Thornburg New York
Intermediate Municipal Fund
Thornburg New York
Intermediate
as of 12/31/97 Municipal Fund
SEC Yield 3.95%
Taxable Equiv. Yield 7.37%
NAV $12.69
Max. Offering Price $13.15
as of 12/31/97
Since Inception (.38%)
Inception Date (9/5/97)
The taxable equivalent yield assumes a 39.6% marginal federal tax rate,
a 6.85% New York State tax rate, and a 4.46% New York City tax 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.
The Fund's maximum sales charge is 3.50%.
The data quoted represents 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 (_) (505) 984-0200
February 16, 1998
Dear Fellow Shareholder:
I am pleased to present the Semi-Annual Report for the Thornburg New York
Intermediate Municipal Fund for the period ending December 31, 1997. The net
asset value for the A shares increased 19 cents per share to $12.69. If you were
with us from the September 5, 1997 merger of the Mackenzie New York Municipal
Fund into your fund, you received dividends of 19.8 cents per share. If you
reinvested your dividends, you received 19.9 cents per share.
Your Thornburg New York Intermediate Municipal Fund portfolio currently holds
over 50 municipal obligations from municipal obligors throughout New York and
tax exempt borrowers in 3 U.S. Territories. Approximately 70% of the bonds are
rated A or better by one of the major rating agencies. We expect this percentage
to rise in the coming months as some of your portfolio holdings are pre-refunded
and the general obligation bonds of New York City are upgraded. 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 9.9 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 = 5% year 2 = 5%
2 to 4 years = 6% year 4 = 11%
4 to 6 years = 5% year 6 = 16%
6 to 8 years = 14% year 8 = 30%
8 to 10 years = 22% year 10 = 52%
10 to 12 years = 10% year 12 = 62%
12 to 14 years = 12% year 14 = 74%
14 to 16 years = 19% year 16 = 93%
We expect pre-refundings and the passage of time to shorten the average
portfolio maturity in the coming months. We will direct portfolio cash flow
and new money into the middle maturity range of your bond ladder.
Over the years, our practice of laddering a diversified portfolio of short and
intermediate maturity bonds has allowed Thornburg Funds to perform well in
varying interest rate environments. Thank you for investing in Thornburg New
York Intermediate Municipal Fund.
Sincerely,
Brian J. McMahon
Portfolio Manager
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 York Intermediate Municipal Fund
December 31, 1997
(unaudited)
ASSETS
Investments, at value (cost $24,443,167) $26,561,097
Cash 270,493
Interest receivable 420,973
Prepaid expenses and other assets 33,182
TOTAL ASSETS 27,285,745
LIABILITIES
Payable for securites purchased 427,701
Dividends payable 42,360
Payable for fund shares redeemed 101,700
Accounts payable investment advisor (Note 4) 31,775
Accounts payable and accrued expense 13,069
TOTAL LIABILITIES 616,605
NET ASSETS $26,669,140
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share
($26,669,140 applicable to 2,100,777 shares of beneficial interest
outstanding - Note 5) $12.69
Maximum sales charge, 3.50% of offering price (3.63% of net
asset value per share) .46
Maximum Offering Price Per Share $13.15
See notes to unaudited 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 York Intermediate Municipal Fund For the period from September 4,
(a) to December 31, 1997 (unaudited)
INVESTMENT INCOME
Interest income (net of premium amortized
of $32,173) $ 507,684
EXPENSES
Investment advisory fees (Note 4) 44,549
Administration fees (Note 4) 11,161
Service fees (Note 4) 20,492
Custodian fees 7,890
Transfer agent fees 7,820
Professional fees 3,162
Registration and filing fees 1,838
Accounting fees 826
Other expenses 2,867
TOTAL EXPENSES 100,605
Less:
Expenses waived by investment adviser (Note 4) (26,601)
NET EXPENSES 74,004
NET INVESTMENT INCOME 433,680
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS - NOTE 6
Net realized loss on investments sold (9,114)
Increase in unrealized appreciation
of investments 2,117,930
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS 2,108,816
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 2,542,496
See notes to unaudited financial statements.
(a) commencement of operations
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 York Intermediate Municipal Fund For the period from September 4,
(a) to December 31, 1997 (unaudited)
INCREASE (DECREASE) IN
NET ASSETS FROM:
OPERATIONS:
Net investment income $433,680
Net realized loss on investments sold (9,114)
Increase in unrealized
appreciation of investments 2,117,930
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 2,542,496
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares (433,680)
FUND SHARE TRANSACTIONS -- (Note 5)
Class A Shares 24,560,324
NET INCREASE IN NET ASSETS 26,669,140
NET ASSETS:
Beginning of period 0
End of period $26,669,140
See notes to unaudited financial statements.
(a) commencement of operations
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 York Intermediate Municipal Fund
Note 1 - ORGANIZATION
Thornburg New York 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 six series of shares of beneficial
interest in addition to those of the Fund: Thornburg Florida Intermediate
Municipal Fund, Thornburg New Mexico 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 will also invest primarily in Municipal Obligations within the
state of New York, with the objective of having interest dividends paid to its
shareholders exempt from any individual income taxes. Additionally, the fund
will seek to have dividends paid to its individual shareholders exempt form New
York City income taxes.
Note 2 - SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies of the
Fund are as follows:
Valuation of Investments: In determining net asset value, the Fund utilizes an
independent pricing service approved by the Trustees. Debt investment securities
have a primary market over the counter and are valued on the basis of valuations
furnished by the pricing service. The pricing service values portfolio
securities at quoted bid prices or the yield equivalents when quotations are not
readily available. Securities for which quotations are not readily available are
valued at fair value as determined by the pricing service using methods which
include consideration of yields or prices of municipal obligations of comparable
quality, type of issue, coupon, maturity, and rating; indications as to value
from dealers and general market conditions. The valuation procedures used by the
pricing service and the portfolio valuations received by the Fund are reviewed
by the officers of the Fund under the general supervision of the Trustees.
Short-term obligations having remaining maturities of 60 days or less are valued
at amortized cost, which approximates market value.
Federal Income Taxes: It is the policy of the Fund to comply with the provisions
of the Internal Revenue Code applicable to "regulated investment companies" and
to distribute all of its taxable (if any) and tax exempt income to its
shareholders. Therefore no provision for Federal income tax is required.
Dividends paid by the Fund for the period ended December 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 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 - MERGER OF MACKENZIE NEW YORK MUNICIPAL FUND
On September 4, 1997, the Fund acquired all of the net assets of the MacKenzie
New York Municipal Fund ("MacKenzie") pursuant to a plan of organization
approved by MacKenzie's shareholders. The merger was accomplished by a tax free
exchange of Class A shares of the Fund (valued at $29,612,415) for the net
assets of MacKenzie which aggregated $29,612,415, including $1,686,143 of
unrealized appreciation.
Note 4 - 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 period ending December
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. The Fund entered into
an Administrative Services Agreement with the Adviser, whereby the Adviser will
perform certain administrative services for the shareholders and for which fees
will be payable at an annual rate of up to 1/8 of 1% of the average daily net
assets. For the period ended December 31, 1997, the Adviser voluntarily waived
certain operating expenses amounting to $26,601. .
The Fund has an underwriting agreement with Thornburg Securities Corporation
(the "Distributor"), which acts as the Distributor of Fund shares. For the
period ended December 31, 1997, the Distributor earned commissions aggregating
$63 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 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 Fund are also officers and/or directors of
the Adviser and Distributor. The compensation of unaffiliated trustees is borne
by the Trust.
Note 5 - SHARES OF BENEFICIAL INTEREST:
At December 31, 1997, there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $24,560,324. Transactions
in shares of beneficial interest were as follows:
Period from
September 4, 1997 (a)
to December 31, 1997
Shares Amount
Class A Shares
Shares sold 31,699 $397,735
Shares issued to shareholder
in reinvestment of
distributions 20,729 261,386
Shares issued in merger 2,368,993 27,926,271
Shares repurchased (320,644) (4,025,068)
Net Increase 2,100,777 $24,560,324
(a) commencement of operations
Note 6 - SECURITIES TRANSACTIONS
For the period ended December 31,1997 the Fund had purchase and sale
transactions (excluding short-term securities) of $8,215,035 and $6,513,371,
respectively.
The cost of investments for Federal income tax purposes is $24,443,167.
At December 31, 1997, net unrealized appreciation of investments was $2,117,930,
resulting from $2,117,930 gross unrealized appreciation and $-0-
gross unrealized depreciation.
Accumulated net realized losses from securities transactions included in net
assets at December 31, 1997 aggregated $9,114.
Thornburg New York Intermediate Municipal Fund
Per share operating performance
(for a share outstanding
throughout the period)
Period from September 4, (a)
to December 31,
1997
A
Net asset value, beginning of period $12.50
Income from investment operations:
Net investment income .20
Net realized and unrealized
gain on investments .19
Total from investment operations .39
Less distributions from:
Net investment income (.20)
Change in net asset value .19
Net asset value, end of period $12.69
Total Return (b) 3.13%
Ratios/Supplemental Data Ratios to average net assets:
Net investment income 4.87%(c)
Expenses, after expense reductions .83%(c)
Expenses, before expense reductions 1.13%(c)
Portfolio turnover rate 15.36%
Net assets at end of period (000) $26,669
(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.
<TABLE>
s c h e d u l e o f i n v e s t m e n t s
Thornburg New York Intermediate Municipal Fund
December 31,1997 CUSIPS: Class A - 885-215-665
NASDAQ Symbols: Class A - THNYX
<CAPTION>
<S> <C> <C> <C>
Principal Credit Rating+
Amount Issuer-Description Moody's/S&P Value
590,000 Amherst Industrial Development Authority Lease Revenue Bonds Series A, 5.25% due 10/1/07
(Pink Complex Project; LOC: Key Bank) NR/A $599,858
310,000 Amherst Industrial Development Authority Lease Revenue Bonds Series A, 5.25% due 10/1/08
(Pink Complex Project; LOC: Key Bank) NR/A 313,274
700,000 Bethlehem Central School District General Obligation, 7.10% due 11/1/06
(Insured: AMBAC) Aaa/AAA 839,937
300,000 Brookhaven Series A, 7.00% due 11/1/04 (Insured: MBIA) Aaa/AAA 348,519
215,000 Canastota Central School District General Obligation, 7.10% due 6/15/07 Baa2/NR 256,433
205,000 Canastota Central School District General Obligation, 7.10% due 6/15/08 Baa2/NR 245,889
550,000 Guam Power Authority Revenue Series A, 6.625% due 10/1/14 NR/BBB 602,190
1,000,000 MTA New York Commuter Facility Rev., 5.50% due 7/1/06
(Insured: AMBAC) Aaa/AAA 1,078,040
500,000 MTA New York Service Contract Rev., 7.00% due 7/1/04 Baa1/BBB 554,295
880,000 Monroe County Industrial Development Agency Revenue, 6.45% due 2/1/14
(Civic Facility - DePaul Community Facility Project; LOC: Fleet Bank of New York) Aa/NR 972,761
1,000,000 New York City General Obligation Series B, 7.20% due 8/15/08 Baa1/BBB+ 1,149,370
240,000 New York City General Obligation Series B-1, 7.30% due 8/15/10,
pre-refunded 8/15/04 @ 101 NR/BBB+ 283,423
10,000 New York City Unrefunded Balance General Obligation Series B-1, 7.30% due 8/15/10 Baa1/BBB+ 11,765
435,000 New York City Unrefunded Balance General Obligation , 7.10% due 2/1/09 Baa1/BBB+ 487,596
65,000 New York City Unrefunded Balance General Obligation , 7.10% due 2/1/09 Baa1/BBB+ 71,589
275,000 New York City General Obligation, 7.00% due 2/1/19 A2/A-1 307,230
225,000 New York City General Obligation, 7.00% due 2/1/19 A2/A-1 247,952
1,000,000 New York State General Obligation, 9.875% due 11/15/05 A2/A 1,357,360
200,000 New York Dormitory Authority Revenue, 7.85% due 2/1/29
(Park Ridge Housing Inc. Project; Collateralized: GNMA) NR/AAA 210,830
500,000 New York Dormitory Authority Revenue City University System Series C, 6.00% due 7/1/16 Baa1/BBB 511,380
500,000 New York Dormitory Authority Revenue, 7.35% due 8/1/29
(Jewish Geriatric Project; Insured: FHA) NR/AAA 560,425
500,000 New York Dormitory Authority Revenue St. University Educational Fac. Series B,
6.25% due 5/15/14 Baa1/BBB+ 577,305
505,000 New York Dormitory Authority, 6.00% due 7/1/08
(Champlain Valley Physicians Project; LOC: Connie Lee) NR/AAA 568,963
425,000 New York Dormitory Authority Revenue Chapel Oaks, 5.20% due 7/1/11
(LOC: Allied Irish Bank) Aa3/NR 430,699
400,000 New York Environmental Facilities Corp. PCR St. Water Revolving Fund
Series B, 7.50% due 3/15/11 (LOC: Pollution Control SRF) Aa2/AA- 422,932
600,000 New York Environmental Facilities Corp. PCR St. Water Revolving Fund
Series E, 6.875% due 6/15/14 (LOC: Pollution Control SRF) Aa2/A-1 692,928
400,000 New York Environmental Facilities Corp. PCR St. Water Revolving Fund
Series E, 6.875% due 6/15/14 (LOC: Pollution Control SRF) Aa2/A-1 454,792
30,000 New York Housing Finance Agency Ref St. University Construction Series A, 8.00% due 11/1/00,
pre-refunded 11/1/98 @ 102 (Collateralized: Govt Securities) Aaa/AAA 31,635
750,000 New York Housing Finance Agency SVC Contract Obligation Rev. Series A, 6.375% due 9/15/1 Baa1/BBB+ 821,415
600,000 New York Medical Care Facilities Finance Agency Rev. Series B, 7.45% due 2/15/29,
pre-refunded 2/15/00 @ 102 (St. Lukes Hospital Project; Insured: FHA) Aaa/AAA 652,776
1,000,000 New York Medical Care Facilities Finance Agency Rev. Secured Hospital Rev. Series 1991-A,
7.35% due 8/15/11 Baa/BBB 1,104,850
650,000 New York Medical Care Facilities Finance Agency Rev. Series A, 6.50% due 11/1/19,
(Aurelia Osborn Fox Memorial Hospital Project; Insured: FSA) Aaa/AAA 706,693
500,000 New York Medical Care Facilities Finance Agency Rev. Series A, 6.80% due 2/15/20,
(New York Downtown Hospital Project) Baa/BBB 546,490
500,000 New York Medical Care Facilities Finance Agency Rev. Series A, 6.85% due 2/15/17,
(Brookdale Hospital Medical Center Project) Baa/BBB 551,700
490,000 New York Medical Care Facilities Finance Agency Rev. Series A, 6.00% due 11/15/03,
(Sec Mtg Prog - Adult Day Care Project; Guaranteed: SONYMA) Aa2/NR 531,738
85,000 New York Medical Care Facilities Finance Agency Rev. Hospital and Nursing Home Series C,
7.70% due 2/15/22, pre-refunded 8/15/98 @ 102 (Insured: FHA) Aa2/AAA 88,729
1,000,000 New York Mortgage Agency Rev. Series 29-B, 6.45% 4/1/15 Aa2/NR 1,073,610
300,000 New York Muni Bd Bk Agency Special Program Rev. Buffalo Series A, 6.875% due 3/15 NR/BBB+ 326,229
70,000 New York Urban Development Corp Rev. Correctional Facilities Series D, 7.75% due 1/1/13,
pre-refunded 1/1/98 @ 102 (Insured: AMBAC) Aaa/AAA 71,400
30,000 New York Urban Development Corp Rev. Correctional Facilities Series C, 7.75% due 1/1/13,
pre-refunded 1/1/98 @ 102 (Insured: AMBAC) Aaa/AAA 30,600
2,000,000 New York Urban Development Corp Rev. Correctional Facilities Series C, 0% due 1/1/08 Baa1/BBB 1,236,120
400,000 Onondaga County Industrial Development Agency Civic Facility Rev Crouse Irving Co Inc
Series A, 7.90% (LOC: Fleet Trust Company) NR/A 450,156
400,000 Puerto Rico Commonwealth Capital Appreciation, 0% due 7/1/04 Baa1/A 299,908
300,000 Puerto Rico Public Buildings Authority Rev. Series J, 6.60% due 7/1/04 Baa1/A 328,062
400,000 Puerto Rico Electric Power Authority Power Rev. Series O, 6.80% 7/1/00 Baa1/BBB+ 421,264
300,000 Puerto Rico Industrial Tourist Educational Medical and Environmental Control Facilities Series A,
5.70% due 8/1/13 (Polytechnic University Puerto Rico Project) NR/BBB- 305,337
650,000 Schenectady Municipal Housing Authority, 6.40% due 5/1/14
(Annie Schaffer Senior Center Project; Guarantee: SONYMA) Aa/NR 689,072
100,000 Southampton Village General Obligation Series B, 7.60% due 9/1/03 (Insured: MBIA) Aaa/AAA 117,023
375,000 Syracuse Industrial Development Authority - Pilot Revenue, 5.125% due 10/15/02
(Guarantee: Pacific Mutual / ABN MRO) NR/AA 385,459
500,000 Triborough Bridge and Tunnel Authority Special Obligation Series B, 6.875% due 1/1/15 A1/A- 544,235
625,000 Valley Central School District Montgomery, 7.15% due 6/15/07 (Insured: AMBAC) Aaa/AAA 756,062
165,000 Watkins Glen Central School District, 7.00% due 6/15/04 (Insured: MBIA) Aaa/AAA 192,687
110,000 Waverly General Obligation, 9.05% due 6/15/04 (Insured: MBIA) Aaa/Baa2 140,111
TOTAL INVESTMENTS (Cost 24,443,167) $26,561,097
<FN>
+Credit ratings are unaudited.
See notes to financial statements.
</FN>
</TABLE>
