THORNBURG FUNDS
Thornburg Municipal Funds and Thornburg Limited Term Income Funds
Supplements to the Prospectuses dated February 1, 1996
Dated February 1, 1996
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The following text is added to page 55 of the THORNBURG LIMITED TERM INCOME
FUNDS prospectus, relating to sales charge waivers for certain persons buying
Class A shares:
Charitable organizations or foundations, including trusts
established for the benefit of charitable organizations or
foundations, may purchase shares of the Funds at no sales charge.
TMC or TSC intend to pay a commission of up to 1/2 of 1% to financial
advisers who place orders for these purchasers.
Certain employee benefit plans and insurance company separate
accounts used to fund annuity contracts may purchase shares of the
Funds at no sales charge. TMC or TSC intend to pay a commission of
up to 1/2 of 1% to financial advisers who place orders for these
plans.
Thornburg New Mexico Intermediate Municipal Fund has discontinued its
offering of Class C shares effective January 31, 1996.
Dated April 30, 1996
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Thornburg Florida Intermediate Municipal Fund has discontinued its offering
of Class C shares effective April 30, 1996.
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Dated July 1, 1996
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The following supplements and amends the section entitled "ANNUAL OPERATING
EXPENSES" on pages 10 and 11 of the THORNBURG MUNICIPAL FUNDS prospectus:
ANNUAL OPERATING EXPENSES
(as a percentage of average Examples
net assets) Assuming each Fund's expense
percentage remains the same,
an investor making a $1,000
investment will pay the
following cumulative expenses,
assuming a 5% annual return.
Limited Term National Fund
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Class Class Class Class Class
A C A C C*
----- ----- ----- ----- -----
Management Fees .45% .45% After 1 year $ 35 $ 14 $ 19
After 3 years $ 55 $ 44 $ 44
12b-1 Fees (after .25% .50% After 5 years $ 77 $ 76 $ 76
fee waivers for After 10 years $140 $167 $167
Class C)(a)
Other Expenses .27% .42%
(after assumption of ----- -----
expenses for
Class C)(a)
Total Fund Operating .97% 1.37%
Expenses
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Limited Term California Fund
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Class Class Class Class Class
A C A C C*
----- ----- ----- ----- -----
Management Fees .50% .50% After 1 year $ 35 $ 14 $ 19
After 3 years $ 56 $ 44 $ 44
12b-1 Fees (after .25% .50% After 5 years $ 79 $ 76 $ 76
fee waivers for After 10 years $144 $167 $167
Class C)(a)
Other Expenses .27% .37%
(after assumption of ----- -----
expenses for
Class C)(a)
Total Fund Operating 1.00% 1.37%
Expenses
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Intermediate National Fund
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Class Class Class Class Class
A C A C C*
----- ----- ----- ----- -----
Management Fees .50% .50% After 1 year $ 45 $ 14 $ 20
After 3 years $ 66 $ 43 $ 43
12b-1 Fees (after .25% .60% After 5 years $ 88 $ 75 $ 75
fee waivers for After 10 years $153 $164 $164
Class C)(a)
Other Expenses .25% .25%
(after assumption of ----- -----
expenses for
Class C)(a)
Total Fund Operating 1.00% 1.35%
Expenses
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Intermediate New Mexico Fund
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Class Class
A A
----- -----
Management Fees .50% After 1 year $ 45
After 3 years $ 66
12b-1 Fees .25% After 5 years $ 88
After 10 years $153
Other Expenses .25%
-----
Total Fund Operating 1.00%
Expenses (d)
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Intermediate Florida Fund
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Class Class
A A
----- -----
Management Fees .50% After 1 year $ 45
After 3 years $ 66
12b-1 Fees .25% After 5 years $ 88
After 10 years $153
Other Expenses .25%
(after assumption of -----
expenses for
Class A)(a)
Total Fund Operating 1.00%
Expenses
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* Assumes redemption at end of period.
(a) Expenses reflect rounding, and have been restated to reflect current
fees. Amounts shown for Class C shares of the Limited Term National
Fund are based upon waiver of a portion of the Class C 12b-1 fee and
assumption of certain Class C operating expenses by TMC. Absent the
waivers and assumption of expenses, the Class C 12b-1 fees and operating
expenses would have been 1.00% and .68%, respectively, and the total
Fund operating expenses would have been 2.13% for Class C shares.
(b) Expenses reflect rounding, and have been restated to reflect current
fees. Amounts shown for Class A of the Limited Term California Fund
are based upon assumption of certain Fund operating expenses by TMC.
Had TMC not undertaken such action, the Fund operating expenses would
have been .29%, and the total Fund operating expenses would have been
1.04%. Amounts shown for Class C of the Limited Term California Fund
are based upon a waiver of a portion of the Class C 12b-1 fees and
assumption of certain Class C operating expenses by TMC. Absent the
waivers and assumption of expenses, the Class C 12b-1 fees and
operating expenses would have been 1.00% and 1.59%, respectively, and
total Fund operating expenses would have been 3.09%.
(c) Expenses reflect rounding and have been restated to reflect current
fees. Amounts shown for Class C shares of the Intermediate National
Fund are based upon a partial waiver of the Class C 12b-1 fees.
Absent the waiver, the Class C 12b-1 fees would be 1.00% and the total
Fund operating expenses for Class C would have been 1.75%.
(d) Expenses reflect rounding and have been restated to reflect current
fees.
(e) Expenses reflect rounding and have been restated to reflect current
fees. Amounts shown for Class A of the Intermediate Florida Fund are
based upon an assumption of expenses by TMC. Absent the assumption,
other expenses would have been .69% and total Fund operating expenses
would have been 1.44%.
The following supplements and amends the section entitled "SERVICE AND
DISTRIBUTION PLANS: Service Plans - Both Classes" on page 29 of the
THORNBURG MUNICIPAL FUNDS prospectus:
Effective on July 1, 1996, the Service Plans applicable to the
Limited Term Municipal Funds permit each of these Funds to
reimburse TMC for the described payments at an annual rate up to
.25% of each class's net assets.
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The following supplements and amends the section entitled "ANNUAL OPERATING
EXPENSES" on page 42 of the THORNBURG LIMITED TERM INCOME FUNDS prospectus:
ANNUAL OPERATING EXPENSES
(as a percentage of average Examples
net assets) Assuming each Fund's expense
percentage remains the same,
an investor making a $1,000
investment will pay the
following cumulative expenses,
assuming a 5% annual return.
Government Fund
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Class Class Class Class Class
A C A C C*
----- ----- ----- ----- -----
Management Fees .38% .38% After 1 year $ 35 $ 14 $ 19
After 3 years $ 56 $ 45 $ 45
12b-1 Fees (after .25% .50% After 5 years $ 79 $ 77 $ 77
fee waivers for After 10 years $170 $170 $170
Class C)(a)
Other Expenses .37% .52%
(after assumption of ----- -----
expenses for
Class C)(a)
Total Fund Operating 1.00% 1.40%
Expenses
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Income Fund
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Class Class Class Class Class
A C A C C*
----- ----- ----- ----- -----
Management Fees .50% .50% After 1 year $ 35 $ 14 $ 19
After 3 years $ 56 $ 45 $ 45
12b-1 Fees (after .25% .50% After 5 years $ 79 $ 77 $ 77
fee waivers for After 10 years $146 $170 $170
Class C)(a)
Other Expenses .25% .40%
(after assumption of ----- -----
expenses for
Class C)(a)
Total Fund Operating 1.00% 1.40%
Expenses
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* Assumes redemption at end of period.
(a) Expenses reflect rounding and have been restated to reflect current
fees. Amounts shown for Class C shares of the Government Fund are based
upon a waiver of a portion of the Class C 12b-1 fee and assumption of
certain expenses by TMC. Absent the waiver and assumption, the Class C
12b-1 fees and other expenses would have been 1.00% and 1.17%,
respectively, and the total Fund operating expenses would have been
2.55% for Class C shares.
(b) Expenses reflect rounding and have been restated to reflect current
fees. Amounts shown for Class A of the Income Fund are based upon an
assumption of certain operating expenses by TMC. Absent the
assumption of expenses, other expenses would have been .86%, and the
total Fund operating expenses would have been 1.61%. Amounts shown for
Class C of the Income Fund are based upon a waiver of a portion of the
Class C 12b-1 fees and assumption of certain other expenses by TMC.
Absent the waivers and assumption of expenses, the Class C 12b-1 fees
and expenses would have been 1.00% and 3.63%, respectively, and total
Fund operating expenses would have been 5.13%.
The following supplements and amends the section entitled "TMC and TSC" on
page 33 of the THORNBURG MUNICIPAL FUNDS prospectus and the section entitled
"TMC and TSC" on page 64 of the THORNBURG LIMITED TERM INCOME FUNDS
prospectus:
On April 16, 1996 the shareholders of each of the Funds approved
a restructuring of the manner in which services are furnished to
each of the Funds by TMC, by restating the Investment Advisory
Agreement for each Fund to separate investment management services
from certain administrative services TMC also provides. Effective
July 1, 1996, TMC provides investment management services to each
Fund under the restated Investment Advisory Agreement for a
reduced fee, and under a separate Administrative Services Agreement
supervises, administers and performs certain administrative
services necessary for the maintenance of the shareholders
of each Fund's respective classes. The fee for investment
management services, commencing July 1, 1996, is paid monthly
and is computed for each Fund at an annual rate according to
the following scale as a percentage of each Fund's average
daily net assets:
Limited Term Municipal Funds
Net Assets Annual Rate
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0 to $500 million .50%
$500 million to $1 billion .40%
$1 billion to $1.5 billion .30%
$1.5 billion to $2 billion .25%
Over $2 billion .225%
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Intermediate Municipal Funds
and Income Fund
Net Assets Annual Rate
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0 to $500 million .50%
$500 million to $1 billion .45%
$1 billion to $1.5 billion .40%
$1.5 billion to $2 billion .35%
Over $2 billion .275%
Government Fund
Net Assets Annual Rate
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0 to $1 billion .375%
$1 billion to $2 billion .325%
Over $2 billion .275%
TMC also receives a monthly fee for the described administrative
services from each Fund calculated at an annual rate of .125% of
average daily net assets of Class A and Class C shares. Decreases
in the investment management fee charged to the Limited Term
Municipal Funds are largely offset by the addition of the
administrative services fee and an increase in the maximum
annual reimbursement rate under the Class A Service Plans;
and decreases in the investment management fee charged to the
Intermediate Municipal Funds and the Limited Term Income Funds
are largely offset by the addition of the administrative
services fee. The restructuring did not cause any Fund's
expenses to increase at current asset levels.
Dated July 5, 1996
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The following supplements the section entitled "BUYING FUND SHARES IN
GENERAL" on page 22 of the THORNBURG MUNICIPAL FUNDS prospectus and the
section entitled "BUYING FUND SHARES IN GENERAL" on page 54 of the LIMITED
TERM INCOME FUNDS prospectus:
Each Fund currently issues multiple classes of shares. Each of a
Fund's shares represents an equal undivided interest in the Fund's
assets, and each Fund has common investment objectives and a
common investment portfolio. Different classes may have different
sales charges and other expenses which may affect performance.
Investors may telephone Thornburg Securities Corporation at
(800) 847-0200 to obtain more information concerning the various
classes of shares which may be available to them through their
sales representatives. Investors may also obtain information
respecting the different classes of shares through their sales
representative or other person which is offering or making
available shares of the Funds.
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