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LOOMIS SAYLES FUNDS(TM)
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LOOMIS SAYLES EQUITY FUNDS
SEMI-ANNUAL REPORT
JUNE 30, 1997
A FAMILY OF NO-LOAD FUNDS
ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02111
(617) 482-2450
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LOOMIS SAYLES FUNDS
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[photo of
Daniel J. Fuss]
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Daniel J. Fuss
DEAR SHAREHOLDERS:
Let's talk about peace, oceans, teenagers, hockey players and crocodiles.
THE WORLD IS AT PEACE
The world is a peaceful place and that is good for investing money. While there
are many local wars, there is no large-scale war, hot or cold, on the horizon.
Because of that, it is a little easier for the national governments to balance
their budgets. Also, there are some significant changes occurring in worldwide
population distribution, as we collectively age. Out of this, a new political
order is evolving that is fundamentally good for investing money.
THERE'S AN OCEAN OF LIQUIDITY
The global economy is chugging along, but not at a pace that can use up the
ocean of liquidity that exists in the world today. Normally, at this phase of
the economic cycle, signs of inflation start to occur. None of those signs are
evident now, so it doesn't look like this ocean will dry up anytime soon.
THE ECONOMY IS ABOUT TO BECOME A TEENAGER
This phenomenon has placed the Federal Reserve and other central banks in a
position similar to parents with a child about to become a teenager. Those
parents know what is to come; the central banks know too what's coming. However,
the economic evidence isn't apparent to all. It's only the point in the cycle
that tells the central banks to prepare for the worst. But the banks really
don't have the political and popular support to raise interest rates to help dry
up some of this excess liquidity. Therefore, they wait.
AND THE HOCKEY PLAYERS ARE CAUSING MISCHIEF
Meanwhile in the markets, the hockey players are going full tilt. Environments
like this, with ample liquidity and few serious worries, lead to all sorts of
mischief. The hockey players are finding many ways to add incremental return.
Many are borrowing a lot of money and putting it into the market. The most
prominent example of this is the so-called "yen/dollar carry trade", where
people borrow short term funds in yen and invest in longer term dollar
denominated assets. Another variation is extending the "collateralized bond
obligation" format to high yield bonds. Another risk is the possible outcome
from the so-called "virtual hedging" techniques, where plans are made to sell
stocks when the market declines past a certain point. None of these strategies
are intrinsically bad, but they do introduce more risk into the market.
All of this push for yield and return has narrowed the valuation differences in
most markets. That is, there isn't that much to choose between one type of
investment and another. This has caused certain areas of the market to get quite
pricey relative to where they used to be. Nevertheless, it is a peaceful time
and perhaps some of these valuations aren't so extreme after all.
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MEANWHILE, THE CROCODILES LAY IN WAIT
A really powerful "market message" statement would be nice for this letter. I
don't have one. However, I am reminded of an old Malaysian saying, "just because
the river is quiet does not mean the crocodiles have left." There are definitely
crocodiles out there. Whether or not they will surface remains to be seen. We're
keeping a sharp eye out for them. Until they do, it remains a good time to
invest.
Thanks for investing with us.
Sincerely,
/s/Daniel J. Fuss
Daniel J. Fuss
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[photo of
John F. Yeager, III
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John F. Yeager, III
DEAR SHAREHOLDERS:
Some years are just more eventful than others. For Loomis Sayles Funds, the past
six months have seen growth, innovations in product and distribution, as well as
some important service enhancements. We're excited about what we've been doing
and believe the months to come hold great promise. I'd like to take the
opportunity of this semi-annual report to share with you some of our recent
achievements.
If you've been with us for some time, you will probably notice that we have
varied the look of this report. We have changed the layout of the financials and
redesigned the Fund commentary, with the intent of making the report more
readable and allowing you to get to know us better. We invite your comments
about this change.
PRODUCT AND GROWTH
This year, we brought six new Funds into our Family - Investment Grade Bond,
Small Cap Growth, Mid-Cap Value, Mid-Cap Growth, Strategic Value and
Intermediate Maturity Bond Funds. If you are not already familiar with these
Funds, I invite you to read about them and meet their managers through our
semi-annual reports.
Not only has our Fund family expanded, but our assets under management have
grown. Within the past six months, assets under management of the Loomis Sayles
Funds have increased over 40%. Our Funds have all performed well over the past
several years. Year to date (June 30, 1997), eleven of our Funds are ranked in
the top half of their Lipper category and seven of those are also ranked in the
top quartile.
DISTRIBUTION
Loomis Sayles is committed to one business: investment counsel. We focus our
efforts on bringing to our Funds highly trained investment professionals, the
best proprietary research and consistency of style. We feel that we can be most
effective by concentrating on investment management and delivering our Funds to
you by working in partnership with various financial intermediaries. We find,
too, that more and more of the investing public likes the service and
convenience of using intermediaries, such as financial advisors, discount
brokers and retirement plans. This allows us to concentrate on what we do best,
investment management, and let others do what they do best. We leverage this to
your advantage, with improved service and lower costs.
This year, we made two important structural changes. We've added a Retail Class
and lowered the management fees on most of our existing Funds. Our Retail Class
is available through various non transaction fee and wrap programs. The
Institutional Class is available direct to investors investing at least
$1,000,000, as well as through many investment professional programs, which
require a small transaction charge. Should you not find our Funds listed with
your preferred intermediary, please call us, so that we may work to add them to
our list of partners. So far this year, we have added several new relationships
with intermediaries, including Merrill Lynch, NationsBanc, Oppenheimer and Paine
Webber.
SERVICE
We have several important goals for the year, including providing you with
superior service and enhanced communications. We want you to have the ability to
easily obtain the information you need about our Funds quickly and accurately.
We recently installed a new voice response system so you can request literature
and a prospectus, review Net Asset Values (NAVs), or ask questions of a
marketing representative. Directions for using the system are included on the
back cover of this report.
We plan to increase our level of communications with you and other shareholders
of the Loomis Sayles Funds. To this end, we are expanding the variety of avenues
of communications over the next year, including the addition of newsletters,
expanded fund analysis, economic and market commentaries, and a website. We will
keep you posted.
PROMISE
We see the next six months and the years ahead to be filled with promise for the
Loomis Sayles Funds. We are excited about our current Funds, while we constantly
look to add new fund offerings. With the resources of an investment management
organization with $56 billion in assets under management, we are confident of
our ability to continue to provide you with the superior investment management
and service you have come to expect.
Most importantly, we are glad to have you with us. Thank you for your
confidence.
Sincerely,
/s/John F. Yeager, III
John F. Yeager, III
President
Loomis Sayles Distributors, L. P.
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LOOMIS SAYLES EQUITY FUNDS
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TOTAL RETURN(1) vs. LIPPER CATEGORY(2) -- (Unaudited)
Core International
Value Growth Equity
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YEAR TO DATE/6 MONTHS
Loomis Sayles ............. 17.88 8.78 9.57
Lipper .................... 15.52 14.28 12.53
Rank ...................... 153 of 626 733 of 840 342 of 417
Percentile ................ 24 87 82
ONE YEAR
Loomis Sayles ............. 33.32 16.23 20.05
Lipper .................... 28.07 23.96 16.54
Rank ...................... 79 of 544 625 of 761 96 of 368
Percentile ................ 15 82 26
THREE YEARS
Loomis Sayles ............. 24.77 21.19 12.04
Lipper .................... 23.54 22.86 10.86
Rank ...................... 131 of 344 340 of 474 78 of 200
Percentile ................ 38 72 39
FIVE YEARS
Loomis Sayles ............. 18.81 16.21 10.97
Lipper .................... 17.25 16.90 12.33
Rank ...................... 60 of 216 176 of 280 62 of 91
Percentile ................ 28 63 68
MODIFIED INCEPTION(3)
Loomis Sayles ............. 16.12 13.67 11.10
Lipper .................... 15.55 15.13 10.96
Rank ...................... 76 of 191 173 of 237 31 of 63
Percentile ................ 40 73 49
ACTUAL INCEPTION(4)
Loomis Sayles ............. 16.98 14.76 10.89
Note: Past performance is not indicative of future performance.
(1) Total return assumes reinvestment of dividends and capital gains
distributions. Total return shown for periods of one year or less
represents cumulative total return. Total return for periods greater than
one year represents average annual total return. Total return shown (other
than 1 and 3 year periods for the Growth, Core Value, Small Cap Value and
Bond Funds, and the 1 year period for the International Equity Fund)
reflect the effect of fee waivers and/or expense reimbursements. Absent
such fee waivers and/or expense reimbursements, total return would have
been lower.
(2) Lipper category total return represents the average total return for all
funds in each Fund's corresponding investment category, as determined by
Lipper Analytical Service, Inc. Rankings are based on the total return of
each fund for the period from its modified inception relative to the total
return of all funds in that Fund's corresponding investment category*.
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LOOMIS SAYLES EQUITY FUNDS
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Mid-Cap Mid-Cap Small Cap Small Cap Strategic
Growth Value Growth Value Value Worldwide
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7.20 13.70 2.80 13.00 16.30 5.08
8.97 8.97 8.99 8.99 14.28 9.55
158 of 235 43 of 235 378 of 467 141 of 467 331 of 843 81 of 87
67 18 81 30 39 93
NA NA NA 27.14 NA 13.43
13.71 17.29
75 of 405 67 of 80
19 84
NA NA NA 25.60 NA NA
22.02
56 of 244
23
NA NA NA 21.39 NA NA
18.65
26 of 113
23
7.20 13.70 2.80 21.16 16.30 13.76
8.97 8.97 8.99 16.70 14.28 17.48
158 of 235 43 of 235 378 of 467 9 of 84 331 of 843 63 of 79
67 18 81 11 39 80
7.20 13.70 2.80 21.38 16.30 12.54
(3) Periods over one year are annualized. Modified inception reflects the
nearest Lipper reporting period following actual inception. Lipper
performance is reported as of month end.
(4) Actual Inception Dates:
Core Value Fund May 13, 1991
Growth Fund May 16, 1991
International Equity Fund May 10, 1991
Mid-Cap Growth Fund January 2, 1997
Mid-Cap Value Fund January 2, 1997
Small Cap Growth Fund January 2, 1997
Small Cap Value Fund May 13, 1991
Strategic Value Fund January 2, 1997
Worldwide Fund May 1, 1996
*Source: Lipper Analytical Services
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LOOMIS SAYLES CORE VALUE FUND
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Photo of
Jeffrey W. Wardlow
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Jeffrey W. Wardlow
PERFORMANCE SUMMARY
The Loomis Sayles Core Value Fund returned 17.88% for the first half of 1997, as
compared with 20.60% for the S&P 500 Index and 15.52% for the Lipper Growth &
Income Fund category average.
MARKET ENVIRONMENT
Despite a brief setback early in the year when the Federal Reserve increased the
Federal Funds Rate, the bull market has moved to new highs in 1997. Investors'
concerns about rising inflation were relieved with recent economic reports that
suggest a slowing economic growth rate. Corporate profits and profit margins are
at record levels. Given these positive underpinnings, money has continued to
flow into the stock market, particularly the large-cap growth stocks. The best
performing sectors for the first six months of the year were health care and
financials. Technology stocks also performed well despite significant volatility
within that group. The utilities and basic materials sectors brought in the
weakest returns for the period.
LOOMIS SAYLES CORE VALUE FUND
Cumulative Performance May, 1991(a) to June 30, 1997
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Average Annual Returns (%) - Period Ended June 30, 1997
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Since
1 year 3 years 5 years Inception
Loomis Sayles Core Value Fund
(I class) 33.32 24.77 18.81 16.12
Lipper Average Growth &
Income Fund(b) 28.07 23.54 17.25 15.55
S&P 500 Index(c) 34.68 28.83 19.76 17.49
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Dates Loomis Lipper S&P 500
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1991 10.00 10.00 10.00
9.43 9.54 9.54
9.72 10.10 10.05
10.16 10.70 10.89
1992 10.46 10.69 10.62
10.48 10.82 10.82
10.67 11.12 11.16
11.59 11.73 11.72
1993 12.18 12.43 12.23
12.11 12.59 12.29
12.43 13.15 12.61
12.97 13.45 12.90
1994 12.78 13.01 12.41
12.78 13.08 12.46
13.33 13.62 13.07
12.85 13.39 13.07
1995 14.21 14.44 14.34
15.49 15.63 15.71
16.68 16.80 16.96
17.38 17.57 17.98
1996 18.24 18.57 18.94
18.62 19.05 19.79
19.28 19.67 20.40
21.06 21.21 22.10
1997 21.56 21.56 22.69
24.82 24.58 26.65
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Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Core Value Fund is May 13, 1991. Since
Lipper performance data is not available coincident with this date,
comparative performance is presented from May 31, 1991.
(b): Source: Lipper Analytical Services
(c): S&P 500 is a capitalization-weighted, total return index comprised of 500
widely held common stocks, representing industrial, utility,
transportation, and financial companies traded on the New York Stock
Exchange, the American Stock Exchange and in the Over-the-Counter market.
The index returns have not been reduced for ongoing management and
operating expenses applicable to mutual fund investments.
PORTFOLIO CHARACTERISTICS
The Fund invests in companies that appear undervalued based on projected
earnings, cash flow, or asset value. We are frequently attracted to industries
or companies that are undergoing consolidation or are at a cyclical turning
point. While this approach tends to lead to certain sectors of the market, we
also take measures to make sure that the portfolio is fully diversified.
The Fund's performance in 1997 has been positively impacted by the strong
performance of our healthcare holdings, such as Bristol Myers, Tenet Health
Care, McKesson, and Schering-Plough. Takeover activity has also had a positive
impact with ADT Ltd., McDonnell Douglas, and more recently, Northrop Grumman,
all receiving premium takeover offers. Perhaps the most significant negative
impact on performance this year has stemmed from our value approach, which has
kept us out of market leaders such as General Electric, Microsoft, Coca-Cola,
Merck, and Procter & Gamble. As a group, these five companies, which account for
over 10% of the S&P 500 Index, were up 40% over the last six months and now sell
at an average 35 times projected earnings. While these companies have posted
strong earnings growth, their valuation appears high in an absolute sense as
well as relative to many other quality companies. By comparison, the typical
stock in the Core Value Fund sells at less than 17 times projected earnings.
PORTFOLIO POSITIONING
The Fund's investment position remains fairly diversified among industry
groupings, with some emphasis on the industrial and basic material sectors. We
have reduced our position in financial stocks, which currently appear more
fairly priced after several years of strong performance. In keeping with our
philosophy of not attempting to time the market, we remain fully invested in
stocks. We are, however, mindful of the increasing risk in the market after the
100% return generated by the S&P 500 Index during the past 2 1/2 years, which is
substantially above its historical average return.
/s/ Jeffery W. Wardlow
Jeffrey W. Wardlow
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LOOMIS SAYLES GROWTH FUND
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Photo of
Jerome A. Castellini
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Jerome A. Castellini
PERFORMANCE SUMMARY
For the first six months of 1997, the Loomis Sayles Growth Fund's 8.78% return
lagged the 20.60% return of the S&P 500 Index. While the Fund lagged the Lipper
Growth category's average return of 14.28%, results were in line with the Lipper
Mid Cap category's average return of 8.97%. In this market, avoiding the highly
priced but hot stocks, which were also the largest capitalization stocks, proved
to be a drag on performance.
Our position in smaller, emerging growth stocks dampened results. As in 1996,
the market favored a few large capitalization stocks for their liquidity and
perceived lower risk. Mid- and smaller- capitalization companies were sold off
or neglected, often despite strong fundamentals. In May and June, the Fund's
performance improved as these emerging sectors began to recover.
LOOMIS SAYLES GROWTH FUND
Cumulative Performance May, 1991(a) to June 30, 1997
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Average Annual Returns (%) - Period Ended June 30, 1997
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Since
1 year 3 years 5 years Inception
Loomis Sayles Growth Fund (I class) 16.23 21.19 16.21 13.67
Lipper Average Growth Fund(b) 23.96 22.86 16.90 15.13
S&P 500 Index(c) 34.68 28.83 19.76 17.49
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Dates Loomis Lipper S&P 500
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1991 9.29 9.41 9.54
10.75 10.20 10.05
11.69 11.10 10.90
1992 10.79 10.93 10.62
10.29 10.71 10.82
10.64 10.99 11.16
12.14 11.95 11.72
1993 12.45 12.31 12.23
12.78 12.49 12.29
13.49 13.09 12.61
13.26 13.38 12.90
1994 12.74 12.98 12.41
12.25 12.70 12.46
12.77 13.32 13.07
12.78 13.17 13.07
1995 13.63 14.13 14.34
15.18 15.64 15.71
16.67 17.06 16.96
16.72 17.47 17.98
1996 17.26 18.26 18.94
18.76 18.87 19.79
19.00 19.40 20.40
20.05 20.53 22.10
1997 19.39 20.46 22.69
21.80 23.69 26.65
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Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Growth Fund is May 16, 1991. Since
Lipper and S&P 500 performance data is not available coincident with this
date, comparative cumulative performance is presented from May 31, 1991.
(b): Source: Lipper Analytical Services
(c): S&P 500 is a capitalization-weighted, total return index comprised of 500
widely held common stocks, representing industrial, utility,
transportation, and financial companies traded on the New York Stock
Exchange, the American Stock Exchange and in the Over-the-Counter market.
The index returns have not been reduced for ongoing management and
operating expenses applicable to mutual fund investments.
MARKET ENVIRONMENT
The first half of 1997 was a strong period for the U. S. stock market as the
"best of all worlds" psychology continued in the economy and financial markets.
Economic activity slowed from the unsustainable pace experienced in the early
part of the year and, as a result, the Federal Reserve chose to remain neutral
in its policy decisions. Bond yields were stable to declining, inflation
remained well-contained, and corporate profits exceeded expectations. These
ideal conditions led to further records for the S&P 500 Index and a strong
recovery in the broader market towards the end of the second quarter.
PORTFOLIO CHARACTERISTICS
Stock market activity in the first half of the year was a virtual clone of the
previous two years. The market continued to be defensive, favoring larger
capitalization issues for their greater liquidity and perceived lower risk
characteristics. As a result, the Fund benefited from its holdings in premier
growth companies like Microsoft, Schlumberger, Eli Lilly, Philip Morris, MGIC
and Halliburton.
Despite the positive returns for large cap stocks, emerging growth companies
suffered weak performance during this period, irrespective of strong underlying
company-specific operating performance. Our allocations to the consumer, energy,
and financials sectors aided performance for the period. Sectors that detracted
from performance were capital goods, basic materials and utilities. Fortunately,
these weaker sectors were materially underweighted in the Fund.
PORTFOLIO POSITIONING
We believe that the economy will continue to slow later this year. High consumer
debt levels, lower capital goods backlogs and a stronger dollar may all act to
moderate economic activity and corporate profit growth over the next six to
twelve months. This scenario should favor companies with inherent growth
opportunities and dominant worldwide growth franchises--hallmarks of the Loomis
Sayles Growth Fund.
We have not changed the sector weightings in the Fund materially and continue to
favor companies with less economic sensitivity (healthcare, consumer products
and energy) and strong inherent unit growth opportunities (technology).
Industrial, basic materials and capital goods sectors continue to be
de-emphasized in the current environment.
Our tactical decision to increase exposure to the emerging growth sector has not
provided the benefit we expected to date, but we continue to believe that these
stocks offer better opportunities for future appreciation and have maintained
our exposure in this area.
/s/ Jerome A. Castellini
Jerome A. Castellini
<PAGE>
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
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Photo of
Paul H. Drexler
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Paul H. Drexler
PERFORMANCE SUMMARY
The net asset value of the Loomis Sayles International Equity Fund rose 9.57% in
the first half of 1997. The period was marked by strong gains in many foreign
stock markets, although for U.S. investors, returns were partially offset by
weak foreign currencies.
MARKET ENVIRONMENT
For the first half of the year, foreign stocks benefited from a gradual economic
recovery in Europe and Japan. Improved revenue growth, along with widespread
corporate restructuring and cost cutting, have led to significant improvements
in profitability. In addition, the stronger U.S. dollar has also helped improve
the competitiveness of foreign companies in global markets. These positive
developments, combined with low interest rates, are creating an attractive
environment for foreign stocks.
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
Cumulative Performance May, 1991(a) to June 30, 1997
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Average Annual Returns (%) - Period Ended June 30, 1997
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Since
1 year 3 years 5 years Inception
Loomis Sayles International Equity
Fund (I class) 20.05 12.04 10.97 11.10
Lipper Average International
Equity Fund(b) 16.54 10.86 12.33 10.96
MSCI-EAFE Index(c) 12.84 9.12 12.83 8.94
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Dates Loomis Lipper MSCI
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1991 10.00 10.00 10.00
9.51 9.48 9.27
10.41 10.09 10.06
10.42 10.23 10.23
1992 10.89 10.02 9.01
11.27 10.47 9.20
10.58 9.91 9.34
9.89 9.79 8.98
1993 10.82 10.63 10.06
11.05 11.21 11.07
12.21 12.29 11.81
13.71 13.62 11.91
1994 13.71 13.48 12.32
13.49 13.60 12.95
13.71 14.12 12.97
13.46 13.52 12.83
1995 13.75 13.19 13.07
14.84 13.86 13.17
14.85 14.61 13.72
14.63 14.88 14.27
1996 15.31 15.53 14.69
15.80 16.17 14.92
16.01 16.18 14.90
17.31 17.02 15.14
1997 17.36 17.45 14.90
18.97 19.41 16.83
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Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles International Equity Fund is May 10,
1991. Since Lipper performance data is not available coincident with this
date, comparative performance is presented from May 31, 1991.
(b): Source: Lipper Analytical Services
(c): MSCI-EAFE Index is a capitalization-weighted average of the performance 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.
PORTFOLIO CHARACTERISTICS
For the first half of the year, the Fund's performance lagged the 11.21% rise in
the Morgan Stanley Capital International EAFE Index, a broad measure of stock
performance in Europe, Australia and the Far East. Our positions in Thailand and
Singapore posted negative returns, while Norway and New Zealand showed only
modest gains.
The Fund achieved strong gains in Brazil (up approximately 36% in U.S. dollar
terms), Portugal (30%), and Spain (21%). Brazil benefited from a wide-ranging
privatization program of government-owned companies, which has greatly improved
competitiveness and provided very attractive investment opportunities. Spain and
Portugal advanced on the back of rising corporate profits and lower interest
rates.
PORTFOLIO POSITIONING
We continue to pursue the best value opportunities we can find in foreign stock
markets, while limiting risk through a disciplined diversification strategy. The
Fund is well-diversified across both large and smaller developed nations, and
provides some exposure to emerging and recently developed countries. While our
underweighting in Japan's strong market hindered returns for the first half of
1997, it has helped returns over the long haul. The Fund's well-diversified
strategy makes us reluctant to match Japan's 30% weighting in the MSCI EAFE
Index.
Our search for value can be hazardous as well as rewarding. On a recent visit
to Mexico City, a flash flood and an eruption of ashes from the local
volcano--known familiarly as "El Popo"-- made for an interesting visit. While
the excitement of foreign travel can wear off after such a trip, we believe
there is no substitute for getting to know companies through first-hand
research.
/s/ Paul H. Drexler
Paul H. Drexler
<PAGE>
LOOMIS SAYLES MID-CAP GROWTH FUND
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- --------------------
Photo of
Jerome A. Castellini
- --------------------
Jerome A. Castellini
- --------------------
Photo of
Scott S. Pape
- --------------------
Scott S. Pape
PERFORMANCE
For the first half of 1997, the Mid-Cap Growth Fund produced a total return of
7.20%. While the Fund lagged the S&P 500 Index's 20.60% return, its performance
was in line with Lipper's Mid Cap category average return of 8.97%.
MARKET ENVIRONMENT
The U.S. stock market soared to new highs during the first half of 1997. Second
quarter returns were tempered as the economy cooled down a bit and interest
rates began to fall. The S&P 500 Index finished up the second quarter with
record-breaking highs while the broader market experienced a strong recovery
towards the end of the period. Overall, investors continued to favor large-cap
stocks due to their liquidity and perceived lower risk. The small- cap market
was hit fairly hard at the beginning of the year, particularly in the growth
sector.
PORTFOLIO CHARACTERISTICS
The U.S. stock market's large-cap bias resulted in strong returns across the
board for larger, growth-oriented companies. As a result, the Fund benefited
from its holdings in larger companies such as Starbucks, Student Loan Marketing,
Eli Lilly, Dell Computer, MGIC and Halliburton.
Emerging growth companies posted weak returns during this period, even though
many possessed strong company-specific fundamentals. The Fund's allocations to
the consumer, energy, and financials sectors positively contributed to
performance for the period. Our performance was hindered somewhat by our
investments in the capital goods, basic materials and utilities sectors.
Fortunately, the Fund's weaker performing sectors were underweighted.
PORTFOLIO POSITIONING
We believe that as the year progresses, the economy will continue to slow. High
consumer debt levels, lower capital goods backlogs and a stronger dollar may all
act to moderate economic activity and corporate profit growth over the next six
to twelve months.
We continue to favor companies with less economic sensitivity (healthcare,
consumer products and energy) and attractive inherent unit growth opportunities
(technology) and have left the portfolio's sector weightings largely unchanged.
We have maintained our underweightings in the industrial, basic materials and
capital goods sectors.
Our increased exposure to the emerging growth sector has not provided the
results we expected this year. However, we continue to maintain our exposure in
these areas because we believe these stocks offer attractive opportunities for
future appreciation.
/s/ Jerome A. Castellini /s/ Scott S. Pape
Jerome A. Castellini Scott S. Pape
<PAGE>
LOOMIS SAYLES MID-CAP VALUE FUND
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- --------------------
Photo of
Jeffrey C. Petherick
- --------------------
Jeffrey C. Petherick
- --------------------
Photo of
Gregg D. Watkins
- --------------------
Gregg D. Watkins
PERFORMANCE SUMMARY
The Loomis Sayles Mid-Cap Value Fund achieved a 13.70% total return for the
first six months of 1997, just ahead of the 13.04% gain recorded by the S&P
Mid-Cap Index, and significantly greater than the 8.97% return for the average
fund in Lipper's Mid Cap category.
MARKET ENVIRONMENT
During the first half of the year, large-cap growth stocks significantly
outdistanced value stocks. Mid-cap growth stocks, as measured by the S&P Mid-
Cap Growth Index, returned 14.51%, while the mid-cap value universe, as measured
by the S&P Mid-Cap Value Index, which provides the raw material for the Mid-Cap
Value Fund, advanced by only 11.65%. Given this handicap, we are quite pleased
to have been able to exceed the return of the combined S&P Mid- Cap Index.
PORTFOLIO CHARACTERISTICS
The Fund's positive performance for the first half of the year was due to
favorable decisions for both sector weightings and individual stock selection.
We were overweighted in the consumer discretionary sector, which has performed
well, and somewhat underweighted in the technology and utility groups, both of
which lagged considerably. Our lighter weighting in utility issues served to
offset the weak showing by our financial services stocks, where our Real Estate
Investment Trust (REIT) holdings, among others, held us back. In general, our
security selection was good, with positive relative results in the majority of
industry groups. Particularly large gains were delivered by Everest Reinsurance,
Falcon Drilling, Integrated Health Services and Keystone International.
PORTFOLIO POSITIONING
Looking forward, we believe it is likely that small- and mid-cap stocks will
begin to move ahead of the large-cap market. For the past three years, small and
mid-cap stocks have underperformed while large-cap earnings growth improved
dramatically. There is no doubt that the restructuring activity in the large
companies during 1993 had a strong effect on profitability in 1994 and 1995. In
addition, a weak dollar helped the multinational companies the most. The dollar
began to rise in early 1997 and is now back at levels seen five years ago. The
large companies no longer have this wind at their backs and, in fact, it might
even be shifting to the front of them. In this environment, mid-sized and
smaller company earnings growth issues will look much more attractive and should
draw the attention of investors.
/s/ Jeffrey C. Petherick /s/ Gregg D. Watkins
Jeffrey C. Petherick Gregg D. Watkins
<PAGE>
LOOMIS SAYLES SMALL CAP GROWTH FUND
- -------------------------------------------------------------------------------
- --------------------
Photo of
Christopher R. Ely
- --------------------
Christopher R. Ely
- --------------------
Photo of
Philip C. Fine
- --------------------
Philip C. Fine
- --------------------
Photo of
David L. Smith
- --------------------
David L. Smith
PERFORMANCE
For the first six months of the year, the Loomis Sayles Small Cap Growth Fund
gained 2.80%, lagging the 5.23% return of the Russell 2000 Growth Index. Broader
market indexes, which are heavily dominated by large capitalization stocks,
posted much stronger results with the S&P 500 Index gaining 20.60% for the first
half of the year. Returns for the first and second quarters differed
dramatically. In the first quarter, the Fund declined 14.90% versus a 10.49%
decline for the Russell 2000 Growth Index. In the second quarter, the Fund
rebounded sharply gaining 20.80% while the Russell 2000 Growth Index rose
17.55%.
MARKET ENVIRONMENT
The first half of 1997 was a period of contrast for investors in small cap
growth stocks. The year began with a sharp correction as investors reacted to
several concerns. Key among these was the fear that strong economic growth would
result in accelerating inflation and rising interest rates. Concerns about the
sustainability of corporate earnings growth, particularly in the technology
sector, led to a broad sell-off of small cap stocks at the end of the first
quarter. This was exacerbated by the lower levels of liquidity inherent in small
cap stocks. By late April, the correction had significantly reduced valuation
levels in the small cap growth sector. When it became evident that strong
economic growth and low inflation could continue without a significant rise in
interest rates, the market rallied with share prices jumping from their April
lows to produce a strong finish for the second quarter.
PORTFOLIO CHARACTERISTICS
The Fund focuses on investing in small, rapidly growing companies. Many of these
companies offer leading edge technologies or new services that place them in a
leadership position in their marketplace. We believe that these are well-managed
companies with rising profitability and strong balance sheets to fund their
rapid growth. The Fund is fully invested (typically less than 5% cash) at all
times and avoids "market timing." As a result, the Fund's style may at times
result in more short-term volatility. This was the case in the first half of
1997, when small cap growth stocks fell temporarily out of favor with investors,
resulting in disappointing first quarter performance for the Fund. However, we
did not deviate from our small growth charter. Indeed, we used the correction in
small cap growth stocks to upgrade the quality of the Fund's portfolio by
purchasing shares in several high quality growth companies at very attractive
prices. We believe that staying focused on our market and upgrading during the
correction set the stage for the strong second quarter performance.
PORTFOLIO POSITIONING
Our approach is focused on individual stock selection rather than on sector or
industry selection. Consequently, the Fund's industry and sector weightings tend
to shift over time. Currently, the Fund's largest sector is technology. The Fund
also has significant exposure to healthcare, financial services, business
services, energy and retailing.
We are pleased that small cap growth stocks are again appreciating along with
the rest of the market. The strength and broad-based nature of the May/June
rally suggests that the current favorable environment could persist for some
time to come. We believe we have positioned the Fund to participate in any
further small cap market advances.
/s/ Christopher R. Ely /s/ Philip C. Fine
Christopher R. Ely Philip C. Fine
/s/ David L. Smith
David L. Smith
<PAGE>
LOOMIS SAYLES SMALL CAP VALUE FUND
- -------------------------------------------------------------------------------
- -------------------- --------------------
Photo of Photo of
Mary Champagne Jeffry C. Petherick
- -------------------- --------------------
Mary Champagne Jeffry C. Petherick
PERFORMANCE
The Loomis Sayles Small Cap Value Fund performed well in the first six months of
1997, returning 13.00% versus the 10.20% return for the Russell 2000 Index. The
average small cap fund fared worse than the market, returning only 8.99% as
measured by the Lipper Small Cap category average. The small cap market was hit
fairly hard at the beginning of the year, especially in the growth sector. When
the market bounced back in May and June, the Fund participated in the upswing,
although not as strongly as some of the growth oriented funds that had suffered
setbacks in the first quarter.
LOOMIS SAYLES SMALL CAP VALUE FUND
Cumulative Performance May, 1991(a) to June 30, 1997
- -------------------------------------------------------------------------------
Average Annual Returns (%) - Period Ended June 30, 1997
- -------------------------------------------------------------------------------
Since
1 year 3 years 5 years Inception
Loomis Sayles Small Cap Value
Fund (I class) 27.14 25.60 21.39 21.16
Lipper Average Small Company
Growth Fund(b) 13.71 22.02 18.65 16.70
Russell 2000 Index(c) 16.33 20.07 17.88 15.91
- -------------------------------------------------------------------------------
Dates Loomis Lipper RUSSELL 2000
- -------------------------------------------------------------------------------
1991 10.00 10.00 10.00
9.65 9.51 9.41
11.21 10.48 10.19
12.77 11.56 10.77
1992 14.05 11.68 11.58
12.19 10.70 10.79
12.26 11.06 11.10
14.44 12.85 12.76
1993 15.37 12.99 13.30
15.70 13.40 13.59
17.72 14.63 14.78
18.01 15.02 15.16
1994 17.06 14.48 14.76
16.22 13.70 14.18
17.06 14.97 15.17
16.51 14.95 14.89
1995 17.61 15.79 15.57
18.51 17.26 17.03
21.08 19.41 18.72
21.82 19.68 19.12
1996 23.47 20.79 20.10
25.28 22.44 21.10
25.90 22.72 21.17
28.44 22.51 22.28
1997 27.95 20.39 21.12
32.14 23.87 24.55
- -------------------------------------------------------------------------------
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Small Cap Value Fund is May 13, 1991.
Since Lipper performance data is not available coincident with this date,
comparative performance is presented from May 31, 1991.
(b): Source: Lipper Analytical Services
(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.
MARKET ENVIRONMENT
In the early part of the year, interest rates were on the rise as the economy
was growing well above expectations. In this uncertain environment, investors
flocked to the large companies as safe havens. During the second quarter, the
economy cooled down a bit, interest rates began to fall and small cap stocks
posted stronger returns, particularly in the growth sector. The economy is
currently growing moderately with stable interest rates, which makes for an
ideal environment for small companies.
PORTFOLIO CHARACTERISTICS
The Fund's positive performance for the first half of the year can be attributed
to excellent stock selection in consumer, health care, capital goods and energy
stocks. Even as the health care and energy sectors performed well below the
market, the Fund posted strong returns in each area. Performance was also helped
by our underweighting in the technology sector. We have since increased our
weighting to technology, as we believe it represents an attractive segment of
the market. While our financial service stocks did well for the first six
months, our underweighting in this area did not allow us to fully participate in
the sector's particularly strong performance.
The best performing stocks in the Russell 2000 were low P/E stocks that traded
below 10 times earnings. While we employ a value strategy and the Fund's average
P/E ratio is significantly lower than that of the Russell 2000 Index, we do not
seek to own the cheapest stocks in the universe. The average stock in our
portfolio trades at 14 times earnings, well below the 18.8 times earnings of the
Russell 2000 Index.
PORTFOLIO POSITIONING
The most recent data suggests that small cap earnings growth relative to large
cap companies is increasing for the first time in three years. As of the end of
the second quarter, the one year IBES forecast for earnings per share growth for
the Russell 2000 Index is 20.5% versus 14.8% for the S&P 500 Index. Given that
valuations are relatively low by historical standards, we believe that interest
in small companies will return as the relative earnings picture for small stocks
continues to improve.
/s/ Mary Champagne /s/ Jeffrey C. Petherick
Mary Champagne Jeffrey C. Petherick
<PAGE>
LOOMIS SAYLES STRATEGIC VALUE FUND
- --------------------------------------------------------------------------------
- --------------------
Photo of
Philip J. Schettewi
- --------------------
Philip J. Schettewi
PERFORMANCE
The Loomis Sayles Strategic Value Fund produced a return of 16.30% for the first
six months of 1997, lagging the 20.60% return of the S&P 500 Index. The Fund's
relative performance was hurt slightly during the period due to our focus on
value stocks.
MARKET ENVIRONMENT
Equities surged to new highs during the first six months of the year driven by
the powerful mix of a healthy economy, low inflation, falling interest rates,
strong earnings and a favorable balance between supply and demand for equities.
Remarkably, the S&P 500 Index gained 10% by mid-February. The rally paused
momentarily when Federal Reserve Chairman Alan Greenspan testified before
Congress that inflation risks were "skewed to the upside" hinting that he may be
forced to raise interest rates soon. Equity investors seemed to shrug off these
comments, but soon took notice once data began to pour in indicating the economy
was stronger than expected. Stocks posted a loss for March due to rising rates
and by mid-April nearly all of the February advance had been lost. Then, as
interest rates began to fall and first quarter earnings reports started coming
in strong, stock prices did an about face. By the end of the second quarter, the
market, as measured by the S&P 500 Index, was up 20.60% for the first six months
of 1997.
PORTFOLIO CHARACTERISTICS
The portfolio is comprised of stocks that sell at the lower end of their 10-
year relative price/earnings (P/E) ranges but have also exhibited strong
earnings gains. In addition, we identify companies that have high levels of
profitability as measured by return on equity. Unfortunately, value, or low P/ E
stocks, were not the best performing securities in the first half of 1997.
However, given our unique style we were able to stay close to the S&P 500 Index,
a feat that has proven difficult to accomplish for most large capitalization
equity managers in 1997.
PORTFOLIO POSITION
Our largest Fund weighting continues to incorporate a myriad of technology
stocks. We believe the large capitalization technology stocks that dominate
their respective niches should perform extremely well. In addition, given the
continued strength of the US economy, we have identified opportunity in
chemicals, papers and steel stocks. We have underweighted the financial stocks
because the group seems historically expensive. The transportation sector also
offers opportunity with investments in trucking and railroad stocks. We continue
to look for unique company specific opportunities such as Westinghouse, Reebok
and Crown Cork & Seal. We believe our portfolio is structured to take advantage
of a continuation of a low inflationary environment with positive economic
growth.
/s/ Philip J. Schettewi
Philip J. Schettewi
<PAGE>
LOOMIS SAYLES WORLDWIDE FUND
================================================================================
- ----------------- -----------------
[photo of [photo of
Daniel J. Fuss] E. John deBeer]
- ----------------- -----------------
Daniel J. Fuss E. John deBeer
- ----------------- -----------------
[photo of [photo of
Paul H. Drexler] Quentin Faulkner]
- ----------------- -----------------
Paul H. Drexler Quentin Faulkner
PERFORMANCE SUMMARY
The Loomis Sayles Worldwide Fund's 5.08% return for the first six months of the
year lagged both the 9.55% return of the Lipper Global Flexible Category average
and the 20.60% return of the S&P 500 Index. While asset allocation played a role
in the Fund's disappointing returns, stock selection decisions drove performance
for the period.
MARKET ENVIRONMENT
The market for global bonds was basically neutral for the first half of the
year, with most bond markets performing fairly well. The U.S. bond market
experienced a weak first quarter, but bounced back in the second quarter. The
strong growth that prompted the Federal Reserve to raise the Federal Funds Rate
from 5.25% to 5.50% seemed to cool during the second quarter and investors'
fears of inflation subsided. While the yen rallied against the U.S. dollar, the
German mark continued to decline to new lows.
The U.S. stock market was led by large-cap growth stocks as strong earnings and
subdued inflation helped the S&P 500 to a stunning 20.60% return. It was not
until towards the end of the period that mid- and small-cap stocks began to
participate in this rally in a meaningful way.
Foreign stocks experienced a gradual economic recovery in Europe and Japan as
fundamentals improved. The stronger U.S. dollar has also helped improve the
competitiveness of foreign companies in global markets.
PORTFOLIO CHARACTERISTICS
The Fund's U.S. equity performance lagged that of the S&P 500 Index, primarily
due to stock selection. However, our stated investment approach is to focus on
value-oriented stocks. The gap between large-cap growth stocks and the Fund's
value-oriented stocks is extremely wide and we believe it will work to our
benefit in the future.
The Fund's foreign equities lagged the Morgan Stanley Capital International
EAFE Index (EAFE), a broad measure of stock performance in Europe, Australia
and the Far East. Stock selection also suffered from negative returns in
several of our holdings during the second quarter.
Cumulative Performance May 1996(a) to June 30, 1997
- --------------------------------------------------------------------------------
Average Annual Return (%)-Period Ended June 30, 1997
- --------------------------------------------------------------------------------
Since
1 year Inception
Loomis Sayles Worldwide Fund (I class) 13.43 13.76
Lipper Average Global Flexible Fund(b) 17.29 17.48
S&P 500 Index(c) 34.68 17.49
- --------------------------------------------------------------------------------
Dates Loomis Lipper S&P
As of 5/31/96 10.00 10.00 10.00
Period Ended
6/30/96 10.03 10.04 10.04
9/30/96 10.25 10.22 10.35
12/31/96 10.83 10.80 11.21
3/31/97 10.83 10.89 11.51
6/30/97 11.38 11.78 13.52
- --------------------------------------------------------------------------------
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Worldwide Fund is May 1, 1996.
Since Lipper and S&P 500 performance data is not available coincident
with this date, comparative performance is presented from May 31,
1996.
(b): Source: Lipper Analytical Services
(c): S&P 500 is a capitalization-weighted, total return index comprised of
500 widely held common stocks, representing industrial, utility,
transportation, and financial companies traded on the New York Stock
Exchange, the American Stock Exchange and in the Over-the-Counter
market. The index returns have not been reduced for ongoing management
and operating expenses applicable to mutual fund investments.
The Fund's U.S. bonds performed extremely well relative to the Lehman Brothers
Aggregate Index, primarily due to bond selection. We will continue to search for
the best bonds, but it is also worth noting that real yields on U.S.
Treasuries are historically attractive.
Our foreign bonds also posted very strong results, due almost entirely to bond
selection. The U.S. dollar has rallied so strongly that many non U.S.
currencies appear to be undervalued.
PORTFOLIO POSITIONING
Bond values in the United States and most other countries are good to excellent
based upon historical real yields (the spread between the rate of inflation and
interest rates). This explains our commitment to bonds, which comprise about 37%
of the Fund. With the significant run-up in stock prices in the U.S. and many
foreign countries, including major markets like Germany, France and the U.K., it
appears that stocks are generally expensive.
One exception is Asia, where weakness in the stock (and bond) markets has left
equities at recent lows. We believe that the market has over-reacted to the
slowing in these economies from their previous fast-paced growth. These factors
will continue to be considered when we look at reallocating assets in the near
future.
/s/ Daniel J. Fuss /s/ Paul H. Drexler
Daniel J. Fuss Paul H. Drexler
/s/ E. John deBeer /s/ Quentin Faulkner
E. John deBeer Quentin Faulkner
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND
Investments -- as of June 30, 1997 (unaudited)
Shares Value (a)
- --------------------------------------------------------------------------------
Common Stocks -- 95.4% of Total Net Assets
Aerospace -- 6.2%
Litton Industries, Inc. (b) ..................... 10,900 $ 526,606
McDonnell Douglas Corp. ......................... 8,200 561,700
Northrop Grumman Corp. .......................... 13,000 1,141,563
Raytheon Corp. .................................. 20,100 1,025,100
-----------
3,254,969
-----------
Banks/Savings & Loans -- 2.4%
Chase Manhattan Corp. ........................... 13,012 1,262,977
-----------
Chemicals - Major -- 3.0%
E.I. Dupont DeNemours & Co. ..................... 8,200 515,575
W.R. Grace ...................................... 19,000 1,047,375
-----------
1,562,950
-----------
Chemicals - Specialty -- 1.4%
Millipore Corp. ................................. 17,000 748,000
-----------
Electrical Equipment -- 1.0%
York International Corp. ........................ 10,900 501,400
-----------
Electronic Components -- 4.1%
Intel Corp. ..................................... 3,000 425,438
Lam Research Corp. (b) .......................... 16,800 622,650
National Semiconductor Corp. (b) ................ 37,400 1,145,375
-----------
2,193,463
-----------
Financial Services -- 3.7%
Beneficial Corp. ................................ 6,700 476,119
Finova Group, Inc. .............................. 19,162 1,465,893
-----------
1,942,012
-----------
Food - Packaged and Misc. -- 2.9%
ConAgra, Inc. ................................... 16,800 1,077,300
Sara Lee Corp. .................................. 11,000 457,875
-----------
1,535,175
-----------
Forest Products -- 1.9%
Georgia Pacific Corp. ........................... 12,000 1,024,500
-----------
Freight Transportation -- 2.8%
Burlington Northern Santa Fe Corp. .............. 8,400 754,950
Ryder System, Inc. .............................. 22,400 739,200
-----------
1,494,150
-----------
Health Care - Drugs -- 6.6%
Abbott Laboratories ............................. 12,100 807,675
Bristol Myers Squibb Co. ........................ 14,200 1,150,200
Pharmacia & Upjohn, Inc. ........................ 18,700 649,825
Schering-Plough Corp. ........................... 18,000 861,750
-----------
3,469,450
-----------
Health Care - Medical Technology -- 1.9%
C.R. Bard, Inc. ................................. 27,750 1,007,672
-----------
Health Care - Services -- 3.4%
Tenet Healthcare Corp. (b) ...................... 60,000 1,773,750
-----------
Home Products -- 1.6%
Premark International, Inc. ..................... 32,500 869,375
-----------
Housing & Building Materials -- 3.6%
Armstrong World Industries, Inc. ................ 18,100 1,328,087
Black & Decker Corp. ............................ 15,700 583,844
-----------
1,911,931
-----------
Insurance -- 3.7%
Ace Ltd. ........................................ 16,150 1,193,081
Allstate Corp. .................................. 10,298 751,754
-----------
1,944,835
-----------
Leisure -- 2.0%
Eastman Kodak Co. ............................... 11,600 890,300
Hasbro, Inc. .................................... 6,600 187,275
-----------
1,077,575
-----------
Machinery -- 1.1%
Deere & Co. ..................................... 10,400 570,700
-----------
Multi - Industry -- 7.9%
Dover Corp. ..................................... 12,000 738,000
Eaton Corp. ..................................... 13,850 1,209,278
Philips Electronics NV .......................... 17,500 1,257,813
Viad Corp. ...................................... 50,000 962,500
-----------
4,167,591
-----------
Natural Gas - Pipelines -- 0.9%
El Paso Natural Gas Co. ......................... 9,100 500,500
-----------
Office Equipment -- 4.2%
Gateway 2000, Inc. (b) .......................... 15,600 506,025
Harris Corp. .................................... 9,600 806,400
International Business Machines Corp. ........... 9,800 883,837
-----------
2,196,262
-----------
Oil - Major Integrated -- 4.1%
British Petroleum Plc, ADR (c) .................. 14,174 1,061,278
Mobil Corp. ..................................... 7,200 503,100
USX Marathon Group .............................. 20,600 594,825
-----------
2,159,203
-----------
Oil - Services -- 3.2%
Baker Hughes, Inc. .............................. 12,600 487,463
Weatherford Enterra, Inc. (b) ................... 31,300 1,205,050
-----------
1,692,513
-----------
Paper Products -- 1.4%
Mead Corp. ...................................... 11,800 734,550
-----------
Real Estate -- Investment Trusts -- 3.0%
Health Care Property Investments, Inc. .......... 30,200 1,064,550
Meditrust Corp., SBI ............................ 13,000 518,375
-----------
1,582,925
-----------
Retail - Food & Drug -- 1.5%
Kroger Co. (b) .................................. 28,200 817,800
-----------
Retail - General Merchandise -- 4.1%
Dayton Hudson Corp. ............................. 18,300 973,331
Federated Department Stores, Inc. (b) ........... 35,000 1,216,250
-----------
2,189,581
-----------
Textile & Apparel -- 1.5%
Reebok International Ltd. (b) ................... 17,300 808,774
-----------
Tobacco -- 3.8%
Loews Corp. ..................................... 10,100 1,011,262
Philip Morris Cos., Inc. ........................ 22,100 980,688
-----------
1,991,950
-----------
Utilities - Electric -- 2.3%
Pacificorp ...................................... 29,000 638,000
Pinnacle West Capital Corp. ..................... 20,000 601,250
-----------
1,239,250
-----------
Utilities - Telecommunications -- 4.2%
Bellsouth Corp. ................................. 24,200 1,122,275
SBC Communications, Inc. ........................ 17,896 1,107,315
-----------
2,229,590
-----------
TOTAL COMMON STOCKS (Identified Cost $38,124,284) 50,455,373
-----------
Face
Amount
- --------------------------------------------------------------------------------
Short-Term Investments -- 5.0% of Total Net Assets
Associates Corp. of North America,
6.100%, 7/01/97 ................................ $1,650,446 1,650,446
Chevron Oil Finance Co., 5.500%, 7/01/97 ........ 1,000,000 1,000,000
-----------
2,650,446
-----------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $2,650,446)................... 2,650,446
-----------
TOTAL INVESTMENTS -- 100.4%
(IDENTIFIED COST $40,774,730) (d) ................ $53,105,819
Cash, Receivables and Other Assets............... 139,913
Liabilities...................................... (329,965)
------------
TOTAL NET ASSETS -- 100% .......................... $52,915,767
===========
(a) See Note 1.
(b) Non-income producing security.
(c) 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.
(d) At June 30, 1997, the net unrealized appreciation on investments based on
cost of $40,774,730 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there is
an excess of value over tax cost and aggregate gross unrealized depreciation
for all securities in which there is an excess of tax cost over value were
$12,625,676 and $294,587, respectively, resulting in net unrealized
appreciation of $12,331,089.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND
Investments -- as of June 30, 1997 (unaudited)
Shares Value (a)
- -------------------------------------------------------------------------------
Common Stocks -- 99.4% of Total Net Assets
Aerospace -- 1.7%
Boeing Co. ...................................... 10,600 $ 562,463
-----------
Chemicals - Major -- 3.1%
Monsanto Co. .................................... 24,000 1,033,500
-----------
Computer Software & Services -- 10.3%
Computer Associates International, Inc........... 12,700 707,231
HBO & Co. ....................................... 19,300 1,329,288
McAfee Associates, Inc.(b) ...................... 13,600 858,500
SunGard Data Systems, Inc. (b) .................. 11,000 511,500
-----------
3,406,519
-----------
Electronic Components -- 4.8%
Intel Corp. ..................................... 6,000 850,875
Solectron Corp .................................. 6,200 434,000
Texas Instruments, Inc. ......................... 3,600 302,625
-----------
1,587,500
-----------
Financial Services -- 8.4%
Charles Schwab Corp. ............................ 24,500 996,844
MGIC Investment Corp. ........................... 25,800 1,236,787
SunAmerica, Inc. ................................ 11,000 536,250
-----------
2,769,881
-----------
Health Care - Drugs -- 10.1%
Eli Lilly & Co. ................................. 12,200 1,333,612
Oncor, Inc. (b) ................................. 200,000 787,500
Somatogen, Inc. (b) ............................. 18,500 85,563
Warner Lambert Co. .............................. 9,100 1,130,675
-----------
3,337,350
-----------
Health Care - Medical Technology -- 3.1%
Guidant Corp. ................................... 12,000 1,020,000
-----------
Health Care - Services -- 1.9%
Healthsouth Corp. (b) ........................... 25,300 630,919
-----------
Hotels & Restaurants -- 4.5%
Starbucks Corp. (b) ............................. 38,100 1,483,519
-----------
Insurance -- 5.0%
American International Group, Inc. .............. 5,350 799,156
EXEL Ltd. ....................................... 16,300 859,825
-----------
1,658,981
-----------
Office Equipment -- 12.0%
Andrew Corp. (b) ................................ 22,300 627,187
Dell Computer Corp. (b) ......................... 9,100 1,068,681
EMC Corp. (b) ................................... 18,000 702,000
Glenayre Technologies, Inc. (b) ................. 15,500 253,813
Tellabs, Inc. (b) ............................... 23,600 1,318,650
-----------
3,970,331
-----------
Oil - Independent Producers -- 10.1%
Abacan Resources Corp. (New) (b) ................ 130,000 414,375
Anadarko Petroleum Corp. ........................ 14,400 864,000
Unit Corp. (b) .................................. 199,300 2,080,194
-----------
3,358,569
-----------
Oil - Services -- 9.9%
Baker Hughes, Inc. .............................. 30,800 1,191,575
Halliburton Co. ................................. 11,200 887,600
Rowan Companies, Inc. (b) ....................... 42,300 1,192,331
-----------
3,271,506
-----------
Retail - General -- 1.7%
Kohls Corp. (b) ................................. 10,500 555,844
-----------
Retail - Specialty -- 9.8%
Borders Group, Inc. (b) ......................... 31,100 750,287
CUC International, Inc. (b) ..................... 48,525 1,252,552
Home Depot, Inc. ................................ 5,600 386,050
Petsmart, Inc. (b) .............................. 73,500 845,250
-----------
3,234,139
-----------
Tobacco -- 3.0%
Philip Morris Cos., Inc. ........................ 22,500 998,437
-----------
TOTAL COMMON STOCKS (Identified Cost $27,269,799) 32,879,458
-----------
Face
Amount
- --------------------------------------------------------------------------------
Short-Term Investment -- 0.7% of Total Net Assets
Associates Corp. of North America,
6.100%, 7/01/99 $247,832 247,832
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $247,832)..................... 247,832
-----------
TOTAL INVESTMENTS -- 100.1%
(IDENTIFIED COST $27,517,631) (c) ................ $33,127,290
Cash, Receivables and Other Assets............... 67,089
Liabilities...................................... (102,614)
-----------
TOTAL NET ASSETS -- 100% .......................... $33,091,765
===========
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1997, the net unrealized appreciation on investments based on
cost of $27,517,631 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there is
an excess of value over tax cost and aggregate gross unrealized depreciation
for all securities in which there is an excess of tax cost over value were
$7,356,008 and $1,746,349, respectively, resulting in net unrealized
appreciation of $5,609,659.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
Investments -- as of June 30, 1997 (unaudited)
Shares (a) Value (b)
- --------------------------------------------------------------------------------
Common Stocks -- 93.7% of Total Net Assets
Australia -- 8.9%
Brambles Industries Ltd. ...................... 70,000 $ 1,385,569
ERG Ltd. ...................................... 800,000 906,900
Foodland Associates ........................... 200,000 1,360,350
Leighton Holdings Ltd. ........................ 200,000 975,069
QBE Insurance Group ........................... 200,000 1,209,200
Smith (Howard) Ltd. ........................... 140,000 1,333,143
West Australian News Holdings Ltd. ............ 175,775 787,753
Woodside Petroleum Ltd. ....................... 130,000 1,120,021
------------
9,078,005
------------
Brazil -- 8.0%
Banco Bradesco SA ............................. 88,000,000 886,907
Brahma ........................................ 1,150,000 875,946
CEMIG ......................................... 17,000,000 876,411
Forca e Luz Paulista .......................... 5,700,000 958,339
Pao de Acucar Group ........................... 39,500,000 898,937
Petrol Brasileiros ............................ 3,700,000 1,027,669
Telebras SA ................................... 11,900,000 1,805,090
Telemig SA .................................... 4,900,000 867,075
Telemig SA (rights) ........................... 60,776 11,012
------------
8,207,386
------------
Finland -- 7.6%
Huhtamaki Oy .................................. 30,000 1,291,223
Merita Ltd. ................................... 475,000 1,582,495
Metra AB ...................................... 42,000 1,265,803
Neste Oy ...................................... 45,000 1,195,898
Rauma Oy ...................................... 48,000 1,099,995
Sampo ......................................... 14,000 1,361,514
------------
7,796,928
------------
Germany -- 8.0%
Daimler Benz AG ............................... 14,000 1,135,829
Deutsche Bank AG .............................. 19,000 1,110,085
Deutsche Telekom .............................. 45,000 1,083,654
Douglas Holdings AG ........................... 18,000 717,275
Duerr AG ...................................... 20,000 825,641
Henkel KGAA ................................... 22,000 1,248,782
Jungheinrich AG ............................... 6,000 987,329
Porsche AG .................................... 800 1,064,159
------------
8,172,754
------------
Hong Kong -- 0.7%
CDL Hotels International Ltd. ................. 1,800,000 731,868
------------
Italy -- 3.9%
Arnoldo Mondadori Editore Spa ................. 130,000 751,131
Cartiere Burgo Spa ............................ 70,700 392,276
Eni Spa ....................................... 218,000 1,234,577
La Rinascente (rights to ord. shares) ......... 300,000 49,424
La Rinascente (rights to bonds) ............... 300,000 13,503
Rinascente Spa ................................ 300,000 729,891
Unipol Spa .................................... 300,000 841,978
------------
4,012,780
------------
Japan -- 17.8%
Canon, Inc. ................................... 50,000 1,361,019
Credit Saison Co. ............................. 63,250 1,545,106
Daiwa House Industries Co. Ltd. ............... 90,000 1,099,285
Familymart Co. ................................ 30,000 1,470,947
Honda Motor Co. ............................... 43,000 1,294,277
Ito Yokado Co. ................................ 25,000 1,450,445
Nichii Gakkan Co. ............................. 20,000 1,116,734
Omron Corp. ................................... 60,000 1,272,029
Sankyo Co. .................................... 44,000 1,477,927
SMC Corp. ..................................... 15,000 1,266,795
Sony Corp. .................................... 18,000 1,568,836
Tanabe Seiyaku Co. ............................ 100,000 898,622
TDK Corp. ..................................... 16,000 1,173,966
Yamada Denki Co. .............................. 50,000 1,186,529
------------
18,182,517
------------
New Zealand -- 6.7%
Corporate Investments Ltd. .................... 2,000,000 1,113,970
Fisher & Paykel Industries .................... 184,800 721,771
Nuplex Industries Ltd. ........................ 440,000 1,195,480
PDL Holdings Ltd. ............................. 120,641 635,077
St. Lukes Group Ltd. .......................... 650,000 794,723
Telecom Corp. of New Zealand .................. 220,000 1,120,762
Tranz Rail Holdings Ltd. ...................... 218,600 1,247,266
------------
6,829,049
------------
Norway -- 6.6%
Elkem As ...................................... 72,000 1,409,704
Norske Skog Industrier Asa .................... 30,000 1,033,537
Schibsted Asa ................................. 47,000 929,842
Smedvig As .................................... 50,000 1,227,965
Storli As ..................................... 57,000 1,057,687
Unitor As ..................................... 79,000 1,131,774
------------
6,790,509
------------
Portugal -- 8.4%
Banco Espirito Santo .......................... 66,400 1,504,855
Cimpor ........................................ 29,000 675,859
Elec de Portugal .............................. 1,700 31,197
Engil Sgps .................................... 119,400 1,458,497
Portucel ...................................... 210,000 1,557,014
Portugal Telecom .............................. 45,500 1,835,407
Sonae Investimentos ........................... 36,100 1,509,345
------------
8,572,174
------------
Singapore -- 5.4%
City Developments Ltd. ........................ 213,000 2,085,752
Keppel Corp. Ltd. ............................. 120,000 532,979
Keppel Corp. Ltd. (Series A) .................. 30,000 130,097
Parkway Holdings Ltd. ......................... 312,000 1,396,657
Wing Tai Holdings Ltd. ........................ 480,000 1,383,227
------------
5,528,712
------------
Spain -- 10.6%
Acerinox ...................................... 8,500 1,592,704
Aguas de Barcelona ............................ 28,211 1,154,478
Aguas de Barcelona (New) ...................... 282 11,387
Asturiana de Zinc ............................. 58,000 1,228,096
Banco Bilbao Vizcaya .......................... 18,000 1,462,233
Catalana Occidente SA ......................... 21,000 1,046,081
Ebro Agricolas ................................ 66,000 1,287,750
Fomento de Construcciones y Contratas ......... 13,000 1,657,754
Prosegur Seguridad ............................ 115,000 1,404,819
------------
10,845,302
------------
Thailand -- 1.1%
Banpu Co. ..................................... 50,000 729,589
Electricity Generating Public Co. Ltd. ........ 139,000 340,726
------------
1,070,315
------------
TOTAL COMMON STOCKS
(Identified Cost $80,526,447)................. 95,818,299
------------
Face
Amount
- --------------------------------------------------------------------------------
Short-Term Investment -- 6.1% of Total Net Assets
Repurchase Agreement with State Street Bank
and Trust Co., dated 6/30/97 at 5.00% to be
repurchased at $6,266,870 on 7/01/97
collateralized by $6,055,000 U.S. Treasury
Bond 7.25%, due 5/15/16 with a value of
$6,392,754 .................................. $6,266,000 6,266,000
------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $6,266,000)................. 6,266,000
------------
TOTAL INVESTMENTS -- 99.8%
(IDENTIFIED COST $86,792,447) (c) .............. $102,084,299
Cash, Receivables and Other Assets (d)......... 325,796
Liabilities.................................... (159,048)
------------
TOTAL NET ASSETS -- 100% ........................ $102,251,047
============
(a) Ordinary shares unless noted otherwise.
(b) See Note 1.
(c) At June 30, 1997, the net unrealized appreciation on investments based on
cost of $86,792,447 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there is
an excess of value over tax cost and aggregate gross unrealized depreciation
for all securities in which there is an excess of tax cost over value were
$17,687,114 and $2,395,262, respectively, resulting in net unrealized
appreciation of $15,291,852.
(d) Including deposits in foreign denominated currencies with a value of $81,367
and a cost of $81,524.
Ten largest industry holdings at June 30, 1997 (unaudited)
Retail 9.2%
Telecommunications 7.5%
Banking 6.4%
Repurchase Agreement 6.1%
Construction 5.1%
Insurance 4.4%
Real Estate 3.4%
Automobiles 3.4%
Industrial Equipment 3.0%
Pulp & Paper 2.9%
Consumer Electronics 2.7%
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES MID-CAP GROWTH FUND
Investments -- as of June 30, 1997 (unaudited)
Shares Value (a)
- --------------------------------------------------------------------------------
Common Stocks -- 92.3% of Total Net Assets
Chemicals - Major -- 2.7%
Praxair, Inc. ......................................... 800 $ 44,800
----------
Chemicals - Specialty -- 2.3%
Crompton & Knowles Corp. .............................. 1,700 37,825
----------
Computer Software & Services -- 11.9%
Electronic Arts (b) ................................... 1,200 40,350
HBO & Co. ............................................. 600 41,325
McAfee Associates, Inc. (b) ........................... 600 37,875
SunGard Data Systems, Inc. (b) ........................ 500 23,250
Symantec Corp. (b) .................................... 2,800 54,600
----------
197,400
----------
Financial Services -- 9.8%
Charles Schwab Corp. .................................. 1,600 65,100
MGIC Investment Corp. ................................. 600 28,762
Student Loan Marketing Association (New Voting) ....... 350 44,450
SunAmerica, Inc. ...................................... 500 24,375
----------
162,687
----------
Food - Packaged and Misc. -- 1.7%
Heinz (H.J) Co. ....................................... 600 27,675
----------
Health Care - Drugs -- 6.2%
Eli Lilly & Co. ....................................... 500 54,656
Oncor, Inc. (b) ....................................... 9,900 38,981
Somatogen, Inc. (b) ................................... 2,000 9,250
----------
102,887
----------
Health Care - Medical Technology -- 6.1%
Guidant Corp. ......................................... 800 68,000
Steris Corp. (b) ...................................... 900 33,638
----------
101,638
----------
Hotels & Restaurants -- 2.7%
Starbucks Corp. (b) ................................... 1,150 44,778
----------
Insurance -- 3.5%
EXEL Ltd. ............................................. 300 15,825
UNUM Corp. (b) ........................................ 1,000 42,000
----------
57,825
----------
Office Equipment -- 15.3%
Andrew Corp. (b) ...................................... 1,850 52,031
Cascade Communications Corp. (b) ...................... 800 22,100
Dell Computer Corp. (b) ............................... 600 70,462
EMC Corp. (b) ......................................... 1,000 39,000
Glenayre Technologies, Inc. (b) ....................... 1,800 29,475
Tellabs, Inc. (b) ..................................... 700 39,113
----------
252,181
----------
Oil - Independent Producers -- 10.9%
Abacan Resources Corp. (New) (b) ...................... 6,100 19,444
Anadarko Petroleum Corp. .............................. 1,000 60,000
Unit Corp. (b) ........................................ 9,600 100,200
----------
179,644
----------
Oil - Services -- 9.2%
Baker Hughes, Inc. .................................... 1,000 38,688
Halliburton Co. ....................................... 500 39,625
Noble Drilling Corp. (b) .............................. 3,300 74,456
----------
152,769
----------
Retail - General -- 1.6%
Kohls Corp. (b) ....................................... 500 26,469
----------
Retail - Specialty -- 8.4%
Borders Group, Inc. (b) ............................... 1,600 38,600
CUC International, Inc. (b) ........................... 1,950 50,334
Petsmart, Inc. (b) .................................... 4,300 49,450
----------
138,384
----------
TOTAL COMMON STOCKS (Identified Cost $1,472,925)....... 1,526,962
----------
TOTAL INVESTMENTS -- 92.3%
(IDENTIFIED COST $1,472,925) (c) ....................... $1,526,962
Cash, Receivables and Other Assets..................... 175,622
Liabilities............................................ (48,526)
----------
TOTAL NET ASSETS -- 100% ................................ $1,654,058
==========
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1997, the net unrealized appreciation on investments based on
cost of $1,472,925 for federal income tax purposes was as follows: Aggregate
gross unrealized appreciation for all securities in which there is an excess
of value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were $136,508,
and $82,471, respectively, resulting in net unrealized appreciation of
$54,037.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND
Investments -- as of June 30, 1997 (unaudited)
Shares Value (a)
- --------------------------------------------------------------------------------
Common Stocks -- 90.2% of Total Net Assets
Aerospace -- 2.0%
Litton Industries, Inc. (b) ............................. 1,000 $ 148,312
----------
Airlines -- 1.4%
Southwest Airlines Co. .................................. 1,300 33,638
----------
Auto & Related -- 2.9%
Borg Warner Automotive, Inc. ............................ 600 32,437
Echlin, Inc. ............................................ 1,100 39,600
----------
72,037
----------
Banks/Savings & Loans -- 4.1%
City National Corp. ..................................... 1,000 24,063
Commercial Federal Corp. ................................ 825 30,628
Downey Financial Corp. .................................. 1,100 25,987
First Financial Corp. ................................... 700 20,563
----------
101,241
----------
Beverage -- 1.6%
Whitman Corp. ........................................... 1,600 40,500
----------
Chemicals - Specialty -- 5.1%-
Crompton & Knowles Corp. ................................ 900 20,025
Dexter Corp. ............................................ 1,000 32,000
Hexcel Corp. (b) ........................................ 800 13,800
Lawter International, Inc. .............................. 2,000 25,250
Millipore Corp. ......................................... 800 35,200
----------
126,275
----------
Computer Software & Services -- 4.8%
American Management Systems, Inc. (b) ................... 1,300 34,775
Network General Corp. (b) ............................... 1,600 23,800
Sterling Software, Inc. (b) ............................. 900 28,125
Symantec Corp. (b) ...................................... 1,600 31,200
----------
117,900
----------
Electrical Equipment -- 1.3%
York International Corp. ................................ 700 32,200
----------
Electronic Components -- 4.1%
International Rectifier Corp. (b) ....................... 1,300 24,212
Lam Research Corp. (b) .................................. 600 22,238
National Semiconductor Corp. (b) ........................ 1,000 30,625
VLSI Technology, Inc. (b) ............................... 1,000 23,625
----------
100,700
----------
Environmental Services -- 0.8%
Wheelabrator Technologies, Inc. (New) ................... 1,200 18,525
----------
Financial Services -- 2.6%
Finova Group, Inc. ...................................... 500 38,250
First Plus Financial Group, Inc. (b) .................... 300 10,200
WFS Financial, Inc. (b) ................................. 900 15,075
----------
63,525
----------
Food - Packaged and Misc. -- 1.4%
Lance, Inc. ............................................. 1,750 33,469
----------
Freight Transportation -- 1.6%
Ryder System, Inc. ...................................... 1,200 39,600
----------
Health Care - Medical Technology -- 4.4%
C.R. Bard, Inc. ......................................... 1,000 36,312
Invacare Corp. .......................................... 1,300 30,388
Marquette Medical Systems (Class A) (b) ................. 1,000 22,000
Sofamor Danek Group, Inc. (b) ........................... 400 18,300
----------
107,000
----------
Health Care - Services -- 3.7%
Integrated Health Services, Inc. (b) .................... 1,000 38,500
Lincare Holdings, Inc. (b) .............................. 800 34,400
Physicians Resource Group, Inc. (b) ..................... 1,900 17,100
----------
90,000
----------
Home Products -- 2.5%
Aptargroup, Inc. ........................................ 400 18,100
Premark International, Inc. ............................. 1,600 42,800
----------
60,900
----------
Housing & Building Materials -- 3.7%
Armstrong World Industries, Inc. ........................ 700 51,362
Leggett & Platt, Inc. ................................... 900 38,700
----------
90,062
----------
Insurance -- 6.9%
Ace Ltd. ................................................ 500 36,937
Everest Reinsurance Holdings, Inc. ...................... 700 27,738
Protective Life Corp. ................................... 800 40,200
Reinsurance Group of America ............................ 400 23,000
TIG Holdings, Inc. ...................................... 1,300 40,625
----------
168,500
----------
Leisure -- 1.5%
Harman International Industries, Inc. ................... 900 37,913
----------
Machinery -- 2.5%
Greenfield Industries, Inc. ............................. 750 20,250
Harnischfeger Industries, Inc. .......................... 1,000 41,500
----------
61,750
----------
Media & Entertainment -- 1.6%
Banta Corp. ............................................. 1,000 27,125
Houghton Mifflin Co. .................................... 200 13,350
----------
40,475
----------
Metals -- 1.8%
Agnico-Eagle Mines Ltd. ................................. 1,800 17,325
LTV Corp. ............................................... 1,800 25,650
----------
42,975
----------
Multi - Industry -- 1.6%
Apogee Enterprises, Inc. ................................ 300 6,450
Viad Corp. .............................................. 1,700 32,725
----------
39,175
----------
Natural Gas - Pipelines -- 0.9%
El Paso Natural Gas Co. ................................. 400 22,000
----------
Office Equipment -- 1.5%
Harris Corp. ............................................ 450 37,800
----------
Oil - Independent Producers -- 1.4%
Vintage Petroleum, Inc. ................................. 1,100 33,825
----------
Oil - Services -- 3.8%
Falcon Drilling Co., Inc. (b) ........................... 300 17,288
Tuboscope Vetco International Corp. (b) ................. 1,500 29,812
Weatherford Enterra, Inc. (b) ........................... 1,200 46,200
----------
93,300
----------
Paper Products -- 1.3%
Mead Corp. .............................................. 500 31,125
Wausau Paper Mills Co. .................................. 100 1,888
----------
33,013
----------
Real Estate - Investment Trusts -- 5.4%
Cali Realty Corp. ....................................... 1,250 42,500
Health Care Property Investments, Inc. .................. 1,400 49,350
Liberty Property ........................................ 1,600 39,800
----------
131,650
----------
Retail - General -- 1.0%
Family Dollar Stores, Inc. .............................. 900 24,525
----------
Retail - Specialty -- 2.5%
Heilig-Meyers Co. ....................................... 1,800 35,325
Zale Corp. (b) .......................................... 1,300 25,756
----------
61,081
----------
Telecommunications -- 1.6%
Aliant Communications, Inc. ............................. 2,000 39,000
----------
Textile & Apparel -- 3.0%
Reebok International Ltd. (b) ........................... 900 42,075
Warnaco Group, Inc. (Class A) ........................... 1,000 31,875
----------
73,950
----------
Utilities - Electric -- 3.9%
Cinergy Corp. ........................................... 1,400 48,737
Pinnacle West Capital Corp. ............................. 1,600 48,100
----------
96,837
----------
TOTAL COMMON STOCKS (Identified Cost $2,013,748)......... 2,213,653
----------
Face
Amount
- --------------------------------------------------------------------------------
Short-Term Investment -- 9.4% of Total Net Assets
Repurchase Agreement with State Street Bank and
Trust Co., dated 6/30/97 at 5.00% to be repurchased
at $231,032 on 7/01/97 collateralized by $240,000
U.S. Treasury Note 5.50%, due 1/31/01 with a value
of $237,646 .......................................... $231,000 231,000
----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $231,000)............................ 231,000
----------
TOTAL INVESTMENTS -- 99.6%
(IDENTIFIED COST $2,244,748) (c) ........................ $2,444,653
Cash, Receivables and Other Assets....................... 87,704
Liabilities.............................................. (76,765)
----------
TOTAL NET ASSETS -- 100% .................................. $2,455,592
==========
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1997, the net unrealized appreciation on investments based on
cost of $2,244,748 for federal income tax purposes was as follows: Aggregate
gross unrealized appreciation for all securities in which there is an excess
of value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were $231,066
and $31,161, respectively, resulting in net unrealized appreciation of
$199,905.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND
Investments -- as of June 30, 1997 (unaudited)
Shares Value (a)
- --------------------------------------------------------------------------------
Common Stocks -- 96.7% of Total Net Assets
Banks/Savings & Loans -- 8.6%
Astoria Financial Corp. ............................. 1,800 $ 85,500
FirstFed Financial Corp. (b) ........................ 2,800 86,975
Reliance Bancorp, Inc. .............................. 2,300 67,706
Roslyn Bancorp, Inc. (b) ............................ 2,000 45,750
----------
285,931
----------
Business Services -- 6.1%
Abacus Direct Corp. (b) ............................. 1,900 61,750
Equity Corp. International (b) ...................... 2,700 65,306
Fine Host Corp. (b) ................................. 1,900 59,850
G & K Services, Inc. ................................ 400 14,900
----------
201,806
----------
Chemicals - Specialty -- 3.1%
Advanced Technology Materials, Inc. (b) ............. 3,500 102,813
----------
Computer Software & Services -- 11.7%
Avid Technology, Inc. (b) ........................... 2,000 52,750
Cambridge Technology Partners, Inc. (b) ............. 2,600 83,200
Integrated Measurment Systems, Inc. (b) ............. 200 2,963
Synopsys, Inc. (b) .................................. 1,900 69,825
The Registry, Inc. (b) .............................. 900 41,400
Veritas Software Co. (b) ............................ 1,400 70,350
Wind River Systems, Inc. (b) ........................ 1,750 66,937
----------
387,425
----------
Electrical Equipment -- 1.3%
Sanmina Corp. (b) ................................... 700 44,450
----------
Electronic Components -- 13.7%
3Dfx Interactive, Inc. .............................. 2,300 30,763
CFM Technologies, Inc. (b) .......................... 1,000 32,750
Cymer, Inc. (b) ..................................... 1,400 68,250
Kulicke & Soffa Industries, Inc. (b) ................ 1,700 55,197
Lam Research Corp. (b) .............................. 1,600 59,300
PRI Automation, Inc. (b) ............................ 1,300 49,319
Sipex Corp. (b) ..................................... 2,700 97,875
Vitesse Semiconductor Corp. (b) ..................... 1,900 62,106
----------
455,560
----------
Environmental Services -- 0.9%
Waste Industries, Inc. (b) .......................... 1,800 31,725
----------
Food - Agribusiness -- 2.3%
Delta & Pine Land Co. ............................... 2,133 75,988
----------
Freight Transportation -- 0.1%
Swift Transportation, Inc. (b) ...................... 100 2,950
----------
Health Care - Drugs -- 5.5%
Agouron Pharmaceuticals, Inc. (b) ................... 400 32,350
Gilead Sciences, Inc. (b) ........................... 1,000 27,625
Guilford Pharmaceuticals, Inc. (b) .................. 1,200 29,100
Immunex Corp. (New) (b) ............................. 900 32,625
Sepracor, Inc. (b) .................................. 1,200 30,975
Theragenics Corp. (b) ............................... 200 4,600
Vertex Pharmaceuticals, Inc. (b) .................... 700 26,775
----------
184,050
----------
Health Care - Medical Technology -- 5.5%
Arterial Vascular Engineering, Inc. (b) ............. 2,700 86,906
Cytyc Corp. (b) ..................................... 1,200 32,550
Novoste Corp. (b) ................................... 2,000 32,750
Perclose, Inc. (b) .................................. 1,200 30,000
----------
182,206
----------
Health Care - Services -- 1.7%
Pediatrix Medical Group, Inc. (b) ................... 1,200 54,975
----------
Hotels & Restaurants -- 1.1%
Logan's Roadhouse, Inc. (b) ......................... 1,500 35,625
----------
Leisure -- 1.6%
Penn National Gaming, Inc. (b) ...................... 3,600 53,550
----------
Media & Entertainment -- 8.3%
Heftel Broadcasting Corp. (b) ....................... 1,000 55,250
Metro Networks, Inc. (b) ............................ 1,300 31,525
Outdoor Systems, Inc. (b) ........................... 1,900 72,675
Universal Outdoor Holdings, Inc. .................... 1,200 41,850
Westwood One, Inc. (b) .............................. 2,300 74,175
----------
275,475
----------
Office Equipment -- 3.7%
Encad, Inc. (b) ..................................... 1,600 66,400
Network Appliance, Inc. (b) ......................... 1,500 57,000
----------
123,400
----------
Oil - Independent Producers -- 5.0%
St. Mary Land & Exploration Co. ..................... 2,000 70,250
Stone Energy Corp. (b) .............................. 1,600 43,800
Swift Energy Co. (b) ................................ 2,200 52,525
----------
166,575
----------
Oil - Services -- 3.0%
Atwood Oceanics, Inc. (b) ........................... 800 53,600
Patterson Energy, Inc. (b) .......................... 1,000 45,375
----------
98,975
----------
Retail - Food & Drug -- 2.2%
Whole Foods Market, Inc. ............................ 2,200 72,875
----------
Retail - Specialty -- 6.3%
Black Box Corp. (b) ................................. 1,500 60,375
Central Garden & Pet Co. (b) ........................ 2,600 65,000
Gadzooks, Inc. (b) .................................. 1,500 29,250
The Wet Seal, Inc. (Class A) (b) .................... 1,700 53,656
----------
208,281
----------
Telecommunications -- 5.0%
Geotel Communications Corp. (b) ..................... 2,200 29,425
Natural Microsystems Corp. (b) ...................... 2,300 82,800
Uniphase Corp. (b) .................................. 900 52,425
----------
164,650
----------
TOTAL COMMON STOCKS (Identified Cost $2,781,031)..... 3,209,285
----------
<PAGE>
Face
Amount
- --------------------------------------------------------------------------------
Short-Term Investment -- 3.4% of Total Net Assets
Repurchase Agreement with State Street Bank and
Trust Co., dated 6/30/97 at 5.00% to be repurchased
at $114,016 on 7/01/97 collateralized by $115,000
U.S. Treasury Bond 7.25%, due 5/15/16 with a value
of $121,415 ........................................ $114,000 114,000
----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $114,000)......................... 114,000
----------
TOTAL INVESTMENTS -- 100.1%
(IDENTIFIED COST $2,895,031) (c) ..................... $3,323,285
Cash, Receivables and Other Assets.................. 185,568
Liabilities......................................... (189,487)
----------
TOTAL NET ASSETS -- 100% .............................. $3,319,366
==========
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1997, the net unrealized appreciation on investments based on
cost of $2,895,031 for federal income tax purposes was as follows: Aggregate
gross unrealized appreciation for all securities in which there is an excess
of value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were $467,992
and $39,738, respectively, resulting in net unrealized appreciation of
$428,254.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND
Investments -- as of June 30, 1997 (unaudited)
Shares Value (a)
- --------------------------------------------------------------------------------
Common Stocks -- 91.0% of Total Net Assets
Aerospace -- 0.5%
Gencorp, Inc. ...................................... 42,700 $ 987,438
------------
Auto & Related -- 1.8%
Amcast Industrial Corp. ............................ 17,600 440,000
Borg Warner Automotive, Inc. ....................... 23,400 1,265,063
Echlin, Inc. ....................................... 55,600 2,001,600
------------
3,706,663
------------
Banks/Savings & Loans -- 3.6%
Bank United Corp. (b) .............................. 39,400 1,497,200
City National Corp. ................................ 58,200 1,400,437
Commercial Federal Corp. ........................... 45,100 1,674,337
Downey Financial Corp. ............................. 45,900 1,084,388
First Financial Corp. .............................. 50,112 1,472,040
------------
7,128,402
------------
Business Services -- 1.5%
Alternative Resources Corp. (b) .................... 39,100 796,662
CDI Corp. (b) ...................................... 9,000 375,188
Cort Business Services Corp. (b) ................... 61,200 1,805,400
Team America Corp. (b) ............................. 13,800 115,575
------------
3,092,825
------------
Chemicals - Specialty -- 4.3%
Cuno, Inc. (b) ..................................... 81,500 1,365,125
Dexter Corp. ....................................... 78,500 2,512,000
Hexcel Corp. (b) ................................... 47,900 826,275
Lawter International, Inc. ......................... 124,200 1,568,025
LeaRonal, Inc. ..................................... 27,000 769,500
OM Group, Inc. ..................................... 47,700 1,580,062
------------
8,620,987
------------
Computer Software & Services -- 4.5%
American Management Systems, Inc. (b) .............. 36,000 963,000
National Computer Systems, Inc. .................... 49,000 1,304,625
Network General Corp. (b) .......................... 42,100 626,237
Nichols Research Corp. (b) ......................... 46,650 979,650
Platinum Technology, Inc. (b) ...................... 62,800 832,100
Semitool, Inc. (b) ................................. 50,300 584,738
Sterling Software, Inc. (b) ........................ 55,900 1,746,875
Symantec Corp. (b) ................................. 52,600 1,025,700
Wonderware Corp. (b) ............................... 64,300 908,237
------------
8,971,162
------------
Computers -- 0.4%
Telxon Corp. ....................................... 43,200 777,600
------------
Electrical Equipment -- 1.4%
Woodhead Industries, Inc. .......................... 45,200 853,150
York International Corp. ........................... 43,100 1,982,600
------------
2,835,750
------------
Electronic Components -- 3.5%
Dynatech Corp. (b) ................................. 25,300 904,475
International Rectifier Corp. (b) .................. 59,100 1,100,738
Merix Corp. (b) .................................... 60,400 1,004,150
Perceptron, Inc. (b) ............................... 39,000 1,057,875
Trident Microsystems, Inc. (b) ..................... 76,300 858,375
VLSI Technology, Inc. (b) .......................... 59,100 1,396,237
Xicor, Inc. (b) .................................... 112,400 660,350
------------
6,982,200
------------
Environmental Services -- 1.7%
Tetra Tech, Inc. (b) ............................... 78,000 1,881,750
World Fuel Services Corp. .......................... 66,950 1,464,531
------------
3,346,281
------------
Financial Services -- 2.1%
DVI, Inc. (b) ...................................... 78,000 1,131,000
Financial Federal Corp. (b) ........................ 58,000 1,276,000
First Plus Financial Group, Inc. (b) ............... 24,200 822,800
WFS Financial, Inc. (b) ............................ 63,790 1,068,483
------------
4,298,283
------------
Food - Packaged and Misc. -- 2.5%
International Multifoods Corp. ..................... 40,300 1,012,538
Lance, Inc. ........................................ 91,100 1,742,287
Michaels Foods Inc. ................................ 108,600 2,009,100
Weider Nutrition International, Inc. ............... 14,000 222,250
------------
4,986,175
------------
Freight Transportation -- 2.0%
Circle International Group, Inc. ................... 88,700 2,339,463
Pittston Burlington Group (b) ...................... 61,600 1,732,500
------------
4,071,963
------------
Health Care - Drugs -- 1.0%
Bindley Western Industries, Inc. ................... 83,700 1,919,869
------------
Health Care - Medical Technology -- 5.7%
C.R. Bard, Inc. .................................... 37,000 1,343,563
Conmed Corp. (b) ................................... 91,575 1,556,775
Gulf South Medical Supply, Inc. (b) ................ 85,800 1,673,100
Hologic, Inc. (b) .................................. 58,500 1,557,562
Invacare Corp. ..................................... 84,900 1,984,537
Marquette Medical Systems (Class A) (b) ............ 55,400 1,218,800
Sofamor Danek Group, Inc. (b) ...................... 21,150 967,613
Sola International, Inc. ........................... 32,800 1,098,800
------------
11,400,750
------------
Health Care - Services -- 5.7%
Compdent Corp. ..................................... 7,500 157,969
Grancare, Inc. (b) ................................. 119,342 1,290,385
Healthplan Services Corp. (b) ...................... 97,600 1,842,200
Integrated Health Services, Inc. (b) ............... 51,700 1,990,450
PhyMatrix Corp. (b) ................................ 44,500 684,187
Physicians Resource Group, Inc. (b) ................ 67,400 606,600
Rotech Medical Corp. (b) ........................... 75,700 1,518,731
Sierra Health Services, Inc. (b) ................... 55,700 1,740,625
Vitalink Pharmacy Services, Inc. (b) ............... 78,645 1,504,086
------------
11,335,233
------------
Home Products -- 2.6%
Aptargroup, Inc. ................................... 13,400 606,350
Bush Boake Allen, Inc. (b) ......................... 27,000 840,375
Premark International, Inc. ........................ 79,400 2,123,950
US Can Corp. (b) ................................... 114,300 1,628,775
------------
5,199,450
------------
Hotels & Restaurants -- 0.4%
Buffets, Inc. ...................................... 52,800 445,500
Cooker Restaurant Corp. ............................ 34,600 369,788
------------
815,288
------------
Housing & Building Materials -- 2.5%
Crossman Communities, Inc. (b) ..................... 28,600 607,750
Dayton Superior Corp. (b) .......................... 49,700 633,675
Giant Cement Holding, Inc. (b) ..................... 84,900 1,591,875
Toro Co. ........................................... 55,700 2,109,638
------------
4,942,938
------------
Insurance -- 8.3%
Allied Group, Inc. ................................. 61,300 2,329,400
Capital Reinsurance Corp. .......................... 42,400 2,268,400
Capmac Holdings, Inc. .............................. 37,700 1,267,662
Everest Reinsurance Holdings, Inc. (b) ............. 76,400 3,027,350
Protective Life Corp. .............................. 56,300 2,829,075
Reinsurance Group of America ....................... 33,900 1,949,250
TIG Holdings, Inc. ................................. 59,100 1,846,875
Triad Guaranty, Inc. ............................... 25,700 1,166,138
------------
16,684,150
------------
Leisure -- 1.7%
Harman International Industries, Inc. .............. 42,335 1,783,362
Scientific Games Holdings Corp. (b) ................ 78,000 1,608,750
------------
3,392,112
------------
Machinery -- 1.9%
BW/IP, Inc. ........................................ 60,000 1,218,750
Brown & Sharpe Manufacturing Co. (b) ............... 53,300 806,163
Greenfield Industries, Inc. ........................ 52,600 1,420,200
Hardinge, Inc. ..................................... 12,300 359,775
------------
3,804,888
------------
Media & Entertainment -- 2.3%
Banta Corp. ........................................ 61,374 1,664,770
Cadmus Communications Corp. ........................ 64,700 1,002,850
Houghton Mifflin Co. ............................... 27,600 1,842,300
------------
4,509,920
------------
Metals -- 3.6%
Agnico-Eagle Mines Ltd. ............................ 93,000 895,125
Citation Corp. Alabama (b) ......................... 69,350 1,187,619
Lone Star Technologies, Inc. (b) ................... 44,900 1,285,262
LTV Corp. .......................................... 70,200 1,000,350
Oregon Steel Mills, Inc. ........................... 104,100 2,075,494
UNR Industries, Inc. ............................... 112,900 776,187
------------
7,220,037
------------
Multi - Industry -- 2.8%
Apogee Enterprises, Inc. ........................... 16,200 348,300
Griffon Corp. (b) .................................. 113,750 1,556,953
Insilco Corp. (b) .................................. 22,200 832,500
Viad Corp. ......................................... 147,000 2,829,750
------------
5,567,503
------------
Natural Gas - Pipelines -- 0.4%
Public Service Company of North Carolina, Inc. ..... 43,500 834,656
------------
Oil - Independent Producers -- 1.5%
Lomak Petroleum, Inc. .............................. 91,200 1,624,500
Vintage Petroleum, Inc. (b) ........................ 43,000 1,322,250
------------
2,946,750
------------
Oil - Services -- 5.2%
Falcon Drilling Co., Inc. (b) ...................... 23,000 1,325,375
Key Energy Group, Inc. (b) ......................... 56,200 1,001,062
Pride International, Inc. (b) ...................... 101,300 2,431,200
Seitel, Inc. (b) ................................... 43,600 1,656,800
Tuboscope Vetco International Corp. (b) ............ 82,000 1,629,750
Weatherford Enterra, Inc. (b) ...................... 59,400 2,286,900
------------
10,331,087
------------
Paper Products -- 0.1%
Wausau Paper Mills Co. ............................. 8,200 154,775
------------
Real Estate - Investment Trusts -- 8.3%
American General Hospitality Corp. ................. 87,500 2,165,625
Brandywine Realty Corp. ............................ 78,500 1,589,625
Cali Realty Corp. .................................. 66,200 2,250,800
Capstone Capital Corp. ............................. 102,900 2,521,050
Health Care Property Investments, Inc. ............. 62,300 2,196,075
Koger Equity, Inc. (b) ............................. 107,300 1,958,225
Liberty Property ................................... 78,600 1,955,175
Sun Communities, Inc. .............................. 59,800 2,007,037
------------
16,643,612
------------
Retail - General -- 0.6%
Family Dollar Stores, Inc. ......................... 42,800 1,166,300
------------
Retail - Specialty -- 3.7%
Carson Pirie Scott & Co. (b) ....................... 29,500 936,625
Cato Corp. (Class A) (b) ........................... 80,575 438,127
Heilig-Meyers Co. .................................. 89,500 1,756,437
Tandycrafts, Inc. (b) .............................. 70,900 336,775
The Wet Seal, Inc. (Class A) (b) ................... 37,100 1,170,969
United Auto Group, Inc. ............................ 56,000 1,109,500
Zale Corp. (b) ..................................... 83,900 1,662,269
------------
7,410,702
------------
Telecommunications -- 1.6%
Aliant Communications, Inc. ........................ 87,000 1,696,500
Inter-Tel, Inc. (b) ................................ 75,400 1,602,250
------------
3,298,750
------------
Textile & Apparel -- 0.3%
Timberland Co. (b) ................................. 9,100 586,950
------------
Utilities - Electric -- 1.0%
Calpine Corp. (b) .................................. 102,500 1,947,500
------------
TOTAL COMMON STOCKS
(Identified Cost $153,228,978).................... 181,918,949
------------
Face
Amount
- --------------------------------------------------------------------------------
Short-Term Investments -- 8.6% of Total Net Assets
Associates Corp. of North America,
6.100%, 7/01/97 ................................. $9,407,293 9,407,293
Chevron Oil Finance Co., 5.500%, 7/01/97 .......... 7,800,000 7,800,000
------------
17,207,293
------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $17,207,293).................... 17,207,293
------------
TOTAL INVESTMENTS -- 99.6%
(IDENTIFIED COST $170,436,271) (c) ................. $199,126,242
Cash, Receivables and Other Assets................. 2,331,457
Liabilities........................................ (1,598,299)
------------
TOTAL NET ASSETS -- 100% ............................ $199,859,400
============
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1997, the net unrealized appreciation on investments based on
cost of $170,436,271 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there is
an excess of value over tax cost and aggregate gross unrealized depreciation
for all securities in which there is an excess of tax cost over value were
$32,753,591 and $4,063,620, respectively, resulting in net unrealized
appreciation of $28,689,971.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES STRATEGIC VALUE FUND
Investments -- as of June 30, 1997 (unaudited)
Shares Value (a)
- --------------------------------------------------------------------------------
Common Stocks -- 95.9% of Total Net Assets
Aerospace -- 3.4%
Sundstrand Corp. .......................................... 600 $ 33,488
---------
Auto & Related -- 2.3%
General Motors Corp. ...................................... 400 22,275
---------
Banks/Savings & Loans -- 2.6%
Fleet Financial Group, Inc. ............................... 400 25,300
---------
Chemicals - Major -- 7.9%
E.I. Dupont DeNemours & Co. ............................... 600 37,725
Georgia Gulf Corp. ........................................ 400 11,625
Praxair, Inc. ............................................. 500 28,000
---------
77,350
---------
Chemicals - Specialty -- 2.7%
Crompton & Knowles Corp. .................................. 1,200 26,700
---------
Computer Software & Services -- 4.6%
Computer Associates International, Inc. ................... 800 44,550
---------
Electronic Components -- 9.9%
Applied Materials, Inc. (b) ............................... 500 35,406
Intel Corp. ............................................... 250 35,453
Texas Instruments, Inc. ................................... 300 25,219
---------
96,078
---------
Electronics -- 5.0%
Westinghouse Electric Corp. ............................... 2,100 48,563
---------
Forest Products -- 2.6%
Georgia Pacific Corp. ..................................... 300 25,613
---------
Freight Transportation -- 10.2%
Burlington Northern Santa Fe Corp. ........................ 300 26,962
CNF Transportation, Inc. .................................. 800 25,800
Federal Express Corp. (b) ................................. 400 23,100
Ryder System, Inc. ........................................ 700 23,100
---------
98,962
---------
Hotels & Restaurants -- 1.7%
Harrah's Entertainment, Inc. (b) .......................... 900 16,425
---------
Housing & Building Materials -- 6.4%
Black & Decker Corp. ...................................... 1,000 37,187
Masco Corp. ............................................... 600 25,050
---------
62,237
---------
Insurance -- 3.0%
USF&G Corp. ............................................... 1,200 28,800
---------
Leisure -- 2.4%
Eastman Kodak Co. ......................................... 300 23,025
---------
Metals -- 6.9%
Inland Steel Industries, Inc. ............................. 800 20,900
LTV Corp. ................................................. 1,000 14,250
UCAR International, Inc. .................................. 400 18,300
USX-US Steel Group, Inc. .................................. 400 14,025
---------
67,475
---------
Multi - Industry -- 2.6%
Viad Corp. ................................................ 1,300 25,025
---------
Office Equipment -- 9.1%
EMC Corp. (b) ............................................. 900 35,100
International Business Machines Corp. ..................... 300 27,056
Sun Microsystems, Inc. (b) ................................ 700 26,053
---------
88,209
---------
Paper Products -- 2.2%
Crown, Cork & Seal Co., Inc. .............................. 400 21,375
---------
Retail - Food & Drug -- 4.2%
Kroger Co. (b) ............................................ 1,400 40,600
---------
Retail - General -- 2.5%
Federated Department Stores, Inc. (b) ..................... 700 24,325
---------
Textile & Apparel -- 3.7%
Reebok International Ltd. (b) ............................. 500 23,375
Warnaco Group, Inc. (Class A) ............................. 400 12,750
---------
36,125
---------
TOTAL COMMON STOCKS (Identified Cost $825,251)............. 932,500
---------
TOTAL INVESTMENTS -- 95.9% (IDENTIFIED COST $825,251) (c) ... $ 932,500
Cash, Receivables and Other Assets......................... 85,967
Liabilities................................................ (46,092)
---------
TOTAL NET ASSETS -- 100% .................................... $ 972,375
=========
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1997, the net unrealized appreciation on investments based on
cost of $825,251 for federal income tax purposes was as follows: Aggregate
gross unrealized appreciation for all securities in which there is an excess
of value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were $109,595
and $2,346, respectively, resulting in net unrealized appreciation of
$107,249.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND
Investments -- as of June 30, 1997 (unaudited)
Face
Currency Amount Value (a)
- --------------------------------------------------------------------------------
Bonds And Notes -- 34.7% of Total Net Assets
Australia -- 1.0%
QTC Global Aud Bon, 8.000%, 9/14/07 .......... AUD 100,000 $ 79,758
----------
Germany -- 1.9%
Federal Republic of Germany, 6.000%, 2/16/06 . DEM 250,000 147,771
----------
Ireland -- 1.1%
Republic of Ireland, 8.250%, 8/18/15 ......... IP 50,000 86,810
----------
Japan -- 1.5%
Sumitomo Bank International, 0.750%, 5/31/01 . JPY 10,000,000 111,334
----------
New Zealand -- 1.4%
Government of New Zealand, 8.000%, 11/15/06 .. NZD 150,000 109,280
----------
Argentina -- 1.8%
Republic of Argentina, 6.750%, 3/31/05 (g) ... USD 145,530 136,708
----------
Philippines -- 1.9%
Filinvest Land, Inc., 3.750%, 2/01/02 ........ USD 150,000 141,991
----------
Thailand -- 1.1%
Loxley Public Co., 2.500%, 4/04/01 ........... USD 100,000 87,000
----------
United States -- 20.4%
Apple Computer, Inc., 6.500%, 2/15/04 ........ USD 250,000 210,000
Arch Communications Group, Inc.,
Zero Coupon Bond, 3/15/08 (b) .............. USD 300,000 159,000
Builders Transportation, Inc., 8.000%, 8/15/05 USD 95,000 48,450
CML Group, Inc., 5.500%, 1/15/03 ............. USD 150,000 106,875
Dillon Read Structured Finance Corp.,
6.660%, 8/15/10 ............................ USD 177,273 156,000
Envirotest Systems Corp., 9.625%, 4/01/03 .... USD 50,000 44,000
Fieldcrest Cannon, Inc., 6.000%, 3/15/12 ..... USD 200,000 159,000
Geneva Steel Co., 9.500%, 1/15/04 ............ USD 75,000 60,000
Penn Traffic Co., 9.625%, 4/15/05 ............ USD 375,000 198,750
Softkey International, Inc., 5.500%, 11/01/00 USD 300,000 245,250
TCI Communications, Inc., 7.875%, 2/15/26 .... USD 100,000 96,100
Unisys Corp., 9.750%, 9/15/16 ................ USD 72,000 70,920
----------
1,554,345
----------
South Africa -- 2.6%
Republic of South Africa, 12.000%, 2/28/05 ... ZAR 1,000,000 196,605
----------
TOTAL BONDS AND NOTES
(Identified Cost $2,608,843) ............... 2,651,602
----------
Shares
- --------------------------------------------------------------------------------
Common Stocks -- 57.8% of Total Net Assets
Australia -- 2.2%
ERG Ltd. ..................................... 145,000 164,202
----------
Canada -- 1.9%
Abacan Resources Corp. (New) (c) ............. 15,400 49,088
Potash Corp. of Saskatchewan ................. 1,300 97,581
----------
146,669
----------
Finland -- 2.6%
Merita Ltd. .................................. 60,000 199,904
----------
Germany -- 3.6%
Duerr AG ..................................... 6,700 276,645
----------
Hong Kong -- 2.1%
CDL Hotels International Ltd. ................ 400,000 162,633
----------
Japan -- 2.8%
Honda Motor Co. .............................. 7,000 210,880
----------
New Zealand -- 2.8%
PDL Holdings Ltd. ............................ 40,000 210,970
----------
Spain -- 2.7%
Aguas de Barcelona, (c) ...................... 5,000 204,504
----------
Sweden -- 4.8%
Esselte AB ................................... 8,000 188,564
SKF AB ....................................... 7,000 181,312
----------
369,876
----------
United States -- 32.3%
Analog Devices, Inc., (c) .................... 4,766 126,597
BankBoston Corp. ............................. 1,700 122,506
Bell Atlantic Corp. .......................... 1,700 128,987
Boeing Co. ................................... 1,750 92,859
Burlington Northern Santa Fe Corp. ........... 1,600 143,800
Cabletron Systems, Inc., (c) ................. 2,500 70,781
Carnival Corp. ............................... 2,700 111,375
CVS Corp. .................................... 2,600 133,250
Eli Lilly & Co. .............................. 1,500 163,969
Glaxo Wellcome Plc, ADR (d) .................. 4,000 167,250
Harnischfeger Industries, Inc. ............... 1,600 66,400
Household International, Inc. ................ 1,000 117,438
International Business Machines Corp. ........ 1,400 126,263
Manpower, Inc. ............................... 2,500 111,250
Monsanto Co. ................................. 3,200 137,800
Praxair, Inc. ................................ 2,700 151,200
Rockwell International Corp. (New) ........... 2,100 123,900
Schlumberger Ltd. ............................ 1,200 150,000
Texaco, Inc. ................................. 1,000 108,750
Transocean Offshore, Inc. .................... 1,500 108,938
----------
2,463,313
----------
TOTAL COMMON STOCKS
(Identified Cost $4,047,107) ............... 4,409,596
----------
- --------------------------------------------------------------------------------
Preferred Stocks -- 2.8% of Total Net Assets
Japan -- 2.8%
Sakura Finance, 0.75% ........................ 24,000,000 211,666
----------
TOTAL PREFERRED STOCKS
(Identified Cost $186,152) ................. 211,666
----------
Face
Amount
- --------------------------------------------------------------------------------
Short-Term Investment -- 3.4% of Total Net Assets
Repurchase Agreement with State Street
Bank and Trust Co., dated 6/30/97 at
5.00% to be repurchased at $258,036 on
7/01/97 collateralized by $250,000
U.S.Treasury Bond 7.25%, due 5/15/16,
with a value of $263,945 ................... $258,000 258,000
----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $258,000) ................. 258,000
----------
TOTAL INVESTMENTS -- 98.7%
(IDENTIFIED COST $7,100,102) (d) ............. $7,530,864
Cash, Receivables and Other Assets (f) ....... 154,267
Liabilities .................................. (58,020)
----------
TOTAL NET ASSETS -- 100% ....................... $7,627,111
==========
(a) See Note 1.
(b) Step Bond: Coupon rate is zero or below market rate for an initial period
and then increases to a higher coupon rate at a specified date and rate.
(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.
(e) At June 30, 1997, the net unrealized appreciation on investments based on
cost of $7,100,102 for federal income tax purposes was as follows: Aggregate
gross unrealized appreciation for all securities in which there is an excess
of value over tax cost and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over value were $734,560
and $303,798, respectively, resulting in net unrealized appreciation of
$430,762.
(f) Including deposits in foreign denominated currencies with a value of $23 and
a cost of $23.
(g) Floating rate bond: 6 month LIBOR +.8125% rate at end of period.
Currency Terms:
AUD = Australian Dollar NZD = New Zealand Dollar
DEM = Deutsche Mark USD = U.S. Dollar
IP = Irish Punt ZAR = South African Rand
JPY = Japanese Yen
Ten largest industry holdings at June 30, 1997 (unaudited)
Foreign Government/Agency 9.9%
Computer 6.9%
Chemicals - Major 5.1%
Telecommunications 5.1%
Office Equipment 5.1%
Retail 5.0%
Foreign Issuer 3.9%
Industrial Equipment 3.6%
Repurchase Agreement 3.4%
Oil Services 3.4%
See accompanying notes to financial statements.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Core Growth International
Value Fund Fund Equity Fund
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS
Investments at value:
Securities ............................... $ 53,105,819 $ 33,127,290 $ 95,818,299
Repurchase agreements .................... 0 0 6,266,000
------------- ------------- -------------
Total investments ...................... 53,105,819 33,127,290 102,084,299
Cash ....................................... 0 0 632
Foreign currency at value .................. 0 0 81,367
Receivable for:
Shares of the Fund sold .................. 59,843 18,379 45,636
Securities sold .......................... 0 0 0
Dividend and interest -- net ............. 57,972 13,450 85,064
Foreign tax reclaim ...................... 1,578 0 26,873
Due from the adviser (Note 3) .............. 13,959 28,699 79,892
Other assets ............................... 6,561 6,561 6,332
------------- ------------- -------------
53,245,732 33,194,379 102,410,095
------------- ------------- -------------
LIABILITIES
Payable for:
Securities purchased ..................... 229,807 0 0
Shares of the Fund redeemed .............. 41,091 60,378 0
Foreign taxes ............................ 0 0 4,364
Accrued expenses:
Management fees (Note 3) ................. 20,977 13,886 62,487
Trustees' fees (Note 3B) ................. 1,250 1,250 1,250
Accounting and administration (Note 3A) .. 4,793 3,390 9,871
Other expenses ........................... 32,047 23,710 81,076
Organization costs ....................... 0 0 0
------------- ------------- -------------
329,965 102,614 159,048
------------- ------------- -------------
NET ASSETS ................................... $ 52,915,767 $ 33,091,765 $ 102,251,047
============= ============= =============
Net Assets consist of:
Capital paid in .......................... $ 35,506,711 $ 22,189,791 $ 81,781,634
Undistributed (or Distribution in excess
of) net investment income .............. 279,546 (14,294) 838,274
Accumulated net realized gain (loss) ..... 4,798,421 5,306,609 4,341,648
Unrealized appreciation (depreciation) on:
Investments ............................ 12,331,089 5,609,659 15,291,852
Foreign currency transactions .......... 0 0 (2,361)
------------- ------------- -------------
NET ASSETS ................................... $ 52,915,767 $ 33,091,765 $ 102,251,047
============= ============= =============
INSTITUTIONAL CLASS:
Net assets ................................. $ 52,402,648 $ 32,923,669 $ 101,981,934
Shares of beneficial interest outstanding,
no par value ............................. 2,849,946 2,252,726 7,071,060
Net asset value and redemption price per
Institutional share ...................... $ 18.39 $ 14.62 $ 14.42
RETAIL CLASS:
Net assets ................................. $ 513,119 $ 168,096 $ 269,113
Shares of beneficial interest outstanding,
no par value ............................. 27,948 11,516 18,683
Net asset value and redemption price per
Retail share ............................. $ 18.36 $ 14.60 $ 14.40
Identified cost of investments ............... $ 40,774,730 $ 27,517,631 $ 86,792,447
============= ============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Mid-Cap Mid-Cap Small Cap Small Cap Strategic
Growth Value Growth Value Value Worldwide
Fund Fund Fund Fund Fund Fund
------------ ------------ ------------ -------------- ---------- ------------
<S> <C> <C> <C> <C> <C>
$ 1,526,962 $ 2,213,653 $ 3,209,285 $ 199,126,242 $ 932,500 $ 7,272,864
0 231,000 114,000 0 0 258,000
------------ ------------ ------------ -------------- ---------- ------------
1,526,962 2,444,653 3,323,285 199,126,242 932,500 7,530,864
93,948 574 2 0 8,944 471
0 0 0 0 0 23
0 0 3,030 386,405 0 20
0 0 93,112 1,726,337 0 0
186 2,505 16 202,514 502 77,941
0 0 0 0 0 744
67,373 70,549 75,142 9,364 57,729 67,443
14,115 14,076 14,266 6,837 18,792 7,625
------------ ------------ ------------ -------------- ---------- ------------
1,702,584 2,532,357 3,508,853 201,457,699 1,018,467 7,685,131
------------ ------------ ------------ -------------- ---------- ------------
0 25,597 132,378 1,299,828 0 0
0 0 0 104,946 0 0
0 0 0 0 0 1,668
997 997 1,917 119,746 382 4,641
1,250 1,250 1,250 1,250 1,250 1,250
132 199 256 18,061 67 749
20,086 22,661 27,625 54,468 18,632 49,712
26,061 26,061 26,061 0 25,761 0
------------ ------------ ------------ -------------- ---------- ------------
48,526 76,765 189,487 1,598,299 46,092 58,020
------------ ------------ ------------ -------------- ---------- ------------
$ 1,654,058 $ 2,455,592 $ 3,319,366 $ 199,859,400 $ 972,375 $ 7,627,111
============ ============ ============ ============== ========== ============
$ 1,569,321 $ 2,206,892 $ 3,128,667 $ 152,747,661 $ 865,627 $ 6,970,632
(1,105) 9,025 (6,395) 798,172 614 152,677
31,805 39,770 (231,160) 17,623,596 (1,115) 73,477
54,037 199,905 428,254 28,689,971 107,249 430,762
0 0 0 0 0 (437)
------------ ------------ ------------ -------------- ---------- ------------
$ 1,654,058 $ 2,455,592 $ 3,319,366 $ 199,859,400 $ 972,375 $ 7,627,111
============ ============ ============ ============== ========== ============
$ 1,589,617 $ 2,393,815 $ 2,774,510 $ 189,962,289 $ 706,375 $ 7,608,421
148,220 210,574 269,778 9,666,539 60,737 680,893
$ 10.72 $ 11.37 $ 10.28 $ 19.65 $ 11.63 $ 11.17
$ 64,441 $ 61,777 $ 544,856 $ 9,897,111 $ 266,000 $ 18,690
6,014 5,442 52,991 504,343 22,902 1,674
$ 10.72 $ 11.35 $ 10.28 $ 19.62 $ 11.61 $ 11.16
$ 1,472,925 $ 2,244,748 $ 2,895,031 $ 170,436,271 $ 825,251 $ 7,100,102
============ ============ ============ ============== ========== ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Core International
Value Growth Equity
Fund Fund Fund
------------ ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends* ..................................... $ 425,700 $ 109,068 $ 1,162,855
Interest ....................................... 35,717 14,430 122,999
------------ ------------ ------------
461,417 123,498 1,285,854
------------ ------------ ------------
Expenses
Management fees (Note 3) ..................... 117,454 89,247 354,652
12b-1 fees (Retail Class) .................... 217 392 156
Trustees' fees and expenses (Note 3B) ........ 2,985 2,985 2,985
Accounting and administrative fees
(Note 3A) .................................. 10,200 7,586 20,832
Custodian .................................... 31,463 29,029 120,657
Transfer Agent (Institutional Class) ......... 15,613 14,923 17,076
Transfer Agent (Retail Class) ................ 9,982 9,948 9,195
Audit and tax services ....................... 8,650 8,650 10,150
Legal ........................................ 1,581 1,343 2,183
Printing ..................................... 3,169 3,081 3,637
Registration fees ............................ 6,918 5,478 5,821
Amortization of organization expenses
(Note 1I) .................................. 0 0 0
Amortization of deferred registration costs
(Note 1I) .................................. 5,178 5,263 5,283
Miscellaneous expenses ....................... 289 289 289
------------ ------------ ------------
213,699 178,214 552,916
------------ ------------ ------------
Less expenses assumed by the investment
adviser (Note 3) ........................... (13,959) (28,699) (79,892)
------------ ------------ ------------
Net investment income (loss) ................... 261,677 (26,017) 812,830
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Realized gain (loss) on:
Investments -- net ........................... 3,820,588 4,197,314 3,172,315
Foreign currency transactions -- net ......... 0 0 (157,628)
------------ ------------ ------------
Total realized gain (loss) on investments and
foreign currency transactions .............. 3,820,588 4,197,314 3,014,687
------------ ------------ ------------
Unrealized appreciation (depreciation) on:
Investments -- net ........................... 3,743,153 (1,216,579) 5,195,604
Foreign currency transactions -- net ......... 0 0 (2,026)
------------ ------------ ------------
Total unrealized appreciation (depreciation)
on investments and foreign currency
transactions ............................... 3,743,153 (1,216,579) 5,193,578
------------ ------------ ------------
Net gain on investments and foreign currency
transactions ................................. 7,563,741 2,980,735 8,208,265
------------ ------------ ------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ....... $ 7,825,418 $ 2,954,718 $ 9,021,095
============ ============ ============
*Net of foreign withholding taxes of $1,141 and $147,699 for the Core Value and International Equity Funds, respectively.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Mid-Cap Mid-Cap Small Cap Small Cap Strategic
Growth Value Growth Value Value Worldwide
Fund Fund Fund Fund Fund Fund
--------- ---------- -------- ----------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 2,881 $ 13,206 $ 1,485 $ 1,076,487 $ 3,364 $ 39,344
2,421 4,798 3,372 511,062 504 135,712
--------- ---------- -------- ----------- -------- --------
5,302 18,004 4,857 1,587,549 3,868 175,056
--------- ---------- -------- ----------- -------- --------
4,763 6,700 8,215 659,706 1,604 25,982
56 47 300 6,902 47 7
2,709 2,709 2,709 2,985 2,709 2,985
329 475 584 38,242 163 1,555
24,196 27,511 32,832 60,327 21,584 29,977
9,526 9,816 9,800 32,776 7,970 8,278
9,526 9,432 9,416 11,516 7,970 7,954
5,175 5,175 5,175 10,900 5,175 8,850
965 975 979 3,241 953 1,037
1,742 1,857 1,742 9,774 1,742 1,808
2,847 2,847 2,847 23,853 4,097 6,823
0 0 0 0 0 3,102
11,946 11,984 11,795 5,704 6,969 3,735
0 0 0 289 0 0
--------- ---------- -------- ----------- -------- --------
73,780 79,528 86,394 866,215 60,983 102,093
--------- ---------- -------- ----------- -------- --------
(67,373) (70,549) (75,142) (9,364) (57,729) (67,443)
--------- ---------- -------- ----------- -------- --------
(1,105) 9,025 (6,395) 730,698 614 140,406
--------- ---------- -------- ----------- -------- --------
31,805 39,770 (231,160) 15,546,648 (1,115) 96,700
0 0 0 0 0 (13,108)
--------- ---------- -------- ----------- -------- --------
31,805 39,770 (231,160) 15,546,648 (1,115) 83,592
--------- ---------- -------- ----------- -------- --------
54,037 199,905 428,254 6,238,970 107,249 138,051
0 0 0 0 0 (277)
--------- ---------- -------- ----------- -------- --------
54,037 199,905 428,254 6,238,970 107,249 137,774
--------- ---------- -------- ----------- -------- --------
85,842 239,675 197,094 21,785,618 106,134 221,366
--------- ---------- -------- ----------- -------- --------
$ 84,737 $ 248,700 $190,699 $22,516,316 $106,748 $361,772
========= ========== ======== =========== ======== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Core Value
------------------------------------------------
Six Months Ended Year Ended
-------------------- ---------------------
June 30, 1997 December 31, 1996
-------------------- ---------------------
(Unaudited)
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) .............. $ 261,677 $ 569,067
Net realized gain (loss) on:
Investments ............................. 3,820,588 4,564,278
Foreign currency transactions ........... 0 0
Unrealized appreciation (depreciation) on:
Investments ............................. 3,743,153 2,599,063
Foreign currency transactions ........... 0 0
----------- -----------
Increase (decrease) in net assets from
operations ............................ 7,825,418 7,732,408
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ................... 0 (559,278)
Net realized gain on investments ........ 0 (4,547,630)
RETAIL CLASS
Net investment income ................... 0 0
Net realized gain on investments ........ 0 0
----------- -----------
0 (5,106,908)
----------- -----------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 5)
INSTITUTIONAL CLASS
Increase (decrease) in net assets derived
from capital share transactions ............ 881,613 4,624,659
RETAIL CLASS
Increase (decrease) in net assets derived
from capital share transactions ....... 493,281 0
----------- -----------
Total increase (decrease) in net assets ... 9,200,312 7,250,159
NET ASSETS
Beginning of the period ................... 43,715,455 36,465,296
----------- -----------
End of the period ......................... $52,915,767 $43,715,455
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ................... $ 17,869 $ 8,080
=========== ===========
End of the period ......................... $ 279,546 $ 17,869
=========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Growth
-------------------------------------------
Six Months Ended Year Ended
-------------------- ---------------------
June 30, 1997 December 31, 1996
-------------------- ---------------------
(Unaudited)
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) .............. $ (26,017) $ (200,707)
Net realized gain (loss) on:
Investments ............................. 4,197,314 10,636,248
Foreign currency transactions ........... 0 0
Unrealized appreciation (depreciation) on:
Investments ............................. (1,216,579) (2,736,567)
Foreign currency transactions ........... 0 0
------------- ------------
Increase (decrease) in net assets from
operations ............................ 2,954,718 7,698,974
------------- ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ................... 0 0
Net realized gain on investments ........ 0 (10,947,610)
RETAIL CLASS
Net investment income ................... 0 0
Net realized gain on investments ........ 0 0
------------- ------------
0 (10,947,610)
------------- ------------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 5)
INSTITUTIONAL CLASS
Increase (decrease) in net assets derived
from capital share transactions ....... (9,550,841) (2,265,225)
RETAIL CLASS
Increase (decrease) in net assets derived
from capital share transactions ....... 190,977 0
------------- ------------
Total increase (decrease) in net assets ... (6,405,146) (5,513,861)
NET ASSETS
Beginning of the period ................... 39,496,911 45,010,772
------------
End of the period ......................... $ 33,091,765 $ 39,496,911
============= ============
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ................... $ 11,723 $ 0
============= ============
End of the period ......................... $ (14,294) $ 11,723
============= ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
International Equity
----------------------------------------------
Six Months Ended Year Ended
---------------- -----------------
June 30, 1997 December 31, 1996
---------------- -----------------
(Unaudited)
FROM OPERATIONS
<S> <C> <C>
Net investment income (loss) .............. $ 812,830 $ 816,303
Net realized gain (loss) on:
Investments ............................. 3,172,315 7,196,095
Foreign currency transactions ........... (157,628) (2,186,541)
Unrealized appreciation (depreciation) on:
Investments ............................. 5,195,604 8,437,464
Foreign currency transactions ........... (2,026) (5,261)
------------- ------------
Increase (decrease) in net assets from
operations ............................ 9,021,095 14,258,060
------------- ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ................... 0 (566,307)
Net realized gain on investments ........ 0 (3,500,683)
RETAIL CLASS
Net investment income ................... 0 0
Net realized gain on investments ........ 0 0
------------- ------------
0 (4,066,990)
------------- ------------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 5)
INSTITUTIONAL CLASS
Increase (decrease) in net assets derived
from capital share transactions ....... 2,315,220 983,155
RETAIL CLASS
Increase (decrease) in net assets derived
from capital share transactions ....... 252,297 0
------------- ------------
Total increase (decrease) in net assets ... 11,588,612 11,174,225
NET ASSETS
Beginning of the period ................... 90,662,435 79,488,210
------------- ------------
End of the period ......................... $ 102,251,047 $ 90,662,435
============= ============
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ................... $ 25,444 $ 26,969
============= ============
End of the period ......................... $ 838,274 $ 25,444
============= ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Mid-Cap Growth Mid-Cap Value Small Cap Growth
-------------------- -------------------- --------------------
Six Months Ended Six Months Ended Six Months Ended
-------------------- -------------------- --------------------
June 30, 1997* June 30, 1997* June 30, 1997*
-------------------- -------------------- --------------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) ...... $ (1,105) $ 9,025 $ (6,395)
Net realized gain (loss) on:
Investments ..................... 31,805 39,770 (231,160)
Foreign currency transactions ... 0 0 0
Unrealized appreciation
(depreciation) on:
Investments ..................... 54,037 199,905 428,254
Foreign currency transactions ... 0 0 0
---------- ---------- ----------
Increase (decrease) in net assets
from operations ............... 84,737 248,700 190,699
---------- ---------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ........... 0 0 0
Net realized gain on investments 0 0 0
RETAIL CLASS
Net investment income ........... 0 0 0
Net realized gain on investments 0 0 0
---------- ---------- ----------
0 0 0
---------- ---------- ----------
FROM CAPITAL SHARES TRANSACTIONS
(NOTE 5)
INSTITUTIONAL CLASS
Increase (decrease) in net assets
derived from capital share
transactions .................. 1,504,155 2,150,036 2,626,148
RETAIL CLASS
Increase (decrease) in net assets
derived from capital share
transactions .................. 65,146 56,836 502,499
---------- ---------- ----------
Total increase (decrease) in net
assets .......................... 1,654,038 2,455,572 3,319,346
NET ASSETS
Beginning of the period ........... 20 20 20
---------- ---------- ----------
End of the period ................. $1,654,058 $2,455,592 $3,319,366
========== ========== ==========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ........... $ 0 $ 0 $ 0
========== ========== ==========
End of the period ................. $ (1,105) $ 9,025 $ (6,395)
========== ========== ==========
*Commencement of operations, January 2, 1997.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Small Cap Value Strategic Value
----------------------------------------------- --------------------
Six Months Ended Year Ended Six Months Ended
-------------------- --------------------- --------------------
June 30, 1997 December 31, 1996 June 30, 1997*
-------------------- --------------------- --------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) ..... $ 730,698 $ 899,050 $ 614
Net realized gain (loss) on:
Investments .................... 15,546,648 17,761,764 (1,115)
Foreign currency transactions .. 0 0 0
Unrealized appreciation
(depreciation) on:
Investments .................... 6,238,970 12,441,612 107,249
Foreign currency transactions .. 0 0 0
------------ ------------ --------
Increase (decrease) in net
assets from operations ....... 22,516,316 31,102,426 106,748
------------ ------------ --------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income .......... 0 (847,132) 0
Net realized gain on investments 0 (18,423,872) 0
RETAIL CLASS
Net investment income .......... 0 0 0
Net realized gain on investments 0 0 0
------------ ------------ --------
0 (19,271,004) 0
------------ ------------ --------
FROM CAPITAL SHARES TRANSACTIONS
(NOTE 5)
INSTITUTIONAL CLASS
Increase (decrease) in net
assets derived from capital
share transactions ........... 4,714,497 61,338,511 610,552
RETAIL CLASS
Increase (decrease) in net
assets derived from capital
share transactions ........... 9,003,719 0 255,055
------------ ------------ --------
Total increase (decrease) in net
assets ......................... 36,234,532 73,169,933 972,355
NET ASSETS
Beginning of the period .......... 163,624,868 90,454,935 20
------------ ------------ --------
End of the period ................ $199,859,400 $163,624,868 $972,375
============ ============ ========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period .......... $ 67,474 $ 15,556 $ 0
============ ============ ========
End of the period ................ $ 798,172 $ 67,474 $ 614
============ ============ ========
*Commencement of operations, January 2, 1997.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Worldwide
------------------------------------------------
Six Months Ended Year Ended
-------------------- ---------------------
June 30, 1997 December 31, 1996
-------------------- ---------------------
(Unaudited)
<S> <C> <C>
FROM OPERATIONS
Net investment income (loss) .............. $ 140,406 $ 143,724
Net realized gain (loss) on:
Investments ............................. 96,700 (11,121)
Foreign currency transactions ........... (13,108) 4,393
Unrealized appreciation (depreciation) on:
Investments ............................. 138,051 292,711
Foreign currency transactions ........... (277) (160)
------------ ------------
Increase (decrease) in net assets from
operations ............................ 361,772 429,547
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ................... 0 (140,138)
Net realized gain on investments ........ 0 0
RETAIL CLASS
Net investment income ................... 0 0
Net realized gain on investments ........ 0 0
------------ ------------
0 (140,138)
------------ ------------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 5)
INSTITUTIONAL CLASS
Increase (decrease) in net assets derived
from capital share transactions ...... 2,057,665 4,900,074
RETAIL CLASS
Increase (decrease) in net assets derived
from capital share transactions ....... 18,181 0
------------ ------------
Total increase (decrease) in net assets ... 2,437,618 5,189,483
NET ASSETS
Beginning of the period ................... 5,189,493 10
------------ ------------
End of the period ......................... $ 7,627,111 $ 5,189,493
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ................... $ 12,271 $ 0
============ ============
End of the period ......................... $ 152,677 $ 12,271
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Year Ended December 31,
<TABLE>
<CAPTION>
Core Value Fund
-----------------------------------
Institutional Class
-----------------------------------
1997* 1996
--------- ---------
<S> <C> <C>
Net asset value, beginning of period ............................. $ 15.60 $ 14.57
--------- ---------
Income from investment operations -
Net investment income (loss) ................................... 0.09 0.22
Net realized and unrealized gain (loss) on investments ......... 2.70 2.83
--------- ---------
Total from investment operations ............................. 2.79 3.05
--------- ---------
Less distributions -
Dividends from net investment income ........................... 0.00 (0.22)
Distributions from net realized capital gains .................. 0.00 (1.80)
--------- ---------
Total distributions .......................................... 0.00 (2.02)
--------- ---------
Net asset value, end of period ................................... $ 18.39 $ 15.60
========= =========
Total return (%)(a) .............................................. 17.9 21.2
Net assets, end of period (000) .................................. $ 52,403 $ 43,715
Ratio of operating expenses to average net assets (%)(b) ......... 0.85 1.13
Ratio of net investment income to average net assets (%)(b) ...... 1.11 1.44
Portfolio turnover rate (%) ...................................... 34 58
Average commission rate*** ....................................... $ 0.0550 $ 0.0583
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 (%)(b) ...... 0.85 1.13
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net investment
income per share would have been: .............................. $ 0.09 $ 0.22
(a) Periods less than one year are not annualized.
(b) Annualized for periods less than one year.
* For the six months ended June 30, 1997. (unaudited)
** From commencement of class operations on January 2, 1997, through June 30, 1997. (unaudited)
*** For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its average
commission rate per share for trades upon which commissions are charged. This rate generally does
not reflect mark-ups, mark-downs or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
Year Ended December 31,
<TABLE>
<CAPTION>
Core Value Fund
--------------------------------------------------------------------------------------------------------------
Institutional Class Retail Class
----------------------------------------------------------------------------------- ------------
1995 1994 1993 1992 1997**
--------- --------- --------- --------- --------
<S> <C> <C> <C> <C>
$ 11.80 $ 12.49 $ 11.53 $ 10.54 $ 15.60
--------- --------- --------- --------- --------
0.23 0.15 0.13 0.13 0.02
3.93 (0.26) 1.24 1.36 2.74
--------- --------- --------- --------- --------
4.16 (0.11) 1.37 1.49 2.76
--------- --------- --------- --------- --------
(0.23) (0.15) (0.12) (0.13) 0.00
(1.16) (0.43) (0.29) (0.37) 0.00
--------- --------- --------- --------- --------
(1.39) (0.58) (0.41) (0.50) 0.00
--------- --------- --------- --------- --------
$ 14.57 $ 11.80 $ 12.49 $ 11.53 $ 18.36
========= ========= ========= ========= ========
35.2 (0.9) 11.9 14.1 17.7
$ 36,465 $ 25,946 $ 20,657 $ 12,279 $ 513
1.20 1.33 1.50 1.50 1.10
1.61 1.28 1.23 1.42 0.76
60 48 53 67 34
-- -- -- -- $ 0.0550
1.20 1.33 1.56 2.19 17.12
$ 0.23 $ 0.15 $ 0.12 $ 0.07 $ (0.48)
</TABLE>
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
Year Ended December 31,
<TABLE>
<CAPTION>
Growth Fund
--------------------------------------
Institutional Class
--------------------------------------
1997* 1996
-------- --------
<S> <C> <C>
Net asset value, beginning of period ............................. $ 13.44 $ 15.27
-------- --------
Income from investment operations -
Net investment income (loss) ................................... (0.01) (0.07)
Net realized and unrealized gain (loss) on investments ......... 1.19 3.08
-------- --------
Total from investment operations ............................. 1.18 3.01
-------- --------
Less distributions -
Distributions from net realized capital gains .................. 0.00 (4.84)
Distributions from capital ..................................... 0.00 0.00
-------- --------
Total distributions .......................................... 0.00 (4.84)
-------- --------
Net asset value, end of period ................................... $ 14.62 $ 13.44
======== ========
Total return (%)(a) .............................................. 8.8 19.9
Net assets, end of period (000) .................................. $ 32,924 $ 39,497
Ratio of operating expenses to average net assets (%)(b) ......... 0.85 1.10
Ratio of net investment income to average net assets (%)(b) ...... (0.16) (0.47)
Portfolio turnover rate (%) ...................................... 54 99
Average commission rate*** ....................................... $ 0.0600 $ 0.0600
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 (%)(b) ............. 0.94 1.10
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net investment
income per share would have been: .............................. $ (0.02) $ (0.07)
(a) Periods less than one year are not annualized.
(b) Annualized for periods less than one year.
* For the six months ended June 30, 1997. (unaudited)
** From commencement of class operations on January 2, 1997, through June 30, 1997.
(unaudited)
*** For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its average
commission rate per share for trades upon which commissions are charged. This rate generally does
not reflect mark-ups, mark-downs or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
Year Ended December 31,
<TABLE>
<CAPTION>
Growth Fund
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class Retail Class
- ------------------------------------------------------------------------------------------ ----------------
1995 1994 1993 1992 1997**
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 12.50 $ 13.02 $ 12.46 $ 12.01 $ 13.44
-------- -------- -------- -------- --------
0.00 (0.02) 0.00 (0.04) (0.03)
3.86 (0.45) 1.16 0.49 1.19
-------- -------- -------- -------- --------
3.86 (0.47) 1.16 0.45 1.16
-------- -------- -------- -------- --------
(1.09) (0.04) (0.60) 0.00 0.00
0.00 (0.01) 0.00 0.00 0.00
-------- -------- -------- -------- --------
(1.09) (0.05) (0.60) 0.00 0.00
-------- -------- -------- -------- --------
$ 15.27 $ 12.50 $ 13.02 $ 12.46 $ 14.60
======== ======== ======== ======== ========
30.9 (3.7) 9.3 3.8 8.6
$ 45,011 $ 36,580 $ 32,385 $ 24,451 $ 168
1.08 1.16 1.20 1.50 1.10
(0.29) (0.14) (0.17) (0.45) (0.29)
48 46 64 98 54
-- -- -- -- $ 0.0600
1.08 1.16 1.20 1.51 7.19
$ 0.00 $ (0.02) $ 0.00 $ (0.04) $ (0.87)
</TABLE>
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
Year Ended December 31,
<TABLE>
<CAPTION>
International Equity Fund
----------------------------------
Institutional Class
----------------------------------
1997* 1996
-------- --------
<S> <C> <C>
Net asset value, beginning of period ............................. $ 13.16 $ 11.65
-------- --------
Income from investment operations -
Net investment income (loss) ................................... 0.11 0.12
Net realized and unrealized gain (loss) on investments ......... 1.15 2.01
-------- --------
Total from investment operations ............................. 1.26 2.13
-------- --------
Less distributions -
Dividends from net investment income ........................... 0.00 (0.09)
Distributions from net realized capital gains .................. 0.00 (0.53)
-------- --------
Total distributions .......................................... 0.00 (0.62)
-------- --------
Net asset value, end of period ................................... $ 14.42 $ 13.16
======== ========
Total return (%)(a) .............................................. 9.6 18.3
Net assets, end of period (000) .................................. $101,982 $ 90,662
Ratio of operating expenses to average net assets (%)(b) ......... 1.00 1.42
Ratio of net investment income to average net assets (%)(b) ...... 1.72 0.96
Portfolio turnover rate (%) ...................................... 45 151
Average commission rate*** ....................................... $ 0.0018 $ 0.0013
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 (%)(b) .................... 1.15 1.42
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net investment
income per share would have been: .............................. $ 0.11 $ 0.12
(a) Periods less than one year are not annualized.
(b) Annualized for periods less than one year.
* For the six months ended June 30, 1997. (unaudited)
** From commencement of class operations on January 2, 1997, through June 30, 1997. (unaudited)
*** For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its average
commission rate per share for trades upon which commissions are charged. This rate generally does
not reflect mark-ups, mark-downs or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
Year Ended December 31,
<TABLE>
<CAPTION>
International Equity Fund
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class Retail Class
- ------------------------------------------------------------------------------------------ ----------------
1995 1994 1993 1992 1997**
-------- -------- ------- -------- --------
<S> <C> <C> <C> <C>
$ 11.61 $ 12.90 $ 9.64 $ 10.27 $ 13.16
-------- -------- ------- -------- --------
0.14 0.15 0.11 0.10 0.06
0.87 (0.38) 3.61 (0.62) 1.18
-------- -------- ------- -------- --------
1.01 (0.23) 3.72 (0.52) 1.24
-------- -------- ------- -------- --------
(0.14) (0.14) (0.10) (0.10) 0.00
(0.83) (0.92) (0.36) (0.01) 0.00
-------- -------- ------- -------- --------
(0.97) (1.06) (0.46) (0.11) 0.00
-------- -------- ------- -------- --------
$ 11.65 $ 11.61 $ 12.90 $ 9.64 $ 14.40
======== ======== ======== ======== ========
8.7 (1.8) 38.5 (5.1) 9.4
$ 79,488 $ 73,189 $ 56,560 $ 14,937 $ 269
1.45 1.46 1.50 1.50 1.25
1.16 1.30 1.20 1.64 1.93
133 116 128 101 45
-- -- -- -- $ 0.0018
1.45 1.46 1.72 2.77 16.17
$ 0.14 $ 0.15 $ 0.09 $ 0.02 $ (0.43)
</TABLE>
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (unaudited) (continued)
Six Months Ended June 30,
<TABLE>
<CAPTION>
Mid-Cap Growth Fund
----------------------------------------------
Institutional Class Retail Class
----------------------- ----------------
1997* 1997*
-------- --------
<S> <C> <C>
Net asset value, beginning of period ............ $ 10.00 $ 10.00
-------- --------
Income from investment operations -
Net investment income (loss) .................. (0.01) (0.02)
Net realized and unrealized gain (loss) on
investments ................................. 0.73 0.74
-------- --------
Total from investment operations ............ 0.72 0.72
-------- --------
Less distributions -
Dividends from net investment income .......... 0.00 0.00
Distributions from net realized capital gains . 0.00 0.00
-------- --------
Total distributions ......................... 0.00 0.00
-------- --------
Net asset value, end of period .................. $ 10.72 $ 10.72
======== ========
Total return (%)(a) ............................. 7.2 7.2
Net assets, end of period (000) ................. $ 1,590 $ 64
Ratio of operating expenses to average net assets
(%)(b) ........................................ 1.00 1.25
Ratio of net investment income to average net
assets (%)(b) ................................. (0.16) (0.47)
Portfolio turnover rate (%) ..................... 103 103
Average commission rate** ....................... $ 0.0600 $ 0.0600
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 (%)(b).... 10.17 51.29
Without giving effect to the voluntary expense
limitations described in Note 3 to the
Financial Statements net investment income per
share would have been: ........................ $ (0.39) $ (1.87)
(a) Periods less than one year are not annualized.
(b) Annualized for periods less than one year.
* Commencement of fund operations on January 2, 1997.
** For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its
average commission rate per share for trades upon which commissions are charged. This rate generally does
not reflect mark-ups, mark-downs or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (unaudited) (continued)
Six Months Ended June 30,
<TABLE>
<CAPTION>
Mid-Cap Value Fund
---------------------------------------
Institutional Class Retail Class
------------------- ------------
1997* 1997*
-------- --------
<S> <C> <C>
Net asset value, beginning of period ..................... $ 10.00 $ 10.00
-------- --------
Income from investment operations -
Net investment income (loss) ........................... 0.04 0.03
Net realized and unrealized gain (loss) on
investments .......................................... 1.33 1.32
-------- --------
Total from investment operations ..................... 1.37 1.35
-------- --------
Less distributions -
Dividends from net investment income ................... 0.00 0.00
Distributions from net realized capital gains .......... 0.00 0.00
-------- --------
Total distributions .................................. 0.00 0.00
-------- --------
Net asset value, end of period ........................... $ 11.37 $ 11.35
======== ========
Total return (%)(a) ...................................... 13.7 13.5
Net assets, end of period (000) .......................... $ 2,394 $ 62
Ratio of operating expenses to average net assets
(%)(b) ................................................. 1.00 1.25
Ratio of net investment income to average net
assets (%)(b) .......................................... 1.02 0.76
Portfolio turnover rate (%) .............................. 39 39
Average commission rate** ................................ $ 0.0320 $ 0.0320
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 (%)(b) ................................. 7.87 56.55
Without giving effect to the voluntary expense
limitations described in Note 3 to the
Financial Statements net investment income per
share would have been: ................................. $ (0.24) $ (1.90)
(a) Periods less than one year are not annualized.
(b) Annualized for periods less than one year.
* Commencement of fund operations on January 2, 1997.
** For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its average
commission rate per share for trades upon which commissions are charged. This rate generally does
not reflect mark-ups, mark-downs or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (unaudited) (continued)
Six Months Ended June 30,
<TABLE>
<CAPTION>
Small Cap Growth Fund
------------------------------------------
Institutional Class Retail Class
------------------- ------------
1997* 1997*
-------- --------
<S> <C> <C>
Net asset value, beginning of period ..................... $ 10.00 $ 10.00
-------- --------
Income from investment operations -
Net investment income (loss) ........................... (0.02) (0.02)
Net realized and unrealized gain (loss) on
investments .......................................... 0.30 0.30
-------- --------
Total from investment operations ..................... 0.28 0.28
-------- --------
ess distributions -
Dividends from net investment income ................... 0.00 0.00
Distributions from net realized capital gains .......... 0.00 0.00
-------- --------
Total distributions .................................. 0.00 0.00
-------- --------
Net asset value, end of period ........................... $ 10.28 $ 10.28
======== ========
Total return (%)(a) ...................................... 2.8 2.8
Net assets, end of period (000) .......................... $ 2,775 $ 545
Ratio of operating expenses to average net assets
(%)(b) ................................................. 1.00 1.25
Ratio of net investment income to average net
assets (%)(b) .......................................... (0.55) (0.88)
Portfolio turnover rate (%) .............................. 128 128
Average commission rate** ................................ $ 0.0536 $ 0.0536
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 (%)(b) ............ 7.19 13.60
Without giving effect to the voluntary expense
limitations described in Note 3 to the
Financial Statements net investment income per
share would have been: ................................. $ (0.24) $ (0.30)
(a) Periods less than one year are not annualized.
(b) Annualized for periods less than one year.
* Commencement of fund operations on January 2, 1997.
** For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its
average commission rate per share for trades upon which commissions are charged. This rate
generally does not reflect mark-ups, mark-downs or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
Year Ended December 31,
<TABLE>
<CAPTION>
Small Cap Value Fund
--------------------------------------
Institutional Class
--------------------------------------
1997* 1996
-------- --------
<S> <C> <C>
Net asset value, beginning of period ..................... $ 17.39 $ 15.33
-------- --------
Income from investment operations -
Net investment income (loss) ........................... 0.07 0.11
Net realized and unrealized gain (loss) on investments . 2.19 4.47
-------- --------
Total from investment operations ..................... 2.26 4.58
-------- --------
Less distributions -
Dividends from net investment income ................... 0.00 (0.11)
Distributions from net realized capital gains .......... 0.00 (2.41)
-------- --------
Total distributions .................................. 0.00 (2.52)
-------- --------
Net asset value, end of period ........................... $ 19.65 $ 17.39
======== ========
Total return (%)(a) ...................................... 13.0 30.4
Net assets, end of period (000) .......................... $189,962 $163,625
Ratio of operating expenses to average net assets (%)(b) . 0.97 1.19
Ratio of net investment income to average net assets (%)(b) 0.84 0.80
Portfolio turnover rate (%) .............................. 47 73
Average commission rate*** ............................... $ 0.0548 $ 0.0567
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 (%)(b) 0.97 1.19
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net
investment income per share would have been: ............ $ 0.07 $ 0.11
(a) Periods less than one year are not annualized
(b) Annualized for periods less than one year.
* For the six months ended June 30, 1997. (unaudited)
** From commencement of class operations on January 2, 1997, through June 30, 1997.
(unaudited)
*** For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its average
commission rate per share for trades upon which commissions are charged. This rate generally does
not reflect mark-ups, mark-downs or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
Year Ended December 31,
<TABLE>
<CAPTION>
Small Cap Value Fund
- ----------------------------------------------------------------------------------------------------------------------
Institutional Class Retail Class
- ------------------------------------------------------------------------------------------ ----------------
1995 1994 1993 1992 1997**
- ------------------ ------------ ------------ ----------------
<C> <C> <C> <C> <C>
$ 12.86 $ 14.13 $ 12.88 $ 12.49 $ 17.39
-------- -------- -------- -------- --------
0.04 (0.04) 0.00 (0.06) 0.03
4.06 (1.12) 3.15 1.67 2.20
-------- -------- -------- -------- --------
4.10 (1.16) 3.15 1.61 2.23
-------- -------- -------- -------- --------
(0.04) 0.00 0.00 0.00 0.00
(1.59) (0.11) (1.90) (1.22) 0.00
-------- -------- -------- -------- --------
(1.63) (0.11) (1.90) (1.22) 0.00
-------- -------- -------- -------- --------
$ 15.33 $ 12.86 $ 14.13 $ 12.88 $ 19.62
======== ======== ======== ======== ========
32.1 (8.2) 24.7 13.1 12.8
$ 90,455 $ 73,126 $ 67,553 $ 39,244 $ 9,897
1.25 1.27 1.35 1.50 1.25
0.29 (0.30) (0.38) (0.79) 0.61
155 87 106 109 47
-- -- -- -- $ 0.0548
1.25 1.27 1.35 1.66 1.59
$ 0.04 $ (0.04) $ 0.00 $ (0.07) $ 0.02
</TABLE>
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (unaudited) (continued)
Six Months Ended June 30,
<TABLE>
<CAPTION>
Strategic Value Fund
--------------------------------------
Institutional Class Retail Class
------------------- ------------
1997* 1997*
-------- --------
<S> <C> <C>
Net asset value, beginning of period .............................. $ 10.00 $ 10.00
-------- --------
Income from investment operations -
Net investment income (loss) .................................... (0.01) 0.00
Net realized and unrealized gain (loss) on investments .......... 1.64 1.61
-------- --------
Total from investment operations .............................. 1.63 1.61
-------- --------
Less distributions -
Dividends from net investment income ............................ 0.00 0.00
Distributions from net realized capital gains ................... 0.00 0.00
-------- --------
Total distributions ........................................... 0.00 0.00
--------
Net asset value, end of period .................................... $ 11.63 $ 11.61
======== ========
Total return (%)(a) ............................................... 16.3 16.1
Net assets, end of period (000) ................................... $ 706 $ 266
Ratio of operating expenses to average net assets(%)(b) ........... 1.00 1.25
Ratio of net investment income to average net assets (%)(b) ....... 0.23 (0.40)
Portfolio turnover rate (%) ....................................... 24 24
Average commission rate** ......................................... $ 0.0593 $ 0.0593
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 (%)(b) ..................... 16.94 51.97
Without giving effect to the voluntary expense
limitations described in Note 3 to the
Financial Statements net investment income per
share would have been: .......................................... $ (0.78) $ (0.42)
(a) Periods less than one year are not annualized.
(b) Annualized for periods less than one year.
* Commencement of fund operations on January 2, 1997.
** For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its average
commission rate per share for trades upon which commissions are charged. This rate generally does
not reflect mark-ups, mark-downs or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
Year Ended December 31,
<TABLE>
<CAPTION>
Worldwide Fund
------------------------------------------------
Institutional Class Retail Class
--------------------------- --------------
1997* 1996+ 1997*+
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period .................... $ 10.63 $ 10.00 $ 10.63
-------- -------- --------
Income from investment operations -
Net investment income (loss) .......................... 0.20 0.30 0.06
Net realized and unrealized gain (loss) on investments 0.34 0.63 0.47
-------- -------- --------
Total from investment operations .................... 0.54 0.93 0.53
-------- -------- --------
Less distributions -
Dividends from net investment income .................. 0.00 (0.30) 0.00
Distributions from net realized capital gains ......... 0.00 0.00 0.00
-------- -------- --------
Total distributions ................................. 0.00 (0.30) 0.00
-------- -------- --------
Net asset value, end of period .......................... $ 11.17 $ 10.63 $ 11.16
======== ======== ========
Total return (%)(a) ..................................... 5.1 9.2 5.0
Net assets, end of period (000) ......................... $ 7,608 $ 5,189 $ 19
Ratio of operating expenses to average net assets (%)(b) 1.00 1.00 1.25
Ratio of net investment income to average net assets
(%)(b) ................................................ 4.05 4.62 3.98
Portfolio turnover rate (%) ............................. 40 76 40
Average commission rate** ............................... $ 0.0251 $ 0.0278 $ 0.0251
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 (%)(b) ................................ 2.72 3.72 302.96
Without giving effect to the voluntary expense
limitations described in Note 3 to the Financial
Statements net investment income per share would have
been: ................................................. $ 0.12 $ 0.13 $ (4.71)
(a) Periods less than one year are not annualized.
(b) Annualized for periods less than one year.
+ Commencement of operations on May 1, 1996 and January 2, 1997, for
the Institutional and Retail Classes, respectively.
* For the six months ended June 30, 1997. (unaudited)
** For fiscal years beginning on or after September 1, 1995, a fund is required to disclose its average
commission rate per share for trades upon which commissions are charged. This rate generally does
not reflect mark-ups, mark-downs or spreads on shares traded on a principal basis.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
June 30, 1997
1. Loomis Sayles Funds is comprised of seventeen 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:
<TABLE>
<CAPTION>
Fixed Income Funds Equity Funds
- ------------------- -------------
<S> <C>
Loomis Sayles Bond Fund Loomis Sayles Core Value Fund
Loomis Sayles Global Bond Fund Loomis Sayles Growth Fund
Loomis Sayles High Yield Fund Loomis Sayles International Equity Fund
Loomis Sayles Intermediate Maturity Bond Fund Loomis Sayles Mid-Cap Growth Fund
Loomis Sayles Investment Grade Bond Fund Loomis Sayles Mid-Cap Value Fund
Loomis Sayles Municipal Bond Fund Loomis Sayles Small Cap Growth Fund
Loomis Sayles Short-Term Bond Fund Loomis Sayles Small Cap Value Fund
Loomis Sayles U.S. Government Securities Fund Loomis Sayles Strategic Value Fund
Loomis Sayles Worldwide Fund
</TABLE>
On September 12, 1996, the Trustees of the Trust approved the issuance of
Institutional and Retail Class shares of each Fund (other than the U.S.
Government Securities Fund and Municipal Bond Fund which will issue only
Institutional Class shares). Except for certain categories of investors (as set
forth in the relevant prospectus), the purchase of Institutional Class shares,
which are not subject to any distribution fees, requires a minimum investment of
$1 million. Except for certain categories of investors (as set forth in the
relevant prospectus), the purchase of Retail Class shares, which are subject to
distribution fees at the annual rate of 0.25% of the average net assets pursuant
to a distribution plan adopted pursuant to Rule 12b-1 under the Investment
Company Act of 1940, requires a minimum investment of $250,000. On January 2,
1997, Retail Class shares were first publicly offered for sale. Shares of each
class represent an equal pro rata interest in the assets of the relevant fund,
and, generally, have identical voting, dividend, liquidation and other rights.
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. These financial statements only cover
the Equity Funds.
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. Short-term securities and debt securities with a remaining maturity of
60 days or less are valued at their amortized cost, which approximates market
value. Other securities for which current market quotations are not readily
available (including restricted securities, if any) 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 of Trustees.
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. 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 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 into insolvency proceedings,
realization of the collateral by the Funds may be delayed or limited.
C. FOREIGN CURRENCY TRANSLATION -- The books and records of each of the Funds
(including those Funds that invest in foreign securities) 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 are not isolated from fluctuations arising from changes in market
prices of securities held. All 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.
D. FORWARD FOREIGN CURRENCY CONTRACTS -- Each Fund that may invest in foreign
securities, may, upon the purchase or sale of a security denominated in a
foreign currency, 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 Loomis Sayles
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 the 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
additional risks if the counterparties to the contracts are unable to meet the
terms of their contracts. At June 30, 1997 there were no open forward foreign
exchange contracts.
E. SECURITY TRANSACTIONS, RELATED INVESTMENT INCOME AND EXPENSES -- 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. Discounts on zero coupon bonds, original issues, step
bonds and payment in kind bonds are accreted according to the effective interest
method. In determining net gain or loss on securities sold, the cost of
securities has been determined on the identified cost basis.
Investment income, realized and unrealized gains and losses, and Fund level
expenses will be allocated on a pro rata basis to each class, based on relative
net assets. Retail Class shares will pay a monthly 12b-1 distribution fee at an
annual rate of 0.25% of the Fund's average net assets attributable to Retail
Class shares. Institutional Class shares pay no distribution fees.
F. 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 June 30, 1997, the Funds held no
such commitments.
G. 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 or excise tax has been
made.
H. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Each Fund pays its net
investment income to shareholders annually. Distributions from net realized
capital gains are declared and paid on an annual basis by all of the Funds.
Income distributions and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. These differences relate primarily to differing treatments of income
and gains on various investment securities held by the Funds, timing differences
and differing characterizations of distributions made by the Funds. Net
investment income dividends are determined on a class level and capital gains
are determined on a Fund level.
I. ORGANIZATION EXPENSE AND DEFERRED REGISTRATION COSTS -- In 1996, costs
approximating $12,400 were incurred in connection with the organization of the
Worldwide Fund. These costs were paid by the Fund and are being amortized by the
Fund as follows: $7,900 over 12 months and $4,500 over 60 months.
In 1997, costs were incurred in connection with the organization of the Mid- Cap
Growth, Mid-Cap Value, Small-Cap Growth and Strategic Value Funds. These costs
were paid by the Funds and are being amortized over 12 months in the following
amounts: $26,061 for each of the Mid-Cap Growth, Mid-Cap Value, and Small-Cap
Growth Funds, representing $12,220 for the Institutional Class and $13,841 for
the Retail Class of each Fund; for the Strategic Value Fund, $25,761,
representing $12,070 for the Institutional Class and $13,691 for the Retail
Class.
In addition, in 1997, costs were incurred in connection with the issuance of the
Retail Class shares which were offered for sale beginning on January 2, 1997.
These costs are being amortized by the respective Fund's Institutional Class
over 12 months:
Core Value Fund .............................................. $11,739
Growth Fund .................................................. 11,573
International Equity Fund .................................... 11,615
Small Cap Value Fund ......................................... 12,541
Worldwide Fund ............................................... 11,359
2. PURCHASES AND SALES OF SECURITIES -- (excluding short-term investments) for
each Fund for the period ended June 30, 1997 were as follows:
Purchases
----------------------------------------
U.S. Government Other
--------------- -----
Core Value Fund ...................... $0 $16,228,538
Growth Fund .......................... 0 19,103,461
International Equity Fund ............ 0 40,509,970
Mid-Cap Growth Fund .................. 0 2,520,126
Mid-Cap Value Fund ................... 0 2,546,452
Small Cap Growth Fund ................ 0 5,443,632
Small Cap Value Fund ................. 0 93,267,558
Strategic Value Fund ................. 0 957,296
Worldwide Fund ....................... 0 4,555,706
Sales
----------------------------------------
U.S. Government Other
--------------- -----
Core Value Fund ...................... $0 $15,637,410
Growth Fund .......................... 0 26,934,795
International Equity Fund ............ 0 41,657,504
Mid-Cap Growth Fund .................. 0 1,079,006
Mid-Cap Value Fund ................... 0 572,474
Small Cap Growth Fund ................ 0 2,431,441
Small Cap Value Fund ................. 0 73,485,385
Strategic Value Fund ................. 0 130,922
Worldwide Fund ....................... 0 2,532,161
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES -- During the period
ended June 30, 1997, the Funds incurred management fees payable to Loomis
Sayles. Certain officers and employees of Loomis Sayles are also officers or
trustees of the Trust. Loomis Sayles' general partner is indirectly owned by New
England Investment Companies, L.P., a publicly-traded limited partnership whose
general partner is indirectly owned by Metropolitan Life Insurance Company.
Separate management agreements for each Fund in effect during the period ended
June 30, 1997 provided for fees at the following annual percentage rate of each
Fund's average daily net assets:
Fees Earned
During the Annual
Period Ended Percentage
Fund June 30, 1997(a) Rate
---- ---------------- ----------
Core Value Fund ................................. $117,454 0.50%
Growth Fund ..................................... 89,247 0.50%
International Equity Fund ....................... 354,652 0.75%
Mid-Cap Growth Fund ............................. 4,763 0.75%
Mid-Cap Value Fund .............................. 6,700 0.75%
Small Cap Growth Fund ........................... 8,215 0.75%
Small Cap Value Fund ............................ 659,706 0.75%
Strategic Value Fund ............................ 1,604 0.50%
Worldwide Fund .................................. 25,982 0.75%
(a) Prior to voluntary expense limitations
Loomis Sayles voluntarily agreed, for an indefinite period, to reduce its
advisory fees and/or bear other expenses, to the extent necessary to limit the
total operating expenses of the Institutional Class shares of each Fund to the
following percentage rate of the Fund's average daily net assets:
Annual
Percentage
Fund Rate
---- ----------
Core Value Fund ................................................ 0.85%
Growth Fund .................................................... 0.85%
International Equity Fund ...................................... 1.00%
Mid-Cap Growth Fund ............................................ 1.00%
Mid-Cap Value Fund ............................................. 1.00%
Small Cap Growth Fund .......................................... 1.00%
Small Cap Value Fund ........................................... 1.00%
Strategic Value Fund ........................................... 1.00%
Worldwide Fund ................................................. 1.00%
Loomis Sayles also voluntarily agreed, for an indefinite period, to reduce its
advisory fees and/or bear other expenses, to the extent necessary to limit the
total operating expenses of the Retail Class shares of each Fund to the
following percentage rate of the Fund's average daily net assets:
Annual
Percentage
Fund Rate
---- ----------
Core Value Fund ................................................ 1.10%
Growth Fund .................................................... 1.10%
International Equity Fund ...................................... 1.25%
Mid-Cap Growth Fund ............................................ 1.25%
Mid-Cap Value Fund ............................................. 1.25%
Small Cap Growth Fund .......................................... 1.25%
Small Cap Value Fund ........................................... 1.25%
Strategic Value Fund ........................................... 1.25%
Worldwide Fund ................................................. 1.25%
Loomis Sayles may change or terminate these voluntary agreements at any time,
but the relevant prospectus would be supplemented at the time to describe the
change.
A. OTHER EXPENSES -- Through May 31, 1997, New England Funds, L.P. (a subsidiary
of New England Investment Companies) performed certain administrative,
accounting and other services for the Trust. The expenses of those services,
which were paid by the Trust, include the following: (i) expenses for personnel
performing bookkeeping, accounting, internal auditing, financial reporting
functions and clerical functions relating to the Funds, 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 period ended May 31, 1997, these expenses amounted to
$33,003 for the nine Loomis Sayles Funds presented herein and are shown
separately in the financial statements as Accounting and Administrative fees.
Effective June 1, 1997, Loomis Sayles, at its own expense, voluntarily assumed
certain of these functions previously performed by New England Funds, L.P., and
has contracted with State Street Bank and Trust Company ("State Street") as
Administrator to perform certain other of these services. The amounts paid to
State Street for performing such functions totaled $46,963 for the nine Loomis
Sayles Funds presented herein and are also shown in the financial statements as
Accounting and Administrative fees.
B. 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 independent 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.
C. SHAREHOLDERS -- At June 30, 1997, Loomis Sayles Funded Pension Plan and the
Loomis Sayles & Company, Employees Profit Sharing Retirement Plan held shares of
beneficial interest in the Funds as follows:
Profit
Pension Sharing
Plan Plan
------- -------
Core Value Fund ................................. 338,772 483,735
Growth Fund ..................................... 255,278 642,225
International Equity Fund ....................... 802,044 464,083
Mid-Cap Growth Fund ............................. 0 128,442
Mid-Cap Value Fund .............................. 0 88,186
Small Cap Growth Fund ........................... 0 153,301
Small Cap Value Fund ............................ 170,583 811,158
Strategic Value Fund ............................ 0 56,799
Worldwide Fund .................................. 411,059 155,996
4. FOREIGN SECURITIES -- Each Fund may purchase securities of foreign issuers.
Investing in securities of foreign companies and foreign governments involves
special risks and considerations not typically associated with investing in U.S.
companies and securities of the U.S. government. These risks include revaluation
of currencies and the risk of appropriation. Moreover, the markets for
securities of many foreign companies and foreign governments and their markets
may be less liquid and the prices of such securities may be more volatile than
those of securities of comparable U.S. companies and the U.S.
government.
5. CAPITAL STOCK TRANSACTIONS -- The tables below summarize the transactions in
Fund shares for the period indicated:
<TABLE>
<CAPTION>
Loomis Sayles Core Value Fund
---------------------------------------------------------
Period Ended June 30,1997 Year Ended December 31, 1996
-------------------------- ----------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Issued from the sale of shares .................... 416,813 $ 6,943,334 529,829 $ 8,135,687
Issued in connection with the reinvestment of:
Dividends from investment income .................. 0 0 34,377 539,962
Distributions from net realized gains on investment 0 0 282,963 4,435,655
Redeemed .......................................... (368,528) (6,061,721) (548,491) (8,486,645)
----------- ----------- ----------- -----------
Net change ........................................ 48,285 $ 881,613 298,678 $ 4,624,659
=========== =========== =========== ===========
<CAPTION>
Retail Class Shares Shares Amount
- ------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares .................... 58,694 $ 994,943
Issued in connection with the reinvestment of:
Dividends from investment income .................. 0 0
Distributions from net realized gains on investment 0 0
Redeemed .......................................... (30,746) (501,662)
----------- -----------
Net change ........................................ 27,948 $ 493,281
=========== ===========
<CAPTION>
Loomis Sayles Growth Fund
---------------------------------------------------------
Period Ended June 30,1997 Year Ended December 31, 1996
-------------------------- ----------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Issued from the sale of shares .................... 162,099 $ 2,240,157 544,697 $ 8,655,405
Issued in connection with the reinvestment of:
Dividends from investment income .................. 0 0 0 0
Distributions from net realized gains on investment 0 0 781,186 10,831,597
Redeemed .......................................... 7
(847,546) (11,790,998) (1,336,333) (21,752,22)
----------- ----------- ----------- -----------
Net change ........................................ (685,447) $(9,550,841) (10,450) $(2,265,225)
=========== =========== =========== ===========
<CAPTION>
Retail Class Shares Shares Amount
- ------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares .................... 69,214 $ 1,007,876
Issued in connection with the reinvestment of:
Dividends from investment income .................. 0 0
Distributions from net realized gains on investment 0 0
Redeemed .......................................... (57,698) (816,899)
----------- -----------
Net change ........................................ 11,516 $ 190,977
=========== ===========
<CAPTION>
Loomis Sayles International Equity Fund
---------------------------------------------------------
Period Ended June 30,1997 Year Ended December 31, 1996
-------------------------- ----------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Issued from the sale of shares .................... 516,638 $ 6,901,122 960,299 $11,920,606
Issued in connection with the reinvestment of:
Dividends from investment income .................. 0 0 29,706 386,808
Distributions from net realized gains on investment 0 0 223,502 2,918,686
Redeemed .......................................... (335,599) (4,585,902) (1,149,339) (14,242,945)
----------- ----------- ----------- -----------
Net change ........................................ 181,039 $ 2,315,220 64,168 $ 983,155
=========== =========== =========== ===========
<CAPTION>
Retail Class Shares Shares Amount
- ------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares .................... 20,965 $ 282,736
Issued in connection with the reinvestment of:
Dividends from investment income .................. 0 0
Distributions from net realized gains on investment 0 0
Redeemed .......................................... (2,282) (30,439)
----------- -----------
Net change ........................................ 18,683 $ 252,297
=========== ===========
<CAPTION>
Loomis Sayles Mid-Cap Growth Fund
---------------------------------
Period Ended June 30, 1997*
--------------------------
Institutional Class Shares Shares Amount
- -------------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares ................................................. 150,563 $ 1,527,474
Issued in connection with the reinvestment of:
Dividends from investment income ............................................... 0 0
Distributions from net realized gains on investment ............................ 0 0
Redeemed ....................................................................... (2,344) (23,319)
----------- -----------
Net change ..................................................................... 148,219 $ 1,504,155
=========== ===========
<CAPTION>
Retail Class Shares Shares Amount
- ------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares ................................................. 6,014 $ 65,146
Issued in connection with the reinvestment of:
Dividends from investment income ............................................... 0 0
Distributions from net realized gains on investment ............................ 0 0
Redeemed ....................................................................... 0 0
----------- -----------
Net change ..................................................................... 6,014 $ 65,146
=========== ===========
*From January 2, 1997 (commencement of operations).
<CAPTION>
Loomis Sayles Mid-Cap Value Fund
--------------------------------
Period Ended June 30, 1997*
--------------------------
Institutional Class Shares Shares Amount
- -------------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares .................................................. 211,928 $ 2,164,077
Issued in connection with the reinvestment of:
Dividends from investment income ................................................ 0 0
Distributions from net realized gains on investment ............................ 0 0
Redeemed ........................................................................ (1,355) (14,041)
----------- -----------
Net change ...................................................................... 210,573 $ 2,150,036
=========== ===========
<CAPTION>
Retail Class Shares Shares Amount
- ------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares .................................................. 5,442 $ 56,836
Issued in connection with the reinvestment of:
Dividends from investment income ................................................ 0 0
Distributions from net realized gains on investment ............................ 0 0
Redeemed ........................................................................ 0 0
----------- -----------
Net change ...................................................................... 5,442 $ 56,836
=========== ===========
*From January 2, 1997 (commencement of operations).
<CAPTION>
Loomis Sayles Small Cap Growth Fund
-----------------------------------
Period Ended June 30, 1997*
--------------------------
Institutional Class Shares Shares Amount
- -------------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares .................................................. 271,032 $ 2,637,887
Issued in connection with the reinvestment of:
Dividends from investment income ................................................ 0 0
Distributions from net realized gains on investment ............................ 0 0
Redeemed ........................................................................ (1,254) (11,739)
----------- -----------
Net change ...................................................................... 269,778 $ 2,626,148
=========== ===========
<CAPTION>
Retail Class Shares Shares Amount
- ------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares .................................................. 59,460 $ 559,152
Issued in connection with the reinvestment of:
Dividends from investment income ................................................ 0 0
Distributions from net realized gains on investment ............................. 0 0
Redeemed ........................................................................ (6,469) (56,653)
----------- -----------
Net change ...................................................................... 52,991 $ 502,499
=========== ===========
*From January 2, 1997 (commencement of operations).
<CAPTION>
Loomis Sayles Small Cap Value Fund
---------------------------------------------------------
Period Ended June 30,1997 Year Ended December 31, 1996
-------------------------- ----------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..................... 1,524,775 $27,043,225 4,541,136 $79,316,546
Issued in connection with the
reinvestment of:
Dividends from investment income ................... 0 0 42,007 724,414
Distributions from net realized
gains on investment .............................. 0 0 1,015,703 17,546,781
Redeemed ........................................... (1,264,710) (22,328,728) (2,093,985) (36,249,230)
----------- ----------- ----------- -----------
Net change ......................................... 260,065 $ 4,714,497 3,504,861 $61,338,511
=========== =========== =========== ===========
<CAPTION>
Retail Class Shares Shares Amount
- ------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares ..................... 579,565 $10,348,338
Issued in connection with the
reinvestment of:
Dividends from investment income ................... 0 0
Distributions from net realized
gains on investment .............................. 0 0
Redeemed ........................................... (75,222) (1,344,619)
----------- -----------
Net change ......................................... 504,343 $ 9,003,719
=========== ===========
Loomis Sayles Strategic Value Fund
-----------------------------------
Period Ended June 30, 1997*
--------------------------
Institutional Class Shares Shares Amount
- -------------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares .................................................. 61,056 $ 613,933
Issued in connection with the reinvestment of:
Dividends from investment income ................................................ 0 0
Distributions from net realized gains on investment ............................. 0 0
Redeemed ........................................................................ (320) (3,381)
----------- -----------
Net change ...................................................................... 60,736 $ 610,552
=========== ===========
<CAPTION>
Retail Class Shares Shares Amount
- ------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares .................................................. 23,197 $ 258,418
Issued in connection with the reinvestment of:
Dividends from investment income ................................................ 0 0
Distributions from net realized gains on investment ............................. 0 0
Redeemed ........................................................................ (295) (3,363)
----------- -----------
Net change ...................................................................... 22,902 $ 255,055
=========== ===========
*From January 2, 1997 (commencement of operations).
Loomis Sayles Worldwide Fund
---------------------------------------------------------
Period Ended June 30,1997 Year Ended December 31, 1996
-------------------------- ----------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..................... 207,409 $ 2,212,855 475,045 $ 4,759,937
Issued in connection with the
reinvestment of:
Dividends from investment income ................... 0 0 13,134 140,137
Distributions from net realized
gains on investment .............................. 0 0 0 0
Redeemed ........................................... (14,696) (155,190) 0 0
----------- ----------- ----------- -----------
Net change ......................................... 192,713 $ 2,057,665 488,179 $ 4,900,074
=========== =========== =========== ===========
<CAPTION>
Retail Class Shares Shares Amount
- ------------------- ----------- -----------
<S> <C> <C>
Issued from the sale of shares ..................... 1,674 $ 18,181
Issued in connection with the
reinvestment of:
Dividends from investment income ................... 0 0
Distributions from net realized
gains on investment .............................. 0 0
Redeemed ........................................... 0 0
----------- -----------
Net change ......................................... 1,674 $ 18,181
=========== ===========
*From May 1, 1996 (commencement of operations).
</TABLE>
<PAGE>
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<PAGE>
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<PAGE>
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<PAGE>
- ------------------------------------------------------------------------------
BOARD OF TRUSTEES
EARL W. FOELL
DANIEL J. FUSS
RICHARD S. HOLWAY
TERRY R. LAUTENBACH
MICHAEL T. MURRAY
OFFICERS
PRESIDENT
DANIEL J. FUSS
EXECUTIVE VICE PRESIDENT TREASURER
ROBERT J. BLANDING MARK W. HOLLAND
VICE PRESIDENTS ASSISTANT TREASURER
JEROME A. CASTELLINI NICHOLAS H. PALMERINO
MARY C. CHAMPAGNE
E. JOHN DEBEER SECRETARY
PAUL H. DREXLER SHEILA M. BARRY
WILLIAM H. EIGEN, JR.
CHRISTOPER R. ELY ASSISTANT SECRETARY
QUENTIN P. FAULKNER MEGAN W. CHAMBERS
PHILIP C. FINE LAURIE M. GALLAGHER
MARTHA F. HODGMAN
JOHN HYLL
JEFFREY L. MEADE
KENT P. NEWMARK
SCOTT A. PAPE
JEFFREY C. PETHERICK
PHILIP J. SCHETTEWI
DAVID L. SMITH
JEFFREY W. WARDLOW
GREGG D. WATKINS
ANTHONY J. WILKINS
JOHN F. YEAGER III
<PAGE>
For Information about:
o Establishing an account
o Account procedures and status
o Exchanges
o Shareholder services
PHONE 800-626-9390
For all other information about the Funds:
PHONE 800-633-3330
TO REQUEST ANY OF THE FOLLOWING, PRESS OR SAY THE NUMBER
[1] LITERATURE AND INFORMATION
[2] NET ASSET VALUES AND YIELDS
[3] SPEAK TO A MARKETING REPRESENTATIVE
[4] ADVISORY, INSTITUTIONAL AND HIGH NET WORTH SERVICES
As always, we are interested in your comments about the job we are doing
and in answering any questions you may have. Please do not hesitate to
give us a call at the phone number listed above, Monday through Friday,
8:45 to 4:45 p.m. EST.
INVESTMENT ADVISER
Loomis Sayles & Company, L.P. o One Financial Center o Boston, MA 02111
TRANSFER AND DIVIDEND PAYING AGENT AND CUSTODIAN OF ASSETS
State Street Bank and Trust Company o Boston, MA 02102
SHAREHOLDER SERVICING AGENT FOR STATE STREET BANK AND
TRUST COMPANY
Boston Financial Data Services, Inc. o P.O. Box 8314 o Boston, MA 02266
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P. o 1 Post Office Square o Boston, MA 02109
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.
LSF143PR097
