Class D, 4.8% 9/15/12	1,220,000		1,173,352
Series 2006-C Class A3B, 0.465% 7/15/11 (j)	48,436		45,068
Capital One Multi-Asset Execution Trust:
Series 2007-A6 Class A6, 0.525% 5/15/13 (j)	1,040,000		986,791
Series 2007-B5 Class B5, 5.4% 5/15/13	3,410,000		2,783,357
Series 2007-C3 Class C3, 0.745% 4/15/13 (e)(j)	369,058		265,659
Asset-Backed Securities - continued
	Principal Amount		Value
Capital One Prime Auto Receivables Trust:
Series 2005-1 Class B, 4.58% 8/15/12	$ 1,850,000		$ 1,621,092
Series 2007-1 Class B1, 5.76% 12/15/13	1,060,000		854,460
Capital Trust Ltd. Series 2004-1:
Class A2, 0.92% 7/20/39 (e)(j)	703,061		175,765
Class B, 1.22% 7/20/39 (e)(j)	373,480		52,287
Class C, 1.57% 7/20/39 (e)(j)	478,070		43,026
Carmax Auto Owner Trust:
Series 2006-1 Class C, 5.76% 11/15/12	6,935,000		5,797,343
Series 2006-2 Class C, 5.53% 3/15/13	1,070,000		874,056
Carrington Mortgage Loan Trust:
Series 2006-FRE1 Class M1, 0.7738% 7/25/36 (j)	144,785		6,964
Series 2006-NC2 Class M7, 1.3238% 6/25/36 (j)	54,000		1,080
Series 2006-RFC1 Class M9, 2.3438% 5/25/36 (j)	23,652		641
Series 2007-RFC1 Class A3, 0.6138% 12/25/36 (j)	228,766		55,380
Cendant Timeshare Receivables Funding LLC Series 2005 1A Class 2A2, 0.65% 5/20/17 (e)(j)	34,619		25,090
Chase Issuance Trust:
Series 2004-3 Class C, 0.9313% 6/15/12 (j)	67,349		60,710
Series 2006-3 Class C, 0.6913% 6/15/11 (j)	2,905,000		2,822,389
CIT Equipment Collateral Trust:
Series 2006-VT1:
Class B, 5.23% 2/20/13	113,396		111,714
Class D, 5.48% 2/20/13	126,272		114,493
Series 2006-VT2:
Class A3, 5.07% 2/20/10	982,763		981,743
Class D, 5.46% 4/20/14	43,297		21,649
Citibank Credit Card Issuance Trust:
Series 2007-B2 Class B2, 5% 4/2/12	4,320,000		3,824,505
Series 2007-B6 Class B6, 5% 11/8/12	3,410,000		2,830,300
Citigroup Mortgage Loan Trust:
Series 2003-HE4 Class A, 0.8838% 12/25/33 (e)(j)	613,025		416,147
Series 2006-AMC1 Class M7, 0.82% 9/25/36 (j)	96,012		1,152
Series 2007-AMC4 Class M1, 0.7438% 5/25/37 (j)	97,135		3,730
CNH Equipment Trust:
Series 2005-B Class B, 4.57% 7/16/12	830,000		710,237
Series 2007-A Class A3, 4.98% 10/15/10	754,572		752,983
CNH Wholesale Master Note Trust Series 2006-1A:
Class A, 0.515% 7/15/12 (e)(j)	166,061		163,514
Class B, 0.735% 7/15/12 (e)(j)	166,061		156,615
Countrywide Home Loan Trust Series 2006-13N Class N, 7% 8/25/37 (e)	41,917		4
Asset-Backed Securities - continued
	Principal Amount		Value
Countrywide Home Loans, Inc.:
Series 2002-6 Class AV1, 1.3338% 5/25/33 (j)	$ 6,578		$ 3,590
Series 2004-2 Class 3A4, 0.7238% 7/25/34 (j)	86,799		16,378
Series 2004-3:
Class 3A4, 0.7238% 8/25/34 (j)	364,848		195,263
Class M1, 0.9738% 6/25/34 (j)	83,959		55,248
Class M4, 1.4438% 4/25/34 (j)	20,283		9,610
Series 2004-4:
Class A, 0.8438% 8/25/34 (j)	54,391		25,710
Class M2, 1.0038% 6/25/34 (j)	74,616		49,383
Series 2005-1:
Class M1, 0.8938% 8/25/35 (j)	65,059		46,908
Class MV2, 0.9138% 7/25/35 (j)	179,453		125,164
Series 2005-3 Class MV1, 0.8938% 8/25/35 (j)	314,626		274,257
Series 2005-AB1 Class A2, 0.6838% 8/25/35 (j)	60,254		49,778
CPS Auto Receivables Trust:
Series 2004-D Class A2, 3.86% 12/15/11 (e)	19,350		17,657
Series 2007-C Class A3, 5.45% 5/15/12 (e)	934,994		822,795
Credit Suisse First Boston Mortgage Securities Corp. Series 2005-FIX1 Class A2, 4.31% 5/25/35	581,344		527,206
Discover Card Master Trust I:
Series 2006-1 Class B1, 0.605% 8/16/11 (j)	269,957		267,756
Series 2006-2 Class B1, 0.575% 1/17/12 (j)	369,058		330,751
Series 2007-1 Class B, 0.555% 8/15/12 (j)	369,058		288,372
Diversified REIT Trust Series 2000-1A:
Class A2, 6.971% 3/8/10 (e)	130,996		85,148
Class E, 6.971% 3/8/10 (e)	865,000		259,500
Fannie Mae subordinate REMIC pass-thru certificates Series 2004-T5:
Class AB1, 0.7453% 5/28/35 (j)	159,655		87,804
Class AB3, 0.8983% 5/28/35 (j)	67,441		35,206
Fieldstone Mortgage Investment Corp.:
Series 2004-3 Class M5, 2.6488% 8/25/34 (j)	36,914		9,181
Series 2006-2 Class M1, 0.7838% 7/25/36 (j)	1,430,000		32,461
Series 2006-3 Class 2A3, 0.6338% 11/25/36 (j)	571,298		161,035
First Franklin Mortgage Loan Trust:
Series 2004-FF2 Class M3, 1.2988% 3/25/34 (j)	2,881		1,517
Series 2006-FF12 Class A2, 0.5138% 9/25/36 (j)	61,941		56,722
Series 2006-FF5 Class 2A2, 0.5838% 4/25/36 (j)	296,266		270,666
First Investors Auto Owner Trust Series 2006-A Class A3, 4.93% 2/15/11 (e)	161,033		159,372
Ford Credit Auto Owner Trust:
Series 2006-B Class C, 5.68% 6/15/12	2,040,000		1,326,000
Asset-Backed Securities - continued
	Principal Amount		Value
Ford Credit Auto Owner Trust: - continued
Series 2006-C Class B, 5.3% 6/15/12	$ 750,000		$ 525,000
Series 2007-A:
Class B, 5.6% 10/15/12	490,000		343,000
Class C, 5.8% 2/15/13	775,000		485,717
Ford Credit Floorplan Master Owner Trust:
Series 2006-3 Class B, 0.905% 6/15/11 (j)	256,954		179,868
Series 2006-4 Class B, 1.005% 6/15/13 (j)	98,086		49,464
Fosse Master Issuer PLC Series 2007-1A Class C2, 1.6925% 10/18/54 (e)(j)	785,000		569,455
Franklin Auto Trust Series 2007-1:
Class A4, 5.03% 2/16/15	1,505,000		1,357,102
Class C, 5.43% 2/16/15	1,845,000		1,265,836
Fremont Home Loan Trust:
Series 2004-1:
Class M1, 1.1488% 2/25/34 (j)	102,727		29,276
Class M2, 1.2238% 2/25/34 (j)	165,638		105,934
Series 2004-A Class M1, 1.2988% 1/25/34 (j)	152,428		81,413
Series 2004-D:
Class M4, 1.4238% 11/25/34 (j)	104,293		17,167
Class M5, 1.4738% 11/25/34 (j)	66,415		5,092
Series 2005-A:
Class M1, 0.9038% 1/25/35 (j)	13,258		12,219
Class M2, 0.9338% 1/25/35 (j)	222,826		81,450
Class M3, 0.9638% 1/25/35 (j)	120,398		51,451
Class M4, 1.1538% 1/25/35 (j)	46,138		22,610
Series 2006-3 Class 2A1, 0.5438% 2/25/37 (j)	9,792		9,519
Series 2006-A:
Class M4, 0.8738% 5/25/36 (j)	114,804		1,573
Class M5, 0.9738% 5/25/36 (j)	61,495		763
GCO Education Loan Funding Master Trust II Series 2007-1A Class C1L, 1.6288% 9/25/30 (e)(j)	298,944		201,404
GCO Slims Trust Series 2006-1A, 5.72% 3/1/22 (e)	1,024,950		923,193
GE Business Loan Trust:
Series 2003-1 Class A, 0.8913% 4/15/31 (e)(j)	45,558		28,246
Series 2005-2 Class IO, 0.5242% 9/15/17 (e)(l)	62,751,242		170,263
GE Capital Credit Card Master Note Trust:
Series 2006-1:
Class B, 0.5713% 9/17/12 (j)	112,946		79,062
Class C, 0.7013% 9/17/12 (j)	87,826		57,087
Series 2007-1 Class C, 0.7313% 3/15/13 (j)	602,402		397,585
Series 2007-3 Class B, 5.49% 6/15/13	3,350,000		2,345,000
Asset-Backed Securities - continued
	Principal Amount		Value
Greenpoint Credit LLC Series 2001-1 Class 1A, 0.81% 4/20/32 (j)	$ 190,924		$ 187,568
GSAMP Trust:
Series 2002-HE Class M1, 2.345% 11/20/32 (j)	79,011		38,480
Series 2003-FM1 Class M1, 1.7% 3/20/33 (j)	152,045		92,125
Series 2003-HE2 Class M1, 1.1238% 8/25/33 (j)	253,099		180,670
Series 2004-AR1 Class M1, 1.1238% 6/25/34 (j)	278,359		105,813
Series 2004-FM1 Class M1, 1.4488% 11/25/33 (j)	51,733		27,684
Series 2004-FM2 Class M1, 1.2238% 1/25/34 (j)	133,071		76,587
Series 2004-HE1 Class M1, 1.0238% 5/25/34 (j)	72,885		23,659
Series 2007-HE1 Class M1, 0.7238% 3/25/47 (j)	115,495		5,509
GSR Mortgage Loan Trust:
Series 2004-OPT Class A1, 0.8138% 11/25/34 (j)	2,013		949
Series 2005-MTR1 Class A1, 0.6138% 10/25/35 (j)	359,053		331,735
Series 2006-FM1 Class M3, 0.8238% 4/25/36 (j)	54,734		695
Guggenheim Structured Real Estate Funding Ltd.:
Series 2005-1 Class C, 1.5538% 5/25/30 (e)(j)	1,028,238		462,707
Series 2006-3:
Class B, 0.8738% 9/25/46 (e)(j)	783,117		125,299
Class C, 1.0238% 9/25/46 (e)(j)	1,943,752		233,250
Helios Finance L.P. Series 2007-S1 Class B1, 1.17% 10/20/14 (e)(j)	447,098		228,020
Home Equity Asset Trust:
Series 2002-2 Class A4, 1.2338% 6/25/32 (j)	5,664		1,550
Series 2002-3 Class A5, 1.3538% 2/25/33 (j)	51		11
Series 2003-3:
Class A4, 1.3938% 2/25/33 (j)	493		130
Class M1, 1.7638% 8/25/33 (j)	126,927		57,877
Series 2003-4 Class M1, 1.6738% 10/25/33 (j)	37,583		16,644
Series 2003-5:
Class A2, 1.1738% 12/25/33 (j)	44,160		12,982
Class M1, 1.5238% 12/25/33 (j)	43,448		26,121
Series 2003-7 Class A2, 1.2338% 3/25/34 (j)	4,453		921
Series 2003-8 Class M1, 1.5538% 4/25/34 (j)	690,776		320,394
Series 2004-1 Class M2, 2.1738% 6/25/34 (j)	337,063		219,247
Series 2004-3 Class M2, 2.1738% 8/25/34 (j)	423,139		257,308
Series 2004-7 Class A3, 0.8638% 1/25/35 (j)	78		29
Series 2005-1 Class M1, 0.9038% 5/25/35 (j)	165,529		147,898
Series 2005-3 Class M1, 0.8838% 8/25/35 (j)	113,162		101,154
Series 2005-5 Class 2A2, 0.7238% 11/25/35 (j)	50,664		44,760
Series 2006-1 Class 2A3, 0.6988% 4/25/36 (j)	463,295		319,867
Series 2006-7 Class M4, 0.8538% 1/25/37 (j)	145,584		670
Series 2006-8 Class 2A1, 0.5238% 3/25/37 (j)	35,554		30,833
Asset-Backed Securities - continued
	Principal Amount		Value
Household Home Equity Loan Trust Series 2004-1 Class M, 0.8794% 9/20/33 (j)	$ 35,856		$ 21,808
HSBC Automotive Trust Series 2006-2 Class A4, 5.67% 6/17/13	3,500,000		3,357,784
HSBC Credit Card Master Note Trust I Series 2006-1 Class B, 0.6013% 6/15/12 (j)	285,530		253,599
HSBC Home Equity Loan Trust:
Series 2005-2:
Class M1, 0.8194% 1/20/35 (j)	293,400		155,216
Class M2, 0.8494% 1/20/35 (j)	220,060		107,851
Series 2005-3 Class A1, 0.6194% 1/20/35 (j)	1,242,824		664,968
Series 2006-2:
Class M1, 0.74% 3/20/36 (j)	80,841		42,279
Class M2, 0.76% 3/20/36 (j)	133,676		65,633
Series 2006-3 Class A1V, 0.55% 3/20/36 (j)	88,271		84,194
HSI Asset Securitization Corp. Trust Series 2007-HE1 Class 2A3, 0.6638% 1/25/37 (j)	157,118		47,160
Hyundai Auto Receivables Trust:
Series 2005-A:
Class B, 4.2% 2/15/12	412,569		399,805
Class C, 4.22% 2/15/12	31,307		31,252
Series 2006-B Class C, 5.25% 5/15/13	584,029		533,144
Series 2007-A Class A3A, 5.04% 1/17/12	1,949,281		1,951,599
JPMorgan Auto Receivables Trust Series 2006-A:
Class B, 5.36% 12/15/14 (e)	237,645		227,970
Class C, 5.61% 12/15/14 (e)	857,140		837,934
JPMorgan Mortgage Acquisition Trust Series 2007-CH1:
Class AV4, 0.6038% 11/25/36 (j)	157,766		67,051
Class MV1, 0.7038% 11/25/36 (j)	128,153		13,013
Keycorp Student Loan Trust:
Series 1999-A Class A2, 4.0988% 12/27/09 (j)	140,717		109,287
Series 2006-A Class 2A1, 1.4963% 9/27/21 (j)	95,573		93,045
Lancer Funding Ltd. Series 2006-1A Class A3, 3.1125% 4/6/46 (e)(j)	387,247		3,872
Long Beach Mortgage Loan Trust:
Series 2003-2 Class M1, 1.7038% 6/25/33 (j)	269,366		121,255
Series 2004-2:
Class M1, 1.0038% 6/25/34 (j)	78,883		41,629
Class M2, 1.5538% 6/25/34 (j)	56,076		42,745
Series 2005-WL1 Class M2, 1.0238% 6/25/35 (j)	1,090,000		613,723
Series 2006-9 Class M4, 0.8438% 11/25/36 (j)	46,063		88
Marriott Vacation Club Owner Trust:
Series 2005-2 Class A, 5.25% 10/20/27 (e)	558,839		455,434
Asset-Backed Securities - continued
	Principal Amount		Value
Marriott Vacation Club Owner Trust: - continued
Series 2006-1A:
Class B, 5.827% 4/20/28 (e)	$ 133,506		$ 102,092
Class C, 6.125% 4/20/28 (e)	133,506		96,248
MASTR Asset Backed Securities Trust:
Series 2006-AM3 Class M1, 0.7338% 10/25/36 (j)	57,024		2,076
Series 2006-NC2 Class M7, 1.2238% 9/25/36 (j)	26,819		8
Series 2007-HE1 Class M1, 0.7738% 5/25/37 (j)	99,598		4,173
Merna Reinsurance Ltd. Series 2007-1 Class B, 3.2088% 6/30/12 (e)(j)	1,620,000		1,482,786
Merrill Lynch Mortgage Investors Trust:
Series 2003-HE1 Class M1, 1.1738% 7/25/34 (j)	75,644		48,567
Series 2003-OPT1 Class M1, 1.1238% 7/25/34 (j)	843,220		587,196
Series 2006-FM1 Class A2B, 0.5838% 4/25/37 (j)	330,113		234,042
Series 2006-OPT1 Class A1A, 0.7338% 6/25/35 (j)	215,442		99,204
Morgan Stanley ABS Capital I Trust:
Series 2002-HE3 Class M1, 2.1238% 12/27/32 (j)	5,525		3,199
Series 2003-NC7 Class M1, 1.5238% 6/25/33 (j)	66,856		37,816
Series 2003-NC8 Class M1, 1.5238% 9/25/33 (j)	51,624		29,898
Series 2004-HE6 Class A2, 0.8138% 8/25/34 (j)	138,792		24,075
Series 2004-NC2 Class M1, 1.2988% 12/25/33 (j)	130,741		62,861
Series 2005-HE1 Class M2, 0.9438% 12/25/34 (j)	61,906		29,857
Series 2005-HE2 Class M1, 0.8738% 1/25/35 (j)	56,009		19,102
Series 2005-NC1 Class M1, 0.9138% 1/25/35 (j)	50,738		17,289
Series 2005-NC2 Class B1, 1.6438% 3/25/35 (j)	64,800		31,219
Series 2006-HE3 Class B1, 1.3738% 4/25/36 (j)	28,806		63
Series 2006-HE6 Class A2A, 0.5138% 9/25/36 (j)	515,607		487,216
Series 2006-NC4:
Class M4, 0.8238% 6/25/36 (j)	43,200		449
Class M6, 0.9238% 6/25/36 (j)	21,600		119
Series 2007-HE2 Class A2A, 0.5138% 1/25/37 (j)	14,364		11,593
Series 2007-HE4 Class A2A, 0.5838% 2/25/37 (j)	13,971		9,354
Series 2007-NC3 Class A2A, 0.5338% 5/25/37 (j)	7,589		6,039
Morgan Stanley Dean Witter Capital I Trust:
Series 2001-NC4 Class M1, 1.9738% 1/25/32 (j)	3,344		926
Series 2002-AM3 Class A3, 1.4538% 2/25/33 (j)	93,002		76,027
Series 2002-HE2 Class M1, 1.9738% 8/25/32 (j)	600,534		338,198
Series 2002-NC1 Class M1, 1.6738% 2/25/32 (e)(j)	522,624		299,997
Series 2002-NC3:
Class A3, 1.1538% 8/25/32 (j)	4,374		784
Class M1, 1.5538% 8/25/32 (j)	7,981		3,640
Series 2003-NC1 Class M1, 2.0488% 11/25/32 (j)	436,667		214,787
Asset-Backed Securities - continued
	Principal Amount		Value
Morgan Stanley Home Equity Loans Trust:
Series 2006-3 Class M5, 0.8838% 4/25/36 (j)	$ 43,200		$ 536
Series 2007-2 Class A1, 0.5738% 4/25/37 (j)	82,794		62,881
Morgan Stanley IXIS Real Estate Capital Trust Series 2006-2 Class A1, 0.5238% 11/25/36 (j)	85,242		78,501
National Collegiate Funding LLC Series 2004-GT1 Class IO1, 7.87% 6/25/10 (e)(j)(l)	1,725,000		155,250
National Collegiate Student Loan Trust:
Series 2004-2 Class AIO, 9.75% 10/25/14 (l)	1,790,750		336,607
Series 2005-2 Class AIO, 7.73% 3/25/12 (l)	1,265,000		91,346
Series 2005-GT1 Class AIO, 6.75% 12/25/09 (l)	900,000		50,907
Series 2006-1 Class AIO, 5.5% 4/25/11 (l)	1,410,000		98,700
Series 2006-2 Class AIO, 6% 8/25/11 (l)	700,000		70,000
Series 2006-3:
Class A1, 0.5038% 9/25/19 (j)	159,534		149,811
Class AIO, 7.1% 1/25/12 (l)	5,140,000		750,594
Series 2006-4:
Class A1, 0.5038% 3/25/25 (j)	129,978		115,962
Class AIO, 6.35% 2/27/12 (l)	880,000		119,310
Navistar Financial Corp. Owner Trust Series 2005-A Class A4, 4.43% 1/15/14	1,012,508		978,686
New Century Home Equity Loan Trust:
Series 2003-6 Class M1, 1.5538% 1/25/34 (j)	148,365		82,938
Series 2005-4 Class M2, 0.9838% 9/25/35 (j)	181,094		26,967
Series 2005-D Class M2, 0.9438% 2/25/36 (j)	37,735		2,551
Newcastle CDO VIII Series 2006-8A Class 4, 0.9894% 11/1/52 (e)(j)	1,000,000		120,000
Nomura Home Equity Loan Trust:
Series 2006-AF1 Class A1, 6.032% 10/25/36	193,051		168,256
Series 2006-FM2 Class M7, 1.2738% 7/25/36 (j)	123,336		703
Series 2006-HE2 Class A2, 0.5938% 3/25/36 (j)	105,616		95,592
Northstar Education Finance, Inc., Delaware Series 2005-1 Class A5, 1.9338% 10/30/45 (j)	1,560,078		1,224,661
Ocala Funding LLC:
Series 2005-1A Class A, 1.97% 3/20/10 (e)(j)	71,885		25,160
Series 2006-1A Class A, 1.87% 3/20/11 (e)(j)	149,278		59,711
Option One Mortgage Loan Trust Series 2004-3 Class M3, 1.1238% 11/25/34 (j)	43,654		27,466
Park Place Securities, Inc.:
Series 2004-WCW1:
Class M2, 1.1538% 9/25/34 (j)	415,338		238,318
Class M3, 1.7238% 9/25/34 (j)	797,630		178,715
Class M4, 1.9238% 9/25/34 (j)	1,086,724		114,967
Asset-Backed Securities - continued
	Principal Amount		Value
Park Place Securities, Inc.: - continued
Series 2004-WCW2 Class M3, 1.0238% 7/25/35 (j)	$ 50,846		$ 8,435
Series 2004-WHQ2:
Class A3E, 0.8938% 2/25/35 (j)	176,824		137,232
Class M1, 1.0638% 2/25/35 (j)	147,614		107,979
Series 2004-WWF1:
Class M2, 1.1538% 2/25/35 (j)	204,098		119,815
Class M3, 1.2138% 2/25/35 (j)	25,294		10,185
Class M4, 1.5738% 1/25/35 (j)	1,905,000		275,135
Series 2005-WCH1:
Class M2, 0.9938% 1/25/35 (j)	97,891		55,929
Class M3, 1.0338% 1/25/35 (j)	60,718		23,994
Class M4, 1.3038% 1/25/35 (j)	187,294		28,880
Series 2005-WHQ2:
Class M7, 1.7238% 5/25/35 (j)	913,983		35,751
Class M9, 2.3538% 5/25/35 (j)	75,060		2,164
People's Choice Financial Realty Mortgage Securities Trust Series 2006-1:
Class M4, 0.8338% 9/25/36 (j)	216,432		1,342
Class M5, 0.8638% 9/25/36 (j)	107,892		475
Providian Master Note Trust Series 2006-C1A Class C1, 1.005% 3/16/15 (e)(j)	461,052		198,252
Rental Car Finance Corp. Series 2005-1A Class A2, 4.59% 6/25/11 (e)	1,420,000		852,000
Residential Asset Mortgage Products, Inc. Series 2003-RZ2 Class A1, 3.6% 4/25/33	198,181		178,270
Salomon Brothers Mortgage Securities VII, Inc. Series 2003-HE1 Class A, 1.2738% 4/25/33 (j)	648		117
Santander Drive Auto Receivables Trust Series 2007-1 Class A3, 5.05% 9/15/11	1,083,423		1,060,248
Saxon Asset Securities Trust Series 2004-1 Class M1, 1.2688% 3/25/35 (j)	239,868		114,070
Sierra Receivables Funding Co. Series 2007-1A Class A2, 0.92% 3/20/19 (e)(j)	136,297		102,237
Sierra Timeshare Receivables Fund LLC Series 2006-1A Class A1, 5.84% 5/20/18 (e)	560,122		414,490
SLM Private Credit Student Loan Trust:
Series 2004 B Class A2, 2.1963% 6/15/21 (j)	1,800,000		1,151,271
Series 2004-A:
Class B, 2.5763% 6/15/33 (j)	400,000		196,125
Class C, 2.9463% 6/15/33 (j)	1,181,482		531,667
Series 2004-B Class C, 2.8663% 9/15/33 (j)	1,900,000		475,000
Asset-Backed Securities - continued
	Principal Amount		Value
Sovereign Dealer Floor Plan Master LLC Series 2006-1:
Class B, 0.635% 8/15/11 (e)(j)	$ 219,499		$ 186,574
Class C, 0.835% 8/15/11 (e)(j)	100,094		75,071
Specialty Underwriting & Residential Finance Trust Series 2003-BC3 Class M2, 2.0738% 8/25/34 (j)	29,737		19,327
Structured Asset Investment Loan Trust Series 2004-8 Class M5, 1.6238% 9/25/34 (j)	11,579		4,659
Structured Asset Securities Corp.:
Series 2004-GEL1 Class A, 0.8338% 2/25/34 (j)	17,421		7,698
Series 2006-BC3 Class M7, 1.2738% 10/25/36 (j)	373		0
Series 2007-GEL1 Class A2, 0.6638% 1/25/37 (e)(j)	166,061		48,258
Superior Wholesale Inventory Financing Trust:
Series 2004-A10:
Class A, 0.5613% 9/15/11 (j)	667,440		537,289
Class B, 0.7413% 9/15/11 (j)	499,154		199,662
Series 2007-AE1:
Class A, 0.555% 1/15/12 (j)	124,178		86,925
Class B, 0.755% 1/15/12 (j)	108,043		43,217
Class C, 1.055% 1/15/12 (j)	134,266		40,280
Superior Wholesale Inventory Financing Trust VII Series 2003-A8 Class CTFS, 0.9113% 3/15/11 (e)(j)	2,520,000		2,268,000
Swift Master Auto Receivables Trust:
Series 2007-1 Class A, 0.555% 6/15/12 (j)	364,716		262,596
Series 2007-2 Class A, 1.105% 10/15/12 (j)	1,515,000		984,750
Terwin Mortgage Trust:
Series 2003-4HE Class A1, 0.9038% 9/25/34 (j)	86,903		17,967
Series 2003-6HE Class A1, 0.9438% 11/25/33 (j)	4,628		1,555
Turquoise Card Backed Securities PLC:
Series 2006-1A Class C, 0.785% 5/16/11 (e)(j)	359,186		341,564
Series 2006-2:
Class B, 0.605% 10/17/11 (j)	434,657		380,325
Class C, 0.805% 10/17/11 (j)	408,370		330,064
Series 2007-1 Class C, 0.8313% 6/15/12 (j)	465,653		299,652
Wachovia Auto Loan Owner Trust:
Series 2006-1 Class D, 5.42% 4/21/14 (e)	3,615,000		2,770,545
Series 2006-2A:
Class A3, 5.23% 8/22/11 (e)	1,555,545		1,548,190
Class D, 5.54% 12/20/12 (e)	2,245,000		1,144,950
Series 2007-1 Class D, 5.65% 2/20/13	2,640,000		1,135,200
WaMu Asset Holdings Corp. Series 2006-8 Class N1, 6.048% 10/25/46 (e)	112,639		11
Asset-Backed Securities - continued
	Principal Amount		Value
WaMu Asset-Backed Certificates Series 2006-HE3:
Class M4, 0.8538% 10/25/36 (j)	$ 76,507		$ 1,385
Class M7, 1.2738% 10/25/36 (j)	55,382		620
WaMu Master Note Trust:
Series 2006-A3A Class A3, 0.485% 9/16/13 (e)(j)	697,226		664,050
Series 2006-C2A Class C2, 0.955% 8/15/15 (e)(j)	888,516		386,043
Series 2006-C3A Class C3A, 0.835% 10/15/13 (e)(j)	621,864		501,834
Series 2007-A4A Class A4, 5.2% 10/15/14 (e)	1,500,000		1,342,500
Series 2007-C1 Class C1, 0.855% 5/15/14 (e)(j)	541,145		318,399
Wells Fargo Home Equity Trust Series 2004-3 Class A, 4.5% 11/27/34 (e)(o)	961		0
WFS Financial Owner Trust:
Series 2005-1 Class C, 3.82% 8/17/12	2,294		2,285
Series 2005-3 Class C, 4.54% 5/17/13	850,000		779,401
Whinstone Capital Management Ltd. Series 1A Class B3, 2.0594% 10/25/44 (e)(j)	1,390,735		166,888
TOTAL ASSET-BACKED SECURITIES (Cost $151,963,373)		110,217,951
Collateralized Mortgage Obligations - 5.2%
Private Sponsor - 2.5%
Arkle Master Issuer PLC floater:
Series 2006-1A Class 3C, 1.6275% 2/17/52 (e)(j)	84,974		63,731
Series 2006-2A:
Class 2B, 1.3575% 2/17/52 (e)(j)	299,030		279,100
Class 2M, 1.4375% 2/17/52 (e)(j)	203,364		182,718
Arran Residential Mortgages Funding No. 1 PLC floater Series 2006-1A Class DB, 1.7838% 4/12/56 (e)(j)	190,861		81,019
Banc of America Mortgage Securities, Inc.:
Series 2003-K Class 1A1, 5.2035% 12/25/33 (j)	8,570		6,960
Series 2004-A Class 2A2, 5.1951% 2/25/34 (j)	1,229,916		1,002,594
Series 2004-B Class 1A1, 6.433% 3/25/34 (j)	9,537		7,263
Series 2004-C Class 1A1, 5.971% 4/25/34 (j)	16,909		13,326
Series 2004-J Class 2A1, 4.7597% 11/25/34 (j)	618,612		481,434
Series 2005-H:
Class 1A1, 5.3329% 9/25/35 (j)	164,844		118,727
Class 2A2, 4.8028% 9/25/35 (j)	228,855		73,786
Bear Stearns Alt-A Trust floater:
Series 2005-1 Class A1, 0.7538% 1/25/35 (j)	639,165		315,683
Series 2005-2 Class 1A1, 0.7238% 3/25/35 (j)	645,756		358,310
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Bear Stearns Alt-A Trust floater: - continued
Series 2005-5 Class 1A1, 0.6938% 7/25/35 (j)	$ 590,928		$ 299,381
Countrywide Alternative Loan Trust planned amortization class Series 2003-5T2 Class A2, 0.8738% 5/25/33 (j)	13,078		12,447
Credit Suisse First Boston Adjustable Rate Mortgage Trust floater:
Series 2004-1 Class 9A2, 0.8738% 1/25/34 (j)	79,377		39,525
Series 2004-2 Class 7A3, 0.8738% 2/25/35 (j)	216,307		101,378
Series 2004-4 Class 5A2, 0.8738% 3/25/35 (j)	49,732		20,810
Series 2005-1 Class 5A2, 0.8038% 5/25/35 (j)	58,844		28,020
Series 2005-10:
Class 5A1, 0.7338% 1/25/36 (j)	93,364		44,600
Class 5A2, 0.7938% 1/25/36 (j)	42,012		16,844
Series 2005-2:
Class 6A2, 0.7538% 6/25/35 (j)	14,649		6,497
Class 6M2, 0.9538% 6/25/35 (j)	187,207		45,729
Series 2005-3 Class 8A2, 0.7138% 7/25/35 (j)	69,517		35,288
Series 2005-4 Class 7A2, 0.7038% 8/25/35 (j)	22,034		10,866
Series 2005-8 Class 7A2, 0.7538% 11/25/35 (j)	54,855		31,017
Credit Suisse First Boston Mortgage Securities Corp. floater:
Series 2004-AR4 Class 5A2, 1.2138% 5/25/34 (j)	24,845		14,491
Series 2004-AR5 Class 11A2, 1.2138% 6/25/34 (j)	44,243		22,853
Series 2004-AR6 Class 9A2, 1.2138% 10/25/34 (j)	20,058		10,049
Series 2004-AR7 Class 6A2, 1.2338% 8/25/34 (j)	6,049		2,757
Series 2004-AR8 Class 8A2, 0.8538% 9/25/34 (j)	50,794		30,262
Deutsche Alt-A Securities Mortgage Loan Trust floater Series 2007-BAR1 Class A3, 0.6338% 3/25/37 (j)	435,931		226,481
DSLA Mortgage Loan Trust Series 2006-AR2 Class 2AB1, 0.5563% 9/19/36 (j)	90,142		73,356
First Horizon Mortgage pass-thru Trust floater Series 2004-FL1 Class 2A1, 2.15% 12/25/34 (j)	7,245		4,578
Fosse Master Issuer PLC floater Series 2006-1A:
Class B2, 1.3025% 10/18/54 (e)(j)	362,772		278,319
Class C2, 1.6125% 10/18/54 (e)(j)	121,608		60,804
Class M2, 1.3925% 10/18/54 (e)(j)	208,505		134,736
Gracechurch Mortgage Financing PLC floater Series 2006-1 Class D2, 1.7213% 11/20/56 (e)(j)	311,213		145,504
Gracechurch Mortgage Funding PLC floater Series 1A Class DB, 1.8238% 10/11/41 (e)(j)	395,258		171,170
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Granite Master Issuer PLC floater:
Series 2006-1A Class C2, 1.07% 12/20/54 (e)(j)	$ 762,826		$ 53,398
Series 2006-2 Class C1, 0.94% 12/20/54 (j)	3,254,342		325,434
Series 2006-3 Class C2, 0.97% 12/20/54 (j)	142,646		8,787
Series 2006-4:
Class B1, 0.56% 12/20/54 (j)	381,607		76,321
Class C1, 0.85% 12/20/54 (j)	233,345		16,334
Class M1, 0.64% 12/20/54 (j)	100,462		15,069
Series 2007-1:
Class 1C1, 0.77% 12/20/54 (j)	235,742		23,574
Class 1M1, 0.62% 12/20/54 (j)	153,360		23,004
Class 2C1, 0.9% 12/20/54 (j)	107,590		10,759
Class 2M1, 0.72% 12/20/54 (j)	196,906		31,505
Series 2007-2 Class 2C1, 0.8913% 12/17/54 (j)	272,830		27,283
Granite Mortgages PLC floater Series 2003-3 Class 1C, 2.5925% 1/20/44 (j)	54,631		13,658
GSR Mortgage Loan Trust Series 2007-AR2 Class 2A1, 4.8324% 4/25/35 (j)	635,947		437,346
Harborview Mortgage Loan Trust floater Series 2005-2 Class 2A1A, 0.6863% 5/19/35 (j)	54,045		24,223
Holmes Master Issuer PLC floater Series 2006-1A Class 2C, 1.4844% 7/15/40 (e)(j)	77,306		54,114
Home Equity Loan Trust floater Series 2007-FRE1 Class 2AV1, 0.6038% 4/25/37 (j)	248,213		141,405
Homestar Mortgage Acceptance Corp. floater Series 2004-5 Class A1, 0.9238% 10/25/34 (j)	567,759		322,377
Impac CMB Trust floater:
Series 2004-11 Class 2A2, 1.2138% 3/25/35 (j)	33,289		19,684
Series 2004-9:
Class M2, 1.4488% 1/25/35 (j)	136,983		61,107
Class M3, 1.5238% 1/25/35 (j)	101,544		41,981
Class M4, 2.0488% 1/25/35 (j)	51,794		19,738
Series 2005-1:
Class M4, 1.2238% 4/25/35 (j)	3,938		655
Class M5, 1.2438% 4/25/35 (j)	3,938		482
Class M6, 1.2938% 4/25/35 (j)	6,299		903
Series 2005-3 Class A1, 0.7138% 8/25/35 (j)	78,827		40,016
Series 2005-4 Class 1B1, 1.6894% 5/25/35 (j)	24,609		842
Series 2005-6 Class 1M3, 1.0838% 10/25/35 (j)	21,338		1,687
Lehman Structured Securities Corp. floater Series 2005-1 Class A2, 0.8669% 9/26/45 (e)(j)	375,827		191,985
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
MASTR Adjustable Rate Mortgages Trust:
floater Series 2005-1 Class 1A1, 0.7438% 3/25/35 (j)	$ 89,860		$ 55,661
Series 2007-3 Class 22A2, 0.6838% 5/25/47 (j)	181,030		87,467
MASTR Alternative Loan Trust Series 2004-3 Class 3A1, 6% 4/25/34	187,563		136,311
Merrill Lynch Alternative Note Asset Trust floater Series 2007-OAR1 Class A1, 0.6438% 2/25/37 (j)	227,862		95,702
Merrill Lynch Floating Trust floater Series 2006-1:
Class B, 0.625% 6/15/22 (e)(j)	26,395		14,517
Class C, 0.645% 6/15/22 (e)(j)	161,633		80,817
Class D, 0.655% 6/15/22 (e)(j)	62,186		27,984
Class E, 0.665% 6/15/22 (e)(j)	99,468		39,787
Class F, 0.695% 6/15/22 (e)(j)	179,345		62,771
Class G, 0.765% 6/15/22 (e)(j)	37,282		11,185
Class H, 0.785% 6/15/22 (e)(j)	74,650		18,663
Class J, 0.825% 6/15/22 (e)(j)	87,091		17,418
Merrill Lynch Mortgage Investors Trust floater:
Series 2003-A Class 2A1, 0.8638% 3/25/28 (j)	407,950		237,286
Series 2003-B Class A1, 0.8138% 4/25/28 (j)	30,030		17,520
Series 2003-D Class A, 0.7838% 8/25/28 (j)	25,475		16,336
Series 2003-E Class A2, 2.0813% 10/25/28 (j)	42,485		25,351
Series 2003-F Class A2, 3.805% 10/25/28 (j)	440,967		264,170
Series 2004-A Class A2, 3.715% 4/25/29 (j)	39,235		24,285
Series 2004-B Class A2, 2.8388% 6/25/29 (j)	487,779		288,530
Series 2004-C Class A2, 2.15% 7/25/29 (j)	412,534		244,858
Series 2004-D Class A2, 3.4625% 9/25/29 (j)	398,410		235,859
Series 2004-E:
Class A2B, 3.825% 11/25/29 (j)	69,670		44,495
Class A2D, 4.015% 11/25/29 (j)	10,104		5,920
Series 2004-G Class A2, 3.48% 11/25/29 (j)	33,682		20,318
Series 2005-A Class A2, 3.3525% 2/25/30 (j)	32,557		19,590
Series 2005-B Class A2, 2.7988% 7/25/30 (j)	99,478		62,003
Series 2006-MLN1 Class M4, 0.8338% 7/25/37 (j)	206,820		972
MortgageIT Trust floater:
Series 2004-2:
Class A1, 0.8438% 12/25/34 (j)	508,130		331,036
Class A2, 0.9238% 12/25/34 (j)	686,948		477,477
Series 2005-2 Class 1A1, 0.7338% 5/25/35 (j)	40,922		27,051
Opteum Mortgage Acceptance Corp. floater Series 2005-3 Class APT, 0.7638% 7/25/35 (j)	413,322		202,231
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Option One Mortgage Loan Trust floater Series 2007-CP1 Class M1, 0.7738% 3/25/37 (j)	$ 310,176		$ 14,609
Permanent Financing No. 4 PLC Class 3C, 2.9894% 6/10/42 (j)	1,215,000		1,211,282
Permanent Financing No. 5 PLC floater Series 3 Class C, 2.9894% 6/10/42 (j)	1,935,000		1,451,250
Permanent Financing No. 8 PLC floater Class 3C, 2.7094% 6/10/42 (j)	260,453		176,393
Permanent Master Issuer PLC floater Series 2006-1 Class 2C, 1.4944% 7/17/42 (j)	66,269		49,039
Provident Funding Mortgage Loan Trust Series 2005-2 Class 3A, 4.5836% 10/25/35 (j)	881,632		702,891
RESI Finance LP/RESI Finance DE Corp. floater:
Series 2003-B Class B5, 2.7988% 7/10/35 (e)(j)	173,107		84,216
Series 2003-CB1 Class B3, 1.8988% 6/10/35 (e)(j)	133,474		71,409
Series 2004-A:
Class B4, 1.6488% 2/10/36 (e)(j)	101,746		35,245
Class B5, 2.1488% 2/10/36 (e)(j)	67,823		21,751
Series 2004-B:
Class B4, 1.5488% 2/10/36 (e)(j)	44,131		12,158
Class B5, 1.9988% 2/10/36 (e)(j)	34,176		8,479
Class B6, 2.4488% 2/10/36 (e)(j)	11,922		2,452
Series 2004-C:
Class B4, 1.3988% 9/10/36 (e)(j)	56,734		16,640
Class B5, 1.7988% 9/10/36 (e)(j)	63,618		17,069
Class B6, 2.1988% 9/10/36 (e)(j)	14,088		3,087
Residential Accredit Loans, Inc. floater Series 2006-QO7 Class 3A1, 0.5738% 9/25/46 (j)	219,268		169,038
Residential Asset Mortgage Products, Inc.:
sequential payer Series 2003-SL1 Class A31, 7.125% 4/25/31	416,873		368,272
Series 2005-AR5 Class 1A1, 5.3771% 9/19/35 (j)	371,037		272,129
Residential Funding Securities Corp. floater Series 2003-RP2 Class A1, 0.9238% 6/25/33 (e)(j)	34,805		26,109
ResMAE Mortgage Loan Trust floater Series 2006-1 Class A2A, 0.5738% 2/25/36 (e)(j)	7,880		7,679
Salomon Brothers Mortgage Securities VII, Inc. Series 2003-UP1 Class A, 3.45% 4/25/32 (e)	236,970		180,208
SBA CMBS Trust Series 2005-1A:
Class D, 6.219% 11/15/35 (e)	1,370,000		1,191,900
Class E, 6.706% 11/15/35 (e)	365,000		308,425
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Sequoia Mortgage Trust floater:
Series 2003-5 Class A2, 3.7963% 9/20/33 (j)	$ 197,380		$ 120,307
Series 2004-1 Class A, 1.8888% 2/20/34 (j)	20,363		13,041
Series 2004-10 Class A4, 4.5188% 11/20/34 (j)	29,480		18,236
Series 2004-12 Class 1A2, 2.1538% 1/20/35 (j)	88,915		54,655
Series 2004-3 Class A, 3.885% 5/20/34 (j)	343,503		209,819
Series 2004-4 Class A, 4.4388% 5/20/34 (j)	381,442		237,368
Series 2004-5 Class A3, 2.9113% 6/20/34 (j)	357,105		218,391
Series 2004-6:
Class A3A, 2.1613% 6/20/35 (j)	250,422		160,609
Class A3B, 2.3038% 7/20/34 (j)	6,131		3,768
Series 2004-7:
Class A3A, 1.9138% 8/20/34 (j)	299,672		179,514
Class A3B, 2.1388% 7/20/34 (j)	3,987		2,338
Series 2004-8 Class A2, 2.15% 9/20/34 (j)	473,511		306,703
Series 2005-1 Class A2, 1.8388% 2/20/35 (j)	384,730		238,313
Series 2005-2 Class A2, 2.03% 3/20/35 (j)	67,309		40,470
Series 2005-3 Class A1, 0.67% 5/20/35 (j)	32,692		17,561
Soundview Home Equity Loan Trust floater Series 2006-EQ1 Class M7, 1.2738% 9/25/36 (j)	66,744		874
Structured Adjustable Rate Mortgage Loan Trust floater Series 2005-10 Class A1, 0.6738% 6/25/35 (j)	194,396		132,164
Structured Asset Securities Corp. floater Series 2004-NP1 Class A, 0.8738% 9/25/33 (e)(j)	153,393		65,012
TBW Mortgage-Backed pass-thru certificates floater Series 2006-4 Class A3, 0.5894% 9/25/36 (j)	415,454		211,807
Wachovia Bank Commercial Mortgage Trust Series 2004-C14 Class PP, 5.3117% 8/15/41 (e)(j)	1,510,922		945,323
WaMu Mortgage pass-thru certificates:
floater:
Series 2006-AR11 Class C1B1, 0.5538% 9/25/46 (j)	19,239		18,413
Series 2006-AR7 Class C1B1, 0.5338% 7/25/46 (j)	7,798		7,537
sequential payer Series 2004-RA2 Class 2A, 7% 7/25/33	157,101		140,816
Series 2003-AR10 Class A7, 4.669% 10/25/33 (j)	831,968		522,359
Series 2004-AR7 Class A6, 3.9389% 7/25/34 (j)	335,000		331,734
Wells Fargo Mortgage Backed Securities Trust:
Series 2004-EE Class 2A2, 4.1875% 12/25/34 (j)	978,050		779,146
Series 2004-V Class 1A2, 4.0139% 10/25/34 (j)	637,825		509,623
Series 2005-AR12 Class 2A6, 4.313% 7/25/35 (j)	154,498		118,038
Series 2005-AR2 Class 2A2, 4.57% 3/25/35	3,296,755		2,536,456
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Wells Fargo Mortgage Backed Securities Trust: - continued
Series 2005-AR3 Class 2A1, 4.4106% 3/25/35 (j)	$ 268,646		$ 206,772
Series 2005-AR4 Class 2A2, 4.5395% 4/25/35 (j)	5,557,204		4,435,241
TOTAL PRIVATE SPONSOR			29,213,793
U.S. Government Agency - 2.7%
Fannie Mae planned amortization class:
Series 1993-187 Class L, 6.5% 7/25/23	581,436		596,029
Series 2006-64 Class PA, 5.5% 2/25/30	3,508,997		3,611,571
Fannie Mae subordinate REMIC pass-thru certificates:
planned amortization class:
Series 2006-49 Class CA, 6% 2/25/31	4,523,005		4,657,798
Series 2006-54 Class PE, 6% 2/25/33	1,564,928		1,620,160
sequential payer:
Series 2001-40 Class Z, 6% 8/25/31	1,005,419		1,045,501
Series 2003-76 Class BA, 4.5% 3/25/18	2,444,298		2,503,236
Series 2004-3 Class BA, 4% 7/25/17	99,484		101,088
Freddie Mac sequential payer Series 2114 Class ZM, 6% 1/15/29	449,179		468,241
Freddie Mac Multi-class participation certificates guaranteed:
planned amortization class:
Series 2535 Class PC, 6% 9/15/32	1,452,303		1,502,075
Series 2690 Class PD, 5% 2/15/27	2,520,246		2,583,452
Series 2755 Class LC, 4% 6/15/27	2,225,000		2,264,338
Series 2901 Class UM, 4.5% 1/15/30	3,330,396		3,392,800
sequential payer:
Series 2609 Class UJ, 6% 2/15/17	892,859		937,398
Series 2635 Class DG, 4.5% 1/15/18	2,800,884		2,871,925
Series 2780 Class A, 4% 12/15/14	2,349,898		2,367,086
Series 2786 Class GA, 4% 8/15/17	1,167,282		1,187,723
Series 2970 Class YA, 5% 9/15/18	914,961		942,792
Ginnie Mae guaranteed REMIC pass-thru securities planned amortization class Series 2002-5 Class PD, 6.5% 5/16/31	41,603		41,690
TOTAL U.S. GOVERNMENT AGENCY			32,694,903
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $71,889,069)		61,908,696
Commercial Mortgage Securities - 4.6%
	Principal Amount		Value
280 Park Avenue Trust floater Series 2001-280 Class X1, 0.9867% 2/3/11 (e)(j)(l)	$ 14,540,912		$ 277,268
Asset Securitization Corp. Series 1997-D5 Class PS1, 1.5863% 2/14/43 (j)(l)	3,999,036		141,666
Banc of America Commercial Mortgage Trust:
sequential payer:
Series 2006-5 Class A1, 5.185% 7/10/11	546,001		532,039
Series 2007-3 Class A1, 5.6583% 6/10/49 (j)	1,320,655		1,052,319
Series 2006-6 Class XP, 0.4316% 10/10/45 (j)(l)	32,421,228		469,748
Banc of America Commercial Mortgage, Inc.:
Series 2002-2 Class XP, 1.794% 7/11/43 (e)(j)(l)	5,286,301		81,640
Series 2004-6 Class XP, 0.4529% 12/10/42 (j)(l)	10,395,529		111,952
Series 2005-4 Class XP, 0.1697% 7/10/45 (j)(l)	15,414,356		86,821
Banc of America Large Loan, Inc. floater:
Series 2005-MIB1:
Class F, 0.9313% 3/15/22 (e)(j)	78,149		35,167
Class G, 0.9913% 3/15/22 (e)(j)	50,652		19,248
Series 2006-BIX1:
Class F, 0.765% 10/15/19 (e)(j)	201,139		90,513
Class G, 0.785% 10/15/19 (e)(j)	137,009		47,953
Bayview Commercial Asset Trust:
floater:
Series 2003-2 Class M1, 1.3238% 12/25/33 (e)(j)	13,378		7,692
Series 2004-1:
Class A, 0.8338% 4/25/34 (e)(j)	629,225		471,919
Class B, 2.3738% 4/25/34 (e)(j)	76,229		28,586
Class M1, 1.0338% 4/25/34 (e)(j)	44,138		27,586
Class M2, 1.6738% 4/25/34 (e)(j)	42,573		22,351
Series 2004-2:
Class A, 0.9038% 8/25/34 (e)(j)	517,588		414,071
Class M1, 1.0538% 8/25/34 (e)(j)	184,465		115,291
Series 2004-3:
Class A1, 0.8438% 1/25/35 (e)(j)	852,376		617,972
Class A2, 0.8938% 1/25/35 (e)(j)	129,922		90,945
Class M1, 0.9738% 1/25/35 (e)(j)	45,997		29,898
Class M2, 1.4738% 1/25/35 (e)(j)	29,764		16,370
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust: - continued
floater:
Series 2005-2A:
Class A1, 0.7838% 8/25/35 (e)(j)	$ 194,650		$ 136,255
Class M1, 0.9038% 8/25/35 (e)(j)	14,442		5,777
Class M2, 0.9538% 8/25/35 (e)(j)	23,821		9,528
Class M3, 0.9738% 8/25/35 (e)(j)	13,179		4,613
Class M4, 1.0838% 8/25/35 (e)(j)	12,098		3,629
Series 2005-3A:
Class A1, 0.7938% 11/25/35 (e)(j)	106,095		68,962
Class A2, 0.8738% 11/25/35 (e)(j)	68,783		44,709
Class M1, 0.9138% 11/25/35 (e)(j)	12,548		4,768
Class M2, 0.9638% 11/25/35 (e)(j)	15,932		6,054
Class M3, 0.9838% 11/25/35 (e)(j)	14,258		4,990
Class M4, 1.0738% 11/25/35 (e)(j)	17,764		6,218
Series 2005-4A:
Class A2, 0.8638% 1/25/36 (e)(j)	1,246,111		716,514
Class B1, 1.8738% 1/25/36 (e)(j)	83,848		29,347
Class M1, 0.9238% 1/25/36 (e)(j)	391,924		225,356
Class M2, 0.9438% 1/25/36 (e)(j)	148,723		81,798
Class M3, 0.9738% 1/25/36 (e)(j)	159,837		79,919
Class M4, 1.0838% 1/25/36 (e)(j)	81,789		38,850
Class M5, 1.1238% 1/25/36 (e)(j)	81,789		36,805
Class M6, 1.1738% 1/25/36 (e)(j)	83,000		34,860
Series 2006-1:
Class A2, 0.8338% 4/25/36 (e)(j)	38,804		25,533
Class M1, 0.8538% 4/25/36 (e)(j)	13,879		6,939
Class M2, 0.8738% 4/25/36 (e)(j)	14,664		6,599
Class M3, 0.8938% 4/25/36 (e)(j)	12,617		5,299
Class M4, 0.9938% 4/25/36 (e)(j)	7,150		3,879
Class M5, 1.0338% 4/25/36 (e)(j)	6,939		2,637
Class M6, 1.1138% 4/25/36 (e)(j)	13,836		7,167
Series 2006-2A:
Class A1, 0.7038% 7/25/36 (e)(j)	380,800		304,640
Class A2, 0.7538% 7/25/36 (e)(j)	34,379		27,503
Class B1, 1.3438% 7/25/36 (e)(j)	12,872		2,574
Class B3, 3.1738% 7/25/36 (e)(j)	19,447		3,889
Class M1, 0.7838% 7/25/36 (e)(j)	36,070		18,035
Class M2, 0.8038% 7/25/36 (e)(j)	25,449		12,216
Class M3, 0.8238% 7/25/36 (e)(j)	21,110		9,499
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust: - continued
floater:
Series 2006-2A:
Class M4, 0.8938% 7/25/36 (e)(j)	$ 14,254		$ 5,702
Class M5, 0.9438% 7/25/36 (e)(j)	17,521		6,132
Class M6, 1.0138% 7/25/36 (e)(j)	26,141		9,149
Series 2006-3A:
Class B1, 1.2738% 10/25/36 (e)(j)	22,294		6,889
Class B2, 1.8238% 10/25/36 (e)(j)	16,080		4,726
Class B3, 3.0738% 10/25/36 (e)(j)	26,167		5,809
Class M4, 0.9038% 10/25/36 (e)(j)	24,639		10,730
Class M5, 0.9538% 10/25/36 (e)(j)	29,497		11,799
Class M6, 1.0338% 10/25/36 (e)(j)	57,737		21,651
Series 2006-4A:
Class A1, 0.7038% 12/25/36 (e)(j)	106,293		72,301
Class A2, 0.7438% 12/25/36 (e)(j)	479,050		332,365
Class B1, 1.1738% 12/25/36 (e)(j)	16,723		3,345
Class B2, 1.7238% 12/25/36 (e)(j)	17,305		7,971
Class B3, 2.9238% 12/25/36 (e)(j)	29,078		12,797
Class M1, 0.7638% 12/25/36 (e)(j)	34,610		22,220
Class M2, 0.7838% 12/25/36 (e)(j)	23,278		14,665
Class M3, 0.8138% 12/25/36 (e)(j)	23,578		9,903
Class M4, 0.8738% 12/25/36 (e)(j)	28,254		11,302
Class M5, 0.9138% 12/25/36 (e)(j)	25,907		10,363
Class M6, 0.9938% 12/25/36 (e)(j)	23,278		12,938
Series 2007-1:
Class A2, 0.7438% 3/25/37 (e)(j)	518,227		297,980
Class B1, 1.1438% 3/25/37 (e)(j)	165,463		57,912
Class B2, 1.6238% 3/25/37 (e)(j)	121,310		38,516
Class B3, 3.8238% 3/25/37 (e)(j)	337,458		98,707
Class M1, 0.7438% 3/25/37 (e)(j)	141,705		76,875
Class M2, 0.7638% 3/25/37 (e)(j)	107,283		55,519
Class M3, 0.7938% 3/25/37 (e)(j)	93,171		46,585
Class M4, 0.8438% 3/25/37 (e)(j)	70,278		33,734
Class M5, 0.8938% 3/25/37 (e)(j)	117,482		52,867
Class M6, 0.9738% 3/25/37 (e)(j)	162,014		64,806
Series 2007-2A:
Class A1, 0.7438% 7/25/37 (e)(j)	79,839		48,303
Class A2, 0.7938% 7/25/37 (e)(j)	74,777		46,175
Class B1, 2.0738% 7/25/37 (e)(j)	23,430		7,439
Class B2, 2.7238% 7/25/37 (e)(j)	20,305		6,294
Class B3, 3.8238% 7/25/37 (e)(j)	22,836		6,851
Class M1, 0.8438% 7/25/37 (e)(j)	26,651		14,458
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust: - continued
floater:
Series 2007-2A:
Class M2, 0.8838% 7/25/37 (e)(j)	$ 14,955		$ 7,739
Class M3, 0.9638% 7/25/37 (e)(j)	15,147		7,460
Class M4, 1.1238% 7/25/37 (e)(j)	29,164		12,176
Class M5, 1.2238% 7/25/37 (e)(j)	25,789		10,122
Class M6, 1.4738% 7/25/37 (e)(j)	32,729		12,028
Series 2007-3:
Class A2, 0.7638% 7/25/37 (e)(j)	132,484		98,409
Class B1, 1.4238% 7/25/37 (e)(j)	114,067		54,307
Class B2, 2.0738% 7/25/37 (e)(j)	293,048		139,549
Class B3, 4.4738% 7/25/37 (e)(j)	153,226		70,300
Class M1, 0.7838% 7/25/37 (e)(j)	100,090		58,102
Class M2, 0.8138% 7/25/37 (e)(j)	105,230		59,055
Class M3, 0.8438% 7/25/37 (e)(j)	170,335		89,886
Class M4, 0.9738% 7/25/37 (e)(j)	269,358		140,955
Class M5, 1.0738% 7/25/37 (e)(j)	134,275		68,950
Class M6, 1.2738% 7/25/37 (e)(j)	104,864		53,229
Series 2007-4A:
Class A2, 1.0238% 9/25/37 (e)(j)	972,463		680,724
Class B1, 3.0238% 9/25/37 (e)(j)	161,033		51,128
Class B2, 3.9238% 9/25/37 (e)(j)	603,810		176,614
Class M1, 1.4238% 9/25/37 (e)(j)	150,688		75,344
Class M2, 1.5238% 9/25/37 (e)(j)	150,688		67,810
Class M4, 2.0738% 9/25/37 (e)(j)	397,109		158,844
Class M5, 2.2238% 9/25/37 (e)(j)	397,109		148,916
Class M6, 2.4238% 9/25/37 (e)(j)	397,207		139,023
Series 2004-1 Class IO, 1.25% 4/25/34 (e)(l)	4,989,665		54,886
Series 2006-2A Class IO, 1.7976% 7/25/36 (c)(e)(l)	13,438,796		806,328
Bear Stearns Commercial Mortgage Securities Trust:
floater:
Series 2006-BBA7:
Class G, 0.9013% 3/15/19 (e)(j)	102,211		58,332
Class H, 1.1113% 3/15/19 (e)(j)	68,774		30,948
Class J, 1.3113% 3/15/19 (e)(j)	51,667		20,667
Series 2007-BBA8:
Class D, 0.705% 3/15/22 (e)(j)	52,963		32,896
Class E, 0.755% 3/15/22 (e)(j)	275,033		161,276
Class F, 0.805% 3/15/22 (e)(j)	168,653		94,474
Class G, 0.855% 3/15/22 (e)(j)	43,346		23,557
Class H, 1.005% 3/15/22 (e)(j)	52,963		23,833
Class J, 1.155% 3/15/22 (e)(j)	52,963		21,185
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bear Stearns Commercial Mortgage Securities Trust: - continued
sequential payer:
Series 2004-ESA Class A3, 4.741% 5/14/16 (e)	$ 625,000		$ 627,572
Series 2007-PW17 Class A1, 5.282% 6/11/50	1,592,725		1,523,622
Series 2002-TOP8 Class X2, 2.0827% 8/15/38 (e)(j)(l)	5,909,417		180,069
Series 2003-PWR2 Class X2, 0.4666% 5/11/39 (e)(j)(l)	15,824,019		165,584
Series 2004-PWR6 Class X2, 0.6189% 11/11/41 (e)(j)(l)	6,225,449		117,309
Series 2005-PWR9 Class X2, 0.3886% 9/11/42 (e)(j)(l)	42,430,192		500,031
Series 2007-T28 Class A1, 5.422% 9/11/42	703,912		674,600
C-BASS Trust floater Series 2006-SC1 Class A, 0.7438% 5/25/36 (e)(j)	138,929		60,326
CDC Commercial Mortgage Trust Series 2002-FX1 Class XCL, 0.908% 5/15/35 (e)(j)(l)	36,834,967		1,454,429
Citigroup Commercial Mortgage Trust:
floater Series 2006-FL2:
Class G, 0.785% 11/15/36 (e)(j)	56,376		17,477
Class H, 0.825% 11/15/36 (e)(j)	45,122		13,537
sequential payer Series 2005-EMG Class A2, 4.2211% 9/20/51 (e)	564,818		546,210
Series 2004-C2 Class XP, 0.8937% 10/15/41 (e)(j)(l)	8,219,154		157,957
Citigroup/Deutsche Bank Commercial Mortgage Trust Series 2006-CD3 Class X3, 0.4227% 10/15/48 (j)(l)	60,171,351		948,276
Cobalt CMBS Commercial Mortgage Trust sequential payer Series 2007-C2 Class A1, 5.064% 9/15/11 (j)	685,440		660,494
COMM pass-thru certificates:
floater:
Series 2005-F10A:
Class D, 0.765% 4/15/17 (e)(j)	120,571		57,042
Class E, 0.825% 4/15/17 (e)(j)	38,383		17,967
Class F, 0.865% 4/15/17 (e)(j)	21,773		9,645
Class G, 1.005% 4/15/17 (e)(j)	21,773		9,432
Class H, 1.075% 4/15/17 (e)(j)	21,773		8,891
Class J, 1.305% 4/15/17 (e)(j)	16,697		7,538
Series 2005-FL11:
Class F, 0.9113% 11/15/17 (e)(j)	49,344		16,488
Class G, 0.9613% 11/15/17 (e)(j)	34,203		10,662
Series 2004-LBN2 Class X2, 0.8624% 3/10/39 (e)(j)(l)	2,207,447		32,775
Series 2005-LP5 Class XP, 0.3666% 5/10/43 (j)(l)	15,117,739		99,682
Commercial Mortgage Securities - continued
	Principal Amount		Value
Commercial Mortgage Asset Trust sequential payer Series 1999-C1 Class A3, 6.64% 1/17/32	$ 201,378		$ 200,969
Credit Suisse Commercial Mortgage Trust Series 2006-C5 Class ASP, 0.6637% 12/15/39 (j)(l)	45,122,289		1,065,545
Credit Suisse First Boston Mortgage Securities Corp.:
Series 2001-CK6 Class AX, 0.645% 9/15/18 (l)	16,805,025		339,845
Series 2003-C3 Class ASP, 1.6988% 5/15/38 (e)(j)(l)	16,672,414		303,581
Series 2004-C1 Class ASP, 0.9364% 1/15/37 (e)(j)(l)	11,393,170		189,000
Series 2005-C1 Class ASP, 0.3423% 2/15/38 (e)(j)(l)	17,184,486		129,793
Series 2005-C2 Class ASP, 0.5505% 4/15/37 (e)(j)(l)	13,881,778		187,269
Credit Suisse Mortgage Capital Certificates floater Series 2007-TFL1:
Class C:
0.6313% 2/15/22 (e)(j)	236,650		70,995
0.7313% 2/15/22 (e)(j)	84,521		21,130
Class F, 0.7813% 2/15/22 (e)(j)	169,020		37,184
DLJ Commercial Mortgage Corp. sequential payer Series 2000-CF1 Class A1B, 7.62% 6/10/33	1,594,951		1,599,294
First Union National Bank-Bank of America Commercial Mortgage Trust Series 2001-C1 Class D, 6.484% 3/15/33	1,360,000		1,095,521
GE Capital Commercial Mortgage Corp. Series 2001-1 Class X1, 1.0537% 5/15/33 (e)(j)(l)	10,434,363		195,796
GMAC Commercial Mortgage Securities, Inc.:
sequential payer Series 2003-C2 Class A1, 4.576% 5/10/40	1,851,832		1,673,323
Series 2004-C3 Class X2, 0.6604% 12/10/41 (j)(l)	9,798,591		116,415
Series 2006-C1 Class XP, 0.1363% 11/10/45 (j)(l)	20,466,988		111,183
Greenwich Capital Commercial Funding Corp.:
Series 2003-C2 Class XP, 0.9758% 1/5/36 (e)(j)(l)	15,615,079		215,241
Series 2005-GG3 Class XP, 0.7646% 8/10/42 (e)(j)(l)	38,512,299		660,278
Series 2007-GG11 Class A1, 0.4798% 12/10/49 (e)(l)	97,158,551		1,369,936
GS Mortgage Securities Corp. II floater:
Series 2006-FL8A Class F, 0.885% 6/6/20 (e)(j)	105,970		60,403
Series 2007-EOP:
Class C, 0.765% 3/6/20 (e)(j)	720,000		460,800
Class D, 0.815% 3/6/20 (e)(j)	215,000		137,600
Class E, 0.885% 3/6/20 (e)(j)	360,000		226,800
Class F, 0.925% 3/6/20 (e)(j)	180,000		109,800
Class G, 0.965% 3/6/20 (e)(j)	90,000		54,000
Class H, 1.095% 3/6/20 (e)(j)	150,000		90,000
Class J, 1.295% 3/6/20 (e)(j)	215,000		122,550
Commercial Mortgage Securities - continued
	Principal Amount		Value
Hilton Hotel Pool Trust:
sequential payer Series 2000-HLTA Class A1, 7.055% 10/3/15 (e)	$ 266,578		$ 276,411
Series 2000-HLTA Class D, 7.555% 10/3/15 (e)	1,275,000		1,362,830
Host Marriott Pool Trust sequential payer Series 1999-HMTA:
Class A, 6.98% 8/3/15 (e)	69,603		70,305
Class B, 7.3% 8/3/15 (e)	505,000		514,383
Class D, 7.97% 8/3/15 (e)	425,000		435,023
JPMorgan Chase Commercial Mortgage Securities Corp.:
sequential payer Series 2001-C1 Class A2, 5.464% 10/12/35	511,775		505,148
Series 2002-C3 Class X2, 1.1342% 7/12/35 (e)(j)(l)	4,475,450		37,290
Series 2003-CB7 Class X2, 0.7683% 1/12/38 (e)(j)(l)	3,130,372		37,423
Series 2003-LN1 Class X2, 0.6341% 10/15/37 (e)(j)(l)	19,040,052		185,774
Series 2004-C1 Class X2, 0.9723% 1/15/38 (e)(j)(l)	2,944,185		47,355
Series 2004-CB8 Class X2, 1.1064% 1/12/39 (e)(j)(l)	4,040,551		67,153
JPMorgan Chase Commercial Mortgage Securities Trust:
floater Series 2006-FLA2:
Class D, 0.6913% 11/15/18 (e)(j)	29,296		13,769
Class E, 0.7413% 11/15/18 (e)(j)	41,514		18,681
Class F, 0.7913% 11/15/18 (e)(j)	62,265		27,397
Class G, 0.8213% 11/15/18 (e)(j)	54,115		22,728
Class H, 0.9613% 11/15/18 (e)(j)	41,514		16,606
sequential payer:
Series 2006-LDP9 Class A1, 5.17% 5/15/47 (j)	961,639		935,801
Series 2008-C2 Class A1, 5.017% 2/12/51	513,979		487,349
LB Commercial Conduit Mortgage Trust sequential payer Series 1999-C1 Class A2, 6.78% 6/15/31	1,167,749		1,164,612
LB-UBS Commercial Mortgage Trust:
sequential payer:
Series 2006-C6 Class A1, 5.23% 9/15/39	663,679		648,634
Series 2006-C7 Class A1, 5.279% 11/15/38	307,493		299,971
Series 2007-C1 Class A1, 5.391% 2/15/40 (j)	403,501		394,528
Series 2007-C2 Class A1, 5.226% 2/15/40	385,495		376,136
Series 2002-C4 Class XCP, 1.3959% 10/15/35 (e)(j)(l)	9,386,557		74,735
Series 2002-C7 Class XCP, 0.9632% 1/15/36 (e)(j)(l)	6,724,444		54,434
Series 2003-C1 Class XCP, 1.2936% 12/15/36 (e)(j)(l)	4,200,213		52,154
Series 2004-C2 Class XCP, 0.8376% 3/15/36 (e)(j)(l)	6,373,742		124,747
Commercial Mortgage Securities - continued
	Principal Amount		Value
LB-UBS Commercial Mortgage Trust: - continued
Series 2004-C6 Class XCP, 0.6492% 8/15/36 (e)(j)(l)	$ 9,461,807		$ 117,874
Series 2005-C7 Class XCP, 0.1676% 11/15/40 (j)(l)	73,994,079		436,728
Series 2006-C1 Class XCP, 0.308% 2/15/41 (j)(l)	55,680,894		603,046
Series 2006-C6 Class XCP, 0.6633% 9/15/39 (j)(l)	26,139,968		564,521
Series 2007-C1 Class XCP, 0.4751% 2/15/40 (j)(l)	10,274,564		163,650
Series 2007-C2 Class XCP, 0.5002% 2/15/40 (j)(l)	49,695,301		896,926
LB-UBS Westfield Trust:
Series 2001-WM Class X, 0.5408% 7/14/16 (e)(j)(l)	11,812,293		126,898
Series 2001-WM, 6.754% 7/14/16 (e)	1,085,000		978,870
Lehman Brothers Floating Rate Commercial Mortgage Trust floater Series 2006-LLFA:
Class F, 0.795% 9/15/21 (e)(j)	145,070		59,632
Class G, 0.815% 9/15/21 (e)(j)	286,588		104,858
Class H, 0.855% 9/15/21 (e)(j)	73,934		25,570
Merrill Lynch Mortgage Trust:
Series 2002-MW1 Class XP, 1.5454% 7/12/34 (e)(j)(l)	3,931,968		22,221
Series 2005-MCP1 Class XP, 0.5561% 6/12/43 (j)(l)	13,041,162		226,890
Series 2005-MKB2 Class XP, 0.2538% 9/12/42 (j)(l)	6,482,678		40,998
Merrill Lynch-CFC Commercial Mortgage Trust:
sequential payer:
Series 2007-6 Class A1, 5.175% 3/12/51	427,922		416,976
Series 2007-8 Class A1, 4.622% 8/12/49	689,274		657,256
Series 2006-4 Class XP, 0.6219% 12/12/49 (j)(l)	20,761,780		474,600
Morgan Stanley Capital I Trust:
floater:
Series 2006-XLF Class C, 1.662% 7/15/19 (e)(j)	104,414		10,441
Series 2007-XCLA Class A1, 0.662% 7/17/17 (e)(j)	347,799		191,289
Series 2007-XLCA Class B, 0.9613% 7/17/17 (e)(j)	197,974		17,818
Series 2007-XLFA:
Class D, 0.652% 10/15/20 (e)(j)	84,694		21,174
Class E, 0.712% 10/15/20 (e)(j)	105,926		21,185
Class F, 0.762% 10/15/20 (e)(j)	63,569		11,442
Class G, 0.802% 10/15/20 (e)(j)	78,581		11,787
Class H, 0.892% 10/15/20 (e)(j)	49,464		4,946
Class J, 1.042% 10/15/20 (e)(j)	56,462		4,517
Class MHRO, 1.152% 10/15/20 (e)(j)	22,950		2,525
Class MJPM, 1.462% 10/15/20 (e)(j)	7,766		699
Class MSTR, 1.162% 10/15/20 (e)(j)	14,148		1,981
Class NHRO, 1.352% 10/15/20 (e)(j)	33,519		3,017
Class NSTR, 1.312% 10/15/20 (e)(j)	13,176		1,449
Commercial Mortgage Securities - continued
	Principal Amount		Value
Morgan Stanley Capital I Trust: - continued
sequential payer:
Series 2003-IQ5 Class X2, 0.9046% 4/15/38 (e)(j)(l)	$ 6,047,521		$ 108,231
Series 2006-HQ8 Class A1, 5.124% 3/12/44	191,719		189,813
Series 2006-T23 Class A1, 5.682% 8/12/41	496,908		480,903
Series 2007-HQ11 Class A1, 5.246% 2/20/44	695,735		675,564
Series 2003-IQ6 Class X2, 0.5824% 12/15/41 (e)(j)(l)	12,134,174		173,292
Series 2005-HQ5 Class X2, 0.2375% 1/14/42 (j)(l)	14,114,670		90,004
Series 2005-IQ9 Class X2, 1.0444% 7/15/56 (e)(j)(l)	12,908,616		311,271
Series 2005-TOP17 Class X2, 0.5794% 12/13/41 (j)(l)	9,130,627		162,900
Series 2007-XLC1:
Class C, 1.0613% 7/17/17 (e)(j)	270,216		21,617
Class D, 1.1613% 7/17/17 (e)(j)	127,146		8,900
Class E, 1.2613% 7/17/17 (e)(j)	103,321		6,199
Morgan Stanley Dean Witter Capital I Trust:
Series 2003-HQ2 Class X2, 1.327% 3/12/35 (e)(j)(l)	9,955,515		231,079
Series 2003-TOP9 Class X2, 1.4362% 11/13/36 (e)(j)(l)	5,194,394		130,787
STRIPS III Ltd./STRIPS III Corp. floater Series 2004-1A Class A, 0.9525% 3/24/18 (e)(j)	274,263		224,896
Wachovia Bank Commercial Mortgage Trust:
floater:
Series 2005-WL5A Class K, 1.655% 1/15/18 (e)(j)	161,978		89,088
Series 2006-WL7A:
Class E, 0.735% 9/15/21 (e)(j)	176,861		72,513
Class F, 0.795% 8/11/18 (e)(j)	238,334		71,500
Class G, 0.815% 8/11/18 (e)(j)	225,785		56,446
Class J, 0.9331% 8/11/18 (e)(j)	50,198		18,071
Class X1A, 0.0239% 9/15/21 (e)(j)(l)	359,324		3
Series 2007-WHL8:
Class AP1, 1.155% 6/15/20 (e)(j)	11,855		2,964
Class AP2, 1.255% 6/15/20 (e)(j)	19,414		3,883
Class F, 0.935% 6/15/20 (e)(j)	376,985		120,635
Class LXR2, 1.255% 6/15/20 (e)(j)	257,008		38,551
sequential payer:
Series 2003-C7 Class A1, 4.241% 10/15/35 (e)	2,650,553		2,506,054
Series 2007-C30 Class A1, 5.031% 12/15/43	665,108		646,879
Series 2007-C31 Class A1, 5.14% 4/15/47	452,777		440,310
Commercial Mortgage Securities - continued
	Principal Amount		Value
Wachovia Bank Commercial Mortgage Trust: - continued
Series 2005-C18 Class XP, 0.3252% 4/15/42 (e)(j)(l)	$ 19,778,807		$ 174,724
Series 2005-C20 Class A3SF, 0.4588% 7/15/42 (j)	1,332,935		1,189,479
Series 2006-C23 Class X, 0.0807% 1/15/45 (e)(j)(l)	259,571,789		1,127,684
Series 2006-C24 Class XP, 0.0768% 3/15/45 (e)(j)(l)	44,853,665		189,372
Series 2007-C30 Class XP, 0.4336% 12/15/43 (e)(j)(l)	50,509,717		827,536
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $64,925,031)		55,645,381
Commercial Paper - 1.0%
Bank of Nova Scotia yankee 0.76% 5/12/09	2,000,000		1,995,901
HVB U.S. Finance, Inc. yankee 1.4% 3/9/09	1,480,000		1,479,855
Lloyds TSB Bank PLC yankee 1.15% 5/11/09	4,000,000		3,991,986
Rabobank USA Financial Corp. yankee 0.9% 8/10/09	4,000,000		3,988,283
TOTAL COMMERCIAL PAPER (Cost $11,450,900)		11,456,025

Fixed-Income Funds - 0.3%
	Shares
Fidelity 1-3 Year Duration Securitized Bond Central Fund (k) (Cost $4,775,182)	47,909		3,398,205
Cash Equivalents - 9.2%
	Maturity Amount
Investments in repurchase agreements in a joint trading account at:
0.26%, dated 2/27/09 due 3/2/09 (Collateralized by U.S. Government Obligations) #	$ 8,168,176		8,168,000
0.28%, dated 2/27/09 due 3/2/09 (Collateralized by U.S. Government Obligations) # (a)	101,752,374		101,750,000
TOTAL CASH EQUIVALENTS (Cost $109,918,000)		109,918,000
TOTAL INVESTMENT PORTFOLIO - 110.3% (Cost $1,384,047,682)			1,319,914,416
NET OTHER ASSETS - (10.3)%			(123,079,751)
NET ASSETS - 100%		$ 1,196,834,665

Futures Contracts
	Expiration Date	Underlying Face Amount at Value	Unrealized Appreciation/ (Depreciation)
Purchased
Eurodollar Contracts
95 Eurodollar 90 Day Index Contracts	March 2009	$ 94,694,219	$ 504,389
92 Eurodollar 90 Day Index Contracts	June 2009	91,699,850	220,158
92 Eurodollar 90 Day Index Contracts	Sept. 2009	91,683,750	227,758
49 Eurodollar 90 Day Index Contracts	Dec. 2009	48,810,738	(12,232)
49 Eurodollar 90 Day Index Contracts	March 2010	48,795,425	(11,170)
TOTAL EURODOLLAR CONTRACTS			$ 928,903
Swap Agreements
		Notional Amount	Value
Credit Default Swaps
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R9 Class M5, 5.5913% 10/25/34 (Rating-Ba2) (i)	Nov. 2034	$ 362,000	$ (335,276)
Receive monthly notional amount multiplied by 3.05% and pay Merrill Lynch upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8, Class B3, 7.2913% 9/25/34 (Rating-B1) (i)	Oct. 2034	119,687	(64,278)
Receive monthly notional amount multiplied by 5% and pay Deutsche Bank upon credit event of MASTR Asset Backed Securities Trust, par value of the notional amount of MASTR Asset Backed Securities Trust Series 2003-NC1 Class M6, 8.1913% 4/25/33 (Rating-Baa3) (i)	May 2033	362,000	(304,161)
Receive monthly notional amount multiplied by 3.35% and pay Morgan Stanley, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-HE7, Class B3, 9.01% 8/25/34 (Rating-C) (i)	Sept. 2034	105,811	(97,196)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by .82% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC6 Class M3, 5.6413% 7/25/34 (Rating-Baa2) (i)	August 2034	$ 87,388	$ (51,382)
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8 Class M6, 5.4413% 9/25/34 (Rating-A3) (i)	Oct. 2034	108,324	(64,182)
Receive monthly notional amount multiplied by 2.54% and pay Merrill Lynch upon credit event of Countrywide Home Loans, Inc., par value of the notional amount of Countrywide Home Loans, Inc. Series 2003-BC1 Class B1, 7.6913% 3/25/32 (Rating-Baa3) (i)	April 2032	31,876	(25,904)
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-1 Class M9, 7.3913% 2/25/34 (Rating-Baa3) (i)	March 2034	$ 26,379	$ (1,759)
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-A Class B3, 7.0413% 1/25/34 (Rating-Ba2) (i)	Feb. 2034	1,009	(953)
Receive quarterly notional amount multiplied by .41% and pay Merrill Lynch, Inc. upon credit event of Talisman Energy, Inc., par value of the notional amount of Talisman Energy, Inc. 7.25% 10/15/27 (Rating-Baa2) (i)	March 2009	1,000,000	(340)
		$ 2,204,474	$ (945,431)

Legend

(a) Includes investment made with cash collateral received from securities on loan.

(b) Non-income producing - Issuer is in default.

(c) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end.

(d) Security or a portion of the security is on loan at period end.

(e) 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. At the end of the period, the value of these securities amounted to $76,625,051 or 6.4% of net assets.

(f) Under the Temporary Liquidity Guarantee Program, the Federal Deposit Insurance Corporation guarantees principal and interest in the event of payment default or bankruptcy until the earlier of maturity date of the debt or until June 30, 2012. At the end of the period these securities amounted to $13,545,486 or 1.1% of net assets.

(g) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $455,011.

(h) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $1,300,031.

(i) Represents a credit default swap contract in which the fund has sold protection on the underlying reference entity. For the underlying reference entity, ratings disclosed are from Moody's Investor Services, Inc. Where Moody's ratings are not available, S&P ratings are disclosed and are indicated as such. Any underlying reference entity which is Not Rated (NR) by Moody's or S&P is designated as such. All ratings are as of the report date and do not reflect subsequent changes.

(j) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(k) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's web site or upon request.

(l) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.

(m) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $1,780,811 or 0.1% of net assets.

Additional information on each holding is as follows:

Security	Acquisition Date	Acquisition Cost
Iberbond 2004 PLC 4.826% 12/24/17	11/30/05	$ 2,132,642

(n) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(o) Non-income producing.

# Additional Information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value
$8,168,000 due 3/02/09 at 0.26%
Goldman, Sachs & Co.	$ 3,202,673
UBS Securities LLC	4,965,327
	$ 8,168,000
$101,750,000 due 3/02/09 at 0.28%
J.P. Morgan Securities, Inc.	$ 101,750,000

Affiliated Central Funds

Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:

Fund	Income earned
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ 91,860
Fidelity Ultra-Short Central Fund	542,289
Total	$ 634,149

Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows:

Fund	Value, beginning of period	Purchases	Sales Proceeds	Value, end of period	% ownership, end of period
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ 6,291,778	$ 91,859	$ 2,298,181	$ 3,398,205	0.4%
Fidelity Ultra-Short Central Fund	76,202,764	-	64,126,624*	-	0.0%
Total	$ 82,494,542	$ 91,859	$ 66,424,805	$ 3,398,205

* Includes the value of shares redeemed through in-kind contributions. See Note 6 of the Notes to Financial Statements.

Other Information

The following is a summary of the inputs used, as of February 28, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:
Description	Total	Level 1	Level 2	Level 3
Investments in Securities	$ 1,319,914,416	$ 3,398,205	$ 1,296,911,348	$ 19,604,863
Other Financial Instruments*	$ (16,528)	$ 928,903	$ (355,884)	$ (589,547)

*Other financial instruments include Futures Contracts and Swap Agreements.

The following is a reconciliation of assets for which Level 3 inputs were used in determining value:

	Investments in Securities	Other Financial Instruments
Beginning Balance	$ 2,559,315	$ (1,233,143)
Total Realized Gain (Loss)	29,878	-
Total Unrealized Gain (Loss)	(9,640,355)	718,552
Cost of Purchases	5,259,619	-
Proceeds of Sales	(1,266,337)	-
Amortization/Accretion	(628,234)	-
Transfer in/out of Level 3	23,290,977	(74,956)
Ending Balance	$ 19,604,863	$ (589,547)

* The realized gain (loss) for derivative instruments is not included in the rollforward. For the period, the realized gain (loss) on these instruments totaled $19,366.

The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities or Other Financial Instruments identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period.

Income Tax Information

At August 31, 2008, the fund had a capital loss carryforward of approximately $13,532,123 of which $6,438,298, $4,621,616, $1,110,250 and $1,361,959 will expire on August 31, 2013, 2014, 2015 and 2016, respectively.

The fund intends to elect to defer to its fiscal year ending August 31, 2009 approximately $22,088,797 of losses recognized during the period November 1, 2007 to August 31, 2008.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

	February 28, 2009
Assets
Investment in securities, at value (including securities loaned of $99,755,000 and repurchase agreements of $109,918,000) - See accompanying schedule: Unaffiliated issuers (cost $1,379,272,500)	$ 1,316,516,211
Fidelity Central Funds (cost $4,775,182)	3,398,205
Total Investments (cost $1,384,047,682)		$ 1,319,914,416
Cash		65,223
Receivable for investments sold		22,854,218
Receivable for swap agreements		5,225
Receivable for fund shares sold		1,522,397
Interest receivable		6,512,166
Distributions receivable from Fidelity Central Funds		9,878
Prepaid expenses		11,891
Total assets		1,350,895,414
Liabilities
Payable for investments purchased
Regular delivery	$ 3,140,243
Delayed delivery	42,657,708
Payable for swap agreements	552,911
Payable for fund shares redeemed	4,036,969
Distributions payable	165,302
Unrealized depreciation on swap agreements	945,431
Accrued management fee	325,293
Distribution fees payable	167,787
Payable for daily variation on futures contracts	413
Other affiliated payables	238,874
Other payables and accrued expenses	79,818
Collateral on securities loaned, at value	101,750,000
Total liabilities		154,060,749
Net Assets		$ 1,196,834,665
Net Assets consist of:
Paid in capital		$ 1,324,587,000
Undistributed net investment income		1,136,164
Accumulated undistributed net realized gain (loss) on investments		(64,738,707)
Net unrealized appreciation (depreciation) on investments		(64,149,792)
Net Assets		$ 1,196,834,665

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Assets and Liabilities - continued

	February 28, 2009
Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($275,529,961 ÷ 31,827,444 shares)		$ 8.66
Maximum offering price per share (100/98.50 of $8.66)		$ 8.79
Class T: Net Asset Value and redemption price per share ($267,576,604 ÷ 30,880,368 shares)		$ 8.66
Maximum offering price per share (100/98.50 of $8.66)		$ 8.79
Class B: Net Asset Value and offering price per share ($12,563,850 ÷ 1,456,263 shares)A		$ 8.63
Class C: Net Asset Value and offering price per share ($107,987,298 ÷ 12,464,493 shares)A		$ 8.66
Institutional Class: Net Asset Value, offering price and redemption price per share ($533,176,952 ÷ 61,355,547 shares)		$ 8.69

^A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

	Six months ended February 28, 2009
Investment Income
Interest		$ 21,855,717
Income from Fidelity Central Funds		634,149
Total income		22,489,866
Expenses
Management fee	$ 2,036,417
Transfer agent fees	1,272,220
Distribution fees	1,009,781
Accounting and security lending fees	224,249
Custodian fees and expenses	19,060
Independent trustees' compensation	2,451
Registration fees	56,002
Audit	88,500
Legal	2,162
Miscellaneous	12,952
Total expenses before reductions	4,723,794
Expense reductions	(6,202)	4,717,592
Net investment income		17,772,274
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	184,047
Fidelity Central Funds	(28,977,784)
Futures contracts	1,682,875
Swap agreements	129,730
Total net realized gain (loss)		(26,981,132)
Change in net unrealized appreciation (depreciation) on: Investment securities	(13,690,035)
Futures contracts	(563,782)
Swap agreements	844,038
Total change in net unrealized appreciation (depreciation)		(13,409,779)
Net gain (loss)		(40,390,911)
Net increase (decrease) in net assets resulting from operations		$ (22,618,637)

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

	Six months ended February 28, 2009	Year ended August 31, 2008
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 17,772,274	$ 54,585,898
Net realized gain (loss)	(26,981,132)	(24,447,492)
Change in net unrealized appreciation (depreciation)	(13,409,779)	(22,462,426)
Net increase (decrease) in net assets resulting from operations	(22,618,637)	7,675,980
Distributions to shareholders from net investment income	(16,520,027)	(54,115,364)
Share transactions - net increase (decrease)	(138,734,810)	(18,385,435)
Total increase (decrease) in net assets	(177,873,474)	(64,824,819)
Net Assets
Beginning of period	1,374,708,139	1,439,532,958
End of period (including undistributed net investment income of $1,136,164 and distributions in excess of net investment income of $116,083, respectively)	$ 1,196,834,665	$ 1,374,708,139

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

	Six months ended February 28,	Years ended August 31,
	2009	2008	2007	2006 H	2005 J	2004 J	2003 J
Selected Per-Share Data
Net asset value, beginning of period	$ 8.94	$ 9.25	$ 9.39	$ 9.39	$ 9.60	$ 9.55	$ 9.44
Income from Investment Operations
Net investment income E	.120	.364	.414	.305	.281	.202	.261
Net realized and unrealized gain (loss)	(.289)	(.315)	(.154)	.002	(.204)	.040	.128
Total from investment operations	(.169)	.049	.260	.307	.077	.242	.389
Distributions from net investment income	(.111)	(.359)	(.400)	(.307)	(.279)	(.192)	(.279)
Distributions from net realized gain	-	-	-	-	(.008)	-	-
Total distributions	(.111)	(.359)	(.400)	(.307)	(.287)	(.192)	(.279)
Net asset value, end of period	$ 8.66	$ 8.94	$ 9.25	$ 9.39	$ 9.39	$ 9.60	$ 9.55
Total Return B, C, D	(1.89)%	.51%	2.79%	3.33%	.81%	2.56%	4.16%
Ratios to Average Net Assets F, I
Expenses before reductions	.79% A	.78%	.78%	.78% A	.85%	.87%	.81%
Expenses net of fee waivers, if any	.79% A	.78%	.78%	.78% A	.85%	.87%	.81%
Expenses net of all reductions	.79% A	.78%	.77%	.78% A	.85%	.87%	.81%
Net investment income	2.77% A	3.98%	4.41%	3.91% A	2.96%	2.13%	2.74%
Supplemental Data
Net assets, end of period (000 omitted)	$ 275,530	$ 342,015	$ 412,412	$ 377,221	$ 369,512	$ 357,760	$ 186,290
Portfolio turnover rate G	277% A	94%	91% K	55% A	94%	87%	102%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. J For the period ended October 31. K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class T

	Six months ended February 28,	Years ended August 31,
	2009	2008	2007	2006 H	2005 J	2004 J	2003 J
Selected Per-Share Data
Net asset value, beginning of period	$ 8.94	$ 9.26	$ 9.40	$ 9.40	$ 9.60	$ 9.55	$ 9.45
Income from Investment Operations
Net investment income E	.122	.368	.417	.308	.284	.207	.261
Net realized and unrealized gain (loss)	(.290)	(.327)	(.154)	.002	(.194)	.038	.118
Total from investment operations	(.168)	.041	.263	.310	.090	.245	.379
Distributions from net investment income	(.112)	(.361)	(.403)	(.310)	(.282)	(.195)	(.279)
Distributions from net realized gain	-	-	-	-	(.008)	-	-
Total distributions	(.112)	(.361)	(.403)	(.310)	(.290)	(.195)	(.279)
Net asset value, end of period	$ 8.66	$ 8.94	$ 9.26	$ 9.40	$ 9.40	$ 9.60	$ 9.55
Total Return B, C, D	(1.88)%	.43%	2.82%	3.36%	.95%	2.59%	4.04%
Ratios to Average Net Assets F, I
Expenses before reductions	.77% A	.76%	.75%	.74% A	.81%	.83%	.82%
Expenses net of fee waivers, if any	.77% A	.76%	.75%	.74% A	.81%	.83%	.82%
Expenses net of all reductions	.77% A	.76%	.75%	.74% A	.81%	.83%	.82%
Net investment income	2.79% A	4.01%	4.44%	3.95% A	2.99%	2.16%	2.73%
Supplemental Data
Net assets, end of period (000 omitted)	$ 267,577	$ 334,850	$ 516,227	$ 514,917	$ 544,662	$ 517,440	$ 468,931
Portfolio turnover rate G	277% A	94%	91% K	55% A	94%	87%	102%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. J For the period ended October 31. K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class B

	Six months ended February 28,	Years ended August 31,
	2009	2008	2007	2006 H	2005 J	2004 J	2003 J
Selected Per-Share Data
Net asset value, beginning of period	$ 8.95	$ 9.27	$ 9.41	$ 9.41	$ 9.61	$ 9.56	$ 9.46
Income from Investment Operations
Net investment income E	.087	.295	.344	.247	.210	.130	.183
Net realized and unrealized gain (loss)	(.329)	(.326)	(.155)	.002	(.194)	.038	.120
Total from investment operations	(.242)	(.031)	.189	.249	.016	.168	.303
Distributions from net investment income	(.078)	(.289)	(.329)	(.249)	(.208)	(.118)	(.203)
Distributions from net realized gain	-	-	-	-	(.008)	-	-
Total distributions	(.078)	(.289)	(.329)	(.249)	(.216)	(.118)	(.203)
Net asset value, end of period	$ 8.63	$ 8.95	$ 9.27	$ 9.41	$ 9.41	$ 9.61	$ 9.56
Total Return B, C, D	(2.71)%	(.36)%	2.01%	2.68%	.17%	1.77%	3.23%
Ratios to Average Net Assets F, I
Expenses before reductions	1.55% A	1.55%	1.54%	1.54% A	1.61%	1.63%	1.61%
Expenses net of fee waivers, if any	1.55% A	1.55%	1.54%	1.54% A	1.60%	1.63%	1.61%
Expenses net of all reductions	1.55% A	1.55%	1.53%	1.53% A	1.60%	1.63%	1.61%
Net investment income	2.01% A	3.22%	3.65%	3.15% A	2.21%	1.36%	1.94%
Supplemental Data
Net assets, end of period (000 omitted)	$ 12,564	$ 11,617	$ 19,895	$ 30,678	$ 39,190	$ 53,502	$ 49,353
Portfolio turnover rate G	277% A	94%	91% K	55% A	94%	87%	102%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. J For the period ended October 31. K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class C

	Six months ended February 28,	Years ended August 31,
	2009	2008	2007	2006 H	2005 J	2004 J	2003 J
Selected Per-Share Data
Net asset value, beginning of period	$ 8.95	$ 9.26	$ 9.40	$ 9.40	$ 9.61	$ 9.55	$ 9.45
Income from Investment Operations
Net investment income E	.085	.291	.340	.244	.206	.129	.182
Net realized and unrealized gain (loss)	(.299)	(.315)	(.155)	.002	(.204)	.048	.118
Total from investment operations	(.214)	(.024)	.185	.246	.002	.177	.300
Distributions from net investment income	(.076)	(.286)	(.325)	(.246)	(.204)	(.117)	(.200)
Distributions from net realized gain	-	-	-	-	(.008)	-	-
Total distributions	(.076)	(.286)	(.325)	(.246)	(.212)	(.117)	(.200)
Net asset value, end of period	$ 8.66	$ 8.95	$ 9.26	$ 9.40	$ 9.40	$ 9.61	$ 9.55
Total Return B, C, D	(2.39)%	(.29)%	1.98%	2.65%	.02%	1.86%	3.19%
Ratios to Average Net Assets F, I
Expenses before reductions	1.60% A	1.58%	1.57%	1.58% A	1.64%	1.65%	1.64%
Expenses net of fee waivers, if any	1.60% A	1.58%	1.57%	1.58% A	1.64%	1.65%	1.64%
Expenses net of all reductions	1.60% A	1.58%	1.57%	1.57% A	1.64%	1.65%	1.64%
Net investment income	1.96% A	3.18%	3.62%	3.12% A	2.16%	1.34%	1.91%
Supplemental Data
Net assets, end of period (000 omitted)	$ 107,987	$ 97,150	$ 129,105	$ 156,364	$ 194,992	$ 273,166	$ 359,779
Portfolio turnover rate G	277% A	94%	91% K	55% A	94%	87%	102%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. J For the period ended October 31. K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Institutional Class

	Six months ended February 28,	Years ended August 31,
	2009	2008	2007	2006 G	2005 I	2004 I	2003 I
Selected Per-Share Data
Net asset value, beginning of period	$ 8.94	$ 9.26	$ 9.40	$ 9.40	$ 9.60	$ 9.55	$ 9.45
Income from Investment Operations
Net investment income D	.132	.385	.435	.321	.301	.225	.278
Net realized and unrealized gain (loss)	(.260)	(.324)	(.154)	.003	(.194)	.038	.119
Total from investment operations	(.128)	.061	.281	.324	.107	.263	.397
Distributions from net investment income	(.122)	(.381)	(.421)	(.324)	(.299)	(.213)	(.297)
Distributions from net realized gain	-	-	-	-	(.008)	-	-
Total distributions	(.122)	(.381)	(.421)	(.324)	(.307)	(.213)	(.297)
Net asset value, end of period	$ 8.69	$ 8.94	$ 9.26	$ 9.40	$ 9.40	$ 9.60	$ 9.55
Total Return B, C	(1.43)%	.65%	3.02%	3.51%	1.14%	2.78%	4.24%
Ratios to Average Net Assets E, H
Expenses before reductions	.54% A	.54%	.55%	.57% A	.63%	.64%	.63%
Expenses net of fee waivers, if any	.54% A	.54%	.55%	.57% A	.63%	.64%	.63%
Expenses net of all reductions	.54% A	.54%	.55%	.57% A	.63%	.64%	.63%
Net investment income	3.02% A	4.23%	4.64%	4.12% A	3.18%	2.35%	2.92%
Supplemental Data
Net assets, end of period (000 omitted)	$ 533,177	$ 589,076	$ 361,894	$ 224,908	$ 151,257	$ 98,505	$ 91,138
Portfolio turnover rate F	277% A	94%	91% J	55% A	94%	87%	102%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. I For the period ended October 31. J Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Notes to Financial Statements

For the period ended February 28, 2009

1. Organization.

Fidelity Advisor Short Fixed-Income Fund (the Fund) is a fund of Fidelity Advisor Series II (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of four years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

2. Investments in Fidelity Central Funds.

The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.

Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.

Fidelity Central Fund	Investment Manager	Investment Objective	Investment Practices
Fidelity 1-3 Year Duration Securitized Bond Central Fund	Fidelity Investment Money Management, Inc. (FIMM)	Seeks a high level of income by normally investing in investment-grade securitized debt securities and repurchase agreements for those securities.	Futures Repurchase Agreements Restricted Securities Swap Agreements

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Notes to Financial Statements - continued

2. Investments in Fidelity Central Funds - continued

An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's web site or upon request.

3. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Fund uses independent pricing services approved by the Board of Trustees to value its investments.

Debt securities, including restricted securities, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Swaps are marked-to-market daily based on valuations from independent pricing services or dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value. Actual prices received at disposition may differ.

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3. Significant Accounting Policies - continued

Security Valuation - continued

When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.

The Fund adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:

Level 1	Quoted prices in active markets for identical securities.
Level 2	Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3	Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.

The aggregate value by input level, as of February 28, 2009, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.

Semiannual Report

Notes to Financial Statements - continued

3. Significant Accounting Policies - continued

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.

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3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to futures transactions, swap agreements, prior period premium and discount on debt securities, market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, capital loss carryforwards, expiring capital loss carryforwards and losses deferred due to wash sales excise tax regulations.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation	$ 11,144,009
Unrealized depreciation	(74,799,397)
Net unrealized appreciation (depreciation)	$ (63,655,388)
Cost for federal income tax purposes	$ 1,383,569,804

New Accounting Pronouncement. In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for reporting periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance.

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Notes to Financial Statements - continued

4. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Delayed Delivery Transactions and When-Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. Securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Futures Contracts. The Fund may use futures contracts to manage its exposure to the bond market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to

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4. Operating Policies - continued

Futures Contracts - continued

meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms.

Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.

Swap Agreements. The Fund entered into swap agreements, which are contracts between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Gains or losses are realized in the event of an early termination of a swap agreement. Risks of loss may exceed amounts recognized on the Fund's Statement of Assets and Liabilities. Risks of loss may include unfavorable changes in the returns of the underlying instruments or indexes, adverse fluctuations of interest rates, failure of the counterparty to perform under the terms of the agreement and lack of liquidity in the market. Details of swap agreements open at period end are included in the Fund's Schedule of Investments under the caption "Swap Agreements." Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian bank in accordance with the swap agreement and if required, is identified in the Fund's Schedule of Investments. The Fund could experience delays and costs in gaining access to the collateral even though it is held in the Fund's custodian bank.

The Fund entered into credit default swap agreements to provide a measure of protection against defaults of an issuer ("buyer of protection") and/or to gain credit exposure to an issuer to which it is not otherwise exposed ("seller of protection"). The issuer may be either a single issuer or a "basket" of issuers. As a buyer of protection, the Fund does so when it holds bonds of the issuer or without owning the underlying asset or debt issued by the reference entity. Under the terms of a credit default swap the buyer of protection

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Notes to Financial Statements - continued

4. Operating Policies - continued

Swap Agreements - continued

(buyer) receives credit protection in exchange for making periodic payments to the seller of protection (seller) based on a fixed percentage applied to a notional principal amount. In return for these payments, the seller acts as a guarantor of the credit worthiness of a reference obligation. Any upfront payments made or received upon entering a credit default swap contract would be amortized or accreted over the life of the swap and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Periodic payments are made over the life of the contract provided that no credit event occurs. For credit default swaps on asset-backed securities, a credit event may be triggered by events such as failure to pay principal, maturity extension, rating downgrade or write-down. For credit default swaps on corporate or sovereign issuers, a credit event may be triggered by events such as bankruptcy, failure to pay, obligation acceleration, repudiation/moratorium or restructuring. If a credit event were to occur during the term of the contract, upon notification from the buyer, the seller is obligated to take delivery from the buyer the notional amount of a reference obligation, at par. The difference between the value of the obligation received and the notional amount paid is recorded as a realized loss to the seller. For credit default swaps on asset-backed securities, the reference obligation described represents the security that will be put to the seller. For credit default swaps on corporate or sovereign issuers, under the terms of the agreement, the obligation that is put to the seller is not limited to the specific reference obligation described in the Fund's Schedule of Investments.

The notional amount of credit default swaps is included in the Fund's Schedule of Investments and approximates the maximum potential amount of future payments that the Fund could be required to make if the Fund is the seller of protection and a credit event were to occur. The total notional amount of all credit default swaps open at period end where the Fund is the seller of protection amounted to $2,204,474 representing 0.2% of net assets.

The value of each credit default swap and credit rating disclosed for each reference obligation in the Fund's Schedule of Investments, where the Fund is the seller of protection, are both measures of the current payment/performance risk of the swap. As the value of the swap changes as a positive or negative percentage of the total notional amount, the payment/performance risk may decrease or increase, respectively. Any current or future declines in the value of the swap may be partially offset by upfront payments received by the Fund as the seller of protection if applicable. In addition to these measures, FMR monitors a variety of factors including cash flow assumptions, market activity and market sentiment as part of its ongoing process of assessing payment/performance risk.

Semiannual Report

5. Purchases and Sales of Investments.

Purchases and sales of securities (including the Fixed-Income Central Funds), other than short-term securities and U.S. government securities, aggregated $67,400,338 and $193,118,279, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .32% of the Fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services.

For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

	Distribution Fee	Service Fee	Paid to FDC	Retained by FDC
Class A	-%	.15%	$ 235,443	$ 6,369
Class T	-%	.15%	223,672	4,264
Class B	.65%	.25%	57,981	42,119
Class C	.75%	.25%	492,685	40,588
			$ 1,009,781	$ 93,340

Sales Load. FDC receives a front-end sales charge of up to 1.50% for selling Class A and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of a contingent deferred sales charges levied on Class A, Class T, Class B and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 3% to 1% for Class B, 1% for Class C, .75% to ..50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

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Notes to Financial Statements - continued

6. Fees and Other Transactions with Affiliates - continued

Sales Load - continued

For the period, sales charge amounts retained by FDC were as follows:

	Retained by FDC
Class A	$ 16,956
Class T	7,064
Class B*	23,671
Class C*	10,299
	$ 57,990

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.

For the period, the total transfer agent fees paid by each class were as follows:

	Amount	% of Average Net Assets *
Class A	$ 394,567	.25
Class T	340,704	.23
Class B	16,268	.25
Class C	100,838	.21
Institutional Class	419,843	.15
	$ 1,272,220

* Annualized

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Other Affiliated Transactions. On January 23, 2009, Fidelity Ultra-Short Central Fund ("Ultra-Short"), a Fidelity Central Fund in which the Fund invests, was liquidated pursuant to a Plan of Liquidation and Dissolution approved by its Board of Trustees on January 15, 2009. Under the plan, Ultra-Short distributed in-kind all of its net assets to its shareholders pro rata at its net asset value (NAV) per share of $62.53 determined as of the close of business on the liquidation date. As a result, the Fund received cash and securities, including accrued interest, of $38,383,060 in return for 613,870 shares of Ultra-Short. This is considered taxable to the Fund for federal income tax purposes.

Semiannual Report

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3,941 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. Security Lending.

The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of interest income. Net income from lending portfolio securities during the period amounted to $174,359.

9. Expense Reductions.

Through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $6,202.

10. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

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Notes to Financial Statements - continued

10. Other - continued

In March 2009, the Board of Directors of the Fidelity 1-3 Year Duration Securitized Bond Central Fund ("1-3 Year"), a Fidelity Central Fund in which the Fund invests, approved a Plan of Liquidation and Dissolution. Under the plan, 1-3 Year will distribute in-kind all of its net assets to its shareholders pro rata at the NAV per share of 1-3 Year determined as of the close of business on or about June 19, 2009.

11. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

	Six months ended February 28, 2009	Year ended August 31, 2008
From net investment income
Class A	$ 4,031,155	$ 15,639,258
Class T	3,865,297	17,927,649
Class B	115,075	501,393
Class C	850,140	3,571,643
Institutional Class	7,658,360	16,475,421
Total	$ 16,520,027	$ 54,115,364

12. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class A
Shares sold	5,300,214	11,302,265	$ 46,139,585	$ 103,603,312
Reinvestment of distributions	416,206	1,539,856	3,634,570	14,071,246
Shares redeemed	(12,158,131)	(19,150,281)	(106,416,026)	(174,320,632)
Net increase (decrease)	(6,441,711)	(6,308,160)	$ (56,641,871)	$ (56,646,074)
Class T
Shares sold	3,671,556	10,974,663	$ 31,961,366	$ 100,897,906
Reinvestment of distributions	402,031	1,767,638	3,513,880	16,191,013
Shares redeemed	(10,632,998)	(31,063,213)	(93,248,596)	(283,101,603)
Net increase (decrease)	(6,559,411)	(18,320,912)	$ (57,773,350)	$ (166,012,684)

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12. Share Transactions - continued

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class B
Shares sold	849,795	661,531	$ 7,404,271	$ 6,072,366
Reinvestment of distributions	9,301	41,928	81,263	384,593
Shares redeemed	(700,372)	(1,552,588)	(6,131,754)	(14,215,142)
Net increase (decrease)	158,724	(849,129)	$ 1,353,780	$ (7,758,183)
Class C
Shares sold	3,857,523	1,924,284	$ 33,588,455	$ 17,674,887
Reinvestment of distributions	65,830	261,023	575,404	2,389,857
Shares redeemed	(2,317,232)	(5,267,046)	(20,328,992)	(48,161,144)
Net increase (decrease)	1,606,121	(3,081,739)	$ 13,834,867	$ (28,096,400)
Institutional Class
Shares sold	15,686,339	38,519,700	$ 137,902,531	$ 347,579,198
Reinvestment of distributions	818,523	1,561,667	7,155,382	14,241,593
Shares redeemed	(21,019,905)	(13,302,803)	(184,566,149)	(121,692,885)
Net increase (decrease)	(4,515,043)	26,778,564	$ (39,508,236)	$ 240,127,906

13. Credit Risk.

The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers backed by residential mortgage loans, credit card receivables and automotive loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults.

Semiannual Report

Report of Independent Registered Public Accounting Firm

To the Trustees of Fidelity Advisor Series II and Shareholders of Fidelity Advisor Short Fixed-Income Fund:

We have audited the accompanying statement of assets and liabilities of Fidelity Advisor Short Fixed-Income Fund (the Fund), a fund of Fidelity Advisor Series II, including the schedule of investments, as of February 28, 2009, and the related statement of operations for the six months then ended, the statements of changes in net assets for the six months ended February 28, 2009 and for the year ended August 31, 2008, and the financial highlights for the six months ended February 28, 2009 and for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of February 28, 2009, by correspondence with the custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Advisor Short Fixed-Income Fund as of February 28, 2009, the results of its operations for the six months then ended, the changes in its net assets for the six months ended February 28, 2009 and for the year ended August 31, 2008, and the financial highlights for the six months ended February 28, 2009 and for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP

Boston, Massachusetts

May 8, 2009

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Research & Analysis Company

Fidelity Investments Money
Management, Inc.

FIL Investment Advisors

FIL Investment Advisors (U.K.) Ltd.

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA

Fidelity Service Company, Inc.
Boston, MA

Custodian

The Bank of New York Mellon
New York, NY

SFI-USAN-0409
1.784905.106

(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Short Fixed-Income
Fund - Institutional Class

Semiannual Report

February 28, 2009

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message	<Click Here>	Ned Johnson's message to shareholders.
Shareholder Expense Example	<Click Here>	An example of shareholder expenses.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.
Report of Independent Registered Public Accounting Firm	<Click Here>

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (search for "proxy voting guidelines") or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

The stresses on the world's capital markets have shown few signs of abating thus far in 2009. Although government programs may eventually rekindle economic growth, corporate earnings are still weaker than we would like to see them, and the valuations of many securities remain at historically low levels. While financial markets are always unpredictable, there are a number of time-tested principles that can put the historical odds in your favor.

One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.

You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).

A third investment principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces unconstructive "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.

We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2008 to February 28, 2009).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that in the underlying Fidelity Central Funds, will indirectly bear its pro appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholderrata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio	Beginning Account Value September 1, 2008	Ending Account Value February 28, 2009	Expenses Paid During Period* September 1, 2008 to February 28, 2009
Class A	.79%
Actual		$ 1,000.00	$ 981.10	$ 3.88
HypotheticalA		$ 1,000.00	$ 1,020.88	$ 3.96
Class T	.77%
Actual		$ 1,000.00	$ 981.20	$ 3.78
HypotheticalA		$ 1,000.00	$ 1,020.98	$ 3.86
Class B	1.55%
Actual		$ 1,000.00	$ 972.90	$ 7.58
HypotheticalA		$ 1,000.00	$ 1,017.11	$ 7.75
Class C	1.60%
Actual		$ 1,000.00	$ 976.10	$ 7.84
HypotheticalA		$ 1,000.00	$ 1,016.86	$ 8.00
Institutional Class	.54%
Actual		$ 1,000.00	$ 985.70	$ 2.66
HypotheticalA		$ 1,000.00	$ 1,022.12	$ 2.71

^A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.

Semiannual Report

Investment Changes (Unaudited)

The information in the following table is based on the combined investments of the Fund and its pro-rata share of the investments in each non-money market Fidelity Central Fund.

Quality Diversification (% of fund's net assets)
As of February 28, 2009		As of August 31, 2008
	U.S. Government and U.S. Government Agency Obligations†† 68.7%		U.S. Government and U.S. Government Agency Obligations 53.4%
	AAA 8.7%		AAA 12.6%
	AA 4.4%		AA 4.9%
	A 6.9%		A 7.8%
	BBB 9.8%		BBB 13.4%
	BB and Below 1.3%		BB and Below 0.8%
	Not Rated 0.3%		Not Rated 0.3%
	Short-Term Investments and Net Other Assets † (0.1)%		Short-Term Investments and Net Other Assets 6.8%

We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades.

Weighted Average Maturity as of February 28, 2009
		6 months ago
Years	2.3	1.8

The weighted average maturity is based on the dollar-weighted average length of time until principal payments are expected or until securities reach maturity, taking into account any maturity shortening feature such as a call, refunding or redemption provision.

Duration as of February 28, 2009
		6 months ago
Years	1.7	1.6

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)
As of February 28, 2009*			As of August 31, 2008**
	Corporate Bonds 14.8%			Corporate Bonds 16.5%
	U.S. Government and U.S. Government Agency Obligations†† 68.7%			U.S. Government and U.S. Government Agency Obligations 53.4%
	Asset-Backed Securities 9.3%			Asset-Backed Securities 13.1%
	CMOs and Other Mortgage Related Securities 7.3%			CMOs and Other Mortgage Related Securities 10.2%
	Short-Term Investments and Net Other Assets† (0.1)%			Short-Term Investments and Net Other Assets 6.8%
* Foreign investments		4.4%	** Foreign investments		6.4%
* Futures and Swaps		8.1%	** Futures and Swaps		16.1%

^† Short-Term Investments and Net Other Assets are not included in the pie chart.

^†† Includes FDIC Guaranteed Corporate Securities

A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com.

Semiannual Report

Investments February 28, 2009

Showing Percentage of Net Assets

Nonconvertible Bonds - 14.8%
	Principal Amount		Value
CONSUMER DISCRETIONARY - 1.1%
Auto Components - 0.4%
DaimlerChrysler NA Holding Corp. 5.75% 8/10/09	$ 4,820,000		$ 4,786,877
Media - 0.7%
AOL Time Warner, Inc. 6.75% 4/15/11	1,000,000		1,014,834
Comcast Cable Communications, Inc. 6.75% 1/30/11	2,645,000		2,740,725
Comcast Corp. 5.85% 1/15/10	2,000,000		2,024,738
Time Warner Cable, Inc. 5.4% 7/2/12	1,245,000		1,197,806
Viacom, Inc. 5.75% 4/30/11	860,000		833,955
			7,812,058
TOTAL CONSUMER DISCRETIONARY			12,598,935
CONSUMER STAPLES - 0.2%
Food Products - 0.2%
Kraft Foods, Inc. 5.625% 8/11/10	2,810,000		2,886,997
ENERGY - 1.2%
Oil, Gas & Consumable Fuels - 1.2%
Canadian Oil Sands Ltd. 4.8% 8/10/09 (e)	1,865,000		1,854,312
Chevron Corp. 3.45% 3/3/12	3,121,000		3,128,703
Delek & Avner-Yam Tethys Ltd. 5.326% 8/1/13 (e)	2,092,117		1,956,925
Duke Capital LLC:
4.37% 3/1/09	2,045,000		2,045,000
7.5% 10/1/09	1,525,000		1,553,783
Enterprise Products Operating LP 4.625% 10/15/09	3,070,000		3,054,963
Petroleum Export Ltd.:
4.623% 6/15/10 (e)	505,000		467,600
4.633% 6/15/10 (e)	303,333		280,890
			14,342,176
FINANCIALS - 5.1%
Capital Markets - 1.0%
Bear Stearns Companies, Inc.:
3.25% 3/25/09	1,565,000		1,565,059
5.85% 7/19/10	4,015,000		4,049,401
Credit Suisse USA, Inc. 0.5275% 6/5/09 (j)	2,875,000		2,852,630
Janus Capital Group, Inc. 6.125% 9/15/11	955,000		668,353
Morgan Stanley:
5.05% 1/21/11	1,283,000		1,265,310
6.75% 4/15/11	1,695,000		1,701,946
			12,102,699
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Commercial Banks - 1.6%
American Express Bank FSB 0.5369% 4/26/10 (j)	$ 1,576,000		$ 1,470,025
Bank of America NA 1.8219% 5/12/10 (j)	2,350,000		2,295,957
Bank One Corp. 7.875% 8/1/10	885,000		913,184
Chase Manhattan Corp. 7.875% 6/15/10	1,990,000		2,036,705
DBS Bank Ltd. (Singapore) 1.4544% 5/16/17 (e)(j)	147,614		116,615
HSBC Holdings PLC:
1.6125% 10/6/16 (j)	145,000		116,276
7.5% 7/15/09	1,215,000		1,220,458
Korea Development Bank 3.875% 3/2/09	1,600,000		1,600,000
Manufacturers & Traders Trust Co. 2.935% 4/1/13 (e)(j)	91,476		76,528
National Australia Bank Ltd. 8.6% 5/19/10	1,260,000		1,299,851
Santander Issuances SA Unipersonal 1.885% 6/20/16 (e)(j)	442,865		333,450
Sovereign Bank 2.88% 8/1/13 (j)	207,598		154,820
US Bancorp 4.5% 7/29/10	1,120,000		1,131,342
Wachovia Corp. 1.2244% 10/15/11 (j)	1,598,000		1,417,824
Wells Fargo & Co. 3.98% 10/29/10	5,710,000		5,555,636
			19,738,671
Consumer Finance - 0.8%
Capital One Financial Corp. 2.4694% 9/10/09 (j)	1,576,000		1,517,447
Household Finance Corp.:
4.125% 11/16/09	2,280,000		2,261,117
4.75% 5/15/09	1,563,000		1,565,012
MBNA Capital I 8.278% 12/1/26	1,200,000		660,000
Nelnet, Inc.:
5.125% 6/1/10	550,000		333,398
7.4% 9/29/36 (j)	2,860,000		429,000
Nissan Motor Acceptance Corp. 4.625% 3/8/10 (e)	2,090,000		1,963,674
Systems 2001 Asset Trust LLC 7.156% 12/15/11 (e)	638,108		543,058
			9,272,706
Diversified Financial Services - 0.6%
Bank of America Corp.:
4.375% 12/1/10	859,000		799,845
7.4% 1/15/11	275,000		255,305
7.8% 2/15/10	522,000		495,783
BTM Curacao Holding NV 1.8975% 12/19/16 (e)(j)	239,868		185,359
Citigroup Funding, Inc. 0.4731% 4/23/09 (j)	1,125,000		1,111,368
Citigroup, Inc. 1.3356% 5/18/11 (j)	1,200,000		1,003,985
Iberbond 2004 PLC 4.826% 12/24/17 (m)	2,198,532		1,780,811
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Diversified Financial Services - continued
ICB OJSC 6.2% 9/29/15 (Issued by Or-ICB for ICB OJSC) (j)	$ 270,000		$ 146,679
JPMorgan Chase & Co. 4.891% 9/1/15 (j)	2,440,000		1,959,647
			7,738,782
Insurance - 0.2%
Metropolitan Life Global Funding I 2.2163% 6/25/10 (e)(j)	2,105,000		1,999,540
Real Estate Investment Trusts - 0.7%
Brandywine Operating Partnership LP 5.625% 12/15/10	2,910,000		2,570,505
Colonial Properties Trust 4.75% 2/1/10	1,245,000		1,190,434
Developers Diversified Realty Corp. 5% 5/3/10	1,310,000		917,000
Duke Realty LP:
5.25% 1/15/10	615,000		586,364
5.625% 8/15/11	915,000		779,586
6.95% 3/15/11	719,000		636,178
Mack-Cali Realty LP 7.25% 3/15/09	520,000		519,077
Simon Property Group LP 4.6% 6/15/10	1,130,000		1,082,496
			8,281,640
Thrifts & Mortgage Finance - 0.2%
Countrywide Home Loans, Inc. 4.125% 9/15/09	1,163,000		1,152,317
Independence Community Bank Corp. 3.585% 6/20/13 (j)	1,123,347		808,810
			1,961,127
TOTAL FINANCIALS			61,095,165
HEALTH CARE - 0.3%
Health Care Providers & Services - 0.2%
UnitedHealth Group, Inc.:
4.125% 8/15/09	675,000		675,128
5.125% 11/15/10	1,643,000		1,619,388
			2,294,516
Pharmaceuticals - 0.1%
Roche Holdings, Inc. 4.5% 3/1/12 (e)	1,600,000		1,626,298
TOTAL HEALTH CARE			3,920,814
Nonconvertible Bonds - continued
	Principal Amount		Value
INDUSTRIALS - 1.7%
Aerospace & Defense - 0.2%
BAE Systems Holdings, Inc. 4.75% 8/15/10 (e)	$ 2,600,000		$ 2,593,872
Air Freight & Logistics - 0.3%
FedEx Corp. 5.5% 8/15/09	3,900,000		3,934,468
Airlines - 0.5%
American Airlines, Inc. pass-thru trust certificates:
6.855% 10/15/10	110,680		109,020
6.978% 10/1/12	46,555		43,063
7.024% 4/15/11	2,000,000		1,940,000
Continental Airlines, Inc. 7.056% 3/15/11	749,000		726,530
Delta Air Lines, Inc. pass-thru trust certificates 7.57% 11/18/10	1,645,000		1,505,175
United Air Lines, Inc. pass-thru trust certificates:
6.071% 9/1/14	266,743		258,740
6.201% 3/1/10	216,822		204,897
6.602% 9/1/13	525,364		496,469
7.186% 10/1/12	651,521		623,832
			5,907,726
Building Products - 0.0%
Masco Corp. 2.3988% 3/12/10 (j)	338,969		304,104
Commercial Services & Supplies - 0.3%
R.R. Donnelley & Sons Co.:
3.75% 4/1/09	1,265,000		1,260,597
5.625% 1/15/12	3,030,000		2,671,536
			3,932,133
Industrial Conglomerates - 0.4%
Covidien International Finance SA 5.15% 10/15/10	2,900,000		2,969,385
Hutchison Whampoa International (03/33) Ltd. 5.45% 11/24/10 (e)	980,000		1,005,200
			3,974,585
TOTAL INDUSTRIALS			20,646,888
INFORMATION TECHNOLOGY - 0.2%
Computers & Peripherals - 0.2%
Hewlett-Packard Co. 4.25% 2/24/12	1,820,000		1,842,512
Semiconductors & Semiconductor Equipment - 0.0%
National Semiconductor Corp. 2.2463% 6/15/10 (j)	393,509		341,842
TOTAL INFORMATION TECHNOLOGY			2,184,354
Nonconvertible Bonds - continued
	Principal Amount		Value
TELECOMMUNICATION SERVICES - 2.9%
Diversified Telecommunication Services - 2.1%
Ameritech Capital Funding Corp. 6.25% 5/18/09	$ 1,765,000		$ 1,775,611
BellSouth Corp. 4.2% 9/15/09	1,775,000		1,795,610
Deutsche Telekom International Financial BV 5.375% 3/23/11	4,000,000		4,086,044
SBC Communications, Inc. 5.875% 2/1/12	486,000		502,184
Telecom Italia Capital SA 4% 1/15/10	4,770,000		4,687,116
Telefonica Emisiones SAU 5.984% 6/20/11	4,000,000		4,137,596
Telefonos de Mexico SA de CV 4.75% 1/27/10	2,455,000		2,479,550
Verizon Global Funding Corp. 7.25% 12/1/10	3,435,000		3,627,374
Verizon New England, Inc. 6.5% 9/15/11	1,475,000		1,516,793
			24,607,878
Wireless Telecommunication Services - 0.8%
America Movil SAB de CV 4.125% 3/1/09	3,925,000		3,925,000
Verizon Wireless Capital LLC 5.25% 2/1/12 (e)	1,252,000		1,234,202
Vodafone Group PLC:
5.5% 6/15/11	3,380,000		3,427,641
7.75% 2/15/10	950,000		987,376
			9,574,219
TOTAL TELECOMMUNICATION SERVICES			34,182,097
UTILITIES - 2.1%
Electric Utilities - 1.1%
Commonwealth Edison Co. 5.4% 12/15/11	992,000		1,008,844
Entergy Corp. 7.75% 12/15/09 (e)	2,500,000		2,396,203
Exelon Corp. 4.45% 6/15/10	3,750,000		3,713,591
Pepco Holdings, Inc. 4% 5/15/10	1,125,000		1,099,451
Progress Energy, Inc. 7.1% 3/1/11	2,181,000		2,240,266
Southern Co. 1.9513% 8/20/10 (j)	2,505,000		2,441,123
			12,899,478
Independent Power Producers & Energy Traders - 0.4%
Constellation Energy Group, Inc. 6.125% 9/1/09	3,035,000		3,036,942
PSEG Power LLC 3.75% 4/1/09	1,415,000		1,415,218
			4,452,160
Multi-Utilities - 0.6%
Dominion Resources, Inc.:
2.9213% 6/17/10 (j)	1,505,000		1,459,585
6.3% 9/30/66 (j)	1,680,000		991,200
DTE Energy Co. 7.05% 6/1/11	1,600,000		1,614,946
Nonconvertible Bonds - continued
	Principal Amount		Value
UTILITIES - continued
Multi-Utilities - continued
KeySpan Corp. 7.625% 11/15/10	$ 790,000		$ 823,415
NiSource Finance Corp. 7.875% 11/15/10	780,000		763,912
NSTAR 8% 2/15/10	715,000		743,078
Sempra Energy 4.75% 5/15/09	1,055,000		1,055,093
			7,451,229
TOTAL UTILITIES			24,802,867
TOTAL NONCONVERTIBLE BONDS (Cost $184,306,366)		176,660,293
U.S. Government and Government Agency Obligations - 58.0%
U.S. Government Agency Obligations - 18.9%
Fannie Mae:
0% 9/25/09	14,920,000		14,869,391
1.75% 3/23/11	31,250,000		31,295,938
2% 1/9/12	23,230,000		23,333,699
2.75% 2/5/14	3,063,000		3,061,919
3% 7/12/10	53,000,000		54,110,774
3.625% 8/15/11	12,000,000		12,599,448
Freddie Mac:
1.5% 1/7/11	75,303,000		75,235,980
2.125% 3/23/12	12,185,000		12,175,106
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			226,682,255
U.S. Treasury Obligations - 38.0%
U.S. Treasury Notes:
0.875% 1/31/11 (d)(n)	161,691,000		161,343,002
0.875% 2/28/11 (n)	21,384,000		21,314,107
1.125% 12/15/11	68,378,000		68,020,110
1.25% 11/30/10	63,447,000		63,744,566
1.375% 2/15/12	12,000,000		11,987,760
1.75% 11/15/11	11,568,000		11,705,428
4.625% 8/31/11	14,209,000		15,407,884
4.875% 5/31/11 (g)(h)	86,098,000		93,275,043
4.875% 7/31/11	6,861,000		7,468,308
TOTAL U.S. TREASURY OBLIGATIONS			454,266,208
U.S. Government and Government Agency Obligations - continued
	Principal Amount		Value
Other Government Related - 1.1%
Bank of America Corp. 1.4744% 4/30/12 (FDIC Guaranteed) (f)(j)	$ 1,000,000		$ 1,004,479
Goldman Sachs Group, Inc.:
1.4913% 11/9/11 (FDIC Guaranteed) (f)(j)	4,220,000		4,214,311
1.625% 7/15/11 (FDIC Guaranteed) (f)	2,120,000		2,109,470
JPMorgan Chase & Co. 1.65% 2/23/11 (FDIC Guaranteed) (f)	4,010,000		4,011,091
Morgan Stanley 3.25% 12/1/11 (FDIC Guaranteed) (f)	2,140,000		2,206,135
TOTAL OTHER GOVERNMENT RELATED			13,545,486
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $690,381,662)		694,493,949
U.S. Government Agency - Mortgage Securities - 8.0%
Fannie Mae - 6.6%
4.082% 6/1/35 (j)	251,976		253,566
4.175% 5/1/35 (j)	1,100,695		1,105,259
4.263% 7/1/35 (j)	213,801		215,895
4.291% 5/1/33 (j)	25,872		26,084
4.303% 3/1/33 (j)	54,501		55,400
4.318% 7/1/35 (j)	338,552		341,961
4.331% 2/1/35 (j)	391,353		393,904
4.34% 1/1/35 (j)	125,926		128,011
4.361% 10/1/37 (j)	694,042		707,302
4.376% 2/1/35 (j)	912,424		926,660
4.38% 7/1/33 (j)	642,775		653,808
4.405% 8/1/35 (j)	186,021		187,568
4.423% 5/1/35 (j)	64,309		65,250
4.43% 6/1/35 (j)	651,121		658,051
4.432% 3/1/35 (j)	182,064		185,008
4.455% 2/1/35 (j)	1,295,780		1,314,087
4.456% 7/1/35 (j)	3,213,080		3,197,563
4.487% 10/1/33 (j)	968,055		968,389
4.548% 10/1/33 (j)	82,508		83,306
4.55% 10/1/35 (j)	1,506,202		1,525,812
4.552% 5/1/35 (j)	1,955,206		1,992,200
4.562% 6/1/33 (j)	1,142,178		1,167,042
4.576% 7/1/35 (j)	1,740,987		1,774,526
4.6% 10/1/33 (j)	89,527		89,761
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
4.649% 10/1/35 (j)	$ 233,098		$ 235,205
4.667% 7/1/35 (j)	385,783		393,160
4.686% 10/1/34 (j)	576,981		581,742
4.688% 7/1/35 (j)	561,349		572,465
4.701% 11/1/35 (j)	738,331		755,604
4.739% 8/1/35 (j)	643,955		653,545
4.742% 12/1/34 (j)	98,409		99,521
4.747% 4/1/35 (j)	39,034		39,663
4.77% 7/1/35 (j)	5,996,258		6,126,536
4.784% 8/1/35 (j)	309,115		316,268
4.785% 2/1/36 (j)	1,867,869		1,912,129
4.792% 1/1/35 (j)	74,678		75,765
4.806% 11/1/34 (j)	294,241		297,976
4.81% 2/1/36 (j)	123,014		124,829
4.853% 1/1/35 (j)	673,957		684,228
4.893% 2/1/36 (j)	9,015,167		9,217,143
4.919% 7/1/35 (j)	1,304,613		1,333,585
4.935% 7/1/34 (j)	392,168		399,296
4.98% 5/1/35 (j)	299,565		301,715
4.987% 7/1/35 (j)	6,497,213		6,609,517
5% 3/1/18 to 6/1/18	1,986,940		2,057,800
5.003% 9/1/34 (j)	1,436,931		1,455,558
5.042% 3/1/37 (j)	677,554		689,549
5.053% 7/1/35 (j)	1,574,838		1,612,112
5.089% 9/1/34 (j)	109,536		110,755
5.125% 5/1/36 (j)	610,501		623,667
5.141% 5/1/35 (j)	73,383		74,861
5.156% 9/1/35 (j)	3,631,459		3,726,306
5.157% 9/1/35 (j)	2,081,588		2,136,031
5.16% 10/1/18 (j)	44,697		45,245
5.185% 3/1/35 (j)	60,870		61,963
5.193% 6/1/35 (j)	400,396		403,903
5.198% 3/1/35 (j)	65,977		66,299
5.331% 10/1/35 (j)	387,705		398,744
5.379% 11/1/35 (j)	567,381		584,961
5.496% 2/1/35 (j)	20,437		20,629
5.5% 7/1/13 to 6/1/19	7,460,282		7,777,481
5.51% 11/1/36 (j)	687,712		700,792
5.557% 5/1/36 (j)	1,634,326		1,697,950
6.192% 2/1/35 (j)	60,253		61,287
6.5% 6/1/11 to 3/1/35	5,261,462		5,538,233
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
7% 1/1/16 to 6/1/32	$ 519,547		$ 551,895
7.5% 5/1/12 to 10/1/14	50,284		53,059
11.5% 11/1/15	15,443		16,073
TOTAL FANNIE MAE			79,211,458
Freddie Mac - 1.3%
3.456% 2/1/34 (j)	99,766		99,662
3.883% 1/1/35 (j)	210,703		212,476
4.275% 6/1/35 (j)	176,565		179,080
4.315% 12/1/34 (j)	145,811		148,172
4.361% 2/1/35 (j)	171,124		173,444
4.407% 3/1/35 (j)	180,340		182,977
4.422% 4/1/35 (j)	921,618		935,291
4.471% 3/1/35 (j)	155,611		157,901
4.481% 4/1/35 (j)	710,925		724,845
4.522% 2/1/35 (j)	296,889		301,707
4.592% 1/1/35 (j)	1,805,427		1,840,607
4.62% 2/1/35 (j)	126,616		128,385
4.696% 11/1/35 (j)	1,239,046		1,269,868
4.705% 12/1/35 (j)	846,056		849,998
4.745% 4/1/35 (j)	1,094,771		1,114,376
4.777% 4/1/35 (j)	628,183		633,558
4.84% 11/1/35 (j)	609,130		618,702
4.921% 9/1/35 (j)	710,036		727,295
4.976% 4/1/35 (j)	1,193,215		1,205,459
5.117% 1/1/36 (j)	565,133		574,685
5.282% 8/1/36 (j)	428,829		440,929
5.288% 3/1/35 (j)	105,722		106,296
5.294% 6/1/35 (j)	407,657		417,244
5.333% 8/1/34 (j)	268,879		272,529
5.353% 6/1/37 (j)	779,147		799,739
5.526% 2/1/35 (j)	190,567		191,616
5.576% 5/1/36 (j)	1,570,708		1,625,645
8.5% 5/1/26 to 7/1/28	133,892		143,599
12% 11/1/19	8,156		9,026
TOTAL FREDDIE MAC			16,085,111
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Government National Mortgage Association - 0.1%
4.25% 7/20/34 (j)	$ 304,253		$ 305,385
7% 1/15/25 to 6/15/32	577,184		613,962
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			919,347
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $94,438,099)		96,215,916
Asset-Backed Securities - 9.2%
Accredited Mortgage Loan Trust:
Series 2003-3 Class A1, 4.46% 1/25/34	584,781		330,767
Series 2004-4 Class A2D, 0.8238% 1/25/35 (j)	163,029		58,104
Series 2005-1 Class M1, 0.9438% 4/25/35 (j)	236,650		139,592
ACE Securities Corp. Series 2006-NC2:
Class M7, 1.2238% 7/25/36 (j)	105,883		815
Class M8, 1.3238% 7/25/36 (j)	52,466		278
Class M9, 2.1738% 7/25/36 (j)	34,668		121
ACE Securities Corp. Home Equity Loan Trust:
Series 2003-HE1 Class M1, 1.4488% 11/25/33 (j)	405,273		211,077
Series 2003-HS1:
Class M1, 1.5988% 6/25/33 (j)	35		35
Class M2, 3.0988% 6/25/33 (j)	15,790		10,976
Series 2004-HE1 Class M1, 0.9738% 2/25/34 (j)	37,690		33,376
Series 2004-OP1 Class M1, 0.9938% 4/25/34 (j)	78,904		34,345
Series 2005-HE2 Class M2, 0.9238% 4/25/35 (j)	33,286		27,263
Series 2005-SD1 Class A1, 0.8738% 11/25/50 (j)	4,372		3,981
Series 2006-HE2:
Class M3, 0.8138% 5/25/36 (j)	46,008		1,417
Class M4, 0.8738% 5/25/36 (j)	38,880		820
Class M5, 0.9138% 5/25/36 (j)	56,527		882
Series 2006-OP1:
Class M4, 0.8438% 4/25/36 (j)	21,600		883
Class M5, 0.8638% 4/25/36 (j)	20,520		704
Advanta Business Card Master Trust:
Series 2006-C1 Class C1, 0.95% 10/20/14 (j)	151,049		10,573
Series 2007-A4 Class A4, 0.5% 4/22/13 (j)	553,586		409,654
Series 2007-B1 Class B, 0.72% 12/22/14 (j)	319,702		47,955
ALG Student Loan Trust I Series 2006-1 Class A1, 1.1938% 10/28/18 (e)(j)	124,070		122,383
American Express Credit Account Master Trust Series 2004-C Class C, 0.9613% 2/15/12 (e)(j)	163,986		148,869
Asset-Backed Securities - continued
	Principal Amount		Value
AmeriCredit Automobile Receivables Trust:
Series 2005-1:
Class C, 4.73% 7/6/10	$ 71,741		$ 71,248
Class D, 5.04% 5/6/11	2,500,000		2,383,137
Series 2005-DA Class A4, 5.02% 11/6/12	2,060,000		1,809,291
Series 2006-1 Class D, 5.49% 4/6/12	1,115,000		816,830
AmeriCredit Prime Automobile Receivables Trust Series 2007-2M Class A3, 5.22% 4/8/10	1,240,000		1,096,537
Ameriquest Mortgage Securities, Inc. Series 2006-M3 Class M7, 1.3238% 10/25/36 (j)	22,705		14
Ameriquest Mortgage Securities, Inc. pass-thru certificates:
Series 2003-10 Class M1, 1.1738% 12/25/33 (j)	20,599		13,036
Series 2004-R10 Class M1, 1.1738% 11/25/34 (j)	1,456,076		648,583
Series 2004-R11 Class M1, 1.1338% 11/25/34 (j)	1,922,989		943,719
Series 2004-R2:
Class M1, 0.9038% 4/25/34 (j)	32,573		24,847
Class M3, 1.0238% 4/25/34 (j)	21,351		8,132
Series 2004-R9 Class M2, 1.1238% 10/25/34 (j)	1,515,000		613,322
Series 2005-R1 Class M1, 0.9238% 3/25/35 (j)	119,578		69,702
Series 2005-R10 Class A2B, 0.6938% 12/25/35 (j)	108,461		74,358
Series 2005-R2 Class M1, 0.9238% 4/25/35 (j)	262,030		150,865
Amortizing Residential Collateral Trust Series 2002-BC3 Class A, 0.8038% 6/25/32 (j)	113,964		57,102
Argent Securities, Inc.:
Series 2006-M1 Class M7, 1.4738% 7/25/36 (j)	96,031		259
Series 2006-M2 Class M7, 1.3738% 9/25/36 (j)	87,785		79
Argent Securities, Inc. pass-thru certificates:
Series 2003-W7:
Class A2, 0.7794% 3/1/34 (j)	82,560		16,706
Class M1, 1.0794% 3/1/34 (j)	2,500,000		1,293,406
Series 2003-W9 Class M1, 1.1638% 3/25/34 (j)	1,544,402		671,126
Series 2004-W11 Class M2, 1.1738% 11/25/34 (j)	71,215		26,407
Series 2004-W5 Class M1, 1.0738% 4/25/34 (j)	916,184		539,274
Series 2004-W7:
Class M1, 1.0238% 5/25/34 (j)	75,384		23,833
Class M2, 1.0738% 5/25/34 (j)	65,880		35,597
Series 2006-W4 Class A2C, 0.6338% 5/25/36 (j)	196,970		69,309
Asset Backed Funding Corp. Series 2006-OPT2 Class M7, 1.2538% 10/25/36 (j)	165,348		2,067
Asset Backed Funding Corp. Trust Series 2005-HE1 Class M1, 0.8938% 12/25/34 (j)	182,004		88,167
Asset-Backed Securities - continued
	Principal Amount		Value
Asset Backed Securities Corp. Home Equity Loan Trust:
Series 2003-HE3 Class M1, 1.7063% 6/15/33 (j)	$ 30,965		$ 13,778
Series 2003-HE6 Class M1, 1.1238% 11/25/33 (j)	68,083		35,447
Series 2004-HE2 Class M1, 1.0238% 4/25/34 (j)	338,688		146,758
Series 2004-HE3:
Class M1, 1.0138% 6/25/34 (j)	29,981		11,866
Class M2, 1.5938% 6/25/34 (j)	586,766		367,340
Series 2004-HE6 Class A2, 0.8338% 6/25/34 (j)	622,485		239,936
Series 2006-HE6:
Class M7, 1.2738% 11/25/36 (j)	52,272		643
Class M9, 2.6238% 11/25/36 (j)	139,644		712
Axon Financial Funding Ltd. Series 2007-1A Class A1, 5.96% 4/4/17 (b)(e)(j)	432,000		0
Bank of America Credit Card Master Trust Series 2006-HE7 Class B4, 0.535% 3/15/12 (j)	435,758		391,774
Bayview Financial Acquisition Trust Series 2004-C Class A1, 1.0388% 5/28/44 (j)	499,567		303,695
Bayview Financial Mortgage Loan Trust Series 2004-A Class A, 1.0838% 2/28/44 (j)	449,521		279,476
Bear Stearns Asset Backed Securities I Trust:
Series 2004-HE8 Class M1, 1.1238% 9/25/34 (j)	906,926		153,973
Series 2005-3 Class A1, 0.9238% 9/25/35 (j)	13,852		10,103
Series 2005-FR1 Class M1, 0.9738% 6/25/35 (j)	122,904		55,837
Series 2005-HE2 Class M1, 0.9738% 2/25/35 (j)	193,704		64,168
Series 2007-HE3 Class 1A1, 0.5938% 4/25/37 (j)	554,923		424,649
Brazos Higher Education Authority, Inc. Student Loan Rev. Series 2006 A2R, 5.03% 12/1/41	2,370,000		2,227,800
Brazos Higher Education Authority, Inc. Series 2006-2 Class A9, 1.4763% 12/26/24 (j)	291,525		260,638
C-BASS Trust Series 2006-CB7 Class A2, 0.5338% 10/25/36 (j)	62,720		53,946
Capital Auto Receivables Asset Trust:
Series 2005-1 Class B, 0.83% 6/15/10 (j)	897,623		884,159
Series 2006-1 Class B, 5.26% 10/15/10	500,000		492,404
Series 2007-1 Class B, 5.15% 9/17/12	1,085,000		775,266
Series 2007-SN1 Class D, 6.05% 1/17/12	750,000		375,000
Capital One Auto Finance Trust:
Series 2005-BSS Class D, 4.8% 9/15/12	1,220,000		1,173,352
Series 2006-C Class A3B, 0.465% 7/15/11 (j)	48,436		45,068
Capital One Multi-Asset Execution Trust:
Series 2007-A6 Class A6, 0.525% 5/15/13 (j)	1,040,000		986,791
Series 2007-B5 Class B5, 5.4% 5/15/13	3,410,000		2,783,357
Series 2007-C3 Class C3, 0.745% 4/15/13 (e)(j)	369,058		265,659
Asset-Backed Securities - continued
	Principal Amount		Value
Capital One Prime Auto Receivables Trust:
Series 2005-1 Class B, 4.58% 8/15/12	$ 1,850,000		$ 1,621,092
Series 2007-1 Class B1, 5.76% 12/15/13	1,060,000		854,460
Capital Trust Ltd. Series 2004-1:
Class A2, 0.92% 7/20/39 (e)(j)	703,061		175,765
Class B, 1.22% 7/20/39 (e)(j)	373,480		52,287
Class C, 1.57% 7/20/39 (e)(j)	478,070		43,026
Carmax Auto Owner Trust:
Series 2006-1 Class C, 5.76% 11/15/12	6,935,000		5,797,343
Series 2006-2 Class C, 5.53% 3/15/13	1,070,000		874,056
Carrington Mortgage Loan Trust:
Series 2006-FRE1 Class M1, 0.7738% 7/25/36 (j)	144,785		6,964
Series 2006-NC2 Class M7, 1.3238% 6/25/36 (j)	54,000		1,080
Series 2006-RFC1 Class M9, 2.3438% 5/25/36 (j)	23,652		641
Series 2007-RFC1 Class A3, 0.6138% 12/25/36 (j)	228,766		55,380
Cendant Timeshare Receivables Funding LLC Series 2005 1A Class 2A2, 0.65% 5/20/17 (e)(j)	34,619		25,090
Chase Issuance Trust:
Series 2004-3 Class C, 0.9313% 6/15/12 (j)	67,349		60,710
Series 2006-3 Class C, 0.6913% 6/15/11 (j)	2,905,000		2,822,389
CIT Equipment Collateral Trust:
Series 2006-VT1:
Class B, 5.23% 2/20/13	113,396		111,714
Class D, 5.48% 2/20/13	126,272		114,493
Series 2006-VT2:
Class A3, 5.07% 2/20/10	982,763		981,743
Class D, 5.46% 4/20/14	43,297		21,649
Citibank Credit Card Issuance Trust:
Series 2007-B2 Class B2, 5% 4/2/12	4,320,000		3,824,505
Series 2007-B6 Class B6, 5% 11/8/12	3,410,000		2,830,300
Citigroup Mortgage Loan Trust:
Series 2003-HE4 Class A, 0.8838% 12/25/33 (e)(j)	613,025		416,147
Series 2006-AMC1 Class M7, 0.82% 9/25/36 (j)	96,012		1,152
Series 2007-AMC4 Class M1, 0.7438% 5/25/37 (j)	97,135		3,730
CNH Equipment Trust:
Series 2005-B Class B, 4.57% 7/16/12	830,000		710,237
Series 2007-A Class A3, 4.98% 10/15/10	754,572		752,983
CNH Wholesale Master Note Trust Series 2006-1A:
Class A, 0.515% 7/15/12 (e)(j)	166,061		163,514
Class B, 0.735% 7/15/12 (e)(j)	166,061		156,615
Countrywide Home Loan Trust Series 2006-13N Class N, 7% 8/25/37 (e)	41,917		4
Asset-Backed Securities - continued
	Principal Amount		Value
Countrywide Home Loans, Inc.:
Series 2002-6 Class AV1, 1.3338% 5/25/33 (j)	$ 6,578		$ 3,590
Series 2004-2 Class 3A4, 0.7238% 7/25/34 (j)	86,799		16,378
Series 2004-3:
Class 3A4, 0.7238% 8/25/34 (j)	364,848		195,263
Class M1, 0.9738% 6/25/34 (j)	83,959		55,248
Class M4, 1.4438% 4/25/34 (j)	20,283		9,610
Series 2004-4:
Class A, 0.8438% 8/25/34 (j)	54,391		25,710
Class M2, 1.0038% 6/25/34 (j)	74,616		49,383
Series 2005-1:
Class M1, 0.8938% 8/25/35 (j)	65,059		46,908
Class MV2, 0.9138% 7/25/35 (j)	179,453		125,164
Series 2005-3 Class MV1, 0.8938% 8/25/35 (j)	314,626		274,257
Series 2005-AB1 Class A2, 0.6838% 8/25/35 (j)	60,254		49,778
CPS Auto Receivables Trust:
Series 2004-D Class A2, 3.86% 12/15/11 (e)	19,350		17,657
Series 2007-C Class A3, 5.45% 5/15/12 (e)	934,994		822,795
Credit Suisse First Boston Mortgage Securities Corp. Series 2005-FIX1 Class A2, 4.31% 5/25/35	581,344		527,206
Discover Card Master Trust I:
Series 2006-1 Class B1, 0.605% 8/16/11 (j)	269,957		267,756
Series 2006-2 Class B1, 0.575% 1/17/12 (j)	369,058		330,751
Series 2007-1 Class B, 0.555% 8/15/12 (j)	369,058		288,372
Diversified REIT Trust Series 2000-1A:
Class A2, 6.971% 3/8/10 (e)	130,996		85,148
Class E, 6.971% 3/8/10 (e)	865,000		259,500
Fannie Mae subordinate REMIC pass-thru certificates Series 2004-T5:
Class AB1, 0.7453% 5/28/35 (j)	159,655		87,804
Class AB3, 0.8983% 5/28/35 (j)	67,441		35,206
Fieldstone Mortgage Investment Corp.:
Series 2004-3 Class M5, 2.6488% 8/25/34 (j)	36,914		9,181
Series 2006-2 Class M1, 0.7838% 7/25/36 (j)	1,430,000		32,461
Series 2006-3 Class 2A3, 0.6338% 11/25/36 (j)	571,298		161,035
First Franklin Mortgage Loan Trust:
Series 2004-FF2 Class M3, 1.2988% 3/25/34 (j)	2,881		1,517
Series 2006-FF12 Class A2, 0.5138% 9/25/36 (j)	61,941		56,722
Series 2006-FF5 Class 2A2, 0.5838% 4/25/36 (j)	296,266		270,666
First Investors Auto Owner Trust Series 2006-A Class A3, 4.93% 2/15/11 (e)	161,033		159,372
Ford Credit Auto Owner Trust:
Series 2006-B Class C, 5.68% 6/15/12	2,040,000		1,326,000
Asset-Backed Securities - continued
	Principal Amount		Value
Ford Credit Auto Owner Trust: - continued
Series 2006-C Class B, 5.3% 6/15/12	$ 750,000		$ 525,000
Series 2007-A:
Class B, 5.6% 10/15/12	490,000		343,000
Class C, 5.8% 2/15/13	775,000		485,717
Ford Credit Floorplan Master Owner Trust:
Series 2006-3 Class B, 0.905% 6/15/11 (j)	256,954		179,868
Series 2006-4 Class B, 1.005% 6/15/13 (j)	98,086		49,464
Fosse Master Issuer PLC Series 2007-1A Class C2, 1.6925% 10/18/54 (e)(j)	785,000		569,455
Franklin Auto Trust Series 2007-1:
Class A4, 5.03% 2/16/15	1,505,000		1,357,102
Class C, 5.43% 2/16/15	1,845,000		1,265,836
Fremont Home Loan Trust:
Series 2004-1:
Class M1, 1.1488% 2/25/34 (j)	102,727		29,276
Class M2, 1.2238% 2/25/34 (j)	165,638		105,934
Series 2004-A Class M1, 1.2988% 1/25/34 (j)	152,428		81,413
Series 2004-D:
Class M4, 1.4238% 11/25/34 (j)	104,293		17,167
Class M5, 1.4738% 11/25/34 (j)	66,415		5,092
Series 2005-A:
Class M1, 0.9038% 1/25/35 (j)	13,258		12,219
Class M2, 0.9338% 1/25/35 (j)	222,826		81,450
Class M3, 0.9638% 1/25/35 (j)	120,398		51,451
Class M4, 1.1538% 1/25/35 (j)	46,138		22,610
Series 2006-3 Class 2A1, 0.5438% 2/25/37 (j)	9,792		9,519
Series 2006-A:
Class M4, 0.8738% 5/25/36 (j)	114,804		1,573
Class M5, 0.9738% 5/25/36 (j)	61,495		763
GCO Education Loan Funding Master Trust II Series 2007-1A Class C1L, 1.6288% 9/25/30 (e)(j)	298,944		201,404
GCO Slims Trust Series 2006-1A, 5.72% 3/1/22 (e)	1,024,950		923,193
GE Business Loan Trust:
Series 2003-1 Class A, 0.8913% 4/15/31 (e)(j)	45,558		28,246
Series 2005-2 Class IO, 0.5242% 9/15/17 (e)(l)	62,751,242		170,263
GE Capital Credit Card Master Note Trust:
Series 2006-1:
Class B, 0.5713% 9/17/12 (j)	112,946		79,062
Class C, 0.7013% 9/17/12 (j)	87,826		57,087
Series 2007-1 Class C, 0.7313% 3/15/13 (j)	602,402		397,585
Series 2007-3 Class B, 5.49% 6/15/13	3,350,000		2,345,000
Asset-Backed Securities - continued
	Principal Amount		Value
Greenpoint Credit LLC Series 2001-1 Class 1A, 0.81% 4/20/32 (j)	$ 190,924		$ 187,568
GSAMP Trust:
Series 2002-HE Class M1, 2.345% 11/20/32 (j)	79,011		38,480
Series 2003-FM1 Class M1, 1.7% 3/20/33 (j)	152,045		92,125
Series 2003-HE2 Class M1, 1.1238% 8/25/33 (j)	253,099		180,670
Series 2004-AR1 Class M1, 1.1238% 6/25/34 (j)	278,359		105,813
Series 2004-FM1 Class M1, 1.4488% 11/25/33 (j)	51,733		27,684
Series 2004-FM2 Class M1, 1.2238% 1/25/34 (j)	133,071		76,587
Series 2004-HE1 Class M1, 1.0238% 5/25/34 (j)	72,885		23,659
Series 2007-HE1 Class M1, 0.7238% 3/25/47 (j)	115,495		5,509
GSR Mortgage Loan Trust:
Series 2004-OPT Class A1, 0.8138% 11/25/34 (j)	2,013		949
Series 2005-MTR1 Class A1, 0.6138% 10/25/35 (j)	359,053		331,735
Series 2006-FM1 Class M3, 0.8238% 4/25/36 (j)	54,734		695
Guggenheim Structured Real Estate Funding Ltd.:
Series 2005-1 Class C, 1.5538% 5/25/30 (e)(j)	1,028,238		462,707
Series 2006-3:
Class B, 0.8738% 9/25/46 (e)(j)	783,117		125,299
Class C, 1.0238% 9/25/46 (e)(j)	1,943,752		233,250
Helios Finance L.P. Series 2007-S1 Class B1, 1.17% 10/20/14 (e)(j)	447,098		228,020
Home Equity Asset Trust:
Series 2002-2 Class A4, 1.2338% 6/25/32 (j)	5,664		1,550
Series 2002-3 Class A5, 1.3538% 2/25/33 (j)	51		11
Series 2003-3:
Class A4, 1.3938% 2/25/33 (j)	493		130
Class M1, 1.7638% 8/25/33 (j)	126,927		57,877
Series 2003-4 Class M1, 1.6738% 10/25/33 (j)	37,583		16,644
Series 2003-5:
Class A2, 1.1738% 12/25/33 (j)	44,160		12,982
Class M1, 1.5238% 12/25/33 (j)	43,448		26,121
Series 2003-7 Class A2, 1.2338% 3/25/34 (j)	4,453		921
Series 2003-8 Class M1, 1.5538% 4/25/34 (j)	690,776		320,394
Series 2004-1 Class M2, 2.1738% 6/25/34 (j)	337,063		219,247
Series 2004-3 Class M2, 2.1738% 8/25/34 (j)	423,139		257,308
Series 2004-7 Class A3, 0.8638% 1/25/35 (j)	78		29
Series 2005-1 Class M1, 0.9038% 5/25/35 (j)	165,529		147,898
Series 2005-3 Class M1, 0.8838% 8/25/35 (j)	113,162		101,154
Series 2005-5 Class 2A2, 0.7238% 11/25/35 (j)	50,664		44,760
Series 2006-1 Class 2A3, 0.6988% 4/25/36 (j)	463,295		319,867
Series 2006-7 Class M4, 0.8538% 1/25/37 (j)	145,584		670
Series 2006-8 Class 2A1, 0.5238% 3/25/37 (j)	35,554		30,833
Asset-Backed Securities - continued
	Principal Amount		Value
Household Home Equity Loan Trust Series 2004-1 Class M, 0.8794% 9/20/33 (j)	$ 35,856		$ 21,808
HSBC Automotive Trust Series 2006-2 Class A4, 5.67% 6/17/13	3,500,000		3,357,784
HSBC Credit Card Master Note Trust I Series 2006-1 Class B, 0.6013% 6/15/12 (j)	285,530		253,599
HSBC Home Equity Loan Trust:
Series 2005-2:
Class M1, 0.8194% 1/20/35 (j)	293,400		155,216
Class M2, 0.8494% 1/20/35 (j)	220,060		107,851
Series 2005-3 Class A1, 0.6194% 1/20/35 (j)	1,242,824		664,968
Series 2006-2:
Class M1, 0.74% 3/20/36 (j)	80,841		42,279
Class M2, 0.76% 3/20/36 (j)	133,676		65,633
Series 2006-3 Class A1V, 0.55% 3/20/36 (j)	88,271		84,194
HSI Asset Securitization Corp. Trust Series 2007-HE1 Class 2A3, 0.6638% 1/25/37 (j)	157,118		47,160
Hyundai Auto Receivables Trust:
Series 2005-A:
Class B, 4.2% 2/15/12	412,569		399,805
Class C, 4.22% 2/15/12	31,307		31,252
Series 2006-B Class C, 5.25% 5/15/13	584,029		533,144
Series 2007-A Class A3A, 5.04% 1/17/12	1,949,281		1,951,599
JPMorgan Auto Receivables Trust Series 2006-A:
Class B, 5.36% 12/15/14 (e)	237,645		227,970
Class C, 5.61% 12/15/14 (e)	857,140		837,934
JPMorgan Mortgage Acquisition Trust Series 2007-CH1:
Class AV4, 0.6038% 11/25/36 (j)	157,766		67,051
Class MV1, 0.7038% 11/25/36 (j)	128,153		13,013
Keycorp Student Loan Trust:
Series 1999-A Class A2, 4.0988% 12/27/09 (j)	140,717		109,287
Series 2006-A Class 2A1, 1.4963% 9/27/21 (j)	95,573		93,045
Lancer Funding Ltd. Series 2006-1A Class A3, 3.1125% 4/6/46 (e)(j)	387,247		3,872
Long Beach Mortgage Loan Trust:
Series 2003-2 Class M1, 1.7038% 6/25/33 (j)	269,366		121,255
Series 2004-2:
Class M1, 1.0038% 6/25/34 (j)	78,883		41,629
Class M2, 1.5538% 6/25/34 (j)	56,076		42,745
Series 2005-WL1 Class M2, 1.0238% 6/25/35 (j)	1,090,000		613,723
Series 2006-9 Class M4, 0.8438% 11/25/36 (j)	46,063		88
Marriott Vacation Club Owner Trust:
Series 2005-2 Class A, 5.25% 10/20/27 (e)	558,839		455,434
Asset-Backed Securities - continued
	Principal Amount		Value
Marriott Vacation Club Owner Trust: - continued
Series 2006-1A:
Class B, 5.827% 4/20/28 (e)	$ 133,506		$ 102,092
Class C, 6.125% 4/20/28 (e)	133,506		96,248
MASTR Asset Backed Securities Trust:
Series 2006-AM3 Class M1, 0.7338% 10/25/36 (j)	57,024		2,076
Series 2006-NC2 Class M7, 1.2238% 9/25/36 (j)	26,819		8
Series 2007-HE1 Class M1, 0.7738% 5/25/37 (j)	99,598		4,173
Merna Reinsurance Ltd. Series 2007-1 Class B, 3.2088% 6/30/12 (e)(j)	1,620,000		1,482,786
Merrill Lynch Mortgage Investors Trust:
Series 2003-HE1 Class M1, 1.1738% 7/25/34 (j)	75,644		48,567
Series 2003-OPT1 Class M1, 1.1238% 7/25/34 (j)	843,220		587,196
Series 2006-FM1 Class A2B, 0.5838% 4/25/37 (j)	330,113		234,042
Series 2006-OPT1 Class A1A, 0.7338% 6/25/35 (j)	215,442		99,204
Morgan Stanley ABS Capital I Trust:
Series 2002-HE3 Class M1, 2.1238% 12/27/32 (j)	5,525		3,199
Series 2003-NC7 Class M1, 1.5238% 6/25/33 (j)	66,856		37,816
Series 2003-NC8 Class M1, 1.5238% 9/25/33 (j)	51,624		29,898
Series 2004-HE6 Class A2, 0.8138% 8/25/34 (j)	138,792		24,075
Series 2004-NC2 Class M1, 1.2988% 12/25/33 (j)	130,741		62,861
Series 2005-HE1 Class M2, 0.9438% 12/25/34 (j)	61,906		29,857
Series 2005-HE2 Class M1, 0.8738% 1/25/35 (j)	56,009		19,102
Series 2005-NC1 Class M1, 0.9138% 1/25/35 (j)	50,738		17,289
Series 2005-NC2 Class B1, 1.6438% 3/25/35 (j)	64,800		31,219
Series 2006-HE3 Class B1, 1.3738% 4/25/36 (j)	28,806		63
Series 2006-HE6 Class A2A, 0.5138% 9/25/36 (j)	515,607		487,216
Series 2006-NC4:
Class M4, 0.8238% 6/25/36 (j)	43,200		449
Class M6, 0.9238% 6/25/36 (j)	21,600		119
Series 2007-HE2 Class A2A, 0.5138% 1/25/37 (j)	14,364		11,593
Series 2007-HE4 Class A2A, 0.5838% 2/25/37 (j)	13,971		9,354
Series 2007-NC3 Class A2A, 0.5338% 5/25/37 (j)	7,589		6,039
Morgan Stanley Dean Witter Capital I Trust:
Series 2001-NC4 Class M1, 1.9738% 1/25/32 (j)	3,344		926
Series 2002-AM3 Class A3, 1.4538% 2/25/33 (j)	93,002		76,027
Series 2002-HE2 Class M1, 1.9738% 8/25/32 (j)	600,534		338,198
Series 2002-NC1 Class M1, 1.6738% 2/25/32 (e)(j)	522,624		299,997
Series 2002-NC3:
Class A3, 1.1538% 8/25/32 (j)	4,374		784
Class M1, 1.5538% 8/25/32 (j)	7,981		3,640
Series 2003-NC1 Class M1, 2.0488% 11/25/32 (j)	436,667		214,787
Asset-Backed Securities - continued
	Principal Amount		Value
Morgan Stanley Home Equity Loans Trust:
Series 2006-3 Class M5, 0.8838% 4/25/36 (j)	$ 43,200		$ 536
Series 2007-2 Class A1, 0.5738% 4/25/37 (j)	82,794		62,881
Morgan Stanley IXIS Real Estate Capital Trust Series 2006-2 Class A1, 0.5238% 11/25/36 (j)	85,242		78,501
National Collegiate Funding LLC Series 2004-GT1 Class IO1, 7.87% 6/25/10 (e)(j)(l)	1,725,000		155,250
National Collegiate Student Loan Trust:
Series 2004-2 Class AIO, 9.75% 10/25/14 (l)	1,790,750		336,607
Series 2005-2 Class AIO, 7.73% 3/25/12 (l)	1,265,000		91,346
Series 2005-GT1 Class AIO, 6.75% 12/25/09 (l)	900,000		50,907
Series 2006-1 Class AIO, 5.5% 4/25/11 (l)	1,410,000		98,700
Series 2006-2 Class AIO, 6% 8/25/11 (l)	700,000		70,000
Series 2006-3:
Class A1, 0.5038% 9/25/19 (j)	159,534		149,811
Class AIO, 7.1% 1/25/12 (l)	5,140,000		750,594
Series 2006-4:
Class A1, 0.5038% 3/25/25 (j)	129,978		115,962
Class AIO, 6.35% 2/27/12 (l)	880,000		119,310
Navistar Financial Corp. Owner Trust Series 2005-A Class A4, 4.43% 1/15/14	1,012,508		978,686
New Century Home Equity Loan Trust:
Series 2003-6 Class M1, 1.5538% 1/25/34 (j)	148,365		82,938
Series 2005-4 Class M2, 0.9838% 9/25/35 (j)	181,094		26,967
Series 2005-D Class M2, 0.9438% 2/25/36 (j)	37,735		2,551
Newcastle CDO VIII Series 2006-8A Class 4, 0.9894% 11/1/52 (e)(j)	1,000,000		120,000
Nomura Home Equity Loan Trust:
Series 2006-AF1 Class A1, 6.032% 10/25/36	193,051		168,256
Series 2006-FM2 Class M7, 1.2738% 7/25/36 (j)	123,336		703
Series 2006-HE2 Class A2, 0.5938% 3/25/36 (j)	105,616		95,592
Northstar Education Finance, Inc., Delaware Series 2005-1 Class A5, 1.9338% 10/30/45 (j)	1,560,078		1,224,661
Ocala Funding LLC:
Series 2005-1A Class A, 1.97% 3/20/10 (e)(j)	71,885		25,160
Series 2006-1A Class A, 1.87% 3/20/11 (e)(j)	149,278		59,711
Option One Mortgage Loan Trust Series 2004-3 Class M3, 1.1238% 11/25/34 (j)	43,654		27,466
Park Place Securities, Inc.:
Series 2004-WCW1:
Class M2, 1.1538% 9/25/34 (j)	415,338		238,318
Class M3, 1.7238% 9/25/34 (j)	797,630		178,715
Class M4, 1.9238% 9/25/34 (j)	1,086,724		114,967
Asset-Backed Securities - continued
	Principal Amount		Value
Park Place Securities, Inc.: - continued
Series 2004-WCW2 Class M3, 1.0238% 7/25/35 (j)	$ 50,846		$ 8,435
Series 2004-WHQ2:
Class A3E, 0.8938% 2/25/35 (j)	176,824		137,232
Class M1, 1.0638% 2/25/35 (j)	147,614		107,979
Series 2004-WWF1:
Class M2, 1.1538% 2/25/35 (j)	204,098		119,815
Class M3, 1.2138% 2/25/35 (j)	25,294		10,185
Class M4, 1.5738% 1/25/35 (j)	1,905,000		275,135
Series 2005-WCH1:
Class M2, 0.9938% 1/25/35 (j)	97,891		55,929
Class M3, 1.0338% 1/25/35 (j)	60,718		23,994
Class M4, 1.3038% 1/25/35 (j)	187,294		28,880
Series 2005-WHQ2:
Class M7, 1.7238% 5/25/35 (j)	913,983		35,751
Class M9, 2.3538% 5/25/35 (j)	75,060		2,164
People's Choice Financial Realty Mortgage Securities Trust Series 2006-1:
Class M4, 0.8338% 9/25/36 (j)	216,432		1,342
Class M5, 0.8638% 9/25/36 (j)	107,892		475
Providian Master Note Trust Series 2006-C1A Class C1, 1.005% 3/16/15 (e)(j)	461,052		198,252
Rental Car Finance Corp. Series 2005-1A Class A2, 4.59% 6/25/11 (e)	1,420,000		852,000
Residential Asset Mortgage Products, Inc. Series 2003-RZ2 Class A1, 3.6% 4/25/33	198,181		178,270
Salomon Brothers Mortgage Securities VII, Inc. Series 2003-HE1 Class A, 1.2738% 4/25/33 (j)	648		117
Santander Drive Auto Receivables Trust Series 2007-1 Class A3, 5.05% 9/15/11	1,083,423		1,060,248
Saxon Asset Securities Trust Series 2004-1 Class M1, 1.2688% 3/25/35 (j)	239,868		114,070
Sierra Receivables Funding Co. Series 2007-1A Class A2, 0.92% 3/20/19 (e)(j)	136,297		102,237
Sierra Timeshare Receivables Fund LLC Series 2006-1A Class A1, 5.84% 5/20/18 (e)	560,122		414,490
SLM Private Credit Student Loan Trust:
Series 2004 B Class A2, 2.1963% 6/15/21 (j)	1,800,000		1,151,271
Series 2004-A:
Class B, 2.5763% 6/15/33 (j)	400,000		196,125
Class C, 2.9463% 6/15/33 (j)	1,181,482		531,667
Series 2004-B Class C, 2.8663% 9/15/33 (j)	1,900,000		475,000
Asset-Backed Securities - continued
	Principal Amount		Value
Sovereign Dealer Floor Plan Master LLC Series 2006-1:
Class B, 0.635% 8/15/11 (e)(j)	$ 219,499		$ 186,574
Class C, 0.835% 8/15/11 (e)(j)	100,094		75,071
Specialty Underwriting & Residential Finance Trust Series 2003-BC3 Class M2, 2.0738% 8/25/34 (j)	29,737		19,327
Structured Asset Investment Loan Trust Series 2004-8 Class M5, 1.6238% 9/25/34 (j)	11,579		4,659
Structured Asset Securities Corp.:
Series 2004-GEL1 Class A, 0.8338% 2/25/34 (j)	17,421		7,698
Series 2006-BC3 Class M7, 1.2738% 10/25/36 (j)	373		0
Series 2007-GEL1 Class A2, 0.6638% 1/25/37 (e)(j)	166,061		48,258
Superior Wholesale Inventory Financing Trust:
Series 2004-A10:
Class A, 0.5613% 9/15/11 (j)	667,440		537,289
Class B, 0.7413% 9/15/11 (j)	499,154		199,662
Series 2007-AE1:
Class A, 0.555% 1/15/12 (j)	124,178		86,925
Class B, 0.755% 1/15/12 (j)	108,043		43,217
Class C, 1.055% 1/15/12 (j)	134,266		40,280
Superior Wholesale Inventory Financing Trust VII Series 2003-A8 Class CTFS, 0.9113% 3/15/11 (e)(j)	2,520,000		2,268,000
Swift Master Auto Receivables Trust:
Series 2007-1 Class A, 0.555% 6/15/12 (j)	364,716		262,596
Series 2007-2 Class A, 1.105% 10/15/12 (j)	1,515,000		984,750
Terwin Mortgage Trust:
Series 2003-4HE Class A1, 0.9038% 9/25/34 (j)	86,903		17,967
Series 2003-6HE Class A1, 0.9438% 11/25/33 (j)	4,628		1,555
Turquoise Card Backed Securities PLC:
Series 2006-1A Class C, 0.785% 5/16/11 (e)(j)	359,186		341,564
Series 2006-2:
Class B, 0.605% 10/17/11 (j)	434,657		380,325
Class C, 0.805% 10/17/11 (j)	408,370		330,064
Series 2007-1 Class C, 0.8313% 6/15/12 (j)	465,653		299,652
Wachovia Auto Loan Owner Trust:
Series 2006-1 Class D, 5.42% 4/21/14 (e)	3,615,000		2,770,545
Series 2006-2A:
Class A3, 5.23% 8/22/11 (e)	1,555,545		1,548,190
Class D, 5.54% 12/20/12 (e)	2,245,000		1,144,950
Series 2007-1 Class D, 5.65% 2/20/13	2,640,000		1,135,200
WaMu Asset Holdings Corp. Series 2006-8 Class N1, 6.048% 10/25/46 (e)	112,639		11
Asset-Backed Securities - continued
	Principal Amount		Value
WaMu Asset-Backed Certificates Series 2006-HE3:
Class M4, 0.8538% 10/25/36 (j)	$ 76,507		$ 1,385
Class M7, 1.2738% 10/25/36 (j)	55,382		620
WaMu Master Note Trust:
Series 2006-A3A Class A3, 0.485% 9/16/13 (e)(j)	697,226		664,050
Series 2006-C2A Class C2, 0.955% 8/15/15 (e)(j)	888,516		386,043
Series 2006-C3A Class C3A, 0.835% 10/15/13 (e)(j)	621,864		501,834
Series 2007-A4A Class A4, 5.2% 10/15/14 (e)	1,500,000		1,342,500
Series 2007-C1 Class C1, 0.855% 5/15/14 (e)(j)	541,145		318,399
Wells Fargo Home Equity Trust Series 2004-3 Class A, 4.5% 11/27/34 (e)(o)	961		0
WFS Financial Owner Trust:
Series 2005-1 Class C, 3.82% 8/17/12	2,294		2,285
Series 2005-3 Class C, 4.54% 5/17/13	850,000		779,401
Whinstone Capital Management Ltd. Series 1A Class B3, 2.0594% 10/25/44 (e)(j)	1,390,735		166,888
TOTAL ASSET-BACKED SECURITIES (Cost $151,963,373)		110,217,951
Collateralized Mortgage Obligations - 5.2%
Private Sponsor - 2.5%
Arkle Master Issuer PLC floater:
Series 2006-1A Class 3C, 1.6275% 2/17/52 (e)(j)	84,974		63,731
Series 2006-2A:
Class 2B, 1.3575% 2/17/52 (e)(j)	299,030		279,100
Class 2M, 1.4375% 2/17/52 (e)(j)	203,364		182,718
Arran Residential Mortgages Funding No. 1 PLC floater Series 2006-1A Class DB, 1.7838% 4/12/56 (e)(j)	190,861		81,019
Banc of America Mortgage Securities, Inc.:
Series 2003-K Class 1A1, 5.2035% 12/25/33 (j)	8,570		6,960
Series 2004-A Class 2A2, 5.1951% 2/25/34 (j)	1,229,916		1,002,594
Series 2004-B Class 1A1, 6.433% 3/25/34 (j)	9,537		7,263
Series 2004-C Class 1A1, 5.971% 4/25/34 (j)	16,909		13,326
Series 2004-J Class 2A1, 4.7597% 11/25/34 (j)	618,612		481,434
Series 2005-H:
Class 1A1, 5.3329% 9/25/35 (j)	164,844		118,727
Class 2A2, 4.8028% 9/25/35 (j)	228,855		73,786
Bear Stearns Alt-A Trust floater:
Series 2005-1 Class A1, 0.7538% 1/25/35 (j)	639,165		315,683
Series 2005-2 Class 1A1, 0.7238% 3/25/35 (j)	645,756		358,310
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Bear Stearns Alt-A Trust floater: - continued
Series 2005-5 Class 1A1, 0.6938% 7/25/35 (j)	$ 590,928		$ 299,381
Countrywide Alternative Loan Trust planned amortization class Series 2003-5T2 Class A2, 0.8738% 5/25/33 (j)	13,078		12,447
Credit Suisse First Boston Adjustable Rate Mortgage Trust floater:
Series 2004-1 Class 9A2, 0.8738% 1/25/34 (j)	79,377		39,525
Series 2004-2 Class 7A3, 0.8738% 2/25/35 (j)	216,307		101,378
Series 2004-4 Class 5A2, 0.8738% 3/25/35 (j)	49,732		20,810
Series 2005-1 Class 5A2, 0.8038% 5/25/35 (j)	58,844		28,020
Series 2005-10:
Class 5A1, 0.7338% 1/25/36 (j)	93,364		44,600
Class 5A2, 0.7938% 1/25/36 (j)	42,012		16,844
Series 2005-2:
Class 6A2, 0.7538% 6/25/35 (j)	14,649		6,497
Class 6M2, 0.9538% 6/25/35 (j)	187,207		45,729
Series 2005-3 Class 8A2, 0.7138% 7/25/35 (j)	69,517		35,288
Series 2005-4 Class 7A2, 0.7038% 8/25/35 (j)	22,034		10,866
Series 2005-8 Class 7A2, 0.7538% 11/25/35 (j)	54,855		31,017
Credit Suisse First Boston Mortgage Securities Corp. floater:
Series 2004-AR4 Class 5A2, 1.2138% 5/25/34 (j)	24,845		14,491
Series 2004-AR5 Class 11A2, 1.2138% 6/25/34 (j)	44,243		22,853
Series 2004-AR6 Class 9A2, 1.2138% 10/25/34 (j)	20,058		10,049
Series 2004-AR7 Class 6A2, 1.2338% 8/25/34 (j)	6,049		2,757
Series 2004-AR8 Class 8A2, 0.8538% 9/25/34 (j)	50,794		30,262
Deutsche Alt-A Securities Mortgage Loan Trust floater Series 2007-BAR1 Class A3, 0.6338% 3/25/37 (j)	435,931		226,481
DSLA Mortgage Loan Trust Series 2006-AR2 Class 2AB1, 0.5563% 9/19/36 (j)	90,142		73,356
First Horizon Mortgage pass-thru Trust floater Series 2004-FL1 Class 2A1, 2.15% 12/25/34 (j)	7,245		4,578
Fosse Master Issuer PLC floater Series 2006-1A:
Class B2, 1.3025% 10/18/54 (e)(j)	362,772		278,319
Class C2, 1.6125% 10/18/54 (e)(j)	121,608		60,804
Class M2, 1.3925% 10/18/54 (e)(j)	208,505		134,736
Gracechurch Mortgage Financing PLC floater Series 2006-1 Class D2, 1.7213% 11/20/56 (e)(j)	311,213		145,504
Gracechurch Mortgage Funding PLC floater Series 1A Class DB, 1.8238% 10/11/41 (e)(j)	395,258		171,170
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Granite Master Issuer PLC floater:
Series 2006-1A Class C2, 1.07% 12/20/54 (e)(j)	$ 762,826		$ 53,398
Series 2006-2 Class C1, 0.94% 12/20/54 (j)	3,254,342		325,434
Series 2006-3 Class C2, 0.97% 12/20/54 (j)	142,646		8,787
Series 2006-4:
Class B1, 0.56% 12/20/54 (j)	381,607		76,321
Class C1, 0.85% 12/20/54 (j)	233,345		16,334
Class M1, 0.64% 12/20/54 (j)	100,462		15,069
Series 2007-1:
Class 1C1, 0.77% 12/20/54 (j)	235,742		23,574
Class 1M1, 0.62% 12/20/54 (j)	153,360		23,004
Class 2C1, 0.9% 12/20/54 (j)	107,590		10,759
Class 2M1, 0.72% 12/20/54 (j)	196,906		31,505
Series 2007-2 Class 2C1, 0.8913% 12/17/54 (j)	272,830		27,283
Granite Mortgages PLC floater Series 2003-3 Class 1C, 2.5925% 1/20/44 (j)	54,631		13,658
GSR Mortgage Loan Trust Series 2007-AR2 Class 2A1, 4.8324% 4/25/35 (j)	635,947		437,346
Harborview Mortgage Loan Trust floater Series 2005-2 Class 2A1A, 0.6863% 5/19/35 (j)	54,045		24,223
Holmes Master Issuer PLC floater Series 2006-1A Class 2C, 1.4844% 7/15/40 (e)(j)	77,306		54,114
Home Equity Loan Trust floater Series 2007-FRE1 Class 2AV1, 0.6038% 4/25/37 (j)	248,213		141,405
Homestar Mortgage Acceptance Corp. floater Series 2004-5 Class A1, 0.9238% 10/25/34 (j)	567,759		322,377
Impac CMB Trust floater:
Series 2004-11 Class 2A2, 1.2138% 3/25/35 (j)	33,289		19,684
Series 2004-9:
Class M2, 1.4488% 1/25/35 (j)	136,983		61,107
Class M3, 1.5238% 1/25/35 (j)	101,544		41,981
Class M4, 2.0488% 1/25/35 (j)	51,794		19,738
Series 2005-1:
Class M4, 1.2238% 4/25/35 (j)	3,938		655
Class M5, 1.2438% 4/25/35 (j)	3,938		482
Class M6, 1.2938% 4/25/35 (j)	6,299		903
Series 2005-3 Class A1, 0.7138% 8/25/35 (j)	78,827		40,016
Series 2005-4 Class 1B1, 1.6894% 5/25/35 (j)	24,609		842
Series 2005-6 Class 1M3, 1.0838% 10/25/35 (j)	21,338		1,687
Lehman Structured Securities Corp. floater Series 2005-1 Class A2, 0.8669% 9/26/45 (e)(j)	375,827		191,985
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
MASTR Adjustable Rate Mortgages Trust:
floater Series 2005-1 Class 1A1, 0.7438% 3/25/35 (j)	$ 89,860		$ 55,661
Series 2007-3 Class 22A2, 0.6838% 5/25/47 (j)	181,030		87,467
MASTR Alternative Loan Trust Series 2004-3 Class 3A1, 6% 4/25/34	187,563		136,311
Merrill Lynch Alternative Note Asset Trust floater Series 2007-OAR1 Class A1, 0.6438% 2/25/37 (j)	227,862		95,702
Merrill Lynch Floating Trust floater Series 2006-1:
Class B, 0.625% 6/15/22 (e)(j)	26,395		14,517
Class C, 0.645% 6/15/22 (e)(j)	161,633		80,817
Class D, 0.655% 6/15/22 (e)(j)	62,186		27,984
Class E, 0.665% 6/15/22 (e)(j)	99,468		39,787
Class F, 0.695% 6/15/22 (e)(j)	179,345		62,771
Class G, 0.765% 6/15/22 (e)(j)	37,282		11,185
Class H, 0.785% 6/15/22 (e)(j)	74,650		18,663
Class J, 0.825% 6/15/22 (e)(j)	87,091		17,418
Merrill Lynch Mortgage Investors Trust floater:
Series 2003-A Class 2A1, 0.8638% 3/25/28 (j)	407,950		237,286
Series 2003-B Class A1, 0.8138% 4/25/28 (j)	30,030		17,520
Series 2003-D Class A, 0.7838% 8/25/28 (j)	25,475		16,336
Series 2003-E Class A2, 2.0813% 10/25/28 (j)	42,485		25,351
Series 2003-F Class A2, 3.805% 10/25/28 (j)	440,967		264,170
Series 2004-A Class A2, 3.715% 4/25/29 (j)	39,235		24,285
Series 2004-B Class A2, 2.8388% 6/25/29 (j)	487,779		288,530
Series 2004-C Class A2, 2.15% 7/25/29 (j)	412,534		244,858
Series 2004-D Class A2, 3.4625% 9/25/29 (j)	398,410		235,859
Series 2004-E:
Class A2B, 3.825% 11/25/29 (j)	69,670		44,495
Class A2D, 4.015% 11/25/29 (j)	10,104		5,920
Series 2004-G Class A2, 3.48% 11/25/29 (j)	33,682		20,318
Series 2005-A Class A2, 3.3525% 2/25/30 (j)	32,557		19,590
Series 2005-B Class A2, 2.7988% 7/25/30 (j)	99,478		62,003
Series 2006-MLN1 Class M4, 0.8338% 7/25/37 (j)	206,820		972
MortgageIT Trust floater:
Series 2004-2:
Class A1, 0.8438% 12/25/34 (j)	508,130		331,036
Class A2, 0.9238% 12/25/34 (j)	686,948		477,477
Series 2005-2 Class 1A1, 0.7338% 5/25/35 (j)	40,922		27,051
Opteum Mortgage Acceptance Corp. floater Series 2005-3 Class APT, 0.7638% 7/25/35 (j)	413,322		202,231
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Option One Mortgage Loan Trust floater Series 2007-CP1 Class M1, 0.7738% 3/25/37 (j)	$ 310,176		$ 14,609
Permanent Financing No. 4 PLC Class 3C, 2.9894% 6/10/42 (j)	1,215,000		1,211,282
Permanent Financing No. 5 PLC floater Series 3 Class C, 2.9894% 6/10/42 (j)	1,935,000		1,451,250
Permanent Financing No. 8 PLC floater Class 3C, 2.7094% 6/10/42 (j)	260,453		176,393
Permanent Master Issuer PLC floater Series 2006-1 Class 2C, 1.4944% 7/17/42 (j)	66,269		49,039
Provident Funding Mortgage Loan Trust Series 2005-2 Class 3A, 4.5836% 10/25/35 (j)	881,632		702,891
RESI Finance LP/RESI Finance DE Corp. floater:
Series 2003-B Class B5, 2.7988% 7/10/35 (e)(j)	173,107		84,216
Series 2003-CB1 Class B3, 1.8988% 6/10/35 (e)(j)	133,474		71,409
Series 2004-A:
Class B4, 1.6488% 2/10/36 (e)(j)	101,746		35,245
Class B5, 2.1488% 2/10/36 (e)(j)	67,823		21,751
Series 2004-B:
Class B4, 1.5488% 2/10/36 (e)(j)	44,131		12,158
Class B5, 1.9988% 2/10/36 (e)(j)	34,176		8,479
Class B6, 2.4488% 2/10/36 (e)(j)	11,922		2,452
Series 2004-C:
Class B4, 1.3988% 9/10/36 (e)(j)	56,734		16,640
Class B5, 1.7988% 9/10/36 (e)(j)	63,618		17,069
Class B6, 2.1988% 9/10/36 (e)(j)	14,088		3,087
Residential Accredit Loans, Inc. floater Series 2006-QO7 Class 3A1, 0.5738% 9/25/46 (j)	219,268		169,038
Residential Asset Mortgage Products, Inc.:
sequential payer Series 2003-SL1 Class A31, 7.125% 4/25/31	416,873		368,272
Series 2005-AR5 Class 1A1, 5.3771% 9/19/35 (j)	371,037		272,129
Residential Funding Securities Corp. floater Series 2003-RP2 Class A1, 0.9238% 6/25/33 (e)(j)	34,805		26,109
ResMAE Mortgage Loan Trust floater Series 2006-1 Class A2A, 0.5738% 2/25/36 (e)(j)	7,880		7,679
Salomon Brothers Mortgage Securities VII, Inc. Series 2003-UP1 Class A, 3.45% 4/25/32 (e)	236,970		180,208
SBA CMBS Trust Series 2005-1A:
Class D, 6.219% 11/15/35 (e)	1,370,000		1,191,900
Class E, 6.706% 11/15/35 (e)	365,000		308,425
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Sequoia Mortgage Trust floater:
Series 2003-5 Class A2, 3.7963% 9/20/33 (j)	$ 197,380		$ 120,307
Series 2004-1 Class A, 1.8888% 2/20/34 (j)	20,363		13,041
Series 2004-10 Class A4, 4.5188% 11/20/34 (j)	29,480		18,236
Series 2004-12 Class 1A2, 2.1538% 1/20/35 (j)	88,915		54,655
Series 2004-3 Class A, 3.885% 5/20/34 (j)	343,503		209,819
Series 2004-4 Class A, 4.4388% 5/20/34 (j)	381,442		237,368
Series 2004-5 Class A3, 2.9113% 6/20/34 (j)	357,105		218,391
Series 2004-6:
Class A3A, 2.1613% 6/20/35 (j)	250,422		160,609
Class A3B, 2.3038% 7/20/34 (j)	6,131		3,768
Series 2004-7:
Class A3A, 1.9138% 8/20/34 (j)	299,672		179,514
Class A3B, 2.1388% 7/20/34 (j)	3,987		2,338
Series 2004-8 Class A2, 2.15% 9/20/34 (j)	473,511		306,703
Series 2005-1 Class A2, 1.8388% 2/20/35 (j)	384,730		238,313
Series 2005-2 Class A2, 2.03% 3/20/35 (j)	67,309		40,470
Series 2005-3 Class A1, 0.67% 5/20/35 (j)	32,692		17,561
Soundview Home Equity Loan Trust floater Series 2006-EQ1 Class M7, 1.2738% 9/25/36 (j)	66,744		874
Structured Adjustable Rate Mortgage Loan Trust floater Series 2005-10 Class A1, 0.6738% 6/25/35 (j)	194,396		132,164
Structured Asset Securities Corp. floater Series 2004-NP1 Class A, 0.8738% 9/25/33 (e)(j)	153,393		65,012
TBW Mortgage-Backed pass-thru certificates floater Series 2006-4 Class A3, 0.5894% 9/25/36 (j)	415,454		211,807
Wachovia Bank Commercial Mortgage Trust Series 2004-C14 Class PP, 5.3117% 8/15/41 (e)(j)	1,510,922		945,323
WaMu Mortgage pass-thru certificates:
floater:
Series 2006-AR11 Class C1B1, 0.5538% 9/25/46 (j)	19,239		18,413
Series 2006-AR7 Class C1B1, 0.5338% 7/25/46 (j)	7,798		7,537
sequential payer Series 2004-RA2 Class 2A, 7% 7/25/33	157,101		140,816
Series 2003-AR10 Class A7, 4.669% 10/25/33 (j)	831,968		522,359
Series 2004-AR7 Class A6, 3.9389% 7/25/34 (j)	335,000		331,734
Wells Fargo Mortgage Backed Securities Trust:
Series 2004-EE Class 2A2, 4.1875% 12/25/34 (j)	978,050		779,146
Series 2004-V Class 1A2, 4.0139% 10/25/34 (j)	637,825		509,623
Series 2005-AR12 Class 2A6, 4.313% 7/25/35 (j)	154,498		118,038
Series 2005-AR2 Class 2A2, 4.57% 3/25/35	3,296,755		2,536,456
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
Private Sponsor - continued
Wells Fargo Mortgage Backed Securities Trust: - continued
Series 2005-AR3 Class 2A1, 4.4106% 3/25/35 (j)	$ 268,646		$ 206,772
Series 2005-AR4 Class 2A2, 4.5395% 4/25/35 (j)	5,557,204		4,435,241
TOTAL PRIVATE SPONSOR			29,213,793
U.S. Government Agency - 2.7%
Fannie Mae planned amortization class:
Series 1993-187 Class L, 6.5% 7/25/23	581,436		596,029
Series 2006-64 Class PA, 5.5% 2/25/30	3,508,997		3,611,571
Fannie Mae subordinate REMIC pass-thru certificates:
planned amortization class:
Series 2006-49 Class CA, 6% 2/25/31	4,523,005		4,657,798
Series 2006-54 Class PE, 6% 2/25/33	1,564,928		1,620,160
sequential payer:
Series 2001-40 Class Z, 6% 8/25/31	1,005,419		1,045,501
Series 2003-76 Class BA, 4.5% 3/25/18	2,444,298		2,503,236
Series 2004-3 Class BA, 4% 7/25/17	99,484		101,088
Freddie Mac sequential payer Series 2114 Class ZM, 6% 1/15/29	449,179		468,241
Freddie Mac Multi-class participation certificates guaranteed:
planned amortization class:
Series 2535 Class PC, 6% 9/15/32	1,452,303		1,502,075
Series 2690 Class PD, 5% 2/15/27	2,520,246		2,583,452
Series 2755 Class LC, 4% 6/15/27	2,225,000		2,264,338
Series 2901 Class UM, 4.5% 1/15/30	3,330,396		3,392,800
sequential payer:
Series 2609 Class UJ, 6% 2/15/17	892,859		937,398
Series 2635 Class DG, 4.5% 1/15/18	2,800,884		2,871,925
Series 2780 Class A, 4% 12/15/14	2,349,898		2,367,086
Series 2786 Class GA, 4% 8/15/17	1,167,282		1,187,723
Series 2970 Class YA, 5% 9/15/18	914,961		942,792
Ginnie Mae guaranteed REMIC pass-thru securities planned amortization class Series 2002-5 Class PD, 6.5% 5/16/31	41,603		41,690
TOTAL U.S. GOVERNMENT AGENCY			32,694,903
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $71,889,069)		61,908,696
Commercial Mortgage Securities - 4.6%
	Principal Amount		Value
280 Park Avenue Trust floater Series 2001-280 Class X1, 0.9867% 2/3/11 (e)(j)(l)	$ 14,540,912		$ 277,268
Asset Securitization Corp. Series 1997-D5 Class PS1, 1.5863% 2/14/43 (j)(l)	3,999,036		141,666
Banc of America Commercial Mortgage Trust:
sequential payer:
Series 2006-5 Class A1, 5.185% 7/10/11	546,001		532,039
Series 2007-3 Class A1, 5.6583% 6/10/49 (j)	1,320,655		1,052,319
Series 2006-6 Class XP, 0.4316% 10/10/45 (j)(l)	32,421,228		469,748
Banc of America Commercial Mortgage, Inc.:
Series 2002-2 Class XP, 1.794% 7/11/43 (e)(j)(l)	5,286,301		81,640
Series 2004-6 Class XP, 0.4529% 12/10/42 (j)(l)	10,395,529		111,952
Series 2005-4 Class XP, 0.1697% 7/10/45 (j)(l)	15,414,356		86,821
Banc of America Large Loan, Inc. floater:
Series 2005-MIB1:
Class F, 0.9313% 3/15/22 (e)(j)	78,149		35,167
Class G, 0.9913% 3/15/22 (e)(j)	50,652		19,248
Series 2006-BIX1:
Class F, 0.765% 10/15/19 (e)(j)	201,139		90,513
Class G, 0.785% 10/15/19 (e)(j)	137,009		47,953
Bayview Commercial Asset Trust:
floater:
Series 2003-2 Class M1, 1.3238% 12/25/33 (e)(j)	13,378		7,692
Series 2004-1:
Class A, 0.8338% 4/25/34 (e)(j)	629,225		471,919
Class B, 2.3738% 4/25/34 (e)(j)	76,229		28,586
Class M1, 1.0338% 4/25/34 (e)(j)	44,138		27,586
Class M2, 1.6738% 4/25/34 (e)(j)	42,573		22,351
Series 2004-2:
Class A, 0.9038% 8/25/34 (e)(j)	517,588		414,071
Class M1, 1.0538% 8/25/34 (e)(j)	184,465		115,291
Series 2004-3:
Class A1, 0.8438% 1/25/35 (e)(j)	852,376		617,972
Class A2, 0.8938% 1/25/35 (e)(j)	129,922		90,945
Class M1, 0.9738% 1/25/35 (e)(j)	45,997		29,898
Class M2, 1.4738% 1/25/35 (e)(j)	29,764		16,370
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust: - continued
floater:
Series 2005-2A:
Class A1, 0.7838% 8/25/35 (e)(j)	$ 194,650		$ 136,255
Class M1, 0.9038% 8/25/35 (e)(j)	14,442		5,777
Class M2, 0.9538% 8/25/35 (e)(j)	23,821		9,528
Class M3, 0.9738% 8/25/35 (e)(j)	13,179		4,613
Class M4, 1.0838% 8/25/35 (e)(j)	12,098		3,629
Series 2005-3A:
Class A1, 0.7938% 11/25/35 (e)(j)	106,095		68,962
Class A2, 0.8738% 11/25/35 (e)(j)	68,783		44,709
Class M1, 0.9138% 11/25/35 (e)(j)	12,548		4,768
Class M2, 0.9638% 11/25/35 (e)(j)	15,932		6,054
Class M3, 0.9838% 11/25/35 (e)(j)	14,258		4,990
Class M4, 1.0738% 11/25/35 (e)(j)	17,764		6,218
Series 2005-4A:
Class A2, 0.8638% 1/25/36 (e)(j)	1,246,111		716,514
Class B1, 1.8738% 1/25/36 (e)(j)	83,848		29,347
Class M1, 0.9238% 1/25/36 (e)(j)	391,924		225,356
Class M2, 0.9438% 1/25/36 (e)(j)	148,723		81,798
Class M3, 0.9738% 1/25/36 (e)(j)	159,837		79,919
Class M4, 1.0838% 1/25/36 (e)(j)	81,789		38,850
Class M5, 1.1238% 1/25/36 (e)(j)	81,789		36,805
Class M6, 1.1738% 1/25/36 (e)(j)	83,000		34,860
Series 2006-1:
Class A2, 0.8338% 4/25/36 (e)(j)	38,804		25,533
Class M1, 0.8538% 4/25/36 (e)(j)	13,879		6,939
Class M2, 0.8738% 4/25/36 (e)(j)	14,664		6,599
Class M3, 0.8938% 4/25/36 (e)(j)	12,617		5,299
Class M4, 0.9938% 4/25/36 (e)(j)	7,150		3,879
Class M5, 1.0338% 4/25/36 (e)(j)	6,939		2,637
Class M6, 1.1138% 4/25/36 (e)(j)	13,836		7,167
Series 2006-2A:
Class A1, 0.7038% 7/25/36 (e)(j)	380,800		304,640
Class A2, 0.7538% 7/25/36 (e)(j)	34,379		27,503
Class B1, 1.3438% 7/25/36 (e)(j)	12,872		2,574
Class B3, 3.1738% 7/25/36 (e)(j)	19,447		3,889
Class M1, 0.7838% 7/25/36 (e)(j)	36,070		18,035
Class M2, 0.8038% 7/25/36 (e)(j)	25,449		12,216
Class M3, 0.8238% 7/25/36 (e)(j)	21,110		9,499
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust: - continued
floater:
Series 2006-2A:
Class M4, 0.8938% 7/25/36 (e)(j)	$ 14,254		$ 5,702
Class M5, 0.9438% 7/25/36 (e)(j)	17,521		6,132
Class M6, 1.0138% 7/25/36 (e)(j)	26,141		9,149
Series 2006-3A:
Class B1, 1.2738% 10/25/36 (e)(j)	22,294		6,889
Class B2, 1.8238% 10/25/36 (e)(j)	16,080		4,726
Class B3, 3.0738% 10/25/36 (e)(j)	26,167		5,809
Class M4, 0.9038% 10/25/36 (e)(j)	24,639		10,730
Class M5, 0.9538% 10/25/36 (e)(j)	29,497		11,799
Class M6, 1.0338% 10/25/36 (e)(j)	57,737		21,651
Series 2006-4A:
Class A1, 0.7038% 12/25/36 (e)(j)	106,293		72,301
Class A2, 0.7438% 12/25/36 (e)(j)	479,050		332,365
Class B1, 1.1738% 12/25/36 (e)(j)	16,723		3,345
Class B2, 1.7238% 12/25/36 (e)(j)	17,305		7,971
Class B3, 2.9238% 12/25/36 (e)(j)	29,078		12,797
Class M1, 0.7638% 12/25/36 (e)(j)	34,610		22,220
Class M2, 0.7838% 12/25/36 (e)(j)	23,278		14,665
Class M3, 0.8138% 12/25/36 (e)(j)	23,578		9,903
Class M4, 0.8738% 12/25/36 (e)(j)	28,254		11,302
Class M5, 0.9138% 12/25/36 (e)(j)	25,907		10,363
Class M6, 0.9938% 12/25/36 (e)(j)	23,278		12,938
Series 2007-1:
Class A2, 0.7438% 3/25/37 (e)(j)	518,227		297,980
Class B1, 1.1438% 3/25/37 (e)(j)	165,463		57,912
Class B2, 1.6238% 3/25/37 (e)(j)	121,310		38,516
Class B3, 3.8238% 3/25/37 (e)(j)	337,458		98,707
Class M1, 0.7438% 3/25/37 (e)(j)	141,705		76,875
Class M2, 0.7638% 3/25/37 (e)(j)	107,283		55,519
Class M3, 0.7938% 3/25/37 (e)(j)	93,171		46,585
Class M4, 0.8438% 3/25/37 (e)(j)	70,278		33,734
Class M5, 0.8938% 3/25/37 (e)(j)	117,482		52,867
Class M6, 0.9738% 3/25/37 (e)(j)	162,014		64,806
Series 2007-2A:
Class A1, 0.7438% 7/25/37 (e)(j)	79,839		48,303
Class A2, 0.7938% 7/25/37 (e)(j)	74,777		46,175
Class B1, 2.0738% 7/25/37 (e)(j)	23,430		7,439
Class B2, 2.7238% 7/25/37 (e)(j)	20,305		6,294
Class B3, 3.8238% 7/25/37 (e)(j)	22,836		6,851
Class M1, 0.8438% 7/25/37 (e)(j)	26,651		14,458
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bayview Commercial Asset Trust: - continued
floater:
Series 2007-2A:
Class M2, 0.8838% 7/25/37 (e)(j)	$ 14,955		$ 7,739
Class M3, 0.9638% 7/25/37 (e)(j)	15,147		7,460
Class M4, 1.1238% 7/25/37 (e)(j)	29,164		12,176
Class M5, 1.2238% 7/25/37 (e)(j)	25,789		10,122
Class M6, 1.4738% 7/25/37 (e)(j)	32,729		12,028
Series 2007-3:
Class A2, 0.7638% 7/25/37 (e)(j)	132,484		98,409
Class B1, 1.4238% 7/25/37 (e)(j)	114,067		54,307
Class B2, 2.0738% 7/25/37 (e)(j)	293,048		139,549
Class B3, 4.4738% 7/25/37 (e)(j)	153,226		70,300
Class M1, 0.7838% 7/25/37 (e)(j)	100,090		58,102
Class M2, 0.8138% 7/25/37 (e)(j)	105,230		59,055
Class M3, 0.8438% 7/25/37 (e)(j)	170,335		89,886
Class M4, 0.9738% 7/25/37 (e)(j)	269,358		140,955
Class M5, 1.0738% 7/25/37 (e)(j)	134,275		68,950
Class M6, 1.2738% 7/25/37 (e)(j)	104,864		53,229
Series 2007-4A:
Class A2, 1.0238% 9/25/37 (e)(j)	972,463		680,724
Class B1, 3.0238% 9/25/37 (e)(j)	161,033		51,128
Class B2, 3.9238% 9/25/37 (e)(j)	603,810		176,614
Class M1, 1.4238% 9/25/37 (e)(j)	150,688		75,344
Class M2, 1.5238% 9/25/37 (e)(j)	150,688		67,810
Class M4, 2.0738% 9/25/37 (e)(j)	397,109		158,844
Class M5, 2.2238% 9/25/37 (e)(j)	397,109		148,916
Class M6, 2.4238% 9/25/37 (e)(j)	397,207		139,023
Series 2004-1 Class IO, 1.25% 4/25/34 (e)(l)	4,989,665		54,886
Series 2006-2A Class IO, 1.7976% 7/25/36 (c)(e)(l)	13,438,796		806,328
Bear Stearns Commercial Mortgage Securities Trust:
floater:
Series 2006-BBA7:
Class G, 0.9013% 3/15/19 (e)(j)	102,211		58,332
Class H, 1.1113% 3/15/19 (e)(j)	68,774		30,948
Class J, 1.3113% 3/15/19 (e)(j)	51,667		20,667
Series 2007-BBA8:
Class D, 0.705% 3/15/22 (e)(j)	52,963		32,896
Class E, 0.755% 3/15/22 (e)(j)	275,033		161,276
Class F, 0.805% 3/15/22 (e)(j)	168,653		94,474
Class G, 0.855% 3/15/22 (e)(j)	43,346		23,557
Class H, 1.005% 3/15/22 (e)(j)	52,963		23,833
Class J, 1.155% 3/15/22 (e)(j)	52,963		21,185
Commercial Mortgage Securities - continued
	Principal Amount		Value
Bear Stearns Commercial Mortgage Securities Trust: - continued
sequential payer:
Series 2004-ESA Class A3, 4.741% 5/14/16 (e)	$ 625,000		$ 627,572
Series 2007-PW17 Class A1, 5.282% 6/11/50	1,592,725		1,523,622
Series 2002-TOP8 Class X2, 2.0827% 8/15/38 (e)(j)(l)	5,909,417		180,069
Series 2003-PWR2 Class X2, 0.4666% 5/11/39 (e)(j)(l)	15,824,019		165,584
Series 2004-PWR6 Class X2, 0.6189% 11/11/41 (e)(j)(l)	6,225,449		117,309
Series 2005-PWR9 Class X2, 0.3886% 9/11/42 (e)(j)(l)	42,430,192		500,031
Series 2007-T28 Class A1, 5.422% 9/11/42	703,912		674,600
C-BASS Trust floater Series 2006-SC1 Class A, 0.7438% 5/25/36 (e)(j)	138,929		60,326
CDC Commercial Mortgage Trust Series 2002-FX1 Class XCL, 0.908% 5/15/35 (e)(j)(l)	36,834,967		1,454,429
Citigroup Commercial Mortgage Trust:
floater Series 2006-FL2:
Class G, 0.785% 11/15/36 (e)(j)	56,376		17,477
Class H, 0.825% 11/15/36 (e)(j)	45,122		13,537
sequential payer Series 2005-EMG Class A2, 4.2211% 9/20/51 (e)	564,818		546,210
Series 2004-C2 Class XP, 0.8937% 10/15/41 (e)(j)(l)	8,219,154		157,957
Citigroup/Deutsche Bank Commercial Mortgage Trust Series 2006-CD3 Class X3, 0.4227% 10/15/48 (j)(l)	60,171,351		948,276
Cobalt CMBS Commercial Mortgage Trust sequential payer Series 2007-C2 Class A1, 5.064% 9/15/11 (j)	685,440		660,494
COMM pass-thru certificates:
floater:
Series 2005-F10A:
Class D, 0.765% 4/15/17 (e)(j)	120,571		57,042
Class E, 0.825% 4/15/17 (e)(j)	38,383		17,967
Class F, 0.865% 4/15/17 (e)(j)	21,773		9,645
Class G, 1.005% 4/15/17 (e)(j)	21,773		9,432
Class H, 1.075% 4/15/17 (e)(j)	21,773		8,891
Class J, 1.305% 4/15/17 (e)(j)	16,697		7,538
Series 2005-FL11:
Class F, 0.9113% 11/15/17 (e)(j)	49,344		16,488
Class G, 0.9613% 11/15/17 (e)(j)	34,203		10,662
Series 2004-LBN2 Class X2, 0.8624% 3/10/39 (e)(j)(l)	2,207,447		32,775
Series 2005-LP5 Class XP, 0.3666% 5/10/43 (j)(l)	15,117,739		99,682
Commercial Mortgage Securities - continued
	Principal Amount		Value
Commercial Mortgage Asset Trust sequential payer Series 1999-C1 Class A3, 6.64% 1/17/32	$ 201,378		$ 200,969
Credit Suisse Commercial Mortgage Trust Series 2006-C5 Class ASP, 0.6637% 12/15/39 (j)(l)	45,122,289		1,065,545
Credit Suisse First Boston Mortgage Securities Corp.:
Series 2001-CK6 Class AX, 0.645% 9/15/18 (l)	16,805,025		339,845
Series 2003-C3 Class ASP, 1.6988% 5/15/38 (e)(j)(l)	16,672,414		303,581
Series 2004-C1 Class ASP, 0.9364% 1/15/37 (e)(j)(l)	11,393,170		189,000
Series 2005-C1 Class ASP, 0.3423% 2/15/38 (e)(j)(l)	17,184,486		129,793
Series 2005-C2 Class ASP, 0.5505% 4/15/37 (e)(j)(l)	13,881,778		187,269
Credit Suisse Mortgage Capital Certificates floater Series 2007-TFL1:
Class C:
0.6313% 2/15/22 (e)(j)	236,650		70,995
0.7313% 2/15/22 (e)(j)	84,521		21,130
Class F, 0.7813% 2/15/22 (e)(j)	169,020		37,184
DLJ Commercial Mortgage Corp. sequential payer Series 2000-CF1 Class A1B, 7.62% 6/10/33	1,594,951		1,599,294
First Union National Bank-Bank of America Commercial Mortgage Trust Series 2001-C1 Class D, 6.484% 3/15/33	1,360,000		1,095,521
GE Capital Commercial Mortgage Corp. Series 2001-1 Class X1, 1.0537% 5/15/33 (e)(j)(l)	10,434,363		195,796
GMAC Commercial Mortgage Securities, Inc.:
sequential payer Series 2003-C2 Class A1, 4.576% 5/10/40	1,851,832		1,673,323
Series 2004-C3 Class X2, 0.6604% 12/10/41 (j)(l)	9,798,591		116,415
Series 2006-C1 Class XP, 0.1363% 11/10/45 (j)(l)	20,466,988		111,183
Greenwich Capital Commercial Funding Corp.:
Series 2003-C2 Class XP, 0.9758% 1/5/36 (e)(j)(l)	15,615,079		215,241
Series 2005-GG3 Class XP, 0.7646% 8/10/42 (e)(j)(l)	38,512,299		660,278
Series 2007-GG11 Class A1, 0.4798% 12/10/49 (e)(l)	97,158,551		1,369,936
GS Mortgage Securities Corp. II floater:
Series 2006-FL8A Class F, 0.885% 6/6/20 (e)(j)	105,970		60,403
Series 2007-EOP:
Class C, 0.765% 3/6/20 (e)(j)	720,000		460,800
Class D, 0.815% 3/6/20 (e)(j)	215,000		137,600
Class E, 0.885% 3/6/20 (e)(j)	360,000		226,800
Class F, 0.925% 3/6/20 (e)(j)	180,000		109,800
Class G, 0.965% 3/6/20 (e)(j)	90,000		54,000
Class H, 1.095% 3/6/20 (e)(j)	150,000		90,000
Class J, 1.295% 3/6/20 (e)(j)	215,000		122,550
Commercial Mortgage Securities - continued
	Principal Amount		Value
Hilton Hotel Pool Trust:
sequential payer Series 2000-HLTA Class A1, 7.055% 10/3/15 (e)	$ 266,578		$ 276,411
Series 2000-HLTA Class D, 7.555% 10/3/15 (e)	1,275,000		1,362,830
Host Marriott Pool Trust sequential payer Series 1999-HMTA:
Class A, 6.98% 8/3/15 (e)	69,603		70,305
Class B, 7.3% 8/3/15 (e)	505,000		514,383
Class D, 7.97% 8/3/15 (e)	425,000		435,023
JPMorgan Chase Commercial Mortgage Securities Corp.:
sequential payer Series 2001-C1 Class A2, 5.464% 10/12/35	511,775		505,148
Series 2002-C3 Class X2, 1.1342% 7/12/35 (e)(j)(l)	4,475,450		37,290
Series 2003-CB7 Class X2, 0.7683% 1/12/38 (e)(j)(l)	3,130,372		37,423
Series 2003-LN1 Class X2, 0.6341% 10/15/37 (e)(j)(l)	19,040,052		185,774
Series 2004-C1 Class X2, 0.9723% 1/15/38 (e)(j)(l)	2,944,185		47,355
Series 2004-CB8 Class X2, 1.1064% 1/12/39 (e)(j)(l)	4,040,551		67,153
JPMorgan Chase Commercial Mortgage Securities Trust:
floater Series 2006-FLA2:
Class D, 0.6913% 11/15/18 (e)(j)	29,296		13,769
Class E, 0.7413% 11/15/18 (e)(j)	41,514		18,681
Class F, 0.7913% 11/15/18 (e)(j)	62,265		27,397
Class G, 0.8213% 11/15/18 (e)(j)	54,115		22,728
Class H, 0.9613% 11/15/18 (e)(j)	41,514		16,606
sequential payer:
Series 2006-LDP9 Class A1, 5.17% 5/15/47 (j)	961,639		935,801
Series 2008-C2 Class A1, 5.017% 2/12/51	513,979		487,349
LB Commercial Conduit Mortgage Trust sequential payer Series 1999-C1 Class A2, 6.78% 6/15/31	1,167,749		1,164,612
LB-UBS Commercial Mortgage Trust:
sequential payer:
Series 2006-C6 Class A1, 5.23% 9/15/39	663,679		648,634
Series 2006-C7 Class A1, 5.279% 11/15/38	307,493		299,971
Series 2007-C1 Class A1, 5.391% 2/15/40 (j)	403,501		394,528
Series 2007-C2 Class A1, 5.226% 2/15/40	385,495		376,136
Series 2002-C4 Class XCP, 1.3959% 10/15/35 (e)(j)(l)	9,386,557		74,735
Series 2002-C7 Class XCP, 0.9632% 1/15/36 (e)(j)(l)	6,724,444		54,434
Series 2003-C1 Class XCP, 1.2936% 12/15/36 (e)(j)(l)	4,200,213		52,154
Series 2004-C2 Class XCP, 0.8376% 3/15/36 (e)(j)(l)	6,373,742		124,747
Commercial Mortgage Securities - continued
	Principal Amount		Value
LB-UBS Commercial Mortgage Trust: - continued
Series 2004-C6 Class XCP, 0.6492% 8/15/36 (e)(j)(l)	$ 9,461,807		$ 117,874
Series 2005-C7 Class XCP, 0.1676% 11/15/40 (j)(l)	73,994,079		436,728
Series 2006-C1 Class XCP, 0.308% 2/15/41 (j)(l)	55,680,894		603,046
Series 2006-C6 Class XCP, 0.6633% 9/15/39 (j)(l)	26,139,968		564,521
Series 2007-C1 Class XCP, 0.4751% 2/15/40 (j)(l)	10,274,564		163,650
Series 2007-C2 Class XCP, 0.5002% 2/15/40 (j)(l)	49,695,301		896,926
LB-UBS Westfield Trust:
Series 2001-WM Class X, 0.5408% 7/14/16 (e)(j)(l)	11,812,293		126,898
Series 2001-WM, 6.754% 7/14/16 (e)	1,085,000		978,870
Lehman Brothers Floating Rate Commercial Mortgage Trust floater Series 2006-LLFA:
Class F, 0.795% 9/15/21 (e)(j)	145,070		59,632
Class G, 0.815% 9/15/21 (e)(j)	286,588		104,858
Class H, 0.855% 9/15/21 (e)(j)	73,934		25,570
Merrill Lynch Mortgage Trust:
Series 2002-MW1 Class XP, 1.5454% 7/12/34 (e)(j)(l)	3,931,968		22,221
Series 2005-MCP1 Class XP, 0.5561% 6/12/43 (j)(l)	13,041,162		226,890
Series 2005-MKB2 Class XP, 0.2538% 9/12/42 (j)(l)	6,482,678		40,998
Merrill Lynch-CFC Commercial Mortgage Trust:
sequential payer:
Series 2007-6 Class A1, 5.175% 3/12/51	427,922		416,976
Series 2007-8 Class A1, 4.622% 8/12/49	689,274		657,256
Series 2006-4 Class XP, 0.6219% 12/12/49 (j)(l)	20,761,780		474,600
Morgan Stanley Capital I Trust:
floater:
Series 2006-XLF Class C, 1.662% 7/15/19 (e)(j)	104,414		10,441
Series 2007-XCLA Class A1, 0.662% 7/17/17 (e)(j)	347,799		191,289
Series 2007-XLCA Class B, 0.9613% 7/17/17 (e)(j)	197,974		17,818
Series 2007-XLFA:
Class D, 0.652% 10/15/20 (e)(j)	84,694		21,174
Class E, 0.712% 10/15/20 (e)(j)	105,926		21,185
Class F, 0.762% 10/15/20 (e)(j)	63,569		11,442
Class G, 0.802% 10/15/20 (e)(j)	78,581		11,787
Class H, 0.892% 10/15/20 (e)(j)	49,464		4,946
Class J, 1.042% 10/15/20 (e)(j)	56,462		4,517
Class MHRO, 1.152% 10/15/20 (e)(j)	22,950		2,525
Class MJPM, 1.462% 10/15/20 (e)(j)	7,766		699
Class MSTR, 1.162% 10/15/20 (e)(j)	14,148		1,981
Class NHRO, 1.352% 10/15/20 (e)(j)	33,519		3,017
Class NSTR, 1.312% 10/15/20 (e)(j)	13,176		1,449
Commercial Mortgage Securities - continued
	Principal Amount		Value
Morgan Stanley Capital I Trust: - continued
sequential payer:
Series 2003-IQ5 Class X2, 0.9046% 4/15/38 (e)(j)(l)	$ 6,047,521		$ 108,231
Series 2006-HQ8 Class A1, 5.124% 3/12/44	191,719		189,813
Series 2006-T23 Class A1, 5.682% 8/12/41	496,908		480,903
Series 2007-HQ11 Class A1, 5.246% 2/20/44	695,735		675,564
Series 2003-IQ6 Class X2, 0.5824% 12/15/41 (e)(j)(l)	12,134,174		173,292
Series 2005-HQ5 Class X2, 0.2375% 1/14/42 (j)(l)	14,114,670		90,004
Series 2005-IQ9 Class X2, 1.0444% 7/15/56 (e)(j)(l)	12,908,616		311,271
Series 2005-TOP17 Class X2, 0.5794% 12/13/41 (j)(l)	9,130,627		162,900
Series 2007-XLC1:
Class C, 1.0613% 7/17/17 (e)(j)	270,216		21,617
Class D, 1.1613% 7/17/17 (e)(j)	127,146		8,900
Class E, 1.2613% 7/17/17 (e)(j)	103,321		6,199
Morgan Stanley Dean Witter Capital I Trust:
Series 2003-HQ2 Class X2, 1.327% 3/12/35 (e)(j)(l)	9,955,515		231,079
Series 2003-TOP9 Class X2, 1.4362% 11/13/36 (e)(j)(l)	5,194,394		130,787
STRIPS III Ltd./STRIPS III Corp. floater Series 2004-1A Class A, 0.9525% 3/24/18 (e)(j)	274,263		224,896
Wachovia Bank Commercial Mortgage Trust:
floater:
Series 2005-WL5A Class K, 1.655% 1/15/18 (e)(j)	161,978		89,088
Series 2006-WL7A:
Class E, 0.735% 9/15/21 (e)(j)	176,861		72,513
Class F, 0.795% 8/11/18 (e)(j)	238,334		71,500
Class G, 0.815% 8/11/18 (e)(j)	225,785		56,446
Class J, 0.9331% 8/11/18 (e)(j)	50,198		18,071
Class X1A, 0.0239% 9/15/21 (e)(j)(l)	359,324		3
Series 2007-WHL8:
Class AP1, 1.155% 6/15/20 (e)(j)	11,855		2,964
Class AP2, 1.255% 6/15/20 (e)(j)	19,414		3,883
Class F, 0.935% 6/15/20 (e)(j)	376,985		120,635
Class LXR2, 1.255% 6/15/20 (e)(j)	257,008		38,551
sequential payer:
Series 2003-C7 Class A1, 4.241% 10/15/35 (e)	2,650,553		2,506,054
Series 2007-C30 Class A1, 5.031% 12/15/43	665,108		646,879
Series 2007-C31 Class A1, 5.14% 4/15/47	452,777		440,310
Commercial Mortgage Securities - continued
	Principal Amount		Value
Wachovia Bank Commercial Mortgage Trust: - continued
Series 2005-C18 Class XP, 0.3252% 4/15/42 (e)(j)(l)	$ 19,778,807		$ 174,724
Series 2005-C20 Class A3SF, 0.4588% 7/15/42 (j)	1,332,935		1,189,479
Series 2006-C23 Class X, 0.0807% 1/15/45 (e)(j)(l)	259,571,789		1,127,684
Series 2006-C24 Class XP, 0.0768% 3/15/45 (e)(j)(l)	44,853,665		189,372
Series 2007-C30 Class XP, 0.4336% 12/15/43 (e)(j)(l)	50,509,717		827,536
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $64,925,031)		55,645,381
Commercial Paper - 1.0%
Bank of Nova Scotia yankee 0.76% 5/12/09	2,000,000		1,995,901
HVB U.S. Finance, Inc. yankee 1.4% 3/9/09	1,480,000		1,479,855
Lloyds TSB Bank PLC yankee 1.15% 5/11/09	4,000,000		3,991,986
Rabobank USA Financial Corp. yankee 0.9% 8/10/09	4,000,000		3,988,283
TOTAL COMMERCIAL PAPER (Cost $11,450,900)		11,456,025

Fixed-Income Funds - 0.3%
	Shares
Fidelity 1-3 Year Duration Securitized Bond Central Fund (k) (Cost $4,775,182)	47,909		3,398,205
Cash Equivalents - 9.2%
	Maturity Amount
Investments in repurchase agreements in a joint trading account at:
0.26%, dated 2/27/09 due 3/2/09 (Collateralized by U.S. Government Obligations) #	$ 8,168,176		8,168,000
0.28%, dated 2/27/09 due 3/2/09 (Collateralized by U.S. Government Obligations) # (a)	101,752,374		101,750,000
TOTAL CASH EQUIVALENTS (Cost $109,918,000)		109,918,000
TOTAL INVESTMENT PORTFOLIO - 110.3% (Cost $1,384,047,682)			1,319,914,416
NET OTHER ASSETS - (10.3)%			(123,079,751)
NET ASSETS - 100%		$ 1,196,834,665

Futures Contracts
	Expiration Date	Underlying Face Amount at Value	Unrealized Appreciation/ (Depreciation)
Purchased
Eurodollar Contracts
95 Eurodollar 90 Day Index Contracts	March 2009	$ 94,694,219	$ 504,389
92 Eurodollar 90 Day Index Contracts	June 2009	91,699,850	220,158
92 Eurodollar 90 Day Index Contracts	Sept. 2009	91,683,750	227,758
49 Eurodollar 90 Day Index Contracts	Dec. 2009	48,810,738	(12,232)
49 Eurodollar 90 Day Index Contracts	March 2010	48,795,425	(11,170)
TOTAL EURODOLLAR CONTRACTS			$ 928,903
Swap Agreements
		Notional Amount	Value
Credit Default Swaps
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R9 Class M5, 5.5913% 10/25/34 (Rating-Ba2) (i)	Nov. 2034	$ 362,000	$ (335,276)
Receive monthly notional amount multiplied by 3.05% and pay Merrill Lynch upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8, Class B3, 7.2913% 9/25/34 (Rating-B1) (i)	Oct. 2034	119,687	(64,278)
Receive monthly notional amount multiplied by 5% and pay Deutsche Bank upon credit event of MASTR Asset Backed Securities Trust, par value of the notional amount of MASTR Asset Backed Securities Trust Series 2003-NC1 Class M6, 8.1913% 4/25/33 (Rating-Baa3) (i)	May 2033	362,000	(304,161)
Receive monthly notional amount multiplied by 3.35% and pay Morgan Stanley, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-HE7, Class B3, 9.01% 8/25/34 (Rating-C) (i)	Sept. 2034	105,811	(97,196)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by .82% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC6 Class M3, 5.6413% 7/25/34 (Rating-Baa2) (i)	August 2034	$ 87,388	$ (51,382)
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8 Class M6, 5.4413% 9/25/34 (Rating-A3) (i)	Oct. 2034	108,324	(64,182)
Receive monthly notional amount multiplied by 2.54% and pay Merrill Lynch upon credit event of Countrywide Home Loans, Inc., par value of the notional amount of Countrywide Home Loans, Inc. Series 2003-BC1 Class B1, 7.6913% 3/25/32 (Rating-Baa3) (i)	April 2032	31,876	(25,904)
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-1 Class M9, 7.3913% 2/25/34 (Rating-Baa3) (i)	March 2034	$ 26,379	$ (1,759)
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-A Class B3, 7.0413% 1/25/34 (Rating-Ba2) (i)	Feb. 2034	1,009	(953)
Receive quarterly notional amount multiplied by .41% and pay Merrill Lynch, Inc. upon credit event of Talisman Energy, Inc., par value of the notional amount of Talisman Energy, Inc. 7.25% 10/15/27 (Rating-Baa2) (i)	March 2009	1,000,000	(340)
		$ 2,204,474	$ (945,431)

Legend

(a) Includes investment made with cash collateral received from securities on loan.

(b) Non-income producing - Issuer is in default.

(c) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end.

(d) Security or a portion of the security is on loan at period end.

(e) 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. At the end of the period, the value of these securities amounted to $76,625,051 or 6.4% of net assets.

(f) Under the Temporary Liquidity Guarantee Program, the Federal Deposit Insurance Corporation guarantees principal and interest in the event of payment default or bankruptcy until the earlier of maturity date of the debt or until June 30, 2012. At the end of the period these securities amounted to $13,545,486 or 1.1% of net assets.

(g) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $455,011.

(h) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $1,300,031.

(i) Represents a credit default swap contract in which the fund has sold protection on the underlying reference entity. For the underlying reference entity, ratings disclosed are from Moody's Investor Services, Inc. Where Moody's ratings are not available, S&P ratings are disclosed and are indicated as such. Any underlying reference entity which is Not Rated (NR) by Moody's or S&P is designated as such. All ratings are as of the report date and do not reflect subsequent changes.

(j) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(k) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's web site or upon request.

(l) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.

(m) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $1,780,811 or 0.1% of net assets.

Additional information on each holding is as follows:

Security	Acquisition Date	Acquisition Cost
Iberbond 2004 PLC 4.826% 12/24/17	11/30/05	$ 2,132,642

(n) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(o) Non-income producing.

# Additional Information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value
$8,168,000 due 3/02/09 at 0.26%
Goldman, Sachs & Co.	$ 3,202,673
UBS Securities LLC	4,965,327
	$ 8,168,000
$101,750,000 due 3/02/09 at 0.28%
J.P. Morgan Securities, Inc.	$ 101,750,000

Affiliated Central Funds

Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:

Fund	Income earned
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ 91,860
Fidelity Ultra-Short Central Fund	542,289
Total	$ 634,149

Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows:

Fund	Value, beginning of period	Purchases	Sales Proceeds	Value, end of period	% ownership, end of period
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ 6,291,778	$ 91,859	$ 2,298,181	$ 3,398,205	0.4%
Fidelity Ultra-Short Central Fund	76,202,764	-	64,126,624*	-	0.0%
Total	$ 82,494,542	$ 91,859	$ 66,424,805	$ 3,398,205

* Includes the value of shares redeemed through in-kind contributions. See Note 6 of the Notes to Financial Statements.

Other Information

The following is a summary of the inputs used, as of February 28, 2009, involving the Fund's assets carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:
Description	Total	Level 1	Level 2	Level 3
Investments in Securities	$ 1,319,914,416	$ 3,398,205	$ 1,296,911,348	$ 19,604,863
Other Financial Instruments*	$ (16,528)	$ 928,903	$ (355,884)	$ (589,547)

*Other financial instruments include Futures Contracts and Swap Agreements.

The following is a reconciliation of assets for which Level 3 inputs were used in determining value:

	Investments in Securities	Other Financial Instruments
Beginning Balance	$ 2,559,315	$ (1,233,143)
Total Realized Gain (Loss)	29,878	-
Total Unrealized Gain (Loss)	(9,640,355)	718,552
Cost of Purchases	5,259,619	-
Proceeds of Sales	(1,266,337)	-
Amortization/Accretion	(628,234)	-
Transfer in/out of Level 3	23,290,977	(74,956)
Ending Balance	$ 19,604,863	$ (589,547)

* The realized gain (loss) for derivative instruments is not included in the rollforward. For the period, the realized gain (loss) on these instruments totaled $19,366.

The information used in the above reconciliation represents fiscal year to date activity for any Investment Securities or Other Financial Instruments identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period.

Income Tax Information

At August 31, 2008, the fund had a capital loss carryforward of approximately $13,532,123 of which $6,438,298, $4,621,616, $1,110,250 and $1,361,959 will expire on August 31, 2013, 2014, 2015 and 2016, respectively.

The fund intends to elect to defer to its fiscal year ending August 31, 2009 approximately $22,088,797 of losses recognized during the period November 1, 2007 to August 31, 2008.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

	February 28, 2009
Assets
Investment in securities, at value (including securities loaned of $99,755,000 and repurchase agreements of $109,918,000) - See accompanying schedule: Unaffiliated issuers (cost $1,379,272,500)	$ 1,316,516,211
Fidelity Central Funds (cost $4,775,182)	3,398,205
Total Investments (cost $1,384,047,682)		$ 1,319,914,416
Cash		65,223
Receivable for investments sold		22,854,218
Receivable for swap agreements		5,225
Receivable for fund shares sold		1,522,397
Interest receivable		6,512,166
Distributions receivable from Fidelity Central Funds		9,878
Prepaid expenses		11,891
Total assets		1,350,895,414
Liabilities
Payable for investments purchased
Regular delivery	$ 3,140,243
Delayed delivery	42,657,708
Payable for swap agreements	552,911
Payable for fund shares redeemed	4,036,969
Distributions payable	165,302
Unrealized depreciation on swap agreements	945,431
Accrued management fee	325,293
Distribution fees payable	167,787
Payable for daily variation on futures contracts	413
Other affiliated payables	238,874
Other payables and accrued expenses	79,818
Collateral on securities loaned, at value	101,750,000
Total liabilities		154,060,749
Net Assets		$ 1,196,834,665
Net Assets consist of:
Paid in capital		$ 1,324,587,000
Undistributed net investment income		1,136,164
Accumulated undistributed net realized gain (loss) on investments		(64,738,707)
Net unrealized appreciation (depreciation) on investments		(64,149,792)
Net Assets		$ 1,196,834,665

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Assets and Liabilities - continued

	February 28, 2009
Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($275,529,961 ÷ 31,827,444 shares)		$ 8.66
Maximum offering price per share (100/98.50 of $8.66)		$ 8.79
Class T: Net Asset Value and redemption price per share ($267,576,604 ÷ 30,880,368 shares)		$ 8.66
Maximum offering price per share (100/98.50 of $8.66)		$ 8.79
Class B: Net Asset Value and offering price per share ($12,563,850 ÷ 1,456,263 shares)A		$ 8.63
Class C: Net Asset Value and offering price per share ($107,987,298 ÷ 12,464,493 shares)A		$ 8.66
Institutional Class: Net Asset Value, offering price and redemption price per share ($533,176,952 ÷ 61,355,547 shares)		$ 8.69

^A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

	Six months ended February 28, 2009
Investment Income
Interest		$ 21,855,717
Income from Fidelity Central Funds		634,149
Total income		22,489,866
Expenses
Management fee	$ 2,036,417
Transfer agent fees	1,272,220
Distribution fees	1,009,781
Accounting and security lending fees	224,249
Custodian fees and expenses	19,060
Independent trustees' compensation	2,451
Registration fees	56,002
Audit	88,500
Legal	2,162
Miscellaneous	12,952
Total expenses before reductions	4,723,794
Expense reductions	(6,202)	4,717,592
Net investment income		17,772,274
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	184,047
Fidelity Central Funds	(28,977,784)
Futures contracts	1,682,875
Swap agreements	129,730
Total net realized gain (loss)		(26,981,132)
Change in net unrealized appreciation (depreciation) on: Investment securities	(13,690,035)
Futures contracts	(563,782)
Swap agreements	844,038
Total change in net unrealized appreciation (depreciation)		(13,409,779)
Net gain (loss)		(40,390,911)
Net increase (decrease) in net assets resulting from operations		$ (22,618,637)

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

	Six months ended February 28, 2009	Year ended August 31, 2008
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 17,772,274	$ 54,585,898
Net realized gain (loss)	(26,981,132)	(24,447,492)
Change in net unrealized appreciation (depreciation)	(13,409,779)	(22,462,426)
Net increase (decrease) in net assets resulting from operations	(22,618,637)	7,675,980
Distributions to shareholders from net investment income	(16,520,027)	(54,115,364)
Share transactions - net increase (decrease)	(138,734,810)	(18,385,435)
Total increase (decrease) in net assets	(177,873,474)	(64,824,819)
Net Assets
Beginning of period	1,374,708,139	1,439,532,958
End of period (including undistributed net investment income of $1,136,164 and distributions in excess of net investment income of $116,083, respectively)	$ 1,196,834,665	$ 1,374,708,139

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

	Six months ended February 28,	Years ended August 31,
	2009	2008	2007	2006 H	2005 J	2004 J	2003 J
Selected Per-Share Data
Net asset value, beginning of period	$ 8.94	$ 9.25	$ 9.39	$ 9.39	$ 9.60	$ 9.55	$ 9.44
Income from Investment Operations
Net investment income E	.120	.364	.414	.305	.281	.202	.261
Net realized and unrealized gain (loss)	(.289)	(.315)	(.154)	.002	(.204)	.040	.128
Total from investment operations	(.169)	.049	.260	.307	.077	.242	.389
Distributions from net investment income	(.111)	(.359)	(.400)	(.307)	(.279)	(.192)	(.279)
Distributions from net realized gain	-	-	-	-	(.008)	-	-
Total distributions	(.111)	(.359)	(.400)	(.307)	(.287)	(.192)	(.279)
Net asset value, end of period	$ 8.66	$ 8.94	$ 9.25	$ 9.39	$ 9.39	$ 9.60	$ 9.55
Total Return B, C, D	(1.89)%	.51%	2.79%	3.33%	.81%	2.56%	4.16%
Ratios to Average Net Assets F, I
Expenses before reductions	.79% A	.78%	.78%	.78% A	.85%	.87%	.81%
Expenses net of fee waivers, if any	.79% A	.78%	.78%	.78% A	.85%	.87%	.81%
Expenses net of all reductions	.79% A	.78%	.77%	.78% A	.85%	.87%	.81%
Net investment income	2.77% A	3.98%	4.41%	3.91% A	2.96%	2.13%	2.74%
Supplemental Data
Net assets, end of period (000 omitted)	$ 275,530	$ 342,015	$ 412,412	$ 377,221	$ 369,512	$ 357,760	$ 186,290
Portfolio turnover rate G	277% A	94%	91% K	55% A	94%	87%	102%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. J For the period ended October 31. K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class T

	Six months ended February 28,	Years ended August 31,
	2009	2008	2007	2006 H	2005 J	2004 J	2003 J
Selected Per-Share Data
Net asset value, beginning of period	$ 8.94	$ 9.26	$ 9.40	$ 9.40	$ 9.60	$ 9.55	$ 9.45
Income from Investment Operations
Net investment income E	.122	.368	.417	.308	.284	.207	.261
Net realized and unrealized gain (loss)	(.290)	(.327)	(.154)	.002	(.194)	.038	.118
Total from investment operations	(.168)	.041	.263	.310	.090	.245	.379
Distributions from net investment income	(.112)	(.361)	(.403)	(.310)	(.282)	(.195)	(.279)
Distributions from net realized gain	-	-	-	-	(.008)	-	-
Total distributions	(.112)	(.361)	(.403)	(.310)	(.290)	(.195)	(.279)
Net asset value, end of period	$ 8.66	$ 8.94	$ 9.26	$ 9.40	$ 9.40	$ 9.60	$ 9.55
Total Return B, C, D	(1.88)%	.43%	2.82%	3.36%	.95%	2.59%	4.04%
Ratios to Average Net Assets F, I
Expenses before reductions	.77% A	.76%	.75%	.74% A	.81%	.83%	.82%
Expenses net of fee waivers, if any	.77% A	.76%	.75%	.74% A	.81%	.83%	.82%
Expenses net of all reductions	.77% A	.76%	.75%	.74% A	.81%	.83%	.82%
Net investment income	2.79% A	4.01%	4.44%	3.95% A	2.99%	2.16%	2.73%
Supplemental Data
Net assets, end of period (000 omitted)	$ 267,577	$ 334,850	$ 516,227	$ 514,917	$ 544,662	$ 517,440	$ 468,931
Portfolio turnover rate G	277% A	94%	91% K	55% A	94%	87%	102%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. J For the period ended October 31. K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class B

	Six months ended February 28,	Years ended August 31,
	2009	2008	2007	2006 H	2005 J	2004 J	2003 J
Selected Per-Share Data
Net asset value, beginning of period	$ 8.95	$ 9.27	$ 9.41	$ 9.41	$ 9.61	$ 9.56	$ 9.46
Income from Investment Operations
Net investment income E	.087	.295	.344	.247	.210	.130	.183
Net realized and unrealized gain (loss)	(.329)	(.326)	(.155)	.002	(.194)	.038	.120
Total from investment operations	(.242)	(.031)	.189	.249	.016	.168	.303
Distributions from net investment income	(.078)	(.289)	(.329)	(.249)	(.208)	(.118)	(.203)
Distributions from net realized gain	-	-	-	-	(.008)	-	-
Total distributions	(.078)	(.289)	(.329)	(.249)	(.216)	(.118)	(.203)
Net asset value, end of period	$ 8.63	$ 8.95	$ 9.27	$ 9.41	$ 9.41	$ 9.61	$ 9.56
Total Return B, C, D	(2.71)%	(.36)%	2.01%	2.68%	.17%	1.77%	3.23%
Ratios to Average Net Assets F, I
Expenses before reductions	1.55% A	1.55%	1.54%	1.54% A	1.61%	1.63%	1.61%
Expenses net of fee waivers, if any	1.55% A	1.55%	1.54%	1.54% A	1.60%	1.63%	1.61%
Expenses net of all reductions	1.55% A	1.55%	1.53%	1.53% A	1.60%	1.63%	1.61%
Net investment income	2.01% A	3.22%	3.65%	3.15% A	2.21%	1.36%	1.94%
Supplemental Data
Net assets, end of period (000 omitted)	$ 12,564	$ 11,617	$ 19,895	$ 30,678	$ 39,190	$ 53,502	$ 49,353
Portfolio turnover rate G	277% A	94%	91% K	55% A	94%	87%	102%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. J For the period ended October 31. K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class C

	Six months ended February 28,	Years ended August 31,
	2009	2008	2007	2006 H	2005 J	2004 J	2003 J
Selected Per-Share Data
Net asset value, beginning of period	$ 8.95	$ 9.26	$ 9.40	$ 9.40	$ 9.61	$ 9.55	$ 9.45
Income from Investment Operations
Net investment income E	.085	.291	.340	.244	.206	.129	.182
Net realized and unrealized gain (loss)	(.299)	(.315)	(.155)	.002	(.204)	.048	.118
Total from investment operations	(.214)	(.024)	.185	.246	.002	.177	.300
Distributions from net investment income	(.076)	(.286)	(.325)	(.246)	(.204)	(.117)	(.200)
Distributions from net realized gain	-	-	-	-	(.008)	-	-
Total distributions	(.076)	(.286)	(.325)	(.246)	(.212)	(.117)	(.200)
Net asset value, end of period	$ 8.66	$ 8.95	$ 9.26	$ 9.40	$ 9.40	$ 9.61	$ 9.55
Total Return B, C, D	(2.39)%	(.29)%	1.98%	2.65%	.02%	1.86%	3.19%
Ratios to Average Net Assets F, I
Expenses before reductions	1.60% A	1.58%	1.57%	1.58% A	1.64%	1.65%	1.64%
Expenses net of fee waivers, if any	1.60% A	1.58%	1.57%	1.58% A	1.64%	1.65%	1.64%
Expenses net of all reductions	1.60% A	1.58%	1.57%	1.57% A	1.64%	1.65%	1.64%
Net investment income	1.96% A	3.18%	3.62%	3.12% A	2.16%	1.34%	1.91%
Supplemental Data
Net assets, end of period (000 omitted)	$ 107,987	$ 97,150	$ 129,105	$ 156,364	$ 194,992	$ 273,166	$ 359,779
Portfolio turnover rate G	277% A	94%	91% K	55% A	94%	87%	102%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. I Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. J For the period ended October 31. K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Institutional Class

	Six months ended February 28,	Years ended August 31,
	2009	2008	2007	2006 G	2005 I	2004 I	2003 I
Selected Per-Share Data
Net asset value, beginning of period	$ 8.94	$ 9.26	$ 9.40	$ 9.40	$ 9.60	$ 9.55	$ 9.45
Income from Investment Operations
Net investment income D	.132	.385	.435	.321	.301	.225	.278
Net realized and unrealized gain (loss)	(.260)	(.324)	(.154)	.003	(.194)	.038	.119
Total from investment operations	(.128)	.061	.281	.324	.107	.263	.397
Distributions from net investment income	(.122)	(.381)	(.421)	(.324)	(.299)	(.213)	(.297)
Distributions from net realized gain	-	-	-	-	(.008)	-	-
Total distributions	(.122)	(.381)	(.421)	(.324)	(.307)	(.213)	(.297)
Net asset value, end of period	$ 8.69	$ 8.94	$ 9.26	$ 9.40	$ 9.40	$ 9.60	$ 9.55
Total Return B, C	(1.43)%	.65%	3.02%	3.51%	1.14%	2.78%	4.24%
Ratios to Average Net Assets E, H
Expenses before reductions	.54% A	.54%	.55%	.57% A	.63%	.64%	.63%
Expenses net of fee waivers, if any	.54% A	.54%	.55%	.57% A	.63%	.64%	.63%
Expenses net of all reductions	.54% A	.54%	.55%	.57% A	.63%	.64%	.63%
Net investment income	3.02% A	4.23%	4.64%	4.12% A	3.18%	2.35%	2.92%
Supplemental Data
Net assets, end of period (000 omitted)	$ 533,177	$ 589,076	$ 361,894	$ 224,908	$ 151,257	$ 98,505	$ 91,138
Portfolio turnover rate F	277% A	94%	91% J	55% A	94%	87%	102%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. G For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006. H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. I For the period ended October 31. J Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Notes to Financial Statements

For the period ended February 28, 2009

1. Organization.

Fidelity Advisor Short Fixed-Income Fund (the Fund) is a fund of Fidelity Advisor Series II (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of four years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

2. Investments in Fidelity Central Funds.

The Fund may invest in Fidelity Central Funds, which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.

Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.

Fidelity Central Fund	Investment Manager	Investment Objective	Investment Practices
Fidelity 1-3 Year Duration Securitized Bond Central Fund	Fidelity Investment Money Management, Inc. (FIMM)	Seeks a high level of income by normally investing in investment-grade securitized debt securities and repurchase agreements for those securities.	Futures Repurchase Agreements Restricted Securities Swap Agreements

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Notes to Financial Statements - continued

2. Investments in Fidelity Central Funds - continued

An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's web site or upon request.

3. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Fund uses independent pricing services approved by the Board of Trustees to value its investments.

Debt securities, including restricted securities, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Swaps are marked-to-market daily based on valuations from independent pricing services or dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value. Actual prices received at disposition may differ.

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3. Significant Accounting Policies - continued

Security Valuation - continued

When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.

The Fund adopted the provisions of Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (SFAS 157), effective with the beginning of the Fund's fiscal year. SFAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when market prices are not readily available or reliable. The three levels of the hierarchy under SFAS 157 are described below:

Level 1	Quoted prices in active markets for identical securities.
Level 2	Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.
Level 3	Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable or deemed less relevant (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund's own assumptions about the factors market participants would use in pricing an investment, and would be based on the best information available.

Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy.

The aggregate value by input level, as of February 28, 2009, for the Fund's investments, as well as a reconciliation of assets for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments.

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Notes to Financial Statements - continued

3. Significant Accounting Policies - continued

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Dividend income is recorded on the ex-dividend date. Interest income and distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years. Foreign taxes are provided for based on the Fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.

Semiannual Report

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to futures transactions, swap agreements, prior period premium and discount on debt securities, market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, capital loss carryforwards, expiring capital loss carryforwards and losses deferred due to wash sales excise tax regulations.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:

Unrealized appreciation	$ 11,144,009
Unrealized depreciation	(74,799,397)
Net unrealized appreciation (depreciation)	$ (63,655,388)
Cost for federal income tax purposes	$ 1,383,569,804

New Accounting Pronouncement. In March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for reporting periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance.

Semiannual Report

Notes to Financial Statements - continued

4. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Delayed Delivery Transactions and When-Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. Securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Futures Contracts. The Fund may use futures contracts to manage its exposure to the bond market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to

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4. Operating Policies - continued

Futures Contracts - continued

meet margin requirements are identified in the Schedule of Investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract's terms.

Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.

Swap Agreements. The Fund entered into swap agreements, which are contracts between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Gains or losses are realized in the event of an early termination of a swap agreement. Risks of loss may exceed amounts recognized on the Fund's Statement of Assets and Liabilities. Risks of loss may include unfavorable changes in the returns of the underlying instruments or indexes, adverse fluctuations of interest rates, failure of the counterparty to perform under the terms of the agreement and lack of liquidity in the market. Details of swap agreements open at period end are included in the Fund's Schedule of Investments under the caption "Swap Agreements." Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian bank in accordance with the swap agreement and if required, is identified in the Fund's Schedule of Investments. The Fund could experience delays and costs in gaining access to the collateral even though it is held in the Fund's custodian bank.

The Fund entered into credit default swap agreements to provide a measure of protection against defaults of an issuer ("buyer of protection") and/or to gain credit exposure to an issuer to which it is not otherwise exposed ("seller of protection"). The issuer may be either a single issuer or a "basket" of issuers. As a buyer of protection, the Fund does so when it holds bonds of the issuer or without owning the underlying asset or debt issued by the reference entity. Under the terms of a credit default swap the buyer of protection

Semiannual Report

Notes to Financial Statements - continued

4. Operating Policies - continued

Swap Agreements - continued

(buyer) receives credit protection in exchange for making periodic payments to the seller of protection (seller) based on a fixed percentage applied to a notional principal amount. In return for these payments, the seller acts as a guarantor of the credit worthiness of a reference obligation. Any upfront payments made or received upon entering a credit default swap contract would be amortized or accreted over the life of the swap and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Periodic payments are made over the life of the contract provided that no credit event occurs. For credit default swaps on asset-backed securities, a credit event may be triggered by events such as failure to pay principal, maturity extension, rating downgrade or write-down. For credit default swaps on corporate or sovereign issuers, a credit event may be triggered by events such as bankruptcy, failure to pay, obligation acceleration, repudiation/moratorium or restructuring. If a credit event were to occur during the term of the contract, upon notification from the buyer, the seller is obligated to take delivery from the buyer the notional amount of a reference obligation, at par. The difference between the value of the obligation received and the notional amount paid is recorded as a realized loss to the seller. For credit default swaps on asset-backed securities, the reference obligation described represents the security that will be put to the seller. For credit default swaps on corporate or sovereign issuers, under the terms of the agreement, the obligation that is put to the seller is not limited to the specific reference obligation described in the Fund's Schedule of Investments.

The notional amount of credit default swaps is included in the Fund's Schedule of Investments and approximates the maximum potential amount of future payments that the Fund could be required to make if the Fund is the seller of protection and a credit event were to occur. The total notional amount of all credit default swaps open at period end where the Fund is the seller of protection amounted to $2,204,474 representing 0.2% of net assets.

The value of each credit default swap and credit rating disclosed for each reference obligation in the Fund's Schedule of Investments, where the Fund is the seller of protection, are both measures of the current payment/performance risk of the swap. As the value of the swap changes as a positive or negative percentage of the total notional amount, the payment/performance risk may decrease or increase, respectively. Any current or future declines in the value of the swap may be partially offset by upfront payments received by the Fund as the seller of protection if applicable. In addition to these measures, FMR monitors a variety of factors including cash flow assumptions, market activity and market sentiment as part of its ongoing process of assessing payment/performance risk.

Semiannual Report

5. Purchases and Sales of Investments.

Purchases and sales of securities (including the Fixed-Income Central Funds), other than short-term securities and U.S. government securities, aggregated $67,400,338 and $193,118,279, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .32% of the Fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services.

For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

	Distribution Fee	Service Fee	Paid to FDC	Retained by FDC
Class A	-%	.15%	$ 235,443	$ 6,369
Class T	-%	.15%	223,672	4,264
Class B	.65%	.25%	57,981	42,119
Class C	.75%	.25%	492,685	40,588
			$ 1,009,781	$ 93,340

Sales Load. FDC receives a front-end sales charge of up to 1.50% for selling Class A and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of a contingent deferred sales charges levied on Class A, Class T, Class B and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 3% to 1% for Class B, 1% for Class C, .75% to ..50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

Semiannual Report

Notes to Financial Statements - continued

6. Fees and Other Transactions with Affiliates - continued

Sales Load - continued

For the period, sales charge amounts retained by FDC were as follows:

	Retained by FDC
Class A	$ 16,956
Class T	7,064
Class B*	23,671
Class C*	10,299
	$ 57,990

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.

For the period, the total transfer agent fees paid by each class were as follows:

	Amount	% of Average Net Assets *
Class A	$ 394,567	.25
Class T	340,704	.23
Class B	16,268	.25
Class C	100,838	.21
Institutional Class	419,843	.15
	$ 1,272,220

* Annualized

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the Fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Other Affiliated Transactions. On January 23, 2009, Fidelity Ultra-Short Central Fund ("Ultra-Short"), a Fidelity Central Fund in which the Fund invests, was liquidated pursuant to a Plan of Liquidation and Dissolution approved by its Board of Trustees on January 15, 2009. Under the plan, Ultra-Short distributed in-kind all of its net assets to its shareholders pro rata at its net asset value (NAV) per share of $62.53 determined as of the close of business on the liquidation date. As a result, the Fund received cash and securities, including accrued interest, of $38,383,060 in return for 613,870 shares of Ultra-Short. This is considered taxable to the Fund for federal income tax purposes.

Semiannual Report

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3,941 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. Security Lending.

The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of interest income. Net income from lending portfolio securities during the period amounted to $174,359.

9. Expense Reductions.

Through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $6,202.

10. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Semiannual Report

Notes to Financial Statements - continued

10. Other - continued

In March 2009, the Board of Directors of the Fidelity 1-3 Year Duration Securitized Bond Central Fund ("1-3 Year"), a Fidelity Central Fund in which the Fund invests, approved a Plan of Liquidation and Dissolution. Under the plan, 1-3 Year will distribute in-kind all of its net assets to its shareholders pro rata at the NAV per share of 1-3 Year determined as of the close of business on or about June 19, 2009.

11. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

	Six months ended February 28, 2009	Year ended August 31, 2008
From net investment income
Class A	$ 4,031,155	$ 15,639,258
Class T	3,865,297	17,927,649
Class B	115,075	501,393
Class C	850,140	3,571,643
Institutional Class	7,658,360	16,475,421
Total	$ 16,520,027	$ 54,115,364

12. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class A
Shares sold	5,300,214	11,302,265	$ 46,139,585	$ 103,603,312
Reinvestment of distributions	416,206	1,539,856	3,634,570	14,071,246
Shares redeemed	(12,158,131)	(19,150,281)	(106,416,026)	(174,320,632)
Net increase (decrease)	(6,441,711)	(6,308,160)	$ (56,641,871)	$ (56,646,074)
Class T
Shares sold	3,671,556	10,974,663	$ 31,961,366	$ 100,897,906
Reinvestment of distributions	402,031	1,767,638	3,513,880	16,191,013
Shares redeemed	(10,632,998)	(31,063,213)	(93,248,596)	(283,101,603)
Net increase (decrease)	(6,559,411)	(18,320,912)	$ (57,773,350)	$ (166,012,684)

Semiannual Report

12. Share Transactions - continued

	Shares		Dollars
	Six months ended February 28, 2009	Year ended August 31, 2008	Six months ended February 28, 2009	Year ended August 31, 2008
Class B
Shares sold	849,795	661,531	$ 7,404,271	$ 6,072,366
Reinvestment of distributions	9,301	41,928	81,263	384,593
Shares redeemed	(700,372)	(1,552,588)	(6,131,754)	(14,215,142)
Net increase (decrease)	158,724	(849,129)	$ 1,353,780	$ (7,758,183)
Class C
Shares sold	3,857,523	1,924,284	$ 33,588,455	$ 17,674,887
Reinvestment of distributions	65,830	261,023	575,404	2,389,857
Shares redeemed	(2,317,232)	(5,267,046)	(20,328,992)	(48,161,144)
Net increase (decrease)	1,606,121	(3,081,739)	$ 13,834,867	$ (28,096,400)
Institutional Class
Shares sold	15,686,339	38,519,700	$ 137,902,531	$ 347,579,198
Reinvestment of distributions	818,523	1,561,667	7,155,382	14,241,593
Shares redeemed	(21,019,905)	(13,302,803)	(184,566,149)	(121,692,885)
Net increase (decrease)	(4,515,043)	26,778,564	$ (39,508,236)	$ 240,127,906

13. Credit Risk.

The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers backed by residential mortgage loans, credit card receivables and automotive loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults.

Semiannual Report

Report of Independent Registered Public Accounting Firm

To the Trustees of Fidelity Advisor Series II and Shareholders of Fidelity Advisor Short Fixed-Income Fund:

We have audited the accompanying statement of assets and liabilities of Fidelity Advisor Short Fixed-Income Fund (the Fund), a fund of Fidelity Advisor Series II, including the schedule of investments, as of February 28, 2009, and the related statement of operations for the six months then ended, the statements of changes in net assets for the six months ended February 28, 2009 and for the year ended August 31, 2008, and the financial highlights for the six months ended February 28, 2009 and for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of February 28, 2009, by correspondence with the custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Advisor Short Fixed-Income Fund as of February 28, 2009, the results of its operations for the six months then ended, the changes in its net assets for the six months ended February 28, 2009 and for the year ended August 31, 2008, and the financial highlights for the six months ended February 28, 2009 and for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

DELOITTE & TOUCHE LLP

Boston, Massachusetts

May 8, 2009

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Research & Analysis Company

Fidelity Investments Money
Management, Inc.

FIL Investment Advisors

FIL Investment Advisors (U.K.) Ltd.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA

Fidelity Service Company, Inc.
Boston, MA

Custodian

The Bank of New York Mellon
New York, NY

SFII-USAN-0409
1.784906.106

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. Investments

(a) Not applicable.

(b) 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. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders

There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Advisor Series II's Board of Trustees.

Item 11. Controls and Procedures

(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Advisor Series II's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.

(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) 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 Trust's internal control over financial reporting.

Item 12. Exhibits

(a)	(1)	Not applicable.
(a)	(2)	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.
(a)	(3)	Not applicable.
(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.

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.

Fidelity Advisor Series II

By:	/s/ John R. Hebble
	John R. Hebble
	President and Treasurer
Date:	May 11, 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.

By:	/s/ John R. Hebble
	John R. Hebble
	President and Treasurer
Date:	May 11, 2009

By:	/s/ Christine Reynolds
	Christine Reynolds
	Chief Financial Officer
Date:	May 11, 2009

EX-99.CERT

Exhibit EX-99.CERT

I, John R. Hebble, certify that:

1. I have reviewed this report on Form N-CSR of Fidelity Advisor Series II;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based upon such evaluation; and

d. Disclosed in this report any change 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 control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 11, 2009

/s/John R. Hebble

John R. Hebble

President and Treasurer

I, Christine Reynolds, certify that:

1. I have reviewed this report on Form N-CSR of Fidelity Advisor Series II;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based upon such evaluation; and

d. Disclosed in this report any change 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 control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 11, 2009

/s/Christine Reynolds

Christine Reynolds

Chief Financial Officer

EX-99.906 CERT

Exhibit EX-99.906CERT

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code)

In connection with the attached Report of Fidelity Advisor Series II (the "Trust") on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the Trust does hereby certify that, to the best of such officer's knowledge:

1. The Report fully complies with the requirements of 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust as of, and for, the periods presented in the Report.

Dated: May 11, 2009

/s/John R. Hebble

John R. Hebble

President and Treasurer

Dated: May 11, 2009

/s/Christine Reynolds

Christine Reynolds

Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Trust and will be retained by the Trust and furnished to the Securities and Exchange Commission or its staff upon request.