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Previous: MTI TECHNOLOGY CORP, 10-K/A, 2000-08-24 |
Next: NATIONAL MUNICIPAL TRUST MULTISTATE SERIES 63, 497J, 2000-08-24 |
<PAGE>
Quarterly Report
June 30, 2000
Legg Mason
Investors
Trust, Inc.
U.S. Small-Cap
Value Trust
Navigator Class
[LEGG MASON FUNDS LOGO]
The Art of Investing(SM)
<PAGE>
To Our Shareholders,
We are pleased to provide you with Legg Mason Investors Trust's quarterly
report for the Navigator Class of the U.S. Small-Capitalization Value Trust.
The following table summarizes key statistics for the Navigator Class of
shares of the Fund, as of June 30, 2000:
3-Month 12-Month
Total Return/1/ Total Return/1/
---------------- ----------------
U.S. Small-Capitalization Value Trust -2.37% -19.72%
S&P 500 Stock Composite Index -2.66% +7.24%
Russell 2000 Index -3.78% +14.32%
On the following pages, the portfolio managers for the Fund discuss the
investment outlook for the Fund. Long-term investment results for the Fund are
shown in the Performance Information section of this report.
Sincerely,
/s/ Edward A. Taber, III
------------------------
Edward A. Taber, III
President
July 24, 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.
<PAGE>
Portfolio Managers' Comments
U.S. Small-Capitalization Value Trust
For the quarter, the Fund returned -2.4%, compared to a gain of +2.0% for the
Russell 2000 Value and losses of -3.8% for the Russell 2000 and -2.7% for the
S&P 500. Year to date, the Fund is down -8.3%, while the Russell 2000 Value has
gained +5.9%, the Russell 2000 is up +3.0% (well below its high this year), and
the S&P is down -0.4%.
U.S. equity markets remained volatile in the second quarter as investors tried
to anticipate both the U.S. economy's direction and the Federal Reserve Board's
interest rate policy. In June, growing evidence accumulated that recent Fed
hikes in short-term rates had begun to slow economic activity as retail sales,
auto purchases and home buying all decelerated. Investors speculated on whether
this nascent slowdown represented the start of a "soft landing," in which growth
moderates to avoid igniting higher inflation, or the onset of a "hard landing,"
in which the economy slumps faster than the Fed intends, even into recession. By
quarter end, the market consensus was that recent Fed action had caused the
desired cooling of the economy without significantly impairing growth, and that
the Fed would limit further rate increases.
During the quarter, technology stocks again dominated U.S. equity market
returns and remained the highest profile sector. Investors continued to pull
back from the extended valuations in the sector following their dramatic rise in
1999 and early 2000. Disappointing news, particularly among Internet retailers,
as well as concerns about the Microsoft anti-trust case's impact on the
industry, led to sharp technology price declines, though these stocks did recoup
some of their losses in June. Many of these stocks have no earnings and their
strong performance in 1999 and early 2000 was based on speculation that the
companies would benefit generously from the Internet's success. However, early
experience indicates that the Internet is a highly competitive marketplace and
most companies will have much greater difficulty generating attractive profits
than originally anticipated. Small-cap value stocks, meanwhile, experienced much
smaller performance swings in the quarter. These stocks and their very
attractive valuations have been largely ignored as growth stocks moved sharply
up and down.
The Fund performed well when value led the market, which we identify as days
in which the Russell 2000 Value Index return is ahead of the Russell 2000. On
these days, the Fund beat the Russell 2000 Value Index by an average of 40 basis
points/1/ per day. This relationship highlights the substantial return potential
in the Fund's portfolio when value stocks show strength.
The largest benefit to the Fund's relative performance was the technology
sector's poor return for the quarter. Our very low exposure to the overvalued
tech stocks helped performance as these stocks retreated during the quarter.
Biotechs rallied strongly in June, despite their extended valuations, so our
underweighting had a negative impact on relative performance. Our above-
benchmark weighting in economically sensitive areas, such as retailing, home
building and producer manufacturing, also
---------
/1/ 100 basis points = 1%.
2
<PAGE>
Portfolio Managers' Comments -- Continued
hurt returns as these sectors reacted negatively to the possibility of a
slowing economy. Other positive sectors included finance, where the portfolio's
smaller banks and insurance companies held up well despite higher interest
rates, and utilities, which were hit harder by rising rates while the Fund held
a below-benchmark weighting.
On June 30, Russell conducted the annual rebalancing of its indices. Since the
last rebalancing in June 1999, the strong tech and biotech stock returns had
resulted in a Russell 2000 Value Index with some unusual sector weightings (for
a value index), as well as a number of mid-cap holdings. With the current
rebalancing, these unsuitable stocks were removed from the index and the
portfolio characteristics have changed. The index's technology weight dropped by
over half from 14.2% to 6.4%, and finance rose from 25.7% to 31.5%. The average
cap dropped from $950 million to $770 million and the largest stock dropped from
$5.9 billion to $2.4 billion. These adjustments should make the Russell 2000
Value Index more truly representative of small-cap value stocks.
While small-cap growth stocks, particularly tech and biotech, have produced
volatile returns over the last 18 months, small-cap value stocks have had more
stable returns. This relative stability has caused value to lag when the growth
stocks were strongest, such as in the second half of 1999 and again in June
2000. When growth stocks' prices contracted, value performed well, such as in
the March through May period when the Russell 2000 fell -17.3%, the Russell 2000
Value was off -0.5%, and the Fund was up. Because the stocks we invest in are at
valuation discounts cheaper than any time in the last 20 years, they can offer
more than just defensive performance -- they can provide market-leading returns.
These stocks have done so in the past following periods of weak performance. Two
significant triggers exist for improved value performance. The first is the
approaching end to Fed rate increases, signaling lower interest rates and
lifting doubts about continued economic expansion. The second trigger would be
continued disappointments from the Internet companies, such as more firm
closings, further difficulties obtaining financing and additional employee
reductions. Either of these two events should lead investors to expand their
focus from solely growth to include the undervalued market segment. Significant
increased interest in small-cap value stocks would generate strong performance,
since these stocks can appreciate rapidly as new funds flow into the asset
class.
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
August 7, 2000
DJIA 10867.01
3
<PAGE>
Performance Information
Legg Mason Investors Trust, Inc.
Total Returns for One Year, Five Years, and Life of Class, as of June 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 the Fund will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
their original cost. Average annual returns tend to smooth out variations in
a Fund's return, so that they differ from actual year-to-year results. No
adjustment has been made for any income taxes payable by shareholders.
The Fund offers two classes of shares:Primary Class and Navigator Class.
Information about Primary Class, offered to retail investors, is contained in
a separate report to its shareholders.
The Fund's total returns as of June 30, 2000, were as follows:
U.S. Small-Cap
Value Trust
------------------------------------------
Average Annual Total Return
Navigator Class:
One Year -19.72%
Life of Class* -11.82%
Cumulative Total Return
Navigator Class:
One Year -19.72%
Life of Class* -22.56%
------------------------------------------
* The inception date for the Navigator Class of U.S. Small-Cap Value Trust was
June 19, 1998.
4
<PAGE>
Performance Information -- Continued
U.S. Small-Capitalization Value Trust(dagger)
Selected Portfolio Performance*
<TABLE>
<CAPTION>
Strong performers for the 2nd quarter 2000 Weak performers for the 2nd quarter 2000
-------------------------------------------- ----------------------------------------------
<S> <C>
1. ASI Solutions Incorporated +109.38% 1. Magellan Health Services, Inc. -74.03%
2. The Lamson & Sessions Co. +105.88% 2. USBANCORP, Inc. -68.33%
3. The First Years Inc. +60.36% 3. Comdial Corporation -66.19%
4. Pediatrix Medical Group, Inc. +60.34% 4. Home Products International, Inc. -65.17%
5. FTI Consulting, Inc. +58.49% 5. Travis Boats & Motors, Inc. -58.49%
6. Ladish Co., Inc. +56.00% 6. Systemax, Inc. -57.53%
7. Lakeland Industries, Inc. +53.85% 7. EZCORP, Inc. -55.56%
8. Chromcraft Revington, Inc. +52.46% 8. ProMedCo Management Company -55.13%
9. Lennox International Inc. +51.43% 9. CKE Restaurants, Inc. -52.94%
10. Penn Engineering & 10. Personal Group of America, Inc. -52.04%
Manufacturing Corp. - Class A +50.88%
</TABLE>
(dagger) Portfolio changes have not been reported for U.S. Small-Cap due to
the heavy volume of trading during the quarter.
* Securities held for the entire quarter.
5
<PAGE>
Portfolio of Investments
Legg Mason Investors Trust, Inc.
June 30, 2000 (Unaudited)
(Amounts in Thousands)
U.S. Small-Capitalization Value Trust
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock and Equity Interests -- 96.4%
Basic Materials -- 6.0%
A. Schulman, Inc. 19 $ 230
Aceto Corporation 1 10
Albemarle Corporation 5 105
American Vanguard Corporation 1 9
Baltek Corporation 1 4/A/
Bayou Steel Corporation 9 20/A/
Carpenter Technology Corporation 17 359
Ethyl Corporation 89 223
FiberMark, Inc. 5 65/A/
Gentek, Inc. 16 181
IMCO Recycling Inc. 13 71
International Specialty Products Inc. 22 125/A/
NCH Corporation 2 87
NL Industries, Inc. 39 593
Penn Virginia Corporation 6 155
Quaker Chemical Corporation 7 116
Quanex Corporation 10 155
Roanoke Electric Steel Corporation 3 41
Stepan Company 7 170
Sylvan, Inc. 3 27/A/
The Anderson's Inc. 6 58
UCAR International, Inc. 14 178/A/
Universal Forest Products, Inc. 3 41
W. R. Grace & Co. 2 24
-------
3,047
-------
Capital Goods -- 16.6%
AAR CORP. 2 18
Acme Electric Corporation 3 25/A/
Alltrista Corporation 6 124/A/
Amcast Industrial Corporation 7 60
American Biltrite, Inc. 3 32
Ampco-Pittsburgh Corporation 7 73
Atchison Casting Corporation 5 31/A/
AVTEAM, Inc. 8 13/A/
Bacou USA, Inc. 6 122/A/
Bairnco Corporation 6 41
Baldwin Technology Company, Inc. 13 28/A/
Ball Corporation 9 296
Ballantyne of Omaha, Inc. 3 5/A/
Butler International, Inc. 7 58/A/
</TABLE>
6
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods -- Continued
Butler Manufacturing Company 5 $ 83
Cascade Corporation 9 104
Channell Commercial Corporation 4 53/A/
Chase Industries, Inc. 11 102/A
Chemfab Corporation 2 27/A/
CIRCOR International, Inc. 1 10
Columbus McKinnon Corporation 10 137
Comfort Systems USA, Inc. 12 46/A/
Commercial Metals Company 11 303
Corrpro Companies, Inc. 5 17/A/
CPAC, Inc. 4 28
Denali Incorporated 3 6/A/
Detroit Diesel Corporation 9 139
Encompass Services Corporation 18 104/A/
Exponent, Inc. 3 28/A/
Fansteel Inc. 5 19/A/
Farrel Corporation 3 4
Featherlite Inc. 4 13/A/
Foamex International Inc. 1 5/A/
Friedman Industries, Incorporated 5 17
Gehl Company 4 50/A/
GenCorp Inc. 14 110
General Cable Corporation 10 78
Gradco Systems, Inc. 5 9/A/
Graham Corporation 1 8/A/
Graphic Packaging International Corp. 21 44/A/
Griffon Corporation 23 129/A/
Interface, Inc. 41 155
Intermet Corporation 20 137
International Airline Support Group, Inc. 2 4/A/
Ivex Packaging Corporation 4 48/A/
Jason Incorporated 11 102/A/
JLG Industries, Inc. 1 17
Kaman Corporation 17 176
Kellstrom Industries, Inc. 8 37/A/
Ladish Co., Inc. 9 91/A/
Lakeland Industries, Inc. 1 6/A/
Lincoln Electric Holdings, Inc. 4 61
Lindberg Corporation 4 26
Lydall, Inc. 4 46/A/
M&F Worldwide Corp. 15 82/A/
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods -- Continued
Meadow Valley Corporation 2 $ 8/A/
Met-Pro Corporation 2 20
Milacron Inc. 30 432
Miller Building Systems, Inc. 2 11/A/
NACCO Industries, Inc. 6 214
National Service Industries, Inc. 12 234
Northern Technologies International Corporation 2 15
Northwest Pipe Company 4 52/A/
O.I. Corporation 2 8/A/
Omnova Solutions Inc. 13 84
Park-Ohio Holdings Corp. 7 57/A/
Penn Engineering & Manufacturing Corp. 1 32
Penn Engineering & Manufacturing Corp. - Class A 4 142
Perini Corporation 4 14/A/
Pitt-Des Moines, Inc. 2 42
Pittston Brink's Group 7 96
Raven Industries, Inc. 4 49
Regal-Beloit Corporation 13 212
Riviera Tool Company 1 4/A/
Rock-Tenn Company 22 188
Ryerson Tull, Inc. 6 60
Shiloh Industries, Inc. 4 36/A/
SIFCO Industries, Inc. 3 20
Silgan Holdings Inc. 14 137/A/
Specialty Equipment Companies, Inc. 8 222/A/
SPS Technologies, Inc. 6 234/A/
Standard Automotive Corporation 1 8/A/
Standex International Corporation 8 130
Steel Technologies Inc. 8 54
Summa Industries 3 34/A/
Superior TeleCom Inc. 10 95
Supreme Industries, Inc. 9 40/A/
TB Wood's Corporation 4 42
Tech/Ops Sevcon, Inc. 2 18
Tecumseh Products Company 6 218
Terex Corporation 6 79/A/
The Alpine Group, Inc. 3 20/A/
The Carbide/Graphite Group, Inc. 6 23/A/
The Eastern Company 1 18
The IT Group, Inc. 4 18/A/
Tower Automotive, Inc. 10 121/A/
</TABLE>
8
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Capital Goods -- Continued
TransTechnology Corporation 4 $ 43
Trinity Industries, Inc. 11 209
Triumph Group, Inc. 9 248/A/
URS Corporation 5 72/A/
USEC Inc. 3 13
Wabtec Corporation 23 238
Wolverine Tube, Inc. 10 173/A/
Woodward Governor Company 4 119
York International Corporation 8 207
-------
8,450
-------
Consumer Cyclicals -- 32.1%
A.C. Moore Arts & Crafts, Inc. 5 33/A/
A.O. Smith Corporation 9 186
Abercrombie & Fitch Co. 16 193/A/
Ameron International Corporation 3 93
Anchor Gaming 8 393/A/
Arctic Cat, Inc. 20 242
Arvin Industries, Inc. 17 297
ASI Solutions Incorporated 4 37/A/
Bandag, Incorporated 13 310
Bandag, Incorporated - Class A 4 83
Barnes Group Inc. 3 54
Beazer Homes USA, Inc. 6 111/A/
Bell Industries, Inc. 2 5
Bell Microproducts Inc. 7 121/A/
Black Hawk Gaming & Development Company, Inc. 3 18/A/
Boston Acoustics, Inc. 4 41
Boyd Gaming Corporation 46 256/A/
Briggs & Stratton Corporation 7 236
Brookstone, Inc. 3 24/A/
Brown Shoe Company, Inc. 6 73
Building Materials Holding Corporation 9 76/A/
Business Resource Group 1 6/A/
Cache, Inc. 2 8/A/
Cannondale Corporation 2 10/A/
Carriage Services, Inc. 11 36/A/
CDI Corp. 14 287/A/
Centex Construction Products, Inc. 6 132
Central Garden & Pet Company 21 189/A/
Champion Enterprises, Inc. 28 138/A/
Children's Comprehensive Services, Inc. 5 16/A/
Coachmen Industries Inc. 12 136
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Cyclicals -- Continued
Cobra Electronics Corporation 3 $ 23/A/
Collins Industries, Inc. 5 24
Cooper Tire & Rubber Company 23 257
Cornell Companies, Inc. 3 23/A/
Craftmade International, Inc. 3 18
Crossmann Communities, Inc. 3 54/A
Cutter & Buck Inc. 3 25/A/
Cybex International, Inc. N.M. 1/A/
D.R. Horton, Inc. 35 468
Dal-Tile International Inc. 22 181/A/
Del Webb Corporation 14 214/A/
Dominion Homes, Inc. 4 23/A/
Donnelly Corporation 3 35
Duckwall-ALCO Stores, Inc. 4 29/A/
Dura Automotive Systems, Inc. 12 132/A/
Edelbrock Corporation 2 24
Engle Homes, Inc. 8 77
EZCORP, Inc. 7 13/A/
Fedders Corporation 20 117
Federal-Mogul Corporation 10 99
Finlay Enterprises, Inc. 7 92/A/
Fleetwood Enterprises, Inc. 22 318
Friedman's, Inc. 13 62
FTI Consulting, Inc. 3 32/A/
Garan, Incorporated 4 84
General Employment Enterprises, Inc. 4 13
Genesco Inc. 19 302/A/
Gerber Childrenswear, Inc. 1 4/A/
Goody's Family Clothing, Inc. 25 138/A/
Hancock Fabrics, Inc. 4 17
Hartmarx Corporation 4 11/A/
Haverty Furniture Companies, Inc. 6 54
Hayes Lemmerz International, Inc. 7 87/A/
Headway Corporate Resources, Inc. 5 15/A/
Homebase, Inc. 23 36/A/
Hovnanian Enterprises, Inc. 16 96/A/
J. Baker, Inc. 4 25
Jo-Ann Stores, Inc. 6 39/A/
Johnson Outdoors Inc. 6 40/A/
Jos. A. Bank Clothiers, Inc. 4 15/A/
K2 Inc. 12 103/A/
Kaufman and Broad Home Corporation 14 271
</TABLE>
10
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Cyclicals -- Continued
Kellwood Company 20 $ 416
Koss Corporation 2 37/A/
Lakes Gaming, Inc. 8 68/A/
Lennox International Inc. 8 107
Lodgian, Inc. 17 42/A/
M/I Schottenstein Homes, Inc. 6 95
MarineMax, Inc. 3 22/A/
MascoTech, Inc. 35 377
Maxwell Shoe Company Inc. 6 59/A/
Media Arts Group, Inc. 9 36/A/
Michael Anthony Jewelers, Inc. 2 4/A/
Monaco Coach Corporation 6 83/A/
Movie Gallery, Inc. 3 10/A/
Musicland Stores Corporation 12 86/A/
Myers Industries, Inc. 6 63
National Technical Systems, Inc. 6 24
Nautica Enterprises, Inc. 37 398/A/
NCI Building Systems, Inc. 13 265/A/
New England Business Service, Inc. 4 65
Nortek, Inc. 2 47/A/
OfficeMax, Inc. 9 46/A/
One Price Clothing Stores, Inc. 7 18/A/
OroAmerica, Inc. 4 26/A/
OshKosh B'Gosh, Inc. 1 23
Owens Corning 5 50
Oxford Industries, Inc. 6 110
Palm Harbor Homes, Inc. 12 167/A/
Patrick Industries, Inc. 4 22
Paul Harris Stores, Inc. 1 3/A/
Perry Ellis International, Inc. 4 30/A/
Personal Group of America, Inc. 20 58/A/
Piercing Pagoda, Inc. 3 46/A/
Pioneer-Standard Electronics, Inc. 18 265
PremiumWear, Inc. 1 13/A/
Prime Hospitality Corp. 43 403/A/
Pulte Corporation 37 794
Q.E.P. Co., Inc. 2 17/A/
R & B, Inc. 6 16/A/
RCM Technologies, Inc. 3 23/A/
RDO Equipment Co. 8 42/A/
Refac 3 9/A/
Republic Group Incorporated 7 67
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Cyclicals -- Continued
Royal Appliance Mfg. Co. 5 $ 26/A/
Rural/Metro Corporation 11 18/A/
Rush Enterprises, Inc. 2 8/A/
Russ Berrie and Company, Inc. 14 269
S&K Famous Brands, Inc. 3 23/A/
Savoir Technology Group, Inc. 9 61/A/
Service Corporation International 36 115
Shoe Pavilion, Inc. 5 9/A/
ShopKo Stores, Inc. 9 138/A/
Simpson Industries, Inc. 14 102
Skyline Corporation 7 146
Sola International Inc. 5 25/A/
SOS Staffing Services, Inc. 10 29/A/
Specialty Catalog Corp. 1 3/A/
Sport-Haley, Inc. 3 12/A/
Standard Motor Products, Inc. 9 77
Standard Pacific Corp. 23 226
Steinway Musical Instruments, Inc. 2 40/A/
Stewart Enterprises, Inc. 77 272
Strattec Security Corporation 2 75/A/
Sturm, Ruger & Company, Inc. 8 71
Suburban Lodges of America, Inc. 12 67/A/
Systemax, Inc. 25 96/A/
Tandy Brands Accessories, Inc. 3 25/A/
TBC Corporation 15 67/A/
The Bon-Ton Stores, Inc. 12 27/A/
The Cato Corporation 13 149
The Dixie Group, Inc. 9 35/A/
The Dress Barn, Inc. 17 365/A/
The Elder-Beerman Stores Corp. 5 19/A/
The First Years Inc. 2 22
The L. S. Starrett Company 4 74
The Lamson & Sessions Co. 8 115/A/
The Ryland Group, Inc. 12 254
The Warnaco Group, Inc. 5 40
The York Group, Inc. 6 26/A/
Thomas Group, Inc. 3 27/A/
Toll Brothers, Inc. 25 510/A/
Tractor Supply Company 2 31/A/
Travis Boats & Motors, Inc. 1 8/A/
UniFirst Corporation 12 98
</TABLE>
12
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Cyclicals -- Continued
United Auto Group, Inc. 4 $ 33/A/
Washington Homes, Inc. 5 32/A/
Westaff, Inc. 12 52/A/
WestPoint Stevens Inc. 2 18
Whitehall Jewellers, Inc. 5 95/A/
Winnebago Industries, Inc. 7 97
Wolohan Lumber Co. 3 33
World Fuel Services Corporation 9 73
-------
16,316
-------
Consumer Staples -- 9.9%
Ark Restaurants Corp. 3 20/A/
Barnett Inc. 12 125/A/
BCT International, Inc. 3 4/A/
Burns International Services Corporation 4 50
Cadmus Communications Corporation 5 46/A/
Cagle's, Inc. 4 27
Catalina Lighting, Inc. 3 13/A/
Chromcraft Revington, Inc. 8 93/A/
CKE Restaurants, Inc. 39 115
Consolidated Graphics, Inc. 3 29/A/
Courier Corporation 2 43
Dave & Busters, Inc. 9 56/A/
Decorator Industries, Inc. 2 10
Department 56, Inc. 12 135/A/
Ellett Brothers, Inc. 5 19
ELXSI Corporation 3 28/A/
Ennis Business Forms, Inc. 12 98
Flexsteel Industries, Inc. 4 50
French Fragrances, Inc. 10 85/A/
Furniture Brands International, Inc. 15 231/A/
Hawkins Chemical, Inc. 3 24
Herbalife International, Inc. 17 147
Home Products International, Inc. 6 21/A/
Hughes Supply, Inc. 17 336
International Multifoods Corporation 4 66
JLK Direct Distribution Inc. 17 86/A/
La-Z-Boy Incorporated 4 50
Landry's Seafood Restaurants, Inc. 22 186/A/
Lawson Products, Inc. 6 143
Luby's, Inc. 16 127
Mail-Well, Inc. 17 144/A/
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Consumer Staples -- Continued
Marsh Supermarkets, Inc. 3 $ 52
Metals USA, Inc. 29 134
Michael Foods, Inc. 9 208
Mikasa, Inc. 8 84
Nash-Finch Company 5 43
Nature's Sunshine Products, Inc. 13 94
NPC International, Inc. 5 41/A/
Oneida Ltd. 5 87
Pilgrim's Pride Corporation 9 63
Pilgrim's Pride Corporation - Class A 4 21
PrimeSource Corporation 4 18
R.H. Phillips, Inc. 4 10/A/
Rainforest Cafe, Inc. 19 55/A/
Ryan's Family Steak Houses, Inc. 30 249/A/
Sanderson Farms, Inc. 3 26
Scheid Vineyards Inc. 2 5
Schlotzsky's, Inc. 5 29/A/
Schweitzer-Mauduit International, Inc. 12 149
Sizzler International, Inc. 19 50/A/
Standard Commercial Corporation 9 40
Star Buffet, Inc. 2 7/A/
Suprema Specialties, Inc. 1 11/A/
The Rowe Companies 10 39
The Standard Register Company 16 221
Todhunter International, Inc. 2 16/A/
Universal Corporation 25 522
USANA, Inc. 3 9/A/
Wallace Computer Services, Inc. 8 82
WLR Foods, Inc. 12 57/A/
-------
5,029
-------
Energy -- 0.5%
Adams Resources & Energy 3 36
Friede Goldman International Inc. 11 102/A/
Holly Corporation 6 74
Mercury Air Group, Inc. 6 27/A/
Petroleum Development Corporation 5 26/A/
-------
265
-------
</TABLE>
14
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Financials -- 17.1%
Advanta Corp. 18 $ 216
Alliance Bancorp of New England, Inc. 1 7
AMERCO 10 202/A/
American Business Financial Services, Inc. 1 11
AmerUs Life Holdings, Inc. 22 454
Amplicon, Inc. 6 59
AMREP Corporation 3 17/A/
Atlantic American Corporation 1 4/A/
Avis Group Holdings, Inc. 22 411/A/
Bancinsurance Corporation 2 10/A/
Bank United Corp. 2 63
BankAtlantic Bancorp, Inc. 30 112
Bay View Capital Corporation 13 131
Bluegreen Corporation 17 48/A/
BSB Bancorp, Inc. 7 136
BYL Bancorp 2 16
Camco Financial Corporation 1 13
Capital Crossing Bank 2 18/A/
Community Bank System, Inc. 2 44
Corrus Bankshares, Inc. 11 291
Credit Acceptance Corporation 10 58/A/
Delphi Financial Group, Inc. 14 485/A/
Delta Financial Corporation 11 17/A/
DeWolfe Companies, Inc. 2 16/A/
Dime Community Bancshares 3 42
Dollar Thrifty Automotive Group, Inc. 8 138/A/
Donegal Group Inc. 6 36
Downey Financial Corp. 12 336
Electro Rent Corporation 6 73/A/
Enhance Financial Services Group, Inc. 29 423
First Citizens Bancshares Inc. 6 357
First Essex Bancorp, Inc. 2 35
First Republic Bank 3 62/A/
FirstFed Financial Corp. 15 209/A/
Flagstar Bancorp, Inc. 9 76
FPIC Insurance Group, Inc. 3 45/A/
GA Financial, Inc. 4 43
GBC Bancorp 2 59
Hamilton Bancorp Inc. 8 131/A/
Harleysville Group Inc. 10 166
Hawthorne Financial Corporation 4 28/A/
Healthcare Recoveries, Inc. 7 25/A/
IBERIABANK Corporation 5 72
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Financials -- Continued
Industrial Bancorp, Inc. 1 $ 15
Interpool, Inc. 20 190
Interstate National Dealer Services, Inc. 3 17/A/
ITLA Capital Corporation 5 71/A/
Jefferies Group, Inc. 6 125
Kaye Group Inc. 4 26
LandAmerica Financial Group, Inc. 9 213
MAF Bancorp, Inc. 5 89
Matrix Bancorp, Inc. 2 10/A/
McGrath Rentcorp 8 127
Merchants Bancshares, Inc. 3 55
Merchants Group, Inc. 1 17
MetroWest Bank 4 23
National City Bancorporation 7 96/A/
National Equipment Services, Inc. 5 29/A/
National Western Life Insurance Company 3 187/A/
Onyx Acceptance Corporation 2 9/A/
Pacific Crest Capital, Inc. 2 26
Parkvale Financial Corporation 5 81
Penn Treaty American Corporation 6 97/A/
PFF Bancorp, Inc. 3 51
Philadelphia Consolidated Holding Corp. 3 44/A/
Professionals Group, Inc. 4 108/A/
Raymond James Financial, Inc. 3 61
Republic Security Financial Corporation 5 24
Rollins Truck Leasing Corp. 16 112
Selective Insurance Group, Inc. 1 17
Silverleaf Resorts, Inc. 3 8/A/
Standard Management Corporation 5 17/A/
State Auto Financial Corporation 3 36
Sterling Financial Corporation 6 70/A/
Stewart Information Services Corporation 10 139/A/
TFC Enterprises, Inc. 10 19/A/
The Commerce Group, Inc. 26 770
The Midland Company 3 83
Three Rivers Bancorp, Inc. 5 33
Trammell Crow Company 21 227/A/
Unico American Corporation 4 25
Union Acceptance Corporation 1 5/A/
USBANCORP, Inc. 10 36
World Acceptance Corporation 14 74/A/
WSFS Financial Corporation 1 8
-------
8,665
-------
</TABLE>
16
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Health Care -- 2.3%
Air Methods Corporation 3 $ 8/A/
American Physicians Service Group, Inc. 2 6/A/
AmeriPath, Inc. 16 140/A/
Beverly Enterprises, Inc. 80 225/A/
Capital Senior Living Corporation 14 40/A/
Castle Dental Centers, Inc. 5 9/A/
Coast Dental Services, Inc. 5 8/A/
Curative Health Services, Inc. 7 41/A/
DVI, Inc. 3 50/A/
Healthcare Services Group, Inc. 8 34/A/
Hi-Tech Pharmacal Co., Inc. 2 10/A/
Horizon Health Corporation 4 24/A/
Lifemark Corporation 2 10/A/
Magellan Health Services, Inc. 7 8/A/
Mesa Laboratories, Inc. 2 9/A/
Minntech Corporation 2 14
Monarch Dental Corporation 7 23/A/
Moore Medical Corporation 2 13/A/
Niagara Corporation 5 22/A/
Ocular Sciences, Inc. 5 60/A/
OrthAlliance, Inc. 5 29/A/
Pediatrix Medical Group, Inc. 11 123/A/
ProMedCo Management Company 16 17/A/
Radiologix, Inc. 15 54/A/
Raytel Medical Corporation 6 10/A/
Serologicals Corporation 15 74/A/
Sierra Health Services, Inc. 20 64/A/
Superior Uniform Group Inc. 1 11
Utah Medical Products, Inc. 3 22/A/
-------
1,158
-------
Technology -- 4.0%
Alliant Techsystems Inc. 5 317/A/
Applied Signal Technology, Inc. 6 67
Avant! Corporation 24 453/A/
Blonder Tongue Laboratories, Inc. 3 20/A/
Comdial Corporation 5 22/A/
Del Global Technologies Corp. 5 52/A/
EDO Corporation 4 26
Esterline Technologies Corporation 4 54/A/
Gerber Scientific, Inc. 7 78
GTECH Holdings Corporation 25 576/A/
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Technology -- Continued
Herley Industries, Inc. 3 $ 53/A/
Hurco Companies, Inc. 4 17/A/
K-Tron International, Inc. 2 33/A/
NeoMagic Corporation 20 59/A/
Paravant Inc. 1 4/A/
Printronix, Inc. 4 53/A/
PSC Inc. 9 72/A/
ScanSoft, Inc. 3 7/A/
Software Spectrum, Inc. 3 49/A/
-------
2,012
-------
Transportation -- 6.0%
Alaska Air Group, Inc. 6 155/A/
America West Holdings Corporation 32 548/A/
Amtran, Inc. 2 21/A/
Arkansas Best Corporation 14 141/A/
Arnold Industries, Inc. 19 224
Boyd Bros. Transportation Inc. 2 9/A/
CD&L, Inc. 5 7/A/
Consolidated Freightways Corporation 4 16/A/
Covenant Transport, Inc. 11 90/A/
Dynamex Inc. 2 4/A/
Genesee & Wyoming Inc. 3 49/A/
Hawaiian Airlines, Inc. 28 73/A/
Midway Airlines Corporation 6 30/A/
Oglebay Norton Company 3 84
Old Dominion Freight Line, Inc. 5 51/A/
P.A.M. Transportation Services, Inc. 6 59/A/
RailWorks Corporation 3 24/A/
Roadway Express, Inc. 15 349
Smithway Motor Xpress Corp. 3 5/A/
The Greenbrier Companies, Inc. 11 78
Transport Corporation of America, Inc. 5 31/A/
U.S. Xpress Enterprises, Inc. 11 89/A/
USA Truck, Inc. 6 37/A/
USFreightways Corporation 5 133
Wisconsin Central Transportation Corporation 33 426/A/
Yellow Corporation 20 294/A/
-------
3,027
-------
</TABLE>
18
<PAGE>
Portfolio of Investments -- Continued
Legg Mason Investors Trust, Inc.
U.S. Small-Capitalization Value Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------
<S> <C> <C>
Utilities -- 1.9%
Bangor Hydro-Electric Company 5 $ 106
EnergySouth, Inc. 3 51
Maine Public Service Company 1 24
Public Service Company of New Mexico 32 492
RGS Energy Group, Inc. 12 276
-------
949
-------
Total Common Stock and Equity Interests (Identified Cost -- $62,015) 48,918
------------------------------------------------------------------------------------------
Repurchase Agreements -- 3.4%
Goldman, Sachs & Company
6.82%, dated 6/30/00, to be repurchased at $1,742
on 7/3/00 (Collateral: $1,764 Fannie Mae mortgage-backed
securities, 8.50%, due 10/1/28, value $1,807) $1,741 1,741
-------
Total Repurchase Agreements (Identified Cost -- $1,741) 1,741
------------------------------------------------------------------------------------------
Total Investments -- 99.8% (Identified Cost -- $63,756) $50,659
Other Assets Less Liabilities -- 0.2% 88
-------
Net assets -- 100.0% $50,747
=======
Net asset value per share:
Primary Class $7.25
=====
Navigator Class $7.41
=====
------------------------------------------------------------------------------------------
</TABLE>
/A/ Non-income producing.
N.M. -- Not meaningful.
19
<PAGE>
Investment Manager
Legg Mason Fund Adviser, Inc.
Baltimore, MD
Investment Advisers
For American Leading Companies Trust:
Legg Mason Fund Adviser, Inc.
Baltimore, MD
For Balanced Trust:
Bartlett & Co.
Cincinnati, OH
For Financial Services Fund:
Legg Mason Fund Adviser, Inc.
Baltimore, MD
For U.S. Small-Cap Value Trust:
Brandywine Asset Management,Inc.
Wilmington, DE
Investment Sub-Adviser 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
8/00
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