LOOMIS SAYLES FUNDS
- ------------------------------------------------------------------------------
TO OUR SHAREHOLDERS:
Nearly all markets around the world showed exceptional returns in 1995.
This was partially a rebound from a disappointing 1994. Mostly, however, it
reflected the fact that major economies in the world were not growing fast
enough, if growing at all, to use up available liquidity. The excess liquidity
found its way into the financial markets and stocks and bonds, pretty much
around the world, did well. Concerned with the weak economies, the central
banks in the major countries did their best to be sure that the liquidity was
replenished. No matter how you slice it, it was a good year.
Nineteen ninety six is starting with the same setting that made 1995 such
a winner. Liquidity still exceeds the demand of the various economies. There
are some signs this will change later in the year but that is quite a ways
away. While bond valuations seem a bit rich contrasted with recent year
experience, they are still quite reasonable on a longer term basis. The same
is not really true of stock valuations in the United States but it is the case
elsewhere. Also, as always, the aggregate numbers hide a number of exceptional
situations. The one worry we have in 1996 is any sort of upset of a global
political nature.
TOTAL RETURN*
LOOMIS SAYLES FUNDS VS MICROPAL CATEGORY
<TABLE>
<CAPTION>
TOTAL RETURN* TOTAL RETURN** LOOMIS SAYLES RANK
12 MONTHS ENDED FROM MODIFIED INCEPTION IN MICROPAL CATEGORY
12/31/95 TO 12/31/95 FROM MODIFIED INCEPTION
------------------------- ----------------------- -----------------------
LOOMIS MICROPAL LOOMIS MICROPAL
SAYLES MEDIAN SAYLES MEDIAN RANK PERCENTILE
------ ------ ------ ------ ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Growth ....................................... 30.91 31.33 11.86 12.66 183 of 286 64th
Growth & Income .............................. 35.23 32.14 12.81 12.52 86 of 202 43th
Small Cap .................................... 32.09 29.92 18.54 15.63 23 of 98 23th
International Equity ......................... 8.73 9.72 8.64 8.92 26 of 46 57th
Bond ......................................... 31.96 18.76 15.45 9.94 1 of 21 1st
Global Bond .................................. 23.91 17.74 9.75 8.80 10 of 26 38th
U.S. Government Securities ................... 23.03 16.76 11.81 8.29 7 of 94 7th
Municipal Bond ............................... 16.50 16.84 8.44 8.22 35 of 103 34th
Short-Term Bond .............................. 10.62 10.82 5.90 5.25 10 of 61 16th
<FN>
- ----------
Note: Past performance is not predictive of future performance.
* Total return is derived from changes in principal value plus reinvested dividends and capital gains distributions.
** Periods over one year are annualized. Modified inception reflects the nearest Micropal reporting period following actual
inception. Micropal reports performance as of month end. Actual and modified inception dates occurred in May 1991 except
for the Short-Term Bond Fund which commenced operations in August 1992.
Source: Micropal, Inc.
</TABLE>
The underlying theme for the markets in recent years has been that, for
the first time in nearly sixty years, the world is not experiencing a major
hot or cold war. Thus, the enormous expenditure of maintaining standing armies
is being somewhat diminished. There are also other pressures to hold down
government spending at the national level. The combination of these two
factors means that the national governments are not soaking up liquidity that
would otherwise go to the economies and the various markets around the world.
As long as this continues, there is a relatively favorable background for the
financial markets. This more peaceful political environment has allowed for
further expansion of world trade and further progress by the developing
countries. It is just possible that we are coming into one of these wonderful
times in history when progress can continue uninterrupted for a very long
spell. That seems to be what the equity and fixed income markets have picked
up on.
Right now, it does not appear that, barring a geo-political upset, there
is much in store to seriously interrupt the reasonable market environment.
We've all been around long enough to realize that the best thing to do with a
forecast is to forget it. Hopefully, that will not be the case with this one.
While we can't predict the future we do feel comfortable that we will at least
be able to react to the present as it changes.
Enclosed, as part of this report, are individual comments from each of the
portfolio managers which make for good reading.
We thank you all for joining us as shareholders in our Funds.
Best personal regards,
/s/ Daniel J. Fuss
Daniel J. Fuss
<PAGE>
STOCK FUNDS
LOOMIS SAYLES GROWTH FUND
Average Annual Returns(%) - Period Ended December 31, 1995
Since
1 year 3 years Inception
------ ------- ---------
Loomis Sayles Growth Fund 30.91 11.30 13.26
Micropal Average Growth Fund(b) 31.02 12.77 12.79
S&P 500 Index(c) 37.44 15.26 13.62
Loomis S&P Micropal
------ ----- --------
10.70 10.00 10.00
9.90 9.50 9.50
11.50 10.10 10.20
12.50 10.90 11.10
11.50 10.60 11.00
10.90 10.80 10.70
11.30 11.20 11.00
12.90 11.70 12.00
13.30 12.20 12.30
13.60 12.30 12.40
14.40 12.60 13.00
14.10 12.90 13.10
13.60 12.40 12.70
13.10 12.50 12.30
13.60 13.10 13.00
13.60 13.10 12.80
14.50 14.30 13.80
16.20 15.70 15.00
17.80 17.00 16.00
17.80 18.00 16.70
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Growth Fund is May 16, 1991.
Since Micropal and S&P 500 performance data is not available coincident
with this date, comparative cumulative performance is charted from May 31,
1991.
(b): Source: Micropal, Inc.
(c): S&P 500 is a capital-weighted, total return index comprised of 500 widely
held common stocks, representing industrial, utility, transportation, and
financial companies listed on the New York Stock Exchange, American Stock
Exchange and Over-the-Counter market. The index returns have not been
reduced for ongoing management and operating expenses applicable to mutual
fund investments.
The Fund portfolio manager is Jerome A. Castellini.
For equity investors, 1995 was one of the most rewarding years in history.
Despite the budget impasse, a decelerating economy and higher price
volatility, the large company indices, as exemplified above by the S&P 500,
returned over 37%. We believe this reflects the underlying strength in our
financial markets and the prospects for a continuation of low interest rates
and higher savings, which should allow the rally to broaden into the faster
growth sectors. This would benefit the Growth Fund.
In 1995, companies such as Medtronic and Merck, with hot selling products,
added to our performance. Exploration prospects for Enron and Anadarko are
excellent while the technology sector is still positioned for accelerated
growth after last fall's dip. While providing the bulk of the portfolio's
performance through late last fall, these stocks fell victim to profit taking
at year-end. We believe, however, that the prospects for growth in wireless
communications (Glenayre and Airtouch) as well as the Internet (Microsoft,
Cisco and Oracle) are even more compelling today than they have been in the
past.
<PAGE>
LOOMIS SAYLES GROWTH & INCOME FUND
Average Annual Returns(%) - Period Ended December 31, 1995
Since
1 year 3 years Inception
------ ------- ---------
Loomis Sayles Growth & Income Fund 35.23 14.46 13.96
Micropal Average Growth & Income Fund(b) 31.29 12.93 12.19
S&P 500 Index(c) 37.44 15.26 13.62
Loomis S&P Micropal
------ ----- --------
10.60 10.00 10.00
10.00 9.50 9.60
10.30 10.10 10.10
10.70 10.90 10.80
11.00 10.60 10.80
11.10 10.80 10.80
11.30 11.20 11.10
12.20 11.70 11.80
12.90 12.20 12.30
12.80 12.30 12.40
13.10 12.60 12.80
13.70 12.90 12.90
13.50 12.40 12.40
13.50 12.50 12.40
14.10 13.10 12.90
13.60 13.10 12.70
15.00 14.30 13.70
16.30 15.70 14.90
17.60 17.00 15.90
18.30 18.00 16.70
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Growth & Income Fund is May 13, 1991.
Since Micropal and S&P 500 performance data is not available coincident
with this date, comparative performance is presented is charted from May
31, 1991.
(b): Source: Micropal, Inc.
(c): S&P 500 is a capital-weighted, total return index comprised of 500 widely
held common stocks, representing industrial, utility, transportation, and
financial companies listed on the New York Stock Exchange, American Stock
Exchange and Over-the-Counter market. The index returns have not been
reduced for ongoing management and operating expenses applicable to mutual
fund investments.
The Fund portfolio manager is Jeffrey W. Wardlow.
As indicated above, the Growth and Income Fund had a return of 35.2% for
1995. By comparison, the S&P 500 Index had a return of 37.5% for the year, and
the average growth and income fund had a return of 31.3%. In the stock market,
two major factors helped transform a good year into a great one. First, lower
interest rates reversed the damage done by higher rates in 1994 and drove
financial stocks up 50%. Second, the return of favorable earnings comparisons
and dissipating concern over health care reform propelled the health care
sector dramatically higher. Technology stocks, despite all the attention in
1995, ended up with returns about even with the broader market. The worst
performing sectors were consumer cyclicals and basic industry. The market also
exhibited a definite large-cap bias, with the small and mid-cap indices
lagging the S&P 500 index by a wide margin. The Fund benefitted from an
overweight in financials and some strong selections in capital goods and
consumer staples stocks.
Although still slightly underweighted, we increased our position in
technology stocks at the end of the year after the sector sold off sharply. We
have also added to the food and utility groups as we expect those stocks to do
better in a slowing economy. While still overweighted in financials, we have
started to cut back on the group due to the strong performance of the group
last year. As we look forward, 1996 seems unlikely to provide the huge returns
of last year. Interest rates may decline slightly, but not to the extent of
the decline last year. Likewise, corporate earnings are likely to advance this
year but at a slower pace than last year.
<PAGE>
LOOMIS SAYLES SMALL CAP FUND
Average Annual Returns(%) - Period Ended December 31, 1995
Since
1 year 3 years Inception
------ ------- ---------
Loomis Sayles Small Cap Fund 32.09 14.73 18.86
Micropal Average Small Company
Growth Fund(b) 31.30 14.67 15.80
Russell 2000 Index(c) 28.55 14.50 15.21
Loomis Russell Micropal
------ ------- --------
10.20 10.00 10.00
9.90 9.40 9.50
11.50 10.20 10.50
13.00 10.80 11.60
14.40 11.60 11.90
12.50 10.80 10.90
12.50 11.10 11.30
14.80 12.80 13.00
15.70 13.30 13.20
16.00 13.60 13.60
18.10 14.80 14.70
18.40 15.20 15.00
17.40 14.80 14.50
16.60 14.20 13.70
17.40 15.20 14.80
16.90 14.90 14.80
18.00 15.60 15.60
18.90 17.00 17.10
21.50 18.70 19.10
22.30 19.10 19.40
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Small Cap Fund is May 13, 1991.
Since Micropal and Russell 2000 Index performance data is not available
coincident with this date, comparative performance is presented is charted
from May 31, 1991.
(b): Source: Micropal, Inc.
(c): Russell 2000 Index is comprised of the 2,000 smallest securities in the
Russell 3000 Index (a broad market index), representing approximately 7% of
the Russell 3000 total market capitalization. The index returns have not
been reduced for ongoing management and operating expenses applicable to
mutual fund investments.
The Fund portfolio managers are Jeffrey C. Petherick and Mary C. Champagne.
On the surface, 1995 looked to be a very easy year in the market. However,
many fund managers did not manage to beat their benchmarks. We are pleased to
say that we beat the Russell 2000 in an environment that did not favor our
investment style. As indicated above, the Small Cap Fund was up 32.09% versus
28.55% for the Russell 2000. 1995 was the year for the "growth" investor, with
all of the "growth" indices substantially outperforming "value" indices.
Despite this, our small cap value discipline served us well in 1995. Our focus
on undervalued stocks possessing strong earnings visibility led us to good
solid companies with near-term catalysts that helped unlock their inherent
value. Our discipline also kept us away from the many value traps in the
market, i.e., those companies seemingly representing value yet with no near-
term catalyst to draw investor interest.
Many of our best ideas were found in the Financial Services, Health Care
and Technology areas. Our overweighting in the first two sectors helped us to
participate in their spectacular flight while our underweighting in Technology
allowed us to avoid disaster when those highfliers eventually came tumbling
back toward earth. Our underweighting in Consumer Cyclical stocks,
particularly retail stocks, also helped dramatically as many managers held
large positions in these stocks hoping for a recovery. We prefer to wait for
evidence of a recovery before making our investments and this strategy has
proven correct.
As we have done consistently, we placed as much emphasis on the sell
decisions as we did on the buy decisions. Kicking out the non-performers had
much to do with our strong performance this year. Those stocks that did not
meet our objectives as they related to our investment thesis were replaced
with better ideas. The majority of the stocks liquidated due to nonperformance
continued to disappoint as the year progressed. We know that one of the
greatest threats to a portfolio's performance in the long run is not the
difficulty of finding good investments, but in the frequent reluctance to let
go of the poor ones. Over the years this has been one of the main tenets of
our investment discipline and is one of the main reasons for our superior
investment results.
We look forward to the challenge 1996 is sure to bring. While we think it
may be a difficult first half of the year we believe that our discipline will
continue to serve us well and lead us to many good opportunities in the
market. Small stocks have now underperformed large stocks for two years, but
we believe the stage is set for small cap stocks to begin to outperform. A
moderate economy will make growth difficult for many of the large companies,
while many of the small companies that operate in niche markets will continue
to experience strong earnings growth. This should draw investors back to the
small cap arena. The Small Cap Fund is well positioned should this occur.
<PAGE>
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
Average Annual Returns(%) - Period Ended December 31, 1995
Since
1 year 3 years Inception
------ ------- ---------
Loomis Sayles International Equity Fund 8.73 13.96 8.43
Micropal Average International
Equity Fund(b) 9.48 14.48 9.18
MSCI-EAFE Index(c) 11.21 16.70 8.07
Loomis MSCI Micropal
------ ---- --------
10.00 10.00 10.00
9.50 9.30 9.50
10.40 10.10 10.20
10.40 10.20 10.30
10.80 9.00 10.00
11.20 9.20 10.50
10.50 9.40 10.00
9.80 9.00 9.80
10.80 10.05 10.70
11.00 11.10 11.20
12.10 11.80 12.30
13.60 11.90 13.60
13.60 12.40 13.40
13.40 12.90 13.50
13.60 12.90 14.00
13.40 12.80 13.40
13.70 13.00 13.00
14.80 13.20 13.60
14.80 13.70 14.30
14.50 14.30 14.60
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles International Equity Fund is May 10,
1991. Since Micropal and MSCI-EAFE Index performance data is not available
coincident with this date, comparative performance is presented from May
31, 1991.
(b): Source: Micropal, Inc.
(c): MSCI-EAFE Index is a capital-weighted average of the perfromance of over
1,000 securities listed on the stock exchanges of 20 countries in Europe,
Australia and the Far East. The index returns have not been reduced for
ongoing management and operating expenses applicable to mutual fund
investments.
The Fund portfolio manager is Frank E. Jedlicka.
Despite a decline of 1.54% during the final quarter of 1995, the Loomis
Sayles International Equity Fund net asset value per share gained 8.73% in the
year. The Fund's annualized return since its modified inception on May 31,
1991 is 8.64%. As shown above, the MSCI EAFE index's annualized return over
the same period was 8.07%.
During the year, we maintained approximately equal weightings in twelve
countries having relatively cheap price-to-earnings and price-to-book ratios,
strong earnings momentum and low rates of inflation. We believe that this
diversification lowers the risk of international investing and increases the
probability of superior returns over reasonably long periods of time.
At year end, the companies in which we were invested had an average price-
to-earnings ratio of 11.1x (vs. 26.0x for EAFE), a return-on-equity of 19.5%
(vs. 8.1%) and a dividend yield of 2.4% (vs. 2.1%). On average, their earnings
per share were expected to rise by 16.1% (IBES consensus estimates) in local
currency terms during the current year.
While the economic recovery in Europe was slowed somewhat by weakness in
Germany and problems both political and economic in France, 1996 has begun on
a firmer note and we believe that it is likely to be more rewarding than the
year just past.
<PAGE>
BOND FUNDS
LOOMIS SAYLES BOND FUND
Average Annual Returns(%) - Period Ended December 31, 1995
Since
1 year 3 years Inception
------ ------- ---------
Loomis Sayles Bond Fund 31.96 15.66 15.19
Micropal Average Medium Grade
Taxable Bond Fund(b) 18.90 8.30 10.14
Merrill Lynch Govt/Corp Index(c) 19.20 8.53 9.74
Loomis Micropal Merrill
------ -------- --------
10.00 10.00 10.00
9.80 10.00 10.00
10.50 10.60 10.60
10.90 11.20 11.10
11.20 11.00 11.00
11.80 11.50 11.40
12.30 12.00 12.00
12.40 12.00 12.00
13.40 12.60 12.50
14.10 13.00 12.90
14.70 13.50 13.30
15.20 13.30 13.30
15.00 12.80 12.90
14.50 12.60 12.80
14.80 12.70 12.80
14.60 12.70 12.80
15.70 13.30 13.50
17.30 14.10 14.40
18.10 14.40 14.60
19.20 15.10 15.30
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Bond Fund is May 16, 1991.
Since Micropal and Merrill Lynch Govt/Corp Index performance data is not
available coincident with this date, comparative performance is presented
from May 31, 1991.
(b): Source: Micropal, Inc.
(c): Merrill Lynch Index Govt/Corp is a composite of approximately 4,900 U.S.
government and corporate issues with at least $25 million outstanding,
greater than 1 year maturity and credit ratings of BBB or greater. The
index returns have not been reduced for ongoing management and operating
expenses applicable to mutual fund investments.
The Fund portfolio manager is Daniel J. Fuss.
The U.S. fixed income markets posted strong returns during 1995. The year
finished with the bond markets registering their best annual returns since
1985. Performance, as reported by Micropal Inc., was quite noteworthy. For the
fourth quarter of 1995, the Loomis Sayles Bond Fund rose 6.43% which compares
very favorably to the Merrill Lynch Government/Corporate Index's return of
4.63%. For the year, the Fund returned 31.96% compared to 19.20% for the
Index.
Much of the Fund's performance can be attributed to being long, well call
protected and having a continued emphasis in the corporate sector. While the
Fund benefited from an overall narrowing of corporate spreads, style "effects"
were not the only driver of performance. Strong individual issue selection was
evident as the Bond Fund outperformed corporate-specific indices. The Fund's
position in yield-oriented convertible bonds helped as this sector as a whole
drew support from the strong stock market. At year end, approximately 19% of
the portfolio was invested in convertible issues. The Fund's positions in
Canadian and emerging market debt, primarily in the form of Latin American
Brady issues, also helped as these sectors registered strong returns.
The Loomis Sayles Bond Fund remains well diversified. The Fund carries a
yield advantage relative to the market. Further, the Fund is extremely well
call protected, has a good degree of potential credit improvement built into
it and carries non-market related specific advantages. We are very confident
with the current structure of the portfolio. As always, we continue to pursue
various corners of inefficiency in the market; looking for neglected issues
with strengthening credit fundamentals.
<PAGE>
LOOMIS SAYLES GLOBAL BOND FUND
Average Annual Returns(%) - Period Ended December 31, 1995
Since
1 year 3 years Inception
------ ------- ---------
Loomis Sayles Global Bond Fund 23.91 9.04 9.54
Micropal Average General Global
Bond Fund(b) 16.91 8.38 8.77
Salomon Brothers World
Government Bond Index(c) 19.04 11.36 12.04
Loomis Salomon Micropal
------ ------- --------
10.00 10.00 10.00
9.60 9.90 9.80
10.50 10.70 10.60
11.70 11.60 11.30
11.10 11.20 11.00
12.00 11.90 11.60
11.80 12.70 11.90
11.80 12.20 11.60
12.40 12.80 12.20
12.40 13.20 12.20
13.20 13.80 13.10
13.50 13.80 13.40
13.00 13.80 12.80
12.20 13.90 12.60
12.20 14.10 12.70
12.30 14.10 12.70
12.00 15.70 13.50
13.10 16.50 14.10
14.20 16.30 14.30
15.30 16.80 14.80
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Global Bond Fund is May 10, 1991.
Since Micropal and Salomon Brothers World Government Bond Index performance
data is not available coincident with this date, comparative performance is
presented from May 31, 1991.
(b): Source: Micropal, Inc.
(c): Salomon Brothers World Government Bond Index is a capital-weighted index
whick tracks the performance of 14 government bond markets. The index
returns have not been reduced for ongoing management and operating expenses
applicable to mutual fund investments.
The Fund portfolio manager is E. John deBeer.
The Loomis Sayles Global Bond Fund ended the year as the #1 performing
fund in its class for the quarter and for the year.* The Fund's 23.91% return
is remarkable even in a year when the average global income fund posted a
respectable 16.91% return.
The Fund's larger holdings, including Canada and the emerging markets,
performed well during the quarter. Going forward, the U.S. should continue to
be stable to positive. On the other hand, foreign markets have lagged the U.S.
and look to offer better value. In particular, emerging markets offer high
yields and improving credit fundamentals.
Our strategy continues to emphasize searching for yield advantages while
attempting to reduce volatility. The Fund's yield is more than 2% above the
market. Bargains in emerging markets and convertible bonds will likely be
found in the upcoming stanza. Portfolio duration is driven by our
determination of where we can find opportunities for value in individual
securities.
- ----------
*The Loomis Sayles Global Bond Fund ranked 1 out of 87 mutual funds reporting
performance for one year on 12/31/95 in Micropal's General Global Bond
Category.
<PAGE>
LOOMIS SAYLES U.S. GOVERNMENT SECURITIES FUND
Average Annual Returns(%) - Period Ended December 31, 1995
Since
1 year 3 years Inception
------ ------- ---------
Loomis Sayles U.S. Government
Securities Fund 23.03 10.10 11.80
Micropal Average General U.S.
Government Bond Fund(b) 18.27 7.49 8.80
Lehman Brothers Government Bond Index(c) 18.34 8.17 9.40
Loomis MSCI Micropal
------ ---- --------
10.00 10.00 10.00
10.00 10.10 10.10
10.70 10.60 10.60
11.50 11.10 11.10
11.10 10.90 10.90
11.60 11.20 11.40
12.40 11.80 12.00
12.50 11.80 11.90
13.30 12.30 12.50
13.90 12.60 12.80
14.60 13.00 13.20
14.50 13.00 13.20
13.70 12.60 12.80
13.40 12.30 12.70
13.40 12.30 12.70
13.60 12.40 12.80
14.40 12.90 13.40
15.40 13.70 14.20
15.90 14.00 14.40
16.70 14.60 15.10
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles U.S. Government Securities Fund is May
31, 1991. Since Micropal and Lehman Brothers Government Bond Index
performance data is not available coincident with this date, comparative
performance is presented from May 31, 1991.
(b): Source: Micropal, Inc.
(c): Lehman Borthers Government Bond Index is composed of all publicly issued,
nonconvertible, domestic debt of the U.S. government or any of its
agencies, quasi-federal corporations, or corporate debt guaranteed by the
U.S. government. The index returns have not been reduced for ongoing
management and operating expenses applicable to mutual fund investments.
The Fund portfolio manager is Kent P. Newmark.
Long bond yields fell to their lowest levels in almost two years towards
the end of 1995, completing the third best bond year in history. Only 1982 and
1985 produced higher total returns. Practically everything went well for bonds
last quarter. Inflation remained in check, the economy showed increasing signs
of weakness and a balanced budget in seven years was seriously discussed by
Congress and the White House.
Many market observers are now expecting long Treasuries to hit 5 1/2% this
year, but my forecast is less sanguine. I believe the market has discounted
most, if not all, of the good news and therefore have held the portfolio's
duration at a conservative 6.0 years. The Tennessee Valley Authority issue,
trading to its 1999 call date, performed quite well during the fourth quarter
as investors found appeal in the 150 basis point excess yield to call over
Treasuries. That spread should narrow this year as the yield curve steepens.
Although the chances of double digit returns for the Fund in 1996 are not
great, we will work to outperform our competition.
<PAGE>
LOOMIS SAYLES MUNICIPAL BOND FUND
Average Annual Returns(%) - Period Ended December 31, 1995
Since
1 year 3 years Inception
------ ------- ---------
Loomis Sayles Muni Bond Fund 16.50 7.14 8.49
Micropal Average General
Municipal Fund(b) 16.86 7.15 8.20
Lehman Brothers Muni Bond Index(c) 17.48 7.75 8.61
Loomis Micropal Lehman
------ -------- ------
10.00 10.00 10.00
10.00 10.00 10.00
10.40 10.40 10.40
10.80 10.70 10.70
10.80 10.70 10.80
11.60 11.20 11.20
11.60 11.40 11.50
11.80 11.60 11.70
12.20 12.00 12.10
12.70 12.50 12.50
13.10 12.90 12.90
13.20 13.00 13.10
12.50 12.20 12.40
12.60 12.30 12.50
12.70 12.30 12.60
12.70 12.10 12.40
13.30 13.00 13.30
13.50 13.20 13.60
13.90 13.50 14.00
14.50 14.20 14.60
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Municipal Bond Fund is May 29, 1991.
Since Micropal and Lehman Brothers Municipal Bond Index performance data is
not available coincident with this date, comparative performance is
presented from May 31, 1991.
(b): Source: Micropal, Inc.
(c): Lehman Borthers Municipal Bond Index is computed from prices on
approximately 21,000 bonds consisting of roughly 30% revenue bonds, 30%
government obligations bonds, 27% insured and 13% prerefunded bonds. The
index returns have not been reduced for ongoing management and operating
expenses applicable to mutual fund investments.
The Fund portfolio manager is Martha F. Hodgman.
The municipal bond market had one of its best returns in years. The Lehman
Bros. Municipal Bond Index showed a 17.5% return for the year -- quite a
difference from last year's loss of 5.2%. After outperforming Treasuries in
the first quarter, renewed discussion of flat tax proposals caused the
municipal market to falter as investors feared that the tax advantage to
owning municipal bonds might be repealed. The trading relationship of
municipals to Treasuries changed dramatically in response to tax reform ideas
so that long municipals that had traded as rich as 79% of long Treasuries in
late April soon were trading at between 90%-93%, significantly above their 83%
average. Through the balance of the year municipals continued to trade
cheaply, fluctuating between 88% and 92% of comparable long Treasuries, as tax
and budget reform solutions were proposed.
The Loomis Sayles Municipal Bond Fund's 16.5% total return for the year
nearly equaled the average municipal fund's return of 16.9% as shown in the
above chart. As we stated in our semi-annual report, we lagged in the first
half of the year since we were somewhat more defensive (with a shorter average
maturity and duration than the market average), and were pleasantly surprised
by the market's strength. Still, we were able to take advantage of some
undervalued securities, notably the Foothills Transportation Authority bonds
that we purchased in early June. We bought these BBB rated, zero coupon bonds
with a yield of 7.28%, 50 basis points cheaper than the long Treasury bond. At
year end, these bonds were yielding 6.40%, still 40 basis points cheaper than
the long bond, but with a price appreciation of over 30%. During the fourth
quarter we continued our process of lowering our exposure to issues with very
short calls and investing in bonds with better call protection.
The ongoing budget debate and political discussions will continue to
affect the municipal market for much of the coming year. As questions about
the repeal of the corporate de minimus tax code provision, the flat tax and
the impact on state and local governments of Federal cuts are resolved there
will undoubtedly be many opportunities over the coming months to both exploit
cheaper situations and profit on richer relationships.
<PAGE>
LOOMIS SAYLES SHORT-TERM BOND FUND
Average Annual Returns(%) - Period Ended December 31, 1995
Since
1 year 3 years Inception
------ ------- ---------
Loomis Sayles Short-Term Bond Fund 10.62 6.39 5.90
Micropal Average Short-Term
Corporate Bond Fund(b) 10.60 5.53 5.24
Lehman 1-3 Year Govt Index(c) 10.84 5.50 5.29
Loomis Micropal Merrill
------ -------- --------
10.00 10.00 10.00
10.10 10.00 10.00
10.00 10.10 10.10
10.40 10.30 10.30
10.50 10.40 10.40
10.70 10.60 10.50
10.80 10.60 10.60
10.70 10.50 10.60
10.70 10.50 10.60
10.90 10.60 10.70
10.90 10.60 10.70
11.30 10.90 11.00
11.70 11.20 11.40
11.80 11.40 11.50
12.10 11.70 11.80
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Short-Term Bond Fund is August 3, 1992.
Since Micropal and Lehman 1-3 year Govt Index performance data is not
available coincident with this date, comparative performance is presented
from August 31, 1992.
(b): Source: Micropal, Inc.
(c): The Lehman Brothers 1-3 Year Govt Index includes fixed rate debt issues
rated investment grade or higher. All issues have at least one year to
three years to maturity and an outstanding par value of at least $100
million for U.S. Govt issues. The Government Bond Index includes issues of
the U.S. Govt or any agency thereof. The index returns have not been
reduced for ongoing management and operating expenses applicable to mutual
fund investments.
The Fund portfolio manager is John Hyll.
For 1995 the Lehman Brothers 1-3 Year Government Index generated a total
return of 10.84%. By comparison, the Fund's total return as exhibited in the
above chart was 10.62%.
In some respects 1995 was a difficult year as the market continued to
accelerate relentlessly before there was a chance to react. The market's
psychology turned decidedly bullish throughout the year as it became apparent
that the magnitude of interest rate increases experienced in 1994 would result
in a slowing economy during 1995. A slowing economy with benign inflationary
pressures and the lowering of interest rates by the Federal Reserve
contributed to the explosive 1995 bond market rally.
Throughout the year, we increased credit quality due to both the narrowing
of corporate spreads and to increase the Fund's market relatedness. As of
December 31, 1995 the Fund had one of its highest concentrations of government
and agency securities ever, at 59.2%. This high percentage reflects concerns
of a slowing economy going forward and the likelihood of additional Federal
Reserve easing.
<PAGE>
LOOMIS SAYLES GROWTH FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- as of December 31, 1995
COMMON STOCKS -- 98.3%
OF TOTAL NET ASSETS
Shares Value (a)
---------- -----------
BEVERAGE -- 2.6%
Coca Cola Co. .................................... 15,700 $ 1,165,725
-----------
BUSINESS SERVICES -- 3.3%
Cintas Corp. ..................................... 10.800 480,600
First Data Corp. ................................. 14,700 983,063
-----------
1,463,663
-----------
CHEMICAL -- MAJOR -- 1.0%
Air Products & Chemicals ......................... 8,600 453,650
-----------
CHEMICALS -- SPECIALTY -- 1.8%
Morton International ............................. 22,600 810,775
-----------
COMPUTER SOFTWARE & SERVICES -- 13.8%
Adobe Systems, Inc. .............................. 17,400 1,078,800
FTP Software, Inc. (c) ........................... 31,000 899,000
Informix Corp. (c) ............................... 50,100 1,503,000
Microsoft Corp. (c) .............................. 15,300 1,342,575
Oracle Systems Corp. (c) ......................... 31,200 1,322,100
-----------
6,145,475
-----------
ELECTRONIC COMPONENTS -- 5.7%
Intel Corp. ...................................... 24,100 1,367,675
LSI Logic Corp. (c)............................... 13,000 425,750
Molex Inc. ....................................... 11,750 359,844
Motorola ......................................... 7,500 427,500
-----------
2,580,769
-----------
FINANCIAL SERVICES -- 1.0%
MBNA Corp. ....................................... 12,500 460,938
-----------
FOOD -- PACKAGED & MISCELLANEOUS -- 2.8%
Starbucks Corp. (c) .............................. 60,000 1,260,000
-----------
HEALTH CARE -- DRUGS -- 13.6%
Amgen (c) ........................................ 23,100 1,371,563
Genzyme Corp. (c) ................................ 3,900 243,263
Johnson & Johnson ................................ 11,900 1,018,938
Merck & Co., Inc. ................................ 24,800 1,630,600
Oncor (c) ........................................ 185,000 832,500
Somatogen (c) .................................... 56,000 1,057,000
-----------
6,153,864
-----------
HEALTH CARE -- SERVICES -- 1.7%
HealthSouth Rehabilitation (c) ................... 26,800 780,550
-----------
HEALTH CARE -- MEDICAL TECHNOLOGY -- 4.3%
Medtronic ........................................ 23,800 1,329,825
Ventritex (c) .................................... 35,900 623,763
-----------
1,953,588
-----------
HOME PRODUCTS -- 4.9%
Duracell International ........................... 12,100 626,175
Gillette Co. ..................................... 21,400 1,115,475
Procter & Gamble ................................. 5,800 481,400
-----------
2,223,050
-----------
HOTELS & RESTAURANTS -- 1.2%
McDonalds Corp. .................................. 12,200 550,525
-----------
INSURANCE -- 5.2%
American International Group ..................... 15,650 1,447,625
Exel ............................................. 14,300 872,300
-----------
2,319,925
-----------
MEDIA & ENTERTAINMENT -- 1.3%
Viacom Inc. Class B (c) ......................... 12,499 592,140
-----------
METALS -- 1.1%
Nucor Corp. ...................................... 9,000 514,125
-----------
NATURAL GAS PIPELINES -- 2.0%
Enron Corp. ...................................... 23,300 888,313
-----------
OFFICE EQUIPMENT & SUPPLIES -- 9.2%
Cisco Systems (c) ............................... 19,200 1,432,800
Compression Labs (c) ............................. 51,400 321,250
Hewlett Packard Co. .............................. 12,700 1,063,625
Parametric Technology (c) ........................ 10,000 665,000
Silicon Graphics (c) ............................. 24,200 665,500
-----------
4,148,175
-----------
OIL -- INDEPENDENT PRODUCERS -- 9.4%
Anadarko Petroleum Corp. ......................... 32,700 1,769,888
Cross Timbers Oil Co. ............................ 24,600 433,575
Enron Oil & Gas Co. .............................. 30,000 720,000
Unit Corp. (c) ................................... 270,800 1,286,300
-----------
4,209,763
-----------
OIL -- SERVICE -- 1.7%
Rowan (c) ........................................ 79,700 787,038
-----------
RETAIL -- SPECIALTY -- 5.7%
CUC International (c) ............................ 24,150 824,119
Office Depot (c) ................................ 38,400 758,400
Petsmart (c) .................................... 31,200 967,200
-----------
2,549,719
-----------
TELECOMMUNICATIONS -- 5.0%
Airtouch Communications (c) ..................... 24,500 692,120
Glenayre Technologies, Inc. (c) .................. 8,000 498,000
Qualcomm (c) .................................... 22,500 967,500
Tellabs, Inc. (c) ................................ 2,400 88,800
-----------
2,246,420
-----------
TOTAL COMMON STOCKS
(Identified Cost $34,695,385) .............................. 44,258,190
-----------
<PAGE>
LOOMIS SAYLES GROWTH FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- (Continued)
SHORT-TERM INVESTMENT -- 3.1%
Face
Amount Value (a)
---------- -----------
Repurchase Agreement with State Street Bank and
Trust Company dated 12/29/95 at 5.00% to be
repurchased at $1,385,769 on 1/2/96 collateralized
by $1,315,000 U.S. Treasury Note 7.125% due
9/30/99, with a value of $1,416,734 ............ $1,385,000 $ 1,385,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $1,385,000) ............................... 1,385,000
-----------
TOTAL INVESTMENTS -- 101.4%
(Identified Cost $36,080,385) ................................ 45,643,190
Cash, Receivables and Other Assets ............................. 124,492
Liabilities .................................................... (756,910)
-----------
TOTAL NET ASSETS -- 100% ....................................... $45,010,772
===========
(a) See Note 1A.
(b) Federal Tax Information:
At December 31, 1995 the net unrealized appreciation on investments based
on cost of $36,086,880 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost ......... $11,174,670
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value ......... (1,618,360)
-----------
Net unrealized appreciation ................................ $ 9,556,310
===========
(c) Non-income producing security.
See accompanying notes to financial statements.
LOOMIS SAYLES GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- as of December 31, 1995
COMMON STOCKS -- 97.0%
OF TOTAL NET ASSETS
Shares Value (a)
---------- -----------
AEROSPACE -- 4.5%
Northrop Grumman Corp. ........................... 13,000 $ 832,000
Raytheon Corp. ................................... 17,000 803,250
-----------
1,635,250
-----------
BANKS/SAVINGS & LOANS -- 6.2%
Chase Manhattan Corp. ........................... 16,000 970,000
Standard Federal Bank of Troy,
Michigan ....................................... 32,700 1,287,562
-----------
2,257,562
-----------
BEVERAGE -- 1.2%
PepsiCo .......................................... 8,000 447,000
-----------
CHEMICAL -- MAJOR -- 5.7%
Dupont ........................................... 10,000 698,750
Geon Co. ......................................... 19,000 463,125
Praxair .......................................... 18,000 605,250
W.R. Grace ....................................... 5,800 342,925
-----------
2,110,050
-----------
ELECTRICAL EQUIPMENT -- 2.0%
General Electric Co. ............................. 10,000 720,000
-----------
ELECTRONIC COMPONENTS -- 1.8%
Texas Instruments ................................ 12,500 646,875
-----------
ENVIRONMENTAL SERVICES -- 2.7%
WMX Technologies ................................. 30,200 902,225
Wheelabrator Technologies ........................ 4,800 80,400
-----------
982,625
-----------
FINANCIAL SERVICES -- 7.6%
Beneficial Corp. ................................. 14,200 662,075
Countrywide Credit Industries .................... 28,000 609,000
Finova Group ..................................... 23,000 1,109,750
PaineWebber Group, Inc. .......................... 18,800 376,000
-----------
2,756,825
-----------
FOOD -- PKGD. & MISC. -- 2.2%
Hershey Foods Corp. .............................. 3,300 214,500
Sara Lee ......................................... 18,000 573,750
-----------
788,250
-----------
HEALTH CARE -- DRUGS -- 4.4%
Bristol Myers Squibb ............................. 6,400 549,600
Eli Lilly ........................................ 7,200 405,000
Schering-Plough .................................. 12,200 667,950
-----------
1,622,550
-----------
HEALTH CARE -- MEDICAL TECHNOLOGY -- 1.8%
C.R. Bard ........................................ 20,000 645,000
-----------
<PAGE>
LOOMIS SAYLES GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- (Continued)
COMMON STOCKS -- (Continued)
Shares Value (a)
---------- -----------
HEALTH CARE -- SERVICES -- 3.4%
Tenet Healthcare REITS (c) ....................... 60,240 $ 1,249,980
-----------
HOME PRODUCTS -- 2.4%
Premark International ............................ 17,500 885,938
-----------
HOUSING & BUILDING MATERIALS -- 2.4%
Armstrong World Industries Inc. .................. 14,000 868,000
-----------
INSURANCE -- 4.4%
ACE Limited ...................................... 16,000 636,000
Allstate Corp. ................................... 13,759 565,839
First Colony Corp. ............................... 16,000 406,000
-----------
1,607,839
-----------
MULTI-INDUSTRY -- 7.2%
Dial Corp. ....................................... 20,000 592,500
Eaton Corp. ...................................... 13,500 723,937
Philips Electronics ADR (d) ...................... 21,500 771,313
Textron Inc. ..................................... 8,000 540,000
-----------
2,627,750
-----------
NATURAL GAS -- PIPELINES -- 2.8%
El Paso Natural Gas Co. .......................... 16,000 454,000
Mapco ............................................ 10,500 573,563
-----------
1,027,563
-----------
OFFICE EQUIPMENT -- 4.7%
AST Research (c) ................................. 19,918 169,302
Hewlett Packard .................................. 1,000 83,750
Harris Corp. ..................................... 13,100 715,588
Xerox Corp. ...................................... 5,500 753,500
-----------
1,722,140
-----------
OIL -- INDEPENDENT PRODUCERS -- 2.6%
Union Texas Petroleum Holdings ................... 27,000 523,125
Vastar Resources ................................. 13,000 412,750
-----------
935,875
-----------
OIL -- MAJOR INTEGRATED -- 4.5%
Atlantic Richfield Co. ........................... 8,000 886,000
Repsol ADR (d) ................................... 23,000 756,125
-----------
1,642,125
-----------
REAL ESTATE -- 4.3%
Health Care Property Investments ................. 27,000 948,374
Meditrust SBI REITS .............................. 17,000 592,875
-----------
1,541,249
-----------
RETAIL -- GENERAL MERCHANDISE -- 4.3%
Federated Dept. Stores (c) ....................... 28,000 770,000
Sears, Roebuck & Co. ............................. 20,000 780,000
-----------
1,550,000
-----------
RETAIL -- FOOD & DRUG -- 1.1%
Mckesson Corp. New ............................... 7,600 384,750
-----------
TEXTILES & APPAREL -- 0.4%
Warnaco Group (c) ................................ 5,800 $ 145,000
-----------
TOBACCO -- 2.1%
Loews Corp. ...................................... 10,000 783,750
-----------
UTILITIES -- ELECTRIC -- 5.2%
Eastern Utilities Associates ..................... 25,000 590,625
Pacific Gas & Electric Co. ....................... 24,000 681,000
Texas Utilities .................................. 15,300 629,213
-----------
1,900,838
-----------
UTILITIES -- TELECOMMUNICATIONS -- 5.1%
Ameritech Corp. .................................. 14,300 843,700
Bellsouth Corp. .................................. 24,000 1,044,000
-----------
1,887,700
-----------
TOTAL COMMON STOCKS
(Identified Cost $29,383,611) .............................. 35,372,484
-----------
SHORT-TERM INVESTMENT -- 4.4%
Face
Amount
----------
Associates Corp. of North America
5.95%, 1/2/96 .................................. $1,609,170 1,609,170
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $1,609,170 ................................ 1,609,170
-----------
TOTAL INVESTMENTS -- 101.4%
(Identified Cost $30,992,781) ................................ 36,981,654
Receivables and Other Assets ................................... 332,635
Liabilities .................................................... (848,993)
-----------
TOTAL NET ASSETS -- 100% ....................................... $36,465,296
===========
(a) See Note 1A.
(b) Federal tax information.
At December 31, 1995, the net unrealized appreciation on investments based
on cost of $30,992,781 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost ......... $ 6,516,434
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value ......... (527,561)
-----------
Net unrealized appreciation ................................ $ 5,988,873
===========
(c) Non-income producing security.
(d) An American Depository Receipt (ADR) is a certificate issued by a U.S.
bank representing the right to receive securities of the foreign issuer
described. The values of ADRs are significantly influenced by trading on
exchanges not located in the United States or Canada.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES SMALL CAP FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- as of December 31, 1995
COMMON STOCKS -- 88.2%
OF TOTAL NET ASSETS
Shares Value (a)
----------- -----------
AEROSPACE -- 1.3%
Whittaker Corp. (c) ............................. 54,400 $ 1,183,200
-----------
AUTO & RELATED -- 2.1%
Masland Corp..................................... 66,400 929,600
Strattec Security Corp. (c) ..................... 26,300 466,825
Tower Automotive Inc. (c) ....................... 1,900 33,250
Walbro Corp. .................................... 24,400 439,200
-----------
1,868,875
-----------
BUSINESS SERVICES -- 2.8%
Brady, W.H. ..................................... 24,000 648,000
Career Horizons Inc. (c) ........................ 27,700 934,875
CDI Corp. (c) ................................... 35,600 640,800
Cort Business Services (c) ...................... 20,100 331,650
-----------
2,555,325
-----------
CHEMICALS -- SPECIALTY -- 3.4%
Cambrex Corp. ................................... 20,100 831,638
Cytec Industries (c) ............................ 14,100 879,488
Intertape Polymer Group ......................... 26,400 828,300
LeaRonal ........................................ 22,300 512,900
-----------
3,052,326
-----------
COMPUTER SOFTWARE & SERVICES -- 2.6%
Analysts International Corp. .................... 17,500 525,000
Control Data Systems (c) ........................ 27,500 539,688
MDL Information Systems Inc. (c) ................ 24,700 568,100
SPSS Inc. (c) ................................... 13,600 265,200
Sterling Software (c) ........................... 7,600 474,050
-----------
2,372,038
-----------
ELECTRONIC COMPONENTS -- 3.5%
Amphenol Corp. (c) .............................. 20,500 497,125
Burr Brown Corp. (c) ............................ 12,400 316,200
Dallas Semiconductor Corp. (c) .................. 2,100 43,575
Dynatech Corp. (c) .............................. 64,000 1,088,000
Unitrode Corp. (c) .............................. 24,600 694,950
Zilog (c) ....................................... 17,300 633,612
-----------
3,273,462
-----------
ELECTRICAL EQUIPMENT -- 1.6%
Gasonics International Corp. (c) ................ 30,500 411,750
Numerex Corp. (c) ............................... 87,300 567,459
Woodhead Industries ............................. 34,800 495,900
-----------
1,475,109
-----------
ENVIRONMENTAL SERVICES -- 2.1%
United Waste Systems (c) ........................ 22,400 834,400
World Fuel Services Corp. ....................... 67,050 1,064,419
-----------
1,898,819
-----------
FINANCIAL SERVICES -- 3.9%
Cityscape Financial Corp. ....................... 19,500 404,625
DVI Inc. (c) .................................... 55,000 770,000
Eaton Vance Corp. ............................... 21,400 604,550
Imperial Credit Industries (c) .................. 33,350 725,363
Investors Financial Services Co. (c) ............ 1,527 31,685
WFS Financial Inc. (c) .......................... 50,800 990,600
-----------
3,526,823
-----------
FOOD -- PACKAGED & MISCELLANEOUS -- 0.8%
Universal Foods Corp. ........................... 17,400 698,175
-----------
FREIGHT TRANSPORTATION -- 3.1%
ABC Rail Products Corp. (c)...................... 31,700 701,363
Harper Group .................................... 63,100 1,120,025
TNT Freightways Corp. ........................... 49,000 986,125
-----------
2,807,513
-----------
HEALTH CARE -- MEDICAL TECHNOLOGY -- 4.1%
Conmed Corp. (c)................................. 36,750 918,750
Gelman Sciences (c) ............................. 45,950 1,160,238
Lunar Corp. (c) ................................. 7,150 196,625
Sofamor Danek Group (c) ......................... 49,800 1,413,075
-----------
3,688,688
-----------
HEALTH CARE -- SERVICES -- 6.4%
Community Health Care Systems (c) ............... 36,100 1,286,063
Grancare Inc. (c) ............................... 62,212 902,074
Healthplan Services Corp. (c) ................... 19,400 485,000
Health Images ................................... 65,000 471,250
Medisense (c) ................................... 30,300 958,238
Regency Health Services (c) ..................... 84,770 858,295
Sierra Health Services (c) ...................... 26,800 850,900
-----------
5,811,820
-----------
HOME PRODUCTS -- 3.5%
Aptargroup ...................................... 16,900 631,637
Bush Boake Allen (c) ............................ 21,200 580,350
Inbrand Corp. (c) ............................... 64,850 1,070,025
U.S. Can Corp. (c) .............................. 66,300 895,050
-----------
3,177,062
-----------
HOTELS & RESTAURANTS -- 0.5%
Supertel Hospitality (c) ........................ 43,800 438,000
-----------
HOUSING & BUILDING MATERIALS -- 4.1%
Congoleum Corp. ................................. 76,000 817,000
Crossman Communities (c) ........................ 38,800 727,500
Giant Cement HLD (c) ............................ 76,200 876,300
Toro Co. ........................................ 39,100 1,285,413
-----------
3,706,213
-----------
INSURANCE -- 7.0%
Allied Group .................................... 34,500 1,242,000
Amerin Corp. (c) ................................ 16,600 444,050
Capital Re Corp. ................................ 37,700 1,159,275
Meadowbrook Insurance Group (c) ................. 13,400 448,900
<PAGE>
LOOMIS SAYLES SMALL CAP FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- (Continued)
COMMON STOCKS -- (Continued)
Shares Value (a)
----------- -----------
INSURANCE -- (CONTINUED)
Protective Life Corp. ........................... 34,400 $ 1,075,000
Reinsurance Group of America .................... 37,500 1,373,437
Triad Guaranty (c) .............................. 22,800 604,200
-----------
6,346,862
-----------
LEISURE -- 1.0%
Harman International ............................ 23,235 932,304
-----------
MACHINERY -- 3.7%
Greenfield Industries ........................... 27,000 843,750
Hardinge Inc. ................................... 28,300 735,800
Keystone International Inc. ..................... 50,200 1,004,000
Wolverine Tube (c) .............................. 20,900 783,750
-----------
3,367,300
-----------
MEDIA & ENTERTAINMENT -- 2.3%
Banta Corp. ..................................... 24,725 1,087,900
Houghton Mifflin ................................ 21,500 967,500
-----------
2,055,400
-----------
METALS -- 3.7%
Citation Corp. (c)............................... 59,050 708,600
Cleveland - Cliffs .............................. 20,500 840,500
Quanex Corp. .................................... 27,800 538,625
Republic Engineered Steels (c) .................. 72,300 334,388
UNR Industries .................................. 111,400 960,825
-----------
3,382,938
-----------
MULTI-INDUSTRY -- 1.6%
Griffon Corp. (c)................................ 110,450 994,050
Insilco Corp. (c) ............................... 14,200 452,624
-----------
1,446,674
-----------
OIL -- INDEPENDENT PRODUCERS -- 4.1%
Belden & Blake Corp. (c) ........................ 59,525 1,041,688
Cross Timbers Oil Co. ........................... 46,000 810,750
Lomak Petroleum (c) ............................. 61,300 597,675
Vintage Petroleum (c) ........................... 57,200 1,287,000
-----------
3,737,113
-----------
OIL -- SERVICE -- 2.8%
Global Industries (c) ........................... 10,100 303,000
Pride Petroleum Services Inc. (c) ............... 71,400 758,625
Seitel Inc. (c) ................................. 39,400 1,393,775
-----------
2,455,400
-----------
PAPER -- 1.1%
Carausatar Industries ........................... 47,800 956,000
-----------
REAL ESTATE -- 6.2%
Capstone Capital Corp. REITS (c) ................ 59,300 1,134,111
Chateau Properties REITS ........................ 57,500 1,293,750
HGI Realty Inc. REITS ........................... 39,500 903,563
Liberty Property REITS .......................... 54,600 1,132,950
Patriot American Hospitality REITS (c) .......... 42,900 1,104,666
-----------
5,569,040
-----------
RETAIL -- GENERAL MERCHANDISE -- 0.1%
Claires Stores .................................. 5,600 98,700
-----------
RETAIL -- SPECIALTY -- 3.7%
Borders Group (c) ............................... 25,100 $ 464,350
Cato Corp. Class A (c) .......................... 86,575 670,955
Cole National Corp. (c) ......................... 71,000 985,125
Haverty Furniture Companies ..................... 45,100 625,763
Officemax (c) ................................... 25,000 559,375
-----------
3,305,568
-----------
SAVINGS & LOAN/BANKS -- 3.4%
Charter One Financial Inc. ...................... 33,700 1,032,063
Commercial Federal Corp. (c) .................... 21,100 796,525
First Financial Corp. ........................... 34,850 801,550
First Savings Bank of Washington (c) ............ 34,000 446,250
-----------
3,076,388
-----------
TEXTILE & APPAREL -- 1.2%
Jones Apparel Group (c).......................... 27,500 1,082,812
-----------
TELECOMMUNICATIONS -- 0.5%
Davel Communications Group (c) .................. 30,600 413,100
-----------
TOTAL COMMON STOCKS
(Identified Cost $69,749,658) .............................. 79,759,047
-----------
SHORT-TERM INVESTMENT -- 11.0%
Face
Amount
-----------
Repurchase Agreement with State Street Bank and
Trust Company dated 12/29/95 at 5.00% to be
repurchased at $9,925,000 on 1/2/96
collateralized by $9,400,000 U.S. Treasury
Note 7.125% due 9/30/99, with a value
of $10,127,222 ................................ $9,925,000 9,925,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $9,925,000) ............................... 9,925,000
-----------
TOTAL INVESTMENTS -- 99.2%
(Identified Cost $79,674,658) (b) ............................ 89,684,047
Cash Receivables and Other Assets .............................. 2,656,705
Liabilities .................................................... (1,885,817)
-----------
TOTAL NET ASSETS -- 100% ....................................... $90,454,935
===========
(a) See Note 1A.
(b) Federal Tax Information:
At December 31, 1995 the net unrealized appreciation on investments based
on cost of $79,876,857 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost ......... $12,310,156
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value ......... (2,502,966)
-----------
Net unrealized appreciation ................................ $ 9,807,190
===========
(c) Non-income producing security.
See accompanying notes to financial statements.
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- as of December 31, 1995
COMMON STOCKS -- 98.1%
OF TOTAL NET ASSETS
Shares (a) Value (b)
----------- -----------
BELGIUM -- 9.0%
Barco ........................................... 6,000 $ 709,181
Bekaert ......................................... 800 657,026
CBR ............................................. 1,700 686,575
CFE ............................................. 2,500 602,838
Colruyt ......................................... 2,900 794,561
Fortis AG ....................................... 6,700 811,207
GIB ............................................. 18,000 787,618
General de Banque ............................... 2,100 725,438
Tessenderlo Chemie .............................. 1,900 675,653
UCB ............................................. 550 728,316
-----------
7,178,413
-----------
BRAZIL -- 8.0%
Belgo Mineira ................................... 6,130,000 343,709
Bradesco ........................................ 65,000,000 568,416
Bradesco Rights ................................. 1,519,831 2,439
Brahma .......................................... 500,000 617,299
Cimento Itau .................................... 1,980,000 472,593
Coteminas ....................................... 1,700,000 568,416
Itaubanco ....................................... 2,000,000 557,613
Klabin .......................................... 500,000 452,675
Manah ........................................... 23,300,000 407,510
Metal Leve ...................................... 16,800,000 190,123
Pirelli Tire .................................... 447,000 630,031
Sadia Concordia ................................. 850,000 629,630
Usiminas ........................................ 600,000,000 487,654
Weg ............................................. 1,131,000 465,432
-----------
6,393,540
-----------
CANADA -- 7.8%
CAE ............................................. 75,000 556,400
Cominco ......................................... 36,000 725,381
Donohue ......................................... 45,000 523,428
Extendicare ..................................... 55,000 584,335
Loblaw Cos. ..................................... 25,000 570,138
Magna International ............................. 12,500 538,083
Noranda ......................................... 35,000 718,054
Pancanadian Petroleum ........................... 18,700 719,336
Royal Bank ...................................... 25,000 570,138
Suncor .......................................... 23,000 720,435
-----------
6,225,728
-----------
FINLAND -- 8.0%
Cultor .......................................... 18,000 743,529
Kemira .......................................... 80,000 670,094
Kesko ........................................... 45,000 558,679
Metra ........................................... 14,000 578,300
Metsa-Seria ..................................... 15,000 461,263
Orion ........................................... 28,000 783,918
Rauma ........................................... 32,000 627,869
Rautaruukki ..................................... 90,000 547,320
Stockmann ....................................... 15,000 781,393
Valmet .......................................... 24,000 594,823
-----------
6,347,188
-----------
FRANCE -- 8.6%
Air liquide ..................................... 3,700 611,576
Cep Communication ............................... 5,280 436,906
Cep Communication Warrants ...................... 5,280 17,164
Cetelem ......................................... 3,700 693,019
Docks De France ................................. 4,000 606,542
Ecco TT ......................................... 8,500 492,867
Ecia ............................................ 6,200 654,560
Guyenne & Gascogne .............................. 2,100 571,385
Michelin ........................................ 13,000 517,456
Primagaz ........................................ 10,725 850,306
Synthelabo ...................................... 10,500 656,558
Zodiac .......................................... 4,600 716,274
-----------
6,824,613
-----------
GERMANY -- 7.9%
BMW ............................................. 1,400 716,324
Commerzbank ..................................... 2,700 637,174
Degussa ......................................... 1,900 632,231
Duerr ........................................... 1,800 538,810
Gehe ............................................ 1,300 660,633
Kiekert ......................................... 10,000 593,108
Mannesmann ...................................... 1,900 604,058
Preussag ........................................ 2,000 558,301
Siemens ......................................... 1,200 655,761
Veba ............................................ 16,000 678,315
-----------
6,274,715
-----------
NETHERLANDS -- 8.4%
Aegon ........................................... 17,750 783,738
Ahrend .......................................... 18,000 591,045
Hunter Douglas .................................. 13,000 601,493
IHC Caland ...................................... 24,000 805,970
Internatio-Muller ............................... 9,500 655,193
KBB ............................................. 10,037 661,643
NBM Amstelland .................................. 45,000 682,836
Philips ......................................... 16,000 577,114
Royal Dutch Petroleum ........................... 4,000 557,711
Stork ........................................... 30,000 742,537
-----------
6,659,280
-----------
NEW ZEALAND -- 8.0%
Air New Zealand ................................. 200,000 679,428
Carter Holt Harvey .............................. 370,000 797,674
Fisher and Paykel ............................... 190,000 577,187
Fletcher Challenge .............................. 240,000 553,472
Hallenstein Glasson ............................. 360,000 714,967
Nuplex .......................................... 200,000 638,923
Ports of Auckland ............................... 180,000 582,087
Sanford ......................................... 310,000 613,641
Sanford Rights .................................. 31,000 0
<PAGE>
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- (Continued)
COMMON STOCKS -- (Continued)
Shares (a) Value (b)
----------- -----------
NEW ZEALAND -- CONTINUED
Telecom Corp. of New Zealand .................... 152,000 $ 655,386
Wrightston ...................................... 650,000 492,591
-----------
6,305,356
-----------
NORWAY -- 7.9%
Braathens ....................................... 12,500 646,627
Elkem ........................................... 45,000 507,444
Elkjop .......................................... 27,000 668,549
Hafslund Nycomed ................................ 20,000 506,261
Helikopter ...................................... 45,000 546,478
Kvaerner ........................................ 12,500 441,599
Norsk Hydro ..................................... 13,500 566,350
Rieber & Son .................................... 30,000 615,084
Schibsted ....................................... 45,000 610,352
Storli .......................................... 32,000 474,403
Uni Storebrand .................................. 130,000 717,598
-----------
6,300,745
-----------
SINGAPORE -- 8.0%
City Developments ............................... 70,000 509,793
Courts .......................................... 390,000 595,630
DBS Land ........................................ 220,000 743,548
Fraser & Neave .................................. 45,000 572,721
Keppel Corp. .................................... 60,000 534,540
Overseas-Chinese Banking ........................ 60,000 750,902
Pacific Carriers ................................ 750,000 646,963
Robinson ........................................ 135,000 563,176
United Overseas Bank ............................ 66,000 634,660
Wing Tai Holdings ............................... 380,000 776,497
-----------
6,328,430
-----------
SPAIN -- 8.2%
Acerinox ........................................ 5,000 504,088
Azkoyen ......................................... 8,500 477,014
BCO Popular ..................................... 4,000 735,220
Cubiertas ....................................... 9,500 524,547
FCC ............................................. 6,000 458,486
Gas Natural ..................................... 3,600 559,057
Prosegur ........................................ 30,000 741,958
Repsol .......................................... 20,000 653,219
Sevillana ....................................... 85,000 657,902
Vidrala ......................................... 12,500 491,455
Zardoya Otis .................................... 6,500 707,654
-----------
6,510,600
-----------
SWEDEN -- 8.3%
Aga ............................................. 50,000 689,131
Assidomain ...................................... 30,000 650,720
Atlas Copco ..................................... 42,000 645,297
Avesta Sheffield ................................ 60,000 528,710
Bergman & Beving ................................ 22,000 619,690
Kalmar .......................................... 44,000 729,047
Sandvik ......................................... 35,000 612,159
SKF ............................................. 32,000 $ 614,192
Svedala ......................................... 23,000 592,426
Svenska Handelsbanken ........................... 43,000 893,836
-----------
6,575,208
-----------
TOTAL COMMON STOCKS
(Identified Cost $76,265,032) .............................. 77,923,816
-----------
SHORT-TERM INVESTMENTS -- 0.9%
Face
Amount
-----------
Repurchase Agreement with State Street Bank and
Trust Company dated 12/29/95 at 5.00% to be
repurchased at $734,408 on 1/02/96
collateralized by $515,515 U.S. Treasury Bond
9.875%, due 11/15/15 with a value of $749,191 $734,000 734,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $734,000) ................................. 734,000
-----------
TOTAL INVESTMENTS -- 99.0%
(Identified Cost $76,999,032) (b) ............................ 78,657,816
Cash, Receivables and Other Assets (c) ......................... 2,778,283
Liabilities .................................................... (1,947,889)
-----------
TOTAL NET ASSETS -- 100% ....................................... $79,488,210
===========
(a) Ordinary shares unless noted otherwise.
(b) See Notes 1A and 1B.
(c) Including foreign currencies with a value of $492,875 and a cost of
$493,599.
(d) Federal Tax Information:
At December 31, 1995 the net unrealized appreciation on investments based
on cost for federal income tax purposes of $77,033,971 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost ......... $ 7,886,146
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value ......... (6,262,301)
-----------
Net unrealized appreciation ................................ $ 1,623,845
===========
Ten Largest industry holdings at December 31, 1995 (unaudited).
Machinery ......................................................... 8.2%
Banking ........................................................... 7.8
Transport-Equipment ............................................... 6.3
Construction ...................................................... 5.2
Retail ............................................................ 5.0
Transportation .................................................... 4.8
Pharmaceuticals ................................................... 4.3
Oil/Gas ........................................................... 4.1
Food .............................................................. 3.8
Steel ............................................................. 3.7
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- as of December 31, 1995
BONDS AND NOTES -- 89.6%
OF TOTAL NET ASSETS
Face
Amount Value (a)
----------- ------------
NON-CONVERTIBLE BONDS -- 71.6%
AEROSPACE -- 0.8%
Rohr Industries, 9.250%, 3/01/17 $ 2,300,000 $ 2,116,000
------------
AIR TRANSPORT -- 3.6%
AMR Corp. Delaware,
9.000%, 8/01/12 .............................. 2,250,000 2,537,483
AMR Corp. Delaware,
8.625%, 3/01/17 .............................. 450,000 485,739
NWA Trust, 9.360%, 9/10/07 ..................... 851,600 900,567
United Airlines,
9.125%, 01/15/12 ............................. 2,500,000 2,793,750
United Airlines,
9.560%, 10/19/18 ............................. 2,100,000 2,445,030
------------
9,162,569
------------
HOME BUILDERS -- 1.4%
Hovnanian Enterprises,
9.750%, 6/01/05-99 ........................... 1,350,000 1,161,000
Hovnanian Enterprises,
11.250%, 4/15/02-99 .......................... 1,000,000 910,000
Pulte Corp. 7.300%, 10/24/05 ................... 1,000,000 1,027,700
Webb, 9.000%, 2/15/06-99 ....................... 500,000 475,000
------------
3,573,700
------------
BROADCASTING -- 0.3%
CBS Inc., 7.125%, 11/01/23 .................... 1,000,000 863,630
------------
CANADIAN -- 16.7%
Canadian Government,
8.000%, 6/01/23 .............................. 12,650,000 9,718,014
Hydro Quebec, Zero Coupon,
8/15/20 ...................................... 25,000,000 2,260,404
Province of British Columbia,
Zero Coupon, 8/23/13 ......................... 10,000,000 1,810,522
Province of British Columbia,
Zero Coupon, 6/09/14 ......................... 10,000,000 1,700,611
Province of British Columbia,
Zero Coupon, 8/23/24 ......................... 10,000,000 772,274
Ontario Hydro, 8.900%, 8/18/22 ................. 9,340,000 7,544,952
Province of Ontario,
Zero Coupon, 7/13/22 ......................... 13,000,000 1,143,025
Province of Quebec,
9.375%, 1/16/23 .............................. 11,655,000 9,463,069
Rogers Cablesystems,
9.650%, 1/15/14 .............................. 3,400,000 2,173,579
Province of Manitoba,
7.750%, 12/22/25 ............................. 3,000,000 2,155,481
Province of Saskatchewan,
8.750%, 5/30/25 .............................. 4,835,000 3,843,414
------------
42,585,345
------------
COMPUTER HARDWARE -- 1.1%
Data General Corp.,
8.375%, 9/15/02 .............................. $ 350,000 $ 343,725
Unisys Corp., 9.750%, 9/15/16 .................. 2,000,000 1,680,000
Unisys Corp., 8.875%, 7/15/97 .................. 1,000,000 885,000
------------
2,908,725
------------
ELECTRICAL EQUIPMENT -- 2.1%
Westinghouse Electric Corp.,
8.625%, 8/01/12 .............................. 950,000 969,019
Westinghouse Electric Corp.,
7.875%, 9/01/23 .............................. 4,850,000 4,529,270
------------
5,498,289
------------
ENTERTAINMENT -- 2.0%
Time Warner Entertainment Co.,
8.750%, 4/01/17 .............................. 1,500,000 1,614,090
Time Warner Entertainment Co.,
8.375%, 3/15/23 .............................. 3,200,000 3,444,832
------------
5,058,922
------------
ENVIRONMENTAL SERVICES -- 0.6%
Envirotest System Corp.,
9.625%, 4/01/03 .............................. 2,500,000 1,650,000
------------
FOOD & BEVERAGE -- 5.2%
Borden, 7.875%, 02/15/23 ....................... 1,000,000 934,240
Chiquita Brands, 9.125%, 3/01/04 ............... 350,000 346,500
RJR Nabisco, 7.625%, 9/15/03 ................... 7,500,000 7,350,075
RJR Nabisco, 9.250%, 8/15/13 ................... 4,445,000 4,582,173
------------
13,212,988
------------
FOREIGN CURRENCY -- 7.7%
New Zealand Government,
8.000%, 4/15/04 .............................. 2,475,000 1,694,200
New Zealand Government,
8.000%, 11/15/06 ............................. 14,395,000 9,955,891
Mexican Cetes, Zero Coupon,
7/18/96 ...................................... 5,300,000 550,911
Mexican Cetes, Zero Coupon,
10/03/96 ..................................... 10,898,960 1,049,695
Republic of Ireland,
6.250%, 10/18/04 ............................. 75,000 110,834
Republic of Ireland,
8.250%, 8/18/15 .............................. 3,700,000 6,283,967
------------
19,645,498
------------
FOREIGN ISSUER -- 11.1%
BCO Central Costa,
6.250%, 5/21/10 .............................. 1,000,000 610,000
Empresas ICA Sociedad,
5.000%, 3/15/04 .............................. 250,000 130,000
Republic of Argentina,
1.000%, 3/31/23 .............................. 15,800,000 9,025,750
500,000 282,500
2,653,020 1,512,221
LOOMIS SAYLES BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- (Continued)
BONDS AND NOTES -- (Continued)
Face
Amount Value (a)
----------- ------------
FOREIGN ISSUER -- CONTINUED
Republic of Brazil, 4/15/24 .................... $19,150,000 $ 10,125,563
Republic of Ecuador,
1.000%, 2/28/25 .............................. 6,000,000 2,167,500
Republic of Ecuador,
6.812%, 2/28/15 .............................. 2,042,972 681,842
Mexico (United Mexican State),
CL B, 6.250%, 12/31/19 ....................... 2,000,000 1,310,000
Mexico (United Mexican State),
CL A, 6.250%, 12/31/19 ....................... 1,000,000 655,000
Poland PDI Brady,
3.750%, 10/24/14 ............................. 1,500,000 973,125
Poland PDI Brady,
3.750%, 10/24/14 ............................. 500,000 324,375
Transportation Maritima Mexico,
9.250%, 5/15/03 .............................. 550,000 492,250
------------
28,290,126
------------
GOVERNMENT -- 5.0%
United States Treasury Bond,
6.250%, 8/15/23 .............................. 7,400,000 7,613,934
United States Treasury Strips,
Zero Coupon Bonds, 8/15/23 ................... 19,000,000 3,604,300
United States Treasury Bond,
6.875%, 8/15/25 .............................. 1,500,000 1,691,715
------------
12,909,949
------------
METAL -- 0.4%
Midland Ross Corp.,
6.000%, 2/15/07 .............................. 1,400,000 896,000
------------
OIL -- 2.5%
Forest Oil, 11.250%, 9/01/03 ................... 500,000 475,000
Maxus Energy, 8.500%, 4/01/08 .................. 1,000,000 910,000
Mobile Energy Services Co.,
8.665%, 1/01/17 .............................. 1,250,000 1,358,125
Sage Energy, 8.500%, 10/15/05 .................. 98,000 84,035
USX Marathon Group,
8.500%, 3/01/23 .............................. 450,000 482,693
USX Marathon Group,
8.125%, 7/15/23 .............................. 2,825,000 2,985,573
------------
6,295,426
------------
RETAIL -- 4.6%
Bradlees Inc, 11.000%, 8/01/02 (d) ............. 250,000 62,500
Bradlees Inc, 9.250%, 3/01/03 (d) ............. 250,000 58,750
K Mart, 9.350%, 1/02/20 ........................ 2,500,000 1,737,500
K Mart, 9.780%, 1/05/20 ........................ 1,000,000 710,000
K Mart, 7.950%, 2/01/03 ........................ 4,500,000 3,150,855
Penn Traffic Co., 9.625%, 4/15/05 .............. 4,500,000 3,510,000
Service Merchandise,
9.000%, 12/15/04 ............................. $ 500,000 $ 406,250
Woolworth, 8.500%, 1/15/22 ..................... 2,000,000 2,053,600
------------
11,689,455
------------
RESTAURANTS -- 0.8%
Foodmaker inc., 9.750%, 6/01/02 ................ 500,000 462,500
Flagstar Corp., 11.250%, 11/01/04 .............. 2,200,000 1,567,500
------------
2,030,000
------------
STEEL -- 1.1%
Geneva Steel Co., 9.500%, 1/15/04 .............. 2,750,000 2,145,000
Geneva Steel Co., 11.125%, 3/15/01 ............. 750,000 622,500
------------
2,767,500
------------
TAX EXEMPT MUNICIPAL -- 0.3%
Foothill/Eastern Transportation,
Zero Coupon, 1/01/29 ......................... 5,525,000 684,161
------------
TAXABLE MUNICIPAL -- 0.8%
Los Angeles County, California
7.070%, 6/30/09 1,500,000 1,552,860
New York City, 9.500%, 6/01/09-01 .............. 400,000 450,184
------------
2,003,044
------------
TELECOMMUNICATIONS -- 1.1%
Nextel Communications,
1.000%, 8/15/04 .............................. 2,500,000 1,356,250
Tele-Communications,
7.875%, 8/01/13 .............................. 1,500,000 1,542,765
------------
2,899,015
------------
TEXTILES -- 0.6%
Fruit of the Loom Inc.,
7.375%, 11/15/23 ............................. 1,500,000 1,436,295
------------
UTILITIES -- 1.8%
Beaver Valley Funding Corp.,
9.000%, 6/01/17 .............................. 3,000,000 2,530,440
Commonwealth Edison,
4.750%, 12/01/11-96 .......................... 1,000,000 808,850
Long Island Lighting Co.,
8.200%, 3/15/23-03 ........................... 450,000 439,215
Niagara Mohawk, 7.875%, 4/10/24 ................ 1,000,000 927,240
------------
4,705,745
------------
TOTAL NON-CONVERTIBLE BONDS
(Identified Cost $167,720,075) ............................ 182,882,382
------------
CONVERTIBLE BONDS -- 18.0%
AEROSPACE -- 0.7%
Hexcel Corp., 7.000%, 8/01/11 .................. 675,000 573,750
Rohr Industries, 7.000%, 10/01/12 .............. 1,600,000 1,360,000
------------
1,933,750
------------
<PAGE>
LOOMIS SAYLES BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- (Continued)
BONDS AND NOTES -- (Continued)
Face
Amount Value (a)
----------- ------------
AUTO PARTS -- 0.8%
Mascotech, 4.500%, 12/15/03 .................... $ 2,500,000 $ 1,943,750
------------
BROADCASTING -- 0.7%
Comcast Corp., 1.125%, 4/15/07 ................. 250,000 126,875
Fuqua Industries, 6.500%, 8/04/02 .............. 1,860,000 1,543,800
------------
1,670,675
------------
COMPUTER HARDWARE & PERIPHERALS -- 1.6%
AST Research Inc., Zero Coupon Bond, 12/14/13 .. 5,000,000 1,700,000
Maxtor Corp., 5.750%, 3/01/12 .................. 2,100,000 1,627,500
Micropolis Corp., 6.000%, 3/15/12 .............. 1,228,000 589,440
Unisys Corp., 8.250%, 8/01/00 .................. 500,000 445,000
------------
4,361,940
------------
EDUCATION -- 0.1%
National Education Corp.,
6.500%, 5/15/11 .............................. 75,000 52,500
------------
ELECTRONICS -- 0.8%
EDO Corp., 7.000%, 12/15/11 .................... 434,000 303,800
Genrad Inc., 7.250%, 5/01/11 ................... 467,000 429,640
National Semiconductor,
6.500%, 10/01/02 ............................. 500,000 469,790
Richardson Electronics,
7.250%, 12/15/06 ............................. 450,000 360,000
Thermedics, 6.500%, 7/15/98 .................... 175,000 465,500
------------
2,028,730
------------
ENTERTAINMENT -- 2.1%
Discovery Zone Inc., Zero Coupon Bond, 10/14/13 2,500,000 650,000
Time Warner, Zero Coupon Bond, 12/17/12 ........ 13,400,000 4,706,750
------------
5,356,750
------------
ENVIRONMENTAL SERVICES -- 1.2%
Air & Water Technologies,
8.000%, 5/15/15 .............................. 1,000,000 855,000
Ogden Corp., 6.000%, 6/01/02 ................... 500,000 473,125
Ogden Corp., 5.750%, 10/20/02 .................. 1,750,000 1,638,438
------------
2,966,563
------------
FOOD -- 0.2%
Chiquita Brands International,
7.000%, 3/28/01 (c) .......................... 450,000 416,250
-------------
FOREIGN CURRENCY -- 0.4%
LASMO, 7.750%, 10/04/05 ........................ 650,000 908,385
SKF, Zero Coupon, 7/26/02 ...................... 210,000 159,660
------------
1,068,045
------------
FOREIGN ISSUER -- 0.2%
Teleckom Malaysia
4.000%, 10/03/04 ............................. $ 500,000 $ 482,500
------------
HEALTH CARE & RELATED -- 3.1%
Alza Corp., Zero Coupon, 7/14/14 6,900,000 2,785,875
Centocor, 7.250%, 2/1/01 ....................... 750,000 877,500
Centocor, 6.750%, 10/16/01 (c) ................. 875,000 787,500
Centocor, 6.750%, 10/16/01 (c) ................. 780,000 702,000
Chiron Corp., 1.900%, 11/17/00 ................. 2,000,000 2,025,000
Glycomed, Inc., 7.500%, 1/01/03 900,000 702,000
------------
7,879,875
------------
MANUFACTURING -- 0.5%
FMC Corp., 6.750%, 1/16/05 ..................... 1,175,000 1,122,125
Trinova, 6.000%, 10/15/02 ...................... 250,000 240,938
------------
1,363,063
------------
OIL & GAS -- 1.3%
Cross Timbers Oil Co.,
5.250%, 11/02/23 ............................. 250,000 235,000
Lone Star, 8.000%, 8/27/02 ..................... 100,000 82,000
Oryx Energy, 7.500%, 5/15/14 ................... 345,000 307,050
Pennzoil, 4.750%, 10/01/03 ..................... 3,000,000 3,037,500
------------
3,661,550
------------
REAL ESTATE -- 3.1%
Federal Realty Investors Trust,
5.250%, 10/28/03 ............................. 2,000,000 1,795,000
Meditrust, 7.500%, 3/01/01 ..................... 250,000 252,500
Rockefeller Properties, Zero Coupon Bonds,
12/31/00 ..................................... 7,000,000 3,955,000
Rouse Co., 5.750%, 7/23/02 ..................... 1,850,000 1,799,125
------------
7,801,625
------------
RESTAURANT -- 0.2%
Flagstar Corp., 10.000%, 11/01/14 .............. 500,000 280,000
Shoney's, Zero Coupon, 4/11/04 ................. 750,000 294,376
------------
574,376
------------
SPECIALTY RETAIL -- 0.2%
CML Group Inc., 5.500%, 1/15/03 ................ 250,000 178,750
Eagle Hardware & Garden Inc.,
6.250%, 3/15/01 .............................. 275,000 198,688
Jacobson Stores Inc.,
6.750%, 12/15/11 ............................. 290,000 205,900
------------
583,338
------------
TEXTILE -- 0.2%
Dixie Yarns, 7.000%, 5/15/12 ................... 300,000 226,500
Fieldcrest Cannon Inc.,
6.000%, 3/15/12 .............................. 500,000 342,500
------------
569,000
------------
AIR TRANSPORTATION -- 0.1%
Air Wisconsin, 7.750%, 6/15/10 ................. 200,000 182,000
------------
<PAGE>
LOOMIS SAYLES BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- (Continued)
BONDS AND NOTES -- (Continued)
Face
Amount Value (a)
----------- ------------
TRUCK & LEASING -- 0.5%
Preston Corp., 7.000%, 5/01/11 ................. $ 750,000 $ 525,000
Worldway, 6.250%, 4/15/11 ...................... 1,000,000 730,000
------------
1,255,000
------------
TOTAL CONVERTIBLE BONDS
(Identified Cost $44,575,044) ............................. 46,151,280
------------
PREFERRED STOCKS -- 7.4%
Shares
-----------
BANKS -- 2.4%
Bankamerica Corp. Series A...................... 450 21,938
Bankamerica Corp. Series B ..................... 19,300 1,746,650
Bank of Boston Corp. ........................... 11,700 959,400
Citicorp ....................................... 25,000 2,250,000
First Chicago Corp. ............................ 7,500 671,250
HSBC Americas Inc. ............................. 11,500 523,250
------------
6,172,488
------------
COMPUTERS -- 0.2%
Unisys Corp. ................................... 21,800 585,875
------------
METALS -- 1.1%
Aluminum Company of America .................... 10,000 725,000
Bethlehem Steel Corp. (c) ...................... 44,550 1,971,338
------------
2,696,338
------------
OIL & GAS -- 2.4%
Enserch Corp. .................................. 700 65,800
Kaneb Services ................................. 500 4,313
McDermott Inc. ................................. 14,000 397,250
Occidental Petroleum Corp. (c) ................. 65,500 3,618,875
Unocal Corp. ................................... 39,000 2,145,000
------------
6,231,238
------------
REAL ESTATE -- 0.1%
Rouse Co. ...................................... 5,000 258,125
------------
UTILITIES -- 1.2%
Baltimore Gas & Electric Co. ................... 440 23,760
Central Los Angeles Electric ................... 1,500 123,000
Cleveland Electric ............................. 200 176,500
Connecticut Light & Power ...................... 1,800 46,012
Illinois Power ................................. 200 8,600
Indianapolis Power & Light Co. ................. 476 25,288
Jersey Central Power & Light ................... 170 9,180
Long Island Lighting Co. ....................... 10,000 202,500
Louisiana Power & Light Co. .................... 2,600 142,675
MDU Resources .................................. 5,000 455,000
Metropolitan Edison Co. ........................ 2,570 133,640
Minnesota Power & Light ........................ 200 13,400
Nevada Power Co. ............................... 19,000 332,500
Niagara Mohawk Power ........................... 5,000 240,000
Niagara Mohawk Power ........................... 35,000 656,250
Northern States Power Co. ...................... 600 30,750
Public Service Co. ............................. 360 19,980
Texas Utilities ................................ 5,000 482,500
------------
3,121,535
------------
TOTAL PREFERRED STOCKS
(Identified Cost $18,474,552) ............................. 19,065,599
------------
SHORT-TERM INVESTMENT -- 1.8%
Face
Amount
-----------
Repurchase Agreement with State Street Bank and
Trust Company dated 12/29/95 at 5.000% to be
repurchased at $4,526,513 on
1/2/96 collateralized $3,175,000 U.S. Treasury
Bond, 9.875% due 11/15/15 with a value of
$4,618,799 ................................... $ 4,524,000 4,524,000
------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $4,524,000) .............................. 4,524,000
------------
TOTAL INVESTMENTS -- 98.8%
(Identified cost $235,293,671) (b) .......................... 252,623,261
Cash, Receivables and Other Assets (e) ........................ 11,435,575
Liabilities ................................................... (8,348,679)
------------
TOTAL NET ASSETS -- 100% ...................................... $255,710,157
============
(a) See Note 1A.
(b) At December 31, 1995 the net unrealized appreciation on investments based
on cost of $235,392,842 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost ........ $ 20,000,293
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value ........ (2,769,874)
------------
Net unrealized appreciation ............................... $ 17,230,419
============
(c) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualfied institutional buyers.
(d) Company filed for Chapter 11 Bankruptcy.
Non-income producing security.
(e) Including foreign currencies with a value of $1,071,029 and a cost of
$1,071,346.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES GLOBAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- as of December 31, 1995
BONDS AND NOTES -- 95.6%
OF TOTAL NET ASSETS
Face
Currency Amount Value (a)
-------- ------------- -----------
ARGENTINA -- 5.5%
Republic of Argentina,
1.00%, 3/31/23 ............... USD 1,000,000 $ 571,250
-----------
AUSTRIA -- 2.3%
Republic of Austria,
9.00%, 7/22/04 ................ PS 141,000 236,186
-----------
BRAZIL -- 5.1%
Republic of Brazil, YL3
4.25%, 4/15/24 ................ USD 1,000,000 528,750
-----------
CANADA -- 11.9%
Ontario Hydro,
8.900%, 8/18/22 ............... CAD 475,000 383,710
Province of Ontario,
8.100%, 9/08/23 ............... CAD 525,000 390,326
Province of Saskatchewan,
9.600%, 2/4/22 ................ CAD 525,000 452,912
-----------
1,226,948
-----------
FINLAND -- 3.1%
Repola, 6.500%, 3/25/04 ......... FIN 1,500,000 323,573
-----------
FRANCE -- 5.6%
Government of France,
7.000%, 10/12/00 .............. FFR 1,350,000 288,022
Government of France,
8.500%, 11/25/02 .............. FFR 1,260,000 287,182
-----------
575,204
-----------
GERMANY -- 4.5%
Treuhandanstalt,
7.500%, 9/09/04 ............... GER 600,000 458,823
-----------
GREAT BRITAIN -- 6.5%
Glaxo Wellcome,
8.750%, 12/01/05 .............. PS 250,000 405,862
Northern Foods,
6.750%, 8/08/08 ............... PS 200,000 263,975
-----------
669,837
-----------
IRELAND -- 3.3%
Republic of Ireland,
8.250%, 8/18/15 ............... IP 200,000 339,674
-----------
ITALY -- 8.9%
U.S. General Electric Capital
Corp., 9.550%, 8/25/03......... ITL 550,000,000 327,297
IMI Bank International,
1.00%, 6/13/06................. ITL 3,000,000,000 583,281
-----------
910,578
-----------
JAPAN -- 8.8%
Mitsubishi Trust & Banking,
3.250%, 9/30/03 ............... USD 550,000 $ 497,063
Sumitomo Trust & Banking,
1.750%, 3/31/02 ............... USD 500,000 403,750
-----------
900,813
-----------
MEXICO -- 4.4%
Mexico (United Mexico
States), 6.250%, 12/31/19
with 700,000 Rights ........... USD 700,000 458,500
-----------
NETHERLANDS -- 3.2%
Dutch Government,
7.000%, 6/15/05 ............... NLG 500,000 332,556
-----------
NEW ZEALAND -- 5.0%
New Zealand,
8.000%, 11/15/06 .............. NZD 750,000 518,716
-----------
SPAIN -- 5.5%
Government of Spain,
10.000%, 2/28/05 .............. ESP 67,000,000 568,293
-----------
SWEDEN -- 5.2%
Kingdom of Sweden,
10.2500%, 5/05/00 ............. SK 3,300,000 534,080
-----------
UNITED STATES -- 6.8%
United States Treasury USD 700,000 701,532
-----------
TOTAL BONDS AND NOTES
(Identified Cost $9,372,852) ............................... 9,855,313
-----------
SHORT-TERM INVESTMENTS -- 10.1%
Repurchase Agreement with State Street Bank and
Trust Company dated 12/29/95 to be repurchased
at $1,038,577 on 1/02/96 collateralized by
$985,000 U.S. Treasury Notes 7.125% due 9/30/99
with a value of $1,061,204 ......................... 1,038,000 1,038,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(identified cost $1,038,000) ................................. 1,038,000
-----------
TOTAL INVESTMENTS -- 105.7%
(Identified Cost $10,410,852) (b) ............................ 10,893,313
Cash, Receivables and Other Assets (c) ......................... 287,624
Liabilities .................................................... (876,632)
-----------
TOTAL NET ASSETS -- 100% ....................................... $10,304,305
===========
<PAGE>
LOOMIS SAYLES GLOBAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- (Continued)
FORWARD FOREIGN CURRENCY CONTRACTS
AT DECEMBER 31, 1995
LOCAL AGGREGATE UNREALIZED
DELIVERY CURRENCY FACE TOTAL APPRECIATION/
DATE AMOUNT AMOUNT VALUE DEPRECIATION
-------- -------- ------ ----- ------------
Deutsche Marks
(sell) ....... 3/20/96 125,000 $ 87,498 $ 87,370 $ 128
Deutsche Marks
(sell) ....... 3/20/96 4,271,000 2,962,475 2,985,279 (22,804)
French Francs
(buy) ........ 3/20/96 84,000 17,071 17,143 (72)
French Francs
(buy) ........ 3/20/96 2,727,000 546,197 556,532 (10,335)
--------
FORWARD FOREIGN CURRENCY CONTRACTS -- NET ..................... $(33,083)
========
(a) See Notes 1A and 1B.
(b) Federal Tax Information:
At December 31, 1995 the net unrealized appreciation on
investments based on cost for federal income tax purposes of
$10,410,852 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there is an excess of value
over tax cost ................................... $ 621,372
Aggregate gross unrealized depreciation for all
investments in which there is an excess of tax
cost over value ................................. (138,911)
--------------
Net unrealized appreciation ..................... $ 482,461
==============
As of December 31, 1995 the Fund had net tax basis loss
carryforwards of $994,500 and $155,568 which expire on December
31, 2002 and December 31, 2003, respectively.
(c) Including foreign currencies with a value of $475 and a cost of
$470.
AUD = Australian Dollar. GER = German Deutsche Mark.
CAD = Canadian Dollar. IP = Irish Punt.
DKK = Danish Krone. ITL = Italian Lira.
ECU = European Currency Unit. NLG = Netherlands Guilder.
ESP = Spanish Peseta. NZD = New Zealand Dollar.
FFR = French Franc. PS = Pound Sterling.
FIN = Finnish Markka. SK = Swedish Krone.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES U.S. GOVERNMENT SECURITIES FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- as of December 31, 1995
BONDS AND NOTES -- 98.5%
OF TOTAL NET ASSETS
Face
Amount Value (a)
---------- -----------
GOVERNMENT AGENCIES -- 52.7%
Government National Mortgage Association, 9.000%
with various maturities to 2005 ............... $2,650,447 $ 2,807,805
Tennessee Valley Authority, 8.625%, 11/15/29 ..... 6,666,000 7,474,386
-----------
10,282,191
-----------
U.S. GOVERNMENT -- 45.8%
U.S. Treasury Strips, Zero Coupon
Bonds, 11/15/07 ................................ 1,100,000 554,235
U.S. Treasury Bonds, 8.750%, 11/15/08 ............ 4,700,000 5,606,207
U.S. Treasury Bonds, 7.500%, 11/15/24 ............ 2,310,000 2,776,689
-----------
8,937,131
-----------
TOTAL BONDS AND NOTES
(Identified Cost $18,583,301) .............................. 19,219,322
-----------
TOTAL INVESTMENTS -- 98.5%
(Identified Cost $18,583,301) (b) ............................ $19,219,322
Cash, Receivables and Other Assets ............................. 354,748
Liabilities .................................................... (74,920)
-----------
TOTAL NET ASSETS -- 100% ....................................... $19,499,150
===========
(a) See Note 1A.
(b) Federal Tax Information:
At December 31, 1995 the net unrealized appreciation on investments based
on cost of $18,892,037 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost ....... $ 428,583
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value ....... (101,298)
-----------
Net unrealized appreciation ................................ $ 327,285
===========
As of December 31, 1995 the Fund had a net tax basis loss carryforward of
$291,541 which expires on December 31, 2002.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- as of December 31, 1995
BONDS -- 96.5%
OF TOTAL NET ASSETS
Face
Amount Value (a)
-------- ----------
ALASKA -- 1.3%
Alaska State Housing Finance Corp.,
6.600%, 12/1/15 ................................... $ 95,000 $ 99,589
----------
ARIZONA -- 2.0%
Phoenix Street and Highway User,
6.25%, 7/01/11 .................................... 150,000 160,920
----------
CALIFORNIA -- 16.2%
California State, 6.20%, 9/01/06 .................... 100,000 110,451
California State, 6.40%, 9/01/07 .................... 225,000 251,102
California State Department of Water
Resources, 5.625%, 12/01/12 ....................... 100,000 102,927
Foothill Eastern, 6.000%, 1/01/16 ................... 250,000 250,940
Foothill Eastern, 1,000%, 1/01/23 ................... 500,000 91,705
Fresno Sewer Revenue,
6.250%, 9/01/14 ................................... 250,000 283,360
University California
Revenues Issues, 5.000% 9/01/11 ................... 200,000 195,734
----------
1,286,219
----------
COLORADO -- 2.1%
El Paso County, Zero Coupon Bond,
9/01/15 ........................................... 500,000 170,350
----------
CONNECTICUT -- 4.0%
Connecticut State Resource Recovery Authority,
7.625%, 1/01/09 ................................... 200,000 210,612
Connecticut State Special Tax Obligation, 6.125%,
9/01/12 ........................................... 100,000 110,576
----------
321,188
----------
FLORIDA -- 3.8%
Florida State Board of Education Capital Outlay,
5.100%, 6/01/09 ................................... 100,000 100,410
Florida State Municipal Power Agency, 5.500%,
10/0112 ........................................... 200,000 204,018
----------
304,428
----------
ILLINOIS -- 4.2%
Chicago O'Hare International Airport,
5.000%, 1/1/16 .................................... 150,000 143,600
Illinois Development Finance Authority Pollution 25,000 26,850
Illinois St. Sales Tax Revenue,
6.375%, 6/15/14 ................................... 150,000 164,763
----------
335,213
----------
LOUISIANA -- 3.0%
Regional Transportation Authority,
8.000%, 12/01/08 .................................. 200,000 223,054
----------
MAINE -- 2.7%
Portland, 6.150%, 4/01/01 ........................... 200,000 218,088
----------
MASSACHUSETTS -- 2.7%
Plymouth County, Certificates of
Participation, 6.500%, 4/01/01..................... 200,000 214,842
----------
MICHIGAN -- 5.3%
Michigan State Comprehensive,
6.000%, 5/15/07 ................................... $250,000 $ 269,277
150,000 153,039
----------
422,316
----------
NEW JERSEY -- 3.9%
New Jersey State Turnpike Authority,
6.500%, 1/01/08 ................................... 200,000 226,448
New Jersey State Turnpike Authority,
6.500%, 1/01/16 ................................... 75,000 84,128
----------
310,576
----------
NEW YORK -- 16.7%
New York City, 7.000%, 8/01/98 ...................... 5,000 5,271
New York State, Certificates of Participation,
5.650%, 8/01/02 ................................... 160,000 163,339
New York State Dormitory Authority, 5.250%, 5/15/04 . 150,000 149,489
New York State Dormitory Authority, 5.750%, 7/01/08 . 250,000 268,000
New York State Dormitory Authority, 6.375%, 7/01/08 . 200,000 212,738
New York State Environmental Pollution Control,
5.750%, 6/15/10 ................................... 250,000 267,005
New York Urban Development Corp., 5.625% 1/01/07 .... 150,000 151,317
Triborough Bridge & Tunnel Authority, 6.000%, 1/01/12 100,000 109,765
----------
1,326,924
----------
NORTH CAROLINA -- 1.4%
North Carolina Eastern Municipal Power,
7.250%, 1/01/07 ................................... 100,000 112,264
----------
PENNSYLVANIA -- 2.7%
Pennsylvania Finance Authority Revenue Bond,
6.600%, 11/01/09 .................................. 200,000 218,058
----------
PUERTO RICO -- 1.6%
Puerto Rico Telephone Authority Revenue Bond,
5.400%, 1/01/08 ................................... 125,000 130,246
----------
TENNESSEE -- 3.7%
Metropolitan Nashville Airport,
6.600%, 7/01/15 ................................... 30,000 32,925
Shelby County, 5.900%, 3/01/13 ...................... 250,000 262,830
----------
295,755
----------
TEXAS -- 7.7%
Dallas, Fort Worth Regional Airport,
6.000%, 11/01/02 .................................. 100,000 107,945
Manor Texas Independent School
District, 5.8000%, 8/01/11 ........................ 250,000 261,355
United Independent School District,
4.800%, 8/15/07 ................................... 250,000 246,700
----------
616,000
----------
<PAGE>
LOOMIS SAYLES MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- (Continued)
BONDS -- (Continued)
Face
Amount Value (a)
-------- ----------
UTAH -- 2.2%
Intermountain Power Agency Utah,
5.000%, 7/01/05 ................................... $175,000 $ 176,979
----------
VIRGINIA -- 1.3%
Virginia State Public School Authority,
5.250%, 1/01/12 ................................... 100,000 100,231
----------
WASHINGTON -- 8.0%
King County, 5.875%, 1/01/13 ........................ 125,000 132,179
Snohomish County School District,
5.600%, 12/01/06 .................................. 250,000 264,618
Washington State, 6.375%, 2/01/14 ................... 225,000 241,375
----------
638,172
----------
TOTAL BONDS
(Identified Cost $7,290,328) ................................ 7,681,412
----------
TOTAL INVESTMENTS -- 96.5%
(Identified Cost $7,290,328) (b) .............................. 7,681,412
Cash, Receivables and Other Assets .............................. 316,429
Liabilities ..................................................... (37,000)
----------
TOTAL NET ASSETS -- 100% ........................................ $7,960,841
==========
(a) See Note 1A.
(b) Federal Tax Information:
At December 31, 1995 the net unrealized appreciation on investments based
on cost of $7,290,328 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost .......... $ 398,275
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value .......... (7,191)
----------
Net unrealized appreciation ................................. $ 391,084
==========
See accompanying notes to financial statements.
Face
Amount Value (a)
---------- -----------
LOOMIS SAYLES SHORT-TERM BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- as of December 31, 1995
BONDS AND NOTES -- 98.1%
OF TOTAL NET ASSETS
Face
Amount Value (a)
---------- -----------
AEROSPACE -- 0.8%
Lockheed Corp., 5.875%, 3/15/98 .................. $ 200,000 $ 200,680
-----------
CABLE & MEDIA -- 2.8%
TCI Communications Inc.,
7.390%, 8/28/01 ................................ 700,000 733,355
-----------
FINANCE -- 7.2%
Chrysler Financial Corp.,
6.500%, 6/15/98 ................................ 200,000 203,768
Navistar Financial Corp.,
9.500%, 6/01/96 ................................ 450,000 459,000
Sears Roebuck Acceptance Corp.,
6.500%, 6/15/00 ................................ 1,000,000 1,023,030
Westinghouse Credit Corp.,
8.700%, 5/20/96 ................................ 200,000 200,964
-----------
1,886,762
-----------
FOOD & BEVERAGE -- 2.0%
RJR Nabisco, 8.625%, 12/01/02 .................... 500,000 520,845
-----------
HEALTHCARE -- 3.2%
Hospital Corp. of America, Zero
Coupon Bond, 6/01/00 ........................... $1,100,000 $ 833,954
-----------
INDUSTRIAL -- 3.7%
Unisys Corp., 9.750%, 9/15/96 .................. 1,000,000 970,000
-----------
INSURANCE -- 3.0%
American Re Corp.,
10.875%, 9/15/04 ............................... 700,000 780,920
-----------
MANUFACTURING -- 3.0%
Tektronix Inc., 7.625%, 8/15/02 .................. 750,000 786,495
-----------
MEDIA & ENTERTAINMENT -- 2.4%
Time Warner, 7.450%, 2/01/98 ..................... 400,000 411,140
Time Warner, 7.950%, 2/01/00 ..................... 200,000 210,836
-----------
621,976
-----------
MISCELLANEOUS -- 1.7%
News America Holdings,
9.125%, 10/15/99 ............................... 400,000 442,152
-----------
SECURITIES -- 6.6%
Lehman Brothers Inc.,
7.375%, 5/15/07 ................................ 700,000 734,559
Smith Barney Inc.,
5.500%, 1/15/99 ................................ 990,000 981,664
-----------
1,716,223
-----------
<PAGE>
LOOMIS SAYLES SHORT-TERM BOND FUND
- --------------------------------------------------------------------------------
INVESTMENTS -- (Continued)
BONDS AND NOTES -- (Continued)
Face
Amount Value (a)
---------- -----------
TRANSPORTATION -- 3.2%
Delta Air Lines, 7.790%, 12/01/98 $ 800,000 $ 830,168
-----------
U.S. GOVERNMENT -- 58.5%
United States Treasury Notes,
5.750%, 10/31/97 ............................... 7,350,000 7,421,221
United States Treasury Notes,
5.125%, 3/01/98 ................................ 5,850,000 5,839,938
United States Treasury Notes,
6.875%, 8/31/99 ................................ 1,875,000 1,970,513
-----------
15,231,672
-----------
TOTAL INVESTMENTS -- 98.1%
(Identified Cost $25,231,864) (b) ............................ 25,555,202
Receivables and Other Assets ................................... 756,409
Liabilities .................................................... (272,179)
-----------
TOTAL NET ASSETS -- 100% ....................................... $26,039,432
===========
(a) See Note 1A.
(b) Federal Tax Information:
At December 31, 1995 the net unrealized appreciation on investments based
on cost of $25,231,864 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all investments
in which there is an excess of value over tax cost ......... $ 419,417
Aggregate gross unrealized depreciation for all investments
in which there is an excess of tax cost over value ......... (96,079)
-----------
Net unrealized appreciation ................................ $ 323,338
===========
As of December 31, 1995 the Fund had total net tax basis loss carry-
forwards of $134,110, which expires December 31, 2002.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES -- December 31, 1995
Growth International
Growth & Income Small Cap Equity
------------ ------------ ----------- -----------
ASSETS
Investments at value:
Securities ...... $44,258,190 $36,981,654 $79,759,047 $77,923,816
Repurchase
agreements ..... 1,385,000 0 9,925,000 734,000
----------- ----------- ----------- -----------
Total investments . 45,643,190 36,981,654 89,684,047 78,657,816
Cash .............. 337 0 448 212
Foreign currency at
value ............ 0 0 0 492,875
Receivable for:
Shares of the
Fund sold ...... 102,108 234,594 136,704 518,290
Securities sold . 0 0 2,383,167 1,595,851
Dividends and
interest -- net. 20,252 93,496 134,643 44,983
Foreign tax
reclaim -- net . 0 2,802 0 124,277
Unamortized
organization
expenses ......... 1,795 1,743 1,743 1,795
----------- ----------- ----------- -----------
45,767,682 37,314,289 92,340,752 81,436,099
----------- ----------- ----------- -----------
LIABILITIES
Payable for:
Securities
purchased ...... 168,350 526,899 1,536,818 162,565
Foreign
currency
spot contracts
-- net ......... 0 0 0 1,214
Shares of the
Fund redeemed .. 526,487 232,087 106,729 1,418,966
Dividends declared 8,710 37,968 126,284 238,334
Accrued expenses:
Management fees .. 28,687 22,636 73,680 67,795
Trustees' fees ... 1,250 1,250 1,250 1,250
Accounting and
administration 1,008 1,008 1,008 1,008
Other expenses ... 22,418 27,145 40,048 56,757
----------- ----------- ----------- -----------
756,910 848,993 1,885,817 1,947,889
----------- ----------- ----------- -----------
NET ASSETS .......... $45,010,772 $36,465,296 $90,454,935 $79,488,210
=========== =========== =========== ===========
Net Assets consist of:
Capital paid in .. $34,018,473 $29,507,158 $77,690,934 $78,194,131
Undistributed net
investment income 0 8,080 15,556 26,969
Accumulated net
realized gains
(losses) 1,429,494 961,185 2,739,056 (396,600)
Unrealized
appreciation
(depreciation) on:
Investments 9,562,805 5,988,873 10,009,389 1,658,784
Foreign currency
transactions 0 0 0 4,926
----------- ----------- ----------- -----------
NET ASSETS .......... $45,010,772 $36,465,296 $90,454,935 $79,488,210
=========== =========== =========== ===========
Shares of beneficial
interest outstanding,
no par value ....... 2,948,623 2,502,983 5,901,613 6,825,853
=========== =========== =========== ===========
Computation of offering price:
Net asset value
and redemption
price per share
(Net assets /
shares of
beneficial
interest
outstanding) ..... $15.27 $14.57 $15.33 $11.65
=========== =========== =========== ===========
Identified cost
of investments ..... $36,080,385 $30,992,781 $79,674,658 $76,999,032
=========== =========== =========== ===========
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES -- December 31, 1995
<TABLE>
<CAPTION>
U.S.
Global Government Municipal Short-Term
Bond Bond Securities Bond Bond
------------- ------------ ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at value:
Securities ...... $248,099,261 $ 9,855,313 $19,219,322 $7,681,412 $25,555,202
Repurchase
agreements ..... 4,524,000 1,038,000 0 0 0
------------ ------------ ------------ ---------- -----------
Total investments 252,623,261 10,893,313 19,219,322 7,681,412 25,555,202
Cash ............ 479 4,531 49,741 170,806 0
Foreign currency
at value ....... 1,071,029 475 0 0 0
Receivable for:
Shares of the
Fund sold ..... 4,244,334 33,487 134,347 0 394,210
Securities
sold ......... 1,297,716 0 0 0 0
Dividends and
interest --
net .......... 4,820,222 223,916 168,814 136,158 361,761
Foreign tax
reclaim -- net . 0 13,665 0 0 0
Due from the
adviser ........ 0 9,765 0 4,872 0
Unamortized
organization
expenses ....... 1,795 1,785 1,846 4,593 438
------------ ------------ ------------ ---------- -----------
264,058,836 11,180,937 19,574,070 7,997,841 26,311,611
------------ ------------ ------------ ---------- -----------
LIABILITIES
Payable for:
Securities
purchased ..... 6,665,515 701,531 0 0 0
Due Custodian
Bank .......... 0 0 0 0 99,340
Forward foreign
currency
contracts -- net 0 33,083 0 0 0
Shares of the
Fund redeemed . 792,249 75,398 16,381 0 99,949
Dividends
declared ...... 706,538 35,396 11,405 11,350 4,273
Accrued expenses:
Management fees 124,728 0 22,719 0 38,806
Trustees' fees . 1,250 1,250 1,250 1,250 1,250
Accounting and
administration 1,008 1,008 1,008 1,008 1,008
Other expenses . 57,391 28,966 22,157 23,392 27,553
------------ ------------ ------------ ---------- -----------
8,348,679 876,632 74,920 37,000 272,179
------------ ------------ ------------ ---------- -----------
NET ASSETS ........ $255,710,157 $10,304,305 $19,499,150 $7,960,841 $26,039,432
============ =========== =========== ========== ===========
Net Assets
consist of:
Capital paid in $236,723,445 $10,922,315 $19,464,937 $7,532,204 $26,081,446
Undistributed
net investment
income (loss) . 34,589 130,782 (1,533) 3,829 8,066
Accumulated
net realized
gains (losses) 1,627,425 (1,198,803) (600,275) 33,724 (373,418)
Unrealized
appreciation
(depreciation)
on:
Investments ....... 17,329,590 482,461 636,021 391,084 323,338
Foreign currency
transactions .... (4,892) (32,450) 0 0 0
------------ ------------ ------------ ---------- -----------
NET ASSETS ........ $255,710,157 $10,304,305 $19,499,150 $7,960,841 $26,039,432
============ =========== =========== ========== ===========
Shares of beneficial
interest outstanding,
no par value ..... 20,811,808 904,452 1,832,320 690,228 2,653,389
============ =========== =========== ========== ===========
Computation of offering price:
Net asset value and
redemption price
per share
(Net assets / shares
of beneficial
interest
outstanding) ..... $12.29 $11.39 $10.64 $11.53 $ 9.81
============ =========== =========== ========== ===========
Identified cost of
investments ...... $235,293,671 $10,410,852 $18,583,301 $7,290,328 $25,231,864
============ =========== =========== ========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS -- For the Year Ended December 31, 1995
Internation
Growth al
Growth & Income Small Cap Equity
------------ ----------- ----------- ----------
INVESTMENT INCOME
Dividends .......... $ 271,585 $ 797,759* $ 842,858* $1,907,850*
Interest ........... 62,722 112,130 447,163 134,908
------------ ----------- ----------- ----------
334,307 909,889 1,290,021 2,042,758
------------ ----------- ----------- ----------
Expenses
Management fees .. 319,009 243,025 839,470 781,765
Trustees' fees and
expenses ........ 6,107 6,107 6,107 6,107
Accounting and
administrative fees 9,581 9,581 9,581 9,581
Custodian ........ 55,984 64,768 99,652 254,054
Transfer agent ... 26,989 27,315 47,690 34,465
Audit and tax
services ........ 14,333 14,333 14,333 14,958
Legal ............ 2,314 2,314 2,314 2,314
Printing ......... 2,609 2,412 8,769 4,536
Registration ..... 13,997 14,072 16,420 18,690
Amortization of
organization
expenses ........ 3,741 3,741 3,741 3,741
Miscellaneous .... 3,533 1,074 2,028 2,530
------------ ----------- ----------- ----------
458,197 388,742 1,050,105 1,132,741
------------ ----------- ----------- ----------
Less expenses
assumed by the
investment adviser 0 0 0 0
------------ ----------- ----------- ----------
Net investment
income (loss) ..... (123,890) 521,147 239,916 910,017
------------ ----------- ----------- ----------
REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS
AND FOREIGN CURRENCY
TRANSACTIONS
Realized gain (loss)
on:
Investments -- net 4,581,895 3,594,928 11,656,271 594,383
Foreign currency
transactions --
net ............. 0 0 0 4,270,563
------------ ----------- ----------- ----------
Total realized
gain (loss) on
investments and
foreign currency
transactions ... 4,581,895 3,594,928 11,656,271 4,864,946
------------ ----------- ----------- ----------
Unrealized
appreciation
(depreciation) on:
Investments -- net 6,679,650 5,292,649 11,080,439 226,437
Foreign currency
transactions --
net ............. 0 0 0 249
------------ ----------- ----------- ----------
Total unrealized
appreciation
(depreciation)
on investments and
foreign currency
transactions ... 6,679,650 5,292,649 11,080,439 226,686
------------ ----------- ----------- ----------
Net gain (loss) on
investments and
foreign currency
transactions ...... 11,261,545 8,887,577 22,736,710 5,091,632
------------ ----------- ----------- ----------
NET INCREASE
(DECREASE) IN NET
ASSETS FROM
OPERATIONS .......... $11,137,655 $9,408,724 $22,976,626 $6,001,649
=========== ========== =========== ==========
*Net of foreign withholding taxes of $1,140, $588, and $371,977, respectively.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS -- For the Year Ended December 31, 1995
U.S.
Global Government Municipal Short-Term
Bond Bond Securities Bond Bond
------------ ----------- ----------- ---------- ----------
INVESTMENT INCOME
Dividends .... $ 850,005 $ 0 $ 0 $ 0 $ 0
Interest ..... 13,085,917 1,372,760 1,339,980 437,660 1,856,919
------------ ----------- ----------- ---------- ----------
13,935,922 1,372,760 1,339,980 437,660 1,856,919
------------ ----------- ----------- ---------- ----------
Expenses
Management
fees ....... 917,444 106,447 107,664 45,872 124,536
Trustees'
fees and
expenses ... 6,107 6,107 6,107 6,107 6,107
Accounting and
administrative
fees ....... 9,581 9,581 9,581 9,581 9,581
Custodian ... 135,646 55,984 40,795 37,177 58,276
Transfer agent 85,318 21,476 21,141 20,954 23,306
Audit and tax
services ... 14,333 14,333 14,333 14,333 14,333
Legal ....... 2,314 2,314 2,314 2,314 2,314
Printing .... 13,008 874 791 712 1,093
Registration 20,251 14,572 12,188 12,970 13,484
Amortization of
organization
expenses ... 3,741 3,741 3,741 3,741 1,569
Miscellaneous 3,005 4,314 621 441 856
------------ ----------- ----------- ---------- ----------
1,210,748 239,743 219,276 154,202 255,455
Less expenses
assumed by the
investment
adviser .... 0 (26,849) (39,836) (77,750) (6,383)
------------ ----------- ----------- ---------- ----------
Net investment
income ...... 12,725,174 1,159,866 1,160,540 361,208 1,607,847
------------ ----------- ----------- ---------- ----------
REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS AND
FOREIGN CURRENCY
TRANSACTIONS
Realized gain
(loss) on:
Investments --
net ......... 3,447,177 (1,498,225) 425,319 77,654 (206,571)
Foreign currency
transactions --
net ........ 73,512 1,239,618 0 0 0
------------ ----------- ----------- ---------- ----------
Total realized
gain (loss) on
investments and
foreign currency
transactions . 3,520,689 (258,607) 425,319 77,654 (206,571)
------------ ----------- ----------- ---------- ----------
Unrealized
appreciation
(depreciation)
on:
Investments --
net ........ 25,344,384 1,843,562 2,181,498 733,237 1,090,876
Foreign
currency
transactions --
net ........ 5,808 (366,433) 0 0 0
------------ ----------- ----------- ---------- ----------
Total unrealized
appreciation
(depreciation)
on investments
and foreign
currency
transactions . 25,350,192 1,477,129 2,181,498 733,237 1,090,876
------------ ----------- ----------- ---------- ----------
Net gain (loss)
on investments
and foreign
currency
transaction . 28,870,881 1,218,522 2,606,817 810,891 884,305
------------ ----------- ----------- ---------- ----------
NET INCREASE
(DECREASE) IN
NET ASSETS
FROM
OPERATIONS ... $41,596,055 $2,378,388 $3,767,357 $1,172,099 $2,492,152
=========== ========== ========== ========== ==========
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Growth Growth & Income
--------------------------- -------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
------------ ------------ ----------- -----------
FROM OPERATIONS
Net investment
income (loss) ... $ (123,890) $ (47,848) $ 521,147 $ 320,518
Net realized gain
(loss) on
investments ..... 4,581,895 105,409 3,594,928 893,844
Unrealized
appreciation
(depreciation) on
investments ..... 6,679,650 (1,325,406) 5,292,649 (1,577,639)
------------ ------------ ----------- -----------
Increase
(decrease) in net
assets from
operations ..... 11,137,655 (1,267,845) 9,408,724 (363,277)
------------ ------------ ----------- -----------
FROM DISTRIBUTIONS
TO SHAREHOLDERS
Net investment
income .......... 0 0 (513,067) (312,118)
Net realized gain
on investments .. (3,016,659) (102,926) (2,633,743) (894,725)
Paid in capital .. 0 (29,640) 0 0
------------ ------------ ----------- -----------
(3,016,659) (132,566) (3,146,810) (1,206,843)
------------ ------------ ----------- -----------
FROM CAPITAL SHARES
TRANSACTIONS
Proceeds from the
sale of shares .. 6,743,238 9,906,845 9,763,336 8,560,900
Net asset value of
shares issued in
connection with
the reinvestment
of:
Dividends from
net investment
income ........ 0 0 498,057 302,574
Distributions
from net realized
gain .......... 2,999,240 131,815 2,571,637 876,351
------------ ------------ ----------- -----------
9,742,478 10,038,660 12,833,030 9,739,825
Cost of shares
redeemed ........ (9,432,496) (4,442,960) (8,575,637) (2,880,455)
------------ ------------ ----------- -----------
Increase
(decrease) in
net assets
derived from
capital share
transactions ... 309,982 5,595,700 4,257,393 6,859,370
------------ ------------ ----------- -----------
Total increase
(decrease) in net
assets ........ 8,430,978 4,195,289 10,519,307 5,289,250
NET ASSETS
Beginning of the
year ............ 36,579,794 32,384,505 25,945,989 20,656,739
------------ ------------ ----------- -----------
End of the year .. $ 45,010,772 $ 36,579,794 $36,465,296 $25,945,989
============ ============ =========== ===========
UNDISTRIBUTED NET
INVESTMENT INCOME
Beginning of the
year ............ $ 0 $ 0 $ 7,159 $ 15,915
============ ============ =========== ===========
End of the year .. $ 0 $ 0 $ 8,080 $ 7,159
============ ============ =========== ===========
NUMBER OF SHARES OF
THE FUND:
Issued from the
sale of shares .. 455,569 781,197 685,323 675,145
Issued in
connection with the
reinvestment of:
Dividends from
net investment
income .......... 0 0 34,349 25,642
Distributions
from net realized
gain .......... 197,448 10,537 177,354 74,267
------------ ------------ ----------- -----------
653,017 791,734 897,026 775,054
Redeemed ......... (630,949) (352,549) (592,596) (230,737)
------------ ------------ ----------- -----------
Net change ....... 22,068 439,185 304,430 544,317
============ ============ =========== ===========
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Small Cap International Equity
--------------------------- -------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
------------ ------------ ----------- -----------
FROM OPERATIONS
Net investment
income (loss) ... $ 239,916 $ (235,167) $ 910,017 $ 867,407
Net realized gain
(loss) on:
Investments .... 11,656,271 690,139 594,383 3,416,858
Foreign currency
transactions .. 0 0 4,270,563 1,942,221
Unrealized
appreciation
(depreciation) on:
Investments .... 11,080,439 (7,356,776) 226,437 (7,681,437)
Foreign currency
transactions .. 0 0 249 10,680
----------- ----------- ----------- -----------
Increase
(decrease) in net
assets from
operations ...... 22,976,626 (6,901,804) 6,001,649 (1,444,271)
----------- ----------- ----------- -----------
FROM DISTRIBUTIONS
TO SHAREHOLDERS
Net investment
income .......... (224,360) 0 (910,769) (816,621)
In excess of net
investment income 0 0 0 0
Net realized gain
on investments .. (8,478,430) (600,008) (5,260,890) (5,359,079)
In excess of net
realized gain on
investments ..... 0 0 0 (24,788)
----------- ----------- ----------- -----------
(8,702,790) (600,008) (6,171,659) (6,200,488)
----------- ----------- ----------- -----------
FROM CAPITAL SHARES
TRANSACTIONS
Proceeds from the
sale of shares .. 29,603,453 37,113,524 18,394,310 28,715,883
Net asset value of
shares issued in
connection with
the reinvestment
of:
Dividends from
net investment
income ......... 189,254 0 650,344 574,913
Distributions
from net realized
gain .......... 8,261,382 583,526 4,560,342 4,624,273
----------- ----------- ----------- -----------
38,054,089 37,697,050 23,604,996 33,915,069
Cost of shares
redeemed ........ (34,998,594) (24,622,631) (17,135,420) (9,641,811)
----------- ----------- ----------- -----------
Increase (decrease)
in net assets
derived from
capital share
transactions ... 3,055,495 13,074,419 6,469,576 24,273,258
----------- ----------- ----------- -----------
Total increase
(decrease) in net
assets ....... 17,329,331 5,572,607 6,299,566 16,628,499
NET ASSETS
Beginning of the
year ........... 73,125,604 67,552,997 73,188,644 56,560,145
----------- ----------- ----------- -----------
End of the year . $90,454,935 $73,125,604 $79,488,210 $73,188,644
=========== =========== =========== ===========
UNDISTRIBUTED NET
INVESTMENT INCOME
Beginning of the
year ............ $ 0 $ 0 $ 30,955 $ 47,084
=========== =========== =========== ===========
End of the year .. $ 15,556 $ 0 $ 26,969 $ 30,955
=========== =========== =========== ===========
NUMBER OF SHARES OF
THE FUND:
Issued from the
sale of shares ... 1,963,189 2,724,510 1,461,365 2,208,547
Issued in
connection with the
reinvestment of:
Dividends from
net investment
income ......... 12,525 0 56,064 49,519
Distributions
from net realized
gain ........... 546,749 45,947 393,133 398,301
----------- ----------- ----------- -----------
2,522,463 2,770,457 1,910,562 2,656,367
Redeemed ......... (2,308,929) (1,862,760) (1,386,940) (738,241)
----------- ----------- ----------- -----------
Net change ....... 213,534 907,697 523,622 1,918,126
=========== =========== =========== ===========
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Bond Global Bond
---------------------------- -------------------------
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
------------- ------------ ----------- -----------
FROM OPERATIONS
Net investment
income ......... $ 12,725,174 $ 6,753,560 $ 1,159,866 $ 1,840,144
Net realized gain
(loss) on:
Investments ..... 3,447,177 (1,696,227) (1,498,225) (1,349,342)
Foreign
currency
transactions .. 73,512 621,420 1,239,618 (1,759,902)
Unrealized
appreciation
(depreciation) on:
Investments ... 25,344,384 (9,721,915) 1,843,562 (1,727,496)
Foreign currency
transactions . 5,808 (10,884) (366,433) 280,853
------------ ----------- ----------- -----------
Increase
(decrease) in net
assets from
operations .... 41,596,055 (4,054,046) 2,378,388 (2,715,743)
------------ ----------- ----------- -----------
FROM DISTRIBUTIONS
TO SHAREHOLDERS
Net investment
income ............ (12,732,055) (6,780,562) (662,906) (121,785)
In excess of net
investment income . (38,412) (200,240) 0 0
Net realized gain
on investments .... (1,623,664) 0 0 0
Paid in capital .... 0 0 0 (668,902)
------------ ----------- ----------- -----------
(14,394,131) (6,980,802) (662,906) (790,687)
------------ ----------- ----------- -----------
FROM CAPITAL SHARES
TRANSACTIONS
Proceeds from
sale of shares .... 177,617,553 65,325,712 2,253,543 14,337,545
Net asset value
of shares issued in
connection with
reinvestment of:
Dividends from
net investment
income ........... 10,366,906 6,198,617 591,588 581,971
Distributions
from net realized
gain ............. 1,355,342 0 0 0
------------ ----------- ----------- -----------
189,339,801 71,524,329 2,845,131 14,919,516
Cost of shares
redeemed ......... (43,817,094) (41,725,661) (19,840,371) (7,207,147)
------------ ----------- ----------- -----------
Increase
(decrease) in
net assets
derived from
capital
share
transactions ... 145,522,707 29,798,668 (16,995,240) 7,712,369
------------ ----------- ----------- -----------
Total increase
(decrease) in net
assets ....... 172,724,631 18,763,820 (15,279,758) 4,205,939
NET ASSETS
Beginning of the
year ........... 82,985,526 64,221,706 25,584,063 21,378,124
------------ ----------- ----------- -----------
End of the year . $255,710,157 $82,985,526 $10,304,305 $25,584,063
============ =========== =========== ===========
UNDISTRIBUTED NET
INVESTMENT INCOME
Beginning of the
year ........... $ 6,881 $ 27,002 $ (311,874) $ 77,870
============ =========== =========== ===========
End of the year . $ 34,589 $ 6,881 $ 130,782 $ (311,874)
============ =========== =========== ===========
NUMBER OF SHARES OF
THE FUND:
Issued from the
sale of shares .. 15,342,582 5,904,763 202,475 1,335,387
Issued in
connection with the
reinvestment of:
Dividends from
net investment
income .......... 874,768 596,401 52,122 58,018
Distributions
from net realzed
gain .......... 110,640 0 0 0
------------ ----------- ----------- -----------
16,327,990 6,501,164 254,597 1,393,405
Redeemed ........ (3,771,731) (3,894,082) (1,954,416) (721,264)
------------ ----------- ----------- -----------
Net change ...... 12,556,259 2,607,082 (1,699,819) 672,141
============ =========== =========== ===========
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
U.S. Government Securities Municipal Bond
--------------------------- -----------------------
Year Ended Year Ended
Year Ended Year Ended December December
December 31, December 31, 31, 31,
1995 1994 1995 1994
------------ ------------ ---------- ----------
FROM OPERATIONS
Net investment
income ............. $ 1,160,540 $ 1,171,185 $ 361,208 $ 292,976
Net realized gain
(loss) on investments 425,319 (1,031,245) 77,654 (13,074)
Unrealized
appreciation
(depreciation) on
investments ........ 2,181,498 (1,303,804) 733,237 (587,181)
----------- ----------- ---------- ----------
Increase
(decrease) in net
assets from
operations ........ 3,767,357 (1,163,864) 1,172,099 (307,279)
----------- ----------- ---------- ----------
FROM DISTRIBUTIONS TO
SHAREHOLDERS
Net investment
income ............. (1,161,263) (1,178,783) (361,164) (292,976)
Net realized gain on
investments ........ 0 0 (28,145) 0
----------- ----------- ---------- ----------
(1,161,263) (1,178,783) (389,309) (292,976)
----------- ----------- ---------- ----------
FROM CAPITAL SHARES
TRANSACTIONS
Proceeds from sale
of shares .......... 5,690,298 2,935,499 797,246 3,640,279
Net asset value of
shares issued in
connection with
reinvestment of:
Dividends from net
investment income . 1,106,365 1,150,274 261,821 224,980
Distributions from
net realzed gain .. 0 0 22,507 0
----------- ----------- ---------- ----------
6,796,663 4,085,773 1,081,574 3,865,259
Cost of shares
redeemed ........... (7,244,201) (2,719,268) (1,173,536) (1,154,790)
----------- ----------- ---------- ----------
Increase (decrease)
in net assets
derived from
capital share
transactions ....... (447,538) 1,366,505 (91,962) 2,710,469
----------- ----------- ---------- ----------
Total increase
(decrease) in net
assets ........... 2,158,556 (976,142) 690,828 2,110,214
NET ASSETS
Beginning of the
year ............... 17,340,594 18,316,736 7,270,013 5,159,799
----------- ----------- ---------- ----------
End of the year .... $19,499,150 $17,340,594 $7,960,841 $7,270,013
=========== =========== ========== ==========
UNDISTRIBUTED NET
INVESTMENT INCOME
Beginning of the
year ............... $ 7,255 $ 13,380 $ 3,028 $ 0
=========== =========== ========== ==========
End of the year ..... $ (1,533) $ 7,255 $ 3,829 $ 3,028
=========== =========== ========== ==========
NUMBER OF SHARES OF
THE FUND:
Issued from the sale
of shares .......... 559,951 298,272 71,573 335,233
Issued in connection
with the reinvestment
of:
Dividends from net
investment income . 108,429 122,953 23,555 20,892
Distributions from
net realized gain . 0 0 1,957 0
----------- ----------- ---------- ----------
668,380 421,225 97,085 356,125
Redeemed ........... (717,258) (278,946) (105,539) (104,387)
----------- ----------- ---------- ----------
Net change ......... (48,878) 142,279 (8,454) 251,738
=========== =========== ========== ==========
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Short-Term Bond
-------------------------
Year Ended Year Ended
December 31, December 31,
1995 1994
---------- -----------
FROM OPERATIONS
Net investment income .......................... $ 1,607,847 $ 1,119,522
Net realized gain (loss) on investments ........ (206,571) (144,945)
Unrealized appreciation (depreciation) on
investments ................................... 1,090,876 (694,367)
----------- -----------
Increase (decrease) in net assets from
operations .................................... 2,492,152 280,210
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .......................... (1,607,847) (1,111,090)
In excess of net investment income ............. (366) 0
----------- -----------
(1,608,213) (1,111,090)
----------- -----------
FROM CAPITAL SHARES TRANSACTIONS
Proceeds from sale of shares ................... 25,274,557 10,555,297
Net asset value of shares issued in connection
with reinvestment of:
Dividends from net investment income ......... 1,534,306 1,067,645
----------- -----------
26,808,863 11,622,942
Cost of shares redeemed ........................ (21,093,620) (6,578,066)
----------- -----------
Increase (decrease) in net assets derived from
capital share transactions .................... 5,715,243 5,044,876
----------- -----------
Total increase (decrease) in net assets ........ 6,599,182 4,213,996
NET ASSETS
Beginning of the year .......................... 19,440,250 15,226,254
----------- -----------
End of the year ................................ $26,039,432 $19,440,250
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the year .......................... $ 0 $ 0
=========== ===========
End of the year ................................ $ 8,066 $ 0
=========== ===========
NUMBER OF SHARES OF THE FUND:
Issued from the sale of shares ................. 2,610,568 1,092,193
Issued in connection with the reinvestment of:
Dividends from net investment income ......... 158,326 110,671
----------- -----------
2,768,894 1,202,864
Redeemed ....................................... (2,169,448) (678,594)
----------- -----------
Net change ..................................... 599,446 524,270
=========== ===========
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
LOOMIS SAYLES FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Growth Fund
--------------------------------------------------------------
Year Ended December 31, May 16* to
-------------------------------------------- December 31,
1995 1994 1993 1992 1991
------- ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $12.50 $13.02 $12.46 $12.01 $10.00
------ ------ ------ ------ ------
Income from investment operations --
Net investment income (loss) .............................. (0.00) (0.02) 0.00 (0.04) 0.00
Net realized and unrealized gain (loss) on investments .... 3.86 (0.45) 1.16 0.49 2.45
------ ------ ------ ------ ------
Total from investment operations ...................... 3.86 (0.47) 1.16 0.45 2.45
------ ------ ------ ------ ------
Less distributions --
Distributions from net realized capital gains ............. (1.09) (0.04) (0.60) 0.00 (0.44)
Distributions from capital ................................ 0.00 (0.01) 0.00 0.00 0.00
------ ------ ------ ------ ------
Total distributions ................................... (1.09) (0.05) (0.60) 0.00 (0.44)
------ ------ ------ ------ ------
Net asset value, end of period .............................. $15.27 $12.50 $13.02 $12.46 $12.01
====== ====== ====== ====== ======
Total return (%) ............................................ 30.9 (3.7) 9.3 3.8 24.5
Net assets, end of period (000) ............................. $45,011 $36,580 $32,385 $24,451 $16,105
Ratio of operating expenses to average net assets (%) ....... 1.08 1.16 1.20 1.50 1.50**
Ratio of net investment income to average net assets (%) .... (0.29) (0.14) (0.17) (0.45) 0.01**
Portfolio turnover rate (%) ................................. 48 46 64 98 69**
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%) .... 1.08 1.16 1.20 1.51 1.66**
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net $ 0.00 $(0.02) $ 0.00 $(0.04) $(0.01)
<FN>
- ----------
(*)Commencement of operations.
(**)Computed on an annualized basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
LOOMIS SAYLES FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Growth & Income Fund
--------------------------------------------------------------
Year Ended December 31, May 13* to
-------------------------------------------- December 31,
1995 1994 1993 1992 1991
------- ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $11.80 $12.49 $11.53 $10.54 $10.00
------ ------ ------ ------ ------
Income from investment operations --
Net investment income ..................................... 0.23 0.15 0.13 0.13 0.12
Net realized and unrealized gain (loss) on investments .... 3.93 (0.26) 1.24 1.36 0.59
------ ------ ------ ------ ------
Total from investment operations ...................... 4.16 (0.11) 1.37 1.49 0.71
------ ------ ------ ------ ------
Less distributions --
Dividends from net investment income ...................... (0.23) (0.15) (0.12) (0.13) (0.12)
Distributions from net realized capital gains ............. (1.16) (0.43) (0.29) (0.37) (0.05)
------ ------ ------ ------ ------
Total distributions ................................... (1.39) (0.58) (0.41) (0.50) (0.17)
------ ------ ------ ------ ------
Net asset value, end of period .............................. $14.57 $11.80 $12.49 $11.53 $10.54
====== ====== ====== ====== ======
Total return (%) ............................................ 35.2 (0.9) 11.9 14.1 7.2
Net assets, end of period (000) ............................. $36,465 $25,946 $20,657 $12,279 $7,689
Ratio of operating expenses to average net assets (%) ....... 1.20 1.33 1.50 1.50 1.50**
Ratio of net investment income to average net assets (%) .... 1.61 1.28 1.23 1.42 2.09**
Portfolio turnover rate (%) ................................. 60 48 53 67 27**
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%) .... 1.20 1.33 1.56 2.19 2.59**
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net $ 0.23 $ 0.15 $ 0.12 $ 0.07 $ 0.06
<FN>
- ----------
(*)Commencement of operations.
(**)Computed on an annualized basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
LOOMIS SAYLES FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Small Cap Fund
--------------------------------------------------------------
Year Ended December 31, May 13* to
-------------------------------------------- December 31,
1995 1994 1993 1992 1991
------- ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $12.86 $14.13 $12.88 $12.49 $10.00
------ ------ ------ ------ ------
Income from investment operations --
Net investment income (loss) .............................. 0.04 (0.04) 0.00 (0.06) (0.01)
Net realized and unrealized gain (loss) on investments .... 4.06 (1.12) 3.15 1.67 3.03
------ ------ ------ ------ ------
Total from investment operations ...................... 4.10 (1.16) 3.15 1.61 3.02
------ ------ ------ ------ ------
Less distributions --
Dividends from net investment income ...................... (0.04) 0.00 0.00 0.00 0.00
Distributions from net realized capital gains ............. (1.59) (0.11) (1.90) (1.22) (0.53)
------ ------ ------ ------ ------
Total distributions ................................... (1.63) (0.11) (1.90) (1.22) (0.53)
------ ------ ------ ------ ------
Net asset value, end of period .............................. $15.33 $12.86 $14.13 $12.88 $12.49
====== ====== ====== ====== ======
Total return (%) ............................................ 32.1 (8.2) 24.7 13.1 30.5
Net assets, end of period (000) ............................. $90,455 $73,126 $67,553 $39,244 $14,581
Ratio of operating expenses to average net assets (%) ....... 1.25 1.27 1.35 1.50 1.50**
Ratio of net investment income to average net assets (%) .... 0.29 (0.30) (0.38) (0.79) (0.19)**
Portfolio turnover rate (%) ................................. 155 87 106 109 56**
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%) .... 1.25 1.27 1.35 1.66 2.43**
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net $ 0.04 $ (0.04) $ 0.00 $ (0.07) $ (0.06)
<FN>
- ----------
(*)Commencement of operations.
(**)Computed on an annualized basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
LOOMIS SAYLES FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
International Equity Fund
--------------------------------------------------------------
Year Ended December 31, May 10* to
-------------------------------------------- December 31,
1995 1994 1993 1992 1991
------- ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $11.61 $12.90 $ 9.64 $10.27 $10.00
------ ------ ------ ------ ------
Income from investment operations --
Net investment income ..................................... 0.14 0.15 0.11 0.10 0.08
Net realized and unrealized gain (loss) on investments .... 0.87 (0.38) 3.61 (0.62) 0.29
------ ------ ------ ------ ------
Total from investment operations ...................... 1.01 (0.23) 3.72 (0.52) 0.37
------ ------ ------ ------ ------
Less distributions --
Dividends from net investment income ...................... (0.14) (0.14) (0.10) (0.10) (0.08)
Distributions from net realized capital gains ............. (0.83) (0.92) (0.36) (0.01) 0.00
Distributions from paid-in capital ........................ 0.00 0.00 0.00 0.00 (0.02)
------ ------ ------ ------ ------
Total distributions ................................... (0.97) (1.06) (0.46) (0.11) (0.10)
------ ------ ------ ------ ------
Net asset value, end of period .............................. $11.65 $11.61 $12.90 $ 9.64 $10.27
====== ====== ====== ====== ======
Total return (%) ............................................ 8.7 (1.8) 38.5 (5.1) 3.7
Net assets, end of period (000) ............................. $79,488 $73,189 $56,560 $14,937 $ 6,916
Ratio of operating expenses to average net assets (%) ....... 1.45 1.46 1.50 1.50 1.50**
Ratio of net investment income to average net assets (%) .... 1.16 1.30 1.20 1.64 1.55**
Portfolio turnover rate (%) ................................. 133 116 128 101 109**
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%) .... 1.45 1.46 1.72 2.77 3.66**
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net $ 0.14 $ 0.15 $ 0.09 $ 0.02 $ (0.03)
<FN>
- ----------
(*)Commencement of operations.
(**)Computed on an annualized basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
LOOMIS SAYLES FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Bond Fund
--------------------------------------------------------------
Year Ended December 31, May 16* to
-------------------------------------------- December 31,
1995 1994 1993 1992 1991
------- ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $10.05 $11.37 $10.36 $10.23 $10.00
------ ------ ------ ------ ------
Income from investment operations --
Net investment income .................................... 0.82 0.83 0.84 0.76 0.52
Net realized and unrealized gain (loss) on investments ... 2.32 (1.29) 1.43 0.67 0.36
------ ------ ------ ------ ------
Total from investment operations ..................... 3.14 (0.46) 2.27 1.43 0.88
------ ------ ------ ------ ------
Less distributions --
Dividends from net investment income ..................... (0.82) (0.84) (0.81) (0.76) (0.52)
Distributions in excess of net investment income ......... 0.00 (0.02) 0.00 0.00 0.00
Distributions from net realized capital gains ............ (0.08) 0.00 (0.45) (0.54) (0.13)
------ ------ ------ ------ ------
Total distributions .................................. (0.90) (0.86) (1.26) (1.30) (0.65)
------ ------ ------ ------ ------
Net asset value, end of period ............................. $12.29 $10.05 $11.37 $10.36 $10.23
====== ====== ====== ====== ======
Total return (%) ........................................... 32.0 (4.1) 22.2 14.3 8.9
Net assets, end of period (000) ............................ $255,710 $82,985 $64,222 $18,472 $9,922
Ratio of operating expenses to average net assets (%) ...... 0.79 0.84 0.94 1.00 1.00**
Ratio of net investment income to average net assets (%) ... 8.34 7.92 8.26 7.50 8.97**
Portfolio turnover rate (%) ................................ 35 87 170 101 126**
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%) ... 0.79 0.84 0.94 1.55 1.78**
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net $ 0.82 $ 0.83 $ 0.84 $ 0.70 $ 0.47
<FN>
- ----------
(*)Commencement of operations.
(**)Computed on an annualized basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
LOOMIS SAYLES FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Global Bond Fund
--------------------------------------------------------------
Year Ended December 31, May 10* to
-------------------------------------------- December 31,
1995 1994 1993 1992 1991
------- ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $ 9.82 $11.06 $10.32 $11.38 $10.00
------ ------ ------ ------ ------
Income from investment operations --
Net investment income ..................................... 1.04 0.67 0.54 0.70 0.37
Net realized and unrealized gain (loss) on investments .... 1.31 (1.63) 0.96 (0.60) 1.31
------ ------ ------ ------ ------
Total from investment operations ...................... 2.35 (0.96) 1.50 0.10 1.68
------ ------ ------ ------ ------
Less distributions --
Dividends from net investment income ...................... (0.78) (0.04) (0.49) (0.77) (0.30)
Distributions from net realized capital gains ............. 0.00 0.00 (0.27) (0.39) 0.00
Distributions from capital ................................ 0.00 (0.24) 0.00 0.00 0.00
------ ------ ------ ------ ------
Total distributions ................................... (0.78) (0.28) (0.76) (1.16) (0.30)
------ ------ ------ ------ ------
Net asset value, end of period .............................. $11.39 $ 9.82 $11.06 $10.32 $11.38
====== ====== ====== ====== ======
Total return (%) ............................................ 23.9 (8.7) 14.6 0.8 16.9
Net assets, end of period (000) ............................. $10,304 $25,584 $21,378 $9,968 $4,308
Ratio of operating expenses to average net assets (%) ....... 1.50 1.30 1.50 1.50 1.50**
Ratio of net investment income to average net assets (%) .... 8.17 7.02 5.54 6.99 6.81**
Portfolio turnover rate (%) ................................. 148 153 150 72 137**
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%) .... 1.69 1.30 1.51 2.58 3.99**
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net $ 1.02 $ 0.67 $ 0.54 $ 0.59 $ 0.23
<FN>
- ----------
(*)Commencement of operations.
(**)Computed on an annualized basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
LOOMIS SAYLES FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
U.S. Government Securities Fund
--------------------------------------------------------------
Year Ended December 31, May 21* to
-------------------------------------------- December 31,
1995 1994 1993 1992 1991
------- ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $ 9.22 $10.53 $10.45 $10.77 $10.00
------ ------ ------ ------ ------
Income from investment operations --
Net investment income ..................................... 0.66 0.64 0.64 0.64 0.40
Net realized and unrealized gain (loss) on investments .... 1.42 (1.30) 1.00 0.27 1.11
------ ------ ------ ------ ------
Total from investment operations ........................ 2.08 (0.66) 1.64 0.91 1.51
------ ------ ------ ------ ------
Less distributions --
Dividends from net investment income ...................... (0.66) (0.65) (0.65) (0.59) (0.40)
Distributions from net realized capital gains ............. 0.00 0.00 (0.91) (0.64) (0.34)
------ ------ ------ ------ ------
Total distributions ..................................... (0.66) (0.65) (1.56) (1.23) (0.74)
------ ------ ------ ------ ------
Net asset value, end of period .............................. $10.64 $ 9.22 $10.53 $10.45 $10.77
====== ====== ====== ====== ======
Total return (%) ............................................ 23.0 (6.3) 15.7 8.8 15.3
Net assets, end of period (000) ............................. $19,499 $17,341 $18,317 $10,899 $6,248
Ratio of operating expenses to average net assets (%) ....... 1.00 1.00 1.00 1.00 1.00**
Ratio of net investment income to average net assets (%) .... 6.47 6.60 5.95 6.54 7.01**
Portfolio turnover rate (%) ................................. 169 242 277 344 273**
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%) .... 1.22 1.22 1.29 2.01 2.39**
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net $ 0.64 $ 0.62 $ 0.61 $ 0.54 $ 0.32
<FN>
- ----------
(*)Commencement of operations.
(**)Computed on an annualized basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
LOOMIS SAYLES FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Municipal Bond Fund
--------------------------------------------------------------
Year Ended December 31, May 29* to
-------------------------------------------- December 31,
1995 1994 1993 1992 1991
------- ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $10.41 $11.54 $10.95 $10.55 $10.00
------ ------ ------ ------ ------
Income from investment operations --
Net investment income ..................................... 0.52 0.52 0.51 0.51 0.24
Net realized and unrealized gain (loss) on investments .... 1.16 (1.13) 0.74 0.46 0.56
------ ------ ------ ------ ------
Total from investment operations ........................ 1.68 (0.61) 1.25 0.97 0.80
------ ------ ------ ------ ------
Less distributions --
Dividends from net investment income ...................... (0.52) (0.52) (0.51) (0.51) (0.23)
Distributions from net realized capital gains ............. (0.04) 0.00 (0.15) (0.06) (0.02)
------ ------ ------ ------ ------
Total distributions ..................................... (0.56) (0.52) (0.66) (0.57) (0.25)
----- ----- ----- ----- -----
Net asset value, end of period .............................. $11.53 $10.41 $11.54 $10.95 $10.55
====== ====== ====== ====== ======
Total return (%) ............................................ 16.5 (5.4) 11.6 9.4 8.1
Net assets, end of period (000) ............................. $7,961 $7,270 $5,160 $2,200 $706
Ratio of operating expenses to average net assets (%) ....... 1.00 1.00 1.00 1.00 1.00**
Ratio of net investment income to average net assets (%) .... 4.72 4.79 4.50 4.81 5.03**
Portfolio turnover rate (%) ................................. 41 28 36 32 26**
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%) .... 2.02 2.37 3.22 7.65 21.58**
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net $ 0.41 $ 0.37 $ 0.26 $ (0.19) $ (0.74)
<FN>
- ----------
(*)Commencement of operations.
(**)Computed on an annualized basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
LOOMIS SAYLES FUNDS
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Short-Term Bond Fund
--------------------------------------------------------
Year Ended December 31, August 3* to
----------------------------------- December 31,
1995 1994 1993 1992
------ ------ ------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ......................... $ 9.46 $ 9.95 $ 9.87 $10.00
------ ------ ------ ------
Income from investment operations --
Net investment income ...................................... 0.63 0.66 0.59 0.22
Net realized and unrealized gain (loss) on investments ..... 0.35 (0.49) 0.08 (0.13)
------ ------ ------ ------
Total from investment operations ....................... 0.98 0.17 0.67 0.09
------ ------ ------ ------
Less distributions --
Dividends from net investment income ....................... (0.63) (0.66) (0.59) (0.22)
Distributions from net realized capital gains .............. 0.00 0.00 0.00 0.00
------ ------ ------ ------
Total distributions .................................... (0.63) (0.66) (0.59) (0.22)
------ ------ ------ ------
Net asset value, end of period ............................... $ 9.81 $ 9.46 $ 9.95 $ 9.87
====== ====== ====== ======
Total return (%) ............................................. 10.6 1.8 7.0 0.9
Net assets, end of period (000) .............................. $26,039 $19,440 $15,226 $5,121
Ratio of operating expenses to average net assets (%) ........ 1.00 1.00 1.00 1.00**
Ratio of net investment income to average net assets (%) ..... 6.46 6.88 5.97 5.49**
Portfolio turnover rate (%) .................................. 214 34 81 31**
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%) ..... 1.03 1.33 1.55 3.74**
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net
investment income per share would have been: ............... $ 0.62 $ 0.63 $ 0.54 $ 0.11
<FN>
- ----------
(*)Commencement of operations.
(**)Computed on an annualized basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - December 31, 1995
1. The Loomis Sayles Funds are a group of nine no-load mutual funds (the
"Funds").
Each Fund is a series of Loomis Sayles Funds (the "Trust"). The Trust is a
diversified open-end management investment company organized as a
Massachusetts business trust. The Trust is authorized to issue an unlimited
number of full and fractional shares of beneficial interest in multiple
series.
Each Fund is separately managed and has its own investment objective and
policies. Loomis, Sayles & Company, L.P. ("Loomis Sayles") is the investment
adviser of each Fund.
The Trust consists of the following funds:
FUND FUND
---- ----
Loomis Sayles Growth Fund Loomis Sayles Bond Fund
Loomis Sayles Growth & Income Fund Loomis Sayles Global Bond Fund
Loomis Sayles Small Cap Fund Loomis Sayles U.S. Government Securities Fund
Loomis Sayles International Loomis Sayles Municipal Bond Fund
Equity Fund Loomis Sayles Short-Term Bond Fund
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
The following is a summary of significant accounting policies consistently
followed by each Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
A. SECURITY VALUATION -- Equity securities listed on an established
securities exchange or on the NASDAQ National Market System are normally
valued at their last sale price on the exchange where primarily traded or,
if there is no reported sale during the day, and in the case of over the
counter securities not so listed, at the last bid price. Long-term debt
securities are valued by a pricing service which determines valuations of
normal institutional-size trading units of long-term debt securities. Such
valuations are determined using methods based on market transactions for
comparable securities and on various relationships between securities
which are generally recognized by institutional traders. Other securities
for which current market quotations are not readily available (including
restricted securities, if any) and all other assets are carried at fair
value as determined in good faith by the Board of Trustees, although the
actual calculations may be made by persons acting pursuant to the
direction of the Board.
B. REPURCHASE AGREEMENTS -- The Funds engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Funds
take possession of an underlying debt obligation subject to an obligation
of the seller to repurchase, and the Funds to resell, the obligation at an
agreed-upon price and time, thereby determining yield during the Funds'
holding period. This arrangement results in a fixed rate of return that is
not subject to market fluctuations during the Funds' holding period. The
Funds, through their Custodian, receive the delivery of the underlying
securities collateralizing repurchase agreements. It is the Funds' policy
that the market value of the collateral be at least equal to 100% of the
repurchase price. Loomis Sayles is responsible for determining that the
value of the collateral is at all times at least equal to the repurchase
price. In connection with transactions in repurchase agreements, if the
seller defaults and the value of the collateral declines or if the seller
enters an insolvency proceeding, realization of the collateral by the
Funds may be delayed or limited.
C. FOREIGN CURRENCY TRANSLATION -- The books and records of the Loomis Sayles
International Equity, Global Bond and Bond Funds are maintained in U.S.
dollars. The value of securities, currencies and other assets and
liabilities denominated in currencies other than U.S. dollars is
translated into U.S. dollars based upon foreign exchange rates prevailing
at the end of the period. Purchases and sales of investment securities,
income and expenses are translated on the respective dates of such
transactions.
The results of operations resulting from changes in foreign exchange rates
on investments from fluctuations arising from changes in market prices of
securities held are not isolated. Such fluctuations are included with net
realized and unrealized gain or loss from investments.
Net realized and unrealized gains and losses on foreign currency
transactions represent foreign exchange gains and losses from the sale of
short-term securities and holdings of foreign currencies, foreign currency
gains and losses between trade dates and settlement dates on investment
securities transactions, and the difference between the amounts of daily
interest accruals on the books of the Funds and the amounts actually
received resulting from changes in exchange rates on the payable date.
FORWARD FOREIGN CURRENCY CONTRACTS -- Loomis Sayles International Equity
and Global Bond Funds, upon the purchase or sale of a security denominated
in a foreign currency, may enter into forward foreign currency contracts
for the purchase or sale, for a fixed amount of U.S. dollars, of the
amount of foreign currency involved in the underlying security
transaction. In such cases, the Funds have not realized currency gains or
losses between the trade and settlement dates on these security
transactions.
In addition, a Fund may enter into a forward foreign currency contract to
sell, for a fixed amount, a foreign currency in which securities held are
denominated to hedge against anticipated declines in the value of the
currency it believes may adversely affect the value of the Fund's
portfolio securities.
Forward foreign currency contracts are valued at the forward rate and are
marked-to-market daily. The change in market value is recorded as
unrealized gain or loss. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was
closed.
The use of forward foreign exchange contracts does not eliminate
fluctuations in the underlying price of a Fund's investment securities,
but does establish a rate of exchange that can be achieved in the future.
Although forward foreign currency exchange contracts limit the risk of
loss due to a decline in the value of hedged currency, they also limit any
potential gain that might result should the value of the currency
increase. In addition, the Funds could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their
contracts.
D. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security
transactions are accounted for on the trade date (the date the buy or sell
is executed). Dividend income is recorded on the ex-dividend date and
interest income is recorded on the accrual basis. Interest income is
increased by the accretion of discount and is reduced by the amortization
of premium. In determining net gain or loss on securities sold, the cost
of securities has been determined on the identified cost basis.
E. WHEN-ISSUED SECURITIES -- Delivery and payment for securities purchased on
a when-issued or delayed delivery basis can take place one month or more
after the date of the transactions. The securities so purchased are
subject to market fluctuation during this period. Each Fund instructs the
custodian to segregate assets in a separate account with a current value
at least equal to the amount of its when-issued purchase commitments. At
December 31, 1995 the Funds held no such commitments.
F. FEDERAL INCOME TAXES -- Each Fund is a separate entity for federal income
tax purposes. Each Fund intends to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies, and to
distribute to its shareholders all of its net investment income and any
net realized capital gains. Accordingly, no provision for federal income
tax has been made.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Each of the equity funds
pays its net investment income to shareholders annually. The Bond, Global
Bond and U.S. Government Securities Funds pay their net investment income
quarterly. Distributions from net realized capital gains are declared and
paid on an annual basis by all of the Funds. The Municipal Bond Fund and
Short-Term Bond Fund dividends are declared daily to shareholders of
record at the time and are paid monthly. Income distributions and capital
gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting
principles. These differences are primarly due to differing treatments of
income and gains on various investment securities held by the Funds,
timing differences and differing characterization of distributions made by
the Funds.
H. ORGANIZATION EXPENSE -- Costs incurred in 1991 in connection with the
Funds' organization and registration, amounting to approximately $149,700
in the aggregate, were allocated equally among the Funds, were paid by the
Funds and are being amortized equally by each of the eight funds over 60
months.
In 1992, costs approximating $7,800 were incurred in connection with the
organization and registration of the Short-Term Bond Fund. These costs
were paid by the Fund and are being amortized by the Fund over 60 months.
2. PURCHASE AND SALE OF SECURITIES (excluding short-term investments) for
each Fund for the year ended December 31, 1995 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------------------------- ---------------------------------
FUND U.S. GOVERNMENT OTHER U.S. GOVERNMENT OTHER
---- --------------- ----- --------------- -----
<S> <C> <C> <C> <C>
Growth Fund ................................. $ 20,027,578 $ 23,290,794
Growth & Income Fund ........................ 19,401,936 18,068,377
Small Cap Fund .............................. 88,047,154 99,340,407
International Equity Fund ................... 102,360,662 100,909,513
Bond Fund ................................... $13,262,141 175,118,681 $ 4,573,008 47,690,127
Global Bond Fund ............................ 2,432,957 18,134,459 2,579,781 34,413,234
U.S. Government Securities Fund ............. 22,499,621 6,792,628 27,603,482 1,993,802
Municipal Bond Fund ......................... 3,280,181 2,985,233
Short-Term Bond Fund ........................ 47,675,060 10,201,178 36,324,526 14,797,689
</TABLE>
3. A. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES -- During the
year ended December 31, 1995, the Funds incurred management fees payable
to Loomis Sayles. Certain officers and directors of Loomis Sayles are
also officers or trustees of the Trust. Loomis Sayles is a majority
owned subsidiary of New England Investment Companies, L.P., which is a
subsidiary of New England Mutual Life Insurance Company ("The New
England"). Separate management agreements for each Fund in effect during
the year ended December 31, 1995 provided for fees as set forth below:
<TABLE>
<CAPTION>
FUND FEES EARNED(A) ANNUAL PERCENTAGE RATE
---- -------------- ----------------------
<S> <C> <C>
Growth Fund .................................. $319,009 0.75% of the Fund's average daily net assets
Growth & Income Fund ......................... 243,025 0.75% of the Fund's average daily net assets
Small Cap Fund ............................... 839,470 1.00% of the Fund's average daily net assets
International Equity Fund .................... 781,765 1.00% of the Fund's average daily net assets
Bond Fund .................................... 917,444 0.60% of the Fund's average daily net assets
Global Bond Fund ............................. 106,447 0.75% of the Fund's average daily net assets
U.S. Government Securities Fund .............. 107,664 0.60% of the Fund's average daily net assets
Municipal Bond Fund .......................... 45,872 0.60% of the Fund's average daily net assets
Short-Term Bond Fund ......................... 124,536 0.50% of the Fund's average daily net assets
</TABLE>
(a) Prior to the voluntary expense limitation.
B. Loomis Sayles has voluntarily agreed, for an indefinite period, to
reduce its advisory fees and/or bear other Fund expenses, to the extent
necessary to limit Fund total operating expenses to 1.00% of average
annual net assets for the Bond, Municipal Bond, U.S. Government
Securities and Short-Term Bond Funds and to 1.50% of average annual net
assets for each other Fund. Loomis Sayles may change or terminate these
voluntary arrangements at any time, but the Fund prospectus would be
supplemented at that time to describe the change. Loomis Sayles waived
management fees of $118,940 for the year ended December 31, 1995 and has
borne expenses and fees, other than the compensation of trustees
described in Note 3.D, totalling $31,878.
C. OTHER EXPENSES -- New England Funds, L.P. (a subsidiary of New England
Investment Companies) performs certain administrative, accounting and
other services for the Trust. The expenses of those services, which are
paid to New England Funds, L.P. by the Trust, include the following: (i)
expenses for personnel performing bookkeeping, accounting, internal
auditing, financial reporting functions and clerical functions relating
to the Fund, and (ii) expenses for services required in connection with
the preparation of registration statements and prospectuses, shareholder
reports and reports and questionnaires for SEC compliance. For the year
ended December 31, 1995 these expenses amounted to $86,229 for the nine
Loomis Sayles Funds presented herein and are shown separately in the
financial statements as Accounting and Administrative fees.
D. TRUSTEES FEES AND EXPENSES -- The Trust does not pay any compensation
directly to its officers or trustees who are directors, officers or
employees of Loomis Sayles, The New England or their affiliates. Each
other trustee is compensated by the Trust on behalf of each Fund at the
rate of $1,250 per Fund, per year plus travel expenses for each meeting
attended.
E. SHAREHOLDERS -- At December 31, 1995, Loomis Sayles held 12,612 shares
of beneficial interest in the Municipal Bond Fund. In addition, Loomis
Sayles Funded Pension Plan and Loomis, Sayles & Company, Employees
Profit Sharing Retirement Plan held shares of beneficial interest in the
Funds as follows:
PROFIT
PENSION SHARING
PLAN PLAN
------- --------
Growth Fund .................................. 409,242 818,925
Growth & Income Fund ......................... 553,456 540,175
Small Cap Fund ............................... 258,251 829,986
International Equity Fund .................... 725,592 479,726
Bond Fund .................................... 395,001 930,476
Global Bond Fund ............................. 500,141 171,006
U.S. Government Securities Fund .............. 440,734 192,727
Short-Term Bond Fund ......................... 201,336 338,117
4. CREDIT RISK -- The Bond Fund may invest up to 35% of total net assets in
securities offering high current income which generally will be in the
lower rated categories of recognized rating agencies. These securities are
regarded as predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with the terms of the
obligations and will generally involve more credit risk than securities in
the higher rated categories. In addition, the trading market for high
yield securities may be relatively less liquid than the market for higher-
rated securities.
5. FOREIGN SECURITIES -- The Loomis Sayles International Equity, Bond and
Global Bond Funds purchase securities of foreign issuers. Investing in
securities of foreign companies and foreign governments involves special
risks and consideration not typically associated with investing in U.S.
companies and the U.S. government. The risks include re-evaluation of
currencies and future adverse economic developments. Moreover, securities
of many foreign companies and foreign governments and their markets may be
less liquid and their prices more volatile than those of securities of
comparable U.S. companies and the U.S. government.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND TRUSTEES OF
THE LOOMIS SAYLES FUNDS:
We have audited the accompanying statements of assets and liabilities of
the Loomis Sayles Funds (consisting of the Loomis Sayles Growth Fund, Growth
and Income Fund, Small Cap Fund, International Equity Fund, Bond Fund, Global
Bond Fund, Municipal Bond Fund, U.S. Government Securities Fund and Short-Term
Bond Fund), (collectively, the "Funds"), including the schedules of portfolio
investments and forward foreign currency contracts (Global Bond Fund), as of
December 31, 1995 and the related statements of operations, statements of
changes in net assets and financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1995 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
The Loomis Sayles Funds as of December 31, 1995, the results of their
operations, the changes in their net assets and the financial highlights for
each of the periods indicated therein, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 7, 1996
<PAGE>
- ------------------------------------------------------------------------------
SHAREHOLDER MEETING
At a special shareholders' meeting of the Loomis Sayles Funds held on
December 8, 1995, shareholders approved new investment advisory arrangements
to be effective upon the merger of New England Mutual Life Insurance Company
into Metropolitan Life Insurance Company, such arrangements to be
substantially identical to the investment advisory arrangements for the Series
in effect immediately prior to such merger. In addition, the following persons
were elected members of the Board of Trustees of the Loomis Sayles Funds:
Daniel J. Fuss
Michael T. Murray
Richard S. Holway
Terry R. Lautenbach
Earl W. Foell
The voting results from the meeting are as follows:
<TABLE>
<CAPTION>
APPROVAL OF ADVISORY AGREEMENTS
FOR AGAINST ABSTAIN WITHHOLD
--- ------- ------- --------
<S> <C> <C> <C> <C>
Growth ..................... 1,705,025.203 6,598.629 0.0 1,174,964.126
Growth & Income ............ 1,486,791.999 8,352.837 3,132.856 919,127.146
Small Cap .................. 3,278,058.231 12,075.688 14,137.293 2,137,067.376
International Equity ....... 3,611,112.512 1,343.749 381,370.103 2,477,898.939
Bond ....................... 12,780,482.016 63,259.864 243,594.721 4,861,889.730
Global Bond ................ 706,448.178 8.811 222.420 115,066.396
U.S. Government Securities . 1,143,324.004 4,384.827 1,249.204 760,876.087
Municipal Bond ............. 404,140.910 12,630.436 7,569.918 278,753.682
Short-Term Bond ............ 1,793,656.734 256.937 240.000 1,117,178.171
<CAPTION>
ELECTION OF TRUSTEES
FOR AGAINST ABSTAIN WITHHOLD
--- ------- ------- --------
<S> <C> <C> <C> <C>
Daniel J. Fuss ............. 27,540,914.396 128,553.684 0 13,842,821.658
Michael T. Murray .......... 27,543,008.720 126,459.360 0 13,842,821.658
Richard S. Holway .......... 27,540,745.242 128,722.838 0 13,842,821.658
Terry R. Lautenbach ........ 27,543,413.743 126,054.337 0 13,842,821.658
Earl W. Foell .............. 27,530,194.827 139,273.253 0 13,842,821.658
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
BOARD OF TRUSTEES
EARL W. FOELL
DANIEL J. FUSS
RICHARD S. HOLWAY
TERRY R. LAUTENBACH
MICHAEL T. MURRAY
OFFICERS
PRESIDENT
DANIEL J. FUSS
VICE PRESIDENTS TREASURER AND SECRETARY
ROBERT J. BLANDING MARK W. HOLLAND
JEROME A. CASTELLINI
MARY C. CHAMPAGNE ASSISTANT TREASURERS
E. JOHN DEBEER LOUIS T. BALLERENE
PAUL H. DREXLER PETER H. DUFFY
QUENTIN P. FAULKNER
MARTHA F. HODGMAN ASSISTANT SECRETARY
JOHN HYLL LAURIE M. GALLAGHER
FRANK E. JEDLICKA
JEFFREY L. MEADE
KENT P. NEWMARK
JEFFREY C. PETHERICK
JEFFREY W. WARDLOW
JOHN F. YEAGER III
<PAGE>
INVESTMENT ADVISER
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111
TRANSFER AND
DIVIDEND PAYING AGENT
AND CUSTODIAN OF ASSETS
State Street Bank and Trust Company
Boston, Massachusetts 02102
SHAREHOLDER SERVICING AGENT
FOR STATE STREET BANK
AND TRUST COMPANY
Boston Financial Data Services, Inc.
P.O. Box 8314
Boston, Massachusetts 02266
For information about:
o Establishing an account
o Account procedures and status
o Exchanges
o Shareholder services
Call 800-626-9390
For all other information about the Funds:
Call 800-633-3330
This report has been prepared for the shareholders of the Funds and is
not authorized for distribution to prospective investors in the Funds
unless it is accompanied or preceded by an effective prospectus.
[LOGO]
LOOMIS SAYLES FUNDS
A FAMILY OF NO-LOAD FUNDS
ANNUAL
REPORT
DECEMBER 31, 1995
ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02111
(617) 482-2450
