Dear Fellow Shareholders,
It is my pleasure to report Thornburg Value Fund results for the fiscal year
ended September 30. It has been a year of high volatility in equity markets,
with exceptionally strong markets through March followed by a fairly persistent
unwinding of high valuations in technology issues since. Fund results for the
calendar year-to-date, 1 year, 3 years and 5 years (since inception) are shown
in the accompanying table. These returns are for investors who held shares from
the beginning of each period with all dividends reinvested. The Fund was
launched on October 2, 1995.
Since this annual report is our 5th anniversary issue, it seems worthwhile to
briefly reflect on the past 5 years. For equity investors and technology
entrepreneurs, it has been a period like no other. Wealth creation has been
unprecedented. Almost every year ended with the market at new highs and a media
consensus that further gains would be unlikely. Yet the unlikely proved possible
and market indices moved higher. Banks and financial services companies were
leaders through 1997 with "blue chip" drug stocks taking indexes higher in 1998.
Throughout the period, a variety of technology companies were stellar
performers, especially companies benefiting from the wholesale adoption of the
PC and client-server networks. From chipmakers to software suppliers, all
prospered and so did their stocks. When the opportunity for unusual wealth
creation potential of the Internet became widely accepted in 1999, speculation
began in earnest. The success of earlier investments in technology encouraged
widespread and aggressive participation in almost any Internet concept that
could get funding, and almost anything could. With online trading capabilities
now available for any individual interested in joining the fun, day trading
became almost a way of life for some. Momentum investing carried Internet and
other technology stocks to unsustainable valuations with the speculative blow
off occurring early this year. We have been correcting the excesses ever since.
While the current stock market correction is painful for holders, it is part of
a normal market revaluation process. The good news is that it also creates
opportunity. Most of the stocks that spiked with the Internet fever early in the
year have collapsed. More seasoned technology issues generally are being
re-rated (as the Europeans say). That means price to earnings multiples are
being lowered as stock prices are cut. Money is moving to where there is a
perception of better and, at the present time, safer value. In this environment,
our value approach has been effective. Early in the year, when the technology
stocks were hitting new highs good quality consumer stable and financial service
stocks were out of favor, handicapped by rising interest rates and an image of
steady but slow growth. New investments and additions to holdings made at that
time in companies such as Bank of New York, Wellpoint, Pepsico, CVS and Kimberly
Clark have proved rewarding and have been solid performers in the current market
environment.
In recent months, portfolio activity has included the addition of a number of
new and diverse holdings. Listed to the left are the names of the companies and
their business. We believe current market weakness for technology issues is also
creating opportunities. Our approach has been to proceed cautiously even where
companies have compelling promise and appear sufficiently depressed. Most of the
stocks added to the portfolio have widely recognized names, nonetheless; some of
these businesses are relatively young and fast growing and in our view, despite
large capitalizations, fit most appropriately in our Emerging Franchise
category. Among these are: America Online, Qualcomm, Advanced Micro Devices and
Nortel Networks. Nortel had been eliminated from the portfolio because of
valuation earlier in the year. At half the price, it is still the same
exceptional company. Other recent additions include several smaller companies.
These companies are Foundry Networks (network switches and routers), J. D.
Edwards (enterprise software), and Entrust (personal network security). To learn
more about these companies and other portfolio holdings please visit our website
at www.thornburg.com. Links to company websites where available are also
provided.
The impact of portfolio changes is reflected in the adjoining table, which
compares sector holdings today with one year ago. As of September 30, the
portfolio's 5 largest industry sectors included 31 stocks and accounted for 67%
of portfolio value. Please take a look at the tables on page 4 to see a
comparison of industry sectors changes from September 30, 1999 to year-to-date
September 30, 2000.
On September 29, 2000, income distributions of $0.24, $0.22, $0.16 per share
were paid on Class A, Class B and Class C shares, respectively. On November 7,
2000 a long-term capital gain distribution of $0.25 per share on Class A, Class
B, and Class C shares was made. Our top priority and investment objective is
capital appreciation. Nonetheless, we will continue to be conscious of the
impact of portfolio activity on taxable investors.
Over the years, our practice of managing a concentrated portfolio of value
priced stocks in what we identify as Basic Value, Consistent Growers and
Emerging Franchise categories, has allowed Thornburg Value Fund to perform well
in varying market environments. The Fund has earned Morningstar's 5 star overall
rating* for risk adjusted performance. We are also proud of the fact that it
ranks #1 for tax adjusted returns among 390 funds in its Morningstar category
for the five year period ended September 30, 2000. Thornburg Value Fund has a
sensible investment strategy. If we execute the strategy well, I am confident we
will continue to perform well compared with appropriate benchmarks.
Thank you for investing in Thornburg Value Fund.
Sincerely,
William V. Fries, CFA
Portfolio Manager
ANNUALIZED Total return performance as of 9.30.2000
A Share
YTD 1 Year 3 Years 5 Years
Net Asset Value
7.68% 30.98% 22.57% 27.10%
Max. Offering Price
2.83% 25.10% 20.70% 25.94%
B Shares
YTD 1 Year 3 Years 5 Years
Net Asset Value
0.25% n/a n/a 0.25%
Max. Offering Price
(4.76)% n/a n/a (4.76)%
C Shares
YTD 1 Year 3 Years 5 Years
Net Asset Value
7.03% 29.90% 21.60% 26.60%
Max. Offering Price
6.03% 29.90% 21.60% 26.60%
september 30, 2000 statement of assets and liabilities
ASSETS
Investments at value (cost $1,252,278,868) .................. $1,469,945,856
Cash ........................................................ 576,242
Cash denominated in foreign currencies (cost $279,226) ...... 288,709
Receivable for securities sold .............................. 9,448,571
Receivable for fund shares sold ............................. 12,029,530
Unrealized gain on forward exchange contracts (Note 6) ...... 7,597,321
Dividends receivable ........................................ 774,670
Prepaid expenses and other assets ........................... 65,622
Total Assets $ 1,500,726,521
LIABILITIES
Payable for fund shares redeemed ............................ 2,566,869
Payable to investment advisor (Note 3) ...................... 1,130,418
Accounts payable and accrued expenses ....................... 1,230,789
Total Liabilities ........................................... 4,928,076
NET ASSETS .................................................. $1,495,798,445
NET ASSETS CONSIST OF:
Undistributed net investment income$ ............... 2,632,732
Net unrealized appreciation on investments ......... 225,250,958
Accumulated net realized gain ...................... 10,839,127
Net capital paid in on shares of beneficial interest 1,257,075,628
$ 1,495,798,445
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share
($873,433,178 applicable to 26,486,170 shares
of beneficial interest outstanding - Note 4) $ 32.98
Maximum sales charge, 4.50% of offering price
(4.70% of net asset value per share) ....... 1.55
Maximum Offering Price Per Share ............ $ 34.53
Class B Shares:
Net asset value and offering price per share *
($17,944,484 applicable to 549,894 shares of
beneficial interest outstanding - Note 4) ... $ 32.63
Class C Shares:
Net asset value and offering price per share *
($361,446,684 applicable to 11,021,044 shares
of beneficial interest outstanding - Note 4) $ 32.80
Class I Shares:
Net asset value, offering and redemption price per share
($242,974,099 applicable to 7,342,962 shares of beneficial
interest outstanding - Note 4) $ 33.09
*Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge. See notes to financial statements.
statement of operations year ended september 30, 2000
INVESTMENT INCOME
Dividend income (net of foreign taxes withheld of $302,123) $ 36,275,050
Interest income ........................................... 2,615,246
Total Income ............................ 38,890,296
EXPENSES
Investment advisory fees (Note 3) ......................... 8,833,854
Administration fees (Note 3)
Class A Shares ................................... 793,665
Class B Shares ................................... 5,203
Class C Shares ................................... 313,366
Class I Shares ................................... 80,035
Distribution and service fees (Note 3)
Class A Shares ................................... 1,587,330
Class B Shares ................................... 41,620
Class C Shares ................................... 2,506,925
Transfer agent fees ....................................... 841,823
Registration & filing fees ................................ 194,253
Custodian fees ............................................ 394,768
Professional fees ......................................... 103,596
Accounting fees ........................................... 92,930
Trustee fees .............................................. 16,505
Other expenses ............................................ 89,745
Total Expenses .......................... 15,895,618
Less:
Expenses reimbursed by investment advisor (Note 3) (23,775)
Net Expenses ............................ 15,871,843
Net Investment Income ................... 23,018,453
REALIZED AND UNREALIZED GAIN - NOTE 5 Net realized gain on:
Investments ...................................... 12,115,917
Foreign currency transactions .................... 9,010,453
21,126,370
Net unrealized appreciation
Investments ...................................... 152,284,761
Foreign currency translation ..................... 9,342,450
161,627,211
Net Realized and Unrealized
Gain on Investments ..................... 182,753,581
Net Increase in Net Assets Resulting
From Operations ......................... $205,772,034
See notes to financial statements.
statements of changes in net assets
INCREASE IN NET ASSETS FROM:
OPERATIONS:
Net investments income ...................$ 23,018,453 $ 1,728,501
Net realized gain on investments and
foreign currency transactions ... 21,126,370 11,550,239
Increase in unrealized appreciation on
investments and foreign currency
translation ............................... 161,627,211 59,067,284
Net Increase in Net Assets Resulting
from Operations 205,772,034 72,346,024
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares ........................ (19,810,582) (2,125,801)
Class B Shares ............... (233,591) 0
Class C Shares ............... (5,785,505) (251,359)
Class I Shares ............... (5,798,625) (302,311)
From net realized gains ...............
Class A Shares (5,654,581) 0
Class C Shares ............... (2,137,052) 0
Class I Shares ............... (825,940) 0
FUND SHARE TRANSACTIONS - (Note 4) .........
Class A Shares 408,610,073 158,138,008
Class B Shares ................ 18,309,048 0
Class C Shares ................ 187,082,037 77,354,880
Class I Shares ................ 169,014,282 50,091,345
Net Increase in Net Assets .......... 948,541,598 355,250,786
NET ASSETS: ............................
Beginning of year 547,256,847 192,006,061
End of year ........................ . $ 1,495,798,445 $ 547,256,847
See notes to financial statements.
Notes to financial statements september 30, 2000
Note 1 - Organization
Thornburg Value Fund, hereinafter referred to as the "Fund," is a diversified
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 and
bears expenses directly attributable to it. Expenses which are applicable to all
series of the Trust are allocated to each series based on their relative net
assets. The Fund seeks long-term capital appreciation by investing primarily in
domestic equity securities selected on a value basis.
The Fund currently offers four classes of shares of beneficial interest, Class
A, Class B, 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 B shares are sold at net asset value without a sales charge at the
time of purchase, but are subject to a contingent deferred sales charge upon
redemption, and bear both a service fee and distribution fee, (iii) 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, (iv) Class I
shares are sold at net asset value without a sales charge at the time of
purchase, (v) 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.
Class B shares of a Fund outstanding for eight years will convert to Class A
shares of the Fund.
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 at 4:00 pm EST 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.
Options Written: 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: Portfolio 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 its taxable income to its shareholders. Therefore, no
provision for Federal income tax is required. Net realized capital losses are
carried forward to offset realized gains in future years. To the extent such
carryforwards are used, no capital gain distributions will be made.
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 Investment Management,
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 year
ended September 30, 2000, 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 year ended September
30, 2000, the Adviser voluntarily reimbursed certain class specific transfer
agent fees of $1,953 for Class B, $5,312 for Class C, and $16,510 for Class I,
respectively.
The Fund has an underwriting agreements with Thornburg Securities Corporation
(the "Distributor"), which acts as the Distributor of the Fund's shares. For the
year ended September 30, 2000, the Distributor earned net commissions
aggregating $516,705 from the sale of Class A shares of the Fund, and collected
contingent deferred sales charges aggregating $65,506 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 B and Class C shares under which the Fund compensated
the Distributor for services in promoting the sale of Class B and Class C shares
of the Fund at an annual rate of up to 3/4 of 1% or .75% of the average daily
net assets attributable to Class B and Class C shares. Total fees incurred by
each class of shares of the Fund under its respective Service and Distribution
Plans for the year ended September 30, 2000 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, 2000 there were an unlimited number of shares of beneficial
interest authorized. Sales of Class B shares of the Value Fund commenced April
1, 2000. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Year ended Year Ended
September 30, 2000 September 30,1999
Class A Shares Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold .................... 16,420,020 $ 527,506,679 9,050,261 $ 232,959,415
Shares issued to shareholders in
reinvestment of dividends ... 749,655 23,727,075 73,730 1,947,825
Shares repurchased ............. (4,459,640) (142,623,681) (3,074,913)
(76,769,232)
Net Increase ................... 12,710,035 $ 408,610,073 6,049,078 $ 158,138,008
Class B Shares
Shares sold .................... 545,736 $ 18,173,596
Shares issued to shareholders in
reinvestment of dividends ... 6,695 220,934
Shares repurchased ............. (2,537) (85,482)
Net Increase ................... 549,894 $ 18,309,048
Class C Shares
Shares sold .................... 6,189,933 $ 196,801,670 3,233,243 $ 83,091,171
Shares issued to shareholders in
reinvestment of dividends ... 216,778 6,773,873 7,428 195,674
Shares repurchased ............. (522,055) (16,493,506) (239,159) (5,931,965)
Net Increase ................... 5,884,656 $ 187,082,037 3,001,512 $ 77,354,880
Class I Shares
Shares sold .................... 5,783,536 $ 183,376,529 2,014,660 $ 50,619,712
Shares issued to shareholders in
reinvestment of dividends ... 196,605 6,399,307 11,304 300,372
Shares repurchased ............. (631,269) (20,761,554) (31,874) (828,739)
Net Increase ................... 5,348,872 $ 169,014,282 1,994,090 $ 50,091,345
</TABLE>
Note 5 - Securities Transactions
For the year ended September 30, 2000 the Fund had purchase and sale
transactions of investment securities of $1,427,698,677 and $717,008,665,
respectively. The cost of investments for Federal income tax purpose is
$1,253,014,950 for the Fund. At September 30, 2000, net unrealized appreciation
of investments was $216,930,906, based on cost for Federal income tax purposes,
resulting from $288,351,272 gross unrealized appreciation and $71,420,366 gross
unrealized depreciation.
Note 6 - Financial Investments With Off-Balance Sheet Risk
During the year ended September 30, 2000, 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 its 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 September 30, 2000, 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> <C>
44,263,540 Swiss Francs for 27,087,143 US Dollars, December 20, 2000 1,246,979
14,000,000 Swiss Francs for 7,966,541 US Dollars, March 21, 2001 (267,467)
4,466,000,000 Japanese Yen for 43,134,828 US Dollars, December 20, 2000 1,127,704
63,033,527 Euros for 61,437,675, December 20,2000 5,504,662
20,200,000,000 South Korean Won for 18,067,979 U.S. Dollars, December 20, 2000 (14,557)
Unrealized gain from forward exchange contracts $ 7,597,321
</TABLE>
<TABLE>
<CAPTION>
financial highlights
Year Ended September 30,
2000 1999 1998 1997 1996(a)
Class A Shares:
Per Share Operating Performance
(for a share outstanding throughout the year)+
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 26.20 $ 19.48 $ 20.42 $ 14.50 $ 11.94
Income from investment operations:
Net investment income 0.74 0.16 0.20 0.21 0.28
Net realized and unrealized
gain on investments .......... 7.29 6.76 0.40 6.28 2.56
Total from investment operations . 8.03 6.92 0.60 6.49 2.84
Less dividends from:
Net investment income (0.86) (0.20) (0.17) (0.20) (0.28)
Net realized gains ........... (0.39) 0.00 (1.35) (0.37) 0.00
Return of capital ............ 0.00 0.00 (0.02) 0.00 0.00
Change in net asset value ...... 6.78 6.72 (0.94) 5.92 2.56
Net asset value, end of year ... $ 32.98 $ 26.20 $ 19.48 $ 20.42 $ 14.50
Total Return (b) ............... 30.98% 35.50% 3.15% 46.01% 24.20%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income ........ 2.31% 0.62% 0.95% 1.35% 2.48%(c)
Expenses, after expense reductions 1.38% 1.44% 1.54% 1.61% 1.55%(c)
Expenses, before expense reductions 1.38% 1.44% 1.54% 1.61% 2.16%(c)
Portfolio turnover rate ........... 72.35% 62.71% 99.55% 78.83% 59.62%
Net assets at end of year (000) .. $873,433 $360,966 $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, which are not annualized for
periods less than a year.
(c) Annualized.
+ Based on weighted average shares outstanding.
</FN>
</TABLE>
Period Ended
September 30, 2000 (a)
Class B Shares:
Per Share Operating Performance
(for a share outstanding throughout the year)+
Net asset value, beginning of period ................ $ 33.22
Income from investment operations:
Net investment income
Net realized and unrealized ........... 0
gain on investments ................... 0.09
Total from investment operations .................... 0.09
Less dividends from:
Net investment income ................. (0.68)
Net realized gains .................... 0
Return of capital ..................... 0
Change in net asset value ........................... (0.59)
Net asset value, end of period ...................... $ 32.63
Total Return (b) .................................... 0.25%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income ...................... 0.02%(c)
Expenses, after expense reductions ......... 2.38%(c)
Expenses, before expense reductions ........ 2.43%(c)
Portfolio turnover rate ............................. 72.35%
Net assets at end of period (000) ..................$ 17,945
(a) Effective date of class B shares was April 1, 2000.
(b) Sales loads are not reflected in computing total return, which are not
annualized for periods less than a year.
(c) Annualized.
+ Based on weighted average shares outstanding.
Class C Shares:
Per Share Operating Performance
(for a share outstanding throughout the year)+
Year Ended, September 30,
2000 1999 1998 1997 1996(a)
Net asset value, beginning of year $26.08 $19.45 $20.40 $14.51 $11.94
Income from investment operations:
Net investment income 0.49 (0.01) 0.03 0.07 0.18
Net realized and unrealized
gain on investments 7.23 6.71 0.39 6.27 2.57
Total from investment operations 7.72 6.70 0.42 6.34 2.75
Less dividends from:
Net investment income (0.61) (0.07) 0.00 (0.08) (0.18)
Net realized gains (0.39) 0.00 (1.35) (.37) 0.00
Return of capital 0.00 0.00 (0.02) 0.00 0.00
Change in net asset value 6.72 6.63 (0.95) 5.89 2.57
Net asset value, end of year $32.80 $26.08 $19.45 $20.40 $14.51
Total Return (b) 29.90% 34.45% 2.34% 44.77% 23.20%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income 1.53% (0.17)% 0.14% 0.48% 1.73%(c)
Expenses, after expense reductions 2.16% 2.23% 2.36% 2.49% 2.30%(c)
Expenses, before expense reductions 2.17% 2.23% 2.37% 2.73% 6.51%(c)
Portfolio turnover rate 72.35% 62.71% 99.55% 78.83% 59.62%
Net assets at end of year (000) $361,447 $133,934 $41,513 $9,999 $1,267
(a) Effective date of class C shares was October 2, 1995.
(b) Sales loads are not reflected in computing total return, which are not
annualized for periods less than a year.
(c) Annualized.
+ Based on weighted average shares outstanding.
Class I Shares:
Per Share Operating Performance
(for a share outstanding throughout the year)+
Net asset value, beginning of year $ 26.26 $ 21.78
Income from investment operations:
Net investment income 0.91 0.25
Net realized and unrealized
gain on investments 7.25 4.48
Total from investment operations 8.16 4.73
Less dividends from:
Net investment income (0.94) (0.25)
Net realized gains (0.39) 0
Return of capital 0 0
Change in net asset value 6.83 4.48
Net asset value, end of year $ 33.09 $ 26.26
Total Return (b) 31.44% 21.70%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income 2.82% 1.14%(c)
Expenses, after expense reductions 0.99% 1.00%(c)
Expenses, before expense reductions 1.00% 1.13%(c)
Portfolio turnover rate 72.35% 62.71%
Net assets at end of year (000) $ 242,974 $ 52,357
(a) Effective date of class I shares was November 2, 1998.
(b) Sales loads are not reflected in computing total return, which are not
annualized for periods less than a year.
(c) Annualized.
+ Based on weighted average shares outstanding.
schedule of investments September 30, 2000
CUSIPS: Class A - 885-215-731, Class B - 885-215-590, Class C - 885-215-715,
Class I - 885-215-632 NASDAQ Symbols: Class A - TVAFX, Class B - TVBFX proposed,
Class C - TVCFX, Class I - TVIFX
COMMON STOCK 94.80%
BANKS (10.00%)
American Financial Holdings Inc. 995,000 $17,536,875
Bank New York Inc. ............. 908,800 50,949,600
Hudson City Bancorp Inc. ....... 475,000 8,075,000
National Commerce Bancorp ...... 1,023,800 20,412,013
Wells Fargo & Company .......... 1,079,100 49,571,156
BIOTECHNOLOGY (1.50%)
Genzyme Corp. + 331,000 22,570,063
CAPITAL EQUIPMENT (3.50%)
Boeing Co. 825,000 51,975,000
BUILDING MATERIALS (0.60%)
Dyckerhoff AG Preferred 527,000 9,035,281
PHARMACEUTICALS (2.90%)
American Home Products Corp. 755,000 42,704,688
ENTERTAINMENT (1.10%)
Fox Entertainment Group Inc. + 637,600 16,896,400
FOOD & BEVERAGES (3.30%)
Pepsico Inc. 1,050,000 48,300,000
NATURAL GAS PIPELINES (3.80%)
El Paso Energy Corp. 899,300 55,419,362
HEALTHCARE SERVICES (6.40%)
Health Management Assoc. + 2,100,000 43,706,250
Renal Care Group Inc. + 219,100 4,080,737
Wellpoint Health Networks Inc. + 485,500 46,608,000
HOUSEHOLD PRODUCTS (3.10%)
Kimberly Clark Corp. 814,600 45,464,863
INVESTMENT MANAGEMENT & BROKERAGE (15.70%)
Alliance Capital Management Holding LP 557,700 27,954,713
Charles Schwab and Co. 672,500 23,873,750
E-Trade Group Inc. + 1,813,200 29,804,475
Ing Groep N.V. 445,000 29,683,918
Investment Technology Group + 458,669 18,318,093
Julius Baer Holding AG 6,883 35,758,175
Merrill Lynch & Co. 606,000 39,996,000
Stilwell Financial Inc. + 570,700 24,825,450
OIL & GAS (9.80%)
BP Amoco Plc 850,000 45,050,000
Exxon Mobil Corp. 580,000 51,692,500
Unocal Corp. 1,355,300 48,028,444
REAL ESTATE INVESTMENT TRUSTS (0.70%)
Sun Communities Inc. 310,400 9,816,400
RETAIL (5.60%)
CVS Corp. 890,000 41,218,125
Lowes Inc. 291,400 13,076,575
Staples Inc. + 1,935,000 27,452,812
TECHNOLOGY - SEMI CONDUCTORS & EQUIPMENT (7.10%)
Advanced Micro Devices Inc. + 927,200 21,905,100
Conexant Systems Inc. + 700,000 29,312,500
Dallas Semiconductor Corp. 319,500 10,503,562
Intel Corp. 600,000 24,937,500
Samsung Electronic 100,000 18,114,155
TECHNOLOGY - SOFTWARE & SERVICES (7.40%)
Adobe Systems Inc. 260,000 40,365,000
Advent Software, Inc. + 469,500 32,806,313
J.D. Edwards & Company + 1,383,300 35,792,887
TECHNOLOGY - INTERNET SERVICES (2.40%)
America Online Inc. + 657,900 35,362,125
TELECOMMUNICATION SERVICES (4.10%)
Dobson Communications Corp. + 235,300 3,455,969
Nippon Telegraph and Telephone 2,900 28,503,871
Verizon Communications 570,000 27,609,375
TELECOMMUNICATION EQUIPMENT (5.30%)
American Tower Corp. + 656,700 24,749,381
Nokia Corp. 580,000 23,091,250
Qualcomm Inc + 415,000 29,568,750
MISCELLANEOUS (0.50%)
DST Systems Inc. + 62,000 7,285,000
TOTAL COMMON STOCKS (Cost $1,175,550,468) 1,393,217,456
COMMERCIAL PAPER 5.20%
American General Finance, 6.55% due 10/6/2000 10,800,000 10,790,175
Ford Motor Credit Co., 6.54% due 10/6/2000 10,800,000 10,790,190
Lucent Technology Inc., 6.80% due 10/2/2000 17,200,000 17,196,751
Nestle Finance, 6.53% due 10/11/2000 11,200,000 11,179,684
United Parcel Service Inc., 6.40% due 10/11/2000 11,200,000 11,180,089
USAA Capital Corp., 6.53% due 10/4/2000 15,600,000 15,591,511
TOTAL COMMERCIAL PAPER (Cost $76,728,400) 76,728,400
TOTAL INVESTMENTS (Cost $1,252,278,868) $ 1,469,945,856
+Non-income producing.
See notes to financial statements.
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 Value Fund series of
Thornburg Investment Trust (the "Fund") at September 30, 2000, the results of
its operations for the year then ended, the changes in its net assets and the
financial highlights for each of the two years in the period then ended, in
conformity with accounting principles generally accepted in the United States of
America. 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 audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of
America, 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
audits, which included confirmation of securities at September 30, 2000 by
correspondence with the custodian provide a reasonable basis for our opinion.
The financial highlights for each of the three years in the period ended
September 30, 1998 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 27, 2000
