<PAGE>
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LOOMIS SAYLES FUNDS
EQUITY FUNDS
// // //
SEMI-ANNUAL REPORT
MARCH 31, 1999
// CORE VALUE FUND
// GROWTH FUND
// INTERNATIONAL EQUITY FUND
// MID-CAP GROWTH 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
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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, Loomis Sayles
Funds......................................... 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............ 56
Statements of Operations........................ 58
Statements of Changes in Net Assets............. 60
Financial Highlights............................ 68
Notes to Financial Statements................... 84
Additional Fund Information..................... 94
Board of Trustees and Officers.................. 97
</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/ Literature and Information
/2/ Net Asset Values and Yields
/3/ Speak to a Marketing Representative
/4/ Advisory and Broker/Dealer Services
/5/ Institutional and High Net Worth Operations, Trading and Client
Services
As always, we are interested in your comments about the job we are doing and in
answering any questions you may have. For more complete information about any of
the Loomis Sayles Funds, including charges and expenses, please call Loomis
Sayles Distributors, L.P. for a prospectus at 800-633-3330 Monday through
Friday, 8:45 a.m. to 4:45 p.m. EST. Read it carefully before you invest or send
money.
1
<PAGE>
LETTER FROM THE PRESIDENT
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DEAR SHAREHOLDERS,
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[PHOTO]
DANIEL J. FUSS
The bad news is that the last six months were relatively
fruitless for most areas of fixed income. The good news is that
the worst is behind us and things are looking brighter on the
horizon. In fact, the Loomis Sayles Bond Fund has once again
been rated a 5-star fund overall by Morningstar for the 5-year
period ended March 31.
The degree of leverage in the bond market seems to be
increasing once again. Dealers continue to be cautious and
institutions that lend to hedge funds are still careful, but
are slowly becoming more liberal than they were last fall. If
this continues, market liquidity will further improve and
spreads ought to narrow, allowing corporate yields to either fall faster or rise
slower than treasury yields. Either scenario represents favorable price
movements for corporate bonds.
Despite a floundering market, the Loomis Sayles Bond Fund performed very well in
the past six months. Our motto has become "same bonds, new prices." The
investments made in undervalued bonds earlier in 1998 bore fruit in the last six
months. We had a strong fourth quarter as liquidity flowed back into the market,
helping restore a modicum of rationality on valuation spreads. These two factors
helped us produce positive performance relative to the rest of the market.
In the equity arena, growth stocks continue to be in favor over value. The
technological revolution is almost solely responsible for the market's momentum.
For the first quarter of 1999, only 172 stocks in the S&P 500 beat the
capitalization-weighted index average. These stocks represent 34% of the
equal-weighted index but 47% of the size-weighted index. On a size-weighted
basis, Standard & Poor's classifies over 20% of the outperforming stocks as
technology companies. Four of the seven largest contributors to the excess
return of the market were Microsoft, America Online, EMC Corp. and Cisco
Systems, all technology-related companies. Technology, with a return of nearly
12%, was the only industrial sector to exceed 8% for the first quarter.
There are some uncertainties for both the fixed income and equity markets. For
instance, we cannot predict the outcome of the tragic situation in the Balkans,
the effect of the Euro, the future of internet-related stocks or how soon or how
much interest rates will fluctuate. Our best course of action is precaution. As
a result of this uncertainty, we have attempted to position our funds to weather
wider than normal market swings. The way in which we do this is to buy as much
as we can that is not directly related to the markets -- without giving up
potential performance. Looking forward, the funds are structured to take
advantage of the above average spreads between U.S. Treasuries and everything
else that exists in the current market.
It has been an exciting six months for Loomis Sayles Funds. Mutual fund assets
were $2.3 billion at March 31. This represents a $170 million increase over the
past six months. We attribute most of this growth to the Loomis Sayles Bond Fund
on the fixed income side and Loomis Sayles Small and Mid-Cap Growth Funds on the
equity side. With $2.3 billion in total net assets, we are proud of our
accomplishments over the past six months and look forward to new challenges and
achievements for the '99 fiscal year.
Sincerely,
/s/ Daniel J. Fuss
Daniel J. Fuss
President,
Loomis Sayles Funds
2
<PAGE>
ECONOMIC AND MARKET OVERVIEW
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LOOMIS SAYLES MARKET AND ECONOMIC OVERVIEW
SEMI-ANNUAL REPORT FOR THE PERIOD ENDING MARCH 31, 1999
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CAPITAL MARKETS REVIEW -- OCTOBER 1998 TO MARCH 1999
The stock market continued to defy conventional wisdom as it racked up its
fourth consecutive year of returns in excess of 23% (as measured by the Standard
& Poor's 500 Index). The 190% rise in this index over the last four calendar
years is the second highest in history, trailing only the 200% return of
1933-1936. Blue-chip stocks continued to lead the way, especially in the
technology, retail, and financial services industries.
The bond market was a bit more tumultuous, with the overall theme being that of
a reversal of the trends that developed in the third quarter. The summer of 1998
was marked by fears of global economic collapse, and saw a "flight to quality"
that benefited U.S. Treasury securities at the expense of bonds with any type of
credit risk. For the six months ended March 31, 1999, Treasury bonds lost 1.51%
while investment grade corporate bonds were only down 1.07%. However, both
high-yield bonds (+3.98%) and mortgage-backed securities (+1.80%) saw gains (as
measured by their respective Lehman Brothers indices).
U.S. AND GLOBAL ECONOMIC REVIEW
The worries of the summer saw a double-dip in the stock market, with the second
low coming on October 8, nearly 20% below its July 17 high. An earlier cut in
interest rates of 0.25% by the Fed did nothing to appease investors, who were
expecting a larger cut. So on October 15th, for the first time in six and a half
years, the Fed cut rates between meetings, and the market took off. The S&P 500
was up 4.2% on October 15th alone, and nearly all of that came in the last two
hours of trading.
The latest country to give rise to currency concerns was Brazil, where
devaluation of its currency was expected to become a worst-case reality,
particularly in light of the failed IMF policies in Indonesia. But a relief and
reform package put together by G-7 nations provided enough temporary relief
there to see the country through the end of the year.
On the home front, the United States continued to see an unprecedented
combination of low unemployment and low inflation. GDP growth remained strong,
and the only "losers" in that scenario were ordinary bond investors, who got
little return from their coupons, and had little economic basis to expect
further interest rate cuts. In fact, despite no further Fed action, the yield on
the 30-year treasury got as low as 4.7% in November. This level had never been
seen since the Treasury Department began issuing 30-year bonds in 1973. If you
extrapolate yield curves throughout history, the last time the U.S. saw
comparably low interest rates was in 1963-64. A great contributor to the
downward movement in rates was the fact that, for the first time since 1969, the
federal government took in more money than it spent.
3
<PAGE>
ECONOMIC AND MARKET OVERVIEW (CONTINUED)
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January didn't see much market news. The Denver Broncos won their second
consecutive Super Bowl, which used to be a sure indication that the market was
headed for a down year. Since 1967, the market has gone down in 4 of the 8 years
in which an original AFC team won the Super Bowl, compared to only 2 negative
years out of the other 24. However, the S&P 500 still rose 5% in the first
quarter.
In February, the depressed oil industry got a boost when OPEC announced that
they would cut production by 2.3 million barrels per day, or close to 3%, in
order to provide some price support and ease a world oversupply. The price of
crude oil, which had been trading near $11 per barrel, quickly rose to around
$15. Energy stocks in the S&P 500 were up 14.7% in March alone.
The OPEC announcement renewed inflationary fears among investors, who were no
doubt skittish about low interest rates anyway. And the uncertainty surrounding
the military conflict in Kosovo certainly didn't help. The 30-year Treasury,
which began the year at 5.09%, hit the 5.70% mark in early March, thereby making
February one of the worst months in history for U.S. Treasury bonds. But the bad
news for Treasuries was good news for corporate bonds, as continuing economic
strength helped tighten spreads. Investors shook off the credit risk fears that
had worked their way into the market last summer, and the effects of three
interest rate cuts in 1998 were finally being felt in the form of increased
liquidity in early 1999. Demand for investment grade debt increased, as
evidenced by the success of the record $8 billion AT&T deal and several other
over-subscribed new offerings.
Merger activity continued its torrid pace of the past few years, with the
following pairings grabbing headlines over the past six months: America Online
and Netscape; Exxon and Mobil; Travelers Group and Citibank; British Petroleum
and Amoco; and BankBoston and Fleet Financial Group.
MARKET TECHNICALS
Since 1994, the U.S. stock market has been in a cycle in which returns have been
driven by a small number of very large companies in a limited number of industry
groups. In the first quarter of 1999, only 172 of the stocks in the S&P 500
outperformed the index as a whole, and in the past four years, only the largest
68 stocks in the index have received a positive contribution from their size
alone. Compounding this situation is the fact that so many of these stocks are
concentrated in the areas of financial services, technology, healthcare,
consumer staples, and communications. And the triple-whammy is that these stocks
are trading at valuation levels which tend to be very unappealing for
price-sensitive investors.
4
<PAGE>
ECONOMIC AND MARKET OVERVIEW (CONTINUED)
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This situation has created misery for active managers, who often look for hidden
values in somewhat smaller companies that are not quite as widely known as the
"nifty-fifty" type names. Additionally, with these high-performance industries
representing such a large percentage of the overall market, managers often feel
it imprudent to increase exposure above market levels. Many explanations have
been offered for this phenomenon. Some recurring themes include:
- - A CYCLICAL PATTERN, whereby high overall market returns lessen the need for
investors to absorb the perceived extra risk of smaller companies. A
comparable period was 1946-1957, when large stocks averaged 14.6% per year,
compared to 10.1% for small stocks.
- - INCREASED TRADING ACTIVITY AMONG INDIVIDUAL INVESTORS, who tend to gravitate
toward more recognizable names and are more inclined to seek "hot stories"
than cheap valuations. In this sense, recent years compare to the pronounced
boom in large stocks that took place in 1969-1972.
- - A FLOOD OF FOREIGN CAPITAL OUT OF WEAK ASIAN MARKETS AND INTO THE UNITED
STATES MARKETS. Foreign investors tend to emphasize liquidity and have
demonstrated a preference for simply participating in the U.S. stock market
by holding stocks in large recognizable companies.
- - NASDAQ REFORMS, which reduced the number of market makers for smaller
companies, making trading in these stocks more difficult and sometimes
unprofitable.
- - GREATER DIVERSIFICATION AMONG LARGER COMPANIES, which reduces the
opportunities for small companies to find a specialized niche in which to
grow.
Regardless of what theory one might choose to believe, market conditions have
been difficult for active managers lately. Even with perfect clairvoyance in
1994, prudent managers would have had to make a decision between constructing
portfolios that would outperform and constructing portfolios that were
adequately diversified. And since adequate diversification can be predicted with
much more accuracy than can future returns, they took the sensible road that
lately has not been rewarded.
Credit markets returned to a greater state of normalcy, as first quarter returns
in the corporate bond market showed an inverse relationship with credit
strength; in other words, lower-rated bonds provided higher returns. While this
relationship is both normal and logical, the fact that is often overlooked is
that a well-diversified portfolio of medium-grade bonds can actually outperform
a higher-grade portfolio over time with less volatility. In fact, since 1982,
corporate bonds rated BBB have provided 8% more (annualized) return than bonds
rated AAA, with 7% less volatility.
Mortgage bonds, which tend to do best in periods of stable or slightly rising
interest rates, also had a good six months after lagging corporate bonds for
most of this decade. After the rapid fall in interest rates over the last two
years and the subsequent wave of mortgage refinancing, most of the risk of
prepayments has been flushed out of the market.
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>
CORE INTERNATIONAL
VALUE GROWTH EQUITY
<S> <C> <C> <C>
- -----------------------------------------------------------
SIX MONTHS
LOOMIS SAYLES 16.12 31.85 11.29
Lipper Category Average 20.06 28.16 18.22
Lipper Category Index 18.72 28.99 16.98
ONE YEAR
LOOMIS SAYLES 0.75 14.29 -8.83
Lipper Category Average 5.47 13.56 0.02
Rank 541/808 512/1022 509/558
Percentile 67 51 92
Lipper Category Index 4.12 17.52 -0.64
THREE YEARS
LOOMIS SAYLES 18.28 20.70 5.82
Lipper Category Average 19.49 21.73 8.94
Rank 302/499 377/619 256/332
Percentile 61 61 78
Lipper Category Index 18.86 23.89 10.28
FIVE YEARS
LOOMIS SAYLES 18.75 18.96 5.75
Lipper Category Average 19.53 20.36 7.94
Rank 201/321 268/384 124/165
Percentile 63 70 76
Lipper Category Index 19.10 21.75 9.10
MODIFIED INCEPTION(3)
LOOMIS SAYLES 15.15 15.24 7.83
Lipper Category Average 15.51 16.29 9.39
Rank 115/186 143/213 41/59
Percentile 62 68 70
Lipper Category Index 15.64 17.23 9.83
ACTUAL INCEPTION(4)
LOOMIS SAYLES 15.81 16.07 7.76
</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 Flex Portfolio Index, in each Fund's corresponding investment
category as determined by Lipper Analytical Services, Inc. Rankings are
based on the total return of each Fund for the period relative to the total
return of all funds in that Fund's corresponding investment category.*
*Source: Lipper Analytical Services.
6
<PAGE>
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<TABLE>
<CAPTION>
MID-CAP MID-CAP SMALL CAP SMALL CAP
GROWTH VALUE GROWTH VALUE WORLDWIDE
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------
SIX MONTHS
LOOMIS SAYLES 54.77 8.86 41.91 4.66 18.50
Lipper Category Average 23.42 23.42 12.51 12.51 13.41
Lipper Category Index 24.71 24.71 12.90 12.90 14.75
ONE YEAR
LOOMIS SAYLES 33.77 -14.26 9.93 -19.85 -4.26
Lipper Category Average 0.24 0.24 -15.48 -15.48 2.93
Rank 14/354 289/354 38/664 344/664 82/88
Percentile 4 82 6 52 94
Lipper Category Index 1.91 1.91 -14.68 -14.68 2.61
THREE YEARS
LOOMIS SAYLES N/A N/A N/A 10.21 N/A
Lipper Category Average 8.03
Rank 120/383
Percentile 32
Lipper Category Index 5.56
FIVE YEARS
LOOMIS SAYLES N/A N/A N/A 12.99 N/A
Lipper Category Average 12.11
Rank 89/230
Percentile 39
Lipper Category Index 11.05
MODIFIED INCEPTION(3)
LOOMIS SAYLES 27.84 8.59 18.77 15.75 6.15
Lipper Category Average 13.93 13.93 5.67 13.37 10.70
Rank 12/262 199/262 30/470 16/90 62/68
Percentile 5 76 7 18 92
Lipper Category Index 14.22 14.22 3.76 12.10 11.07
ACTUAL INCEPTION(4)
LOOMIS SAYLES 27.84 8.59 18.77 15.96 6.29
</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:
Core Value Fund ............................................. May 13, 1991
Growth Fund ................................................. May 16, 1991
International Equity Fund ................................... May 10, 1991
Mid-Cap Growth Fund .................................... December 31, 1996
Mid-Cap Value Fund ..................................... December 31, 1996
Small Cap Growth Fund .................................. December 31, 1996
Small Cap Value Fund ........................................ May 13, 1991
Worldwide Fund ............................................... May 1, 1996
7
<PAGE>
FUND AND MANAGER REVIEW
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LOOMIS SAYLES CORE VALUE FUND
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[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 - 0.77%, Retail - 1.10%
TOTAL NET ASSETS (ALL CLASSES): $75.2 MM
PERFORMANCE
From October 1, 1998 through March 31, 1999, the Institutional Class and the
Retail Class of the Core Value Fund produced a total return of 16.12% and
15.93%, respectively, which was eclipsed by the 27.34% return of the Standard &
Poor's 500 Index and 20.06% for the average fund in the Lipper Growth & Income
category. The Fund's value bias was detrimental in comparison to the more
style-neutral indices, particularly in its higher exposure -- higher than the
overall market, but less than major value-oriented indices -- to interest
rate-sensitive industries.
PORTFOLIO REVIEW
For the six month period ending March 31, growth-oriented fund managers
outperformed value-oriented fund managers in a trend which has been in place
since 1994. Large cap stocks also continued to outpace smaller capitalization
issues by a wide margin.
In February, an agreement by oil-producing nations to cut overall world
production by 3% pushed up oil prices and boosted the prices for energy stocks.
The Fund benefited from this as our major holdings included Cooper Cameron, BJ
Services and USX Marathon Group. The rise in oil prices also resulted in a spike
in interest rates, which hurt interest rate sensitive stocks such as utilities,
financials and high-dividend payers. Overall, the Fund had slightly less
interest rate exposure than the major value indices, primarily because of our
smaller position in the financial services sector.
Our high healthcare exposure dampened returns somewhat for the period. An
example of what went wrong can be found in Tenet Healthcare, which suffered an
earnings decline following a balanced budget amendment that changed Medicare
reimbursement policies.
Our relatively light weighting in technology also hurt performance, as the
tremendous run-up over the past two years has made it difficult to identify
attractively valued stocks. The Fund's holdings lean toward manufacturers, which
have not enjoyed the same returns as internet-related issues.
PORTFOLIO POSITIONING
We continue to invest in companies with strong earnings selling at attractive
valuations. At this writing in mid-April, we have had several days of
significant outperformance by value stocks. Hopefully, this is the beginning of
a trend where investors, once again, will favor value.
/s/ James L. Carroll
James L. Carroll
/s/ Isaac H. Green
Isaac H. Green
/s/ Jeffrey W. Wardlow
Jeffrey W. Wardlow
8
<PAGE>
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AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
SINCE
6 MONTHS 1 YEAR 3 YEARS 5 YEARS INCEPTION(a)
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Loomis Sayles Core
Value Fund
(Institutional) 16.12 0.75 18.28 18.75 15.81
Loomis Sayles Core
Value Fund (Retail) 15.93 0.39 NA NA 17.03
Lipper Growth and
Income Fund Index(b) 18.72 4.12 18.86 19.10 15.64
S&P 500 Index(c) 27.34 18.46 28.08 26.25 19.30
</TABLE>
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO MARCH 31, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LIPPER GROWTH
AND INCOME FUND LOOMIS SAYLES CORE
INDEX VALUE FUND(d) S&P 500 INDEX
<S> <C> <C> <C>
5/31/91 $10,000.00 $10,000.00 $10,000.00
6/30/91 $9,539.46 $9,431.28 $9,541.87
7/31/91 $9,945.93 $9,744.08 $9,986.61
8/31/91 $10,177.45 $9,981.05 $10,223.21
9/30/91 $10,101.99 $9,715.65 $10,052.13
10/31/91 $10,259.83 $9,753.56 $10,187.27
11/30/91 $9,817.75 $9,118.49 $9,776.80
12/31/91 $10,703.30 $10,156.87 $10,894.92
1/31/92 $10,691.44 $10,484.51 $10,691.89
2/29/92 $10,891.00 $10,706.15 $10,830.36
3/31/92 $10,691.98 $10,455.60 $10,619.72
4/30/92 $10,888.46 $10,696.51 $10,931.53
5/31/92 $11,001.90 $10,715.78 $10,985.11
6/30/92 $10,818.84 $10,484.50 $10,821.68
7/31/92 $11,171.91 $10,908.51 $11,263.77
8/31/92 $10,975.87 $10,590.51 $11,033.25
9/30/92 $11,124.61 $10,667.60 $11,162.89
10/31/92 $11,173.55 $10,763.96 $11,201.46
11/30/92 $11,552.25 $11,361.42 $11,582.87
12/31/92 $11,734.16 $11,588.71 $11,725.03
1/31/93 $11,916.29 $11,850.03 $11,823.05
2/28/93 $12,093.25 $11,960.59 $11,984.20
3/31/93 $12,428.80 $12,181.71 $12,237.05
4/30/93 $12,275.06 $11,860.08 $11,941.27
5/31/93 $12,510.10 $12,121.40 $12,260.70
6/30/93 $12,588.42 $12,111.35 $12,296.61
7/31/93 $12,656.13 $12,020.89 $12,247.14
8/31/93 $13,131.87 $12,503.33 $12,711.84
9/30/93 $13,147.92 $12,432.97 $12,614.34
10/31/93 $13,351.76 $12,704.34 $12,875.28
11/30/93 $13,137.49 $12,523.42 $12,752.56
12/31/93 $13,449.77 $12,965.33 $12,906.75
1/31/94 $13,911.20 $13,463.60 $13,345.54
2/28/94 $13,558.17 $13,328.65 $12,983.31
3/31/94 $13,014.37 $12,778.48 $12,417.28
4/30/94 $13,190.66 $13,037.99 $12,576.52
5/31/94 $13,347.69 $13,183.32 $12,782.91
6/30/94 $13,082.07 $12,778.48 $12,469.57
7/31/94 $13,440.18 $13,224.84 $12,879.04
8/31/94 $13,950.91 $13,806.15 $13,407.07
9/30/94 $13,622.53 $13,328.64 $13,079.22
10/31/94 $13,773.95 $13,307.88 $13,373.05
11/30/94 $13,264.43 $12,685.05 $12,886.03
12/31/94 $13,394.05 $12,851.14 $13,077.17
1/31/95 $13,603.81 $13,123.41 $13,416.30
2/28/95 $14,112.98 $13,842.20 $13,939.15
3/31/95 $14,444.57 $14,212.49 $14,350.46
4/30/95 $14,842.84 $14,746.14 $14,773.03
5/31/95 $15,341.04 $15,377.81 $15,363.47
6/30/95 $15,630.32 $15,486.72 $15,720.32
7/31/95 $16,155.04 $16,085.71 $16,241.65
8/31/95 $16,309.35 $16,172.84 $16,282.49
9/30/95 $16,795.03 $16,684.71 $16,969.65
10/31/95 $16,567.08 $16,270.86 $16,908.99
11/30/95 $17,278.84 $17,011.43 $17,651.26
12/31/95 $17,564.83 $17,378.08 $17,991.25
1/31/96 $18,086.83 $17,890.95 $18,603.32
2/29/96 $18,339.83 $18,046.00 $18,776.39
3/31/96 $18,573.55 $18,236.84 $18,956.82
4/30/96 $18,857.72 $18,236.84 $19,236.31
5/31/96 $19,133.00 $18,582.73 $19,732.99
6/30/96 $19,051.45 $18,618.51 $19,807.68
7/31/96 $18,275.14 $17,938.65 $18,932.57
8/31/96 $18,825.42 $18,368.03 $19,331.93
9/30/96 $19,665.50 $19,283.36 $20,420.62
10/31/96 $20,111.09 $19,809.49 $20,983.23
11/30/96 $21,406.19 $21,192.12 $22,569.28
12/31/96 $21,196.32 $21,055.88 $22,122.08
1/31/97 $22,141.34 $22,162.66 $23,504.16
2/28/97 $22,329.81 $22,311.13 $23,688.37
3/31/97 $21,552.86 $21,555.28 $22,715.05
4/30/97 $22,348.93 $22,311.13 $24,071.10
5/31/97 $23,649.54 $23,660.87 $25,536.64
6/30/97 $24,576.51 $24,821.64 $26,682.54
7/31/97 $26,340.16 $26,988.55 $28,804.25
8/31/97 $25,352.33 $26,136.14 $27,190.32
9/30/97 $26,633.63 $27,469.76 $28,679.12
10/31/97 $25,748.78 $26,452.36 $27,721.31
11/30/97 $26,467.62 $27,236.03 $29,004.61
12/31/97 $26,893.06 $27,206.35 $29,502.73
1/31/98 $26,943.57 $27,268.04 $29,829.06
2/28/98 $28,633.71 $29,072.54 $31,980.48
3/31/98 $29,959.13 $29,951.66 $33,618.46
4/30/98 $30,120.38 $30,198.43 $33,956.38
5/31/98 $29,659.47 $29,674.04 $33,372.74
6/30/98 $30,016.70 $29,643.19 $34,728.61
7/31/98 $29,281.47 $28,301.38 $34,358.50
8/31/98 $25,145.96 $24,322.22 $29,398.71
9/30/98 $26,274.13 $25,987.91 $31,273.85
10/31/98 $28,182.62 $28,193.41 $33,818.33
11/30/98 $29,540.61 $29,165.06 $35,869.49
12/31/98 $30,545.16 $30,073.54 $37,934.19
1/31/99 $30,833.00 $30,004.09 $39,520.45
2/28/99 $30,151.26 $29,118.55 $38,292.20
3/31/99 $31,192.27 $30,177.72 $39,825.46
</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):Source: Lipper Analytical Services.
(c):S&P 500 Index is a capitalization-weighted, total return index comprised of
500 widely held common stocks, representing industrial, utility,
transportation, and financial companies traded on the New York Stock
Exchange, the American Stock Exchange and in the Over-the-Counter market.
The index returns have not been reduced for ongoing management and
operating expenses applicable to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
9
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND
- -------------------------------------------------------
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
The Institutional Class of the Loomis Sayles Growth Fund produced a total return
of 31.85% for the six-month period October 1, 1998 through March 31, 1999,
exceeding the 27.34% return of the Standard & Poor's 500 Index. The Retail Class
also outperformed the Index posting a return of 31.62% for the same period.
Results ranked favorably within a broader universe of mutual funds, as measured
by Lipper, where the Growth, Mid-Cap and Small-Cap category average returns were
28.16%, 23.42%, and 12.51%, respectively. High exposure in the energy sector
contributed heavily to this outperformance, as did high momentum technology
stocks such as America Online, EMC Corp. and Ciena.
PORTFOLIO REVIEW
The market continued to reward strong stock selection over economic sector
selection, during the first three months of 1999. Our stock picks in sectors
such as communications services (AT&T, MCI WorldCom), consumer cyclicals
(Wal-Mart, Omnicom), financials (American International Group, Providian),
technology (America Online, EMC, Sun Microsystems, Cisco Systems), and energy
(Anadarko Petroleum, Schlumberger) boosted the Fund's performance. Strong stock
selection in the consumer staples, healthcare, and industrial-oriented areas
also allowed us to avoid the significant underperformance that these sectors
experienced.
While the media hype surrounding the 10,000 level on the Dow Jones Industrial
Average gives the perception of a speculative bubble, we believe a strong
economy, low inflation, and good earnings fundamentals offer genuine support to
the market. This positive outlook in a volatile market allowed us to enhance
returns by taking advantage of numerous opportunities to buy growth stocks "on
weakness."
PORTFOLIO POSITIONING
We believe U.S. economic growth will remain solid with some slowing from its
strong pace during the first quarter. Low inflation has seemingly become an
important stimulant to real growth. Asia, Latin America, and even Europe, are
focused more on pro-growth policies than at any other time in the last several
years.
In this environment, we believe the technology, internet and internet-related
stocks, communications, and capital markets leaders offer the best potential for
superior performance over the next 12 months. While the Fund's healthcare
exposure has historically been significantly overweighted, we have underweighted
the sector as many companies may be exhibiting slowing earnings growth from
unsustainably high levels.
/s/ Mark B. Baribeau
Mark B. Baribeau
/s/ Robert S. Takazawa, Jr.
Robert S. Takazawa, Jr.
10
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
SINCE
6 MONTHS 1 YEAR 3 YEARS 5 YEARS INCEPTION(a)
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Loomis Sayles Growth
Fund (Institutional) 31.85 14.29 20.70 18.96 16.07
Loomis Sayles Growth
Fund (Retail) 31.62 14.10 NA NA 19.95
Lipper Growth Fund
Index(b) 28.99 17.52 23.89 21.75 17.23
S&P 500 Index(c) 27.34 18.46 28.08 26.25 19.30
</TABLE>
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO MARCH 31, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LIPPER GROWTH LOOMIS SAYLES
FUND INDEX GROWTH FUND(d) S&P 500 INDEX
<S> <C> <C> <C>
5/31/91 $10,000.00 $10,000.00 $10,000.00
6/30/91 $9,411.59 $9,287.05 $9,541.87
7/31/91 $9,993.41 $10,140.71 $9,986.61
8/31/91 $10,280.54 $10,581.61 $10,223.21
9/30/91 $10,203.46 $10,750.47 $10,052.13
10/31/91 $10,371.97 $11,116.32 $10,187.27
11/30/91 $9,935.96 $10,422.14 $9,776.80
12/31/91 $11,104.13 $11,692.58 $10,894.92
1/31/92 $11,087.05 $11,497.87 $10,691.89
2/29/92 $11,284.30 $11,614.70 $10,830.36
3/31/92 $10,928.94 $10,787.16 $10,619.72
4/30/92 $10,912.95 $10,261.43 $10,931.53
5/31/92 $11,029.52 $10,660.59 $10,985.11
6/30/92 $10,713.77 $10,290.63 $10,821.68
7/31/92 $11,066.53 $10,689.79 $11,263.77
8/31/92 $10,818.76 $10,485.34 $11,033.25
9/30/92 $10,986.27 $10,641.11 $11,162.89
10/31/92 $11,181.47 $11,215.52 $11,201.46
11/30/92 $11,758.34 $11,819.13 $11,582.87
12/31/92 $11,951.73 $12,130.67 $11,725.03
1/31/93 $12,122.63 $12,266.97 $11,823.05
2/28/93 $11,963.77 $12,130.67 $11,984.20
3/31/93 $12,306.71 $12,451.95 $12,237.05
4/30/93 $11,973.80 $12,072.26 $11,941.27
5/31/93 $12,449.25 $12,705.08 $12,260.70
6/30/93 $12,488.15 $12,782.97 $12,296.61
7/31/93 $12,472.96 $12,773.23 $12,247.14
8/31/93 $13,003.80 $13,337.90 $12,711.84
9/30/93 $13,087.59 $13,493.67 $12,614.34
10/31/93 $13,304.02 $13,522.88 $12,875.28
11/30/93 $13,033.92 $12,977.68 $12,752.56
12/31/93 $13,383.24 $13,259.57 $12,906.75
1/31/94 $13,846.69 $13,738.22 $13,345.54
2/28/94 $13,618.97 $13,239.20 $12,983.31
3/31/94 $12,982.90 $12,740.18 $12,417.28
4/30/94 $13,086.79 $12,852.20 $12,576.52
5/31/94 $13,149.81 $12,882.75 $12,782.91
6/30/94 $12,699.07 $12,251.34 $12,469.57
7/31/94 $13,058.92 $12,668.88 $12,879.04
8/31/94 $13,615.48 $13,096.61 $13,407.07
9/30/94 $13,322.14 $12,770.72 $13,079.22
10/31/94 $13,575.96 $13,269.74 $13,373.05
11/30/94 $13,059.14 $12,658.70 $12,886.03
12/31/94 $13,172.92 $12,775.78 $13,077.17
1/31/95 $13,221.06 $12,929.09 $13,416.30
2/28/95 $13,709.77 $13,276.59 $13,939.15
3/31/95 $14,125.18 $13,634.31 $14,350.46
4/30/95 $14,525.10 $13,808.06 $14,773.03
5/31/95 $14,964.55 $14,247.55 $15,363.47
6/30/95 $15,636.96 $15,177.63 $15,720.32
7/31/95 $16,392.83 $15,893.07 $16,241.65
8/31/95 $16,565.62 $16,261.01 $16,282.49
9/30/95 $17,057.60 $16,669.83 $16,969.65
10/31/95 $16,831.02 $16,526.74 $16,908.99
11/30/95 $17,400.71 $16,904.90 $17,651.26
12/31/95 $17,474.31 $16,724.74 $17,991.25
1/31/96 $17,896.60 $16,702.83 $18,603.32
2/29/96 $18,177.52 $17,239.51 $18,776.39
3/31/96 $18,261.48 $17,261.42 $18,956.82
4/30/96 $18,719.20 $18,258.11 $19,236.31
5/31/96 $19,051.21 $18,729.08 $19,732.99
6/30/96 $18,865.39 $18,761.94 $19,807.68
7/31/96 $17,845.21 $17,064.27 $18,932.57
8/31/96 $18,383.93 $17,787.15 $19,331.93
9/30/96 $19,411.32 $19,002.07 $20,420.62
10/31/96 $19,690.73 $19,776.73 $20,983.23
11/30/96 $20,934.91 $20,608.36 $22,569.28
12/31/96 $20,537.85 $20,046.91 $22,122.08
1/31/97 $21,608.51 $21,821.90 $23,504.16
2/28/97 $21,442.43 $20,613.72 $23,688.37
3/31/97 $20,460.95 $19,390.62 $22,715.05
4/30/97 $21,361.09 $19,226.55 $24,071.10
5/31/97 $22,839.06 $21,120.86 $25,536.64
6/30/97 $23,692.96 $21,806.99 $26,682.54
7/31/97 $25,656.87 $24,014.55 $28,804.25
8/31/97 $24,708.91 $23,474.38 $27,190.32
9/30/97 $26,121.33 $25,557.90 $28,679.12
10/31/97 $25,277.78 $25,295.53 $27,721.31
11/30/97 $25,858.56 $24,523.85 $29,004.61
12/31/97 $26,295.37 $24,959.98 $29,502.73
1/31/98 $26,472.44 $23,932.33 $29,829.06
2/28/98 $28,338.44 $25,671.43 $31,980.48
3/31/98 $29,550.47 $26,560.74 $33,618.46
4/30/98 $29,866.85 $27,331.48 $33,956.38
5/31/98 $29,130.94 $26,224.78 $33,372.74
6/30/98 $30,389.82 $27,410.53 $34,728.61
7/31/98 $30,067.26 $25,928.35 $34,358.50
8/31/98 $25,239.71 $20,730.82 $29,398.71
9/30/98 $26,922.09 $23,023.27 $31,273.85
10/31/98 $28,785.98 $24,604.27 $33,818.33
11/30/98 $30,501.02 $24,762.37 $35,869.49
12/31/98 $33,050.64 $28,170.89 $37,934.19
1/31/99 $34,460.60 $29,034.37 $39,520.45
2/28/99 $33,284.12 $27,847.09 $38,292.20
3/31/99 $34,727.58 $30,356.57 $39,825.46
</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):Source: Lipper Analytical Services.
(c):S&P 500 Index is a capitalization-weighted, total return index comprised of
500 widely held common stocks, representing industrial, utility,
transportation, and financial companies traded on the New York Stock
Exchange, the American Stock Exchange and in the Over-the-Counter market.
The index returns have not been reduced for ongoing management and
operating expenses applicable to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
11
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
- -------------------------------------------------------
[PHOTO] PAUL H. DREXLER
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): $70.9 MM
PERFORMANCE
From October 1, 1998 through March 31, 1999, the Institutional Class and the
Retail Class of the Loomis Sayles International Equity Fund returned 11.29% and
11.05%, respectively, versus the 22.34% return of the Morgan Stanley Capital
International EAFE Index, a broad market index representing 21 international
markets in Europe, Australia, and the Far East. The Fund's underperformance was
due primarily to its positions in the Pacific Basin, which suffered significant
declines.
PORTFOLIO REVIEW
The past six months proved to be a difficult period for value investors in
overseas markets. The Loomis Sayles International Equity Fund was no exception,
as its strategy focuses on identifying value opportunities outside of the United
States. As in the U.S., most international managers underperformed their
benchmarks as a relatively small number of large cap growth stocks drove up the
indices.
The portfolio was primarily invested in Europe during the period, with some
exposure to Canada, Japan, and other Pacific Basin markets. The portfolio's
strongest holdings (in U.S. dollar terms) were in Japan, up 33%, Canada, up 32%,
and Australia, up 26%. The portfolio's holding of Air New Zealand more than
doubled in value, while the portfolio had negative returns in Denmark and
Germany.
PORTFOLIO POSITIONING
Our recent visit with companies in Japan convinced us that serious corporate
restructuring is finally beginning. As a result, we raised the Fund's exposure
in Japan from approximately 10% to 20% prior to its sharp rally in March. We
have also been increasing the Fund's holdings in the U.K. and have continued to
maintain the Fund's largest weighting in Continental Europe.
We believe that a diversified value strategy is the best way to take advantage
of the many investment opportunities now available in foreign stock markets. In
April, we began to see signs that the markets are beginning to broaden out and
recognize values in a wider variety of sectors. The Fund's diversification
across both countries and industries makes it well positioned to benefit from
this trend.
/s/ Paul H. Drexler
Paul H. Drexler
12
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
SINCE
6 MONTHS 1 YEAR 3 YEARS 5 YEARS INCEPTION(a)
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Loomis Sayles
International Equity
Fund (Institutional) 11.29 -8.83 5.82 5.75 7.76
Loomis Sayles
International Equity
Fund (Retail) 11.05 -9.15 NA NA 1.76
Lipper International
Equity Fund Index(b) 16.98 -0.64 10.28 9.10 9.83
MSCI-EAFE Index(c) 22.34 6.06 8.47 8.75 8.35
</TABLE>
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO MARCH 31, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LIPPER INTERNATIONAL LOOMIS SAYLES
EQUITY FUND INTERNATIONAL EQUITY
INDEX FUND(d) MSCI EAFE INDEX
<S> <C> <C> <C>
5/31/91 $10,000.00 $10,000.00 $10,000.00
6/30/91 $9,479.44 $9,460.00 $9,265.25
7/31/91 $9,898.18 $9,960.00 $9,720.37
8/31/91 $9,806.60 $9,980.00 $9,522.74
9/30/91 $10,088.87 $10,360.00 $10,059.57
10/31/91 $10,130.44 $10,280.00 $10,201.99
11/30/91 $9,768.04 $9,980.00 $9,725.69
12/31/91 $10,226.24 $10,366.41 $10,228.11
1/31/92 $10,337.10 $10,649.04 $10,009.84
2/29/92 $10,353.37 $10,992.23 $9,651.56
3/31/92 $10,018.08 $10,830.73 $9,014.35
4/30/92 $10,281.67 $10,961.95 $9,056.75
5/31/92 $10,797.11 $11,416.17 $9,662.95
6/30/92 $10,468.75 $11,214.29 $9,204.93
7/31/92 $10,078.33 $10,965.90 $8,969.35
8/31/92 $10,126.23 $10,773.87 $9,531.92
9/30/92 $9,911.14 $10,531.31 $9,343.69
10/31/92 $9,617.42 $9,712.66 $8,853.57
11/30/92 $9,668.63 $9,712.66 $8,936.88
12/31/92 $9,788.23 $9,838.90 $8,983.10
1/31/93 $9,824.38 $10,094.06 $8,982.00
2/28/93 $10,044.59 $10,359.42 $9,253.32
3/31/93 $10,627.21 $10,767.67 $10,059.89
4/30/93 $11,177.90 $11,073.86 $11,014.60
5/31/93 $11,436.07 $11,420.87 $11,247.23
6/30/93 $11,211.04 $10,992.20 $11,071.75
7/31/93 $11,565.91 $11,175.91 $11,459.31
8/31/93 $12,331.99 $12,237.37 $12,077.92
9/30/93 $12,285.90 $12,135.31 $11,806.05
10/31/93 $12,893.22 $12,931.40 $12,169.88
11/30/93 $12,382.00 $12,676.24 $11,106.10
12/31/93 $13,623.45 $13,630.89 $11,908.04
1/31/94 $14,472.07 $14,539.62 $12,914.81
2/28/94 $14,123.52 $14,169.79 $12,879.04
3/31/94 $13,477.34 $13,641.46 $12,324.32
4/30/94 $13,834.02 $13,778.83 $12,847.23
5/31/94 $13,813.23 $13,567.50 $12,773.47
6/30/94 $13,595.43 $13,419.57 $12,953.99
7/31/94 $14,014.47 $13,789.40 $13,078.57
8/31/94 $14,498.88 $13,852.80 $13,388.21
9/30/94 $14,124.73 $13,641.47 $12,966.54
10/31/94 $14,376.88 $13,683.74 $13,398.32
11/30/94 $13,706.00 $13,282.21 $12,754.39
12/31/94 $13,523.14 $13,391.05 $12,834.25
1/31/95 $12,852.25 $13,137.30 $12,341.22
2/28/95 $12,848.94 $13,506.39 $12,305.80
3/31/95 $13,186.94 $13,679.40 $13,073.33
4/30/95 $13,671.65 $14,336.84 $13,565.00
5/31/95 $13,806.31 $14,798.20 $13,403.30
6/30/95 $13,858.73 $14,763.60 $13,168.25
7/31/95 $14,620.59 $15,155.76 $13,988.05
8/31/95 $14,373.56 $14,486.78 $13,454.46
9/30/95 $14,613.96 $14,775.13 $13,717.23
10/31/95 $14,309.70 $14,475.24 $13,348.51
11/30/95 $14,459.12 $14,348.37 $13,719.92
12/31/95 $14,878.46 $14,559.65 $14,272.70
1/31/96 $15,230.02 $15,047.05 $14,331.29
2/29/96 $15,295.39 $15,197.02 $14,379.74
3/31/96 $15,534.34 $15,222.02 $14,685.11
4/30/96 $16,040.43 $15,646.94 $15,112.05
5/31/96 $16,022.46 $15,584.45 $14,833.96
6/30/96 $16,168.44 $15,721.92 $14,917.45
7/31/96 $15,623.09 $15,346.99 $14,481.45
8/31/96 $15,826.84 $15,634.43 $14,513.18
9/30/96 $16,180.66 $15,930.78 $14,898.73
10/31/96 $16,116.40 $16,193.38 $14,746.27
11/30/96 $16,874.50 $16,893.63 $15,333.00
12/31/96 $17,025.16 $17,224.59 $15,135.76
1/31/97 $17,047.12 $17,329.30 $14,606.04
2/28/97 $17,354.85 $17,211.50 $14,844.94
3/31/97 $17,446.79 $17,276.94 $14,898.69
4/30/97 $17,522.74 $17,250.76 $14,977.75
5/31/97 $18,510.76 $18,088.43 $15,952.41
6/30/97 $19,399.70 $18,873.75 $16,832.14
7/31/97 $20,022.55 $19,484.95 $17,104.45
8/31/97 $18,578.93 $17,787.15 $15,827.02
9/30/97 $19,771.29 $18,980.92 $16,713.63
10/31/97 $18,270.51 $17,349.44 $15,428.94
11/30/97 $18,117.20 $16,978.05 $15,271.66
12/31/97 $18,259.11 $17,055.35 $15,404.86
1/31/98 $18,700.74 $17,734.55 $16,109.38
2/28/98 $19,887.91 $18,851.45 $17,143.05
3/31/98 $20,967.97 $19,787.23 $17,670.91
4/30/98 $21,290.23 $19,832.51 $17,810.78
5/31/98 $21,332.55 $19,304.25 $17,724.33
6/30/98 $21,146.02 $18,564.68 $17,858.51
7/31/98 $21,470.43 $18,851.45 $18,039.57
8/31/98 $18,381.88 $16,693.12 $15,804.66
9/30/98 $17,809.73 $16,210.14 $15,320.12
10/31/98 $19,119.29 $17,296.85 $16,917.10
11/30/98 $20,076.97 $18,142.07 $17,783.79
12/31/98 $20,571.02 $18,644.75 $18,485.35
1/31/99 $20,695.82 $18,629.24 $18,430.77
2/28/99 $20,163.43 $17,760.60 $17,991.52
3/31/99 $20,834.54 $18,039.81 $18,742.52
</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):Source: Lipper Analytical Services.
(c):MSCI-EAFE Index is a capitalization-weighted average of the performance of
over 1,000 securities listed on the stock exchanges of 20 countries in
Europe, Australia and the Far East. The index returns have not been reduced
for ongoing management and operating expenses applicable to mutual fund
investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
13
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
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
Standard & Poor's Mid-Cap 400
Index
FUND INCEPTION DATE: 12/31/96
COMMENCEMENT OF OPERATIONS OF CLASS: Institutional - 1/2/97, Retail - 1/2/97
EXPENSE RATIO: Institutional - 1.00%, Retail - 1.25%
TOTAL NET ASSETS (ALL CLASSES): $5.5 MM
PERFORMANCE
The Institutional Class of the Loomis Sayles Mid-Cap Growth Fund posted a total
return of 54.77% for the period October 1, 1998 through March 31, 1999, as
compared with the Standard & Poor's Mid-Cap 400 Index return of 20.02% and the
Lipper Average Mid-Cap Fund category return of 23.42%. The Retail Class also
more than doubled the index posting a gain of 54.58% for the same period. The
big gains were made possible by participation in the rallies in technology
(fourth quarter) and oil (first quarter), as well as by the avoidance of less
liquid names.
PORTFOLIO REVIEW
Over the past few months, we have repositioned the Fund with the goal of
significantly increasing its overall growth rate. We broadened the Fund's
exposure to the technology sector, adding companies such as Uniphase, (a leading
supplier of lasers and other optical components used in fiberoptic
communications), QUALCOMM, Inc.(a wireless communications equipment company) and
Broadcom (a manufacturer of semiconductor chips for the communications
industry).
We also added a significant position in telecommunications services including
Metromedia Fiber Network and Level 3 Communications, two companies which are
building state-of-the-art fiber networks in the U.S. and abroad. The Fund's
retail position was expanded with several growth retailers including Abercrombie
& Fitch, Linens 'n Things, Staples, and Dollar General. Finally, we added some
limited exposure to the Internet with small positions in companies such as CMGI,
Inc., Inktomi Corp., iVillage Inc., and Priceline.com, Inc.
PORTFOLIO POSITIONING
Mid-cap stocks, when measured against large cap stocks, have lagged the broad
market for some time. As a result, many exciting growth companies have been
overlooked and under-owned by investors. We believe this presents a significant
opportunity to invest in some of tomorrow's potential market leaders at
attractive values today. We expect the Fund to remain fully invested in mid-cap
growth stocks to exploit this opportunity.
<TABLE>
<S> <C> <C>
/s/ Chrisopher R. Ely /s/ Philip C. Fine /s/ David L. Smith
Christopher R. Ely Philip C. Fine David L. Smith
</TABLE>
14
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
SINCE
6 MONTHS 1 YEAR INCEPTION(a)
<S> <C> <C> <C>
- ----------------------------------------------------------------------
Loomis Sayles Mid-Cap Growth Fund
(Institutional) 54.77 33.77 27.84
Loomis Sayles Mid-Cap Growth Fund
(Retail) 54.58 33.46 27.52
Lipper Mid-Cap Fund Index(b) 24.71 1.91 14.22
S&P Mid-Cap 400 Index(c) 20.02 0.45 18.85
</TABLE>
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO MARCH 31, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LOOMIS SAYLES S&P
MID-CAP GROWTH LIPPER MID-CAP MID-CAP
FUND(d) FUND INDEX 400 INDEX
<S> <C> <C> <C>
12/31/96 $10,000.00 $10,000.00 $10,000.00
1/31/97 $10,620.00 $10,318.55 $10,375.41
2/28/97 $10,290.00 $9,927.21 $10,290.09
3/31/97 $9,630.00 $9,330.17 $9,851.38
4/30/97 $9,740.00 $9,502.54 $10,106.86
5/31/97 $10,620.00 $10,455.54 $10,990.60
6/30/97 $10,720.00 $10,807.55 $11,299.37
7/31/97 $11,810.00 $11,662.51 $12,418.10
8/31/97 $11,540.00 $11,589.50 $12,403.02
9/30/97 $12,570.00 $12,330.65 $13,115.94
10/31/97 $12,290.00 $11,687.33 $12,545.23
11/30/97 $11,910.00 $11,654.19 $12,731.17
12/31/97 $12,264.98 $11,746.44 $13,225.27
1/31/98 $11,624.51 $11,584.46 $12,973.53
2/28/98 $12,553.19 $12,646.00 $14,048.37
3/31/98 $12,980.17 $13,232.99 $14,682.00
4/30/98 $13,321.75 $13,352.88 $14,949.97
5/31/98 $12,723.98 $12,681.95 $14,277.43
6/30/98 $13,375.12 $13,179.79 $14,367.48
7/31/98 $12,691.95 $12,569.93 $13,810.17
8/31/98 $10,119.40 $10,030.60 $11,239.50
9/30/98 $11,218.87 $10,814.44 $12,288.69
10/31/98 $11,976.76 $11,346.86 $13,386.87
11/30/98 $12,072.83 $12,083.39 $14,054.94
12/31/98 $13,680.41 $13,381.44 $15,753.10
1/31/99 $13,813.12 $13,741.32 $15,139.84
2/28/99 $13,536.64 $12,886.73 $14,347.07
3/31/99 $17,363.17 $13,486.37 $14,748.32
</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):Source: Lipper Analytical Services.
(c):S&P Mid-Cap 400 Index consists of 400 domestic stocks chosen for market
size liquidity and industry group representation. It is a market-weighted
index (stock price times shares outstanding) with each stock affecting the
index in proportion to its value. The index is comprised of industrials,
utilities, financials and transportations, in size order. The index returns
have not been lowered for ongoing management and operating expenses
applicable to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
15
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND
- -------------------------------------------------------
[PHOTO] DEAN A. GULIS
[PHOTO] DAWN ALSTON PAIGE
[PHOTO] PETER B. RAMSDEN
KEY FUND FACTS
OBJECTIVE: Long-term growth
of capital
STRATEGY: Invests primarily
in stocks with market
capitalization falling
within the capitalization
range of the Standard &
Poor's Mid-Cap 400 Index,
which are believed to be
undervalued by the market.
FUND INCEPTION DATE: 12/31/96
COMMENCEMENT OF OPERATIONS OF CLASS: Institutional - 1/2/97, Retail - 1/2/97
EXPENSE RATIO: Institutional - 1.00%, Retail - 1.25%
TOTAL NET ASSETS (ALL CLASSES): $4.8 MM
PERFORMANCE
During the six-month period October 1, 1998 through March 31, 1999, the Loomis
Sayles Mid-Cap Value Fund's Institutional Class and Retail Class achieved an
8.86% return and an 8.71% return, respectively, as compared to the 20.02% total
return for the Standard & Poor's Mid-Cap 400 Index. Value stocks as a whole did
poorly, with market leadership coming from technology companies that are trading
at expensive multiples.
PORTFOLIO REVIEW
Although the Fund appreciated over the past six months, its relative
underperformance continued to be impacted by the markets' preference for growth
and size. Large cap stocks once again outperformed small caps and
growth-oriented stocks, particularly in technology, which far outpaced the
broader market. The Fund's market cap tended to be below that of the mid-cap
benchmarks while our value-oriented investment discipline precludes investment
in stocks with excessively high price/earnings and price/ book ratios.
The Fund was broadly diversified across all market sectors, although with a
modestly underweighted position in high-priced sectors such as technology. While
there were no major changes made to the Fund's sector and industry weights
during the period, we did make modest adjustments to take advantage of
particularly attractive value opportunities. In this regard, we moved the
holdings of the Fund from a modest underweight to a slight overweight in the
energy sector. Other changes, all small in scope, included a reduction in
utility exposure and an increase in the Fund's consumer cyclicals position.
PORTFOLIO POSITIONING
We believe that corporate earnings strength will remain a concern, particularly
in an environment of very optimistic, if not extreme, valuations for many of the
market's recent leaders. Accordingly, we have positioned the Fund to be broadly
diversified across all market sectors, focusing on what we believe are high
quality, well managed companies with historically attractive valuations and both
solid and achievable earnings expectations.
<TABLE>
<S> <C> <C>
/s/ Dean A. Gulis /s/ Dawn Alston Paige /s/ Peter B. Ramsden
Dean A. Gulis Dawn Alston Paige Peter B. Ramsden
</TABLE>
16
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
SINCE
6 MONTHS 1 YEAR INCEPTION(a)
<S> <C> <C> <C>
- ----------------------------------------------------------------------
Loomis Sayles Mid-Cap Value Fund
(Institutional) 8.86 -14.26 8.59
Loomis Sayles Mid-Cap Value Fund
(Retail) 8.71 -14.47 8.30
Lipper Mid-Cap Fund Index(b) 24.71 1.91 14.22
S&P Mid-Cap 400 Index(c) 20.02 0.45 18.85
</TABLE>
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO MARCH 31, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LOOMIS SAYLES
MID-CAP VALUE LIPPER MID-CAP S&P MID-CAP
FUND(d) FUND INDEX 400 INDEX
<S> <C> <C> <C>
12/31/96 $10,000.00 $10,000.00 $10,000.00
1/31/97 $10,370.00 $10,318.55 $10,375.41
2/28/97 $10,380.00 $9,927.21 $10,290.09
3/31/97 $10,100.00 $9,330.17 $9,851.38
4/30/97 $10,120.00 $9,502.54 $10,106.86
5/31/97 $10,950.00 $10,455.54 $10,990.60
6/30/97 $11,370.00 $10,807.55 $11,299.37
7/31/97 $12,100.00 $11,662.51 $12,418.10
8/31/97 $12,050.00 $11,589.50 $12,403.02
9/30/97 $12,710.00 $12,330.65 $13,115.94
10/31/97 $12,530.00 $11,687.33 $12,545.23
11/30/97 $12,570.00 $11,654.19 $12,731.17
12/31/97 $12,632.07 $11,746.44 $13,225.27
1/31/98 $12,402.00 $11,584.46 $12,973.53
2/28/98 $13,519.49 $12,646.00 $14,048.37
3/31/98 $14,034.41 $13,232.99 $14,682.00
4/30/98 $14,231.61 $13,352.88 $14,949.97
5/31/98 $13,530.44 $12,681.95 $14,277.43
6/30/98 $13,650.95 $13,179.79 $14,367.48
7/31/98 $12,916.91 $12,569.93 $13,810.17
8/31/98 $10,670.97 $10,030.60 $11,239.50
9/30/98 $11,054.42 $10,814.44 $12,288.69
10/31/98 $11,339.27 $11,346.86 $13,386.87
11/30/98 $12,259.56 $12,083.39 $14,054.94
12/31/98 $12,998.73 $13,381.44 $15,753.10
1/31/99 $12,646.80 $13,741.32 $15,139.84
2/28/99 $11,852.12 $12,886.73 $14,347.07
3/31/99 $12,033.76 $13,486.37 $14,748.32
</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):Source: Lipper Analytical Services.
(c):S&P Mid-Cap 400 Index consists of 400 domestic stocks chosen for market
size, liquidity and industry group representation. It is a market-weighted
index (stock price times shares outstanding) with each stock affecting the
index in proportion to its value. The index is comprised of industrials,
utilities, financials and transportation, in size order. The index returns
have not been lowered for ongoing management and operating expenses
applicable to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
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): $50.6 MM
PERFORMANCE
From October 1, 1998 through March 31, 1999, the Institutional Class of the
Loomis Sayles Small Cap Growth Fund performed well despite the market's
volatility, gaining 41.91% versus a 10.00% gain for the Russell 2000 Index and a
12.51% return for the average fund in Lipper's Small Cap category. The Retail
Class also performed well posting a 41.73% return for the same period. The Fund
took advantage of a market that favored high momentum stocks with optimistic
outlooks.
PORTFOLIO REVIEW
Over the past six months, investors have witnessed a series of dramatic events.
The Dow Jones Industrial Average broke the 10,000 barrier for the first time,
and the Internet captured the imagination of investors large and small,
producing dramatic swings in prices on almost a daily basis. Importantly, the
foundations of this record-setting bull market remain solid. The U.S. continues
to exhibit strength across most sectors of the economy, inflation remains in
check, and interest rates have remained at reasonable levels. It is our opinion
this favorable economic environment will continue for the rest of the year.
The Fund has maintained significant exposure to technology, with broad
diversification in areas such as electronics, telecommunications, and software.
Some of these companies such as SDL, Inc., and Uniphase supply the basic
building blocks for today's advanced fiberoptic communications systems. Others,
such as HI/FN and ISS Group provide security technology for the Internet.
Retailing remains an important theme for the Fund. Low unemployment and a strong
economy have stimulated retail sales in many areas. Ann Taylor, a leading seller
of women's apparel, has contributed positively to the Fund's performance.
PORTFOLIO POSITIONING
We continue to believe that small cap growth stocks offer opportunity for
investors. The favorable economy, strong fundamentals and attractive valuations
are indeed compelling and we expect to remain fully invested.
Investing in small cap stock entails risks, of course. A correction in stock
prices is always a possibility, particularly after a strong advance.
Nevertheless, we will stay the course, using any correction to add to positions
at favorable prices.
<TABLE>
<S> <C> <C>
/s/ Christopher R. Ely /s/ Philip C. Fine /s/ David L. Smith
Christopher R. Ely Philip C. Fine David L. Smith
</TABLE>
18
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
SINCE
6 MONTHS 1 YEAR INCEPTION(a)
<S> <C> <C> <C>
- ----------------------------------------------------------------------
Loomis Sayles Small Cap Growth
Fund (Institutional) 41.91 9.93 18.77
Loomis Sayles Small Cap Growth
Fund (Retail) 41.73 9.63 18.52
Lipper Small Cap Fund Index(b) 12.90 -14.68 3.76
Russell 2000 Index(c) 10.00 -16.26 5.49
</TABLE>
CUMULATIVE PERFORMANCE - DECEMBER 31, 1996 TO MARCH 31, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LOOMIS SAYLES
SMALL CAP GROWTH LIPPER SMALL CAP RUSSELL 2000
FUND(d) FUND INDEX INDEX
<S> <C> <C> <C>
12/31/96 $10,000.00 $10,000.00 $10,000.00
1/31/97 $10,260.00 $10,228.08 $10,199.80
2/28/97 $9,500.00 $9,642.16 $9,952.49
3/31/97 $8,510.00 $9,058.25 $9,482.87
4/30/97 $8,350.00 $8,982.65 $9,509.42
5/31/97 $9,710.00 $10,107.06 $10,567.34
6/30/97 $10,280.00 $10,598.36 $11,020.21
7/31/97 $11,110.00 $11,210.01 $11,533.00
8/31/97 $11,300.00 $11,338.33 $11,796.89
9/30/97 $12,550.00 $12,214.35 $12,660.35
10/31/97 $11,670.00 $11,598.95 $12,104.20
11/30/97 $11,540.00 $11,384.81 $12,025.91
12/31/97 $11,942.60 $11,501.78 $12,236.40
1/31/98 $11,552.25 $11,280.39 $12,043.06
2/28/98 $12,807.70 $12,190.23 $12,933.56
3/31/98 $13,387.95 $12,734.55 $13,466.98
4/30/98 $13,208.60 $12,787.78 $13,541.49
5/31/98 $12,100.85 $12,083.03 $12,812.19
6/30/98 $13,282.45 $12,243.14 $12,839.14
7/31/98 $11,974.25 $11,389.60 $11,799.76
8/31/98 $9,273.45 $9,129.38 $9,508.48
9/30/98 $10,370.65 $9,623.70 $10,252.59
10/31/98 $10,782.10 $10,016.49 $10,670.70
11/30/98 $12,132.50 $10,601.25 $11,229.76
12/31/98 $14,179.20 $11,403.47 $11,924.68
1/31/99 $14,590.65 $11,500.70 $12,083.15
2/28/99 $13,672.80 $10,582.44 $11,104.48
3/31/99 $14,717.25 $10,864.91 $11,277.84
</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):Source: Lipper Analytical Services.
(c):Russell 2000 Index is comprised of the 2,000 smallest companies in the
Russell 3000 Index (a broad market index), representing approximately 7% of
the Russell 3000 Index total market capitalization. The index returns have
not been reduced for ongoing management and operating expenses applicable
to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
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 - 0.89%, Retail - 1.16%, Admin. - 1.50%
TOTAL NET ASSETS (ALL CLASSES): $371.5 MM
PERFORMANCE
For the period October 1, 1998 through March 31, 1999, the Loomis Sayles Small
Cap Value Fund's Institutional, Retail and Admin Classes lagged the Russell 2000
Index, returning 4.66%, 4.46% and 4.23% respectively, as compared to the 10.00%
return for the Index. While the portfolio held up well during the down days for
the market, deep value and high growth issues drove the rebound for the period.
The Fund's focus on small-capitalization, undervalued stocks prevented it from
fully participating in this rebound.
PORTFOLIO REVIEW
The past six months ending March 31 have been an extremely difficult time for
value-based investors. Last fall, we shifted the portfolio toward technology
when that sector was down and out. That move proved correct and the portfolio
picked up some steam. But in January the portfolio began to pull back, suffering
more from lack of investor interest than fundamental deterioration. The winning
strategy was to become more aggressive, more speculative and pay any price for
stocks that were going up.
Rising interest rates in the first quarter had an adverse impact on stocks that
pay dividends, but rising oil prices allowed for greater profitability in energy
companies, and those shares rose accordingly. Merger activity continues to run
high in the banking sector, with a mixed but generally favorable impact.
PORTFOLIO POSITIONING
The current market environment is not rewarding the more traditional,
disciplined investment approaches. The internet is here to stay and will
certainly lead to many new companies that will have profitable futures. As value
managers, we will seek to identify the potential for many of these "new economy"
stocks, and find more ways to invest in these areas. However, in our opinion,
the market is discounting much too far into the future, leading to ridiculous
valuations for most companies. We believe the best approach for the long term is
to continue to follow our investment discipline.
<TABLE>
<S> <C>
/s/ Mary C. Champagne /s/ Jeffrey C. Petherick
Mary C. Champagne Jeffrey C. Petherick
</TABLE>
20
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
SINCE
6 MONTHS 1 YEAR 3 YEARS 5 YEARS INCEPTION(a)
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
Loomis Sayles Small Cap
Value Fund
(Institutional) 4.66 -19.85 10.21 12.99 15.96
Loomis Sayles Small Cap
Value Fund (Retail) 4.46 -20.12 NA NA 4.22
Loomis Sayles Small Cap
Value Fund (Admin) 4.23 -20.41 NA NA -9.55
Lipper Small Cap Fund
Index(b) 12.90 -14.68 5.56 11.05 12.10
Russell 2000 Index(c) 10.00 -16.26 7.72 11.22 12.49
</TABLE>
CUMULATIVE PERFORMANCE - MAY 31, 1991 TO MARCH 31, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LOOMIS SAYLES
LIPPER SMALL SMALL CAP VALUE RUSSELL 2000
CAP FUND INDEX 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
</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):Source: Lipper Analytical Services.
(c):Russell 2000 Index is comprised on the 2,000 smallest companies in the
Russell 3000 Index (a broad market index), respresenting approximately 7%
of the Russell 3000 total market capitalization. The index returns have not
been reduced for ongoing management and operating expenses applicable to
mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail and Admin Classes of shares would be lower, due to
the higher fees paid by the Retail and Admin Classes of shares.
21
<PAGE>
FUND AND MANAGER REVIEW
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND
- -------------------------------------------------------
[PHOTO] DANIEL J. FUSS
[PHOTO] E. JOHN DEBEER
[PHOTO] PAUL H. DREXLER
[PHOTO] QUENTIN P. FAULKNER
KEY FUND FACTS
OBJECTIVE: High total investment return
STRATEGY: Invests in U.S. and foreign equity
and debt securities
FUND INCEPTION DATE: 5/1/96
COMMENCEMENT OF OPERATIONS OF CLASS:
Institutional - 5/1/96, Retail - 1/2/97
EXPENSE RATIO: Institutional - 1.00%,
Retail - 1.25%
TOTAL NET ASSETS (ALL CLASSES): $5.9 MM
PERFORMANCE
For the period October 1, 1998 through March 31, 1999, the Loomis Sayles
Worldwide Fund's Institutional Class and Retail Class returned 18.50% and
18.25%, respectively, outperforming the Lipper Global Flex Portfolio category
average return of 13.41% return. The Lehman Brothers Government/Corporate Bond
Index returned -1.07% and the Standard & Poor's 500 Index returned 27.34% over
the same period.
PORTFOLIO REVIEW
Over the past six months ending March 31, the Fund's U.S. stock holdings
outperformed the S&P 500 Index while the Fund's holdings in foreign stocks
nearly kept pace with the MSCI-EAFE Index. The Fund's U.S. bond holdings turned
in stellar results due to the dramatic recovery in high yield spreads, posting a
9.70% return versus -0.16% for the Lehman Brothers Aggregate Bond Index. The
Fund's foreign bonds posted a 2.91% return as compared with -0.45% for the
Salomon World Global Bond Index.
The Fund's U.S. equities received a boost during the first quarter as the Fund's
expanded energy position benefited from OPEC's announcement to cut oil
production to ease a world oversupply. The Fund's foreign equities experienced
gains in Australia, New Zealand and France and declines in Germany, the U.K. and
Spain. While the Fund's holdings in foreign securities matched their local
indices, the decline of the Euro penalized overall performance, as did the lack
of exposure to the rapidly rising Japanese market.
PORTFOLIO POSITIONING
A large portion of the portfolio, 39.6%, is invested outside the U.S., as we
believe foreign securities currently offer the best values. We have allocated a
heavier percentage of the portfolio's assets to foreign stocks, 27.2%, because
their economies appear to be in the early stages of their growth cycles while
the U.S. economy has been strong for a number of years. Almost half of the
portfolio is invested in bonds, reflecting our belief that bond valuations are
attractive and stock market valuations are very high by almost all historical
standards.
/s/ Daniel J. Fuss
Daniel J. Fuss
/s/ E. John deBeer
E. John deBeer
/s/ Paul H. Drexler
Paul H. Drexler
/s/ Quentin P. Faulkner
Quentin P. Faulkner
22
<PAGE>
- -----------------------------------------------------------------------
AVERAGE ANNUAL RETURNS (%) - PERIODS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
SINCE
6 MONTHS 1 YEAR INCEPTION(a)
<S> <C> <C> <C>
- ----------------------------------------------------------------------
Loomis Sayles Worldwide Fund
(Institutional) 18.50 -4.26 6.29
Loomis Sayles Worldwide Fund
(Retail) 18.25 -4.79 3.72
Lipper Global Flex Portfolio
Index(b) 14.75 2.61 11.07
S&P 500 Index(c) 27.34 18.46 28.16
</TABLE>
CUMULATIVE PERFORMANCE - MAY 31, 1996 TO MARCH 31, 1999
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LOOMIS SAYLES
LIPPER GLOBAL WORLDWIDE
FLEX PORTFOLIO INDEX FUND(d) S&P 500 INDEX
<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
</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):Source: Lipper Analytical Services.
(c):S&P 500 Index is a capitalization-weighted, total return index comprised of
500 widely held common stocks, representing industrial, utility,
transportation, and financial companies traded on the New York Stock
Exchange, the American Stock Exchange and in the Over-the-Counter market.
The index returns have not been reduced for ongoing management and
operating expenses applicable to mutual fund investments.
(d):Cumulative performance is shown for the Institutional Class of shares.
Performance of the Retail Class of shares would, due to the higher fees paid
by the Retail Class of shares, be lower.
23
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- ------------------------------------------------------------------
COMMON STOCKS -- 99.7% OF NET ASSETS
AEROSPACE/DEFENSE -- 1.4%
Northrop Grumman Corp................. 17,500 $ 1,047,813
------------
AUTO & RELATED -- 3.5%
Dana Corp............................. 19,700 748,600
General Motors Corp................... 21,700 1,885,187
------------
2,633,787
------------
BANKS/SAVINGS & LOANS -- 9.3%
Bank One Corp......................... 21,084 1,160,938
Chase Manhattan Corp.................. 17,624 1,433,051
Fleet Financial Group, Inc............ 45,000 1,693,125
National City Corp.................... 10,000 663,750
PNC Bank Corp......................... 36,300 2,016,919
------------
6,967,783
------------
BEVERAGES -- 1.7%
Anheuser-Busch Cos., Inc.............. 16,700 1,272,331
------------
CHEMICALS -- MAJOR -- 1.0%
Praxair, Inc.......................... 21,000 757,313
------------
COMMERCIAL SERVICES -- 1.2%
Viad Corp............................. 33,400 928,938
------------
COMMUNICATIONS EQUIPMENT -- 0.9%
Harris Corp........................... 24,900 712,763
------------
COMPUTER HARDWARE -- 5.1%
Compaq Computer Corp.................. 18,900 598,894
Hewlett-Packard Co.................... 19,100 1,295,218
International Business Machines
Corp................................ 10,800 1,914,300
------------
3,808,412
------------
DATA PROCESSING SERVICES -- 2.8%
Dun & Bradstreet Corp................. 23,600 840,750
First Data Corp....................... 30,100 1,286,775
------------
2,127,525
------------
ELECTRONICS -- 5.5%
Koninklijke (Royal) Philips
Electronics NV (New York Shares).... 16,000 1,319,000
Litton Industries, Inc. *............. 19,000 1,092,500
Raytheon Co........................... 30,000 1,758,750
------------
4,170,250
------------
ENTERTAINMENT -- 1.6%
Time Warner, Inc...................... 17,200 1,222,275
------------
FINANCIAL SERVICES -- 5.9%
American Express Co................... 8,000 940,000
Bear Stearns Cos., Inc................ 16,905 755,442
CIT Group, Inc., Class A.............. 12,500 382,031
Finova Group, Inc..................... 26,424 1,370,745
</TABLE>
24
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
FINANCIAL SERVICES -- CONTINUED
Morgan Stanley Dean Witter & Co....... 9,600 $ 959,400
------------
4,407,618
------------
FOOD -- PACKAGED & MISCELLANEOUS -- 2.6%
ConAgra, Inc.......................... 49,100 1,255,119
Sara Lee Corp......................... 28,400 702,900
------------
1,958,019
------------
FOREST PRODUCTS -- 1.0%
Georgia Pacific Timber Group.......... 34,000 762,875
------------
FREIGHT TRANSPORTATION -- 0.9%
Ryder System, Inc..................... 25,800 712,725
------------
GOVERNMENT AGENCIES -- 1.0%
Federal National Mortgage
Association......................... 10,500 727,125
------------
HEALTH CARE -- DRUGS -- 5.7%
Abbott Laboratories................... 35,000 1,638,437
American Home Products Corp........... 29,000 1,892,250
Bristol Myers Squibb Co............... 11,600 746,025
------------
4,276,712
------------
HEALTH CARE -- SERVICES -- 1.2%
Tenet Healthcare Corp. *.............. 46,700 884,381
------------
HOME PRODUCTS -- 2.1%
Newell Inc............................ 16,800 798,000
Premark International, Inc............ 22,600 744,387
------------
1,542,387
------------
HOUSING & BUILDING MATERIALS -- 1.7%
Armstrong World Industries, Inc....... 11,800 533,212
Black & Decker Corp................... 14,000 776,125
------------
1,309,337
------------
IMAGING -- 1.6%
Xerox Corp............................ 21,900 1,168,913
------------
INSURANCE -- 5.1%
Ace Ltd............................... 55,650 1,735,584
Aetna, Inc............................ 11,000 913,000
Allstate Corp......................... 27,096 1,004,245
The Hartford Financial Services Group,
Inc................................. 3,000 170,438
------------
3,823,267
------------
LEISURE -- 1.8%
Hasbro, Inc........................... 45,750 1,323,891
------------
MACHINERY -- 1.6%
Deere & Co............................ 31,000 1,197,375
------------
</TABLE>
25
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
MANUFACTURING -- 2.4%
Eaton Corp............................ 16,000 $ 1,144,000
Tenneco, Inc.......................... 24,500 684,469
------------
1,828,469
------------
NATURAL GAS -- 1.4%
Columbia Energy Group................. 19,800 1,034,550
------------
OIL & GAS DRILLING EQUIPMENT -- 1.6%
BJ Services Co. *..................... 24,000 562,500
Cooper Cameron Corp. *................ 19,000 643,625
------------
1,206,125
------------
OIL & GAS -- MAJOR INTEGRATED -- 7.7%
BP Amoco Plc ADR...................... 15,550 1,569,578
Conoco, Inc........................... 31,400 771,263
Exxon Corp............................ 27,200 1,919,300
USX Marathon Group.................... 55,700 1,531,750
------------
5,791,891
------------
PERSONAL CARE -- 1.8%
Kimberly Clark Corp................... 29,000 1,390,187
------------
RETAIL -- FOOD -- 0.8%
Kroger Co. *.......................... 10,500 628,688
------------
RETAIL -- GENERAL -- 3.8%
Federated Department Stores, Inc. *... 28,300 1,135,537
Kmart Corp. *......................... 54,300 912,919
Sears Roebuck & Co.................... 18,200 822,413
------------
2,870,869
------------
TELECOMMUNICATIONS -- 10.3%
Ameritech Corp........................ 31,700 1,834,637
AT&T Corp............................. 14,000 1,117,375
BellSouth Corp........................ 46,600 1,866,912
GTE Corp.............................. 31,300 1,893,650
Sprint Corp........................... 10,300 1,010,688
------------
7,723,262
------------
TOBACCO -- 1.1%
Philip Morris Cos., Inc............... 22,500 791,719
------------
UTILITIES -- 2.6%
Consolidated Edison, Inc.............. 19,000 860,938
Texas Utilities Co.................... 26,600 1,108,887
------------
1,969,825
------------
TOTAL COMMON STOCKS
(Identified Cost $65,043,325)....... 74,979,400
------------
</TABLE>
26
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT -- 1.8% OF NET ASSETS
Associates Corp. of North America,
4.950%, 4/01/99..................... $1,371,274 $ 1,371,274
------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $1,371,274)........ 1,371,274
------------
TOTAL INVESTMENTS -- 101.5%
(IDENTIFIED COST $66,414,599) @....... 76,350,674
Liabilities, Less Cash and Other
Assets -- (1.5%).................... (1,140,005)
------------
NET ASSETS -- 100%...................... $ 75,210,669
------------
------------
</TABLE>
!SEE NOTE 1.
* Non-income producing security.
@ At March 31, 1999, the net unrealized appreciation on investments based on
cost of $66,414,599 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 $12,781,975 and $2,845,900, respectively, resulting in net
unrealized appreciation of $9,936,075.
KEY TO ABBREVIATIONS:
ADR: American Depositary Receipt
See accompanying notes to financial statements.
27
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- -----------------------------------------------------------------
COMMON STOCKS -- 96.5% OF NET ASSETS
ADVERTISING -- 2.1%
Omnicom Group, Inc.................... 7,600 $ 607,525
-----------
BROADCASTING -- 2.3%
Comcast Corp.......................... 10,900 670,350
-----------
COMMUNICATIONS EQUIPMENT -- 2.1%
Cisco Systems, Inc. *................. 5,500 602,594
-----------
COMPUTER HARDWARE -- 6.3%
EMC Corp. *........................... 6,800 868,700
Sun Microsystems, Inc. *.............. 7,600 950,475
-----------
1,819,175
-----------
COMPUTER SOFTWARE & SERVICES -- 10.9%
America Online, Inc. *................ 10,800 1,576,800
CMGI, Inc. *.......................... 3,800 695,637
Fiserv, Inc. *........................ 6,300 337,838
Paychex, Inc.......................... 11,550 547,903
-----------
3,158,178
-----------
ELECTRICAL EQUIPMENT -- 2.9%
Solectron Corp. *..................... 17,000 825,562
-----------
ELECTRONICS -- 5.1%
Applied Materials, Inc. *............. 4,600 283,762
Intel Corp............................ 5,000 594,375
Texas Instruments, Inc................ 5,900 585,575
-----------
1,463,712
-----------
ENTERTAINMENT -- 3.2%
Time Warner, Inc...................... 13,200 938,025
-----------
FINANCIAL SERVICES -- 6.3%
Associates First Capital Corp......... 6,300 283,500
Citigroup, Inc........................ 9,100 581,262
MBNA Corp............................. 22,700 541,963
Providian Financial Corp.............. 3,800 418,000
-----------
1,824,725
-----------
FREIGHT TRANSPORTATION -- 1.0%
FDX Corp. *........................... 3,100 287,719
-----------
GOVERNMENT AGENCIES -- 1.4%
Federal National Mortgage
Association......................... 5,900 408,575
-----------
HEALTH CARE -- BIOTECHNOLOGY -- 7.2%
Amgen, Inc. *......................... 6,800 509,150
Biogen, Inc. *........................ 3,000 342,938
Genentech, Inc. *..................... 3,400 301,325
MedImmune, Inc. *..................... 8,300 491,256
</TABLE>
28
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- -----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
HEALTH CARE -- BIOTECHNOLOGY --
CONTINUED
Perkin-Elmer Corp..................... 4,400 $ 427,075
-----------
2,071,744
-----------
HEALTH CARE -- DRUGS -- 3.5%
Pfizer, Inc........................... 7,200 999,000
-----------
HEALTH CARE -- MEDICAL TECHNOLOGY --
6.1%
Guidant Corp.......................... 19,500 1,179,750
Stryker Corp.......................... 11,700 590,119
-----------
1,769,869
-----------
HEALTH CARE -- SERVICES -- 1.8%
Healthsouth Corp. *................... 50,900 528,088
-----------
HOME PRODUCTS -- 2.4%
Clorox Co............................. 3,400 398,437
Procter & Gamble Co................... 2,900 284,019
-----------
682,456
-----------
INSURANCE -- 3.4%
American International Group, Inc..... 8,187 987,557
-----------
OIL & GAS DRILLING EQUIPMENT -- 2.6%
Cooper Cameron Corp. *................ 7,600 257,450
Schlumberger Ltd...................... 8,200 493,537
-----------
750,987
-----------
OIL & GAS EXPLORATION -- 3.6%
Anadarko Petroleum Corp............... 21,100 796,525
Cross Timbers Oil Co.................. 33,300 235,181
-----------
1,031,706
-----------
PACKAGING -- 2.5%
Sealed Air Corp. *.................... 15,000 737,812
-----------
RESTAURANTS -- 1.9%
Starbucks Corp. *..................... 19,800 555,638
-----------
RETAIL -- DRUG -- 2.5%
CVS Corp.............................. 12,100 574,750
Walgreen Co........................... 5,000 141,250
-----------
716,000
-----------
RETAIL -- FOOD -- 2.5%
Kroger Co. *.......................... 12,100 724,488
-----------
RETAIL -- GENERAL -- 2.1%
Wal-Mart Stores, Inc.................. 6,700 617,656
-----------
RETAIL -- SPECIALTY -- 2.5%
Home Depot, Inc....................... 11,800 734,550
-----------
</TABLE>
29
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- -----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
TELECOMMUNICATIONS -- 8.3%
AT&T Corp............................. 10,428 $ 832,285
MCI WorldCom, Inc. *.................. 10,400 921,050
Sprint Corp........................... 3,000 294,375
Sprint Corp. (PCS Group) *............ 8,100 358,931
-----------
2,406,641
-----------
TOTAL COMMON STOCKS
(Identified Cost $22,338,802)....... 27,920,332
-----------
<CAPTION>
FACE
AMOUNT
<S> <C> <C>
- -----------------------------------------------------------------
SHORT-TERM INVESTMENTS -- 4.0% OF NET ASSETS
Chevron USA Inc., 4.750%, 4/01/99..... $1,000,000 1,000,000
Repurchase Agreement with State Street
Bank and Trust Co., dated 3/31/99 at
4.000% to be repurchased at $154,017
on 4/1/99 collateralized by $120,000
U.S. Treasury Bond, 8.875%, due
8/15/17 with a value of $161,400.... 154,000 154,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $1,154,000)........ 1,154,000
-----------
TOTAL INVESTMENTS -- 100.5%
(IDENTIFIED COST $23,492,802) @....... 29,074,332
Liabilities, Less Cash and Other
Assets -- (0.5%).................... (147,131)
-----------
NET ASSETS -- 100%...................... $28,927,201
-----------
-----------
</TABLE>
! See Note 1.
* Non-income producing security.
@ At March 31, 1999, the net unrealized appreciation on investments based on
cost of $23,492,802 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 $6,565,674 and $984,144, respectively, resulting in net
unrealized appreciation of $5,581,530.
See accompanying notes to financial statements.
30
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES ++ VALUE !
<S> <C> <C>
- -----------------------------------------------------------------
COMMON STOCKS -- 96.9% OF NET ASSETS
AUSTRALIA -- 4.8%
Brambles Industries................... 40,000 $ 1,016,796
QBE Insurance Group................... 200,000 830,864
Southcorp............................. 385,000 1,565,231
-----------
3,412,891
-----------
BELGIUM -- 0.9%
Cimenteries CBR....................... 7,000 629,341
-----------
BRAZIL -- 0.2%
SABESP................................ 1,800,000 113,248
Telemig (Preference Shares), Class
B................................... 64,122 1,492
-----------
114,740
-----------
CANADA -- 4.6%
Bombardier............................ 86,000 1,130,904
Canadian National Railway............. 16,750 933,207
Northern Telecom...................... 19,400 1,208,082
-----------
3,272,193
-----------
FRANCE -- 11.6%
Bank Nationale de Paris............... 15,000 1,307,231
Guyenne et Gascogne................... 1,000 444,393
Hachette Filipacchi Medias............ 1,200 280,390
L' Air Liquide........................ 9,412 1,404,387
Michelin.............................. 26,000 1,168,074
Pechiney.............................. 13,000 470,884
Pernod Ricard......................... 14,000 890,841
Renault............................... 20,000 705,623
St. Gobain............................ 6,700 1,064,923
Zodiac................................ 2,500 501,429
-----------
8,238,175
-----------
GERMANY -- 5.6%
DaimlerChrysler....................... 12,800 1,115,503
Douglas Holdings...................... 18,000 765,849
Siemens............................... 17,500 1,171,264
Veba.................................. 17,100 900,432
-----------
3,953,048
-----------
HONG KONG -- 1.4%
Hong Kong Electric.................... 320,000 968,321
-----------
HUNGARY -- 2.3%
MATAV................................. 130,000 693,502
MOL................................... 26,000 558,333
OTP Bank.............................. 9,000 348,152
-----------
1,599,987
-----------
</TABLE>
31
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES ++ VALUE !
- -----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
ITALY -- 8.6%
ENI................................... 215,000 $ 1,371,565
INA................................... 300,000 908,250
San Paolo - IMI....................... 65,000 1,057,732
Telecom Italia (Savings Shares)....... 279,000 1,659,177
Unione Immobiliare.................... 2,050,000 1,075,032
-----------
6,071,756
-----------
JAPAN -- 20.7%
Canon................................. 45,000 1,113,457
Daiwa House Industries................ 75,000 856,310
Fujitsu............................... 104,000 1,670,464
Fujitsu Support and Services.......... 10,000 979,606
Ito Yokado............................ 15,000 965,249
NEC................................... 100,000 1,203,395
Nippon Telegraph & Telephone.......... 190 1,861,251
Nomura Securities..................... 98,000 1,026,221
NTT Mobile Communications............. 24 1,185,661
Ryohin Keikaku Company................ 3,200 508,044
Sony.................................. 24,000 2,219,313
TDK................................... 13,000 1,052,823
-----------
14,641,794
-----------
NEW ZEALAND -- 1.1%
Air New Zealand, Class B.............. 269,000 467,592
Nuplex Industries..................... 183,160 303,686
-----------
771,278
-----------
NORWAY -- 2.5%
Christiania Bank...................... 340,000 1,329,535
Storebrand............................ 64,000 472,355
-----------
1,801,890
-----------
PORTUGAL -- 4.7%
BPI................................... 45,000 1,369,673
Brisa-Auto Estradas de Portugal....... 14,000 649,398
Companhia de Seguros Mundial
Confianca........................... 30,000 856,674
Engil................................. 77,611 473,291
-----------
3,349,036
-----------
SINGAPORE -- 0.9%
City Developments..................... 125,000 651,607
-----------
SOUTH KOREA -- 0.6%
Samsung Electronics................... 6,000 464,548
-----------
SPAIN -- 4.9%
Acerinox.............................. 17,000 431,959
Azucarera Ebro Agricolas.............. 31,295 615,169
Mapfre Vida........................... 12,500 411,551
</TABLE>
32
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES ++ VALUE !
- -----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
SPAIN -- CONTINUED
Repsol................................ 19,325 $ 996,698
Sol Melia............................. 27,500 1,009,482
-----------
3,464,859
-----------
SWITZERLAND -- 5.1%
Adecco................................ 2,000 1,017,305
Novartis.............................. 1,050 1,707,508
Swiss Re.............................. 400 887,263
-----------
3,612,076
-----------
THAILAND -- 0.3%
Advanced Info Service................. 35,000 253,495
-----------
UNITED KINGDOM -- 16.1%
BAA................................... 76,000 846,643
Bank Of Scotland...................... 95,000 1,263,063
Boots................................. 80,000 1,159,856
British Aerospace..................... 175,000 1,169,705
British Petroleum..................... 39,000 659,249
CGU................................... 75,000 1,179,392
Diageo................................ 85,000 954,452
National Westminster Bank............. 47,500 1,088,980
Scottish & Newcastle.................. 70,000 761,721
SmithKline Beecham.................... 91,500 1,321,415
Smiths Industries..................... 19,000 278,227
Vodafone Group........................ 27,000 501,302
Wolseley.............................. 26,000 197,292
-----------
11,381,297
-----------
TOTAL COMMON STOCKS
(Identified Cost $67,173,488)....... 68,652,332
-----------
</TABLE>
33
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE !
- -----------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT -- 1.1% OF NET ASSETS
Repurchase Agreement with State Street
Bank and Trust Co., dated 3/31/99 at
4.000% to be repurchased at $792,088
on 4/1/99 collateralized by $635,000
U.S. Treasury Bond, 8.125%, due
8/15/21 with a value of $812,800.... $ 792,000 $ 792,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $792,000).......... 792,000
-----------
TOTAL INVESTMENTS -- 98.0%
(IDENTIFIED COST $67,965,488) @....... 69,444,332
Cash and Other Assets, Less
Liabilities -- 2.0%................. 1,416,298
-----------
NET ASSETS -- 100%...................... $70,860,630
-----------
-----------
</TABLE>
!SEE NOTE 1.
++ Ordinary shares unless otherwise noted.
@ At March 31, 1999, the net unrealized appreciation on investments based on
cost of $67,965,488 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 $5,565,103 and $4,086,259, respectively, resulting in net
unrealized appreciation of $1,478,844.
Ten Largest Sector Holdings at March 31, 1999
as a Percentage of Net Assets
<TABLE>
<S> <C>
Telecommunications 10.4%
Insurance 7.8%
Electronics 6.9%
Oil & Gas 5.6%
Retail - General 5.1%
Health Care 4.3%
Diversified Operations 4.3%
Auto & Related 4.2%
Banking/Savings & Loans 3.9%
Computer Hardware 3.8%
</TABLE>
See accompanying notes to financial statements.
34
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP GROWTH FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- ------------------------------------------------------------
COMMON STOCKS -- 88.5% OF NET ASSETS
ADVERTISING -- 3.3%
Omnicom Group, Inc.................... 1,200 $ 95,925
Outdoor Systems, Inc. *............... 2,900 87,000
----------
182,925
----------
AIRLINES -- 1.0%
Southwest Airlines Co................. 1,900 57,475
----------
BANKS/SAVINGS & LOANS -- 1.5%
Zions Bancorp......................... 1,200 79,800
----------
BROADCASTING -- 2.9%
Heftel Broadcasting Corp. Class A *... 1,700 73,738
TCA Cable TV, Inc..................... 1,900 82,650
----------
156,388
----------
BUSINESS SERVICES -- 8.4%
At Home Corp. *....................... 400 63,000
BISYS Group, Inc. *................... 1,500 84,375
CheckFree Holdings Corp. *............ 1,200 51,075
Cintas Corp........................... 900 58,837
CNET, Inc. *.......................... 400 36,850
CSG Systems International, Inc. *..... 2,000 78,875
Exodus Communications, Inc. *......... 300 40,350
PSINet, Inc. *........................ 1,100 46,819
----------
460,181
----------
COMMUNICATIONS EQUIPMENT -- 5.9%
Ciena Corp. *......................... 2,000 45,000
E-Tek Dynamics, Inc. *................ 1,400 50,225
QUALCOMM, Inc. *...................... 900 111,937
Uniphase Corp. *...................... 1,000 115,125
----------
322,287
----------
COMPUTER HARDWARE -- 1.8%
Network Appliance, Inc. *............. 2,000 101,250
----------
COMPUTER SOFTWARE & SERVICES -- 13.5%
CMGI, Inc. *.......................... 200 36,612
Fiserv, Inc. *........................ 1,150 61,669
Infoseek Corp. *...................... 700 51,800
Inktomi Corp. *....................... 700 60,025
Intuit, Inc. *........................ 900 91,575
iVillage Inc. *....................... 900 90,450
Macromedia, Inc. *.................... 2,100 95,156
Siebel Systems, Inc. *................ 1,800 85,500
VeriSign, Inc. *...................... 500 77,000
Veritas Software Co. *................ 1,100 88,825
----------
738,612
----------
</TABLE>
35
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
ELECTRICAL EQUIPMENT -- 1.6%
Solectron Corp. *..................... 1,800 $ 87,413
----------
ELECTRONICS -- 6.1%
Broadcom Corp. *...................... 1,000 61,625
KLA-Tencor Corp. *.................... 1,000 48,563
Novellus Systems, Inc. *.............. 900 49,612
PMC Sierra, Inc. *.................... 1,200 85,425
Vitesse Semiconductor Corp. *......... 1,700 86,062
----------
331,287
----------
FINANCIAL SERVICES -- 4.5%
Charles Schwab Corp................... 750 72,094
Knight/Trimark Group, Inc. *.......... 1,100 73,700
Providian Financial Corp.............. 900 99,000
----------
244,794
----------
HEALTH CARE -- BIOTECHNOLOGY -- 6.3%
Biogen, Inc. *........................ 800 91,450
Genentech, Inc. *..................... 1,000 88,625
Immunex Corp. *....................... 600 49,950
MedImmune, Inc. *..................... 1,200 71,025
Sepracor, Inc. *...................... 400 44,900
----------
345,950
----------
HEALTH CARE -- PRODUCTS -- 1.5%
MiniMed, Inc. *....................... 800 81,300
----------
INSURANCE -- 1.6%
AFLAC, Inc............................ 1,600 87,100
----------
LEISURE -- 3.1%
Circus Circus Enterprises, Inc. *..... 4,700 82,544
Harley-Davidson, Inc.................. 1,500 86,250
----------
168,794
----------
OIL & GAS DRILLING EQUIPMENT -- 1.8%
Diamond Offshore Drilling, Inc........ 3,100 98,038
----------
RESTAURANTS -- 4.9%
Papa John's International, Inc. *..... 1,800 79,425
Starbucks Corp. *..................... 3,500 98,219
Tricon Global Restaurants, Inc. *..... 1,300 91,325
----------
268,969
----------
RETAIL -- GENERAL -- 3.4%
Dollar General Corp................... 2,500 85,000
Kohl's Corp. *........................ 1,400 99,225
----------
184,225
----------
RETAIL -- SPECIALTY -- 11.4%
Abercrombie & Fitch Co. *............. 1,100 101,200
Linens 'n Things Inc. *............... 2,200 99,825
</TABLE>
36
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
RETAIL -- CONTINUED
O'Reilly Automotive, Inc. *........... 1,500 $ 67,125
Priceline.com Inc. *.................. 1,500 124,313
Staples, Inc. *....................... 3,900 128,212
Tiffany & Co.......................... 1,400 104,650
----------
625,325
----------
TELECOMMUNICATIONS -- 1.9%
Level 3 Communications, Inc. *........ 700 50,969
Metromedia Fiber Network, Inc. *...... 1,000 51,812
----------
102,781
----------
UTILITIES -- 2.1%
Montana Power Co...................... 1,600 117,700
----------
TOTAL COMMON STOCKS
(Identified Cost $4,008,170)........ 4,842,594
----------
TOTAL INVESTMENTS -- 88.5%
(IDENTIFIED COST $4,008,170) @........ 4,842,594
Cash and Other Assets, Less
Liabilities -- 11.5%................ 629,435
----------
NET ASSETS -- 100%...................... $5,472,029
----------
----------
</TABLE>
!SEE NOTE 1.
* Non-income producing security.
@ At March 31, 1999, the net unrealized appreciation on investments based on
cost of $4,008,170 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 $881,663 and $47,239, respectively, resulting in net
unrealized appreciation of $834,424.
See accompanying notes to financial statements.
37
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- ----------------------------------------------------------------
COMMON STOCKS -- 97.6% OF NET ASSETS
AEROSPACE/DEFENSE -- 3.2%
Gulfstream Aerospace Corp. *.......... 2,300 $ 99,762
Northrop Grumman Corp................. 900 53,888
----------
153,650
----------
AUTO & RELATED -- 4.3%
Hertz Corp............................ 2,250 120,375
Magna International, Inc.............. 1,550 88,931
----------
209,306
----------
BANKS/SAVINGS & LOANS -- 8.3%
AmSouth Bancorp....................... 1,350 61,425
Colonial BancGroup, Inc............... 5,000 60,000
First Tennessee National Corp......... 1,000 36,625
Golden State Bancorp, Inc. *.......... 2,700 60,075
SouthTrust Corp....................... 2,600 97,013
UnionBanCal Corp...................... 2,500 85,156
----------
400,294
----------
BUSINESS SERVICES -- 0.5%
Deluxe Corp........................... 800 23,300
----------
CHEMICALS -- SPECIALTY -- 1.8%
Crompton & Knowles Corp............... 2,730 42,998
Engelhard Corp........................ 2,700 45,731
----------
88,729
----------
COMMERCIAL SERVICES -- 1.8%
Stewart Enterprises, Inc.............. 5,300 85,131
----------
COMMUNICATIONS EQUIPMENT -- 1.9%
ECI Telecom Ltd....................... 2,600 91,000
----------
COMPUTER HARDWARE -- 5.7%
Apple Computer, Inc. *................ 3,100 111,406
Lexmark International Group, Inc.
Class A *........................... 700 78,225
Quantum Corp. *....................... 4,800 86,400
----------
276,031
----------
COMPUTER SOFTWARE & SERVICES -- 6.3%
Cadence Design Systems, Inc. *........ 2,700 69,525
Keane, Inc. *......................... 3,100 66,069
SunGard Data Systems, Inc. *.......... 1,800 72,000
Symantec Corp. *...................... 5,600 94,850
----------
302,444
----------
ELECTRONICS -- 2.9%
SCI Systems, Inc. *................... 2,300 68,137
Thomas & Betts Corp................... 1,950 73,247
----------
141,384
----------
FINANCIAL SERVICES -- 9.1%
Allmerica Financial Corp.............. 1,500 82,594
CIT Group, Inc. Class A............... 3,800 116,137
Knight/Trimark Group, Inc. *.......... 900 60,300
MBIA, Inc............................. 1,600 92,800
</TABLE>
38
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
FINANCIAL SERVICES -- CONTINUED
PMI Group, Inc........................ 1,900 $ 88,113
----------
439,944
----------
FOOD -- PACKAGED & MISCELLANEOUS -- 3.0%
Dean Foods Co......................... 2,400 85,500
Smithfield Foods, Inc. *.............. 2,600 58,988
----------
144,488
----------
FOREST PRODUCTS -- 1.0%
Bowater, Inc.......................... 1,200 47,550
----------
FREIGHT TRANSPORTATION -- 1.4%
CNF Transportation, Inc............... 1,800 68,063
----------
HEALTH CARE -- MEDICAL SUPPLIES -- 1.5%
St. Jude Medical, Inc. *.............. 3,000 73,125
----------
HEALTH CARE -- SERVICES -- 3.5%
Healthsouth Corp. *................... 5,675 58,878
Humana, Inc. *........................ 4,600 79,350
Total Renal Care Holdings, Inc. *..... 2,800 30,800
----------
169,028
----------
HOUSING & BUILDING MATERIALS -- 2.2%
Southdown, Inc........................ 2,000 107,375
----------
INSURANCE -- 1.8%
Reliastar Financial Corp.............. 2,000 85,250
----------
MACHINERY -- 1.2%
Applied Power Inc..................... 2,200 59,950
----------
MANUFACTURING -- 0.9%
Pentair, Inc.......................... 1,300 43,875
----------
NATURAL GAS -- 3.3%
Columbia Energy Group................. 1,440 75,240
El Paso Energy Corp................... 2,600 84,987
----------
160,227
----------
OFFICE EQUIPMENT -- 1.4%
Miller Herman, Inc.................... 3,800 69,350
----------
OIL & GAS DRILLING EQUIPMENT -- 4.6%
Cooper Cameron Corp. *................ 2,475 83,840
Global Marine, Inc. *................. 4,600 54,050
Noble Drilling Corp. *................ 4,742 82,096
----------
219,986
----------
OIL & GAS -- MAJOR INTEGRATED -- 2.0%
USX Marathon Group.................... 3,500 96,250
----------
PERSONAL CARE -- 1.3%
Nu Skin Enterprises, Inc. Class A *... 2,800 64,050
----------
RETAIL -- FOOD -- 1.6%
Food Lion, Inc. Class A............... 7,800 71,784
Food Lion, Inc. Class B............... 300 2,700
----------
74,484
----------
</TABLE>
39
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
RETAIL -- GENERAL -- 2.7%
Consolidated Stores Corp. *........... 2,300 $ 69,719
TJX Companies, Inc.................... 1,750 59,500
----------
129,219
----------
RETAIL -- SPECIALTY -- 7.0%
Claire's Stores, Inc.................. 2,400 72,300
Saks, Inc. *.......................... 2,600 67,600
Tandy Corp............................ 1,800 114,862
Zale Corp. *.......................... 2,400 82,050
----------
336,812
----------
TELECOMMUNICATIONS -- 1.1%
Telephone and Data Systems, Inc....... 900 50,738
----------
TEXTILE & APPAREL -- 2.6%
Nine West Group, Inc. *............... 2,200 54,313
Tommy Hilfiger Corp. *................ 1,000 68,875
----------
123,188
----------
UTILITIES -- 7.7%
DQE, Inc.............................. 2,200 84,425
Energy East Corp...................... 1,000 52,562
Niagara Mohawk Holdings, Inc. *....... 6,800 91,375
Peco Energy Co........................ 1,400 64,750
Pinnacle West Capital Corp............ 2,200 80,025
----------
373,137
----------
TOTAL COMMON STOCKS
(Identified Cost $4,778,244)........ 4,707,358
----------
TOTAL INVESTMENTS -- 97.6%
(IDENTIFIED COST $4,778,244) @........ 4,707,358
Cash and Other Assets, Less
Liabilities -- 2.4%................. 116,767
----------
NET ASSETS -- 100%...................... $4,824,125
----------
----------
</TABLE>
!SEE NOTE 1.
* Non-income producing security.
@ At March 31, 1999, the net unrealized depreciation on investments based on
cost of $4,778,244 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 $284,522 and $355,408, respectively, resulting in net
unrealized depreciation of $70,886.
See accompanying notes to financial statements.
40
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- -------------------------------------------------------------------
COMMON STOCKS -- 97.0% OF NET ASSETS
ADVERTISING -- 1.0%
Lamar Advertising Co. *............... 14,250 $ 483,609
------------
AIRLINES -- 1.0%
Atlantic Coast Airlines *............. 18,400 517,500
------------
BANKS/SAVINGS & LOANS -- 0.9%
FirstFed Financial Corp. *............ 3,300 53,006
Staten Island Bancorp, Inc............ 23,000 395,313
------------
448,319
------------
BROADCASTING -- 4.1%
Citadel Communications Corp. *........ 19,800 658,350
Entercom Communications Corp. *....... 15,100 534,163
Jones Intercable, Inc. Class A *...... 22,400 883,400
------------
2,075,913
------------
BUILDING & CONSTRUCTION -- 2.1%
Dycom Industries, Inc. *.............. 24,150 1,050,525
------------
BUSINESS SERVICES -- 16.0%
Abacus Direct Corp. *................. 18,500 1,517,000
Concentric Network Corp. *............ 9,500 710,125
CSG Systems International, Inc. *..... 26,600 1,049,037
Labor Ready, Inc. *................... 29,900 779,269
Lason, Inc. *......................... 16,850 947,812
ProBusiness Services, Inc. *.......... 15,200 638,400
Profit Recovery Group International,
Inc. *.............................. 25,800 1,019,100
Security First Technologies Corp. *... 6,400 470,400
SoftNet Systems, Inc. *............... 13,500 494,438
Verio, Inc. *......................... 9,800 452,025
------------
8,077,606
------------
COMMUNICATIONS EQUIPMENT -- 10.7%
Antec Corp. *......................... 32,400 696,600
Com21, Inc. *......................... 21,800 572,250
Optical Coating Laboratory, Inc....... 20,300 974,400
Powerwave Technologies, Inc. *........ 35,900 1,018,662
SDL, Inc. *........................... 15,200 1,379,400
Uniphase Corp. *...................... 6,800 782,850
------------
5,424,162
------------
COMPUTER HARDWARE -- 0.3%
Cybex Computer Products Corp. *....... 8,800 157,850
------------
COMPUTER SOFTWARE & SERVICES -- 15.8%
Concord Communications, Inc. *........ 16,300 929,100
Geotel Communications Corp. *......... 25,800 1,183,575
Inktomi Corp. *....................... 7,200 617,400
ISS Group, Inc. *..................... 7,300 580,350
Macromedia, Inc. *.................... 24,500 1,110,156
Mercury Interactive Corp. *........... 26,000 926,250
</TABLE>
41
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- -------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
COMPUTER SOFTWARE & SERVICES --
CONTINUED
New Era of Networks, Inc. *........... 12,700 $ 860,425
Remedy Corp. *........................ 41,400 579,600
VeriSign, Inc. *...................... 5,200 800,800
Visual Networks, Inc. *............... 10,500 392,438
------------
7,980,094
------------
EDUCATION -- 1.8%
ITT Educational Services, Inc. *...... 24,700 927,794
------------
ELECTRONICS -- 9.9%
Applied Micro Circuits Corp. *........ 23,950 1,023,862
Flextronics International Ltd. *...... 25,000 1,275,000
HI/FN Inc. *.......................... 13,000 487,500
Novellus Systems, Inc. *.............. 7,000 385,875
PMC Sierra, Inc. *.................... 5,600 398,650
PRI Automation, Inc. *................ 16,300 342,300
TranSwitch Corp. *.................... 24,500 1,108,625
------------
5,021,812
------------
ENTERTAINMENT -- 0.9%
Sportsline USA, Inc. *................ 10,200 465,375
------------
HEALTH CARE -- BIOTECHNOLOGY -- 3.6%
ICOS Corp. *.......................... 17,900 604,125
MedImmune, Inc. *..................... 6,800 402,475
Sepracor, Inc. *...................... 3,700 415,325
Visible Genetics Inc. *............... 22,600 395,500
------------
1,817,425
------------
HEALTH CARE -- DRUGS -- 1.8%
Alkermes, Inc. *...................... 19,100 520,475
Anesta Corp. *........................ 18,500 417,406
------------
937,881
------------
HEALTH CARE -- PRODUCTS -- 5.9%
Biomatrix, Inc. *..................... 13,400 1,045,200
MiniMed, Inc. *....................... 9,000 914,625
Osteotech, Inc. *..................... 18,900 649,687
ResMed Inc. *......................... 13,500 381,375
------------
2,990,887
------------
HEALTH CARE -- SERVICES -- 3.0%
MedQuist, Inc. *...................... 30,300 909,000
TLC The Laser Center, Inc. *.......... 19,200 618,000
------------
1,527,000
------------
INSURANCE -- 0.9%
Annuity and Life Re (Holdings) Ltd.
*................................... 19,100 436,913
------------
OIL & GAS DRILLING EQUIPMENT -- 1.2%
Atwood Oceanics, Inc. *............... 19,900 597,000
------------
</TABLE>
42
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- -------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
RESTAURANTS -- 2.2%
Papa John's International, Inc. *..... 24,700 $ 1,089,888
------------
RETAIL -- GENERAL -- 1.8%
99 Cents Only Stores *................ 21,050 893,309
------------
RETAIL -- SPECIALTY -- 8.0%
AnnTaylor Stores Corp. *.............. 27,300 1,206,318
CSK Auto Corp. *...................... 12,900 386,194
Linens 'n Things Inc. *............... 28,000 1,270,500
Pacific Sunwear of California *....... 34,800 1,209,300
------------
4,072,312
------------
TELECOMMUNICATIONS -- 4.1%
Gilat Satellite Networks Ltd *........ 16,800 1,008,000
Metromedia Fiber Network, Inc. *...... 11,400 590,663
Viatel, Inc. *........................ 16,900 481,650
------------
2,080,313
------------
TOTAL COMMON STOCKS
(Identified Cost $40,467,712)....... 49,073,487
------------
<CAPTION>
FACE
AMOUNT
<S> <C> <C>
- -------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 5.7% OF NET ASSETS
Repurchase Agreement with State Street
Bank and Trust Co.,
dated 3/31/99 at 4.000% to be
repurchased at $2,870,319 on 4/1/99
collateralized by $2,290,000 U.S.
Treasury Bond, 8.125%, due 8/15/21
with a value of $2,931,200.......... $ 2,870,000 2,870,000
------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $2,870,000)........ 2,870,000
------------
TOTAL INVESTMENTS -- 102.7%
(IDENTIFIED COST $43,337,712) @..... 51,943,487
Liabilities, Less Cash and Other
Assets -- (2.7%).................... (1,341,709)
------------
NET ASSETS -- 100%.................... $ 50,601,778
------------
------------
</TABLE>
!See Note 1.
* Non-income producing security.
@ At March 31, 1999, the net unrealized appreciation on investments based on
cost of $43,337,712 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 $9,784,092 and $1,178,317, respectively, resulting in net
unrealized appreciation of $8,605,775.
See accompanying notes to financial statements.
43
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
<S> <C> <C>
- ------------------------------------------------------------------
COMMON STOCKS -- 91.7% OF NET ASSETS
ADVERTISING -- 1.2%
Getty Images, Inc. *.................. 54,200 $ 1,138,200
R.H. Donnelley Corp................... 207,400 3,201,737
------------
4,339,937
------------
AEROSPACE/DEFENSE -- 3.1%
AAR Corp.............................. 38,800 691,125
Alliant Techsystems, Inc. *........... 33,900 2,633,606
Gencorp, Inc.......................... 47,600 856,800
Newport News Shipbuilding, Inc........ 75,900 2,405,081
Nichols Research Corp. *.............. 73,250 1,382,594
Orbital Sciences Corp. *.............. 84,900 2,403,731
REMEC, Inc. *......................... 61,900 1,292,163
------------
11,665,100
------------
AUTO & RELATED -- 1.6%
Intermet Corp......................... 152,600 2,041,025
SPX Corp *............................ 33,100 1,669,481
Tower Automotive, Inc. *.............. 110,000 2,048,750
------------
5,759,256
------------
BANKS/SAVINGS & LOANS -- 5.9%
Bank United Corp...................... 63,300 2,587,387
Chittenden Corp. *.................... 38,400 1,022,400
City National Corp.................... 54,500 1,682,688
CNB Bancshares, Inc................... 52,980 2,132,445
Colonial BancGroup, Inc............... 105,500 1,266,000
Commercial Federal Corp............... 126,650 2,936,697
Cullen Frost Bankers, Inc............. 72,000 3,451,500
HUBCO, Inc............................ 68,200 2,288,962
Local Financial Corp. *............... 97,500 907,969
Pacific Bank, N.A..................... 13,400 281,400
Staten Island Bancorp, Inc............ 84,700 1,455,781
Western Bancorp....................... 56,800 1,757,250
------------
21,770,479
------------
BEVERAGES -- 0.4%
Whitman Corp.......................... 90,800 1,560,625
------------
BROADCASTING -- 0.8%
Hearst-Argyle Television, Inc. *...... 123,000 3,028,875
------------
BUSINESS SERVICES -- 2.4%
ACNielson Corp. *..................... 131,700 3,572,362
Deluxe Corp........................... 98,200 2,860,075
Harte-Hanks, Inc...................... 95,700 2,625,769
------------
9,058,206
------------
CHEMICALS -- SPECIALTY -- 4.4%
Cuno, Inc. *.......................... 80,900 1,132,600
Cytec Industries, Inc. *.............. 59,700 1,332,056
</TABLE>
44
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
CHEMICALS -- CONTINUED
Ferro Corp............................ 112,200 $ 2,776,950
Great Lakes Chemical Corp............. 48,900 1,797,075
Minerals Technologies Inc............. 55,400 2,659,200
OM Group, Inc......................... 60,600 1,999,800
Scotts Co. *.......................... 63,300 2,365,838
Solutia, Inc.......................... 135,200 2,349,100
------------
16,412,619
------------
COMMERCIAL SERVICES -- 2.2%
Nielsen Media Research................ 143,300 3,537,719
Viad Corp............................. 168,300 4,680,843
------------
8,218,562
------------
COMMUNICATIONS EQUIPMENT -- 1.0%
Inter-Tel, Inc........................ 96,700 1,504,894
PairGain Technologies, Inc. *......... 231,200 2,254,200
------------
3,759,094
------------
COMPUTER HARDWARE -- 1.8%
Fore Systems, Inc. *.................. 106,100 2,005,953
Quantum Corp. *....................... 38,100 685,800
Sequent Computer Systems, Inc. *...... 178,700 1,619,469
SMART Modular Technologies, Inc. *.... 87,000 1,299,562
Western Digital *..................... 132,600 1,052,513
------------
6,663,297
------------
COMPUTER SOFTWARE & SERVICES -- 2.0%
MMC Networks, Inc. *.................. 45,500 728,000
Preview Travel, Inc. *................ 49,500 940,500
Symantec Corp. *...................... 75,300 1,275,394
Visio Corp. *......................... 71,200 2,002,500
Wang Laboratories, Inc. *............. 125,000 2,453,125
------------
7,399,519
------------
DATA PROCESSING SERVICES -- 0.3%
Information Resources, Inc. *......... 192,000 1,236,000
------------
ELECTRONICS -- 5.9%
Actel Corp. *......................... 128,900 2,118,794
Alpha Industries, Inc. *.............. 123,650 2,272,069
Artesyn Technologies, Inc. *.......... 101,500 1,256,062
Atmel Corp. *......................... 122,700 1,863,506
AVX Corp.............................. 98,200 1,571,200
Cypress Semiconductor Corp. *......... 308,400 2,775,600
Dallas Semiconductor Corp............. 16,200 625,725
Litton Industries, Inc. *............. 51,500 2,961,250
Sawtek Inc. *......................... 63,600 2,146,500
Tektronix, Inc........................ 90,300 2,280,075
</TABLE>
45
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
ELECTRONICS -- CONTINUED
Vishay Intertechnology, Inc. *........ 128,740 $ 1,874,776
------------
21,745,557
------------
ENVIRONMENTAL SERVICES -- 0.6%
American States Water Co.............. 64,500 1,564,125
Tetra Tech, Inc. *.................... 38,300 806,694
------------
2,370,819
------------
FINANCIAL SERVICES -- 4.2%
AMRESCO, Inc. *....................... 194,600 1,495,988
Anthracite Mortgage Capital, Inc...... 214,000 1,605,000
Community First Bankshares, Inc....... 157,800 3,156,000
DVI, Inc. *........................... 148,600 2,210,425
Federated Investors, Inc. Class B..... 198,100 3,602,944
Imperial Credit Industries, Inc. *.... 255,000 1,864,687
UniCapital Corp. *.................... 286,700 1,827,712
------------
15,762,756
------------
FOOD -- PACKAGED & MISCELLANEOUS -- 3.7%
Corn Products International, Inc. *... 79,300 1,898,244
Dean Foods Co......................... 42,000 1,496,250
International Home Foods, Inc. *...... 112,400 1,805,425
International Multifoods Corp......... 178,700 4,165,944
Michael Foods, Inc.................... 193,100 3,680,969
Vlasic Foods International, Inc. *.... 60,600 784,012
------------
13,830,844
------------
FOREST PRODUCTS -- 0.5%
Chesapeake Corp....................... 66,300 1,798,388
------------
FREIGHT TRANSPORTATION -- 1.0%
CNF Transportation, Inc............... 46,600 1,762,063
J.B. Hunt Transport Services, Inc..... 84,000 1,764,000
------------
3,526,063
------------
HEALTH CARE -- DRUGS -- 2.1%
Biovail Corp. International *......... 73,000 2,810,500
ChiRex, Inc. *........................ 59,100 1,447,950
Jones Pharma, Inc..................... 96,600 3,356,850
------------
7,615,300
------------
HEALTH CARE -- MEDICAL TECHNOLOGY --
5.3%
ADAC Laboratories *................... 160,500 2,186,812
Beckman Coulter, Inc.................. 70,400 3,097,600
Conmed Corp. *........................ 136,875 4,243,125
Dentsply International, Inc........... 150,100 3,489,825
EndoSonics Corp. *.................... 220,100 1,430,650
Invacare Corp......................... 103,100 2,506,619
Respironics, Inc. *................... 217,300 2,865,644
------------
19,820,275
------------
</TABLE>
46
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
HEALTH CARE -- SERVICES -- 2.4%
Alternative Living Services, Inc. *... 88,700 $ 1,774,000
Capital Senior Living Communities L.P.
*................................... 131,200 926,600
Medaphis Corp. *...................... 290,100 707,119
Trigon Healthcare, Inc. *............. 123,500 4,229,875
VWR Scientific Products Corp. *....... 61,700 1,388,250
------------
9,025,844
------------
HOME BUILDERS -- 0.7%
Champion Enterprises, Inc. *.......... 128,100 2,481,938
------------
HOME PRODUCTS -- 1.8%
Furniture Brands International, Inc.
*................................... 105,800 2,340,825
Premark International, Inc............ 128,000 4,216,000
------------
6,556,825
------------
HOUSING & BUILDING MATERIALS -- 1.2%
Giant Cement Holding, Inc. *.......... 105,400 1,811,563
Shaw Industries, Inc. *............... 47,100 871,350
Southdown, Inc........................ 34,600 1,857,588
------------
4,540,501
------------
INSURANCE -- 4.3%
AmerUs Life Holdings, Inc............. 70,400 1,689,600
Arthur J. Gallagher & Co.............. 10,300 473,800
Capital Reinsurance Corp.............. 116,800 2,014,800
CMAC Investment Corp.................. 44,000 1,716,000
CNA Surety Corp....................... 161,200 1,994,850
Everest Reinsurance Holdings, Inc..... 61,000 1,902,437
Horace Mann Educators Corp............ 79,800 1,850,363
Medical Assurance, Inc. *............. 70,840 1,983,520
Protective Life Corp.................. 66,500 2,518,687
------------
16,144,057
------------
LODGING & HOTEL -- 0.5%
MeriStar Hospitality Corp. *.......... 110,127 2,002,935
------------
MACHINERY -- 0.7%
Milacron Inc.......................... 91,000 1,433,250
SpeedFam International, Inc. *........ 87,000 1,044,000
------------
2,477,250
------------
MANUFACTURING -- 3.7%
A.O. Smith Corp....................... 104,400 1,983,600
Crane Co.............................. 53,100 1,284,356
Federal Signal Corp................... 140,900 2,941,287
MascoTech, Inc........................ 124,500 1,929,750
National Service Industries, Inc...... 57,700 1,965,406
Pentair, Inc.......................... 71,700 2,419,875
Regal-Beloit Corp..................... 75,100 1,356,494
------------
13,880,768
------------
</TABLE>
47
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
METALS -- 1.0%
Bethlehem Steel Corp. *............... 140,200 $ 1,156,650
Worthington Industries, Inc........... 223,600 2,627,300
------------
3,783,950
------------
NATURAL GAS -- 2.0%
Eastern Enterprises................... 64,500 2,346,188
MCN Energy Group, Inc................. 178,100 2,860,731
Public Service Company of North
Carolina, Inc....................... 80,800 2,292,700
------------
7,499,619
------------
OFFICE EQUIPMENT -- 2.1%
Bell & Howell Co. *................... 48,500 1,421,656
Daisytek International Corp. *........ 180,400 2,999,150
HON Industries, Inc................... 65,800 1,443,488
National Computer Systems, Inc........ 81,500 1,996,750
------------
7,861,044
------------
OIL & GAS DRILLING EQUIPMENT -- 2.5%
BJ Services Co. *..................... 154,600 3,623,437
Cooper Cameron Corp. *................ 73,500 2,489,813
Santa Fe International Corp........... 176,400 3,296,475
------------
9,409,725
------------
OIL & GAS EXPLORATION -- 0.9%
Newfield Exploration Co. *............ 95,500 2,160,687
Plains Resources, Inc. *.............. 84,000 1,260,000
------------
3,420,687
------------
REAL ESTATE INVESTMENT TRUSTS -- 4.4%
Brandywine Realty Corp................ 118,000 1,917,500
Capital Automotive *.................. 230,800 2,870,575
Healthcare Realty Trust, Inc.......... 141,026 2,679,494
Liberty Property...................... 170,300 3,533,725
Pacific Gulf Properties, Inc.......... 100,700 1,812,600
Sun Communities, Inc.................. 105,000 3,333,750
------------
16,147,644
------------
REFRIGERATION SYSTEMS -- 0.6%
Hussmann International, Inc........... 155,400 2,282,438
------------
RESTAURANTS -- 1.8%
CEC Entertainment, Inc. *............. 86,900 3,117,537
Foodmaker, Inc. *..................... 53,500 1,364,250
Wendy's International, Inc............ 83,200 2,366,000
------------
6,847,787
------------
RETAIL -- FOOD -- 1.8%
Great Atlantic & Pacific Tea Company,
Inc................................. 61,400 1,842,000
Hannaford Brothers Co................. 78,500 3,566,844
Richfood Holdings, Inc................ 56,400 1,216,125
------------
6,624,969
------------
</TABLE>
48
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
RETAIL -- GENERAL -- 0.8%
Ames Department Stores, Inc. *........ 33,100 $ 1,228,837
BJ's Wholesale Club, Inc. *........... 61,300 1,620,619
------------
2,849,456
------------
RETAIL -- SPECIALTY -- 2.8%
Burlington Coat Factory Warehouse
Corp................................ 213,300 2,506,275
Claire's Stores, Inc.................. 45,100 1,358,638
Jostens, Inc.......................... 104,000 2,210,000
Ross Stores, Inc...................... 41,700 1,826,981
Talbots, Inc.......................... 65,400 1,594,125
Zale Corp. *.......................... 21,500 735,031
------------
10,231,050
------------
SECURITY SYSTEMS -- 0.7%
Borg Warner Security Corp. *.......... 144,800 2,425,400
------------
TELECOMMUNICATIONS -- 0.8%
Boston Communications Group, Inc. *... 123,800 1,207,050
Transaction Network Services, Inc.
*................................... 109,800 1,797,975
------------
3,005,025
------------
TEXTILE & APPAREL -- 0.8%
Burlington Industries, Inc. *......... 93,200 617,450
Liz Claiborne, Inc.................... 67,900 2,215,237
------------
2,832,687
------------
UTILITIES -- 3.0%
BEC Energy............................ 48,900 1,797,075
Commonwealth Energy Systems........... 39,700 1,528,450
New Jersey Resources Corp............. 30,600 1,088,213
Rochester Gas & Electric Corp......... 71,400 1,829,625
Washington Gas Light Co............... 58,300 1,319,037
WPS Resources Corp.................... 116,700 3,442,650
------------
11,005,050
------------
TOTAL COMMON STOCKS
(Identified Cost $357,982,207)...... 340,678,220
------------
WARRANTS -- 0.0% OF NET ASSETS
ENTERTAINMENT -- 0.0%
Iwerks Entertainment, Inc. *.......... 1,364 0
------------
TOTAL WARRANTS
(Identified Cost $0)................ 0
------------
</TABLE>
49
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE !
- ------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 8.4% OF NET ASSETS
Associates Corp. of North America,
4.950%, 4/01/99..................... $18,179,912 $ 18,179,912
Chevron USA Inc., 4.750%, 4/01/99..... 13,000,000 13,000,000
------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $31,179,912)....... 31,179,912
------------
TOTAL INVESTMENTS -- 100.1%
(IDENTIFIED COST $389,162,119) @...... 371,858,132
Liabilities, Less Cash and Other
Assets -- (0.1%).................... (371,665)
------------
NET ASSETS -- 100%...................... $371,486,467
------------
------------
</TABLE>
!See Note 1.
* Non-income producing security.
@ At March 31, 1999, the net unrealized depreciation on investments based on
cost of $389,162,119 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 $24,940,364 and $42,244,351, respectively, resulting in net
unrealized depreciation of $17,303,987.
See accompanying notes to financial statements.
50
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE !
<S> <C> <C> <C>
- ------------------------------------------------------------------------
BONDS AND NOTES -- 47.2% OF NET ASSETS
AUSTRALIA -- 2.1%
Queensland Treasury, 8.000%,
9/14/07........................ AUD 100,000 $ 73,530
South Australia Government
Finance Authority, Zero Coupon
Bond, 12/21/15................. 220,000 48,719
---------------
122,249
---------------
NEW ZEALAND -- 1.5%
Government of New Zealand,
8.000%, 11/15/06............... NZD 150,000 91,521
---------------
PHILIPPINES -- 3.4%
FLI Capital Cayman, 3.750%,
2/01/02 (step to 6.250% on
8/01/99) # +................... USD 150,000 126,000
MBIA, Inc., Zero Coupon Bond,
12/18/01 +..................... 100,000 76,125
---------------
202,125
---------------
SOUTH KOREA -- 2.3%
Samsung Electronics Co. Ltd.,
Zero Coupon Bond, 12/31/07 +... 75,000 74,437
Ssangyong Oil Refining Co., Inc.,
3.000%, 12/31/04 +............. 100,000 63,750
---------------
138,187
---------------
THAILAND -- 3.1%
Bangkok Bank Public Co. Ltd.,
4.589%, 3/03/04 +.............. 300,000 139,500
Loxley Public Co. Ltd., 2.500%,
4/04/01 +...................... 450,000 45,000
---------------
184,500
---------------
UNITED STATES -- 34.8%
Apple Computer, Inc., 6.500%,
2/15/04........................ 250,000 223,750
Arch Communications Group, Inc.,
Zero Coupon Bond, 3/15/08 (step
to 10.875% on 3/15/01) #....... 300,000 123,000
Baker Hughes, Inc., Zero Coupon
Bond, 5/05/08 +................ 100,000 69,500
Bell Atlantic Financial Services,
4.250%, 9/15/05 +.............. 100,000 109,750
Boston Chicken, Inc., 4.500%,
2/01/04 + ^.................... 125,000 5,000
Builders Transportation, Inc.,
8.000%, 8/15/05 + ^............ 95,000 119
Chesapeake Energy Corp., 7.875%,
3/15/04........................ 100,000 78,000
CML Group, Inc., 5.500%, 1/15/03
+ ^............................ 150,000 3,000
Columbia/HCA Healthcare Corp.,
7.050%, 12/01/27............... 50,000 39,077
Columbia/HCA Healthcare Corp.,
7.190%, 11/15/15............... 50,000 41,415
Dillon Read Structured Finance
Corp., 6.660%, 8/15/10......... 159,928 145,678
Dura Pharmaceuticals, Inc.,
3.500%, 7/15/02 +.............. 100,000 75,500
Exide Corp., 2.900%, 12/15/05
144A +......................... 125,000 69,375
Fox Family Worldwide, Inc., Zero
Coupon Bond, 11/01/07 (step to
10.250% on 11/01/02) #......... 150,000 96,000
Hyperion Telecommunications,
Inc., Zero Coupon Bond, 4/15/03
(step to 13.000% on 4/15/01)
#.............................. 150,000 123,750
Kent Electronics Corp., 4.500%,
9/01/04 +...................... 50,000 36,500
Lam Research Corp., 5.000%,
9/01/02 +...................... 150,000 126,000
Loews Corp., 3.125%, 9/15/07 +... 150,000 127,875
Nextel Communications, Inc., Zero
Coupon Bond, 9/15/07 (step to
10.650% on 9/15/02) #.......... 200,000 146,000
Pioneer Natural Resources Co.,
7.200%, 1/15/28................ 75,000 49,906
</TABLE>
51
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE !
- ------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS AND NOTES -- CONTINUED
UNITED STATES -- CONTINUED
R & B Falcon Corp., 7.375%,
4/15/18........................ USD 75,000 $ 54,289
RCN Corp., Zero Coupon Bond,
10/15/07 (step to 11.125% on
10/15/02) #.................... 175,000 118,125
Read Rite Corp., 6.500%, 9/01/04
+.............................. 100,000 60,500
Thermedics, Inc., Zero Coupon
Bond, 6/01/03 +................ 100,000 64,000
Thermo Electron Corp., 4.250%,
1/01/03 144A +................. 50,000 44,250
Woolworth Corp., 8.500%,
1/15/22........................ 50,000 36,500
---------------
2,066,859
---------------
TOTAL BONDS AND NOTES
(Identified Cost $3,327,452)... 2,805,441
---------------
<CAPTION>
SHARES
<S> <C> <C> <C>
- ------------------------------------------------------------------------
COMMON STOCKS -- 47.1% OF NET ASSETS
AUSTRALIA -- 2.0%
Southcorp........................ 29,000 118,310
---------------
FRANCE -- 4.9%
Guyenne et Gascogne.............. 400 177,420
St. Gobain....................... 700 111,050
---------------
288,470
---------------
HUNGARY -- 3.1%
MATAV............................ 34,000 181,255
---------------
ITALY -- 3.2%
ENI.............................. 30,000 191,019
---------------
NEW ZEALAND -- 4.0%
Air New Zealand, Class B......... 138,000 240,463
---------------
NORWAY -- 1.4%
Christiania Bank................. 22,000 85,841
---------------
SPAIN -- 3.1%
Mapfre Vida...................... 2,500 82,154
Sol Melia........................ 2,750 100,757
---------------
182,911
---------------
THAILAND -- 0.9%
Advanced Info Service............ 7,700 55,739
---------------
UNITED KINGDOM -- 2.2%
Boots............................ 9,000 130,241
---------------
UNITED STATES -- 22.3%
American International Group,
Inc............................ 200 24,125
Analog Devices, Inc. *........... 1,000 29,750
Apache Corp...................... 1,000 26,062
Applied Materials, Inc. *........ 500 30,844
Baker Hughes, Inc................ 1,100 26,744
</TABLE>
52
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE !
- ------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS -- CONTINUED
UNITED STATES -- CONTINUED
Biogen, Inc. *................... 300 $ 34,294
Burlington Resources, Inc........ 1,000 39,937
CVS Corp......................... 600 28,500
Dollar General Corp.............. 1,000 34,000
EMC Corp. *...................... 300 38,325
Enron Corp....................... 500 32,125
Georgia Pacific Corp............. 400 29,700
Guidant Corp..................... 400 24,200
Halliburton Co................... 800 30,800
Hasbro, Inc...................... 750 21,703
International Business Machines
Corp........................... 200 35,450
Jefferson-Pilot Corp............. 400 27,100
Kerr-McGee Corp.................. 900 29,531
McDonald's Corp.................. 800 36,250
MCI WorldCom, Inc. *............. 400 35,425
MediaOne Group, Inc. *........... 500 31,750
Medtronic, Inc................... 400 28,700
Meritor Automotive, Inc.......... 1 16
Omnicom Group, Inc............... 500 39,969
Pfizer, Inc...................... 200 27,750
Raytheon Co...................... 600 35,175
SBC Communications, Inc.......... 500 23,563
Schering-Plough Corp............. 600 33,187
Sealed Air Corp. *............... 450 22,134
Smurfit-Stone Container Corp.
*.............................. 1,400 27,037
Sprint Corp...................... 400 39,250
Staples, Inc. *.................. 1,050 34,519
Sun Microsystems, Inc. *......... 300 37,519
The Learning Company, Inc........ 7,105 206,045
Time Warner, Inc................. 500 35,531
Union Pacific Corp............... 500 26,719
Vastar Resources, Inc............ 600 28,650
Xerox Corp....................... 600 32,025
---------------
1,324,404
---------------
TOTAL COMMON STOCKS
(Identified Cost $2,590,968)... 2,798,653
---------------
PREFERRED STOCKS -- 2.4% OF NET ASSETS
JAPAN -- 2.4%
Sakura Finance, 0.750%........... 24,000,000 141,772
---------------
TOTAL PREFERRED STOCKS
(Identified Cost $186,152)..... 141,772
---------------
</TABLE>
53
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND (CONTINUED)
- -------------------------------------------------------
PORTFOLIO OF INVESTMENTS -- AS OF MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE !
- ------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENT -- 2.9% OF NET ASSETS
Repurchase Agreement with State
Street Bank and Trust Co.,
dated 3/31/99 at 4.000% to be
repurchased at $174,019 on
4/1/99 collateralized by
$140,000 U.S. Treasury Bond,
8.125%, due 8/15/21 with a
value of $179,200.............. USD 174,000 $ 174,000
---------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $174,000)..... 174,000
---------------
TOTAL INVESTMENTS -- 99.6%
(IDENTIFIED COST $6,278,572) @... 5,919,866
Cash and Other Assets, Less
Liabilities -- 0.4%............ 25,639
---------------
NET ASSETS -- 100%................. $ 5,945,505
---------------
---------------
</TABLE>
! See Note 1.
+ Convertible Bond.
# Step Bond: Coupon is zero or below market rate for initial period and then
increases at a specififed date and rate.
^ 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 March 31, 1999, the net unrealized depreciation on investments based on
cost of $6,278,572 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 $494,119 and $852,825, respectively, resulting in net
unrealized depreciation of $358,706.
KEY TO ABBREVIATIONS:
<TABLE>
<S> <C>
AUD: Australian Dollar
NZD: New Zealand Dollar
USD: United States Dollar
</TABLE>
Ten Largest Sector Holdings at March 31, 1999
as a Percentage of Net Assets
<TABLE>
<S> <C>
Telecommunications 12.2%
Oil & Gas 8.9%
Computers 8.2%
Electronics 6.7%
Retail -- General 6.4%
Financial Services 4.5%
Insurance 4.4%
Airlines 4.0%
Banking & Finance 3.6%
Retail -- Drug 3.5%
</TABLE>
See accompanying notes to financial statements.
54
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
[THIS PAGE INTENTIONALLY LEFT BLANK]
55
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
CORE GROWTH INTERNATIONAL
VALUE FUND FUND EQUITY FUND
----------- ----------- --------------
<S> <C> <C> <C>
ASSETS
Investments at value... $76,350,674 $29,074,332 $ 69,444,332
Cash................... 0 462 552
Foreign currency at
value................ 0 0 1,980,918
Receivable for:
Fund shares sold..... 3,074 0 13,275
Securities sold...... 630,541 169,680 382,015
Dividends and
interest -- net.... 143,128 11,032 154,169
Foreign tax
reclaim............ 1,578 0 67,361
Due from the adviser
(Note 3)............. 1,767 11,626 16,992
Other assets (Note
1H).................. 0 0 0
----------- ----------- --------------
77,130,762 29,267,132 72,059,614
----------- ----------- --------------
LIABILITIES
Payable for:
Securities
purchased.......... 1,714,205 291,065 948,517
Fund shares
redeemed........... 136,496 9,038 141,240
Foreign taxes........ 3,667 0 12,260
Payable to custodian
bank............... 0 0 0
Accrued expenses:
Management fees (Note
3)................. 32,349 11,940 45,425
Trustees' fees (Note
3A)................ 1,958 1,957 1,957
Administrative
fees............... 4,027 1,306 3,498
Other.................. 27,391 24,625 46,087
----------- ----------- --------------
1,920,093 339,931 1,198,984
----------- ----------- --------------
NET ASSETS............... $75,210,669 $28,927,201 $ 70,860,630
----------- ----------- --------------
----------- ----------- --------------
Net Assets consist of:
Capital paid in...... $61,382,332 $22,745,312 $ 68,456,439
Undistributed (or
Distribution in
excess of) net
investment
income............. 244,297 (49,437) 64,096
Accumulated net
realized gain
(loss)............. 3,647,965 649,796 862,816
Unrealized
appreciation
(depreciation) on:
Investments........ 9,936,075 5,581,530 1,478,844
Foreign currency
translations..... 0 0 (1,565)
----------- ----------- --------------
NET ASSETS............... $75,210,669 $28,927,201 $ 70,860,630
----------- ----------- --------------
----------- ----------- --------------
INSTITUTIONAL CLASS:
Net assets............. $74,487,338 $28,293,469 $ 70,687,807
Shares of beneficial
interest outstanding,
no par value......... 4,285,407 2,515,713 6,078,432
Net asset value and
redemption price per
Institutional
share................ $ 17.38 $ 11.25 $ 11.63
RETAIL CLASS:
Net assets............. $ 723,331 $ 633,732 $ 172,823
Shares of beneficial
interest outstanding,
no par value......... 41,707 56,820 14,911
Net asset value and
redemption price per
Retail share......... $ 17.34 $ 11.15 $ 11.59
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............ $66,414,599 $23,492,802 $ 67,965,488
----------- ----------- --------------
----------- ----------- --------------
</TABLE>
See accompanying notes to financial statements.
56
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
- -------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP MID-CAP SMALL CAP SMALL CAP
GROWTH VALUE GROWTH VALUE WORLDWIDE
FUND FUND FUND FUND FUND
----------- ----------- ------------ ------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at value... $ 4,842,594 $ 4,707,358 $ 51,943,487 $ 371,858,132 $ 5,919,866
Cash................... 0 65,803 416 0 365
Foreign currency at
value................ 0 0 0 0 58
Receivable for:
Fund shares sold..... 888,664 0 33,799 1,349,274 0
Securities sold...... 404,143 96,696 326,846 3,401,845 0
Dividends and
interest -- net.... 682 5,617 319 510,259 38,366
Foreign tax
reclaim............ 0 0 0 0 712
Due from the adviser
(Note 3)............. 12,122 12,926 4,175 1,774 14,607
Other assets (Note
1H).................. 0 0 0 0 1,890
----------- ----------- ------------ ------------- -----------
6,148,205 4,888,400 52,309,042 377,121,284 5,975,864
----------- ----------- ------------ ------------- -----------
LIABILITIES
Payable for:
Securities
purchased.......... 524,317 43,721 895,553 4,526,597 0
Fund shares
redeemed........... 18,773 0 761,038 796,766 0
Foreign taxes........ 0 33 0 0 666
Payable to custodian
bank............... 114,004 0 0 0 0
Accrued expenses:
Management fees (Note
3)................. 2,751 3,144 29,815 237,400 3,756
Trustees' fees (Note
3A)................ 1,958 1,958 1,958 1,957 1,957
Administrative
fees............... 930 636 1,752 16,682 682
Other.................. 13,443 14,783 17,148 55,415 23,298
----------- ----------- ------------ ------------- -----------
676,176 64,275 1,707,264 5,634,817 30,359
----------- ----------- ------------ ------------- -----------
NET ASSETS............... $ 5,472,029 $ 4,824,125 $ 50,601,778 $ 371,486,467 $ 5,945,505
----------- ----------- ------------ ------------- -----------
----------- ----------- ------------ ------------- -----------
Net Assets consist of:
Capital paid in...... $ 4,022,098 $ 4,936,626 $ 43,533,982 $ 401,802,787 $ 6,266,583
Undistributed (or
Distribution in
excess of) net
investment
income............. (9,065) 8,016 (123,668) 1,801,524 67,053
Accumulated net
realized gain
(loss)............. 624,572 (49,631) (1,414,311) (14,813,857) (29,435)
Unrealized
appreciation
(depreciation) on:
Investments........ 834,424 (70,886) 8,605,775 (17,303,987) (358,706)
Foreign currency
translations..... 0 0 0 0 10
----------- ----------- ------------ ------------- -----------
NET ASSETS............... $ 5,472,029 $ 4,824,125 $ 50,601,778 $ 371,486,467 $ 5,945,505
----------- ----------- ------------ ------------- -----------
----------- ----------- ------------ ------------- -----------
INSTITUTIONAL CLASS:
Net assets............. $ 5,280,303 $ 4,703,147 $ 46,309,734 $ 305,549,935 $ 5,839,232
Shares of beneficial
interest outstanding,
no par value......... 336,239 443,526 3,318,805 19,005,032 613,038
Net asset value and
redemption price per
Institutional
share................ $ 15.70 $ 10.60 $ 13.95 $ 16.08 $ 9.53
RETAIL CLASS:
Net assets............. $ 191,726 $ 120,978 $ 4,292,044 $ 63,539,885 $ 106,273
Shares of beneficial
interest outstanding,
no par value......... 12,252 11,422 308,978 3,955,659 11,185
Net asset value and
redemption price per
Retail share......... $ 15.65 $ 10.59 $ 13.89 $ 16.06 $ 9.50
ADMIN CLASS:
Net assets............. -- -- -- $ 2,396,647 --
Shares of beneficial
interest outstanding,
no par value......... -- -- -- 149,372 --
Net asset value and
redemption price per
Admin share.......... -- -- -- $ 16.04 --
Identified cost of
investments............ $ 4,008,170 $ 4,778,244 $ 43,337,712 $ 389,162,119 $ 6,278,572
----------- ----------- ------------ ------------- -----------
----------- ----------- ------------ ------------- -----------
</TABLE>
See accompanying notes to financial statements.
57
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF OPERATIONS
- -------------------------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
CORE INTERNATIONAL
VALUE GROWTH EQUITY
FUND FUND FUND
----------- ---------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends*............. $ 728,981 $ 43,234 $ 327,104
Interest............... 38,206 19,825 49,494
----------- ---------- --------------
767,187 63,059 376,598
----------- ---------- --------------
Expenses
Management fees (Note
3)................. 186,995 65,749 275,962
12b-1 fees (Retail
Class)............. 1,180 723 193
12b-1 fees (Admin
Class)............. 0 0 0
Trustees' fees and
expenses (Note
3A)................ 2,837 2,837 2,837
Administrative
fees............... 19,845 8,390 19,340
Custodian and
accounting fees.... 30,578 29,087 103,785
Transfer Agent fees
(Institutional
Class)............. 15,283 13,985 14,121
Transfer Agent fees
(Retail Class)..... 9,966 9,598 9,500
Transfer Agent fees
(Admin Class)...... 0 0 0
Audit and tax
services fees...... 9,524 9,524 11,319
Registration fees.... 10,556 11,166 10,585
Amortization of
organization
expenses (Note 1H):
Institutional
Class............ 0 0 0
Other expenses....... 10,821 7,304 10,960
----------- ---------- --------------
Total expenses....... 297,585 158,363 458,602
Less expenses waived
and reimbursed by
the investment
adviser (Note 3)... (9,358) (45,867) (90,460)
----------- ---------- --------------
Net expenses......... 288,227 112,496 368,142
----------- ---------- --------------
Net investment income
(loss)............... 478,960 (49,437) 8,456
----------- ---------- --------------
NET REALIZED GAIN (LOSS)
ON:
Investments............ 3,974,032 1,910,382 863,998
Foreign currency
transactions......... 0 0 4,055
----------- ---------- --------------
Total net realized gain
(loss)............... 3,974,032 1,910,382 868,053
----------- ---------- --------------
CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) ON:
Investments............ 6,419,108 5,457,315 6,950,810
Foreign currency
translations......... 0 0 (10,918)
----------- ---------- --------------
Total net change in
unrealized
appreciation
(depreciation)....... 6,419,108 5,457,315 6,939,892
----------- ---------- --------------
Total net realized gain
(loss) and change in
unrealized
appreciation
(depreciation)....... 10,393,140 7,367,697 7,807,945
----------- ---------- --------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
OPERATIONS............. $10,872,100 $7,318,260 $ 7,816,401
----------- ---------- --------------
----------- ---------- --------------
</TABLE>
*Net of foreign withholding taxes of $3,667, $41,493, $112, and $1,899 for the
Core Value, International Equity, Mid-Cap Value and Worldwide Funds,
respectively.
See accompanying notes to financial statements.
58
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
- -------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP
GROWTH MID-CAP SMALL CAP SMALL CAP WORLDWIDE
FUND VALUE FUND GROWTH FUND VALUE FUND FUND
------------ ----------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends*............. $ 3,089 $ 23,146 $ 5,702 $ 2,687,657 $ 16,095
Interest............... 2,504 5,164 40,219 758,500 152,703
------------ ----------- ------------ ------------ ----------
5,593 28,310 45,921 3,446,157 168,798
------------ ----------- ------------ ------------ ----------
Expenses
Management fees (Note
3)................. 10,897 14,947 124,360 1,437,592 21,025
12b-1 fees (Retail
Class)............. 128 231 3,775 79,644 117
12b-1 fees (Admin
Class)............. 0 0 0 2,490 0
Trustees' fees and
expenses (Note
3A)................ 2,837 2,837 2,837 2,837 2,837
Administrative
fees............... 3,541 3,585 8,918 92,451 4,064
Custodian and
accounting fees.... 25,548 28,980 27,646 66,973 32,946
Transfer Agent fees
(Institutional
Class)............. 9,691 10,881 10,844 37,467 10,130
Transfer Agent fees
(Retail Class)..... 9,388 9,394 9,938 13,111 9,380
Transfer Agent fees
(Admin Class)...... 0 0 0 9,909 0
Audit and tax
services fees...... 8,303 8,303 8,303 16,305 7,704
Registration fees.... 8,613 8,598 9,239 17,848 10,403
Amortization of
organization
expenses (Note 1H):
Institutional
Class............ 0 0 0 0 450
Other expenses....... 5,306 5,395 6,726 31,728 5,524
------------ ----------- ------------ ------------ ----------
Total expenses....... 84,252 93,151 212,586 1,808,355 104,580
Less expenses waived
and reimbursed by
the investment
adviser (Note 3)... (69,594) (72,991) (42,997) (6,169) (76,430)
------------ ----------- ------------ ------------ ----------
Net expenses......... 14,658 20,160 169,589 1,802,186 28,150
------------ ----------- ------------ ------------ ----------
Net investment income
(loss)............... (9,065) 8,150 (123,668) 1,643,971 140,648
------------ ----------- ------------ ------------ ----------
NET REALIZED GAIN (LOSS)
ON:
Investments............ 628,568 (23,670) 807,503 (1,356,611) 40,314
Foreign currency
transactions......... 0 3 0 0 (945)
------------ ----------- ------------ ------------ ----------
Total net realized gain
(loss)............... 628,568 (23,667) 807,503 (1,356,611) 39,369
------------ ----------- ------------ ------------ ----------
CHANGE IN UNREALIZED
APPRECIATION
(DEPRECIATION) ON:
Investments............ 937,592 310,154 9,407,535 16,199,955 737,375
Foreign currency
translations......... 0 0 0 0 18
------------ ----------- ------------ ------------ ----------
Total net change in
unrealized
appreciation
(depreciation)....... 937,592 310,154 9,407,535 16,199,955 737,393
------------ ----------- ------------ ------------ ----------
Total net realized gain
(loss) and change in
unrealized
appreciation
(depreciation)....... 1,566,160 286,487 10,215,038 14,843,344 776,762
------------ ----------- ------------ ------------ ----------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
OPERATIONS............. $ 1,557,095 $ 294,637 $ 10,091,370 $ 16,487,315 $ 917,410
------------ ----------- ------------ ------------ ----------
------------ ----------- ------------ ------------ ----------
</TABLE>
*Net of foreign withholding taxes of $3,667, $41,493, $112, and $1,899 for the
Core Value, International Equity, Mid-Cap Value and Worldwide Funds,
respectively.
See accompanying notes to financial statements.
59
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
CORE VALUE FUND
-------------------------------------------
SIX MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
----------- -------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss)..... $ 478,960 $ 718,597 $ 598,356
Net realized gain (loss)......... 3,974,032 6,348,814 6,931,274
Change in unrealized appreciation
(depreciation)................. 6,419,108 (10,463,537) 5,392,568
----------- -------------- -------------
Increase (decrease) in net
assets from operations....... 10,872,100 (3,396,126) 12,922,198
----------- -------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income.......... (958,124) 0 (590,731)
Net realized gain on
investments.................. (7,219,725) 0 (7,124,536)
RETAIL CLASS
Net investment income.......... (10,284) 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................... 4,684,896 6,711,627 15,853,992
----------- -------------- -------------
Total increase (decrease) in net
assets......................... 7,267,920 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................ $75,210,669 $ 67,942,749 $ 64,627,248
----------- -------------- -------------
----------- -------------- -------------
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period................ $ 244,297 $ 733,745 $ 15,148
----------- -------------- -------------
----------- -------------- -------------
</TABLE>
See accompanying notes to financial statements.
60
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH FUND
-------------------------------------------
SIX MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
----------- -------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss)..... $ (49,437) $ (74,749) $ (92,402)
Net realized gain (loss)......... 1,910,382 4,122,682 8,211,774
Change in unrealized appreciation
(depreciation)................. 5,457,315 (6,052,994) (649,029)
----------- -------------- -------------
Increase (decrease) in net
assets from operations....... 7,318,260 (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........... 2,969,052 (5,158,661) (6,626,458)
----------- -------------- -------------
Total increase (decrease) in net
assets......................... 3,747,381 (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................ $28,927,201 $ 25,179,820 $ 32,343,542
----------- -------------- -------------
----------- -------------- -------------
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period................ $ (49,437) $ 0 $ 0
----------- -------------- -------------
----------- -------------- -------------
</TABLE>
See accompanying notes to financial statements.
61
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
-------------------------------------------
SIX MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
----------- -------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss)..... $ 8,456 $ 898,167 $ 1,058,259
Net realized gain (loss)......... 868,053 1,083,037 9,242,680
Change in unrealized appreciation
(depreciation)................. 6,939,892 (5,068,063) (10,490,463)
----------- -------------- -------------
Increase (decrease) in net
assets from operations....... 7,816,401 (3,086,859) (189,524)
----------- -------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income.......... (829,630) 0 (834,647)
Net realized gain on
investments.................. (1,228,851) 0 (10,657,570)
RETAIL CLASS
Net investment income.......... (1,363) 0 (2,582)
Net realized gain on
investments.................. (2,608) 0 (28,988)
----------- -------------- -------------
(2,062,452) 0 (11,523,787)
----------- -------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
(NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... (3,507,374) (10,720,218) 3,472,008
----------- -------------- -------------
Total increase (decrease) in net
assets......................... 2,246,575 (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................ $70,860,630 $ 68,614,055 $ 82,421,132
----------- -------------- -------------
----------- -------------- -------------
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period................ $ 64,096 $ 886,633 $ (213)
----------- -------------- -------------
----------- -------------- -------------
</TABLE>
See accompanying notes to financial statements.
62
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP GROWTH FUND
---------------------------------------------
SIX MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997*
------------ -------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss)..... $ (9,065) $ (5,656) $ (6,248)
Net realized gain (loss)......... 628,568 21,939 156,302
Change in unrealized appreciation
(depreciation)................. 937,592 (274,944) 171,776
------------ -------------- -------------
Increase (decrease) in net
assets from operations....... 1,557,095 (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................... 1,838,686 494,979 1,714,474
------------ -------------- -------------
Total increase (decrease) in net
assets......................... 3,314,159 236,318 1,921,532
NET ASSETS
Beginning of the period.......... 2,157,870 1,921,552 20
------------ -------------- -------------
End of the period................ $ 5,472,029 $ 2,157,870 $ 1,921,552
------------ -------------- -------------
------------ -------------- -------------
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period................ $ (9,065) $ 0 $ 0
------------ -------------- -------------
------------ -------------- -------------
</TABLE>
* Commencement of operations, January 2, 1997.
See accompanying notes to financial
statements.
63
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP VALUE FUND
---------------------------------------------
SIX MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997*
------------ -------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss)..... $ 8,150 $ 6,467 $ 18,110
Net realized gain (loss)......... (23,667) 109,931 261,370
Change in unrealized appreciation
(depreciation)................. 310,154 (649,069) 268,029
------------ -------------- -------------
Increase (decrease) in net
assets from operations....... 294,637 (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................... 1,246,792 39,474 3,676,401
------------ -------------- -------------
Total increase (decrease) in net
assets......................... 1,412,818 (493,197) 3,904,484
NET ASSETS
Beginning of the period.......... 3,411,307 3,904,504 20
------------ -------------- -------------
End of the period................ $ 4,824,125 $ 3,411,307 $ 3,904,504
------------ -------------- -------------
------------ -------------- -------------
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period................ $ 8,016 $ 8,185 $ 854
------------ -------------- -------------
------------ -------------- -------------
</TABLE>
* Commencement of operations, January 2, 1997.
See accompanying notes to financial
statements.
64
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP GROWTH FUND
-------------------------------------------
SIX MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997*
----------- -------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss)..... $ (123,668) $ (50,661) $ (23,431)
Net realized gain (loss)......... 807,503 (1,954,465) (38,055)
Change in unrealized appreciation
(depreciation)................. 9,407,535 (1,631,330) 829,570
----------- -------------- -------------
Increase (decrease) in net
assets from operations....... 10,091,370 (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................... 22,279,218 16,835,145 4,495,375
----------- -------------- -------------
Total increase (decrease) in net
assets......................... 32,370,588 13,198,689 5,032,481
NET ASSETS
Beginning of the period.......... 18,231,190 5,032,501 20
----------- -------------- -------------
End of the period................ $50,601,778 $ 18,231,190 $ 5,032,501
----------- -------------- -------------
----------- -------------- -------------
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period................ $ (123,668) $ 0 $ 0
----------- -------------- -------------
----------- -------------- -------------
</TABLE>
* Commencement of operations, January 2, 1997.
See accompanying notes to financial
statements.
65
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
--------------------------------------------
SIX MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
------------ -------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss)..... $ 1,643,971 $ 2,662,996 $ 2,025,041
Net realized gain (loss)......... (1,356,611) (13,552,131) 39,443,172
Change in unrealized appreciation
(depreciation)................. 16,199,955 (60,244,726) 4,289,783
------------ -------------- -------------
Increase (decrease) in net
assets from operations....... 16,487,315 (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.................. (2,569,351) 0 (34,182,555)
RETAIL CLASS
Net investment income.......... (290,950) 0 (125,063)
Net realized gain on
investments.................. (520,647) 0 (4,383,758)
ADMIN CLASS
Net investment income.......... (3,053) 0 0
Net realized gain on
investments.................. (14,831) 0 0
------------ -------------- -------------
(5,684,799) 0 (40,338,390)
------------ -------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
(NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... 9,461,306 142,826,216 110,485,816
------------ -------------- -------------
Total increase (decrease) in net
assets......................... 20,263,822 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................ $371,486,467 $ 351,222,645 $ 279,530,290
------------ -------------- -------------
------------ -------------- -------------
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period................ $ 1,801,524 $ 2,737,523 $ 241,190
------------ -------------- -------------
------------ -------------- -------------
</TABLE>
See accompanying notes to financial statements.
66
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------
<TABLE>
<CAPTION>
WORLDWIDE FUND
---------------------------------------------
SIX MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30, DECEMBER 31,
1999 1998 1997
------------ -------------- -------------
<S> <C> <C> <C>
(UNAUDITED)
FROM OPERATIONS
Net investment income (loss)..... $ 140,648 $ 189,348 $ 287,881
Net realized gain (loss)......... 39,369 10,051 532,609
Change in unrealized appreciation
(depreciation)................. 737,393 (818,235) (570,405)
------------ -------------- -------------
Increase (decrease) in net
assets from operations....... 917,410 (618,836) 250,085
------------ -------------- -------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
INSTITUTIONAL CLASS
Net investment income.......... (246,147) 0 (284,030)
Net realized gain on
investments.................. (217,253) 0 (410,676)
RETAIL CLASS
Net investment income.......... (3,706) 0 (811)
Net realized gain on
investments.................. (3,459) 0 (1,202)
------------ -------------- -------------
(470,565) 0 (696,719)
------------ -------------- -------------
FROM CAPITAL SHARE TRANSACTIONS
(NOTE 5)
Increase (decrease) in net assets
derived from capital share
transactions................... 518,330 (17,438) 873,745
------------ -------------- -------------
Total increase (decrease) in net
assets......................... 965,175 (636,274) 427,111
NET ASSETS
Beginning of the period.......... 4,980,330 5,616,604 5,189,493
------------ -------------- -------------
End of the period................ $ 5,945,505 $ 4,980,330 $ 5,616,604
------------ -------------- -------------
------------ -------------- -------------
UNDISTRIBUTED NET INVESTMENT INCOME
End of the period................ $ 67,053 $ 176,258 $ (8,240)
------------ -------------- -------------
------------ -------------- -------------
</TABLE>
See accompanying notes to financial statements.
67
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
CORE VALUE FUND
------------------------
INSTITUTIONAL CLASS
------------------------
1999*
(UNAUDITED) 1998**
------------ ---------
<S> <C> <C>
Net asset value,
beginning of period.... $ 16.85 $ 17.64
------------ ---------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.11 0.18
Net realized and
unrealized gain
(loss) on
investments.......... 2.48 (0.97)
------------ ---------
Total from investment
operations......... 2.59 (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................. $ 17.38 $ 16.85
------------ ---------
------------ ---------
Total return (%)(a)(b)... 16.1 (4.5)
Net assets, end of period
(000).................. $ 74,487 $ 66,928
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 0.77 0.79
Ratio of net investment
income to average net
assets (%)(c).......... 1.29 1.36
Portfolio turnover
(%)(a)................. 29 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)............. 0.77 0.79
Net investment income
per share would
have been.......... $ 0.11 $ 0.18
</TABLE>
* For the six months ended March 31, 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.
68
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
CORE VALUE FUND
-----------------------------------------------------------------------------------
INSTITUTIONAL CLASS
--------------------------------------------- RETAIL CLASS
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------- 1999*
1997 1996 1995 1994 (UNAUDITED) 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 0.09 0.15(e) 0.15(e)
Net realized and
unrealized gain
(loss) on
investments.......... 4.32 2.83 3.93 (0.26) 2.47 (0.98) 4.30
--------- --------- --------- --------- ------ --------- --------
Total from investment
operations......... 4.50 3.05 4.16 (0.11) 2.56 (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 $ 17.34 $ 16.79 $ 17.62
--------- --------- --------- --------- ------ --------- --------
--------- --------- --------- --------- ------ --------- --------
Total return (%)(a)(b)... 29.2 21.2 35.2 (0.9) 15.9 (4.7) 28.9
Net assets, end of period
(000).................. $ 63,303 $ 43,715 $ 36,465 $ 25,946 $ 723 $ 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 0.93 1.07 0.84
Portfolio turnover
(%)(a)................. 64 58 60 48 29 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 3.08 2.20 6.17
Net investment income
per share would
have been.......... $ 0.18 $ 0.22 $ 0.23 $ 0.15 $ (0.11) $ 0.00(e) $ (0.73)(e)
</TABLE>
* For the six months ended March 31, 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.
69
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH FUND
------------------------
INSTITUTIONAL CLASS
------------------------
1999*
(UNAUDITED) 1998**
------------ ---------
<S> <C> <C>
Net asset value,
beginning of period.... $ 11.65 $ 12.63
------------ ---------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... (0.02) (0.03)
Net realized and
unrealized gain
(loss) on
investments.......... 3.07 (0.95)
------------ ---------
Total from investment
operations......... 3.05 (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................. $ 11.25 $ 11.65
------------ ---------
------------ ---------
Total return (%)(a)(b)... 31.9 (7.8)
Net assets, end of period
(000).................. $ 28,293 $ 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).......... (0.37) (0.32)
Portfolio turnover
(%)(a)................. 87 118
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)............. 1.13 1.02
Net investment income
per share would
have been.......... $ (0.03) $ (0.05)
</TABLE>
* For the six months ended March 31, 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.
70
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH FUND
-----------------------------------------------------------------------------------
INSTITUTIONAL CLASS
--------------------------------------------- RETAIL CLASS
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------- 1999*
1997 1996 1995 1994 (UNAUDITED) 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) (0.03) (0.03) (0.07)
Net realized and
unrealized gain
(loss) on
investments.......... 3.17 3.08 3.86 (0.45) 3.04 (0.97) 3.16
--------- --------- --------- --------- ------ --------- --------
Total from investment
operations......... 3.13 3.01 3.86 (0.47) 3.01 (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 $ 11.15 $ 11.59 $ 12.59
--------- --------- --------- --------- ------ --------- --------
--------- --------- --------- --------- ------ --------- --------
Total return (%)(a)(b)... 24.5 19.9 30.9 (3.7) 31.6 (7.9) 24.2
Net assets, end of period
(000).................. $ 32,149 $ 39,497 $ 45,011 $ 36,580 $ 634 $ 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) (0.62) (0.58) (0.42)
Portfolio turnover
(%)(a)................. 116 99 48 46 87 118 116
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 4.59 4.74 12.96
Net investment income
per share would
have been.......... $ (0.05) $ (0.07) $ 0.00 $ (0.02) $ (0.19) $ (0.19) $ (2.00)
</TABLE>
* For the six months ended March 31, 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.
71
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
FUND
------------------------
INSTITUTIONAL CLASS
------------------------
1999*
(UNAUDITED) 1998**
------------ ---------
<S> <C> <C>
Net asset value,
beginning of period.... $ 10.74 $ 11.30
------------ ---------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.00 0.14
Net realized and
unrealized gain
(loss) on
investments.......... 1.22 (0.70)
------------ ---------
Total from investment
operations......... 1.22 (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................. $ 11.63 $ 10.74
------------ ---------
------------ ---------
Total return (%)(a)(b)... 11.3 (5.0)
Net assets, end of period
(000).................. $ 70,688 $ 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).......... 0.02 1.49
Portfolio turnover
(%)(a)................. 67 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
per share would
have been.......... $ (0.04) $ 0.12
</TABLE>
* For the six months ended March 31, 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>
INTERNATIONAL EQUITY FUND
-----------------------------------------------------------------------------------
INSTITUTIONAL CLASS
--------------------------------------------- RETAIL CLASS
-----------------------------------
FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------- 1999*
1997 1996 1995 1994 (UNAUDITED) 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 0.00 0.10 0.10(e)
Net realized and
unrealized gain
(loss) on
investments.......... (0.27) 2.01 0.87 (0.38) 1.19 (0.68) (0.26)
--------- --------- --------- --------- ------ --------- --------
Total from investment
operations......... (0.12) 2.13 1.01 (0.23) 1.19 (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 $ 11.59 $ 10.70 $ 11.28
--------- --------- --------- --------- ------ --------- --------
--------- --------- --------- --------- ------ --------- --------
Total return (%)(a)(b)... (1.0) 18.3 8.7 (1.8) 11.1 (5.1) (1.3)
Net assets, end of period
(000).................. $ 82,188 $ 90,662 $ 79,488 $ 73,189 $ 173 $ 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 (0.21) 1.16 0.73
Portfolio turnover
(%)(a)................. 119 151 133 116 67 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 13.76 10.26 16.24
Net investment income
per share would
have been.......... $ 0.13(e) $ 0.12 $ 0.14 $ 0.15 $ (0.08) $ (0.67) $ (1.93)(e)
</TABLE>
* For the six months ended March 31, 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>
MID-CAP GROWTH FUND
-----------------------------------
INSTITUTIONAL CLASS
-----------------------------------
1999*
(UNAUDITED) 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)............... (0.03) (0.03) (0.03)
Net realized and
unrealized gain
(loss) on
investments.......... 5.61 (0.95) 2.26
------ --------- --------
Total from investment
operations......... 5.58 (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................. $ 15.70 $ 10.51 $ 11.49
------ --------- --------
------ --------- --------
Total return (%)(a)(b)... 54.8 (8.5) 22.7
Net assets, end of period
(000).................. $ 5,280 $ 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).......... (0.62) (0.35) (0.38)
Portfolio turnover
(%)(a)................. 152 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)............. 5.16 7.13 9.35
Net investment income
per share would
have been.......... $ (0.20) $ (0.50) $ (0.60)
</TABLE>
* For the six months ended March 31, 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.
74
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP GROWTH FUND
-----------------------------------
RETAIL CLASS
-----------------------------------
1999*
(UNAUDITED) 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)............... (0.03) (0.05) (0.06)
Net realized and
unrealized gain
(loss) on
investments.......... 5.58 (0.95) 2.27
------ --------- --------
Total from investment
operations......... 5.55 (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................. $ 15.65 $ 10.49 $ 11.49
------ --------- --------
------ --------- --------
Total return (%)(a)(b)... 54.6 (8.7) 22.4
Net assets, end of period
(000).................. $ 192 $ 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).......... (0.86) (0.60) (0.67)
Portfolio turnover
(%)(a)................. 152 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)............. 23.18 27.97 36.58
Net investment income
per share would
have been.......... $ (0.74) $ (2.08) $ (3.29)
</TABLE>
* For the six months ended March 31, 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.
75
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP VALUE FUND
-----------------------------------
INSTITUTIONAL CLASS
-----------------------------------
1999*
(UNAUDITED) 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)............... 0.02 0.02 0.07
Net realized and
unrealized gain
(loss) on
investments.......... 0.88 (1.46) 2.54
------ --------- --------
Total from investment
operations......... 0.90 (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................. $ 10.60 $ 10.09 $ 11.53
------ --------- --------
------ --------- --------
Total return (%)(a)(b)... 8.9 (12.5) 26.3
Net assets, end of period
(000).................. $ 4,703 $ 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).......... 0.43 0.22 0.74
Portfolio turnover
(%)(a)................. 99 225 130
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)............. 4.22 4.33 6.65
Net investment income
per share would
have been.......... $ (0.12) $ (0.29) $ (0.49)
</TABLE>
* For the six months ended March 31, 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.
76
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
MID-CAP VALUE FUND
-----------------------------------
RETAIL CLASS
-----------------------------------
1999*
(UNAUDITED) 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.......... 0.88 (1.45) 2.55
------ --------- --------
Total from investment
operations......... 0.88 (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................. $ 10.59 $ 10.07 $ 11.53
------ --------- --------
------ --------- --------
Total return (%)(a)(b)... 8.7 (12.7) 26.0
Net assets, end of period
(000).................. $ 121 $ 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).......... 0.06 (0.03) 0.42
Portfolio turnover
(%)(a)................. 99 225 130
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)............. 14.07 13.31 27.99
Net investment income
per share would
have been.......... $ (0.91) $ (2.40) $ (1.90)
</TABLE>
* For the six months ended March 31, 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.
77
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP GROWTH FUND
-----------------------------------
INSTITUTIONAL CLASS
-----------------------------------
1999*
(UNAUDITED) 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)............... (0.03) (0.02) (0.07)(e)
Net realized and
unrealized gain
(loss) on
investments.......... 4.15 (1.47) 1.99
------------ --------- --------
Total from investment
operations......... 4.12 (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................. $ 13.95 $ 9.83 $ 11.32
------------ --------- --------
------------ --------- --------
Total return (%)(a)(b)... 41.9 (13.2) 19.4
Net assets, end of period
(000).................. $ 46,310 $ 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).......... (0.72) (0.53) (0.65)
Portfolio turnover
(%)(a)................. 102 116 211
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)............. 1.21 2.15 5.81
Net investment income
per share would
have been.......... $ (0.04) $ (0.07) $ (0.56)(e)
</TABLE>
* For the six months ended March 31, 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.
78
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP GROWTH FUND
-----------------------------------
RETAIL CLASS
-----------------------------------
1999*
(UNAUDITED) 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)............... (0.06)(e) (0.08) (0.10)(e)
Net realized and
unrealized gain
(loss) on
investments.......... 4.15 (1.42) 1.99
------ --------- --------
Total from investment
operations......... 4.09 (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................. $ 13.89 $ 9.80 $ 11.30
------ --------- --------
------ --------- --------
Total return (%)(a)(b)... 41.7 (13.3) 19.2
Net assets, end of period
(000).................. $ 4,292 $ 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).......... (0.98) (0.80) (0.94)
Portfolio turnover
(%)(a)................. 102 116 211
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)............. 2.02 3.70 7.82
Net investment income
per share would
have been.......... $ (0.11)(e) $ (0.34) $ (0.77)(e)
</TABLE>
* For the six months ended March 31, 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.
79
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
-------------------------
INSTITUTIONAL CLASS
-------------------------
1999*
(UNAUDITED) 1998**
------------ ----------
<S> <C> <C>
Net asset value,
beginning of period.... $ 15.60 $ 18.62
------------ ----------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.08 0.12
Net realized and
unrealized gain
(loss) on
investments.......... 0.66 (3.14)
------------ ----------
Total from investment
operations......... 0.74 (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................. $ 16.08 $ 15.60
------------ ----------
------------ ----------
Total return (%)(a)(b)... 4.7 (16.2)
Net assets, end of period
(000).................. $ 305,550 $ 296,116
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 0.89 0.92
Ratio of net investment
income to average net
assets (%)(c).......... 0.90 1.04
Portfolio turnover
(%)(a)................. 55 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)............. 0.89 0.92
Net investment income
per share would
have been.......... $ 0.08 $ 0.12
</TABLE>
* For the six months ended March 31, 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.
80
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND
-----------------------------------------------------------------------------------------------------
INSTITUTIONAL CLASS
----------------------------------------------- RETAIL CLASS ADMIN CLASS
------------------------------------ ------------
FOR THE YEAR ENDED DECEMBER 31,
----------------------------------------------- 1999* 1999*
1997 1996 1995 1994 (UNAUDITED) 1998** 1997*** (UNAUDITED)
---------- ---------- --------- --------- ------------ --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 17.39 $ 15.33 $ 12.86 $ 14.13 $ 15.57 $ 18.62 $ 17.39 $ 15.54
---------- ---------- --------- --------- ------------ --------- --------- ------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.17 0.11 0.04 (0.04) 0.05 0.10 0.15(e) 0.02
Net realized and
unrealized gain
(loss) on
investments.......... 4.26 4.47 4.06 (1.12) 0.66 (3.15) 4.21 0.65
---------- ---------- --------- --------- ------------ --------- --------- ------
Total from investment
operations......... 4.43 4.58 4.10 (1.16) 0.71 (3.05) 4.36 0.67
---------- ---------- --------- --------- ------------ --------- --------- ------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... (0.15) (0.11) (0.04) 0.00 (0.08) 0.00 (0.08) (0.03)
Distributions from net
realized capital
gains................ (3.05) (2.41) (1.59) (0.11) (0.14) 0.00 (3.05) (0.14)
---------- ---------- --------- --------- ------------ --------- --------- ------
Total
distributions...... (3.20) (2.52) (1.63) (0.11) (0.22) 0.00 (3.13) (0.17)
---------- ---------- --------- --------- ------------ --------- --------- ------
Net asset value, end of
period................. $ 18.62 $ 17.39 $ 15.33 $ 12.86 $ 16.06 $ 15.57 $ 18.62 $ 16.04
---------- ---------- --------- --------- ------------ --------- --------- ------
---------- ---------- --------- --------- ------------ --------- --------- ------
Total return (%)(a)(b)... 26.0 30.4 32.1 (8.2) 4.5 (16.4) 25.6 4.2
Net assets, end of period
(000).................. $ 245,177 $ 163,625 $ 90,455 $ 73,126 $ 63,540 $ 54,060 $ 34,353 $ 2,397
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 0.94 1.19 1.25 1.27 1.16 1.19 1.25 1.50
Ratio of net investment
income to average net
assets (%)(c).......... 0.97 0.80 0.29 (0.30) 0.64 0.79 0.79 0.33
Portfolio turnover
(%)(a)................. 94 73 155 87 55 78 94 55
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 1.16 1.19 1.35 2.12
Net investment income
per share would
have been.......... $ 0.17 $ 0.11 $ 0.04 $ (0.04) $ 0.05 $ 0.10 $ 0.13(e) $ (0.02)
<CAPTION>
1998#
---------
<S> <C>
Net asset value,
beginning of period.... $ 18.62
---------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.03
Net realized and
unrealized gain
(loss) on
investments.......... (3.11)
---------
Total from investment
operations......... (3.08)
---------
LESS DISTRIBUTIONS --
Dividends from net
investment income.... 0.00
Distributions from net
realized capital
gains................ 0.00
---------
Total
distributions...... 0.00
---------
Net asset value, end of
period................. $ 15.54
---------
---------
Total return (%)(a)(b)... (16.5)
Net assets, end of period
(000).................. $ 1,046
Ratio of operating
expenses to average net
assets (%)(c)(d)....... 1.50
Ratio of net investment
income to average net
assets (%)(c).......... 0.95
Portfolio turnover
(%)(a)................. 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)............. 3.99
Net investment income
per share would
have been.......... $ (0.05)
</TABLE>
* For the six months ended March 31, 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.
81
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------
<TABLE>
<CAPTION>
WORLDWIDE FUND
------------------------
INSTITUTIONAL CLASS
------------------------
1999*
(UNAUDITED) 1998**
------------ ---------
<S> <C> <C>
Net asset value,
beginning of period.... $ 8.79 $ 9.86
------ ---------
INCOME FROM INVESTMENT
OPERATIONS --
Net investment income
(loss)............... 0.24 0.33
Net realized and
unrealized gain
(loss) on
investments.......... 1.33 (1.40)
------ ---------
Total from investment
operations......... 1.57 (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................. $ 9.53 $ 8.79
------ ---------
------ ---------
Total return (%)(a)(b)... 18.5 (10.9)
Net assets, end of period
(000).................. $ 5,839 $ 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).......... 5.02 4.37
Portfolio turnover
(%)(a)................. 50 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)............. 3.40 3.28
Net investment income
per share would
have been.......... $ 0.13 $ 0.16
</TABLE>
* For the six months ended March 31, 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.
82
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
WORLDWIDE FUND
------------------------------------------------------------
INSTITUTIONAL CLASS
--------------------
RETAIL CLASS
FOR THE YEAR ENDED -------------------------------------
DECEMBER 31,
-------------------- 1999*
1997 1996*** (UNAUDITED) 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 0.22 0.30(e) 0.38(e)
Net realized and
unrealized gain
(loss) on
investments.......... (0.10) 0.63 1.33 (1.40) (0.03)
--------- -------- ------ --------- ----------
Total from investment
operations......... 0.37 0.93 1.55 (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 $ 9.50 $ 8.76 $ 9.86
--------- -------- ------ --------- ----------
--------- -------- ------ --------- ----------
Total return (%)(a)(b)... 3.5 9.2 18.3 (11.2) 3.3
Net assets, end of period
(000).................. $ 5,597 $ 5,189 $ 106 $ 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 4.79 3.88 3.58
Portfolio turnover
(%)(a)................. 134 76 50 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 23.23 24.69 214.91
Net investment income
per share would
have been.......... $ 0.27 $ 0.13 $ (0.78) $ (1.49)(e) $ (23.33)(e)
</TABLE>
* For the six months ended March 31, 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.
83
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
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 Core Value Fund
Loomis Sayles Global Bond Fund Loomis Sayles Growth Fund
Loomis Sayles High Yield Fund Loomis Sayles International Equity Fund
Loomis Sayles Intermediate Maturity Bond Fund Loomis Sayles Mid-Cap Growth Fund
Loomis Sayles Investment Grade Bond Fund Loomis Sayles Mid-Cap Value Fund
Loomis Sayles Municipal Bond Fund Loomis Sayles Small Cap Growth Fund
Loomis Sayles Short-Term Bond Fund Loomis Sayles Small Cap Value Fund
Loomis Sayles U.S. Government Securities Fund Loomis Sayles 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.
The Equity Funds offer Institutional and Retail Class shares (the Small Cap
Value Fund also offers an Admin Class). 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 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. Certain amounts in the Statements of Changes in Net Assets for
prior periods have been reclassified to conform to current period presentations.
The following summarizes the significant accounting policies of the Equity
Funds:
A. SECURITY VALUATION -- Equity securities for which quotations are readily
available are valued at their last sale price on the exchange where primarily
traded or, if there is no reported sale during the day, at the closing bid
price. Long-term debt securities for which
84
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
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 short-term
securities and holdings of foreign currencies, foreign currency gains and losses
between trade dates and settlement dates on investment securities transactions,
sales and maturities of forward foreign currency exchange contracts, and the
difference between the amounts of daily interest accruals on the books of the
Funds and the amounts actually received resulting from changes in exchange rates
on the payable date.
Certain funds use foreign currency exchange contracts to facilitate transactions
in foreign-denominated securities. Losses may arise from changes in the value of
the foreign currency
85
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
or if the counterparties do not perform under the contracts' terms. The U.S.
dollar value of foreign currency exchange contracts is determined using
contractual currency exchange rates established at the time of each trade. The
cost of foreign currency exchange contracts is included in the cost basis of the
associated investment.
Each Fund may purchase securities of foreign issuers. Investing in securities of
foreign companies and foreign governments involves special risks and
considerations not typically associated with investing in U.S. companies and
securities of the U.S. government. These risks include revaluation of currencies
and the risk of appropriation. Moreover, the markets for securities of many
foreign companies and foreign governments 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 March 31, 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 issues, step
bonds and payment in kind bonds are accreted according to the effective interest
method. In determining net gain or loss on securities sold, the cost of
securities are determined on the identified cost basis.
Most expenses of the Trust can be directly attributed to a particular fund.
Expenses which cannot be directly attributed are apportioned among the Funds
based upon relative net assets.
86
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
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.
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 and excise tax regulations and net
operating losses. Some of these classifications may include temporary book and
tax basis differences that will reverse in subsequent periods. Dividends from
net investment income are determined on a class level. Capital gains are
determined on a Fund level.
H. ORGANIZATION EXPENSE -- Organization costs incurred by the Worldwide Fund
are being amortized over 60 months.
2. PURCHASES AND SALES OF SECURITIES -- (excluding long-term U.S. Government
securities and short-term investments) for each Fund for the six months ended
March 31, 1999 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
------------ ------------
<S> <C> <C>
Core Value Fund......................... $ 20,811,470 $ 20,807,310
Growth Fund............................. 22,709,008 25,393,108
International Equity Fund............... 47,276,625 51,040,121
Mid-Cap Growth Fund..................... 5,728,941 4,523,372
Mid-Cap Value Fund...................... 4,916,768 3,851,257
Small Cap Growth Fund................... 54,737,600 33,149,139
Small Cap Value......................... 212,951,967 196,438,415
Worldwide Fund.......................... 2,748,920 2,165,493
</TABLE>
Purchases and sales of long-term U.S. Government securities occurred in the
Worldwide Fund and totaled $101,227 and $510,383, respectively.
87
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES -- For the six months
ended March 31, 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 six months ended March 31, 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>
Core Value Fund............... 0.50% 0.85% 1.10% --
Growth Fund................... 0.50% 0.85% 1.10% --
International Equity Fund..... 0.75% 1.00% 1.25% --
Mid-Cap Growth Fund........... 0.75% 1.00% 1.25% --
Mid-Cap Value Fund............ 0.75% 1.00% 1.25% --
Small Cap Growth Fund......... 0.75% 1.00% 1.25% --
Small Cap Value Fund.......... 0.75% 1.00% 1.25% 1.50%
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 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 March 31, 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>
Core Value Fund......................... 360,472 596,966
Growth Fund............................. 186,873 1,007,923
International Equity Fund............... 1,030,178 369,366
Mid-Cap Growth Fund..................... 81,103 158,871
Mid-Cap Value Fund...................... 94,162 155,503
Small Cap Growth Fund................... 334,146 482,308
Small Cap Value Fund.................... 220,804 812,351
Worldwide Fund.......................... 501,380 82,467
</TABLE>
88
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
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 0.50%. 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 six months ended March 31, 1999, the
Funds had no borrowings under the agreement.
5. CAPITAL STOCK TRANSACTIONS -- The tables below summarize the transactions in
Fund shares for the periods indicated:
<TABLE>
<CAPTION>
LOOMIS SAYLES CORE VALUE FUND
-------------------------------------------------------------------
SIX MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
MARCH 31, 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................. 392,544 $ 6,910,490 769,213 $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................. (552,807) (9,636,225) (386,005) (6,894,590) (544,799) (9,494,995)
-------- ----------- -------- ----------- -------- -----------
Net change............... 312,980 $ 5,011,783 383,208 $ 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................. 400 $ 6,985 60,386 $ 1,150,106 107,737 $ 1,958,564
Issued in connection with
the reinvestment of
distributions.......... 6,561 107,155 0 0 8,390 145,675
Redeemed................. (25,689) (441,027) (75,106) (1,324,717) (40,972) (699,525)
-------- ----------- -------- ----------- -------- -----------
Net change............... (18,728) $ (326,887) (14,720) $ (174,611) 75,155 $ 1,404,714
-------- ----------- -------- ----------- -------- -----------
-------- ----------- -------- ----------- -------- -----------
</TABLE>
* From January 2, 1997 (commencement of class operations).
<TABLE>
<CAPTION>
LOOMIS SAYLES GROWTH FUND
----------------------------------------------------------------------
SIX MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
MARCH 31, 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................. 227,317 $ 2,448,720 102,992 $ 1,335,788 253,404 $ 3,601,402
Issued in connection with
the reinvestment of
distributions.......... 670,375 6,335,038 0 0 616,053 7,726,539
Redeemed................. (499,626) (5,921,908) (531,274) (6,847,399) (1,261,701) (18,196,471)
-------- ----------- -------- ----------- ---------- ------------
Net change............... 398,066 $ 2,861,850 (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................. 2,673 $ 27,240 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................. (6,226) (68,357) (2,408) (30,864) (64,436) (926,300)
-------- ----------- -------- ----------- ---------- ------------
Net change............... 12,259 $ 107,202 29,151 $ 352,950 15,410 $ 242,072
-------- ----------- -------- ----------- ---------- ------------
-------- ----------- -------- ----------- ---------- ------------
</TABLE>
* From January 2, 1997 (commencement of class operations).
89
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
--------------------------------------------------------------------------
SIX MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
MARCH 31, 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................. 474,773 $ 5,507,019 445,459 $ 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................. (902,851) (10,600,732) (1,342,068) (16,284,413) (1,224,562) (16,864,605)
-------- ------------ ---------- ------------ ---------- ------------
Net change............... (295,871) $ (3,519,135) (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................. 5,004 $ 58,870 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................. (4,428) (50,705) (26,716) (334,259) (43,382) (569,458)
-------- ------------ ---------- ------------ ---------- ------------
Net change............... 879 $ 11,761 (6,643) $ (78,546) 20,675 $ 283,288
-------- ------------ ---------- ------------ ---------- ------------
-------- ------------ ---------- ------------ ---------- ------------
</TABLE>
* From January 2, 1997 (commencement of class operations).
<TABLE>
<CAPTION>
LOOMIS SAYLES MID-CAP GROWTH FUND
-------------------------------------------------------------
SIX MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
MARCH 31, 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................. 219,946 $ 2,918,405 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................. (87,878) (1,212,254) (12,466) (140,005) (26,426) (302,973)
------- ----------- ------- --------- ------- ----------
Net change............... 139,040 $ 1,782,141 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................. 3,877 $ 53,370 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................. 0 0 (1) (13) (1,893) (21,751)
------- ----------- ------- --------- ------- ----------
Net change............... 4,169 $ 56,545 1,680 $ 19,979 6,403 $ 71,215
------- ----------- ------- --------- ------- ----------
------- ----------- ------- --------- ------- ----------
</TABLE>
* From January 2, 1997 (commencement of operations).
90
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
LOOMIS SAYLES MID-CAP VALUE FUND
------------------------------------------------------------
SIX MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
MARCH 31, 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................. 167,421 $1,807,732 58,746 $ 698,126 309,654 $3,352,605
Issued in connection with
the reinvestment of
distributions.......... 11,274 118,596 0 0 26,150 296,025
Redeemed................. (61,286) (679,163) (56,826) (637,787) (11,607) (141,399)
------- ---------- ------- --------- ------- ----------
Net change............... 117,409 $1,247,165 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................. 32,566 $ 347,720 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................. (33,577) (352,856) (6,398) (65,665) (6) (79)
------- ---------- ------- --------- ------- ----------
Net change............... (558) $ (373) (2,602) $ (20,865) 14,582 $ 169,170
------- ---------- ------- --------- ------- ----------
------- ---------- ------- --------- ------- ----------
</TABLE>
* From January 2, 1997 (commencement of operations).
<TABLE>
<CAPTION>
LOOMIS SAYLES SMALL CAP GROWTH FUND
-------------------------------------------------------------------
SIX MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
MARCH 31, 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................. 1,975,598 $24,564,306 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................. (404,332) (4,618,584) (74,994) (881,639) (37,420) (420,264)
--------- ----------- --------- ----------- ------- ----------
Net change............... 1,571,266 $19,945,722 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................. 230,132 $ 2,680,655 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................. (29,060) (347,159) (68,953) (765,211) (12,312) (122,151)
--------- ----------- --------- ----------- ------- ----------
Net change............... 201,072 $ 2,333,496 7,089 $ 109,892 100,817 $1,043,706
--------- ----------- --------- ----------- ------- ----------
--------- ----------- --------- ----------- ------- ----------
</TABLE>
* From January 2, 1997 (commencement of operations).
91
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
LOOMIS SAYLES SMALL CAP VALUE FUND
----------------------------------------------------------------------------
SIX MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
MARCH 31, 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................. 3,259,917 $ 54,370,380 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................. (3,501,510) (58,526,955) (2,451,824) (44,789,595) (1,877,683) (35,245,314)
---------- ------------ ---------- ------------ ---------- ------------
Net change............... 28,802 $ 361,730 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................. 1,385,369 $ 22,899,745 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................. (947,491) (15,852,247) (903,029) (16,373,245) (256,863) (5,210,721)
---------- ------------ ---------- ------------ ---------- ------------
Net change............... 484,470 $ 7,826,042 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...................... 149,546 $ 2,420,468 94,376 $ 1,573,502
Issued in connection with the
reinvestment of
distributions............... 1,071 17,884 0 0
Redeemed...................... (68,521) (1,164,818) (27,100) (416,666)
---------- ------------ ---------- ------------
Net change.................... 82,096 $ 1,273,534 67,276 $ 1,156,836
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
* From January 2, 1997 (commencement of class operations).
** From January 2, 1998 (commencement of class operations).
92
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------
MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
LOOMIS SAYLES WORLDWIDE FUND
-----------------------------------------------------------
SIX MONTHS ENDED NINE MONTHS ENDED YEAR ENDED
MARCH 31, 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................. 12,844 $120,356 3,586 $ 35,988 220,662 $ 2,356,777
Issued in connection with
the reinvestment of
distributions.......... 51,482 461,788 0 0 70,014 694,603
Redeemed................. (9,445) (90,016) (13,234) (124,115) (211,051) (2,199,192)
------ -------- ------- --------- -------- -----------
Net change............... 54,881 $492,128 (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................. 3,567 $ 33,000 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................. (1,251) (11,714) (18,687) (197,605) 0 0
------ -------- ------- --------- -------- -----------
Net change............... 2,865 $ 26,202 6,322 $ 70,689 1,998 $ 21,557
------ -------- ------- --------- -------- -----------
------ -------- ------- --------- -------- -----------
</TABLE>
* From January 2, 1997 (commencement of class operations).
93
<PAGE>
- -----------------------------------------------------------------------
ADDITIONAL FUND INFORMATION
- -------------------------------------------------------
SUPPLEMENTS TO LOOMIS SAYLES PROSPECTUSES
- -----------------------------------------------------------------------
LOOMIS SAYLES MUNICIPAL BOND FUND
SUPPLEMENT DATED JANUARY 21, 1999 TO PROSPECTUS DATED JANUARY 1, 1999
Effective February 1, 1999, Loomis Sayles has voluntarily agreed, for an
indefinite period, to limit the Management Fees for the Municipal Bond Fund to
.30% of the Fund's daily net assets. In addition, Loomis Sayles has voluntarily
agreed to limit the Fund's total operating expenses to 0.50% of the Fund's daily
net assets. This waiver and expense limitation may, however, be terminated at
any time upon notice to the Fund.
- -----------------------------------------------------------------------
LOOMIS SAYLES SHORT-TERM BOND FUND
SUPPLEMENT DATED FEBRUARY 16, 1999 TO PROSPECTUSES DATED JANUARY 1, 1999
John Hyll, Vice President of the Trust and of Loomis Sayles, serves as the sole
portfolio manager of the Short-Term Bond Fund. Mr. Hyll has been employed by
Loomis Sayles for over five years.
- -----------------------------------------------------------------------
LOOMIS SAYLES STRATEGIC VALUE FUND
SUPPLEMENT DATED FEBRUARY 22, 1999 TO PROSPECTUSES DATED JANUARY 1, 1999
Effective immediately, shares of the Loomis Sayles Strategic Value Fund are no
longer available for purchase or exchange.
- -----------------------------------------------------------------------
LOOMIS SAYLES PARTNERS SERIES
SUPPLEMENT DATED APRIL 1, 1999 TO PROSPECTUS DATED JANUARY 1, 1999
The Loomis Sayles Municipal Bond Fund may invest up to 25% of its total assets
in fixed income securities of below investment grade quality (commonly referred
to as "junk bonds").
- -----------------------------------------------------------------------
LOOMIS SAYLES EQUITY FUNDS
SUPPLEMENT DATED APRIL 1, 1999 TO PROSPECTUSES DATED JANUARY 1, 1999
The Loomis Sayles Mid-Cap Value and Loomis Sayles Small Cap Value Funds may
invest in securities of closed-end investment companies, to the extent permitted
by the Investment Company Act of 1940.
- -----------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND
SUPPLEMENT DATED APRIL 15, 1999 SUPERSEDING SUPPLEMENTS DATED MARCH 16, 1999 AND
JANUARY 20, 1999 TO PROSPECTUS DATED JANUARY 1, 1999
Robert S. Takazawa, Jr. and Mark B. Baribeau, Vice Presidents of Loomis Sayles,
serve as the portfolio managers of the Loomis Sayles Growth Fund. Both Mr.
Takazawa and Mr. Baribeau have been employed by Loomis Sayles for more than five
years.
- -----------------------------------------------------------------------
94
<PAGE>
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
LOOMIS SAYLES ADMIN CLASS PROSPECTUS
SUPPLEMENT DATED APRIL 15, 1999 TO PROSPECTUS DATED JANUARY 1, 1999
The second paragraph on page 19 under the section captioned "Fund Expenses"
should be revised as follows:
Loomis Sayles has voluntarily agreed, for an indefinite period, to
reduce its advisory fees and/or bear other Fund expenses to the extent
necessary to limit Fund total annual operating expenses of the Admin
Class of shares of each Fund to the following annual percentage rate of
the Fund's average daily net assets:
<TABLE>
<CAPTION>
FUND RATE
- -------------------------------------------------- -----
<S> <C>
Bond.............................................. 1.25%
Small Cap Value................................... 1.50%
</TABLE>
- -----------------------------------------------------------------------
LOOMIS SAYLES MID-CAP GROWTH FUND
SUPPLEMENT DATED MAY 7, 1999 SUPERSEDING SUPPLEMENT DATED JANUARY 20, 1999 TO
THE LOOMIS SAYLES FUNDS' EQUITY FUNDS PROSPECTUSES DATED JANUARY 1, 1999
Effective May 7, 1999, the name of the Loomis Sayles Mid-Cap Growth Fund is
changed to the Loomis Sayles Aggressive Growth Fund.
Christopher R. Ely, Philip C. Fine and David L. Smith, Vice Presidents of the
Trust and of Loomis Sayles, serve as portfolio managers of the Fund. Prior to
joining Loomis Sayles in 1996, Messrs. Ely, Fine and Smith were Vice Presidents
and Portfolio Managers of Keystone Investment Management Company, Inc.
The first sentence of the second paragraph of the prospectus captioned "Loomis
Sayles Mid-Cap Growth Fund" in the section captioned "Investment Objectives and
Policies" is revised to state:
The Fund generally expects to achieve its objective by investing
most of its assets in equity securities of companies with a market
capitalization that falls within the capitalization range of
companies included in the Russell Mid-Cap Growth Index.
- -----------------------------------------------------------------------
LOOMIS SAYLES INVESTMENT GRADE BOND FUND
SUPPLEMENT DATED MAY 11, 1999 TO FIXED INCOME FUNDS
INSTITUTIONAL AND RETAIL CLASS PROSPECTUSES DATED JANUARY 1, 1999
The Loomis Sayles Investment Grade Bond Fund has changed its dividend payment
policy and now will declare and pay dividends monthly. It is expected that the
first monthly dividend will be paid on or about July 7, 1999.
- -----------------------------------------------------------------------
95
<PAGE>
LOOMIS SAYLES EQUITY FUNDS
- -----------------------------------------------------------------------
[THIS PAGE INTENTIONALLY LEFT BLANK]
96
<PAGE>
BOARD OF TRUSTEES AND OFFICERS
- -----------------------------------------------------------------------
BOARD OF TRUSTEES
- -------------------------------------------------------
Earl W. Foell
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 TREASURER
Mark B. Baribeau
Philip R. Murray
James L. Carroll
Nicholas H. Palmerino
Mary C. Champagne
SECRETARY
E. John deBeer
Sheila M. Barry
Paul H. Drexler
William H. Eigen, Jr.
ASSISTANT SECRETARY
Christopher R. Ely
Bonnie S. Thompson
Quentin P. Faulkner
Philip C. Fine
Kathleen C. Gaffney
Isaac H. Green
Dean A. Gulis
Martha F. Hodgman
John Hyll
Jeffrey L. Meade
Kent P. Newmark
Dawn Alston Paige
Jeffrey C. Petherick
Lauren B. Pitalis
Peter B. Ramsden
Philip J. Schettewi
David L. Smith
Robert S. Takazawa, Jr.
Sandra P. Tichenor
Jeffrey W. Wardlow
Gregg D. Watkins
Anthony J. Wilkins
John F. Yeager III
97
<PAGE>
- -----------------------------------------------------------------------
INVESTMENT ADVISER
Loomis, Sayles & Company, L.P.
One Financial Center
Boston, Massachusetts 02111
TRANSFER AND DIVIDEND PAYING AGENT AND CUSTODIAN OF ASSETS
State Street Bank and Trust Company
Boston, Massachusetts 02102
SHAREHOLDER SERVICING AGENT
FOR STATE STREET BANK AND TRUST COMPANY
Boston Financial Data Services, Inc.
P.O. Box 8314
Boston, Massachusetts 02266
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, Massachusetts 02109
This report has been prepared for the shareholders of the Funds and is not
authorized for distribution toprospective investors in the Funds unless it is
accompanied or preceded by an effective prospectus.
