NAVIGATOR FINANCIAL SERVICES FUND
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NAVIGATOR CLASS OF LEGG MASON FINANCIAL SERVICES FUND
NAVIGATOR SHARES PROSPECTUS October 5, 1999
[LOGO]
LEGG
MASON
FUNDS
HOW TO INVEST(SM)
As with all mutual funds, the Securities and Exchange Commission has not
passed upon the adequacy of this prospectus, nor has it approved or
disapproved these securities. It is a criminal offense to state otherwise.
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TABLE OF CONTENTS
ABOUT THE FUND:
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<TABLE>
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1 Investment objective
2 Principal risks
3 Performance
4 Fees and expenses of the fund
5 Management
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ABOUT YOUR INVESTMENT:
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<TABLE>
<S> <C>
6 How to invest
7 How to sell your shares
8 Account policies
9 Services for investors
10 Dividends and taxes
11 Financial highlights
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LEGG MASON INVESTORS TRUST, INC.
[GRAPHIC] INVESTMENT OBJECTIVE
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LEGG MASON FINANCIAL SERVICES FUND
INVESTMENT OBJECTIVE: Long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
Gray, Seifert & Co., Inc., the fund's sub-adviser, under normal
circumstances, concentrates the fund's investments by investing
substantially all of the fund's assets in equity securities of issuers
in the financial services industry that it believes are undervalued and
thus may offer above-average potential for capital appreciation. Equity
securities include common stocks, preferred stocks, convertible
securities, rights and warrants.
Financial services companies include, but are not limited to:
o regional and money center banks
o securities brokerage firms
o asset management companies
o savings banks and thrift institutions
o specialty finance companies (e.g., credit card and mortgage
providers)
o insurance and insurance brokerage firms
o government-sponsored agencies, such as Fannie Mae
o financial conglomerates
o foreign financial services companies (limited to 25% of total
assets, not including ADRs)
Investments may also include securities of companies that derive more
than 50% of their revenues from providing products and services to the
financial services industry, including software, hardware, publishing,
news services, credit research and ratings services, Internet services
and business services.
The sub-adviser believes the financial services industry is undergoing
many changes due to legislation reform and the shifting demographics of
the population. In deciding what securities to buy, the sub-adviser
analyzes an issuer's financial statements to determine earnings per
share potential. It also reviews, as appropriate, the economy where the
issuer does business, the products offered, its potential to benefit
from industry changes, and the strength and goals of management.
The sub-adviser will sell a security in the fund's portfolio if that
security experiences earnings problems.
For temporary defensive purposes, the fund may hold all or a portion of
its assets in money market instruments, cash equivalents, short-term
government and corporate obligations, or repurchase agreements. The fund
may not achieve its investment objective when so invested.
Legg Mason Investors Trust 1
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[GRAPHIC] PRINCIPAL RISKS
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IN GENERAL:
An investment in the fund is not guaranteed; investors may lose money by
investing in the fund. There is no guarantee that the fund will achieve
its investment objective. The principal risks of investing in the fund
are described below.
MARKET RISK:
Stock prices generally fluctuate more than those of other securities. A
fund may experience a substantial or complete loss on an individual
stock. Market risk may affect a single issuer, industry or section of
the economy, or may affect the market as a whole.
CONCENTRATION RISK:
The fund invests primarily in securities in the financial services
industry. A fund concentrating most of its investments in a single
industry will be more susceptible to factors adversely affecting issuers
within that industry than would a more diversified portfolio of
securities.
Financial services companies are subject to extensive government
regulation. The profitability of financial services companies is
dependent on the availability and cost of funds, and can fluctuate
significantly when interest rates change. Economic downturns, credit
losses and severe price competition can negatively affect this industry.
CREDIT RISK:
There is a risk that the fund's holdings in fixed income securities
could be downgraded or could default in payment of principal or
interest. Credit ratings are the opinions of the private companies that
rate companies or their securities; they are not guarantees.
FOREIGN SECURITIES RISK:
Investments in foreign securities (including those denominated in U.S.
dollars) involve certain risks not typically associated with investments
in domestic issuers. The values of foreign securities are subject to
economic and political developments in the countries and regions where
the companies operate, such as changes in economic or monetary policies,
and to changes in exchange rates. Values may also be affected by foreign
tax laws and restrictions on receiving the investment proceeds from a
foreign country. Some foreign governments have defaulted on principal
and interest payments.
In general, less information is publicly available about foreign
companies than about U.S. companies. Foreign companies are generally not
subject to the same accounting, auditing and financial reporting
standards as are U.S. companies. Transactions in foreign securities may
be subject to less efficient settlement practices, including extended
clearance and settlement periods. Foreign stock markets may be less
liquid and less regulated than U.S. stock markets.
YEAR 2000:
Like other mutual funds (and most organizations around the world), the
fund could be adversely affected by computer problems related to the
year 2000. These could interfere with the operations of the fund, its
adviser, distributor or sub-adviser, and other outside service
providers, and could impact companies in which the fund invests.
While no one knows if these problems will have any impact on the fund or
on financial markets in general, the adviser and its affiliates and the
other service providers to the fund have reported that they are taking
steps to protect fund investors. These include efforts to determine that
the problems will not directly affect the systems used by major service
providers.
Whether these steps will be effective can only be known for certain in
the year 2000.
2 Legg Mason Investors Trust
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[GRAPHIC] PERFORMANCE
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As of the date of this prospectus, the Navigator Class of the fund has
not commenced operations; therefore, no performance information is
presented.
Legg Mason Investors Trust 3
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[GRAPHIC] FEES AND EXPENSES OF THE FUND
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The table below describes the fees and expenses you will incur directly
or indirectly as an investor in the fund. The fund pays operating
expenses directly out of its assets, so they will lower its share price
and dividends. Other expenses include transfer agency, custody,
professional and registration fees.
NAVIGATOR CLASS
<TABLE>
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ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS) (A)
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MANAGEMENT FEES (B) 1.00%
DISTRIBUTION AND/OR
SERVICE (12B-1) FEES NONE
OTHER EXPENSES 0.40%
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TOTAL ANNUAL FUND
OPERATING EXPENSES (B) 1.40%
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(a) The fees and expenses shown are for the fiscal year ended December
31, 1998, and are calculated as a percentage of average net assets. As
of the date of this prospectus, Navigator shares of the fund have not
commenced operations.
(b) Legg Mason Fund Adviser, Inc., as investment adviser, has
voluntarily agreed to waive fees so that expenses of Navigator Class
shares (exclusive of taxes, interest, brokerage and extraordinary
expenses) do not exceed an annual rate of 1.25% of the fund's average
daily net assets attributable to Navigator Class. This voluntary
waiver will continue until May 1, 2000, and may be terminated at any
time. With this waiver, estimated management fees and total annual
fund operating expenses for the fund were 0.85% and 1.25%,
respectively.
EXAMPLE:
This example helps you compare the cost of investing in the fund with
the cost of investing in other mutual funds. Although your actual costs
may be higher or lower, you would pay the following expenses on a
$10,000 investment in the fund, assuming (1) a 5% return each year, (2)
the fund's operating expenses remain the same as shown in the table
above, and (3) you redeem all of your shares at the end of the time
periods shown.
<TABLE>
<S> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
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$143 $ 443 N/A N/A
</TABLE>
4 Legg Mason Investors Trust
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[GRAPHIC] MANAGEMENT
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ADVISER:
Legg Mason Fund Adviser, Inc., 100 Light Street, Baltimore, Maryland
21202, is the fund's investment adviser. The adviser is responsible for
the actual investment management of the fund, including making
investment decisions and placing orders to buy, sell or hold a
particular security. The adviser has delegated investment advisory
functions for the fund to a sub-adviser, as described below. The adviser
also supervises all aspects of the operations of the fund as
administrator.
Prior to October 6, 1999, Bartlett & Co. served as investment adviser to
the fund, under compensation arrangements substantially similar to those
with the current adviser. For its services during the fiscal year ended
December 31, 1998, the fund paid the adviser a fee of 1.00% of its
average daily net assets, net of any waivers.
The adviser acts as manager or adviser to investment companies with
aggregate assets of $19.6 billion as of August 31, 1999.
SUB-ADVISER:
Gray, Seifert & Co., 380 Madison Avenue, New York, New York 10017,
serves as investment sub-adviser to the fund. For its services, Gray,
Seifert receives a monthly fee from the adviser equal to 60% of the fee
actually paid to the adviser by the fund (net of any waivers). Gray,
Seifert is known for its research and securities analysis with respect
to the financial services industry. It has not previously advised a
mutual fund; however, Gray, Seifert has been the evaluator of the Legg
Mason Regional Bank and Thrift Unit Investment Trusts. As of August 31,
1999, Gray, Seifert had aggregate assets under management of $1.1
billion.
PORTFOLIO MANAGEMENT:
Miles Seifert and Amy LaGuardia are responsible for co-managing the
fund. Mr. Seifert has been Chairperson of the Board and a Director of
Gray, Seifert since its inception in 1980. Ms. LaGuardia has been Senior
Vice President and Director of Research at Gray, Seifert for four years.
Prior thereto, she was Vice President. She has been employed at Gray,
Seifert since 1982.
DISTRIBUTOR OF THE FUND'S SHARES:
Legg Mason Wood Walker, Incorporated, 100 Light Street, Baltimore,
Maryland 21202, is the distributor of the fund's shares under an
Underwriting Agreement. The Underwriting Agreement obligates Legg Mason
to pay certain expenses in connection with offering fund shares,
including compensation to its financial advisors; the printing and
distribution of prospectuses, statements of additional information, and
shareholder reports (after these have been printed and mailed to
existing shareholders at the fund's expense); supplementary sales
literature; and advertising materials.
The distributor and the adviser may pay non-affiliated entities out of
their own assets to support the distribution of Navigator shares and
shareholder servicing.
The adviser, sub-adviser and distributor are wholly owned subsidiaries
of Legg Mason, Inc., a financial services holding company.
Legg Mason Investors Trust 5
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[GRAPHIC] HOW TO INVEST
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Navigator shares are currently offered for sale only to:
o Institutional clients of Legg Mason Trust Company ("Institutional
Clients") for which they exercise discretionary investment
management responsibility and accounts of the customers with such
Institutional Clients ("Customers").
o Qualified retirement plans managed on a discretionary basis and
having net assets of at least $200 million.
o Clients of Bartlett & Co. who, as of December 19, 1996, were
shareholders of Bartlett Short Term Bond Fund or Bartlett Fixed
Income Fund and for whom Bartlett acts as an ERISA fiduciary.
o Any qualified retirement plan of Legg Mason, Inc. or of any of
its affiliates.
o Certain institutions who were clients of Fairfield Group, Inc. as
of February 28, 1999, for investment of their own monies and
monies for which they act in a fiduciary capacity.
o Shareholders of Class Y shares of Bartlett Financial Services
Fund or Bartlett Europe Fund on October 5, 1999.
Eligible investors may purchase Navigator shares through a brokerage
account at Legg Mason. The minimum initial investment is $50,000 and the
minimum for each purchase of additional shares is $100. Institutional
Clients may set different minimums for their Customers' investments in
accounts invested in Navigator shares.
Customers of certain Institutional Clients that have omnibus accounts
with the fund's transfer agent can purchase shares through those
institutions. The distributor may pay such Institutional Clients for
account servicing. Institutional Clients may charge their Customers for
services provided in connection with the purchase and redemption of
shares. Information concerning these services and any applicable charges
will be provided by the Institutional Clients. This prospectus should by
read by Customers in connection with any such information received by
Institutional Clients. Any such fees, charges or requirements imposed by
Institutional Clients will be in addition to the fees and requirements
of this prospectus.
Certain institutions that have agreements with Legg Mason or the fund
may be authorized to accept purchase and redemption orders on their
behalf. Once the authorized institution accepts the order, you will
receive the next determined net asset value. You should consult with
your institution to determine the time by which it must receive your
order to get that day's share price. It is the institution's
responsibility to transmit your order to the fund in a timely fashion.
Purchase orders received by Legg Mason before the close of the New York
Stock Exchange (normally 4:00 p.m., Eastern time) will be processed at
the fund's net asset value as of the close of the Exchange on that day.
Orders received after the close of the Exchange will be processed at the
fund's net asset value as of the close of the Exchange on the next day
the Exchange is open. Payment must be made within three business days to
the selling organization.
Primary Class shares and Class A shares of the fund are offered through
a separate prospectus.
6 Legg Mason Investors Trust
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[GRAPHIC] HOW TO SELL YOUR SHARES
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To redeem your shares by telephone:
o Call 1-800-822-5544
Please have available the number of shares (or dollar amount) to be
redeemed and the account number.
The fund will follow reasonable procedures to ensure the validity of any
telephone redemption request, such as requesting identifying information
from callers or employing identification numbers. Unless you specify
that you do not wish to have telephone redemption privileges, you may be
held responsible for any fraudulent telephone order.
Customers of Institutional Clients may redeem only in accordance with
instructions and limitations pertaining to their account at the
institution.
Redemption orders received by Legg Mason before the close of the
Exchange will be transmitted to the fund's transfer agent. Your order
will be processed at that day's net asset value. Redemption orders
received by Legg Mason after the close of the Exchange will be processed
at the closing net asset value on the next day the Exchange is open.
Your order will be processed promptly and you will generally receive the
proceeds by mail to the name and address on the account registration
within a week. You may also have your telephone redemption requests paid
by a direct wire to a previously designated domestic commercial bank
account.
Payment of the proceeds of redemptions of shares that were recently
purchased by check or acquired through reinvestment of dividends on such
shares may be delayed for up to 10 days from the purchase date in order
to allow for the check to clear.
Legg Mason Investors Trust 7
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[GRAPHIC] ACCOUNT POLICIES
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CALCULATION OF NET ASSET VALUE:
Net asset value per Navigator share is determined daily as of the close
of the New York Stock Exchange, on every day the Exchange is open. To
calculate the fund's Navigator share price, the fund's assets
attributable to Navigator shares are valued and totaled, liabilities
attributable to Navigator shares are subtracted, and the resulting net
assets are divided by the number of Navigator shares outstanding. The
fund's securities are valued on the basis of market quotations or,
lacking such quotations, at fair value as determined under the guidance
of the Board of Directors.
Securities for which market quotations are readily available are valued
at the last sale price of the day for a comparable position, or, in the
absence of any such sales, the last available bid price for a comparable
position. Where a security is traded on more than one market, the
securities are generally valued on the market considered by the
sub-adviser to be the primary market. Fixed income securities generally
are valued using market quotations, independent pricing services that
use prices provided by market makers, or estimates of market values.
Securities with remaining maturities of 60 days or less are valued at
amortized cost.
OTHER:
Fund shares may not be held in, or transferred to, an account with any
firm that does not have an agreement with Legg Mason or its affiliates.
The fund reserves the right to:
o Reject any order for shares or suspend the offering of shares
for a period of time.
o Change its minimum investment amounts.
o Delay sending out redemption proceeds for up to seven days.
This generally applies only in cases of very large redemptions,
excessive trading or during unusual market conditions. The fund
may delay redemptions beyond seven days, or suspend
redemptions, only as permitted by the SEC.
8 Legg Mason Investors Trust
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[GRAPHIC] SERVICES FOR INVESTORS
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CONFIRMATIONS AND ACCOUNT STATEMENTS:
Confirmations will be sent to Institutional Clients after each
transaction involving Navigator shares which will include the total
number of shares being held by the transfer agent. The transfer agent
will send confirmations of each purchase and redemption transaction
(except a reinvestment of dividends or capital gain distributions).
Beneficial ownership of shares by Customer accounts will be recorded by
the Institutional Client and reflected in their regular account
statements.
EXCHANGE PRIVILEGE:
Navigator shares of the fund may be exchanged for Navigator shares of
any of the other Legg Mason funds or the Legg Mason money market funds,
provided these funds are eligible for sale in your state of residence.
You can request an exchange in writing or by phone. Be sure to read the
current prospectus for any fund into which you are exchanging.
There is currently no fee for exchanges; however, you may be subject to
a sales charge when exchanging into a fund that has one. An exchange of
the fund's shares will be treated as a sale of the shares and any gain
on the transaction may be subject to tax.
The fund reserves the right to:
o Terminate or limit the exchange privilege of any shareholder
who makes more than four exchanges from the fund in one
calendar year.
o Terminate or modify the exchange privilege after 60 days'
written notice to shareholders.
Some Institutional Clients may not offer all of the Navigator funds for
exchange.
Legg Mason Investors Trust 9
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[GRAPHIC] DIVIDENDS AND TAXES
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The fund declares and pays all dividends on an annual basis.
Distributions of substantially all of the fund's net capital gain (the
excess of net long-term capital gain over net short-term capital loss)
and any net realized gains from foreign currency transactions are
generally declared and paid after the end of the tax year in which the
gain is realized. A second distribution of net capital gain may be
necessary in some years to avoid imposition of a federal excise tax.
Your dividends and other distributions will be automatically reinvested
in additional Navigator shares of the fund. If you wish to begin
receiving dividends and/or other distributions in cash, you must notify
the fund at least 10 days before the next dividend and/or other
distribution is to be paid.
If a shareholder has elected to receive dividends and/or distributions
in cash and the postal or other delivery service is unable to deliver
checks to the shareholder's address of record, such shareholder's
distribution option will automatically be converted to having all
dividends and other distributions reinvested in additional shares. No
interest will accrue on amounts represented by uncashed distribution or
redemption checks.
Fund dividends and other distributions are taxable to investors (other
than retirement plans and other tax-exempt investors) whether received
in cash or reinvested in additional Navigator shares of the fund.
Dividends from net investment company taxable income are taxable as
ordinary income. Distributions of the fund's net capital gain are
taxable as long-term capital gain, regardless of how long you have held
your fund shares.
The sale or exchange of fund shares may result in a taxable gain or
loss, depending on whether the proceeds are more or less than the cost
of your shares.
A tax statement will be sent to each investor at the end of each year
detailing the tax status of your distributions.
The fund will withhold 31% of all dividends, capital gain distributions
and redemption proceeds payable to individuals and certain other
noncorporate shareholders who do not provide the fund with a valid
taxpayer identification number. The fund will also withhold 31% of all
dividends and capital gain distributions payable to such shareholders
who are otherwise subject to backup withholding.
Because each investor's tax situation is different, please consult your
tax adviser about federal, state and local tax considerations.
10 Legg Mason Investors Trust
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[GRAPHIC] FINANCIAL HIGHLIGHTS
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As of the date of this prospectus, the Navigator Class of the fund has
not commenced operations.
Legg Mason Investors Trust 11
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LEGG MASON FINANCIAL SERVICES FUND
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The following additional information about the fund is available upon
request and without charge:
STATEMENT OF ADDITIONAL INFORMATION (SAI) - The SAI is filed with the
Securities and Exchange Commission (SEC) and is incorporated by
reference into (is considered part of) this prospectus. The SAI provides
additional details about the fund and its policies.
ANNUAL AND SEMI-ANNUAL REPORTS - Additional information about the fund's
investments is available in the fund's annual and semi-annual reports to
shareholders. These reports provide detailed information about each
fund's portfolio holdings and operating results.
TO REQUEST THE SAI OR ANY REPORTS TO SHAREHOLDERS, OR TO OBTAIN MORE
INFORMATION:
- call toll-free 1-800-822-5544
- visit us on the Internet via http://www.leggmason.com
- write to us at: Legg Mason Wood Walker, Incorporated
100 Light Street, P.O. Box 1476
Baltimore, Maryland 21203-1476
Information about the fund, including the SAI, can be reviewed and
copied at the SEC's public reference room in Washington, D.C. (phone
1-800-SEC-0330). Reports and other information about the fund are
available on the SEC's Internet site at http://www.sec.gov. Investors
may also write to: SEC, Public Reference Section, Washington, D.C.
20549-6009. The SEC charges a fee for making copies.
LMF-189 SEC file number 811-7692
