Thornburg New Mexico Intermediate Municipal Fund
All data as of 9.30.99
Fund Facts
Thornburg New Mexico Intermediate Municipal Fund
A Shares D Shares
SEC Yield ............... 3.89% 3.71%
Taxable Equivalent Yields 7.04% 6.71%
NAV ..................... $ 12.92 $ 12.93
Max. Offering Price ..... $ 13.18 $ 12.93
Total returns (Annual Average - After Subtracting Maximum Sales Charge)
One Year (1.43)% N/A
Five Year ............... 4.73% N/A
Since Inception ......... 5.69% (0.61)%
Inception Date (6.18.1991) (6.1.1999)
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
2.00%. The Fund's Class C Shares were converted to Class A Shares on January 31,
1996. The date quoted represent past performance and may not be construed as a
guarantee of future results.
Letter to shareholders
November 3, 1999
Dear Fellow Shareholder,
The fiscal year ending September 30, 1999 continued a period of change in the
bond market. After falling to their lowest levels in several years in October
1998, interest rates have risen steadily throughout 1999. The net asset value of
the A shares decreased 53 cents per share to $12.92 over the year. If you were
with us for the entire period, you received dividends of 60.6 cents per share.
If you reinvest your dividends, you received 61.9 cents per share.
Your fund is a managed bond portfolio. Its performance over the last year is a
total of all the stories of the individual bonds in our portfolio plus a few
that we traded during the period. One typical story pertains to our investment
in $3.4 million of the Los Alamos Utility System Revenue bonds due 7/1/2008.
This is a AAA-rated, insured bond. The graph on this page compares the price
change of Thornburg New Mexico Intermediate Municipal Fund with the price change
in the Los Alamos Utility bond. Note: This graph considers market price changes
only, not total return. On September 30, 1998 this bond was worth 110.411% of
its $3.4 million maturity amount at a then market yield of 4.25%. On September
30, 1999 an increase in its market yield to 5.03% decreased the price of the
bond to 105.487% of its maturity value. In general, the price volatility of your
fund was less than that of the single Los Alamos bond.
Nothing has happened in the last several years of fluctuating interest rates to
change the ultimate maturity value of this bond, or most of the other bonds you
own through your investment in this fund. What has changed? The interim market
prices of these bonds moved lower through most of 1999, with the shortest and
highest quality bonds performing best. If interest rates drop in the future, the
longest bonds in the portfolio will perform best.
Your portfolio includes over 170 bonds from New Mexico issuers and public
borrowers in 2 U.S. territories, Approximately 89% of the portfolio is rated A
or better by one of the major rating agencies. Your bond portfolio in Thornburg
New Mexico Intermediate Municipal Fund is laddered to give a dollar weighted
average maturity of approximately 6.8 years. This is shorter than the 10-year
maximum average maturity for your fund. Percentages of the portfolio maturing in
the coming years are summarized below:
% of portfolio Cumulative %
maturing within maturing by end of
2 years = 7% year 2 = 7%
2 to 4 years = 9% year 4 = 16%
4 to 6 years = 17% year 6 = 33%
6 to 8 years = 18% year 8 = 51%
8 to 10 years = 11% year 10 = 62%
10 to 12 years = 11% year 12 = 73%
12 to 14 years = 10% year 14 = 83%
14 to 16 years = 10% year 16 = 93%
16 to 18 years = 5% year 18 = 98%
Over 18 years = 2%
Percentages can and do vary.
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 5-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
*Morningstar proprietary rating reflects historical risk adjusted performances
as of 9/30/99. 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 5 stars for the 3 year period and 5 stars for the 5 year
period. At 9/30/99, there were 1,611 bond funds with 3-year ratings and 1,241
with 5-year ratings in Morningstar's Municipal Single-State Intermediate
category. Past performance cannot guarantee future results.
Statement of assets and liabilities
September 30, 1999
ASSETS
Investments at value (cost $152,991,131) ........................ $155,486,473
Cash ............................................................ 102,414
Receivable for investments sold ................................. 605,000
Interest receivable ............................................. 2,527,884
Receivable for fund shares sold ................................. 26,645
Prepaid expenses and other assets ............................... 3,578
Total Assets ........................................... 158,751,994
LIABILITIES
Payable for securities purchased ................................ 1,364,022
Payable for fund shares redeemed ................................ 260,719
Accounts payable and accrued expenses ........................... 145,076
Payable to investment advisor (Note 3) .......................... 74,865
Dividends payable ............................................... 245,581
Total Liabilities ...................................... 2,090,263
NET ASSETS ...................................................... $156,661,731
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share ($155,539,669
applicable to 12,034,801 shares of beneficial interest
outstanding - Note 4) ........................................... $ 12.92
Maximum sales charge, 2.00 % of offering price (2.04%
of net asset value per share) 0.26
Maximum Offering Price Per Share $ 13.18
Class D Shares:
Net asset value and offering price per share * ($1,122,062
applicable to 86,789 shares of beneficial interest
outstanding - Note 4) ........................................... $ 12.93
See notes to financial statements.
Statement of operations
Year Ended September 30, 1999
INVESTMENT INCOME:
Interest income (net of premium amortized
of $462,334) ................................................ $ 8,795,167
EXPENSES:
Investment advisory fees (Note 3) ........................... 790,363
Administration fees (Note 3)
Class A Shares ..................................... 197,336
Class D Shares ..................................... 255
Distribution and service fees (Note 3)
Class A Shares ..................................... 378,246
Class D Shares ..................................... 1,957
Transfer agent fees ......................................... 85,582
Custodian fees .............................................. 103,410
Registration and filing fees ................................ 3,884
Professional fees ........................................... 18,525
Accounting fees ............................................. 14,252
Trustee fees ................................................ 2,037
Other expenses .............................................. 13,417
Total Expenses .............................................. 1,609,264
Less:
Expenses reimbursed by investment advisor (Note 3) . (36,529)
Distribution and service fees waived (Note 3) ...... (937)
Net Expenses ................................................ 1,571,798
Net Investment Income ....................................... 7,223,369
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (Note 5)
Net realized gain (loss) on investments sold ................ (192,060)
Increase (decrease) in unrealized appreciation of investments (6,146,730)
Net Realized and Unrealized
Gain (Loss) on Investments ......................... (6,338,790)
Net Increase in Net Assets Resulting
From Operations ............................................. $ 884,579
See notes to financial statements.
<TABLE>
<CAPTION>
Statements of changes in net assets
Year Ended Year Ended
September 30, 1999 September 30, 1998
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
<S> <C> <C>
Net investment income ....................................... $ 7,223,369 $ 6,988,422
Net realized gain (loss) on investments sold ................ (192,060) (39,034)
Increase (decrease) in unrealized appreciation of investments (6,146,730) 1,951,956
Net Increase in Assets Resulting from Operations ............ 884,579 8,901,344
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares ..................................... (7,214,796) (6,988,422)
Class D Shares ..................................... (8,573) 0
FUND SHARE TRANSACTIONS (Note 4):
Class A Shares ..................................... 8,748,455 5,355,054
Class D Shares ..................................... 1,133,909 0
Net Increase in Net Assets ......................... 3,543,574 7,267,976
NET ASSETS:
Beginning of year .................................. 153,118,157 145,850,181
End of year ........................................ $ 156,661,731 $ 153,118,157
See notes to financial statements ...........................
</TABLE>
Notes to financial statements
Note 1 - Organization
Thornburg New Mexico Intermediate Municipal Fund (the "Fund"), is a
non-diversified 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 two classes of shares of beneficial interest, Class A and Class
D 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 D shares are sold at net asset
value without a sales charge at the time pf purchase, and bear both a service
fee and a distribution fee, and (iii) the respective classes have different
reinvestment priviledges. 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, 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 at
4:00 pm EST or the yield equivalents when quotations are not readily available.
Securities for which quotations are not readily available are valued at fair
value as determined by the pricing service using methods which include
consideration of yields or prices of municipal obligations of comparable
quality, type of issue, coupon, maturity, and rating; indications as to value
from dealers and general market conditions. The valuation procedures used by the
pricing service and the portfolio valuations received by the Fund are reviewed
by the officers of the Trust under the general supervision of the Trustees.
Short-term obligations having remaining maturities of 60 days or less are valued
at amortized cost, which approximates market value. Federal Income Taxes: It is
the policy of the Fund to comply with the provisions of the Internal Revenue
Code applicable to "regulated investment companies" and to distribute all of its
taxable (if any) and tax exempt income to its shareholders. Therefore no
provision for Federal income tax is required. Dividends paid by the Fund for the
six months ended March 31, 1999 represent exempt interest dividends which are
excludable by shareholders from gross income for Federal income tax purposes.
Net realized capital losses are carried forward to offset realized gains in
future years. To the extent such carryforwards are used, no capital
distributions will be made. 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 Investment Management, 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,
1999, 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, 1999, the
Adviser voluntarily reimbursed certain operating expenses amounting to $36,529.
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, 1999, the Distributor earned commissions aggregating $28,772
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. The Fund has also
adopted a Distribution Plan pursuant to Rule 12b-1, applicable only to the
Fund's Class D shares under which the Fund compensates the Distributor for
services in promoting the sale of Class D shares of the Fund at ann annual rate
of up to .75% of the average daily net assets attributable to Class D shares.
Total fees incurred by each class of shares of the Fund under their respective
Service and Distribution Plans and the total amount waived for the year ended
September 30, 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 September 30, 1999 there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $155,107,198. Transactions
in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Year Ended Ended September 30, 1999 Year Ended September 30, 1998
Class A Shares Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold ....................................... 2,476,782 $ 32,892,441 2,157,467 $ 28,797,690
Shares issued to shareholders in
reinvestment of distributions ............ 324,102 4,289,129 316,508 4,224,103
Shares repurchased ................................ (2,151,671) (28,433,115) (2,073,534) (27,666,739)
Net Increase ...................................... 649,213 $ 8,748,455 400,441 $ 5,355,054
Class D Shares (a) ................................ Shares Amount Shares Amount
Shares sold ....................................... 86,525 $ 1,130,480 0 0
Shares issued to shareholders in
reinvestment of distributions ............ 264 3,429 0 0
Shares repurchased ................................ 0 0 0 0
Net Increase ...................................... 86,789 $ 1,133,909 0 0
<FN>
(a) Sales of Class D shares commenced June 1, 1999
</FN>
</TABLE>
Note 5 - Securities Transactions
For the year ended September 30, 1999, the Fund had purchase and sale
transactions (excluding short-term securities) of $34,177,028 and $24,952,063
respectively. The cost of investments for Federal Income tax purposes is
$153,017,827. At September 30, 1999, net unrealized appreciation of investments
was $2,468,646 resulting from $3,980,769 gross unrealized appreciation and
$1,512,123 gross unrealized depreciation. Accumulated net realized losses from
securities transactions included in net assets at September 30, 1999 aggregated
$940,809. For Federal income tax purposes, the Fund had deferred capital losses
occuring subsequent to October 31, 1998 of $192,000 and capital loss
carryforwards of $722,000. The carryforwards expire in varying amounts through
2007.
<TABLE>
<CAPTION>
Financial highlights
Year Ended September 30,
1999 1998 1997 1996 1995
Class A Shares:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 13.45 $ 13.28 $ 13.09 $ 13.12 $ 12.72
Income from investment operations:
Net investment income ....................... 0.61 0.62 0.64 0.63 0.60
Net realized and unrealized
gain (loss) on investments (0.53) 0.17 0.19 (0.03) (0.40)
Total from investment operations ..................... 0.08 0.79 0.83 0.60 1.00
Less dividends from:
Net investment income ....................... (0.61) (0.62) (0.64) (0.63) (0.60)
Change in net asset value ............................ (0.53) 0.17 0.19 (0.03) 0.40
Net asset value, end of year ......................... $ 12.92 $ 13.45 $ 13.28 $ 13.09 $ 13.12
Total return (a) ..................................... 0.55% 6.08% 6.51% 4.68% 8.10%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income ....................... 4.57% 4.64% 4.88% 4.81% 4.71%
Expenses, after expense reductions 0.99% 1.00% 1.00% 1.00% 1.00%
Expenses, before expense reductions 1.01% 1.02% 1.05% 1.07% 1.06%
Portfolio turnover rate .............................. 15.93% 13.74% 10.06% 10.88% 17.06%
Net assets at end of year (000) ...................... $ 155,540 $ 153,118 $ 145,850 $ 131,307 $ 136,742
<FN>
(a) Sales loads are not reflected in computing total return
Note: Prior to September 28, 1995 and January 31, 1996, the Fund issued class B
shares and class C shares. At the time of each of their conversion to class A
shares each class represented less than 1% of the Fund's net assets.
</FN>
</TABLE>
Class D Shares:
Net asset value, beginning of period ....................... $ 13.20
Income from investment operations:
Net investment income ............................. 0.19
Net realized and unrealized
gain (loss) on investments ........................ (0.27)
Total from investment operations (0.08) Less dividends from:
Net investment income ............................. (0.19)
Change in net asset value .................................. (0.27)
Net asset value, end of period ............................. $ 12.93
Total return (b) ........................................... (0.61)%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income ............................. 4.20%(c)
Expenses, after expense reductions ................ 1.27%(c)
Expenses, before expense reductions ............... 3.70%(c)
Portfolio turnover rate .................................... 15.93%
Net assets at end of period (000) .......................... $ 1,122
(a) Sales of Class D shares commenced on June 1, 1999.
(b) Sales loads are not reflected in computing total return, which is not
annualized for periods less than one year. (c) Annualized.
<TABLE>
<CAPTION>
Schedule of Investments Thornburg New Mexico Intermediate Municipal Fund
September 30, 1999 CUSIPS: Class A - 885-215-301; NASDAQ Symbol: Class A - THNMX
<S> <C> <C> <C>
3,000,000 Alamogordo Hospital Revenue, 5.30% due 1/1/2013 NR/A- $2,779,050
(Gerald Champion MemorialHospital Project)
730,000 Albuquerque Collateralized Mortgage, Municipal Class Aaa/AAA 323,536
B-2, 0% due 5/15/2011
1,000,000 Albuquerque Gross Receipt Tax Revenue, 5.375% due NR/AA+ 1,000,650
7/1/2001 (Bluewater ApartmentProject)
50,000 Albuquerque Gross Receipt Tax Revenue, 6.20% due A1/AA 53,026
7/1/2005
525,000 Albuquerque Gross Receipts, Prerefunded Adjustment Aaa/AAA 464,468
Adjusted Series B, 0% due7/1/2002
755,000 Albuquerque Gross Receipts, Unrefunded Balance Aaa/AAA 667,594
Adjustment Adjusted Series B, 0%due 7/1/2002
625,000 Albuquerque Gross Receipts, Prerefunded Adjustment Aaa/AAA 526,550
Adjusted Series B, 0% due7/1/2003
895,000 Albuquerque Gross Receipts, Unrefunded Balance Aaa/AAA 753,187
Adjustment Adjusted Series B, 0%due 7/1/2003
840,000 Albuquerque Gross Receipts, Prerefunded Adjustment Aaa/AAA 637,249
Adjusted Series B, 0% due7/1/2005
1,195,000 Albuquerque Gross Receipts, Unrefunded Balance Aaa/AAA 905,033
Adjustment Adjusted Series B, 0%due 7/1/2005
820,000 Albuquerque Gross Receipts, Prerefunded Adjustment Aaa/AAA 419,102
Adjusted Series B, 0% due7/1/2012
1,180,000 Albuquerque Gross Receipts, Unrefunded Balance Aaa/AAA 585,610
Adjustment Adjusted Series B, 0%due 7/1/2012
1,585,000 Albuquerque Gross Receipts Tax Revenue, Refunding A1/AA 1,439,370
Series B, 5.00% due 7/1/2018
335,000 Albuquerque Hospital Revenue Series A, 5.80% due Aaa/AAA 340,286
8/1/2000 (PresbyterianHealthcare Project; Insured:
MBIA)
2,500,000 Albuquerque Hospital Revenue Series A, 6.10% due Aaa/AAA 2,608,725
8/1/2002 (Insured: MBIA)
1,000,000 Albuquerque Hospital Revenue Series A, 6.375% due Aaa/AAA 1,053,590
5/15/2004 pre-refunded 5/15/01@ 102 (St. Joseph
Healthcare Systems Project)
300,000 Albuquerque Hospital Revenue Series A, 6.625% due Aaa/AAA 317,244
5/15/2010 pre-refunded 5/15/01@ 102 (St. Joseph
Healthcare Systems Project)
1,040,000 Albuquerque Hospital Revenue Series B, 6.20% due Aaa/AAA 1,045,855
8/1/2002 (Insured: MBIA)
1,775,000 Albuquerque Hospital Revenue Series B, 6.60% due Aaa/AAA 1,790,673
8/1/2007 (Insured: MBIA)
2,055,000 Albuquerque Industrial Development Revenue, 5.80% due A1/NR 2,071,563
6/1/2007 (UniversalPrinting & Publishing Project; LOC:
First Security Bank)
2,000,000 Albuquerque Joint Water And Sewage Systems Revenue, Aa3/AA 2,031,880
Refunding & ImprovementSeries A, 5.25% due 7/1/2009
1,175,000 Albuquerque MFHR Series 1991, 8.50% due 7/1/2021 put NR/NR 1,186,280
7/1/01 (Beach ApartmentProject)
2,875,000 Albuquerque MFHR Series 1994, 6.75% due 1/1/2024 put NR/NR 2,788,002
1/1/04 (Dorado VillageProject)
2,235,000 Albuquerque Refuse Removal And Disposal, Revenue, Aaa/AAA 2,267,184
5.25% due 7/1/2009 (Insured:AMBAC)
290,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.00% Aaa/AAA 293,886
due 6/1/2001 (EvangelicalLutheran Good Samaritan
Society Project; Insured: FSA)
305,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.10% Aaa/AAA 311,073
due 6/1/2002 (EvangelicalLutheran Good Samaritan
Society Project; Insured: FSA)
170,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.20% Aaa/AAA 174,377
due 6/1/2003 (EvangelicalLutheran Good Samaritan
Society Project; Insured: FSA)
65,000 Albuquerque Special Assessment District 219 Series B, NR/BBB+ 65,079
5.75% due 7/1/2002 (Waterand Sewer Improvement
Project; LOC: Sumitomo Bank)
630,000 Albuquerque Special Assessment District Series A, NR/BBB+ 633,068
6.45% due 1/1/2015 (CottonwoodMall Project; LOC:
Sumitomo Bank)
1,500,000 Albuquerque Water & Sewer Revenue, 7.00% due 7/1/2003 Aa3/AA 1,562,955
600,000 Albuquerque Water & Sewer Revenue, 6.25% due 7/1/2008 Aa3/AA 640,374
1,750,000 Albuquerque Water & Sewer Revenue Series 1990-C, 7.00% Aa3/AA 1,824,777
due 7/1/2005 partiallypre-refunded 7/1/00 @ 102
1,000,000 Albuquerque Water & Sewer System Revenue Refunding Aa3/AA 1,041,620
Series B, 6.95% due 7/1/2002
585,000 Belen Gasoline Tax Revenue Refunding & Improvement, NR/NR 561,881
5.40% due 1/1/2011
900,000 Bernalillo County Gross Receipts Tax, Revenue, 5.50% Aa3/AA 918,036
due 10/1/2011
2,000,000 Bernalillo County Gross Receipts Tax, Revenue, 5.75% Aa3/AA 2,022,740
due 10/1/2015
2,300,000 Bernalillo County Multi Family Housing Revenue Series NR/AA- 2,363,963
1988, 5.80% due 11/1/2025put 11/1/06 (Sunchase
Apartments Project; Insured: AXA Reinsurance Co.)
4,500,000 Bernalillo County Multi Family Housing Revenue Series NR/AA- 4,655,655
1994-A, 6.50% due10/1/2019 put 10/1/05 (Village
Apartments Project; Insured: AXA Reinsurance Co.)
1,000,000 Bernalillo County Multifamily Revenue, 5.15% due Aaa/AAA 922,500
10/1/2018 (Housing DesertWillow Apartments Project;
Insured: FSA)
415,000 Cibola County Gross Receipts Tax Revenue, 5.70% due Aaa/AAA 436,642
11/1/2007 (Insured: AMBAC)
495,000 Cibola County Gross Receipts Tax Revenue, 5.875% due Aaa/AAA 525,923
11/1/2008 (Insured: AMBAC)
555,000 Cibola County Gross Receipts Tax Revenue, 6.00% due Aaa/AAA 592,507
11/1/2010 (Insured: AMBAC)
1,000,000 Dona Ana County Gross Receipts Tax, 6.00% due 6/1/2014 NR/AA 1,067,480
(Insured: Asset Guaranty)
1,500,000 Dona Ana County Gross Receipts Tax Refunding and NR/AA 1,594,950
Improvement Series 1993, 5.875%due 6/1/2009 (Insured:
Asset Guaranty)
330,000 Dona Ana County Subordinated Gross Receipts Tax NR/NR 331,495
Revenue, 6.125% due 6/1/2003
260,000 Dona Ana County Subordinated Gross Receipts Tax NR/NR 261,110
Revenue, 6.25% due 6/1/2004
750,000 Farmington Utility Systems Refunding Revenue, 5.20% Aaa/AAA 756,735
due 5/15/2000 (Insured:FGIC)
775,000 Gallup Pollution Control Revenue Refunding, 6.20% due Aaa/AAA 815,974
8/15/2003 (Plains ElectricGeneration Project; Insured:
MBIA)
800,000 Gallup Pollution Control Revenue Refunding, 6.65% due Aaa/AAA 824,688
8/15/2017 (Plains ElectricGeneration Project; Insured
MBIA)
1,500,000 Gallup Pollution Control Revenue Refunding Series Aaa/AAA 1,581,180
1992, 6.45% due 8/15/2006(Insured: MBIA)
280,000 Hidalgo County Municipal School District of Lordsburg, NR/NR 284,612
6.875% due 7/1/2000
300,000 Hidalgo County Municipal School District of Lordsburg, NR/NR 309,450
6.875% due 7/1/2001
315,000 Hidalgo County Municipal School District of Lordsburg, NR/NR 328,910
6.875% due 7/1/2002
380,000 Las Cruces Gross Receipt Tax Revenue Series 1995, A3/NR 389,595
6.00% due 6/1/2001 (SouthCentral Solid Waste Authority
Project)
1,175,000 Las Cruces Gross Receipts Refunding Revenue, 5.45% due A/A 1,178,290
12/1/1999
625,000 Las Cruces Gross Receipts Refunding Revenue, 5.85% due A/A 644,819
12/1/2001
1,500,000 Las Cruces Gross Receipts Refunding Revenue Series A/A 1,579,650
1992, 6.25% due 12/1/2005
420,000 Las Cruces Joint Utility Refunding and Improvement A1/NR 450,958
Revenue, 6.50% due 7/1/2007
780,000 Las Cruces Joint Utility Refunding and Improvement A1/NR 836,854
Revenue, 6.50% due 7/1/2007
1,160,000 Las Cruces Municipal Sales Tax Revenue Series 1991, A/NR 1,202,688
6.50% due 12/1/2006
195,000 Lordsburg Gross Receipts and Lodgers Tax Revenue, NR/NR 198,019
8.625% due 12/1/2002
2,150,000 Lordsburg Pollution Control Revenue, 6.50% due A2/A- 2,206,308
4/1/2013 (Phelps Dodge Project)
445,000 Los Alamos County Incorporated Revenue, Refunding Aaa/AAA 432,113
Series A 4, 5.00% due1/1/2010 (Lutheran Health Systems
Project)
465,000 Los Alamos County Incorporated Revenue, Refunding Aaa/AAA 446,018
Series A 4, 5.00% due 1/1/2011(Lutheran Health Systems
Project)
1,300,000 Los Alamos County Incorporated Utility Series A, 5.80% Aaa/AAA 1,376,427
due 7/1/2006 (Insured:FSA)
665,000 Los Alamos County New Mexico Incorporated Utility Aaa/AAA 689,166
Systems Revenue, Series A,6.00% due 7/1/2015 (Insured:
FSA)
3,445,000 Los Alamos County Utility System Revenue Aaa/AAA 3,634,027
RefundingSeries A, 6.00% due 7/1/2008(Insured: FSA)
350,000 Milan General Obligation Sanitary Sewer Series 1994, NR/NR 372,341
7.00% due 9/1/2013
430,000 New Mexico Educational Assistance Foundation Revenue, Aaa/NR 439,331
6.05% due 12/1/2000
140,000 New Mexico Educational Assistance Foundation Revenue, Aaa/NR 142,429
5.20% due 12/1/2001
1,000,000 New Mexico Educational Assistance Foundation Revenue, Aaa/NR 1,034,650
6.20% due 12/1/2001
670,000 New Mexico Educational Assistance Foundation Revenue, A/NR 686,187
5.50% due 11/1/2003
655,000 New Mexico Educational Assistance Foundation Revenue, Aaa/NR 692,958
6.45% due 12/1/2004
675,000 New Mexico Educational Assistance Foundation Revenue, A/NR 695,169
6.85% due 12/1/2005
1,995,000 New Mexico Educational Assistance Foundation Revenue, Aaa/NR 2,066,780
6.65% due 3/1/2007
20,000 New Mexico Educational Assistance Foundation Student Aa/NR 20,390
Loan Revenue, 5.40% due8/1/2004
2,870,000 New Mexico Educational Assistance Student Loan, 6.70% Aaa/AAA 2,995,362
due 4/1/2002 (Insured:AMBAC)
1,600,000 New Mexico Educational Assistance Student Loan, 6.50% Aaa/NR 1,670,400
due 3/1/2004
870,000 New Mexico Educational Assistance Student Loan Series A/NR 882,415
2-B, 5.75% due 12/1/2008
1,195,000 New Mexico Equipment Loan Council Hospital Revenue, A3/NR 1,279,534
7.50% due 6/1/2002pre-refunded 6/1/01 (San Juan
Regional Medical Center Project)
1,490,000 New Mexico Equipment Loan Council Hospital Revenue, A3/NR 1,602,435
7.80% due 6/1/2005pre-refunded 6/1/01 (San Juan
Regional Medical Center Project)
575,000 New Mexico Equipment Loan Council Hospital Revenue, A3/NR 618,390
7.80% due 6/1/2006pre-refunded 6/1/01 (San Juan
Regional Medical Center Project)
2,030,000 New Mexico Equipment Loan Council Hospital Revenue, Baa1/A- 2,117,493
6.40% due 6/1/2009 (MemorialMedical Center Project)
225,000 New Mexico Equipment Loan Council Hospital Revenue, A3/NR 242,305
7.90% due 6/1/2011pre-refunded 6/1/01 (San Juan
Regional Medical Center Project)
835,000 New Mexico Finance Authority Series A, 5.90% due Aaa/AAA 882,603
6/1/2004 (Insured: AMBAC)(Unrefunded Balance Public
Project)
780,000 New Mexico Hospital Equipment Loan, 5.60% due 6/1/2002 Baa1/A- 792,808
(Memorial Medical CenterProject)
575,000 New Mexico Hospital Equipment Loan, 5.70% due 6/1/2003 Baa1/A- 586,557
(Memorial Medical CenterProject)
235,000 New Mexico Hospital Equipment Loan, 5.00% due Aa2/AA 231,085
12/1/2008 (Catholic HealthInitiatives Project)
1,140,000 New Mexico Hospital Equipment Loan, 5.20% due Aa2/AA 1,118,169
12/1/2010 (Catholic HealthInitiatives Project)
2,000,000 New Mexico Hospital Equipment Loan, 5.375% due Baa1/NR 1,810,600
6/1/2018 (Memorial Medical CenterProject)
300,000 New Mexico Hospital Loan Council, 5.50% due 6/1/2001 Baa1/A- 303,741
1,050,000 New Mexico MFA MFHR Revenue, 5.20% due 1/1/2019 Aaa/AAA 968,257
(Insured: FSA)
945,000 New Mexico MFA MFMR Series 1991-C, 6.75% due 7/1/2011 NR/AAA 946,673
(Collateralized: FNMA)
1,355,000 New Mexico MFA MFMR Series 1991-C, 6.75% due 7/1/2011 NR/AAA 1,357,398
(Collateralized: FNMA)
1,000,000 New Mexico MFA SFMR, 5.75% due 3/1/2017 NR/AAA 988,040
1,000,000 New Mexico MFA SFMR, 5.40% due 7/1/2018 NR/AAA 957,850
1,500,000 New Mexico MFA SFMR, 0% due 9/1/2019 NR/AAA 820,095
175,000 New Mexico MFA SFMR Series 1992 A-1, 6.30% due Aa1/AA 178,810
1/1/2002
790,000 New Mexico MFA SFMR Series 1992 A-1, 6.90% due NR/AAA 813,455
7/1/2008
1,595,000 New Mexico MFA SFMR Series 1992-1, 6.85% due 7/1/2010 Aa1/AA 1,622,833
437,898 New Mexico MFA SFMR Series A, 0% due 7/1/2015 Aa/AA 87,610
240,000 New Mexico MFA SFMR Series A-1, 6.05% due 1/1/2000 Aa1/AA 240,648
205,000 New Mexico MFA SFMR Series A-1, 6.05% due 7/1/2000 Aa1/AA 206,710
175,000 New Mexico MFA SFMR Series A-2, 6.20% due 1/1/2001 Aa1/AA 176,897
1,000,000 New Mexico MFA SFMR Series A-3, 5.25% due 7/1/2017 NR/AAA 941,560
125,000 New Mexico MFA SFMR Series B-2, 5.80% due 1/1/2009 NR/AAA 124,721
355,000 New Mexico MFA SFMR Series F-2, 5.60% due 7/1/2017 NR/AAA 342,966
(Collateralized: FNMA)
170,000 New Mexico MFA SFMR Series H, 5.45% due 1/1/2006 NR/AAA 172,103
(Collateralized: FNMA/GNMA)
175,000 New Mexico MFA SFMR Series H, 5.45% due 7/1/2006 NR/AAA 176,963
(Collateralized: FNMA/GNMA)
100,000 New Mexico MFA SFMR Series PG-B-2, 5.80% due 7/1/2009 NR/AAA 100,730
355,000 New Mexico MFAuthority SFMR, 5.70% due 9/1/2014 NR/AAA 352,973
380,000 New Mexico State University Revenues, 5.85% due A1/AA 383,918
4/1/2000
335,000 New Mexico State University Revenues, 5.85% due A1/AA 342,722
4/1/2001
300,000 New Mexico State University Revenues, 5.40% due A1/AA 301,182
4/1/2011
55,000 New Mexico Student Loan Revenue, 5.55% due 12/1/2001 A/NR 55,481
2,000,000 Puerto Rico Building Authority Revenue, 6.10% due Baa1/A 2,034,300
7/1/2000
2,000,000 Puerto Rico Electric Power Authority Power Refunding Aaa/AAA 2,047,720
Series F, 5.25% due7/1/2010 (Insured: MBIA) (when
issued)
1,500,000 Puerto Rico Electric Power Revenue Refunding Series Baa1/BBB+ 1,521,075
1992-Q, 5.70% due 7/1/2000
750,000 Puerto Rico Public Improvement General Obligation, NR/AAA 810,788
6.60% due 7/1/2004pre-refunded 7/1/02 @ 101.5
1,170,000 Rio Grande Natural Gas Association Natural Gas, Aaa/NR 1,116,145
Systems Revenue, 5.00% due7/1/2013 (Insured: FSA)
150,000 Rio Grande Natural Gas Association Natural Gas System A3/BBB+ 150,993
Revenue, 5.00% due7/1/2000
375,000 Rio Rancho Gross Receipts Tax Revenue Series 1995-A, Aaa/AAA 381,799
5.50% due 12/1/2000(Insured: FSA)
440,000 Rio Rancho Gross Receipts Tax Revenue Series 1995-A, Aaa/AAA 456,865
5.50% due 12/1/2003(Insured: FSA)
500,000 Rio Rancho Water and Wastewater System, 8.00% due Aaa/AAA 544,255
5/15/2002 (Insured: FSA)
1,000,000 Rio Rancho Water and Wastewater System, 6.50% due Aaa/AAA 1,094,840
5/15/2006 (Insured: FSA)
375,000 Rio Rancho Water And Wastewtr Systems Revenue, Aaa/AAA 372,244
Refunding, 5.25% due 5/15/2012(Insured: AMBAC)
1,000,000 San Juan County Central Consolidated School District Aaa/AAA 1,036,790
22, 5.625% due 8/15/2002(Insured: FSA)
1,000,000 San Juan Gross Receipts Gas Tax Refunding Revenue A1/NR 1,118,280
Series B, 7.00% due 9/15/2009 pre-refunded 9/15/04 @
101
115,000 Sandoval County Gross Receipts Tax Refunding Revenue Baa1/NR 125,556
Series 1992, 7.00% due11/1/2007
125,000 Sandoval County Gross Receipts Tax Refunding Revenue Baa1/NR 136,474
Series 1992, 7.00% due11/1/2008
135,000 Sandoval County Gross Receipts Tax Refunding Revenue Baa1/NR 147,392
Series 1992, 7.00% due11/1/2009
145,000 Sandoval County Gross Receipts Tax Refunding Revenue Baa1/NR 158,309
Series 1992, 7.00% due11/1/2010
400,000 Sandoval County Landfill Revenue, 5.70% due 7/15/2013 NR/NR 381,456
755,000 Santa Fe County, 7.00% due 7/1/2010 Aa2/NR 869,820
340,000 Santa Fe County Office and Training Facilities Project Aaa/NR 367,441
Revenue Series 1990,9.00% due 7/1/2001
356,000 Santa Fe County Office and Training Facilities Project Aaa/NR 391,440
Revenue Series 1990,9.00% due 1/1/2002
372,000 Santa Fe County Office and Training Facilities Project Aaa/NR 416,480
Revenue Series 1990,9.00% due 7/1/2002
406,000 Santa Fe County Office and Training Facilities Project Aaa/NR 468,849
Revenue Series 1990,9.00% due 7/1/2003
443,000 Santa Fe County Office and Training Facilities Project Aaa/NR 525,939
Revenue Series 1990,9.00% due 7/1/2004
626,000 Santa Fe County Office and Training Facilities Project Aaa/NR 797,937
Revenue Series 1990,9.00% due 1/1/2008
1,000,000 Santa Fe County Project Revenue Series A, 5.50% due NR/NR 897,000
5/15/2015 (El CastilloRetirement Project)
200,000 Santa Fe Educational Facilities Revenue, 5.00% due NR/BBB- 193,022
3/1/2007 (St. Johns CollegeProject) (ETM)
210,000 Santa Fe Educational Facilities Revenue, 5.10% due NR/BBB- 201,873
3/1/2008 (St. Johns CollegeProject) (ETM)
1,215,000 Santa Fe Educational Facilities Revenue, 5.40% due NR/BBB- 1,106,257
3/1/2017 (ETM)
2,105,000 Santa Fe Gross Receipts Tax Refunding & Improvement Aaa/AAA 2,233,763
Series A, 6.00% due 6/1/2004(Insured: AMBAC)
1,150,000 Santa Fe Gross Receipts Tax Refunding & Improvement Aaa/AAA 1,197,391
Series A, 5.50% due 6/1/2006(Insured: AMBAC)
205,000 Santa Fe Housing Development Corporation Multi Family A/NR 207,979
Revenue Refunding Series1993-A, 5.50% due 2/1/2004
(Villa Camino Consuelo Project)
1,900,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 1,680,930
7/1/2002 (Insured: FGIC)
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 1,638,624
7/1/2003 (Insured: FGIC)
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 1,526,378
7/1/2004 (Insured: FGIC)
1,895,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 1,381,701
7/1/2005 (Insured: FGIC)
500,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 338,995
7/1/2006 (Insured: FGIC)
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due Aaa/AAA 913,372
7/1/2011 (Insured: FGIC)
1,000,000 Santa Fe Industrial Revenue Housing Refunding, 7.25% NR/NR 1,025,650
due 12/1/2005 (Ponce deLeon Project; Guaranteed:
Health Care REIT)
650,000 Santa Fe Refuse Disposal Systems, 5.00% due 6/1/2003 A3/NR 653,413
370,000 Santa Fe Refuse Disposal Systems Improvement Net A3/NR 379,916
Revenue Series 1996-B, 5.50%due 6/1/2004
775,000 Santa Fe Refuse Disposal Systems Improvement Revenue, A3/NR 772,303
5.00% due 6/1/2005
325,000 Santa Fe Refuse Disposal Systems Revenue, 5.50% due A3/NR 333,427
6/1/2003
200,000 Santa Fe Revenue, Capital Appreciation Improvement, 0% Aaa/AAA 108,932
due 7/1/2009 (Insured:FGIC)
445,000 Santa Fe SFMR, 5.25% due 11/1/2005 (Collateralized: Aaa/NR 449,641
FNMA/GNMA)
240,000 Santa Fe SFMR, 5.60% due 11/1/2010 (Collateralized: Aaa/NR 241,157
FNMA/GNMA)
330,000 Santa Fe SFMR, 6.10% due 11/1/2011 Aaa/NR 337,366
385,000 Santa Fe SFMR, 6.20% due 11/1/2016 (Collateralized: Aaa/NR 393,008
FNMA/GNMA)
299,406 Santa Fe SFMR Series 1991, 8.45% due 12/1/2011 Aaa/NR 313,966
(Insured: FGIC)
250,000 Santa Fe Solid Waste Management Agency Facility NR/NR 260,693
Revenue, 5.90% due 6/1/2005
875,000 Santa Fe Solid Waste Management Facilities Revenue, NR/NR 920,824
6.10% due 6/1/2007
1,500,000 Santa Fe Utility Revenue, Refunding Series A, 8.00% Aaa/AAA 1,792,035
due 6/1/2007 (Insured:AMBAC)
195,000 Santa Rosa Consolidated School District 8 Guadalupe & Baa3/NR 199,277
San Miguel Counties GOSeries 1991, 7.00% due 8/1/2003
210,000 Santa Rosa Consolidated School District 8 Guadalupe & Baa3/NR 214,605
San Miguel Counties GOSeries 1991, 7.00% due 8/1/2004
285,000 Socorro Health Facility Refunding Revenue, 6.00% due Aaa/AAA 300,649
5/1/2008 (EvangelicalLutheran Good Samaritan Project;
Insured: AMBAC)
965,000 Taos County Local Hospital Gross Receipts Tax Revenue NR/AA 984,821
Series 1992, 6.125% due12/1/2001 (Insured: Asset
Guaranty)
1,000,000 U.S. Virgin Islands Public Finance Authority Revenue NR/AAA 1,058,740
Refunding Series A, 6.90%due 10/1/2001
330,000 U.S. Virgin Islands Public Finance Authority Series NR/AAA 357,895
1992-A, 7.00% due 10/1/2002
895,000 U.S. Virgin Islands Special Tax General Obligation NR/NR 953,936
Series 1991, 7.75% due10/1/2006 pre-refunded 10/01/01
@ 102 (Hugo Insurance Claims Fund Project)
2,630,000 U.S. Virgin Islands Water & Power Authority Series A, NR/NR 2,793,086
7.40% due 7/1/2011pre-refunded 7/01/01
1,105,000 Villa Hermosa Multi Family Housing Revenue, 5.85% due NR/AAA 1,109,542
11/20/2016(Collateralized: GNMA)
1,385,000 Western New Mexico University System Revenue Series Baa2/NR 1,572,113
1995, 7.75% due 6/15/2019pre-refunded 6/15/04
TOTAL INVESTMENTS (Cost $152,991,131) $ 155,486,473
See notes to financial statements.
</TABLE>
Report of Independent accountants
To the Board of Trustees and Shareholders of Thornburg Investment Trust In our
opinion, the accompanying statement of assets and liabilities, including the
schedule of investments, and the related statements of operations and of changes
in net assets and the financial highlights present fairly, in all material
respects, the financial position of Thornburg New Mexico Intermediate Municipal
Fund series of Thornburg Investment Trust (hereafter referred to as the "Fund")
at September 30, 1999, the results of its operations, the changes in its net
assets, and the financial highlights for the year then ended, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these financial statements in accordance with generally accepted auditing
standards, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at September 30, 1999 by
correspondence with the custodian and brokers, provides a reasonable basis for
the opinion expressed above. The financial statements for the year ended
September 30, 1998, including the financial highlights for each of the four
years in the period then ended, were audited by other independent accountants
whose report dated October 23, 1998 expressed an unqualified opinion on those
financial statements. PricewaterhouseCoopers LLP New York, New York October 29,
1999
change in Independent accountants
Thornburg Investment Trust
On August 13, 1999, McGladrey & Pullen, LLP (McGladrey) resigned as independent
auditors of the Fund pursuant to an agreement by PricewaterhouseCoopers LLP
(PwC) to acquire McGladrey's investment company practice. The McGladrey partners
and professionals serving the Fund at the time of the acquisition joined PwC.
The reports of McGladrey on the financial statements of the Fund during the past
two fiscal years contained no adverse opinion or disclaimer of opinion, and were
not qualified or modified as to uncertainty, audit scope or accounting
principles. In connection with its audits for the two most recent fiscal years
and through August 13, 1999, there were no disagreements with McGladrey on any
matter of accounting principle or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of McGladrey would have caused it to make reference to the subject
matter of disagreement in connection with its report. On September 22, 1999, the
Fund, with the approval of its Board of Directors and its Audit Committee,
engaged PwC as its independent auditor.
Index Comparisons
Intermediate New Mexico Fund
Index Comparison
Compares performance of the Intermediate New Mexico Fund, the Merrill Lynch
Municipal Bond (7-12 year) Index and the Consumer Price Index, June 18, 1991 to
September 30, 1999. On September 30, 1999, the weighted average securities
ratings of the Index and the Fund were AA and AA, respectively, and the weighted
average portfolio maturities of the Index and the Fund were 9.5 years and 7.0
years, respectively. Past performance of the Index and the Fund may not be
indicative of future performance.
Class A
Average Annual Total Returns (at max. offering price) (periods ended 9/30/99)
One Year: (1.43)%
Five Years: 4.73%
From Inception (6/18/91): 5.69%
Class D
Average Annual Total Returns (at max. offering price) (periods ended 9/30/99)
YTD: (0.61)%
From Inception (6/2/99): (0.61)%
Y2K Update
We Are Ready for the Year 2000
Dear Shareholder,
I wish to inform you about our success with respect to being Year 2000 compliant
in the computer systems used to manage your Thornburg funds investment. Your
shareholder records are kept on a large computer system belonging to our
transfer agent, DST Systems. Accounting data pertaining to your investment
portfolio reside on large systems belonging to State Street Bank and its
affiliates. We have smaller computer networks at Thornburg Investment Management
to help us organize and manage our investment activities. I will describe
briefly the Year 2000 status of each area.
Shareholder records for Thornburg funds are kept on computers that use a DST
software system called "TA 2000." DST is one of the largest mutual fund record
processors in the world, keeping shareholder records for many large mutual fund
families. The TA 2000 system, as is name implies, was built with 4-digit year
description fields in order to be Year 2000 compliant. To quote from DST's
February 1999 newsletter, "Internal 2000 readiness testing of TA 2000 and TRA
2000 is complete. Several retests of critical TA 2000 (and TRAC 2000) functions
were also completed successfully in 1998. With the completion of these internal
tests, the TA 2000 (and TRAC 2000) systems are considered to be Y2K ready."
There are no hedge words in the preceeding 3 sentences! I am not surprised. I
first heard DST talk about taking concrete measures to deal with Y2K issues
about 8 years ago. If you worry about electric power continuity, I can inform
you that DST maintains its own diesel powered backup generating station adjacent
to its computer facility.
Both are located in geologically stable limestone caves east of Kansas City.
Asset custody and fund accounting records of the Thornburg funds are stored on
State Street Bank computers. We use a variety of software systems to carry out
all activities relating to running the funds. We are informed that this software
infrastructure has been 100% tested and corrected to be Year 2000 compliant. You
can monitor State Street Bank's disclosure yourself on the internet website,
statestreet.com.
Thornburg Investment Management has a computer network to help us carry out our
daily business of managing the assets in our mutual funds. Our information
technology director, Stewart Kane, has made a great effort to be certain that
our software platforms are Year 2000 compliant.
We look forward to the new year.
Brian McMahon, President
Thornburg Investment Management
Investment Manager
Thornburg Investment Management, 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
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.
