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<SEC-DOCUMENT>0000928816-11-000034.txt : 20110106
<SEC-HEADER>0000928816-11-000034.hdr.sgml : 20110106
<ACCEPTANCE-DATETIME>20110106155235
ACCESSION NUMBER:		0000928816-11-000034
CONFORMED SUBMISSION TYPE:	N-CSR
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20101031
FILED AS OF DATE:		20110106
DATE AS OF CHANGE:		20110106
EFFECTIVENESS DATE:		20110106

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HANCOCK JOHN INCOME SECURITIES TRUST /MA
		CENTRAL INDEX KEY:			0000759866
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-CSR
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-04186
		FILM NUMBER:		11514225

	BUSINESS ADDRESS:	
		STREET 1:		C/O JOHN HANCOCK FUNDS
		STREET 2:		601 CONGRESS STREET
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02210
		BUSINESS PHONE:		617-663-3000

	MAIL ADDRESS:	
		STREET 1:		C/O JOHN HANCOCK FUNDS
		STREET 2:		601 CONGRESS STREET
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02210
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSR
<SEQUENCE>1
<FILENAME>a_incomesecuritiestrust.htm
<DESCRIPTION>JOHN HANCOCK INCOME SECURITIES TRUST
<TEXT>
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     <TD noWrap align=center><FONT size=2 face=sans-serif>SECURITIES AND EXCHANGE COMMISSION</FONT><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><FONT size=2 face=sans-serif>Washington, D.C. 20549</FONT><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><B><FONT size=2 face=sans-serif>CERTIFIED SHAREHOLDER REPORT OF REGISTERED</FONT></B><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><B><FONT size=2 face=sans-serif>MANAGEMENT INVESTMENT COMPANIES</FONT></B><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><FONT size=2 face=sans-serif>Investment Company Act file number </FONT><U><FONT size=2 face=sans-serif>811- 4186</FONT></U><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><U><FONT size=2 face=sans-serif>John Hancock Income Securities Trust</FONT></U><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><FONT size=2 face=sans-serif>(Exact name of registrant as specified in charter)</FONT><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><U><FONT size=2 face=sans-serif>601 Congress Street, Boston, Massachusetts 02210</FONT></U><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><FONT size=2 face=sans-serif>(Address of principal executive offices) (Zip code)</FONT><FONT size=2>&nbsp;</FONT></TD>
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     <TD align=center><FONT size=2 face=sans-serif>Salvatore Schiavone</FONT></TD>
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     <TD noWrap align=center><FONT size=2 face=sans-serif>601 Congress Street</FONT><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><U><FONT size=2 face=sans-serif>Boston, Massachusetts 02210</FONT></U><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><FONT size=2 face=sans-serif>(Name and address of agent for service)</FONT><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=center><FONT size=2 face=sans-serif>Registrant's telephone number, including area code: </FONT><U><FONT size=2 face=sans-serif>617-663-4497</FONT></U><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>October 31</FONT></TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>Date of reporting period:</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>October 31, 2010</FONT></TD></TR></TABLE></DIV>
<P style="MARGIN: 0px"><FONT size=2></FONT>&nbsp;</P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 1. REPORT TO STOCKHOLDERS.</FONT></P>
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<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Management&#146;s discussion of</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=7 face=serif>Fund performance</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>By MFC Global Investment Management (U.S.), LLC</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>U.S. bonds </FONT></B><FONT size=2 face=serif>gained ground during the 12 months ended October 31, 2010. The economy delivered solid growth rates during the first half of the period, but the recovery lost momentum in the last six months, and a sovereign debt crisis in Europe further clouded the economic outlook. These developments sparked a flight to quality, and the resulting increase in demand for the relative safety of Treasury securities sent their yields down to levels not seen in decades. At the same time, the low interest-rate environment led many investors to seek out higher-yielding investments, providing a lift to corporate bonds and commercial mortgage-backed securities. High-yield corporate bonds were the best performers overall, while residential mortgage-backed securities lagged.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>For the year ended October 31, 2010, John Hancock Income Securities Trust produced a total return of 19.90% at net asset value (NAV) and 23.85% at market value. The Fund&#146;s NAV return and its market performance differ because the market share price is subject to the dynamics of secondary market trading, which could cause it to trade at a discount or premium to the Fund&#146;s NAV share price at any time. By comparison, the average UBS leveraged closed-end investment-grade bond fund returned 23.47% at NAV and 28.24% at market value. The Fund lagged the UBS peer group because it had a lower stake in corporate bonds than its best-performing peers and a higher stake in U.S. government securities, which underperformed corporate bonds. The Fund&#146;s benchmark, the Barclays Capital Government/Credit Bond Index, returned 8.48%. The Fund&#146;s outperformance of its benchmark index was driven primarily by the Fund&#146;s allocations within the bond market, par
ticularly an outsized position in corporate bonds. Top contributors among the Fund&#146;s corporate holdings included television broadcaster Nexstar Broadcasting, Inc., satellite radio company Canadian Satellite Radio Holdings, Inc. and semiconductor manufacturer Freescale Semiconductor, Inc . On the downside, one of the weaker performers was electric utility TXU Corp. Over the last six months of the period, we made some adjustments to the Fund to reduce its overall risk profile. We lowered its position in corporate bonds, taking profits after the substantial rally in the group, and shifted these assets into Treasury bonds and mortgage-backed securities, which had become more attractive on a relative-value basis.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=1 face=sans-serif>This commentary reflects the views of the portfolio managers through the end of the Fund&#146;s period discussed in this report. The managers&#146; statements reflect their own opinions. As such, they are in no way guarantees of future events, and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Past performance is no guarantee of future results.</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=1 face=sans-serif>The major factors in this Fund&#146;s performance are interest rates and credit rate risk. When interest rates rise, bond prices usually fall. Generally, an increase in the Fund&#146;s average maturity will make it more sensitive to interest-rate risk. Higher-yielding bonds are riskier than lower-yielding bonds, and their value may fluctuate more in response to market conditions.</FONT></P>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>6</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=7 face=serif>Portfolio summary</FONT></P>
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     <TD width="8%"></TD>
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     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Portfolio Composition</FONT></B><SUP><FONT size=1 face=sans-serif>1</FONT></SUP>&nbsp;</TD>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Corporate Bonds</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>62%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Asset-Backed Securities</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>U.S. Government &amp; Agency Obligations</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>26%</FONT>&nbsp;</TD>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Common Stocks</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD></TR>
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</FONT></TD>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Collateralized Mortgage Obligations</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Short-Term Investments &amp; Other</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Preferred Securities</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3%</FONT>&nbsp;</TD>
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     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Sector Composition</FONT></B><SUP><FONT size=1 face=sans-serif>1,2</FONT></SUP>&nbsp;</TD>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>U.S. Government &amp; Agency Obligations</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>26%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Consumer Staples</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Financials</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>23%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Utilities</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4%</FONT>&nbsp;</TD></TR>
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<HR SIZE=1 noShade>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Consumer Discretionary</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Telecommunication Services</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4%</FONT>&nbsp;</TD></TR>
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<HR SIZE=1 noShade>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Energy</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Health Care</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Industrials</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Information Technology</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD></TR>
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<HR SIZE=1 noShade>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Mortgage Bonds</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Short-Term Investments &amp; Other</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD></TR>
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     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Materials</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR height=20>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Quality Composition</FONT></B><SUP><FONT size=1 face=sans-serif>1,3</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=5 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>28%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9%</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4%</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>13%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Equity</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4%</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>32%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Not Rated</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Short-Term Investments &amp; Other</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
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<HR SIZE=1 noShade>
</FONT></TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><SUP><FONT size=1 face=sans-serif>1 </FONT></SUP><FONT size=1 face=sans-serif>As a percentage of the Fund&#146;s total investments on 10-31-10.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>2 </FONT></SUP><FONT size=1 face=sans-serif>Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular </FONT><FONT size=1 face=sans-serif>sectors of the economy, its performance may depend on the performance of those sectors.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>3 </FONT></SUP><FONT size=1 face=sans-serif>Ratings are from Moody&#146;s Investor Services, Inc. If not available, we have used S&amp;P ratings. In the absence of </FONT><FONT size=1 face=sans-serif>ratings from these agencies, we have used Fitch, Inc. ratings. &#147;Not Rated&#148; securities are those with no ratings avail</FONT><FONT size=1 face=sans-serif>able. They may have internal ratings similar to those shown. All are as of 10-31-10 and do not reflect subsequent </FONT><FONT size=1 face=sans-serif>downgrades, if any.</FONT></P>
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<TR>
     <TD width="95%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>7</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
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<P style="TEXT-ALIGN: left"><FONT size=7 face=serif>Fund&#146;s investments</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=4 face=sans-serif>As of 10-31-10</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="8%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Corporate Bonds 90.65%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$155,251,940</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Cost $143,544,694)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Consumer Discretionary 11.86%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>20,312,300</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Auto Components 0.38%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Allison Transmission, Inc. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$600,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>651,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Auto Manufacturers 0.36%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Volvo Treasury AB (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.950</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>555,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$610,829</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Commercial Services &amp; Supplies 0.07%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Interactive Data Corp. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>110,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>120,313</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Consumer Finance 0.62%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Nissan Motor Acceptance Corp. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-30-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,069,989</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Food Products 0.10%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Simmons Foods, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>165,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>168,713</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Hotels, Restaurants &amp; Leisure 3.70%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Greektown Superholdings, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>13.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,713,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,888,583</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>International Game Technology</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>200,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>211,302</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Jacobs Entertainment, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>600,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>562,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Little Traverse Bay Bands of Odawa Indians (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>500,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>170,625</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>MGM Resorts International (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>109,375</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>MTR Gaming Group, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>12.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>185,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>193,325</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>MTR Gaming Group, Inc., Series B (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>390,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>347,100</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Pokagon Gaming Authority (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>500,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>520,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Seminole Indian Tribe of Florida (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.535</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>650,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>584,825</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Turning Stone Resort Casino Enterprises (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,540,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,586,200</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Waterford Gaming LLC (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>257,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>169,365</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Household Durables 0.23%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
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<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Whirlpool Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.600</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>335,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>398,883</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Internet &amp; Catalog Retail 0.20%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR>
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<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Expedia, Inc. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.950</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>340,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>345,313</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Media 5.13%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>AMC Entertainment, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>125,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>133,906</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Cablevision Systems Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>135,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>152,381</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Canadian Satellite Radio Holdings, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>12.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>979,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>885,995</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>CBS Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.900</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-15-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>225,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>218,226</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>CCH II LLC/CCH II Capital Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>13.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-30-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>306,006</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>366,442</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="46%"></TD>
     <TD width="49%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>8</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
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<TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Media (continued)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR>
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<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>CCO Holdings LLC/CCO Holdings Capital</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Corp. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-30-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$145,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$156,600</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Cinemark USA, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>180,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>194,175</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Clear Channel Worldwide Holdings, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>410,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>442,800</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>DirecTV Holdings LLC (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,055,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,181,600</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>DirecTV Holdings LLC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.350</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>220,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>234,906</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Grupo Televisa SA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>310,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>342,754</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>News America Holdings, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-20-24</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,020,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,297,615</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>News America Holdings, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.600</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-11-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,209,469</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Nexstar Broadcasting, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>84,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>79,800</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Nexstar Broadcasting, Inc., PIK (0.500% until</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>1-15-11, then cash at 7.000%) (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>255,360</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>237,485</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Regal Cinemas Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>115,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>122,763</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Regal Entertainment Group</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>106,375</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Time Warner Cable, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>605,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>726,099</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>United Business Media, Ltd. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-03-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>275,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>278,967</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Viacom, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-30-30</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>350,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>413,501</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Multiline Retail 0.10%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Sears Holdings Corp. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>175,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>174,563</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Personal Products 0.20%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Revlon Consumer Products Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>320,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>333,600</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Specialty Retail 0.13%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Hillman Group, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>210,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>224,700</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Textiles, Apparel &amp; Luxury Goods 0.64%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Burlington Coat Factory Warehouse Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>535,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>563,088</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Levi Strauss &amp; Company</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>500,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>526,250</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Consumer Staples 5.54%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>9,486,556</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Beverages 0.94%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Anheuser-Busch InBev Worldwide, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,085,172</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>PepsiCo, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.900</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>395,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>529,619</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Commercial Services &amp; Supplies 0.35%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ARAMARK Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>565,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>593,250</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Food &amp; Staples Retailing 0.67%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>CVS Caremark Corp. (6.302% to 6-1-12,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>then 3 month LIBOR + 2.065%) (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.302</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,230,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,140,825</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Food Products 1.66%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bunge Ltd. Finance Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>350,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>427,249</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bunge Ltd. Finance Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.350</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,040,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,116,625</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Corn Products International, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>175,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>181,289</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Corp. Pesquera Inca SAC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-10-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>230,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>242,363</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Grupo Bimbo SAB de CV (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-30-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>470,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>491,832</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>JBS Finance II, Ltd. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-29-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>360,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>380,700</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Household Products 0.27%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Yankee Acquisition Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>455,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>472,631</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="46%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>9</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
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<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="8%"></TD>
     <TD width="15%"></TD>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Tobacco 1.65%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Alliance One International, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1,100,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Lorillard Tobacco Company (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-01-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>560,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>600,940</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Reynolds American, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,124,061</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Energy 10.91%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>18,685,723</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Energy Equipment &amp; Services 0.41%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR>
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<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>MidAmerican Energy Holdings Company (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.480</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-15-28</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>550,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>705,841</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Gas Utilities 0.31%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
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<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>DCP Midstream LLC (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>405,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>536,420</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Oil, Gas &amp; Consumable Fuels 10.19%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Anadarko Petroleum Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>440,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>488,834</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Anadarko Petroleum Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.950</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>330,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>361,063</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Arch Coal, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>112,250</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bumi Investment Pte, Ltd. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-06-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>190,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>198,233</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ConocoPhillips (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.400</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,086,711</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Drummond Company, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>430,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>442,900</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>El Paso Pipeline Partners Operating</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Company LLC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>280,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>305,453</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Energy Transfer Partners LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.700</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>330,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>435,741</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Energy Transfer Partners LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,190,247</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Enterprise Products Operating LLC (7.000% to</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>6-1-17, then 3 month LIBOR + 2.778%) (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-67</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>695,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>674,150</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Enterprise Products Operating LLC, Series B</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>(7.034% to 1-15-18, then 3 month</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>LIBOR + 2.680%) (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.034</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-68</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>590,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>609,175</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Gibson Energy ULC/GEP Midstream</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Finance Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>265,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>268,975</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Kinder Morgan Energy Partners LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-32</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>195,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>231,804</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Linn Energy LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>200,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>216,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>MarkWest Energy Partners LP, Series B (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>545,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>579,063</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>McMoRan Exploration Company (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>340,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>379,100</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Motiva Enterprises LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.850</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>280,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>330,464</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Niska Gas Storage US LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>395,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>431,538</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>NuStar Logistics LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.650</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>845,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,028,410</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>NuStar Logistics LP</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-01-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>210,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>213,603</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ONEOK Partners LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.150</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>705,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>824,450</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Pan American Energy LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-07-21</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>145,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>153,700</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Petro-Canada (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-15-21</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,400,493</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Plains All American Pipeline LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>600,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>629,651</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Regency Energy Partners LP/Regency Energy</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Finance Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>295,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>330,400</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Spectra Energy Capital LLC (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.200</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,154,579</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Thermon Industries, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>105,750</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Williams Partners LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,740,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,074,806</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Woodside Finance, Ltd. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-10-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,100,098</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,185,919</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Financials 31.49%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>53,935,953</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Capital Markets 3.23%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Credit Suisse New York (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.300</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-13-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>415,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>460,572</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Credit Suisse New York (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-05-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>555,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>571,021</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Jefferies Group, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-21</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>905,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>963,223</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="46%"></TD>
     <TD width="49%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>10</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
<HR align=center SIZE=2 width="100%" noShade>


<A name="page_7"></A><BR>
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<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="8%" align=left></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Capital Markets (continued)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Macquarie Group, Ltd. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.300</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$270,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$305,188</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Macquarie Group, Ltd. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-14-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>340,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>354,303</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Morgan Stanley (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.300</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-13-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>485,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>559,378</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Morgan Stanley</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.550</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-27-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>500,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>532,372</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Northern Trust Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>225,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>273,685</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>The Goldman Sachs Group, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.150</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>760,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>851,011</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Commercial Banks 5.30%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Barclays Bank PLC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.140</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-14-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>275,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>272,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Barclays Bank PLC (6.860% to 6-15-32,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>then 6 month LIBOR + 1.730%) (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.860</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Q)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,655,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,613,625</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>BPCE SA (12.500% to 9-30-19, then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>3 month LIBOR + 12.980%) (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>12.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Q)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>330,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>377,626</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Chuo Mitsui Trust &amp; Banking Company, Ltd.</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>(5.506% to 4-15-15, then 3 month</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>LIBOR + 2.490%) (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.506</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Q)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>940,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>934,366</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Commonwealth Bank of Australia (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-19-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>555,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>605,183</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>National City Bank (P)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.663</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-07-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>575,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>516,790</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Regions Financial Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-10-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,094,334</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Santander Issuances SA (6.500% to 11-15-14,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>then 3 month LIBOR + 3.920%) (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-11-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>600,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>627,988</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>State Bank of India/London (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-27-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>330,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>344,726</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>The Royal Bank of Scotland Group PLC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-16-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>330,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>355,292</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Wachovia Bank NA (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.600</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-38</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>325,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>360,599</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Wachovia Bank NA (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.850</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>390,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>387,618</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Wells Fargo Bank NA (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-16-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>450,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>510,832</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Westpac Banking Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-19-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>565,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>614,178</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Consumer Finance 2.75%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>American Express Credit Corp., Series C (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.300</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-20-13</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>670,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>766,172</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Capital One Financial Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,203,152</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Capital One Financial Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.150</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>730,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>810,226</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Discover Bank</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>270,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>297,996</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Discover Financial Services (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>585,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>748,046</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Ford Motor Credit Company LLC (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>140,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>163,944</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Ford Motor Credit Company LLC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>90,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>96,643</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Nelnet, Inc. (7.400% to 9-29-11, then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>3 month LIBOR + 3.375%) (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.400</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-29-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>715,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>631,569</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Diversified Financial Services 9.16%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>American Honda Finance Corp. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>655,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>837,133</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Astoria Depositor Corp., Series B (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.144</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-01-21</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,002,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bank of America Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>340,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>354,064</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Beaver Valley Funding (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>498,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>552,307</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bosphorus Financial Services, Ltd. (P)(S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.176</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>187,500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>184,383</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Citigroup, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-12-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>810,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>909,278</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Citigroup, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-21-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,935,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,153,725</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Citigroup, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.850</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-11-34</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>300,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>296,163</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Crown Castle Towers LLC (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.883</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>760,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>774,378</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ERAC USA Finance Company (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>465,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>543,906</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>General Electric Capital Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-07-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>335,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>378,453</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Harley-Davidson Funding Corp. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>300,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>326,273</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="46%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>11</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
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<DIV align=left>
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<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Diversified Financial Services (continued)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR>
     <TD colSpan=6>
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</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Harley-Davidson Funding Corp. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$290,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$312,495</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Hyundai Capital Services, Inc. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-05-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>430,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>472,007</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>International Lease Finance Corp. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>290,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>319,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>JPMorgan Chase &amp; Company (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>765,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>873,238</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>JPMorgan Chase &amp; Company (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3.700</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-20-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>590,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>623,896</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>JPMorgan Chase &amp; Company, Series 1</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>(7.900% to 4-30-18, then 3 month</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>LIBOR + 3.470%) (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.900</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Q)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>655,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>698,237</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Merrill Lynch &amp; Company, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-14-38</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>495,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>540,980</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Merrill Lynch &amp; Company, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-25-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,122,354</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Nationstar Mortgage/Nationstar Capital</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Corp. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>485,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>438,925</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Pinafore LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>135,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>144,450</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>The Bear Stearns Companies LLC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,220,192</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>USB Realty Corp. (6.091% to 1-15-12, then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>3 month LIBOR + 1.147%) (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.091</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Q)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>800,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>608,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Insurance 6.06%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Aflac, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>385,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>492,932</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Aflac, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.900</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-17-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>230,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>249,129</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>AXA SA (6.379% to 12-13-36, then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>3 month LIBOR + 2.256%) (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.379</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Q)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>175,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>164,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>CNA Financial Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.350</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>360,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>405,725</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>CNA Financial Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>825,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>913,507</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Hartford Financial Services Group, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-30-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>190,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>184,371</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Liberty Mutual Group, Inc. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>705,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>705,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Liberty Mutual Group, Inc. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>885,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>885,854</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Lincoln National Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>695,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>896,175</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Lincoln National Corp. (6.050% until</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>4-20-17, then 3 month LIBOR + 2.040%) (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.050</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-20-67</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>370,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>342,250</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Massachusetts Mutual Life Insurance</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Company (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>210,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>278,115</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>MetLife, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>335,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>401,582</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>MetLife, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-06-41</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>171,875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>181,616</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>New York Life Insurance Company (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-15-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>540,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>642,445</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Prudential Financial, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>210,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>254,534</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>QBE Insurance Group, Ltd. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-14-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>486,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>587,587</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Teachers Insurance &amp; Annuity Association of</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>America (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.850</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-16-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>605,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>711,973</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Unum Group</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-30-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>395,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>455,996</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>UnumProvident Finance Company PLC (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.850</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>605,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>684,366</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>W.R. Berkley Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.600</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>365,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>394,596</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Willis North America, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-29-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>495,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>540,503</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Real Estate Investment Trusts 5.65%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>AMB Property LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>490,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>554,880</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Biomed Realty LP (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>135,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>146,763</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Brandywine Operating Partnership LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>345,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>389,521</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Developers Diversified Realty Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>465,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>497,988</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Dexus Property Group (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>495,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>562,605</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Duke Realty LP</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>265,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>318,820</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="46%"></TD>
     <TD width="49%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
<HR align=center SIZE=2 width="100%" noShade>

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<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="8%"></TD>
     <TD width="15%"></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Real Estate Investment Trusts (continued)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Duke Realty LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$590,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$665,531</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Health Care, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.200</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>505,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>577,545</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Healthcare Realty Trust, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-01-11</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>175,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>180,916</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Healthcare Realty Trust, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-17-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>540,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>593,258</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Host Hotels &amp; Resorts, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>270,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>270,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>HRPT Properties Trust (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.650</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>480,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>519,323</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Mack-Cali Realty LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>330,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>397,489</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ProLogis (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>975,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,047,338</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ProLogis (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>385,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>408,312</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Reckson Operating Partnership LP</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>200,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>213,523</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Simon Property Group LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.350</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>345,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>487,689</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Simon Property Group LP (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-01-21</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>700,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>717,211</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Vornado Realty Trust (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>755,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>782,812</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>WEA Finance LLC / WT Finance Australia</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Property, Ltd. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-02-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>290,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>341,678</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Health Care 3.60%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>6,169,304</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Health Care Equipment &amp; Supplies 1.24%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Alere, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>185,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>198,413</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Covidien International Finance SA (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.450</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>930,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,012,365</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Hospira, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.050</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-30-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>485,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>561,446</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Inverness Medical Innovations, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>335,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>350,913</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Health Care Providers &amp; Services 2.05%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>BioScrip, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>285,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>301,388</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Express Scripts, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>935,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,077,986</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Gentiva Health Services, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>70,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>76,475</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Medco Health Solutions, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>545,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>669,677</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Medco Health Solutions, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>175,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>176,476</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Sun Healthcare Group, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,077,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>WellPoint, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>135,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>135,367</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Pharmaceuticals 0.31%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Catalent Pharma Solutions, Inc., PIK</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>425,756</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>432,142</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Valeant Pharmaceuticals International (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>95,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>99,156</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Industrials 9.17%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>15,705,145</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Aerospace &amp; Defense 0.66%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bombardier, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>240,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>266,400</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Colt Defense LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>250,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>187,813</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Embraer Overseas, Ltd. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>380,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>418,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Kratos Defense &amp; Security Solutions, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>230,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>255,300</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Airlines 2.77%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>America West Airlines</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.057</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-02-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>203,983</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>216,222</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Continental Airlines, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.307</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-02-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>161,785</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>165,021</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Continental Airlines, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.648</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>163,409</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>171,580</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Continental Airlines, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.545</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-02-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>220,778</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>232,920</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Continental Airlines, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.983</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-19-22</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>545,011</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>576,349</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Delta Air Lines, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.821</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-10-22</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>654,109</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>706,438</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Delta Air Lines, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.718</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-02-23</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>697,244</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>709,445</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Delta Air Lines, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.200</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-02-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>225,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>240,750</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="46%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>13</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
<HR align=center SIZE=2 width="100%" noShade>

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<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="8%"></TD>
     <TD width="15%"></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Airlines (continued)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Northwest Airlines, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.027</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$428,748</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$451,257</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Northwest Airlines, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.264</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-20-21</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>542,610</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>556,175</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>United Air Lines, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.400</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>190,032</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>214,736</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>United Air Lines, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>433,035</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>508,816</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Building Materials 0.60%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Voto-Votorantim Overseas Trading Operations</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>NV (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-25-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>450,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>490,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Voto-Votorantim, Ltd. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-05-21</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>490,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>539,613</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Building Products 0.17%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Masco Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>285,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>299,154</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Commercial Services &amp; Supplies 0.12%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ACCO Brands Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>95,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>107,231</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Garda World Security Corp. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>106,500</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Construction &amp; Engineering 0.20%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Tutor Perini Corp. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>335,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>340,025</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Electrical Equipment 0.13%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Coleman Cable, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>205,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>214,481</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Industrial Conglomerates 1.01%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Hutchison Whampoa International, Ltd. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-13-13</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>365,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>402,672</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Hutchison Whampoa International, Ltd. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-11-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>615,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>680,444</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Odebrecht Finance, Ltd. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-14-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>101,250</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Textron, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.600</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>505,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>548,287</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Machinery 0.48%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Terex Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>275,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>313,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>The Manitowoc Company, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>500,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>503,750</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Marine 0.61%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Navios Maritime Holdings, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,037,500</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Road &amp; Rail 1.24%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>CSX Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.300</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,068,053</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Kansas City Southern de Mexico SA de CV</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>335,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>365,595</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>RailAmerica, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>212,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>234,790</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Western Express, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>12.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>485,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>463,175</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Trading Companies &amp; Distributors 0.88%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Aircastle, Ltd.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>190,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>208,050</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>GATX Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>950,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,125,852</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>United Rentals North America, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>150,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>171,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Transportation Infrastructure 0.30%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Asciano Finance, Ltd. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-23-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>510,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>506,501</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Information Technology 1.01%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>1,725,865</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>Electronic Equipment, Instruments &amp; Components 1.01%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Equinix, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>165,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>174,900</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Fiserv, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-20-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>460,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>533,465</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Freescale Semiconductor, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,017,500</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="46%"></TD>
     <TD width="49%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
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<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="8%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Materials 6.81%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$11,658,637</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Chemicals 1.40%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>American Pacific Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$245,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>245,613</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Braskem Finance, Ltd. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-07-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>410,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>440,340</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Incitec Pivot Finance LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-10-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>345,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>365,768</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Lyondell Chemical Company (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>109,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Mosaic Company (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>480,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>521,133</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Solutia, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>280,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>309,050</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Sterling Chemicals, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>400,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>404,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Construction Materials 0.06%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Severstal Columbus LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>106,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Containers &amp; Packaging 0.34%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Graphic Packaging International, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>205,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>226,013</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Graphic Packaging International, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>105,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>111,038</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Solo Cup Company</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>85,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>88,825</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>U.S. Corrugated, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-12-13</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>160,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>148,800</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Metals &amp; Mining 2.97%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Allegheny Technologies, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>280,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>336,157</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ArcelorMittal (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.850</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>540,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>696,648</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Commercial Metals Company (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.350</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>310,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>329,735</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>FMG Resources Pty, Ltd. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>60,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>61,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Gerdau Trade, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-30-21</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>330,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>341,963</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Rain CII Carbon LLC (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,015,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,078,438</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Rio Tinto Alcan, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-15-33</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>415,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>463,860</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Teck Resources, Ltd. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,405,250</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Vale Overseas, Ltd.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-10-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>320,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>367,322</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Paper &amp; Forest Products 2.04%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Boise Paper Holdings LLC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>108,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Georgia-Pacific LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.400</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>580,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>585,800</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>International Paper Company (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>385,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>508,404</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>International Paper Company (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.950</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>530,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>648,043</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>PE Paper Escrow GmbH (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>12.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>100,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>115,983</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Verso Paper Holdings LLC, Series B (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,030,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Westvaco Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.950</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-15-31</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>475,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>505,454</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Telecommunication Services 4.34%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>7,436,507</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>Diversified Telecommunication Services 2.67%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Affinion Group Holdings, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>235,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>241,756</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Axtel SAB de CV (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-22-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>160,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>147,800</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>BellSouth Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.300</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>675,072</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>737,815</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Frontier Communications Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>635,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>733,425</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Intelsat Jackson Holdings SA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>365,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>396,938</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Qwest Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>330,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>397,650</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Telecom Italia Capital SA (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.175</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-18-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,110,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,240,273</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>West Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>630,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>680,400</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="46%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>15</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
<HR align=center SIZE=2 width="100%" noShade>

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<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="8%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>Wireless Telecommunication Services 1.67%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>America Movil SAB de CV (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-30-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$440,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$480,987</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Digicel Group, Ltd. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,080,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,096,200</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>NII Capital Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>230,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>260,763</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Sprint Capital Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.900</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,022,500</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Utilities 5.92%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>10,135,950</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Electric Utilities 4.55%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Allegheny Energy Supply Company LLC (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>460,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>482,538</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Aquila, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>515,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>592,214</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>BVPS II Funding Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.890</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>590,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>693,676</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Commonwealth Edison Company (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>525,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>611,607</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Exelon Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.900</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>985,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,085,185</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>FirstEnergy Solutions Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>370,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>399,660</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>FPL Energy National Wind LLC (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.608</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-10-24</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>270,256</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>282,382</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ITC Holdings Corp. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-30-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>175,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>199,508</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ITC Holdings Corp. (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>415,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>457,056</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Oncor Electric Delivery Company LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-30-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>820,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>911,908</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>PNPP II Funding Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.120</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-30-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>322,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>349,248</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Teco Finance, Inc. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.572</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>298,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>346,097</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Texas Competitive Electric Holdings Company</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>LLC, Series A (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>620,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>TXU Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.460</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>293,787</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>270,469</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Waterford 3 Funding Corp. (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.090</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-02-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>470,896</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>480,055</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>Independent Power Producers &amp; Energy Traders 0.73%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>AES Eastern Energy LP, Series 199-A (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-02-17</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>837,190</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>879,050</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>NRG Energy, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-01-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>355,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>376,300</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Multi-Utilities 0.29%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Sempra Energy (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>415,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>500,675</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Water Utilities 0.35%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Indiantown Cogeneration LP, Series A&#150;9 (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.260</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-15-10</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>55,351</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>55,504</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Midwest Generation LLC, Series B (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.560</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-02-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>541,465</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>542,818</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Convertible Bonds 0.52%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$886,875</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Cost $811,144)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Consumer Discretionary 0.52%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>886,875</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Media 0.52%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>XM Satellite Radio, Inc. (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>750,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>886,875</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Term Loans (M) 0.27%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$455,181</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Cost $521,699)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Consumer Discretionary 0.27%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>455,181</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Hotels, Restaurants &amp; Leisure 0.27%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>East Valley Tourist Development Authority</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>12.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-06-12</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>524,704</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>455,181</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="46%"></TD>
     <TD width="49%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
<HR align=center SIZE=2 width="100%" noShade>


<A name="page_13"></A><BR>
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<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="8%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Capital Preferred Securities 0.66%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$1,137,125</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Cost $1,174,061)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Financials 0.66%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Capital Markets 0.39%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>State Street Capital Trust IV (P)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.292</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-15-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$905,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>667,737</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Commercial Banks 0.27%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Sovereign Capital Trust VI (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.908</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-13-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>480,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>469,388</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>U.S. Government &amp; Agency Obligations 37.56%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$64,326,494</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Cost $63,041,396)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>U.S. Government 9.89%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>16,936,057</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>U.S. Treasury Bonds</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,530,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,752,956</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-15-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,485,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,582,921</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>U.S. Treasury Notes</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4,195,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4,199,589</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-31-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,075,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,167,004</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-31-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,225,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,244,150</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-30-15</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,980,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,989,437</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>U.S. Government Agency 27.67%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>47,390,437</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Federal Home Loan Mortgage Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>67,122</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>74,063</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>131,359</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>144,695</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>242,695</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>268,471</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>121,203</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>133,432</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>82,218</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>90,565</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-01-38</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>248,534</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>273,611</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-01-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,297,784</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,626,403</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-01-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>219,447</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>241,314</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-01-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,485,419</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,650,458</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-01-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6,223,397</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6,413,836</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Federal National Mortgage Association</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>15 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-24</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,345,892</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,411,548</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>15 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-24</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,183,092</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,338,371</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>15 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,015,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,019,664</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>02-01-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,223,787</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,397,525</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-01-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7,255,383</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7,799,549</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,284,089</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,379,996</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-01-38</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,555,842</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,742,742</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-01-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7,595,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7,839,871</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,745,136</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,833,642</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-01-40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>838,573</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>867,968</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Government National Mortgage Association</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-15-38</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>777,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>842,713</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>Collateralized Mortgage Obligations 9.54%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$16,348,306</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Cost $23,149,088)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Commercial &amp; Residential 8.35%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>14,312,598</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>American Home Mortgage Assets</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-6, Class XP IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.482</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-25-46</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9,764,994</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>472,206</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>American Tower Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2007-1A, Class D (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.957</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>865,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>924,747</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="46%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>17</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
<HR align=center SIZE=2 width="100%" noShade>


<A name="page_14"></A><BR>
<a name="_bclPageBorder14"></a><DIV style="PADDING-LEFT: 0%; WIDTH: 100%; PADDING-RIGHT: 0%">
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="8%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Banc of America Funding Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-B, Class 6A1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.805</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-20-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$693,882</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$504,950</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bear Stearns Adjustable Rate Mortgage Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-1, Class B2 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3.731</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>789,898</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>78,933</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bear Stearns Alt-A Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-3, Class B2 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.774</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>544,208</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>20,359</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bear Stearns Commercial Mortgage</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Securities, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-PW14, Class D (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.412</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-11-38</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>655,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>169,923</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Citigroup/Deutsche Bank Commercial</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Mortgage Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-CD1, Class C (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.222</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-15-44</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>295,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>202,782</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Countrywide Alternative Loan Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-OA12, Class X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.916</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-20-46</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>13,989,848</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>575,146</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>First Horizon Alternative Mortgage Securities</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2004-AA5, Class B1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.289</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-25-34</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>408,838</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>49,119</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>GSR Mortgage Loan Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-4F, Class 6A1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,868,650</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,426,413</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2004-9, Class B1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3.607</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-25-34</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>801,410</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>311,870</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Harborview Mortgage Loan Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-11, Class X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.366</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-19-45</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,446,706</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>130,306</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-2, Class X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.361</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-19-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>14,410,950</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>644,998</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-8, Class 1X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.409</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-19-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5,806,772</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>223,561</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2007-3, Class ES IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.350</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-19-47</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>14,836,240</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>97,177</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2007-4, Class ES IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.350</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>07-19-47</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>17,488,625</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>97,936</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2007-6, Class ES IO (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.342</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-19-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11,868,700</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>76,672</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Harborview Net Interest Margin Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-9A, Class N2 (H)(I)(S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-19-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>323,137</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>IndyMac Index Mortgage Loan Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2004-AR13, Class B1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.296</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$320,043</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$27,730</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-AR18, Class 1X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.290</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11,884,628</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>401,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-AR18, Class 2X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.992</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11,352,587</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>354,201</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-AR5, Class B1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.795</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>425,673</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>11,473</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>JPMorgan Chase Commercial Mortgage Securities Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-LDP7, Class AM (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.872</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-15-45</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>535,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>532,501</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-LDP4, Class B (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.129</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-15-42</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,035,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,527,729</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Merrill Lynch Mortgage Investors Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-AF1, Class MF1 (H)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.306</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>686,158</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,359</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>MLCC Mortgage Investors, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-3, Class 2A1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.059</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>884,243</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>833,834</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2007-3, Class M1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.511</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-25-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>365,426</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>156,840</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2007-3, Class M2 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.511</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-25-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>134,861</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>55,428</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2007-3, Class M3 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.511</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>09-25-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>91,358</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>34,480</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Morgan Stanley Capital I</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2008-HQ8, Class AM (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.437</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-12-44</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,020,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,025,605</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-IQ12, Class E (H)(P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.538</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>12-15-43</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>640,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>98,400</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Provident Funding Mortgage Loan Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-1, Class B1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.970</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>399,335</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>104,672</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Thornburg Mortgage Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2004-1, Class II2A (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.118</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-25-44</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>649,669</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>628,311</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Washington Mutual, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-AR1, Class X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.640</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>01-25-45</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>20,047,801</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>594,273</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-AR12, Class 1A2 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.723</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>356,518</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>346,673</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-AR4, Class B1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.723</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,483,027</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>305,268</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2005-6, Class 1CB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>352,377</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>265,023</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="46%"></TD>
     <TD width="49%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
<HR align=center SIZE=2 width="100%" noShade>


<A name="page_15"></A><BR>
<a name="_bclPageBorder15"></a><DIV style="PADDING-LEFT: 0%; WIDTH: 100%; PADDING-RIGHT: 0%">
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="39%"></TD>
     <TD width="11%"></TD>
     <TD width="12%"></TD>
     <TD width="12%"></TD>
     <TD width="13%"></TD>
     <TD width="13%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>U.S. Government Agency 1.19%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$2,035,708</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Federal National Mortgage Association</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2009-47, Class EI IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-25-19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1,211,756</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>135,723</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 398, Class C3 IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>05-25-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,810,016</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>251,929</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 401, Class C2 IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-25-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,177,108</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>163,938</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 402, Class 3 IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-25-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,253,349</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>266,593</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 402, Class 4 IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10-25-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,228,004</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>400,465</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 402, Class 7 IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-25-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,056,489</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>281,673</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 402, Class 8 IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-25-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,515,047</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>342,314</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Government National Mortgage Association</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2010-78, Class AI IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-20-39</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,883,639</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>193,073</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Asset Backed Securities 1.62%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$2,769,463</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Cost $2,722,307)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Asset Backed Securities 1.62%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>2,769,463</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>ContiMortgage Home Equity Loan Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 1995-2, Class A&#150;5</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.100</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>08-15-25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>38,812</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>36,648</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>DB Master Finance LLC</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2006-1, Class-M1 (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.285</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>06-20-31</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>340,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>336,780</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Dominos Pizza Master Issuer LLC (S)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2007-1, Class M1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.629</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>04-25-37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>962,150</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Hertz Vehicle Financing LLC</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2009-2A, Class A2 (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.290</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-25-16</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>760,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>841,939</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Novastar Home Equity Loan (P)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series 2004-4, Class M3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.336</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>03-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>645,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>591,946</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Common Stocks 1.18%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$2,026,357</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Cost $2,369,394)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Consumer Discretionary 0.05%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>84,924</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Hotels, Restaurants &amp; Leisure 0.05%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Greektown Superholdings, Inc. (I)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>768</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>84,924</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Health Care 0.31%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>525,787</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Pharmaceuticals 0.31%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Johnson &amp; Johnson</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8,258</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>525,787</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Information Technology 0.30%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>521,820</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>Semiconductors &amp; Semiconductor Equipment 0.30%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Intel Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>26,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>521,820</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Materials 0.52%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>893,826</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Paper &amp; Forest Products 0.52%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Smurfit-Stone Container Corp. (I)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>38,862</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>893,826</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Preferred Securities 4.17%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$7,149,752</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Cost $6,960,216)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Consumer Discretionary 0.97%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>1,657,686</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Hotels, Restaurants &amp; Leisure 0.97%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Greektown Superholdings, Inc., Series A (I)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>14,991</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,657,686</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="46%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>19</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
<HR align=center SIZE=2 width="100%" noShade>


<A name="page_16"></A><BR>
<a name="_bclPageBorder16"></a><DIV style="PADDING-LEFT: 0%; WIDTH: 100%; PADDING-RIGHT: 0%">
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="31%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="8%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Consumer Staples 0.59%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$1,019,923</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Food &amp; Staples Retailing 0.59%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Ocean Spray Cranberries, Inc., Series A, 6.250% (S)(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>12,500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,019,923</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Energy 0.16%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>273,365</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Oil, Gas &amp; Consumable Fuels 0.16%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Apache Corp., Series D, 6.000%</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4,697</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>273,365</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Financials 1.86%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>3,191,578</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Diversified Financial Services 0.46%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Bank of America Corp., Series MER, 8.625% (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>26,575</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>682,978</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Citigroup Capital XIII (7.875% to 10-30-15,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>then 3 month LIBOR + 6.370%)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,900</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>103,350</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Real Estate Investment Trusts 1.40%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Apartment Investment &amp; Management</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Company, Series T, 8.000% (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>55,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1,405,250</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Public Storage, Inc., Depositary Shares,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Series W, 6.500% (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>40,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,000,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Telecommunication Services 0.59%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>1,007,200</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>Wireless Telecommunication Services 0.59%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Telephone &amp; Data Systems, Inc., Series A, 7.600% (Z)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>40,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,007,200</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Short-Term Investments 0.80%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$1,377,000</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(Cost $1,377,000)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Repurchase Agreement 0.10%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$177,000</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Repurchase Agreement with State Street Corp. dated 10-29-</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>10 at 0.010% to be repurchased at $177,000 on 11-1-10,</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>collateralized by $185,000 Federal Home Loan Mortgage</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Corp., 0.515% due 11-26-12 (valued at $185,000,</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>including interest)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$177,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>177,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Rate (%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Par value</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Value</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Short-Term Securities 0.70%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$1,200,000</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Federal Home Loan Bank Discount Notes</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.100</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>11-01-10</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>$1,200,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,200,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>Total investments (Cost $245,670,999)</FONT></B><FONT size=1 face=sans-serif>&#134; </FONT><B><FONT size=1 face=sans-serif>146.97%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$251,728,493</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>Other assets and liabilities, net (46.97%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>($80,453,335)</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total net assets 100.00%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$171,275,158</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=6 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="2%"></TD>
     <TD width="97%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>The percentage shown for each investment category is the total value of that category as a percentage of the net</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>assets of the Fund.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>IO</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Interest Only Security &#151; Interest Tranche of Stripped Mortgage Pool</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>LIBOR</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>London Interbank Offered Rate</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>PIK</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Paid In Kind</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(H)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Defaulted security. Currently, the issuer is in default with respect to interest payments.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(I)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Non-income producing security.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(M)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Term loans are variable rate obligations. The coupon rate shown represents the rate at period end unless the</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>investment is unsettled.</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="46%"></TD>
     <TD width="49%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>20</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
<HR align=center SIZE=2 width="100%" noShade>

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<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="2%"></TD>
     <TD width="97%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(P)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Variable rate obligation. The coupon rate shown represents the rate at period end.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(Q)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Perpetual bonds have no stated maturity date.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(S)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>may be resold, normally to qualified institutional buyers, in transactions exempt from registration. Rule 144A</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>securities amounted to $47,810,039 or 27.91% of the Fund&#146;s net assets as of 10-31-10.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(Z)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>All or a portion of this security is segregated as collateral pursuant to the Committed Facility Agreement. Total</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>collateral value at 10-31-10 was $123,547,727.</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#134;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>At 10-31-10, the aggregate cost of investment securities for federal income tax purposes was $246,350,479</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net unrealized appreciation aggregated $5,378,014, of which $17,182,398 related to appreciated investment</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>securities and $11,804,384 related to depreciated investment securities.</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><FONT size=1 face=sans-serif>The portfolio had the following country concentration as a percentage of investments on 10-31-10:</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="25%"></TD>
     <TD width="25%"></TD>
     <TD width="25%"></TD>
     <TD width="25%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>United States</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>88%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Canada</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Australia</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Luxembourg</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Cayman Islands</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>United Kingdom</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Mexico</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bermuda</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Other Countries</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Short-Term Investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="46%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>21</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=7 face=serif>Financial statements</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=4 face=sans-serif>Statement of assets and liabilities </FONT><FONT size=2 face=sans-serif>10-31-10</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>This Statement of Assets and Liabilities is the Fund&#146;s balance sheet. It shows the value of what the Fund owns, is due and owes. You&#146;ll also find the net asset value for each common share.</FONT></B></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="79%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Investments, at value (Cost $245,670,999)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$251,728,493</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Cash</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>562</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Cash held at broker for futures&nbsp;contracts</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>54,450</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Receivable for investments&nbsp;sold</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>927,743</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Dividends and interest&nbsp;receivable</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,457,361</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Other receivables</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>20,403</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total&nbsp;assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>256,189,012</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Liabilities</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Payable for investments&nbsp;purchased</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,285,261</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Committed Facility Agreement payable (Note&nbsp;8)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>83,500,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Payable for futures variation margin</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9,898</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Interest payable (Note&nbsp;8)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10,674</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Payable to&nbsp;affiliates</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Accounting and legal services&nbsp;fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3,244</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Transfer agent&nbsp;fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>12,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Trustees&#146;&nbsp;fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>12,860</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Other liabilities and accrued&nbsp;expenses</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>79,417</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total&nbsp;liabilities</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>84,913,854</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net&nbsp;assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Capital paid-in</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$182,892,240</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Undistributed net investment&nbsp;income</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>977,458</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Accumulated net realized loss on investments, futures contracts and</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>swap&nbsp;agreements</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(18,554,248)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net unrealized appreciation on investments and futures&nbsp;contracts</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5,959,708</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net&nbsp;assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$171,275,158</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net asset value per&nbsp;share</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Based on 11,559,635 shares of beneficial interest outstanding &#151; unlimited</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>number of shares authorized with no par&nbsp;value</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$14.82</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="46%"></TD>
     <TD width="49%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>22</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=4 face=sans-serif>Statement of operations </FONT><FONT size=2 face=sans-serif>For the year ended 10-31-10</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>This Statement of Operations summarizes the Fund&#146;s investment income earned, expenses incurred in operating the Fund. It also shows net gains (losses) for the period&nbsp;stated.</FONT></B></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="71%"></TD>
     <TD width="28%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Investment&nbsp;income</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Interest</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$16,232,910</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Dividends</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>301,402</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total investment&nbsp;income</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>16,534,312</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Expenses</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Investment management fees (Note&nbsp;5)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,297,790</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Accounting and legal services fees (Note&nbsp;5)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>24,755</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Transfer agent fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>99,782</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Trustees&#146; fees (Note&nbsp;5)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>50,228</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Printing and postage</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>61,190</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Professional&nbsp;fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>174,149</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Custodian&nbsp;fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>40,348</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Interest expense (Note&nbsp;8)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,074,179</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Stock exchange listing&nbsp;fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>24,035</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Other</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>37,128</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total&nbsp;expenses</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>2,883,584</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net investment&nbsp;income</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>13,650,728</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Realized and unrealized gain&nbsp;(loss)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net realized gain (loss)&nbsp;on</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>459,525</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Futures contracts (Note&nbsp;3)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(270,905)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Swap contracts (Note&nbsp;3)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(1,260,170)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>(1,071,550)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Change in net unrealized appreciation (depreciation)&nbsp;of</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>15,789,811</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Futures contracts (Note&nbsp;3)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(83,694)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Swap contracts (Note&nbsp;3)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,219,458</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>16,925,575</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net realized and unrealized&nbsp;gain</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>15,854,025</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Increase in net assets from&nbsp;operations</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$29,504,753</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="46%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>23</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
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<A name="page_20"></A><BR>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=4 face=sans-serif>Statements of changes in net assets</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>These Statements of Changes in Net Assets show how the value of the Fund&#146;s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.</FONT></B></P>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Year</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Year</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>ended</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>ended</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>10-31-10</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>10-31-09</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Increase (decrease) in net&nbsp;assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=5 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
&nbsp;</FONT></B><B><FONT size=1 face=sans-serif></FONT></B><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>From&nbsp;operations</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net investment&nbsp;income</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$13,650,728</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$13,454,313</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net realized gain&nbsp;(loss)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(1,071,550)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(6,980,423)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Change in net unrealized appreciation&nbsp;(depreciation)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>16,925,575</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>37,934,387</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Increase in net assets resulting from&nbsp;operations</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>29,504,753</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>44,408,277</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Distributions to&nbsp;shareholders</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>From net investment&nbsp;income</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(13,367,891)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(12,871,827)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>From Fund share transactions (Note&nbsp;6)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>1,079,434</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>1,059,251</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total&nbsp;increase</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>17,216,296</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>32,595,701</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net&nbsp;assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=5 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Beginning of&nbsp;year</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>154,058,862</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>121,463,161</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>End of&nbsp;year</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$171,275,158</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$154,058,862</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Undistributed net investment income</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif></FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$977,458</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$1,010,933</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
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<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="46%"></TD>
     <TD width="49%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>24</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=4 face=sans-serif>Statement of cash flows </FONT><FONT size=2 face=sans-serif>10-31-10</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>This Statement of Cash Flows shows cash flow from operating and financing activities for the period stated.</FONT></B></P>
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<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="81%"></TD>
     <TD width="18%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>For the</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>year ended</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>10-31-10</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Cash flows from operating activities</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net increase in net assets from operations</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$29,504,753</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Adjustments to reconcile net increase in net assets from operations to net</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><B><FONT size=1 face=sans-serif>cash used in operating activities:</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Long-term investments purchased</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(209,995,663)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Long-term investments sold</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>185,081,475</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Increase in short-term investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(1,084,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net amortization of premium (discount)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>871,693</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Decrease in dividends and interest receivable</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>219,630</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Decrease in payable for investments purchased</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(105,337)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Increase in receivable for investments sold</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(295,513)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Decrease in cash held at broker for futures contracts</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7,650</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Decrease in other receivables</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>16,001</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Decrease in prepaid arrangement fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>63,907</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net change in unrealized (appreciation) depreciation of swap contracts</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(1,219,458)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Decrease in payable for futures variation margin</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(10,586)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Decrease in payable to affiliates</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(8,932)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Increase in interest payable</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5,389</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Decrease in other liabilities and accrued expenses</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(12,817)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net change in unrealized (appreciation) depreciation on investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(15,789,811)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net realized gain on investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(459,525)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net cash used in operating activities</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>($13,211,144)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Cash flows from financing activities</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Borrowings from credit facility agreement payable</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>25,500,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Distributions to common shareholders net of reinvestments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(12,288,457)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=1 face=sans-serif>&nbsp;</FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net cash provided by financing activities</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$13,211,543</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net increase in cash</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$399</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Cash at beginning of period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$163</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Cash at end of period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$562</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Supplemental disclosure of cash flow information</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Cash paid for interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$1,068,790</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Noncash financing activities not included herein consist of</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>1,079,434</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><B><FONT size=1 face=sans-serif>reinvestment of distributions</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="49%"></TD>
     <TD width="46%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>25</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
</DIV>
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<P style="TEXT-ALIGN: left"><FONT size=7 face=serif>Financial highlights</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>The Financial Highlights show how the Fund&#146;s net asset value for a share has changed since the end of the previous period.</FONT></B></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="14%"></TD>
     <TD width="14%" align=right></TD>
     <TD width="14%" align=right></TD>
     <TD width="15%" align=right></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>COMMON SHARES </FONT></B><B><FONT size=1 face=sans-serif>Period&nbsp;ended</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>10-31-10</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>10-31-09</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>10-31-08</FONT></B><SUP><FONT size=1 face=sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>12-31-07</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>12-31-06</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>12-31-05</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7 align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Per share operating&nbsp;performance</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=7 noWrap align=right><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net asset value, beginning of&nbsp;period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$13.42</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$10.67</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$14.53</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$15.22</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$15.30</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$16.19</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net investment&nbsp;income</FONT><SUP><FONT size=1 face=sans-serif>2</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.19</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.18</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.05</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.34</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.26</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.20</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net realized and unrealized gain (loss)</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>on&nbsp;investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.37</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.70</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(3.92)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(0.69)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(0.03)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(0.81)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Distributions to Auction Preferred</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Shares&nbsp;(APS)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(0.15)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(0.42)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(0.38)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(0.25)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total from investment&nbsp;operations</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>2.56</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>3.88</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>(3.02)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>0.23</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>0.85</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>0.14</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Less distributions to</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><B><FONT size=1 face=sans-serif>common&nbsp;shareholders</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>From net investment&nbsp;income</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(1.16)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(1.13)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(0.84)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(0.92)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(0.93)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(1.03)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Net asset value, end of&nbsp;period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$14.82</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$13.42</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$10.67</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$14.53</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$15.22</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$15.30</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Per share market value, end</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><B><FONT size=1 face=sans-serif>of&nbsp;period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$14.76</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$12.94</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$9.67</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$12.85</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$14.75</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$13.68</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total return at net asset value (%)</FONT></B><SUP><FONT size=1 face=sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>19.90</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>39.06</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>(21.36)</FONT></B><SUP><FONT size=1 face=sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>1.97</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>6.24</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>1.36</FONT></B><SUP><FONT size=1 face=sans-serif>5</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total return at market value (%)</FONT></B><SUP><FONT size=1 face=sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>23.85</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>47.95</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>(19.41)</FONT></B><SUP><FONT size=1 face=sans-serif>4</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>(6.94)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>15.15</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>(6.42)</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7 align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Ratios and supplemental&nbsp;data</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=7 noWrap align=right><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net assets applicable to common</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 1px" noWrap align=left><FONT size=1 face=sans-serif>shares, end of period (in&nbsp;millions)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$171</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$154</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$121</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$165</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$172</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$172</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Ratios (as a percentage of average</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>net&nbsp;assets):</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Expenses (excluding interest&nbsp;expense)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.12</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.41</FONT><SUP><FONT size=1 face=sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.16</FONT><SUP><FONT size=1 face=sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.17</FONT><SUP><FONT size=1 face=sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.16</FONT><SUP><FONT size=1 face=sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Interest expense (Note&nbsp;8)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.66</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.85</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.76</FONT><SUP><FONT size=1 face=sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Expenses (including interest&nbsp;expense)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.78</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2.17</FONT><SUP><FONT size=1 face=sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.16</FONT><SUP><FONT size=1 face=sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.17</FONT><SUP><FONT size=1 face=sans-serif>7</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1.16</FONT><SUP><FONT size=1 face=sans-serif>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Net investment&nbsp;income</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.44</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10.56</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>9.37</FONT><SUP><FONT size=1 face=sans-serif>6</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.87</FONT><SUP><FONT size=1 face=sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>8.30</FONT><SUP><FONT size=1 face=sans-serif>8</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>7.62</FONT><SUP><FONT size=1 face=sans-serif>8</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Portfolio turnover (%)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>79</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>94</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>54</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>94</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>148</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7 align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Senior&nbsp;securities</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=7 noWrap align=right><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Total value of APS outstanding</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>(in&nbsp;millions)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$90</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$90</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$90</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Involuntary liquidation preference per</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>unit (in&nbsp;thousands)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>25</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Average market value per unit</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>(in&nbsp;thousands)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>25</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Asset coverage per&nbsp;unit</FONT><SUP><FONT size=1 face=sans-serif>9</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT><SUP><FONT size=1 face=sans-serif>10 </FONT></SUP></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$71,228</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$73,375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$72,470</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Total debt outstanding end of period</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>(in millions) (Note&nbsp;8)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$84</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$58</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$58</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Asset coverage per $1,000 of&nbsp;APS</FONT><SUP><FONT size=1 face=sans-serif>11</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$2,851</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$2,928</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$2,928</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Asset coverage per $1,000 of&nbsp;debt</FONT><SUP><FONT size=1 face=sans-serif>12</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$3,051</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$3,656</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$3,094</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD></TR></TABLE></DIV>
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     <TD width="4%"></TD>
     <TD width="46%"></TD>
     <TD width="49%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>26</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><SUP><FONT size=1 face=sans-serif>1 </FONT></SUP><FONT size=1 face=sans-serif>For the ten-month period ended 10-31-08. The Fund changed its fiscal year end from December 31 to October&nbsp;31.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>2 </FONT></SUP><FONT size=1 face=sans-serif>Based on the average daily shares&nbsp;outstanding.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>3 </FONT></SUP><FONT size=1 face=sans-serif>Total return based on net asset value reflects changes in the Fund&#146;s net asset value during each period. Total </FONT><FONT size=1 face=sans-serif>return based on market value reflects changes in market value. Each figure assumes that dividend and capital gain </FONT><FONT size=1 face=sans-serif>distributions, if any, were reinvested. These figures will differ depending upon the level of any discount from or </FONT><FONT size=1 face=sans-serif>premium to net asset value at which the Fund&#146;s shares traded during the&nbsp;period.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>4 </FONT></SUP><FONT size=1 face=sans-serif>Not&nbsp;annualized.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>5 </FONT></SUP><FONT size=1 face=sans-serif>Unaudited.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>6 </FONT></SUP><FONT size=1 face=sans-serif>Annualized.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>7 </FONT></SUP><FONT size=1 face=sans-serif>Ratios calculated on the basis of expenses relative to the average net assets of common shares. Without the </FONT><FONT size=1 face=sans-serif>exclusion of preferred shares, the annualized ratio of expenses would have been 0.76%, 0.77% and 0.77% for the </FONT><FONT size=1 face=sans-serif>periods ended 12-31-07, 12-31-06 and 12-31-05,&nbsp;respectively.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>8 </FONT></SUP><FONT size=1 face=sans-serif>Ratios calculated on the basis of net investment income relative to the average net assets of common shares. </FONT><FONT size=1 face=sans-serif>Without the exclusion of preferred shares, the annualized ratio of net investment income would have been 5.82%, </FONT><FONT size=1 face=sans-serif>5.45%, and 5.06% for the periods ended 12-31-07, 12-31-06 and 12-31-05,&nbsp;respectively.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>9 </FONT></SUP><FONT size=1 face=sans-serif>Calculated by subtracting the Fund&#146;s total liabilities from the Fund&#146;s total assets and dividing that amount by the </FONT><FONT size=1 face=sans-serif>number of APS outstanding, as of the applicable 1940 Act Evaluation Date, which may differ from the financial </FONT><FONT size=1 face=sans-serif>reporting&nbsp;date.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>10 </FONT></SUP><FONT size=1 face=sans-serif>In May 2008, the Fund entered into a Credit Facility Agreement with a third-party commercial bank in order to </FONT><FONT size=1 face=sans-serif>redeem the APS. The redemption of all APS was completed on 6-12-08.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>11 </FONT></SUP><FONT size=1 face=sans-serif>Asset coverage equals the total net assets plus APS divided by the APS of the Fund outstanding at period end.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>12 </FONT></SUP><FONT size=1 face=sans-serif>Asset coverage equals the total net assets plus borrowings divided by the borrowings of the Fund outstanding at </FONT><FONT size=1 face=sans-serif>period end (Note&nbsp;8).</FONT></P>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>See notes to financial statements</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>27</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=7 face=serif>Notes to financial statements</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Note 1 &#151; Organization</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>John Hancock Income Securities Trust (the Fund) is a closed-end diversified management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act).</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Note 2 &#151; Significant accounting policies</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>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. Events or transactions occurring after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Security valuation. </FONT></B><FONT size=2 face=serif>Investments are stated at value as of the close of regular trading on the New&nbsp;York Stock Exchange (NYSE), normally at 4:00 </FONT><FONT size=1 face=serif>P</FONT><FONT size=2 face=serif>.</FONT><FONT size=1 face=serif>M</FONT><FONT size=2 face=serif>.</FONT><FONT size=2 face=serif>, Eastern Time. The Fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes quoted prices in active markets for identical securities. Level&nbsp;2 includes significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these techniques are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes significant unobservable
 inputs when market prices are not readily available or reliable, including the Fund&#146;s own assumptions in determining the fair value of investments. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The following is a summary of the values by input classification of the Fund&#146;s investments as of October 31, 2010, by major security category or type:</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="20%"></TD>
     <TD width="20%"></TD>
     <TD width="20%"></TD>
     <TD width="20%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>LEVEL 3</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>LEVEL 2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>SIGNIFICANT</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>TOTAL MARKET</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>LEVEL 1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>SIGNIFICANT</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>UNOBSERVABLE</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>INVESTMENTS IN SECURITIES</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>VALUE AT 10-31-10</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>QUOTED PRICE</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>OBSERVABLE INPUTS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>INPUTS</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>U.S. Government &amp;</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Agency Obligations</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$64,326,494</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$64,326,494</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Corporate Bonds</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>155,251,940</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>154,933,775</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$318,165</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Convertible Bonds</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>886,875</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>886,875</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Term Loans</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>455,181</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>455,181</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Capital Preferred Securities</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>1,137,125</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,137,125</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Collateralized Mortgage</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=1 face=sans-serif>Obligations</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>16,348,306</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>15,078,594</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,269,712</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Asset-Backed Securities</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>2,769,463</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,769,463</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Common Stocks</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>2,026,357</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1,941,433</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>84,924</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Preferred Securities</FONT>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>7,149,752</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4,472,143</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,019,923</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,657,686</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Short-Term Investments</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>1,377,000</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,377,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD></TR>
<TR>
     <TD>&nbsp;</TD>
     <TD colSpan=4>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total Investments in</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><B><FONT size=1 face=sans-serif>Securities</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$251,728,493</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$6,413,576</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$241,984,430</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$3,330,487</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Other Financial Instruments</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Futures</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>($97,786)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>($97,786)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>&#151;</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>&#151;</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>28</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>COLLATERALIZED</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>ASSET-BACKED</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>MORTGAGE</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>CORPORATE</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>COMMON</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>PREFERRED</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>SECURITIES</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>OBLIGATIONS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>BONDS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>STOCKS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>SECURITIES</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>TOTAL</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Balance as of 10-31-09</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$750,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$6,578,122</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$884,400</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$8,212,522</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Accrued discounts/</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>premiums</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>116</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>116</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Realized gain (loss)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,606,354</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>999</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2,607,353</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Change in unrealized</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>appreciation</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>(depreciation)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(3,153,200)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>31,165</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$135,926</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(2,986,109)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net purchases (sales)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(2,991,952)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(33,999)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$84,924</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>1,521,760</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(1,419,267)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net transfers in and/out</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>of Level 3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(750,000)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(1,769,728)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(564,400)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(3,084,128)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Balance as of 10-31-10</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>&#151;</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$1,269,712</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$318,165</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$84,924</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$1,657,686</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$3,330,487</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Change in unrealized at</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>period end*</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>($154,531)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$31,165</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$135,926</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$12,560</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px"><FONT size=1 face=sans-serif><BR>
*Change in unrealized appreciation (depreciation) attributable to Level 3 securities held at the period end. This balance is included in the change in unrealized appreciation (depreciation) on the Statement of Operations.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>During the year ended October 31, 2010, there were no significant transfers in or out of Level 1 or Level 2 assets.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>In order to value the securities, the Fund uses the following valuation techniques. Equity securities held by the Fund are valued at the last sale price or official closing price on the principal securities exchange on which they trade. In the event there were no sales during the day or closing prices are not available, then securities are valued using the last quoted bid or evaluated price. Debt obligations are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, taking into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data. Certain securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Certain short-term securiti
es are valued at amortized cost. Other portfolio securities and assets, where market quotations are not readily available, are valued at fair value, as determined in good faith by the Fund&#146;s Pricing Committee, following procedures established by the Board of Trustees.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Repurchase agreements. </FONT></B><FONT size=2 face=serif>The Fund may enter into repurchase agreements. When a Fund enters into a repurchase agreement, it receives collateral which is held in a segregated account by the Fund&#146;s custodian. The collateral amount is marked-to-market and monitored on a daily basis to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Security transactions and related investment income. </FONT></B><FONT size=2 face=serif>Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is&nbsp;accrued as earned. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation. Dividend income is recorded on the ex-date, except&nbsp;for certain foreign dividends where the ex-date may have passed, which are recorded when the Fund becomes aware of the dividends. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by stopping current</FONT></P>
<DIV align=left>
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<TR>
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     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>29</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Payment-in-kind bonds. </FONT></B><FONT size=2 face=serif>The Fund may invest in payment-in-kind bonds (PIK Bonds). PIK Bonds allow the issuer, at its option, to make current interest payments on the bonds either in cash or in additional bonds. The market prices of PIK Bonds are affected to a greater extent by interest rate changes and thereby tend to be more volatile than securities which pay cash interest periodically. The Fund accrues income on these securities and this income is required to be distributed to shareholders. Because no cash is received at the time income accrues on these securities, the Fund may need to sell other investments to make distributions.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Real estate investment trusts. </FONT></B><FONT size=2 face=serif>From time to time, the Fund may invest in real estate investment trusts (REITs) and, as a result, will estimate the components of distributions from these securities. Distributions from REITs received in excess of income are recorded as a reduction of cost of investments and/or as a realized gain.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Stripped securities. </FONT></B><FONT size=2 face=serif>Stripped mortgage backed securities are financial instruments that derive their value from other instruments so that one class receives the entire principal from the underlying mortgage assets (PO or principal only), while the other class receives the interest cash flows (IO or interest only). Both PO and IO investments represent an interest in the cash flows of an underlying stripped mortgage backed security. If the underlying mortgage assets experience greater than anticipated prepayments of principal, the Fund may fail to fully receive its initial investment in an IO security. The market value of these securities can be extremely volatile in response to changes in interest rates. In addition, these securities present additional credit risk such that the Fund may not receive all or part of its principal because the counterparty or issuer has defaulted on its obligation.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Overdrafts. </FONT></B><FONT size=2 face=serif>Pursuant to the custodian agreement, the Fund&#146;s custodian may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the custodian for any overdraft, including any costs or expenses associated with the overdraft. The custodian has a lien, security interest or security entitlement in any Fund property, that is not segregated, to the maximum extent permitted by law to the extent of any overdraft.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Expenses. </FONT></B><FONT size=2 face=serif>The majority of expenses are directly attributable to an individual fund. Expenses that are not readily attributable to a specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund&#146;s relative assets. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Federal income taxes. </FONT></B><FONT size=2 face=serif>The Fund intends to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>For federal income tax purposes, the Fund has a capital loss carryforward of $17,851,774 available to offset future net realized capital gains as of October 31, 2010. The following table details the capital loss carryforward available as of October 31, 2010.</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>CAPITAL LOSS CARRYFORWARD EXPIRING AT OCTOBER 31</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center><FONT size=1 face=sans-serif>2012</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>2013</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>2014</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>2015</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>2016</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>2017</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>2018</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=7 noWrap align=center><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center><FONT size=1 face=sans-serif>$2,123,466</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>$2,443,482</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>$3,342,775</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>$1,351,797</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>$1,367,076</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>$6,785,450</FONT>&nbsp;</TD>
     <TD noWrap align=center><FONT size=1 face=sans-serif>$437,728</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
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<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>30</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>As of October 31, 2010, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition or disclosure. The Fund&#146;s federal tax return is subject to examination by the Internal Revenue Service for a period of three years.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Distribution of income and gains. </FONT></B><FONT size=2 face=serif>Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The Fund generally declares and pays dividends quarterly and capital gain distributions, if any, annually. The tax character of distributions for the years ended October 31, 2010 and October 31, 2009 was as follows:</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="20%"></TD>
     <TD width="20%"></TD>
     <TD width="20%"></TD>
     <TD width="20%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>OCTOBER 31, 2010</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>OCTOBER 31, 2009</FONT>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR>
     <TD colSpan=3>
<HR SIZE=1 noShade>
</TD>
     <TD></TD>
     <TD></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Ordinary Income</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$13,367,891</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$12,871,827</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>As of October 31, 2010, the components of distributable earnings on a tax basis included $987,438 of undistributed ordinary income.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Material distributions in excess of tax basis earnings and profits, if any, are reported in the Fund&#146;s financial statements as a return of capital.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Capital accounts within 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, if any, will reverse in a subsequent period. Book-tax differences are primarily attributable to pay-downs, defaulted bonds, derivative transactions and amortization and accretion on debt securities.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Statement of cash flows. </FONT></B><FONT size=2 face=serif>Information on financial transactions that have been settled through the&nbsp;receipt and disbursement of cash is presented in the Statement of Cash Flows. The cash amount&nbsp;shown in the Statement of Cash Flows is the amount included in the Fund&#146;s Statement of Assets and Liabilities and represents the cash on hand at its custodian and does not include any short-term investments.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Note 3 &#151; Derivative instruments</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Fund may invest in derivatives, including futures contracts and swap contracts, in order to meet its investment objectives. The use of derivatives may involve risks different from, or potentially greater than, the risks associated with investing directly in securities. Specifically, derivatives expose the Fund to the risk that the counterparty to an over-the-counter (OTC) derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction. If the counterparty defaults, the Fund will have contractual remedies, but there is no assurance that the counterparty will meet its contractual obligations or that the Fund will succeed in enforcing them.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Futures. </FONT></B><FONT size=2 face=serif>A futures contract is a contractual agreement to buy or sell a particular commodity, currency, or financial instrument at a pre-determined price in the future. Risks related to the use of futures contracts include possible illiquidity of the futures markets, contract prices that can be highly volatile and imperfectly correlated to movements in hedged security values and/or interest rates and potential losses in excess of the Fund&#146;s initial investment.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade. Upon entering into a futures contract, the Fund is required to deposit initial margin with the broker in the form of cash or securities. The amount of required margin is generally based on a percentage of the contract value; this amount is the initial margin for the trade. The margin deposit must then be maintained at the established level over the life of the contract.</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="95%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>31</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Futures contracts are marked-to-market daily and an appropriate payable or receivable for the change in value (variation margin) is recorded by the Fund.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>During the year ended October 31, 2010, the Fund used futures contracts to manage duration of the portfolio. The following table summarizes the contracts held at October 31, 2010. The range of futures contracts absolute notional amounts held by the Fund during the year ended October 31, 2010 was $2.7 million to $7.5 million.</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="29%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="10%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>UNREALIZED</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>OPEN</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>NUMBER OF</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>APPRECIATION</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>CONTRACTS</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>CONTRACTS</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>POSITION</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>EXPIRATION DATE</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>VALUE (USD)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(DEPRECIATION)</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>U.S. Treasury 30-Year</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>10</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Long</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Dec 2010</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1,309,375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>($36,903)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Bond Futures</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>U.S. Treasury 5-Year</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>27</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Short</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Dec 2010</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(3,282,609)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(40,154)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Note Futures</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>U.S. Treasury 10-Year</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>23</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Short</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Dec 2010</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(2,904,469)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>(20,729)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Note Futures</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>($97,786)</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Interest rate swaps. </FONT></B><FONT size=2 face=serif>Interest rate swaps represent an agreement between a Fund and counterparty to exchange cash flows based on the difference between two interest rates applied to a notional amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other. The Fund settles accrued net interest receivable or payable under the swap contracts on a periodic basis. Swaps are marked-to-market daily based upon values from third party vendors or broker quotations, and the change in value is recorded as unrealized appreciation/ depreciation of swap contracts.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Entering into swap agreements involves, to varying degrees, elements of credit, market and documentation risk that may amount to values that are in excess of the amounts recognized on the Statement of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for the swap, that a counterparty may default on its obligation or delay payment under the swap terms. The counterparty may disagree or contest the terms of the swap. Market risks may also accompany the swap, including interest rate risk. The Fund may also suffer losses if it is unable to terminate or assign outstanding swaps or reduce its exposure through offsetting transactions.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>There were no open interest rate swap contracts at October 31, 2010.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Fair value of derivative instruments by risk category</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The table below summarizes the fair value of derivatives held by the Fund at October 31, 2010 by risk category:</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="24%"></TD>
     <TD width="25%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>FINANCIAL</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>ASSET</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>LIABILITY</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>STATEMENT OF ASSET AND</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>INSTRUMENTS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>DERIVATIVES</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>DERIVATIVES</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>RISK</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>LIABILITIES LOCATION</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>LOCATION</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>FAIR VALUE</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>FAIR VALUE</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Interest rate</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Payable for futures</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Futures&#134;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>($97,786)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>contracts</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>&#151;</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>($97,786)</FONT></B>&nbsp;</TD></TR></TABLE></DIV><FONT size=1 face=sans-serif>
<P style="MARGIN: 0px"><BR>
&#134; Reflects cumulative appreciation/depreciation of futures as disclosed in Note 3. Only the period end variation margin is separately disclosed on the Statement of Assets and Liabilities.</P>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="MARGIN: 0px"></FONT>&nbsp;</P>
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<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>32</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
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<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Effect of derivative instruments on the Statement of Operations</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The table below summarizes the net realized gain (loss) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the year ended October 31, 2010:</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="22%"></TD>
     <TD width="22%"></TD>
     <TD width="11%"></TD>
     <TD width="22%"></TD>
     <TD width="22%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>STATEMENT OF</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>OPERATIONS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>FUTURES</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>SWAP</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>RISK</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>LOCATION</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>CONTRACTS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>CONTRACTS</FONT>&nbsp;</TD>
     <TD style="TEXT-INDENT: 7px" noWrap align=right><FONT size=1 face=sans-serif>TOTAL</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Interest rate</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Net realized loss</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>($270,905)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>($1,260,170)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>($1,531,075)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>contracts</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>($270,905)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>($1,260,170)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>($1,531,075)</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The table below summarizes the net change in unrealized appreciation (depreciation) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the year ended October 31, 2010:</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="22%"></TD>
     <TD width="22%"></TD>
     <TD width="11%"></TD>
     <TD width="22%"></TD>
     <TD width="22%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>STATEMENT OF OPERATIONS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>FUTURES</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>SWAP</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>RISK</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>LOCATION</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>CONTRACTS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>CONTRACTS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>TOTAL</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Interest rate</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Change in unrealized</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>($83,694)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1,219,458</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1,135,764</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>contracts</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>appreciation (depreciation) of</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Total</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>($83,694)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$1,219,458</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>$1,135,764</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Note 4 &#151; Guarantees and indemnifications</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Under the Fund&#146;s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund&#146;s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss from such claims is considered remote.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Note 5 &#151; Fees and transactions with affiliates</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>John Hancock Advisers, LLC (the Adviser) serves as investment adviser for the Fund. The Adviser is an indirect wholly owned subsidiary of Manulife Financial Corporation (MFC).</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Management fee. </FONT></B><FONT size=2 face=serif>The Fund has an investment management contract with the Adviser under which the Fund pays a daily management fee to the Adviser equivalent, on an annual basis, to the sum of (a) 0.650% of the first $150,000,000 of the Fund&#146;s average daily net assets and the value attributable to the committed facility agreement (collectively, managed assets), (b) 0.375% of the next $50,000,000, (c) 0.350% of the next $100,000,000 and (d) 0.300% of the Fund&#146;s average daily managed assets in excess of $300,000,000. The Adviser has a subadvisory agreement with MFC Global Investment Management (U.S.), LLC, an indirectly owned subsidiary of MFC and an affiliate of the Adviser. The Fund is not responsible for payment of the subadvisory fees.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The investment management fees incurred for the year ended October 31, 2010, were equivalent to an annual effective rate of 0.54% of the Fund&#146;s managed assets.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Accounting and legal services. </FONT></B><FONT size=2 face=serif>Pursuant to the service agreement the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. The accounting and legal services fees incurred for the year ended October 31, 2010, amounted to an annual rate of 0.01% of the Fund&#146;s average daily net assets.</FONT></P>
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     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>33</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Trustee expenses. </FONT></B><FONT size=2 face=serif>The Trust compensates each Trustee who is not an employee of the Adviser or its affiliates. These Trustees may, for tax purposes, elect to defer receipt of this compensation under the John Hancock Group of Funds Deferred Compensation Plan (the Plan). Deferred amounts are invested in various John Hancock funds and remain in the funds until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting liability are included within other receivables and payable to affiliates &#151; Trustees&#146; fees, respectively, in the accompanying Statement of Assets and Liabilities.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Note 6 &#151; Fund share transactions</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Transactions in Fund shares for the year ended October 31, 2010 and for the year ended October 31, 2009, were as follows:</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD colSpan=2 noWrap align=right><B><FONT size=1 face=sans-serif>Year ended 10-31-10</FONT></B>&nbsp;</TD>
     <TD colSpan=2 noWrap align=right><B><FONT size=1 face=sans-serif>Year ended 10-31-09</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Amount</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Shares</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Amount</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Distributions reinvested</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>77,303</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1,079,434</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>95,623</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1,059,251</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Note 7 &#151; Leverage risk</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Fund utilizes a Committed Facility Agreement (CFA) to increase its assets available for investment. When the Fund leverages its assets, common shareholders bear the fees associated with the facility and have the potential to benefit or be disadvantaged from the use of leverage. The Adviser&#146;s fee is also increased in dollar terms from the use of leverage. Consequently, the Fund and the Adviser may have differing interests in determining whether to leverage the Fund&#146;s assets. Leverage creates risks that may adversely affect the return for the holders of common shares, including:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>&#149; the likelihood of greater volatility of net asset value and market price of common shares</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>&#149; fluctuations in the interest rate paid for the use of the credit facility</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>&#149; increased operating costs, which may reduce the Fund&#146;s total return</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>&#149; the potential for a decline in the value of an investment acquired through leverage, while the Fund&#146;s obligations under such leverage remains fixed</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>&#149; the Fund is more likely to have to sell securities in a volatile market in order to meet asset coverage or other debt compliance requirements</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>To the extent the income or capital appreciation derived from securities purchased with funds received from leverage exceeds the cost of leverage, the Fund&#146;s return will be greater than if leverage had not been used, conversely, returns would be lower if the cost of the leverage exceeds the income or capital appreciation derived.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Note 8 &#151; Committed facility agreement</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Effective June 2, 2009, the Fund entered into a CFA with a subsidiary of BNP Paribas (BNP) that allowed it to borrow up to an initial limit of $58 million and to invest the borrowings in accordance with its investment practices. The Fund incurred a $145,000 arrangement fee upon execution of the CFA which was amortized during the first 270 days of the agreement. On December 17, 2009, the Fund entered into an amendment to the CFA, increasing the amount the Fund can borrow under the CFA from $58 million to $90 million. Under the terms of the amendment, the Fund paid a one time arrangement fee of 0.25% on the increased amount of the committed financing upon execution of the amendment which was amortized during the first 270 days of the amendment.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Borrowings under the CFA are secured by the assets of the Fund as disclosed in the Fund&#146;s investments. Interest charged is at the rate of one month LIBOR (reset daily) plus 0.85% and</FONT></P>
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<TR>
     <TD width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>34</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>is payable monthly. The Fund also pays a commitment fee of 0.60% per annum on the unused portion of the facility. Commitment and arrangement fees for the year ended October 31, 2010 amounted to $54,275 and $143,907, respectively, and are included in the interest expense in the Statement of Operations. As of October 31, 2010, the Fund had borrowings of $83,500,000 at an interest rate of 1.10%, which are reflected in the Committed facility agreement payable on the Statement of asset and liabilities. During the year ended October 31, 2010, the average borrowing under the CFA and the effective average interest rate were $77,045,205 and 1.12%, respectively.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Fund may terminate the agreement with 270 days&#146; notice and, if the Board of Trustees determines that the elimination of all indebtedness leveraging the Fund&#146;s investments is in the best interest of the Fund&#146;s shareholders, the Fund may terminate the agreement with 60 days&#146; notice. In addition, if certain asset coverage and collateral requirements, minimum net assets or other covenants are not met, the CFA could be deemed in default and result in termination.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>On October 30, 2009, the Fund entered into an agreement with BNP that allows BNP to borrow a portion of the pledged collateral (Lent Securities) in an amount not to exceed the lesser of: (i)&nbsp;outstanding borrowings owed by the Fund to BNP and (ii) thirty three and one third percent of the Fund&#146;s total assets. The Fund can designate any security within the pledged collateral as ineligible to be a Lent Security and can recall any of the Lent Securities. The Fund also has the right to apply and set-off an amount equal to one hundred percent (100%) of the then-current fair market value of such Lent Securities against the current borrowings under the CFA. There has been no lending activity under this agreement during the year.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Note 9 &#151; Purchase and sale of securities</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Purchases and sales of securities, other than short-term securities and U.S. Treasury obligations, aggregated to $157,632,617 and $134,868,656, respectively, for the year ended October 31, 2010. Purchases and sales of U.S. Treasury obligations aggregated to $52,363,046 and $50,212,819, respectively, for the year ended October 31, 2010.</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=4 face=sans-serif>Auditors&#146; report</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Report of Independent Registered Public Accounting Firm</FONT></B></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>To the Board of Trustees and Shareholders of John Hancock Income Securities Trust:</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations, of changes in net assets and of cash flows and the financial highlights present fairly, in all material respects, the financial position of John Hancock Income Securities Trust (the &#147;Fund&#148;) at October 31, 2010, and the results of its operations, the changes in its net assets, its cash flows and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as &#147;financial statements&#148;) are the responsibility of the Fund&#146;s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the 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 are free of material misstatement. An audit 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, and evaluating the overall financial statement presentation. </FONT><FONT size=2 face=serif>We believe that our audits, which included confirmation of securities as of October 31, 2010 by correspondence with the custodian and brokers, and the application of alternative auditing procedures where securities purchased confirmations had not been received, provide a reasonable basis for our opinion.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>PricewaterhouseCoopers LLP</FONT><BR>
<FONT size=2 face=serif>Boston, Massachusetts</FONT><BR>
<FONT size=2 face=serif>December 23, 2010</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=4 face=sans-serif>Tax information</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Unaudited</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>For federal income tax purposes, the following information is furnished with respect to the distributions of the Fund, if any, paid during its taxable year ended October 31, 2010.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Fund designates the maximum allowable for the corporate dividends received deduction for the fiscal year ended October 31, 2010.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Fund designates the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003. This amount will be reflected on Form 1099-DIV for the calendar year 2010.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Shareholders will be mailed a 2010 Form 1099-DIV in January 2011. This will reflect the total of all distributions that are taxable for calendar year 2010.</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=4 face=sans-serif>Additional information</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Unaudited</FONT></B></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Investment objective and policy</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Fund is a closed-end diversified management investment company, common shares of which were initially offered to the public on February 14, 1973, and are publicly traded on the NYSE. The Fund&#146;s investment objective is to generate a high level of current income consistent with prudent investment risk. The Fund invests, primarily in a diversified portfolio of freely marketable debt securities and may invest an amount not exceeding 20% of its assets in income-producing preferred and common stock. Under normal circumstances, the Fund will invest at least 80% of net assets in income securities. Income securities will consist of the following: (i) marketable corporate debt securities, (ii) governmental obligations and (iii) cash and commercial paper. &#147;Net assets&#148; is defined as net assets plus borrowings for investment purposes. The Fund will notify shareholders at least 60 days prior to any change in this 80% investment policy.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>It is contemplated that at least 75% of the value of the Fund&#146;s total assets will be represented by debt securities, which have at the time of purchase a rating within the four highest grades as determined by Moody&#146;s Investors Service, Inc. or Standard &amp; Poor&#146;s Corporation. The Fund intends to engage in short-term trading and may invest in repurchase agreements.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Bylaws and Declaration of Trust</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>In November 2002, the Board of Trustees adopted several amendments to the Fund&#146;s bylaws, including provisions relating to the calling of a special meeting and requiring advance notice of shareholder proposals or nominees for Trustee. The advance notice provisions in the bylaws require shareholders to notify the Fund in writing of any proposal which they intend to present at an annual meeting of shareholders, including any nominations for Trustee, between 90 and 120 days prior to the first anniversary of the mailing date of the notice from the prior year&#146;s annual meeting of shareholders. The notification must be in the form prescribed by the bylaws. The advance notice provisions provide the Fund and its Trustees with the opportunity to thoughtfully consider and address the matters proposed before the Fund prepares and mails its proxy statement to shareholders. Other amendments set forth the procedures that must be followed in order for a shareholde
r to call a special meeting of shareholders. Please contact the Secretary of the Fund for additional information about the advance notice requirements or the other amendments to the bylaws.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>On August 21, 2003, shareholders approved the amendment of the Fund&#146;s bylaws effective August 26, 2003, to provide for the issuance of preferred shares.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>On March 31, 2008, the shareholders approved an amendment to the Fund&#146;s Declaration of Trust to permit the Fund&#146;s Board of Trustees to delegate the authority to declare dividends to a Dividend Committee consisting of officers, employees or agents of the Fund.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Effective September 9, 2008, the Fund&#146;s bylaws were amended with respect to notice requirements for Trustee nominations and other proposals by the Fund&#146;s shareholders. These provisions require the disclosure of the nominating shareholder and the nominee&#146;s investment interests as they relate to the Fund, as well as the name of any other shareholder supporting the nominee for election as a Trustee or the proposal of other business. In order for notice to be proper, such notice must disclose the economic interests of the nominating shareholder and nominee, including his or her holdings of shares in the Fund, the intent upon which those shares were acquired, and any hedging arrangements (including leveraged or short positions) made with respect to the shares of the Fund. Additionally, any material interest that the shareholder has in the business to be brought before the meeting must be disclosed.</FONT></P>
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<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Dividends and distributions</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>During the year ended October 31, 2010, dividends from net investment income totaling $1.16 per share were paid to shareholders. The dates of payments and the amounts per share were as follows:</FONT></P>
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     <TD noWrap align=right><FONT size=1 face=sans-serif>INCOME</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>PAYMENT DATE</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>DIVIDEND</FONT>&nbsp;</TD>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>December 31, 2009</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$0.2914</FONT>&nbsp;</TD>
     <TD noWrap align=right></TD>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>March 31, 2010</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.2755</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>June 30, 2010</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.3027</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>September 30, 2010</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>0.2916</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Total</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>$1.1612</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif></FONT></TD>
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<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Dividend reinvestment plan</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Fund offers its common shareholders a Dividend Reinvestment Plan (the Plan), which offers the opportunity to earn compounded yields. Any holder of common shares of record of the Fund may elect to participate in the Plan and receive the Fund&#146;s common shares in lieu of all or a portion of the cash dividends. The Plan is available to all common shareholders without charge. Mellon Investor Services (the Plan Agent) will act as agent for participating shareholders.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Shareholders may join the Plan by notifying the Plan Agent by telephone, in writing or by visiting the Plan Agent&#146;s Web site at www.melloninvestor.com showing an election to reinvest all or a portion of dividend payments. If received in proper form by the Plan Agent prior to the record date for a dividend, the election will be effective with respect to all dividends paid after such record date. Shareholders whose shares are held in the name of a broker or nominee should contact the broker or nominee to determine whether and how they may participate in the Plan.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board of Trustees of the Fund has authorized the Dividend Committee to declare dividends from net investment income payable in cash or, in the case of shareholders participating in the Plan, partially or entirely in the Fund&#146;s common shares. The number of shares to be issued for the benefit of each shareholder will be determined by dividing the amount of the cash dividend, otherwise payable to such shareholder on shares included under the Plan, by the per share net asset value of the common shares on the date for payment of the dividend, unless the net asset value per share on the payment date is less than 95% of the market price per share on that date, in which event the number of shares to be issued to a shareholder will be determined by dividing the amount of the cash dividend payable to such shareholder, by 95% of the market price per share of the common shares on the payment date. The market price of the common shares on a particular date shal
l be the mean between the highest and lowest sales price on the NYSE on that date. Net asset value will be determined in accordance with the established procedures of the Fund. However, if as of such payment date the market price of the common shares is lower than such net asset value per share, the number of shares to be issued will be determined on the basis of such market price. Fractional shares, carried out to four decimal places, will be credited to the shareholder&#146;s account. Such fractional shares will be entitled to future dividends.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The shares issued to participating shareholders, including fractional shares, will be held by the Plan Agent in the name of the participant. A confirmation will be sent to each shareholder promptly, normally within five to seven days, after the payment date of the dividend. </FONT><FONT size=2 face=serif>The confirmation will show the total number of shares held by such shareholder before and after the dividend, the amount of the most recent cash dividend that the shareholder has elected to reinvest and the number of shares acquired with such dividend.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Participation in the Plan may be terminated at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent&#146;s Web site, and such termination will be effective immediately. However, notice of termination must be received prior to the record date of any distribution to be effective for that distribution. Upon termination,</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>certificates will be issued representing the number of full shares of common shares held by the Plan Agent. A shareholder will receive a cash payment for any fractional share held.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The reinvestment of dividends will not relieve participants of any federal, state or local income tax, which may be due with respect to such dividend. Dividends reinvested in common shares will be treated on your federal income tax return as though you had received a dividend in cash in an amount equal to the fair market value of the shares received, as determined by the prices for common shares of the Fund on the NYSE as of the dividend payment date. Distributions from the Fund&#146;s long-term capital gains will be processed as noted above for those electing to reinvest in common shares and will be taxable to you as long-term capital gains. The confirmation referred to above will contain all the information you will require for determining the cost basis of shares acquired and should be retained for that purpose. At year end, each account will be supplied with detailed information necessary to determine total tax liability for the calendar year. All corre
spondence or additional information concerning the Plan should be directed to the Plan Agent, Mellon Bank, N.A., c/o Mellon Investor Services, P.O. Box 358015, Pittsburgh, PA 15252-8015 (Telephone:&nbsp;1-800-852-0218).</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Certain modifications to the Plan have been approved by the Board of Trustees on December 7, 2010. These modifications will be provided to shareholders at least 90 days prior to implementation.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Shareholder communication and assistance</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>If you have any questions concerning the Fund, we will be pleased to assist you. If you hold shares in your own name and not with a brokerage firm, please address all notices, correspondence, questions or other communications regarding the Fund to the transfer agent at:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=1 face=sans-serif>Mellon Investor Services</FONT><BR>
<FONT size=1 face=sans-serif>Newport Office Center VII</FONT><BR>
<FONT size=1 face=sans-serif>480 Washington Boulevard</FONT><BR>
<FONT size=1 face=sans-serif>Jersey City, NJ 07310</FONT><BR>
<FONT size=1 face=sans-serif>Telephone: 1-800-852-0218</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>If your shares are held with a brokerage firm, you should contact that firm, bank or other nominee for assistance.</FONT></P>
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<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Board Consideration of and Continuation of Investment Advisory Agreement and Subadvisory Agreement</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board of Trustees (the Board, the members of which are referred to as Trustees) of </FONT><FONT size=2 face=serif>John Hancock Income Securities Trust (the Fund) met in-person on May 2&#150;4 and June 6&#150;8, 2010 to consider the approval of the Fund&#146;s investment advisory agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Adviser), the Fund&#146;s investment adviser. The Board also considered the approval of the investment subadvisory agreement (the Subadvisory Agreement) among the Adviser, MFC Global Investment Management (U.S.), LLC (the Subadviser) and the Fund. The Advisory Agreement and the Subadvisory Agreement are referred to as the Agreements.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Activities and composition of the Board</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board consists of eleven individuals, nine of whom are Independent Trustees. Independent Trustees are generally those individuals who are unaffiliated with the Fund, the Adviser and the Subadviser. The Trustees are responsible for the oversight of operations of the Fund and perform the various duties required of directors of investment companies by the Investment Company Act of 1940, as amended (the 1940 Act). The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Board has appointed an Independent Trustee as Chairperson. The Board has established four standing committees that are composed entirely of Independent Trustees: the Audit Committee; the Compliance Committee; the Nominating, Governance and Administration Committee; and the Contracts/Operations Committee. Additionally, Investment Performance Committee A is a standing committee of the Board that is composed of Independent Trustees and
 one Trustee who is affiliated with the Adviser. Investment Performance Committee A oversees and monitors matters relating to the investment performance of the Fund. The Board has also designated a Vice Chairperson to serve in the absence of the Chairperson, who also serves as Chairman of the Board&#146;s Nominating, Governance and Administration Committee. The Board also designates working groups or ad hoc committees as it deems appropriate.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>The approval process</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Pursuant to the 1940 Act, the Board is required to consider the continuation of the Agreements on an annual basis. Throughout the year, the Board, acting directly and through its committees, regularly reviews and assesses the quality of the services that the Fund receives under these Agreements. In this regard, the Board reviews reports of the Adviser at least quarterly, which include, among other things, Fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year. The Board considers at each of its meetings factors that are relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by the Adviser and Subadviser to the Fund and its shareholders.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>Prior to the May 2&#150;4, 2010 meeting, the Board requested and received materials specifically relating to the Agreements. The materials provided in connection with the May meeting included information independently compiled and prepared by Morningstar, Inc. (Morningstar) on Fund fees and expenses, and the investment performance of the Fund. This Fund information is assembled in a format that permits comparison with similar information from a category of relevant funds (the Category) and a peer group of comparable funds (the Peer Group) as determined by Morningstar, and its benchmark index. Other material provided for the Fund review included (a)&nbsp;information on the profitability of the Agreements to the Adviser and a discussion of any additional benefits to the Adviser and its affiliates that result from being the Adviser or Subadviser to the Fund; (b) a general analysis provided by the Adviser and the Subadviser concerning investment advisory fees c
harged to other clients, such as institutional clients and other investment companies, under similar investment mandates, as well as the performance of such other clients; (c) the impact of economies of scale; and (d) a summary of aggregate amounts paid by the Fund to the Adviser.</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>At an in-person meeting held on May 2&#150;4, 2010, the Board reviewed materials relating to its consideration of the Agreements. As a result of the discussions that occurred during the May 2&#150;4, 2010 meeting, the Board presented the Adviser and Subadviser with questions and requests for additional information and the Adviser and Subadviser responded to these requests with additional written information in advance of the June 6&#150;8, 2010 Board meeting. The Board also reviewed these additional materials relating to its consideration of the Agreements.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>At an in-person meeting held on June 6&#150;8, 2010, the Board, including the Independent Trustees, formally considered the continuation of the Advisory Agreement between the Adviser and the Fund and the Subadvisory Agreement among the Adviser, the Subadviser and the Fund, each for an additional one-year term. The Board considered all factors it believed relevant with respect to the Fund, including, among other factors: (a) the nature, extent and quality of the services provided by the Adviser and the Subadviser; (b) the investment performance of the Fund and portfolio management of the Subadviser; (c) the advisory fees and the cost of the services and profits to be realized by the Adviser and certain affiliates from their relationship with the Fund; (d) economies of scale; and (e) other factors.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board also considered other matters important to the approval process, such as payments made to the Adviser or its affiliates relating to the distribution of Fund shares and other services. The Board reviewed services related to the valuation and pricing of Fund portfolio holdings. Other important matters considered by the Board were the direct and indirect benefits to the Adviser, the Subadviser, and their affiliates from their relationship with the Fund and advice from independent legal counsel with respect to the review process and materials submitted for the Board&#146;s review. Each Trustee may have attributed different weights to the various items considered.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The key factors considered by the Board and the conclusions reached are described below.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Nature, extent and quality of services</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board, including the Independent Trustees, reviewed the nature, extent and quality of services provided by the Adviser and the Subadviser, including the investment advisory services and the resulting performance of the Fund. The Board reviewed the Adviser&#146;s and Subadviser&#146;s senior management personnel responsible for investment operations, including the senior investment officers. The Board also reviewed the materials provided by the Fund&#146;s portfolio management team discussing Fund performance and the Fund&#146;s investment objective, strategies and outlook.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory, and supervisory personnel. It considered the background and experience of senior management and investment professionals responsible for managing the Fund. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and the Subadviser responsible for the daily investment activities of the Fund, including, among other things, portfolio trading capabilities, use of technology, commitment to compliance and approach to training and retaining portfolio managers and other research, advisory and management personnel.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board considered the Subadviser&#146;s history and experience with the Fund. The Board considered the Adviser&#146;s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs, record of compliance with applicable laws and regulation, with the Fund&#146;s investment policies and restrictions and with the applicable Code of Ethics, and the responsibilities of the Adviser&#146;s and Subadviser&#146;s compliance departments.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>In addition to advisory services, the Board considered the quality of the administrative and non-investment advisory services provided to the Fund by the Adviser under a separate agreement.</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board noted that the Adviser and its affiliates provide the Fund with certain administrative, transfer agency, shareholder and other services (in addition to any such services provided to the Fund by third parties) and officers and other personnel as are necessary for the operations of the Fund. The Board reviewed the structure and duties of the Adviser&#146;s administration, accounting, legal and compliance departments and considered the Adviser&#146;s policies and procedures for assuring compliance with applicable laws and regulations.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser and Subadviser to their other clients, including other registered investment companies, institutional investors and separate accounts. The Board reviewed a general analysis provided by the Adviser and the Subadviser concerning investment advisory fees charged to such other clients under similar investment mandates, the services provided to such other clients as compared to the services provided to the Fund, the performance of such other clients, and other factors relating to such other clients. The Board considered the significant differences between the Adviser&#146;s and Subadviser&#146;s services to the Fund and those services they provide to other clients which, to the extent the other client is not a closed-end fund, may generally be attributable to the more burdensome regulatory and legal obligations of closed-end funds and the hig
her turnover of closed-end fund assets.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Fund performance</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board, including the Independent Trustees, reviewed and considered the performance history of the Fund. The Board was provided with reports, independently prepared by Morningstar, which included a comprehensive analysis of the Fund&#146;s performance. The Board also reviewed a narrative and statistical analysis of the Morningstar data that was prepared by the Adviser, which analyzed various factors that may affect the Morningstar rankings. The Board reviewed information regarding the investment performance of the Fund as compared to its Morningstar Category and Peer Group as well as its benchmark index (see chart below). The Board was provided with a description of the methodology used by Morningstar to select the funds in the Category and the Peer Group. The Board also considered updated performance information provided by the Adviser at its May and June 2010 meetings. The Board regularly reviews the performance of the Fund throughout the year and atta
ches more importance to performance over relatively longer periods of time, typically three to five years. The Board noted that the Fund significantly exceeded the performance of its Peer Group median, its Category median and its benchmark index during the past year and that performance for the 3-, 5- and 10-year periods tracked well with its comparison groups.</FONT></P>
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     <TD noWrap align=right><FONT size=1 face=sans-serif>1 YEAR</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>3 YEAR</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5 YEAR</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>10 YEAR</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Income Securities</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>47.42%</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>4.59%</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>4.26%</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>6.47%</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Barclays Capital U.S. Government</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.52%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>5.81%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.71%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.34%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Bond Index</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Intermediate Government</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>27.97%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.92%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.90%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.61%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Category Median</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Morningstar 15(c) Peer Group Median</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>27.97%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.71%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>4.60%</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>6.45%</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board noted that the Subadviser remained consistent with its investment style and adhered to its investment mandates.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Expenses and fees</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board, including the Independent Trustees, reviewed the Fund&#146;s contractual advisory fee rate payable by the Fund to the Adviser as compared with the other funds in its Category and Peer Group. The Board also received information about the investment subadvisory fee rate payable by the Adviser to the Subadviser for investment subadvisory services. The Board considered the services provided and the fees charged by the Adviser and the Subadviser to other types of clients with similar investment mandates, including separately managed institutional accounts.</FONT></P>
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     <TD noWrap align=right><FONT size=2 face=sans-serif>43</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>In addition, the Board considered the cost of the services provided to the Fund by the Adviser. The Board received and considered expense information regarding the Fund&#146;s various components, including advisory fees, distribution fees and fees other than advisory and distribution fees, including transfer agent fees, custodian fees, administration fees and other miscellaneous fees (</FONT><I><FONT size=2 face=serif>e.g., </FONT></I><FONT size=2 face=serif>fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also considered expense information regarding the Fund&#146;s total operating expense ratio (Gross Expense Ratio) and total operating expense ratio after taking the fee waiver arrangement applicable to the Advisory Agreement rate into account (Net Expense Ratio). The Board considered information comparing the Gross Expense Ratio and Net Expense Ratio of the Fund to that of the 
Peer Group and Category medians. As part of its analysis, the Board reviewed the Adviser&#146;s methodology in allocating its costs to the management of the Fund. The Board considered expenses and fee rates to be higher or lower if they were over or under 10 basis points, respectively; slightly higher or slightly lower if they were above or below 6-10 basis points, respectively, and inline if they were above or below by 5 basis points.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board noted that the investment advisory rate was higher than the Category and Peer Group medians. The Board noted the following information about the Fund&#146;s Gross and Net Expense Ratios in relation with the Fund&#146;s Peer Group and Category:</FONT></P>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>EXPENSE RATIO</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>RELATION TO PEER GROUP</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>RELATION TO CATEGORY</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Gross Expense Ratio (Class A)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2.25%</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Higher</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Slightly Lower</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Net Expense Ratio (Class A)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>1.40%</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Higher</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Higher</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board also received and considered information relating to the Fund&#146;s use of leverage and its impact on fees.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board received and reviewed statements relating to the Adviser&#146;s financial condition and profitability with respect to the services it provides the Fund. The Board was also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by the Adviser for services provided to the Fund. The Board reviewed the Adviser&#146;s profitability with respect to the Fund and other funds the Board currently oversees for the year ended December 31, 2009 compared to available aggregate profitability data provided for the year ended December 31, 2008.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreement, as well as on other relationships between the Fund and the Adviser and its affiliates. The Board also considered a comparison of the Adviser&#146;s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board reviewed the Adviser&#146;s profitability with respect to other fund complexes managed by the Adviser and/or its affiliates. The Board reviewed the Adviser&#146;s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Adviser, the types of funds managed, expense allocations and business mix, and therefore comparabili
ty of profitability is somewhat limited.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board considered the profitability information with respect to the Subadviser, which is affiliated with the Adviser. In addition, as noted above, the Board considered the methodologies involved in allocating such profit to the Subadviser.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Economies of scale</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board, including the Independent Trustees, considered the extent to which economies of scale might be realized as the assets of the Fund increase and whether there should be changes in the advisory fee rate or structure in order to enable the Fund to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the assets of the Fund.</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board also considered the Adviser&#146;s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. During its considerations, the Board recognized the limited significance of economies of scale with respect to closed-end funds.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board&#146;s understanding that most of the Adviser&#146;s costs are not specific to individual funds, but rather are incurred across a variety of products and services. To ensure that any economies are reasonably shared with the Fund as its assets increase, the Adviser and the Board agreed to continue the existing breakpoints to the Agreement fee rate.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Other benefits to the Adviser and the Subadviser</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board understands that the Adviser, the Subadviser, or their affiliates may derive other ancillary benefits from their relationship with the Fund, both tangible and intangible, such as their ability to leverage investment professionals who manage other portfolios, an increase in their profile in the investment advisory community, and the engagement of their affiliates and/or significant shareholders as service providers to the Fund, including for administrative, transfer agency and distribution services. The Board believes that certain of these benefits are difficult to quantify. The Board also was informed that the Subadviser may use third party research obtained by soft dollars generated by certain mutual fund transactions to assist itself in managing all or a number of its other client accounts.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>Board determination</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=serif>The Board, including the Independent Trustees, unanimously approved the continuation of the Advisory Agreement between the Adviser and the Fund for an additional one-year term and the Subadvisory Agreement among the Adviser, Subadviser and the Fund for an additional one-year term. Based upon its evaluation of relevant factors in their totality, the Board, including a majority of the Independent Trustees, was satisfied that the terms of the Agreements were fair and reasonable and in the best interest of the Fund and its shareholders. In arriving at a decision to approve the Agreements, the Board did not identify any single factor listed above, or any group of factors listed above, as all-important or controlling, but considered all factors together, and different Trustees may have attributed different weights to the various factors considered. The Independent Trustees were also assisted by the advice of independent legal counsel in making this determination.
 The Board noted that contractual fee arrangements for the Fund reflect the results of several years of review by the Board and certain predecessor Trustees, and discussions between such Trustees (and predecessor Trustees) and the Adviser. Certain aspects of the arrangements may be the subject of more attention in some years than in others, and the Trustees&#146; conclusions may be based in part on their consideration of these arrangements in prior years.</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=7 face=serif>Trustees and Officers</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the Fund and execute policies formulated by the Trustees.</FONT></B></P>
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     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Independent Trustees</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
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     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Name, Year of Birth</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Trustee</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Number of John</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><I><FONT size=1 face=sans-serif>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>of the</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Hancock funds</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Principal occupation(s) and other</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Trust</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>overseen by</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>directorships during past 5 years</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>since</FONT></B><SUP><FONT size=1 face=sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Trustee</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Patti McGill Peterson,* </FONT></B><FONT size=1 face=sans-serif>Born: 1943</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>1996</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Chairperson (since December 2008); Principal, PMP Globalinc (consulting) (since 2007); Senior</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Associate, Institute for Higher Education Policy (since 2007); Executive Director, CIES (international</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>education agency) (until 2007); Vice President, Institute of International Education (until 2007); Senior</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Fellow, Cornell University Institute of Public Affairs, Cornell University (1997&#150;1998); Former President</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Wells College, St. Lawrence University and the Association of Colleges and Universities of the State</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>of New York. Director of the following: Niagara Mohawk Power Corporation (until 2003); Security</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Mutual Life (insurance) (until 1997); ONBANK (until 1993). Trustee of the following: Board of Visitors,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>The University of Wisconsin, Madison (since 2007); Ford Foundation, International Fellowships Program</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>(until 2007); UNCF, International Development Partnerships (until 2005); Roth Endowment (since 2002);</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Council for International Educational Exchange (since 2003).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>James F. Carlin, </FONT></B><FONT size=1 face=sans-serif>Born: 1940</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2005</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Chief Executive Officer, Director and Treasurer, Alpha Analytical Laboratories (environmental, chemical</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>and pharmaceutical analysis) (since 1985); Part Owner and Treasurer, Lawrence Carlin Insurance Agency,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Inc. (since 1995); Chairman and Chief Executive Officer, Carlin Consolidated, Inc. (management/</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>investments) (since 1987).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>William H. Cunningham, </FONT></B><FONT size=1 face=sans-serif>Born: 1944</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2005</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Professor, University of Texas, Austin, Texas (since 1971); former Chancellor, University of Texas System</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>and former President of the University of Texas, Austin, Texas; Director of the following: LIN Television</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>(since 2009); Lincoln National Corporation (insurance) (Chairman since 2009 and Director since 2006);</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Resolute Energy Corporation (since 2009); Nanomedical Systems, Inc. (biotechnology company)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>(Chairman since 2008); Yorktown Technologies, LP (tropical fish) (Chairman since 2007); Greater Austin</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Crime Commission (since 2001); Southwest Airlines (since 2000); former Director of the following:</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Introgen (manufacturer of biopharmaceuticals) (until 2008); Hicks Acquisition Company I, Inc. (until</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>2007); Jefferson-Pilot Corporation (diversified life insurance company) (until 2006); and former Advisory</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Director, JP Morgan Chase Bank (formerly Texas Commerce Bank&#150;Austin) (until 2009).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Deborah C. Jackson,</FONT></B><SUP><FONT size=1 face=sans-serif>2 </FONT></SUP><FONT size=1 face=sans-serif>Born: 1952</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2008</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Chief Executive Officer, American Red Cross of Massachusetts Bay (since 2002); Board of Directors of</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Eastern Bank Corporation (since 2001); Board of Directors of Eastern Bank Charitable Foundation (since</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>2001); Board of Directors of American Student Assistance Corp. (1996&#150;2009); Board of Directors of</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Boston Stock Exchange (2002&#150;2008); Board of Directors of Harvard Pilgrim Healthcare (health benefits</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>company) (since 2007).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR></TABLE></DIV>
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<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>46</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
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     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Independent Trustees </FONT></B><FONT size=1 face=sans-serif>(continued)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Name, Year of Birth</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Trustee</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Number of John</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><I><FONT size=1 face=sans-serif>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>of the</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Hancock funds</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Principal occupation(s) and other</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Trust</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>overseen by</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>directorships during past 5 years</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>since</FONT></B><SUP><FONT size=1 face=sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Trustee</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Charles L. Ladner, </FONT></B><FONT size=1 face=sans-serif>Born: 1938</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2004</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Chairman and Trustee, Dunwoody Village, Inc. (retirement services) (since 2008); Director, Philadelphia</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Archdiocesan Educational Fund (since 2009); Senior Vice President and Chief Financial Officer, UGI</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Corporation (public utility holding company) (retired 1998); Vice President and Director for AmeriGas,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Inc. (retired 1998); Director of AmeriGas Partners, L.P. (gas distribution) (until 1997); Director,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>EnergyNorth, Inc. (until 1995); Director, Parks and History Association (Cooperating Association,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>National Park Service) (until 2005).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Stanley Martin,</FONT></B><SUP><FONT size=1 face=sans-serif>2 </FONT></SUP><FONT size=1 face=sans-serif>Born: 1947</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2008</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Senior Vice President/Audit Executive, Federal Home Loan Mortgage Corporation (2004&#150;2006);</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Executive Vice President/Consultant, HSBC Bank USA (2000&#150;2003); Chief Financial Officer/Executive</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Vice President, Republic New York Corporation &amp; Republic National Bank of New York (1998&#150;2000);</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Partner, KPMG LLP (1971&#150;1998).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Dr. John A. Moore, </FONT></B><FONT size=1 face=sans-serif>Born: 1939</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>1996</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>President and Chief Executive Officer, Institute for Evaluating Health Risks, (nonprofit institution)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>(until 2001); Senior Scientist, Sciences International (health research) (until 2003); Former</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Assistant Administrator &amp; Deputy Administrator, Environmental Protection Agency; Principal,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Hollyhouse (consulting) (since 2000); Director, CIIT Center for Health Science Research (nonprofit</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>research) (until 2007).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Steven R. Pruchansky,*</FONT></B><SUP><FONT size=1 face=sans-serif>2 </FONT></SUP><FONT size=1 face=sans-serif>Born: 1944</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2005</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>and President, Greenscapes of Southwest Florida, Inc. (until 2000); Member, Board of Advisors, First</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>American Bank (since 2008); Managing Director, Jon James, LLC (real estate) (since 2000); Director,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>First Signature Bank &amp; Trust Company (until 1991); Director, Mast Realty Trust (until 1994); President,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Maxwell Building Corp. (until 1991).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Gregory A. Russo, </FONT></B><FONT size=1 face=sans-serif>Born: 1949</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2009</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Vice Chairman, Risk &amp; Regulatory Matters, KPMG LLP (&#147;KPMG&#148;) (2002&#150;2006); Vice Chairman, Industrial</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Markets, KPMG (1998&#150;2002).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Non-Independent Trustees</FONT></B><SUP><FONT size=1 face=sans-serif>3</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Name, Year of Birth</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Trustee</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Number of John</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><I><FONT size=1 face=sans-serif>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>of the</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Hancock funds</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Principal occupation(s) and other</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Trust</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>overseen by</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>directorships during past 5 years</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>since</FONT></B><SUP><FONT size=1 face=sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Trustee</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Hugh McHaffie,</FONT></B><SUP><FONT size=1 face=sans-serif>4 </FONT></SUP><FONT size=1 face=sans-serif>Born: 1959</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2010</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Executive Vice President, John Hancock Financial Services (since 2006, including prior positions);</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>President of John Hancock Trust and John Hancock Funds II (since 2009); Trustee, John Hancock retail</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>funds (since 2010); Chairman and Director, John Hancock Advisers, LLC, John Hancock Investment</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Management Services, LLC and John Hancock Funds, LLC (since 2010); Senior Vice President, Individual</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Business Product Management, MetLife, Inc. (1999&#150;2006).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR></TABLE></DIV>
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<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="95%"></TD>
     <TD width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>47</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<TR>
     <TD width="69%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Non-Independent Trustees</FONT></B><SUP><FONT size=1 face=sans-serif>3 </FONT></SUP><FONT size=1 face=sans-serif>(continued)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Name, Year of Birth</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Trustee</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Number of John</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><I><FONT size=1 face=sans-serif>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>of the</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Hancock funds</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Principal occupation(s) and other</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Trust</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>overseen by</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>directorships during past 5 years</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>since</FONT></B><SUP><FONT size=1 face=sans-serif>1</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Trustee</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>John G. Vrysen, </FONT></B><FONT size=1 face=sans-serif>Born: 1955</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2009</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>47</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Senior Vice President, John Hancock Financial Services (since 2006); Director, Executive Vice President</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>and Chief Operating Officer, John Hancock Advisers, LLC, John Hancock Investment Management</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Services, LLC and John Hancock Funds, LLC (since 2005); Chief Operating Officer, John Hancock Funds&nbsp;II</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>and John Hancock Trust (since 2007); Chief Operating Officer, John Hancock retail funds (until&nbsp;2009);</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Trustee, John Hancock retail funds (since 2009).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Principal officers who are not Trustees</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>&nbsp;</FONT></B></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Name, Year of Birth</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Officer</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><I><FONT size=1 face=sans-serif>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>of the</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Principal occupation(s) and other</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Trust</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>directorships during past 5 years</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>since</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Keith F. Hartstein, </FONT></B><FONT size=1 face=sans-serif>Born: 1956</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2005</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT size=1 face=sans-serif>President and Chief Executive Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Senior Vice President, John Hancock Financial Services (since 2004); Director, President and Chief</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Executive Officer, John Hancock Advisers, LLC and John Hancock Funds, LLC (since 2005); Director,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>MFC Global Investment Management (U.S.), LLC (since 2005); Director, John Hancock Investment</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Management Services, LLC (since 2006); President and Chief Executive Officer, John Hancock</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>retail funds (since 2005); Member, Investment Company Institute Sales Force Marketing</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Committee (since 2003).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Andrew G. Arnott, </FONT></B><FONT size=1 face=sans-serif>Born: 1971</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2009</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT size=1 face=sans-serif>Senior Vice President and Chief Operating Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Senior Vice President, John Hancock Financial Services (since 2009); Executive Vice President,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>John Hancock Advisers, LLC (since 2005); Executive Vice President, John Hancock Investment</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Management Services, LLC (since 2006); Executive Vice President, John Hancock Funds, LLC (since</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>2004); Chief Operating Officer, John Hancock retail funds (since 2009); Senior Vice President,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>John Hancock retail funds (since 2010); Vice President, John Hancock Funds II and John Hancock Trust</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>(since 2006); Senior Vice President, Product Management and Development, John Hancock Funds,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>LLC (until 2009).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Thomas M. Kinzler, </FONT></B><FONT size=1 face=sans-serif>Born: 1955</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2006</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=3 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT size=1 face=sans-serif>Secretary and Chief Legal Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Vice President, John Hancock Financial Services (since 2006); Secretary and Chief Legal Counsel,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>John Hancock Advisers, LLC, John Hancock Investment Management Services, LLC and John Hancock</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Funds, LLC (since 2007); Secretary and Chief Legal Officer, John Hancock retail funds, John Hancock</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Funds II and John Hancock Trust (since 2006); Vice President and Associate General Counsel,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Massachusetts Mutual Life Insurance Company (1999&#150;2006); Secretary and Chief Legal Counsel, MML</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=3 noWrap align=left><FONT size=1 face=sans-serif>Series Investment Fund (2000&#150;2006); Secretary and Chief Legal Counsel, MassMutual Select Funds and</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>MassMutual Premier Funds (2004&#150;2006).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>48</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
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<TR>
     <TD width="84%"></TD>
     <TD width="15%"></TD></TR>
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     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Principal officers who are not Trustees </FONT></B><FONT size=1 face=sans-serif>(continued)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Name, Year of Birth</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Officer</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><I><FONT size=1 face=sans-serif>Position(s) held with Fund</FONT></I></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>of the</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Principal occupation(s) and other</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Trust</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>directorships during past 5 years</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT size=1 face=sans-serif>since</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Francis V. Knox, Jr., </FONT></B><FONT size=1 face=sans-serif>Born: 1947</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2005</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
&nbsp;</FONT></B><FONT size=1 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT size=1 face=sans-serif>Chief Compliance Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Vice President, John Hancock Financial Services (since 2005); Chief Compliance Officer, John Hancock</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>retail funds, John Hancock Funds II, John Hancock Trust, John Hancock Advisers, LLC and John Hancock</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Investment Management Services, LLC (since 2005); Vice President and Chief Compliance Officer, MFC</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Global Investment Management (U.S.), LLC (2005&#150;2008).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Charles A. Rizzo, </FONT></B><FONT size=1 face=sans-serif>Born: 1957</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2007</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT size=1 face=sans-serif>Chief Financial Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Vice President, John Hancock Financial Services (since 2008); Senior Vice President, John Hancock</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Advisers, LLC and John Hancock Investment Management Services, LLC (since 2008); Chief</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Financial Officer, John Hancock retail funds, John Hancock Funds II and John Hancock Trust (since</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>2007); Assistant Treasurer, Goldman Sachs Mutual Fund Complex (2005&#150;2007); Vice President,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Goldman Sachs (2005&#150;2007); Managing Director and Treasurer, Scudder Funds, Deutsche Asset</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Management (2003&#150;2005).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Salvatore Schiavone, </FONT></B><FONT size=1 face=sans-serif>Born: 1965</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=1 face=sans-serif>2009</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=2 noWrap align=left><B><FONT size=1 face=sans-serif>
<HR SIZE=1 noShade>
</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT size=1 face=sans-serif>Treasurer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Assistant Vice President, John Hancock Financial Services (since 2007); Vice President, John Hancock</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Advisers, LLC and John Hancock Investment Management Services, LLC (since 2007); Treasurer,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>John Hancock retail funds (since 2010); Treasurer, John Hancock Closed-End Funds (since 2009);</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Assistant Treasurer, John Hancock Funds II and John Hancock Trust (since 2010); Assistant Treasurer,</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>John Hancock retail funds, John Hancock Funds II and John Hancock Trust (2007&#150;2009); Assistant</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Treasurer, Fidelity Group of Funds (2005&#150;2007); Vice President, Fidelity Management Research</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD colSpan=2 noWrap align=left><FONT size=1 face=sans-serif>Company (2005&#150;2007); Assistant Treasurer, Scudder Group of Funds (2003&#150;2005); Director, Deutsche</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Asset Management (2003&#150;2005).</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><FONT size=1 face=sans-serif>The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>1 </FONT></SUP><FONT size=1 face=sans-serif>Each Trustee holds office until his or her successor is elected and qualified, or until the Trustee&#146;s death, retirement, </FONT><FONT size=1 face=sans-serif>resignation or removal.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>2 </FONT></SUP><FONT size=1 face=sans-serif>Member of Audit Committee.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>3 </FONT></SUP><FONT size=1 face=sans-serif>Because Messrs. McHaffie and Vrysen are senior executives or directors with the Adviser and its affiliates, each of </FONT><FONT size=1 face=sans-serif>them is considered an &#147;interested person,&#148; as defined in the Investment Company Act of 1940, of the Fund.</FONT><BR>
<SUP><FONT size=1 face=sans-serif>4 </FONT></SUP><FONT size=1 face=sans-serif>Mr. McHaffie was appointed by the Board of Trustees effective 8-31-10.<BR>
<BR>
</FONT><FONT size=1 face=sans-serif>*Effective 1-1-11, Steven R. Pruchansky will succeed Patti McGill Peterson as the Chairperson of the Board.</FONT></P>
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     <TD noWrap align=right><B><FONT size=1 face=sans-serif>Annual report | </FONT></B><FONT size=1 face=sans-serif>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT size=2 face=sans-serif>49</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=7 face=serif>More information</FONT></P>
<DIV align=left>
<TABLE style="WIDTH: 80%" border=0 cellSpacing=0>
<TR>
     <TD width="33%"></TD>
     <TD width="33%"></TD>
     <TD width="33%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Trustees</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Officers</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Investment adviser</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>Patti McGill Peterson,&nbsp;</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=serif>Keith F. Hartstein</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=serif>John Hancock Advisers, LLC</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><I><FONT size=2 face=serif>Chairperson</FONT></I>&nbsp;</TD>
     <TD noWrap align=left><I><FONT size=2 face=serif>President and</FONT></I>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>James F. Carlin</FONT>&nbsp;</TD>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><I><FONT size=2 face=serif>Chief Executive Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Subadviser</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>William H. Cunningham</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=serif>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=serif>MFC Global Investment</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>Deborah C. Jackson</FONT><FONT size=1 face=sans-serif>*</FONT></TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif><FONT size=2 face=serif>Andrew G. Arnott</FONT></FONT></TD>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=2 face=serif>Management (U.S.), LLC</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>Charles L. Ladner</FONT></TD>
     <TD style="TEXT-INDENT: 0px" noWrap align=left><I><FONT size=2 face=serif><I><FONT size=2 face=serif>Senior Vice President</FONT></I><FONT size=1 face=sans-serif>**</FONT></FONT></I></TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>Stanley Martin</FONT><FONT size=1 face=sans-serif>*</FONT></TD>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=2 face=serif><I><FONT size=2 face=serif>and Chief Operating Officer</FONT></I></FONT></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Custodian</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>Hugh McHaffie</FONT><FONT size=1 face=sans-serif>&#134;**</FONT></TD>
     <TD noWrap align=left><I><FONT size=2 face=serif><FONT size=2 face=serif>&nbsp;</FONT></FONT></I></TD>
     <TD noWrap align=left><FONT size=2 face=serif>State Street Bank and</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>Dr. John A. Moore</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=serif>Thomas M. Kinzler</FONT></TD>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=2 face=serif>Trust Company</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>Steven R. Pruchansky</FONT><FONT size=1 face=sans-serif>*</FONT></TD>
     <TD noWrap align=left><I><FONT size=2 face=serif><FONT size=2 face=serif><I><FONT size=2 face=serif>Secretary and Chief Legal Officer</FONT></I></FONT></FONT></I></TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>Gregory A. Russo</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=serif><FONT size=2 face=serif>&nbsp;</FONT></FONT></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Transfer agent</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=serif>John G. Vrysen</FONT><FONT size=1 face=sans-serif>&#134;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=serif>Francis V. Knox, Jr.</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=serif>Mellon Investor Services</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=serif><I><FONT size=2 face=serif><I><FONT size=2 face=serif>Chief Compliance Officer</FONT></I></FONT></I></FONT></TD>
     <TD noWrap align=left><FONT size=2 face=serif>&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT size=2 face=serif><I><FONT size=2 face=serif><FONT size=2 face=serif>&nbsp;</FONT></FONT></I></FONT></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Legal counsel</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=serif>Charles A. Rizzo</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=serif>K&amp;L Gates LLP</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><I><FONT size=2 face=serif>Chief Financial Officer</FONT></I></TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=serif>&nbsp;</FONT></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Independent registered</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=serif>Salvatore Schiavone</FONT></TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>public accounting firm</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 1px" noWrap align=left><FONT size=1 face=sans-serif>*Member of the</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=serif><I><FONT size=2 face=serif>Treasurer</FONT></I></FONT></TD>
     <TD noWrap align=left><FONT size=2 face=serif>PricewaterhouseCoopers LLP</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>Audit Committee</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>**Effective 8-31-10</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Stock symbol</FONT></B>&nbsp;</TD></TR>
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     <TD style="TEXT-INDENT: 1px" noWrap align=left><FONT size=1 face=sans-serif>&#134;Non-Independent Trustee</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=serif>Listed New York Stock</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD style="TEXT-INDENT: 6px" noWrap align=left><FONT size=2 face=serif>Exchange: JHS</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><B><FONT size=1 face=sans-serif>For shareholder assistance refer to page 40</FONT></B></P>
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     <TD noWrap align=left><FONT size=1 face=sans-serif>You can also contact us:</FONT>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>1-800-852-0218</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>Regular mail:</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=1 face=sans-serif>jhfunds.com</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Mellon Investor Services</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Newport Office Center VII</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>480 Washington Boulevard</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Jersey City, NJ 07310</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><FONT size=1 face=sans-serif>The Fund&#146;s proxy voting policies and procedures, as well as the Fund&#146;s proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) Web site at www.sec.gov or on our Web site.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=1 face=sans-serif>The Fund&#146;s complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form&nbsp;N-Q. The Fund&#146;s Form N-Q is available on our Web site and the SEC&#146;s Web site, www.sec.gov, and can be reviewed and copied (for a fee) at the SEC&#146;s Public Reference Room in Washington, DC. Call 1-800-SEC-0330 to&nbsp;receive information on the operation of the SEC&#146;s Public Reference Room.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=1 face=sans-serif>We make this information on your fund, as well as </FONT><B><FONT size=1 face=sans-serif>monthly portfolio holdings</FONT></B><FONT size=1 face=sans-serif>, and other fund details available on our Web site www.jhfunds.com or by calling 1-800-852-0218.</FONT></P>
<P style="TEXT-ALIGN: left"><I><FONT size=2 face=serif>The report is certified under the Sarbanes-Oxley Act, which requires mutual funds and other public companies to affirm that, to the best of their knowledge, the information in their financial reports is fairly and accurately stated in all material respects.</FONT></I></P>
<P style="TEXT-ALIGN: left"><I><FONT size=2 face=serif>The Fund is listed for trading on the NYSE and has filed with the NYSE its chief executive officer certification regarding compliance with the NYSE&#146;s listing standards. The Fund also files with the SEC the certification of its chief executive officer and chief financial officer required by Section 302 of the Sarbanes-Oxley Act.</FONT></I></P>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>50</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=1 face=sans-serif>Income Securities Trust </FONT><B><FONT size=1 face=sans-serif>| Annual report</FONT></B>&nbsp;</TD></TR></TABLE></DIV>
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<BR>
<P style="TEXT-ALIGN: left"><FONT size=1 face=sans-serif>1-800-852-0218</FONT><BR>
<FONT size=1 face=sans-serif>1-800-231-5469 TDD</FONT><BR>
<FONT size=1 face=sans-serif>1-800-843-0090 EASI-Line</FONT><BR>
<FONT size=1 face=sans-serif>www.</FONT><FONT size=1 face=sans-serif>jhfunds.</FONT><FONT size=1 face=sans-serif>com</FONT></FONT><FONT size=1 face=sans-serif></FONT></P>
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     <TD noWrap align=center><FONT size=2 face=sans-serif></FONT></TD></TR>
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     <TD align=center><FONT size=2 face=sans-serif>STANDARD</FONT></TD>
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     <TD noWrap align=center><FONT size=2 face=sans-serif>U.S. POSTAGE</FONT>&nbsp;</TD>
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     <TD align=center><FONT size=2 face=sans-serif>PAID</FONT></TD>
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     <TD align=center><FONT size=2 face=sans-serif>MIS</FONT></TD>
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     <TD noWrap align=right><FONT size=1 face=sans-serif>P600A 10/10</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=right><FONT size=1 face=sans-serif>12/10</FONT>&nbsp;</TD></TR></TABLE></DIV>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 2. CODE OF ETHICS.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>As of the end of the year, October 31, 2010, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer, Chief Financial Officer and Treasurer (respectively, the principal executive officer, the principal financial officer and the principal accounting officer, the &#147;Senior Financial Officers&#148;). A copy of the code of ethics is filed as an exhibit to this Form N-CSR.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Stanley Martin is the audit committee financial expert and is &#147;independent&#148;, pursuant to general instructions on Form N-CSR Item 3.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(a) Audit Fees<BR>
</FONT><FONT size=2 face=sans-serif>The aggregate fees billed for professional services rendered by the principal accountant(s) for the audit of the registrant&#146;s annual financial statements or services that are normally provided by the accountant(s) in connection with statutory and regulatory filings or engagements amounted to $36,410 for the fiscal year ended October 31, 2010 and $41,819 for the fiscal year ended October 31, 2009. These fees were billed to the registrant and were approved by the registrant&#146;s audit committee.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(b) Audit-Related Services<BR>
</FONT><FONT size=2 face=sans-serif>Audit-related fees amounted to $0 for the fiscal year ended October 31, 2010 and $0 for the fiscal year ended October 31, 2009 billed to the registrant or to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant ("control affiliates").</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(c) Tax Fees<BR>
</FONT><FONT size=2 face=sans-serif>The aggregate fees billed for professional services rendered by the principal accountant(s) for the tax compliance, tax advice and tax planning (&#147;tax fees&#148;) amounted to $2,959 for the fiscal year ended October 31, 2010 and $2,873 for the fiscal year ended October 31, 2009. The nature of the services comprising the tax fees was the review of the registrant&#146;s income tax returns and tax distribution requirements. These fees were billed to the registrant and were approved by the registrant&#146;s audit committee. There were no tax fees billed to the control affiliates.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(d) All Other Fees<BR>
</FONT><FONT size=2 face=sans-serif>The all other fees billed to the registrant for products and services provided by the principal accountant were $20,020 for the fiscal year ended October 31, 2010 and $3,555 for the fiscal year ended October 31, 2009 billed to control affiliates for products and services provided by the principal accountant. The nature of the services comprising the all other fees was related to the principal accountant&#146;s report on the registrant&#146;s Eligible Asset Coverage. These fees were approved by the registrant&#146;s audit committee.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(e)(1) Audit Committee Pre-Approval Policies and Procedures:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The trust&#146;s Audit Committee must pre-approve all audit and non-audit services provided by the independent registered public accounting firm (the &#147;Auditor&#148;) relating to the operations or financial reporting of the funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The trust&#146;s Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee&#146;s consideration of audit-related and non-audit services by</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>the Auditor. The policies and procedures require that any audit-related and non-audit service provided by the Auditor and any non-audit service provided by the Auditor to a fund service provider that relates directly to the operations and financial reporting of a fund are subject to approval by the Audit Committee before such service is provided. Audit-related services provided by the Auditor that are expected to exceed $25,000 per instance/per fund are subject to specific pre-approval by the Audit Committee. Tax services provided by the Auditor that are expected to exceed $30,000 per instance/per fund are subject to specific pre-approval by the Audit Committee.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>All audit services, as well as the audit-related and non-audit services that are expected to exceed the amounts stated above, must be approved in advance of provision of the service by formal resolution of the Audit Committee. At the regularly scheduled Audit Committee meetings, the Committee reviews a report summarizing the services, including fees, provided by the Auditor.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Audit-Related Fees, Tax Fees and All Other Fees:<BR>
</FONT><FONT size=2 face=sans-serif>There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(f) According to the registrant&#146;s principal accountant, for the fiscal year ended October 31, 2010, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who were not full-time, permanent employees of principal accountant was less than 50%.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(g) The aggregate non-audit fees billed by the registrant's accountant(s) for services rendered to the registrant and rendered to the registrant's control affiliates for each of the last two fiscal years of the registrant were $3,086,768 for the fiscal year ended October 31, 2010 and $8,200,526 for the fiscal year ended October 31, 2009.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(h) The audit committee of the registrant has considered the non-audit services provided by the registrant&#146;s principal accountant(s) to the control affiliates and has determined that the services that were not pre-approved are compatible with maintaining the principal accountant(s)' independence.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The registrant has a separately-designated standing audit committee comprised of independent trustees. The members of the audit committee are as follows:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Stanley Martin - Chairman</FONT><BR>
<FONT size=2 face=sans-serif>Deborah C. Jackson</FONT><BR>
<FONT size=2 face=sans-serif>Steven R. Pruchansky</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 6. SCHEDULE OF INVESTMENTS.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(a) Not applicable.</FONT><BR>
<FONT size=2 face=sans-serif>(b) Not applicable.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>See attached exhibit &#147;Proxy Voting Policies and Procedures&#148;.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT </FONT><FONT size=2 face=sans-serif>COMPANIES.</FONT></P>
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<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Information about the portfolio managers</FONT></B><BR>
<FONT size=2 face=sans-serif>Management Biographies and Fund ownership</FONT><BR>
<FONT size=2 face=sans-serif>Below is an alphabetical list of the portfolio managers who share joint responsibility for the </FONT><FONT size=2 face=sans-serif>day-to-day investment management of the Fund. It provides a brief summary of their business </FONT><FONT size=2 face=sans-serif>careers over the past five years and their range of beneficial share ownership in the Fund as of </FONT><FONT size=2 face=sans-serif>October 31, 2010.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Barry H. Evans, CFA</FONT><BR>
<FONT size=2 face=sans-serif>President, Chief Fixed Income Officer and Chief Operating Officer, MFC Global Investment</FONT><BR>
<FONT size=2 face=sans-serif>Management (U.S.), LLC since 2005</FONT><BR>
<FONT size=2 face=sans-serif>Senior Vice President, John Hancock Advisers LLC (1986 &#150; 2005)</FONT><BR>
<FONT size=2 face=sans-serif>Began business career in 1986</FONT><BR>
<FONT size=2 face=sans-serif>Joined fund team in 2002</FONT><BR>
<FONT size=2 face=sans-serif>Fund ownership &#151; $10,001 &#150; $50,000</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Jeffrey N. Given, CFA</FONT><BR>
<FONT size=2 face=sans-serif>Vice President, MFC Global Investment Management (U.S.), LLC since 2005</FONT><BR>
<FONT size=2 face=sans-serif>Second Vice President, John Hancock Advisers LLC (1993&#150; 2005)</FONT><BR>
<FONT size=2 face=sans-serif>Began business career in 1993</FONT><BR>
<FONT size=2 face=sans-serif>Joined fund team in 1999</FONT><BR>
<FONT size=2 face=sans-serif>Fund ownership &#151; $1 &#150; $10,000</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Howard C. Greene, CFA</FONT><BR>
<FONT size=2 face=sans-serif>Senior Vice President, MFC Global Investment Management (U.S.), LLC since 2005</FONT><BR>
<FONT size=2 face=sans-serif>Senior Vice President, John Hancock Advisers LLC (2002 &#150; 2005)</FONT><BR>
<FONT size=2 face=sans-serif>Vice President at Sun Life Financial Services Company of Canada (1987 &#150;2002)</FONT><BR>
<FONT size=2 face=sans-serif>Began business career in 1979</FONT><BR>
<FONT size=2 face=sans-serif>Joined fund team in 2005</FONT><BR>
<FONT size=2 face=sans-serif>Fund ownership &#151; None</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Other Accounts the Portfolio Managers are Managing<BR>
</FONT><FONT size=2 face=sans-serif>The table below indicates for each portfolio manager information about the accounts over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of October 31, 2010. For purposes of the table, &#147;Other Pooled Investment Vehicles&#148; may include investment partnerships and group trusts, and &#147;Other Accounts&#148; may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts.</FONT></P>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>PORTOLIO MANAGER</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD colSpan=2 noWrap align=left><FONT size=2 face=sans-serif>OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS</FONT><FONT size=2></FONT> <FONT size=2 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>&nbsp;</FONT></TD>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>Barry H. Evans, CFA</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>Other Investment Companies: 10 accounts with assets of</FONT><FONT size=2>&nbsp;</FONT></TD>
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     <TD noWrap align=left><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>approximately $11.6 billion.</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>Other Pooled Investment Vehicles: None</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>Other Accounts: 87 accounts with assets of</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>approximately $358 million.</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>Jeffrey N. Given, CFA</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>Other Investment Companies: 13 accounts with assets of</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>approximately $16.7 billion.</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=2>&nbsp;</FONT></TD>
     <TD colSpan=2 noWrap align=left><FONT size=2 face=sans-serif>Other Pooled Investment Vehicles: 4 accounts with assets of</FONT><FONT size=2></FONT> <FONT size=2 face=sans-serif></FONT></TD></TR>
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     <TD noWrap align=left><FONT size=2></FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif><FONT size=2 face=sans-serif>approximately $197.4 million.</FONT></FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>Other Accounts: 11 accounts with assets of</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>approximately $5.1 billion.</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
<TR>
     <TD colSpan=2><FONT size=2>&nbsp;</FONT></TD>
     <TD><FONT size=2></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2 face=sans-serif>Howard C. Greene, CFA</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>Other Investment Companies: 8 accounts with assets of</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>approximately $7.9 billion.</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2>&nbsp;</FONT></TD>
     <TD colSpan=2 noWrap align=left><FONT size=2 face=sans-serif>Other Pooled Investment Vehicles: 4 accounts with assets of</FONT><FONT size=2></FONT> <FONT size=2 face=sans-serif></FONT></TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT size=2></FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif><FONT size=2 face=sans-serif>approximately $197.4 million.</FONT></FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>Other Accounts: 11 accounts with assets of</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>approximately $5.1 billion.</FONT><FONT size=2>&nbsp;</FONT></TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif></FONT></TD></TR></TABLE></DIV>
<P style="MARGIN: 0px"><FONT size=2></FONT>&nbsp;</P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Neither the Adviser or the Subadviser receives a fee based upon the investment performance of any of the accounts included under &#147;Other Accounts Managed by the Portfolio Managers&#148; in the table above.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. For the reasons outlined</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>below, the Fund does not believe that any material conflicts are likely to arise out of a portfolio manager&#146;s responsibility for the management of the Fund as well as one or more other accounts. The Adviser and the Subadviser have adopted procedures, overseen by the Chief Compliance Officer, that are intended to monitor compliance with the policies referred to in the following paragraphs.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>&#149; The Subadviser has policies that require a portfolio manager to allocate investment opportunities in an equitable manner and generally to allocate such investments proportionately among all accounts with similar investment objectives.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>&#149; When a portfolio manager intends to trade the same security for more than one account, the policies of the Subadviser generally require that such trades for the individual accounts are aggregated so each account receives the same price. Where not possible or may not result in the best possible price, the Subadviser will place the order in a manner intended to result in as favorable a price as possible for such client.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>&#149; The investment performance on specific accounts is not a factor in determining the portfolio manager&#146;s compensation. See &#147;Compensation of Portfolio Managers&#148; below. Neither the Adviser nor the Subadviser receives a performance-based fee with respect to other accounts managed by the Fund&#146;s portfolio managers.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>&#149; The Subadviser imposes certain trading restrictions and reporting requirements for accounts in which a portfolio manager or certain family members have a personal interest in order to confirm that such accounts are not favored over other accounts.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>&#149; The Subadviser seeks to avoid portfolio manager assignments with potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Compensation of Portfolio Managers<BR>
</FONT><FONT size=2 face=sans-serif>The Subadviser has adopted a system of compensation for portfolio managers and others involved in the investment process that is applied systematically among investment professionals. At the Subadviser, the structure of compensation of investment professionals is currently comprised of the following basic components: base salary and an annual investment bonus plan as well as customary benefits that are offered generally to all full-time employees of the Subadviser. A limited number of senior investment professionals, who serve as officers of both the Subadviser and its parent company, may also receive options or restricted stock grants of common shares of Manulife Financial. The following describes each component of the compensation package for the individuals identified as a portfolio manager for the Funds.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Base salary. Base compensation is fixed and normally reevaluated on an annual basis. The Subadviser seeks to set compensation at market rates, taking into account the experience and responsibilities of the investment professional.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Investment Bonus Plan. Only investment professionals are eligible to participate in the Investment Bonus Plan. Under the plan, investment professionals are eligible for an annual bonus. The plan is intended to provide a competitive level of annual bonus compensation that is tied to the investment professional achieving superior investment performance and aligns the financial incentives of the Subadviser and the investment professional. Any bonus under the plan is completely discretionary, with a maximum annual bonus that may be well in excess of base salary. Payout of a portion of this bonus may be deferred for up to five years. While the amount of any bonus is discretionary, the following factors are generally used in determining bonuses under the plan:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>&#149; Investment Performance: The investment performance of all accounts managed by the investment professional over one- and three-year periods are considered. The pre- tax performance of each account is measured relative to an appropriate peer group benchmark (for example a Morningstar large cap growth peer group if the fund invests primarily in large cap stocks with a growth strategy). With respect to fixed income accounts, relative yields are also used to measure performance.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>&#149; The Profitability of the Subadviser: The profitability of the Subadviser and its parent company are also considered in determining bonus awards.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>&#149; Non-Investment Performance: To a lesser extent, intangible contributions, including the investment professional&#146;s support of client service and sales activities, new fund/strategy idea generation, professional growth and development, and management, where applicable, are also evaluated when determining bonus awards.</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Options and Stock Grants. A limited number of senior investment professionals may receive options to purchase shares of Manulife Financial stock. Generally, such option would permit the investment professional to purchase a set amount of stock at the market price on the date of grant. The option can be exercised for a set period (normally a number of years or until termination of employment) and the investment professional would exercise the option if the market value of Manulife Financial stock increases. Some investment professionals may receive restricted stock grants, where the investment professional is entitle to receive the stock at no or nominal cost, provided that the stock is forgone if the investment professional&#146;s employment is terminated prior to a vesting date.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The Subadviser also permits investment professionals to participate on a voluntary basis in a deferred compensation plan, under which the investment professional may elect on an annual basis to defer receipt of a portion of their compensation until retirement. Participation in the plan is voluntary.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT </FONT><FONT size=2 face=sans-serif>INVESTMENT COMPANY AND AFFILIATED PURCHASERS.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Not applicable.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>There were no material changes to previously disclosed John Hancock Funds &#150; Governance Committee Charter.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 11. CONTROLS AND PROCEDURES.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>ITEM 12. EXHIBITS.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(a)(1) Code of Ethics for Senior Financial Officers is attached.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(a)(2) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(b)(1) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(c)(1) Proxy Voting Policies and Procedures are attached.</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(c)(2) Submission of Matters to a Vote of Security Holders is attached. See attached &#147;John Hancock Funds &#150; Governance Committee Charter&#148;.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(c)(3) Contact person at the registrant.</FONT></P>
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     <TD noWrap align=center><FONT size=2 face=sans-serif>SIGNATURES</FONT>&nbsp;</TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>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.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>John Hancock Income Securities Trust</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif></FONT><BR>
<BR>
<U><FONT size=2 face=sans-serif>By: /s/ Keith F. Hartstein</FONT></U><BR>
<FONT size=2 face=sans-serif>Keith F. Hartstein</FONT><BR>
<FONT size=2 face=sans-serif>President and</FONT><BR>
<FONT size=2 face=sans-serif>Chief Executive Officer</FONT><BR>
<BR>
<FONT size=2 face=sans-serif>Date: December 17, 2010</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>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.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif></FONT><BR>
<BR>
<U><FONT size=2 face=sans-serif>By: /s/ Keith F. Hartstein</FONT></U><BR>
<FONT size=2 face=sans-serif>Keith F. Hartstein</FONT><BR>
<FONT size=2 face=sans-serif>President and</FONT><BR>
<FONT size=2 face=sans-serif>Chief Executive Officer</FONT><BR>
<BR>
<FONT size=2 face=sans-serif>Date: December 17, 2010</FONT><BR>
<BR>
<FONT size=2 face=sans-serif></FONT><BR>
<BR>
<U><FONT size=2 face=sans-serif>By: /s/ Charles A. Rizzo</FONT></U><BR>
<FONT size=2 face=sans-serif>Charles A. Rizzo</FONT><BR>
<FONT size=2 face=sans-serif>Chief Financial Officer</FONT><BR>
<BR>
<FONT size=2 face=sans-serif>Date: December 17, 2010</FONT></P>
</DIV>
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<SEQUENCE>2
<FILENAME>b_incomesectrustcert.htm
<DESCRIPTION>CERTIFICATION
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<P style="TEXT-ALIGN: left"><B><U><FONT size=2 face=sans-serif>CERTIFICATION</FONT></U></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>I, Keith F. Hartstein, certify that:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>1. I have reviewed this report on Form N-CSR of the John Hancock Income Securities Trust (the &#147;registrant&#148;);</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>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;</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>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;</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>4. The registrant's other certifying officer 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:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(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;</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(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;</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(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 on such evaluation; and</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>5. The registrant's other certifying officer 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):</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(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</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>(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.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Date: December 17, 2010</FONT><BR>
<BR>
<U><FONT size=2 face=sans-serif>/s/ Keith F. Hartstein</FONT></U><BR>
<FONT size=2 face=sans-serif>Keith F. Hartstein</FONT><BR>
<FONT size=2 face=sans-serif>President and</FONT><BR>
<FONT size=2 face=sans-serif>Chief Executive Officer</FONT></P>
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<B><U><FONT size=2 face="sans-serif">CERTIFICATION</FONT></U></B></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">I, Charles A. Rizzo, certify that:</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">1. I have reviewed this report on Form N-CSR of the John Hancock Income Securities Trust (the &#147;registrant&#148;);</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">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;</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">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;</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">4. The registrant's other certifying officer 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:</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">(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;</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">(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;</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">(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 on such evaluation; and</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">5. The registrant's other certifying officer 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):</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">(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</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">(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.</FONT></P>
<P style="text-align: left;">
<FONT size=2 face="sans-serif">Date: December 17, 2010</FONT><BR>
<BR>
<U><FONT size=2 face="sans-serif">/s/ Charles A. Rizzo</FONT></U><BR>
<FONT size=2 face="sans-serif">Charles A. Rizzo</FONT><BR>
<FONT size=2 face="sans-serif">Chief Financial Officer</FONT></P>
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<TYPE>EX-99.906 CERT
<SEQUENCE>3
<FILENAME>c_incomesectrustcertnos.htm
<DESCRIPTION>CERTIFICATION 906
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     <TD noWrap align=center><B><FONT size=2 face=sans-serif>Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=center><B><FONT size=2 face=sans-serif>the Sarbanes-Oxley Act of 2002</FONT></B></TD></TR></TABLE></DIV>
<P style="MARGIN: 0px">&nbsp;</P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>In connection with the attached Report of John Hancock Income Securities Trust (the &#147;registrant&#148;) on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the registrant does hereby certify that, to the best of such officer's knowledge:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant as of, and for, the periods presented in the Report.</FONT></P>
<P style="TEXT-ALIGN: left"><U><FONT size=2 face=sans-serif>/s/ Keith F. Hartstein</FONT></U><BR>
<FONT size=2 face=sans-serif>Keith F. Hartstein</FONT><BR>
<FONT size=2 face=sans-serif>President and Chief Executive Officer</FONT><BR>
<BR>
<FONT size=2 face=sans-serif>Dated: December 17, 2010</FONT><BR>
<BR>
<U><FONT size=2 face=sans-serif>/s/ Charles A. Rizzo</FONT></U><BR>
<FONT size=2 face=sans-serif>Charles A. Rizzo</FONT><BR>
<FONT size=2 face=sans-serif>Chief Financial Officer</FONT><BR>
<BR>
<FONT size=2 face=sans-serif>Dated: December 17, 2010</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>A signed original of this written statement, required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.</FONT></P>
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<TYPE>EX-99.CODE ETH
<SEQUENCE>4
<FILENAME>d_codeofethics.htm
<DESCRIPTION>CODE OF ETHICS
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<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><b><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;text-transform:uppercase;">John Hancock Trust</font></b></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><b><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;text-transform:uppercase;">John Hancock Funds </font></b></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><b><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;text-transform:uppercase;">John Hancock Funds II</font></b></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><b><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;text-transform:uppercase;">John Hancock Funds III</font></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><b><u><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;text-transform:uppercase;">Sarbanes-Oxley Code of Ethics </font></u></b></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><b><u><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;text-transform:uppercase;">for </font></u></b></p>

<p align=center style="margin:0in;margin-bottom:.0001pt;text-align:center;"><b><u><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;text-transform:uppercase;">Principal Executive, Principal Financial Officers
&amp; Treasurer</font></u></b></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<h1 align=left style="margin-bottom:.0001pt;margin-left:.5in;margin-right:0in;margin-top:0in;page-break-after:avoid;text-align:left;text-indent:-.5in;"><b><font face="'Times New Roman'" style="font-size:12.0pt;">I.</font></b><b><font face="'Times New Roman'" style="font-size:7.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font></b><b><font face="'Times New Roman'" style="font-size:12.0pt;">Covered Officers/Purpose of the Code</font></b></h1>

<p style="margin-bottom:.0001pt;margin-left:0in;margin-right:0in;margin-top:0in;"><font color=black face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">This code of ethics (this &#8220;Code&#8221;) for John Hancock Trust, John
Hancock Funds<sup><font style=""><font style="">[1]</font></font></a></sup>,
John Hancock Funds II and John Hancock Funds III, each a registered management
investment company under the Investment Company Act of 1940, as amended (&#8220;1940
Act&#8221;), which may issue shares in separate and distinct series (each investment
company and series thereunder to be hereinafter referred to as a &#8220;Fund&#8221;),
applies to each Fund&#8217;s Principal Executive Officer (&#8220;President&#8221;), Principal
Financial Officer (&#8220;Chief Financial Officer&#8221;) and Treasurer (&#8220;Treasurer&#8221;) (the &#8220;Covered
Officers&#8221; as set forth in </font><u><font color=black face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">Exhibit A</font></u><font color=black face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">) for the purpose of promoting:</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><b><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">&nbsp;</font></b></p>

<p style="margin-bottom:.0001pt;margin-left:.75in;margin-right:0in;margin-top:0in;text-indent:-.25in;"><font face=Wingdings lang=EN-US style="font-size:12.0pt;">&#x21D2;</font><font face="'Times New Roman'" lang=EN-US style="font-size:7.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">honest and ethical conduct, including the ethical handling of
actual or apparent conflicts of interest between personal and professional
relationships;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;margin-left:.5in;"><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;margin-left:.75in;text-indent:-.25in;"><font face=Wingdings lang=EN-US style="font-size:12.0pt;">&#x21D2;</font><font face="'Times New Roman'" lang=EN-US style="font-size:7.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">full, fair, accurate, timely and understandable disclosure in
reports and documents that the Fund files with, or submits to, the Securities
and Exchange Commission (&#8220;SEC&#8221;) and in other public communications made by the
Fund;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;margin-left:.75in;text-indent:-.25in;"><font face=Wingdings lang=EN-US style="font-size:12.0pt;">&#x21D2;</font><font face="'Times New Roman'" lang=EN-US style="font-size:7.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">compliance with applicable laws and governmental rules and
regulations;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;margin-left:.75in;text-indent:-.25in;"><font face=Wingdings lang=EN-US style="font-size:12.0pt;">&#x21D2;</font><font face="'Times New Roman'" lang=EN-US style="font-size:7.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">the prompt internal reporting of violations of the Code to an
appropriate person or persons identified in the Code; and</font></p>

<p style="margin:0in;margin-bottom:.0001pt;"><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">&nbsp;</font></p>

<p style="margin:0in;margin-bottom:.0001pt;margin-left:.75in;text-indent:-.25in;"><font face=Wingdings lang=EN-US style="font-size:12.0pt;">&#x21D2;</font><font face="'Times New Roman'" lang=EN-US style="font-size:7.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</font><font face="'Times New Roman'" lang=EN-US style="font-size:12.0pt;">accountability for adherence to the Code.</font></p>





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<P style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: right" align=right><B><FONT style="mso-bidi-font-weight: normal"><I><FONT style="mso-bidi-font-style: normal"><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></I></B></FONT></I></FONT></B>&nbsp;</P>
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<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Each of the Covered Officers should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></B>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></B>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">II.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>Overview</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>A &#147;conflict of interest&#148; occurs when a Covered Officer&#146;s private interest interferes with the interests of, or his service to, the Fund.&nbsp; For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Fund. Certain conflicts of interest arise out of the relationships between the Covered Officers and the Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940, as amended (the &#147;Investment Company Act&#148;) and the Investment Advisers Act of 1940, as amended (the &#147;Investment Advisers Act&#148;). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Fund because of their status as &#147;affiliated persons&#148; of the Fund. Ea
ch of the Covered Officers is an officer or employee of the investment adviser or a service provider (&#147;Service Provider&#148;) to the Fund. The Fund&#146;s, the investment adviser&#146;s and the Service Provider&#146;s compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Fund and the investment adviser and the Service Provider of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Fund, for the investment adviser or for the Service Provider), be involved in establishing policies and implementing decisions which will have different effects on the investment adviser, the Service Provider and the Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fund and the investment adviser and the Service Provider and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thu
s, if such participation is performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, it will be deemed to have been handled ethically. In addition, it is recognized by the Fund&#146;s Board of Trustees/Directors (the &#147;Board&#148;) that the Covered Officers may also be officers or employees of one or more other investment companies covered by other Codes.</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but the Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of an Covered Officer should not be placed improperly before the interest of the Fund. </FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: center" align=center><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *</FONT></P>
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<P style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: right" align=right><B><FONT style="mso-bidi-font-weight: normal"><I><FONT style="mso-bidi-font-style: normal"><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></I></B></FONT></I></FONT></B>&nbsp;</P>
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<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>Each Covered Officer must:</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">not use his/her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally to the detriment of the Fund;</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.5in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">not cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than for the benefit of the Fund; and</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">not use material non-public knowledge of portfolio transactions made or contemplated for the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions.</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Additionally, conflicts of interest may arise in other situations, the propriety of which may be discussed, if material, with the Fund&#146;s Chief Compliance Officer (&#147;CCO&#148;).&nbsp; Examples of these include:</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">service as a director/trustee on the board of any public or private company;</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">the receipt of any non-nominal gifts;</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">the receipt of any entertainment from any company with which the Fund has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety (or other formulation as the Fund already uses in another code of conduct);</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">any ownership interest in, or any consulting or employment relationship with, any of the Fund&#146;s service providers, other than its investment adviser, any sub-adviser, principal underwriter, administrator or any affiliated person thereof; and</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer&#146;s employment, such as compensation or equity ownership.</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">III.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Disclosure &amp; Compliance</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Fund;</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, whether within or outside the Fund, including to the Fund&#146;s directors and auditors, and to governmental regulators and self-regulatory organizations;</FONT></P>
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<P style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: right" align=right><B><FONT style="mso-bidi-font-weight: normal"><I><FONT style="mso-bidi-font-style: normal"><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></I></B></FONT></I></FONT></B>&nbsp;</P>
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<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Each Covered Officer should, to the extent appropriate within his/her area of responsibility, consult with other officers and employees of the Fund and the Fund&#146;s adviser or any sub-adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Fund files with, or submits to, the SEC and in other public communications made by the Fund; and</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.</FONT></P>
<P style="MARGIN: 0in 0in 0pt 1in; TEXT-INDENT: -0.5in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
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<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">IV.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Reporting &amp; Accountability</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Each Covered Officer must:</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">upon adoption of the Code (or thereafter as applicable, upon becoming an Covered Officer), affirm in writing to the Fund&#146;s CCO that he/she has received, read, and understands the Code;</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">annually thereafter affirm to the Fund&#146;s CCO that he/she has complied with the requirements of the Code;</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">not retaliate against any employee or Covered Officer or their affiliated persons for reports of potential violations that are made in good faith;</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">notify the Fund&#146;s CCO promptly if he/she knows of any violation of this Code (Note: failure to do so is itself a violation of this Code); and</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">report at least annually any change in his/her affiliations from the prior year.</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">The Fund&#146;s CCO is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation.&nbsp; However, any approvals or waivers sought by the Principal Executive Officer will be considered by the Fund&#146;s Board or the Compliance Committee thereof (the &#147;Committee&#148;).</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>The Fund will follow these procedures in investigating and enforcing this Code:</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">the Fund&#146;s CCO will take all appropriate action to investigate any potential violations reported to him/her;</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: 0in"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></B>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">if, after such investigation, the CCO believes that no violation has occurred, the CCO is not required to take any further action;</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">any matter that the CCO believes is a violation will be reported to the Board or, if applicable, Compliance Committee;</FONT></P>
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<P style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: right" align=right><B><FONT style="mso-bidi-font-weight: normal"><I><FONT style="mso-bidi-font-style: normal"><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></I></B></FONT></I></FONT></B>&nbsp;</P>
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<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">if the Board or, if applicable, Compliance Committee concurs that a violation has occurred, the Board, either upon its determination of a violation or upon recommendation of the Compliance Committee, if applicable, will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the Service Provider or the investment adviser or its board; or a recommendation to dismiss the Registrant&#146;s Executive Officer;</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">the Board, or if applicable the Compliance Committee, will be responsible for granting waivers, as appropriate; and</FONT></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.75in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></B>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></B>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">V.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Other Policies &amp; Procedures</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">This Code shall be the sole code of ethics adopted by the Fund for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Fund, the Fund&#146;s adviser, any sub-adviser, principal underwriter or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Fund&#146;s and its investment adviser&#146;s codes of ethics under Rule 204A-1 under the Investment Advisers Act and Rule 17j-1 under the Investment Company Act, respectively, are separate requirements applying to the Covered Officers and others, and are not part of this Code.</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></B>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></B>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">VI.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Amendments</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Fund&#146;s Board, including a majority of independent directors.</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></B>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">VII.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Confidentiality</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Fund&#146;s Board and its counsel, the investment adviser and the relevant Service Providers.</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
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<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">VIII.</FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></B><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Internal Use</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>The Code is intended solely for the internal use by the Fund and does not constitute an admission, by or on behalf of the Fund, as to any fact, circumstance, or legal conclusion. </FONT></P>
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<P style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: right" align=right><B><FONT style="mso-bidi-font-weight: normal"><I><FONT style="mso-bidi-font-style: normal"><B><I><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT></I></B></FONT></I></FONT></B>&nbsp;</P>
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<P style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: center" align=center><B><U><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>Exhibit A</FONT></U></B></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: center" align=center><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>Persons Covered by this Code of Ethics</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: center" align=center><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>(As of September 2010)</FONT></B></P>
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<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>John Hancock Trust </FONT></B></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Principal Executive Officer and President &#150; Hugh McHaffie</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Principal Financial Officer and Chief Financial Officer &#150; Charles Rizzo</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Treasurer&nbsp; &#150; Michael J. Leary</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>John Hancock Funds</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Principal Executive Officer and President &#150; Keith Hartstein</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Principal Financial Officer and Chief Financial Officer &#150; Charles Rizzo</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Treasurer&nbsp; &#150; Salvatore Schiavone</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>John Hancock Funds II</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Principal Executive Officer and President &#150; Hugh McHaffie</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Principal Financial Officer and Chief Financial Officer &#150; Charles Rizzo</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Treasurer&nbsp; &#150; Michael J. Leary</FONT></P>
<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'"></FONT>&nbsp;</P>
<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'" color=black>John Hancock Funds III</FONT></B></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Principal Executive Officer and President &#150; Keith Hartstein</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Principal Financial Officer and Chief Financial Officer &#150; Charles Rizzo</FONT></P>
<P style="MARGIN: 0in 0in 0pt 0.25in; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 12pt" face=Wingdings>&#x21D2;</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="'Times New Roman'">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 12pt" face="'Times New Roman'">Treasurer&nbsp; &#150; Salvatore Schiavone</FONT></P>
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<FONT style="VERTICAL-ALIGN: super"><FONT style="VERTICAL-ALIGN: super"><FONT lang=EN-US style="FONT-SIZE: 10pt" face="'Times New Roman'">[1]</FONT></FONT></FONT></A><FONT lang=EN-US style="FONT-SIZE: 10pt" face="'Times New Roman'"> John Hancock Funds includes the following trusts: John Hancock Bank and Thrift Opportunity Fund; John Hancock Bond Trust; John Hancock California Tax-Free Income Fund; John Hancock Capital Series; John Hancock Current Interest; John Hancock Equity Trust; John Hancock Income Securities Trust; John Hancock Investment Trust; John Hancock Investment Trust II; John Hancock Investment Trust III; John Hancock Investors Trust; John Hancock Municipal Securities Trust; John Hancock Patriot Premium Dividend Fund II; Trust; John Hancock Preferred Income Fund; John Hancock Preferred Income Fund II; John Hancock Preferred Income Fund III; John Hancock Series Trust; John Hancock Sovereign Bond Fund; John Hancock Strategic Series; John Hancock Tax-Exempt Series Fund; John Hancock World Fund; Joh
n Hancock Tax-Advantaged Dividend Income Fund and John Hancock Tax-Advantaged Global Shareholder Yield Fund.</FONT></P>
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<FILENAME>e_govcommcharter.htm
<DESCRIPTION>GOVERNANCE COMMITTEE CHARTER
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     <TD align=center><B><FONT face=sans-serif size=2>JOHN HANCOCK FUNDS</FONT></B> </TD></TR>
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     <TD noWrap align=center><B><FONT face=sans-serif size=2>NOMINATING, GOVERNANCE AND ADMINISTRATION COMMITTEE CHARTER</FONT></B>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=2>A. </FONT><U><FONT face=sans-serif size=2>Composition</FONT></U><FONT face=sans-serif size=2>. The Nominating, Governance and Administration Committee (the &#147;Committee&#148;) shall be composed entirely of Trustees who are &#147;independent&#148; as defined in the rules of the New York Stock Exchange (&#147;NYSE&#148;) or any other exchange, as applicable, and are not &#147;interested persons&#148; as defined in the Investment Company Act of 1940 of any of the funds, or of any fund&#146;s investment adviser or principal underwriter (the &#147;Independent Trustees&#148;) who are designated for membership from time to time by the Board of Trustees. The Chairman of the Board shall be a member of the Committee.</FONT></P>
<P align=left><FONT face=sans-serif size=2>B. </FONT><U><FONT face=sans-serif size=2>Overview</FONT></U><FONT face=sans-serif size=2>. The overall charter of the Committee is to make determinations and recommendations to the Board on issues related to the composition and operation of the Board and corporate governance matters applicable to the Independent Trustees, as well as issues related to complex-wide matters and practices designed to facilitate uniformity and administration of the Board's oversight of the funds, and to discharge such additional duties, responsibilities and functions as are delegated to it from time to time.</FONT></P>
<P align=left><FONT face=sans-serif size=2>C. </FONT><U><FONT face=sans-serif size=2>Specific Responsibilities</FONT></U><FONT face=sans-serif size=2>. The Committee shall have the following duties and powers, to be exercised at such times and in such manner as the Committee shall deem necessary or appropriate:</FONT></P>
<P align=left><FONT face=sans-serif size=2>1. To consider and determine nominations of individuals to serve as Trustees.</FONT></P>
<P align=left><FONT face=sans-serif size=2>2. To consider, as it deems necessary or appropriate, the criteria for persons to fill existing or newly created Trustee vacancies. The Committee shall use the criteria and principles set forth in Annex A to guide its Trustee selection process.</FONT></P>
<P align=left><FONT face=sans-serif size=2>3. To consider and determine the amount of compensation to be paid by the funds to the Independent Trustees, including incremental amounts, if any, payable to Committee Chairmen, and to address compensation-related matters. The Chairman of the Board has been granted the authority to approve special compensation to Independent Trustees in recognition of any significant amount of additional time and service to the funds required of them, subject to ratification of any such special compensation by the Committee at the next regular meeting of the Committee.</FONT></P>
<P align=left><FONT face=sans-serif size=2>4. To consider and determine the duties and compensation of the Chairman of the Board.</FONT></P>
<P align=left><FONT face=sans-serif size=2>5. To consider and recommend changes to the Board regarding the size, structure, and composition of the Board.</FONT></P>
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<P align=left><FONT face=sans-serif size=2>6. To evaluate, from time to time, and determine changes to the retirement policies for the Independent Trustees, as appropriate.</FONT></P>
<P align=left><FONT face=sans-serif size=2>7. To develop and recommend to the Board, if deemed desirable, guidelines for corporate governance (&#147;Corporate Governance Guidelines&#148;) for the funds that take into account the rules of the NYSE and any applicable law or regulation, and to periodically review and assess the Corporate Governance Guidelines and recommend any proposed changes to the Board for approval.</FONT></P>
<P align=left><FONT face=sans-serif size=2>8. To monitor all expenditures and practices of the Board or the Committees or the Independent Trustees not otherwise incurred and/or monitored by a particular Committee, including, but not limited to: D&amp;O insurance and fidelity bond coverage and costs; association dues, including Investment Company Institute membership dues; meeting expenditures and policies relating to reimbursement of travel expenses and expenses associated with offsite meetings; expenses and policies associated with Trustee attendance at educational or informational conferences; and publication expenses.</FONT></P>
<P align=left><FONT face=sans-serif size=2>9. To consider, evaluate and make recommendations and necessary findings regarding independent legal counsel and any other advisers, experts or consultants, that may be engaged by the Board of Trustees, by the Trustees who are not &#147;interested persons&#148; as defined in the Investment Company Act of 1940 of any of the funds or any fund&#146;s investment adviser or principal underwriter, or by the Committee, from time to time, other than as may be engaged directly by another Committee.</FONT></P>
<P align=left><FONT face=sans-serif size=2>10. To periodically review the Board&#146;s committee structure and the charters of the Board&#146;s committees, and recommend to the Board of Trustees changes to the committee structure and charters as it deems appropriate.</FONT></P>
<P align=left><FONT face=sans-serif size=2>11. To coordinate and administer an annual self-evaluation of the Board, which will include, at a minimum, a review of its effectiveness in overseeing the number of funds in the fund complex and the effectiveness of its committee structure.</FONT></P>
<P align=left><FONT face=sans-serif size=2>12. To report its activities to Board of Trustees and to make such recommendations with respect to the matters described above and other matters as the Committee may deem necessary or appropriate.</FONT></P>
<P align=left><FONT face=sans-serif size=2>D. </FONT><U><FONT face=sans-serif size=2>Additional Responsibilities</FONT></U><FONT face=sans-serif size=2>. The Committee will also perform other tasks assigned to it from time to time by the Chairman of the Board or by the Board of Trustees, and will report findings and recommendations to the Board of Trustees, as appropriate.</FONT></P>
<P align=left><FONT face=sans-serif size=2>E. </FONT><U><FONT face=sans-serif size=2>Governance</FONT></U><FONT face=sans-serif size=2>. One member of the Committee shall be appointed as chair. The chair shall be responsible for leadership of the Committee, including scheduling meetings or</FONT></P>
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<P align=left><FONT face=sans-serif size=2>reviewing and approving the schedule for them, preparing agendas or reviewing and approving them before meetings, and making reports to the Board of Trustees, as appropriate.</FONT></P>
<P align=left><FONT face=sans-serif size=2>F. </FONT><U><FONT face=sans-serif size=2>Miscellaneous</FONT></U><FONT face=sans-serif size=2>. The Committee shall meet as often as it deems appropriate, with or without management, as circumstances require. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the funds&#146; expense, as it determines necessary to carry out its duties. The Committee shall have direct access to such officers of and service providers to the funds as it deems desirable.</FONT></P>
<P align=left><FONT face=sans-serif size=2>G. </FONT><U><FONT face=sans-serif size=2>Evaluation</FONT></U><FONT face=sans-serif size=2>. At least annually, the Committee shall evaluate its own performance, including whether the Committee is meeting frequently enough to discharge its responsibilities appropriately.</FONT></P>
<P align=left><FONT face=sans-serif size=2>H. </FONT><U><FONT face=sans-serif size=2>Review</FONT></U><FONT face=sans-serif size=2>. The Committee shall review this Charter periodically and recommend such changes to the Board of Trustees as it deems desirable.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Last revised: December 9, 2008</FONT></P>
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<P align=left><FONT face=sans-serif size=2>ANNEX A</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>General Criteria</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>1. Nominees should have a reputation for integrity, honesty and adherence to high ethical standards.</FONT></P>
<P align=left><FONT face=sans-serif size=2>2. Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to the current and long-term objectives of the funds and should be willing and able to contribute positively to the decision-making process of the funds.</FONT></P>
<P align=left><FONT face=sans-serif size=2>3. Nominees should have a commitment to understand the funds, and the responsibilities of a trustee/director of an investment company and to regularly attend and participate in meetings of the Board and its committees.</FONT></P>
<P align=left><FONT face=sans-serif size=2>4. Nominees should have the ability to understand the sometimes conflicting interests of the various constituencies of the funds, including shareholders and the management company, and to act in the interests of all shareholders.</FONT></P>
<P align=left><FONT face=sans-serif size=2>5. Nominees should not have, nor appear to have, a conflict of interest that would impair their ability to represent the interests of all the shareholders and to fulfill the responsibilities of a director/trustee.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Application of Criteria to Existing Trustees</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>The renomination of existing Trustees should not be viewed as automatic, but should be based on continuing qualification under the criteria set forth above. In addition, the Nominating, Governance and Administration Committee (the &#147;Committee&#148;) shall consider the existing Trustee&#146;s performance on the Board and any committee.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Review of Shareholder Nominations</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>Any shareholder nomination must be submitted in compliance with all of the pertinent provisions of Rule 14a-8 under the Securities Exchange Act of 1934 in order to be considered by the Committee. In evaluating a nominee recommended by a shareholder, the Committee, in addition to the criteria discussed above, may consider the objectives of the shareholder in submitting that nomination and whether such objectives are consistent with the interests of all shareholders. If the Board determines to include a shareholder&#146;s candidate among the slate of its designated nominees, the candidate&#146;s name will be placed on the funds&#146; proxy card. If the Board determines not to include such candidate among its designated nominees, and the shareholder has satisfied the requirements of Rule 14a-8, the shareholder&#146;s candidate will be</FONT></P>
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<P align=left><FONT face=sans-serif size=2>treated as a nominee of the shareholder who originally nominated the candidate. In that case, the candidate will not be named on the proxy card distributed with the funds&#146; proxy statement.</FONT></P>
<P align=left><FONT face=sans-serif size=2>As long as an existing Independent Trustee continues, in the opinion of the Committee, to satisfy the criteria listed above, the Committee generally would favor the re-nomination of an existing Trustee rather than a new candidate. Consequently, while the Committee will consider nominees recommended by shareholders to serve as trustees, the Committee may only act upon such recommendations if there is a vacancy on the Board, or the Committee determines that the selection of a new or additional Trustee is in the best interests of the fund. In the event that a vacancy arises or a change in Board membership is determined to be advisable, the Committee will, in addition to any shareholder recommendations, consider candidates identified by other means, including candidates proposed by members of the Committee. The Committee may retain a consultant to assist the Committee in a search for a qualified candidate.</FONT></P>
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     <TD align=center><B><FONT size=2 face=sans-serif>JOHN HANCOCK FUNDS</FONT></B></TD></TR>
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     <TD noWrap align=center><B><FONT size=2 face=sans-serif>PROXY VOTING POLICIES AND PROCEDURES</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>POLICY:</FONT></B></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>General</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The Board of Trustees (the &#147;Board&#148;) of each registered investment company in the John Hancock family of funds listed on Schedule A (collectively, the &#147;Trust&#148;), including a majority of the Trustees who are not &#147;interested persons&#148; (as defined in the Investment Company Act of 1940, as amended (the &#147;1940 Act&#148;)) of the Trust (the &#147;Independent Trustees&#148;), adopts these proxy voting policies and procedures.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Each fund of the Trust or any other registered investment company (or series thereof) (each, a &#147;fund&#148;) is required to disclose its proxy voting policies and procedures in its registration statement and, pursuant to Rule 30b1-4 under the 1940 Act, file annually with the Securities and Exchange Commission and make available to shareholders its actual proxy voting record. In this regard, the Trust Policy is set forth below.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Delegation of Proxy Voting Responsibilities</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>It is the policy of the Trust to delegate the responsibility for voting proxies relating to portfolio securities held by a fund to the fund&#146;s investment adviser (&#147;adviser&#148;) or, if the fund&#146;s adviser has delegated portfolio management responsibilities to one or more investment subadviser(s), to the fund&#146;s subadviser(s), subject to the Board&#146;s continued oversight. The subadviser for each fund shall vote all proxies relating to securities held by each fund and in that connection, and subject to any further policies and procedures contained herein, shall use proxy voting policies and procedures adopted by each subadviser in conformance with Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended (the &#147;Advisers Act&#148;).</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Except as noted below under Material Conflicts of Interest, the Trust Policy with respect to a fund shall incorporate that adopted by the fund&#146;s subadviser with respect to voting proxies held by its clients (the &#147;Subadviser Policy&#148;). Each Subadviser Policy, as it may be amended from time to time, is hereby incorporated by reference into the Trust Policy. Each subadviser to a fund is directed to comply with these policies and procedures in voting proxies relating to portfolio securities held by a fund, subject to oversight by the fund&#146;s adviser and by the Board. Each adviser to a fund retains the responsibility, and is directed, to oversee each subadviser&#146;s compliance with these policies and procedures, and to adopt and implement such additional policies and procedures as it deems necessary or appropriate to discharge its oversight responsibility. Additionally, the Trust&#146;s Chief Compliance Officer (&#147;CCO&#148;) shall co
nduct such monitoring and supervisory activities as the CCO or the Board deems necessary or appropriate in order to appropriately discharge the CCO&#146;s role in overseeing the subadvisers&#146; compliance with these policies and procedures.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The delegation by the Board of the authority to vote proxies relating to portfolio securities of the funds is entirely voluntary and may be revoked by the Board, in whole or in part, at any time.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Voting Proxies of Underlying Funds of a Fund of Funds</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>A. </FONT><U><FONT size=2 face=sans-serif>Where the Fund of Funds is not the Sole Shareholder of the Underlying Fund</FONT></U></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>With respect to voting proxies relating to the shares of an underlying fund (an &#147;Underlying Fund&#148;) held by a fund of the Trust operating as a fund of funds (a &#147;Fund of Funds&#148;) in reliance on Section 12(d)(1)(G) of the 1940 Act where the Underlying Fund has shareholders other than the Fund of Funds which are not other Fund of Funds, the Fund of Funds will vote proxies relating to shares of the Underlying Fund in the same proportion as the vote of all other holders of such Underlying Fund shares.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>B. </FONT><U><FONT size=2 face=sans-serif>Where the Fund of Funds is the Sole Shareholder of the Underlying Fund</FONT></U></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>In the event that one or more Funds of Funds are the sole shareholders of an Underlying Fund, the adviser to the Fund of Funds or the Trust will vote proxies relating to the shares of the Underlying Fund as set forth below unless</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>the Board elects to have the Fund of Funds seek voting instructions from the shareholders of the Funds of Funds in which case the Fund of Funds will vote proxies relating to shares of the Underlying Fund in the same proportion as the instructions timely received from such shareholders.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>1. </FONT><U><FONT size=2 face=sans-serif>Where Both the Underlying Fund and the Fund of Funds are Voting on Substantially Identical Proposals</FONT></U></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>In the event that the Underlying Fund and the Fund of Funds are voting on substantially identical proposals (the &#147;Substantially Identical Proposal&#148;), then the adviser or the Fund of Funds will vote proxies relating to shares of the Underlying Fund in the same proportion as the vote of the shareholders of the Fund of Funds on the Substantially Identical Proposal.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>2. </FONT><U><FONT size=2 face=sans-serif>Where the Underlying Fund is Voting on a Proposal that is Not Being Voted on By the Fund of Funds</FONT></U></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>a. </FONT><U><FONT size=2 face=sans-serif>Where there is No Material Conflict of Interest Between the Interests of the Shareholders of the Underlying Fund and the Adviser Relating to the Proposal</FONT></U></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>In the event that the Fund of Funds is voting on a proposal of the Underlying Fund and the Fund of Funds is not also voting on a substantially identical proposal and there is no material conflict of interest between the interests of the shareholders of the Underlying Fund and the adviser relating to the Proposal, then the adviser will vote proxies relating to the shares of the Underlying Fund pursuant to its Proxy Voting Procedures.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>b. </FONT><U><FONT size=2 face=sans-serif>Where there is a Material Conflict of Interest Between the Interests of the Shareholders of the Underlying Fund and the Adviser Relating to the Proposal</FONT></U></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>In the event that the Fund of Funds is voting on a proposal of the Underlying Fund and the Fund of Funds is not also voting on a substantially identical proposal and there is a material conflict of interest between the interests of the shareholders of the Underlying Fund and the adviser relating to the Proposal, then the Fund of Funds will seek voting instructions from the shareholders of the Fund of Funds on the proposal and will vote proxies relating to shares of the Underlying Fund in the same proportion as the instructions timely received from such shareholders. A material conflict is generally defined as a proposal involving a matter in which the adviser or one of its affiliates has a material economic interest.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Material Conflicts of Interest</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>If: (1) a subadviser to a fund becomes aware that a vote presents a material conflict between the interests of: (a) shareholders of the fund; and (b) the fund&#146;s adviser, subadviser, principal underwriter, or any of their affiliated persons, and (2) the subadviser does not propose to vote on the particular issue in the manner prescribed by its Subadviser Policy or the material conflict of interest procedures set forth in its Subadviser Policy are otherwise triggered, then the subadviser will follow the material conflict of interest procedures set forth in its Subadviser Policy when voting such proxies.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>If a Subadviser Policy provides that in the case of a material conflict of interest between fund shareholders and another party, the subadviser will ask the Board to provide voting instructions, the subadviser shall vote the proxies, in its discretion, as recommended by an independent third party, in the manner prescribed by its Subadviser Policy or abstain from voting the proxies.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Securities Lending Program</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Certain of the funds participate in a securities lending program with the Trust through an agent lender. When a fund&#146;s securities are out on loan, they are transferred into the borrower&#146;s name and are voted by the borrower, in its discretion. Where a subadviser determines, however, that a proxy vote (or other shareholder action) is materially important to the client&#146;s account, the subadviser should request that the agent recall the security prior to the record date to allow the subadviser to vote the securities.</FONT></P>
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<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Disclosure of Proxy Voting Policies and Procedures in the Trust&#146;s Statement of Additional Information (&#147;SAI&#148;)</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The Trust shall include in its SAI a summary of the Trust Policy and of the Subadviser Policy included therein. (In lieu of including a summary of these policies and procedures, the Trust may include each full Trust Policy and Subadviser Policy in the SAI.)</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Disclosure of Proxy Voting Policies and Procedures in Annual and Semi-Annual Shareholder Reports</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The Trust shall disclose in its annual and semi-annual shareholder reports that a description of the Trust Policy, including the Subadviser Policy, and the Trust&#146;s proxy voting record for the most recent 12 months ended June 30 are available on the Securities and Exchange Commission&#146;s (&#147;SEC&#148;) website, and without charge, upon request, by calling a specified toll-free telephone number. The Trust will send these documents within three business days of receipt of a request, by first-class mail or other means designed to ensure equally prompt delivery.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Filing of Proxy Voting Record on Form N-PX</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The Trust will annually file its complete proxy voting record with the SEC on Form N-PX. The Form N-PX shall be filed for the twelve months ended June 30 no later than August 31 of that year.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>PROCEDURES:</FONT></B></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Review of Subadvisers&#146; Proxy Voting</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The Trust has delegated proxy voting authority with respect to fund portfolio securities in accordance with the Trust Policy, as set forth above.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>Consistent with this delegation, each subadviser is responsible for the following:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>1) Implementing written policies and procedures, in compliance with Rule 206(4)-6 under the Advisers Act, reasonably designed to ensure that the subadviser votes portfolio securities in the best interest of shareholders of the Trust.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>2) Providing the adviser with a copy and description of the Subadviser Policy prior to being approved by the Board as a subadviser, accompanied by a certification that represents that the Subadviser Policy has been adopted in conformance with Rule 206(4)-6 under the Advisers Act. Thereafter, providing the adviser with notice of any amendment or revision to that Subadviser Policy or with a description thereof. The adviser is required to report all material changes to a Subadviser Policy quarterly to the Board. The CCO&#146;s annual written compliance report to the Board will contain a summary of the material changes to each Subadviser Policy during the period covered by the report.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>3) Providing the adviser with a quarterly certification indicating that the subadviser did vote proxies of the funds and that the proxy votes were executed in a manner consistent with the Subadviser Policy. If the subadviser voted any proxies in a manner inconsistent with the Subadviser Policy, the subadviser will provide the adviser with a report detailing the exceptions.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Adviser Responsibilities</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The Trust has retained a proxy voting service to coordinate, collect, and maintain all proxy-related information, and to prepare and file the Trust&#146;s reports on Form N-PX with the SEC.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The adviser, in accordance with its general oversight responsibilities, will periodically review the voting records maintained by the proxy voting service in accordance with the following procedures:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>1) Receive a file with the proxy voting information directly from each subadviser on a quarterly basis.</FONT></P>
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<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>2) Select a sample of proxy votes from the files submitted by the subadvisers and compare them against the proxy voting service files for accuracy of the votes.</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>3) Deliver instructions to shareholders on how to access proxy voting information via the Trust&#146;s semi-annual and annual shareholder reports.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Proxy Voting Service Responsibilities</FONT></B></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Aggregation of Votes:</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The proxy voting service</FONT><FONT size=2 face=sans-serif>&#146;s proxy disclosure system will collect fund-specific and/or account-level voting records, including votes cast by multiple subadvisers or third party voting services.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Reporting:</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The proxy voting service</FONT><FONT size=2 face=sans-serif>&#146;s proxy disclosure system will provide the following reporting features:</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>1) multiple report export options;</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>2) report customization by fund-account, portfolio manager, security, etc.; and</FONT></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>3) account details available for vote auditing.</FONT></P>
<P style="TEXT-ALIGN: left"><B><FONT size=2 face=sans-serif>Form N-PX Preparation and Filing:</FONT></B></P>
<P style="TEXT-ALIGN: left"><FONT size=2 face=sans-serif>The adviser will be responsible for oversight and completion of the filing of the Trust&#146;s reports on Form N-PX with the SEC. The proxy voting service </FONT><FONT size=2 face=sans-serif>will prepare the EDGAR version of Form N-PX and will submit it to the adviser for review and approval prior to filing with the SEC</FONT><FONT size=2 face=sans-serif>. The proxy voting service will file Form N-PX for each twelvemonth period ending on June 30. The filing must be submitted to the SEC on or before August 31 of each year.</FONT></P>
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     <TD align=center><B><FONT size=2 face=sans-serif>Schedule A</FONT></B></TD></TR>
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     <TD noWrap align=center><B><FONT size=2 face=sans-serif>PROXY VOTING POLICIES AND PROCEDURES</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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     <TD style="TEXT-INDENT: 0px" noWrap align=left><B><FONT size=2 face=sans-serif>JOHN HANCOCK FUNDS:</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=2 face=sans-serif>Adopted:</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT size=2 face=sans-serif>Amended:</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 28, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>March 26, 2008; June 27,</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Funds II</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 28, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>March 26, 2008; June 27,</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Funds III</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Bond Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock California Tax-Free Income Fund</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Capital Series</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Current Interest</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Equity Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Investment Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Investment Trust II</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Investment Trust III</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Municipal Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Series Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Sovereign Bond Fund</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Strategic Series</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Tax-Exempt Series</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock World Fund</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Preferred Income Fund</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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<HR SIZE=1 noShade>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Preferred Income Fund II</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Preferred Income Fund III</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Patriot Premium Dividend Fund II</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Bank &amp; Thrift Opportunity Fund</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Investors Trust</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT size=2 face=sans-serif>John Hancock Tax-Advantaged Dividend Income Fund</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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     <TD colSpan=3>
<HR SIZE=1 noShade>
</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 0px" noWrap align=left><FONT size=2 face=sans-serif>John Hancock Tax-Advantaged Global Shareholder Yield Fund</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>September 11, 2007</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT size=2 face=sans-serif>June 10, 2008</FONT>&nbsp;</TD></TR>
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<HR SIZE=1 noShade>
</TD></TR></TABLE><BR>
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     <TD noWrap align=center><FONT face=sans-serif>5</FONT>&nbsp;</TD></TR></TABLE><BR>
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
