Thornburg Florida Intermediate Municipal Fund
Fund facts. . . as of 9/30/98
Thornburg
Florida Intermediate
Municipal Fund
A Shares
SEC Yield 3.85%
Taxable Equiv. Yields 6.57%
NAV $12.37
Max. Offering Price $12.82
Total returns. . . as of 9/30/98
(Annual Average - After Subtracting Maximum Sales Charge)
One Year 2.89%
Three Year 5.08%
Since Inception 4.79%
Inception Date (2/1/94)
The taxable equivalent yield assumes a 39.6% marginal federal tax rate and a
0.2% intangible tax.
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 April 30,
1996.
The data quoted represent past performance and may not be construed as a
guarantee of future results.
Letter to shareholders
November 6, 1998
Dear Shareholder,
We are pleased to present the Annual Report for the Florida Portfolio of
Thornburg Intermediate Municipal Fund for the fiscal year ending September 30,
1998. The net asset value increased 23 cents per share to $12.37 during the
year. If you were with us for the entire period, you received dividends of 55.6
cents per share. If you reinvested your dividends, you received 56.7 cents per
share. Your Thornburg Florida Intermediate Municipal Fund portfolio currently
holds over 50 municipal obligations from Florida municipal borrowers.
Approximately 82% 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 8.5 years,
and we always keep it below 10 years. Percentages of the portfolio maturing in
the coming years are summarized below:
% of portfolio Cumulative %
maturing within maturing by end of
2 years = 8% year 2 = 8%
2 to 4 years = 8% year 4 = 16%
4 to 6 years = 14% year 6 = 30%
6 to 8 years = 19% year 8 = 49%
8 to 10 years = 17% year 10 = 66%
10 to 12 years = 8% year 12 = 74%
12 to 14 years = 9% year 14 = 83%
14 to 16 years = 7% year 16 = 90%
16 to 18 years = 9% year 18 = 99%
Over 18 years = 1%
Over the last year your average portfolio maturity has increased slightly. The
passage of time shortened the maturities of the bonds we owned at the beginning
of the year. Until mid-summer, we directed portfolio cash flow and new money
into the longer half of your bond ladder, taking advantage of the plentiful
supply and good selection of new municipal bonds coming to market this year.
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 slightly extend the average portfolio
maturity. This would permit us to increase our dividend yields if higher yields
are available. For the past 4 years Americans have been net sellers of municipal
and government bonds. Investment dollars have flowed instead to equities, money
market investments, and (until recently) overseas opportunities. A combination
of sharp volatility in equity markets worldwide and deflationary winds blowing
from Asia may be rekindling the appetite of U.S. investors for bond investing,
although the money flows to the U.S. bond market are not yet significant from
domestic investors. If the Federal Reserve cuts short term interest rates again
in the coming months, some of the money now flowing into money market funds* may
begin to move to intermediate and longer maturity bonds. Assets of these money
market funds now total over $1.3 trillion! As the accompanying graph shows, long
term interest rates dropped considerably in the last year in anticipation of an
economic slowdown and an expected drop in short term interest rates. Since
September 30, short maturity interest rates have fallen further, while very long
maturity rates have increased slightly. Yields on Florida bonds were slightly
lower than those shown above for the U.S. municipal bond market as a whole. Any
observer must be impressed by the fundamental strength of the broad U.S.
economy, and of Florida's. More people than ever before are working. Wages are
firm. But tax receipts are beginning to slow down, and government spending is
accelerating. Taken as a whole, U.S. cities continue to increase their financial
reserves for the fifth consecutive year. Most states report similar favorable
news, but there is one possible cloud: if the U.S. economy slows as state and
local government spending accelerates, some entities will not manage the
transition smoothly. If the current strength of the U.S. economy persists, we
expect long maturity interest rates to increase in 1999. If our economy slows,
short maturity bond rates and money market interest rates will quickly drop. We
believe the U.S. economy will not go down without a fight. Over the years, our
practice of laddering a diversified portfolio of short and intermediate maturity
bonds has allowed your fund to consistently perform well in varying interest
rate environments. Your fund has earned Morningstar's 4 star overall rating**
for risk adjusted performance. We would like to attribute this to capable
execution of a sensible investment strategy over time. Thank you for investing
in Thornburg Florida Intermediate Municipal Fund. Sincerely,
Brian J. McMahon George T. Strickland
Portfolio Manager Portfolio Manager
*Money market funds strive to keep a stable net asset value. The net asset value
of the fund can and does fluctuate.
**Morningstar proprietary rating reflects historical risk adjusted performances
as of 9/30/98. 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 stars (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. THFLX is ranked 4 stars for the 3 year period ending 9/30/98. At 9/30/98,
there were 1581 bond funds with 3-year ratings in Morningstar's Municipal Single
State Intermediate category. Past performance cannot guarantee future results.
Statement of assets and liabilities
Thornburg Florida Intermediate Municipal Fund
September 30, 1998
ASSETS
Investments at value (cost $27,675,150) $ 29,041,514
Cash 40,425
Receivable for fund shares sold 60,633
Interest receivable 519,624
Prepaid expenses and other assets 520
Total Assets 29,662,716
LIABILITIES
Payable for investments purchased 1,433,923
Accounts payable and accrued expenses 55,846
Payable to investment advisor 12,303
Payable for fund shares sold 7,000
Dividends payable 63,093
Total Liabilities
1,572,165
NET ASSETS $ 28,090,551
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share ($28,090,551
applicable to 2,271,176 shares of beneficial interest
outstanding - Note 4) $ 12.37
Maximum sales charge, 3.50 % of offering
price (3.63% of net asset value per share) 0.45
Maximum Offering Price Per Share $ 12.82
See notes to financial statements.
Statement of operations
Thornburg Florida Intermediate Municipal Fund
Year Ended September 30, 1998
INVESTMENT INCOME:
Interest income (net of premium amortized of $101,249) $ 1,460,144
EXPENSES:
Investment advisory fees (Note 3) 132,113
Administration fees (Note 3) 33,028
Service fees (Note 3) 61,932
Transfer agent fees 20,934
Custodian fees 27,375
Professional fees 7,616
Trustee fees 516
Other expenses 8,639
Total Expenses 292,153
Less:
Expenses reimbursed by investment advisor (Note 3) (32,255)
Net Expenses 259,898
Net Investment Income 1,200,246
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 5)
Net Realized gain on investments sold 829
Increase in unrealized appreciation of investments 521,930
Net Realized And Unrealized Gain On Investments 522,759
Net Increase In Net Assets Resulting From Operations $ 1,723,005
See notes to financial statements.
Statement of changes in net assets
Year Ended Year Ended
September 30, 1998 September 30, 1997
INCREASE (DECREASE) IN
NET ASSETS FROM:
OPERATIONS:
Net investment income $ 1,200,246 $ 1,081,089
Net realized gain (loss) on investments sold 829 (12,081)
Increase in unrealized appreciation of investment 521,930 472,555
Net Increase In Assets Resulting From Operations 1,723,005 1,541,563
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares (1,200,246) (1,081,089)
FUND SHARE TRANSACTIONS - (Note 4):
Class A Shares 2,904,944 4,701,115
Net Increase In Net Assets 3,427,703 5,161,589
NET ASSETS:
Beginning of year 24,662,848 19,501,259
End of year $ 28,090,551 $ 24,662,848
See notes to financial statements.
Notes to financial statements
September 30, 1998
Note 1 - Organization
Thornburg Florida 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 seven
series of shares of beneficial interest in addition to those of the Fund:
Thornburg New Mexico 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, Thornburg
Value Fund, and Thornburg Global 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 April
30, 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.
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, 1998 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 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.
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,
1998, 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, 1998, the
Adviser voluntarily reimbursed certain operating expenses amounting to $32,255.
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, 1998, the Distributor earned commissions aggregating $11,198
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 unaffilliated trustees is borne by the Trust.
Note 4 - Shares of Beneficial Interest
At September 30, 1998 there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $26,875,597. Transactions
in shares of beneficial interest were as follows:
Yr Ended Sept 30, 1998 Yr Ended Sept 30, 1997
Class A Shares Shares Amount Shares Amount
Shares sold 1,756,020 $21,482,186 2,459,475 $ 29,388,952
Shares issued to shareholders in
reinvestment of distributi 37,405 457,724 38,451 460,678
Shares repurchased (1,554,599) (2,107,254) (2,107,254) (25,148,515)
Net Increase 238,826 $ 2,904,944 390,672 $ 4,701,115
Note 5 - Securities Transactions
For the year ended September 30, 1998, the Fund had purchase and sale
transactions (excluding short-term securities) of $23,101,465 and $19,091,393,
respectively. The cost of investments for Federal Income tax purposes is
$27,680,081. At September 30, 1998, net unrealized appreciation of investments
was $1,361,433, resulting from $1,366,835 gross unrealized appreciation and
$5,402 gross unrealized depreciation. Accumulated net realized losses from
securities transactions included in net assets at September 30, 1998 aggregated
$151,410. For Federal income tax purposes, the Fund has realized capital loss
carryforwards of $144,452 from prior fiscal years 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 - $90,253, September 30, 2004 - $13,904, September 30, 2005 -
$34,967 and September 30, 2006 - $5,328.
<TABLE>
<CAPTION>
Financial highlights
Thornburg Florida Intermediate Municipal Fund
Per share operating performance (for a share outstanding throughout the year)
Period from Feb. 1 (a) -
Yr Ended Sept 30, September 30,
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
Class A Shares:
Net asset value, beginning of year $ 12.14 $ 11.88 $ 11.83 $ 11.54 $ 12.06
Income from investment operations:
Net investment income 0.56 0.56 0.57 0.63 0.40
Net realized and unrealized
gain (loss) on investments 0.23 0.26 0.05 0.29
(0.52)
Total from investment operations 0.79 0.82 0.62 0.92 (0.12)
Less dividends from:
Net investment income (0.56) (0.56) (0.57) (0.63) (0.40)
Change in net asset value 0.23 0.26 0.05 0.29 (0.52)
Net asset value, end of year $ 12.37 $ 12.14 $ 11.88 $ 11.83 $ 11.54
Total return (b) 6.62% 7.04% 5.37% 8.22% (0.95)%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income 4.54% 4.65% 4.80% 5.41% 5.09%(c)
Expenses, after expense reductions 0.98% 0.83% 0.61% 0.38% 0.25%(c)
Expenses, before expense reductions 1.11% 1.13% 1.34% 1.44% 1.95%(c)
Portfolio turnover rate 70.81% 51.48% 77.12% 89.60% 19.94%
Net assets at end of year (000) $ 28,091 $ 24,663 $ 19,501 $ 14,822 $ 8,076
<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
</FN>
</TABLE>
<TABLE>
<CAPTION>
Schedule of Investments
Thornburg Florida Intermediate
Municipal Fund September 30, 1998 CUSIPS: Class A -885-215-707;
NASDAQ Symbol: Class A - THFLX
<C> <C> <C> <C>
720,000 Brevard County Tourist Development Tax Revenue NR/NR $759,852
Series 1993, 6.325% due 3/1/03 (Florida Marlins
Training Facilities)
400,000 Broward County Educational Facilities Authority NR/AAA 432,972
Series 1994, 5.60% due 4/1/04 (Nova Southeastern
University Project; Guaranteed: Connie Lee)
1,000,000 Broward County Florida Housing Finance Authority Aaa/NR 1,020,280
Refunding Series A, 5.20% due 4/1/17
(Collateralized: FNMA/GNMA)
570,000 Broward County Health Facilities Authority, 7.00% Aaa/AAA 626,800
due 8/15/11 (North Beach Hospital Project; Insured:
MBIA)
445,000 Broward County Housing Finance Authority Home Aa3/BBB 95,604
Mortgage Revenue, 0% due 4/1/14
200,000 Cape Coral Special Obligation Wastewater Revenue, Aaa/AAA 206,636
5.625% due 7/1/00 (Green Area Project; Insured: FSA)
300,000 Cape Coral Special Obligation Wastewater Revenue, Aaa/AAA 315,615
5.75% due 7/1/01 (Green Area Project; Insured: FSA)
150,000 Cape Coral Special Obligation Wastewater Revenue, Aaa/AAA 163,593
6.00% due 7/1/03 (Green Area Project; Insured: FSA)
690,000 Cape Coral Special Obligation Wastewater Revenue, Aaa/AAA 718,807
6.10% due 7/1/05 (Green Area Project; Insured: FSA)
425,000 Clearwater Florida Housing Authority Finance Revenue NR/A 443,335
Refunding, 5.40% due 5/1/13
900,000 Clermont Water & Sewer Revenue Refunding, 5.00% due NR/NR 921,339
12/1/00
400,000 Dade County Florida School Board Certificate Aaa/AAA 432,212
Participation Series A, 5.20% due 5/1/06
285,000 Dade County General Obligation, 7.00% due 10/1/06 Aaa/AAA 342,844
(Insured: AMBAC)
685,000 Dade County Guaranteed Entitlement Revenue, 9.75% Aaa/AAA 739,773
due 2/1/03 pre-refunded 2/1/00 @ 103 (Insured: AMBAC)
230,000 Dade County Health Facilities Revenue - Catholic A1/NR 242,100
Health, 7.50% due 8/15/00 (LOC: Allied Irish Bank)
51,000 Duval County Single Family Housing Revenue, 10.25% Aaa/AAA 52,605
due 5/15/16
700,000 Escambia County Health Facilities Series A, 8.70% NR/BBB+ 714,105
due 10/1/14 partially pre-refunded 10/01/98 (Baptist
Hospital Project)
155,000 Escambia Housing Finance Authority, 6.15% due 4/1/00 Aaa/NR 158,229
(Collateralized: GNMA)
1,000,000 Florida Housing Development Authority, 6.25% due NR/AAA 1,043,880
12/1/06 (Hammock's Place Project)
165,000 Florida Housing Finance Agency, 7.65% due 6/1/99 Aaa/NR 167,252
(Collateralized: GNMA)
1,000,000 Florida Housing Finance Agency Multi Family Housing NR/AA 1,007,270
Revenue Series 1983-F, 5.35% due 12/1/05 mandatory
put 6/1/00 (Insured: Connecticut General)
500,000 Florida Housing Finance Agency Multi Family Housing NR/AA 503,635
Revenue Series 1983-G, 5.35% due 12/1/05 mandatory
put 6/1/00 (Insured: Connecticut General)
380,000 Florida Housing Finance Agency Revenue Bonds, 5.30% Aaa/AAA 398,069
due 12/1/04 (Insured: AMBAC)
965,000 Florida Housing Finance Authority Series 94-B, 5.70% NR/AAA 1,052,313
due 10/1/24 mandatory put 10/1/04 (Plantation Colony
Project; Collateralized: FNMA)
650,000 Florida Housing Finance Authority Multi Family NR/AA- 663,630
Housing Revenue, 5.10% due 4/1/13 put 4/1/02 (Park
Colony Project; LOC: Mellon Bank)
275,000 Florida State Board of Education Series C, 6.90% due Aaa/AAA 281,534
6/1/99 (ETM)
300,000 Florida State Board of Education Series C, 6.00% due Aaa/AA 308,799
5/1/07
220,000 Florida State Board of Education Series D, 6.20% due Aaa/AAA 226,959
5/1/07 (Insured: MBIA) (ETM)
200,000 Florida State Department Corrections Certificates of Aaa/AAA 219,774
Participation Okeechobee Correctional, 5.90% due
3/1/04 (Insured: AMBAC)
95,000 Fort Myers Florida Improvement Revenue, 6.00% due Aaa/AAA 96,612
12/1/13 (Insured: ACA)
365,000 Halifax Hospital Med Center Health Care Facilities NR/A 370,063
Revenue Series A, 5.00% due 4/1/12 (Insured: ACA)
1,000,000 Halifax Hospital Med Center Health Care Facilities NR/A 1,001,600
Revenue Series A, 5.20% due 4/1/18
300,000 Hernando County Industrial Development Revenue, NR/NR 343,230
8.50% due 12/1/14 (Florida Crushed Stone Project)
1,000,000 Hillsborough County Industrial Development Aaa/AAA 1,094,750
Authority, 5.50% due 8/15/06 (University Community
Hospital Inc. Project; Insured: MBIA)
335,000 Jacksonville Florida Housing Revenue Windermere NR/AAA 348,343
Manor Series A, 5.125% due 9/20/04 (Collateralized:
GNMA)
150,000 Jacksonville Health Facilities Industrial Baa1/NR 163,297
Development Revenue, 5.70% due 12/1/04 (National
Benevolent Association Project)
100,000 Jacksonville Health Facilities Industrial Baa1/NR 111,835
Development Revenue, 6.00% due 12/1/09 (National
Benevolent Association Project)
100,000 Jacksonville Health Facilities Industrial Baa1/NR 111,619
Development Revenue, 6.05% due 12/1/10 (National
Benevolent Association Project)
600,000 Jacksonville Health Facilities Industrial Baa1/NR 705,612
Development Revenue, 8.00% due 12/1/15 (National
Benevolent Association Project)
100,000 Jacksonville Loan Obligation Custody Receipts, 6.10% Aaa/AAA 100,007
due 4/1/01 (Insured: MBIA)
250,000 Jacksonville Loan Obligation Water & Sewer Revenue, Aaa/AAA 250,408
5.30% due 4/1/99 (Insured: MBIA)
1,035,271 Lummus Housing Development Corp., 8.00% due 12/1/10 NR/NR 1,035,271
(Elderly Housing, Section 8 Project)
2,500,000 Miami Dade County Special Obligation Subordinated Aaa/AAA 1,223,525
Series 1997-C, 0% due 10/1/13 (Insured: MBIA)
205,000 Mirimar Wastewater Improvement Assessment Revenue, Aaa/AAA 222,353
6.00% due 10/1/02 (Insured: FGIC)
840,000 Mirimar Wastewater Improvement Assessment Revenue, Aaa/AAA 954,786
6.25% due 10/1/05 (Insured: FGIC)
50,000 Okaloosa County Custody Receipts, 6.10% due 4/1/02 Aaa/AAA 50,106
(Insured: MBIA)
250,000 Orange County Housing Finance Authority, 6.10% due NR/AAA 264,085
10/1/05 (Collateralized: FNMA/GNMA)
115,000 Osceola County Health Facilities Revenue Series Aaa/AAA 125,161
1994, 5.75% due 5/1/04 (Evangelical Lutheran Good
Samaritan Project; Insured: AMBAC)
100,000 Osceola County Industrial Development Authority, Aaa/AAA 107,583
7.50% due 7/1/02 (Insured: AMBAC)
515,000 Palm Beach County Industrial Development Revenue NR/A+ 581,682
Series 1996, 6.10% due 12/1/07 (Lourdes-Noreen
McKeen-Geriatric Care Project; LOC: Allied Irish
Bank)
270,000 Palm Beach County Industrial Development Revenue NR/A+ 305,619
Series 1996, 6.20% due 12/1/08 (Lourdes-Noreen
McKeen-Geriatric Care Project; LOC: Allied Irish
Bank)
690,000 Pensacola Airport Revenue, 6.25% due 10/1/05 Aaa/AAA 781,308
800,000 Pinellas County Educational Facility Authority NR/NR 871,688
Revenue, 8.00% due 2/1/11 (Clearwater Christian
College Project)
1,390,000 Port Orange Florida Water And Sewer Revenue Aaa/AAA 1,485,785
Refunding, 5.25% due 10/1/10 (Insured: AMBAC)
500,000 Port St. Lucie Utility System Revenue Series 1996-A, Aaa/AAA 355,350
0% due 9/1/07 (Insured: FGIC)
500,000 Seminole County School Board Certificates of Aaa/AAA 557,150
Participation, 5.75% due 7/1/06 (Insured: MBIA)
1,000,000 South Broward Hospital District Revenue, 7.50% due Aaa/AAA 1,162,870
5/1/08 (Insured: AMBAC)
TOTAL INVESTMENTS (Cost $27,675,150) $ 29,041,514
<FN>
See notes to financial statements.
</FN>
</TABLE>
Independent auditor's report
To the Board of Trustees and Shareholders
Thornburg Florida Intermediate Municipal Fund
Santa Fe, New Mexico
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Thornburg Florida Intermediate Municipal Fund,
series of Thornburg Investment Trust as of September 30, 1998, 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 audits. 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, 1998, 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 Florida Intermediate Municipal Fund as of
September 30, 1998, 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.
New York, New York
October 23, 1998
