THORNBURG Rule 497(k)(1)(iii)(B)
INTERMEDIATE
MUNICIPAL
FUND
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Fund Profile
February 18,2000
This Profile summarizes key information about the Fund that is included in
the Fund's Prospectus. The Fund's Prospectus includes additional
information about the Fund, including a more detailed description of the
risks associated with investing in the Fund that you may want to consider
before you invest. You may obtain the Prospectus and other information
about the Fund at no cost by calling 800-847-0200.
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Investment Goals
The Fund's primary goal is providing as high a level of current income
exempt from federal individual income tax as is consistent, in the view of
the Fund's investment adviser, with preservation of capital. Its secondary
goal is to reduce fluctuations in its share price relative to long-term
municipal bond portfolios. No assurance can be given that these goals will
be achieved.
Principal Investment Strategies of the Fund
The Fund pursues its primary goal by investing principally in a laddered
maturity portfolio of municipal obligations which are issued by states and
state agencies and local governments and their agencies. The Fund invests
in obligations which are rated as investment grade or, if unrated, which
are issued by obligors which have comparable investment grade obligations
outstanding or which are deemed by the Fund's investment adviser to be
comparable to obligors with outstanding investment grade obligations. The
Fund pursues its secondary goal of reducing share price fluctuations by
maintaining a dollar-weighted average portfolio maturity of normally three
to ten years.
Thornburg Investment Management, Inc. (Thornburg) actively manages the
Fund's portfolio. Investment decisions are based upon outlooks for
interest rates and securities markets, the supply of municipal debt
securities, and analysis of specific securities. The Fund ordinarily will
acquire securities for investment rather than for realization of gains on
market fluctuations. However, it may dispose of any security prior to its
scheduled maturity to enhance income or reduce loss, to change the
portfolio's average maturity, or to otherwise respond to current market
conditions. The Fund's portfolio is "laddered" by investing so that some
obligations mature during each of the coming years. The objective of
preserving capital may prevent the Fund from obtaining the highest yields
available.
Additional information about the Fund's investments is available in the
Fund's Annual and Semiannual Reports to Shareholders. In the Fund's Annual
Report you will find a discussion of the market conditions and investment
strategies which significantly affected the Fund's performance during the
last fiscal year. You may obtain copies of the Fund's most recent Annual
and Semiannual Reports and Prospectus at no cost by calling the Fund's
Distributor, Thornburg Securities Corporation, at (800) 847-0200.
Principal Risks
The value of the Fund's shares and its dividends will fluctuate in response
to changes in interest rates. When interest rates increase, the value of
the Fund's investments declines and the Fund's share value is reduced.
This effect is more pronounced for intermediate and longer term obligations
owned by the Fund. During periods of declining interest rates the Fund's
dividends decline. The value of Fund shares also could be reduced if
municipal obligations held by the Fund were downgraded by rating agencies,
or went into default, or if legislation or other government action reduces
the ability of issuers to pay principal and interest when due or changes
the tax treatment of interest on municipal obligations. A portion of the
Fund's dividends could be subject to the federal alternative minimum tax.
The loss of money is a risk of investing in the Fund, and when you sell
your shares they may be worth less than what you paid for them.
An investment in the Fund is not a deposit in any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
Past Performance of the Fund
The following information provides some indication of the risks of
investing in the Fund by showing how the Fund's investment results vary
from year to year. The bar chart shows how the annual total returns for
Class A shares have been different in each full year shown, and the average
annual total return figures compare Class A and Class C share performance
to the Merrill Lynch Municipal (7-12 years) Bond Index, a broad measure of
market performance. Performance in the past is not necessarily an
indication of how the Fund will perform in the future.
<The following are presented as bar graphs in the Profile>
Intermediate Municipal Fund Annual Total Returns Class A Shares
- ------------------------------------------------------------
20%
15%
12.29 13.22
10% 9.81
7.20 5.47
5%
4.45
0%
(2.48) (1.98)%
- -5
'92 '93 '94 '95 '96 '97 '98 '99
Highest quarterly results for time period shown: 4.91% (quarter ended
3/31/95).
Lowest quarterly results for time period shown: (3.33)% (quarter ended
3/31/94).
The sales charge for Class A shares is not reflected in the returns shown
above in the bar chart, and the returns would be less if the charge was
taken into account.
Intermediate National Fund Average Annual Total Returns
- -----------------------------------------------------
(periods ended 12/31/99)
One Year Five Years Since Inception
-------- ---------- ---------------
Class A Shares (3.95)% 5.14% 5.85% (7/23/91)
Merrill Lynch Index (1.21)% 6.76% 6.42%
Class C Shares (2.45)% 5.10% 4.40% (9/1/94)
Merrill Lynch Index (1.21)% 6.76% 5.93%
Fees and Expenses of the Fund
The following tables describe the fees and expenses you may pay if you buy
and hold shares of the Fund.
Shareholder Fees (Fees Paid Directly From Your Investment)
Class A Class C
------- -------
Maximum Sales Charge (load) on Purchases 2.00% none
(as a percentage of offering price)
Maximum Deferred Sales Charge (load)
on Redemptions 0.50%* 0.60%**
(as a percentage of redemption proceeds or
original purchase price, whichever is lower)
* Imposed only on redemptions of purchases greater than $1 million in
the event of a redemption within 12 months of purchase.
** Imposed only on redemptions of Class C shares within 12 months
of purchase.
Annual Fund Operating Expenses (Expenses That Are Deducted
- ------------------------------ From Fund Assets)
Class A Class C
------- -------
Management Fee .50% .50%
Distribution and Service (12b-1) Fees .24% 1.00%
Other Expenses .28% .35%
---- -----
Total Annual Fund Operating Expenses 1.02%* 1.85%*
*Thornburg Investment Management, Inc. and Thornburg Securities Corporation
intend to waive fees and reimburse expenses so that actual Class A expenses
are .99% and actual Class C expenses are 1.40%. Waiver of fees and
reimbursement of expenses may be terminated at any time.
Example. This Example is intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds.
The Example assumes that you invest $10,000 in the Fund for the time
periods indicated and redeem all of your shares at the end of these
periods. The Example also assumes that your investment has a 5% return
each year, that dividends and distributions are reinvested, and that the
Fund's operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class A Shares $306 $530 $772 $1,469
Class C Shares 250 588 1,012 2,197
You would pay the following expenses if you did not redeem your Class C
shares:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Class C Shares 190 588 1,012 2,197
Investment Adviser and Portfolio Managers
The Fund's investment adviser is Thornburg Investment Management, Inc.
(Thornburg), providing investment management and administrative services.
Brian J. McMahon and George T. Strickland, both of whom are managing
directors of Thornburg, are the portfolio managers for the Fund. Mr.
McMahon has managed municipal bond portfolios for Thornburg since 1984, and
Mr. Strickland has performed municipal bond credit analysis and management
since joining Thornburg in 1991. Mr. McMahon and Mr. Strickland are
assisted by other employees of Thornburg in managing the Fund's portfolio.
Purchase of Fund Shares
The Fund offers multiple classes of shares. Purchases of Class A and
Class C shares are described below.
Class A Shares
Class A Shares are sold subject to a sales charge deducted at the time you
purchase your shares:
Class A Shares Sales Charge
as a percentage as a percentage
Purchase Amount of Offering Price of Net Asset Value
- --------------- ----------------- ------------------
[S] [C] [C]
Less than $249,999.99 2.00% 2.04%
$250,000 to 499,999.99 1.50% 1.52%
$500,000 to 999,999.99 1.25% 1.27%
$1,000,000 and up 0.00% 0.00%
No sales charge will be payable at the time of purchase on investments of
$1 million or more made by a purchaser. A contingent deferred sales
charge will be imposed on these investments in the event of a share
redemption within one year following the share purchase at the rate of
1/2 of 1% of the value of the shares redeemed.
Shareholders who sign a letter of intent to purchase more than $250,000
over 13 months may buy Class A shares at a reduced sales charge. Certain
shareholders may buy Class A shares at no sales charge, including the
following:
- shareholders who purchase shares within 24 months of redeeming
Class A shares;
- customers of trust companies or bank trust departments;
- customers of fee for service financial advisors;
- shareholders investing through a broker dealer's wrap program;
- shareholders whose orders are placed through certain broker
dealers maintaining omnibus accounts.
Class C Shares
Class C shares are sold at net asset value, but are subject to higher
annual expenses. Class C shares are subject to a .60% contingent deferred
sales charge if redeemed within one year of purchase.
The minimum purchase to open an account is $5,000. Minimum additional
purchase for any account is $100. Minimum account size is $1,000, and
accounts falling below that amount may be subject to mandatory redemption.
Purchases may be made by mail, through your financial advisor or by
telephone.
Redeeming Fund Shares
You can withdraw money from your Fund account on any Fund business day by
redeeming some or all of your shares (selling them back to the Fund either
directly or through your financial advisor). Your shares will be redeemed
by the Fund at the net asset value next computed after your order is
received in proper form. If your purchase was subject to a contingent
deferred sales charge within one year of purchase, the charge will be
deducted. You may redeem Fund shares by mail, through your financial
advisor, or by telephone, if you have previously signed up for the
telephone redemption feature.
Distributions and Taxes
The Fund distributes substantially all of its net income and realized
capital gains to shareholders each year. The Fund declares its net
investment income daily and distributes it monthly. The Fund will
distribute any net realized capital gains at least annually. Distributions
are reinvested automatically in additional shares unless you elect to
receive them in cash. Income dividends attributable to tax exempt
municipal obligations owned by the Fund are exempt from federal personal
income tax, but some portion of these dividends could be subject to the
alternative minimum tax. Dividends attributable to market discount on
portfolio securities and distributions of net short-term capital gains are
taxable as ordinary income. Any distributions of long-term capital gains
are taxed as long-term capital gains for federal income tax purposes.
Income dividends may not be exempt from state income taxes or taxes imposed
on persons who are not individuals.
Other Fund Services
* Thornburg Funds telephone representatives: Monday through Friday from
7:30 a.m. to 4:30 p.m. Mountain Time, at 1-800-847-0200.
* Thornburg Funds Audio Response System: 24 hours a day, 7 days a week.
Call 1-800-847-0200.
* The Automatic Investment Plan: transfer as little as $100 from your bank
account on a weekly, monthly or quarterly basis.
* Exchange Class A shares of any other Thornburg Fund for Class A
shares of the Fund without paying any additional sales charge.
* Website: Contact Thornburg on the Internet at www.Thornburg.com
Contact your financial advisor or the Fund for more information on these and
other services available to you.
Please call 1-800-847-0200 or your financial adviser for an application to
purchase shares of the Fund. A copy of the Fund's prospectus will be sent
to you with the application.
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Thornburg Securities Corporation, Distributor
119 East Marcy Street, Santa Fe, New Mexico 87501
800-847-0200
www.thornburg.com e-mail: [email protected]
