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 Mexico Intermediate Municipal Fund
All data as of 3.31.00
Fund Facts
Thornburg New Mexico Intermediate Municipal Fund
A Shares D Shares
SEC Yield 4.19% 4.01%
Taxable Equivalent Yields 7.58% 7.26%
NAV $12.79 $12.79
Max. Offering Price $13.05 $12.79
Total returns
(Annual Average - After Subtracting Maximum Sales Charge)
One Year (1.36)% N/A
Five Year 4.22% N/A
Since Inception 5.52% 0.56%
Inception Date (6.18.1991) (6.1.1999)
The taxable equivalent yield assumes a 39.6% marginal federal tax rate and an
8.50% marginal New Mexico rate. The investment return and principal value of an
investment in the fund will fluctuate so that, when redeemed, an investor's
shares may be worth more or less than their original cost.
Maximum sales charge of the Fund's Class A Shares is 2.00%. The Fund's Class C
Shares were converted to Class A Shares on January 31, 1996. The date quoted
represent past performance and may not be construed as a guarantee of future
results.
Letter to shareholders
Dear Shareholder,
We are pleased to present the Semi-Annual Report for the Thornburg New Mexico
Intermediate Municipal Fund for the six month period ending March 31, 2000. The
net asset value of the A shares decreased by 13 cents to $12.79 during the
period. If you were with us for the entire period, you received dividends of
30.7 cents per share. If you reinvested your dividends, you received 31 cents
per share. Investors who owned D shares received dividends of 29 cents and 29.2
cents per share, respectively.
As we write this letter to you, the bond market is attempting to predict the net
effect on interest rates of two powerful forces. The strong U.S. economy
continues to gather strength, and 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 has in the
preceding 15 months.
On the other hand, deficit spending by 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 is down about 30% from last year due to swelling tax
receipts in most state and local government entities.
This decrease in the supply of bonds will put downward pressure on interest
rates. 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
Mexico Intermediate 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 7 year bond with a 5% interest
rate expects a total return of 35% from the bond...7 years of 5% interest. If
interest rates increase by 1.25% (to 6.25%) during the first year the investor
owns the bond, the market price of the bond will decline to 93.8% of the
maturity value. This decline in the market price more than offsets the interest
income received on the bond during the year, yielding a total return on the bond
during the year of approximately -1.2%. This describes rather well how many
bonds in your Thornburg New Mexico Intermediate Municipal Fund performed in the
preceding 12 months. 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 35% over the remaining 6 year
life of the bond. In this example, the components of the 35% return will include
(i) 6 years of 5% interest (6 x 5% = 30%), and (ii) the recovery of the 6.2%
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 -1.2%, the average annual return
over the remaining 6 years is 6.25%. The final 7 year outcome doesn't
change...unless the original bondholder gets rattled by the -1.2% 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 Mexico Intermediate Municipal Fund is a laddered bond portfolio.
This portfolio consists of over 160 municipal obligations from New Mexico
issuers and 2 U.S. territories. Approximately 85% of the bonds are rated A or
better by one of the major rating agencies. 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.
Today, your fund's weighted average maturity is 6.8 years, and we always keep it
below 10 years. Over the last six months, your average portfolio maturity has
shortened slightly. If bond yields increase in the coming months, we will extend
your maturities slightly in order to lock in the higher yields. We will also
attempt to further upgrade the credit quality of your portfolio. Some credit
stress is already apparent in the U. S. bond market, and more will follow if
increase in short-term interest rates lead to an economic slowdown. After an
economic slowdown starts, yields available on lower rated bonds usually increase
significantly in relation to high grade bonds. Over the years, our practice of
laddering a diversified portfolio of short and intermediate maturity bonds has
allowed your fund to consistently perform well in varying interest rate
environments. Your fund has earned Morningstar's 5-star overall rating* for
risk-adjusted performance. We would like to attribute this to capable execution
of a sensible investment strategy over time. Thank you for investing in
Thornburg New Mexico Intermediate Municipal Fund.
Sincerely,
Brian McMahon George Strickland
Managing Director Managing Director
*Morningstar proprietary rating reflects historical risk adjusted performances
as of 3/31/00. Ratings are subject to change every month. Funds with at least
three years of performance history are assigned ratings from one star (lowest)
to five stars (highest). Morningstar overall ratings are calculated from the
funds' three-, five-and ten year average annual returns and a risk factor that
reflects fund performance relative to three month Treasury bill returns. 10% of
the funds in an investment category receive five stars and 22.5% receive four
stars. THNMX is ranked 5 stars for the 3 and 5 year periods. At 3/31/00, there
were 1,682 bond funds with 3-year ratings and 1,394 with 5-year ratings in
Morningstar's Municipal Single-State Intermediate category. Past performance
cannot guarantee future results.
Statement of assets and liabilities
Thornburg New Mexico Intermediate Municipal Fund
ASSETS
Investments at value (cost $144,468,857) ............... $146,141,829
Cash ................................................... 195,209
Receivable for investments sold ........................ 1,424,612
Interest receivable .................................... 2,472,783
Receivable for fund shares sold ........................ 192,120
Prepaid expenses and other assets ...................... 1,962
Total Assets .................................. 150,428,515
LIABILITIES
Payable for securities purchased ....................... 891,032
Payable for fund shares redeemed ....................... 375,840
Accounts payable and accrued expenses .................. 131,015
Payable to investment advisor (Note 3) ................. 75,417
Dividends payable ...................................... 261,287
Total Liabilities ............................. 1,734,591
NET ASSETS ............................................. $148,693,924
NET ASSET VALUE:
Class A Shares:
Net asset value and redemption price per share ($147,262,966
applicable to 11,514,806 shares of beneficial interest
outstanding - Note 4) ................................. $ 12.79
Maximum sales charge, 2.00 % of offering
price (2.04% of net asset value per share) ............ 0.26
Maximum Offering Price Per Share ...................... $ 13.05
Class D Shares:
Net asset value and offering price per share * ($1,430,958 applicable to 111,851
shares of beneficial interest outstanding - Note 4) $12.79
See notes to financial statements.
Statement of operations INVESTMENT INCOME:
Interest income (net of premium amortized
of $228,937) ................................................ $ 4,380,475
EXPENSES:
Investment advisory fees (Note 3) ........................... 378,748
Administration fees (Note 3)
Class A Shares ..................................... 93,938
Class D Shares ..................................... 749
Distribution and service fees (Note 3)
Class A Shares ..................................... 187,875
Class D Shares ..................................... 5,960
Transfer agent fees ......................................... 49,976
Custodian fees .............................................. 48,285
Registration and filing fees ................................ 2,532
Professional fees ........................................... 11,341
Accounting fees ............................................. 7,940
Trustee fees ................................................ 1,420
Other expenses .............................................. 4,416
Total Expenses .............................................. 793,180
Less:
Expenses reimbursed by investment advisor (Note 3) . (35,731)
Distribution and service fees waived (Note 3) ...... (2,963)
Net Expenses ................................................ 754,486
Net Investment Income ....................................... 3,625,989
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (Note 5)
Net realized gain (loss) on investments sold ................ (801,765)
Increase (decrease) in unrealized appreciation of investments (822,370)
Net Realized and Unrealized
Gain (Loss) on Investments ......................... (1,624,135)
Net Increase in Net Assets Resulting
From Operations ............................................. $ 2,001,854
See notes to financial statements ...........................
Statements of changes in net assets Six Months Ended Year Ended March 31, 2000
September 30, 1998
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
<S> <C> <C>
Net investment income ....................................... $ 3,625,989 $ 7,223,369
Net realized gain (loss) on investments sold ................ (801,765) (192,060)
Increase (decrease) in unrealized appreciation of investments (822,370) (6,146,730)
Net Increase in Assets Resulting from Operations ............ 2,001,854 884,579
DIVIDENDS TO SHAREHOLDERS:
From net investment income
Class A Shares ..................................... (3,598,973) (7,214,796)
Class D Shares ..................................... (27,016) (8,573)
FUND SHARE TRANSACTIONS (Note 4):
Class A Shares ..................................... (6,661,520) 8,748,455
Class D Shares ..................................... 317,848 1,133,909
Net Increase in Net Assets ......................... (7,967,807) 3,543,574
NET ASSETS:
Beginning of period ................................ 156,661,731 153,118,157
End of period ...................................... $ 148,693,924 $ 156,661,731
<FN>
See notes to financial statements ...........................
</FN>
</TABLE>
Notes to financial statements
Note 1 - Organization
Thornburg New Mexico Intermediate Municipal Fund (the "Fund"), is a
non-diversified series of Thornburg Investment Trust (the "Trust"). The Trust is
organized as a Massachusetts business trust under a Declaration of Trust dated
June 3, 1987 and is registered as a diversified, open-end management investment
company under the Investment Company Act of 1940, as amended. The Trust is
currently issuing seven classes of shares of beneficial interest in addition to
those of the Fund: Thornburg Florida Intermediate Municipal Fund, Thornburg New
York Intermediate Municipal Fund, Thornburg Intermediate Municipal Fund,
Thornburg Limited Term U.S. Government Fund, Thornburg Limited Term Income Fund,
Thornburg Value Fund and Thornburg Global Value Fund. Each series is considered
to be a separate entity for financial reporting and tax purposes. The Fund's
investment objective is to obtain as high a level of current income exempt from
Federal income tax as is consistent with the preservation of capital. The Fund
currently offers two classes of shares of beneficial interest, Class A and Class
D shares. Each class of shares of a Fund represents an interest in the same
portfolio of investments of the Fund, except that (i) Class A shares are sold
subject to a front-end sales charge collected at the time the shares are
purchased and bear a service fee, (ii) Class D shares are sold at net asset
value without a sales charge at the time pf purchase, and bear both a service
fee and a distribution fee, and (iii) the respective classes have different
reinvestment priviledges. Additionally, the Fund may allocate among its classes
certain expenses, to the extent allowable to specific classes, including
transfer agent fees, government registration fees, certain printing and postage
costs and administrative and legal expenses. Currently, class specific expenses
of the Fund are limited to distribution fees, administration fees and certain
transfer agent expenses.
Note 2 - Significant Accounting Policies Significant accounting policies of the
Fund are as follows:
Valuation of Investments: In determining net asset value, the Fund utilizes an
independent pricing service approved by the Trustees. Debt investment securities
have a primary market over the counter and are valued on the basis of valuations
furnished by the pricing service. The pricing service values portfolio
securities at quoted bid prices at 4:00 pm EST or the yield equivalents when
quotations are not readily available. Securities for which quotations are not
readily available are valued at fair value as determined by the pricing service
using methods which include consideration of yields or prices of municipal
obligations of comparable quality, type of issue, coupon, maturity, and rating;
indications as to value from dealers and general market conditions. The
valuation procedures used by the pricing service and the portfolio valuations
received by the Fund are reviewed by the officers of the Trust under the general
supervision of the Trustees. Short-term obligations having remaining maturities
of 60 days or less are valued at amortized cost, which approximates market
value.
Federal Income Taxes: It is the policy of the Fund to comply with the provisions
of the Internal Revenue Code applicable to "regulated investment companies" and
to distribute all of its taxable (if any) and tax exempt income to its
shareholders. Therefore no provision for Federal income tax is required.
Dividends paid by the Fund for the six months ended March 31, 2000 represent
exempt interest dividends which are excludable by shareholders from gross income
for Federal income tax purposes. Net realized capital losses are carried forward
to offset realized gains in future years. To the extent such carryforwards are
used, no capital distributions will be made. When-Issued and Delayed Delivery
Transactions: The Fund may engage in when-issued or delayed delivery
transactions. To the extent the Fund engages in such transactions, it will do so
for the purpose of acquiring portfolio securities consistent with its investment
objectives and not for the purpose of investment leverage or to speculate on
interest rate changes. At the time the Fund makes a commitment to purchase a
security on a when-issued basis, it will record the transaction and reflect the
value in determining the Fund's net asset value. When effecting such
transactions, assets of the Fund of an amount sufficient to make payment for the
portfolio securities to be purchased will be segregated on the Fund's records on
the trade date. Securities purchased on a when-issued or delayed delivery basis
do not earn interest until the settlement date.
Dividends: Net investment income of the Fund is declared daily as a dividend on
shares for which the Fund has received payment. Dividends are paid monthly and
are reinvested in additional shares of the Fund at net asset value per share at
the close of business on the dividend payment date, or at the shareholder's
option, paid in cash. Net capital gains, to the extent available, will be
distributed annually.
General: Securities transactions are accounted for on a trade date basis.
Interest income is accrued as earned. Premiums and original issue discounts on
securities purchased are amortized over the life of the respective securities.
Realized gains and losses from the sale of securities are recorded on an
identified cost basis. Use of Estimates: The preparation of financial
statements, in conformity with generally accepted accounting principles,
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.
Note 3 - Investment Advisory Fee and Other Transactions With Affiliates
Pursuant to an investment advisory agreement, Thornburg Investment Management,
Inc. (the "Adviser") serves as the investment adviser and performs services for
which the fees are payable at the end of each month. For the six months ended
March 31, 2000, 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 six months ended March 31, 2000,
the Adviser voluntarily reimbursed certain operating expenses amounting to
$35,731.
The Fund has an underwriting agreement with Thornburg Securities Corporation
(the "Distributor"), which acts as the Distributor of Fund shares. For the six
months ended March 31, 2000, the Distributor earned commissions aggregating $743
from the sale of Class A shares.
Pursuant to a Service Plan, under Rule 12b-1 of the Investment Company Act of
1940, the Fund may reimburse to the Adviser an amount not to exceed .25 of 1%
per annum of the average net assets attributable to each class of shares of the
Fund for payments made by the Adviser to securities dealers and other financial
institutions to obtain various shareholder related services. The Adviser may pay
out of its own funds additional expenses for distribution of the Fund's shares.
The Fund has also adopted a Distribution Plan pursuant to Rule 12b-1, applicable
only to the Fund's Class D shares under which the Fund compensates the
Distributor for services in promoting the sale of Class D shares of the Fund at
ann annual rate of up to .75% of the average daily net assets attributable to
Class D shares. Total fees incurred by each class of shares of the Fund under
their respective Service and Distribution Plans and the total amount waived for
the six months ended March 31, 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.
<TABLE>
<CAPTION>
Note 4 - Shares of Beneficial Interest
At March 31, 2000 there were an unlimited number of shares of beneficial
interest authorized, and capital paid-in aggregated $148,764,187. Transactions
in shares of beneficial interest were as follows:
Six Months Ended March 31, 2000 Year Ended September 30, 1999
Class A Shares Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold .......................... 1,078,639 $ 13,781,412 2,476,782 $ 32,892,441
Shares issued to shareholders in
reinvestment of distributions 161,878 2,069,537 324,102 4,289,129
Shares repurchased ................... (1,760,512) (22,512,469) (2,151,671) (28,433,115)
Net Increase ......................... (519,995) $ (6,661,520) 649,213 $ 8,748,455
Class D Shares (a) ................... Shares Amount Shares Amount
Shares sold .......................... 49,595 $633,135 86,525 $ 1,130,480
Shares issued to shareholders in
reinvestment of distributions 660 8,444 264 3,429
Shares repurchased ................... (25,193) 0 0
Net Increase ......................... 25,062 $317,848 86,789 $ 1,133,909
<FN>
(a) Sales of Class D shares commenced June 1, 1999.
</FN>
</TABLE>
Note 5 - Securities Transactions
For the six months ended March 31, 2000, the Fund had purchase and sale
transactions (excluding short-term securities) of $14,153,015 and $22,078,288
respectively. The cost of investments for Federal Income tax purposes is
$144,468,857. At March 31, 2000, net unrealized appreciation of investments was
$1,672,972 resulting from $3,158,720 gross unrealized appreciation and
$1,485,748 gross unrealized depreciation.
Accumulated net realized losses from securities transactions included in net
assets at March 31, 2000 aggregated $1,661,060. For Federal income tax purposes,
the Fund had deferred capital losses occuring subsequent to October 31, 1998 of
$192,000 and capital loss carryforwards of $722,000. The carryforwards expire in
varying amounts through 2007.
<TABLE>
<CAPTION>
Financial highlights
Six Months Ended March 31, Year Ended September 30,
2000 1999 1998 1997 1996 1995
Class A Shares:
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.92 $13.45 $13.28 $13.09 $13.12 $12.72
Income from investment operations:
Net investment income 0.31 0.61 0.62 0.64 0.63 0.60
Net realized and unrealized
gain (loss) on investments (0.13) (0.53) 0.17 0.19 (0.03) (0.40)
Total from investment operations 0.18 0.08 0.79 0.83 0.60 1.00
Less dividends from:
Net investment income (0.31) (0.61) (0.62) (0.64) (0.63) (0.60)
Change in net asset value (0.13) (0.53) 0.17 0.19 (0.03) 0.40
Net asset value, end of period $12.79 $12.92 $13.45 $13.28 $13.09 $13.12
Total return (a) 1.39% 0.55% 6.08% 6.51% 4.68% 8.10%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income 4.79%(b) 4.57% 4.64% 4.88% 4.81% 4.71%
Expenses, after expense reductions 0.99%(b) 0.99% 1.00% 1.00% 1.00% 1.00%
Expenses, before expense reductions 1.03%(b) 1.01% 1.02% 1.05% 1.07% 1.06%
Portfolio turnover rate 9.56% 15.93% 13.74% 10.06% 10.88% 17.06%
Net assets at end of period (000) $147,263 $155,540 $153,118 $145,850 $131,307 $136,742
<FN>
(a) Sales loads are not reflected in computing total return.
(b) Annualized
</FN>
</TABLE>
Note: Prior to September 28, 1995 and January 31, 1996, the Fund issued class B
shares and class C shares. At the time of each of their conversion to class A
shares each class represented less than 1% of the Fund's net assets.
Class D Shares:
Net asset value, beginning of period $12.93 $13.20
Income from investment operations:
Net investment income 0.29 0.19
Net realized and unrealized
gain (loss) on investments (0.41) (0.27)
Total from investment operations (0.12) (0.08)
Less dividends from:
Net investment income (0.29) (0.19)
Change in net asset value (0.41) (0.27)
Net asset value, end of period $12.79 $12.93
Total return (b) 1.18% (0.61)%
Ratios/Supplemental Data Ratios to average net asset:
Net investment income 4.50%(c) 4.20%(c)
Expenses, after expense reductions 1.25%(c) 1.27%(c)
Expenses, before expense reductions 3.03%(c) 3.70%(c)
Portfolio turnover rate 9.56% 15.93%
Net assets at end of period (000) $1,431 $1,122
(a) Sales of Class D shares commenced on June 1, 1999.
(b) Sales loads are not reflected in computing total return, which is not
annualized for periods less than one year.
(c) Annualized.
<TABLE>
<CAPTION>
Schedule of Investments
Thornburg New Mexico Intermediate Municipal Fund
March 31, 2000
CUSIPS: Class A - 885-215-301; Class D - 885-215-624
NASDAQ Symbol: Class A - THNMX; Class D - THNDX*
<S> <C> <C> <C>
3,000,000 Alamogordo Hospital Revenue, 5.30% due 1/1/2013 (Gerald Champion NR/A- $2,696,130
MemorialHospital Project)
719,000 Albuquerque Collateralized Mortgage, Municipal Class B-2, 0% due Aaa/AAA 321,788
5/15/2011
1,000,000 Albuquerque Gross Receipt Tax Revenue, 5.375% due 7/1/2001 NR/AA+ 1,000,490
(Bluewater ApartmentProject)
50,000 Albuquerque Gross Receipt Tax Revenue, 6.20% due 7/1/2005 A1/AA 52,280
525,000 Albuquerque Gross Receipts, Prerefunded Adjustment Adjusted Series Aaa/AAA 470,306
B, 0% due7/1/2002
755,000 Albuquerque Gross Receipts, Unrefunded Balance Adjustment Adjusted Aaa/AAA 676,193
Series B, 0%due 7/1/2002
625,000 Albuquerque Gross Receipts, Prerefunded Adjustment Adjusted Series Aaa/AAA 531,650
B, 0% due7/1/2003
895,000 Albuquerque Gross Receipts, Unrefunded Balance Adjustment Adjusted Aaa/AAA 760,840
Series B, 0%due 7/1/2003
840,000 Albuquerque Gross Receipts, Prerefunded Adjustment Adjusted Series Aaa/AAA 642,869
B, 0% due7/1/2005
1,195,000 Albuquerque Gross Receipts, Unrefunded Balance Adjustment Adjusted Aaa/AAA 912,681
Series B, 0%due 7/1/2005
820,000 Albuquerque Gross Receipts, Prerefunded Adjustment Adjusted Series Aaa/AAA 429,639
B, 0% due7/1/2012
1,180,000 Albuquerque Gross Receipts, Unrefunded Balance Adjustment Adjusted Aaa/AAA 602,012
Series B, 0%due 7/1/2012
750,000 Albuquerque Gross Receipts Tax Revenue, Refunding Series B, 5.00% A1/AA 687,667
due 7/1/2018
335,000 Albuquerque Hospital Revenue Series A, 5.80% due 8/1/2000 Aaa/AAA 336,779
(PresbyterianHealthcare Project; Insured: MBIA)
2,500,000 Albuquerque Hospital Revenue Series A, 6.10% due 8/1/2002 (Insured: Aaa/AAA 2,570,300
MBIA)
1,000,000 Albuquerque Hospital Revenue Series A, 6.375% due 5/15/2004 Aaa/AAA 1,041,270
pre-refunded 5/15/01@ 102 (St. Joseph Healthcare Systems Project)
260,000 Albuquerque Hospital Revenue Series A, 6.375% due 8/1/2007 Aaa/AAA 273,099
(Insured: MBIA)
300,000 Albuquerque Hospital Revenue Series A, 6.625% due 5/15/2010 Aaa/AAA 313,176
pre-refunded 5/15/01@ 102 (St. Joseph Healthcare Systems Project)
1,040,000 Albuquerque Hospital Revenue Series B, 6.20% due 8/1/2002 (Insured: Aaa/AAA 1,044,555
MBIA)
1,775,000 Albuquerque Hospital Revenue Series B, 6.60% due 8/1/2007 (Insured: Aaa/AAA 1,788,455
MBIA)
2,055,000 Albuquerque Industrial Development Revenue, 5.80% due 6/1/2007 A1/NR 2,051,239
(UniversalPrinting & Publishing Project; LOC: First Security Bank)
1,175,000 Albuquerque MFHR Series 1991, 8.50% due 7/1/2021 put 7/1/01 (Beach NR/NR 1,179,817
ApartmentProject)
2,830,000 Albuquerque MFHR Series 1994, 6.75% due 1/1/2024 put 1/1/04 (Dorado NR/NR 2,943,200
VillageProject)
290,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.00% due 6/1/2001 Aaa/AAA 291,882
(EvangelicalLutheran Good Samaritan Society Project; Insured: FSA)
305,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.10% due 6/1/2002 Aaa/AAA 307,528
(EvangelicalLutheran Good Samaritan Society Project; Insured: FSA)
170,000 Albuquerque Revenue Refunding Bonds Series 1993, 5.20% due 6/1/2003 Aaa/AAA 172,015
(EvangelicalLutheran Good Samaritan Society Project; Insured: FSA)
620,000 Albuquerque Special Assessment District Series A, 6.45% due NR/BBB+ 620,180
1/1/2015 (CottonwoodMall Project; LOC: Sumitomo Bank)
1,500,000 Albuquerque Water & Sewer Revenue, 7.00% due 7/1/2003 Aa3/AA 1,539,645
600,000 Albuquerque Water & Sewer Revenue, 6.25% due 7/1/2008 Aa3/AA 630,000
1,750,000 Albuquerque Water & Sewer Revenue Series 1990-C, 7.00% due 7/1/2005 Aa3/AA 1,796,707
partiallypre-refunded 7/1/00 @ 102
1,000,000 Albuquerque Water & Sewer System Revenue Refunding Series B, 6.95% Aa3/AA 1,026,310
due 7/1/2002
585,000 Belen Gasoline Tax Revenue Refunding & Improvement, 5.40% due NR/NR 559,120
1/1/2011
400,000 Bernalillo County General Obligation, 7.00% due 2/1/2006 Aa1/AA+ 440,860
410,000 Bernalillo County General Obligation, 7.00% due 2/1/2007 Aa1/AA+ 456,683
900,000 Bernalillo County Gross Receipts Tax, Revenue, 5.50% due 10/1/2011 Aa3/AA 920,718
2,000,000 Bernalillo County Gross Receipts Tax, Revenue, 5.75% due 10/1/2015 Aa3/AA 2,044,040
2,300,000 Bernalillo County Multi Family Housing Revenue Series 1988, 5.80% NR/AA 2,333,994
due 11/1/2025put 11/1/06 (Sunchase Apartments Project; Insured: AXA
Reinsurance Co.)
4,500,000 Bernalillo County Multi Family Housing Revenue Series 1994-A, 6.50% NR/AA 4,616,415
due10/1/2019 put 10/1/05 (Village Apartments Project; Insured: AXA
Reinsurance Co.)
415,000 Cibola County Gross Receipts Tax Revenue, 5.70% due 11/1/2007 Aaa/AAA 432,065
(Insured: AMBAC)
495,000 Cibola County Gross Receipts Tax Revenue, 5.875% due 11/1/2008 Aaa/AAA 522,428
(Insured: AMBAC)
555,000 Cibola County Gross Receipts Tax Revenue, 6.00% due 11/1/2010 Aaa/AAA 586,596
(Insured: AMBAC)
1,000,000 Dona Ana County Gross Receipts Tax, 6.00% due 6/1/2014 (Insured: NR/AA 1,049,980
Asset Guaranty)
1,500,000 Dona Ana County Gross Receipts Tax Refunding and Improvement Series NR/AA 1,569,525
1993, 5.875%due 6/1/2009 (Insured: Asset Guaranty)
330,000 Dona Ana County Subordinated Gross Receipts Tax Revenue, 6.125% due NR/NR 331,191
6/1/2003
260,000 Dona Ana County Subordinated Gross Receipts Tax Revenue, 6.25% due NR/NR 261,118
6/1/2004
750,000 Farmington Utility Systems Refunding Revenue, 5.20% due 5/15/2000 Aaa/AAA 750,967
(Insured:FGIC)
775,000 Gallup Pollution Control Revenue Refunding, 6.20% due 8/15/2003 Aaa/AAA 802,605
(Plains ElectricGeneration Project; Insured: MBIA)
2,770,000 Gallup Pollution Control Revenue Refunding, 6.65% due 8/15/2017 Aaa/AAA 2,846,646
(Plains ElectricGeneration Project; Insured MBIA)
1,500,000 Gallup Pollution Control Revenue Refunding Series 1992, 6.45% due Aaa/AAA 1,566,750
8/15/2006(Insured: MBIA)
280,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due NR/NR 281,344
7/1/2000
300,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due NR/NR 305,865
7/1/2001
315,000 Hidalgo County Municipal School District of Lordsburg, 6.875% due NR/NR 324,214
7/1/2002
380,000 Las Cruces Gross Receipt Tax Revenue Series 1995, 6.00% due A3/NR 385,856
6/1/2001 (SouthCentral Solid Waste Authority Project)
625,000 Las Cruces Gross Receipts Refunding Revenue, 5.85% due 12/1/2001 A/A 636,556
1,500,000 Las Cruces Gross Receipts Refunding Revenue Series 1992, 6.25% due A/A 1,556,250
12/1/2005
420,000 Las Cruces Joint Utility Refunding and Improvement Revenue, 6.50% A1/NR 443,029
due 7/1/2007
780,000 Las Cruces Joint Utility Refunding and Improvement Revenue, 6.50% A1/NR 822,252
due 7/1/2007
1,160,000 Las Cruces Municipal Sales Tax Revenue Series 1991, 6.50% due A/NR 1,186,958
12/1/2006
155,000 Lordsburg Gross Receipts and Lodgers Tax Revenue, 8.625% due NR/NR 157,292
12/1/2002
2,150,000 Lordsburg Pollution Control Revenue, 6.50% due 4/1/2013 (Phelps A2/BBB 2,193,989
Dodge Project)
1,300,000 Los Alamos County Incorporated Utility Series A, 5.80% due 7/1/2006 Aaa/AAA 1,355,120
(Insured:FSA)
665,000 Los Alamos County New Mexico Incorporated Utility Systems Revenue, Aaa/AAA 689,785
Series A,6.00% due 7/1/2015 (Insured: FSA)
3,445,000 Los Alamos County Utility System Revenue Refunding Series A, 6.00% Aaa/AAA 3,612,599
due 7/1/2008(Insured: FSA)
350,000 Milan General Obligation Sanitary Sewer Series 1994, 7.00% due NR/NR 366,135
9/1/2013
420,000 New Mexico Educational Assistance Foundation Revenue, 6.05% due Aaa/NR 424,502
12/1/2000
130,000 New Mexico Educational Assistance Foundation Revenue, 5.20% due Aaa/NR 131,117
12/1/2001
975,000 New Mexico Educational Assistance Foundation Revenue, 6.20% due Aaa/NR 996,791
12/1/2001
600,000 New Mexico Educational Assistance Foundation Revenue, 5.50% due A/NR 602,094
11/1/2003
640,000 New Mexico Educational Assistance Foundation Revenue, 6.45% due Aaa/NR 665,530
12/1/2004
525,000 New Mexico Educational Assistance Foundation Revenue, 6.85% due A/NR 538,235
12/1/2005
1,705,000 New Mexico Educational Assistance Foundation Revenue, 6.65% due Aaa/NR 1,753,286
3/1/2007
20,000 New Mexico Educational Assistance Foundation Student Loan Revenue, Aa/NR 20,075
5.40% due8/1/2004
2,870,000 New Mexico Educational Assistance Student Loan, 6.70% due 4/1/2002 Aaa/AAA 2,955,182
(Insured:AMBAC)
1,400,000 New Mexico Educational Assistance Student Loan, 6.50% due 3/1/2004 Aaa/NR 1,453,186
745,000 New Mexico Educational Assistance Student Loan Series 2-B, 5.75% A/NR 746,848
due 12/1/2008
1,195,000 New Mexico Equipment Loan Council Hospital Revenue, 7.50% due A3/NR 1,257,224
6/1/2002pre-refunded 6/1/01 (San Juan Regional Medical Center
Project)
1,490,000 New Mexico Equipment Loan Council Hospital Revenue, 7.80% due A3/NR 1,572,397
6/1/2005pre-refunded 6/1/01 (San Juan Regional Medical Center
Project)
575,000 New Mexico Equipment Loan Council Hospital Revenue, 7.80% due A3/NR 606,797
6/1/2006pre-refunded 6/1/01 (San Juan Regional Medical Center
Project)
2,030,000 New Mexico Equipment Loan Council Hospital Revenue, 6.40% due Baa1/A- 2,084,242
6/1/2009 (MemorialMedical Center Project)
225,000 New Mexico Equipment Loan Council Hospital Revenue, 7.90% due A3/NR 237,683
6/1/2011pre-refunded 6/1/01 (San Juan Regional Medical Center
Project)
5,000,000 New Mexico Highway Commission Tax, Senior Subordinated Lien, 6.00% Aa2/AA+ 5,296,750
due 6/15/2011
780,000 New Mexico Hospital Equipment Loan, 5.60% due 6/1/2002 (Memorial Baa1/A- 782,816
Medical CenterProject)
575,000 New Mexico Hospital Equipment Loan, 5.70% due 6/1/2003 (Memorial Baa1/A- 577,754
Medical CenterProject)
1,140,000 New Mexico Hospital Equipment Loan, 5.20% due 12/1/2010 (Catholic Aa3/AA- 1,104,364
HealthInitiatives Project)
2,000,000 New Mexico Hospital Equipment Loan, 5.375% due 6/1/2018 (Memorial Baa1/NR 1,625,260
Medical CenterProject)
1,000,000 New Mexico MFA Forward Mortgage Series C, 6.50% due 7/1/2025 NR/AAA 1,034,010
1,050,000 New Mexico MFA MFHR Revenue, 5.20% due 1/1/2019 (Insured: FSA) Aaa/AAA 951,720
940,000 New Mexico MFA MFMR Series 1991-C, 6.75% due 7/1/2011 NR/AAA 941,109
(Collateralized: FNMA)
2,050,000 New Mexico MFA MFMR Series 1991-C, 6.75% due 7/1/2011 NR/AAA 2,052,419
(Collateralized: FNMA)
855,000 New Mexico MFA Series B, 6.65% due 7/1/2015 NR/AAA 863,960
1,000,000 New Mexico MFA SFMR, 5.75% due 3/1/2017 NR/AAA 965,370
1,500,000 New Mexico MFA SFMR, 0% due 9/1/2019 NR/AAA 817,860
90,000 New Mexico MFA SFMR Series 1992 A-1, 6.30% due 1/1/2002 Aaa/AAA 91,254
735,000 New Mexico MFA SFMR Series 1992 A-1, 6.90% due 7/1/2008 NR/AAA 748,296
920,000 New Mexico MFA SFMR Series 1992-1, 6.85% due 7/1/2010 Aaa/AAA 928,105
291,932 New Mexico MFA SFMR Series A, 0% due 7/1/2015 Aaa/AA 61,484
150,000 New Mexico MFA SFMR Series A-1, 6.05% due 7/1/2000 Aaa/AAA 150,329
165,000 New Mexico MFA SFMR Series A-2, 6.20% due 1/1/2001 Aaa/AAA 165,850
1,000,000 New Mexico MFA SFMR Series A-3, 5.25% due 7/1/2017 NR/AAA 922,010
545,000 New Mexico MFA SFMR Series A-3, 6.15% due 9/1/2017 NR/AAA 558,434
125,000 New Mexico MFA SFMR Series B-2, 5.80% due 1/1/2009 NR/AAA 122,888
170,000 New Mexico MFA SFMR Series H, 5.45% due 1/1/2006 (Collateralized: NR/AAA 170,367
FNMA/GNMA)
175,000 New Mexico MFA SFMR Series H, 5.45% due 7/1/2006 (Collateralized: NR/AAA 175,406
FNMA/GNMA)
100,000 New Mexico MFA SFMR Series PG-B-2, 5.80% due 7/1/2009 NR/AAA 99,144
355,000 New Mexico MFAuthority SFMR, 5.70% due 9/1/2014 NR/AAA 356,853
380,000 New Mexico State University Revenues, 5.85% due 4/1/2000 A1/AA 380,000
335,000 New Mexico State University Revenues, 5.85% due 4/1/2001 A1/AA 339,998
40,000 New Mexico Student Loan Revenue, 5.55% due 12/1/2001 A/NR 40,217
2,000,000 Puerto Rico Building Authority Revenue, 6.10% due 7/1/2000 Baa1/A 2,009,580
1,500,000 Puerto Rico Electric Power Revenue Refunding Series 1992-Q, 5.70% Baa1/BBB+ 1,505,775
due 7/1/2000
750,000 Puerto Rico Public Improvement General Obligation, 6.60% due NR/AAA 794,287
7/1/2004pre-refunded 7/1/02 @ 101.5
150,000 Rio Grande Natural Gas Association Natural Gas System Revenue, A3/BBB+ 150,225
5.00% due7/1/2000
375,000 Rio Rancho Gross Receipts Tax Revenue Series 1995-A, 5.50% due Aaa/AAA 378,229
12/1/2000(Insured: FSA)
440,000 Rio Rancho Gross Receipts Tax Revenue Series 1995-A, 5.50% due Aaa/AAA 449,913
12/1/2003(Insured: FSA)
500,000 Rio Rancho Water and Wastewater System, 8.00% due 5/15/2002 Aaa/AAA 532,295
(Insured: FSA)
1,000,000 Rio Rancho Water and Wastewater System, 6.50% due 5/15/2006 Aaa/AAA 1,077,660
(Insured: FSA)
1,000,000 San Juan County Central Consolidated School District 22, 5.625% due Aaa/AAA 1,021,830
8/15/2002(Insured: FSA)
1,000,000 San Juan Gross Receipts Gas Tax Refunding Revenue Series B, 7.00% A1/NR 1,093,690
due 9/15/2009pre-refunded 9/15/04 @ 101
115,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, Baa1/NR 122,999
7.00% due11/1/2007 pre-refunded 11/1/02
125,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, Baa1/NR 133,695
7.00% due11/1/2008 pre-refunded 11/1/02
135,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, Baa1/NR 144,391
7.00% due11/1/2009 pre-refunded 11/1/02
145,000 Sandoval County Gross Receipts Tax Refunding Revenue Series 1992, Baa1/NR 155,086
7.00% due11/1/2010 pre-refunded 11/1/02
400,000 Sandoval County Landfill Revenue, 5.70% due 7/15/2013 NR/NR 382,308
755,000 Santa Fe County, 7.00% due 7/1/2010 Aa2/NR 863,780
340,000 Santa Fe County Office and Training Facilities Project Revenue Aaa/NR 358,438
Series 1990,9.00% due 7/1/2001
356,000 Santa Fe County Office and Training Facilities Project Revenue Aaa/NR 381,198
Series 1990,9.00% due 1/1/2002
372,000 Santa Fe County Office and Training Facilities Project Revenue Aaa/NR 405,316
Series 1990,9.00% due 7/1/2002
406,000 Santa Fe County Office and Training Facilities Project Revenue Aaa/NR 456,307
Series 1990,9.00% due 7/1/2003
443,000 Santa Fe County Office and Training Facilities Project Revenue Aaa/NR 511,869
Series 1990,9.00% due 7/1/2004
626,000 Santa Fe County Office and Training Facilities Project Revenue Aaa/NR 781,968
Series 1990,9.00% due 1/1/2008
1,000,000 Santa Fe County Project Revenue Series A, 5.50% due 5/15/2015(El NR/NR 838,240
CastilloRetirement Project)
200,000 Santa Fe Educational Facilities Revenue, 5.00% due 3/1/2007 (St. NR/BBB- 189,018
Johns CollegeProject) (ETM)
210,000 Santa Fe Educational Facilities Revenue, 5.10% due 3/1/2008 (St. NR/BBB- 198,215
Johns CollegeProject) (ETM)
1,215,000 Santa Fe Educational Facilities Revenue, 5.40% due 3/1/2017 (St. NR/BBB- 1,085,870
Johns CollegeProject) (ETM)
185,000 Santa Fe Housing Development Corporation Multi Family Revenue A/NR 186,190
Refunding Series1993-A, 5.50% due 2/1/2004 (Villa Camino Consuelo
Project)
1,900,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/2002 Aaa/AAA 1,702,419
(Insured: FGIC)
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/2003 Aaa/AAA 1,653,445
(Insured: FGIC)
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/2004 Aaa/AAA 1,547,928
(Insured: FGIC)
1,895,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/2005 Aaa/AAA 1,404,934
(Insured: FGIC)
500,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/2006 Aaa/AAA 345,335
(Insured: FGIC)
1,945,000 Santa Fe Improvement Revenue Series 1992-A, 0% due 7/1/2011 Aaa/AAA 937,529
(Insured: FGIC)
2,500,000 Santa Fe Industrial Revenue Housing Refunding, 7.25% due 12/1/2005 NR/NR 2,642,650
(Ponce deLeon Project; Guaranteed: Health Care REIT)
370,000 Santa Fe Refuse Disposal Systems Improvement Net Revenue Series A3/NR 374,359
1996-B, 5.50%due 6/1/2004
325,000 Santa Fe Refuse Disposal Systems Revenue, 5.50% due 6/1/2003 A3/NR 328,923
200,000 Santa Fe Revenue, Capital Appreciation Improvement, 0% due 7/1/2009 Aaa/AAA 111,436
(Insured:FGIC)
445,000 Santa Fe SFMR, 5.25% due 11/1/2005 (Collateralized: FNMA/GNMA) Aaa/NR 446,259
240,000 Santa Fe SFMR, 5.60% due 11/1/2010 (Collateralized: FNMA/GNMA) Aaa/NR 243,053
330,000 Santa Fe SFMR, 6.10% due 11/1/2011 Aaa/NR 333,366
385,000 Santa Fe SFMR, 6.20% due 11/1/2016 (Collateralized: FNMA/GNMA) Aaa/NR 388,030
227,857 Santa Fe SFMR Series 1991, 8.45% due 12/1/2011 (Insured: FGIC) Aaa/NR 236,449
250,000 Santa Fe Solid Waste Management Agency Facility Revenue, 5.90% due NR/NR 256,522
6/1/2005
875,000 Santa Fe Solid Waste Management Facilities Revenue, 6.10% due NR/NR 908,819
6/1/2007
1,500,000 Santa Fe Utility Revenue, Refunding Series A, 8.00% due 6/1/2007 Aaa/AAA 1,761,195
(Insured:AMBAC)
195,000 Santa Rosa Consolidated School District 8 Guadalupe & San Miguel Baa3/NR 196,504
Counties GOSeries 1991, 7.00% due 8/1/2003
210,000 Santa Rosa Consolidated School District 8 Guadalupe & San Miguel Baa3/NR 211,619
Counties GOSeries 1991, 7.00% due 8/1/2004
285,000 Socorro Health Facility Refunding Revenue, 6.00% due 5/1/2008 Aaa/AAA 296,446
(EvangelicalLutheran Good Samaritan Project; Insured: AMBAC)
780,000 Taos County Local Hospital Gross Receipts Tax Revenue Series 1992, NR/AA 790,023
6.125% due12/1/2001 (Insured: Asset Guaranty)
1,000,000 U.S. Virgin Islands Public Finance Authority Revenue Refunding NR/AAA 1,038,560
Series A, 6.90%due 10/1/2001
330,000 U.S. Virgin Islands Public Finance Authority Series 1992-A, 7.00% NR/AAA 349,823
due 10/1/2002
895,000 U.S. Virgin Islands Special Tax General Obligation Series 1991, NR/NR 937,065
7.75% due10/1/2006 pre-refunded 10/01/01 @ 102 (Hugo Insurance
Claims Fund Project)
2,630,000 U.S. Virgin Islands Water & Power Authority Series A, 7.40% due NR/NR 2,747,351
7/1/2011pre-refunded 7/01/01
600,000 University New Mexico University Revenues Series A, 6.00% due A1/AA 626,322
6/1/2021
1,105,000 Villa Hermosa Multi Family Housing Revenue, 5.85% due NR/AAA 1,093,331
11/20/2016(Collateralized: GNMA)
1,385,000 Western New Mexico University System Revenue Series 1995, 7.75% due Baa2/NR 1,534,899
6/15/2019pre-refunded 6/15/04
TOTAL INVESTMENTS (Cost $144,468,825) $ 146,141,829
<FN>
See notes to financial statements.
</FN>
</TABLE>
Index Comparisons
Intermediate New Mexico Fund
Index Comparison
Compares performance of the Intermediate New Mexico Fund, the Merrill Lynch
Municipal Bond (7-12 year) Index and the Consumer Price Index, June 18, 1991 to
March 31, 2000. On March 31, 2000, 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 6.8 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 3.31.00)
One Year: (1.36)%
Five Years: 4.22%
From Inception (6/18/91): 5.52%
Class D
Average Annual Total Returns (at max. offering price) (periods ended 3.31.00)
YTD: 1.15%
From Inception (6/2/99): 0.56%
