Thornburg New Mexico Intermediate Municipal Fund
Thornburg
New Mexico Intermediate
Municipal Fund
A Shares
SEC Yield 4.44%
Taxable Equiv. Yield 8.03%
NAV $13.05
Max. Offering Price $13.52
1 Year 1.25%
5 Year 5.53%
Since Inception 6.00%
(Inception date) ( 6/18/91)
The taxable equivalent yield assumes a 39.6%
marginal federal tax rate and an 8.50% marginal New Mexico rate.
The investment return and principal value of an investment in fund will
fluctuate so that, when redeemed, an investor's shares may be worth more or
less than their original cost.
Maximum sales charge
of the Fund's Class A Shares
is 3.50%. The Fund's Class C
Shares were converted to Class
A Shares on January 31, 1996.
The data quoted represent past performance and may not be
construed as a guarantee of future results.
l e t t e r t o s h a r e h o l d e r s
Dear Fellow Shareholder:
I am pleased to present the Semi-Annual Report for the Thornburg New Mexico
Intermediate Municipal Fund for the period ending March 31, 1997. This was a
period of sharply fluctuating interest rates. The bond bulls insist that a tepid
U.S. economy is on the brink of weakness. The bond bears counter that our
current economic vigor will persist for the foreseeable future. If you were with
us for the entire period, you received dividends of 32.4 cents per share. If you
reinvested your dividends, you received 32.8 cents per share.
Your Thornburg New Mexico Intermediate Municipal Fund portfolio currently holds
over 135 municipal obligations from New Mexico borrowers and 3 U.S. Territories.
Approximately 88% of the bonds are rated A or better by one of the major rating
agencies. As you know, we "ladder" the maturities of the bonds in your portfolio
so that some bonds are scheduled to mature at par during each of the coming
years. Today, your fund's weighted average maturity is approximately 7 years,
and we always keep it below 10 years. Percentages of the portfolio maturing in
the coming years are summarized below:
% of portfolio maturing within Cumulative % maturing by end of
2 years = 9% year 2= 9%
2 to 4 years = 14% year 4= 23%
4 to 6 years = 19% year 6= 44%
6 to 8 years = 18% year 8= 62%
8 to 10 years = 22% year 10= 84%
10 to 12 years = 8% year 12= 92%
12 to 14 years = 3% year 14= 95%
14 to 16 years = 3% year 16= 98%
Over the years, our practice of laddering a diversified portfolio of short and
intermediate maturity municipal bonds has allowed your fund to perform well in
varying interest rate environments. Unless interest rates increase from present
levels or I detect a broader base of demand for bonds by American households, I
am not inclined to extend our average portfolio maturity at this time.
Strong forces are acting in opposite ways on U.S. interest rates at this time.
The U.S. economy is generally firm and the economies of many developing
countries are growing as well. Americans have been net sellers of individual
municipal and U.S. government bonds, preferring instead to pour money into
stocks, money market funds and, recently, emerging market debt funds. By
themselves, these forces should put upward pressure on our interest rates.
However, most other developed countries have sluggish economies, much lower
interest rates than ours, and currencies that have been depreciating relative to
the U.S. dollar. As a result, foreign money has been pouring into the U.S. bond
market, lifting bond prices and lowering yields from the levels that would
otherwise exist. In the last 2 years, foreign purchases of U.S. Treasury bonds
have accounted for more than 100% of the net issuance of Treasury bonds, up from
an average of approximately 20% between 1980-1994. The graph below illustrates
this trend, which may only now be subsiding. We have positioned your bond
portfolio conservatively so as to be able to react quickly to change and take
advantage of any opportunities that arise.
Many municipal bonds issued between 1985 and 1990 have been paid off this year.
Money to pay off other bonds prior to maturity already has been raised. You may
own municipal bonds or unit trusts which are being redeemed. Your investment in
Thornburg New Mexico Intermediate Municipal Fund will not be redeemed until you
sell it. Please remember that you can easily add to your investment each month
by authorizing a simple, automatic transfer from your checking account.
Thank you for investing in Thornburg New Mexico 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 New Mexico Intermediate Municipal Fund
March 31, 1997
(unaudited)
ASSETS
Investments, at value (cost $124,887,253) $129,242,600
Cash 46,333
Receivable for fund shares sold 343,669
Interest receivable 2,176,895
Prepaid expenses and other assets 32,441
TOTAL ASSETS 131,841,938
LIABILITIES
Payable for investments purchased 31,251
Payable for fund shares redeemed 119,029
Accounts payable and accrued expenses 113,795
Payable to investment adviser 96,018
Dividends payable 194,404
TOTAL LIABILITIES 554,497
NET ASSETS $131,287,441
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share
($131,287,441 applicable to 10,061,662 shares of beneficial interest
outstanding - Note 4) $13.05
Maximum sales charge, 3.50% of offering
price (3.63% of net asset value per share) .47
Maximum Offering Price Per Share $13.52
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 New Mexico Intermediate Municipal Fund
Six Months Ended March 31, 1997
INVESTMENT INCOME
Interest income (net of premium amortized
of $149,429) $ 3,883,584
EXPENSES
Investment advisory fees (Note 3) 326,405
Administration fees (Note 3) 81,601
Distribution and service fees (Note 3)
Class A Shares 161,039
Custodian fees 49,342
Transfer agent fees 37,885
Professional fees 11,782
Accounting fees 6990
Registration and filing fees 349
Other expenses 7,895
TOTAL EXPENSES 683,288
Less:
Expenses deferred by investment adviser (Note 3) (30,479)
NET EXPENSES 652,809
NET INVESTMENT INCOME 3,230,775
REALIZED AND UNREALIZED
LOSS ON INVESTMENTS (NOTE 5)
Net realized gain on investments sold 38,255
Decrease in unrealized appreciation of investments (452,671)
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS (414,416)
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 2,816,359
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 New Mexico Intermediate Municipal Fund
(unaudited)
Six Months Year Ended
Ended March 31, 1997 September 30,
INCREASE (DECREASE) IN
NET ASSETS FROM:
OPERATIONS:
Net investment income $3,230,775 $6,381,032
Net realized gai 38,255 (21,671)
Decrease in unrealized
appreciation of (452,671) (320,678)
NET INCREASE IN NET
ASSETS RESULTING 2,816,359 6,038,683
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares
(3,230,775) (6,378,163)
Class C Shares -- (2,869)
FUND SHARE TRANSACTIONS-- (Note 4)
Class A Shares 394,929 (5,090,560)
Class C Shares -- (143,365)
NET DECREASE IN (19,487) (5,576,274)
NET ASSETS:
Beginning of per 131,306,928 136,883,202
End of period $131,287,441 $131,306,928
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 New Mexico Intermediate Municipal Fund
Note 1 - ORGANIZATION
Thornburg New Mexico 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 classes of shares of beneficial
interest in addition to those of the Fund: Thornburg Florida Intermediate
Municipal Fund, Thornburg Intermediate Municipal Fund, Thornburg Limited Term
U.S. Government Fund, Thornburg Limited Term Income Fund and Thornburg Value
Fund. Each series is considered to be a separate entity for financial reporting
and tax purposes. The Fund's investment objective is to obtain as high a level
of current income exempt from Federal income tax as is consistent with the
preservation of capital.
The Fund currently offers only one class of shares of beneficial interest, 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. On January 31, 1996, all existing Class C 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 or Class C 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 were sold at net asset value
without a sales charge at the time of purchase, but were subject to 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 Fund were limited to distribution fees, administration fees and certain
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 of the Fund, the Trust
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 Trust 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 Trust 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 six months ended March 31, 1997 represent
exempt interest dividends which are excludable by shareholders from gross income
for Federal income tax purposes.
When-Issued and Delayed Delivery Transactions: The Trust may engage in
when-issued or delayed delivery transactions. To the extent the Trust 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
Trust makes a commitment to purchase a security on a when-issued basis, it will
record the transaction and reflect the value in determining the Fund's 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 on 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 Trust 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.
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
the 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.
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 New Mexico Intermediate Municipal Fund
Note 3 - INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Pursuant to an investment advisory agreement, Thornburg Management Company, Inc.
(the "Adviser") serves as the investment adviser and performs services for which
the fees are payable at the end of each month. For the six months ending March
31, 1997, these fees were payable at annual rates ranging from 1/2 of 1% to
11/40 of 1% of the average daily net assets of the Fund. Also, the Trust entered
into an Administrative Services Agreement with the Adviser, whereby the Adviser
will perform certain administrative services for the shareholders of each class
of the Fund's shares, and for which fees will be payable at an annual rate of up
to 1/8 of 1% of the average daily net assets attributable to each class of
shares.
In the event normal operating expenses of the Fund, exclusive of brokerage
commissions, taxes, interest, and extraordinary expenses, exceed the limits
prescribed by any state in which the Fund's shares are qualified for sale, the
Adviser will reimburse the Fund for such excess. No such reimbursement was
required as a result of this limitation. For the six months ended March 31,
1997, the Adviser voluntarily deferred certain operating expenses amounting to
$30,479. These expenses may be repaid to the Advisor by the Fund, however such
repayment will depend upon the overall level of the Fund's expenses for the
entire year ending September 30, 1997.
The Trust has an underwriting agreement with Thornburg Securities Corporation
(the "Distributor"), which acts as the Distributor of Fund shares. For the six
months ended March 31, 1997, the Distributor earned commissions aggregating
$15,702 from the sale of Class A shares.
Pursuant to a Service Plan, under Rule 12b-1 of the Investment Company Act of
1940, the Trust 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.
Certain officers and trustees of the Trust are also officers and/or directors
of the Adviser and Distributor. The compensation of unaffiliated directors
of the Trust is borne by
the Trust.
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 New Mexico Intermediate Municipal Fund
Note 4 - SHARES OF BENEFICIAL INTEREST:
At March 31, 1997, there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $127,651,352.
Transactions in shares of beneficial
interest were as follows:
Six Months Ended Year Ended
March 31, 1997 September 30, 1996
- ---- ------------------
Class A Shares Shares Amount Shares Amount
Shares sold 957,983 $12,613,409 1,300,328 $17,051,801
Shares issued to shareholders
in reinvestment of
distributions 157,875 2,049,030 320,921 4,210,070
Shares repurchased (1,084,747) (14,267,509) (2,011,202) (26,352,431)
Net Increase (Decrease) 31,111 $394,930 (389,953) ($5,090,560)
Class C Shares
Shares sold -- -- 6,829 $90,000
Shares issued to shareholders
in reinvestment of
distributions -- -- 153 2,031
Shares repurchased (17,739) (235,396)
Net Decrease -- -- (10,757) ($143,365)
Note 5 - SECURITIES TRANSACTIONS
For the six months ended March 31, 1997, the Fund had purchase and sale
transactions (excluding short-term securities) of $8,459,056 and $8,015,246,
respectively.
The cost of investments for Federal income tax purposes is $124,915,564. At
March 31, 1997, net unrealized appreciation of investments was $4,356,133,
resulting from $4,558,961 gross unrealized appreciation and $202,828 gross
unrealized depreciation.
Accumulated net realized losses from securities transactions included in net
assets at March 31, 1997 aggregated $719,257.
For tax purposes, the Fund has realized capital loss carryforwards of $729,201
as of September 30, 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 - $3,404,
September 30, 2003 - $ 694,985, and September 30, 2004 - $30,812.
<TABLE>
Thornburg New Mexico Intermediate Municipal Fund
<CAPTION>
Per share operating performance
(for a share outstanding
throughout the period)
Six Months
Ended Year Ended September 30,
<S> <C> <C> <C> <C> <C> <C>
March 31, 1997 1996 1995 1994 1993 1992
Class of Shares: A A A A A A
-------------------------- -- - -
Net asset value, beginning of period $13.09 $13.12 $12.72 $13.36 $12.64 $12.21
Income from investment operations:
Net investment income .32 .63 .60 .60 .65 .74
Net realized and unrealized
gain (loss) on investments (.04) (.03) .40 (.63) .72 .43
Total from investment operations .28 .60 1.00 (.03) 1.37 1.17
Less dividends from:
Net investment income (.32) (.63) (.60) (.60) (.65) (.74)
Realized capital gains -- -- -- (.01) -- --
Change in net asset value (.04) (.03) .40 (.64) .72 .43
Net asset value, end of period $13.05 $13.09 $13.12 $12.72 $13.36 $12.64
Total return (a) 2.18% 4.68% 8.10% (.26%) 10.96% 9.98%
Ratios/Supplemental Data Ratios to average net assets:
Net investment income 4.95%(b) 4.81% 4.71% 4.58% 4.95% 5.76%
Expenses, after expense reductions 1.00%(b) 1.00% 1.00% .90% .61% .42%
Expenses, before expense reductions 1.05%(b) 1.07% 1.06% 1.04% 1.01% 1.12%
Portfolio turnover rate 6.22% 10.88% 17.06% 6.87% 10.33% 32.15%
Net assets
at end of period(000) $131,287 $131,307 $136,742 $143,910 $128,590 $71,034
<FN>
(a) Sales loads are not reflected in computing total return, which is not annualized for periods less than one year.
(b) Annualized.
</FN>
</TABLE>
<TABLE>
f i n a n c i a l h i g h l i g h t s (continued)
<CAPTION>
Thornburg New Mexico Intermediate Municipal Fund
Per share operating performance
(for a share outstanding Four Month Period from
throughout the period) Period Ended Year Ended September 1, (a)
January 31, September 30, to September 30,
1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class of Shares: C** B* C B C
Net asset value, beginning of period $13.12 $12.72 $12.71 $12.87 $12.87
Income from investment operations:
Net investment income .19 .52 .52 .05 .04
Net realized and unrealized
gain (loss) on investments .15 .37 .41 (.15) (.16)
Total from investment operations .34 .89 .93 (.10) (.12)
Less distributions from:
Net investment income (.19) (.52) (.52) (.05) (.04)
Change in net asset value .15 .37 .41 (.15) (.16)
Net asset value, end of period $13.27 $13.09 $13.12 $12.72 $12.71
Total return (b) 2.57% 7.42% 7.48% (.80%) (.90%)
Ratios/Supplemental Data Ratios to average net assets:
Net investment income 4.22%(c) 4.06% 4.05% 3.47%(c) 3.49%(c)
Expenses, after expense reductions 1.40%(c) 1.64% 1.66% 1.71%(c) 1.74%(c)
Expenses, before expense reductions 13.03%(c) 4.71% 15.86% 10.90%(c) 21.92%(c)
Portfolio turnover rate 10.88% 17.06% 17.06% 6.87% 6.87%
Net assets
at end of period (000) $0 $0 $141 $81 $59
<FN>
(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.
**On January 31, 1996, all Class C shares were converted into Class A shares.
</FN>
</TABLE>
<TABLE>
s c h e d u l e o f i n v e s t m e n t s
<CAPTION>
Thornburg New Mexico Intermediate Municipal Fund
March 31, 1997 CUSIP: Class A - 885-215-301; NASDAQ Symbol: Class A - THNMX
Principal Credit Rating+
Amount Issuer-Description Moody's/S&P Value
<S> <C> <C> <C>
$ 225,000 Albuquerque Airport Revenue Series B, 8.40% due 7/1/00 A1/A+ $ 229,198
806,000 Albuquerque Mortgage Obligation Revenue Series B-2, 0% due 5/15/11 (Insured: FGIC) Aaa/AAA 286,775
50,000 Albuquerque Gross Receipts Tax Revenue, 6.20% due 7/1/05 Aaa/AAA 52,767
1,000,000 Albuquerque Gross Receipts Tax Revenue, 5.375% due 7/1/01 (Bluewater Apartments Project) NR/NR 1,002,740
1,280,000 Albuquerque Gross Receipts and Lodger's Tax, 0% due 7/1/02 (Insured: FSA) Aaa/AAA 992,742
1,520,000 Albuquerque Gross Receipts and Lodger's Tax, 0% due 7/1/03 (Insured: FSA) Aaa/AAA 1,116,333
2,035,000 Albuquerque Gross Receipts and Lodger's Tax, 0% due 7/1/05 (Insured: FSA) Aaa/AAA 1,332,396
2,000,000 Albuquerque Gross Receipts and Lodger's Tax, 0% due 7/1/12 (Insured: FSA) Aaa/AAA 828,900
500,000 Albuquerque Gross Receipts and Lodger's Tax, 3.45% due 7/1/22, put 4/7/97
(weekly demand notes) (LOC: Canadian Imperial Bk) Aa3/AA 500,000
80,000 Albuquerque Hospital Revenue, 7.20% due 7/1/97 (Escrowed to Maturity) Aaa/AAA 80,677
1,000,000 Albuquerque Hospital Revenue Series 1991-A, 6.375% due 5/15/04
(St. Joseph's Health Care Project; Insured: MBIA) Aaa/AAA 1,065,550
300,000 Albuquerque Hospital Revenue, 6.625% due 5/15/10
(St. Joseph's Health Care Project; Insured: MBIA) Aaa/AAA 319,476
2,000,000 Albuquerque Hospital Revenue Series 1992, 5.60% due 8/1/99 (Insured: MBIA) Aaa/AAA 2,045,860
335,000 Albuquerque Hospital Revenue Series A, 5.80% due 8/1/00
(Presbyterian Health Care Project; Insured: MBIA) Aaa/AAA 345,807
2,500,000 Albuquerque Hospital System Refunding Revenue Series 1992-A, 6.10% due 8/1/02
(Presbyterian Health Care Project; Insured: MBIA) Aaa/AAA 2,634,325
1,040,000 Albuquerque Hospital System Refunding Revenue Series 1992-B, 6.20% due 8/1/02
(Presbyterian Health Care Project; Insured: MBIA) Aaa/AAA 1,064,585
1,775,000 Albuquerque Hospital System Refunding Revenue Series 1992-B, 6.60% due 8/1/07
(Presbyterian Health Care Project; Insured: MBIA) Aaa/AAA 1,824,416
500,000 Albuquerque Health Care System Series 1992, 3.45% due 5/15/22, put 4/7/97 (weekly demand note)
(Sisters of Charity Project; Insured: Toronto Dominion Bank) VMIG/Aa 500,000
1,000,000 Albuquerque Water and Sewer System Revenue Refunding Series B, 6.95% due 7/1/02 A1/AA 1,082,610
1,500,000 Albuquerque Water and Sewer Revenue, 7.00% due 7/1/03 A1/AA 1,626,135
1,750,000 Albuquerque Water and Sewer Revenue Series 1990-C, 7.00% due 7/1/05 NR/AA 1,881,775
600,000 Albuquerque Water and Sewer Revenue, 6.25% due 7/1/08 A1/AA 630,204
1,225,000 Albuquerque MFHR Series 1991, 8.50% due 7/1/21, put 7/1/01 (Beach Apartments Project) . NR/NR 1,250,847
2,955,000 Albuquerque MFHR Series 1994, 6.75% due 1/1/24, put 1/1/04 (Dorado Village Project) NR/AAA 2,831,422
250,000 Albuquerque Refuse Removal and Disposal Rev., 6.80% due 7/1/98 (Insured: AMBAC) Aaa/AAA 258,030
290,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.00% due 6/1/01
(Evangelical Lutheran Good Samaritan Society Project; Insured: FSA) Aaa/AAA 292,584
305,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.10% due 6/1/02
(Evangelical Lutheran Good Samaritan Society Project; Insured: FSA) Aaa/AAA 308,288
170,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.20% due 6/1/03
(Evangelical Lutheran Good Samaritan Society Project; Insured: FSA) Aaa/AAA 172,223
1,000,000 Albuquerque Special Assessment District Series A, 6.45% due 1/1/15
(Cottonwood Mall Project; LOC: Sumitomo Bank) NR/A+ 1,000,420
25,000 Albuquerque Special Assessment District No. 219 Series B, 5.50% due 7/1/00
(Water and Sewer Improvement Project; LOC: Sumitomo Bank) NR/A 25,031
195,000 Albuquerque Special Assessment District No. 219 Series B, 5.65% due 7/1/01
(Water and Sewer Improvement Project; LOC: Sumitomo Bank) NR/A 195,263
405,000 Albuquerque Special Assessment District No. 219 Series B, 5.75% due 7/1/02
(Water and Sewer Improvement Project; LOC: Sumitomo Bank) NR/A 405,146
4,500,000 Bernalillo County Multifamily Housing Revenue Series 1994-A, 6.50% due 10/1/19,
put 10/1/06 (Village Apartments Project; Insured: AXA Reinsurance Co.) NR/AA 4,724,145
2,300,000 Bernalillo Multifamily Housing Revenue Series 1988, 5.80% due 11/1/25, put 11/1/06
(Sunchase Apartments Project; Insured: AXA Reinsurance Co.) NR/AA 2,312,466
500,000 Bloomfield Gross Receipts Tax Revenue Series 1992-B, 6.50% due 8/1/07 Baa/NR 512,615
1,500,000 Dona Ana County Gross Receipts Tax Refunding and Improvement Series 1993,
5.875% due 6/1/09 (Insured: Asset Guaranty) NR/AA 1,530,045
1,000,000 Dona Ana County Gross Receipts Tax, 6.00% due 6/1/14 (Insured: Asset Guaranty) NR/AA 1,002,460
330,000 Dona Ana County Subordinated Gross Receipts Tax Revenue, 6.125% due 6/1/03 NR/NR 320,021
260,000 Dona Ana County Subordinated Gross Receipts Tax Revenue, 6.25% due 6/1/04 NR/NR 251,534
510,000 Espanola Gross Receipts Tax Revenue, 7.10% due 3/1/02 (Insured: MBIA) Aaa/AAA 529,773
550,000 Espanola Gross Receipts Tax Revenue, 7.20% due 3/1/03 (Insured: MBIA) Aaa/AAA 571,813
750,000 Farmington Utility System Refunding Revenue, 5.20% due 5/15/00 (Insured: FGIC) Aaa/AAA 760,515
775,000 Gallup Pollution Control Revenue Refunding, 6.20% due 8/15/03 (Plains Electric
Generation Project; Insured: MBIA) Aaa/AAA 822,988
1,500,000 Gallup Pollution Control Revenue Refunding Series 1992, 6.45% due 8/15/06 (Insured: MBIA) Aaa/AAA 1,604,445
500,000 Gallup Sales Tax Revenue Sinking Fund Bonds, 6.75% due 6/1/06 (Insured: MBIA) Aaa/AAA 526,775
1,000,000 Guam Limited Obligation Highway Series 1992-A, 5.50% due 5/1/99
(Insured: FSA) NR/AAA 1,020,230
280,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due 7/1/00 NR/NR 287,848
300,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due 7/1/01 NR/NR 309,570
315,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due 7/1/02 NR/NR 325,360
2,500,000 Jicarilla Apache Tribe Tribal Refunding Revenue Bonds, 7.75% due 7/1/05 NR/A 2,530,900
1,175,000 Las Cruces Gross Receipts Refunding Revenue, 5.45% due 12/1/99 A/A 1,199,722
625,000 Las Cruces Gross Receipts Refunding Revenue, 5.85% due 12/1/01 A/A 649,719
1,500,000 Las Cruces Gross Receipts Refunding Revenue Series 1992, 6.25% due 12/1/05 A/A 1,567,050
420,000 Las Cruces Joint Utility Refunding and Improvement Revenue, 6.50% due 7/1/07 A1/NR 461,866
780,000 Las Cruces Joint Utility Refunding and Improvement Revenue, 6.50% due 7/1/07 A1/A 849,560
1,160,000 Las Cruces Municipal Sales Tax Revenue Series 1991, 6.50% due 12/1/06 A/NR 1,216,620
380,000 Las Cruces Gross Receipts Tax Revenue Series 1995, 6.00% due 6/1/01
(South Central Solid Waste Authority Project) NR/A 394,539
45,000 Lordsburg Gross Receipts and Lodgers Tax Revenue, 8.125% due 12/1/97 NR/NR 46,004
230,000 Lordsburg Gross Receipts and Lodgers Tax Revenue, 8.625% due 12/1/02 NR/NR 237,999
1,150,000 Lordsburg Pollution Control Revenue, 6.50% due 4/1/13 (Phelps Dodge Project) A2/A- 1,203,947
3,445,000 Los Alamos County Utility System Revenue Refunding Series A, 6.00% due 7/1/08
(Insured: FSA) Aaa/AAA 3,593,617
350,000 Milan General Obligation Sanitary Sewer Series 1994, 7.00% due 9/1/13 NR/NR 368,970
2,790,000 New Mexico Educational Assistance Foundation Revenue, 6.70% due 4/1/02
(Insured: AMBAC) Aaa/AAA 2,948,332
1,250,000 New Mexico Educational Assistance Foundation Revenue, 6.20% due 12/1/01 Aaa/NR 1,310,050
815,000 New Mexico Educational Assistance Foundation Revenue, 6.45% due 12/1/04 Aaa/NR 881,292
1,300,000 New Mexico Educational Assistance Foundation Revenue, 6.85% due 12/1/05 A/NR 1,330,121
250,000 New Mexico Educational Assistance Foundation Revenue, 5.20% due 12/1/01 Aaa/AAA 250,393
105,000 New Mexico Student Loan Revenue, 5.55% due 12/1/01 A/NR 106,671
2,755,000 New Mexico Educational Assistance Foundation Revenue, 6.65% due 3/1/07 Aaa/NR 2,825,115
975,000 New Mexico MFA MFHR Series 1991-C, 6.75% due 7/1/11 NR/AAA 995,972
1,400,000 New Mexico MFA MFHR Series 1991-C, 6.75% due 7/1/11 NR/AAA 1,430,114
45,000 New Mexico MFA SFMR Series A, 7.00% due 7/1/14 A1/A+ 30,656
2,043,526 New Mexico MFA SFMR Series A, 0.00% due 7/1/15 Aa/A+ 307,592
85,000 New Mexico MFA SFMR Series C, 7.80% due 7/1/99 (Insured: FGIC) Aaa/AAA 87,491
95,000 New Mexico MFA SFMR Series A, 6.50% due 3/1/98 AA-/NR 96,324
645,000 New Mexico MFA SFMR Series A-1, 6.05% due 1/1/00 Aa/AA 663,008
650,000 New Mexico MFA SFMR Series A-1, 6.05% due 7/1/00 Aa/AA 671,203
245,000 New Mexico MFA SFMR Series A-2, 6.20% due 1/1/01 Aa/AA 251,934
635,000 New Mexico MFA SFMR Series 1992-A-1, 6.30% due 1/1/02 Aa/AA 660,216
5,000,000 New Mexico MFA SFMR Series 1992-A-1, 6.85% due 7/1/10 Aa/AA 5,181,550
1,085,000 New Mexico MFA SFMR Series 1992-A-1, 6.90% due 7/1/08 NR/AAA 1,122,291
1,375,000 New Mexico State Severance Tax Refunding Series 1992-C, 5.30% due 7/1/97 Aa/AA 1,379,868
1,000,000 New Mexico State Severance Tax Refunding Series 1992-C, 5.60% due 7/1/02 Aa/AA 1,016,480
1,195,000 New Mexico Equipment Loan Council Hospital Revenue, 7.50% due 6/1/02
(San Juan Regional Medical Center, Inc. Project) A/NR 1,309,111
1,490,000 New Mexico Equipment Loan Council Hospital Revenue, 7.80% due 6/1/05,
(San Juan Regional Medical Center, Inc. Project) A/NR 1,652,023
225,000 New Mexico Equipment Loan Council Hospital Revenue, 7.90% due 6/1/11
(San Juan Regional Medical Center, Inc. Project) A/NR 248,164
575,000 New Mexico Equipment Loan Council Hospital Revenue, 7.80% due 6/1/06
(San Juan Regional Medical Center, Inc. Project) A/NR 634,346
2,030,000 New Mexico Hospital Equipment Loan Council Revenue, 6.40% due 6/1/09
(Memorial Medical Center Project) A/NR 2,123,000
390,000 New Mexico State University Revenue, 5.85% due 4/1/99 A1/AA 399,590
380,000 New Mexico State University Revenue, 5.85% due 4/1/00 A1/AA 391,666
335,000 New Mexico State University Revenue, 5.85% due 4/1/01 A1/AA 347,170
1,050,000 Northern Mariana Islands Ports Authority Airport Rev. Series 1987-B, 6.90% due 10/1/01 A2/NR 1,073,593
555,000 Northern Mariana Islands Ports Authority Airport Rev. Series 1987-B, 7.00% due 10/1/02 A2/NR 567,471
750,000 Puerto Rico Public Improvement Revenue, 6.60% due 7/1/04 Baa1/A 825,322
1,300,000 Puerto Rico Highway and Transportation Authority Highway Revenue, 5.70% due 7/1/98 Baa1/A 1,322,932
2,000,000 Puerto Rico Public Building Authority Revenue, 6.10% due 7/1/00 Baa1/A 2,073,060
1,500,000 Puerto Rico Electric Power Revenue Refunding Series 1992-Q, 5.70% due 7/1/00 Baa1/A 1,536,885
100,000 Questa Independent School Dist. #9 G.O. School Bldg. Series 7/1/87, 8.50% due 10/1/00 NR/NR 106,188
150,000 Rio Grande Natural Gas Association Natural Gas System Revenue, 5.00% due 7/1/00 Baa1/BBB+ 149,632
375,000 Rio Rancho Gross Receipts Tax Revenue Series 1995 A, 5.50% due 12/1/00 (Insured: CGIC) Aaa/AAA 384,461
440,000 Rio Rancho Gross Receipts Tax Revenue Series 1995 A, 5.50% due 12/1/03 (Insured: CGIC) Aaa/AAA 451,559
500,000 Rio Rancho Water and Wastewater System, 8.00% due 5/15/02 (Insured: FSA) Aaa/AAA 567,970
1,000,000 Rio Rancho Water & Wastewater Series 1995 A, 6.50% due 5/15/06 (Insured: FSA) Aaa/AAA 1,088,860
1,000,000 San Juan County Gross Receipts / Gasoline Tax Refunding Revenue Series 1994-B,
7.00% due 9/15/09, pre-refunded 9/15/04 @101 A/NR 1,134,770
115,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, 7.00% due 11/1/07 Baa1/NR 122,995
125,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, 7.00% due 11/1/08 Baa1/NR 133,383
135,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, 7.00% due 11/1/09 Baa1/NR 143,710
145,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, 7.00% due 11/1/10 Baa1/NR 154,355
340,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 7/1/01 (Escrowed to Maturity) NR/AAA 394,271
356,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 1/1/02 (Escrowed to Maturity) NR/AAA 417,634
372,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 7/1/02 (Escrowed to Maturity) NR/AAA 442,375
406,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 7/1/03 (Escrowed to Maturity) NR/AAA 494,147
443,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 7/1/04 (Escrowed to Maturity) NR/AAA 550,206
626,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 1/1/08 (Escrowed to Maturity) NR/AAA 816,899
500,000 Santa Fe Gross Receipts Tax Revenue & Improvement, 6.35% due 6/1/02 A1/AA 513,475
295,000 Santa Fe Housing Development Corporation Multifamily Revenue Refunding Series
1993-A, 5.50% due 2/1/04 (Villa Camino Consuela Project; Credit Support HUD 8) A/NR 298,829
1,000,000 Santa Fe Industrial Revenue Housing Refunding, 7.25% due 12/1/05
(Ponce de Leon Project; Guaranteed: Health Care REIT) NR/NR 1,015,200
250,000 Santa Fe Public School District, 5.20% due 6/15/98 A1/NR 253,373
325,000 Santa Fe Refuse Disposal System Revenue, 5.50% due 6/1/03 A/NR 329,550
370,000 Santa Fe Refuse Disposal System Improvement Net Rev Series 1996-B, 5.50% due 6/1/04 A/NR 374,555
1,900,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/02 (Insured: FGIC) Aaa/AAA 1,473,602
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/03 (Insured: FGIC) Aaa/AAA 1,428,466
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/04 (Insured: FGIC) Aaa/AAA 1,332,325
1,895,000 Santa Fe Improvement Revenue Series 1992-A ,0% due 7/1/05 (Insured: FGIC) Aaa/AAA 1,204,405
500,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/06 (Insured: FGIC) Aaa/AAA 294,860
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/11 (Insured: FGIC) Aaa/AAA 787,861
709,662 Santa Fe Single Family Mortgage Revenue Series 1991, 8.45% due 12/1/11 Aa/NR 751,660
780,000 Santa Fe Single Family Mortgage Revenue 5.25% due 11/1/05 (FNMA / GNMA guaranteed) AAA/NR 772,013
420,000 Santa Fe Single Family Mortgage Revenue 6.00% due 11/1/10 (FNMA / GNMA guaranteed) AAA/NR 413,045
675,000 Santa Fe Single Family Mortgage Revenue 6.20% due 11/1/16 (FNMA / GNMA guaranteed) AAA/NR 661,480
875,000 Santa Fe Solid Waste Management Facilites Revenue, 6.10% due 6/1/07 NR/NR 897,435
195,000 Santa Rosa Consolidated School District #8 Guadalupe and San Miguel Counties
General Obligation Series 1991, 7.00% due 8/1/03 Baa/NR 205,048
210,000 Santa Rosa Consolidated School District #8 Guadalupe and San Miguel Counties
General Obligation Series 1991, 7.00% due 8/1/04 Baa/NR 221,149
285,000 Socorro Health Facilities Refunding Revenue, 6.00% due 5/1/08, (Evangelical
Lutheran Good Samaritan Project; Insured: AMBAC) Aaa/AAA 297,968
1,830,000 Taos County Local Hospital Gross Receipts Tax Revenue
Series 1992, 6.125% due 12/1/01 (Insured: Asset Guaranty) NR/AA 1,905,872
295,000 Torrance County Environmental Revenue Series 1992, 6.875% due 6/1/03 NR/NR 295,997
100,000 University of New Mexico Higher Educational Revenue, 7.50% due 6/1/00 A1/AA 108,260
500,000 U.S. Virgin Islands Public Finance Authority, 7.70% due 10/1/04 Baa/BBB 535,800
1,000,000 U.S. Virgin Islands Public Finance Authority Revenue Refunding Series A,
6.90% due 10/1/01 NR/NR 1,054,740
330,000 U.S. Virgin Islands Public Finance Authority, Series 1992-A, 7.00% due 10/1/02 NR/NR 351,932
1,175,000 U.S. Virgin Islands Special Tax General Obligation Series 1991, 7.75% due 10/1/06
(Hugo Insurance Claims Fund Project) NR/NR 1,264,864
3,000,000 U.S. Virgin Islands Water & Power Authority Series A, 7.40% due 7/1/11 NR/NR 3,177,420
1,385,000 Western New Mexico University System Revenue Series 1995, 7.75% due 6/15/19 Baa/BBB 1,501,354
TOTAL INVESTMENTS (Cost $124,887,253) $129,242,600
+ Credit ratings are unaudited.
See notes to financial statement
</TABLE>
Thornburg Limited Term Municipal Fund - National Portfolio
LTMFX is an open end mutual fund which invests in a laddered portfolio of
municipal obligations from throughout the U.S. The Fund has an average
maturity of 5 years or less.
Thornburg Limited Term Municipal Fund - California Portfolio
LTCAX, a single state companion portfolio to LTMFX, offers California
investors double tax-free** yields in a laddered, short maturity portfolio.
The Fund has an average maturity of 5 years or less.
Thornburg Intermediate Municipal Fund.
THIMX is an open end mutual fund which invests in a laddered portfolio of
municipal obligations from throughout the U.S. The Fund has an
average maturity of 10 years or less.
Thornburg Florida Intermediate Municipal Fund
Thornburg Florida Intermediate Fund, a single state companion fund to THIMX,
offers Florida investors a balanced approach to double tax-free**
yields. The Fund has an average maturity of 10 years or less.
Thornburg New Mexico Intermediate Municipal Fund THNMX, a single state
companion fund to THIMX, offers New Mexico investors a balanced approach
to double tax-free** yields. The Fund has an average maturity of 10 years
or less.
Thornburg Limited Term U.S. Government Fund
LTUSX is an open end mutual
fund which invests in short to intermediate obligations issued by the
U.S. Government, its agencies or instrumentalities***. It has an average
maturity of 5 years or less. It is particularly suitable for your IRA,
Keogh Plan, Pension Plan, or Profit Sharing Plan.
Thornburg Limited Term Income Fund
THIFX is an open end mutual fund which
invests in a wide variety of taxable, investment grade, short to intermediate
obligations. The Fund keeps a weighted average maturity of 5 years or less. It
is also suitable for your IRA, Keogh Plan, Pension Plan, or Profit Sharing Plan.
Thornburg Value Fund A mutual fund that invests primarily in domestic equities
selected on a compelling value basis using traditional fundamental research
evaluation methods.
3yr 5yr 10yr
4 o 5 o 5 o
4 o 5 o 5 o
5 o 5 o N/A
4 o N/A N/A
4 o 4 o N/A
3 o 3 o N/A
3 o N/A N/A
N/A N/A N/A
SOURCE: Morningstar Advanced Analytics for Principia, 3/31/97. Morningstar
proprietary ratings are subject to change every month and are calculated from
the fund's 3-, 5- and
10- year average annual returns (when available) in excess of 90-day Treasury
bill returns with appropriate fee adjustment and a risk factor that reflects
fund performance below
90-day Treasury bill returns. 10% of the funds in an investment category
receive 5 stars, 22% receive 4 stars and 35% receive 3 stars.
*morningstar ratings only apply to a fund's Class A shares. Certain funds
also offer other classes of shares which are not rated. Those shares have
different expenses and
performance from Class A shares.
**Income from the municipal funds may be subject to state and local taxes
and/or (except LTMFX) the federal alternative minimum tax. Although it
reserves the right to do so in
the future, LTMFX does not currently invest in bonds subject to the alternative
tax.
*** The share price of the Fund is not guaranteed by the U.S. Government.
+Class C shares of the respective funds have only been offered since
September 1, 1994.
