<PAGE>
LOOMIS SAYLES FUNDS
EQUITY FUNDS
o o o
ANNUAL REPORT
SEPTEMBER 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
------
SAYLES
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FUNDS
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ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
800 o 633 o 3330
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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..................................... 58
Statements of Operations................................................. 60
Statements of Changes in Net Assets...................................... 64
Financial Highlights..................................................... 74
Notes to Financial Statements............................................ 90
1998 U.S. Tax and Distribution Information.............................. 101
Report of Independent Accountants....................................... 102
Board of Trustees and Officers........................................... 105
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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
There is no doubt about it...it was a miserable quarter and a difficult nine
months. Unless you were fully invested in Treasuries, your portfolio is
probably looking rather unhealthy. However, there is hope on the horizon and,
although, perhaps it is my age, I feel very comfortable with the general
outlook of the market right now.
To use a forest fire analogy, the spark which ignited the global turmoil was
Russia. The fuel for the fire was the enormous amount of leverage which
existed in the global bond markets. Following the announcement last August
that Russia would default on some of their short-term debt, bond prices (other
than Governments) declined. The spread in the yield between U.S. Treasuries
and corporate bonds widened tremendously. The corporate bond market became
relatively illiquid and the spread between bid and ask prices widened by a
factor of 10 or more.
As one might expect, investors fled into Government bonds. Anything with the
slightest hint of risk -- even blue chip, high quality bonds -- were shunned
and their performance lagged that of Treasuries.
It is little wonder that some hedge funds ran into trouble. It is not that the
credits went bad. It was simply that two things happened at once. The
Treasuries they shorted went up, and the positions they owned went down (the
same thing happened to dealers further reducing the liquidity of the corporate
bond market).
Fortunately, we believe things are not as bad as they seem. For us, it is
strictly a case of "same bonds, new prices", without anything going terribly
wrong with our specific holdings, but rather global market conditions. The
question remains, how many more sparks are there out there? My guess is that
sparks will continue to fly, but the major inferno is behind us.
For example, Thailand has taken serious steps to fix their banks. Korea's
current account is strong and its foreign exchange reserves have skyrocketed.
We have seen some encouraging signs in Japan.
Luckily, the Federal Reserve appears inclined to act quickly and decisively to
avoid a recession. The two rate cuts which followed each other in quick
succession (and I predict there will be more on the way) demonstrate just how
quickly things can change. Instead of trying to pull liquidity out of the
system, the Reserve Bank is trying to put liquidity into the system.
Forests don't regrow overnight and what is required now is patience. Although
it may hurt over the short run, we believe that these periods of volatility
present opportunities to buy the securities of good companies at lower prices
and higher yields. We believe that buying the securities of good companies at
low prices is the foundation of future performance.
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
As you know, the Year 2000 is approaching rapidly, creating a growing concern
about the ability of many computer systems to handle a rollover to the new
millennium.
Loomis, Sayles & Company is addressing this matter through the creation of a
compliance committee and the formation of a Year 2000 project plan. Loomis,
Sayles is currently working on this project as outlined in its plan and will
continue its assessment, remediation and testing efforts into 1999. We do not
expect the amounts required to be spent on the Year 2000 project to have a
material effect on our financial position.
The Loomis Sayles Funds will share in the work done by Loomis, Sayles &
Company, as well as working with our outside vendors to ensure Year 2000
compliance. Our transfer agent, Boston Financial Data Services and our
custodian bank, State Street Bank and Trust Company have both established
extensive programs to ensure readiness, and have completed much of their
testing. We will, of course, monitor their progress closely. Additionally, we
have contacted firms which have established agreements to offer our funds to
determine their readiness for the Year 2000.
It is our goal to make sure that all requirements are met to serve the needs of
our shareholders. We will continue to provide you with updates regarding Year
2000 developments. If you have any questions about these issues, please do not
hesitate to call us at 1-800-626-9390.
Sincerely,
/s/ John F. Yeager, III
John F. Yeager, III
President,
Loomis Sayles Distributors, L. P.
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ECONOMIC AND MARKET OVERVIEW
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THE LOOMIS SAYLES FUNDS ANNUAL REPORT
ECONOMIC AND MARKET OVERVIEW -- 1998
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STOCKS
Somehow, the world seems a lot smaller than it did this time last year.
Developments in countries like Russia, Brazil and Japan had a profound effect
on the performance of the U.S. markets over the last 9 months.
FIRST QUARTER
The action started in Asia, where political, economic and market turmoil
combined to create a volatile environment. Economic contraction in nearly all
Asian countries led to a free fall in their financial markets and tremendous
devaluation in their currencies. In response, capital fled those markets in
search of safety. Liquidity, which had been abundant, lessened dramatically.
These troubled markets gained back some of the ground they lost, but remained
shaky.
The strong U.S. economy was able to shake off the Asian contagion throughout
the first half of the year. With economic growth in its sixth year, domestic
investors still seemed willing to bet that U.S. companies would continue to
grow earnings. And with no clear evidence of inflation, the Federal Reserve
Bank refused to raise short-term interest rates.
SECOND QUARTER
Asia continued to make headlines with unrest in Indonesia and atomic rivalry
between India and Pakistan and political inertia in Japan made it difficult
for most investors to see any light at the end of the tunnel. Despite
intervention in the foreign exchange markets by the United States, the
Japanese yen fell to new lows against the U.S. dollar.
THIRD QUARTER
Russia's decision to devalue the ruble and default on some of its short-term
debt sent a sudden and ill-timed tremor through the world's markets.
Speculators and hedge funds that had relied on derivatives and other forms of
leverage to make substantial bets suddenly found themselves having to raise
cash. Unable or unwilling to sell their Russian positions, these investors
were forced to sell their more liquid positions -- in places such as Brazil.
This selling led to a free fall in Brazilian stocks and bonds. As capital fled
the country, Brazil's currency reserves fell to dangerously low levels.
The news that Brazil, which accounts for half of Latin America's economy,
might have to defend its currency with higher interest rates (which would lead
to slower growth), was not well received in the U.S. where falling profit
growth was already causing anxiety. News of heavy Brazilian exposure by major
U.S. and European banks and brokerage firms compounded matters.
The U.S. markets were hit hard. The Dow Jones Industrial Average declined
19.26% from its high and the S&P 500 Index fell 19.34%. Investors continued to
stampede into the quality and liquidity of U.S. Treasury bonds in an effort to
avoid risk of any sort.
Borrowing through the corporate bond markets dried up as new issuance fell
dramatically and worries about the economy threatened a credit crunch. In an
uncharacteristic move, the Federal Reserve made it known that it would lower
rates. The Fed's aggressive action to ensure economic growth brought some
confidence into the market -- stocks and corporate bonds rebounded slightly.
SUMMARY
By the end of September, high quality bonds outpaced stocks. This Treasury
rally resulted in weak relative performance for virtually all non-Treasury
securities. Lower quality bonds lost a lot of ground in the third quarter and
the Merrill Lynch High Yield Master Index ended the nine month period with a
gain of only 0.77%. Municipal bonds also posted mediocre returns. Despite
their high quality, foreign buyers had no use for their tax advantaged status
and domestic investors were more than willing to pay a premium for the
liquidity of U.S. Treasuries. Year-to-date the Lehman Brothers Government/
Corporate Bond Index gained 9.33% and the Lehman Brothers Government Bond
Index turned in a 9.94% return.
Concerns over a faltering U.S. economy caused many investors to favor large
cap stocks for their perceived quality and greater liquidity. While these
issues posted strong returns for the first six months of the year, third
quarter returns were weaker. Small cap stocks fell longer and harder than
large caps throughout the year, with the Russell 2000 Index finishing the
nine-month period with a -16.21% return versus the S&P 500 Index's 6.00%
return.
Overseas, the fast approaching deadline for the common European currency
helped European bond markets. Asian markets flattened out and the unexpected
weakness of the U.S. dollar helped performance. The MSCI-EAFE Index posted a
- -0.55% year-to-date return while the Salomon Brothers World Government Bond
Index gained 11.35% for the same period.
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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 -4.48 -7.76 -4.96
Lipper -1.85 -0.21 -3.13
Lipper Category Index -2.30 2.38 -2.46
ONE YEAR
Loomis Sayles -5.39 -9.92 -14.60
Lipper -1.08 -1.44 -10.65
Rank 525 of 715 727 of 934 377 of 489
Percentile 74 78 78
Lipper Category Index -1.35 3.07 -9.92
THREE YEARS
Loomis Sayles 15.92 11.36 3.14
Lipper 16.62 14.73 4.79
Rank 275 of 449 440 of 569 207 of 304
Percentile 62 78 69
Lipper Category Index 16.09 16.43 6.81
FIVE YEARS
Loomis Sayles 15.89 11.28 5.96
Lipper 15.09 14.35 6.41
Rank 121 of 289 280 of 359 74 of 142
Percentile 42 78 53
Lipper Category Index 14.85 15.52 7.71
MODIFIED INCEPTION(3)
Loomis Sayles 13.90 12.04 6.80
Lipper 13.94 13.74 7.65
Rank 101 of 186 169 of 227 36 of 61
Percentile 55 75 60
Lipper Category Index 14.08 14.46 8.19
ACTUAL INCEPTION(4)
Loomis Sayles 14.63 12.94 6.75
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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-8.53 -12.49 -13.16 -16.22 -10.97 -10.85
-9.17 -9.17 -16.52 -16.52 -0.21 -0.88
-7.93 -7.93 -16.33 -16.33 2.38 -3.18
-10.75 -13.03 -17.37 -18.32 -18.40 -17.84
-11.95 -11.95 -20.60 -20.60 -1.44 -3.96
137 of 298 178 of 298 158 of 576 190 of 576 846 of 934 83 of 84
46 60 28 33 91 99
-12.30 -12.30 -21.21 -21.21 3.07 -5.51
N/A N/A N/A 12.51 N/A N/A
6.45
39 of 321
13
3.72
N/A N/A N/A 11.13 N/A N/A
9.40
58 of 180
33
8.16
6.80 5.90 2.10 16.17 3.71 -0.04
4.84 4.84 0.20 12.38 13.32 7.30
90 of 256 114 of 256 167 of 462 10 of 84 698 of 802 68 of 68
36 45 37 12 88 100
4.58 4.58 -2.17 11.12 16.73 7.07
6.80 5.90 2.10 16.39 3.71 0.33
(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
<PAGE>
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FUND AND MANAGER REVIEW
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LOOMIS SAYLES CORE VALUE FUND
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[Photo of [Photo of [Photo of
James L. Carroll] Isaac H. Green] Jeffrey W. Wardlow]
James L. Carroll Isaac H. Green 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 - 0.79%, Retail - 1.10%
Total Net Assets (all classes): $67.9 MM
PERFORMANCE SUMMARY
For the nine months ended September 30, 1998, the Institutional and Retail
classes of the Loomis Sayles Core Value Fund had total returns of -4.48%, and
- -4.71%, respectively, as compared to the Fund's benchmark, the S&P 500 Index,
total return of 6.00%. For the same period, the average growth and income
fund, as measured by Lipper Analytical Services, had a total return of -1.85%.
PORTFOLIO REVIEW
For most of the year, large cap stocks have dominated the market averages,
masking a deteriorating environment for the majority of stocks. The Fund's
performance has fared better versus the market averages over the past three
months than during the first half of the year. Our positions in utilities,
health care, and food stocks have performed well during the recent weak period
of market turmoil. Reducing positions in some of the more volatile areas of
our technology holdings has also improved the defensive nature of the
portfolio. The weakest performing area of the portfolio was financial
services, especially capital markets related firms like Chase Manhattan,
Morgan Stanley Dean Witter, and Bear Stearns.
Reflecting our value philosophy, the average stock in the portfolio sells at
an approximate 20% discount to the S&P 500 Index on valuation measures such as
price/earnings and price/cash flow. We believe that the portfolio is also well
diversified by industry, with the largest overweighting in consumer cyclicals
and the largest underweighting in consumer staples.
PORTFOLIO POSITIONING
With prices declining substantially for many stocks, our shopping list of
ideas has grown considerably. Current holdings that seem unduly depressed like
Morgan Stanley Dean Witter, Tenet Healthcare, Federated Department Stores, and
Chase Manhattan, appear to be attractively priced. Although we have not
altered our portfolio weightings significantly, we have modestly trimmed
positions in some of the defensive areas of the portfolio that are trading
near highs such as the telephone stocks and have started adding to some of the
more undervalued areas of the market such as banks, brokers, and cyclicals.
/s/ James L. Carroll /s/ Isaac H. Green /s/ Jeffrey W. Wardlow
James L. Carroll Isaac H. Green Jeffrey W. Wardlow
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1998
SINCE
YEAR INCEPTION
TO DATE 1 YEAR 3 YEARS 5 YEARS (a)
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Loomis Sayles Core Value Fund
(Institutional) -4.48 -5.39 15.92 15.89 14.63
Loomis Sayles Core Value Fund
(Retail) -4.71 -5.69 N/A N/A 12.47
Lipper Growth & Income Fund Index(b) -2.30 -1.35 16.09 14.85 14.08
S&P 500 Index (c) 6.00 9.05 22.60 19.91 16.82
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO SEPTEMBER 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis S&P
As of 5/31/91 10.00 10.00
Period Ended
6/30/91 09.43 09.54
9/30/91 09.72 10.05
12/31/91 10.16 10.89
3/31/92 10.46 10.62
6/30/92 10.48 10.82
9/30/92 10.67 11.16
12/31/92 11.59 11.72
3/31/93 12.18 12.23
6/30/93 12.11 12.29
9/30/93 12.43 12.61
12/31/93 12.97 12.90
3/31/94 12.78 12.41
6/30/94 12.78 12.46
9/30/94 13.33 13.07
12/31/94 12.85 13.07
3/31/95 14.21 14.34
6/30/95 15.49 15.71
9/30/95 16.68 16.96
12/31/95 17.38 17.98
3/31/96 18.24 18.94
6/30/96 18.62 19.79
9/30/96 19.28 20.40
12/31/96 21.06 22.10
3/31/97 21.56 22.69
6/30/97 24.82 26.65
9/30/97 27.47 28.65
12/31/97 27.21 29.47
3/31/98 29.95 33.58
6/30/98 29.64 34.69
9/30/98 25.99 31.24
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
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[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): $25.2 MM
PERFORMANCE SUMMARY
For the nine months ended September 30, 1998, the Institutional and Retail
classes of the Loomis Sayles Growth Fund had total returns of -7.76%, and
- -7.94%, respectively, as compared to the Fund's benchmark, the S&P 500 Index,
total return of 6.00%. For the same period, the average growth fund, as
measured by Lipper Analytical Services, had a total return of -0.21%.
PORTFOLIO REVIEW
Following strong economic and stock market results in the first half of 1998,
the third quarter of 1998 turned decidedly negative in response to the
unstable economies and financial markets in Asia, Russia and Latin America.
Larger capitalization growth stocks, particularly those with perceived lower
risk and limited economic sensitivity, were the best performers. Food and
beverage, healthcare, utilities, and selected technology stocks experienced
positive returns and the Fund benefited from its holdings in MCI WorldCom,
Home Depot and Pfizer. Mid-size and smaller company valuations were severely
impacted. Our exposure to rapidly growing companies with perceived higher risk
had a negative effect on performance. The majority of these companies continue
to perform well fundamentally and in the case of Starbucks, Borders Group,
Fastenal and MGIC Investment, we view stock price declines as buying
opportunities.
PORTFOLIO POSITIONING
For some time, we have avoided the mega-cap multinational stocks in favor of
more domestically-oriented growth companies. The largest companies have much
higher earnings risk than earlier thought possible. Coca Cola, 3M and
Gillette, as well as many other large multinationals, have confessed to
problems with their international markets. Most of the domestic growth
companies we own do not have exposure to overseas markets and are continuing
to report solid quarterly earnings. Retailing, health care, telecommunications
equipment and energy remain areas of focus. We believe the key to preserving
and growing capital in this market is in avoiding deflationary businesses and
risky balance sheets. We believe exposure to domestically-oriented companies
in these sectors positions the Fund well for future recovery in equity
markets.
/s/ Jerome A. Castellini
Jerome A. Castellini
<PAGE>
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1998
SINCE
YEAR INCEPTION
TO DATE 1 YEAR 3 YEARS 5 YEARS (a)
- -----------------------------------------------------------------------------
Loomis Sayles Growth Fund
(Institutional) -7.76 - 9.92 11.36 11.28 12.94
Loomis Sayles Growth Fund (Retail) -7.94 -10.15 N/A N/A 7.97
Lipper Growth Fund Index(b) 2.38 3.07 16.43 15.52 14.46
S&P 500 Index(c) 6.00 9.05 22.60 19.91 16.82
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO SEPTEMBER 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis S&P
As of 5/31/91 10.00 10.00
Period Ended
6/30/91 09.29 09.54
9/30/91 10.75 10.05
12/31/91 11.69 10.89
3/31/92 10.79 10.62
6/30/92 10.29 10.82
9/30/92 10.64 11.16
12/31/92 12.14 11.72
3/31/93 12.45 12.23
6/30/93 12.78 12.29
9/30/93 13.49 12.61
12/31/93 13.26 12.90
3/31/94 12.74 12.41
6/30/94 12.25 12.46
9/30/94 12.77 13.07
12/31/94 12.78 13.07
3/31/95 13.63 14.34
6/30/95 15.18 15.71
9/30/95 16.67 16.96
12/31/95 16.72 17.98
3/31/96 17.26 18.94
6/30/96 18.76 19.79
9/30/96 19.00 20.40
12/31/96 20.05 22.10
3/31/97 19.39 22.69
6/30/97 21.81 26.65
9/30/97 25.56 28.65
12/31/97 24.96 29.47
3/31/98 26.56 33.58
6/30/98 27.41 34.69
9/30/98 23.02 31.24
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
- --------------------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
- ------------------------------------------------------------------------------
[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): $68.6 MM
PERFORMANCE SUMMARY
For the nine months ended September 30, 1998, the Institutional and Retail
classes of the Loomis Sayles International Equity Fund had total returns of
- -4.96%, and -5.14%, respectively, as compared to the Fund's benchmark, the
MSCI-EAFE Index, total return of -0.55%. For the same period, the average
international equity fund, as measured by Lipper Analytical Services, had a
total return of -3.13%.
PORTFOLIO REVIEW
During the first nine months of the year, the Fund's stock selection
approximately matched the local indexes in the markets in which we were
invested. However, our country selections hampered performance as compared to
the MSCI-EAFE Index. The Fund's investments in Canada, Australia, and New
Zealand posted negative returns, as these markets were hit by slowing world
economic growth and weaker currencies. The Fund experienced gains in a number
of European markets, notably Italy, Spain and France, which benefited from
lower interest rates and corporate restructuring. The strong performance we
experienced with the French insurer Axa (+66%), the Portuguese cellular
operator Telecel (+27%), and the Italian bank Credito Italiano (+26%)
illustrate the type of opportunities that corporate restructuring is providing
in Europe.
During the sharp correction in international markets over the past three
months, the Fund's Institutional class experienced a decline of -12.68%.
Although a sharp setback, our performance ranked in the top 5% of
international funds during the period. Our value approach and relatively
defensive portfolio helped us weather this period with less damage than other
international funds.
PORTFOLIO POSITIONING
At the end of September, the Fund's major holdings included approximately 56%
in Continental Europe, 18% in the United Kingdom, 10% in Japan and 6% in
Canada. No sector represented more than 15% of the overall portfolio. The
major international investment opportunities today are the restructuring
process in Europe, the possibility that Japan's eight year bear market may end
and, on a selective basis, the potential for sound companies in the emerging
markets to revive. While our major focus is currently on Europe, we will
continue to monitor Japan and the emerging markets for opportunities to
enhance returns.
/s/ Paul H. Drexler
Paul H. Drexler
<PAGE>
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1998
SINCE
YEAR INCEPTION
TO DATE 1 YEAR 3 YEARS 5 YEARS (a)
- --------------------------------------------------------------------------------
Loomis Sayles International Equity
Fund (Institutional) -4.96 -14.60 3.14 5.96 6.75
Loomis Sayles International Equity
Fund (Retail) -5.14 -14.81 N/A N/A -3.68
Lipper International Equity Fund
Index(b) -2.46 - 9.92 6.81 7.71 8.19
MSCI-EAFE Index(c) -0.55 - 8.34 3.75 5.35 5.99
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO SEPTEMBER 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis MSCI
As of 5/31/91 10.00 10.00
Period Ended
6/30/91 09.51 09.27
9/30/91 10.41 10.06
12/31/91 10.42 10.23
3/31/92 10.89 09.01
6/30/92 11.27 09.20
9/30/92 10.58 09.34
12/31/92 09.89 08.98
3/31/93 10.82 10.06
6/30/93 11.05 11.07
9/30/93 12.20 11.81
12/31/93 13.70 11.91
3/31/94 13.71 12.32
6/30/94 13.49 12.95
9/30/94 13.71 12.97
12/31/94 13.46 12.83
3/31/95 13.75 13.07
6/30/95 14.84 13.17
9/30/95 14.85 13.72
12/31/95 14.63 14.27
3/31/96 15.30 14.69
6/30/96 15.80 14.92
9/30/96 16.01 14.90
12/31/96 17.31 15.14
3/31/97 17.36 14.90
6/30/97 18.97 16.83
9/30/97 19.08 16.71
12/31/97 17.14 15.40
3/31/98 19.89 17.67
6/30/98 18.66 17.86
9/30/98 16.29 15.32
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] [Photo of Scott S. Pape]
Jerome A. Castellini 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
For the nine months ended September 30, 1998, the Institutional and Retail
classes of the Loomis Sayles Mid-Cap Growth Fund had total returns of -8.53%,
and -8.70%, respectively, as compared to the Fund's benchmark, the S&P Mid-Cap
400 Index, total return of -6.84%. For the same period, the average mid-cap
fund, as measured by Lipper Analytical Services, had a total return of -9.17%.
PORTFOLIO REVIEW
Following strong economic and stock market results in the first half of 1998,
the third quarter of 1998 turned decidedly negative. The most significant
developments affecting this downturn were the continued deterioration in the
economies, currencies and stock markets of many emerging market countries,
instability in Russia and further pressure on the Japanese financial system.
As in the prior three years, mid-cap stocks lagged in performance relative to
the large capitalization stocks of the S&P 500 Index and the Dow Jones
Industrial Average. However, within the mid-cap classification, the stocks of
companies with perceived lower risk and limited economic sensitivity were the
best performers. Consumer related, health care and selected technology
companies experienced positive returns and the Fund benefited from it's
holdings in Cintas, Kohls, CVS Corp., Compuware and MedImmune. In contrast,
the Fund's overweighted position in the energy sector detracted significantly
from performance, as these stocks experienced declines across-the-board in
excess of 30%. Performance was also impacted negatively by the collapse of the
proposed merger between Ciena Corp. and Tellabs when the value of Ciena stock
fell nearly 80% during the period when negotiations ended.
PORTFOLIO POSITIONING
We continue to favor companies with less economic sensitivity such as health
care, consumer products and energy, and technology companies with inherent
unit growth opportunities. The securities of industrial, basic materials and
capital goods companies continue to be de-emphasized by investors in the
current environment. We believe the key to preserving and growing capital in
this market is in avoiding deflationary businesses and risky balance sheets.
We believe our exposure to domestically-oriented companies in these sectors
positions the Fund well for future recovery in the equity markets.
/s/ Jerome A. Castellini /s/ Scott S. Pape
Jerome A. Castellini Scott S. Pape
<PAGE>
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1998
SINCE
YEAR INCEPTION
TO DATE 1 YEAR (a)
- --------------------------------------------------------------------------------
Loomis Sayles Mid-Cap Growth Fund
(Institutional) -8.53 -10.75 6.80
Loomis Sayles Mid-Cap Growth Fund
(Retail) -8.70 -11.07 6.54
Lipper Mid-Cap Fund Index(b) -7.93 -12.30 4.58
S&P Mid-Cap 400 Index(c) -6.84 - 6.07 12.66
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO SEPTEMBER 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis S&P
As of 12/31/96 10.00 10.00
Period Ended
3/31/97 09.63 09.85
6/30/97 10.72 11.30
9/30/97 12.57 13.12
12/31/97 12.27 13.23
3/31/98 12.98 14.68
6/30/98 13.38 14.37
9/30/98 11.22 12.32
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] [Photo of Gregg D. Watkins]
Dean A. Gulis 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): $3.4 MM
PERFORMANCE SUMMARY
For the nine months ended September 30, 1998, the Institutional and Retail
classes of the Loomis Sayles Mid-Cap Value Fund had total returns of -12.49%,
and -12.66%, respectively, as compared to the Fund's benchmark, the S&P Mid- Cap
400 Index, total return of -6.84%. For the same period, the average mid- cap
fund, as measured by Lipper Analytical Services, had a total return of -9.17%.
PORTFOLIO REVIEW
High volatility and rapid shifts in both sector performance and investor
sentiment have continued to drive the stock market's erratic performance over
the past nine months. Since the beginning of 1995, large capitalization stocks
have outperformed smaller capitalization issues by a significant margin.
Additionally, growing fears of a global economic downturn and decelerating
corporate earnings growth have led investors to prefer traditional growth stocks
on the assumption that their earnings gains will be better sustained should the
current pressure on profits continue. The Fund's performance was negatively
impacted by both of these factors, as the average market capitalization of its
holdings was below that of the benchmark and our value- oriented investment
discipline resulted in a generally underweighted position in high priced sectors
such as technology and health care. Our modest overweights in consumer cyclical
and capital goods issues also weakened returns as both of these sectors lagged
the broader market. Over the course of the period we selectively increased the
Fund's exposure to technology and health care, maintained a successful position
in utilities, and reduced exposure to basic materials, energy, financial and
consumer cyclical issues.
PORTFOLIO POSITIONING
We continue to anticipate that corporate earnings will weaken and that economic
growth expectations will be revised downward. As a result, we have maintained
broad diversification across market economic sectors and industry groups, with
stock selection focused on issues that we believe have a relatively high level
of earnings predictability. We have also positioned the portfolio in a somewhat
defensive fashion, with modestly overweighted positions in the utility and
health care sectors.
/s/ Dean A. Gulis /s/ Gregg D. Watkins
Dean A. Gulis Gregg D. Watkins
<PAGE>
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1998
SINCE
YEAR INCEPTION
TO DATE 1 YEAR (a)
- --------------------------------------------------------------------------------
Loomis Sayles Mid-Cap Value Fund (Institutional) -12.49 -13.03 5.90
Loomis Sayles Mid-Cap Value Fund (Retail) -12.66 -13.29 5.63
Lipper Mid-Cap Fund Index(b) - 7.93 -12.30 4.58
S&P Mid-Cap 400 Index(c) - 6.84 - 6.07 12.66
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO SEPTEMBER 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis S&P
As of 12/31/96 10.00 10.00
Period Ended
3/31/97 10.10 09.85
6/30/97 11.37 11.30
9/30/97 12.71 13.12
12/31/97 12.63 13.23
3/31/98 14.03 14.68
6/30/98 13.65 14.37
9/30/98 11.06 12.32
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 [Photo of [Photo of
Christopher R. Ely] Philip C. Fine] David L. Smith]
Christopher R. Ely Philip C. Fine 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): $18.2 MM
PERFORMANCE SUMMARY
For the nine months ended September 30, 1998, the Institutional and Retail
classes of the Loomis Sayles Small Cap Growth Fund had total returns of -13.16%,
and -13.27%, respectively, as compared to the Fund's benchmark, the Russell 2000
Index, total return of -16.21%. For the same period, the average small cap fund,
as measured by Lipper Analytical Services, had a total return of -16.52%.
PORTFOLIO REVIEW
Technology was one of the sectors that contributed to the Fund's nine-month
performance, but not without some bumps along the way. Early in the year, we
emphasized software and services which we felt were less susceptible to the
economic slowdown overseas. This proved effective as the market punished makers
of hardware in the technology sector. From the wreckage in these industries, we
have been selectively buying in areas that we believe are fundamentally sound
but selling at bargain prices. For the first half of the year, the Fund's
underweighting in the health care sector helped returns as the sector posted
weak performance. However, during the third quarter the health care industry's
defensive characteristics caused it to rebound and our underweighting prevented
the Fund from fully participating in the sector's outperformance. We believe
this trend may continue and have built a market- weight position in stocks such
as Sunrise Assisted Living and MedQuist where we anticipate continued strong
earnings. We have reduced our position in consumer cyclicals such as business
services due to our concerns over the economy. Our positions in the financial
services sector were strong throughout the period although returns were hurt
somewhat when we lowered our exposure prematurely going into the third quarter.
PORTFOLIO POSITIONING
We have maintained the Fund's significant exposure to technology stocks.
Recently, we began to rebuild our positions in the electronics industry,
focusing on the securities of specialty semiconductor chip companies where
competition appears limited and demand is robust. We have also expanded our
investments in the health care industry where we see attractive values in
companies insulated from problems overseas. We continue to stay true to our
approach of buying the securities of small cap companies with strong earnings
growth and rising profitability.
/s/ Christopher R. Ely /s/ Philip C. Fine /s/ David L. Smith
Christopher R. Ely Philip C. Fine David L. Smith
<PAGE>
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1998
SINCE
YEAR INCEPTION
TO DATE 1 YEAR (a)
- --------------------------------------------------------------------------------
Loomis Sayles Small Cap Growth Fund (Institutional) -13.16 -17.37 2.10
Loomis Sayles Small Cap Growth Fund (Retail) -13.27 -17.59 1.90
Lipper Small Cap Fund Index(b) -16.33 -21.21 -2.17
Russell 2000 Index(c) -16.21 -19.02 1.44
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO SEPTEMBER 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis Russell
As of 12/31/96 10.00 10.00
Period Ended
3/31/97 08.51 09.48
6/30/97 10.28 11.02
9/30/97 12.55 12.66
12/31/97 11.94 12.24
3/31/98 13.39 13.47
6/30/98 13.28 12.84
9/30/98 10.37 10.25
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 companies 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] [Photo of Jeffrey C. Petherick]
Mary C. Champagne 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.
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 - 0.92%, Retail - 1.19%,
Admin. - 1.50%
Total Net Assets (all classes): $351.2 MM
PERFORMANCE SUMMARY
For the nine months ended September 30, 1998, the Institutional, Retail and
Admin classes of the Loomis Sayles Small Cap Value Fund had total returns of
- -16.22%, -16.38%, and -16.54%, respectively, as compared to the Fund's
benchmark, the Russell 2000 Index, total return of -16.21%. For the same period,
the average small cap fund, as measured by Lipper Analytical Services, had a
total return of -16.52%.
PORTFOLIO REVIEW
At the beginning of 1998, the Fund was positioned to avoid the securities of
companies whose earnings were exposed to foreign markets in an effort to shield
it from the potential effects of the Asian economic crisis. Our emphasis was on
defensive sectors such as health care, REIT's (Real Estate Investment Trusts)
and consumer staples. The Fund's build-up in defensive areas hurt performance
early in the year as strong corporate earnings helped push the stock market
higher. Our position in energy stocks was also weakened by inventory liquidation
among producer countries and falling economic growth in consumer countries,
particularly Asia. Small cap stocks began to falter earlier than large caps and
the oversupply in the REIT market resulted in poor performance despite the
attractive income these issues provide. However, during the third quarter's hard
fall our growing position in utilities and other defensive sectors helped to
cushion the blow. Our emphasis on small cap stocks with superior liquidity and
high earnings growth, that were selling at a discount to the Russell 2000 Index,
helped the Fund to outperform during the period.
PORTFOLIO POSITIONING
We believe that the portfolio remains broadly diversified with healthy
weightings in all of the sectors of the Russell 2000 Index. As of September 30,
1998, the Fund is overweighted in technology, health care and utilities issues
and underweighted in financial services, capital goods and basic materials
issues. While we are cautious on the market near-term, the significant drop in
prices means there are a tremendous number of values in the small cap area that
we believe represent attractive investment opportunities.
/s/ Mary C. Champagne /s/ Jeffrey C. Petherick
Mary C. Champagne Jeffrey C. Petherick
<PAGE>
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1998
SINCE
YEAR INCEPTION
TO DATE 1 YEAR 3 YEARS 5 YEARS (a)
- --------------------------------------------------------------------------------
Loomis Sayles Small Cap Value Fund
(Institutional) -16.22 -18.32 12.51 11.13 16.39
Loomis Sayles Small Cap Value Fund
(Retail) -16.38 -18.57 N/A N/A 2.85
Loomis Sayles Small Cap Value Fund
(Admin) -16.54 N/A N/A N/A -16.54
Lipper Small Cap Fund Index(b) -16.33 -21.21 3.72 8.16 11.12
Russell 2000 Index(c) -16.21 -19.02 6.86 9.09 11.92
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO SEPTEMBER 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis Russell 2000
As of 5/31/91 10.00 10.00
Period Ended
6/30/91 09.65 09.42
9/30/91 11.21 10.19
12/31/91 12.77 10.77
3/31/92 14.05 11.58
6/30/92 12.19 10.79
9/30/92 12.26 11.10
12/31/92 14.44 12.76
3/31/93 15.37 13.30
6/30/93 15.70 13.59
9/30/93 17.72 14.78
12/31/93 18.01 15.16
3/31/94 17.06 14.76
6/30/94 16.22 14.18
9/30/94 17.06 15.17
12/31/94 16.51 14.89
3/31/95 17.61 15.57
6/30/95 18.51 17.03
9/30/95 21.08 18.72
12/31/95 21.82 19.12
3/31/96 23.47 20.10
6/30/96 25.28 21.10
9/30/96 25.90 21.17
12/31/96 28.44 22.28
3/31/97 27.95 21.12
6/30/97 32.14 24.55
9/30/97 36.76 28.20
12/31/97 35.84 27.26
3/31.98 39.21 30.00
6/30/98 36.88 28.60
9/30/98 30.03 22.84
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 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 companies 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): $1.2 MM
PERFORMANCE SUMMARY
For the nine months ended September 30, 1998, the Institutional and Retail
classes of the Loomis Sayles Strategic Value Fund had total returns of -10.97%,
and -11.14%, respectively, as compared to the Fund's benchmark, the S&P 500
Index, total return of 6.00%. For the same period, the average growth fund, as
measured by Lipper Analytical Services, had a total return of -0.21%.
PORTFOLIO REVIEW
Over the past nine months, the erratic behavior of the equity markets has taken
its toll on the performance of the Strategic Value Fund. Losses in stocks such
as basic materials, capital goods and transportation were exacerbated by selling
that was based more on investor emotions than on the strengths or weaknesses of
individual companies. As the year progressed, many investors rotated into
defensive issues such as utilities, telecommunication services, consumer staples
and drugs. While our underweighting of these sectors negatively affected
performance, we have avoided them because of their rich valuations and/or weak
earnings outlook. We continue to underweight these groups because we believe
stocks in other sectors offer much greater potential for significant long-term
gains.
The Fund's returns continued to be weakened by the market's bias towards large
capitalization stocks. These securities are selling at valuations well above the
upper end of their historical range, which makes them susceptible to significant
declines. Earnings projections for many blue chip multinational companies have
recently been reduced, proving that they are not immune to global turmoil. We
continue to avoid these stocks because we believe their prices will be at risk
when investors realize how much they are paying for increasingly unsure growth
prospects.
PORTFOLIO POSITIONING
While the emotional selling in the marketplace has hurt short-term performance
for the Fund, it has also created opportunities to purchase high quality
companies at significant discounts to their true underlying value. We believe
that the Fund is well positioned to outperform the market given that we own
companies that are leaders in their respective industries, have improving
fundamentals, and are selling at significant discounts to the overall market and
to their historical averages.
/s/ Philip J. Schettewi
Philip J. Schettewi
<PAGE>
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1998
SINCE
YEAR INCEPTION
TO DATE 1 YEAR (a)
- -------------------------------------------------------------------------------
Loomis Sayles Strategic Value Fund (Institutional) -10.97 -18.40 3.71
Loomis Sayles Strategic Value Fund (Retail) -11.14 -18.63 3.45
Lipper Growth Fund Index(b) 2.38 3.07 16.73
S&P 500 Index(c) 6.00 9.05 21.88
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO SEPTEMBER 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis S&P
As of 12/31/96 10.00 10.00
Period Ended
3/31/97 09.98 10.27
6/30/97 11.63 12.06
9/30/97 13.06 12.96
12/31/97 11.97 13.34
3/31/98 13.52 15.19
6/30/98 13.25 15.70
9/30/98 10.66 14.14
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>
- --------------------------------------------------------------------------------
FUND AND MANAGER REVIEW
- --------------------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND
- -------------------------------------------------------------------------------
[Photo of Daniel J. Fuss] [Photo of E. John deBeer]
Daniel J. Fuss E. John deBeer
[Photo of Paul H. Drexler] [Photo of Quentin P. Faulkner]
Paul H. Drexler 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): $5.0 MM
PERFORMANCE SUMMARY
For the nine months ended September 30, 1998, the Institutional and Retail
classes of the Loomis Sayles Worldwide Fund had total returns of -10.85% and
- -11.16%, respectively, as compared to the Fund's benchmark, the S&P 500 Index,
total return of 6.00%. For the same period, the average global flex fund, as
measured by Lipper Analytical Services, had a total return of -0.88%.
PORTFOLIO REVIEW
The past nine months have been a difficult period for the Worldwide Fund. At the
beginning of 1998, we shifted approximately 20% of the portfolio's assets from
U.S. equities to U.S. bonds, and by the end of January, U.S. and foreign bonds
represented 55% of the portfolio. This asset change proved to be favorable as
U.S. and foreign equities experienced high volatility and weakened performance
throughout the year. However, good stock selection allowed the Fund's U.S.
equities to post a nine-month return of 12.30% versus the S&P 500 Index return
of 6.00%. As part of the same January allocation, we increased the Fund's
holdings in Asia and other emerging markets, which proved to be far too early.
Foreign equities had a return of -24.91%, and foreign bonds had a return of
- -8.02%. These negative returns were consistent with the extreme volatility of
the Asian and other emerging markets. The Fund's U.S. bonds were largely
invested in high yield bonds, and the U.S. bond return of -2.50% is consistent
with the returns posted by the U.S. high yield market.
PORTFOLIO POSITIONING
Despite the Fund's weak returns, we are continuing to adhere to a value-based
investment discipline. Broadly speaking, the fundamentals of the countries and
companies we hold have changed little since the time of purchase and we continue
to have a positive outlook. It is our opinion, that price declines have made
what we believed to be good values even better. At September 30, 1998 the Fund
had 18.5% of portfolio invested in U.S. equities, 36.7% in U.S. bonds, 27.9% in
foreign equities, and 11.4% in foreign bonds.
/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 SEPTEMBER 30, 1998
SINCE
YEAR INCEPTION
TO DATE 1 YEAR (a)
- --------------------------------------------------------------------------------
Loomis Sayles Worldwide Fund (Institutional) -10.85 -17.84 0.33
Loomis Sayles Worldwide Fund (Retail) -11.16 -18.15 - 4.78
Lipper Global Flex Portfolio Index(b) - 3.18 - 5.51 7.07
S&P 500 Index(c) 6.00 9.05 21.82
CUMULATIVE PERFORMANCE - MAY 31, 1996 TO SEPTEMBER 30, 1998
[A line graph depicting the following plot points appears here.]
Loomis S&P
As of 5/31/96 10.00 10.00
Period Ended
6/30/96 10.03 10.04
9/30/96 10.25 10.35
12/31/96 10.83 11.21
3/31/97 10.83 11.51
6/30/97 11.38 13.52
9/30/97 12.16 14.53
12/31/97 11.21 14.95
3/31/98 12.37 17.03
6/30/98 11.20 17.60
9/30/98 09.99 15.85
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 SEPTEMBER 30, 1998
SHARES VALUE (a)
- -------------------------------------------------------------------------------
COMMON STOCKS -- 95.0% OF NET ASSETS
Aerospace -- 1.9%
Northrop Grumman Corp. .......................... 17,500 $ 1,277,500
-----------
Auto & Related -- 1.2%
General Motors Corp. ............................ 13,000 710,938
TRW, Inc. ....................................... 1,800 79,875
-----------
790,813
-----------
Banks/Savings & Loans -- 7.6%
Chase Manhattan Corp. ........................... 21,324 922,263
First Chicago NBD Corp. ......................... 8,200 561,700
Fleet Financial Group, Inc. ..................... 21,500 1,578,906
National City Corp. ............................. 16,300 1,074,781
PNC Bank Corp. .................................. 23,000 1,035,000
-----------
5,172,650
-----------
Beverages -- 1.9%
Anheuser-Busch Companies, Inc. .................. 24,000 1,296,000
-----------
Chemicals -- Major -- 0.9%
Praxair, Inc. ................................... 18,000 588,375
-----------
Chemicals -- Specialty -- 0.7%
E.I. du Pont DeNemours & Co. .................... 7,900 443,388
-----------
Commercial Services -- 1.5%
Viad Corp. ...................................... 39,000 1,045,688
-----------
Communications Equipment -- 0.8%
Harris Corp. .................................... 16,000 512,000
-----------
Computer Hardware -- 4.8%
Hewlett-Packard Co. ............................. 12,600 667,012
International Business Machines Corp. ........... 10,800 1,382,400
Sun Microsystems, Inc. (b) ...................... 24,000 1,195,500
-----------
3,244,912
-----------
Data Processing Services -- 3.0%
Dun & Bradstreet Corp. .......................... 35,000 945,000
First Data Corp. ................................ 47,000 1,104,500
-----------
2,049,500
-----------
Electronics -- 5.9%
Litton Industries, Inc. (b) ..................... 19,000 1,140,000
Philips Electronics NV .......................... 20,000 1,067,500
Raytheon Co. .................................... 32,800 1,769,150
-----------
3,976,650
-----------
Financial Services -- 3.2%
Bear Stearns Companies, Inc. .................... 11,500 355,781
Finova Group, Inc. .............................. 24,924 1,244,642
Morgan Stanley Dean Witter & Co. ................ 14,000 602,875
-----------
2,203,298
-----------
Food -- Packaged & Miscellaneous -- 3.8%
ConAgra, Inc. ................................... 49,100 1,322,631
Sara Lee Corp. .................................. 23,500 1,269,000
-----------
2,591,631
-----------
Forest Products -- 2.1%
Georgia Pacific Corp. ........................... 13,500 615,938
Georgia Pacific Timber Group .................... 41,000 796,937
-----------
1,412,875
-----------
Freight Transportation -- 0.9%
Ryder System, Inc. .............................. 25,800 641,775
-----------
Health Care -- Drugs -- 2.2%
Abbott Laboratories ............................. 35,000 1,520,313
-----------
Health Care -- Services -- 2.5%
Tenet Healthcare Corp. (b) ...................... 60,000 1,725,000
-----------
Home Products -- 1.3%
Premark International, Inc. ..................... 32,500 912,031
-----------
Housing & Building Materials -- 2.7%
Armstrong World Industries, Inc. ................ 18,100 968,350
Black & Decker Corp. ............................ 21,000 874,125
-----------
1,842,475
-----------
Imaging -- 2.0%
Xerox Corp. ..................................... 15,600 1,322,100
-----------
Insurance -- 4.3%
Ace Ltd. ........................................ 41,450 1,243,500
Aetna, Inc. ..................................... 10,000 695,000
Allstate Corp. .................................. 24,096 1,004,502
-----------
2,943,002
-----------
Leisure -- 1.8%
Hasbro, Inc. .................................... 41,000 1,209,500
-----------
Machinery -- 1.4%
Deere & Co. ..................................... 32,000 968,000
-----------
Manufacturing -- 3.2%
Eaton Corp. ..................................... 16,500 1,034,344
Tenneco, Inc. ................................... 34,000 1,117,750
-----------
2,152,094
-----------
Natural Gas -- 1.7%
Columbia Energy Group ........................... 19,800 1,160,775
-----------
Oil & Gas Drilling Equipment -- 1.4%
BJ Services Co. (b) ............................. 28,900 469,625
Cooper Cameron Corp. (b) ........................ 17,200 483,750
-----------
953,375
-----------
Oil & Gas -- Major Integrated -- 8.0%
British Petroleum Plc ADR ....................... 16,965 1,480,196
Exxon Corp. ..................................... 23,400 1,642,388
Mobil Corp. ..................................... 12,300 934,031
USX Marathon Group .............................. 38,000 1,346,625
-----------
5,403,240
-----------
Personal Care -- 1.7%
Kimberly Clark Corp. ............................ 29,000 1,174,500
-----------
Publishing -- 0.9%
McGraw-Hill Cos., Inc. .......................... 7,900 626,075
-----------
Real Estate Investment Trusts -- 1.7%
Health Care Property Investments, Inc. .......... 18,600 613,800
Meditrust Corp. ................................. 30,025 512,302
-----------
1,126,102
-----------
Retail -- Food -- 0.7%
Kroger Co. (b) .................................. 9,500 475,000
-----------
Retail -- General -- 3.8%
Federated Department Stores, Inc. (b) ........... 36,000 1,309,500
Sears Roebuck & Co. ............................. 29,000 1,281,437
-----------
2,590,937
-----------
Telecommunications -- 8.5%
American Home Products Corp. .................... 21,000 1,099,875
Ameritech Corp. ................................. 28,800 1,364,400
Bell Atlantic Corp. ............................. 24,400 1,181,875
BellSouth Corp. ................................. 17,700 1,331,925
Century Telephone Enterprises, Inc. ............. 12,800 604,800
GTE Corp. ....................................... 4,000 220,000
-----------
5,802,875
-----------
Tobacco -- 1.5%
Philip Morris Cos., Inc. ........................ 22,500 1,036,406
-----------
Utilities -- 3.5%
Consolidated Edison, Inc. ....................... 19,000 990,375
Pacificorp ...................................... 27,000 518,063
Pinnacle West Capital Corp. ..................... 19,700 882,806
-----------
2,391,244
-----------
TOTAL COMMON STOCKS
(Identified Cost $61,065,132) ................. 64,582,099
-----------
<PAGE>
FACE
AMOUNT VALUE (a)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 9.0% of Net Assets
Associates Corp. of North America,
5.600%, 10/01/98 ............................ $3,289,921 $ 3,289,921
Chevron USA Inc., 5.500%, 10/01/98 ............ 2,800,000 2,800,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $6,089,921)................. 6,089,921
-----------
TOTAL INVESTMENTS -- 104.0%
(IDENTIFIED COST $67,155,053) (c) ........... 70,672,020
Liabilities, Less Cash and Other Assets --
(4.0%) (2,729,271)
-----------
NET ASSETS -- 100% ............................ $67,942,749
===========
(a) See Note 1.
(b) Non-income producing security.
(c) At September 30, 1998, the net unrealized appreciation on investments b
cost of $67,155,742 for federal income tax purposes was as follows:
Aggregate grealized appreciation for all securities in which there is an
excess of value ovcost and aggregate gross unrealized depreciation for all
securities in which there is an ef tax cost over value were $8,568,034 and
$5,051,756 respectively, resulting in net unr appreciation of $3,516,278.
Key to Abbreviations:
ADR: American Depositary Receipt.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1998
SHARES VALUE (a)
- -------------------------------------------------------------------------------
COMMON STOCKS -- 92.3% of Net Assets
Broadcasting -- 2.5%
Comcast Corp. ................................... 13,500 $ 629,438
-----------
Chemicals -- Major -- 4.6%
Monsanto Co. .................................... 20,400 1,150,050
-----------
Communications Equipment -- 6.8%
Ascend Communications, Inc. (b) ................. 14,200 646,100
Ciena Corp. (b) ................................. 38,900 556,756
Cisco Systems, Inc. (b) ......................... 8,100 500,681
-----------
1,703,537
-----------
Computer Software & Services -- 8.5%
America Online, Inc. (b) ........................ 3,300 367,125
Compuware Corp. (b) ............................. 10,800 635,850
Fiserv, Inc. (b) ................................ 4,800 221,100
HBO & Co. ....................................... 17,700 511,087
Paychex, Inc. ................................... 7,850 404,766
-----------
2,139,928
-----------
Computers -- 3.0%
Dell Computer Corp. (b) ......................... 11,600 762,700
-----------
Entertainment -- 3.9%
Time Warner, Inc. ............................... 11,200 980,700
-----------
Financial Services -- 2.2%
Associates First Capital Corp. .................. 5,100 332,775
MGIC Investment Corp. ........................... 5,800 213,875
-----------
546,650
-----------
Government Agencies -- 3.1%
Federal National Mortgage Association ........... 12,300 790,275
-----------
Health Care -- Biotechnology -- 1.8%
MedImmune, Inc. (b) ............................. 6,500 420,875
Oncor, Inc. (b) ................................. 333,000 41,625
-----------
462,500
-----------
Health Care -- Drugs -- 6.0%
Eli Lilly & Co. ................................. 6,000 469,875
Pfizer, Inc. .................................... 9,900 1,048,781
-----------
1,518,656
-----------
Health Care -- Medical Technology -- 5.0%
Allegiance Corp. ................................ 33,600 999,600
Guidant Corp. ................................... 3,600 267,300
-----------
1,266,900
-----------
Health Care -- Services -- 0.8%
Healthsouth Corp. (b) ........................... 18,000 190,125
-----------
Insurance -- 2.0%
American International Group, Inc. .............. 6,587 507,199
-----------
Oil & Gas -- 1.6%
EXEL Ltd. ....................................... 6,200 390,600
-----------
Oil & Gas Drilling Equipment -- 6.6%
Noble Drilling Corp. (b) ........................ 26,100 384,975
Unit Corp. (b) .................................. 259,300 1,264,087
-----------
1,649,062
-----------
Oil & Gas Exploration -- 10.0%
Anadarko Petroleum Corp. ........................ 47,700 1,875,206
Cross Timbers Oil Co. ........................... 32,600 491,038
Ocean Energy, Inc. (b) .......................... 12,482 163,826
-----------
2,530,070
-----------
Restaurants -- 2.9%
Starbucks Corp. (b) ............................. 20,500 741,844
-----------
Retail -- Food & Drug -- 5.7%
CVS Corp. ....................................... 17,600 771,100
Walgreen Co. .................................... 15,200 669,750
-----------
1,440,850
-----------
Retail -- General -- 5.6%
Fastenal Co. .................................... 4,400 110,000
Kohl's Corp. (b) ................................ 10,900 425,100
Wal-Mart Stores, Inc. ........................... 15,900 868,538
-----------
1,403,638
-----------
Retail -- Specialty -- 6.2%
Bed Bath & Beyond, Inc. (b) ..................... 21,000 490,875
Borders Group, Inc. (b) ......................... 16,500 367,125
Home Depot, Inc. ................................ 17,700 699,150
-----------
1,557,150
-----------
Telecommunications -- 3.5%
MCI WorldCom, Inc. (b) .......................... 17,900 874,863
-----------
TOTAL COMMON STOCKS
(Identified Cost $23,112,520) ................... 23,236,735
-----------
FACE
AMOUNT
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 0.5% OF NET ASSETS
Repurchase Agreement with State Street Bank
and Trust Co., dated 9/30/98 at 4.750% to
be repurchased at $120,016 on 10/01/98
collateralized by $90,000 U.S. Treasury
Bond, 11.625% due 11/15/04 with a value
of $127,547 ................................... $120,000 $ 120,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $120,000) .................... 120,000
-----------
TOTAL INVESTMENTS -- 92.8%
(IDENTIFIED COST $23,232,520) (c) ............. 23,356,735
Cash and Other Assets, Less
Liabilities -- 7.2% ....................... 1,823,085
-----------
NET ASSETS -- 100% ............................ $25,179,820
===========
(a) See Note 1.
(b) Non-income producing security.
(c) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $23,753,733 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 $3,033,316 and $3,430,314, respectively,
resulting in net unrealized depreciation of $396,998.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1998
SHARES (a) VALUE (b)
- -------------------------------------------------------------------------------
COMMON STOCKS -- 94.2% of Net Assets
Australia -- 2.9%
Brambles Industries Ltd. ........................ 63,000 $ 1,359,881
Southcorp Ltd. .................................. 235,000 654,054
-----------
2,013,935
-----------
Belgium -- 0.8%
Cimenteries CBR ................................. 7,000 539,320
-----------
Brazil -- 0.2%
SABESP .......................................... 1,800,000 111,907
-----------
Canada -- 6.1%
Bombardier, Inc. ................................ 86,000 947,130
Canadian National Railway Co. (c) ............... 16,750 754,900
Northern Telecom Ltd. ........................... 19,400 624,432
Petro-Canada .................................... 58,300 731,879
Royal Bank of Canada ............................ 20,000 811,564
Torstar Corp. ................................... 30,000 324,495
-----------
4,194,400
-----------
Denmark -- 7.2%
Carlsberg A/S ................................... 22,000 1,351,075
Codan Forsikring ................................ 2,895 365,060
Sophus Berendsen ................................ 20,000 774,742
Tryg-Baltica Forsikring A/S ..................... 43,250 1,123,731
Unidanmark A/S .................................. 18,500 1,340,052
-----------
4,954,660
-----------
France -- 9.1%
Bank Nationale de Paris ......................... 13,500 723,240
Elf Aquitaine SA ................................ 9,000 1,110,575
Guyenne et Gascogne SA .......................... 1,000 424,122
L' Air Liquide .................................. 6,412 1,016,796
Michelin ........................................ 17,000 667,881
Pernod Ricard ................................... 14,000 1,031,287
St. Gobain ...................................... 9,500 1,260,492
-----------
6,234,393
-----------
Germany -- 6.7%
Henkel KGAA (Preferred) ......................... 26,500 2,008,189
Lufthansa AG .................................... 50,000 988,353
MAN AG (Preferred) .............................. 3,600 735,112
Volkswagen AG ................................... 12,000 865,894
-----------
4,597,548
-----------
Italy -- 9.0%
Credito Italiano ................................ 243,000 1,012,837
Edison Spa ...................................... 140,000 1,065,277
ENI Spa ......................................... 215,000 1,318,148
Ericsson Spa .................................... 19,900 698,034
Istituto Nazionale delle Assicurazioni - INA .... 300,000 763,336
Telecom Italia Spa (Savings Shares) ............. 279,000 1,334,447
-----------
6,192,079
-----------
Japan -- 9.6%
Canon, Inc. ..................................... 45,000 912,485
Daiwa House Industries Co. Ltd. ................. 75,000 680,795
Fuji Photo Film Co. ............................. 30,000 1,032,173
Nichii Gakkan Co. (c) ........................... 20,000 644,193
Nintendo Co. Ltd. ............................... 8,000 751,949
Nippon Telegraph & Telephone Corp. .............. 190 1,383,917
Uny Co. Ltd. .................................... 73,000 1,143,589
-----------
6,549,101
-----------
Netherlands -- 4.5%
Grolsch ......................................... 36,900 1,007,067
Hollandsche Beton Groep ......................... 35,300 432,968
Koninklijke KPN NV .............................. 42,000 1,297,900
Koninklijke Pakhoed ............................. 15,000 338,493
-----------
3,076,428
-----------
New Zealand -- 0.7%
Air New Zealand Ltd., Class B ................... 269,000 212,701
Nuplex Industries Ltd. .......................... 249,940 272,680
-----------
485,381
-----------
Portugal -- 8.2%
BPI ............................................. 45,000 1,241,977
Brisa-Auto Estradas de Portugal SA .............. 29,000 1,322,685
Electricidade Portugal .......................... 60,000 1,381,610
Engil - SGPS .................................... 77,611 566,553
Portugal Telecom SA ............................. 30,000 1,092,709
-----------
5,605,534
-----------
Spain -- 6.5%
Azucarera Ebro Agricolas SA ..................... 31,295 745,250
Banco Santander SA .............................. 882 13,360
Fomento de Construction y Contratas SA .......... 29,000 1,354,634
Iberdrola SA .................................... 85,000 1,419,312
Repsol SA ....................................... 22,325 943,742
-----------
4,476,298
-----------
Switzerland -- 4.6%
Jelmoli Holdings AG ............................. 600 699,797
Novartis AG ..................................... 1,050 1,687,880
Schweizerische Rueckversicherungs-Gesellschaft .. 400 795,422
-----------
3,183,099
-----------
United Kingdom -- 18.1%
Anglian Water ................................... 72,360 1,166,228
Anglian Water, Class B .......................... 77,529 68,540
Boots Co. Plc ................................... 80,000 1,377,760
British Aerospace Plc ........................... 175,000 1,062,137
British Petroleum Co. ........................... 74,000 1,132,266
Commercial Union ................................ 75,000 1,162,230
FKI Plc ......................................... 358,333 688,398
J Sainsbury Plc ................................. 165,000 1,580,710
Lloyds TSB Group ................................ 95,000 1,064,347
London International Group Plc .................. 90,000 241,754
Rolls-Royce Plc ................................. 260,000 897,312
Scottish & Newcastle ............................ 70,000 856,850
Scottish Hydro .................................. 97,000 1,088,404
-----------
12,386,936
-----------
TOTAL COMMON STOCKS
(Identified Cost $70,072,985) ................. 64,601,019
-----------
RIGHTS -- 0.0% of Net Assets
Thailand -- 0.0%
Industrial Finance Corp. of Thailand (c) ...... 38,500 0
-------------
TOTAL RIGHTS
(Identified Cost $0) ........................ 0
-------------
FACE
AMOUNT
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 3.7% of Net Assets
Repurchase Agreement with State Street Bank
and Trust Co., dated 9/30/98 at 4.750% to
be repurchased at $2,561,338 on 10/01/98
collateralized by $2,170,000 U.S. Treasury
Bond, 6.500% due 11/15/26 with a value
of $2,612,476 ................................. $2,561,000 $ 2,561,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $2,561,000)................. 2,561,000
-----------
TOTAL INVESTMENTS -- 97.9%
(IDENTIFIED COST $72,633,985) (d) ........... 67,162,019
Cash and Other Assets, Less Liabilities --
2.1% .................................... 1,452,036
-----------
NET ASSETS -- 100% ............................ $68,614,055
===========
(a) Ordinary shares unless otherwise noted.
(b) See Note 1.
(c) Non-income producing security.
(d) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $72,633,985 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 $3,539,389 and $9,011,355, respectively,
resulting in net unrealized depreciation of $5,471,966.
Ten Largest Sector Holdings at September 30, 1998
as a Percentage of Net Assets
Telecommunications 9.4%
Building Materials & Construction 9.3%
Oil & Gas 9.1%
Utilities 7.3%
Banking & Finance 7.2%
Beverages 6.2%
Insurance 6.1%
Retail 5.3%
Transportation 3.9%
Health Care 3.8%
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES MID-CAP GROWTH FUND
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1998
SHARES VALUE (a)
- -------------------------------------------------------------------------------
COMMON STOCKS -- 96.0% OF NET ASSETS
Business Services -- 2.8%
ABR Information Services, Inc. (b) .............. 1,100 $ 15,056
Cintas Corp. .................................... 900 45,113
----------
60,169
----------
Chemicals -- Major -- 3.4%
Monsanto Co. .................................... 1,300 73,287
----------
Communications Equipment -- 7.3%
Ascend Communications, Inc. (b) ................. 1,000 45,500
Ciena Corp. (b) ................................. 1,600 22,900
Cisco Systems, Inc. (b) ......................... 825 50,995
Lucent Technologies, Inc. ....................... 550 37,985
----------
157,380
----------
Computer Software & Services -- 21.3%
America Online, Inc. (b) ........................ 450 50,063
Compuware Corp. (b) ............................. 1,300 76,537
Electronic Arts (b) ............................. 800 35,100
Fiserv, Inc. (b) ................................ 1,150 52,972
HBO & Co. ....................................... 1,800 51,975
Network Associates, Inc. (b) .................... 1,000 35,500
Paychex, Inc. ................................... 1,700 87,656
SunGard Data Systems, Inc. (b) .................. 1,300 40,950
Symantec Corp. (b) .............................. 2,150 28,353
----------
459,106
----------
Financial Services -- 1.2%
MGIC Investment Corp. ........................... 700 25,813
----------
Health Care -- Biotechnology -- 2.9%
MedImmune, Inc. (b) ............................. 900 58,275
Oncor, Inc. (b) ................................. 25,900 3,237
----------
61,512
----------
Health Care -- Drugs -- 2.2%
Pfizer, Inc. .................................... 450 47,672
----------
Health Care -- Medical Technology -- 8.6%
Allegiance Corp. ................................ 2,800 83,300
Arterial Vascular Engineering, Inc. (b) ......... 1,250 46,250
Steris Corp. (b) ................................ 2,000 56,500
----------
186,050
----------
Health Care -- Services -- 0.9%
Healthsouth Corp. (b) ........................... 1,900 20,069
----------
Oil & Gas -- 2.9%
EXEL Ltd. ....................................... 1,000 63,000
----------
Oil & Gas Drilling Equipment -- 12.6%
Cooper Cameron Corp. (b) ........................ 3,600 101,250
Rowan Companies, Inc. (b) ....................... 6,300 70,481
Unit Corp. (b) .................................. 20,600 100,425
----------
272,156
----------
Oil & Gas Exploration -- 15.0%
Anadarko Petroleum Corp. ........................ 3,800 149,387
Cross Timbers Oil Co. ........................... 7,650 115,228
Ocean Energy, Inc. (b) .......................... 4,406 57,829
----------
322,444
----------
Restaurants -- 3.5%
Starbucks Corp. (b) ............................. 2,100 75,994
----------
Retail -- Food & Drug -- 2.8%
CVS Corp. ....................................... 1,400 61,338
----------
Retail -- General -- 3.3%
Kohl's Corp. (b) ................................ 1,800 70,200
----------
Retail -- Specialty -- 5.3%
Bed Bath & Beyond, Inc. (b) ..................... 2,000 46,750
Borders Group, Inc. (b) ......................... 1,100 24,475
Home Depot, Inc. ................................ 1,100 43,450
----------
114,675
----------
TOTAL COMMON STOCKS
(Identified Cost $2,174,033) .................. 2,070,865
----------
TOTAL INVESTMENTS -- 96.0%
(IDENTIFIED COST $2,174,033) (c) .............. 2,070,865
Cash and Other Assets, Less
Liabilities -- 4.0% ....................... 87,005
----------
NET ASSETS -- 100% .............................. $2,157,870
==========
(a) See Note 1.
(b) Non-income producing security.
(c) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $2,177,889 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 $267,554 and $374,578, respectively, resulting in net
unrealized depreciation of $107,024.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1998
SHARES VALUE (a)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 98.4% OF NET ASSETS
Advertising -- 0.9%
Young & Rubicam, Inc. (b) ....................... 1,050 $ 29,794
----------
Aerospace/Defense -- 4.5%
Gencorp, Inc. ................................... 1,800 34,650
Gulfstream Aerospace Corp. (b) .................. 1,500 60,375
Northrop Grumman Corp. .......................... 800 58,400
----------
153,425
----------
Auto & Related -- 2.7%
Hertz Corp. ..................................... 2,200 91,025
----------
Banks/Savings & Loans -- 8.3%
AmSouth Bancorp ................................. 1,850 63,131
Charter One Financial, Inc. ..................... 2,200 54,725
FirstMerit Corp. ................................ 1,820 42,656
M&T Bank Corp. .................................. 100 46,100
Provident Financial Group, Inc. ................. 900 36,000
Trustmark Corp. ................................. 2,500 38,750
----------
281,362
----------
Broadcasting -- 2.3%
United Video Satellite Group, Inc. (b) .......... 5,400 79,988
----------
Chemicals -- Specialty -- 3.4%
Ecolab, Inc. .................................... 2,600 73,937
Solutia, Inc. ................................... 1,800 40,613
----------
114,550
----------
Computer Hardware -- 4.9%
Apple Computer, Inc. (b) ........................ 2,600 99,125
Cabletron Systems, Inc. (b) ..................... 6,175 69,469
----------
168,594
----------
Computer Software & Services -- 4.7%
Symantec Corp. (b) .............................. 4,300 56,706
Synopsys, Inc. (b) .............................. 2,000 66,625
Wang Laboratories, Inc. (b) ..................... 1,900 36,813
----------
160,144
----------
Electronics -- 4.2%
Advanced Micro Devices, Inc. (b) ................ 3,000 55,687
Altera Corp. (b) ................................ 1,200 42,150
Novellus Systems, Inc. (b) ...................... 1,760 46,200
----------
144,037
----------
Financial Services -- 5.8%
A.G. Edwards, Inc. .............................. 700 21,219
Allmerica Financial Corp. ....................... 600 35,775
Countrywide Credit Industries, Inc. ............. 1,025 42,665
First Plus Financial Group, Inc. (b) ............ 1,300 14,869
Metris Companies, Inc. .......................... 800 37,300
Reliastar Financial Corp. ....................... 1,195 46,605
----------
198,433
----------
Food -- Packaged & Miscellaneous -- 2.1%
Smithfield Foods, Inc. (b) ...................... 4,000 70,750
----------
Health Care -- Medical Supplies -- 1.1%
PSS World Medical, Inc. (b) ..................... 2,000 37,000
----------
Health Care -- Medical Technology -- 6.3%
Arterial Vascular Engineering, Inc. (b) ......... 1,700 62,900
Invacare Corp. .................................. 1,600 37,600
Steris Corp. (b) ................................ 4,000 113,000
----------
213,500
----------
Health Care -- Services -- 1.9%
AmeriSource Health Corp. (b) .................... 1,200 65,325
----------
Home Builders -- 2.8%
Champion Enterprises, Inc. (b) .................. 4,175 97,069
----------
Insurance -- 2.3%
Protective Life Corp. ........................... 1,150 41,400
Reliance Group Holdings, Inc. ................... 2,650 37,266
----------
78,666
----------
Manufacturing -- 2.6%
MascoTech, Inc. ................................. 3,000 54,000
Pentair, Inc. ................................... 1,100 35,475
----------
89,475
----------
Metals -- 1.6%
USEC, Inc. (b) .................................. 3,500 54,031
----------
Natural Gas -- 3.0%
Columbia Energy Group ........................... 1,100 64,487
MCN Energy Group, Inc. .......................... 2,300 39,244
----------
103,731
----------
Oil & Gas -- 1.2%
Kerr-McGee Corp. ................................ 900 40,950
----------
Oil & Gas Drilling Equipment -- 2.8%
Cooper Cameron Corp. (b) ........................ 2,225 62,578
Noble Drilling Corp. (b) ........................ 2,267 33,438
----------
96,016
----------
Oil & Gas Refining -- 1.6%
Tosco Corp. ..................................... 2,608 56,072
----------
Packaging -- 1.0%
Sealed Air Corp. (b) ............................ 1,100 35,063
----------
Paper Products -- 1.0%
Bowater, Inc. ................................... 1,000 35,625
----------
Refrigeration Systems -- 1.0%
Hussmann International, Inc. .................... 2,500 35,469
----------
Restaurants -- 1.8%
Wendy's International, Inc. ..................... 2,800 62,125
----------
Retail -- Food -- 2.1%
Food Lion, Inc. ................................. 6,600 70,125
----------
Retail -- Specialty -- 6.7%
CDW Computer Centers, Inc. (b) .................. 600 31,950
Claire's Stores, Inc. ........................... 2,800 50,400
Jostens, Inc. ................................... 2,500 51,875
Saks, Inc. (b) .................................. 2,000 44,875
Zale Corp. (b) .................................. 1,900 48,687
----------
227,787
----------
Telecommunications -- 0.6%
Century Telephone Enterprises, Inc. ............. 400 18,900
----------
Textile & Apparel -- 1.6%
Tommy Hilfiger Corp. (b) ........................ 1,300 53,300
----------
Utilities -- 9.8%
BEC Energy ...................................... 1,300 56,631
Conectiv, Inc. .................................. 3,000 68,437
Energy East Corp. ............................... 1,100 56,100
Florida Progress Corp. .......................... 800 34,650
Peco Energy Co. ................................. 2,000 73,125
Washington Water Power Co. ...................... 2,200 43,588
----------
332,531
----------
Waste Management -- 1.8%
Browning Ferris Industries Inc. ................. 2,000 60,500
----------
TOTAL COMMON STOCKS
(Identified Cost $3,736,402) .................. 3,355,362
----------
TOTAL INVESTMENTS -- 98.4%
(IDENTIFIED COST $3,736,402) (c) .............. 3,355,362
Cash and Other Assets, Less
Liabilities -- 1.6% .................... 55,945
----------
NET ASSETS -- 100% ............................ $3,411,307
==========
(a) See Note 1.
(b) Non-income producing security.
(c) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $3,762,201 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 $106,798 and $513,637, respectively, resulting in net
unrealized depreciation of $406,839.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND
- -------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1998
SHARES VALUE (a)
- -------------------------------------------------------------------------------
COMMON STOCKS -- 94.7% OF NET ASSETS
Advertising -- 2.1%
Lamar Advertising Co. (b) ....................... 13,650 $ 382,200
-----------
Agricultural -- 1.2%
Delta & Pine Land Co. ........................... 5,165 227,260
-----------
Banks/Savings & Loans -- 6.1%
Astoria Financial Corp. ......................... 6,800 286,450
FirstFed Financial Corp. (b) .................... 21,300 363,431
Peoples Heritage Financial Group, Inc. .......... 14,600 261,888
Staten Island Bancorp, Inc. ..................... 11,300 203,400
-----------
1,115,169
-----------
Broadcasting -- 2.4%
Citadel Communications Corp. (b) ................ 9,500 194,156
Metro Networks, Inc. (b) ........................ 6,800 249,050
-----------
443,206
-----------
Business Services -- 7.3%
Abacus Direct Corp. (b) ......................... 9,200 469,200
Ha Lo Industries, Inc. (b) ...................... 14,200 415,350
Lason, Inc. (b) ................................. 8,650 443,312
-----------
1,327,862
-----------
Communications Equipment -- 1.9%
Uniphase Corp. (b) .............................. 8,500 348,500
-----------
Computer Hardware -- 2.5%
Network Appliance, Inc. (b) ..................... 9,050 458,156
-----------
Computer Software & Services -- 19.4%
Ciber, Inc. (b) ................................. 15,500 312,906
Concord Communications, Inc. (b) ................ 8,300 329,925
Diamond Technology Partners, Inc. (b) ........... 17,500 288,750
Documentum, Inc. (b) ............................ 9,900 392,288
Geotel Communications Corp. (b) ................. 20,800 559,000
Inktomi Corp. (b) ............................... 2,700 203,175
Lernout & Hauspie Speech Products NV (b) ........ 2,300 92,431
Lycos, Inc. (b) ................................. 12,400 419,275
Sapient Corp. (b) ............................... 13,500 460,687
Wind River Systems, Inc. (b) .................... 10,000 472,500
-----------
3,530,937
-----------
Electronics -- 9.7%
Applied Micro Circuits Corp. (b) ................ 8,500 126,438
Novellus Systems, Inc. (b) ...................... 7,200 189,000
PMC Sierra, Inc. (b) ............................ 10,900 347,438
QLogic Corp. (b) ................................ 5,550 362,137
Sanmina Corp. (b) ............................... 7,200 202,500
Sipex Corp. (b) ................................. 21,550 546,831
-----------
1,774,344
-----------
Financial Services -- 2.2%
Healthcare Financial Partners, Inc. (b) ......... 9,700 407,400
-----------
Food -- Packaged & Miscellaneous -- 2.0%
Hain Food Group, Inc. (b) ....................... 24,300 364,500
-----------
Health Care -- Biotechnology -- 3.4%
MedImmune, Inc. (b) ............................. 4,900 317,275
Sepracor, Inc. (b) .............................. 4,700 309,025
-----------
626,300
-----------
Health Care -- Services -- 7.3%
MedQuist, Inc. (b) .............................. 17,100 540,787
Province Health Care, Inc. (b) .................. 8,700 296,344
Sunrise Assisted Living, Inc. (b) ............... 14,150 485,522
-----------
1,322,653
-----------
Home Builders -- 4.1%
D.R. Horton, Inc. ............................... 27,650 442,400
Lennar Corp. .................................... 13,800 307,912
-----------
750,312
-----------
Insurance -- 1.6%
Annuity and Life Re (Holdings) Ltd. (b) ......... 14,500 286,375
-----------
Oil & Gas Exploration -- 1.1%
Stone Energy Corp. (b) .......................... 6,100 191,388
-----------
Restaurants -- 2.0%
Papa John's International, Inc. (b) ............. 10,900 359,700
-----------
Retail -- Food -- 1.7%
Whole Foods Market, Inc. (b) .................... 7,500 315,938
-----------
Retail -- General -- 2.5%
99 Cents Only Stores (b) ........................ 11,500 454,969
-----------
Retail -- Specialty -- 6.6%
AnnTaylor Stores Corp. (b) ...................... 13,100 266,094
Linens 'n Things Inc. (b) ....................... 13,300 365,750
Pacific Sunwear of California (b) ............... 16,900 376,025
Restoration Hardware, Inc. (b) .................. 9,200 189,750
-----------
1,197,619
-----------
Telecommunications -- 7.6%
Exodus Communications, Inc. (b) ................. 10,400 253,500
IDT Corp. (b) ................................... 18,850 433,550
ITC DeltaCom, Inc. (b) .......................... 9,400 195,050
Metromedia Fiber Network, Inc. (b) .............. 8,400 275,100
WinStar Communications, Inc. (b) ................ 9,600 228,000
-----------
1,385,200
-----------
TOTAL COMMON STOCKS
(Identified Cost $18,071,748).................. 17,269,988
-----------
FACE
AMOUNT
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 6.0% OF NET ASSETS
Repurchase Agreement with State Street Bank
and Trust Co., dated 9/30/98 at 4.750% to
be repurchased at $1,092,144 on 10/01/98
collateralized by $865,000 U.S. Treasury
Bond, 7.500% due 11/15/16 with a value
of $1,119,094 ................................... $1,092,000 $ 1,092,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $1,092,000)................... 1,092,000
-----------
TOTAL INVESTMENTS -- 100.7%
(IDENTIFIED COST $19,163,748) (c) ............. 18,361,988
Liabilities, Less Cash and Other
Assets -- (0.7%) .......................... (130,798)
-----------
NET ASSETS -- 100% .............................. $18,231,190
===========
(a) See Note 1.
(b) Non-income producing security.
(c) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $19,173,304 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 $1,312,037 and $2,123,353, respectively, resulting
in net unrealized depreciation of $811,316.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1998
SHARES VALUE (a)
- --------------------------------------------------------------------------------
COMMON STOCKS -- 88.1% OF NET ASSETS
Advertising -- 0.3%
R.H. Donnelley Corp. ............................ 73,600 $ 910,800
------------
Aerospace/Defense -- 2.6%
Alliant Techsystems, Inc. (b) ................... 63,200 4,187,000
Gencorp, Inc. ................................... 75,800 1,459,150
Newport News Shipbuilding, Inc. ................. 75,900 2,035,069
Nichols Research Corp. (b) ...................... 74,150 1,427,387
------------
9,108,606
------------
Auto & Related -- 1.1%
Dura Automotive Systems, Inc. (b) ............... 51,600 1,335,150
Intermet Corp. .................................. 152,600 1,936,112
Quaker State Corp. .............................. 50,600 736,863
------------
4,008,125
------------
Banks/Savings & Loans -- 5.0%
Bank United Corp. ............................... 87,300 3,126,431
City National Corp. ............................. 85,900 2,689,744
CNB Bancshares, Inc. ............................ 61,380 2,808,135
Commercial Federal Corp. ........................ 103,050 2,428,116
Cullen Frost Bankers, Inc. ...................... 48,200 2,325,650
Downey Financial Corp. .......................... 79,325 1,888,927
Imperial Bancorp (b) ............................ 89,000 1,346,125
Local Financial Corp. (b) ....................... 97,500 840,937
------------
17,454,065
------------
Beverages -- 0.4%
Whitman Corp. ................................... 90,800 1,447,125
------------
Broadcasting -- 0.5%
Hearst-Argyle Television, Inc. (b) .............. 49,700 1,658,738
------------
Business Services -- 1.5%
ACNielson Corp. (b) ............................. 97,100 2,160,475
Cort Business Services Corp. (b) ................ 57,900 1,523,494
Harte-Hanks, Inc. ............................... 69,600 1,557,300
------------
5,241,269
------------
Chemicals -- Specialty -- 3.1%
Cuno, Inc. (b) .................................. 125,000 2,093,750
Ferro Corp. ..................................... 112,200 2,229,975
Great Lakes Chemical Corp. ...................... 48,900 1,900,987
Scotts Co. (b) .................................. 54,600 1,672,125
Solutia, Inc. ................................... 135,200 3,050,450
------------
10,947,287
------------
Commercial Services -- 1.3%
Viad Corp. ...................................... 168,300 4,512,544
------------
Communications Equipment -- 1.1%
Comverse Technology, Inc. (b) ................... 45,700 1,867,988
Inter-Tel, Inc. ................................. 163,900 2,120,456
------------
3,988,444
------------
Computer Hardware -- 2.2%
Digi International, Inc. (b) .................... 169,200 2,072,700
Hutchinson Technology, Inc. (b) ................. 78,700 1,347,738
Micron Electronics, Inc. (b) .................... 125,400 2,194,500
SMART Modular Technologies, Inc. (b) ............ 101,700 2,091,206
------------
7,706,144
------------
Computer Software & Services -- 4.0%
American Management Systems, Inc. (b) ........... 49,200 1,346,850
DSP Group, Inc. (b) ............................. 88,200 1,300,950
Inprise Corp. (b) ............................... 229,400 1,419,413
Rational Software Corp. (b) ..................... 221,700 3,727,331
Sterling Software, Inc. (b) ..................... 59,100 1,628,944
Sybase, Inc. (b) ................................ 253,200 1,527,112
Sykes Enterprises, Inc. (b) ..................... 68,900 1,171,300
Symantec Corp. (b) .............................. 27,600 363,975
Wang Laboratories, Inc. (b) ..................... 86,000 1,666,250
------------
14,152,125
------------
Data Processing Services -- 1.4%
ChoicePoint, Inc. (b) ........................... 67,300 3,238,812
Information Resources, Inc. (b) ................. 136,200 1,787,625
------------
5,026,437
------------
Electrical Equipment -- 1.1%
Hadco Corp. (b) ................................. 79,700 1,932,725
Level One Communications, Inc. (b) .............. 104,600 2,105,075
------------
4,037,800
------------
Electronics -- 3.3%
Advanced Micro Devices, Inc. (b) ................ 121,900 2,262,769
Alpha Industries, Inc. (b) ...................... 116,800 1,328,600
ATMI, Inc. (b) .................................. 101,100 1,402,762
AVX Corp. ....................................... 112,000 1,666,000
Litton Industries, Inc. (b) ..................... 20,900 1,254,000
Novellus Systems, Inc. (b) ...................... 42,700 1,120,875
SDL, Inc. (b) ................................... 95,500 1,193,750
Vishay Intertechnology, Inc. (b) ................ 127,940 1,543,276
------------
11,772,032
------------
Entertainment -- 0.5%
Midway Games, Inc. (b) ........................ 156,100 1,824,419
-------------
Environmental Services -- 0.9%
American States Water Co. ....................... 65,700 1,741,050
World Fuel Services Corp. ....................... 101,275 1,259,608
------------
3,000,658
------------
Financial Services -- 1.6%
Anthracite Mortgage Capital, Inc. ............... 214,000 1,819,000
DVI, Inc. (b) ................................... 141,300 2,075,344
UniCapital Corp. (b) ............................ 332,900 1,622,887
------------
5,517,231
------------
Food -- Packaged & Miscellaneous -- 2.5%
Dean Foods Co. .................................. 32,500 1,430,000
International Multifoods Corp. .................. 178,700 2,937,381
Michael Foods, Inc. ............................. 83,500 1,983,125
Vlasic Foods International, Inc. (b) ............ 128,300 2,397,606
------------
8,748,112
------------
Health Care -- Drugs -- 1.6%
Biovail Corp. International (b) ................. 73,000 1,966,438
Jones Pharma, Inc. .............................. 31,200 897,000
PathoGenesis Corp. (b) .......................... 79,700 2,659,987
------------
5,523,425
------------
Health Care -- Medical Supplies -- 0.6%
PSS World Medical, Inc. (b) ..................... 119,400 2,208,900
------------
Health Care -- Medical Technology -- 3.8%
ADAC Laboratories (b) ........................... 93,600 2,246,400
Allegiance Corp. ................................ 32,600 969,850
Conmed Corp. (b) ................................ 163,875 3,748,641
Dentsply International, Inc. .................... 150,100 3,358,487
EndoSonics Corp. (b) ............................ 208,100 988,475
Invacare Corp. .................................. 85,500 2,009,250
------------
13,321,103
------------
Health Care -- Services -- 2.3%
Alternative Living Services, Inc. (b) ........... 79,400 2,123,950
Capital Senior Living Communities L.P. (b) ...... 106,600 1,092,650
HCR Manor Care, Inc. (b) ........................ 77,900 2,283,444
Trigon Healthcare, Inc. (b) ..................... 80,900 2,507,900
------------
8,007,944
------------
Home Builders -- 1.1%
Champion Enterprises, Inc. (b) .................. 164,300 3,819,975
------------
Home Products -- 1.6%
Furniture Brands International, Inc. (b) ........ 110,800 2,160,600
Premark International, Inc. ..................... 128,000 3,592,000
------------
5,752,600
------------
Housing & Building Materials -- 1.2%
Giant Cement Holding, Inc. (b) .................. 76,600 1,603,813
Shaw Industries, Inc. ........................... 164,400 2,671,500
------------
4,275,313
------------
Insurance -- 7.0%
AmerUs Life Holdings, Inc. ...................... 120,400 2,641,275
Capital Reinsurance Corp. ....................... 123,400 3,378,075
Everest Reinsurance Holdings, Inc. .............. 114,000 4,253,625
Horace Mann Educators Corp. ..................... 97,900 2,937,000
Protective Life Corp. ........................... 112,700 4,057,200
Reinsurance Group of America .................... 68,200 4,019,538
Reliance Group Holdings, Inc. ................... 223,300 3,140,156
------------
24,426,869
------------
Lodging & Hotel -- 0.5%
MeriStar Hospitality Corp. (b) .................. 110,127 1,879,042
------------
Manufacturing -- 4.0%
A.O. Smith Corp. ................................ 104,400 2,048,850
Federal Signal Corp. ............................ 140,900 2,967,706
MascoTech, Inc. ................................. 151,700 2,730,600
Pentair, Inc. ................................... 71,700 2,312,325
Regal-Beloit Corp. .............................. 88,900 1,978,025
Trinity Industries, Inc. ........................ 67,700 2,196,019
------------
14,233,525
------------
Metals -- 1.6%
USEC, Inc. (b) .................................. 232,700 3,592,306
Worthington Industries, Inc. .................... 158,000 1,975,000
------------
5,567,306
------------
Natural Gas -- 1.9%
Eastern Enterprises ............................. 64,500 2,717,062
MCN Energy Group, Inc. .......................... 141,200 2,409,225
Public Service Company of North Carolina, Inc. .. 66,000 1,526,250
------------
6,652,537
------------
Office Equipment -- 2.9%
Bell & Howell Co. (b) ........................... 140,900 3,654,594
Daisytek International Corp. (b) ................ 59,600 1,341,000
HON Industries, Inc. ............................ 69,300 1,637,212
National Computer Systems, Inc. ................. 119,200 3,516,400
------------
10,149,206
------------
Oil & Gas Drilling Equipment -- 1.0%
Halter Marine Group, Inc. (b) ................... 106,300 1,209,163
Key Energy Group, Inc. (b) ...................... 108,700 1,012,269
National Oilwell, Inc. (b) ...................... 111,500 1,379,812
------------
3,601,244
------------
Oil & Gas Exploration -- 2.2%
Forcenergy, Inc. (b) ............................ 177,800 1,033,463
Newfield Exploration Co. (b) .................... 84,600 1,903,500
Plains Resources, Inc. (b) ...................... 84,000 1,417,500
Range Resources Corp. ........................... 164,900 1,164,606
Vintage Petroleum, Inc. ......................... 180,400 2,074,600
------------
7,593,669
------------
Paper Products -- 0.7%
Chesapeake Corp. ................................ 66,300 2,299,781
------------
Personal Care -- 0.5%
Dial Corp. ...................................... 81,900 1,689,188
------------
Printing -- 1.2%
Banta Corp. ..................................... 104,174 2,838,741
Cadmus Communications Corp. ..................... 79,300 1,546,350
------------
4,385,091
------------
Real Estate Investment Trusts -- 4.9%
Brandywine Realty Corp. ......................... 118,000 2,256,750
Capital Automotive .............................. 212,700 2,485,931
Capstone Capital Corp. .......................... 139,500 2,938,219
Imperial Credit Commercial Mortgage
Investment Corp. .............................. 8,600 83,850
Koger Equity, Inc. .............................. 155,400 2,913,750
Liberty Property ................................ 118,900 2,831,306
Sun Communities, Inc. ........................... 105,700 3,547,556
------------
17,057,362
------------
Refrigeration Systems -- 0.6%
Hussmann International, Inc. .................... 155,400 2,204,738
------------
Restaurants -- 0.8%
Brinker International, Inc. (b) ................. 141,700 2,656,875
------------
Retail -- Food -- 0.9%
Hannaford Brothers Co. .......................... 73,700 3,113,825
------------
Retail -- General -- 0.6%
BJ's Wholesale Club, Inc. (b) ................... 54,300 1,995,525
------------
Retail -- Specialty -- 3.2%
Burlington Coat Factory Warehouse Corp. ......... 141,400 2,085,650
Claire's Stores, Inc. ........................... 116,900 2,104,200
Elder-Beerman Stores Corp. (b) .................. 76,800 1,334,400
Heilig-Meyers Co. ............................... 246,900 1,774,594
Jostens, Inc. ................................... 104,000 2,158,000
OfficeMax, Inc. (b) ............................. 96,700 948,869
Zale Corp. (b) .................................. 34,700 889,187
------------
11,294,900
------------
Security Systems -- 0.8%
Borg Warner Security Corp. (b) .................. 137,300 1,922,200
Sensormatic Electronics Corp. (b) ............... 160,000 940,000
------------
2,862,200
------------
Telecommunications -- 1.4%
Aliant Communications, Inc. ..................... 130,300 3,224,925
Comsat Corp. .................................... 45,800 1,614,450
------------
4,839,375
------------
Textile & Apparel -- 0.5%
Burlington Industries, Inc. (b) ................. 174,900 1,661,550
------------
Utilities -- 4.3%
BEC Energy ...................................... 116,000 5,053,250
Commonwealth Energy System ...................... 39,700 1,444,087
New Jersey Resources Corp. ...................... 5,300 188,813
Rochester Gas & Electric Corp. .................. 121,400 3,793,750
Washington Gas Light Co. ........................ 19,300 534,369
WPS Resources Corp. ............................. 116,700 4,172,025
------------
15,186,294
------------
TOTAL COMMON STOCKS
(Identified Cost $342,825,265)................. 309,321,323
------------
WARRANTS -- 0.0% of Net Assets
Entertainment -- 0.0%
Iwerks Entertainment, Inc. (b) .................. 1,364 0
------------
TOTAL WARRANTS
(Identified Cost $0) .......................... 0
------------
FACE
AMOUNT
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 13.1% OF NET ASSETS
Associates Corp. of North America,
5.600%, 10/01/98 ................................ $17,406,645 17,406,645
Chevron USA, Inc., 5.500%, 10/01/98 ............... 17,400,000 17,400,000
Exxon Asset Management Co., 5.500%, 10/01/98 ...... 11,400,000 11,400,000
------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $46,206,645).................. 46,206,645
------------
TOTAL INVESTMENTS -- 101.2%
(IDENTIFIED COST $389,031,910) (c) ............ 355,527,968
Liabilities, Less Cash and Other
Assets -- (1.2%) .......................... (4,305,323)
------------
NET ASSETS -- 100% .............................. $351,222,645
============
(a) See Note 1.
(b) Non-income producing security.
(c) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $389,108,880 for federal income tax purposes was as
follows: Aggregate gross unrealized appreciation for all securities in
which there is an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there is an excess of
tax cost over value were $17,906,865 and $51,487,777, respectively,
resulting in net unrealized depreciation of $33,580,912.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES STRATEGIC VALUE FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1998
SHARES VALUE (a)
- -------------------------------------------------------------------------------
COMMON STOCKS -- 99.9% OF NET ASSETS
Aerospace/Defense -- 5.2%
Boeing Co. ...................................... 700 $ 24,019
Sundstrand Corp. ................................ 800 37,100
----------
61,119
----------
Banks/Savings & Loans -- 3.1%
Fleet Financial Group, Inc. ..................... 500 36,719
----------
Broadcasting -- 4.5%
CBS Corp. (b) ................................... 2,200 53,350
----------
Chemicals -- Major -- 4.0%
IMC Global, Inc. ................................ 1,100 21,312
Praxair, Inc. ................................... 800 26,150
----------
47,462
----------
Chemicals -- Specialty -- 4.9%
Crompton & Knowles Corp. ........................ 1,500 21,844
Solutia, Inc. ................................... 1,300 29,331
W.R. Grace & Co. (b) ............................ 500 6,219
----------
57,394
----------
Commercial Services -- 4.1%
Viad Corp. ...................................... 1,800 48,262
----------
Communications Equipment -- 2.5%
Loral Space & Communications Ltd. (b) ........... 2,000 29,500
----------
Computer Hardware -- 14.5%
3Com Corp. (b) .................................. 800 24,050
EMC Corp. (b) ................................... 600 34,312
Gateway 2000, Inc. (b) .......................... 800 41,700
Hewlett-Packard Co. ............................. 500 26,469
Sun Microsystems, Inc. (b) ...................... 900 44,831
----------
171,362
----------
Computer Software & Services -- 4.4%
Unisys Corp. (b) ................................ 2,300 52,325
----------
Electrical Equipment -- 2.1%
Raychem Corp. ................................... 1,000 24,375
----------
Electronics -- 6.4%
Applied Materials, Inc. (b) ..................... 1,100 27,775
Texas Instruments, Inc. ......................... 900 47,475
----------
75,250
----------
Forest Products -- 1.5%
Georgia Pacific Corp. ........................... 400 18,250
----------
Freight Transportation -- 8.5%
Burlington Northern Santa Fe Corp. .............. 900 28,800
CNF Transportation, Inc. ........................ 1,000 29,125
FDX Corp. (b) ................................... 400 18,050
Ryder System, Inc. .............................. 1,000 24,875
----------
100,850
----------
Gaming -- 1.4%
Harrah's Entertainment, Inc. (b) ................ 1,200 15,975
----------
Health Care -- Services -- 1.2%
Healthsouth Corp. (b) ........................... 1,300 13,731
----------
Housing & Building Materials -- 6.9%
Black & Decker Corp. ............................ 1,000 41,625
Masco Corp. ..................................... 1,600 39,400
----------
81,025
----------
Insurance -- 1.9%
Travelers, Inc. ................................. 600 22,500
----------
Manufacturing -- 2.7%
AlliedSignal, Inc. .............................. 900 31,838
----------
Metals -- 2.4%
UCAR International, Inc. (b) .................... 800 14,400
USX-US Steel Group, Inc. ........................ 600 14,325
----------
28,725
----------
Retail -- Food -- 5.5%
Kroger Co. (b) .................................. 1,300 65,000
----------
Retail -- General -- 2.8%
Federated Department Stores, Inc. (b) ........... 900 32,738
----------
Telecommunications -- 3.6%
Ameritech Corp. ................................. 900 42,638
----------
Textile & Apparel -- 2.6%
Reebok International Ltd. (b) ................... 700 9,494
Warnaco Group, Inc. ............................. 900 20,812
----------
30,306
----------
Waste Management -- 3.2%
Waste Management, Inc. (b) ...................... 797 38,306
----------
TOTAL COMMON STOCKS
(Identified Cost $1,245,292) .................. 1,179,000
----------
TOTAL INVESTMENTS -- 99.9%
(IDENTIFIED COST $1,245,292) (c) .............. 1,179,000
Cash and Other Assets, Less
Liabilities -- 0.1% ....................... 1,663
----------
NET ASSETS -- 100% .............................. $1,180,663
==========
(a) See Note 1.
(b) Non-income producing security.
(c) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $1,245,292 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 $151,931 and $218,223, respectively, resulting in net
unrealized depreciation of $66,292.
See accompanying notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1998
FACE
AMOUNT VALUE (A)
- --------------------------------------------------------------------------------
BONDS AND NOTES -- 48.1% OF NET ASSETS
Australia -- 2.4%
Queensland Treasury, 8.000%, 9/14/07 ............. AUD 100,000 $ 70,282
South Australia Government Finance
Authority, Zero Coupon Bond, 12/21/15 ........ 220,000 50,952
----------
121,234
----------
New Zealand -- 1.7%
Government of New Zealand, 8.000%,
11/15/06 ..................................... NZD 150,000 86,134
----------
Philippines -- 2.9%
FLI Capital Cayman, 3.750%, 2/01/02
(step to 6.250% on 8/01/99) (b)(c) ............ USD 150,000 90,750
MBIA, Inc., Zero Coupon Bond, 12/18/01 (b) ..... 100,000 54,750
----------
145,500
----------
South Korea -- 1.0%
Samsung Electronics Co. Ltd., Zero Coupon
Bond, 12/31/07(b) ............................ 75,000 48,750
----------
Thailand -- 3.4%
Bangkok Bank Public Co. Ltd., 3.250%, 3/03/04 (b) 300,000 79,500
Loxley Public Co. Ltd., 2.500%, 4/04/01 (b) .... 450,000 90,000
----------
169,500
----------
United States -- 36.7%
AMF Bowling, Inc., Zero Coupon Bond, 5/12/18
144A (b)(e) .................................. 750,000 73,125
Apple Computer, Inc., 6.500%, 2/15/04 .......... 250,000 221,250
Arch Communications Group, Inc., Zero Coupon
Bond, 3/15/08 (step to 10.875% on
3/15/01) (c) ................................. 300,000 142,500
Boston Chicken, Inc., 4.500%, 2/01/04 (b) ...... 125,000 8,750
Builders Transportation, Inc., 8.000%,
8/15/05 (b)(d) .............................. 95,000 119
Chesapeake Energy Corp., 7.875%, 3/15/04 ....... 100,000 84,000
CML Group, Inc., 5.500%, 1/15/03 (b) ........... 150,000 37,500
Dillon Read Structured Finance Corp.,
6.660%, 8/15/10 .............................. 164,479 162,803
Dura Pharmaceuticals, Inc., 3.500%,
7/15/02 (b) .................................. 100,000 69,000
Envirotest Systems Corp., 9.625%, 4/01/03 ...... 50,000 49,313
Exide Corp., 2.900%, 12/15/05 144A (b)(e) ...... 125,000 62,031
Kent Electronics Corp., 4.500%, 9/01/04 (b) .... 50,000 34,500
Lam Research Corp., 5.000%, 9/01/02 (b) ........ 150,000 116,625
Loews Corp., 3.125%, 9/15/07 (b) ............... 125,000 99,375
Nextel Communications, Inc., Zero Coupon Bond,
9/15/07 (step to 10.650% on 9/15/02) (c) .... 200,000 126,000
Read Rite Corp., 6.500%, 9/01/04 (b) ........... 100,000 56,000
Shoney's, Inc., Zero Coupon Bond, 4/11/04 (b) .. 50,000 22,375
Thermedics, Inc., Zero Coupon Bond, 6/01/03 (b) 100,000 68,000
United States Treasury Bonds, 6.000%, 2/15/26 .. 350,000 391,562
----------
1,824,828
----------
TOTAL BONDS AND NOTES
(Identified Cost $2,956,526)................... 2,395,946
----------
SHARES
- --------------------------------------------------------------------------------
COMMON STOCKS -- 45.0% OF NET ASSETS
Canada -- 0.6%
Abacan Resources Corp. (New) (f) ............... 12,450 $ 2,724
Magna International, Inc. ...................... 450 26,156
----------
28,880
----------
France -- 5.2%
Guyenne et Gascogne SA ......................... 400 169,640
St. Gobain ..................................... 700 92,873
----------
262,513
----------
Germany -- 4.0%
Henkel KGAA .................................... 2,000 151,552
MAN AG ......................................... 230 46,963
----------
198,515
----------
Italy -- 5.2%
ENI Spa ........................................ 30,000 183,899
Ericsson Spa ................................... 2,100 73,651
----------
257,550
----------
Netherlands -- 1.5%
Koninklijke KPN NV ............................. 2,400 74,166
----------
New Zealand -- 2.2%
Air New Zealand Ltd., Class B .................. 138,000 109,205
----------
Portugal -- 2.7%
Portugal Telecom SA ............................ 3,750 136,541
----------
Singapore -- 2.0%
Keppel Corp. Ltd. .............................. 85,000 100,178
----------
United Kingdom -- 3.1%
Boots Co. Plc .................................. 9,000 154,893
----------
United States -- 18.5%
Amoco Corp. .................................... 600 32,325
Anadarko Petroleum Corp. ....................... 900 35,381
Analog Devices, Inc. (f) ....................... 900 14,456
BellSouth Corp. ................................ 400 30,100
Burlington Resources, Inc. ..................... 650 24,294
Circuit City Stores, Inc. ...................... 650 21,653
CVS Corp. ...................................... 800 35,050
Delta & Pine Land Co. .......................... 900 39,600
EMC Corp. (f) .................................. 700 40,031
Enron Corp. .................................... 600 31,688
International Business Machines Corp. .......... 350 44,800
Lockheed Martin Corp. .......................... 350 35,284
McDonald's Corp. ............................... 500 29,844
MCI WorldCom, Inc. (f) ......................... 700 34,213
Medtronic, Inc. ................................ 600 34,725
Meritor Automotive, Inc. ....................... 1 15
Raytheon Co. ................................... 700 37,756
Schering-Plough Corp. .......................... 350 36,247
Sprint Corp. ................................... 500 36,000
Staples, Inc. (f) .............................. 1,200 35,250
Star Banc Corp. ................................ 200 13,225
Sun Microsystems, Inc. (f) ..................... 700 34,869
The Learning Company, Inc. (f) ................. 7,105 140,768
Time Warner, Inc. .............................. 400 35,025
Wells Fargo & Co. .............................. 100 35,500
Xerox Corp. .................................... 400 33,900
----------
921,999
----------
TOTAL COMMON STOCKS
(Identified Cost $2,662,044) ................. 2,244,440
----------
PREFERRED STOCKS -- 1.4% of Net Assets
Japan -- 1.4%
Sakura Finance, 0.750% ......................... 24,000,000 68,255
----------
TOTAL PREFERRED STOCKS
(Identified Cost $186,152) ................... 68,255
----------
RIGHTS -- 0.0% of Net Assets
Thailand -- 0.0%
Industrial Finance Corp. of Thailand (f) ....... 25,000 0
----------
TOTAL RIGHTS
(Identified Cost $0) ......................... 0
-----------
FACE
AMOUNT
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 4.3% OF NET ASSETS
Repurchase Agreement with State Street Bank
and Trust Co., dated 9/30/98 at 4.750% to
be repurchased at $213,028 on 10/01/98
collateralized by $170,000 U.S. Treasury
Bond, 7.500% due 11/15/16 with a value
of $219,938 ................................. USD 213,000 $ 213,000
----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $213,000)................... 213,000
----------
TOTAL INVESTMENTS -- 98.8%
(IDENTIFIED COST $6,017,722) (g) ............ 4,921,641
Cash and Other Assets, Less
Liabilities -- 1.2% ..................... 58,689
----------
NET ASSETS -- 100% ............................ $4,980,330
==========
(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 September 30, 1998, the net unrealized depreciation on investments
based on cost of $6,020,520 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 $221,541 and $1,320,420, respectively, resulting in net
unrealized depreciation of $1,098,879.
Key to Abbreviations:
AUD: Australian Dollar
NZD: New Zealand Dollar
USD: United States Dollar
Ten Largest Sector Holdings at September 30, 1998
as a Percentage of Net Assets
Retail 12.4%
Telecommunications 12.0%
Computers 10.8%
Oil & Gas 7.9%
U.S. Government 7.9%
Electronics 6.4%
Financial Services 5.7%
Chemicals -- Specialty 3.0%
Communications 2.9%
Airlines 2.2%
See accompanying notes to financial statements.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
As of SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
CORE GROWTH INTERNATIONAL
VALUE FUND FUND EQUITY FUND
----------- ----------- -----------
ASSETS
<S> <C> <C> <C>
Investments at value .............................. $70,672,020 $23,356,735 $67,162,019
Cash .............................................. 0 248 19
Foreign currency at value ......................... 0 0 2,079,526
Receivable for:
Fund shares sold ................................ 3,175 635 1,818
Securities sold ................................. 28,031 1,925,448 0
Dividends and interest -- net ................... 96,337 7,398 158,607
Foreign tax reclaim ............................. 1,578 0 108,205
Due from the adviser (Note 3) ..................... 1,494 7,690 13,503
Other assets (Note 1I) ............................ 0 0 0
----------- ----------- -----------
70,802,635 25,298,154 69,523,697
----------- ----------- -----------
LIABILITIES
Payable for:
Securities purchased ............................ 2,792,350 78,726 796,190
Fund shares redeemed ............................ 1,779 0 1,545
Foreign taxes ................................... 0 0 12,271
Payable to custodian bank ....................... 0 0 0
Accrued expenses:
Management fees (Note 3) ........................ 26,192 10,442 43,965
Trustees' fees (Note 3A) ........................ 1,568 1,568 1,568
Administrative fees ............................. 2,958 1,191 3,141
Other ............................................. 35,039 26,407 50,962
----------- ----------- -----------
2,859,886 118,334 909,642
----------- ----------- -----------
NET ASSETS .......................................... $67,942,749 $25,179,820 $68,614,055
=========== =========== ===========
Net Assets consist of:
Capital paid in ................................. $56,697,436 $19,776,260 $71,963,813
Undistributed (or Distribution in excess
of) net investment income ..................... 733,745 0 886,633
Accumulated net realized gain (loss) ............ 6,994,601 5,279,345 1,226,222
Unrealized appreciation (depreciation) on:
Investments ................................... 3,516,967 124,215 (5,471,966)
Foreign currency translations ................. 0 0 9,353
----------- ----------- -----------
NET ASSETS .......................................... $67,942,749 $25,179,820 $68,614,055
=========== =========== ===========
INSTITUTIONAL CLASS:
Net assets ........................................ $66,928,052 $24,663,468 $68,463,963
Shares of beneficial interest outstanding,
no par value .................................... 3,972,427 2,117,647 6,374,303
Net asset value and redemption price per
Institutional share ............................. $ 16.85 $ 11.65 $ 10.74
RETAIL CLASS:
Net assets ........................................ $ 1,014,697 $ 516,352 $ 150,092
Shares of beneficial interest outstanding,
no par value .................................... 60,435 44,561 14,032
Net asset value and redemption price per
Retail share .................................... $ 16.79 $ 11.59 $ 10.70
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 ...................... $67,155,053 $23,232,520 $72,633,985
=========== =========== ===========
</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>
$ 2,070,865 $ 3,355,362 $18,361,988 $355,527,968 $ 1,179,000 $ 4,921,641
0 38,301 946 0 10,525 355
0 0 0 0 0 881
0 84 599 1,266,637 0 1,036
94,199 64,010 73,422 3,142,229 0 35,572
929 2,059 144 537,341 928 30,357
0 0 0 0 0 703
16,693 19,936 20,413 1,318 16,050 12,108
0 0 0 0 0 2,340
- ----------- ----------- ----------- ------------ ----------- -----------
2,182,686 3,479,752 18,457,512 360,475,493 1,206,503 5,004,993
- ----------- ----------- ----------- ------------ ----------- -----------
0 46,098 183,759 8,054,289 0 0
0 0 0 866,647 749 0
0 0 0 0 0 15
2,793 0 0 0 0 0
1,349 2,162 10,936 212,471 514 3,098
1,568 1,568 1,568 1,568 1,568 1,568
439 370 1,618 14,056 288 321
18,667 18,247 28,441 103,817 22,721 19,661
- ----------- ----------- ----------- ------------ ----------- -----------
24,816 68,445 226,322 9,252,848 25,840 24,663
- ----------- ----------- ----------- ------------ ----------- -----------
$ 2,157,870 $ 3,411,307 $18,231,190 $351,222,645 $ 1,180,663 $ 4,980,330
=========== =========== =========== ============ =========== ===========
$ 2,183,412 $ 3,689,834 $21,254,764 $392,341,481 $ 1,193,079 $ 5,748,253
0 8,185 0 2,737,523 2,949 176,258
77,626 94,328 (2,221,814) (10,352,417) 50,927 151,908
(103,168) (381,040) (801,760) (33,503,942) (66,292) (1,096,081)
0 0 0 0 0 (8)
- ----------- ----------- ----------- ------------ ----------- -----------
$ 2,157,870 $ 3,411,307 $18,231,190 $351,222,645 $ 1,180,663 $ 4,980,330
=========== =========== =========== ============ =========== ===========
$ 2,073,058 $ 3,290,670 $17,174,173 $296,116,455 $ 932,053 $ 4,907,426
197,199 326,117 1,747,539 18,976,230 89,041 558,157
$ 10.51 $ 10.09 $ 9.83 $ 15.60 $ 10.47 $ 8.79
$ 84,812 $ 120,637 $ 1,057,017 $ 54,060,471 $ 248,610 $ 72,904
8,083 11,980 107,906 3,471,189 23,799 8,320
$ 10.49 $ 10.07 $ 9.80 $ 15.57 $ 10.45 $ 8.76
-- -- -- $ 1,045,719 -- --
-- -- -- 67,276 -- --
-- -- -- $ 15.54 -- --
$ 2,174,033 $ 3,736,402 $19,163,748 $389,031,910 $ 1,245,292 $ 6,017,722
=========== =========== =========== ============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
For The Nine Months Ended September 30, 1998
<TABLE>
<CAPTION>
CORE INTERNATIONAL
VALUE GROWTH EQUITY
FUND FUND FUND
----------- ----------- -----------
INVESTMENT INCOME
<S> <C> <C> <C>
Dividends* ........................................ $ 1,025,727 $ 97,554 $ 1,347,327
Interest .......................................... 116,996 24,027 153,722
----------- ----------- -----------
1,142,723 121,581 1,501,049
----------- ----------- -----------
Expenses
Management fees (Note 3) ........................ 264,693 114,917 451,871
12b-1 fees (Retail Class) ....................... 2,871 970 385
12b-1 fees (Admin Class) ........................ 0 0 0
Trustees' fees and expenses (Note 3A) ........... 4,249 4,249 4,249
Administrative fees ............................. 26,987 12,703 29,567
Custodian and accounting fees ................... 49,436 44,450 163,332
Transfer Agent fees (Institutional Class) ....... 17,493 15,995 15,186
Transfer Agent fees (Retail Class) .............. 13,781 13,732 13,655
Transfer Agent fees (Admin Class) ............... 0 0 0
Audit and tax services fees ..................... 14,883 14,883 15,482
Registration fees ............................... 26,342 17,205 16,984
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
Other expenses .................................. 15,412 9,129 16,560
----------- ----------- -----------
Total expenses .................................. 436,799 248,714 727,759
Less expenses waived and reimbursed by
the investment adviser (Note 3) ............... (12,673) (52,384) (124,877)
----------- ----------- -----------
Net expenses .................................... 424,126 196,330 602,882
----------- ----------- -----------
Net investment income (loss) ...................... 718,597 (74,749) 898,167
----------- ----------- -----------
NET REALIZED GAIN (LOSS) ON:
Investments** ..................................... 6,348,814 4,122,682 1,091,528
Foreign currency transactions ..................... 0 0 (8,491)
----------- ----------- -----------
Total net realized gain (loss) .................... 6,348,814 4,122,682 1,083,037
----------- ----------- -----------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments ....................................... (10,463,537) (6,052,994) (5,078,550)
Foreign currency translations ..................... 0 0 10,487
----------- ----------- -----------
Total net change in unrealized appreciation
(depreciation) .................................. (10,463,537) (6,052,994) (5,068,063)
----------- ----------- -----------
Total net realized gain (loss) and change
in unrealized appreciation (depreciation) ....... (4,114,723) (1,930,312) (3,985,026)
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS ........................................ $(3,396,126) $(2,005,061) $(3,086,859)
=========== =========== ===========
* Net of foreign withholding taxes of $3,059, $194,590, $147, $288 and $5,778 for the Core Value,
International Equity, Mid-Cap Value, Small Cap Value and Worldwide Funds, respectively.
** Net of capital gain withholding taxes of $2,830 for the International Equity Fund.
</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>
$ 5,372 $ 33,524 $ 9,171 $ 3,230,155 $ 7,515 $ 31,051
4,888 4,889 32,420 1,972,451 833 201,895
- --------- --------- ----------- ------------ --------- ---------
10,260 38,413 41,591 5,202,606 8,348 232,946
- --------- --------- ----------- ------------ --------- ---------
11,818 23,688 67,049 1,981,662 5,321 32,580
158 363 2,854 95,124 561 158
0 0 0 527 0 0
4,249 4,249 4,249 4,249 4,249 4,249
3,593 4,210 7,498 126,353 3,242 4,155
38,593 48,779 57,860 113,474 37,115 47,589
13,600 13,931 13,774 30,120 13,565 13,656
13,564 13,569 13,680 18,506 13,550 13,592
0 0 0 5,975 0 0
18,858 18,858 18,858 23,983 18,858 15,233
14,508 15,222 16,188 82,281 20,409 17,191
0 0 0 0 0 678
942 901 916 0 5,060 0
37 40 215 521 745 915
5,513 5,962 6,628 62,089 2,802 6,068
- --------- --------- ----------- ------------ --------- ---------
125,433 149,772 209,769 2,544,864 125,477 156,064
(109,517) (117,826) (117,517) (5,254) (114,273) (112,466)
- --------- --------- ----------- ------------ --------- ---------
15,916 31,946 92,252 2,539,610 11,204 43,598
- --------- --------- ----------- ------------ --------- ---------
(5,656) 6,467 (50,661) 2,662,996 (2,856) 189,348
- --------- --------- ----------- ------------ --------- ---------
21,939 109,933 (1,954,465) (13,552,131) 38,814 14,901
0 (2) 0 0 0 (4,850)
- --------- --------- ----------- ------------ --------- ---------
21,939 109,931 (1,954,465) (13,552,131) 38,814 10,051
- --------- --------- ----------- ------------ --------- ---------
(274,944) (649,069) (1,631,330) (60,244,726) (180,649) (818,492)
0 0 0 0 0 257
- --------- --------- ----------- ------------ --------- ---------
(274,944) (649,069) (1,631,330) (60,244,726) (180,649) (818,235)
- --------- --------- ----------- ------------ --------- ---------
(253,005) (539,138) (3,585,795) (73,796,857) (141,835) (808,184)
- --------- --------- ----------- ------------ --------- ---------
$(258,661) $(532,671) $(3,636,456) $(71,133,861) $(144,691) $(618,836)
========= ========= =========== ============ ========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------------
For The Year Ended December 31, 1997
<TABLE>
<CAPTION>
CORE INTERNATIONAL
VALUE GROWTH EQUITY
FUND FUND FUND
----------- ----------- -----------
INVESTMENT INCOME
<S> <C> <C> <C>
Dividends* ........................................ $ 925,872 $ 177,794 $ 1,710,007
Interest .......................................... 127,001 27,615 290,807
----------- ----------- -----------
1,052,873 205,409 2,000,814
----------- ----------- -----------
Expenses
Management fees (Note 3) ........................ 269,200 174,976 705,111
12b-1 fees (Retail Class) ....................... 1,450 627 499
Trustees' fees and expenses (Note 3A) ........... 5,816 5,816 5,816
Administrative fees (Note 3C) ................... 24,734 15,915 43,862
Custodian and accounting fees ................... 65,808 58,957 241,055
Transfer Agent fees (Institutional Class) ....... 27,392 27,014 30,244
Transfer Agent fees (Retail Class) .............. 18,873 18,618 18,446
Audit and tax services fees ..................... 23,121 23,121 26,121
Registration fees ............................... 25,983 24,366 25,752
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 .................................. 11,237 11,242 11,402
Other expenses .................................. 10,307 12,088 12,349
----------- ----------- -----------
Total expenses .................................. 483,921 372,740 1,120,657
Less expenses waived and reimbursed by the
investment adviser (Note 3) ................... (29,404) (74,929) (178,102)
----------- ----------- -----------
Net expenses .................................... 454,517 297,811 942,555
----------- ----------- -----------
Net investment income (loss) ...................... 598,356 (92,402) 1,058,259
----------- ----------- -----------
NET REALIZED GAIN (LOSS) ON:
Investments ....................................... 6,931,274 8,211,774 9,491,460
Foreign currency transactions ..................... 0 0 (248,780)
----------- ----------- -----------
Total net realized gain (loss) .................... 6,931,274 8,211,774 9,242,680
----------- ----------- -----------
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments ....................................... 5,392,568 (649,029) (10,489,664)
Foreign currency translations ..................... 0 0 (799)
----------- ----------- -----------
Total net change in unrealized appreciation
(depreciation) .................................. 5,392,568 (649,029) (10,490,463)
----------- ----------- -----------
Total net realized gain (loss) and change in
unrealized appreciation (depreciation) .......... 12,323,842 7,562,745 (1,247,783)
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS ........................................ $12,922,198 $ 7,470,343 $ (189,524)
=========== =========== ===========
* Net of foreign withholding taxes of $1,141, $199,346, $342, and $7,934 for the Core Value,
International Equity, Small Cap Value and Worldwide Funds, respectively.
** Commencement of Fund operations on January 2, 1997.
</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>
$ 5,636 $ 32,648 $ 4,655 $ 2,508,627 $ 7,523 $ 88,870
4,266 10,588 6,550 1,546,170 528 273,029
- ----------- ----------- ----------- ----------- ----------- -----------
9,902 43,236 11,205 4,054,797 8,051 361,899
- ----------- ----------- ----------- ----------- ----------- -----------
11,993 18,691 24,894 1,581,667 4,385 55,489
159 203 1,441 31,541 410 33
5,540 5,540 5,540 5,816 5,540 5,816
825 1,268 1,716 96,314 466 3,545
50,140 58,469 68,040 122,758 47,100 58,079
19,358 19,901 19,759 58,327 17,775 18,168
18,054 18,126 18,410 20,935 16,490 16,511
10,175 10,175 14,175 27,621 14,175 21,091
17,462 17,576 17,780 52,210 19,073 22,666
0 0 0 0 0 958
24,084 24,355 21,110 0 16,896 2,597
998 765 3,820 12,170 3,060 10,992
8,466 8,420 8,454 33,138 8,045 6,465
- ----------- ----------- ----------- ----------- ----------- -----------
167,254 183,489 205,139 2,042,497 153,415 222,410
(151,104) (158,363) (170,503) (12,741) (144,233) (148,392)
- ----------- ----------- ----------- ----------- ----------- -----------
16,150 25,126 34,636 2,029,756 9,182 74,018
- ----------- ----------- ----------- ----------- ----------- -----------
(6,248) 18,110 (23,431) 2,025,041 (1,131) 287,881
- ----------- ----------- ----------- ----------- ----------- -----------
156,302 261,370 (38,055) 39,443,172 12,191 536,460
0 0 0 0 0 (3,851)
- ----------- ----------- ----------- ----------- ----------- -----------
156,302 261,370 (38,055) 39,443,172 12,191 532,609
- ----------- ----------- ----------- ----------- ----------- -----------
171,776 268,029 829,570 4,289,783 114,357 (570,300)
0 0 0 0 0 (105)
- ----------- ----------- ----------- ----------- ----------- -----------
171,776 268,029 829,570 4,289,783 114,357 (570,405)
- ----------- ----------- ----------- ----------- ----------- -----------
328,078 529,399 791,515 43,732,955 126,548 (37,796)
- ----------- ----------- ----------- ----------- ----------- -----------
$ 321,830 $ 547,509 $ 768,084 $45,757,996 $ 125,417 $ 250,085
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORE VALUE FUND
---------------------------------------------
NINE MONTHS
ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1998 1997 1996
----------- ----------- -----------
FROM OPERATIONS
<S> <C> <C> <C>
Net investment income (loss) ...................... $ 718,597 $ 598,356 $ 569,067
Net realized gain (loss) .......................... 6,348,814 6,931,274 4,564,278
Change in unrealized appreciation (depreciation) .. (10,463,537) 5,392,568 2,599,063
----------- ----------- -----------
Increase (decrease) in net assets from
operations .................................... (3,396,126) 12,922,198 7,732,408
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ........................... 0 (590,731) (559,278)
Net realized gain on investments ................ 0 (7,124,536) (4,547,630)
RETAIL CLASS
Net investment income ........................... 0 (10,346) 0
Net realized gain on investments ................ 0 (138,784) 0
----------- ----------- -----------
0 (7,864,397) (5,106,908)
----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets derived
from capital share transactions ................. 6,711,627 15,853,992 4,624,659
----------- ----------- -----------
Total increase (decrease) in net assets ........... 3,315,501 20,911,793 7,250,159
NET ASSETS
Beginning of the period ........................... 64,627,248 43,715,455 36,465,296
----------- ----------- -----------
End of the period ................................. $67,942,749 $64,627,248 $43,715,455
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period ................................. $ 733,745 $ 15,148 $ 17,869
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH FUND
---------------------------------------------
NINE MONTHS
ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1998 1997 1996
----------- ----------- -----------
FROM OPERATIONS
<S> <C> <C> <C>
Net investment income (loss) ...................... $ (74,749) $ (92,402) $ (200,707)
Net realized gain (loss) .......................... 4,122,682 8,211,774 10,636,248
Change in unrealized appreciation (depreciation) .. (6,052,994) (649,029) (2,736,567)
----------- ----------- -----------
Increase (decrease) in net assets from
operations .................................... (2,005,061) 7,470,343 7,698,974
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net realized gain on investments ................ 0 (7,950,061) (10,947,610)
RETAIL CLASS
Net realized gain on investments ................ 0 (47,193) 0
----------- ----------- -----------
0 (7,997,254) (10,947,610)
----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets derived
from capital share transactions ................. (5,158,661) (6,626,458) (2,265,225)
----------- ----------- -----------
Total increase (decrease) in net assets ........... (7,163,722) (7,153,369) (5,513,861)
NET ASSETS
Beginning of the period ........................... 32,343,542 39,496,911 45,010,772
----------- ----------- -----------
End of the period ................................. $25,179,820 $32,343,542 $39,496,911
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period ................................. $ 0 $ 0 $ 11,723
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
---------------------------------------------
NINE MONTHS
ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1998 1997 1996
----------- ----------- -----------
FROM OPERATIONS
<S> <C> <C> <C>
Net investment income (loss) ...................... $ 898,167 $ 1,058,259 $ 816,303
Net realized gain (loss) .......................... 1,083,037 9,242,680 5,009,554
Change in unrealized appreciation (depreciation) .. (5,068,063) (10,490,463) 8,432,203
----------- ----------- -----------
Increase (decrease) in net assets from
operations .................................... (3,086,859) (189,524) 14,258,060
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ........................... 0 (834,647) (566,307)
Net realized gain on investments ................ 0 (10,657,570) (3,500,683)
RETAIL CLASS
Net investment income ........................... 0 (2,582) 0
Net realized gain on investments ................ 0 (28,988) 0
----------- ----------- -----------
0 (11,523,787) (4,066,990)
----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets derived
from capital share transactions ................. (10,720,218) 3,472,008 983,155
----------- ----------- -----------
Total increase (decrease) in net assets ........... (13,807,077) (8,241,303) 11,174,225
NET ASSETS
Beginning of the period ........................... 82,421,132 90,662,435 79,488,210
----------- ----------- -----------
End of the period ................................. $68,614,055 $82,421,132 $90,662,435
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period ................................. $ 886,633 $ (213) $ 25,444
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP GROWTH FUND
------------------------------
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1998 1997*
----------- -----------
FROM OPERATIONS
<S> <C> <C>
Net investment income (loss) ................................. $ (5,656) $ (6,248)
Net realized gain (loss) ..................................... 21,939 156,302
Change in unrealized appreciation (depreciation) ............. (274,944) 171,776
----------- -----------
Increase (decrease) in net assets from operations .......... (258,661) 321,830
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
In excess of net investment income ......................... 0 (18,310)
Net realized gain on investments ........................... 0 (92,139)
RETAIL CLASS
In excess of net investment income ......................... 0 (571)
Net realized gain on investments ........................... 0 (3,752)
----------- -----------
0 (114,772)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets derived from capital
share transactions ......................................... 494,979 1,714,474
----------- -----------
Total increase (decrease) in net assets ...................... 236,318 1,921,532
NET ASSETS
Beginning of the period ...................................... 1,921,552 20
----------- -----------
End of the period ............................................ $ 2,157,870 $ 1,921,552
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period ............................................ $ 0 $ 0
=========== ===========
* Commencement of operations on January 2, 1997.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP VALUE FUND
------------------------------
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1998 1997*
----------- -----------
FROM OPERATIONS
<S> <C> <C>
Net investment income (loss) ................................. $ 6,467 $ 18,110
Net realized gain (loss) ..................................... 109,931 261,370
Change in unrealized appreciation (depreciation) ............. (649,069) 268,029
----------- -----------
Increase (decrease) in net assets from operations .......... (532,671) 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 SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets derived from capital
share transactions ......................................... 39,474 3,676,401
----------- -----------
Total increase (decrease) in net assets ...................... (493,197) 3,904,484
NET ASSETS
Beginning of the period ...................................... 3,904,504 20
----------- -----------
End of the period ............................................ $ 3,411,307 $ 3,904,504
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period ............................................ $ 8,185 $ 854
=========== ===========
* Commencement of operations on January 2, 1997.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP GROWTH FUND
------------------------------
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1998 1997*
----------- -----------
FROM OPERATIONS
<S> <C> <C>
Net investment income (loss) ................................. $ (50,661) $ (23,431)
Net realized gain (loss) ..................................... (1,954,465) (38,055)
Change in unrealized appreciation (depreciation) ............. (1,631,330) 829,570
----------- -----------
Increase (decrease) in net assets from operations .......... (3,636,456) 768,084
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
In excess of net investment income ......................... 0 (1,797)
In excess of net realized gain on investments .............. 0 (176,105)
RETAIL CLASS
In excess of net realized gain on investments .............. 0 (53,076)
----------- -----------
0 (230,978)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets derived from capital
share transactions ......................................... 16,835,145 4,495,375
----------- -----------
Total increase (decrease) in net assets ...................... 13,198,689 5,032,481
NET ASSETS
Beginning of the period ...................................... 5,032,501 20
----------- -----------
End of the period ............................................ $18,231,190 $ 5,032,501
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period ............................................ $ 0 $ 0
=========== ===========
</TABLE>
* Commencement of operations on January 2, 1997.
See accompanying notes to financial statements.
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
---------------------------------------------
NINE MONTHS
ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) ...................... $ 2,662,996 $ 2,025,041 $ 899,050
Net realized gain (loss) .......................... (13,552,131) 39,443,172 17,761,764
Change in unrealized appreciation (depreciation) .. (60,244,726) 4,289,783 12,441,612
------------ ------------ ------------
Increase (decrease) in net assets from
operations .................................... (71,133,861) 45,757,996 31,102,426
------------ ------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ........................... 0 (1,647,014) (847,132)
Net realized gain on investments ................ 0 (34,182,555) (18,423,872)
RETAIL CLASS
Net investment income ........................... 0 (125,063) 0
Net realized gain on investments ................ 0 (4,383,758) 0
------------ ------------ ------------
0 (40,338,390) (19,271,004)
------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets derived
from capital share transactions ................. 142,826,216 110,485,816 61,338,511
------------ ------------ ------------
Total increase (decrease) in net assets ........... 71,692,355 115,905,422 73,169,933
NET ASSETS
Beginning of the period ........................... 279,530,290 163,624,868 90,454,935
------------ ------------ ------------
End of the period ................................. $351,222,645 $279,530,290 $163,624,868
============ ============ ============
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period ................................. $ 2,737,523 $ 241,190 $ 67,474
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRATEGIC VALUE FUND
------------------------------
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1998 1997*
----------- -----------
FROM OPERATIONS
<S> <C> <C>
Net investment income (loss) ................................. $ (2,856) $ (1,131)
Net realized gain (loss) ..................................... 38,814 12,191
Change in unrealized appreciation (depreciation) ............. (180,649) 114,357
----------- -----------
Increase (decrease) in net assets from operations .......... (144,691) 125,417
----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
In excess of net investment income ......................... 0 (14,759)
RETAIL CLASS
In excess of net investment income ......................... 0 (4,144)
----------- -----------
0 (18,903)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets derived from capital
share transactions ......................................... 80,573 1,138,247
----------- -----------
Total increase (decrease) in net assets ...................... (64,118) 1,244,761
NET ASSETS
Beginning of the period ...................................... 1,244,781 20
----------- -----------
End of the period ............................................ $ 1,180,663 $ 1,244,781
=========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period ............................................ $ 2,949 $ 0
=========== ===========
* Commencement of operations on January 2, 1997.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WORLDWIDE FUND
---------------------------------------------
NINE MONTHS
ENDED YEAR ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1998 1997 1996*
----------- ----------- -----------
FROM OPERATIONS
<S> <C> <C> <C>
Net investment income (loss) ...................... $ 189,348 $ 287,881 $ 143,724
Net realized gain (loss) .......................... 10,051 532,609 (6,728)
Change in unrealized appreciation (depreciation) .. (818,235) (570,405) 292,551
----------- ----------- -----------
Increase (decrease) in net assets from
operations .................................... (618,836) 250,085 429,547
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income ........................... 0 (284,030) (140,138)
Net realized gain on investments ................ 0 (410,676) 0
RETAIL CLASS
Net investment income ........................... 0 (811) 0
Net realized gain on investments ................ 0 (1,202) 0
----------- ----------- -----------
0 (696,719) (140,138)
----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets derived
from capital share transactions ................. (17,438) 873,745 4,900,074
----------- ----------- -----------
Total increase (decrease) in net assets ........... (636,274) 427,111 5,189,483
NET ASSETS
Beginning of the period ........................... 5,616,604 5,189,493 10
----------- ----------- -----------
End of the period ................................. $ 4,980,330 $ 5,616,604 $ 5,189,493
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period ................................. $ 176,258 $ (8,240) $ 12,271
=========== =========== ===========
* Commencement of operations on May 1, 1996.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Year Ended December 31,
<TABLE>
<CAPTION>
CORE VALUE FUND
-------------------------------
INSTITUTIONAL
CLASS
-------------------------------
1998* 1997
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ........................... $ 17.64 $ 15.60
----------- -----------
Income from investment operations --
Net investment income (loss) ................................. 0.18 0.18
Net realized and unrealized gain (loss) on investments ....... (0.97) 4.32
----------- -----------
Total from investment operations ........................... (0.79) 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 ................................. $ 16.85 $ 17.64
=========== ===========
Total return (%)(a)(b) ......................................... (4.5) 29.2
Net assets, end of period (000) ................................ $ 66,928 $ 63,303
Ratio of operating expenses to average net assets (%)(c)(d) .... 0.79 0.84
Ratio of net investment income to average net assets (%)(c) .... 1.36 1.12
Portfolio turnover rate (%)(a) ................................. 49 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 (%)(c) .................. 0.79 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 ........................................ $ 0.18 $ 0.18
* For the nine months ended September 30, 1998.
** From commencement of class operations on January 2, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or
borne other operating expenses.
(c) Annualized for periods less than one year.
(d) 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.
(e) Per share net investment income has been determined on the basis of the weighted average
number of shares outstanding during the period.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Institutional Class Retail Class
- ------------------------------------------------------------- ----------------------------
1996 1995 1994 1993 1998* 1997**
- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 14.57 $ 11.80 $ 12.49 $ 11.53 $ 17.62 $ 15.60
- ----------- ----------- ----------- ----------- ----------- -----------
0.22 0.23 0.15 0.13 0.15(e) 0.15(e)
2.83 3.93 (0.26) 1.24 (0.98) 4.30
- ----------- ----------- ----------- ----------- ----------- -----------
3.05 4.16 (0.11) 1.37 (0.83) 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 $ 16.79 $ 17.62
=========== =========== =========== =========== =========== ===========
21.2 35.2 (0.9) 11.9 (4.7) 28.9
$ 43,715 $ 36,465 $ 25,946 $ 20,657 $ 1,015 $ 1,324
1.13 1.20 1.33 1.50 1.10 1.10
1.44 1.61 1.28 1.23 1.07 0.84
58 60 48 53 49 64
1.13 1.20 1.33 1.56 2.20 6.17
$ 0.22 $ 0.23 $ 0.15 $ 0.12 $ 0.00(e) $ (0.73)(e)
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Year Ended December 31,
<TABLE>
<CAPTION>
GROWTH FUND
----------------------------
INSTITUTIONAL
CLASS
----------------------------
1998* 1997
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ........................... $ 12.63 $ 13.44
----------- -----------
Income from investment operations --
Net investment income (loss) ................................. (0.03) (0.04)
Net realized and unrealized gain (loss) on investments ....... (0.95) 3.17
----------- -----------
Total from investment operations ........................... (0.98) 3.13
----------- -----------
Less distributions --
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 ................................. $ 11.65 $ 12.63
=========== ===========
Total return (%)(a)(b) ......................................... (7.8) 24.5
Net assets, end of period (000) ................................ $ 24,663 $ 32,149
Ratio of operating expenses to average net assets (%)(c)(d) .... 0.85 0.85
Ratio of net investment income to average net assets (%)(c) .... (0.32) (0.26)
Portfolio turnover rate (%)(a) ................................. 118 116
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 (%)(c) .................. 1.02 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 ........................................ $ (0.05) $ (0.05)
* For the nine months ended September 30, 1998.
** From commencement of class operations on January 2, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or
borne other operating expenses.
(c) Annualized for periods less than one year.
(d) 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.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH FUND
- -----------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
- ------------------------------------------------------------- ----------------------------
1996 1995 1994 1993 1998* 1997**
- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 15.27 $ 12.50 $ 13.02 $ 12.46 $ 12.59 $ 13.44
- ----------- ----------- ----------- ----------- ----------- -----------
(0.07) 0.00 (0.02) 0.00 (0.03) (0.07)
3.08 3.86 (0.45) 1.16 (0.97) 3.16
- ----------- ----------- ----------- ----------- ----------- -----------
3.01 3.86 (0.47) 1.16 (1.00) 3.09
- ----------- ----------- ----------- ----------- ----------- -----------
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 $ 11.59 $ 12.59
=========== =========== =========== =========== =========== ===========
19.9 30.9 (3.7) 9.3 (7.9) 24.2
$ 39,497 $ 45,011 $ 36,580 $ 32,385 $ 516 $ 194
1.10 1.08 1.16 1.20 1.10 1.10
(0.47) (0.29) (0.14) (0.17) (0.58) (0.42)
99 48 46 64 118 116
1.10 1.08 1.16 1.20 4.74 12.96
$ (0.07) $ 0.00 $ (0.02) $ 0.00 $ (0.19) $ (2.00)
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Year Ended December 31,
<TABLE>
<CAPTION>
INTERNATIONAL
EQUITY FUND
----------------------------
INSTITUTIONAL
CLASS
----------------------------
1998* 1997
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ........................... $ 11.30 $ 13.16
----------- -----------
Income from investment operations --
Net investment income (loss) ................................. 0.14 0.15(e)
Net realized and unrealized gain (loss) on investments ....... (0.70) (0.27)
----------- -----------
Total from investment operations ........................... (0.56) (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 ................................. $ 10.74 $ 11.30
=========== ===========
Total return (%)(a)(b) ......................................... (5.0) (1.0)
Net assets, end of period (000) ................................ $ 68,464 $ 82,188
Ratio of operating expenses to average net assets (%)(c)(d) .... 1.00 1.00
Ratio of net investment income to average net assets (%)(c) .... 1.49 1.12
Portfolio turnover rate (%)(a) ................................. 96 119
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 (%)(c) .................. 1.18 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 ........................................ $ 0.12 $ 0.13(e)
* For the nine months ended September 30, 1998.
** From commencement of class operations on January 2, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or
borne other operating expenses.
(c) Annualized for periods less than one year.
(d) 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.
(e) Per share net investment income has been determined on the basis of the weighted average
number of shares outstanding during the period.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
- -----------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS
- ------------------------------------------------------------- ----------------------------
1996 1995 1994 1993 1998* 1997**
- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$ 11.65 $ 11.61 $ 12.90 $ 9.64 $ 11.28 $ 13.16
- ----------- ----------- ----------- ----------- ----------- -----------
0.12 0.14 0.15 0.11 0.10 0.10(e)
2.01 0.87 (0.38) 3.61 (0.68) (0.26)
- ----------- ----------- ----------- ----------- ----------- -----------
2.13 1.01 (0.23) 3.72 (0.58) (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 $ 10.70 $ 11.28
=========== =========== =========== =========== =========== ===========
18.3 8.7 (1.8) 38.5 (5.1) (1.3)
$ 90,662 $ 79,488 $ 73,189 $ 56,560 $ 150 $ 233
1.42 1.45 1.46 1.50 1.25 1.25
0.96 1.16 1.30 1.20 1.16 0.73
151 133 116 128 96 119
1.42 1.45 1.46 1.72 10.26 16.24
$ 0.12 $ 0.14 $ 0.15 $ 0.09 $ (0.67) $ (1.93)(e)
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Year Ended December 31,
<TABLE>
<CAPTION>
MID-CAP GROWTH FUND
-----------------------------------------------------------------
INSTITUTIONAL
CLASS RETAIL CLASS
---------------------------- ----------------------------
1998* 1997** 1998* 1997**
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $ 11.49 $ 10.00 $ 11.49 $ 10.00
----------- ----------- ----------- -----------
Income from investment operations --
Net investment income (loss) ........................ (0.03) (0.03) (0.05) (0.06)
Net realized and unrealized gain (loss) on
investments ....................................... (0.95) 2.26 (0.95) 2.27
----------- ----------- ----------- -----------
Total from investment operations .................. (0.98) 2.23 (1.00) 2.21
----------- ----------- ----------- -----------
Less distributions --
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 ........................ $ 10.51 $ 11.49 $ 10.49 $ 11.49
=========== =========== =========== ===========
Total return (%)(a)(b) ................................ (8.5) 22.7 (8.7) 22.4
Net assets, end of period (000) ....................... $ 2,073 $ 1,848 $ 85 $ 74
Ratio of operating expenses to average net
assets(%)(c)(d) ..................................... 1.00 1.00 1.25 1.25
Ratio of net investment income to average net
assets (%)(c) ....................................... (0.35) (0.38) (0.60) (0.67)
Portfolio turnover rate (%)(a) ........................ 82 174 82 174
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 (%)(c) .................................... 7.13 9.35 27.97 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 ................................................ $ (0.50) $ (0.60) $ (2.08) $ (3.29)
* For the nine months ended September 30, 1998.
** Commencement of fund operations on January 2, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) 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.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Year Ended December 31,
<TABLE>
<CAPTION>
MID-CAP VALUE FUND
-----------------------------------------------------------
INSTITUTIONAL
CLASS RETAIL CLASS
---------------------------- ----------------------------
1998* 1997** 1998* 1997**
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $ 11.53 $ 10.00 $ 11.53 $ 10.00
----------- ----------- ----------- -----------
Income from investment operations --
Net investment income (loss) ........................ 0.02 0.07 (0.01) 0.03
Net realized and unrealized gain (loss) on
investments ....................................... (1.46) 2.54 (1.45) 2.55
----------- ----------- ----------- -----------
Total from investment operations .................. (1.44) 2.61 (1.46) 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 ........................ $ 10.09 $ 11.53 $ 10.07 $ 11.53
=========== =========== =========== ===========
Total return (%)(a)(b) ................................ (12.5) 26.3 (12.7) 26.0
Net assets, end of period (000) ....................... $ 3,291 $ 3,736 $ 121 $ 168
Ratio of operating expenses to average net
assets (%)(c)(d) .................................... 1.00 1.00 1.25 1.25
Ratio of net investment income to average net
assets (%)(c) ........................................ 0.22 0.74 (0.03) 0.42
Portfolio turnover rate (%)(a) ........................ 225 130 225 130
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 (%)(c) .................................... 4.33 6.65 13.31 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 ................................................ $ (0.29) $ (0.49) $ (2.40) $ (1.90)
* For the nine months ended September 30, 1998.
** Commencement of fund operations on January 2, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) 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.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Year Ended December 31,
<TABLE>
<CAPTION>
SMALL CAP GROWTH FUND
-----------------------------------------------------------------
INSTITUTIONAL
CLASS RETAIL CLASS
---------------------------- ----------------------------
1998* 1997** 1998* 1997**
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $ 11.32 $ 10.00 $ 11.30 $ 10.00
----------- ----------- ----------- -----------
Income from investment operations --
Net investment income (loss) ........................ (0.02) (0.07)(e) (0.08) (0.10)(e)
Net realized and unrealized gain (loss) on
investments ....................................... (1.47) 1.99 (1.42) 1.99
----------- ----------- ----------- -----------
Total from investment operations .................. (1.49) 1.92 (1.50) 1.89
----------- ----------- ----------- -----------
Less distributions --
Distributions in excess of net investment income .... 0.00 (0.01) 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 ........................ $ 9.83 $ 11.32 $ 9.80 $ 11.30
=========== =========== =========== ===========
Total return (%)(a)(b) ................................ (13.2) 19.4 (13.3) 19.2
Net assets, end of period (000) ....................... $ 17,174 $ 3,893 $ 1,057 $ 1,139
Ratio of operating expenses to average net
assets (%)(c)(d) .... ............................... 1.00 1.00 1.25 1.25
Ratio of net investment income to average net
assets (%)(c) ....................................... (0.53) (0.65) (0.80) (0.94)
Portfolio turnover rate (%)(a) ........................ 116 211 116 211
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 (%)(c) .................................... 2.15 5.81 3.70 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 ................................................ $ (0.07) $ (0.56)(e) $ (0.34) $ (0.77(e)
* For the nine months ended September 30, 1998.
** Commencement of fund operations on January 2, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) 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.
(e) Per share net investment income has been determined on the basis of the weighted average number of shares outstanding
during the period.
</TABLE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Year Ended December 31,
<TABLE>
<CAPTION>
SMALL CAP
VALUE FUND
----------------------------
INSTITUTIONAL
CLASS
----------------------------
1998* 1997
----------- -----------
<S> <C> <C>
Net asset value, beginning of period ........................... $ 18.62 $ 17.39
----------- -----------
Income from investment operations --
Net investment income (loss) ................................. 0.12 0.17
Net realized and unrealized gain (loss) on investments ....... (3.14) 4.26
----------- -----------
Total from investment operations ........................... (3.02) 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 ................................. $ 15.60 $ 18.62
=========== ===========
Total return (%)(a)(b) ......................................... (16.2) 26.0
Net assets, end of period (000) ................................ $ 296,116 $ 245,177
Ratio of operating expenses to average net assets (%)(c)(d) .... 0.92 0.94
Ratio of net investment income to average net assets (%)(c) .... 1.04 0.97
Portfolio turnover rate (%)(a) ................................. 78 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 (%)(c) .................. 0.92 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 ............................. $ 0.12 $ 0.17
* For the nine months ended September 30, 1998.
** From commencement of class operations on January 2, 1997.
*** From commencement of class operations on January 2, 1998.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or
borne other operating expenses.
(c) Annualized for periods less than one year.
(d) 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.
(e) Per share net investment income has been determined on the basis of the weighted average
number of shares outstanding during the period.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
- --------------------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS RETAIL CLASS ADMIN CLASS
- ----------------------------------------------------------- ------------------------------ ----------
1996 1995 1994 1993 1998* 1997** 1998***
- ----------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 15.33 $ 12.86 $ 14.13 $ 12.88 $ 18.62 $ 17.39 $ 18.62
- ----------- ---------- ---------- ---------- ---------- ---------- ----------
0.11 0.04 (0.04) 0.00 0.10 0.15(e) 0.03
4.47 4.06 (1.12) 3.15 (3.15) 4.21 (3.11)
- ----------- ---------- ---------- ---------- ---------- ---------- ----------
4.58 4.10 (1.16) 3.15 (3.05) 4.36 (3.08)
- ----------- ---------- ---------- ---------- ---------- ---------- ----------
(0.11) (0.04) 0.00 0.00 0.00 (0.08) 0.00
(2.41) (1.59) (0.11) (1.90) 0.00 (3.05) 0.00
- ----------- ---------- ---------- ---------- ---------- ---------- ----------
(2.52) (1.63) (0.11) (1.90) 0.00 (3.13) 0.00
- ----------- ---------- ---------- ---------- ---------- ---------- ----------
$ 17.39 $ 15.33 $ 12.86 $ 14.13 $ 15.57 $ 18.62 $ 15.54
=========== ========== ========== ========== ========== ========== ==========
30.4 32.1 (8.2) 24.7 (16.4) 25.6 (16.5)
$ 163,625 $ 90,455 $ 73,126 $ 67,553 $ 54,060 $ 34,353 $ 1,046
1.19 1.25 1.27 1.35 1.19 1.25 1.50
0.80 0.29 (0.30) (0.38) 0.79 0.79 0.95
73 155 87 106 78 94 78
1.19 1.25 1.27 1.35 1.19 1.35 3.99
$ 0.11 $ 0.04 $ (0.04) $ 0.00 $ 0.10 $ 0.13(e) $ (0.05)
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Year Ended December 31,
<TABLE>
<CAPTION>
STRATEGIC VALUE FUND
-------------------------------------------------------------
INSTITUTIONAL
CLASS RETAIL CLASS
-------------------------- --------------------------
1998* 1997** 1998* 1997**
--------- ---------- --------- ----------
<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) ........................ (0.02) (0.01)(e) (0.04) (0.06)(e)
Net realized and unrealized gain (loss) on
investments ....................................... (1.27) 1.98 (1.27) 2.00
----------- ----------- ----------- -----------
Total from investment operations .................. (1.29) 1.97 (1.31) 1.94
----------- ----------- ----------- -----------
Less distributions --
Distributions in excess of net investment income .... 0.00 (0.21) 0.00 (0.18)
----------- ----------- ----------- -----------
Net asset value, end of period ........................ $ 10.47 $ 11.76 $ 10.45 $ 11.76
=========== =========== =========== ===========
Total return (%)(a)(b) ................................ (11.0) 19.7 (11.1) 19.4
Net assets, end of period (000) ....................... $ 932 $ 965 $ 249 $ 279
Ratio of operating expenses to average net
assets (%)(c)(d) .................................... 1.00 1.00 1.25 1.25
Ratio of net investment income to average net
assets (%)(c) ....................................... (0.22) (0.05) (0.47) (0.49)
Portfolio turnover rate (%)(a) ........................ 31 34 31 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 (%)(c) .............................. 10.81 16.55 15.46 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 ........................................... $ (0.97) $ (1.76)(e) $ (1.38) $ (2.50)(e)
* For the nine months ended ended September 30, 1998.
** Commencement of fund operations on January 2, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) 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.
(e) Per share net investment income has been determined on the basis of the weighted average number of shares outstanding
during the period.
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
Year Ended December 31,
WORLDWIDE
FUND
-------------
INSTITUTIONAL
CLASS
-------------
1998*
------------
Net asset value, beginning of period ............................. $ 9.86
---------
Income from investment operations --
Net investment income (loss) ................................... 0.33
Net realized and unrealized gain (loss) on investments ......... (1.40)
---------
Total from investment operations ............................. (1.07)
---------
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 ................................... $ 8.79
=========
Total return (%)(a)(b) ........................................... (10.9)
Net assets, end of period (000) .................................. $ 4,907
Ratio of operating expenses to average net assets (%)(c)(d) ...... 1.00
Ratio of net investment income to average net assets (%)(c) ...... 4.37
Portfolio turnover rate (%)(a) ................................... 93
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 (%)(c) .................... 3.28
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
* For the nine months ended September 30, 1998.
** Commencement of operations on May 1, 1996.
*** Commencement of class operations on January 2, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) 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.
(e) 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***
- ----------- ----------- ----------- -----------
$ 10.63 $ 10.00 $ 9.86 $ 10.63
- ----------- ----------- ----------- -----------
0.47 0.30 0.30(e) 0.38(e)
(0.10) 0.63 (1.40) (0.03)
- ----------- ----------- ----------- -----------
0.37 0.93 (1.10) 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 $ 8.76 $ 9.86
=========== =========== =========== ===========
3.5 9.2 (11.2) 3.3
$ 5,597 $ 5,189 $ 73 $ 20
1.00 1.00 1.25 1.25
3.89 4.62 3.88 3.58
134 76 93 134
2.62 3.72 24.69 214.91
$ 0.27 $ 0.13 $ (1.49)(e) $ (23.33)(e)
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1998
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 includes 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 class' 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.
On January 2, 1998, the Small Cap Value Fund commenced operations of an
additional class of shares ("Admin Class"). Each class has equal pro rata
interest in the assets of the relevant fund and general voting privileges.
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
service and account maintenance fees at an annual rate of 0.25% of the Fund's
average daily net assets attributable to the Admin Class. Admin Class shares
have exclusive voting rights with respect to its distribution plan.
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. Effective September 30,
1998, the Board of Trustees approved a change in the fiscal year end of the
Funds to September 30, 1998. Certain amounts in the Statements of Operations
and Statements of Changes in Net Assets for prior periods have been
reclassified to conform to current period presentations. 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 exchange
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 exchange
contracts is determined using contractual currency exchange rates established
at the time of each trade. The cost of foreign currency exchange 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 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 September 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 September 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.
At September 30, 1998, the Small Cap Growth and Small Cap Value Funds had
available capital loss carryforwards of $2,212,258 and $13,209,597,
respectively, which will expire on September 30, 2006. These realized losses
are intended to be used to offset future net capital gains.
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, 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 were 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 nine months ended
September 30, 1998 were as follows:
Purchases Sales
----------- -------
Core Value Fund ............................ $ 40,228,557 $ 33,099,343
Growth Fund ................................ 34,788,420 40,390,495
International Equity Fund .................. 72,217,680 79,153,381
Mid-Cap Growth Fund ........................ 2,099,945 1,584,244
Mid-Cap Value Fund ......................... 9,257,548 8,871,087
Small Cap Growth Fund ...................... 28,970,821 12,903,127
Small Cap Value ............................ 375,417,733 236,709,441
Strategic Value Fund ....................... 671,830 401,695
Worldwide Fund ............................. 4,059,310 4,537,723
Purchases and sales of long-term U.S. Government securities occurred in the
Worldwide Fund and totaled $864,563 and $542,977, respectively.
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES -- For the nine
months ended September 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 nine months
ended September 30, 1998 provided for fees at the following annual percentage
rate of each Fund's average daily net assets indicated below. 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
----------------------------------------------
Management Institutional Retail Admin
Fund Fees Class Class Class
------ ---------- ------------- ------ -----
Core Value Fund ............... 0.50% 0.85% 1.10% --
Growth Fund ................... 0.50% 0.85% 1.10% --
International Equity Fund ..... 0.75% 1.00% 1.25% --
Mid-Cap Growth Fund ........... 0.75% 1.00% 1.25% --
Mid-Cap Value Fund ............ 0.75% 1.00% 1.25% --
Small Cap Growth Fund ......... 0.75% 1.00% 1.25% --
Small Cap Value Fund .......... 0.75% 1.00% 1.25% 1.50%
Strategic Value Fund .......... 0.50% 1.00% 1.25% --
Worldwide Fund ................ 0.75% 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 September 30, 1998, the 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 ................................. 372,470 489,622
Growth Fund ..................................... 136,863 704,478
International Equity Fund ....................... 1,002,404 410,405
Mid-Cap Growth Fund ............................. 0 161,611
Mid-Cap Value Fund .............................. 0 134,674
Small Cap Growth Fund ........................... 244,620 249,853
Small Cap Value Fund ............................ 159,082 889,161
Strategic Value Fund ............................ 0 70,697
Worldwide Fund .................................. 458,729 70,292
C. ADMINISTRATIVE FEES -- Through May 31, 1997, New England Funds, L.P. (a
subsidiary of New England Investment Companies) performed certain
administrative, accounting and other services for the Trust. The expenses of
those services, which were paid by the Trust, include the following: (i)
expenses for personnel performing bookeeping, accounting, internal auditing,
financial reporting functions and clerical functions relating to the Funds,
and (ii) expenses for services required in connection with preparation of
registration statements and prospectuses, shareholder reports and reports and
questionnaires for SEC compliance. For the period ended May 31, 1997, these
expenses amounted to $33,003 for the nine Loomis Sayles Funds presented herein
and are included in the financial statements as Administrative fees. Effective
June 1, 1997, Loomis Sayles contracted with State Street Bank and Trust
Company ("State Street") as Administrator to perform these services.
4. LINE OF CREDIT -- On March 5, 1998, the Trust entered into an agreement
which enables each Fund to borrow under a $25 million unsecured line of
credit. Borrowings will be made solely to temporarily finance the repurchase
of capital shares. Interest is charged to each participating Fund based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In
addition, a commitment fee of 0.07% per annum, payable at the end of each
calendar quarter, is accrued by the Trust and apportioned among the Funds
based on each Fund's average daily unused portion of the line of credit.
During the nine months ended September 30, 1998, the Funds had no borrowings
under the agreement.
5. CAPITAL STOCK TRANSACTIONS -- The tables below summarize the transactions
in Fund shares for the periods indicated:
<TABLE>
<CAPTION>
Loomis Sayles Core Value Fund
----------------------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996
-------------------- -------------------- ---------------------
Institutional Class Shares Shares Amount Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares ............ 769,213 $ 13,780,828 921,281 $ 16,764,969 529,829 $ 8,135,687
Issued in connection with the reinvestment
of distributions ........................ 0 0 411,076 7,179,304 317,340 4,975,617
Redeemed .. ............................... (386,005) (6,894,590) (544,799) (9,494,995) (548,491) (8,486,645)
------- ------------ ------- ------------- ------- ------------
Net change ................................ 383,208 $ 6,886,238 787,558 $ 14,449,278 298,678 $ 4,624,659
======= ============ ======= ============= ======= ============
</TABLE>
<TABLE>
<CAPTION>
Retail Class Shares Shares Amount Shares* Amount*
- ------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ............ 60,386 $ 1,150,106 107,737 $ 1,958,564
Issued in connection with the
reinvestment of distributions ............ 0 0 8,390 145,675
Redeemed .................................. (75,106) (1,324,717) (40,972) (699,525)
------- ------------ ------- -------------
Net change ................................ (14,720) $ (174,611) 75,155 $ 1,404,714
======= ============ ======= =============
</TABLE>
*From January 2, 1997 (commencement of class operations).
<TABLE>
<CAPTION>
Loomis Sayles Growth Fund
----------------------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996
-------------------- -------------------- ---------------------
Institutional Class Shares Shares Amount Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares ............ 102,992 $ 1,335,788 253,404 $ 3,601,402 544,697 $ 8,655,405
Issued in connection with the reinvestment
of distributions ........................ 0 0 616,053 7,726,539 781,186 10,831,597
Redeemed .................................. (531,274) (6,847,399) (1,261,701) (18,196,471) (1,336,333) (21,752,227)
------- ------------ ---------- ------------- ---------- -----------
Net change ................................ (428,282) $ (5,511,611) (392,244) $ (6,868,530) (10,450) $(2,265,225)
======= ============ ========== ============= ========== ===========
</TABLE>
<TABLE>
<CAPTION>
Retail Class Shares Shares Amount Shares* Amount*
- ------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ............ 31,559 $ 383,814 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 29,151 $ 352,950 15,410 $ 242,072
======= ============ ======= =============
</TABLE>
*From January 2, 1997 (commencement of class operations).
<TABLE>
<CAPTION>
Loomis Sayles International Equity Fund
----------------------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996
-------------------- -------------------- ---------------------
Institutional Class Shares Shares Amount Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares ............ 445,459 $ 5,642,741 784,236 $ 10,550,546 960,299 $ 11,920,606
Issued in connection with the reinvestment
of distributions ........................ 0 0 821,217 9,502,779 253,208 3,305,494
Redeemed .................................. 1,342,068) (16,284,413) (1,224,562) (16,864,605) (1,149,339) (14,242,945)
--------- ------------ ---------- ------------- ---------- --------------
Net change ................................ (896,609) $(10,641,672) 380,891 $ 3,188,720 64,168 $ 983,155
========= ============ ========== ============= ========== =============
</TABLE>
<TABLE>
<CAPTION>
Retail Class Shares Shares Amount Shares* Amount*
- ------------------- ------ ------ ------ -------
<S> <C> <C> <C> <C>
Issued from the sale of shares ............ 20,073 $ 255,713 61,345 $ 821,531
Issued in connection with the reinvestment
of distributions ........................ 0 0 2,712 31,215
Redeemed .................................. (26,716) (334,259) (43,382) (569,458)
------- ---------- ------- ----------
Net change ................................ (6,643) $ (78,546) 20,675 $ 283,288
======= ========== ======= ==========
</TABLE>
*From January 2, 1997 (commencement of class operations).
<TABLE>
<CAPTION>
Loomis Sayles Mid-Cap Growth Fund
---------------------------------------------------
Nine Months Ended Year Ended
September 30, 1998 December 31, 1997*
-------------------- ---------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ...................................... 48,843 $ 615,005 177,686 $ 1,840,192
Issued in connection with the reinvestment of distributions ......... 0 0 9,562 106,040
Redeemed ............................................................ (12,466) (140,005) (26,426) (302,973)
------- ---------- ------- ------------
Net change .......................................................... 36,377 $ 475,000 160,822 $ 1,643,259
======= ========== ======= ============
</TABLE>
<TABLE>
<CAPTION>
Retail Class Shares Shares Amount Shares Amount
- --------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ...................................... 1,681 $ 19,992 7,906 $ 88,646
Issued in connection with the reinvestment of distributions ......... 0 0 390 4,320
Redeemed ............................................................ (1) (13) (1,893) (21,751)
------ --------- ------ -----------
Net change .......................................................... 1,680 $ 19,979 6,403 $ 71,215
====== ========= ====== ============
</TABLE>
*From January 2, 1997 (commencement of operations).
<TABLE>
<CAPTION>
Loomis Sayles Mid-Cap Value Fund
---------------------------------------------------
Nine Months Ended Year Ended
September 30, 1998 December 31, 1997*
-------------------- ---------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ...................................... 58,746 $ 698,126 309,654 $ 3,352,605
Issued in connection with the reinvestment of distributions ......... 0 0 26,150 296,025
Redeemed ............................................................ (56,826) (637,787) (11,607) (141,399)
------- -------- ------- ------------
Net change .......................................................... 1,920 $ 60,339 324,197 $ 3,507,231
======= ========= ======= ============
</TABLE>
<TABLE>
<CAPTION>
Retail Class Shares Shares Amount Shares Amount
- --------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ...................................... 3,796 $ 44,800 13,686 $ 159,030
Issued in connection with the reinvestment of distributions ......... 0 0 902 10,219
Redeemed ............................................................ (6,398) (65,665) (6) (79)
------ ------- ------ ------------
Net change .......................................................... (2,602) (20,865) 14,582 $ 169,170
====== ======= ====== ============
</TABLE>
*From January 2, 1997 (commencement of operations).
<TABLE>
<CAPTION>
Loomis Sayles Small Cap Growth Fund
---------------------------------------------------
Nine Months Ended Year Ended
September 30, 1998 December 31, 1997*
-------------------- ---------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ...................................... 1,478,523 $ 17,606,892 365,308 $ 3,697,821
Issued in connection with the reinvestment of distributions ......... 0 0 16,122 174,112
Redeemed ............................................................ (74,994) (881,639) (37,420) (420,264)
--------- ------------- ------- ------------
Net change .......................................................... 1,403,529 $ 16,725,253 344,010 $ 3,451,669
========= ============= ======= ===========
</TABLE>
<TABLE>
<CAPTION>
Retail Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ...................................... 76,042 $ 875,103 108,337 $ 1,114,195
Issued in connection with the
reinvestment of distributions ...................................... 0 0 4,792 51,662
Redeemed ............................................................ (68,953) (765,211) (12,312) (122,151)
--------- ------------- ------- -----------
Net change .......................................................... 7,089 $ 109,892 100,817 $ 1,043,706
========= ============= ======= ===========
</TABLE>
*From January 2, 1997 (commencement of operations).
<PAGE>
<TABLE>
<CAPTION>
Loomis Sayles Small Cap Value Fund
----------------------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996
-------------------- -------------------- ---------------------
Institutional Class Shares Shares Amount Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares ........... 8,259,098 $ 155,967,344 3,738,215 $ 74,208,026 4,541,136 $ 79,316,546
Issued in connection with the
reinvestment of distributions ........... 0 0 1,901,950 34,745,871 1,057,710 18,271,195
Redeemed ................................. (2,451,824) (44,789,595) (1,877,683) (35,245,314) (2,093,985) (36,249,230)
---------- -------------- ---------- ------------- ---------- -------------
Net change ............................... 5,807,274 $ 111,177,749 3,762,482 $ 73,708,583 3,504,861 $ 61,338,511
========== ============== ========== ============= ========== =============
</TABLE>
<TABLE>
<CAPTION>
Retail Class Shares Shares Amount Shares* Amount*
- --------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ........... 2,529,087 $ 46,864,876 1,876,793 $ 37,883,528
Issued in connection with the
reinvestment of distributions ........... 0 0 225,201 4,104,426
Redeemed ................................. (903,029) (16,373,245) (256,863) (5,210,721)
--------- ------------- --------- -------------
Net change 1,626,058 $ 30,491,631 1,845,131 $ 36,777,233
========= ============= ========= =============
</TABLE>
<TABLE>
<CAPTION>
Admin Class Shares** Shares Amount
- --------------------- ------ ------
<S> <C> <C>
Issued from the sale of shares ........... 94,376 $ 1,573,502
Issued in connection with the
reinvestment of distributions ........... 0 0
Redeemed ................................. (27,100) (416,666)
------- ------------
Net change 67,276 $ 1,156,836
======= ============
</TABLE>
*From January 2, 1997 (commencement of class operations).
**From January 2, 1998 (commencement of class operations).
<TABLE>
<CAPTION>
Loomis Sayles Strategic Value Fund
---------------------------------------------------
Nine Months Ended Year Ended
September 30, 1998 December 31, 1997*
-------------------- ---------------------
Institutional Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ...................................... 18,830 $ 216,976 83,725 $ 892,822
Issued in connection with the reinvestment of distributions ......... 0 0 1,198 13,783
Redeemed ............................................................ (11,888) (136,688) (2,824) (34,372)
------- --------- ------ -----------
Net change .......................................................... 6,942 $ 80,288 82,099 $ 872,233
======= ========= ====== ===========
</TABLE>
<TABLE>
<CAPTION>
Retail Class Shares Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ...................................... 481 $ 5,000 24,027 $ 269,111
Issued in connection with the reinvestment of distributions ......... 0 0 360 4,143
Redeemed ............................................................ (453) (4,715) (616) (7,240)
------- --------- ------ -----------
Net change .......................................................... 28 $ 285 23,771 $ 266,014
======= ========= ====== ===========
</TABLE>
*From January 2, 1997 (commencement of operations).
<TABLE>
<CAPTION>
Loomis Sayles Worldwide Fund
----------------------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996**
-------------------- -------------------- ---------------------
Institutional Class Shares Shares Amount Shares Amount Shares Amount
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares ........... 3,586 $ 35,988 220,662 $ 2,356,777 475,045 $ 4,759,937
Issued in connection with the reinvestment
of distributions ....................... 0 0 70,014 694,603 13,134 140,137
Redeemed ................................. (13,234) (124,115) (211,051) (2,199,192) 0 0
------- --------- -------- ------------ ------- ------------
Net change ............................... (9,648) $ (88,127) 79,625 $ 852,188 488,179 $ 4,900,074
======= ========= ======== ============ ======= ============
</TABLE>
<TABLE>
<CAPTION>
Retail Class Shares Shares Amount Shares* Amount*
- -------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Issued from the sale of shares ........... 25,009 $ 268,294 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 ............................... 6,322 $ 70,689 1,998 $ 21,557
======= ========= ===== ============
</TABLE>
*From January 2, 1997 (commencement of class operations).
**From May 1, 1996 (commencement of operations).
<PAGE>
- --------------------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
- --------------------------------------------------------------------------------
1998 U.S. TAX AND DISTRIBUTION INFORMATION TO SHAREHOLDERS (UNAUDITED)
FOREIGN TAX CREDITS -- The International Equity Fund has made an election
under Internal Revenue Code Section 853 to pass through foreign taxes paid by
the Fund to its shareholders. For the nine months ended September 30, 1998,
the total amount of foreign taxes that will be passed through to shareholders
and the foreign source income for information reporting purposes will be
$194,051 (of the total $197,420 taxes withheld) and $1,556,313, respectively.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of the Loomis Sayles Equity Funds:
In our opinion, the accompanying statements of assets and liabilities,
including the portfolio of investments owned, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Loomis Sayles
Equity Funds (consisting of the Loomis Sayles Core Value Fund, Growth Fund,
International Equity Fund, Mid-Cap Growth Fund, Mid-Cap Value Fund, Small Cap
Growth Fund, Small Cap Value Fund, Strategic Value Fund, and Worldwide Fund)
(collectively, the "Funds") at September 30, 1998, and the results of their
operations, the changes in their net assets and the financial highlights for
the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of investments owned at September 30, 1998 by correspondence with
the custodian and brokers, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 18, 1998
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<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
<PAGE>
INVESTMENT ADVISER
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111
TRANSFER AND DIVIDEND PAYING AGENT AND CUSTODIAN OF ASSETS
State Street Bank and Trust Company
Boston, Massachusetts 02102
SHAREHOLDER SERVICING AGENT
FOR STATE STREET BANK AND TRUST COMPANY
Boston Financial Data Services, Inc.
P.O. Box 8314
Boston, Massachusetts 02266
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.
