l e t t e r t o s h a r e h o l d e r s
119 East Marcy Street, Santa Fe, New Mexico 87501 l (505) 984-0200
April 30, 1996
Dear Fellow Shareholder:
The 6-month period ending March 31, 1996 continued a period of change in the
bond market. Interest rates fell sharply in late 1995, only to increase
significantly in 1996 to date. The net asset value of the A shares decreased one
cent per share to $13.17 in the six months ended March 31, 1996. If you were
with us for the entire period, you received dividends of 33.9 cents per share.
If you reinvest your dividends, you received 34.3 cents per share. Investors who
owned C shares received dividends of 31.3 or 31.6 cents per share, if they
re-invested their dividends.
Your fund is a managed bond portfolio. Its performance over the last year is a
total of all the stories of the individual bonds in our portfolio plus a few
that we traded during the period. One typical story pertains to our investment
in $1,000,000 of the Penn, Indiana High School Building Corporation 6.00% bonds
due 6/15/2003.
The graph on this page compares the price change of Thornburg Intermediate
Municipal Fund with the price change in the Penn School Building bond. Recall
from my last letter to you that on December 31, 1993 this bond was worth
108.229% of its $1 million maturity amount at a then market yield of 4.84%. By
September 30, 1994 an increase in its market yield to 5.70% decreased the price
of the bond to 102.026% of its maturity value. The bond price dipped even more
in late 1994 before recovering noticeably last year. On March 31, 1996 the Penn
bond was valued at 105.5% of its maturity amount to yield 5.07%. In general, the
price volatility of your Fund was less than that of the single bond.
Nothing has happened in the last several years of fluctuating interest rates to
change the ultimate maturity value of this bond or other bonds you own through
your investment in this fund. What has changed? The interim market prices of
these bonds moved lower through most of 1994, before recovering during 1995. So
far in 1996, the interim market prices of the bonds in your fund portfolio have
decreased. These fluctuations in interim market prices of bonds are useful by
providing signals for when to buy more bonds. When bond prices drop sharply, it
is usually a good time to buy more.
Your portfolio includes approximately 225 bonds from 41 states and 2 U.S.
territories, 74% of which are rated A or better by one of the major rating
agencies. Your bond portfolio in Thornburg Intermediate Municipal Fund is
laddered to give a current dollar-weighted average maturity of approximately 7.5
years. This is shorter than the 10-year maximum average maturity permitted for
your fund. If higher yields and lower bond prices continue, we have room to
extend your average portfolio maturity and improve the fund yield.
Many municipal bonds issued between 1983 and 1988 are being paid off early.
Money to pay off these bonds prior to maturity has already been raised. You may
own municipal bonds or unit trusts which are being redeemed. Please remember
that you can easily maintain your municipal bond portfolio by authorizing a
simple, automatic transfer from your checking account to Thornburg Intermediate
Municipal Fund.
We believe the investment program of your fund is a thoroughly sensible one over
time. At today's market prices and yields to maturity, the kinds of bond you own
in this fund look attractive to me. Thank you for investing in Thornburg
Intermediate Municipal Fund.
Sincerely,
Brian J. McMahon
Managing Director
s t a t e m e n t o f a s s e t s a n d l i a b i l i t i e s
Thornburg Intermediate Municipal Fund
March 31, 1996
(unaudited)
ASSETS
Investments, at value (cost $236,723,430) ........ $246,953,329
Cash 58,561
Interest receivable .............................. 4,329,424
Receivable for fund shares sold .................. 252,336
Receivable for securities sold 795,000
Prepaid expenses and other assets ................ 30,602
TOTAL ASSETS .... 252,419,252
LIABILITIES
Payable for investments purchased ................ 4,500,687
Payable for fund shares redeemed 109,930
Dividends payable ................................ 410,227
Accounts payable investment adviser .............. 111,812
Accounts payable and accrued expenses ............ 197,837
TOTAL LIABILITIES 5,330,493
NET ASSETS ....................................... $247,088,759
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share
($241,427,028 applicable to 18,332,311 shares of
beneficial interest outstanding) $13.17
Maximum sales charge, 3.50% of offering
price (3.63% of net asset value per share) .48
Maximum Offering Price Per Share $13.65
Class C Shares:
Net asset value and offering price per share*
($5,661,731 applicable to 429,346 shares of
beneficial interest outstanding) $13.19
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
See notes to financial statements.
s t a t e m e n t o f o p e r a t i o n s
Thornburg Intermediate Municipal Fund
Six Month Period Ended March 31, 1996
(unaudited)
INVESTMENT INCOME
Interest income (net of premium amortized
of $232,847) .................................................. $ 7,323,432
EXPENSES .................................................................
Investment advisory fees (Note 3) .. ............................ 751,323
Distribution fees (Note 3)
Class A Shares ............................................. 294,503
Class C Shares ................. ........................... 14,463
Transfer agent fees ............................................. 95,984
Custodian fees .................................................. 77,445
Registration and filing fees .................................... 31,100
Professional fees ............................................... 18,150
Accounting fees ................................................. 12,955
Insurance ....................................................... 3,291
Trustee's fees and expenses .......... .......................... 2,013
Other expenses .................................................. 9,130
TOTAL EXPENSES ........................................... 1,310,357
Less:
Investment advisory fees deferred by
investment adviser (Note 3) ............................. (98,610)
NET EXPENSES ............................................. 1,211,747
NET INVESTMENT INCOME .................................... 6,111,685
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments sold ........................... (57,567)
Decrease in unrealized appreciation of investments .............. (329,859)
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS ......................... (387,426)
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $5,724,259
See notes to financial statements
s t a t e m e n t s o f c h a n g e s i n n e t a s s e t s
Thornburg Intermediate Municipal Fund
(unaudited)
Six Month Period Year Ended
Ended March 31, 1996 September 30, 1995
INCREASE (DECREASE) IN
NET ASSETS FROM:
OPERATIONS:
Net investment income $6,111,685 $11,466,564
Net realized loss on investments sold (57,567) (2,097,030)
Increase (Decrease) in unrealized appreciation
of investments (329,859) 9,826,700
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 5,724,259 19,196,234
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares (5,998,501) (11,325,918)
Class B Shares -- (49,201)
Class C Shares (113,184) (91,445)
FUND SHARE TRANSACTIONS --(Note 4)
Class A Shares 13,909,247 12,586,727
Class B Shares -- (373,244)
Class C Shares 1,684,861 3,739,329
NET INCREASE IN NET ASSETS 15,206,682 23,682,482
NET ASSETS:
Beginning of period 231,882,077 208,199,595
End of period $247,088,759 $231,882,077
See notes to financial statements.
n o t e s t o f i n a n c i a l s t a t e m e n t s
Thornburg Intermediate Municipal Fund
Note 1 - ORGANIZATION
Thornburg Intermediate Municipal Fund (the "Fund"), is a series of Thornburg
Investment Trust (the "Trust", formerly known as Thornburg Income Trust). The
Trust is organized as a Massachusetts business trust under a Declaration of
Trust dated June 3, 1987 and is registered as a diversified, open-end management
investment company under the Investment Company Act of 1940, as amended. The
Trust is currently issuing five series of shares of beneficial interest in
addition to those of the Fund: Thornburg Limited Term U.S. Government Fund,
Thornburg New Mexico Intermediate Municipal Fund, Thornburg Limited Term Income
Fund, Thornburg Florida Intermediate Municipal Fund and Thornburg Value Fund.
Each series is considered to be a separate entity for financial reporting and
tax purposes.
On September 1, 1994 the Funds began offering three classes of shares of
beneficial interest, Class A, Class B and Class C shares. All shares outstanding
prior to September 1, 1994 are considered Class A shares. On September 28, 1995,
all existing Class B shares were converted at net asset value, without the
imposition of a deferred sales charge, into Class A shares of an equivalent
value. The Fund no longer offers Class B shares. Each class of shares of a Fund
represents an interest in the same portfolio of investments of the Fund, except
that (i) Class A shares are sold subject to a front-end sales charge collected
at the time the shares are purchased and bear a service fee, (ii) Class B shares
were sold at net asset value without a sales charge at the time of purchase, but
were subject to a contingent deferred sales charge upon redemption, and bore
both a service fee and a distribution fee, (iii) Class C shares are sold at net
asset value without a sales charge at the time of purchase, but, effective
October 2, 1995, are subject to a contingent deferred sales charge upon
redemption within one year, and bear both a service fee and a distribution fee,
and (iv) the respective classes have different reinvestment privileges.
Additionally, each Fund may allocate among its classes certain expenses, to the
extent allowable to specific classes, including transfer agent fees, government
registration fees, certain printing and postage costs, and administrative and
legal expenses. Currently, class specific expenses of the Funds are limited to
distribution fees and minor custody and transfer agent expenses.
Note 2 - SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies of the
Fund are as follows:
Valuation of Investments: In determining net asset value, the Fund utilizes an
independent pricing service approved by the Trustees. Debt investment securities
have a primary market over the counter and are valued on the basis of valuations
furnished by the pricing service. The pricing service values portfolio
securities at quoted bid prices or the yield equivalents when quotations are not
readily available. Securities for which quotations are not readily available are
valued at fair value as determined by the pricing service using methods which
include consideration of yields or prices of municipal obligations of comparable
quality, type of issue, coupon, maturity, and rating; indications as to value
from dealers and general market conditions. The valuation procedures used by the
pricing service and the portfolio valuations received by the Fund are reviewed
by the officers of the Fund under the general supervision of the Trustees.
Short-term obligations having remaining maturities of 60 days or less are valued
at amortized cost, which approximates market value. Federal Income Taxes: It is
the policy of the Fund to comply with the provisions of the Internal Revenue
Code applicable to "regulated investment companies" and to distribute all of its
taxable (if any) and tax exempt income to its shareholders. Therefore no
provision for Federal income tax is required. Dividends paid by the Fund for the
period ended March 31, 1996 represent exempt interest dividends which are
excludable by shareholders from gross income for Federal income tax purposes.
When-Issued and Delayed Delivery Transactions: The Fund may engage in
when-issued or delayed delivery transactions. To the extent the Fund engages in
such transactions, it will do so for the purpose of acquiring portfolio
securities consistent with its investment objectives and not for the purpose of
investment leverage or to speculate on interest rate changes. At the time the
Fund makes a commitment to purchase a security on a when-issued basis, it will
record the transaction and reflect the value in determining its net asset value.
When effecting such transactions, assets of the Fund of an amount sufficient to
make payment for the portfolio securities to be purchased will be segregated on
the Fund's records at the trade date. Securities purchased on a when-issued or
delayed delivery basis do not earn interest until the settlement date.
Dividends: Net investment income of the Fund is declared daily as a dividend on
shares for which the Fund has received payment. Dividends are paid monthly and
are reinvested in additional shares of the Fund at net asset value per share at
the close of business on the dividend payment date, or at the shareholder's
option, paid in cash. Net capital gains, to the extent available, will be
distributed annually.
General: Securities transactions are accounted for on a trade date basis.
Interest income is accrued as earned. Premiums and original issue discounts on
securities purchased are amortized over the life of the respective securities.
Realized gains and losses from the sale of securities are recorded on an
identified cost basis. Deferred Expenses: Organizational expenses were deferred
and are being amortized on a straight-line basis over a 60-month period. Use of
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
Note 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Pursuant to the investment advisory agreement, Thornburg Management Company,
Inc. (the "Adviser") provides investment management and advisory services for
which fees are computed at the rate of five eighths of one percent per annum of
the average daily net assets of the Fund. As of September 1, 1994, the advisory
agreement was modified to provide for a sliding scale fee that declines from 5/8
of 1% to 4/10 of 1% when the Fund's average net assets exceed $500 million. The
investment advisory agreement provides that if, with respect to any fiscal year
of the Fund, its total operating expenses (including investment advisory fees,
but excluding interest, taxes, brokerage commissions, and extraordinary
expenses) exceed the most restrictive of the expense limitations imposed by
state securities commissions of the states in which the Fund currently has
registered its securities for sale, the investment advisory fees for that fiscal
year will be reduced or the Adviser will assume certain Fund expenses by the
amount of such excess. For the period ended March 31, 1996, the Adviser
voluntarily deferred a portion of its advisory fee amounting to $98,610. These
expenses may be repaid to the Adviser by the Fund, however such repayment will
depend upon the overall level of Fund expenses for the entire fiscal year ending
September 30, 1996.
The Fund has an underwriting agreement with Thornburg Securities Corporation
(the "Distributor"), which acts as the Distributor of Fund's shares. For the
period ended March 31, 1996, the Distributor earned commissions aggregating
$41,016 from the sale of Class A shares and collected contingent deferred sales
charges aggregating $220 from redemptions of Class C shares of the Fund.
Pursuant to a Service Plan, under Rule 12b-1 of the Investment Company Act of
1940, the Fund may reimburse to the Adviser an amount not to exceed .25 of 1%
per annum of the Fund's average net assets for payments made by the Adviser to
securities dealers and other financial institutions to obtain various
shareholder related services. The Adviser may pay out of its own funds
additional expenses for distribution of the Fund's shares.
The Fund has also adopted a Distribution Plan pursuant to Rule 12b-1, applicable
only to the Fund's Class B and Class C shares under which the Fund can reimburse
the Distributor for certain distribution expenses on a monthly basis at an
annual rate of up to .75% of the average daily net assets attributable to Class
B shares and compensates the Distributor for services in promoting the sale of
Class C shares of the Fund at an annual rate of up to .75% of the average daily
net assets attributable to Class C shares. Total fees incurred by each class of
shares of the Fund under their respective Service and Distribution Plans for the
period ended March 31, 1996, are set forth in the statement of operations.
Certain officers and trustees of the Fund are also officers and/or directors of
the Adviser and Distributor.
n o t e s t o f i n a n c i a l s t a t e m e n t s (continued)
Thornburg Intermediate Municipal Fund
Note 2 - SIGNIFICANT ACCOUNTING POLICIES (continued)
Thornburg Intermediate Municipal Fund
Note 1 - ORGANIZATION
Thornburg Intermediate Municipal Fund (the "Fund"), is a series of Thornburg
Investment Trust (the "Trust", formerly known as Thornburg Income Trust). The
Trust is organized as a Massachusetts business trust under a Declaration of
Trust dated June 3, 1987 and is registered as a diversified, open-end management
investment company under the Investment Company Act of 1940, as amended. The
Trust is currently issuing five series of shares of beneficial interest in
addition to those of the Fund: Thornburg Limited Term U.S. Government Fund,
Thornburg New Mexico Intermediate Municipal Fund, Thornburg Limited Term Income
Fund, Thornburg Florida Intermediate Municipal Fund and Thornburg Value Fund.
Each series is considered to be a separate entity for financial reporting and
tax purposes.
On September 1, 1994 the Funds began offering three classes of shares of
beneficial interest, Class A, Class B and Class C shares. All shares outstanding
prior to September 1, 1994 are considered Class A shares. On September 28, 1995,
all existing Class B shares were converted at net asset value, without the
imposition of a deferred sales charge, into Class A shares of an equivalent
value. The Fund no longer offers Class B shares. Each class of shares of a Fund
represents an interest in the same portfolio of investments of the Fund, except
that (i) Class A shares are sold subject to a front-end sales charge collected
at the time the shares are purchased and bear a service fee, (ii) Class B shares
were sold at net asset value without a sales charge at the time of purchase, but
were subject to a contingent deferred sales charge upon redemption, and bore
both a service fee and a distribution fee, (iii) Class C shares are sold at net
asset value without a sales charge at the time of purchase, but, effective
October 2, 1995, are subject to a contingent deferred sales charge upon
redemption within one year, and bear both a service fee and a distribution fee,
and (iv) the respective classes have different reinvestment privileges.
Additionally, each Fund may allocate among its classes certain expenses, to the
extent allowable to specific classes, including transfer agent fees, government
registration fees, certain printing and postage costs, and administrative and
legal expenses. Currently, class specific expenses of the Funds are limited to
distribution fees and minor custody and transfer agent expenses.
Note 2 - SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies of the
Fund are as follows:
Valuation of Investments: In determining net asset value, the Fund utilizes an
independent pricing service approved by the Trustees. Debt investment securities
have a primary market over the counter and are valued on the basis of valuations
furnished by the pricing service. The pricing service values portfolio
securities at quoted bid prices or the yield equivalents when quotations are not
readily available. Securities for which quotations are not readily available are
valued at fair value as determined by the pricing service using methods which
include consideration of yields or prices of municipal obligations of comparable
quality, type of issue, coupon, maturity, and rating; indications as to value
from dealers and general market conditions. The valuation procedures used by the
pricing service and the portfolio valuations received by the Fund are reviewed
by the officers of the Fund under the general supervision of the Trustees.
Short-term obligations having remaining maturities of 60 days or less are valued
at amortized cost, which approximates market value. Federal Income Taxes: It is
the policy of the Fund to comply with the provisions of the Internal Revenue
Code applicable to "regulated investment companies" and to distribute all of its
taxable (if any) and tax exempt income to its shareholders. Therefore no
provision for Federal income tax is required. Dividends paid by the Fund for the
period ended March 31, 1996 represent exempt interest dividends which are
excludable by shareholders from gross income for Federal income tax purposes.
When-Issued and Delayed Delivery Transactions: The Fund may engage in
when-issued or delayed delivery transactions. To the extent the Fund engages in
such transactions, it will do so for the purpose of acquiring portfolio
securities consistent with its investment objectives and not for the purpose of
investment leverage or to speculate on interest rate changes. At the time the
Fund makes a commitment to purchase a security on a when-issued basis, it will
record the transaction and reflect the value in determining its net asset value.
When effecting such transactions, assets of the Fund of an amount sufficient to
make payment for the portfolio securities to be purchased will be segregated on
the Fund's records at the trade date. Securities purchased on a when-issued or
delayed delivery basis do not earn interest until the settlement date.
Dividends: Net investment income of the Fund is declared daily as a dividend on
shares for which the Fund has received payment. Dividends are paid monthly and
are reinvested in additional shares of the Fund at net asset value per share at
the close of business on the dividend payment date, or at the shareholder's
option, paid in cash. Net capital gains, to the extent available, will be
distributed annually.
General: Securities transactions are accounted for on a trade date basis.
Interest income is accrued as earned. Premiums and original issue discounts on
securities purchased are amortized over the life of the respective securities.
Realized gains and losses from the sale of securities are recorded on an
identified cost basis. Deferred Expenses: Organizational expenses were deferred
and are being amortized on a straight-line basis over a 60-month period. Use of
Estimates: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
Note 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Pursuant to the investment advisory agreement, Thornburg Management Company,
Inc. (the "Adviser") provides investment management and advisory services for
which fees are computed at the rate of five eighths of one percent per annum of
the average daily net assets of the Fund. As of September 1, 1994, the advisory
agreement was modified to provide for a sliding scale fee that declines from 5/8
of 1% to 4/10 of 1% when the Fund's average net assets exceed $500 million. The
investment advisory agreement provides that if, with respect to any fiscal year
of the Fund, its total operating expenses (including investment advisory fees,
but excluding interest, taxes, brokerage commissions, and extraordinary
expenses) exceed the most restrictive of the expense limitations imposed by
state securities commissions of the states in which the Fund currently has
registered its securities for sale, the investment advisory fees for that fiscal
year will be reduced or the Adviser will assume certain Fund expenses by the
amount of such excess. For the period ended March 31, 1996, the Adviser
voluntarily deferred a portion of its advisory fee amounting to $98,610. These
expenses may be repaid to the Adviser by the Fund, however such repayment will
depend upon the overall level of Fund expenses for the entire fiscal year ending
September 30, 1996.
The Fund has an underwriting agreement with Thornburg Securities Corporation
(the "Distributor"), which acts as the Distributor of Fund's shares. For the
period ended March 31, 1996, the Distributor earned commissions aggregating
$41,016 from the sale of Class A shares and collected contingent deferred sales
charges aggregating $220 from redemptions of Class C shares of the Fund.
Pursuant to a Service Plan, under Rule 12b-1 of the Investment Company Act of
1940, the Fund may reimburse to the Adviser an amount not to exceed .25 of 1%
per annum of the Fund's average net assets for payments made by the Adviser to
securities dealers and other financial institutions to obtain various
shareholder related services. The Adviser may pay out of its own funds
additional expenses for distribution of the Fund's shares.
The Fund has also adopted a Distribution Plan pursuant to Rule 12b-1, applicable
only to the Fund's Class B and Class C shares under which the Fund can reimburse
the Distributor for certain distribution expenses on a monthly basis at an
annual rate of up to .75% of the average daily net assets attributable to Class
B shares and compensates the Distributor for services in promoting the sale of
Class C shares of the Fund at an annual rate of up to .75% of the average daily
net assets attributable to Class C shares. Total fees incurred by each class of
shares of the Fund under their respective Service and Distribution Plans for the
period ended March 31, 1996, are set forth in the statement of operations.
Certain officers and trustees of the Fund are also officers and/or directors of
the Adviser and Distributor.
The compensation of unaffiliated directors of the Fund is borne by the Fund.
n o t e s t o f i n a n c i a l s t a t e m e n t s (continued)
Thornburg Intermediate Municipal Fund
Note 4 - SHARES OF BENEFICIAL INTEREST:
At March 31, 1996, there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $240,220,657. Transactions
in shares of beneficial interest were as follows:
Six Month Period Ended Year Ended
March 31, 1996 September 30, 1995
Class A Shares Shares Amount Shares Amount
Shares sold 1,952,512 $26,007,406 3,708,074 $47,585,636
Shares issued to shareholders
in reinvestment of
distributions 263,932 3,514,233 517,151 6,647,686
Shares repurchased (1,172,777) (15,612,392) (3,260,168) (41,646,595)
Net Increase 1,043,667 $13,909,247 965,057 $12,586,727
Class B Shares
Shares sold -- -- 192,283 $2,493,530
Shares issued to shareholders
in reinvestment of
distributions -- -- 2,430 31,469
Shares repurchased -- -- (221,608) (2,898,243)
Net Decrease -- -- (26,895) ($373,244)
Class C Shares
Shares sold 171,218 $2,287,004 309,465 $3,963,617
Shares issued to shareholders
in reinvestment of
distributions 6,102 81,354 5,497 71,325
Shares repurchased (51,145) (683,497) (22,700) (295,613)
Net Increase 126,175 $1,684,861 292,262 $3,739,329
n o t e s t o f i n a n c i a l s t a t e m e n t s (continued)
Thornburg Intermediate Municipal Fund
Note 5 - SECURITIES TRANSACTIONS
For the period ended March 31, 1996, the Fund had purchase and sale transactions
(excluding short-term securities) of $30,237,042 and $13,289,547, respectively.
The cost of investments for Federal income tax purposes is the same. At March
31, 1996, net unrealized appreciation of investments was $10,216,355, resulting
from $10,676,396 gross unrealized appreciation and $446,497 gross unrealized
depreciation.
Accumulated net realized losses from securities transactions included in net
assets at March 31, 1996 aggregated $3,361,797.
For Federal income tax purposes the Fund has realized capital loss carryforwards
of $3,304,230 as of March 31, 1996 available to offset future realized capital
gains. To the extent that such carryforwards are used, no capital gains
distributions will be made. The carryforwards expire as follows: September 30,
2002- $1,207,200, and September 30, 2003- $2,097,030.
f i n a n c i a l h i g h l i g h t s
Thornburg Intermediate Municipal Fund
Per share operating performance
(for a share outstanding
throughout the period) Six Month Period
Period Ended Year Ended July 23,a
March 31, September 30, -Sept.30,
1996 1995 1994 1993 1992 1991
Class of Shares: A A A A A A
Net asset value, beginning of period $13.18 $12.73 $13.47 $12.59 $12.11 $12.06
Income from investment operations:
Net investment income .34 .68 .67 .71 .78 .16
Net realized and unrealized
gain (loss) on investments (.01) .45 (.72) .88 .48 .05
Total from investment operations .33 1.13 (.05) 1.59 1.26 .21
Less distributions from:
Net investment income (.34) (.68) (.67) (.71) (.78) (.16)
Realized capital gains -- -- (.02) -- -- --
Change in net asset value (.01) .45 (.74) .88 .48 .05
Net asset value, end of period $13.17 $13.18 $12.73 $13.47 $12.59 $12.11
Total return (b) 2.49% 9.16% (.38%) 13.01% 10.76% 1.77%
Ratios/Supplemental Data Ratios to average net assets:
Net investment income 5.09%c 5.31% 5.23% 5.37% 6.15% 5.80%c
Expenses, after expense reductions 1.00%c 1.00% .95% .70% .48% .25%c
Expenses, before expense reductions 1.07%c 1.08% 1.05% 1.06% 1.19% 2.78%c
Portfolio turnover rate 5.64% 32.20% 27.37% 14.29% 46.15% 3.40%
Net assets
at end of period (000) $241,427 $227,881 $207,718 $182,319 $81,428 $9,719
(a) Commencement of operations.
(b) Sales loads are not reflected in computing total return, which is not
annualized for periods less than one year.
(c) Annualized.
f i n a n c i a l h i g h l i g h t s (continued)
Thornburg Intermediate Municipal Fund
Per share operating performance
(for a share outstanding
throughout the period Six Month
Period from Period Ended Year Ended September 1,a
March 31, September 30, -September 30,
1996 1995 1994
- -------------------------------------------------------------------------------
Class of Shares: C B* C B C
Net asset value, beginning of period $13.20 $12.73 $12.73 $12.91 $12.91
Income from investment operations:
Net investment income .31 .59 .60 .05 .05
Net realized and unrealized
gain (loss) on investments (.01) .40 .47 (.18) (.18)
Total from investment operations .30 .99 1.07 (.13) (.13)
Less distributions from:
Net investment income (.31) (.59) (.60) (.05) (.05)
Change in net asset value (.01) .40 .47 (.18) (.18)
Net asset value, end of period $13.19 $13.13 $13.20 $12.73 $12.73
Total return (b) 2.29% 8.30% 8.60% (.99%) (.97%)
Ratios/Supplemental Data Ratios to average net assets:
Net investment income 4.69%c 4.59% 4.62% 4.57%c 4.51%c
Expenses, after expense reductions 1.40%c 1.65% 1.66% 1.70%c 1.76%c
Expenses, before expense reductions 2.02%c 2.86% 2.35% 1.70%c 1.76%c
Portfolio turnover rate 5.64% 32.20% 32.20% 27.37% 27.37%
Net assets
at end of period (000) $5,662 $0 $4,001 $342 $139
(a) Commencement of operations.
(b) Sales loads are not reflected in computing total return, which is not
annualized for periods less than one year.
(c) Annualized.
* On September 28, 1995, all Class B shares were converted into Class A shares.
s c h e d u l e o f i n v e s t m e n t s
Thornburg Intermediate Municipal Fund
March 31, 1996 CUSIPS: Class A - 885-215-202, Class C - 885-215-780
NASDAQ Symbols: Class A - THIMX
Principal Credit Rating+
Amount Issuer-Description Moody's/S&P Value
Alabama (1.49%)
$1,530,000 Alabama A & M University Housing & General Fee Revenue Series
1992, 6.20% due 11/1/05 (Living and Learning Center Project;
Insured: MBIA) Aaa/AAA $1,652,216
250,000 Alabama Municipal Electric Authority Power Supply System
Series 1991-A, 6.50% due 9/1/05
(Insured: MBIA) Aaa/AAA 275,648
750,000 Montgomery County Revenue, 7.00% due 4/1/07
(Human Resources Project) NR/A 816,960
920,000 Pell County Industrial Development Board Revenue
Series 1989-A, 7.75% due 9/1/04 (Shelby Creek Fabricators
Project; LOC: Southtrust Bank) NR/NR 936,321
Alaska (.89%)
1,000,000 Alaska Industrial Development & Export Authority Series
1991-A, 7.30% due 4/1/06 A/A- 1,072,130
1,500,000 North Slope Borough Alaska General Obligation Capital
Appreciation Series 1993-B, 0% due 1/1/02
(Insured: MBIA) Aaa/AAA 1,137,150
Arizona (.82%)
500,000 Maricopa County Unified School District #89, Dysart School
District General Obligation, 0% due 7/1/01
(Insured: FGIC) Aaa/AAA 391,280
880,000 Santa Cruz Valley Arizona School District Series 1994, 0%
due 7/1/97 (Insured: FGIC) Aaa/AAA 835,560
880,000 Santa Cruz Valley Arizona School District Series 1994, 0%
due 7/1/98 (Insured: FGIC) Aaa/AAA 796,048
California
(17.41%)
675,000 California Housing Finance Agency Revenue Series 1985-B,
9.875% due 2/1/17 Aa/A+ 704,200
315,000 California Public Capital Improvements Financing Authority
Joint Powers Agency Series E, 8.25% due 3/1/98
(Pooled Projects) Baa/NR 333,582
625,000 California State Veterans Housing, 6.90%
due 4/1/01 A1/A+ 632,331
4,500,000 California Statewide Community Development Authority
Certificate of Participation, 5.50% due 10/1/07
(Unihealth America Project; Insured: AMBAC) Aaa/AAA 4,529,790
200,000 California Statewide Community Development Authority,
3.50% due 7/1/24, put 4/1/96
daily demand note Aa/AA 200,000
1,000,000 California Statewide Community Development Authority
Series 1996A, 6.00% due 9/1/05 (San Gabriel Medical
Center Project; Insured: California Health) NR/A 1,037,080
1,740,000 Escondido Joint Powers Financing Authority Lease
Revenue, 0% due 9/1/07 (Center for the Arts Project;
Insured: AMBAC) Aaa/AAA 911,638
8,095,000 Glendale Hospital Revenue Refunding Revenue, 7.75% due 1/1/09
(Verdugo Hills Project;
Insured: Industrial Indemnity) NR/A+ 8,831,078
2,000,000 Orange County Refunding Recovery, 5.20% due 6/1/03
(Insured: MBIA) Aaa/AAA 2,029,740
1,190,000 Orange County Refunding Recovery, 6.50% due 6/1/04
(Insured: MBIA) Aaa/AAA 1,303,514
2,280,000 Orange County Refunding Recovery, 6.50% due 6/1/05
(Insured: MBIA) Aaa/AAA 2,499,062
330,000 Orange County Airport Revenue, 8.00% 7/1/04
(John Wayne Int. Airport Project) A1/A- 353,780
770,000 Orange County Airport Revenue, 8.00% 7/1/04
(John Wayne Int. Airport Project) A1/A- 800,738
100,000 Orange County Transportation Authority Sales Tax Revenue,
5.50% due 2/15/01 Aa/AA 102,113
2,850,000 Orange County Special Financing Authority Teeter Plan
Revenue Series E, 6.35% due 11/1/14, put 11/1/01
(LOC: Industrial Bank of Japan) A1/A+ 2,830,022
1,500,000 Sacramento California Municipal Utility District
Electric Revenue, 6.32% (variable rate)
due 11/15/06 (Insured: FSA) Aaa/AAA 1,530,000
1,925,000 San Diego Water Revenue Certificate of
Participation, 6.25% due 5/1/04 Aa/AA- 2,045,678
500,000 San Diego County Water Authority Revenue & Refunding
Series 1993-A, 7.437% (variable rate) due 4/25/07
(Insured: FGIC) Aaa/AAA 526,875
330,000 San Francisco Downtown Parking Corporation
Series 1993, 5.00% due 4/1/96 A/NR 330,020
365,000 San Francisco Downtown Parking Corporation
Series 1993, 5.40% due 4/1/98 A/NR 370,391
380,000 San Francisco Downtown Parking Corporation
Series 1993, 5.55% due 4/1/99 A/NR 384,815
405,000 San Francisco Downtown Parking Corporation
Series 1993, 5.70% due 4/1/00 A/NR 410,775
425,000 San Francisco Downtown Parking Corporation
Series 1993, 5.85% due 4/1/01 A/NR 431,320
145,000 San Marcos Certificate of Participation Series C,
0% due 8/15/05 (Escrowed to maturity) NR/AAA 90,255
740,000 San Marcos Certificate of Participation Series D,
0% due 9/2/05 (Escrowed to maturity) NR/AAA 459,510
1,310,000 San Marcos Public Facilities Authority Revenue
Custom Receipts, 0% due 1/1/98
(Escrowed to maturity) Aaa/AAA 1,215,929
1,310,000 San Marcos Public Facilities Authority Revenue
Custom Receipts, 0% due 7/1/99
(Escrowed to maturity) Aaa/AAA 1,127,386
3,000,000 South Coast Local Education Angencies Pooled
Tax & Revenue Anticipation Notes Series 1995-A,
5.00% due 8/14/96 NR/SP1+ 3,011,880
700,000 Sulphur Springs School District General Obligation
Series B, 5.60% due 3/1/04 A/NR 727,447
800,000 Sulphur Springs School District General Obligation
Series B, 5.70% due 3/1/05 A/NR 833,448
450,000 Sunline Transit Agency Certificate of Participation
Series A, 5.625% due 7/1/04 A/NR 450,045
215,000 Sunline Transit Agency Certificate of Participation
Series A, 5.75% due 7/1/05 A/NR 224,866
1,700,000 University of California Regents Certifiacte of
Participation Series A, 5.05% due 6/1/04(Various
Capital Projects; Insured: MBIA) Aaa/AAA 1,716,167
Colorado (3.44%)
365,000 Colorado Student Obligation Auth. Revenue Series B,
6.55% due 12/1/02 A/NR 381,775
1,000,000 Colorado Student Obligation Auth. Student Loan
Revenue Series B, 5.90% due 9/1/02 A/NR 1,010,580
100,000 Highlands Ranch Metropolitan District #2 General
Obligation Refunding, 6.60% due 6/15/00
(LOC: Swiss Bank) Aa1/AA+ 100,646
2,830,000 Larimer County, 8.45% due 12/15/05 (Poudre School
District R1 Project) A/NR 3,560,083
2,500,000 Mesa Valley School District Certificate of
Participation Series B, 6.875% due 12/1/05
(Insured: FSA) Aaa/AAA 2,742,500
665,000 Thornton Single Family Mortgage Revenue Series
1992-A, 8.05% due 8/1/09 A/NR 711,690
Connecticut (2.36%)
3,000,000 Bristol Resource Recovery Facility Operating Committee -
Solid Waste Revenue Refunding Series 1995, 6.125% due 7/1/03
(Ogden Martin at Bristol Project) A/NR 3,117,000
1,365,000 Connecticut State Housing Revenue Series 1990-B1, 7.55%
due 11/15/08 (FHA/VA/ Private Mortgage
Insurance) Aa/AA 1,391,317
185,000 New Britain Senior Citizen Housing Development
Mortgage Revenue Refunding Series A, 6.50% due 7/1/02
(Nathan Hale Apartments Project; Insured: FHA) NR/AAA 192,380
500,000 Stratford General Obligation Series 1992, 7.15%
pre-refunded 3/1/01 @ 102 NR/A- 560,970
500,000 Stratford General Obligation Series 1992, 7.20%
pre-refunded 3/1/01 @ 102 NR/A- 562,055
District of Columbia (1.03%)
1,000,000 District of Columbia General Obligation Series A,
5.75% due 6/1/03 Ba/B 981,060
1,000,000 District of Columbia Certificate of Participation
Series 1993, 7.30% due 1/1/13 NR/B- 1,015,970
235,000 District of Columbia Housing Finance Agency Mortgage
Revenue Refunding Series 1992-D, 6.00% due 7/1/02
(Insured: MBIA) Aaa/AAA 241,117
300,000 District of Columbia Revenue, 0% due 2/15/02
(Assoc. of American Medical Colleges) NR/AA- 200,781
195,000 District of Columbia Revenue, 0% due 2/15/04
(Assoc. of American Medical Colleges) NR/AA- 113,408
Florida (2.56%)
250,000 Cape Coral Special Assessment Water Improvement, 6.50%
due 7/1/98 (Insured: MBIA) Aaa/AAA 261,353
250,000 Dade County Aviation Revenue, 7.20% due 10/1/00,
refunding pending 10/1/96 @ 101 Aa/A 256,757
240,000 Dade County Educational Facilities Revenue, 7.65%
pre-refunded 4/1/00 @ 102 (University of Miami
Project; Insured: MBIA) Aaa/AAA 272,393
500,000 Duval County H.F.A. Multi Family Housing Revenue
Series 1996, 5.35% due 9/1/06 (St. Augustine
Apartments Project) NR/A 494,085
215,000 Duval County HFA Series 94, 6.10% due 4/1/06
(GNMA Collateral) Aaa/AAA 219,027
220,000 Duval County HFA Series 94, 6.10% due 10/1/06
(GNMA Collateral) Aaa/AAA 224,270
250,000 Florida Housing Finance Agency Multifamily Housing
Revenue Series 1995 D, 5.10% due 4/1/13, put 4/1/02
(Park Colony Project; LOC: Mellon Bank) A+/A1 248,850
1,000,000 Florida Housing Finance Agency Multifamily Housing
Revenue Series 1983 G, 5.35% due 12/1/05, mandatory
put 6/1/00 (Insured: Connecticut General) Aaa/AAA 1,010,950
900,000 Hillsborough County Industrial Development
Authority, 3.85% due 9/1/25, put 4/1/96
daily demand note Aa2/AA 900,000
320,000 Jacksonville Health Facilities Authority IDR, 7.55%
due 12/1/07 (National Benevolent Association
Project) Baa1/BBB+ 349,728
100,000 Lee County Hospital Board Director's Revenue
Series A, 5.70% due 4/1/01 (Lee Memorial Hospital
Project; Insured: MBIA) Aaa/AAA 105,142
400,000 Leon County Infrastructure Sales Surtax Revenue,
5.60% due 10/01/97 (Criminal Detention Facilities Project;
Insured: AMB) Aaa/AAA 410,496
150,000 Osceola County Health Facilities Revenue Series 1994,
5.75% due 5/1/04 (Evangelical Lutheran Good Samaritan
Project; Insured: AMBAC) Aaa/AAA 157,605
1,400,000 Pinellas County Health Facilities Authority Series
1994-A, 5.75% due 8/1/01 (Multi County Project;
GNMA/FNMA Collateral) Aaa/NR 1,423,128
Georgia (.29%)
195,000 Hinesville Leased Housing Corp. Rev., 6.05% due 1/15/98
(Regency Park Project) NR/BBB 196,096
500,000 Savanah Resource Recovery, 5.85% due 12/1/01
(Savanah Energy Systems Project) A1/A+ 519,475
Idaho (.39%)
955,000 Idaho Student Loan Series 1992B, 6.00%
due 4/1/00 NR/NR 958,362
Illinois (5.76%)
1,930,000 Bedford Park Tax Increment Revenue Refunding
Series 1993, 8.00% due 12/1/10 NR/BBB- 2,330,166
300,000 Central Lake County Joint Action Water Agency
Series 1991, 0% due 5/1/05 (Insured: MBIA) Aaa/AAA 186,153
500,000 Illinois Development Financing Authority,
7.125% due 3/15/07 (Children's Home & Aid Society
Project; LOC: American National Bank of Chicago) NR/A+ 530,955
2,400,000 Illinois Development Financing Authority Debt
Restructuring Revenue Series 1994, 7.25% due
11/15/09 (East St. Louis Project) NR/A- 2,566,776
500,000 Illinois HFA Revenue Refunding Series 1992, 7.00%
due 1/1/07 (Mercy Hospital Project) Baa1/A- 524,895
1,000,000 Illinois HFA Revenue Refunding Series 1992, 7.00%
due 7/1/02 (Trinity Medical Center Project) Baa1/NR 1,021,630
1,025,000 Illinois HFA Revenue Series B, 7.00% due 1/1/04
(Proctor Community Hospital Project) Baa/BBB- 1,047,940
1,300,000 Illinois Health Facilities Authority Revenue Series C,
3.35% due 1/1/16, put 4/7/96 weekly demand note (Ingalls
Memorial Project; LOC: LaSalle National) A1/ VM1G1 1,300,000
1,525,000 Illinois State University Auxiliary Facilities System
Revenue Series 1992, 0% due 10/1/01
(Insured: MBIA) Aaa/AAA 1,166,961
480,000 Rock Island Residential Mortgage Revenue, 7.70%
due 9/1/08 Aa/NR 508,483
3,000,000 Southern Illinois University Revenue Refunding
Series A, 7.125% due 4/1/07 A/A 3,036,090
Indiana (2.43%)
665,000 Danville Community Elementary School Building Corporation,
6.75% due 1/15/04 NR/A 742,472
1,000,000 Gary Building Corporation - Lake County First Mortgage
Series 1994-B, 8.25% due 7/1/10
(Sears Building Project) NR/NR 1,086,570
255,000 Hamilton Heights Refunding Revenue, 6.60% due
1/1/08 NR/A 278,544
700,000 Indiana Bond Bank Special Program Series 1991-F,
7.00% due 8/1/07 NR/A 760,382
760,000 Indiana State Housing Finance Authority Single
Family Mortgage Revenue Series E-2,
7.95% due 7/1/10 A2/AA 764,856
1,195,000 Lake Central Multi District School Building Mortgage
Revenue Series 1992-B, 6.25% due 1/15/04 NR/A 1,315,408
1,000,000 Penn High School Building Corporation Series
1992, 6.00% due 6/15/03 NR/A 1,054,880
Iowa (.71%)
1,600,000 Iowa State Department General Services Certificate of
Participation Series 1992, 6.50% due 7/1/06
(Insured: AMBAC) Aaa/AAA 1,745,488
Kentucky (3.09%)
1,000,000 Erlanger Kentucky Improvement Assessment, 7.375%
due 8/1/10 (Public Improvement '93 Project;
LOC: PNC Bank of Ohio) NR/NR 1,059,500
2,160,000 Fulton County Industrial Building Revenue Series 1995,
7.20% due 2/1/03 (H.I.S. Jeans of Kentucky Project;
Guarantee: CHIC by H.I.S.) NR/NR 2,191,644
2,520,000 Fulton County Industrial Building Revenue Series 1995,
7.60% due 2/1/07 (H.I.S. Jeans of Kentucky Project;
Guarantee: CHIC by H.I.S.) NR/NR 2,561,782
605,000 Mt. Sterling League of Cities Funding Trust Lease
Series A, 5.625% due 3/1/03 (Investment Agreement
w/ Transamerica Life; Guaranteed: Health
Management Assoc.) Aa/NR 612,048
1,120,000 Paintsville First Mortgage Revenue Refunding Series 1991,
8.65% due 9/1/05 (Paul B. Hall Medical
Center Project) NR/NR 1,194,928
Louisiana (3.52%)
475,000 Calcasieu Parish Industrial Development Board
Pollution Control Revenue, 7.80% due 12/1/05 (Cities
Service Corporation Project) Baa3/BBB 476,606
52,871 East Baton Rouge Mortgage Financing Authority Purchase
Revenue, 8.25% due 2/25/11 (GNMA Collateralized) NR/AAA 55,343
7,500,000 Louisiana Public Facilities Authority Revenue Refinancing,
8.00% due 10/1/09 (Schwegman Westside Expressway
Project) NR/NR 8,159,250
Maryland (.40%)
935,000 Ann Arundel County Multifamily Housing Revenue, 7.45%
due 12/1/24, put 12/1/03 (Twin Coves Apartment
Project; Hud Section 8) NR/BBB+ 976,982
Massachusetts (3.29%)
250,000 Boston General Obligation Series A, 7.60% pre-refunded
2/1/99 @ 102 NR/A+ 276,380
415,000 Haverhill General Obligation Municipal Purpose Loan,
7.50% due 10/15/11 Baa/BBB 454,072
260,000 Holyoke General Obligation, 9.85% pre-refunded
11/1/97 @ 102 Aaa/NR 285,672
600,000 Holyoke General Obligation School Project Loan
Act of 1948, 7.35% due 8/1/02 Baa/NR 662,376
1,000,000 Holyoke General Obligation School Project Loan Act of
1948, 7.65% due 8/1/09 Baa/NR 1,109,240
100,000 Massachusetts Health and Education Facilities,
6.875% due 7/1/99 (Charlton Hospital Project) A/A- 105,283
1,230,000 Massachusetts Industrial Finance Agency IDRB, 7.75%
due 11/1/06, put 11/1/96 (William F. Rogers, Jr. Project;
LOC: Shawmut Bank) NR/NR 1,238,438
1,000,000 Massachusetts Industrial Financing Authority Revenue
Refunding Series 1993-A, 6.15% due 7/1/02 (Massachusetts
Refusetech Project) Baa1/BBB 1,020,400
2,860,000 Massachusetts Housing Finance Authority Insured
Rental Housing Series 1994-A, 6.20% due 1/1/06
(Insured: AMBAC) Aaa/AAA 2,963,418
Michigan (4.50%)
455,000 Auburn Hills Economic Limited Obligation Revenue Refunding
and Improvement, 6.15% due 12/01/05 (Foamade Industries
Project; LOC: Michigan National Bank) NR/NR 464,601
500,000 Detroit Unlimited Tax General Obligation, 8.00% pre-refunded
4/1/01 @ 102 Ba1/BBB 584,185
965,000 Kent Hospital Finance Authority Revenue Refunding Series
1992, 6.20% due 11/1/02 (Pinerest Christian Hospital
Project; Insured: FGIC) Aaa/AAA 1,044,458
500,000 Michigan State Housing Development Authority, 6.25%
due 7/1/04 A1/NR 502,680
500,000 Michigan State Housing Redevelopment Authority Ltd.
Obligation, 6.50% due 9/15/07 (Greenwood Villa
Project; Insured: FSA) Aaa/AAA 528,175
1,000,000 Michigan State Housing Development Authority Rental
Revenue, 3.60% due 4/1/04 (Insured: AMBAC) Aaa/AAA 1,000,000
1,215,000 Michigan Strategic Fund Limited Obligation Refunding
Revenue Series 1992, 6.25% due 8/15/04 (Environmental
Research Institute Project) NR/A 1,283,368
895,000 Pontiac Stadium Building Authority Revenue, 6.60%
due 3/1/00 Baa/BBB 906,313
1,530,000 Southfield Economic Development Corporation Refunding Revenue
N.W. 12 Limited Partnership, 7.25% due 12/1/10 NR/NR 1,565,511
1,800,000 University of Michigan Revenue Series A, 3.85%
due 12/1/27, put 4/1/96 daily demand note
(LOC: Bankers Trust) VMIG1/A-1+ 1,800,000
1,025,000 Wayne County Building Authority Limited Tax General Obligation
Series 1992-A, 7.80%
pre-refunded 3/1/02 @ 102 Baa/BBB- 1,196,729
225,000 Wayne County Downriver System Sewage Disposal Series A,
7.00% due 11/1/13 Baa/BBB- 236,725
Minnesota (.80%)
695,000 Minneapolis Special School District Certificate of
Participation, 5.40% due 2/1/01 A/A 696,376
585,000 Minneapolis Coastal St. Paul Housing Development
Authority, 7.75% due 7/1/06 MG1/AA- 601,386
680,000 Sandstone First Mortgage Revenue, 10.00% due 1/15/13
(Sandstone Nursing Home Project; Insured: FHA) NR/A+ 689,030
Mississippi (2.39%)
3,300,000 Adams County Hospital Revenue Series 1991, 7.90% due 10/1/08
(Jefferson Davis Memorial Hospital Project) Baa/NR 3,546,246
1,000,000 Mississippi Higher Educational Authority Series C,
7.50% due 9/1/09 A/NR 1,056,040
200,000 Mississippi Hospital Equipment and Facilities Revenue
Series A, 7.25% due 5/1/00 (Baptist Medical Center Project;
Insured: MBIA) (Escrowed to Maturity) Aaa/AAA 220,714
1,000,000 Mississippi Hospital Equipment Revenue, 6.40% due 1/1/07
(Rush Foundation Project; LOC: Connie Lee) Baa/AAA 1,069,170
Missouri (1.47%)
200,000 Jackson County Single Family Mortgage Revenue, 0%
due 9/1/14 NR/A 23,574
200,000 Missouri State Economic Development Export and
Infrastructure Board MFHR Series 1991-A, 7.25% due 9/15/02
(Quality Hill Project; Insured: Asset Guaranty) NR/AA 211,800
650,000 Missouri State Health and Education Facilities Authority,
0% due 7/1/02 (Missouri Baptist Medical Center Project)
(Escrowed to Maturity) NR/A- 451,523
2,365,000 St. Louis Board of Education General Obligation, 8.50%
due 4/1/04 (Insured: FGIC) Aaa/AAA 2,934,752
Montana (.48%)
1,105,000 Montana Higher Education Student Assistance Corp. Series
1992-B, 7.05% due 6/1/04 A/NR 1,193,610
Nebraska (1.54%)
2,250,000 Douglas County Industrial Development Revenue Series
1994, 6.40% due 9/1/14, mandatory put 9/1/04 (Aksarben
Foods Project; LOC: Norwest Bank) Aa/AA2 2,349,540
2,170,000 Nebraska Investment Finance Authority Collateralized
Mortgage Obligation Capital Appreciation Refunding Series B,
0% due 4/15/12 (Insured: MBIA) Aaa/AAA 702,993
700,000 Nebraska Investment Finance Authority, 6.65% due 3/1/00
(Insured: MBIA) Aaa/AAA 750,673
New Jersey (.61%)
280,000 Cape May County Municipal Utilities Authority, 6.60%
due 8/1/03 A/A 303,122
1,000,000 Mercer County Improvement Revenue Solid Waste Refunding,
0% due 4/1/14 Ba/NR 251,280
3,020,000 Mercer County Improvement Revenue Solid Waste Refunding,
0% due 4/1/16 Ba/NR 650,931
300,000 New Jersey EDA Refunding Revenue Series 1991, 6.875%
due 10/1/14, optional put 10/1/98 (Fairway Corporation
Project; Insured: Provident Mutual
Life Insurance) A2/NR 303,522
New Mexico (.90%)
1,000,000 Albuquerque Gross Receipts Tax Revenue Series B, 8.10%
due 7/1/17, pre-refunded 7/1/96 @ 102 NR/AAA 1,031,480
590,000 Sandia Pueblo General Obligation, 5.40% due 12/1/03
(LOC: Norwest Bank) NR/AA 592,572
600,000 Sandia Pueblo General Obligation, 5.60% due 12/1/05
(LOC: Norwest Bank) NR/AA 602,268
New York (1.51%)
300,000 Allegheny County IDA Civic Facilities, 7.10% due 9/1/01
(Alfred University Project) Baa1/NR 323,607
550,000 Battery Park City Authority Revenue, 7.35% pre-refunded
5/1/99 @ 102 Aaa/AAA 608,498
1,000,000 New York City General Obligation Refunding, 7.50%
due 2/1/01 Baa1/A- 1,092,050
1,500,000 New York Local Government Assistance Corporation
Series 1992, 6.875% due 4/1/06 A/A 1,653,495
50,000 Valley Health Development Corporation Mortgage
Revenue Series 1990-A, 7.85% due 2/01/02
(Insured: FHA) NR/AAA 53,807
North Carolina (.30%)
650,000 Craven County Industrial Facilities Pollution Control
Financing Authority Solid Waste Revenue, 7.875%
due 6/1/05 (Weyerhaeuser Company Project) NR/NR 731,510
North Dakota (.28%)
650,000 Bismarck Hospital Revenue Refunding and Improvement,
7.00% due 5/1/03 (Medical Center One Inc. Project;
Insured: BIG) Aaa/AAA 699,647
Ohio (3.23%)
700,000 Bellefontaine Hospital Facility Revenue and Refunding
Series 1993, 6.00% due 12/1/02 (Mary Rutan Health-Logan
County Project) NR/BBB 724,395
250,000 Bowling Green State University General Receipts Series
1991, 6.70% due 6/1/07 A/AA 269,680
150,000 Cleveland Airport System Revenue, 7.00%
due 1/1/06 A/A 151,779
2,250,000 Cleveland Certificate of Participation, 7.10%
due 7/1/02 (Motor Vehicle Motorized and Communications
Equipment Project) Baa/BBB 2,358,135
1,000,000 Cleveland Parking Facilities Improvement Revenue
Series 1992, 8.00% due 9/15/12 NR/NR 1,093,800
1,100,000 Franklin County Health Care Revenue Series 1995 A,
6.00% due 11/1/10 (Heinzerling Foundation Project;
LOC: BancOne - Columbus) Aa2/NR 1,067,715
700,000 Hamilton County Hospital Facilities Refunding
Revenue Series 1992, 6.55% due 1/1/03 (Episcopal
Retirement Homes, Inc. Project;
LOC: Fifth/Third Bank) Aa/NR 758,156
400,000 Hamilton County Hospital Facilities Refunding Revenue
Series 1992, 6.80% due 1/1/08 (Episcopal Retirement
Homes, Inc. Project; LOC: Fifth/Third Bank) Aa/NR 415,556
270,000 Harrison County Ohio Industrial Development Revenue,
6.625% due 12/1/98 (Drano Equipment Company
Project) NR/NR 270,859
855,000 Ohio Industrial Development Revenue Series 92, 8.125%
due 12/1/06 (Swifton Commons Project;
LOC: Chemical Bank) NR/NR 855,000
Oklahoma (1.25%)
180,000 Pryor Creek EDA Mortgage Revenue Refunding Series 1991-A,
6.625% due 7/1/00 (FNMA Collateralized) NR/AAA 188,780
785,000 Pushmatahah County Town of Antlers, Hospital Authority
Revenue Series 1991, 8.75% due 6/1/06 NR/NR 851,929
1,485,000 Tulsa Oklahoma Industrial Development Authority Hospital
Revenue, 6.10% due 2/15/09 (Medical
Center Project) Aa/ AA 1,502,449
500,000 Woodward Municipal Hospital Authority Revenue Series 1994,
8.25% due 11/1/09 NR/NR 543,630
Oregon (2.41%)
1,025,000 Albany Hospital Facility Authority Gross Revenue and
Refunding Series 1994, 7.00% due 10/1/05
(Mennonite Home Project) NR/NR 1,048,524
1,400,000 Oregon Economic Development Department Revenue
Series CLII, 6.70% due 12/1/98 (Smokecraft Project;
LOC: Seafirst Bank) Aa3/NR 1,463,518
1,200,000 Oregon Economic Development Department Revenue
Series CLII, 7.00% due 12/1/02 (Smokecraft Project;
LOC: Seafirst Bank) Aa3/NR 1,249,344
1,070,000 Oregon Economic Development Department Revenue
Series CLII, 7.70% due 12/1/14 (Smokecraft Project;
LOC: Seafirst Bank) Aa3/NR 1,168,408
1,000,000 Port of Portland Industrial Revenue Series 85, 7.25%
due 10/1/09 (Ash Grove Cement Project) NR/NR 1,033,580
Pennsylvania (5.06%)
2,295,000 Beaver County Industrial Development Authority Health
Revenue, 0% due 2/1/10 (Collateralized: FHA) NR/AA- 773,438
105,000 Chester County General Obligation, 9.50%
due 12/1/97 NR/NR 105,461
400,000 Hampden Industrial Development Authority Partnership
Holdings LLC Project, 4.50% due 11/15/98 Baa2/NR 368,212
2,800,000 Harrisburg Authority Lease Revenue Series 1991,
6.50% due 6/1/04 (Insured: Capital Guaranty) crossover
refunded 6/1/01 @ 101 Aaa/AAA 3,017,420
800,000 Harrisburg Authority Lease Revenue Series 1991,
6.625% due 6/1/06 (Insured: Capital Guaranty) crossover
refunded 6/1/01 @ 101 Aaa/AAA 866,632
2,000,000 Lancaster County Solid Waste, 8.375%
due 12/15/04 A/BBB 2,112,400
2,000,000 Lehigh County General Purpose Authority Revenue,
7.80% due 3/15/20, put 3/15/02 (Muhlenberg Care Project;
LOC: United Jersey Bank) NR/NR 2,213,540
704,356 Lehigh County Industrial Development Authority Revenue,
7.45% due 8/1/01 (Kresge Company Project) A3/NR 706,153
800,000 McKeesport Area School District Series B,
0% due 10/1/04 NR/A 503,440
990,000 Philadelphia Water and Sewer Revenue 10th Series,
7.35% due 9/1/04 (Escrowed to Maturity) Aaa/AAA 1,103,256
750,000 Pine-Richland School District, 0% pre-refunded
9/01/01 (Insured: AMBAC) Aaa/AAA 524,760
200,000 York County Solid Waste Refuse Authority Industrial
Development Revenue Series 1985, 7.40% due 12/1/99
(Resource Recovery Project) A/AA- 212,930
Rhode Island (1.63%)
595,000 Pawtucket Public Building Authority Water System
Project Revenue, 7.45% due 7/1/05 Baa1/NR 644,760
680,000 Providence Public Building Authority Revenue, 7.10% due 12/1/03
(Veazie Street School and Modular
Classroom Project) Baa1/NR 770,460
1,500,000 Rhode Island Housing and Mortgage Finance Rental
Housing Program Series A, 5.05% due 10/1/01 NR/A 1,492,245
355,000 Rhode Island Health and Education Building Corporation
Series 1991, 7.10% due 11/1/02 (South County
Hospital Project) NR/BBB+ 372,139
720,000 West Warwick General Obligation, 5.90% due 1/1/05
(Insured: MBIA) Aaa/AAA 753,163
South Carolina (.74%)
665,000 Florence County Certificate of Participation Series 1992,
4.90% due 3/1/98 (Law Enforcement Center Project;
Insured: AMBAC) Aaa/AAA 675,334
650,000 Liberty Sewer Revenue, 8.25% due 8/1/07 NR/NR 686,647
455,000 South Carolina Educational Facilities Authority,
6.95% due 11/1/03, put 11/1/96 (Converse College Project;
LOC: Nationsbank) A1/NR 468,386
1,000,000 South Dakota Housing Development Authority Home Ownership
Mortgage Series 1993-A, 5.20% due 5/1/02 Aa/AA 1,005,030
2,160,000 South Dakota Student Loan Revenue, 7.625%
due 8/1/06 (Insured: MBIA) Aaa/AAA 2,266,639
500,000 South Dakota Student Loan Series 1991-A,
7.60% due 8/1/04 NR/A+ 543,800
Tennessee (1.40%)
395,000 Carroll County Industrial Development Resoure, 7.00%
due 4/1/01 (Henry I Siegel Company Project;
LOC: Chic By H.I.S) NR/NR 391,516
900,000 Carrol County Industrial Development Board Refunding
Revenue Series 1995, 7.20% due 4/1/05 (Henry I. Seigel
Company Project; LOC: CHIC by H.I.S.) NR/BBB 908,595
205,000 Copperhill Industrial Development Board, 7.80% due 12/1/00
(Cities Ser. Co. Project) Baa3/BBB 205,531
1,100,000 Dayton IDR Series 1986, 7.75% due 12/1/96 (Cowron
and Co. Project; LOC: Signet Bank) NR/NR 1,102,970
850,000 Tennessee Housing Development Agency Revenue Series K,
8.125% due 7/1/21 Aa/A+ 859,639
Texas (5.97%)
3,975,000 Bell County Health Facilities Development, 4.75% due 10/1/23,
put 10/1/98 NR/AA 3,968,481
700,000 Brazos Higher Education Authority Refunding Revenue Series
B-1, 6.50% due 6/1/04 NR/A 739,851
135,000 Chimney Hill Municipal Utility District Waterworks and
Sewer System Combination Unlimited Tax and Revenue
Refunding Series 1991, 7.75% due 10/1/11 NR/NR 151,254
865,000 Chimney Hill Municipal Utility District Waterworks and
Sewer System Combination Unlimited Tax and Revenue
Refunding Series 1991, 7.75% due 10/1/11 NR/NR 941,129
750,000 Clay Road Municipal Utility District Unlimited Tax and
Revenue Series 1991, 7.625% due 9/1/11 NR/NR 766,935
1,000,000 Conroe Independent School District Refunding Series 1992,
0% due 2/1/05 (PSF Guaranteed) Aaa/AAA 633,630
1,000,000 Conroe Independent School District Refunding Series 1992,
0% due 2/1/05 (PSF Guaranteed) Aaa/AAA 591,490
250,000 Dallas County Flood Control District #1 General Obligation,
0% due 4/1/97 NR/NR 238,477
400,000 Dallas - Fort Worth Regional Airport Revenue Series A -CR-103,
5.875% due 11/1/05, put 5/1/98 (Insured: FGIC) Aaa/AAA 404,312
570,000 Harris County Municipal Utility District #118 Unlimited
Tax and Revenue Refunding Series 1992, 0% due 3/1/04
(Insured: MBIA) Aaa/AAA 354,523
525,000 Harris County Municipal Utility District #118 Unlimited
Tax and Revenue Refunding Series 1992, 0% due 3/1/05
(Insured: MBIA) Aaa/AAA 304,679
880,000 Houston Water Conveyance System Contract Certificate of
Participation Series F, 7.20% due 12/15/04
(Insured: AMBAC) Aaa/AAA 1,014,605
465,000 Hunt Memorial Hospital District, 0% due 2/15/01 A/A 353,335
2,000,000 Leander Independent School District Unlimited Tax
School Building & Refunding Series 1992, 0% due 8/15/05
(PSF Guaranteed) Aaa/NR 1,289,120
800,000 Mesquite General Obligation, 0% due 2/15/02 A1/A+ 592,640
800,000 Midland County Hospital District Revenue Series 1991,
0% due 6/1/07 NR/BBB 403,984
1,495,000 Texas Water Resource Financing Authority Revenue,
7.30% due 2/15/04 (Insured: AMBAC) Aaa/AAA 1,589,947
400,000 Trinity Texas Housing Finance Corporation Multifamily
Housing Revenue, 10.00% due 6/1/98
(Timberline Apartments Project) NR/NR 400,000
U.S. Virgin Islands (1.29%)
3,000,000 U.S. Virgin Islands Water & Power Authority
Series A, 7.40% due 7/1/11 NR/NR 3,196,920
Utah (1.75%)
2,000,000 Intermountain Power Agency Revenue, 0%
pre-refunded 7/1/00 Aaa/AAA 1,646,020
2,500,000 Salt Lake County Housing Authority Multifamily Housing
Revenue Refunding Series 1993, 5.40% due 12/15/18,
put 12/15/03 (Summertree Project;
LOC: First Security Bank) A1/NR 2,478,050
1,570,000 Utah State Housing Financing Agency Capital Appreciation
Res. Mortgage Series 83-A, 0% due 7/1/16 NR/AA 197,161
Virginia (4.52%)
500,000 Chesterfield County Certificate of Participation,
7.80% pre-refunded 12/15/96 @ 102 Aa/NR 524,775
2,000,000 Hampton Redevelopment Housing Authority Multifamily
Housing Revenue & Refunding Series 1994, 7.00%
due 7/1/24, mandatory put 7/1/04 (Chase Hampton
II Apts. Project) NR/NR 2,159,520
415,000 Peninsula Ports Authority Hospital Revenue, 8.00% due 8/1/99
(Mary Immaculate Hospital Project) NR/A- 454,811
975,000 Peninsula Ports Authority Industrial Development Refunding
Revenue Series 1986, 4.25% due 7/1/16, put 7/1/96
(Olde Hampton Hotel Association Project; LOC: Nationsbank
of Virginia) NR/A+ 975,156
2,000,000 Suffolk Redevelopment Housing Authority Multifamily
Housing Revenue & Refunding Series 1994, 7.00% due 7/1/24,
mandatory put 7/1/04 (Chase Heritage
@ Dulles Project) NR/NR 2,125,800
665,000 Virginia Beach General Obligation,
5.90% due 7/15/08 Aa/AA 694,799
1,030,000 Virginia State Housing Development Authority Series C-7,
5.40% due 1/1/01 Aa/AA+ 1,045,337
1,000,000 Virginia State Housing Development Authority Series H-1,
6.60% due 7/1/08 Aa/AA+ 1,055,040
1,000,000 Virginia Housing Dev. Auth. Commonwealth Mortgage Series
1992-C, 6.75% due 7/1/11 Aa/AA 1,035,820
1,000,000 Virginia Public School Authority, 6.80% due 1/15/05
pre-refunded 1/15/99 (School Funding Project)Aaa/AAA 1,079,500
Washington (2.46%)
1,000,000 Bremerton Water & Sewer Improvement Revenue Series B,
6.00% due 9/1/03 (Insured: FGIC) Aaa/AAA 1,072,850
1,100,000 Clark County Industrial Revenue Solid Waste Transfer
Stations Series 1991, 7.50% due 12/15/06
(Columbia Resource Company Project;
LOC: U.S. Bank of Oregon) A1/NR 1,185,668
1,500,000 Pilchuck Development Public Corporation IDRB Series 1993,
6.25% due 8/1/10 (Little Neck Properties Project;
LOC: U.S. Bancorp) A1/NR 1,505,520
790,000 Port of Grays Harbor Revenue Refunding, 6.05%
due 12/1/02 A/BBB+ 833,300
1,000,000 Washington Health Care Facilities Authority Pooled Equipment
Series 1992-B, 7.20% due 6/1/02 (Kadlec
Medical Center Project) Baa1/NR 1,034,670
400,000 Washington Public Power Supply System Series 1991-A,
6.75% due 7/1/05 (Project: 1) Aa/AA 433,872
West Virginia (1.20%)
3,100,000 West Virginia Parkways Economic Development and
Tourism Authority Parkway Revenue Refunding, 6.29%
inverse floating rate note due 5/15/02
(Insured: FGIC) Aaa/AAA 2,962,763
Wisconsin (.88%)
400,000 Bass Lake PCRB, 6.50% due 4/1/05 (Johnson Timber Corp.
Project; Guaranty: SBA) Aaa*/AAA* 434,620
735,000 Wisconsin Housing & Economic Development Authority Series C,
7.55% due 9/1/97 (LOC: FHA/ GEMIC Mortgage) Aa/AA 751,383
1,000,000 Wisconsin Health & Education, 7.75% due 11/1/15
(Hess Memorial Hospital Project) NR/NR 992,040
TOTAL INVESTMENTS (100%) (Cost $236,723,430)** $246,953,329
* Indicates rating on other debt issued by the same issuer, rather than on the
security held by the Fund. These securities are deemed by the Adviser to be
comparable with those of issuers having debt ratings in the 4 highest grades
by Moody's or S & P.
** The cost for Federal income tax purposes is the same.
+ Credit ratings are unaudited.
See notes to financial statements.
