Thornburg New Mexico Intermediate Municipal Fund
Fund facts. . . as of 9/30/98
Thornburg
New Mexico Intermediate
Municipal Fund
A Shares
SEC Yield 3.66%
Taxable Equiv. Yields 6.62%
NAV $13.45
Max. Offering Price $13.94
Total returns. . . as of 9/30/98
(Annual Average - After Subtracting Maximum Sales Charge)
One Year 2.38%
Five Year 4.24%
Since Inception 6.19%
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 data quoted represent past performance and may not be construed as a
guarantee of future results.
Letter to shareholders
November 6, 1998
Dear Shareholder,
We are pleased to present the Annual Report for the New Mexico Portfolio of
Thornburg Intermediate Municipal Fund for the fiscal year ending September 30,
1998. The net asset value increased 17 cents per share to $13.45 during the
year. If you were with us for the entire period, you received dividends of 61.9
cents per share. If you reinvested your dividends, you received 63.3 cents per
share. Your Thornburg New Mexico Intermediate Municipal Fund portfolio currently
holds over 160 municipal obligations from around New Mexico and from U.S.
Territories which can issue "double exempt"* bonds here. 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 portfolio so that some
bonds are scheduled to mature at par during each of the coming years. Today,
your fund's weighted average maturity is approximately 6.8 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 =11% year 2 = 11%
2 to 4 years = 21% year 4 = 32%
4 to 6 years = 15% year 6 = 47%
6 to 8 years = 19% year 8 = 66%
8 to 10 years = 14% year 10 = 80%
10 to 12 years = 5% year 12 = 85%
12 to 14 years = 5% year 14 = 90%
14 to 16 years = 6% year 16 = 96%
16 to 18 years = 3% year 18 = 99%
Over 18 years = 1%
Over the last year your average portfolio maturity has increased slightly. The
passage of time shortened the maturities of the bonds we owned at the beginning
of the year. Until mid-summer, we directed portfolio cash flow and new money
into the longer half of your bond ladder, taking advantage of the plentiful
supply and good selection of new municipal bonds coming to market this year.
Today, we are managing the portfolio to keep the average maturity approximately
where it is. We will stick with this approach if interest rates remain stable or
decrease. If bond yields increase, we will slightly extend the average portfolio
maturity. This would permit us to increase our dividend yields if higher yields
are available. For the past 4 years Americans have been net sellers of municipal
and government bonds. Investment dollars have flowed instead to equities, money
market investments, and (until recently) overseas opportunities. A combination
of sharp volatility in equity markets worldwide and deflationary winds blowing
from Asia may be rekindling the appetite of U.S. investors for bond investing,
although the money flows to the U.S. bond market are not yet significant from
domestic investors. If the Federal Reserve cuts short term interest rates again
in the coming months, some of the money now flowing into money market funds* may
begin to move to intermediate and longer maturity bonds. Assets of these money
market funds* now total over $1.3 trillion! As the accompanying graph shows,
long term interest rates dropped considerably in the last year in anticipation
of an economic slowdown and an expected drop in short term interest rates. Since
September 30, short maturity interest rates have fallen further, while very long
maturity rates have increased slightly. Muni yields in New Mexico were slightly
lower than those shown above for the U.S. municipal bond market as a whole. Any
observer must be impressed by the fundamental strength of the broad U.S. economy
and of New Mexico's. More people than ever before are working. Wages are firm.
But tax receipts are beginning to slow down, and government spending is
accelerating. Taken as a whole, U.S. cities continue to increase their financial
reserves for the fifth consecutive year. Most states report similar favorable
news, but there is one possible cloud: if the U.S. economy slows as state and
local government spending accelerates, some entities will not manage the
transition smoothly. If the current strength of the U.S. economy persists, we
expect long maturity interest rates to increase in 1999. If our economy slows,
short maturity bond rates and money market interest rates will quickly drop. We
believe the U.S. economy will not go down without a fight. Over the years, our
practice of laddering a diversified portfolio of short and intermediate maturity
bonds has allowed your fund to consistently perform well in varying interest
rate environments. Your fund has earned Morningstar's 4 star overall rating**
for risk adjusted performance. We would like to attribute this to capable
execution of a sensible investment strategy over time. Thank you for investing
in Thornburg New Mexico Intermediate Municipal Fund. Sincerely,
Brian J. McMahon George T. Strickland
Portfolio Manager Portfolio Manager
*A portion of the income may be subject to the federal alternative minimum tax.
*Money market funds strive to keep a stable net asset value. The net asset value
of the fund can and does fluctuate. **Morningstar proprietary rating reflects
historical risk adjusted performances as of 9/30/98. Ratings are subject to
change every month. Funds with at least three years of performance history are
assigned ratings from one star (lowest) to five stars (highest). Morningstar
overall ratings are calculated from the funds' three-, five-, and ten year
average annual returns and a risk factor that reflects fund performance relative
to three month Treasury bill returns. 10% of the funds in an investment category
receive five stars and 22.5% receive four stars. THNMX is ranked 4 stars for the
3 year period and 4-stars for the 5 year period . At 9/30/98, there were 1581
bond funds with 3-year ratings and 943 with 5-year ratings in Morningstar's
Single State Intermediate category. Past performance cannot guarantee future
results.
Statement of assets and liabilities
Thornburg New Mexico Intermediate Municipal Fund
September 30, 1998
ASSETS
Investments at value (cost $144,227,271) $ 152,869,343
Cash 110,874
Receivable for fund shares sold 73,691
Receivable for investments sold 210,968
Interest receivable 2,417,186
Prepaid expenses and other assets 3,353
Total Assets 155,685,415
LIABILITIES
Payable for investments purchased 2,086,140
Payable for fund shares redeemed 29,220
Accounts payable and accrued expenses 145,954
Payable to investment advisor 75,570
Dividends payable 230,374
Total Liabilities 2,567,258
NET ASSETS $ 153,118,157
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share ($153,118,157
applicable to 11,385,588 shares of beneficial interest
outstanding - Note 4) $ 13.45
Maximum sales charge, 3.50 % of offering
price (3.63% of net asset value per share) 0.49
Maximum Offering Price Per Share $ 13.94
See notes to financial statements.
Statement of operations
Thornburg New Mexico Intermediate Municipal Fund
Year Ended September 30, 1998
INVESTMENT INCOME:
Interest income (net of premium amortized of $395,808) $ 8,487,273
EXPENSES:
Investment advisory fees (Note 3) 752,824
Administration fees (Note 3) 188,206
Service fees (Note 3) 360,716
Transfer agent fees 78,740
Custodian fees 97,495
Registration and filing fees 3,485
Professional fees 22,300
Accounting fees 16,282
Trustee fees 2,875
Other expenses 16,010
Total Expenses 1,538,933
Less:
Expenses reimbursed by investment advisor (Note 3) (40,082)
Net Expenses 1,498,851
Net Investment Income 6,988,422
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 5)
Net realized gain (loss) on investments sold (39,034)
Increase in unrealized appreciation of investments 1,951,956
Net Realized And Unrealized
Gain On Investments 1,912,922
Net Increase In Net Assets Resulting
From Operations $ 8,901,344
See notes to financial statements.
Statement of changes in net assets
Thornburg New Mexico Intermediate Municipal Fund
Year Ended Year Ended
September 30, 1998 September 30, 1997
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income $ 6,988,422 $ 6,519,944
Net realized gain (loss) on investments sold (39,034) 47,136
Increase in unrealized appreciation of investment 1,951,956 1,882,098
Net Increase In Net Assets Resulting From Operati 8,901,344 8,449,178
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares (6,988,422) (6,519,944)
FUND SHARE TRANSACTIONS - (Note 4):
Class A Shares 5,355,054 12,614,019
Net Increase in Net Assets 7,267,976 14,543,253
NET ASSETS:
Beginning of year 145,850,181 131,306,928
End of year $ 153,118,157 $ 145,850,181
See notes to financial statements.
Notes to financial statements
September 30, 1998
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 seven
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, Thornburg Value Fund
and Thornburg Global Value Fund. Each series is considered to be a separate
entity for financial reporting and tax purposes. The Fund's investment objective
is to obtain as high a level of current income exempt from Federal income tax as
is consistent with the preservation of capital. The Fund currently offers 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.
Note 2 - Significant Accounting Policies Significant accounting policies of the
Fund are as follows:
Valuation of Investments: In determining net asset value, the Fund utilizes an
independent pricing service approved by the Trustees. Debt investment securities
have a primary market over the counter and are valued on the basis of valuations
furnished by the pricing service. The pricing service values portfolio
securities at quoted bid prices or the yield equivalents when quotations are not
readily available. Securities for which quotations are not readily available are
valued at fair value as determined by the pricing service using methods which
include consideration of yields or prices of municipal obligations of comparable
quality, type of issue, coupon, maturity, and rating; indications as to value
from dealers and general market conditions. The valuation procedures used by the
pricing service and the portfolio valuations received by the Fund are reviewed
by the officers of the Trust under the general supervision of the Trustees.
Short-term obligations having remaining maturities of 60 days or less are valued
at amortized cost, which approximates market value. Federal Income Taxes: It is
the policy of the Fund to comply with the provisions of the Internal Revenue
Code applicable to "regulated investment companies" and to distribute all of its
taxable (if any) and tax exempt income to its shareholders. Therefore no
provision for Federal income tax is required. Dividends paid by the Fund for the
year ended September 30, 1998 represent exempt interest dividends which are
excludable by shareholders from gross income for Federal income tax purposes.
When-Issued and Delayed Delivery Transactions: The Fund may engage in
when-issued or delayed delivery transactions. To the extent the Fund engages in
such transactions, it will do so for the purpose of acquiring portfolio
securities consistent with its investment objectives and not for the purpose of
investment leverage or to speculate on interest rate changes. At the time the
Fund makes a commitment to purchase a security on a when-issued basis, it will
record the transaction and reflect the value in determining 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 year ended September 30,
1998, these fees were payable at annual rates ranging from 1/2 of 1% to 11/40 of
1% of the average daily net assets of the Fund, depending on the Fund's asset
size. The Fund also has an Administrative Services Agreement with the Adviser,
whereby the Adviser will perform certain administrative services for the
shareholders of each class of the Fund's shares, and for which fees will be
payable at an annual rate of up to 1/8 of 1% of the average daily net assets
attributable to each class of shares. For the year ended September 30, 1998, the
Adviser voluntarily reimbursed certain operating expenses amounting to $40,082.
The Fund has an underwriting agreement with Thornburg Securities Corporation
(the "Distributor"), which acts as the Distributor of Fund shares. For the year
ended September 30, 1998, the Distributor earned commissions aggregating $43,019
from the sale of Class A shares. Pursuant to a Service Plan, under Rule 12b-1 of
the Investment Company Act of 1940, the Fund may reimburse to the Adviser an
amount not to exceed .25 of 1% per annum of the average net assets attributable
to each class of shares of the Fund for payments made by the Adviser to
securities dealers and other financial institutions to obtain various
shareholder related services. The Adviser may pay out of its own funds
additional expenses for distribution of the Fund's shares. Certain officers and
trustees of the Trust are also officers and/or directors of the Adviser and
Distributor. The compensation of unaffiliated trustees is borne by the Trust.
Note 4 - Shares of Beneficial Interest
At September 30, 1998 there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $145,225,495. Transactions
in shares of beneficial interest were as follows:
Yr Ended Sept 30, 1998 Yr Ended Sept 30, 1997
Class A Shares Shares Amount Shares Amount
Shares sold 2,157,467 $ 28,797,690 2,547,704 $ 33,589,237
Shares issued to shareholders in
reinvestment of distributi 316,508 4,224,103 311,386 4,074,878
Shares repurchased (2,073,534) (27,666,739) (1,904,494) (25,050,096)
Net Increase 400,441 $ 5,355,054 954,596 12,614,019
Note 5 - Securities Transactions
For the year ended September 30, 1998, the Fund had purchase and sale
transactions (excluding short-term securities) of $32,923,693 and $20,336,760
respectively. The cost of investments for Federal Income tax purposes is
$144,254,832. At September 30, 1998, net unrealized appreciation of investments
was $8,614,511 resulting from $8,635,313 gross unrealized appreciation and
$20,802 gross unrealized depreciation. Accumulated net realized losses from
securities transactions included in net assets at September 30, 1998 aggregated
$749,410. For Federal income tax purposes, the Fund has realized capital loss
carryforwards of $688,815 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, September 30, 2004 - $554,899, and September 30,
2006 - $7,178.
<TABLE>
<CAPTION>
Financial highlights
Thornburg New Mexico Intermediate Municipal Fund
Per share operating performance (for a share outstanding throughout the year)
Year Ended September 30,
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
Class A Shares:
Net asset value, beginning of year $ 13.28 $ 13.09 $ 13.12 $ 12.72 $ 13.36
Income from investment operations:
Net investment income 0.62 0.64 0.63 0.60 0.60
Net realized and unrealized
gain (loss) on investments 0.17 0.19 (0.03) 0.40 (0.63)
Total from investment operations 0.79 0.83 0.60 1.00 (0.03)
Less dividends from:
Net investment income (0.62) (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 0.17 0.19 (0.03) 0.40 (0.64)
Net asset value, end of year $ 13.45 $ 13.28 $ 13.09 $ 13.12 $ 12.72
Total return (a) 6.08% 6.51% 4.68% 8.10% (0.26)%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income 4.64% 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 13.74% 10.06% 10.88% 17.06% 6.87%
Net assets at end of year (000) $ 153,118 $ 145,850 $ 131,307 $136,742 $ 143,910
<FN>
(a) Sales loads are not reflected in computing total return.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Schedule of Investments
Thornburg New Mexico Intermediate Municipal Fund
September 30, 1998 CUSIPS: Class A - 885-215-301; NASDAQ Symbol: Class A - THNMX
<C> <C> <C> <C>
3,000,000 Alamogordo Hospital Revenue, 5.30% due 1/1/13 (Gerald NR/A- $3,100,800
Champion Memorial Hospital Project)
896,000 Albuquerque Collateralized Mortgage, Municipal Class Aaa/AAA 389,760
B-2, 0% due 5/15/11
1,280,000 Albuquerque Gross Receipt and Lodgers Tax, 0% due Aaa/AAA 1,110,963
7/1/02 (Insured: FSA)
1,520,000 Albuquerque Gross Receipt and Lodgers Tax, 0% due Aaa/AAA 1,264,488
7/1/03 (Insured: FSA)
2,035,000 Albuquerque Gross Receipt and Lodgers Tax, 0% due Aaa/AAA 1,556,429
7/1/05 (Insured: FSA)
2,000,000 Albuquerque Gross Receipt and Lodgers Tax, 0% due Aaa/AAA 1,060,000
7/1/12 (Insured: FSA)
1,000,000 Albuquerque Gross Receipt Tax Revenue, 5.375% due NR/AA 1,010,480
7/1/01 (Bluewater Apartment Project)
50,000 Albuquerque Gross Receipt Tax Revenue, 6.20% due 7/1/05 A1/AA 54,729
2,000,000 Albuquerque Hospital Revenue Series A, 5.60% due Aaa/AAA 2,035,640
8/1/99 (Insured: MBIA)
335,000 Albuquerque Hospital Revenue Series A, 5.80% due Aaa/AAA 347,164
8/1/00 (Presbyterian Healthcare Project; Insured: MBIA)
2,500,000 Albuquerque Hospital Revenue Series A, 6.10% due Aaa/AAA 2,694,975
8/1/02 (Insured: MBIA)
1,000,000 Albuquerque Hospital Revenue Series A, 6.375% due Aaa/AAA 1,085,760
5/15/04 pre-refunded 5/15/01 @ 102 (St. Joseph
Healthcare Systems Project)
300,000 Albuquerque Hospital Revenue Series A, 6.625% due Aaa/AAA 327,588
5/15/10 pre-refunded 5/15/01 @ 102 (St. Joseph
Healthcare Systems Project)
1,040,000 Albuquerque Hospital Revenue Series B, 6.20% due Aaa/AAA 1,058,096
8/1/02 (Insured: MBIA)
1,775,000 Albuquerque Hospital Revenue Series B, 6.60% due Aaa/AAA 1,810,713
8/1/07 (Insured: MBIA)
2,235,000 Albuquerque Industrial Development Revenue, 5.80% due A1/NR 2,378,152
6/1/07 (Universal Printing & Publishing Project; LOC:
First Security Bank)
1,195,000 Albuquerque MFHR Series 1991, 8.50% due 7/1/21 put NR/NR 1,228,759
7/1/01, (Beach Apartment Project)
2,915,000 Albuquerque MFHR Series 1994, 6.75% due 1/1/24 put NR/NR 2,945,607
1/1/04, (Dorado Village Project)
290,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.00% Aaa/AAA 299,486
due 6/1/01 (Evangelical Lutheran Good Samaritan
Society Project; Insured: FSA)
305,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.10% Aaa/AAA 318,551
due 6/1/02 (Evangelical Lutheran Good Samaritan
Society Project; Insured: FSA)
170,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.20% Aaa/AAA 179,789
due 6/1/03 (Evangelical Lutheran Good Samaritan
Society Project; Insured: FSA)
50,000 Albuquerque Special Assessment District 219 Series B, NR/A- 50,069
5.65% due 7/1/01 (Water and Sewer Improvement Project;
LOC: Sumitomo Bank)
405,000 Albuquerque Special Assessment District 219 Series B, NR/A- 405,644
5.75% due 7/1/02 (Water and Sewer Improvement Project;
LOC: Sumitomo Bank)
780,000 Albuquerque Special Assessment District Series A, NR/A- 784,001
6.45% due 1/1/15 (Cottonwood Mall Project; LOC:
Sumitomo Bank)
1,500,000 Albuquerque Water & Sewer Revenue, 7.00% due 7/1/03 Aa3/AA 1,608,885
600,000 Albuquerque Water & Sewer Revenue, 6.25% due 7/1/08 Aa3/AA 656,688
1,750,000 Albuquerque Water & Sewer Revenue Series 1990-C, 7.00% Aa3/AA 1,880,130
due 7/1/05 partially pre-refunded 7/1/00 @ 102
1,000,000 Albuquerque Water & Sewer System Revenue Refunding Aa3/AA 1,071,750
Series B, 6.95% due 7/1/02
585,000 Belen New Mexico Gasoline Tax Revenue Refunding & NR/NR 598,122
Improvement, 5.40% due 1/1/11
4,500,000 Bernalillo County Multi Family Housing Revenue Series NR/AA- 4,794,120
1994-A, 6.50% due 10/1/19 put 10/1/05, (Village
Apartments Project; Insured: AXA Reinsurance Co.)
2,300,000 Bernalillo Multi Family Housing Revenue Series 1988, NR/AA- 2,438,069
5.80% due 11/1/25 put 11/1/06, (Sunchase Apartments
Project; Insured: AXA Reinsurance Co.)
500,000 Bloomfield Gross Reciepts Tax Revenue Series 1992-B, Baa/NR 517,795
6.50% due 8/1/07
415,000 Cibola County Gross Receipts Tax Revenue, 5.70% due Aaa/AAA 465,265
11/1/07 (Insured: AMBAC)
495,000 Cibola County Gross Receipts Tax Revenue, 5.875% due Aaa/AAA 559,968
11/1/08 (Insured: AMBAC)
555,000 Cibola County Gross Receipts Tax Revenue, 6.00% due Aaa/AAA 639,782
11/1/10 (Insured: AMBAC)
1,000,000 Dona Ana County Gross Receipts Tax, 6.00% due 6/1/14 NR/AA 1,108,220
(Insured: Asset Guaranty)
1,500,000 Dona Ana County Gross Receipts Tax Refunding and NR/AA 1,654,380
Improvement Series 1993, 5.875% due 6/1/09 (Insured:
Asset Guaranty)
330,000 Dona Ana County Subordinated Gross Receipts Tax NR/NR 338,408
Revenue, 6.125% due 6/1/03
260,000 Dona Ana County Subordinated Gross Receipts Tax NR/NR 266,885
Revenue, 6.25% due 6/1/04
600,000 Farmington Pollution Control Revenue, 4.05% due 9/1/24 P1/A1+ 600,000
put 10/01/98 (daily demand note) (LOC: Barclays Bank)
750,000 Farmington Utility Systems Refunding Revenue, 5.20% Aaa/AAA 768,150
due 5/15/00 (Insured: FGIC)
800,000 Gallup New Mexico Pollution Control Revenue Refunding, Aaa/AAA 823,840
6.65% due 8/15/17 (Plains Electric Generation Project:
Insured MBIA)
775,000 Gallup Pollution Control Revenue Refunding, 6.20% due Aaa/AAA 798,064
8/15/03 (Plains Electric Generation Project; Insured:
MBIA)
1,500,000 Gallup Pollution Control Revenue Refunding Series Aaa/AAA 1,544,670
1992, 6.45% due 8/15/06 (Insured: MBIA)
500,000 Gallup Sales Tax Revenue Sinking Fund Bonds Series Aaa/AAA 517,955
1992-A, 6.75% due 6/1/06 (Insured: MBIA)
1,000,000 Guam Limited Obligation Highway Series 1992-A, 5.50% Aaa/AAA 1,012,870
due 5/1/99 (Insured: FSA)
280,000 Hidalgo County Municipal School District of Lordsburg, NR/NR 292,698
6.875% due 7/1/00
300,000 Hidalgo County Municipal School District of Lordsburg, NR/NR 320,550
6.875% due 7/1/01
315,000 Hidalgo County Municipal School District of Lordsburg, NR/NR 342,922
6.875% due 7/1/02
380,000 Las Cruces Gross Receipt Tax Revenue Series 1995, A/NR 400,220
6.00% due 6/1/01 (South Central Solid Waste Authority
Project)
1,175,000 Las Cruces Gross Receipts Refunding Revenue, 5.45% due A/A 1,201,414
12/1/99
625,000 Las Cruces Gross Receipts Refunding Revenue, 5.85% due A/A 662,687
12/1/01
1,500,000 Las Cruces Gross Receipts Refunding Revenue Series A/A 1,630,920
1992, 6.25% due 12/1/05
420,000 Las Cruces Joint Utility Refunding and Improvement A1/NR 483,748
Revenue, 6.50% due 7/1/07
780,000 Las Cruces Joint Utility Refunding and Improvement A1/NR 867,079
Revenue, 6.50% due 7/1/07
1,160,000 Las Cruces Municipal Sales Tax Revenue Series 1991, A/NR 1,229,333
6.50% due 12/1/06
230,000 Lordsburg Gross Receipts and Lodgers Tax Revenue, NR/NR 233,901
8.625% due 12/1/02
1,150,000 Lordsburg Pollution Control Revenue, 6.50% due 4/1/13 A2/A 1,271,060
(Phelps Dodge Project)
350,000 Los Alamos County Incorporated Utility Series A, 5.80% Aaa/AAA 388,213
due 7/1/06 (Insured: FSA)
3,445,000 Los Alamos County Utility System Revenue Aaa/AAA 3,803,659
RefundingSeries A, 6.00% due 7/1/08 (Insured: FSA)
210,000 Los Lunas Industrial Development Revenue Refunding NR/AA- 212,146
Series A, 7.50% due 5/1/09 (Mondel Plaza Project;
Insured: Continental Casualty)
350,000 Milan General Obligation Sanitary Sewer Series 1994, NR/NR 390,012
7.00% due 9/1/13
430,000 New Mexico Educational Assistance Foundation Revenue, Aaa/NR 448,916
6.05% due 12/1/00
140,000 New Mexico Educational Assistance Foundation Revenue, Aaa/NR 144,736
5.20% due 12/1/01
1,000,000 New Mexico Educational Assistance Foundation Revenue, Aaa/NR 1,063,340
6.20% due 12/1/01
750,000 New Mexico Educational Assistance Foundation Revenue, A/NR 792,450
5.50% due 11/1/03
655,000 New Mexico Educational Assistance Foundation Revenue, Aaa/NR 713,564
6.45% due 12/1/04
840,000 New Mexico Educational Assistance Foundation Revenue, A/NR 888,451
6.85% due 12/1/05
2,210,000 New Mexico Educational Assistance Foundation Revenue, Aaa/NR 2,375,728
6.65% due 3/1/07
25,000 New Mexico Educational Assistance Foundation Student Aa/NR 26,194
Loan Revenue, 5.40% due 8/1/04
2,870,000 New Mexico Educational Assistance Student Loan, 6.70% Aaa/AAA 3,091,765
due 4/1/02 (Insured: AMBAC)
2,605,000 New Mexico Educational Assistance Student Loan, 5.00% Aaa/NR 2,673,772
due 12/1/02
1,800,000 New Mexico Educational Assistance Student Loan, 6.50% Aaa/NR 1,926,702
due 3/1/04
140,000 New Mexico Educational Assistance Student Loan Aaa/AAA 145,272
Foundation Revenue Series A, 6.55% due 4/1/00
(Insured: AMBAC)
690,000 New Mexico Educational Assistance Student Loan Series A/NR 711,935
2-B, 5.75% due 12/1/08
1,195,000 New Mexico Equipment Loan Council Hospital Revenue, A3/NR 1,329,700
7.50% due 6/1/02 (San Juan Regional Medical Center
Inc. Project)
1,490,000 New Mexico Equipment Loan Council Hospital Revenue, A3/NR 1,669,202
7.80% due 6/1/05 pre-refunded 6/1/01, (San Juan
Regional Medical Center Inc. Project)
575,000 New Mexico Equipment Loan Council Hospital Revenue, A3/NR 644,155
7.80% due 6/1/06 pre-refunded 6/1/01, (San Juan
Regional Medical Center Inc. Project)
2,030,000 New Mexico Equipment Loan Council Hospital Revenue, A3/A- 2,307,948
6.40% due 6/1/09 (Memorial Med Center Project)
225,000 New Mexico Equipment Loan Council Hospital Revenue, A3/NR 252,628
7.90% due 6/1/11 pre-refunded 6/1/01, (San Juan
Regional Medical Center Inc. Project)
700,000 New Mexico Finance Authority Revenue, 4.85% due 6/1/04 Aaa/AAA 734,951
835,000 New Mexico Finance Authority Series A, 5.90% due Aaa/AAA 919,602
6/1/04 (Unrefunded Balance Public Project)
780,000 New Mexico Hospital Equipment Loan, 5.60% due 6/1/02 A3/A- 823,516
(Memorial Medical Center Project)
575,000 New Mexico Hospital Equipment Loan, 5.70% due 6/1/03 A3/A- 615,469
(Memorial Medical Center Project)
235,000 New Mexico Hospital Equipment Loan, 5.00% due 12/1/08 Aa2/AA 248,224
(Catholic Health Initiatives Project)
1,140,000 New Mexico Hospital Equipment Loan, 5.20% due 12/1/10 Aa2/AA 1,205,333
(Catholic Health Initiatives Project)
955,000 New Mexico MFA MFMR Series 1991-C, 6.75% due 7/1/11 NR/AAA 957,216
(Collateralized: FNMA)
1,375,000 New Mexico MFA MFMR Series 1991-C, 6.75% due 7/1/11 NR/AAA 1,378,080
(Collateralized: FNMA)
1,000,000 New Mexico MFA SFMR, 5.40% due 7/1/18 NR/AAA 1,022,780
435,000 New Mexico MFA SFMR Series 1992 A-1, 6.30% due 1/1/02 Aa1/AA 455,889
975,000 New Mexico MFA SFMR Series 1992 A-1, 6.90% due 7/1/08 NR/AAA 1,040,744
3,395,000 New Mexico MFA SFMR Series 1992-1, 6.85% due 7/1/10 Aa1/AA 3,562,645
90,000 New Mexico MFA SFMR Series A, 7.00% due 7/1/14 A1/AA 63,360
1,021,763 New Mexico MFA SFMR Series A, 0% due 7/1/15 Aa/AA 186,349
420,000 New Mexico MFA SFMR Series A-1, 6.05% due 1/1/00 Aa1/AA 428,446
415,000 New Mexico MFA SFMR Series A-1, 6.05% due 7/1/00 Aa1/AA 426,566
220,000 New Mexico MFA SFMR Series A-2, 6.20% due 1/1/01 Aa1/AA 226,787
1,000,000 New Mexico MFA SFMR Series A-3, 5.25% due 7/1/17 NR/AAA 1,023,830
125,000 New Mexico MFA SFMR Series B-2, 5.80% due 1/1/09 NR/AAA 130,891
70,000 New Mexico MFA SFMR Series C, 7.80% due 7/1/99 Aaa/AAA 71,041
(Insured: FGIC)
360,000 New Mexico MFA SFMR Series F-2, 5.60% due 7/1/17 NR/AAA 374,123
(Collateralized: FNMA)
130,000 New Mexico MFA SFMR Series G-2, 4.85% due 1/1/07 NR/AAA 131,756
210,000 New Mexico MFA SFMR Series G-2, 4.875% due 7/1/08 NR/AAA 213,409
170,000 New Mexico MFA SFMR Series H, 5.45% due 1/1/06 NR/AAA 178,686
(Collateralized: FNMA/GNMA)
175,000 New Mexico MFA SFMR Series H, 5.45% due 7/1/06 NR/AAA 184,455
(Collateralized: FNMA/GNMA)
100,000 New Mexico MFA SFMR Series PG-B-2, 5.80% due 7/1/09 NR/AAA 106,070
390,000 New Mexico State University Revenues, 5.85% due 4/1/99 A1/AA 394,859
380,000 New Mexico State University Revenues, 5.85% due 4/1/00 A1/AA 391,837
335,000 New Mexico State University Revenues, 5.85% due 4/1/01 A1/AA 351,412
300,000 New Mexico State University Revenues, 5.40% due 4/1/11 A1/AA 308,874
75,000 New Mexico Student Loan Revenue, 5.55% due 12/1/01 A/NR 77,790
2,000,000 Puerto Rico Building Authority Revenue, 6.10% due Baa1/A 2,081,300
7/1/00
2,000,000 Puerto Rico Electric Power Authority Power Refunding Aaa/AAA 2,143,240
Series F, 5.25% due 7/1/10 (when issued)
1,500,000 Puerto Rico Electric Power Revenue Refunding Series Baa1/BBB+ 1,550,880
1992-Q, 5.70% due 7/1/00
750,000 Puerto Rico Public Improvement General Obligation, NR/AAA 837,548
6.60% due 7/1/04 pre-refunded 7/1/02 @ 101.5
100,000 Questa Independent School District 9 General NR/NR 100,014
Obligation School Bldg., 8.50% due 10/1/00
150,000 Rio Grande Natural Gas Association Natural Gas System Baa1/BBB+ 152,939
Revenue, 5.00% due 7/1/00
375,000 Rio Rancho Gross Receipts Tax Revenue Series 1995-A, Aaa/AAA 388,864
5.50% due 12/1/00 (Insured: FSA)
440,000 Rio Rancho Gross Receipts Tax Revenue Series 1995-A, Aaa/AAA 472,648
5.50% due 12/1/03 (Insured: FSA)
500,000 Rio Rancho Water and Wastewater System, 8.00% due Aaa/AAA 568,820
5/15/02 (Insured: FSA)
1,000,000 Rio Rancho Water and Wastewater System, 6.50% due Aaa/AAA 1,160,710
5/15/06 (Insured: FSA)
1,000,000 San Juan County Central Consolidated School District Aaa/AAA 1,067,360
22, 5.625% due 8/15/02 (Insured: FSA)
1,000,000 San Juan Gross Receipts Gas Tax Refunding Revenue A/NR 1,173,070
Series B, 7.00% due 9/15/09 pre-refunded 9/15/04 @ 101
115,000 Sandoval County Gross Receipts Tax Refunding Revenue Baa1/NR 126,807
Series 1992, 7.00% due 11/1/07
125,000 Sandoval County Gross Receipts Tax Refunding Revenue Baa1/NR 137,834
Series 1992, 7.00% due 11/1/08
135,000 Sandoval County Gross Receipts Tax Refunding Revenue Baa1/NR 148,754
Series 1992, 7.00% due 11/1/09
145,000 Sandoval County Gross Receipts Tax Refunding Revenue Baa1/NR 159,716
Series 1992, 7.00% due 11/1/10
400,000 Sandoval County Landfill Revenue, 5.70% due 7/15/13 NR/NR 408,612
340,000 Santa Fe County Office and Training Facilities Project Aaa/NR 387,005
Revenue Series 1990, 9.00% due 7/1/01 (ETM)
356,000 Santa Fe County Office and Training Facilities Project Aaa/NR 412,579
Revenue Series 1990, 9.00% due 1/1/02 (ETM)
372,000 Santa Fe County Office and Training Facilities Project Aaa/NR 439,596
Revenue Series 1990, 9.00% due 7/1/02 (ETM)
406,000 Santa Fe County Office and Training Facilities Project Aaa/NR 496,181
Revenue Series 1990, 9.00% due 7/1/03 (ETM)
443,000 Santa Fe County Office and Training Facilities Project Aaa/NR 558,636
Revenue Series 1990, 9.00% due 7/1/04 (ETM)
626,000 Santa Fe County Office and Training Facilities Project Aaa/NR 858,403
Revenue Series 1990, 9.00% due 1/1/08 (ETM)
1,000,000 Santa Fe County Project Revenue Series A, 5.50% due NR/NR 1,005,910
5/15/15 (El Castillo Retirement Project)
170,000 Santa Fe Educational Facilities Revenue, 4.75% due NR/BBB- 172,426
3/1/04 (St. Johns College Project)
100,000 Santa Fe Educational Facilities Revenue, 4.85% due NR/BBB- 101,706
3/1/05 (St. Johns College Project)
190,000 Santa Fe Educational Facilities Revenue, 5.00% due NR/BBB- 194,604
3/1/06 (St. Johns College Project)
200,000 Santa Fe Educational Facilities Revenue, 5.00% due NR/BBB- 204,544
3/1/07 (St. Johns College Project)
210,000 Santa Fe Educational Facilities Revenue, 5.10% due NR/BBB- 215,361
3/1/08 (St. Johns College Project)
1,215,000 Santa Fe Educational Facilities Revenue, 5.40% due NR/BBB- 1,234,671
3/1/17
2,105,000 Santa Fe Gross Receipts Tax Refunding & Improvement Aaa/AAA 2,328,909
Series A, 6.00% due 6/1/04 (Insured: AMBAC)
1,150,000 Santa Fe Gross Receipts Tax Refunding & Improvement Aaa/AAA 1,262,895
Series A, 5.50% due 6/1/06 (Insured: AMBAC)
240,000 Santa Fe Housing Development Corporation Multi Family A/NR 250,447
Revenue Refunding Series 1993-A, 5.50% due 2/1/04
(Villa Camino Consuelo Project)
1,900,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 1,649,086
7/1/02 (Insured: FGIC)
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 1,606,920
7/1/03 (Insured: FGIC)
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 1,498,039
7/1/04 (Insured: FGIC)
1,895,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 1,358,658
7/1/05 (Insured: FGIC)
500,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 333,590
7/1/06 (Insured: FGIC)
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 895,303
7/1/11 (Insured: FGIC)
1,000,000 Santa Fe Industrial Revenue Housing Refunding, 7.25% NR/NR 1,065,860
due 12/1/05 (Ponce de Leon Project; Guaranteed: Health
Care REIT)
370,000 Santa Fe Refuse Disposal Systems Improvement Net A3/NR 395,752
Revenue Series 1996-B, 5.50% due 6/1/04
325,000 Santa Fe Refuse Disposal Systems Revenue, 5.50% due A3/NR 344,705
6/1/03
780,000 Santa Fe SFMR, 5.25% due 11/1/05 (Collateralized: Aaa/NR 801,785
FNMA/GNMA)
420,000 Santa Fe SFMR, 6.00% due 11/1/10 (Collateralized: Aaa/NR 442,474
FNMA/GNMA)
350,000 Santa Fe SFMR, 6.10% due 11/1/11 Aaa/NR 375,708
675,000 Santa Fe SFMR, 6.20% due 11/1/16 (Collateralized: Aaa/NR 724,680
FNMA/GNMA)
442,545 Santa Fe SFMR Series 1991, 8.45% due 12/1/11 (Insured: Aaa/NR 475,081
FGIC)
250,000 Santa Fe Solid Waste Management Agency Facility NR/NR 274,025
Revenue, 5.90% due 6/1/05
875,000 Santa Fe Solid Waste Management Facilities Revenue, NR/NR 983,876
6.10% due 6/1/07
195,000 Santa Rosa Consolidated School District 8 Guadalupe & Baa3/NR 204,777
San Miguel Counties GO Series 1991, 7.00% due 8/1/03
210,000 Santa Rosa Consolidated School District 8 Guadalupe & Baa3/NR 220,530
San Miguel Counties GO Series 1991, 7.00% due 8/1/04
285,000 Socorro Health Facility Refunding Revenue, 6.00% due Aaa/AAA 316,626
5/1/08 (Evangelical Lutheran Good Samaritan Project;
Insured: AMBAC)
1,325,000 Taos County Local Hospital Gross Receipts Tax Revenue NR/AA 1,367,546
Series 1992, 6.125% due 12/1/01 (Insured: Asset
Guaranty)
245,000 Torrance County Environmental Revenue Series 1992, NR/NR 251,813
6.875% due 6/1/03
500,000 U.S. Virgin Islands Public Finance Authority, 7.70% NR/AAA 530,870
due 10/1/04 pre-refunded 10/01/99 @ 102
1,000,000 U.S. Virgin Islands Public Finance Authority Revenue NR/NR 1,092,060
Refunding Series A, 6.90% due 10/1/01 (ETM)
330,000 U.S. Virgin Islands Public Finance Authority Series NR/NR 369,844
1992-A, 7.00% due 10/1/02 (ETM)
1,075,000 U.S. Virgin Islands Special Tax General Obligation NR/NR 1,181,833
Series 1991, 7.75% due 10/1/06 pre-refunded 10/01/01 @
102(Hugo Insurance Claims Fund Project)
2,760,000 U.S. Virgin Islands Water & Power Authority Series A, NR/NR 3,036,193
7.40% due 7/1/11
100,000 University of New Mexico Higher Educational Revenue, Aaa/AA 104,703
7.50% due 6/1/00
1,105,000 Villa Hermosa Multi Family Housing Revenue, 5.85% due NR/AAA 1,174,151
11/20/16 (Collateralized: GNMA)
1,385,000 Western New Mexico University System Revenue Series Baa2/NR 1,656,197
1995, 7.75% due 6/15/19 pre-refunded 6/15/04
TOTAL INVESTMENTS (Cost $144,227,271) $ 152,869,343
<FN>
See notes to financial statements.
</FN>
</TABLE>
Independent auditor's report
To the Board of Trustees and Shareholders
Thornburg New Mexico Intermediate Municipal Fund
Santa Fe, New Mexico
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Thornburg New Mexico Intermediate Municipal
Fund, series of Thornburg Investment Trust as of September 30, 1998, the related
statement of operations, the statement of changes in net assets, and the
financial highlights for the periods indicated. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. We conducted our audits in accordance
with generally accepted auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 1998, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion. In our opinion, the financial statements and
financial highlights referred to above present fairly, in all material respects,
the financial position of Thornburg New Mexico Intermediate Municipal Fund as of
September 30, 1998, the results of its operations, the changes in its net assets
and the financial highlights for the periods indicated, in conformity with
generally accepted accounting principles.
New York, New York
October 23, 1998
Investment Manager
Thornburg Management Company, Inc.
119 East Marcy Street
Santa Fe, New Mexico 87501
(800) 847-0200
Principal Underwriter
Thornburg Securities Corporation
119 East Marcy Street
Santa Fe, New Mexico 87501
(800) 847-0200
www.thornburg.com
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information. Performance data
quoted represent past performance and do not guarantee future results.
Annual Report September 30, 1998
Thornburg New Mexico
Intermediate Municipal Fund
