THORNBURG Rule 497(k)(1)(i)
LIMITED TERM
MUNICIPAL
FUND-NATIONAL
PORTFOLIO
<logo>
Fund Profile
February ___, 1999
This Profile summarizes key information about the Fund that is included in
the Fund's prospectus. The Fund's prospectus includes additional
information about the Fund, including a more detailed description of the
risks associated with investing in the Fund that you may want to consider
before you invest. You may obtain the prospectus and other information
about the Fund at no cost by calling 800-847-0200.
<PAGE>
1. Investment Goal
The Fund's primary goal is providing as high a level of current income
exempt from federal income tax as is consistent, in the view of the Fund's
investment adviser, with preservation of capital. Its secondary goal is to
reduce expected fluctuations in its share price relative to longer
intermediate and long-term bond portfolios.
No assurance can be given that these goals will be achieved.
2. Principal Investment Strategy of the Fund
The Fund pursues its primary goal by investing in investment grade or
equivalent obligations which are issued by states and state agencies and
local governments and their agencies and by United States territories and
possessions. The Fund seeks its secondary goal of reducing share price
fluctuations by maintaining a dollar-weighted average portfolio maturity
normally five years or less.
3. Principal Risks
The value of Fund shares and its dividends will fluctuate in response to
changes in interest rates. The value of fund shares could be reduced if
municipal obligations held by the Fund were downgraded by rating agencies,
or went into default, or if legislation reduces the ability of issuers to
pay principal and interest when due or changes the tax treatment of
interest on municipal obligations. The loss of money is a risk of
investing in the Fund, and when you sell your shares they may be worth more
or less than what you paid for them.
Prospective investors should consider how the Fund's investment returns may
vary each year, and the Fund's share value may go down in some periods.
The following bar chart shows how the Fund's annual total returns for Class
A shares have been different in each full year since it began operations.
The accompanying average annual total return figures compare the
performance of Class A and Class C shares to the Lehman 5-year General
Obligation Bond Index. This information gives some indication of the risks
of investing in the Fund by showing changes in performance from year to
year and by showing how the Fund's average annual total returns for the
periods shown compare with a broad measure of market performance.
<The following is presented as a bar graph in the Profile>
Limited Term National Fund Annual Total Returns Class A Shares
- --------------------------------------------------------------
15%
12.72%
11.01%
10% 9.97%
8.81% 8.61%
7.74% 7.79%7.89%
6.48%
5% 5.47% 4.15%
3.97%
0%
(1.48)%
- -5%
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
The year-to-date return for the quarter ending September 30, 1998 was
4.05%. During the 13-year period shown in the bar chart, the highest
return for a quarter was 4.46% (quarter ending December 31, 1985), and the
lowest return for a quarter was (2.10)% (quarter ending March 31, 1994).
The Fund commenced operations on September 28, 1984.
Limited Term National Fund Average Annual Total Returns
Class A and Class C Shares
- --------------------------------------------------------
One Year Five Years Ten Years
Ended Ended Ended
12-31-97 12-31-97 12-31-97
-------- --------- ---------
Class A Shares 2.87% 4.78% 6.21%
Class C Shares 4.54% N/A N/A
Lehman Five-Year 6.48% 5.89% 6.94%
General Obligation
Bond Index
The sales charge for Class A shares was not reflected in the returns shown
in the bar chart, and the returns would be less if the sales charge was
taken into account. The figures shown in the average annual total return
table do reflect maximum sales charges imposed, assuming a redemption at
the end of each period shown. The Fund's performance in the past is not
necessarily an indication of how the Fund will perform in the future.
4. Fees and Expenses of the Fund
The following tables describe the fees and expenses that you may pay if you
buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
- ----------------
Limited Term National Fund Class A Class C
------- -------
Maximum Sales Charge (Load) imposed on 2.50% none
purchases (as a percentage of offering price)
Maximum Deferred Sales Charge (Load) (as a 0.50%* 0.50%**
percentage of the lesser of redemption proceeds
or original offering price)
* imposed only on redemptions of purchases greater than $1 million in
the event of a redemption within 12 months of purchase
** imposed only on redemptions of Class C shares within 12 months
of purchase
Annual Fund Operating Expenses (expenses that are deducted
- ------------------------------ from Fund assets)
Limited Term National Fund Class A Class C
Management Fee .45% .45%
Distribution and Service (12b-1) Fees .25% 1.00%
Other Expenses .27% .38%
---- -----
Total Annual Operating Expenses .97% 1.83%
Thornburg Management Company, Inc. (TMC) intends to reimburse a portion of
the Class C other expenses, and TMC and Thornburg Securities Corporation
intend to waive a portion of the Class C 12b-1 fees so that actual Class C
12b-1 fees are .63%, actual Class C other expenses are .30% and so that
actual total Fund operating expenses are 1.38% for Class C shares. TMC's
reimbursement of expenses, and TMC's and TSC's waiver of fees may be
terminated at any time.
Example. This Example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated and redeem all of your shares at the end of these
periods. The Example also assumes that your investment has a 5% return
each year and that the Fund's operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions your
costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A Shares $347 $553 $776 $1,421
Class C Shares $238 $581 $1,001 $2,175
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A Shares $347 $553 $776 $1,421
Class C Shares $188 $581 $1,002 $2,175
5. Investment Adviser and Portfolio Managers
The Fund's investment adviser is Thornburg Management Company, Inc. (TMC),
providing investment management and administrative services. Brian J.
McMahon and George Strickland, both of whom are managing directors of TMC,
are the portfolio managers for the Fund. Mr. McMahon has managed municipal
bond portfolios for TMC since 1984, and Mr. Strickland has performed
municipal bond credit analysis and management since joining TMC in 1991.
Mr. McMahon and Mr. Strickland are assisted by other employees of TMC in
managing the Fund's portfolio.
6. Purchase of Fund Shares
The Fund offers multiple classes of shares. Purchases of Class A and
Class C shares are described below.
Sales Charge
as a percentage as a percentage
Purchase Amount of Offering Price of Net Asset Value
- --------------- ----------------- ------------------
[S] [C] [C]
Less than $50,000 2.50% 2.56%
$50,000 to 99,999.99 2.25% 2.50%
$100,000 to 249,999.99 1.75% 1.78%
$250,000 to 499,999.99 1.50% 1.52%
$500,000 to 999,999.99 1.00% 1.01%
$1,000,000 and up 0.00% 0.00%
No sales charge will be payable at the time of purchase on investments of
$1 million or more made by a purchaser. A contingent deferred sales
charge will be imposed on these investments in the event of a share
redemption within 1 year following the share purchase at the rate of 1/2
of 1% of the value of the shares redeemed.
Shareholders who sign a letter of intent to purchase more than $50,000 over
13 months may buy Class A shares at a reduced sales charge. Certain
shareholders may buy Class A shares at no sales charges:
1. shareholders who purchase shares within 24 months of redeeming
Class A shares;
2. customers of trust companies or bank trust departments;
3. customers of fee for service financial advisers;
4. shareholders investing through a dealer's wrap program;
5. shareholders whose orders are placed through certain brokers
maintaining omnibus accounts.
Class C shares are sold at net asset value, but are subject to higher
annual expenses and a 1/2 of 1% contingent deferred sales charge if
redeemed within one year of purchase.
The minimum purchase to open an account is $5,000 but automatic investment
plans may be opened with $100. Minimum additional purchase for any account
is $100. Purchases may be made by mail, through your financial advisor or
by telephone.
7. Redeeming Fund Shares
You can withdraw money from your Fund account on any Fund business day by
redeeming some or all of your shares (selling them back to the Fund either
directly or through your financial advisor). Your shares will be purchased
by the Fund at the net asset value next computed after your order is
received in proper form. If your purchase was subject to a contingent
deferred sales charge within one year of purchase, the charge will be
deducted. You may redeem Fund shares by mail, through your financial
advisor, or by telephone. if you have previously signed up for the
telephone redemption feature.
8. Distributions
The Fund distributes substantially all of its net income and realized
capital gains to shareholders each year. The Fund declares its net
investment income daily and distributes it monthly. The Fund will
distribute any net realized capital gains at least annually. Distributions
are reinvested automatically in additional shares unless you elect to
receive them in cash. Income dividends attributable to tax exempt
municipal obligations owned by the Fund are exempt from federal personal
income tax, but some portion of these dividends could be subject to the
alternative minimum tax. Dividends attributable to market discount on
portfolio securities and distributions of net short-term capital gains are
taxable as ordinary income. Any distributions of long-term capital gains
are taxed as long-term capital gains. Income dividends may not be exempt
from state income taxes or taxes imposed on persons who are not
individuals.
9. Other Fund Services
* Thornburg Funds telephone representatives: Monday through Friday from
7:30 a.m. to 4:30 p.m. Mountain Time, at 1-800-847-0200.
* Thornburg Funds Audio Response System: 24 hours a day, 7 days a week.
Call 1-800-847-0200.
* The Automatic Investment Plan: transfer as little as $100 from your bank
account on a weekly, monthly or quarterly basis.
* Exchange Class A shares of any other Thornburg Fund for Class A
shares of the Fund without paying any additional sales charge.
* Website: Contact Thornburg on the Internet at www.Thornburg.com
Contact your financial advisor or the Fund for more information on these and
other services available to you.
Please call 1-800-847 or your financial adviser for an application to
purchase shares of the Fund. A copy of the Fund's prospectus will be sent
to you with the application.
<LOGO>
Thornburg Funds
Investing With Integrity
Thornburg Securities Corporation, Distributor
119 East Marcy Street, Santa Fe, New Mexico 87501
800-847-0200
www.thornburg.com e-mail: [email protected]
<PAGE>
THORNBURG Rule 497(k)(1)(i)
LIMITED TERM
MUNICIPAL
FUND-CALIFORNIA
PORTFOLIO
<logo>
Fund Profile
February ___, 1999
This Profile summarizes key information about the Fund that is included in
the Fund's prospectus. The Fund's prospectus includes additional
information about the Fund, including a more detailed description of the
risks associated with investing in the Fund that you may want to consider
before you invest. You may obtain the prospectus and other information
about the Fund at no cost by calling 800-847-0200.
<PAGE>
1. Investment Goal
The Fund's primary goal is providing as high a level of current income
exempt from federal income tax and California individual income taxes as is
consistent, in the view of the Fund's investment adviser, with preservation
of capital. Its secondary goal is to reduce expected fluctuations in its
share price relative to longer intermediate and long-term bond portfolios.
No assurance can be given that these goals will be achieved.
2. Principal Investment Strategy of the Fund
The Fund pursues its primary goal by investing in investment grade or
equivalent obligations which are issued by the State of California and its
agencies and California local governments and their agencies and by United
States territories and possessions. The Fund seeks its secondary goal of
reducing share price fluctuations by maintaining a dollar-weighted average
portfolio maturity normally five years or less.
3. Principal Risks
The value of Fund shares and its dividends will fluctuate in response to
changes in interest rates. The value of fund shares could be reduced if
municipal obligations held by the Fund were downgraded by rating agencies,
or went into default, or if legislation reduces the ability of issuers to
pay principal and interest when due or changes the tax treatment of
interest on municipal obligations. The loss of money is a risk of
investing in the Fund, and when you sell your shares they may be worth more
or less than what you paid for them.
The Fund is a nondiversified investment company. This means that it may
invest a greater proportion of its assets in the securities of a single
issuer. This may be riskier, because a default or other adverse condition
affecting an issuer in which the Fund invested a high proportion of its
assets could cause the Fund's share price to decline to a greater degree
than if its assets were more diversified. The Fund's policy of investing
primarily in municipal securities originating in California also subjects
the Fund to greater risk than a mutual fund which invests in municipal
securities from a number of states.
Prospective investors should consider how the Fund's investment returns may
vary each year, and the Fund's share value may go down in some periods.
The following bar chart shows how the Fund's annual total returns for Class
A shares have been different in each full year since it began operations.
The accompanying average annual total return figures compare the
performance of Class A and Class C shares to the Lehman 5-year General
Obligation Bond Index. This information gives some indication of the risks
of investing in the Fund by showing changes in performance from year to
year and by showing how the Fund's average annual total returns for the
periods shown compare with a broad measure of market performance.
<The following is presented as a bar graph in the Profile>
Limited Term California Fund Annual Total Returns Class A Shares
- --------------------------------------------------------------
15%
10% 10.27%
8.21%
7.53% 7.52% 7.52% 7.77%
5% 5.84% 6.77%
4.81%
0%
(2.13)%
- -5%
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
The year-to-date return for the nine months ending September 30, 1998 was
4.39%. During the ten-year period shown in the bar chart, the highest
return for a quarter was 3.77% (quarter ending March 31, 1995), and the
lowest return for a quarter was (2.08)% (quarter ending March 31, 1994).
The Fund commenced operations on February 19, 1987.
Limited Term National Fund Average Annual Total Returns
Class A and Class C Shares
- --------------------------------------------------------
One Year Five Years Ten Years
Ended Ended Ended
12-31-97 12-31-97 12-31-97
-------- --------- ---------
Class A Shares 3.17% 4.68% 6.04%
Class C Shares 5.00% N/A N/A
Lehman Five-Year 6.48% 5.89% 6.94%
General Obligation
Bond Index
The sales charge for Class A shares was not reflected in the returns shown
in the bar chart, and the returns would be less if the sales charge was
taken into account. The figures shown in the average annual total return
table do reflect maximum sales charges imposed, assuming a redemption at
the end of each period shown. The Fund's performance in the past is not
necessarily an indication of how the Fund will perform in the future.
4. Fees and Expenses of the Fund
The following tables describe the fees and expenses that you may pay if you
buy and hold shares of the Fund.
Shareholder Fees (fees paid directly from your investment)
- ----------------
Limited Term National Fund Class A Class C
------- -------
Maximum Sales Charge (Load) imposed on 2.50% none
purchases (as a percentage of offering price)
Maximum Deferred Sales Charge (Load) (as a 0.50%* 0.50%**
percentage of the lesser of redemption proceeds
or original offering price)
* imposed only on redemptions of purchases greater than $1 million in
the event of a redemption within 12 months of purchase
** imposed only on redemptions of Class C shares within 12 months
of purchase
Annual Fund Operating Expenses (expenses that are deducted
- ------------------------------ from Fund assets)
Limited Term California Fund Class A Class C
Management Fee .50% .50%
Distribution and Service (12b-1) Fees .25% 1.00%
Other Expenses .29% .47%
---- -----
Total Annual Operating Expenses 1.04% 1.97%
Expenses reflect rounding. Thornburg Management Company, Inc. (TMC)
intends to reimburse a portion of the Class A other expenses, so that
actual Class A other expenses are .25%, and actual total fund operating
expenses are 1.00%. TMC and Thornburg Securities Corporation (TSC) intend
to waive a portion of the Class C 12b-1 fees, and TMC intends to reimburse
a portion of the Class C other expenses, so that actual Class C 12b-1
expenses are .63%, actual Class C other expenses are .27%, and actual total
fund operating expenses for Class C are 1.40%. TMC's and TSC's waiver of
fees and TMC's reimbursement of expenses may be terminated at any time.
Example. This Example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated and redeem all of your shares at the end of these
periods. The Example also assumes that your investment has a 5% return
each year and that the Fund's operating expenses remain the same. Although
your actual costs may be higher or lower, based on these assumptions your
costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A Shares $354 $575 $814 $1,501
Class C Shares $252 $625 $1,075 $2,326
You would pay the following expenses if you did not redeem your shares:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A Shares $354 $575 $814 $1,501
Class C Shares $202 $625 $1,075 $2,326
5. Investment Adviser and Portfolio Managers
The Fund's investment adviser is Thornburg Management Company, Inc. (TMC),
providing investment management and administrative services. Brian J.
McMahon and George Strickland, both of whom are managing directors of TMC,
are the portfolio managers for the Fund. Mr. McMahon has managed municipal
bond portfolios for TMC since 1984, and Mr. Strickland has performed
municipal bond credit analysis and management since joining TMC in 1991.
Mr. McMahon and Mr. Strickland are assisted by other employees of TMC in
managing the Fund's portfolio.
6. Purchase of Fund Shares
The Fund offers multiple classes of shares. Purchases of Class A and
Class C shares are described below.
Sales Charge
as a percentage as a percentage
Purchase Amount of Offering Price of Net Asset Value
- --------------- ----------------- ------------------
[S] [C] [C]
Less than $50,000 2.50% 2.56%
$50,000 to 99,999.99 2.25% 2.50%
$100,000 to 249,999.99 1.75% 1.78%
$250,000 to 499,999.99 1.50% 1.52%
$500,000 to 999,999.99 1.00% 1.01%
$1,000,000 and up 0.00% 0.00%
No sales charge will be payable at the time of purchase on investments of
$1 million or more made by a purchaser. A contingent deferred sales
charge will be imposed on these investments in the event of a share
redemption within 1 year following the share purchase at the rate of 1/2
of 1% of the value of the shares redeemed.
Shareholders who sign a letter of intent to purchase more than $50,000 over
13 months may buy Class A shares at a reduced sales charge. Certain
shareholders may buy Class A shares at no sales charges:
1. shareholders who purchase shares within 24 months of redeeming
Class A shares;
2. customers of trust companies or bank trust departments;
3. customers of fee for service financial advisers;
4. shareholders investing through a dealer's wrap program;
5. shareholders whose orders are placed through certain brokers
maintaining omnibus accounts.
Class C shares are sold at net asset value, but are subject to higher
annual expenses and a 1/2 of 1% contingent deferred sales charge if
redeemed within one year of purchase.
The minimum purchase to open an account is $5,000 but automatic investment
plans may be opened with $100. Minimum additional purchase for any account
is $100. Purchases may be made by mail, through your financial advisor or
by telephone.
7. Redeeming Fund Shares
You can withdraw money from your Fund account on any Fund business day by
redeeming some or all of your shares (selling them back to the Fund either
directly or through your financial advisor). Your shares will be purchased
by the Fund at the net asset value next computed after your order is
received in proper form. If your purchase was subject to a contingent
deferred sales charge within one year of purchase, the charge will be
deducted. You may redeem Fund shares by mail, through your financial
advisor, or by telephone. if you have previously signed up for the
telephone redemption feature.
8. Distributions
The Fund distributes substantially all of its net income and realized
capital gains to shareholders each year. The Fund declares its net
investment income daily and distributes it monthly. The Fund will
distribute any net realized capital gains at least annually. Distributions
are reinvested automatically in additional shares unless you elect to
receive them in cash. Income dividends attributable to tax exempt
municipal obligations owned by the Fund are exempt from federal personal
income tax, but some portion of these dividends could be subject to the
alternative minimum tax. Dividends attributable to market discount on
portfolio securities and distributions of net short-term capital gains are
taxable as ordinary income. Any distributions of long-term capital gains
are taxed as long-term capital gains. Income dividends attributable to
municipal obligations originating in California are not subject to the
California state individual income tax.
9. Other Fund Services
* Thornburg Funds telephone representatives: Monday through Friday from
7:30 a.m. to 4:30 p.m. Mountain Time, at 1-800-847-0200.
* Thornburg Funds Audio Response System: 24 hours a day, 7 days a week.
Call 1-800-847-0200.
* The Automatic Investment Plan: transfer as little as $100 from your bank
account on a weekly, monthly or quarterly basis.
* Exchange Class A shares of any other Thornburg Fund for Class A
shares of the Fund without paying any additional sales charge.
* Website: Contact Thornburg on the Internet at www.Thornburg.com
Contact your financial advisor or the Fund for more information on these and
other services available to you.
Please call 1-800-847 or your financial adviser for an application to
purchase shares of the Fund. A copy of the Fund's prospectus will be sent
to you with the application.
<LOGO>
Thornburg Funds
Investing With Integrity
Thornburg Securities Corporation, Distributor
119 East Marcy Street, Santa Fe, New Mexico 87501
800-847-0200
www.thornburg.com e-mail: [email protected]
