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Previous: SUNDANCE HOMES INC, 15-12G, 1999-12-01 |
Next: MORGAN STANLEY EMERGING MARKETS DEBT FUND INC, N-30B-2, 1999-12-01 |
Investment Manager
Legg Mason Fund Adviser, Inc.
Baltimore, MD
Investment Advisers
For American Leading Companies Trust:
Legg Mason Fund Adviser, Inc.
Baltimore, MD
For Balanced Trust:
Bartlett & Co.
Cincinnati, OH
For U.S. Small-Cap Value Trust:
Brandywine Asset Management,Inc.
Wilmington, DE
Board of Directors
John F. Curley, Jr., Chairman
Edward A. Taber, III, President
Richard G. Gilmore
Arnold L. Lehman
Dr. Jill E. McGovern
G. Peter O'Brien
T. A. Rodgers
Transfer and Shareholder Servicing Agent
Boston Financial Data Services
Boston, MA
Custodian
State Street Bank & Trust Company
Boston, MA
Counsel
Kirkpatrick & Lockhart LLP
Washington, D.C.
Independent Auditors
Ernst & Young LLP
Philadelphia, PA
This report is not to be distributed unless preceded or accompanied by a
prospectus.
LEGG MASON WOOD WALKER, INCORPORATED
-----------------------------------------
100 Light Street
P.O. Box 1476, Baltimore, MD 21203-1476
410 o 539 o 0000
LMF-013
11/99
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1999
LEGG MASON
INVESTORS TRUST, INC.
AMERICAN LEADING
COMPANIES TRUST
BALANCED TRUST
U.S. SMALL-CAP
VALUE TRUST
Primary Class
[LEGG MASON FUNDS LOGO APPEARS HERE]
THE ART OF INVESTING(SM)
<PAGE>
TO OUR SHAREHOLDERS,
We are pleased to provide you with Legg Mason Investors Trust's semi-annual
report for the Primary Class of the American Leading Companies Trust, the
Balanced Trust, and the U.S. Small-Capitalization Value Trust.
The following table summarizes key statistics for the Primary Class of shares
of each Fund, as of September 30, 1999:
<TABLE>
<CAPTION>
3-Month 12-Month
Total Return(1) Total Return(1)
------------- -------------
<S> <C> <C>
American Leading Companies Trust -14.67% +20.57%
Balanced Trust -5.72% +3.37%
U.S. Small-Capitalization Value Trust -11.24% +6.54%
S&P 500 Stock Composite Index -6.25% +27.80%
Lehman Brothers Intermediate Government/
Corporate Bond Index +0.92% +0.63%
Lipper Balanced Fund Index(2) -4.14% +13.48%
Russell 2000 Index -6.32% +19.07%
</TABLE>
On the following pages, the portfolio managers for each of the Funds discuss
the investment outlook for the Funds. Long-term investment results for each of
the Funds are shown in the Performance Information section of this report.
With less than three months to go until the end of the century, attention
continues to focus on the Year 2000 issue. As you know, the Year 2000 issue is a
computer programming problem that affects the ability of computers to correctly
process dates of January 1, 2000, and beyond. The Year 2000 date change will
have no adverse impact on Legg Mason's ability to service its clients. We are on
target to complete this important project. Industry-wide testing sponsored by
the Securities Industry Association ("SIA") was conducted in March and April of
1999, with Legg Mason, its brokerage subsidiaries and primary vendors actively
participating and achieving positive results.
Legg Mason's Year 2000 Project has four phases. The Inventory Phase and the
Assessment Phase are already complete. The Remediation Phase and the Testing
Phase are currently underway and on target. Renovation and replacement of
existing internal systems, where necessary, is also complete, and all of our
critical vendors have certified their Year 2000 compliance. Most noncritical
vendors have also certified their Year 2000 compliance, and we expect the
remaining vendors to certify their compliance shortly. Although individual
customer testing will not be available, we have successfully tested models
representing all forms of accounts maintained at Legg Mason, including the
Trust's shareholder accounts.
- ----------------
(1)Total return measures investment performance in terms of appreciation or
depreciation in net asset value per share plus dividends and any capital gain
distributions. It assumes that dividends and distributions were reinvested at
the time they were paid.
(2)The Lipper Balanced Fund Index is composed of approximately 30 funds whose
primary objective is to conserve principal by maintaining a balanced portfolio
of stocks and bonds with stock/bond ratio ranges of approximately 60%/40%.
<PAGE>
We hope you will consider using the Trust for investments of additional funds
as they become available. Some shareholders regularly add to their investment in
the Funds by authorizing automatic, monthly transfers from their bank checking
or Legg Mason accounts. Your Financial Advisor will be happy to help you make
these arrangements if you would like to purchase additional shares in this
convenient manner.
Sincerely,
/s/Edward A. Taber, III
Edward A. Taber, III
President
October 27, 1999
2
<PAGE>
PORTFOLIO MANAGERS' COMMENTS
AMERICAN LEADING COMPANIES TRUST
Market Commentary
The equity markets turned unfriendly in the third quarter, as two rounds of
Fed tightening, and the prospect of more to come, sent the Dow Industrials and
the S&P 500 index into negative territory for the first time since the third
quarter of 1998. For the three months, the S&P 500 was down just over 6%, and
the Dow was down just over 5%. Outside of a fairly narrow list of technology
stocks and takeovers, the damage was more severe. Only 24 stocks in the S&P 500
were up more than 20% in the quarter, whereas 115 were down more than 20%. Of
the 24 that advanced more than 20%, 18 were technology related. The New York
Stock Exchange advance/decline line, a measure of the trend of the majority of
stocks, made new lows throughout the quarter, and was much weaker than the
performance of the Dow and S&P 500 would suggest.
The largest companies in the S&P 500 reasserted their market leadership in
the third quarter, reestablishing a trend that has been in effect for most of
the last five years. You may recall from our last shareholder's letter that the
June quarter ran counter to this trend, as the largest 100 companies in the S&P
500 lagged their smaller counterparts. This made sense to me as I believed that
these "mega" capitalization stocks were pricey and that better opportunities
existed in companies with market capitalizations between $5 and $20 billion,
still very large companies in the overall scheme of things, just not the giants.
For the third quarter at least, that judgment has proven to be wrong, as the 100
largest companies in the S&P 500 were down less than 5% in the quarter, while
the other 400 were down more than 10%.
Investment Results
Cumulative results for the Fund for the three-month, nine-month, one-year and
three-year periods ended September 30, 1999, are listed below, along with those
of some representative benchmarks:
<TABLE>
<CAPTION>
Three Nine
Months Months One Year Three Years
------- ------- -------- ----------
<S> <C> <C> <C> <C>
American Leading Companies -14.67% -2.72% +20.57% +64.26%
S&P 500 Composite Index -6.25% +5.36% +27.80% +95.73%
Lipper Diversified Equity Funds -5.37% +5.23% +27.19% +57.19%
Dow Jones Industrial Average* -5.38% +14.00% +34.04% +85.46%
- -----------------
</TABLE>
*Dividends reinvested monthly.
By any measure, the Fund had a poor quarter, significantly trailing the S&P
500, the Lipper General Equity Funds Index, and the Dow Industrials for the
three months. The Fund lost enough ground in the quarter that the year-to-date,
one-year and three-year comparisons are also unfavorable.
As your portfolio manager, these results are a disappointment to me, as they
probably are to many of you. In the balance of this letter, I will identify the
major reasons for the Fund's sub-par performance in the latest quarter, and what
steps I am taking in hopes of improving performance going forward. There are
basically five reasons why the Fund had a difficult September quarter. First, as
noted above, on a strategic basis, I believed that the broadening of the market
that occurred in the second
3
<PAGE>
PORTFOLIO MANAGERS' COMMENTS -- CONTINUED
AMERICAN LEADING COMPANIES TRUST -- CONTINUED
quarter -- away from the largest 25 to 50 mega-cap companies in the S&P 500
and into a broader range of stocks -- would continue. So far, that has turned
out to be wrong. The mega-caps were the safest place to be in the third quarter.
Second, technology stocks were by far the strongest performers in the quarter,
and the Fund was underweighted in technology versus an S&P 500 weighting of 25%.
The technology stocks in the Fund -- especially Gateway, Intel, Cisco and
Microsoft -- benefited performance. We just did not have enough of them. Over
time, I think it makes sense to have at least a market weighting in technology,
and I did add to our holdings during the quarter with the purchase of a full
position in Gateway and a starter position in Lucent Technologies. At present,
however, many other leading technology stocks trade at valuation levels that I
find unappealing.
The third factor which caused the Fund to lag the market in the quarter was
our large exposure to financial stocks, which declined about three times as much
as did the S&P 500 during the quarter. Financials remain a core holding, since
they have had faster growth, higher returns on equity, and much lower valuations
than the market as a whole. These characteristics are what have persuaded us to
retain (and even add to) these holdings through what we regard as a temporary
downdraft, rather than selling, paying taxes and buying them back at some future
date.
The fourth factor which hurt the Fund's performance in the quarter was
earnings disappointments. Earnings shortfalls -- even those that were relatively
minor -- were severely punished in the quarter, and the Fund, unfortunately, had
a number -- including Avon Products, Saks, Bank One and Xerox. The severity of
some stock declines was out of all proportion, in my judgment, to the magnitude
of the earnings shortfall. For example, on a 10% shortfall from prior earnings
expectations, Avon Products shares fell 55% in the quarter. On an 8% earnings
shortfall, Bank One shares dropped 42% in the quarter. The worst performer in
the quarter was Waste Management, where we -- and the rest of Wall Street --
entirely misjudged the company's earnings potential. Rite Aid and Mattel were
also major disappointments. Finally, the Fund's managed care stocks (United
HealthCare and Foundation) got blind-sided on the last two days of the quarter
by the threat of class action lawsuits. While it seems to us that the legal
premise for these lawsuits is highly questionable, this looming threat has
knocked the stocks down and, at least temporarily, overshadowed an otherwise
favorable outlook.
One frustrating aspect of the quarter was that several of the things which
hurt performance were the result of my efforts to be defensive -- buying
reasonably valued stocks with decent (I thought) outlooks -- rather than paying
what looked to me like unreasonably high prices for the very largest companies.
The good news is that many of the stocks which hurt performance in the quarter
are now very attractively priced, in my opinion, and offer substantial recovery
potential after mutual fund tax-selling abates at the end of October. I have
been repositioning the portfolio to weed out the losers and to try to take
advantage of the best opportunities.
Outlook
As usual, we claim no special insight into when the market weakness that
began several months ago will end. The specter of rising energy and gold prices,
together with continued strong economic growth, have triggered fears of rising
inflation. The Fed has raised interest rates twice and threatens to do so again.
These factors have rightly dampened investor enthusiasm, which is unlikely to
reverse until these conditions change.
4
<PAGE>
Despite the trying quarter and difficult current market conditions, we are
determined to improve American Leading Companies' recent performance. One
particular goal is to identify and eliminate problem stocks from the portfolio
more quickly. Apart from this, we believe our investment approach -- buying good
quality at reasonable prices -- is basically sound, and we will continue to work
toward our goal of producing satisfactory investment results going forward.
As always, we welcome your comments or questions.
David E. Nelson, CFA
Portfolio Manager
October 25, 1999
DJIA 10349.93
5
<PAGE>
Portfolio Managers' Comments
Balanced Trust
Equity Portion
Our hesitation in pronouncing the second quarter recovery in value stocks as
the beginning of a longer-term trend proved prescient as growth stocks
reasserted themselves in the third quarter. The effect of this reversal on the
Fund was ameliorated due to our gradual shift to a more relative value
investment approach that we alluded to in our last letter. Although we still
emphasize value in our investment decisions, we are not as stringent in applying
price/earnings and asset value criteria, thereby giving more consideration to
the growth aspects of a company. In addition, we strive to be more aligned to
the larger capitalization market indices. It is important to emphasize that
these shifts are being done carefully and opportunistically. We believe, based
on our experience using this relative value discipline, that over the long term
this approach will help us to produce returns that are competitive and more
correlated with the S&P 500, while exhibiting less quarter-to-quarter
volatility.
The growth-driven market trend of the first quarter was manifested in the
portfolio as Intel, SYSCO and Tyco, growth-oriented companies, were among the
better performers. On the lagging side were Martin Marietta Materials, Kaydon
and Aetna -- all companies with compelling value characteristics.
During the quarter we took advantage of several opportunities to improve the
portfolio within the framework described above. We established modest positions
in IBM, MCI WorldCom and Nortel Networks to build up our technology exposure.
Weakness in pharmaceutical stocks allowed us to pick up some solid holdings in
Abbott Labs and Merck at attractive prices relative to their growth and
profitability profile. Smaller positions were also taken in Cintas and Home
Depot. Although these two companies are more traditional growth stocks,
temporary price corrections helped us to establish holdings at more reasonable
valuations, which as of this writing have proved rewarding. Numerous holdings
were cut back to fund these purchases, while Lockheed Martin, Ferro and
Convergys were eliminated from the portfolio.
Fixed Income Portion
For the quarter ended September 30, 1999, interest rates continued trending
somewhat higher, with most maturities experiencing an approximate ten basis
point(1) increase in yield. As a result of this continuing increase in interest
rates, most maturities along the yield curve have produced a negative total
return on a year-to-date basis. On August 24th, the Federal Reserve raised the
target funds rate by 25 basis points, and there is increased expectation that at
least one more rate increase is in the offing.
We are pleased to report that on a relative basis, the Fund's fixed income
securities performed well during this period. Treasuries, agencies and
mortgage-backed securities were the best performing asset classes, and we have
over three-fourths of the Fund's fixed income investments committed to these
sectors. On the other hand, corporate bonds underperformed due to increasing
supply in this sector. During the quarter, we again increased our position in
corporate bonds to take advantage of the continuing widening yield spread in
this sector. Should corporate yield spreads continue widening, we would expect
to continue to boost our position in this sector. We continue to find value in
the
- --------------------
(1) 100 basis points = 1%.
6
<PAGE>
mortgage-backed sector, as well as inflation-indexed notes, Treasury STRIPS and
corporate bonds, which we believe all offer compelling value at current levels.
As to our outlook going forward, we believe that the Federal Reserve will
remain vigilant in its fight against inflation, and we expect to see an
additional rate hike sometime during the fourth quarter with potentially at
least another tightening sometime in the first quarter of 2000. All things
considered, we are bullish on the U.S. fixed income markets, as we believe that
the increase in yields is temporary in nature with a number of positives, such
as productivity gains and the deflationary effects of the Internet, able to
serve as offsets to some of the increased inflationary pressure that we have
seen recently.
As always, we will continue to search for the most compelling fixed income
and equity investments.
Woodrow H. Uible, CFA Dale H. Rabiner, CFA
Equity Portfolio Manager Fixed Income Portfolio Manager
October 27, 1999
DJIA 10394.89
7
<PAGE>
Portfolio Managers' Comments
U.S. Small-Capitalization Value Trust
For the quarter, the portfolio was down -11.2%, compared to declines of -7.8%
for the Russell 2000 Value, -6.3% for the Russell 2000, and -6.3% for the S&P
500. For the year to date, the portfolio has returned -3.3%, compared to returns
of -3.0% for the Russell 2000 Value, 2.4% for the Russell 2000, and 5.4% for the
S&P 500.
The third quarter was a tough quarter for all segments of the U.S. equity
market. Although interest rates ended the quarter almost exactly where they were
as of June 30, investors were concerned by the sharp increase over the last
twelve months: the long bond had risen from a low of 4.7% in early October 1998
to just over 6.0% at the end of this quarter. The other areas of investor
concern were the U.S. trade deficit, which continued to expand, and the steep
decline in the dollar versus the yen. These related events were viewed as
potential signals of resurgent inflation. With these worries, investors backed
away from U.S. equities across the board, as both large-caps and small-caps fell
and prices declined in almost all sectors. Value stocks were down somewhat more
than the rest of the equity market, as cyclical stocks lagged and technology
surged. The market has continued to become more volatile, with larger swings up
and down as well as rapid changes in market leadership.
One of the best performing sectors in small-cap for the quarter and year to
date was the energy and oil services area. These stocks benefited from crude oil
prices reaching the $25 per barrel level at the end of the quarter after having
dropped to $12 at the end of 1998. Early in the year, we had increased our oil
services holdings as the low oil price levels drove the stocks to significant
valuation discounts. Although we do not forecast oil prices, we believe our
disciplined investment process helps us to identify stocks with attractive
valuations where fundamentals are expected to improve rather than deteriorate.
In this case, we felt oil prices were more likely to rise than decline. Because
we held a larger than benchmark weight in these stocks, the sector provided a
strong positive contribution to portfolio performance. We have begun to reduce
our oil-related holdings as many of these stocks have reached our sell targets.
Retail stocks also provided a positive contribution to the portfolio versus the
benchmarks. Apparel stocks, in particular, had become significantly undervalued
due to concerns about global economic turmoil impacting the U.S. economy. With
the U.S. consumer very active in 1999, these stocks have rallied.
The biggest negative impact on the portfolio, both in the quarter and in
1999, came from the technology sector. Semiconductor and networking stocks were
expensively valued coming into the year, so the portfolio had low weightings in
these industries. However, these companies have been market favorites and
delivered strong stock performance. The health care sector has also been
difficult for the portfolio. Although we held only a small weighting in
hospitals, HMOs, geriatric care providers and rehabilitation centers, our stocks
have been badly hurt by changes in Medicare reimbursement.
We believe small-cap value stocks remain at significant valuation discounts
to the rest of the U.S. equity markets. The sharp rally in these stocks in the
second quarter did little to erase this deep undervaluation. Corporate investors
continue to recognize and act upon these stocks' attractive valuations.
Acquisitions, leveraged buyouts, and stock buy-backs have been at very high
levels throughout the year. At some point, this corporate activity will
influence investors, who have mostly ignored
8
<PAGE>
small-cap value stocks over the last twelve months. As we experienced in the
second quarter, when investors come to realize the opportunities these stocks
represent, large, swift price gains can result. Given the depth of their
valuation discount, we feel the rebound can also be sustained over a much longer
time period than just a single quarter.
As always, we welcome the opportunity to discuss the portfolio and this
report in more detail. If you have any questions or comments, please contact us.
Henry F. Otto Steven M. Tonkovich
Managing Director Managing Director
October 27, 1999
DJIA 10394.89
9
<PAGE>
Performance Information
Legg Mason Investors Trust, Inc.
Total Returns for One Year, Five Years, and Life of Class, as of
September 30, 1999
The returns shown are based on historical results and are not intended
to indicate future performance. Total return measures investment
performance in terms of appreciation or depreciation in net asset value
per share plus dividends and any capital gain distributions. It assumes
that dividends and distributions were reinvested at the time they were
paid. The investment return and principal value of an investment in each
of these Funds will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Average
annual returns tend to smooth out variations in a Fund's return, so that
they differ from actual year-to-year results. No adjustment has been made
for any income taxes payable by shareholders.
Each Fund offers two classes of shares:Primary Class and Navigator
Class. Information about the Navigator Class of U.S. Small-Cap Value
Trust, offered only to certain institutional investors, is contained in a
separate report to its shareholders. The Navigator Class shares of
American Leading Companies were redeemed on December 3, 1998. The
Navigator Class of Balanced Trust has not commenced operations.
The Funds' total returns as of September 30, 1999, were as follows:
<TABLE>
<CAPTION>
American Leading Balanced U.S. Small-Cap
Companies Trust Trust Value Trust
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Average Annual Total Return
Primary Class:
One Year +20.57% +3.37% +6.54%
Five Years +17.19% N/A N/A
Life of Class(A) +14.06% +7.27% -12.63%
Cumulative Total Return
Primary Class:
One Year +20.57% +3.37% +6.54%
Five Years +121.01% N/A N/A
Life of Class(A) +122.69% +23.43% -16.05%
- ---------------------------------------------------------------------------------------------------
</TABLE>
(A)Primary Class inception dates are:
American Leading Companies Trust -- September 1, 1993
Balanced Trust -- October 1, 1996
U.S. Small-Cap Value Trust -- June 15, 1998
10
<PAGE>
American Leading Companies Trust
SELECTED PORTFOLIO PERFORMANCE*
Strong performers for the 3rd quarter 1999
- --------------------------------------------------------------------------------
1. Amgen Inc. +33.9%
2. Intel Corporation +24.9%
3. Minnesota Mining and Manufacturing
Company (3M) +10.5%
4. Cisco Systems, Inc. +6.3%
5. The Proctor & Gamble Company +5.0%
* SECURITIES HELD FOR THE ENTIRE QUARTER.
Weak performers for the 3rd quarter 1999
- --------------------------------------------------------------------------------
1. Waste Management Inc. -64.2%
2. Avon Products, Inc. -55.3%
3. Saks Incorporated -47.4%
4. Rite Aid Corporation -43.9%
5. Bank One Corporation -41.6%
PORTFOLIO CHANGES
Securities added during the 3rd quarter 1999
- --------------------------------------------------------------------------------
Gateway, Inc.
Lucent Technologies, Inc.
Securities sold during the 3rd quarter 1999
- --------------------------------------------------------------------------------
Campbell Soup Company
Dole Food Company, Inc.
Hilton Hotels Corporation
11
<PAGE>
Performance Information -- Continued
Balanced Trust
SELECTED PORTFOLIO PERFORMANCE*
Strong performers for the 3rd quarter 1999
- --------------------------------------------------------------------------------
1. Intel Corporation +24.9%
2. SYSCO Corporation +17.6%
3. Dover Corporation +16.8%
4. Tyco International Ltd. +9.0%
5. McDonald's Corporation +4.6%
* Securities held for the entire quarter.
Weak performers for the 3rd quarter 1999
- --------------------------------------------------------------------------------
1. Aetna Inc. -44.9%
2. Martin Marietta Materials, Inc. -32.3%
3. Kansas City Southern
Industries, Inc. -27.2%
4. Kaydon Corporation -26.0%
5. AT&T Corp. -22.1%
PORTFOLIO CHANGES
Securities added during the 3rd quarter 1999
- --------------------------------------------------------------------------------
Atlantic Richfield Company (ARCO)
Cintas Corporation
General Electric Capital Corporation
6.29%, 12/15/07
International Business Machines Corporation
MCI WorldCom, Inc.
Nortel Networks Corporation
The Home Depot, Inc.
United States Treasury STRIPS
0%, 5/15/06
Securities sold during the 3rd quarter 1999
- --------------------------------------------------------------------------------
Convergys Corporation
Ferro Corporation
Lockheed Martin Corporation
Service Corporation International
Toronto Dominion Bank
7.875%, 8/15/04
United States Treasury Notes
6.25%, 6/30/02
United States Treasury Notes
5.875%, 2/15/04
United States Treasury Notes
5.50%, 2/15/08
United States Treasury STRIPS
0%, 2/15/02-2/15/05
12
<PAGE>
U.S. Small-Capitalization Value Trust(+)
SELECTED PORTFOLIO PERFORMANCE*
STRONG PERFORMERS FOR THE 3RD QUARTER 1999
- --------------------------------------------------------------------------------
1. Westaff, Inc. +209.6%
2. Specialty Care Network, Inc. +96.4%
3. Tollgrade Communications, Inc. +76.2%
4. Lady Luck Gaming Corporation +73.0%
5. Education Development
Corporation +71.4%
(+) Portfolio changes have not been reported for U.S. Small-Cap due to the
high volume of trading during the quarter.
(*) Securities held for the entire quarter.
Weak performers for the 3rd quarter 1999
- --------------------------------------------------------------------------------
1. Integrated Health Services, Inc. -80.5%
2. FirstCity Financial Corporation -72.7%
3. Pilgrim's Pride Corporation -71.0%
4. Response Oncology, Inc. -68.1%
5. CHS Electronics, Inc. -67.1%
13
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets
Legg Mason Investors Trust, Inc.
September 30, 1999 (Unaudited)
(Amounts in Thousands)
American Leading Companies Trust
Shares/Par Value
- ----------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS AND EQUITY INTERESTS -- 94.3%
Airlines -- 1.5%
<S> <C> <C>
AMR Corporation 88 $ 4,796(A)
--------
Automotive -- 2.0%
Delphi Automotive Systems Corporation 35 561
Ford Motor Company 50 2,510
General Motors Corporation 50 3,147
--------
6,218
--------
Banking -- 11.9%
Bank One Corporation 235 8,181
Bank of America Corporation 74 4,096
Citigroup Inc. 266 11,682
Mellon Bank Corporation 80 2,700
The Chase Manhattan Corporation 133 10,025
--------
36,684
--------
Capital Goods -- 1.0%
General Electric Company 25 2,964
--------
Chemicals -- 0.6%
E.I. du Pont de Nemours and Company 30 1,826
--------
Computer Services and Systems -- 13.8%
Cisco Systems, Inc. 30 2,057(A)
Gateway, Inc. 200 8,887(A)
Hewlett-Packard Company 17 1,592
Intel Corporation 105 7,803
International Business Machines Corporation 120 14,565
Lucent Technologies, Inc. 30 1,946
Storage Technology Corporation 300 5,775(A)
--------
42,625
--------
Computer Software -- 2.3%
Microsoft Corporation 80 7,245(A)
--------
Consumer Cyclicals -- 3.0%
Mattel, Inc. 402 7,638
Wal-Mart Stores, Inc. 34 1,617
--------
9,255
- -------------------------------------------------------------------------------------------------------------------------
14
<PAGE>
Shares/Par Value
- ----------------------------------------------------------------------------------------------------------------------------
Consumer Staples -- 2.2%
Avon Products, Inc. 125 $ 3,102
Kimberly-Clark Corporation 50 2,625
The Procter & Gamble Company 12 1,087
--------
6,814
--------
Electrical Equipment and Electronics -- 4.1%
Koninklijke (Royal) Philips Electronics N.V. 124 12,544(A)
--------
Energy -- 1.2%
Exxon Corporation 15 1,101
Texaco, Inc. 40 2,525
--------
3,626
--------
FINANCIAL SERVICES -- 4.0%
Fannie Mae 60 3,761
MGIC Investment Corporation 180 8,595
--------
12,356
--------
Food, Beverage and Tobacco -- 2.5%
PepsiCo, Inc. 95 2,874
Philip Morris Companies Inc. 78 2,667
Sara Lee Corporation 90 2,109
--------
7,650
--------
Health Care -- 7.3%
Foundation Health Systems, Inc. 625 5,898(A)
Johnson & Johnson 14 1,305
McKesson HBOC, Inc. 245 7,105
United HealthCare Corporation 170 8,277
--------
22,585
--------
Hotels and Motels -- 1.6%
Starwood Hotels & Resorts Worldwide, Inc. 225 5,020
--------
Insurance -- 4.4%
American International Group, Inc. 14 1,207
Berkshire Hathaway Inc. - Class B 3 5,939(A)
Conseco, Inc. 340 6,568
--------
13,714
--------
Manufacturing -- 1.0%
Minnesota Mining and Manufacturing Company (3M) 33 3,170
- -------------------------------------------------------------------------------------------------------------------------
15
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
American Leading Companies Trust -- Continued
Shares/Par Value
- ----------------------------------------------------------------------------------------------------------------------------
Media -- 4.0%
America Online, Inc. 118 $ 12,272(A)
--------
Non-Hazardous Waste Disposal -- 2.0%
Waste Management Inc. 320 6,160
--------
Office Automation and Equipment -- 1.5%
Xerox Corporation 110 4,613
--------
Pharmaceuticals -- 8.5%
Amgen Inc. 122 9,943(A)
Bristol-Myers Squibb Company 85 5,738
Merck & Co., Inc. 78 5,055
Pfizer Inc. 45 1,617
Schering-Plough Corporation 88 3,839
--------
26,192
--------
Real Estate -- 2.2%
Equity Office Properties Trust 290 6,743
--------
Retail -- 0.9%
Rite Aid Corporation 195 2,693
--------
Retail Sales -- 2.2%
Saks Incorporated 240 3,648(A)
Toys "R" Us, Inc. 216 3,240(A)
--------
6,888
--------
Savings and Loan -- 2.5%
Washington Mutual, Inc. 264 7,734
--------
Telecommunications -- 4.3%
AT&T Corp. 90 3,915
MCI WorldCom, Inc. 130 9,344(A)
--------
13,259
--------
Transportation -- 1.8%
Burlington Northern Santa Fe Corporation 200 5,500
--------
Total Common Stocks and Equity Interests
(Identified Cost-- $246,528) 291,146
- -------------------------------------------------------------------------------------------------------------------------
16
<PAGE>
Shares/Par Value
- ----------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 6.3%
Bank of America
5.48%, dated 9/30/99, to be repurchased at $9,754 on 10/1/99 (Collateral:
$10,696 Federal Home Loan Bank mortgage-backed securities, 6%, due
5/1/29, value $10,026) $9,753 $ 9,753
Goldman, Sachs & Company
5.40%, dated 9/30/99, to be repurchased at $9,754 on 10/1/99
(Collateral: $10,518 Fannie Mae mortgage-backed securities,
6.50%, due 5/1/29, value $10,133) 9,752 9,752
--------
Total Repurchase Agreements (Identified Cost-- $ 19,505) 19,505
- ----------------------------------------------------------------------------------------------------------------------------
Total Investments-- 100.6% (Identified Cost-- $ 266,033) 310,651
Other Assets Less Liabilities-- (0.6)% (1,846)
--------
NET ASSETS CONSISTING OF:
Accumulated paid-in capital applicable to:
17,463 shares outstanding $262,277
Accumulated net investment income/(loss) (777)
Accumulated net realized gain/(loss) on investments 2,687
Unrealized appreciation/(depreciation) of investments 44,618
--------
NET ASSETS-- 100.0% $308,805
--------
NET ASSET VALUE PER SHARE
PRIMARY CLASS $17.68
--------
- ----------------------------------------------------------------------------------------------------------------------------
(A) Non-income producing.
See notes to financial statements.
17
<PAGE>
Statement of Net Assets
Legg Mason Investors Trust, Inc.
September 30, 1999 (Unaudited)
(Amounts in Thousands)
BALANCED TRUST
Shares/Par Value
- ----------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS AND EQUITY INTERESTS -- 60.6%
Advertising/Media -- 1.4%
Time Warner, Inc. 11 $ 668
--------
Automotive -- 1.8%
Ford Motor Company 17 853
--------
Chemicals -- 1.4%
Potash Corporation of Saskatchewan, Inc. 13 671
--------
Computer Services and Systems -- 1.8%
Compaq Computer Corporation 25 573
International Business Machines Corporation 2 267
--------
840
--------
Construction and Building Materials -- 1.3%
Martin Marietta Materials, Inc. 16 619
--------
Electrical Equipment and Electronics -- 3.5%
Intel Corporation 13 966
Molex Incorporated 20 661
--------
1,627
--------
Energy -- 3.6%
Atlantic Richfield Company (ARCO) 5 399
Phillips Petroleum Company 14 658
Unocal Corporation 17 630
--------
1,687
--------
Finance -- 9.6%
Citigroup Inc. 23 1,012
Fannie Mae 23 1,442
H&R Block, Inc. 22 934
Marshall & Ilsley Corporation 12 685
Mellon Bank Corporation 12 405
--------
4,478
--------
Food, Beverage and Tobacco -- 6.7%
Anheuser-Busch Companies, Inc. 10 729
McDonald's Corporation 20 860
Philip Morris Companies Inc. 27 923
SYSCO Corporation 17 596
--------
3,108
--------
18
<PAGE>
Shares/Par Value
- ----------------------------------------------------------------------------------------------------------------------------
Health Care -- 1.5%
Abbott Laboratories 20 $ 717
--------
Insurance -- 0.5%
Aetna Inc. 5 222
--------
Investment Companies -- 2.2%
Blackrock North American Government Income Trust, Inc. 100 1,006
--------
Manufacturing -- 4.4%
Dover Corporation 16 638
Kaydon Corporation 26 647
Tyco International Ltd. 8 774
--------
2,059
--------
Pharmaceuticals -- 1.7%
Merck & Co., Inc. 12 771
--------
Real Estate -- 4.1%
Chateau Communities, Inc. 47 1,222
Post Properties, Inc. 17 668
--------
1,890
--------
Retail -- 0.7%
The Home Depot, Inc. 5 343
--------
Savings and Loan -- 2.8%
Charter One Financial, Inc. 56 1,287
--------
Services -- 0.7%
Cintas Corporation 6 318
--------
Telecommunications -- 4.6%
AT&T Corp. 23 1,000
Cincinnati Bell, Inc. 15 292
MCI WorldCom, Inc. 8 539(A)
Nortel Networks Corporation 6 296
--------
2,127
--------
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
Balanced Trust -- Continued
Rate Maturity Date Shares/Par Value
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Transportation -- 6.3%
AMR Corporation 12 $ 654(A)
GATX Corporation 25 761
Kansas City Southern Industries, Inc. 18 854
Union Pacific Corporation 14 673
--------
2,942
--------
Total Common Stocks and Equity Interests
(Identified Cost-- $26,211) 28,233
- --------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES -- 10.4%
Associates Corporation of North America 5.50% 2/15/02 $ 900 880
General Electric Capital Corporation 6.29% 12/15/07 1,000 999
Merrill Lynch & Co., Inc. 6% 11/15/04 1,000 964
Safeway Inc. 5.75% 11/15/00 770 764
Union Pacific Corporation 7.375% 5/15/01 200 202
Union Pacific Corporation 5.78% 10/15/01 1,050 1,030
--------
Total Corporate Bonds and Notes
(Identified Cost-- $4,923) 4,839
- --------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 26.7%
Inflation-Indexed Securities -- 4.9%
United States Treasury
Inflation-Indexed Security 3.625% 7/15/02 to 1/15/08 2,335 2,299(C)
--------
Medium-Term Notes -- 4.2%
Fannie Mae 5.60% 2/2/01 1,000 994
Federal Farm Credit Bank 5.52% 2/25/02 1,000 985
--------
1,979
--------
Mortgage-Backed Securities -- 12.0%
Fannie Mae 6% 12/1/25 to 10/1/28 2,885 2,695
Freddie Mac 6% 3/1/26 71 66
Government National Mortgage
Association 6% 8/15/28 to 12/15/28 3,024 2,807
--------
5,568
--------
Treasury Notes/STRIPS -- 5.6%
United States Treasury Notes 5.25% 8/15/03 900 882
United States Treasury STRIPS 0% 8/15/05 to 5/15/06 2,500 1,705(B)
--------
2,587
--------
Total U.S. Government and Agency Obligations
(Identified Cost-- $12,853) 12,433
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS -- 2.0%
State Street Corporation
3.50%, dated 9/30/99, to be repurchased at $922 on 10/01/99
(Collateral: $930 Fannie Mae medium-term notes,
5.12%, due 05/12/00, value $963)
Total Repurchase Agreements (Identified Cost-- $922) $922 $ 922
- ---------------------------------------------------------------------------------------------------------------------------
Total Investments-- 99.7% (Identified Cost-- $44,909) 46,427
Other Assets Less Liabilities-- 0.3% 143
--------
NET ASSETS CONSISTING OF:
Accumulated paid-in capital applicable to:
4,042 shares outstanding $45,334
Accumulated net investment income/(loss) 231
Accumulated net realized gain/(loss) on investments (513)
Unrealized appreciation/(depreciation) of investments 1,518
--------
NET ASSETS-- 100.0% $46,570
--------
NET ASSET VALUE PER SHARE $11.52
--------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A)Non-income producing.
(B)ZERO-COUPON BOND -- A BOND WITH NO PERIODIC INTEREST PAYMENTS WHICH IS
SOLD AT SUCH A DISCOUNT AS TO PRODUCE A CURRENt YIELD-TO-MATURITY.
(C)UNITED STATES TREASURY INFLATION-INDEXED SECURITY -- U.S. TREASURY
SECURITY WHOSE PRINCIPAL VALUE IS ADJUSTED DAILY IN ACCORDANCE WITH
CHANGES IN THE CONSUMER PRICE INDEX. INTEREST IS CALCULATED ON THE BASIS
OF THE CURRENT ADJUSTED PRINCIPAL VALUE.
See notes to financial statements.
21
<PAGE>
Statement of Net Assets
Legg Mason Investors Trust, Inc.
September 30, 1999 (Unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
U.S. SMALL-CAPITALIZATION VALUE TRUST
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND EQUITY INTERESTS -- 97.6%
Aerospace/Defense -- 1.2%
Alliant Techsystems Inc. 5 $ 326(A)
Allied Research Corporation 3 16(A)
EDO Corporation 4 24
ESCO Electronics Corporation 4 40(A)
GenCorp Inc. 13 245
Herley Industries, Inc. 3 40(A)
International Airline Support Group, Inc. 2 6(A)
Kaman Corporation 14 184
SIFCO Industries, Inc. 3 22
SPACEHAB, Incorporated 6 30(A)
--------
933
--------
Apparel -- 3.5%
Bernard Chaus, Inc. 15 41(A)
Catherines Store Corporation 3 35(A)
Deb Shops, Inc. 4 84
Fruit Of The Loom, Inc. 14 47(A)
Garan, Incorporated 4 121
Genesco Inc. 19 235(A)
Goody's Family Clothing, Inc. 25 198(A)
Hartmarx Corporation 12 49(A)
Kellwood Company 13 295
Maxwell Shoe Company Inc. 6 53(A)
Nautica Enterprises, Inc. 37 600(A)
One Price Clothing Stores, Inc. 3 11(A)
Oxford Industries, Inc. 6 123
Paul Harris Stores, Inc. 8 32(A)
Perry Ellis International, Inc. 4 40(A)
PremiumWear, Inc. 1 5(A)
R. G. Barry Corporation 6 36(A)
S&K Famous Brands, Inc. 3 23(A)
Sport-Haley, Inc. 3 14(A)
Superior Uniform Group Inc. 1 15
Syms Corp. 13 94(A)
Tandy Brands Accessories, Inc. 3 44(A)
The Cato Corporation 12 169
The Dress Barn, Inc. 17 303(A)
--------
2,667
--------
Automotive -- 3.0%
Arvin Industries, Inc. 13 415
Autocam Corporation 2 41
Bandag, Incorporated 12 394
22
<PAGE>
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Automotive -- Continued
Bandag, Incorporated - Class A 4 $ 91
Barnes Group Inc. 12 245
Collins Industries, Inc. 5 34
Dura Automotive Systems, Inc. 9 222(A)
Edelbrock Corporation 2 34(A)
Featherlite Inc. 4 18(A)
Monaco Coach Corporation 6 148(A)
Monro Muffler Brake, Inc. 5 35(A)
R & B, Inc. 6 32(A)
Simpson Industries, Inc. 14 150
Strattec Security Corporation 2 80(A)
TBC Corporation 15 100(A)
The Standard Products Company 7 248
--------
2,287
--------
Broadcast/Media -- 0.1%
Courier Corporation 2 36
VDI Media 7 71(A)
--------
107
--------
Chemicals -- 3.3%
A. Schulman, Inc. 19 331
Aceto Corporation 1 10
Albemarle Corporation 13 264
American Vanguard Corporation 1 5
Atlantis Plastics, Inc. 2 31(A)
Balchem Corporation 3 17
Chemfab Corporation 1 10(A)
Ethyl Corporation 85 329
Georgia Gulf Corporation 22 388
Hawkins Chemical, Inc. 3 24
International Specialty Products Inc. 22 219(A)
NL Industries, Inc. 39 491
Northern Technologies International Corporation 2 16
Quaker Chemical Corporation 7 111
Stepan Company 7 166
Sybron Chemicals Inc. 4 59(A)
TETRA Technologies, Inc. 2 22(A)
The General Chemical Group Inc. 15 52
--------
2,545
--------
Commercial/Industrial Services -- 6.1%
ADVO, Inc. 16 317(A)
Alternative Resources Corporation 5 26(A)
23
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Commercial/Industrial Services -- Continued
Avis Rent A Car, Inc. 10 $ 211(A)
BCT International, Inc. 3 6(A)
Bell Microproducts Inc. 7 56(A)
BHA Group Holdings, Inc. 4 37
Business Resource Group 1 4(A)
Butler Manufacturing Company 5 129
Cadmus Communications Corporation 5 52
Cameron Ashley Building Products, Inc. 6 58(A)
CDI Corp. 14 371(A)
Children's Comprehensive Services, Inc. 4 30(A)
Cogeneration Corporation of America 5 119(A)
Corrpro Companies 5 31(A)
CORT Business Services Corporation 7 157(A)
Daisytek International Corporation 6 77(A)
Electro Rent Corporation 6 75(A)
Ellett Brothers, Inc. 5 27
Ennis Business Forms 12 108
Exponent, Inc. 3 17(A)
FiberMark, Inc. 5 68(A)
Fleming Companies, Inc. 8 78
Franklin Covey Co. 16 121(A)
FTI Consulting, Inc. 3 14(A)
General Employment Enterprises, Inc. 2 7
Gradco Systems, Inc. 5 10(A)
GRC International, Inc. 3 29(A)
Healthcare Services Group, Inc. 6 50(A)
International Telecommunication Data Systems, Inc. 1 12(A)
Kennametal Inc. 15 391
Lawson Products, Inc. 6 125
Mail-Well, Inc. 17 232(A)
Mercury Air Group, Inc. 6 34(A)
Merrill Corporation 11 219
Nash-Finch Company 5 36
National Technical Systems, Inc. 6 20
Olsten Corporation 1 7
Perini Corporation 4 14(A)
Personal Group Of America, Inc. 20 124(A)
Physicians' Specialty Corp. 3 25(A)
PrimeSource Corporation 4 21
Prophet 21, Inc. 3 26(A)
Refac 3 11(A)
RemedyTemp, Inc. 7 95(A)
24
<PAGE>
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Commercial/Industrial Services -- Continued
Robertson-Ceco Corporation 4 $ 28(A)
Rush Enterprises, Inc. 2 23(A)
Schawk, Inc. 10 96
Service Experts, Inc. 10 100(A)
SOS Staffing Services, Inc. 10 55(A)
Staff Leasing, Inc. 11 107(A)
Stewart Enterprises, Inc. 36 218
Thomas Group, Inc. 2 13(A)
Veritas DGC Inc. 15 295(A)
Vestcom International, Inc. 7 17(A)
Westaff, Inc. 12 71(A)
Winston Resources, Inc. 2 10(A)
--------
4,710
--------
Computer Services and Systems -- 1.8%
ANSYS, Inc. 6 58(A)
Autologic Information International, Inc. 1 3(A)
Avant! Corporation 24 432(A)
Boundless Corporation 1 5(A)
CfI ProServices Inc. 4 37(A)
CHS Electronics, Inc. 42 60(A)
Cognitronics Corporation 4 42(A)
Cotelligent, Inc. 1 5(A)
Kentek Information Systems, Inc. 4 30
MAI Systems Corporation 4 4(A)
MSC.Software Corp. 9 62(A)
MTS Systems Corporation 10 101
NeoMagic Corporation 20 151(A)
ONTRACK Data International Inc. 7 41(A)
Paravant Inc. 1 3(A)
Programmer's Paradise, Inc. 2 12(A)
PSC Inc. 9 71(A)
Saga Systems, Inc. 19 270(A)
Scan-Optics, Inc. 5 15(A)
Software Spectrum, Inc. 1 9(A)
--------
1,411
--------
Construction and Building Materials -- 7.5%
American Homestar Corporation 14 53(A)
Ameron International Corporation 3 122
Aztec Manufacturing Co. 4 43
Baltek Corporation 1 4(A)
Beazer Homes USA, Inc. 5 87(A)
25
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Construction and Building Materials -- Continued
Building Materials Holding Corporation 9 $ 86(A)
Cavalier Homes, Inc. 14 67
Champion Enterprises, Inc. 27 242(A)
D.R. Horton, Inc. 21 267
Dayton Superior Corporation 4 61(A)
Del Webb Corporation 14 301(A)
Dominion Homes, Inc. 4 24(A)
Drew Industries Incorporated 9 78(A)
Engle Homes, Inc. 8 84
Fleetwood Enterprises, Inc. 22 436
Homebase, Inc. 23 91(A)
Hovnanian Enterprises, Inc. 16 124(A)
Hughes Supply, Inc. 16 357
International Aluminum Corporation 2 63
JLK Direct Distribution Inc. 7 49(A)
Lone Star Industries, Inc. 4 185
M/I Schottenstein Homes, Inc. 6 99
Mcgrath Rentcorp 8 135
Meadow Valley Corporation 1 4(A)
Miller Building Systems, Inc. 2 9(A)
NCI Building Systems, Inc. 10 169(A)
Oakwood Homes Corporation 32 144
Palm Harbor Homes, Inc. 8 104(A)
Patrick Industries, Inc. 4 44
Pulte Corporation 36 774
Republic Group Incorporated 7 103
Skyline Corporation 7 175
Southern Energy Homes, Inc. 9 23(A)
Standard Pacific Corp. 22 228
The Fortress Group, Inc. 8 12(A)
The Ryland Group, Inc. 11 255
Toll Brothers, Inc. 20 385(A)
U.S. Home Corporation 9 259(A)
Washington Homes, Inc. 4 23(A)
--------
5,769
--------
Consumer Durables -- 2.8%
Boston Acoustics, Inc. 4 57
Catalina Lighting, Inc. 3 12(A)
Central Garden & Pet Company 21 161(A)
Chromcraft Revington, Inc. 8 100(A)
Cobra Electronics Corporation 3 11(A)
26
<PAGE>
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Consumer Durables -- Continued
Concord Camera Corp. 7 $ 60(A)
Congoleum Corporation 6 28(A)
Conso International Corporation 5 26(A)
Fedders Corporation 20 121
Flexsteel Industries, Inc. 4 55
Harman International Industries, Incorporated 7 294
Home Products International, Inc. 6 58(A)
Koss Corporation 2 24(A)
LADD Furniture, Inc. 3 64(A)
Libbey Inc. 12 355
Lifetime Hoan Corporation 7 51
Mikasa, Inc. 8 89
O'Sullivan Industry Holdings, Inc. 3 44(A)
Pulaski Furniture Corporation 2 27
Royal Appliance Mfg. Co. 1 7(A)
Russ Berrie and Company, Inc. 14 293
The L. S. Starrett Company 4 104
The Rowe Companies 9 85
The York Group, Inc. 6 24
--------
2,150
--------
Consumer Non-Durables -- 0.6%
CCA Industries, Inc. 3 6(A)
Educational Development Corporation 3 12
French Fragrances, Inc. 10 70(A)
Inter Parfums, Inc. 3 25(A)
Nature's Sunshine Products, Inc. 13 127
Ocular Sciences, Inc. 5 99(A)
Rural/Metro Corporation 11 72(A)
Seattle FilmWorks, Inc. 11 43(A)
Styling Technology Corporation 2 24(A)
The Stephan Co. 3 10
--------
488
--------
Electrical Equipment and Electronics -- 4.2%
Acme Electric Corporation 3 17(A)
Aerovox Incorporated 1 3(A)
Align-Rite International, Inc. 4 77(A)
Amistar Corporation 1 2(A)
Axsys Technologies, Inc. 2 24(A)
Cable Design Technologies Corporation 21 481(A)
Caere Corporation 7 52(A)
Comptek Research, Inc. 2 13(A)
27
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Electrical Equipment and Electronics -- Continued
CompuCom Systems, Inc. 24 $ 90(A)
Detection Systems, Inc. 3 31(A)
Diodes Incorporated 3 19(A)
Encore Wire Corporation 12 105(A)
General Semiconductor, Inc. 25 259(A)
Graham Corporation 1 7(A)
InaCom Corp. 29 265(A)
LaBarge, Inc. 6 8(A)
MagneTek, Inc. 33 298(A)
Marshall Industries 3 91(A)
Microsemi Corporation 4 32(A)
Nu Horizons Electronics Corp. 7 53(A)
Percon Incorporated 3 28(A)
Pioneer-Standard Electronics, Inc. 18 260
Powell Industries, Inc. 8 69(A)
Recoton Corporation 9 59(A)
Reliability Incorporated 4 14(A)
RF Monolithics, Inc. 3 29(A)
Richardson Electronics, Ltd. 8 70
Savoir Technology Group, Inc. 5 45(A)
Sparton Corporation 1 8(A)
The Cherry Corporation 5 61(A)
The Lamson & Sessions Co. 8 39(A)
Triumph Group, Inc. 9 236(A)
UCAR International, Inc. 14 310(A)
Video Display Corporation 1 6(A)
Woodhead Industries, Inc. 2 22
--------
3,183
--------
Entertainment and Leisure -- 3.3%
Anchor Gaming 8 488(A)
Arctic Cat, Inc. 20 195
Black Hawk Gaming & Development Company, Inc. 1 5(A)
Boyd Gaming Corporation 45 268(A)
Cannondale Corporation 6 52(A)
Equity Marketing, Inc. 3 43(A)
GTECH Holdings Corporation 20 422(A)
Holiday RV Superstores, Incorporated 1 3(A)
Inland Entertainment Corporation 3 9(A)
K2 Inc. 12 109
Lady Luck Gaming Corporation 3 24(A)
28
<PAGE>
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Entertainment and Leisure -- Continued
Lakes Gaming, Inc. 8 $ 74(A)
Lodgian, Inc. 16 58(A)
PlayCore, Inc. 3 25(A)
Prime Hospitality Corp. 41 331(A)
Scientific Games Holdings Corp. 8 162(A)
Suburban Lodges of America, Inc. 12 66(A)
Travis Boats & Motors, Inc. 1 14(A)
Winnebago Industries, Inc. 7 177
--------
2,525
--------
Financial Services -- 6.9%
Advanta Corp. 18 259
Alliance Bancorp of New England, Inc. 1 10
Amplicon, Inc. 6 75
AMRESCO, INC. 37 110(A)
Arcadia Financial Ltd. 28 122(A)
BankAtlantic Bancorp, Inc. 26 146
BSB Bancorp, Inc. 7 163
Community Bank System, Inc. 2 55
Consumer Portfolio Services 10 9(A)
Corrus Bankshares, Inc. 11 279
CPB Inc. 2 55
Credit Acceptance Corporation 10 62(A)
Delta Financial Corporation 11 53(A)
Downey Financial Corp. 12 233
DVI, Inc. 3 51(A)
Enhance Financial Services Group, Inc. 29 504
Fidelity National Financial, Inc. 23 352
First Alliance Corporation 14 30(A)
First Citizens Bancshares Inc. 6 453
First Republic Bank 3 82(A)
FirstCity Financial Corporation 5 8(A)
FirstFed Financial Corp. 14 250(A)
GBC Bancorp 2 39
Hambrecht & Quist Group 6 299(A)
Hamilton Bancorp Inc. 8 159(A)
Hawthorne Financial Corporation 1 13(A)
Interpool, Inc. 15 116
Jefferies Group, Inc. 6 129
JWGenesis Financial Corp. 2 32(A)
Litchfield Financial Corporation 2 53
29
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Financial Services -- Continued
Merchants Bancshares, Inc. 3 $ 67
MetroWest Bank 4 28
MidAmerica Bancorp 2 48
National City Bancorporation 7 116
Pacific Crest Capital, Inc. 2 25
Parkvale Financial Corporation 5 89
Radian Group, Inc. 5 224
Resource Bancshares Mortgage Group, Inc. 17 85
Sterling Financial Corporation 6 82(A)
Stifel Financial Corp. 2 19
Sunrise International Leasing Corporation 5 27(A)
TFC Enterprises, Inc. 10 26(A)
Union Acceptance Corporation 1 7(A)
USBANCORP, Inc. 10 135
World Acceptance Corporation 14 76(A)
--------
5,255
--------
Food, Beverage and Tobacco -- 2.9%
Cagle's, Inc. 4 59
Cal-Maine Foods, Inc. 5 17
Eagle Food Centers, Inc. 6 12(A)
Fresh America Corporation 3 16(A)
General Cigar Holdings, Inc. 14 93(A)
Herbalife International, Inc. 21 326
M&F Worldwide Corp. 13 104(A)
Marsh Supermarkets, Inc. 3 54
Michael Foods, Inc. 11 300
Natural Alternatives International, Inc. 4 17(A)
Pilgrim's Pride Corporation 8 69
Pilgrim's Pride Corporation - Class A 4 20
R.H. Phillips, Inc. 4 11(A)
Rocky Mountain Chocolate Factory, Inc. 2 11(A)
Sanderson Farms, Inc. 8 77
Schweitzer-Mauduit International, Inc. 12 154
Standard Commercial Corporation 7 28
SUPERVALU INC. N.M. 6
Suprema Specialties, Inc. 1 10(A)
Sylvan, Inc. 3 29(A)
Todhunter International, Inc. 2 18(A)
Universal Corporation 25 645
Weider Nutrition International, Inc. 15 48
WLR Foods, Inc. 12 85(A)
--------
2,209
--------
30
<PAGE>
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Gas/Pipeline -- 3.9%
Adams Resources & Energy 3 $ 24
EnergySouth, Inc. 3 57
Friede Goldman International Inc. 13 132(A)
Frontier Oil Corporation 19 131(A)
Gulf Islands Fabrication, Inc. 8 111(A)
Lufkin Industries, Inc. 5 73
Mitcham Industries, Inc. 7 33(A)
Penn Virginia Corporation 6 131
Petroleum Development Corporation 5 23(A)
Pool Energy Services Co. 11 258(A)
Pride International, Inc. 36 514(A)
SEACOR Smit Inc. 10 492(A)
Seitel, Inc. 8 81(A)
Trico Marine Services, Inc. 15 122(A)
Tuboscope Inc. 12 152(A)
Varco International, Inc. 44 537(A)
World Fuel Services Corporation 9 83
--------
2,954
--------
Health Care -- 3.1%
ADAC Laboratories 3 29(A)
Advocat, Inc. 4 4(A)
Alterra Healthcare Corporation 7 63(A)
American Dental Technologies, Inc. 5 12(A)
American Physicians Service Group, Inc. 2 8(A)
AmeriPath, Inc. 16 132(A)
Beverly Enterprises, Inc. 77 327(A)
BioSource International, Inc. 1 3(A)
Capital Senior Living Corporation 6 45(A)
Carematrix Corporation 10 52(A)
Castle Dental Centers, Inc. 5 14(A)
Coast Dental Services, Inc. 6 19(A)
Curative Health Services, Inc. 2 9(A)
Genesis Health Ventures, Inc. 24 57(A)
Hawaii Tech Pharmacal Company Incorporated 2 10(A)
Healthcare Recoveries, Inc. 7 19(A)
Horizon Health Corporation 4 24(A)
Integrated Health Services, Inc. 35 55(A)
Medstone International, Inc. 4 25(A)
Mesa Laboratories, Inc. 2 7(A)
MIM Corporation 13 28(A)
Monarch Dental Corporation 7 15(A)
31
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Health Care -- Continued
Moore Medical Corporation 2 $ 17(A)
Omnicare, Inc. 29 282
OrthAlliance, Inc. 5 36(A)
Pediatrix Medical Group, Inc. 9 129(A)
ProMedCo Management Company 16 52(A)
Quorum Health Group, Inc. 24 165(A)
Radiologix, Inc. 15 119(A)
Raytel Medical Corporation 6 16(A)
RehabCare Group, Inc. 4 78(A)
Response Oncology, Inc. 9 8(A)
Serologicals Corporation 15 63(A)
Sierra Health Services, Inc. 20 205(A)
Specialty Care Network, Inc. 6 21(A)
Unilab Corporation 28 158(A)
USANA, Inc. 2 14(A)
Utah Medical Products, Inc. 3 22(A)
--------
2,342
--------
Industrial -- 5.4%
ACX Technologies, Inc. 20 188(A)
AGCO Corporation 30 390
Alamo Group Inc. 4 36
American Biltrite, Inc. 3 41
Ampco-Pittsburgh Corporation 7 89
Bairnco Corporation 6 39
Baldwin Technology Company, Inc. 13 32(A)
Cascade Corporation 9 91
Channell Commercial Corporation 5 50(A)
Chart Industries, Inc. 3 14
Commercial Intertech Corp. 11 130
CPAC, Inc. 4 22
Detroit Diesel Corporation 9 174
DT Industries, Inc. 7 46
Farrel Corporation 3 5
Flowserve Corporation 16 273
Gehl Company 4 62(A)
Gentek, Inc. 15 173
Gleason Corporation 6 101
Hardinge, Inc. 7 118
Hirsch International Corp. 3 4(A)
Holly Corporation 6 93
Industrial Holdings, Inc. 5 17(A)
32
<PAGE>
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Industrial -- Continued
ITEQ, Inc. 19 $ 40(A)
Lincoln Electric Holdings, Inc. 4 75
Lindsay Manufacturing Co. 3 49
Lydall, Inc. 4 44(A)
Milacron Inc. 28 493
O.I. Corporation 2 9(A)
Printware, Inc. 2 5(A)
Regal-Beloit Corporation 13 274
Specialty Equipment Companies, Inc. 8 207(A)
Summa Industries 3 37(A)
Supreme Industries, Inc. 8 59(A)
TB Wood's Corporation 4 39
Tech/Ops Sevcon, Inc. 2 23
The Carbide/Graphite Group, Inc. 6 49(A)
Watts Industries, Inc. 20 424
Woodward Governor Company 4 105
--------
4,120
--------
Insurance -- 8.0%
Acceptance Insurance Companies Inc. 11 136(A)
AmerUs Life Holdings, Inc. 22 466
Amwest Insurance 3 31
Atlantic American Corporation 1 4(A)
Bancinsurance Corporation 2 13(A)
Capital Re Corporation 23 228
Chartwell Re Corporation 7 104
Delphi Financial Group, Inc. 10 302(A)
Donegal Group Inc. 6 43
EMC Insurance Group, Inc. 5 45
Foremost Corporation of America 20 480
Fremont General Corporation 23 214
Frontier Insurance Group, Inc. 27 237
Harleysville Group Inc. 22 308
Kaye Group Inc. 4 38
LandAmerica Financial Group, Inc. 9 182
Life USA Holding, Inc. 14 281
Merchants Group, Inc. 1 23
MMI Companies, Inc. 12 131
Mobile America Corporation 5 13
National Western Life Insurance Company 3 220(A)
Nymagic, Inc. 3 43
Orion Capital Corporation 3 142
33
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Insurance -- Continued
Penn Treaty American Corporation 6 $ 119(A)
Penn-America Group, Inc. 6 52
Presidential Life Corporation 1 12
Professionals Group, Inc. 4 100(A)
PXRE Corporation 9 133
Reliance Group Holdings, Inc. 64 283
SCPIE Holdings Inc. 4 132
Selective Insurance Group, Inc. 21 398
Standard Management Corporation 5 29(A)
Stewart Information Services Corporation 11 194
The Centris Group, Inc. 8 78
The Commerce Group, Inc. 26 600
The Midland Company 3 71
The Navigators Group, Inc. 6 82(A)
Trenwick Group Inc. 6 106
Unico American Corporation 4 35
--------
6,108
--------
Metals -- 6.3%
Alltrista Corporation 6 152(A)
Amcast Industrial Corporation 7 92
Armco Inc. 78 546(A)
Atchison Casting Corporation 5 50(A)
Bayou Steel Corporation 9 31(A)
Carpenter Technology Corporation 21 524
Chase Industries, Inc. 11 94(A)
Citation Corporation 11 192(A)
Cleveland-Cliffs Inc. 8 261
Commercial Metals Company 11 316
Fansteel Inc. 5 19
Friedman Industries, Incorporated 5 15(A)
Intermet Corporation 19 158
Lindberg Corporation 4 33
Metals USA, Inc. 28 285(A)
National Steel Corporation 23 157
Niagara Corporation 5 24(A)
Northwest Pipe Company 4 69(A)
Oglebay Norton Company 1 27
Quanex Corporation 10 264
Roanoke Electric Steel Corporation 3 58
ROHN Industries, Inc. 34 69(A)
RTI International Metals, Inc. 15 148(A)
Shiloh Industries, Inc. 4 42(A)
34
<PAGE>
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Metals -- Continued
Special Metals Corporation 11 $ 48(A)
Steel Technologies Inc. 8 88
Texas Industries, Inc. 15 536
The Shaw Group Inc. 8 177(A)
Titanium Metals Corporation 17 150
Universal Stainless & Alloy Products, Inc. 4 22(A)
Webco Industries, Inc. 4 13(A)
Wolverine Tube, Inc. 10 158(A)
Zemex Corporation 3 19(A)
--------
4,837
--------
Miscellaneous Manufacturing -- 5.5%
A.O. Smith Corporation 9 269
Apogee Enterprises, Inc. 6 43
Bacou USA, Inc. 8 139(A)
Badger Paper Mills, Inc. 2 10(A)
Brown & Sharpe Manufacturing Company 10 24(A)
Coachmen Industries Inc. 5 83
Columbus McKinnon Corporation 8 138
Core Materials Corporation 2 3(A)
Cybex International, Inc. N.M. 1(A)
Decora Industries, Inc. 3 17(A)
Denali Incorporated 3 13(A)
Global Payment Technologies, Inc. 6 50(A)
Griffon Corporation 23 182(A)
Hexcel Corporation 23 135(A)
Jason Incorporated 11 83(A)
MascoTech, Inc. 34 547
Met-Pro Corporation 2 23
Metrika Systems Corporation 4 23(A)
MFRI, Inc. 1 6(A)
NACCO Industries, Inc. 6 426
NCH Corporation 2 108
OroAmerica, Inc. 4 27(A)
Park-Ohio Holdings Corp. 7 83(A)
Penn Engineering & Manufacturing Corp. 4 103
Penn Engineering & Manufacturing Corp. - Class A 4 97
Precision Castparts Corp. 9 284
Printronix, Inc. 4 75(A)
Q.E.P. Co., Inc. 2 15(A)
Raven Industries, Inc. 4 56
Riviera Tool Company 1 6(A)
Robbins & Myers, Inc. 1 8
35
<PAGE>
Statement of Net Assets -- Continued
LEGG MASON INVESTORS TRUST, INC.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Miscellaneous Manufacturing -- Continued
RPC, Inc. 4 $ 29
SPS Technologies, Inc. 6 216(A)
Standex International Corporation 8 221
The Dexter Corporation 13 466
The Eastern Company 1 22
The JPM Company 2 10(A)
TransTechnology Corporation 4 45
U.S. Office Products Company 11 40(A)
Vallen Corporation 1 19(A)
Westinghouse Air Brake Company 3 49
Williams Controls, Inc. 5 11(A)
--------
4,205
--------
Process Industries -- 1.5%
Buckeye Technologies Inc. 27 416(A)
P.H. Glatfelter Company 7 109
Rock-Tenn Company 22 316
Silgan Holdings Inc. 13 260(A)
The Anderson's Inc. 6 53
--------
1,154
--------
Real Estate -- 0.3%
AMREP Corporation 5 27(A)
Bluegreen Corporation 17 83(A)
DeWolfe Companies, Inc. 2 15
Grubb & Ellis Company 14 78(A)
--------
203
--------
Restaurants -- 1.7%
Ark Restaurants Corp. 3 26(A)
Blimpie International, Inc. 6 12
CKE Restaurants, Inc. 39 279
Cooker Restaurant Corporation 6 25
ELXSI Corporation 3 25(A)
Landry's Seafood Restaurants, Inc. 22 175(A)
Lone Star Steakhouse & Saloon, Inc. 24 184(A)
Luby's, Inc. 12 143
Main Street & Main Inc. 8 26(A)
Max & Erma's Restaurants, Inc. 2 11(A)
Piccadilly Cafeterias, Inc. 4 28
Rainforest Cafe, Inc. 19 98(A)
Ryan's Family Steak Houses, Inc. 29 260(A)
Sizzler International, Inc. 16 34(A)
--------
1,326
--------
36
<PAGE>
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Retail -- 3.7%
7 Eleven Incorporated 68 $ 134(A)
Barnett Inc. 12 112(A)
Boise Cascade Office Products Corporation 30 326(A)
Cole National Corporation 11 85(A)
Duckwall-ALCO Stores, Inc. 4 29(A)
EZCORP, Inc. 7 38
Finlay Enterprises, Inc. 7 98(A)
Friedman's, Inc. 13 110
Funco, Inc. 3 62(A)
Garden Ridge Corporation 13 97(A)
Government Technology Services Inc. 2 7(A)
Jan Bell Marketing, Inc. 11 34(A)
Jos. A. Bank Clothiers, Inc. 4 15(A)
Media Arts Group, Inc. 8 35(A)
Michael Anthony Jewelers, Inc. 2 5(A)
Micro Warehouse, Inc. 20 239(A)
Movie Star, Inc. 9 11(A)
Musicland Stores Corporation 12 101(A)
OfficeMax, Inc. 31 181(A)
Pier 1 Imports, Inc. 31 210
Piercing Pagoda, Inc. 3 42(A)
RDO Equipment Co. 7 44(A)
REX Stores Corporation 5 143(A)
Specialty Catalog Corp. 1 4(A)
Sport Supply Group, Inc. 2 12(A)
Systemax, Inc. 20 166(A)
The Bon-Ton Stores, Inc. 12 46(A)
Value City Department Stores, Inc. 20 294(A)
Wilmar Industries, Inc. 10 127(A)
Wolohan Lumber Co. 3 42
--------
2,849
--------
Technology -- 0.4%
Del Global Technologies Corp. 4 30(A)
Equinox Systems, Inc. 2 24(A)
Excel Technology, Inc. 5 70(A)
Hurco Companies, Inc. 4 15(A)
K-Tron International, Inc. 2 31(A)
Splash Technology Holdings, Inc. 11 64(A)
ThermoQuest Corporation 7 67(A)
Vivid Technologies, Inc. 2 7(A)
--------
308
--------
37
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Telecommunications -- 0.9%
Applied Signal Technology, Inc. 6 $ 57
Blonder Tongue Laboratories, Inc. 6 44(A)
CellStar Corporation 51 383(A)
Comdial Corporation 5 36(A)
Communications Systems, Inc. 3 37
Hector Communications Corporation 1 16(A)
Hickory Tech Corporation 4 50
InterDigital Communications Corporation 2 13(A)
Tollgrade Communications, Inc. 2 57(A)
Vertex Communications Corporation 4 39(A)
--------
732
--------
Textiles -- 1.5%
Burlington Industries, Inc. 45 199(A)
Decorator Industries, Inc. 2 12
Galey & Lord, Inc. 9 23(A)
Guilford Mills, Inc. 17 146
Interface, Inc. 40 203
Lakeland Industries, Inc. 1 4(A)
Pillowtex Corporation 11 79
Quaker Fabric Corporation 2 8(A)
Synthetic Industries, Inc. 5 129(A)
The Dixie Group, Inc. 9 70(A)
Unifi, Inc. 10 104(A)
UniFirst Corporation 12 170
--------
1,147
--------
Transportation -- 6.1%
Amerco 10 288(A)
America West Holdings Corporation 31 533(A)
Amtran, Inc. 2 32(A)
Arkansas Best Corporation 14 176(A)
Arnold Industries, Inc. 19 235
Boyd Bros. Transportation Inc. 2 18(A)
Circle International Group, Inc. 7 133
Consolidated Delivery & Logistics, Inc. 5 15(A)
Consolidated Freightways Corporation 17 168(A)
Covenant Transport, Inc. 11 171(A)
Dynamex Inc. 2 4(A)
Frozen Food Express Industries, Inc. 9 56
Genesee & Wyoming Inc. 3 33(A)
Hawaiian Airlines, Inc. 23 53(A)
J.B. Hunt Transport Services, Inc. 27 368
Kitty Hawk, Inc. 12 124(A)
38
<PAGE>
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Transportation -- Continued
Landstar System, Inc. 3 $ 104(A)
Offshore Logistics, Inc. 16 163(A)
Old Dominion Freight Line, Inc. 5 77(A)
P.A.M. Transportation Services, Inc. 6 65(A)
Pittison BAX Group 14 116
Providence and Worcester Railroad Company 3 28
RailTex, Inc. 7 115(A)
Roadway Express, Inc. 15 301
Smithway Motor Xpress Corp. 3 20(A)
The Greenbrier Companies, Inc. 11 118
Tower Air, Inc. 9 17(A)
Transport Corporation of America, Inc. 5 62(A)
U.S. Xpress Enterprises, Inc. 11 64(A)
USA Truck, Inc. 5 42(A)
USFreightways Corporation 14 640
Yellow Corporation 19 306(A)
--------
4,645
--------
Utilities -- 2.1%
Bangor Hydro-Electric Company 5 74
CMP Group, Inc. 3 90
El Paso Electric Company 37 328(A)
Maine Public Service Company 1 22
Public Service Company of New Mexico 30 544
RGS Energy Group, Inc. 12 289
TNP Enterprises, Inc. 7 257
--------
1,604
--------
Total Common Stocks and Equity Interests
(Identified Cost-- $85,142) 74,773
- -------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 2.4%
Bank of America
5.48%, dated 9/30/99, to be repurchased at $900 on 10/1/99
(Collateral: $1,017 Freddie Mac mortgage-backed securities,
6%, due 5/1/29, value $953) $900 900
Goldman, Sachs & Company
5.40%, dated 9/30/99, to be repurchased at $900 on 10/1/99
(Collateral: Fannie Mae mortgage-backed securities,
6.50%, due 5/1/29, value $936) 900 900
--------
Total Repurchase Agreements (Identified Cost-- $1,800) 1,800
- -------------------------------------------------------------------------------------------------------------------------
39
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
- ----------------------------------------------------------------------------------------------------------------------
Total Investments-- 100.0% (Identified Cost-- $86,942) $76,573
Other Assets Less Liabilities-- N.M. 2
--------
NET ASSETS CONSISTING OF:
Accumulated paid-in capital applicable to:
9,230 Primary shares outstanding $85,023
7 Navigator shares outstanding 70
Accumulated net investment income/(loss) (225)
Accumulated net realized gain/(loss) on investments 2,076
Unrealized appreciation/(depreciation) of investments (10,369)
--------
NET ASSETS-- 100.0% $76,575
--------
NET ASSET VALUE PER SHARE:
PRIMARY CLASS $8.29
--------
NAVIGATOR CLASS $8.40
--------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Non-income producing.
(N.M.) - Not meaningful.
See notes to financial statements.
40
<PAGE>
<TABLE>
<CAPTION>
Statements of Operations
LEGG MASON INVESTORS TRUST, INC.
(Amounts in Thousands) (Unaudited)
Six Months Ended 9/30/99
--------------------------------------------------------
U.S.
American Leading Balanced Small-Capitalizations
Companies Trust Trust Value Trust
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Dividends(A) $ 1,839 $ 332 $ 421
Interest 466 618 115
----------- --------- --------
Total income 2,305 950 536
----------- --------- --------
Expenses:
Management fee 1,213 200 326
Distribution and service fees 1,617 200 383
Transfer agent and shareholder servicing expense 103 19 36
Audit and legal fees 33 18 16
Custodian fee 47 28 89
Directors' fees 2 3 2
Organization expense -- 8 5
Registration fees 33 15 16
Reports to shareholders 31 6 13
Other expenses 3 5 --
----------- --------- --------
3,082 502 886
Less fees waived -- (8) (125)
----------- --------- --------
Total expenses, net of waivers 3,082 494 761
----------- --------- --------
Net Investment Income (Loss) (777) 456 (225)
----------- --------- --------
Net Realized and Unrealized Gain (Loss) on Investments:
Realized gain (loss) on investments 2,950 337 2,110
Change in unrealized appreciation (depreciation) of investments (43,604) (1,935) 1,539
----------- --------- --------
Net Realized and Unrealized Gain (Loss) on Investments (40,654) (1,598) 3,649
- -------------------------------------------------------------------------------------------------------------------------------
Change in Net Assets Resulting From Operations $ (41,431) $(1,142) $3,424
- -------------------------------------------------------------------------------------------------------------------------------
(A) Net of foreign taxes withheld of $0, $1 and $0, respectively.
See notes to financial statements.
</TABLE>
41
<PAGE>
Statements of Changes in Net Assets
Legg Mason Investors Trust, Inc.
(Amounts in Thousands)
<TABLE>
<CAPTION>
U.S. Small-
American Leading Balanced Capitalization
Companies Trust Trust Value Trust
---------------------- ---------------------- -----------------------
Six Months Year Six Months Year Six Months 6/15/98(A)
Ended Ended Ended Ended Ended to
9/30/99 3/31/99 9/30/99 3/31/99 9/30/99 3/31/99
- ---------------------------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Change in Net Assets:
Net investment income/(loss) $ (777) $ (818) $ 456 $ 1,097 $ (225) $ (171)
Net realized gain/(loss) on investments 2,950 8,963 337 (841) 2,110 1,138
Change in unrealized appreciation/
(depreciation) of investments (43,604) 37,543 (1,935) (1,810) 1,539 (11,908)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets resulting from operations (41,431) 45,688 (1,142) (1,554) 3,424 (10,941)
Distributions to shareholders:
From net investment income:
Primary Class -- -- (615) (902) -- --
Navigator Class -- -- NA NA -- --
From net realized gain on investments:
Primary Class (5,587) (8,688) -- (490) (1,000) --
Navigator Class -- -- NA NA (1) --
Change in net assets from Fund share transactions:
Primary Class 66,866 51,631 (7,573) 11,085 15,727 69,295
Navigator Class -- (82) NA NA 20 50
- ---------------------------------------------------------------------------------------------------------------------------------
Change in net assets 19,848 88,549 (9,330) 8,139 18,170 58,404
Net Assets:
Beginning of period 288,957 200,408 55,900 47,761 58,405 1
- ---------------------------------------------------------------------------------------------------------------------------------
End of period $308,805 $288,957 $46,570 $55,900 $76,575 $58,405
Undistributed net investment income (loss) $ (777) $ -- $ 231 $ 390 $ (225) $--
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Commencement of operations.
(NA)--Not applicable.
See notes to financial statements.
42
<PAGE>
Financial Highlights
Legg Mason Investors Trust, Inc.
Contained below is per share operating performance data for a Primary
Class share of common stock outstanding, total investment return, ratios to
average net assets and other supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
Investment Operations Distributions
---------------------------------------------------- -----------------------------------------
From
Net Asset Net Net Realized Total From Net
Value, Investment and Unrealized From Net Realized
Beginning Income Gain (Loss) on Investment Investment Gain on Total
of Period (Loss) Investments Operations Income Investments Distributions
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
American Leading Companies
Trust
Six Months Ended
Sept. 30, 1999* $20.38 $(.04) $(2.30) $(2.34) $-- $ (.36) $ (.36)
Years Ended Mar. 31,
1999 17.78 (.06) 3.38 3.32 -- (.72) (.72)
1998 14.74 (.04)(A) 4.93 4.89 -- (1.85) (1.85)
1997 12.23 .01(A) 3.00 3.01 (.02) (.48) (.50)
1996 10.18 .07(A) 2.08 2.15 (.10) -- (.10)
1995 9.69 .12(A) .48 .60 (.11) -- (.11)
Balanced Trust
Six Months Ended
Sept. 30, 1999* $11.98 $ .11(B) $ (.43) $ (.32) $(.14) $-- $ (.14)
Years Ended Mar. 31,
1999 12.62 .22(B) (.56) (.34) (0.19) (.11) (.30)
1998 10.16 .21(B) 2.58 2.79 (.21) (.12) (.33)
1997D 10.00 .09(B) .11 .20 (.04) -- (.04)
U.S. Small-Capitalization Value Trust
Six Months Ended
Sept. 30, 1999* $ 7.81 $(.02)(C) $ .62 $ .60 $-- $ (.12) $ (.12)
Period Ended Mar. 31,
1999E 10.00 (.02)(C) (2.17) (2.19) -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
--------------------------------------------------------------------
Net
Net Asset Investment Net Assets,
Value, Expenses Income (Loss) Portfolio End of
End of Total to Average to Average Turnover Period
Period Return Net Assets Net Assets Rate (in thousands)
- ------------------------------------------------------------------------------------------------------------------
American Leading Companies
Trust
Six Months Ended
Sept. 30, 1999* $17.68 (11.70)%(F) 1.91%(G) (.48)%(G) 21.94%(G) $308,805
Years Ended Mar. 31,
1999 20.38 19.52% 1.93% (.37)% 47.6% 288,957
1998 17.78 35.18% 1.95%(A) (.28)%(A) 51.4% 200,326
1997 14.74 24.73% 1.95%(A) .05%(A) 55.7% 104,812
1996 12.23 21.24% 1.95%(A) .69%(A) 43.4% 76,100
1995 10.18 6.24% 1.95%(A) 1.21%(A) 30.5% 59,985
Balanced Trust
Six Months Ended
Sept. 30, 1999* $11.52 (2.71)%(F) 1.85%(B,G) 1.71%(B,G) 48.7%(G) $ 46,570
Years Ended Mar. 31,
1999 11.98 (2.69)% 1.85%(B) 1.96%(B) 50.0% 55,900
1998 12.62 27.80% 1.85%(B) 2.08%(B) 34.5% 47,761
1997D 10.16 2.02%(F) 1.85%(B,G) 2.52%(B,G) 5.1%(G) 17,948
U.S. Small-Capitalization Value Trust
Six Months Ended
Sept. 30, 1999* $ 8.29 7.49%(F) 2.00%(C,G) (.59)%(C,G) 51.4%(G) $ 76,515
Period Ended Mar. 31,
1999E 7.81 (21.90)%(F) 2.00%(C,G) (.44)%(C,G) 29.5%(G) 58,365
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(A)Net of fees waived pursuant to a voluntary expense limitation of 1.95% of
average daily net assets. If no fees had been waived by LMFA, the
annualized ratio of expenses to average daily net assets would have been
as follows: for the years ended March 31, 1998, 1.99%; 1997, 2.06%; 1996,
2.20%; and 1995, 2.12%.
(B)Net of fees waived pursuant to a voluntary expense limitation of 1.85% of
average daily net assets. If no fees had been waived by LMFA, the
annualized ratio of expenses to average daily net assets would have been
as follows: for the six months ended September 30, 1999, 1.88%; for the
years ended March 31, 1999, 1.90%; 1998, 2.14%; and for the period from
October 1, 1996 (commencement of operations) to March 31, 1997, 3.03%.
(C)Net of fees waived pursuant to a voluntary expense limitation of 2.00% of
average daily net assets. If no fees had been waived by LMFA, the
annualized ratio of expenses to average daily net assets would have been
as follows: for the six months ended September 30, 1999, 2.31%; and for
the period from June 15, 1998 (commencement of operations) to March 31,
1999, 2.38%.
(D)For the period October 1, 1996 (commencement of operations) to March 31,
1997.
(E)For the period June 15,1998 (commencement of operations) to March 31,
1999. F Not annualized.
(G)Annualized.
(*)Unaudited.
See notes to financial statements.
43
<PAGE>
Notes to Financial Statements
LEGG MASON INVESTORS TRUST, INC.
(Amounts in Thousands) (Unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies:
The Legg Mason Investors Trust, Inc. ("Corporation"), consisting of
the American Leading Companies Trust ("American Leading Companies"), the
Balanced Trust ("Balanced Trust") and the U.S. Small-Capitalization Value
Trust ("U.S. Small-Cap") (each a "Fund"), is registered under the
Investment Company Act of 1940, as amended, as an open-end, diversified
investment company.
Each Fund consists of two classes of shares:Primary Class, offered
since September 1, 1993, for American Leading Companies Trust; since
October 1, 1996, for Balanced Trust; and since June 15, 1998, for U.S.
Small-Cap; and Navigator Class, offered to certain institutional
investors since October 4, 1996, for American Leading Companies Trust;
and since June 19, 1998, for U.S. Small-Cap. The Navigator Class shares
of American Leading Companies were redeemed on December 3, 1998. The
Navigator Class of Balanced Trust has not commenced operations.
Information about the Navigator Class is contained in a separate report
to its shareholders. The income and expenses of each of these Funds are
allocated proportionately to the two classes of shares based on daily net
assets, except for Rule 12b-1 distribution fees, which are charged only
on Primary Class shares, and transfer agent and shareholder servicing
expenses, which are determined separately for each class.
Security Valuation
Securities traded on national securities exchanges are valued at the
last quoted sales price. Over-the-counter securities and listed
securities for which no sales price is available are valued at the mean
between the latest bid and asked prices. Securities for which market
quotations are not readily available are valued at fair value as
determined by management and approved in good faith by the Board of
Directors. Fixed income securities with 60 days or less remaining to
maturity are valued using the amortized cost method, which approximates
current market value.
Investment Income and Distributions to Shareholders
Interest income and expenses are recorded on the accrual basis. Bond
premiums are amortized for financial reporting and federal income tax
purposes. Bond discounts, other than original issue and zero-coupon
bonds, are not amortized for financial reporting and federal income tax
purposes. Dividend income and distributions to shareholders are allocated
at the class level and are recorded on the ex-dividend date. Dividends
from net investment income, if available, will be paid annually for
American Leading Companies and U.S. Small-Cap, and quarterly for Balanced
Trust. Net capital gain distributions, which are calculated at the Fund
level, are declared and paid after the end of the tax year in which the
gain is realized. Distributions are determined in accordance with federal
income tax regulations, which may differ from those determined in
accordance with generally accepted accounting principles; accordingly,
periodic reclassifications are made within a Fund's capital accounts to
reflect income and gains available for distribution under federal income
tax regulations.
Security Transactions
Security transactions are recorded on the trade date. Realized gains
and losses from security transactions are reported on an identified cost
basis for both financial reporting and federal income tax purposes.
44
<PAGE>
At September 30, 1999, receivables for securities sold and payables for
securities purchased for each Fund were as follows:
<TABLE>
<CAPTION>
Receivable for Payable for
Securities Sold Securities Purchased
- -------------------------------------------------------------------------------------------
<S> <C> <C>
American Leading Companies $-- $1,982
Balanced Trust -- --
U.S. Small-Cap -- --
</TABLE>
Deferred Organizational Expenses
Deferred organizational expenses of $86 for Balanced Trust and $45
for U.S. Small-Cap are being amortized on a straight line basis over 5
years commencing on the date their respective operations began.
Federal Income Taxes
No provision for federal income or excise taxes is required since
each Fund intends to continue to qualify as a regulated investment
company and distribute substantially all of its taxable income to its
shareholders.
Use of Estimates
Preparation of the financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
2. Investment Transactions:
For the six months ended September 30, 1999, investment transactions
(excluding short-term investments) were as follows:
PURCHASES PROCEEDS FROM SALES
------------------------------------------------------------------------
American Leading Companies $96,046 $32,765
Balanced Trust 12,651 20,487
U.S. Small-Cap 34,147 18,393
At September 30, 1999, cost, gross unrealized appreciation and gross
unrealized depreciation based on the cost of securities for federal
income tax purposes for each Fund were as follows:
<TABLE>
<CAPTION>
Net
Appreciation/
Cost Appreciation Depreciation (Depreciation)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Leading Companies $266,033 $78,281 $(33,663) $ 44,618
Balanced Trust 44,909 3,605 (2,087) 1,518
U.S. Small-Cap 86,942 6,134 (16,503) (10,369)
</TABLE>
Balanced Trust had capital loss carryforwards for federal income tax
purposes at September 30, 1999, of $552, which expire in 2007.
45
<PAGE>
Notes to Financial Statements -- Continued
- --------------------------------------------------------------------------------
3. Repurchase Agreements:
All repurchase agreements are fully collateralized by obligations
issued by the U.S. Government or its agencies and such collateral is in
the possession of the Funds' custodian. The value of such collateral
includes accrued interest. Risks arise from the possible delay in
recovery or potential loss of rights in the collateral should the issuer
of the repurchase agreement fail financially. The Funds' investment
advisers, acting under the supervision of their Board of Directors,
review the value of the collateral and the creditworthiness of those
banks and dealers with which the Funds enter into repurchase agreements
to evaluate potential risks.
4. Transactions With Affiliates:
Each Fund has a management agreement with Legg Mason Fund Adviser,
Inc. ("LMFA"). Pursuant to their respective agreements, LMFA provides the
Funds with management and administrative services for which each Fund
pays a fee, computed daily and payable monthly at an annual rate of each
Fund's respective average daily net assets.
LMFA has agreed to waive its fees in any month to the extent a
Fund's expenses (exclusive of taxes, interest, brokerage and
extraordinary expenses) exceed during that month certain annual rates of
that Fund's average daily net assets. The following chart shows the
annual rate of management fees; expense limits and their expiration
dates; total management fees waived; and management fees payable for each
Fund:
<TABLE>
<CAPTION>
Six Months Ended At
September 30, 1999 September 30, 1999
---------------- ----------------
Management Expense Expense Limitation Management Management
Fund Fee Limitation Expiration Date Fees Waived Fees Payable
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Leading Companies 0.75% 1.95% Indefinitely $-- $200
Balanced Trust 0.75% 1.85% July 31, 2000 8 29
U.S. Small-Cap 0.85% 2.00% July 31, 2000 125 20
</TABLE>
Bartlett & Co. ("Bartlett") serves as investment adviser to Balanced
Trust. Bartlett is responsible for the actual investment activity of the
Fund. LMFA pays Bartlett a fee for its services, computed daily and
payable monthly, at an annual rate equal to 662/3% of the fee received by
LMFA.
Brandywine Asset Management, Inc. ("Brandywine") serves as
investment adviser to U.S. Small-Cap. Brandywine is responsible for the
actual investment activity of the Fund. LMFA pays Brandywine a fee for
its services, computed daily and payable monthly, at an annual rate equal
to 58.8% of the fee received by LMFA.
Legg Mason Wood Walker, Incorporated ("Legg Mason"), a member of the
New York Stock Exchange, serves as distributor of the Funds. Legg Mason
receives an annual distribution fee and an annual service fee based on
each Fund's Primary Class's average daily net assets, computed daily and
payable monthly as follows:
<TABLE>
<CAPTION>
At September 30, 1999
--------------------
Distribution Service Distribution and Service
Fund Fee Fee Fees Payable
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
American Leading Companies 0.75% 0.25% $266
Balanced Trust 0.50% 0.25% 30
U.S. Small-Cap 0.75% 0.25% 65
</TABLE>
46
<PAGE>
- --------------------------------------------------------------------------------
No brokerage commissions were paid to Legg Mason or its affiliates
during the six months ended September 30, 1999.
Legg Mason also has an agreement with the Funds' transfer agent to
assist it with some of its duties. For this assistance, the transfer
agent paid Legg Mason the following amounts for the six months ended
September 30, 1999: American Leading Companies, $34; Balanced Trust, $7;
and U.S. Small-Cap, $14. LMFA, Legg Mason, Bartlett and Brandywine are
corporate affiliates and wholly owned subsidiaries of Legg Mason, Inc.
5. Line of Credit:
The Funds, along with certain other Legg Mason Funds, participate in
a $200 million line of credit ("Credit Agreement") to be utilized as an
emergency source of cash in the event of unanticipated, large redemption
requests by shareholders. Pursuant to the Credit Agreement, each
participating Fund is liable only for principal and interest payments
related to borrowings made by that Fund. Borrowings under the line of
credit bear interest at prevailing short-term interest rates. For the six
months ended September 30, 1999, the Funds had no borrowings under the
line of credit.
6. Fund Share Transactions:
At September 30, 1999, there were 250,000, 125,000 and 50,000 shares
authorized at $.001 par value for the Primary Class of American Leading
Companies Trust, Balanced Trust and U.S. Small-Cap, respectively. At
September 30, 1999, there were 50,000 shares authorized at $.001 par
value for the Navigator Class of U.S. Small-Cap.
Share transactions were as follows:
<TABLE>
<CAPTION>
Reinvestment
Sold of Distributions Repurchased Net Change
------------------ --------------- ----------------- ----------------
Shares Amount Shares Amount Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------------------------------
American Leading Companies
--Primary Class
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Six Months Ended September 30, 1999 3,827 $77,710 273 $5,499 (818) $(16,343) 3,282 $66,866
Year Ended March 31, 1999 4,801 84,561 502 8,514 (2,390) (41,444) 2,913 51,631
Balanced Trust
--Primary Class
Six Months Ended September 30, 1999 361 $ 4,402 50 $ 595 (1,036) $(12,570) (625) $(7,573)
Year Ended March 31, 1999 2,261 27,489 112 1,362 (1,492) (17,766) 881 11,085
U.S. Small-Cap
--Primary Class
Six Months Ended September 30, 1999 2,886 $ 25,713 109 $ 988 (1,240) $(10,974) 1,755 $15,727
Period Ended March 31, 1999(A) 9,383 85,160 -- -- (1,909) (15,865) 7,474 69,295
--Navigator Class
Six Months Ended September 30, 1999 2 $ 20 -- $ -- -- $-- 2 $ 20
Period Ended March 31, 1999(A) 5 50 -- -- -- -- 5 50
</TABLE>
(A)For the period June 19, 1998 (commencement of sale of Navigator Class)
to March 31, 1999.
47
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