<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES AGGRESSIVE GROWTH FUND E
Q
LOOMIS SAYLES CORE VALUE FUND U
I
LOOMIS SAYLES GLOBAL TECHNOLOGY FUND T
Y
LOOMIS SAYLES GROWTH FUND
F
LOOMIS SAYLES INTERNATIONAL EQUITY FUND U
N
LOOMIS SAYLES MID-CAP VALUE FUND D
S
LOOMIS SAYLES SMALL CAP GROWTH FUND
LOOMIS SAYLES SMALL CAP VALUE FUND
LOOMIS SAYLES WORLDWIDE FUND
- -------------------------------------------------------------------------------
LOOMIS SAYLES FUNDS
PROSPECTUS - FEBRUARY 1, 2000,
AS REVISED MAY 24, 2000
Loomis, Sayles & Company, L.P., which has been an investment adviser since
1926, is the investment adviser of the Funds.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIME.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
RISK/RETURN SUMMARY 1
General Information 1
Loomis Sayles Aggressive Growth Fund 2
Loomis Sayles Core Value Fund 4
Loomis Sayles Global Technology Fund 6
Loomis Sayles Growth Fund 7
Loomis Sayles International Equity Fund 9
Loomis Sayles Mid-Cap Value Fund 11
Loomis Sayles Small Cap Growth Fund 13
Loomis Sayles Small Cap Value Fund 15
Loomis Sayles Worldwide Fund 17
SUMMARY OF PRINCIPAL RISKS 19
EXPENSES OF THE FUNDS 22
MORE INFORMATION ABOUT THE FUNDS' INVESTMENTS
AND RISK CONSIDERATIONS 24
MANAGEMENT 32
Investment Adviser 32
Portfolio Managers 32
Distribution Plans and Administrative and Other Fees 34
GENERAL INFORMATION 35
Pricing 35
How to Purchase Shares 35
How to Redeem Shares 37
How to Exchange Shares 39
Dividends and Distributions 39
Tax Consequences 39
FINANCIAL HIGHLIGHTS 40
</TABLE>
<PAGE>
RISK/RETURN SUMMARY
GENERAL INFORMATION
The following is a summary of certain key information about the Loomis Sayles
Equity Funds. You will find additional information about each Fund, including a
detailed description of the risks of an investment in each Fund, after this
summary.
This Risk/Return summary describes the Funds' objectives, principal investment
strategies, principal risks, and performance. The summary for each Fund includes
a short discussion of some of the principal risks of investing in each Fund. A
further discussion of these and other principal risks begins after this summary.
More detailed descriptions of the Funds, including some of the additional risks
associated with investing in the Funds, can be found further back in this
Prospectus after the Summary of Principal Risks. Please be sure to read this
additional information before you invest.
The Risk/Return summary includes bar charts showing the Funds' annual returns
and tables showing the Funds' average annual returns. The bar charts and tables
provide an indication of the historical risk of an investment in each Fund by
showing:
- - how the Fund's performance varied from year to year over the life of the Fund;
and
- - how the Fund's average annual returns for one year, five years, and over the
life of the Fund compared to those of a broad-based securities market index.
A Fund's past performance, of course, does not necessarily indicate how it will
perform in the future.
You can lose money by investing in a Fund. A Fund may not achieve its objective
and is not intended to be a complete investment program. An investment in a Fund
is not a deposit of a bank and is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency.
LOOMIS SAYLES FUNDS 1
<PAGE>
LOOMIS SAYLES AGGRESSIVE GROWTH FUND
INVESTMENT OBJECTIVE The Fund's investment objective is long-term capital growth
from investments in common stocks or their equivalent.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests primarily in common stocks or
other equity securities of companies with market capitalizations that fall
within the capitalization range of companies included in the Russell Mid-Cap
Growth Index, although the Fund may invest in companies of any size.
In deciding which securities to buy and sell, Loomis Sayles seeks to identify
companies that Loomis Sayles believes have distinctive products, technologies,
or services, dynamic earnings growth, prospects for high levels of
profitability, and solid management. Loomis Sayles typically does not consider
current income.
The Fund may invest any portion of its assets in securities of Canadian issuers
and up to 20% of its assets in other foreign securities, including emerging
markets securities. The Fund may engage in foreign currency hedging
transactions, options and futures transactions, and securities lending. The Fund
also may invest in real estate investment trusts and Rule 144A securities.
PRINCIPAL RISKS Among the principal risks of investing in the Fund are the
following:
- - market risk (the risk that the value of the Fund's investments will fall as a
result of movements in financial markets generally);
- - foreign risk (the risk that the value of the Fund's foreign investments will
fall as a result of foreign political, social, or economic changes);
- - currency risk (the risk that the value of the Fund's investments will fall as
a result of changes in exchange rates);
- - derivatives risk (the risk that the value of the Fund's derivative investments
will fall as a result of pricing difficulties or lack of correlation with the
underlying investment);
- - liquidity risk (the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them); and
- - management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).
<PAGE>
BAR CHART The following bar chart shows year-to-year changes in the performance
of the Fund's Institutional Class shares. Until May 7, 1999, the Fund's name was
the Loomis Sayles Mid-Cap Growth Fund.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
RETURN
1997 22.7%
1998 11.6%
1999 197.8%
</TABLE>
THE FUND'S RETURNS WILL VARY.(1) FOR EXAMPLE, DURING THE PERIOD SHOWN IN THE BAR
CHART, THE FUND'S BEST QUARTER WAS UP 83.4% (FOURTH QUARTER, 1999), AND THE
FUND'S WORST QUARTER WAS DOWN 16.1% (THIRD QUARTER, 1998).
PERFORMANCE TABLE The following table compares the performance of the Fund to
the Russell Mid-Cap Growth Index, a market capitalization weighted index of
medium capitalization stocks determined by Russell to be growth stocks as
measured by their price-to-book ratios and forecasted growth values. The index
is unmanaged, has no operating costs, and is included in the table to facilitate
your comparison of the Fund's performance to a broad-based market index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1999
- --------------------------------------------------------------------------------------
Since
Inception
1 Year (12/31/96)
<S> <C> <C>
- --------------------------------------------------------------------------------------
LOOMIS SAYLES AGGRESSIVE GROWTH FUND
Institutional Class 197.8% 59.7%
Retail Class 196.9% 59.3%
RUSSELL MID-CAP GROWTH INDEX 51.3% 29.8%
</TABLE>
THE FUND'S PERFORMANCE THROUGH DECEMBER 31, 1999 BENEFITED FROM LOOMIS SAYLES'
AGREEMENT TO LIMIT THE FUND'S EXPENSES.
- ---------------------------
(1)During the periods shown, a significant portion of the Fund's return was
attributable to its investments in initial public offerings. No assurance can be
given that the Fund will continue to be able to invest in intitial public
offerings to the same extent, or that, if made, such investments will have the
same effect on the Fund's performance.
LOOMIS SAYLES FUNDS 3
<PAGE>
LOOMIS SAYLES CORE VALUE FUND
INVESTMENT OBJECTIVE The Fund's investment objective is long-term growth of
capital and income.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests substantially all of its assets
in common stocks or their equivalent. The Fund invests primarily in medium-sized
and large-sized companies, although it may invest in companies of any size.
In deciding which securities to buy and sell, Loomis Sayles generally looks for
companies that Loomis Sayles believes are undervalued by the market in relation
to earnings, dividends, assets, and growth prospects. The Fund's investments may
include companies that have suffered significant business problems but that
Loomis Sayles believes have favorable prospects for recovery.
Loomis Sayles does not consider current income when making buy/sell decisions.
Loomis Sayles seeks to identify companies that Loomis Sayles believes have,
among other things, attractive price/earnings, price/book, and price/cash flow
ratios. Loomis Sayles generally seeks to find value by selecting individual
stocks that Loomis Sayles believes are attractive, rather than by attempting to
achieve investment growth by rotating the Fund's holdings among various sectors
of the economy.
The Fund may invest up to 20% of its assets in securities of foreign issuers,
including emerging markets securities. The Fund may engage in foreign currency
hedging transactions and also may invest in real estate investment trusts and
Rule 144A securities.
PRINCIPAL RISKS Among the principal risks of investing in the Fund are the
following:
- - market risk (the risk that the value of the Fund's investments will fall as a
result of movements in financial markets generally);
- - foreign risk (the risk that the value of the Fund's foreign investments will
fall as a result of foreign political, social, or economic changes);
- - currency risk (the risk that the value of the Fund's investments will fall as
a result of changes in exchange rates);
- - liquidity risk (the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them); and
- - management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).
<PAGE>
BAR CHART The following bar chart shows year-to-year changes in the performance
of the Fund's Institutional Class shares.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
RETURN
1992 14.1%
1993 11.9%
1994 -0.9%
1995 35.2%
1996 21.2%
1997 29.2%
1998 10.5%
1999 -1.3%
</TABLE>
THE FUND'S RETURNS WILL VARY. FOR EXAMPLE, DURING THE PERIOD SHOWN IN THE BAR
CHART, THE FUND'S BEST QUARTER WAS UP 15.7% (FOURTH QUARTER, 1998), AND THE
FUND'S WORST QUARTER WAS DOWN 12.9% (THIRD QUARTER, 1999).
PERFORMANCE TABLE The following table compares the performance of the Fund to
the Standard & Poor's 500 Index, a commonly used benchmark of U.S. equity
securities. The index is unmanaged, has no operating costs, and is included in
the table to facilitate your comparison of the Fund's performance to a
broad-based market index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1999
- -------------------------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years (5/13/91)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
LOOMIS SAYLES CORE VALUE FUND
Institutional Class -1.3% 18.2% 14.1%
Retail Class -1.6% 18.0% 14.0%
STANDARD & POOR'S 500 INDEX 21.0% 28.6% 19.4%(1)
</TABLE>
FOR PERIODS BEFORE THE INCEPTION OF RETAIL CLASS SHARES (DECEMBER 31, 1996),
PERFORMANCE SHOWN FOR THE RETAIL CLASS IS BASED ON THE PERFORMANCE OF THE FUND'S
INSTITUTIONAL CLASS SHARES, ADJUSTED TO REFLECT THE HIGHER FEES PAID BY RETAIL
CLASS SHARES. THE FUND'S PERFORMANCE THROUGH DECEMBER 31, 1999 BENEFITED FROM
LOOMIS SAYLES' AGREEMENT TO LIMIT THE FUND'S EXPENSES.
- ---------------------------
(1)Since inception data for the index covers the period from the month-end
following the Fund's inception date through December 31, 1999.
LOOMIS SAYLES FUNDS 5
<PAGE>
LOOMIS SAYLES GLOBAL TECHNOLOGY FUND
INVESTMENT OBJECTIVE The Fund's investment objective is long-term capital
growth.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests primarily in common stocks or
other equity securities of technology companies located in the United States or
abroad. Technology companies include any companies that Loomis Sayles believes
extensively use technology in their product development or operations.
In deciding which securities to buy and sell, Loomis Sayles seeks to identify
companies that Loomis Sayles believes have distinctive products, technologies,
or services, dynamic earnings growth, prospects for high levels of
profitability, and solid management. Loomis Sayles typically does not consider
current income when making buy/sell decisions.
The Fund may engage in options and futures transactions and foreign currency
hedging transactions and also may invest in securities from issuers located in
countries with emerging securities markets.
PRINCIPAL RISKS Among the principal risks of investing in the Fund are the
following:
- - technology risk (the risk that the value of the Fund's shares will fall more
as a result of adverse developments affecting the technology industries than
shares of Funds that invest in a broader range of industries);
- - market risk (the risk that the value of the Fund's investments will fall as a
result of movements in financial markets generally);
- - foreign risk (the risk that the value of the Fund's foreign investments will
fall as a result of foreign political, social, or economic changes);
- - currency risk (the risk that the value of the Fund's investments will fall as
a result of changes in exchange rates);
- - derivatives risk (the risk that the value of the Fund's derivative investments
will fall as a result of pricing difficulties or lack of correlation with the
underlying investment);
- - liquidity risk (the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them); and
- - management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).
PERFORMANCE No performance information is available for the Fund because it has
not yet been in operation for a full calendar year.
<PAGE>
LOOMIS SAYLES GROWTH FUND
INVESTMENT OBJECTIVE The Fund's investment objective is long-term growth of
capital.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests substantially all of its assets
in common stocks or their equivalent. The Fund focuses on stocks of large
capitalization companies, but the Fund may invest in companies of any size.
In deciding which securities to buy and sell, Loomis Sayles first seeks to
identify well-managed companies that Loomis Sayles believes have a leading
position within their industry. Loomis Sayles then targets those companies that
Loomis Sayles believes have the potential for strong revenue growth,
accelerating earnings growth, and rising profit margins.
Loomis Sayles typically does not consider current income when making buy/sell
decisions. Instead, Loomis Sayles looks for companies that Loomis Sayles
believes have dynamic earnings growth and prospects for high levels of
profitability, sustainable competitive advantages driven by proprietary products
or technologies, and solid management whose interests are aligned with those of
the company's shareholders.
The Fund typically buys stocks of companies that Loomis Sayles believes are
undervalued relative to future growth prospects. The Fund typically sells a
stock when Loomis Sayles believes the company's expected earnings or competitive
situation no longer meet Loomis Sayles' expectations.
The Fund may invest any portion of its assets in securities of Canadian issuers
and up to 20% of its assets in other foreign securities, including emerging
markets securities. The Fund may engage in foreign currency hedging transactions
and also may invest in Rule 144A securities.
PRINCIPAL RISKS Among the principal risks of investing in the Fund are the
following:
- - market risk (the risk that the value of the Fund's investments will fall as a
result of movements in financial markets generally);
- - foreign risk (the risk that the value of the Fund's foreign investments will
fall as a result of foreign political, social, or economic changes);
- - currency risk (the risk that the value of the Fund's investments will fall as
a result of changes in exchange rates);
- - liquidity risk (the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them); and
- - management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).
LOOMIS SAYLES FUNDS 7
<PAGE>
BAR CHART The following bar chart shows year-to-year changes in the performance
of the Fund's Institutional Class shares.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
RETURN
1992 3.9%
1993 9.2%
1994 -3.7%
1995 30.9%
1996 19.9%
1997 24.5%
1998 12.9%
1999 42.5%
</TABLE>
THE FUND'S RETURNS WILL VARY. FOR EXAMPLE, DURING THE PERIOD SHOWN IN THE BAR
CHART, THE FUND'S BEST QUARTER WAS UP 33.2% (FOURTH QUARTER, 1999), AND THE
FUND'S WORST QUARTER WAS DOWN 16.0% (THIRD QUARTER, 1998).
PERFORMANCE TABLE The following table compares the performance of the Fund to
the Standard & Poor's 500 Index, a commonly used benchmark of U.S. equity
securities. The index is unmanaged, has no operating costs, and is included in
the table to facilitate your comparison of the Fund's performance to a
broad-based market index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1999
- -------------------------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years (5/16/91)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
LOOMIS SAYLES GROWTH FUND
Institutional Class 42.5% 25.7% 18.4%
Retail Class 42.2% 25.6% 18.3%
STANDARD & POOR'S 500 INDEX 21.0% 28.6% 19.4%(1)
</TABLE>
FOR PERIODS BEFORE THE INCEPTION OF RETAIL CLASS SHARES (DECEMBER 31, 1996),
PERFORMANCE SHOWN FOR THE RETAIL CLASS IS BASED ON THE PERFORMANCE OF THE FUND'S
INSTITUTIONAL CLASS SHARES, ADJUSTED TO REFLECT THE HIGHER FEES PAID BY RETAIL
CLASS SHARES. THE FUND'S PERFORMANCE THROUGH DECEMBER 31, 1999 BENEFITED FROM
LOOMIS SAYLES' AGREEMENT TO LIMIT THE FUND'S EXPENSES.
- ---------------------------
(1)Since inception data for the index covers the period from the month-end
following the Fund's inception date through December 31, 1999.
<PAGE>
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
INVESTMENT OBJECTIVE The Fund's investment objective is high total investment
return through a combination of capital appreciation and current income.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests primarily in common stocks or
other equity securities issued by companies headquartered or organized outside
the United States. The Fund generally focuses on stocks of larger companies, but
the Fund may invest in securities issued by companies of any size and in
securities from countries with emerging markets.
In deciding which securities to buy and sell, Loomis Sayles seeks to identify
companies that Loomis Sayles believes have distinctive products, technologies,
or services, dynamic earnings growth, prospects for high levels of
profitability, and solid management. Loomis Sayles typically does not consider
current income when making buy/sell decisions.
The Fund may engage in foreign currency hedging transactions and options and
futures transactions and also may invest in real estate investment trusts,
Rule 144A securities and, to the extent permitted by the Investment Company Act
of 1940, securities of closed-end investment companies.
PRINCIPAL RISKS Among the principal risks of investing in the Fund are the
following:
- - foreign risk (the risk that the value of the Fund's foreign investments will
fall as a result of foreign political, social, or economic changes);
- - currency risk (the risk that the value of the Fund's investments will fall as
a result of changes in exchange rates);
- - market risk (the risk that the value of the Fund's investments will fall as a
result of movements in financial markets generally);
- - derivatives risk (the risk that the value of the Fund's derivative investments
will fall as a result of pricing difficulties or lack of correlation with the
underlying investment);
- - liquidity risk (the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them); and
- - management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).
LOOMIS SAYLES FUNDS 9
<PAGE>
BAR CHART The following bar chart shows year-to-year changes in the performance
of the Fund's Institutional Class shares.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
RETURN
1992 -5.1%
1993 38.5%
1994 -1.8%
1995 8.7%
1996 18.3%
1997 -1.0%
1998 9.3%
1999 90.2%
</TABLE>
THE FUND'S RETURNS WILL VARY. FOR EXAMPLE, DURING THE PERIOD SHOWN IN THE BAR
CHART, THE FUND'S BEST QUARTER WAS UP 65.8% (FOURTH QUARTER, 1999), AND THE
FUND'S WORST QUARTER WAS DOWN 12.7% (THIRD QUARTER, 1998).
PERFORMANCE TABLE The following table compares the performance of the Fund to
the MSCI EAFE Index, an index that tracks the performance of more than 1,000
foreign stocks from 20 countries. The index is unmanaged, has no operating
costs, and is included in the table to facilitate your comparison of the Fund's
performance to a broad-based market index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1999
- -------------------------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years (5/10/91)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
LOOMIS SAYLES INTERNATIONAL EQUITY FUND
Institutional Class 90.2% 21.5% 15.8%
Retail Class 89.5% 21.3% 15.6%
MSCI EAFE INDEX 27.0% 12.8% 10.4%(1)
</TABLE>
FOR PERIODS BEFORE THE INCEPTION OF RETAIL CLASS SHARES (DECEMBER 31, 1996),
PERFORMANCE SHOWN FOR RETAIL CLASS SHARES IS BASED ON THE PERFORMANCE OF THE
FUND'S INSTITUTIONAL CLASS SHARES, ADJUSTED TO REFLECT THE HIGHER FEES PAID BY
RETAIL CLASS SHARES. THE FUND'S PERFORMANCE THROUGH DECEMBER 31, 1999 BENEFITED
FROM LOOMIS SAYLES' AGREEMENT TO LIMIT THE FUND'S EXPENSES.
- ---------------------------
- -(1)Since inception data for the index covers the period from the month-end
following the Fund's inception date through December 31, 1999.
<PAGE>
LOOMIS SAYLES MID-CAP VALUE FUND
INVESTMENT OBJECTIVE The Fund's investment objective is long-term capital growth
from investments in common stocks or their equivalent.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests primarily in equity securities
of companies with market capitalizations that fall within the capitalization
range of companies included in the Standard & Poor's Mid-Cap 400 Index.
In deciding which securities to buy and sell, Loomis Sayles generally looks for
companies that Loomis Sayles believes are undervalued by the market in relation
to earnings, dividends, assets, and growth prospects. The Fund's investments may
include companies that have suffered significant business problems but that
Loomis Sayles believes have favorable prospects for recovery.
Loomis Sayles does not consider current income when making buy/sell decisions.
Loomis Sayles seeks to identify companies that Loomis Sayles believes have,
among other things, attractive price/earnings, price/book, and price/cash flow
ratios. Loomis Sayles generally seeks to find value by selecting individual
stocks that Loomis Sayles believes are attractive, rather than by attempting to
achieve investment growth by rotating the Fund's holdings among various sectors
of the economy.
The Fund may invest any portion of its assets in securities of Canadian issuers
and up to 20% of its assets in other foreign securities, including emerging
markets securities. The Fund may engage in foreign currency hedging
transactions, options and futures transactions, and securities lending. The Fund
also may invest in real estate investment trusts, Rule 144A securities, and, to
the extent permitted by the Investment Company Act of 1940, closed-end
investment companies.
PRINCIPAL RISKS Among the principal risks of investing in the Fund are the
following:
- - market risk (the risk that the value of the Fund's investments will fall as a
result of movements in financial markets generally);
- - foreign risk (the risk that the value of the Fund's foreign investments will
fall as a result of foreign political, social, or economic changes);
- - currency risk (the risk that the value of the Fund's investments will fall as
a result of changes in exchange rates);
- - derivatives risk (the risk that the value of the Fund's derivative investments
will fall as a result of pricing difficulties or lack of correlation with the
underlying investment);
- - liquidity risk (the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them); and
- - management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).
LOOMIS SAYLES FUNDS 11
<PAGE>
BAR CHART The following bar chart shows year-to-year changes in the performance
of the Fund's Institutional Class shares.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
RETURN
1997 26.3%
1998 2.9%
1999 6.7%
</TABLE>
THE FUND'S RETURNS WILL VARY. FOR EXAMPLE, DURING THE PERIOD SHOWN IN THE BAR
CHART, THE FUND'S BEST QUARTER WAS UP 17.6% (FOURTH QUARTER, 1998), AND THE
FUND'S WORST QUARTER WAS DOWN 19.0% (THIRD QUARTER, 1998).
PERFORMANCE TABLE The following table compares the performance of the Fund to
the Standard & Poor's Mid-Cap 400 Index, an index that tracks the performance of
stocks of 400 mid-sized companies. The index is unmanaged, has no operating
costs, and is included in the table to facilitate your comparison of the Fund's
performance to a broad-based market index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1999
- --------------------------------------------------------------------------------------
Since
Inception
1 Year (12/31/96)
<S> <C> <C>
- --------------------------------------------------------------------------------------
LOOMIS SAYLES MID-CAP VALUE FUND
Institutional Class 6.7% 11.5%
Retail Class 6.5% 11.2%
STANDARD & POOR'S MID-CAP 400 INDEX 14.7% 21.8%
</TABLE>
THE FUND'S PERFORMANCE THROUGH DECEMBER 31, 1999 BENEFITED FROM LOOMIS SAYLES'
AGREEMENT TO LIMIT THE FUND'S EXPENSES.
<PAGE>
LOOMIS SAYLES SMALL CAP GROWTH FUND
INVESTMENT OBJECTIVE The Fund's investment objective is long-term capital growth
from investments in common stocks or their equivalent.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests primarily in equity securities
of companies with market capitalizations that fall within the capitalization
range of the Russell 2000 Index, an index that tracks stocks of 2,000 of the
smallest U.S. companies. The Fund may invest the rest of its assets in larger
companies.
In deciding which securities to buy and sell, Loomis Sayles seeks to identify
companies that Loomis Sayles believes have distinctive products, technologies,
or services, dynamic earnings growth, prospects for high levels of
profitability, and solid management. Loomis Sayles typically does not consider
current income when making buy/sell decisions.
The Fund may invest any portion of its assets in securities of Canadian issuers
and up to 20% of its assets in other foreign securities, including emerging
markets securities. The Fund may engage in foreign currency hedging
transactions, options and futures transactions, and securities lending. The Fund
also may invest in Rule 144A securities.
PRINCIPAL RISKS Among the principal risks of investing in the Fund are the
following:
- - market risk (the risk that the value of the Fund's investments will fall as a
result of movements in financial markets generally);
- - foreign risk (the risk that the value of the Fund's foreign investments will
fall as a result of foreign political, social, or economic changes);
- - currency risk (the risk that the value of the Fund's investments will fall as
a result of changes in exchange rates);
- - derivatives risk (the risk that the value of the Fund's derivative investments
will fall as a result of pricing difficulties or lack of correlation with the
underlying investment);
- - liquidity risk (the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them); and
- - management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).
LOOMIS SAYLES FUNDS 13
<PAGE>
BAR CHART The following bar chart shows year-to-year changes in the performance
of the Fund's Institutional Class shares.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
RETURN
1997 19.4%
1998 18.7%
1999 91.8%
</TABLE>
THE FUND'S RETURNS WILL VARY. FOR EXAMPLE, DURING THE PERIOD SHOWN IN THE BAR
CHART, THE FUND'S BEST QUARTER WAS UP 54.0% (FOURTH QUARTER, 1999), AND THE
FUND'S WORST QUARTER WAS DOWN 21.9% (THIRD QUARTER, 1998).
PERFORMANCE TABLE The following table compares the performance of the Fund to
the Russell 2000 Index. The index is unmanaged, has no operating costs, and is
included in the table to facilitate your comparison of the Fund's performance to
a broad-based market index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1999
- --------------------------------------------------------------------------------------
Since
Inception
1 Year (12/31/96)
<S> <C> <C>
- --------------------------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP GROWTH FUND
Institutional Class 91.8% 39.6%
Retail Class 91.3% 39.3%
RUSSELL 2000 INDEX 43.1% 17.8%
</TABLE>
THE FUND'S PERFORMANCE THROUGH DECEMBER 31, 1999 BENEFITED FROM LOOMIS SAYLES'
AGREEMENT TO LIMIT THE FUND'S EXPENSES.
<PAGE>
LOOMIS SAYLES SMALL CAP VALUE FUND
INVESTMENT OBJECTIVE The Fund's investment objective is long-term capital growth
from investments in common stocks or their equivalents.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests primarily in equity securities
of companies with market capitalizations that fall within the capitalization
range of the Russell 2000 Index, an index that tracks stocks of 2,000 of the
smallest U.S. companies. The Fund may invest the rest of its assets in larger
companies.
In deciding which securities to buy and sell, Loomis Sayles generally looks for
companies that Loomis Sayles believes are undervalued by the market in relation
to earnings, dividends, assets, and growth prospects. The Fund's investments may
include companies that have suffered significant business problems but that
Loomis Sayles believes have favorable prospects for recovery.
Loomis Sayles does not consider current income when making buy/sell decisions.
Loomis Sayles seeks to identify companies that Loomis Sayles believes have,
among other things, attractive price/earnings, price/book, and price/cash flow
ratios. Loomis Sayles generally seeks to find value by selecting individual
stocks that Loomis Sayles believes are attractive, rather than by attempting to
achieve investment growth by rotating the Fund's holdings among various sectors
of the economy.
The Fund may invest up to 20% of its assets in securities of foreign issuers,
including emerging markets securities. The Fund may engage in foreign currency
hedging transactions and also may invest in real estate investment trusts,
Rule 144A securities, and, to the extent permitted by the Investment Company Act
of 1940, securities of closed-end investment companies.
PRINCIPAL RISKS Among the principal risks of investing in the Fund are the
following:
- - market risk (the risk that the value of the Fund's investments will fall as a
result of movements in financial markets generally);
- - foreign risk (the risk that the value of the Fund's foreign investments will
fall as a result of foreign political, social, or economic changes);
- - currency risk (the risk that the value of the Fund's investments will fall as
a result of changes in exchange rates);
- - liquidity risk (the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them); and
- - management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).
LOOMIS SAYLES FUNDS 15
<PAGE>
BAR CHART The following bar chart shows year-to-year changes in the performance
of the Fund's Institutional Class shares.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
RETURN
1992 13.1%
1993 24.7%
1994 -8.2%
1995 32.1%
1996 30.4%
1997 26.0%
1998 -1.1%
1999 0.4%
</TABLE>
THE FUND'S RETURNS WILL VARY. FOR EXAMPLE, DURING THE PERIOD SHOWN IN THE BAR
CHART, THE FUND'S BEST QUARTER WAS UP 18.1% (FOURTH QUARTER, 1998), AND THE
FUND'S WORST QUARTER WAS DOWN 18.6% (THIRD QUARTER, 1998).
PERFORMANCE TABLE The following table compares the performance of the Fund to
the Russell 2000 Index. The index is unmanaged, has no operating costs, and is
included in the table to facilitate your comparison of the Fund's performance to
a broad-based market index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1999
- -------------------------------------------------------------------------------------------------------
Since
Inception
1 Year 5 Years (5/13/91)
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
LOOMIS SAYLES SMALL CAP VALUE FUND
Institutional Class 0.4% 16.6% 16.1%
Retail Class 0.0% 16.4% 16.0%
Admin Class -0.3% 16.2% 15.9%
RUSSELL 2000 INDEX 21.3% 16.7% 14.6%(1)
</TABLE>
FOR PERIODS BEFORE THE INCEPTION OF RETAIL CLASS SHARES (DECEMBER 31, 1996) AND
ADMIN CLASS SHARES (JANUARY 2, 1998), PERFORMANCE SHOWN FOR THOSE CLASSES IS
BASED ON THE PERFORMANCE OF THE FUND'S INSTITUTIONAL CLASS SHARES, ADJUSTED TO
REFLECT THE HIGHER FEES PAID BY RETAIL CLASS AND ADMIN CLASS SHARES. THE FUND'S
PERFORMANCE THROUGH DECEMBER 31, 1999 BENEFITED FROM LOOMIS SAYLES' AGREEMENT TO
LIMIT THE FUND'S EXPENSES.
- ---------------------------
(1)Since inception data for the index covers the period from the month-end
following the Fund's inception date through December 31, 1999.
<PAGE>
LOOMIS SAYLES WORLDWIDE FUND
INVESTMENT OBJECTIVE The Fund's investment objective is high total investment
return through a combination of capital appreciation and current income.
PRINCIPAL INVESTMENT STRATEGIES The Fund invests primarily in equity and fixed
income securities of U.S. and foreign issuers, including securities from issuers
located in countries with emerging securities markets. Loomis Sayles' Global
Asset Allocation Group allocates the Fund's assets among the following four
sectors:
- - Domestic equities.
- - International equities.
- - Domestic fixed income securities.
- - International fixed income securities.
In deciding how to allocate the Fund's assets among the four sectors, Loomis
Sayles' Global Asset Allocation Group attempts to determine the relative
attractiveness of each of the four sectors based on fundamental factors such as
economic cycles, relative interest rates, stock market valuations, and currency
considerations.
In deciding which domestic equity securities to buy and sell, Loomis Sayles
generally looks for companies that Loomis Sayles believes have the potential for
superior earnings growth relative to current value.
In deciding which international equity securities to buy and sell, Loomis Sayles
generally looks for companies that Loomis Sayles believes have the potential for
superior earnings growth.
In deciding which domestic and international fixed income securities to buy and
sell, Loomis Sayles generally looks for securities that Loomis Sayles believes
are undervalued and have the potential for credit upgrades. Loomis Sayles may
hedge currency risk for the Fund if Loomis Sayles believes the outlook for a
particular foreign currency is unfavorable.
The Fund may engage in foreign currency hedging transactions and options and
futures transactions. The Fund also may invest in collateralized mortgage
obligations, zero coupon securities, when-issued securities, real estate
investment trusts, and Rule 144A securities.
PRINCIPAL RISKS Among the principal risks of investing in the Fund are the
following:
- - foreign risk (the risk that the value of the Fund's foreign investments will
fall as a result of foreign political, social, or economic changes);
- - currency risk (the risk that the value of the Fund's investments will fall as
a result of changes in exchange rates);
- - market risk (the risk that the value of the Fund's investments will fall as a
result of movements in financial markets generally);
- - credit risk (the risk that companies in which the Fund invests, or with which
it does business, will fail financially, and be unwilling or unable to meet
their obligations to the Fund);
LOOMIS SAYLES FUNDS 17
<PAGE>
- - derivatives risk (the risk that the value of the Fund's derivative investments
will fall as a result of pricing difficulties or lack of correlation with the
underlying investment);
- - liquidity risk (the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them); and
- - management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).
BAR CHART The following bar chart shows year-to-year changes in the performance
of the Fund's Institutional Class shares.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
RETURN
1997 3.5%
1998 3.0%
1999 60.5%
</TABLE>
THE FUND'S RETURNS WILL VARY. FOR EXAMPLE, DURING THE PERIOD SHOWN IN THE BAR
CHART, THE FUND'S BEST QUARTER WAS UP 45.1% (FOURTH QUARTER, 1999), AND THE
FUND'S WORST QUARTER WAS DOWN 10.8% (THIRD QUARTER, 1998).
PERFORMANCE TABLE The following table compares the performance of the Fund to
the Standard & Poor's 500 Index, a commonly used benchmark of U.S. equity
securities. The index is unmanaged, has no operating costs, and is included in
the table to facilitate your comparison of the Fund's performance to a
broad-based market index.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF DECEMBER 31, 1999
- -------------------------------------------------------------------------------------
Since
Inception
1 Year (5/1/96)
<S> <C> <C>
- -------------------------------------------------------------------------------------
LOOMIS SAYLES WORLDWIDE FUND
Institutional Class 60.5% 18.6%
Retail Class 60.1% 18.2%
STANDARD & POOR'S 500 INDEX 21.0% 26.6%(1)
</TABLE>
FOR PERIODS BEFORE THE INCEPTION OF RETAIL CLASS SHARES (DECEMBER 31, 1996),
PERFORMANCE SHOWN FOR THE RETAIL CLASS IS BASED ON THE PERFORMANCE OF THE FUND'S
INSTITUTIONAL CLASS SHARES, ADJUSTED TO REFLECT THE HIGHER FEES PAID BY RETAIL
CLASS SHARES. THE FUND'S PERFORMANCE THROUGH DECEMBER 31, 1999 BENEFITED FROM
LOOMIS SAYLES' AGREEMENT TO LIMIT THE FUND'S EXPENSES.
- ---------------------------
(1)Since inception data for the index covers the period from the month-end
following the Fund's inception date through December 31, 1999.
<PAGE>
SUMMARY OF PRINCIPAL RISKS
The value of your investment in a Fund will fluctuate with changes in the values
of the Fund's investments. Many factors can affect those values. This section
describes the principal risks that may affect a Fund's portfolio as a whole. All
Funds could be subject to additional principal risks because the types of
investments made by each Fund can change over time.
MARKET RISK
This is the risk that the value of a Fund's investments will change as financial
markets fluctuate and that prices overall may decline. The value of a company's
stock may fall as a result of factors that directly relate to that company, such
as decisions made by its management or lower demand for the company's products
or services. A stock's value also may fall because of factors affecting not just
the company, but companies in its industry or in a number of different
industries, such as increases in production costs. The value of a company's
stock also may be affected by changes in financial market conditions, such as
changes in interest rates or currency exchange rates. In addition, a company's
stock generally pays dividends only after the company makes required payments to
holders of its bonds or other debt. For this reason, the value of the stock will
usually react more strongly than bonds and other fixed income securities to
actual or perceived changes in the company's financial condition or prospects.
Market risk generally is greater for Funds that invest substantially in small
and medium-sized companies, such as the Loomis Sayles Aggressive Growth Fund,
the Loomis Sayles Mid-Cap Value Fund, the Loomis Sayles Small Cap Growth Fund,
and the Loomis Sayles Small Cap Value Fund, since these companies tend to be
more vulnerable to adverse developments than large companies.
FOREIGN RISK
This is the risk associated with investments in issuers located in foreign
countries. A Fund's investments in foreign securities may experience more rapid
and extreme changes in value than investments in securities of U.S. companies.
The securities markets of many foreign countries are relatively small, with a
limited number of issuers and a small number of securities. In addition, foreign
companies often are not subject to the same degree of regulation as U.S.
companies. Reporting, accounting, and auditing standards of foreign countries
differ, in some cases significantly, from U.S. standards. Nationalization,
expropriation or confiscatory taxation, currency blockage, political changes, or
diplomatic developments can cause the value of a Fund's investments in a foreign
country to decline. In the event of nationalization, expropriation, or other
confiscation, a Fund that invests in foreign securities could lose its entire
investment.
LOOMIS SAYLES FUNDS 19
<PAGE>
Funds that may invest in emerging markets, such as the Loomis Sayles Global
Technology Fund, the Loomis Sayles International Equity Fund, and the Loomis
Sayles Worldwide Fund, may face greater foreign risk since emerging market
countries may be more likely to experience political and economic instability.
CURRENCY RISK
This is the risk that fluctuations in exchange rates between the U.S. dollar and
foreign currencies may cause the value of a Fund's investments to decline. Each
of the Funds is subject to currency risk because it may invest in securities
denominated in, or receiving revenues in, foreign currencies.
LEVERAGING RISK
When a Fund borrows money or otherwise leverages its portfolio, the value of an
investment in the Fund will be more volatile, and all other risks generally are
compounded. Since the Funds may create leverage by using investments such as
repurchase agreements, inverse floating rate instruments or derivatives, or by
borrowing money, each Fund faces this risk.
DERIVATIVES RISK
Each Fund may use derivatives, which are financial contracts whose value depends
upon or is derived from the value of an underlying asset, reference rate, or
index. Examples of derivatives include options, futures, and swap transactions.
The Funds may use derivatives as part of a strategy designed to reduce other
risks ("hedging"). The Funds also may use derivatives to earn income, enhance
yield, and broaden Fund diversification. This use of derivatives entails greater
risk than using derivatives solely for hedging purposes. Funds that use
derivatives also face additional risks, such as the credit risk of the other
party to a derivative contract, the risk of difficulties in pricing and
valuation, and the risk that changes in the value of a derivative may not
correlate perfectly with relevant assets, rates, or indices.
LIQUIDITY RISK
Liquidity risk exists when particular investments are difficult to purchase or
sell, possibly preventing a Fund from selling out of these illiquid securities
at an advantageous price. Derivatives and securities that involve substantial
credit risk tend to involve greater liquidity risk. In addition, liquidity risk
tends to increase to the extent a Fund invests in securities whose sale may be
restricted by law or by contract, such as Rule 144A securities.
<PAGE>
MANAGEMENT RISK
Management risk is the risk that Loomis Sayles' investment techniques could fail
to achieve a Fund's objective and could cause your investment in a Fund to lose
value. Each Fund is subject to management risk because each Fund is actively
managed by Loomis Sayles. Loomis Sayles will apply its investment techniques and
risk analyses in making investment decisions for each Fund, but there can be no
guarantee that Loomis Sayles' decisions will produce the desired results. For
example, in some cases derivative and other investment techniques may be
unavailable or Loomis Sayles may determine not to use them, even under market
conditions where their use could have benefited a Fund.
CREDIT RISK
This is the risk that the issuer or the guarantor of a fixed income security, or
the counterparty to an over-the-counter transaction, will be unable or unwilling
to make timely payments of interest or principal or to otherwise honor its
obligations. Each of the Funds may be subject to credit risk to the extent that
it invests in fixed income securities or over-the-counter transactions.
Funds that may invest a significant portion of their assets in foreign fixed
income securities, such as the Loomis Sayles Worldwide Fund, are subject to
increased credit risk because of the difficulties of requiring foreign entities
to honor their contractual commitments.
Funds that invest in lower rated fixed income securities ("junk bonds") are
subject to greater credit risk and market risk than Funds that invest in higher
quality fixed income securities. Lower rated fixed income securities are
considered predominantly speculative with respect to the ability of the issuer
to make timely principal and interest payments.
LOOMIS SAYLES FUNDS 21
<PAGE>
EXPENSES OF THE FUNDS
The following table presents the expenses that you would pay if you buy and hold
shares of a Fund.
None of the Funds imposes a sales charge, a redemption fee, or an exchange fee.
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
<TABLE>
<CAPTION>
Fee
Total Annual Waiver/
Management Distribution Other Fund Operating Reimburse- Net
Loomis Sayles Fund/Class Fees (12b-1) Fees Expenses Expenses ment** Expenses**
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Aggressive Growth Fund
Institutional Class .75% none 2.21% 2.96% 1.96% 1.00%
Retail Class .75% .25% 8.05% 9.05% 7.80% 1.25%
- ----------------------------------------------------------------------------------------------------
Core Value Fund
Institutional Class .50% none .28% .78% none .78%
Retail Class .50% .25% 2.60% 3.35% 2.25% 1.10%
- ----------------------------------------------------------------------------------------------------
Global Technology Fund*
Institutional Class 1.00% none .95% 1.95% .45% 1.50%
Retail Class 1.00% .25% 1.08% 2.33% .58% 1.75%
- ----------------------------------------------------------------------------------------------------
Growth Fund
Institutional Class .50% none .68% 1.18% .33% .85%
Retail Class .50% .25% 3.68% 4.43% 3.33% 1.10%
- ----------------------------------------------------------------------------------------------------
International Equity
Fund
Institutional Class .75% none .47% 1.22% .22% 1.00%
Retail Class .75% .25% 11.33% 12.33% 11.08% 1.25%
- ----------------------------------------------------------------------------------------------------
Mid-Cap Value Fund
Institutional Class .75% none 3.26% 4.01% 3.01% 1.00%
Retail Class .75% .25% 12.62% 13.62% 12.37% 1.25%
- ----------------------------------------------------------------------------------------------------
Small Cap Growth Fund
Institutional Class .75% none .36% 1.11% .11% 1.00%
Retail Class .75% .25% .80% 1.80% .55% 1.25%
- ----------------------------------------------------------------------------------------------------
Small Cap Value Fund
Institutional Class .75% none .15% .90% none .90%
Retail Class .75% .25% .20% 1.20% none 1.20%
Admin Class .75% .25% .70%*** 1.70% 0.20% 1.50%
- ----------------------------------------------------------------------------------------------------
Worldwide Fund
Institutional Class .75% none 2.71% 3.46% 2.46% 1.00%
Retail Class .75% .25% 19.19% 20.19% 18.94% 1.25%
- ----------------------------------------------------------------------------------------------------
* OTHER EXPENSES FOR THE GLOBAL TECHNOLOGY FUND ARE BASED ON ESTIMATED AMOUNTS FOR THE CURRENT
FISCAL YEAR.
** REFLECTS LOOMIS SAYLES' CONTRACTUAL OBLIGATION TO LIMIT THE FUNDS' EXPENSES THROUGH
FEBRUARY 1, 2001. INSTITUTIONAL CLASS SHARES OF THE CORE VALUE FUND AND INSTITUTIONAL AND
RETAIL CLASS SHARES OF THE SMALL CAP VALUE FUND ARE CURRENTLY UNAFFECTED BY THE EXPENSE
LIMITATION.
*** OTHER EXPENSES INCLUDE AN ADMINISTRATIVE FEE OF .25% FOR ADMIN CLASS SHARES.
- ----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXAMPLE
The following example translates the "Total Annual Fund Operating Expenses"
column shown in the preceding table into dollar amounts. This example is
intended to help you compare the cost of investing in a Fund with the cost of
investing in other mutual funds.
This example makes certain assumptions. It assumes that you invest $10,000 in a
Fund for the time periods shown and then redeem all your shares at the end of
those periods. This example also assumes that your investment has a 5% return
each year and that the Fund's operating expenses remain the same. Please
remember that this example is hypothetical, so that your actual costs and
returns may be higher or lower.
<TABLE>
- --------------------------------------------------------------------------------
Fund/Class 1 Year* 3 Years* 5 Years* 10 Years*
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Loomis Sayles Aggressive Growth
Fund
Institutional Class $102 $730 $1,385 $3,140
Retail Class $127 $1,930 $3,589 $7,185
- --------------------------------------------------------------------------------
Loomis Sayles Core Value Fund
Institutional Class $80 $249 $433 $966
Retail Class $112 $820 $1,551 $3,487
- --------------------------------------------------------------------------------
Loomis Sayles Global Technology
Fund
Institutional Class $153 $569 n/a n/a
Retail Class $178 $672 n/a n/a
- --------------------------------------------------------------------------------
Loomis Sayles Growth Fund
Institutional Class $87 $342 $617 $1,402
Retail Class $112 $1,038 $1,974 $4,362
- --------------------------------------------------------------------------------
Loomis Sayles International
Equity Fund
Institutional Class $102 $365 $649 $1,458
Retail Class $127 $2,502 $4,541 $8,466
- --------------------------------------------------------------------------------
Loomis Sayles Mid-Cap Value
Fund
Institutional Class $102 $944 $1,803 $4,027
Retail Class $127 $2,715 $4,876 $8,845
- --------------------------------------------------------------------------------
Loomis Sayles Small Cap Growth
Fund
Institutional Class $102 $342 $601 $1,342
Retail Class $127 $513 $924 $2,071
- --------------------------------------------------------------------------------
Loomis Sayles Small Cap Value
Fund
Institutional Class $92 $287 $498 $1,108
Retail Class $122 $381 $660 $1,455
Admin Class $153 $516 $904 $1,992
- --------------------------------------------------------------------------------
Loomis Sayles Worldwide Fund
Institutional Class $102 $833 $1,586 $3,574
Retail Class $127 $3,705 $6,278 $9,977
- --------------------------------------------------------------------------------
* EXPENSES SHOWN FOR EACH CLASS, EXCEPT FOR THE INSTITUTIONAL CLASS OF THE
LOOMIS SAYLES CORE VALUE FUND AND THE INSTITUTIONAL AND RETAIL CLASSES OF THE
LOOMIS SAYLES SMALL CAP VALUE FUND, INCLUDE THE FEE WAIVER/ REIMBURSEMENT FOR
THE FIRST YEAR OF EACH PERIOD.
- --------------------------------------------------------------------------------
</TABLE>
LOOMIS SAYLES FUNDS 23
<PAGE>
MORE INFORMATION ABOUT THE FUNDS' INVESTMENTS AND RISK CONSIDERATIONS
This section provides more information on each Fund's investments and risk
considerations. Except for any investment policies that are identified as
"fundamental," the investment objectives and the investment policies and
strategies of each Fund may be changed without a vote of the Fund's
shareholders.
Each of the Funds may use any of the investment strategies described in this
section. Some of these investment strategies are principal investment strategies
for the Funds, while others are secondary investment strategies for the Funds.
TEMPORARY DEFENSIVE STRATEGIES
For temporary defensive purposes, each of the Funds may invest any portion of
its assets in cash or in any securities Loomis Sayles deems appropriate.
Although Loomis Sayles has the option to use these defensive strategies, Loomis
Sayles may choose not to use them for a variety of reasons, even in very
volatile market conditions. A Fund may miss certain investment opportunities if
it uses defensive strategies and thus may not achieve its investment objective.
PORTFOLIO TURNOVER
Portfolio turnover considerations will not limit Loomis Sayles' investment
discretion in managing the assets of each Fund. Each Fund anticipates that its
portfolio turnover rate will vary significantly from time to time depending on
the volatility of economic and market conditions. High portfolio turnover may
generate higher costs and higher levels of taxable gains, both of which may hurt
the performance of your investment.
COMMON STOCKS AND OTHER EQUITY SECURITIES
Common stocks and their equivalents, together called "equity securities," are
generally volatile and more risky than some other forms of investment. Equity
securities of companies with relatively small market capitalizations may be more
volatile than the securities of larger, more established companies and than the
broad equity market indices.
GROWTH STOCKS
Stocks of companies that Loomis Sayles believes have earnings that will grow
faster than the economy as a whole are known as growth stocks. The Loomis Sayles
Aggressive Growth Fund, the Loomis Sayles Global Technology Fund, the Loomis
Sayles International Equity Fund, and the Loomis Sayles Small Cap Growth Fund
generally invest a significant portion of their assets in growth stocks. Growth
stocks typically trade at higher multiples of current earnings than other
stocks. As a result, the values of growth stocks may be more sensitive to
changes in current or expected earnings than the values of other stocks. If
Loomis Sayles' assessment of
<PAGE>
the prospects for a company's earnings growth is wrong, or if its judgment of
how other investors will value the company's earnings growth is wrong, then the
price of that company's stock may fall or may not approach the value that Loomis
Sayles has placed on it.
VALUE STOCKS
Stocks of companies that are not expected to experience significant earnings
growth, but whose stocks Loomis Sayles believes are undervalued compared to
their true worth, are known as value stocks. The Loomis Sayles Core Value Fund,
the Loomis Sayles Mid-Cap Value Fund, and the Loomis Sayles Small Cap Value Fund
generally invest a significant portion of their assets in value stocks. These
companies may have experienced adverse business developments or may be subject
to special risks that have caused their stocks to be out of favor. If Loomis
Sayles' assessment of a company's prospects is wrong, or if other investors do
not eventually recognize the value of the company, then the price of the
company's stock may fall or may not approach the value that Loomis Sayles has
placed on it.
WHEN-ISSUED SECURITIES
A "when-issued" security involves a Fund entering into a commitment to buy a
security before the security has been issued. The Fund's payment obligation and
the interest rate on the security are determined when the Fund enters into the
commitment. The security is typically delivered to the Fund 15 to 120 days
later. No interest accrues on the security between the time the Fund enters into
the commitment and the time the security is delivered. If the value of the
security being purchased falls between the time a Fund commits to buy it and the
payment date, the Fund may sustain a loss. The risk of this loss is in addition
to the Fund's risk of loss on the securities actually in its portfolio at the
time. In addition, when the Fund buys a security on a when-issued basis, it is
subject to the risk that market rates of interest will increase before the time
the security is delivered, with the result that the yield on the security
delivered to the Fund may be lower than the yield available on other, comparable
securities at the time of delivery. If a Fund has outstanding obligations to buy
when-issued securities, it will segregate liquid assets at its custodian bank in
an amount sufficient to satisfy these obligations.
RULE 144A SECURITIES
Rule 144A securities are privately offered securities that can be resold only to
certain qualified institutional buyers. Rule 144A securities are treated as
illiquid, unless Loomis Sayles has determined, under guidelines established by
Loomis Sayles Funds' trustees, that a particular issue of Rule 144A securities
is liquid.
FOREIGN SECURITIES
Securities of issuers organized or headquartered outside the United States are
foreign securities. Foreign securities may present risks not associated with
LOOMIS SAYLES FUNDS 25
<PAGE>
investments in comparable securities of U.S. issuers. There may be less
information publicly available about a foreign corporate or governmental issuer
than about a U.S. issuer, and foreign corporate issuers are generally not
subject to accounting, auditing, and financial reporting standards and practices
comparable to those in the United States. The securities of some foreign issuers
are less liquid and at times more volatile than securities of comparable U.S.
issuers. Foreign brokerage commissions and securities custody costs are often
higher than in the United States. With respect to certain foreign countries,
there is a possibility of governmental expropriation of assets, confiscatory
taxation, political or financial instability, and diplomatic developments that
could affect the value of investments in those countries. A Fund's receipt of
interest on foreign government securities may depend on the availability of tax
or other revenues to satisfy the issuer's obligations.
A Fund's investments in foreign securities may include investments in countries
whose economies or securities markets are not yet highly developed. Special
considerations associated with these investments (in addition to the
considerations regarding foreign investments generally) may include, among
others, greater political uncertainties, an economy's dependence on revenues
from particular commodities or on international aid or development assistance,
currency transfer restrictions, highly limited numbers of potential buyers for
such securities, and delays and disruptions in securities settlement procedures.
Since most foreign securities are denominated in foreign currencies or traded
primarily in securities markets in which settlements are made in foreign
currencies, the value of these investments and the net investment income
available for distribution to shareholders of a Fund investing in these
securities may be affected by changes in currency exchange rates, exchange
control regulations, or foreign withholding taxes. Changes in the value relative
to the U.S. dollar of a foreign currency in which a Fund's holdings are
denominated will result in a change in the U.S. dollar value of a Fund's assets
and the Fund's income available for distribution.
In addition, although part of a Fund's income may be received or realized in
foreign currencies, the Fund will be required to compute and distribute its
income in U.S. dollars. Therefore, if the value of a currency relative to the
U.S. dollar declines after the Fund's income has been earned in that currency,
translated into U.S. dollars, and declared as a dividend, but before payment of
the dividend, the Fund could be required to liquidate portfolio securities to
pay the dividend. Similarly, if the value of a currency relative to the U.S.
dollar declines between the time the Fund accrues expenses in U.S. dollars and
the time such expenses are paid, the amount of foreign currency required to be
converted into U.S. dollars will be greater than the equivalent amount in
foreign currency of the expenses at the time they were incurred.
In determining whether to invest assets of the Funds in securities of a
particular foreign issuer, Loomis Sayles will consider the likely effects of
foreign taxes on the net yield available to the Fund and its shareholders.
Compliance with foreign tax law may reduce a Fund's net income available for
distribution to shareholders.
<PAGE>
FOREIGN CURRENCY HEDGING TRANSACTIONS
Foreign currency hedging transactions are an effort to protect the value of
specific portfolio positions or to anticipate changes in relative values of
currencies in which current or future Fund portfolio holdings are denominated or
quoted. For example, to protect against a change in the foreign currency
exchange rate between the date on which a Fund contracts to purchase or sell a
security and the settlement date for the purchase or sale, or to "lock in" the
equivalent of a dividend or interest payment in another currency, a Fund might
purchase or sell a foreign currency on a spot (that is, cash) basis at the
prevailing spot rate. If conditions warrant, the Funds may also enter into
private contracts to purchase or sell foreign currencies at a future date
("forward contracts"). The Funds might also purchase exchange-listed and
over-the-counter call and put options on foreign currencies. Over-the-counter
currency options are generally less liquid than exchange-listed options and will
be treated as illiquid assets. The Funds may not be able to dispose of
over-the-counter options readily.
Foreign currency transactions involve costs and may result in losses.
REPURCHASE AGREEMENTS
A repurchase agreement involves a Fund buying securities from a seller, usually
a bank or brokerage firm, with the understanding that the seller will repurchase
the securities at a higher price at a later date. Such transactions afford an
opportunity for a Fund to earn a return on available cash at minimal market
risk, although the Fund may be subject to various delays and risks of loss if
the seller is unable to meet its obligations to repurchase.
REAL ESTATE INVESTMENT TRUSTS
Real estate investment trusts (REITs) involve certain unique risks in addition
to those risks associated with investing in the real estate industry in general
(such as possible declines in the value of real estate, lack of availability of
mortgage funds, or extended vacancies of property). Equity REITs may be affected
by changes in the value of the underlying property owned by the REITs, while
mortgage REITs may be affected by the quality of any credit extended. REITs are
dependent upon management skills, are not diversified, and are subject to heavy
cash flow dependency, risks of default by borrowers, and self-liquidation. REITs
are also subject to the possibilities of failing to qualify for tax-free
pass-through of income under the Internal Revenue Code of 1986, as amended, and
failing to maintain their exemptions from registration under the Investment
Company Act of 1940.
REITs may have limited financial resources, may trade less frequently and in a
limited volume, and may be subject to more abrupt or erratic price movements
than larger securities. A Fund's investment in a REIT may require the Fund to
accrue and distribute income not yet received or may result in the Fund making
LOOMIS SAYLES FUNDS 27
<PAGE>
distributions that constitute a return of capital to Fund shareholders for
federal income tax purposes. In addition, distributions by a Fund from REITs
will not qualify for the corporate dividends-received deduction.
OPTIONS AND FUTURES TRANSACTIONS
Options and futures transactions involve a Fund buying, selling, or writing
options (or buying or selling futures contracts) on securities, securities
indices, or currencies. Funds may engage in these transactions either to enhance
investment return or to hedge against changes in the value of other assets that
the Funds own or intend to acquire. Options and futures fall into the broad
category of financial instruments known as "derivatives" and involve special
risks. Use of options or futures for other than hedging purposes may be
considered a speculative activity, involving greater risks than are involved in
hedging.
Options can generally be classified as either "call" or "put" options. There are
two parties to a typical options transaction: the "writer" and the "buyer." A
call option gives the buyer the right to buy a security or other asset (such as
an amount of currency or a futures contract) from, and a put option gives the
buyer the right to sell a security or other asset to, the option writer at a
specified price, on or before a specified date. The buyer of an option pays a
premium when purchasing the option, which reduces the return on the underlying
security or other asset if the option is exercised, and results in a loss if the
option expires unexercised. The writer of an option receives a premium from
writing an option, which may increase its return if the option expires or is
closed out at a profit. If a Fund as the writer of an option is unable to close
out an unexpired option, it must continue to hold the underlying security or
other asset until the option expires, to "cover" its obligation under the
option.
A futures contract creates an obligation by the seller to deliver and the buyer
to take delivery of the type of instrument or cash at the time and in the amount
specified in the contract. Although many futures contracts call for the delivery
(or acceptance) of the specified instrument, futures are usually closed out
before the settlement date through the purchase (or sale) of a comparable
contract. If the price of the sale of the futures contract by a Fund is less
than the price of the offsetting purchase, the Fund will realize a loss.
The value of options purchased by a Fund and futures contracts held by a Fund
may fluctuate based on a variety of market and economic factors. In some cases,
the fluctuations may offset (or be offset by) changes in the value of securities
held in a Fund's portfolio. All transactions in options and futures involve the
possible risk of loss to the Fund of all or a significant part of the value of
its investment. In some cases, the risk of loss may exceed the amount of the
Fund's investment. When a Fund writes a call option or sells a futures contract
without holding the underlying securities, currencies, or futures contracts, its
potential loss is unlimited. The Fund will be required, however, to set aside
with its custodian bank liquid assets in amounts sufficient at all times to
satisfy its obligations under options and futures contracts.
<PAGE>
The successful use of options and futures will usually depend on Loomis Sayles'
ability to forecast stock market, currency, or other financial market movements
correctly. The Fund's ability to hedge against adverse changes in the value of
securities held in its portfolio through options and futures also depends on the
degree of correlation between changes in the value of futures or options
positions and changes in the values of the portfolio securities. The successful
use of futures and exchange-traded options also depends on the availability of a
liquid secondary market to enable a Fund to close its positions on a timely
basis. There can be no assurance that such a market will exist at any particular
time. In the case of options that are not traded on an exchange
("over-the-counter" options), a Fund is at risk that the other party to the
transaction will default on its obligations, or will not permit a Fund to
terminate the transaction before its scheduled maturity.
The options and futures markets of foreign countries are small compared to those
of the U.S. and consequently are characterized in most cases by less liquidity
than U.S. markets. In addition, foreign markets may be subject to less detailed
reporting requirements and regulatory controls than U.S. markets. Furthermore,
investments in options in foreign markets are subject to many of the same risks
as other foreign investments. See "Foreign Securities" above.
SECURITIES LENDING
Securities lending involves a Fund lending its portfolio securities to
broker-dealers or other parties under contracts calling for the deposit by the
borrower with the Fund's custodian of cash collateral equal to at least the
market value of the securities loaned, marked to market on a daily basis. The
Fund will continue to benefit from interest or dividends on the securities
loaned and will also receive interest through investment of the cash collateral
in short-term liquid investments. No loans will be made if, as a result, the
aggregate amount of such loans outstanding at any time would exceed 33 1/3% of
the Fund's assets (taken at current value). Any voting rights, or rights to
consent, relating to securities loaned pass to the borrower. However, if a
material event affecting the investment occurs, such loans will be called so
that the securities may be voted by the Fund. The Fund pays various fees in
connection with such loans, including shipping fees and reasonable custodial or
placement fees.
Securities loans must be fully collateralized at all times, but involve some
credit risk to the Fund if the borrower defaults on its obligation and the Fund
is delayed or prevented from recovering the collateral.
FIXED INCOME SECURITIES
Fixed income securities pay a specified rate of interest or dividends, or a rate
that is adjusted periodically by reference to some specified index or market
rate. Fixed income securities include securities issued by federal, state, local
and foreign governments and related agencies, and by a wide range of private or
corporate issuers. Fixed income securities include, among others, bonds,
debentures, notes, bills, and commercial paper. Because interest rates vary, it
is impossible to predict
LOOMIS SAYLES FUNDS 29
<PAGE>
the income of a Fund for any particular period. If a Fund holds fixed income
securities, the net asset value of the Fund's shares will vary as a result of
changes in the value of the fixed income securities in the Fund's portfolio. A
Fund may continue to hold fixed income securities that are downgraded in quality
subsequent to their purchase if Loomis Sayles believes it would be advantageous
to do so.
ZERO COUPON SECURITIES
These securities are fixed income securities that accrue interest at a specified
rate, but do not pay interest in cash on a current basis. A Fund investing in
zero coupon securities is required to distribute the income on these securities
to Fund shareholders as the income accrues, even though the Fund is not
receiving the income in cash on a current basis. The Fund thus may have to sell
other investments to obtain cash to make income distributions at times when
Loomis Sayles would not otherwise deem it advisable to do so. The market value
of zero coupon securities often is more volatile than that of other fixed income
securities of comparable quality and maturity.
COLLATERALIZED MORTGAGE OBLIGATIONS
A collateralized mortgage obligation (CMO) is a security backed by a portfolio
of mortgages or mortgage-backed securities held under an indenture. CMOs may be
issued either by U.S. Government instrumentalities or by non-governmental
entities. The issuer's obligation to make interest and principal payments is
secured by the underlying portfolio of mortgages or mortgage-backed securities.
CMOs are issued with a number of classes or series which have different
maturities and which may represent interests in some or all of the interest or
principal on the underlying collateral or a combination thereof. CMOs of
different classes are generally retired in sequence as the underlying mortgage
loans in the mortgage pool are repaid. In the event of sufficient early
prepayments on such mortgages, the class or series of CMOs first to mature
generally will be retired prior to its maturity. As with other mortgage-backed
securities, if a particular class or series of CMOs held by a Fund is retired
early, the Fund would lose any premium it paid when it acquired the investment,
and the Fund may have to reinvest the proceeds at a lower interest rate than the
retired CMO paid. Because of the early retirement feature, CMOs may be more
volatile than many other fixed-income investments.
CLOSED-END INVESTMENT COMPANIES
A closed-end investment company is a fund that does not redeem its shares on a
daily basis. As a result, an investment in a closed-end investment company may
be less liquid than an investment that can be sold any time a Fund decides to
sell. Since the value of a closed-end investment company is based on the value
of the individual securities it holds, a closed-end investment company's value
will fall if the value of its underlying securities declines. As a shareholder
in a closed-end investment company, a Fund will bear its ratable share of the
investment
<PAGE>
company's expenses, including management fees, and will remain subject to the
investment company's advisory and administration fees with respect to the assets
so invested.
CONVERTIBLE SECURITIES
Convertible securities include corporate bonds, notes, or preferred stocks of
U.S. or foreign issuers that can be converted into (that is, exchanged for)
common stocks or other equity securities at a stated price or rate. Convertible
securities also include other securities, such as warrants, that provide an
opportunity for equity participation. Because convertible securities can be
converted into equity securities, their value will normally vary in some
proportion with those of the underlying equity securities. Due to the conversion
feature, convertible securities generally yield less than nonconvertible fixed
income securities of similar credit quality and maturity. A Fund's investment in
convertible securities may at times include securities that have a mandatory
conversion feature, pursuant to which the securities convert automatically into
common stock at a specified date and conversion ratio, or that are convertible
at the option of the issuer. When conversion is not at the option of the holder,
the Fund may be required to convert the security into the underlying common
stock even at times when the value of the underlying common stock has declined
substantially.
LOOMIS SAYLES FUNDS 31
<PAGE>
MANAGEMENT
INVESTMENT ADVISER
The Board of Trustees of Loomis Sayles Funds oversees each of the Funds and
supervises the Funds' investment adviser, Loomis, Sayles & Company, L.P.
("Loomis Sayles"), which is located at One Financial Center, Boston,
Massachusetts.
Loomis Sayles was founded in 1926 and is one of the country's oldest and largest
investment firms. Loomis Sayles is responsible for making investment decisions
for each Fund and for managing each Fund's other affairs and business, including
providing executive and other personnel for the management of each Fund.
As previously described in the "Expenses of the Funds" section, each Fund pays
Loomis Sayles a monthly investment advisory fee, also known as a management fee,
for these services. These fees are expressed as a percentage of the Fund's
average net assets:
<TABLE>
<CAPTION>
Fund Management Fee
<S> <C>
- ---------------------------------------------------------------------
Loomis Sayles Aggressive Growth Fund .75%
- ---------------------------------------------------------------------
Loomis Sayles Core Value Fund .50%
- ---------------------------------------------------------------------
Loomis Sayles Global Technology Fund 1.00%
- ---------------------------------------------------------------------
Loomis Sayles Growth Fund .50%
- ---------------------------------------------------------------------
Loomis Sayles International Equity Fund .75%
- ---------------------------------------------------------------------
Loomis Sayles Mid-Cap Value Fund .75%
- ---------------------------------------------------------------------
Loomis Sayles Small Cap Growth Fund .75%
- ---------------------------------------------------------------------
Loomis Sayles Small Cap Value Fund .75%
- ---------------------------------------------------------------------
Loomis Sayles Worldwide Fund .75%
- ---------------------------------------------------------------------
</TABLE>
Certain expenses incurred by each Class of each Fund, except the Loomis Sayles
Core Value Fund (Institutional Class) and the Loomis Sayles Small Cap Value Fund
(Institutional Class and Retail Class), would have been higher if not for Loomis
Sayles' contractual obligation to limit the Funds' expenses through February 1,
2001.
PORTFOLIO MANAGERS
The following persons have had primary responsibility for the day-to-day
management of each indicated Fund's portfolio since the date stated below.
Except as noted, each of these portfolio managers has been employed by Loomis
Sayles for at least five years.
LOOMIS SAYLES AGGRESSIVE GROWTH FUND Christopher R. Ely, David L. Smith, and
Philip C. Fine, Vice Presidents of Loomis Sayles Funds and of Loomis Sayles,
have served as portfolio managers of the Fund since 1999. Prior to joining
Loomis
<PAGE>
Sayles in 1996, Mr. Ely was senior vice president and portfolio manager, and
Mr. Fine and Mr. Smith were vice presidents and portfolio managers, of Keystone
Investment Management Company, Inc.
LOOMIS SAYLES CORE VALUE FUND Jeffrey W. Wardlow, Vice President of Loomis
Sayles Funds and of Loomis Sayles, has served as portfolio manager of the Fund
since its inception in 1991. Isaac H. Green, Director, Vice President and
Managing Partner of Loomis Sayles and Vice President of Loomis Sayles Funds, and
James L. Carroll, Vice President of Loomis Sayles Funds and of Loomis Sayles,
have served as portfolio managers of the Fund since 1997. Prior to joining
Loomis Sayles in 1996, Mr. Carroll was a managing director and senior energy
analyst at PaineWebber, Inc.
LOOMIS SAYLES GLOBAL TECHNOLOGY FUND Eswar Menon, Vice President of Loomis
Sayles and of Loomis Sayles Funds, leads a team of portfolio managers
responsible for the international segment of the Fund. Prior to joining Loomis
Sayles in 1999, Mr. Menon was a portfolio manager at Nicholas Applegate Capital
Management since 1995. From 1990 to 1995, he was employed as an equity analyst
by Koaneman Management and as a senior engineer by Integrated Device Technology.
Christopher R. Ely leads a team of portfolio managers responsible for the
domestic segment of the Fund.
LOOMIS SAYLES GROWTH FUND Mark B. Baribeau, Vice President of Loomis Sayles and
of Loomis Sayles Funds, has served as portfolio manager of the Fund since 1999.
Pamela N. Czekanski and Richard D. Skaags, Vice Presidents of Loomis Sayles and
of Loomis Sayles Funds, have served as portfolio managers of the Fund since
2000.
LOOMIS SAYLES INTERNATIONAL EQUITY FUND Alex Muromcew, John Tribolet, and Eswar
Menon, Vice Presidents of Loomis Sayles and of Loomis Sayles Funds, have served
as portfolio managers of the Fund since 1999. Prior to joining Loomis Sayles in
1999, Mr. Muromcew was a portfolio manager at Nicholas Applegate Capital
Management since 1996. From 1993 to 1996, he was an investment analyst with
Teton Partners L.P. Prior to joining Loomis Sayles in 1999, Mr. Tribolet was a
portfolio manager at Nicholas Applegate Capital Management since 1997. From 1995
to 1997, he was a full time MBA student at the University of Chicago. Prior to
1995, he spent three years as an investment banker, most recently at PaineWebber
Inc.
LOOMIS SAYLES MID-CAP VALUE FUND Joseph R. Gatz and Dawn Alston Paige, Vice
Presidents of Loomis Sayles and of Loomis Sayles Funds, are the portfolio
managers of the Fund. Mr. Gatz has served as portfolio manager of the Fund since
1999. Prior to joining Loomis Sayles in 1999, Mr. Gatz was a portfolio manager
at
LOOMIS SAYLES FUNDS 33
<PAGE>
Banc One Investment Advisers Corporation and certain of its corporate
predecessors since 1993. Ms. Paige has served as portfolio manager of the Fund
since 1998.
LOOMIS SAYLES SMALL CAP GROWTH FUND Christopher R. Ely, Philip C. Fine, and
David L. Smith have served as portfolio managers of the Fund since its inception
in 1996.
LOOMIS SAYLES SMALL CAP VALUE FUND Joseph R. Gatz, Dawn Alston Paige and Daniel
G. Thelan have served as portfolio managers of the Fund since 2000. Mr. Thelan,
Vice President of Loomis Sayles and Loomis Sayles Funds, joined Loomis Sayles in
1996. From 1990 to 1996, Mr. Thelan was a manager at PricewaterhouseCoopers LLP.
LOOMIS SAYLES WORLDWIDE FUND Daniel J. Fuss, President of Loomis Sayles Funds
and Vice Chairman of Loomis Sayles, has served as the portfolio manager of the
domestic fixed income securities sector of the Fund since its inception in 1996.
E. John deBeer, Vice President of Loomis Sayles Funds and of Loomis Sayles, has
served as portfolio manager of the international fixed income securities sector
of the Fund since its inception in 1996. Quentin P. Faulkner, Vice President of
Loomis Sayles Funds and of Loomis Sayles, has served as the portfolio manger of
the domestic equity securities sector of the Fund since its inception in 1996.
Alex Muromcew, John Tribolet, and Eswar Menon have served as portfolio managers
of the international equity securities sector of the fund since 1999.
DISTRIBUTION PLANS AND ADMINISTRATIVE AND OTHER FEES
For the Retail Class and Admin Class shares of the Funds, the Funds have adopted
distribution plans under Rule 12b-1 of the Investment Company Act of 1940 that
allow the Funds to pay fees for the sale and distribution of Retail and Admin
Class shares and for services provided to shareholders. This 12b-1 fee currently
is .25% of a Fund's average daily net assets attributable to the shares of a
particular Class. Because these fees are paid out of the Funds' assets on an
ongoing basis, over time these fees will increase the cost of your investment
and may cost you more than paying other types of sales charges.
Admin Class shares of the Loomis Sayles Small Cap Value Fund are offered
exclusively through intermediaries, who will be the record owner of the shares.
Admin Class shares of the Loomis Sayles Small Cap Value Fund may pay an
administrative fee at an annual rate of up to .25% of the average daily net
assets attributable to Admin Class shares to securities dealers or financial
intermediaries for providing personal service and account maintenance for their
customers who hold these shares.
Loomis Sayles may pay certain broker-dealers and financial intermediaries whose
customers are existing shareholders of the Funds a continuing fee at an annual
rate of up to .25% of the value of any Class of Fund shares held for those
customers' accounts, although this continuing fee is paid by Loomis Sayles out
of its own assets and is not assessed against the Fund.
<PAGE>
GENERAL INFORMATION
PRICING
The price of each Fund's shares is based on its net asset value ("NAV") The NAV
per share of each Class equals the total value of its assets, less its
liabilities, divided by the number of outstanding shares. Shares are valued as
of the close of regular trading on the New York Stock Exchange on each day the
Exchange is open for trading.
Each Fund values its investments for which market quotations are readily
available at market value. Each Fund values short-term investments that will
mature within 60 days at amortized cost, which approximates market value. Each
Fund values all other investments and assets at fair value.
Each Fund translates prices for its investments quoted in foreign currencies
into U.S. dollars at current exchange rates. As a result, changes in the value
of those currencies in relation to the U.S. dollar may affect a Fund's NAV.
Because foreign markets may be open at different times than the New York Stock
Exchange, the value of a Fund's shares may change on days when shareholders are
not able to buy or sell shares. If events materially affecting the values of a
Fund's foreign investments occur between the close of foreign markets and the
close of regular trading on the New York Stock Exchange, these foreign
investments may be valued at their fair value.
HOW TO PURCHASE SHARES
You can buy shares of each Fund in several ways:
- - BY MAIL You can mail a completed application form, which is available by
calling Loomis Sayles at 800-626-9390, for the desired Fund or Funds, along
with a check payable to State Street Bank and Trust Company for the amount of
your purchase to:
Boston Financial Data Services
P.O. Box 8314
Boston, MA 02266-8314
Attention: Loomis Sayles Funds
- - THROUGH A FINANCIAL ADVISER Your financial adviser will be responsible for
furnishing all necessary documents to Loomis Sayles or Boston Financial Data
Services. Your financial adviser may charge you for his or her services.
- - THROUGH SYSTEMATIC INVESTING You can make regular investments of $50 or more
per month through automatic deductions from your bank checking or savings
account. Application forms are available through your financial adviser or by
calling Loomis Sayles at 800-626-9390.
- - THROUGH A BROKER-DEALER You may purchase shares of the Funds through a
broker-dealer that has been approved by Loomis Sayles Distributors, L.P.,
which can be contacted at One Financial Center, Boston, MA 02111
(800-633-3330).
LOOMIS SAYLES FUNDS 35
<PAGE>
Each Fund sells its shares at the NAV next calculated after Boston Financial
Data Services receives a properly completed investment order. Boston Financial
Data Services generally must receive your properly completed order before the
close of regular trading on the New York Stock Exchange for your shares to be
bought or sold at the Fund's NAV on that day.
Shares of each Fund may be purchased by (1) cash, (2) exchanging shares of the
same Class of any other Fund, provided the value of the shares exchanged meets
the investment minimum of that Fund, (3) exchanging securities acceptable to
Loomis Sayles, or (4) a combination of such methods. The exchange of securities
for shares of a Fund is subject to various restrictions, as described in the
Statement of Additional Information.
All purchases made by check should be in U.S. dollars and made payable to State
Street Bank and Trust Company. The Funds will not accept checks made payable to
anyone other than State Street Bank and Trust Company (including checks made
payable to you) or starter checks. When you make an investment by check or by
periodic account investment, to ensure that your investment has cleared, you
will not be permitted to redeem that investment until it has been in your
account for 15 days.
After your account has been established, you may send subsequent investments
directly to Boston Financial Data Services at the above address. Please include
either the account identification slip detached from your account statement or a
note containing the Fund's name, your account number and your name, address,
telephone number, and social security number.
You also may wire subsequent investments to the Funds by using the following
wire instructions:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
ABA No. 011000028
DDA 9904-622-9
(Your account number)
Attn: Custody and Shareholder Services
(Name of Fund)
Your bank may charge a fee for transmitting funds by wire.
A Fund may periodically close to new purchases of shares or refuse any order to
buy shares if the Fund determines that doing so would be in the best interests
of the Fund and its shareholders.
Each Fund's shares may be purchased by all types of tax-deferred retirement
plans. If you wish to open an individual retirement account (IRA) with a Fund,
Loomis Sayles has retirement plan forms available.
<PAGE>
The minimum initial investment for each Fund generally is $250,000 for
Institutional Class shares and $5,000 for Retail Class shares. Loomis Sayles
Funds may waive these minimums in its sole discretion.
Each subsequent investment must be at least $50.
HOW TO REDEEM SHARES
You can redeem shares of each Fund any day the New York Stock Exchange is open,
either through your financial adviser or directly from the Fund. If you are
redeeming shares that you purchased within the past 15 days by check or by
periodic account investment, your redemption will be delayed until your payment
for the shares clears.
Your redemptions generally will be sent to you via first class mail on the
business day after your request is received. Under unusual circumstances, the
Funds may suspend redemptions or postpone payment for more than seven days.
Although most redemptions are made in cash, as described in the Statement of
Additional Information, the Funds reserve the right to redeem shares in kind.
REDEMPTIONS THROUGH YOUR FINANCIAL ADVISER Your adviser must receive your
request in proper form before the close of regular trading on the New York Stock
Exchange for you to receive that day's NAV. Your adviser will be responsible for
furnishing all necessary documents to Loomis Sayles on a timely basis and may
charge you for his or her services.
REDEMPTIONS DIRECTLY FROM THE FUNDS Boston Financial Data Services must receive
your redemption request in proper form before the close of regular trading on
the New York Stock Exchange in order for you to receive that day's NAV.
You may make redemptions directly from each Fund either by mail or by telephone.
- - BY MAIL Send a signed letter of instruction that includes the name of the
Fund, the exact name(s) in which the shares are registered, any special
capacity in which you are signing (such as trustee or custodian or on behalf
of a partnership, corporation, or other entity), your address, telephone
number, account number, social security number, and the number of shares or
dollar amount to be redeemed to the following address:
Boston Financial Data Services, Inc.
P.O. Box 8314
Boston, MA 02266
Attention: Loomis Sayles Funds
If you have certificates for the shares you want to sell, you must include
them along with completed stock power forms.
LOOMIS SAYLES FUNDS 37
<PAGE>
- - BY TELEPHONE You may redeem shares by calling Boston Financial Data Services
at 800-626-9390. Proceeds from telephone redemption requests can be wired to
your bank account or sent by check in the name of the registered owner(s) to
the record address.
Before Boston Financial Data Services can wire redemption proceeds to your
bank account, you must provide specific wire instructions to Boston Financial
Data Services at the time you open your account or make any subsequent
investments. A wire fee (currently $5) will be deducted from the proceeds of
each wire.
A telephone redemption request must be received by Boston Financial Data
Services prior to the close of regular trading on the New York Stock Exchange.
If you telephone a redemption request after the Exchange closes or on a day
when the Exchange is not open for business, Boston Financial Data Services
cannot accept the request, and you must make a new redemption request during
regular trading on the Exchange.
The maximum value of shares that you may redeem by telephone is $50,000. For
your protection, telephone redemption requests will not be permitted if Boston
Financial Data Services or the Fund has been notified of an address change for
your account within the preceding 30 days. Unless you indicate otherwise on
your account application, Boston Financial Data Services will be authorized to
accept redemption and transfer instructions by telephone. If you prefer, you
can decline telephone redemption and transfer privileges.
The telephone redemption privilege may be modified or terminated by the Funds
without notice. Certain of the telephone redemption procedures may be waived
for holders of Institutional Class shares.
- - SYSTEMATIC WITHDRAWAL PLAN If the value of your account is $25,000 or more,
you can have periodic redemptions automatically paid to you or to someone you
designate. Please call 800-626-9390 for more information or to set up a
systematic withdrawal plan.
SIGNATURE GUARANTEE You must have your signature guaranteed by a bank, broker-
dealer, or other financial institution that can issue a signature guarantee for
the following types of redemptions:
- - If you are redeeming shares worth more than $50,000.
- - If you are requesting that the proceeds check be made out to someone other
than the registered owner(s) or sent to an address other than the record
address.
- - If the account registration has changed within the past 30 days.
- - If you are instructing us to wire the proceeds to a bank account not
designated on the application.
Please note that a notary public cannot provide a signature guarantee. This
guaranteed signature requirement may be waived by Loomis Sayles in certain
cases.
REDEMPTION BY THE FUNDS If you own fewer shares than the minimum set by the
Trustees, each Fund may redeem your shares and send you the proceeds.
<PAGE>
HOW TO EXCHANGE SHARES
You may exchange shares of a Fund for shares of the same Class of any other Fund
in the Loomis Sayles Funds series that offers that Class of shares or for shares
of certain money market funds advised by New England Funds Management, L.P., an
affiliate of Loomis Sayles.
The value of Fund shares that you wish to exchange must meet the investment
minimum of the new fund. Exchanges into the Loomis Sayles High Yield Fund must
be specially approved by Loomis Sayles. Please call 800-633-3330 (option 6)
prior to requesting this transaction.
You may make an exchange by sending a signed letter of instruction or by
telephone, unless you have elected on your account application to decline
telephone exchange privileges.
Since excessive exchange activity may interfere with portfolio management and
may have an adverse effect on other shareholders of a Fund, the exchange
privilege should not be viewed as a means for taking advantage of short-term
swings in the market. The Funds reserve the right to terminate or limit your
exchange privilege if you make more than four exchanges in a calendar year. The
Funds may terminate the exchange privilege upon 60 days' notice to shareholders.
Please remember that an exchange may be a taxable event for federal and/or state
income tax purposes, so that you may realize a gain or loss that is subject to
income tax.
DIVIDENDS AND DISTRIBUTIONS
Each of the Funds declares and pays its net investment income to shareholders as
dividends annually. Each Fund also distributes all of its net capital gains
realized from the sale of portfolio securities. The Funds typically will make
capital gain distributions annually, but the Funds may make more frequent
capital gain distributions.
You may choose to:
- - Reinvest all distributions in additional shares.
- - Receive all distributions in cash.
If you do not select an option when you open your account, all distributions
will be reinvested.
TAX CONSEQUENCES
For federal income tax purposes, distributions of investment income from each of
the Funds are taxable as ordinary income. Taxes on distributions of capital
gains are determined by how long a Fund owned the investments that generated the
capital gains, rather than by how long you have owned your shares of the Fund.
Distributions of short-term capital gains, which result from the sale of
securities that a Fund had held for one year or less, are taxable as ordinary
income. Properly
LOOMIS SAYLES FUNDS 39
<PAGE>
designated distributions of long-term capital gains, which result from the sale
of securities that a Fund had held for more than one year, are taxable as
long-term capital gains (generally at a 20% federal income tax rate for
noncorporate shareholders).
Distributions of income and capital gains are taxable whether you receive them
in cash or reinvest them in additional shares. If a dividend or distribution is
made shortly after you purchase shares of a Fund, while in effect a return of
capital to you, the dividend or distribution is taxable, as described above.
This is called "buying a dividend" and should be avoided, if possible.
A Fund's investment in foreign securities may be subject to foreign withholding
taxes, which would decrease a Fund's yield on these securities. Shareholders may
be entitled to claim a credit or deduction with respect to foreign taxes. In
addition, a Fund's investment in foreign securities may increase or accelerate a
Fund's recognition of income and may affect the timing or amount of a Fund's
distributions.
In addition to income tax on a Fund's distributions, any gain that results if
you sell or exchange your shares generally is subject to income tax. You should
consult your tax adviser for more information on how an investment in a Fund
affects your own tax situation.
FINANCIAL HIGHLIGHTS
The financial highlights tables below are intended to help you understand each
Fund's financial performance. Certain information reflects financial results for
a single Fund share. The total returns represent the rate that you would have
earned or lost on an investment in each Fund, assuming reinvestment of all
dividends and distributions.
This information has been audited by PricewaterhouseCoopers LLP. The report of
PricewaterhouseCoopers LLP and each Fund's financial statements are included in
the Funds' annual reports to shareholders, which are available free of charge by
calling 800-626-9390.
<PAGE>
LOOMIS SAYLES AGGRESSIVE GROWTH FUND (INSTITUTIONAL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.51 $11.49 $10.00
------- ------ ------
Income from investment operations--
Net investment income (loss) (0.09)*** (0.03) (0.03)
Net realized and unrealized gains (losses) on
investments 10.05 (0.95) 2.26
------- ------ ------
Total from investment operations 9.96 (0.98) 2.23
------- ------ ------
Less distributions--
Distributions in excess of net investment income 0.00 0.00 (0.12)
Distributions from net realized capital gains (0.39) 0.00 (0.62)
------- ------ ------
Total distributions (0.39) 0.00 (0.74)
------- ------ ------
Net asset value, end of period $ 20.08 $10.51 $11.49
======= ====== ======
Total return (%)**** 97.9 (8.5)+ 22.7+
Net assets, end of period (000) $13,308 $2,073 $1,848
Ratio of operating expenses to average net assets (%)***** 1.00 1.00++ 1.00++
Ratio of net investment income (loss) to average net
assets (%) (0.56) (0.35)++ (0.38)++
Portfolio turnover rate (%) 199 82+ 174+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 2.96 7.13++ 9.35++
Net investment income (loss) per share would have been
($) (0.42)*** (0.50) (0.60)
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE
BASIS OF THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD.
**** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
***** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
LOOMIS SAYLES FUNDS 41
<PAGE>
LOOMIS SAYLES AGGRESSIVE GROWTH FUND (RETAIL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.49 $11.49 $10.00
------ ------ ------
Income from investment operations--
Net investment income (loss) (0.14)*** (0.05) (0.06)
Net realized and unrealized gains (losses) on
investments 10.03 (0.95) 2.27
------ ------ ------
Total from investment operations 9.89 (1.00) 2.21
------ ------ ------
Less distributions--
Distributions in excess of net investment income 0.00 0.00 (0.10)
Distributions from net realized capital gains (0.39) 0.00 (0.62)
------ ------ ------
Total distributions (0.39) 0.00 (0.72)
------ ------ ------
Net asset value, end of period $19.99 $10.49 $11.49
====== ====== ======
Total return (%)**** 97.5 (8.7)+ 22.4+
Net assets, end of period (000) $1,175 $ 85 $ 74
Ratio of operating expenses to average net assets (%)***** 1.25 1.25++ 1.25++
Ratio of net investment income (loss) to average net
assets (%) (0.80) (0.60)++ (0.67)++
Portfolio turnover rate (%) 199 82+ 174+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 9.05 27.97++ 36.58++
Net investment income (loss) per share would have been
($) (1.50)*** (2.08) (3.29)
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE
BASIS OF THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD.
**** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
***** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
<PAGE>
LOOMIS SAYLES CORE VALUE FUND (INSTITUTIONAL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
-----------------------------------------------------------------
Sept. 30, Sept. 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998* 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 16.85 $ 17.64 $ 15.60 $ 14.57 $ 11.80 $ 12.49
------- ------- ------- ------- ------- -------
Income from investment operations--
Net investment income (loss) 0.22 0.18 0.18 0.22 0.23 0.15
Net realized and unrealized gains
(losses) on investments 1.53 (0.97) 4.32 2.83 3.93 (0.26)
------- ------- ------- ------- ------- -------
Total from investment operations 1.75 (0.79) 4.50 3.05 4.16 (0.11)
------- ------- ------- ------- ------- -------
Less distributions--
Dividends from net investment income (0.24) 0.00 (0.19) (0.22) (0.23) (0.15)
Distributions from net realized capital
gains (1.82) 0.00 (2.27) (1.80) (1.16) (0.43)
------- ------- ------- ------- ------- -------
Total distributions (2.06) 0.00 (2.46) (2.02) (1.39) (0.58)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 16.54 $ 16.85 $ 17.64 $ 15.60 $ 14.57 $ 11.80
======= ======= ======= ======= ======= =======
Total return (%)** 10.5 (4.5)+ 29.2 21.2 35.2 (0.9)
Net assets, end of period (000) $66,726 $66,928 $63,303 $43,715 $36,465 $25,946
Ratio of operating expenses to average net
assets (%)*** 0.78 0.79++ 0.84 1.13 1.20 1.33
Ratio of net investment income (loss) to
average net assets (%) 1.20 1.36++ 1.12 1.44 1.61 1.28
Portfolio turnover rate (%) 59 49+ 64 58 60 48
Without giving effect to the expense
limitations:
Ratio of expenses to average net
assets would have been (%) 0.78 0.79++ 0.84 1.13 1.20 1.33
Net investment income (loss) per share
would have been ($) 0.22 0.18 0.18 0.22 0.23 0.15
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
*** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
LOOMIS SAYLES FUNDS 43
<PAGE>
LOOMIS SAYLES CORE VALUE FUND (RETAIL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $16.79 $17.62 $15.60
------ ------ ------
Income from investment operations--
Net investment income (loss) 0.18 0.15*** 0.15***
Net realized and unrealized gains (losses) on
investments 1.52 (0.98) 4.30
------ ------ ------
Total from investment operations 1.70 (0.83) 4.45
------ ------ ------
Less distributions--
Dividends from net investment income (0.19) 0.00 (0.16)
Distributions from net realized capital gains (1.82) 0.00 (2.27)
------ ------ ------
Total distributions (2.01) 0.00 (2.43)
------ ------ ------
Net asset value, end of period $16.48 $16.79 $17.62
====== ====== ======
Total return (%)**** 10.2 (4.7)+ 28.9+
Net assets, end of period (000) $ 605 $1,015 $1,324
Ratio of operating expenses to average net assets (%)***** 1.10 1.10++ 1.10++
Ratio of net investment income (loss) to average net
assets (%) 0.88 1.07++ 0.84++
Portfolio turnover rate (%) 59 49+ 64+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 3.35 2.20++ 6.17++
Net investment income (loss) per share would have been
($) (0.28) 0.00*** (0.73)***
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE
BASIS OF THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD.
**** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
***** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
<PAGE>
LOOMIS SAYLES GROWTH FUND (INSTITUTIONAL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
-----------------------------------------------------------------
Sept. 30, Sept. 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998* 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.65 $ 12.63 $ 13.44 $ 15.27 $ 12.50 $ 13.02
------- ------- ------- ------- ------- -------
Income from investment operations--
Net investment income (loss) (0.04) (0.03) (0.04) (0.07) 0.00 (0.02)
Net realized and unrealized gains
(losses) on investments 3.01 (0.95) 3.17 3.08 3.86 (0.45)
------- ------- ------- ------- ------- -------
Total from investment operations 2.97 (0.98) 3.13 3.01 3.86 (0.47)
------- ------- ------- ------- ------- -------
Less distributions--
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 (0.01)
Distributions from net realized capital
gains (3.45) 0.00 (3.94) (4.84) (1.09) (0.04)
------- ------- ------- ------- ------- -------
Total distributions (3.45) 0.00 (3.94) (4.84) (1.09) (0.05)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 11.17 $ 11.65 $ 12.63 $ 13.44 $ 15.27 $ 12.50
======= ======= ======= ======= ======= =======
Total return (%)** 30.9 (7.8)+ 24.5 19.9 30.9 (3.7)
Net assets, end of period (000) $28,235 $24,663 $32,149 $39,497 $45,011 $36,580
Ratio of operating expenses to average net
assets (%)*** 0.85 0.85++ 0.85 1.10 1.08 1.16
Ratio of net investment income (loss) to
average net assets (%) (0.40) (0.32)++ (0.26) (0.47) (0.29) (0.14)
Portfolio turnover rate (%) 164 118+ 116 99 48 46
Without giving effect to the expense
limitations:
Ratio of expenses to average net
assets would have been (%) 1.18 1.02++ 0.98 1.10 1.08 1.16
Net investment income (loss) per share
would have been ($) (0.08) (0.05) (0.05) (0.07) 0.00 (0.02)
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
*** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
LOOMIS SAYLES FUNDS 45
<PAGE>
LOOMIS SAYLES GROWTH FUND (RETAIL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 11.59 $ 12.59 $ 13.44
------- ------- -------
Income from investment operations--
Net investment income (loss) (0.06) (0.03) (0.07)
Net realized and unrealized gains (losses) on
investments 2.98 (0.97) 3.16
------- ------- -------
Total from investment operations 2.92 (1.00) 3.09
------- ------- -------
Less distributions--
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized capital gains (3.45) 0.00 (3.94)
------- ------- -------
Total distributions (3.45) 0.00 (3.94)
------- ------- -------
Net asset value, end of period $ 11.06 $ 11.59 $ 12.59
======= ======= =======
Total return (%)*** 30.6 (7.9)+ 24.2+
Net assets, end of period (000) $ 649 $ 516 $ 194
Ratio of operating expenses to average net assets (%)**** 1.10 1.10++ 1.10++
Ratio of net investment income (loss) to average net
assets (%) (0.65) (0.58)++ (0.42)++
Portfolio turnover rate (%) 164 118+ 116+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 4.43 4.74++ 12.96++
Net investment income (loss) per share would have been
($) (0.38) (0.19) (2.00)
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
**** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
<PAGE>
LOOMIS SAYLES INTERNATIONAL EQUITY FUND (INSTITUTIONAL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
-----------------------------------------------------------------
Sept. 30, Sept. 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998* 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.74 $ 11.30 $ 13.16 $ 11.65 $ 11.61 $ 12.90
------- ------- ------- ------- ------- -------
Income from investment operations--
Net investment income (loss) 0.07 0.14 0.15** 0.12 0.14 0.15
Net realized and unrealized gains
(losses) on investments 3.31 (0.70) (0.27) 2.01 0.87 (0.38)
------- ------- ------- ------- ------- -------
Total from investment operations 3.38 (0.56) (0.12) 2.13 1.01 (0.23)
------- ------- ------- ------- ------- -------
Less distributions--
Dividends from net investment income (0.13) 0.00 (0.19) (0.09) (0.14) (0.14)
Distributions from net realized capital
gains (0.20) 0.00 (1.55) (0.53) (0.83) (0.92)
------- ------- ------- ------- ------- -------
Total distributions (0.33) 0.00 (1.74) (0.62) (0.97) (1.06)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 13.79 $ 10.74 $ 11.30 $ 13.16 $ 11.65 $ 11.61
======= ======= ======= ======= ======= =======
Total return (%)*** 32.0 (5.0)+ (1.0) 18.3 8.7 (1.8)
Net assets, end of period (000) $79,415 $68,464 $82,188 $90,662 $79,488 $73,189
Ratio of operating expenses to average net
assets (%)**** 1.00 1.00++ 1.00 1.42 1.45 1.46
Ratio of net investment income (loss) to
average net assets (%) 0.53 1.49++ 1.12 0.96 1.16 1.30
Portfolio turnover rate (%) 207 96+ 119 151 133 116
Without giving effect to the expense
limitations:
Ratio of expenses to average net
assets would have been (%) 1.22 1.18++ 1.16 1.42 1.45 1.46
Net investment income (loss) per share
would have been ($) 0.04 0.12 0.13** 0.12 0.14 0.15
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE
BASIS OF THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD.
*** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
**** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
LOOMIS SAYLES FUNDS 47
<PAGE>
LOOMIS SAYLES INTERNATIONAL EQUITY FUND (RETAIL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 10.70 $ 11.28 $ 13.16
------- ------- -------
Income from investment operations--
Net investment income (loss) 0.05 0.10 0.10***
Net realized and unrealized gains (losses) on
investments 3.28 (0.68) ( 0.26)
------- ------- -------
Total from investment operations 3.33 (0.58) (0.16)
------- ------- -------
Less distributions--
Dividends from net investment income (0.10) 0.00 (0.17)
Distributions from net realized capital gains (0.20) 0.00 (1.55)
------- ------- -------
Total distributions (0.30) 0.00 (1.72)
------- ------- -------
Net asset value, end of period $ 13.73 $ 10.70 $ 11.28
======= ======= =======
Total return (%)**** 31.6 (5.1)+ (1.3)+
Net assets, end of period (000) $ 261 $ 150 $ 233
Ratio of operating expenses to average net assets (%)***** 1.25 1.25++ 1.25++
Ratio of net investment income (loss) to average net
assets (%) 0.29 1.16++ 0.73++
Portfolio turnover rate (%) 207 96+ 119+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 12.33 10.26++ 16.24++
Net investment income (loss) per share would have been
($) (1.81) (0.67) (1.93)***
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE
BASIS OF THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD.
**** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
***** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
<PAGE>
LOOMIS SAYLES MID-CAP VALUE FUND (INSTITUTIONAL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.09 $11.53 $10.00
------ ------ ------
Income from investment operations--
Net investment income (loss) 0.03 0.02 0.07
Net realized and unrealized gains (losses) on
investments 1.26 (1.46) 2.54
------ ------ ------
Total from investment operations 1.29 (1.44) 2.61
------ ------ ------
Less distributions--
Dividends from net investment income (0.03) 0.00 (0.14)
Distributions from net realized capital gains (0.36) 0.00 (0.94)
------ ------ ------
Total distributions (0.39) 0.00 (1.08)
------ ------ ------
Net asset value, end of period $10.99 $10.09 $11.53
====== ====== ======
Total return (%)*** 12.9 (12.5)+ 26.3+
Net assets, end of period (000) $5,062 $3,291 $3,736
Ratio of operating expenses to average net assets (%)**** 1.00 1.00++ 1.00++
Ratio of net investment income (loss) to average net
assets (%) 0.28 0.22++ 0.74++
Portfolio turnover rate (%) 232 225+ 130+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 4.01 4.33++ 6.65++
Net investment income (loss) per share would have been
($) (0.27) (0.29) (0.49)
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
**** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
LOOMIS SAYLES FUNDS 49
<PAGE>
LOOMIS SAYLES MID-CAP VALUE FUND (RETAIL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 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 gains (losses) on
investments 1.25 (1.45) 2.55
------ ------ ------
Total from investment operations 1.25 (1.46) 2.58
------ ------ ------
Less distributions--
Dividends from net investment income 0.00 0.00 (0.11)
Distributions from net realized capital gains (0.36) 0.00 (0.94)
------ ------ ------
Total distributions (0.36) 0.00 (1.05)
------ ------ ------
Net asset value, end of period $10.96 $10.07 $11.53
====== ====== ======
Total return (%)*** 12.5 (12.7)+ 26.0+
Net assets, end of period (000) $ 231 $ 121 $ 168
Ratio of operating expenses to average net assets (%)**** 1.25 1.25++ 1.25++
Ratio of net investment income (loss) to average net
assets (%) (0.02) (0.03)++ 0.42++
Portfolio turnover rate (%) 232 225+ 130+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 13.62 13.31++ 27.99++
Net investment income (loss) per share would have been
($) (2.67) (2.40) (1.90)
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
**** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
<PAGE>
LOOMIS SAYLES SMALL CAP GROWTH FUND (INSTITUTIONAL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.83 $ 11.32 $10.00
------- ------- ------
Income from investment operations--
Net investment income (loss) (0.08) (0.02) (0.07)***
Net realized and unrealized gains (losses) on
investments 6.99 (1.47) 1.99
------- ------- ------
Total from investment operations 6.91 (1.49) 1.92
------- ------- ------
Less distributions--
Distributions in excess of net investment income 0.00 0.00 (0.01)
Distributions in excess of net realized capital gains 0.00 0.00 (0.59)
------- ------- ------
Total distributions 0.00 0.00 (0.60)
------- ------- ------
Net asset value, end of period $ 16.74 $ 9.83 $11.32
======= ======= ======
Total return (%)**** 70.3 (13.2)+ 19.4+
Net assets, end of period (000) $81,132 $17,174 $3,893
Ratio of operating expenses to average net assets (%)***** 1.00 1.00++ 1.00++
Ratio of net investment income (loss) to average net
assets (%) (0.80) (0.53)++ (0.65)++
Portfolio turnover rate (%) 163 116+ 211+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 1.11 2.15++ 5.81++
Net investment income (loss) per share would have been
($) (0.09) (0.07) (0.56)***
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE
BASIS OF THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD.
**** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
***** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
LOOMIS SAYLES FUNDS 51
<PAGE>
LOOMIS SAYLES SMALL CAP GROWTH FUND (RETAIL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.80 $11.30 $10.00
------ ------ ------
Income from investment operations--
Net investment income (loss) (0.08) (0.08) (0.10)***
Net realized and unrealized gains (losses) on
investments 6.93 (1.42) 1.99
------ ------ ------
Total from investment operations 6.85 (1.50) 1.89
------ ------ ------
Less distributions--
Distributions in excess of net investment income 0.00 0.00 0.00
Distributions in excess of net realized capital gains 0.00 0.00 (0.59)
------ ------ ------
Total distributions 0.00 0.00 (0.59)
------ ------ ------
Net asset value, end of period $16.65 $ 9.80 $11.30
====== ====== ======
Total return (%)**** 69.9 (13.3)+ 19.2+
Net assets, end of period (000) $6,032 $1,057 $1,139
Ratio of operating expenses to average net assets (%)***** 1.25 1.25++ 1.25++
Ratio of net investment income (loss) to average net
assets (%) (1.04) (0.80)++ (0.94)++
Portfolio turnover rate (%) 163 116+ 211+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 1.80 3.70++ 7.82++
Net investment income (loss) per share would have been
($) (0.12) (0.34) (0.77)***
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE
BASIS OF THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD.
**** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
***** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
<PAGE>
LOOMIS SAYLES SMALL CAP VALUE FUND (INSTITUTIONAL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
-----------------------------------------------------------------
Sept. 30, Sept. 30, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998* 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 15.60 $ 18.62 $ 17.39 $ 15.33 $ 12.86 $ 14.13
-------- -------- -------- -------- ------- -------
Income from investment operations--
Net investment income (loss) 0.16 0.12 0.17 0.11 0.04 (0.04)
Net realized and unrealized gains
(losses) on investments 1.83 (3.14) 4.26 4.47 4.06 (1.12)
-------- -------- -------- -------- ------- -------
Total from investment operations 1.99 (3.02) 4.43 4.58 4.10 (1.16)
-------- -------- -------- -------- ------- -------
Less distributions--
Dividends from net investment income (0.12) 0.00 (0.15) (0.11) (0.04) 0.00
Distributions from net realized
capital gains (0.14) 0.00 (3.05) (2.41) (1.59) (0.11)
-------- -------- -------- -------- ------- -------
Total distributions (0.26) 0.00 (3.20) (2.52) (1.63) (0.11)
-------- -------- -------- -------- ------- -------
Net asset value, end of period $ 17.33 $ 15.60 $ 18.62 $ 17.39 $ 15.33 $ 12.86
======== ======== ======== ======== ======= =======
Total return (%)** 12.8 (16.2)+ 26.0 30.4 32.1 (8.2)
Net assets, end of period (000) $301,496 $296,116 $245,177 $163,625 $90,455 $73,126
Ratio of operating expenses to average
net assets (%)*** 0.90 0.92++ 0.94 1.19 1.25 1.27
Ratio of net investment income (loss)
to average net assets (%) 0.87 1.04++ 0.97 0.80 0.29 (0.30)
Portfolio turnover rate (%) 113 78+ 94 73 155 87
Without giving effect to the expense
limitations:
Ratio of expenses to average net
assets would have been (%) 0.90 0.92++ 0.94 1.19 1.25 1.27
Net investment income (loss) per
share would have been ($) 0.16 0.12 0.17 0.11 0.04 (0.04)
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
*** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
LOOMIS SAYLES FUNDS 53
<PAGE>
LOOMIS SAYLES SMALL CAP VALUE FUND (RETAIL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 15.57 $ 18.62 $ 17.39
------- ------- -------
Income from investment operations--
Net investment income (loss) 0.09 0.10 0.15***
Net realized and unrealized gains (losses) on
investments 1.84 (3.15) 4.21
------- ------- -------
Total from investment operations 1.93 (3.05) 4.36
------- ------- -------
Less distributions--
Dividends from net investment income (0.08) 0.00 (0.08)
Distributions from net realized capital gains (0.14) 0.00 (3.05)
------- ------- -------
Total distributions (0.22) 0.00 (3.13)
------- ------- -------
Net asset value, end of period $ 17.28 $ 15.57 $ 18.62
======= ======= =======
Total return (%)**** 12.4 (16.4)+ 25.6+
Net assets, end of period (000) $75,302 $54,060 $34,353
Ratio of operating expenses to average net assets (%)***** 1.20 1.19++ 1.25++
Ratio of net investment income (loss) to average net
assets (%) 0.57 0.79++ 0.79++
Portfolio turnover rate (%) 113 78+ 94+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 1.20 1.19++ 1.35++
Net investment income (loss) per share would have been
($) 0.09 0.10 0.13***
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE
BASIS OF THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD.
**** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
***** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
<PAGE>
LOOMIS SAYLES SMALL CAP VALUE FUND (ADMIN CLASS)
<TABLE>
<CAPTION>
Fiscal
Year
Ended
---------
Sept. 30, Jan. 2** to
1999 Dec. 31, 1998**
<S> <C> <C>
- --------------------------------------------------------------------------------------------
Net asset value, beginning of period $15.54 $18.62
------ ------
Income from investment operations--
Net investment income (loss) 0.04 0.03
Net realized and unrealized gains (losses) on investments 1.83 (3.11)
------ ------
Total from investment operations 1.87 (3.08)
------ ------
Less distributions--
Dividends from net investment income (0.03) 0.00
Distributions from net realized capital gains (0.14) 0.00
------ ------
Total distributions (0.17) 0.00
------ ------
Net asset value, end of period $17.24 $15.54
====== ======
Total return (%)*** 12.0 (16.5)+
Net assets, end of period (000) $4,863 $1,046
Ratio of operating expenses to average net assets (%)**** 1.50 1.50++
Ratio of net investment income (loss) to average net assets
(%) 0.30 0.95++
Portfolio turnover rate (%) 113 78+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have been
(%) 1.70 3.99++
Net investment income (loss) per share would have been
($) 0.01 (0.05)
</TABLE>
<TABLE>
<S> <C>
* COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1998.
** FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
*** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
**** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
LOOMIS SAYLES FUNDS 55
<PAGE>
LOOMIS SAYLES WORLDWIDE FUND (INSTITUTIONAL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------------------
Sept. 30, Sept. 30, Dec. 31, May 1** to
1999 1998* 1997 Dec. 31, 1996
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.79 $ 9.86 $ 10.63 $10.00
------ ------ ------- ------
Income from investment operations--
Net investment income (loss) 0.50 0.33 0.47 0.30
Net realized and unrealized gains (losses) on
investments 1.82 (1.40) (0.10) 0.63
------ ------ ------- ------
Total from investment operations 2.32 (1.07) 0.37 0.93
------ ------ ------- ------
Less distributions--
Dividends from net investment income (0.44) 0.00 (0.47) (0.30)
Distributions from net realized capital gains (0.39) 0.00 (0.67) 0.00
------ ------ ------- ------
Total distributions (0.83) 0.00 (1.14) (0.30)
------ ------ ------- ------
Net asset value, end of period $10.28 $ 8.79 $ 9.86 $10.63
====== ====== ======= ======
Total return (%)*** 27.8 (10.9)+ 3.5 9.2+
Net assets, end of period (000) $6,233 $4,907 $ 5,597 $5,189
Ratio of operating expenses to average net
assets (%)**** 1.00 1.00++ 1.00 1.00++
Ratio of net investment income (loss) to average
net assets (%) 5.07 4.37++ 3.89 4.62++
Portfolio turnover rate (%) 165 93+ 134 76+
Without giving effect to the expense
limitations:
Ratio of expenses to average net assets
would have been (%) 3.46 3.28++ 2.62 3.72++
Net investment income (loss) per share would
have been ($) 0.26 0.16 0.27 0.13
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON MAY 1, 1996.
*** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
**** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
<PAGE>
LOOMIS SAYLES WORLDWIDE FUND (RETAIL CLASS)
<TABLE>
<CAPTION>
Fiscal Year Ended
----------------------
Sept. 30, Sept. 30, Jan. 2** to
1999 1998* Dec. 31, 1997
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 8.76 $ 9.86 $ 10.63
------ ------ -------
Income from investment operations--
Net investment income (loss) 0.44 0.30*** 0.38***
Net realized and unrealized gains (losses) on
investments 1.86 (1.40) (0.03)
------ ------ -------
Total from investment operations 2.30 (1.10) 0.35
------ ------ -------
Less distributions--
Dividends from net investment income (0.42) 0.00 (0.45)
Distributions from net realized capital gains (0.39) 0.00 (0.67)
------ ------ -------
Total distributions (0.81) 0.00 (1.12)
------ ------ -------
Net asset value, end of period $10.25 $ 8.76 $ 9.86
====== ====== =======
Total return (%)**** 27.6 (11.2)+ 3.3+
Net assets, end of period (000) $ 138 $ 73 $ 20
Ratio of operating expenses to average net assets (%)***** 1.25 1.25++ 1.25++
Ratio of net investment income (loss) to average net
assets (%) 4.88 3.88++ 3.58++
Portfolio turnover rate (%) 165 93+ 134+
Without giving effect to the expense limitations:
Ratio of expenses to average net assets would have
been (%) 20.19 24.69++ 214.91++
Net investment income (loss) per share would have been
($) (1.28) (1.49)*** (23.33)***
</TABLE>
<TABLE>
<S> <C>
* FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998. IN 1998, THE
FUNDS' FISCAL YEAR END CHANGED FROM DECEMBER 31 TO
SEPTEMBER 30.
** COMMENCEMENT OF OPERATIONS ON JANUARY 2, 1997.
*** PER SHARE NET INVESTMENT INCOME HAS BEEN DETERMINED ON THE
BASIS OF THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD.
**** TOTAL RETURNS WOULD HAVE BEEN LOWER HAD THE ADVISER NOT
REDUCED ITS ADVISORY FEES AND/OR BORNE OTHER OPERATING
EXPENSES.
***** 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.
+ PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
++ ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
</TABLE>
LOOMIS SAYLES FUNDS 57
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
FOR MORE INFORMATION ABOUT THE FUNDS:
The Funds' statement of additional information (SAI) and annual and semi-annual
reports to shareholders provide additional information about the Funds. The SAI
and the auditor's report and financial statements included in the Funds' most
recent annual report to shareholders are incorporated by reference into this
Prospectus, which means that they are part of this Prospectus for legal
purposes.
In the Funds' annual report, you will find a discussion of the market conditions
and investment strategies that significantly affected the Funds' performance
during the last fiscal year.
You may get free copies of these materials, request other information about the
Funds and other Loomis Sayles Funds, or make shareholder inquiries by contacting
your financial adviser, by visiting the Loomis Sayles web site at
http://www.loomissayles.com, or by calling Loomis Sayles toll-free at
800-633-3330.
You may review and copy information about the Funds, including the SAI, at the
Securities and Exchange Commission's Public Reference Room in Washington, DC.
You may call the Commission at 202-942-8090 for information about the operation
of the Public Reference Room. You also may access reports and other information
about the Funds on the EDGAR Database on the Commission's web site at
http://www.sec.gov. You may obtain these reports and other information about the
Funds, with payment of a duplicating fee, by writing the Public Reference
Section of the Commission, Washington, DC 20549-0102, or via e-mail
([email protected]). You may need to refer to the Funds' file number, which is
listed at the bottom of this page.
Loomis Sayles Funds
One Financial Center
Boston, MA 02111
800-633-3330
www.loomissayles.com
File No. 811-6241
<PAGE>
EQUITY FUNDS
Loomis Sayles Funds
One Financial Center
Boston, MA 02111
800-633-3330
www.loomissayles.com
512183
