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LOOMIS SAYLES FUNDS
PARTNERS SERIES
LOOMIS SAYLES FUNDS
. . .
Supplement
January 1, 1999
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LOOMIS SAYLES PARTNERS SERIES
LOOMIS SAYLES FUNDS
SUPPLEMENT DATED JANUARY 1, 1999 TO THE LOOMIS SAYLES HIGH YIELD FUND
PROSPECTUS DATED JANUARY 1, 1999.
The Retail Class shares of the Loomis Sayles High Yield Fund will no longer
be available for purchases by new investors effective January 1, 1999. Until
March 1, 1999, Retail Class shareholders of the other Funds may exchange such
shares for Retail Class shares of the Loomis Sayles High Yield Fund. The
Retail Class of shares of the Loomis Sayles High Yield Fund will be terminated
effective March 1, 1999 and Retail Class shares of that Fund outstanding on
that date will be automatically converted into Institutional Class shares
having the same aggregate net asset value as the shares converted. The
following information relating to the Retail Class of shares of the Loomis
Sayles High Yield Fund is effective through March 1, 1999.
The first sentence of the second paragraph on page one is revised to state:
This Prospectus concisely describes the information that an investor should
know before investing in the Institutional Class shares of each Fund and the
Retail Class shares of the High Yield Fund.
1
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Insert the following information under the heading "Summary of Expenses"
beginning on page three.
SUMMARY OF EXPENSES
(FOR A RETAIL CLASS SHARE OF THE HIGH YIELD FUND)
The following information is provided as an aid in understanding the various
expenses that an investor in the Fund will bear indirectly. The information is
based on expenses for the Fund's most recent fiscal year, and should not be
considered a representation of past or future expenses, as actual expenses may
be greater or less than those shown. Also, the 5% annual return assumed in the
Example should not be considered a representation of investment performance,
as actual performance will vary.
<TABLE>
<CAPTION>
HIGH YIELD
FUND
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<S> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases
(as % of offering price)....................................... none
Maximum Sales Load Imposed on Reinvested Dividends
(as % of offering price)....................................... none
Maximum Deferred Sales Load
(as % of original purchase price or redemption proceeds)....... none
Redemption Fees/1/............................................... 2.00%
Exchange Fees.................................................... none
Annual Operating Expenses (as a percentage of net assets):
Management Fees.................................................. .60%
12b-1 Fees....................................................... .25%
Other Operating Expenses (after expense reimbursements where
indicated)..................................................... .15%/2/
Total Operating Expenses (after expense reimbursements where
indicated)..................................................... 1.00%/2/
Example:
An investor would pay the following expenses on a $1,000
investment assuming a 5% annual return (with or without a
redemption at the end of each time period):
One Year......................................................... $ 10
Three Years...................................................... $ 32
Five Years....................................................... $ 55
Ten Years........................................................ $122
</TABLE>
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/1/A $5 charge applies to any wire transfer of redemption proceeds from any
Fund. A 2.00% redemption fee applies with respect to shares of the High
Yield Fund redeemed within one (1) year of purchase. Loomis Sayles may, in
its discretion, waive redemption fees on shares of the High Yield Fund as
set forth under the heading "How to Redeem Shares" if it determines that
there are minimal brokerage and transaction costs incurred in connection
with the redemption.
/2/Loomis Sayles voluntarily agreed, for an indefinite period, to limit the
Fund's Total Operating Expenses to the percentages of average net assets
shown in the table. Without this agreement, Other Operating Expenses
(including 12b-1 fees) and Total Operating Expenses would have been 2.07%
and 2.67%, respectively.
2
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Insert the following information under the heading "Financial Highlights"
beginning on page five.
FINANCIAL HIGHLIGHTS
(FOR A RETAIL CLASS SHARE OF THE HIGH YIELD FUND
OUTSTANDING THROUGHOUT THE INDICATED PERIODS)
The financial highlights that follow have been audited by
PricewaterhouseCoopers LLP, independent accountants. The information should be
read in conjunction with the financial highlights, financial statements and
the notes thereto contained in the Fund's 1998 Annual report, which is
incorporated by reference in this Prospectus and the Statement of Additional
Information.
<TABLE>
<CAPTION>
HIGH YIELD FUND--
RETAIL CLASS
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NINE MONTHS JAN. 2**
ENDED TO
SEPT. 30*, DEC. 31,
1998 1997
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<S> <C> <C>
Net asset value, beginning of period.................... $10.12 $10.11
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Income from investment operations--
Net investment income (loss)........................... 0.75*** 0.85***
Net realized and unrealized gain (loss) on
investments.......................................... (2.27) 0.23
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Total from investment operations....................... (1.52) 1.08
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Less distributions--
Dividends from net investment income................... (0.45) (0.84)
Distributions from net realized capital gains.......... 0.00 (0.26)
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Total distributions.................................... (0.45) (1.10)
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Redemption Fees........................................ 0.01 0.03
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Net asset value, end of period.......................... $ 8.16 $10.12
====== ======
Total return (%)****.................................... (15.8)+ 11.2+
Net assets, end of period (000)......................... $4,020 $3,141
Ratio of operating expenses to average net assets
(%)++................................................. 1.00+++ 1.00+++
Ratio of net investment income to average net assets
(%)................................................... 10.17+++ 8.75+++
Portfolio turnover rate (%)............................. 33+ 68+
Without giving effect to voluntary expense limitations:
The ratio of operating expenses to average net assets
would have been (%).................................. 2.67+++ 4.79+++
Net investment income per share would have been........ $ 0.63*** $ 0.48***
</TABLE>
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* The Fund's fiscal year-end changed to September 30 from December 31.
** Commencement of investment operations.
*** Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
**** Total returns would have been lower had the adviser not reduced its
advisory fee and/or borne other operations expenses.
+ Periods less than one year are not annualized.
++ 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.
+++ Computed on an annualized basis.
NOTE: Further information about each Fund's performance is contained in the
Funds' annual report to shareholders, which may be obtained without
charge.
3
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Insert the following information beginning in the second paragraph under the
heading "How to Purchase Shares" beginning on page 23.
The minimum initial investment for the Institutional Class shares of each
Fund and the Retail Class of shares of the High Yield Fund is $25,000. This
minimum initial investment for Retail Class shares does not apply to purchases
through certain financial intermediaries, including, but not limited to,
certain financial advisers, broker dealers, 401(k) alliances, wrap programs,
"no transaction fee" programs, bank trust departments, financial consultants
and insurance companies. The minimum investment for Institutional Class shares
and Retail Class shares may be waived in while or in part by Loomis Sayles in
its sole discretion. Subsequent investments in either class of shares must be
at least $50.
Shares of any Fund may be purchased by (i) cash, (ii) exchanging
Institutional Class shares of any Fund that is a series of the Trust (for
Institutional Class shares of each Fund) and Retail Class shares of any other
Fund that is a series of the Trust that offers Retail Class shares for Retail
Class shares of the High Yield Fund, provided the value of the shares
exchanged meets the investment minimum of the Class of shares of the Fund into
which the exchange is made, (iii) exchanging securities on deposit with a
custodian acceptable to Loomis Sayles or (iv) a combination of such securities
and cash. Loomis Sayles will not approve the acceptance of securities in
exchange for shares of any Fund unless (1) Loomis Sayles, in its sole
discretion, believes the securities are appropriate investments for the Fund;
(2) the investor represents and agrees that all securities offered to the Fund
can be resold by the Fund without restriction under the Securities Act of
1933, as amended (the "Securities Act") or otherwise; and (3) the securities
are eligible to be acquired under the Fund's investment policies and
restrictions. No investor owning 5% or more of a Fund's shares may purchase
additional shares of that Fund by exchange of securities.
Insert the following information in the paragraph entitled "Free Exchange
Privilege" under the heading "Shareholder Services" on page 26.
FREE EXCHANGE PRIVILEGE. The Institutional Class shares and the Retail Class
shares of any Fund may be exchanged for Institutional Class shares or Retail
Class shares, respectively, of any fund that is a series of Loomis Sayles
Funds and that offers Institutional Class shares or Retail Class shares,
respectively, or for shares of certain money market funds advised by New
England Funds Management, L.P., an affiliate of Loomis Sayles, provided the
value of the shares exchanged meets the investment minimum of the Class of
shares of that fund and, in the case of exchanges into the Loomis Sayles High
Yield Fund, Loomis Sayles Municipal Bond Fund and Loomis Sayles U.S.
4
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Government Securities Fund, Loomis Sayles has approved the exchange of shares
(except no such approval is required for exchanges occurring before March 1,
1999 effected by shareholders who were shareholders before January 1, 1999).
Exchanges may be made by written instructions or by telephone, unless an
investor elected on the application to decline telephone exchange privileges.
The exchange privilege should not be viewed as a means for taking advantage of
short-term swings in the market, and the Funds reserve the right to terminate
or limit the privilege of any shareholder who makes more than four exchanges
in any calendar year. The Funds may terminate or change the terms of the
exchange privilege at any time, upon 60 days' notice to shareholders.
Exchanges of shares of the High Yield Fund purchased within one year before
such exchanges will be subject to a redemption fee of 2.00% of the amount
exchanged. For purposes of determining whether a redemption fee is payable
with respect to shares of the High Yield Fund purchased by exchange of shares
of another Fund, the one-year period shall be deemed to begin on the date of
such purchase by exchange. An exchange is a taxable event for federal income
tax purposes in which a gain or loss would be realized by an investor that is
subject to federal income taxation.
5
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504739
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