Thornburg Florida Intermediate Municipal Fund
Fund facts. . . as of 3/31/98
Thornburg
Florida Intermediate
Municipal Fund
A Shares
SEC Yield 4.19%
Taxable Equiv. Yields 6.95%
NAV $12.22
Max. Offering Price $12.66
Total returns. . . as of 3/31/98
(Annual Average - After Subtracting
Maximum Sales Charge)
One Year 3.94%
Three Year 5.28%
Since Inception 4.50%
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 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 Florida
Intermediate Municipal Fund for the 6 months ending March 31, 1998. The net
asset value increased 8 cents per share to $12.22. If you were with us for the
entire period, you received dividends of 27.8 cents per share. If you reinvested
your dividends, you received 28.1 cents per share. Your Thornburg Florida
Intermediate Municipal Fund currently holds over 50 municipal obligations from
Florida Municipal borrowers. Approximately 78% 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 8.0 years, and we always keep it below 10 years.
Percentages of the portfolio maturing in the coming years are summarized below:
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:
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 5-star overall rating
for risk adjusted performance. I 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
Portfolio Manager
2 years = 14% year 2 = 14%
2 to 4 years = 15% year 4 = 29%
4 to 6 years = 10% year 6 = 39%
6 to 8 years = 20% year 8 = 59%
8 to 10 years = 9% year 10 = 68%
10 to 12 years = 16% year 12 = 84%
12 to 14 years = 6% year 14 = 90%
14 to 16 years = 9% year 16 = 99%
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)
ASSETS
Investments at value (cost $26,450,987) $ 27,455,655
Cash 16,270
Receivable for fund shares sold 63,303
Interest receivable 439,001
Prepaid expenses and other assets 14,839
Total Assets 27,989,068
LIABILITIES
Payable for investments purchased 701,944
Accounts payable and accrued expenses 48,256
Payable to investment advisor 25,510
Dividends payable 57,214
Total Liabilities 832,924
NET ASSETS $ 27,156,144
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share ($27,156,144
applicable to 2,223,101 shares of beneficial interest
outstanding - Note 4) $ 12.22
Maximum sales charge, 3.50 % of offering
price (3.63% of net asset value per share) 0.44
Maximum Offering Price Per Share $ 12.66
See notes to unaudited financial statements.
INVESTMENT INCOME:
Interest income (net of premium amortized of $54,202) $ 711,081
EXPENSES:
Investment advisory fees (Note 3) 64,224
Administration fees (Note 3) 16,056
Service fees (Note 3) 28,666
Transfer agent fees 9,804
Custodian fees 10,565
Professional fees 5,026
Trustee Feess 333
Other expenses 4,846
Total Expenses 139,520
Less:
Expenses waived by investment advisor (Note 3) (14,584)
Net Expenses 124,936
Net Investment Income 586,145
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE 5)
Net Realized gain on investments sold 13,146
Increase in unrealized appreciation (depreciation) of inve 160,234
Net Realized and Unrealized
Gain on Investments 173,380
Net Increase in Net Assets Resulting From Operations $ 759,525
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 $ 586,145 $ 1,081,089
Net realized gain (loss) on investments 13,146 (12,081)
Increase in unrealized appreciation of investments 160,234 472,555
Net Increase in Assets Resulting from Operations 759,525 1,541,563
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares (586,145 (1,081,089)
FUND SHARE TRANSACTIONS - (Note 4):
Class A Shares 2,319,916 4,701,115
Net Increase in Net Assets 2,493,296 5,161,589
NET ASSETS:
Beginning of period 24,662,848 19,501,259
End of period $ 27,156,144 $ 24,662,848
See notes to unaudited financial statements.
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 six
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 and
Thornburg Value Fund. Each series is considered to be a separate entity for
financial reporting and tax purposes. The Fund's investment objective is to
obtain as high a level of current income exempt from Federal income tax as is
consistent with the preservation of capital. The Fund currently offers only one
class of shares of beneficial interest, Class A shares. On 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. 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 under the Trust 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 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 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 $14,584.
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
$5,730 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 March 31, 1998 there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $26,290,569. Transactions in
shares of beneficial interest were as follows:
Six Months Ended Year Ended
March 31, 1998 September 30, 1997
Class A Shares Shares Amount Shares Amount
Shares sold 1,443,366 $ 17,661,641 2,459,475 $ 29,388,952
Shares issued to shareholders in
reinvestment of distribution 14,558 177,641 38,451 460,678
Shares repurchased (1,267,173) (15,519,366) (2,107,254) (25,148,515)
Net Increase 190,751 $ 2,319,916 390,672 $ 4,701,115
Note 5 - Securities Transactions
For the six months ended March 31, 1998, the Fund had purchase and sale
transactions (excluding short-term securities) of $19,222,948 and $16,550,255,
respectively. At March 31, 1998, net unrealized appreciation of investments was
$1,004,668, resulting from $1,015,463 gross unrealized appreciation and $10,795
gross unrealized depreciation. Accumulated net realized losses from securities
transactions included in net assets at March 31, 1998 aggregated $139,093. For
Federal income tax purposes, the Fund has realized capital loss carryforwards of
$139,124 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 and September 30, 2005 - $34,967.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Period from Sept. 1 (a)-
Six Month Ended Year Ended September 30, September 30,
March 31, 1998 1997 1996 1995 1994
CLASS A SHARES:
Net asset value, beginning of period $12.14 $11.88 $11.83 $11.54 $12.06
Income from investment operations:
Net investment income 0.28 0.56 0.57 0.63 0.40
Net realized and unrealized
gain (loss) on investments 0.08 0.26 0.05 0.29 (0.52)
Total from investment operations 0.36 0.82 0.62 0.92 (0.12)
Less dividends from:
Net investment Income (0.28) (0.56) (0.57) (0.63) (0.40)
Change in net asset value 0.08 0.26 0.05 0.29 (0.52)
Net asset value, end of period $12.22 $12.14 $11.88 $11.83 $11.54
TOTAL RETURNS 2.97% 7.04% 5.37% 8.22% (0.95%)
RATIOS/SUPPLEMENTAL DATA
Ratios to average net asset:
Net investment income 4.56%(c) 4.65% 4.80% 5.41% 5.09%(c)
Expenses, after expense reductions 0.97%(c) 0.83% 0.61% 0.38% 0.25%(c)
Expenses, before expense reductions 1.09%(c) 1.13% 1.34% 1.44% 1.95%(c)
Portfolio turnover rate 64.03% 51.48% 77.12% 89.60% 19.94%
Net assets at end of period (000) $27,156 $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 period less thatn one year.
(c) Annualized
</FN>
</TABLE>
<TABLE>
CUSIPS: Class A - 885-215-707
NASDAQ Symbols: Class A - THFLX
<CAPTION>
Principal Credit Ratingt
Amount Issuer-Description Moody's/S&P Value
<S> <C> <C> <C>
720,000 Brevard County Tourist Development Tax Revenue, Series 1993, 6.325% due 3/1/03
(Florida Marlins Training Facilities) NR/NR $757,253
400,000 Broward County Educational Facilities Authority, Series 1994, 5.60% due 4/1/04
(Nova Southeastern University Project; Guaranteed: Connie Lee) NR/AAA 427,028
1,000,000 Broward County Florida Housing Finance Authority Refunding, Series A, 5.20% due 4/1/17 Aaa/NR 1,000,830
570,000 Broward County Health Facilities Authority, 7.00% due 8/15/11
(North Beach Hospital Project; Insured: MBIA) Aaa/AAA 624,840
510,000 Broward County Housing Finance Authority Home Mortgage Revenue, 0% due 4/1/14 Aa3/BBB 104,616
200,000 Cape Coral Special Obligation Wastewater Revenue, 5.625% due 7/1/00
(Green Area Project; Insured: FSA) Aaa/AAA 207,218
300,000 Cape Coral Special Obligation Wastewater Revenue, 5.75% due 7/1/01 (Green Area Project; In Aaa/AAA 314,991
150,000 Cape Coral Special Obligation Wastewater Revenue, 6.00% due 7/1/03 (Green Area Project; In Aaa/AAA 162,225
690,000 Cape Coral Special Obligation Wastewater Revenue, 6.10% due 7/1/05
(Green Area Project; Insured FSA) Aaa/AAA 719,049
425,000 Clearwater Florida Housing Authority Finance Revenue Refunding, 5.40% due 5/1/13 NR/A 433,343
900,000 Clermont Water & Sewer Revenue Refunding, 5.00% due 12/1/00 NR/NR 921,132
285,000 Dade County General Obligation, 7.00% due 10/1/06 (Insured: AMBAC) Aaa/AAA 336,192
775,000 Dade County Guaranteed Entitlement Revenue, 9.75% due 2/1/03
pre-refunded 2/1/00 @ 103 (Insured: AMBAC) Aaa/AAA 844,680
230,000 Dade County Health Facilities Revenue - Catholic Health, 7.50% due 8/15/00 (LOC: Allied Irish Bank) A1/NR 243,607
57,000 Duval County Single Family Housing Revenue, 10.25% due 5/15/16 Aaa/AAA 57,706
700,000 Escambia County Health Facilities, Series A, 8.70% due 10/1/14 partially pre-refunded 10/01/98
(Baptist Hospital Project) NR/BBB+ 729,036
15,000 Escambia County Housing Finance Authority Single Family Mortgage, Series C, 7.50%
due 10/1/12 Aaa/NR 15,544
165,000 Escambia Housing Finance Authority, 6.15% due 4/1/00 (Collateralized: GNMA) Aaa/NR 168,764
1,000,000 Florida Housing Development Authority, 6.25% due 12/1/06 (Hammock's Place Project) NR/AAA 1,045,590
180,000 Florida Housing Finance Agency, 7.65% due 6/1/99 (Collateralized: GNMA) Aaa/NR 183,749
1,000,000 Florida Housing Finance Agency Multi Family Housing Revenue, Series 1983-F, 5.35%
due 12/1/05 mandatory put6/1/00
(Insured: Connecticut General) NR/AA 1,011,620
380,000 Florida Housing Finance Agency Revenue Bonds, 5.30% due 12/1/04 (Insured: AMBAC) Aaa/AAA 394,216
970,000 Florida Housing Finance Authority, Series 94-B, 5.70% due 10/1/24 mandatory put 10/1/04 (Plantation Colony Project;
Collateralized: FNMA) NR/AAA 1,044,593
650,000 Florida Housing Finance Authority Multi Family Housing Revenue, 5.10% due 4/1/02put 4/1/02 (Park Colony Project;
LOC: Mellon 663,370
275,000 Florida State Board of Education, Series C, 6.90% due 6/1/99 (Escrowed to Maturity) Aaa/AAA 279,180
220,000 Florida State Board of Education, Series D, 6.20% due 5/1/07 (Insured: MBIA) (Escrowed t 226,336
345,000 Florida State Certificates of Participation, 6.10% due 5/15/98 (Consolidated Equipment Financing Program Project)
A/A+ 345,969
200,000 Florida State Department Corrections Certificates of Participation Okeechobee Correctional, 5.90% due 3/1/04
(Insured: A 217,204
95,000 Fort Myers Florida Improvement Revenue, 6.00% due 12/1/13 (Insured: ACA) Aaa/AAA 96,588
370,000 Halifax Hospital Med Center Daytona Beach Health Care Facilities Revenue, Series A, 5.00% due 4/1/11 (Insured: ACA)
NR/A 367,036
365,000 Halifax Hospital Med Center Daytona Beach Health Care Facilities Revenue, Series A, 5.00% due 4/1/12 (Insured: ACA)
NR/A 358,514
1,000,000 Halifax Hospital Med Center Daytona Beach Health Care Facilities Revenue, Series A, 5.20% due 4/1/18
NR/A 990,190
300,000 Hernando County Industrial Development Revenue, 8.50% due 12/1/14 (Florida Crushed Stone NR/NRect) 343,056
1,000,000 Hillsborough County Industrial Development Authority, 5.50% due 8/15/06 (University Community Hospital Inc.
Project; Insured: MBIA) Aaa/AAA 1,075,070
355,000 Jacksonville Florida Housing Revenue Windermere Manor, Series A, 5.125% due 9/20/04 (Collateralized: GNMA)
NR/AAA 365,320
150,000 Jacksonville Health Facilities Industrial Development Revenue, 5.70% due 12/1/04 (National Benevolent Association
Project) Ba 159,459
100,000 Jacksonville Health Facilities Industrial Development Revenue, 6.00% due 12/1/09 (National Benevolent Association
Project) Ba 108,526
100,000 Jacksonville Health Facilities Industrial Development Revenue, 6.05% due 12/1/10 (National Benevolent Association
Project) Ba 108,333
600,000 Jacksonville Health Facilities Industrial Development Revenue, 8.00% due 12/1/15 (National Benevolent Association
Project) Ba 702,456
100,000 Jacksonville Loan Obligation Custody Receipts, 6.10% due 4/1/01 (Insured: MBIA)Aaa/AAA 100,188
250,000 Jacksonville Loan Obligation Water & Sewer Revenue, 5.30% due 4/1/99 (Insured: MBIA) Aaa/AAA 250,325
1,059,801 Lummus Housing Development Corp., 8.00% due 12/1/10 (Elderly Housing, Section 8 Project) NR/NR 1,059,801
2,500,000 Miami Dade County Florida Special Obligation, Subordinated Series C, 0% due 10/1/13 (Insured: MBIA)
Aaa/AAA 1,129,875
210,000 Mirimar Wastewater Improvement Assessment Revenue, 6.00% due 10/1/02 (Insured: FGIC) Aaa/AAA 225,620
845,000 Mirimar Wastewater Improvement Assessment Revenue, 6.25% due 10/1/05 (Insured: FGIC) Aaa/AAA 942,462
50,000 Okaloosa County Custody Receipts, 6.10% due 4/1/02 (Insured: MBIA) Aaa/AAA 50,094
250,000 Orange County Housing Finance Authority, 6.10% due 10/1/05 (Collateralized: FNMA/GNMA) NR/AAA 260,800
115,000 Osceola County Health Facilities Revenue, Series 1994, 5.75% due 5/1/04 (Evangelical Lutheran Good Samaritan
Project;
Insured: AMAaa/AAA 123,775
100,000 Osceola County Industrial Development Authority, 7.50% due 7/1/02 (Insured: AMBAC) Aaa/AAA 108,286
195,000 Palm Bay Lease Revenue Refunding, 6.40% due 9/1/04 (Florida Education & Research Foundat Ba2/NR 203,172
205,000 Palm Bay Lease Revenue Refunding, 6.50% due 9/1/05 (Florida Education & Research Foundat Ba2/NR 214,795
515,000 Palm Beach County Industrial Development Revenue, Series 1996, 6.10% due 12/1/07 (Lourdes-Noreen McKeen-Geriatric
Care Project;
LOC: Allied Irish Bank) NR/A+ 567,092
270,000 Palm Beach County Industrial Development Revenue, Series 1996, 6.20% due 12/1/08 (Lourdes-Noreen McKeen-Geriatric
Care Project;
LOC: Allied Irish Bank) NR/A+ 299,287
690,000 Pensacola Airport Revenue, 6.25% due 10/1/05 Aaa/AAA 760,380
800,000 Pinellas County Educational Facility Authority Revenue, 8.00% due 2/1/11 (Clearwater Christian College Project)
NR/NR 860,184
500,000 Port St. Lucie Utility System Revenue, Series 1996-A, 0% due 9/1/07 (Insured: FGIC) Aaa/AAA 338,010
500,000 Seminole County School Board Certificates of Participation, 5.75% due 7/1/06 (Insured: M Aaa/AAA 548,440
1,000,000 South Broward Hospital District Revenue, 7.50% due 5/1/08 (Insured: AMBAC) Aaa/AAA 1,158,640
100,000 St. Lucie County Florida Pollution Control, 3.85% due 1/1/26 put 4/1/98 (daily demand note)
(Florida Power & Light Company Project) VMIG1/A1+ 100,000
TOTAL INVESESTMENTS (Cost $26,450,987) $ 27,455,655
<FN>
See notes to unaudited financial statements.
t Credit ratings are unaudited
</FN>
</TABLE>
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.
