LOOMIS SAYLES FUNDS, 485APOS, 1999-11-19

LOOMIS SAYLES FUNDS
485APOS, 1999-11-19

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 19, 1999
REGISTRATION NOS. 33-39133 AND 811-6241

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

---------------------------

FORM N-1A

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 /X/
Post-Effective Amendment No. / /
Post-Effective Amendment No. 22 /X/

REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 24 /X/
(Check appropriate box or boxes)

---------------------------

LOOMIS SAYLES FUNDS
(Exact name of registrant as specified in charter)

One Financial Center, Boston, MA 02111
(Address of principal executive offices)

Registrant's Telephone Number, Including Area Code: (617) 482-2450

Name and address
of agent for service Copy to
-------------------- -------

Sheila M. Barry, Esq. Truman S. Casner, Esq.
Loomis, Sayles & Company, L.P. Ropes & Gray
One Financial Center One International Place
Boston, MA 02111 Boston, MA 02110

It is proposed that this filing will become effective (check appropriate box):

/ / Immediately upon filing pursuant to paragraph (b) of Rule 485
/ / On_____________ pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / On _____________ pursuant to paragraph (a)(1)
/X/ 75 days after filing pursuant to paragraph (a)(2)
/ / On _____________ pursuant to paragraph (a)(2)

If appropriate, check the following box:

/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

---------------------------

<PAGE>

LOGO

LOOMIS SAYLES FUNDS PROSPECTUS
JANUARY ___, 2000

LOOMIS SAYLES GLOBAL TECHNOLOGY FUND

Loomis Sayles & Company, L.P., which has managed mutual funds since 1926,
is the investment adviser of the Fund.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIME.

<PAGE>

<TABLE>
<CAPTION>
TABLE OF CONTENTS

<S> <C>
RISK/RETURN SUMMARY ..........................................................1
Loomis Sayles Global Technology Fund .......................................2

EXPENSES OF THE FUND .........................................................6

MORE INFORMATION ABOUT THE FUND'S INVESTMENTS
AND RISK CONSIDERATIONS ...................................................8

MANAGEMENT ..................................................................13
Investment Adviser .......................................................13
Distribution Plan ........................................................13
Sales Charges for Class A Shares .........................................13
Portfolio Managers .......................................................15

GENERAL INFORMATION .........................................................16
Pricing ..................................................................16
How to Purchase Shares ...................................................16
How to Redeem Shares .....................................................18
How to Exchange Shares ...................................................20
Dividends and Distributions ..............................................21
Tax Consequences .........................................................21
</TABLE>

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RISK/RETURN SUMMARY

The following is a summary of certain key information about the Loomis
Sayles Global Technology Fund. You will find additional information about the
Fund, including a detailed description of the risks of an investment in the
Fund, after this summary.

This Risk/Return summary describes the Fund's objective, principal
investment strategies, principal risks, and performance. The summary includes a
short discussion of some of the principal risks of investing in the Fund. A
further discussion of these and other principal risks begins after this summary.

A more detailed description of the Fund, including some of the additional
risks associated with investing in the Fund, can be found further back in this
Prospectus after the Summary of Principal Risks. Please be sure to read this
additional information before you invest.

You can lose money by investing in the Fund. The Fund may not achieve its
objective and is not intended to be a complete investment program. An investment
in the Fund is not a deposit of a bank and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.

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LOOMIS SAYLES GLOBAL TECHNOLOGY FUND

INVESTMENT OBJECTIVE. The Fund's investment objective is long-term capital
growth.

PRINCIPAL INVESTMENT STRATEGIES. The Fund invests primarily in common stocks or
other equity securities of technology companies located in the United States or
abroad. Technology companies include any companies that Loomis Sayles believes
extensively use technology in their product development or operations.

In deciding which securities to buy and sell, Loomis Sayles seeks to
identify companies that Loomis Sayles believes have distinctive products,
technologies, or services, dynamic earnings growth, prospects for high levels of
profitability, and solid management. Loomis Sayles typically does not consider
current income when making buy/sell decisions.

The Fund may engage in options and futures transactions and foreign
currency hedging transactions and also may invest in initial public offerings of
technology companies.

PRINCIPAL RISKS. Among the principal risks of investing in the Fund are the
following:

- - technology risk (the risk that the value of the Fund's shares will fall
more as a result of adverse developments affecting the technology
industries than shares of funds that invest in a broader range of
industries);

- - market risk (the risk that the value of the Fund's investments will fall as
a result of movements in financial markets generally);

- - foreign risk (the risk that the value of the Fund's foreign investments
will fall as a result of foreign political, social, or economic changes);

- - currency risk (the risk that the value of the Fund's investments will fall
as a result of changes in exchange rates);

- - leveraging risk (the risk that the Fund will incur losses on investments
effectively purchased with borrowed money);

- - derivatives risk (the risk that the value of the Fund's derivative
investments will fall as a result of pricing difficulties or lack of
correlation with the underlying investment);

- - liquidity risk (the risk that the Fund may be unable to find a buyer for
its investments when it seeks to sell them); and

- - management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).

PERFORMANCE. No performance information is available for the Fund because it has
not yet been in operation for a full calendar year.

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SUMMARY OF PRINCIPAL RISKS

The value of your investment in the Fund will fluctuate with changes in the
values of the Fund's investments. Many factors can affect those values. This
section describes the principal risks that may affect the Fund's portfolio as a
whole. The Fund could be subject to additional principal risks because the types
of investments made by the Fund can change over time.

TECHNOLOGY RISK

This is the risk that the value of the Fund's shares will fall more as a
result of adverse developments affecting technology industries than shares of
funds that invest in a broader range of industries. Since technology industries
are rapidly changing, companies in technology industries face the risk that
their products or services may quickly become obsolete or may have a relatively
short product cycle. In addition, competition among technology companies
typically is intense. As a result, technology companies may have to engage in
aggressive pricing of their products or services, which in turn may hurt their
profitability.

MARKET RISK

This is the risk that the value of the Fund's investments will change as
financial markets fluctuate and that prices overall may decline. The value of a
company's stock may fall as a result of factors that directly relate to that
company, such as decisions made by its management or lower demand for the
company's products or services. A stock's value also may fall because of factors
affecting not just the company, but companies in its industry or in a number of
different industries, such as increases in production costs. The value of a
company's stock also may be affected by changes in financial market conditions,
such as changes in interest rates or currency exchange rates. In addition, a
company's stock generally pays dividends only after the company makes required
payments to holders of its bonds or other debt. For this reason, the value of
the stock will usually react more strongly than bonds and other fixed income
securities to actual or perceived changes in the company's financial condition
or prospects.

Market risk generally is greater for funds, such as the Loomis Sayles
Global Technology Fund, that may invest substantially in small and medium-sized
companies, since these companies tend to be more vulnerable to adverse
developments than large companies.

FOREIGN RISK

This is the risk associated with investments in issuers located in foreign
countries. The Fund's investments in foreign securities may experience more
rapid and extreme changes in value than investments in U.S. companies.

The securities markets of many foreign countries are relatively small, with
a limited number of issuers and a small number of securities. In addition,
foreign companies often are not

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subject to the same degree of regulation as U.S. companies. Reporting,
accounting, and auditing standards of foreign countries differ, in some cases
significantly, from U.S. standards. Nationalization, expropriation or
confiscatory taxation, currency blockage, political changes, or diplomatic
developments can cause the value of the Fund's investments in a foreign country
to decline. In the event of nationalization, expropriation, or other
confiscation, if the Fund invests in foreign securities, the Fund could lose its
entire investment.

Funds that may invest significantly in emerging markets, such as the Loomis
Sayles Global Technology Fund, may face greater foreign risk since emerging
market countries may be more likely to experience political and economic
instability.

CURRENCY RISK

This is the risk that fluctuations in exchange rates between the U.S.
dollar and foreign currencies may cause the value of the Fund's investments to
decline. The Fund is subject to currency risk because it may invest in
securities denominated in, or receiving revenues in, foreign currencies.

LEVERAGING RISK

When the Fund borrows money or otherwise leverages its portfolio, the value
of an investment in the Fund will be more volatile, and all other risks
generally are compounded. Since the Fund may create leverage by using
investments such as repurchase agreements, derivatives, or by borrowing money,
the Fund faces this risk.

DERIVATIVES RISK

The Fund may use derivatives, which are financial contracts whose value
depends upon or is derived from the value of an underlying asset, reference
rate, or index. Examples of derivatives include options, futures, and swap
transactions. The Fund may use derivatives as part of a strategy designed to
reduce other risks ("hedging"). The Fund also may use derivatives to earn
income, enhance yield, and broaden Fund diversification. This use of derivatives
entails greater risk than using derivatives solely for hedging purposes. When
the Fund uses derivatives, it also faces additional risks, such as the credit
risk of the other party to a derivative contract, the risk of difficulties in
pricing and valuation, and the risk that changes in the value of a derivative
may not correlate perfectly with relevant assets, rates, or indices.

LIQUIDITY RISK

Liquidity risk exists when particular investments are difficult to purchase
or sell, possibly preventing the Fund from selling out of these illiquid
securities at an advantageous price. Derivatives and securities that involve
substantial credit risk tend to involve greater liquidity risk.

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In addition, liquidity risk tends to increase to the extent the Fund invests in
securities whose sale may be restricted by law or by contract, such as Rule 144A
securities.

MANAGEMENT RISK

Management risk is the risk that Loomis Sayles' investment techniques could
fail to achieve the Fund's objective and could cause your investment in the Fund
to lose value. The Fund is subject to management risk because the Fund is
actively managed by Loomis Sayles. Loomis Sayles will apply its investment
techniques and risk analyses in making investment decisions for the Fund, but
there can be no guarantee that Loomis Sayles' decisions will produce the desired
results. For example, in some cases derivative and other investment techniques
may be unavailable or Loomis Sayles may determine not to use them, even under
market conditions where their use could have benefited the Fund.

-5-

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EXPENSES OF THE FUND

The following tables present the expenses that you would pay if you buy and
hold shares of the Fund.

SHAREHOLDER FEES (fees paid directly from your investment)

The following sales charges apply to the respective classes of shares of
the Fund.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Sales Charge (Load) Redemption Fee Imposed on
Imposed on Purchases (as a Shares of the Fund Redeemed
Class of Fund Shares percentage of offering price) within One Year of Purchase

- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
<S> <C> <C>
Institutional Class none none
- ------------------------------------------------------------------------------------
Retail Class none none
- ------------------------------------------------------------------------------------
Class A 5.75% none(1)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>

For a more detailed description of the sales charges for Class A shares,
including a description of ways to lower the sales charge you pay for Class A
shares, please see the "Sales Charges for Class A Shares" section below.

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets)
[to be updated]

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Total Annual Fee
Management Distribution Other Fund Operating Waiver/ Net Expenses*
Fund/Class Fees (12b-1) Fees Expenses** Expenses Reimbursement*
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Loomis Sayles Global Technology Fund
Institutional Class 1.00% none [ ] [ ] [ ] [ ]
Retail Class 1.00% .25% [ ] [ ] [ ] [ ]
Class A 1.00% .25% [ ] [ ] [ ] [ ]

- ----------------------------

(1)For purchases of $1,000,000 or more of Class A shares or purchases of
Class A shares by qualified retirement plans that have investments of $1,000,000
or more or that have 100 or more eligible employees, there is no front-end sales
charge, but a contingent deferred sales charge of 1.00% may apply to redemptions
of your shares within one year of the date of purchase.

-6-

<PAGE>

EXAMPLE

The following example translates the "Total Annual Fund Operating Expenses"
column shown in the preceding table into dollar amounts. This example is
intended to help you compare the cost of investing in the Fund with the cost of
investing in other mutual funds.

This example makes certain assumptions. It assumes that you invest $10,000
in the Fund for the time periods shown and then redeem all your shares at the
end of those periods. This example also assumes that your investment has a 5%
return each year and that the Fund's operating expenses remain the same. Please
remember that this example is hypothetical, so that your actual costs and
returns may be higher or lower.

<TABLE>
<CAPTION>
- -------------------------------------------------------------
- -------------------------------------------------------------
Fund/Class 1 year 3 years
- -------------------------------------------------------------
- -------------------------------------------------------------
<S> <C> <C>
Loomis Sayles Global Technology Fund
Institutional Class $ $
Retail Class $ $
Class A $ $
- -------------------------------------------------------------
- -------------------------------------------------------------
</TABLE>

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<PAGE>

MORE INFORMATION ABOUT THE FUND'S INVESTMENTS AND RISK CONSIDERATIONS

This section provides more information on the Fund's investments and risk
considerations. Except for the Fund's investment objective, and any investment
policies that are identified as "fundamental," all of the investment policies
and strategies of the Fund may be changed without a vote of the Fund's
shareholders.

The Fund may use any of the investment strategies described in this
section. Some of these investment strategies are principal investment strategies
for the Fund, while others are secondary investment strategies for the Fund.

TEMPORARY DEFENSIVE STRATEGIES. For temporary defensive purposes, the Fund may
invest any portion of its assets in cash or in any securities Loomis Sayles
deems appropriate. Although Loomis Sayles has the option to use these defensive
strategies, Loomis Sayles may choose not to use them for a variety of reasons,
even in very volatile market conditions. The Fund may miss certain investment
opportunities if it uses defensive strategies and thus may not achieve its
investment objective.

PORTFOLIO TURNOVER. Portfolio turnover considerations will not limit Loomis
Sayles' investment discretion in managing the assets of the Fund. The Fund
anticipates that its portfolio turnover rate will vary significantly from time
to time depending on the volatility of economic and market conditions. High
portfolio turnover may generate higher costs and higher levels of taxable gains,
both of which may hurt the performance of your investment.

COMMON STOCKS AND OTHER EQUITY SECURITIES. Common stocks and their equivalents,
together called "equity securities," are generally volatile and more risky than
some other forms of investment. Equity securities of companies with relatively
small market capitalizations may be more volatile than the securities of larger,
more established companies and than the broad equity market indices.

GROWTH STOCKS. Stocks of companies that Loomis Sayles believes have
earnings that will grow faster than the economy as a whole are known as
growth stocks. The Fund generally invests a significant portion of its
assets in growth stocks. Growth stocks typically trade at higher multiples
of current earnings than other stocks. As a result, the values of growth
stocks may be more sensitive to changes in current or expected earnings
than the values of other stocks. If Loomis Sayles' assessment of the
prospects for a company's earnings growth is wrong, or if its judgment of
how other investors will value the company's earnings growth is wrong, then
the price of that company's stock may fall or may not approach the value
that Loomis Sayles has placed on it.

VALUE STOCKS. Stocks of companies that are not expected to experience
significant earnings growth, but whose stocks Loomis Sayles believes are
undervalued compared to

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<PAGE>

their true worth, are known as value stocks. These companies may have
experienced adverse business developments or may be subject to special
risks that have caused their stocks to be out of favor. If Loomis Sayles'
assessment of a company's prospects is wrong, or if other investors do not
eventually recognize the value of the company, then the price of the
company's stock may fall or may not approach the value that Loomis Sayles
has placed on it.

FOREIGN SECURITIES. Securities of issuers organized or headquartered outside the
United States are foreign securities. The Fund may invest any portion of its
assets in foreign securities.

Foreign securities may present risks not associated with investments in
comparable securities of U.S. issuers. There may be less information publicly
available about a foreign corporate or governmental issuer than about a U.S.
issuer, and foreign corporate issuers are generally not subject to accounting,
auditing, and financial reporting standards and practices comparable to those in
the United States. The securities of some foreign issuers are less liquid and at
times more volatile than securities of comparable U.S. issuers. Foreign
brokerage commissions and securities custody costs are often higher than in the
United States. With respect to certain foreign countries, there is a possibility
of governmental expropriation of assets, confiscatory taxation, political or
financial instability, and diplomatic developments that could affect the value
of investments in those countries. The Fund's receipt of interest on foreign
government securities may depend on the availability of tax or other revenues to
satisfy the issuer's obligations.

The Fund's investments in foreign securities may include investments in
countries whose economies or securities markets are not yet highly developed.
Special considerations associated with these investments (in addition to the
considerations regarding foreign investments generally) may include, among
others, greater political uncertainties, an economy's dependence on revenues
from particular commodities or on international aid or development assistance,
currency transfer restrictions, highly limited numbers of potential buyers for
such securities, and delays and disruptions in securities settlement procedures.

Since most foreign securities are denominated in foreign currencies or
traded primarily in securities markets in which settlements are made in foreign
currencies, the value of these investments and the net investment income
available for distribution to shareholders of the Fund may be affected by
changes in currency exchange rates, exchange control regulations, or foreign
withholding taxes. Changes in the value relative to the U.S. dollar of a foreign
currency in which the Fund's holdings are denominated will result in a change in
the U.S. dollar value of the Fund's assets and the Fund's income available for
distribution.

In addition, although part of the Fund's income may be received or realized
in foreign currencies, the Fund will be required to compute and distribute its
income in U.S. dollars. Therefore, if the value of a currency relative to the
U.S. dollar declines after the Fund's income has been earned in that currency,
translated into U.S. dollars, and declared as a dividend, but

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<PAGE>

before payment of the dividend, the Fund could be required to liquidate
portfolio securities to pay the dividend. Similarly, if the value of a currency
relative to the U.S. dollar declines between the time the Fund accrues expenses
in U.S. dollars and the time such expenses are paid, the amount of foreign
currency required to be converted into U.S. dollars will be greater than the
equivalent amount in foreign currency of the expenses at the time they were
incurred.

In determining whether to invest assets of the Fund in securities of a
particular foreign issuer, Loomis Sayles will consider the likely effects of
foreign taxes on the net yield available to the Fund and its shareholders.
Compliance with foreign tax law may reduce the Fund's net income available for
distribution to shareholders.

FOREIGN CURRENCY HEDGING TRANSACTIONS. Foreign currency hedging transactions are
an effort to protect the value of specific portfolio positions or to anticipate
changes in relative values of currencies in which current or future Fund
portfolio holdings are denominated or quoted. For example, to protect against a
change in the foreign currency exchange rate between the date on which the Fund
contracts to purchase or sell a security and the settlement date for the
purchase or sale, or to "lock in" the equivalent of a dividend or interest
payment in another currency, the Fund might purchase or sell a foreign currency
on a spot (that is, cash) basis at the prevailing spot rate. If conditions
warrant, the Fund may also enter into private contracts to purchase or sell
foreign currencies at a future date ("forward contracts"). The Fund might also
purchase exchange-listed and over-the-counter call and put options on foreign
currencies. Over-the-counter currency options are generally less liquid than
exchange-listed options and will be treated as illiquid assets. The Fund may not
be able to dispose of over-the-counter options readily.

Foreign currency transactions involve costs and may result in losses.

REPURCHASE AGREEMENTS. A repurchase agreement involves the Fund buying
securities from a seller, usually a bank or brokerage firm, with the
understanding that the seller will repurchase the securities at a higher price
at a later date. Such transactions afford an opportunity for the Fund to earn a
return on available cash at minimal market risk, although the Fund may be
subject to various delays and risks of loss if the seller is unable to meet its
obligations to repurchase.

OPTIONS AND FUTURES TRANSACTIONS. Options and futures transactions involve the
Fund buying, selling, or writing options (or buying or selling futures
contracts) on securities, securities indices, or currencies. Funds may engage in
these transactions either to enhance investment return or to hedge against
changes in the value of other assets that the Fund own or intend to acquire.
Options and futures fall into the broad category of financial instruments known
as "derivatives" and involve special risks. Use of options or futures for other
than hedging purposes may be considered a speculative activity, involving
greater risks than are involved in hedging.

Options can generally be classified as either "call" or "put" options.
There are two parties to a typical options transaction: the "writer" and the
"buyer." A call option gives the buyer the right to buy a security or other
asset (such as an amount of currency or a futures contract) from,

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<PAGE>

and a put option gives the buyer the right to sell a security or other asset to,
the option writer at a specified price, on or before a specified date. The buyer
of an option pays a premium when purchasing the option, which reduces the return
on the underlying security or other asset if the option is exercised, and
results in a loss if the option expires unexercised. The writer of an option
receives a premium from writing an option, which may increase its return if the
option expires or is closed out at a profit. If the Fund as the writer of an
option is unable to close out an unexpired option, it must continue to hold the
underlying security or other asset until the option expires, to "cover" its
obligation under the option.

A futures contract creates an obligation by the seller to deliver and the
buyer to take delivery of the type of instrument or cash at the time and in the
amount specified in the contract. Although many futures contracts call for the
delivery (or acceptance) of the specified instrument, futures are usually closed
out before the settlement date through the purchase (or sale) of a comparable
contract. If the price of the sale of the futures contract by the Fund is less
than the price of the offsetting purchase, the Fund will realize a loss.

The value of options purchased by the Fund and futures contracts held by
the Fund may fluctuate based on a variety of market and economic factors. In
some cases, the fluctuations may offset (or be offset by) changes in the value
of securities held in the Fund's portfolio. All transactions in options and
futures involve the possible risk of loss to the Fund of all or a significant
part of the value of its investment. In some cases, the risk of loss may exceed
the amount of the Fund's investment. When the Fund writes a call option or sells
a futures contract without holding the underlying securities, currencies, or
futures contracts, its potential loss is unlimited. The Fund will be required,
however, to set aside with its custodian bank liquid assets in amounts
sufficient at all times to satisfy its obligations under options and futures
contracts.

The successful use of options and futures will usually depend on Loomis
Sayles' ability to forecast stock market, currency, or other financial market
movements correctly. The Fund's ability to hedge against adverse changes in the
value of securities held in its portfolio through options and futures also
depends on the degree of correlation between changes in the value of futures or
options positions and changes in the values of the portfolio securities. The
successful use of futures and exchange-traded options also depends on the
availability of a liquid secondary market to enable the Fund to close its
positions on a timely basis. There can be no assurance that such a market will
exist at any particular time. In the case of options that are not traded on an
exchange ("over-the-counter" options), the Fund is at risk that the other party
to the transaction will default on its obligations, or will not permit the Fund
to terminate the transaction before its scheduled maturity.

The options and futures markets of foreign countries are small compared to
those of the U.S. and consequently are characterized in most cases by less
liquidity than U.S. markets. In addition, foreign markets may be subject to less
detailed reporting requirements and regulatory controls than U.S. markets.
Furthermore, investments in options in foreign markets are subject to many of
the same risks as other foreign investments. See "Foreign Securities" above.

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<PAGE>

WHEN-ISSUED SECURITIES. A "when-issued" security involves the Fund entering into
a commitment to buy a security before the security has been issued. The Fund's
payment obligation and the interest rate on the security are determined when the
Fund enters into the commitment. The security is typically delivered to the Fund
15 to 120 days later. No interest accrues on the security between the time the
Fund enters into the commitment and the time the security is delivered. If the
value of the security being purchased falls between the time the Fund commits to
buy it and the payment date, the Fund may sustain a loss. The risk of this loss
is in addition to the Fund's risk of loss on the securities actually in its
portfolio at the time. In addition, when the Fund buys a security on a
when-issued basis, it is subject to the risk that market rates of interest will
increase before the time the security is delivered, with the result that the
yield on the security delivered to the Fund may be lower than the yield
available on other, comparable securities at the time of delivery. If the Fund
has outstanding obligations to buy when-issued securities, it will segregate
liquid assets at its custodian bank in an amount sufficient to satisfy these
obligations.

RULE 144A SECURITIES. Rule 144A securities are privately offered securities that
can be resold only to certain qualified institutional buyers. Rule 144A
securities are treated as illiquid, unless Loomis Sayles has determined, under
guidelines established by Loomis Sayles Funds' trustees, that a particular issue
of Rule 144A securities is liquid.

CONVERTIBLE SECURITIES. Convertible securities include corporate bonds, notes,
or preferred stocks of U.S. or foreign issuers that can be converted into (that
is, exchanged for) common stocks or other equity securities at a stated price or
rate. Convertible securities also include other securities, such as warrants,
that provide an opportunity for equity participation. Because convertible
securities can be converted into equity securities, their value will normally
vary in some proportion with those of the underlying equity securities. Due to
the conversion feature, convertible securities generally yield less than
nonconvertible fixed income securities of similar credit quality and maturity.
The Fund's investment in convertible securities may at times include securities
that have a mandatory conversion feature, pursuant to which the securities
convert automatically into common stock at a specified date and conversion
ratio, or that are convertible at the option of the issuer. When conversion is
not at the option of the holder, the Fund may be required to convert the
security into the underlying common stock even at times when the value of the
underlying common stock has declined substantially.

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MANAGEMENT

INVESTMENT ADVISER

The Board of Trustees of Loomis Sayles Funds oversees the Fund and
supervises the Fund's investment adviser, Loomis Sayles & Co., L.P. ("Loomis
Sayles"), which is located at One Financial Center, Boston, Massachusetts.

Loomis Sayles was founded in 1926 and is one of the country's oldest and
largest investment firms. Loomis Sayles is responsible for making investment
decisions for the Fund and for managing the Fund's other affairs and business,
including providing executive and other personnel for the management of the
Fund.

As previously described in the "Expenses of the Fund" section, the Fund
pays Loomis Sayles a monthly investment advisory fee, also known as a management
fee, at the annual rate of 1.00% of its average net assets for these services.

Certain expenses incurred by the Fund would be higher if not for Loomis
Sayles' contractual obligation to limit the Fund's expenses through February 1,
2001.

DISTRIBUTION PLAN

For the Retail Class and Class A shares of the Fund, the Fund has adopted a
distribution plan under Rule 12b-1 of the Investment Company Act of 1940 that
allows the Fund to pay distribution fees for the sale and distribution of Retail
and Class A shares. This 12b-1 fee currently is .25% of the Fund's average daily
net assets attributable to the shares of a particular Class.

SALES CHARGES FOR CLASS A SHARES

The price you pay when you buy Class A shares of the Fund is their net
asset value (as described below), plus a front-end sales charge. This sales
charge will vary depending upon the size of your purchase, as shown in the table
below.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
CLASS A SALES CHARGE AS A % OF CLASS A SALES CHARGE AS A % OF YOUR
YOUR INVESTMENT OFFERING PRICE INVESTMENT
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Less than $50,000 5.75% 6.10%
- -------------------------------------------------------------------------------------------------------------------
$50,000 - $99,999 4.50% 4.71%
- -------------------------------------------------------------------------------------------------------------------
$100,000 - $249,999 3.50% 3.63%
- -------------------------------------------------------------------------------------------------------------------
$250,000 - $499,999 2.50% 2.56%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>

-13-

<PAGE>

The sales charge is not imposed on shares purchased with reinvested
dividends or other distributions.

There are several ways you can lower your sales charge for Class A shares,
including the following:

- - LETTER OF INTENT. A Letter of Intent allows you to purchase Class A shares
of the Fund over a 13-month period but pay sales charges as if you had
purchased all shares at once. The program can save you money if you plan to
invest $50,000 or more over a 13-month period.

- - ELIMINATION OF SALES CHARGE. Class A shares may be offered without a sales
charge to the following individuals and institutions:

- Any government entity that is prohibited from paying a sales charge or
commission to purchase mutual fund shares;

- Selling brokers, sales representatives, or other intermediaries;

- Fund trustees and other individuals who are affiliated with any of the
[New England Funds or Loomis Sayles Funds] (this also applies to any
spouse, parents, children, siblings, grandparents, grandchildren, and
in-laws of those mentioned);

- Participants in certain qualified retirement plans with at least 100
members (although these persons may be subject to a continent deferred
sales charge of 1.00% for redemptions within one year of the date of
purchase);

- Non-discretionary and non-retirement accounts of bank trust
departments or trust companies only if they principally engage in
banking or trust activities;

- Investments of $25,000 or more in the [New England Funds] by clients
of an adviser or sub-adviser to any of the [New England Funds]; and

- ----------------------------

(2)For purchases of $1,000,000 or more of Class A shares or purchases of
Class A shares by qualified retirement plans that have investments of $1,000,000
or more or that have 100 or more eligible employees, there is no front-end sales
charge, but a contingent deferred sales charge of 1.00% may apply to redemptions
of your shares within one year of the date of purchase.

-14-

<PAGE>

- Persons who have redeemed Class A shares of the Fund and then
repurchased Class A shares of a different series of Loomis Sayles
Funds. To qualify, you must reinvest some or all of the proceeds
within 120 days after your redemption and notify Loomis Sayles Funds
or your financial representative at the time of reinvestment that you
are taking advantage of this privilege. You may reinvest your proceeds
either by returning the redemption check or by sending a new check for
some or all of the redemption amount. Please note that for income tax
purposes, a redemption is a sale that involves tax consequences, even
if the proceeds are later reinvested. Please consult your tax adviser
for how a redemption would affect you. If you repurchase $1,000,000 or
more of Class A shares within 30 days after you redeem such shares,
you will receive a rebate for the amount of the contingent deferred
sales charge charged on your redemption.

PORTFOLIO MANAGERS

Christopher R. Ely, Vice President of Loomis Sayles Funds and of Loomis
Sayles, will lead a team of portfolio managers for the Fund. Prior to joining
Loomis Sayles in 1996, Mr. Ely was senior vice president and portfolio manager
of Keystone Investment Management Company, Inc.

-15-

<PAGE>

GENERAL INFORMATION

PRICING

The price of the Fund's shares is based on its net asset value ("NAV"),
plus a sales charge (as described previously) for Class A shares of the Fund.
The NAV per share of each Class equals the total value of its assets, less its
liabilities, divided by the number of outstanding shares. Shares are valued as
of the close of regular trading on the New York Stock Exchange on each day the
Exchange is open for trading.

The Fund values its investments for which market quotations are readily
available at market value. The Fund values short-term investments that will
mature within 60 days at amortized cost, which approximates market value. The
values all other investments and assets at fair value.

The Fund translates prices for its investments quoted in foreign currencies
into U.S. dollars at current exchange rates. As a result, changes in the value
of those currencies in relation to the U.S. dollar may affect the Fund's NAV.
Because foreign markets may be open at different times than the New York Stock
Exchange, the value of the Fund's shares may change on days when shareholders
are not able to buy or sell shares. If events materially affecting the values of
the Fund's foreign investments occur between the close of foreign markets and
the close of regular trading on the New York Stock Exchange, these foreign
investments may be valued at their fair value.

HOW TO PURCHASE SHARES

You can buy shares of the Fund in several ways:

- - BY MAIL. You can mail a completed application form, which is available by
calling Loomis Sayles at 800-633-3330, along with a check payable to State
Street Bank and Trust Company for the amount of your purchase to:

Boston Financial Data Services
P.O. Box 8314
Boston, MA 02266-8314
Attention: Loomis Sayles Funds

- - THROUGH A FINANCIAL ADVISER. Your financial adviser will be responsible for
furnishing all necessary documents to Loomis Sayles or Boston Financial
Data Services. Your financial adviser may charge you for his or her
services.

- - THROUGH SYSTEMATIC INVESTING. You can make regular investments of $50 or
more per month through automatic deductions from your bank checking or
savings account.

-16-

<PAGE>

Application forms are available through your financial adviser or by
calling Loomis Sayles at 800-626-9390.

- - THROUGH A BROKER-DEALER. You may purchase shares of the Fund through a
broker-dealer that has been approved by Loomis Sayles Distributors, L.P.,
which can be contacted at One Financial Center, Boston, MA 02111
(800-633-3330, option 6).

The Fund sells its shares at the NAV, plus the previously described sales
charge in the case of Class A shares, next calculated after Boston Financial
Data Services receives a properly completed investment order. Boston Financial
Data Services generally must receive your properly completed order before the
close of regular trading on the New York Stock Exchange for your shares to be
bought or sold at the Fund's NAV on that day.

Shares of the Fund may be purchased by (1) cash, (2) exchanging shares of
the same Class of any other series of Loomis Sayles Funds, provided the value of
the shares exchanged meets the investment minimum of that Fund, (3) exchanging
securities acceptable to Loomis Sayles, or (4) a combination of such methods.
The exchange of securities for shares of the Fund is subject to various
restrictions, as described in the Statement of Additional Information.

All purchases made by check should be in U.S. dollars and made payable to
State Street Bank and Trust Company. The Fund will not accept checks made
payable to anyone other than State Street Bank and Trust Company (including
checks made payable to you) or starter checks. When you make an investment by
check or by periodic account investment, to ensure that your investment has
cleared, you will not be permitted to redeem that investment until it has been
in your account for 15 days.

After your account has been established, you may send subsequent
investments directly to Boston Financial Data Services at the above address.
Please include either the account identification slip detached from your account
statement or a note containing the Fund's name, your account number and your
name, address, telephone number, and social security number.

You also may wire subsequent investments to the Fund by using the following
wire instructions:

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
ABA No. 011000028
DDA 9904-622-9
(Your account number)
Attn: Custody and Shareholder Services
(Name of Fund)

-17-

<PAGE>

Your bank may charge a fee for transmitting funds by wire.

The Fund may periodically close to new purchases of shares or refuse any
order to buy shares if the Fund determines that doing so would be in the best
interests of the Fund and its shareholders.

The Fund's shares may be purchased by all types of tax-deferred retirement
plans. If you wish to open an individual retirement account (IRA) with the Fund,
Loomis Sayles has retirement plan forms available.

The minimum initial investment for the Fund generally is $1,000,000 for
Institutional Class shares, $25,000 for Retail Class shares, and $2,500 for
Class A shares (which are offered only through New England Funds). Loomis Sayles
Funds may waive these minimums in its sole discretion.

Each subsequent investment must be at least $50.

HOW TO REDEEM SHARES

You can redeem shares of the Fund any day the New York Stock Exchange is
open, either through your financial adviser or directly from the Fund. If you
are redeeming shares that you purchased within the past 15 days by check or by
periodic account investment, your redemption will be delayed until your payment
for the shares clears.

Your redemptions generally will be sent to you via first class mail on the
business day after your request is received. Under unusual circumstances, the
Fund may suspend redemptions or postpone payment for more than seven days.
Although most redemptions are made in cash, as described in the Statement of
Additional Information, the Fund reserves the right to redeem shares in kind.

REDEMPTIONS THROUGH YOUR FINANCIAL ADVISER. Your adviser must receive your
request in proper form before the close of regular trading on the New York Stock
Exchange for you to receive that day's NAV. Your adviser will be responsible for
furnishing all necessary documents to Loomis Sayles on a timely basis and may
charge you for his or her services.

REDEMPTIONS DIRECTLY FROM THE FUND. Boston Financial Data Services must receive
your redemption request in proper form before the close of regular trading on
the New York Stock Exchange in order for you to receive that day's NAV.

You may make redemptions directly from the Fund either by mail or by
telephone.

- - BY MAIL. Send a signed letter of instruction that includes the name of the
Fund, the exact name(s) in which the shares are registered, any special
capacity in which you are signing

-18-

<PAGE>

(such as trustee or custodian or on behalf of a partnership, corporation,
or other entity), your address, telephone number, account number, social
security number, and the number of shares or dollar amount to be redeemed
to the following address:

Boston Financial Data Services, Inc.
P.O. Box 8314
Boston, MA 02266
Attention: Loomis Sayles Funds

If you have certificates for the shares you want to sell, you must include
them along with completed stock power forms.

- - BY TELEPHONE. You may redeem shares by calling Boston Financial Data
Services at 800-626-9390. Proceeds from telephone redemption requests can
be wired to your bank account or sent by check in the name of the
registered owner(s) to the record address.

Before Boston Financial Data Services can wire redemption proceeds to your
bank account, you must provide specific wire instructions to Boston
Financial Data Services at the time you open your account or make any
subsequent investments. A wire fee (currently $5) will be deducted from the
proceeds of each wire.

A telephone redemption request must be received by Boston Financial Data
Services prior to the close of regular trading on the New York Stock
Exchange. If you telephone a redemption request after the Exchange closes
or on a day when the Exchange is not open for business, Boston Financial
Data Services cannot accept the request, and you must make a new redemption
request during regular trading on the Exchange.

The maximum value of shares that you may redeem by telephone is $50,000.
For your protection, telephone redemption requests will not be permitted if
Boston Financial Data Services or the Fund has been notified of an address
change for your account within the preceding 30 days. Unless you indicate
otherwise on your account application, Boston Financial Data Services will
be authorized to accept redemption and transfer instructions by telephone.
If you prefer, you can decline telephone redemption and transfer
privileges.

The telephone redemption privilege may be modified or terminated by the
Fund without notice. Certain of the telephone redemption procedures may be
waived for holders of Institutional Class shares.

- - SYSTEMATIC WITHDRAWAL PLAN. If the value of your account is $25,000 or
more, you can have periodic redemptions automatically paid to you or to
someone you designate. Please call 800-626-9390 for more information or to
set up a systematic withdrawal plan.

-19-

<PAGE>

SIGNATURE GUARANTEE. You must have your signature guaranteed by a bank,
broker-dealer, or other financial institution that can issue a signature
guarantee for the following types of redemptions:

- - If you are redeeming shares worth more than $50,000.

- - If you are requesting that the proceeds check be made out to someone other
than the registered owner(s) or sent to an address other than the record
address.

- - If the account registration has changed within the past 30 days.

- - If you are instructing us to wire the proceeds to a bank account not
designated on the application.

Please note that a notary public cannot provide a signature guarantee. This
guaranteed signature requirement may be waived by Loomis Sayles in certain
cases.

REDEMPTION BY THE FUND. If you own fewer shares than the minimum set by the
Trustees, the Fund may redeem your shares and send you the proceeds. The Fund
also may redeem shares if you own more than a maximum amount set by the
Trustees. There is presently no maximum, but the Trustees could set a maximum
that would apply to both present and future shareholders.

HOW TO EXCHANGE SHARES

You may exchange shares of the Fund for shares of the same Class of any
other Fund in the Loomis Sayles Funds series that offers that Class of shares or
for shares of certain money market funds advised by New England Funds
Management, L.P., an affiliate of Loomis Sayles.

The value of Fund shares that you wish to exchange must meet the investment
minimum of the new fund. Exchanges into the Loomis Sayles High Yield Fund, the
Loomis Sayles Municipal Bond Fund, and the Loomis Sayles U.S. Government
Securities Fund must be specially approved by Loomis Sayles. Please call
800-633-3330 prior to requesting this transaction.

You may make an exchange by sending a signed letter of instruction or by
telephone, unless you have elected on your account application to decline
telephone exchange privileges.

Since excessive exchange activity may interfere with portfolio management
and may have an adverse effect on other shareholders of the Fund, the exchange
privilege should not be viewed as a means for taking advantage of short-term
swings in the market. The Fund reserves the right to terminate or limit your
exchange privilege if you make more than four exchanges in a calendar year. The
Fund may terminate the exchange privilege upon 60 days' notice to shareholders.

-20-

<PAGE>

Please remember that an exchange may be a taxable event for federal and/or
state income tax purposes, so that you may realize a gain or loss that is
subject to income tax.

DIVIDENDS AND DISTRIBUTIONS

The Fund declares and pays its net investment income to shareholders as
dividends annually. The Fund also distributes all of its net capital gains
realized from the sale of portfolio securities. The Fund typically will make
capital gain distributions annually, but the Fund may make more frequent capital
gain distributions.

You may choose to:

- - Reinvest all distributions in additional shares.

- - Receive all distributions in cash.

If you do not select an option when you open your account, all
distributions will be reinvested.

TAX CONSEQUENCES

For federal income tax purposes, distributions of investment income from
the Fund are taxable as ordinary income. Taxes on distributions of capital gains
are determined by how long the Fund owned the investments that generated the
capital gains, rather than by how long you have owned your shares of the Fund.
Distributions of short-term capital gains, which result from the sale of
securities that the Fund had held for one year or less, are taxable as ordinary
income. Properly designated distributions of long-term capital gains, which
result from the sale of securities that the Fund had held for more than one
year, are taxable as long-term capital gains (generally at a 20% federal income
tax rate for noncorporate shareholders).

Distributions of income and capital gains are taxable whether you receive
them in cash or reinvest them in additional shares. If a dividend or
distribution is made shortly after you purchase shares of the Fund, while in
effect a return of capital to you, the dividend or distribution is taxable, as
described above. This is called "buying a dividend" and should be avoided, if
possible.

The Fund's investment in foreign securities may be subject to foreign
withholding taxes, which would decrease the Fund's yield on these securities.
Shareholders may be entitled to claim a credit or deduction with respect to
foreign taxes. In addition, the Fund's investment in foreign securities may
increase or accelerate the Fund's recognition of income and may affect the
timing or amount of the Fund's distributions.

-21-

<PAGE>

In addition to income tax on the Fund's distributions, any gain that
results if you sell or exchange your shares generally is subject to income tax.
You should consult your tax adviser for more information on how an investment in
the Fund affects your own tax situation.

-22-

<PAGE>

[back cover page]

FOR MORE INFORMATION ABOUT THE FUND:

The Fund's statement of additional information (SAI) provides additional
information about the Fund. The SAI is incorporated by reference into this
Prospectus, which means that it is part of this Prospectus for legal purposes.

You may get free copies of the SAI, request other information about the
Fund and other Loomis Sayles Funds, or make shareholder inquiries by contacting
your financial adviser, by visiting the Loomis Sayles web site at
http://www.loomissayles.com, or by calling Loomis Sayles toll-free at
800-626-9390.

You may review and copy information about the Fund, including the SAI, at
the Securities and Exchange Commission's Public Reference Room in Washington,
DC. You may call the Commission at 800-SEC-0330 for information about the
operation of the Public Reference Room. You also may access reports and other
information about the Fund on the Commission's web site at http://www.sec.gov.
You may obtain these reports and other information about the Fund, with payment
of a duplicating fee, by writing the Public Reference Section of the Commission,
Washington, DC 20549-6009. You may need to refer to the Fund's file number,
which is listed at the bottom of this page.

Loomis, Sayles & Company, L.P.
One Financial Center
Boston, MA 02111
800-626-9390
www.loomissayles.com

File No. 811-6241

-23-
<PAGE>

[LOGO]

STATEMENT OF ADDITIONAL
INFORMATION

This Statement of Additional Information is not a Prospectus. This
Statement of Additional Information relates to the Prospectus or Prospectuses of
each series ("Fund") of Loomis Sayles Funds dated January __, 2000, as revised
from time to time. Each reference to the Prospectus in this Statement of
Additional Information shall include all of the Funds' current Prospectuses,
unless otherwise noted. This Statement of Additional Information should be read
in conjunction with the applicable Prospectus. A copy of each Prospectus may be
obtained from Loomis Sayles Funds, One Financial Center, Boston, Massachusetts
02111.

LOOMIS SAYLES FUNDS
Loomis Sayles Aggressive Growth Fund
Loomis Sayles Bond Fund
Loomis Sayles Core Value Fund
Loomis Sayles Emerging Markets Fund
Loomis Sayles Global Bond Fund
Loomis Sayles Global Technology Fund
Loomis Sayles Growth Fund
Loomis Sayles High Yield Fund
Loomis Sayles Intermediate Maturity Bond Fund
Loomis Sayles International Equity Fund
Loomis Sayles Investment Grade Bond Fund
Loomis Sayles Mid-Cap Value Fund
Loomis Sayles Municipal Bond Fund
Loomis Sayles Short-Term Bond Fund
Loomis Sayles Small Cap Growth Fund
Loomis Sayles Small Cap Value Fund
Loomis Sayles U.S. Government Securities Fund
Loomis Sayles Worldwide Fund

<PAGE>

TABLE OF CONTENTS

THE TRUST.................................................................1

INVESTMENT STRATEGIES AND RISKS...........................................1
Investment Restrictions..........................................1
Investment Strategies............................................4
U.S. Government securities ......................................4
When-Issued Securities...........................................5
Convertible Securities...........................................6
Zero Coupon Bonds................................................6
Repurchase Agreements............................................6
Real Estate Investment Trusts....................................6
Rule 144A Securities.............................................7
Tax-Exempt Fixed Income Securities...............................7
Foreign Currency Transactions....................................8
Options ........................................................9
Small Companies.................................................10

MANAGEMENT OF THE TRUST..................................................12

INVESTMENT ADVISORY AND OTHER SERVICES...................................29

PORTFOLIO TRANSACTIONS AND BROKERAGE.....................................33

DESCRIPTION OF THE TRUST.................................................36
Voting Rights...................................................36
Shareholder and Trustee Liability ..............................37
How to Buy Shares ..............................................38
Net Asset Value ................................................38

SHAREHOLDER SERVICES ....................................................38
Open Accounts ..................................................38
Systematic Withdrawal Plan .....................................39
Exchange Privilege .............................................39
IRAs .......................................................40
Redemptions ....................................................40

INCOME DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX STATUS .............41

FINANCIAL STATEMENTS ....................................................44

CALCULATION OF YIELD AND TOTAL RETURN ...................................44

PERFORMANCE COMPARISONS .................................................45

PERFORMANCE DATA.........................................................49

ii
<PAGE>

APPENDIX A

PUBLICATIONS THAT MAY CONTAIN FUND INFORMATION .................54

APPENDIX B

ADVERTISING AND PROMOTIONAL LITERATURE .........................58

i
<PAGE>

THE TRUST

Loomis Sayles Funds (the "Trust") is a diversified, registered,
open-end management investment company. The Trust includes 19 series
(collectively, the "Funds," with each series being known as a "Fund"). The Trust
was organized as a Massachusetts business trust on February 20, 1991.

Shares of the Funds are freely transferable and entitle shareholders to
receive dividends as determined by the Trust's board of trustees and to cast a
vote for each share held at shareholder meetings. The Trust generally does not
hold shareholder meetings and expects to do so only when required by law.
Shareholders may call meetings to consider removal of the Trust's trustees.

INVESTMENT STRATEGIES AND RISKS

The investment objective and principal investment strategies of each
Fund are described in the Prospectus. The investment policies of each Fund set
forth in the Prospectus and in this Statement of Additional Information may be
changed by the Trust's board of trustees without shareholder approval, except
that the investment objective of each Fund as set forth in the Prospectus and
any policy explicitly identified as "fundamental" may not be changed without the
approval of the holders of a majority of the outstanding shares of the relevant
Fund (which in the Prospectus and this Statement of Additional Information means
the lesser of (i) 67% of the shares of that Fund present at a meeting at which
more than 50% of the outstanding shares are present or represented by proxy or
(ii) more than 50% of the outstanding shares). Except in the case of the 15%
limitation on illiquid securities, the percentage limitations set forth below
and in the Prospectus will apply at the time a security is purchased and will
not be considered violated unless an excess or deficiency occurs or exists
immediately after and as a result of such purchase.

INVESTMENT RESTRICTIONS

In addition to its investment objective and policies set forth in the
Prospectus, the following investment restrictions are policies of each Fund (and
those marked with an asterisk are fundamental policies of each Fund):

Each Fund will not:

(1) Invest in companies for the purpose of exercising control or
management.

*(2) Act as underwriter, except to the extent that, in connection with
the disposition of portfolio securities, it may be deemed to be an underwriter
under certain federal securities laws.

*(3) Invest in oil, gas or other mineral leases, rights or royalty
contracts or in real estate, commodities or commodity contracts. (This
restriction does not prevent any Fund from engaging in transactions in futures
contracts relating to securities indices, interest rates or financial
instruments or options, or from investing in issuers that invest or deal in the
foregoing types of assets or from purchasing securities that are secured by real
estate.)

*(4) Make loans, except that each of the Loomis Sayles Aggressive
Growth Fund, the Loomis Sayles Investment Grade Bond Fund, the Loomis Sayles
Intermediate Maturity Bond Fund, the Loomis Sayles Mid-Cap Value Fund, and the
Loomis Sayles Small Cap Growth Fund may lend its portfolio securities to the
extent permitted under the Investment Company Act of 1940 (the "1940 Act"). (For
purposes of this investment restriction, neither (i) entering into repurchase
agreements nor (ii) purchasing debt obligations in which a Fund may invest
consistent with its investment policies is considered the making of a loan.)

<PAGE>

(5) With respect to 75% of its assets, purchase any security (other
than a U.S. Government Security) if, as a result, more than 5% of the Fund's
assets (taken at current value) would then be invested in securities of a single
issuer. (For purposes of this restriction, the Municipal Bond Fund treats each
state and each separate political subdivision, agency, authority or
instrumentality of such state, each multistate agency or authority, and each
guarantor, if any, of obligations of any such issuer, as a separate issuer,
provided that the assets and revenues of the issuer are separate from those of
the government(s) that created the subdivision, agency, authority or
instrumentality.)

(6) With respect to 75% of its assets, acquire more than 10% of the
outstanding voting securities of an issuer.

(7) Pledge, mortgage, hypothecate or otherwise encumber any of its
assets, except that each Fund may pledge assets having a value not exceeding 10%
of its assets to secure borrowings permitted by restriction (9) below. (For the
purpose of this restriction, collateral arrangements with respect to options,
futures contracts and options on futures contracts and with respect to initial
and variation margin are not deemed to be a pledge or other encumbrance of
assets.)

*(8) Purchase any security (other than U.S. Government Securities) if,
as a result, more than 25% of the Fund's assets (taken at current value) would
be invested in any one industry (in the utilities category, gas, electric, water
and telephone companies will be considered as being in separate industries).
Tax-exempt securities issued by governments or political subdivisions of
governments and purchased by the Municipal Bond Fund are not subject to this
restriction, since such issuers are not members of any industry.

*(9) Borrow money in excess of 10% of its assets (taken at cost) or 5%
of its assets (taken at current value), whichever is lower, nor borrow any money
except as a temporary measure for extraordinary or emergency purposes.

(10) Purchase securities on margin (except such short term credits as
are necessary for clearance of transactions) or make short sales (except where,
by virtue of ownership of other securities, it has the right to obtain, without
payment of additional consideration, securities equivalent in kind and amount to
those sold).

(11) Participate on a joint or joint and several basis in any trading
account in securities. (The "bunching" of orders for the purchase or sale of
portfolio securities with Loomis Sayles & Company, L.P. ("Loomis Sayles") or
accounts under its management to reduce brokerage commissions, to average prices
among them or to facilitate such transactions is not considered a trading
account in securities for purposes of this restriction.)

(12) Purchase any illiquid security, including any security that is not
readily marketable, if, as a result, more than 15% of the Fund's net assets
(based on current value) would then be invested in such securities.

(13) Write or purchase puts, calls or combinations of both except that
each Fund may (1) acquire warrants or rights to subscribe to securities of
companies issuing such warrants or rights, or of parents or subsidiaries of such
companies, (2) purchase and sell put and call options on securities and (3)
write, purchase and sell put and call options on currencies and may enter into
currency forward contracts.

*(14) Issue senior securities. (For the purpose of this restriction
none of the following is deemed to be a senior security: any pledge or other
encumbrance of assets permitted by restriction (7) above; any borrowing
permitted by restriction (9) above; any collateral arrangements with respect to
options, futures contracts and options on futures contracts and with respect to
initial and variation margin; and the purchase or sale of options, forward
contracts, futures contracts or options on futures contracts.)

2
<PAGE>

(15) Certain Funds have other non-fundamental investment parameters, as
listed below.

LOOMIS SAYLES AGGRESSIVE GROWTH FUND

The Fund normally will invest at least 65% of its
assets in equity securities of companies with market
capitalizations that fall within the capitalization range of
companies included in the Russell Mid-Cap Growth Index, an
index that tracks stocks of companies with medium market
capitalizations.

LOOMIS SAYLES BOND FUND

The Fund normally will invest at least 65% of its
assets in fixed income securities.

LOOMIS SAYLES EMERGING MARKETS FUND

The Fund normally will invest at least 65% of its
assets in stocks or other equity securities of issuers located
in countries with emerging securities market.

LOOMIS SAYLES GLOBAL BOND FUND

The Fund normally will invest at least 65% of its
assets in fixed income securities of issuers from at least
three countries, which may include the United States, and no
more than 40% of its assets in issuers headquartered in any
one country.

LOOMIS SAYLES GLOBAL TECHNOLOGY FUND

The Fund normally will invest at least 65% of its
assets in equity securities of technology companies located in
the United States or abroad.

LOOMIS SAYLES HIGH YIELD FUND

The Fund normally will invest at least 65% of its
assets in lower rated fixed income securities ("junk bonds").

LOOMIS SAYLES INTERNATIONAL EQUITY FUND

The Fund normally will invest at least 65% of its
assets in equity securities of issuers from at least three
countries outside the United States.

LOOMIS SAYLES INVESTMENT GRADE BOND FUND

The Fund normally will invest at least 65% of its
assets in investment grade fixed income securities.

LOOMIS SAYLES MID-CAP VALUE FUND

The Fund normally will invest at least 65% of its
assets in equity securities of companies with a market
capitalization that falls within the capitalization range of
companies included in the Standard & Poor's Mid-Cap 400 Index.

3
<PAGE>

LOOMIS SAYLES MUNICIPAL BOND FUND

The Fund normally will invest at least 65% of its
assets in fixed income securities.

LOOMIS SAYLES SHORT-TERM BOND FUND

The Fund normally will invest at least 65% of its
assets in fixed income securities with a remaining maturity of
five years or less.

LOOMIS SAYLES SMALL CAP GROWTH FUND

The Fund normally will invest at least 65% of its
assets in equity securities of companies with market
capitalizations that fall within the capitalization range of
the Russell 2000 Index, an index that tracks stocks of
companies that have small market capitalizations.

LOOMIS SAYLES SMALL CAP VALUE FUND

LOOMIS SAYLES U.S. GOVERNMENT SECURITIES FUND

The Fund normally will invest at least 65% of its
assets in U.S. Government securities.

Each Fund intends, based on the views of the staff of the Securities
and Exchange Commission (the "SEC"), to restrict its investments in repurchase
agreements maturing in more than seven days, together with other investments in
illiquid securities, to the percentage permitted by restriction (12) above.

INVESTMENT STRATEGIES

Except to the extent prohibited by a Fund's investment policies as set
forth in the Prospectus or in this Statement of Additional Information, the
investment strategies used by Loomis Sayles in managing each of the Funds may
include investments in the types of securities described below.

U.S. GOVERNMENT SECURITIES

U.S. Government securities include direct obligations of the U.S.
Treasury, as well as securities issued or guaranteed by U.S. Government
agencies, authorities and instrumentalities, including, among others, the
Government National Mortgage Association, the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association, the Federal Housing
Administration, the Resolution Funding Corporation, the Federal Farm Credit
Banks, the Federal Home Loan Bank, the Tennessee Valley Authority, the Student
Loan Marketing Association and the Small Business Administration. More detailed
information about some of these categories of U.S. Government securities
follows.

U.S. Treasury Bills--Direct obligations of the U.S. Treasury which are
issued in maturities of one year or less. No interest is paid on Treasury bills;
instead, they are issued at a discount and repaid at full face value when they
mature. They are backed by the full faith and credit of the U.S. Government.

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<PAGE>

U.S. Treasury Notes and Bonds--Direct obligations of the U.S. Treasury
issued in maturities that vary between one and forty years, with interest
normally payable every six months. They are backed by the full faith and credit
of the U.S. Government.

"Ginnie Maes"--Debt securities issued by a mortgage banker or other
mortgagee which represent an interest in a pool of mortgages insured by the
Federal Housing Administration or the Farmer's Home Administration or guaranteed
by the Veterans Administration. The Government National Mortgage Association
("GNMA") guarantees the timely payment of principal and interest when such
payments are due, whether or not these amounts are collected by the issuer of
these certificates on the underlying mortgages. An assistant attorney general of
the United States has rendered an opinion that the guarantee by GNMA is a
general obligation of the United States backed by its full faith and credit.
Mortgages included in single family or multi-family residential mortgage pools
backing an issue of Ginnie Maes have a maximum maturity of up to 30 years.
Scheduled payments of principal and interest are made to the registered holders
of Ginnie Maes (such as the Fund) each month. Unscheduled prepayments may be
made by homeowners, or as a result of a default. Prepayments are passed through
to the registered holder of Ginnie Maes along with regular monthly payments of
principal and interest.

"Fannie Maes"--The Federal National Mortgage Association ("Fannie Mae")
is a government-sponsored corporation owned entirely by private stockholders
that purchases residential mortgages from a list of approved seller/servicers.
Fannie Maes are pass-through securities issued by Fannie Mae that are guaranteed
as to timely payment of principal and interest by Fannie Mae but are not backed
by the full faith and credit of the U.S.
Government.

"Freddie Macs"--The Federal Home Loan Mortgage Corporation ("FHLMC") is
a corporate instrumentality of the U.S. Government. Freddie Macs are
participation certificates issued by FHLMC that represent an interest in
residential mortgages from FHLMC's national portfolio. FHLMC guarantees the
timely payment of interest and ultimate collection of principal, but Freddie
Macs are not backed by the full faith and credit of the U.S. Government.

As described in the Prospectus, the yields available from U.S.
Government securities are generally lower than the yields available from
corporate fixed-income securities. Like other fixed-income securities, however,
the values of U.S. Government securities change as interest rates fluctuate.
Fluctuations in the value of portfolio securities will not affect interest
income on existing portfolio securities but will be reflected in the Fund's net
asset value.

WHEN-ISSUED SECURITIES

When-issued securities are agreements with banks or broker-dealers for
the purchase or sale of securities at an agreed-upon price on a specified future
date. Such agreements might be entered into, for example, when a Fund that
invests in fixed income securities anticipates a decline in interest rates and
is able to obtain a more advantageous yield by committing currently to purchase
securities to be issued later. When a Fund purchases securities on a when-issued
or delayed-delivery basis, it is required to create a segregated account with
the Trust's custodian and to maintain in that account liquid assets in an amount
equal to or greater than, on a daily basis, the amount of the Fund's when-issued
or delayed-delivery commitments. Each Fund will make commitments to purchase on
a when-issued or delayed-delivery basis only securities meeting that Fund's
investment criteria. The Fund may take delivery of these securities or, if it is
deemed advisable as a matter of investment strategy, the Fund may sell these
securities before the settlement date. When the time comes to pay for
when-issued or delayed-delivery securities, the Fund will meet its obligations
from then available cash flow or the sale of securities, or from the sale of the
when-issued or delayed-delivery securities themselves (which may have a value
greater or less than the Fund's payment obligation).

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<PAGE>

CONVERTIBLE SECURITIES

Convertible securities include corporate bonds, notes or preferred
stocks of U.S. or foreign issuers that can be converted into (that is, exchanged
for) common stocks or other equity securities. Convertible securities also
include other securities, such as warrants, that provide an opportunity for
equity participation. Because convertible securities can be converted into
equity securities, their values will normally vary in some proportion with those
of the underlying equity securities.

ZERO COUPON BONDS

Zero coupon bonds are debt obligations that do not entitle the holder
to any periodic payments of interest either for the entire life of the
obligation or for an initial period after the issuance of the obligations. Such
bonds are issued and traded at a discount from their face amounts. The amount of
the discount varies depending on such factors as the time remaining until
maturity of the bonds, prevailing interest rates, the liquidity of the security
and the perceived credit quality of the issuer. The market prices of zero coupon
bonds generally are more volatile than the market prices of securities that pay
interest periodically and are likely to respond to changes in interest rates to
a greater degree than non-zero coupon bonds having similar maturities and credit
quality. In order to satisfy a requirement for qualification as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"), each Fund must distribute each year at least 90% of its net investment
income, including the original issue discount accrued on zero coupon bonds.
Because a Fund investing in zero coupon bonds will not on a current basis
receive cash payments from the issuer in respect of accrued original issue
discount, the Fund may have to distribute cash obtained from other sources in
order to satisfy the 90% distribution requirement under the Code. Such cash
might be obtained from selling other portfolio holdings of the Fund. In some
circumstances, such sales might be necessary in order to satisfy cash
distribution requirements even though investment considerations might otherwise
make it undesirable for the Fund to sell such securities at such time.

REPURCHASE AGREEMENTS

Under a repurchase agreement, a Fund purchases a security and obtains a
simultaneous commitment from the seller (a bank or, to the extent permitted by
the 1940 Act, a recognized securities dealer) to repurchase the security at an
agreed upon price and date (usually seven days or less from the date of original
purchase). The resale price is in excess of the purchase price and reflects an
agreed upon market rate unrelated to the coupon rate on the purchased security.
Such transactions afford the Fund the opportunity to earn a return on
temporarily available cash at minimal market risk. While the underlying security
may be a bill, certificate of indebtedness, note or bond issued by an agency,
authority or instrumentality of the U.S. Government, the obligation of the
seller is not guaranteed by the U.S. Government and there is a risk that the
seller may fail to repurchase the underlying security. In such event, the Fund
would attempt to exercise rights with respect to the underlying security,
including possible disposition in the market. However, the Fund may be subject
to various delays and risks of loss, including (a) possible declines in the
value of the underlying security during the period while the Fund seeks to
enforce its rights thereto, (b) possible reduced levels of income and lack of
income during this period and (c) inability to enforce rights and the expenses
involved in attempted enforcement.

REAL ESTATE INVESTMENT TRUSTS

REITs involve certain unique risks in addition to those risks
associated with investing in the real estate industry in general (such as
possible declines in the value of real estate, lack of availability of mortgage
funds or extended vacancies of property). Equity REITs may be affected by
changes in the value of the underlying property owned by the REITs, while
mortgage REITs may be affected by the quality of any credit extended. REITs are
dependent upon management skills, are not diversified, and are subject to heavy
cash flow dependency, risks of default by borrowers and self-liquidation. REITs
are also subject to the possibilities of failing to qualify

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<PAGE>

for tax-free pass-through of income under the Code, and failing to maintain
their exemptions from registration under the 1940 Act.

Investment in REITs involves risk similar to those associated with
investing in small capitalization companies. REITs may have limited financial
resources, may trade less frequently and in a limited volume and may be subject
to more abrupt or erratic price movements than larger securities.

RULE 144A SECURITIES

Rule 144A securities are privately offered securities that can be
resold only to certain qualified institutional buyers. Rule 144A securities are
treated as illiquid, unless Loomis Sayles has determined, under guidelines
established by the Trust's trustees, that the particular issue of Rule 144A
securities is liquid. Under the guidelines, Loomis Sayles considers such factors
as: (1) the frequency of trades and quotes for a security; (2) the number of
dealers willing to purchase or sell the security and the number of other
potential purchasers; (3) dealer undertakings to make a market in the security;
and (4) the nature of the security and the nature of the marketplace trades in
the security.

TAX-EXEMPT FIXED INCOME SECURITIES

Tax-exempt fixed income securities include debt obligations issued to
obtain funds for various public purposes, including the construction of a wide
range of public facilities such as bridges, highways, hospitals, housing, mass
transportation, schools, streets, and water and sewer works. Other public
purposes for which tax-exempt fixed income securities may be issued include the
refunding of outstanding obligations, obtaining funds for general operating
expenses, and obtaining funds to lend to other public institutions and
facilities. In addition, prior to the Tax Reform Act of 1986, certain debt
obligations known as industrial development bonds could be issued by or on
behalf of public authorities to obtain funds to provide privately operated
housing facilities, sports facilities, convention or trade show facilities,
airport, mass transit, port or parking facilities, air or water pollution
control facilities and certain local facilities for water supply, gas,
electricity, or sewage or solid waste disposal. Such obligations are included
within the term tax-exempt fixed income securities if the interest paid thereon
is, in the opinion of bond counsel, exempt from federal income tax. Interest on
certain industrial development bonds used to fund the construction, equipment,
repair or improvement of privately operated industrial or commercial facilities
may also be exempt from federal income tax. The Tax Reform Act of 1986
eliminated some types of tax-exempt industrial revenue bonds but retained others
under the general category of "private activity bonds." The interest on
so-called "private activity bonds" is exempt from ordinary federal income
taxation but is treated as a tax preference item in computing a shareholder's
alternative minimum tax liability. The Municipal Bond Fund may invest up to 20%
of its net assets in private activity bonds.

The Municipal Bond Fund may not be a desirable investment for
"substantial users" of facilities financed by industrial development bonds or
for "related persons" of substantial users. See "Income Dividends, Capital Gain
Distributions and Tax Status."

The two principal classifications of tax-exempt fixed income securities
are general obligation bonds and limited obligation (or revenue) bonds. General
obligation bonds are obligations involving the credit of an issuer possessing
taxing power and are payable from the issuer's general unrestricted revenues and
not from any particular fund or source. The characteristics and method of
enforcement of general obligation bonds vary according to the law applicable to
the particular issuer, and payment may be dependent upon an appropriation by the
issuer's legislative body. Limited obligation bonds are payable only from the
revenues derived from a particular facility or class of facilities, or in some
cases from the proceeds of a special excise or other specific revenue source
such as the user of the facility. Tax-exempt industrial development bonds and
private activity bonds are in most cases revenue bonds and generally are not
payable from the unrestricted revenues of the issuer.

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<PAGE>

The credit and quality of such fixed income securities are usually directly
related to the credit standing of the corporate user of the facilities.
Principal and interest on such fixed income securities is the responsibility of
the corporate user (and any guarantor).

Prices and yields on tax-exempt fixed income securities are dependent
on a variety of factors, including general money market conditions, the
financial condition of the issuer, general conditions of the tax-exempt bond
market, the size of a particular offering, the maturity of the obligation and
the rating of the issue. A number of these factors, including the ratings of
particular issues, are subject to change from time to time. Information about
the financial condition of an issuer of tax-exempt fixed income securities may
not be as extensive as that made available by corporations whose securities are
publicly traded.

As noted in the Prospectus, obligations of issuers of tax-exempt fixed
income securities are subject to the provisions of bankruptcy, insolvency and
other laws, such as the Federal Bankruptcy Reform Act of 1978, affecting the
rights and remedies of creditors. Congress or state legislatures may seek to
extend the time for payment of principal or interest, or both, or to impose
other constraints upon enforcement of such obligations. There is also the
possibility that, as a result of litigation or other conditions, the power or
ability of issuers to meet their obligations for the payment of interest and
principal on their tax-exempt fixed income securities may be materially
affected, or their obligations may be found to be invalid or unenforceable. Such
litigation or conditions may from time to time have the effect of introducing
uncertainties in the market for tax-exempt fixed income securities or certain
segments thereof, or materially affecting the credit risk with respect to
particular fixed income securities. Adverse economic, business, legal or
political developments might affect all or a substantial portion of the Fund's
tax-exempt fixed income securities in the same manner.

From time to time the Municipal Bond Fund may have less than 80% of its
net assets invested in tax-exempt fixed income securities (1) for defensive
purposes when deemed prudent in the judgment of Loomis Sayles to protect
shareholders' capital or (2) on a temporary basis for liquidity purposes or
pending the investment of proceeds from sales of Fund shares. The ability of the
Fund to invest in securities other than tax-exempt fixed income securities is
limited by a requirement of the Code that at least 50% of the Fund's assets be
invested in tax-exempt securities at the end of each calendar quarter in order
to pass through to shareholders the tax-exempt interest earned by the Fund. See
"Income Dividends, Capital Gain Distributions and Tax Status."

The Municipal Bond Fund may purchase and sell portfolio investments to
take advantage of changes or anticipated changes in yield relationships, markets
or economic conditions. The Fund may also sell tax-exempt fixed income
securities due to changes in the adviser's evaluation of the issuer or cash
needs resulting from redemption requests for Fund shares. The secondary market
for tax-exempt fixed income securities typically has been less liquid than that
for taxable debt securities, and this may affect the Fund's ability to sell
particular tax-exempt fixed income securities, especially in periods when other
investors are attempting to sell the same securities.

FOREIGN CURRENCY TRANSACTIONS

Since investment in securities of foreign issuers will usually involve
currencies of foreign countries, and since a Fund may temporarily hold funds in
bank deposits in foreign currencies during the course of investment programs,
the value of the assets of a Fund as measured in U.S. dollars may be affected by
changes in currency exchange rates and exchange control regulations, and a Fund
may incur costs in connection with conversion between various currencies.

A Fund may enter into forward contracts under two circumstances. First,
when a Fund enters into a contract for the purchase or sale of a security
denominated or traded in a market in which settlement is made in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security. By
entering into a forward

8
<PAGE>

contract for the purchase or sale, for a fixed amount of dollars, of the amount
of foreign currency involved in the underlying transactions, the Fund will be
able to protect itself against a possible loss resulting from an adverse change
in the relationship between the U.S. dollar and the subject foreign currency
during the period between the date on which the investment is purchased or sold
and the date on which payment is made or received.

Second, when Loomis Sayles believes that the currency of a particular
country may suffer a substantial decline against another currency, it may enter
into a forward contract to sell, for a fixed amount of another currency, the
amount of the first currency approximating the value of some or all of the
Fund's portfolio investments denominated in the first currency. The precise
matching of the forward contract amounts and the value of the securities
involved will not generally be possible since the future value of such
securities in a currency will change as a consequence of market movements in the
value of those investments between the date the forward contract is entered into
and the date it matures.

The Funds generally will not enter into forward contracts with a term
of greater than one year.

Options on foreign currencies are similar to forward contracts, except
that one party to the option (the holder) is not contractually bound to buy or
sell the specified currency. Instead, the holder has discretion whether to
"exercise" the option and thereby require the other party to buy or sell the
currency on the terms specified in the option. Options transactions involve
transaction costs and, like forward contract transactions, involve the risk that
the other party may default on its obligations (if the options are not traded on
an established exchange) and the risk that expected movements in the relative
value of currencies may not occur, resulting in an imperfect hedge or a loss to
the Fund.

Each Fund, in conjunction with its transactions in forward contracts,
options and futures, will maintain in a segregated account with its custodian
liquid assets with a value, marked to market on a daily basis, sufficient to
satisfy the Fund's outstanding obligations under such contracts, options and
futures.

OPTIONS

An option entitles the holder to receive (in the case of a call option)
or to sell (in the case of a put option) a particular security at a specified
exercise price. An "American style" option allows exercise of the option at any
time during the term of the option. A "European style" option allows an option
to be exercised only at the end of its term. Options may be traded on or off an
established securities exchange.

If the holder of an option wishes to terminate its position, it may
seek to effect a closing sale transaction by selling an option identical to the
option previously purchased. The effect of the purchase is that the previous
option position will be canceled. A Fund will realize a profit from closing out
an option if the price received for selling the offsetting position is more than
the premium paid to purchase the option; the Fund will realize a loss from
closing out an option transaction if the price received for selling the
offsetting option is less than the premium paid to purchase the option.

The use of options involves risks. One risk arises because of the
imperfect correlation between movements in the price of options and movements in
the price of the securities that are the subject of the hedge. The Fund's
hedging strategies will not be fully effective if such imperfect correlation
occurs.

Price movement correlation may be distorted by illiquidity in the
options markets and the participation of speculators in such markets. If an
insufficient number of contracts are traded, commercial users may not deal in
options because they do not want to assume the risk that they may not be able to
close out their positions within a reasonable amount of time. In such instances,
options market prices may be driven by different forces than those driving the
market in the underlying securities, and price spreads between these markets may
widen. The

9
<PAGE>

participation of speculators in the market enhances its liquidity. Nonetheless,
the trading activities of speculators in the options markets may create
temporary price distortions unrelated to the market in the underlying
securities.

An exchange-traded option may be closed out only on an exchange which
generally provides a liquid secondary market for an option of the same series.
If a liquid secondary market for an exchange-traded option does not exist, it
might not be possible to effect a closing transaction with respect to a
particular option, with the result that the Fund would have to exercise the
option in order to accomplish the desired hedge. Reasons for the absence of a
liquid secondary market on an exchange include the following: (i) there may be
insufficient trading interest in certain options; (ii) restrictions may be
imposed by an exchange on opening transactions or closing transactions or both;
(iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying securities;
(iv) unusual or unforeseen circumstances may interrupt normal operations on an
exchange; (v) the facilities of an exchange or the Options Clearing Corporation
or other clearing organization may not at all times be adequate to handle
current trading volume; or (vi) one or more exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been issued by the Options Clearing Corporation as a result of trades on that
exchange would continue to be exercisable in accordance with their terms.

The successful use of options depends in part on the ability of Loomis
Sayles to forecast correctly the direction and extent of interest rate, stock
price or currency value movements within a given time frame. To the extent
interest rates, stock prices or currency values move in a direction opposite to
that anticipated, the Fund may realize a loss on the hedging transaction that is
not fully or partially offset by an increase in the value of portfolio
securities. In addition, whether or not interest rates or the relevant stock
price or relevant currency values move during the period that the Fund holds
options positions, the Fund will pay the cost of taking those positions (i.e.,
brokerage costs). As a result of these factors, the Fund's total return for such
period may be less than if it had not engaged in the hedging transaction.

An over-the-counter option (an option not traded on an established
exchange) may be closed out only with the other party to the original option
transaction. While the Fund will seek to enter into over-the-counter options
only with dealers who agree to or are expected to be capable of entering into
closing transactions with the Fund, there can be no assurance that the Fund will
be able to liquidate an over-the-counter option at a favorable price at any time
prior to its expiration. Accordingly, the Fund might have to exercise an
over-the-counter option it holds in order to achieve the intended hedge.
Over-the-counter options are not subject to the protections afforded purchasers
of listed options by the Options Clearing Corporation or other clearing
organization.

The staff of the SEC has taken the position that over-the-counter
options should be treated as illiquid securities for purposes of each Fund's
investment restriction prohibiting it from investing more than 15% of its net
assets in illiquid securities. The Funds intend to comply with this position.

Income earned by a Fund from its hedging activities will be treated as
capital gain and, if not offset by net recognized capital losses incurred by the
Fund, will be distributed to shareholders in taxable distributions. Although
gain from options transactions may hedge against a decline in the value of a
Fund's portfolio securities, that gain, to the extent not offset by losses, will
be distributed in light of certain tax considerations and will constitute a
distribution of that portion of the value preserved against decline.

SMALL COMPANIES

Investments in companies with relatively small capitalization may
involve greater risk than is usually associated with more established companies.
These companies often have limited product lines, markets or

10
<PAGE>

financial resources and they may be dependent upon a relatively small management
group. Their securities may have limited marketability and may be subject to
more abrupt or erratic movements in price than securities of companies with
larger capitalization or market averages in general. The net asset values of
funds that invest in companies with smaller capitalization therefore may
fluctuate more widely than market averages.

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<PAGE>

MANAGEMENT OF THE TRUST

The trustees of the Trust supervise the affairs of the Trust and have
the other responsibilities assigned to them by the laws of the Commonwealth of
Massachusetts. The trustees and officers of the Trust, their ages, and their
principal occupations during the past five years are as follows:

JOSEPH ALAIMO (69)--Trustee. 727 N. Bank Lane, Lake Forest, Illinois.
President, Wintrust Asset Management Company.

RICHARD S. HOLWAY (73)--Trustee. 1314 Seaspray Lane, Sanibel, Florida.
Retired; formerly Vice President, Loomis Sayles. Director, Sandwich Cooperative
Bank.

MICHAEL T. MURRAY (69)--Trustee. 404 N. Western Ave., Lake Forest,
Illinois. Retired; formerly Vice President, Loomis Sayles.

DANIEL J. FUSS(1) (66)--President and Trustee. Vice Chairman and
Director, Loomis Sayles.

ROBERT J. BLANDING (52)--Executive Vice President. 555 California
Street, San Francisco, California. President, Chairman, Director and Chief
Executive Officer, Loomis Sayles.

MARK W. HOLLAND (50)--Treasurer. Vice President, Finance and
Administration and Director, Loomis Sayles.

PHILIP R. MURRAY ( )--Assistant Treasurer. Vice President and
Treasurer, Loomis Sayles.

NICHOLAS H. PALMERINO ( )--Assistant Treasurer. Vice President, Loomis
Sayles.

SHEILA M. BARRY (54)--Secretary and Compliance Officer. Assistant
General Counsel and Vice President, Loomis Sayles. Formerly, Senior Counsel and
Vice President, New England Funds, L.P.

BONNIE S. THOMPSON ( )--Assistant Secretary. Senior Blue Sky Paralegal,
Loomis Sayles.

DAWN M. ALSTON-PAIGE (35)--Vice President. 1533 N. Woodward, Bloomfield
Hills, Michigan. Vice President, Loomis Sayles.

MARK BARIBEAU (40)--Vice President. Vice President, Loomis Sayles.

JAMES C. CARROLL (49)--Vice President. 1533 N. Woodward, Bloomfield
Hills, Michigan. Vice President, Loomis Sayles. Formerly Managing Director and
Senior Energy Analyst at Paine Webber, Inc.

MARY C. CHAMPAGNE (43)--Vice President. 1533 N. Woodward, Bloomfield
Hills, Michigan. Vice President, Loomis Sayles.

E. JOHN DEBEER (61)--Vice President. Vice President, Loomis Sayles.

RODERICK H. DILLON, JR. (43)--Vice President. 2001 Pensylvania Avenue,
N.W., Suite 200, Washington, DC. Vice President, Loomis Sayles.

- --------
(1) Trustee deemed an "interested person" of the Trust, as defined
by the 1940 Act.

12
<PAGE>

WILLIAM H. EIGEN, JR. (62)--Vice President. Vice President, Loomis
Sayles; formerly Vice President, INVESCO Funds Group and Vice President, The
Travelers Corp.

CHRISTOPHER R. ELY (44)--Vice President. Vice President, Loomis Sayles;
formerly Senior Vice President and portfolio manager, Keystone Investment
Management Company, Inc.

QUENTIN P. FAULKNER (60)--Vice President. Vice President, Loomis
Sayles.

PHILIP C. FINE (50)--Vice President. Vice President, Loomis Sayles;
formerly Vice President and portfolio manager, Keystone Investment Management
Company, Inc.

KATHLEEN C. GAFFNEY (38)--Vice President. Vice President, Loomis
Sayles.

ISAAC GREEN (38)--Vice President. 1533 N. Woodward, Bloomfield Hills,
Michigan. Executive Vice President and Director, Loomis Sayles.

MARTHA F. HODGMAN (48)--Vice President. Vice President, Loomis Sayles.

JOHN HYLL (45)--Vice President. 555 California Street, San Francisco,
California.

JEFFREY L. MEADE (49)--Vice President. Executive Vice President, Chief
Operating Officer and Director, Loomis Sayles.

ESWAR MENON (35)--Vice President, 555 California Street, San Francisco,
California, Vice President, Loomis Sayles. Formerly, Portfolio Manager at
Nicholas Applegate Capital Management since 1995. From 1990-1995, he was
employed as an Equity Analyst by Koaneman Capital Management and as Senior
Engineer by Intergrated Device Technology.

ALEX MUROMCEW (36)--Vice President, 555 California Street, San
Francisco, California, Vice President, Loomis Sayles. Formerly, Portfolio
Manager at Nicholas Applegate Capital Management since 1995.
From 1993-1996, he was an investment analyst with Teton Partners, L.P.

KENT P. NEWMARK (61)--Vice President. 555 California Street, San
Francisco, California. Vice President, Managing Partner and Director, Loomis
Sayles.

JEFFREY C. PETHERICK (36)--Vice President. 1533 N. Woodward, Bloomfield
Hills, Michigan. Vice President, Loomis Sayles.

BRUCE G. PICARD, JR. (30)--Vice President. [ADDRESS] Vice President,
Loomis Sayles.

LAUREN B. PITALIS (39)--Vice President. Vice President, Loomis Sayles;
formerly Vice President and Assistant Secretary of Harris Associates Investment
Trust.

DAVID L. SMITH (46)--Vice President. Vice President, Loomis Sayles;
formerly Vice President and portfolio manager, Keystone Investment Management
Company, Inc.

SANDRA P. TICHENOR (50)--Vice President. 555 California Street, San
Francisco, California. General Counsel, Executive Vice President, Secretary and
Clerk, Loomis Sayles. Formerly Partner, Heller, Ehrman, White & McAuliffe.

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<PAGE>

JOHN TRIBOLET (29)--Vice President. [ADDRESS] Vice President, Loomis
Sayles. Formerly Portfolio Manager at Nicholas-Applegate Capital Management
since 1977. From 1995 to 1997, he was a full time MBA student at the University
of Chicago. Prior to 1995, he spent three years in the investment banking
industry, most recently at PaineWebber, Inc.

JEFFREY W. WARDLOW (39)--Vice President. 1533 N. Woodward, Bloomfield
Hills, Michigan. Vice President, Loomis Sayles.

GREGG D. WATKINS (51)--Vice President. 1533 N. Woodward, Bloomfield
Hills, Michigan. Vice President, Loomis Sayles.

ANTHONY J. WILKINS (57)--Vice President. Executive Vice President and
Director, Loomis Sayles.

Previous positions during the past five years with Loomis Sayles are
omitted if not materially different.

Except as indicated above, the address of each trustee and officer of
the Trust affiliated with Loomis Sayles is One Financial Center, Boston,
Massachusetts. The Trust pays no compensation to its officers or to the trustees
listed above who are directors, officers or employees of Loomis Sayles. Each
trustee who is not a director, officer or employee of Loomis Sayles is
compensated at the rate of $1,250 per Fund per annum.

14
<PAGE>

COMPENSATION TABLE
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
--- --- --- --- ---
TOTAL
COMPENSATION
PENSION OR ESTIMATED FROM TRUST AND
AGGREGATE RETIREMENT BENEFITS ANNUAL FUND COMPLEX*
NAME OF PERSON, COMPENSATION ACCRUED AS PART OF BENEFITS UPON PAID TO
POSITION FROM TRUST FUND EXPENSES RETIREMENT TRUSTEE
--------------- ------------ ------------------- ------------- --------------
<S> <C> <C> <C> <C>
Richard S. Holway, Trustee [$21,250] N/A N/A [$21,250]

Daniel J. Fuss, Trustee $0 N/A N/A $0

Michael T. Murray, Trustee [$21,250] N/A N/A [$21,250]
</TABLE>

- ---------

* No Trustee receives any compensation from any mutual funds affiliated with
Loomis Sayles, other than the Trust.

As of September 30, 1999, the officers and trustees of the Trust
collectively owned beneficially shares of each Fund as follows: _______ shares
of the Loomis Sayles Aggressive Growth Fund, _______ shares of the Loomis Sayles
Bond Fund, _______ shares of the Loomis Sayles Core Value Fund, _______ shares
of the Loomis Sayles Emerging Markets Fund, _______ shares of the Loomis Sayles
Global Bond Fund, _______ shares of the [Loomis Sayles Global Technology Fund],
_______ shares of the Loomis Sayles Growth Fund, _______ shares of the Loomis
SAYLES High Yield Fund, _______ shares of the Loomis Sayles Intermediate
Maturity Bond Fund, _______ shares of the Loomis Sayles International Equity
Fund, _______ shares of the Loomis Sayles Investment Grade Bond Fund, _______
shares of the Loomis Sayles Mid-Cap Value Fund, _______ shares of the Loomis
Sayles Municipal Bond Fund, _______ shares of the Loomis Sayles Short-Term Bond
Fund, _______ shares of the Loomis Sayles Small Cap Growth Fund, _______ shares
of the Loomis Sayles Small Cap Value Fund, _______ shares of the Loomis Sayles
U.S. Government Securities Fund, and _______ shares of the Loomis Sayles
Worldwide Fund. These amounts include shares held by the Loomis Sayles
Employees' Profit Sharing Plan (the "Profit Sharing Plan") for the accounts of
officers and trustees of the Trust, but exclude all other holdings of the Profit
Sharing Plan and the Loomis-Sayles Funded Pension Plan (the "Pension Plan"). As
of September 30, 1999, the Pension Plan owned the following percentages of the
outstanding Institutional Class shares of the indicated Funds: ___ of the Loomis
Sayles Bond Fund, ___ of the Loomis Sayles Core Value Fund, ___ of the Loomis
Sayles Global Bond Fund, ___ of the Loomis Sayles Growth Fund, ___ of the Loomis
Sayles Intermediate Maturity Bond Fund, ___ of the Loomis Sayles International
Equity Fund, ___ of the Loomis Sayles Short Term Bond Fund, ___ of the Loomis
Sayles Small Cap Growth Fund, ___ of the Loomis Sayles Small Cap Value Fund, ___
of the Loomis Sayles U.S. Government Securities Fund, and ___ of the Loomis
Sayles Worldwide Fund. As of September 30, 1999, the Profit Sharing Plan owned
the following percentages of the outstanding Institutional Class shares of the
indicated Funds: ___ of the Loomis Sayles Bond Fund, ___ of the Loomis Sayles
Core Value Fund, ___ of the Loomis Sayles Global Bond Fund, ___ of the Loomis
Sayles Growth Fund, ___ of the Loomis Sayles High Yield Fund, ___ of the Loomis
Sayles Intermediate Maturity Bond Fund, ___ of the Loomis Sayles International
Equity Fund, ___ of the Loomis Sayles Investment Grade Bond Fund, ___ of the
Loomis Sayles

15
<PAGE>

Mid-Cap Growth Fund, ___ of the Loomis Sayles Mid-Cap Value Fund, ___ of the
Loomis Sayles Short-Term Bond Fund, ___ of the Loomis Sayles Small Cap Growth
Fund, ___ of the Loomis Sayles Small Cap Value Fund, ___ of the Loomis Sayles
U.S. Government Securities Fund, and ___ of the Loomis Sayles Worldwide Fund.
The trustee of the Pension Plan is Fleet Investment Management. The Pension
Plan's Advisory Committee, which is composed of the same individuals listed
below as trustees of the Profit Sharing Plan, has the sole voting and investment
power with respect to the Pension Plan's shares. The trustees of the
Profit Sharing Plan are E. John deBeer, Quentin P. Faulkner, Sandra P. Tichenor,
Larry K. Shaw, Kathleen C. Gaffney, Mark W. Holland, and Patrick P. Hurley, all
of whom are officers and employees of Loomis Sayles and (except for Messrs.
Hurley and Shaw) trustees or officers of the Trust. Plan participants are
entitled to exercise investment and voting power over shares owned of record by
the Profit Sharing Plan. Shares not voted by participants are voted in the same
proportion as the shares voted by the voting participants. The address for the
Profit Sharing Plan and the Pension Plan is One Financial Center, Boston,
Massachusetts. At the date of this Statement of Additional Information, no
officer or trustee, and as of [date], except as noted below, no person, owns
more than 5% of the outstanding shares of any Fund. The amount of shares of each
Fund owned collectively by the trustees and officers of the Trust is less than
1% of the Fund.

16
<PAGE>

PRINCIPAL HOLDERS

The following table provides information on the principal holders of
each fund. A principal holder is a person who owns of record or beneficially 5%
or more of any class of a Fund's outstanding securities. Information provided in
this table is as of ___________ [no more than 30 days prior to the date of
filing].

INSTITUTIONAL CLASS SHARES
<TABLE>
<CAPTION>

PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -------------
<S> <C> <C>
LOOMIS SAYLES AGGRESSIVE
GROWTH FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

American National Bank 120 So. LaSalle St. ___
Howard Siegel or Catherine Chicago, IL 60603
Siegel Trust

LOOMIS SAYLES CORE VALUE FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

First Trust NA Trustee P.O. Box 64010 ___
Green Tree Financial Corp St. Paul, MN 55164
401K Plan

Asbestos Workers Local C/O Loomis Sayles & Co. Inc. ___
#84 Pension Fund 1593 North Woodward, Ste
300
Bloomfield Hills, MI 48304

John W. George, Trustee 590 Renaud ___
John W. George Trust Grosse Pointe, MI 48236
U/A/D 12/6/90

LOOMIS SAYLES EMERGING
MARKETS FUND

17
<PAGE>

LOOMIS SAYLES GLOBAL BOND FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

Northwest Bank MN NA P.O. Box 1450 NW 8477 ___
C/F Desert States UFCW Union Minneapolis, MN 55480
Employees Pension AC#1327982D

Fleet National Bank TTEE P.O. Box 92800 ___
Kaman Corp Master Trust Fixed Rochester, NY 14692
Income Fund U/A/D 10-1-96
Attn A/C# 0004884410

San Diego Transit Pension Plan P.O. Box 2511 ___
San Diego, CA 92112

LOOMIS SAYLES GLOBAL
TECHNOLOGY FUND

LOOMIS SAYLES GROWTH FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

Fiduciary Trust Co. Cust P.O. Box 3199 ___
FBO Scott R. Shoemaker Church St. Station
New York, NY 10008

Fiduciary Trust Co. Cust P.O. Box 3199 ___
FBO Charles Grant Shoemaker Church St. Station
New York, NY 10048

LOOMIS SAYLES HIGH YIELD FUND

Daniel J. Fuss 44 Longfellow Road ___
Wellesley, MA 02181

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

18
<PAGE>

Rosemary B. Fuss 44 Longfellow Road ___
Wellesley, MA 02181

LOOMIS SAYLES
INTERMEDIATE MATURITY BOND FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

Hawaii Sheet Metal Workers 1405 N. King St. Rm 403 ___
Health & Welfare Fund Honolulu, HI 96817

Pomona College Alexander Hall ___
550 N. College Ave.
Claremont, CA 91711

LOOMIS SAYLES
INTERNATIONAL EQUITY FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

Comerica Bank FBO P.O. Box 75000 MC 3446 ___
City of Livonia Employee Detroit, MI 48275
Retirement System A/C 82150B

The Security Mutual Life 200 Centennial Mall North ___
Insurance Co. of P.O. Box 82248
Lincoln Nebraska Lincoln, NE 68501

LOOMIS SAYLES
INVESTMENT GRADE BOND FUND

Loomis Sayles & Company, L.P. Attn: Paul Sherba ___
One Financial Center
Boston, MA 02111

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

19
<PAGE>

Pomona College Alexander Hall ___
550 N. College Ave.
Claremont, CA 91711

LOOMIS SAYLES MID-CAP VALUE FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

John W. George, Jr. Trustee 590 Renaud ___
John W. George, Jr. Trust Grosse Pointe, MI 48236
U/A/D 12/6/90

Carey & Co. P.O. Box 1558 ___
C/O Huntington National Bank Columbus, OH 43260
Attn: Mutual Funds HC1024

LOOMIS SAYLES MUNICIPAL BOND FUND

John W. George Jr. Trustee 590 Renaud ___
John W. George Jr. Trust Grosse Pointe, MI 48236
U/A/D 12/6/90

Ann A. Morris Trustee General Delivery ___
Ann A. Morris Trust Lummi Island, WA 98262

LOOMIS SAYLES SHORT-TERM
BOND FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

NFSC FEBO #179-257206 54 Jemez Canyon Road ___
Santa Ana Non-Profit Enterprise Box 9201
Bernalillo, NM 87004

George R. Rodrigues, Jr. 1109 Bethel St. Ste. 403 ___
Herbert S K Kaopua Sr TTEES Honolulu, HI 96813
Pamcah-UA Local 675

20
<PAGE>

Health & Welfare DTD 9/1/61

John W. George Jr. Trustee 590 Renaud ___
John W. George Jr. Trust Grosse Pointe, MI 48236
U/A/D 12/6/90

LOOMIS SAYLES SMALL CAP
GROWTH FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

The Community Foundation 456 King St. ___

Serving Coastal SC Charleston, SC 29403

Donaldson Lufkin Jenrette P.O. Box 2052 ___
Securities Corporation Jersey City, NJ 07303

Trussal & Co. P.O. Box 771072 ___
Detroit, MI 48277

Fifth Third Bank, Trustee P.O. Box 630074 ___
Catholic Community Foundation Cincinnati, OH 45263

Covie & Co. 5101 N. Francisco Ave. ___
C/O Covenant Trust Co. Chicago, IL 60625

Carey & Co. P.O. Box 1558 ___
Columbus, OH 43216

LOOMIS SAYLES SMALL CAP
VALUE FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

Smith Barney Inc. 333 West 34th St.; 7th Fl. ___
Book Entry Account New York, NY 10001

LOOMIS SAYLES U.S.
GOVERNMENT SECURITIES FUND

21
<PAGE>

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

LOOMIS SAYLES WORLDWIDE FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104
</TABLE>

22
<PAGE>

RETAIL CLASS SHARES
<TABLE>
<CAPTION>

PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD

<S> <C> <C>
LOOMIS SAYLES AGGRESSIVE
GROWTH FUND

Jane F. Clark 140 Enid Ln ___
Northfield, IL 60093

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

NFSC FEBO #127-599832 306 Hackensack St. ___
FBO Santo J. Pittsman Wood Ridge, NJ 07075

LOOMIS SAYLES CORE VALUE FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

Jupiter & Co. P.O. Box 9130 ___
C/O Investors Bank & Trust Boston, MA

NFSC FEBO 2651 Sleepy Hollow Dr. ___
Stephen M. Keil State College, PA 16803

LOOMIS SAYLES GLOBAL BOND FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
Attn. Mutual Fund Dept. San Francisco, CA 94104

Southwest Securities, Inc. P.O. Box 509002 ___
FBO First National Bank Dallas, TX 75250
Edinburg

LOOMIS SAYLES GROWTH FUND

Angelo V. Glorioso 225 Summit Dr. ___
Pittsburgh, PA 15238

23
<PAGE>

Charles Schwab & Co. Inc. 101 Montgomery St. ___
Attn. Mutual Fund Dept. San Francisco, CA 94104

NFSC FEBO 900 Palisade Ave. ___
FMT CO CUST IRA Fort Lee, NJ 07024
Rollover
Leslie G. Brady

LOOMIS SAYLES
INTERMEDIATE MATURITY BOND FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

LOOMIS SAYLES
INTERNATIONAL EQUITY FUND

CIBC Oppenheimer Corp. P.O. Box 3484 ___
FBO 371-11893-10 Church St. Station
New York, NY 10008

LOOMIS SAYLES INVESTMENT GRADE BOND FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

NFSC FEBO #157-197300 4 Buxton Lane ___
FBO George D. Dugan Riverside, CT 06878

NFSC FEBO #z11-056570 4545 SW 97th Terrace ___
Sappington Revocable Gainesville, FL 32608
Living Trust

LOOMIS SAYLES MID-CAP VALUE FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

Donaldson Lufkin Jenrette One Pershing Plaza--7th Fl ___
Securities Corporation Inc. Jersey City, NJ 07303

24
<PAGE>

LOOMIS SAYLES SHORT-TERM BOND FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

Donaldson Lufkin Jenrette P.O. Box 2052 ___
Securities Corporation Inc. Jersey City, NJ 07303

NFSC FEBO #201-528218 245 Tower Rd. ___
FBO Carmine A. Greco Lincoln, MA 01773

Donaldson Lufkin Jenrette P.O. Box 2052 ___
Securities Corporation Inc. Jersey City, NJ 07303

State Street Bank & Trust Co. 405 S. Yucca Dr. ___
C/F The IRA of Wickenburg, AZ 85390
Roger E. Wakefield

LOOMIS SAYLES SMALL CAP GROWTH FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

MO Institute of Sports
Medicine 621 New Ballas ___
Profit Sharing Plan & Trust Suite 101
DTD 5/1/80 St. Louis, MO 63141

LOOMIS SAYLES SMALL CAP VALUE FUND

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

First Trust National Association 180 East Fifth St. ___
Trustee for United Healthcare P.O. Box 64488
401K Savings Plan St. Paul, MN 55164

Chase Manhattan Bank Trustee 770 Broadway ___
Metlife Defined Contribution 10th Floor
Group; Attn: Cindy Chu New York, NY 10003

25
<PAGE>

LOOMIS SAYLES WORLDWIDE FUND

Donaldson Lufkin Jenrette P.O. Box 2052 ___
Securities Corporation Inc. Jersey City, NJ 07303

State Street Bank &Trust Co. 235 Arlington Road Apt. 214 ___
Custodian for the IRA of Redwood City, CA 94062
Benjamin T. Ream

Charles Schwab & Co. Inc. 101 Montgomery St. ___
San Francisco, CA 94104

National Investor Services 55 Water St. ___
Corp. New York, NY 10041
FBO Our Customers
Mutual Funds Dept. 32nd
Floor

Donaldson Lufkin Jenrette P.O. Box 2052 ___
Securities Corporation Inc. Jersey City, NJ 07303
</TABLE>

26
<PAGE>

ADMIN CLASS SHARES
<TABLE>
<CAPTION>
SHAREHOLDER ADDRESS PERCENTAGE OF SHARES HELD

LOOMIS SAYLES BOND FUND

LOOMIS SAYLES SMALL CAP VALUE FUND

<S> <C> <C>
Smith Barney Corp. Trust Two Tower Center ___
Smith Barney 401k Adviser P.O. Box 1063
Group Trust E. Brunswick, NJ 08816

Merrill Lynch Trust Co. 265 Davidson Ave. ___
FBO Qualified Retirement Somerset, NJ 08873
Plans
</TABLE>

27
<PAGE>

CLASS A SHARES

LOOMIS SAYLES AGGRESSIVE GROWTH FUND

LOOMIS SAYLES TECHNOLOGY FUND

To the extent that any shareholder listed above beneficially owns more
than 25% of a Fund, it may be deemed to "control" such Fund. [list holder's
jurisdiction and parents if holder is a control person]

28
<PAGE>

INVESTMENT ADVISORY AND OTHER SERVICES

ADVISORY AGREEMENTS. Under each advisory agreement, Loomis Sayles
manages the investment and reinvestment of the assets of the relevant Fund and
generally administers its affairs, subject to supervision by the board of
trustees of the Trust. Loomis Sayles furnishes, at its own expense, all
necessary office space, facilities and equipment, services of executive and
other personnel of the Funds and certain administrative services. For these
services, the advisory agreements provide that each Fund shall pay Loomis Sayles
a monthly investment advisory fee at the following annual percentage rates of
the particular Fund's average daily net assets:

<TABLE>
<CAPTION>
FUND RATE
---- ----
<S> <C>
Loomis Sayles Aggressive Growth Fund .75%
Loomis Sayles Bond Fund .60
Loomis Sayles Core Value Fund .50
Loomis Sayles Emerging Markets Fund 1.25
Loomis Sayles Global Bond Fund .60
Loomis Sayles Global Technology Fund 1.00
Loomis Sayles Growth Fund .50
Loomis Sayles High Yield Fund .60
Loomis Sayles Intermediate Maturity Bond Fund .40
Loomis Sayles International Equity Fund .75
Loomis Sayles Investment Grade Bond Fund .40
Loomis Sayles Mid-Cap Value Fund .75
Loomis Sayles Municipal Bond Fund .30
Loomis Sayles Short-Term Bond Fund .25
Loomis Sayles Small Cap Growth Fund .75
Loomis Sayles Small Cap Value Fund .75
Loomis Sayles U.S. Government Securities Fund .30
Loomis Sayles Worldwide Fund .75
</TABLE>

During the periods shown below, pursuant to the advisory agreements
described above, Loomis Sayles received the following amount of investment
advisory fees from each Fund (before voluntary fee reductions and expense
assumptions) and bore the following amounts of fee reductions and expense
assumptions for each Fund:

29
<PAGE>

FISCAL YEAR ENDED NINE MONTHS ENDED FISCAL YEAR ENDED
12/31/97 9/30/98* 9/30/99

Fee Waivers Fee Waivers Fee Waivers
Advisory and Expense Advisory and Expense Advisory and Expense
Fund Fees Assumptions Fees Assumptions Fees Assumptions
<S> <C> <C> <C> <C> <C> <C>
Loomis Sayles Aggressive Growth Fund $ 11,993 $151,104 $ 11,818 $109,517 $ $
Loomis Sayles Bond Fund 5,460,675 197,170 6,920,645 112,593
Loomis Sayles Core Value Fund
Loomis Sayles Emerging Markets Fund
Loomis Sayles Global Bond Fund 178,622 123,445 155,995 85,930
Loomis Sayles Global Technology
Loomis Sayles Growth Fund 174,976 74,929 114,917 52,384
Loomis Sayles High Yield Fund 34,062 185,981 50,667 141,220
Loomis Sayles Intermediate Maturity
Bond Fund 17,125 147,955 25,473 122,162
Loomis Sayles International Equity Fund 705,111 178,102 451,871 124,877
Loomis Sayles Investment Grade Bond
Fund 8,585 162,568 12,300 119,899
Loomis Sayles Mid-Cap Value Fund 18,691 158,363 23,688 117,826
Loomis Sayles Municipal Bond Fund 34,082 102,318 28,142 77,070
Loomis Sayles Short-Term Bond Fund 41,211 143,266 45,845 74,443
Loomis Sayles Small Cap Value Fund 1,581,667 12,741 1,981,662 5,254
Loomis Sayles Small Cap Growth Fund 24,894 170,503 67,049 117,517
Loomis Sayles U.S. Government
Securities Fund 55,096 87,088 65,031 60,872
Loomis Sayles Worldwide Fund 55,489 148,392 32,580 112,466
</TABLE>

* The fiscal year-end for each of the Funds changed to September 30 in 1998.

The Trust pays the compensation of its trustees who are not directors,
officers or employees of Loomis Sayles or its affiliates (other than registered
investment companies); registration, filing and other fees in connection with
requirements of regulatory authorities; all charges and expenses of its
custodian and transfer agent; the charges and expenses of its independent
accountants; all brokerage commissions and transfer taxes in connection with
portfolio transactions; all taxes and fees payable to governmental agencies; the
cost of any certificates representing shares of the Funds; the expenses of
meetings of the shareholders and trustees of the Trust; the charges and expenses
of the Trust's legal counsel; interest on any borrowings by the Funds; the cost
of services, including services of counsel, required in connection with the
preparation of, and the cost of printing, the Trust's registration statements
and Prospectus, including amendments and revisions thereto, annual, semiannual
and other periodic reports of the Trust, and notices and proxy solicitation
material furnished to shareholders or regulatory authorities, to the extent that
any such materials relate to the Trust or its shareholders; and the Trust's
expenses of bookkeeping, accounting, auditing and financial reporting, including
related clerical expenses.

30
<PAGE>

Under each advisory agreement, if the total ordinary business expenses
of a Fund or the Trust as a whole for any fiscal year exceed the lowest
applicable limitation (based on percentage of average net assets or income)
prescribed by any state in which the shares of the Fund or the Trust are
qualified for sale, Loomis Sayles shall pay such excess. Loomis Sayles will not
be required to reduce its fee or pay such expenses to an extent or under
circumstances which would result in any Fund's inability to qualify as a
regulated investment company under the Code. The term "expenses" is defined in
the advisory agreements or in relevant state regulations and excludes brokerage
commissions, taxes, interest, distribution-related expenses and extraordinary
expenses.

As described in the Prospectus, Loomis Sayles has agreed to certain
additional, voluntary arrangements to limit Fund expenses. These arrangements
may be modified or terminated by Loomis Sayles at any time.

Each advisory agreement provides that it will continue in effect for
two years from its date of execution and thereafter from year to year if its
continuance is approved at least annually (i) by the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the
relevant Fund and (ii) by vote of a majority of the Trustees who are not
"interested persons" of the Trust, as that term is defined in the 1940 Act, cast
in person at a meeting called for the purpose of voting on such approval. Any
amendment to an advisory agreement must be approved by vote of a majority of the
outstanding voting securities of the relevant Fund and by vote of a majority of
the Trustees who are not such interested persons, cast in person at a meeting
called for the purpose of voting on such approval. Each agreement may be
terminated without penalty by vote of the Board of Trustees or by vote of a
majority of the outstanding voting securities of the relevant Fund, upon sixty
days' written notice, or by Loomis Sayles upon ninety days' written notice, and
each terminates automatically in the event of its assignment. In addition, each
agreement will automatically terminate if the Trust or the Fund shall at any
time be required by Loomis Sayles to eliminate all reference to the words
"Loomis" and "Sayles" in the name of the Trust or the Fund, unless the
continuance of the agreement after such change of name is approved by a majority
of the outstanding voting securities of the relevant Fund and by a majority of
the Trustees who are not interested persons of the Trust or Loomis Sayles.

Each advisory agreement provides that Loomis Sayles shall not be
subject to any liability in connection with the performance of its services
thereunder in the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties.

Loomis Sayles acts as investment adviser or subadviser to New England
Value Fund, New England Strategic Income Fund, New England Star Advisers Fund;
New England Star Small Cap Fund and New England Balanced Fund, which are series
of New England Funds Trust I, a registered open- end management investment
company, New England High Income Fund, a series of New England Fund Trust II, a
registered, open-end management investment company, and to the Loomis Sayles
Balanced Series and the Loomis Sayles Small Cap Series of New England Zenith
Fund, which is also a registered open-end management investment company, as well
as to Loomis Sayles Investment Trust, also a registered open-end management
investment company. Loomis Sayles also provides investment advice to certain
other open-end management investment companies and numerous other corporate and
fiduciary clients.

The general partner of Loomis Sayles is a special purpose corporation
that is an indirect wholly-owned subsidiary of Nvest Companies, L.P. ("Nvest
Companies"). Nvest Companies' managing general partner, Nvest Corporation, is a
direct wholly-owned subsidiary of Metropolitan Life Insurance Company ("Met
Life"), a mutual life insurance company. Nvest Companies' advising general
partner, Nvest L.P., is a publicly traded company listed on the New York Stock
Exchange. Nvest Corporation is the sole general partner of Nvest L.P.

Certain officers and trustees of the Trust also serve as officers,
directors and trustees of other investment companies and clients advised by
Loomis Sayles. The other investment companies and clients sometimes invest in
securities in which the Funds also invest. If a Fund and such other investment
companies or clients desire to buy

31
<PAGE>

or sell the same portfolio securities at the same time, purchases and sales may
be allocated, to the extent practicable, on a pro rata basis in proportion to
the amounts desired to be purchased or sold for each. It is recognized that in
some cases the practices described in this paragraph could have a detrimental
effect on the price or amount of the securities which a Fund purchases or sells.
In other cases, however, it is believed that these practices may benefit the
Funds. It is the opinion of the trustees that the desirability of retaining
Loomis Sayles as adviser for the Funds outweighs the disadvantages, if any,
which might result from these practices.

DISTRIBUTION AGREEMENT AND RULE 12B-1 PLANS. Under an agreement with
the Trust (the "Distribution Agreement"), Loomis Sayles Distributors, L.P.
serves as the general distributor of each class of shares of the Funds. Under
this agreement, Loomis Sayles Distributors, L.P. is not obligated to sell a
specific number of shares. Loomis Sayles Distributors, L.P. bears the cost of
making information about the Funds available through advertising and other means
and the cost of printing and mailing the Prospectus to persons other than
shareholders. The Funds pay the cost of registering and qualifying their shares
under state and federal securities laws and the distribution of the Prospectus
to existing shareholders.

As described in the Prospectus, the Funds have adopted Rule 12b-1 plans
("Plans") for their Retail and Admin Class shares. The Plans, among other
things, permit the relevant classes of the Funds to pay the Funds' distributor
(currently Loomis Sayles Distributors, L.P.) monthly fees, at annual rates not
exceeding 0.25% of the assets of the Retail Class, Admin Class, and Class A,
respectively, as compensation for its services as principal underwriter of these
Funds' shares. Pursuant to Rule 12b-1 under the 1940 Act, each Plan (together
with the Distribution Agreement) was approved by the board of trustees,
including a majority of the trustees who are not interested persons of the Trust
(as defined in the 1940 Act) and who have no direct or indirect financial
interest in the operations of the Plan or the Distribution Agreement (the
"Independent Trustees"). The principal types of activities for which payments
under these Plans may be made include payments to intermediaries for shareholder
servicing, for no transaction fee or wrap programs, and for retirement plan
recordkeeping. Payments under these Plans also may be made for activities such
as advertising, printing and mailing the Prospectus to persons who are not
current shareholders, compensation to underwriters, compensation to
broker-dealers, compensation to sales personnel, and interest, carrying or other
financing charges.

Each Plan may be terminated by vote of a majority of the Independent
Trustees, or by vote of a majority of the outstanding voting securities of the
relevant class of shares of the Fund to which the Plan relates. Each Plan may be
amended by vote of the trustees, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose. Any change in any
Plan that would materially increase the fees payable thereunder by the Retail
Class, Admin Class, or Class A shares of a Fund requires approval of the Retail
Class, Admin Class, or Class A shareholders of that Fund. The Trust's trustees
review quarterly written reports of such costs and the purposes for which such
costs have been incurred. Each Plan provides that, for so long as that Plan is
in effect, selection and nomination of those trustees who are not interested
persons of the Trust shall be committed to the discretion of such disinterested
persons.

The Distribution Agreement may be terminated at any time with respect
to a Fund on 60 days' written notice without payment of any penalty by the Trust
or by vote of a majority of the outstanding voting securities of that Fund or by
vote of a majority of the Independent Trustees.

The Distribution Agreement and the Plans will continue in effect for
successive one-year periods, provided that each such continuance is specifically
approved (i) by the vote of a majority of the entire board of trustees and (ii)
by the vote of a majority of the Independent Trustees, in each case cast in
person at a meeting called for that purpose.

CUSTODIAL ARRANGEMENTS. State Street Bank and Trust Company ("State
Street Bank"), Boston, Massachusetts 02102, is the Trust's custodian. As such,
State Street Bank holds in safekeeping certificated

32
<PAGE>

securities and cash belonging to the Funds and, in such capacity, is the
registered owner of securities held in book entry form belonging to the Funds.
Upon instruction, State Street Bank receives and delivers cash and securities of
the Funds in connection with Fund transactions and collects all dividends and
other distributions made with respect to Fund portfolio securities. State Street
Bank also maintains certain accounts and records of the Funds and calculates the
total net asset value, total net income and net asset value per share of each
Fund on a daily basis.

INDEPENDENT ACCOUNTANTS. The Trust's independent accountants are
_______________. __________________ conducts an annual audit of the Trust's
financial statements, assists in the preparation of the Funds' federal and state
income tax returns and consults with the Funds as to matters of accounting and
federal and state income taxation. The information under the caption "Financial
Highlights" included in the Prospectus has been so included, and the financial
statements incorporated by reference herein from the Fund's 1998 Annual Report
have been so incorporated, in reliance on the reports of _______________, given
on the authority of said firm as experts in auditing and accounting.

PORTFOLIO TRANSACTIONS AND BROKERAGE

In placing orders for the purchase and sale of portfolio securities for
each Fund, Loomis Sayles always seeks the best price and execution. Transactions
in unlisted securities are carried out through broker-dealers who make the
primary market for such securities unless, in the judgment of Loomis Sayles, a
more favorable price can be obtained by carrying out such transactions through
other brokers or dealers.

Loomis Sayles selects only brokers or dealers which it believes are
financially responsible, will provide efficient and effective services in
executing, clearing and settling an order and will charge commission rates
which, when combined with the quality of the foregoing services, will produce
best price and execution for the transaction. This does not necessarily mean
that the lowest available brokerage commission will be paid. However, the
commissions are believed to be competitive with generally prevailing rates.
Loomis Sayles will use its best efforts to obtain information as to the general
level of commission rates being charged by the brokerage community from time to
time and will evaluate the overall reasonableness of brokerage commissions paid
on transactions by reference to such data. In making such evaluation, all
factors affecting liquidity and execution of the order, as well as the amount of
the capital commitment by the broker in connection with the order, are taken
into account. The Funds, other than the Loomis Sayles Emerging Markets Fund, the
Loomis Sayles Global Bond Fund, the Loomis Sayles Global Technology Fund, the
Loomis Sayles International Equity Fund, and the Loomis Sayles Worldwide Fund,
will not pay a broker a commission at a higher rate than otherwise available for
the same transaction in recognition of the value of research services provided
by the broker or in recognition of the value of any other services provided by
the broker that do not contribute to the best price and execution of the
transaction.

Receipt of research services from brokers may sometimes be a factor in
selecting a broker which Loomis Sayles believes will provide best price and
execution for a transaction. These research services include not only a wide
variety of reports on such matters as economic and political developments,
industries, companies, securities, portfolio strategy, account performance,
daily prices of securities, stock and bond market conditions and projections,
asset allocation and portfolio structure, but also meetings with management
representatives of issuers and with other analysts and specialists. Although it
is not possible to assign an exact dollar value to these services, they may, to
the extent used, tend to reduce Loomis Sayles' expenses. Such services may be
used by Loomis Sayles in servicing other client accounts and in some cases may
not be used with respect to the Funds. Receipt of services or products other
than research from brokers is not a factor in the selection of brokers.

LOOMIS SAYLES EMERGING MARKETS FUND, LOOMIS SAYLES GLOBAL BOND FUND,
LOOMIS SAYLES GLOBAL TECHNOLOGY FUND, LOOMIS SAYLES INTERNATIONAL EQUITY FUND,
AND LOOMIS SAYLES WORLDWIDE FUND. In placing orders for the purchase and sale of
securities for the Loomis Sayles Emerging Markets Fund, the Loomis Sayles Global
Bond Fund, the Loomis Sayles Global Technology Fund, the Loomis Sayles
International Equity Fund,

33
<PAGE>

and the Loomis Sayles Worldwide Fund, Loomis Sayles follows the same policies as
for the other Funds, except that Loomis Sayles may cause the these Funds to pay
a broker-dealer that provides brokerage and research services to Loomis Sayles
an amount of commission for effecting a securities transaction for these Funds
in excess of the amount another broker-dealer would have charged for effecting
that transaction. Loomis Sayles must determine in good faith that such greater
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker-dealer viewed in terms of that
particular transaction or Loomis Sayles' overall responsibilities to the Trust
and its other clients. Loomis Sayles's authority to cause these Funds to pay
such greater commissions is also subject to such policies as the Trustees of the
Trust may adopt from time to time.

The following tables set forth, for the 1997 and 1999 fiscal years and
the 1998 fiscal period (January 1, 1998 through September 30, 1998),
respectively, (1) the aggregate dollar amount of brokerage commissions paid on
portfolio transactions during such period, (2) the dollar amount of transactions
on which brokerage commissions were paid during such period that were directed
to brokers providing research services ("directed transactions") and (3) the
dollar amount of commissions paid on directed transactions during such period.
Funds not listed in a table did not pay brokerage commissions during the
relevant period.

FISCAL YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
(1) (2) (3)
AGGREGATE COMMISSIONS
BROKERAGE DIRECTED ON DIRECTED
FUND COMMISSIONS TRANSACTIONS TRANSACTIONS
- ---- ------------ ------------ ------------
<S> <C> <C> <C>
Loomis Sayles Aggressive Growth Fund $ 6,261 $ 45,426 $ 84
Loomis Sayles Core Value Fund $ 81,471 $ 22,718,537 $ 21,202
Loomis Sayles Growth Fund $ 81,395 $ 3,200,161 $ 4,782
Loomis Sayles International Equity Fund $ 759,784 $ 220, 336,814 $ 28,794
Loomis Sayles Mid-Cap Value Fund $ 7,298 $ 83,840 $ 319
Loomis Sayles Small Cap Growth Fund $ 9,774 $ 181,489 $ 672
Loomis Sayles Small Cap Value Fund $ 579,295 $ 29,877,865 $ 71,938
Loomis Sayles Worldwide Fund $ 9,953 $ 4,261,122 $ 489
</TABLE>

34
<PAGE>

FISCAL PERIOD ENDED SEPTEMBER 30, 1998
(January 1, 1998 - September 30, 1998)
<TABLE>
<CAPTION>

(1) (2) (3)
AGGREGATE COMMISSIONS
BROKERAGE DIRECTED ON DIRECTED
FUND COMMISSIONS TRANSACTIONS TRANSACTIONS
- ---- ----------- ------------ ------------
<S> <C> <C> <C>
Loomis Sayles Aggressive Growth Fund $ 5,336 $ 4,300 $ 256
Loomis Sayles Core Value Fund $ 76,841 $ 23,336,695 $ 27,893
Loomis Sayles Growth Fund $ 84,990 $ 114,400 $ 6,864
Loomis Sayles International Equity Fund $ 466,218 $ 6,619,778 $ 15,145
Loomis Sayles Mid-Cap Value Fund $ 14,031 $ 246,357 $ 569
Loomis Sayles Small Cap Growth Fund $ 22,443 $ 154,320 $ 348
Loomis Sayles Small Cap Value Fund $ 872,492 $ 42,599,200 $ 78,151
Loomis Sayles Worldwide Fund $ 20,610 $ 3,333,161 $ 520
</TABLE>

FISCAL YEAR ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
(1) (2) (3)
AGGREGATE COMMISSIONS
BROKERAGE DIRECTED ON DIRECTED
FUND COMMISSIONS TRANSACTIONS TRANSACTIONS
- ---- ----------- ------------ ------------
<S> <C> <C> <C>
Loomis Sayles Aggressive Growth Fund
Loomis Sayles Core Value Fund
Loomis Sayles Growth Fund
Loomis Sayles International Equity Fund
Loomis Sayles Mid-Cap Value Fund
Loomis Sayles Small Cap Growth Fund
Loomis Sayles Small Cap Value Fund
Loomis Sayles Worldwide Fund
</TABLE>

35
<PAGE>

DESCRIPTION OF THE TRUST

The Trust, registered with the SEC as a diversified open-end management
investment company, is organized as a Massachusetts business trust under the
laws of Massachusetts by an Agreement and Declaration of Trust (the "Declaration
of Trust") dated February 20, 1991.

The Declaration of Trust currently permits the trustees to issue an
unlimited number of full and fractional shares of each series. Each share of
each Fund represents an equal proportionate interest in such Fund with each
other share of that Fund and is entitled to a proportionate interest in the
dividends and distributions from that Fund. The shares of each Fund do not have
any preemptive rights. Upon termination of any Fund, whether pursuant to
liquidation of the Trust or otherwise, shareholders of that Fund are entitled to
share pro rata in the net assets of that Fund available for distribution to
shareholders. The Declaration of Trust also permits the trustees to charge
shareholders directly for custodial, transfer agency and servicing expenses.

The assets received by each Fund for the issue or sale of its shares
and all income, earnings, profits, losses and proceeds therefrom, subject only
to the rights of creditors, are allocated to, and constitute the underlying
assets of, that Fund. The underlying assets are segregated and are charged with
the expenses with respect to that Fund and with a share of the general expenses
of the Trust. Any general expenses of the Trust that are not readily
identifiable as belonging to a particular Fund are allocated by or under the
direction of the trustees in such manner as the trustees determine to be fair
and equitable. While the expenses of the Trust are allocated to the separate
books of account of each Fund, certain expenses may be legally chargeable
against the assets of all Funds.

The Declaration of Trust also permits the trustees, without shareholder
approval, to subdivide any series of shares or Fund into various classes of
shares with such dividend preferences and other rights as the trustees may
designate. Shares of each Fund (other than the Loomis Sayles Emerging Markets
Fund, the Loomis Sayles High Yield Fund, the Loomis Sayles Municipal Bond Fund,
and the Loomis Sayles U.S. Government Securities Fund) are currently divided
into two classes, designated Retail Class and Institutional Class shares. The
Loomis Sayles Bond Fund and the Loomis Sayles Small Cap Value Fund offer a third
class of shares designated Admin Class shares. The Loomis Sayles Aggressive
Growth Fund and the Loomis Sayles Global Technology Fund offer a third class of
shares designated Class A shares, which have a sales charge of ___%. The
trustees may also, without shareholder approval, establish one or more
additional separate portfolios for investments in the Trust or merge two or more
existing portfolios. Shareholders' investments in such an additional or merged
portfolio would be evidenced by a separate series of shares (i.e., a new
"Fund").

The Declaration of Trust provides for the perpetual existence of the
Trust. The Declaration of Trust, however, provides that the trustees may
terminate the Trust or any Fund upon written notice to the shareholders.

VOTING RIGHTS

As summarized in the Prospectus, shareholders are entitled to one vote
for each full share held (with fractional votes for each fractional share held)
and may vote (to the extent provided in the Declaration of Trust) on the
election of trustees and the termination of the Trust and on other matters
submitted to the vote of shareholders.

The Declaration of Trust provides that on any matter submitted to a
vote of all Trust shareholders, all Trust shares entitled to vote shall be voted
together irrespective of series or sub-series unless the rights of a particular
series or sub-series would be adversely affected by the vote, in which case a
separate vote of that series or sub-series shall also be required to decide the
question. Also, a separate vote shall be held whenever required by the 1940 Act
or any rule thereunder. Rule 18f-2 under the 1940 Act provides in effect that a
class shall be deemed to be affected by a matter unless it is clear that the
interests of each class in the matter are substantially

36
<PAGE>

identical or that the matter does not affect any interest of such class. On
matters affecting an individual series, only shareholders of that series are
entitled to vote. Consistent with the current position of the SEC, shareholders
of all series vote together, irrespective of series, on the election of trustees
and the selection of the Trust's independent accountants, but shareholders of
each series vote separately on other matters requiring shareholder approval,
such as certain changes in investment policies of that series or the approval of
the investment advisory agreement relating to that series.

There will normally be no meetings of shareholders for the purpose of
electing trustees except that, in accordance with the 1940 Act, (i) the Trust
will hold a shareholders' meeting for the election of trustees at such time as
less than a majority of the trustees holding office have been elected by
shareholders, and (ii) if, as a result of a vacancy on the board of trustees,
less than two-thirds of the trustees holding office have been elected by the
shareholders, that vacancy may be filled only by a vote of the shareholders. In
addition, trustees may be removed from office by a written consent signed by the
holders of two-thirds of the outstanding shares and filed with the Trust's
custodian or by a vote of the holders of two-thirds of the outstanding shares at
a meeting duly called for that purpose, which meeting shall be held upon the
written request of the holders of not less than 10% of the outstanding shares.

Upon written request by the holders of shares having a net asset value
constituting 1% of the outstanding shares stating that such shareholders wish to
communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a trustee, the
Trust has undertaken to provide a list of shareholders or to disseminate
appropriate materials (at the expense of the requesting shareholders).

Except as set forth above, the trustees shall continue to hold office
and may appoint successor trustees. Voting rights are not cumulative.

No amendment may be made to the Declaration of Trust without the
affirmative vote of a majority of the outstanding shares of the Trust, except
(i) to change the Trust's name or to cure technical problems in the Declaration
of Trust and (ii) to establish, change or eliminate the par value of any shares
(currently all shares have no par value).

SHAREHOLDER AND TRUSTEE LIABILITY

Under Massachusetts law shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund of
which they are shareholders. However, the Declaration of Trust disclaims
shareholder liability for acts or obligations of each Fund and requires that
notice of such disclaimer be given in each agreement, obligation or instrument
entered into or executed by the Trust or the trustees. The Declaration of Trust
provides for indemnification out of Fund property for all loss and expense of
any shareholder held personally liable for the obligations of the Fund. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability is considered remote since it is limited to circumstances in which the
disclaimer is inoperative and the Fund itself would be unable to meet its
obligations.

The Declaration of Trust further provides that the trustees will not be
liable for errors of judgment or mistakes of fact or law. However, nothing in
the Declaration of Trust protects a trustee against any liability to which the
trustee would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office. The By-Laws of the Trust provide for indemnification by the Trust of
the trustees and officers of the Trust except with respect to any matter as to
which any such person did not act in good faith in the reasonable belief that
such action was in or not opposed to the best interests of the Trust. No officer
or trustee may be indemnified against any liability to the Trust or the Trust's

37
<PAGE>

shareholders to which such person would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office.

HOW TO BUY SHARES

The procedures for purchasing shares of each Fund are summarized in the
Prospectus under "General Information-How to Purchase Shares."

NET ASSET VALUE

The net asset value of the shares of each Fund is determined by
dividing that Fund's total net assets (the excess of its assets over its
liabilities) by the total number of shares of the Fund outstanding and rounding
to the nearest cent. Such determination is made as of the close of regular
trading on the New York Stock Exchange (generally 4:00 p.m. Eastern time) on
each day on which that Exchange is open for unrestricted trading, and no less
frequently than once daily on each day during which there is sufficient trading
in a Fund's portfolio securities that the value of that Fund's shares might be
materially affected. During the 12 months following the date of this Statement
of Additional Information, the New York Stock Exchange is expected to be closed
on the following weekdays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Equity securities listed on an established
securities exchange or on the Nasdaq National Market System are normally valued
at their last sale price on the exchange where primarily traded or, if there is
no reported sale during the day, and in the case of over-the-counter securities
not so listed, at the last bid price. Long-term debt securities are valued by a
pricing service, which determines valuations of normal institutional-size
trading units of long-term debt securities. Such valuations are determined using
methods based on market transactions for comparable securities and on various
relationships between securities which are generally recognized by institutional
traders. Other securities for which current market quotations are not readily
available (including restricted securities, if any) and all other assets are
taken at fair value as determined in good faith by the board of trustees,
although the actual calculations may be made by persons acting pursuant to the
direction of the board.

Generally, trading in foreign securities markets is substantially
completed each day at various times prior to the close of regular trading on the
New York Stock Exchange. Occasionally, events affecting the value of foreign
fixed income securities and of equity securities of non-U.S. issuers not traded
on a U.S. exchange may occur between the completion of substantial trading of
such securities for the day and the close of regular trading on the New York
Stock Exchange, which events will not be reflected in the computation of the
Fund's net asset value. If events materially affecting the value of any Fund's
portfolio securities occur during such period, then these securities may be
valued at their fair value as determined in good faith by or in accordance with
procedures approved by the trustees.

SHAREHOLDER SERVICES

OPEN ACCOUNTS

A shareholder's investment in any Fund, except the Loomis Sayles
Emerging Markets Fund, is automatically credited to an open account maintained
for the shareholder by Boston Financial Data Services, Inc. ("BFDS"), the
shareholder servicing agent for State Street Bank. The shareholder servicing
agent for the Loomis Sayles Emerging Markets Fund is State Street Bank.
Certificates representing shares are issued only upon written request to BFDS
but are not issued for fractional shares. Following each transaction in the
account, a shareholder will receive an account statement disclosing the current
balance of shares owned and the details of recent transactions in the account.
After the close of each fiscal year BFDS will send each shareholder a statement

38
<PAGE>

providing federal tax information on dividends and distributions paid to the
shareholder during the year. This should be retained as a permanent record.
Shareholders will be charged a fee for duplicate information.

The open account system permits the purchase of full and fractional
shares and, by making the issuance and delivery of certificates representing
shares unnecessary, eliminates the problems of handling and safekeeping
certificates, and the cost and inconvenience of replacing lost, stolen,
mutilated or destroyed certificates.

The costs of maintaining the open account system are borne by the
Trust, and no direct charges are made to shareholders. Although the Trust has no
present intention of making such direct charges to shareholders, it reserves the
right to do so. Shareholders will receive prior notice before any such charges
are made.

SYSTEMATIC WITHDRAWAL PLAN

A Systematic Withdrawal Plan, referred to in the Prospectus under
"General Information--How to Redeem Shares," provides for monthly, quarterly,
semiannual or annual withdrawal payments of $50 or more from the account of an
eligible shareholder, as provided therein, provided that the account has a value
of at least $25,000 at the time the plan is established. The Systematic
Withdrawal Plan is not available for the Loomis Sayles Emerging Markets Fund.

Payments will be made either to the shareholder or to any other person
designated by the shareholder. If payments are issued to an individual other
than the registered owner(s), a signature guarantee will be required on the Plan
application. All shares in an account that is subject to a Systematic Withdrawal
Plan must be held in an open account rather than in certificated form. Income
dividends and capital gain distributions will be reinvested at the net asset
value determined as of the close of regular trading on the New York Stock
Exchange on the record date for the dividend or distribution.

Since withdrawal payments represent proceeds from liquidation of
shares, the shareholder should recognize that withdrawals may reduce and
possibly exhaust the value of the account, particularly in the event of a
decline in net asset value. Accordingly, the shareholder should consider whether
a Systematic Withdrawal Plan and the specified amounts to be withdrawn are
appropriate in the circumstances. The Fund makes no recommendations or
representations in this regard. It may be appropriate for the shareholder to
consult a tax adviser before establishing such a plan. See "Redemptions" and
"Income Dividends, Capital Gain Distributions and Tax Status" below for certain
information as to federal income taxes.

EXCHANGE PRIVILEGE

Shareholders may redeem their shares of any Fund, except the Loomis
Sayles Emerging Markets Fund, and have the proceeds applied on the same day to
purchase shares of the same class of any other Fund or of New England Cash
Management Trust or New England Tax Exempt Money Market Trust, as long as the
investment minimum of the Fund into which the exchange is made is met. Exchange
of shares of the Loomis Sayles High Yield Fund purchased within one year of 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 Loomis Sayles 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. Class A shares of the Loomis Sayles Aggressive Growth Fund
and the Loomis Sayles Global Technology Fund can be exchanged into Class A
shares of any series of Loomis Sayles Funds or New England Funds that offers
Class A shares. This exchange privilege is summarized in the Prospectus under
"General Information--How to Exchange Shares."

Exchanges may be effected by (1) making a telephone request by calling
800-626-9390, provided that a special authorization form is on file with BFDS,
or (2) sending a written exchange request to BFDS accompanied

39
<PAGE>

by an account application for the appropriate fund. The Trust reserves the right
to modify this exchange privilege without prior notice. An exchange constitutes
a sale of the shares for federal income tax purposes on which the investor may
realize a capital gain or loss.

This exchange privilege is not available to shareholders of the Loomis
Sayles Emerging Markets Fund.

IRAS

IRAs may be established under a prototype plan made available by Loomis
Sayles. These plans may be funded with shares of any Fund, although it is
expected that shares of the Municipal Bond Fund would ordinarily not be an
appropriate investment for these plans.

All income dividends and capital gain distributions of plan
participants must be reinvested. Plan documents and further information can be
obtained from Loomis Sayles.

Check with your financial or tax adviser as to the suitability of Fund
shares for your retirement plan.

REDEMPTIONS

The procedures for redemption of Fund shares are summarized in the
Prospectus under "General Information--How to Redeem Shares."

Except as noted below, signatures on redemption requests must be
guaranteed by commercial banks, trust companies, savings associations, credit
unions or brokerage firms that are members of domestic securities exchanges.
Signature guarantees by notaries public are not acceptable. However, as noted in
the Prospectus, a signature guarantee will not be required if the proceeds of
the redemption do not exceed $50,000 and the proceeds check is made payable to
the registered owner(s) and mailed to the record address for an account whose
account registration has not changed in the past 30 days.

If a shareholder selects the telephone redemption service in the manner
described in the next paragraph, Fund shares may be redeemed by making a
telephone call directly to BFDS at 800-626-9390. When a telephonic redemption
request is received, the proceeds are wired to the bank account previously
chosen by the shareholder and a nominal wire fee (currently $5.00) is deducted.
Telephonic redemption requests must be received by BFDS prior to the close of
regular trading on the New York Stock Exchange on a day when the Exchange is
open for business. Requests made after that time or on a day when the New York
Stock Exchange is not open for business cannot be accepted by BFDS and a new
request will be necessary.

In order to redeem shares by telephone, a shareholder must either
select this service when completing the Fund application or must do so
subsequently in writing. When selecting the service, a shareholder must
designate a bank account to which the redemption proceeds should be wired. Any
change in the bank account so designated must be made by furnishing to BFDS a
written request with a signature guarantee. Telephone redemptions may only be
made if an investor's bank is a member of the Federal Reserve System or has a
correspondent bank that is a member of the System. If the account is with a
savings bank, it must have only one correspondent bank that is a member of the
System. The Trust, BFDS, Loomis Sayles Distributors, L.P., and State Street Bank
are not responsible for the authenticity of withdrawal instructions received by
telephone.

Telephone redemptions are not available for the Loomis Sayles Emerging
Markets Fund.

The redemption price will be the net asset value per share next
determined after the redemption request and any necessary special documentation
are received by BFDS in proper form, less, in the case of the High Yield

40
<PAGE>

Fund and the Emerging Markets Fund, a redemption fee of 2.00% of the amount
redeemed with respect to shares of that Fund redeemed within one (1) year of
purchase, if applicable. Proceeds resulting from a written redemption request
will normally be mailed to the shareholder within seven days after receipt of a
request in good order. Telephonic redemption proceeds will normally be wired on
the first business day following receipt of a proper redemption request. In
those cases where a shareholder has recently purchased shares by check and the
check was received less than fifteen days prior to the redemption request, the
Fund may withhold redemption proceeds until the check has cleared.

Each Fund will normally redeem shares for cash; however, each Fund
reserves the right to pay the redemption price wholly or partly in kind. If
portfolio securities are distributed in lieu of cash, the shareholder will
normally incur brokerage commissions upon subsequent disposition of any such
securities. However, the Trust has elected to be governed by Rule 18f-1 under
the 1940 Act pursuant to which the Trust is obligated to redeem shares solely in
cash for any shareholder during any 90-day period up to the lesser of $250,000
or 1% of the total net asset value of the Trust at the beginning of such period.

A redemption constitutes a sale of the shares for federal income tax
purposes on which the investor may realize a long- or short-term capital gain or
loss. See "Income Dividends, Capital Gain Distributions and Tax Status."

INCOME DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX STATUS

As described in the Prospectus under "Dividends and Distributions," it
is the policy of each Fund to pay its shareholders, as dividends, substantially
all net investment income and to distribute annually all net realized capital
gains, if any, after offsetting any capital loss carryovers.

Income dividends and capital gain distributions are payable in full and
fractional shares of the particular Fund based upon the net asset value
determined as of the close of regular trading on the New York Stock Exchange on
the record date for each dividend or distribution. Shareholders, however, may
elect to receive their income dividends or capital gain distributions, or both,
in cash. The election may be made at any time by submitting a written request
directly to BFDS. In order for a change to be in effect for any dividend or
distribution, it must be received by BFDS on or before the record date for such
dividend or distribution.

As required by federal law, detailed federal tax information will be
furnished to each shareholder for each calendar year on or before January 31 of
the succeeding year.

The Internal Revenue Service (IRS) requires any Fund to withhold 31% of
any redemption proceeds (including the value of shares exchanged) and of any
income dividends and capital gain distributions in the following situations:

- - If you do not provide a correct, certified taxpayer identification
number to the Fund.

- - If the IRS notifies the Fund that you have underreported your income in
the past and thus are subject to backup withholding.

- - If you fail to certify to the Fund that you are not subject to such
backup withholding.

Each Fund intends to qualify each year as a regulated investment
company under Subchapter M of the Code. In order so to qualify and to qualify
for the favorable tax treatment accorded regulated investment companies and
their shareholders, the Fund must, among other things, (i) derive at least 90%
of its gross income from dividends, interest, payments with respect to certain
securities loans, gains from the sale of securities or

41
<PAGE>

foreign currencies, or other income (including, but not limited to, gains from
options, futures or forward contracts) derived with respect to its business of
investing in such stock, securities or currencies; (ii) distribute with respect
to each taxable year at least 90% of the sum of its taxable net investment
income, its tax-exempt income and the excess, if any, of net short-term capital
gains over net long-term capital losses for such year; and (iii) diversify its
holdings so that at the end of each fiscal quarter (a) at least 50% of the value
of its assets is invested in cash, U.S. government securities, securities of
other regulated investment companies, and other securities of issuers which
represent, with respect to each issuer, no more than 5% of the value of the
Fund's assets and 10% of the outstanding voting securities of such issuer and
(b) not more than 25% of its assets is invested in the securities (other than
those of the U.S. government or other regulated investment companies) of any one
issuer or of two or more issuers which the Fund controls and which are engaged
in the same, similar or related trades and businesses. To the extent it
qualifies for treatment as a regulated investment company, the Fund will not be
subject to federal income tax on income paid to its shareholders in the form of
dividends or capital gain distributions.

An excise tax at the rate of 4% will be imposed on the excess, if any,
of each Fund's "required distribution" over its actual distributions in any
calendar year. Generally, the "required distribution" is 98% of the Fund's
ordinary income for the calendar year plus 98% of its capital gain net income
recognized during the one-year period ending on October 31 (or December 31, if
the Fund so elects) plus undistributed amounts from prior years. Each Fund
intends to make distributions sufficient to avoid imposition of the excise tax.
Distributions declared by a Fund during October, November or December to
shareholders of record on a date in any such month and paid by the Fund during
the following January will be treated for federal tax purposes as paid by the
Fund and received by shareholders on December 31 of the year in which declared.

Shareholders of each Fund will be subject to federal income taxes on
distributions made by the Fund (other than "exempt-interest dividends" paid by
the Loomis Sayles Municipal Bond Fund, as described in the Prospectus) whether
received in cash or additional shares of the Fund. Distributions by each Fund of
net income and short-term capital gains, if any, will be taxable to shareholders
as ordinary income. Distributions designated by a Fund as deriving from net
gains on securities held for more than one year will be taxable to shareholders
as long-term capital gain (generally taxed at a rate of 20% for noncorporate
shareholders), without regard to how long a shareholder has held shares of the
Fund.

Dividends and distributions on a Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a time
when a Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed. Such realized gains may be required to be
distributed even when a Fund's net asset value also reflects unrealized losses.

The Loomis Sayles Emerging Markets Fund, the Loomis Sayles Global
Technology Fund, the Loomis Sayles International Equity Fund, the Loomis Sayles
Worldwide Fund, and the Loomis Sayles Global Bond Fund each may be eligible to
make an election under Section 853 of the Code so that its shareholders will be
able to claim a credit or deduction on their income tax returns for, and will be
required to treat as part of the amounts distributed to them, their pro rata
portion of qualified taxes paid by the relevant Fund to foreign countries. The
ability of shareholders of the Fund to claim a foreign tax credit is subject to
certain limitations imposed by Section 904 of the Code, which in general limit
the amount of foreign tax that may be used to reduce a shareholder's U.S. tax
liability to that amount of U.S. tax which would be imposed on the amount and
type of income in respect of which the foreign tax was paid. In addition, a
shareholder must hold shares of the Fund (without protection from risk of loss)
on the ex-dividend date and for at least 16 days during the 30-day period
beginning on the date that is 15 days before the ex-dividend date in order to be
eligible to claim a foreign credit for his or her share of these foreign taxes.
A shareholder who for U.S. income tax purposes claims a foreign tax credit in
respect of Fund

42
<PAGE>

distributions may not claim a deduction for foreign taxes paid by the Fund,
regardless of whether the shareholder itemizes deductions. Also, under Section
63 of the Code, no deduction for foreign taxes may be claimed by shareholders
who do not itemize deductions on their federal income tax returns. It should
also be noted that a tax-exempt shareholder, like other shareholders, will be
required to treat as part of the amounts distributed to it a pro rata portion of
the income taxes paid by the Fund to foreign countries. However, that income
will generally be exempt from United States taxation by virtue of such
shareholder's tax-exempt status and such a shareholder will not be entitled to
either a tax credit or a deduction with respect to such income. The Loomis
Sayles Emerging Markets Fund, the Loomis Sayles Global Technology Fund, the
Loomis Sayles International Equity Fund, the Loomis Sayles Worldwide Fund and
the Loomis Sayles Global Bond Fund will notify shareholders each year of the
amount of dividends and distributions and the shareholder's pro rata share of
qualified taxes paid by each such Fund to foreign countries.

Each Fund's transactions, if any, in foreign currencies are likely to
result in a difference between the Fund's book income and taxable income. This
difference may cause a portion of the Fund's income distributions to constitute
a return of capital for tax purposes or require the Fund to make distributions
exceeding book income to avoid excise tax liability and to qualify as a
regulated investment company.

Investment by a Fund in "passive foreign investment companies" could
subject the Fund to U.S. federal income tax or other charge on the proceeds from
the sale of its investment in such a company; however, this tax can be avoided
by making an election to mark such investments to market annually or to treat
the passive foreign investment company as a "qualified electing fund."

If a Fund engages in hedging transactions, including hedging
transactions in options, futures contracts, and straddles, or other similar
transactions, it will be subject to special tax rules (including constructive
sale, mark-to-market, straddle, wash sale, and short sale rules), the effect of
which may be to accelerate income to the Fund, defer losses to the Fund, cause
adjustments in the holding periods of the Fund's securities, or convert
short-term capital losses into long-term capital losses. These rules could
therefore affect the amount, timing and character of distributions to
shareholders. Each Fund will endeavor to make any available elections pertaining
to such transactions in a manner believed to be in the best interests of the
Fund.

A Fund's investment in securities issued at a discount and certain
other obligations will (and investments in securities purchased at a discount
may) require the Fund to accrue and distribute income not yet received. In such
cases, a Fund may be required to sell assets (including when it is not
advantageous to do so) to generate the cash necessary to distribute as dividends
to its shareholders all of its income and gains and therefore to eliminate any
tax liability at the Fund level.

Generally a Fund may designate dividends eligible for the
dividends-received deduction only to the extent that such dividends are derived
from dividends paid to the Fund with respect to which Fund could have taken the
dividends-received deduction if it had been a regular corporation. The
dividends-received deduction is not available to non-corporate shareholders,
Subchapter S corporations or corporations who do not hold their shares for at
least 46 days during the 90-day period beginning on the date that is 45 days
before the ex-dividend date. The dividends-received deduction also is not
available with respect to dividends derived from a Fund's investment in foreign
securities or REITs.

Redemptions and exchanges of each Fund's shares are taxable events and,
accordingly, shareholders may realize gains and losses on these transactions. In
general, any gain realized upon a taxable disposition of shares will be treated
as long-term capital gain if the shares have been held for more than one year.
Otherwise the gain on the sale, exchange or redemption of Fund shares will be
treated as short-term capital gain. However, if a shareholder sells Fund shares
at a loss within six months after purchasing the shares, the loss will be
treated as a long-term capital loss to the extent of any long-term capital gain
distributions received by the shareholder.

43
<PAGE>

Furthermore, no loss will be allowed on the sale of Fund shares to the extent
the shareholder acquired other shares of the same Fund within 30 days prior to
the sale of the loss shares or 30 days after such sale.

The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and regulations currently in effect. For the complete
provisions, reference should be made to the pertinent Code sections and
regulations. The Code and regulations are subject to change by legislative or
administrative action.

Dividends and distributions also may be subject to foreign, state and
local taxes. Shareholders are urged to consult their tax advisers regarding
specific questions as to federal, state, foreign, or local taxes.

The foregoing discussion relates solely to U.S. federal income tax law.
Non-U.S. investors should consult their tax advisers concerning the tax
consequences of ownership of shares of the Fund, including the possibility that
distributions may be subject to a 30% United States withholding tax (or a
reduced rate of withholding provided by treaty). The Internal Revenue Service
recently revised its regulations affecting the application to foreign investors
of the back-up withholding tax rules. The new regulations will generally be
effective for payments made on or after January 1, 2001 (although transition
rules will apply). In some circumstances, the new rules will increase the
certification and filing requirements imposed on foreign investors in order to
qualify for exemption from the 31% back-up withholding tax and for reduced
withholding tax rates under income tax treaties. Foreign investors in each Fund
should consult their advisors with respect to the potential application of these
new regulations.

FINANCIAL STATEMENTS

The financial statements of each Fund included in the Trust's 1999
Annual Report, filed with the Securities and Exchange Commission on
_______________, 1999, are incorporated by reference to such Report.

CALCULATION OF YIELD AND TOTAL RETURN

YIELD. Yield with respect to a Fund will be computed by dividing such
Fund's net investment income for a recent 30-day period by the maximum offering
price (reduced by any undeclared earned income expected to be paid shortly as a
dividend) on the last trading day of that period. Net investment income will
reflect amortization of any market value premium or discount of fixed income
securities (except for obligations backed by mortgages or other assets) and may
include recognition of a pro rata portion of the stated dividend rate of
dividend paying portfolio securities. The Funds' yields will vary from time to
time depending upon market conditions, the composition of the Funds' portfolios
and operating expenses of the Trust allocated to each Fund. These factors, and
possible differences in the methods used in calculating yield, should be
considered when comparing a Fund's yield to yields published for other
investment companies and other investment vehicles. Yield should also be
considered relative to changes in the value of the Funds' shares and to the
relative risks associated with the investment objectives and policies of the
Funds.

At any time in the future, yields may be higher or lower than past
yields and there can be no assurance that any historical results will continue.

Investors in the Funds are specifically advised that the net asset
value per share of each Fund may vary, just as yields for each Fund may vary. An
investor's focus on yield to the exclusion of the consideration of the value of
shares of that Fund may result in the investor's misunderstanding the total
return he or she may derive from that Fund.

TOTAL RETURN. Total Return with respect to a Fund is a measure of the
change in value of an investment in such Fund over the period covered, and
assumes any dividends or capital gains distributions are reinvested

44
<PAGE>

immediately, rather than paid to the investor in cash. The formula for total
return used herein includes four steps: (1) adding to the total number of shares
purchased through a hypothetical $1,000 investment in the Fund all additional
shares which would have been purchased if all dividends and distributions paid
or distributed during the period had been immediately reinvested; (2)
calculating the value of the hypothetical initial investment of $1,000 as of the
end of the period by multiplying the total number of shares owned at the end of
the period by the net asset value per share on the last trading day of the
period; (3) assuming redemption at the end of the period; and (4) dividing the
resulting account value by the initial $1,000 investment.

PERFORMANCE COMPARISONS

YIELD AND TOTAL RETURN. Each Fund may from time to time include its
total return information in advertisements or in information furnished to
present or prospective shareholders. Each of the Bond, Global Bond, High Yield,
Intermediate Maturity Bond, Investment Grade Bond, Municipal Bond, Short-Term
Bond, U.S. Government Securities and Worldwide Funds may from time to time
include the yield and/or total return of its shares in advertisements or
information furnished to present or prospective shareholders. Each Fund may from
time to time include in advertisements or information furnished to present or
prospective shareholders (i) the ranking of performance figures relative to such
figures for groups of mutual funds categorized by Lipper Analytical Services,
Inc. or Standard & Poor's Micropal, Inc. as having similar investment
objectives, (ii) the rating assigned to the Fund by Morningstar, Inc. based on
the Fund's risk-adjusted or straight performance relative to other mutual funds
in its broad investment class, and/or (iii) the ranking of performance figures
relative to such figures for mutual funds in its general investment category as
determined by CDA/Weisenberger's Management Results.

VOLATILITY. Each Fund may quote various measures of its volatility and
benchmark correlation. In addition, a Fund may compare these measures to those
of other funds and indices. Measures of volatility seek to compare a Fund's
historical share price fluctuations or total returns to those of a benchmark.
Measures of benchmark correlation indicate the extent to which a Fund's returns
change in ways similar to those of the benchmark. All measures of volatility and
correlation are calculated using averages of historical data. Each Fund may
utilize charts and graphs to present a Fund's volatility and average annual
total return. Each Fund may also discuss or illustrate examples of interest rate
sensitivity.

LIPPER ANALYTICAL SERVICES, INC. distributes mutual fund rankings
monthly. The rankings are based on total return performance calculated by
Lipper, generally reflecting changes in net asset value adjusted for
reinvestment of capital gains and income dividends. They do not reflect
deduction of any sales charges. Lipper rankings cover a variety of performance
periods, including, but not limited to, year-to-date, 1-year, 5-year, and
10-year performance. Lipper classifies mutual funds by investment objective and
asset category.

STANDARD & POOR'S MICROPAL, INC. distributes mutual fund rankings
weekly and monthly. The rankings are based upon performance calculated by
Micropal, generally reflecting changes in net asset value that can be adjusted
for the reinvestment of capital gains and dividends. If deemed appropriate by
the user, performance can also reflect deductions for sales charges. Micropal
rankings cover a variety of performance periods, including, but not limited to,
year-to-date, 1-year, 5-year and 10-year performance. Micropal classifies mutual
funds by investment objective and asset category.

MORNINGSTAR, INC. distributes mutual fund ratings monthly. The ratings
are divided into five groups: highest, above average, neutral, below average and
lowest. They represent a fund's historical risk/reward ratio relative to other
funds in its broad investment class as determined by Morningstar, Inc.
Morningstar ratings cover a variety of performance periods, including 3-year,
5-year, 10-year and overall performance. The performance factor for the overall
rating is a weighted-average return performance (if available) reflecting
deduction of expenses and sales charges. Performance is adjusted using
quantitative techniques to reflect the risk profile of the

45
<PAGE>

fund. The ratings are derived from a purely quantitative system that does not
utilize the subjective criteria customarily employed by rating agencies such as
Standard & Poor's and Moody's Investor Service, Inc.

STANDARD & POOR'S SELECT FUNDS are funds selected by Standard & Poor's
that have demonstrated above-average absolute and volatility-adjusted returns
relative to funds with the same investment style, along with having investment
management attributes that are consistent with the fund's investment style.
Select Fund designation is based on a six-month moving average of three years of
absolute and volatility-adjusted performance. A Select Fund designation does not
address the market risk, credit risk, or counterparty risk of a fund, nor does
it address a fund's suitability as a counterparty or obligor.

VALUE LINE INVESTMENT SURVEY is an investment advisory service that
ranks approximately 1,700 stocks for "timeliness" and safety. Using a
computerized model based on earnings momentum, Value Line projects which stocks
will have the best or worst relative price performance over the next 6 to 12
months. In addition, each stock is assigned a risk rating, which identifies the
volatility of a stock's price behavior relative to the market average.
The service also ranks all major industry groups for timeliness.

CDA/WEISENBERGER'S MANAGEMENT RESULTS publishes mutual fund rankings
and is distributed monthly. The rankings are based entirely on total return
calculated by Weisenberger for periods such as year-to-date, 1- year, 3-year,
5-year and 10-year Mutual funds are ranked in general categories (e.g.,
international bond, international equity, municipal bond, and maximum capital
gain). Weisenberger rankings do not reflect deduction of sales charges or fees.

Performance information may also be used to compare the performance of
the Fund to certain widely acknowledged standards or indices for stock and bond
market performance, such as those listed below.

CONSUMER PRICE INDEX. The Consumer Price Index, published by the U.S.
Bureau of Labor Statistics, is a statistical measure of changes, over time, in
the prices of goods and services in major expenditure groups.

DOW JONES INDUSTRIAL AVERAGE. The Dow Jones Industrial Average is a
market value-weighted and unmanaged index of 30 large industrial stocks traded
on the New York Stock Exchange.

LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX. The Lehman Brothers
Government/Corporate Bond Index is an index of publicly issued U.S. Treasury
obligations, debt obligations of U.S. government agencies (excluding
mortgage-backed securities), fixed-rate, non-convertible, investment-grade
corporate debt securities and U.S. dollar-denominated, SEC-registered
non-convertible debt issued by foreign governmental entities or international
agencies used as a general measure of the performance of fixed-income
securities.

LEHMAN BROTHERS GOVERNMENT/CORPORATE INTERMEDIATE BOND INDEX. Lehman
Brothers Government/Corporate Intermediate Bond Index consists of those bonds
held within the Lehman Brothers Government/Corporate Bond index which have an
average maturity of 1-10 years.

LEHMAN BROTHERS 1-3 YEAR GOVERNMENT INDEX. The Index contains fixed
rate debt issues of the U.S. government or its agencies rated investment grade
or higher with at least one year maturity and an outstanding par value of at
least $100 million for U.S. government issues.

LEHMAN BROTHERS 1-3 YEAR GOVERNMENT/CORPORATE BOND INDEX. The Index is
a market value weighted performance benchmark for government and corporate
fixed-rate debt issues with maturities of between one and three years.

46
<PAGE>

LEHMAN BROTHERS GOVERNMENT BOND INDEX. The Lehman Brothers Government
Bond Index is composed of all publicly issued, nonconvertible, domestic debt of
the U.S. government or any of its agencies, quasi-federal corporations, or
corporate debt guaranteed by the U.S. government.

LEHMAN BROTHERS MUNICIPAL BOND INDEX. The Lehman Brothers Municipal
Bond Index is computed from the prices of approximately 21,000 bonds consisting
of roughly 30% revenue bonds, 30% government obligation bonds, 27% insured bonds
and 13% prerefunded bonds.

MSCI-EAFE INDEX. The MSCI-EAFE Index contains over 1000 stocks from 20
different countries with Japan (approximately 50%), United Kingdom, France and
Germany being the most heavily weighted.

MSCI-EAFE EX-JAPAN INDEX. The MSCI-EAFE ex-Japan Index consists of all
stocks contained in the MSCI-EAFE Index, other than stocks from Japan.

MERRILL LYNCH GOVERNMENT/CORPORATE INDEX. The Merrill Lynch
Government/Corporate Index is a composite of approximately 4,900 U.S. government
and corporate debt issues with at least $25 million outstanding, greater than
one year maturity, and credit ratings of investment grade or higher.

MERRILL LYNCH HIGH YIELD MASTER INDEX. The Merrill Lynch High Yield
Master Index consists of fixed-rate, coupon-bearing bonds with an outstanding
par which is greater than or equal to $50 million, a maturity range greater than
or equal to one year and must be less than BBB/Baa3 rated but not in default.

RUSSELL 2000 INDEX. The Russell 2000 Index is comprised of the 2000
smallest of the 3000 largest U.S.- domiciled corporations, ranked by market
capitalization.

RUSSELL MID-CAP GROWTH INDEX. The Russell Mid-Cap Growth Index is a
market capitalization weighted index of medium capitalization stocks determined
by Russell to be growth stocks as measured by their price-to- book ratios and
forecasted growth values.

SALOMON BROTHERS WORLD GOVERNMENT BOND INDEX. The Salomon Brothers
World Government Bond Index includes a broad range of institutionally-traded
fixed-rate government securities issued by the national governments of the nine
countries whose securities are most actively traded. The index generally
excludes floating- or variable-rate bonds, securities aimed principally at
non-institutional investors (such as U.S. Savings Bonds) and private-placement
type securities.

STANDARD & POOR'S/BARRA GROWTH INDEX. The Standard & Poor's/Barra
Growth Index is constructed by ranking the securities in the S&P 500 by
price-to-book ratio and including the securities with the highest price-to- book
ratios that represent approximately half of the market capitalization of the S&P
500.

STANDARD & POOR'S/BARRA VALUE INDEX. The Standard & Poor's/Barra Value
Index is constructed by ranking the securities in the S&P 500 by price-to-book
ratio and including the securities with the lowest price-to- book ratios that
represent approximately half of the market capitalization of the S&P 500.

STANDARD & POOR'S ("S&P") MID-CAP 400 INDEX. The 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 (stock price times shares
outstanding) with each stock affecting the index in proportion to its value. The
index is comprised of industrial, utility, financial and transportation stocks,
in size order.

STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX (THE "S&P 500"). The
S&P 500 is a market value- weighted and unmanaged index showing the changes in
the aggregate market value of 500 stocks relative to the

47
<PAGE>

base period 1941-43. The S&P 500 is composed almost entirely of common stocks of
companies listed on the New York Stock Exchange, although the common stocks of a
few companies listed on the American Stock Exchange or traded over-the-counter
are included. The 500 companies represented include 400 industrial, 60
transportation and 40 financial services concerns. The S&P 500 represents about
80% of the market value of all issues traded on the New York Stock Exchange. The
S&P 500 is the most common index for the overall U.S. stock market.

From time to time, articles about the Funds regarding performance,
rankings and other characteristics of the Funds may appear in publications
including, but not limited to, the publications included in Appendix A. In
particular, some or all of these publications may publish their own rankings or
performance reviews of mutual funds, including the Funds. References to or
reprints of such articles may be used in the Funds' promotional literature.
References to articles regarding personnel of Loomis Sayles who have portfolio
management responsibility may also be used in the Funds' promotional literature.
For additional information about the Funds' advertising and promotional
literature, see Appendix B.

48
<PAGE>

INSTITUTIONAL CLASS

PERFORMANCE DATA*

The manner in which total return and yield of the Funds will be
calculated for public use is described above. The table summarizes the
calculation of total return and yield for Institutional Class shares of the
Funds, where applicable, (i) for the one-year period ended September 30, 1999,
(ii) for the three-year period ended September 30, 1999, (iii) the five-year
period ended September 30, 1999, and (iv) since the modified inception and (v)
since actual inception (as listed below) through September 30, 1999.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------

FOR THE
FOR THE THREE- FOR THE FROM FROM
CURRENT ONE-YEAR YEAR FIVE-YEAR MODIFIED ACTUAL
SEC PERIOD PERIOD PERIOD INCEPTION INCEPTION***
YIELD AT ENDED ENDED ENDED THROUGH THROUGH
9/30/99 9/30/99 9/30/99 9/30/99 9/30/99** 9/30/99
FUND ------- ------- ------- ------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Loomis Sayles Aggressive Growth Fund
Loomis Sayles Bond Fund
Loomis Sayles Core Value Fund
Loomis Sayles Emerging Markets Fund
Loomis Sayles Global Bond Fund
Loomis Sayles Global Technology Fund
Loomis Sayles Growth Fund
Loomis Sayles High Yield Fund
Loomis Sayles Intermediate Maturity Bond Fund
Loomis Sayles International Equity Fund
Loomis Sayles Investment Grade Bond Fund
Loomis Sayles Mid-Cap Value Fund
Loomis Sayles Municipal Bond Fund
Loomis Sayles Short-Term Bond Fund
Loomis Sayles Small Cap Growth Fund
Loomis Sayles Small Cap Value Fund
Loomis Sayles U.S. Government Securities Fund
Loomis Sayles Worldwide Fund
</TABLE>

* Performance (for other than the one-year, three-year and five-year
periods for the Core Value and Small Cap Value Funds, and the three-year
and five-year periods for the Bond Fund) would have been lower if a

49
<PAGE>

portion of the management fee had not been waived by Loomis Sayles. In
the absence of this limitation, actual yield and total return would have
been as follows:

[Insert table w/performance info]

** For the Mid-Cap Growth Fund, Mid-Cap Value Fund, Small Cap Growth Fund,
Intermediate Maturity Bond Fund, and Investment Grade Bond Fund, the
modified inception date is December 31, 1996. For the Short-Term Bond
Fund the modified inception date is August 31, 1992, for the Worldwide
Fund-- May 31, 1996, for the High Yield Fund--September 30, 1996 and
for all other Funds--May 31, 1991.

*** Actual Inception Dates:

Loomis Sayles Aggressive Growth Fund December 31, 1996
Loomis Sayles Bond Fund May 16, 1991
Loomis Sayles Core Value Fund May 13, 1991
Loomis Sayles Emerging Markets Fund [November ___, 1999]
Loomis Sayles Global Bond Fund May 10, 1991
Loomis Sayles Global Technology Fund
Loomis Sayles Growth Fund May 16, 1991
Loomis Sayles High Yield Fund September 11, 1996
Loomis Sayles Intermediate Maturity Bond Fund December 31, 1996
Loomis Sayles International Equity Fund May 10, 1991
Loomis Sayles Investment Grade Bond Fund December 31, 1996
Loomis Sayles Mid-Cap Value Fund December 31, 1996
Loomis Sayles Municipal Bond Fund May 29, 1991
Loomis Sayles Short-Term Bond Fund August 3, 1992
Loomis Sayles Small Cap Value Fund May 13, 1991
Loomis Sayles Small Cap Growth Fund December 31, 1996
Loomis Sayles U.S. Government Securities Fund May 21, 1991
Loomis Sayles Worldwide Fund May 1, 1996

50
<PAGE>

RETAIL CLASS

PERFORMANCE DATA*

The manner in which total return and yield of the Funds will be calculated
for public use is described above. The table summarizes the calculation of total
return and yield for Retail Class shares of the Funds, where applicable, (i) for
the one-year period ended September 30, 1999, (ii) since the modified inception
December 31, 1996 through September 30, 1999 and (iii) since the actual
inception January 2, 1997 through September 30, 1999.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------

FOR THE FROM
CURRENT ONE-YEAR ACTUAL
SEC PERIOD INCEPTION **
YIELD AT ENDED THROUGH
9/30/99 9/30/99 9/30/99
------- ------- -------
FUND
<S> <C> <C> <C>
Loomis Sayles Aggressive Growth Fund
Loomis Sayles Bond Fund
Loomis Sayles Core Value Fund
Loomis Sayles Global Bond Fund
Loomis Sayles Growth Fund
Loomis Sayles Intermediate Maturity Bond Fund
Loomis Sayles International Equity Fund
Loomis Sayles Investment Grade Bond Fund
Loomis Sayles Mid-Cap Value Fund
Loomis Sayles Short-term Bond Fund
Loomis Sayles Small Cap Value Fund
Loomis Sayles Small Cap Growth Fund
Loomis Sayles Worldwide Fund
</TABLE>

* Performance would have been lower if a portion of the management fee had
not been waived by Loomis Sayles. In the absence of this limitation,
actual yield and total return would have been as follows:

[Insert table with performance info]

** The modified and actual inception dates for the Retail Class of each of
the Funds is December 31, 1996 and January 2, 1997, respectively.

51
<PAGE>

ADMIN CLASS

PERFORMANCE DATA

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------

FOR THE FROM FROM
CURRENT ONE-YEAR ACTUAL MODIFIED
SEC PERIOD INCEPTION* INCEPTION
YIELD AT ENDED THROUGH THROUGH
9/30/99 9/30/99 9/30/99 9/30/99
FUND ------- ------- ------- -------
<S> <C> <C> <C> <C>
Loomis Sayles Bond Fund
Loomis Sayles Small Cap
Value Fund
</TABLE>
- ------------

* Actual Inception Date for the Admin Class of each of the Funds
is January 2, 1998.

[insert table re: performance without fee waiver]

52
<PAGE>

CLASS A

PERFORMANCE DATA

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
---------------------------

FOR THE FROM FROM
CURRENT ONE-YEAR ACTUAL MODIFIED
SEC PERIOD INCEPTION* INCEPTION
YIELD ENDED THROUGH THROUGH
AT 9/30/99 9/30/99 9/30/99 9/30/99
---------- ------- ------- -------
FUND
<S> <C> <C> <C> <C>
Loomis Sayles Aggressive
Growth Fund

Loomis Sayles Global
Technology Fund
</TABLE>

- ---------------

* Actual Inception Date for Class A shares of each of the
Funds is _______________.

[insert table re: performance without fee waiver]

<PAGE>

APPENDIX A

PUBLICATIONS THAT MAY CONTAIN FUND INFORMATION

ABC and affiliates
Adam Smith's Money World
America On Line
Anchorage Daily News
Atlanta Constitution
Atlanta Journal
Arizona Republic
Austin American Statesman
Baltimore Sun
Bank Investment Marketing
Barron's
Bergen County Record (NJ)
Bloomberg Business News
Bond Buyer
Boston Business Journal
Boston Globe
Boston Herald
Broker World
Business Radio Network
Business Week
CBS and affiliates
CDA Investment Technologies
CFO
Changing Times
Chicago Sun Times
Chicago Tribune
Christian Science Monitor
Christian Science Monitor News Service
Cincinnati Enquirer
Cincinnati Post
CNBC
CNN
Columbus Dispatch
CompuServe
Dallas Morning News
Dallas Times-Herald
Denver Post
Des Moines Register
Detroit Free Press
Donoghues Money Fund Report
Dorfman, Dan (syndicated column)
Dow Jones News Service
Economist
FACS of the Week
Fee Adviser
Financial News Network
Financial Planning

54
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Financial Planning on Wall Street
Financial Research Corp.
Financial Services Week
Financial World
Fitch Insights
Forbes
Fort Worth Star-Telegram
Fortune
Fox Network and affiliates
Fund Action
Fund Decoder
Global Finance
(the) Guarantor
Hartford Courant
Houston Chronicle
INC
Indianapolis Star
Individual Investor
Institutional Investor
International Herald Tribune
Internet
Investment Advisor
Investment Company Institute
Investment Dealers Digest
Investment Profiles
Investment Vision
Investor's Daily
IRA Reporter
Journal of Commerce
Kansas City Star
KCMO (Kansas City)
KOA-AM (Denver)
LA Times
Leckey, Andrew (syndicated column)
Life Association News
Lifetime Channel
Miami Herald
Milwaukee Sentinel
Money Magazine
Money Maker
Money Management Letter
Morningstar
Mutual Fund Market News
Mutual Funds Magazine
National Public Radio
National Underwriter
NBC and affiliates
New England Business
New England Cable News
New Orleans Times-Picayune
New York Daily News
New York Times

55
<PAGE>

Newark Star Ledger
Newsday
Newsweek
Nightly Business Report
Orange County Register
Orlando Sentinel
Palm Beach Post
Pension World
Pensions and Investments
Personal Investor
Philadelphia Inquirer
Porter, Sylvia (syndicated column)
Portland Oregonian
Prodigy
Public Broadcasting Service
Quinn, Jane Bryant (syndicated column)
Registered Representative
Research Magazine
Resource
Reuters
Rocky Mountain News
Rukeyser's Business (syndicated column)
Sacramento Bee
San Diego Tribune
San Francisco Chronicle
San Francisco Examiner
San Jose Mercury
Seattle Post-Intelligencer
Seattle Times
Securities Industry Management
Smart Money
St. Louis Post Dispatch
St. Petersburg Times
Standard & Poor's Outlook
Standard & Poor's Stock Guide
Stanger's Investment Advisor
Stockbroker's Register
Strategic Insight
Tampa Tribune
Time
Tobias, Andrew (syndicated column)
Toledo Blade
UP
US News and World Report
USA Today
USA TV Network
Value Line
Wall Street Journal
Wall Street Letter
Wall Street Week
Washington Post
WBZ

56
<PAGE>

WBZ-TV
WCVB-TV
WEEI
WHDH
Worcester Telegram
World Wide Web
Worth Magazine
WRKO

57
<PAGE>

APPENDIX B

ADVERTISING AND PROMOTIONAL LITERATURE

Loomis Sayles Funds' advertising and promotional material may include,
but is not limited to, discussions of the following information:

Loomis Sayles Funds' participation in wrap fee and no transaction fee
programs

Loomis Sayles Funds' and Loomis, Sayles & Company, L.P. Website

Loomis Sayles Publications, including fact sheets for each Fund

Characteristics of Loomis Sayles including the number and locations of
its offices, its investment practices and clients and assets under management

Specific and general investment philosophies, strategies, processes and
techniques

Specific and general sources of information, economic models, forecasts
and data services utilized, consulted or considered in the course of providing
advisory or other services

Industry conferences at which Loomis Sayles participates

Current capitalization, levels of profitability and other financial
information

Identification of portfolio managers, researchers, economists,
principals and other staff members and employees and descriptions of Loomis
Sayles' resources devoted to such staff

The specific credentials of the above individuals, including but not
limited to, previous employment, current and past positions, titles and duties
performed, industry experience, educational background and degrees, awards and
honors

Specific identification of, and general reference to, current
individual, corporate and institutional clients, including pension and profit
sharing plans

Current and historical statistics relating to:

--total dollar amount of assets managed
--Loomis Sayles assets managed in total and by Fund
--the growth of assets
--asset types managed

Loomis Sayles Funds' tag line -- "Listening Harder, Delivering More"
and statements that and examples of how Loomis Sayles Funds listens to its
clients and works hard to deliver results which exceed their expectations.

References may be included in Loomis Sayles Funds' advertising and
promotional literature about 401(k) and retirement plans that offer the Funds.
The information may include, but is not limited to:

58
<PAGE>

Specific and general references to industry statistics regarding 401(k)
and retirement plans including historical information and industry trends and
forecasts regarding the growth of assets, numbers or plans, funding vehicles,
participants, sponsors and other demographic data relating to plans,
participants and sponsors, third party and other administrators, benefits
consultants and firms with whom Loomis Sayles may or may not have a
relationship.

Specific and general reference to comparative ratings, rankings and
other forms of evaluation as well as statistics regarding the Fund as 401(k) or
retirement plan funding vehicles produced by industry authorities, research
organizations and publications.

59
<PAGE>

PART C. OTHER INFORMATION

ITEM 23. EXHIBITS

(a) Agreement and Declaration of Trust.(5)

(b) By-Laws.(5)

(d)(1) Form of Advisory Agreement.(7)

(d)(2) Form of Amendment No. 1 to Advisory Agreement between the Trust, on
behalf of its Loomis Sayles Core Value Fund, and Loomis, Sayles &
Company, L.P.(3)

(d)(3) Form of Advisory Agreement between the Trust, on behalf of its
Loomis Sayles Emerging Markets Fund, and Loomis, Sayles & Company,
L.P. is filed herein.

(d)(4) Form of Amendment No. 1 to Advisory Agreement between the Trust, on
behalf of its Loomis Sayles Global Bond Fund, and Loomis, Sayles &
Company, L.P.(3)

(d)(5) Form of Advisory Agreement between the Trust, on behalf of its
Loomis Sayles Global Technology Fund, and Loomis, Sayles & Company,
L.P. to be filed by amendment.

(d)(6) Form of Amendment No. 1 to Advisory Agreement between the Trust, on
behalf of its Loomis Sayles Growth Fund, and Loomis, Sayles &
Company, L.P.(3)

(d)(7) Form of Advisory Agreement between the Trust, on behalf of its
Loomis Sayles High Yield Fund, and Loomis, Sayles & Company,
L.P.(2)

(d)(8) Form of Advisory Agreement between the Trust, on behalf of its
Loomis Sayles Intermediate Maturity Bond Fund, and Loomis, Sayles &
Company, L.P.(3)

(d)(9) Form of Amendment No. 1 to Advisory Agreement between the Trust, on
behalf of its Loomis Sayles International Equity Fund, and Loomis,
Sayles & Company, L.P.(3)

(d)(10) Form of Advisory Agreement between the Trust, on behalf of its
Loomis Sayles Investment Grade Bond Fund, and Loomis, Sayles &
Company, L.P.(3)

(d)(11) Form of Advisory Agreement between the Trust, on behalf of its
Loomis Sayles Managed Bond Fund, and Loomis, Sayles & Company,
L.P.(6)

(d)(12) Form of Advisory Agreement between the Trust, on behalf of its
Loomis Sayles Aggressive Growth Fund, formerly known as the Loomis
Sayles Mid-Cap Growth Fund, and Loomis, Sayles & Company, L.P.(3)

-1-
<PAGE>

(d)(13) Form of Advisory Agreement between the Trust, on behalf of its
Loomis Sayles Mid- Cap Value Fund, and Loomis, Sayles & Company,
L.P.(3)

(d)(14) Form of Amendment No. 1 to Advisory Agreement between the Trust, on
behalf of its Loomis Sayles Municipal Bond Fund, and Loomis, Sayles
& Company, L.P.(3)

(d)(15) Form of Amendment No. 1 to Advisory Agreement between the Trust, on
behalf of its Loomis Sayles Short-Term Bond Fund, and Loomis,
Sayles & Company, L.P.(3)

(d)(16) Form of Advisory Agreement between the Trust, on behalf of its
Loomis Sayles Small Cap Growth Fund, and Loomis, Sayles & Company,
L.P. (3)

(d)(17) Form of Amendment No. 1 to Advisory Agreement between the Trust, on
behalf of its Loomis Sayles Small Cap Value Fund, and Loomis,
Sayles & Company, L.P.(3)

(d)(18) Form of Amended and Restated Investment Advisory Agreement between
the Trust, on behalf of its Loomis Sayles U.S. Government
Securities Fund, and Loomis, Sayles & Company, L.P.(7)

(d)(19) Form of Amendment No. 1 to Advisory Agreement between the Trust, on
behalf of its Loomis Sayles Worldwide Fund, and Loomis, Sayles &
Company, L.P.(3)

(e) Form of Amended and Restated Distribution Agreement is filed
herein.

(f) Not Applicable.

(g)(1) Form of Custodian Agreement.(5)

(g)(2) Letter Agreement between the Trust and State Street Bank and Trust
Company relating to the applicability of the Custodian Agreement to
Loomis Sayles Short-Term Bond Fund.(4)

(g)(3) Letter Agreement between the Trust and State Street Bank and Trust
Company relating to the applicability of the Custodian Agreement to
Loomis Sayles High Yield Fund.(4)

(g)(4) Letter Agreement between the Trust and State Street Bank and Trust
Company relating to the applicability of the Custodian Agreement to
Loomis Sayles Intermediate Maturity Bond Fund, Loomis Sayles
Investment Grade Bond Fund, Loomis Sayles Aggressive Growth Fund
(formerly known as Loomis Sayles Mid-Cap Growth Fund), Loomis
Sayles Mid-Cap Value Fund, and Loomis Sayles Small Cap Growth
Fund.(4)

(g)(5) Form of Letter Agreement between the Trust and State Street Bank
and Trust Company relating to the applicability of the Custodian
Agreement to Loomis Sayles Worldwide Fund.(4)

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<PAGE>

(g)(6) Form of Letter Agreement between the Trust and State Street Bank
and Trust Company relating to the applicability of the Custodian
Agreement to Loomis Sayles Managed Bond Fund.(7)

(g)(7) Form of Letter Agreement between the Trust and State Street Bank
and Trust Company relating to the applicability of the Custodian
Agreement to Loomis Sayles Global Technology Fund to be filed by
amendment.

(h)(1) Form of Transfer Agency and Service Agreement between the Trust and
State Street Bank and Trust Company.(5)

(h)(2) Letter Agreement between the Trust and State Street Bank and Trust
Company relating to the applicability of the Transfer Agency and
Service Agreement to Loomis Sayles Short-Term Bond Fund.(4)

(h)(3) Letter Agreement between the Trust and State Street Bank and Trust
Company relating to the applicability of the Transfer Agency and
Service Agreement to Loomis Sayles High Yield Fund and Loomis
Sayles Worldwide Fund.(4)

(h)(4) Letter Agreement between the Trust and State Street Bank and Trust
Company relating to the applicability of the Transfer Agency and
Service Agreement to Loomis Sayles Intermediate Maturity Bond Fund,
Loomis Sayles Investment Grade Bond Fund, Loomis Sayles Aggressive
Growth Fund (formerly known as Loomis Sayles Mid-Cap Growth Fund),
Loomis Sayles Mid-Cap Value Fund, and Loomis Sayles Small Cap
Growth Fund.(4)

(h)(5) Letter Agreement between the Trust and State Street Bank and
Trust Company relating to the applicability of the Transfer
Agency and Service Agreement to Loomis Sayles Global Technology
Fund to be filed by amendment.

(h)(6) Transfer Agency and Service Agreement between the Trust, on behalf
of its Loomis Sayles Managed Bond Fund, and State Street Bank and
Trust Company.(7)

(h)(7) Transfer Agency and Service Agreement between the Trust, on behalf
of its Loomis Sayles Emerging Markets Fund and Class J shares of
Loomis Sayles Investment Grade Bond Fund, and State Street Bank and
Trust Company to be filed by amendment.

(i)(1) Opinion and Consent of Counsel.(3)

(i)(2) Form of Opinion and Consent of Counsel relating to Loomis Sayles
Managed Bond Fund.(6)

(j) Not Applicable.

(k) Not Applicable.

(l)(1) Investment Representation Regarding Initial Shares.(5)

(l)(2) Form of Organizational Expense Reimbursement Agreement.(5)

-3-
<PAGE>

(m)(1) Form of Distribution Plan for Retail Class shares.(3)

(m)(2) Form of Distribution Plan for Admin Class shares.(5)

(m)(3) Form of Distribution Plan for Class A shares to be filed by
amendment.

(m)(4) Form of Service and Distribution Plan relating to Loomis Sayles
Managed Bond Fund.(6)

(m)(5) Form of Service and Distribution Plan relating to Class J shares of
Loomis Sayles Investment Grade Bond Fund.(8)

(n) Not Applicable.

(o) Amended and Restated Rule 18f-3(d) Plan is filed herein.

(p) Powers of Attorney for Daniel J. Fuss, Richard S. Holway, and
Michael T. Murray.(1)

(q) Power of Attorney for Joseph Alaimo is filed herein.

- --------------------------------------------------------------------------------

(1) Incorporated by reference to the Exhibit to Post-Effective
Amendment No. 7 to the Trust's Registration Statement under the
Securities Act of 1933 filed with the Commission on February 16,
1996.

(2) Incorporated by reference to the Exhibit to Post-Effective
Amendment No. 10 to the Trust's Registration Statement under the
Securities Act of 1933 filed with the Commission on August 30,
1996.

(3) Incorporated by reference to the Exhibit to Post-Effective
Amendment No. 11 to the Trust's Registration Statement under the
Securities Act of 1933 filed with the Commission on October 9,
1996.

(4) Incorporated by reference to the Exhibit to Post-Effective
Amendment No. 12 to the Trust's Registration Statement under the
Securities Act of 1933 filed with the Commission on March 10, 1997.

(5) Incorporated by reference to the Exhibit to Post-Effective
Amendment No. 13 to the Trust's Registration Statement under the
Securities Act of 1933 filed with the Commission on October 31,
1997.

(6) Incorporated by reference to the Exhibit to Post-Effective
Amendment No. 15 to the Trust's Registration Statement under the
Securities Act of 1933 filed with the Commission on August 5, 1998.

-4-
<PAGE>

(7) Incorporated by reference to the Exhibit to Post-Effective
Amendment No. 17 to the Trust's Registration Statement under the
Securities Act of 1933 filed with the Commission on November 30,
1998.

(8) Incorporated by reference to the Exhibit to Post-Effective
Amendment No. 18 to the Trust's Registration Statement under the
Securities Act of 1933 filed with the Commission on April 7, 1999.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Not Applicable.

ITEM 25. INDEMNIFICATION

Article VIII of the Registrant's Agreement and Declaration of Trust
(Exhibit (a) hereto) and Article 4 of the Registrant's By-Laws
(Exhibit (b) hereto) provide for indemnification of its trustees
and officers. The effect of these provisions is to provide
indemnification for each of the Registrant's trustees and officers
against liabilities and counsel fees reasonably incurred in
connection with the defense of any legal proceeding in which such
trustee or officer may be involved by reason of being or having
been a trustee or officer, except with respect to any matter as to
which such trustee or officer shall have been adjudicated not to
have acted in good faith and in the reasonable belief that such
trustee's or officer's action was in the best interest of the
Registrant, and except that no trustee or officer shall be
indemnified against any liability to the Registrant or its
shareholders to which such trustee or officer otherwise would be
subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of such trustee's or officer's office.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Loomis, Sayles & Company, L.P. ("Loomis Sayles"), the investment adviser of the
Registrant, provides investment advice to the nine series of Loomis Sayles
Investment Trust, six series of New England Funds Trust I, one series of New
England Funds Trust II, and two series of New England Zenith Funds, all of which
are registered investment companies, and to other registered investment
companies, organizations, and individuals.

The sole general partner of Loomis Sayles is Loomis, Sayles & Company, Inc., One
Financial Center, Boston, Massachusetts 02111.

ITEM 27. PRINCIPAL UNDERWRITERS

The Trust's principal underwriter is Loomis Sayles Distributors, L.P., the sole
general partner of which is Loomis Sayles Distributors, Inc.

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<PAGE>

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

The following companies maintain possession of the documents required by the
specified rules:

(a) Registrant
Rule 31a-1(b)(4), (9), (10), (11)
Rule 31a-2(a)

(b) State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Rule 31a-1(a)
Rule 31a-1(b)(1), (2), (3), (5), (6), (7), (8)
Rule 31a-2(a)

(d) Loomis Sayles Distributors, L.P.
One Financial Center
Boston, MA 02111
Rule 31a-1(d)
Rule 31a-2(c)

ITEM 29. MANAGEMENT SERVICES

Not applicable.

Item 30. Undertakings

Not applicable.

********************
NOTICE

A copy of the Agreement and Declaration of Trust of Loomis Sayles Funds (the
"Trust") is on file with the Secretary of The Commonwealth of Massachusetts and
the Clerk of the City of Boston and notice is hereby given that this
Registration Statement has been executed on behalf of the Trust by officers of
the Trust as officers and not individually and by its Trustees as trustees and
not individually and that the obligations of or arising out of this Registration
Statement are not binding upon any of the Trustees, officers, or shareholders
individually but are binding only upon the assets and property of the Trust.

-6-
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, The Commonwealth
of Massachusetts, on the 19th day of November, 1999.

LOOMIS SAYLES FUNDS

By: DANIEL J. FUSS*
-------------------------------
Daniel J. Fuss, President

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this amendment to the Registration Statement of
Loomis Sayles Funds has been signed below by the following persons in the
capacities and on the dates indicated.

Signature Title Date
- --------- ----- ----

DANIEL J. FUSS* President and Trustee November 19, 1999
- ---------------------------
Daniel J. Fuss

MARK W. HOLLAND Treasurer November 19, 1999
- ---------------------------
Mark W. Holland

JOSEPH ALAIMO* Trustee November 19, 1999
- ---------------------------
Joseph Alaimo

RICHARD S. HOLWAY* Trustee November 19, 1999
- ---------------------------
Richard S. Holway

MICHAEL T. MURRAY* Trustee November 19, 1999
- ---------------------------
Michael T. Murray

*By: MARK W. HOLLAND
--------------------------
Mark W. Holland, Attorney-in-fact
November 19, 1999

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<PAGE>

INDEX TO EXHIBITS

Exhibit No. Description
- ----------- ------------

(d)(3) Form of Advisory Agreement between the Trust, on behalf of its
Loomis Sayles Emerging Markets Fund, and Loomis, Sayles & Company,
L.P.

(e) Form of Amended and Restated Distribution Agreement.

(o) Amended and Restated Rule 18f-3(d) Plan.

(q) Power of Attorney for Joseph Alaimo.

-8-

<PAGE>

ADVISORY AGREEMENT

AGREEMENT made this ___ day of November, 1999, by and between Loomis
Sayles Funds, a Massachusetts business trust (the "Trust"), with respect to its
Loomis Sayles Emerging Markets Fund series (the "Series"), and Loomis, Sayles &
Company, L.P., a Delaware limited partnership (the "Adviser").

WITNESSETH:

WHEREAS, the Trust and the Adviser wish to enter into an agreement
setting forth the terms upon which the Adviser will perform certain services for
the Series;

NOW THEREFORE, in consideration of the premises and covenants
hereinafter contained, the parties agree as follows:

1. The Trust hereby employs the Adviser to manage the investment and
reinvestment of the assets belonging to the Series and to perform the other
services herein set forth, subject to the supervision of the Board of Trustees
of the Trust. The Adviser hereby accepts such employment and agrees, at its own
expense, to render the services and to assume the obligations herein set forth,
for the compensation herein provided. The Adviser shall for all purposes herein
be deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Trust in
any way or otherwise be deemed an agent of the Trust.

2. In carrying out its obligations to manage the investment and
reinvestment of the assets belonging to the Series, the Adviser shall:

(a) obtain and evaluate such economic, statistical and
financial data and information and undertake such additional investment
research as it shall believe necessary or advisable for the management
of the investment and reinvestment of the assets belonging to the
Series in accordance with the Series' investment objective and
policies;

(b) take such steps as are necessary to implement the
investment policies of the Series by purchase and sale of securities,
including the placing of orders for such purchase and sale; and

(c) regularly report to the Board of Trustees with respect to
the implementation of the investment policies of the Series.

-1-
<PAGE>

3. All activities in connection with the management of the affairs of
the Series undertaken by the Adviser pursuant to this Agreement shall at all
times be subject to the supervision and control of the Board of Trustees, any
duly constituted committee thereof or any officer of the Trust acting pursuant
to like authority.

4. In addition to performing at its expense the obligations set forth
in section 2 hereof, the Adviser shall furnish to the Trust at the Adviser's own
expense or pay the expenses of the Trust for the following:

(a) office space in such place or places as may be agreed upon
from time to time, and all necessary office supplies, facilities and
equipment;

(b) necessary executive and other personnel for managing the
affairs of the Series (exclusive of those related to and to be
performed under contract for custodial, transfer, dividend and plan
agency services by the entity or entities selected to perform such
services and exclusive of any managerial functions described in section
5); and

(c) compensation, if any, of Trustees of the Trust who are
directors, officers, partners or employees of the Adviser or any
affiliated person (other than a registered investment company) of the
Adviser.

5. Except as the Adviser may otherwise agree from time to time, nothing
in section 4 hereof shall require the Adviser to bear, or to reimburse the Trust
for:

(a) any of the costs of printing and distributing the items
referred to in subsection (n) of this section 5;

(b) any of the costs of preparing, printing and distributing
sales literature;

(c) compensation of Trustees of the Trust who are not
directors, officers, partners or employees of the Adviser or of any
affiliated person (other than a registered investment company) of the
Adviser;

(d) registration, filing and other fees in connection with
requirements of regulatory authorities;

(e) the charges and expenses of the custodian appointed by the
Trust for custodial, paying agent, transfer agent and plan agent
services;

(f) charges and expenses of independent accountants retained
by the Trust;

(g) charges and expenses of any transfer agents and registrars
appointed by the Trust;

-2-
<PAGE>

(h) brokers' commissions and issue and transfer taxes
chargeable to the Trust in connection with securities transactions to
which the Trust is a party;

(i) taxes and fees payable by the Trust to Federal, State or
other governmental agencies;

(j) any cost of certificates representing shares of the
Series;

(k) legal fees and expenses in connection with the affairs of
the Trust including registering and qualifying its shares with Federal
and State regulatory authorities;

(l) expenses of meetings of shareholders and Trustees of the
Trust;

(m) interest, including interest on borrowings by the Trust;

(n) the cost of services, including services of counsel,
required in connection with the preparation of the Trust's registration
statements and prospectuses, including amendments and revisions
thereto, annual, semiannual and other periodic reports of the Trust,
and notices and proxy solicitation material furnished to shareholders
of the Trust or regulatory authorities; and

(o) the Trust's expenses of bookkeeping, accounting, auditing
and financial reporting, including related clerical expenses.

6. The services of the Adviser to the Trust hereunder are not to be
deemed exclusive and the Adviser shall be free to render similar services to
others, so long as its services hereunder are not impaired thereby.

7. As full compensation for all services rendered, facilities furnished
and expenses borne by the Adviser hereunder, the Trust shall pay the Adviser
compensation at the annual percentage rate of 1.25%, or such lesser rate as the
Adviser may agree to from time to time. Such compensation shall be payable
monthly in arrears or at such other intervals, not less frequently than
quarterly, as the Board of Trustees of the Trust may from time to time determine
and specify in writing to the Adviser. The Adviser hereby acknowledges that the
Trust's obligation to pay such compensation is binding only on the assets and
property belonging to the Series.

8. If the total of all ordinary business expenses of the Series or the
Trust as a whole (including investment advisory fees but excluding taxes and
portfolio brokerage commissions) for any fiscal year exceeds the lowest
applicable percentage of average net assets or income limitations prescribed by
any state in which shares of the Series are qualified for sale, the Adviser
shall pay any such excess. Solely for purposes of applying such limitations

-3-
<PAGE>

in accordance with the foregoing sentence, the Series and the Trust shall each
be deemed to be a separate fund subject to such limitations. Should the
applicable state limitation provisions fail to specify how the average net
assets of the Trust or belonging to the Series are to be calculated, that figure
shall be calculated by reference to the average daily net assets of the Trust or
the Series, as the case may be.

9. It is understood that any of the shareholders, trustees, officers,
employees and agents of the Trust may be a partner, shareholder, director,
officer, employee or agent of, or be otherwise interested in, the Adviser, any
affiliated person of the Adviser, any organization in which the Adviser may have
an interest or any organization which may have an interest in the Adviser; that
the Adviser, any such affiliated person or any such organization may have an
interest in the Trust; and that the existence of any such dual interest shall
not affect the validity hereof or of any transactions hereunder except as
otherwise provided in the Agreement and Declaration of Trust of the Trust and
the Partnership Agreement of the Adviser, respectively, or by specific
provisions of applicable law.

10. This Agreement shall become effective as of the date of its
execution, and

(a) unless otherwise terminated, this Agreement shall continue
in effect for two years from the date of execution, and from year to
year thereafter only so long as such continuance is specifically
approved at least annually (i) by the Board of Trustees of the Trust or
by vote of a majority of the outstanding voting securities of the
Series, and (ii) by vote of a majority of the Trustees of the Trust who
are not interested persons of the Trust or the Adviser, cast in person
at a meeting called for the purpose of voting on such approval;

(b) this Agreement may at any time be terminated on sixty
days' written notice to the Adviser either by vote of the Board of
Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the Series;

(d) this Agreement may be terminated by the Adviser on ninety
days' written notice to the Trust;

(e) if the Adviser requires the Trust or the Series to change
its name so as to eliminate all references to the words "Loomis" or
"Sayles," then this Agreement shall automatically terminate at the time
of such change unless the continuance of this Agreement after such
change shall have been specifically approved by vote of a majority of
the outstanding voting securities of the Series and by vote of a
majority of the Trustees of the Trust who are not interested persons of
the Trust or the Adviser, cast in person at a meeting called for the
purpose of voting on such approval.

-4-
<PAGE>

Termination of this Agreement pursuant to this section 10 shall be
without payment of any penalty.

11. This Agreement may be amended at any time by mutual consent of the
parties, provided that such consent on the part of the Trust shall have been
approved by vote of a majority of the outstanding voting securities of the
Series and by vote of a majority of the Trustees of the Trust who are not
interested persons of the Trust or the Adviser, cast in person at a meeting
called for the purposes of voting on such approval.

12. For the purposes of this Agreement, the terms "vote of a majority
of the outstanding voting securities," "interested person," "affiliated person"
and "assignment" shall have their respective meanings defined in the Investment
Company Act of 1940 and the rules and regulations thereunder, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act. References in this Agreement to any assets, property or
liabilities "belonging to" the Series shall have the meaning defined in the
Trust's Agreement and Declaration of Trust and By-Laws as amended from time to
time.

13. In the absence of willful misfeasance, bad faith or gross
negligence on the part of the Adviser, or reckless disregard of its obligations
and duties hereunder, the Adviser shall not be subject to any liability to the
Trust, to any shareholder of the Trust or to any other person, firm or
organization, for any act or omission in the course of, or connected with,
rendering services hereunder.

-5-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.

LOOMIS SAYLES FUNDS,
on behalf of its
Loomis Sayles Emerging Markets Fund

By:
--------------------------------
Name:
Title:

LOOMIS, SAYLES & COMPANY, L.P.

By:
--------------------------------
Name:
Title:

A copy of the Agreement and Declaration of Trust establishing the Trust
is on file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this Agreement is executed with respect to the
Trust's Loomis Sayles Emerging Markets Fund series on behalf of the Trust by
officers of the Trust as officers and not individually and that the obligations
of or arising out of this Agreement are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon the assets and
property belonging to the Series.

<PAGE>

AMENDED AND RESTATED
DISTRIBUTION AGREEMENT

AGREEMENT made this 1st day of November, 1999 by and between LOOMIS
SAYLES FUNDS, a Massachusetts business trust (the "Trust"), and LOOMIS SAYLES
DISTRIBUTORS, L.P., a Delaware limited partnership (the "Distributor").

W I T N E S S E T H:

In consideration of the premises and covenants hereinafter contained,
the Trust and the Distributor agree as follows:

1. DISTRIBUTOR. The Trust hereby appoints the Distributor as general
distributor of shares of beneficial interest of each series ("Series")
of the Trust ("Series shares") during the term of this Agreement. The
Trust reserves the right, however, to refuse at any time or times to
sell any Series shares hereunder for any reason deemed adequate by the
Board of Trustees of the Trust.

2. SALE AND PAYMENT. Under this agreement, the following provisions shall
apply with respect to the sale of and payment for Series shares:

(a) The Distributor shall have the right, as principal, to
purchase Series shares from the Trust at their net asset value
and to sell such shares to the public against orders therefor
at such net asset value, together with, in the case of the
Series shares of the Loomis Sayles Managed Bond Fund and Class
J shares of the Loomis Sayles Investment Grade Bond Fund, the
applicable sales charge, as set forth in the current
prospectus(es) of the Trust relating to the Series shares of
such Series.

(b) Prior to the time of delivery of any shares by the Trust to,
or on the order of, the Distributor, the Distributor shall pay
or cause to be paid to the Trust or to its order an amount in
Boston or New York clearing house funds equal to the
applicable net asset value of such shares.

3. FEE. For its services as general distributor of the Series shares, the
Trust shall pay to the Distributor on behalf of the Series a
distribution fee at the rate and upon the terms and conditions set
forth in the Distribution Plan(s) attached as Exhibit A hereto, and as
amended from time to time. The Distribution Fee shall be accrued daily
and paid monthly to the Distributor as soon as practicable after the
end of the calendar month in which it accrues, but in any event within
five business days following the last day of the month. In addition,
the Distributor shall, in the case of Series shares of the Loomis
Sayles Managed Bond Fund and Class J shares of the Loomis Sayles
Investment Grade Bond Fund, be entitled to retain any applicable sales
charge, as set forth in the current prospectus(es) of the Trust
relating to Series shares of such Series.

<PAGE>

4. PUBLIC OFFERING PRICE. The public offering price shall be the net asset
value of Series shares, together with, in the case of the Loomis Sayles
Managed Bond Fund and Class J shares of the Loomis Sayles Investment
Grade Bond Fund, the applicable sales charge, as set forth in the
current prospectus(es) of the Trust relating to the Series shares of
such Series. The net asset value of Series shares shall be determined
in accordance with the provisions of the agreement and declaration of
trust and by-laws of the Trust and the current prospectus(es) of the
Trust relating to the Series shares.

5. TRUST ISSUANCE OF SERIES SHARES. The delivery of Series shares shall be
made promptly by a credit to a shareholder's open account for the
relevant Series. The Trust reserves the right (a) to issue Series
shares at any time directly to the shareholders of the Series as a
stock dividend or stock split, (b) to issue to such shareholders Series
shares, or rights to subscribe to Series shares, as all or part of any
dividend that may be distributed to shareholders of the Series or as
all or part of any optional or alternative dividend that may be
distributed to shareholders of the Series, and (c) to sell Series
shares in accordance with any current applicable prospectus of the
Trust relating to the Series shares.

6. REPURCHASE. The Distributor shall act as agent for the Trust in
connection with the repurchase of Series shares by the Trust to the
extent and upon the terms and conditions set forth in the current
applicable prospectus(es) of the Trust relating to the Series shares,
and the Trust agrees to reimburse the Distributor, from time to time
upon demand, for any reasonable expenses incurred in connection with
such repurchases of shares.

7. UNDERTAKING REGARDING SALES. The Distributor shall use reasonable
efforts to sell Series shares but does not agree hereby to sell any
specific number of Series shares and shall be free to act as
distributor of the shares of other investment companies. Series shares
will be sold by the Distributor only against orders therefor. The
Distributor shall not purchase Series shares from anyone except in
accordance with Sections 2 and 6 and shall not take "long" or "short"
positions in Series shares contrary to the agreement and declaration of
trust or by-laws of the Trust.

8. COMPLIANCE. The Distributor shall conform to the Conduct Rules of the
National Association of Securities Dealers, Inc. ("NASD") and the sale
of securities laws of any jurisdiction in which it sells, directly or
indirectly, any Series shares. The Distributor agrees to make timely
filings, with the Securities and Exchange Commission (the "SEC") in
Washington, D.C., the NASD and such other regulatory authorities as may
be required, of any sales literature relating to the Series and
intended for distribution to prospective investors. The Distributor
also agrees to furnish to the Trust sufficient copies of any agreements
or plans it intends to use in connection with any sales of Series
shares in adequate time for the Trust to file and clear them with the
proper

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<PAGE>

authorities before they are put in use (which the Trust agrees to use
its best efforts to do as expeditiously as reasonably possible), and
not to use them until so filed and cleared.

9. REGISTRATION AND QUALIFICATION OF SERIES SHARES. The Trust agrees to
execute such papers and to do such acts and things as shall from time
to time be reasonably requested by the Distributor for the purpose of
qualifying and maintaining qualification of the Series shares for sale
under the so-called Blue Sky Laws of any state or for maintaining the
registration of the Trust and of the Series shares under the federal
Investment Company Act of 1940 (the "1940 Act") and the federal
Securities Act of 1933, to the end that there will be available for
sale from time to time such number of Series shares as the Distributor
may reasonably be expected to sell. The Trust shall advise the
Distributor promptly of (a) any action of the SEC or any authorities of
any state or territory, of which it may be advised, affecting
registration or qualification of the Trust or the Series shares, or
rights to offer Series shares for sale, and (b) the happening of any
event which makes untrue any statement or which requires the making of
any change in the Trust's registration statement or its prospectus
relating to the Series shares in order to make the statements therein
not misleading.

10. DISTRIBUTOR INDEPENDENT CONTRACTOR. The Distributor shall be an
independent contractor and neither the Distributor nor any of its
officers or employees as such is or shall be an employee of the Trust.
The Distributor is responsible for its own conduct and the employment,
control and conduct of its agents and employees and for injury to such
agents or employees or to others through its agents or employees. The
Distributor assumes full responsibility for its agents and employees
under applicable statutes and agrees to pay all employer taxes
thereunder.

11. EXPENSES PAID BY DISTRIBUTOR. While the Distributor continues to act as
agent of the Trust to obtain subscriptions for and to sell Series
shares, the Distributor shall pay the following:

(a) all expenses of printing (exclusive of typesetting) and
distributing any prospectus for use in offering Series shares
for sale, and all other copies of any such prospectus used by
the Distributor, and

(b) all other expenses of advertising and of preparing, printing
and distributing all other literature or material for use in
connection with offering Series shares for sale.

12. INTERESTS IN AND OF DISTRIBUTOR. It is understood that any of the
shareholders, trustees, officers, employees and agents of the Trust may
be a shareholder, director, officer, employee or agent of, or be
otherwise interested in, the Distributor, any affiliated person of the
Distributor, any organization in which the Distributor may have an
interest or any organization which may have an interest in the
Distributor; that the

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<PAGE>

Distributor, any such affiliated person or any such organization may
have an interest in the Trust; and that the existence of any such dual
interest shall not affect the validity hereof or of any transaction
hereunder except as otherwise provided in the agreement and declaration
of trust or by-laws of the Trust, in the limited partnership agreement
of the Distributor or by specific provision of applicable law.

13. EFFECTIVE DATE AND TERMINATION. This Agreement shall become effective
as of the date of its execution, and

(a) Unless otherwise terminated, this Agreement shall continue in
effect with respect to the shares of a Series so long as such
continuation is specifically approved at least annually (i) by
the Board of Trustees of the Trust or by the vote of a
majority of the votes which may be cast by shareholders of the
Series and (ii) by a vote of a majority of the Board of
Trustees of the Trust who are not interested persons of the
Distributor or the Trust, cast in person at a meeting called
for the purpose of voting on such approval.

(b) This Agreement may at any time be terminated on sixty days'
notice to the Distributor either by vote of a majority of the
Trust's Board of Trustees then in office or by the vote of a
majority of the votes which may be cast by shareholders of the
Series.

(d) This Agreement may be terminated by the Distributor on ninety
days' written notice to the Trust.

Termination of this Agreement pursuant to this section shall be without payment
of any penalty.

14. DEFINITIONS. For purposes of this Agreement, the following definitions
shall apply:

(a) The "vote of a majority of the votes which may be cast by
shareholders of the Series" means (1) 67% or more of the votes
of the Series present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the
outstanding shares of the Series entitled to vote at such
meeting are present; or (2) the vote of the holders of more
than 50% of the outstanding shares of the Series entitled to
vote at such meeting, whichever is less.

(b) The terms "affiliated person," "interested person" and
"assignment" shall have their respective meanings as defined
in the 1940 Act subject, however, to such exemptions as may be
granted by the SEC under the 1940 Act.

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<PAGE>

15. AMENDMENT. This Agreement may be amended at any time by mutual consent
of the parties, provided that such consent on the part of the Series
shall be approved (i) by the Board of Trustees of the Trust or by vote
of a majority of the votes which may be cast by shareholders of the
Series and (ii) by a vote of a majority of the Board of Trustees of the
Trust who are not interested persons of the Distributor or the Trust
cast in person at a meeting called for the purpose of voting on such
approval.

16. APPLICABLE LAW AND LIABILITIES. This Agreement shall be governed by and
construed in accordance with the laws of The Commonwealth of
Massachusetts. All sales hereunder are to be made, and title to the
Series shares shall pass, in Boston, Massachusetts.

17. LIMITED RECOURSE. The Distributor hereby acknowledges that the Trust's
obligations hereunder are binding only on the assets and property
belonging to the Trust.

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<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.

LOOMIS SAYLES FUNDS

By:
-----------------------------------------
Daniel J. Fuss
President

LOOMIS SAYLES DISTRIBUTORS, L.P.
By: Loomis Sayles Distributors, Incorporated,
its general partner

By:
-----------------------------------------
Lauren B. Pitalis
President

A copy of the Agreement and Declaration of Trust establishing Loomis
Sayles Funds (the "Trust") is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this Agreement is executed on
behalf of the Trust by officers of the Trust as officers and not individually
and that the obligations of or arising out of this Agreement are not binding
upon any of the trustees, officers or shareholders of the Trust individually but
are binding only upon the assets and property of the Trust.

-6-

<PAGE>

LOOMIS SAYLES FUNDS

AMENDED AND RESTATED PLAN
PURSUANT TO RULE 18F-3(D) UNDER THE INVESTMENT COMPANY ACT OF 1940

Effective February 1, 1999

Each of the series of Loomis Sayles Funds (the "Trust") managed by
Loomis, Sayles & Company, L.P. ("Loomis Sayles") (each a "Fund" and, together,
the "Funds") may from time to time issue one or more of the following classes of
shares: Retail Class shares, Institutional Class shares, Admin Class shares and
Class J shares. Each class is subject to such investment minimums and other
conditions of eligibility as are set forth in the Funds' registration statements
as from time to time in effect. The differences in expenses among these classes
of shares, and the conversion and exchange features of each class of shares, are
set forth below in this Plan. Expenses are allocated among the classes of shares
of each Fund based upon the net assets of each Fund attributable to shares of
each class, except (1) as noted below and (2) each class may bear Omnibus
Account Expenses relating to holders of shares of such class. Omnibus Account
Expenses include payments made for sub-accounting, recordkeeping, investor
communications, investor servicing, proxy or voting instruction solicitation or
tabulation and similar functions and services performed or provided to or with
respect to investors who hold shares of such class through any kind of omnibus,
"street name," nominee or similar account (that is, an account of record that
represents ownership by a beneficial owner or owners other than the owner of
record).

This Plan is subject to change, to the extent permitted by law and by
the Agreement and Declaration of Trust and By-laws of each Fund, by action of
the Trustees of each Fund.

RETAIL CLASS SHARES

DISTRIBUTION AND SERVICE FEES

Retail Class shares pay distribution and service fees pursuant to plans
(the "Plans") adopted pursuant to Rule 12b-1 under the Investment Company Act of
1940 (the "1940 Act"). Retail Class shares also bear any costs associated with
obtaining shareholder approval of any amendments to a Plan. Pursuant to the
Plans, Retail Class shares may pay up to 0.25% of the relevant Fund's average
net assets attributable to the Retail Class shares (which percentage

<PAGE>

may be less for certain Funds, as described in the Funds' registration
statements as from time to time in effect). Amounts payable under the Plans are
subject to such further limitations as the Trustees may from time to time
determine and as set forth in the registration statement of each Fund as from
time to time in effect.

EXCHANGE AND CONVERSION FEATURES

To the extent provided in the registration statement of the relevant
Fund as from time to time in effect, Retail Class shares of any Fund may be
exchanged, at the holder's option and subject to minimum investment
requirements, for Retail Class shares of any other Fund that offers Retail Class
shares, provided that Retail Class shares of such other Fund are available to
residents of the relevant state. Retail Class shares may also be exchanged for
shares of certain money market funds advised by New England Funds Management,
L.P., an affiliate of Loomis Sayles. The Funds reserve the right to terminate or
limit the exchange privilege of any shareholder who makes more than four
exchanges in a calendar year. The Funds may terminate or change the exchange
privilege at any time upon 60 days' notice to shareholders.

Retail Class shares do not convert to any other class of shares.

INSTITUTIONAL CLASS SHARES

DISTRIBUTION FEES

Institutional Class shares pay no distribution fees.

EXCHANGE AND CONVERSION FEATURES

To the extent provided in the registration statement of the relevant
Fund as from time to time in effect, Institutional Class shares of any Fund may
be exchanged, at the holder's option, for Institutional Class shares of any
other Fund that offers Institutional Class shares, provided that Institutional
Class shares of such other Fund are available to residents of the relevant
state. Institutional Class shares may also be exchanged for shares of certain
money market funds advised by New England Funds Management, L.P., an affiliate
of Loomis Sayles. The Funds reserve the right to terminate or limit the exchange
privilege of any shareholder who makes more than four exchanges in a calendar
year. The Funds may terminate or change the exchange privilege at any time upon
60 days' notice to shareholders.

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<PAGE>

Institutional Class shares do not convert to any other class of shares.

ADMIN CLASS SHARES

ADMINISTRATIVE FEES

Admin Class shares pay administrative fees to certain financial
intermediaries for providing personal service and account maintenance for their
customers who hold Admin Class shares. These fees are paid on the average daily
net assets attributable to Admin Class shares at the annual rate stated in the
Funds' registration statements as from time to time in effect.

DISTRIBUTION AND SERVICE FEES

Admin Class shares pay distribution and service fees pursuant to plans
(the "Plans") adopted pursuant to Rule 12b-1 under the 1940 Act. Admin Class
shares also bear any costs associated with obtaining shareholder approval of any
amendments to a Plan. Pursuant to the Plans, Admin Class shares may pay up to
0.25% of the relevant Fund's average net assets attributable to the Admin Class
shares (which percentage may be less for certain Funds, as described in the
Funds' registration statements as from time to time in effect). Amounts payable
under the Plans are subject to such further limitations as the Trustees may from
time to time determine and as set forth in the registration statement of each
Fund as from time to time in effect.

EXCHANGE AND CONVERSION FEATURES

To the extent provided in the registration statement of the relevant
Fund as from time to time in effect, Admin Class shares of any Fund may be
exchanged, at the holder's option and subject to minimum investment
requirements, for Admin Class shares of any other Fund that offers Admin Class
shares, provided that Admin Class shares of such other Fund are available to
residents of the relevant state. Admin Class shares may also be exchanged for
shares of certain money market funds advised by New England Funds Management,
L.P., an affiliate of Loomis Sayles. The Funds reserve the right to terminate or
limit the exchange privilege of any shareholder who makes more than four
exchanges in a calendar year. The Funds may terminate or change the exchange
privilege at any time upon 60 days' notice to shareholders.

Admin Class shares do not convert to any other class of shares.

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<PAGE>

CLASS J SHARES

DISTRIBUTION AND SERVICE FEES

Class J shares pay distribution and service fees pursuant to plans (the
"Plans") adopted pursuant to Rule 12b-1 under the 1940 Act. Class J shares also
bear any costs associated with obtaining shareholder approval of any amendments
to a Plan. Pursuant to the Plans, Class J shares may pay up to 0.75% of the
relevant Fund's average net assets attributable to the Class J shares (which
percentage may be less for certain Funds, as described in the Funds'
registration statements as from time to time in effect). Amounts payable under
the Plans are subject to such further limitations as the Trustees may from time
to time determine and as set forth in the registration statement of each Fund as
from time to time in effect.

EXCHANGE AND CONVERSION FEATURES

To the extent provided in the registration statement of the relevant
Fund as from time to time in effect, Class J shares of any Fund may be
exchanged, at the holder's option and subject to minimum investment
requirements, for Class J shares of any other Fund that offers Class J shares,
provided that Class J shares of such other Fund are available to residents of
the relevant state. The Funds reserve the right to terminate or limit the
exchange privilege of any shareholder who makes more than four exchanges in a
calendar year. The Funds may terminate or change the exchange privilege at any
time upon 60 days' notice to shareholders.

Class J shares do not convert to any other class of shares.

-4-

<PAGE>

POWER OF ATTORNEY

The undersigned hereby constitutes Mark W. Holland, Sheila M. Barry
and Philip R. Murray, each of them to sign for Joseph Alaimo, in his name and
in the capacity indicated below, any and all registration statements of
Loomis Sayles Funds, a Massachusetts business trust, under the Securities Act
of 1933 or the Investment Act of 1940, and generally to do all things in his
name and in his behalf to enable Loomis Sayles Funds to comply with the
provisions of the Securities Act of 1933, the Investment Company Act of 1940,
and all requirements and regulations of the Securities and Exchange
Commission, hereby ratifying and confirming his signature as it may be signed
by his said attorneys to any and all registration statements and amendments
thereto.

Witness my hand this 25th day of August, 1999.

/s/ Joseph Alaimo
----------------------------
Joseph Alaimo
Trustee