Dear Fellow Shareholder:
I am pleased to report the Fund's total return for the period ended March 31,
1999 in the table below. Total returns for both A shares and C shares reflect
results for investors who held shares for the entire periods shown. Positive
results were recorded for all periods.
<TABLE>
<CAPTION>
Total return performance as of 3/31/99
Inception: 10/2/95
A Shares C Shares
Cal. Qtr. 6 Months 3 Years 1 Year Since Incept. Cal. Qtr. 6 Months 1 Year 3 Years Since Incept.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value 8.67% 30.38% 30.40%** 13.18% 28.99%** 8.47% 30.38% 12.19% 29.36%** 27.99%**
Max.Offering Price 3.78% 24.50% 28.43%** 8.10% 27.31% 7.47%* 24.50% 12.19% 29.36%** 27.99%**
<FN>
Past performance cannot guarantee future results.
* Assumes redemption during the period.
** Annualized.
</FN>
</TABLE>
As has been the case since the October market low, strength in technology and
financial service issues was evident in portfolio performance through March.
Since mid-April, however, market leadership has shifted materially. Improvement
in Asian economies, coupled with our own healthy economy and a better commodity
pricing environment, spurred a market rotation into cyclical and other modestly
appraised equities. Issues in the Value Fund that have benefited include:
Atlantic Richfield, Occidental Petroleum, Union Pacific, El Paso Energy, and
Henkel. Recent additions to the portfolio, such as Dow Chemical, Hercules Inc.
(chemicals), and Boeing, have also benefited. A few changes in industry
concentration since March 31 are worth mentioning: technology holdings have been
reduced to 17% from 23% at the end of the quarter, and investment management
from 16% to 12%. The latter reflects a reduction of Charles Schwab to less than
3.5% of the portfolio. Through appreciation, Schwab had become over 7% of the
portfolio. While we continue to expect extraordinary results from Schwab as a
leading on-line financial service provider, from a target price perspective, the
stock had exceeded our expectations in a very short period of time. On March 31,
1999 we made an income distribution of $0.105 per share on Class A shares and
$0.04 per share on Class C shares. For more detailed descriptive information on
portfolio holdings, including links to the home pages of companies held in your
portfolio, please visit our Website at www.thornburg.com. If you do not have
internet access, call us at (800) 847-0200 and we will send this information to
you. Thank you for investing with us. We appreciate your trust and confidence.
Respectfully,
William V. Fries, CFA
Portfolio Manager
<PAGE>
ASSETS
Investments, at value (cost $280,473,898) $ 341,729,250
Cash 489,867
Receivable for securities sold 1,470,779
Receivable for fund shares sold 8,882,140
Unrealized gain on forward exchange contracts (Note 6) 2,713,989
Dividend receivable 787,002
Prepaid expenses and other assets 45,602
Total Assets 356,118,629
LIABILITIES
Payable for securities purchased 1,718,399
Payable for fund shares redeemed 231,782
Unrealized loss on forward exchange contracts (note 6) 649,135
Payable to investment advisor 271,070
Covered call options written at value (proceeds received $32,099 78,750
Accounts payable and accrued expenses 304,449
Total Liabilities 3,253,585
NET ASSETS $ 352,865,044
NET ASSETS CONSIST OF:
Undistributed net investment income $ (419,403)
Net unrealized appreciation (depreciation) on investments 63,273,580
Distributions paid in excess of net realized gain 3,766,540
Net capital paid in on shares of beneficial interest 286,244,327
$ 352,865,044
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share
($248,302,071 applicable to 9,820,738 shares
of beneficial interest outstanding - Note 4) $ 25.28
Maximum sales charge, 4.50% of offering price
(4.70% of net asset value per share) 1.19
Maximum Offering Price Per Share $ 26.47
Class C Shares:
Net asset value and offering price per share* ($82,742,126)
applicable to 3,282,448 shares of beneficial interest outstandin$ 25.21
Class I Shares:
Net asset value, offering and redemption price per share ($21,820,847 applicable
to 862,317 of beneficial interest outstanding - Note 4)
$ 25.30
* Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge. See notes to financial statements.
INVESTMENT INCOME
Dividend income (net of foreign taxes
withheld of $36,897) $ 2,702,980
Interest income 223,992
Total Income 2,926,972
EXPENSES
Investment advisory fees (Note 3) 1,118,133
Administration fees (Note 3)
Class A Shares 115,892
Class C Shares 36,909
Class I Shares 2,773
Distribution and service fees (Note 3)
Class A Shares 231,785
Class C Shares 295,270
Transfer agent fees 128,872
Registration & filing fees 49,901
Custodian fees 69,235
Professional fees 16,915
Accounting fees 10,885
Trustee fees 2,156
Other expenses 16,551
Total Expenses 2,095,277
Less:
Expenses waived by investment advisor (Note 3) (13,860)
Net Expenses 2,081,417
Net Investment Income 845,555
REALIZED AND UNREALIZED GAIN - NOTE 5
Net realized gain (loss) on:
Investments 6,768,492
Foreign currency transactions (1,921,524)
4,846,968
Net unrealized appreciation (depreciation)
Investments 55,186,099
Foreign currency translation 3,531,020
58,717,119
Net Realized and Unrealized
Gain on Investments 63,564,087
Net Increase (Decrease) in Net Assets
Resulting From Operations $64,409,642
See notes to financial statements.
INCREASE (DECREASE) IN
NET ASSETS FROM:
OPERATIONS:
Net investment income $ 845,555 $ 1,118,961
Net realized gain (loss) on investments and
foreign currency transactions 4,846,968 (168,836)
Increase (decrease) in unrealized appreciation on
investments and foreign currency translation 58,717,119 (10,040,414)
Net Increase (Decrease) in Net Assets
Resulting from Operations 64,409,642 (9,090,289)
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares (1,024,114) (938,716)
Class C Shares (131,018) (27,348)
Class I Shares (110,966) 0
From realized gains
Class A Shares 0 (4,677,701)
Class C Shares 0 (746,009)
From return of capital
Class A Shares 0 (165,589)
Class C Shares 0 (4,824)
FUND SHARE TRANSACTIONS - (Note 4)
Class A Shares 50,831,610 95,534,687
Class C Shares 27,179,587 35,229,776
Class I Shares 19,704,242 0
Net Increase in Net Assets 160,858,983 115,113,987
NET ASSETS:
Beginning of period 192,006,061 76,892,074
End of period $ 352,865,044 $ 192,006,061
See notes to financial statements.
<PAGE>
Note 1 - Organization
Thornburg Value Fund hereinafter referred to as the "Fund," is a series of
Thornburg Investment Trust (the "Trust"). The Trust was organized as a
Massachusetts business trust under a Declaration of Trust dated June 3, 1987 and
is registered as a diversified, open-end management investment company under the
Investment Company Act of 1940, as amended. The Trust is currently issuing seven
series of shares of beneficial interest in addition to those of the Fund:
Thornburg Limited Term U.S. Government Fund, Thornburg New Mexico Intermediate
Municipal Fund, Thornburg Intermediate Municipal Fund, Thornburg Limited Term
Income Fund, Thornburg Florida Intermediate Municipal Fund, Thornburg Global
Value Fund and Thornburg New York Intermediate Municipal Fund. Each series is
considered to be a separate entity for financial reporting and tax purposes. The
Fund seeks long-term capital appreciation by investing primarily in domestic
equity securities selected on a value basis. The Fund currently offers three
classes of shares of beneficial interest, Class A, Class C and Institutional
Class (Class I) 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 are sold at net asset
value without a sales charge at the time of purchase, but are subject to a
service fee and a distribution fee, (iii) Class I shares are sold at net asset
value without a sales charge at the time of purchase, and (iv) the respective
classes have different reinvestment privileges. Additionally, the 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. Currently,
class specific expenses of the Fund are limited to distribution fees,
administrative fees and certain transfer agent expenses.
Note 2 - Significant Accounting Policies Significant accounting policies of the
Fund are as follows:
Valuation of Securities: In determining net asset value, investments are stated
at value based on latest sales prices reported on national securities exchanges
on the last business day of the period. Investments for which no sale is
reported are valued at the mean between bid and asked prices. Securities for
which market quotations are not readily available are valued at fair value as
determined by management and approved in good faith by the Board of Trustees.
Short term obligations having remaining maturities of 60 days or less are valued
at amortized cost which approximates market value. When the Fund writes a call
option, an amount equal to the premium received by the Fund is included in the
Fund's statement of assets and liabilities as a liability. The amount of the
liability is subsequently marked-to-market to reflect the current market value
of the option written. The current market value of a traded option is the last
sales price on the principal exchange on which such option is traded, or in the
absence of such sale, the latest ask quotation. When an option expires on its
stipulated expiration date or the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or loss if the cost of a closing purchase
transaction exceeds the premium received when the option was sold) without
regard to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. When a call option is
exercised, the Fund realizes a gain or loss from the sale of the underlying
security and the proceeds from such sale are increased by the premium originally
received. The risk in writing a call option is that the Fund gives up the
opportunity of profit if the market price of the security increases. The Fund
also has the additional risk of not being able to enter into a closing
transaction if a liquid secondary market does not exist. Foreign Currency
Translation: Porfolio securities securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars based on the
exchange rate of such currencies against the U.S. dollar on the date of
valuation. Purchases and sales of securities and income items denominated in
foreign currencies are translated into U.S. dollars at the exchange rate in
effect on the translation date. When the Fund purchases or sells foreign
securities it will customarily enter into a foreign exchange contract to
minimize foreign exchange risk from the trade date to the settlement date of
such transactions. The Fund does not separately report the effect of changes in
foreign exchange rates from changes in market prices on securities held. Such
changes are included in net realized and unrealized gain or loss from
investments. 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 their taxable income to its shareholders.
Therefore, no provision for Federal income tax is required. When-Issued and
Delayed Delivery Transactions: The Fund may engage in when-issued or delayed
delivery transactions. To the extent a 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 market 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. Dividends: Dividends to the shareholders are paid quarterly 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 realized capital gains, to the extent available, will be
distributed annually. Distributions to shareholders are based on income tax
regulations and therefore, their characteristics may differ for financial
statement and tax purposes. General: Securities transactions are accounted for
on a trade date basis. Interest income is accrued as earned and dividend income
is recorded on the ex-dividend date. 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 to the
Fund for which the fees are payable at the end of each month. For the six months
ended March 31, 1999, these fees were payable at annual rates ranging from 7/8
of 1% to 27/40 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, 1999, the Adviser voluntarily waived certain operating expenses amounting to
$13,860 for the Fund. The Fund has underwriting agreements with Thornburg
Securities Corporation (the "Distributor"), which acts as the Distributor of the
Fund's shares. For the six months ended March 31, 1999, the Distributor earned
commissions aggregating $103,922 from the sale of Class A shares of the Fund,
and collected contingent deferred sales charges aggregating $14,907 from
redemptions of Class C shares of the Fund. 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 1/4 of 1% annum of its 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. The Fund has also
adopted Distribution Plans pursuant to Rule 12b-1, applicable only to the Fund's
Class C shares under which the Fund compensated the Distributor for services in
promoting the sale of Class C shares of the Fund at an annual rate of up to 1%
of the average daily net assets attributable to Class C shares. Total fees
incurred by each class of shares of the Fund under its respective Service and
Distribution Plans for the six months ended March 31, 1999 are set forth in the
statement of operations. 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, 1999 there were an unlimited number of shares of beneficial
interest authorized. Sales of Class I of the Value Fund commenced November 2,
1998. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Thornburg Value Fund
Six Months Ended March 31, 1999 Year Ended September 30, 1998
Shares Amount Shares Amount
Class A Shares
<S> <C> <C> <C> <C>
Shares sold 3,385,874 $ 79,561,518 5,364,791 $114,402,496
Shares issued to shareholders
in reinvestment of dividends 36,439 921,184 290,340 5,509,526
Shares repurchased (1,328,632) (29,651,092) (1,204,237) (24,377,335)
Net Increase 2,093,681 $ 50,831,610 4,450,894 $ 95,534,687
Class C Shares
Shares sold 1,270,860 $ 29,994,610 1,712,966 $ 36,707,174
Shares issued to shareholders
in reinvestment of distrib 3,955 99,658 37,794 705,580
Shares repurchased (127,244) (2,914,681) (106,131 (2,182,978)
Net Increase 1,147,571 $ 27,179,587 1,644,629 $ 35,229,776
Class I Shares
Shares sold 867,805 $ 19,825,265 0 $ 0
Shares issued to shareholders
in reinvestment of distrib 4,372 110,656 0 0
Shares repurchased (9,860) (231,679) 0 0
Net Increase 862,317 $ 19,704,242 0 $ 0
</TABLE>
Note 5 - Securities Transactions
For the six months ended March 31, 1999, the Fund had purchases and sales
transactions of investment securities of $135,568,232 and $57,025,597,
respectively. The cost of investments for Federal income tax purpose is
$280,473,898 for the Fund. As of March 31,1999, the Fund has deferred capital
losses and currency losses occuring subsequent to October 31, 1997 of $782,119
and $112,863, respectively. At March 31, 1999, net unrealized appreciation of
investments was $61,255,353 resulting from $67,990,557 gross unrealized
appreciation and $6,735,204 gross unrealized depreciation. Transactions relating
to covered call options during the six months ended March 31, 1999, are
summarized as follows:
Number of options Premium
Options written, begining of period 0 0
Options written, during the period 10,000 $ 32,099
Options exercised, during the period 0 0
Options expired, during the period 0 0
Options outstanding, end of period 10,000 $ 32,099
Note 6 - Financial Investments With Off-Balance Sheet Risk
During the six months ended March 31, 1999, the Fund was a party to financial
instruments with off-balance sheet risks, primarily currency forward exchange
contracts. A forward exchange contract is an agreement between two parties to
exchange different currencies at a specified rate at an agreed upon future date.
These contracts are purchased in order to minimize the risk to the Fund with
respect to it's foreign stock holdings from adverse changes in the relationship
between the U.S. dollar and foreign currencies. In each case these contracts
have been initiated in conjunction with foreign stock holdings. These
instruments may involve market risks in excess of the amount recognized on the
Statements of Assets and Liabilities. Such risks would arise from the possible
inability of counterparties to meet the terms of their contracts, future
movement in currency value and interest rates and contract positions that are
not exact offsets. The contract amounts indicate the extent of the Fund's
involvement in such contracts. At March 31, 1999, the Fund had outstanding
forward exchange contracts for the sale of currencies as set out below. These
contracts are reported in the financial statements at the Fund's net equity, as
measured by the difference between the forward exchange rates at the reporting
date and the forward exchange rates at the dates of entry into the contract.
<TABLE>
<CAPTION>
Contracts to sell:
<S> <C> <C>
19,689,625 Swiss Francs for 14,551,963 U.S. Dollars, June 16, 1999 1,108,128
10,373,843 Euros 11,341,723 U.S. Dollars, June 16, 1999 76,423
13,857,764 European Currency Unit for 16,578,043 U.S. Dollars, June 16, 1999 1,529,438
Unrealized gain from forward exchange contracts $2,713,989
7,424,625 Swiss Francs for 5,435,918 U.S. Dollars, June 16, 1999 ($366,476)
1,214,948,484 Japanese Yen for 10,311,875 U.S. Dollars, June 16, 1999 (53,017)
12,787,029 New Zealand Dollars for 6,771,478 U.S. Dollars, June 16, 1999 (73,295)
1,488,076 European Currency Units for 1,772,299 U.S. Dollars, June 16, 199 (156,347)
Unrealized loss from forward exchange contracts ($649,135)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Per share operating performance (for a share outstanding throughout the period)
Six Months Ended Year Ended September 30,
March 31, 1999 1998 1997 1996(a)
Class A Shares:
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.48 $ 20.42 $ 14.50 $ 11.94
Income from investment operations:
Net investment income 0.09 0.20 0.21 0.28
Net realized and unrealized
gain on investments 5.82 0.40 6.28 2.56
Total from investment operations 5.91 0.60 6.49 2.84
Less dividends from:
Net investment income (0.11) (0.17) (0.20) (0.28)
Realized capital gains 0.00 (1.35) (0.37) 0.00
Return of capital 0.00 (0.02) 0.00 0.00
Change in net asset value 5.80 (0.94) 5.92 2.56
Net asset value, end of period $ 25.28 $ 19.48 $ 20.42 $ 14.50
Total Return (b) 30.38% 3.15% 46.01% 24.02%
Ratios/Supplemental Data
Ratios to average net asset:
Net investment income 0.81% (c) 0.95% 1.35% 2.48% (c)
Expenses, after expense reductions 1.47% (c) 1.54% 1.61% 1.55% (c)
Expenses, before expense reductions 1.47% (c) 1.54% 1.61% 2.16% (c)
Portfolio turnover rate 23.04% 99.55% 78.83% 59.62%
Net assets at end of period (000) $ 248,302 $ 150,492 $ 66,893 $ 15,438
<FN>
(a) Fund commenced operations on October 2, 1995.
(b) Sales loads are not reflected in computing total return.
(c) Annualized.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Class C Shares:
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 19.45 $ 20.40 $ 14.51 $ 11.94
Income from investment operations:
Net investment income 0.00 0.03 0.07 0.18
Net realized and unrealized
gain on investments 5.80 0.39 6.27 2.57
Total from investment operations 5.80 0.42 6.34 2.75
Less dividends from:
Net investment income (0.04) 0.00 (0.08) (0.18)
Capital gains distribution 0.00 (1.35) (.37) 0.00
Return of capital 0.00 (0.02) 0.00 0.00
Change in net asset value 5.76 (0.95) 5.89 2.57
Net asset value, end of period $ 25.21 $ 19.45 $ 20.40 $ 14.51
Total Return (b) 29.89% 2.34% 44.77% 23.20%
Ratios/Supplemental Data
Ratios to average net asset:
Net investment income 0.02% (c) 0.14% 0.48% 1.73% (c)
Expenses, after expense reductions 2.25% (c) 2.36% 2.49% 2.30% (c)
Expenses, before expense reductions 2.25% (c) 2.37% 2.73% 6.51% (c)
Portfolio turnover rate 23.04% 99.55% 78.83% 59.62%
Net assets at end of period (000) $ 82,742 $ 41,513 $ 9,999 $ 1,267
<FN>
(a) Fund commenced operations on October 2, 1995.
(b) Sales loads are not reflected in computing total return.
(c) Annualized.
</FN>
</TABLE>
Class I Shares:
Net asset value, beginning of period $ 21.33
Income from investment operations:
Net investment income 0.15
Net realized and unrealized gain on investments 3.95
Total from investment operations 4.10 Less dividends from:
Net investment income (0.13)
Capital gains distribution 0.00
Return of capital 0.00
Change in net asset value 3.97
Net asset value, end of period $ 25.30
Total Return (b) 16.80%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income 1.27% (c)
Expenses, after expense reductions 0.82% (c)
Expenses, before expense reductions 1.02% (c)
Portfolio turnover rate 23.04%
Net assets at end of period (000) $ 21,821
(a) Commencment of operations.
(b) Sales loads are not reflected in computing total return.
(c) Annualized
<PAGE>
Schedule of Investments
Thornburg Value Fund March 31, 1999
CUSIPS: Class A - 885-215-731, Class C - 885-215-715, Class I -885-215-632
NASDAQ Symbols: Class A - TVAFX, Class C - TVCFX, Class I - TVIFX
COMMON STOCKS--97.20%
BANKING INSTITUTIONS (12.70%)
Bank Austria AG 144,590 $8,614,216
Bank One Corp. 260,702 14,354,904
FirstSpartan Financial Corp. 26,000 773,500
Julius Baer Holding AG 2,750 8,938,501
Ocean Financial Corp. 89,000 1,279,375
Unionbancal Corp. 275,000 9,367,187
Woronoco Bancorp Inc. 1,125 10,688
BIOTECHNOLOGY (3.10%)
Genzyme Corp. + 207,000 10,440,562
Genzyme Molecular Oncology Corp. + 23,446 87,923
CONSUMER ELECTRONICS (2.90%)
Sony Corp. 52,800 4,882,490
Sony Corp. -ADR 55,000 5,022,187
BUILDING MATERIALS (0.90%)
Dyckerhoff AG Preferred 10,784 2,915,048
DRUGS & HEALTH CARE (2.50%)
American Home Products Corp. 130,000 8,482,500
ENERGY (7.30%)
Atlantic Richfield Company 205,000 14,965,000
Occidental Petroleum Corp. 552,200 9,939,600
ENTERTAINMENT (1.10%)
Fox Entertainment Group Inc. + 135,000 3,661,875
FOOD & BEVERAGES (2.40%)
Pepsico, Inc. 210,000 8,229,375
NATURAL GAS PIPELINES (1.60%)
El Paso Energy Corp. 170,000 5,556,875
HOUSEHOLD PRODUCTS (1.70%)
Henkel KGaA Preferred 77,600 5,705,537
INVESTMENT MANAGEMENT & BROKERAGE (16.60%)
Charles Schwab and Co. 190,000 18,263,750
Federated Investors, Inc. 150,000 2,728,125
Ing Groep N.V. 126,000 6,954,920
Investment Technology Group, Inc. + 73,500 3,730,125
Jefferies Group Inc. 100,000 4,743,750
Kansas City Industries, Inc. 195,000 11,115,000
Pimco Advisors Holdings L. P. 297,300 9,346,369
RAILROADS (3.20%)
Union Pacific Corp. 201,600 10,773,000
REAL ESTATE INVESTMENT TRUSTS (5.80%)
Annaly Mortgage Management, Inc. 312,100 3,199,025
JDN Realty Corp. 430,000 8,546,250
Sun Communities, Inc. + 259,500 8,239,125
TECHNOLOGY - SEMI CONDUCTORS & EQUIPMENT (6.50%)
Brooks Automation, Inc. + 198,200 4,434,725
Dallas Semiconductor Corp. 130,000 5,021,250
Intel Corp. 80,000 9,510,000
Lam Research Corp. + 115,000 3,335,000
TECHNOLOGY - COMPUTERS & PERIPHERALS (9.60%)
EMC Corp. + 50,000 6,387,500
Hewlett Packard Company 158,000 10,714,375
Seagate Technology, Inc. + 230,000 6,799,375
Sun Microsystems Inc. 70,000 8,754,375
TECHNOLOGY - SOFTWARE (6.20%)
Advent Software, Inc. + 152,500 7,625,000
Peoplesoft, Inc. + 330,000 4,826,250
The Learning Company, Inc. + 302,000 8,758,000
TELECOMMUNICATION SERVICES (7.00%)
Bell Atlantic Corp. 173,800 8,983,287
Telecom Corporation Of New
Zealand ADR 170,000 6,630,000
U. S. West Inc. 150,000 8,259,375
TELEPHONE EQUIPMENT (3.70%)
Fore Systems 163,000 3,081,719
Northern Telecom Limited 155,000 9,629,375
TRANSPORTATION (2.20%)
Avis Rental A Car Inc. 277,600 7,686,050
CLOSED END FUNDS (0.20%)
New Germany Fund 70,000 835,625
TOTAL COMMON STOCKS (Cost $270,882,711) 332,138,063
COMMERCIAL PAPER--2.80%
American General Finance, 4.78% due 4/1/1999 1,000,000 1,000,000
Anheuser Busch Inc., 4.81% due 4/5/1999 900,000 899,519
Commercial Credit Company, 4.86% due 4/7/1999 2,000,000 1,998,380
Commercial Credit Company, 4.86% due 4/12/1999 3,200,000 3,195,248
Exxon Project Inv., 4.90% due 4/9/1999 1,100,000 1,098,802
GTE Funding Inc., 4.90% due 4/5/1999 1,400,000 1,399,238
TOTAL COMMERCIAL PAPER (Cost $9,591,187) 9,591,187
EQUITY OPTION--0.00%
MISCELLANEOUS (0.00%)
Schwab Charles Corporation (10,000) (78,750)
TOTAL CALL OPTION WRITTEN (Cost $(32,099)) (78,750)
TOTAL INVESTMENTS (Cost $280,441,799)* $ 341,650,500
+Non-income producing.
See notes to unaudited financial statements.
