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Previous: MARSHFIELD ASSOCIATES/DC/ /ADV, 13F-HR, 1999-12-15 |
Next: TRANSTEXAS GAS CORP, 10-Q, 1999-12-15 |
- --------------------------------------------------------------------------------
Semi-Annual Report
September 30, 1999
Legg Mason Investors Trust, Inc.
U.S. Small-Cap Value Trust
Navigator Class
- --------------------------------------------------------------------------------
[LEGG MASON FUNDS LOGO APPEARS HERE]
The Art of Investing (SM)
- --------------------------------------------------------------------------------
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
To Our Shareholders,
We are pleased to provide you with Legg Mason Investors Trust's semi-annual
report for the Navigator Class of the U.S. Small-Capitalization Value Trust.
The following table summarizes key statistics for the Navigator Class of
shares of the Fund, as of September 30, 1999:
<TABLE>
<CAPTION>
3-Month 12-Month
Total Return(1) Total Return(1)
--------------------- --------------------
<S> <C> <C>
U.S. Small-Capitalization Value Trust -11.11% +7.53%
S&P 500 Stock Composite Index -6.25% +27.80%
Russell 2000 Index -6.32% +19.07%
</TABLE>
On the following pages, the portfolio managers for the Fund discuss the
investment outlook for the Fund. Long-term investment results for the Fund are
shown in the Performance Information section of this report.
With less than three months to go until the end of the century, attention
continues to focus on the Year 2000 issue. As you know, the Year 2000 issue is a
computer programming problem that affects the ability of computers to correctly
process dates of January 1, 2000, and beyond. We believe the Year 2000 date
change will have no adverse impact on Legg Mason's ability to service its
clients. We are on target to complete this important project. Industry-wide
testing sponsored by the Securities Industry Association ("SIA") was conducted
in March and April of 1999, with Legg Mason, its brokerage subsidiaries and
primary vendors actively participating and achieving positive results.
Legg Mason's Year 2000 Project has four phases. The Inventory Phase and the
Assessment Phase are already complete. The Remediation Phase and the Testing
Phase are currently underway and on target. Renovation and replacement of
existing internal systems, where necessary, is also complete, and all of our
critical vendors have certified their Year 2000 compliance. Most noncritical
vendors have also certified their Year 2000 compliance, and we expect the
remaining vendors to certify their compliance shortly. Although individual
customer testing will not be available, we have successfully tested models
representing all forms of accounts maintained at Legg Mason, including the
Trust's shareholder accounts.
Sincerely,
/s/ Edward A. Taber, III
Edward A. Taber, III
President
October 27, 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.
<PAGE>
Portfolio Managers' Comments
U.S. Small-Capitalization Value Trust
For the quarter, the portfolio was down -11.1%, compared to declines of -7.8%
for the Russell 2000 Value, -6.3% for the Russell 2000, and -6.3% for the S&P
500. For the year to date, the portfolio has returned -2.6%, compared to returns
of -3.0% for the Russell 2000 Value, 2.4% for the Russell 2000, and 5.4% for the
S&P 500.
The third quarter was a tough quarter for all segments of the U.S. equity
market. Although interest rates ended the quarter almost exactly where they were
as of June 30, investors were concerned by the sharp increase over the last
twelve months: the long bond had risen from a low of 4.7% in early October 1998
to just over 6.0% at the end of this quarter. The other areas of investor
concern were the U.S. trade deficit, which continued to expand, and the steep
decline in the dollar versus the yen. These related events were viewed as
potential signals of resurgent inflation. With these worries, investors backed
away from U.S. equities across the board, as both large-caps and small-caps fell
and prices declined in almost all sectors. Value stocks were down somewhat more
than the rest of the equity market, as cyclical stocks lagged and technology
surged. The market has continued to become more volatile, with larger swings up
and down as well as rapid changes in market leadership.
One of the best performing sectors in small-cap for the quarter and year to
date was the energy and oil services area. These stocks benefited from crude oil
prices reaching the $25 per barrel level at the end of the quarter after having
dropped to $12 at the end of 1998. Early in the year, we had increased our oil
services holdings as the low oil price levels drove the stocks to significant
valuation discounts. Although we do not forecast oil prices, we believe our
disciplined investment process helps us to identify stocks with attractive
valuations where fundamentals are expected to improve rather than deteriorate.
In this case, we felt oil prices were more likely to rise than decline. Because
we held a larger than benchmark weight in these stocks, the sector provided a
strong positive contribution to portfolio performance. We have begun to reduce
our oil-related holdings as many of these stocks have reached our sell targets.
Retail stocks also provided a positive contribution to the portfolio versus the
benchmarks. Apparel stocks, in particular, had become significantly undervalued
due to concerns about global economic turmoil impacting the U.S. economy. With
the U.S. consumer very active in 1999, these stocks have rallied.
The biggest negative impact on the portfolio, both in the quarter and in
1999, came from the technology sector. Semiconductor and networking stocks were
expensively valued coming into the year, so the portfolio had low weightings in
these industries. However, these companies have been market favorites and
delivered strong stock performance. The health care sector has also been
difficult for the portfolio. Although we held only a small weighting in
hospitals, HMOs, geriatric care providers and rehabilitation centers, our stocks
have been badly hurt by changes in Medicare reimbursement.
We believe small-cap value stocks remain at significant valuation discounts
to the rest of the U.S. equity markets. The sharp rally in these stocks in the
second quarter did little to erase this deep undervaluation. Corporate investors
continue to recognize and act upon these stocks' attractive valuations.
Acquisitions, leveraged buyouts, and stock buy-backs have been at very high
levels throughout the year. At some point, this corporate activity will
influence investors, who have mostly ignored
2
<PAGE>
Portfolio Managers' Comments--Continued
small-cap value stocks over the last twelve months. As we experienced in the
second quarter, when investors come to realize the opportunities these stocks
represent, large, swift price gains can result. Given the depth of their
valuation discount, we feel the rebound can also be sustained over a much longer
time period than just a single quarter.
As always, we welcome the opportunity to discuss the portfolio and this
report in more detail. If you have any questions or comments, please contact us.
Henry F. Otto Steven M. Tonkovich
Managing Director Managing Director
October 27, 1999
DJIA 10394.89
3
<PAGE>
Performance Information
Legg Mason Investors Trust, Inc.
Total Returns for One Year and Life of Class, as of September 30, 1999
The returns shown are based on historical results and are not intended to
indicate future performance. Total return measures investment performance in
terms of appreciation or depreciation in net asset value per share plus
dividends and any capital gain distributions. It assumes that dividends and
distributions were reinvested at the time they were paid. The investment return
and principal value of an investment in the Fund 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 of the Legg Mason Investors Trust offers two classes of
shares: Primary Class and Navigator Class. Information about the Primary Class,
offered to retail investors, is contained in a separate report to its
shareholders. The Navigator Class shares of American Leading Companies were
redeemed on December 3, 1998. The Navigator Class of Balanced Trust has not
commenced operations.
The Fund's total returns as of September 30, 1999, were as follows:
U.S. Small-Cap
Value Trust
- --------------------------------------------------------------------------------
Average Annual Total Return
Navigator Class:
One Year +7.53%
Life of Class(A) -11.28%
Cumulative Total Return
Navigator Class:
One Year +7.53%
Life of Class(A) -14.26%
- --------------------------------------------------------------------------------
(A) The inception date for the Navigator Class of U.S. Small-Cap Value Trust
was June 19, 1998.
4
<PAGE>
Performance Information -- Continued
U.S. Small-Capitalization Value Trust
Selected Portfolio Performance*
Strong performers for the 3rd quarter 1999
- --------------------------------------------------------------------------------
1. Westaff, Inc. +209.6%
2. Specialty Care Network, Inc. +96.4%
3. Tollgrade Communications, Inc. +76.2%
4. Lady Luck Gaming Corporation +73.0%
5. Education Development Corporation +71.4%
Weak performers for the 3rd quarter 1999
- --------------------------------------------------------------------------------
1. Integrated Health Services, Inc. -80.5%
2. FirstCity Financial Corporation -72.7%
3. Pilgrim's Pride Corporation -71.0%
4. Response Oncology, Inc. -68.1%
5. CHS Electronics, Inc. -67.1%
*Securities held for the entire quarter.
5
<PAGE>
Statement of Net Assets
Legg Mason Investors Trust, Inc.
September 30, 1999 (Unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
U.S. Small-Capitalization Value Trust
Shares/Par Value
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND EQUITY INTERESTS -- 97.6%
Aerospace/Defense -- 1.2%
Alliant Techsystems Inc. 5 $ 326(A)
Allied Research Corporation 3 16(A)
EDO Corporation 4 24
ESCO Electronics Corporation 4 40(A)
GenCorp Inc. 13 245
Herley Industries, Inc. 3 40(A)
International Airline Support Group, Inc. 2 6(A)
Kaman Corporation 14 184
SIFCO Industries, Inc. 3 22
SPACEHAB, Incorporated 6 30(A)
--------
933
--------
Apparel -- 3.5%
Bernard Chaus, Inc. 15 41(A)
Catherines Store Corporation 3 35(A)
Deb Shops, Inc. 4 84
Fruit Of The Loom, Inc. 14 47(A)
Garan, Incorporated 4 121
Genesco Inc. 19 235(A)
Goody's Family Clothing, Inc. 25 198(A)
Hartmarx Corporation 12 49(A)
Kellwood Company 13 295
Maxwell Shoe Company Inc. 6 53(A)
Nautica Enterprises, Inc. 37 600(A)
One Price Clothing Stores, Inc. 3 11(A)
Oxford Industries, Inc. 6 123
Paul Harris Stores, Inc. 8 32(A)
Perry Ellis International, Inc. 4 40(A)
PremiumWear, Inc. 1 5(A)
R. G. Barry Corporation 6 36(A)
S&K Famous Brands, Inc. 3 23(A)
Sport-Haley, Inc. 3 14(A)
Superior Uniform Group Inc. 1 15
Syms Corp. 13 94(A)
Tandy Brands Accessories, Inc. 3 44(A)
The Cato Corporation 12 169
The Dress Barn, Inc. 17 303(A)
--------
2,667
--------
Automotive -- 3.0%
Arvin Industries, Inc. 13 415
Autocam Corporation 2 41
Bandag, Incorporated 12 394
6
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- ------------------------------------------------------------------------------------------------------------------------
Automotive -- Continued
Bandag, Incorporated - Class A 4 $ 91
Barnes Group Inc. 12 245
Collins Industries, Inc. 5 34
Dura Automotive Systems, Inc. 9 222(A)
Edelbrock Corporation 2 34(A)
Featherlite Inc. 4 18(A)
Monaco Coach Corporation 6 148(A)
Monro Muffler Brake, Inc. 5 35(A)
R & B, Inc. 6 32(A)
Simpson Industries, Inc. 14 150
Strattec Security Corporation 2 80(A)
TBC Corporation 15 100(A)
The Standard Products Company 7 248
--------
2,287
--------
Broadcast/Media -- 0.1%
Courier Corporation 2 36
VDI Media 7 71(A)
--------
107
--------
Chemicals -- 3.3%
A. Schulman, Inc. 19 331
Aceto Corporation 1 10
Albemarle Corporation 13 264
American Vanguard Corporation 1 5
Atlantis Plastics, Inc. 2 31(A)
Balchem Corporation 3 17
Chemfab Corporation 1 10(A)
Ethyl Corporation 85 329
Georgia Gulf Corporation 22 388
Hawkins Chemical, Inc. 3 24
International Specialty Products Inc. 22 219(A)
NL Industries, Inc. 39 491
Northern Technologies International Corporation 2 16
Quaker Chemical Corporation 7 111
Stepan Company 7 166
Sybron Chemicals Inc. 4 59(A)
TETRA Technologies, Inc. 2 22(A)
The General Chemical Group Inc. 15 52
--------
2,545
--------
Commercial/Industrial Services -- 6.1%
ADVO, Inc. 16 317(A)
Alternative Resources Corporation 5 26(A)
7
<PAGE>
Shares/Par Value
- ------------------------------------------------------------------------------------------------------------------------
Commercial/Industrial Services -- Continued
Avis Rent A Car, Inc. 10 $ 211(A)
BCT International, Inc. 3 6(A)
Bell Microproducts Inc. 7 56(A)
BHA Group Holdings, Inc. 4 37
Business Resource Group 1 4(A)
Butler Manufacturing Company 5 129
Cadmus Communications Corporation 5 52
Cameron Ashley Building Products, Inc. 6 58(A)
CDI Corp. 14 371(A)
Children's Comprehensive Services, Inc. 4 30(A)
Cogeneration Corporation of America 5 119(A)
Corrpro Companies 5 31(A)
CORT Business Services Corporation 7 157(A)
Daisytek International Corporation 6 77(A)
Electro Rent Corporation 6 75(A)
Ellett Brothers, Inc. 5 27
Ennis Business Forms 12 108
Exponent, Inc. 3 17(A)
FiberMark, Inc. 5 68(A)
Fleming Companies, Inc. 8 78
Franklin Covey Co. 16 121(A)
FTI Consulting, Inc. 3 14(A)
General Employment Enterprises, Inc. 2 7
Gradco Systems, Inc. 5 10(A)
GRC International, Inc. 3 29(A)
Healthcare Services Group, Inc. 6 50(A)
International Telecommunication Data Systems, Inc. 1 12(A)
Kennametal Inc. 15 391
Lawson Products, Inc. 6 125
Mail-Well, Inc. 17 232(A)
Mercury Air Group, Inc. 6 34(A)
Merrill Corporation 11 219
Nash-Finch Company 5 36
National Technical Systems, Inc. 6 20
Olsten Corporation 1 7
Perini Corporation 4 14(A)
Personal Group Of America, Inc. 20 124(A)
Physicians' Specialty Corp. 3 25(A)
PrimeSource Corporation 4 21
Prophet 21, Inc. 3 26(A)
Refac 3 11(A)
RemedyTemp, Inc. 7 95(A)
8
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- ------------------------------------------------------------------------------------------------------------------------
Commercial/Industrial Services -- Continued
Robertson-Ceco Corporation 4 $ 28(A)
Rush Enterprises, Inc. 2 23(A)
Schawk, Inc. 10 96
Service Experts, Inc. 10 100(A)
SOS Staffing Services, Inc. 10 55(A)
Staff Leasing, Inc. 11 107(A)
Stewart Enterprises, Inc. 36 218
Thomas Group, Inc. 2 13(A)
Veritas DGC Inc. 15 295(A)
Vestcom International, Inc. 7 17(A)
Westaff, Inc. 12 71(A)
Winston Resources, Inc. 2 10(A)
--------
4,710
--------
Computer Services and Systems -- 1.8%
ANSYS, Inc. 6 58(A)
Autologic Information International, Inc. 1 3(A)
Avant! Corporation 24 432(A)
Boundless Corporation 1 5(A)
CfI ProServices Inc. 4 37(A)
CHS Electronics, Inc. 42 60(A)
Cognitronics Corporation 4 42(A)
Cotelligent, Inc. 1 5(A)
Kentek Information Systems, Inc. 4 30
MAI Systems Corporation 4 4(A)
MSC.Software Corp. 9 62(A)
MTS Systems Corporation 10 101
NeoMagic Corporation 20 151(A)
ONTRACK Data International Inc. 7 41(A)
Paravant Inc. 1 3(A)
Programmer's Paradise, Inc. 2 12(A)
PSC Inc. 9 71(A)
Saga Systems, Inc. 19 270(A)
Scan-Optics, Inc. 5 15(A)
Software Spectrum, Inc. 1 9(A)
--------
1,411
--------
Construction and Building Materials -- 7.5%
American Homestar Corporation 14 53(A)
Ameron International Corporation 3 122
Aztec Manufacturing Co. 4 43
Baltek Corporation 1 4(A)
Beazer Homes USA, Inc. 5 87(A)
9
<PAGE>
Shares/Par Value
- -------------------------------------------------------------------------------------------------------------------------
Construction and Building Materials -- Continued
Building Materials Holding Corporation 9 $ 86(A)
Cavalier Homes, Inc. 14 67
Champion Enterprises, Inc. 27 242(A)
D.R. Horton, Inc. 21 267
Dayton Superior Corporation 4 61(A)
Del Webb Corporation 14 301(A)
Dominion Homes, Inc. 4 24(A)
Drew Industries Incorporated 9 78(A)
Engle Homes, Inc. 8 84
Fleetwood Enterprises, Inc. 22 436
Homebase, Inc. 23 91(A)
Hovnanian Enterprises, Inc. 16 124(A)
Hughes Supply, Inc. 16 357
International Aluminum Corporation 2 63
JLK Direct Distribution Inc. 7 49(A)
Lone Star Industries, Inc. 4 185
M/I Schottenstein Homes, Inc. 6 99
McGrath Rentcorp 8 135
Meadow Valley Corporation 1 4(A)
Miller Building Systems, Inc. 2 9(A)
NCI Building Systems, Inc. 10 169(A)
Oakwood Homes Corporation 32 144
Palm Harbor Homes, Inc. 8 104(A)
Patrick Industries, Inc. 4 44
Pulte Corporation 36 774
Republic Group Incorporated 7 103
Skyline Corporation 7 175
Southern Energy Homes, Inc. 9 23(A)
Standard Pacific Corp. 22 228
The Fortress Group, Inc. 8 12(A)
The Ryland Group, Inc. 11 255
Toll Brothers, Inc. 20 385(A)
U.S. Home Corporation 9 259(A)
Washington Homes, Inc. 4 23(A)
--------
5,769
--------
CONSUMER DURABLES -- 2.8%
Boston Acoustics, Inc. 4 57
Catalina Lighting, Inc. 3 12(A)
Central Garden & Pet Company 21 161(A)
Chromcraft Revington, Inc. 8 100(A)
Cobra Electronics Corporation 3 11(A)
10
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -----------------------------------------------------------------------------------------------------------------------
Consumer Durables -- Continued
Concord Camera Corp. 7 $ 60(A)
Congoleum Corporation 6 28(A)
Conso International Corporation 5 26(A)
Fedders Corporation 20 121
Flexsteel Industries, Inc. 4 55
Harman International Industries, Incorporated 7 294
Home Products International, Inc. 6 58(A)
Koss Corporation 2 24(A)
LADD Furniture, Inc. 3 64(A)
Libbey Inc. 12 355
Lifetime Hoan Corporation 7 51
Mikasa, Inc. 8 89
O'Sullivan Industry Holdings, Inc. 3 44(A)
Pulaski Furniture Corporation 2 27
Royal Appliance Mfg. Co. 1 7(A)
Russ Berrie and Company, Inc. 14 293
The L. S. Starrett Company 4 104
The Rowe Companies 9 85
The York Group, Inc. 6 24
--------
2,150
--------
Consumer Non-Durables -- 0.6%
CCA Industries, Inc. 3 6(A)
Educational Development Corporation 3 12
French Fragrances, Inc. 10 70(A)
Inter Parfums, Inc. 3 25(A)
Nature's Sunshine Products, Inc. 13 127
Ocular Sciences, Inc. 5 99(A)
Rural/Metro Corporation 11 72(A)
Seattle FilmWorks, Inc. 11 43(A)
Styling Technology Corporation 2 24(A)
The Stephan Co. 3 10
--------
488
--------
Electrical Equipment and Electronics -- 4.2%
Acme Electric Corporation 3 17(A)
Aerovox Incorporated 1 3(A)
Align-Rite International, Inc. 4 77(A)
Amistar Corporation 1 2(A)
Axsys Technologies, Inc. 2 24(A)
Cable Design Technologies Corporation 21 481(A)
Caere Corporation 7 52(A)
Comptek Research, Inc. 2 13(A)
11
<PAGE>
Shares/Par Value
- ------------------------------------------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT AND ELECTRONICS -- CONTINUED
CompuCom Systems, Inc. 24 $ 90(A)
Detection Systems, Inc. 3 31(A)
Diodes Incorporated 3 19(A)
Encore Wire Corporation 12 105(A)
General Semiconductor, Inc. 25 259(A)
Graham Corporation 1 7(A)
InaCom Corp. 29 265(A)
LaBarge, Inc. 6 8(A)
MagneTek, Inc. 33 298(A)
Marshall Industries 3 91(A)
Microsemi Corporation 4 32(A)
Nu Horizons Electronics Corp. 7 53(A)
Percon Incorporated 3 28(A)
Pioneer-Standard Electronics, Inc. 18 260
Powell Industries, Inc. 8 69(A)
Recoton Corporation 9 59(A)
Reliability Incorporated 4 14(A)
RF Monolithics, Inc. 3 29(A)
Richardson Electronics, Ltd. 8 70
Savoir Technology Group, Inc. 5 45(A)
Sparton Corporation 1 8(A)
The Cherry Corporation 5 61(A)
The Lamson & Sessions Co. 8 39(A)
Triumph Group, Inc. 9 236(A)
UCAR International, Inc. 14 310(A)
Video Display Corporation 1 6(A)
Woodhead Industries, Inc. 2 22
--------
3,183
--------
Entertainment and Leisure -- 3.3%
Anchor Gaming 8 488(A)
Arctic Cat, Inc. 20 195
Black Hawk Gaming & Development Company, Inc. 1 5(A)
Boyd Gaming Corporation 45 268(A)
Cannondale Corporation 6 52(A)
Equity Marketing, Inc. 3 43(A)
GTECH Holdings Corporation 20 422(A)
Holiday RV Superstores, Incorporated 1 3(A)
Inland Entertainment Corporation 3 9(A)
K2 Inc. 12 109
Lady Luck Gaming Corporation 3 24(A)
12
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- ------------------------------------------------------------------------------------------------------------------------
Entertainment and Leisure -- Continued
Lakes Gaming, Inc. 8 $ 74(A)
Lodgian, Inc. 16 58(A)
PlayCore, Inc. 3 25(A)
Prime Hospitality Corp. 41 331(A)
Scientific Games Holdings Corp. 8 162(A)
Suburban Lodges of America, Inc. 12 66(A)
Travis Boats & Motors, Inc. 1 14(A)
Winnebago Industries, Inc. 7 177
--------
2,525
--------
Financial Services -- 6.9%
Advanta Corp. 18 259
Alliance Bancorp of New England, Inc. 1 10
Amplicon, Inc. 6 75
AMRESCO, INC. 37 110(A)
Arcadia Financial Ltd. 28 122(A)
BankAtlantic Bancorp, Inc. 26 146
BSB Bancorp, Inc. 7 163
Community Bank System, Inc. 2 55
Consumer Portfolio Services 10 9(A)
Corrus Bankshares, Inc. 11 279
CPB Inc. 2 55
Credit Acceptance Corporation 10 62(A)
Delta Financial Corporation 11 53(A)
Downey Financial Corp. 12 233
DVI, Inc. 3 51(A)
Enhance Financial Services Group, Inc. 29 504
Fidelity National Financial, Inc. 23 352
First Alliance Corporation 14 30(A)
First Citizens Bancshares Inc. 6 453
First Republic Bank 3 82(A)
FirstCity Financial Corporation 5 8(A)
FirstFed Financial Corp. 14 250(A)
GBC Bancorp 2 39
Hambrecht & Quist Group 6 299(A)
Hamilton Bancorp Inc. 8 159(A)
Hawthorne Financial Corporation 1 13(A)
Interpool, Inc. 15 116
Jefferies Group, Inc. 6 129
JWGenesis Financial Corp. 2 32(A)
Litchfield Financial Corporation 2 53
13
<PAGE>
Shares/Par Value
- -----------------------------------------------------------------------------------------------------------------------
Financial Services -- Continued
Merchants Bancshares, Inc. 3 $ 67
MetroWest Bank 4 28
MidAmerica Bancorp 2 48
National City Bancorporation 7 116
Pacific Crest Capital, Inc. 2 25
Parkvale Financial Corporation 5 89
Radian Group, Inc. 5 224
Resource Bancshares Mortgage Group, Inc. 17 85
Sterling Financial Corporation 6 82(A)
Stifel Financial Corp. 2 19
Sunrise International Leasing Corporation 5 27(A)
TFC Enterprises, Inc. 10 26(A)
Union Acceptance Corporation 1 7(A)
USBANCORP, Inc. 10 135
World Acceptance Corporation 14 76(A)
--------
5,255
--------
Food, Beverage and Tobacco -- 2.9%
Cagle's, Inc. 4 59
Cal-Maine Foods, Inc. 5 17
Eagle Food Centers, Inc. 6 12(A)
Fresh America Corporation 3 16(A)
General Cigar Holdings, Inc. 14 93(A)
Herbalife International, Inc. 21 326
M&F Worldwide Corp. 13 104(A)
Marsh Supermarkets, Inc. 3 54
Michael Foods, Inc. 11 300
Natural Alternatives International, Inc. 4 17(A)
Pilgrim's Pride Corporation 8 69
Pilgrim's Pride Corporation - Class A 4 20
R.H. Phillips, Inc. 4 11(A)
Rocky Mountain Chocolate Factory, Inc. 2 11(A)
Sanderson Farms, Inc. 8 77
Schweitzer-Mauduit International, Inc. 12 154
Standard Commercial Corporation 7 28
SUPERVALU INC. N.M. 6
Suprema Specialties, Inc. 1 10(A)
Sylvan, Inc. 3 29(A)
Todhunter International, Inc. 2 18(A)
Universal Corporation 25 645
Weider Nutrition International, Inc. 15 48
WLR Foods, Inc. 12 85(A)
--------
2,209
--------
14
<PAGE>
STATEMENT OF NET ASSETS -- CONTINUED
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- -----------------------------------------------------------------------------------------------------------------------
Gas/Pipeline -- 3.9%
Adams Resources & Energy 3 $ 24
EnergySouth, Inc. 3 57
Friede Goldman International Inc. 13 132(A)
Frontier Oil Corporation 19 131(A)
Gulf Islands Fabrication, Inc. 8 111(A)
Lufkin Industries, Inc. 5 73
Mitcham Industries, Inc. 7 33(A)
Penn Virginia Corporation 6 131
Petroleum Development Corporation 5 23(A)
Pool Energy Services Co. 11 258(A)
Pride International, Inc. 36 514(A)
SEACOR Smit Inc. 10 492(A)
Seitel, Inc. 8 81(A)
Trico Marine Services, Inc. 15 122(A)
Tuboscope Inc. 12 152(A)
Varco International, Inc. 44 537(A)
World Fuel Services Corporation 9 83
--------
2,954
--------
Health Care -- 3.1%
ADAC Laboratories 3 29(A)
Advocat, Inc. 4 4(A)
Alterra Healthcare Corporation 7 63(A)
American Dental Technologies, Inc. 5 12(A)
American Physicians Service Group, Inc. 2 8(A)
AmeriPath, Inc. 16 132(A)
Beverly Enterprises, Inc. 77 327(A)
BioSource International, Inc. 1 3(A)
Capital Senior Living Corporation 6 45(A)
Carematrix Corporation 10 52(A)
Castle Dental Centers, Inc. 5 14(A)
Coast Dental Services, Inc. 6 19(A)
Curative Health Services, Inc. 2 9(A)
Genesis Health Ventures, Inc. 24 57(A)
Hawaii Tech Pharmacal Company Incorporated 2 10(A)
Healthcare Recoveries, Inc. 7 19(A)
Horizon Health Corporation 4 24(A)
Integrated Health Services, Inc. 35 55(A)
Medstone International, Inc. 4 25(A)
Mesa Laboratories, Inc. 2 7(A)
MIM Corporation 13 28(A)
Monarch Dental Corporation 7 15(A)
15
<PAGE>
Shares/Par Value
- -----------------------------------------------------------------------------------------------------------------------
Health Care -- Continued
Moore Medical Corporation 2 $ 17(A)
Omnicare, Inc. 29 282
OrthAlliance, Inc. 5 36(A)
Pediatrix Medical Group, Inc. 9 129(A)
ProMedCo Management Company 16 52(A)
Quorum Health Group, Inc. 24 165(A)
Radiologix, Inc. 15 119(A)
Raytel Medical Corporation 6 16(A)
RehabCare Group, Inc. 4 78(A)
Response Oncology, Inc. 9 8(A)
Serologicals Corporation 15 63(A)
Sierra Health Services, Inc. 20 205(A)
Specialty Care Network, Inc. 6 21(A)
Unilab Corporation 28 158(A)
USANA, Inc. 2 14(A)
Utah Medical Products, Inc. 3 22(A)
--------
2,342
--------
Industrial -- 5.4%
ACX Technologies, Inc. 20 188(A)
AGCO Corporation 30 390
Alamo Group Inc. 4 36
American Biltrite, Inc. 3 41
Ampco-Pittsburgh Corporation 7 89
Bairnco Corporation 6 39
Baldwin Technology Company, Inc. 13 32(A)
Cascade Corporation 9 91
Channell Commercial Corporation 5 50(A)
Chart Industries, Inc. 3 14
Commercial Intertech Corp. 11 130
CPAC, Inc. 4 22
Detroit Diesel Corporation 9 174
DT Industries, Inc. 7 46
Farrel Corporation 3 5
Flowserve Corporation 16 273
Gehl Company 4 62(A)
Gentek, Inc. 15 173
Gleason Corporation 6 101
Hardinge, Inc. 7 118
Hirsch International Corp. 3 4(A)
Holly Corporation 6 93
Industrial Holdings, Inc. 5 17(A)
16
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- ------------------------------------------------------------------------------------------------------------------------
Industrial -- Continued
ITEQ, Inc. 19 $ 40(A)
Lincoln Electric Holdings, Inc. 4 75
Lindsay Manufacturing Co. 3 49
Lydall, Inc. 4 44(A)
Milacron Inc. 28 493
O.I. Corporation 2 9(A)
Printware, Inc. 2 5(A)
Regal-Beloit Corporation 13 274
Specialty Equipment Companies, Inc. 8 207(A)
Summa Industries 3 37(A)
Supreme Industries, Inc. 8 59(A)
TB Wood's Corporation 4 39
Tech/Ops Sevcon, Inc. 2 23
The Carbide/Graphite Group, Inc. 6 49(A)
Watts Industries, Inc. 20 424
Woodward Governor Company 4 105
--------
4,120
--------
Insurance -- 8.0%
Acceptance Insurance Companies Inc. 11 136(A)
AmerUs Life Holdings, Inc. 22 466
Amwest Insurance 3 31
Atlantic American Corporation 1 4(A)
Bancinsurance Corporation 2 13(A)
Capital Re Corporation 23 228
Chartwell Re Corporation 7 104
Delphi Financial Group, Inc. 10 302(A)
Donegal Group Inc. 6 43
EMC Insurance Group, Inc. 5 45
Foremost Corporation of America 20 480
Fremont General Corporation 23 214
Frontier Insurance Group, Inc. 27 237
Harleysville Group Inc. 22 308
Kaye Group Inc. 4 38
LandAmerica Financial Group, Inc. 9 182
Life USA Holding, Inc. 14 281
Merchants Group, Inc. 1 23
MMI Companies, Inc. 12 131
Mobile America Corporation 5 13
National Western Life Insurance Company 3 220(A)
Nymagic, Inc. 3 43
Orion Capital Corporation 3 142
17
<PAGE>
Shares/Par Value
- -----------------------------------------------------------------------------------------------------------------------
Insurance -- Continued
Penn Treaty American Corporation 6 $ 119(A)
Penn-America Group, Inc. 6 52
Presidential Life Corporation 1 12
Professionals Group, Inc. 4 100(A)
PXRE Corporation 9 133
Reliance Group Holdings, Inc. 64 283
SCPIE Holdings Inc. 4 132
Selective Insurance Group, Inc. 21 398
Standard Management Corporation 5 29(A)
Stewart Information Services Corporation 11 194
The Centris Group, Inc. 8 78
The Commerce Group, Inc. 26 600
The Midland Company 3 71
The Navigators Group, Inc. 6 82(A)
Trenwick Group Inc. 6 106
Unico American Corporation 4 35
--------
6,108
--------
Metals -- 6.3%
Alltrista Corporation 6 152(A)
Amcast Industrial Corporation 7 92
Armco Inc. 78 546(A)
Atchison Casting Corporation 5 50(A)
Bayou Steel Corporation 9 31(A)
Carpenter Technology Corporation 21 524
Chase Industries, Inc. 11 94(A)
Citation Corporation 11 192(A)
Cleveland-Cliffs Inc. 8 261
Commercial Metals Company 11 316
Fansteel Inc. 5 19
Friedman Industries, Incorporated 5 15(A)
Intermet Corporation 19 158
Lindberg Corporation 4 33
Metals USA, Inc. 28 285(A)
National Steel Corporation 23 157
Niagara Corporation 5 24(A)
Northwest Pipe Company 4 69(A)
Oglebay Norton Company 1 27
Quanex Corporation 10 264
Roanoke Electric Steel Corporation 3 58
ROHN Industries, Inc. 34 69(A)
RTI International Metals, Inc. 15 148(A)
Shiloh Industries, Inc. 4 42(A)
18
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- ------------------------------------------------------------------------------------------------------------------------
METALS -- CONTINUED
Special Metals Corporation 11 $ 48(A)
Steel Technologies Inc. 8 88
Texas Industries, Inc. 15 536
The Shaw Group Inc. 8 177(A)
Titanium Metals Corporation 17 150
Universal Stainless & Alloy Products, Inc. 4 22(A)
Webco Industries, Inc. 4 13(A)
Wolverine Tube, Inc. 10 158(A)
Zemex Corporation 3 19(A)
--------
4,837
--------
Miscellaneous Manufacturing -- 5.5%
A.O. Smith Corporation 9 269
Apogee Enterprises, Inc. 6 43
Bacou USA, Inc. 8 139(A)
Badger Paper Mills, Inc. 2 10(A)
Brown & Sharpe Manufacturing Company 10 24(A)
Coachmen Industries Inc. 5 83
Columbus McKinnon Corporation 8 138
Core Materials Corporation 2 3(A)
Cybex International, Inc. N.M. 1(A)
Decora Industries, Inc. 3 17(A)
Denali Incorporated 3 13(A)
Global Payment Technologies, Inc. 6 50(A)
Griffon Corporation 23 182(A)
Hexcel Corporation 23 135(A)
Jason Incorporated 11 83(A)
MascoTech, Inc. 34 547
Met-Pro Corporation 2 23
Metrika Systems Corporation 4 23(A)
MFRI, Inc. 1 6(A)
NACCO Industries, Inc. 6 426
NCH Corporation 2 108
OroAmerica, Inc. 4 27(A)
Park-Ohio Holdings Corp. 7 83(A)
Penn Engineering & Manufacturing Corp. 4 103
Penn Engineering & Manufacturing Corp. - Class A 4 97
Precision Castparts Corp. 9 284
Printronix, Inc. 4 75(A)
Q.E.P. Co., Inc. 2 15(A)
Raven Industries, Inc. 4 56
Riviera Tool Company 1 6(A)
Robbins & Myers, Inc. 1 8
19
<PAGE>
Shares/Par Value
- ------------------------------------------------------------------------------------------------------------------------
Miscellaneous Manufacturing -- Continued
RPC, Inc. 4 $ 29
SPS Technologies, Inc. 6 216(A)
Standex International Corporation 8 221
The Dexter Corporation 13 466
The Eastern Company 1 22
The JPM Company 2 10(A)
TransTechnology Corporation 4 45
U.S. Office Products Company 11 40(A)
Vallen Corporation 1 19(A)
Westinghouse Air Brake Company 3 49
Williams Controls, Inc. 5 11(A)
--------
4,205
--------
Process Industries -- 1.5%
Buckeye Technologies Inc. 27 416(A)
P.H. Glatfelter Company 7 109
Rock-Tenn Company 22 316
Silgan Holdings Inc. 13 260(A)
The Anderson's Inc. 6 53
--------
1,154
--------
Real Estate -- 0.3%
AMREP Corporation 5 27(A)
Bluegreen Corporation 17 83(A)
DeWolfe Companies, Inc. 2 15
Grubb & Ellis Company 14 78(A)
--------
203
--------
Restaurants -- 1.7%
Ark Restaurants Corp. 3 26(A)
Blimpie International, Inc. 6 12
CKE Restaurants, Inc. 39 279
Cooker Restaurant Corporation 6 25
ELXSI Corporation 3 25(A)
Landry's Seafood Restaurants, Inc. 22 175(A)
Lone Star Steakhouse & Saloon, Inc. 24 184(A)
Luby's, Inc. 12 143
Main Street & Main Inc. 8 26(A)
Max & Erma's Restaurants, Inc. 2 11(A)
Piccadilly Cafeterias, Inc. 4 28
Rainforest Cafe, Inc. 19 98(A)
Ryan's Family Steak Houses, Inc. 29 260(A)
Sizzler International, Inc. 16 34(A)
--------
1,326
--------
20
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
- ------------------------------------------------------------------------------------------------------------------------
Retail -- 3.7%
7 Eleven Incorporated 68 $ 134(A)
Barnett Inc. 12 112(A)
Boise Cascade Office Products Corporation 30 326(A)
Cole National Corporation 11 85(A)
Duckwall-ALCO Stores, Inc. 4 29(A)
EZCORP, Inc. 7 38
Finlay Enterprises, Inc. 7 98(A)
Friedman's, Inc. 13 110
Funco, Inc. 3 62(A)
Garden Ridge Corporation 13 97(A)
Government Technology Services Inc. 2 7(A)
Jan Bell Marketing, Inc. 11 34(A)
Jos. A. Bank Clothiers, Inc. 4 15(A)
Media Arts Group, Inc. 8 35(A)
Michael Anthony Jewelers, Inc. 2 5(A)
Micro Warehouse, Inc. 20 239(A)
Movie Star, Inc. 9 11(A)
Musicland Stores Corporation 12 101(A)
OfficeMax, Inc. 31 181(A)
Pier 1 Imports, Inc. 31 210
Piercing Pagoda, Inc. 3 42(A)
RDO Equipment Co. 7 44(A)
REX Stores Corporation 5 143(A)
Specialty Catalog Corp. 1 4(A)
Sport Supply Group, Inc. 2 12(A)
Systemax, Inc. 20 166(A)
The Bon-Ton Stores, Inc. 12 46(A)
Value City Department Stores, Inc. 20 294(A)
Wilmar Industries, Inc. 10 127(A)
Wolohan Lumber Co. 3 42
--------
2,849
--------
Technology -- 0.4%
Del Global Technologies Corp. 4 30(A)
Equinox Systems, Inc. 2 24(A)
Excel Technology, Inc. 5 70(A)
Hurco Companies, Inc. 4 15(A)
K-Tron International, Inc. 2 31(A)
Splash Technology Holdings, Inc. 11 64(A)
ThermoQuest Corporation 7 67(A)
Vivid Technologies, Inc. 2 7(A)
--------
308
--------
21
<PAGE>
Shares/Par Value
- ------------------------------------------------------------------------------------------------------------------------
Telecommunications -- 0.9%
Applied Signal Technology, Inc. 6 $ 57
Blonder Tongue Laboratories, Inc. 6 44(A)
CellStar Corporation 51 383(A)
Comdial Corporation 5 36(A)
Communications Systems, Inc. 3 37
Hector Communications Corporation 1 16(A)
Hickory Tech Corporation 4 50
InterDigital Communications Corporation 2 13(A)
Tollgrade Communications, Inc. 2 57(A)
Vertex Communications Corporation 4 39(A)
--------
732
--------
Textiles -- 1.5%
Burlington Industries, Inc. 45 199(A)
Decorator Industries, Inc. 2 12
Galey & Lord, Inc. 9 23(A)
Guilford Mills, Inc. 17 146
Interface, Inc. 40 203
Lakeland Industries, Inc. 1 4(A)
Pillowtex Corporation 11 79
Quaker Fabric Corporation 2 8(A)
Synthetic Industries, Inc. 5 129(A)
The Dixie Group, Inc. 9 70(A)
Unifi, Inc. 10 104(A)
UniFirst Corporation 12 170
--------
1,147
--------
Transportation -- 6.1%
Amerco 10 288(A)
America West Holdings Corporation 31 533(A)
Amtran, Inc. 2 32(A)
Arkansas Best Corporation 14 176(A)
Arnold Industries, Inc. 19 235
Boyd Bros. Transportation Inc. 2 18(A)
Circle International Group, Inc. 7 133
Consolidated Delivery & Logistics, Inc. 5 15(A)
Consolidated Freightways Corporation 17 168(A)
Covenant Transport, Inc. 11 171(A)
Dynamex Inc. 2 4(A)
Frozen Food Express Industries, Inc. 9 56
Genesee & Wyoming Inc. 3 33(A)
Hawaiian Airlines, Inc. 23 53(A)
J.B. Hunt Transport Services, Inc. 27 368
Kitty Hawk, Inc. 12 124(A)
22
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
SHARES/PAR VALUE
- ------------------------------------------------------------------------------------------------------------------------
Transportation -- Continued
Landstar System, Inc. 3 $ 104(A)
Offshore Logistics, Inc. 16 163(A)
Old Dominion Freight Line, Inc. 5 77(A)
P.A.M. Transportation Services, Inc. 6 65(A)
Pittison BAX Group 14 116
Providence and Worcester Railroad Company 3 28
RailTex, Inc. 7 115(A)
Roadway Express, Inc. 15 301
Smithway Motor Xpress Corp. 3 20(A)
The Greenbrier Companies, Inc. 11 118
Tower Air, Inc. 9 17(A)
Transport Corporation of America, Inc. 5 62(A)
U.S. Xpress Enterprises, Inc. 11 64(A)
USA Truck, Inc. 5 42(A)
USFreightways Corporation 14 640
Yellow Corporation 19 306(A)
--------
4,645
--------
Utilities -- 2.1%
Bangor Hydro-Electric Company 5 74
CMP Group, Inc. 3 90
El Paso Electric Company 37 328(A)
Maine Public Service Company 1 22
Public Service Company of New Mexico 30 544
RGS Energy Group, Inc. 12 289
TNP Enterprises, Inc. 7 257
--------
1,604
--------
Total Common Stocks and Equity Interests (Identified Cost-- $85,142) 74,773
- -----------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS -- 2.4%
Bank of America
5.48%, dated 9/30/99, to be repurchased at $900 on 10/1/99
(Collateral: $1,017 Freddie Mac mortgage-backed securities,
6%, due 5/1/29, value $953) $900 900
Goldman, Sachs & Company
5.40%, dated 9/30/99, to be repurchased at $900 on 10/1/99
(Collateral: Fannie Mae mortgage-backed securities,
6.50%, due 5/1/29, value $936) 900 900
--------
Total Repurchase Agreements (Identified Cost-- $1,800) 1,800
- -----------------------------------------------------------------------------------------------------------------------
23
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------
Total Investments-- 100.0% (Identified Cost-- $86,942) $76,573
Other Assets Less Liabilities-- N.M. 2
--------
Net assets consisting of:
Accumulated paid-in capital applicable to:
9,230 Primary shares outstanding $85,023
7 Navigator shares outstanding 70
Accumulated net investment income/(loss) (225)
Accumulated net realized gain/(loss) on investments 2,076
Unrealized appreciation/(depreciation) of investments (10,369)
--------
Net assets-- 100.0% $76,575
--------
Net asset value per share:
Primary Class $8.29
--------
Navigator Class $8.40
--------
- -----------------------------------------------------------------------------------------------------------------------
(A) Non-income producing.
N.M. - Not meaningful.
</TABLE>
See notes to financial statements.
24
<PAGE>
Statements of Operations
Legg Mason Investors Trust, Inc.
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended 9/30/99
- -------------------------------------------------------------------------------------------------------------------
U.S.
Small-Capitalization
Value Trust
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment Income:
Dividends $ 421
Interest 115
--------
Total income 536
--------
Expenses:
Management fee 326
Distribution and service fees 383
Transfer agent and shareholder servicing expense 36
Audit and legal fees 16
Custodian fee 89
Directors' fees 2
Organization expense 5
Registration fees 16
Reports to shareholders 13
Other expenses --
--------
886
Less fees waived (125)
--------
Total expenses, net of waivers 761
--------
Net Investment Income/(Loss) (225)
--------
Net Realized and Unrealized Gain/(Loss) on Investments:
Realized gain/(loss) on investments 2,110
Change in unrealized appreciation/(depreciation) of investments 1,539
--------
Net Realized and Unrealized Gain/(Loss) on Investments 3,649
- -------------------------------------------------------------------------------------------------------------------
Change in Net Assets Resulting From Operations $3,424
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
25
<PAGE>
Statements of Changes in Net Assets
Legg Mason Investors Trust, Inc.
(Amounts in Thousands)
<TABLE>
<CAPTION>
U.S. Small-
American Leading Capitalization
Companies Trust Value Trust
---------------- -----------------------------
Year Six Months 6/15/98(A)
Ended Ended to
3/31/99(B) 9/30/99 3/31/99
- -------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Change in Net Assets:
Net investment income/(loss) $ (818) $ (225) $ (171)
Net realized gain/(loss) on investments 8,963 2,110 1,138
Change in unrealized appreciation/(depreciation)
of investments 37,543 1,539 (11,908)
- -------------------------------------------------------------------------------------------------------------------
Change in net assets resulting from operations 45,688 3,424 (10,941)
- -------------------------------------------------------------------------------------------------------------------
Distributions to shareholders:
From net investment income:
Primary Class -- -- --
Navigator Class -- -- --
From net realized gain on investments:
Primary Class (8,688) (1,000) --
Navigator Class -- (1) --
Change in net assets from Fund share transactions:
Primary Class 51,631 15,727 69,295
Navigator Class (82) 20 50
- -------------------------------------------------------------------------------------------------------------------
Change in net assets 88,549 18,170 58,404
Net Assets:
Beginning of period 200,408 58,405 1
- -------------------------------------------------------------------------------------------------------------------
End of period $288,957 $76,575 $58,405
Undistributed net investment income/(loss) $ -- $ (225) $ --
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) Commencement of operations.
(B) Primary Class assets. The Navigator Class shares of American Leading
Companies Trust were redeemed on December 3, 1998.
NA--Not applicable.
See notes to financial statements
26
<PAGE>
Financial Highlights
Legg Mason Investors Trust, Inc.
Contained below is per share operating performance data for a Navigator
Class share of common stock outstanding, total investment return, ratios to
average net assets and other supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
Investment Operations Distributions
--------------------------------------------------- --------------------------------------
From
Net Asset Net Net Realized Total From Net Net Asset
Value, Investment and Unrealized From Net Realized Value,
Beginning Income Gain (Loss)on Investment Investment Gain on Total End of
of Period (Loss) Investments Operations Income Investments Distributions Period
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AMERICAN LEADING COMPANIES
TRUST
-- Navigator Class
Years Ended Mar. 31,
1999(A) $17.95 $.08 $ .23 $ .31 $-- $ (.46) $ (.46) $17.80
1998 14.71 .10(C) 4.99 5.09 -- (1.85) (1.85) 17.95
1997(E) 13.30 .07(C) 1.94 2.01 (.12) (.48) (.60) 14.71
U.S. SMALL-CAPITALIZATION
VALUE TRUST
--Navigator Class
Six Months Ended
Sept. 30, 1999* $ 7.88 $.02(F) $ .62 $.64 $-- $(.12) $(.12) $8.40
Period Ended Mar. 31,
1999(G) 9.92 .05(F) (2.09) (2.04) -- -- -- 7.88
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------------------
Net
Investment Net Assets,
Expenses Income (Loss) Portfolio End of
Total to Average to Average Turnover Period
Return Net Assets Net Assets Rate (in thousands)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
AMERICAN LEADING COMPANIES TRUST
-- Navigator Class
Years Ended Mar. 31,
1999(A) 1.84%(B) .94%(C,D) .65%(C,D) 47.6%(D) $ --
1998 36.68% .93%(C) .74%(C) 51.4% 82
1997(E) 15.16%(B) .86%(C,D) .98%(C,D) 55.7%(D) 55
U.S. SMALL-CAPITALIZATION
VALUE TRUST
--Navigator Class
Six Months Ended
Sept. 30, 1999* 7.94%(B) 1.00%(F,D) .42%(F,D) 51.4%(D) $60
Period Ended Mar. 31,
1999(G) (20.56)%(B) .90%(F,D) .71%(F,D) 29.5%(D) 40
- -------------------------------------------------------------------------------------------------------
</TABLE>
(A) AMERICAN LEADING COMPANIES NAVIGATOR SHARES WERE REDEEMED ON DECEMBER 3,
1998, AND INFORMATION IS FOR THE PERIOD THEN ENDED.
(B) NOT ANNUALIZED.
(C) NET OF FEES WAIVED PURSUANT TO A VOLUNTARY EXPENSE LIMITATION OF 0.95% OF
AVERAGE DAILY NET ASSETS. IF NO FEES HAD BEEN WAIVED BY LMFA, THE ANNUALIZED
RATIO OF EXPENSES TO AVERAGE DAILY NET ASSETS FOR EACH PERIOD WOULD HAVE
BEEN AS FOLLOWS: FOR THE PERIOD ENDED DECEMBER 3, 1998, 0.95%; FOR THE YEAR
ENDED MARCH 31, 1998, 0.98%; AND FOR THE PERIOD OCTOBER 4, 1996 TO MARCH 31,
1997, 0.97%.
(D) ANNUALIZED.
(E) FOR THE PERIOD OCTOBER 4, 1996 (COMMENCEMENT OF SALE OF NAVIGATOR CLASS
SHARES) TO MARCH 31, 1997.
(F) NET OF FEES WAIVED PURSUANT TO A VOLUNTARY EXPENSE LIMITATION OF 1.00% OF
AVERAGE DAILY NET ASSETS. IF NO FEES HAD BEEN WAIVED BY LMFA, THE ANNUALIZED
RATIO OF EXPENSES TO AVERAGE DAILY NET ASSETS FOR EACH PERIOD WOULD HAVE
BEEN AS FOLLOWS: FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999, 1.32%; AND FOR
THE PERIOD JUNE 19, 1998 TO MARCH 31, 1999, 1.28%.
(G) FOR THE PERIOD JUNE 19, 1998 (COMMENCEMENT OF SALE OF NAVIGATOR CLASS
SHARES) TO MARCH 31, 1999.
* UNAUDITED.
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
Notes to Financial Statements
Legg Mason Investors Trust, Inc.
(Amounts in Thousands) (Unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies:
The Legg Mason Investors Trust, Inc. ("Corporation"), consisting of
the American Leading Companies Trust ("American Leading Companies"), the
Balanced Trust ("Balanced Trust") and the U.S. Small-Capitalization Value
Trust ("U.S. Small-Cap") (each a "Fund"), is registered under the
Investment Company Act of 1940, as amended, as an open-end, diversified
investment company.
Each Fund consists of two classes of shares: Primary Class, offered
since September 1, 1993, for American Leading Companies Trust; since
October 1, 1996, for Balanced Trust; and since June 15, 1998, for U.S.
Small-Cap; and Navigator Class, offered to certain institutional investors
since October 4, 1996, for American Leading Companies Trust; and since
June 19, 1998, for U.S. Small-Cap. The Navigator Class shares of American
Leading Companies were redeemed on December 3, 1998. The Navigator Class
of Balanced Trust has not commenced operations. Information about the
Primary Class is contained in a separate report to its shareholders. The
income and expenses of each of these Funds are allocated proportionately
to the two classes of shares based on daily net assets, except for Rule
12b-1 distribution fees, which are charged only on Primary Class shares,
and transfer agent and shareholder servicing expenses, which are
determined separately for each class.
Security Valuation
Securities traded on national securities exchanges are valued at the
last quoted sales price. Over-the-counter securities and listed securities
for which no sales price is available are valued at the mean between the
latest bid and asked prices. Securities for which market quotations are
not readily available are valued at fair value as determined by management
and approved in good faith by the Board of Directors. Fixed income
securities with 60 days or less remaining to maturity are valued using the
amortized cost method, which approximates current market value.
Investment Income and Distributions to Shareholders
Interest income and expenses are recorded on the accrual basis. Bond
premiums are amortized for financial reporting and federal income tax
purposes. Bond discounts, other than original issue and zero-coupon bonds,
are not amortized for financial reporting and federal income tax purposes.
Dividend income and distributions to shareholders are allocated at the
class level and are recorded on the ex-dividend date. Dividends from net
investment income, if available, will be paid annually for American
Leading Companies and U.S. Small-Cap. Net capital gain distributions,
which are calculated at the Fund level, are declared and paid after the
end of the tax year in which the gain is realized. Distributions are
determined in accordance with federal income tax regulations, which may
differ from those determined in accordance with generally accepted
accounting principles; accordingly, periodic reclassifications are made
within a Fund's capital accounts to reflect income and gains available for
distribution under federal income tax regulations.
Security Transactions
Security transactions are recorded on the trade date. Realized gains
and losses from security transactions are reported on an identified cost
basis for both financial reporting and federal income tax purposes.
28
<PAGE>
Notes to Financial Statements -- Continued
- --------------------------------------------------------------------------------
At September 30, 1999, receivables for securities sold and payables
for securities purchased for the Fund were as follows:
Receivable for Payable for
Securities Sold Securities Purchased
- --------------------------------------------------------------------------------
U.S. SMALL-CAP $-- $--
Deferred Organizational Expenses
Deferred organizational expenses of $45 for U.S. Small-Cap are being
amortized on a straight line basis over 5 years commencing on the date
operations began.
Federal Income Taxes
No provision for federal income or excise taxes is required since the
Fund intends to continue to qualify as a regulated investment company and
distribute substantially all of its taxable income to its shareholders.
Use of Estimates
Preparation of the financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
2. Investment Transactions:
For the six months ended September 30, 1999, investment transactions
(excluding short-term investments) were as follows:
Purchases Proceeds From Sales
- --------------------------------------------------------------------------------
U.S. Small-Cap $34,147 $18,393
At September 30, 1999, cost, gross unrealized appreciation and gross
unrealized depreciation based on the cost of securities for federal income
tax purposes for the Fund were as follows:
<TABLE>
<CAPTION>
Net
Appreciation/
Cost Appreciation Depreciation (Depreciation)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Small-Cap $86,942 $6,134 $(16,503) $(10,369)
</TABLE>
3. Repurchase Agreements:
All repurchase agreements are fully collateralized by obligations
issued by the U.S. Government or its agencies and such collateral is in
the possession of the Funds' custodian. The value of such collateral
includes accrued interest. Risks arise from the possible delay in recovery
or potential loss of rights in the collateral should the issuer of the
repurchase agreement fail financially. The Fund's investment adviser,
acting under the supervision of its Board of Directors, reviews the value
of the collateral and the creditworthiness of those banks and dealers with
which the Fund enters into repurchase agreements to evaluate potential
risks.
29
<PAGE>
- --------------------------------------------------------------------------------
4. Transactions With Affiliates:
The Fund has a management agreement with Legg Mason Fund Adviser,
Inc. ("LMFA"). Pursuant to the agreement, LMFAprovides the Fund with
management and administrative services for which the Fund pays a fee,
computed daily and payable monthly at an annual rate of the Fund's average
daily net assets.
LMFA has agreed to waive its fees in any month to the extent the
Fund's expenses (exclusive of taxes, interest, brokerage and extraordinary
expenses) exceed during that month certain annual rates of the average
daily net assets of the Navigator Class. The following chart shows the
annual rate of management fees; expense limits and their expiration dates;
total management fees waived; and management fees payable for the
Navigator Class of the Fund:
<TABLE>
<CAPTION>
Six Months Ended At
September 30, 1999 September 30, 1999
------------------ ------------------
Management Expense Expense Limitation Management Management
Fund Fee Limitation Expiration Date Fees Waived Fees Payable
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Small-Cap 0.85% 1.00% July 31, 2000 $125 $20
</TABLE>
Brandywine Asset Management, Inc. ("Brandywine") serves as investment
adviser to U.S. Small-Cap. Brandywine is responsible for the actual
investment activity of the Fund. LMFA pays Brandywine a fee for its
services, computed daily and payable monthly, at an annual rate equal to
58.8% of the fee received by LMFA.
Legg Mason Wood Walker, Incorporated ("Legg Mason"), a member of the
New York Stock Exchange, serves as distributor of the Funds. Legg Mason
receives an annual distribution fee and an annual service fee based on
each Fund's Primary Class's average daily net assets, computed daily and
payable monthly as follows:
<TABLE>
<CAPTION>
At September 30, 1999
--------------------------
Distribution Service Distribution and Service
Fund Fee Fee Fees Payable
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Small-Cap 0.75% 0.25% $65
</TABLE>
No brokerage commissions were paid by the Fund to Legg Mason or its
affiliates during the six months ended September 30, 1999.
Legg Mason also has an agreement with the Fund's transfer agent to
assist it with some of its duties. For this assistance, the transfer agent
paid Legg Mason $14 for the six months ended September 30, 1999.
LMFA, Legg Mason and Brandywine are corporate affiliates and wholly
owned subsidiaries of Legg Mason, Inc.
5. Line of Credit:
The Fund, along with certain other Legg Mason Funds, participates in
a $200 million line of credit ("Credit Agreement") to be utilized as an
emergency source of cash in the event of unanticipated, large redemption
requests by shareholders. Pursuant to the Credit Agreement, each
participating Fund is liable only for principal and interest payments
related to borrowings made by that Fund. Borrowings under the line of
credit bear interest at prevailing short-term interest rates. For the six
months ended September 30, 1999, the Fund had no borrowings under the line
of credit.
30
<PAGE>
Notes to Financial Statements -- Continued
- --------------------------------------------------------------------------------
6. Fund Share Transactions:
At September 30, 1999, there were 250,000, 125,000 and 50,000 shares
authorized at $.001 par value for the Primary Class of American Leading
Companies Trust, Balanced Trust and U.S. Small-Cap, respectively. At
September 30, 1999, there were 50,000 shares authorized at $.001 par value
for the Navigator Class of U.S. Small-Cap.
Share transactions were as follows:
<TABLE>
<CAPTION>
Reinvestment
Sold of Distributions Repurchased Net Change
------------------ --------------- ----------------- ----------------
Shares Amount Shares Amount Shares Amount Shares Amount
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
American Leading Companies
--Primary Class
Year Ended March 31, 1999 4,801 $84,561 502 $8,514 (2,390) $(41,444) 2,913 $ 51,631
--Navigator Class
Period Ended December 3, 1998(A) -- $ -- -- $ -- (5) $(82) (5) $(82)
U.S. Small-Cap
--Primary Class
Six Months Ended September 30, 1999 2,886 $25,713 109 $ 988 (1,240) $(10,974) 1,755 $ 15,727
Period Ended March 31, 1999(B) 9,383 85,160 -- -- (1,909) (15,865) 7,474 69,295
--Navigator Class
Six Months Ended September 30, 1999 2 $ 20 -- $ -- -- $-- 2 $ 20
Period Ended March 31, 1999(C) 5 50 -- -- -- -- 5 50
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(A) The Navigator Class shares of American Leading Companies were redeemed on
December 3, 1998.
(B) For the period June 15, 1998 (commencement of sale of Primary Class) to
March 31, 1999.
(C) For the period June 19, 1998 (commencement of sale of Navigator Class) to
March 31, 1999.
31
<PAGE>
INVESTMENT MANAGER
Legg Mason Fund Adviser, Inc.
Baltimore, MD
INVESTMENT ADVISERS
For American Leading Companies Trust:
Legg Mason Fund Adviser, Inc.
Baltimore, MD
For Balanced Trust:
Bartlett & Co.
Cincinnati, OH
For U.S. Small-Cap Value Trust:
Brandywine Asset Management,Inc.
Wilmington, DE
BOARD OF DIRECTORS
John F. Curley, Jr., Chairman
Edward A. Taber, III, President
Richard G. Gilmore
Arnold L. Lehman
Dr. Jill E. McGovern
G. Peter O'Brien
T. A. Rodgers
TRANSFER AND SHAREHOLDER SERVICING AGENT
Boston Financial Data Services
Boston, MA
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
COUNSEL
Kirkpatrick & Lockhart LLP
Washington, D.C.
INDEPENDENT AUDITORS
Ernst & Young LLP
Philadelphia, PA
This report is not to be distributed unless preceded or
accompanied by a prospectus.
Legg Mason Wood Walker, Incorporated
- --------------------------------------------------------------------------------
100 Light Street
P.O. Box 1476, Baltimore, MD 21203-1476
410 o 539 o 0000
LMF-013
11/99
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