<PAGE>
Investment Manager
For American Leading Companies Trust:
Legg Mason Funds Management, Inc.
Baltimore, MD
For Balanced Trust, U.S. Small-Cap Value Trust,
and Financial Services Fund
Legg Mason Fund Adviser, Inc.
Baltimore, MD
Investment Adviser
For American Leading Companies Trust:
Legg Mason Funds Management, Inc.
Baltimore, MD
For Balanced Trust:
Bartlett & Co.
Cincinnati, OH
For U.S. Small-Cap Value Trust:
Brandywine Asset Management, Inc.
Wilmington, DE
For Financial Services Fund:
Gray, Seifert & Co., Inc.
New York, NY
Board of Directors
John F. Curley, Jr., Chairman
Edward A. Taber, III, President
Nelson A. Diaz
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 . 539 . 0000
LMF-013
11/00
--------------------------------------------------------------------------------
-------------------------------------------------------
Semi-Annual Report
September 30, 2000
Legg Mason
Investors Trust, Inc.
American Leading
Companies Trust
Balanced Trust
U.S. Small-Cap
Value Trust
Financial Services
Fund
Primary Class and
Class A
-------------------------------------------------------
LEGG
MASON
FUNDS
LOGO
--------------------------------------------------------------------------------
<PAGE>
To Our Shareholders,
We are pleased to provide you with Legg Mason Investors Trust's semi-annual
report for the Primary Class of the American Leading Companies Trust, the
Balanced Trust, and the U.S. Small-Capitalization Value Trust, and for the
Primary Class and Class A of Financial Services Fund.
The following table summarizes key statistics for the Primary Class of
shares of each Fund (and Class A shares of Financial Services Fund), as of
September 30, 2000:
<TABLE>
<CAPTION>
3-Month 12-Month
Total Return/1/ Total Return/1/
-------------- ---------------
<S> <C> <C>
American Leading Companies Trust +2.54% +7.78%
Balanced Trust +0.61% +7.88%
U.S. Small-Capitalization Value Trust +9.93% -1.53%
Financial Services Fund
Primary Class +17.88% +20.22%
Class A (including front-end sales charge) +12.42% +15.36%
Class A (excluding front-end sales charge) +18.07% +21.05%
S&P 500 Stock Composite Index -0.97% +13.28%
Lipper Large-Cap Value Index +3.65% +10.14%
Lehman Brothers Intermediate Government/
Corporate Bond Index +2.87% +6.74%
Lipper Balanced Fund Index/2/ +1.99% +11.11%
Russell 2000 Index +1.11% +23.39%
Lipper Financial Services Fund Index +21.41% +25.26%
</TABLE>
On the following pages, the portfolio managers for each of the Funds
discuss the investment outlook for the Funds. Long-term investment results for
each of the Funds are shown in the Performance Information section of this
report.
We hope you will consider using the Trust for investments of additional
funds as they become available. Some shareholders regularly add to their
investment in the Funds by authorizing automatic, monthly transfers from their
bank checking or Legg Mason accounts. Your Financial Advisor will be happy to
help you make these arrangements if you would like to purchase additional shares
in this convenient manner.
Sincerely,
/s/ Edward A. Taber, III
Edward A. Taber, III
President
October 30, 2000
_________________
/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>
Portfolio Managers' Comments
American Leading Companies Trust
Market Commentary
T.S. Eliot called April the "cruelest" month, but where stocks are
concerned, it's September, hands down. Since January 1950, September has been
the worst month to own stocks (as measured by the S&P 500 Index), and the only
month of the year to show a negative average return over that time period.
Recent history has been no exception. In September 1999, the S&P 500 was down
almost 4%, and this September was down over 5%. Often the weakness in September
has carried over into October. In fact, many important market lows have been
recorded in the month of October. The famous, but now distant, Crash of 1987
bottomed on October 19, 1987. The Bear Market of 1990 bottomed on October 11.
More recently, the S&P 500 established important lows in each of the last three
years in October -October 8, 1998, October 15, 1999, and October 18, 2000 (let's
hope).
Perhaps it is just coincidence that September and early October have seen
such weak markets in recent years. After all, some month has to be the weakest
of the year, why not September? However, we can think of at least two reasons
why more than just coincidence may be at work.
It has been our experience that many investors, company executives and
security analysts follow the "hope springs eternal" theory of investing. Under
this theory, earnings shortfalls and sales slowdowns early in the year tend to
be characterized, and more easily forgiven, as "temporary" or "minor" problems
which will be more than made up in the back half of the year, thus ensuring that
annual earnings targets are met or exceeded. By September, however, three
quarters of the year are over, leaving little time to make up shortfalls. Thus,
third quarter pre-announcement and reporting season tends to be " 'fessing up"
time, when companies are forced to admit that problems are more persistent and
deep-seated than originally believed and likely to negatively affect full year
results, and perhaps even carry over into the following year.
" 'Fessing up" time is being exacerbated this year by a growing body of
evidence that U.S. economic growth is slowing. The triple whammy of rising
interest rates, a very strong dollar and sky-high energy costs has triggered a
rash of earnings "pre-announcements" (read: "shortfall" or "disappointment")
from a who's who of U.S. companies, which include, in no particular order: Dell
Computer, Intel, Lucent Technologies, Circuit City Stores, Nordstrom's, Home
Depot, Xerox, Eastman Kodak, Polaroid, Apple Computer, Alcoa, Hertz, Daimler
Chrysler, Unisys, Maytag and Gap Stores. If this list is not evidence enough of
the widespread nature of the current slowdown, we would cite one more data point
in support of that view. The chief financial officer (CFO) of a member of the
Dow Jones Industrial Average reported to us that at a recent roundtable
gathering of CFOs of all thirty companies in the Dow, every single company
reported an "abrupt slowdown in their short-tail businesses" in September.
Another factor which we believe has contributed importantly to market
weakness in September and October in recent years is mutual fund tax-selling.
Many mutual funds' fiscal years end on October 31st. Even those (such as
American Leading Companies) without an October 31 fiscal year end will base
their year-end capital gains distributions on tax periods which end on October
31st. In a year like this one, when all major market indices are down through
September and most funds have made little or no upward progress, there is great
pressure on fund managers to offset gains recorded earlier in the year with
losses before the end of the fiscal year or tax period. After all, the last
thing a fund manager
2
<PAGE>
wants to do is present a big December tax bill to shareholders who have not made
any money during the year. As a consequence, stocks which are already depressed
tend to get added selling pressure in September and October because they are
prime tax-selling candidates.
The confluence of external circumstances and internal market factors seems
to have conspired to create important market bottoms -- and by extension,
attractive buying opportunities -- in October of 1998 and 1999. We think there
is a good chance that October 2000 will make it three in a row. Students of
market history should be heartened to know that the three best months of the
year for stock returns over the past 50 years are November, December and
January.
Investment Results
Cumulative results for the American Leading Companies Trust for the three-
month, nine-month, one-year, three-year and five-year periods ended September
30, 2000, are listed below, along with those of some representative benchmarks:
<TABLE>
<CAPTION>
Three Nine One Three Five
Months Months Year Years Years
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
American Leading Companies +2.54% -0.39% +7.78% +27.49% +107.69%
S&P 500 Composite Index -0.97% -1.39% +13.28% +57.88% +166.82%
Lipper Large-Cap Value Funds Index +3.65% +1.59% +10.14% +34.81% +117.54%
Dow Jones Industrial Average +2.36% -6.31% +4.57% +40.75% +143.27%
</TABLE>
The Fund had another respectable quarter, bettering the S&P 500 and Dow
Industrials, but modestly trailing the index of Lipper Large-Cap Value Funds for
the three months. For the calendar year to date, the Fund also bested the S&P
500 and Dow Industrials, but trailed its Value peer group. The modest shortfall
compared to peer funds in the latest quarter and the year to date is due
principally to the larger commitment to technology stocks in the Fund than in
other value funds. For longer time periods, the Fund is behind its benchmark and
peer group.
As was true in the second quarter, health care was among the best
performing sectors in the third quarter, as were the financial stocks. The
Fund's overweighting in health care and financials was a significant benefit to
performance in the quarter. Technology and telecommunications stocks continue to
be generally weak. The Fund was underweighted in these two areas compared to the
S&P 500 and Dow Industrials and as a consequence outperformed these benchmarks
in the quarter. The Fund, however, was overweighted in technology and
telecommunications relative to its value peers, and thus was hurt more than
other value funds by their weakness. Strong performers in the portfolio during
the third quarter included: McKesson/HBOC Inc., Bank One Corporation, Washington
Mutual, Inc., Fannie Mae, MGIC Investment Corporation, Foundation Health
Systems, Inc., Mellon Financial Corporation, AMR Corporation, Bank of America
and TJX Companies Inc. Portfolio laggards included: FINOVA Group Inc., Intel
Corporation, Albertson's, Inc., WorldCom, Inc., Eastman Kodak Company, Microsoft
Corporation, Unisys Corporation, Gateway, Inc., Wal-Mart Stores, Inc. and
Koninklijke (Royal) Philips Electronics N.V.
3
<PAGE>
Portfolio Managers' Comments -- Continued
American Leading Companies Trust -- Continued
Outlook
Before this quarter is over, we will have elected a new President. Many
investors grow concerned around election time about the impact a new
administration may have on the market. We believe that the administration per se
has little market impact; it is the policies that are enacted that count. Those
policies, though, are themselves often shaped by the market. The tremendous
expansion of equity ownership through 401(k) and stock option plans has
democratized the stock market over the past 10 years. It is much harder to pass
legislation perceived to be market unfriendly than it was a generation ago. Now
when markets react strongly, politicians are often forced to respond. The felt
necessity to "do something" about oil prices is a current manifestation of the
sensitivity of government to changes in markets. There is, of course, the real
risk that governments overreact to normal market fluctuations, but that is
balanced by their being unlikely to actively pursue policies that would have a
substantial negative market impact. Legislation, no doubt, will continue to be
proposed and sometimes passed that could have significant effects on individual
industries.
It is always more pleasant to write quarterly letters saying how well the
market did than it is to write how the market has spent nine months doing little
except drive price/earnings ratios lower. After five years where share prices
rose faster than earnings, we are in a year where earnings are rising and share
prices are not. High oil prices and international tensions, higher short-term
interest rates, upward pressure on inflation, and the uncertainty of an election
year have all taken their toll on the market. As noted earlier, the third
quarter has also seen the highest level of pre-announced earnings warnings in
several years, solid evidence that the economy is slowing. The good news is that
the bad news is reflected in the market. At current prices, we believe the
market represents good value and your portfolio even better value.
As always, we appreciate your support and welcome your comments.
David E. Nelson, CFA
October 23, 2000
DJIA 10271.7
4
<PAGE>
Portfolio Managers' Comments
Balanced Trust
Common Stocks
Failed summer rally attempts and rapidly shifting market leadership reigned
among the U.S. equity markets during the quarter. Conjecture regarding Fed
policy on interest rates quickly gave way to the consequence of rising oil
prices and a plunging euro, leading to disappointing profit forecasts from many
bellwether companies. By the end of September, most market indexes were "in the
red," with the once-mighty NASDAQ surrendering 8%. So far, conditions have
worsened during the first three weeks of October. It's possible that market
averages could finish the year with negative returns for the first time since
1990.
Last year, technology stocks were "the only game in town" and their
phenomenal appreciation drove major market averages to 20%+ returns, masking the
stagnant performance of most market sectors. Following the NASDAQ became a
favorite pastime for some, an obsession for others. This was a difficult
environment for value-oriented portfolios. So far, 2000 is providing a measure
of vindication. The equity component of the Balanced Trust has demonstrated very
good resilience in the latest market volatility. The equities posted a nine-
month total return of +3.49%, which compares nicely to the -1.39% return posted
by the Standard & Poor's 500 index. Good performance from selected consumer,
health and financial stocks paced the portfolio during this period. Meanwhile,
since the recent correction has been concentrated in technology stocks, our
underweighting in this sector provided some additional protection.
The technology swoon allowed for some opportunistic buying during the third
quarter. We added a new position in Texas Instruments. TI is a leading
manufacturer of digital signal processors, which are a key component of cellular
phones and related digital products. We increased our holdings of Dell Computer,
IBM, Lucent Technologies and Microsoft. Meanwhile, modest cutbacks of selected
financial stocks (Citigroup, Mellon Financial) provided funds for our purchases.
We are very encouraged by the solid corporate profit reports released
during the last few days. With a few exceptions (Home Depot, Intel) our
companies have delivered on-target quarterly results. We're expecting most to
finish 2000 with profit growth of 15% or greater. Since our guiding conviction
is that stock prices parallel business results over the long haul, this solid
fundamental performance is very encouraging.
As usual, there's no shortage of things to worry about as we look ahead to
2001. We can identify four factors that deserve some commentary:
1. Looking beyond our borders, we are dismayed by the latest problems in
the Middle East, where lasting peace seems hopelessly elusive. Since oil is
still the most important industrial commodity, events in the Persian Gulf region
could certainly disrupt an otherwise sanguine economic outlook. It's worth
remembering that the last three recessions in the United States (1973-74, 1981,
1990) coincided with significant energy price increases.
2. The collapse of the euro currency is important. Most of our
multinational companies do significant business in Europe, so their euro-based
earnings are under pressure. This is a factor behind recent earnings warnings
from a variety of companies. Meanwhile, smaller companies that export to Europe
are competitively disadvantaged as dollar-priced goods become more expensive for
European buyers.
5
<PAGE>
Portfolio Managers' Comments -- Continued
Balanced Trust -- Continued
3. The corporate earnings outlook for 2001 is somewhat uncertain at this
juncture, owing to the above factors. As the old saying goes, stock prices are
all about "earnings and interest rates," so any slowdown of earnings growth will
remove a key support for the market. This is why forecasts of slowing growth
from industry leaders like Intel and Home Depot have spooked the investment
community during October.
4. Last but not least, the elections. Studies have shown that financial
markets thrive under political gridlock, wherein executive and legislative
control is divided. At this juncture, the presidential contest seems to be a
toss-up, and most analysts think Congress could go either way. It's worth
remembering the lackluster market we experienced in 1993-94 when investors were
frightened by the regulatory initiatives championed by a Democratic President
and a sympathetic Congress. Certainly investors in health care and energy
companies remember the pain. Meanwhile, lest we sound partisan, it's a good bet
that interest rates would move higher (at least initially) if the GOP takes
control of both branches on November 7th. Higher interest rates would probably
put the brakes on market performance, at least temporarily.
While the above factors seem worrisome, they shouldn't sidetrack a long-
term investment program. Owning high quality businesses will build wealth over
the long haul. In its rewarding long-term history, the stock market has survived
much more challenging problems than the ones cited above. We would certainly
take the current menu of "problems" over the stagflation that characterized the
`70s, the civil unrest of the late `60s, or the Cuban Missile Crisis and
assorted Cold War scares that frightened investors in earlier times. Staying the
course with good stocks, and occasionally upgrading into even better companies
when opportunities develop, is the most sensible strategy.
Fixed Income
The quarter ended September 30, 2000, was a favorable period for fixed
income investors, with the yields on intermediate maturity bonds declining by
approximately 25 to 30 basis points./1/ We are pleased to report that the fixed
income portion of the Fund continued to outperform its benchmark index, the
Lehman Intermediate Government/Corporate Index, as it has consistently since the
Fund's inception.
During the past three months, mortgages and government agencies posted the
best returns in the shorter and longer maturities, while corporate bonds posted
the best returns in the 3- to 7-year maturity range. On a trailing 12-month
basis, mortgages, which have been our asset of choice for some time, continued
to post the best returns by a fairly wide margin. At present, we continue to
find value in mortgages (which we added to during the quarter), government
agencies and short-term corporate bonds. At some point, we believe that longer-
dated corporate bonds will offer a significant buying opportunity; however, we
believe that it is still premature as aggregate corporate credit continues to
_________________
/1/ 100 basis points = 1%.
6
<PAGE>
be on the decline and there is a disturbing lack of liquidity owing to bond
dealers' reluctance to commit capital to this sector.
Six months ago, we advanced the notion that continued tightening of
interest rates by the Federal Reserve would soon lead to a slowing of the
economy, and recently, as you have no doubt seen, the stock market has been
rocked by a seemingly endless succession of companies that did not meet earnings
estimates due to slowdowns in revenues. Indeed, many of the popular new economy
stocks have posted declines of 50% or greater over the last six months and, in
some cases, have wiped out the gains that were accumulated in the past two to
three years. Just as the case was made previously that increases in shareholder
wealth would lead to increased consumer spending, conversely, it is reasonable
to conclude that decreases in consumer wealth in this recent stock market
decline will produce a slowing in consumer expenditures. This phenomenon,
coupled with growing concern about the difficulties in the Middle East and the
uncertainty of the election here in the U.S., could lead to a continuing flight
to quality, which would benefit the fixed income portfolio. Whether the recent
slowdown is just a brief respite, or perhaps a more enduring trend, remains to
be seen; however, we are confident that a portfolio focused on high quality
fixed income securities will serve the Fund very well for the foreseeable
future.
We appreciate your investment in the Fund, and will work hard to deliver
solid long-term performance.
James B. Hagerty, CFA Dale H. Rabiner, CFA
Peter A. Sorrentino, CFA Fixed Income Portfolio Manager
Equity Portfolio Managers
October 24, 2000
DJIA 10393.1
7
<PAGE>
Portfolio Managers' Comments
U.S. Small-Capitalization Value Trust
For the quarter, the portfolio rose 9.9%, compared to gains of 7.3% for the
Russell 2000 Value and 1.1% for the Russell 2000, and a loss of -1.0% for the
S&P 500. Year-to-date, the portfolio has returned 0.3% while the Russell 2000
Value has gained 13.6%, the Russell 2000 is up 4.2% (well below its high in
2000) and the S&P is down 1.4%.
U.S. equity markets underwent a large fundamental shift in the third
quarter of 2000. Earlier in the year, investors were motivated by a narrow,
intense focus on technology and biotechnology stocks. In this environment, small
value stocks were shunned despite their attractive valuations and improving
fundamentals. Now that Internet stocks have produced a series of fundamental
disappointments, investors have begun to grow disenchanted with the group and
broaden their interest into previously ignored sectors. At the same time, we
have seen indications that the Federal Reserve's interest rate hikes were
leading the U.S. economy toward a "soft landing," i.e., a return to moderate,
sustainable growth that would not ignite inflationary pressure. Small-cap value
stocks, and especially our portfolio, benefited from this new market
environment. More investors now appear willing to consider small-cap value
stocks at the same time that a more optimistic economic outlook should benefit
these companies.
The market did close the quarter on a more cautious note, as investors
seemed less confident in the Fed's ability to achieve the soft landing. The twin
concerns of rapidly rising oil prices and a weak European currency threatened to
interrupt an extended period of robust corporate earnings. A diverse string of
companies pre-announced earnings below expectations, including DuPont, Gillette,
Caterpillar, Apple, Intel and Priceline.com. A number of these shortfalls came
in the technology sector, which has been a primary driver leading both the U.S.
economy and stock markets higher over the last two years. The Fund's portfolio
held up well in this more uncertain environment due to the fact that our stocks
are priced at valuations that already discount most negative possibilities.
The dramatic shift in the market environment this quarter can best be
appreciated by reviewing the behavior of one portfolio holding. Carpenter
Technology is a specialty metals company whose earnings were hurt by the global
economic problems that began in 1997. This earnings decline drove down the
stock's valuation and put the stock in our value universe and then in our
portfolio. Fundamentals began to improve for Carpenter in the fourth quarter of
1999; and in January 2000, the company reported quarterly earnings, which, for
the first time in almost two years, were up over the previous year. Despite this
fundamental turnaround, the stock declined significantly in the first quarter;
investors were selling "old economy" stocks to invest in the hot Internet
stocks. In August, Carpenter reported, for the third time in a row, quarterly
earnings that beat those reported in the previous year. In the new market
environment, investors finally took notice of the earnings improvement and took
the stock up over 50% in August, exemplifying the dramatic shift in focus and
sentiment.
This new attention toward small-cap value stocks may unleash the tremendous
potential existing in our portfolio. Our portfolio, according to consensus
analyst earnings predictions, has growth prospects similar to the Russell 2000
Value, yet it has an average price-to-earnings ratio that is just over half of
the benchmark's valuation. At the same time, the Russell 2000 Value's valuation
compared to large-cap stocks is at a much lower level than we have seen in the
last twenty years. Our stocks are very out of favor relative to the U.S. equity
market and to a degree that is not justified by fundamental prospects. Any
movement toward a more normal and reasonable valuation level for our stocks will
produce superb returns from our portfolio.
8
<PAGE>
An important indication of our portfolio's potential is the dramatic rise
in the number of holdings being acquired at significant premiums to market
prices. Across our small-cap portfolios, the number of stocks taken over has
risen from an average of 5 to 10 per quarter in early 1998 to 25 to 40 per
quarter currently. Those closest to these companies, such as management and
competitors, recognize that, at current prices, many of these stocks are too
attractive not to purchase the whole company. Almost all of these deals have
been for cash, demonstrating the buyers' confidence in the value of their
purchase.
With investors' concerns about corporate earnings growth, the stock market
has continued to decline early in the fourth quarter. Should markets continue to
weaken, our stocks are priced to provide defensive returns, falling less than
other stocks just as they have done in previous down markets. The portfolio has
demonstrated its defensive strength this year; on days when the Russell 2000 was
down, our portfolio outperformed the index by an average of 1.1%. Similarly, on
days when the Russell 2000 Value fell, our portfolio was down on average 0.3%
less than that benchmark. However, should the earnings outlook brighten, our
companies will benefit fundamentally and their deep valuation discounts offer
tremendous upside potential.
In our experience with portfolio management, as well as in our historical
research, we have seen previous periods like the one that ended earlier this
year (where investors had an undue focus on a narrow portion of the market).
This recent period was the most extended example of such an environment we have
seen, and our portfolio's performance lag was the greatest we have experienced.
However, investors' focus has always returned to the long-term fundamental
drivers of markets: earnings, valuations and economic worth. Our portfolios have
excelled in these environments because these principles define our investment
process. Following periods when our portfolios have lagged the Russell 2000
Value for three years, we have subsequently beaten the benchmark over the next
three years by 3.3% on an average, annual basis. The turn in both the market and
in our portfolio's performance indicates that we have entered this recovery
phase and the opportunity in our portfolio is as great as we have ever seen.
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 Directors
October 24, 2000
DJIA 10393.1
9
<PAGE>
Portfolio Managers' Comments
Financial Services Fund
That large collective sigh you heard during the last six months was
financial stock investors finally coming out of their caves. Since the end of
March, Wall Street has begun to look at financial stocks in a much more
favorable light. It is becoming clear, as witnessed by some very large companies
pre-announcing lower than expected earnings; that the economy is slowing down.
Since a slowing economy has been Mr. Greenspan's perceived goal, an investor
should surmise that we have reached the end of interest rate increases. The most
optimistic of us are even looking for a rate cut. This shift in economic
perspective is the reason why financial stocks have outperformed the broader
averages for the six-month period between March and September of this year. The
S&P Financial Stock Index was up 20.3% for this period, versus the S&P 500
returning a negative 3.6%. While the Fund handily beat the S&P 500 by returning
18.5% for the same period, it underperformed the Financial Index because it
holds less large-cap names and more banking stocks than the Index does.
We remain very positive on financial stocks for the foreseeable future, as
the macro trends are extremely favorable. According to a presentation by
Hartford Financial Services Group, every 8 seconds one American turns 50, and
the number of millionaires in the U.S. is expected to triple by 2005. Further,
Boston College researchers estimate the wealth transfer to younger generations
by 2052 will be a staggering $41 to $136 trillion. This will result in asset
accumulation and estate planning products, especially with tax advantages,
having much higher growth rates going forward. Smart company managements are
positioning themselves to be leading players in the aggregation of assets for
high net worth individuals.
As valuation concerns have become forefront in the investor's psyche, we
see financial stocks continuing to do well. Since we believe the market will
only become more volatile as this year comes to a close, these stocks should
provide somewhat of a safe haven, as financial stocks generally sell at half the
market multiple.
There has also been a marked increase in merger activity in the last six
months. There were some high profile deals, namely, Paine Webber being purchased
by UBS Group, Citigroup buying Associates, and AXA Financial selling Donaldson
Lufkin and then selling themselves to their parent, but the blockbuster deal was
Chase Manhattan buying J.P. Morgan. What many of these companies have in common
is that they have the ability to give financial advice. The outlook for these
companies is truly bright. According to Louis Harvey, President of Dalbar, Inc.,
"We estimate that today, only about 11 million households use financial advisers
and in 15 years that number will be about 60 million. We're looking for a boom
in financial advice that will rival what we've seen in mutual funds over the
last 15 years."
Taking this one step further, it would make the most sense for a consumer
to be able to go to one adviser who can address all their financial needs
throughout their lifecycle. This concept is known as convergence; we see this as
being the impetus for mergers going forward. We have positioned the Fund to
participate in this trend.
10
<PAGE>
In summary, while we remain concerned about the possibility of a recession
in this country as corporate earnings are beginning to slow, higher energy
prices and the lack of growth with our major trading partners all point toward
future economic problems. The Federal Reserve will likely begin to reduce rates
as soon as this economic slowdown becomes more apparent, which should help the
performance of the Fund. Also, once the election is over, the Federal Reserve
will no longer have their hands tied and can be more aggressive. As always we
appreciate your support and patience.
Amy LaGuardia, CFA
Miles Seifert
Co-Portfolio Managers
October 23, 2000
DJIA 10271.7
11
<PAGE>
Performance Information
Legg Mason Investors Trust, Inc.
Total Returns for One Year, Five Years and Life of Class, as of September 30,
2000
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.
Financial Services Fund also offers Class A shares. The Navigator Classes of
American Leading Companies, Balanced Trust and Financial Services Fund are not
currently active. Information about the Navigator Class of U.S. Small-Cap Value
Trust, offered only to certain institutional investors, is contained in a
separate report to its shareholders.
The Funds' total returns as of September 30, 2000, were as follows:
<TABLE>
<CAPTION>
Financial Services Fund
---------------------------------------
Including Excluding
American Leading Balanced U.S. Small-Cap Maximum Maximum
Companies Trust Trust Value Trust Sales Charge/A/ Sales Charge/A/
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Average Annual Total
Return
Primary Class:
One Year +7.78% +7.88% -1.53% N/A +20.22%
Five Years +15.74% N/A N/A N/A N/A
Life of Class/B/ +13.15% +7.42% -7.96% N/A +4.60%
Class A:
One Year N/A N/A N/A +15.36% +21.05%
Life of Class/C/ N/A N/A N/A +2.71% +5.42%
Cumulative Total Return
Primary Class:
One Year +7.78% +7.88% -1.53% N/A +20.22%
Five Years +107.69% N/A N/A N/A N/A
Life of Class/B/ +140.02% +33.16% -17.33% N/A +8.80%
Class A:
One Year N/A N/A N/A +15.36% +21.05%
Life of Class/C/ N/A N/A N/A +5.14% +10.40%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Class A shares are subject to a front-end sales charge which varies
depending on the purchase amount. The maximum charge is 4.75% and it is
reduced as the purchase amount increases. See the prospectus for additional
information.
/B/ 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
Financial Services Fund -- November 16, 1998
/C/ Financial Services Fund Class A inception date is November 16, 1998.
N/A -- Not applicable.
12
<PAGE>
American Leading Companies Trust
Selected Portfolio Performance*
Strong performers for the 3rd quarter 2000
----------------------------------------------------
1. McKesson HBOC, Inc. +46.0%
2. Bank One Corporation +45.4%
3. Washington Mutual, Inc. +37.9%
4. Fannie Mae +37.0%
5. MGIC Investment Corporation +34.3%
Weak performers for the 3rd quarter 2000
----------------------------------------------------
1. The FINOVA Group Inc. -44.2%
2. Intel Corporation -37.8%
3. Albertson's, Inc. -36.8%
4. WorldCom, Inc. -33.8%
5. Eastman Kodak Company -31.3%
* Securities held for the entire quarter.
Portfolio Changes
Securities added during the 3rd quarter 2000
----------------------------------------------------
Lexmark International, Inc.
Securities sold during the 3rd quarter 2000
----------------------------------------------------
Aetna Inc.
Burlington Northern Santa Fe Corporation
Conseco, Inc.
Dell Computer Corporation
Hewlett-Packard Company
Sara Lee Corporation
Sprint Corporation
Tommy Hilfiger Corporation
Visteon Corporation
13
<PAGE>
Performance Information -- Continued
Balanced Trust
Selected Portfolio Performance*
Strong performers for the 3rd quarter 2000
-------------------------------------------------------
1. Guidant Corporation +42.8%
2. Fannie Mae +37.0%
3. Mellon Financial Corporation +27.3%
4. Marshall & Ilsley Corporation +20.8%
5. Citigroup Inc. +19.6%
Weak performers for the 3rd quarter 2000
-------------------------------------------------------
1. Lucent Technologies, Inc. -48.4%
2. Intel Corporation -37.8%
3. Dell Computer Corporation -37.5%
4. WorldCom, Inc. -33.8%
5. Microsoft Corporation -24.6%
* Securities held for the entire quarter.
Portfolio Changes
Securities added during the 3rd quarter 2000
-------------------------------------------------------
General Motors Acceptance Corporation,
6.30%, 7/8/02
Government National Mortgage Association,
8%, 7/15/30
Target Corporation
Texas Instruments Incorporated
Securities sold during the 3rd quarter 2000
-------------------------------------------------------
Ford Motor Company
Kansas City Southern Industries, Inc.
Safeway Inc., 5.75%, 11/15/00
United States Treasury Notes, 6.50%, 5/31/02
Visteon Corporation
14
<PAGE>
U.S. Small-Capitalization Value Trust +
Selected Portfolio Performance*
Strong performers for the 3rd quarter 2000
-------------------------------------------------------
1. R.H. Phillips, Inc. +158.1%
2. Beverly Enterprises, Inc. +111.1%
3. Republic Group Incorporated +104.2%
4. Del Webb Corporation +81.2%
5. Standard Pacific Corp. +80.0%
Weak performers for the 3rd quarter 2000
-------------------------------------------------------
1. Owens Corning -71.6%
2. PSC Inc. -63.1%
3. Home Products International, Inc. -59.7%
4. RailWorks Corporation -57.7%
5. Mail-Well, Inc. -48.6%
+ Portfolio changes have not been reported for U.S. Small-Cap due to the
high volume of trading during the quarter.
* Securities held for the entire quarter.
Financial Services Fund
Selected Portfolio Performance*
Strong performers for the 3rd quarter 2000
-------------------------------------------------------
1. Southwest Bancorporation of Texas, Inc. +57.5%
2. DST Systems, Inc. +54.4%
3. AXA Financial, Inc. +49.8%
4. Greater Bay Bancorp +48.5%
5. TCF Financial Corporation +46.5%
Weak performers for the 3rd quarter 2000
-------------------------------------------------------
1. Centennial Bancorp -27.2%
2. Eli Lilly & Company -18.8%
3. Jack Henry & Associates, Inc. -13.5%
4. Johnson & Johnson -7.8%
5. Wm. Wrigley Jr. Company -6.6%
* Securities held for the entire quarter.
Portfolio Changes
Securities added during the 3rd quarter 2000
-------------------------------------------------------
Alberta Energy Company Ltd.
Countrywide Credit Industries, Inc.
EOG Resources, Inc.
John Hancock Financial Services, Inc.
Manulife Financial Corporation
Nabors Industries, Inc.
National City Corporation
National Commerce Bancorporation
Nationwide Financial Services, Inc.
The Charles Schwab Corporation
The Chase Manhattan Corporation
USA Education Inc.
Securities sold during the 3rd quarter 2000
-------------------------------------------------------
CCB Financial Corporation
Financial Federal Corporation
Hershey Foods Corporation
Kohl's Corporation
Medtronic, Inc.
Merrill Lynch & Co., Inc.
Morgan Stanley Dean Witter & Co.
National Bancorp of Alaska, Inc.
Paine Webber Group Inc.
Safeway Inc.
Synopsys Inc.
Target Corporation
The Home Depot, Inc.
Wachovia Corporation
Wal-Mart Stores, Inc.
15
<PAGE>
Statement of Net Assets
Legg Mason Investors Trust, Inc.
September 30, 2000 (Unaudited)
(Amounts in Thousands)
American Leading Companies Trust
<TABLE>
<CAPTION>
Shares/Par Value
----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock and Equity Interests -- 97.7%
Capital Goods -- 5.3%
Electrical Equipment -- 3.2%
General Electric Company 90 $ 5,192
Koninklijke (Royal) Philips Electronics N.V. 90 3,825
---------
9,017
---------
Waste Management -- 2.1%
Waste Management Inc. 330 5,754
---------
Communications Services -- 6.6%
Telecommunications (Long Distance) -- 4.0%
AT&T Corp. 120 3,525
Qwest Communications International Inc. 160 7,690/A/
---------
11,215
---------
Telephone -- 2.6%
WorldCom, Inc. 235 7,138/A/
---------
Consumer Cyclicals -- 11.9%
Automobiles -- 1.7%
Ford Motor Company 87 2,213
General Motors Corporation 40 2,600
---------
4,813
---------
Lodging/Hotels -- 2.0%
Starwood Hotels & Resorts Worldwide, Inc. 185 5,781
---------
Retail (General Merchandise) -- 1.2%
Wal-Mart Stores, Inc. 70 3,369
---------
Retail (Home Shopping) -- 1.8%
Amazon.com, Inc. 130 4,997/A/
---------
Retail (Specialty - Apparel) -- 4.0%
The TJX Companies, Inc. 495 11,137
---------
Retail (Specialty) -- 1.2%
Toys "R" Us, Inc. 205 3,331/A/
---------
Consumer Staples -- 5.3%
Distributors (Food and Health) -- 2.1%
McKesson HBOC, Inc. 190 5,807
---------
Household Products (Non-Durables) -- 1.0%
Kimberly-Clark Corporation 50 2,791
---------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Staples -- continued
Personal Care -- 1.5%
Avon Products, Inc. 100 $ 4,087
---------
Retail (Food Chains) -- 0.7%
Albertson's Inc. 100 2,100
---------
Financials -- 34.0%
Banks (International) -- 2.1%
Lloyds TSB Group plc 640 5,972
---------
Banks (Major Regional) -- 4.6%
Bank One Corporation 238 9,193
Mellon Financial Corporation 78 3,617
---------
12,810
---------
Banks (Money Center) -- 5.1%
Bank of America Corporation 99 5,185
The Chase Manhattan Corporation 200 9,215
---------
14,400
---------
Financial (Diversified) -- 9.0%
Citigroup Inc. 300 16,218
Fannie Mae 90 6,435
The FINOVA Group Inc. 335 2,429
---------
25,082
---------
Insurance (Property/Casualty) -- 8.5%
Berkshire Hathaway Inc. - Class B 6 12,420/A/
MGIC Investment Corporation 188 11,510
---------
23,930
---------
Savings and Loan Companies -- 4.7%
Washington Mutual, Inc. 327 13,019
---------
Health Care -- 15.5%
Health Care (Diversified) -- 2.9%
Bristol-Myers Squibb Company 85 4,855
Johnson & Johnson 35 3,288
---------
8,143
---------
Health Care (Drugs/Major Pharmaceuticals) -- 3.4%
Merck & Co., Inc. 78 5,806
Schering-Plough Corporation 80 3,720
---------
9,526
---------
</TABLE>
17
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
American Leading Companies Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Health Care -- continued
Health Care (Managed Care) -- 9.2%
Foundation Health Systems, Inc. 650 $ 10,806/A/
UnitedHealth Group Incorporated 150 14,813
---------
25,619
---------
Technology -- 18.6%
Computers (Hardware) -- 7.4%
Gateway, Inc. 200 9,350/A/
International Business Machines Corporation 100 11,250
---------
20,600
---------
Computers (Peripherals) -- 1.8%
Lexmark International, Inc. 132 4,950/A/
---------
Computers (Software/Services) -- 7.0%
America Online, Inc. 204 10,965/A/
Microsoft Corporation 50 3,016/A/
Unisys Corporation 505 5,678/A/
---------
19,659
---------
Electronics (Semiconductors) -- 0.7%
Intel Corporation 50 2,078
---------
Photography/Imaging -- 1.7%
Eastman Kodak Company 120 4,905
---------
Transportation -- 0.5%
Airlines -- 0.5%
AMR Corporation 45 1,471/A/
---------
Total Common Stock and Equity Interests (Identified Cost -- $209,042) 273,501
-----------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements -- 0.9%
Goldman, Sachs & Company
6.60%, dated 9/29/00, to be repurchased at $1,336
on 10/2/00 (Collateral: $1,473 Fannie Mae mortgage-backed
securities, 6%, due 1/1/29, value $1,384) $ 1,336 $ 1,336
Morgan Stanley Dean Witter & Co.
6.58%, dated 9/29/00, to be repurchased at $1,336
on 10/2/00 (Collateral: $1,390 Ginnie Mae mortgage-backed
securities, 7.50%, due 7/20/28, value $1,395) 1,335 1,335
--------
Total Repurchase Agreements (Identified Cost -- $2,671) 2,671
----------------------------------------------------------------------------------------------------------------------------------
Total Investments -- 98.6% (Identified Cost -- $211,713) 276,172
Other Assets Less Liabilities -- 1.4% 3,884
--------
Net assets consisting of:
Accumulated paid-in capital applicable to
14,776 shares outstanding $210,659
Accumulated net investment income/(loss) (831)
Accumulated net realized gain/(loss) on investments 5,770
Unrealized appreciation/(depreciation) of investments 64,458
--------
Net assets -- 100.0% $280,056
========
Net asset value per share:
Primary Class $ 18.95
========
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Non-income producing.
See notes to financial statements.
19
<PAGE>
Statement of Net Assets
Legg Mason Investors Trust, Inc.
September 30, 2000 (Unaudited)
(Amounts in Thousands)
Balanced Trust
<TABLE>
<CAPTION>
Shares/Par Value
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks and Equity Interests -- 63.2%
Basic Materials -- 1.1%
Construction and Building Materials -- 1.1%
Martin Marietta Materials, Inc. 11 $ 402
-------
Capital Goods -- 5.0%
Electrical Equipment -- 1.6%
Emerson Electric Company 9 576
-------
Machinery (Diversified) -- 1.5%
Dover Corporation 12 563
-------
Manufacturing (Diversified) -- 1.9%
Tyco International Ltd. 13 675
-------
Communications Services -- 4.2%
Telecommunications (Long Distance) -- 1.2%
AT&T Corp. 15 441
-------
Telephone -- 3.0%
Broadwing Inc. 20 511/A/
WorldCom, Inc. 19 577/A/
-------
1,088
-------
Consumer Cyclicals -- 3.2%
Retail (Building Supplies) -- 1.8%
The Home Depot, Inc. 12 636
-------
Services -- 1.4%
Cintas Corporation 12 523
-------
Consumer Staples -- 10.7%
Beverages -- 1.9%
Anheuser-Busch Companies, Inc. 16 677
-------
Distributors (Food and Health) -- 1.3%
SYSCO Corporation 10 463
-------
Entertainment -- 2.4%
The Walt Disney Company 10 382
Time Warner Inc. 7 509
-------
891
-------
Restaurants -- 2.1%
McDonald's Corporation 26 770
-------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Staples -- continued
Retail (Department Stores) -- 1.4%
Target Corporation 20 $ 513
--------
Retail (Drug Stores) -- 1.6%
CVS Corporation 13 602
--------
Energy -- 3.8%
Oil and Gas (Exploration and Production) -- 2.5%
BP Amoco Plc 9 496
Texaco Inc. 8 420
--------
916
--------
Oil and Gas (Refining and Marketing) -- 1.3%
Total Fina Elf 7 477
--------
Financials -- 16.1%
Banking -- 1.4%
Marshall & Ilsley Corporation 10 501
--------
Banks (Major Regional) -- 2.4%
Mellon Financial Corporation 19 881
--------
Financial (Diversified) -- 10.0%
Blackrock North American Government Income Trust, Inc. 78 770
Chateau Communities, Inc. 10 268
Citigroup Inc. 17 937
Fannie Mae 14 1,001
Stilwell Financial, Inc. 15 670/A/
--------
3,646
--------
Savings and Loan Companies -- 2.3%
Charter One Financial, Inc. 35 845
--------
Health Care -- 7.8%
Health Care (Diversified) -- 4.3%
Abbott Laboratories 20 927
Johnson & Johnson 7 658
--------
1,585
--------
Health Care (Drugs/Major Pharmaceuticals) -- 1.8%
Merck & Co., Inc. 9 670
--------
</TABLE>
21
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
Balanced Trust -- Continued
<TABLE>
<CAPTION>
Rate Maturity Date Shares/Par Value
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Health Care -- continued
Health Care (Medical Products and
Supplies) -- 1.7%
Guidant Corporation 9 $ 601 /A/
---------
Technology -- 9.8%
Communications Equipment -- 2.8%
Lucent Technologies, Inc. 15 458
Nortel Networks Corporation 9 560
---------
1,018
---------
Computers (Hardware) -- 3.2%
Dell Computer Corporation 18 549 /A/
International Business Machines Corporation 6 630
---------
1,179
---------
Computers (Software/Services) -- 1.6%
Microsoft Corporation 10 603 /A/
---------
Electronics (Semiconductors) -- 2.2%
Intel Corporation 10 416
Texas Instruments Incorporated 8 377
---------
793
---------
Transportation -- 1.5%
Railroads -- 1.5%
Union Pacific Corporation 14 544
---------
Total Common Stocks and Equity Interests
(Identified Cost -- $20,464) 23,079
------------------------------------------------------------------------------------------------------------------
Corporate Bonds and Notes -- 13.7%
Banking and Finance -- 5.6%
Associates Corporation of North America 5.500% 2/15/02 $ 400 393
General Electric Capital Corporation 6.290% 12/15/07 1,000 992
Merrill Lynch & Co., Inc. 6.000% 11/15/04 700 677
---------
2,062
---------
Finance -- 2.1%
General Motors Acceptance Corporation 6.300% 7/8/02 770 763
---------
Hotels and Restaurants -- 1.4%
Hilton Hotels Corp 5.000% 5/15/06 600 505
---------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Rate Maturity Date Shares/Par Value
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Corporate Bonds and Notes -- continued
Media -- 1.8%
Tribune Company 6.500% 7/30/04 $ 700 $ 680
Transportation -- 1.5%
Union Pacific Corporation 5.780% 10/15/01 550 541
Waste Management -- 1.3%
Waste Management Inc. 4.000% 2/1/02 500 470
-------
Total Corporate Bonds and Notes
(Identified Cost -- $5,016) 5,021
------------------------------------------------------------------------------------------------------------
U.S. Government and Agency Obligations -- 12.4%
Fixed-Rate Securities -- 10.8%
Fannie Mae 6.770% 9/1/05 375 377
Fannie Mae 7.250% 1/15/10 750 773
Federal Farm Credit Bank 5.520% 2/25/02 775 765
United States Treasury Notes 6.625% 3/31/02 150 151
United States Treasury Notes 6.500% 5/15/05 to 10/15/06 1,330 1,365
United States Treasury Notes 6.000% 8/15/09 500 502
-------
3,933
-------
Stripped Securities -- 1.6%
United States Treasury STRIPS 8/15/05 200 151 /B/
United States Treasury STRIPS 11/15/05 300 222 /B/
United States Treasury STRIPS 5/15/06 300 216 /B/
-------
589
-------
Total U.S. Government and Agency Obligations
(Identified Cost -- $4,448) 4,522
------------------------------------------------------------------------------------------------------------
U.S. Government Agency Mortgage-Backed
Securities -- 8.5%
Fixed-Rate Securities -- 8.5%
Fannie Mae 6.000% 1/1/27 536 504
Fannie Mae 7.125% 2/15/05 375 383
Government National Mortgage Association 6.000% 8/15/28 to 10/15/28 1,072 1,005
Government National Mortgage Association 8.000% 2/15/30 to 7/15/30 1,186 1,208
-------
Total U.S. Government Agency Mortgage-Backed
Securities (Identified Cost -- $3,127) 3,100
------------------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
Balanced Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements -- 1.7%
State Street Corporation
3.50%, dated 9/29/00, to be repurchased at $620 on
10/2/00 (Collateral: $625 Fannie Mae mortgage-backed
securities, 6.35%, due 6/22/01, value $640) $ 620 $ 620
-------
Total Repurchase Agreements (Identified Cost -- $620) 620
----------------------------------------------------------------------------------------------
Total Investments -- 99.5% (Identified Cost -- $33,675) 36,342
Other Assets Less Liabilities -- 0.5% 167
-------
Net assets consisting of:
Accumulated paid-in capital applicable to
2,993 shares outstanding $ 32,977
Under/(over) distributed net investment income 82
Accumulated net realized gain/(loss) on investments 783
Unrealized appreciation/(depreciation) of investments 2,667
--------
Net assets -- 100.0% $36,509
=======
Net asset value per share:
Primary Class $ 12.20
=======
----------------------------------------------------------------------------------------------
</TABLE>
/A/ Non-income producing.
/B/ STRIPS -- Separate Trading of Registered Interest and Principal of
Securities. A pre-stripped zero coupon bond that is a direct obligation
of the U.S. Treasury.
See notes to financial statements.
24
<PAGE>
Statement of Net Assets
Legg Mason Investors Trust, Inc.
September 30, 2000 (Unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
U.S. Small-Capitalization Value Trust
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock and Equity Interests -- 95.3%
Basic Materials -- 8.1%
Agricultural Products -- 1.6%
DIMON Incorporated 16 $ 50
Standard Commercial Corporation 9 41
The Anderson's Inc. 6 53
Universal Corporation 25 725
--------
869
--------
Chemicals -- 0.3%
Aceto Corporation 1 9
Georgia Gulf Corporation 10 118
Hawkins Chemical, Inc. 3 23
--------
150
--------
Chemicals (Specialty) -- 2.9%
A. Schulman, Inc. 19 210
American Vanguard Corporation 1 9
Bairnco Corporation 6 41
Ethyl Corporation 89 128
International Specialty Products Inc. 22 118 /A/
NL Industries, Inc. 39 824
Omnova Solutions Inc. 13 75
Quaker Chemical Corporation 7 114
USEC Inc. 3 11
--------
1,530
--------
Construction Materials -- 0.6%
Oglebay Norton Company 3 92
Texas Industries, Inc. 8 246
--------
338
--------
Containers and Packaging (Paper) -- 0.6%
Mail-Well, Inc.
Northern Technologies 17 74 /A/
International Corporation 2 16
Rock-Tenn Company 22 218
--------
308
--------
Metals/Mining -- N.M.
Lindberg Corporation 4 28
--------
</TABLE>
25
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
<TABLE>
<CAPTION>
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Paper and Forest Products -- 0.3%
Baltek Corporation 1 $ 3 /A/
BCT International, Inc. 3 5 /A/
FiberMark, Inc. 5 54 /A/
Nortek, Inc. 3 60 /A/
Republic Group Incorporated 2 29
---------
151
---------
Steel Products -- 1.3%
Commercial Metals Company 11 281
Friedman Industries, Incorporated 5 18
IMCO Recycling Inc. 13 78
Niagara Corporation 5 20 /A/
Quanex Corporation 10 198
Roanoke Electric Steel Corporation 3 33
Steel Technologies Inc. 8 48
---------
676
---------
Steel (Producers) -- 0.5%
Bayou Steel Corporation 9 16 /A/
Northwest Pipe Company 4 49 /A/
UCAR International, Inc. 14 173 /A/
---------
238
---------
Capital Goods -- 16.6%
Aerospace/Defense -- 2.0%
AAR CORP. 2 17
Alliant Techsystems Inc. 5 386 /A/
Kellstrom Industries, Inc. 8 42 /A/
Ladish Co., Inc. 9 122 /A/
Triumph Group, Inc. 9 320 /A/
Woodward Governor Company 4 187
---------
1,074
---------
Containers (Metal and Glass) -- 1.1%
Ball Corporation 14 453
Silgan Holdings Inc. 14 131 /A/
---------
584
---------
Electrical Equipment -- 0.7%
A.O. Smith Corporation 9 112
Boston Acoustics, Inc. 4 52
Catalina Lighting, Inc. 3 10 /A/
Cohu, Inc. 5 78
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Electrical Equipment -- continued
EDO Corporation 4 $ 36
Koss Corporation 2 46 /A/
Tech/Ops Sevcon, Inc. 1 15
The Carbide/Graphite Group, Inc. 4 13 /A/
--------
362
--------
Engineering and Construction -- 0.9%
Butler Manufacturing Company 5 112
Comfort Systems USA, Inc. 14 72 /A/
Corrpro Companies 5 21 /A/
Encompass Services Corporation 22 182 /A/
Meadow Valley Corporation 2 7 /A/
Perini Corporation 4 17 /A/
RailWorks Corporation 3 10 /A/
URS Corporation 5 62 /A/
--------
483
--------
Machinery (Diversified) -- 2.6%
AVTEAM, Inc. 1 1 /A/
Cascade Corporation 9 135
Detroit Diesel Corporation 9 214
JLK Direct Distribution Inc. 8 71 /A/
Met-Pro Corporation 2 22
Milacron Inc. 30 397
Pitt-Des Moines, Inc. 2 67
Raven Industries, Inc. 4 56
Shiloh Industries, Inc. 4 29 /A/
TB Wood's Corporation 4 45
Tecumseh Products Company 6 239
The Manitowoc Company, Inc. 5 96
--------
1,372
--------
Manufacturing (Diversified) -- 4.2%
Alltrista Corporation 6 120 /A/
Amcast Industrial Corporation 1 11
Ampco-Pittsburgh Corporation 7 68
Baldwin Technology Company, Inc. 13 24 /A/
CIRCOR International, Inc. 1 13
Donnelly Corporation 3 41
GenCorp Inc. 14 111
Graham Corporation 1 13 /A/
Griffon Corporation 23 176 /A/
Kaman Corporation 17 208
</TABLE>
27
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Manufacturing (Diversified) -- continued
Lawson Products, Inc. 6 $ 140
Myers Industries, Inc. 6 82
NACCO Industries, Inc. 6 256
National Service Industries, Inc. 13 260
Penn Engineering & Manufacturing Corp. - Class A 4 130
Standex International Corporation 8 158
Terex Corporation 6 73/A/
The First Years Inc. 2 18
The York Group, Inc. 6 39/A/
Trinity Industries, Inc. 11 264
--------
2,205
--------
Manufacturing (Specialized) -- 2.8%
Briggs & Stratton Corporation 7 261
Fansteel Inc. 5 17/A/
Gehl Company 4 41/A/
JLG Industries, Inc. 1 17
Lincoln Electric Holdings, Inc. 14 186
PrimeSource Corporation 4 18
Regal-Beloit Corporation 13 224
Specialty Equipment Companies, Inc. 8 202/A/
SPS Technologies, Inc. 4 199/A/
York International Corporation 12 308
--------
1,473
--------
Metals -- 1.1%
Chase Industries, Inc. 11 95/A/
General Cable Corporation 13 95
Metals USA, Inc. 29 84
Ryerson Tull, Inc. 8 76
Superior TeleCom Inc. 10 58
Wolverine Tube, Inc. 10 152/A/
--------
560
--------
Office Equipment and Supplies -- 1.0%
Ennis Business Forms, Inc. 12 92
New England Business Service, Inc. 4 72
The Standard Register Company 16 248
Wallace Computer Services, Inc. 8 127
--------
539
--------
</TABLE>
28
<PAGE>
Shares/Par Value
---------------------------------------------------------------------------
Trucks and Parts -- 0.1%
Collins Industries, Inc. 5 $ 17
Featherlite Inc. 4 11/A/
Standard Automotive Corporation 1 7/A/
Supreme Industries, Inc. 9 38/A/
Wabash National Corporation N.M. 2
--------
75
--------
Waste Management -- 0.1%
The IT Group, Inc. 7 35/A/
--------
Consumer Cyclicals -- 35.9%
Auto Parts and Equipment -- 6.3%
ArvinMeritor, Inc. 17 251
Bandag, Incorporated 13 460
Bandag, Incorporated-Class A 4 103
BorgWarner, Inc. 9 288
Cooper Tire & Rubber Company 27 268
Dura Automotive Systems, Inc. 12 113/A/
Edelbrock Corporation 2 27
Federal-Mogul Corporation 25 136
Gentek, Inc. 16 247
Hayes Lemmerz International, Inc. 10 108/A/
Intermet Corporation 20 144
MascoTech, Inc. 35 578
Midas, Inc. 5 71
R & B, Inc. 6 16/A/
Simpson Industries, Inc. 14 167
Standard Motor Products, Inc. 5 40
Strattec Security Corporation 2 76/A/
TBC Corporation 15 71/A/
Tower Automotive, Inc. 16 145/A/
--------
3,309
--------
Building Materials -- 1.8%
Ameron International Corporation 3 96
Centex Construction Products, Inc. 6 144
Dal-Tile International Inc. 22 275/A/
Mikasa, Inc. 8 124
Miller Building Systems, Inc. 2 13/A/
NCI Building Systems, Inc. 13 192/A/
Owens Corning 5 14
Universal Forest Products, Inc. 7 84
--------
942
--------
29
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer (Jewelry, Novelties and Gifts) -- 1.4%
Department 56, Inc. 12 $ 162/A/
Enesco Group, Inc. 5 28
Lancaster Colony Corporation 9 214
Michael Anthony Jewelers, Inc. 2 4/A/
OroAmerica, Inc. 4 30/A/
Russ Berrie and Company, Inc. 14 276
--------
714
Footwear -- 0.2% --------
Brown Shoe Company, Inc. 6 51
Saucony, Inc. 1 12/A/
The Stride Rite Corporation 13 67
--------
130
--------
Gaming, Lottery and Parimutuel Companies -- 1.4%
Black Hawk Gaming & Development Company, Inc. 3 18/A/
Boyd Gaming Corporation 46 228/A/
GTECH Holdings Corporation 25 421/A/
Lakes Gaming, Inc. 8 66/A/
--------
733
--------
Hardware and Tools -- 0.4%
Park-Ohio Holdings Corp. 7 52/A/
Q.E.P. Co., Inc. 3 15/A/
The Eastern Company 1 16
The L. S. Starrett Company 4 81
TransTechnology Corporation 4 24
--------
188
--------
Homebuilding -- 9.3%
Beazer Homes USA, Inc. 6 165/A/
Bluegreen Corporation 17 50/A/
Champion Enterprises, Inc. 28 121/A/
Crossmann Communities, Inc. 3 65/A/
D.R.Horton, Inc. 38 646
Del Webb Corporation 14 389/A/
DeWolfe Companies, Inc. 2 16/A/
Dominion Homes, Inc. 4 34/A/
Engle Homes, Inc. 8 126
Fleetwood Enterprises, Inc. 22 302
Hovnanian Enterprises, Inc. 16 119/A/
Kaufman and Broad Home Corporation 14 369
M/I Schottenstein Homes, Inc. 6 122
</TABLE>
30
<PAGE>
Shares/Par Value
------------------------------------------------------------------------------
Homebuilding -- continued
Palm Harbor Homes, Inc. 12 $ 158/A/
Pulte Corporation 3 89
Silverleaf Resorts, Inc. 3 10/A/
Skyline Corporation 3 62
Standard Pacific Corp. 23 407
The Ryland Group, Inc. 12 357
Toll Brothers, Inc. 25 856/A/
Trammell Crow Company 21 317/A/
Trendwest Resorts, Inc. 6 91/A/
Washington Homes, Inc. 5 53/A/
------
4,924
------
Household Furnishings and Appliances -- 1.7%
Chromcraft Revington, Inc. 8 65/A/
Fedders Corporation 20 78
Flexsteel Industries, Inc. 4 50
Furniture Brands International, Inc. 16 273/A/
La-Z-Boy Incorporated 4 51
The Rowe Companies 10 31
U. S. Industries, Inc. 38 376
------
924
------
Leisure Time (Products) -- 1.3%
Arctic Cat, Inc. 5 64
Coachmen Industries Inc. 12 123
Ellett Brothers, Inc. 5 14
Equity Marketing, Inc. 2 31/A/
GameTech International, Inc. 1 3/A/
Johnson Outdoors Inc. 6 39/A/
K2 Inc. 11 100/A/
Monaco Coach Corporation 6 100/A/
Steinway Musical Instruments, Inc. 2 42/A/
Sturm, Ruger & Company, Inc. 8 66
Winnebago Industries, Inc. 7 93
------
675
------
Lodging/Hotels -- 0.8%
Prime Hospitality Corp. 43 432/A/
Suburban Lodges of America, Inc. 2 11/A/
------
443
------
31
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
------------------------------------------------------------------------------
Publishing -- 0.1%
Courier Corporation 2 $ 43
--------
Retail (Building Supplies) -- 0.8%
Building Materials Holding Corporation 9 76/A/
Hughes Supply, Inc. 17 334
Tractor Supply Company 3 32/A/
--------
442
--------
Retail (Department Stores) -- 0.1%
The Bon-Ton Stores, Inc. 3 7/A/
The Elder-Beerman Stores Corp. 5 21/A/
--------
28
--------
Retail (Discounters) -- 0.3%
Duckwall-ALCO Stores, Inc. 4 32/A/
ShopKo Stores, Inc. 9 93/A/
Value City Department Stores, Inc. 3 27/A/
--------
152
--------
Retail (Home Shopping) -- 0.4%
Barnett Inc. 6 81/A/
Spiegel, Inc. 5 39
Systemax, Inc. 25 68/A/
--------
188
--------
Retail (Specialty - Apparel) -- 0.6%
Burlington Coat Factory Warehouse Corporation 2 30
Goody's Family Clothing, Inc. 23 90/A/
One Price Clothing Stores, Inc. 1 2/A/
S&K Famous Brands, Inc. 3 23/A/
The Buckle, Inc. 3 36/A/
The Cato Corporation 13 160
--------
341
--------
Retail (Specialty) -- 1.3%
A.C. Moore Arts & Crafts, Inc. 5 40/A/
Brookstone, Inc. 3 35/A/
Cache, Inc. 2 6/A/
Discount Auto Parts, Inc. 6 42/A/
Finlay Enterprises, Inc. 7 99/A/
Friedman's, Inc. 13 62
Hancock Fabrics, Inc. 4 19
Haverty Furniture Companies, Inc. 6 70
J. Baker, Inc. 4 19
32
<PAGE>
Shares/Par Value
------------------------------------------------------------------------------
Retail (Specialty) -- continued
Jo-Ann Stores, Inc. 6 $ 40/A/
Lithia Motors, Inc. 3 34/A/
MarineMax, Inc. 4 24/A/
Musicland Stores Corporation 12 82/A/
RDO Equipment Co. 4 13/A/
Rush Enterprises, Inc. 2 9/A/
Shoe Carnival, Inc. 4 22/A/
Shoe Pavilion, Inc. 5 14/A/
Travis Boats & Motors, Inc. 1 5/A/
Ugly Duckling Corporation 4 24/A/
United Auto Group, Inc. 6 51/A/
---------
710
---------
Services (Commercial and Consumer) -- 4.4%
Amerco 10 198/A/
Avis Group Holdings, Inc. 22 649/A/
Capital Senior Living
Corporation 14 35/A/
Carriage Services, Inc. 11 25/A/
Castle Dental Centers, Inc. 5 9/A/
Central Garden & Pet Company 21 146/A/
Children's Comprehensive Services, Inc. 5 18/A/
Cornell Companies, Inc. 3 25/A/
Dollar Thrifty Automotive Group, Inc. 8 148/A/
Electro Rent Corporation 2 22/A/
Exponent, Inc. 3 29/A/
FTI Consulting, Inc. 3 24/A/
Horizon Health Corporation 4 21/A/
Interpool, Inc. 20 223
Lennox International Inc. 8 75
McGrath Rentcorp 8 143
National Equipment Services, Inc. 7 34/A/
National Technical Systems, Inc. 6 19
NCH Corporation 2 85
OrthAlliance, Inc. 5 30/A/
ProMedCo Management Company 16 12/A/
Refac 3 8/A/
Right Management Consultants, Inc. 2 23/A/
Schlotzsky's, Inc. 5 21/A/
Service Corporation International 36 88/A/
Stewart Enterprises, Inc. 77 149
Sylvan, Inc. 3 28/A/
Thomas Group, Inc. 3 22/A/
---------
2,309
---------
33
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
--------------------------------------------------------------------------------
Textiles -- 0.1%
Dan River Inc. 7 $ 28 /A/
The Dixie Group, Inc. 9 35 /A/
------
63
------
Textiles (Apparel) -- 2.6%
Cutter & Buck Inc. 3 40 /A/
Decorator Industries, Inc. 2 10
Garan, Incorporated 4 82
Gerber Childrenswear, Inc. 1 5 /A/
Haggar Corp. 1 10
Hartmarx Corporation 4 12 /A/
Jos. A. Bank Clothiers, Inc. 4 17 /A/
Kellwood Company 20 359
Nautica Enterprises, Inc. 37 481 /A/
OshKosh B'Gosh, Inc. 2 32
Oxford Industries, Inc. 6 109
Perry Ellis International, Inc. 4 29 /A/
Sport-Haley, Inc. 3 13 /A/
Superior Uniform Group Inc. 1 10
Tandy Brands Accessories, Inc. 3 22 /A/
UniFirst Corporation 12 124
------
1,355
------
Textiles (Home Furnishings) -- 0.6%
Springs Industries, Inc. 4 99
WestPoint Stevens Inc. 16 198
------
297
------
Consumer Staples -- 6.5%
Beverages (Alcoholic) -- 0.1%
R.H. Phillips, Inc. 4 25 /A/
Todhunter International, Inc. 2 14 /A/
------
39
------
Beverages (Non-Alcoholic) -- 0.2%
M&F Worldwide Corp. 15 85 /A/
------
Distributors (Food and Health) -- 0.4%
Allou Health & Beauty Care, Inc. 2 12 /A/
Herbalife International, Inc. 17 155
Nash-Finch Company 5 54
Suprema Specialties, Inc. 1 10 /A/
------
231
------
34
<PAGE>
Shares/Par Value
--------------------------------------------------------------------------------
Entertainment -- N.M.
Movie Gallery, Inc. 4 $ 14 /A/
------
Food -- 0.6%
Cagle's, Inc. 4 30
Michael Foods, Inc. 9 199
Pilgrim's Pride Corporation 9 61
Pilgrim's Pride Corporation Class A 4 21
------
311
------
Household Products (Non-Durables) -- 0.4%
CPAC, Inc. 4 30
Craftmade International, Inc. 3 22
Stepan Company 7 146
------
198
------
Housewares -- 0.6%
American Biltrite, Inc. 3 39
Applica Incorporated 8 46 /A/
Associated Materials Incorporated 1 14
Foamex International Incorporated 8 48 /A/
Home Products International, Inc. 6 9 /A/
Ivex Packaging Corporation 4 42 /A/
Oneida Ltd. 5 68
Royal Appliance Mfg. Co. 2 13 /A/
Summa Industries 3 37 /A/
------
316
------
Personal Care -- 0.3%
French Fragrances, Inc. 10 87 /A/
Nature's Sunshine Products, Inc. 13 100
------
187
------
Restaurants -- 1.5%
Ark Restaurants Corp. 3 24 /A/
CKE Restaurants, Inc. 27 84
Dave & Busters, Inc. 9 71 /A/
ELXSI Corporation 3 29 /A/
Landry's Seafood Restaurants, Inc. 22 149 /A/
Luby's, Inc. 15 77
NPC International, Inc. 5 45 /A/
Rainforest Cafe, Inc. 15 44 /A/
Roadhouse Grill, Inc. 3 11 /A/
Ryan's Family Steak Houses, Inc. 30 227 /A/
Star Buffet, Inc. 2 6 /A/
Taco Cabana, Inc. 3 12
------
779
------
35
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
--------------------------------------------------------------------------------
Retail (Food Chains) -- 0.1%
Marsh Supermarkets, Inc. 3 $ 54
------
Services -- 0.1%
Correctional Services Corporation 1 5 /A/
Healthcare Services Group, Inc. 8 37 /A/
------
42
------
Sevices (Employment) -- 1.4%
Butler International, Inc. 7 36 /A/
CDI Corp. 14 226 /A/
General Employment Enterprises, Inc. 4 12
Headway Corporate Resources, Inc. 5 12 /A/
Personal Group Of America, Inc. 20 62 /A/
RCM Technologies, Inc. 3 12 /A/
RemedyTemp, Inc. 2 28 /A/
SOS Staffing Services, Inc. 10 24 /A/
Spherion Corporation 23 279 /A/
Westaff, Inc. 12 47 /A/
------
738
------
Specialty Printing -- 0.5%
Cadmus Communications Corporation 5 38
Consolidated Graphics, Inc. 3 37 /A/
John H. Harland Company 9 142
Media Arts Group, Inc. 9 30 /A/
------
247
------
Tobacco -- 0.3%
Schweitzer-Mauduit International, Inc. 12 159
------
Energy -- 0.9%
Oil (International Integrated) -- 0.1%
Holly Corporation 6 77
------
Oil and Gas (Drilling and Equipment) -- 0.1%
Kaneb Services, Inc. 10 48 /A/
------
Oil and Gas (Exploration and Production) -- 0.7%
Adams Resources & Energy 3 40
EnergySouth, Inc. 3 54
Mercury Air Group, Inc. 6 34 /A/
Penn Virginia Corporation 6 164
World Fuel Services Corporation 9 69
------
361
------
36
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Financials -- 15.2%
Banks (Major Regional) -- 3.4%
BancFirst Ohio Corp. 3 $ 43
BSB Bancorp, Inc. 7 152
BYL Bancorp 2 20
Capital Crossing Bank 2 16/A/
Community Bank System, Inc. 2 52
Corrus Bankshares, Inc. 11 397
First Citizens Bancshares Inc. 6 429
First Oak Brook Bancshares, Inc. 2 25
GBC Bancorp 2 68
Granite State Bankshares, Inc. N.M. 8
Hamilton Bancorp Inc. 8 128/A/
Merchants Bancshares, Inc. 3 61
National City Bancorporation 7 123/A/
Pacific Crest Capital, Inc. 2 28
Republic Bancorp Inc. 17 157
Three Rivers Bancorp, Inc. 5 40
USBANCORP, Inc. 10 39
Yardville National Bancorp 2 21
------
1,807
------
Consumer Finance -- 0.5%
Advanta Corp. 13 149
American Business Financial Services, Inc. 1 7
Onyx Acceptance Corporation 2 7/A/
Union Acceptance Corporation 1 6/A/
World Acceptance Corporation 14 72/A/
------
241
------
Financial (Diversified) -- 0.9%
DVI, Inc. 3 60/A/
FPIC Insurance Group, Inc. 3 41/A/
LandAmerica Financial Group, Inc. 9 266
Professionals Group, Inc. 4 98/A/
TFC Enterprises, Inc. 10 15/A/
------
480
------
Insurance Brokers -- 0.3%
E. W. Blanch Holdings, Inc. 4 89
Healthcare Recoveries, Inc. 7 31/A/
Interstate National Dealer Services, Inc. 3 19/A/
Kaye Group Inc. 4 26
------
165
------
</TABLE>
37
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
<TABLE>
<CAPTION>
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Insurance (Life/Health) -- 2.8%
AmerUs Group Co. 22 $ 566
Delphi Financial Group, Inc. 14 579/A/
National Western Life Insurance Company 3 190/A/
Presidential Life Corporation 10 148
Standard Management Corporation 5 16/A/
------
1,499
------
Insurance (Multi-Line) -- 0.2%
Penn Treaty American Corporation 6 104/A/
------
Insurance (Property/Casualty) -- 2.9%
Atlantic American Corporation 1 3/A/
Bancinsurance Corporation 2 11/A/
Donegal Group Inc. 6 45
Enhance Financial Services Group, Inc. 29 382
Merchants Group, Inc. 1 18
Philadelphia Consolidated Holding Corp. 4 84/A/
SCPIE Holdings Inc. 3 68
Selective Insurance Group, Inc. 1 13
State Auto Financial Corporation 3 39
The Commerce Group, Inc. 26 755
The Midland Company 3 90
------
1,508
------
Investment Management -- N.M.
American Physicians Service Group, Inc. 2 6/A/
------
Savings and Loan Companies -- 4.2%
Alliance Bancorp of New England, Inc. 1 9
BankAtlantic Bancorp, Inc. 30 125
BankUnited Financial Corporation 6 43/A/
Camco Financial Corporation 1 15
Dime Community Bancshares 3 64
Downey Financial Corp. 12 458
First Essex Bancorp, Inc. 2 47
First Republic Bank 3 93/A/
First Washington Bancorp, Inc. 1 19
FirstFed Financial Corp. 15 340/A/
Flagstar Bancorp, Inc. 9 115
GA Financial, Inc. 4 50
Hawthorne Financial Corporation 4 43/A/
IBERIABANK Corporation 5 86
Industrial Bancorp, Inc. 1 16
ITLA Capital Corporation 5 73/A/
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Savings and Loan Companies -- continued
Local Financial Corporation 2 $ 19/A/
MAF Bancorp, Inc. 5 122
Matrix Bancorp, Inc. 2 12/A/
MetroWest Bank 4 25
Parkvale Financial Corporation 5 85
PennFed Financial Services, Inc. 3 43
PFF Bancorp, Inc. 3 61
Republic Security Financial Corporation 18 88
St. Francis Capital Corporation 3 51
Sterling Financial Corporation 6 69/A/
WSFS Financial Corporation 4 38
------
2,209
------
Health Care -- 1.9%
Health Care (Diversified) -- 0.2%
Sierra Health Services, Inc. 20 95/A/
------
Health Care (Drugs/Major Pharmaceuticals) -- N.M.
Chattem, Inc. 2 15/A/
Hi-Tech Pharmacal Co., Inc. 2 9/A/
USANA, Inc. 3 9/A/
------
33
------
Health Care (Long-Term Care) -- 0.6%
Beverly Enterprises, Inc. 36 211/A/
Radiologix, Inc. 15 91/A/
------
302
------
Health Care (Managed Care) -- 0.1%
US Oncology, Inc. 10 46/A/
------
Health Care (Medical
Products and Supplies) -- 0.5%
CONMED Corporation 5 70/A/
Del Global Technologies Corp. 5 52/A/
Lakeland Industries, Inc. 1 6/A/
Minntech Corporation 2 14
Ocular Sciences, Inc. 5 61/A/
Sola International Inc. 5 33/A/
Utah Medical Products, Inc. 3 24/A/
------
260
------
</TABLE>
39
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
<TABLE>
<CAPTION>
U.S. Small-Capitalization Value Trust -- Continued
Shares/Par Value
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Health Care (Specialized Services) -- 0.5%
AmeriPath, Inc. 16 $ 229/A/
Curative Health Services, Inc. 7 37/A/
Monarch Dental Corporation 7 12/A/
---
278
---
Technology -- 2.3%
Communications Equipment -- 0.2%
Applied Signal Technology, Inc. 6 41
Brightpoint, Inc. 9 46/A/
Cobra Electronics Corporation 3 20/A/
---
107
---
Computers (Peripherals) -- 0.1%
Printronix, Inc. 4 38/A/
PSC Inc. 9 27/A/
---
65
---
Computers (Software/Services) -- 1.0%
Amplicon, Inc. 6 90
Avant! Corporation 24 442/A/
Bell Industries, Inc. 2 4
----
536
----
Electronics (Component Distributors) -- 0.5%
Pioneer-Standard Electronics, Inc. 18 244
----
Electronics (Instrumentation) -- 0.1%
Hurco Companies, Inc. 4 18/A/
K-Tron International, Inc. 2 36/A/
Mesa Laboratories, Inc. 2 9/A/
O.I. Corporation N.M. 1/A/
---
64
---
Electronics (Semiconductors) -- 0.2%
NeoMagic Corporation 20 75/A/
---
Equipment (Semiconductors) -- N.M.
Farrel Corporation 3 4
---
Services (Computer Systems) -- 0.2%
Gerber Scientific, Inc. 7 58
Software Spectrum, Inc. 3 28/A/
----
86
----
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Transportation -- 6.0%
Air Freight -- N.M.
Air Methods Corporation 3 $ 9/A/
----
Airlines -- 1.3%
Alaska Air Group, Inc. 9 209/A/
America West Holdings Corporation 32 390/A/
Amtran, Inc. 2 19/A/
Mesaba Holdings, Inc. 1 15/A/
Midway Airlines Corporation 6 31/A/
----
664
----
Railroads -- 1.4%
Genesee & Wyoming Inc. 3 70/A/
The Greenbrier Companies, Inc. 11 91
Wabtec Corporation 23 232
Wisconsin Central Transportation Corporation 33 347/A/
----
740
----
Truckers -- 3.3%
American Freightways Corporation N.M 6/A/
Arkansas Best Corporation 14 218/A/
Arnold Industries, Inc. 19 314
Boyd Bros. Transportation Inc. 2 9/A/
Covenant Transport, Inc. 11 104/A/
M. S. Carriers, Inc. . N.M 2/A/
Old Dominion Freight Line, Inc. 5 53/A/
P.A.M. Transportation Services, Inc. 6 58/A/
Roadway Express, Inc. 15 267
Rollins Truck Leasing Corp. 21 134
Transport Corporation of America, Inc. 5 30/A/
U.S. Xpress Enterprises, Inc. 11 70/A/
USA Truck, Inc. 6 34/A/
USFreightways Corporation 5 123
Yellow Corporation 20 301/A/
------
1,723
------
Utilities -- 1.9%
Electric Companies -- 1.9%
Maine Public Service Company 1 30
Public Service Company of New Mexico 24 613
RGS Energy Group, Inc. 12 350
------
993
------
Total Common Stock and Equity Interests (Identified Cost -- $58,377) 50,189
---------------------------------------------------------------------------------------------------------
</TABLE>
41
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION> Shares/Par Value
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements -- 1.5%
Goldman, Sachs & Company
6.60%, dated 9/29/00, to be repurchased at $805
on 10/2/00 (Collateral: $879 Fannie Mae mortgage-backed
securities, 6%, due 1/1/29, value $825) $ 805 $ 805
--------
Total Repurchase Agreements (Identified Cost -- $805) 805
-----------------------------------------------------------------------------------------------------------------
Total Investments -- 96.8% (Identified Cost -- $59,182) 50,994
Other Assets Less Liabilities -- 3.2% 1,681
----------
Net assets consisting of:
Accumulated paid-in capital applicable to:
6,601 Primary Class shares outstanding $ 64,816
4 Navigator Class shares outstanding 46
Undistributed net investment income/(loss) (58)
Accumulated net realized gain/(loss) on investments (3,941)
Unrealized appreciation/(depreciation) of investments (8,188)
----------
Net assets -- 100.0% $ 52,675
==========
Net asset value per share:
Primary Class $ 7.97
==========
Navigator Class $ 8.17
==========
---------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Non-income producing.
N.M. - Not meaningful.
See notes to financial statements.|
42
<PAGE>
Statement of Net Assets
Legg Mason Investors Trust, Inc.
September 30, 2000 (Unaudited)
(Amounts in Thousands)
Financial Services Fund
<TABLE>
<CAPTION>
Shares/Par Value
-------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock and Equity Interests -- 94.6%
Capital Goods -- 0.8%
Electrical Equipment -- 0.8%
Solectron Corporation 8 $ 369/A/
-----
Consumer Cyclicals -- 0.4%
Services (Commercial and Consumer) -- 0.4%
Cintas Corporation 5 218
-----
Consumer Staples -- 3.4%
Food -- 1.0%
Riviana Foods, Inc. 13 223
Wm. Wrigley Jr. Company 4 284
-----
507
-----
Retail (Drug Stores) -- 1.8%
CVS Corporation 10 463
Walgreen Co. 11 418
-----
881
-----
Retail (Food Chains) -- 0.6%
The Kroger Co. 12 271/A/
-----
Energy -- 2.5%
Oil and Gas (Drilling and Equipment) -- 0.9%
Nabors Industries, Inc. 8 419/A/
-----
Oil and Gas (Exploration and Production) -- 1.6%
Alberta Energy Company Ltd. 10 416
EOG Resources, Inc. 10 389
-----
805
-----
Financials -- 74.3%
Banking -- 23.4%
BancWest Corporation 17 326
Cascade Bancorp 25 344
Centennial Bancorp 10 60/A/
City National Corporation 15 579
Commerce Bancshares, Inc. 17 607
Cullen/Frost Bankers, Inc. 15 488
CVB Financial Corp. 20 336
First Security Corporation 30 489
Greater Bay Bancorp 15 1,042
Marshall & Ilsley Corporation 13 652
Mercantile Bankshares Corporation 13 472
Mid-State Bancshares 20 625
</TABLE>
43
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
Financial Services Fund-- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-------------------------------------------------------------------------------------------
<S> <C> <C>
Banking -- continued
Mississippi Valley Bancshares, Inc. 10 $ 258
National Commerce Bancorporation 16 318
North Fork Bancorporation, Inc. 33 714
Pacific Capital Bancorp 15 401
Pacific Century Financial Corporation 30 514
Seacoast Banking Corporation of Florida 10 247
Southwest Bancorporation of Texas, Inc. 15 490/A/
TCF Financial Corporation 23 865
Texas Regional Bancshares, Inc. 22 624
Wilmington Trust Corporation 8 402
Zions Bancorporation 12 588
------
11,441
------
Banks (Major Regional) -- 17.2%
BB&T Corporation 23 693
Comerica Incorporated 15 877
Fifth Third Bancorp 18 970
Firstar Corporation 20 447
FleetBoston Financial Corporation 21 819
National City Corporation 20 443
Northern Trust Corporation 10 889
Old Kent Financial Corporation 17 486
State Street Corporation 8 1,040
SunTrust Banks, Inc. 12 573
U.S. Bancorp 15 341
Wells Fargo Company 19 855
------
8,433
------
Banks (Money Center) -- 3.3%
Bank of America Corporation 12 639
Colorado Business Bankshares, Inc. 16 271
The Chase Manhattan Corporation 15 693
------
1,603
------
Consumer Finance -- 0.9%
Countrywide Credit Industries, Inc. 12 453
------
Financial (Diversified) -- 3.1%
Citigroup Inc. 15 793
USA Education Inc. 15 723
------
1,516
------
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------
<S> <C> <C>
Insurance (Life/Health) -- 9.6%
American General Corporation 8 $ 647
Jefferson-Pilot Corporation 11 746
John Hancock Financial Services, Inc. 24 631/A/
Lincoln National Corporation 14 674
Manulife Financial Corporation 25 519
Nationwide Financial Services, Inc. 15 561
Protective Life Corporation 18 538
UnumProvident Corporation 15 409
------
4,725
------
Insurance (Multi-Line) -- 2.4%
American International Group, Inc. 5 431
StanCorp Financial Group, Inc. 17 727
------
1,158
------
Insurance (Property/Casualty) -- 1.3%
Philadelphia Consolidated Holding Corp. 30 626/A/
------
Investment Banking/Brokerage -- 5.6%
A.G. Edwards, Inc. 10 523
AXA Financial, Inc. 18 917
The Charles Schwab Corporation 20 710
Waddell & Reed Financial, Inc. 20 620
------
2,770
------
Investment Management -- 4.7%
Affiliated Managers Group, Inc. 13 740/A/
Neuberger Berman Incorporated 14 861
T. Rowe Price Associates, Inc. 15 704
------
2,305
------
Savings and Loan Companies -- 2.8%
Harbor Florida Bancshares, Inc. 30 362
Washington Mutual, Inc. 25 995
------
1,357
------
Health Care -- 4.9%
Health Care (Diversified) -- 0.8%
Johnson & Johnson 4 376
------
Health Care (Drugs/Major Pharmaceuticals) -- 2.5%
Elan Corporation plc 7 356/A/
Eli Lilly & Company 4 324
Pfizer Inc. 13 566
------
1,246
------
</TABLE>
45
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Investors Trust, Inc.
<TABLE>
<CAPTION>
Financial Services Fund-- Continued
Shares/Par Value
----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Health Care (Medical Products and Supplies) -- 1.1%
Guidant Corporation 8 $ 530/A/
--------
Health Care (Specialized Services) -- 0.5%
Hooper Holmes, Inc. 25 238
--------
Technology -- 8.3%
Computers (Hardware) -- 1.4%
International Business Machines Corporation 6 675
--------
Computers (Software/Services) -- 1.3%
Jack Henry & Associates, Inc. 15 651
--------
Services (Computer Systems) -- 0.8%
Computer Sciences Corporation 6 408/A/
--------
Services (Data Processing) -- 4.8%
DST Systems, Inc. 7 764/A/
Fiserv, Inc. 14 838/A/
The BISYS Group, Inc. 10 734/A/
--------
2,336
--------
Total Common Stock and Equity Interests (Identified Cost -- $39,261) 46,317
----------------------------------------------------------------------------------------------------------------
Repurchase Agreements -- 5.3%
Goldman, Sachs & Company
6.60%, dated 9/29/00, to be repurchased at $2,594
on 10/2/00 (Collateral: $2,860 Fannie Mae mortgage-backed
securities, 6%, due 1/1/29, value $2,686) $2,593 2,593
--------
Total Repurchase Agreements (Identified Cost -- $2,593) 2,593
----------------------------------------------------------------------------------------------------------------
Total Investments -- 99.90% (Identified Cost -- $41,854) 48,910
Other Assets Less Liabilities -- 0.10% 31
--------
Net assets -- 100.0% $ 48,941
========
</TABLE>
46
<PAGE>
<TABLE>
-------------------------------------------------------------------------------------------------------------------
<S> <C>
Net assets consisting of:
Accumulated paid-in capital applicable to:
3,562 Primary Class shares outstanding $35,330
922 Class A shares outstanding 9,389
Undistributed net investment income/(loss) (58)
Accumulated net realized gain/(loss) on investments (2,776)
Unrealized appreciation/(depreciation) of investments 7,056
-------
Net assets -- 100.0% $48,941
=======
Net asset value per share:
Primary Class $ 10.88
=======
Net asset value and redemption price per share -- Class A $ 11.04
=======
Maximum offering price per share -- Class A $ 11.59
=======
--------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Non-income producing.
See notes to financial statements.
47
<PAGE>
Statements of Operations
Legg Mason Investors Trust, Inc.
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended 9/30/00
--------------------------------------------------------------------
U.S. Financial
American Leading Balanced Small-Capitalization Services
Companies Trust Trust Value Trust Fund
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends/A/ $1,894 $ 180 $ 437 $ 339
Interest 98 389 41 34
------ ------- ------- -------
Total income 1,992 569 478 373
------ ------- ------- -------
Expenses:
Management fee 1,086 137 228 215
Distribution and service fees 1,448 137 268 181
Transfer agent and shareholder
servicing expense 122 22 52 44
Audit and legal fees 25 22 18 31
Custodian fee 62 30 86 77
Directors' fees 8 4 4 4
Organization expense -- 9 4 --
Registration fees 11 10 12 31
Reports to shareholders 57 11 19 16
Other expenses 4 -- 1 59
------ ------- ------- -------
2,823 382 692 658
Less fees waived -- (44) (156) (227)
------ ------- ------- -------
Total expenses, net of waivers 2,823 338 536 431
------ ------- ------- -------
Net Investment Income/(Loss) (831) 231 (58) (58)
------ ------- ------- -------
Net Realized and Unrealized Gain/(Loss) on Investments:
Realized gain/(loss) on investments 6,817 908 (2,657) 1,019
Change in unrealized appreciation/
(depreciation) of investments (284) 007) 6,241 6,552
------ ------- ------- -------
Net Realized and Unrealized
Gain/(Loss) on Investments 6,533 (99) 3,584 7,571
--------------------------------------------------------------------------------------------------------------------------------
Change in Net Assets Resulting
From Operations $5,702 $ 132 $ 3,526 $ 7,513
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Net of foreign taxes withheld of $13 and $1 for American Leading Companies
and Balanced Trust, respectively.
See notes to financial statements.
48
<PAGE>
Statements of Changes in Net Assets
Legg Mason Investors Trust, Inc.
(Amounts in Thousands)
<TABLE>
<CAPTION>
American Leading
Companies Trust Balanced Trust
------------------------------- ----------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
9/30/00 3/31/00 9/30/00 3/31/00
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Change in Net Assets: (Unaudited) (Unaudited)
Net investment income/(loss) $ (831) $ (1,846) $ 231 $ 760
Net realized gain/(loss) on investments 6,817 888 908 724
Change in unrealized appreciation/
(depreciation) of investments (284) (23,480) (1,007) 222
-------------------------------------------------------------------------------------------------------------------------
Change in net assets resulting
from operations 5,702 (24,438) 132 1,706
Distributions to shareholders:
From net investment income:
Primary Class (1,615) -- (149) (1,150)
Class A N/A N/A N/A N/A
Navigator Class N/A N/A N/A N/A
In excess of net investment income:
Primary Class -- -- -- (107)
Class A N/A N/A N/A N/A
Navigator Class N/A N/A N/A N/A
From net realized gain on investments:
Primary Class -- (5,587) -- --
Class A N/A N/A N/A N/A
Navigator Class N/A N/A N/A N/A
In excess of net realized gain on investments:
Primary Class -- -- -- --
Class A N/A N/A N/A N/A
Navigator Class N/A N/A N/A N/A
Change in net assets from Fund share transactions:
Primary Class (21,737) 38,774 (500) (19,323)
Class A N/A N/A N/A N/A
Navigator Class N/A N/A N/A N/A
------------------------------------------------------------------------------------------------------------------------
Change in net assets (17,650) 8,749 (517) (18,874)
Net Assets:
Beginning of period 297,706 288,957 37,026 55,900
------------------------------------------------------------------------------------------------------------------------
End of period $280,056 $297,706 $ 36,509 $ 37,026
------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) $ (831) $ -- $ (82) $ --
------------------------------------------------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
Statements of Changes in Net Assets -- Continued
<TABLE>
<CAPTION>
U.S. Small-Capitalization
Value Trust Financial Services Fund
--------------------------- ------------------------------------------
Six Months Year Six Months Three Months Year
Ended Ended Ended Ended Ended
9/30/00 3/31/00 9/30/00 3/31/00/A/ 12/31/99/B/
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Change in Net Assets: (Unaudited) (Unaudited)
Net investment income/(loss) $ (58) $ (384) $ (58) $ (18) $ (200)
Net realized gain/(loss) on investments (2,657) 670 1,019 (2,380) (1,415)
Change in unrealized appreciation/
(depreciation) of investments 6,241 (2,521) 6,552 1,846 (2,359)
-----------------------------------------------------------------------------------------------------------------------------
Change in net assets resulting
from operations 3,526 (2,235) 7,513 (552) (3,974)
Distributions to shareholders:
From net investment income:
Primary Class -- -- -- -- --
Class A N/A N/A -- -- --
Navigator Class -- -- -- -- --
In excess of net investment income:
Primary Class -- -- -- -- --
Class A N/A N/A -- -- --
Navigator Class -- -- -- -- --
From net realized gain on investments:
Primary Class -- (1,413) -- -- --
Class A N/A N/A -- -- --
Navigator Class -- (1) -- -- --
In excess of net realized gain on investments:
Primary Class -- (1,283) -- -- --
Class A N/A N/A -- -- --
Navigator Class -- (1) -- -- --
Change in net assets from Fund share transactions:
Primary Class (7,928) 3,609 1,490 3,340 16,732
Class A N/A N/A (315) (300) 2,958
Navigator Class -- (4) (5) -- 5
----------------------------------------------------------------------------------------------------------------------------
Change in net assets (4,402) (1,328) 8,683 2,488 15,721
Net Assets:
Beginning of period 57,077 58,405 40,258 37,770 22,049
----------------------------------------------------------------------------------------------------------------------------
End of period $ 52,675 $ 57,077 $ 48,941 $ 40,258 $ 37,770
----------------------------------------------------------------------------------------------------------------------------
Undistributed net investment income (loss) $ (58) $ -- $ (58) $ -- $ --
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ The year end for Financial Services Fund changed from December 31 to March
31.
/B/ Includes information for Legg Mason Financial Services Fund and its
predecessor, Bartlett Financial Services Fund (see Note 6).
N/A -- Not applicable.
See notes to financial statements.
50
<PAGE>
Financial Highlights
Legg Mason Investors Trust, Inc.
Contained below is per share operating performance data for a Primary Class
share (and a Class A share for Financial Services Fund) 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
----------------------------------- ----------------------------------------------------------
Net Realized From In Excess
Net Asset Net and Total From In Excess Net of Net
Value, Investment Unrealized From Net of Net Realized Realized
Beginning Income/ Gain/(Loss) Investment Investment Investment Gain on Gain on Total
of Period (Loss) on Investments Operations Income Income Investments Investments Distributions
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
American Leading Companies Trust
-- Primary Class
Six Months Ended
Sept. 30, 2000* $18.69 $(.06) $ .43 $ .37 $ -- $ -- $ (.11) $ -- $ (.11)
Years Ended Mar. 31,
2000 20.38 (.12) (1.21) (1.33) -- -- (.36) -- (.36)
1999 17.78 (.06) 3.38 3.32 -- -- (.72) -- (.72)
1998 14.74 (.04)/A/ 4.93 4.89 -- -- (1.85) -- (1.85)
1997 12.23 .01/A/ 3.00 3.01 (.02) -- (.48) -- (.50)
1996 10.18 .07/A/ 2.08 2.15 (.10) -- -- -- (.10)
Balanced Trust
-- Primary Class
Six Months Ended
Sept. 30, 2000* $12.20 $ .08/B/ $ (.03) $ .05 $(.05) $ -- $ -- $ -- $ (.05)
Years Ended Mar. 31,
2000 11.98 .20/B/ .33 .53 (.27) (.04) -- -- (.31)
1999 12.62 .22/B/ (.56) (.34) (.19) -- (.11) -- (.30)
1998 10.16 .21/B/ 2.58 2.79 (.21) -- (.12) -- (.33)
1997/D/ 10.00 .09/B/ .11 .20 (.04) -- -- -- (.04)
U.S. Small-Capitalization Value Trust
-- Primary Class
Six Months Ended
Sept. 30, 2000* $ 7.45 $(.01)/C/ $ .53 $ .52 $ -- $ -- $ -- $ -- $ --
Years Ended Mar. 31,
2000 7.81 (.05)/C/ -- (.05) -- -- (.16) (.15) (.31)
1999/E/ 10.00 (.02)/C/ (2.17) (2.19) -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------------
Net
Net Asset Investment Net Assets,
Value, Expenses Income/(Loss) Portfolio End of
End of Total to Average to Average Turnover Period
Period Return Net Assets Net Assets Rate (in thousands)
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
American Leading Companies Trust
-- Primary Class
Six Months Ended
Sept. 30, 2000* $ 18.95 1.96%/F/ 1.95%/G/ (.57)%/G/ 24.3%/G/ $280,056
Years Ended Mar. 31,
2000 18.69 (6.65)% 1.90% (.58)% 43.5% 297,706
1999 20.38 19.52% 1.93% (.37)% 47.6% 288,957
1998 17.78 35.18% 1.95%/A/ (.28)%/A/ 51.4% 200,326
1997 14.74 24.73% 1.95%/A/ .05%/A/ 55.7% 104,812
1996 12.23 21.24% 1.95%/A/ .69%/A/ 43.4% 76,100
Balanced Trust
-- Primary Class
Six Months Ended
Sept. 30, 2000* $ 12.20 .41%/F/ 1.85%/B,G/ 1.26%/B,G/ 34.9%/G/ $ 36,509
Years Ended Mar. 31,
2000 12.20 4.53% 1.85%/B/ 1.67%/B/ 58.0% 37,026
1999 11.98 (2.69)% 1.85%/B/ 1.96%/B/ 50.0% 55,900
1998 12.62 27.80% 1.85%/B/ 2.08%/B/ 34.5% 47,761
1997/D/ 10.16 2.02%/F/ 1.85%/B,G/ 2.52%/B,G/ 5.1%/G/ 17,948
U.S. Small-Capitalization Value Trust
-- Primary Class
Six Months Ended
Sept. 30, 2000* $ 7.97 6.98%/F/ 2.00%/C,G/ (.21)%/C,G/ 40.7%/G/ $ 52,642
Years Ended Mar. 31,
2000 7.45 (1.06)% 1.99%/C/ (.54)%/C/ 66.2% 57,046
1999/E/ 7.81 (21.90)%/F/ 2.00%/C,G/ (.44)%/C,G/ 29.5%/G/ 58,365
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
51
<PAGE>
Financial Highlights -- Continued
<TABLE>
<CAPTION>
Investment Operations Distributions
------------------------------------------- ---------------------------------------------
From In Excess
Net Asset Net Net Realized Total From In Excess Net of Net
Value, Investment and Unrealized From Net of Net Realized Realized
Beginning Income/ Gain/(Loss) on Investment Investment Investment Gain on Gain on
of Period (Loss) Investments Operations Income Income Investments Investments
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Financial Services Fund
-- Primary Class
Six Months Ended
Sept. 30, 2000* $ 9.18 $(.02)/I/ $ 1.72 $ 1.70 $ -- $ -- $ -- $ --
Three Months Ended
Mar. 31, 2000/H/ 9.41 (.01)/I/ (.22) (.23) -- -- -- --
Year Ended Dec. 31,
1999/J,K/ 10.57 (.07)/I/ (1.09) (1.16) -- -- -- --
Period Ended Dec. 31,
1998/L,M/ 10.00 (.01)/I/ .58 .57 -- -- -- --
-- Class A
Six Months Ended
Sept. 30, 2000* $ 9.28 $ .01/N/ $ 1.75 $ 1.76 $ -- $ -- $ -- $ --
Three Months Ended
Mar. 31, 2000/H/ 9.49 .01/N/ (.22) (.21) -- -- -- --
Year Ended Dec. 31,
1999/J,K/ 10.58 --/N/ (1.09) (1.09) -- -- -- --
Period Ended Dec. 31,
1998/L,M / 10.00 --/N/ .58 .58 -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------
Net
Net Asset Investment Net Assets
Value, Expenses Income/(loss) Portfolio End of
Total End of Total to Average to Average Turnover Period
Distributions Period Return Net Assets Net Assets Rate (in thousands)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Financial Services Fund
-- Primary Class
Six Months Ended
Sept. 30, 2000* $ -- $10.88 18.52%/F/ 2.14%/G,I/ (.41)%/G,I/ 59.2%/G/ $38,768
Three Months Ended
Mar. 31, 2000/H/ -- 9.18 (2.44)%/F/ 2.25%/G,I/ (.38)%/G,I/ 60.9%/G/ 31,397
Year Ended Dec. 31,
1999/J,K/ -- 9.41 (10.97)% 2.25%/I / (.73)%/I/ 27.1% 28,366
Period Ended Dec. 31,
1998/L,M/ -- 10.57 5.70%/F/ 2.25%/G,I/ (.11)%/G,I/ --% 14,598
-- Class A
Six Months Ended
Sept. 30, 2000* $ -- $11.04 18.97%/F,O/ 1.50%/G,N/ .23%/G,N/ 59.2%/G/ $10,173
Three Months Ended
Mar. 31, 2000/H/ -- 9.28 (2.21)%/F,O/ 1.50%/G,N/ .36%/G,N/ 60.9%/G/ 8,856
Year Ended Dec. 31,
1999/J,K/ -- 9.49 (10.30)%/O/ 1.50%/N/ .01%/N/ 27.1% 9,399
Period Ended Dec. 31,
1998/L,M / -- 10.58 5.80%/F,O/ 1.50%/G,N/ .22%/G,N/ --% 7,451
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Net of fees waived pursuant to a voluntary expense limitation of 1.95% of
average daily net assets. If no fees had been waived by LMFM, the annualized
ratio of expenses to average daily net assets would have been as follows:
for the years ended March 31, 1998, 1.99%; 1997, 2.06%; and 1996, 2.20%.
/B/ Net of fees waived pursuant to a voluntary expense limitation of 1.85% of
average daily net assets. If no fees had been waived by LMFM, the annualized
ratio of expenses to average daily net assets would have been as follows:
for the six months ended September 30, 2000, 2.09%; for the years ended
March 31, 2000, 1.88%; 1999, 1.90%; 1998, 2.14%; and for the period from
October 1, 1996 (commencement of operations) to March 31, 1997, 3.03%.
/C/ Net of fees waived pursuant to a voluntary expense limitation of 2.00% of
average daily net assets. If no fees had been waived by LMFM, the annualized
ratio of expenses to average daily net assets would have been as follows:
for the six months ended September 30, 2000, 2.58%; for the year ended March
31, 2000, 2.35%; and for the period from June 15, 1998 (commencement of
operations) to March 31, 1999, 2.38%.
/D/ For the period October 1, 1996 (commencement of operations) to March 31,
1997. E For the period June 15, 1998 (commencement of operations) to March
31, 1999. F Not annualized.
/G/ Annualized.
/H/ The year end for Financial Services Fund changed from December 31 to March
31.
/I/ Net of fees waived pursuant to a voluntary expense limitation of 2.25%. If
no fees had been waived by LMFM, the annualized ratio of expenses to average
daily net assets would have been as follows:for the six months ended
September 30, 2000, 3.19%; for the three months ended March 31, 2000, 2.73%;
and for the years ended December 31, 1999 and 1998, 2.73% and 2.40%,
respectively.
/J/ Effective October 5, 1999, Legg Mason Fund Adviser, Inc. ("LMFA") became
Financial Services Fund's adviser, replacing Bartlett &Co. K Includes
financial information for Legg Mason Financial Services Fund and its
predecessor, Bartlett Financial Services Fund (see Note 6).
/L/ For the period November 16, 1998 (commencement of operations) to December
31, 1998.
/M/ The financial information for the period ended December 31, 1998, is for the
Bartlett Financial Services Fund, Legg Mason Financial Services Fund's
predecessor. N Net of fees waived pursuant to a voluntary expense limitation
of 1.50%. If no fees had been waived by LMFA, the annualized ratio of
expenses to average daily net assets would have been as follows:for the six
months ended September 30, 2000, 2.55%; for the three months ended March 31,
2000, 2.08%; and for the years ended December 31, 1999 and 1998, 2.05% and
1.65%, respectively.
/O/ Excluding sales charge on Class A shares.
* Unaudited.
See notes to financial statements.
52
<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"), the U.S. Small-Capitalization Value
Trust ("U.S. Small-Cap") and the Financial Services Fund ("Financial
Services") (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 and
Navigator Class. The Navigator Class shares of Financial Services and
American Leading Companies were redeemed on May 12, 2000 and December 3,
1998, respectively. The Navigator Class of Balanced Trust has not
commenced operations. Information about the Navigator Class of U.S. Small-
Cap, offered to certain institutional investors, is contained in a
separate report to its shareholders. Financial Services has an additional
class of shares: Class A. All shareholders bear the common expenses of the
Funds based on daily net assets of each class, without distinction between
share classes. Dividends are declared separately for each class.
Differences in per share dividend rates are generally due to differences
in separate class expenses.
Security Valuation
Equity securities and options listed on national securities exchanges
are valued at the last sale price as of the close of business on the day
the securities are being valued. Listed securities not traded on a
particular day and securities traded in the over-the-counter market are
valued at the mean between the closing bid and ask prices quoted by
brokers or dealers that make markets in the securities. Portfolio
securities which are traded both in the over-the-counter market and on an
exchange are valued according to the broadest and most representative
market. In the absence of readily available market quotations, securities
are valued at fair value under procedures established by and under the
general supervision of the Board of Directors.
Fixed income securities generally are valued by using market
quotations or independent pricing services that use prices provided by
market makers or estimates of market values. Fixed income securities
having a maturity of less than 60 days are valued at amortized cost.
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, U.S. Small-Cap and Financial Services, and quarterly
for Balanced Trust. Net capital gain distributions, which are calculated
at the Fund level, are declared and paid after the end of the tax year in
which the gain is realized. Distributions are determined in accordance
with federal income tax regulations, which may differ from those
determined in accordance with generally accepted accounting principles;
accordingly, periodic reclassifications are made within a Fund's capital
accounts to reflect income and gains available for distribution under
federal income tax regulations.
Security Transactions
Security transactions are recorded on the trade date. Realized gains
and losses from security transactions are reported on an identified cost
basis for both financial reporting and federal income tax purposes.
53
<PAGE>
Notes to Financial Statements -- Continued
---------------------------------------------------------------------------
At September 30, 2000, receivables for securities sold and payables for
securities purchased for each Fund were as follows:
Receivable for Payable for
Securities Sold Securities Purchased
-------------------------------------------------------------------------
American Leading Companies $3,977 $ --
Balanced Trust -- --
U.S. Small-Cap 3,146 1,428
Financial Services -- --
Deferred Organizational Expenses
Deferred organizational expenses of $86 for Balanced Trust and $43
for U.S. Small-Cap are being amortized on a straight line basis over 5
years commencing on the date their respective operations began.
Federal Income Taxes
No provision for federal income or excise taxes is required since
each Fund intends to continue to qualify as a regulated investment company
and distribute substantially all of its taxable income to its shareholders.
Use of Estimates
Preparation of the financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
2. Investment Transactions:
For the six months ended September 30, 2000, investment transactions
(excluding short-term investments) were as follows:
Purchases Proceeds From Sales
------------------------------------------------------------------
American Leading Companies $34,527 $63,239
Balanced Trust 6,215 7,308
U.S. Small-Cap 8,915 17,922
Financial Services 10,737 11,300
At September 30, 2000, cost, gross unrealized appreciation and gross
unrealized depreciation based on the cost of securities for federal income
tax purposes for each Fund were as follows:
<TABLE>
<CAPTION>
Net
Appreciation/
Cost Appreciation Depreciation (Depreciation)
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Leading Companies $211,713 $84,883 $(20,424) $64,459
Balanced Trust 33,675 4,631 (1,964) 2,667
U.S. Small-Cap 59,182 4,845 (13,033) (8,188)
Financial Services 41,854 8,519 (1,463) 7,056
</TABLE>
54
<PAGE>
At September 30, 2000, Balanced Trust and Financial Services had
capital loss carryforwards for federal income tax purposes of $109 and
$3,772, respectively, which expire in 2007 and 2008, respectively.
3. Repurchase Agreements:
All repurchase agreements are fully collateralized by obligations
issued by the U.S. Government or its agencies, and such collateral is in
the possession of the Funds' custodian. The value of such collateral
includes accrued interest. Risks arise from the possible delay in recovery
or potential loss of rights in the collateral should the issuer of the
repurchase agreement fail financially. The Funds' investment advisers
review the value of the collateral and the creditworthiness of those banks
and dealers with which the Funds enter into repurchase agreements to
evaluate potential risks.
4. Transactions With Affiliates:
American Leading Companies has an investment advisory and management
agreement with Legg Mason Funds Management, Inc. ("LMFM"). Pursuant to the
agreement, LMFM provides American Leading Companies with investment
advisory, 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.
Prior to August 1, 2000, Legg Mason Fund Adviser, Inc. ("LMFA")
served as investment manager to American Leading Companies, under
compensation arrangements substantially similar to those with the current
adviser. For its services during the fiscal years ended March 31, 1996
through 2000, and for the four months ended August 1, 2000, American
Leading Companies paid LMFA fees as shown in the table below, net of any
waivers.
Balanced Trust, U.S. Small-Cap and Financial Services have management
agreements with LMFA. Pursuant to their respective agreements, LMFA
provides these Funds with management and administrative services for which
these Funds pay a fee, computed daily and payable monthly, at an annual
rate of each Fund's average daily neet assets.
LMFM and LMFA have agreed to waive their fees in any month to the
extent a Fund's expenses (exclusive of taxes, interest, brokerage and
extraordinary expenses) exceed during that month certain annual rates of
that Fund's average daily net assets as shown in the following chart:
<TABLE>
<CAPTION>
Six Months Ended At
September 30, 2000 September 30, 2000
------------------ ------------------
Management Expense Expense Limitation Management Management
Fund Fee Limitation Expiration Date Fees Waived Fees Payable
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
American Leading Companies
Primary Class 0.75% 1.95% Indefinitely $-- $ 178
Balanced Trust
Primary Class 0.75% 1.85% Indefinitely 44 16
U.S. Small-Cap
Primary Class 0.85% 2.00% July 31, 2001 129 --
Navigator Class 0.85% 1.00% July 31, 2001 -- --
Financial Services
Primary Class 1.00% 2.25% August 1, 2001 169 --
Class A 1.00% 1.50% April 30, 2001 46 --
</TABLE>
55
<PAGE>
Notes to Financial Statements -- Continued
--------------------------------------------------------------------------------
Bartlett & Co. ("Bartlett") serves as investment adviser to Balanced
Trust. Bartlett is responsible for the actual investment activity of the
Fund. LMFA pays Bartlett a fee for its services, computed daily and
payable monthly, at an annual rate equal to 662/3% of the fee received by
LMFA.
Brandywine Asset Management, Inc. ("Brandywine") serves as investment
adviser to U.S. Small-Cap. Brandywine is responsible for the actual
investment activity of the Fund. LMFA pays Brandywine a fee for its
services, computed daily and payable monthly, at an annual rate equal to
58.8% of the fee received by LMFA.
Prior to October 5, 1999, Bartlett served as investment adviser to
Financial Services, under compensation arrangements substantially similar
to those with the current adviser. For its services during the fiscal year
ended December 31, 1998, and for the period January 1, 1999 through
October 4, 1999, the Fund paid Bartlett a fee of 1.00% of its average
daily net assets, net of any waivers.
Gray, Seifert & Co., Inc. ("Gray, Seifert") serves as investment sub-
adviser to Financial Services pursuant to a Sub-Advisory Agreement which
was approved by the Board of Directors. Gray, Seifert is responsible for
the actual investment activity of the Fund. LMFA pays Gray, Seifert a fee,
computed daily and payable monthly, at the rate of 60% 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 (and, with respect to Financial Services,
Class A's) average daily net assets, computed daily and payable monthly as
follows:
<TABLE>
<CAPTION>
Year Ended
September 30, 2000 At September 30, 2000
------------------------ ---------------------
Distribution Service Distribution and Service Distribution and Service
Fund Fee Fee Fees Waived Fees Payable
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Leading Companies 0.75% 0.25% $-- $238
Balanced Trust 0.50% 0.25% -- 23
U.S. Small-Cap 0.75% 0.25% 4 45
Financial Services
Primary Class 0.75% 0.25% 9 28
Class A N/A 0.25% 3 --
</TABLE>
-------------------
N/A -- Not applicable.
No brokerage commissions were paid by the Funds to Legg Mason or its
affiliates during the six months ended September 30, 2000.
Legg Mason also has an agreement with the Funds' transfer agent to assist
it with some of its duties. For this assistance, the transfer agent paid Legg
Mason the following amounts for the six months ended September 30, 2000:
American Leading Companies, $31; Balanced Trust, $5; U.S. Small-Cap, $10; and
Financial Services, $4.
56
<PAGE>
--------------------------------------------------------------------------------
LMFM, LMFA, Legg Mason, Bartlett, Brandywine and Gray, Seifert are
corporate affiliates and wholly owned subsidiaries of Legg Mason, Inc.
5. Line of Credit:
The Funds, along with certain other Legg Mason Funds, participate in
a $200 million line of credit ("Credit Agreement") to be utilized as an
emergency source of cash in the event of unanticipated, large redemption
requests by shareholders. Pursuant to the Credit Agreement, each
participating Fund is liable only for principal and interest payments
related to borrowings made by that Fund. Borrowings under the Credit
Agreement bear interest at prevailing short-term interest rates. For the
six months ended September 30, 2000, the Funds had no borrowings under the
Credit Agreement.
6. Acquisition of Bartlett Financial Services Fund:
Effective October 5, 1999, Financial Services acquired all of the
assets and assumed all of the liabilities of the Bartlett Financial
Services Fund ("Bartlett Fund"), a series of Bartlett Capital Trust (an
open-end management company), pursuant to a plan of conversion and
termination approved by Bartlett Fund's shareholders on September 23,
1999. The shareholders of Bartlett Fund received shares of Financial
Services equal to the number and aggregate net asset value (and
corresponding class) of their shares in the Bartlett Fund.
The acquisition was treated as a tax-free reorganization and
accordingly, any unrealized appreciation or depreciation on the securities
on the date of the acquisition was treated as a non-taxable event by the
Bartlett Fund. As such, Financial Services' basis in the securities
acquired reflected their historical cost basis as of the date of transfer.
The net assets and net unrealized depreciation of the Bartlett Fund as of
October 5, 1999, were $37,391 and $3,414, respectively.
The Bartlett Fund's investment objectives, policies and restrictions
were identical to those of Financial Services, which had no operations
prior to October 5, 1999. For financial reporting purposes, the Bartlett
Fund's operating history prior to the acquisition is reflected in the
financial statements and financial highlights of Financial Services.
7. Fund Share Transactions:
At September 30, 2000, there were 250,000, 125,000, 50,000, and
125,000 shares authorized at $.001 par value for the Primary Classes of
American Leading Companies, Balanced Trust, U.S. Small-Cap and Financial
Services, respectively. At September 30, 2000, there were 125,000 shares
authorized at $.001 par value for Class A of Financial Services and there
were 50,000 shares authorized at $.001 par value for the Navigator Class
of U.S. Small-Cap.
57
<PAGE>
Notes to Financial Statements -- Continued)
--------------------------------------------------------------------------------
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
Six Months Ended September 30, 2000 587 $11,025 84 $1,583 (1,824) $(34,345) (1,153) $(21,737)
Year Ended March 31, 2000 5,496 108,290 273 5,499 (4,021) (75,015) 1,748 38,774
Balanced Trust
--Primary Class
Six Months Ended September 30, 2000 313 $ 3,840 12 $ 144 (367) $ (4,484) (42) $ (500)
Year Ended March 31, 2000 571 6,855 103 1,218 (2,306) (27,396) (1,632) (19,323)
U.S. Small-Cap
--Primary Class
Six Months Ended September 30, 2000 665 $ 5,039 -- $ -- (1,721) $(12,967) (1,056) $ (7,928)
Year Ended March 31, 2000 4,100 35,126 318 2,663 (4,236) (34,180) 182 3,609
--Navigator Class
Six Months Ended September 30, 2000 N.M. $ 2 -- $ -- N.M. $ (2) -- $ --
Year Ended March 31, 2000 2 20 -- -- (3) (24) (1) (4)
Financial Services Fund
--Primary Class
Six Months Ended September 30, 2000 474 $ 4,692 -- $ -- (331) $ (3,202) 143 $ 1,490
Period Ended March 31, 2000/A/ 666 5,598 -- -- (262) (2,258) 404 3,340
Year Ended December 31, 1999/B/ 2,363 23,769 -- -- (729) (7,037) 1,634 16,732
Period Ended December 31, 1998/C/,/D/ 1,388 14,009 -- -- (7) (70) 1,381 13,939
--Class A
Six Months Ended September 30, 2000 21 $ 215 -- $ -- (53) $ (530) (32) $ (315)
Period Ended March 31, 2000/A/ 41 364 -- -- (77) (664) (36) (300)
Year Ended December 31, 1999/B/ 492 4,979 -- -- (206) (2,021) 286 2,958
Period Ended December 31, 1998/C/,/D/ 706 7,112 -- -- (2) (15) 704 7,097
--Navigator Class
Six Months Ended September 30, 2000 (1) $ (5) -- -- $ -- (1) $ (5) (5)
Period Ended March 31, 2000/A/ -- -- -- -- -- -- -- --
Period Ended December 31, 1999/B/,/E/ 1 5 -- -- -- 1 5
--------------------------------------------------------------------------------
</TABLE>
/A/ For the period January 1, 2000 to March 31, 2000.
/B/ Includes financial information for Legg Mason Financial Services Fund
and its predecessor, Bartlett Financial Services Fund (see Note 6).
/C/ For the period November 16, 1998 to December 31, 1998.
/D/ The financial information for the period ended December 31, 1998, is
for the Bartlett Financial Services Fund, Legg Mason Financial
Services Fund's predecessor.
/E/ For the period October 7, 1999 to December 31,1999.
N.M.-- Not meaningful.
58
<PAGE>
Legg Mason offers a wide range of mutual funds to meet investors' varying
financial needs and investment goals. The funds are listed below:
Equity Funds: Specialty Funds:
Value Trust Balanced Trust
Special Investment Trust Financial Services Fund
Total Return Trust Opportunity Trust
American Leading Companies
Trust
Classic Valuation Fund
Focus Trust, Inc.
U.S. Small-Capitalization
Value Trust
Global Funds: Taxable Bond Funds:
Global Income Trust U.S. Government Intermediate-Term
Europe Fund Portfolio
International Equity Trust Investment Grade Income Portfolio
Emerging Markets Trust High Yield Portfolio
Tax-Free Bond Funds: Money Market Funds:
Tax-Free Intermediate-Term U.S. Government Money Market
Income Trust Portfolio
Maryland Tax-Free Income Trust Cash Reserve Trust
Pennsylvania Tax-Free Income Trust Tax Exempt Trust
For information on the specific risks, charges, and expenses associated with any
Legg Mason fund, please consult a Legg Mason Financial Advisor for a prospectus.
Read it carefully before investing or sending money.
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