The 'Annualized Expense Ratio' represents the actual expenses for the six-month period indicated. Please note that the expenses shown in the tables are meant to highlight and help you compare ongoing costs only and do not reflect any transactional costs, if applicable. You can assess your fund's cost by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds. The example is useful in making comparisons because the SEC requires all mutual funds to calculate expenses based on a 5% annual return. In this case, because the return used is not the fund's actual return, the results do not apply to your investment. The hypothetical 'Ending Account Value' and 'Expenses Paid During the Period' are derived from the fund's actual expense ratio and an assumed 5% annual return before expenses. This section is intended to help you compare your fund's costs with those of other mutual funds. Hypothetical Example for Comparison Purposes To do so, simply divide your account value by $1,000 (for example, a $7,500 account value divided by $1,000 = 7.5), then multiply the result by the number given for your fund under the heading 'Expenses Paid During Period.' You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. The 'Ending Account Value' shown is derived from the fund's actual return and 'Expenses Paid During Period' reflect the dollar amount that would have been paid by an investor who started with $1,000 in the fund. This section helps you to estimate the actual expenses after fee waivers that you paid over the period. The Expense Tables below illustrate your fund's costs in two ways. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. The following examples are intended to help you understand the ongoing costs, in dollars, of investing in the fund and to compare these costs with those of other mutual funds. This figure is known as the expense ratio. A fund's expenses are expressed as a percentage of its average net assets. Operating expenses, legal and audit services, which are deducted from a fund's gross income, directly reduce the investment return of the fund. As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports, among others. All mutual funds have operating expenses.

The following Expense Tables are shown so that you can understand the impact of fees on your investment. В— Amounts are either zero or rounded to zero. (A) Computed using average shares outstanding. (f) Face Amount Denominated in Swiss Francs. (s) Face Amount Denominated in Swedish Krona. (j) Face Amount Denominated in Japanese Yen. (d) Face Amount Denominated in Denmark Krone. (c) Face Amount Denominated in Canadian Dollars.

(r) The adjustable rate shown is effective as of May 31, 2006. ^ Denominated in local currency or the Euro, unless otherwise Security purchased with cash proceeds from Securities on Loan. TIPS Treasury Inflation-Protected Securities It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus.ДEFINITIONS OF ABBREVIATIONS AND FOOTNOTESДЇNMA Federal National Mortgage AssociationДЇHLMC Federal Home Loan Mortgage Corporation

This report is submitted for the information of the funds' shareholders. Voting Proxies on Fund Portfolio SecuritiesД«oard Approval of Investment Advisory Agreements Definitions of Abbreviations and Footnotes

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