Fund facts. . . as of 3/31/98
Thornburg
New Mexico Intermediate
Municipal Fund
A Shares
SEC Yield 3.76%
Taxable Equiv. Yields 6.80%
NAV $13.34
Max. Offering Price $13.82
Total returns. . . as of 3/31/98
(Annual Average - After Subtracting Maximum
Sales Charge)
One Year 3.41%
Five Year 4.74%
Since Inception 6.17%
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 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 date quoted represent past performance and may not be construed as a
guarantee of future results.
Dear Fellow Shareholder,
I am pleased to present the Semi-Annual Report for the Thornburg New Mexico
Intermediate Municipal Fund for the 6 months ending March 31, 1998. The net
asset value increased 6 cents per share to $13.34. If you were with us for the
entire period, you received dividends of 30.7 cents per share. If you reinvested
your dividends, you received 30.9 cents per share. Your Thornburg New Mexico
Intermediate Municipal Fund currently holds over 170 municipal obligations from
around the state of New Mexico and 3 U.S. territories. Approximately 90% 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 fund 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 6.6 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 = 14% year 2 = 14%
2 to 4 years = 15% year 4 = 29%
4 to 6 years = 16% year 6 = 45
6 to 8 years = 13% year 8 = 58%
8 to 10 years = 21% year 10 = 79%
10 to 12 years = 19% year 12 = 90%
12 to 14 years = 4% year 14 = 94%
14 to 16 years = 2% year 16 = 96%
Over the last 6 months your average portfolio maturity has increased a bit. The
supply of new municipal bonds has increased considerably over the levels of
recent years. With a better selection of bonds to choose from, 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. Today there is a
great deal of discussion about the Federal Reserve and the future direction of
the U.S. economy and interest rates. The U.S. economy is extremely strong, and
tax receipts are off the charts. The federal budget will show a surplus in 1998
of between $50 and $100 billion, the first surplus since 1969! Most states will
also have budget surpluses. In the midst of all this economic strength, I am
impressed by the degree to which bond investments have outperformed money market
investments in the last 5 years. Look at these average return numbers for
various categories of bond mutual funds and money market funds for the 5 year
period ending March 31, 1998:
Average annual return
5 Years Ending 3/31/98
Taxable Money Mkt. Fund 4.4% (before income taxes)
Avg. Fund: Intmdt. Corp. Debt 6.2% (before income taxes)
Avg. Fund: Intmdt. U.S. Gvt. Debt 5.6% (before income taxes)
Municipal Money Mkt. Fund 2.8% (national portfolios)
Avg. Fund: Short Muni Bond 4.4% (national portfolios)
Avg. Fund: Intmdt. Muni Bond 5.5% (national portfolios)
(source: The Wall Street Journal/Lipper)
Recall that in the spring of 1993 the fed funds rate was 3%. Today it is 5.31%.
Assets in money market funds* and bank CDs* have increased by almost $1 trillion
since then, while American investors' holdings of bonds and bond funds have
actually decreased. While all savers would prefer to have the interest rates of
the 1980's, it is noteworthy that (1) bond fund performance has been very good
relative to money market and CD performance even in an environment of generally
rising short term interest rates, and (2) many economists are calling for
generally lower interest rates in the years ahead, even if Mr. Greenspan happens
to raise short interest rates temporarily to cool the economy later this year. I
believe investors should seriously consider moving assets from money market
investments to bonds if higher short term interest rates and lower bond prices
materialize in the coming months. Over the years, our practice of laddering a
diversified portfolio of short and intermediate maturity municipal bonds has
allowed your fund to perform well above average in varying interest rate
environments. Your fund has earned Morningstar's** coveted 4-star overall rating
for risk adjusted performance even while limiting our investments to those
bearing interest which is exempt from ordinary federal and state income taxes. I
would like to attribute this to capable execution of a sensible investment
strategy over time. Thank you for investing in Thornburg New Mexico Intermediate
Municipal Fund. Sincerely,
Brian J. McMahon
Portfolio Manager
*Money market funds strive to keep a stable net asset value. The net asset value
of the fund can and does fluctuate. CD's usually pay a fixed rate of interest
and are insured by FDIC. **Morningstar proprietary rating reflects historical
risk adjusted performances as of 3/31/98. 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. THNMX is ranked 4 stars for the
3 year period and 4-stars for the 5 year period ending 3/31/98. At 3/31/98,
there were 1525 bond funds with 3-year ratings and 782 with 5-year ratings in
Morningstar's Single State Intermediate category. Past performance cannot
guarantee future results.
ASSETS
Investments at value (cost $146,914,648) $ 154,357,236
Cash 98,124
Receivable for fund shares sold 241,766
Interest receivable 2,570,975
Prepaid expenses and other assets 19,280
Total Assets 157,287,381
LIABILITIES
Payable for investments purchased 2,463,509
Payable for fund shares redeemed 109,873
Accounts payable and accrued expenses 111,308
Payable to investment advisor 96,361
Dividends payable 216,685
Total Liabilities 2,997,736
NET ASSETS $ 154,289,645
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share ($154,289,645
applicable to 11,563,064 shares of beneficial interest
outstanding - Note 4) $ 13.34
Maximum sales charge, 3.50 % of offering
price (3.63% of net asset value per share) 0.48
Maximum Offering Price Per Share $ 13.82
See notes to unaudited financial statements.
INVESTMENT INCOME
Interest income (net of premium amortized of $197,276) $ 4,217,345
EXPENSES:
Investment advisory fees (Note 3) 376,071
Administration fees (Note 3) 94,018
Service fees (Note 3) 182,383
Transfer agent fees 37,596
Custodian fees 46,085
Registration and filing fees 1,919
Professional fees 11,419
Accounting fees 8,267
Trustee fees 2,420
Other expenses 7,163
Total Expenses 767,341
Less:
Expenses waived by investment advisor (Note 3) (17,474)
Net Expenses 749,867
Net Investment Income 3,467,478
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 5)
Net realized loss on investments sold (27,582)
Increase in unrealized appreciation of investments 752,472
Net Realized And Unrealized
Gain On Investments 724,890
Net Increase In Net Assets Resulting
From Operations $ 4,192,368
See notes to unaudited financial statements.
Six Months Ended Year Ended
March 31, 1998 September 30, 1997
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income $ 3,467,478 $ 6,519,944
Net realized gain (loss) on investments sold (27,582) 47,136
Increase in unrealized appreciation of investment 752,472 1,882,098
Net Increase In Net Assets Resulting From Operati 4,192,368 8,449,178
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares (3,467,478) (6,519,944)
FUND SHARE TRANSACTIONS - (Note 4):
Class A Shares 7,714,574 12,614,019
Net Increase In Net Assets 8,439,464 14,543,253
NET ASSETS:
Beginning of period 145,850,181 131,306,928
End of period $ 154,289,645 145,850,181
See notes to unaudited financial statements.
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 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
six months ended March 31, 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 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.
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 ended March
31, 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 six months ended March 31, 1998,
the Adviser voluntarily waived certain operating expenses amounting to $17,474.
The Fund 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, 1998, the Distributor earned commissions aggregating
$23,445 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 March 31, 1998 there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $147,585,015. Transactions
in shares of beneficial interest were as follows:
Six Months Ended March 31, 1998 Year Ended
September 30, 1997
Class A Shares Shares Amount Shares Amount
Shares sold 1,191,184 $ 15,897,397 2,547,704 $ 33,589,237
Shares issued to shareholders in
reinvestment of distributi 132,607 1,768,220 311,386 4,074,878
Shares repurchased (745,874) (9,951,043) (1,904,494) (25,050,096)
Net Increase 577,917 $ 7,714,574 954,596 12,614,019
Note 5 - Securities Transactions
For the six months ended March 31, 1998, the Fund had purchase and sale
transactions (excluding short-term securities) of $20,542,311 and $6,047,009,
respectively. At March 31, 1998, net unrealized appreciation of investments was
$7,442,588, resulting from $7,475,454 gross unrealized appreciation and $32,866
gross unrealized depreciation. Accumulated net realized losses from securities
transactions included in net assets at March 31, 1998 aggregated $737,958. For
Federal income tax purposes, the Fund has realized capital loss carryforwards of
$681,637 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 - $126,738, and September 30, 2004 - $554,899.
<TABLE>
<CAPTION>
Per share operating performance (for a share outstanding throughout the year)
Six Months Ended Year Ended September 30,
March 31, 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Class A Shares:
Net asset value, beginning of perio$ 13.28 $ 13.09 $ 13.12 $ 12.72 $ 13.36
Income from investment operations:
Net investment income 0.31 0.64 0.63 0.60 0.60
Net realized and unrealized
gain (loss) on investments 0.06 0.19 (0.03) 0.40 (0.63)
Total from investment operations 0.37 0.83 0.60 1.00 (0.03)
Less dividends from:
Net investment income (0.31) (0.64) (0.63) (0.60) (0.60)
Realized capital gains 0.00 0.00 0.00 0.00 0.01
Change in net asset value 0.06 0.19 (0.03) 0.40 (0.64)
Net asset value, end of period $ 13.34 $ 13.28 $ 13.09 $ 13.12 $ 12.72
Total return (a) 2.78% 6.51% 4.68% 8.10% (0.26)%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income 4.61% 4.88% 4.81% 4.71% 4.58%
Expenses, after expense reductions 1.00% 1.00% 1.00% 1.00% 0.90%
Expenses, before expense reductions 1.02% 1.05% 1.07% 1.06% 1.04%
Portfolio turnover rate 4.09% 10.06% 10.88% 17.06% 6.87%
Net assets at end of period (000) $ 154,290 $ 145,850 $ 131,307 $ 136,742 $ 143,910
<FN>
(a) Sales loads are not refelcted in computing total return.
(b) Annualized.
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>
CUSIPS: Class A - 885-215-301
NASDAQ Symbols: Class A - THNMX
<CAPTION>
Principal Credit Ratingt
Amount Issuer-Description Moody's/S&P Value
<S> <C> <C> <C>
3,000,000 Alamogordo Hospital Revenue, 5.30% due 1/1/13 (Gerald Champion Memorial Hospital Project NR/A- $3,007,440
896,000 Albuquerque Collateralized Mortgage, Municipal Class B-2, 0% due 5/15/11 Aaa/AAA 364,672
1,280,000 Albuquerque Gross Receipt and Lodgers Tax, 0% due 7/1/02 (Insured: FSA) Aaa/AAA 1,069,606
1,520,000 Albuquerque Gross Receipt and Lodgers Tax, 0% due 7/1/03 (Insured: FSA) Aaa/AAA 1,212,002
2,035,000 Albuquerque Gross Receipt and Lodgers Tax, 0% due 7/1/05 (Insured: FSA) Aaa/AAA 1,472,791
2,000,000 Albuquerque Gross Receipt and Lodgers Tax, 0% due 7/1/12 (Insured: FSA) Aaa/AAA 970,400
1,000,000 Albuquerque Gross Receipt Tax Revenue, 5.375% due 7/1/01 (Bluewater Apartment Project) NR/NR 1,010,320
50,000 Albuquerque Gross Receipt Tax Revenue, 6.20% due 7/1/05 A1/AA 54,444
1,000,000 Albuquerque Gross Receipt Tax Revenue, 4.35% due 7/1/13 manadatory put 8/1/01 (LOC: Bayerische Landesbank)
Aaa/AAA 1,002,410
2,000,000 Albuquerque Hospital Revenue, Series A, 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 Healthcare Project; Insured: MBIA) Aaa/AAA 348,514
2,500,000 Albuquerque Hospital Revenue, Series A, 6.10% due 8/1/02 (Insured: MBIA) Aaa/AAA 2,685,200
1,040,000 Albuquerque Hospital Revenue, Series B, 6.20% due 8/1/02 (Insured: MBIA) Aaa/AAA 1,056,910
1,000,000 Albuquerque Hospital Revenue, Series A, 6.375% due 5/15/04 pre-refunded 5/15/01 @ 102
(St. Joseph Healthcare Aaa/AAA 1,084,710
1,775,000 Albuquerque Hospital Revenue, Series B, 6.60% due 8/1/07 (Insured: MBIA) Aaa/AAA 1,808,832
300,000 Albuquerque Hospital Revenue, Series A, 6.625% due 5/15/10 pre-refunded 5/15/01 @ 102
(St. Joseph Healthcare Systems Project) Aaa/AAA 327,591
2,400,000 Albuquerque Industrial Development Revenue, 5.80% due 6/1/07 (Universal Printing & Publishing Project; LOC:
First Security Bank) A1/NR 2,501,064
1,210,000 Albuquerque MFHR, Series 1991, 8.50% due 7/1/21 put 7/1/01,(Beach Apartment Project) NR/NR 1,241,303
2,915,000 Albuquerque MFHR, Series 1994, 6.75% due 1/1/24 put 1/1/04,(Dorado Village Project) NR/NR 2,920,451
250,000 Albuquerque Refuse Removal and Disposal Rev. 6.80% due 7/1/98 (Insured: AMBAC) Aaa/AAA 251,868
290,000 Albuquerque Revenue Refunding Bonds, Series 1993, 5.00% due 6/1/01
(Evangelical Litheran Good Samaritian Society Project; Insured: FS Aaa/AAA 298,033
305,000 Albuquerque Revenue Refunding Bonds, Series 1993, 5.10% due 6/1/02 (Evangelical Litheran Good Samaritian Society
Project; Insured: FSA) Aaa/AAA 316,117
170,000 Albuquerque Revenue Refunding Bonds, Series 1993, 5.20% due 6/1/03 (Evangelical Litheran Good Samaritian Society
Project; Insured: FSA) Aaa/AAA 177,548
915,000 Albuquerque Special Assessment District, Series A, 6.45% due 1/1/15
(Cottonwood Mall Project; LOC: Sumitomo Bank) NR/A- 918,742
100,000 Albuquerque Special Assessment District #219, Series B, 5.65% due 7/1/01
(Water and Sewer Improvement Project; LOC: Sumitomo Bank) A1/A- 100,110
405,000 Albuquerque Special Assessment District #219, Series B, 5.75% due 7/1/02 (Water and Sewer Improvement Project; LOC:
Sumitomo Bank) A1/A- 405,531
1,500,000 Albuquerque Water & Sewer Revenue, 7.00% due 7/1/03 Aa3/AA 1,619,160
1,750,000 Albuquerque Water & Sewer Revenue, Series 1990-C, 7.00% due 7/1/05
partially pre-refunded 7/1/00 @ 102 Aa3/AA 1,890,612
600,000 Albuquerque Water & Sewer Revenue, 6.25% due 7/1/08 Aa3/AA 653,748
1,000,000 Albuquerque Water & Sewer System Revenue Refunding, Series B, 6.95% due 7/1/02 Aa3/AA 1,078,380
4,500,000 Bernalillo County Multi Family Housing Revenue, Series 1994-A, 6.50% due 10/1/19
put 10/1/05, (Village Apartments Project; Insured: AXA Reinsurance NR/AA- 4,782,015
2,300,000 Bernalillo Multi Family Housing Revenue, Series 1988, 5.80% due 11/1/25 put 11/1/06,
(Sunchase Apartments Project; Insured: AXA Reinsurance NR/AA- 2,404,650
500,000 Bloomfield Gross Receipts Tax Revenue, Series 1992-B, 6.50% due 8/1/07 Baa/NR 520,725
415,000 Cibola County Gross Receipts Tax Revenue, 5.70% due 11/1/07 (Insured: AMBAC) Aaa/AAA 452,728
495,000 Cibola County Gross Receipts Tax Revenue, 5.875% due 11/1/08 (Insured: AMBAC) Aaa/AAA 545,648
555,000 Cibola County Gross Receipts Tax Revenue, 6.00% due 11/1/10 (Insured: AMBAC) Aaa/AAA 620,124
1,000,000 Dona Ana County Gross Receipts Tax, 6.00% due 6/1/14 (Insured: Asset Guaranty) NR/AA 1,054,610
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 1,619,895
330,000 Dona Ana County Subordinated Gross Receipts Tax Revenue, 6.125% due 6/1/03 NR/NR 337,062
260,000 Dona Ana County Subordinated Gross Receipts Tax Revenue, 6.25% due 6/1/04 NR/NR 265,738
900,000 Eddy County New Mexico Pollution Control, 3.70% due 2/1/03 put 4/1/98 (daily demand note) NR/A1+ 900,000
1,015,000 Farmington Hospital Revenue Bonds, 5.00% due 6/1/01 (San Juan Regional Medical Center;
Insured: AMBAC) Aaa/NR 1,040,994
650,000 Farmington Pollution Control Revenue, 3.85% due 9/1/24 put 4/1/98 (daily demand note)
(LOC: Barclays Bank) P1/A1+ 650,000
750,000 Farmington Utility Systems Refunding Revenue, 5.20% due 5/15/00 (Insured: FGIC) Aaa/AAA 769,253
775,000 Gallup Pollution Control Revenue Refunding, 6.20% due 8/15/03
(Plains Electric Generation Project; Insured: MBIA) Aaa/AAA 845,308
1,500,000 Gallup Pollution Control Revenue Refunding, Series 1992, 6.45% due 8/15/06 (Insured: MBIA) Aaa/AAA 1,650,855
500,000 Gallup Sales Tax Revenue Sinking Fund Bonds, Series 1992-A,6.75% due 6/1/06
(Insured: MBIA) Aaa/AAA 523,645
800,000 Guam Government General Obligation, Series A, 5.90% due 9/1/05 NR/BBB 808,552
1,000,000 Guam Limited Obligation Highway, Series 1992-A, 5.50%due 5/1/99 (Insured: FSA) Aaa/AAA 1,019,440
280,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due 7/1/00 NR/NR 292,863
300,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due 7/1/01 NR/NR 318,264
315,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due 7/1/02 NR/NR 338,266
380,000 Las Cruces Gross Receipt Tax Revenue, Series 1995, 6.00% due 6/1/01
(SouthCentral Solid Waste Authority Project) A/NR 399,942
1,175,000 Las Cruces Gross Receipts Refunding Revenue, 5.45% due 12/1/99 A/A 1,204,904
625,000 Las Cruces Gross Receipts Refunding Revenue, 5.85% due 12/1/01 A/A 659,950
1,500,000 Las Cruces Gross Receipts Refunding Revenue, Series 1992, 6.25% due 12/1/05 A/A 1,626,735
420,000 Las Cruces Joint Utility Refunding and Improvement Revenue, 6.50% due 7/1/07 A1/NR 482,093
780,000 Las Cruce Joint Utility Refunding and Improvement Revenue, 6.50% due 7/1/07 A1/NR 861,533
1,160,000 Las Cruces Municipal Sales Tax Revenue, Series 1991, 6.50% due 12/1/06 A/NR 1,235,423
230,000 Lordsburg Gross Receipts and Lodgers Tax Revenue, 8.625% due 12/1/02 NR/NR 233,788
1,150,000 Lordsburg Pollution Control Revenue, 6.50% due 4/1/13 (Phelps Dodge Project) A2/A 1,260,549
350,000 Los Alamos County Incorporated Utility, Series A, 5.80% due 7/1/06 (Insured: FSA) Aaa/AAA 381,626
3,445,000 Los Alamos County Utility System Revenue Refunding, Series A, 6.00% due 7/1/08
(Insured: FSA) Aaa/AAA 3,748,126
210,000 Los Lunas Industrial Development Revenue Refunding, Series A, 7.50% due 5/1/09
(Mondel Plaza Project; Insured: Continental Casualty) NR/AA- 212,715
350,000 Milan General Obligation Sanitary Sewer, Series 1994, 7.00% due 9/1/13 NR/NR 383,978
2,870,000 New Mexico Educational Assist Student Loan, 6.70% due 4/1/02 (Insured: AMBAC) Aaa/AAA 3,056,665
690,000 New Mexico Educational Assist Student Loan, Series 2-B, 5.75% due 12/1/08 A/NR 710,769
140,000 New Mexico Educational Assist Student Loan Foundation Student Loan Revenue,
Series A, 6.55% due 4/1/00 (Insured:AMBAC) Aaa/AAA 144,917
400,000 New Mexico Educational Assistance Foundation Revenue, 6.05% due 12/1/00 Aaa/NR 411,436
140,000 New Mexico Educational Assistance Foundation Revenue, 5.20% due 12/1/01 Aaa/NR 144,129
1,000,000 New Mexico Educational Assistance Foundation Revenue, 6.20% due 12/1/01 Aaa/NR 1,042,040
750,000 New Mexico Educational Assistance Foundation Revenue, 5.50% due 11/1/03 A/NR 776,152
655,000 New Mexico Educational Assistance Foundation Revenue, 6.45% due 12/1/04 Aaa/NR 691,130
840,000 New Mexico Educational Assistance Foundation Revenue, 6.85% due 12/1/05 A/NR 899,346
2,210,000 New Mexico Educational Assistance Foundation Revenue, 6.65% due 3/1/07 Aaa/NR 2,386,159
1,195,000 New Mexico Equipment Loan Council Hospital Revenue, 7.50% due 6/1/02
(San Juan Regional Medical Center,Inc. Project) A3/NR 1,332,246
1,490,000 New Mexico Equipment Loan Council Hospital Revenue, 7.80% due 6/1/05 pre-refunded 6/1/01,
(San Juan Regional Medical Center, Inc. Project) A3/NR 1,674,253
575,000 New Mexico Equipment Loan Council Hospital Revenue, 7.80% due 6/1/06 pre-refunded 6/1/01,
(San Juan Regional Medical Center, Inc. Project) A3/NR 646,105
2,030,000 New Mexico Equipment Loan Council Hospital Revenue, 6.40% due 6/1/09
(Memorial Med Center Project) A3/A- 2,255,736
225,000 New Mexico Equipment Loan Council Hospital Revenue, 7.90% due 6/1/11 pre-refunded 6/1/01,
(San Juan Regional Medical Center, Inc. Project) A3/NR 253,485
835,000 New Mexico Finance Authority, Series A, 5.90% due 6/1/04
(Unrefunded Balance Public Project) Aaa/AAA 907,111
780,000 New Mexico Hospital Equipment Loan, 5.60% due 6/1/02 (Memorial Med Center Project) A3/A- 816,137
575,000 New Mexico Hospital Equipment Loan, 5.70% due 6/1/03 (Memorial Med Center Project) A3/A- 607,269
235,000 New Mexico Hospital Equipment Loan, Catholic Health Initiatives A, 5.00% due 12/1/08 Aa2/AA 240,450
1,140,000 New Mexico Hospital Equipment Loan, Catholic Health Initiatives A, 5.20% due 12/1/10 Aa2/AA 1,166,984
965,000 New Mexico MFA MFMR, Series 1991-C, 6.75% due 7/1/11 (Collateralized: FNMA) NR/AAA 970,703
1,385,000 New Mexico MFA MFMR, Series 1991-C, 6.75% due 7/1/11 (Collateralized: FNMA) NR/AAA 1,393,185
85,000 New Mexico MFA SFMR, Series C, 7.80% due 7/1/99 (Insured: FGIC) Aaa/AAA 86,831
515,000 New Mexico MFA SFMR, Series A-1, 6.05% due 1/1/00 Aa1/AA 527,236
515,000 New Mexico MFA SFMR, Series A-1, 6.05% due 7/1/00 Aa1/AA 530,569
240,000 New Mexico MFA SFMR, Series A-2, 6.20% due 1/1/01 Aa1/AA 247,440
535,000 New Mexico MFA SFMR, Series 1992 A-1, 6.30% due 1/1/02 Aa1/AA 559,428
170,000 New Mexico MFA SFMR, Series H, 5.45% due 1/1/06 (Collateralized: FNMA/GNMA) NR/AAA 176,577
175,000 New Mexico MFA SFMR, Series H, 5.45% due 7/1/06 (Collateralized: FNMA/GNMA) NR/AAA 182,128
130,000 New Mexico MFA SFMR, Series G-2, 4.85% due 1/1/07 NR/AAA 129,624
210,000 New Mexico MFA SFMR, Series G-2, 4.875% due 7/1/08 NR/AAA 209,481
1,010,000 New Mexico MFA SFMR, Series 1992 A-1, 6.90% due 7/1/08 NR/AAA 1,065,661
125,000 New Mexico MFA SFMR, Series B-2, 5.80% due 1/1/09 NR/AAA 128,615
4,175,000 New Mexico MFA SFMR, Series 1992 A-1, 6.85% due 7/1/10 Aa1/AA 4,453,514
215,000 New Mexico MFA SFMR, Series A, 7.00% due 7/1/14 A1/AA 147,813
1,459,662 New Mexico MFA SFMR, Series A, 0% due 7/1/15 Aa/AA 253,923
1,000,000 New Mexico MFA SFMR, Series A-3, 5.25% due 7/1/17 NR/AAA 1,000,780
360,000 New Mexico MFA SFMR, Series F-2, 5.60% due 7/1/17 (Collateralized: FNMA) NR/AAA 367,196
390,000 New Mexico State University Revenues, 5.85% due 4/1/99 A1/AA 398,198
380,000 New Mexico State University Revenues, 5.85% due 4/1/00 A1/AA 393,756
335,000 New Mexico State University Revenues, 5.85% due 4/1/01 A1/AA 351,197
300,000 New Mexico State University Revenues, 5.40% due 4/1/11 A1/AA 304,758
75,000 New Mexico Student Loan Revenue, 5.55% due 12/1/01 A/NR 77,579
3,000,000 New Mexico Tax & Revenue Anticipation Notes, 4.50% due 6/30/98 MIG1/SP1+ 3,004,530
1,050,000 Northern Mariana Island Ports Authority Airport Revenue, Series 1987-S, 6.90% due 10/1/01 Aa3/NR 1,068,238
555,000 Northern Mariana Island Ports Authority Airport Revenue, Series 1987-S, 7.00% due 10/1/02 Aa3/NR 564,685
2,000,000 Puerto Rico Building Authority Revenue, 6.10% due 7/1/00 Baa1/A 2,094,200
1,500,000 Puerto Rico Electric Power Revenue Refunding, Series 1992-Q, 5.70% due 7/1/00 Baa1/BBB+ 1,557,855
1,300,000 Puerto Rico Highway and Transportation Authority Highway Revenue, 5.70% due 7/1/98 Baa1/A 1,306,435
750,000 Puerto Rico Public Improvement General Obligation, 6.60% due 7/1/04 Baa1/A 832,170
100,000 Questa Independent School District #9 General Obligation School Bldg., 8.50% due 10/1/00 NR/NR 102,392
150,000 Rio Grande Natural Gas Association Natural Gas System Revenue, 5.00% due 7/1/00 Baa1/BBB+ 152,639
375,000 Rio Rancho Gross Receipts Tax Revenue, Series 1995-A, 5.50% due 12/1/00 (Insured: FSA) Aaa/AAA 389,359
440,000 Rio Rancho Gross Receipts Tax Revenue, Series 1995-A, 5.50% due 12/1/03 (Insured: FSA) Aaa/AAA 466,501
500,000 Rio Rancho Water and Wastewater System, 8.00% due 5/15/02 (Insured: FSA) Aaa/AAA 570,485
1,000,000 Rio Rancho Water and Wastewater System, 6.50% due 5/15/06 (Insured: FSA) Aaa/AAA 1,136,200
1,000,000 San Juan County Central Consolidated School District #22, 5.625% due 8/15/02 (Insured: FSA)Aaa/AAA 1,059,600
1,000,000 San Juan Gross Receipts Gas Tax Refunding Revenue, Series B,
7.00% due 9/15/09 pre-refunded 9/15/04 @ 101 A/NR 1,159,590
115,000 Sandoval County Gross Receipts Tax Refunding Revenue, Series 1992, 7.00% due 11/1/07 Baa1/NR 126,643
125,000 Sandoval County Gross Receipts Tax Refunding Revenue, Series 1992, 7.00% due 11/1/08 Baa1/NR 137,655
135,000 Sandoval County Gross Receipts Tax Refunding Revenue, Series 1992, 7.00% due 11/1/09 Baa1/NR 148,550
145,000 Sandoval County Gross Receipts Tax Refunding Revenue, Series 1992, 7.00% due 11/1/10 Baa1/NR 159,240
340,000 Santa Fe County Office and Training Facilities Project Revenue, Series 1990,
9.00% due 7/1/01 (Escrowed to Maturity) Aaa/NR 390,062
356,000 Santa Fe County Office and Training Facilities Project Revenue, Series 1990,
9.00% due 1/1/02 (Escrowed to Maturity Aaa/NR 415,217
372,000 Santa Fe County Office and Training Facilities Project Revenue, Series 1990,
9.00% due 7/1/02 (Escrowed to Maturity) Aaa/NR 441,437
406,000 Santa Fe County Office and Training Facilities Project Revenue, Series 1990,
9.00% due 7/1/03 (Escrowed to Maturity) Aaa/NR 496,278
443,000 Santa Fe County Office and Training Facilities Project Revenue, Series 1990,
9.00% due 7/1/04 (Escrowed to Maturity) Aaa/NR 556,280
626,000 Santa Fe County Office and Training Facilities Project Revenue, Series 1990,
9.00% due 1/1/08 (Escrowed to Maturity) Aaa/NR 843,917
170,000 Santa Fe Educational Facilities Revenue, 4.75% due 3/1/04 (St. Johns College Project) NR/BBB- 168,783
100,000 Santa Fe Educational Facilities Revenue, 4.85% due 3/1/05 (St. Johns College Project) NR/BBB- 99,185
190,000 Santa Fe Educational Facilities Revenue, 5.00% due 3/1/06 (St. Johns College Project) NR/BBB- 189,500
200,000 Santa Fe Educational Facilities Revenue, 5.00% due 3/1/07 (St. Johns College Project) NR/BBB- 198,714
210,000 Santa Fe Educational Facilities Revenue, 5.10% due 3/1/08 (St. Johns College Project) NR/BBB- 209,183
245,000 Santa Fe Educational Facilities Revenue, Series A, 5.30% due 10/1/12 (College Of Santa F NR/BBB- 242,800
1,215,000 Santa Fe Educational Facilities Revenue, 5.40% due 3/1/17 NR/BBB- 1,196,556
225,000 Santa Fe Educational Facilities Revenue, Series A, 5.40% due 10/1/17 (College Of Santa F NR/BBB- 221,011
2,105,000 Santa Fe Gross Receipts Tax Refunding & Improvement, Series A,
6.00% due 6/1/04 (Insured: AMBAC) Aaa/AAA 2,298,092
1,150,000 Santa Fe Gross Receipts Tax Refunding & Improvement, Series A,
5.50% due 6/1/06 (Insured: AMBAC) Aaa/AAA 1,232,662
500,000 Santa Fe Gross Receipts Tax Revenue & Improvement, 6.35% due 6/1/02 NR/AAA 502,225
260,000 Santa Fe Housing Development Corporation Multi Family Revenue Refunding,
Series 1993-A, 5.50% due 2/1/04 (Villa Camino Consuelo Project) A/NR 267,813
1,900,000 Santa Fe Improvement Revenue, Series 1992-A, 0% due 7/1/02 (Insured: FGIC) Aaa/AAA 1,587,697
1,945,000 Santa Fe Improvement Revenue, Series 1992-A, 0% due 7/1/03 (Insured: FGIC) Aaa/AAA 1,547,014
1,945,000 Santa Fe Improvement Revenue, Series 1992-A, 0% due 7/1/04 (Insured: FGIC) Aaa/AAA 1,441,848
1,895,000 Santa Fe Improvement Revenue, Series 1992-A, 0% due 7/1/05 (Insured: FGIC) Aaa/AAA 1,304,670
500,000 Santa Fe Improvement Revenue, Series 1992-A, 0% due 7/1/06 (Insured: FGIC) Aaa/AAA 320,375
1,945,000 Santa Fe Improvement Revenue, Series 1992-A, 0% due 7/1/11 (Insured: FGIC) Aaa/AAA 860,487
1,000,000 Santa Fe Industrial Revenue Housing Refunding, 7.25% due 12/1/05
(Ponce de Leon Project; Guarenteed: Health Care REIT) NR/NR 1,062,490
250,000 Santa Fe Public School District, 5.20% due 6/15/98 Aa2/NR 250,760
1,425,000 Santa Fe Refuse Disposal Systems, 5.00% due 6/1/03 A3/NR 1,457,433
370,000 Santa Fe Refuse Disposal Systems Improvement Net Rev, Series 1996-B, 5.50% due 6/1/04 A3/NR 389,910
325,000 Santa Fe Refuse Disposal Systems Revenue, 5.50% due 6/1/03 A3/NR 341,188
780,000 Santa Fe Single Family Mortgage Revenue, 5.25% due 11/1/05 (Collateralized: FNMA/GNMA) Aaa/NR 791,653
420,000 Santa Fe Single Family Mortgage Revenue, 5.60% due 11/1/10 (Collateralized: FNMA/GNMA) Aaa/NR 434,906
549,573 Santa Fe Single Family Mortgage Revenue, Series 1991, 8.45% due 12/1/11 (Insured: FGIC) Aaa/NR 588,791
675,000 Santa Fe Single Family Mortgage Revenue, 6.20% due 11/1/16 (Collateralized: FNMA/GNMA) Aaa/NR 713,043
875,000 Santa Fe Solid Waste Management Facilities Revenue, 6.10% due 6/1/07 NR/NR 960,531
195,000 Santa Rosa Consolidate School District #8 Guadalupe and San Miguel Counties
General Obligation, Series 1991, 7.00% due 8/1/03 Baa3/NR 205,669
210,000 Santa Rosa Consolidate School District #8 Guadalupe and San Miguel Counties
General Obligation, Series 1991, 7.00% due 8/1/04 Baa3/NR 221,489
285,000 Socorro Health Facility Refunding Revenue, 6.00% due 5/1/08
(Evangelical Lutheran Good Samaritan Project; Insured: AMBAC) Aaa/AAA 312,505
1,495,000 Taos County Local Hospital Gross Receipts Tax Revenue, Series 1992,
6.125% due 12/1/01 (Insured: Asset Guaranty) NR/AA 1,590,844
270,000 Torrance County Environmental Revenue, Series 1992, 6.875% due 6/1/03 NR/NR 277,376
330,000 U.S. Virgin Islands Public Finance Authority, Series 1992-A, 7.00% due 10/1/02 NR/NR 362,848
500,000 U.S. Virgin Islands Public Finance Authority, 7.70% due 10/1/04 NR/BBB 528,265
1,000,000 U.S. Virgin Islands Public Finance Authority Revenue Refunding, Series A, 6.90% due 10/1/01 NR/NR 1,079,680
1,075,000 U.S. Virgin Islands Special Tax General Obligation, Series 1991, 7.75% due 10/1/06
(Hugo Insurance Claims Fund Project) NR/NR 1,195,744
2,885,000 U.S. Virgin Islands Water & Power Authority, Series A, 7.40% due 7/1/11 NR/NR 3,151,920
100,000 University of New Mexico Higher Educational Revenue, 7.50% due 6/1/00 Aaa/AA 106,233
1,105,000 Villa Hermosa Multi Family Housing Revenue, 5.85% due 11/20/16 (Collateralized: GNMA) NR/AAA 1,156,570
1,385,000 Western New Mexico University System Revune, Series 1995, 7.75% due 6/15/19
pre-refunded 6/15/04 Baa2/NR 1,643,538
TOTAL INVESTMENTS $146,914,648) $154,357,236
<FN>
See notes to unaudited financial statements.
t Credit ratings unaudited
</FN>
</TABLE>
Class A Shares* Morningstar Ratings Period Ending March 31, 1998
3yr 5yr 10yr 3yr 5yr 10yr
Thornburg Limited Term Municipal Fund - National Portfolio
LTMFX is 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 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
THFLX , 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
Thornburg Global Value Fund
Thornburg New York Intermediate Municipal Fund
4 4 4 1,525 782 345 Muni Short
4 4 4 1,525 782 345 Muni Short
4 5 N/A 1,525 782 N/A Muni Nat'l Int.
5 N/A N/A 1,525 N/A N/A Muni Single St. Int.
4 4 N/A 1,525 782 N/A Muni Single St. Int.
3 3 3 1,403 831 329 Short Gov't
4 3 N/A 1,403 831 N/A Inter. Term Bd.
New, Not Yet Rated
SOURCE: Morningstar Advanced Analytics for Principia, 3/31/98. 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.
