<PAGE>
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LOOMIS SAYLES FUNDS
EQUITY FUNDS
// // //
ANNUAL REPORT
SEPTEMBER 30, 1999
// Aggressive Growth Fund
(formerly Mid-Cap Growth Fund)
// Core Value Fund
// Growth Fund
// International Equity Fund
// Mid-Cap Value Fund
// Small Cap Growth Fund
// Small Cap Value Fund
// Worldwide Fund
A FAMILY OF NO-LOAD FUNDS
L O O M I S
------------
S A Y L E S
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F U N D S
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ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
800 - 633 - 3330
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<S> <C>
Corporate Overview.............................. 1
Letter from the President....................... 2
Economic and Market Overview.................... 3
Institutional Class Total Return vs. Lipper
Category and Lipper Category Index............ 6
Fund and Manager Reviews........................ 8
Portfolio of Investments........................ 24
Statements of Assets and Liabilities............ 58
Statements of Operations........................ 60
Statements of Changes in Net Assets............. 62
Financial Highlights............................ 70
Notes to Financial Statements................... 88
1999 U.S. Tax and Distribution Information...... 99
Report of Independent Accountants............... 100
Board of Trustees and Officers.................. 101
</TABLE>
<PAGE>
CORPORATE OVERVIEW
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LOOMIS SAYLES FUNDS
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Loomis Sayles Funds is a Boston-based family of 16 no-load mutual funds advised
by Loomis, Sayles & Company, L.P. At Loomis Sayles Funds, we follow a simple
strategy -- we pay close attention to what we hear from our clients and the
marketplace, then work to deliver high-quality products and services that exceed
expectations.
Our "listening harder" creed lets us design products and services that truly
answer our clients' needs. We offer a broad range of no-load funds to complement
your investment objectives and strategies. We believe we run one of the most
responsive support organizations in the business, providing timely information
and insightful solutions.
Beyond that, we're structured to take advantage of our institutional heritage.
The research department at Loomis, Sayles & Company, L.P. provides our portfolio
managers with the fundamental research they need to make sound investment
decisions. Our portfolio managers not only manage mutual funds, they manage
large institutional accounts that demand and appreciate the style consistency
that follows from our disciplined investment approach.
FOR INFORMATION ABOUT:
// Establishing an account
// Account procedures and status
// Exchanges
// Shareholder services
PHONE 800-626-9390
FOR ALL OTHER INFORMATION ABOUT THE FUNDS:
PHONE 800-633-3330
To request any of the following, press or say the number
/1/ Automated Account Balances, Last Transaction and Distribution
Information
/2/ Speak to a Customer Service Representative regarding an Existing
Account
/3/ Net Asset Values and Yields
/4/ Speak to a Marketing Representative
/5/ Advisory and Broker/Dealer Services
/6/ Institutional and High Net Worth Operations, Trading and Client
Services
As always, we are interested in your comments about the job we are doing and in
answering any questions you may have. For more complete information about any of
the Loomis Sayles Funds, including charges and expenses, please call Loomis
Sayles Distributors, L.P. for a prospectus at 800-633-3330 Monday through
Friday, 8:45 a.m. to 4:45 p.m. EST. Read it carefully before you invest or send
money.
1
<PAGE>
LETTER FROM THE PRESIDENT
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DEAR SHAREHOLDERS,
- -------------------------------------------------------
[PHOTO]
DANIEL J. FUSS
Despite continued economic strength, low inflation and
relatively low interest rates, the fiscal year ended
September 30, 1999, proved to be a challenging 12-month period
for equity and fixed-income investors.
The dominating characteristic of the bond market has been
illiquidity, particularly in the United States. The marvelous
days of narrow spreads between bid and ask and relatively
narrow spreads between quality and sector components of the
bond market have not returned. Things did improve somewhat from
the beginning of the fiscal year to the end, but that's about
it. In the 41 years I've been in the investment management
business, I never have seen markets this thin, except for very brief periods.
Nevertheless, this does not mean there is a shortage of opportunities. On the
contrary, this is one of the better times to construct a bond portfolio,
primarily because market liquidity is poor and spreads, no matter how you define
them, are wide. While it is not a good time to try to sell bonds in the
secondary market, it is a wonderful time to be a bond buyer with a longer-term
horizon. And, because our expertise is researching and selecting attractive
bonds, we are obviously comfortable with this environment.
Our best guess is that this period of poor liquidity will probably last through
the rest of the year and perhaps into early 2000. The best way to structure a
portfolio for this type of environment is to focus on where the spreads are
wide, then buy, hold and wait.
In the equity arena, the technological revolution was almost solely responsible
for the market's continued momentum. Large-capitalization growth stocks
continued to be the favored investment, despite a short-lived rally by smaller
and value-oriented stocks in the second quarter of 1999. But the stock market
was plagued by volatility throughout the year, as nervous investors reacted
severely to global events, earnings disappointments and any signs of growing
inflation in the U.S.
Looking ahead, the markets will be faced with some uncertainties, such as the
effect of the euro, the future of Internet-related stocks, the direction of U.S.
interest rates, and Y2K. Our best course of action remains precaution. In the
face of such uncertainty, we have positioned our funds to weather
wider-than-normal market swings, without giving up potential performance
advantages.
Regarding the Y2K issue, we believe the effects on the economy and markets are
likely to be only minor and temporary, but we do acknowledge that there remains
a degree of uncertainty surrounding the event. We want to assure you, our
shareholders, that at Loomis, Sayles & Company, L.P. we have been working
diligently to ensure a smooth transition into the Year 2000. We have taken steps
to prepare our systems and to ensure our business partners have done the same. A
contingency plan has been developed for the millennium rollover in the event
that unforeseen events occur. As a precautionary measure, though, we encourage
you to save all of your financial statements for the year. Also, if you have
particular questions or concerns about Y2K, speak with a Loomis representative
at (800) 633-3330 to gain further insight. The key to minimizing the impact of
Y2K is becoming familiar with the issue and preparing as well as you can.
Sincerely,
/s/ Daniel J. Fuss
Daniel J. Fuss
President
Loomis Sayles Funds
2
<PAGE>
ECONOMIC AND MARKET OVERVIEW
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LOOMIS SAYLES ECONOMIC AND MARKET OVERVIEW
ANNUAL REPORT FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999
- -------------------------------------------------------
STOCKS
Investors went hog-wild on technology stocks while virtually everything else
took a backseat. For the first nine months of 1999, eleven of the top fifteen
contributors to the Standard & Poor's 500 Index total return were purely
technology companies, and they accounted for all but 50 basis points of the
index return. Interest rates rose dramatically, as the Federal Reserve Board
seemed to be paying more attention to the level of the stock market than
inflation in setting its policies. Oil prices jumped on production cutbacks by
OPEC, which gave a boost to commodity-oriented industries.
FOURTH QUARTER 1998
This quarter really has to be broken into two parts -- the first eight days, and
the rest. The period from October 1 to October 8 saw the culmination of the
market downturn that began in the third quarter, on the heels of currency and
economic crises in both Asia and Russia. The S&P 500 hit its near-term low on
October 8, down 5.7% in just over a week and almost 20% from its July 17 high.
Small stocks, as measured by the Russell 2000 Index, were down almost 15% in the
first eight days of the quarter.
Then the Federal Reserve Board gave indications that it would ease the money
supply in order to stabilize the domestic markets and lend a hand to overseas
economies. The first actual rate cut took effect on October 15, and investor
optimism drove the market back to new highs. From the October 8 low to the end
of the year, the S&P 500 was up 28.6%, and the Russell 2000 Index did even
better, turning in a 36.3% return.
All the symptoms were in place for a turn in long-term cycles as well. Large
stocks had beaten small stocks for 12 of the previous 15 years, and history
shows a strong pattern of small stocks outperforming when the market comes out
of a steep drop.
Also true to form was the fact that the lower interest rate environment did not
greatly help commodity-oriented industries such as oil refining, mining,
chemicals, and lumber, which tend to benefit from inflation more than other
sectors.
FIRST QUARTER 1999
With a market correction and recovery cycle already complete, and a new year on
the calendar, predictions were out in full force with a few recurring themes.
Among them were:
- - After four consecutive years of returns between 23% and 37%, the S&P 500
would have a below-average year. Y2K concerns would make investors more
cautious and earnings would take a hit as companies poured money into Y2K
readiness plans.
3
<PAGE>
ECONOMIC AND MARKET OVERVIEW (CONTINUED)
- -----------------------------------------------------------------------
- - Both small and value stocks would make a comeback, after losing much ground
to large growth stocks since 1994.
- - Technological advances would continue to boost productivity, making continued
expansion without inflationary pressures possible. There would be no need for
the Federal Reserve Board to increase interest rates.
When put to the test, many of these forecasts faltered. The S&P 500 was up 5%,
with its growth component leading the way by a margin of 7.0% vs. 2.7% for the
value component. Small stocks were down 5.5%. And the 30-year U.S. Treasury bond
yield rose from 5.10% to 5.63% from the end of December to the end of March. In
other words, the experts were right on all but three of their major predictions.
The experts were actually right on one prediction. The Federal Reserve Board
didn't raise rates. But they might as well have, when they said at their
February meeting that they were taking a tightening bias. This could translate
into a rate increase in the near future.
The experts are not necessarily losing their touch; a lot of the phenomenon can
be summed up in one word, Internet. Consider the returns on the following six
stocks, all of which were in excess of $10 billion at the beginning of the
quarter: America Online, up 90%; Yahoo!, up 42%; Amazon.com, up 61%; @Home, up
112%; E-Bay, up 71%; and Netscape Communications, up 61%. Investors had thrown
traditional valuation methods to the wind; at the beginning of the quarter, out
of the stocks listed, only America Online had been showing a profit.
This type of price escalation carried over into smaller companies as well, yet
it did not help small-cap managers much, due to the fact that these high-flying
stocks soon exceeded the upper capitalization size limits imposed on small-cap
managers.
SECOND QUARTER 1999
It was another strong quarter, with the S&P 500 up 7%, and small-cap managers
overjoyed by the 15.5% rise in the Russell 2000 Index. The small-cap rally was
fairly broad, with every industry group except financial services and consumer
staples showing double-digit increases.
The large-cap rally was a bit more concentrated. Congressional debate on a
"patient's bill of rights" sent chills throughout the entire healthcare
industry. When the dust settled on June 30, three of the five biggest drags on
S&P 500 performance were pharmaceutical companies such as, Pfizer, Merck, and
Eli Lilly. Consumer stocks, specifically Coca-Cola, American Home Products and
Gillette took hits from weak overseas sales. Small-cap consumer stocks, which
tend to have far less international exposure, weathered this situation, but
still rode the coattails of larger stocks on a path of underperformance.
4
<PAGE>
ECONOMIC AND MARKET OVERVIEW (CONTINUED)
- -----------------------------------------------------------------------
Interest rates continued to rise, with the 30-year U.S. Treasury bond yield
climbing another 0.36% to 5.99%, the first time in nearly two years that the 6%
barrier had been threatened. This goes a long way in explaining the lackluster
performance in small-cap financial services.
Once again, the story was technology and communications. Long-distance carriers
and certain computer hardware companies joined the party started by the Internet
stocks. Among the top ten contributors to the S&P 500 were IBM, Lucent
Technologies, Hewlett Packard, Cisco Systems, Bell Atlantic, SBC Communications,
Ameritech, and Texas Instruments.
THIRD QUARTER 1999
Finally, a noticeable drop in the market occurred. Wall Street soothsayers were
not wrong, they were just early. The S&P 500 was down 6.15%, with the Russell
2000 Index dropping a similar 6.30%. The Federal Reserve Board made good on its
earlier promise and raised interest rates on June 30.
The technology leadership continued unabated. Eight of the top ten S&P 500
contributors fit this category. But the traditional telephone businesses gave
back much of their second quarter gains, and lost a lot of ground to wireless
services such as Nextel and Clear Channel in the process. Along with big players
such as AT&T and MCI WorldCom, consumer stocks such as, Coca-Cola, Gap and
financial stocks like, Bank of America, Bank One, Charles Schwab for example,
were prominent on the downside. And the Federal Reserve Board made their second
interest rate increase on August 24, reminding us further of their warnings in
February that they would be taking a "tightening bias."
5
<PAGE>
INSTITUTIONAL CLASS
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TOTAL RETURN(1) VS. LIPPER CATEGORY AND
LIPPER CATEGORY INDEX(2)
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<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH
(FORMERLY
LOOMIS
SAYLES
MID-CAP
GROWTH CORE
FUND VALUE GROWTH
<S> <C> <C> <C>
- -----------------------------------------------------------
ONE YEAR
LOOMIS SAYLES 97.94 10.51 30.91
Lipper Category Average 32.86 20.59 30.34
Rank 11/394 729/866 479/1084
Percentile 3 84 44
Lipper Category Index 33.44 19.35 30.25
THREE YEARS
LOOMIS SAYLES N/A 14.20 16.62
Lipper Category Average 17.05 19.37
Rank 397/541 477/689
Percentile 73 69
Lipper Category Index 16.83 21.79
FIVE YEARS
LOOMIS SAYLES N/A 16.59 18.74
Lipper Category Average 18.78 20.00
Rank 260/349 280/420
Percentile 74 67
Lipper Category Index 18.15 21.36
MODIFIED INCEPTION(3)
LOOMIS SAYLES 33.66 13.50 14.16
Lipper Category Average 14.24 14.60 15.46
Rank 6/261 134/183 144/208
Percentile 2 73 69
Lipper Category Index 14.27 14.71 16.26
ACTUAL INCEPTION(4)
LOOMIS SAYLES 33.66 14.13 14.94
</TABLE>
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(1) Total return assumes reinvestment of dividends and capital gains
distributions. Total return shown for periods of one year or less
represents cumulative total return. Total return for periods greater than
one year represents average annual total return. Total return shown
reflects, if any, the effect of fee waivers and/or expense reimbursements.
Absent such fee waivers and/or expense reimbursements, total return would
have been lower.
(2) Lipper Category total return represents the average total return for all
funds in each Fund's corresponding investment category as determined by
Lipper Analytical Services, Inc. The Lipper Category Index total return
represents the average total return for 30 funds, or 10 funds for the
Global Flexible Portfolio Funds Index, in each Fund's corresponding
investment category as determined by Lipper Analytical Services, Inc.
Rankings are based on the total return of each Fund for the period relative
to the total return of all funds in that Fund's corresponding investment
category.*
*Source: Lipper Analytical Services.
6
<PAGE>
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<TABLE>
<CAPTION>
INTERNATIONAL MID-CAP SMALL CAP SMALL CAP
EQUITY VALUE GROWTH VALUE WORLDWIDE
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
ONE YEAR
LOOMIS SAYLES 31.96 12.86 70.30 12.80 27.82
Lipper Category Average 29.80 32.86 26.86 26.86 18.55
Rank 201/581 322/394 42/724 481/724 12/105
Percentile 35 82 6 66 11
Lipper Category Index 27.64 33.44 26.79 26.79 22.21
THREE YEARS
LOOMIS SAYLES 10.32 N/A N/A 9.35 7.61
Lipper Category Average 11.15 8.83 10.92
Rank 204/368 192/423 61/75
Percentile 55 45 81
Lipper Category Index 12.00 6.52 11.94
FIVE YEARS
LOOMIS SAYLES 9.41 N/A N/A 14.70 N/A
Lipper Category Average 9.12 13.91
Rank 102/207 93/258
Percentile 49 36
Lipper Category Index 9.98 12.90
MODIFIED INCEPTION(3)
LOOMIS SAYLES 9.56 8.38 22.98 15.77 7.62
Lipper Category Average 10.01 14.24 9.04 14.07 16.20
Rank 34/58 204/261 31/464 27/87 53/67
Percentile 59 78 7 31 79
Lipper Category Index 10.36 14.27 7.50 12.89 11.42
ACTUAL INCEPTION(4)
LOOMIS SAYLES 9.48 8.38 22.98 15.97 7.70
</TABLE>
(3) Modified inception reflects the nearest Lipper reporting period following
actual inception. Lipper performance is reported as of month end.
(4) Actual Inception Dates:
Aggressive Growth Fund ................................. December 31, 1996
Core Value Fund ............................................. May 13, 1991
Growth Fund ................................................. May 16, 1991
International Equity Fund ................................... May 10, 1991
Mid-Cap Value Fund ..................................... December 31, 1996
Small Cap Growth Fund .................................. December 31, 1996
Small Cap Value Fund ........................................ May 13, 1991
Worldwide Fund ............................................... May 1, 1996
7
<PAGE>
FUND AND MANAGER REVIEW
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LOOMIS SAYLES AGGRESSIVE GROWTH FUND
(FORMERLY LOOMIS SAYLES MID-CAP GROWTH FUND)
- -------------------------------------------------------
[PHOTO] CHRISTOPHER R. ELY
[PHOTO] PHILIP C. FINE
[PHOTO] DAVID L. SMITH
KEY FUND FACTS
OBJECTIVE: Long-term growth of capital
STRATEGY: Invests primarily in stocks with market capitalization falling within
the capitalization range of the Russell Mid-Cap Growth Index
FUND INCEPTION DATE: 12/31/96
COMMENCEMENT OF OPERATIONS OF CLASS: Institutional - 1/2/97, Retail - 1/2/97
EXPENSE RATIO: Institutional - 1.00%, Retail - 1.25%
TOTAL NET ASSETS (ALL CLASSES): $14.5 MM
PERFORMANCE
For the 12-month period ended September 30, 1999, the Institutional and Retail
classes of the Aggressive Growth Fund returned 97.94% and 97.45%, respectively,
compared to the 37.19% return for the Fund's benchmark, the Russell Mid-Cap
Growth Index. The average mid-cap fund, as measured by Lipper Analytical
Services, posted a total return of 32.86% for the same period.
The Fund invested in several initial public offerings (IPOs) during the year
which contributed to the Fund's strong performance relative to its benchmark.
There can be no assurance that the Fund will continue to invest in IPOs and, to
extent the Fund makes these investments, that IPOs will continue to perform at
the levels experienced by the Fund.
PORTFOLIO REVIEW
Early in the fiscal year, the Fund was restructured to raise its overall growth
rate. We focused on selecting high-quality companies with a record of strong,
consistent growth, market dominance and a superior management team. As a result,
the Fund's exposure to technology, retail and finance was significantly
expanded, while exposure to other sectors, such as energy, was significantly
reduced.
After the restructuring, the Fund's largest sectors remained technology, with a
focus on electronics, telecommunications and software. Despite concerns ranging
from overvaluation to the Taiwan earthquake, the technology sector continued to
drive overall performance throughout 1999. Telecommunications equipment stocks
also performed well, driven by exploding demand for global bandwidth that is
doubling every 90 days. Not surprisingly, suppliers to telecom equipment
manufacturers also experienced strong results. This favorable fundamental
outlook for technology and related sectors resulted in strong gains for several
of the Fund's holdings.
PORTFOLIO POSITIONING
We remain hopeful regarding the outlook for mid-cap growth stocks. Most
important, we believe that signs of a strong economy should indicate continued
strong earnings growth. In addition, we see no end to the cycle of innovation
and growth from the technology sector, which has become an important component
of U.S. economic growth.
We continue to take advantage of a strong IPO calendar, with many of the most
exciting companies going public as mid-cap stocks. We plan to continue to
participate in the IPO market as long as we can identify solid fundamental
opportunities in the mid-cap universe. As the Fund grows over time, we expect
that the impact of IPOs on the Fund's overall performance naturally will
diminish.
<TABLE>
<S> <C> <C>
[LOGO] [LOGO] [LOGO]
Christopher R. Ely Philip C. Fine David L. Smith
</TABLE>
8
<PAGE>
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AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION(A)
<S> <C> <C>
- --------------------------------------------------------------
Loomis Sayles Aggressive Growth Fund
(Institutional) 97.94 33.66
Loomis Sayles Aggressive Growth Fund
(Retail) 97.45 33.33
Lipper Mid-Cap Funds Index(b) 33.44 14.27
Russell Mid Cap Growth Index(c) 37.19 17.73
S&P Mid-Cap 400 Index(c) 25.50 17.06
</TABLE>
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO SEPTEMBER 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(THOUSANDS) LOOMIS SAYLES: AGGRESSIVE LIPPER MID CAP RUSSELL MID-CAP S & P MID-CAP
GROWTH FUND(D) FUND INDEX GROWTH INDEX 400 INDEX
<S> <C> <C> <C> <C>
Dec-96 $10,000 $10,000 $10,000 $10,000
Jan-97 $10,620 $10,319 $10,442 $10,375
Feb-97 $10,290 $9,927 $10,212 $10,290
Mar-97 $9,630 $9,330 $9,635 $9,851
Apr-97 $9,740 $9,503 $9,871 $10,107
May-97 $10,620 $10,456 $10,756 $10,991
Jun-97 $10,720 $10,808 $11,054 $11,299
Jul-97 $11,810 $11,663 $12,112 $12,418
Aug-97 $11,540 $11,590 $11,993 $12,403
Sep-97 $12,570 $12,331 $12,600 $13,116
Oct-97 $12,290 $11,687 $11,969 $12,545
Nov-97 $11,910 $11,654 $12,094 $12,731
Dec-97 $12,265 $11,746 $12,253 $13,225
Jan-98 $11,625 $11,584 $12,032 $12,974
Feb-98 $12,553 $12,646 $13,163 $14,048
Mar-98 $12,980 $13,233 $13,715 $14,682
Apr-98 $13,322 $13,353 $13,901 $14,950
May-98 $12,724 $12,682 $13,330 $14,277
Jun-98 $13,375 $13,180 $13,707 $14,367
Jul-98 $12,692 $12,570 $13,120 $13,810
Aug-98 $10,119 $10,031 $10,616 $11,240
Sep-98 $11,219 $10,814 $11,418 $12,289
Oct-98 $11,977 $11,347 $12,259 $13,387
Nov-98 $12,073 $12,083 $13,086 $14,055
Dec-98 $13,680 $13,381 $14,442 $15,753
Jan-99 $13,813 $13,741 $14,875 $15,140
Feb-99 $13,537 $12,887 $14,148 $14,347
Mar-99 $17,363 $13,486 $14,936 $14,748
Apr-99 $18,248 $14,066 $15,617 $15,910
May-99 $18,923 $14,089 $15,415 $15,980
Jun-99 $21,400 $14,972 $16,491 $16,834
Jul-99 $21,234 $14,694 $15,967 $16,477
Aug-99 $22,473 $14,497 $15,801 $15,913
Sep-99 $22,207 $14,430 $15,666 $15,422
</TABLE>
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a):Inception date of the Institutional and Retail Class of shares is December
31, 1996.
(b):The Lipper Mid-Cap Funds Index is an equally weighted index of typically
the 30 largest mutual funds within the mid-cap funds investment objective.
Returns are adjusted for the reinvestment of capital gains distributions
and income dividends.
(c):Prior to May 1999, the Fund used the S&P Mid-Cap 400 Index for comparative
performance purposes. Beginning in May 1999, the Fund is using the Russell
Mid-Cap Growth Index for comparative performance purposes. This Index
better represents the investment strategy of the Fund. The Russell Mid-Cap
Growth Index measures the performance of those Russell Mid-Cap Companies
with lower price-to-book ratios and lower forecasted growth values. The
stocks are also members of the Russell 1000 Value Index. The index returns
have not been lowered for ongoing management and operating expenses
applicable to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
9
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND
- -------------------------------------------------------
[PHOTO] JAMES L. CARROLL
[PHOTO] ISAAC H. GREEN
[PHOTO] JEFFREY W. WARDLOW
KEY FUND FACTS
OBJECTIVE: Long-term growth of capital and income
STRATEGY: Invests in stocks considered to be undervalued in relation to the
issuer's earnings, dividends, assets and growth prospects
FUND INCEPTION DATE: 5/13/91
COMMENCEMENT OF OPERATIONS OF CLASS: Institutional - 5/13/91, Retail - 1/2/97
EXPENSE RATIO: Institutional - 0.78%, Retail - 1.10%
TOTAL NET ASSETS (ALL CLASSES): $67.3 MM
PERFORMANCE
For the 12-month period ended September 30, 1999, the Institutional and Retail
classes of the Core Value Fund returned 10.51% and 10.18%, respectively,
compared to the 27.80% return for the Fund's benchmark, the Standard & Poor's
500 Index. The average growth and income fund, as measured by Lipper Analytical
Services, posted a total return of 20.59% for the same period.
PORTFOLIO REVIEW
Overall, for the fiscal year ended September 30, 1999, growth-oriented stocks
outpaced value-oriented stocks, continuing a trend that began in 1994.
Furthermore, large-cap stocks continued to outperform smaller-capitalization
issues.
During the second calendar quarter of 1999, the value equity style came back in
favor, accompanied by a resurgence of mid- and small-cap stocks. We modestly
reduced the Fund's exposure to health care and consumer staples and slightly
increased exposure to value sectors, such as financials, energy and utilities.
But the trend toward value proved to be short-lived, as the market soon resumed
its familiar pattern in which a narrow segment of growth-oriented sectors,
industries and individual stocks outperform while the broad market languishes.
In this environment, the best performance came from those issues with the
highest betas, highest growth rates, highest price-to-earnings ratio and largest
market capitalization. As such, the Fund underperformed the S&P 500 Index, which
has a significant growth tilt, and the Lipper Growth and Income Fund Index,
where many managers have followed the herd toward growth.
Among individual portfolio holdings, certain technology stocks offered strong
performance throughout the period. In addition, the Fund's communication
services stocks added to returns.
PORTFOLIO POSITIONING
While the renewed narrowing of the market in favor of growth-oriented and
large-cap issues has hurt Fund performance, we continue to believe that our
value style of investing is the most appropriate at this juncture. We expect the
value recovery evident in the second quarter of 1999 to resume in the near
future.
/s/ JAMES L. CARROLL James L. Carroll
/s/ ISAAC H. GREEN Isaac H. Green
/s/ JEFFREY W. WARDLOW Jeffrey W. Wardlow
10
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION(A)
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Loomis Sayles Core Value Fund
(Institutional) 10.51 14.20 16.59 14.13
Loomis Sayles Core Value Fund (Retail) 10.18 NA NA 11.62
Lipper Growth and Income Funds
Index(b) 19.35 16.83 18.15 14.71
S&P 500 Index(c) 27.80 25.09 25.03 18.10
</TABLE>
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO SEPTEMBER 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(THOUSANDS) LIPPER GROWTH & LOOMIS SAYLES
<S> <C> <C> <C>
Income Fund Index Core Value Fund(D) S&P 500 Index
5/91 $10,000.00 $10,000.00 $10,000.00
6/91 $9,539.46 $9,431.28 $9,541.87
7/91 $9,945.93 $9,744.08 $9,986.61
8/91 $10,177.45 $9,981.05 $10,223.21
9/91 $10,101.99 $9,715.65 $10,052.13
10/91 $10,259.83 $9,753.56 $10,187.27
11/91 $9,817.75 $9,118.49 $9,776.80
12/91 $10,703.30 $10,156.87 $10,894.92
1/92 $10,691.44 $10,484.51 $10,691.89
2/92 $10,891.00 $10,706.15 $10,830.36
3/92 $10,691.98 $10,455.60 $10,619.72
4/92 $10,888.46 $10,696.51 $10,931.53
5/92 $11,001.90 $10,715.78 $10,985.11
6/92 $10,818.84 $10,484.50 $10,821.68
7/92 $11,171.91 $10,908.51 $11,263.77
8/92 $10,975.87 $10,590.51 $11,033.25
9/92 $11,124.61 $10,667.60 $11,162.89
10/92 $11,173.55 $10,763.96 $11,201.46
11/92 $11,552.25 $11,361.42 $11,582.87
12/92 $11,734.16 $11,588.71 $11,725.03
1/93 $11,916.29 $11,850.03 $11,823.05
2/93 $12,093.25 $11,960.59 $11,984.20
3/93 $12,428.80 $12,181.71 $12,237.05
4/93 $12,275.06 $11,860.08 $11,941.27
5/93 $12,510.10 $12,121.40 $12,260.70
6/93 $12,588.42 $12,111.35 $12,296.61
7/93 $12,656.13 $12,020.89 $12,247.14
8/93 $13,131.87 $12,503.33 $12,711.84
9/93 $13,147.92 $12,432.97 $12,614.34
10/93 $13,351.76 $12,704.34 $12,875.28
11/93 $13,137.49 $12,523.42 $12,752.56
12/93 $13,449.77 $12,965.33 $12,906.75
1/94 $13,911.20 $13,463.60 $13,345.54
2/94 $13,558.17 $13,328.65 $12,983.31
3/94 $13,014.37 $12,778.48 $12,417.28
4/94 $13,190.66 $13,037.99 $12,576.52
5/94 $13,347.69 $13,183.32 $12,782.91
6/94 $13,082.07 $12,778.48 $12,469.57
7/94 $13,440.18 $13,224.84 $12,879.04
8/94 $13,950.91 $13,806.15 $13,407.07
9/94 $13,622.53 $13,328.64 $13,079.22
10/94 $13,773.95 $13,307.88 $13,373.05
11/94 $13,264.43 $12,685.05 $12,886.03
12/94 $13,394.05 $12,851.14 $13,077.17
1/95 $13,603.81 $13,123.41 $13,416.30
2/95 $14,112.98 $13,842.20 $13,939.15
3/95 $14,444.57 $14,212.49 $14,350.46
4/95 $14,842.84 $14,746.14 $14,773.03
5/95 $15,341.04 $15,377.81 $15,363.47
6/95 $15,630.32 $15,486.72 $15,720.32
7/95 $16,155.04 $16,085.71 $16,241.65
8/95 $16,309.35 $16,172.84 $16,282.49
9/95 $16,795.03 $16,684.71 $16,969.65
10/95 $16,567.08 $16,270.86 $16,908.99
11/95 $17,278.84 $17,011.43 $17,651.26
12/95 $17,564.83 $17,378.08 $17,991.25
1/96 $18,086.83 $17,890.95 $18,603.32
2/96 $18,339.83 $18,046.00 $18,776.39
3/96 $18,573.55 $18,236.84 $18,956.82
4/96 $18,857.72 $18,236.84 $19,236.31
5/96 $19,133.00 $18,582.73 $19,732.99
6/96 $19,051.45 $18,618.51 $19,807.68
7/96 $18,275.14 $17,938.65 $18,932.57
8/96 $18,825.42 $18,368.03 $19,331.93
9/96 $19,665.50 $19,283.36 $20,420.62
10/96 $20,111.09 $19,809.49 $20,983.23
11/96 $21,406.19 $21,192.12 $22,569.28
12/96 $21,196.32 $21,055.88 $22,122.08
1/97 $22,141.34 $22,162.66 $23,504.16
2/97 $22,329.81 $22,311.13 $23,688.37
3/97 $21,552.86 $21,555.28 $22,715.05
4/97 $22,348.93 $22,311.13 $24,071.10
5/97 $23,649.54 $23,660.87 $25,536.64
6/97 $24,576.51 $24,821.64 $26,682.54
7/97 $26,340.16 $26,988.55 $28,804.25
8/97 $25,352.33 $26,136.14 $27,190.32
9/97 $26,633.63 $27,469.76 $28,679.12
10/97 $25,748.78 $26,452.36 $27,721.31
11/97 $26,467.62 $27,236.03 $29,004.61
12/97 $26,893.06 $27,206.35 $29,502.73
1/98 $26,943.57 $27,268.04 $29,829.06
2/98 $28,633.71 $29,072.54 $31,980.48
3/98 $29,959.13 $29,951.66 $33,618.46
4/98 $30,120.38 $30,198.43 $33,956.38
5/98 $29,659.47 $29,674.04 $33,372.74
6/98 $30,016.70 $29,643.19 $34,728.61
7/98 $29,281.47 $28,301.38 $34,358.50
8/98 $25,145.96 $24,322.22 $29,398.71
9/98 $26,274.13 $25,987.91 $31,273.85
10/98 $28,182.62 $28,193.41 $33,818.33
11/98 $29,540.61 $29,165.06 $35,869.49
12/98 $30,545.16 $30,073.54 $37,934.19
1/99 $30,833.00 $30,004.09 $39,520.45
2/99 $30,151.26 $29,118.55 $38,292.20
3/99 $31,192.27 $30,177.72 $39,825.46
4/99 $33,213.53 $32,348.15 $41,366.71
5/99 $32,731.93 $32,157.15 $40,390.45
6/99 $34,087.03 $32,973.24 $42,636.16
7/99 $33,108.74 $31,757.79 $41,301.65
8/99 $32,377.03 $30,420.81 $41,099.27
9/99 $31,360.40 $28,719.19 $39,973.15
</TABLE>
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a):Inception date of the Institutional Class of shares is May 13, 1991. Since
Lipper and S&P 500 Index performance data is not available coincident with
this date, comparative performance is presented from May 31, 1991.
Inception date of the Retail Class of shares is December 31, 1996.
(b):The Lipper Growth & Income Funds Index is an equally weighted index of
typically the 30 largest mutual funds within the growth & income funds
investment objective. Returns are adjusted for the reinvestment of capital
gains distributions and income dividends.
(c):S&P 500 Index is a capitalization-weighted, total return index comprised of
500 widely held common stocks, representing industrial, utility,
transportation, and financial companies traded on the New York Stock
Exchange, the American Stock Exchange and in the Over-the-Counter market.
The index returns have not been reduced for ongoing management and
operating expenses applicable to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
11
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND
- -------------------------------------------------------
[PHOTO] MARK B. BARIBEAU
KEY FUND FACTS
OBJECTIVE: Long-term growth of capital
STRATEGY: Invests in companies with relatively small market capitalization, as
well as larger companies, which are selected on the basis of their growth
potential
FUND INCEPTION DATE: 5/16/91
COMMENCEMENT OF OPERATIONS OF CLASS:
Institutional - 5/16/91, Retail - 1/2/97
EXPENSE RATIO: Institutional - 0.85%, Retail - 1.10%
TOTAL NET ASSETS (ALL CLASSES): $28.9 MM
PERFORMANCE
For the 12-month period ended September 30, 1999, the Institutional and Retail
classes of the Growth Fund returned 30.91% and 30.56%, respectively, compared to
the 27.80% return for the Fund's benchmark, the Standard & Poor's 500 Index. The
average growth fund, as measured by Lipper Analytical Services, posted a total
return of 30.34% for the same period.
PORTFOLIO REVIEW
Overall, the Fund continued to benefit from the overall strength of
large-capitalization, growth-oriented stocks. At the same time, though, the
market remained quite volatile during the period. But, a strong economy, low
inflation and good earnings fundamentals offered genuine support to the market,
and such a positive outlook in a volatile climate allowed us to enhance returns
by taking advantage of numerous opportunities to purchase growth stocks during
periods of weakness.
For example, during the course of the second calendar quarter of 1999, at least
two selling waves occurred among technology stocks, due to Y2K worries and
rising interest rates. Given our views that Y2K will be only a transitory event
and that interest rates were near their peak for the year, we used this period
as a buying opportunity, boosting the Fund's technology position to a
significant overweight.
During the third quarter of 1999, the broader stock market declined for three-
consecutive months, primarily due to tighter monetary policy and concerns over
prospects for faltering earnings growth. In this environment we shifted assets
from more global cyclically sensitive companies, such as energy, aerospace and
consumer cyclicals, to stronger relative earnings growers in the health care and
financial services sectors, where valuations had been compressed.
The technology sector was particularly strong during the third quarter, and
several of the Fund's holdings posted double-digit third-quarter returns. This
was all the more remarkable given the sharp correction in these share prices in
July on Y2K fears.
PORTFOLIO POSITIONING
Looking ahead, we believe that the market will be heavily earnings-driven and
the price-earnings ratios generally will remain stable. As such, we have
positioned the portfolio to attempt to take advantage of rapid
earnings-per-share growth and positive earnings surprises.
/s/ MARK B. BARIBEAU Mark B. Baribeau
12
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION(A)
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Loomis Sayles Growth Fund
(Institutional) 30.91 16.62 18.74 14.94
Loomis Sayles Growth Fund (Retail) 30.56 NA NA 15.68
Lipper Growth Funds Index(b) 30.25 21.79 21.36 16.26
S&P 500 Index(c) 27.80 25.09 25.03 18.10
</TABLE>
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO SEPTEMBER 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(THOUSANDS) LIPPER GROWTH LOOMIS SAYLES S & P 500 INDEX
FUND INDEX GROWTH FUND(D)
<S> <C> <C> <C>
5/91 $10,000.00 $10,000.00 $10,000.00
6/91 $9,411.59 $9,287.05 $9,541.87
7/91 $9,993.41 $10,140.71 $9,986.61
8/91 $10,280.54 $10,581.61 $10,223.21
9/91 $10,203.46 $10,750.47 $10,052.13
10/91 $10,371.97 $11,116.32 $10,187.27
11/91 $9,935.96 $10,422.14 $9,776.80
12/91 $11,104.13 $11,692.58 $10,894.92
1/92 $11,087.05 $11,497.87 $10,691.89
2/92 $11,284.30 $11,614.70 $10,830.36
3/92 $10,928.94 $10,787.16 $10,619.72
4/92 $10,912.95 $10,261.43 $10,931.53
5/92 $11,029.52 $10,660.59 $10,985.11
6/92 $10,713.77 $10,290.63 $10,821.68
7/92 $11,066.53 $10,689.79 $11,263.77
8/92 $10,818.76 $10,485.34 $11,033.25
9/92 $10,986.27 $10,641.11 $11,162.89
10/92 $11,181.47 $11,215.52 $11,201.46
11/92 $11,758.34 $11,819.13 $11,582.87
12/92 $11,951.73 $12,130.67 $11,725.03
1/93 $12,122.63 $12,266.97 $11,823.05
2/93 $11,963.77 $12,130.67 $11,984.20
3/93 $12,306.71 $12,451.95 $12,237.05
4/93 $11,973.80 $12,072.26 $11,941.27
5/93 $12,449.25 $12,705.08 $12,260.70
6/93 $12,488.15 $12,782.97 $12,296.61
7/93 $12,472.96 $12,773.23 $12,247.14
8/93 $13,003.80 $13,337.90 $12,711.84
9/93 $13,087.59 $13,493.67 $12,614.34
10/93 $13,304.02 $13,522.88 $12,875.28
11/93 $13,033.92 $12,977.68 $12,752.56
12/93 $13,383.24 $13,259.57 $12,906.75
1/94 $13,846.69 $13,738.22 $13,345.54
2/94 $13,618.97 $13,239.20 $12,983.31
3/94 $12,982.90 $12,740.18 $12,417.28
4/94 $13,086.79 $12,852.20 $12,576.52
5/94 $13,149.81 $12,882.75 $12,782.91
6/94 $12,699.07 $12,251.34 $12,469.57
7/94 $13,058.92 $12,668.88 $12,879.04
8/94 $13,615.48 $13,096.61 $13,407.07
9/94 $13,322.14 $12,770.72 $13,079.22
10/94 $13,575.96 $13,269.74 $13,373.05
11/94 $13,059.14 $12,658.70 $12,886.03
12/94 $13,172.92 $12,775.78 $13,077.17
1/95 $13,221.06 $12,929.09 $13,416.30
2/95 $13,709.77 $13,276.59 $13,939.15
3/95 $14,125.18 $13,634.31 $14,350.46
4/95 $14,525.10 $13,808.06 $14,773.03
5/95 $14,964.55 $14,247.55 $15,363.47
6/95 $15,636.96 $15,177.63 $15,720.32
7/95 $16,392.83 $15,893.07 $16,241.65
8/95 $16,565.62 $16,261.01 $16,282.49
9/95 $17,057.60 $16,669.83 $16,969.65
10/95 $16,831.02 $16,526.74 $16,908.99
11/95 $17,400.71 $16,904.90 $17,651.26
12/95 $17,474.31 $16,724.74 $17,991.25
1/96 $17,896.60 $16,702.83 $18,603.32
2/96 $18,177.52 $17,239.51 $18,776.39
3/96 $18,261.48 $17,261.42 $18,956.82
4/96 $18,719.20 $18,258.11 $19,236.31
5/96 $19,051.21 $18,729.08 $19,732.99
6/96 $18,865.39 $18,761.94 $19,807.68
7/96 $17,845.21 $17,064.27 $18,932.57
8/96 $18,383.93 $17,787.15 $19,331.93
9/96 $19,411.32 $19,002.07 $20,420.62
10/96 $19,690.73 $19,776.73 $20,983.23
11/96 $20,934.91 $20,608.36 $22,569.28
12/96 $20,537.85 $20,046.91 $22,122.08
1/97 $21,608.51 $21,821.90 $23,504.16
2/97 $21,442.43 $20,613.72 $23,688.37
3/97 $20,460.95 $19,390.62 $22,715.05
4/97 $21,361.09 $19,226.55 $24,071.10
5/97 $22,839.06 $21,120.86 $25,536.64
6/97 $23,692.96 $21,806.99 $26,682.54
7/97 $25,656.87 $24,014.55 $28,804.25
8/97 $24,708.91 $23,474.38 $27,190.32
9/97 $26,121.33 $25,557.90 $28,679.12
10/97 $25,277.78 $25,295.53 $27,721.31
11/97 $25,858.56 $24,523.85 $29,004.61
12/97 $26,295.37 $24,959.98 $29,502.73
1/98 $26,472.44 $23,932.33 $29,829.06
2/98 $28,338.44 $25,671.43 $31,980.48
3/98 $29,550.47 $26,560.74 $33,618.46
4/98 $29,866.85 $27,331.48 $33,956.38
5/98 $29,130.94 $26,224.78 $33,372.74
6/98 $30,389.82 $27,410.53 $34,728.61
7/98 $30,067.26 $25,928.35 $34,358.50
8/98 $25,239.71 $20,730.82 $29,398.71
9/98 $26,922.09 $23,023.27 $31,273.85
10/98 $28,785.98 $24,604.27 $33,818.33
11/98 $30,501.02 $24,762.37 $35,869.49
12/98 $33,050.64 $28,170.89 $37,934.19
1/99 $34,460.60 $29,034.37 $39,520.45
2/99 $33,284.12 $27,847.09 $38,292.20
3/99 $34,727.58 $30,356.57 $39,825.46
4/99 $35,609.66 $30,761.32 $41,366.71
5/99 $34,915.27 $29,897.85 $40,390.45
6/99 $36,978.76 $32,029.55 $42,636.16
7/99 $36,065.39 $30,626.40 $41,301.65
8/99 $35,657.85 $30,842.27 $41,099.27
9/99 $35,062.36 $30,140.70 $39,973.15
</TABLE>
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a):Inception date of the Institutional Class of shares is May 16, 1991. Since
Lipper and S&P 500 Index performance data is not available coincident with
this date, comparative performance is presented from May 31, 1991.
Inception date of the Retail Class of shares is December 31, 1996.
(b):The Lipper Growth Funds Index is an equally weighted index of typically the
30 largest mutual funds within the growth funds investment objective.
Returns are adjusted for the reinvestment of capital gains distributions
and income dividends.
(c):S&P 500 Index is a capitalization-weighted, total return index comprised of
500 widely held common stocks, representing industrial, utility,
transportation, and financial companies traded on the New York Stock
Exchange, the American Stock Exchange and in the Over-the-Counter market.
The index returns have not been reduced for ongoing management and
operating expenses applicable to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
13
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
- -------------------------------------------------------
[PHOTO] ESWAR MENON
[PHOTO] JOHN TRIBOLET
[PHOTO] ALEXANDER MUROMCEW
KEY FUND FACTS
OBJECTIVE: High total investment return
STRATEGY: Invests primarily in stocks of companies organized or head-quartered
outside of the United States
FUND INCEPTION DATE: 5/10/91
COMMENCEMENT OF OPERATIONS OF CLASS: Institutional - 5/10/91,
Retail - 1/2/97
EXPENSE RATIO: Institutional - 1.00%, Retail - 1.25%
TOTAL NET ASSETS (ALL CLASSES): $79.7 MM
PERFORMANCE
For the 12-month period ended September 30, 1999, the Institutional and Retail
classes of the International Equity Fund returned 31.96% and 31.56%,
respectively. The Fund's benchmark, the Morgan Stanley Capital International
EAFE Index, a broad market index representing 21 international markets in
Europe, Australia and the Far East, returned 30.95% for the fiscal year. The
average international fund, as measured by Lipper Analytical Services, posted a
total return of 29.80% for the same period.
PORTFOLIO REVIEW
The first half of the fiscal year proved to be a difficult period for value
investors in overseas markets. As was the case in the U.S., a relatively few
large-cap foreign growth stocks drove up the indexes. In addition, negative
returns within several European markets and weakness in the euro contributed to
the difficulty. However, that sentiment started to change in the second calendar
quarter of 1999, and the Fund benefited from the global shift to value stocks.
By the final quarter of the fiscal year, concerns over interest rates, negative
earnings reports and valuation led the U.S. market much lower. For the first
time in many quarters, international stocks (EAFE) outperformed U.S. stocks
(S&P 500 Index). Money flows began to shift toward foreign markets, as investors
realized better growth opportunities at better prices overseas. Benefiting from
this were the developed Asian markets, especially Japan and Hong Kong.
In early March we had significantly increased the Fund's weighting to Japan from
8% to 20%. This proved to be an important shift, as soon thereafter a strong
rally boosted the Japanese market. At the same time, we also started slowly
adding to the Fund's positions in the rest of Asia and moving out of European
investments. By the end of the fiscal year, the Fund's Japanese/Far East
weighting was 44%. Driving the Fund's performance were good stock selection, an
overweight in Asian countries and an underweight in European countries.
PORTFOLIO POSITIONING
Japan is the single-largest country in the developed market index and,
therefore, has a large impact on returns. The economic troubles of the country
have been well documented, but recent results suggest that Japan is finally
turning the corner and is growing its way out of recession. We believe the Fund
is well positioned to benefit from this trend.
/s/ ESWAR MENON Eswar Menon
/s/ JOHN TRIBOLET John Tribolet
/s/ ALEXANDER MUROMCEW Alexander Muromcew
14
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION(A)
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Loomis Sayles International Equity
Fund (Institutional) 31.96 10.32 9.41 9.48
Loomis Sayles International Equity
Fund (Retail) 31.56 NA NA 7.89
Lipper International Funds Index(b) 27.64 12.00 9.98 10.36
MSCI-EAFE Index(c) 30.95 10.43 9.12 8.72
</TABLE>
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO SEPTEMBER 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(THOUSANDS) LIPPER INTERNATIONAL LOOMIS SAYLES MSCI-EAFE INDEX
EQUITY FUND INDEX INTERNATIONAL EQUITY FUND(D)
<S> <C> <C> <C>
5/91 $10,000.00 $10,000.00 $10,000.00
6/91 $9,479.44 $9,460.00 $9,265.00
7/91 $9,898.18 $9,960.00 $9,719.91
8/91 $9,806.60 $9,980.00 $9,522.60
9/91 $10,088.87 $10,360.00 $10,059.67
10/91 $10,130.44 $10,280.00 $10,202.52
11/91 $9,768.04 $9,980.00 $9,726.06
12/91 $10,226.24 $10,366.41 $10,228.90
1/92 $10,337.10 $10,649.04 $10,011.02
2/92 $10,353.37 $10,992.23 $9,652.63
3/92 $10,018.08 $10,830.73 $9,015.56
4/92 $10,281.67 $10,961.95 $9,057.93
5/92 $10,797.11 $11,416.17 $9,663.90
6/92 $10,468.75 $11,214.29 $9,205.83
7/92 $10,078.33 $10,965.90 $8,970.17
8/92 $10,126.23 $10,773.87 $9,532.59
9/92 $9,911.14 $10,531.31 $9,344.80
10/92 $9,617.42 $9,712.66 $8,854.20
11/92 $9,668.63 $9,712.66 $8,937.43
12/92 $9,788.23 $9,838.90 $8,983.90
1/93 $9,824.38 $10,094.06 $8,983.01
2/93 $10,044.59 $10,359.42 $9,254.29
3/93 $10,627.21 $10,767.67 $10,061.27
4/93 $11,177.90 $11,073.86 $11,016.08
5/93 $11,436.07 $11,420.87 $11,248.52
6/93 $11,211.04 $10,992.20 $11,073.04
7/93 $11,565.91 $11,175.91 $11,460.60
8/93 $12,331.99 $12,237.37 $12,079.47
9/93 $12,285.90 $12,135.31 $11,807.68
10/93 $12,893.22 $12,931.40 $12,171.36
11/93 $12,382.00 $12,676.24 $11,107.58
12/93 $13,623.45 $13,630.89 $11,909.55
1/94 $14,472.07 $14,539.62 $12,915.91
2/94 $14,123.52 $14,169.79 $12,879.74
3/94 $13,477.34 $13,641.46 $12,324.63
4/94 $13,834.02 $13,778.83 $12,847.19
5/94 $13,813.23 $13,567.50 $12,773.96
6/94 $13,595.43 $13,419.57 $12,954.08
7/94 $14,014.47 $13,789.40 $13,078.43
8/94 $14,498.88 $13,852.80 $13,388.39
9/94 $14,124.73 $13,641.47 $12,966.66
10/94 $14,376.88 $13,683.74 $13,398.45
11/94 $13,706.00 $13,282.21 $12,753.98
12/94 $13,523.14 $13,391.05 $12,834.33
1/95 $12,852.25 $13,137.30 $12,341.50
2/95 $12,848.94 $13,506.39 $12,305.71
3/95 $13,186.94 $13,679.40 $13,073.58
4/95 $13,671.65 $14,336.84 $13,565.15
5/95 $13,806.31 $14,798.20 $13,403.72
6/95 $13,858.73 $14,763.60 $13,169.16
7/95 $14,620.59 $15,155.76 $13,989.60
8/95 $14,373.56 $14,486.78 $13,456.59
9/95 $14,613.96 $14,775.13 $13,719.00
10/95 $14,309.70 $14,475.24 $13,349.95
11/95 $14,459.12 $14,348.37 $13,721.08
12/95 $14,878.46 $14,559.65 $14,274.04
1/96 $15,230.02 $15,047.05 $14,332.57
2/96 $15,295.39 $15,197.02 $14,381.30
3/96 $15,534.34 $15,222.02 $14,686.18
4/96 $16,040.43 $15,646.94 $15,113.55
5/96 $16,022.46 $15,584.45 $14,835.46
6/96 $16,168.44 $15,721.92 $14,918.54
7/96 $15,623.09 $15,346.99 $14,482.92
8/96 $15,826.84 $15,634.43 $14,514.78
9/96 $16,180.66 $15,930.78 $14,900.87
10/96 $16,116.40 $16,193.38 $14,748.88
11/96 $16,874.50 $16,893.63 $15,335.89
12/96 $17,025.16 $17,224.59 $15,138.06
1/97 $17,047.12 $17,329.30 $14,608.22
2/97 $17,354.85 $17,211.50 $14,847.80
3/97 $17,446.79 $17,276.94 $14,901.25
4/97 $17,522.74 $17,250.76 $14,980.23
5/97 $18,510.76 $18,088.43 $15,955.44
6/97 $19,399.70 $18,873.75 $16,834.59
7/97 $20,022.55 $19,484.95 $17,107.31
8/97 $18,578.93 $17,787.15 $15,829.39
9/97 $19,771.29 $18,980.92 $16,715.84
10/97 $18,270.51 $17,349.44 $15,430.39
11/97 $18,117.20 $16,978.05 $15,273.00
12/97 $18,259.11 $17,055.35 $15,405.87
1/98 $18,700.74 $17,734.55 $16,109.92
2/98 $19,887.91 $18,851.45 $17,144.18
3/98 $20,967.97 $19,787.23 $17,672.22
4/98 $21,290.23 $19,832.51 $17,811.83
5/98 $21,332.55 $19,304.25 $17,724.55
6/98 $21,146.02 $18,564.68 $17,859.26
7/98 $21,470.43 $18,851.45 $18,039.64
8/98 $18,381.88 $16,693.12 $15,804.53
9/98 $17,809.73 $16,210.14 $15,319.33
10/98 $19,119.29 $17,296.85 $16,915.60
11/98 $20,076.97 $18,142.07 $17,781.68
12/98 $20,571.02 $18,644.75 $18,482.28
1/99 $20,695.82 $18,629.24 $18,426.83
2/99 $20,163.43 $17,760.60 $17,988.27
3/99 $20,834.54 $18,039.81 $18,738.38
4/99 $21,805.43 $18,784.36 $19,497.29
5/99 $20,994.27 $18,194.93 $18,493.18
6/99 $21,989.40 $19,156.63 $19,214.41
7/99 $22,479.76 $20,040.79 $19,785.08
8/99 $22,657.35 $20,475.11 $19,858.28
9/99 $22,729.85 $21,390.28 $20,058.85
</TABLE>
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a):Inception date of the Institutional Class of shares is May 10, 1991. Since
Lipper and MSCI-EAFE Index performance data is not available coincident
with this date, comparative performance is presented from May 31, 1991.
Inception date of the Retail Class of shares is December 31, 1996.
(b):The Lipper International Funds Index is an equally weighted index of
typically the 30 largest mutual funds within the international funds
investment objective. Returns are adjusted for the reinvestment of capital
gains distributions and income dividends.
(c):MSCI-EAFE Index is a capitalization-weighted average of the performance of
over 1,000 securities listed on the stock exchanges of 20 countries in
Europe, Australia and the Far East. The index returns have not been reduced
for ongoing management and operating expenses applicable to mutual fund
investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
15
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND
- -------------------------------------------------------
[PHOTO] JEFFREY C. PETHERICK
[PHOTO] DAWN ALSTON PAIGE
[PHOTO] MARY C. CHAMPAGNE
KEY FUND FACTS
OBJECTIVE: Long-term growth of capital
STRATEGY: Invests primarily in stocks with market capitalization falling within
the capitalization range of the Standard & Poor's Mid-Cap 400 Index, which are
believed to be undervalued by the market.
Effective October 6, 1999, Jeffrey C. Petherick, Dawn Alston Paige and
Mary C. Champagne serve as the portfolio managers for the Loomis Sayles Mid-Cap
Value Fund. Mr. Petherick and Ms. Champagne replaced Dean A. Gulis and Peter B.
Ramsden.
FUND INCEPTION DATE: 12/31/96
COMMENCEMENT OF OPERATIONS OF CLASS: Institutional - 1/2/97, Retail - 1/2/97
EXPENSE RATIO: Institutional - 1.00%, Retail - 1.25%
TOTAL NET ASSETS (ALL CLASSES): $5.3 MM
PERFORMANCE
For the 12-month period ended September 30, 1999, the Institutional and Retail
classes of the Mid-Cap Value Fund returned 12.86% and 12.51%, respectively,
compared to the 25.50% return for the Fund's benchmark, the Standard & Poor's
Mid-Cap 400 Index. The average mid-cap fund, as measured by Lipper Analytical
Services, posted a total return of 32.86% for the same period.
PORTFOLIO REVIEW
During the fiscal year from October 1, 1998, through September 30, 1999, large-
capitalization, growth-oriented securities generally remained the favored stock
investments. Except for a short-lived rally among traditional value sectors and
smaller cap issues in the second calendar quarter of 1999, stocks with the
largest market capitalization, lowest yields, highest betas and highest
price-to-earnings ratios offered the best performance for the 12-month period.
The Fund remained broadly diversified across all market sectors. Halfway through
the fiscal year we modestly increased the Fund's exposure to the
strong-performing telecommunications services and technology sectors, two areas
where we found particularly attractive value opportunities. We also reduced
exposure to the consumer cyclical and utility sectors to take advantage of more
appealing opportunities elsewhere.
The Fund maintained an underweight in Internet stocks, which detracted from
performance, relative to the mid-cap universe. In general, those stocks do not
meet our valuation parameters.
PORTFOLIO POSITIONING
In our stock selection process, we continue to focus on key value attributes,
such as low price-to-earnings, low price-to-cash flow and solid and achievable
earnings expectations, while maintaining broad sector diversification. In
addition, we pay close attention to identifying the necessary catalysts for
individual issues to deliver superior price performance.
<TABLE>
<S> <C> <C>
[LOGO] [LOGO] [LOGO]
Jeffrey C. Petherick Dawn Alston Paige Mary C. Champagne
</TABLE>
16
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION(A)
<S> <C> <C>
- --------------------------------------------------------------
Loomis Sayles Mid-Cap Value Fund
(Institutional) 12.86 8.38
Loomis Sayles Mid-Cap Value Fund
(Retail) 12.51 8.08
Lipper Mid-Cap Funds Index(b) 33.44 14.27
S&P Mid-Cap 400 Index(c) 25.50 17.06
</TABLE>
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO SEPTEMBER 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(THOUSANDS) LIPPER MID-CAP LOOMIS SAYLES S&P MID-CAP
FUND INDEX MID-CAP VALUE FUND(D) 400 INDEX
<S> <C> <C> <C>
12/96 $10,000.00 $10,000.00 $10,000.00
1/97 $10,318.55 $10,370.00 $10,375.41
2/97 $9,927.21 $10,380.00 $10,290.09
3/97 $9,330.17 $10,100.00 $9,851.38
4/97 $9,502.54 $10,120.00 $10,106.86
5/97 $10,455.54 $10,950.00 $10,990.60
6/97 $10,807.55 $11,370.00 $11,299.37
7/97 $11,662.51 $12,100.00 $12,418.10
8/97 $11,589.50 $12,050.00 $12,403.02
9/97 $12,330.65 $12,710.00 $13,115.94
10/97 $11,687.33 $12,530.00 $12,545.23
11/97 $11,654.19 $12,570.00 $12,731.17
12/97 $11,746.44 $12,632.07 $13,225.27
1/98 $11,584.46 $12,402.00 $12,973.53
2/98 $12,646.00 $13,519.49 $14,048.37
3/98 $13,232.99 $14,034.41 $14,682.00
4/98 $13,352.88 $14,231.61 $14,949.97
5/98 $12,681.95 $13,530.44 $14,277.43
6/98 $13,179.79 $13,650.95 $14,367.48
7/98 $12,569.93 $12,916.91 $13,810.17
8/98 $10,030.60 $10,670.97 $11,239.50
9/98 $10,814.44 $11,054.42 $12,288.69
10/98 $11,346.86 $11,339.27 $13,386.87
11/98 $12,083.39 $12,259.56 $14,054.94
12/98 $13,381.44 $12,998.73 $15,753.10
1/99 $13,741.32 $12,646.80 $15,139.84
2/99 $12,886.73 $11,852.12 $14,347.07
3/99 $13,486.37 $12,033.76 $14,748.32
4/99 $14,066.28 $13,203.08 $15,910.49
5/99 $14,088.79 $13,441.48 $15,980.49
6/99 $14,972.16 $13,759.35 $16,833.85
7/99 $14,693.67 $13,668.53 $16,476.97
8/99 $14,496.78 $13,032.79 $15,913.46
9/99 $14,430.09 $12,476.51 $15,421.74
</TABLE>
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a):Inception date of the Institutional and Retail Classes of shares is
December 31, 1996.
(b):The Lipper Mid-Cap Funds Index is an equally weighted index of typically
the 30 largest mutual funds within the mid-cap funds investment objective.
Returns are adjusted for the reinvestment of capital gains distributions
and income dividends.
(c):S&P Mid-Cap 400 Index consists of 400 domestic stocks chosen for market
size, liquidity and industry group representation. It is a market-weighted
index (stock price times shares outstanding) with each stock affecting the
index in proportion to its value. The index is comprised of industrials,
utilities, financials and transportation, in size order. The index returns
have not been lowered for ongoing management and operating expenses
applicable to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
17
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND
- -------------------------------------------------------
[PHOTO] CHRISTOPHER R. ELY
[PHOTO] PHILIP C. FINE
[PHOTO] DAVID L. SMITH
KEY FUND FACTS
OBJECTIVE: Long-term growth of capital
STRATEGY: Invests in stocks of small, rapidly-growing companies, with the
potential for accelerating earnings growth and rising profit margins
FUND INCEPTION DATE: 12/31/96
COMMENCEMENT OF OPERATIONS OF CLASS: Institutional - 1/2/97, Retail - 1/2/97
EXPENSE RATIO: Institutional - 1.00%, Retail - 1.25%
TOTAL NET ASSETS (ALL CLASSES): $87.2 MM
PERFORMANCE
For the 12-month period ended September 30, 1999, the Institutional and Retail
classes of the Small Cap Growth Fund returned 70.30% and 69.90%, respectively,
compared to the 19.07% return for the Fund's benchmark, the Russell 2000 Index.
The average small cap fund, as measured by Lipper Analytical Services, posted a
total return of 26.86% for the same period.
PORTFOLIO REVIEW
The Fund's fiscal year began on a strong note. A stock market rally in the
fourth calendar quarter of 1998 demonstrated that the foundations of the
record-setting bull market were intact. For the most part, the U.S. continued to
exhibit economic strength, inflation remained in check and interest rates
remained at reasonable levels.
But, perhaps the most significant event for small-cap investors during the
12-month period ended September 30, 1999, was the rebound among small- and
mid-cap stocks. After several quarters of lagging the larger Standard & Poor's
500 Index, smaller-cap indexes such as the Russell 2000 Index and the Standard &
Poor's 600 Index both handily beat their large-cap counterpart during the second
calendar quarter of 1999. Nevertheless, this rally cooled during the third
calendar quarter, as concerns about further interest rate hikes, signs of a
strong economy, rising gold and energy prices and a weakening dollar increased
market volatility.
Throughout the fiscal year, the Fund maintained a significant technology
weighting, with broad exposure to electronics firms, telecommunications
companies, semiconductor suppliers and software manufacturers. These stocks
continued to drive overall Fund performance throughout the 12-month period. The
Fund also benefited from certain retail holdings, which performed well due to
low unemployment and a strong economy. Certain health care holdings also posted
strong performance throughout the year, boosting the Fund's return.
PORTFOLIO POSITIONING
We continue to believe that small cap growth stocks offer good long-term
opportunities for investors who understand the risks. Continued signs of a
strong economy also should be signs of continued strong earnings growth. In
addition, we see no end to the cycle of innovation and growth from the
technology sector, which has become an important component to U.S. economic
growth.
<TABLE>
<S> <C> <C>
[LOGO] [LOGO] [LOGO]
Christopher R. Ely Philip C. Fine David L. Smith
</TABLE>
18
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION(A)
<S> <C> <C>
- --------------------------------------------------------------
Loomis Sayles Small Cap Growth Fund
(Institutional) 70.30 22.98
Loomis Sayles Small Cap Growth Fund
(Retail) 69.90 22.72
Lipper Small Cap Funds Index(b) 26.79 7.50
Russell 2000 Index(c) 19.07 7.52
</TABLE>
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO SEPTEMBER 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(THOUSANDS) LIPPER SMALL CAP LOOMIS SAYLES SMALL RUSSELL 2000 IX TR
FUND INDEX CAP GROWTH FUND(D)
<S> <C> <C> <C>
12/31/96 $10,000.00 $10,000.00 $10,000.00
1/31/97 $10,228.08 $10,260.00 $10,199.80
2/28/97 $9,642.16 $9,500.00 $9,952.49
3/31/97 $9,058.25 $8,510.00 $9,482.87
4/30/97 $8,982.65 $8,350.00 $9,509.42
5/31/97 $10,107.06 $9,710.00 $10,567.34
6/30/97 $10,598.36 $10,280.00 $11,020.21
7/31/97 $11,210.01 $11,110.00 $11,533.00
8/31/97 $11,338.33 $11,300.00 $11,796.89
9/30/97 $12,214.35 $12,550.00 $12,660.35
10/31/97 $11,598.95 $11,670.00 $12,104.20
11/30/97 $11,384.81 $11,540.00 $12,025.91
12/31/97 $11,501.78 $11,942.60 $12,236.40
1/31/98 $11,280.39 $11,552.25 $12,043.06
2/28/98 $12,190.23 $12,807.70 $12,933.56
3/31/98 $12,734.55 $13,387.95 $13,466.98
4/30/98 $12,787.78 $13,208.60 $13,541.49
5/31/98 $12,083.03 $12,100.85 $12,812.19
6/30/98 $12,243.14 $13,282.45 $12,839.14
7/31/98 $11,389.60 $11,974.25 $11,799.76
8/31/98 $9,129.38 $9,273.45 $9,508.48
9/30/98 $9,623.70 $10,370.65 $10,252.59
10/31/98 $10,016.49 $10,782.10 $10,670.70
11/30/98 $10,601.25 $12,132.50 $11,229.76
12/31/98 $11,403.47 $14,179.20 $11,924.68
1/31/99 $11,500.70 $14,590.65 $12,083.15
2/28/99 $10,582.44 $13,672.80 $11,104.48
3/31/99 $10,864.91 $14,717.25 $11,277.84
4/30/99 $11,493.99 $14,854.40 $12,288.33
5/31/99 $11,661.80 $14,580.10 $12,467.74
6/30/99 $12,478.13 $16,763.95 $13,031.29
7/31/99 $12,358.34 $16,268.10 $12,674.23
8/31/99 $12,109.93 $16,742.85 $12,205.28
9/30/99 $12,200.76 $17,660.70 $12,207.72
</TABLE>
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a):Inception date of the Institutional and Retail Classes of shares is
December 31, 1996.
(b):The Lipper Small Cap Funds Index is an equally weighted index of typically
the 30 largest mutual funds within the small cap funds investment
objective. Returns are adjusted for the reinvestment of capital gains
distributions and income dividends.
(c):Russell 2000 Index is comprised of the 2,000 smallest companies in the
Russell 3000 Index (a broad market index), representing approximately 8% of
the Russell 3000 Index total market capitalization. The index returns have
not been reduced for ongoing management and operating expenses applicable
to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
19
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND
- -------------------------------------------------------
[PHOTO] MARY C. CHAMPAGNE
[PHOTO] JEFFREY C. PETHERICK
KEY FUND FACTS
OBJECTIVE: Long-term growth of capital
STRATEGY: Invests primarily in stocks with market capitalization falling within
the capitalization range of the Russell 2000 Index, which are considered
undervalued by the market.
FUND INCEPTION DATE: 5/13/91
COMMENCEMENT OF OPERATIONS OF CLASS: Institutional - 5/13/91, Retail - 1/2/97,
Admin - 1/2/98
EXPENSE RATIO: Institutional - 0.90%, Retail - 1.20%, Admin - 1.50%
TOTAL NET ASSETS (ALL CLASSES): $381.7 MM
PERFORMANCE
For the 12-month period ended September 30, 1999, the Institutional, Retail and
Admin classes of the Small Cap Value Fund returned 12.80%, 12.39%, and 12.03%
respectively, compared to the 19.07% return for the Fund's benchmark, the
Russell 2000 Index. The average small cap fund, as measured by Lipper Analytical
Services, posted a total return of 26.86% for the same period.
PORTFOLIO REVIEW
The fiscal year ended September 30, 1999, proved to be a difficult period for
small-cap, value-based investors. While value-oriented stocks did bounce back in
the second calendar quarter of 1999, the rally mainly was in the deep cyclical
area, where the Fund has little exposure. While we occasionally purchase this
type of stock, we prefer to focus on companies that we believe have strong
growth prospects over the long-term, but that are trading at prices that do not
reflect this type of outlook.
Overall, the Fund enjoyed its best performance from technology and energy
stocks. Generally, the Fund's stocks did better than their respective sector
groups. The Fund's performance was hindered somewhat by the portfolio's lack of
Internet stocks. While we recognize some dramatic fundamental changes in the
economy due to the Internet, we have limited opportunities to capitalize on this
trend at this point. That is because most Internet stocks are highly aggressive
and speculative, lacking the value characteristics we demand. We actively seek
other ways to play the Internet trend, but at this point it is difficult to find
suitable investments.
PORTFOLIO POSITIONING
In this difficult environment for value investors, we have not changed our
investment strategy but have instead maintained our discipline of focusing on
key value attributes such as low price-to-earnings and price-to-cash flows while
rigorously identifying the catalysts required for superior share-price
performance. In this regard, we note that while the Fund's performance has been
hurt by sector factors, our stock selection has delivered a positive
contribution.
/s/ MARY C. CHAMPAGNE Mary C. Champagne
/s/ JEFFREY C. PETHERICK Jeffrey C. Petherick
20
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS 5 YEARS INCEPTION(A)
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Loomis Sayles Small Cap Value Fund
(Institutional) 12.80 9.35 14.70 15.97
Loomis Sayles Small Cap Value Fund
(Retail) 12.39 NA NA 6.23
Loomis Sayles Small Cap Value Fund
(Admin) 12.03 NA NA -3.79
Lipper Small Cap Funds Index(b) 26.79 6.52 12.90 12.89
Russell 2000 Index(c) 19.07 8.70 12.39 12.76
</TABLE>
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO SEPTEMBER 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(THOUSANDS) LIPPER SMALL CAP LOOMIS SAYLES SMALL RUSSELL 2000
FUND INDEX CAP VALUE FUND (D) INDEX
<S> <C> <C> <C>
5/31/91 $10,000.00 $10,000.00 $10,000.00
6/30/91 $9,510.39 $9,647.75 $9,417.24
7/31/91 $10,029.59 $10,410.96 $9,747.70
8/31/91 $10,437.64 $11,203.52 $10,108.51
9/30/91 $10,475.61 $11,213.30 $10,187.66
10/31/91 $10,793.73 $11,438.35 $10,457.11
11/30/91 $10,368.64 $11,154.59 $9,973.45
12/31/91 $11,557.40 $12,766.80 $10,772.07
1/31/92 $12,001.19 $14,064.95 $11,644.90
2/29/92 $12,181.84 $14,852.01 $11,984.60
3/31/92 $11,684.02 $14,054.72 $11,578.94
4/30/92 $11,159.88 $13,339.21 $11,173.28
5/31/92 $11,171.50 $13,359.65 $11,321.86
6/30/92 $10,703.18 $12,194.39 $10,786.42
7/31/92 $11,047.22 $12,531.70 $11,161.74
8/31/92 $10,819.75 $12,122.84 $10,846.78
9/30/92 $11,059.58 $12,255.72 $11,096.94
10/31/92 $11,512.96 $12,644.14 $11,449.67
11/30/92 $12,418.51 $13,850.29 $12,325.80
12/31/92 $12,849.90 $14,441.20 $12,755.21
1/31/93 $13,112.56 $15,102.71 $13,186.92
2/28/93 $12,605.46 $14,755.13 $12,882.35
3/31/93 $12,992.05 $15,371.80 $13,300.38
4/30/93 $12,574.01 $14,979.38 $12,935.29
5/31/93 $13,302.27 $15,618.47 $13,507.67
6/30/93 $13,395.92 $15,696.95 $13,591.94
7/31/93 $13,467.33 $16,078.16 $13,779.60
8/31/93 $14,136.96 $16,941.49 $14,374.90
9/30/93 $14,630.75 $17,715.13 $14,780.56
10/31/93 $14,925.50 $18,107.55 $15,160.99
11/30/93 $14,377.34 $17,502.10 $14,661.99
12/31/93 $15,024.92 $18,005.15 $15,163.29
1/31/94 $15,418.14 $18,387.42 $15,638.70
2/28/94 $15,353.99 $18,107.09 $15,582.14
3/31/94 $14,481.55 $17,062.21 $14,759.44
4/30/94 $14,558.11 $16,871.07 $14,847.17
5/31/94 $14,266.96 $16,616.22 $14,680.45
6/30/94 $13,697.58 $16,221.20 $14,181.95
7/31/94 $13,979.31 $16,310.40 $14,414.96
8/31/94 $14,906.76 $17,074.95 $15,218.20
9/30/94 $14,973.48 $17,062.21 $15,167.25
10/31/94 $15,223.66 $16,947.53 $15,107.39
11/30/94 $14,621.36 $16,272.18 $14,497.25
12/31/94 $14,952.42 $16,509.50 $14,886.75
1/31/95 $14,774.58 $16,560.89 $14,698.93
2/28/95 $15,381.30 $17,203.28 $15,310.39
3/31/95 $15,791.80 $17,614.41 $15,574.07
4/30/95 $16,012.07 $17,665.80 $15,920.37
5/31/95 $16,262.63 $18,025.54 $16,194.11
6/30/95 $17,255.01 $18,513.76 $17,034.19
7/31/95 $18,554.38 $19,747.15 $18,015.39
8/31/95 $18,880.32 $20,697.89 $18,388.07
9/30/95 $19,412.08 $21,083.33 $18,716.45
10/31/95 $18,811.86 $19,991.26 $17,879.40
11/30/95 $19,460.44 $20,954.85 $18,630.58
12/31/95 $19,680.34 $21,821.76 $19,122.14
1/31/96 $19,587.77 $21,850.23 $19,101.58
2/29/96 $20,375.58 $22,946.30 $19,696.98
3/31/96 $20,790.61 $23,472.98 $20,097.91
4/30/96 $22,450.00 $24,867.98 $21,172.56
5/31/96 $23,382.57 $25,892.88 $22,006.98
6/30/96 $22,441.20 $25,280.79 $21,103.31
7/31/96 $20,262.52 $23,857.32 $19,260.14
8/31/96 $21,491.00 $25,053.03 $20,378.38
9/30/96 $22,723.98 $25,898.67 $21,174.78
10/31/96 $22,027.93 $26,278.46 $20,848.47
11/30/96 $22,427.28 $27,534.68 $21,707.51
12/31/96 $22,507.54 $28,444.66 $22,276.46
1/31/97 $23,020.89 $28,951.72 $22,721.55
2/28/97 $21,702.13 $28,575.51 $22,170.63
3/31/97 $20,387.88 $27,953.95 $21,124.49
4/30/97 $20,217.71 $27,692.24 $21,183.64
5/31/97 $22,748.48 $30,701.91 $23,540.31
6/30/97 $23,854.27 $32,141.32 $24,549.13
7/31/97 $25,230.93 $33,982.22 $25,691.44
8/31/97 $25,519.74 $34,693.28 $26,279.30
9/30/97 $27,491.45 $36,760.32 $28,202.77
10/31/97 $26,106.34 $35,602.78 $26,963.86
11/30/97 $25,624.36 $35,470.49 $26,789.46
12/31/97 $25,887.63 $35,837.33 $27,258.36
1/31/98 $25,389.34 $35,048.22 $26,827.67
2/28/98 $27,437.15 $37,531.04 $28,811.39
3/31/98 $28,662.28 $39,205.50 $29,999.65
4/30/98 $28,782.08 $39,032.28 $30,165.64
5/31/98 $27,195.86 $37,357.82 $28,541.01
6/30/98 $27,556.22 $36,876.65 $28,601.05
7/31/98 $25,635.11 $34,490.06 $26,285.68
8/31/98 $20,547.93 $28,581.33 $21,181.53
9/30/98 $21,660.53 $30,024.83 $22,839.15
10/31/98 $22,544.61 $31,603.06 $23,770.54
11/30/98 $23,860.75 $33,393.00 $25,015.93
12/31/98 $25,666.34 $35,450.46 $26,563.96
1/31/99 $25,885.17 $33,789.33 $26,916.97
2/28/99 $23,818.41 $31,405.12 $24,736.83
3/31/99 $24,454.17 $31,424.66 $25,123.02
4/30/99 $25,870.07 $33,984.75 $27,374.04
5/31/99 $26,247.77 $34,668.75 $27,773.70
6/30/99 $28,085.11 $36,271.25 $29,029.08
7/31/99 $27,815.50 $35,821.77 $28,233.68
8/31/99 $27,256.40 $34,629.66 $27,189.03
9/30/99 $27,460.83 $33,867.50 $27,194.47
</TABLE>
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a):Inception date of the Institutional Class of shares is May 13, 1991. Since
Lipper and Russell 2000 Index performance data is not available coincident
with this date, comparative performance is presented from May 31, 1991.
Inception dates of the Retail and Admin Classes of shares are December 31,
1996 and January 2, 1998, respectively.
(b):The Lipper Small Cap Funds Index is an equally weighted index of typically
the 30 largest mutual funds within the small cap funds investment
objective. Returns are adjusted for the reinvestment of capital gains
distributions and income dividends.
(c):Russell 2000 Index is comprised of the 2,000 smallest companies in the
Russell 3000 Index (a broad market index), respresenting approximately 8%
of the Russell 3000 total market capitalization. The index returns have not
been reduced for ongoing management and operating expenses applicable to
mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail and Admin Classes of shares would be lower, due to
the higher fees paid by the Retail and Admin Classes of shares.
21
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND
- -------------------------------------------------------
[PHOTO] DANIEL J. FUSS
[PHOTO] E. JOHN DEBEER
[PHOTO] QUENTIN P. FAULKNER
[PHOTO] ESWAR MENON
[PHOTO] JOHN TRIBOLET
[PHOTO] ALEXANDER MUROMCEW
KEY FUND FACTS
OBJECTIVE: High total investment return
STRATEGY: Invests in U.S. and foreign equity and debt securities
FUND INCEPTION DATE: 5/1/96
COMMENCEMENT OF OPERATIONS OF CLASS:
Institutional - 5/1/96,
Retail - 1/2/97
EXPENSE RATIO:
Institutional - 1.00%,
Retail - 1.25%
TOTAL NET ASSETS (ALL CLASSES):
$6.4 MM
PERFORMANCE
For the 12-month period ended September 30, 1999, the Institutional and Retail
classes of the Worldwide Fund returned 27.82% and 27.59%, respectively, compared
to the -1.62% return for the Lehman Brothers Government/Corporate Bond Index and
the 27.80% return for the Standard & Poor's 500 Index. The average global
flexible fund, as measured by Lipper Analytical Services, posted a total return
of 18.55% for the same period.
PORTFOLIO REVIEW
Overall, the Fund's strong fiscal-year return was aided by solid performance in
U.S. stocks and U.S. bonds. The Fund's foreign equities offered satisfactory
performance throughout the year. Each of the Fund's main portfolio components
outperformed its respective index during the year. The Fund's U.S. equity
holdings outperformed the S&P 500 Index; its foreign equities outpaced the EAFE
Index; and its U.S. bond holdings surpassed the Lehman Brothers
Government/Corporate Bond Index.
The big story was in foreign bonds. The Fund's foreign bond component offered a
return of 51.44% for the 12-month period ended September 30, 1999, compared to
0.48% for the Salomon World Global Bond Index. The extremely good results from
foreign bonds were due largely to selective purchases we made in the fall of
1998, when the hedge fund debacle generated attractive opportunities in Asian
emerging markets.
PORTFOLIO POSITIONING
Clearly, the major imponderable for investors is whether the pattern of recent
years--the U.S. booming while the rest of the world remains weak--will continue
or whether a sustained recovery is underway outside the U.S. We believe that the
economies of Europe and Asia are in the early stages of growth, and we continue
to invest a significant portion of the portfolio outside the U.S. We see nothing
wrong with the U.S., but it is likely that corporate earnings can grow faster
and easier outside the U.S. and that credits can improve more quickly. We also
believe that the euro is substantially undervalued.
/s/ DANIEL J. FUSS Daniel J. Fuss
/s/ E. JOHN DEBEER E. John deBeer
/s/ QUENTIN P. FAULKNER Quentin P. Faulkner
/s/ ESWAR MENON Eswar Menon
/s/ JOHN TRIBOLET John Tribolet
/s/ ALEXANDER MUROMCEW Alexander Muromcew
22
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SINCE
1 YEAR 3 YEARS INCEPTION(A)
<S> <C> <C> <C>
- -----------------------------------------------------------------------
Loomis Sayles Worldwide Fund
(Institutional) 27.82 7.61 7.70
Loomis Sayles Worldwide Fund (Retail) 27.59 7.31 5.92
Lipper Global Flexible Portfolio Funds
Index(b) 22.21 11.94 11.42
S&P 500 Index(c) 27.80 25.09 23.61
</TABLE>
CUMULATIVE PERFORMANCE - MAY 31, 1996 TO SEPTEMBER 30, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
(THOUSANDS) LIPPER GLOBAL FLEX LOOMIS SAYLES S & P 500 INDEX
PORTFOLIO INDEX WORLDWIDE FUND(D)
<S> <C> <C> <C>
5/31/96 $10,000.00 $10,000.00 $10,000.00
6/30/96 $10,041.43 $10,029.73 $10,038.12
7/31/96 $9,796.48 $9,692.76 $9,594.88
8/31/96 $9,941.01 $9,930.62 $9,797.57
9/30/96 $10,219.99 $10,247.77 $10,348.51
10/31/96 $10,345.97 $10,445.99 $10,633.82
11/30/96 $10,786.39 $10,951.44 $11,436.90
12/31/96 $10,801.68 $10,826.46 $11,210.34
1/31/97 $11,001.66 $10,826.46 $11,910.33
2/28/97 $11,065.17 $10,846.83 $12,003.84
3/31/97 $10,884.31 $10,826.46 $11,511.54
4/30/97 $10,990.74 $10,928.31 $12,198.15
5/31/97 $11,452.85 $11,244.04 $12,943.92
6/30/97 $11,773.70 $11,376.44 $13,519.36
7/31/97 $12,257.89 $11,985.34 $14,594.81
8/31/97 $11,906.15 $11,697.77 $13,777.79
9/30/97 $12,413.46 $12,160.24 $14,531.93
10/31/97 $11,973.30 $11,461.26 $14,047.15
11/30/97 $12,010.56 $11,471.54 $14,696.89
12/31/97 $12,113.59 $11,206.81 $14,949.11
1/31/98 $12,143.16 $11,547.79 $15,114.29
2/28/98 $12,690.65 $12,252.48 $16,203.77
3/31/98 $13,116.50 $12,366.14 $17,032.87
4/30/98 $13,232.19 $12,207.02 $17,207.29
5/31/98 $13,118.87 $11,684.19 $16,911.93
6/30/98 $13,108.59 $11,195.45 $17,598.38
7/31/98 $12,980.42 $11,195.45 $17,412.39
8/31/98 $11,544.17 $10,002.03 $14,896.71
9/30/98 $11,728.96 $9,990.66 $15,851.83
10/31/98 $12,341.40 $10,706.71 $17,139.24
11/30/98 $12,894.00 $11,343.20 $18,177.59
12/31/98 $13,202.73 $11,540.69 $19,224.38
1/31/99 $13,359.50 $11,702.19 $20,027.98
2/28/99 $13,034.60 $11,478.58 $19,405.62
3/31/99 $13,459.03 $11,838.84 $20,181.81
4/30/99 $14,181.78 $12,335.75 $20,962.85
5/31/99 $13,956.29 $12,397.86 $20,468.12
6/30/99 $14,474.07 $12,683.58 $21,606.15
7/31/99 $14,463.94 $12,919.61 $20,929.88
8/31/99 $14,413.31 $12,869.92 $20,827.32
9/30/99 $14,334.04 $12,770.54 $20,256.65
</TABLE>
Note: Past performance is not predictive of future performance. Total return
assumes reinvestment of dividends and capital gains distributions. The
investment return and principal value of an investment in the Fund will
fluctuate so that investors' shares, when redeemed, may be worth more or less
than their original cost.
(a):Inception date of the Institutional Class of shares is May 1, 1996. Since
Lipper and S&P 500 Index performance data is not available coincident with
this date, comparative performance is presented from May 31, 1996.
Inception date of the Retail Class of shares is December 31, 1996.
(b):The Lipper Global Flexible Portfolio Funds Index is an equally weighted
index of typically the 10 largest mutual funds within the global flexible
funds investment objective. Returns are adjusted for the reinvestment of
capital gains distributions and income dividends.
(c):S&P 500 Index is a capitalization-weighted, total return index comprised of
500 widely held common stocks, representing industrial, utility,
transportation, and financial companies traded on the New York Stock
Exchange, the American Stock Exchange and in the Over-the-Counter market.
The index returns have not been reduced for ongoing management and
operating expenses applicable to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
23
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES AGGRESSIVE GROWTH FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- ------------------------------------------------------------------
COMMON STOCKS -- 98.8% OF NET ASSETS
ADVERTISING -- 1.9%
Omnicom Group, Inc.................... 3,400 $ 269,238
------------
BROADCASTING -- 5.6%
Cox Radio, Inc. *..................... 4,200 249,900
Hispanic Broadcasting Corp. *......... 3,500 266,438
Univision Communications, Inc.
Class A *........................... 3,700 301,087
------------
817,425
------------
BUSINESS SERVICES -- 4.7%
Ariba, Inc. *......................... 1,000 144,500
Exodus Communications, Inc. *......... 2,800 201,775
Expeditors International of
Washington, Inc..................... 8,200 263,169
PSINet, Inc. *........................ 1,900 68,340
------------
677,784
------------
COMMUNICATIONS EQUIPMENT -- 12.8%
Brocade Communications Systems, Inc.
*................................... 700 147,000
E-Tek Dynamics, Inc. *................ 4,600 249,550
Foundry Networks, Inc. *.............. 1,200 151,200
JDS Uniphase Corp. *.................. 2,800 318,675
Juniper Networks, Inc. *.............. 1,300 236,681
QUALCOMM, Inc. *...................... 900 170,269
RF Micro Devices, Inc. *.............. 6,600 301,950
SDL, Inc. *........................... 3,700 282,356
------------
1,857,681
------------
COMPUTER SOFTWARE & SERVICES -- 15.8%
BEA Systems, Inc. *................... 6,800 240,125
Citrix Systems, Inc. *................ 2,400 148,650
DoubleClick, Inc. *................... 1,300 154,862
HomeStore.com, Inc. *................. 2,700 112,556
Inktomi Corp. *....................... 1,200 144,038
Peregrine Systems, Inc. *............. 8,200 334,150
Phone.com, Inc. *..................... 1,000 151,500
Portal Software, Inc. *............... 2,700 104,625
RealNetworks, Inc. *.................. 1,600 167,300
Red Hat, Inc. *....................... 2,500 240,000
VeriSign, Inc. *...................... 1,500 159,750
Veritas Software Corp. *.............. 2,000 151,875
Vignette Corp. *...................... 2,000 181,000
------------
2,290,431
------------
ELECTRONICS -- 18.9%
Applied Micro Circuits Corp. *........ 5,500 313,500
Broadcom Corp. Class A *.............. 2,000 218,000
Conexant Systems, Inc. *.............. 4,100 297,891
KLA-Tencor Corp. *.................... 3,500 227,500
Maxim Integrated Products, Inc. *..... 3,800 239,756
PMC Sierra, Inc. *.................... 3,600 333,000
</TABLE>
24
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES AGGRESSIVE GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
ELECTRONICS -- CONTINUED
QLogic Corp. *........................ 4,000 $ 279,250
Solectron Corp. *..................... 3,700 265,706
Vitesse Semiconductor Corp. *......... 3,600 307,350
Xilinx, Inc. *........................ 3,900 255,572
------------
2,737,525
------------
FINANCIAL SERVICES -- 1.3%
Capital One Financial Corp............ 3,700 144,300
Charles Schwab Corp................... 1,500 50,531
------------
194,831
------------
GAMING -- 2.2%
Harrah's Entertainment, Inc. *........ 5,600 155,400
Park Place Entertainment Corp. *...... 12,500 156,250
------------
311,650
------------
HEALTH CARE -- BIOTECHNOLOGY -- 6.5%
Affymetrix, Inc. *.................... 1,300 127,969
Biogen, Inc. *........................ 3,400 267,962
Human Genome Sciences, Inc. *......... 1,900 140,125
IDEC Pharmaceuticals Corp. *.......... 1,200 112,838
MedImmune, Inc. *..................... 2,900 289,003
------------
937,897
------------
HEALTH CARE -- PRODUCTS -- 5.6%
MiniMed, Inc. *....................... 3,300 324,225
QLT Phototherapeutics, Inc. *......... 3,700 282,819
VISX, Inc. *.......................... 2,600 205,644
------------
812,688
------------
HEALTH CARE -- SERVICES -- 3.3%
Express Scripts, Inc. Class A *....... 3,700 289,525
MedQuist, Inc. *...................... 5,600 187,250
------------
476,775
------------
INSURANCE -- 1.5%
AFLAC, Inc............................ 5,200 217,750
------------
LEISURE -- 1.3%
Harley-Davidson, Inc.................. 3,700 185,231
------------
OIL & GAS DRILLING EQUIPMENT -- 5.9%
BJ Services Co. *..................... 8,900 283,131
Ensco International, Inc.............. 12,500 225,781
Nabors Industries, Inc. *............. 5,300 132,500
Noble Drilling Corp. *................ 9,400 205,625
------------
847,037
------------
PACKAGING -- 1.5%
Sealed Air Corp. *.................... 4,200 215,513
------------
</TABLE>
25
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES AGGRESSIVE GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
RETAIL -- GENERAL -- 0.7%
Kohl's Corp. *........................ 1,600 $ 105,800
------------
RETAIL -- SPECIALTY -- 3.1%
eToys, Inc. *......................... 2,400 159,750
Tiffany & Co.......................... 4,800 287,700
------------
447,450
------------
TELECOMMUNICATIONS -- 1.4%
Metromedia Fiber Network, Inc.
Class A *........................... 4,300 105,350
Teligent, Inc. Class A *.............. 2,100 104,344
------------
209,694
------------
UTILITIES -- 4.8%
Calpine Corp. *....................... 3,100 263,694
Montana Power Co...................... 7,400 225,237
Potomac Electric Power Co............. 8,000 203,500
------------
692,431
------------
TOTAL COMMON STOCKS
(Identified Cost $11,429,915)....... 14,304,831
------------
<CAPTION>
FACE
AMOUNT
<S> <C> <C>
- ------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 2.6% OF NET ASSETS
Repurchase Agreement with State Street
Bank and Trust Co., dated 9/30/99 at
4.250% to be repurchased at $381,045
on 10/01/99 collateralized by
$310,000 U.S. Treasury Bond, 8.875%
due 2/15/19 with a value of
$392,586............................ $ 381,000 381,000
------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $381,000).......... 381,000
------------
TOTAL INVESTMENTS -- 101.4%
(IDENTIFIED COST $11,810,915) @....... 14,685,831
Liabilities, Less Cash and Other
Assets -- (1.4%).................... (202,123)
------------
NET ASSETS -- 100%...................... $ 14,483,708
============
</TABLE>
! See Note 1.
* Non-income producing security.
@ At September 30, 1999, the net unrealized appreciation on investments based
on cost of $11,817,905 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there
is an excess of value over tax cost and aggregate gross unrealized
depreciation for all securities in which there is an excess of tax cost
over value were $3,283,322 and $415,396, respectively, resulting in net
unrealized appreciation of $2,867,926.
See accompanying notes to financial statements.
26
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- ------------------------------------------------------------------
COMMON STOCKS -- 97.3% OF NET ASSETS
AEROSPACE/DEFENSE -- 0.9%
Northrop Grumman Corp................. 9,000 $ 572,063
------------
AUTO & RELATED -- 3.0%
Dana Corp............................. 19,700 731,362
General Motors Corp................... 20,000 1,258,750
------------
1,990,112
------------
BANKS/SAVINGS & LOANS -- 8.9%
Bank One Corp......................... 21,084 733,987
Chase Manhattan Corp.................. 17,624 1,328,409
Comerica, Inc......................... 10,700 541,688
Fleet Financial Group, Inc............ 45,000 1,648,125
PNC Bank Corp......................... 33,000 1,738,687
------------
5,990,896
------------
BEVERAGES -- 0.9%
Anheuser-Busch Cos., Inc.............. 8,900 623,556
------------
BROADCASTING -- 1.0%
MediaOne Group, Inc. *................ 10,100 689,956
------------
BUILDING & CONSTRUCTION -- 1.1%
Koninklijke (Royal) Philips
Electronics NV ADR.................. 7,100 717,100
------------
CHEMICALS -- MAJOR -- 3.4%
Dow Chemical Co....................... 6,500 738,562
Praxair, Inc.......................... 19,000 874,000
Rohm & Haas Co........................ 18,800 679,150
------------
2,291,712
------------
CHEMICALS -- SPECIALTY -- 0.3%
E.I. du Pont DeNemours & Co........... 3,443 209,593
------------
COMMERCIAL SERVICES -- 0.8%
Viad Corp............................. 18,300 539,850
------------
COMMUNICATIONS EQUIPMENT -- 0.8%
Harris Corp........................... 20,100 555,263
------------
COMPUTER HARDWARE -- 2.1%
Compaq Computer Corp.................. 30,400 697,300
International Business Machines
Corp................................ 6,100 740,387
------------
1,437,687
------------
DATA PROCESSING SERVICES -- 1.7%
Dun & Bradstreet Corp................. 14,200 424,225
First Data Corp....................... 16,000 702,000
------------
1,126,225
------------
ELECTRONICS -- 4.7%
Emerson Electric Co................... 12,100 764,569
Intel Corp............................ 8,400 624,225
Litton Industries, Inc. *............. 14,500 793,875
</TABLE>
27
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
ELECTRONICS -- CONTINUED
Raytheon Co. Class B.................. 20,400 $ 1,012,350
------------
3,195,019
------------
ENTERTAINMENT -- 2.1%
Time Warner, Inc...................... 11,800 716,850
Walt Disney Co........................ 26,300 680,512
------------
1,397,362
------------
FINANCIAL SERVICES -- 6.5%
American Express Co................... 5,900 794,287
CIT Group, Inc. Class A............... 24,300 499,669
Citigroup, Inc........................ 24,500 1,078,000
Finova Group, Inc..................... 22,024 803,876
KeyCorp............................... 47,200 1,218,350
------------
4,394,182
------------
FOOD -- PACKAGED & MISCELLANEOUS -- 1.6%
Sara Lee Corp......................... 45,100 1,057,031
------------
FOREST & PAPER PRODUCTS -- 1.6%
Georgia-Pacific Corp. (Timber
Group).............................. 22,100 505,537
Willamette Industries, Inc............ 13,400 577,875
------------
1,083,412
------------
GOVERNMENT AGENCIES -- 1.6%
Federal National Mortgage
Association......................... 17,400 1,090,762
------------
HEALTH CARE -- DRUGS -- 3.4%
Bristol Myers Squibb Co............... 17,000 1,147,500
Merck & Co., Inc...................... 17,400 1,127,737
------------
2,275,237
------------
HEALTH CARE -- SERVICES -- 1.5%
Tenet Healthcare Corp. *.............. 59,000 1,036,188
------------
HOME PRODUCTS -- 1.3%
Newell Rubbermaid, Inc................ 12,200 348,463
Premark International, Inc............ 10,700 540,350
------------
888,813
------------
HOUSING & BUILDING MATERIALS -- 1.0%
Black & Decker Corp................... 14,000 639,625
------------
IMAGING -- 1.4%
Xerox Corp............................ 22,900 960,369
------------
INSURANCE -- 3.3%
Ace Ltd............................... 53,650 908,697
Allstate Corp......................... 27,096 675,706
Reliastar Financial Corp.............. 19,300 641,725
------------
2,226,128
------------
</TABLE>
28
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
LEISURE -- 1.5%
Hasbro, Inc........................... 45,750 $ 980,766
------------
MACHINERY -- 1.1%
Caterpillar, Inc...................... 13,600 745,450
------------
MANUFACTURING -- 3.7%
Eaton Corp............................ 16,000 1,381,000
Owens-Illinois, Inc. *................ 28,500 564,656
Tenneco, Inc.......................... 30,200 513,400
------------
2,459,056
------------
METALS -- 0.5%
Alcoa, Inc............................ 5,800 359,963
------------
NATURAL GAS -- 1.0%
Columbia Energy Group................. 12,600 697,725
------------
OIL & GAS DRILLING EQUIPMENT -- 1.4%
Cooper Cameron Corp. *................ 7,500 283,125
Transocean Offshore, Inc.............. 21,300 652,313
------------
935,438
------------
OIL & GAS -- MAJOR INTEGRATED -- 10.9%
BP Amoco Plc ADR...................... 6,600 731,363
Conoco, Inc........................... 31,400 871,350
Conoco, Inc. Class B.................. 7,248 198,414
Consolidated Natural Gas Co........... 13,800 860,775
Exxon Corp............................ 30,200 2,293,312
Texaco, Inc........................... 19,100 1,205,687
USX Marathon Group.................... 39,400 1,152,450
------------
7,313,351
------------
PERSONAL CARE -- 2.0%
Kimberly Clark Corp................... 26,000 1,365,000
------------
RESTAURANTS -- 0.5%
McDonald's Corp....................... 8,600 369,800
------------
RETAIL -- FOOD & DRUG -- 1.0%
Kroger Co. *.......................... 29,200 644,225
------------
RETAIL -- GENERAL -- 1.4%
Federated Department Stores, Inc. *... 21,000 917,438
------------
SECURITIES -- 2.1%
Bear Stearns Cos., Inc................ 15,005 576,755
Morgan Stanley Dean Witter & Co....... 9,600 856,200
------------
1,432,955
------------
TELECOMMUNICATIONS -- 11.2%
Ameritech Corp........................ 30,000 2,015,625
AT&T Corp............................. 21,000 913,500
BellSouth Corp........................ 42,000 1,890,000
</TABLE>
29
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
TELECOMMUNICATIONS -- CONTINUED
GTE Corp.............................. 25,900 $ 1,991,062
MCI WorldCom, Inc. *.................. 9,900 711,563
------------
7,521,750
------------
TOBACCO -- 1.1%
Philip Morris Cos., Inc............... 22,500 769,219
------------
UTILITIES -- ELECTRIC -- 3.0%
Texas Utilities Co.................... 26,600 992,513
Unicom Corp........................... 28,300 1,045,331
------------
2,037,844
------------
TOTAL COMMON STOCKS
(Identified Cost $63,010,525)....... 65,538,121
------------
<CAPTION>
FACE
AMOUNT
<S> <C> <C>
- ------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 3.6% OF NET ASSETS
Associates Corp. of North America,
5.480%, 10/01/99.................... $2,428,373 2,428,373
------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $2,428,373)........ 2,428,373
------------
TOTAL INVESTMENTS -- 100.9%
(IDENTIFIED COST $65,438,898) @....... 67,966,494
Liabilities, Less Cash and Other
Assets -- (0.9%).................... (635,972)
------------
NET ASSETS -- 100%...................... $ 67,330,522
============
</TABLE>
! See Note 1.
* Non-income producing security.
@ At September 30, 1999, the net unrealized appreciation on investments based
on cost of $65,439,583 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there
is an excess of value over tax cost and aggregate gross unrealized
depreciation for all securities in which there is an excess of tax cost
over value were $6,975,834 and $4,448,923, respectively, resulting in net
unrealized appreciation of $2,526,911.
KEY TO ABBREVIATIONS:
ADR: American Depositary Receipt
See accompanying notes to financial statements.
30
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- ------------------------------------------------------------------
COMMON STOCKS -- 99.8% OF NET ASSETS
ADVERTISING -- 2.1%
Omnicom Group, Inc.................... 7,600 $ 601,825
------------
BROADCASTING -- 5.2%
CBS Corp. *........................... 12,600 582,750
Clear Channel Communications, Inc.
*................................... 6,000 479,250
Comcast Corp. Class A................. 10,900 434,637
------------
1,496,637
------------
COMMUNICATIONS EQUIPMENT -- 3.6%
Lucent Technologies, Inc.............. 9,300 603,338
Motorola, Inc......................... 5,100 448,800
------------
1,052,138
------------
COMPUTER HARDWARE -- 12.4%
Cisco Systems, Inc. *................. 15,300 1,049,006
Dell Computer Corp. *................. 17,000 710,813
EMC Corp. *........................... 9,600 685,800
International Business Machines
Corp................................ 2,400 291,300
Lexmark International Group, Inc.
Class A *........................... 5,500 442,750
Sun Microsystems, Inc. *.............. 4,300 399,900
------------
3,579,569
------------
COMPUTER SOFTWARE & SERVICES -- 5.9%
Microsoft Corp. *..................... 8,300 751,669
Oracle Corp. *........................ 11,300 514,150
VeriSign, Inc. *...................... 4,100 436,650
------------
1,702,469
------------
DIVERSIFIED OPERATIONS -- 2.6%
General Electric Co................... 6,400 758,800
------------
ELECTRONICS -- 11.0%
Applied Materials, Inc. *............. 9,400 730,263
Intel Corp............................ 11,400 847,162
Solectron Corp. *..................... 11,800 847,387
Texas Instruments, Inc................ 9,100 748,475
------------
3,173,287
------------
ENTERTAINMENT -- 2.2%
Time Warner, Inc...................... 10,300 625,725
------------
FINANCIAL SERVICES -- 8.9%
American Express Co................... 5,300 713,513
Citigroup, Inc........................ 17,100 752,400
Concord EFS, Inc. *................... 28,200 581,625
Merrill Lynch & Co., Inc.............. 7,900 530,781
------------
2,578,319
------------
</TABLE>
31
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
HEALTH CARE -- BIOTECHNOLOGY -- 2.0%
Biogen, Inc. *........................ 2,300 $ 181,269
MedImmune, Inc. *..................... 4,000 398,625
------------
579,894
------------
HEALTH CARE -- DRUGS -- 4.7%
Bristol Myers Squibb Co............... 14,500 978,750
Schering-Plough Corp.................. 8,400 366,450
------------
1,345,200
------------
HEALTH CARE -- MEDICAL TECHNOLOGY --
7.3%
Guidant Corp.......................... 13,400 718,575
PE Corp.-PE Biosystems Group.......... 9,000 650,250
Stryker Corp.......................... 14,700 751,537
------------
2,120,362
------------
HOME PRODUCTS -- 3.1%
Procter & Gamble Co................... 9,600 900,000
------------
INSURANCE -- 3.2%
American International Group, Inc..... 10,533 915,713
------------
MANUFACTURING -- 3.9%
Danaher Corp.......................... 6,600 347,737
Tyco International Ltd................ 7,400 764,050
------------
1,111,787
------------
MULTI-INDUSTRY -- 1.5%
United Technologies Corp.............. 7,300 432,981
------------
OIL & GAS DRILLING EQUIPMENT -- 3.2%
Rowan Cos., Inc. *.................... 26,200 425,750
Schlumberger Ltd...................... 8,200 510,963
------------
936,713
------------
OIL & GAS EXPLORATION -- 2.3%
Anadarko Petroleum Corp............... 22,000 672,375
------------
PACKAGING -- 1.5%
Sealed Air Corp. *.................... 8,500 436,156
------------
RESTAURANTS -- 2.9%
McDonald's Corp....................... 19,600 842,800
------------
RETAIL -- FOOD & DRUG -- 2.9%
CVS Corp.............................. 20,400 832,575
------------
RETAIL -- SPECIALTY -- 3.1%
Tandy Corp............................ 17,200 889,025
------------
TELECOMMUNICATIONS -- 4.3%
MCI WorldCom, Inc. *.................. 9,000 646,875
</TABLE>
32
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
TELECOMMUNICATIONS -- CONTINUED
Sprint Corp. (PCS Group) *............ 8,100 $ 603,956
------------
1,250,831
------------
TOTAL COMMON STOCKS
(Identified Cost $25,539,925)....... 28,835,181
------------
TOTAL INVESTMENTS -- 99.8%
(IDENTIFIED COST $25,539,925) @....... 28,835,181
Cash and Other Assets, Less
Liabilities -- 0.2%................. 48,545
------------
NET ASSETS -- 100%...................... $ 28,883,726
============
</TABLE>
! See Note 1.
* Non-income producing security.
@ At September 30, 1999, the net unrealized appreciation on investments based
on cost of $25,539,925 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there
is an excess of value over tax cost and aggregate gross unrealized
depreciation for all securities in which there is an excess of tax cost
over value were $4,091,361 and $796,105, respectively, resulting in net
unrealized appreciation of $3,295,256.
See accompanying notes to financial statements.
33
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- ------------------------------------------------------------------
COMMON STOCKS -- 93.9% OF NET ASSETS
AUSTRALIA -- 3.8%
AAPT Ltd. *........................... 114,000 $ 364,403
Lihir Gold Ltd. *..................... 216,900 237,857
Solution 6 Holdings Ltd. *............ 263,000 939,739
WMC Ltd............................... 160,000 814,632
Woodside Petroleum Ltd................ 100,000 694,330
------------
3,050,961
------------
BRAZIL -- 0.9%
Telecomunicacoes Brasileiras SA ADR... 10,000 749,375
------------
CANADA -- 1.6%
Nortel Networks Corp.................. 24,800 1,265,909
------------
FINLAND -- 3.5%
Nokia Oyj............................. 14,700 1,315,452
Stora Enso Oyj........................ 63,000 834,587
UPM-Kymmene Oyj....................... 18,000 612,893
------------
2,762,932
------------
FRANCE -- 5.5%
Carrefour SA.......................... 4,600 735,663
Coflexip SA........................... 8,000 747,388
Etablissements Economiques du Casino
Guichard-Perrachon SA............... 3,800 436,686
Renault SA............................ 20,000 1,104,483
St. Gobain SA......................... 3,500 651,730
Total Fina SA Class B................. 5,400 678,012
------------
4,353,962
------------
GERMANY -- 4.1%
Dresdner Bank AG...................... 15,000 705,465
Mannesmann AG......................... 7,190 1,147,577
Siemens AG............................ 9,500 783,912
Veba AG............................... 11,100 607,673
------------
3,244,627
------------
HONG KONG -- 3.1%
Dah Sing Financial Group.............. 180,000 720,658
Giordano International Ltd............ 1,040,000 823,389
Pacific Century CyberWorks Ltd. *..... 1,132,000 954,518
------------
2,498,565
------------
HUNGARY -- 0.9%
MATAV RT ADR.......................... 130,000 713,837
------------
INDIA -- 2.1%
Gujarat Ambuja Cements Ltd. GDR....... 70,000 866,250
ICICI Ltd. ADR *...................... 66,000 792,000
------------
1,658,250
------------
</TABLE>
34
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
IRELAND --1.6%
Ryanair Holdings Plc ADR *............ 20,000 $ 917,500
Trintech Group Plc ADR *.............. 30,000 393,750
------------
1,311,250
------------
ISRAEL -- 0.7%
Internet Gold *....................... 63,800 534,325
------------
ITALY -- 1.8%
Bipop - Carire Spa.................... 15,900 680,119
Seat-Pagine Gialle Spa................ 500,000 729,938
------------
1,410,057
------------
JAPAN -- 34.1%
Aiful Corp............................ 6,000 1,019,854
Doutor Coffee Co. Ltd................. 10,100 1,040,457
Fujitsu Ltd........................... 49,000 1,523,506
Fujitsu Support and Service, Inc...... 5,800 1,645,814
Funai Electric Co. Ltd................ 3,500 1,294,718
Hikari Tsushin, Inc................... 1,300 791,347
Kao Corp.............................. 23,000 648,342
Murata Manufacturing Co. Ltd.......... 10,000 1,002,060
NEC Corp.............................. 51,000 1,024,490
NIDEC Corp............................ 4,300 811,435
Nitori Co............................. 43,000 1,610,789
NTT Mobile Communications............. 85 1,671,661
Orix Corp............................. 6,200 760,049
Ricoh Co. Ltd......................... 41,000 710,339
Ryohin Keikaku Co. Ltd................ 6,000 1,205,282
Sakura Bank Ltd....................... 70,600 528,938
Sanwa Bank Ltd........................ 35,000 467,082
Sharp Corp............................ 65,000 1,038,490
Softbank Corp......................... 4,200 1,592,995
Sony Corp............................. 9,800 1,460,180
Taiyo Yuden Co. Ltd................... 31,000 1,021,914
Terumo Corp........................... 26,000 801,086
Tokyo Electron Ltd.................... 9,000 779,641
Trend Micro, Inc...................... 9,000 1,087,282
World Co. Ltd......................... 7,700 827,833
Zuken, Inc............................ 22,000 842,667
------------
27,208,251
------------
MEXICO -- 0.8%
Grupo Televisa SA ADR *............... 16,000 639,000
------------
NETHERLANDS -- 4.9%
ASM Lithography Holding NV *.......... 17,290 1,159,510
STMicroelectronics NV................. 14,830 1,097,420
United Pan-Europe Communications NV
*................................... 17,000 1,049,153
</TABLE>
35
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
NETHERLANDS -- CONTINUED
Versatel Telecom International NV ADR
*................................... 59,500 $ 639,625
------------
3,945,708
------------
NORWAY -- 1.0%
Petroleum Geo-Services ADR *.......... 42,000 800,625
------------
SINGAPORE -- 3.5%
Datacraft Asia Ltd.................... 280,000 1,232,000
DBS Group Holdings Ltd................ 83,736 935,873
Natsteel Electronics Ltd.............. 156,000 582,706
------------
2,750,579
------------
SOUTH AFRICA -- 1.5%
ABSA Group Ltd........................ 115,000 450,229
De Beers Cons Mines ADR............... 28,000 756,000
------------
1,206,229
------------
SOUTH KOREA -- 2.6%
Pohang Iron & Steel Co. Ltd. ADR...... 15,000 469,688
Samsung Electronics................... 9,791 1,585,554
------------
2,055,242
------------
SPAIN -- 0.7%
Sogecable SA *........................ 21,800 594,520
------------
SWEDEN -- 0.9%
Telefonaktiebolaget LM Ericsson....... 23,000 713,048
------------
SWITZERLAND -- 0.7%
Adecco SA............................. 1,000 558,403
------------
TAIWAN -- 1.0%
Taiwan Semiconductor Manufacturing Co.
Ltd. ADR............................ 27,060 798,270
------------
UNITED KINGDOM -- 12.6%
ARM Holdings Plc *.................... 53,000 824,549
Billiton Plc.......................... 409,000 1,717,008
British Aerospace Plc................. 110,000 724,372
BP Amoco Co. Plc...................... 66,000 1,206,079
CMG Plc *............................. 21,100 719,054
Colt Telecom Group Plc *.............. 42,300 1,006,276
Kingston Communication (Hull) Plc *... 160,000 1,082,606
Prudential Corp. Plc.................. 43,700 672,669
NTL, Inc. *........................... 7,500 720,703
Vodafone Group........................ 57,000 1,345,183
------------
10,018,499
------------
TOTAL COMMON STOCKS
(Identified Cost $64,326,454)....... 74,842,424
------------
</TABLE>
36
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCKS -- 2.2% OF NET ASSETS
BRAZIL -- 0.0%
Telemig Celular SA *.................. 64,122 $ 605
------------
GERMANY -- 2.0%
Porsche AG............................ 300 817,190
SAP AG................................ 1,800 806,337
------------
1,623,527
------------
THAILAND -- 0.2%
Siam Commercial Bank Public Co. Ltd.,
5.25% *............................. 127,000 113,960
------------
TOTAL PREFERRED STOCKS
(Identified Cost $1,710,781)........ 1,738,092
------------
WARRANTS -- 0.1% OF NET ASSETS
THAILAND -- 0.1%
Siam Commercial Bank Public Co. Ltd.,
expiring 5/10/02 *.................. 127,000 36,436
------------
TOTAL WARRANTS
(Identified Cost $0)................ 36,436
------------
TOTAL INVESTMENTS -- 96.2%
(IDENTIFIED COST $66,037,235) @....... 76,616,952
Cash and Other Assets, Less
Liabilities -- 3.8%................. 3,059,566
------------
NET ASSETS -- 100%...................... $ 79,676,518
============
</TABLE>
! See Note 1.
* Non-income producing security.
@ At September 30, 1999, the net unrealized appreciation on investments based
on cost of $66,257,077 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there
is an excess of value over tax cost and aggregate gross unrealized
depreciation for all securities in which there is an excess of tax cost
over value were $12,136,182 and $1,787,269, respectively, resulting in net
unrealized appreciation of $10,348,913.
KEY TO ABBREVIATIONS:
ADR: American Depositary Receipt
GDR: Global Depositary Receipt
Ten Largest Sector Holdings at September 30, 1999
as a Percentage of Net Assets
<TABLE>
<S> <C>
Telecommunications 17.1%
Electronics 15.7%
Computer Software & Services 10.8%
Financial Services 5.3%
Oil & Gas 3.2%
Retail - Specialty 3.1%
Metals 2.7%
Communications Equipment 2.5%
Machinery 2.5%
Auto & Related 2.4%
</TABLE>
See accompanying notes to financial statements.
37
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- ---------------------------------------------------------------
COMMON STOCKS -- 90.1% OF NET ASSETS
ADVERTISING -- 1.2%
True North Communications, Inc........ 1,700 $ 61,838
-----------
AEROSPACE/DEFENSE -- 2.5%
General Dynamics Corp................. 2,100 131,119
-----------
BANKS/SAVINGS & LOANS -- 6.5%
AmSouth Bancorp....................... 4,475 104,883
Colonial BancGroup, Inc............... 1,700 19,019
Golden State Bancorp, Inc. *.......... 2,800 50,225
SouthTrust Corp....................... 2,500 89,687
UnionBanCal Corp...................... 2,300 83,375
-----------
347,189
-----------
BEVERAGES -- 3.2%
Adolph Coors Co. Class B.............. 2,200 119,075
Pepsi Bottling Group, Inc............. 2,900 49,481
-----------
168,556
-----------
BUSINESS SERVICES -- 1.0%
Manpower, Inc......................... 1,800 52,425
-----------
CHEMICALS -- MAJOR -- 1.3%
Praxair, Inc.......................... 1,500 69,000
-----------
CHEMICALS -- SPECIALTY -- 5.1%
CK Witco Corp......................... 4,630 67,424
Pall Corp............................. 2,900 67,244
Potash Corp. of Saskatchewan.......... 1,300 67,113
W.R. Grace & Co. *.................... 4,200 67,462
-----------
269,243
-----------
COMPUTER HARDWARE -- 3.5%
Apple Computer, Inc. *................ 700 44,319
Lexmark International Group, Inc.
Class A *........................... 1,100 88,550
Quantum Corp.......................... 3,700 52,031
-----------
184,900
-----------
COMPUTER SOFTWARE & SERVICES -- 3.6%
J.D. Edwards & Co. *.................. 2,500 51,797
NOVA Corp. *.......................... 2,700 67,500
Sterling Software, Inc. *............. 3,700 74,000
-----------
193,297
-----------
CONSUMER PRODUCTS -- 1.7%
Whirlpool Corp........................ 1,400 91,438
-----------
ELECTRONICS -- 6.0%
Advanced Micro Devices, Inc. *........ 1,500 25,781
C-Cube Microsystems, Inc. *........... 1,300 56,550
Cypress Semiconductor Corp. *......... 1,000 21,500
National Semiconductor Corp. *........ 1,400 42,700
SCI Systems, Inc. *................... 1,800 79,988
</TABLE>
38
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
ELECTRONICS -- CONTINUED
Thomas & Betts Corp................... 1,750 $ 89,250
-----------
315,769
-----------
FINANCIAL SERVICES -- 1.8%
PMI Group, Inc........................ 2,350 96,056
-----------
FOOD -- 0.2%
SUPERVALU, Inc........................ 500 10,906
-----------
FOOD -- PACKAGED & MISCELLANEOUS -- 2.2%
Dean Foods Co......................... 2,700 117,619
-----------
FREIGHT TRANSPORTATION -- 1.2%
CNF Transportation, Inc............... 1,700 63,325
-----------
HEALTH CARE -- MEDICAL SUPPLIES -- 1.5%
St. Jude Medical, Inc. *.............. 2,500 78,750
-----------
HEALTH CARE -- SERVICES -- 4.3%
AmeriSource Health Corp. Class A *.... 3,300 78,169
Lincare Holdings, Inc. *.............. 2,500 66,640
Tenet Healthcare Corp. *.............. 4,800 84,300
-----------
229,109
-----------
LEISURE -- 2.0%
Royal Caribbean Cruises Ltd........... 2,400 108,000
-----------
MACHINERY -- 3.6%
Deere & Co............................ 2,700 104,456
Tecumseh Products Co. Class A......... 1,700 85,213
-----------
189,669
-----------
MANUFACTURING -- 4.0%
Crane Co.............................. 4,000 89,750
Eaton Corp............................ 1,000 86,312
Owens-Illinois, Inc. *................ 1,800 35,663
-----------
211,725
-----------
METALS -- 1.0%
Bethlehem Steel Corp. *............... 7,300 53,838
-----------
METALS & MINING -- 0.5%
Newmont Mining Corp................... 1,000 25,875
-----------
MINING -- 0.8%
Barrick Gold Corp..................... 1,900 41,325
-----------
NATURAL GAS -- 0.8%
MCN Energy Group, Inc................. 2,500 42,969
-----------
OIL & GAS DRILLING EQUIPMENT -- 4.4%
Ensco International, Inc.............. 3,700 66,831
Global Marine, Inc. *................. 4,800 78,900
Noble Drilling Corp. *................ 3,942 86,231
-----------
231,962
-----------
</TABLE>
39
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
OIL & GAS -- MAJOR INTEGRATED -- 2.3%
USX Marathon Group.................... 4,100 $ 119,925
-----------
PUBLISHING -- 2.1%
Knight-Ridder, Inc.................... 2,000 109,750
-----------
REAL ESTATE INVESTMENT TRUSTS -- 2.0%
Equity Residential Properties Trust... 2,500 105,937
-----------
RETAIL -- GENERAL -- 1.7%
Consolidated Stores Corp. *........... 4,000 88,250
-----------
RETAIL -- SPECIALTY -- 1.7%
Harcourt General, Inc................. 2,200 91,575
-----------
SECURITIES -- 1.3%
Lehman Brothers Holdings, Inc......... 1,200 69,975
-----------
TELECOMMUNICATIONS -- 6.2%
ITC DeltaCom, Inc. *.................. 2,100 57,750
IXC Communications, Inc. *............ 2,400 94,650
PanAmSat Corp. *...................... 2,900 104,762
Telephone and Data Systems, Inc....... 800 71,050
-----------
328,212
-----------
TEXTILE & APPAREL -- 1.1%
Jones Apparel Group, Inc. *........... 2,001 57,529
-----------
UTILITIES -- 7.8%
DQE, Inc.............................. 2,000 78,250
Edison International.................. 4,600 111,837
Energy East Corp...................... 3,000 71,250
Niagara Mohawk Holdings, Inc. *....... 5,200 80,275
Pinnacle West Capital Corp............ 2,000 72,750
-----------
414,362
-----------
TOTAL COMMON STOCKS
(Identified Cost $4,870,409)........ 4,771,417
-----------
</TABLE>
40
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE !
- ---------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT -- 13.5% OF NET ASSETS
Repurchase Agreement with State Street
Bank and Trust Co., dated 9/30/99 at
4.250% to be repurchased at $713,084
on 10/01/99 collateralized by
$665,000 U.S. Treasury Bond, 11.750%
due 2/15/01 with a value of
$727,344............................ $713,000 $ 713,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $713,000).......... 713,000
-----------
TOTAL INVESTMENTS -- 103.6%
(IDENTIFIED COST $5,583,409) @........ 5,484,417
Liabilities, Less Cash and Other
Assets -- (3.6%).................... (192,026)
-----------
NET ASSETS -- 100%...................... $ 5,292,391
===========
</TABLE>
! See Note 1.
* Non-income producing security.
@ At September 30, 1999, the net unrealized depreciation on investments based
on cost of $5,661,042 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there
is an excess of value over tax cost and aggregate gross unrealized
depreciation for all securities in which there is an excess of tax cost
over value were $123,010 and $ 299,635, respectively, resulting in net
unrealized depreciation of $176,625.
See accompanying notes to financial statements.
41
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- ------------------------------------------------------------------
COMMON STOCKS -- 95.3% OF NET ASSETS
BANKS/SAVINGS & LOANS -- 0.5%
Staten Island Bancorp, Inc............ 23,000 $ 432,688
------------
BROADCASTING -- 6.7%
Acme Communications, Inc. *........... 27,600 855,600
Citadel Communications Corp. *........ 31,000 1,057,875
Cumulus Media, Inc. Class A *......... 45,000 1,470,937
Entercom Communications Corp. *....... 22,000 792,000
Westwood One, Inc. *.................. 22,800 1,028,850
Young Broadcasting, Inc. Class A *.... 11,900 623,263
------------
5,828,525
------------
BUSINESS SERVICES -- 13.4%
Abacus Direct Corp. *................. 13,500 1,645,312
Commerce One, Inc. *.................. 9,600 938,100
Concentric Network Corp. *............ 17,300 351,406
CyberSource Corp. *................... 11,000 609,125
Diamond Technology Partners, Inc. *... 23,400 1,050,075
Luminant Worldwide Corp. *............ 29,200 897,900
NCO Group, Inc. *..................... 33,100 1,555,700
Profit Recovery Group
International, Inc. *............... 56,550 2,523,544
QRS Corp. *........................... 20,900 1,340,213
Security First Technologies Corp. *... 20,400 793,050
------------
11,704,425
------------
COMMUNICATIONS EQUIPMENT -- 9.7%
Ditech Communications Corp. *......... 10,500 551,250
Foundry Networks, Inc. *.............. 6,900 869,400
Gadzoox Networks, Inc. *.............. 10,100 544,137
Harmonic, Inc. *...................... 6,700 876,444
JDS Uniphase Corp. *.................. 7,500 853,594
Optical Coating Laboratory, Inc....... 19,700 1,813,631
Powerwave Technologies, Inc. *........ 27,900 1,345,303
SDL, Inc. *........................... 20,850 1,591,116
------------
8,444,875
------------
COMPUTER SOFTWARE & SERVICES -- 16.3%
Advent Software, Inc. *............... 22,875 1,423,969
Clarify, Inc. *....................... 32,050 1,612,516
Dendrite International, Inc. *........ 35,450 1,675,012
E.piphany, Inc. *..................... 13,200 643,500
Genesys Telecommunications
Laboratory, Inc. *.................. 58,300 2,663,581
Inktomi Corp. *....................... 7,200 864,225
Macromedia, Inc. *.................... 30,000 1,226,250
Mercury Interactive Corp. *........... 34,200 2,208,037
Packeteer, Inc. *..................... 25,000 851,563
VeriSign, Inc. *...................... 9,600 1,022,400
------------
14,191,053
------------
</TABLE>
42
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
ELECTRONICS -- 15.9%
Advanced Energy Industries, Inc. *.... 29,200 $ 901,550
Applied Micro Circuits Corp. *........ 33,700 1,920,900
Cree Research, Inc. *................. 41,000 1,391,437
Emulex Corp. *........................ 22,600 1,940,775
HI/FN Inc. *.......................... 12,400 1,367,100
PMC Sierra, Inc. *.................... 16,600 1,535,500
Power Integrations, Inc. *............ 22,700 1,571,975
Sawtek, Inc. *........................ 50,800 1,778,000
TranSwitch Corp. *.................... 26,050 1,484,850
------------
13,892,087
------------
ENTERTAINMENT -- 0.9%
Sportsline USA, Inc. *................ 25,800 762,713
------------
FINANCIAL SERVICES -- 1.1%
Metris Companies, Inc................. 34,000 1,000,875
------------
HEALTH CARE -- BIOTECHNOLOGY -- 7.2%
Abgenix, Inc. *....................... 24,850 973,809
Alkermes, Inc. *...................... 27,900 803,869
BioMarin Pharmaceutical, Inc. *....... 23,600 410,050
COR Therapeutics, Inc. *.............. 32,900 625,100
Enzon, Inc. *......................... 16,100 491,050
ICOS Corp. *.......................... 15,700 463,150
IDEC Pharmaceuticals Corp. *.......... 5,900 554,784
MedImmune, Inc. *..................... 10,000 996,563
Pharmacyclics, Inc. *................. 24,450 999,394
------------
6,317,769
------------
HEALTH CARE -- PRODUCTS -- 4.2%
Cyberonics, Inc. *.................... 41,400 740,025
MiniMed, Inc. *....................... 18,000 1,768,500
Xomed Surgical Products, Inc. *....... 19,950 1,137,150
------------
3,645,675
------------
HEALTH CARE -- SERVICES -- 2.3%
MedQuist, Inc. *...................... 41,200 1,377,625
TLC The Laser Center, Inc. *.......... 25,700 632,862
------------
2,010,487
------------
INSURANCE -- 0.9%
Annuity and Life Re (Holdings) Ltd.... 30,000 746,250
------------
OIL & GAS DRILLING EQUIPMENT -- 4.6%
Atwood Oceanics, Inc. *............... 42,400 1,295,850
Marine Drilling Cos., Inc. *.......... 98,600 1,559,113
Patterson Energy, Inc. *.............. 76,700 1,164,881
------------
4,019,844
------------
</TABLE>
43
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
OIL & GAS EXPLORATION -- 1.6%
Stone Energy Corp. *.................. 28,300 $ 1,439,762
------------
RETAIL -- FOOD & DRUG -- 1.3%
Drugstore.com, Inc. *................. 7,600 275,500
Wild Oats Markets, Inc. *............. 21,400 845,300
------------
1,120,800
------------
RETAIL -- SPECIALTY -- 5.7%
AnnTaylor Stores Corp. *.............. 21,150 864,506
Cost Plus, Inc. *..................... 32,850 1,593,225
Linens 'n Things, Inc. *.............. 20,000 675,000
Pacific Sunwear of California *....... 64,050 1,795,402
------------
4,928,133
------------
TELECOMMUNICATIONS -- 3.0%
CapRock Communications Corp. *........ 33,000 767,250
ITC DeltaCom, Inc. *.................. 47,200 1,298,000
Metromedia Fiber Network, Inc.
Class A *........................... 22,800 558,600
------------
2,623,850
------------
TOTAL COMMON STOCKS
(Identified Cost $60,395,561)....... 83,109,811
------------
<CAPTION>
FACE
AMOUNT
<S> <C> <C>
- ------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 7.4% OF NET ASSETS
Repurchase Agreement with State Street
Bank and Trust Co., dated 9/30/99 at
4.250% to be repurchased at
$6,429,759 on 10/01/99
collateralized by $5,180,000 U.S.
Treasury Bond, 8.875% due 2/15/19
with a value of $6,559,983.......... $6,429,000 6,429,000
------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $6,429,000)........ 6,429,000
------------
TOTAL INVESTMENTS -- 102.7%
(IDENTIFIED COST $66,824,561) @....... 89,538,811
LIABILITIES, LESS CASH AND OTHER
ASSETS -- (2.7%).................... (2,374,076)
------------
NET ASSETS -- 100%...................... $ 87,164,735
============
</TABLE>
! See Note 1.
* Non-income producing security.
@ At September 30, 1999, the net unrealized appreciation on investments based
on cost of $66,854,974 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there
is an excess of value over tax cost and aggregate gross unrealized
depreciation for all securities in which there is an excess of tax cost
over value were $24,181,823 and $1,497,986, respectively, resulting in net
unrealized appreciation of $22,683,837.
See accompanying notes to financial statements.
44
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- --------------------------------------------------------------------
COMMON STOCKS -- 92.5% OF NET ASSETS
ADVERTISING -- 1.6%
ADVO, Inc. *.......................... 91,100 $ 1,816,306
R.H. Donnelley Corp................... 222,400 4,142,200
-------------
5,958,506
-------------
AEROSPACE/DEFENSE -- 3.0%
AAR Corp.............................. 64,800 1,166,400
Alliant Techsystems, Inc. *........... 33,900 2,349,694
Gencorp, Inc.......................... 69,500 1,272,719
Newport News Shipbuilding, Inc........ 92,600 2,992,137
Nichols Research Corp. *.............. 31,050 826,706
Orbital Sciences Corp. *.............. 99,900 1,748,250
REMEC, Inc. *......................... 93,700 1,288,375
-------------
11,644,281
-------------
AIRLINES -- 0.7%
COMAIR Holdings, Inc.................. 159,300 2,658,319
-------------
AUTO & RELATED -- 0.7%
SPX Corp. *........................... 18,500 1,678,875
Tower Automotive, Inc. *.............. 50,200 994,588
-------------
2,673,463
-------------
BANKS/SAVINGS & LOANS -- 4.4%
Chittenden Corp....................... 44,200 1,259,700
City National Corp.................... 64,200 2,154,713
Colonial BancGroup, Inc............... 109,600 1,226,150
Commerce Bancorp, Inc................. 39,000 1,618,500
Commercial Federal Corp............... 131,650 2,583,631
FirstMerit Corp....................... 78,600 1,994,475
Hudson United Bancorp................. 110,600 3,407,862
Local Financial Corp. *............... 97,500 901,875
Staten Island Bancorp, Inc............ 84,700 1,593,419
-------------
16,740,325
-------------
BEVERAGES -- 1.1%
Pepsi Bottling Group, Inc............. 135,400 2,310,263
Whitman Corp.......................... 124,200 1,769,850
-------------
4,080,113
-------------
BUSINESS SERVICES -- 4.0%
ACNielson Corp. *..................... 131,700 2,987,944
Burns International Services Corp.
*................................... 78,400 1,264,200
Deluxe Corp........................... 104,200 3,542,800
Harte-Hanks, Inc...................... 95,700 2,410,444
Manpower, Inc......................... 71,900 2,094,087
National Data Corp.................... 52,200 1,357,200
USWeb Corp. *......................... 44,700 1,533,769
-------------
15,190,444
-------------
</TABLE>
45
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- --------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
CHEMICALS -- SPECIALTY -- 4.6%
Cuno, Inc. *.......................... 80,900 $ 1,607,887
Cytec Industries, Inc. *.............. 103,200 2,476,800
Dexter Corp........................... 86,100 3,212,606
Ferro Corp............................ 93,700 1,996,981
Great Lakes Chemical Corp............. 41,100 1,564,369
Minerals Technologies, Inc............ 14,600 709,013
OM Group, Inc......................... 79,000 3,031,625
Scotts Co. *.......................... 38,200 1,322,675
Solutia, Inc.......................... 90,200 1,612,325
-------------
17,534,281
-------------
COMMERCIAL SERVICES -- 1.8%
Nielsen Media Research, Inc. *........ 32,600 1,212,312
Sodexho Marriott Services, Inc. *..... 107,000 1,819,000
Viad Corp............................. 124,900 3,684,550
-------------
6,715,862
-------------
COMMUNICATIONS EQUIPMENT -- 2.7%
Inter-Tel, Inc........................ 121,200 2,151,300
P-Com, Inc. *......................... 341,700 2,391,900
PairGain Technologies, Inc. *......... 300,200 3,827,550
Tekelec *............................. 135,400 1,870,212
-------------
10,240,962
-------------
COMPUTER HARDWARE -- 0.5%
Hutchinson Technology, Inc. *......... 67,000 1,809,000
-------------
COMPUTER SOFTWARE & SERVICES -- 2.6%
Acclaim Entertainment, Inc. *......... 241,900 1,836,928
Complete Business Solutions, Inc. *... 50,800 695,325
Filenet Corp. *....................... 81,200 867,825
Informix Corp. *...................... 270,700 2,148,682
J.D. Edwards & Co. *.................. 47,800 990,356
NOVA Corp. *.......................... 128,100 3,202,500
Visio Corp. *......................... 3,500 137,375
-------------
9,878,991
-------------
DATA PROCESSING SERVICES -- 0.6%
Information Resources, Inc. *......... 201,400 2,227,988
-------------
EDUCATION -- 0.5%
ITT Educational Services, Inc. *...... 92,000 1,794,000
-------------
ELECTRICAL EQUIPMENT -- 1.0%
Hadco Corp. *......................... 60,300 2,607,975
Maxwell Technologies, Inc. *.......... 92,600 1,215,375
-------------
3,823,350
-------------
ELECTRONICS -- 5.2%
Actel Corp. *......................... 128,900 2,449,100
American Xtal Technology, Inc. *...... 53,900 1,152,112
</TABLE>
46
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- --------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
ELECTRONICS -- CONTINUED
Atmel Corp. *......................... 10,000 $ 338,125
C-Cube Microsystems, Inc. *........... 51,500 2,240,250
International Rectifier Corp. *....... 149,000 2,272,250
Litton Industries, Inc. *............. 56,500 3,093,375
Photronics, Inc. *.................... 40,600 910,963
SCI Systems, Inc. *................... 58,100 2,581,819
Tektronix, Inc........................ 59,700 1,999,950
Veeco Instruments, Inc. *............. 36,600 1,024,800
Vishay Intertechnology, Inc. *........ 71,050 1,687,437
-------------
19,750,181
-------------
ENVIRONMENTAL SERVICES -- 1.5%
American States Water Co.............. 64,500 2,136,563
Navigant Consulting Co. *............. 40,000 1,855,000
Tetra Tech, Inc. *.................... 113,250 1,889,859
-------------
5,881,422
-------------
FINANCIAL SERVICES -- 2.7%
Anthracite Mortgage Capital, Inc...... 214,000 1,471,250
Community First Bankshares, Inc....... 74,300 1,253,812
DVI, Inc. *........................... 73,900 1,210,113
Federated Investors, Inc. Class B..... 198,100 3,417,225
Imperial Credit Industries, Inc. *.... 415,700 1,818,687
UniCapital Corp. *.................... 343,300 1,094,269
-------------
10,265,356
-------------
FOOD -- 1.2%
Earthgrains Co........................ 84,200 1,862,925
SUPERVALU, Inc........................ 25,800 562,762
U.S. Foodservice *.................... 127,200 2,289,600
-------------
4,715,287
-------------
FOOD -- PACKAGED & MISCELLANEOUS -- 2.8%
Corn Products International, Inc...... 55,900 1,701,456
International Multifoods Corp......... 178,700 4,110,100
Michael Foods, Inc.................... 187,600 4,930,363
-------------
10,741,919
-------------
FOREST & PAPER PRODUCTS -- 1.1%
Chesapeake Corp....................... 75,300 2,277,825
Consolidated Papers, Inc.............. 65,600 1,763,000
-------------
4,040,825
-------------
FREIGHT TRANSPORTATION -- 0.9%
CNF Transportation, Inc............... 61,400 2,287,150
Wisconsin Central Transportation Corp.
*................................... 86,200 1,179,863
-------------
3,467,013
-------------
</TABLE>
47
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- --------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
HEALTH CARE -- BIOTECHNOLOGY -- 1.1%
Medicis Pharmaceutical Corp. Class A
*................................... 108,400 $ 3,089,400
Techne Corp. *........................ 40,100 1,258,137
-------------
4,347,537
-------------
HEALTH CARE -- DRUGS -- 0.5%
Biovail Corp. International *......... 22,300 1,131,725
Dura Pharmaceuticals, Inc. *.......... 59,500 829,281
-------------
1,961,006
-------------
HEALTH CARE -- MEDICAL TECHNOLOGY --
3.5%
Beckman Coulter, Inc.................. 40,700 1,836,588
Conmed Corp. *........................ 135,575 3,321,587
Dentsply International, Inc........... 48,300 1,098,825
EndoSonics Corp. *.................... 220,100 1,870,850
Respironics, Inc. *................... 200,900 1,657,425
Theragenics Corp. *................... 88,700 1,130,925
Varian Medical Systems, Inc........... 112,800 2,467,500
-------------
13,383,700
-------------
HEALTH CARE -- SERVICES -- 2.7%
Alterra Healthcare Corp. *............ 31,700 281,338
Beverly Enterprises, Inc. *........... 157,200 668,100
Capital Senior Living Communities LP
*................................... 131,200 992,200
First Health Group Corp. *............ 63,900 1,433,756
Foundation Health Systems, Inc. *..... 78,600 741,787
Lincare Holdings, Inc. *.............. 77,100 2,055,197
Per-Se Technologies, Inc. *........... 371,300 1,276,344
Trigon Healthcare, Inc. *............. 102,400 2,956,800
-------------
10,405,522
-------------
HOME PRODUCTS -- 1.0%
Furniture Brands International, Inc.
*................................... 47,600 937,125
Premark International, Inc............ 56,000 2,828,000
-------------
3,765,125
-------------
HOUSING & BUILDING MATERIALS -- 1.0%
Giant Cement Holding, Inc. *.......... 105,400 2,417,613
Southdown, Inc........................ 24,900 1,332,150
-------------
3,749,763
-------------
INSURANCE -- 5.2%
AmerUs Life Holdings, Inc............. 67,900 1,438,631
Annuity and Life Re (Holdings) Ltd.... 50,000 1,243,750
Arthur J. Gallagher & Co.............. 45,800 2,438,850
CNA Surety Corp....................... 167,500 2,198,437
HCC Insurance Holdings, Inc........... 134,300 2,257,919
Liberty Financial Companies, Inc...... 56,800 1,246,050
Protective Life Corp.................. 69,100 2,003,900
Radian Group, Inc..................... 42,400 1,820,550
</TABLE>
48
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- --------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
INSURANCE -- CONTINUED
Reinsurance Group of America, Inc..... 94,100 $ 2,417,194
StanCorp Financial Group, Inc......... 127,800 2,859,525
-------------
19,924,806
-------------
LODGING & HOTEL -- 0.4%
MeriStar Hospitality Corp............. 110,127 1,679,437
-------------
MACHINERY -- 0.6%
Milacron Inc.......................... 120,700 2,142,425
-------------
MANUFACTURING -- 6.2%
A.O. Smith Corp....................... 104,400 3,158,100
Carlisle Cos., Inc.................... 48,500 1,915,750
Cordant Technologies, Inc............. 69,600 2,118,450
Crane Co.............................. 53,100 1,191,431
Diebold, Inc.......................... 53,700 1,241,813
Federal Signal Corp................... 140,900 2,800,388
Harman International
Industries, Inc..................... 76,800 3,230,400
National Service Industries, Inc...... 57,700 1,817,550
Pentair, Inc.......................... 71,700 2,876,962
Regal-Beloit Corp..................... 75,100 1,558,325
UNOVA, Inc. *......................... 138,800 1,856,450
-------------
23,765,619
-------------
METALS -- 0.9%
Bethlehem Steel Corp. *............... 140,200 1,033,975
Worthington Industries, Inc........... 153,400 2,607,800
-------------
3,641,775
-------------
METALS & MINING -- 0.2%
Harsco Corp........................... 29,000 801,125
-------------
NATURAL GAS -- 1.4%
MCN Energy Group, Inc................. 178,100 3,061,094
Public Service Company of North
Carolina, Inc....................... 80,800 2,504,800
-------------
5,565,894
-------------
OFFICE EQUIPMENT -- 1.9%
Daisytek International Corp. *........ 186,400 2,621,250
HON Industries, Inc................... 70,800 1,362,900
National Computer Systems, Inc........ 43,700 1,675,622
United Stationers, Inc. *............. 73,200 1,560,075
-------------
7,219,847
-------------
OIL & GAS DRILLING EQUIPMENT -- 2.6%
Global Industries Ltd. *.............. 209,400 1,701,375
Maverick Tube Corp. *................. 103,400 1,719,025
Patterson Energy, Inc. *.............. 179,000 2,718,563
Santa Fe International Corp........... 97,700 2,106,656
Tidewater, Inc........................ 72,100 1,838,550
-------------
10,084,169
-------------
</TABLE>
49
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- --------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
OIL & GAS EXPLORATION -- 1.4%
Newfield Exploration Co. *............ 99,300 $ 3,270,694
Plains Resources, Inc. *.............. 112,900 2,018,087
-------------
5,288,781
-------------
OIL & GAS REFINING -- 0.5%
Valero Energy Corp.................... 92,400 1,778,700
-------------
PHOTOGRAPHY -- 0.3%
Polaroid Corp......................... 45,000 1,170,000
-------------
REAL ESTATE INVESTMENT TRUSTS -- 4.6%
Brandywine Realty Corp................ 122,600 1,992,250
Capital Automotive.................... 230,800 2,856,150
Healthcare Realty Trust, Inc.......... 170,426 3,184,836
Liberty Property Trust................ 177,000 4,015,687
Pacific Gulf Properties, Inc.......... 104,700 2,087,456
Sun Communities, Inc.................. 105,000 3,471,563
-------------
17,607,942
-------------
REFRIGERATION SYSTEMS -- 0.7%
Hussmann International, Inc........... 155,400 2,641,800
-------------
RESTAURANTS -- 2.0%
CEC Entertainment, Inc. *............. 95,500 3,426,062
Ruby Tuesday, Inc..................... 146,100 2,848,950
Wendy's International, Inc............ 56,400 1,487,550
-------------
7,762,562
-------------
RETAIL -- FOOD & DRUG -- 0.6%
Great Atlantic & Pacific Tea
Company, Inc........................ 14,600 442,562
Hannaford Brothers Co................. 28,900 2,035,644
-------------
2,478,206
-------------
RETAIL -- GENERAL -- 1.8%
Consolidated Stores Corp. *........... 133,600 2,947,550
Michaels Stores, Inc. *............... 44,600 1,315,700
Saks, Inc. *.......................... 73,100 1,110,206
ShopNow.com, Inc. *................... 117,800 1,369,425
-------------
6,742,881
-------------
RETAIL -- SPECIALTY -- 2.3%
Burlington Coat Factory Warehouse
Corp................................ 189,900 3,750,525
Charming Shoppes, Inc. *.............. 154,800 793,350
CompUSA, Inc. *....................... 130,700 800,537
Jostens, Inc.......................... 127,000 2,428,875
The Wet Seal, Inc. Class A *.......... 52,800 874,500
-------------
8,647,787
-------------
TELECOMMUNICATIONS -- 0.2%
Transaction Network Services, Inc.
*................................... 24,100 945,925
-------------
</TABLE>
50
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- --------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
TEXTILE & APPAREL -- 1.5%
Burlington Industries, Inc. *......... 285,300 $ 1,266,019
Liz Claiborne, Inc.................... 93,700 2,904,700
Springs Industries, Inc............... 42,800 1,452,525
-------------
5,623,244
-------------
UTILITIES -- 1.8%
New Jersey Resources Corp............. 30,600 1,224,000
NSTAR *............................... 60,300 2,336,625
RGS Energy Group, Inc................. 71,400 1,749,300
Washington Gas Light Co............... 58,300 1,581,387
-------------
6,891,312
-------------
WASTE MANAGEMENT -- 0.4%
Safety-Kleen Corp. *.................. 115,000 1,387,188
-------------
TOTAL COMMON STOCKS
(Identified Cost $364,220,641)...... 353,235,966
-------------
<CAPTION>
FACE
AMOUNT
<S> <C> <C>
- --------------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 9.8% OF NET ASSETS
Associates Corp. of North America,
5.480%, 10/01/99.................... $19,040,265 19,040,265
Chevron USA Inc., 5.300%, 10/01/99.... 18,300,000 18,300,000
-------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $37,340,265)....... 37,340,265
-------------
TOTAL INVESTMENTS -- 102.3%
(IDENTIFIED COST $401,560,906) @...... 390,576,231
Liabilities, Less Cash and Other
Assets -- (2.3%).................... (8,914,296)
-------------
NET ASSETS -- 100%.................... $ 381,661,935
=============
</TABLE>
! See Note 1.
* Non-income producing security.
@ At September 30, 1999, the net unrealized depreciation on investments based
on cost of $401,259,232 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there
is an excess of value over tax cost and aggregate gross unrealized
depreciation for all securities in which there is an excess of tax cost
over value were $29,568,516 and $40,251,517, respectively, resulting in net
unrealized depreciation of $10,683,001.
See accompanying notes to financial statements.
51
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE !
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
BONDS AND NOTES -- 46.3% OF NET ASSETS
ARGENTINA -- 3.0%
Republic of Argentina, 6.000%,
3/31/23........................ USD 300,000 $ 193,890
-----------
AUSTRALIA -- 1.9%
Queensland Treasury, 8.000%,
9/14/07........................ AUD 100,000 71,177
South Australia Government
Finance Authority, Zero Coupon
Bond, 12/21/15................. 220,000 46,905
-----------
118,082
-----------
PERU -- 0.4%
Republic of Peru, 3.750%, 3/07/17
(step to 4.000% on
3/07/01) #..................... USD 50,000 26,940
-----------
PHILIPPINES -- 3.7%
FLI Capital Cayman, 6.250%,
2/01/02 +...................... 150,000 157,500
MBIA, Inc., Zero Coupon Bond,
12/18/01 +..................... 100,000 81,375
-----------
238,875
-----------
SOUTH KOREA -- 2.5%
Samsung Electronics Co. Ltd.,
Zero Coupon Bond, 12/31/07 +... 75,000 94,313
Ssangyong Oil Refining
Co., Inc., 3.000%, 12/31/04
+.............................. 100,000 66,500
-----------
160,813
-----------
THAILAND -- 4.8%
Bangkok Bank Public Co. Ltd.,
4.589%, 3/03/04 +.............. 400,000 186,000
Loxley Public Co. Ltd., 2.500%,
4/04/01 + ^.................... 450,000 121,500
-----------
307,500
-----------
UNITED KINGDOM -- 1.0%
Dolphin Telecom Plc, Zero Coupon
Bond, 6/01/08 (step to 11.625%
on 6/01/03) #.................. EUR 135,000 61,124
-----------
UNITED STATES -- 29.0%
Apple Computer, Inc., 6.500%,
2/15/04........................ USD 250,000 233,750
Baker Hughes, Inc., Zero Coupon
Bond, 5/05/08 +................ 100,000 72,500
Boston Celtics Ltd., 6.000%,
6/30/38........................ 40,000 23,900
Boston Chicken, Inc., 4.500%,
2/01/04 + ^.................... 125,000 1,250
Builders Transportation, Inc.,
8.000%, 8/15/05 + ^............ 95,000 119
Chesapeake Energy Corp. Series B,
7.875%, 3/15/04................ 100,000 88,000
CML Group, Inc., 5.500%, 1/15/03
+ ^............................ 150,000 188
Columbia/HCA Healthcare Corp.,
7.050%, 12/01/27............... 50,000 37,500
Columbia/HCA Healthcare Corp.,
7.190%, 11/15/15............... 50,000 39,500
Dillon Read Structured Finance
Corp. Series A, 6.660%,
8/15/10........................ 155,224 143,986
Dura Pharmaceuticals, Inc.,
3.500%, 7/15/02 +.............. 100,000 76,875
Exide Corp., 2.900%, 12/15/05
144A +......................... 125,000 72,812
Fox Family Worldwide, Inc., Zero
Coupon Bond, 11/01/07 (step to
10.250% on 11/01/02) #......... 150,000 96,750
Hyperion
Telecommunications, Inc. Series
B, Zero Coupon Bond, 4/15/03
(step to 13.000% on 4/15/01)
#.............................. 150,000 126,000
Kent Electronics Corp., 4.500%,
9/01/04 +...................... 50,000 40,750
Lam Research Corp., 5.000%,
9/01/02 +...................... 150,000 149,625
</TABLE>
52
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE !
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS AND NOTES -- CONTINUED
UNITED STATES -- CONTINUED
Loews Corp., 3.125%, 9/15/07 +... USD 150,000 $ 128,250
Pioneer Natural Resources Co.,
7.200%, 1/15/28................ 175,000 132,771
R & B Falcon Corp. Series B,
7.375%, 4/15/18................ 75,000 57,375
RCN Corp., Zero Coupon Bond,
10/15/07 (step to 11.125% on
10/15/02) #.................... 175,000 112,875
Thermedics, Inc., Zero Coupon
Bond, 6/01/03 +................ 100,000 67,500
Thermo Electron Corp., 4.250%,
1/01/03 144A +................. 50,000 42,687
Woolworth Corp., 8.500%,
1/15/22........................ 150,000 100,500
-----------
1,845,463
-----------
TOTAL BONDS AND NOTES
(Identified Cost $3,322,458)... 2,952,687
-----------
<CAPTION>
SHARES
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
COMMON STOCKS -- 46.6% OF NET ASSETS
AUSTRALIA -- 0.5%
Lihir Gold Ltd. *................ 29,000 31,814
-----------
CANADA -- 1.2%
Talisman Energy, Inc. *.......... 2,600 77,423
-----------
FINLAND -- 3.1%
Nokia Oyj........................ 1,200 107,515
Stora Enso Oyj................... 7,000 92,845
-----------
200,360
-----------
FRANCE -- 2.1%
St. Gobain....................... 700 130,505
-----------
HONG KONG -- 3.0%
Dah Sing Financial Group......... 22,400 89,683
Pacific Century CyberWorks Ltd.
*.............................. 121,000 102,030
-----------
191,713
-----------
HUNGARY -- 1.5%
MATAV RT ADR..................... 17,000 93,444
-----------
IRELAND -- 1.9%
Trintech Group Plc ADR *......... 9,000 118,125
-----------
ISRAEL -- 1.4%
Internet Gold *.................. 10,700 89,613
-----------
JAPAN -- 7.4%
Fujitsu Ltd...................... 3,000 93,552
Orix Corp........................ 800 98,361
Sakura Bank Ltd.................. 5,100 38,322
Softbank Corp.................... 300 114,122
</TABLE>
53
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS -- CONTINUED
JAPAN -- CONTINUED
Zuken, Inc....................... 3,300 $ 126,774
-----------
471,131
-----------
NETHERLANDS -- 3.2%
STMicroelectronics NV............ 1,500 111,000
United Pan-Europe Communications
NV *........................... 1,500 92,685
-----------
203,685
-----------
NORWAY -- 1.5%
Petroleum Geo-Services ADR *..... 5,000 95,313
-----------
SINGAPORE -- 1.2%
Natsteel Electronics Ltd......... 20,000 74,750
-----------
SPAIN -- 1.8%
Sogecable SA *................... 4,200 114,681
-----------
UNITED KINGDOM -- 3.8%
Billiton Plc..................... 24,000 100,741
Colt Telecom Group Plc *......... 6,000 142,717
-----------
243,458
-----------
UNITED STATES -- 13.0%
Abbott Laboratories.............. 650 23,888
Alcoa, Inc....................... 500 31,031
American International
Group, Inc..................... 325 28,255
Analog Devices, Inc. *........... 500 25,625
Baker Hughes, Inc................ 850 24,650
Bell Atlantic Corp............... 500 33,656
BellSouth Corp................... 600 27,000
Bristol Myers Squibb Co.......... 500 33,750
Caterpillar, Inc................. 500 27,406
Circuit City Stores - Circuit
City Group..................... 700 29,531
Cisco Systems, Inc. *............ 400 27,425
Compaq Computer Corp............. 1,000 22,938
Guidant Corp..................... 600 32,175
Ingersoll-Rand Co................ 400 21,975
International Business Machines
Corp........................... 270 32,771
McDonald's Corp.................. 700 30,100
Meritor Automotive, Inc.......... 1 21
Minnesota Mining & Manufacturing
Co............................. 300 28,819
Monsanto Co...................... 750 26,766
Nabors Industries, Inc. *........ 1,000 25,000
Newmont Mining Corp.............. 1,600 41,400
Oracle Corp. *................... 600 27,300
Schering-Plough Corp............. 800 34,900
Smurfit-Stone Container Corp.
*.............................. 1,400 30,275
Sprint Corp...................... 600 32,550
Staples, Inc. *.................. 1,300 28,356
Teradyne, Inc. *................. 700 24,675
Unocal Corp...................... 700 25,944
W.R. Grace & Co. *............... 1,550 24,897
</TABLE>
54
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE !
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS -- CONTINUED
UNITED STATES -- CONTINUED
Wells Fargo & Co................. 700 $ 27,737
-----------
830,816
-----------
TOTAL COMMON STOCKS
(Identified Cost $2,867,869)... 2,966,831
-----------
PREFERRED STOCKS -- 0.2% OF NET ASSETS
THAILAND -- 0.2%
Siam Commercial Bank Public Co.,
5.25% *........................ 14,000 12,575
-----------
TOTAL PREFERRED STOCKS
(Identified Cost $9,926)....... 12,575
-----------
WARRANTS -- 0.1% OF NET ASSETS
THAILAND -- 0.1%
Siam Commercial Bank Public Co.
Ltd., expiring 5/10/02 *....... 14,000 4,021
-----------
TOTAL WARRANTS
(Identified Cost $0)........... 4,021
-----------
<CAPTION>
FACE
AMOUNT
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 6.5% OF NET ASSETS
Repurchase Agreement with State
Street Bank and Trust Co.,
dated 9/30/99 at 4.250% to be
repurchased at $416,049 on
10/01/99 collateralized by
$340,000 U.S. Treasury Bond,
8.875% due 2/15/19 with a value
of $430,578.................... USD 416,000 416,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $416,000)..... 416,000
-----------
TOTAL INVESTMENTS -- 99.7%
(IDENTIFIED COST $6,616,253) @... 6,352,114
Cash and Other Assets, Less
Liabilities -- 0.3%............ 19,835
-----------
NET ASSETS -- 100%................. $ 6,371,949
===========
</TABLE>
55
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF SEPTEMBER 30, 1999
! See Note 1.
# Step Bond: Coupon is zero or below market rate for an initial period and
then increases at a specified date and rate.
+ Convertible Bond.
^ Security in default.
144A Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
* Non-income producing security.
@ At September 30, 1999, the net unrealized depreciation on investments based
on cost of $6,633,563 for federal income tax purposes was as follows:
Aggregate gross unrealized appreciation for all securities in which there
is an excess of value over tax cost and aggregate gross unrealized
depreciation for all securities in which there is an excess of tax cost
over value were $395,250 and $677,906, respectively, resulting in net
unrealized depreciation of $282,656.
KEY TO ABBREVIATIONS:
<TABLE>
<S> <C>
ADR: American Depositary Receipt
AUD: Australian Dollar
EUR: Euro
USD: United States Dollar
</TABLE>
Ten Largest Sector Holdings at September 30, 1999
as a Percentage of Net Assets
<TABLE>
<S> <C>
Telecommunications 14.6%
Electronics 9.2%
Computer Software & Services 7.5%
Financial Services 5.8%
Oil & Gas 5.5%
Bank & Finance 5.1%
Foreign Government/Agency 4.6%
Retail -- General 3.8%
Computers 3.7%
Broadcasting 3.3%
</TABLE>
See accompanying notes to financial statements.
56
<PAGE>
[This Page Intentionally Left Blank]
57
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- -------------------------------------------------------
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
AGGRESSIVE
GROWTH CORE GROWTH
FUND VALUE FUND FUND
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Investments at value... $14,304,831 $67,966,494 $28,835,181
Repurchase agreement at
value................ 381,000 0 0
Cash................... 721 69,903 78,366
Foreign currency at
value................ 0 0 0
Receivable for:
Fund shares sold..... 13,642 0 606
Securities sold...... 0 497,660 52,595
Dividends and
interest........... 843 144,230 10,758
Foreign tax
reclaim............ 0 0 0
Due from the adviser
(Note 3)............. 10,392 1,581 11,018
Other assets
(Note 1H)............ 0 0 0
----------- ----------- -----------
14,711,429 68,679,868 28,988,524
----------- ----------- -----------
LIABILITIES
Payable for:
Securities
purchased.......... 181,456 1,253,778 40,625
Fund shares
redeemed........... 0 8,353 0
Foreign taxes........ 0 0 0
Payable to custodian
bank............... 0 0 0
Accrued expenses:
Management fees
(Note 3)........... 8,966 29,274 12,154
Trustees' fees
(Note 3A).......... 1,252 1,255 1,252
Administrative
fees............... 504 3,388 1,701
Other (Note 1)......... 35,543 53,298 49,066
----------- ----------- -----------
227,721 1,349,346 104,798
----------- ----------- -----------
NET ASSETS............... $14,483,708 $67,330,522 $28,883,726
=========== =========== ===========
Net Assets consist of:
Capital paid in...... $10,763,219 $56,850,564 $22,922,606
Undistributed (or
Distribution in
excess of) net
investment
income............. 0 632,576 0
Accumulated net
realized gain
(loss)............. 845,573 7,319,786 2,665,864
Unrealized
appreciation
(depreciation) on:
Investments *...... 2,874,916 2,527,596 3,295,256
Foreign currency
translations..... 0 0 0
----------- ----------- -----------
NET ASSETS............... $14,483,708 $67,330,522 $28,883,726
=========== =========== ===========
INSTITUTIONAL CLASS:
Net assets............. $13,308,307 $66,725,781 $28,234,625
Shares of beneficial
interest outstanding,
no par value......... 662,718 4,033,770 2,528,260
Net asset value and
redemption price per
Institutional
share................ $ 20.08 $ 16.54 $ 11.17
RETAIL CLASS:
Net assets............. $ 1,175,401 $ 604,741 $ 649,101
Shares of beneficial
interest outstanding,
no par value......... 58,804 36,695 58,683
Net asset value and
redemption price per
Retail share......... $ 19.99 $ 16.48 $ 11.06
ADMIN CLASS:
Net assets............. -- -- --
Shares of beneficial
interest outstanding,
no par value......... -- -- --
Net asset value and
redemption price per
Admin Share.......... -- -- --
Identified cost of
investments............ $11,810,915 $65,438,898 $25,539,925
=========== =========== ===========
</TABLE>
* Net of capital gain withholding taxes of $10,962 and $1,207 for the
International Equity and Worldwide Funds, respectively.
See accompanying notes to financial
statements.
58
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
- -------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP SMALL CAP SMALL CAP
INTERNATIONAL VALUE GROWTH VALUE WORLDWIDE
EQUITY FUND FUND FUND FUND FUND
-------------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at value... $76,616,952 $4,771,417 $83,109,811 $390,576,231 $5,936,114
Repurchase agreement at
value................ 0 713,000 6,429,000 0 416,000
Cash................... 0 544 826 0 828
Foreign currency at
value................ 964,514 0 0 0 0
Receivable for:
Fund shares sold..... 6,405 0 27,202 731,179 0
Securities sold...... 3,242,954 270,448 394,969 5,350,779 145,893
Dividends and
interest........... 101,634 4,078 759 475,294 41,551
Foreign tax
reclaim............ 75,541 0 0 0 1,510
Due from the adviser
(Note 3)............. 7,706 11,452 3,325 0 14,191
Other assets
(Note 1H)............ 0 0 0 0 1,439
----------- ---------- ----------- ------------ ----------
81,015,706 5,770,939 89,965,892 397,133,483 6,557,526
----------- ---------- ----------- ------------ ----------
LIABILITIES
Payable for:
Securities
purchased.......... 472,141 440,311 2,704,106 11,642,345 137,563
Fund shares
redeemed........... 0 34 757 3,404,914 0
Foreign taxes........ 20,343 0 0 0 1,460
Payable to custodian
bank............... 737,556 0 0 0 0
Accrued expenses:
Management fees
(Note 3)........... 48,523 3,412 50,455 243,616 3,985
Trustees' fees
(Note 3A).......... 1,255 1,252 1,252 1,252 1,255
Administrative
fees............... 3,238 398 3,162 14,311 612
Other (Note 1)......... 56,132 33,141 41,425 165,110 40,702
----------- ---------- ----------- ------------ ----------
1,339,188 478,548 2,801,157 15,471,548 185,577
----------- ---------- ----------- ------------ ----------
NET ASSETS............... $79,676,518 $5,292,391 $87,164,735 $381,661,935 $6,371,949
=========== ========== =========== ============ ==========
Net Assets consist of:
Capital paid in...... $64,868,037 $5,259,039 $66,569,199 $383,554,436 $6,220,073
Undistributed (or
Distribution in
excess of) net
investment
income............. 376,798 12,079 0 3,255,170 215,169
Accumulated net
realized gain
(loss)............. 3,854,133 120,265 (2,118,714) 5,837,004 202,022
Unrealized
appreciation
(depreciation) on:
Investments *...... 10,568,755 (98,992) 22,714,250 (10,984,675) (265,346)
Foreign currency
translations..... 8,795 0 0 0 31
----------- ---------- ----------- ------------ ----------
NET ASSETS............... $79,676,518 $5,292,391 $87,164,735 $381,661,935 $6,371,949
=========== ========== =========== ============ ==========
INSTITUTIONAL CLASS:
Net assets............. $79,415,457 $5,061,711 $81,132,316 $301,496,401 $6,233,499
Shares of beneficial
interest outstanding,
no par value......... 5,757,587 460,615 4,845,213 17,399,749 606,173
Net asset value and
redemption price per
Institutional
share................ $ 13.79 $ 10.99 $ 16.74 $ 17.33 $ 10.28
RETAIL CLASS:
Net assets............. $ 261,061 $ 230,680 $ 6,032,419 $ 75,302,177 $ 138,450
Shares of beneficial
interest outstanding,
no par value......... 19,020 21,050 362,396 4,357,026 13,513
Net asset value and
redemption price per
Retail share......... $ 13.73 $ 10.96 $ 16.65 $ 17.28 $ 10.25
ADMIN CLASS:
Net assets............. -- -- -- $ 4,863,357 --
Shares of beneficial
interest outstanding,
no par value......... -- -- -- 282,029 --
Net asset value and
redemption price per
Admin Share.......... -- -- -- $ 17.24 --
Identified cost of
investments............ $66,037,235 $5,583,409 $66,824,561 $401,560,906 $6,616,253
=========== ========== =========== ============ ==========
</TABLE>
* Net of capital gain withholding taxes of $10,962 and $1,207 for the
International Equity and Worldwide Funds, respectively.
See accompanying notes to
financial statements.
59
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- -------------------------------------------------------
FOR THE YEAR ENDED SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
AGGRESSIVE CORE
GROWTH VALUE GROWTH
FUND FUND FUND
---------- ---------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends*............. $ 15,475 $1,422,616 $ 92,783
Interest............... 14,581 82,717 32,958
---------- ---------- ----------
30,056 1,505,333 125,741
---------- ---------- ----------
Expenses
Management fees
(Note 3)........... 51,041 380,288 139,736
12b-1 fees (Retail
Class)............. 750 2,096 1,553
12b-1 fees (Admin
Class)............. 0 0 0
Trustees' fees and
expenses
(Note 3A).......... 4,464 4,464 4,464
Administrative
fees............... 7,587 38,735 17,695
Custodian and
accounting fees.... 59,093 65,150 60,138
Transfer Agent fees
(Institutional
Class) (Note 1).... 20,291 34,346 28,472
Transfer Agent fees
(Retail Class)
(Note 1)........... 18,904 19,848 19,266
Transfer Agent fees
(Admin Class)...... 0 0 0
Audit and tax
services fees...... 29,604 31,144 34,158
Registration fees.... 17,430 22,758 23,428
Amortization of
organization
expenses
(Note 1H):
Institutional
Class............ 0 0 0
Other expenses....... 10,702 17,246 20,891
---------- ---------- ----------
Total expenses....... 219,866 616,075 349,801
Less expenses waived
and reimbursed by
the investment
adviser
(Note 3)........... (151,062) (18,860) (110,695)
---------- ---------- ----------
Net expenses......... 68,804 597,215 239,106
---------- ---------- ----------
Net investment income
(loss)............... (38,748) 908,118 (113,365)
---------- ---------- ----------
NET REALIZED GAIN (LOSS)
ON:
Investments**.......... 888,317 7,604,974 4,039,815
Foreign currency
transactions......... 0 0 0
---------- ---------- ----------
Total net realized gain
(loss)............... 888,317 7,604,974 4,039,815
---------- ---------- ----------
CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) ON:
Investments ***........ 2,978,084 (989,371) 3,171,041
Foreign currency
translations......... 0 0 0
---------- ---------- ----------
Total net change in
unrealized
appreciation
(depreciation)....... 2,978,084 (989,371) 3,171,041
---------- ---------- ----------
Total net realized gain
(loss) and change in
unrealized
appreciation
(depreciation)....... 3,866,401 6,615,603 7,210,856
---------- ---------- ----------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
OPERATIONS............. $3,827,653 $7,523,721 $7,097,491
========== ========== ==========
</TABLE>
* Net of foreign withholding taxes of $7,160, $158,305, $241 and $5,387 for
the Core Value, International Equity, Mid-Cap Value and the Worldwide
Funds, respectively.
** Net of capital gain withholding taxes of $51,814 and $7,534 for the
International Equity and Worldwide Funds, respectively.
*** Net of capital gain withholding taxes of $10,962 and $1,207 for the
International Equity and Worldwide Funds, respectively.
See accompanying notes to financial
statements.
60
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
- -------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL MID-CAP SMALL CAP SMALL CAP
EQUITY VALUE GROWTH VALUE WORLDWIDE
FUND FUND FUND FUND FUND
-------------- ---------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends*............. $ 1,026,543 $ 48,024 $ 13,606 $ 5,423,996 $ 37,103
Interest............... 80,850 11,032 90,125 1,519,925 326,136
----------- --------- ----------- ----------- ----------
1,107,393 59,056 103,731 6,943,921 363,239
----------- --------- ----------- ----------- ----------
Expenses
Management fees
(Note 3)........... 543,750 34,645 379,428 2,941,342 44,837
12b-1 fees (Retail
Class)............. 440 487 10,019 172,738 282
12b-1 fees (Admin
Class)............. 0 0 0 8,357 0
Trustees' fees and
expenses
(Note 3A).......... 4,464 4,464 4,464 4,464 4,464
Administrative
fees............... 36,888 6,989 26,359 181,567 7,876
Custodian and
accounting fees.... 201,231 59,540 64,624 139,578 66,939
Transfer Agent fees
(Institutional
Class) (Note 1).... 30,292 21,098 22,228 122,207 19,950
Transfer Agent fees
(Retail Class)
(Note 1)........... 19,168 19,002 19,760 59,750 18,988
Transfer Agent fees
(Admin Class)...... 0 0 0 19,669 0
Audit and tax
services fees...... 31,355 29,604 29,604 36,152 29,154
Registration fees.... 20,751 17,310 19,205 30,459 20,842
Amortization of
organization
expenses
(Note 1H):
Institutional
Class............ 0 0 0 0 901
Other expenses....... 16,112 10,900 15,446 53,378 11,218
----------- --------- ----------- ----------- ----------
Total expenses....... 904,451 204,039 591,137 3,769,661 225,451
Less expenses waived
and reimbursed by
the investment
adviser
(Note 3)........... (179,012) (157,358) (75,249) (6,827) (165,386)
----------- --------- ----------- ----------- ----------
Net expenses......... 725,439 46,681 515,888 3,762,834 60,065
----------- --------- ----------- ----------- ----------
Net investment income
(loss)............... 381,954 12,375 (412,157) 3,181,087 303,174
----------- --------- ----------- ----------- ----------
NET REALIZED GAIN (LOSS)
ON:
Investments**.......... 3,807,719 146,067 103,100 19,210,781 258,385
Foreign currency
transactions......... (8,872) 0 0 0 (1,968)
----------- --------- ----------- ----------- ----------
Total net realized gain
(loss)............... 3,798,847 146,067 103,100 19,210,781 256,417
----------- --------- ----------- ----------- ----------
CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) ON:
Investments ***........ 16,040,721 282,048 23,516,010 22,519,267 830,735
Foreign currency
translations......... (558) 0 0 0 39
----------- --------- ----------- ----------- ----------
Total net change in
unrealized
appreciation
(depreciation)....... 16,040,163 282,048 23,516,010 22,519,267 830,774
----------- --------- ----------- ----------- ----------
Total net realized gain
(loss) and change in
unrealized
appreciation
(depreciation)....... 19,839,010 428,115 23,619,110 41,730,048 1,087,191
----------- --------- ----------- ----------- ----------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
OPERATIONS............. $20,220,964 $ 440,490 $23,206,953 $44,911,135 $1,390,365
=========== ========= =========== =========== ==========
</TABLE>
* Net of foreign withholding taxes of $7,160, $158,305, $241 and $5,387 for
the Core Value, International Equity, Mid-Cap Value and the Worldwide
Funds, respectively.
** Net of capital gain withholding taxes of $51,814 and $7,534 for the
International Equity and Worldwide Funds, respectively.
*** Net of capital gain withholding taxes of $10,962 and $1,207 for the
International Equity and Worldwide Funds, respectively.
See accompanying notes to
financial statements.
61
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND
--------------------------------------------------------
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997*
----------------- ----------------- ----------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..... $ (38,748) $ (5,656) $ (6,248)
Net realized gain (loss)......... 888,317 21,939 156,302
Change in unrealized appreciation
(depreciation)................. 2,978,084 (274,944) 171,776
----------- ---------- ----------
Increase (decrease) in net
assets from operations....... 3,827,653 (258,661) 321,830
----------- ---------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
In excess of net investment
income....................... 0 0 (18,310)
Net realized gain on
investments.................. (78,445) 0 (92,139)
RETAIL CLASS
In excess of net investment
income....................... 0 0 (571)
Net realized gain on
investments.................. (3,177) 0 (3,752)
----------- ---------- ----------
(81,622) 0 (114,772)
----------- ---------- ----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... 8,579,807 494,979 1,714,474
----------- ---------- ----------
Total increase (decrease) in net
assets......................... 12,325,838 236,318 1,921,532
NET ASSETS
Beginning of the period.......... 2,157,870 1,921,552 20
----------- ---------- ----------
End of the period................ $14,483,708 $2,157,870 $1,921,552
=========== ========== ==========
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
End of the period................ $ 0 $ 0 $ 0
=========== ========== ==========
</TABLE>
* Commencement of operations, January 2, 1997.
See accompanying notes to financial
statements.
62
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
CORE VALUE FUND
--------------------------------------------------------
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
----------------- ----------------- ----------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..... $ 908,118 $ 718,597 $ 598,356
Net realized gain (loss)......... 7,604,974 6,348,814 6,931,274
Change in unrealized appreciation
(depreciation)................. (989,371) (10,463,537) 5,392,568
----------- ------------ -----------
Increase (decrease) in net
assets from operations....... 7,523,721 (3,396,126) 12,922,198
----------- ------------ -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income.......... (958,125) 0 (590,731)
Net realized gain on
investments.................. (7,219,725) 0 (7,124,536)
RETAIL CLASS
Net investment income.......... (10,283) 0 (10,346)
Net realized gain on
investments.................. (100,943) 0 (138,784)
----------- ------------ -----------
(8,289,076) 0 (7,864,397)
----------- ------------ -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... 153,128 6,711,627 15,853,992
----------- ------------ -----------
Total increase (decrease) in net
assets......................... (612,227) 3,315,501 20,911,793
NET ASSETS
Beginning of the period.......... 67,942,749 64,627,248 43,715,455
----------- ------------ -----------
End of the period................ $67,330,522 $ 67,942,749 $64,627,248
=========== ============ ===========
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
End of the period................ $ 632,576 $ 733,745 $ 15,148
=========== ============ ===========
</TABLE>
See accompanying notes to financial statements.
63
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH FUND
--------------------------------------------------------
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
----------------- ----------------- ----------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..... $ (113,365) $ (74,749) $ (92,402)
Net realized gain (loss)......... 4,039,815 4,122,682 8,211,774
Change in unrealized appreciation
(depreciation)................. 3,171,041 (6,052,994) (649,029)
----------- ----------- -----------
Increase (decrease) in net
assets from operations....... 7,097,491 (2,005,061) 7,470,343
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net realized gain on
investments.................. (6,391,595) 0 (7,950,061)
RETAIL CLASS
Net realized gain on
investments.................. (148,336) 0 (47,193)
----------- ----------- -----------
(6,539,931) 0 (7,997,254)
----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... 3,146,346 (5,158,661) (6,626,458)
----------- ----------- -----------
Total increase (decrease) in net
assets......................... 3,703,906 (7,163,722) (7,153,369)
NET ASSETS
Beginning of the period.......... 25,179,820 32,343,542 39,496,911
----------- ----------- -----------
End of the period................ $28,883,726 $25,179,820 $32,343,542
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
End of the period................ $ 0 $ 0 $ 0
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
64
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
--------------------------------------------------------
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
----------------- ----------------- ----------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..... $ 381,954 $ 898,167 $ 1,058,259
Net realized gain (loss)......... 3,798,847 1,083,037 9,242,680
Change in unrealized appreciation
(depreciation)................. 16,040,163 (5,068,063) (10,490,463)
----------- ------------ ------------
Increase (decrease) in net
assets from operations....... 20,220,964 (3,086,859) (189,524)
----------- ------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income.......... (829,740) 0 (834,647)
Net realized gain on
investments.................. (1,229,014) 0 (10,657,570)
RETAIL CLASS
Net investment income.......... (1,363) 0 (2,582)
Net realized gain on
investments.................. (2,608) 0 (28,988)
----------- ------------ ------------
(2,062,725) 0 (11,523,787)
----------- ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... (7,095,776) (10,720,218) 3,472,008
----------- ------------ ------------
Total increase (decrease) in net
assets......................... 11,062,463 (13,807,077) (8,241,303)
NET ASSETS
Beginning of the period.......... 68,614,055 82,421,132 90,662,435
----------- ------------ ------------
End of the period................ $79,676,518 $ 68,614,055 $ 82,421,132
=========== ============ ============
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
End of the period................ $ 376,798 $ 886,633 $ (213)
=========== ============ ============
</TABLE>
See accompanying notes to financial statements.
65
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP VALUE FUND
--------------------------------------------------------
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997*
----------------- ----------------- ----------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..... $ 12,375 $ 6,467 $ 18,110
Net realized gain (loss)......... 146,067 109,931 261,370
Change in unrealized appreciation
(depreciation)................. 282,048 (649,069) 268,029
---------- ---------- ----------
Increase (decrease) in net
assets from operations....... 440,490 (532,671) 547,509
---------- ---------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income.......... (8,319) 0 (17,197)
In excess of net investment
income....................... 0 0 (23,118)
Net realized gain on
investments.................. (113,579) 0 (264,726)
RETAIL CLASS
Net investment income.......... 0 0 (913)
In excess of net investment
income....................... 0 0 (620)
Net realized gain on
investments.................. (6,713) 0 (12,852)
---------- ---------- ----------
(128,611) 0 (319,426)
---------- ---------- ----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... 1,569,205 39,474 3,676,401
---------- ---------- ----------
Total increase (decrease) in net
assets......................... 1,881,084 (493,197) 3,904,484
NET ASSETS
Beginning of the period.......... 3,411,307 3,904,504 20
---------- ---------- ----------
End of the period................ $5,292,391 $3,411,307 $3,904,504
========== ========== ==========
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
End of the period................ $ 12,079 $ 8,185 $ 854
========== ========== ==========
</TABLE>
* Commencement of operations, January 2, 1997.
See accompanying notes to financial
statements.
66
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP GROWTH FUND
--------------------------------------------------------
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997*
----------------- ----------------- ----------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..... $ (412,157) $ (50,661) $ (23,431)
Net realized gain (loss)......... 103,100 (1,954,465) (38,055)
Change in unrealized appreciation
(depreciation)................. 23,516,010 (1,631,330) 829,570
----------- ----------- ----------
Increase (decrease) in net
assets from operations....... 23,206,953 (3,636,456) 768,084
----------- ----------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
In excess of net investment
income....................... 0 0 (1,797)
In excess of net realized gain
on investments............... 0 0 (176,105)
RETAIL CLASS
In excess of net realized gain
on investments............... 0 0 (53,076)
----------- ----------- ----------
0 0 (230,978)
----------- ----------- ----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... 45,726,592 16,835,145 4,495,375
----------- ----------- ----------
Total increase (decrease) in net
assets......................... 68,933,545 13,198,689 5,032,481
NET ASSETS
Beginning of the period.......... 18,231,190 5,032,501 20
----------- ----------- ----------
End of the period................ $87,164,735 $18,231,190 $5,032,501
=========== =========== ==========
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
End of the period................ $ 0 $ 0 $ 0
=========== =========== ==========
</TABLE>
* Commencement of operations, January 2, 1997.
See accompanying notes to financial
statements.
67
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
--------------------------------------------------------
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
----------------- ----------------- ----------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..... $ 3,181,087 $ 2,662,996 $ 2,025,041
Net realized gain (loss)......... 19,210,781 (13,552,131) 39,443,172
Change in unrealized appreciation
(depreciation)................. 22,519,267 (60,244,726) 4,289,783
------------ ------------ ------------
Increase (decrease) in net
assets from operations....... 44,911,135 (71,133,861) 45,757,996
------------ ------------ ------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income.......... (2,285,967) 0 (1,647,014)
Net realized gain on
investments.................. (2,569,352) 0 (34,182,555)
RETAIL CLASS
Net investment income.......... (290,949) 0 (125,063)
Net realized gain on
investments.................. (520,647) 0 (4,383,758)
ADMIN CLASS
Net investment income.......... (3,054) 0 0
Net realized gain on
investments.................. (14,831) 0 0
------------ ------------ ------------
(5,684,800) 0 (40,338,390)
------------ ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... (8,787,045) 142,826,216 110,485,816
------------ ------------ ------------
Total increase (decrease) in net
assets......................... 30,439,290 71,692,355 115,905,422
NET ASSETS
Beginning of the period.......... 351,222,645 279,530,290 163,624,868
------------ ------------ ------------
End of the period................ $381,661,935 $351,222,645 $279,530,290
============ ============ ============
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
End of the period................ $ 3,255,170 $ 2,737,523 $ 241,190
============ ============ ============
</TABLE>
See accompanying notes to financial statements.
68
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
WORLDWIDE FUND
--------------------------------------------------------
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
----------------- ----------------- ----------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..... $ 303,174 $ 189,348 $ 287,881
Net realized gain (loss)......... 256,417 10,051 532,609
Change in unrealized appreciation
(depreciation)................. 830,774 (818,235) (570,405)
---------- ---------- ----------
Increase (decrease) in net
assets from operations....... 1,390,365 (618,836) 250,085
---------- ---------- ----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income.......... (246,147) 0 (284,030)
Net realized gain on
investments.................. (217,254) 0 (410,676)
RETAIL CLASS
Net investment income.......... (3,706) 0 (811)
Net realized gain on
investments.................. (3,459) 0 (1,202)
---------- ---------- ----------
(470,566) 0 (696,719)
---------- ---------- ----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... 471,820 (17,438) 873,745
---------- ---------- ----------
Total increase (decrease) in net
assets......................... 1,391,619 (636,274) 427,111
NET ASSETS
Beginning of the period.......... 4,980,330 5,616,604 5,189,493
---------- ---------- ----------
End of the period................ $6,371,949 $4,980,330 $5,616,604
========== ========== ==========
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
End of the period................ $ 215,169 $ 176,258 $ (8,240)
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
69
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND
-------------------------
INSTITUTIONAL CLASS
-------------------------
1999* 1998** 1997***
------- ------ --------
<S> <C> <C> <C>
Net asset value,
beginning of period.... $ 10.51 $11.49 $10.00
------- ------ ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... (0.09)(e) (0.03) (0.03)
Net realized and
unrealized gain
(loss) on
investments.......... 10.05 (0.95) 2.26
------- ------ ------
Total from investment
operations......... 9.96 (0.98) 2.23
------- ------ ------
LESS DISTRIBUTIONS --
Distributions in excess
of net investment
income............... 0.00 0.00 (0.12)
Distributions from net
realized capital
gains................ (0.39) 0.00 (0.62)
------- ------ ------
Total
distributions...... (0.39) 0.00 (0.74)
------- ------ ------
Net asset value, end of
period................. $ 20.08 $10.51 $11.49
======= ====== ======
Total return (%)(a)(b)... 97.9 (8.5) 22.7
Net assets, end of period
(000).................. $13,308 $2,073 $1,848
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.00 1.00 1.00
Ratio of net investment
income to average net
assets (%)(c).......... (0.56) (0.35) (0.38)
Portfolio turnover
(%)(a)................. 199 82 174
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 2.96 7.13 9.35
Net investment income
(loss) per share
would have been.... $ (0.42)(e) $(0.50) $(0.60)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of fund operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
70
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND
----------------------------
RETAIL CLASS
----------------------------
1999* 1998** 1997***
------- ------- --------
<S> <C> <C> <C>
Net asset value,
beginning of period.... $10.49 $11.49 $10.00
------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... (0.14)(e) (0.05) (0.06)
Net realized and
unrealized gain
(loss) on
investments.......... 10.03 (0.95) 2.27
------ ------ ------
Total from investment
operations......... 9.89 (1.00) 2.21
------ ------ ------
LESS DISTRIBUTIONS --
Distributions in excess
of net investment
income............... 0.00 0.00 (0.10)
Distributions from net
realized capital
gains................ (0.39) 0.00 (0.62)
------ ------ ------
Total
distributions...... (0.39) 0.00 (0.72)
------ ------ ------
Net asset value, end of
period................. $19.99 $10.49 $11.49
====== ====== ======
Total return (%)(a)(b)... 97.5 (8.7) 22.4
Net assets, end of period
(000).................. $1,175 $ 85 $ 74
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.25 1.25 1.25
Ratio of net investment
income to average net
assets (%)(c).......... (0.80) (0.60) (0.67)
Portfolio turnover
(%)(a)................. 199 82 174
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 9.05 27.97 36.58
Net investment income
(loss) per share
would have been.... $(1.50)(e) $(2.08) $(3.29)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of fund operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
71
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
CORE VALUE FUND
----------------
INSTITUTIONAL
CLASS
----------------
1999* 1998**
------- -------
<S> <C> <C>
Net asset value,
beginning of period.... $ 16.85 $ 17.64
------- -------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.22 0.18
Net realized and
unrealized gain
(loss) on
investments.......... 1.53 (0.97)
------- -------
Total from investment
operations......... 1.75 (0.79)
------- -------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.24) 0.00
Distributions from net
realized capital
gains................ (1.82) 0.00
------- -------
Total
distributions...... (2.06) 0.00
------- -------
Net asset value, end of
period................. $ 16.54 $ 16.85
======= =======
Total return (%)(a)(b)... 10.5 (4.5)
Net assets, end of period
(000).................. $66,726 $66,928
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 0.78 0.79
Ratio of net investment
income to average net
assets (%)(c).......... 1.20 1.36
Portfolio turnover
(%)(a)................. 59 49
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 0.78 0.79
Net investment income
(loss) per share
would have been.... $ 0.22 $ 0.18
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of class operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
72
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
CORE VALUE FUND
------------------------------------------------------------
INSTITUTIONAL CLASS
----------------------------------
FOR THE YEAR ENDED DECEMBER 31, RETAIL CLASS
---------------------------------- ------------------------
1997 1996 1995 1994 1999* 1998** 1997***
------- ------- ------- ------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 15.60 $ 14.57 $ 11.80 $ 12.49 $16.79 $17.62 $15.60
------- ------- ------- ------- ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.18 0.22 0.23 0.15 0.18 0.15(e) 0.15(e)
Net realized and
unrealized gain
(loss) on
investments.......... 4.32 2.83 3.93 (0.26) 1.52 (0.98) 4.30
------- ------- ------- ------- ------ ------ ------
Total from investment
operations......... 4.50 3.05 4.16 (0.11) 1.70 (0.83) 4.45
------- ------- ------- ------- ------ ------ ------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.19) (0.22) (0.23) (0.15) (0.19) 0.00 (0.16)
Distributions from net
realized capital
gains................ (2.27) (1.80) (1.16) (0.43) (1.82) 0.00 (2.27)
------- ------- ------- ------- ------ ------ ------
Total
distributions...... (2.46) (2.02) (1.39) (0.58) (2.01) 0.00 (2.43)
------- ------- ------- ------- ------ ------ ------
Net asset value, end of
period................. $ 17.64 $ 15.60 $ 14.57 $ 11.80 $16.48 $16.79 $17.62
======= ======= ======= ======= ====== ====== ======
Total return (%)(a)(b)... 29.2 21.2 35.2 (0.9) 10.2 (4.7) 28.9
Net assets, end of period
(000).................. $63,303 $43,715 $36,465 $25,946 $ 605 $1,015 $1,324
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 0.84 1.13 1.20 1.33 1.10 1.10 1.10
Ratio of net investment
income to average net
assets (%)(c).......... 1.12 1.44 1.61 1.28 0.88 1.07 0.84
Portfolio turnover
(%)(a)................. 64 58 60 48 59 49 64
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 0.84 1.13 1.20 1.33 3.35 2.20 6.17
Net investment income
(loss) per share
would have been.... $ 0.18 $ 0.22 $ 0.23 $ 0.15 $(0.28) $ 0.00(e) $(0.73)(e)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of class operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
73
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH FUND
----------------
INSTITUTIONAL
CLASS
----------------
1999* 1998**
------- -------
<S> <C> <C>
Net asset value,
beginning of period.... $ 11.65 $ 12.63
------- -------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... (0.04) (0.03)
Net realized and
unrealized gain
(loss) on
investments.......... 3.01 (0.95)
------- -------
Total from investment
operations......... 2.97 (0.98)
------- -------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... 0.00 0.00
Distributions from net
realized capital
gains................ (3.45) 0.00
------- -------
Total
distributions...... (3.45) 0.00
------- -------
Net asset value, end of
period................. $ 11.17 $ 11.65
======= =======
Total return (%)(a)(b)... 30.9 (7.8)
Net assets, end of period
(000).................. $28,235 $24,663
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 0.85 0.85
Ratio of net investment
income to average net
assets (%)(c).......... (0.40) (0.32)
Portfolio turnover
(%)(a)................. 164 118
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 1.18 1.02
Net investment income
(loss) per share
would have been.... $ (0.08) $ (0.05)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of class operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
74
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH FUND
------------------------------------------------------------
INSTITUTIONAL CLASS
----------------------------------
FOR THE YEAR ENDED DECEMBER 31, RETAIL CLASS
---------------------------------- ------------------------
1997 1996 1995 1994 1999* 1998** 1997***
------- ------- ------- ------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 13.44 $ 15.27 $ 12.50 $ 13.02 $11.59 $12.59 $13.44
------- ------- ------- ------- ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... (0.04) (0.07) 0.00 (0.02) (0.06) (0.03) (0.07)
Net realized and
unrealized gain
(loss) on
investments.......... 3.17 3.08 3.86 (0.45) 2.98 (0.97) 3.16
------- ------- ------- ------- ------ ------ ------
Total from investment
operations......... 3.13 3.01 3.86 (0.47) 2.92 (1.00) 3.09
------- ------- ------- ------- ------ ------ ------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... 0.00 0.00 0.00 (0.01) 0.00 0.00 0.00
Distributions from net
realized capital
gains................ (3.94) (4.84) (1.09) (0.04) (3.45) 0.00 (3.94)
------- ------- ------- ------- ------ ------ ------
Total
distributions...... (3.94) (4.84) (1.09) (0.05) (3.45) 0.00 (3.94)
------- ------- ------- ------- ------ ------ ------
Net asset value, end of
period................. $ 12.63 $ 13.44 $ 15.27 $ 12.50 $11.06 $11.59 $12.59
======= ======= ======= ======= ====== ====== ======
Total return (%)(a)(b)... 24.5 19.9 30.9 (3.7) 30.6 (7.9) 24.2
Net assets, end of period
(000).................. $32,149 $39,497 $45,011 $36,580 $ 649 $ 516 $ 194
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 0.85 1.10 1.08 1.16 1.10 1.10 1.10
Ratio of net investment
income to average net
assets (%)(c).......... (0.26) (0.47) (0.29) (0.14) (0.65) (0.58) (0.42)
Portfolio turnover
(%)(a)................. 116 99 48 46 164 118 116
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 0.98 1.10 1.08 1.16 4.43 4.74 12.96
Net investment income
(loss) per share
would have been.... $ (0.05) $ (0.07) $ 0.00 $ (0.02) $(0.38) $(0.19) $(2.00)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of class operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
75
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
----------------
INSTITUTIONAL
CLASS
----------------
1999* 1998**
------- -------
<S> <C> <C>
Net asset value,
beginning of period.... $ 10.74 $ 11.30
------- -------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.07 0.14
Net realized and
unrealized gain
(loss) on
investments.......... 3.31 (0.70)
------- -------
Total from investment
operations......... 3.38 (0.56)
------- -------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.13) 0.00
Distributions from net
realized capital
gains................ (0.20) 0.00
------- -------
Total
distributions...... (0.33) 0.00
------- -------
Net asset value, end of
period................. $ 13.79 $ 10.74
======= =======
Total return (%)(a)(b)... 32.0 (5.0)
Net assets, end of period
(000).................. $79,415 $68,464
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.00 1.00
Ratio of net investment
income to average net
assets (%)(c).......... 0.53 1.49
Portfolio turnover
(%)(a)................. 207 96
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 1.22 1.18
Net investment income
(loss) per share
would have been.... $ 0.04 $ 0.12
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of class operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
76
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
------------------------------------------------------------
INSTITUTIONAL CLASS
----------------------------------
FOR THE YEAR ENDED DECEMBER 31, RETAIL CLASS
---------------------------------- ------------------------
1997 1996 1995 1994 1999* 1998** 1997***
------- ------- ------- ------- ------ ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 13.16 $ 11.65 $ 11.61 $ 12.90 $10.70 $11.28 $13.16
------- ------- ------- ------- ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.15(e) 0.12 0.14 0.15 0.05 0.10 0.10(e)
Net realized and
unrealized gain
(loss) on
investments.......... (0.27) 2.01 0.87 (0.38) 3.28 (0.68) (0.26)
------- ------- ------- ------- ------ ------ ------
Total from investment
operations......... (0.12) 2.13 1.01 (0.23) 3.33 (0.58) (0.16)
------- ------- ------- ------- ------ ------ ------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.19) (0.09) (0.14) (0.14) (0.10) 0.00 (0.17)
Distributions from net
realized capital
gains................ (1.55) (0.53) (0.83) (0.92) (0.20) 0.00 (1.55)
------- ------- ------- ------- ------ ------ ------
Total
distributions...... (1.74) (0.62) (0.97) (1.06) (0.30) 0.00 (1.72)
------- ------- ------- ------- ------ ------ ------
Net asset value, end of
period................. $ 11.30 $ 13.16 $ 11.65 $ 11.61 $13.73 $10.70 $11.28
======= ======= ======= ======= ====== ====== ======
Total return (%)(a)(b)... (1.0) 18.3 8.7 (1.8) 31.6 (5.1) (1.3)
Net assets, end of period
(000).................. $82,188 $90,662 $79,488 $73,189 $ 261 $ 150 $ 233
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.00 1.42 1.45 1.46 1.25 1.25 1.25
Ratio of net investment
income to average net
assets (%)(c).......... 1.12 0.96 1.16 1.30 0.29 1.16 0.73
Portfolio turnover
(%)(a)................. 119 151 133 116 207 96 119
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 1.16 1.42 1.45 1.46 12.33 10.26 16.24
Net investment income
(loss) per share
would have been.... $ 0.13(e) $ 0.12 $ 0.14 $ 0.15 $(1.81) $(0.67) $(1.93)(e)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of class operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
77
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP VALUE FUND
------------------------
INSTITUTIONAL CLASS
------------------------
1999* 1998** 1997***
------ ------ --------
<S> <C> <C> <C>
Net asset value,
beginning of period.... $10.09 $11.53 $10.00
------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.03 0.02 0.07
Net realized and
unrealized gain
(loss) on
investments.......... 1.26 (1.46) 2.54
------ ------ ------
Total from investment
operations......... 1.29 (1.44) 2.61
------ ------ ------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.03) 0.00 (0.14)
Distributions from net
realized capital
gains................ (0.36) 0.00 (0.94)
------ ------ ------
Total
distributions...... (0.39) 0.00 (1.08)
------ ------ ------
Net asset value, end of
period................. $10.99 $10.09 $11.53
====== ====== ======
Total return (%)(a)(b)... 12.9 (12.5) 26.3
Net assets, end of period
(000).................. $5,062 $3,291 $3,736
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.00 1.00 1.00
Ratio of net investment
income to average net
assets (%)(c).......... 0.28 0.22 0.74
Portfolio turnover
(%)(a)................. 232 225 130
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 4.01 4.33 6.65
Net investment income
(loss) per share
would have been.... $(0.27) $(0.29) $(0.49)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of fund operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
78
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP VALUE FUND
----------------------------
RETAIL CLASS
----------------------------
1999* 1998** 1997***
------- ------- --------
<S> <C> <C> <C>
Net asset value,
beginning of period.... $10.07 $11.53 $10.00
------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.00 (0.01) 0.03
Net realized and
unrealized gain
(loss) on
investments.......... 1.25 (1.45) 2.55
------ ------ ------
Total from investment
operations......... 1.25 (1.46) 2.58
------ ------ ------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... 0.00 0.00 (0.11)
Distributions from net
realized capital
gains................ (0.36) 0.00 (0.94)
------ ------ ------
Total
distributions...... (0.36) 0.00 (1.05)
------ ------ ------
Net asset value, end of
period................. $10.96 $10.07 $11.53
====== ====== ======
Total return (%)(a)(b)... 12.5 (12.7) 26.0
Net assets, end of period
(000).................. $ 231 $ 121 $ 168
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.25 1.25 1.25
Ratio of net investment
income to average net
assets (%)(c).......... (0.02) (0.03) 0.42
Portfolio turnover
(%)(a)................. 232 225 130
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 13.62 13.31 27.99
Net investment income
(loss) per share
would have been.... $(2.67) $(2.40) $(1.90)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of fund operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
79
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP GROWTH FUND
--------------------------
INSTITUTIONAL CLASS
--------------------------
1999* 1998** 1997***
------- ------- --------
<S> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.83 $ 11.32 $10.00
------- ------- ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... (0.08) (0.02) (0.07)(e)
Net realized and
unrealized gain
(loss) on
investments.......... 6.99 (1.47) 1.99
------- ------- ------
Total from investment
operations......... 6.91 (1.49) 1.92
------- ------- ------
LESS DISTRIBUTIONS --
Distributions in excess
of net investment
income............... 0.00 0.00 (0.01)
Distributions in excess
of net realized
capital gains........ 0.00 0.00 (0.59)
------- ------- ------
Total
distributions...... 0.00 0.00 (0.60)
------- ------- ------
Net asset value, end of
period................. $ 16.74 $ 9.83 $11.32
======= ======= ======
Total return (%)(a)(b)... 70.3 (13.2) 19.4
Net assets, end of period
(000).................. $81,132 $17,174 $3,893
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.00 1.00 1.00
Ratio of net investment
income to average net
assets (%)(c).......... (0.80) (0.53) (0.65)
Portfolio turnover
(%)(a)................. 163 116 211
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 1.11 2.15 5.81
Net investment income
(loss) per share
would have been.... $ (0.09) $ (0.07) $(0.56)(e)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of fund operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
80
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP GROWTH FUND
----------------------------
RETAIL CLASS
----------------------------
1999* 1998** 1997***
------- ------- --------
<S> <C> <C> <C>
Net asset value,
beginning of period.... $ 9.80 $11.30 $10.00
------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... (0.08) (0.08) (0.10)(e)
Net realized and
unrealized gain
(loss) on
investments.......... 6.93 (1.42) 1.99
------ ------ ------
Total from investment
operations......... 6.85 (1.50) 1.89
------ ------ ------
LESS DISTRIBUTIONS --
Distributions in excess
of net investment
income............... 0.00 0.00 0.00
Distributions in excess
of net realized
capital gains........ 0.00 0.00 (0.59)
------ ------ ------
Total
distributions...... 0.00 0.00 (0.59)
------ ------ ------
Net asset value, end of
period................. $16.65 $ 9.80 $11.30
====== ====== ======
Total return (%)(a)(b)... 69.9 (13.3) 19.2
Net assets, end of period
(000).................. $6,032 $1,057 $1,139
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.25 1.25 1.25
Ratio of net investment
income to average net
assets (%)(c).......... (1.04) (0.80) (0.94)
Portfolio turnover
(%)(a)................. 163 116 211
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 1.80 3.70 7.82
Net investment income
(loss) per share
would have been.... $(0.12) $(0.34) $(0.77)(e)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of fund operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
81
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE
FUND
------------------
INSTITUTIONAL
CLASS
------------------
1999* 1998**
-------- --------
<S> <C> <C>
Net asset value,
beginning of period.... $ 15.60 $ 18.62
-------- --------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.16 0.12
Net realized and
unrealized gain
(loss) on
investments.......... 1.83 (3.14)
-------- --------
Total from investment
operations......... 1.99 (3.02)
-------- --------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.12) 0.00
Distributions from net
realized capital
gains................ (0.14) 0.00
-------- --------
Total
distributions...... (0.26) 0.00
-------- --------
Net asset value, end of
period................. $ 17.33 $ 15.60
======== ========
Total return (%)(a)(b)... 12.8 (16.2)
Net assets, end of period
(000).................. $301,496 $296,116
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 0.90 0.92
Ratio of net investment
income to average net
assets (%)(c).......... 0.87 1.04
Portfolio turnover
(%)(a)................. 113 78
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 0.90 0.92
Net investment income
(loss) per share
would have been.... $ 0.16 $ 0.12
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
82
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
------------------------------------
INSTITUTIONAL CLASS
------------------------------------
FOR THE YEAR ENDED DECEMBER 31,
------------------------------------
1997 1996 1995 1994
-------- -------- ------- -------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 17.39 $ 15.33 $ 12.86 $ 14.13
-------- -------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.17 0.11 0.04 (0.04)
Net realized and
unrealized gain
(loss) on
investments.......... 4.26 4.47 4.06 (1.12)
-------- -------- ------- -------
Total from investment
operations......... 4.43 4.58 4.10 (1.16)
-------- -------- ------- -------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.15) (0.11) (0.04) 0.00
Distributions from net
realized capital
gains................ (3.05) (2.41) (1.59) (0.11)
-------- -------- ------- -------
Total
distributions...... (3.20) (2.52) (1.63) (0.11)
-------- -------- ------- -------
Net asset value, end of
period................. $ 18.62 $ 17.39 $ 15.33 $ 12.86
======== ======== ======= =======
Total return (%)(a)(b)... 26.0 30.4 32.1 (8.2)
Net assets, end of period
(000).................. $245,177 $163,625 $90,455 $73,126
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 0.94 1.19 1.25 1.27
Ratio of net investment
income to average net
assets (%)(c).......... 0.97 0.80 0.29 (0.30)
Portfolio turnover
(%)(a)................. 94 73 155 87
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 0.94 1.19 1.25 1.27
Net investment income
(loss) per share
would have been.... $ 0.17 $ 0.11 $ 0.04 $ (0.04)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
83
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
-------------------------
RETAIL CLASS
-------------------------
1999* 1998** 1997***
------- ------- -------
<S> <C> <C> <C>
Net asset value,
beginning of period.... $ 15.57 $ 18.62 $ 17.39
------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.09 0.10 0.15(e)
Net realized and
unrealized gain
(loss) on
investments.......... 1.84 (3.15) 4.21
------- ------- -------
Total from investment
operations......... 1.93 (3.05) 4.36
------- ------- -------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.08) 0.00 (0.08)
Distributions from net
realized capital
gains................ (0.14) 0.00 (3.05)
------- ------- -------
Total
distributions...... (0.22) 0.00 (3.13)
------- ------- -------
Net asset value, end of
period................. $ 17.28 $ 15.57 $ 18.62
======= ======= =======
Total return (%)(a)(b)... 12.4 (16.4) 25.6
Net assets, end of period
(000).................. $75,302 $54,060 $34,353
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.20 1.19 1.25
Ratio of net investment
income to average net
assets (%)(c).......... 0.57 0.79 0.79
Portfolio turnover
(%)(a)................. 113 78 94
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 1.20 1.19 1.35
Net investment income
(loss) per share
would have been.... $ 0.09 $ 0.10 $ 0.13(e)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of class operations on January 2, 1997 through
December 31, 1997.
# From commencement of class operations on January 2, 1998 through
September 30, 1998.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
84
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP
VALUE FUND
--------------
ADMIN CLASS
--------------
1999* 1998#
------ ------
<S> <C> <C>
Net asset value,
beginning of period.... $15.54 $18.62
------ ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.04 0.03
Net realized and
unrealized gain
(loss) on
investments.......... 1.83 (3.11)
------ ------
Total from investment
operations......... 1.87 (3.08)
------ ------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.03) 0.00
Distributions from net
realized capital
gains................ (0.14) 0.00
------ ------
Total
distributions...... (0.17) 0.00
------ ------
Net asset value, end of
period................. $17.24 $15.54
====== ======
Total return (%)(a)(b)... 12.0 (16.5)
Net assets, end of period
(000).................. $4,863 $1,046
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.50 1.50
Ratio of net investment
income to average net
assets (%)(c).......... 0.30 0.95
Portfolio turnover
(%)(a)................. 113 78
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 1.70 3.99
Net investment income
(loss) per share
would have been.... $ 0.01 $(0.05)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** From commencement of class operations on January 2, 1997 through
December 31, 1997.
# From commencement of class operations on January 2, 1998 through
September 30, 1998.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
85
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
WORLDWIDE FUND
--------------
INSTITUTIONAL
CLASS
--------------
1999* 1998**
------ ------
<S> <C> <C>
Net asset value,
beginning of period.... $ 8.79 $ 9.86
------ ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.50 0.33
Net realized and
unrealized gain
(loss) on
investments.......... 1.82 (1.40)
------ ------
Total from investment
operations......... 2.32 (1.07)
------ ------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.44) 0.00
Distributions from net
realized capital
gains................ (0.39) 0.00
------ ------
Total
distributions...... (0.83) 0.00
------ ------
Net asset value, end of
period................. $10.28 $ 8.79
====== ======
Total return (%)(a)(b)... 27.8 (10.9)
Net assets, end of period
(000).................. $6,233 $4,907
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.00 1.00
Ratio of net investment
income to average net
assets (%)(c).......... 5.07 4.37
Portfolio turnover
(%)(a)................. 165 93
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 3.46 3.28
Net investment income
(loss) per share
would have been.... $ 0.26 $ 0.16
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** Commencement of operations on May 1, 1996.
# From commencement of class operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
86
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
WORLDWIDE FUND
-----------------------------------------------
INSTITUTIONAL
CLASS
----------------
FOR THE YEAR
ENDED DECEMBER
31, RETAIL CLASS
---------------- ----------------------------
1997 1996*** 1999* 1998** 1997#
------ -------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $10.63 $10.00 $ 8.76 $ 9.86 $ 10.63
------ ------ ------ ------ -------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.47 0.30 0.44 0.30(e) 0.38(e)
Net realized and
unrealized gain
(loss) on
investments.......... (0.10) 0.63 1.86 (1.40) (0.03)
------ ------ ------ ------ -------
Total from investment
operations......... 0.37 0.93 2.30 (1.10) 0.35
------ ------ ------ ------ -------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.47) (0.30) (0.42) 0.00 (0.45)
Distributions from net
realized capital
gains................ (0.67) 0.00 (0.39) 0.00 (0.67)
------ ------ ------ ------ -------
Total
distributions...... (1.14) (0.30) (0.81) 0.00 (1.12)
------ ------ ------ ------ -------
Net asset value, end of
period................. $ 9.86 $10.63 $10.25 $ 8.76 $ 9.86
====== ====== ====== ====== =======
Total return (%)(a)(b)... 3.5 9.2 27.6 (11.2) 3.3
Net assets, end of period
(000).................. $5,597 $5,189 $ 138 $ 73 $ 20
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.00 1.00 1.25 1.25 1.25
Ratio of net investment
income to average net
assets (%)(c).......... 3.89 4.62 4.88 3.88 3.58
Portfolio turnover
(%)(a)................. 134 76 165 93 134
Without giving effect to
the voluntary expense
limitations described
in Note 3 to the
Financial Statements:
Ratio of expenses to
average net assets
would have been
(%)(c)............. 2.62 3.72 20.19 24.69 214.91
Net investment income
(loss) per share
would have been.... $ 0.27 $ 0.13 $(1.28) $(1.49)(e) $(23.33)(e)
</TABLE>
* For the year ended September 30, 1999.
** For the nine months ended September 30, 1998.
*** Commencement of operations on May 1, 1996.
# From commencement of class operations on January 2, 1997 through
December 31, 1997.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its
advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
(e) Per share net investment income has been determined on the basis of the
weighted average number of shares outstanding during the period.
87
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------
SEPTEMBER 30, 1999
1. Loomis Sayles Funds is comprised of sixteen no-load mutual funds (the
"Funds").
Each Fund is a series of Loomis Sayles Funds (the "Trust"). The Trust is a
diversified open-end management investment company organized as a Massachusetts
business trust. The Trust is authorized to issue an unlimited number of full and
fractional shares of beneficial interest in multiple series.
Each Fund is separately managed and has its own investment objective and
policies. Loomis, Sayles & Company, L.P. ("Loomis Sayles") is the investment
adviser of each Fund.
The Trust consists of the following Funds:
<TABLE>
<CAPTION>
FIXED INCOME FUNDS EQUITY FUNDS
- ------------------ ------------
<S> <C>
Loomis Sayles Bond Fund Loomis Sayles Aggressive Growth Fund
Loomis Sayles Global Bond Fund Loomis Sayles Core Value Fund
Loomis Sayles High Yield 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 Municipal Bond Fund Loomis Sayles Small Cap Growth Fund
Loomis Sayles Short-Term Bond Fund Loomis Sayles Small Cap Value Fund
Loomis Sayles U.S. Government Securities Fund Loomis Sayles Worldwide Fund
</TABLE>
On March 19, 1999, the Loomis Sayles Strategic Value Fund ceased investment
operations under a plan of liquidation adopted on February 1, 1999.
Effective May 7, 1999, the name of the Loomis Sayles Mid-Cap Growth Fund changed
to the Loomis Sayles Aggressive Growth Fund.
The Equity Funds offer Institutional and Retail Class shares (the Small Cap
Value Fund also offers Admin Class shares). Each class has equal pro rata
interest in the assets of the relevant fund and general voting privileges.
Retail, Institutional and Admin Classes differ with respect to distribution and
certain other class-specific expenses and expense reductions. Retail and Admin
Class shares are subject to distribution fees at an annual rate of 0.25% of the
relevant class' average net assets, pursuant to distribution plans adopted in
accordance with Rule 12b-1 under the Investment Company Act of 1940. The Funds
may pay Loomis Sayles Distributors, L.P. (the "Distributor"), an affiliate of
the investment adviser, sub-accounting and/or servicing fees with respect to
omnibus Fund shareholder accounts in amounts that will not cause the Funds'
respective classes to exceed their voluntary expense limitations and that do not
exceed the amounts that the Funds' transfer agent would charge if the beneficial
owners of the omnibus accounts held Fund shares directly. As of September 30,
1999, the following amounts were paid under this arrangement: Core Value Fund
Institutional Share Class $2,150, Core Value Retail Share Class $41,250, and
Small Cap Value Retail Share Class $32,914. The Admin Class shares are subject
to service and account maintenance fees at an annual rate of 0.25% of the Fund's
average net assets attributable to the Admin Class. Retail and Admin
Class shares have exclusive voting rights with respect to their distribution
plans.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. Effective September 30, 1998, the
Board of Trustees approved a change in the fiscal year end of the Funds to
September 30. The following summarizes the significant accounting policies of
the Equity Funds:
88
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
SEPTEMBER 30, 1999
A. SECURITY VALUATION -- Equity securities for which quotations are readily
available are valued at their last sale price on the exchange where primarily
traded or, if there is no reported sale during the day, at the closing bid
price. Long-term debt securities for which quotations are readily available are
valued by a pricing service, approved by the Board of Trustees, which generally
uses the most recent bid prices in the principal market in which such securities
are normally traded. Short-term securities with a remaining maturity of 60 days
or less are valued at amortized cost, which approximates market value. Other
securities for which quotations are not readily available (including restricted
securities, if any) are valued primarily using dealer supplied quotations or at
their fair values as determined in good faith under the general supervision of
the Board of Trustees.
B. REPURCHASE AGREEMENTS -- The Funds may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Funds take
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Funds to resell, the obligation at an agreed-upon
price and time. This arrangement results in a fixed rate of return that is not
subject to market fluctuations during the Funds' holding period. The Funds,
through their custodian, receive delivery of the underlying securities
collateralizing repurchase agreements. It is the Funds' policy that the market
value of the collateral be at least equal to 102% of the repurchase price. These
securities are marked-to-market daily. Loomis Sayles is responsible for
determining that the value of the collateral is at all times at least equal to
102% of the repurchase price. In connection with transactions in repurchase
agreements, if the seller defaults and the value of the collateral declines or
if the seller enters into insolvency proceedings, realization of the collateral
by the Funds may be delayed or limited.
C. FOREIGN CURRENCY TRANSLATION AND FOREIGN INVESTMENTS -- The books and
records of each of the Funds (including those Funds that invest in foreign
securities) are maintained in U.S. dollars. The value of securities, currencies
and other assets and liabilities denominated in currencies other than U.S.
dollars is translated into U.S. dollars based upon foreign exchange rates
prevailing at the end of the period. Purchases and sales of investment
securities are translated at contractual currency exchange rates established at
the time of the trade. Income and expenses are translated at prevailing exchange
rates on the respective dates of such transactions.
The results of operations resulting from changes in foreign exchange rates on
investments are not isolated from fluctuations arising from changes in market
prices of securities held. All such fluctuations are included with net realized
and unrealized gain or loss on investments.
Net realized and unrealized gains and losses on foreign currency transactions
represent foreign exchange gains and losses from the sale of holdings of foreign
currencies, foreign currency gains and losses between trade dates and settlement
dates on investment securities transactions, sales and maturities of forward
foreign currency exchange
89
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
SEPTEMBER 30, 1999
contracts, and the difference between the amounts of daily interest and dividend
accruals on the books of the Funds and the amounts actually received resulting
from changes in exchange rates on the payable date.
Certain Funds use foreign currency exchange contracts to facilitate transactions
in foreign-denominated securities. Losses may arise from changes in the value of
the foreign currency or if the counterparties do not perform under the
contracts' terms. The U.S. dollar value of foreign currency exchange contracts
is determined using contractual currency exchange rates established at the time
of each trade.
Each Fund may purchase securities of foreign issuers. Investing in securities of
foreign companies and foreign governments involves special risks and
considerations not typically associated with investing in U.S. companies and
securities of the U.S. government. These risks include revaluation of currencies
and the risk of appropriation. Moreover, the markets for securities of many
foreign companies and foreign governments and their markets may be less liquid
and the prices of such securities may be more volatile than those of securities
of comparable U.S. companies and the U.S. government.
D. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- Each Fund that may invest in
foreign securities may enter into forward foreign currency exchange contracts to
protect its securities against changes in future foreign exchange rates. A
forward foreign currency exchange contract is an agreement between two parties
to buy or sell currency at a set price on a future date.
The market value of the contract will fluctuate with changes in currency
exchange rates. The contract is marked-to-market daily using the forward
currency exchange rate and the change in market value is recorded as unrealized
appreciation (depreciation) on foreign currency translations in the Funds'
Statements of Assets and Liabilities. Realized gain or loss is recognized when
the contract is closed equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed and recorded
as realized gain (loss) on foreign currency transactions in the Funds'
Statements of Operations.
Risks may arise upon entering into forward foreign currency exchange contracts
from the potential inability of counterparties to meet the terms of their
contracts and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. At September 30, 1999, there were no open forward
foreign currency exchange contracts.
E. SECURITY TRANSACTIONS, RELATED INVESTMENT INCOME AND EXPENSES -- Security
transactions are accounted for on the trade date (the date the buy or sell is
executed). Dividend income is recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Interest income is increased by the
accretion of discount. Discounts on zero coupon bonds, original issue discount
bonds, step bonds and payment in kind bonds are accreted according to the
effective interest method. In determining net gain or loss on securities sold,
the cost of securities are determined on the identified cost basis.
90
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
SEPTEMBER 30, 1999
Most expenses of the Trust can be directly attributed to a particular fund.
Expenses which cannot be directly attributed are apportioned among the Funds
based upon relative net assets.
Investment income, realized and unrealized gains and losses, and the common
expenses of a fund are allocated on a pro rata basis to each class based on the
relative net assets of each class to the total net assets of the fund. Each
class of shares differs in its respective distribution and certain other class
specific fees and expense reductions.
F. FEDERAL INCOME TAXES -- Each Fund is a separate entity for federal income
tax purposes. Each Fund intends to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies, and to distribute to its
shareholders all of its net investment income and any net realized capital
gains. Accordingly, no provision for federal income tax or excise tax has been
made.
At September 30, 1999, the Small Cap Growth Fund had available a capital loss
carryforward of $2,088,301, which will expire on September 30, 2006. The
realized losses are intended to be used to offset future capital gains.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Each Fund pays its net
investment income to shareholders annually. Distributions from net realized
capital gains are declared and paid on an annual basis by all of the Funds.
Income and capital gain distributions, if any, are determined in accordance with
Federal income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in reclassifications
to the Fund's capital accounts to reflect income and gains available for
distribution, are primarily due to differing book and tax treatments for
litigation proceeds, foreign currency transactions, non-deductible organization
costs, deferred losses due to wash sales, excise tax regulations and net
operating losses. Some of these classifications may include temporary book and
tax basis differences that will reverse in subsequent periods. Dividends from
net investment income are determined on a class level. Capital gains are
determined on a Fund level.
H. ORGANIZATION EXPENSE -- Organization costs incurred by the Worldwide Fund
are being amortized over 60 months.
91
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
SEPTEMBER 30, 1999
2. PURCHASES AND SALES OF SECURITIES -- (excluding long-term U.S. Government
securities and short-term investments) for each Fund for the twelve months ended
September 30, 1999 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
--------- -----
<S> <C> <C>
Aggressive Growth Fund............................ $ 21,589,174 $ 13,221,609
Core Value Fund................................... 43,581,256 49,240,837
Growth Fund....................................... 44,798,303 46,410,713
International Equity Fund......................... 144,932,579 152,776,048
Mid-Cap Value Fund................................ 11,096,668 10,108,725
Small Cap Growth Fund............................. 122,584,508 80,363,795
Small Cap Value Fund.............................. 412,335,177 410,150,582
Worldwide Fund.................................... 8,806,295 8,457,919
</TABLE>
Purchases and sales of long-term U.S. Government securities occurred in the
Worldwide Fund and totaled $318,902 and $720,284, respectively.
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES -- For the twelve
months ended September 30, 1999, the Funds incurred management fees payable to
Loomis Sayles. Certain officers and employees of Loomis Sayles are also officers
or Trustees of the Trust. Loomis Sayles' general partner is indirectly owned by
NVEST, L.P., a publicly-traded limited partnership whose general partner is
indirectly owned by Metropolitan Life Insurance Company. Separate management
agreements for each Fund in effect during the twelve months ended September 30,
1999 provided for fees at the following annual percentage rate of each Fund's
average daily net assets indicated below. Loomis Sayles voluntarily agreed, for
an indefinite period, to reduce its advisory fees and/or bear other expenses, to
the extent necessary to limit the total operating expenses of each Fund to the
following percentage rate of the Fund's average daily net assets:
<TABLE>
<CAPTION>
MAXIMUM EXPENSE RATIOS
--------------------------------
MANAGEMENT INSTITUTIONAL RETAIL ADMIN
FUND FEES CLASS CLASS CLASS
- ---- ---------- ------------- ------ -----
<S> <C> <C> <C> <C>
Aggressive Growth Fund................... 0.75% 1.00% 1.25% --
Core Value Fund.......................... 0.50% 0.85% 1.10% --
Growth Fund.............................. 0.50% 0.85% 1.10% --
International Equity Fund................ 0.75% 1.00% 1.25% --
Mid-Cap Value Fund....................... 0.75% 1.00% 1.25% --
Small Cap Growth Fund.................... 0.75% 1.00% 1.25% --
Small Cap Value Fund..................... 0.75% 1.00% 1.25% 1.50%
Worldwide Fund........................... 0.75% 1.00% 1.25% --
</TABLE>
Loomis Sayles may change or terminate these voluntary agreements at any time,
but the relevant prospectus would be supplemented at the time to describe the
change.
A. TRUSTEES FEES AND EXPENSES -- The Trust does not pay any compensation
directly to its officers or Trustees who are directors, officers or employees of
Loomis Sayles, NVEST or
92
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
SEPTEMBER 30, 1999
their affiliates. Each independent Trustee is compensated by the Trust on behalf
of each Fund at the rate of $1,250 per Fund per year, plus travel expenses for
each meeting attended.
B. SHAREHOLDERS -- At September 30, 1999, Loomis-Sayles Funded Pension Plan and
the Loomis Sayles & Company, L.P. Employees' Defined Contribution Retirement
Plans held shares of beneficial interest in the Funds as follows:
<TABLE>
<CAPTION>
DEFINED
PENSION CONTRIBUTION
PLAN PLANS
---- ------------
<S> <C> <C>
Aggressive Growth Fund.................................. 136,139 449,967
Core Value Fund......................................... 305,163 543,440
Growth Fund............................................. 186,873 1,016,229
International Equity Fund............................... 1,263,278 392,524
Mid-Cap Value Fund...................................... 178,836 138,298
Small Cap Growth Fund................................... 264,167 386,890
Small Cap Value Fund.................................... 220,804 702,587
Worldwide Fund.......................................... 501,380 80,811
</TABLE>
4. LINE OF CREDIT -- The Trust has entered into an agreement which enables each
Fund to borrow under a $25 million unsecured line of credit. Borrowings will be
made solely to temporarily finance the repurchase of capital shares. Interest is
charged to each participating Fund based on its borrowings at a rate per annum
equal to the Federal Funds rate plus 0.455%. In addition, a commitment fee of
0.08% per annum, payable at the end of each calendar quarter, is accrued by the
Trust and apportioned among the Funds based on each Fund's average daily unused
portion of the line of credit. During the twelve months ended September 30,
1999, the Funds had no borrowings under the agreement.
93
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
SEPTEMBER 30, 1999
5. CAPITAL SHARE TRANSACTIONS -- The tables below summarize the transactions in
Fund shares for the periods indicated:
<TABLE>
<CAPTION>
LOOMIS SAYLES AGGRESSIVE GROWTH FUND
-------------------------------------------------------------------
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998 DECEMBER 31, 1997*
---------------------- ------------------- --------------------
INSTITUTIONAL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares.... 618,252 $10,015,209 48,843 $ 615,005 177,686 $1,840,192
Issued in connection with the
reinvestment of distributions... 6,972 75,990 0 0 9,562 106,040
Redeemed.......................... (159,705) (2,492,335) (12,466) (140,005) (26,426) (302,973)
-------- ----------- ------- --------- ------- ----------
Net change........................ 465,519 $ 7,598,864 36,377 $ 475,000 160,822 $1,643,259
======== =========== ======= ========= ======= ==========
</TABLE>
<TABLE>
<CAPTION>
RETAIL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares.... 54,856 $ 1,063,819 1,681 $ 19,992 7,906 $ 88,646
Issued in connection with the
reinvestment of distributions... 292 3,175 0 0 390 4,320
Redeemed.......................... (4,427) (86,051) (1) (13) (1,893) (21,751)
-------- ----------- ------- --------- ------- ----------
Net change........................ 50,721 $ 980,943 1,680 $ 19,979 6,403 $ 71,215
======== =========== ======= ========= ======= ==========
</TABLE>
<TABLE>
<C> <S>
* From January 2, 1997 (commencement of operations).
</TABLE>
<TABLE>
<CAPTION>
LOOMIS SAYLES CORE VALUE FUND
---------------------------------------------------------------------------
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------------- ---------------------- ----------------------
INSTITUTIONAL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of
shares................... 664,692 $ 11,896,666 769,213 $13,780,828 921,281 $16,764,969
Issued in connection with
the reinvestment of
distributions............ 473,243 7,737,518 0 0 411,076 7,179,304
Redeemed................... (1,076,592) (19,066,379) (386,005) (6,894,590) (544,799) (9,494,995)
---------- ------------ -------- ----------- -------- -----------
Net change................. 61,343 $ 567,805 383,208 $ 6,886,238 787,558 $14,449,278
========== ============ ======== =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
RETAIL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES* AMOUNT*
- ------------------- ------ ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of
shares................... 1,325 $ 24,196 60,386 $ 1,150,106 107,737 $ 1,958,564
Issued in connection with
the reinvestment of
distributions............ 6,562 107,155 0 0 8,390 145,675
Redeemed................... (31,627) (546,028) (75,106) (1,324,717) (40,972) (699,525)
---------- ------------ -------- ----------- -------- -----------
Net change................. (23,740) $ (414,677) (14,720) $ (174,611) 75,155 $ 1,404,714
========== ============ ======== =========== ======== ===========
</TABLE>
<TABLE>
<C> <S>
* From January 2, 1997 (commencement of class operations).
</TABLE>
94
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
LOOMIS SAYLES GROWTH FUND
----------------------------------------------------------------------------
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998 DECEMBER 31, 1997
----------------------- ---------------------- -------------------------
INSTITUTIONAL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of
shares................... 595,614 $ 6,698,266 102,992 $ 1,335,788 253,404 $ 3,601,402
Issued in connection with
the reinvestment of
distributions............ 670,374 6,335,038 0 0 616,053 7,726,539
Redeemed................... (855,375) (10,013,356) (531,274) (6,847,399) (1,261,701) (18,196,471)
-------- ------------ -------- ----------- ---------- ------------
Net change................. 410,613 $ 3,019,948 (428,282) $(5,511,611) (392,244) $ (6,868,530)
======== ============ ======== =========== ========== ============
</TABLE>
<TABLE>
<CAPTION>
RETAIL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES* AMOUNT*
- ------------------- ------ ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of
shares................... 6,413 $ 68,404 31,559 $ 383,814 76,184 $ 1,122,980
Issued in connection with
the reinvestment of
distributions............ 15,812 148,319 0 0 3,662 45,392
Redeemed................... (8,103) (90,325) (2,408) (30,864) (64,436) (926,300)
-------- ------------ -------- ----------- ---------- ------------
Net change................. 14,122 $ 126,398 29,151 $ 352,950 15,410 $ 242,072
======== ============ ======== =========== ========== ============
</TABLE>
<TABLE>
<C> <S>
* From January 2, 1997 (commencement of class operations).
</TABLE>
<TABLE>
<CAPTION>
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
---------------------------------------------------------------------------------
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------------- ------------------------- -------------------------
INSTITUTIONAL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of
shares................ 1,220,250 $ 14,981,827 445,459 $ 5,642,741 784,236 $ 10,550,546
Issued in connection with
the reinvestment of
distributions......... 132,207 1,574,578 0 0 821,217 9,502,779
Redeemed................ (1,969,173) (23,718,130) (1,342,068) (16,284,413) (1,224,562) (16,864,605)
---------- ------------ ---------- ------------ ---------- ------------
Net change.............. (616,716) $ (7,161,725) (896,609) $(10,641,672) 380,891 $ 3,188,720
========== ============ ========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
RETAIL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES* AMOUNT*
- ------------------- ------ ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale
of shares........... 24,790 $ 308,832 20,073 $ 255,713 61,345 $ 821,531
Issued in connection
with the
reinvestment of
distributions....... 303 3,596 0 0 2,712 31,215
Redeemed.............. (20,105) (246,479) (26,716) (334,259) (43,382) (569,458)
---------- ------------ ---------- ------------ ---------- ------------
Net change............ 4,988 $ 65,949 (6,643) $ (78,546) 20,675 $ 283,288
========== ============ ========== ============ ========== ============
</TABLE>
<TABLE>
<C> <S>
* From January 2, 1997 (commencement of class operations).
</TABLE>
95
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
LOOMIS SAYLES MID-CAP VALUE FUND
-------------------------------------------------------------------
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998 DECEMBER 31, 1997*
---------------------- ------------------- --------------------
INSTITUTIONAL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares.... 279,307 $ 3,112,395 58,746 $ 698,126 309,654 $3,352,605
Issued in connection with the
reinvestment of distributions... 11,273 118,596 0 0 26,150 296,025
Redeemed.......................... (156,082) (1,774,885) (56,826) (637,787) (11,607) (141,399)
-------- ----------- ------- --------- ------- ----------
Net change........................ 134,498 $ 1,456,106 1,920 $ 60,339 324,197 $3,507,231
======== =========== ======= ========= ======= ==========
</TABLE>
<TABLE>
<CAPTION>
RETAIL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares.... 42,401 $ 463,646 3,796 $ 44,800 13,686 $ 159,030
Issued in connection with the
reinvestment of distributions... 453 4,763 0 0 902 10,219
Redeemed.......................... (33,784) (355,310) (6,398) (65,665) (6) (79)
-------- ----------- ------- --------- ------- ----------
Net change........................ 9,070 $ 113,099 (2,602) $ (20,865) 14,582 $ 169,170
======== =========== ======= ========= ======= ==========
</TABLE>
<TABLE>
<C> <S>
* From January 2, 1997 (commencement of operations).
</TABLE>
<TABLE>
<CAPTION>
LOOMIS SAYLES SMALL CAP GROWTH FUND
------------------------------------------------------------------------
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998 DECEMBER 31, 1997*
----------------------- ----------------------- --------------------
INSTITUTIONAL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of
shares..................... 4,039,306 $55,415,969 1,478,523 $17,606,892 365,308 $3,697,821
Issued in connection with the
reinvestment of
distributions.............. 0 0 0 0 16,122 174,112
Redeemed..................... (941,632) (12,823,404) (74,994) (881,639) (37,420) (420,264)
--------- ----------- --------- ----------- ------- ----------
Net change................... 3,097,674 $42,592,565 1,403,529 $16,725,253 344,010 $3,451,669
========= =========== ========= =========== ======= ==========
</TABLE>
<TABLE>
<CAPTION>
RETAIL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- ------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of
shares..................... 291,080 $ 3,589,032 76,042 $ 875,103 108,337 $1,114,195
Issued in connection with the
reinvestment of
distributions.............. 0 0 0 0 4,792 51,662
Redeemed..................... (36,590) (455,005) (68,953) (765,211) (12,312) (122,151)
--------- ----------- --------- ----------- ------- ----------
Net change................... 254,490 $ 3,134,027 7,089 $ 109,892 100,817 $1,043,706
========= =========== ========= =========== ======= ==========
</TABLE>
<TABLE>
<C> <S>
* From January 2, 1997 (commencement of operations).
</TABLE>
96
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
LOOMIS SAYLES SMALL CAP VALUE FUND
----------------------------------------------------------------------------------
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998 DECEMBER 31, 1997
-------------------------- ------------------------- -------------------------
INSTITUTIONAL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of
shares............... 4,989,202 $ 84,737,535 8,259,098 $155,967,344 3,738,215 $ 74,208,026
Issued in connection with
the reinvestment of
distributions........ 270,395 4,518,305 0 0 1,901,950 34,745,871
Redeemed............... (6,836,078) (116,873,636) (2,451,824) (44,789,595) (1,877,683) (35,245,314)
---------- ------------- ---------- ------------ ---------- ------------
Net change............. (1,576,481) $ (27,617,796) 5,807,274 $111,177,749 3,762,482 $ 73,708,583
========== ============= ========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
RETAIL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES* AMOUNT*
- ------------------- ------ ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale
of shares.......... 2,803,843 $ 48,225,107 2,529,087 $ 46,864,876 1,876,793 $ 37,883,528
Issued in connection
with the
reinvestment of
distributions...... 46,592 778,544 0 0 225,201 4,104,426
Redeemed............. (1,964,598) (33,831,385) (903,029) (16,373,245) (256,863) (5,210,721)
---------- ------------- ---------- ------------ ---------- ------------
Net change........... 885,837 $ 15,172,266 1,626,058 $ 30,491,631 1,845,131 $ 36,777,233
========== ============= ========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
ADMIN CLASS SHARES SHARES AMOUNT SHARES** AMOUNT**
- ------------------ ------ ------ -------- --------
<S> <C> <C> <C> <C>
Issued from the sale
of shares.......... 462,206 $ 7,924,628 94,376 $ 1,573,502
Issued in connection
with the
reinvestment of
distributions...... 1,071 17,884 0 0
Redeemed............. (248,524) (4,284,027) (27,100) (416,666)
---------- ------------ ---------- ------------
Net change........... 214,753 $ 3,658,485 67,276 $ 1,156,836
========== ============ ========== ============
</TABLE>
<TABLE>
<C> <S>
* From January 2, 1997 (commencement of class operations).
** From January 2, 1998 (commencement of class operations).
</TABLE>
97
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
LOOMIS SAYLES WORLDWIDE FUND
------------------------------------------------------------------
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------- ------------------- ----------------------
INSTITUTIONAL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- -------------------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares..... 21,333 $ 207,430 3,586 $ 35,988 220,662 $ 2,356,777
Issued in connection with the
reinvestment of distributions.... 51,481 461,788 0 0 70,014 694,603
Redeemed........................... (24,798) (246,534) (13,234) (124,115) (211,051) (2,199,192)
------- --------- ------- --------- -------- -----------
Net change......................... 48,016 $ 422,684 (9,648) $ (88,127) 79,625 $ 852,188
======= ========= ======= ========= ======== ===========
</TABLE>
<TABLE>
<CAPTION>
RETAIL CLASS SHARES SHARES AMOUNT SHARES AMOUNT SHARES* AMOUNT*
- ------------------- ------ ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Issued from the sale of shares..... 6,580 $ 63,000 25,009 $ 268,294 1,794 $ 19,549
Issued in connection with the
reinvestment of distributions.... 549 4,916 0 0 204 2,008
Redeemed........................... (1,936) (18,780) (18,687) (197,605) 0 0
------- --------- ------- --------- -------- -----------
Net change......................... 5,193 $ 49,136 6,322 $ 70,689 1,998 $ 21,557
======= ========= ======= ========= ======== ===========
</TABLE>
<TABLE>
<C> <S>
* From January 2, 1997 (commencement of class operations).
</TABLE>
98
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
1999 U.S. TAX AND DISTRIBUTION INFORMATION TO SHAREHOLDERS (UNAUDITED)
FOREIGN TAX CREDITS -- The International Equity Fund has made an election under
Internal Revenue Code Section 853 to pass through foreign taxes paid by the Fund
to its shareholders. For the year ended September 30, 1999, the total amount of
foreign taxes that will be passed through to shareholders and the foreign source
income for information reporting purposes will be $210,119 (all of which
represents taxes withheld) and $1,184,848, respectively.
CAPITAL GAINS DISTRIBUTIONS -- Pursuant to Internal Revenue Section 852(b), the
following Funds paid distributions, which have been designated as capital gains
distributions for the fiscal year ended September 30, 1999:
<TABLE>
<CAPTION>
DOLLAR
AMOUNT
----------
<S> <C>
Core Value Fund................................... $6,828,861
Growth Fund....................................... 4,670,568
International Equity Fund......................... 1,231,622
Mid-Cap Value Fund................................ 120,984
Small Cap Value Fund.............................. 1,757,421
Worldwide Fund.................................... 73,947
</TABLE>
CORPORATE DIVIDENDS RECEIVED DEDUCTION -- For the fiscal year ended September
30, 1999, a percentage of dividends distributed by the Funds listed below
qualify for the dividends received deduction for corporate shareholders. These
percentages are as follows:
<TABLE>
<CAPTION>
QUALIFYING
PERCENTAGE
----------
<S> <C>
Aggressive Growth Fund............................ 1.89%
Core Value Fund................................... 51.80%
Growth Fund....................................... 6.41%
Mid-Cap Value Fund................................ 33.64%
Small Cap Value Fund.............................. 74.73%
Worldwide Fund.................................... 1.21%
</TABLE>
99
<PAGE>
- -----------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------
To the Board of Trustees and Shareholders of the Loomis Sayles Equity Funds:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Loomis Sayles Equity Funds
(consisting of the Loomis Sayles Aggressive Growth Fund (formerly Mid-Cap Growth
Fund), Core Value Fund, Growth Fund, International Equity Fund, Mid-Cap Value
Fund, Small Cap Growth Fund, Small Cap Value Fund, and Worldwide Fund)
(collectively, the "Funds") at September 30, 1999, and the results of each of
their operations, the changes in each of their net assets and the financial
highlights for the periods indicated herein, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in acccordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of investments at September 30, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 18, 1999
100
<PAGE>
BOARD OF TRUSTEES AND OFFICERS
- -----------------------------------------------------------------------
BOARD OF TRUSTEES
- -------------------------------------------------------
Joseph Alaimo
Richard S. Holway
Daniel J. Fuss
Michael T. Murray
OFFICERS
- -------------------------------------------------------
PRESIDENT
Daniel J. Fuss
EXECUTIVE VICE PRESIDENT
TREASURER
Robert J. Blanding
Mark W. Holland
VICE PRESIDENTS
ASSISTANT TREASURERS
Dawn M. Alston-Paige
Philip R. Murray
Mark B. Baribeau
Nicholas H. Palmerino
James L. Carroll
SECRETARY
Mary C. Champagne
Sheila M. Barry
E. John deBeer
William H. Eigen, Jr.
ASSISTANT SECRETARY
Christopher R. Ely
Bonnie S. Thompson
Quentin P. Faulkner
Philip C. Fine
Kathleen C. Gaffney
Isaac H. Green
Martha F. Hodgman
John Hyll
Jeffrey L. Meade
Eswar Menon
Alexander Muromcew
Kent P. Newmark
Jeffrey C. Petherick
Bruce G. Picard, Jr.
Lauren B. Pitalis
David L. Smith
Sandra P. Tichenor
John Tribolet
Jeffrey W. Wardlow
Gregg D. Watkins
Anthony J. Wilkins
101
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INVESTMENT ADVISER
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111
TRANSFER AND DIVIDEND PAYING AGENT AND CUSTODIAN OF ASSETS
State Street Bank and Trust Company
Boston, Massachusetts 02102
SHAREHOLDER SERVICING AGENT
FOR STATE STREET BANK AND TRUST COMPANY
Boston Financial Data Services, Inc.
P.O. Box 8314
Boston, Massachusetts 02266
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
160 Federal Street
Boston, Massachusetts 02110
This report has been prepared for the shareholders of the Funds and is not
authorized for distribution toprospective investors in the Funds unless it is
accompanied or preceded by an effective prospectus.
