Thornburg Florida Intermediate Municipal Fund
All data as of 9.30.99
Fund Facts
Thornburg Florida Intermediate Municipal Fund
A Shares
SEC Yield ............................................... 3.78%
Taxable Equivalent Yields ............................... 6.46%
NAV ..................................................... $ 11.79
Max. Offering Price ..................................... $ 12.03
Total returns
(Annual Average - After Subtracting Maximum Sales Charge)
One Year (2.33)%
Five Year ............................................... 4.90%
Since Inception ......................................... 4.14%
Inception Date .......................................... (2.1.1994)
The taxable equivalent yield assumes a 39.6% marginal federal tax rate and a
0.2% intangible tax.
The investment return and principal value of an investment in the fund will
fluctuate so that, when redeemed, an investor's shares may be worth more or less
than their original cost. Maximum sales charge of the Fund's Class A Shares is
2.00%. The Fund's Class C Shares were converted to Class A Shares on April 30,
1996. The data quoted represent past performance and may not be construed as a
guarantee of future results.
Letter to shareholders
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 58 cents per share to $11.79 over the year. If you were
with us for the entire period, you received dividends of 54.1 cents per share.
If you reinvest your dividends, you received 55.2 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 $1,000,000 of the Hillsborough County IDA bonds for University Hospital due
8/15/2006. This is a AAA-rated, insured bond. The graph on this page compares
the price change of Thornburg Florida Intermediate Municipal Fund with the price
change in the Hillsborough County bond. Note: This graph considers market price
changes only, not total return. On September 30, 1998 this bond was worth
109.475% of its $1 million maturity amount at a then market yield of 4.08%. On
September 30, 1999 an increase in its market yield to 4.75% decreased the price
of the bond to 104.35% of its maturity value. In general, the price volatility
of your fund was almost exactly equal to that of the single Hillsborough County
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 50 bonds from various Florida bond issuers, 85% of
which are rated A or better by one of the major rating agencies. Your bond
portfolio in Thornburg Florida Intermediate Municipal Fund is laddered to give a
dollar weighted average maturity of approximately 8.5 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 = 10% year 2 = 10%
2 to 4 years = 8% year 4 = 18%
4 to 6 years = 16% year 6 = 34%
6 to 8 years = 16% year 8 = 50%
8 to 10 years = 10% year 10 = 60%
10 to 12 years = 12% year 12 = 72%
12 to 14 years = 12% year 14 = 84%
14 to 16 years = 13% year 16 = 97%
16 to 18 years = 2% year 18 = 99%
Over 18 years = 1%
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 Florida 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. THFLX is ranked 4 stars for the 3 year period and 4 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
ASSETS
Investments at value (cost $31,328,492) ................... $31,437,691
Cash ...................................................... 71,965
Receivable for investments sold ........................... 41,947
Interest receivable ....................................... 534,085
Receivable for fund shares sold ........................... 3,134
Prepaid expenses and other assets ......................... 522
Total Assets ..................................... 32,089,344
LIABILITIES
Payable for securities purchased .......................... 1,687,065
Payable for fund shares redeemed .......................... 53,185
Accounts payable and accrued expenses ..................... 56,799
Payable to investment advisor (Note 3) .................... 13,495
Dividends payable ......................................... 57,712
Total Liabilities ................................ 1,868,256
NET ASSETS ................................................ $30,221,088
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share ($30,221,088
applicable to 2,563,502 shares of beneficial interest
outstanding - Note 4) ..................................... $ 11.79
Maximum sales charge, 2.00% of offering
price (2.04% of net asset value per share) ................ 0.24
Maximum Offering Price Per Share .......................... $ 12.03
See notes to financial statements .........................
Statement of operations
INVESTMENT INCOME:
Interest income (net of premium amortized
of $82,305) ................................................. $ 1,647,260
EXPENSES:
Investment advisory fees (Note 3) ........................... 151,487
Administration fees (Note 3) ................................ 37,871
Service fees (Note 3) ....................................... 74,228
Transfer agent fees ......................................... 20,655
Custodian fees .............................................. 32,257
Professional fees ........................................... 2,501
Accounting fees ............................................. 2,698
Trustee fees ................................................ 400
Other expenses .............................................. 3,497
Total Expenses ..................................... 325,594
Less:
Expenses reimbursed by investment advisor (Note 3) . (24,439)
Net Expenses ....................................... 301,155
Net Investment Income .............................. 1,346,105
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (Note 5)
Net realized gain (loss) on investments sold ................ (215,943)
Increase (decrease) in unrealized appreciation of investments (1,257,165)
Net Realized and Unrealized
Gain (Loss) on Investments ......................... (1,473,108)
Net Increase (Decrease) in Net Assets Resulting
From Operations .................................... $ (127,003)
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 .................................................. $ 1,346,105 $ 1,200,246
Net realized gain (loss) on investments sold ........................... (215,943) 829
Increase (decrease) in unrealized appreciation of investments .......... (1,257,165) 521,930
Net Increase (Decrease) in Net Assets Resulting from Operations (127,003) 1,723,005
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares ....................................... (1,346,105) (1,200,246)
FUND SHARE TRANSACTIONS (Note 4):
Class A Shares ......................................................... 3,603,645 2,904,944
Net Increase in Net Assets .................................... 2,130,537 3,427,703
NET ASSETS:
Beginning of year ............................................. 28,090,551 24,662,848
End of year .......................................... $ 30,221,088 $ 28,090,551
See notes to financial statements ......................................
</TABLE>
Notes to financial statements
Note 1 - Organization
Thornburg Florida 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
series of shares of beneficial interest in addition to those of the Fund:
Thornburg New Mexico Intermediate Municipal Fund, Thornburg New York
Intermediate Municipal Fund, Thornburg Intermediate Municipal Fund, Thornburg
Limited Term U.S. Government Fund, Thornburg Limited Term Income Fund, 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 only one class of shares of beneficial interest, Class A 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 at 4:00pm 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 year ended September 30, 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 capital 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 its net asset value. When effecting such
transactions, assets of the Fund of an amount sufficient to make payment for the
portfolio securities to be purchased will be segregated on the Fund's records on
the trade date. Securities purchased on a when-issued or delayed delivery basis
do not earn interest until the settlement date. Dividends: Net investment income
of the Fund is declared daily as a dividend on shares for which the Fund has
received payment. Dividends are paid monthly and are reinvested in additional
shares of the Fund at net asset value per share at the close of business on the
dividend payment date, or at the shareholder's option, paid in cash. Net capital
gains, to the extent available, will be distributed annually. General:
Securities transactions are accounted for on a trade date basis. Interest income
is accrued as earned. Premiums and original issue discounts on securities
purchased are amortized over the life of the respective securities. Realized
gains and losses from the sale of securities are recorded on an identified cost
basis. Use of Estimates: The preparation of financial statements, in conformity
with generally accepted accounting principles, requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of increases and decreases
in net assets from operations during the reporting period. Actual results could
differ from those estimates.
Note 3 - Investment Advisory Fee and Other Transactions With Affiliates
Pursuant to an investment advisory agreement, Thornburg 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 $24,439.
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 $9,028
from the sale of Class A shares. Pursuant to a Service Plan, under Rule 12b-1 of
the Investment Company Act of 1940, the Fund may reimburse to the Adviser an
amount not to exceed .25 of 1% per annum of the average net assets attributable
to each class of shares of the Fund for payments made by the Adviser to
securities dealers and other financial institutions to obtain various
shareholder related services. The Adviser may pay out of its own funds
additional expenses for distribution of the Fund's shares. Certain officers and
trustees of the Trust are also officers and/or directors of the Adviser and
Distributor. The compensation of unaffilliated trustees is borne by the Trust.
Note 4 - Shares of Beneficial Interest At September 30, 1999 there were an
unlimited number of shares of beneficial interest authorized, and capital
paid-in aggregated $30,479,242. Transactions in shares of beneficial interest
were as follows:
<TABLE>
<CAPTION>
Year Ended September 30, 1999 Year Ended September 30, 1998
<S> <C> <C> <C> <C>
Class A Shares ....................... Shares Amount Shares Amount
Shares sold .......................... 773,239 $ 9,449,540 1,756,020 $ 21,482,186
Shares issued to shareholders in
reinvestment of distributions 48,560 589,073 37,405 457,724
Shares repurchased ................... (529,473) (6,434,968) (1,554,599) (19,034,966)
Net Increase ......................... 292,326 $ 3,603,645 238,826 $ 2,904,944
</TABLE>
Note 5 - Securities Transactions
For the year ended September 30, 1999, the Fund had purchase and sale
transactions (excluding short-term securities) of $14,227,567 and $11,069,010,
respectively. The cost of investments for Federal Income tax purposes is
$31,328,492. At September 30, 1999, net unrealized appreciation of investments
was $109,199, resulting from $551,467 gross unrealized appreciation and $442,268
gross unrealized depreciation. Accumulated net realized losses from securities
transactions included in net assets at September 30, 1999 aggregated $367,353.
For Federal income tax purposes, the Fund had deferred capital losses occuring
subsequent to October 31, 1998 of $210,000 and capital loss carryforwards of
$153,000. The carryforwards expire in varying amounts through 2007.
Financial highlights
<TABLE>
<CAPTION>
Year Ended September 30,
1999 1998 1997 1996 1995
Class A Shares:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................... $ 12.37 $ 12.14 $ 11.88 $ 11.83 $ 11.54
Income from investment operations:
Net investment income .............. 0.54 0.56 0.56 0.57 0.63
Net realized and unrealized
gain (loss) on investments(0.58) ... 0.23 0.26 0.05 0.29
Total from investment operations ..................... (0.04) 0.79 0.82 0.62 0.92
Less dividends from:
Net investment income .............. (0.54) (0.56) (0.56) (0.57) (0.63)
Change in net asset value ............................ (0.58) 0.23 0.26 0.05 0.29
Net asset value, end of year ......................... $ 11.79 $ 12.37 $ 12.14 $ 11.88 $ 11.83
Total return (a) ..................................... (0.36%) 6.62% 7.04% 5.37% 8.22%
Ratios/Supplemental Data Ratios to average net assets:
Net investment income .............. 4.44% 4.54% 4.65% 4.80% 5.41%
Expenses, after expense reductions . 0.99% 0.98% 0.83% 0.61% 0.38%
Expenses, before expense reductions 1.08% 1.11% 1.13% 1.34% 1.44%
Portfolio turnover rate .............................. 35.91% 70.81% 51.48% 77.12% 89.60%
Net assets at end of year (000) ...................... $ 30,221 $ 28,091 $ 24,663 $ 19,501 $ 14,822
<FN>
(a) Sales loads are not reflected in computing total return.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Schedule of Investments Thornburg Florida Intermediate Municipal Fund September 30, 1999
CUSIPS: Class A - 885-215-707; NASDAQ Symbol: Class A - THFLX
<S> <C> <C> <C>
595,000 Brevard County Tourist Development Tax Revenue Series 1993, NR/NR $603,092
6.325% due 3/1/2003(Florida Marlins Training Facilities)
400,000 Broward County Educational Facilities Authority Series NR/AAA 417,752
1994, 5.60% due 4/1/2004(Nova Southeastern University
Project; Guaranteed: Connie Lee)
570,000 Broward County Health Facilities Authority, 7.00% due Aaa/AAA 606,092
8/15/2011 (North BeachHospital Project; Insured: MBIA)
180,000 Broward County Housing Finance Authority Home Mortgage Aa2/BBB 42,352
Revenue, 0% due 4/1/2014
155,000 Cape Coral Special Obligation Wastewater Revenue, 5.625% Aaa/AAA 157,127
due 7/1/2000 (GreenArea Project; Insured: FSA)
300,000 Cape Coral Special Obligation Wastewater Revenue, 5.75% due Aaa/AAA 308,013
7/1/2001 (Green AreaProject; Insured: FSA)
150,000 Cape Coral Special Obligation Wastewater Revenue, 6.00% due Aaa/AAA 158,208
7/1/2003 (Green AreaProject; Insured: FSA)
390,000 Cape Coral Special Obligation Wastewater Revenue, 6.10% due Aaa/AAA 401,115
7/1/2005 (Green AreaProject; Insured: FSA)
425,000 Clearwater Housing Authority Finance Revenue Refunding, NR/A 419,747
5.40% due 5/1/2013
900,000 Clermont Water & Sewer Revenue Refunding, 5.00% due NR/NR 907,992
12/1/2000
385,000 Cooper City Utility Systems Revenue, Capital Appreciation Aaa/AAA 236,937
Refunding Series A, 0%due 10/1/2006
285,000 Dade County General Obligation, 7.00% due 10/1/2006 Aaa/AAA 322,460
(Insured: AMBAC)
230,000 Dade County Health Facilities Revenue - Catholic Health, A1/NR 235,780
7.50% due 8/15/2000(LOC: Allied Irish Bank)
35,000 Duval County Single Family Housing Revenue, 10.25% due Aaa/AAA 34,426
5/15/2016
135,000 Escambia Housing Finance Authority, 6.15% due 4/1/2000 Aaa/NR 135,603
(Collateralized: GNMA)
1,000,000 Florida Housing Development Authority, 6.25% due 12/1/2006 NR/AAA 1,025,040
(Hammock's PlaceProject)
250,000 Florida Housing Finance Agency Refunding Multi Family NR/AAA 256,850
Housing Series C, 5.55%due 2/1/2006
1,000,000 Florida Housing Finance Agency Multi Family Housing Revenue NR/NR 1,001,570
Series 1983-F, 5.35%due 12/1/2005 mandatory put 6/1/00
(Insured: Connecticut General)
1,000,000 Florida Housing Finance Agency Multi Family Housing Revenue NR/NR 1,001,570
Series 1983-G, 5.35%due 12/1/2005 mandatory put 6/1/00
(Insured: Connecticut General)
310,000 Florida Housing Finance Agency Revenue Bonds, 5.30% due Aaa/AAA 314,449
12/1/2004 (Insured:AMBAC)
950,000 Florida Housing Finance Authority Series 94-B, 5.70% due NR/AAA 985,920
10/1/2024 mandatory put10/1/04 (Plantation Colony Project;
Collateralized: FNMA)
650,000 Florida Housing Finance Authority Multi Family Housing NR/AA- 653,075
Revenue, 5.10% due4/1/2013 put 4/1/02 (Park Colony Project;
LOC: Mellon Bank)
300,000 Florida State Board of Education Series C, 6.00% due Aaa/AA 302,064
5/1/2007
220,000 Florida State Board of Education Series D, 6.20% due Aaa/AAA 222,647
5/1/2007 (Insured: MBIA)(ETM)
200,000 Florida State Department Corrections Certificates of Aaa/AAA 211,264
Participation OkeechobeeCorrectional, 5.90% due 3/1/2004
(Insured: AMBAC)
95,000 Fort Myers Improvement Revenue, 6.00% due 12/1/2013 Aaa/AAA 96,100
(Insured: ACA)
365,000 Halifax Hospital Medical Center Health Care Facilities NR/A 338,366
Revenue Series A, 5.00%due 4/1/2012 (Insured: ACA)
1,000,000 Halifax Hospital Medical Center Health Care Facilities NR/A 904,900
Revenue Series A, 5.20%due 4/1/2018
300,000 Hernando County Industrial Development Revenue, 8.50% due NR/NR 327,297
12/1/2014 (FloridaCrushed Stone Project)
1,000,000 Hillsborough County Industrial Development Authority, 5.50% Aaa/AAA 1,043,490
due 8/15/2006(University Community Hospital Inc. Project;
Insured: MBIA)
1,000,000 Jacksonville Health Facilities Authority Hospital Revenue, Aa2/AA+ 1,012,810
5.75% due 8/15/2014
150,000 Jacksonville Health Facilities Industrial Development Baa2/NR 151,966
Revenue, 5.70% due12/1/2004 (National Benevolent
Association Project)
100,000 Jacksonville Health Facilities Industrial Development Baa2/NR 100,803
Revenue, 6.00% due12/1/2009 (National Benevolent
Association Project)
100,000 Jacksonville Health Facilities Industrial Development Baa2/NR 101,998
Revenue, 6.05% due12/1/2010 (National Benevolent
Association Project)
600,000 Jacksonville Health Facilities Industrial Development Baa1/NR 666,234
Revenue, 8.00% due12/1/2015 (National Benevolent
Association Project)
290,000 Jacksonville Housing Revenue Windermere Manor Series A, NR/AAA 292,590
5.125% due 9/20/2004(Collateralized: GNMA)
100,000 Jacksonville Loan Obligation Custody Receipts, 6.10% due Aaa/AAA 100,198
4/1/2001 (Insured:MBIA)
983,178 Lummus Housing Development Corp., 8.00% due 12/1/2010 NR/NR 983,178
(Elderly Housing, Section8 Project)
1,465,000 Manatee County Revenue, 5.00% due 4/1/2015 (when issued) Aaa/AAA 1,365,658
2,500,000 Miami Dade County Special Obligation Subordinated Series Aaa/AAA 1,133,375
1997-C, 0% due10/1/2013 (Insured: MBIA)
185,000 Mirimar Wastewater Improvement Assessment Revenue, 6.00% Aaa/AAA 193,850
due 10/1/2002 (Insured:FGIC)
760,000 Mirimar Wastewater Improvement Assessment Revenue, 6.25% Aaa/AAA 824,182
due 10/1/2005 (Insured:FGIC)
1,000,000 Orange County Health Facilities Authority Revenue, NR/AA 931,970
Refunding, 5.125% due6/1/2014 (Mayflower Retirement
Project)
1,000,000 Orange County Health Facilities Authority Revenue, 5.40% Aaa/AAA 949,630
due 7/1/2019 (Insured:FSA)
210,000 Orange County Housing Finance Authority, 6.10% due NR/AAA 214,626
10/1/2005 (Collateralized:FNMA/GNMA)
485,000 Orange County Housing Finance Authority Multi Family, NR/AAA 492,328
Revenue Series B, 5.375%due 11/1/2025 (Sun Lake Apartments
Project)
115,000 Osceola County Health Facilities Revenue Series 1994, 5.75% Aaa/AAA 120,601
due 5/1/2004(Evangelical Lutheran Good Samaritan Project;
Insured: AMBAC)
100,000 Osceola County Industrial Development Authority, 7.50% due Aaa/AAA 104,387
7/1/2002 (Insured:AMBAC)
515,000 Palm Beach County Industrial Development Revenue Series NR/A+ 544,082
1996, 6.10% due12/1/2007 (Lourdes-Noreen McKeen-Geriatric
Care Project; LOC: Allied Irish Bank)
270,000 Palm Beach County Industrial Development Revenue Series NR/A+ 286,637
1996, 6.20% due12/1/2008 (Lourdes-Noreen McKeen-Geriatric
Care Project; LOC: Allied Irish Bank)
690,000 Pensacola Airport Revenue, 6.25% due 10/1/2005 Aaa/AAA 745,000
800,000 Pinellas County Educational Facility Authority Revenue, NR/NR 866,080
8.00% due 2/1/2011(Clearwater Christian College Project)
1,390,000 Port Orange Water And Sewer Revenue Refunding, 5.25% due Aaa/AAA 1,409,724
10/1/2010 (Insured:AMBAC)
500,000 Port St. Lucie Utility System Revenue Series 1996-A, 0% due Aaa/AAA 351,660
9/1/2007 (Insured:FGIC)
700,000 Saint Johns County Housing Finance Authority Housing, NR/A1+ 700,000
Revenue, 3.75% due11/1/2014 put 7/01/99 (daily demand
notes)
500,000 Seminole County School Board Certificates of Participation, Aaa/AAA 535,200
5.75% due 7/1/2006(Insured: MBIA)
1,000,000 South Broward Hospital District Revenue, 7.50% due 5/1/2008 Aaa/AAA 1,112,750
(Insured: AMBAC)
1,000,000 Tampa Revenue, 5.50% due 11/15/2013 (Insured: MBIA) Aaa/AAA 1,011,700
470,000 Walton County School Board Certificates Participation, Aaa/AAA 463,176
5.25% due 7/1/2013(Insured: FSA)
TOTAL INVESTMENTS (Cost $31,328,492) $ 31,437,691
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 Florida 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. PricewaterhouseCoopersLLP 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
Index Comparison
Compares performance of Intermediate Florida Fund, the Merrill Lynch Municipal
Bond (7-12 year) Index and the Consumer Price Index, February 1, 1994 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 8.5 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: (2.33)%
Five Years: 4.90%
From Inception (2/01/94): 4.14%
Y2k Update
We Are Ready for the Year 2000
Dear Shareholders,
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
