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.
Thornburg New York Intermediate Municipal Fund
ALL DATA AS OF 12.31.99
Fund facts Thornburg New York Intermediate Municipal Fund
Thornburg
New York Intermediate
Municipal Fund
A Shares
SEC Yield 4.28%
Taxable Equiv. Yield 7.99%
NAV $12.11
Max. Offering Price $12.36
Total returns (Annual Average - After Subtracting Maximum Sales Charge)
One Year (2.30)%
Since Inception 2.87%
Inception Date (9.5.97)
Taxable equivalent yield assumes a 39.6% marginal federal tax rate, a 6.85% New
York State tax rate, and a 4.46% New York City tax 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 data quoted represent past performance and may not be construed as a
guarantee of future results.
Dear Shareholder,
We are pleased to present the Semi-Annual Report for the New York Portfolio of
Thornburg Intermediate Municipal Fund for the six month period ending December
31, 1999. The net asset value of the A shares decreased by 25 cents to $12.11
during the period. If you were with us for the entire period, you received
dividends of 31.5 cents per share. If you reinvested your dividends, you
received 31.9 cents per share.
As we write this letter to you, the bond market is attempting to predict the
probable net effect on interest rates of two powerful forces. The strong U.S.
economy continues to gather strength, as does the New York economy. Our economic
strength is now augmented by improving economies in most other large countries
of the world. By itself, this economic strength should continue to put upward
pressure on interest rates, as it did in 1999. On the other hand, deficit
spending by the governments around the world, a hallmark of the last 30 years,
is receding. The U.S. Government, which will pay off $200 billion of treasury
bonds this year, leads the way. But it is not alone. Municipal bond issuance
totaled only $8 billion in January of this year, down over 50% from last year
due to swelling tax receipts in most state and local government entities. We
wish to remind you that while day to day interest rate movements do effect the
daily market prices of the individual bonds in your Thornburg New York Municipal
Fund portfolio (and our reinvestment opportunities), these interest rate
movements do not change the ultimate maturity values of your bonds.
A simple example may help. An investor who buys a 5 year bond with a 5% interest
rate expects a total return of 25% from the bond...5 years of 5% interest. If
interest rates increase by 1.3% (to 6.3%) during the first year the investor
owns the bond, the market price of the bond will decline to 95% of the maturity
value. The decline in the market price almost exactly offsets the interest
income received on the bond during the year, yielding a total return on the bond
during the year of approximately 0%. This describes rather well how many bonds
in your New York Intermediate Municipal Fund performed last year, even though
many of your bonds have maturities longer than 5 years. We are not discouraged
by increases in market interest rates, as we will explain in the next paragraph.
Either the original bondholder or the next buyer (if the original bondholder
sells out) will eventually get a total return of 25% over the remaining 4 year
life of the bond. In this example, the components of the 25% return will include
(i) 4 years of 5% interest (4 x 5% = 20%), and (ii) the recovery of the 5%
market price decline by the bond's maturity date. In this example, if the total
return for the first year of the bond's life is 0%, the average annual return
over the remaining 4 years is 6.38%. The final 5 year outcome doesn't
change...unless the original bondholder gets rattled by the 0% total return in
the first year and sells while the market price is depressed. In fact, we are
encouraged by increases in market interest rates, because your Thornburg New
York Intermediate Municipal Fund is a laddered bond portfolio. The New York
portfolio consists of over 40 municipal obligations from New York borrowers.
Approximately 85% of the bonds are rated A or better by one of the major rating
agencies and NONE of your bonds are subject to the alternative minimum tax that
applies to certain private activity municipal bonds. As you know, we "ladder"
the maturity dates of the bonds in your portfolio so that some of the bonds are
scheduled to mature at par during each of the coming years. As these bonds
mature, we would look forward to the chance to reinvest the proceeds at higher
yields, should they become available! The following chart describes the
percentages of your fund's portfolio maturing in each of the coming years.
% of portfolio Cumulative %
maturing within maturing by end of
2 years = 15% year 2 = 15%
2 to 4 years = 12% year 4 = 27%
4 to 6 years = 11% year 6 = 38%
6 to 8 years = 15% year 8 = 53%
8 to 10 years = 8% year 10 = 61%
10 to 12 years = 12% year 12 = 73%
12 to 14 years = 13% year 14 = 86%
14 to 16 years = 10% year 16 = 96%
16 to 18 years = 2% year 18 = 98%
Today, your fund's weighted average maturity is 9 years, and we always keep it
below 10 years. Over the last six months, your average portfolio maturity has
remained largely unchanged. If bond yields increase in the coming months, we
will extent your maturities slightly in order to lock in the higher yields. 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. We would like to attribute this to
capable execution of a sensible investment strategy over time. Thank you for
investing in the New York Portfolio of Thornburg Intermediate Municipal Fund.
Sincerely,
Brian McMahon George Strickland
Managing Director Managing Director
ASSETS
Investments at value (cost $24,215,937) ................... $25,203,530
Cash ...................................................... 111,581
Interest receivable ....................................... 396,605
Receivable for fund shares sold ........................... 197,575
911
Total Assets ..................................... 25,910,202
LIABILITIES
Payable for securities purchased .......................... 990,327
Accounts payable and accrued expenses ..................... 18,817
Payable to investment advisor (Note 3) .................... 4,630
Dividends payable ......................................... 41,805
Total Liabilities ................................ 1,055,579
NET ASSETS ................................................ $24,854,623
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share ($24,854,623
applicable to 2,051,988 shares of beneficial interest
outstanding - Note 4) ..................................... $ 12.11
Maximum sales charge, 2.00 % of offering
price (2.04% of net asset value per share) ................ 0.25
Maximum Offering Price Per Share .......................... $ 12.36
See notes to financial statements .........................
INVESTMENT INCOME:
Interest income (net of premium amortized
of $30,090) ................................................... $ 734,702
EXPENSES:
Investment advisory fees (Note 3) ............................. 62,558
Administration fees (Note 3) .................................. 15,640
Service fees (Note 3) ......................................... 31,279
Transfer agent fees ........................................... 12,868
Custodian fees ................................................ 13,800
Professional fees ............................................. 4,373
Accounting fees ............................................... 982
Trustee fees .................................................. 276
Other expenses ................................................ 641
Total Expenses ................................................ 142,417
Less:
Expenses reimbursed by investment advisor (Note 3) ... (48,579)
Net Expenses ....................... 93,838
Net Investment Income .............. 640,864
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (Note 5)
Net realized (loss) on investments sold ....................... (45,445)
(Decrease) in unrealized appreciation of investments .......... (467,171)
Net Realized and Unrealized
Gain (Loss) on Investments ......... (512,616)
Net Increase in Net Assets Resulting
From Operations .................... $ 128,248
See notes to financial statements .............................
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1999Year Ended
June 30, 1999
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
<S> <C> <C>
Net investment income ................................. $ 640,864 $ 1,262,748
Net realized gain (loss) on investments sold ..................... (45,445) (5,095)
Increase (decrease) in unrealized appreciation of investments .... (467,171) (636,305)
Net Increase in Assets Resulting from Operations 128,248 621,348
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares .......................................... (640,864) (1,262,748)
From realized gains
Class A Shares .......................................... 0 (39,569)
FUND SHARE TRANSACTIONS (Note 4):
Class A Shares .......................................... 734,217 (158,266)
Net Increase (Decrease) in Net Assets .......... 221,601 (839,235)
NET ASSETS:
Beginning of period ..................................... 24,633,022 25,472,257
End of period ........................................... $ 24,854,623 $ 24,633,022
<FN>
See notes to financial statements ................................
</FN>
</TABLE>
Note 1 - Organization
Thornburg New York Intermediate Municipal Fund (the "Fund"), is a series of
Thornburg Investment Trust (the "Trust"). The Trust is organized as a
Massachusetts business trust under a Declaration of Trust dated June 3, 1987 and
is registered as a diversified, open-end management investment company under the
Investment Company Act of 1940, as amended. The Trust is currently issuing seven
series of shares of beneficial interest in addition to those of the Fund:
Thornburg Florida Intermediate Municipal Fund, Thornburg New Mexico 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 will also invest
primarily in Municipal Obligations within the state of New York, with the
objective of having interest dividends paid to its shareholders exempt from any
individual income taxes. Additionally, the fund will seek to have dividends paid
to its individual shareholders exempt form New York City income taxes.
Note 2 - Significant Accounting Policies Significant accounting policies of the
Fund are as follows:
Valuation of Investments: In determining net asset value, the Trust utilizes an
independent pricing service approved by the Trustees. Debt investment securities
have a primary market over the counter and are valued on the basis of valuations
furnished by the pricing service. The pricing service values portfolio
securities at quoted bid prices or the yield equivalents when quotations are not
readily available. Securities for which quotations are not readily available are
valued at fair value as determined by the pricing service using methods which
include consideration of yields or prices of municipal obligations of comparable
quality, type of issue, coupon, maturity, and rating; indications as to value
from dealers and general market conditions. The valuation procedures used by the
pricing service and the portfolio valuations received by the Trust 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 value.
Federal Income Taxes: It is the policy of the Trust 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 December 31, 1999 represent
exempt interest dividends which are excludable by shareholders from gross income
for Federal income tax purposes.
When-Issued and Delayed Delivery Transactions: The Trust may engage in
when-issued or delayed delivery transactions. To the extent the Trust engages in
such transactions, it will do so for the purpose of acquiring portfolio
securities consistent with the investment objectives and not for the purpose of
investment leverage or to speculate on interest rate changes. At the time the
Trust makes a commitment to purchase a security for the Fund, 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 Trust 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 six months ended
December 31, 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. The Trust entered
into an Administrative Services Agreement with the Adviser, whereby the Adviser
will perform certain administrative services for the shareholders and for which
fees will be payable at an annual rate of up to 1/8 of 1% of the average daily
net assets. For the six months ended December 31, 1999 the Adviser voluntarily
reimbursed certain operating expenses amounting to $48,579. The Trust has an
underwriting agreement with Thornburg Securities Corporation (the
"Distributor"), which acts as the Distributor of Fund shares. For the six months
ended December 31, 1999, the Distributor earned commissions aggregating $47 from
the sale of Class A shares.
Pursuant to a Service Plan, under Rule 12b-1 of the Investment Company Act of
1940, the Trust may reimburse to the Adviser an amount not to exceed 1/4 of 1%
per annum of the Fund's average net assets for payments made by the Adviser to
securities dealers and other financial institutions to obtain various
shareholder related services. The Adviser may pay out of its own funds
additional expenses for distribution of the Fund's shares. Certain officers and
trustees of the Trust are also officers and/or directors of the Adviser and
Distributor. The compensation of unaffiliated trustees is borne by the Trust.
Note 4 - Shares of Beneficial Interest
At December 31, 1999 there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $23,918,157. Transactions in
shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1999 June 30, 1999
Shares Amount Shares Amount
Class A Shares
<S> <C> <C> <C> <C>
Shares sold ................................... 110,287 $ 1,350,286 160,953 $ 2,053,855
Shares issued to shareholders in
reinvestment of distributions ........ 32,113 392,800 61,983 788,545
Shares repurchased ............................ (82,658) (1,008,869) (235,579) (3,000,666)
Net Increase (Decrease) ....................... 59,742 $734,217 (12,643) ($ 158,266)
</TABLE>
Note 5 - Securities Transactions
For the six months ended December 31, 1999 the Fund had purchase and sale
transactions (excluding short-term securities) of $5,863,210 and $2,936,132,
respectively. The cost of investments is the same for financial reporting and
Federal income tax purposes. At December 31, 1999, net unrealized appreciation
of investments was $987,593, resulting from $1,050,264 gross unrealized
appreciation and $62,671 gross unrealized depreciation.
Accumulated net realized loss from security transactions included in net assets
at December 31, 1999 aggregated $51,126.
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1999 Year Ended June 30:
1999 1998*
CLASS A SHARES:
<S> <C> <C> <C>
Net asset value, beginning of period ................ $ 12.36 $ 12.71 $ 12.50
Income from investment operations:
Net investment income ...................... 0.32 0.64 0.52
Net realized and unrealized
gain (loss) on investments ................. (0.25) (0.33) 0.21
Total from investment operations .................... 0.07 0.31 0.73
Less dividends from:
Net investment income ...................... (0.32) (0.64) (0.52)
Realized capital gains ..................... 0.00 (0.02) 0.00
Change in net asset value ........................... (0.25) (0.35) 0.21
Net asset value, end of period ...................... $ 12.11 $ 12.36 $ 12.71
TOTAL RETURN (a) .................................... 0.53% 2.38% 5.92%
RATIOS/SUPPLEMENTAL DATA Ratios to average net asset:
Net investment income ...................... 5.12%(b) 5.00% 4.99%(b)
Expenses, after expense reductions ......... 0.75%(b) 0.75% 0.78%(b)
Expenses, before expense reductions ........ 1.14%(b) 1.16% 1.19%(b)
Portfolio turnover rate ............................. 12.14% 9.06% 42.26%
Net assets at end of period (000) .................. $ 24,855 $ 24,633 $ 25,472
<FN>
(a) Sales loads are not reflected in computing total return, which is not
annualized for periods less than one year.
(b) Annualized.
*Sales of Class I shares commenced on September 4, 1997.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Schedule of Investments
Thornburg New York Intermediate Municipal Fund
December 31, 1999
CUSIPS: Class A - 885-215-665
NASDAQ Symbols: Class A - THNYX
<S> <C> <C> <C>
590,000 Amherst Industrial Development Authority Lease Revenue Bonds NR/A $595,180
Series A, 5.25% due10/1/2007 (Pink Complex Project; LOC: Key
Bank)
700,000 Bethlehem Central School District General Obligation, 7.10% Aaa/AAA 785,862
due 11/1/2006(Insured: AMBAC)
215,000 Canastota Central School District General Obligation, 7.10% Baa2/NR 235,786
due 6/15/2007
205,000 Canastota Central School District General Obligation, 7.10% Baa2/NR 226,337
due 6/15/2008
250,000 Dutchess County Industrial Development Agency, 5.55% due NR/AA- 236,890
7/1/2014
1,000,000 Dutchess County Industrial Development Agency, 6.05% due NR/AA 998,070
11/1/2019 (Kaatsbaan Dance Center Project)
550,000 Guam Power Authority Revenue Series A, 6.625% due 10/1/2014 NR/AAA 603,867
880,000 Monroe County Industrial Development Agency Revenue, 6.45% due Aa1/NR 924,255
2/1/2014 (CivicFacility - Depaul Community Facility Project;
LOC: Fleet Bank of New York)
500,000 MTA New York Service Contract Rev., 7.00% due 7/1/2004 Aaa/A- 527,365
pre-refunded 7/01/01 @102
530,000 Nassau Health Care Corporation, 6.00% due 8/1/2011 Aaa/AAA 551,529
460,000 New York City General Obligation, 7.10% due 2/1/2009 A3/A- 488,502
pre-refunded 2/01/02 @101.5
500,000 New York City General Obligation, 7.00% due 2/1/2019 NR/A- 529,995
pre-refunded 7/01/02 @101.5
1,000,000 New York City General Obligation Series B, 7.20% due 8/15/2008 A3/A- 1,105,080
pre-refunded8/15/04 @ 101
250,000 New York City General Obligation Series B-1, 7.30% due Aaa/A- 277,733
8/15/2010 pre-refunded8/15/04 @ 101
1,000,000 New York City Municipal Water Finance Authority, Series B, Aaa/AAA 1,032,170
5.75% due 6/15/2013
400,000 New York City Municipal Water Finance Authority, 4.70% due VMIG1/A1+ 400,000
6/15/2024 put1/1/2000 (daily demand notes)
40,000 New York City Unrefunded Balance General Obligation, 7.10% due A3/A- 42,233
2/1/2009
505,000 New York Dormitory Authority, 6.00% due 7/1/2008 (Champlain NR/AAA 531,058
Valley PhysiciansProject; Insured: Connie Lee)
500,000 New York Dormitory Authority Revenue Series B, 6.25% due Aaa/AAA 536,995
5/15/2014 pre-refunded5/15/04 @ 102
200,000 New York Dormitory Authority Revenue, 7.85% due 2/1/2029 (Park NR/AAA 204,468
Ridge HousingInc. Project; Collateralized: GNMA)
500,000 New York Dormitory Authority Revenue, 7.35% due 8/1/2029 NR/AAA 543,305
(Jewish GeriatricProject; Insured: FHA)
155,000 New York Dormitory Authority Revenues, City University Series Baa1/BBB+ 156,482
C, 6.00% due7/1/2016 pre-refunded 7/01/00 @ 100
345,000 New York Dormitory Authority Revenues, City University Series Baa1/BBB+ 340,032
C, 6.00% due7/1/2016
1,000,000 New York Dormitory Authority Revenues, 6.10% due 7/1/2019 Aa1/NR 969,010
(Ryan ClintonCommunity Health CenterProject; Insured: Sonyma
Mortgage)
400,000 New York Environmental Facilities Corp. PCR St. Water Aa2/AA- 408,984
Revolving Fund Series B,7.50% due 3/15/2011
600,000 New York Environmental Facilities Corp. PCR St. Water Aa1/AAA 656,172
Revolving Fund Series E,6.875% due 6/15/2014 refunded 6/01/04
@ 101.5
400,000 New York Environmental Facilities Corp. PCR St. Water Aa1/AA- 431,104
Revolving Fund Series E,6.875% due 6/15/2014
1,000,000 New York General Obligation, 9.875% due 11/15/2005 A2/A+ 1,242,050
750,000 New York Housing Finance Agency SVC Contract Obligation Rev. Baa1/A- 761,062
Series A, 6.375%due 9/15/2015
200,000 New York Local Government Assistance Corporation Series 1992, NR/BBB+ 209,078
6.875% due3/15/2006
1,000,000 New York Medical Care Facilities Finance Agency Rev. Secured Baa/AAA 1,062,150
Hospital Rev.Series 1991-A, 7.35% due 8/15/2011 pre-refunded
8/15/01 @ 102
500,000 New York Medical Care Facilities Finance Agency Rev. Series A, Aaa/AAA 550,075
6.85% due2/15/2017 pre-refunded 2/15/05 @ 102 (Brookdale
Hospital Medical Center Project)
500,000 New York Medical Care Facilities Finance Agency Rev. Series A, Aaa/AAA 549,055
6.80% due2/15/2020 pre-refunded 2/15/05 @ 102 (New York
Downtown Hospital Project)
140,000 New York Medical Care Facilities Finance Agency Revenue, NR/AA 144,309
6.125% due 2/15/2014
650,000 New York Medical Care Facilities Finance Agency Revenue Series Aaa/AAA 684,443
A, 6.50% due11/1/2019 pre-refunded 11/1/01 @ 102 (Aurelia
Osborn Fox Memorial HospitalProject; Insured: FSA)
600,000 New York Medical Care Facilities Finance Agency Revenue Series Aaa/AAA 614,352
B, 7.45% due2/15/2029 pre-refunded 2/15/00 @ 102 (St. Lukes
Hospital Project; Insured: FHA)
1,000,000 New York Mortgage Agency Rev. Series 29-B, 6.45% due 4/1/2015 Aa2/NR 1,027,220
2,000,000 New York Urban Dev. Corp Correctional Facilities Rev., 0% due Baa1/A- 1,297,760
1/1/2008
355,000 Oneida County Industrial Development Agency, 6.00% due NR/AA 363,850
1/1/2010
400,000 Onondaga County Industrial Development Civic Facilities NR/A+ 425,588
Revenue, 7.90% due1/1/2017 pre-refunded 1/1/03 @ 103 (LOC:
Fleet Trust Company)
300,000 Puerto Rico Industrial Tourist Educational Medical and NR/BBB- 288,099
Environmental ControlFacilities Series A, 5.70% due 8/1/2013
(Polytechnic University Puerto RicoProject)
100,000 Southampton Village General Obligation Series B, 7.60% due Aaa/AAA 109,647
9/1/2003 (Insured:MBIA)
500,000 Triborough Bridge and Tunnel Authority Special Obligation A1/A- 520,300
Series B, 6.875% due1/1/2015
625,000 Valley Central School District Montgomery, 7.15% due 6/15/2007 Aaa/AAA 706,350
(Insured: AMBAC)
165,000 Watkins Glen Central School District, 7.25% due 6/15/2004 Aaa/AAA 181,086
(Insured: MBIA)
110,000 Waverly General Obligation, 9.05% due 6/15/2004 (Insured: Aaa/AAA 128,592
MBIA) (ETM)
TOTAL INVESTMENTS (Cost $24,215,937) $ 25,203,530
<FN>
+ Credit ratings are unaudited.
See notes to financial statements.
</FN>
</TABLE>
