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Previous: ATLANTIC COAST AIRLINES HOLDINGS INC, 10-Q, 1999-08-16 |
Next: MILLENNIUM SPORTS MANAGEMENT INC, 10QSB, 1999-08-16 |
To Our Shareholders,
We are pleased to provide you with Legg Mason Investors Trust's quarterly
report for the American Leading Companies Trust, the Balanced Trust and the U.S.
Small-Cap Value Trust.
The following table summarizes key statistics for the Primary Class of shares
of each Fund, as of June 30, 1999:
3-Month 12-Month
Total Return(1) Total Return(1)
--------------- ---------------
American Leading Companies Trust +3.49% +24.46%
Balanced Trust +3.19% +1.89%
U.S. Small-Cap Value Trust +21.11% -5.89%
S&P 500 Stock Composite Index +7.06% +22.77%
Lipper Balanced Fund Index(2) +4.49% +11.54%
Russell 2000 Index +15.55% +1.50%
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.
During 1998 and into 1999, the focus on the Year 2000 issue increased
significantly. 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 Funds' Year 2000 project is well underway, and
is designed to ensure that the Year 2000 date change will have no adverse impact
on our ability to service our shareholders. The Funds are committed to taking
those steps necessary to protect our investors, including efforts to determine
that the Year 2000 problem will not affect such vital service functions as
shareholder transaction processing and recordkeeping. In addition, we are
continuously monitoring the Year 2000 efforts of our vendors, and will perform
tests with our critical vendors throughout 1999. Although the Funds are taking
steps to ensure that all of their systems will function properly before, during,
and after the Year 2000, the Funds could be adversely affected by
computer-related problems associated with the Year 2000. Contingency plans are
in place to ensure that functions critical to the Funds' operations will
continue without interruption. We are on target to complete this important
project and look forward to continuing extensive testing (including
industry-wide testing) with our industry peers, regulators and vendors
throughout 1999.
The Board of Directors recently approved an ordinary income dividend of $0.05
per share to shareholders of Balanced Trust, payable on August 6, 1999, to
shareholders of record on August 4, 1999.
- --------------
(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
August 2, 1999
2
<PAGE>
Portfolio Managers' Comments
American Leading Companies Trust
Market Commentary
There was a sea change in the second quarter, as well established performance
trends reversed themselves sharply. For the past several years, including the
first quarter of 1999, large capitalization stocks have tended to outperform
smaller capitalization stocks, and investment strategies focusing on growth
companies have tended to outperform value-oriented strategies. In the second
quarter, small-cap stocks outperformed large-cap stocks, and value-oriented
strategies prevailed over growth.
The S&P 500/Barra Growth index and the S&P 500/Value index are good proxies
for the relative performance of growth and value strategies. In the first
quarter, the S&P/Barra Growth index outperformed its Value counterpart by over
400 basis points,(1) +6.88% to +2.85%. In the second quarter, the S&P/Barra
Value index outperformed the Growth index by almost 700 basis points, +10.80% to
+3.83%. The Value index's comeback in the second quarter was sufficiently strong
to put it ahead of the Growth index for the first 6 months of the year, +13.96%
to +10.98%. This is the first time since 1994 that the Value index has led the
Growth index at mid-year.
The S&P 500 index and the Russell 2000 index are good proxies for the
relative performance of large- and small-capitalization stocks. In the first
quarter, the large-caps had it all their way, as the S&P 500 was up 4.99%, while
the Russell 2000 declined by 5.42%. In the second quarter, it was a completely
different story, with the Russell 2000 up more than twice as much as the S&P
500, +15.55% to +7.06%.
Interestingly, the resurgence of small-cap stocks in the second quarter is
apparent even within the S&P 500 itself. In the first quarter, the largest 100
companies in the S&P 500 by market value were up 6.2%, while the other 400 were
up only 0.8%. Since the top 100 stocks account for over 70% of the total market
value of S&P 500, they are a heavy influence on the overall performance of the
index. When these huge companies perform substantially better than most other
stocks (as was the case in the first quarter of 1999), it is very difficult for
the average portfolio or the average portfolio manager to beat the index, unless
they also have a huge weighting in these mega-cap companies. As might be
expected, less than 26% of actively managed funds beat the S&P 500 in the first
quarter, according to Lipper Analytical Services.
The second quarter was an entirely different story. After outperforming
consistently for several years and again in the first quarter, the 100 largest
capitalization stocks in the S&P 500 index trailed the pack in the second
quarter. The table below(2) illustrates the point in more detail:
Beginning
S&P 500 Market Value % Total 2nd Quarter 1999
Quintile (in Billions) Market Value Performance
-------- ------------- ------------ ----------------
I $ 7,641.1 72.2% +4.8%
II 1,563.9 14.8% +7.7%
III 777.1 7.4% +11.6%
IV 428.7 4.1% +13.0%
V 159.3 1.5% +26.6%
--------- ------
$10,570.1 100.0%
- --------------
(1) 100 basis points = 1%.
(2) Source: Standard & Poor's, Compustat, FactSet Data Systems and Legg Mason
Fund Adviser.
3
<PAGE>
Portfolio Managers' Comments -- Continued
American Leading Companies Trust -- Continued
Clearly, small was beautiful in the second quarter as performance improved
steadily for each successively smaller market capitalization quintile, with the
smallest 100 companies in the S&P up a rousing 26.6%. Again, because the largest
quintile accounts for over 70% of the total market value of the index, it has a
disproportionately large impact on overall returns. Importantly, though, in an
environment where the largest companies underperform most others, it is more
likely that the average port-folio or average portfolio manager will beat the
index. This held true in the second quarter, as fully 68% of actively managed
portfolios bettered the return of the S&P 500, according to Lipper.
Investment Results
Cumulative results for the American Leading Companies Trust for the
three-month, six-month, one-year, and three-year periods ended June 30, 1999,
are listed below, along with those of some representative benchmarks:
<TABLE>
<CAPTION>
Three Six
Months Months One Year Three Years
---------------------------------------------------------
<S><C>
American Leading Companies 3.49% 14.00% 24.46% 100.69%
S&P 500 Composite Index 7.06% 12.39% 22.77% 115.25%
Lipper General Equity Funds 10.16% 11.04% 13.71% 70.97%
Dow Jones Industrial Average 12.52% 20.42% 24.64% 104.94%
</TABLE>
American Leading Companies Trust had a below average quarter, trailing the
S&P 500, the Lipper General Equity index and the Dow Industrials for the three
months. The Fund remained ahead of the S&P 500 and the Lipper index for the most
recent twelve months, but trailed the Dow Industrials by a small margin over
that time frame. For the three-year period, the results were mixed, with the
Fund bettering the Lipper index, but trailing the S&P 500 index and the Dow
Industrials. The factors which contributed to the Fund's relatively poor showing
in the quarter were largely the same factors which contributed to its good
performance in the March quarter and prior twelve months. First and foremost,
the Fund's large holding in America Online, which has been of great benefit to
performance in the past, hurt performance in the quarter as the stock underwent
a 25% price correction. Second, the Fund's focus on large-capitalization stocks,
which has also been beneficial to overall results in the recent past, was
detrimental to quarterly performance as this sector trailed most others in the
latest three months. Important positive contributors to performance for the last
three months included: IBM Corporation, MGIC Investments, United HealthCare,
Foundation Health Systems, Koninklijke Philips Electronics, Citigroup and Avon
Products. Apart from America Online, stocks which most negatively affected
performance in the quarter were: Amgen, Washington Mutual, Storage Technology,
Merck, Pfizer and Schering-Plough.
During the quarter, we established new positions in seven companies (Campbell
Soup Company, du Pont, McKesson HBOC, Inc., Rite Aid Corporation, Saks
Incorporated (parent of Saks Fifth Avenue), Waste Management Inc. and Xerox
Corporation) and sold the Fund's holdings in two companies (Compaq Computer and
Schlumberger Ltd.). In addition, we added to existing holdings in seventeen
stocks, and modestly reduced our holdings in three (America Online, Intel
Corporation and MCI WorldCom).
4
<PAGE>
Outlook
In a widely anticipated move, the Federal Reserve's policy-making open market
committee raised its key short-term interest rate--the Fed Funds rate--by a
quarter of a percentage point to five percent on the last day of June. More
significantly, and contrary to expectations, the Fed shifted away from its
previously announced tightening bias to a neutral stance, thus signaling that
further increases in the Fed Funds rate are not necessarily in the offing.
Specifically, Fed Chairman Alan Greenspan said: "Owing to the uncertain
resolution of the balance of conflicting forces in the economy going forward,
[the open market committee] has chosen to adopt a directive that includes no
predilection about near-term policy action." Both the stock and bond markets
reacted very positively to the news.
In our opinion, the Fed's action in raising rates and shifting to a neutral
bias is entirely appropriate. We believe the recent uptick in the inflation rate
merited a modest preemptory rate boost, but not, based upon available data, a
series of increases. Going forward, the Fed will either raise rates again or
not, as events dictate. For now, though, we believe that the Fed's wait-and-see
attitude is just what the doctor ordered.
Though we admit to being surprised by the strength of the equity market so
far this year, we remain relatively sanguine about the outlook for the balance
of the year. Second quarter earnings look as though they will be generally in
line with or ahead of expectations, which should provide a boost to the overall
market. Assuming that inflation doesn't rear its ugly head again, and we think
it won't, stocks could continue to make modest upward progress in the last half
of the year.
As always, we welcome your comments or questions.
David E. Nelson, CFA
Portfolio Manager
July 15, 1999
DJIA 11186.41
5
<PAGE>
Portfolio Managers' Comments
Balanced Trust
Equity
Value stocks showed encouraging signs of life in the second quarter.
Meanwhile, smaller stocks seem to have risen from the dead. Of course, as we
have said for some time, based on valuations this resurgence seemed long
overdue. After such a lengthy "resting" period, it remains to be seen if this
move is just a short-term bounce or a more sustainable long-term trend. Although
attractive valuations of value stocks firmly support their return to favor,
there is a tendency for these stocks to weaken late in the economic cycle due to
their generally higher sensitivity to economic conditions. Fortunately, in our
experience it is much easier to identify attractive companies for investment
than to forecast the direction of the economy!
Among the better performing stocks in the portfolio for the quarter were Tyco
International, Molex, AMR and Kaydon. Notable in this group were two smaller
companies--Molex and Kaydon--which are representative of the broadening market
and of the rebound from a difficult first quarter, where these two companies
were among the worst performers. The only significant underperformer was Compaq,
where continued earnings weakness weighed heavily on the company. We continue to
view Compaq favorably as a long-term holding in the technology industry.
Other underperformers included McDonald's, Fleetwood and Anheuser-Busch.
The equity sector was repositioned to reduce the disparity of our holdings
vis-a-vis the S&P 500. Positions were established in Unocal and Intel to build
our energy and technology exposure. We eliminated positions in Fleetwood,
Jostens, Ucar and YPF, along with our holdings in electric utilities. We also
reduced our position in Kansas City Southern and Union Pacific. These companies
have been successful investments for us and each at various times has been our
largest stock position in the Fund. Kansas City Southern is particularly
noteworthy because it has been an outstanding performer, having increased over
four times since our initial purchase. Although still relatively appealing, our
calculation of its intrinsic value no longer justifies the overemphasis relative
to our other portfolio holdings.
Fixed Income
During the quarter ended June 30, 1999, interest rates continued rising along
the yield curve, with most maturities experiencing a 50 basis point(1) or
greater increase--with the one exception being maturities of one year and under,
which increased approximately 30 basis points. This quarter, coupled with the
first quarter, has produced a 100 basis point increase in yields, which has
significantly impacted bond market returns. This increase in yields is primarily
a function of the expectation of future inflationary pressures rather than any
actual reported inflationary pressure. This, along with the recent Federal
Reserve tightening of credit, has the bond market on the ropes.
It was very difficult to add value this quarter since spread assets,
including corporate bonds and mortgage-backs, underperformed as the yield
spreads on these securities widened. The one benefit that we realized was having
a significant portion of the Fund invested in maturities of one year or less,
which was the best performing maturity sector for this period.
- --------------
(1) 100 basis points = 1%.
6
<PAGE>
During the quarter, we increased our position in corporate bonds to take
advantage of the widening yield spread in this sector. We also added to our
position in inflation-indexed notes, as these securities offer inflation
protection at essentially no cost. Finally, we eliminated our position in the
6.50% mortgage-backed securities and invested the proceeds into 5-year
Treasuries, which have become particularly cheap with the recent increase in
interest rates.
As to where we go from here, the economy continues to present a mixed picture
insofar as most indicators of inflation are quite favorable, while on the other
hand economic activity remains strong. Additionally, it is important to point
out that the Federal Reserve has rarely raised rates just once during a cycle,
so it is reasonably likely that there is at least one more tightening in the not
too distant future. We are confident that the Federal Reserve is remaining
vigilant with regard to inflation and, by maintaining this posture in the
marketplace, will continue to inspire long-term optimism about inflation, which
should lead to a favorable bond market in the period ahead. As always, we will
monitor the situation closely.
Although we are disappointed with our results over the last year, we know
that this outcome was a result of a conscious decision to avoid unnecessary
risk. Unfortunately, risk, from our perspective, has been excessively rewarded.
Recent market trends give us great encouragement that our relative performance
will improve as markets broaden out and more sensible valuations return. Thank
you for your continued support.
Woodrow H. Uible, CFA Dale H. Rabiner, CFA
Equity Portfolio Manager Fixed Income Portfolio Manager
July 23, 1999
DJIA 10910.96
7
<PAGE>
Portfolio Managers' Comments
U.S. Small-Capitalization Value Trust
For the quarter, the portfolio was up 21.1%, relative to a 16.6% return for the
Russell 2000 Value, a 15.6% gain for the Russell 2000, and only a 7.1% rise in
the S&P 500. Year-to-date, the portfolio has gained 9.0% compared to returns of
5.3% for the Russell 2000 Value, 9.3% for the Russell 2000, and 12.4% for the
S&P 500.
The second quarter was a strong reversal from the strong market trends that
had dominated since late 1998. Prior to the second quarter, a narrowly focused
group of large-cap and Internet stocks had risen dramatically, while the rest of
the U.S. equity market lagged behind. In April, investors abruptly concluded
that the global economy was gathering strength and that the crisis regions of
the last two years had ceased deteriorating. This nascent global recovery,
coupled with continued vigor in the U.S., led investors to focus on the
economically sensitive stocks that would benefit from worldwide growth. The rush
into these relatively smaller, hugely undervalued stocks generated swift and
extensive price gains. As a result, small-caps rallied, with value stocks
providing the greatest returns. Small-caps also benefited from another shift in
investor sentiment, as an improving economy generated greater interest in
small-caps -- a reversal of the "flight to quality" that was so prevalent in the
last few years.
A second catalyst to improved small-cap performance came from the recent
increase in small-cap merger activity. For small-caps, merger and acquisition
activity in the first quarter of 1999 exceeded corporate actions for all of
1998, and is on pace to set an annual record. Small-cap stocks have gotten so
inexpensive that other corporations are pursuing buyouts as a cost-effective
method of adding assets. This activity confirms that these stocks have fallen
well below the companies' "fair market" value.
The Fund's value portfolio benefited in the quarter from significant
weightings in economically sensitive sectors such as manufacturing, steels, and
chemicals. Before the second quarter, these stocks had lagged, as investors
remained concerned about global economic difficulties. The companies had reached
extreme valuation discounts and, subsequently, responded very positively to the
worldwide stabilization. The portfolio also was aided by strong performance from
oil services holdings (drillers, barge services, and exploration equipment). Our
oil services holdings illustrate the power of the Fund's value-oriented
investment discipline.
Late in 1998, as oil prices fell below $11 and oil exploration dropped
sharply, the oil services firms were facing severe demand cutbacks. Stock prices
fell even more dramatically as analysts and investors abandoned the sector. As
oil services stocks fell to less than half of prior year prices, our value
process identified a number of these firms whose valuations more than adequately
reflected their grimmer fundamental prospects. We do not forecast oil prices,
but we did believe that at these low levels, moves upward were more likely than
a further fall. When oil rallied in March, the oil services stocks responded
with stock gains that were an important contribution to portfolio returns.
Portfolio performance was also helped by our below-index weighting in
financial services, particularly in banks. These stocks in general have had
strong returns over the last few years, and as a result, we had significantly
reduced our finance holdings. In contrast, these stocks have lagged throughout
1999, primarily due to the recent rise in interest rates. The main drag on
performance for the quarter and the year was our low weighting in technology
stocks. While these stocks have not had attractive valuations according to our
investment disciplines, they have continued to generate strong returns,
particularly in the Internet segment. We remain underweighted in this sector due
to the extended valuations.
8
<PAGE>
The second quarter was a welcome break from the lengthy dominance of
large-cap growth stocks. Even with the powerful price move in the quarter,
small-cap value stocks remain at very attractive valuations. The price gains in
the quarter have barely begun to close the extraordinary valuation gap that
exists between large and small stocks. The improving world economy coupled with
heavy merger activity should continue to propel these small stocks higher. In
addition, the Fed's June rate hike signaled that they foresee a healthy economy
without inflation that should further reassure small-cap investors.
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
July 26, 1999
DJIA 10863.16
9
<PAGE>
Performance Information
Legg Mason Investors Trust, Inc.
Total Returns for One Year, Five Years, and Life of Class, as of June 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.
The Navigator Class of Balanced Trust has not commenced operations. Information
about the Navigator Class, offered only to certain institutional investors, is
contained in a separate report to its shareholders.
The Funds' total returns as of June 30, 1999, were as follows:
<TABLE>
<CAPTION>
American Leading Balanced U.S. Small-Cap
Companies Trust Trust Value Trust
- -----------------------------------------------------------------------------------------------
<S><C>
Average Annual Total Return
Primary Class:
One Year +24.46% +1.89% -5.89%
Five Years +21.83% N/A N/A
Life of Class(A) +17.88% +10.30% -5.19%
Cumulative Total Return
Primary Class:
One Year +24.46% +1.89% -5.89%
Five Years +168.40% N/A N/A
Life of Class(A) +160.99% +30.92% -5.41%
- -----------------------------------------------------------------------------------------------
</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*
<TABLE>
<CAPTION>
Strong performers for the 2nd quarter 1999 Weak performers for the 2nd quarter 1999
------------------------------------------------------ -----------------------------------------
<S><C>
1. Hewlett-Packard Company +48.2% 1. America Online, Inc. -24.3%
2. International Business Machines Corporation +45.8% 2. Pfizer Inc. -20.9%
3. MGIC Investment Corporation +38.7% 3. Amgen Inc. -18.7%
4. Foundation Health Systems, Inc. +23.1% 4. Storage Technology Corporation -18.4%
5. Minnesota Mining and Manufacturing 5. Washington Mutual, Inc. -13.5%
Company (3M) +22.9%
</TABLE>
* Securities held for the entire quarter.
Portfolio Changes
<TABLE>
<CAPTION>
Securities added during the 2nd quarter 1999 Securities sold during the 2nd quarter 1999
-------------------------------------------- -------------------------------------------
<S><C>
Campbell Soup Company Compaq Computer Corporation
E.I. du Pont de Nemours and Company Schlumberger Limited
McKesson HBOC, Inc.
Rite Aid Corporation
Saks Incorporated
Waste Management Inc.
Xerox Corporation
</TABLE>
11
<PAGE>
Performance Information -- Continued
Balanced Trust
Selected Portfolio Performance*
<TABLE>
<CAPTION>
Strong performers for the 2nd quarter 1999 Weak performers for the 2nd Quarter 1999
--------------------------------------------- -------------------------------------------
<S><C>
1. Service Corporation International +35.1% 1. Compaq Computer Corporation -25.2%
2. Tyco International Ltd. +32.1% 2. McDonald's Corporation -9.2%
3. Molex Incorporated +21.7% 3. Anheuser-Busch Companies, Inc. -6.9%
4. AMR Corporation +16.5% 4. Government National Mortgage
5. Kaydon Corporation +16.2% Association, 6%, 8/15/28-11/15/28 -3.8%
5. United States Treasury Notes,
* Securities held for the entire quarter. 5.50%, 2/15/08 -3.8%
</TABLE>
Portfolio Changes
<TABLE>
<CAPTION>
Securities added during the 2nd quarter 1999 Securities sold during the 2nd quarter 1999
-------------------------------------------- -------------------------------------------
<S><C>
Intel Corporation Chiquita Brands International, Inc.,
Merck & Co., Inc. 3.75%, Series B, Cv
Post Properties, Inc. Fannie Mae,
SYSCO Corporation 7.37%, 4/1/04
Union Pacific Corporation, Freddie Mac,
7.375%, 5/15/01 6.50%, 1/1/26-5/1/28
Union Pacific Corporation, Fleetwood Enterprises, Inc.
5.78%, 10/15/01 Jostens, Inc.
United States Treasury Notes, Kansas City Power &Light Company
5.875%, 2/15/04 Korea Fund, Inc.
Unocal Corporation TNP Enterprises, Inc.
UCAR International, Inc.
United States Treasury Notes,
5.625%, 5/15/01
United States Treasury Notes,
6.50%, 5/31/01
United States Treasury STRIPS,
0%, 5/15/00
Western Resources, Inc.
YPF Sociedad Anonima ADR
</TABLE>
12
<PAGE>
U.S. Small-Capitalization Value Trust(dagger)
<TABLE>
<CAPTION>
Strong performers for the 2nd quarter 1999* Weak performers for the 2nd quarter 1999*
------------------------------------------- ----------------------------------------------
<S><C>
1. Pamida Holdings Corporation +268.0% 1. Leasing Solutions, Inc. -67.6%
2. Specialty Care Network, Inc. +166.7% 2. Cole National Corporation -56.5%
3. Marshall Industries +166.2% 3. The Stephan Co. -52.1%
4. REX Stores Corporation +157.8% 4. Motorcar Parts and Accessories, Inc. -52.0%
5. MTI Technology Corp. +136.2% 5. Hvide Marine Incorporated -50.0%
</TABLE>
(dagger) Portfolio changes have not been reported for U.S. Small-Cap due
to the heavy volume of trading during the quarter.
* Securities held for the entire quarter.
13
<PAGE>
Portfolio of Investments
Legg Mason Investors Trust, Inc.
June 30, 1999 (Unaudited)
(Amounts in Thousands)
American Leading Companies Trust
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Common Stocks and Equity Interests -- 94.8%
Airlines -- 1.8%
AMR Corporation 88 $ 6,006(A)
--------
Automotive -- 1.6%
Delphi Automotive Systems Corporation 35 649
Ford Motor Company 25 1,411
General Motors Corporation 50 3,300
--------
5,360
--------
Banking -- 12.0%
Bank One Corporation 139 8,279
BankAmerica Corporation 74 5,393
Citigroup Inc. 266 12,611
Mellon Bank Corporation 80 2,910
The Chase Manhattan Corporation 133 11,521
--------
40,714
--------
Capital Goods -- 0.8%
General Electric Company 25 2,825
--------
Chemicals -- 0.6%
E.I. du Pont de Nemours and Company 30 2,049
--------
Computer Services and Systems -- 10.0%
Cisco Systems, Inc. 60 3,870(A)
Hewlett-Packard Company 17 1,739
Intel Corporation 105 6,248
International Business Machines Corporation 120 15,510
Storage Technology Corporation 290 6,597(A)
--------
33,964
--------
Computer Software -- 1.1%
Microsoft Corporation 40 3,608(A)
--------
Consumer Cyclicals -- 3.6%
Mattel, Inc. 402 10,628
Wal-Mart Stores, Inc. 34 1,641
--------
12,269
--------
Consumer Staples -- 3.2%
Avon Products, Inc. 125 6,938
Kimberly-Clark Corporation 50 2,850
The Procter & Gamble Company 12 1,035
--------
10,823
--------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Electrical Equipment and Electronics -- 3.7%
Koninklijke (Royal) Philips Electronics N.V. 124 $ 12,529(A)
--------
Energy -- 1.1%
Exxon Corporation 15 1,118
Texaco, Inc. 40 2,500
--------
3,618
--------
Financial Services -- 3.2%
Fannie Mae 50 3,419
MGIC Investment Corporation 150 7,294
--------
10,713
--------
Food, Beverage and Tobacco -- 5.3%
Dole Food Company, Inc. 210 6,169
PepsiCo, Inc. 95 3,675
Philip Morris Companies, Inc. 153 6,149
Sara Lee Corporation 90 2,042
--------
18,035
--------
Food Services -- 0.4%
Campbell Soup Company 30 1,391
--------
Health Care -- 8.0%
Foundation Health Systems, Inc. 500 7,500(A)
Johnson & Johnson 14 1,392
McKesson HBOC, Inc. 235 7,549
United HealthCare Corporation 170 10,646
--------
27,087
--------
Hotels and Motels -- 2.5%
Hilton Hotels Corporation 100 1,419
Starwood Hotels & Resorts Worldwide, Inc. 225 6,876
--------
8,295
--------
Insurance -- 5.2%
American International Group, Inc. 11 1,299
Berkshire Hathaway Inc.-- Class B 3 6,720(A)
Conseco, Inc. 310 9,436
--------
17,455
--------
Manufacturing -- 0.7%
Minnesota Mining and Manufacturing Company (3M) 28 2,434
--------
</TABLE>
15
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
American Leading Companies Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Media -- 3.9%
America Online, Inc. 118 $ 13,039(A)
--------
Non-Hazardous Waste Disposal -- 1.6%
Waste Management Inc. 100 5,375
--------
Office Automation and Equipment -- 1.7%
Xerox Corporation 100 5,906
--------
Pharmaceuticals -- 7.6%
Amgen Inc. 122 7,427(A)
Bristol-Myers Squibb Company 85 5,987
Merck & Co., Inc. 78 5,772
Pfizer Inc. 15 1,646
Schering-Plough Corporation 93 4,929
--------
25,761
--------
Real Estate -- 1.5%
Equity Office Properties Trust 200 5,125
--------
Retail -- 2.4%
Rite Aid Corporation 330 8,126
--------
Retail Sales -- 2.3%
Saks Incorporated 120 3,471(A)
Toys "R" Us, Inc. 216 4,468(A)
--------
7,939
--------
Savings and Loan -- 2.4%
Washington Mutual, Inc. 230 8,136
--------
Telecommunications -- 4.8%
AT&T Corp. 90 5,023
MCI WorldCom, Inc. 130 11,188(A)
--------
16,211
--------
Transportation -- 1.8%
Burlington Northern Santa Fe Corporation 200 6,200
--------
Total Common Stocks and Equity Interests (Identified Cost-- $228,281) 320,993
-----------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Repurchase Agreements -- 7.0%
Goldman, Sachs & Company
5%, dated 6/30/99, to be repurchased at $7,902 on 7/1/99
(Collateral:$8,738 Fannie Mae mortgage-backed securities,
6%, due 2/1/29, value $8,201) $7,901 $ 7,901
Merrill Lynch & Co., Inc.
4.80%, dated 6/30/99, to be repurchased at $7,902 on 7/1/99
(Collateral:$8,481 Fannie Mae mortgage-backed securities,
6.50%, due 4/1/29, value $8,180) 7,901 7,901
Morgan Stanley Dean Witter & Co.
4.90%, dated 6/30/99, to be repurchased at $7,902 on 7/1/99
(Collateral:$7,950 Federal Home Loan Bank government-backed
securities, 5.16%, due 3/8/00, value $8,063) 7,900 7,900
--------
Total Repurchase Agreements (Identified Cost-- $23,702) 23,702
-----------------------------------------------------------------------------------------------------------------
Total Investments-- 101.8% (Identified Cost-- $251,983) 344,695
Other Assets Less Liabilities-- (1.8)% (5,964)
--------
NET ASSETS -- 100.0% $338,731
========
NET ASSET VALUE PER SHARE $20.72
======
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Non-income producing.
17
<PAGE>
Portfolio of Investments
Legg Mason Investors Trust, Inc.
June 30, 1999 (Unaudited)
(Amounts in Thousands)
Balanced Trust
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Common Stocks and Equity Interests -- 59.7%
Advertising/Media -- 1.5%
Time Warner, Inc. 11 $ 808
-------
Aerospace -- 1.1%
Lockheed Martin Corporation 16 596
-------
Automotive -- 1.5%
Ford Motor Company 15 847
-------
Chemicals -- 3.0%
Ferro Corporation 30 825
Potash Corporation of Saskatchewan, Inc. 16 828
-------
1,653
-------
Computer Services and Systems -- 1.1%
Compaq Computer Corporation 25 592
-------
Construction and Building Materials -- 1.3%
Martin Marietta Materials, Inc. 12 708
-------
Electrical Equipment and Electronics -- 2.9%
Intel Corporation 13 774
Molex Incorporated 25 787
-------
1,561
-------
Energy -- 2.5%
Phillips Petroleum Company 14 679
Unocal Corporation 17 674
-------
1,353
-------
Finance -- 10.2%
Citigroup Inc. 32 1,496
Fannie Mae 22 1,504
H&R Block, Inc. 27 1,350
Marshall & Ilsley Corporation 12 772
Mellon Bank Corporation 12 437
-------
5,559
-------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Food, Beverage and Tobacco -- 6.4%
Anheuser-Busch Companies, Inc. 13 $ 886
McDonald's Corporation 25 1,033
Philip Morris Companies Inc. 27 1,085
SYSCO Corporation 17 507
-------
3,511
-------
Health Care -- 1.0%
Abbott Laboratories 12 523
-------
Insurance -- 0.9%
Aetna Inc. 6 492
-------
Investment Companies -- 1.8%
Blackrock North American Government Income Trust, Inc. 100 1,000
-------
Manufacturing -- 4.8%
Dover Corporation 18 630
Kaydon Corporation 39 1,311
Tyco International Ltd. 8 711
-------
2,652
-------
Pharmaceuticals -- 0.7%
Merck & Co., Inc. 5 370
-------
Real Estate Investment Trusts (REITS) -- 3.7%
Chateau Communities, Inc. 45 1,347
Post Properties, Inc. 17 697
-------
2,044
-------
Savings and Loan -- 2.5%
Charter One Financial, Inc. 49 1,363
-------
Services -- 1.1%
Service Corporation International 32 616
-------
Telecommunications -- 4.0%
AT&T Corp. 28 1,549
Cincinnati Bell, Inc. 15 374
Convergys Corporation 15 289(A)
-------
2,212
-------
</TABLE>
19
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
Balanced Trust -- Continued
<TABLE>
<CAPTION>
Rate Maturity Date Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Transportation -- 7.7%
AMR Corporation 18 $ 1,194(A)
GATX Corporation 25 933
Kansas City Southern Industries, Inc. 16 1,047
Union Pacific Corporation 18 1,067
-------
4,241
-------
Total Common Stocks and Equity Interests
(Identified Cost-- $26,924) 32,701
-----------------------------------------------------------------------------------------------------------------
Corporate Bonds and Notes -- 8.6%
Associates Corporation of North America 5.50% 2/15/02 $ 900 883
Merrill Lynch & Co., Inc. 6% 11/15/04 1,000 972
Safeway Inc. 5.75% 11/15/00 770 766
Toronto-Dominion Bank 7.875% 8/15/04 825 827
Union Pacific Corporation 7.375% 5/15/01 200 203
Union Pacific Corporation 5.78% 10/15/01 1,050 1,034
-------
Total Corporate Bonds and Notes
(Identified Cost -- $4,769) 4,685
-----------------------------------------------------------------------------------------------------------------
U.S. Government and Agency Obligations -- 29.4%
Inflation-Indexed Securities(B) -- 4.2%
United States Treasury Inflation-Indexed 7/15/02 to
Security 3.625% 1/15/08 2,329 2,290
-------
Medium-Term Notes -- 3.6%
Fannie Mae 5.60% 2/2/01 1,000 997
Federal Farm Credit Bank 5.52% 2/25/02 1,000 994
-------
1,991
-------
Mortgage-Backed Securities -- 10.4%
Fannie Mae 6% 12/1/25 to
10/1/28 2,972 2,795
Freddie Mac 6% 3/1/26 71 67
Government National Mortgage Association 6% 8/15/28 to
12/15/28 3,038 2,839
-------
5,701
-------
Treasury Notes/STRIPS(C) -- 11.2%
United States Treasury Notes 6.25% 6/30/02 500 508
United States Treasury Notes 5.25% 8/15/03 900 885
United States Treasury Notes 5.875% 2/15/04 1,250 1,258
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Rate Maturity Date Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
United States Treasury Notes 5.50% 2/15/08 $ 900 $ 876
United States Treasury STRIPS 0% 2/15/02 to
8/15/05 3,600 2,640
-------
6,167
-------
Total U.S. Government and Agency Obligations
(Identified Cost-- $16,617) 16,149
-----------------------------------------------------------------------------------------------------------------
Repurchase Agreements -- 1.8%
State Street Bank & Trust Company
3.50%, dated 6/30/99, to be repurchased at $973 on 7/1/99
(Collateral: $985 Fannie Mae mortgage-backed securities,
5%, due 1/11/01, value $998)
(Identified Cost -- $973) 973 973
-----------------------------------------------------------------------------------------------------------------
Total Investments-- 99.5% (Identified Cost -- $49,283) 54,508
Other Assets Less Liabilities-- 0.5% 256
-------
NET ASSETS -- 100.0% $54,764
=======
NET ASSET VALUE PER SHARE $12.27
======
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Non-income producing.
(B) 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.
(C) 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.
21
<PAGE>
Portfolio of Investments
Legg Mason Investors Trust, Inc.
June 30, 1999 (Unaudited)
(Amounts in Thousands)
U.S. Small-Capitalization Value Trust
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Common Stocks and Equity Interests -- 93.5%
Aerospace/Defense -- 1.1%
Alliant Techsystems Inc. 5 $ 407(A)
Allied Research Corporation 3 18(A)
EDO Corporation 4 30
ESCO Electronics Corporation 9 109(A)
Herley Industries, Inc. 3 37(A)
International Airline Support Group, Inc. 2 6(A)
Kaman Corporation 14 226
Miltope Group Inc. 1 1(A)
SIFCO Industries, Inc. 3 26
SPACEHAB, Incorporated 6 31(A)
-------
891
-------
Apparel -- 5.0%
Catherines Store Corporation 3 33
Deb Shops, Inc. 2 40
Fruit Of The Loom, Inc. 50 489
Garan, Incorporated 4 119
Genesco Inc. 19 274(A)
Goody's Family Clothing, Inc. 25 281(A)
Jones Apparel Group, Inc. 10 330
Kellwood Company 11 301
Maxwell Shoe Company Inc. 6 54(A)
Nautica Enterprises, Inc. 37 628(A)
Oxford Industries, Inc. 6 161
Paul Harris Stores, Inc. 8 55(A)
Perry Ellis International, Inc. 4 50
PremiumWear, Inc. 1 5
R. G. Barry Corporation 6 49(A)
S&K Famous Brands, Inc. 3 31(A)
Sport-Haley, Inc. 3 14(A)
St. John Knits, Inc. 11 331
Superior Uniform Group Inc. 1 16
Syms Corp. 13 103(A)
Tandy Brands Accessories, Inc. 2 36(A)
The Dress Barn, Inc. 17 264(A)
The Timberland Company 8 565(A)
-------
4,229
-------
Automotive -- 3.0%
Arvin Industries, Inc. 12 466
Autocam Corporation 2 33
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Automotive -- Continued
Bandag, Incorporated 12 $ 427
Barnes Group Inc. 12 265
Collins Industries, Inc. 5 29
Dura Automotive Systems, Inc. 9 307(A)
Durakon Industries, Inc. 4 58(A)
Edelbrock Corporation 1 13
Featherlite Inc. 2 16(A)
Monaco Coach Corporation 4 171(A)
Monro Muffler Brake, Inc. 5 42(A)
Motorcar Parts and Accessories, Inc. 4 24(A)
R & B, Inc. 6 47(A)
Simpson Industries, Inc. 14 139
Strattec Security Corporation 2 78(A)
TBC Corporation 15 102(A)
The Standard Products Company 11 272
-------
2,489
-------
Broadcast/Media -- 0.1%
Courier Corporation 2 35
VDI Media 7 47
-------
82
-------
Chemicals -- 2.7%
A. Schulman, Inc. 19 328
Aceto Corporation N.M. 2
American Vanguard Corporation 1 6
Atlantis Plastics, Inc. 2 32(A)
Balchem Corporation 3 17
Ethyl Corporation 63 376
Georgia Gulf Corporation 22 371
International Specialty Products Inc. 22 224
NL Industries, Inc. 39 433
Northern Technologies International Corporation 2 17
Quaker Chemical Corporation 7 109
Stepan Company 7 185
Sybron Chemicals Inc. 4 69(A)
TETRA Technologies, Inc. 2 20(A)
The General Chemical Group Inc. 15 48
-------
2,237
-------
Commercial/Industrial Services -- 5.6%
ADVO, Inc. 16 330
Alternative Resources Corporation 5 36
</TABLE>
23
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Commercial/Industrial Services -- Continued
BancTec, Inc. 13 $ 239(A)
BCT International, Inc. 3 7(A)
Bell Microproducts Inc. 7 45
BHA Group Holdings, Inc. 4 31
Business Resource Group 1 3
Butler Manufacturing Company 5 137
Cadmus Communications Corporation 5 65
Cameron Ashley Building Products, Inc. 6 67(A)
CDI Corp. 14 463(A)
Children's Comprehensive Services, Inc. 3 22
Cogeneration Corporation of America 5 71(A)
Corrpro Companies 5 45
CORT Business Services Corporation 7 163(A)
Data Processing Resources Corporation 1 33
Electro Rent Corporation 6 65
Ellett Brothers, Inc. 5 40
Ennis Business Forms 12 104
Exponent, Inc. 3 24(A)
FiberMark, Inc. 5 70(A)
Fleming Companies, Inc. 8 92
Franklin Covey Co. 16 116(A)
FTI Consulting, Inc. 3 16(A)
General Employment Enterprises, Inc. 2 8
Gradco Systems, Inc. 5 14(A)
GRC International, Inc. 3 28(A)
Healthcare Services Group, Inc. 3 31(A)
Kennametal Inc. 15 468
Lawson Products, Inc. 6 146
Leasing Solutions, Inc. 4 3(A)
Mail-Well, Inc. 17 270(A)
Mercury Air Group, Inc. 2 11
Merrill Corporation 11 159
Nash-Finch Company 5 52
National Technical Systems, Inc. 6 26
Olsten Corporation 1 4
Perini Corporation 4 23(A)
Personal Group Of America, Inc. 20 199
Physicians' Specialty Corp. 3 24(A)
PrimeSource Corporation 4 22
Prophet 21, Inc. 3 20
Refac 3 17
RemedyTemp, Inc. 7 89
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Commercial/Industrial Services -- Continued
Robertson-Ceco Corporation 4 $ 37(A)
Rush Enterprises, Inc. 2 24(A)
SOS Staffing Services, Inc. 10 50(A)
Staff Leasing, Inc. 11 138
The Turner Corporation 2 42(A)
Veritas DGC Inc. 15 280(A)
Vestcom International, Inc. 7 23
Westaff, Inc. 12 69(A)
Winsloew Furniture, Inc. 5 178(A)
Winston Resources, Inc. 2 10(A)
-------
4,749
-------
Computer Services and Systems -- 1.8%
ANSYS, Inc. 6 59
Autologic Information International, Inc. 1 5(A)
Avant! Corporation 25 313
Boundless Corporation 1 8
CfI ProServices Inc. 4 43
CHS Electronics, Inc. 42 183(A)
Cognitronics Corporation 3 38(A)
Cotelligent, Inc. 1 11
Kentek Information Systems, Inc. 4 29
MSC.Software Corp. 9 54
MTI Technology Corp. 6 81(A)
MTS Systems Corporation 10 118
NeoMagic Corporation 20 164(A)
ONTRACK Data International Inc. 7 35(A)
PSC Inc. 9 87(A)
Saga Systems, Inc. 19 238
Scan-Optics, Inc. 5 23(A)
Software Spectrum, Inc. 1 10
-------
1,499
-------
Construction and Building Materials -- 6.2%
American Homestar Corporation 14 95
Ameron International Corporation 3 115
Aztec Manufacturing Co. 4 40
Baltek Corporation 1 5(A)
Beazer Homes USA, Inc. 5 109(A)
Building Materials Holding Corporation 9 99(A)
Cavalier Homes, Inc. 14 111
Dayton Superior Corporation 4 67
Del Webb Corporation 14 327
</TABLE>
25
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Construction and Building Materials -- Continued
Dominion Homes, Inc. 4 $ 30(A)
Drew Industries Incorporated 9 106
Engle Homes, Inc. 8 111
Fleetwood Enterprises, Inc. 22 571
Homebase, Inc. 23 145
Hovnanian Enterprises, Inc. 16 140(A)
Hughes Supply, Inc. 16 487
International Aluminum Corporation 2 63
Lone Star Industries, Inc. 8 308
M/I Schottenstein Homes, Inc. 6 111
McGrath Rentcorp 4 82
Meadow Valley Corporation 1 4
Miller Building Systems, Inc. 2 9
Oakwood Homes Corporation 20 266
Patrick Industries, Inc. 4 55
Republic Group Incorporated 7 133
Skyline Corporation 7 199
Southern Energy Homes, Inc. 9 46(A)
Standard Pacific Corp. 22 287
The Fortress Group, Inc. 8 11
The Ryland Group, Inc. 11 332
Toll Brothers, Inc. 18 377
U.S. Home Corporation 9 330(A)
Washington Homes, Inc. 3 21(A)
-------
5,192
-------
Consumer Durables -- 2.7%
Boston Acoustics, Inc. 4 67
Catalina Lighting, Inc. 3 14(A)
Central Garden & Pet Company 21 216
Chromcraft Revington, Inc. 8 115(A)
Cobra Electronics Corporation 3 14(A)
Concord Camera Corp. 7 37(A)
Congoleum Corporation 6 44(A)
Conso International Corporation 5 29(A)
EKCO Group, Inc. 13 50(A)
Fedders Corporation 8 55
Flexsteel Industries, Inc. 4 55
Harman International Industries, Incorporated 7 308
Home Products International, Inc. 6 47(A)
Koss Corporation 2 28(A)
Libbey Inc. 12 348
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Consumer Durables -- Continued
Lifetime Hoan Corporation 5 $ 42
Mikasa, Inc. 8 86
O'Sullivan Industry Holdings, Inc. 3 49(A)
Pulaski Furniture Corporation 2 37
Russ Berrie and Company, Inc. 14 346
The L. S. Starrett Company 4 113
The Rowe Companies 9 96
The York Group, Inc. 6 48
-------
2,244
-------
Consumer Non-Durables -- 0.6%
CCA Industries, Inc. 3 5(A)
Educational Development Corporation 3 7
French Fragrances, Inc. 10 76(A)
Jean Philippe Fragrances, Inc. 3 22(A)
Nature's Sunshine Products, Inc. 13 141
Ocular Sciences, Inc. 5 89
Rural/Metro Corporation 11 105(A)
Seattle FilmWorks, Inc. 11 32(A)
The Stephan Co. 3 10
-------
487
-------
Electrical Equipment and Electronics -- 3.6%
Acme Electric Corporation 3 16(A)
Aerovox Incorporated 1 3
Align-Rite International, Inc. 4 57(A)
Amistar Corporation 1 3(A)
Axsys Technologies, Inc. 2 26(A)
Cable Design Technologies Corporation 21 326
CompuCom Systems, Inc. 24 100(A)
Detection Systems, Inc. 3 25
Diodes Incorporated 3 29(A)
Encore Wire Corporation 12 105
General Semiconductor, Inc. 25 229(A)
Graham Corporation 1 10(A)
InaCom Corp. 29 364(A)
LaBarge, Inc. 6 11(A)
MagneTek, Inc. 33 352(A)
Marshall Industries 3 90(A)
Microsemi Corporation 4 40(A)
Nu Horizons Electronics Corp. 7 47(A)
Orbit International Corp. 1 2(A)
Percon Incorporated 3 23(A)
Pioneer-Standard Electronics, Inc. 18 216
Powell Industries, Inc. 8 74(A)
</TABLE>
27
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Electrical Equipment and Electronics -- Continued
Recoton Corporation 9 $ 80(A)
Reliability Incorporated 4 21(A)
RF Monolithics, Inc. 3 27(A)
Richardson Electronics, Ltd. 8 57
Savoir Technology Group, Inc. 3 25(A)
Sparton Corporation 1 8(A)
The Cherry Corporation 5 67
Triumph Group, Inc. 9 227
UCAR International, Inc. 14 343(A)
Video Display Corporation 1 7(A)
Woodhead Industries, Inc. 2 27
-------
3,037
-------
Entertainment and Leisure -- 2.6%
Anchor Gaming 8 394(A)
Arctic Cat, Inc. 20 182
Black Hawk Gaming & Development Company, Inc. 1 7
Boyd Gaming Corporation 45 313(A)
Cannondale Corporation 6 66(A)
Equity Marketing, Inc. 3 30(A)
Holiday RV Superstores, Incorporated 1 2(A)
Inland Entertainment Corporation 3 8(A)
K2 Inc. 12 111
Lady Luck Gaming Corporation 3 14
Lakes Gaming, Inc. 8 84
Lodgian, Inc. 11 73(A)
Play By Play Toys & Novelties, Inc. 4 16(A)
PlayCore, Inc. 3 18(A)
Prime Hospitality Corp. 41 497(A)
Quintel Communications, Inc. 7 10(A)
Scientific Games Holdings Corp. 8 160(A)
Suburban Lodges of America, Inc. 12 75(A)
Winnebago Industries, Inc. 7 166
-------
2,226
-------
Financial Services -- 6.6%
Advanta Corp. 18 320
Amplicon, Inc. 6 87
AMRESCO, INC. 37 236(A)
Arcadia Financial Ltd. 28 219(A)
ARM Financial Group, Inc. 18 151
BankAtlantic Bancorp, Inc. 23 165
Community Bank System, Inc. 2 51
Consumer Portfolio Services 10 16
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Financial Services -- Continued
Corrus Bankshares, Inc. 11 $ 347
CPB Inc. 2 64
Credit Acceptance Corporation 10 62
Delta Financial Corporation 11 67(A)
Downey Financial Corp. 12 254
DVI, Inc. 3 53
Enhance Financial Services Group, Inc. 29 563
Fidelity National Financial, Inc. 23 487
First Alliance Corporation 14 49(A)
First Citizens Bancshares Inc. 3 202
FirstCity Financial Corporation 5 29(A)
FirstFed Financial Corp. 14 277(A)
GBC Bancorp 2 41
Hambrecht & Quist Group 6 226(A)
Hamilton Bancorp Inc. 8 180
Hawthorne Financial Corporation 1 16(A)
Interpool, Inc. 11 143
JWGenesis Financial Corp. 2 28(A)
Litchfield Financial Corporation 2 37
Merchants Bancshares, Inc. 3 64
MetroWest Bank 4 29
MidAmerica Bancorp N.M. 2
National City Bancorporation 7 138
Pacific Crest Capital, Inc. 2 31
Parkvale Financial Corporation 5 102
Radian Group, Inc. 5 255
Resource Bancshares Mortgage Group, Inc. 17 175
Sterling Financial Corporation 6 84
Stifel Financial Corp. 2 20
Sunrise International Leasing Corporation 5 24(A)
TFC Enterprises, Inc. 1 1
USBANCORP, Inc. 10 157
World Acceptance Corporation 14 71(A)
-------
5,523
-------
Food, Beverage and Tobacco -- 3.0%
Cagle's, Inc. 4 65
Cal-Maine Foods, Inc. 5 24
Eagle Food Centers, Inc. 6 18(A)
Fresh America Corporation 3 36
General Cigar Holdings, Inc. 14 108(A)
Herbalife International, Inc. 21 234
M&F Worldwide Corp. 13 103(A)
</TABLE>
29
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Food, Beverage and Tobacco -- Continued
Marsh Supermarkets, Inc. 3 $ 49
Natural Alternatives International, Inc. 4 15(A)
Pilgrim's Pride Corporation 8 237
R.H. Phillips, Inc. 2 5
Richfood Holdings, Inc. 29 509
Rocky Mountain Chocolate Factory, Inc. 2 11(A)
Schweitzer-Mauduit International, Inc. 12 179
Standard Commercial Corporation 7 41
Suprema Specialties, Inc. 1 8(A)
Sylvan, Inc. 3 34
Todhunter International, Inc. 2 17(A)
Universal Corporation 25 702
Weider Nutrition International, Inc. 15 63
WLR Foods, Inc. 12 100
-------
2,558
-------
Gas/Pipeline -- 4.2%
Adams Resources & Energy 3 21
Eagle Geophysical, Inc. 1 1
EnergySouth, Inc. N.M. 8
Friede Goldman International Inc. 5 72
Frontier Oil Corporation 19 131(A)
Gulf Islands Fabrication, Inc. 8 100(A)
Lufkin Industries, Inc. 5 96
Mitcham Industries, Inc. 7 26(A)
National-Oilwell, Inc. 36 506(A)
Penn Virginia Corporation 6 125
Petroleum Development Corporation 5 21
Pool Energy Services Co. 11 213(A)
Pride International, Inc. 36 382(A)
SEACOR Smit Inc. 10 514(A)
Seitel, Inc. 8 134(A)
Tesoro Petroleum Corporation 9 148(A)
Trico Marine Services, Inc. 15 97(A)
Tuboscope Inc. 22 298(A)
Varco International, Inc. 44 482(A)
World Fuel Services Corporation 9 125
-------
3,500
-------
Health Care -- 3.0%
ADAC Laboratories 3 22
Advocat, Inc. 4 8
American Dental Technologies, Inc. 5 19(A)
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Health Care -- Continued
American Physicians Service Group, Inc. 2 $ 6(A)
AmeriPath, Inc. 16 136
Beverly Enterprises, Inc. 77 620(A)
BioSource International, Inc. 1 3(A)
Carematrix Corporation 8 102
Castle Dental Centers, Inc. 5 31
Coast Dental Services, Inc. 6 27
Curative Health Services, Inc. 2 10
Genesis Health Ventures, Inc. 24 72(A)
Healthcare Recoveries, Inc. 7 33
Horizon Health Corporation 4 30(A)
Innovative Clinical Solutions, LTD 15 24
Integrated Health Services, Inc. 35 282(A)
Medstone International, Inc. 4 28(A)
Mesa Laboratories, Inc. 2 8(A)
MIM Corporation 13 33
Monarch Dental Corporation 3 9
Moore Medical Corporation 2 23
Pediatrix Medical Group, Inc. 9 198
ProMedCo Management Company 16 61(A)
Raytel Medical Corporation 6 27(A)
RehabCare Group, Inc. 2 41(A)
Response Oncology, Inc. 9 26(A)
Serologicals Corporation 15 120
Sierra Health Services, Inc. 20 292(A)
Specialty Care Network, Inc. 6 10(A)
Unilab Corporation 28 166(A)
USANA, Inc. 2 16
Utah Medical Products, Inc. 3 26(A)
-------
2,509
-------
Industrial -- 5.1%
ACX Technologies, Inc. 20 322(A)
AGCO Corporation 43 486
Alamo Group Inc. 4 34
American Biltrite, Inc. 3 51
Ampco-Pittsburgh Corporation 7 85
Bairnco Corporation 6 41
Baldwin Technology Company, Inc. 13 39(A)
Bridgeport Machines, Inc. 4 37(A)
Cascade Corporation 9 122
Channell Commercial Corporation 5 49(A)
</TABLE>
31
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Industrial -- Continued
Chart Industries, Inc. 3 $ 22
Commercial Intertech Corp. 11 172
CPAC, Inc. 4 31
DT Industries, Inc. 7 66
Flowserve Corporation 16 311
Gehl Company 4 71(A)
Gentek, Inc. 15 211
Gleason Corporation 6 101
Hardinge, Inc. 7 130
Hirsch International Corp. 5 11(A)
Holly Corporation 6 83
ITEQ, Inc. 19 40(A)
Lindsay Manufacturing Co. 3 44
Lydall, Inc. 4 49(A)
Milacron Inc. 28 514
O.I. Corporation 2 9(A)
Printware, Inc. 2 5(A)
Regal-Beloit Corporation 13 312
Specialty Equipment Companies, Inc. 8 241(A)
Summa Industries 3 38(A)
Supreme Industries, Inc. 5 46(A)
TB Wood's Corporation 4 44
Tech/Ops Sevcon, Inc. 2 28
The Carbide/Graphite Group, Inc. 6 82(A)
Watts Industries, Inc. 20 374
-------
4,301
-------
Insurance -- 8.5%
Acceptance Insurance Companies Inc. 11 161(A)
AmerUs Life Holdings, Inc. 22 594
Amwest Insurance 3 30
Atlantic American Corporation 1 6
Bancinsurance Corporation 2 13(A)
Capital Re Corporation 23 366
Chartwell Re Corporation 7 134
Delphi Financial Group, Inc. 10 359
Donegal Group Inc. 6 71
EMC Insurance Group, Inc. 5 55
Foremost Corporation of America 20 440
Frontier Insurance Group, Inc. 27 417
Harleysville Group Inc. 22 449
Kaye Group Inc. 4 35
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Insurance -- Continued
LandAmerica Financial Group, Inc. 9 $ 264
Life USA Holding, Inc. 14 275
Merchants Group, Inc. 1 22
MMI Companies, Inc. 12 202
Mobile America Corporation 5 17
National Western Life Insurance Company 3 250(A)
Nymagic, Inc. 3 52
Orion Capital Corporation 4 144
Penn Treaty American Corporation 6 137
Penn-America Group, Inc. 6 64
Presidential Life Corporation 1 14
Professionals Group, Inc. 4 135
PXRE Corporation 9 165
SCPIE Holdings Inc. 4 137
Selective Insurance Group, Inc. 21 402
Standard Management Corporation 5 32(A)
Stewart Information Services Corporation 11 224
The Centris Group, Inc. 8 78
The Commerce Group, Inc. 26 636
The Midland Company 3 86
The Navigators Group, Inc. 6 92(A)
Trenwick Group Inc. 6 158
Unico American Corporation 4 43
XL Capital Ltd. 7 377
-------
7,136
-------
Metals/Mining -- 6.5%
Alltrista Corporation 6 191(A)
Amcast Industrial Corporation 7 113
Armco Inc. 78 517(A)
Atchison Casting Corporation 5 56(A)
Bayou Steel Corporation 9 35(A)
Carpenter Technology Corporation 21 611
Chase Industries, Inc. 11 93(A)
Citation Corporation 11 182(A)
Cleveland-Cliffs Inc. 8 272
Commercial Metals Company 11 313
Easco, Inc. 2 18
Fansteel Inc. 2 10
Friedman Industries, Incorporated 5 19
Intermet Corporation 19 281
Lindberg Corporation 4 41
</TABLE>
33
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Metals/Mining -- Continued
Metals USA, Inc. 28 $ 357(A)
National Steel Corporation 23 190
Niagara Corporation 4 21(A)
Northwest Pipe Company 4 73(A)
Penn Engineering & Manufacturing Corp. 4 90
Quanex Corporation 10 294
Roanoke Electric Steel Corporation 3 57
ROHN Industries, Inc. 34 47(A)
RTI International Metals, Inc. 15 217(A)
Shiloh Industries, Inc. 4 55(A)
Special Metals Corporation 11 65(A)
Steel Technologies Inc. 8 72
Texas Industries, Inc. 15 562
The Shaw Group Inc. 8 125(A)
Titanium Metals Corporation 17 187
Universal Stainless & Alloy Products, Inc. 4 25(A)
Webco Industries, Inc. 4 22(A)
Wolverine Tube, Inc. 10 256(A)
Zemex Corporation 3 17(A)
-------
5,484
-------
Miscellaneous Manufacturing -- 4.5%
A.O. Smith Corporation 9 249
Bacou USA, Inc. 8 142
Badger Paper Mills, Inc. 2 11
Brown & Sharpe Manufacturing Company 10 54
Coachmen Industries Inc. 2 56
Columbus McKinnon Corporation 8 192
Core Materials Corporation 2 6(A)
Denali Incorporated 3 23
Griffon Corporation 23 178(A)
Hexcel Corporation 23 236(A)
Jason Incorporated 11 85(A)
MascoTech, Inc. 34 572
Metrika Systems Corporation 4 35(A)
MFRI, Inc. 1 6(A)
NACCO Industries, Inc. 6 448
OroAmerica, Inc. 4 27
Park-Ohio Holdings Corp. 7 112
Penn Engineering & Manufacturing Corp. 4 94
Printronix, Inc. 4 56
Q.E.P. Co., Inc. 2 15(A)
Raven Industries, Inc. 4 56
Riviera Tool Company 1 7
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Miscellaneous Manufacturing -- Continued
Robbins & Myers, Inc. 1 $ 11
RPC, Inc. 4 37
Scotsman Industries, Inc. 5 110
Standex International Corporation 8 224
The Dexter Corporation 13 510
The Eastern Company 1 24
TransTechnology Corporation 4 77
U.S. Office Products Company 11 61(A)
Vallen Corporation 1 21
Williams Controls, Inc. 5 14
-------
3,749
-------
Process Industries -- 1.4%
Buckeye Technologies Inc. 27 403(A)
P.H. Glatfelter Company 7 97
Rock-Tenn Company 22 365
Silgan Holdings Inc. 13 258(A)
The Anderson's Inc. 6 78
-------
1,201
-------
Real Estate -- 0.2%
AMREP Corporation 5 27(A)
Bluegreen Corporation 17 94(A)
DeWolfe Companies, Inc. 2 15(A)
Grubb & Ellis Company 14 67(A)
ILX Resorts Incorporated 1 2(A)
-------
205
-------
Restaurants -- 2.1%
Ark Restaurants Corp. 3 29(A)
Blimpie International, Inc. 6 16
CKE Restaurants, Inc. 39 626
Cooker Restaurant Corporation 6 36
ELXSI Corporation 3 28(A)
Landry's Seafood Restaurants, Inc. 22 175(A)
Lone Star Steakhouse & Saloon, Inc. 24 232(A)
Luby's, Inc. 8 120
Main Street & Main Inc. 8 26(A)
Max & Erma's Restaurants, Inc. 2 13(A)
Piccadilly Cafeterias, Inc. 4 35
Rainforest Cafe, Inc. 19 94(A)
Ryan's Family Steak Houses, Inc. 29 336(A)
Sizzler International, Inc. 12 26(A)
-------
1,792
-------
</TABLE>
35
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Retail -- 2.6%
Barnett Inc. 12 $ 91(A)
Boise Cascade Office Products Corporation 30 352(A)
Cole National Corporation 11 88(A)
Duckwall-ALCO Stores, Inc. 4 37(A)
EZCORP, Inc. 7 50
Finlay Enterprises, Inc. 7 95(A)
Friedman's, Inc. 13 109
Funco, Inc. 3 61(A)
Garden Ridge Corporation 13 64(A)
Government Technology Services Inc. 2 9
Jan Bell Marketing, Inc. 11 39
Jos. A. Bank Clothiers, Inc. 1 4
Media Arts Group, Inc. 8 34
Michael Anthony Jewelers, Inc. 2 6
Movie Star, Inc. 9 15
Pamida Holdings Corporation 1 11(A)
Pier 1 Imports, Inc. 14 161
Piercing Pagoda, Inc. 3 40(A)
RDO Equipment Co. 7 62(A)
REX Stores Corporation 5 137(A)
Specialty Catalog Corp. 1 5(A)
Sport Supply Group, Inc. 2 15(A)
Systemax, Inc. 17 214
The Bon-Ton Stores, Inc. 12 74(A)
Value City Department Stores, Inc. 20 240
Wilmar Industries, Inc. 10 129
Wolohan Lumber Co. 3 39
-------
2,181
-------
Technology -- 0.4%
Del Global Technologies Corp. 4 37
Equinox Systems, Inc. 2 22(A)
Excel Technology, Inc. 5 62(A)
Hurco Companies, Inc. 4 21(A)
K-Tron International, Inc. 2 37(A)
Splash Technology Holdings, Inc. 11 74
ThermoQuest Corporation 7 88(A)
Vivid Technologies, Inc. 2 7(A)
-------
348
-------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Telecommunications -- 0.8%
Applied Signal Technology, Inc. 6 $ 55(A)
Blonder Tongue Laboratories, Inc. 6 34(A)
CellStar Corporation 51 402
Comdial Corporation 4 26
Communications Systems, Inc. 3 40
Hector Communications Corporation 1 12(A)
InterDigital Communications Corporation 2 11
Tollgrade Communications, Inc. 2 32(A)
Vertex Communications Corporation 4 48(A)
-------
660
-------
Textiles -- 2.2%
Burlington Industries, Inc. 45 407(A)
Concord Fabrics Inc. 2 9(A)
Decorator Industries, Inc. 2 16
Dyersburg Corporation 8 10
Galey & Lord, Inc. 9 38(A)
Guilford Mills, Inc. 17 175
Interface, Inc. 40 342
Lakeland Industries, Inc. 1 6(A)
Pillowtex Corporation 11 173
Quaker Fabric Corporation 2 8(A)
Synthetic Industries, Inc. 5 139(A)
The Dixie Group, Inc. 9 76
Unifi, Inc. 10 202
UniFirst Corporation 12 228
-------
1,829
-------
Transportation -- 5.8%
Amerco 1 23
America West Holdings Corporation 31 581(A)
Amtran, Inc. 2 42
Arkansas Best Corporation 14 141(A)
Arnold Industries, Inc. 19 287
Boyd Bros. Transportation Inc. 2 24(A)
Circle International Group, Inc. 7 142
Consolidated Delivery & Logistics, Inc. 5 18(A)
Consolidated Freightways Corporation 17 218(A)
Covenant Transport, Inc. 11 176(A)
Dynamex Inc. 2 5(A)
Frozen Food Express Industries, Inc. 9 69
Genesee & Wyoming Inc. 3 30(A)
</TABLE>
37
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Transportation -- Continued
Hawaiian Airlines, Inc. 11 $ 29
Hvide Marine Incorporated 11 24(A)
J.B. Hunt Transport Services, Inc. 27 431
Kitty Hawk, Inc. 12 96(A)
Offshore Logistics, Inc. 16 176(A)
Old Dominion Freight Line, Inc. 5 62(A)
P.A.M. Transportation Services, Inc. 6 61(A)
Pittison BAX Group 14 137
Providence and Worcester Railroad Company 3 37
RailTex, Inc. 7 97(A)
Roadway Express, Inc. 15 289
Smithway Motor Xpress Corp. 3 27(A)
The Greenbrier Companies, Inc. 11 112
Tower Air, Inc. 1 3
Transport Corporation of America, Inc. 5 62(A)
U.S. Xpress Enterprises, Inc. 11 119(A)
USA Truck, Inc. 5 43(A)
USFreightways Corporation 17 764
Varlen Corporation 5 220
Yellow Corporation 19 328(A)
-------
4,873
-------
Utilities -- 1.6%
Bangor Hydro- Electric Company 5 73
CMP Group, Inc. 3 89
El Paso Electric Company 37 326(A)
Maine Public Service Company 1 22
Public Service Company of New Mexico 30 592
TNP Enterprises, Inc. 7 239
-------
1,341
-------
Total Common Stocks and Equity Interests
(Identified Cost -- $78,857) 78,552
-----------------------------------------------------------------------------------------------------------------
Repurchase Agreements -- 7.1%
Goldman, Sachs & Co.
5%, dated 6/30/99, to be repurchased at $2,963 on 7/1/99
(Collateral: $3,277 Fannie Mae mortgage-backed securities, 6%,
due 2/1/29, value $3,075) $2,963 2,963
Merrill Lynch & Co., Inc.
4.80%, dated 6/30/99, to be repurchased at $2,963 on 7/1/99
(Collateral: $3,181 Fannie Mae mortgage-backed securities,
6.50%, due 4/1/29, value $3,068) 2,962 2,962
-------
Total Repurchase Agreements (Identified Cost-- $5,925) 5,925
-----------------------------------------------------------------------------------------------------------------
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
Value
-----------------------------------------------------------------------------------------------------------------
<S><C>
Total Investments-- 100.6% (Identified Cost-- $84,782) $84,477
Other Assets Less Liabilities-- (0.6)% (472)
-------
NET ASSETS -- 100.0% $84,005
=======
NET ASSET VALUE PER SHARE:
PRIMARY CLASS $9.34
=====
NAVIGATOR CLASS $9.45
=====
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Non-income producing.
N.M. -- Not Meaningful.
39
<PAGE>
Investment Manager
Legg Mason Fund Adviser, Inc. Quarterly Report
Baltimore, MD June 30, 1999
Investment Advisers Legg Mason
For American Leading Companies Trust: Investors
Legg Mason Fund Adviser, Inc. Trust, Inc.
Baltimore, MD
For Balanced Trust: American Leading
Bartlett & Co. Companies Trust
Cincinnati, OH
Balanced Trust
For U.S. Small-Cap Value Trust:
Brandywine Asset Management,Inc. U.S. Small-Cap
Wilmington, DE Value Trust
Board of Directors Primary Class
John F. Curley, Jr., Chairman
Edward A. Taber, III, President [LEGG
Richard G. Gilmore MASON
Arnold L. Lehman FUNDS
Dr. Jill E. McGovern LOGO]
T. A. Rodgers HOW TO INVEST(SM)
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
8/99
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