<PAGE>
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LOOMIS SAYLES INVESTMENT TRUST
Annual Report
September 30, 1998
California Tax-Free Income Fund
Core Fixed Income Fund
Core Growth Fund
Fixed Income Fund
High Yield Fixed Income Fund
Intermediate Duration Fixed Income Fund
Investment Grade Fixed Income Fund
LOOMIS SAYLES
INVESTMENT TRUST
A Family of International Mutual Funds
One Financial Center o Boston, Massachusetts 02111
888-226-9699
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
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[Photo of Daniel J. Fuss]
DANIEL J. FUSS
President
Dear Shareholders:
There is no doubt about it...it was a miserable quarter and a difficult nine
months. Unless you were fully invested in Treasuries, your portfolio is probably
looking rather unhealthy. However, there is hope on the horizon and, although,
perhaps it is my age, I feel very comfortable with the general outlook of the
market right now.
To use a forest fire analogy, the spark which ignited the global turmoil was
Russia. The fuel for the fire was the enormous amount of leverage which existed
in the global bond markets. Following the announcement last August that Russia
would default on some of their short-term debt, bond prices (other than
Governments) declined. The spread in the yield between U.S. Treasuries and
corporate bonds widened tremendously. The corporate bond market became
relatively illiquid and the spread between bid and ask prices widened by a
factor of 10 or more.
As one might expect, investors fled into Government bonds. Anything with the
slightest hint of risk -- even blue chip, high quality bonds -- were shunned and
their performance lagged that of Treasuries.
It is little wonder that some hedge funds ran into trouble. It is not that the
credits went bad. It was simply that two things happened at once. The Treasuries
they shorted went up, and the positions they owned went down (the same thing
happened to dealers, further reducing the liquidity of the corporate bond
market).
Fortunately, we believe things are not as bad as they seem. For us, it is
strictly a case of "same bonds, new prices", without anything going terribly
wrong with our specific holdings, but rather global market conditions. The
question remains, how many more sparks are there out there? My guess is that
sparks will continue to fly, but the major inferno is behind us.
For example, Thailand has taken serious steps to fix their banks. Korea's
current account is strong and its foreign exchange reserves have skyrocketed.
We have seen some encouraging signs in Japan.
Luckily, the Federal Reserve appears inclined to act quickly and decisively to
avoid a recession. The two rate cuts which followed each other in quick
succession (and I predict there will be more on the way) demonstrate just how
quickly things can change. Instead of trying to pull liquidity out of the
system, the Reserve Bank is trying to put liquidity into the system.
Forests don't regrow overnight and what is required now is patience. Although
it may hurt over the short run, we believe that these periods of volatility
present opportunities to buy the securities of good companies at lower prices
and higher yields. We believe that buying the securities of good companies at
low prices is the foundation of future performance.
Sincerely,
/s/ Daniel J. Fuss
Daniel J. Fuss
<PAGE>
LOOMIS SAYLES CALIFORNIA
TAX-FREE INCOME FUND
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The Loomis Sayles California Tax-Free Income Fund attempts to achieve a high
level of current income exempt from both federal income tax and California
personal income tax as consistent with preservation of capital. For the nine
months ended September 30, 1998, the Fund had a total return of 5.30%, as
compared to the Fund's benchmark, the Lehman Brothers 5 Year Municipal Bond
Index, total return of 4.98%. For the same period, the average California
intermediate municipal debt fund, as measured by Lipper Analytical Services, had
a total return of 5.29%.
As 1998 unfolded, the more attractive relative values in California municipal
securities were those with higher coupons maturing in fifteen to twenty years
but callable in five to seven years.
During the first half of the year the Fund continued to consolidate. The Fund
also extended its call dates of new purchases from 2001-02 to 2003-05. We
believe that this extension should help maintain a high current yield plus
provide some appreciation potential as rates move lower.
Earlier in the year, underperformance was the result of a much greater than
expected supply of tax-exempt securities. More recently, the demand side for
Treasuries has exploded, as investors sought refuge in the U.S. Government
market. While more traditional buyers of tax-exempt securities, such as life
insurance companies and pension funds, have been actively accumulating municipal
securities, it is important to remember that this sector has become very rich
versus corporate bonds, especially in August. Many total return investors,
including Loomis Sayles, have taken advantage of this trend, by swapping into
the latter sector. However, we feel, for individuals in the maximum tax bracket,
municipal securities appear to be an excellent choice going forward.
The fourth quarter California municipal securities calendar should afford us the
opportunity for modest extension at attractive yield levels in the ten to
fifteen year area.
Robert K. Payne is the portfolio manager for the Loomis Sayles California Tax-
Free Income Fund.
<PAGE>
Cumulative Performance Inception(a) to September 30, 1998
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Average Returns (%) - Period Ended September 30, 1998
Annualized
-------------------
Since
Year to date 1 year 3 years Inception
Loomis Sayles California
Tax-Free Income Fund 5.30 7.31 6.60 6.51
Lipper California Intermediate
Municipal Bond Fund Index(b) 5.32 7.39 6.63 6.56
Lehman Brothers 5 Year Municipal
Bond Index(c) 4.98 6.76 5.91 6.11
Lehman Brothers Municipal Bond
Index(c) 5.84 8.71 7.92 7.73
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[A line graph depicting the following plot points appears here.]
Loomis Lehman 5 Year Lehman
As of 6/1/95 10.00 10.00 10.00
Period Ended
6/30/95 09.93 10.02 09.91
9/30/95 10.19 10.26 10.20
12/31/95 10.49 10.47 10.62
3/31/96 10.47 10.47 10.49
6/30/96 10.52 10.53 10.57
9/30/96 10.69 10.70 10.81
12/31/96 10.93 10.91 11.09
3/31/97 10.92 10.91 11.06
6/30/97 11.22 11.18 11.45
9/30/97 11.49 11.41 11.79
12/31/97 11.69 11.61 12.11
3/31/98 11.83 11.74 12.25
6/30/98 11.97 11.87 12.44
9/30/98 12.31 12.19 12.82
Cumulative Performance Registration(a) to September 30, 1998
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Average Returns (%) - Period Ended September 30, 1998
Annualized
---------
Since
Year to date 1 year Registration
Loomis Sayles California
Tax-Free Income Fund 5.30 7.31 7.70
Lipper California Intermediate
Municipal Bond Fund Index(b) 5.32 7.39 8.62
Lehman Brothers 5 Year Municipal
Bond Index(c) 4.97 6.76 7.66
Lehman Brothers Municipal Bond
Index(c) 5.84 8.71 10.31
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[A line graph depicting the following plot points appears here.]
Loomis Lehman 5 Year Lehman
As of 3/7/97 10.00 10.00 10.00
Period Ended
3/31/97 9.94 10.00 10.00
6/30/97 10.21 10.24 10.35
9/30/97 10.47 10.46 10.66
12/31/97 10.67 10.64 10.95
3/31/98 10.79 10.77 11.07
6/30/98 10.92 10.89 11.24
9/30/98 11.23 11.17 11.58
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles California Tax-Free Income Fund is
June 1, 1995. Shares of the Fund were registered for offer and sale under
the Securities Act of 1933 on March 7, 1997. In accordance with SEC
regulations, performance information is provided for the period beginning
on March 7, 1997 ("Registration"). For the convenience of our long-term
shareholders, performance information is also provided for the period
beginning on June 1, 1995 ("Inception"). Since Lipper California
Intermediate Municipal Bond Fund Index, Lehman Brothers 5 Year Municipal
Bond Index & Lehman Brothers Municipal Bond Index performance data is not
available coincident with the registration date, comparative performance
is presented from March 31, 1997.
(b): Source: Lipper Analytical Services.
(c): Prior to fiscal year 1998, the Fund used the Lehman Brothers Municipal
Bond Index for comparative performance purposes. Beginning in 1998, the
Fund is using the Lehman Brothers 5 Year Municipal Bond Index for
comparative performance purposes. This Index better represents the
investment strategy of the Fund. The Lehman Brothers 5 Year Municipal Bond
Index is computed from prices on approximately 6,100 bonds, with a
maturity range of 4-6 years, consisting of roughly 23% revenue bonds, 24%
general obligation bonds, 41% insured bonds, and 12% prerefunded bonds.
The index returns have not been reduced for ongoing management and
operating expenses applicable to mutual fund investments. Source: Lehman
Brothers.
<PAGE>
LOOMIS SAYLES CORE FIXED INCOME FUND
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The Loomis Sayles Core Fixed Income Fund attempts to achieve high total
investment return through a combination of current income and capital
appreciation. For the nine months ended September 30, 1998, the Fund had a total
return of 7.79% as compared to the Fund's benchmark, the Merrill Lynch
Corporate/Government Bond Index, total return of 9.28%. For the same period, the
average A rated corporate debt fund, as measured by Lipper Analytical Services
had a total return of 7.47%
While returns on broad market indices were generally strong for the nine months
ended September 30, 1998, there were several factors that caused significant
differences in returns between major sectors of the market. The U.S. Treasury
Index, for example, outperformed the overall investment grade corporate bond
index by nearly 2.50%. This rather sharp repricing of the corporate bond market
was triggered by Russia's late August currency devaluation and defacto default
on its debt. Investors shunned risk in favor of the safety and liquidity of U.S.
Treasuries. Further strain was put on the market as forced liquidations of
highly leveraged trading strategies created a surge in supply of the types of
securities investors seemed to be avoiding. The combined effect of this excess
supply and reduced demand put significant pressure on corporate bonds and
mortgage-backed securities while boosting the premium paid for higher quality,
more liquid investments. Being underweighted in U.S. Treasuries, while well
supported by historical evidence, caused the Fund's performance to lag some of
the broader market indices.
Looking ahead, we see the yield advantage that has been created for U.S.
corporate bonds and mortgage-backed securities to be as compelling as it has
been since the early 1990s. In certain cases, valuations assigned to investment
grade issuers have approached recessionary levels in spite of the continued
resilience of the domestic economy. Further, with controlled inflation providing
the basis for bond market stability, the Federal Reserve has initiated a series
of interest rate cuts intended to preempt slower economic growth. Any impact
tighter credit conditions may have had on economic growth should be mitigated by
these rate cuts and any additional cuts planned before the end of 1998. Given
the strength of corporate balance sheets and the timely action by the Federal
Reserve, we believe a unique opportunity may have emerged to selectively add to
high quality corporate bond holdings at extremely attractive valuations. As
such, the Fund will continue to pursue investment grade corporate bonds armed
with the strength of Loomis Sayles' proprietary credit research.
William F. Camp is the portfolio manager for the Loomis Sayles Core Fixed
Income Fund.
Cumulative Performance Inception(a) to September 30, 1998
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Average Returns (%) - Period Ended September 30, 1998
Annualized
----------
Since
Year to date 1 year Inception
Loomis Sayles Core Fixed
Income Fund 7.79 11.10 9.23
Lipper Corp. A Rated Bond
Fund Index(b) 7.17 10.21 9.64
Merrill Lynch Corporate/
Government Bond Index(c) 9.28 12.75 10.47
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[A line graph depicting the following plot points appears here.]
Loomis Merrill
As of 4/24/96 10.00 10.00
Period Ended
6/30/96 10.06 10.04
9/30/96 10.21 10.21
12/31/96 10.53 10.53
3/31/97 10.44 10.45
6/30/97 10.80 10.82
9/30/97 11.16 11.26
12/31/97 11.50 11.61
3/31/98 11.64 11.80
6/30/98 11.93 12.11
9/30/98 12.40 12.69
Cumulative Performance Registration(a) to September 30, 1998
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Average Returns (%) - Period Ended September 30, 1998
Annualized
----------
Since
Year to date 1 year Registration
Loomis Sayles Core Fixed
Income Fund 7.79 11.10 10.91
Lipper Corp. A Rated Bond
Fund Index(b) 7.17 10.21 11.99
Merrill Lynch Corporate/
Government Bond Index(c) 9.28 12.75 13.50
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[A line graph depicting the following plot points appears here.]
Loomis Merrill
As of 3/7/97 10.00 10.00
Period Ended
3/31/97 9.90 10.00
6/30/97 10.25 10.36
9/30/97 10.59 10.72
12/31/97 10.91 11.07
3/31/98 11.04 11.24
6/30/98 11.32 11.53
9/30/98 11.76 12.09
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Core Fixed Income Fund is April 24,
1996. Shares of the Fund were registered for offer and sale under the
Securities Act of 1933 on March 7, 1997. In accordance with SEC
regulations, performance information is provided for the period beginning
on March 7, 1997 ("Registration"). For the convenience of our long-term
shareholders, performance information is also provided for the period
beginning on April 24, 1996 ("Inception"). Since Lipper Corporate A Rated
Bond Fund Index & Merrill Lynch Corporate/Government Bond Index
performance data is not available coincident with the inception and
registration dates, comparative performance is presented from April 30,
1996 and March 31, 1997, respectively.
(b): Source: Lipper Analytical Services.
(c): The Merrill Lynch Corporate/Government Bond Index is composed of all bonds
that are investment grade (rated Baa or higher by Moody's or BBB or higher
by S&P, if unrated by Moody's). Issues must have at least one year to
maturity. Total return comprises price appreciation/depreciation and
income as a percentage of the original investment. Indices are rebalanced
monthly by market capitalization. Source: Merrill Lynch.
<PAGE>
LOOMIS SAYLES CORE GROWTH FUND
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The Loomis Sayles Core Growth Fund attempts to achieve long-term growth of
capital. For the nine months ended September 30, 1998, the Fund had a total
return of 10.85%, as compared to the Fund's benchmark, the S&P 500 Index total
return of 6.00%. For the same period, the average growth fund, as measured by
Lipper Analytical Services, had a total return of -0.21%.
In the second quarter the shortfall in the Fund's performance versus the S&P 500
is essentially accounted for by one stock, Analog Devices. The issue declined
37% in May after reporting second quarter results 12% above the prior year but
10% below consensus expectations. Other weaknesses were in the energy sector and
some consumer nondurable stocks. Average capitalization size, while much larger
than it historically has been, also hurt, especially in the late June rally
which was almost entirely concentrated in large growth names. On the plus side,
a number of issues including Cisco, Chrysler, American Express, Warner Lambert
and EMC delivered strong performance.
The third quarter began with a continuation of the strong momentum that the June
quarter ended on. By July 20\t/\h/ the S&P 500 Index reached an all time peak of
1190.58. This was not only high in absolute terms, but, at over 26 times
prevailing estimates for 1998 earnings, was probing record territory relative to
expected earnings. At this point renewed concerns about Asia and the potential
for a spillover to other parts of the developing world, Latin America and Russia
in particular, began to impact financial markets.
A lack of exposure to some of the giant S&P 500 stocks such as General Electric
and Coca Cola which finally saw their lofty valuations contract, was one
contributor to the third quarter's good performance. Also helpful was a below
market exposure to the financial sector and an above market position in the
telephone companies. The best performing stocks included EMC, Anadarko
Petroleum, which had a potentially major discovery, Safeway, Schering-Plough,
CVS and Bell South. The worst performances were turned in by Xerox, which has a
large Brazilian operation, American International Group, which is exposed to
Asia, Circuit City, and Analog Devices.
Quentin P. Faulkner is the portfolio manager for the Loomis Sayles Core Growth
Fund.
<PAGE>
Cumulative Performance Inception(a) to September 30, 1998
- --------------------------------------------------------------------
Average Returns (%) - Period Ended September 30, 1998
Annualized
----------
Since
Year to date 1 year Inception
Loomis Sayles Core Growth Fund 10.85 6.43 14.18
Lipper Growth Fund Index(b) 2.38 3.07 16.43
S&P 500 Index(c) 6.00 9.05 22.60
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[A line graph depicting the following plot points appears here.]
Loomis S&P
As of 10/1/95 10.00 10.00
Period Ended
12/31/95 10.04 10.60
3/31/96 10.21 11.17
6/30/96 10.53 11.67
9/30/96 10.82 12.03
12/31/96 11.61 13.04
3/31/97 11.88 13.39
6/30/97 13.14 15.72
9/30/97 13.04 16.90
12/31/97 13.43 17.39
3/31/98 15.39 19.81
6/30/98 15.72 20.47
9/30/98 14.89 18.43
Cumulative Performance Inception(a) to September 30, 1998
- --------------------------------------------------------------------
Average Returns (%) - Period Ended September 30, 1998
Annualized
----------
Since
Year to date 1 year Registration
Loomis Sayles Core Growth Fund 10.85 6.43 12.33
Lipper Growth Fund Index(b) 2.38 3.07 20.08
S&P 500 Index(c) 6.00 9.05 23.76
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[A line graph depicting the following plot points appears here.]
Loomis S&P
As of 3/7/97 10.00 10.00
Period Ended
3/31/97 9.58 10.00
6/30/97 10.59 11.75
9/30/97 11.27 12.63
12/31/97 10.82 12.99
3/31/98 12.40 14.80
6/30/98 12.67 15.29
9/30/98 12.00 13.77
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Core Growth Fund is October 1, 1995.
Shares of the Fund were registered for offer and sale under the Securities
Act of 1933 on March 7, 1997. In accordance with SEC regulations,
performance information is provided for the period beginning on March 7,
1997 ("Registration"). For the convenience of our long-term shareholders,
performance information is also provided for the period beginning on
October 1, 1995 ("Inception"). Since Lipper Growth Fund Index & S&P 500
Index performance data is not available coincident with the registration
date, comparative performance is presented from March 31, 1997.
(b): Source: Lipper Analytical Services.
(c): S&P 500 Index is a capitalization-weighted, total return index comprised
of 500 widely held common stocks, representing industrial, utility,
transportation, and financial companies traded on the New York Stock
Exchange, the American Stock Exchange and in the Over-the-Counter market.
The index returns have not been reduced for ongoing management and
operating expenses applicable to mutual fund investments.
<PAGE>
LOOMIS SAYLES FIXED INCOME FUND
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The Loomis Sayles Fixed Income Fund attempts to achieve high total investment
return through a combination of current income and capital appreciation. For the
nine months ended September 30, 1998, the Fund had a total return of -0.44%, as
compared to the Fund's benchmark, the Lehman Brothers Government/ Corporate Bond
Index, total return of 9.33%. For the same period, the average BBB rated debt
fund, as measured by Lipper Analytical Services, had a total return of 5.45%.
In the past nine months, the landscape of fixed income markets has changed
substantially. Global economic turmoil heightened investor uncertainty and led
to dramatic spread widening among corporate bonds. The Fund's Treasury holdings
were among the strongest performers benefiting from the ongoing global flight to
quality that began with the "Asian Contagion" and gained momentum with Russia
announcing its inability to meet short-term debt obligations. Further
complicating matters was Japan's inability to establish a credible plan to
restore economic order and the subsequent relatively illiquid nature of high
yield markets. The combination of these factors resulted in wider spreads in
virtually all non-Treasury market segments. The Fund's lower rated issues and
Yankee bonds were especially hard hit. Cyclical and Industrial positions
performed well for most of the period, but retreated recently as investors sold
out of bonds perceived to be leveraged to the waning economic cycle.
The Fund's significant position in Canadian government and provincial issues had
a mildly positive impact on performance, despite being hampered by a weaker
Canadian dollar. The Fund's commitment to the telecommunications and cable/media
sectors proved beneficial as telecommunications providers continue to upgrade
their network infrastructures to better accommodate both voice and data internet
traffic.
The Fixed Income Fund remains well diversified across individual issues and
countries. The Fund continues to stress call protection, yield advantage, and a
moderate degree of international exposure as a means of maximizing total return.
As a result of the recent market turbulence, we believe the Fund has built in a
meaningful yield advantage relative to the benchmark while maintaining a stable
credit profile leaving the Fund well positioned going forward.
Daniel J. Fuss is the portfolio manager for the Loomis Sayles Fixed Income Fund.
<PAGE>
Cumulative Performance Inception(a) to September 30, 1998
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Average Returns (%) - Period Ended September 30, 1998
Annualized
-------------------
Since
Year to date 1 year 3 years Inception
Loomis Sayles Fixed Income Fund -0.44 0.58 9.28 13.12
Lipper BBB Rated Bond Fund Index(b) 5.11 7.84 8.15 10.23
Lehman Brothers Gov't/Corp.
Bond Index(c) 9.33 12.84 8.92 10.55
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[A line graph depicting the following plot points appears here.]
Loomis Lehman
As of 1/17/95 10.00 10.00
Period Ended
3/31/95 10.50 10.30
6/30/95 11.55 10.97
9/30/95 12.10 11.18
12/31/95 12.74 11.70
3/31/96 12.56 11.43
6/30/96 12.72 11.48
9/30/96 13.27 11.68
12/31/96 13.98 12.04
3/31/97 14.06 11.94
6/30/97 14.87 12.37
9/30/97 15.70 12.80
12/31/97 15.86 13.21
3/31/98 16.43 13.41
6/30/98 16.51 13.76
9/30/98 15.79 14.45
Cumulative Performance Registration(a) to September 30, 1998
- ---------------------------------------------------------------------
Average Returns (%) - Period Ended September 30, 1998
Annualized
----------
Since
Year to date 1 year Registration
Loomis Sayles Fixed Income Fund -0.44 0.58 7.03
Lipper BBB Rated Bond
Fund Index(b) 5.11 7.84 10.84
Lehman Brothers Gov't/Corp.
Bond Index(c) 9.33 12.84 13.58
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[A line graph depicting the following plot points appears here.]
Loomis Lehman
As of 3/7/97 10.00 10.00
Period Ended
3/31/97 9.91 10.00
6/30/97 10.48 10.36
9/30/97 11.06 10.73
12/31/97 11.17 11.07
3/31/98 11.57 11.24
6/30/98 11.63 11.53
9/30/98 11.12 12.11
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Fixed Income Fund is January 17, 1995.
Shares of the Fund were registered for offer and sale under the Securities
Act of 1933 on March 7, 1997. In accordance with SEC regulations,
performance information is provided for the period beginning on March 7,
1997 ("Registration"). For the convenience of our long-term shareholders,
performance information is also provided for the period beginning on
January 17, 1995 ("Inception"). Since Lipper BBB Rated Bond Fund Index &
Lehman Brothers Government/ Corporate Bond Index performance data is not
available coincident with the inception and registration dates,
comparative performance is presented from January 31, 1995 and March 31,
1997, respectively.
(b): Source: Lipper Analytical Services.
(c): Lehman Brothers Government/Corporate Bond Index is a composite of
approximately 5,300 corporate and government issues with at least $100
million outstanding for government issues and $25 million for corporates,
and greater than 1 year maturity. The index returns have not been lowered
for ongoing management and operating expenses applicable to mutual fund
investments. Source: Lehman Brothers.
<PAGE>
LOOMIS SAYLES HIGH YIELD FIXED INCOME FUND
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The Loomis Sayles High Yield Fixed Income Fund attempts to achieve high total
investment return through a combination of current income and capital
appreciation. For the nine months ended September 30, 1998, the Fund had a total
return of -15.51%, as compared to the Fund's benchmark, the Merrill Lynch High
Yield Master Index, total return of 0.77%. For the same period, the average high
yield fund, as measured by Lipper Analytical Services, had a total return of
- -2.98%.
1998 has been a very challenging year for high yield investors. The lingering
economic crisis in Asia and the inability of Russia to meet its short-term debt
obligations triggered a capital flight from high yield bonds that forced hedge
fund managers to unwind their leveraged positions to meet margin calls. What
resulted was a relatively illiquid high yield market and the widest spreads
since the recessionary period of the early 1990s.
In terms of sector allocation, being heavily weighted in convertible bonds had a
negative impact on performance as equity markets retreated to twelve month lows.
The liquidity crisis particularly affected our Yankee exposure, as foreign bond
yields rose to their highest levels since the Mexican peso crisis in late 1994.
We continued to accumulate positions in this sector, however, throughout the
period and we remain optimistic that the easing initiative that the Fed has
embarked upon will help alleviate the credit crunch that has impeded both
emerging market and domestic high yield issuers from raising capital. Despite
underperforming in 1998, we continue to favor the Telecommunications sector
based upon the positive synergies we feel will be created for consumers by
consolidating wireless, local and long distance, cable and internet services.
As of September 30, 1998, the Fund was well diversified across 122 issues, with
a concentration in Yankee and Industrial sectors. The Fund currently holds
securities with an average dollar price of less than $60, reflecting the
embedded potential for capital appreciation as well as a commitment to call
protection. Over time, we believe the Fund's incremental yield advantage and
international diversification will provide attractive investment returns for
investors.
Daniel J. Fuss is the portfolio manager for the Loomis Sayles High Yield Fixed
Income Fund.
<PAGE>
Cumulative Performance Inception(a) to September 30, 1998
- --------------------------------------------------------------------
Average Returns (%) - Period Ended September 30, 1998
Annualized
----------
Since
Year to date 1 year Inception
Loomis Sayles High Yield
Fixed Income Fund -15.51 -18.40 -0.44
Lipper High Yield Bond
Fund Index(b) -3.12 -1.65 7.96
Merrill Lynch High Yield
Master Index(c) 0.77 3.37 9.55
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[A line graph depicting the following plot points appears here.]
Loomis Merrill
As of 6/5/96 10.00 10.00
Period Ended
6/30/96 10.03 10.06
9/30/96 10.38 10.45
12/31/96 10.76 10.86
3/31/97 10.55 10.98
6/30/97 11.22 11.50
9/30/97 12.13 11.88
12/31/97 11.72 12.19
3/31/98 12.50 12.53
6/30/98 11.85 12.74
9/30/98 9.90 12.28
[A line graph depicting the following plot points appears here.]
Cumulative Performance Registration(a) to September 30, 1998
- ----------------------------------------------------------------------
Average Returns (%) - Period Ended September 30, 1998
Annualized
----------
Since
Year to date 1 year Registration
Loomis Sayles High Yield
Fixed Income Fund -15.51 -18.40 -4.79
Lipper High Yield Bond
Fund Index(b) -3.12 -1.65 6.00
Merrill Lynch High Yield
Master Index(c) 0.77 3.37 8.18
- -------------------------------------------------------------------
Loomis Merrill
As of 3/7/97 10.00 10.00
Period Ended
3/31/97 9.87 10.00
6/30/97 10.49 10.48
9/30/97 11.35 10.89
12/31/97 10.96 11.17
3/31/98 11.69 11.48
6/30/98 11.08 11.67
9/30/98 9.26 11.25
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles High Yield Fixed Income Fund is June
5, 1996. Shares of the Fund were registered for offer and sale under the
Securities Act of 1933 on March 7, 1997. In accordance with SEC
regulations, performance information is provided for the period beginning
on March 7, 1997 ("Registration"). For the convenience of our long-term
shareholders, performance information is also provided for the period
beginning on June 5, 1996 ("Inception"). Since Lipper High Yield Bond Fund
Index & Merrill Lynch High Yield Master Index performance data is not
available coincident with the inception and registration dates,
comparative performance is presented from June 30, 1996 and March 31,
1997, respectively.
(b): Source: Lipper Analytical Services.
(c): The Merrill Lynch High Yield Master Index consists of issues of publicly
placed non-convertible, coupon-bearing U.S. domestic debt and must carry a
term to maturity of at least one year. Par amounts outstanding must be no
less than $10 million at the start and at the close of the performance
measurement period. Issues must be rated by Standard & Poor's or by
Moody's as less than investment grade (i.e., BBB or Baa) but not in
default (i.e., DD1 or less). The index excludes floating rate debt
equipment trust certificates and Title 11 securities. Source: Merrill
Lynch.
<PAGE>
LOOMIS SAYLES INTERMEDIATE DURATION FIXED INCOME FUND
- -------------------------------------------------------------------------------
The Loomis Sayles Intermediate Duration Fixed Income Fund attempts to achieve
high total investment return through a combination of current income and capital
appreciation while limiting volatility through maturity limitations. For the
period since modified inception, January 31, 1998 to September 30, 1998, the
Fund had a total return of 1.50%, as compared to the Fund's benchmark, the
Lehman Brothers Government/Corporate Intermediate Bond Index, total return of
6.72%. For the same period, the average intermediate investment grade debt fund,
as measured by Lipper Analytical Services, had a total return of 6.02%.
Like other corporate bond funds, the Loomis Sayles Intermediate Duration Fixed
Income Fund was negatively impacted by the dramatic spread widening on virtually
all non-Treasury segments of the bond market that occurred over the last nine
months with most of the widening taking place in August. This repricing of risk
or "flight to quality" was the dominant factor in the performance of the Fund.
Relative to its benchmark, the Fund was underweight in Treasuries, which were
among the best performers for the period. The Fund's holdings of mortgage-backed
securities also under performed as rates declined and prepayments increased. The
Fund's Yankee bond positions were also hit during the past quarter as these
bonds became relatively illiquid. The Fund's positions in U.S. Treasury and
Canadian government bonds were strong performers.
We continue to be very comfortable with the portfolio position. The Fund is well
diversified, offers good yield advantage, and call protection. In our opinion,
the spread widening has created an appropriate time to expand positions into
corporate and Yankee bonds as the yield advantage is now significant.
Simultaneously, we are doubling our efforts on credit specific research to
ensure we are getting paid for the credit risk we take.
Anthony J. Wilkins is the portfolio manager for the Loomis Sayles Intermediate
Duration Fixed Income Fund.
<PAGE>
Cumulative Performance Inception(a) to September 30, 1998
- ---------------------------------------------------------------------------
Average Returns (%) - Period Ended September 30, 1998
Since
Inception
Loomis Sayles Intermediate Duration Fixed Income Fund 1.91
Lipper Intermediate Investment Grade Bond Fund Index(b) 6.34
Lehman Brothers Gov't/Corp. Intermediate Bond Index(c) 6.72
- ---------------------------------------------------------------------------
[A line graph depicting the following plot points appears here.]
Loomis Lehman
As of 1/28/98 10.00 10.00
Period Ended
3/31/98 10.08 10.02
6/30/98 10.21 10.21
9/30/98 10.19 10.67
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Intermediate Duration Fixed Income
Fund is January 28, 1998. Since Lipper Intermediate Investment Grade Bond
Fund Index and Lehman Brothers Government/ Corporate Intermediate Bond
Index performance data is not available coincident with the inception
date, comparative performance is presented from January 31, 1998.
(b): Source: Lipper Analytical Services.
(c): The Lehman Brothers Government/Corporate Intermediate Bond Index consists
of those bonds held within the Lehman Brothers Government/ Corporate Bond
Index which have an average maturity of 1-10 years. The Lehman Brothers
Government/Corporate Bond Index consists of approximately 5,300 corporate
and government issues with at least $100 million outstanding for
government issues and $25 million for corporates, and greater than 1 year
maturity. The index returns have not been lowered for ongoing management
and operating expenses applicable to mutual fund investments.
<PAGE>
LOOMIS SAYLES INVESTMENT GRADE FIXED INCOME FUND
- --------------------------------------------------------------------------------
The Loomis Sayles Investment Grade Fixed Income Fund attempts to achieve high
total investment return through a combination of current income and capital
appreciation. For the nine months ended September 30, 1998, the Fund had a total
return of -0.03%, as compared to the Fund's benchmark, the Lehman Brothers
Government/Corporate Bond Index, total return of 9.33%. For the same period, the
average BBB rated debt fund, as measured by Lipper Analytical Services, had a
total return of 5.45%.
For the nine month period, the Fund was negatively impacted by the dramatic
spread widening on virtually all non-Treasury segments of the bond markets. In
the face of the world economic crisis, losses by leveraged investors (including
hedge funds and broker dealers) and the relative illiquidity of the world
markets, investors dramatically repriced risk. Treasury bonds were bought and
most other bonds were sold. During this "flight to quality", corporate bonds,
Yankee bonds and lower quality debt all underperformed Treasuries and the Fund's
benchmark. The Investment Grade Fixed Income Fund, by its style, held large
positions in corporate bonds and modest positions in Yankees and non-dollar
bonds. As a result, the Fund was largely underweight in Treasury bonds. This
difference in focus was the major factor in determining relative performance
results for the period. The U.S. Treasury positions and Canadian government
bonds did perform well, however.
As of September 30, 1998, the Fund maintained its focus on corporate bonds with
modest exposure to foreign issuers, including Yankee bonds and non-dollar
positions primarily in Canada. We have not changed our portfolio positions
dramatically, and we have not overreacted to the market conditions. Rather, we
view this as an appropriate time to expand positions in these areas as the yield
advantage has risen. At the same time, we are as diligent as ever on credit
risk. We believe that the Fund's holdings are well diversified.
In summary, we believe the Fund exhibits very strong yield advantage, call
protection and non-market-related factors. Overall, we are very comfortable with
the Fund's position vis-a-vis current world and capital market conditions. For
the long-term investor, we believe there is value in the current structure.
Daniel J. Fuss is the portfolio manager for the Loomis Sayles Investment Grade
Fixed Income Fund.
<PAGE>
Cumulative Performance Inception(a) to September 30, 1998
- ------------------------------------------------------------------------------
Average Returns (%) - Period Ended September 30, 1998
Annualized
-------------------
Since
Year to date 1 year 3 years Inception
Loomis Sayles Investment Grade
Fixed Income Fund -0.03 1.53 9.09 11.57
Lipper BBB Rated Bond Fund Index(b) 5.11 7.84 8.15 9.33
Lehman Brothers Gov't/Corp.
Bond Index(c) 9.33 12.84 8.92 9.75
- ------------------------------------------------------------------------------
[A line graph depicting the following plot points appears here.]
Loomis Lehman
As of 7/1/94 10.00 10.00
Period Ended
9/30/94 10.08 10.05
12/31/94 09.97 10.09
3/31/95 10.75 10.59
6/30/95 11.82 11.28
9/30/95 12.27 11.49
12/31/95 12.99 12.03
3/31/96 12.91 11.75
6/30/96 13.07 11.80
9/30/96 13.60 12.01
12/31/96 14.40 12.38
3/31/97 14.23 12.27
6/30/97 14.96 12.71
9/30/97 15.68 13.16
12/31/97 15.93 13.58
3/31/98 16.37 13.79
6/30/98 16.53 14.15
9/30/98 15.93 14.85
Cumulative Performance Registration(a) to September 30, 1998
- ----------------------------------------------------------------------
Average Returns (%) - Period Ended September 30, 1998
Annualized
----------
Since
Year to date 1 year Registration
Loomis Sayles Investment Grade
Fixed Income Fund -0.03 1.53 6.32
Lipper BBB Rated Bond Fund Index(b) 5.11 7.84 10.84
Lehman Brothers Gov't/Corp.
Bond Index(c) 9.33 12.84 13.58
- -------------------------------------------------------------------------
[A line graph depicting the following plot points appears here.]
Loomis Lehman
As of 3/7/97 10.00 10.00
Period Ended
3/31/97 9.84 10.00
6/30/97 10.34 10.36
9/30/97 10.84 10.73
12/31/97 11.01 11.07
3/31/98 11.32 11.24
6/30/98 11.43 11.53
9/30/98 11.01 12.11
Note: Past performance is not predictive of future performance.
(a): Inception date of the Loomis Sayles Investment Grade Fixed Income Fund is
July 1, 1994. Shares of the Fund were registered for offer and sale under
the Securities Act of 1933 on March 7, 1997. In accordance with SEC
regulations, performance information is provided for the period beginning
on March 7, 1997 ("Registration"). For the convenience of our long-term
shareholders, performance information is also provided for the period
beginning on July 1, 1994 ("Inception"). Since Lipper BBB Rated Bond Fund
Index & Lehman Brothers Government/Corporate Bond Index performance data
is not available coincident with the registration date, comparative
performance is presented from March 31, 1997.
(b): Source: Lipper Analytical Services.
(c): Lehman Brothers Government/Corporate Bond Index is a composite of
approximately 5,300 corporates and government issues with at least $100
million outstanding for government issues and $25 million for corporate,
and greater than 1 year maturity. The index returns have not been lowered
for ongoing management and operating expenses applicable to mutual fund
investments. Source: Lehman Brothers.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
LOOMIS SAYLES CALIFORNIA TAX-FREE INCOME FUND
Portfolio of Investments -- as of September 30, 1998
<TABLE>
<CAPTION>
Face
Amount Value (a)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS AND NOTES -- 4.6% OF NET ASSETS
Lehman Brothers Holdings, Inc., 6.400%, 12/27/99 ................ $ 900,000 $ 905,337
------------
TOTAL BONDS AND NOTES (Identified Cost $896,629) ................ 905,337
------------
MUNICIPAL BONDS AND NOTES -- 93.8% OF NET ASSETS
California Educational Facilities Authority Revenue,
6.000%, 2/15/17 ............................................... 600,000 644,904
California Health Facilities Authority Revenue, Series A,
6.750%, 10/01/19 .............................................. 500,000 522,765
California Health Facilities Authority Revenue, Series A, (MBIA
Insured), 5.550%, 8/15/25 ................................... 300,000 309,822
California Housing Finance Agency, (MBIA Insured),
5.200%, 8/01/05 ............................................. 230,000 244,476
California Housing Finance Agency, (MBIA Insured),
5.500%, 8/01/17 ............................................. 500,000 520,685
California Housing Finance Agency, (MBIA Insured),
5.850%, 8/01/09 ............................................. 300,000 324,324
California Pollution Control, 5.000%, 4/01/08 ................. 425,000 448,124
California Pollution Control, 5.900%, 6/01/14 ................. 400,000 453,680
California Resource Efficiency Financing, First Resource
Efficiency, (AMBAC Insured), 5.400%, 7/01/04 ................ 150,000 162,800
California State General Obligations, 5.500%, 6/01/01 ......... 500,000 524,345
California State General Obligations, 5.750%, 3/01/13 ......... 505,000 552,076
California State General Obligations, (MBIA Insured),
6.000%, 10/01/14 ............................................ 10,000 10,898
California State General Obligations, (MBIA Insured),
6.000%, 10/01/14, (Prerefunded 10/1/02 @ 102) ............... 240,000 265,104
California State Public Works Board, Community College, 5.200%,
3/01/06 ..................................................... 200,000 215,526
California State Public Works Board, Community College, 5.200%,
4/01/07 ..................................................... 500,000 541,825
California State Public Works Lease, 5.400%, 4/01/04 .......... 200,000 215,366
California State Water Resources Development, 5.000%, 3/01/01 200,000 201,492
Clovis, California, Unified School District, (FGIC Insured),
Zero Coupon Bond, 8/01/04 ................................... 200,000 160,112
Clovis, California, Unified School District, (FGIC Insured),
10.625%, 8/01/03 ............................................ 200,000 259,768
Corona, California, Single Family, 5.500%, 11/01/10 ........... 400,000 426,084
East Bay California Municipal Utility Water Systems,
6.000%, 6/01/12 ............................................. 500,000 544,820
Industry, California, (MBIA insured), 5.700%, 7/01/18 ......... 290,000 309,363
Los Angeles State Building Authority, Lease Revenue,
5.375%, 5/01/06 ............................................. 300,000 327,156
Los Angeles, California, Electric Plant Revenue,
6.000%, 6/01/13 ............................................. 500,000 536,030
Los Angeles, California, Wastewater Systems, (FGIC Insured),
5.375%, 11/01/07 ............................................ 450,000 487,971
Los Angeles, California, Water and Power Waterworks Revenue,
6.500%, 11/01/10 ............................................ 350,000 382,417
Mid-Peninsula, California, Regional Open Space,
5.500%, 9/01/07 ............................................. 100,000 107,165
Northern California Power Agency, Public Revenue,
5.250%, 7/01/02 ............................................. 250,000 262,420
Oceanside, California, Water Systems, (AMBAC Insured), 5.650%,
8/01/09 ..................................................... 125,000 136,211
Riverside, California, Electric Revenue, (MBIA Insured),
5.200%, 10/01/08 ............................................ 230,000 245,426
Sacramento, California, Municipal Utility District,
5.250%, 5/15/04 ............................................. 250,000 268,363
Sacramento, California, Municipal Utility District,
5.700%, 5/15/12 ............................................. 500,000 534,175
Sacramento, California, Power Authority, 6.000%, 7/01/02 ...... 500,000 535,985
San Diego, California, Industrial Development Revenue, (AMBAC
Insured), 5.900%, 6/01/18 ................................... 700,000 755,818
San Diego, California, Open Space Park Facility, District One,
5.750%, 1/01/08 ............................................. 250,000 274,185
San Diego, California, Sewer Revenue, (AMBAC Insured), 4.750%,
5/15/06 ..................................................... 125,000 131,276
San Francisco Bay Area Rapid Transit Authority, (FGIC Insured),
5.450%, 7/01/08 ............................................. 200,000 218,374
San Francisco, California, City & County International Airport
Revenue, (AMBAC Insured), 6.200%, 5/01/04 ................... 300,000 331,092
San Francisco, California, City & County Library Facilities,
Series D, 6.100%, 6/15/07 ................................... 250,000 265,175
San Francisco, California, City & County Public Utility Water
Revenue, Series A, 6.375%, 11/01/06 ......................... 500,000 559,925
San Francisco, California, City & County Redevelopment Project,
Series B, 5.200%, 8/01/08 ................................... 250,000 261,150
San Francisco, California, Port Commission, 5.500%, 7/01/04 ... 100,000 108,239
San Francisco, California, Public Utilities, 6.000%, 11/01/15 . 500,000 535,625
San Francisco, California, Sewer Revenue, (AMBAC Insured),
6.000%, 10/01/11 ............................................ 500,000 548,180
San Francisco, California, State Building Authority,
5.000%, 10/01/05 ............................................ 125,000 133,105
San Francisco, California, State Building Authority,
5.125%, 10/01/07 ............................................ 250,000 270,550
San Jose, California, Airport Revenue, (FGIC Insured),
5.875%, 3/01/07 ............................................. 200,000 227,206
Santa Clara Valley, California, Water District Refunding &
Improvements, Series A, (FGIC Insured), 5.800%, 2/01/08,
(Prerefunded 2/1/04 @ 102) .................................. 100,000 110,601
Santa Clara, California, Electric Revenue, (MBIA Insured),
6.250%, 7/01/13, (Prerefunded 7/1/01 @ 102) ................. 250,000 271,788
Turlock, California, Irrigation District Revenue, 5.750%,1/01/18 500,000 522,125
University of California Revenue, Series B, 5.800%, 9/01/07 ... 415,000 460,094
University of California Revenue, Series B, 6.500%, 9/01/03 ... 300,000 335,409
University of California Revenue, Series C, 5.000%, 9/01/08 ... 175,000 184,810
University of California Revenue, Series C, (AMBAC Insured),
4.700%, 9/01/06 ............................................. 200,000 209,842
---------------
TOTAL MUNICIPAL BONDS AND NOTES (Identified Cost $17,543,949).... 18,396,247
---------------
SHORT-TERM INVESTMENT -- 1.8% OF NET ASSETS
Repurchase Agreement with State Street Bank and Trust Co.,
dated 9/30/98 at 4.750% to be repurchased at $346,046 on
10/01/98 collateralized by $275,000 U.S. Treasury Bond,
7.500%, due 11/15/16 with a value of $355,781 ............... 346,000 346,000
---------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $346,000)................................... 346,000
---------------
TOTAL INVESTMENTS -- 100.2%
(IDENTIFIED COST $18,786,578) (b) ............................. 19,647,584
Liabilities, Less Cash and Other Assets -- (0.2%) ........... (29,467)
---------------
NET ASSETS -- 100% .............................................. $ 19,618,117
===============
</TABLE>
(a) See Note 1.
(b) At September 30, 1998, the net unrealized appreciation on investments
based on cost of $18,786,578 for federal income tax purposes was as
follows: Aggregate gross unrealized appreciation for all securities in
which there is an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there is an excess of
tax cost over value were $869,072 and $8,066, respectively, resulting in
net unrealized appreciation of $861,006.
Key to Abbreviations:
AMBAC: American Municipal Bond Assurance Corporation
FGIC: Federal Guaranty Insurance Corporation
MBIA: Municipal Bond Insurance Association
Ten Largest Holdings by Municipal Classification at September 30, 1998
as a Percentage of Net Assets
General Obligation 20.1%
Education 15.4%
Revenue 14.5%
Water & Sewer 12.7%
Utilities 10.4%
Electric & Gas 7.3%
Public Works 5.2%
Health/Hospital 4.2%
Airport Revenue 2.9%
Transportation & Highway 1.1%
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- --------------------------------------------------------------------------------
LOOMIS SAYLES CORE FIXED INCOME FUND
Portfolio of Investments -- as of September 30, 1998
<TABLE>
<CAPTION>
Face
Amount Value (a)-
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS AND NOTES -- 98.5% OF NET ASSETS
Aerospace/Defense -- 2.7%
Lockheed Corp., 9.000%, 1/15/22 ............................. $ 406,000 $ 522,384
---------------
Banks/Savings & Loans -- 6.5%
Capital One Bank, 5.950%, 2/15/01 ........................... 250,000 249,998
Chase Manhattan Corp., 7.625%, 1/15/03 ...................... 200,000 216,182
First America Bank Corp., 7.750%, 7/15/04 ................... 150,000 166,692
NCNB Corp., 9.125%, 10/15/01 ................................ 100,000 110,960
Standard Federal Bank, 7.750%, 7/17/06 ...................... 450,000 506,866
---------------
1,250,698
---------------
Computers -- 2.0%
Seagate Technology, Inc., 7.125%, 3/01/04 ................... 122,000 119,511
Seagate Technology, Inc., 7.370%, 3/01/07 ................... 265,000 264,224
---------------
383,735
---------------
Diversified Operations -- 2.7%
Norfolk Southern Corp., 7.800%, 5/15/27 ..................... 450,000 525,006
---------------
Entertainment -- 3.4%
Time Warner Entertainment Co., 7.250%, 9/01/08 .............. 600,000 664,830
---------------
Environmental Services -- 2.6%
WMX Technologies, Inc., 6.375%, 12/01/03 .................... 143,000 148,903
WMX Technologies, Inc., 7.000%, 10/15/06 .................... 325,000 349,482
---------------
498,385
---------------
Financial Services -- 8.7%
Advanta Corp., 7.000%, 5/01/01 .............................. 100,000 95,140
AT & T Capital Corp., 6.390%, 1/22/99 ....................... 225,000 225,590
Ford Motor Credit Co., 7.750%, 11/15/02 ..................... 200,000 217,230
Ford Motor Credit Co., 8.000%, 6/15/02 ...................... 350,000 382,000
General Motors Acceptance Corp., 5.625%, 2/15/01 ............ 27,000 27,262
General Motors Acceptance Corp., 6.800%, 4/17/01 ............ 200,000 208,030
General Motors Acceptance Corp., 7.125%, 5/01/01 ............ 225,000 235,978
USL Capital Corp., 7.050%, 5/14/01 .......................... 275,000 287,699
---------------
1,678,929
---------------
Food -- Packaged & Miscellaneous -- 2.5%
ConAgra, Inc., 9.750%, 3/01/21 .............................. 375,000 491,929
---------------
Foreign Issuer -- 5.2%
Philips Electronics NV, 8.375%, 9/15/06 ..................... 515,000 594,537
Saga Petroleum ASA, 7.250%, 9/23/27 ......................... 450,000 406,674
---------------
1,001,211
---------------
Government Agencies -- 4.8%
Federal Home Loan Mortgage Corp., 6.500%, 1/01/27 ........... 115,055 117,139
Federal Home Loan Mortgage Corp., 7.000%, 1/01/12 ........... 93,751 96,397
Federal Home Loan Mortgage Corp., 8.000%, 7/01/25 ........... 33,746 34,958
Federal Home Loan Mortgage Corp., 8.000%, 12/01/26 .......... 78,472 81,268
Federal National Mortgage Association, 7.500%, 1/01/27 ...... 168,317 173,629
Federal National Mortgage Association, 9.500%, 11/01/10 ..... 43,757 45,895
Government National Mortgage Association, 6.500%, 4/15/26 130,116 133,084
Government National Mortgage Association, 8.500%, 4/15/23 101,876 107,988
Government National Mortgage Association, 9.500%, 9/15/20 123,443 133,317
---------------
923,675
---------------
Health Care -- Services -- 1.0%
Columbia/HCA Healthcare Corp., 6.125%, 12/15/00 ............. 200,000 199,312
---------------
Holding Companies -- Diversified -- 1.2%
ITT Corp., 7.400%, 11/15/25 ................................. 225,000 229,747
---------------
Natural Gas -- 3.7%
Columbia Gas Systems, Inc., 7.050%, 11/28/07 ................ 675,000 713,070
---------------
Oil & Gas -- 4.4%
Coastal Corp., 6.950%, 6/02/28 .............................. 500,000 483,545
Ensco International, Inc., 6.750%, 11/15/07 ................. 350,000 360,563
---------------
844,108
---------------
Paper Products -- 2.3%
Boise Cascade Corp., 9.800%, 4/15/03 ........................ 200,000 227,924
Boise Cascade Corp., 9.980%, 3/27/03 ........................ 200,000 229,070
---------------
456,994
---------------
Real Estate Investment Trusts -- 1.3%
Developers Diversified Realty, 6.800%, 7/23/02 .............. 125,000 131,014
Meditrust Corp., 7.375%, 7/15/00 ............................ 125,000 122,387
---------------
253,401
---------------
Securities -- 4.5%
Lehman Brothers Holdings, Inc., 6.125%, 7/15/03 ............. 480,000 466,277
Lehman Brothers Holdings, Inc., 7.250%, 4/15/03 ............. 150,000 152,376
Salomon, Inc., 6.650%, 7/15/01 .............................. 245,000 254,631
---------------
873,284
---------------
Telecommunications -- 5.4%
MCI WorldCom, Inc., 7.550%, 4/01/04 ......................... 500,000 544,550
TCI Communications, Inc., 8.750%, 8/01/15 ................... 400,000 499,712
---------------
1,044,262
---------------
Transportation -- 2.5%
Union Pacific Corp., 6.625%, 2/01/08 ........................ 200,000 206,954
Union Pacific Corp., 6.700%, 12/01/06 ....................... 260,000 270,556
---------------
477,510
---------------
U.S. Government -- 19.7%
U.S. Treasury Bonds, 6.250%, 8/15/23 ........................ 395,000 452,089
U.S. Treasury Notes, 6.250%, 2/15/07 ........................ 600,000 673,872
U.S. Treasury Notes, 6.375%, 8/15/02 ........................ 600,000 642,468
U.S. Treasury Notes, 7.250%, 8/15/04 ........................ 1,780,000 2,039,489
---------------
3,807,918
---------------
Utilities -- 11.4%
Boston Edison Co., 6.800%, 3/15/03 .......................... 400,000 421,224
Boston Edison Co., 7.800%, 5/15/10 .......................... 300,000 349,827
Commonwealth Edison Co., 7.375%, 1/15/04 .................... 500,000 537,890
Gulf States Utilities Co., 6.410%, 8/01/01 .................. 435,000 443,565
Midamerican Energy Co., 6.500%, 12/15/01 .................... 441,000 453,185
---------------
2,205,691
---------------
TOTAL BONDS AND NOTES
(Identified Cost $18,323,706).............................. 19,046,079
---------------
TOTAL INVESTMENTS -- 98.5%
(IDENTIFIED COST $18,323,706) (b) ........................... 19,046,079
Cash and Other Assets, Less Liabilities -- 1.5% ........... 294,677
---------------
NET ASSETS -- 100% ............................................ $ 19,340,756
===============
</TABLE>
(a) See Note 1.
(b) At September 30, 1998, the net unrealized appreciation on investments
based on cost of $18,323,706 for federal income tax purposes was as
follows: Aggregate gross unrealized appreciation for all securities in
which there is an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there is an excess of
tax cost over value were $796,084 and $73,711, respectively, resulting in
net unrealized appreciation of $722,373.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- --------------------------------------------------------------------------------
LOOMIS SAYLES CORE GROWTH FUND
Portfolio of Investments -- as of September 30, 1998
<TABLE>
<CAPTION>
Shares Value (a)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 91.7% OF NET ASSETS
Aerospace/Defense -- 2.5%
Lockheed Corp. .............................................. 5,200 $ 524,225
---------------
Auto & Related -- 1.9%
Magna International, Inc. ................................... 6,700 389,438
---------------
Banks/Savings & Loans -- 4.2%
Star Banc Corp. ............................................. 5,400 357,075
Wells Fargo & Co. ........................................... 1,500 532,500
---------------
889,575
---------------
Chemicals -- Major -- 3.6%
Monsanto Co. ................................................ 13,500 761,062
---------------
Communications Equipment -- 4.3%
Ascend Communications, Inc. (b) ............................. 7,000 318,500
Cisco Systems, Inc. (b) ..................................... 9,450 584,128
---------------
902,628
---------------
Computer Hardware -- 9.8%
EMC Corp. (b) ............................................... 13,000 743,437
International Business Machines Corp. ....................... 6,100 780,800
Sun Microsystems, Inc. (b) .................................. 10,600 528,013
---------------
2,052,250
---------------
Electronics -- 1.2%
Analog Devices, Inc. (b) .................................... 15,611 250,752
---------------
Entertainment -- 3.6%
Time Warner, Inc. ........................................... 8,700 761,794
---------------
Financial Services -- 2.1%
Associates First Capital Corp. .............................. 6,700 437,175
---------------
Food -- Packaged & Miscellaneous -- 2.2%
Heinz (H.J.) Co. ............................................ 9,100 465,238
---------------
Government Agencies -- 2.0%
Federal Home Loan Mortgage Corp. ............................ 8,400 415,275
---------------
Health Care -- Drugs -- 5.9%
Pfizer, Inc. ................................................ 4,000 423,750
Schering-Plough Corp. ....................................... 7,800 807,787
---------------
1,231,537
---------------
Health Care -- Medical Technology -- 3.1%
Medtronic, Inc. ............................................. 11,100 642,412
---------------
Imaging -- 2.3%
Xerox Corp. ................................................. 5,600 474,600
---------------
Insurance -- 2.2%
American International Group, Inc. .......................... 5,900 454,300
---------------
Oil & Gas -- 2.6%
Enron Corp. ................................................. 10,200 538,687
---------------
Oil & Gas Drilling Equipment -- 2.2%
Halliburton Co. ............................................. 16,400 468,425
---------------
Oil & Gas Exploration -- 4.4%
Abacan Resources Corp. (New) (b) ............................ 52,600 11,506
Anadarko Petroleum Corp. .................................... 12,600 495,337
Burlington Resources, Inc. .................................. 11,300 422,338
---------------
929,181
---------------
Oil & Gas -- Major Integrated -- 2.2%
Royal Dutch Petroleum Co. (N.Y. Shares) ..................... 9,500 452,438
---------------
Restaurants -- 2.7%
McDonald's Corp. ............................................ 9,300 555,094
---------------
Retail -- Food & Drug -- 6.9%
CVS Corp. ................................................... 17,400 762,337
Safeway, Inc. (b) ........................................... 14,500 672,438
---------------
1,434,775
---------------
Retail -- General -- 3.0%
Staples, Inc. (b) ........................................... 21,200 622,750
---------------
Retail -- Specialty -- 1.8%
Circuit City Stores, Inc. ................................... 11,500 383,094
---------------
Telecommunications -- 15.0%
Bell Atlantic Corp. ......................................... 12,700 615,156
BellSouth Corp. ............................................. 10,000 752,500
GTE Corp. ................................................... 9,900 544,500
MCI WorldCom, Inc. (b) ...................................... 13,900 679,363
Sprint Corp. ................................................ 7,600 547,200
---------------
3,138,719
---------------
TOTAL COMMON STOCKS
(Identified Cost $17,259,271).............................. 19,175,424
---------------
SHORT-TERM INVESTMENT -- 9.7% OF NET ASSETS
Repurchase Agreement with State Street Bank and Trust Co.,
dated 9/30/98 at 4.750% to be repurchased at $2,030,268 on
10/01/98 collateralized by $1,605,000 U.S. Treasury Bond,
7.500%, due 11/15/16 with a value of $2,076,469 ........... 2,030,000 2,030,000
---------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $2,030,000)............................... 2,030,000
---------------
TOTAL INVESTMENTS -- 101.4%
(IDENTIFIED COST $19,289,271) (c) ........................... 21,205,424
Liabilities, Less Cash and Other Assets -- (1.4%) ......... (295,652)
---------------
NET ASSETS -- 100% ............................................ $ 20,909,772
===============
</TABLE>
(a) See Note 1.
(b) Non-income producing security.
(c) At September 30, 1998, the net unrealized appreciation on investments
based on cost of $19,345,365 for federal income tax purposes was as
follows: Aggregate gross unrealized appreciation for all securities in
which there is an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there is an excess of
tax cost over value were $2,918,088 and $1,058,029, respectively,
resulting in net unrealized appreciation of $1,860,059.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- --------------------------------------------------------------------------------
LOOMIS SAYLES FIXED INCOME FUND
Portfolio of Investments -- as of September 30, 1998
<TABLE>
<CAPTION>
Face
Amount Value (a)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS AND NOTES -- 94.6% OF NET ASSETS
NON-CONVERTIBLE BONDS -- 83.8%
Auto & Related -- 1.5%
Ford Motor Co., 6.625%, 10/01/28 ...................... USD 3,650,000 $ 3,700,771
----------------
Broadcasting -- 0.6%
Fox Family Worldwide, Inc., Zero Coupon Bond, 11/01/07
(step to 10.250% on 11/01/02) (b) ................... 2,600,000 1,612,000
----------------
Building Materials -- 1.2%
Owens Corning, 7.500%, 8/01/18 ........................ 3,000,000 2,942,340
----------------
Canadian -- 17.9%
Canadian Government, Zero Coupon Bond, 6/01/22 ........ CAD 2,500,000 471,864
Canadian Government, Zero Coupon Bond, 6/01/25 ........ 66,460,000 10,767,850
Clearnet Communications, Inc., Zero Coupon Bond, 5/15/08
(step to 10.400% on 5/15/03) (b) 2,500,000 787,014
Hydro Quebec, Zero Coupon Bond, 8/15/20 ............... 7,500,000 1,257,255
International Semi-Tech Corp., Zero Coupon Bond,
8/15/03 (step to 11.50% on 8/15/00) (b) ............. USD 2,100,000 357,000
New Brunswick FM Project, Zero Coupon Bond, 11/30/27
(step to 6.470% on 5/30/03) 144A (b) (c) ............ CAD 1,250,000 622,151
Province of Alberta, 5.930%, 9/16/16 .................. 1,591,918 1,107,739
Province of British Columbia, Zero Coupon Bond, 8/23/13 11,700,000 3,251,982
Province of British Columbia, Zero Coupon Bond, 9/05/20 4,750,000 867,601
Province of British Columbia, Zero Coupon Bond, 9/08/23 3,300,000 505,795
Province of British Columbia, Zero Coupon Bond, 8/23/24 8,500,000 1,232,563
Province of British Columbia, Zero Coupon Bond, 11/19/27 8,150,000 978,160
Province of British Columbia, 8.000%, 9/08/23 ......... 3,300,000 2,753,712
Province of Manitoba, 6.500%, 9/22/17 ................. 5,075,000 3,621,315
Province of Manitoba, 7.750%, 12/22/25 ................ 5,295,000 4,449,502
Province of Newfoundland, 6.150%, 4/17/28 ............. 1,000,000 662,404
Province of Ontario, Zero Coupon Bond, 7/13/22 ........ 12,200,000 2,015,130
Province of Ontario, Zero Coupon Bond, 6/02/27 ........ 27,950,000 3,497,348
Province of Saskatchewan, Zero Coupon Bond, 4/10/14 ... CAD 5,000,000 1,369,962
Province of Saskatchewan, 8.750%, 5/30/25 ............. 1,950,000 1,775,750
Province of Saskatchewan (Certificate of Deposit), Zero
Coupon Bond, 2/04/22 ................................ 10,000,000 1,709,133
Province of Saskatchewan (Certificate of Deposit), Zero
Coupon Bond, 5/30/25 ................................ 2,425,000 342,418
----------------
44,403,648
----------------
Communications -- 0.9%
Arch Communications Group, Inc., Zero Coupon Bond,
3/15/08 (step to 10.875% on 3/15/01) (b) ............ USD 4,700,000 2,232,500
----------------
Computers -- 1.4%
Apple Computer, Inc., 6.500%, 2/15/04 ................. 1,325,000 1,172,625
Seagate Technology, Inc., 7.450%, 3/01/37 ............. 2,225,000 2,230,229
Streamlogic Corp., 14.000%, 10/07/98 (d) (e) .......... 28,333 1,416
----------------
3,404,270
----------------
Electronics -- 0.2%
Westinghouse Electric Corp., 7.875%, 9/01/23 .......... 500,000 500,285
----------------
Entertainment -- 4.9%
Time Warner Entertainment Co., 6.875%, 6/15/18 ........ 2,840,000 2,934,629
Time Warner Entertainment Co., 6.950%, 1/15/28 ........ 5,650,000 5,872,214
Time Warner Entertainment Co., 7.570%, 2/01/24 ........ 3,125,000 3,467,094
----------------
12,273,937
----------------
Food & Beverage -- 0.6%
Borden, Inc., 7.875%, 2/15/23 ......................... 1,500,000 1,386,750
----------------
Foreign Government/Agency -- 5.6%
Escom, 11.000%, 6/01/08 ............................... ZAR 2,500,000 288,715
Republic of Argentina, 5.750%, 3/31/23 (step to 6.000%
on 3/31/99) (b) ..................................... USD 500,000 348,125
Republic of Brazil, 10.125%, 5/15/27 .................. 5,777,000 3,625,067
Republic of Brazil C Bond, 8.000%, 4/15/14 PIK (f) .... 7,686,413 4,564,192
Republic of South Africa, 8.500%, 6/23/17 ............. 1,800,000 1,026,000
Republic of South Africa, 12.000%, 2/28/05 ............ ZAR 10,500,000 1,412,408
Republic of South Africa, 12.500%, 12/21/06 ........... 4,000,000 522,559
Republic of Venezuela, 9.250%, 9/15/27 ................ USD 3,750,000 2,081,250
----------------
13,868,316
----------------
Foreign Issuer -- 9.2%
Bangko Sentral Pilipinas, 8.600%, 6/15/27 ............. USD 1,250,000 828,125
Bangkok Bank Public Co. Ltd., 8.250%, 3/15/16 144A (c) 300,000 132,366
Bangkok Bank Public Co. Ltd., 8.375%, 1/15/27 144A (c) 3,100,000 1,337,836
Compania de Transporte Energia, 9.250%, 4/01/08 144A (c) 1,000,000 750,000
Embotelladora Andina SA, 7.625%, 10/01/27 ............. 1,300,000 869,960
Export Import Bank of Korea, 6.375%, 2/15/06 .......... 500,000 330,909
Hyundai Motor Co. Ltd., 7.600%, 7/15/07 144A (c) ...... 750,000 554,752
Industrial Finance Corp. of Thailand,
7.375%, 1/14/07 144A (c) ............................ 1,000,000 622,600
Korea Electric Power Corp., 6.750%, 8/01/27 ........... 500,000 352,870
Korea Electric Power Corp., 7.400%, 4/01/16 ........... 1,218,906 789,571
Korea Electric Power Corp., 7.750%, 4/01/13 ........... 1,000,000 609,330
Multicanal SA, 10.500%, 4/15/18 144A (c) .............. 500,000 320,000
Perez Companc SA, 8.125%, 7/15/07 144A (c) ............ 1,550,000 1,255,500
Petroleos Mexicanos, 9.500%, 9/15/27 .................. 1,450,000 1,096,200
Petroleos Mexicanos, Medium Term,
8.625%, 12/01/23 144A (c) ........................... 250,000 178,750
Philippine Long Distance Telephone Co., 8.350%, 3/06/17 250,000 161,646
Pindo Deli Finance Mauritius Ltd., 10.750%, 10/01/07 .. 1,100,000 445,500
Pindo Deli Finance Mauritius Ltd., 10.875%, 10/01/27 .. 2,250,000 778,500
Pindo Deli Finance Mauritius Ltd., 11.750%, 10/01/17 .. 1,500,000 618,750
Pohang Iron & Steel Co. Ltd., 6.625%, 7/01/03 ......... 200,000 157,490
Pohang Iron & Steel Co. Ltd., 7.125%, 11/01/06 ........ 500,000 357,455
Quezon Power Philippines Co., 8.860%, 6/15/17 ......... 1,200,000 740,676
Samsung Electronics Co. Ltd., 7.450%, 10/01/02 144A (c) 1,500,000 1,066,365
Samsung Electronics Co. Ltd., 7.700%, 10/01/27 144A (c) 2,000,000 940,000
Samsung Electronics Co. Ltd., 8.500%, 11/01/02 ........ 1,000,000 741,670
Siam Commercial Bank Public Co., 7.500%, 3/15/06 144A (c) 750,000 337,500
Tata Electric Co., 8.500%, 8/19/17 144A (c) ........... USD 3,650,000 2,582,375
Tenaga Nasional Berhad, 7.500%, 11/01/25 144A (c) ..... 2,000,000 752,040
Tjiwi Kimia Mauritius Ltd., 10.000%, 8/01/04 .......... 1,675,000 703,500
Total Access Communication Public Co. Ltd., 7.625%,
11/04/01 144A (c) ................................... 500,000 305,000
Total Access Communication Public Co. Ltd., 8.375%,
11/04/06 144A (c) ................................... 3,850,000 2,194,500
----------------
22,911,736
----------------
Government Agencies -- 2.1%
Federal Home Loan Mortgage Corp., 6.000%, 6/01/26 ..... 1,948,681 1,952,325
Federal National Mortgage Association, Zero Coupon
Bond, 10/29/07 ...................................... NZD 11,450,000 3,361,700
----------------
5,314,025
----------------
Health Care -- Products -- 0.5%
Bausch & Lomb, Inc., 7.125%, 8/01/28 .................. USD 1,250,000 1,232,938
----------------
Health Care -- Services -- 1.3%
Columbia/HCA Healthcare Corp., 7.050%, 12/01/27 ...... 2,250,000 1,895,400
Columbia/HCA Healthcare Corp., 7.580%, 9/15/25 ....... 1,500,000 1,309,530
----------------
3,204,930
----------------
Home Builders -- 0.4%
Pulte Corp., 7.625%, 10/15/17 ......................... 1,000,000 990,790
----------------
Insurance -- 0.2%
Loews Corp., 7.000%, 10/15/23 ......................... 500,000 495,980
----------------
Media & Entertainment -- 0.3%
News America Holdings, Inc., 7.700%, 10/30/25 700,000 748,580
----------------
Oil & Gas -- 3.0%
Chesapeake Energy Corp., 8.500%, 3/15/12 .............. 500,000 385,000
Pioneer Natural Resources Co., 6.500%, 1/15/08 ........ 1,000,000 942,880
Pioneer Natural Resources Co., 7.200%, 1/15/28 ........ 750,000 654,690
R & B Falcon Corp., 7.375%, 4/15/18 ................... 2,500,000 2,377,800
Seagull Energy Corp., 7.500%, 9/15/27 ................. 3,500,000 3,170,615
----------------
7,530,985
----------------
Real Estate Investment Trusts -- 5.8%
AMB Property Corp., 7.500%, 6/30/18 ................... USD 1,500,000 1,438,800
First Industrial, 7.500%, 12/01/17 .................... 3,000,000 3,090,351
First Industrial, 7.600%, 7/15/28 ..................... 6,000,000 5,651,340
Security Capital Group, Inc., 7.700%, 6/15/28 144A (c) 2,000,000 1,885,000
Susa Partnership LP, 7.450%, 7/01/18 .................. 1,500,000 1,415,880
Susa Partnership LP, 7.500%, 12/01/27 ................. 1,000,000 926,000
----------------
14,407,371
----------------
Retail -- General -- 1.2%
Dillon Read Structured Finance Corp.,
6.660%, 8/15/10 ..................................... 205,599 203,504
Dillon Read Structured Finance Corp.,
8.550%, 8/15/19 ..................................... 500,000 477,500
K Mart Corp., 7.950%, 2/01/23 ......................... 1,250,000 1,212,500
Penn Traffic Co., 9.625%, 4/15/05 ..................... 2,750,000 495,000
Woolworth Corp., 8.500%, 1/15/22 ...................... 725,000 715,988
----------------
3,104,492
----------------
Steel -- 0.3%
Geneva Steel Co., 9.500%, 1/15/04 ..................... 1,500,000 675,000
----------------
Supranational -- 3.8%
International Bank for Reconstruction & Development,
Zero Coupon Bond, 8/20/07 ........................... NZD 30,250,000 8,817,714
International Bank for Reconstruction & Development,
8.000%, 5/23/07 ..................................... 1,000,000 554,942
----------------
9,372,656
----------------
Taxable Municipal -- 0.3%
Orange County, California Pension Obligation, Zero
Coupon Bond, 9/01/16 ................................ USD 2,000,000 667,400
----------------
Telecommunications -- 3.1%
Nextel Communications, Inc., Zero Coupon Bond, 10/31/07
(step to 9.750% on 10/31/02) (b) .................... 2,725,000 1,635,000
Nextel International, Inc., Zero Coupon Bond,
4/15/08 (step to 12.125% on 4/15/03) (b) ............ 2,000,000 900,000
Nextlink Communications, Inc., Zero Coupon Bond,
4/15/08 (step to 9.450% on 4/15/03) (b) ............. 1,500,000 870,000
RCN Corp., Zero Coupon Bond, 10/15/07 (step to 11.125%
on 10/15/02) (b) .................................... 1,000,000 555,000
RCN Corp., Zero Coupon Bond, 2/15/08 (step to 9.800% on
2/15/03) (b) ........................................ USD 350,000 185,500
RCN Corp., Zero Coupon Bond, 7/01/08 (step to 11.000%
on 7/01/03) (b) ..................................... 2,100,000 1,071,000
TCI Communications, Inc., 7.125%, 2/15/28 ............. 1,640,000 1,792,258
TCI Communications, Inc., 7.875%, 2/15/26 ............. 650,000 766,473
----------------
7,775,231
----------------
Textile & Apparel -- 1.0%
Fruit of the Loom, Inc., 7.375%, 11/15/23 ............. 500,000 420,895
Kellwood Co., 7.625%, 10/15/17 ........................ 2,000,000 1,952,420
Phillips Van Heusen Corp., 7.750%, 11/15/23 ........... 50,000 48,366
----------------
2,421,681
----------------
Tobacco -- 6.7%
Philip Morris Cos., Inc., 7.750%, 1/15/27 ............. 7,400,000 8,010,204
RJR Nabisco, Inc., 7.625%, 9/15/03 .................... 2,625,000 2,601,637
RJR Nabisco, Inc., 8.500%, 7/01/07 .................... 2,000,000 2,010,780
RJR Nabisco, Inc., 8.750%, 8/15/05 .................... 1,700,000 1,728,849
RJR Nabisco, Inc., 9.250%, 8/15/13 .................... 2,250,000 2,273,333
----------------
16,624,803
----------------
Transportation -- 0.4%
American President Cos. Ltd., 7.125%, 11/15/03 1,000,000 853,300
American President Cos. Ltd., 8.000%, 1/15/24 ......... 150,000 110,616
----------------
963,916
----------------
U.S. Government -- 7.0%
U.S. Treasury Bonds, 6.000%, 2/15/26 .................. 4,900,000 5,481,875
U.S. Treasury Bonds, 6.250%, 8/15/23 .................. 5,620,000 6,432,259
U.S. Treasury Notes, 6.375%, 9/30/01 .................. 5,100,000 5,380,500
----------------
17,294,634
----------------
Utilities -- 2.1%
AES Corp., 8.875%, 11/01/27 ........................... 1,000,000 870,000
Boston Edison Co., 7.800%, 3/15/23 .................... 500,000 545,292
KN Capital Trust, 7.630%, 4/15/28 ..................... 1,000,000 963,737
KN Energy, Inc., 7.250%, 3/01/28 ...................... 2,500,000 2,473,450
Mobile Energy Services Co. LLC,
8.665%, 1/01/17 ..................................... 1,284,088 449,431
----------------
5,301,910
----------------
Waste Management -- 0.3%
USA Waste Services, Inc., 7.000%, 7/15/28 ............. USD 750,000 765,195
----------------
TOTAL NON-CONVERTIBLE BONDS
(Identified Cost $217,417,380) ...................... 208,129,070
----------------
CONVERTIBLE BONDS -- 10.8%
Auto & Related -- 0.2%
Exide Corp., 2.900%, 12/15/05 144A (c) ................ 1,000,000 496,250
----------------
Canadian -- 0.1%
Rogers Communications, Inc., 2.000%, 11/26/05 250,000 158,280
----------------
Computers -- 0.8%
Cray Research, Inc., 6.125%, 2/01/11 .................. 463,000 351,880
HMT Technology Corp., 5.750%, 1/15/04 ................. 450,000 301,500
Maxtor Corp., 5.750%, 3/01/12 ......................... 407,000 236,060
Read Rite Corp., 6.500%, 9/01/04 ...................... 900,000 504,000
Silicon Graphics, Inc., 5.250%, 9/01/04 ............... 300,000 247,500
Western Digital, Zero Coupon Bond, 2/18/18 144A (c) ... 1,250,000 258,588
----------------
1,899,528
----------------
Diversified Operations -- 0.3%
Ogden Corp., 5.750%, 10/20/02 ......................... 500,000 483,750
Ogden Corp., 6.000%, 6/01/02 .......................... 250,000 242,500
----------------
726,250
----------------
Electronics -- 1.8%
Cirrus Logic, Inc., 6.000%, 12/15/03 .................. 200,000 127,000
Kent Electronics Corp., 4.500%, 9/01/04 ............... 2,650,000 1,828,500
Lam Research Corp., 5.000%, 9/01/02 ................... 2,025,000 1,574,437
National Semiconductor Corp., 6.500%, 10/01/02 350,000 308,000
Richardson Electronics Ltd., 7.250%, 12/15/06 ......... 300,000 222,000
Zenith Corp., 6.250%, 4/01/11 (d) ..................... 1,121,000 341,905
----------------
4,401,842
----------------
Environmental Services -- 0.7%
Air & Water Technologies Corp., 8.000%, 5/15/15 ....... USD 475,000 358,625
Thermo TerraTech, Inc., 4.625%, 5/01/03 144A (c) ...... 1,500,000 1,295,625
----------------
1,654,250
----------------
Foreign Issuer -- 2.3%
Advanced Agro Public Co., 3.500%, 6/17/01 ............. 125,000 108,125
APP Finance VII Mauritius Ltd.,
3.500%, 4/30/03 ..................................... 500,000 190,000
Bangkok Bank Public Co. Ltd., 3.250%, 3/03/04 1,725,000 457,125
Banpu Public Co., 2.750%, 4/10/03 ..................... 1,455,000 916,650
Burns, Philp, 5.500%, 4/30/04 ......................... 1,000,000 510,000
Empresas ICA Sociedad, 5.000%, 3/15/04 ................ 950,000 631,750
Loxley Public Co. Ltd., 2.500%, 4/04/01 ............... 700,000 140,000
Piltel, 1.750%, 7/17/06 ............................... 250,000 146,250
Samsung Corp., 0.250%, 6/26/06 ........................ 600,000 516,000
Samsung Electronics Co. Ltd., Zero Coupon Bond, 12/31/07 725,000 471,250
Sappi BVI Finance, 7.500%, 8/01/02 .................... 250,000 200,625
Siam Commercial Bank Public Co.,
3.250%, 1/24/04 ..................................... 375,000 101,250
Ssangyong Oil Refining Co., Inc.,
3.000%, 12/31/04 .................................... 500,000 232,500
Ssangyong Oil Refining Co., Inc.,
3.750%, 12/31/08 .................................... 150,000 125,250
Telekom Malaysia Berhad, 4.000%, 10/03/04 ............. 500,000 270,000
Total Access Communication Public Co. Ltd.,
2.000%, 5/31/06 ..................................... 900,000 621,000
----------------
5,637,775
----------------
Freight Transportation -- 0.1%
Worldway Corp., 6.250%, 4/15/11 ....................... 250,000 205,000
----------------
Health Care -- Drugs -- 0.5%
Dura Pharmaceuticals, Inc., 3.500%, 7/15/02 ........... 1,150,000 793,500
Glycomed, Inc., 7.500%, 1/01/03 ....................... 300,000 273,000
NABI, Inc., 6.500%, 2/01/03 ........................... 525,000 311,719
----------------
1,378,219
----------------
Home Builders -- 0.1%
Schuler Homes, Inc., 6.500%, 1/15/03 .................. 400,000 341,000
----------------
Insurance -- 0.7%
Loews Corp., 3.125%, 9/15/07 .......................... USD 2,250,000 1,788,750
----------------
Leisure -- 0.1%
AMF Bowling, Inc., Zero Coupon Bond, 5/12/18 144A (c) . 3,000,000 292,500
----------------
Machinery -- 0.0%
Intevac, Inc., 6.500%, 3/01/04 ........................ 150,000 104,625
----------------
Oil & Gas -- 0.6%
Baker Hughes, Inc., Zero Coupon Bond, 5/05/08 ......... 1,500,000 990,000
Houston Industries, Inc., 6.000%, 3/15/12 ............. 250,000 240,000
Key Energy Group, Inc., 5.000%, 9/15/04 ............... 250,000 154,375
----------------
1,384,375
----------------
Publishing -- 0.2%
Scholastic Corp., 5.000%, 8/15/05 144A (c) ............ 600,000 553,500
----------------
Real Estate Investment Trusts -- 0.9%
Federal Realty Investors Trust, 5.250%, 10/28/03 ...... 1,750,000 1,627,500
Rockefeller Properties, Zero Coupon Bond, 12/31/00 .... 650,000 502,125
Sizeler Property Investors, Inc., 8.000%, 7/15/03 ..... 250,000 234,375
----------------
2,364,000
----------------
Restaurants -- 0.9%
Boston Chicken, Inc., Zero Coupon Bond, 6/01/15 ....... 500,000 8,750
Boston Chicken, Inc., 4.500%, 2/01/04 ................. 750,000 52,500
Einstein/Noah Bagel Corp., 7.250%, 6/01/04 ............ 750,000 337,500
Shoney's, Inc., Zero Coupon Bond, 4/11/04 ............. 4,089,000 1,829,828
TPI Enterprises, Inc., 8.250%, 7/15/02 ................ 100,000 84,500
----------------
2,313,078
----------------
Telecommunications -- 0.3%
Broadband Technologies, Inc., 5.000%, 5/15/01 ......... 1,240,000 726,950
----------------
Textile & Apparel -- 0.2%
Dixie Yarns, Inc., 7.000%, 5/15/12 .................... USD 188,000 142,410
Fieldcrest Cannon, Inc., 6.000%, 3/15/12 .............. 295,000 244,850
----------------
387,260
----------------
TOTAL CONVERTIBLE BONDS
(Identified Cost $32,648,252) ....................... 26,813,432
----------------
TOTAL BONDS AND NOTES
(Identified Cost $250,065,632) ...................... 234,942,502
----------------
Shares
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 0.1% OF NET ASSETS
Restaurants -- 0.1%
Advantica Restaurant Group, Inc. (g) .................. 67,479 320,525
----------------
TOTAL COMMON STOCKS
(Identified Cost $908,302) .......................... 320,525
----------------
PREFERRED STOCKS -- 1.4% OF NET ASSETS
Building Materials -- 0.2%
Owens Corning, 6.500% ................................. 10,000 488,750
----------------
Chemicals -- Major -- 0.0%
E.I. du Pont DeNemours & Co., $3.50 ................... 300 21,675
----------------
Computer Software & Services -- 0.2%
Unisys Corp., $3.75 ................................... 9,000 426,375
----------------
Financial Services -- 0.2%
Hvide Capital Trust, 6.500% ........................... 14,000 406,000
----------------
Metals -- 0.0%
Aluminum Co. of America, $3.75 ........................ 100 7,431
----------------
Oil & Gas -- 0.0%
Chesapeake Energy Corp., 7.000% 144A (c) .............. 5,000 80,000
----------------
Telecommunications -- 0.2%
Hyperion Telecommunications, Inc.,
12.875% PIK (f) ..................................... 516 423,196
----------------
Utilities -- 0.6%
Arizona Public Service Co., $2.40 ..................... 460 19,723
Cleco Corp., 4.750% ................................... 850 76,713
Del Marva Power & Light Co., 4.000% ................... 434 29,946
Entergy Louisiana, Inc., 4.440% ....................... 830 61,005
Entergy New Orleans, Inc., 4.360% ..................... 90 6,660
Entergy New Orleans, Inc., 4.750% ..................... 2,876 230,799
Jersey Central Power & Light Co., 4.000% .............. 750 51,000
MDU Resources Group, Inc., 5.100% ..................... 1,020 102,255
Nevada Power Co., 4.700% .............................. 10,940 239,312
Niagara Mohawk Power Corp., 3.600% .................... 200 11,600
Niagara Mohawk Power Corp., 3.900% .................... 100 6,350
Niagara Mohawk Power Corp., 4.400% .................... 5,100 270,300
Niagara Mohawk Power Corp., 4.850% .................... 2,850 225,150
Northern States Power Co., $4.11 ...................... 100 7,900
Public Service Electric & Gas Co., 4.180% ............. 1,950 151,125
----------------
1,489,838
----------------
TOTAL PREFERRED STOCKS (Identified Cost $3,251,203) ... 3,343,265
----------------
WARRANTS -- 0.0% OF NET ASSETS
Computers -- 0.0%
Streamlogic Corp. expiring 10/7/01 (d) (g) ............ 250 0
----------------
TOTAL WARRANTS (Identified Cost $0) ................... 0
----------------
Face
Amount Value (a)
- ----------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 2.4% OF NET ASSETS
Repurchase Agreement with State Street Bank and Trust
Co., dated 9/30/98 at 4.750% to be repurchased at
$5,896,778 on 10/01/98 collateralized by $4,650,000
U.S. Treasury Bond, 7.500%, due 11/15/16 with a value
of $6,015,938 ....................................... USD 5,896,000 5,896,000
----------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $5,896,000) ........................ 5,896,000
----------------
TOTAL INVESTMENTS -- 98.5%
(IDENTIFIED COST $260,121,137) (h) .................... 244,502,292
Cash and Other Assets, Less Liabilities -- 1.5% 3,826,306
----------------
NET ASSETS -- 100% ...................................... $ 248,328,598
================
</TABLE>
(a) See Note 1.
(b) Step Bond: Coupon is zero or below market rate for an initial period and
then increases at a specified date and rate.
(c) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(d) Company in Chapter 11 Bankruptcy.
(e) Security in default.
(f) All or a portion of income may be received as additional securities.
(g) Non-income producing security.
(h) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $260,121,137 for federal income tax purposes was as
follows: Aggregate gross unrealized appreciation for all securities in
which there is an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there is an excess of
tax cost over value were $12,156,869 and $27,775,714, respectively,
resulting in net unrealized depreciation of $15,618,845.
Key to Abbreviations:
CAD: Canadian Dollar
NZD: New Zealand Dollar
USD: United States Dollar
ZAR: South African Rand
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
LOOMIS SAYLES HIGH YIELD FIXED INCOME FUND
Portfolio of Investments -- as of September 30, 1998
<TABLE>
<CAPTION>
Face
Amount Value (a)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS AND NOTES -- 90.2% OF NET ASSETS
NON-CONVERTIBLE BONDS -- 54.5%
Broadcasting -- 2.7%
CBS, Inc., 7.125%, 11/01/23 ............................ USD 500,000 $ 472,530
Fox Family Worldwide, Inc., Zero Coupon Bond, 11/01/07
(step to 10.250% on 11/01/02) (b) .................... 500,000 310,000
---------------
782,530
---------------
Canadian -- 5.2%
Clearnet Communications, Inc., Zero Coupon Bond, 8/13/07
(step to 11.750% on 8/13/02) (b) ..................... CAD 2,000,000 708,313
International Semi-Tech Corp., Zero Coupon Bond, 8/15/03
(step to 11.500% on 8/15/00) (b) ..................... USD 1,750,000 297,500
Microcell Telecommunications, Inc., Zero Coupon Bond,
10/15/07 (step to 11.125% on 10/15/02) (b) ........... CAD 960,000 339,990
Rogers Communications, Inc., 8.750%, 7/15/07 ........... 225,000 136,524
---------------
1,482,327
---------------
Communications -- 3.2%
Arch Communications Group, Inc., Zero Coupon Bond,
3/15/08 (step to 10.875% on 3/15/01) (b) ............. USD 1,925,000 914,375
---------------
Electronics -- 0.7%
Westinghouse Electric Corp., 7.875%, 9/01/23 ........... 200,000 200,114
---------------
Entertainment -- 0.2%
Boston Celtics Ltd., 6.000%, 6/30/38 ................... 79,000 46,709
---------------
Food & Beverage -- 2.1%
Borden, Inc., 7.875%, 2/15/23 .......................... 670,000 619,415
---------------
Foreign Government/Agency -- 9.7%
Republic of Brazil, 10.125%, 5/15/27 ................... 1,200,000 753,000
Republic of Brazil C Bond, 8.000%,
4/15/14 PIK (c) ...................................... 754,139 447,808
Republic of Ecuador, 6.625%, 2/27/15
PIK (c) (d) .......................................... 452,662 153,950
Republic of Peru, 3.250%, 3/07/17 (step to 3.750% on
3/07/99) (b) ......................................... 1,500,000 693,750
Republic of Venezuela, 9.250%, 9/15/27 ................. 1,350,000 749,250
---------------
2,797,758
---------------
Foreign Issuer -- 20.6%
Bangko Sentral Pilipinas, 8.600%, 6/15/27 .............. USD 750,000 496,875
Bangkok Bank Public Co. Ltd., 8.250%, 3/15/16 144A (e) . 250,000 110,305
Bangkok Bank Public Co. Ltd., 8.375%, 1/15/27 144A (e) . 450,000 194,202
Export Import Bank of Korea, 6.375%, 2/15/06 ........... 700,000 463,273
Hyundai Motor Co. Ltd., 7.600%,
7/15/07 144A (e) ..................................... 500,000 369,835
Industrial Finance Corp. of Thailand,
7.375%, 1/14/07 144A (e) ............................. 250,000 155,650
Korea Electric Power Corp., 7.400%, 4/01/16 ............ 442,806 286,836
Korea Electric Power Corp., 7.750%, 4/01/13 ............ 250,000 152,333
Murrin Murrin Holdings Property Ltd.,
9.375%, 8/31/07 ...................................... 150,000 124,500
Pan Pacific Industrial Investment Plc, Zero Coupon Bond,
4/28/07 144A (e) ..................................... 850,000 269,135
Petroleos Mexicanos, 9.500%, 9/15/27 ................... 500,000 378,000
Petroleos Mexicanos, Medium Term,
8.625%, 12/01/23 144A (e) ............................ 500,000 357,500
Philippine Long Distance Telephone Co.,
8.350%, 3/06/17 ...................................... 300,000 193,975
Pindo Deli Finance Mauritius Ltd.,
10.750%, 10/01/07 .................................... 550,000 222,750
Pindo Deli Finance Mauritius Ltd.,
10.875%, 10/01/27 .................................... 750,000 259,500
Pycsa Panama SA, 10.280%, 12/15/12 144A (e) ............ 125,000 104,531
Quezon Power Philippines Co., 8.860%, 6/15/17 .......... 600,000 370,338
Samsung Electronics Co. Ltd., 8.500%, 11/01/02 ......... 500,000 370,835
Siam Commercial Bank Public Co.,
7.500%, 3/15/06 144A (e) ............................. 525,000 236,250
Tenaga Nasional Berhad, 7.500%, 11/01/25 144A (e) ...... 600,000 225,612
Tjiwi Kimia Mauritius Ltd., 10.000%, 8/01/04 ........... 450,000 189,000
Total Access Communication Public Co. Ltd., 7.625%,
11/04/01 144A (e) .................................... 375,000 228,750
Total Access Communication Public Co. Ltd., 8.375%,
11/04/06 144A (e) .................................... 300,000 171,000
---------------
5,930,985
---------------
Oil & Gas -- 2.3%
Chesapeake Energy Corp., 7.875%, 3/15/04 ............... USD 375,000 315,000
Chesapeake Energy Corp., 9.625%, 5/01/05 ............... 400,000 352,000
---------------
667,000
---------------
Retail -- General -- 0.7%
Penn Traffic Co., 9.625%, 4/15/05 ...................... 1,175,000 211,500
---------------
Steel -- 0.3%
Geneva Steel Co., 9.500%, 1/15/04 ...................... 180,000 81,000
---------------
Telecommunications -- 5.1%
Nextel Communications, Inc., Zero Coupon Bond, 10/31/07
(step to 9.750% on 10/31/02) (b) ..................... 750,000 450,000
Nextel International, Inc., Zero Coupon Bond,
4/15/08 (step to 12.125% on 4/15/03) (b) ............. 300,000 135,000
Nextlink Communications, Inc., Zero Coupon Bond, 4/15/08
(step to 9.450% on 4/15/03) (b) ...................... 250,000 145,000
RCN Corp., Zero Coupon Bond, 2/15/08 (step to 9.800% on
2/15/03) (b) ......................................... 500,000 265,000
RCN Corp., Zero Coupon Bond, 7/01/08 (step to 11.000% on
7/01/03) (b) ......................................... 300,000 153,000
Teligent, Inc., Zero Coupon Bond, 3/01/08 (step to
11.500% on 3/01/03) (b) .............................. 500,000 195,000
Triton Communications, Zero Coupon Bond, 5/01/08 (step
to 11.000% on 5/01/03) 144A (b) (e) .................. 250,000 110,000
---------------
1,453,000
---------------
Textile & Apparel -- 1.7%
Phillips Van Heusen Corp., 7.750%, 11/15/23 ............ 500,000 483,665
---------------
TOTAL NON-CONVERTIBLE BONDS
(Identified Cost $21,212,119) ........................ 15,670,378
---------------
CONVERTIBLE BONDS -- 35.7%
Auto & Related -- 1.0%
Exide Corp., 2.900%, 12/15/05 144A (e) ................. 600,000 297,750
---------------
Canadian -- 1.9%
Rogers Communications, Inc., 2.000%, 11/26/05 .......... 850,000 538,152
---------------
Computers -- 3.5%
Cray Research, Inc., 6.125%, 2/01/11 ................... USD 250,000 190,000
Data General Corp., 6.000%, 5/15/04 .................... 300,000 237,375
HMT Technology Corp., 5.750%, 1/15/04 .................. 150,000 100,500
Maxtor Corp., 5.750%, 3/01/12 .......................... 120,000 69,600
Read Rite Corp., 6.500%, 9/01/04 ....................... 350,000 196,000
S3, Inc., 5.750%, 10/01/03 ............................. 200,000 118,000
Western Digital, Zero Coupon Bond, 2/18/18 144A (e) .... 400,000 82,748
---------------
994,223
---------------
Electronics -- 5.4%
Cirrus Logic, Inc., 6.000%, 12/15/03 ................... 825,000 523,875
Integrated Device Technology, 5.500%, 6/01/02 .......... 50,000 38,000
Kent Electronics Corp., 4.500%, 9/01/04 ................ 475,000 327,750
Lam Research Corp., 5.000%, 9/01/02 .................... 500,000 388,750
LTX Corp., 7.250%, 4/15/11 ............................. 50,000 23,000
Richardson Electronics Ltd., 7.250%, 12/15/06 .......... 100,000 74,000
Zenith Corp., 6.250%, 4/01/11 (f) ...................... 541,000 165,005
---------------
1,540,380
---------------
Environmental Services -- 1.1%
Air & Water Technologies Corp., 8.000%, 5/15/15 ........ 400,000 302,000
---------------
Foreign Issuer -- 8.7%
Advanced Agro Public Co., 3.500%, 6/17/01 .............. 575,000 497,375
APP Finance VII Mauritius Ltd., 3.500%, 4/30/03 ........ 225,000 85,500
APP Finance VII Mauritius Ltd., 3.500%, 4/30/03 144A (e) 250,000 95,000
Bangkok Bank Public Co. Ltd., 3.250%, 3/03/04 .......... 575,000 152,375
Banpu Public Co., 2.750%, 4/10/03 ...................... 150,000 94,500
Burns, Philp, 5.500%, 4/30/04 .......................... 150,000 76,500
Empresas ICA Sociedad, 5.000%, 3/15/04 ................. 750,000 498,750
Loxley Public Co. Ltd., 2.500%, 4/04/01 ................ 350,000 70,000
Piltel, 1.750%, 7/17/06 ................................ 100,000 58,500
PT Inti Indorayon Utama, 7.000%, 5/02/06 ............... 250,000 50,000
Samsung Electronics Co. Ltd., Zero Coupon Bond, 12/31/07 250,000 162,500
Sappi BVI Finance, 7.500%, 8/01/02 ..................... USD 300,000 240,750
Siam Commercial Bank Public Co., 3.250%, 1/24/04 ....... 950,000 256,500
Ssangyong Oil Refining Co., Inc., 3.000%, 12/31/04 ..... 200,000 93,000
Total Access Communication Public Co. Ltd.,
2.000%, 5/31/06 ..................................... 100,000 69,000
---------------
2,500,250
---------------
Freight Transportation -- 0.1%
Worldway Corp., 6.250%, 4/15/11 ........................ 50,000 41,000
---------------
Health Care -- Drugs -- 2.5%
Dura Pharmaceuticals, Inc., 3.500%, 7/15/02 ............ 350,000 241,500
Glycomed, Inc., 7.500%, 1/01/03 ........................ 150,000 136,500
NABI, Inc., 6.500%, 2/01/03 ............................ 575,000 341,406
---------------
719,406
---------------
Health Care -- Services -- 1.2%
Medical Care International, Inc., 6.750%, 10/01/06 150,000 135,562
PhyCor, Inc., 4.500%, 2/15/03 .......................... 100,000 54,000
Tenet Healthcare Corp., 6.000%, 12/01/05 ............... 200,000 165,500
---------------
355,062
---------------
Home Builders -- 1.0%
Schuler Homes, Inc., 6.500%, 1/15/03 ................... 325,000 277,063
---------------
Insurance -- 3.7%
Loews Corp., 3.125%, 9/15/07 ........................... 1,350,000 1,073,250
---------------
Leisure -- 0.7%
AMF Bowling, Inc., Zero Coupon Bond, 5/12/18 144A (e) .. 2,200,000 214,500
---------------
Machinery -- 0.2%
Intevac, Inc., 6.500%, 3/01/04 ......................... 100,000 69,750
---------------
Restaurants -- 2.8%
Boston Chicken, Inc., Zero Coupon Bond, 6/01/15 1,000,000 17,500
Boston Chicken, Inc., 4.500%, 2/01/04 .................. 1,100,000 77,000
Einstein/Noah Bagel Corp., 7.250%, 6/01/04 ............. 125,000 56,250
Shoney's, Inc., Zero Coupon Bond, 4/11/04 .............. 1,200,000 537,000
TPI Enterprises, Inc., 8.250%, 7/15/02 ................. 150,000 126,750
---------------
814,500
---------------
Retail -- Specialty -- 0.6%
Bell Sports Corp., 4.250%, 11/15/00 .................... USD 53,000 45,381
CML Group, Inc., 5.500%, 1/15/03 ....................... 145,000 36,250
Jacobson Stores, Inc., 6.750%, 12/15/11 ................ 100,000 87,000
---------------
168,631
---------------
Telecommunications -- 0.9%
Broadband Technologies, Inc., 5.000%, 5/15/01 .......... 415,000 243,294
---------------
Textile & Apparel -- 0.4%
Converse, Inc., 7.000%, 6/01/04 ........................ 125,000 61,250
Dixie Yarns, Inc., 7.000%, 5/15/12 ..................... 61,000 46,208
---------------
107,458
---------------
TOTAL CONVERTIBLE BONDS
(Identified Cost $13,657,151) ........................ 10,256,669
---------------
TOTAL BONDS AND NOTES
(Identified Cost $34,869,270) ........................ 25,927,047
---------------
Shares
- -----------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 3.2% OF NET ASSETS
Foreign Issuer -- 0.8%
Sappi Ltd., ADR ........................................ 62,000 217,000
Siam Commercial Bank Public Co. (h) .................... 52,000 13,476
---------------
230,476
---------------
Oil & Gas -- 0.2%
Chesapeake Energy Corp. ................................ 45,025 53,467
---------------
Real Estate Investment Trusts -- 1.9%
Associated Estates Realty Corp. ........................ 22,600 412,450
Berkshire Realty Co., Inc. ............................. 10,500 109,594
Meditrust Corp. ........................................ 2,000 34,125
---------------
556,169
---------------
Restaurants -- 0.3%
Advantica Restaurant Group, Inc. (h) ................... 15,745 74,789
---------------
TOTAL COMMON STOCKS
(Identified Cost $1,526,714) ......................... 914,901
---------------
Shares Value (a)
- ----------------------------------------------------------------------------------------------------------
PREFERRED STOCKS -- 3.8% OF NET ASSETS
Financial Services -- 0.6%
Hvide Capital Trust, 6.500% ............................ 5,500 159,500
---------------
Foreign Issuer -- 1.0%
Philippine Long Distance Telephone Co., $3.50, GDS ..... 6,200 241,800
Sakura Finance, 0.750% ................................. 18,000,000 51,191
---------------
292,991
---------------
Metals -- 1.3%
Bethlehem Steel Corp., $3.50 ........................... 9,000 366,750
---------------
Oil & Gas -- 0.0%
Kelley Oil & Gas, $2.625 ............................... 750 12,000
---------------
Telecommunications -- 0.1%
Hyperion Telecommunications, Inc., PIK 12.875% (c) ..... 17 13,543
---------------
Utilities -- 0.8%
Central Maine Power Co., 3.500% ........................ 995 54,476
Niagara Mohawk Power Corp., 3.600% ..................... 1,560 90,480
Niagara Mohawk Power Corp., 4.100% ..................... 700 47,600
Niagara Mohawk Power Corp., 4.400% ..................... 900 47,700
---------------
240,256
---------------
TOTAL PREFERRED STOCKS
(Identified Cost $1,189,437) ......................... 1,085,040
---------------
TOTAL INVESTMENTS -- 97.2%
(IDENTIFIED COST $37,585,421) (i) ...................... 27,926,988
Cash and Other Assets, Less Liabilities -- 2.8% ...... 815,166
---------------
NET ASSETS -- 100% ....................................... $ 28,742,154
===============
</TABLE>
(a) See Note 1.
(b) Step Bond: Coupon is zero or below market rate for an initial period and
then increases at a specified date and rate.
(c) All or a portion of income may be received as additional securities.
(d) Floating Rate Bond: Coupon is six month London Interbank Offered Rate
(LIBOR) plus .8125%.
(e) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(f) Company in Chapter 11 Bankruptcy.
(g) Security in default.
(h) Non-income producing security.
(i) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $37,584,717 for federal income tax purposes was as
follows: Aggregate gross unrealized appreciation for all securities in
which there is an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there is an excess of
tax cost over value were $215,537 and $9,873,266, respectively, resulting
in net unrealized depreciation of $9,657,729.
Key to Abbreviations:
ADR: American Depositary Receipt
CAD: Canadian Dollar
GDS: Global Depositary Shares
USD: United States Dollar
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
LOOMIS SAYLES INTERMEDIATE DURATION
FIXED INCOME FUND
Portfolio of Investments -- as of September 30, 1998
<TABLE>
<CAPTION>
Face
Amount Value (a)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
BONDS AND NOTES -- 97.9% OF NET ASSETS
NON-CONVERTIBLE BONDS -- 97.9%
Banks/Savings & Loans -- 5.8%
BankAmerica Corp., 7.200%, 4/15/06 ............................ $ 50,000 $ 54,482
Capital One Bank, 6.375%, 2/15/03 ............................. 590,000 590,466
---------------
644,948
---------------
Financial Services -- 18.9%
Asset Securitization Corp., 7.010%, 10/13/26 .................. 435,173 450,995
Associates Manufactured Housing, 6.275%, 3/15/28 .............. 450,000 456,966
Commercial Credit Co., 6.500%, 6/01/05 ........................ 50,000 51,759
EQCC Home Equity Loan Trust, 5.150%, 9/15/08 .................. 127,645 126,474
Ford Motor Credit Co., 7.500%, 1/15/03 ........................ 50,000 54,147
Household Finance Corp., 5.875%, 9/25/04 ...................... 450,000 454,473
Nomura Asset Securities Corp., 6.280%, 3/17/28 ................ 483,926 498,424
---------------
2,093,238
---------------
Foreign Government/Agency -- 8.5%
Government of Poland, 4.000%, 10/27/14 (step to 5.000%
on 10/27/98) (b) ............................................ 575,000 492,372
Republic of South Africa, 8.375%, 10/17/06 .................... 550,000 451,000
---------------
943,372
---------------
Foreign Issuer -- 5.7%
Enersis SA, 6.900%, 12/01/06 .................................. 50,000 42,309
Perez Companc SA, 8.125%, 7/15/07 144A (c) .................... 525,000 425,250
Tenaga Nasional Berhad, 7.625%, 4/29/07 144A (c) .............. 325,000 156,000
---------------
623,559
---------------
Government Agencies -- 2.1%
Federal National Mortgage Association, 5.500%, 4/25/06 ........ 150,000 150,750
Federal National Mortgage Association, 6.500%, 2/01/11 ........ 73,676 75,264
---------------
226,014
---------------
Health Care -- Products -- 2.3%
Bausch & Lomb, Inc., 6.500%, 8/01/05 .......................... 250,000 255,573
---------------
Oil & Gas -- 7.5%
Pioneer Natural Resources Co., 6.500%, 1/15/08 ................ 400,000 377,152
R & B Falcon Corp., 6.500%, 4/15/03 ........................... 450,000 453,550
---------------
830,702
---------------
Real Estate Investment Trusts -- 19.1%
American Health Properties, Inc., 7.050%, 1/15/02 ............. 525,000 530,397
Highwoods Realty LP, 6.750%, 12/01/03 ......................... 500,000 499,090
Oasis Residential, Inc., 6.750%, 11/15/01 ..................... 500,000 508,590
Trinet Corporate Realty Trust, Inc., 6.750%, 3/01/03 .......... 550,000 575,822
---------------
2,113,899
---------------
Securities -- 4.9%
Lehman Brothers Holdings, Inc., 7.125%, 9/15/03 ............... 540,000 544,968
---------------
Telecommunications -- 5.2%
TCI Communications, Inc., 6.875%, 2/15/06 ..................... 525,000 569,032
---------------
Textile & Apparel -- 1.8%
Tommy Hilfiger Corp., 6.500%, 6/01/03 ......................... 200,000 201,300
---------------
Tobacco -- 4.7%
RJR Nabisco, Inc., 7.625%, 9/15/03 ............................ 525,000 520,328
---------------
Trucking & Leasing -- 3.4% Amerco, 7.490%, 9/18/01 .............. 350,000 370,108
---------------
U.S. Government -- 2.9%
U.S. Treasury Notes, 5.250%, 8/15/03 .......................... 100,000 104,469
U.S. Treasury Notes, 5.625%, 12/31/02 ......................... 100,000 104,875
U.S. Treasury Notes, 5.875%, 2/15/04 .......................... 75,000 80,332
U.S. Treasury Notes, 6.000%, 10/15/99 ......................... 25,000 25,344
---------------
315,020
---------------
Utilities -- 5.1%
KN Energy, Inc., 6.450%, 3/01/03 .............................. 550,000 565,312
---------------
TOTAL NON-CONVERTIBLE BONDS
(Identified Cost $11,021,836)................................ 10,817,373
---------------
TOTAL BONDS AND NOTES
(Identified Cost $11,021,836)................................ 10,817,373
---------------
TOTAL INVESTMENTS -- 97.9%
(IDENTIFIED COST $11,021,836) }D{ ............................. 10,817,373
Cash and Other Assets, Less Liabilities -- 2.1% ............. 236,284
---------------
NET ASSETS -- 100% .............................................. $ 11,053,657
===============
</TABLE>
(a) See Note 1.
(b) Step Bond: Coupon is zero or below market rate for an initial period and
then increases at a specified date and rate.
(c) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(d) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $11,021,836 for federal income tax purposes was as
follows: Aggregate gross unrealized appreciation for all securities in
which there is an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there is an excess of
tax cost over value were $172,275 and $376,738, respectively, resulting in
net unrealized depreciation of $204,463.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
LOOMIS SAYLES INVESTMENT GRADE FIXED INCOME FUND
Portfolio of Investments -- as of September 30, 1998
<TABLE>
<CAPTION>
Face
Amount Value (a)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BONDS AND NOTES -- 93.3% OF NET ASSETS
NON-CONVERTIBLE BONDS -- 85.4%
Air Transport -- 3.6%
Atlas Air, Inc., 7.680%, 1/02/14 ...................... USD 4,000,000 $ 4,274,280
----------------
Banks/Savings & Loans -- 1.4%
First Union Institutional Trust, 7.850%, 1/01/27 ...... 1,000,000 1,069,270
First Union Institutional Trust, 8.040%, 12/01/26 500,000 550,296
----------------
1,619,566
----------------
Canadian -- 17.5%
Canadian Government, Zero Coupon Bond,
6/01/21 ............................................. CAD 750,000 148,564
Canadian Government, Zero Coupon Bond,
6/01/25 ............................................. 31,550,000 5,111,731
Hydro Quebec, Zero Coupon Bond, 8/15/20 ............... 7,500,000 1,257,255
MacMillan Bloedel Ltd., 7.700%, 2/15/26 ............... USD 305,000 297,537
Milit-Air, Inc., 5.750%, 6/30/19 144A (b) ............. CAD 1,800,000 1,199,528
New Brunswick FM Project, Zero Coupon Bond, 11/30/27
(step to 6.470% on 5/30/03) 144A (b) (c) ............ 500,000 248,860
Ontario Hydro, 8.900%, 8/18/22 ........................ 1,175,000 1,071,853
Province of Alberta, 5.930%, 9/16/16 .................. 717,000 498,926
Province of British Columbia, Zero Coupon Bond, 8/23/13 5,000,000 1,389,736
Province of British Columbia, Zero Coupon Bond, 6/09/14 1,000,000 265,224
Province of British Columbia, Zero Coupon Bond, 9/05/20 3,300,000 602,754
Province of British Columbia, Zero Coupon Bond, 6/09/22 4,000,000 659,518
Province of British Columbia, Zero Coupon Bond, 8/19/22 4,195,000 683,966
Province of British Columbia, Zero Coupon Bond, 11/19/27 6,500,000 780,128
Province of British Columbia, 8.000%, 9/08/23 ......... 750,000 625,844
Province of Manitoba, 6.500%, 9/22/17 ................. 1,825,000 1,302,246
Province of Manitoba, 7.750%, 12/22/25 ................ 3,100,000 2,604,996
Province of Newfoundland, 6.150%, 4/17/28 ............. 500,000 331,202
Province of Saskatchewan, Zero Coupon Bond, 4/10/14 ... CAD 2,500,000 684,981
Province of Saskatchewan, 8.750%, 5/30/25 ............. 1,250,000 1,138,301
----------------
20,903,150
----------------
Communications -- 0.2%
Arch Communications Group, Inc., Zero Coupon Bond,
3/15/08 (step to 10.875% on 3/15/01) (c) USD 575,000 273,125
----------------
Computers -- 4.4%
Seagate Technology, Inc., 7.370%, 3/01/07 ............. 2,000,000 1,994,140
Seagate Technology, Inc., 7.450%, 3/01/37 ............. 3,000,000 3,007,050
Seagate Technology, Inc., 7.875%, 3/01/17 ............. 200,000 190,752
Streamlogic Corp., 14.000%, 10/07/98 (d) (e) .......... 5,440 272
----------------
5,192,214
----------------
Electronics -- 0.2%
Pioneer Standard Electronics, Inc.,
8.500%, 8/01/06 ..................................... 250,000 261,458
----------------
Entertainment -- 4.5%
Time Warner Entertainment Co., 6.875%, 6/15/18 410,000 423,661
Time Warner Entertainment Co., 6.950%, 1/15/28 2,250,000 2,338,493
Time Warner Entertainment Co., 7.570%, 2/01/24 2,300,000 2,551,781
----------------
5,313,935
----------------
Foreign Government/Agency -- 4.5%
New South Wales Treasury, Zero Coupon Bond, 11/23/20 .. AUD 6,000,000 1,057,795
Republic of Brazil C Bond, 8.000%, 4/15/14 PIK (f) .... USD 2,900,536 1,722,338
Republic of South Africa, 8.500%, 6/23/17 ............. 1,125,000 641,250
Republic of South Africa, 12.000%, 2/28/05 ............ ZAR 4,250,000 571,689
Republic of South Africa, 12.500%, 12/21/06 ........... 8,600,000 1,123,502
Republic of South Africa, 13.000%, 8/31/10 ............ 1,500,000 198,377
----------------
5,314,951
----------------
Foreign Issuer -- 9.6%
Bangkok Bank Public Co. Ltd., 8.375%, 1/15/27 144A (b) USD 2,250,000 971,010
Embotelladora Andina SA, 7.000%, 10/01/07 ............. 700,000 580,671
Enersis SA, 7.400%, 12/01/16 .......................... 2,700,000 2,005,776
Hyundai Motor Co. Ltd., 7.600%, 7/15/07 144A (b) ...... 100,000 73,967
Industrial Finance Corp. of Thailand,
6.875%, 4/01/03 144A (b) ............................ USD 575,000 395,283
Korea Electric Power Corp., 7.400%, 4/01/16 ........... 476,135 308,426
Pan Pacific Industrial Investment Plc, Zero Coupon
Bond, 4/28/07 144A (b) .............................. 825,000 261,220
PDVSA Finance Ltd., 7.500%, 11/15/28 144A (b) 2,000,000 1,643,040
Perez Companc SA, 8.125%, 7/15/07 144A (b) ............ 350,000 283,500
Pindo Deli Finance Mauritius Ltd., 10.875%, 10/01/27 .. 100,000 34,600
Samsung Electronics Co. Ltd., 7.700%, 10/01/27 144A (b) 1,250,000 587,500
Tata Electric Co., 8.500%, 8/19/17 144A (b) ........... 1,500,000 1,061,250
Telekom Malaysia Berhad, 7.875%, 8/01/25 144A (b) ..... 2,000,000 1,060,180
Tenaga Nasional Berhad, 7.500%, 11/01/25 144A (b) ..... 5,390,000 2,026,748
Total Access Communication Public Co. Ltd., 8.375%,
11/04/06 144A (b) ................................... 150,000 85,500
----------------
11,378,671
----------------
Government Agencies -- 2.5%
Federal Home Loan Mortgage Corp.,
6.000%, 4/15/28 ..................................... 1,000,000 1,008,750
Federal National Mortgage Association, Zero Coupon
Bond, 10/29/07 ...................................... NZD 6,850,000 2,011,148
----------------
3,019,898
----------------
Health Care -- Products -- 0.8%
Bausch & Lomb, Inc., 7.125%, 8/01/28 .................. USD 1,000,000 986,350
----------------
Health Care -- Services -- 1.1%
Columbia/HCA Healthcare Corp., 7.050%, 12/01/27 ....... 1,500,000 1,263,600
----------------
Home Builders -- 2.4%
Pulte Corp., 7.000%, 12/15/03 ......................... 188,000 194,200
Pulte Corp., 7.300%, 10/24/05 ......................... 200,000 205,780
Pulte Corp., 7.625%, 10/15/17 ......................... 2,500,000 2,476,975
----------------
2,876,955
----------------
Insurance -- 0.2%
Loews Corp., 7.000%, 10/15/23 ......................... USD 250,000 247,990
----------------
Oil & Gas -- 4.4%
Mitchell Energy & Development Corp., 6.750%, 2/15/04 .. 300,000 302,739
Pioneer Natural Resources Co., 7.200%, 1/15/28 ........ 1,000,000 872,920
R & B Falcon Corp., 7.375%, 4/15/18 ................... 2,750,000 2,615,580
Seagull Energy Corp., 7.500%, 9/15/27 ................. 1,600,000 1,449,424
----------------
5,240,663
----------------
Paper Products -- 0.6%
Mead Corp., 7.125%, 8/01/25 ........................... 250,000 240,068
Westvaco Corp., 7.000%, 8/15/23 ....................... 500,000 476,330
----------------
716,398
----------------
Rail -- Transport -- 0.0%
Missouri Pacific Railroad Co., 5.000%, 1/01/45 ........ 50,000 31,000
----------------
Real Estate Investment Trusts -- 6.8%
AMB Property Corp., 7.500%, 6/30/18 ................... 1,000,000 959,200
Camden Property Trust, 7.000%, 11/15/06 ............... 500,000 501,055
First Industrial, 7.500%, 12/01/17 .................... 2,500,000 2,575,292
First Industrial, 7.600%, 7/15/28 ..................... 1,250,000 1,177,363
Highwoods Realty LP, 7.500%, 4/15/18 .................. 1,000,000 949,120
Security Capital Group, Inc., 7.700%, 6/15/28 144A (b) 1,000,000 942,500
Susa Partnership LP, 7.500%, 12/01/27 ................. 500,000 463,000
Trinet Corporate Realty Trust, Inc., 7.700%, 7/15/17 .. 500,000 479,950
----------------
8,047,480
----------------
Retail -- General -- 0.4%
Woolworth Corp., 8.500%, 1/15/22 ...................... 500,000 493,785
----------------
Securities -- 1.2%
Lehman Brothers, Inc., 6.625%, 2/15/08 ................ 1,500,000 1,441,005
----------------
Supranational -- 3.1%
International Bank for Reconstruction & Development,
Zero Coupon Bond, 8/20/07 ........................... NZD 9,650,000 2,812,924
International Bank for Reconstruction & Development,
8.000%, 5/23/07 ..................................... 1,505,000 835,187
----------------
3,648,111
----------------
Taxable Municipal -- 0.7%
Orange County, California Pension Obligation, Zero
Coupon Bond, 9/01/16 ................................ USD 2,500,000 834,250
----------------
Telecommunications -- 3.8%
TCI Communications, Inc., 7.125%, 2/15/28 ............. 975,000 1,065,519
TCI Communications, Inc., 7.875%, 2/15/26 ............. 2,970,000 3,502,194
----------------
4,567,713
----------------
Textile & Apparel -- 1.4%
Burlington Industries, Inc., 7.250%, 8/01/27 .......... 250,000 255,540
Fruit of the Loom, Inc., 7.375%, 11/15/23 ............. 550,000 462,985
Kellwood Co., 7.625%, 10/15/17 ........................ 1,000,000 976,210
----------------
1,694,735
----------------
Tobacco -- 5.4%
Philip Morris Cos., Inc., 7.750%, 1/15/27 ............. 2,850,000 3,085,011
RJR Nabisco, Inc., 7.625%, 9/15/03 .................... 500,000 495,550
RJR Nabisco, Inc., 8.500%, 7/01/07 .................... 1,000,000 1,005,390
RJR Nabisco, Inc., 8.750%, 8/15/05 .................... 150,000 152,546
RJR Nabisco, Inc., 9.250%, 8/15/13 .................... 1,650,000 1,667,110
----------------
6,405,607
----------------
Transportation -- 0.4%
American President Cos. Ltd., 7.125%, 11/15/03 ........ 500,000 426,650
American President Cos. Ltd., 8.000%, 1/15/24 ......... 100,000 73,744
----------------
500,394
----------------
U.S. Government -- 0.6%
U.S. Treasury Strips, Zero Coupon Bond, 8/15/20 ....... 2,500,000 766,300
----------------
Utilities -- 3.7%
Boston Edison Co., 7.800%, 3/15/23 .................... 250,000 272,646
Comed Financing II, 8.500%, 1/15/27 ................... 1,000,000 1,077,540
Commonwealth Edison Co., 4.750%, 12/01/11 ............. 135,000 125,273
KN Capital Trust, 7.630%, 4/15/28 ..................... 2,000,000 1,927,474
KN Energy, Inc., 7.250%, 3/01/28 ...................... 1,000,000 989,380
----------------
4,392,313
----------------
TOTAL NON-CONVERTIBLE BONDS
(Identified Cost $104,438,042) ...................... 101,705,897
----------------
CONVERTIBLE BONDS -- 7.9%
Chemicals -- Major -- 0.1%
FMC Corp., 6.750%, 1/16/05 ............................ USD 170,000 158,950
----------------
Computers -- 0.1%
Maxtor Corp., 5.750%, 3/01/12 ......................... 150,000 87,000
----------------
Diversified Operations -- 0.5%
Ogden Corp., 5.750%, 10/20/02 ......................... 600,000 580,500
----------------
Electronics -- 0.1%
Lam Research Corp., 5.000%, 9/01/02 ................... 100,000 77,750
Richardson Electronics Ltd., 7.250%, 12/15/06 ......... 50,000 37,000
Zenith Corp., 6.250%, 4/01/11 (d) ..................... 71,000 21,655
----------------
136,405
----------------
Environmental Services -- 1.2%
Thermo TerraTech, Inc., 4.625%, 5/01/03 144A (b) ...... 1,650,000 1,425,187
----------------
Foreign Issuer -- 1.8%
Bangkok Bank Public Co. Ltd., 3.250%, 3/03/04 ......... 500,000 132,500
Banpu Public Co., 2.750%, 4/10/03 ..................... 500,000 315,000
Burns, Philp, 5.500%, 4/30/04 ......................... 590,000 300,900
Empresas ICA Sociedad, 5.000%, 3/15/04 ................ 100,000 66,500
Loxley Public Co. Ltd., 2.500%, 4/04/01 ............... 1,150,000 230,000
Samsung Corp., 0.250%, 6/26/06 ........................ 245,000 210,700
Samsung Display Devices, 0.250%, 3/12/06 .............. 260,000 211,900
Siam Commercial Bank Public Co., 3.250%, 1/24/04 ...... 100,000 27,000
Ssangyong Oil Refining Co., Inc., 3.000%, 12/31/04 .... 100,000 46,500
Telekom Malaysia Berhad, 4.000%, 10/03/04 ............. 1,075,000 580,500
----------------
2,121,500
----------------
Freight Transportation -- 0.2%
Builders Transportation, Inc.,
6.500%, 5/01/11 (d) (e) ............................. 129,000 161
Worldway Corp., 6.250%, 4/15/11 ....................... 250,000 205,000
----------------
205,161
----------------
Health Care -- Drugs -- 0.0%
NABI, Inc., 6.500%, 2/01/03 ........................... 100,000 59,375
----------------
Insurance -- 1.3%
Loews Corp., 3.125%, 9/15/07 .......................... USD 1,900,000 1,510,500
----------------
Machinery -- 0.1%
Intevac, Inc., 6.500%, 3/01/04 ........................ 100,000 69,750
----------------
Multi-Industry -- 0.8%
Thermo Instrument Systems, Inc.,
4.500%, 10/15/03 144A (b) ........................... 1,100,000 919,875
----------------
Oil & Gas -- 0.5%
Baker Hughes, Inc., Zero Coupon Bond, 5/05/08 ......... 470,000 310,200
Houston Industries, Inc., 6.000%, 3/15/12 ............. 335,000 321,600
----------------
631,800
----------------
Publishing -- 0.4%
Scholastic Corp., 5.000%, 8/15/05 144A (b) ............ 540,000 498,150
----------------
Real Estate Investment Trusts -- 0.6%
Federal Realty Investors Trust, 5.250%, 10/28/03 ...... 835,000 776,550
----------------
Restaurants -- 0.2%
Shoney's, Inc., Zero Coupon Bond, 4/11/04 ............. 525,000 234,938
----------------
Retail -- Specialty -- 0.0%
CML Group, Inc., 5.500%, 1/15/03 ...................... 50,000 12,500
----------------
TOTAL CONVERTIBLE BONDS
(Identified Cost $11,593,303) ....................... 9,428,141
----------------
TOTAL BONDS AND NOTES
(Identified Cost $116,031,345) ...................... 111,134,038
----------------
Shares Value (a)
- ----------------------------------------------------------------------------------------------------------
PREFERRED STOCKS -- 1.7% OF NET ASSETS
Chemicals -- Major -- 0.1%
E.I. du Pont DeNemours & Co., $3.50 ................... 2,200 158,950
----------------
Metals -- 0.2%
Aluminum Co. of America, $3.75 ........................ 3,350 248,947
----------------
Oil & Gas -- 0.3%
Weatherford International, Inc., 5.000% ............... 10,000 320,000
----------------
Utilities -- 1.1%
Arizona Public Service Co., $2.36 ..................... 246 10,435
Arizona Public Service Co., $2.40 ..................... 263 11,276
Cleco Corp., 4.750% ................................... 850 76,713
Connecticut Light & Power Co., $2.00 .................. 8,895 266,850
Connecticut Light & Power Co., $2.20 .................. 263 7,956
Dayton Power & Light Co., 3.750% ...................... 701 44,163
Del Marva Power & Light Co., 4.000% ................... 350 24,150
Illinois Power Co., 4.080% ............................ 400 15,600
Illinois Power Co., 4.200% ............................ 100 3,956
Jersey Central Power & Light Co., 4.000% .............. 3,510 238,680
MDU Resources Group, Inc., 5.100% ..................... 1,020 102,255
Northern Indiana Public Service Co., 4.250% ........... 2,110 154,821
Northern States Power Co., $4.08 ...................... 50 4,000
Northern States Power Co., $4.10 ...................... 100 8,000
Public Service Electric & Gas Co., 4.080% ............. 300 21,900
San Diego Gas & Electric Co., 4.500% .................. 100 1,731
Southern California Edison Co., 4.240% ................ 5,700 115,425
Southern California Edison Co., 4.320% ................ 8,080 151,500
----------------
1,259,411
----------------
TOTAL PREFERRED STOCKS
(Identified Cost $1,675,715) ........................ 1,987,308
----------------
WARRANTS -- 0.0% OF NET ASSETS
Computers -- 0.0%
Streamlogic Corp. expiring 10/7/01 (d) (g) ............ 48 0
----------------
TOTAL WARRANTS
(Identified Cost $0) ................................ 0
----------------
Face
Amount Value (a)
- ----------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT -- 3.6% OF NET ASSETS
Repurchase Agreement with State Street Bank and Trust
Co., dated 9/30/98 at 4.750% to be repurchased at
$4,332,572 on 10/01/98 collateralized by $3,675,000
U.S. Treasury Bond, 6.500%, due 11/15/26 with a value
of $4,424,355 ....................................... USD 4,332,000 4,332,000
----------------
TOTAL SHORT-TERM INVESTMENT
(Identified Cost $4,332,000) ........................ 4,332,000
----------------
TOTAL INVESTMENTS -- 98.6%
(IDENTIFIED COST $122,039,060) (h) .................... 117,453,346
Cash and Other Assets, Less Liabilities -- 1.4% 1,630,642
----------------
NET ASSETS -- 100% ...................................... $ 119,083,988
================
</TABLE>
(a) See Note 1.
(b) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(c) Step Bond: Coupon is zero or below market rate for an initial period and
then increases at a specified date and rate.
(d) Company in Chapter 11 Bankruptcy.
(e) Security in default.
(f) All or a portion of income may be received as additional securities.
(g) Non-income producing security.
(h) At September 30, 1998, the net unrealized depreciation on investments
based on cost of $122,095,303 for federal income tax purposes was as
follows: Aggregate gross unrealized appreciation for all securities in
which there is an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there is an excess of
tax cost over value were $6,023,745 and $10,665,702, respectively,
resulting in net unrealized depreciation of $4,641,957.
Key to Abbreviations:
AUD: Australian Dollar
CAD: Canadian Dollar
NZD: New Zealand Dollar
USD: United States Dollar
ZAR: South African Rand
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
September 30, 1998
<TABLE>
<CAPTION>
California Tax- Core
Free Income Fixed Income
Fund Fund
----------- -----------
ASSETS
<S> <C> <C>
Investments at value ..................................... $19,647,584 $19,046,079
Cash ..................................................... 634 36,371
Receivable for:
Fund shares sold ....................................... 0 0
Securities sold ........................................ 0 0
Dividend and interest -- net ........................... 304,242 278,701
Foreign tax reclaim .................................... 0 0
Due from the adviser (Note 3) ............................ 15,601 11,939
Other assets (Note 1I) ................................... 0 6,162
----------- -----------
19,968,061 19,379,252
----------- -----------
LIABILITIES
Payable for:
Securities purchased ................................... 313,649 0
Fund shares redeemed ................................... 0 0
Foreign taxes .......................................... 0 0
Payable to Custodian bank ................................ 0 0
Accrued expenses:
Management fees (Note 3) ............................... 7,993 7,978
Trustee's fees (Note 3A) ............................... 268 268
Administrative fees .................................... 791 845
Other .................................................... 27,243 29,405
----------- -----------
349,944 38,496
----------- -----------
NET ASSETS ................................................. $19,618,117 $19,340,756
=========== ===========
Net Assets consist of:
Capital paid in ........................................ $18,759,855 $17,596,308
Undistributed (or Distributions in excess of) net
investment income .................................... 0 838,191
Accumulated net realized gain (loss) ................... (2,744) 183,884
Unrealized appreciation (depreciation) on investments
and foreign currency -- net .......................... 861,006 722,373
----------- -----------
NET ASSETS ................................................. $19,618,117 $19,340,756
=========== ===========
Shares of beneficial interest outstanding, no par value .... 1,852,362 1,683,156
=========== ===========
Net asset value and redemption price per share
(Net assets/shares of beneficial interest outstanding) ... $ 10.59 $ 11.49
Identified cost of investments ............................. $18,786,578 $18,323,706
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Intermediate
Core Fixed High Yield Duration Investment Grade
Growth Income Fixed Income Fixed Income Fixed Income
Fund Fund Fund Fund Fund
- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
$ 21,205,424 $ 244,502,292 $ 27,926,988 $ 10,817,373 $ 117,453,346
172 609 0 82,108 983
0 534,970 0 0 1,069,940
139,352 1,287,499 249,931 34,503 965,624
15,521 3,976,890 655,120 148,079 1,975,459
675 0 0 0 0
12,675 22,483 17,713 7,900 22,520
0 0 0 0 0
- ------------- ------------- ------------- ------------- -------------
21,373,819 250,324,743 28,849,752 11,089,963 121,487,872
- ------------- ------------- ------------- ------------- -------------
428,578 1,741,013 0 0 2,318,126
0 81,000 0 0 0
220 0 957 0 0
0 0 53,702 0 0
8,430 99,933 14,049 3,629 35,861
268 268 268 242 269
797 9,478 1,164 515 4,193
25,754 64,453 37,458 31,920 45,435
- ------------- ------------- ------------- ------------- -------------
464,047 1,996,145 107,598 36,306 2,403,884
- ------------- ------------- ------------- ------------- -------------
$ 20,909,772 $ 248,328,598 $ 28,742,154 $ 11,053,657 $ 119,083,988
============= ============= ============= ============= =============
$ 12,840,857 $ 247,703,228 $ 34,967,994 $ 11,205,240 $ 122,305,398
152,304 11,377,041 2,622,455 97,596 158,069
6,000,470 4,867,991 810,147 (44,716) 1,205,817
1,916,141 (15,619,662) (9,658,442) (204,463) (4,585,296)
- ------------- ------------- ------------- ------------- -------------
$ 20,909,772 $ 248,328,598 $ 28,742,154 $ 11,053,657 $ 119,083,988
============= ============= ============= ============= =============
1,538,347 19,912,166 3,415,768 1,120,455 10,430,242
============= ============= ============= ============= =============
$ 13.59 $ 12.47 $ 8.41 $ 9.87 $ 11.42
$ 19,289,271 $ 260,121,137 $ 37,585,421 $ 11,021,836 $ 122,039,060
============= ============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 1998
<TABLE>
<CAPTION>
California Tax- Core
Free Income Fixed Income
Fund Fund
----------- -----------
INVESTMENT INCOME
<S> <C> <C>
Dividends* ............................................... $ 0 $ 0
Interest ................................................. 686,636 932,499
----------- -----------
686,636 932,499
----------- -----------
Expenses
Management fees (Note 3) ............................... 66,039 69,281
Trustee's fees and expenses (Note 3A) .................. 942 942
Administrative fees .................................... 6,020 7,280
Custodian and accounting fees .......................... 37,755 34,350
Transfer agent fees .................................... 16,671 10,519
Audit and tax services fees ............................ 17,307 14,997
Registration fees ...................................... 12,635 21,357
Amortization of organization expenses (Note 1I) ........ 0 1,828
Other expenses ......................................... 18,492 15,232
----------- -----------
Total expenses ......................................... 175,861 175,786
Less expenses waived and reimbursed by the investment
adviser (Note 3) ..................................... (90,006) (85,691)
----------- -----------
Net expenses ........................................... 85,855 90,095
----------- -----------
Net investment income .................................... 600,781 842,404
----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain (loss) on investments and foreign
currency ............................................. 10,232 180,769
Change in unrealized appreciation (depreciation) on
investments and foreign currency ..................... 320,052 376,200
----------- -----------
Net realized gain (loss) and change in unrealized
appreciation (depreciation) .......................... 330,284 556,969
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ...... $ 931,065 $ 1,399,373
=========== ===========
* Net of foreign withholding taxes of $4,064 and $2,872 for the Core Growth and High Yield
Fixed Income Funds, respectively.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Intermediate
Core Fixed High Yield Duration Investment Grade
Growth Income Fixed Income Fixed Income Fixed Income
Fund Fund Fund Fund Fund
- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
$ 209,405 $ 176,009 $ 152,250 $ 0 $ 69,187
76,421 12,241,287 2,651,467 496,454 5,504,375
- ------------- ------------- ------------- ------------- -------------
285,826 12,417,296 2,803,717 496,454 5,573,562
- ------------- ------------- ------------- ------------- -------------
102,595 774,225 147,356 29,959 301,182
942 942 942 912 942
10,128 70,720 12,047 3,435 37,008
32,122 92,750 44,148 20,612 63,606
8,675 16,248 7,566 5,261 10,805
21,407 27,909 32,007 15,472 25,907
15,323 50,478 19,855 12,762 27,875
0 0 0 0 0
19,922 25,030 11,414 11,416 23,819
- ------------- ------------- ------------- ------------- -------------
211,114 1,058,302 275,335 99,829 491,144
(77,607) (51,944) (91,510) (58,465) (77,026)
- ------------- ------------- ------------- ------------- -------------
133,507 1,006,358 183,825 41,364 414,118
- ------------- ------------- ------------- ------------- -------------
152,319 11,410,938 2,619,892 455,090 5,159,444
- ------------- ------------- ------------- ------------- -------------
6,023,380 4,856,929 813,298 (44,716) 1,166,768
(1,620,971) (20,391,296) (8,655,085) (204,463) (6,968,292)
- ------------- ------------- ------------- ------------- -------------
4,402,409 (15,534,367) (7,841,787) (249,179) (5,801,524)
- ------------- ------------- ------------- ------------- -------------
$ 4,554,728 $ (4,123,429) $ (5,221,895) $ 205,911 $ (642,080)
============= ============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1997
California Tax-
Free Income
Fund
-----------
INVESTMENT INCOME
Dividends* ............................................... $ 0
Interest ................................................. 817,538
-----------
817,538
-----------
Expenses
Management fees (Note 3) ............................... 77,450
Trustee's fees and expenses (Note 3A) .................. 1,424
Administrative fees .................................... 10,983
Custodian and accounting fees .......................... 45,134
Transfer agent fees .................................... 19,435
Audit and tax services fees ............................ 15,643
Registration fees ...................................... 35,475
Amortization of organization expenses (Note 1I) ........ 0
Other expenses ......................................... 12,457
-----------
Total expenses ......................................... 218,001
Less expenses waived and reimbursed by the investment
adviser (Note 3) ..................................... (117,260)
-----------
Net expenses ........................................... 100,741
-----------
Net investment income .................................... 716,797
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investments and foreign currency .. 20,418
Change in unrealized appreciation (depreciation) on
investments and foreign currency ..................... 367,627
-----------
Net realized gain (loss) and change in unrealized
appreciation
(depreciation) ....................................... 388,045
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS ................. $ 1,104,842
===========
*Net of foreign witholding taxes of $5,004, $982, and $576 for the Core
Growth, Fixed Income, and High Yield Fixed Income Funds, respectively.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Core Core Fixed High Yield Investment Grade
Fixed Income Growth Income Fixed Income Fixed Income
Fund Fund Fund Fund Fund
- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
$ 0 $ 418,649 $ 373,312 $ 124,243 $ 94,088
619,238 74,365 9,068,854 1,867,273 4,503,902
- ------------- ------------- ------------- ------------- -------------
619,238 493,014 9,442,166 1,991,516 4,597,990
- ------------- ------------- ------------- ------------- -------------
44,126 162,506 574,496 125,297 244,179
1,424 1,424 1,424 1,424 1,424
6,091 15,789 47,585 11,953 27,462
38,347 36,910 87,788 41,518 64,885
9,056 10,750 15,754 7,446 14,114
10,003 13,573 15,622 10,200 15,623
37,962 34,312 37,370 34,834 36,213
2,409 0 0 0 0
10,173 14,735 27,297 11,313 17,519
- ------------- ------------- ------------- ------------- -------------
159,591 289,999 807,336 243,985 421,419
(102,202) (78,709) (60,854) (88,172) (85,697)
- ------------- ------------- ------------- ------------- -------------
57,389 211,290 746,482 155,813 335,722
- ------------- ------------- ------------- ------------- -------------
561,849 281,724 8,695,684 1,835,703 4,262,268
- ------------- ------------- ------------- ------------- -------------
38,487 3,075,110 2,909,561 1,091,157 1,023,968
257,800 601,974 1,883,711 (1,050,300) 704,886
- ------------- ------------- ------------- ------------- -------------
296,287 3,677,084 4,793,272 40,857 1,728,854
- ------------- ------------- ------------- ------------- -------------
$ 858,136 $ 3,958,808 $ 13,488,956 $ 1,876,560 $ 5,991,122
============= ============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
California Tax-Free Income Fund
----------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996
------------------ ----------------- -----------------
FROM OPERATIONS
<S> <C> <C> <C>
Net investment income ................. $ 600,781 $ 716,797 $ 485,327
Net realized gain (loss) on investments
and foreign currency ................. 10,232 20,418 12,506
Change in unrealized appreciation
(depreciation) on investments and
foreign currency ..................... 320,052 367,627 (7,191)
----------- ----------- -----------
Increase (decrease) in net assets from
operations .......................... 931,065 1,104,842 490,642
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ................. (610,963) (719,537) (476,675)
Net realized gain on investments ...... 0 (41,370) (6,098)
-----------
Total distributions ................ (610,963) (760,907) (482,773)
----------- ----------- -----------
FROM CAPITAL SHARE
TRANSACTIONS
Proceeds from the sale of shares ...... 2,777,897 3,727,583 5,559,420
Net asset value of shares issued in
connection with the reinvestment of
distributions ....................... 105,335 127,165 92,426
Cost of shares redeemed ............... (407,000) (836,438) (80,000)
----------- ----------- -----------
Increase (decrease) in net
assets derived from capital
share transactions ................... 2,476,232 3,018,310 5,571,846
----------- ----------- -----------
Total increase (decrease) in
net assets ........................ 2,796,334 3,362,245 5,579,715
NET ASSETS
Beginning of period ................... 16,821,783 13,459,538 7,879,823
----------- ----------- -----------
End of period ......................... $19,618,117 $16,821,783 $13,459,538
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of period ......................... $ 0 $ 6,408 $ 9,074
=========== =========== ===========
NUMBER OF SHARES OF THE FUND:
Issued from the sale of shares ........ 266,053 364,171 549,758
Issued in connection with the
reinvestment of distributions ........ 10,101 12,386 9,135
Redeemed .............................. (39,014) (82,667) (7,835)
----------- ----------- -----------
Net change ............................ 237,140 293,890 551,058
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Core Fixed Income Fund
----------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996*
------------------ ----------------- -----------------
FROM OPERATIONS
<S> <C> <C> <C>
Net investment income ................. $ 842,404 $ 561,849 $ 236,276
Net realized gain (loss) on investments
and foreign currency ................. 180,769 38,487 (3,622)
Change in unrealized appreciation
(depreciation) on investments and
foreign currency ..................... 376,200 257,800 88,373
----------- ----------- -----------
Increase (decrease) in net
assets from operations ............... 1,399,373 858,136 321,027
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ................. 0 (560,414) (234,245)
Net realized gain on investments ...... (811) (38,618) 0
----------- ----------- -----------
Total distributions ................ (811) (599,032) (234,245)
----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from the sale of shares ...... 4,752,797 9,230,953 5,949,773
Net asset value of shares issued in
connection with the reinvestment of
distributions ........................ 811 599,032 234,245
Cost of shares redeemed ............... (2,921,313) (250,000) 0
----------- ----------- -----------
Increase (decrease) in net assets
derived from capital share
transactions ........................ 1,832,295 9,579,985 6,184,018
----------- ----------- -----------
Total increase (decrease) in
net assets ........................ 3,230,857 9,839,089 6,270,800
NET ASSETS
Beginning of period ................... 16,109,899 6,270,810 10
----------- ----------- -----------
End of period ......................... $19,340,756 $16,109,899 $ 6,270,810
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of period ......................... $ 838,191 $ 0 $ 2,031
=========== =========== ===========
NUMBER OF SHARES OF THE FUND:
Issued from the sale of shares ........ 437,458 860,234 595,456
Issued in connection with the
reinvestment of distributions ........ 73 56,248 22,965
Redeemed .............................. (265,932) (23,346) 0
----------- ----------- -----------
Net change ............................ 171,599 893,136 618,421
=========== =========== ===========
</TABLE>
*Commencement of operations on April 24, 1996.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Core Growth Fund
----------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996
------------------ ----------------- -----------------
FROM OPERATIONS
<S> <C> <C> <C>
Net investment income ................. $ 152,319 $ 281,724 $ 198,013
Net realized gain (loss) on investments
and foreign currency ................. 6,023,380 3,075,110 (334,718)
Change in unrealized appreciation
(depreciation) on investments and
foreign currency ..................... (1,620,971) 601,974 2,755,618
----------- ----------- -----------
Increase (decrease) in net
assets from operations ............... 4,554,728 3,958,808 2,618,913
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ................. 0 (284,442) (198,587)
Net realized gain on investments ...... 0 (2,620,841) 0
----------- ----------- -----------
Total distributions ................ 0 (2,905,283) (198,587)
----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from the sale of shares ...... 1,842,263 12,883,954 14,625,426
Net asset value of shares issued in
connection with the reinvestment of
distributions ........................ 0 2,905,283 198,587
Cost of shares redeemed ............... (24,030,786) (205,235) (2,947,260)
----------- ----------- -----------
Increase (decrease) in net
assets derived from capital
share transactions ................... (22,188,523) 15,584,002 11,876,753
----------- ----------- -----------
Total increase (decrease)
in net assets ..................... (17,633,795) 16,637,527 14,297,079
NET ASSETS
Beginning of period ................... 38,543,567 21,906,040 7,608,961
----------- ----------- -----------
End of period ......................... $20,909,772 $38,543,567 $21,906,040
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of period ......................... $ 152,304 $ 0 $ 1,831
=========== =========== ===========
NUMBER OF SHARES OF THE FUND:
Issued from the sale of shares ........ 146,126 1,009,708 1,419,291
Issued in connection with the
reinvestment of distributions ........ 0 241,472 17,046
Redeemed .............................. (1,751,368) (15,943) (287,257)
----------- ----------- -----------
Net change ............................ (1,605,242) 1,235,237 1,149,080
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Fixed Income Fund
----------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996
------------------ ----------------- -----------------
FROM OPERATIONS
<S> <C> <C> <C>
Net investment income ................. $11,410,938 $ 8,695,684 $ 7,872,003
Net realized gain (loss) on investments
and foreign currency ................. 4,856,929 2,909,561 3,866,845
Change in unrealized appreciation
(depreciation) on investments and
foreign currency ..................... (20,391,296) 1,883,711 (950,519)
----------- ----------- -----------
Increase (decrease) in net
assets from operations ............... (4,123,429) 13,488,956 10,788,329
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ................. 0 (8,861,805) (7,817,191)
Net realized gain on investments ...... (1,288,514) (3,350,264) (2,382,970)
----------- ----------- -----------
Total distributions ................ (1,288,514) (12,212,069) (10,200,161)
----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from the sale of shares ...... 89,088,980 86,055,071 59,500,558
Net asset value of shares issued in
connection with the reinvestment of
distributions ........................ 1,273,620 11,967,763 8,398,469
Cost of shares redeemed ............... (9,670,135) (17,997,654) (35,072,997)
----------- ----------- -----------
Increase (decrease) in net
assets derived from capital
share transactions ................... 80,692,465 80,025,180 32,826,030
----------- ----------- -----------
Total increase (decrease)
in net assets ..................... 75,280,522 81,302,067 33,414,198
NET ASSETS
Beginning of period ................... 173,048,076 91,746,009 58,331,811
----------- ----------- -----------
End of period ......................... $248,328,598 $173,048,076 $91,746,009
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of period ......................... $11,377,041 $ (8,315) $ 241,283
=========== =========== ===========
NUMBER OF SHARES OF THE FUND:
Issued from the sale of shares ........ 6,829,377 6,599,478 4,931,492
Issued in connection with the
reinvestment of distributions ........ 97,745 947,050 693,481
Redeemed .............................. (755,557) (1,401,398) (2,859,895)
----------- ----------- -----------
Net change ............................ 6,171,565 6,145,130 2,765,078
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
High Yield Fixed Income Fund
----------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996
------------------ ----------------- -----------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income ................. $ 2,619,892 $ 1,835,703 $ 160,475
Net realized gain (loss) on investments
and foreign currency ................ 813,298 1,091,157 13,644
Change in unrealized appreciation
(depreciation) on investments and
foreign currency ..................... (8,655,085) (1,050,300) 46,943
----------- ----------- -----------
Increase (decrease) in net
assets from operations ............... (5,221,895) 1,876,560 221,062
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ................. 0 (1,834,725) (160,804)
Net realized gain on investments ...... (281,055) (811,668) (13,677)
----------- ----------- -----------
Total distributions ................ (281,055) (2,646,393) (174,481)
----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from the sale of shares ...... 8,622,000 23,895,000 2,879,339
Net asset value of shares
issued in connection with the
reinvestment of distributions ........ 255,838 2,646,426 174,481
Cost of shares redeemed ............... (3,504,738) 0 0
----------- ----------- -----------
Increase (decrease) in net assets
derived from capital share transactions 5,373,100 26,541,426 3,053,820
----------- ----------- -----------
Total increase (decrease) in
net assets ........................ (129,850) 25,771,593 3,100,401
NET ASSETS
Beginning of period ................... 28,872,004 3,100,411 10
----------- ----------- -----------
End of period ......................... $28,742,154 $28,872,004 $ 3,100,411
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of period ......................... $ 2,622,455 $ 704 $ 0
=========== =========== ===========
NUMBER OF SHARES OF THE FUND:
Issued from the sale of shares ........ 853,119 2,304,814 287,934
Issued in connection with the
reinvestment of distributions ........ 25,558 264,639 17,106
Redeemed .............................. (337,403) 0 0
----------- ----------- -----------
Net change ............................ 541,274 2,569,453 305,040
=========== =========== ===========
</TABLE>
*Commencement of operations on June 5, 1996.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
Intermediate
Duration
Fixed Income Fund
-------------------
Nine Months Ended
September 30, 1998*
-------------------
FROM OPERATIONS
Net investment income .................................... $ 455,090
Net realized gain (loss) on investments and foreign
currency ............................................... (44,716)
Change in unrealized appreciation (depreciation) on
investments and foreign currency ....................... (204,463)
-----------
Increase (decrease) in net assets from operations ........ 205,911
-----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .................................... (357,494)
Net realized gain on investments ......................... 0
-----------
Total distributions .................................... (357,494)
-----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from the sale of shares ......................... 11,888,529
Net asset value of shares issued in connection with the
reinvestment of distributions .......................... 357,494
Cost of shares redeemed .................................. (1,040,783)
-----------
Increase (decrease) in net assets derived from capital
share transactions ..................................... 11,205,240
-----------
Total increase (decrease) in net assets ................ 11,053,657
NET ASSETS
Beginning of period ...................................... 0
-----------
End of period ............................................ $11,053,657
===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of period ............................................ $ 97,596
===========
NUMBER OF SHARES OF THE FUND:
Issued from the sale of shares ........................... 1,188,441
Issued in connection with the reinvestment of
distributions .......................................... 35,799
Redeemed ................................................. (103,785)
-----------
Net change ............................................... 1,120,455
===========
*Commencement of operations on January 28, 1998.
See accompanying notes to financial statements.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Investment Grade Fixed Income Fund
----------------------------------------------------------------------
Nine Months Ended Year Ended Year Ended
September 30, 1998 December 31, 1997 December 31, 1996
------------------ ----------------- -----------------
<S> <C> <C> <C>
FROM OPERATIONS
Net investment income ................. $ 5,159,444 $ 4,262,268 $ 2,262,850
Net realized gain (loss) on investments
and foreign currency ................ 1,166,768 1,023,968 978,367
Change in unrealized appreciation
(depreciation) on investments and
foreign currency ..................... (6,968,292) 704,886 214,006
----------- ----------- -----------
Increase (decrease) in net
assets from operations ............... (642,080) 5,991,122 3,455,223
----------- ----------- -----------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ................. (5,325,638) (4,113,289) (2,263,848)
Net realized gain on investments ...... (164,584) (884,327) (705,324)
----------- ----------- -----------
Total distributions ................ (5,490,222) (4,997,616) (2,969,172)
----------- ----------- -----------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from the sale of shares ...... 38,267,503 28,180,818 27,581,022
Net asset value of shares issued in
connection with the reinvestment of
distributions ........................ 4,469,734 3,906,983 1,972,592
Cost of shares redeemed ............... (484,895) (1,869,109) (103,745)
----------- ----------- -----------
Increase (decrease) in net
assets derived from capital
share transactions ................... 42,252,342 30,218,692 29,449,869
----------- ----------- -----------
Total increase (decrease)in net assets 36,120,040 31,212,198 29,935,920
NET ASSETS
Beginning of period ................... 82,963,948 51,751,750 21,815,830
----------- ----------- -----------
End of period ......................... $119,083,988 $82,963,948 $51,751,750
=========== =========== ===========
UNDISTRIBUTED NET INVESTMENT INCOME
End of period ......................... $ 158,069 $ 166,580 $ 43,660
=========== =========== ===========
NUMBER OF SHARES OF THE FUND:
Issued from the sale of shares ........ 3,216,464 2,322,895 2,335,474
Issued in connection with the
reinvestment of distributions ........ 375,920 327,954 169,546
Redeemed .............................. (41,234) (154,352) (8,853)
----------- ----------- -----------
Net change ............................ 3,551,150 2,496,497 2,496,167
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
LOOMIS SAYLES INVESTMENT TRUST
- ---------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Year Ended December 31,
<CAPTION>
California Tax-Free Income Fund
------------------------------------------------
1998* 1997 1996 1995**
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................................. $ 10.41 $ 10.19 $ 10.23 $ 10.00
-------- -------- -------- --------
Income from investment operations --
Net investment income (loss) ....................................... 0.35 0.47 0.46 0.26
Net realized and unrealized gain (loss) on
investments ...................................................... 0.19 0.25 (0.04) 0.23
-------- -------- -------- --------
Total from investment operations ................................. 0.54 0.72 0.42 0.49
-------- -------- -------- --------
Less distributions --
Dividends from net investment income ............................... (0.36) (0.47) (0.45) (0.26)
Distributions from net realized capital gains ...................... 0.00 (0.03) (0.01) 0.00
-------- -------- -------- --------
Total distributions .............................................. (0.36) (0.50) (0.46) (0.26)
-------- -------- -------- --------
Net asset value, end of period ....................................... $ 10.59 $ 10.41 $ 10.19 $ 10.23
======== ======== ======== ========
Total return (%)(a)(b) ............................................... 5.3 7.3 4.1 4.9
Net assets, end of period (000) ...................................... $ 19,618 $ 16,822 $ 13,460 $ 7,880
Ratio of operating expenses to average net assets (%)(c)(d) .......... 0.65 0.65 0.65 0.65
Ratio of net investment income to average net assets (%)(c) .......... 4.55 4.62 4.58 5.30
Portfolio turnover rate (%)(a) ....................................... 12 24 18 18
The ratios of expenses to average net assets without giving effect to
the voluntary expense limitations described in Note 3 to the
Financial Statements would have been (%)(c) ........................ 1.33 1.41 1.26 1.62
Without giving effect to the voluntary expense limitations described
in Note 3 to the Financial Statements net investment income per
share would have been .............................................. $ 0.30 $ 0.39 $ 0.40 $ 0.22
- ------------
* For the nine months ended September 30, 1998.
** Commencement of operations on June 1, 1995.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the
Fund's ratio of operating expenses would have been higher.
</TABLE>
<PAGE>
<TABLE>
LOOMIS SAYLES INVESTMENT TRUST
- ---------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Year Ended December 31,
<CAPTION>
Core Fixed Income Fund
----------------------------------
1998* 1997 1996**
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period ........................................... $ 10.66 $ 10.14 $ 10.00
-------- -------- --------
Income from investment operations --
Net investment income (loss) ................................................. 0.50 0.39 0.40
Net realized and unrealized gain (loss) on investments ....................... 0.33 0.55 0.13
-------- -------- --------
Total from investment operations ........................................... 0.83 0.94 0.53
-------- -------- --------
Less distributions --
Dividends from net investment income ......................................... 0.00 (0.39) (0.39)
Distributions from net realized capital gains ................................ (0.00)(e) (0.03) 0.00
-------- -------- --------
Total distributions ........................................................ (0.00) (0.42) (0.39)
--------
Net asset value, end of period ................................................. $ 11.49 $ 10.66 $ 10.14
======== ======== ========
Total return (%)(a)(b) ......................................................... 7.8 9.2 5.3
Net assets, end of period (000) ................................................ $ 19,341 $ 16,110 $ 6,271
Ratio of operating expenses to average net assets (%)(c)(d) .................... 0.65 0.65 0.65
Ratio of net investment income to average net assets (%)(c) .................... 6.08 6.34 6.21
Portfolio turnover rate (%)(a) ................................................. 45 59 34
The ratios of expenses to average net assets without giving effect to the
voluntary expense limitations described in Note 3 to the Financial Statements
would have been (%)(c) ....................................................... 1.27 1.80 1.46
Without giving effect to the voluntary expense limitations described in Note 3
to the Financial Statements net investment income per share would have been .. $ 0.45 $ 0.32 $ 0.35
- ------------
* For the nine months ended September 30, 1998.
** Commencement of operations on April 24, 1996.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the
Fund's ratio of operating expenses would have been higher.
(e) Amount is less than $0.01 per share.
</TABLE>
<PAGE>
<TABLE>
LOOMIS SAYLES INVESTMENT TRUST
- ---------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Year Ended December 31,
<CAPTION>
Core Growth Fund
-----------------------------------------------
1998* 1997 1996 1995**
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................................. $ 12.26 $ 11.48 $ 10.02 $ 10.00
-------- -------- -------- --------
Income from investment operations --
Net investment income (loss) ....................................... 0.10 0.10 0.10 0.02
Net realized and unrealized gain (loss) on investment .............. 1.23 1.68 1.47 0.02
-------- -------- -------- --------
Total from investment operations ................................. 1.33 1.78 1.57 0.04
-------- -------- -------- --------
Less distributions --
Dividends from net investment income ............................... 0.00 (0.10) (0.11) (0.02)
Distributions from net realized capital gains ...................... 0.00 (0.90) 0.00 0.00
-------- -------- -------- --------
Total distributions .............................................. 0.00 (1.00) (0.11) (0.02)
-------- -------- -------- --------
Net asset value, end of period ....................................... $ 13.59 $ 12.26 $ 11.48 $ 10.02
======== ======== ======== ========
Total return (%)(a)(b) ............................................... 10.9 15.7 15.6 0.4
Net assets, end of period (000) ...................................... $ 20,910 $ 38,544 $ 21,906 $ 7,609
Ratio of operating expenses to average net assets (%)(c)(d) .......... 0.65 0.65 0.65 0.65
Ratio of net investment income to average net assets (%)(c) .......... 0.74 0.87 1.10 1.36
Portfolio turnover rate (%)(a) ....................................... 96 109 97 22
The ratios of expenses to average net assets without giving effect to
the voluntary expense limitations described in Note 3 to the
Financial Statements would have been (%)(c) ........................ 1.03 0.89 0.89 1.43
Without giving effect to the voluntary expense limitations described
in Note 3 to the Financial Statements net investment income per
share would have been .............................................. $ 0.05 $ 0.07 $ 0.08 $ 0.01
- ------------
* For the nine months ended September 30, 1998
** Commencement of operations on October 1, 1995.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the
Fund's ratio of operating expenses would have been higher.
</TABLE>
<PAGE>
<TABLE>
LOOMIS SAYLES INVESTMENT TRUST
- ---------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Year Ended December 31,
<CAPTION>
Fixed Income Fund
-----------------------------------------------
1998* 1997 1996 1995**
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................................. $ 12.59 $ 12.08 $ 12.08 $ 10.00
-------- -------- -------- --------
Income from investment operations --
Net investment income (loss) ....................................... 0.57 0.72 0.91 0.53
Net realized and unrealized gain (loss) on investment .............. (0.62) 0.89 0.27 2.21
-------- -------- -------- --------
Total from investment operations ................................. (0.05) 1.61 1.18 2.74
-------- -------- -------- --------
Less distributions --
Dividends from net investment income ............................... 0.00 (0.75) (0.90) (0.52)
Distributions from net realized capital gains ...................... (0.07) (0.35) (0.28) (0.14)
-------- -------- -------- --------
Total distributions .............................................. (0.07) (1.10) (1.18) (0.66)
-------- -------- -------- --------
Net asset value, end of period ....................................... $ 12.47 $ 12.59 $ 12.08 $ 12.08
======== ======== ======== ========
Total return (%)(a)(b) ............................................... (0.4) 13.4 9.8 27.4
Net assets, end of period (000) ...................................... $248,329 $173,048 $ 91,746 $ 58,332
Ratio of operating expenses to average
net assets (%)(c)(d) ............................................... 0.65 0.65 0.62 0.75
Ratio of net investment income to average
net assets (%)(c) .................................................. 7.37 7.56 7.97 8.15
Portfolio turnover rate (%)(a) ....................................... 31 41 90 76
The ratios of expenses to average net assets without giving effect to
the voluntary expense limitations described in Note 3 to the
Financial Statements would have been (%)(c) ........................ 0.68 0.70 0.62 0.83
Without giving effect to the voluntary expense limitations described in
Note 3 to the Financial Statements net investment income per share
would have been .................................................... $ 0.57 $ 0.72 $ 0.91 $ 0.52
- ------------
* For the nine months ended September 30, 1998.
** Commencement of operations on January 17, 1995.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the
Fund's ratio of operating expenses would have been higher.
</TABLE>
<PAGE>
<TABLE>
LOOMIS SAYLES INVESTMENT TRUST
- ---------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Year Ended December 31,
<CAPTION>
High Yield Fixed Income Fund
----------------------------------
1998* 1997 1996**
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period ........................................... $ 10.04 $ 10.16 $ 10.00
-------- -------- --------
Income from investment operations --
Net investment income (loss) ................................................. 0.77 0.70 0.56
Net realized and unrealized gain (loss) on investments ....................... (2.31) 0.20 0.21
-------- -------- --------
Total from investment operations ........................................... (1.54) 0.90 0.77
-------- -------- --------
Less distributions --
Dividends from net investment income ......................................... 0.00 (0.71) (0.56)
Distributions from net realized capital gains ................................ (0.09) (0.31) (0.05)
-------- -------- --------
Total distributions ........................................................ (0.09) (1.02) (0.61)
-------- -------- --------
Net asset value, end of period ................................................. $ 8.41 $ 10.04 $ 10.16
======== ======== ========
Total return (%)(a)(b) ......................................................... (15.5) 8.8 7.7
Net assets, end of period (000) ................................................ $ 28,742 $ 28,872 $ 3,100
Ratio of operating expenses to average net assets (%)(c)(d) .................... 0.75 0.75 0.75
Ratio of net investment income to average net assets (%)(c) .................... 10.69 8.82 9.42
Portfolio turnover rate (%)(a) ................................................. 39 94 9
The ratios of expenses to average net assets without giving effect to the
voluntary expense limitations described in Note 3 to the Financial Statements
would have been (%)(c) ....................................................... 1.12 1.17 2.73
Without giving effect to the voluntary expense limitations described in Note 3
to the Financial Statements net investment income per share would have been .. $ 0.74 $ 0.67 $ 0.44
- ------------
* For the nine months ended September 30, 1998.
** Commencement of operations on June 5, 1996.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the
Fund's ratio of operating expenses would have been higher.
</TABLE>
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Year Ended December 31,
Intermediate Duration
Fixed Income Fund
---------------------
1998*
---------------------
Net asset value, beginning of period ........................ $ 10.00
--------
Income from investment operations --
Net investment income (loss) .............................. 0.41
Net realized and unrealized gain (loss) on investment ..... (0.22)
--------
Total from investment operations ........................ 0.19
--------
LESS DISTRIBUTIONS --
Dividends from net investment income ...................... (0.32)
Distributions from net realized capital gains ............. 0.00
--------
Total distributions ..................................... (0.32)
--------
Net asset value, end of period .............................. $ 9.87
========
Total return (%)(a)(b) ...................................... 1.9
Net assets, end of period (000) ............................. $ 11,054
Ratio of operating expenses to average net assets (%)(c)(d) . 0.55
Ratio of net investment income to average net assets (%)(c) . 6.05
Portfolio turnover rate (%)(a) .............................. 74
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%)(c) . 1.33
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net
investment income per share would have been ............... $ 0.35
- ------------
* Commencement of operations on January 28, 1998.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Year Ended December 31,
Investment Grade
Fixed Income Fund
---------------------
1998*
---------------------
Net asset value, beginning of period ......................... $ 12.06
--------
Income from investment operations --
Net investment income (loss) ............................... 0.61
Net realized and unrealized gain (loss) on investments ..... (0.60)
--------
Total from investment operations ......................... 0.01
--------
Less distributions --
Dividends from net investment income ....................... (0.63)
Distributions from net realized capital gains .............. (0.02)
--------
Total distributions ...................................... (0.65)
--------
Net asset value, end of period ............................... $ 11.42
========
Total return (%)(a)(b) ....................................... (0.0)
Net assets, end of period (000) .............................. $119,084
Ratio of operating expenses to average net assets (%)(c)(d) .. 0.55
Ratio of net investment income to average net assets (%)(c) .. 6.85
Portfolio turnover rate (%)(a) ............................... 31
The ratios of expenses to average net assets without giving
effect to the voluntary expense limitations described in
Note 3 to the Financial Statements would have been (%)(c) .. 0.65
Without giving effect to the voluntary expense limitations
described in Note 3 to the Financial Statements net
investment income per share would have been ................ $ 0.60
- ------------
* For the nine months ended September 30, 1998.
** Commencement of operations on July 1, 1994.
(a) Periods less than one year are not annualized.
(b) Total returns would have been lower had the adviser not reduced its advisory
fees and/or borne other operating expenses.
(c) Annualized for periods less than one year.
(d) The adviser has agreed to reimburse a portion of the Fund's expenses during
the period. Without this reimbursement the Fund's ratio of operating
expenses would have been higher.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- ---------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Year Ended December 31,
Investment Grade Fixed Income Fund
- ---------------------------------------------------------------
1997 1996 1995 1994**
-------- -------- -------- --------
$ 11.81 $ 11.56 $ 9.57 $ 10.00
-------- -------- -------- --------
0.83 0.80 0.75 0.41
0.37 0.40 2.05 (0.43)
-------- -------- -------- --------
1.20 1.20 2.80 (0.02)
-------- -------- -------- --------
(0.81) (0.79) (0.76) (0.41)
(0.14) (0.16) (0.05) 0.00
-------- -------- -------- --------
(0.95) (0.95) (0.81) (0.41)
-------- -------- -------- --------
$ 12.06 $ 11.81 $ 11.56 $ 9.57
======== ======== ======== ========
10.6 10.9 30.3 (0.3)
$ 82,964 $ 51,752 $ 21,816 $ 4,649
0.55 0.55 0.55 0.55
6.97 7.27 7.61 8.18
58 74 22 112
0.69 0.70 0.94 1.55
$ 0.81 $ 0.78 $ 0.71 $ 0.36
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
September 30, 1998
1. Loomis Sayles Investment Trust (the "Trust") consists of seven no-load
mutual funds (the "Funds").
The Trust was organized as a Massachusetts business trust under the laws of
the Commonwealth of Massachusetts on December 23, 1993. The Trust is a
diversified, open-end management investment company registered with the
Securities and Exchange Commission under the Investment Company Act of 1940,
as amended (the "1940 Act"), and the interests in which were registered for
offer and sale, effective March 7, 1997, under the Securities Act of 1933, as
amended (the "1933 Act"). The Trust is authorized to issue an unlimited number
of full and fractional shares of beneficial interest in multiple series.
Each Fund is separately managed and has its own investment objective and
policies. Loomis, Sayles & Company, L.P. ("Loomis Sayles") is the investment
adviser of each fund.
The Trust consists of the following Funds:
Loomis Sayles California Tax-Free Income Fund
Loomis Sayles Core Fixed Income Fund
Loomis Sayles Core Growth Fund
Loomis Sayles Fixed Income Fund
Loomis Sayles High Yield Fixed Income Fund
Loomis Sayles Intermediate Duration Fixed Income Fund
Loomis Sayles Investment Grade Fixed Income Fund
The preparation of 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. Effective September 30,
1998, the Board of Trustees approved a change in the fiscal year end of the
Funds to September 30, 1998. Certain amounts in the Statements of Operations
and Statements of Changes in Net Assets for prior periods have been
reclassified to conform to current period presentations. The following
summarizes the significant accounting policies of the Loomis Sayles Investment
Trust Funds:
A. SECURITY VALUATION -- Long-term debt securities for which quotations are
readily available are valued by a pricing service, as approved by the Board of
Trustees, which generally uses the most recent bid prices in the principal
market in which such securities are normally traded. Municipal debt securities
are valued by a pricing service, as approved by the Board of Trustees, which
generally uses a computerized matrix system or dealer supplied quotations that
consider market transactions for comparable securities. Equity securities for
which quotations are readily available are valued at their last sale price on
the exchange where primarily traded or, if there is no reported sale during
the day, at the closing bid price. Short-term securities with a remaining
maturity of 60 days or less are valued at amortized cost, which approximates
market value. Other securities for which quotations are not readily available
(including restricted securities, if any) are valued primarily using dealer
supplied quotations or at their fair values as determined in good faith under
the general supervision of the Board of Trustees
B. REPURCHASE AGREEMENTS -- The Funds may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Funds
take possession of an underlying debt obligation subject to an obligation of
the seller to repurchase, and the Funds to resell, the obligation at an
agreed-upon price and time. This arrangement results in a fixed rate of return
that is not subject to market fluctuations during the Funds' holding period.
The Funds, through their custodian, receive delivery of the underlying
securities collateralizing repurchase agreements. It is the Funds' policy that
the market value of the collateral be at least equal to 102% of the repurchase
price. These securities are marked-to-market daily. Loomis Sayles is
responsible for determining that the value of the collateral is at all times
at least equal to 102% of the repurchase price. In connection with
transactions in repurchase agreements, if the seller defaults and the value of
the collateral declines or if the seller enters into insolvency proceedings,
realization of the collateral by the Funds may be delayed or limited.
C. FOREIGN CURRENCY TRANSLATION AND FOREIGN INVESTMENTS -- The books and
records of each of the Funds (including those Funds that invest in foreign
securities) are maintained in U.S. dollars. The value of securities,
currencies and other assets and liabilities denominated in currencies other
than U.S. dollars is translated into U.S. dollars based upon foreign exchange
rates prevailing at the end of the period. Purchases and sales of investment
securities are translated at contractual currency exchange rates established
at the time of the trade. Income and expenses are translated at prevailing
exchange rates on the respective dates of such transactions.
The results of operations resulting from changes in foreign exchange rates on
investments are not isolated from fluctuations arising from changes in market
prices of securities held. All such fluctuations are included with net
realized and unrealized gain or loss from investments.
Net realized and unrealized gains and losses on foreign currency transactions
represent foreign exchange gains and losses from the sale of short-term
securities and holdings of foreign currencies, foreign currency gains and
losses between trade dates and settlement dates on investment securities
transactions, sales and maturities of forward foreign currency exchange
contracts, and the difference between the amounts of daily interest accruals
on the books of the Funds and the amounts actually received resulting from
changes in exchange rates on the payable date.
Certain funds use foreign currency exchange contracts to facilitate
transactions in foreign-denominated securities. Losses may arise from changes
in the value of the foreign currency or if the counterparties do not perform
under the contracts' terms. The U.S. dollar value of foreign currency is
determined using contractual currency exchange rates established at the time
of each trade. The cost of the foreign currency exchange contracts is included
in the cost basis of the associated investment.
Each Fund (except the California Tax-Free Income Fund) may purchase securities
of foreign issuers. Investing in securities of foreign companies and foreign
governments involves special risks and considerations not typically associated
with investing in U.S. companies and securities of the U.S. government. These
risks include revaluation of currencies and the risk of appropriation.
Moreover, the markets for securities of many foreign companies and foreign
governments may be less liquid, and the prices of such securities may be more
volatile than those securities of comparable U.S. companies and the U.S.
government.
D. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- Each Fund that may invest
in foreign securities may enter into forward foreign currency exchange
contracts to protect securities against changes in future foreign exchange
rates. A forward foreign currency exchange contract is an agreement between
two parties to buy or sell currency at a set price on a future date.
The market value of the contract will fluctuate with changes in currency
exchange rates. The contract is marked-to-market daily using the forward
currency exchange rate and the change in market value is recorded as
unrealized appreciation (depreciation) on foreign currency translations in the
Funds' Statements of Assets and Liabilities. Realized gain or loss is
recognized when the contract is closed equal to the difference between the
value of the contract at the time it was opened and the value at the time it
was closed and recorded as realized gain (loss) on foreign currency
transactions in the Funds' Statements of Operations.
Risks may arise upon entering into forward foreign currency exchange contracts
from the potential inability of the counterparties to meet the terms of their
contracts and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. At September 30, 1998 there were no open forward
foreign exchange contracts.
E. SECURITY TRANSACTIONS, RELATED INVESTMENT INCOME AND EXPENSES -- Security
transactions are accounted for on the trade date (the date the buy or sell is
executed). Dividend income is recorded on the ex-dividend date and interest
income is recorded on the accrual basis. Interest income is increased by the
accretion of discount. Discounts on zero coupon bonds, original issues, step
bonds and payment in kind bonds are accreted according to the effective
interest method. Interest income on the California Tax-Free Income Fund is
decreased by the amortization of premium. Premiums are amortized using the
yield to maturity method. In determining net gain or loss on securities sold,
the cost of securities has been determined on the identified cost basis.
Most expenses of the Trust can be directly attributed to a particular fund.
Expenses which cannot be directly attributed are apportioned among the Funds
based upon relative net assets.
F. WHEN-ISSUED SECURITIES -- Each Fund may purchase securities on a when-
issued basis. Securities purchased on a when-issued basis are purchased for
delivery beyond the normal settlement period at a stated price and yield, and
no income accrues to the Fund on such securities prior to delivery. Each Fund
instructs the custodian to establish a segregated account in which it
maintains liquid assets at least equal to the amount of its when-issued
purchase commitments. Purchasing securities on a when-issued basis may involve
a risk that the market price at the time of delivery may be lower than the
agreed-upon purchase price, in which case there could be an unrealized loss at
the time of delivery. At September 30, 1998, the Funds had no such
commitments.
G. FEDERAL INCOME TAXES -- Each Fund is a separate entity for federal income
tax purposes. Each Fund intends to meet the requirements of the Internal
Revenue Code applicable to regulated investment companies, and to distribute
to its shareholders all of its net investment income and any net realized
capital gains. Accordingly, no provision for federal income tax or excise tax
has been made.
At September 30, 1998, the California Tax-Free Income and Intermediate
Duration Fixed Income Funds had available capital loss carryforwards of $2,744
and $44,716, respectively, which will expire on September 30, 2006. These
realized losses are intended to be used to offset future net capital gains.
H. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The California Tax-Free
Income, the Intermediate Duration Fixed Income and the Investment Grade Fixed
Income Funds pay their net investment income monthly. The Core Fixed Income,
Core Growth, Fixed Income and High Yield Fixed Income Funds pay their net
investment income to shareholders annually. Distributions from net realized
capital gains, if any, are declared and paid on an annual basis by all of the
Funds. Income and capital gain distributions are determined in accordance with
Federal income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
reclassifications to the Fund's capital accounts to reflect income and gains
available for distribution, are primarily due to differing book and tax
treatments for foreign currency transactions, deferred losses due to wash
sales and excise tax regulations. Some of these classifications may include
temporary book and tax basis differences that will reverse in subsequent
periods.
I. ORGANIZATION EXPENSE -- In 1996, costs approximating $11,970 were incurred
in connection with the initial registration and organization of the Core Fixed
Income Fund. These costs were paid by the Fund and are being amortized over 60
months.
2. PURCHASES AND SALES OF SECURITIES -- (excluding short-term investments)
for each Fund for the nine months ended September 30, 1998 were as follows:
Purchases
------------------------------------
U.S. Government Other
--------------- -----
California Tax-Free Income Fund ......... $ 0 $ 4,481,083
Core Fixed Income Fund .................. 2,898,492 8,180,001
Core Growth Fund ........................ 0 24,383,040
Fixed Income Fund ....................... 26,163,980 126,580,964
High Yield Fixed Income Fund ............ 1,590,750 17,072,250
Intermediate Duration Fixed Income Fund . 7,171,623 11,907,136
Investment Grade Fixed Income Fund ...... 13,005,767 55,863,843
Sales
------------------------------------
U.S. Government Other
--------------- -----
California Tax-Free Income Fund ......... $ 500,000 $ 1,482,137
Core Fixed Income Fund .................. 7,370,537 624,775
Core Growth Fund ........................ 0 46,348,256
Fixed Income Fund ....................... 26,704,850 34,065,954
High Yield Fixed Income Fund ............ 1,612,000 10,583,816
Intermediate Duration Fixed Income Fund . 6,599,137 1,419,039
Investment Grade Fixed Income Fund ...... 19,248,752 11,495,365
3. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES -- For the nine
months ended September 30, 1998, the Funds incurred management fees payable to
Loomis Sayles. Certain officers and directors of Loomis Sayles are also
officers or Trustees of the Trust. Loomis Sayles' general partner is
indirectly owned by NVEST, L.P., a publicly-traded limited partnership whose
general partner is indirectly owned by Metropolitan Life Insurance Company.
Separate management agreements for each Fund in effect during the nine months
ended September 30, 1998 provided for fees at the following annual percentage
rate of each Fund's average daily net assets indicated below. Loomis Sayles
voluntarily agreed, for an indefinite period, to reduce its advisory fees and/
or bear other expenses, to the extent necessary to limit the total operating
expenses of the Funds to the following percentage rate of the Fund's average
annual net assets:
Maximum Operating
Fund Management Fees Expense Ratio
---- --------------- -------------
California Tax-Free Income Fund ........... 0.50% 0.65%
Core Fixed Income Fund .................... 0.50% 0.65%
Core Growth Fund .......................... 0.50% 0.65%
Fixed Income Fund ......................... 0.50% 0.65%
High Yield Fixed Income Fund .............. 0.60% 0.75%
Intermediate Duration Fixed Income Fund ... 0.40% 0.55%
Investment Grade Fixed Income Fund ........ 0.40% 0.55%
Loomis Sayles may change or terminate these voluntary agreements at any time,
but the relevant prospectus would be supplemented at the time to describe the
change.
A. TRUSTEES FEES AND EXPENSES -- The Trust does not pay any compensation
directly to its officers or Trustees who are directors, officers or employees
of Loomis Sayles, Metropolitan Life Insurance Company or their affiliates.
Each independent Trustee is compensated by the Trust at the rate of $10,000
per annum, plus travel expenses for each meeting attended. These expenses are
allocated evenly among the Funds in the Trust.
4. CREDIT RISK -- The High Yield Fixed Income Fund will invest at least 65%,
the Fixed Income Fund may invest up to 35%, and the Investment Grade Fixed
Income Fund may invest up to 10% of its total net assets in securities
offering high current income, which generally will be in the lower rating
categories of recognized rating agencies. These securities are regarded as
predominantly speculative with respect to the capacity to pay interest and
repay principal in accordance with the terms of the obligations and will
generally involve more credit risk than securities in the higher-rated
categories. In addition, the trading market for high yield securities may be
relatively less liquid than the market for higher-rated securities.
5. CONCENTRATION -- The California Tax-Free Income Fund primarily invests in
debt obligations issued by the State of California, its political
subdivisions, agencies and public authorities to obtain funds for various
public purposes. The Fund is more susceptible to factors adversely affecting
issuers of California municipal securities than is a municipal bond fund that
does not concentrate its investments in the securities of issuers of a single
state.
<PAGE>
LOOMIS SAYLES INVESTMENT TRUST
- --------------------------------------------------------------------------------
1998 U.S. TAX AND DISTRIBUTION INFORMATION TO SHAREHOLDERS (UNAUDITED)
A. CAPITAL GAINS DISTRIBUTIONS -- Pursuant to Internal Revenue Section
852(b), the funds listed below have paid distributions which have been
designated as capital gains distributions for the fiscal year ended September
30, 1998.
Amount
------
Core Fixed Income Fund ................................. $ 604
Fixed Income Fund ...................................... 1,076,967
High Yield Fixed Income Fund ........................... 61,380
Investment Grade Fixed Income Fund ..................... 164,584
B. CORPORATE DIVIDENDS RECEIVED DEDUCTION -- For the fiscal year ended
September 30, 1998, a percentage of dividends distributed by the Funds listed
below qualify for the dividends received deduction for corporate shareholders.
These percentages are as follows:
Qualifying
Percentage
----------
Core Growth Fund ....................................... 9.42%
Fixed Income Fund ...................................... 1.26%
High Yield Fixed Income Fund ........................... 3.48%
Investment Grade Fixed Income Fund ..................... 1.23%
C. EXEMPT INTEREST DIVIDENDS -- 92% of the dividends paid by the California
Tax-Free Income Fund from net investment income for the nine months ended
September 30, 1998, constituted exempt interest dividends for Federal income
tax purposes.
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees of the Loomis Sayles Investment Trust Funds:
In our opinion, the accompanying statements of assets and liabilities,
including the portfolio of investments owned, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Loomis Sayles
Investment Trust Funds (consisting of the Loomis Sayles California Tax-Free
Income Fund, Core Fixed Income Fund, Core Growth Fund, Fixed Income Fund,
High Yield Fixed Income Fund, Intermediate Duration Fixed Income Fund, and
Investment Grade Fixed Income Fund) (collectively, the "Funds") at September
30, 1998, and the results of their operations, the changes in their net assets
and the financial highlights for the periods indicated, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of investments owned at September 30,
1998 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
November 18, 1998
<PAGE>
- -------------------------------------------------------------------------------
LOOMIS SAYLES INVESTMENT TRUST
- -------------------------------------------------------------------------------
TRUSTEE
Timothy J. Hunt
OFFICERS
PRESIDENT
Daniel J. Fuss
EXECUTIVE VICE PRESIDENT TREASURER
Robert J. Blanding Mark W. Holland
VICE PRESIDENTS ASSISTANT TREASURER
William F. Camp Nicholas H. Palmerino
Quentin P. Faulkner
Kathleen C. Gaffney
Jeffrey L. Meade SECRETARY
Robert K. Payne Sheila M. Barry
Mari J. Sugahara
Frederick E. Sweeney, Jr.
Anthony J. Wilkins ASSISTANT SECRETARY
Bonnie S. Thompson
<PAGE>
For Information about:
o Establishing an account
o Account procedures and status
o Exchanges
o Shareholder services
Phone 888-226-9699 (Toll Free)
INVESTMENT ADVISER
Loomis, Sayles & Company, L.P. o One Financial Center o Boston, MA 02111
TRANSFER AND DIVIDEND PAYING AGENT AND CUSTODIAN OF ASSETS
State Street Bank and Trust Company o Boston, MA 02102
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP o One Post Office Square o Boston, MA 02109
This report has been prepared for the shareholders of the Funds and is not
authorized for distribution to prospective investors in the Funds unless it is
accompanied or preceded by an effective prospectus.
