Thornburg
New Mexico
Intermediate
Municipal Fund Annual Report
September 30, 1997
INVESTMENT MANAGER
Thornburg Management Company, Inc.
119 East Marcy Street
Santa Fe, NM 87501
(800) 847-0200
PRINCIPAL UNDERWRITER
Thornburg Securities Corporation
119 East Marcy Street
Santa Fe, NM 87501
(800) 847-0200
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information. Performance data
quoted represent past performance and are not indicative of future results.
<TABLE>
<CAPTION>
Thornburg New Mexico
Intermediate Municipal Fund
<S> <C>
Thornburg
New Mexico Intermediate
Municipal Fund
A Shares
SEC Yield 3.99%
Taxable Equiv. Yield 7.22%
NAV $13.28
Max. Offering Price $13.76
1 Year 2.82%
5 Year 5.18%
Since Inception 6.21%
(Inception date) ( 6/18/91)
</TABLE>
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 the 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
119 East Marcy Street, Santa Fe, New Mexico 87501 l (505) 984-0200
November 6, 1997
Dear Fellow Shareholder:
I am pleased to present the Annual Report for the Portfolio of Thornburg New
Mexico Intermediate Municipal Fund for the fiscal year ending September 30,
1997. The net asset value of the A shares increased 19 cents per share to $13.28
during the year. If you were with us for the entire period, you received
dividends of 64.2 cents per share. If you reinvested your dividends, you
received 65.7 cents per share.
Your Thornburg New Mexico Intermediate Municipal Fund portfolio currently holds
over 140 municipal obligations from borrowers in New Mexico and 3 U.S.
Territories. Approximately 91% 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
6.2 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 = 19% year 2 = 19%
2 to 4 years = 13% year 4 = 32%
4 to 6 years = 23% year 6 = 55%
6 to 8 years = 18% year 8 = 73%
8 to 10 years = 17% year 10 = 90%
10 to 12 years = 6% year 12 = 96%
12 to 14 years = 2% year 14 = 98%
14 to 16 years = 2% year 16 = 100%
Over the last year your average portfolio maturity has shortened a bit. The
passage of time shortened the largely stable beginning portfolio. We directed
portfolio cash flow and new money into the middle maturity range of your bond
ladder. Today we are managing the portfolio to keep the average maturity
approximately where it is. We will stick with this approach if interest rates
remain stable or decrease. If bond yields increase, we will likely extend the
average portfolio maturity to approximately nine years. This would permit us to
increase our income yields if higher yields are available.
For the past 3 years Americans have been net sellers of municipal and government
bonds. Investment dollars have flowed instead to equities, money market
investments, and overseas opportunities. A combination of sharp volatility in
equity markets worldwide and deflationary winds blowing from Asia appears to be
rekindling the appetite of U.S. investors for bond investing. The U.S. bond
market has played the role of "safe haven" for foreign investors for some time.
Perhaps it will assume that role for American investors, too!
We are all subject to more discussion than is necessary or productive about the
U.S. economy and Alan Greenspan. Leaving aside the month to month microanalysis
of each economic statistic, I believe any observer must be impressed by the
fundamental strength of the broad U.S. economy. More people than ever before are
working. Wages are firm. Tax receipts are off the charts! There will always be
dislocations here and there, but for the most part Americans are very, very
busy. The strong economy has generally been good for municipal New Mexico as
well, although in some respects we do not move in lock step with the rest of the
country. In its recent annual survey of city fiscal conditions, the National
League of Cities reported that two-thirds of U.S. cities say they are better
able to meet their financial needs this year than last. There is one possible
cloud: as Washington hands increasing responsibility for implementing mandated
programs to state and local governments, a few entities may have significant
problems managing through the transition.
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. Your fund has earned Morningstar's 4 star
overall rating for risk adjusted performance. The bond bulls are not worried
about risk now. They are recommending the purchase of very long maturity bonds
on the theory that inflation is dead and interest rates will drop further. We
will continue to seek the good balance of risk and return.
Thank you for investing in Thornburg New Mexico Intermediate Municipal Fund.
Sincerely,
Brian J. McMahon
Portfolio Manager
**Morningstar proprietary rating reflects historical risk adjusted performances
as of 9/30/97. Ratings are subject to change every month. Funds with at least
three years of performance history are assigned ratings from one star (lowest)
to five star (highest). Morningstar overall ratings are calculated from the
funds' three-, five-, and ten year average annual returns and a risk factor that
reflects fund performance relative to three month Treasury bill returns. 10% of
the funds in an investment category receive five stars and 22.5% receive four
stars. THNMX is ranked 4-Stars for the 3 year period and 4-Stars for the 5 year
period ending 9/30/97. At 9/30/97, there were 1,374 bond funds with 3-year
ratings and 668 with 5-year ratings in Morningstar's Municipal Single State
Intermediate category. Past performance is no guarantee of futuire results.
<TABLE>
<CAPTION>
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
September 30, 1997
ASSETS
<S> <C>
Investments, at value (cost $138,275,052) $ 144,965,168
Cash 72,015
Recivable for fund shares sold 139,907
Interest receivable 2,241,073
Prepaid expenses and other assets 504
TOTAL ASSETS 147,418,667
LIABILITIES
Payable for investments purchased 1,105,000
Payable for fund shares redeemed 48,352
Accounts payable and accrued expenses 136,542
Payable to investment adviser 69,568
Dividends payable 209,024
TOTAL LIABILITIES 1,568,486
NET ASSETS $ 145,850,181
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share
($145,850,181 applicable to 10,985,147 shares of
beneficial interest outstanding - Note 4) $13.28
Maximum sales charge, 3.50% of offering
price (3.63% of net asset value per share) .48
Maximum Offering Price Per Share $13.76
<FN>
See notes to financial statements.
</FN>
</TABLE>
<TABLE>
<CAPTION>
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
Year Ended September 30, 1997
INVESTMENT INCOME
<S> <C>
Interest income (net of premium amortized
of $311,606) $ 7,857,338
EXPENSES
Investment advisory fees (Note 3) 668,697
Administration fees (Note 3) 167,174
Service fees (Note 3) 328,762
Custodian fees 98,597
Transfer agent fees 79,918
Professional fees 25,113
Accounting fees 13,424
Trustee fees 5,384
Registration and filing fees 699
Other expenses 11,378
TOTAL EXPENSES 1,399,146
Less:
Expenses reimbursed by investment adviser (Note 3) (61,752)
NET EXPENSES 1,337,394
NET INVESTMENT INCOME 6,519,944
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS (NOTE 5)
Net realized gain on investments sold 47,136
Increase in unrealized appreciation of investments 1,882,098
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS 1,929,234
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 8,449,178
<FN>
See notes to financial statements.
</FN>
</TABLE>
<TABLE>
<CAPTION>
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
<S> <C> <C>
Year Ended Year Ended
September 30, 1997 September 30, 1996
INCREASE (DECREASE) IN
NET ASSETS FROM:
OPERATIONS:
Net investment income $6,519,944 $6,381,032
Net realized gain (loss) on investments sold 47,136 (21,671)
Increase (decrease) in unrealized
appreciation of investments 1,882,098 (320,678)
NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS 8,449,178 6,038,683
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares (6,519,944) (6,378,163)
Class C Shares -- (2,869)
FUND SHARE TRANSACTIONS-- (Note 4)
Class A Shares 12,614,019 (5,090,560)
Class C Shares -- (143,365)
NET INCREASE (DECREASE) IN NET ASSETS 14,543,253 (5,576,274)
NET ASSETS:
Beginning of year 131,306,928 136,883,202
End of year $145,850,181 $131,306,928
<FN>
See notes to financial statements.
</FN>
</TABLE>
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". 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 six
classes of shares of beneficial interest in addition to those of the Fund:
Thornburg Florida Intermediate Municipal Fund, Thornburg New York 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 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 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 (iii) 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. 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, 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 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 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 year ended September 30, 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 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 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 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.
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.
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 year ended September 30,
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, depending on the Fund's asset
size. The Fund also has 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. For the year ended September 30, 1997, the
Adviser voluntarily reimbursed certain operating expenses amounting to $61,752.
The Fund has an underwriting agreement with Thornburg Securities Corporation
(the "Distributor"), which acts as the Distributor of Fund shares. For the year
ended September 30, 1997, the Distributor earned commissions aggregating $37,140
from the sale of Class A shares.
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 average net assets attributable to each class of shares of the
Fund 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 trustees is borne
by the Trust.
Note 4 - SHARES OF BENEFICIAL INTEREST:
At September 30, 1997, there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $139,870,441.
Transactions in shares of beneficial interest were as follows:
<TABLE>
<S> <C> <C> <C> <C>
Year Ended Year Ended
September 30, 1997 September 30, 1996
Class A Shares Share Amount Shares Amount
Shares sold 2,547,704 $33,589,237 1,300,328 $17,051,801
Shares issued to shareholders
in reinvestment of
distributions 311,386 4,074,878 320,921 4,210,070
Shares repurchased (1,904,494) (25,050,096) (2,011,202) (26,352,431)
Net Increase (Decrease) 954,596 $12,614,019 (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)
</TABLE>
Note 5 - SECURITIES TRANSACTIONS
For the year ended September 30, 1997, the Fund had purchase and sale
transactions (excluding short-term securities) of $20,196,571 and $13,122,778,
respectively.
The cost of investments for Federal income tax purposes is $138,303,130. At
September 30, 1997, net unrealized appreciation of investments was $6,662,038,
resulting from $6,710,252 gross unrealized appreciation and $48,214 gross
unrealized depreciation.
Accumulated net realized losses from securities transactions included in net
assets at September 30, 1997 aggregated $710,376.
For tax purposes, the Fund has realized capital loss carryforwards of $681,637
as of September 30, 1997 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, 2003 - $126,738, and
September 30, 2004 - $554,899.
<TABLE>
<CAPTION>
Thornburg New Mexico Intermediate Municipal Fund
Per share operating performance
(for a share outstanding
throughout the year)
Year Ended September 30,
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1994 1993
Class of Shares: A A A A A
Net asset value, beginning of year $13.09 $13.12 $12.72 $13.36 $12.64
Income from investment operations:
Net investment income .64 .63 .60 .60 .65
Net realized and unrealized
gain (loss) on investments .19 (.03) .40 (.63) .72
Total from investment operations .83 .60 1.00 (.03) 1.37
Less dividends from:
Net investment income (.64) (.63) (.60) (.60) (.65)
Realized capital gains -- -- -- (.01) --
Change in net asset value .19 (.03) .40 (.64) .72
Net asset value, end of year $13.28 $13.09 $13.12 $12.72 $13.36
Total return (a) 6.51% 4.68% 8.10% (.26%) 10.96%
Ratios/Supplemental Data Ratios to average net assets:
Net investment income 4.88% 4.81% 4.71% 4.58% 4.95%
Expenses, after expense reductions 1.00% 1.00% 1.00% .90% .61%
Expenses, before expense reductions 1.05% 1.07% 1.06% 1.04% 1.01%
Portfolio turnover rate 10.06% 10.88% 17.06% 6.87% 10.33%
Net assets
at end of year(000) $145,850 $131,307 $136,742 $143,910 $128,590
<FN>
(a) Sales loads are not reflected in computing total return.
Note: From September 1, 1994 to September 28,1995 the Fund issued class B
shares, which at the time of their conversion to Class A shares on September 28,
1995 represented less than 1% of the Fund's net assets.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Thornburg New Mexico Intermediate Municipal Fund
<S> <C> <C> <C>
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
Class of Shares: C* C C
Net asset value, beginning of period $13.12 $12.71 $12.87
Income from investment operations:
Net investment income .19 .52 .04
Net realized and unrealized
gain (loss) on investments .15 .41 (.16)
Total from investment operations .34 .93 (.12)
Less distributions from:
Net investment income (.19) (.52) (.04)
Change in net asset value .15 .41 (.16)
Net asset value, end of period $13.27 $13.12 $12.71
Total return (b) 2.57% 7.48% (.90%)
Ratios/Supplemental Data Ratios to average net assets:
Net investment income 4.22%(c) 4.05% 3.49%(c)
Expenses, after expense reductions 1.40%(c) 1.66% 1.74%(c)
Expenses, before expense reductions 13.03%(c) 15.86% 21.92%(c)
Portfolio turnover rate 10.88% 17.06% 6.87%
Net assets
at end of period (000) $0 $141 $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 January 31, 1996, all Class C shares were converted into Class A shares.
</FN>
</TABLE>
<TABLE>
<CAPTION>
s c h e d u l e o f i n v e s t m e n t s
Thornburg New Mexico Intermediate Municipal Fund
September 30, 1997 CUSIP: Class A - 885-215-301;
NASDAQ Symbol: Class A - THNMX
<S> <C> <C> <C>
Principal Credit Rating+
Amount Issuer-Description Moody's/S&P Value
$896,000 Albuquerque Mortgage Obligation Revenue Series B-2, 0% due 5/15/11 (Insured: FGIC) Aaa/AAA $354,108
50,000 Albuquerque Gross Receipts Tax Revenue, 6.20% due 7/1/05 Aaa/AAA 54,025
1,000,000 Albuquerque Gross Receipts Tax Revenue, 5.375% due 7/1/01 (Bluewater Apartments Project) NR/NR 1,005,800
1,280,000 Albuquerque Gross Receipts and Lodger's Tax, 0% due 7/1/02 (Insured: FSA) Aaa/AAA 1,036,954
1,520,000 Albuquerque Gross Receipts and Lodger's Tax, 0% due 7/1/03 (Insured: FSA) Aaa/AAA 1,174,702
2,035,000 Albuquerque Gross Receipts and Lodger's Tax, 0% due 7/1/05 (Insured: FSA) Aaa/AAA 1,421,692
2,000,000 Albuquerque Gross Receipts and Lodger's Tax, 0% due 7/1/12 (Insured: FSA) Aaa/AAA 913,880
500,000 Albuquerque Gross Receipts and Lodger's Tax, 3.45% due 7/1/22, put 10/7/97
(weekly demand notes) (LOC: Canadian Imperial Bank) Aa3/AA 500,000
200,000 Albuquerque Gross Receipts and Lodger's Tax, 4.15% due 7/1/23, put 10/7/97
(weekly demand notes) (LOC: Canadian Imperial Bank) Aa3/AA 200,000
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 1,079,730
300,000 Albuquerque Hospital Revenue, 6.625% due 5/15/10
(St. Joseph's Health Care Project; Insured: MBIA) Aaa/AAA 326,148
2,000,000 Albuquerque Hospital Revenue Series 1992, 5.60% due 8/1/99 (Insured: MBIA) Aaa/AAA 2,054,560
335,000 Albuquerque Hospital Revenue Series A, 5.80% due 8/1/00
(Presbyterian Health Care Project; Insured: MBIA) Aaa/AAA 349,171
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 2,687,650
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 1,066,686
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 1,825,694
2,400,000 Albuquerque Industrial Development Revenue Bond, Series 1997, 5.80% due 6/1/07
(Universal Printing and Publishing; LOC: First Security Bank) A1/NR 2,448,864
1,000,000 Albuquerque Water and Sewer System Revenue Refunding Series B, 6.95% due 7/1/02 A1/AA 1,087,440
1,500,000 Albuquerque Water and Sewer Revenue, 7.00% due 7/1/03 A1/AA 1,633,095
1,750,000 Albuquerque Water and Sewer Revenue Series 1990-C, 7.00% due 7/1/05 NR/AA 1,894,305
600,000 Albuquerque Water and Sewer Revenue, 6.25% due 7/1/08 A1/AA 649,308
1,210,000 Albuquerque MFHR Series 1991, 8.50% due 7/1/21, put 7/1/01 (Beach Apartments Project) NR/NR 1,241,194
2,955,000 Albuquerque MFHR Series 1994, 6.75% due 1/1/24, put 1/1/04 (Dorado Village Project) NR/AAA 2,929,469
250,000 Albuquerque Refuse Removal and Disposal Rev., 6.80% due 7/1/98 (Insured: AMBAC) Aaa/AAA 255,450
290,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.00% due 6/1/01
(Evangelical Lutheran Good Samaritan Society Project; Insured: FSA) Aaa/AAA 297,598
305,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.10% due 6/1/02
(Evangelical Lutheran Good Samaritan Society Project; Insured: FSA) Aaa/AAA 315,074
170,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.20% due 6/1/03
(Evangelical Lutheran Good Samaritan Society Project; Insured: FSA) Aaa/AAA 176,834
995,000 Albuquerque Special Assessment District Series A, 6.45% due 1/1/15
(Cottonwood Mall Project; LOC: Sumitomo Bank) NR/A+ 997,945
125,000 Albuquerque Special Assessment District No. 219 Series B, 5.65% due 7/1/01
(Water and Sewer Improvement Project; LOC: Sumitomo Bank) NR/A 125,199
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 405,591
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 4,758,840
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 2,383,559
500,000 Bloomfield Gross Receipts Tax Revenue Series 1992-B, 6.50% due 8/1/07 Baa/NR 519,585
415,000 Cibola County Gross Receipts Tax Revenue, 5.70% due 11/1/07 (Insured: AMBAC) Aaa/AAA 447,665
495,000 Cibola County Gross Receipts Tax Revenue, 5.875% due 11/1/08 (Insured: AMBAC) Aaa/AAA 540,758
555,000 Cibola County Gross Receipts Tax Revenue, 6.00% due 11/1/10 (Insured: AMBAC) Aaa/AAA 609,490
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 1,589,505
1,000,000 Dona Ana County Gross Receipts Tax, 6.00% due 6/1/14 (Insured: Asset Guaranty) NR/AA 1,037,820
330,000 Dona Ana County Subordinated Gross Receipts Tax Revenue, 6.125% due 6/1/03 NR/NR 333,495
260,000 Dona Ana County Subordinated Gross Receipts Tax Revenue, 6.25% due 6/1/04 NR/NR 263,112
510,000 Espanola Gross Receipts Tax Revenue, 7.10% due 3/1/02 (Insured: MBIA) Aaa/AAA 522,158
550,000 Espanola Gross Receipts Tax Revenue, 7.20% due 3/1/03 (Insured: MBIA) Aaa/AAA 563,338
1,015,000 Farmington Hospital Revenue Bonds, 5.00% due 6/1/01
(San Juan Regional Medical Center; Insured: AMBAC) Aaa/AAA 1,039,167
6,850,000 Farmington Pollution Control Series 1994, 3.80% due 9/01/24, put 10/1/97
(daily demand note) (Insured: Barclays) P-1/A-1+ 6,850,000
750,000 Farmington Utility System Refunding Revenue, 5.20% due 5/15/00 (Insured: FGIC) Aaa/AAA 769,545
775,000 Gallup Pollution Control Revenue Refunding, 6.20% due 8/15/03
(Plains Electric Generation Project; Insured: MBIA) Aaa/AAA 844,393
1,500,000 Gallup Pollution Control Revenue Refunding Series 1992, 6.45% due 8/15/06 (Insured: MBIA Aaa/AAA 1,646,655
500,000 Gallup Sales Tax Revenue Sinking Fund Bonds, 6.75% due 6/1/06 (Insured: MBIA) Aaa/AAA 527,310
1,000,000 Guam Limited Obligation Highway Series 1992-A, 5.50% due 5/1/99
(Insured: FSA) NR/AAA 1,022,640
280,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due 7/1/00 NR/NR 292,659
300,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due 7/1/01 NR/NR 316,797
315,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due 7/1/02 NR/NR 335,434
2,500,000 Jicarilla Apache Tribe Tribal Refunding Revenue Bonds, 7.75% due 7/1/05 NR/A 2,531,225
1,175,000 Las Cruces Gross Receipts Refunding Revenue, 5.45% due 12/1/99 A/A 1,207,783
625,000 Las Cruces Gross Receipts Refunding Revenue, 5.85% due 12/1/01 A/A 660,844
1,500,000 Las Cruces Gross Receipts Refunding Revenue Series 1992, 6.25% due 12/1/05 A/A 1,605,180
420,000 Las Cruces Joint Utility Refunding and Improvement Revenue, 6.50% due 7/1/07 A1/NR 479,976
780,000 Las Cruces Joint Utility Refunding and Improvement Revenue, 6.50% due 7/1/07 A1/A 864,669
1,160,000 Las Cruces Municipal Sales Tax Revenue Series 1991, 6.50% due 12/1/06 A/NR 1,233,150
380,000 Las Cruces Gross Receipts Tax Revenue Series 1995, 6.00% due 6/1/01
(South Central Solid Waste Authority Project) NR/A 399,186
45,000 Lordsburg Gross Receipts and Lodgers Tax Revenue, 8.125% due 12/1/97 NR/NR 45,261
230,000 Lordsburg Gross Receipts and Lodgers Tax Revenue, 8.625% due 12/1/02 NR/NR 233,809
1,150,000 Lordsburg Pollution Control Revenue, 6.50% due 4/1/13 (Phelps Dodge Project) A2/A- 1,233,225
3,445,000 Los Alamos County Utility System Revenue Refunding Series A, 6.00% due 7/1/08
(Insured: FSA) Aaa/AAA 3,732,830
350,000 Milan General Obligation Sanitary Sewer Series 1994, 7.00% due 9/1/13 NR/NR 376,110
2,870,000 New Mexico Educational Assistance Foundation Revenue, 6.70% due 4/1/02
(Insured: AMBAC) Aaa/AAA 3,044,381
400,000 New Mexico Educational Assistance Foundation Revenue, 6.05% due 12/1/00 Aaa/NR 411,076
1,000,000 New Mexico Educational Assistance Foundation Revenue, 6.20% due 12/1/01 Aaa/NR 1,039,620
655,000 New Mexico Educational Assistance Foundation Revenue, 6.45% due 12/1/04 Aaa/NR 688,156
1,040,000 New Mexico Educational Assistance Foundation Revenue, 6.85% due 12/1/05 A/NR 1,108,734
145,000 New Mexico Educational Assistance Foundation Revenue, 5.20% due 12/1/01 Aaa/AAA 147,652
105,000 New Mexico Student Loan Revenue, 5.55% due 12/1/01 A/NR 107,498
2,340,000 New Mexico Educational Assistance Foundation Revenue, 6.65% due 3/1/07 Aaa/NR 2,493,130
750,000 New Mexico Educational Assistance Foundation Revenue, 5.50% due 11/1/03 A/NR 761,182
970,000 New Mexico MFA MFHR Series 1991-C, 6.75% due 7/1/11 NR/AAA 981,494
1,390,000 New Mexico MFA MFHR Series 1991-C, 6.75% due 7/1/11 NR/AAA 1,406,471
325,000 New Mexico MFA SFMR Series A, 7.00% due 7/1/14 A1/A+ 225,063
1,751,594 New Mexico MFA SFMR Series A, 0% due 7/1/15 Aa/A+ 284,722
85,000 New Mexico MFA SFMR Series C, 7.80% due 7/1/99 (Insured: FGIC) Aaa/AAA 87,350
95,000 New Mexico MFA SFMR Series A, 6.50% due 3/1/98 Aa/NR 95,721
580,000 New Mexico MFA SFMR Series A-1, 6.05% due 1/1/00 Aa/AA 595,904
585,000 New Mexico MFA SFMR Series A-1, 6.05% due 7/1/00 Aa/AA 604,387
245,000 New Mexico MFA SFMR Series A-2, 6.20% due 1/1/01 Aa/AA 252,784
590,000 New Mexico MFA SFMR Series 1992-A-1, 6.30% due 1/1/02 Aa/AA 616,019
4,615,000 New Mexico MFA SFMR Series 1992-A-1, 6.85% due 7/1/10 Aa/AA 4,845,796
1,060,000 New Mexico MFA SFMR Series 1992-A-1, 6.90% due 7/1/08 NR/AAA 1,111,590
3,000,000 New Mexico State Tax & Revenue Anticipation Notes, 4.50% due 6/30/98 MIG1/SP1+ 3,015,600
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 1,343,873
1,490,000 New Mexico Equipment Loan Council Hospital Revenue, 7.80% due 6/1/05, prerefunded 6/1/01
(San Juan Regional Medical Center, Inc. Project) A/NR 1,690,643
225,000 New Mexico Equipment Loan Council Hospital Revenue, 7.90% due 6/1/11, prerefunded 6/1/01
(San Juan Regional Medical Center, Inc. Project) A/NR 256,054
575,000 New Mexico Equipment Loan Council Hospital Revenue, 7.80% due 6/1/06, prerefunded 6/1/01
(San Juan Regional Medical Center, Inc. Project) A/NR 652,429
2,030,000 New Mexico Hospital Equipment Loan Council Revenue, 6.40% due 6/1/09
(Memorial Medical Center Project) A/NR 2,234,604
390,000 New Mexico State University Revenue, 5.85% due 4/1/99 A1/AA 400,191
380,000 New Mexico State University Revenue, 5.85% due 4/1/00 A1/AA 394,748
335,000 New Mexico State University Revenue, 5.85% due 4/1/01 A1/AA 351,830
1,050,000 Northern Mariana Islands Ports Authority Airport Rev. Series 1987-B, 6.90% due 10/1/01 A2/NR 1,068,322
555,000 Northern Mariana Islands Ports Authority Airport Rev. Series 1987-B, 7.00% due 10/1/02 A2/NR 564,735
750,000 Puerto Rico Public Improvement Revenue, 6.60% due 7/1/04 Baa1/A 838,058
1,300,000 Puerto Rico Highway and Transportation Authority Highway Revenue, 5.70% due 7/1/98 Baa1/A 1,317,537
2,000,000 Puerto Rico Public Building Authority Revenue, 6.10% due 7/1/00 Baa1/A 2,098,200
1,500,000 Puerto Rico Electric Power Revenue Refunding Series 1992-Q, 5.70% due 7/1/00 Baa1/A 1,558,200
100,000 Questa Independent School Dist. #9 G.O. School Bldg., 8.50% due 10/1/00 NR/NR 104,459
150,000 Rio Grande Natural Gas Association Natural Gas System Revenue, 5.00% due 7/1/00 Baa1/BBB+ 151,950
375,000 Rio Rancho Gross Receipts Tax Revenue Series 1995-A, 5.50% due 12/1/00 (Insured: FSA) Aaa/AAA 389,302
440,000 Rio Rancho Gross Receipts Tax Revenue Series 1995-A, 5.50% due 12/1/03 (Insured: FSA) Aaa/AAA 464,658
500,000 Rio Rancho Water and Wastewater System, 8.00% due 5/15/02 (Insured: FSA) Aaa/AAA 574,775
1,000,000 Rio Rancho Water & Wastewater Series 1995-A, 6.50% due 5/15/06 (Insured: FSA) Aaa/AAA 1,131,670
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 1,161,490
1,000,000 San Juan County Central Consolidated School District # 22, 5.625% due 8/15/02 (Insured: Aaa/AAA 1,059,010
115,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, 7.00% due 11/1/07 Baa1/NR 125,480
125,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, 7.00% due 11/1/08 Baa1/NR 136,099
135,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, 7.00% due 11/1/09 Baa1/NR 146,671
145,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, 7.00% due 11/1/10 Baa1/NR 157,535
340,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 7/1/01 (Escrowed to Maturity) NR/AAA 395,695
356,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 1/1/02 (Escrowed to Maturity) NR/AAA 420,208
372,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 7/1/02 (Escrowed to Maturity) NR/AAA 446,218
406,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 7/1/03 (Escrowed to Maturity) NR/AAA 500,894
443,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 7/1/04 (Escrowed to Maturity) NR/AAA 559,403
626,000 Santa Fe County Office and Training Facilities Project Revenue
Series 1990, 9.00% due 1/1/08 (Escrowed to Maturity) NR/AAA 839,892
500,000 Santa Fe Gross Receipts Tax Revenue & Improvement, 6.35% due 6/1/02 A1/AA 508,515
275,000 Santa Fe Housing Development Corporation Multifamily Revenue Refunding Series
1993-A, 5.50% due 2/1/04 (Villa Camino Consuela Project) A/NR 281,619
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 1,040,910
250,000 Santa Fe Public School District, 5.20% due 6/15/98 A1/NR 252,430
325,000 Santa Fe Refuse Disposal System Revenue, 5.50% due 6/1/03 A/NR 337,951
370,000 Santa Fe Refuse Disposal System Improvement Net Rev Series 1996-B, 5.50% due 6/1/04 A/NR 384,819
1,900,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/02 (Insured: FGIC) Aaa/AAA 1,539,228
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/03 (Insured: FGIC) Aaa/AAA 1,501,910
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/04 (Insured: FGIC) Aaa/AAA 1,396,238
1,895,000 Santa Fe Improvement Revenue Series 1992-A ,0% due 7/1/05 (Insured: FGIC) Aaa/AAA 1,265,708
500,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/06 (Insured: FGIC) Aaa/AAA 310,445
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/11 (Insured: FGIC) Aaa/AAA 828,414
610,875 Santa Fe Single Family Mortgage Revenue Series 1991, 8.45% due 12/1/11 Aa/NR 654,669
780,000 Santa Fe Single Family Mortgage Revenue 5.25% due 11/1/05 (FNMA / GNMA Guaranteed) AAA/NR 784,040
420,000 Santa Fe Single Family Mortgage Revenue 6.00% due 11/1/10 (FNMA / GNMA Guaranteed) AAA/NR 425,271
675,000 Santa Fe Single Family Mortgage Revenue 6.20% due 11/1/16 (FNMA / GNMA Guaranteed) AAA/NR 701,291
875,000 Santa Fe Solid Waste Management Facilites Revenue, 6.10% due 6/1/07 NR/NR 941,062
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 205,280
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 221,355
285,000 Socorro Health Facilities Refunding Revenue, 6.00% due 5/1/08,
(Evangelical Lutheran Good Samaritan Project; Insured: AMBAC) Aaa/AAA 308,949
1,665,000 Taos County Local Hospital Gross Receipts Tax Revenue Series 1992, 6.125% due 12/1/01
(Insured: Asset Guaranty) NR/AA 1,760,221
270,000 Torrance County Environmental Revenue Series 1992, 6.875% due 6/1/03 NR/NR 276,653
100,000 University of New Mexico Higher Educational Revenue, 7.50% due 6/1/00 A1/AA 107,580
1,105,000 Villa Hermosa Multi Family Housing Revenue, 5.85% due 11/20/16 (GNMA Guaranteed) NR/AAA 1,114,216
500,000 U.S. Virgin Islands Public Finance Authority, 7.70% due 10/1/04 Baa/BBB 533,990
1,000,000 U.S. Virgin Islands Public Finance Authority Revenue Refunding Series A,
6.90% due 10/1/01 NR/NR 1,079,050
330,000 U.S. Virgin Islands Public Finance Authority, Series 1992-A, 7.00% due 10/1/02 NR/NR 361,795
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 1,289,527
2,885,000 U.S. Virgin Islands Water & Power Authority Series A, 7.40% due 7/1/11 NR/NR 3,117,358
1,385,000 Western New Mexico University System Revenue Series 1995, 7.75% due 6/15/19,
prerefunded 6/15/04 Baa/NR 1,650,172
TOTAL INVESTMENTS (Cost $138,275,052) $144,965,168
<FN>
+ Credit ratings are unaudited.
See notes to financial statements.
</FN>
</TABLE>
i n d e p e n d e n t a u d i t o r ' s r e p o r t
To the Board of Trustees and Shareholders
Thornburg New Mexico Intermediate Municipal Fund
Santa Fe, New Mexico
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Thornburg New Mexico Intermediate Municipal
Fund, series of Thornburg Investment Trust as of September 30, 1997; the related
statement of operations, the statement of changes in net assets, and the
financial highlights for the periods indicated. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Thornburg New Mexico Intermediate Municipal Fund as of September 30, 1997, the
results of its operations, the changes in its net assets and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles.
