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LOOMIS SAYLES FUNDS
EQUITY FUNDS
o o o
SEMI-ANNUAL REPORT
JUNE 30, 1998
o Core Value Fund
o Growth Fund
o International Equity Fund
o Mid-Cap Growth Fund
o Mid-Cap Value Fund
o Small Cap Growth Fund
o Small Cap Value Fund
o Strategic Value Fund
o Worldwide Fund
A Family of No-Load Funds
LOOMIS
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SAYLES
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FUNDS
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ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
617 o 482 o 2450
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TABLE OF CONTENTS
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Corporate Overview....................................................... 1
Letter from the President, Loomis Sayles Funds........................... 2
Letter from the President, Loomis Sayles Distributors, L.P............... 3
Economic and Market Overview............................................. 4
Institutional Class Total Return vs. Lipper Category and
Lipper Category Index .................................................. 6
Fund and Manager Reviews................................................. 8
Portfolio of Investments................................................. 26
Statements of Assets and Liabilities..................................... 60
Statements of Operations................................................. 62
Statements of Changes in Net Assets...................................... 64
Financial Highlights..................................................... 74
Notes to Financial Statements............................................ 90
Board of Trustees and Officers........................................... 101
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CORPORATE OVERVIEW
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LOOMIS SAYLES FUNDS
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Loomis Sayles Funds is a Boston-based family of 17 no-load mutual funds
advised by Loomis, Sayles & Company, L.P. At Loomis Sayles Funds, we follow a
simple-strategy -- we pay close attention to what we hear from our clients and
the marketplace, then work to deliver high-quality products and services that
exceed expectations.
Our "listening harder" creed lets us design products and services that truly
answer our clients' needs. We offer a broad range of no-load funds to
complement your investment objectives and strategies. We believe we run one of
the most responsive support organizations in the business, providing timely
information and insightful solutions.
Beyond that, we're structured to take advantage of our institutional heritage.
The research department at Loomis, Sayles & Company L.P. provides our
portfolio managers with the fundamental research they need to make sound
investment decisions. Our portfolio managers not only manage mutual funds -
they manage large institutional accounts that demand and appreciate the style
consistency that follows from our disciplined investment approach.
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 and Broker/Dealer Services
|5| Institutional and High Net Worth Operations, Trading
and Client Services
As always, we are interested in your comments about the job we are doing and
in answering any questions you may have. For more complete information about
any of the Loomis Sayles Funds, including charges and expenses, please call
Loomis Sayles Distributors, L.P. for a prospectus at 800-633-3330 Monday
through Friday, 8:45 a.m. to 4:45 p.m. EST. Read it carefully before you
invest or send money.
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LETTER FROM THE PRESIDENT
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DEAR SHAREHOLDERS,
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[Photo of Daniel J. Fuss]
Daniel J. Fuss
Federal Reserve Board Chairman Alan Greenspan, recently remarked before
Congress that he had been in the economic forecasting business for over fifty
years and felt he could forecast reasonably well, but "this is a tough one".
I'm sure Chairman Greenspan would be happy to know that I agree with him. This
is a tough one. Many are able to discern the obvious economic guideposts and
extrapolate what might happen in the markets. Of course, the trouble with
forecasting is none of us know what may lurk around the corner.
My letter to you of last year spoke about many of the same issues we face
today. So much has happened in the intervening year, and yet it is remarkable
how little has changed.
Fortunately, the world is still at peace and that's particularly good for
worldwide financial markets. However, the Indian and Pakistani nuclear testing
has jarred complacency about peace and the political instability in Indonesia
is also very unsettling.
There is abundant liquidity in the markets, which has recently become more
unevenly distributed. Currently, there's a lot of money in what are perceived
to be "safe" investments - U.S. Treasuries and the familiar names of large
capitalization stocks, while more risky areas have much less. Liquidity in the
system always invites mischief. Savvy money managers, looking for quick money,
are shorting thinly traded currencies of countries with weak economies. This
increases the risk to those countries and has hampered their attempts at
economic recovery in the longer term.
On the home front, the U.S. economy remains strong. But without clear signs of
resurgent inflation or serious economic repercussions from the Asian crisis,
the Federal Reserve seems reluctant to take significant monetary policy
actions. Valuation levels on equities seem high, particularly as earnings
growth is likely to slow. Large cap stocks have had a good run in this bull
market, but the margin for error is higher now. This puts a premium on paying
close attention to your investments and remaining well diversified.
Diversifying into fixed income assets could be a prudent move for many.
Markets go up and markets go down. That is their nature. It's always been
tough to say just when. We can see the signs and evaluate the risks, but it's
hard to know just when to expect the unexpected.
Thanks for investing with us.
Sincerely,
/s/ Daniel J. Fuss
Daniel J. Fuss
President,
Loomis Sayles Funds
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LETTER FROM THE PRESIDENT
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DEAR SHAREHOLDERS,
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[Photo of John F. Yeager, III]
John F. Yeager, III
One of the basic principles of investing is to broadly diversify investment
holdings in stocks, bonds, money market instruments and the like. With the
strong run-up of the equity markets, your portfolio's exposure to stocks may
be increased enough to warrant adjustment. And with growing uncertainty over
the sustainability of this market, now may be a propitious time to consider
the merits of fixed income investments.
As you know, Loomis Sayles Funds has a wide range of fixed income funds, which
can help you rebalance your portfolio's investment allocation and risk
profile. Loomis Sayles is known for our fixed income capabilities. Fundamental
research is the cornerstone of both our fixed income and equity investment
process. Our fixed income research department studies bonds in the same manner
as other firms research stocks - by understanding industry dynamics, company
specifics of bond issuers, "crunching" the financials of the issuer and
meeting with management.
Our approach to managing fixed income is value-oriented. We seek to provide
superior long-term total rates of return, including capital gains potential,
by focusing on undervalued, preferably "discount" fixed income securities from
around the world.
We offer a comprehensive range of fixed income funds. The Loomis Sayles Short-
Term Bond Fund, U.S. Government Securities Fund, Global Bond Fund and our
well-known Bond Fund, managed by Dan Fuss, all had top quartile performance
and our Municipal Bond Fund was in the top half of its peer group, as ranked
by Lipper Analytical Services, Inc.*. We recently added three new fixed income
funds, Intermediate Maturity Bond Fund, Investment Grade Bond Fund and High
Yield Fund, managed by Dan Fuss and his team, to complement our existing
funds.
Whether it's your intention to conservatively add bonds, or to significantly
increase fixed income risk to your portfolio, we have a fund that meets your
needs. Please call us, or visit our new website at www.loomissayles.com to
learn more about our fixed income capabilities.
Sincerely,
/s/ John F. Yeager, III
John F. Yeager, III
President,
Loomis Sayles Distributors, L. P.
*For the five-year period ended 6/30/98, the following are the Loomis Sayles
Funds rankings within the appropriate Lipper categories:
Short-Term Bond Fund ranked 9/50 Short Investment Grade Debt Category
U.S. Government Securities Fund ranked 2/96 General U.S. Government
Category
Global Bond Fund ranked 5/57 Global Income Category
Bond Fund ranked 1/40 Corporate BBB Debt Category
Municipal Bond Fund ranked 50/124 General Municipal Debt Category
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ECONOMIC AND MARKET OVERVIEW
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THE LOOMIS SAYLES FUNDS SEMI-ANNUAL REPORT
ECONOMIC AND MARKET OVERVIEW -- 1998
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STOCKS
During the first half of 1998, the U.S. stock market kept up its record pace
as the Standard & Poor's 500 Index gained 17.71%. This upward trend has become
so routine that many investors are beginning to expect these kinds of returns
as a matter of course. Even though the S&P 500 Index has gained at least 20%
in each of the past three calendar years, investors surveying the scene in
early 1998 had plenty of issues to be concerned about.
1ST QUARTER
In Asia, political, economic and market turmoil combined to create a volatile
environment. Economic contraction in nearly all of Asia led to a freefall in
Asian financial markets and tremendous devaluation in their currencies. In
response, capital fled Asian markets in search of markets considered safe.
Liquidity dried up in Asian markets and eventually impacted portions of the
U.S. market. Asian markets gained back some of the ground they lost in late
1997, but remained shaky.
Strong U.S. economic growth continued throughout the first half of the year.
With the economic expansion in its sixth year, domestic investors still seem
willing to bet that U.S. companies can continue to grow earnings. Despite this
growth and a tight labor market, the Federal Reserve Bank hasn't raised short-
term rates. While no one is privy to the specifics of the decision, it must
certainly be influenced by the remarkably low U.S. inflation statistics, the
potential of the Asian slowdown to drag down the U.S. economy and the
potential for higher interest rates to increase capital flow from the already
damaged Asian economies.
The robust U.S. economy, low interest rates and some reassuring news on
corporate earnings helped the equity market to a strong first quarter, with
the S&P 500 Index gaining a spectacular 13.95%. However, small cap stocks
lagged large cap stocks, as the Russell 2000 Index gained a respectable 10.06%
for the first three months of the year.
2ND QUARTER
Asia continued to make headlines in the second quarter and most of the Asian
market gains from earlier in the year were given back. Political unrest in
Indonesia led to the resignation of long-time ruler Suharto. India and
Pakistan revived concerns of a nuclear arms race on the subcontinent with
testing of their new atomic capabilities. To compound this, Japan, Asia's
largest economy, seemed unable to grapple with its failing economy. Despite
intervention in the foreign exchange markets by the United States, the
Japanese yen fell to new lows versus the U.S. dollar. Concerned investors now
worry that China might devalue its currency, the yuan, which in turn could
incite another round of economic turmoil.
Against this backdrop, the U.S. bond market rallied, buoyed by a flight to
quality that has helped U.S. Treasuries. The yield on the 30-year Treasury bond
hit a new low of 5.62%. Falling bond yields and a preference for high-profile
companies, perceived to be "safe", led large cap growth stocks to far outpace
the rest of the market. The S&P Barra Growth Index gained 5.84% during the
second quarter, while the S&P Barra Value Index gained only 0.41%. In general,
small cap stocks lost ground in the second quarter, with the Russell 2000 Index
posting a return of -4.66%. Liquidity in the market has shifted to areas
considered "safe", particularly within North America and Europe.
The economic scene at the end of June looks a lot like it did at the beginning
of the year. There appears to be tension between solid economic growth in
North America and Europe and the crisis in Asia. So far, the crisis has had a
mixed impact here in the U.S. Falling energy prices, increased imports and
lower interest rates have helped the economy to remain strong, while avoiding
price inflation. This positive cycle has helped the economy maintain a fine
balance of growth, low inflation and falling interest rates. The strength of
the economy has helped to sustain earnings growth, which fuels the stock
market rally. However, the Asian crisis, the strike at GM and the long-term
nature of this economic expansion could put a damper on growth. Federal
Reserve Bank Chairman, Alan Greenspan, has noted that he is keeping a close
eye on inflationary pressures. The continued life of the bull market will be
affected by how well that balance is kept.
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INSTITUTIONAL CLASS
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TOTAL RETURN(1) VS. LIPPER CATEGORY AND
LIPPER CATEGORY INDEX(2)
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CORE GROWTH INTERNATIONAL
VALUE FUND EQUITY
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YEAR TO DATE
Loomis Sayles 8.90 9.82 8.85
Lipper 12.11 15.10 15.50
Rank 587 of 755 801 of 1012 490 of 544
Percentile 78 80 91
Lipper Category Index 11.62 15.57 15.81
ONE YEAR
Loomis Sayles 19.36 25.70 -1.64
Lipper 22.86 25.38 8.19
Rank 486 of 669 485 of 884 419 of 480
Percentile 73 55 88
Lipper Category Index 22.14 28.27 9.00
THREE YEARS
Loomis Sayles 24.14 21.78 7.94
Lipper 24.74 23.85 12.78
Rank 259 of 432 398 of 560 245 of 292
Percentile 60 72 84
Lipper Category Index 24.30 24.79 15.12
FIVE YEARS
Loomis Sayles 19.59 16.48 11.05
Lipper 18.93 18.91 12.22
Rank 114 of 275 266 of 338 79 of 134
Percentile 42 79 59
Lipper Category Index 18.98 19.47 13.53
MODIFIED INCEPTION(3)
Loomis Sayles 16.58 15.30 9.20
Lipper 16.66 16.59 10.59
Rank 103 of 186 163 of 231 40 of 63
Percentile 56 71 64
Lipper Category Index 16.79 16.99 11.15
ACTUAL INCEPTION(4)
Loomis Sayles 17.31 16.24 9.05
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(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
reflects, if any, 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 Services, Inc. The Lipper Category Index total return
represents the average total return for 30 funds, or 10 funds for the
Global Flex Portfolio Index, in each Fund's corresponding investment
category as determined by Lipper Analytical Services, Inc. Rankings are
based on the total return of each Fund for the period relative to the
total return of all funds in that Fund's corresponding investment
category.*
*Source: Lipper Analytical Services.
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Mid-Cap Mid-Cap Small Cap Small Cap Strategic
Growth Value Growth Value Value Worldwide
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9.05 8.07 11.22 2.90 10.71 -0.10
10.66 10.66 6.45 6.45 15.10 9.16
175 of 325 204 of 325 82 of 621 467 of 621 769 of 1012 90 of 91
54 63 14 76 76 99
12.20 12.20 6.45 6.45 15.57 8.21
24.77 20.06 29.21 14.73 13.96 -1.59
22.22 22.22 17.63 17.63 25.38 11.34
104 of 284 181 of 284 39 of 524 335 of 524 774 of 884 84 of 87
37 64 8 64 88 97
21.95 21.95 15.52 15.52 28.27 11.34
NA NA NA 25.82 NA NA
19.68
37 of 311
12
16.89
NA NA NA 18.63 NA NA
16.74
56 of 158
36
15.52
21.46 23.13 20.90 20.23 20.72 5.57
20.33 20.33 18.12 16.79 27.45 13.37
117 of 258 94 of 258 172 of 466 11 of 84 659 of 810 69 of 73
46 37 37 14 82 95
20.21 20.21 14.44 15.38 29.85 13.87
21.46 23.13 20.90 20.45 20.72 5.79
(3) 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 December 31, 1996
Mid-Cap Value Fund December 31, 1996
Small Cap Growth Fund December 31, 1996
Small Cap Value Fund May 13, 1991
Strategic Value Fund December 31, 1996
Worldwide Fund May 1, 1996
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FUND AND MANAGER REVIEW
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LOOMIS SAYLES CORE VALUE FUND
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[Photo of James L. Carroll]
James L. Carroll
[Photo of Isaac H. Green]
Isaac H. Green
[Photo of Jeffrey W. Wardlow]
Jeffrey W. Wardlow
KEY FUND FACTS
Objective: Long-term growth of capital and income
Strategy: Invests in stocks considered to be undervalued in
relation to the issuer's earnings, dividends, assets and
growth prospects
Fund Inception Date: 5/13/91
Commencement of Operations of Class:
Institutional - 5/13/91, Retail - 1/2/97
Expense Ratio: Institutional - 0.82%, Retail - 1.10%
Total Net Assets (all classes): $74.5 MM
PERFORMANCE SUMMARY
The Institutional Class of the Loomis Sayles Core Value Fund produced a total
return of 8.90% as compared with 17.71% for the Standard & Poor's 500 Index
and 12.11% for the average fund in the Lipper Growth & Income category.
PORTFOLIO REVIEW
During the first half of 1998, the Fund's performance was hindered by the
equity market's bias towards growth stocks over value stocks. Our holdings in
small capitalization companies also suffered, as large-cap stocks
significantly outperformed mid-cap and small-cap issues. Positive influences
on the Fund for the first half of the year included strong performance in the
financial, basic materials, and communications services sectors.
We seek to invest in companies that we believe are undervalued based on
earnings, cash flow, or asset value. The Fund is comprised of large and
medium-sized companies and is well diversified by industry type.
PORTFOLIO POSITIONING
The Fund currently is diversified with a modest overweight in consumer
cyclicals and capital goods. Consumer staples remain underweighted in the
portfolio. The stocks in the portfolio, on average, sell at a 20% discount to
the price/earnings ratio of the S&P 500 Index, which is in keeping with our
value investment strategy.
/s/ James L. Carroll /s/ Isaac H. Green /s/ Jeffrey W. Wardlow
- -------------------- ------------------------ -----------------------
James L. Carroll Isaac H. Green Jeffrey W. Wardlow
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AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED JUNE 30, 1998
YEAR 1 3 5 SINCE
TO DATE YEAR YEARS YEARS INCEPTION(a)
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Loomis Sayles Core Value Fund
(Institutional) 8.90 19.36 24.14 19.59 17.31
Loomis Sayles Core Value Fund
(Retail) 8.74 19.08 N/A N/A 25.31
Lipper Growth & Income Fund Index(b) 11.62 22.14 24.30 18.98 16.79
S&P 500 Index (c) 17.71 30.15 30.24 23.08 19.22
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO JUNE 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis Lipper S&P
As of 5/31/91 10.00 10.00 10.00
Period Ended
6/30/91 09.43 09.54 09.54
9/30/91 09.72 10.10 10.05
12/31/91 10.16 10.70 10.89
3/31/92 10.46 10.69 10.62
6/30/92 10.48 10.82 10.82
9/30/92 10.67 11.12 11.16
12/31/92 11.59 11.73 11.72
3/31/93 12.18 12.43 12.23
6/30/93 12.11 12.59 12.29
9/30/93 12.43 13.15 12.61
12/31/93 12.97 13.45 12.90
3/31/94 12.78 13.01 12.41
6/30/94 12.78 13.08 12.46
9/30/94 13.33 13.62 13.07
12/31/94 12.85 13.39 13.07
3/31/95 14.21 14.44 14.34
6/30/95 15.49 15.63 15.71
9/30/95 16.68 16.80 16.96
12/31/95 17.38 17.56 17.98
3/31/96 18.24 18.57 18.94
6/30/96 18.62 19.05 19.79
9/30/96 19.28 19.67 20.40
12/31/96 21.06 21.20 22.10
3/31/97 21.56 21.55 22.69
6/30/97 24.82 24.58 26.65
9/30/97 27.47 26.63 28.65
12/31/97 27.21 26.89 29.47
03/31/98 29.95 29.96 33.58
06/30/98 29.64 30.02 34.69
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a): Inception date of the Institutional Class of shares is May 13, 1991.
Since Lipper and S&P 500 Index performance data is not available
coincident with this date, comparative performance is presented from May
31, 1991. Inception date of the Retail Class of shares is December 31,
1996.
(b): Source: Lipper Analytical Services.
(c): S&P 500 Index 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.
(d): Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees
paid by the Retail Class of shares, be lower.
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FUND AND MANAGER REVIEW
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LOOMIS SAYLES GROWTH FUND
[Photo of Jerome A. Castellini]
Jerome A. Castellini
KEY FUND FACTS
Objective: Long-term growth of capital
Strategy: Invests in companies with relatively small market
capitalization, as well as larger companies, which are
selected on the basis of their growth potential
Fund Inception Date: 5/16/91
Commencement of Operations of Class:
Institutional - 5/16/91, Retail - 1/2/97
Expense Ratio: Institutional - 0.85%, Retail - 1.10%
Total Net Assets (all classes): $30.9 MM
PERFORMANCE SUMMARY
The Institutional Class of the Loomis Sayles Growth Fund produced a total
return of 9.82% for the six month period ended June 30, 1998, lagging the
17.71% return on the Standard & Poor's 500 Index. Results were consistent with
a broader universe of mutual funds, as measured by Lipper, where the Growth,
Mid-Cap and Small-Cap category median returns were 15.64%, 9.54%, and 6.01%,
respectively.
PORTFOLIO REVIEW
The Fund benefited from its holdings in blue chip growth stocks such as Lucent
Technologies, Warner Lambert, Cisco Systems, Pfizer, and American
International Group. The best performing sectors in the market during this
period were consumer and technology, where the Fund's overweightings helped
returns. Excellent operating trends from America Online, Compuware, and HBO
and Company, as well as Home Depot, Starbucks and Kohl's also boosted results.
In contrast, the Fund's overweighting in the energy sector detracted
significantly from performance, as energy stocks experienced declines across-
the-board.
PORTFOLIO POSITIONING
The drop in cost of international goods has had a net positive impact on the
consumption sector of our economy. As a result, we have increased our
positions in retail and consumer cyclical industries.
Virtually every commodity in the world has suffered from inventory
liquidation taking place in lesser developed economies. Even a sector like
energy, where supply and demand are very closely balanced, has experienced
significant price pressure. In response, we have slightly reduced our holdings
in the oil, gas and oil service industries.
Performance has been very strong in the networking and telecommunications
equipment industries. We have increased the Fund's weightings and established
new positions in a number of these companies.
/s/ Jerome A. Castellini
Jerome A. Castellini
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AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED JUNE 30, 1998
YEAR 1 3 5 SINCE
TO DATE YEAR YEARS YEARS INCEPTION(a)
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Loomis Sayles Growth Fund
(Institutional) 9.82 25.70 21.78 16.48 16.24
Loomis Sayles Growth Fund (Retail) 9.69 25.42 N/A N/A 22.97
Lipper Growth Fund Index(b) 15.57 28.27 24.79 19.47 16.99
S&P 500 Index(c) 17.71 30.15 30.24 23.08 19.22
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO JUNE 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis Lipper S&P
As of 5/31/91 10.00 10.00 10.00
Period Ended
6/30/91 09.29 09.41 09.54
9/30/91 10.75 10.20 10.05
12/31/91 11.69 11.10 10.89
3/31/92 10.79 10.93 10.62
6/30/92 10.29 10.71 10.82
9/30/92 10.64 10.99 11.16
12/31/92 12.14 11.95 11.72
3/31/93 12.45 12.31 12.23
6/30/93 12.78 12.49 12.29
9/30/93 13.49 13.09 12.61
12/31/93 13.26 13.38 12.90
3/31/94 12.74 12.98 12.41
6/30/94 12.25 12.70 12.46
9/30/94 12.77 13.32 13.07
12/31/94 12.78 13.17 13.07
3/31/95 13.63 14.13 14.34
6/30/95 15.18 15.64 15.71
9/30/95 16.67 17.06 16.96
12/31/95 16.72 17.47 17.98
3/31/96 17.26 18.26 18.94
6/30/96 18.76 18.87 19.79
9/30/96 19.00 19.41 20.40
12/31/96 20.05 20.54 22.10
3/31/97 19.39 20.46 22.69
6/30/97 21.81 23.69 26.65
9/30/97 25.56 26.12 28.65
12/31/97 24.96 26.30 29.47
3/31/98 26.56 29.55 33.58
6/30/98 27.41 30.39 34.69
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a): Inception date of the Institutional Class of shares is May 16, 1991.
Since Lipper and S&P 500 Index performance data is not available
coincident with this date, comparative performance is presented from May
31, 1991. Inception date of the Retail Class of shares is December 31,
1996.
(b): Source: Lipper Analytical Services.
(c): S&P 500 Index 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.
(d): Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees
paid by the Retail Class of shares, be lower.
<PAGE>
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FUND AND MANAGER REVIEW
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LOOMIS SAYLES INTERNATIONAL EQUITY FUND
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[Photo of Paul H. Drexler]
Paul H. Drexler
KEY FUND FACTS
Objective: High total investment return
Strategy: Invests primarily in stocks of companies
organized or headquartered outside of the United States
Fund Inception Date: 5/10/91
Commencement of Operations of Class:
Institutional - 5/10/91,
Retail - 1/2/97
Expense Ratio: Institutional - 1.00%,
Retail - 1.25%
Total Net Assets (all classes): $80.5 MM
PERFORMANCE SUMMARY
The Institutional Class of the Loomis Sayles International Equity Fund
returned 8.85% versus the 15.93% return of the Morgan Stanley Capital
International EAFE Index, a broad market index representing 21 international
markets in Europe, Australia, and the Far East. The Fund's underperformance
was due primarily to our positions in the Pacific Basin, which suffered
significant declines.
PORTFOLIO REVIEW
International stock markets enjoyed a strong first quarter, but markets in
Europe and Asia experienced downturns during the second quarter. The
correction in European markets in June ended a 12-month run of robust returns.
The portfolio was focused primarily on the major European markets, where
approximately two-thirds of Fund assets were invested. The remainder was
invested in Canada and the Pacific Basin. Our strongest returns during the
period (in U.S. dollar terms) were in Italy, up about 41%, Germany +34%, Spain
+36%, and France +33%.
Our Asian stock holdings held back performance, with the Fund's positions of
1% to 3% in Hong Kong, South Korea, Thailand, and Singapore suffering sharp
declines. The decline in Asian markets also affected our holdings in
Australia, New Zealand, and Canada, which experienced weak returns.
PORTFOLIO POSITIONING
The portfolio continues to be primarily invested in Europe. We have
significantly reduced our Pacific Basin exposure. Europe currently offers
excellent investment opportunities, despite the fact that valuations are no
longer cheap. In addition, mutual fund investing is becoming more common in
Europe, providing greater liquidity for stocks. Finally, the introduction of
the common currency, the Euro, on January 4, 1999, is forcing companies to
become more competitive on a pan-European basis. These developments are all
positive for shareholders. We will continue to seek out financially sound
companies with a record of strong performance that may not have been
recognized by the broader marketplace.
/s/ Paul H. Drexler
Paul H. Drexler
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED JUNE 30, 1998
YEAR 1 3 5 SINCE
TO DATE YEAR YEARS YEARS INCEPTION(a)
- --------------------------------------------------------------------------------
Loomis Sayles International Equity
Fund (Institutional) 8.85 -1.64 7.94 11.05 9.05
Loomis Sayles International Equity
Fund (Retail) 8.60 -2.01 N/A N/A 4.77
Lipper International Equity Fund
Index(b) 15.81 9.00 15.12 13.53 11.15
MSCI-EAFE Index(c) 15.93 6.10 10.69 10.03 8.53
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO JUNE 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis Lipper MSCI
As of 5/31/91 10.00 10.00 10.00
Period Ended
6/30/91 09.51 09.48 09.27
9/30/91 10.41 10.09 10.06
12/31/91 10.42 10.23 10.23
3/31/92 10.89 10.02 09.01
6/30/92 11.27 10.47 09.20
9/30/92 10.58 09.91 09.34
12/31/92 09.89 09.79 08.98
3/31/93 10.82 10.63 10.06
6/30/93 11.05 11.21 11.07
9/30/93 12.20 12.29 11.81
12/31/93 13.70 13.62 11.91
3/31/94 13.71 13.48 12.32
6/30/94 13.49 13.60 12.95
9/30/94 13.71 14.12 12.97
12/31/94 13.46 13.52 12.83
3/31/95 13.75 13.19 13.07
6/30/95 14.84 13.86 13.17
9/30/95 14.85 14.61 13.72
12/31/95 14.63 14.88 14.27
3/31/96 15.30 15.53 14.69
6/30/96 15.80 16.17 14.92
9/30/96 16.01 16.18 14.90
12/31/96 17.31 17.03 15.14
3/31/97 17.36 17.45 14.90
6/30/97 18.97 19.40 16.83
9/30/97 19.08 19.77 16.71
12/31/97 17.14 18.26 15.40
3/31/98 19.89 20.97 17.67
6/30/98 18.66 21.15 17.86
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a): Inception date of the Institutional Class of shares is May 10, 1991.
Since Lipper and MSCI-EAFE Index performance data is not available
coincident with this date, comparative performance is presented from May
31, 1991. Inception date of the Retail Class of shares is December 31,
1996.
(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.
(d): Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees
paid by the Retail Class of shares, be lower.
<PAGE>
- --------------------------------------------------------------------------------
FUND AND MANAGER REVIEW
- --------------------------------------------------------------------------------
LOOMIS SAYLES MID-CAP GROWTH FUND
- --------------------------------------------------------------------------------
[Photo of Jerome A. Castellini]
Jerome A. Castellini
[Photo of Scott S. Pape]
Scott S. Pape
KEY FUND FACTS
Objective: Long term growth of capital
Strategy: Invests primarily in stocks with market
capitalization falling within the capitalization range of
the Standard & Poor's Mid-Cap 400 Index
Fund Inception Date: 12/31/96
Commencement of Operations of Class:
Institutional - 1/2/97, Retail - 1/2/97
Expense Ratio: Institutional - 1.00%, Retail - 1.25%
Total Net Assets (all classes): $2.2 MM
PERFORMANCE SUMMARY
The Institutional Class of the Loomis Sayles Mid-Cap Growth Fund posted a
total return of 9.05% for the first half of the year, as compared with the
Standard & Poor's Mid-Cap 400 Index return of 8.63% and the Lipper Average
Mid-Cap Fund category return of 10.66%.
PORTFOLIO REVIEW
Performance was positively affected by the Fund's overweightings in the
consumer and technology areas, which were the top performing sectors for the
first half of the year. Returns were also boosted by excellent operating
trends from America Online, Compuware, Electronic Arts, and Network Associates
in the technology area, as well as Bed Bath & Beyond, Starbucks and Kohl's in
the consumer sector. In contrast, the Fund's overweighting in the energy
sector detracted significantly from performance, as these energy stocks
experienced declines across-the-board.
PORTFOLIO POSITIONING
We continue to favor companies with less economic sensitivity (healthcare,
consumer products and energy) and inherent unit growth opportunities
(technology). Industrial, basic materials and capital goods sectors continue
to be de-emphasized in the current environment.
The drop in cost of international goods has had a net positive impact on the
consumption sector of our economy. As a result, we have increased our
positions in retail and consumer cyclical industries.
Virtually every commodity in the world has suffered from inventory liquidation
taking place in lesser developed economies. Even a sector like energy, where
supply and demand are very closely balanced, has experienced significant price
pressure. As a result, we have slightly reduced our holdings in the oil, gas
and oil service industries.
Finally, further consolidation in the networking and telecommunications
equipment industries has made this an area of increasing focus for the
portfolio. Performance has been very strong from this sector and we have
increased weightings and established new positions in a number of these
companies.
/s/Jerome A. Castellini /s/ Scott S. Pape
Jerome A. Castellini Scott S. Pape
<PAGE>
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED JUNE 30, 1998
SINCE
YEAR 1 INCEPTION
TO DATE YEAR (a)
- --------------------------------------------------------------------------------
Loomis Sayles Mid-Cap Growth Fund
(Institutional) 9.05 24.77 21.46
Loomis Sayles Mid-Cap Growth Fund
(Retail) 8.96 24.36 21.20
Lipper Mid-Cap Fund Index(b) 12.20 21.95 20.21
S&P Mid-Cap 400 Index(c) 8.63 27.10 27.32
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO JUNE 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis Lipper S&P
As of 12/31/96 10.00 10.00 10.00
Period Ended
3/31/97 09.63 09.33 09.85
6/30/97 10.72 10.81 11.30
9/30/97 12.57 12.33 13.12
12/31/97 12.27 11.75 13.23
3/31/98 12.98 13.23 14.68
6/30/98 13.38 13.18 14.37
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a): Inception date of the Institutional and Retail Class of shares is
December 31, 1996.
(b): Source: Lipper Analytical Services.
(c): S&P Mid-Cap 400 Index consists of 400 domestic stocks chosen for market
size liquidity and industry group representation. It is a market-weighted
index (stock price times shares outstanding) with each stock affecting
the index in proportion to its value. The index is comprised of
industrials, utilities, financials and transportations, in size order.
The index returns have not been lowered for ongoing management and
operating expenses applicable to mutual fund investments.
(d): Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees
paid by the Retail Class of shares, be lower.
<PAGE>
- --------------------------------------------------------------------------------
FUND AND MANAGER REVIEW
- --------------------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND
- --------------------------------------------------------------------------------
[Photo of Dean A. Gulis]
Dean A. Gulis
[Photo of Gregg D. Watkins]
Gregg D. Watkins
KEY FUND FACTS
Objective: Long-term growth of capital
Strategy: Invests primarily in stocks with market
capitalization falling within the capitalization range of
the Standard & Poor's Mid-Cap 400 Index, which are believed
to be undervalued by the market
Fund Inception Date: 12/31/96
Commencement of Operations of Class:
Institutional - 1/2/97, Retail - 1/2/97
Expense Ratio: Institutional - 1.00%, Retail - 1.25%
Total Net Assets (all classes): $4.5 MM
PERFORMANCE SUMMARY
During the first six months of 1998, the Loomis Sayles Mid-Cap Value Fund's
Institutional Class achieved an 8.07% return, as compared to the 8.63% total
return for the Standard & Poor's Mid-Cap 400 Index.
PORTFOLIO REVIEW
The stock market's performance throughout the first half of 1998 was
characterized by rapid and often dramatic swings in both stock sector
performance and investor sentiment. Large capitalization stocks continued to
outperform mid-cap and small capitalization issues with a 12.78% return spread
between the pace-setting S&P 500 Index and the lagging Russell 2000 Index. The
recession in Asia and the deceleration in the rate of U.S. corporate earnings
growth whetted investors' appetites for traditional growth stocks based on the
assumption that if the current pressure on corporate profits continues, these
issues will be able to sustain earnings more effectively. The Fund's
performance was negatively impacted by both of these factors as its average
market capitalization was below that of its benchmark and its value-oriented
investment discipline resulted in an underweighted position in high priced
sectors such as the Internet. The Fund's performance was also hindered by its
underweightings in the technology and health care sectors, which posted strong
results, and its overweightings in the consumer staples and finance sectors,
which lagged the broader market. We continued to focus on finding stocks with
attractive valuations and good earnings potential. The Fund increased its
exposure to technology, healthcare, and utilities, and reduced its exposure to
basic materials, energy, financial and consumer cyclicals issues.
PORTFOLIO POSITIONING
We believe corporate earnings concerns will persist and that growth
expectations will continue to be revised downward. In the first half of the
year, investors gravitated toward large cap and growth-oriented issues. As the
year progresses, we anticipate increasingly difficult earnings comparisons and
expect investors to seek more defensive stocks and increase their allocations
to sectors with a high degree of earnings predictability. We will continue to
focus on companies with these characteristics and have modestly increased the
Fund's exposure to the healthcare and consumer staples sectors while
maintaining underweighted positions in the basic materials and energy sectors.
/s/ Dean A. Gulis /s/ Gregg D. Watkins
Dean A. Gulis Gregg D. Watkins
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED JUNE 30, 1998
SINCE
YEAR INCEPTION
TO DATE 1 YEAR (a)
- --------------------------------------------------------------------------------
Loomis Sayles Mid-Cap Value Fund (Institutional) 8.07 20.06 23.13
Loomis Sayles Mid-Cap Value Fund (Retail) 7.89 19.77 22.78
Lipper Mid-Cap Fund Index(b) 12.20 21.95 20.21
S&P Mid-Cap 400 Index(c) 8.63 27.10 27.32
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO JUNE 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis Lipper S&P
As of 12/31/96 10.00 10.00 10.00
Period Ended
3/31/97 10.10 09.33 09.85
6/30/97 11.37 10.81 11.30
9/30/97 12.71 12.33 13.12
12/31/97 12.63 11.75 13.23
3/31/98 14.03 13.23 14.68
6/30/98 13.65 13.18 14.37
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a): Inception date of the Institutional and Retail Classes of shares is
December 31, 1996.
(b): Source: Lipper Analytical Services.
(c): S&P Mid-Cap 400 Index consists of 400 domestic stocks chosen for market
size, liquidity and industry group representation. It is a market-
weighted index (stock price times shares outstanding) with each stock
affecting the index in proportion to its value. The index is comprised of
industrials, utilities, financials and transportation, in size order. The
index returns have not been lowered for ongoing management and operating
expenses applicable to mutual fund investments.
(d): Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees
paid by the Retail Class of shares, be lower.
<PAGE>
- --------------------------------------------------------------------------------
FUND AND MANAGER REVIEW
- --------------------------------------------------------------------------------
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
KEY FUND FACTS
Objective: Long-term growth of capital
Strategy: Invests in stocks of small, rapidly-growing
companies, with the potential for accelerating earnings
growth and rising profit margins Fund Inception Date:
12/31/96
Commencement of Operations of Class:
Institutional - 1/2/97, Retail - 1/2/97
Expense Ratio: Institutional - 1.00%, Retail - 1.25%
Total Net Assets (all classes): $20.7 MM
PERFORMANCE SUMMARY
The Institutional Class of the Loomis Sayles Small Cap Growth Fund performed
well despite the market's volatility, gaining 11.22% versus a 4.93% gain for
the Russell 2000 Index and a 6.45% return for the average fund in Lipper's
Small Cap category.
PORTFOLIO REVIEW
We have not altered our investment strategy because of short-term fluctuations
in the market. We continue to employ a security-driven stock selection
process, evaluating each company on its own merits, rather than trying to
predict the next shift in market sentiment. When corrections do occur, they
provide an opportunity to invest in superior companies at much more attractive
prices.
One area where we have identified new opportunity is retail. We have been
successful with our investment in Pacific Sunwear, a mall-based retailer of
teen clothing. Recently we added to retail with the purchase of 99 Cents Only,
a store that sells all its items at 99 cents, and Just for Feet, a large
format footwear retailer.
The portfolio benefited from its exposure to technology, particularly
computer software and services. On the other hand, electronics related issues
were hard hit due to excessive inventories of semiconductor chips and
weakening demand in Asia. At this time, our exposure to electronics stocks is
limited.
PORTFOLIO POSITIONING
We believe that the market for small-cap growth stocks holds great promise for
investors. It is our opinion that there is growing evidence that the earnings
growth of small companies is accelerating even as the earnings of the stocks
in the Standard & Poor's 500 Index are slowing. At the same time, small-cap
stocks currently are selling at very attractive price levels when compared to
the S&P 500 Index. We believe this combination of strong fundamentals and
attractive valuations provides a powerful argument for investing in small-cap
stocks.
/s/ Christopher R. Ely /s/ Philip C. Fine /s/ David L. Smith
Christopher R. Ely Philip C. Fine David L. Smith
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED JUNE 30, 1998
SINCE
YEAR 1 INCEPTION
TO DATE YEAR (a)
- --------------------------------------------------------------------------------
Loomis Sayles Small Cap Growth Fund
(Institutional) 11.22 29.21 20.90
Loomis Sayles Small Cap Growth Fund
(Retail) 11.15 28.84 20.67
Lipper Small Cap Fund Index(b) 6.45 15.52 14.44
Russell 2000 Index(c) 4.93 16.51 18.13
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO JUNE 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis Lipper Russell
As of 12/31/96 10.00 10.00 10.00
Period Ended
3/31/97 08.51 09.06 09.48
6/30/97 10.28 10.60 11.02
9/30/97 12.55 12.21 12.66
12/31/97 11.94 11.50 12.24
3/31/98 13.39 12.73 13.47
6/30/98 13.28 12.24 12.84
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a): Inception date of the Institutional and Retail Classes of shares is
December 31, 1996.
(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 Index total market capitalization. The index returns
have not been reduced for ongoing management and operating expenses
applicable to mutual fund investments.
(d): Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees
paid by the Retail Class of shares, be lower.
<PAGE>
- --------------------------------------------------------------------------------
FUND AND MANAGER REVIEW
- --------------------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
[Photo of Mary C. Champagne]
Mary C. Champagne
[Photo of Jeffrey C. Petherick]
Jeffrey C. Petherick
KEY FUND FACTS
Objective: Long-term growth of capital
Strategy: Invests primarily in stocks with market
capitalization falling within the capitalization range of
the Russell 2000 Index, which are considered undervalued by
the market and with significant growth potential.
Fund Inception Date: 5/13/91
Commencement of Operations of Class:
Institutional - 5/13/91, Retail - 1/2/97, Admin. - 1/2/98
Expense Ratio: Institutional - 0.94%, Retail - 1.20%,
Admin. - 1.50%
Total Net Assets (all classes): $394.3 MM
PERFORMANCE SUMMARY
For the first half of the year, the Loomis Sayles Small Cap Value Fund's
Institutional Class lagged the Russell 2000 Index, returning 2.90% versus the
4.93% return for the Index. While the portfolio held up well during the down
days for the market, deep value and high growth issues drove the rebound in
the second quarter. The Fund's focus on small-capitalization, undervalued
stocks prevented it from fully participating in this rebound.
PORTFOLIO REVIEW
The Fund's slight overweighting in the health care and energy sectors and
slight underweighting in consumer stocks hindered returns for the first six
months of the year. Our underweighting in the financial services sector proved
to be beneficial as it was one of the worst performing sectors for the period.
Overall, it was stock selection that drove returns as is generally the case
for our portfolio. In virtually every sector, we had a problem stock that
contributed to the Fund's underperformance. Komag, Hologic, and Wallace
Computer Services as well as the Fund's REIT holdings all experienced
difficulties. The energy sector was also down across-the-board. While we
certainly had some good stocks in the portfolio, they were not enough to
outweigh the poor performers. Fore Systems, Trigon Healthcare, United Auto
Group and Burlington Coat Factory posted positive results for the first half
of the year.
PORTFOLIO POSITIONING
Small stocks have been lagging the Standard & Poor's 500 Index for over four
years. Currently, valuations for small stocks are very attractive and the
earnings growth picture is brighter than it has been for several years.
However, as long as the market is in a consolidation or correction phase,
small stocks will not perform well. We believe that when the current market
correction is complete, that small-cap stocks will, once again, produce strong
returns.
/s/ Mary C. Champagne /s/ Jeffrey C. Petherick
Mary C. Champagne Jeffrey C. Petherick
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED JUNE 30, 1998
YEAR 1 3 5 SINCE
TO DATE YEAR YEARS YEARS INCEPTION(a)
- --------------------------------------------------------------------------------
Loomis Sayles Small Cap Value Fund
(Institutional) 2.90 14.73 25.82 18.63 20.45
Loomis Sayles Small Cap Value Fund
(Retail) 2.79 14.45 N/A N/A 18.63
Loomis Sayles Small Cap Value Fund
(Admin) 2.63 N/A N/A N/A 2.63
Lipper Small Cap Fund Index(b) 6.45 15.52 16.89 15.52 15.38
Russell 2000 Index(c) 4.93 16.51 18.86 16.04 15.99
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO JUNE 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis Lipper Russell 2000
As of 5/31/91 10.00 10.00 10.00
Period Ended
6/30/91 09.65 09.51 09.42
9/30/91 11.21 10.48 10.19
12/31/91 12.77 11.56 10.77
3/31/92 14.05 11.68 11.58
6/30/92 12.19 10.70 10.79
9/30/92 12.26 11.06 11.10
12/31/92 14.44 12.85 12.76
3/31/93 15.37 12.99 13.30
6/30/93 15.70 13.40 13.59
9/30/93 17.72 14.63 14.78
12/31/93 18.01 15.02 15.16
3/31/94 17.06 14.48 14.76
6/30/94 16.22 13.70 14.18
9/30/94 17.06 14.97 15.17
12/31/94 16.51 14.95 14.89
3/31/95 17.61 15.79 15.57
6/30/95 18.51 17.26 17.03
9/30/95 21.08 19.41 18.72
12/31/95 21.82 19.68 19.12
3/31/96 23.47 20.79 20.10
6/30/96 25.28 22.44 21.10
9/30/96 25.90 22.72 21.17
12/31/96 28.44 22.51 22.28
3/31/97 27.95 20.39 21.12
6/30/97 32.14 23.85 24.55
9/30/97 36.76 27.49 28.20
12/31/97 35.84 25.89 27.26
3/31.98 39.21 28.66 30.00
6/30/98 36.88 27.56 28.60
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a): Inception date of the Institutional Class of shares is May 13, 1991.
Since Lipper and Russell 2000 Index performance data is not available
coincident with this date, comparative performance is presented from May
31, 1991. Inception dates of the Retail and Admin Classes of shares are
December 31, 1996 and January 2, 1998, respectively.
(b): Source: Lipper Analytical Services.
(c): Russell 2000 Index is comprised on 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.
(d): Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail and Admin Classes of shares would be lower, due
to the higher fees paid by the Retail and Admin Classes of shares.
<PAGE>
- --------------------------------------------------------------------------------
FUND AND MANAGER REVIEW
- --------------------------------------------------------------------------------
LOOMIS SAYLES STRATEGIC VALUE FUND
- --------------------------------------------------------------------------------
[Photo of Philip J. Schettewi]
Philip J. Schettewi
KEY FUND FACTS
Objective: Long-term growth of capital
Strategy: Invests in stocks believed to be undervalued by
the market
Fund Inception Date: 12/31/96
Commencement of Operations of Class:
Institutional - 1/2/97, Retail - 1/2/97
Expense Ratio: Institutional - 1.00%,
Retail - 1.25%
Total Net Assets (all classes): $1.5 MM
PERFORMANCE SUMMARY
The Institutional Class of the Strategic Value Fund posted a return of 10.71%
for the first half of 1998, versus the Standard & Poor's 500 Index return of
17.71% and the 15.10% return of the average fund in Lipper's Growth Fund
category.
PORTFOLIO REVIEW
Growth stocks significantly outpaced value stocks during the first six months
of the year, resulting in weaker returns for the Fund. While large
capitalization stocks continued to lead the equity market, we avoided many of
these issues because of their rich valuations.
The best performing sectors for the Fund were technology and consumer
cyclicals. Shares of EMC Corporation have risen as the company continues to
dominate the computer data storage market. Gateway 2000, a direct seller of
personal computers, has benefited from strong demand, declining component
costs and significant operational improvements. Within consumer cyclicals,
Black & Decker posted the largest gains as their major restructuring
initiatives are expected to result in a more focused company with greater
earnings potential. Holdings in the basic materials and capital goods sectors
have suffered from the turmoil in Asia which has reduced demand and diminished
the pricing power of producers in these industries.
PORTFOLIO POSITIONING
In our opinion, the discrepancy in valuations between the largest "mega-
capitalization" stocks and the rest of the market has grown too large to be
sustainable for an extended period of time. We believe too high a premium is
being paid for the liquidity and stability of earnings of these companies. We
have found numerous opportunities to purchase stocks of other companies that
we believe possess superior overall earnings potential, yet sell at
significant discounts because their results are slightly more volatile.
/S/ Philip J.Schettewi
Philip J. Schettewi
<PAGE>
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED JUNE 30, 1998
SINCE
YEAR 1 INCEPTION
TO DATE YEAR (a)
- --------------------------------------------------------------------------------
Loomis Sayles Strategic Value Fund (Institutional) 10.71 13.96 20.72
Loomis Sayles Stategic Value Fund (Retail) 10.54 13.69 20.39
Lipper Growth Fund Index(b) 15.57 28.27 29.85
S&P 500 Index(c) 17.71 30.15 35.07
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO JUNE 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis Lipper S&P
As of 12/31/96 10.00 10.00 10.00
Period Ended
3/31/97 09.98 09.96 10.27
6/30/97 11.63 11.54 12.06
9/30/97 13.06 12.72 12.96
12/31/97 11.97 12.80 13.34
3/31/98 13.52 14.39 15.19
6/30/98 13.25 14.80 15.70
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a): Inception date of the Institutional and Retail Classes of shares is
December 31, 1996.
(b): Source: Lipper Analytical Services.
(c): S&P 500 Index 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.
(d): Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees
paid by the Retail Class of shares, be lower.
<PAGE>
LOOMIS SAYLES WORLDWIDE FUND
- --------------------------------------------------------------------------------
[Photo of Daniel J. Fuss]
Daniel J. Fuss
[Photo of E. John deBeer]
E. John deBeer
[Photo of Paul H. Drexler]
Paul H. Drexler
[Photo of Quentin P. Faulkner]
Quentin P. Faulkner
KEY FUND FACTS
Objective: High total investment return Strategy: Invests
in U.S. and foreign equity and debt securities
Fund Inception Date: 5/1/96
Commencement of Operations of Class:
Institutional - 5/1/96, Retail - 1/2/97
Expense Ratio: Institutional - 1.00%, Retail - 1.25%
Total Net Assets (all classes): $5.7 MM
PERFORMANCE SUMMARY
For the first six months of 1998, the Loomis Sayles Worldwide Fund's
Institutional Class returned -0.10%, as compared with the Lipper Global Flex
Portfolio category's 9.16% return, the Lehman Brothers Government/Corporate
Bond Index's 4.17% return and the Standard & Poor's 500 Index's 17.71% return.
PORTFOLIO REVIEW
The Fund's weak performance was due primarily to its foreign equity holdings,
which posted a -9.17% return versus the 15.93% return of the MSCI Europe,
Australia, Far East Index. Our Asian equity holdings were particularly hard-
hit. While the Fund's U.S. equities posted a strong return of 17.30%, the
position was underweighted, comprising only 20% of the portfolio. The Fund's
foreign bonds returned 7.99%, outperforming the Salomon Brothers World
Government Bond Index's 2.79% return.
In January 1998, we made significant changes to the Fund's asset allocation.
U.S. equities were reduced from 40% to 20%, which worked against us. Foreign
equities were increased from 23% to 30%, which also put a drag on performance,
because Asian equity holdings were increased as a result.
PORTFOLIO POSITIONING
As of June 30, Asian holdings represent 24.8% of the portfolio, with 8.4% of
this amount in equities and 16.4% in bonds. Given the volatility of these
markets and securities, this is the key commitment for the Fund. We believe
there is a strong foundation for vigorous economic growth in most Asian
countries. It is our opinion that financial markets have overreacted to
admittedly genuine financial, economic and political problems and we expect
our Asian holdings to recover strongly.
/s/Daniel J. Fuss /s/ Paul H. Drexler /s/ E. John deBeer /s/ Quentin P. Faulkner
Daniel J. Fuss Paul H. Drexler E. John deBeer Quentin P. Faulkner
<PAGE>
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED JUNE 30, 1998
SINCE
YEAR 1 INCEPTION
TO YEAR YEAR (a)
- --------------------------------------------------------------------------------
Loomis Sayles Worldwide Fund
(Institutional) -0.10 -1.59 5.79
Loomis Sayles Worldwide Fund
(Retail) -0.41 -1.98 1.93
Lipper Global Flex Portfolio Index(b) 8.21 11.34 13.87
S&P 500 Index(c) 17.71 30.15 31.17
CUMULATIVE PERFORMANCE - MAY 31, 1996 TO JUNE 30, 1998
[A line graph depicting the following plot points appears here.]
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 10.88 11.51
6/30/97 11.38 11.77 13.52
9/30/97 12.16 12.41 14.53
12/31/97 11.21 12.11 14.95
3/31/98 12.37 13.12 17.03
6/30/98 11.20 13.11 17.60
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a): Inception date of the Institutional Class of shares is May 1, 1996. Since
Lipper and S&P 500 Index performance data is not available coincident
with this date, comparative performance is presented from May 31, 1996.
Inception date of the Retail Class of shares is December 31, 1996.
(b): Source: Lipper Analytical Services.
(c): S&P 500 Index 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.
(d): Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees
paid by the Retail Class of shares, be lower.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF JUNE 30, 1998 (UNAUDITED)
SHARES VALUE (a)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 97.3% OF NET ASSETS
Aerospace -- 1.0%
Northrop Grumman Corp. ................... 7,500 $ 773,438
------------
Auto & Related -- 1.5%
TRW, Inc. ................................ 20,000 1,092,500
------------
Banks/Savings & Loans -- 7.7%
Chase Manhattan Corp. .................... 21,624 1,632,612
Fleet Financial Group, Inc. .............. 22,600 1,887,100
National City Corp. ...................... 16,300 1,157,300
PNC Bank Corp. ........................... 20,000 1,076,250
------------
5,753,262
------------
Business Services -- 1.5%
Dun & Bradstreet Corp. (b) ............... 30,000 1,083,750
------------
Chemicals -- Major -- 0.9%
Praxair, Inc. ............................ 15,000 702,188
------------
Chemicals -- Specialty -- 1.6%
E.I. du Pont DeNemours & Co. ............. 16,200 1,208,925
------------
Commercial Services -- 1.6%
Viad Corp. ............................... 41,500 1,151,625
------------
Communications Equipment -- 0.9%
Harris Corp. ............................. 14,400 643,500
------------
Computer Hardware -- 3.3%
International Business Machines Corp. .... 10,800 1,239,975
Sun Microsystems, Inc. (b) ............... 27,800 1,207,562
------------
2,447,537
------------
Data Processing Services -- 1.2%
First Data Corp. ......................... 27,000 899,437
------------
Electronics -- 7.5%
Applied Materials, Inc. (b) .............. 23,000 678,500
Litton Industries, Inc. (b) .............. 19,000 1,121,000
National Semiconductor Corp. (b) ......... 22,100 291,444
Philips Electronics NV ................... 18,500 1,572,500
Raytheon Co. ............................. 32,800 1,939,300
------------
5,602,744
------------
Financial Services -- 3.5%
Bear Stearns Companies, Inc. ............. 10,500 597,188
Finova Group, Inc. ....................... 24,724 1,399,996
Morgan Stanley Dean Witter & Co. ......... 7,000 639,625
------------
2,636,809
------------
Food -- Packaged & Miscellaneous -- 2.8%
ConAgra, Inc. ............................ 44,000 1,394,250
Sara Lee Corp. ........................... 12,000 671,250
------------
2,065,500
------------
Forest Products -- 2.3%
Georgia Pacific Corp. .................... 12,500 736,719
Georgia Pacific Timber Group ............. 42,500 980,156
------------
1,716,875
------------
Freight Transportation -- 1.7%
Ryder System, Inc. ....................... 41,000 1,294,062
------------
Health Care -- Drugs -- 2.9%
Abbott Laboratories ...................... 32,500 1,328,437
Pharmacia & Upjohn, Inc. ................. 18,700 862,538
------------
2,190,975
------------
Health Care -- Services -- 2.5%
Tenet Healthcare Corp. (b) ............... 60,000 1,875,000
------------
Home Products -- 1.4%
Premark International, Inc. .............. 32,500 1,048,125
------------
Housing & Building Materials -- 3.4%
Armstrong World Industries, Inc. ......... 18,100 1,219,487
Black & Decker Corp. ..................... 22,000 1,342,000
------------
2,561,487
------------
Imaging -- 1.1%
Xerox Corp. .............................. 7,700 782,513
------------
Insurance -- 4.0%
Ace Ltd. ................................. 39,450 1,538,550
Allstate Corp. ........................... 15,998 1,464,817
------------
3,003,367
------------
Leisure -- 2.0%
Hasbro, Inc. ............................. 38,000 1,493,875
------------
Machinery -- 2.1%
Deere & Co. .............................. 30,000 1,586,250
------------
Manufacturing -- 3.4%
Eaton Corp. .............................. 16,500 1,282,875
Tenneco, Inc. ............................ 24,600 936,338
York International Corp. ................. 7,700 335,431
------------
2,554,644
------------
Natural Gas -- 1.5%
Columbia Gas Systems, Inc. ............... 19,800 1,101,375
------------
Oil & Gas Drilling Equipment -- 1.5%
BJ Services Co. (b) ...................... 20,500 595,781
Cooper Cameron Corp. (b) ................. 10,300 525,300
------------
1,121,081
------------
Oil & Gas Exploration -- 0.8%
Oryx Energy Co. (b) ...................... 27,000 597,375
------------
Oil & Gas -- Major Integrated -- 6.9%
British Petroleum Plc ADR ................ 16,830 1,485,248
Exxon Corp. .............................. 11,300 805,831
Mobil Corp. .............................. 19,800 1,517,175
USX Marathon Group ....................... 38,000 1,303,875
------------
5,112,129
------------
Personal Care -- 1.4%
Kimberly Clark Corp. ..................... 22,000 1,009,250
------------
Publishing -- 0.6%
McGraw-Hill Cos., Inc. ................... 5,600 456,750
------------
Real Estate Investment Trusts -- 2.6%
Health Care Property Investments, Inc. ... 30,200 1,089,088
Meditrust Corp. .......................... 30,025 838,823
------------
1,927,911
------------
Retail -- Food -- 1.1%
Kroger Co. (b) ........................... 19,000 814,625
------------
Retail -- General -- 4.1%
Federated Department Stores, Inc. (b) .... 33,000 1,775,812
Sears Roebuck & Co. ...................... 21,000 1,282,313
------------
3,058,125
------------
Telecommunications -- 9.4%
American Home Products Corp. ............. 25,000 1,293,750
Ameritech Corp. .......................... 34,900 1,566,137
Bell Atlantic Corp. ...................... 24,400 1,113,250
BellSouth Corp. .......................... 30,000 2,013,750
Century Telephone Enterprises, Inc. ...... 21,600 990,900
------------
6,977,787
------------
Textile & Apparel -- 0.7%
Reebok International Ltd. (b) ............ 19,000 526,063
------------
Tobacco -- 1.1%
Philip Morris Cos., Inc. ................. 20,600 811,125
------------
Utilities -- 3.8%
Consolidated Edison, Inc. ................ 20,000 921,250
Pacificorp ............................... 45,000 1,018,125
Pinnacle West Capital Corp. .............. 19,700 886,500
------------
2,825,875
------------
TOTAL COMMON STOCKS
(Identified Cost $58,917,615)........... 72,507,859
------------
SHORT-TERM INVESTMENT -- 2.7% OF NET ASSETS
Associates Corp. of North America
5.950%, 7/01/98 ......................... $2,006,556 $ 2,006,556
------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $2,006,556)............ 2,006,556
------------
TOTAL INVESTMENTS -- 100.0%
(IDENTIFIED COST $60,924,171) (c)....... 74,514,415
Cash and Other Assets,
Less Liabilities -- 0.0%.............. 16,220
------------
NET ASSETS -- 100%........................ $ 74,530,635
============
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1998, the net unrealized appreciation on investments based on
cost of $60,924,171 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
$15,052,960, and $1,462,716, respectively, resulting in net unrealized
appreciation of $13,590,244.
Key to Abbreviations:
ADR: American Depositary Receipt.
See accompanying notes to financial statements.
<PAGE>
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LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF JUNE 30, 1998 (UNAUDITED)
SHARES VALUE (a)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 100.1% OF NET ASSETS
Broadcasting -- 1.5%
Tele Communications, Inc. (b) ............ 12,100 $ 465,094
-----------
Chemicals -- Major -- 3.4%
E.I. du Pont DeNemours & Co. ............. 1,800 134,325
Monsanto Co. ............................. 16,600 927,525
-----------
1,061,850
-----------
Communications Equipment -- 13.7%
Ascend Communications, Inc. (b) .......... 9,600 475,800
Ciena Corp. (b) .......................... 16,200 1,127,925
Cisco Systems, Inc. (b) .................. 9,400 865,388
Loral Space & Communications Ltd. (b) .... 20,400 576,300
Lucent Technologies, Inc. ................ 9,900 823,556
Tellabs, Inc. (b) ........................ 5,100 365,287
-----------
4,234,256
-----------
Computer Software & Services -- 11.5%
America Online, Inc. (b) ................. 4,500 477,000
Automatic Data Processing, Inc. .......... 8,800 641,300
Compuware Corp. (b) ...................... 10,800 552,150
Fiserv, Inc. (b) ......................... 4,800 203,850
HBO & Co. ................................ 33,400 1,177,350
Paychex, Inc. ............................ 12,250 498,422
-----------
3,550,072
-----------
Financial Services -- 6.4%
Associates First Capital Corp. ........... 7,500 576,562
Federal National Mortgage Association .... 8,100 492,075
MGIC Investment Corp. .................... 5,800 330,963
SunAmerica, Inc. ......................... 9,900 568,631
-----------
1,968,231
-----------
Health Care -- Biotechnology -- 2.2%
MedImmune, Inc. (b) ...................... 6,500 405,438
Oncor, Inc. (b) .......................... 378,000 283,500
-----------
688,938
-----------
Health Care -- Drugs -- 1.8%
Pfizer, Inc. ............................. 5,000 543,438
-----------
Health Care -- Medical Technology -- 2.8%
Allegiance Corp. ......................... 16,800 861,000
-----------
Health Care -- Services -- 2.5%
Healthsouth Corp. (b) .................... 29,000 773,938
-----------
Insurance -- 5.0%
American International Group, Inc. ....... 7,325 1,069,450
EXEL Ltd. ................................ 6,200 482,438
-----------
1,551,888
-----------
Oil & Gas Drilling Equipment -- 15.1%
Cooper Cameron Corp. (b) ................. 16,900 861,900
Halliburton Co. .......................... 22,100 984,831
Noble Drilling Corp. (b) ................. 26,100 628,031
Rowan Companies, Inc. (b) ................ 24,600 478,163
Schlumberger Ltd. ........................ 8,100 553,331
Unit Corp. (b) ........................... 191,300 1,159,756
-----------
4,666,012
-----------
Oil & Gas Exploration -- 5.5%
Anadarko Petroleum Corp. ................. 13,800 927,187
Cross Timbers Oil Co. .................... 31,100 592,844
Ocean Energy, Inc. (b) ................... 9,082 177,667
-----------
1,697,698
-----------
Personal Care -- 1.8%
Gillette Co. ............................. 9,500 538,531
-----------
Restaurants -- 4.8%
Starbucks Corp. (b) ...................... 28,000 1,496,250
-----------
Retail -- Food & Drug -- 4.3%
CVS Corp. .............................. 17,600 685,300
Walgreen Co. ........................... 15,200 627,950
-----------
1,313,250
-----------
Retail -- General -- 5.6%
Fastenal Co. ............................. 4,400 204,325
Kohl's Corp. (b) ......................... 10,900 565,437
Wal-Mart Stores, Inc. .................... 15,900 965,925
-----------
1,735,687
-----------
Retail -- Specialty -- 8.8%
Bed Bath & Beyond, Inc. (b) .............. 15,400 797,912
Borders Group, Inc. (b) .................. 16,500 610,500
Home Depot, Inc. ......................... 15,900 1,320,694
-----------
2,729,106
-----------
Telecommunications -- 3.4%
WorldCom, Inc. (b) ....................... 22,000 1,065,625
-----------
TOTAL COMMON STOCKS
(Identified Cost $25,820,217)........... 30,940,864
-----------
FACE
AMOUNT VALUE(a)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 0.7% OF NET ASSETS
Repurchase Agreement with State Street
Bank and Trust Co., dated 6/30/98 at
5.000% to be repurchased at $228,032
on 7/01/98 collateralized by $230,000
U.S. Treasury Note, 6.250%, due 6/30/02,
with a value of $235,247 ............... $228,000 $ 228,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $228,000).............. 228,000
-----------
TOTAL INVESTMENTS -- 100.8%
(IDENTIFIED COST $26,048,217) (c)....... 31,168,864
Liabilities, Less Cash
and Other Assets -- (0.8%)............ (239,789)
-----------
NET ASSETS -- 100%........................ $30,929,075
===========
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1998, the net unrealized appreciation on investments based on
cost of $26,048,217 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
$7,065,230, and $1,944,583, respectively, resulting in net unrealized
appreciation of $5,120,647.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF JUNE 30, 1998 (UNAUDITED)
SHARES (a) VALUE (b)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 95.7% OF NET ASSETS
Australia -- 3.2%
Brambles Industries Ltd. ................. 63,000 $ 1,239,308
Leighton Holdings Ltd. ................... 172,000 603,779
Southcorp Ltd. ........................... 235,000 684,159
-----------
2,527,246
-----------
Brazil -- 0.4%
SABESP ................................... 2,848,000 342,287
Telemig SA ............................... 42,776 2,977
-----------
345,264
-----------
Canada -- 8.3%
Bombardier, Inc. ......................... 43,000 1,168,836
Canadian National Railway Co. ............ 16,750 890,116
Donohue, Inc. ............................ 40,500 915,106
Northern Telecom Ltd. .................... 19,400 1,099,494
Petro-Canada ............................. 58,300 942,910
Royal Bank of Canada ..................... 20,000 1,202,813
Torstar Corp. ............................ 15,000 479,087
-----------
6,698,362
-----------
Denmark -- 6.3%
Carlsberg A/S ............................ 14,000 1,018,997
Sophus Berendsen ......................... 20,000 829,755
The Codan Group .......................... 2,895 400,357
Tryg-Baltica Forsikring A/S .............. 43,250 1,177,342
Unidanmark A/S ........................... 18,500 1,664,313
-----------
5,090,764
-----------
France -- 11.1%
Axa-UAP Re SA ............................ 8,500 956,051
Banque Nationale de Paris ................ 13,500 1,103,098
Comptoirs Modernes ....................... 1,540 802,388
Elf Aquitaine SA ......................... 9,000 1,265,362
L' Air Liquide ........................... 6,412 1,060,589
Michelin ................................. 17,000 981,359
St. Gobain ............................... 6,900 1,279,405
Valeo .................................... 14,500 1,482,211
-----------
8,930,463
-----------
Germany -- 10.8%
Allianz AG ............................... 4,500 1,500,873
Daimler Benz AG .......................... 9,800 964,540
Henkel KGAA (Preferred) .................. 14,000 1,385,677
Lufthansa AG ............................. 50,000 1,260,085
MAN AG (Preferred) ....................... 3,600 972,137
Veba AG .................................. 21,800 1,466,872
Volkswagen AG ............................ 1,200 1,159,777
-----------
8,709,961
-----------
Italy -- 7.9%
Credito Italiano ......................... 243,000 1,272,613
Edison Spa ............................... 140,000 1,124,018
ENI Spa .................................. 215,000 1,409,737
Ericsson Spa ............................. 19,900 1,179,384
Telecom Italia Spa ....................... 279,000 1,351,228
-----------
6,336,980
-----------
Japan -- 9.6%
Canon, Inc. .............................. 45,000 1,025,168
Familymart Co. ........................... 30,000 1,145,585
Fuji Photo Film Co. ...................... 30,000 1,047,950
Nichii Gakkan Co. ........................ 20,000 666,811
Nintendo Co. Ltd. ........................ 8,000 743,473
Nippon Telegraph & Telephone Corp. ....... 120 998,047
Nomura Securities Co. Ltd. ............... 75,000 876,004
Uny Co. Ltd. ............................. 73,000 1,187,893
-----------
7,690,931
-----------
Netherlands -- 7.1%
ABN Amro Holdings ........................ 35,000 819,579
Fortis Amev .............................. 17,000 996,040
Grolsch .................................. 21,900 581,774
Hollandsche Beton Groep .................. 42,000 876,055
Koninklijke KPN NV ....................... 17,000 654,827
Koninklijke Pakhoed ...................... 15,000 487,025
Philips Electronics ...................... 10,500 883,286
TNT Post Group NV ........................ 17,000 434,879
-----------
5,733,465
-----------
New Zealand -- 1.7%
Air New Zealand Ltd. ..................... 269,000 289,747
Corporate Investments Ltd. ............... 1,378,600 559,537
Nuplex Industries Ltd. ................... 440,000 526,594
-----------
1,375,878
-----------
Portugal -- 5.8%
BPI ...................................... 30,000 968,743
Brisa-Auto Estradas de Portugal SA ....... 19,000 813,109
Electricidade Portugal ................... 20,000 465,222
Engil -- SGPS ............................ 70,000 795,937
Portugal Telecom SA ...................... 30,000 1,591,008
-----------
4,634,019
-----------
Singapore -- 1.6%
Development Bank of Singapore ............ 180,000 998,813
Singapore Telecommunications ............. 225,000 320,475
-----------
1,319,288
-----------
Spain -- 9.0%
Acerinox ................................. 7,800 1,037,626
Azucarera Ebro Agricolas SA .............. 31,295 930,585
Banco Bilboa Vizcaya SA .................. 20,000 1,026,410
Banco Santander SA ....................... 44,124 1,129,356
Fomento de Construction y Contratas SA ... 19,000 980,046
Iberdrola SA ............................. 55,000 893,055
Repsol SA ................................ 22,325 1,227,256
-----------
7,224,334
-----------
Thailand -- 1.2%
Advanced Info Service Public Co. Ltd. .... 67,000 285,782
Electricity Generating Public Co. Ltd. ... 239,000 370,960
Industrial Finance Corp. of Thailand ..... 77,000 15,874
Phatra Thanakit Public Co. Ltd. .......... 500,000 45,024
Thai Farmers Bank Public Co. Ltd. ........ 250,000 220,675
-----------
938,315
-----------
United Kingdom -- 11.7%
Anglian Water ............................ 75,000 1,053,163
Boots Co. Plc ............................ 80,000 1,326,410
British Aerospace Plc .................... 175,000 1,341,187
Commercial Union ......................... 45,000 840,777
FKI Plc .................................. 358,333 1,044,049
Lloyds TSB Group ......................... 65,000 913,284
Rolls-Royce Plc .......................... 260,000 1,072,281
Scottish & Newcastle ..................... 70,000 986,459
Scottish Hydro ........................... 97,000 851,914
-----------
9,429,524
-----------
TOTAL COMMON STOCKS
(Identified Cost $73,876,358)........... 76,984,794
-----------
RIGHTS -- 0.0% OF NET ASSETS
Brazil -- 0.0%
Telemig SA, expiring 7/21/98 (c) ......... 26 0
-----------
Thailand -- 0.0%
Industrial Finance Corp. of Thailand,
expiring 7/19/98 (c) ..................... 38,500 0
-----------
TOTAL RIGHTS
(Identified Cost $0).................... 0
-----------
FACE
AMOUNT VALUE (b)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 3.7% OF NET ASSETS
Repurchase Agreement with State Street Bank
and Trust Co., dated 6/30/98 at 5.000%
to be repurchased at $2,988,415 on
7/01/98 collateralized by $2,325,000
U.S. Treasury Bond, 8.125%, due 8/15/19
with a value of $3,054,078 ............ $ 2,988,000 $ 2,988,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $2,988,000)............ 2,988,000
-----------
TOTAL INVESTMENTS -- 99.4%
(IDENTIFIED COST $76,864,358) (d)....... 79,972,794
Cash and Other Assets,
Less Liabilities -- 0.6%............ 512,198
-----------
NET ASSETS -- 100%........................ $80,484,992
===========
(a) Ordinary shares unless otherwise noted.
(b) See Note 1.
(c) Non-income producing security.
(d) At June 30, 1998, the net unrealized appreciation on investments based on
cost of $76,864,358 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
$8,575,834, and $5,467,398, respectively, resulting in net unrealized
appreciation of $3,108,436.
Ten Largest Sector Holdings at June 30, 1998
as a Percentage of Net Assets
Bank & Finance 15.2%
Telecommunications 8.1%
Insurance 7.3%
Oil & Gas 7.3%
Utilities 6.0%
Auto & Related 5.7%
Retail 5.6%
Manufacturing 5.1%
Transportation 4.8%
Beverages 3.2%
See accompanying notes to financial statements.
<PAGE>
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LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES MID-CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS -- AS OF JUNE 30, 1998 (UNAUDITED)
SHARES VALUE(a)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 92.7% OF NET ASSETS
Business Services -- 3.0%
ABR Information Services, Inc. (b) ....... 1,000 $ 23,750
Cintas Corp. ............................. 800 40,800
-----------
64,550
-----------
Chemicals -- Major -- 3.1%
Monsanto Co. ............................. 1,200 67,050
-----------
Communications Equipment -- 11.3%
Ciena Corp. (b) .......................... 1,400 97,475
Cisco Systems, Inc. (b) .................. 500 46,031
Loral Space & Communications Ltd. (b) .... 800 22,600
Lucent Technologies, Inc. ................ 500 41,594
Tellabs, Inc. (b) ........................ 500 35,813
-----------
243,513
-----------
Computer Software & Services -- 19.3%
America Online, Inc. (b) ................. 400 42,400
Compuware Corp. (b) ...................... 700 35,788
Electronic Arts (b) ...................... 700 37,800
Fiserv, Inc. (b) ......................... 1,050 44,592
HBO & Co. ................................ 1,600 56,400
Network Associates, Inc. (b) ............. 900 43,088
Paychex, Inc. ............................ 1,500 61,031
SunGard Data Systems, Inc. (b) ........... 1,200 46,050
Symantec Corp. (b) ....................... 1,900 49,637
-----------
416,786
-----------
Financial Services -- 4.9%
MGIC Investment Corp. .................... 600 34,237
SunAmerica, Inc. ......................... 1,250 71,797
-----------
106,034
-----------
Health Care -- Biotechnology -- 3.2%
MedImmune, Inc. (b) ...................... 800 49,900
Oncor, Inc. (b) .......................... 25,900 19,425
-----------
69,325
-----------
Health Care -- Drugs -- 2.0%
Pfizer, Inc. ............................. 400 43,475
-----------
Health Care -- Medical Technology -- 7.3%
Allegiance Corp. ......................... 1,200 61,500
Arterial Vascular Engineering, Inc. (b) .. 1,100 39,325
Steris Corp. (b) ......................... 900 57,234
-----------
158,059
-----------
Health Care -- Services -- 2.1%
Healthsouth Corp. (b) .................... 1,700 45,369
-----------
Insurance -- 3.3%
EXEL Ltd. ................................ 900 70,031
-----------
Oil & Gas Drilling Equipment -- 11.3%
Cooper Cameron Corp. (b) ................. 1,200 61,200
Noble Drilling Corp. (b) ................. 3,600 86,625
Rowan Companies, Inc. (b) ................ 1,400 27,212
Unit Corp. (b) ........................... 11,100 67,294
-----------
242,331
-----------
Oil & Gas Exploration -- 5.4%
Abacan Resources Corp. (New) (b) ......... 6,100 3,812
Anadarko Petroleum Corp. ................. 500 33,594
Cross Timbers Oil Co. .................... 2,000 38,125
Ocean Energy, Inc. (b) ................... 2,106 41,199
-----------
116,730
-----------
Restaurants -- 4.6%
Starbucks Corp. (b) ...................... 1,850 98,859
-----------
Retail -- Food & Drug -- 2.2%
CVS Corp. ................................ 1,200 46,725
-----------
Retail -- General -- 3.9%
Kohl's Corp. (b) ......................... 1,600 83,000
-----------
Retail -- Specialty -- 5.8%
Bed Bath & Beyond, Inc. (b) .............. 900 46,632
Borders Group, Inc. (b) .................. 1,000 37,000
Home Depot, Inc. ......................... 500 41,531
-----------
125,163
-----------
TOTAL COMMON STOCKS
(Identified Cost $1,756,797)............ 1,997,000
-----------
FACE
AMOUNT VALUE (a)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 6.9% OF NET ASSETS
Repurchase Agreement with State Street
Bank and Trust Co., dated 6/30/98 at
5.000% to be repurchased at $150,021
on 7/01/98 collateralized by $150,000
U.S. Treasury Bond, 6.250%, due
6/30/02 with a value of $153,422 ...... $ 150,000 $ 150,000
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $150,000).............. 150,000
-----------
TOTAL INVESTMENTS -- 99.6%
(Identified cost $1,906,797) (c)........ 2,147,000
Cash and Other Assets, Less
Liabilities -- 0.4%................... 7,927
-----------
NET ASSETS -- 100%........................ $ 2,154,927
===========
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1998, the net unrealized appreciation on investments based on
cost of $1,906,797 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 $422,600,
and $182,397, respectively, resulting in net unrealized appreciation of
$240,203.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF JUNE 30, 1998 (UNAUDITED)
SHARES VALUE(a)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 100.4% of Net Assets
Advertising -- 1.5%
Young & Rubicam, Inc. (b) ................ 2,150 $ 68,800
-----------
Aerospace -- 1.7%
Gencorp, Inc. ............................ 2,000 50,500
Gulfstream Aerospace Corp. (b) ........... 500 23,250
-----------
73,750
-----------
Auto & Related -- 1.4%
Magna International, Inc. ................ 900 61,763
-----------
Banks/Savings & Loans -- 6.7%
AmSouth Bancorp .......................... 2,250 88,453
Imperial Bancorp (b) ..................... 1,000 30,000
M&T Bank Corp. ........................... 200 110,800
Provident Financial Group, Inc. .......... 1,500 68,438
-----------
297,691
-----------
Broadcasting -- 2.0%
United Video Satellite Group, Inc. (b) ... 2,300 91,138
-----------
Business Services -- 2.7%
Dun & Bradstreet Corp. (b) ............... 3,280 118,490
-----------
Chemicals -- Specialty -- 2.1%
Ecolab, Inc. ............................. 1,400 43,400
Solutia, Inc. ............................ 1,800 51,637
-----------
95,037
-----------
Computer Hardware -- 4.2%
Gateway 2000, Inc. (b) ................... 1,800 91,125
Lexmark International Group, Inc. (b) .... 1,600 97,600
-----------
188,725
-----------
Computer Software & Services -- 4.4%
Symantec Corp. (b) ....................... 3,700 96,662
Synopsys, Inc. (b) ....................... 2,200 100,650
-----------
197,312
-----------
Consumer Products -- 1.7%
American Greetings Corp. ................. 1,500 76,406
-----------
Diversified Operations -- 1.2%
Lancaster Colony Corp. ................... 1,400 53,025
-----------
Electronics -- 3.3%
CHS Electronics, Inc. (b) ................ 3,000 53,625
Integrated Device Technology, Inc. (b) ... 3,200 22,900
Novellus Systems, Inc. (b) ............... 1,960 69,947
-----------
146,472
-----------
Financial Services -- 6.3%
A.G. Edwards, Inc. ....................... 800 34,150
AMRESCO, Inc. (b) ........................ 1,900 55,338
Bear Stearns Companies, Inc. ............. 400 22,750
Countrywide Credit Industries, Inc. ...... 1,200 60,900
First Plus Financial Group, Inc. (b) ..... 1,200 43,200
Omega Worldwide, Inc. (b) ................ 66 499
Reliastar Financial Corp. ................ 1,300 62,400
-----------
279,237
-----------
Food -- Packaged & Miscellaneous -- 4.6%
Dean Foods Co. ........................... 1,500 82,406
Smithfield Foods, Inc. (b) ............... 4,050 123,525
-----------
205,931
-----------
Forest Products -- 1.0%
Georgia Pacific Timber Group ............. 2,000 46,125
-----------
Health Care -- Drugs -- 1.3%
Biovail Corp. International (b) .......... 1,800 57,600
-----------
Health Care -- Medical Technology -- 4.7%
Invacare Corp. ........................... 1,800 46,125
Steris Corp. (b) ......................... 2,600 165,344
-----------
211,469
-----------
Health Care -- Services -- 2.2%
PhyCor, Inc. (b) ......................... 3,700 61,281
Sierra Health Services, Inc. (b) ......... 1,500 37,781
-----------
99,062
-----------
Home Builders -- 3.3%
Champion Enterprises, Inc. (b) ........... 5,075 149,078
-----------
Insurance -- 5.2%
Old Republic International Corp. ......... 1,600 46,900
PartnerRe Ltd. ........................... 1,700 86,700
Reliance Group Holdings, Inc. ............ 5,500 96,250
-----------
229,850
-----------
Machinery -- 1.4%
United Dominion Industries Ltd. .......... 1,900 63,413
-----------
Manufacturing -- 3.9%
MascoTech, Inc. .......................... 3,100 74,400
Pentair, Inc. ............................ 1,300 55,250
Regal-Beloit Corp. ....................... 1,500 42,750
-----------
172,400
-----------
Natural Gas -- 2.7%
Columbia Gas Systems, Inc. ............... 1,650 91,781
MCN Energy Group, Inc. ................... 1,100 27,363
-----------
119,144
-----------
Oil & Gas Drilling Equipment -- 2.6%
National Oilwell, Inc. (b) ............... 2,000 53,625
Noble Drilling Corp. (b) ................. 2,500 60,156
-----------
113,781
-----------
Oil & Gas Refining -- 1.2%
Ashland, Inc. ............................ 1,000 51,625
-----------
Real Estate Investment Trusts -- 2.3%
Mack California Realty Corp. ............. 1,000 34,375
OMEGA Healthcare Investors ............... 2,000 70,250
-----------
104,625
-----------
Refrigeration Systems -- 1.5%
Hussmann International, Inc. ............. 3,500 64,969
-----------
Restaurants -- 2.6%
Wendy's International, Inc. .............. 4,950 116,325
-----------
Retail -- Food -- 1.7%
Food Lion, Inc. .......................... 7,300 77,563
-----------
Retail -- General -- 1.4%
Fingerhut Companies, Inc. ................ 1,860 61,380
-----------
Retail -- Specialty -- 6.1%
CDW Computer Centers, Inc. (b) ........... 1,200 60,000
Claire's Stores, Inc. .................... 2,200 45,100
Gucci Group NV ........................... 400 21,200
Payless Shoesource, Inc. (b) ............. 600 44,213
Saks Holdings, Inc. (b) .................. 1,600 44,200
Zale Corp. (b) ........................... 1,800 57,262
-----------
271,975
-----------
Security Systems -- 0.8%
Sensormatic Electronics Corp. ............ 2,500 35,000
-----------
Telecommunications -- 1.0%
Century Telephone Enterprises, Inc. ...... 1,000 45,875
-----------
Utilities -- 8.1%
BEC Energy ............................... 1,600 66,400
CalEnergy, Inc. (b) ...................... 2,500 75,156
Energy East Corp. ........................ 2,000 83,250
Florida Progress Corp. ................... 1,600 65,800
Peco Energy Co. .......................... 2,400 70,050
-----------
360,656
-----------
Waste Management -- 1.6%
Browning Ferris Industries Inc. .......... 2,000 69,500
-----------
TOTAL COMMON STOCKS
(Identified Cost $4,248,758)............ 4,475,192
-----------
TOTAL INVESTMENTS -- 100.4%
(IDENTIFIED COST $4,248,758) (c)........ 4,475,192
Liabilities, Less Cash and
Other Assets -- (0.4%)................ (18,375)
-----------
NET ASSETS -- 100%.......................... $ 4,456,817
===========
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1998, the net unrealized appreciation on investments based on
cost of $4,248,758 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 $344,315,
and $117,881, respectively, resulting in net unrealized appreciation of
$226,434.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF JUNE 30, 1998 (UNAUDITED)
SHARES VALUE(a)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 96.7% OF NET ASSETS
Advertising -- 1.6%
Lamar Advertising Co. (b) ................ 9,350 $ 335,431
-----------
Aerospace -- 2.1%
Kellstrom Industries, Inc. (b) ........... 15,300 443,222
-----------
Agricultural -- 3.2%
Agribiotech, Inc. (b) .................... 15,600 431,925
Delta & Pine Land Co. .................... 5,165 229,842
-----------
661,767
-----------
Banks/Savings & Loans -- 7.9%
Astoria Financial Corp. .................. 6,800 363,800
FirstFed Financial Corp. (b) ............. 9,550 496,600
PBOC Holdings, Inc. (b) .................. 14,900 205,806
Peoples Heritage Financial Group, Inc. ... 14,600 344,925
Staten Island Bancorp, Inc. (b) .......... 10,200 232,050
-----------
1,643,181
-----------
Broadcasting -- 3.0%
Emmis Broadcasting Corp. (b) ............. 7,400 353,812
Metro Networks, Inc. (b) ................. 6,100 263,063
-----------
616,875
-----------
Business Services -- 13.0%
Abacus Direct Corp. (b) .................. 8,700 451,856
CheckFree Holdings Corp. (b) ............. 11,450 337,059
Ha Lo Industries, Inc. (b) ............... 12,600 392,175
Labor Ready, Inc. (b) .................... 19,300 582,619
Lason Holdings, Inc. (b) ................. 7,750 422,375
Saville Systems Ireland Plc ADR (b) ...... 3,700 185,463
Staff Leasing, Inc. (b) .................. 10,400 306,800
-----------
2,678,347
-----------
Communications Equipment -- 0.9%
Uniphase Corp. (b) ..................... 3,000 188,344
-----------
Computer Hardware -- 2.0%
Network Appliance, Inc. (b) .............. 10,450 406,897
-----------
Computer Software & Services -- 18.7%
Advantage Learning Systems, Inc. (b) ..... 6,300 172,463
BroadVision, Inc. (b) .................... 12,350 294,856
Ciber, Inc. (b) .......................... 9,400 357,200
Concord Communications, Inc. (b) ......... 9,600 245,400
Diamond Technology Partners, Inc. (b) .... 15,800 477,950
Gemstar International Group Ltd. (b) ..... 4,300 160,981
Geotel Communications Corp. (b) .......... 11,900 484,925
Lernout & Hauspie Speech Products NV (b) . 2,300 137,281
Lycos, Inc. (b) .......................... 6,000 452,250
Mastech Corp. (b) ........................ 15,600 438,750
Pegasus Systems, Inc. (b) ................ 7,800 199,875
Sapient Corp. (b) ........................ 8,400 443,100
-----------
3,865,031
-----------
Electronics -- 2.0%
Sipex Corp. (b) .......................... 19,550 420,325
-----------
Entertainment -- 1.4%
Sportsline USA, Inc. (b) ................. 7,700 281,531
-----------
Financial Services -- 3.3%
Hambrecht & Quist Group, Inc. (b) ........ 5,900 214,244
Healthcare Financial Partners, Inc. (b) .. 7,800 478,237
-----------
692,481
-----------
Food -- Packaged & Miscellaneous -- 3.9%
Hain Food Group, Inc. (b) ................ 17,100 442,463
NBTY, Inc. (b) ........................... 19,550 359,231
-----------
801,694
-----------
Health Care -- Biotechnology -- 3.4%
Gilead Sciences, Inc. (b) ................ 5,200 166,725
MedImmune, Inc. (b) ...................... 3,100 193,363
Pharmacyclics, Inc. (b) .................. 7,500 178,125
Sepracor, Inc. (b) ....................... 4,200 174,300
-----------
712,513
-----------
Health Care -- Medical Technology -- 2.0%
Novoste Corp. (b) ........................ 6,500 143,406
Theragenics Corp. (b) .................... 10,000 260,625
-----------
404,031
-----------
Health Care -- Services -- 3.5%
MedQuist, Inc. (b) ....................... 18,000 519,750
Sunrise Assisted Living, Inc. (b) ........ 5,750 197,656
-----------
717,406
-----------
Home Builders -- 3.6%
D.R. Horton, Inc. ........................ 22,750 474,906
Lennar Corp. ............................. 9,400 277,300
-----------
752,206
-----------
Insurance -- 1.4%
Annuity and Life Re (Holdings) Ltd. (b) .. 13,000 287,625
-----------
Oil & Gas Drilling Equipment -- 2.5%
Dril-Quip, Inc. (b) ...................... 5,900 154,875
Veritas DGC, Inc. (b) .................... 7,200 359,550
-----------
514,425
-----------
Oil & Gas Exploration -- 0.8%
Cross Timbers Oil Co. .................... 9,200 175,375
-----------
Restaurants -- 1.5%
Papa John's International, Inc. (b) ...... 7,800 307,613
-----------
Retail -- General -- 2.1%
99 Cents Only Stores (b) ................. 10,300 427,450
-----------
Retail -- Specialty -- 6.6%
CD Now, Inc. (b) ......................... 10,300 207,287
Just For Feet, Inc. (b) .................. 15,200 433,200
Pacific Sunwear of California (b) ........ 15,200 532,000
Restoration Hardware, Inc. (b) ........... 7,300 183,413
-----------
1,355,900
-----------
Telecommunications -- 4.5%
IDT Corp. (b) ............................ 14,750 443,422
Metromedia Fiber Network, Inc. (b) ....... 6,100 284,413
WinStar Communications, Inc. (b) ......... 4,700 201,806
-----------
929,641
-----------
Transportation -- 1.8%
Coach USA, Inc. (b) ...................... 8,100 369,563
-----------
TOTAL COMMON STOCKS
(Identified Cost $18,248,762)........... 19,988,874
-----------
FACE
AMOUNT
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 7.5% OF NET ASSETS
Repurchase Agreement with State
Street Bank and Trust Co.,
dated 6/30/98 at 5.000%
to be repurchased at $1,554,216
on 7/01/98 collateralized by
$1,210,000 U.S. Treasury Bond,
8.125%, due 8/15/19 with a value
of $1,589,434 ......................... $ 1,554,000 1,554,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $1,554,000)............ 1,554,000
-----------
TOTAL INVESTMENTS -- 104.2%
(IDENTIFIED COST $19,802,762) (c)....... 21,542,874
Liabilities, Less Cash and
Other Assets -- (4.2%)................ (875,366)
-----------
NET ASSETS -- 100%........................ $20,667,508
===========
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1998, the net unrealized appreciation on investments based on
cost of $19,802,762 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
$1,966,459, and $226,347, respectively, resulting in net unrealized
appreciation of $1,740,112.
Key to Abbreviations:
ADR: American Depositary Receipt.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF JUNE 30, 1998 (UNAUDITED)
SHARES VALUE(a)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 91.0% OF NET ASSETS
Aerospace -- 2.1%
Alliant Techsystems, Inc. (b) ............ 58,200 $ 3,681,150
Gencorp, Inc. ............................ 114,200 2,883,550
Nichols Research Corp. (b) ............... 67,450 1,842,228
-----------
8,406,928
-----------
Auto & Related -- 0.9%
Dura Automotive Systems, Inc. (b) ........ 51,600 1,657,650
Intermet Corp. ........................... 105,700 1,915,813
-----------
3,573,463
-----------
Banks/Savings & Loans -- 5.1%
Bank United Corp. ........................ 82,300 3,940,113
City National Corp. ...................... 50,700 1,872,731
CNB Bancshares, Inc. ..................... 41,600 1,996,800
Commercial Federal Corp. ................. 85,450 2,702,356
Downey Financial Corp. ................... 96,125 3,142,086
Imperial Bancorp (b) ..................... 132,000 3,960,000
Local Financial Corp. (b) ................ 97,500 1,267,500
UST Corp. ................................ 46,400 1,229,600
-----------
20,111,186
-----------
Beverages -- 1.0%
Whitman Corp. ............................ 178,100 4,085,169
-----------
Business Services -- 1.5%
ACNielson Corp. (b) ...................... 97,100 2,451,775
Cort Business Services Corp. (b) ......... 57,900 1,823,850
Wallace Computer Services, Inc. .......... 68,300 1,622,125
-----------
5,897,750
-----------
Chemicals -- Specialty -- 2.5%
Cuno, Inc. (b) ........................... 100,000 2,162,500
General Chemical Group, Inc. ............. 68,700 1,906,425
M.A. Hanna Co. ........................... 67,700 1,239,756
Mississippi Chemical Corp. ............... 47,800 785,713
Solutia, Inc. ............................ 135,200 3,878,550
-----------
9,972,944
-----------
Commercial Services -- 1.2%
Viad Corp. ............................... 168,300 4,670,325
-----------
Communications Equipment -- 0.7%
California Microwave, Inc. (b) ........... 83,800 1,466,500
Xylan Corp. (b) .......................... 45,100 1,344,544
-----------
2,811,044
-----------
Computer Hardware -- 2.4%
Digi International, Inc. (b) ............. 119,500 2,419,875
Fore Systems, Inc. (b) ................... 62,900 1,666,850
Komag, Inc. (b) .......................... 122,400 654,075
Micron Electronics, Inc. (b) ............. 60,600 730,988
Telxon Corp. ............................. 86,700 2,806,912
Xircom, Inc. (b) ......................... 75,700 1,178,081
-----------
9,456,781
-----------
Computer Software & Services -- 3.3%
American Management Systems, Inc. (b) .... 95,700 2,865,019
DSP Group, Inc. (b) ...................... 88,200 1,741,950
Inprise Corp. (b) ........................ 169,400 1,249,325
Platinum Technology, Inc. (b) ............ 149,700 4,275,806
Rational Software Corp. (b) .............. 187,500 2,859,375
-----------
12,991,475
-----------
Data Processing Services -- 1.0%
ChoicePoint, Inc. (b) .................... 25,600 1,296,000
Information Resources, Inc. (b) .......... 133,700 2,473,450
-----------
3,769,450
-----------
Electronics -- 2.4%
Alpha Industries, Inc. (b) ............... 66,800 997,825
AVX Corp. ................................ 74,500 1,196,656
Berg Electronics Corp. (b) ............... 69,200 1,353,725
Cirrus Logic, Inc. (b) ................... 118,100 1,313,862
EG & G, Inc. ............................. 26,800 804,000
Exar Corp. (b) ........................... 60,700 1,274,700
Integrated Device Technology, Inc. (b) ... 155,300 1,111,366
Vishay Intertechnology, Inc. (b) ......... 73,440 1,317,330
-----------
9,369,464
-----------
Entertainment -- 0.6%
Midway Games, Inc. (b) ................... 156,100 2,439,063
-----------
Environmental Services -- 1.0%
IMCO Recycling, Inc. ..................... 102,100 1,888,850
World Fuel Services Corp. ................ 114,875 1,988,773
-----------
3,877,623
-----------
Financial Services -- 4.2%
AMRESCO, Inc. (b) ........................ 100,900 2,938,713
DVI, Inc. (b) ............................ 98,200 2,504,100
Financial Federal Corp. (b) .............. 74,100 1,986,806
Franchise Mortgage Acceptance Co. (b) .... 115,600 3,012,825
UniCapital Corp. (b) ..................... 203,700 3,895,762
Webster Financial Corp. .................. 69,200 2,300,900
-----------
16,639,106
-----------
Food -- Packaged & Miscellaneous -- 3.0%
Dean Foods Co. ........................... 54,400 2,988,600
Earthgrains Co. .......................... 35,200 1,966,800
International Multifoods Corp. ........... 100,200 2,755,500
Keebler Foods Co. (b) .................... 31,800 874,500
Vlasic Foods International, Inc. (b) ..... 83,200 1,674,400
Weider Nutrition International, Inc. ..... 98,700 1,677,900
-----------
11,937,700
-----------
Freight Transportation -- 0.5%
US Freightways Corp. ..................... 59,000 1,937,781
-----------
Health Care -- Drugs -- 0.5%
Biovail Corp. International (b) .......... 61,500 1,968,000
-----------
Health Care -- Medical Technology -- 3.5%
Allegiance Corp. ......................... 73,800 3,782,250
Conmed Corp. (b) ......................... 133,075 3,060,725
Dentsply International, Inc. ............. 130,100 3,252,500
Invacare Corp. ........................... 97,200 2,490,750
Sola International, Inc. (b) ............. 42,700 1,395,756
-----------
13,981,981
-----------
Health Care -- Services -- 5.2%
Alternative Living Services, Inc. (b) .. 75,900 2,049,300
Genesis Health Ventures, Inc. (b) ...... 68,600 1,715,000
Health Care & Retirement Corp. (b) ..... 67,900 2,677,806
HealthPlan Services Corp. (b) .......... 115,000 2,012,500
Pharmerica, Inc. (b) ................... 110,200 1,329,288
PhyCor, Inc. (b) ....................... 220,800 3,657,000
Sierra Health Services, Inc. (b) ....... 118,600 2,987,237
Trigon Healthcare, Inc. (b) ............ 61,000 2,207,437
Vitalink Pharmacy Services, Inc. (b) ... 85,945 1,896,162
-----------
20,531,730
-----------
Home Builders -- 1.2%
Champion Enterprises, Inc. (b) ........... 164,300 4,826,312
-----------
Home Products -- 2.3%
Furniture Brands International, Inc. (b) . 110,800 3,109,325
Premark International, Inc. .............. 128,000 4,128,000
Scotts Co. (b) ........................... 44,600 1,661,350
-----------
8,898,675
-----------
Housing & Building Materials -- 1.4%
Giant Cement Holding, Inc. (b) ........... 76,700 2,195,537
Shaw Industries, Inc. .................... 187,200 3,299,400
-----------
5,494,937
-----------
Insurance -- 5.5%
Capital Reinsurance Corp. ................ 61,700 4,419,263
Everest Reinsurance Holdings, Inc. ....... 93,900 3,609,281
Horace Mann Educators Corp. .............. 28,300 976,350
Protective Life Corp. .................... 112,700 4,134,681
Reinsurance Group of America ............. 83,000 4,907,375
Reliance Group Holdings, Inc. ............ 210,900 3,690,750
-----------
21,737,700
-----------
Machinery -- 0.4%
Chart Industries, Inc. ................... 64,700 1,544,713
-----------
Manufacturing -- 5.0%
A.O. Smith Corp. ......................... 47,500 2,455,156
Cognex Corp. (b) ......................... 84,100 1,555,850
Federal Signal Corp. ..................... 102,700 2,496,894
MascoTech, Inc. .......................... 127,400 3,057,600
Millipore Corp. .......................... 61,600 1,678,600
Pentair, Inc. ............................ 88,800 3,774,000
Regal-Beloit Corp. ....................... 157,800 4,497,300
-----------
19,515,400
-----------
Metals -- 1.1%
Agnico-Eagle Mines Ltd. .................. 147,100 809,050
Lone Star Technologies, Inc. (b) ......... 71,500 1,090,375
Worthington Industries, Inc. ............. 158,000 2,379,875
-----------
4,279,300
-----------
Natural Gas -- 1.2%
Eastern Enterprises ...................... 89,600 3,841,600
Public Service Company of North Carolina, Inc. 49,900 1,085,325
-----------
4,926,925
-----------
Office Equipment -- 2.1%
Bell & Howell Co. (b) .................... 124,300 3,208,494
HON Industries, Inc. ..................... 69,300 2,356,200
National Computer Systems, Inc. .......... 109,200 2,620,800
-----------
8,185,494
-----------
Oil & Gas Drilling Equipment -- 2.0%
Atwood Oceanics, Inc. (b) ................ 34,600 1,377,513
IRI International Corp. (b) .............. 127,900 1,374,925
Key Energy Group, Inc. (b) ............... 78,000 1,023,750
National Oilwell, Inc. (b) ............... 51,200 1,372,800
Offshore Logistics, Inc. (b) ............. 84,000 1,491,000
Veritas DGC, Inc. (b) .................... 23,500 1,173,531
-----------
7,813,519
-----------
Oil & Gas Exploration -- 1.9%
Forcenergy, Inc. (b) ..................... 111,200 1,980,750
Lomak Petroleum, Inc. .................... 110,000 1,148,125
Plains Resources, Inc. (b) ............... 84,000 1,501,500
Vintage Petroleum, Inc. .................. 151,100 2,852,012
-----------
7,482,387
-----------
Paper Products -- 0.7%
Chesapeake Corp. ......................... 66,300 2,581,556
-----------
Personal Care -- 0.8%
Dial Corp. (New) ......................... 118,100 3,063,219
-----------
Printing -- 1.3%
Banta Corp. .............................. 104,174 3,216,372
Cadmus Communications Corp. .............. 79,300 1,923,025
-----------
5,139,397
-----------
Real Estate Investment Trusts -- 7.0%
American General Hospitality Corp. ....... 174,900 3,716,625
Anthracite Mortgage Capital, Inc. (b) .... 115,100 1,597,013
Brandywine Realty Corp. .................. 118,000 2,640,250
Capital Automotive (b) ................... 154,300 2,189,131
Capstone Capital Corp. ................... 116,200 2,672,600
Imperial Credit Commercial Mortgage
Investment Corp. (b) ................... 265,800 3,472,012
Koger Equity, Inc. ....................... 155,400 3,137,138
Liberty Property ......................... 96,400 2,464,225
Mack California Realty Corp. ............. 85,600 2,942,500
Sun Communities, Inc. .................... 87,200 2,888,500
-----------
27,719,994
-----------
Refrigeration Systems -- 0.6%
Hussmann International, Inc. ............. 135,400 2,513,363
-----------
Restaurants -- 0.4%
Cracker Barrel Old Country Store, Inc. ... 54,300 1,724,025
-----------
Retail -- Food -- 0.7%
Hannaford Brothers Co. ................... 63,700 2,802,800
-----------
Retail -- General -- 0.7%
BJ's Wholesale Club, Inc. (b) ............ 67,100 2,725,938
-----------
Retail -- Specialty -- 6.0%
Burlington Coat Factory Warehouse Corp. .. 167,900 3,777,750
Claire's Stores, Inc. .................... 128,900 2,642,450
Family Dollar Stores, Inc. ............... 46,800 865,800
Heilig-Meyers Co. ........................ 198,900 2,448,956
Jostens, Inc. ............................ 94,000 2,244,250
OfficeMax, Inc. (b) ...................... 165,000 2,722,500
Petco Animal Supplies, Inc. (b) .......... 128,400 2,559,975
Saks Holdings, Inc. (b) .................. 75,800 2,093,975
The Wet Seal, Inc. (b) ................... 36,800 1,177,600
United Auto Group, Inc. (b) .............. 83,300 1,822,187
Zale Corp. (b) ........................... 34,700 1,103,894
-----------
23,459,337
-----------
Security Systems -- 0.8%
Sensormatic Electronics Corp. ............ 220,645 3,089,030
-----------
Telecommunications -- 0.9%
Aliant Communications, Inc. .............. 126,500 3,470,844
-----------
Textile & Apparel -- 0.9%
Burlington Industries Ltd. (b) ........... 72,400 1,018,125
Oshkosh B Gosh, Inc. ..................... 20,800 925,600
Stride Rite Corp. ........................ 104,500 1,574,031
Timberland Co. (b) ....................... 2,100 151,069
-----------
3,668,825
-----------
Utilities -- 3.5%
BEC Energy ............................... 80,100 3,324,150
Commonwealth Energy System ............... 29,700 1,121,175
Rochester Gas & Electric Corp. ........... 121,400 3,877,212
Southern California Water Co. ............ 55,700 1,510,863
WPS Resources Corp. ...................... 116,700 3,829,219
-----------
13,662,619
-----------
TOTAL COMMON STOCKS
(Identified Cost $336,087,134).......... 358,755,272
-----------
WARRANTS -- 0.0% OF NET ASSETS
Entertainment -- 0.0%
Iwerks Entertainment, Inc. expiring 7/2/99 (b) 1,364 0
-----------
TOTAL WARRANTS
(Identified Cost $0).................... 0
-----------
FACE
AMOUNT VALUE (a)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 8.9% OF NET ASSETS
Associates Corp. of North America,
5.950%, 7/01/98 ........................ $19,351,415 $ 19,351,415
Chevron USA, Inc., 5.800%, 7/01/98 ....... 15,700,000 15,700,000
------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $35,051,415)........... 35,051,415
------------
TOTAL INVESTMENTS -- 99.9%
(IDENTIFIED COST $371,138,549) (c)...... 393,806,687
Cash and Other Assets, Less
Liabilities -- 0.1%................... 460,338
------------
NET ASSETS -- 100%........................ $394,267,025
============
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1998, the net unrealized appreciation on investments based on
cost of $371,138,549 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
$43,060,365, and $20,392,227, respectively, resulting in net unrealized
appreciation of $22,668,138.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES STRATEGIC VALUE FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF JUNE 30, 1998 (UNAUDITED)
SHARES VALUE(a)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 96.7% OF NET ASSETS
Aerospace -- 4.8%
Boeing Co. ............................... 700 $ 31,194
Sundstrand Corp. ......................... 700 40,075
-----------
71,269
-----------
Banks/Savings & Loans -- 2.8%
Fleet Financial Group, Inc. .............. 500 41,750
-----------
Broadcasting -- 4.7%
CBS Corp. ................................ 2,200 69,850
-----------
Chemicals -- Major -- 4.8%
IMC Global, Inc. ......................... 1,100 33,137
Praxair, Inc. ............................ 800 37,450
-----------
70,587
-----------
Chemicals -- Specialty -- 8.7%
Crompton & Knowles Corp. ................. 1,500 37,781
E.I. du Pont DeNemours & Co. ............. 700 52,237
Solutia, Inc. ............................ 1,300 37,294
-----------
127,312
-----------
Commercial Services -- 3.2%
Viad Corp. ............................... 1,700 47,175
-----------
Communications Equipment -- 2.7%
Loral Space & Communications Ltd. (b) .... 1,400 39,550
-----------
Computer Hardware -- 10.9%
3Com Corp. (b) ........................... 800 24,550
Cabletron Systems, Inc. (b) .............. 800 10,750
EMC Corp. (b) ............................ 1,000 44,812
Gateway 2000, Inc. (b) ................... 800 40,500
Sun Microsystems, Inc. (b) ............... 900 39,094
-----------
159,706
-----------
Computer Software & Services -- 4.4%
Unisys Corp. (b) ......................... 2,300 64,975
-----------
Electrical Equipment -- 2.0%
Raychem Corp. ............................ 1,000 29,563
-----------
Electronics -- 5.4%
Applied Materials, Inc. (b) .............. 1,100 32,450
Texas Instruments, Inc. .................. 800 46,650
-----------
79,100
-----------
Forest Products -- 1.6%
Georgia Pacific Corp. .................... 400 23,575
-----------
Freight Transportation -- 8.5%
Burlington Northern Santa Fe Corp. ....... 300 29,456
CNF Transportation, Inc. ................. 900 38,250
FDX Corp. (b) ............................ 400 25,100
Ryder System, Inc. ....................... 1,000 31,563
-----------
124,369
-----------
Gaming -- 1.9%
Harrah's Entertainment, Inc. (b) ......... 1,200 27,900
-----------
Housing & Building Materials -- 7.0%
Black & Decker Corp. ..................... 900 54,900
Masco Corp. .............................. 800 48,400
-----------
103,300
-----------
Insurance -- 2.5%
Travelers, Inc. .......................... 600 36,375
-----------
Metals -- 2.9%
UCAR International, Inc. (b) ............. 800 23,350
USX-US Steel Group, Inc. ................. 600 19,800
-----------
43,150
-----------
Retail -- Food -- 3.8%
Kroger Co. (b) ........................... 1,300 55,738
-----------
Retail -- General -- 3.3%
Federated Department Stores, Inc. (b) .... 900 48,431
-----------
Telecommunications -- 2.4%
Ameritech Corp. .......................... 800 35,900
-----------
Textile & Apparel -- 6.3%
Reebok International Ltd. (b) ............ 700 19,381
Republic Industries, Inc. (b) ............ 1,400 35,000
Warnaco Group, Inc. ...................... 900 38,194
-----------
92,575
-----------
Waste Management -- 2.1%
Waste Management, Inc. ................... 900 31,500
-----------
TOTAL COMMON STOCKS
(Identified Cost $1,200,725)............ 1,423,650
-----------
TOTAL INVESTMENTS -- 96.7%
(IDENTIFIED COST $1,200,725) (c)........ 1,423,650
Cash and Other Assets, Less
Liabilities -- 3.3%................... 48,916
-----------
NET ASSETS -- 100%.......................... $ 1,472,566
===========
(a) See Note 1.
(b) Non-income producing security.
(c) At June 30, 1998, the net unrealized appreciation on investments based on
cost of $1,200,725 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 $296,947,
and $74,022, respectively, resulting in net unrealized appreciation of
$222,925.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF JUNE 30, 1998 (UNAUDITED)
FACE
AMOUNT VALUE (a)
- --------------------------------------------------------------------------------
BONDS AND NOTES -- 45.9% OF NET ASSETS
Australia -- 2.1%
QTC Global Aud Bon, 8.000%, 9/14/07 .... AUD 100,000 $ 71,492
South Australia Government Finance
Authority, Zero Coupon Bond,
12/21/15 ............................. 220,000 47,198
-----------
118,690
-----------
New Zealand -- 1.5%
Government of New Zealand, 8.000%,
11/15/06 .............................. NZD 150,000 85,631
-----------
Philippines -- 3.1%
FLI Capital Cayman, 3.750%, 2/01/02
(step to 6.250% on 8/01/99) (b) (c) ... USD 150,000 114,750
MBIA, Inc., Zero Coupon Bond, 12/18/01 (b) 100,000 60,000
-----------
174,750
-----------
South Korea -- 1.0%
Samsung Electronics Co. Ltd., Zero Coupon
Bond, 12/31/07 (b) ..................... 75,000 58,500
-----------
Thailand -- 2.9%
Bangkok Bank Public Co. Ltd.,
3.250%, 3/03/04 (b) ................... 300,000 97,500
Loxley Public Co. Ltd., 2.500%,
4/04/01 (b) ........................... 200,000 64,000
-----------
161,500
-----------
United States -- 35.3%
Apple Computer, Inc., 6.500%, 2/15/04 .... 250,000 230,000
Arch Communications Group, Inc.,
Zero Coupon Bond, 3/15/08 (step to
10.875% on 3/15/01) (c) ................. 300,000 171,000
Boston Chicken, Inc., 4.500%, 2/01/04 (b) 125,000 19,375
Builders Transportation, Inc.,
8.000%, 8/15/05 (b) (d) ............... 95,000 9,500
Chesapeake Energy Corp.,
7.875%, 3/15/04 ........................ 100,000 93,750
CML Group, Inc., 5.500%, 1/15/03 (b) .... 150,000 93,000
Dillon Read Structured Finance Corp.,
6.660%, 8/15/10 ......................... 168,884 156,647
Envirotest Systems Corp.,
9.625%, 4/01/03 ........................ 50,000 49,000
Exide Corp., 2.900%, 12/15/05
144A (b) (e) ........................... 125,000 77,188
Kent Electronics Corp.,
4.500%, 9/01/04 (b) .................... 50,000 40,875
Lam Research Corp., 5.000%, 9/01/02 (b) . 150,000 123,000
Shoney's, Inc., Zero Coupon Bond,
4/11/04 (b) ........................... 50,000 21,000
Thermedics, Inc., Zero Coupon Bond,
6/01/03 (b) ............................ 100,000 75,000
United States Treasury Bonds,
6.000%, 2/15/26 ........................ 800,000 832,248
----------
1,991,583
----------
TOTAL BONDS AND NOTES
(Identified Cost $2,905,872) ............ 2,590,654
----------
SHARES VALUE(a)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 45.4% OF NET ASSETS
Canada -- 0.7%
Abacan Resources Corp. (New) (f) ......... 12,450 7,781
Magna International, Inc. ................ 450 30,881
-----------
38,662
-----------
France -- 3.6%
Bank Nationale de Paris .................. 2,500 203,863
-----------
Germany -- 2.6%
MAN AG ................................... 550 148,254
-----------
Italy -- 5.7%
ENI Spa .................................. 30,000 196,360
Ericsson Spa ............................. 2,100 124,237
-----------
320,597
-----------
Korea -- 1.1%
Hyundai Housing & Industry Development ... 3,000 63,365
-----------
New Zealand -- 2.6%
Air New Zealand Ltd. ..................... 138,000 148,386
-----------
Portugal -- 3.5%
Portugal Telecom SA ...................... 3,750 198,489
-----------
Singapore -- 2.3%
Keppel Corp. Ltd. ........................ 85,000 128,245
-----------
Thailand -- 2.6%
Advanced Info Service Public Co. Ltd. .... 29,500 125,979
Industrial Finance Corp. of Thailand ..... 50,000 10,320
Phatra Thanakit Public Co. Ltd. .......... 137,700 12,414
-----------
148,713
-----------
United Kingdom -- 2.7%
Boots Co. Plc ............................ 9,000 149,203
-----------
United States -- 18.0%
AES Corp. (f) ............................ 500 26,281
American Express Co. ..................... 250 28,500
Anadarko Petroleum Corp. ................. 450 30,234
Analog Devices, Inc. (f) ................. 900 22,106
Burlington Resources, Inc. ............... 650 27,991
CBS Corp. ................................ 1,000 31,750
Chrysler Corp. ........................... 700 39,462
Circuit City Stores, Inc. ................ 650 30,469
Cisco Systems, Inc. (f) .................. 400 36,825
Computer Associates International, Inc. .. 600 33,337
CVS Corp. ................................ 800 31,150
EMC Corp. (f) ............................ 700 31,369
International Business Machines Corp. .... 350 40,184
McDonald's Corp. ......................... 500 34,500
Medtronic, Inc. .......................... 450 28,688
Meritor Automotive, Inc. ................. 1 24
Monsanto Co. ............................. 650 36,319
Pfizer, Inc. ............................. 300 32,606
Schering-Plough Corp. .................... 350 32,069
Staples, Inc. (f) ........................ 1,200 34,725
Star Banc Corp. .......................... 200 12,775
Tellabs, Inc. (f) ........................ 350 25,069
The Learning Company, Inc. (f) ........... 7,105 210,486
Time Warner, Inc. ........................ 400 34,175
Warner Lambert Co. ....................... 450 31,219
Wells Fargo & Co. ........................ 100 36,900
WorldCom, Inc. (f) ....................... 700 33,906
Xerox Corp. .............................. 250 25,406
-----------
1,018,525
-----------
TOTAL COMMON STOCKS
(Identified Cost $2,727,825) ........... 2,566,302
-----------
PREFERRED STOCKS -- 2.2% OF NET ASSETS
Japan -- 2.2%
Sakura Finance, 0.750% ................... 24,000,000 122,359
-----------
TOTAL PREFERRED STOCKS
(Identified Cost $186,152) ............. 122,359
-----------
RIGHTS -- 0.0% OF NET ASSETS
Thailand -- 0.0%
Industrial Finance Corp.
of Thailand (f) ........................ 25,000 0
-----------
TOTAL RIGHTS
(Identified Cost $0) ................... 0
-----------
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 7.8% OF NET ASSETS
Repurchase Agreement with State
Street Bank and Trust Co., dated
6/30/98 at 5.000% to be repurchased
at $443,062 on 7/01/98 collateralized
by $345,000 U.S. Treasury Bond, 8.125%,
due 8/15/19 with a value of $453,186 ... USD 443,000 $ 443,000
----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $443,000) ............. 443,000
----------
TOTAL INVESTMENTS -- 101.3%
(IDENTIFIED COST $6,262,849) (g) ....... 5,722,315
Liabilities, Less Cash and
Other Assets -- (1.3%) .............. (71,455)
----------
NET ASSETS -- 100% ....................... $5,650,860
==========
(a)See Note 1.
(b)Convertible Bond.
(c)Step Bond: Coupon is zero or below market rate for an initial period and
increases at a specified date and rate.
(d)Security in default.
(e)Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(f)Non-income producing security.
(g)At June 30, 1998, the net unrealized depreciation on investments based on
cost of $6,262,849 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 $385,936,
and $926,470, respectively, resulting in net unrealized depreciation of
$540,534.
Key to Abbreviations:
AUD: Australian Dollar.
NZD: New Zealand Dollar.
USD: United States Dollar.
Ten Largest Sector Holdings at June 30, 1998
as a Percentage of Net Assets
Telecommunications 9.6%
Computers 7.4%
Banking & Finance 7.1%
Retail -- General 5.7%
Electronics 5.4%
Financial 4.2%
Oil & Gas 3.3%
Airlines 2.5%
Manufacturing 2.5%
Auto & Related 2.5%
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
June 30, 1998 (unaudited)
<TABLE>
<CAPTION>
CORE GROWTH INTERNATIONAL
VALUE FUND FUND EQUITY FUND
---------- ---- -----------
ASSETS
<S> <C> <C> <C>
Investments at value ........................ $74,514,415 $31,168,864 $79,972,794
Cash ........................................ 1 423 373
Foreign currency at value ................... 0 0 200,309
Receivable for:
Fund Shares sold .......................... 147 7,223 7,522
Securities sold ........................... 656,665 464,500 1,858,169
Dividends and interest -- net ............. 92,078 8,049 167,887
Foreign tax reclaim ....................... 1,578 0 102,758
Due from the adviser (Note 3) ............... 3,824 16,295 39,921
Other assets (Note 1I) ...................... 0 0 0
----------- ----------- -----------
75,268,708 31,665,354 82,349,733
----------- ----------- -----------
LIABILITIES
Payable for:
Securities purchased .................... 393,955 364,548 1,615,678
Fund Shares redeemed .................... 263,485 331,236 112,400
Foreign taxes ........................... 1,815 0 34,203
Accrued expenses:
Management fees (Note 3) ................ 30,452 12,476 49,024
Trustees' fees (Note 3A) ................ 1,555 1,555 1,555
Administrative fees ..................... 3,652 1,686 3,823
Other expenses .......................... 43,159 24,778 48,058
----------- ----------- -----------
738,073 736,279 1,864,741
----------- ----------- -----------
NET ASSETS .................................. $74,530,635 $30,929,075 $80,484,992
=========== =========== ===========
Net Assets consist of:
Capital paid in ......................... $53,992,385 $20,528,882 $73,757,534
Undistributed (or Distribution in excess
of) net investment income ............. 455,743 (45,864) 797,885
Accumulated net realized gain (loss) .... 6,492,263 5,325,410 2,820,434
Unrealized appreciation (depreciation) on:
Investments ........................... 13,590,244 5,120,647 3,108,436
Foreign currency translations ......... 0 0 703
----------- ----------- -----------
NET ASSETS .................................. $74,530,635 $30,929,075 $80,484,992
=========== =========== ===========
INSTITUTIONAL CLASS:
Net assets ................................ $72,729,987 $30,342,484 $80,278,041
Shares of beneficial interest
outstanding, no par value ............... 3,785,826 2,187,644 6,527,407
Net asset value and redemption price per
Institutional share ..................... $ 19.21 $ 13.87 $ 12.30
RETAIL CLASS:
Net assets ................................ $ 1,800,648 $ 586,591 $ 206,951
Shares of beneficial interest
outstanding, no par value ............... 93,973 42,480 16,888
Net asset value and redemption price per
Retail share ............................ $ 19.16 $ 13.81 $ 12.25
ADMIN CLASS:
Net assets ................................ -- -- --
Shares of beneficial interest
outstanding, no par value ............... -- -- --
Net asset value and redemption price per
Admin Share ............................. -- -- --
Identified cost of investments .............. $60,924,171 $26,048,217 $76,864,358
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
<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>
$2,147,000 $4,475,192 $21,542,874 $393,806,687 $1,423,650 $5,722,315
5 45,086 900 0 35,984 577
0 0 0 0 0 8,050
0 48 0 1,592,580 0 40,000
0 190,052 0 1,917,949 6,882 68,256
253 1,689 556 563,220 816 56,377
0 0 0 0 0 650
32,166 33,784 33,865 1,427 36,426 37,355
0 0 0 0 0 2,567
---------- ---------- ----------- ------------ ---------- ----------
2,179,424 4,745,851 21,578,195 397,881,863 1,503,758 5,936,147
---------- ---------- ----------- ------------ ---------- ----------
3,850 187,929 845,615 2,770,071 10,556 223,560
283 76,787 21,140 463,138 215 28,694
0 64 0 0 0 1,328
3,894 8,542 20,585 237,383 1,859 11,335
1,555 1,555 1,555 1,555 1,555 1,555
564 685 2,113 17,667 509 639
14,351 13,472 19,679 125,024 16,498 18,176
---------- ---------- ----------- ------------ ---------- ----------
24,497 289,034 910,687 3,614,838 31,192 285,287
---------- ---------- ----------- ------------ ---------- ----------
$2,154,927 $4,456,817 $20,667,508 $394,267,025 $1,472,566 $5,650,860
========== ========== =========== ============ ========== ==========
$1,746,666 $3,889,483 $19,019,274 $359,463,611 $1,205,117 $5,815,401
(4,265) 5,053 (21,287) 1,783,933 (2,002) 124,650
172,323 335,847 (70,591) 10,351,343 46,526 251,488
240,203 226,434 1,740,112 22,668,138 222,925 (540,534)
0 0 0 0 0 (145)
---------- ---------- ----------- ------------ ---------- ----------
$2,154,927 $4,456,817 $20,667,508 $394,267,025 $1,472,566 $5,650,860
========== ========== =========== ============ ========== ==========
$2,053,741 $4,241,565 $18,814,888 $334,135,360 $1,163,455 $5,571,367
163,858 340,464 1,493,944 17,438,759 89,339 565,860
$ 12.53 $ 12.46 $ 12.59 $ 19.16 $ 13.02 $ 9.85
$ 101,186 $ 215,252 $ 1,852,620 $ 59,436,573 $ 309,111 $ 79,493
8,084 17,302 147,500 3,105,758 23,770 8,096
$ 12.52 $ 12.44 $ 12.56 $ 19.14 $ 13.00 $ 9.82
-- -- -- $ 695,092 -- --
-- -- -- 36,370 -- --
-- -- -- $ 19.11 -- --
$1,906,797 $4,248,758 $19,802,762 $371,138,549 $1,200,725 $6,262,849
========== ========== =========== ============ ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
CORE GROWTH INTERNATIONAL
VALUE FUND FUND EQUITY FUND
---------- ---- -----------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends* ................................ $ 644,102 $ 67,716 $ 1,121,218
Interest .................................. 89,928 21,435 85,458
----------- ----------- -----------
734,030 89,151 1,206,676
----------- ----------- -----------
Expenses
Management fees (Note 3) ................ 178,028 79,059 305,710
12b-1 fees (Retail Class) ............... 1,950 614 270
12b-1 fees (Admin Class) ................ 0 0 0
Trustees' fees and expenses (Note 3A) ... 2,815 2,815 2,815
Administrative fees ..................... 18,309 8,558 19,995
Custodian and accounting fees ........... 36,616 31,492 114,494
Transfer Agent fees (Institutional Class) 11,563 10,582 10,041
Transfer Agent fees (Retail Class) ...... 9,127 9,095 9,043
Transfer Agent fees (Admin Class) ....... 0 0 0
Audit and tax services fees ............. 6,347 6,347 6,347
Legal fees .............................. 2,125 2,124 2,124
Printing fees ........................... 3,246 1,496 3,837
Registration fees ....................... 14,587 11,314 10,990
Amortization of organization expenses
(Note 1I):
Institutional Class ................... 0 0 0
Amortization of deferred registration
costs (Note 1I):
Institutional Class ................... 0 0 0
Retail Class .......................... 652 481 488
Miscellaneous expenses .................. 16,660 1,577 1,209
----------- ----------- -----------
Total expenses .......................... 302,025 165,554 487,363
Less expenses waived and reimbursed by the
investment adviser (Note 3) ........... (8,590) (30,539) (78,785)
----------- ----------- -----------
Net expenses ............................ 293,435 135,015 408,578
----------- ----------- -----------
Net investment income (loss) .............. 440,595 (45,864) 798,098
----------- ----------- -----------
NET REALIZED GAIN (LOSS) ON:
Investments ................................. 5,846,476 4,093,998 2,699,236
Foreign currency transactions ............... 0 0 (10,665)
----------- ----------- -----------
Total net realized gain (loss) .............. 5,846,476 4,093,998 2,688,571
----------- ----------- -----------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments ................................. (390,260) (1,056,562) 3,501,852
Foreign currency translations ............... 0 0 1,837
----------- ----------- -----------
Total net change in unrealized appreciation
(depreciation) .............................. (390,260) (1,056,562) 3,503,689
----------- ----------- -----------
Total net realized gain (loss) and change in
unrealized appreciation (depreciation) ...... 5,456,216 3,037,436 6,192,260
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS .................................. $ 5,896,811 $ 2,991,572 $ 6,990,358
=========== =========== ===========
</TABLE>
*Net of foreign withholding taxes of $4,874, $173,188, $151, $288 and $4,224 for
the Core Value, International Equity, Mid-Cap Value, Small Cap Value and the
Worldwide Funds, respectively.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
<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>
$ 3,461 $ 22,131 $ 4,564 $ 1,970,987 $ 5,001 $ 29,017
2,289 3,791 16,910 1,233,491 552 133,795
---------- ---------- ----------- ------------ ---------- ----------
5,750 25,922 21,474 3,204,478 5,553 162,812
---------- ---------- ----------- ------------ ---------- ----------
7,438 16,106 30,604 1,280,504 3,587 22,360
99 249 1,955 60,034 381 109
0 0 0 62 0 0
2,815 2,815 2,815 2,815 2,815 2,815
2,201 2,779 4,683 84,262 2,042 2,580
24,913 29,985 35,600 78,170 24,391 33,826
9,011 9,228 9,124 16,246 8,988 9,048
8,984 8,988 9,061 10,663 8,975 9,002
0 0 0 1,500 0 0
6,808 6,808 6,808 6,347 6,808 6,347
2,124 2,124 2,124 2,124 2,125 2,124
91 195 272 14,682 66 281
9,298 9,616 9,939 38,769 12,417 11,030
0 0 0 0 0 451
942 901 916 0 5,060 0
37 40 215 521 745 915
1,384 1,393 493 66,463 201 1,400
---------- ---------- ----------- ------------ ---------- ----------
76,145 91,227 114,609 1,663,162 78,601 102,288
(66,130) (69,504) (71,848) (1,427) (71,046) (72,366)
---------- ---------- ----------- ------------ ---------- ----------
10,015 21,723 42,761 1,661,735 7,555 29,922
---------- ---------- ----------- ------------ ---------- ----------
(4,265) 4,199 (21,287) 1,542,743 (2,002) 132,890
---------- ---------- ----------- ------------ ---------- ----------
111,959 351,527 196,758 7,318,288 34,413 119,080
0 0 0 0 0 (4,599)
---------- ---------- ----------- ------------ ---------- ----------
111,959 351,527 196,758 7,318,288 34,413 114,481
---------- ---------- ----------- ------------ ---------- ----------
68,427 (41,595) 910,542 (4,072,646) 108,568 (262,945)
0 0 0 0 0 120
---------- ---------- ----------- ------------ ---------- ----------
68,427 (41,595) 910,542 (4,072,646) 108,568 (262,825)
---------- ---------- ----------- ------------ ---------- ----------
180,386 309,932 1,107,300 3,245,642 142,981 (148,344)
---------- ---------- ----------- ------------ ---------- ----------
$ 176,121 $ 314,131 $ 1,086,013 $ 4,788,385 $ 140,979 $ (15,454)
========== ========== =========== ============ ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
CORE VALUE FUND
----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
---------------- ------------------
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss) ........ $ 440,595 $ 598,356
Net realized gain (loss) ............ 5,846,476 6,931,274
Change in unrealized appreciation
(depreciation) .................... (390,260) 5,392,568
----------- -----------
Increase (decrease) in net assets
from operations ................. 5,896,811 12,922,198
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ............. 0 (590,731)
Net realized gain on investments .. 0 (7,124,536)
RETAIL CLASS
Net investment income ............. 0 (10,346)
Net realized gain on investments .. 0 (138,784)
----------- -----------
0 (7,864,397)
----------- -----------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 4)
Increase (decrease) in net assets
derived from capital share
transactions ...................... 4,006,576 15,853,992
----------- -----------
Total increase (decrease) in net
assets ............................ 9,903,387 20,911,793
NET ASSETS
Beginning of the period ............. 64,627,248 43,715,455
----------- -----------
End of the period ................... $74,530,635 $64,627,248
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ............. $ 15,148 $ 17,869
=========== ===========
End of the period ................... $ 455,743 $ 15,148
=========== ===========
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
GROWTH FUND
----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
---------------- ------------------
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss) ........ $ (45,864) $ (92,402)
Net realized gain (loss) ............ 4,093,998 8,211,774
Change in unrealized appreciation
(depreciation) .................... (1,056,562) (649,029)
----------- -----------
Increase (decrease) in net assets
from operations ................. 2,991,572 7,470,343
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ............. 0 0
Net realized gain on investments .. 0 (7,950,061)
RETAIL CLASS
Net investment income ............. 0 0
Net realized gain on investments .. 0 (47,193)
----------- -----------
0 (7,997,254)
----------- -----------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 4)
Increase (decrease) in net assets
derived from capital share
transactions ...................... (4,406,039) (6,626,458)
----------- -----------
Total increase (decrease) in net
assets ............................ (1,414,467) (7,153,369)
NET ASSETS
Beginning of the period ............. 32,343,542 39,496,911
----------- -----------
End of the period ................... $30,929,075 $32,343,542
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ............. $ 0 $ 11,723
=========== ===========
End of the period ................... $ (45,864) $ 0
=========== ===========
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
---------------- ------------------
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss) ........ $ 798,098 $ 1,058,259
Net realized gain (loss) ............ 2,688,571 9,242,680
Change in unrealized appreciation
(depreciation) .................... 3,503,689 (10,490,463)
----------- -----------
Increase (decrease) in net assets
from operations ................. 6,990,358 (189,524)
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ............. 0 (834,647)
Net realized gain on investments .. 0 (10,657,570)
RETAIL CLASS
Net investment income ............. 0 (2,582)
Net realized gain on investments .. 0 (28,988)
----------- -----------
0 (11,523,787)
----------- -----------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 4)
Increase (decrease) in net assets
derived from capital share
transactions ...................... (8,926,498) 3,472,008
----------- -----------
Total increase (decrease) in net
assets ............................ (1,936,140) (8,241,303)
NET ASSETS
Beginning of the period ............. 82,421,132 90,662,435
----------- -----------
End of the period ................... $80,484,992 $82,421,132
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ............. $ (213) $ 25,444
=========== ===========
End of the period ................... $ 797,885 $ (213)
=========== ===========
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
MID-CAP GROWTH FUND
----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997*
---------------- ------------------
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss) ........ $ (4,265) $ (6,248)
Net realized gain (loss) ............ 111,959 156,302
Change in unrealized appreciation
(depreciation) .................... 68,427 171,776
----------- ----------
Increase (decrease) in net assets
from operations ................. 176,121 321,830
----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ............. 0 0
In excess of net investment income 0 (18,310)
Net realized gain on investments .. 0 (92,139)
RETAIL CLASS
Net investment income ............. 0 0
In excess of net investment income 0 (571)
Net realized gain on investments .. 0 (3,752)
----------- ----------
0 (114,772)
----------- ----------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 4)
Increase (decrease) in net assets
derived from capital share
transactions ...................... 57,254 1,714,474
----------- ----------
Total increase (decrease) in net
assets ............................ 233,375 1,921,532
NET ASSETS
Beginning of the period ............. 1,921,552 20
----------- ----------
End of the period ................... $ 2,154,927 $1,921,552
=========== ==========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ............. $ 0 $ 0
=========== ==========
End of the period ................... $ (4,265) $ 0
=========== ==========
*Commencement of operations, January 2, 1997.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
MID-CAP VALUE FUND
----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997*
---------------- ------------------
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss) ........ $ 4,199 $ 18,110
Net realized gain (loss) ............ 351,527 261,370
Change in unrealized appreciation
(depreciation) .................... (41,595) 268,029
---------- ----------
Increase (decrease) in net assets
from operations ................. 314,131 547,509
---------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ............. 0 (17,197)
In excess of net investment income 0 (23,118)
Net realized gain on investments .. 0 (264,726)
RETAIL CLASS
Net investment income ............. 0 (913)
In excess of net investment income 0 (620)
Net realized gain on investments .. 0 (12,852)
---------- ----------
0 (319,426)
---------- ----------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 4)
Increase (decrease) in net assets
derived from capital share
transactions ...................... 238,182 3,676,401
---------- ----------
Total increase (decrease) in net
assets ............................ 552,313 3,904,484
NET ASSETS
Beginning of the period ............. 3,904,504 20
---------- ----------
End of the period ................... $4,456,817 $3,904,504
========== ==========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ............. $ 854 $ 0
========== ==========
End of the period ................... $ 5,053 $ 854
========== ==========
*Commencement of operations, January 2, 1997.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SMALL CAP VALUE FUND
----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997*
---------------- ------------------
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss) ....... $ (21,287) $ (23,431)
Net realized gain (loss) ........... 196,758 (38,055)
Change in unrealized appreciation
(depreciation) ................... 910,542 829,570
----------- ----------
Increase (decrease) in net assets
from operations ................ 1,086,013 768,084
----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ............ 0 0
In excess of net investment income 0 (1,797)
Net realized gain on investments . 0 0
In excess of net realized gain on
investments .................... 0 (176,105)
RETAIL CLASS
Net investment income ............ 0 0
Net realized gain on investments . 0 0
In excess of net realized gain on
investments .................... 0 (53,076)
----------- ----------
0 (230,978)
----------- ----------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 4)
Increase (decrease) in net assets
derived from capital share
transactions ..................... 14,548,994 4,495,375
----------- ----------
Total increase (decrease) in net
assets ........................... 15,635,007 5,032,481
NET ASSETS
Beginning of the period ............ 5,032,501 20
----------- ----------
End of the period .................. $20,667,508 $5,032,501
=========== ==========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ............ $ 0 $ 0
=========== ==========
End of the period .................. $ (21,287) $ 0
=========== ==========
*Commencement of operations, January 2, 1997.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
SMALL CAP VALUE FUND
----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
---------------- ------------------
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss) ........ $ 1,542,743 $ 2,025,041
Net realized gain (loss) ............ 7,318,288 39,443,172
Change in unrealized appreciation
(depreciation) .................... (4,072,646) 4,289,783
------------ ------------
Increase (decrease) in net assets
from operations ................. 4,788,385 45,757,996
------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ............. 0 (1,647,014)
Net realized gain on investments .. 0 (34,182,555)
RETAIL CLASS
Net investment income ............. 0 (125,063)
Net realized gain on investments .. 0 (4,383,758)
ADMIN CLASS
Net investment income ............. 0 0
Net realized gain on investments .. 0 0
------------ ------------
0 (40,338,390)
------------ ------------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 4)
Increase (decrease) in net assets
derived from capital share
transactions ...................... 109,948,350 110,485,816
------------ ------------
Total increase (decrease) in net
assets ............................ 114,736,735 115,905,422
NET ASSETS
Beginning of the period ............. 279,530,290 163,624,868
------------- ------------
End of the period ................... $394,267,025 $279,530,290
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ............. $ 241,190 $ 67,474
============ ============
End of the period ................... $ 1,783,933 $ 241,190
============ ============
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
STRATEGIC VALUE FUND
----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997*
---------------- ------------------
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss) ........ $ (2,002) $ (1,131)
Net realized gain (loss) ............ 34,413 12,191
Change in unrealized appreciation
(depreciation) .................... 108,568 114,357
---------- -----------
Increase (decrease) in net assets
from operations ................. 140,979 125,417
---------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ............. 0 0
In excess of net investment income 0 (14,759)
Net realized gain on investments .. 0 0
RETAIL CLASS
Net investment income ............. 0 0
In excess of net investment income 0 (4,144)
Net realized gain on investments .. 0 0
---------- -----------
0 (18,903)
---------- -----------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 4)
Increase (decrease) in net assets
derived from capital share
transactions ...................... 86,806 1,138,247
---------- -----------
Total increase (decrease) in net
assets ............................ 227,785 1,244,761
NET ASSETS
Beginning of the period ............. 1,244,781 20
---------- -----------
End of the period ................... $1,472,566 $1,244,781
========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period ............. $ 0 $ 0
========== ===========
End of the period ................... $ (2,002) $ 0
========== ===========
*Commencement of operations, January 2, 1997.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
WORLDWIDE FUND
----------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1997
---------------- ------------------
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss) ......... $ 132,890 $ 287,881
Net realized gain (loss) ............. 114,481 532,609
Change in unrealized appreciation
(depreciation) ..................... (262,825) (570,405)
---------- ----------
Increase (decrease) in net assets
from operations .................. (15,454) 250,085
---------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income .............. 0 (284,030)
Net realized gain on investments ... 0 (410,676)
RETAIL CLASS
Net investment income .............. 0 (811)
Net realized gain on investments ... 0 (1,202)
---------- ----------
0 (696,719)
---------- ----------
FROM CAPITAL SHARES TRANSACTIONS (NOTE 4)
Increase (decrease) in net assets
derived from capital share
transactions ....................... 49,710 873,745
---------- ----------
Total increase (decrease) in net
assets ............................. 34,256 427,111
NET ASSETS
Beginning of the period .............. 5,616,604 5,189,493
---------- ----------
End of the period .................... $5,650,860 $5,616,604
========== ==========
UNDISTRIBUTED NET INVESTMENT INCOME
Beginning of the period .............. $ (8,240) $ 12,271
========== ==========
End of the period .................... $ 124,650 $ (8,240)
========== ==========
See accompanying notes to financial statements.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
CORE VALUE FUND
------------------------
INSTITUTIONAL
CLASS
------------------------
1998* 1997
------- -------
(UNAUDITED)
Net asset value, beginning of period ................. $ 17.64 $ 15.60
-------- -------
Income from investment operations --
Net investment income (loss) ....................... 0.11 0.18
Net realized and unrealized gain (loss) on
investments ...................................... 1.46 4.32
-------- -------
Total from investment operations ................. 1.57 4.50
-------- -------
Less distributions --
Dividends from net investment income ............... 0.00 (0.19)
Distributions from net realized capital gains ...... 0.00 (2.27)
-------- -------
Total distributions .............................. 0.00 (2.46)
-------- -------
Net asset value, end of period ....................... $ 19.21 $ 17.64
======== =======
Total return (%)(a) .................................. 8.9 29.2
Net assets, end of period (000) ...................... $ 72,730 $63,303
Ratio of operating expenses to average net
assets (%)(b) ...................................... 0.82 0.84
Ratio of net investment income to average net
assets (%) ......................................... 1.24 1.12
Portfolio turnover rate (%) .......................... 34 64
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) ............................. 0.82 0.84
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 $ 0.18
* For the six months ended June 30, 1998.
** From commencement of class operations on January 2, 1997.
(a) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(b) Annualized for periods less than one year.
(c) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(d) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
CORE VALUE FUND
- --------------------------------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
- -------------------------------------------------- -------------------
1996 1995 1994 1993 1998* 1997**
-------- -------- -------- -------- ------- ------
(UNAUDITED)
$ 14.57 $ 11.80 $ 12.49 $ 11.53 $ 17.62 $ 15.60
-------- -------- -------- -------- -------- --------
0.22 0.23 0.15 0.13 0.09 0.15(d)
2.83 3.93 (0.26) 1.24 1.45 4.30
-------- -------- -------- -------- -------- --------
3.05 4.16 (0.11) 1.37 1.54 4.45
-------- -------- -------- -------- -------- --------
(0.22) (0.23) (0.15) (0.12) 0.00 (0.16)
(1.80) (1.16) (0.43) (0.29) 0.00 (2.27)
-------- -------- -------- -------- -------- --------
(2.02) (1.39) (0.58) (0.41) 0.00 (2.43)
-------- -------- -------- -------- -------- --------
$ 15.60 $ 14.57 $ 11.80 $ 12.49 $ 19.16 $ 17.62
======== ======== ======== ======== ======== ========
21.2 35.2 (0.9) 11.9 8.7 28.9
$ 43,715 $ 36,465 $ 25,946 $ 20,657 $ 1,801 $ 1,324
1.13 1.20 1.33 1.50 1.10 1.10
1.44 1.61 1.28 1.23 0.95 0.84
58 60 48 53 34 64
1.13 1.20 1.33 1.56 2.20 6.17
$ 0.22 $ 0.23 $ 0.15 $ 0.12 $ (0.01) $ (0.73)(d)
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
GROWTH FUND
-----------------------
INSTITUTIONAL
CLASS
----------------------
1998* 1997
------- -------
(UNAUDITED)
Net asset value, beginning of period ................. $ 12.63 $ 13.44
-------- -------
Income from investment operations --
Net investment income (loss) ........................ (0.02) (0.04)
Net realized and unrealized gain (loss) on investments 1.26 3.17
-------- -------
Total from investment operations .................. 1.24 3.13
-------- -------
Less distributions --
Dividends from net investment income .............. 0.00 0.00
Distributions from capital ........................ 0.00 0.00
Distributions from net realized capital gains ..... 0.00 (3.94)
-------- -------
Total distributions ............................. 0.00 (3.94)
-------- -------
Net asset value, end of period ...................... $ 13.87 $ 12.63
======== =======
Total return (%)(a) ................................. 9.8 24.5
Net assets, end of period (000) ..................... $ 30,342 $32,149
Ratio of operating expenses to average
net assets (%)(b)(c)................................ 0.85 0.85
Ratio of net investment income to average
net assets (%)(b) .................................. (0.29) (0.26)
Portfolio turnover rate (%) ......................... 82 116
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) .................. 0.99 0.98
Without giving effect to the voluntary
expense limitations described in Note 3
to the Financial Statements net investment
income per share would have been: ................. $ (0.03) $ (0.05)
* For the six months ended June 30, 1998.
** From commencement of class operations on January 2, 1997.
(a) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(b) Annualized for periods less than one year.
(c) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(d) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
GROWTH FUND
- --------------------------------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
- -------------------------------------------------- -------------------
1996 1995 1994 1993 1998* 1997**
-------- -------- -------- -------- ------- ------
(UNAUDITED)
$ 15.27 $ 12.50 $ 13.02 $ 12.46 $ 12.59 $ 13.44
-------- -------- -------- -------- -------- --------
(0.07) 0.00 (0.02) 0.00 (0.03)(d) (0.07)
3.08 3.86 (0.45) 1.16 1.25 3.16
-------- -------- -------- -------- -------- --------
3.01 3.86 (0.47) 1.16 1.22 3.09
-------- -------- -------- -------- -------- --------
0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 (0.01) 0.00 0.00 0.00
(4.84) (1.09) (0.04) (0.60) 0.00 (3.94)
-------- -------- -------- -------- -------- --------
(4.84) (1.09) (0.05) (0.60) 0.00 (3.94)
-------- -------- -------- -------- -------- --------
$ 13.44 $ 15.27 $ 12.50 $ 13.02 $ 13.81 $ 12.59
======== ======== ======== ======== ======== ========
19.9 30.9 (3.7) 9.3 9.7 24.2
$ 39,497 $ 45,011 $ 36,580 $ 32,385 $ 587 $ 194
1.10 1.08 1.16 1.20 1.10 1.10
(0.47) (0.29) (0.14) (0.17) (0.54) (0.42)
99 48 46 64 82 116
1.10 1.08 1.16 1.20 4.87 12.96
$ (0.07) $ 0.00 $ (0.02) $ 0.00 $ (0.28)(d) $ (2.00)
<PAGE>
- -----------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
INSTITUTIONAL
EQUITY FUND
-----------------------
INSTITUTIONAL
CLASS
-----------------------
1998* 1997
------- -------
(UNAUDITED)
Net asset value, beginning of period ................ $ 11.30 $ 13.16
-------- -------
Income from investment operations --
Net investment income (loss) ...................... 0.12 0.15(d)
Net realized and unrealized gain (loss) on investment 0.88 (0.27)
-------- -------
Total from investment operations ................ 1.00 (0.12)
-------- -------
Less distributions --
Dividends from net investment income .............. 0.00 (0.19)
Distributions from net realized capital gains ..... 0.00 (1.55)
-------- -------
Total distributions ............................. 0.00 (1.74)
-------- -------
Net asset value, end of period ...................... $ 12.30 $ 11.30
======== =======
Total return (%)(a) ................................. 8.9 (1.0)
Net assets, end of period (000) ..................... $ 80,278 $82,188
Ratio of operating expenses to average net
assets (%)(b)(c) .................................. 1.00 1.00
Ratio of net investment income to average net
assets (%((b) ..................................... 1.96 1.12
Portfolio turnover rate (%) ......................... 70 119
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) ................. 1.17 1.16
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 $ 0.13(d)
* For the six months ended June 30, 1998.
** From commencement of class operations on January 2, 1997.
(a) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(b) Annualized for periods less than one year.
(c) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(d) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
- --------------------------------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
- -------------------------------------------------- -------------------
1996 1995 1994 1993 1998* 1997**
-------- -------- -------- -------- ------- ------
(UNAUDITED)
$ 11.65 $ 11.61 $ 12.90 $ 9.64 $ 11.28 $ 13.16
-------- -------- -------- -------- -------- --------
0.12 0.14 0.15 0.11 0.09 0.10(d)
2.01 0.87 (0.38) 3.61 0.88 (0.26)
-------- -------- -------- -------- -------- --------
2.13 1.01 (0.23) 3.72 0.97 (0.16)
-------- -------- -------- -------- -------- --------
(0.09) (0.14) (0.14) (0.10) 0.00 (0.17)
(0.53) (0.83) (0.92) (0.36) 0.00 (1.55)
-------- -------- -------- -------- -------- --------
(0.62) (0.97) (1.06) (0.46) 0.00 (1.72)
-------- -------- -------- -------- -------- --------
$ 13.16 $ 11.65 $ 11.61 $ 12.90 $ 12.25 $ 11.28
======== ======== ======== ======== ======== ========
18.3 8.7 (1.8) 38.5 8.6 (1.3)
$ 90,662 $ 79,488 $ 73,189 $ 56,560 $ 207 $ 233
1.42 1.45 1.46 1.50 1.25 1.25
0.96 1.16 1.30 1.20 1.54 0.73
151 133 116 128 70 119
1.42 1.45 1.46 1.72 9.75 16.24
$ 0.12 $ 0.14 $ 0.15 $ 0.09 $ (0.39) $ (1.93)(d)
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
MID-CAP GROWTH FUND
---------------------------------------
INSTITUTIONAL
CLASS RETAIL CLASS
---------------- ----------------
1998* 1997** 1998* 1997**
----- ------ ----- ------
(UNAUDITED) (UNAUDITED)
Net asset value, beginning of period $ 11.49 $ 10.00 $ 11.49 $ 10.00
------- ------- ------- -------
Income from investment operations --
Net investment income (loss) ...... (0.02) (0.03) (0.03) (0.06)
Net realized and unrealized
gain (loss) on investments ...... 1.06 2.26 1.06 2.27
------- ------- ------- -------
Total from investment operations 1.04 2.23 1.03 2.21
------- ------- ------- -------
Less distributions --
Dividends from net investment
income ........................ 0.00 0.00 0.00 0.00
Distributions in excess of
net investment income ......... 0.00 (0.12) 0.00 (0.10)
Distributions from net realized
capital gains ................. 0.00 (0.62) 0.00 (0.62)
------- ------- ------- -------
Total distributions ........... 0.00 (0.74) 0.00 (0.72)
------- ------- ------- -------
Net asset value, end of period ...... $ 12.53 $ 11.49 $ 12.52 $ 11.49
======= ======= ======= =======
Total return (%)(a) ................. 9.1 22.7 9.0 22.4
Net assets, end of period (000) ..... $ 2,054 $ 1,848 $ 101 $ 74
Ratio of operating expenses to
average net assets(%)(b)(c) ...... 1.00 1.00 1.25 1.25
Ratio of net investment income
to average net assets(%)(b) ...... (0.42) (0.38) (0.67) (0.67)
Portfolio turnover rate (%) ......... 70 174 70 174
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) ........... 6.80 9.35 28.89 36.58
Without giving effect to the
voluntary expense limitations
described in Note 3 to the
Financial Statements net
investment income per share
would have been: ................. $ (0.36) $ (0.60) $ (1.33) $ (3.29)
* For the six months ended June 30, 1998.
** Commencement of operations on January 2, 1997.
(a) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(b) Annualized for periods less than one year.
(c) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
MID-CAP VALUE FUND
---------------------------------------
INSTITUTIONAL
CLASS RETAIL CLASS
---------------- ----------------
1998* 1997** 1998* 1997**
----- ------ ----- ------
(UNAUDITED) (UNAUDITED)
Net asset value, beginning of period $ 11.53 $ 10.00 $ 11.53 $ 10.00
------- ------- ------- -------
Income from investment operations --
Net investment income (loss) ...... 0.01 0.07 0.00 0.03
Net realized and unrealized gain (loss) on
investments ..................... 0.92 2.54 0.91 2.55
------- ------- ------- -------
Total from investment operations 0.93 2.61 0.91 2.58
------- ------- ------- -------
Less distributions --
Dividends from net investment
income ........................... 0.00 (0.14) 0.00 (0.11)
Distributions from net realized
capital gains ..................... 0.00 (0.94) 0.00 (0.94)
------- ------- ------- -------
Total distributions ........... 0.00 (1.08) 0.00 (1.05)
------- ------- ------- -------
Net asset value, end of period ...... $ 12.46 $ 11.53 $ 12.44 $ 11.53
======= ======= ======= =======
Total return (%)(a) ................. 8.1 26.3 7.9 26.0
Net assets, end of period (000) ..... $ 4,242 $ 3,736 $ 215 $ 168
Ratio of operating expenses
to average net assets (%)(b)(c) .. 1.00 1.00 1.25 1.25
Ratio of net investment income
to average net assets (%)(b) ..... 0.21 0.74 (0.04) 0.42
Portfolio turnover rate (%) ......... 152 130 152 130
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) ........... 3.84 6.65 12.55 27.99)
Without giving effect to the
voluntary expense limitations
described in Note 3 to the
Financial Statements net
investment income per share
would have been: ................. $ (0.16) $ (0.49) $ (0.24) $ (1.90)
* For the six months ended June 30, 1998.
** Commencement of operations on January 2, 1997.
(a) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(b) Annualized for periods less than one year.
(c) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
SMALL CAP GROWTH FUND
---------------------------------------
INSTITUTIONAL
CLASS RETAIL CLASS
---------------- ----------------
1998* 1997** 1998* 1997**
----- ------ ----- ------
(UNAUDITED) (UNAUDITED)
Net asset value, beginning of period $ 11.32 $ 10.00 $ 11.30 $ 10.00
------- ------- ------- -------
Income from investment operations --
Net investment income (loss) ..... (0.01) (0.07)(d) (0.04) (0.10)(d)
Net realized and unrealized
gain (loss) on investments ...... 1.28 1.99 1.30 1.99
------- ------- ------- -------
Total from investment operations 1.27 1.92 1.26 1.89
------- ------- ------- -------
Less distributions --
Dividends from net
investment income .............. 0.00 0.00 0.00 0.00
Distributions in excess of
net investment income ........... 0.00 (0.01) 0.00 0.00
Distributions from net
realized capital gains .......... 0.00 0.00 0.00 0.00
Distributions in excess
of net realized capital
gains ............................ 0.00 (0.59) 0.00 (0.59)
------- ------- ------- -------
Total distributions ........... 0.00 (0.60) 0.00 (0.59)
------- ------- ------- -------
Net asset value, end of period ...... $ 12.59 $ 11.32 $ 12.56 $ 11.30
======= ======= ======= =======
Total return (%)(a) ................. 11.2 19.4 11.2 19.2
Net assets, end of period (000) ..... $18,815 $ 3,893 $ 1,853 $ 1,139
Ratio of operating expenses
to average net assets
(%)(b)(c) ......................... 1.00 1.00 1.25 1.25
Ratio of net investment
income to average net
assets (%)(b) .................... (0.46) (0.65) (0.79) (0.94)
Portfolio turnover rate (%) ......... 68 211 68 211
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) ........... 2.54 5.81 3.92 7.82
Without giving effect to the
voluntary expense
limitations described
in Note 3 to the Financial
Statements net investment
income per share would
have been: ....................... $ (0.04) $ (0.56)(d) $ (0.19) $ (0.77)(d)
* For the six months ended June 30, 1998.
** Commencement of operations on January 2, 1997.
(a) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(b) Annualized for periods less than one year.
(c) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(d) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
SMALL CAP
VALUE FUND
------------------------
INSTITUTIONAL
CLASS
------------------------
1998* 1997
------- -------
(UNAUDITED)
Net asset value, beginning of period ................. $ 18.62 $ 17.39
-------- -------
Income from investment operations --
Net investment income (loss) ...................... 0.07 0.17
Net realized and unrealized gain (loss) on investment 0.47 4.26
-------- -------
Total from investment operations ................ 0.54 4.43
-------- -------
Less distributions --
Dividends from net investment income .............. 0.00 (0.15)
Distributions from net realized capital gains ..... 0.00 (3.05)
-------- -------
Total distributions ............................. 0.00 (3.20)
-------- -------
Net asset value, end of period ...................... $ 19.16 $ 18.62
======== =======
Total return (%)(a) ................................. 2.9 26.0
Net assets, end of period (000) ..................... $334,135 $245,177
Ratio of operating expenses to average
net assets (%)(b)(c) ............................... 0.94 0.94
Ratio of net investment income to average
net assets (%)(b) .................................. 0.94 0.97
Portfolio turnover rate (%) ......................... 45 94
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 0.94
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 $ 0.17
* For the six months ended June 30, 1998.
** From commencement of class operations on January 2, 1997.
(a) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(b) Annualized for periods less than one year.
(c) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(d) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
- -------------------------------------------------- -------------------
1996 1995 1994 1993 1998* 1997**
-------- -------- -------- -------- ------- ------
(UNAUDITED)
$ 15.33 $ 12.86 $ 14.13 $ 12.88 $ 18.62 $ 17.39
-------- -------- -------- -------- -------- --------
0.11 0.04 (0.04) 0.00 0.06 0.15(d)
4.47 4.06 (1.12) 3.15 0.46 4.21
-------- -------- -------- -------- -------- --------
4.58 4.10 (1.16) 3.15 0.52 4.36
-------- -------- -------- -------- -------- --------
(0.11) (0.04) 0.00 0.00 0.00 (0.08)
(2.41) (1.59) (0.11) (1.90) 0.00 (3.05)
-------- -------- -------- -------- -------- --------
(2.52) (1.63) (0.11) (1.90) 0.00 (3.13)
-------- -------- -------- -------- -------- --------
$ 17.39 $ 15.33 $ 12.86 $ 14.13 $ 19.14 $ 18.62
======== ======== ======== ======== ======== ========
30.4 32.1 (8.2) 24.7 2.8 25.6
$163,625 $ 90,455 $ 73,126 $ 67,553 $ 59,437 $ 34,353
1.19 1.25 1.27 1.35 1.20 1.25
0.80 0.29 (0.30) (0.38) 0.69 0.79
73 155 87 106 45 94
1.19 1.25 1.27 1.35 1.20 1.35
$ 0.11 $ 0.04 $ (0.04) $ 0.00 $ 0.06 $ 0.13(d)
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
PERIOD ENDED JUNE 30, 1998 (UNAUDITED)
SMALL CAP
VALUE FUND
----------
ADMIN
CLASS
-----------
1998***
----------
Net asset value, beginning of period ............................. $ 18.62
--------
Income from investment operations --
Net investment income (loss) ................................... 0.02
Net realized and unrealized gain (loss) on investments ......... 0.47
--------
Total from investment operations ............................. 0.49
--------
Less distributions --
Dividends from net investment income ........................... 0.00
Distributions from capital ..................................... 0.00
--------
Total distributions .......................................... 0.00
--------
Net asset value, end of period ................................... $ 19.11
========
Total return (%)(a) .............................................. 2.6
Net assets, end of period (000) .................................. $ 695
Ratio of operating expenses to average net assets (%)(b)(c) ...... 1.50
Ratio of net investment income to average net assets (%)(b) ...... 2.17
Portfolio turnover rate (%)(c) ................................... 45
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) .............................. 7.10
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)
*** From commencement of class operations on January 2, 1998.
(a) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(b) Annualized for periods less than one year.
(c) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
STRATEGIC VALUE FUND
---------------------------------------
INSTITUTIONAL
CLASS RETAIL CLASS
---------------- ----------------
1998* 1997** 1998* 1997**
----- ------ ----- ------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.76 $ 10.00 $ 11.76 $ 10.00
------- ------- ------- -------
Income from investment operations --
Net investment income (loss) ..... (0.01) (0.01)(d) (0.03) (0.06)(d)
Net realized and unrealized
gain (loss) on investments ...... 1.27 1.98 1.27 2.00
------- ------- ------- -------
Total from investment operations 1.26 1.97 1.24 1.94
------- ------- ------- -------
Less distributions --
Dividends from net
investment income ............... 0.00 0.00 0.00 0.00
Distributions in excess of
net investment income ........... 0.00 (0.21) 0.00 (0.18)
Distributions from net
realized capital gains .......... 0.00 0.00 0.00 0.00
------- ------- ------- -------
Total distributions ........... 0.00 (0.21) 0.00 (0.18)
------- ------- ------- -------
Net asset value, end of period ...... $ 13.02 $ 11.76 $ 13.00 $ 11.76
======= ======= ======= =======
Total return (%)(a) ................. 10.7 19.7 10.5 19.4
Net assets, end of period (000) ..... $ 1,163 $ 965 $ 309 $ 279
Ratio of operating expenses
to average net assets(%)(b)(c) ... 1.00 1.00 1.25 1.25
Ratio of net investment income
to average net assets(%)(b) ...... (0.23) (0.05) (0.47) (0.49)
Portfolio turnover rate (%) ......... 21 34 21 34
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) ................. 9.99 16.55 14.54 21.33
Without giving effect to the voluntary expense
limitations described in Note 3 to
the Financial Statements net
investment income per share would
have been: ....................... $ (0.60) $ (1.76)(d) $ (0.88) $ (2.50)(d)
</TABLE>
* For the six months ended June 30, 1998.
** Commencement of fund operations on January 2, 1997.
(a) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(b) Annualized for periods less than one year.
(c) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(d) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------
PERIOD ENDED JUNE 30, 1998 (UNAUDITED)
WORLDWIDE
FUND
----------
INSTITUTIONAL
CLASS
------------
1998*
------------
(UNAUDITED)
Net asset value, beginning of period ............................. $ 9.86
-------
Income from investment operations --
Net investment income (loss) ................................... 0.23
Net realized and unrealized gain (loss) on investments ......... (0.24)
-------
Total from investment operations ............................. (0.01)
-------
Less distributions --
Dividends from net investment income ........................... 0.00
Distributions from net realized capital gains .................. 0.00
-------
Total distributions .......................................... 0.00
-------
Net asset value, end of period ................................... $ 9.85
=======
Total return (%)(a) .............................................. (0.1)
Net assets, end of period (000) .................................. $ 5,571
Ratio of operating expenses to average net assets (%)(b)(c) ...... 1.00
Ratio of net investment income to average net assets (%)(b) ...... 4.47
Portfolio turnover rate (%) ...................................... 61
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) .................... 3.13
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net investment
income per share would have been: .............................. $ 0.12
* For the six months ended June 30, 1998.
** Commencement of operations on May 1, 1996 and January 2, 1997, for the
Institutional and Retail Classes, respectively.
(a) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(b) Annualized for periods less than one year.
(c) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(d) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
WORLDWIDE FUND
- -------------------------------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
------------------------- -----------------------------
1997 1996** 1998* 1997**
---- ------ ----- ------
(UNAUDITED)
$ 10.63 $ 10.00 $ 9.86 $ 10.63
------- -------- ------- -------
0.47 0.30 0.20(d) 0.38(d)
(0.10) 0.63 (0.24) (0.03)
------- -------- ------- -------
0.37 0.93 (0.04) 0.35
------- -------- ------- -------
(0.47) (0.30) 0.00 (0.45)
(0.67) 0.00 0.00 (0.67)
------- -------- ------- -------
(1.14) (0.30) 0.00 (1.12)
------- -------- ------- -------
$ 9.86 $ 10.63 $ 9.82 $ 9.86
======= ======== ======= =======
3.5 9.2 (0.4) 3.3
$ 5,597 $ 5,189 $ 79 $ 20
1.00 1.00 1.25 1.25
3.89 4.62 3.87 3.58
134 76 61 134
2.62 3.72 23.52 214.91
$ 0.27 $ 0.13 $ (0.97)(d) $(23.33)(d)
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
JUNE 30, 1998 (UNAUDITED)
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>
The Equity Funds offer Institutional and Retail Class shares. Each class has
equal pro rata interest in the assets of the relevant fund and general voting
privileges. Retail and Institutional Classes differ with respect to
distribution and certain other class-specific expenses and expense reductions.
Retail Class shares are subject to distribution fees at an annual rate of
0.25% of the relevant fund's average net assets, pursuant to a distribution
plan adopted in accordance with Rule 12b-1 under the Investment Company Act of
1940. Retail Class shares have exclusive voting rights with respect to its
distribution plan.
January 2, 1998, the Small Cap Value Fund commenced operations of an
additional class of shares ("Admin Class"). These shares are subject to
distribution fees at an annual rate of 0.25% of the Fund's average net assets,
pursuant to a distribution plan adopted in accordance with Rule 12b-1 under
the Investment Company Act of 1940, and to administrative fees at an annual
rate of 0.25% of the Fund's average daily net assets attributable to the Admin
Class.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates. The following summarizes the
significant accounting policies of the Equity Funds:
A. SECURITY VALUATION -- Equity securities for which quotations are readily
available are valued at their last sale price on the exchange where primarily
traded or, if there is no reported sale during the day, at the closing bid
price. Long-term debt securities for which quotations are readily available
are valued by a pricing service, approved by the Board of Trustees, which
generally uses the most recent bid prices in the principal market in which
such securities are normally traded. Short-term securities with a remaining
maturity of 60 days or less are valued at amortized cost, which approximates
market value. Other securities for which quotations are not readily available
(including restricted securities, if any) are valued primarily using dealer
supplied quotations or at their fair values as determined in good faith under
the general supervision of the Board of Trustees.
B. REPURCHASE AGREEMENTS -- The Funds may 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 102% of the repurchase
price. These securities are marked-to-market daily. Loomis Sayles is
responsible for determining that the value of the collateral is at all times
at least equal to 102% of 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 AND FOREIGN INVESTMENTS -- 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 are translated at contractual currency exchange rates established
at the time of the trade. Income and expenses are translated at prevailing
exchange rates 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, sales and maturities of forward foreign currency contracts, 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.
Certain funds use foreign currency exchange contracts to facilitate
transactions in foreign-denominated securities. Losses may arise from changes
in the value of the foreign currency or if the counterparties do not perform
under the contracts' terms. The U.S. dollar value of foreign currency
contracts is determined using contractual currency exchange rates established
at the time of each trade. The cost of foreign currency contracts is included
in the cost basis of the associated investment.
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.
D. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- Each Fund that may invest
in foreign securities may enter into forward foreign currency exchange
contracts to protect its securities against changes in future foreign exchange
rates. A forward foreign currency exchange contract is an agreement between
two parties to buy or sell currency at a set price on a future date.
The market value of the contract will fluctuate with changes in currency
exchange rates. The contract is marked-to-market daily using the forward
currency exchange rate and the change in market value is recorded as
unrealized appreciation (depreciation) on foreign currency translations in the
Funds' Statements of Assets and Liabilities. Realized gain or loss is
recognized when the contract is closed 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 and recorded as realized gain (loss) on foreign currency
transactions in the Funds' Statements of Operations.
Risks may arise upon entering into forward foreign currency exchange contracts
from the potential inability of counterparties to meet the terms of their
contracts and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. At June 30, 1998, there were no open forward
foreign currency 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 are determined on the identified cost basis.
Most expenses of the Trust can be directly attributed to a particular fund.
Expenses which cannot be directly attributed are apportioned among the Funds
based upon relative net assets.
Investment income, realized and unrealized gains and losses, and the common
expenses of a fund are allocated on a pro rata basis to each class based on
the relative net assets of each class to the total net assets of the fund.
Each class of shares differs in its respective distribution and certain other
class specific fees and expense reductions.
F. WHEN-ISSUED SECURITIES -- Each Fund may purchase securities on a when-
issued basis. Securities purchased on a when-issued basis are purchased for
delivery beyond the normal settlement period at a stated price and yield, and
no income accrues to the Fund on such securities prior to delivery. Each Fund
instructs the custodian to establish a segregated account in which it
maintains liquid assets at least equal to the amount of its when-issued
purchase commitments. Purchasing securities on a when-issued basis may involve
a risk that the market price at the time of delivery may be lower than the
agreed-upon purchase price, in which case there could be an unrealized loss at
the time of delivery. At June 30, 1998, the Funds had 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 and capital gain distributions, if any, are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
reclassifications to the Fund's capital accounts to reflect income and gains
available for distribution, are primarily due to differing book and tax
treatments for litigation proceeds, foreign currency transactions, non-
deductible organization costs, deferred losses due to wash sales and excise
tax regulations and net operating losses. Some of these classifications may
include temporary book and tax basis differences that will reverse in
subsequent periods. Dividends from net investment income are determined on a
class level. Capital gains are determined on a Fund level.
I. ORGANIZATION EXPENSE AND DEFERRED REGISTRATION COSTS -- Amortization of
initial registration costs incurred in 1996 and 1997 related to commencement
of new funds and/or classes are amortized over 12 months. Organization costs
incurred by the Worldwide Fund are being amortized over 60 months.
2. PURCHASES AND SALES OF SECURITIES -- (excluding long-term U.S. Government
securities and short-term investments) for each Fund for the period ended June
30, 1998 were as follows:
Purchases Sales
---------------- -------------
Core Value Fund ......................... $ 28,498,930 $ 23,014,895
Growth Fund ............................. 25,655,284 28,520,978
International Equity Fund ............... 54,313,239 59,054,601
Mid-Cap Growth Fund ..................... 1,332,988 1,324,543
Mid-Cap Value Fund ...................... 6,870,738 6,213,515
Small Cap Growth Fund ................... 20,070,252 5,976,767
Small Cap Value ......................... 245,761,748 134,663,648
Strategic Value Fund .................... 518,031 288,062
Worldwide Fund .......................... 2,512,647 3,547,418
Purchases and sales of long-term U.S. Government securities occurred in the
Worldwide Fund and totaled $864,563 and $49,812, respectively.
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES -- During the
period ended June 30, 1998, 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 NVEST, 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, 1998 provided for fees at the following annual percentage rate of
each Fund's average daily net assets:
Annual
Percentage
Fund Rate
---- ----
Core Value Fund .................................................... 0.50%
Growth Fund ........................................................ 0.50%
International Equity Fund .......................................... 0.75%
Mid-Cap Growth Fund ................................................ 0.75%
Mid-Cap Value Fund ................................................. 0.75%
Small Cap Growth Fund .............................................. 0.75%
Small Cap Value Fund ............................................... 0.75%
Strategic Value Fund ............................................... 0.50%
Worldwide Fund ..................................................... 0.75%
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 each Fund to the following percentage rate of the
Fund's average daily net assets:
Maximum Expense Ratios
---------------------------------------
Institutional Retail Admin
Fund Class Class Class
---- ----- ----- -----
Core Value Fund ..................... 0.85% 1.10% --
Growth Fund ......................... 0.85% 1.10% --
International Equity Fund ........... 1.00% 1.25% --
Mid-Cap Growth Fund ................. 1.00% 1.25% --
Mid-Cap Value Fund .................. 1.00% 1.25% --
Small Cap Growth Fund ............... 1.00% 1.25% --
Small Cap Value Fund ................ 1.00% 1.25% 1.50%
Strategic Value Fund ................ 1.00% 1.25% --
Worldwide Fund ...................... 1.00% 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. 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, NVEST 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.
B. SHAREHOLDERS -- At June 30, 1998, 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 ............................... 372,470 540,129
Growth Fund ................................... 136,863 736,966
International Equity Fund ..................... 1,002,404 457,250
Mid-Cap Growth Fund ........................... -- 148,757
Mid-Cap Value Fund ............................ -- 140,650
Small Cap Growth Fund ......................... 238,178 194,611
Small Cap Value Fund .......................... 159,082 963,681
Strategic Value Fund .......................... -- 70,825
Worldwide Fund ................................ 458,729 77,408
4. 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 Period Ended
June 30, 1998 December 31, 1997
------------------------------ ----------------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 375,032 $ 7,004,093 921,281 $ 16,764,969
---------- ------------ ---------- -------------
Issued in connection with the
reinvestment of distributions .... 0 0 411,076 7,179,304
Redeemed ........................... (178,425) (3,369,345) (544,799) (9,494,995)
---------- ------------ ---------- -------------
Net change ......................... 196,607 $ 3,634,748 787,558 $ 14,449,278
========== ============ ---------- -------------
<CAPTION>
Retail Class Shares Shares Amount Shares* Amount*
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 44,521 $ 856,260 107,737 $ 1,958,564
Issued in connection with the
reinvestment of distributions .... 0 0 8,390 145,675
Redeemed ........................... (25,703) (484,432) (40,972) (699,525)
---------- ------------ ---------- -------------
Net change ......................... 18,818 $ 371,828 75,155 $ 1,404,714
========== ============ ========== =============
*From January 2, 1997 (commencement of class operations).
<CAPTION>
Loomis Sayles Growth Fund
------------------------------------------------------------------
Period Ended Period Ended
June 30, 1998 December 31, 1997
------------------------------ ----------------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 70,497 $ 895,642 253,404 $ 3,601,402
Issued in connection with the
reinvestment of distributions .... 0 0 616,053 7,726,539
Redeemed ........................... (428,782) (5,625,526) (1,261,701) (18,196,471)
---------- ------------ ---------- -------------
Net change ......................... (358,285) $ (4,729,884) (392,244) $ (6,868,530)
========== ============ ========== =============
<CAPTION>
Retail Class Shares Shares Amount Shares* Amount*
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 29,478 $ 354,709 76,184 $ 1,122,980
Issued in connection with the
reinvestment of distributions .... 0 0 3,662 45,392
Redeemed ........................... (2,408) (30,864) (64,436) (926,300)
---------- ------------ ---------- -------------
Net change ......................... 27,070 $ 323,845 15,410 $ 242,072
========== ============ ========== =============
*From January 2, 1997 (commencement of class operations).
<CAPTION>
Loomis Sayles International Equity Fund
------------------------------------------------------------------
Period Ended Period Ended
June 30, 1998 December 31, 1997
------------------------------ ----------------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 424,636 $ 5,385,895 784,236 $ 10,550,546
Issued in connection with the
reinvestment of distributions .... 0 0 821,217 9,502,779
Redeemed ........................... (1,168,141) (14,266,890) (1,224,562) (16,864,605)
---------- ------------ ---------- -------------
Net change ......................... (743,505) $ (8,880,995) 380,891 $ 3,188,720
========== ============ ========== =============
<CAPTION>
Loomis Sayles International Equity Fund
------------------------------------------------------------------
Period Ended Period Ended
June 30, 1998 December 31, 1997
------------------------------ ----------------------------------
Retail Class Shares Shares Amount Shares* Amount*
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 18,652 $ 239,509 61,345 $ 821,531
Issued in connection with the
reinvestment of distributions .... 0 0 2,712 31,215
Redeemed ........................... (22,439) (285,012) (43,382) (569,458)
---------- ------------ ---------- -------------
Net change ......................... (3,787) $ (45,503) 20,675 $ 283,288
========== ============ ========== =============
*From January 2, 1997 (commencement of class operations).
<CAPTION>
Loomis Sayles MidCap Growth Fund
------------------------------------------------------------------
Period Ended Period Ended
June 30, 1998 December 31, 1997*
------------------------------ ----------------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 12,347 $ 143,669 177,686 $ 1,840,192
Issued in connection with the
reinvestment of distributions .... 0 0 9,562 106,040
Redeemed ........................... (9,311) (106,395) (26,426) (302,973)
---------- ------------ ---------- -------------
Net change ......................... 3,036 $ 37,274 160,822 $ 1,643,259
========== ============ ========== =============
<CAPTION>
Retail Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 1,682 $ 19,992 7,906 $ 88,646
Issued in connection with the
reinvestment of distributions .... 0 0 390 4,320
Redeemed ........................... (1) (12) (1,893) (21,751)
---------- ------------ ---------- -------------
Net change ......................... 1,681 $ 19,980 6,403 $ 71,215
========== ============ ========== =============
*From January 2, 1997 (commencement of operations).
<CAPTION>
Loomis Sayles Mid-Cap Value Fund
------------------------------------------------------------------
Period Ended Period Ended
June 30, 1998 December 31, 1997*
------------------------------ ----------------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 47,284 $ 575,053 309,654 $ 3,352,605
Issued in connection with the
reinvestment of distributions .... 0 0 26,150 296,025
Redeemed ........................... (31,017) (369,158) (11,607) (141,399)
---------- ------------ ---------- -------------
Net change ......................... 16,267 $ 205,895 324,197 $ 3,507,231
========== ============ ========== =============
<CAPTION>
Retail Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 2,721 $ 32,300 13,686 $ 159,030
Issued in connection with the
reinvestment of distributions .... 0 0 902 10,219
Redeemed ........................... (1) (13) (6) (79)
---------- ------------ ---------- -------------
Net change ......................... 2,720 $ 32,287 14,582 $ 169,170
========== ============ ========== =============
*From January 2, 1997 (commencement of class operations).
<CAPTION>
Loomis Sayles Small Cap Growth Fund
------------------------------------------------------------------
Period Ended Period Ended
June 30, 1998 December 31, 1997*
------------------------------ ----------------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 1,209,755 $ 14,743,000 365,308 $ 3,697,821
Issued in connection with the
reinvestment of distributions .... 0 0 16,122 174,112
Redeemed ........................... (59,821) (734,715) (37,420) (420,264)
---------- ------------ ---------- -------------
Net change ......................... 1,149,934 $ 14,008,285 344,010 $ 3,451,669
========== ============ ========== =============
<CAPTION>
Retail Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 64,606 $ 750,471 108,337 $ 1,114,195
Issued in connection with the
reinvestment of distributions .... 0 0 4,792 51,662
Redeemed ........................... (17,923) (209,762) (12,312) (122,151)
---------- ------------ ---------- -------------
Net change ......................... 46,683 $ 540,709 100,817 $ 1,043,706
========== ============ ========== =============
*From January 2, 1997 (commencement of operations).
<CAPTION>
Loomis Sayles Small-Cap Growth Fund
------------------------------------------------------------------
Period Ended Period Ended
June 30, 1998 December 31, 1997
------------------------------ ----------------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 5,562,589 $109,743,674 3,738,215 $ 74,208,026
Issued in connection with the
reinvestment of distributions .... 0 0 1,901,950 34,745,871
Redeemed ........................... (1,292,786) (24,886,212) (1,877,683) (35,245,314)
---------- ------------ ---------- -------------
Net change ......................... 4,269,803 $ 84,857,462 3,762,482 $ 73,708,583
========== ============ ========== =============
<CAPTION>
Retail Class Shares Shares Amount Shares* Amount*
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 1,682,778 $ 32,541,420 1,876,793 $ 37,883,528
Issued in connection with the
reinvestment of distributions .... 0 0 225,201 4,104,426
Redeemed ........................... (422,151) (8,121,942) (256,863) (5,210,721)
---------- ------------ ---------- -------------
Net change ......................... 1,260,627 $ 24,419,478 1,845,131 $ 36,777,233
========== ============ ========== =============
<CAPTION>
Admin Class Shares** Shares Amount
- -------------------------- ------ ------
<S> <C> <C>
Issued from the sale of shares ..... 36,548 $ 674,729
Issued in connection with the
reinvestment of distributions .... 0 0
Redeemed ........................... (178) (3,319)
---------- ------------
Net change ......................... 36,370 $ 671,410
========== ============
*From January 2, 1997 (commencement of class operations).
**From January 2, 1998 (commencement of class operations).
</TABLE>
<TABLE>
<CAPTION>
Loomis Sayles Strategic Value Fund
------------------------------------------------------------------
Period Ended Period Ended
June 30, 1998 December 31, 1997*
------------------------------ ----------------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 9,408 $ 116,110 83,725 $ 892,822
Issued in connection with the
reinvestment of distributions .... 0 0 1,198 13,783
Redeemed ........................... (2,168) (29,291) (2,824) (34,372)
---------- ------------ ---------- -------------
Net change ......................... 7,240 $ 86,819 82,099 $ 872,233
========== ============ ========== =============
<CAPTION>
Retail Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 0 $ 0 24,027 $ 269,111
Issued in connection with the
reinvestment of distributions .... 0 0 360 4,143
Redeemed ........................... (1) (13) (616) (7,240)
---------- ------------ ---------- -------------
Net change ......................... (1) $ (13) 23,771 $ 266,014
========== ============ ========== =============
*From January 2, 1997 (commencement of operations).
<CAPTION>
Loomis Sayles Worldwide Fund
------------------------------------------------------------------
Period Ended Period Ended
June 30, 1998 December 31, 1997
------------------------------ ----------------------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 2,770 $ 28,379 220,662 $ 2,356,777
Issued in connection with the
reinvestment of distributions .... 0 0 70,014 694,603
Redeemed ........................... (4,715) (47,381) (211,051) (2,199,192)
---------- ------------ ---------- -------------
Net change ......................... (1,945) $ (19,002) 79,625 $ 852,188
========== ============ ========== =============
<CAPTION>
Retail Class Shares Shares Amount Shares* Amount*
- ------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ..... 24,785 $ 266,317 1,794 $ 19,549
Issued in connection with the
reinvestment of distributions .... 0 0 204 2,008
Redeemed ........................... (18,687) (197,605) 0 0
---------- ------------ ---------- -------------
Net change ......................... 6,098 $ 68,712 1,998 $ 21,557
========== ============ ========== =============
</TABLE>
*From January 2, 1997 (commencement of class operations).
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
- --------------------------------------------------------------------------------
BOARD OF TRUSTEES AND OFFICERS
- --------------------------------------------------------------------------------
BOARD OF TRUSTEES
- -------------------------------------------------------------------------------
Earl W. Foell Terry R. Lautenbach
Daniel J. Fuss Michael T. Murray
Richard S. Holway
OFFICERS
- -------------------------------------------------------------------------------
PRESIDENT
Daniel J. Fuss
EXECUTIVE VICE PRESIDENT TREASURER
Robert J. Blanding Mark W. Holland
VICE PRESIDENTS ASSISTANT TREASURERS
James L. Carroll Philip R. Murray
Jerome A. Castellini Nicholas H. Palmerino
Mary C. Champagne
E. John deBeer SECRETARY
Paul H. Drexler Sheila M. Barry
William H. Eigen, Jr.
Christopher R. Ely ASSISTANT SECRETARY
Quentin P. Faulkner Bonnie S. Thompson
Philip C. Fine
Kathleen C. Gaffney
Isaac H. Green
Dean A. Gulis
Martha F. Hodgman
John Hyll
Jeffrey L. Meade
Kent P. Newmark
Scott S. Pape
Jeffrey C. Petherick
Lauren B. Pitalis
Philip J. Schettewi
David L. Smith
Sandra P. Tichenor
Jeffrey W. Wardlow
Gregg D. Watkins
Anthony J. Wilkins
John F. Yeager III
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INVESTMENT ADVISER
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111
TRANSFER AND DIVIDEND PAYING AGENT AND CUSTODIAN OF ASSETS
State Street Bank and Trust Company
Boston, Massachusetts 02102
SHAREHOLDER SERVICING AGENT
FOR STATE STREET BANK AND TRUST COMPANY
Boston Financial Data Services, Inc.
P.O. Box 8314
Boston, Massachusetts 02266
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, Massachusetts 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.
