LOOMIS SAYLES INVESTMENT TRUST, 485APOS, 2000-12-20

LOOMIS SAYLES INVESTMENT TRUST
485APOS, 2000-12-20

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 19, 2000
REGISTRATION NOS. 333-22931 AND 811-8282

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------------------------

FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT NO.

POST-EFFECTIVE AMENDMENT NO. 10 /X/
REGISTRATION STATEMENT UNDER
AMENDMENT NO. 1940 /X/
(CHECK APPROPRIATE BOX OR BOXES) /X/

--------------------------------

LOOMIS SAYLES INVESTMENT TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

ONE FINANCIAL CENTER, BOSTON, MA 02111
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 482-2450

NAME AND ADDRESS
OF AGENT FOR SERVICE COPY TO
-------------------- -------

SHEILA M. BARRY, ESQUIRE TRUMAN S. CASNER, ESQUIRE
LOOMIS, SAYLES & COMPANY, L.P. ROPES & GRAY
ONE FINANCIAL CENTER ONE INTERNATIONAL PLACE
BOSTON, MA 02111 BOSTON, MA 02110

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):

/ / IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B) OF RULE 485

/ / ON _________________________, PURSUANT TO PARAGRAPH (B)

/ / 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1)

/ / ON _________________________, PURSUANT TO PARAGRPH (A)(1)

/x/ 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(2)

/ / ON _________________________, PURSUANT TO PARAGRAPH (A)(2)

IF APPROPRIATE, CHECK THE FOLLOWING BOX:

/ / THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR A
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.

----------------------------------
<PAGE>

[LOGO]

LOOMIS SAYLES MID CAP GROWTH FUND

PROSPECTUS . MARCH , 2001

Loomis, Sayles & Company, L.P., which has been an investment adviser since
1926, is the investment adviser of the Funds.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIME.
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
RISK/RETURN SUMMARY
General Information 1
Loomis Sayles Mid Cap Growth Fund 1

SUMMARY OF PRINCIPAL RISKS 3

EXPENSES OF THE FUNDS 6

MORE INFORMATION ABOUT THE FUNDS' INVESTMENTS AND RISK CONSIDERATIONS 7

MANAGEMENT 13
Investment Adviser 13
Portfolio Managers 13

GENERAL INFORMATION 14
Pricing 14
How to Purchase Shares 14
How to Redeem Shares 15
Dividends and Distributions 16
Tax Consequences 16
</TABLE>

<PAGE>

RISK/RETURN SUMMARY

GENERAL INFORMATION

The following is a summary of certain key information about the Loomis Sayles
Mid Cap Growth Fund. You will find additional information about the Fund,
including a detailed description of the risks of an investment in the Fund,
after this summary.

This Risk/Return summary describes the Fund's objective, principal investment
strategies and principal risks. The summary page for the Fund includes a short
discussion of some of the principal risks of investing in the Fund. A further
discussion of these and other principal risks begins after this summary page.

More detailed descriptions of the Fund, including some of the additional risks
associated with investing in the Fund, can be found further back in this
Prospectus after the Summary of Principal Risks. Please be sure to read this
additional information before you invest.

You can lose money by investing in the Fund. The Fund may not achieve its
objective and is not intended to be a complete investment program. An
investment in the Fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

1
<PAGE>

LOOMIS SAYLES MID CAP GROWTH FUND

INVESTMENT OBJECTIVE The Fund's investment objective is long-term capital
growth from investments in common stocks or their equivalent.

PRINCIPAL INVESTMENT STRATEGIES The Fund invests primarily in common stocks or
other equity securities of companies with market capitalizations that fall
within the capitalization range of companies included in the Russell Mid-Cap
Growth Index, although the Fund may invest in companies of any size.

In deciding which securities to buy and sell, Loomis Sayles seeks to identify
companies that Loomis Sayles believes have distinctive products, technologies,
or services, dynamic earnings growth, prospects for high levels of
profitability, and solid management. Loomis Sayles typically does not consider
current income.

The Fund may invest any portion of its assets in securities of Canadian issuers
and up to 20% of its assets in other foreign securities, including emerging
markets securities. The Fund may engage in foreign currency hedging
transactions, options and futures transactions, and securities lending. The
Fund also may invest in real estate investment trusts and Rule 144A securities.

PRINCIPAL RISKS Among the principal risks of investing in the Fund are the
following:
. market risk (the risk that the value of the Fund's investments will fall as
a result of movements in financial markets generally);
. foreign risk (the risk that the value of the Fund's foreign investments will
fall as a result of foreign political, social, or economic changes);
. currency risk (the risk that the value of the Fund's investments will fall
as a result of changes in exchange rates);
. derivatives risk (the risk that the value of the Fund's derivative
investments will fall as a result of pricing difficulties or lack of
correlation with the underlying investment);
. liquidity risk (the risk that the Fund may be unable to find a buyer for its
investments when it seeks to sell them); and
. management risk (the risk that Loomis Sayles' investment techniques will be
unsuccessful and may cause the Fund to incur losses).

PERFORMANCE INFORMATION No performance information is available for the Fund
because it has not been in operation for a full calendar year.
<PAGE>

SUMMARY OF PRINCIPAL RISKS

The value of your investment in the Fund will fluctuate with changes in the
values of the Fund's investments. Many factors can affect those values. This
section describes the principal risks that may affect the Fund's portfolio as a
whole. The Fund could be subject to additional principal risks because the
types of investments made by the Fund can change over time.

MARKET RISK

This is the risk that the value of the Fund's investments will change as
financial markets fluctuate and that prices overall may decline. The value of a
company's stock may fall as a result of factors that directly relate to that
company, such as decisions made by its management or lower demand for the
company's products or services. A stock's value also may fall because of
factors affecting not just the company, but companies in its industry or in a
number of different industries, such as increases in production costs. The
value of a company's stock also may be affected by changes in financial market
conditions, such as changes in interest rates or currency exchange rates. In
addition, a company's stock generally pays dividends only after the company
makes required payments to holders of its bonds or other debt. For this reason,
the value of the stock will usually react more strongly than bonds and other
fixed income securities to actual or perceived changes in the company's
financial condition or prospects.

Market risk generally is greater for Funds that invest substantially in small
and medium-sized companies, such as the Loomis Sayles Mid Cap Growth Fund, the
Loomis Sayles Small Company Growth Fund, and the Loomis Sayles Small Company
Value Fund, since these companies tend to be more vulnerable to adverse
developments than large companies. Furthermore for Funds that invest in fixed
income securities, market risk tends to be greater when a Fund invests in fixed
income securities with longer maturities.

FOREIGN RISK

This is the risk associated with investments in issuers located in foreign
countries. A Fund's investments in foreign securities may experience more rapid
and extreme changes in value than investments in securities of U.S. companies.

The securities markets of many foreign countries are relatively small, with a
limited number of issuers and a small number of securities. In addition,
foreign companies often are not subject to the same degree of regulation as
U.S. companies. Reporting, accounting, and auditing standards of foreign
countries differ, in some cases significantly, from U.S. standards.
Nationalization, expropriation or confiscatory taxation, currency blockage,
political changes, or diplomatic developments can cause the value of a Fund's
investments in a foreign country to decline. In the event of nationalization,
expropriation, or other confiscation, the Fund that invests in foreign
securities could lose its entire investment.

3
<PAGE>

CURRENCY RISK

This is the risk that fluctuations in exchange rates between the U.S. dollar
and foreign currencies may cause the value of a Fund's investments to decline.
Each of the Fund is subject to currency risk because it may invest in
securities denominated in, or receiving revenues in, foreign currencies.

LEVERAGING RISK

When the Fund borrows money or otherwise leverages its portfolio, the value of
an investment in the Fund will be more volatile, and all other risks generally
are compounded. Since the Fund may create leverage by using investments such as
repurchase agreements, inverse floating rate instruments or derivatives, or by
borrowing money, the Fund faces this risk.

DERIVATIVES RISK

The Fund may use derivatives, which are financial contracts whose value depends
upon or is derived from the value of an underlying asset, reference rate, or
index. Examples of derivatives include options, futures, and swap transactions.
The Fund may use derivatives as part of a strategy designed to reduce other
risks ("hedging"). The Fund also may use derivatives to earn income, enhance
yield, and broaden Fund diversification. This use of derivatives entails
greater risk than using derivatives solely for hedging purposes. Funds that use
derivatives also face additional risks, such as the credit risk of the other
party to a derivative contract, the risk of difficulties in pricing and
valuation, and the risk that changes in the value of a derivative may not
correlate perfectly with relevant assets, rates, or indices.

LIQUIDITY RISK

Liquidity risk exists when particular investments are difficult to purchase or
sell, possibly preventing the Fund from selling out of these illiquid
securities at an advantageous price. Derivatives and securities that involve
substantial credit risk tend to involve greater liquidity risk. In addition,
liquidity risk tends to increase to the extent the Fund invests in securities
whose sale may be restricted by law or by contract, such as Rule 144A
securities.

MANAGEMENT RISK

Management risk is the risk that Loomis Sayles' investment techniques could
fail to achieve the Fund's objective and could cause your investment in the
Fund to lose value. The Fund is subject to management risk because the Fund is
actively managed by Loomis Sayles. Loomis Sayles will apply its investment
techniques and risk analyses in making investment decisions for the Fund, but
there can be no guarantee that Loomis Sayles' decisions will produce the
desired results. For example, in some cases derivative and other investment
techniques may be
<PAGE>

unavailable or Loomis Sayles may determine not to use them, even under market
conditions where their use could have benefited the Fund.

CREDIT RISK

This is the risk that the issuer or the guarantor of a fixed income security,
or the counterparty to an over-the-counter transaction, will be unable or
unwilling to make timely payments of interest or principal or to otherwise
honor its obligations. The Funds may be subject to credit risk to the extent
that it invests in fixed income securities or over-the-counter transactions.

5
<PAGE>

EXPENSES OF THE FUND

The following table presents the expenses that you would pay if you buy and
hold shares of the Fund.

The Fund does not impose a sales charge, a redemption fee, or an exchange fee.

ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)

<TABLE>
<CAPTION>
Total
Annual Fee
Fund Waiver/
Management Distribution Other Operating Reimburse- Net
Fees (12b-1) Fees Expenses Expenses ment* Expenses*
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Mid Cap Growth Fund .75% none
------------------------------------------------------------------------------------
</TABLE>

*Reflects Loomis Sayles' contractual obligation to limit the Fund's expenses
through February 1, 2002.

EXAMPLE

The following example translates the "Total Annual Fund Operating Expenses"
column shown in the preceding table into dollar amounts. This example is
intended to help you compare the cost of investing in a Fund with the cost of
investing in other mutual funds.

This example makes certain assumptions. It assumes that you invest $10,000 in a
Fund for the time periods shown and then redeem all your shares at the end of
those periods. This example also assumes that your investment has a 5% return
each year and that the Fund's operating expenses remain the same. Please
remember that this example is hypothetical, so that your actual costs and
returns may be higher or lower.

<TABLE>
<CAPTION>
3 5 10
Fund/Class 1 Year* Years* Years* Years*
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Loomis Sayles Mid Cap Growth Fund
---------------------------------------------------------------
</TABLE>

Expenses shown for the Fund reflect the fee waiver/reimbursement for the first
year of each period.
<PAGE>

MORE INFORMATION ABOUT THE FUNDS' INVESTMENTS AND RISK CONSIDERATIONS

This section provides more information on the Fund's investments and risk
considerations. Except for any investment policies that are identified as
"fundamental," the investment objectives and the investment policies and
strategies of the Fund may be changed without a vote of the Fund's
shareholders.

The Fund may use any of the investment strategies described in this section.
Some of these investment strategies are principal investment strategies for the
Fund, while others are secondary investment strategies for the Fund.

TEMPORARY DEFENSIVE STRATEGIES

For temporary defensive purposes, the Fund may invest any portion of its assets
in cash or in any securities Loomis Sayles deems appropriate. Although Loomis
Sayles has the option to use these defensive strategies, Loomis Sayles may
choose not to use them for a variety of reasons, even in very volatile market
conditions. The Fund may miss certain investment opportunities if it uses
defensive strategies and thus may not achieve its investment objective.

PORTFOLIO TURNOVER

Portfolio turnover considerations will not limit Loomis Sayles' investment
discretion in managing the assets of the Fund. The Fund anticipates that its
portfolio turnover rate will vary significantly from time to time depending on
the volatility of economic and market conditions. High portfolio turnover may
generate higher costs and higher levels of taxable gains, both of which may
hurt the performance of your investment.

COMMON STOCKS AND OTHER EQUITY SECURITIES

Common stocks and their equivalents, together called "equity securities," are
generally volatile and more risky than some other forms of investment. Equity
securities of companies with relatively small market capitalizations may be
more volatile than the securities of larger, more established companies and
than the broad equity market indices.

GROWTH STOCKS Stocks of companies that Loomis Sayles believes have
earnings that will grow faster than the economy as a whole are known as
growth stocks. The Fund generally invests a significant portion of their
assets in growth stocks. Growth stocks typically trade at higher
multiples of current earnings than other stocks. As a result, the values
of growth stocks may be more sensitive to changes in current or expected
earnings than the values of other stocks. If Loomis Sayles' assessment of
the prospects for a company's earnings growth is wrong, or if its
judgment of how other investors will value the company's earnings growth
is wrong,

7
<PAGE>

then the price of that company's stock may fall or may not approach the
value that Loomis Sayles has placed on it.

WHEN-ISSUED SECURITIES

A "when-issued" security involves the Fund entering into a commitment to buy a
security before the security has been issued. The Fund's payment obligation and
the interest rate on the security are determined when the Fund enters into the
commitment. The security is typically delivered to the Fund 15 to 120 days
later. No interest accrues on the security between the time the Fund enters
into the commitment and the time the security is delivered. If the value of the
security being purchased falls between the time the Fund commits to buy it and
the payment date, the Fund may sustain a loss. The risk of this loss is in
addition to the Fund's risk of loss on the securities actually in its portfolio
at the time. In addition, when the Fund buys a security on a when-issued basis,
it is subject to the risk that market rates of interest will increase before
the time the security is delivered, with the result that the yield on the
security delivered to the Fund may be lower than the yield available on other,
comparable securities at the time of delivery. If the Fund has outstanding
obligations to buy when-issued securities, it will segregate liquid assets at
its custodian bank in an amount sufficient to satisfy these obligations.

RULE 144A SECURITIES

FOREIGN SECURITIES

Securities of issuers organized or headquartered outside the United States are
foreign securities. Foreign securities may present risks not associated with
investments in comparable securities of U.S. issuers. There may be less
information publicly available about a foreign corporate or governmental issuer
than about a U.S. issuer, and foreign corporate issuers are generally not
subject to accounting, auditing, and financial reporting standards and
practices comparable to those in the United States. The securities of some
foreign issuers are less liquid and at times more volatile than securities of
comparable U.S. issuers. Foreign brokerage commissions and securities custody
costs are often higher than in the United States. With respect to certain
foreign countries, there is a possibility of governmental expropriation of
assets, confiscatory taxation, political or financial instability, and
diplomatic developments that could affect the value of investments in those
countries. The Fund's receipt of interest on foreign government securities may
depend on the availability of tax or other revenues to satisfy the issuer's
obligations.
<PAGE>

The Fund's investments in foreign securities may include investments in
countries whose economies or securities markets are not yet highly developed.
Special considerations associated with these investments (in addition to the
considerations regarding foreign investments generally) may include, among
others, greater political uncertainties, an economy's dependence on revenues
from particular commodities or on international aid or development assistance,
currency transfer restrictions, highly limited numbers of potential buyers for
such securities, and delays and disruptions in securities settlement
procedures.

Since most foreign securities are denominated in foreign currencies or traded
primarily in securities markets in which settlements are made in foreign
currencies, the value of these investments and the net investment income
available for distribution to shareholders of the Fund investing in these
securities may be affected by changes in currency exchange rates, exchange
control regulations, or foreign withholding taxes. Changes in the value
relative to the U.S. dollar of a foreign currency in which the Fund's holdings
are denominated will result in a change in the U.S. dollar value of the Fund's
assets and the Fund's income available for distribution.

In addition, although part of the Fund's income may be received or realized in
foreign currencies, the Fund will be required to compute and distribute its
income in U.S. dollars. Therefore, if the value of a currency relative to the
U.S. dollar declines after the Fund's income has been earned in that currency,
translated into U.S. dollars, and declared as a dividend, but before payment of
the dividend, the Fund could be required to liquidate portfolio securities to
pay the dividend. Similarly, if the value of a currency relative to the U.S.
dollar declines between the time the Fund accrues expenses in U.S. dollars and
the time such expenses are paid, the amount of foreign currency required to be
converted into U.S. dollars will be greater than the equivalent amount in
foreign currency of the expenses at the time they were incurred.

In determining whether to invest assets of the Fund in securities of a
particular foreign issuer, Loomis Sayles will consider the likely effects of
foreign taxes on the net yield available to the Fund and its shareholders.
Compliance with foreign tax law may reduce the Fund's net income available for
distribution to shareholders.

FOREIGN CURRENCY HEDGING TRANSACTIONS

Foreign currency hedging transactions are an effort to protect the value of
specific portfolio positions or to anticipate changes in relative values of
currencies in which current or future Fund portfolio holdings are denominated
or quoted. For example, to protect against a change in the foreign currency
exchange rate between the date on which the Fund contracts to purchase or sell
a security and the settlement date for the purchase or sale, or to "lock in"
the equivalent of a dividend or interest payment in another currency, the Fund
might purchase or sell a foreign currency on a spot (that is, cash) basis at
the prevailing spot rate. If conditions warrant, the Fund may also enter into
private contracts to purchase or sell foreign currencies at a future date
("forward contracts"). The Fund might also

9
<PAGE>

purchase exchange-listed and over-the-counter call and put options on foreign
currencies. Over-the-counter currency options are generally less liquid than
exchange-listed options and will be treated as illiquid assets. The Fund may
not be able to dispose of over-the-counter options readily.

Foreign currency transactions involve costs and may result in losses.

REPURCHASE AGREEMENTS

A repurchase agreement involves the Fund buying securities from a seller,
usually a bank or brokerage firm, with the understanding that the seller will
repurchase the securities at a higher price at a later date. Such transactions
afford an opportunity for the Fund to earn a return on available cash at
minimal market risk, although the Fund may be subject to various delays and
risks of loss if the seller is unable to meet its obligations to repurchase.

REAL ESTATE INVESTMENT TRUSTS

Real estate investment trusts (REITs) involve certain unique risks in addition
to those risks associated with investing in the real estate industry in general
(such as possible declines in the value of real estate, lack of availability of
mortgage funds, or extended vacancies of property). Equity REITs may be
affected by changes in the value of the underlying property owned by the REITs,
while mortgage REITs may be affected by the quality of any credit extended.
REITs are dependent upon management skills, are not diversified, and are
subject to heavy cash flow dependency, risks of default by borrowers, and self-
liquidation. REITs are also subject to the possibilities of failing to qualify
for tax-free pass-through of income under the Internal Revenue Code of 1986, as
amended, and failing to maintain their exemptions from registration under the
Investment Company Act of 1940.

REITs may have limited financial resources, may trade less frequently and in a
limited volume, and may be subject to more abrupt or erratic price movements
than larger securities. The Fund's investment in a REIT may require the Fund to
accrue and distribute income not yet received or may result in the Fund making
distributions that constitute a return of capital to Fund shareholders for
federal income tax purposes. In addition, distributions by the Fund from REITs
will not qualify for the corporate dividends-received deduction.

OPTIONS AND FUTURES TRANSACTIONS

Options and futures transactions involve the Fund buying, selling, or writing
options (or buying or selling futures contracts) on securities, securities
indices, or currencies. The Fund may engage in these transactions either to
enhance investment return or to hedge against changes in the value of other
assets that the Fund owns or intends to acquire. Options and futures fall into
the broad category of financial instruments known as "derivatives" and involve
special risks. Use of options or futures for other than hedging purposes may be
considered a speculative activity, involving greater risks than are involved in
hedging.
<PAGE>

Options can generally be classified as either "call" or "put" options. There
are two parties to a typical options transaction: the "writer" and the "buyer."
A call option gives the buyer the right to buy a security or other asset (such
as an amount of currency or a futures contract) from, and a put option gives
the buyer the right to sell a security or other asset to, the option writer at
a specified price, on or before a specified date. The buyer of an option pays a
premium when purchasing the option, which reduces the return on the underlying
security or other asset if the option is exercised, and results in a loss if
the option expires unexercised. The writer of an option receives a premium from
writing an option, which may increase its return if the option expires or is
closed out at a profit. If the Fund as the writer of an option is unable to
close out an unexpired option, it must continue to hold the underlying security
or other asset until the option expires, to "cover" its obligation under the
option.

A futures contract creates an obligation by the seller to deliver and the buyer
to take delivery of the type of instrument or cash at the time and in the
amount specified in the contract. Although many futures contracts call for the
delivery (or acceptance) of the specified instrument, futures are usually
closed out before the settlement date through the purchase (or sale) of a
comparable contract. If the price of the sale of the futures contract by the
Fund is less than the price of the offsetting purchase, the Fund will realize
the loss.

The value of options purchased by the Fund and futures contracts held by the
Fund may fluctuate based on a variety of market and economic factors. In some
cases, the fluctuations may offset (or be offset by) changes in the value of
securities held in the Fund's portfolio. All transactions in options and
futures involve the possible risk of loss to the Fund of all or a significant
part of the value of its investment. In some cases, the risk of loss may exceed
the amount of the Fund's investment. When the Fund writes a call option or
sells a futures contract without holding the underlying securities, currencies,
or futures contracts, its potential loss is unlimited. The Fund will be
required, however, to set aside with its custodian bank liquid assets in
amounts sufficient at all times to satisfy its obligations under options and
futures contracts.

The successful use of options and futures will usually depend on Loomis Sayles'
ability to forecast stock market, currency, or other financial market movements
correctly. The Fund's ability to hedge against adverse changes in the value of
securities held in its portfolio through options and futures also depends on
the degree of correlation between changes in the value of futures or options
positions and changes in the values of the portfolio securities. The successful
use of futures and exchange-traded options also depends on the availability of
a liquid secondary market to enables the Fund to close its positions on a
timely basis. There can be no assurance that such a market will exist at any
particular time. In the case of options that are not traded on an exchange
("over-the-counter" options), the Fund is at risk that the other party to the
transaction will default on its obligations, or will not permit the Fund to
terminate the transaction before its scheduled maturity.

11
<PAGE>

The options and futures markets of foreign countries are small compared to
those of the U.S. and consequently are characterized in most cases by less
liquidity than U.S. markets. In addition, foreign markets may be subject to
less detailed reporting requirements and regulatory controls than U.S. markets.
Furthermore, investments in options in foreign markets are subject to many of
the same risks as other foreign investments. See "Foreign Securities" above.

<PAGE>

MANAGEMENT

INVESTMENT ADVISER

The Board of Trustees of Loomis Sayles Investment Trust oversees the Fund and
supervises the Fund's investment adviser, Loomis, Sayles & Company, L.P.
("Loomis Sayles"), which is located at One Financial Center, Boston,
Massachusetts.

Loomis Sayles was founded in 1926 and is one of the country's oldest and
largest investment firms. Loomis Sayles is responsible for making investment
decisions for the Fund and for managing the Fund's other affairs and business,
including providing executive and other personnel for the management of the
Fund.

As previously described in the "Expenses of the Fund" section, the Fund pays
Loomis Sayles a monthly investment advisory fee, also known as a management fee
at an annual rate of .75% of its average net assets for these services. Certain
expenses incurred by the Fund would have been higher if not for Loomis Sayles'
contractual obligation to limit the Fund's expense through February , 2002.

<TABLE>
<CAPTION>
Fund Management Fee
-------------------------------------------------
<S> <C>
Loomis Sayles Mid Cap Growth Fund .75%
-------------------------------------------------
</TABLE>

PORTFOLIO MANAGERS

Christopher R. Ely, David L. Smith, and Philip C. Fine, Vice Presidents of
Loomis Sayles Investment Trust and of Loomis Sayles, have served as portfolio
managers of the Fund since 1999. Prior to joining Loomis Sayles in 1996, Mr.
Ely was senior vice president and portfolio manager, and Mr. Fine and Mr. Smith
were vice presidents and portfolio managers, of Keystone Investment Management
Company, Inc.

13
<PAGE>

GENERAL INFORMATION

PRICING

The price of the Fund's shares is based on its net asset value ("NAV"). The NAV
per share of the Fund equals the total value of its assets, less its
liabilities, divided by the number of outstanding shares. Shares are valued as
of the close of regular trading on the New York Stock Exchange on each day the
Exchange is open for trading.

The Fund values its investments for which market quotations are readily
available at market value. The Fund values short-term investments that will
mature within 60 days at amortized cost, which approximates market value. The
Fund values all other investments and assets at fair value.

HOW TO PURCHASE SHARES

You can buy shares of the Fund by submitting a completed application form and
payment to State Street Bank and Trust Company at the following address:

State Street Bank and Trust Company
P.O. Box 1978
Boston, MA 02105
Attention: Loomis Sayles Investment Trust

For an application form, or if you have questions, you may call Loomis Sayles
at 888-226-9699.

The Fund sells its shares at the NAV next calculated after State Street Bank
and Trust Company receives a properly completed investment order. State Street
Bank and Trust Company generally must receive your properly completed order
before the close of regular trading on the New York Stock Exchange for your
shares to be bought or sold at the Fund's NAV on that day.

Shares of the Fund may be purchased by (1) cash, (2) exchanging securities
acceptable to Loomis Sayles, or (3) a combination of such methods. The exchange
of securities for shares of the Fund is subject to various restrictions, as
described in the Statement of Additional Information.

All purchases made by check should be in U.S. dollars and made payable to State
Street Bank and Trust Company. The Fund will not accept checks made payable to
anyone other than State Street Bank and Trust Company (including checks made
payable to you) or starter checks. When you make an investment by check or by
periodic account investment, you will not be permitted to redeem that
investment until it has cleared or has been in your account for 15 days.

After your account has been established, you may send subsequent investments
directly to State Street Bank and Trust Company at the above address. Please
include either the account identification slip detached from your account
statement or a note containing the Fund's name, your account number and your
name, address, telephone number, and social security number.
<PAGE>

You also may wire subsequent investments by using the following wire
instructions:

State Street Bank and Trust Company
Boston, MA 02101
ABA No. 011000028
DDA 4133-408-7
Mutual Funds f/b/o Loomis Sayles Investment Trust

Loomis Sayles Mid Cap Growth
(Your Name)
(Your account number)

Your bank may charge a fee for transmitting funds by wire.

The Fund may periodically close to new purchases of shares or refuse any order
to buy shares if the Fund determines that doing so would be in the best
interests of the Fund and its shareholders. In particular, the Fund will
ordinarily reject any purchase order that appears to be part of a pattern of
transactions intended to take advantage of short-term swings in the market.

The minimum initial investment for the Fund is $2,500,000. Each subsequent
investment must be at least $50,000. Loomis Sayles Investment Trust reserves
the right to waive these minimums in its sole discretion.

HOW TO REDEEM SHARES

You can redeem shares of the Fund any day the New York Stock Exchange is open.
If you are redeeming shares that you purchased within the past 15 days by
check, your redemption will be delayed until your payment for the shares
clears.

Your redemptions generally will be sent to you via first class mail on the
business day after your request is received in good order. Because large
redemptions are likely to require liquidation by the Fund of portfolio
holdings, payment for large redemptions may be delayed for up to seven days to
provide for orderly liquidation of such holdings. Under unusual circumstances,
the Fund may suspend redemptions or postpone payment for more than seven days.
Although most redemptions are made in cash, as described in the Statement of
Additional Information, the Fund reserves the right to redeem shares in kind.

You may make redemptions from the Fund by sending a written request that
includes the Fund's name, the exact name(s) in which the shares are registered,
your address, telephone number, account number, social security number, and the
number of shares or dollar amount to be redeemed to State Street Bank and Trust
Company at the following address:

State Street Bank and Trust Company
P.O. Box 1978
Boston, MA 02105
Attention: Loomis Sayles Investment Trust

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<PAGE>

If you have certificates for the shares you want to sell, you must include them
along with completed stock power forms.

All owners of the shares must sign the written request in the exact names in
which the shares are registered. The owners should indicate any special
capacity in which they are signing (such as trustee or custodian or on behalf
of a partnership, corporation, or other entity).

REDEMPTION BY THE FUND If you own fewer shares than the minimum set by the
Trustees, the Fund may redeem your shares and send you the proceeds.

DIVIDENDS AND DISTRIBUTIONS

The Fund pays any net investment income to shareholders as dividends annually.
The Fund also distributes all of its net realized capital gains after applying
any capital loss carryovers. Any capital gains distributions normally are made
annually in December, but may be made more frequently as deemed advisable by
the Trustees. The Trustees may change the frequency with which the Fund
declares or pays dividends.

You may choose to:
. Reinvest all distributions in additional shares.
. Have checks sent to the address of record for the amount of the distributions
or have the distributions transferred through Automated Clearing House (ACH)
to a bank account of your choice.

If you do not select an option when you open your account, all distributions
will be reinvested.

TAX CONSEQUENCES

Because the Fund is designed primarily for tax-exempt investors, such as
pension plans, endowments, and foundations, the Fund is not managed with a view
to reducing taxes. For federal income tax purposes, if the shareholder is
subject to tax, distributions of investment income from the Fund are taxable as
ordinary income. Taxes on distributions of capital gains are determined by how
long the Fund owned the investments that generated the capital gains, rather
than by how long you have owned your shares of the Fund. Distributions of
short-term capital gains, which result from the sale of securities that the
Fund had held for one year or less, are taxable as ordinary income. Properly
designated distributions of long-term capital gains, which result from the sale
of securities that the Fund had held for more than one year, are taxable as
long-term capital gains (taxable at a maximum rate of 20%).

Distributions of income and capital gains are taxable whether you received them
in cash or reinvested them in additional shares. If a dividend or distribution
is made shortly after you purchase shares of the Fund, while in effect a return
of capital to you, the dividend or distribution is taxable, as described above.
This is called "buying a dividend" and should be avoided, if possible.
<PAGE>

In addition to income tax on the Fund's distributions, any gain that results if
you sell or exchange your shares generally is subject to income tax. You should
consult your tax adviser for more information on how an investment in the Fund
affects your own tax situation, including possible foreign, state and local
taxes.

FOR MORE INFORMATION ABOUT THE FUND:

The Fund's statement of additional information (SAI) and annual and semi-annual
reports to shareholders provide additional information about the Fund. The SAI
and the auditor's report and financial statements included in the Fund's most
recent annual report to shareholders are incorporated by reference into this
Prospectus, which means that they are part of this Prospectus for legal
purposes.

In the Fund's annual report, you will find a discussion of the market
conditions and investment strategies that significantly affected the Fund's
performance during the last fiscal year.

You may get free copies of these materials, request other information about the
Fund and other Loomis Sayles Investment Trust Funds, or make shareholder
inquiries by contacting your financial adviser, by visiting the Loomis Sayles
web site at http://www.loomissayles.com, or by calling Loomis Sayles toll-free
at 888-226-9699.

You may review and copy information about the Fund, including the SAI, at the
Securities and Exchange Commission's Public Reference Room in Washington, DC.
You may call the Commission at 202-942-8090 for information about the operation
of the Public Reference Room. You also may access reports and other information
about the Fund on the EDGAR Database on the Commission's web site at
http://www.sec.gov. You may obtain these reports and other information about
the Fund, with payment of a duplicating fee, by writing the Public Reference
Section of the Commission, Washington, DC 20549-0102, or via e-mail
([email protected]). You may need to refer to the Fund's file number, which is
listed at the bottom of this page.

Loomis Sayles Investment Trust

One Financial Center

Boston, MA 02111

888-226-9699

www.loomissayles.com

File No. 811-8282

17
<PAGE>

[LOGO]

STATEMENT OF ADDITIONAL
INFORMATION

MARCH , 2001

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. THIS STATEMENT
OF ADDITIONAL INFORMATION RELATES TO THE PROSPECTUS OR PROSPECTUSES OF EACH
SERIES ("FUND") OF LOOMIS SAYLES INVESTMENT TRUST DATED MARCH 1, 2001, AS
REVISED FROM TIME TO TIME. EACH REFERENCE TO THE PROSPECTUS IN THIS STATEMENT
OF ADDITIONAL INFORMATION SHALL INCLUDE ALL OF THE FUNDS' CURRENT PROSPECTUSES,
UNLESS OTHERWISE NOTED. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ
IN CONJUNCTION WITH THE APPLICABLE PROSPECTUS. A COPY OF EACH PROSPECTUS MAY BE
OBTAINED FROM LOOMIS SAYLES INVESTMENT TRUST, ONE FINANCIAL CENTER, BOSTON,
MASSACHUSETTS 02111.

LOOMIS SAYLES INVESTMENT TRUST

.Loomis Sayles California Tax-Free Income Fund
.Loomis Sayles Core Fixed Income 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

.Loomis Sayles Mid Cap Growth Fund
.Loomis Sayles Provident Fund
.Loomis Sayles Small Company Growth Fund
.Loomis Sayles Small Company Value Fund
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
THE TRUST.................................................................. 1

INVESTMENT STRATEGIES AND RISKS............................................ 1

Investment Restrictions.................................................. 1

Investment Strategies.................................................... 3

U.S. Government Securities............................................... 3

When-Issued Securities................................................... 5

Zero Coupon Bonds........................................................ 5

Repurchase Agreements.................................................... 5

Real Estate Investment Trusts............................................ 6

Rule 144A Securities..................................................... 6

Foreign Currency Transactions............................................ 6

Options.................................................................. 7

Small Companies.......................................................... 9

California Tax-Exempt Securities......................................... 9

MANAGEMENT OF THE TRUST.................................................... 12

INVESTMENT ADVISORY AND OTHER SERVICES..................................... 18

PORTFOLIO TRANSACTIONS AND BROKERAGE....................................... 22

DESCRIPTION OF THE TRUST................................................... 25

Voting Rights............................................................ 25

Shareholder and Trustee Liability........................................ 26

How to Buy Shares........................................................ 27

Net Asset Value.......................................................... 27

SHAREHOLDER SERVICES....................................................... 28

Open Accounts............................................................ 28

Redemptions.............................................................. 28

INCOME DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX STATUS................ 29

FINANCIAL STATEMENTS....................................................... 33

CALCULATION OF YIELD AND TOTAL RETURN...................................... 33

PERFORMANCE COMPARISONS.................................................... 33

PERFORMANCE DATA........................................................... 38

APPENDIX A--PUBLICATIONS AND OUTLETS THAT MAY CONTAIN FUND INFORMATION..... 40

APPENDIX B--ADVERTISING AND PROMOTIONAL LITERATURE......................... 42
</TABLE>

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<PAGE>

THE TRUST

Loomis Sayles Investment Trust (the "Trust") is a diversified, registered,
open-end management investment company. The Trust includes nine series
(collectively, the "Funds," with each series being known as a "Fund"). The
Trust was organized as a Massachusetts business trust on December 23, 1993.

Shares of the Funds are freely transferable and entitle shareholders to
receive dividends as determined by the Trust's Board of Trustees and to cast a
vote for each share held at shareholder meetings. The Trust generally does not
hold shareholder meetings and expects to do so only when required by law.
Shareholders may call meetings to consider removal of the Trust's trustees.

INVESTMENT STRATEGIES AND RISKS

The investment objective and principal investment strategies of each Fund are
described in the Prospectus. The investment policies of each Fund set forth in
the Prospectus and in this Statement of Additional Information may be changed
by the Trust's Board of Trustees without shareholder approval, except that the
investment objective of each Fund as set forth in the Prospectus and any policy
explicitly identified as "fundamental" may not be changed without the approval
of the holders of a majority of the outstanding shares of the relevant Fund
(which in the Prospectus and this Statement of Additional Information means the
lesser of (i) 67% of the shares of that Fund present at a meeting at which more
than 50% of the outstanding shares are present or represented by proxy or (ii)
more than 50% of the outstanding shares). Except in the case of the 15%
limitation on illiquid securities, the percentage limitations set forth below
and in the Prospectus will apply at the time a security is purchased and will
not be considered violated unless an excess or deficiency occurs or exists
immediately after and as a result of such purchase.

INVESTMENT RESTRICTIONS

In addition to its investment objective and policies set forth in the
Prospectus, the following investment restrictions are policies of each Fund
(and those marked with an asterisk are fundamental policies of each Fund):

Each Fund will not:

*(1) Act as underwriter, except to the extent that, in connection with the
disposition of portfolio securities, it may be deemed to be an underwriter
under certain federal securities laws.

*(2) Invest in oil, gas, or other mineral leases, rights, or royalty
contracts, or in real estate, commodities, or commodity contracts. (This
restriction does not prevent any Fund from engaging in transactions in futures
contracts relating to securities indices, interest rates, or financial
instruments or options, or from investing in issuers that invest or deal in the
foregoing types of assets or from purchasing securities that are secured by
real estate.)

*(3) Make loans, except to the extent permitted under the Investment Company
Act of 1940, as amended (the "1940 Act"). (For purposes of this investment
restriction, neither (i) entering into repurchase agreements nor (ii)
purchasing debt obligations in which a Fund may invest consistent with its
investment policies is considered the making of a loan.)

1
<PAGE>

*(4) Change its classification pursuant to Section 5(b) of the 1940 Act from
a "diversified" to "non-diversified" management investment company.

*(5) Purchase any security (other than U.S. Government securities) if, as a
result, more than 25% of the Fund's assets (taken at current value) would be
invested in any one industry (in the utilities category, gas, electric, water,
and telephone companies will be considered as being in separate industries).

*(6) Borrow money in excess of 10% of its assets (taken at cost) or 5% of its
assets (taken at current value), whichever is lower, nor borrow any money
except as a temporary measure for extraordinary or emergency purposes; however,
the Funds' use of reverse repurchase agreements and "dollar roll" arrangements
shall not constitute borrowing by the Fund for purposes of this restriction.

(7) Purchase any illiquid security, including any security that is not
readily marketable, if, as a result, more than 15% of the Fund's net assets
(based on current value) would then be invested in such securities.

*(8) Issue senior securities other than any borrowing permitted by
restriction (6) above. (For the purposes of this restriction, none of the
following is deemed to be a senior security: any pledge, mortgage,
hypothecation, or other encumbrance of assets; any collateral arrangements with
respect to options, futures contracts, and options on futures contracts and
with respect to initial and variation margin; and the purchase or sale of or
entry into options, forward contracts, futures contracts, options on futures
contracts, swap contracts, or any other derivative investments to the extent
that Loomis, Sayles & Company, L.P. ("Loomis Sayles") determines that the Fund
is not required to treat such investments as senior securities pursuant to the
pronouncements of the Securities and Exchange Commission (the "SEC") or its
staff.)

The Funds have other non-fundamental investment parameters, as listed below.

Loomis Sayles California Tax-Free Income Fund

The Fund normally will invest at least 80% of its assets in issues rated A or
better by Standard & Poor's or Moody's Investors Service, Inc. At the time of
purchase, all issues will be rated at least BBB by Standard & Poor's or Baa by
Moody's Investors Service, Inc., or, if unrated, determined by Loomis Sayles to
be of equivalent quality.

Loomis Sayles Core Fixed Income Fund

The Fund normally will invest at least 65% of its assets in fixed income
securities.

Loomis Sayles Fixed Income Fund

The Fund normally will invest at least 65% of its assets in fixed income
securities.

Loomis Sayles High Yield Fixed Income Fund

The Fund normally will invest at least 65% of its assets in lower rated fixed
income securities ("junk bonds").

Loomis Sayles Intermediate Duration Fixed Income Fund

The Fund normally will invest at least 65% of its assets in fixed income
securities and normally will maintain a weighted average duration of two to
five years.

2
<PAGE>

Loomis Sayles Investment Grade Fixed Income Fund

The Fund normally will invest at least 90% of its assets in investment grade
fixed income securities.

Loomis Sayles Mid Cap Growth Fund

The Fund will invest at least 65% of its assets in equity securities of
companies with market capitalizations that fall within the capitalization range
of companies included in the Russell Mid-Cap Growth Index.

Loomis Sayles Provident Fund

The Fund normally will invest at least 65% of its assets in common stocks and
other equity securities.

Loomis Sayles Small Company Growth Fund

Loomis Sayles Small Company Value Fund

The Fund normally will invest at least 65% of its assets in equity securities
of companies with market capitalizations that fall within the capitalization
range of the Russell 2000 Index and may invest up to 35% of its assets in
larger companies.
The Funds intend, based on the views of the staff of the SEC, to restrict
their investments, if any, in repurchase agreements maturing in more than seven
days, together with other investments in illiquid securities, to the percentage
permitted by restriction (7) above.

Although authorized to invest in restricted securities, the Funds, as a
matter of non-fundamental operating policy, currently do not intend to invest
in such securities, except Rule 144A securities.

For purposes of the foregoing restrictions, the Funds do not consider a swap
contract on one or more securities, indices, currencies or interest rates to be
a commodity or a commodity contract, nor, consistent with the position of the
staff of the Securities and Exchange Commission, do the Funds consider such
swap contracts to involve the issuance of a senior security, provided the
relevant Fund segregates with its custodian liquid assets (marked to market on
a daily basis) sufficient to meet its obligations under such contracts.

INVESTMENT STRATEGIES

Except to the extent prohibited by a Fund's investment policies as set forth
in the Prospectus or in this Statement of Additional Information, the
investment strategies used by Loomis Sayles in managing each of the Funds may
include investments in the types of securities described below.

U.S. GOVERNMENT SECURITIES

U.S. Government securities include direct obligations of the U.S. Treasury,
as well as securities issued or guaranteed by U.S. Government agencies,
authorities, and instrumentalities, including,

3
<PAGE>

among others, the Government National Mortgage Association, the Federal Home
Loan Mortgage Corporation, the Federal National Mortgage Association, the
Federal Housing Administration, the Resolution Funding Corporation, the Federal
Farm Credit Banks, the Federal Home Loan Bank, the Tennessee Valley Authority,
the Student Loan Marketing Association, and the Small Business Administration.
More detailed information about some of these categories of U.S. Government
securities follows.

U.S. Treasury Bills--U.S. Treasury Bills are direct obligations of the U.S.
Treasury that are issued in maturities of one year or less. No interest is paid
on Treasury bills; instead, they are issued at a discount and repaid at full
face value when they mature. They are backed by the full faith and credit of
the U.S. Government.

U.S. Treasury Notes and Bonds--U.S. Treasury Notes and Bonds are direct
obligations of the U.S. Treasury that are issued in maturities that vary
between one and forty years, with interest normally payable every six months.
They are backed by the full faith and credit of the U.S. Government.

"Ginnie Maes"--Ginnie Maes are debt securities issued by a mortgage banker or
other mortgagee that represent an interest in a pool of mortgages insured by
the Federal Housing Administration or the Farmer's Home Administration or
guaranteed by the Veterans Administration. The Government National Mortgage
Association ("GNMA") guarantees the timely payment of principal and interest
when such payments are due, whether or not these amounts are collected by the
issuer of these certificates on the underlying mortgages. An assistant attorney
general of the United States has rendered an opinion that the guarantee by GNMA
is a general obligation of the United States backed by its full faith and
credit. Mortgages included in single family or multi-family residential
mortgage pools backing an issue of Ginnie Maes have a maximum maturity of up to
30 years. Scheduled payments of principal and interest are made to the
registered holders of Ginnie Maes (such as the Funds) each month. Unscheduled
prepayments may be made by homeowners or as a result of a default. Prepayments
are passed through to the registered holder of Ginnie Maes along with regular
monthly payments of principal and interest.

"Fannie Maes"--The Federal National Mortgage Association ("FNMA") is a
government-sponsored corporation owned entirely by private stockholders that
purchases residential mortgages from a list of approved seller/servicers.
Fannie Maes are pass-through securities issued by FNMA that are guaranteed as
to timely payment of principal and interest by FNMA but are not backed by the
full faith and credit of the U.S. Government.

"Freddie Macs"--The Federal Home Loan Mortgage Corporation ("FHLMC") is a
corporate instrumentality of the U.S. Government. Freddie Macs are
participation certificates issued by FHLMC that represent an interest in
residential mortgages from FHLMC's national portfolio. FHLMC guarantees the
timely payment of interest and ultimate collection of principal, but Freddie
Macs are not backed by the full faith and credit of the U.S. Government.

The yields available from U.S. Government securities are generally lower than
the yields available from corporate fixed-income securities. Like other fixed-
income securities, however, the values of U.S. Government securities change as
interest rates fluctuate. Fluctuations in the value of portfolio securities
will not affect interest income on existing portfolio securities but will be
reflected in the Fund's net asset value.

4
<PAGE>

WHEN-ISSUED SECURITIES

When-issued securities are agreements with banks or broker-dealers for the
purchase or sale of securities at an agreed-upon price on a specified future
date. Such agreements might be entered into, for example, when a Fund that
invests in fixed income securities anticipates a decline in interest rates and
is able to obtain a more advantageous yield by committing currently to purchase
securities to be issued later. When a Fund purchases securities on a when-
issued or delayed-delivery basis, it is required to create a segregated account
with the Trust's custodian and to maintain in that account liquid assets in an
amount equal to or greater than, on a daily basis, the amount of the Fund's
when-issued or delayed-delivery commitments. Each Fund will make commitments to
purchase on a when-issued or delayed-delivery basis only securities meeting
that Fund's investment criteria. The Fund may take delivery of these securities
or, if it is deemed advisable as a matter of investment strategy, the Fund may
sell these securities before the settlement date. When the time comes to pay
for when-issued or delayed-delivery securities, the Fund will meet its
obligations from then available cash flow or the sale of securities, or from
the sale of the when-issued or delayed-delivery securities themselves (which
may have a value greater or less than the Fund's payment obligation).

ZERO COUPON BONDS

Zero coupon bonds are debt obligations that do not entitle the holder to any
periodic payments of interest either for the entire life of the obligation or
for an initial period after the issuance of the obligation. Such bonds are
issued and traded at a discount from their face amounts. The amount of the
discount varies depending on such factors as the time remaining until maturity
of the bonds, prevailing interest rates, the liquidity of the security, and the
perceived credit quality of the issuer. The market prices of zero coupon bonds
generally are more volatile than the market prices of securities that pay
interest periodically and are likely to respond to changes in interest rates to
a greater degree than non-zero coupon bonds having similar maturities and
credit quality. In order to satisfy a requirement for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended (the "Code"), each Fund must distribute each year at least 90% of its
net investment income, including the original issue discount accrued on zero
coupon bonds. Because a Fund investing in zero coupon bonds will not on a
current basis receive cash payments from the issuer in respect of accrued
original issue discount, the Fund may have to distribute cash obtained from
other sources in order to satisfy the 90% distribution requirement under the
Code. Such cash might be obtained from selling other portfolio holdings of the
Fund. In some circumstances, such sales might be necessary in order to satisfy
cash distribution requirements even though investment considerations might
otherwise make it undesirable for the Fund to sell such securities at such
time.

REPURCHASE AGREEMENTS

Under a repurchase agreement, a Fund purchases a security and obtains a
simultaneous commitment from the seller (a bank or, to the extent permitted by
the 1940 Act, a recognized securities dealer) to repurchase the security at an
agreed upon price and date (usually seven days or less from the date of
original purchase). The resale price is in excess of the purchase price and
reflects an agreed upon market rate unrelated to the coupon rate on the
purchased security. Such transactions afford the Fund the opportunity to earn a
return on temporarily available cash at minimal market risk. While the
underlying security may be a bill, certificate of indebtedness, note, or bond
issued by an agency, authority, or instrumentality of the U.S. Government, the
obligation of the seller is not guaranteed by the U.S. Government, and there is
a risk that the seller may fail to

5
<PAGE>

repurchase the underlying security. In such event, the Fund would attempt to
exercise rights with respect to the underlying security, including possible
disposition in the market. However, the Fund may be subject to various delays
and risks of loss, including (a) possible declines in the value of the
underlying security during the period while the Fund seeks to enforce its
rights thereto, (b) possible reduced levels of income and lack of income during
this period, and (c) inability to enforce rights and the expenses involved in
attempted enforcement.

REAL ESTATE INVESTMENT TRUSTS

REITs involve certain unique risks in addition to those risks associated with
investing in the real estate industry in general (such as possible declines in
the value of real estate, lack of availability of mortgage funds, or extended
vacancies of property). Equity REITs may be affected by changes in the value of
the underlying property owned by the REITs, while mortgage REITs may be
affected by the quality of any credit extended. REITs are dependent upon
management skills, are not diversified, and are subject to heavy cash flow
dependency, risks of default by borrowers, and self-liquidation. REITs are also
subject to the possibilities of failing to qualify for tax-free pass-through of
income under the Code and failing to maintain their exemptions from
registration under the 1940 Act.

Investment in REITs involves risks similar to those associated with investing
in small capitalization companies. REITs may have limited financial resources,
may trade less frequently and in a limited volume, and may be subject to more
abrupt or erratic price movements than larger securities.

RULE 144A SECURITIES

Rule 144A securities are privately offered securities that can be resold only
to certain qualified institutional buyers. Rule 144A securities are treated as
illiquid, unless Loomis Sayles has determined, under guidelines established by
the Trust's trustees, that the particular issue of Rule 144A securities is
liquid. Under the guidelines, Loomis Sayles considers such factors as: (1) the
frequency of trades and quotes for a security; (2) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers; (3) dealer undertakings to make a market in the security; and (4)
the nature of the security and the nature of the marketplace trades in the
security.

FOREIGN CURRENCY TRANSACTIONS

Since investment in securities of foreign issuers will usually involve
currencies of foreign countries, and since a Fund may temporarily hold funds in
bank deposits in foreign currencies during the course of investment programs,
the value of the assets of a Fund as measured in U.S. dollars may be affected
by changes in currency exchange rates and exchange control regulations, and a
Fund may incur costs in connection with conversion between various currencies.

A Fund may enter into forward contracts under two circumstances. First, when
a Fund enters into a contract for the purchase or sale of a security
denominated or traded in a market in which settlement is made in a foreign
currency, it may desire to "lock in" the U.S. dollar price of the security. By
entering into a forward contract for the purchase or sale, for a fixed amount
of dollars, of the amount of foreign currency involved in the underlying
transactions, the Fund will be able to protect itself against a possible loss
resulting from an adverse change in the relationship between the

6
<PAGE>

U.S. dollar and the subject foreign currency during the period between the date
on which the investment is purchased or sold and the date on which payment is
made or received.

Second, when Loomis Sayles believes that the currency of a particular country
may suffer a substantial decline against another currency, it may enter into a
forward contract to sell, for a fixed amount of another currency, the amount of
the first currency approximating the value of some or all of the Fund's
portfolio investments denominated in the first currency. The precise matching
of the forward contract amounts and the value of the securities involved will
not generally be possible since the future value of such securities in a
currency will change as a consequence of market movements in the value of those
investments between the date the forward contract is entered into and the date
it matures.

The Funds generally will not enter into forward contracts with a term of
greater than one year.

Options on foreign currencies are similar to forward contracts, except that
one party to the option (the holder) is not contractually bound to buy or sell
the specified currency. Instead, the holder has discretion whether to
"exercise" the option and thereby require the other party to buy or sell the
currency on the terms specified in the option. Options transactions involve
transaction costs and, like forward contract transactions, involve the risk
that the other party may default on its obligations (if the options are not
traded on an established exchange) and the risk that expected movements in the
relative value of currencies may not occur, resulting in an imperfect hedge or
a loss to the Fund.

Each Fund, in conjunction with its transactions in forward contracts,
options, and futures, will maintain in a segregated account with its custodian
liquid assets with a value, marked to market on a daily basis, sufficient to
satisfy the Fund's outstanding obligations under such contracts, options, and
futures.

OPTIONS

An option entitles the holder to receive (in the case of a call option) or to
sell (in the case of a put option) a particular security at a specified
exercise price. An "American style" option allows exercise of the option at any
time during the term of the option. A "European style" option allows an option
to be exercised only at the end of its term. Options may be traded on or off an
established securities exchange.

If the holder of an option wishes to terminate its position, it may seek to
effect a closing sale transaction by selling an option identical to the option
previously purchased. The effect of the purchase is that the previous option
position will be canceled. A Fund will realize a profit from closing out an
option if the price received for selling the offsetting position is more than
the premium paid to purchase the option; the Fund will realize a loss from
closing out an option transaction if the price received for selling the
offsetting option is less than the premium paid to purchase the option.

The use of options involves risks. One risk arises because of the imperfect
correlation between movements in the price of options and movements in the
price of the securities that are the subject of the hedge. A Fund's hedging
strategies will not be fully effective if such imperfect correlation occurs.

7
<PAGE>

Price movement correlation may be distorted by illiquidity in the options
markets and the participation of speculators in such markets. If an
insufficient number of contracts are traded, commercial users may not deal in
options because they do not want to assume the risk that they may not be able
to close out their positions within a reasonable amount of time. In such
instances, options market prices may be driven by different forces than those
driving the market in the underlying securities, and price spreads between
these markets may widen. The participation of speculators in the market
enhances its liquidity. Nonetheless, the trading activities of speculators in
the options markets may create temporary price distortions unrelated to the
market in the underlying securities.

An exchange-traded option may be closed out only on an exchange that
generally provides a liquid secondary market for an option of the same series.
If a liquid secondary market for an exchange-traded option does not exist, it
might not be possible to effect a closing transaction with respect to a
particular option, with the result that the Fund would have to exercise the
option in order to accomplish the desired hedge. Reasons for the absence of a
liquid secondary market on an exchange include the following: (i) there may be
insufficient trading interest in certain options; (ii) restrictions may be
imposed by an exchange on opening transactions or closing transactions or both;
(iii) trading halts, suspensions, or other restrictions may be imposed with
respect to particular classes or series of options or underlying securities;
(iv) unusual or unforeseen circumstances may interrupt normal operations on an
exchange; (v) the facilities of an exchange or the Options Clearing Corporation
or other clearing organization may not at all times be adequate to handle
current trading volume; or (vi) one or more exchanges could, for economic or
other reasons, decide or be compelled at some future date to discontinue the
trading of options (or a particular class or series of options), in which event
the secondary market on that exchange (or in that class or series of options)
would cease to exist, although outstanding options on that exchange that had
been issued by the Options Clearing Corporation as a result of trades on that
exchange would continue to be exercisable in accordance with their terms.

The successful use of options depends in part on the ability of Loomis Sayles
to forecast correctly the direction and extent of interest rate, stock price,
or currency value movements within a given time frame. To the extent interest
rates, stock prices, or currency values move in a direction opposite to that
anticipated, a Fund may realize a loss on the hedging transaction that is not
fully or partially offset by an increase in the value of portfolio securities.
In addition, whether or not interest rates or the relevant stock price or
relevant currency values move during the period that the Fund holds options
positions, the Fund will pay the cost of taking those positions (i.e.,
brokerage costs). As a result of these factors, the Fund's total return for
such period may be less than if it had not engaged in the hedging transaction.

An over-the-counter option (an option not traded on an established exchange)
may be closed out only with the other party to the original option transaction.
While the Fund will seek to enter into over-the-counter options only with
dealers who agree to or are expected to be capable of entering into closing
transactions with the Fund, there can be no assurance that the Fund will be
able to liquidate an over-the-counter option at a favorable price at any time
prior to its expiration. Accordingly, the Fund might have to exercise an over-
the-counter option it holds in order to achieve the intended hedge. Over-the-
counter options are not subject to the protections afforded purchasers of
listed options by the Options Clearing Corporation or other clearing
organizations.

8
<PAGE>

Income earned by a Fund from its hedging activities will be treated as
capital gain and, if not offset by net recognized capital losses incurred by
the Fund, will be distributed to shareholders in taxable distributions.
Although gain from options transactions may hedge against a decline in the
value of a Fund's portfolio securities, that gain, to the extent not offset by
losses, will be distributed in light of certain tax considerations and will
constitute a distribution of that portion of the value preserved against
decline.

In accordance with Commodity and Futures Exchange Commission Rule 4.5, each
of the Funds that may engage in futures transactions, including without
limitation futures and options on futures, will use futures transactions solely
for bona fide hedging purposes or will limit its investment in futures
transactions for other bona fide hedging purposes so that the aggregate initial
margin and premiums required to establish such positions will not exceed 5% of
the liquidation value of the Fund, after taking into account unrealized profits
and unrealized losses on any such futures transactions.

SMALL COMPANIES

Investments in companies with relatively small market capitalizations may
involve greater risk than is usually associated with more established
companies. These companies often have limited product lines, markets, or
financial resources, and they may be dependent upon a relatively small
management group. Their securities may have limited marketability and may be
subject to more abrupt or erratic movements in price than securities of
companies with larger capitalizations or market averages in general. The net
asset values of funds that invest in companies with smaller capitalizations
therefore may fluctuate more widely than market averages.

CALIFORNIA TAX-EXEMPT SECURITIES

The Loomis Sayles California Tax-Free Income Fund typically invests a
substantial portion of its assets in California tax-exempt securities. In
addition to general economic pressures, certain California constitutional
amendments, legislative measures, executive orders, administrative regulations,
and voter initiatives could adversely affect the State of California's ability,
and the ability of local governments (such as counties and cities) within
California, to raise revenues to meet their financial obligations. The
following information is only a brief summary, is not a complete description,
and is based on information drawn from official statements relating to
securities offerings of the State of California that have come to the attention
of the Trust and were available before the date of this Statement of Additional
Information. The Trust has not independently verified the accuracy and
completeness of the information contained in those statements.

As used below, "California Tax-Exempt Securities" includes issues secured by
a direct payment obligation of the State and obligations of other issuers that
rely in whole or in part on State revenues to pay their obligations, the
interest on which, in the opinion of issuer's counsel at the time of issuance,
is exempt from federal income tax and California personal income tax. Property
tax revenues and part of the State's General Fund surplus are distributed to
counties, cities, and their various taxing entities; whether and to what extent
a portion of the State's General Fund will be so distributed in the future is
unclear.

Overview. After suffering through a severe recession, since the start of 1994
California's economy has been on a steady recovery. Employment has grown by
more than 1,000,000 since 1994.

9
<PAGE>

The recession seriously affected State tax revenues and caused an increase in
expenditures for health and welfare programs. As a result, from the late 1980s
until 1992-93, the State experienced recurring budget deficits. The State
accumulated a budget deficit of about $2.8 billion at its peak on June 30,
1993. A further consequence of the large budget imbalances was to require the
State to use a series of external borrowings to meet its cash needs. Due to the
improved California economy, however, the State's finances also have improved.
The State's cash position also improved, and no external borrowings occurred
over the end of the last five fiscal years. The State Department of Finance
estimates a balance in the budget reserve at June 30, 2000 of about $7.2
billion. The final 2000-2001 Budget Act projects a balance in the reserve at
June 30, 2001 of almost $1.8 billion. Although the State's strong economy is
producing record revenues to the State government, the State's budget continues
to be under stress from mandated spending on education, a rising prison
population, and social needs of a growing population with many immigrants.
These factors that limit State spending growth also put pressure on local
governments. There can be no assurances that, if economic conditions weaken or
other conditions intercede, the State will not experience budget deficits in
the future.

In the early 1990s, the ratings on the State's long-term general obligation
bonds were reduced from the "AAA" ratings that existed before the recession.
Beginning in 1996, the three major rating agencies raised their ratings of the
State's general obligation bonds, which have been assigned ratings of "AA" by
Standard & Poor's Ratings Group, "Aa2" by Moody's Investors Services, Inc., and
"AA" by Fitch IBCA, Inc.

State Appropriations Limit. Subject to certain exceptions, the State is
subject to an annual appropriations limit imposed by its Constitution on
"proceeds of taxes." Various expenditures, including but not limited to debt
service on certain bonds and appropriations for qualified capital outlay
projects, are not included in the appropriations limit.

ISSUES AFFECTING LOCAL GOVERNMENTS AND SPECIAL DISTRICTS

Proposition 13. Certain California Tax-Exempt Securities may be obligations
of issuers that rely in whole or in part on ad valorem real property taxes for
revenue. In 1978, California voters approved Proposition 13, which limits ad
valorem real property taxes and restricts the ability of taxing entities to
increase property tax and other revenues. With certain exceptions, the maximum
ad valorem real property tax is limited to 1% of the value of real property.
The value of real property may be adjusted annually for inflation at a rate not
exceeding 2% per year, or reduced to reflect declining value, and may also be
adjusted when there is a change in ownership or new construction with respect
to the property. Constitutional challenges to Proposition 13 to date have been
unsuccessful.

The State, in response to the significant reduction in local property tax
revenues as a result of the passage of Proposition 13, enacted legislation to
provide local government with increased expenditures from the General Fund.
This post-Proposition 13 fiscal relief has ended.

Proposition 62. This initiative placed further restrictions on the ability of
local governments to raise taxes and allocate approved tax revenues. Although
some of the California Courts of Appeal held that parts of Proposition 62 were
unconstitutional, the California Supreme Court has upheld Proposition 62's
requirement that special taxes be approved by a two-thirds vote of the voters
voting in an election on the issue. This decision may invalidate other taxes
that have been imposed by local governments in California and make it more
difficult for local governments to raise taxes.

10
<PAGE>

Proposition 218. This initiative places additional and substantial
limitations on the ability of California local governments to impose or raise
various taxes, assessments, charges, and fees by requiring voter approval of
such items. In addition, Proposition 218 clarified the right of local voters to
reduce taxes, fees, assessments, or charges. Proposition 218 does not affect
the State's ability to levy or collect taxes.

Propositions 98 and 111. These initiatives changed the State appropriations
limit and State funding of public education below the university level by
guaranteeing K-14 schools a minimum share of General Fund revenues. The
initiatives also require that the State establish a prudent reserve fund for
public education.

Appropriations Limit. Local governmental entities are also subject to annual
appropriations limits. If a local government's revenues in any year exceed its
limit, the excess must be returned to the public through a revision of tax
rates or fee schedules over the following two years.

Conclusion. The effect of these Constitutional and statutory changes and of
budget developments on the ability of California issuers to pay interest and
principal on their obligations remains unclear, and it may depend upon whether
a particular bond is a general obligation or limited obligation bond (limited
obligation bonds being generally less affected). There is no assurance that any
California issuer will make full or timely payments of principal or interest or
remain solvent. For example, in December 1994, Orange County filed for
bankruptcy.

ADDITIONAL ISSUES

Mortgages and Deeds of Trust. The Fund may invest in issues that are secured
in whole or in part by mortgages or deeds of trust on real property. California
law limits the remedies of a creditor secured by a mortgage or a deed of trust,
which may result in delays in the flow of revenues to, and debt service paid
by, an issuer.

Lease Financings. Some local governments and districts finance certain
activities through lease arrangements. It is uncertain whether such lease
financings are debt that requires voter approval. In August 1998, the
California Supreme Court issued a ruling that upheld the legality of these
financing methods.

Seismic Risk. It is impossible to predict the time, location, or magnitude of
a major earthquake or its effect on the California economy. In January 1994, a
major earthquake struck Los Angeles, causing significant damage to structures
and facilities in a four-county area. The possibility exists that another such
earthquake could create a major dislocation of the California economy.

11
<PAGE>

MANAGEMENT OF THE TRUST

The trustees of the Trust supervise the affairs of the Trust and have the
other responsibilities assigned to them by the laws of The Commonwealth of
Massachusetts. The trustees and officers of the Trust, their ages, and their
principal occupations during the past five years are as follows:

CHARLES J. FINLAYSON (61)--Trustee. 66 Till Rock Lane, Norwell,
Massachusetts. Retired. Formerly Vice President, General Counsel, Secretary,
and Director of Loomis Sayles and Vice President and Secretary of the Trust.

TIMOTHY J. HUNT (69)--Trustee. 26 Dennett Road, Marblehead, Massachusetts.
Trustee of Loomis Sayles & Company Pension and Profit Sharing Plan. Formerly
Vice President and Director of Fixed Income Research for Loomis Sayles.

DANIEL J. FUSS (67)--President. Vice Chairman and Director, Loomis Sayles.

ROBERT J. BLANDING (53)--Executive Vice President. 465 First Street West,
Sonoma, California. President, Chairman, Director, and Chief Executive Officer,
Loomis Sayles.

MARK W. HOLLAND (51)--Treasurer. Vice President and Director of Loomis
Sayles.

SHEILA M. BARRY (55)--Secretary and Compliance Officer. Assistant General
Counsel and Vice President, Loomis Sayles. Formerly Senior Counsel and Vice
President, New England Funds, L.P.

CHRISTOPHER R. ELY (45)--Vice President. Vice President, Loomis Sayles.
Formerly Senior Vice President and Portfolio Manager, Keystone Investment
Management Company, Inc.

QUENTIN P. FAULKNER (61)--Vice President. Vice President, Loomis Sayles.

PHILIP C. FINE (51)--Vice President. Vice President, Loomis Sayles. Formerly
Vice President and Portfolio Manager, Keystone Investment Management Company,
Inc.

KATHLEEN C. GAFFNEY (39)--Vice President. Vice President, Loomis Sayles.

MICHAEL J. MILLHOUSE (45)--Vice President. 227 W. Monroe Street, Chicago,
Illinois. Vice President and Director, Loomis Sayles.

KENT P. NEWMARK (62)--Vice President. 555 California Street, San Francisco,
California. Vice President, Managing Partner, and Director, Loomis Sayles.

ROBERT K. PAYNE (58)--Vice President. 555 California Street, San Francisco,
California. Vice President, Loomis Sayles.

CRAIG SMITH ( )--Vice President. 227 W. Monroe Street, Chicago, Illinois.
Vice President, Loomis Sayles.

12
<PAGE>

DAVID L. SMITH (47)--Vice President. Vice President, Loomis Sayles. Formerly
Vice President and Portfolio Manager, Keystone Investment Management Company,
Inc.

FREDERICK E. SWEENEY, JR. (40)--Vice President. Vice President, Loomis
Sayles.

ANTHONY J. WILKINS (58)--Vice President. Vice President and Director, Loomis
Sayles.

Previous positions during the past five years with Loomis Sayles are omitted
if not materially different.

Except as indicated above, the address of each trustee and officer of the
Trust affiliated with Loomis Sayles is One Financial Center, Boston,
Massachusetts. The Trust pays no compensation to its officers or to the
trustees listed above who are directors, officers, or employees of Loomis
Sayles. Each trustee who is not a director, officer, or employee of Loomis
Sayles is compensated at the rate of $10,000 per annum.

13
<PAGE>

COMPENSATION TABLE

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000

<TABLE>
<CAPTION>
(5)
TOTAL
(3) (4) COMPENSATION
(2) PENSION OR ESTIMATED FROM TRUST AND
(1) AGGREGATE RETIREMENT BENEFITS ANNUAL FUND COMPLEX*
NAME OF PERSON, COMPENSATION ACCRUED AS PART OF BENEFITS UPON PAID TO
POSITION FROM TRUST FUND EXPENSES RETIREMENT TRUSTEE
--------------- ------------ ------------------- ------------- --------------
<S> <C> <C> <C> <C>
Charles J. Finlayson,
Trustee................ $ N/A N/A $
Timothy J. Hunt,
Trustee................ $ N/A N/A $
</TABLE>
-----------------
* No Trustee receives any compensation from any mutual funds affiliated with
Loomis Sayles, other than the Trust.

As of September 30, 2000, the officers and trustees of the Trust do not
beneficially own any shares of the Funds.

The Trust and Loomis Sayles each have adopted a code of ethics under Rule
17j-1 of the 1940 Act. These codes of ethics permit the personnel of these
entities to invest in securities, including securities that the Funds may
purchase or hold.

14
<PAGE>

PRINCIPAL HOLDERS

The following table provides information on the principal holders of each
Fund. A principal holder is a person who owns of record or beneficially 5% or
more of a Fund's outstanding securities. Information provided in this table is
as of , 2000

<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
----------- ------- -------------

<S> <C> <C>
LOOMIS SAYLES CALIFORNIA TAX-FREE INCOME FUND
First American Trust Company, 400 First American Center
Paul M. Davis for Peter Davis Nashville, TN 37237-0402
Koeppel Family Trust 1445 Cabellero Road
Arcadia, CA 91006
Joseph E. & Ellen Mueth TTEEs, 225 S. Lake Avenue
Mueth Family Trust Arcadia, CA 91006
Camille Basha & Connie Vitale JTTE 1015 San Marino Avenue
San Marino, CA 91108
Connie Vitale & Camille Basha JTTE 1015 San Marino Avenue
San Marino, CA 91108
First American Trust Company, 400 First American Center
Paul M. Davis for Peter Davis Family Nashville, TN 37237-0402
LOOMIS SAYLES CORE FIXED INCOME FUND
Asbestos Workers Local #84 36 East Warner Road
Pension Plan Akron, OH 44319
Crane Plastics Employee Retirement P. O. Box 1047
Plan
Columbus, OH 43216
Sheet Metal Workers 2075 West Big Beaver #520
Local Union No. 292 Annuity Fund Troy, MI 48084
City of Livonia Retiree Health and 33000 Civic Center Drive
Disability Benefits Plan and Trust Livonia, MI 48154-3097
Southeastern Michigan Chapter, NECA 25180 Lahser Road
P.O. Box 385
Southfield, MI 48037
Sign, Pictorial & Display Union 30700 Telegraph Road
Local #591 AFL-CIO Display Group Suite 2400
Supplemental Pension Fund Bingham Farms, MI 48025
Ironworkers Local #340 1533 North Woodward Avenue
Supplementary Retirement Fund Suite 300
Bloomfield Hills, MI 48304
The Wagnalls Memorial Foundation 150 E. Columbus Street
Lithopolis, OH 43136
Michigan Peer Review Organization 40600 Ann Arbor Road
Suite 200
Plymouth, MI 48170-4495
</TABLE>

15
<PAGE>

<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
----------- ------- -------------
<S> <C> <C>
LOOMIS SAYLES FIXED INCOME FUND
Marsh & McLennan Companies Defined 1166 Avenue of the
Americas
Benefit Plan Remainder Unitrust A New York, NY 10036-2774
Boehringer Ingelheim Corporation 900 Ridgebury Road
Ridgefield, CT 06887
New Hampshire Charitable Foundation 37 Pleasant Street
Concord, NJ 03301-4005
Painters & Allied Trades 25 Colgate Road
District Council #35 Pension Fund Roslindale, MA 02131-1105
LOOMIS SAYLES HIGH YIELD FIXED INCOME
Blue Cross Blue Shield of 100 Summer Street
Massachusetts, Inc. Boston, MA 02110
Retirement Income Trust
Pomona College 550 N. College Avenue
Claremont, CA 91711
Energen Corporation 210 Sixth Avenue,
Retirement Income Plan North Birmingham, AL 35203
Worcester Polytechnic Institute 100 Institute Road
Worcester, MA 01609
LOOMIS SAYLES INTERMEDIATE DURATION FIXED INCOME FUND
Trustees of Clark University 950 Main Street
Worcester, MA 01610
LOOMIS SAYLES INVESTMENT GRADE FIXED INCOME FUND
Peabody Essex Museum East India Square
Salem, MA 01970
Wichita State University 1845 Fairmount
Endowment Association Wichita, KS 67260
BOST & CO. Mellon Bank, N.A.
Mutual Funds Department
P.O. Box 3198
Pittsburgh, PA 15230-3198
Jupiter & Co. P.O. Box 9130
FPG 90
Boston, MA 02117-9130
Local 522 Pension Fund 139-16 91st Avenue
Jamaica, NY 11435
Braintree Contributory Retirement 71 Cleveland Avenue
System
Braintree, MA 02184
FMB Trust Company P.O. Box 1596
Baltimore, MD 21203-1596
</TABLE>

16
<PAGE>

<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
----------- ------- -------------
<S> <C> <C>
LOOMIS SAYLES PROVIDENT FUND
Brockton Health Corp. Endowment 680 Centre Street
Brockton, MA 02402-3395
Brockton Hospital Pension Trust 680 Centre Street
Brockton, MA 02402-3395
Jewish Federation of Rhode Island 130 Sessions Street
Providence, RI 02906

LOOMIS SAYLES SMALL COMPANY GROWTH FUND

St. Luke's Charitable Health Trust 2999 N. 44th Street
Suite 530
Phoenix, AR 85018
Massachusetts Water Resources 100 First Avenue
Authority
Employees Retirement Plan Charlestown Navy Yard
Charlestown, MA 02129
Town of Plymouth 11 Lincoln Street
Contributory Retirement System Plymouth, MA 02360
Westfield Contributory Retirement 59 Court Street
System
P.O. Box 106
Westfield, MA 01086-0106
Community Foundation for 333 West Fort Street
Southeastern Michigan Suite 2010
Detroit, MI 48226
Kollmorgen Retirement Plans 1601 Trapelo Road
Waltham, MA 02451
Wilmington Trust Co. Custodian for P.O. Box 8882
WBD Stroud TTEE under Article 4th of Wilmington, DE 19899-8882
the Will of Joan M. Stroud for WBD
Stroud II

Barbara Ann Kamanos Cancer Institute 110 East Warren Avenue
Detroit, MI 48201

Detroit Institute of Arts Founders 5200 Woodward Avenue
Society
Detroit, MI 48202
LOOMIS SAYLES SMALL COMPANY VALUE FUND
Hudson-Webber Foundation 333 West Fort Street
Detroit, MI 48226
Westfield Contributory Retirement 59 Court Street
System
P.O. Box 106
Westfield, MA 01086-0106
Medford Retirement Board 85 George P. Hassett
Drive
Medford, MA 02155
</TABLE>

To the extent that any shareholder listed above beneficially owns more than
25% of a Fund, it may be deemed to "control" such Fund within the meaning of
the 1940 Act.

17
<PAGE>

INVESTMENT ADVISORY AND OTHER SERVICES

Advisory Agreements. Under each advisory agreement, Loomis Sayles manages the
investment and reinvestment of the assets of the relevant Fund and generally
administers its affairs, subject to supervision by the Board of Trustees of the
Trust. Loomis Sayles furnishes, at its own expense, all necessary office space,
facilities and equipment, services of executive and other personnel of the
Funds, and certain administrative services. For these services, the advisory
agreements provide that each Fund shall pay Loomis Sayles a monthly investment
advisory fee at the following annual percentage rates of the particular Fund's
average daily net assets:

<TABLE>
<CAPTION>
FUND RATE
---- ----
<S> <C>
Loomis Sayles California Tax-Free Income Fund.............................. .50%
Loomis Sayles Core Fixed Income Fund....................................... .35%
Loomis Sayles Fixed Income Fund............................................ .50%
Loomis Sayles High Yield Fixed Income Fund................................. .60%
Loomis Sayles Intermediate Duration Fixed Income Fund...................... .40%
Loomis Sayles Investment Grade Fixed Income Fund........................... .40%
Loomis Sayles Mid Cap Growth Fund.......................................... .75%
Loomis Sayles Provident Fund............................................... .50%
Loomis Sayles Small Company Growth Fund.................................... .75%
Loomis Sayles Small Company Value Fund..................................... .75%
</TABLE>

During the periods shown below, pursuant to the advisory agreements described
above, Loomis Sayles received the following amount of investment advisory fees
from each Fund (before voluntary fee reductions and expense assumptions) and
bore the following amounts of fee reductions and expense assumptions for each
Fund:
<TABLE>
<CAPTION>
FISCAL PERIOD FISCAL YEAR ENDED FISCAL YEAR ENDED
ENDED 9/30/98* 9/30/99 9/30/00
-------------------- ---------------------- --------------------
FEE WAIVERS FEE WAIVERS FEE WAIVERS
ADVISORY AND EXPENSE ADVISORY AND EXPENSE ADVISORY AND EXPENSE
FUND FEES ASSUMPTIONS FEES ASSUMPTIONS FEES ASSUMPTIONS
---- -------- ----------- ---------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Loomis Sayles California
Tax-Free Income Fund... $ 66,039 $90,006 $ 100,301 $109,084
Loomis Sayles Core Fixed
Income Fund............ 69,281 85,691 105,164 105,013
Loomis Sayles Fixed
Income Fund............ 774,225 51,944 1,389,093 0
Loomis Sayles High Yield
Fixed Income Fund...... 147,356 91,510 147,861 98,741
Loomis Sayles
Intermediate Duration
Fixed Income Fund...... 29,959 58,465 53,685 84,976
Loomis Sayles Investment
Grade Fixed Income
Fund................... 301,182 77,026 535,492 55,557
Loomis Sayles Mid Cap
Growth Fund............ N/A N/A N/A N/A N/A N/A
Loomis Sayles Provident
Fund................... 102,595 77,607 115,794 81,013
Loomis Sayles Small
Company Growth Fund.... N/A N/A 27,118 45,778
Loomis Sayles Small
Company Value Fund..... N/A N/A 57,381 31,229
</TABLE>
-----------------
* The fiscal year end for each of the Funds changed to September 30 in 1998.

18
<PAGE>

During the periods shown below, Loomis Sayles was reimbursed for
administrative services to the Fund in the following amounts:

<TABLE>
<CAPTION>
MARCH 7, 2000-
FUND SEPT 30, 2000
---- ---------------
<S> <C>

</TABLE>

The Trust pays the compensation of its trustees who are not directors,
officers, or employees of Loomis Sayles or its affiliates (other than
registered investment companies); registration, filing, and other fees in
connection with requirements of regulatory authorities; all charges and
expenses of its custodian and transfer agent; the charges and expenses of its
independent accountants; all brokerage commissions and transfer taxes in
connection with portfolio transactions; all taxes and fees payable to
governmental agencies; the cost of any certificates representing shares of the
Funds; the expenses of meetings of the shareholders and trustees of the Trust;
the charges and expenses of the Trust's legal counsel; interest on any
borrowings by the Funds; the cost of services, including services of counsel,
required in connection with the preparation of, and the cost of printing, the
Trust's registration statements and Prospectuses, including amendments and
revisions thereto, annual, semiannual, and other periodic reports of the Trust,
and notices and proxy solicitation material furnished to shareholders or
regulatory authorities, to the extent that any such materials relate to the
Trust or its shareholders; and the Trust's expenses of bookkeeping, accounting,
auditing, and financial reporting, including related clerical expenses.

Under each advisory agreement, if the total ordinary business expenses of a
Fund or the Trust as a whole for any fiscal year exceed the lowest applicable
limitation (based on percentage of average net assets or income) prescribed by
any state in which the shares of the Fund or the Trust are qualified for sale,
Loomis Sayles shall pay such excess. Loomis Sayles will not be required to
reduce its fee or pay such expenses to an extent or under circumstances that
would result in any Fund's inability to qualify as a regulated investment
company under the Code. The term "expenses" is defined in the advisory
agreements or in relevant state regulations and excludes brokerage commissions,
taxes, interest, distribution-related expenses, and extraordinary expenses.

As described in the Prospectuses, Loomis Sayles has agreed to certain
additional, voluntary arrangements to limit Fund expenses. These arrangements
may be modified or terminated by Loomis Sayles at any time.

Each advisory agreement provides that it will continue in effect for two
years from its date of execution and thereafter from year to year if its
continuance is approved at least annually (i) by the Board of Trustees of the
Trust or by vote of a majority of the outstanding voting securities of the
relevant Fund and (ii) by vote of a majority of the Trustees who are not
"interested persons" of the Trust, as that term is defined in the 1940 Act,
cast in person at a meeting called for the purpose of voting on such approval.
Any amendment to an advisory agreement must be approved by vote of a majority
of the outstanding voting securities of the relevant Fund and by vote of a
majority of the Trustees who are not such interested persons, cast in person at
a meeting called for the purpose of voting on such approval. Each agreement may
be terminated without penalty by vote of the Board of Trustees or by vote of a
majority of the outstanding voting securities of the relevant Fund, upon sixty
days' written notice, or by Loomis Sayles upon ninety days' written notice, and
each terminates

19
<PAGE>

automatically in the event of its assignment. In addition, each agreement will
automatically terminate if the Trust or the Fund shall at any time be required
by Loomis Sayles to eliminate all reference to the words "Loomis" and "Sayles"
in the name of the Trust or the Fund, unless the continuance of the agreement
after such change of name is approved by a majority of the outstanding voting
securities of the relevant Fund and by a majority of the Trustees who are not
interested persons of the Trust or Loomis Sayles.

Each advisory agreement provides that Loomis Sayles shall not be subject to
any liability in connection with the performance of its services thereunder in
the absence of willful misfeasance, bad faith, gross negligence, or reckless
disregard of its obligations and duties.

Loomis Sayles acts as investment adviser or subadviser to Nvest Star Value
Fund, Nvest Strategic Income Fund, Nvest Star Advisers Fund, New England Star
Small Cap Fund, and Nvest Balanced Fund, which are series of Nvest Funds Trust
I, a registered open-end management investment company; New England High Income
Fund, a series of New England Funds Trust II, a registered, open-end management
investment company; the Loomis Sayles Small Cap Series of New England Zenith
Fund, a registered open-end management investment company; and Loomis Sayles
Funds, a registered open-end management investment company. Loomis Sayles also
provides investment advice to certain other open-end management investment
companies and numerous other corporate and fiduciary clients.

Loomis, Sayles & Company, L.P. is a registered investment adviser whose
origins date back to 1926. Loomis, Sayles & Company, L.P. is a limited
partnership whose general partner, Loomis, Sayles & Company, Inc., is a wholly-
owned subsidiary of Nvest Holdings, Inc.. ("Nvest Holdings"). Nvest Holdings is
a wholly-owned subsidiary of Nvest Companies, L.P. ("Nvest Companies"). Nvest
Companies' general partner, CDCAM North America, LLC ("CDCAM NA LLC"), is a
wholly-owned subsidiary of CDC Asset Management North America Corporation
("CDCAM NA"). CDCAM NA is the sole limited partner of Nvest Companies. CDCAM NA
is a wholly-owned subsidiary of CDC Asset Management S.A., a French company
("CDCAM"). CDCAM is majority-owned by CDC Finance and indirectly owned, through
CDC Finance, Caisse Nationale des Caisses D'Epargne and CNP Assurances, by
Caisse des Depots et Consignations ("CDC"). CDC was created by French
Government legislation and currently is supervised by the French Parliament.

The eighteen principal subsidiary or affiliated asset management firms of
Nvest Companies, collectively, have more than $130 billion in assets under
management or administration as of September 30, 2000.

Certain officers and trustees of the Trust also serve as officers, directors,
and trustees of other investment companies and clients advised by Loomis
Sayles. The other investment companies and clients sometimes invest in
securities in which the Funds also invest. If a Fund and such other investment
companies or clients desire to buy or sell the same portfolio securities at the
same time, purchases and sales may be allocated, to the extent practicable, on
a pro rata basis in proportion to the amounts desired to be purchased or sold
for each. It is recognized that in some cases the practices described in this
paragraph could have a detrimental effect on the price or amount of the
securities that a Fund purchases or sells. In other cases, however, it is
believed that these practices may benefit the Funds. It is the opinion of the
trustees that the desirability of retaining Loomis Sayles as adviser for the
Funds outweighs the disadvantages, if any, that might result from these
practices.

20
<PAGE>

Custodial Arrangements. State Street Bank and Trust Company ("State Street
Bank"), Boston, Massachusetts 02102, is the Trust's custodian. As such, State
Street Bank holds in safekeeping certificated securities and cash belonging to
the Funds and, in such capacity, is the registered owner of securities held in
book entry form belonging to the Funds. Upon instruction, State Street Bank
receives and delivers cash and securities of the Funds in connection with Fund
transactions and collects all dividends and other distributions made with
respect to Fund portfolio securities. State Street Bank also maintains certain
accounts and records of the Funds and calculates the total net asset value,
total net income, and net asset value per share of each Fund on a daily basis.

Independent Accountants. The Trust's independent accountants are .
conducts an annual audit of the Trust's financial statements, assists
in the preparation of the Funds' federal and state income tax returns, and
consults with the Funds as to matters of accounting and federal and state
income taxation. The information under the caption "Financial Highlights"
included in the Prospectuses has been so included, and the financial statements
incorporated by reference herein from the Funds' 2000 Annual Report have been
so incorporated, in reliance on the reports of , given on the authority of
as experts in auditing and accounting.

21
<PAGE>

PORTFOLIO TRANSACTIONS AND BROKERAGE

In placing orders for the purchase and sale of portfolio securities for each
Fund, Loomis Sayles always seeks the best price and execution. Transactions in
unlisted securities are carried out through broker-dealers who make the primary
market for such securities unless, in the judgment of Loomis Sayles, a more
favorable price can be obtained by carrying out such transactions through other
brokers or dealers.

Loomis Sayles selects only brokers or dealers that it believes are
financially responsible, will provide efficient and effective services in
executing, clearing, and settling an order, and will charge commission rates
that, when combined with the quality of the foregoing services, will produce
best price and execution for the transaction. This does not necessarily mean
that the lowest available brokerage commission will be paid. However, the
commissions are believed to be competitive with generally prevailing rates.
Loomis Sayles will use its best efforts to obtain information as to the general
level of commission rates being charged by the brokerage community from time to
time and will evaluate the overall reasonableness of brokerage commissions paid
on transactions by reference to such data. In making such evaluation, all
factors affecting liquidity and execution of the order, as well as the amount
of the capital commitment by the broker in connection with the order, are taken
into account. The Funds will not pay a broker a commission at a higher rate
than otherwise available for the same transaction in recognition of the value
of research services provided by the broker or in recognition of the value of
any other services provided by the broker that do not contribute to the best
price and execution of the transaction.

Receipt of research services from brokers may sometimes be a factor in
selecting a broker that Loomis Sayles believes will provide best price and
execution for a transaction. These research services include not only a wide
variety of reports on such matters as economic and political developments,
industries, companies, securities, portfolio strategy, account performance,
daily prices of securities, stock and bond market conditions and projections,
asset allocation, and portfolio structure, but also meetings with management
representatives of issuers and with other analysts and specialists. Although it
is not possible to assign an exact dollar value to these services, they may, to
the extent used, tend to reduce Loomis Sayles' expenses. Such services may be
used by Loomis Sayles in servicing other client accounts and in some cases may
not be used with respect to the Funds. Receipt of services or products other
than research from brokers is not a factor in the selection of brokers.

22
<PAGE>

The following tables set forth, for the 1999 and 2000 fiscal years and the
1998 fiscal period (January 1, 1998 through September 30, 1998), respectively,
(1) the aggregate dollar amount of brokerage commissions paid on portfolio
transactions during such period, (2) the dollar amount of transactions on which
brokerage commissions were paid during such period that were directed to
brokers providing research services ("directed transactions"), and (3) the
dollar amount of commissions paid on directed transactions during such period.
Funds not listed in a table did not pay brokerage commissions during the
relevant period.

FISCAL PERIOD ENDED SEPTEMBER 30, 1998
(JANUARY 1, 1998--SEPTEMBER 30, 1998)

FISCAL YEAR ENDED SEPTEMBER 30, 1999

<TABLE>
<CAPTION>
(1) (3)
AGGREGATE (2) COMMISSIONS
BROKERAGE DIRECTED ON DIRECTED
FUND COMMISSIONS TRANSACTIONS TRANSACTIONS
---- ----------- ------------ ------------
<S> <C> <C> <C>
Loomis Sayles Provident
Fund................... $119,910 $4,680,724 $6,324
Loomis Sayles Small
Company Growth Fund.... $ 7,859 $ 72,715 $ 120
Loomis Sayles Small
Company Value Fund..... $408,352 $ 129,210 $ 330
</TABLE>

FISCAL YEAR ENDED SEPTEMBER 30, 2000

<TABLE>
<CAPTION>
(1) (3)
AGGREGATE (2) COMMISSIONS
BROKERAGE DIRECTED ON DIRECTED
FUND COMMISSIONS TRANSACTIONS TRANSACTIONS
---- ----------- ------------ ------------
<S> <C> <C> <C>
Loomis Sayles Provident
Fund...................
Loomis Sayles Small
Company Growth Fund....
Loomis Sayles Small
Company Value Fund.....
</TABLE>

23
<PAGE>

The table below presents information regarding the securities of the Funds'
regular broker-dealers that were held by the Funds as of September 30, 2000.

<TABLE>
<CAPTION>
FUND MARKET VALUE % OF ASSETS
---- ------------ -----------
<S> <C> <C>
Loomis Sayles California Tax-Free Income Fund
Lehman Brothers Inc. ............................... $
Loomis Sayles Core Fixed Income Fund
Lehman Brothers Inc. ............................... $
Salomon Brothers.................................... $
Loomis Sayles Intermediate Duration Fixed Income Fund
Lehman Brothers Inc. ............................... $
Bear Stearns........................................ $
Nomura Asset Security Corp.......................... $
Morgan Stanley...................................... $
Loomis Sayles Investment Grade Fixed Income Fund
Donaldson Lufkin Jenrette........................... $
Lehman Brothers Inc. ............................... $
Salomon Brothers.................................... $
Loomis Sayles Small Company Value Fund
Federated Investors Inc. ........................... $
</TABLE>

24
<PAGE>

DESCRIPTION OF THE TRUST

The Trust, registered with the SEC as a diversified open-end management
investment company, is organized as a Massachusetts business trust under the
laws of Massachusetts by an Agreement and Declaration of Trust (the
"Declaration of Trust") dated December 23, 1993.

The Declaration of Trust currently permits the trustees to issue an unlimited
number of full and fractional shares of each series. Each share of each Fund
represents an equal proportionate interest in such Fund with each other share
of that Fund and is entitled to a proportionate interest in the dividends and
distributions from that Fund. The shares of each Fund do not have any
preemptive rights. Upon termination of any Fund, whether pursuant to
liquidation of the Trust or otherwise, shareholders of that Fund are entitled
to share pro rata in the net assets of that Fund available for distribution to
shareholders. The Declaration of Trust also permits the trustees to charge
shareholders directly for custodial, transfer agency, and servicing expenses.

The assets received by each Fund for the issue or sale of its shares and all
income, earnings, profits, losses, and proceeds therefrom, subject only to the
rights of creditors, are allocated to, and constitute the underlying assets of,
that Fund. The underlying assets are segregated and are charged with the
expenses with respect to that Fund and with a share of the general expenses of
the Trust. Any general expenses of the Trust that are not readily identifiable
as belonging to a particular Fund are allocated by or under the direction of
the trustees in such manner as the trustees determine to be fair and equitable.
While the expenses of the Trust are allocated to the separate books of account
of each Fund, certain expenses may be legally chargeable against the assets of
all Funds.

The Declaration of Trust also permits the trustees, without shareholder
approval, to subdivide any series of shares or Fund into various classes of
shares with such dividend preferences and other rights as the trustees may
designate. The trustees may also, without shareholder approval, establish one
or more additional separate portfolios for investments in the Trust or merge
two or more existing portfolios. Shareholders' investments in such an
additional or merged portfolio would be evidenced by a separate series of
shares (i.e., a new "Fund").

The Declaration of Trust provides for the perpetual existence of the Trust.
The Declaration of Trust, however, provides that the trustees may terminate the
Trust or any Fund upon written notice to the shareholders.

VOTING RIGHTS

As summarized in the Prospectus, shareholders are entitled to one vote for
each full share held (with fractional votes for each fractional share held) and
may vote (to the extent provided in the Declaration of Trust) on the election
of trustees and the termination of the Trust and on other matters submitted to
the vote of shareholders.

The Declaration of Trust provides that on any matter submitted to a vote of
all Trust shareholders, all Trust shares entitled to vote shall be voted
together irrespective of series or sub-series unless the rights of a particular
series or sub-series would be adversely affected by the vote, in which case a
separate vote of that series or sub-series shall also be required to decide the
question. Also, a separate vote shall be held whenever required by the 1940 Act
or any rule thereunder. Rule 18f-2 under the 1940 Act provides in effect that a
class shall be deemed to be affected by a matter

25
<PAGE>

unless it is clear that the interests of each class in the matter are
substantially identical or that the matter does not affect any interest of such
class. On matters affecting an individual series, only shareholders of that
series are entitled to vote. Consistent with the current position of the SEC,
shareholders of all series vote together, irrespective of series, on the
election of trustees and the selection of the Trust's independent accountants,
but shareholders of each series vote separately on other matters requiring
shareholder approval, such as certain changes in investment policies of that
series or the approval of the investment advisory agreement relating to that
series.

There will normally be no meetings of shareholders for the purpose of
electing trustees except that, in accordance with the 1940 Act, (i) the Trust
will hold a shareholders' meeting for the election of trustees at such time as
less than a majority of the trustees holding office have been elected by
shareholders, and (ii) if, as a result of a vacancy on the Board of Trustees,
less than two-thirds of the trustees holding office have been elected by the
shareholders, that vacancy may be filled only by a vote of the shareholders. In
addition, trustees may be removed from office by a written consent signed by
the holders of two-thirds of the outstanding shares and filed with the Trust's
custodian or by a vote of the holders of two-thirds of the outstanding shares
at a meeting duly called for that purpose, which meeting shall be held upon the
written request of the holders of not less than 10% of the outstanding shares.

Upon written request by the holders of shares having a net asset value
constituting 1% of the outstanding shares stating that such shareholders wish
to communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a trustee, the
Trust has undertaken to provide a list of shareholders or to disseminate
appropriate materials (at the expense of the requesting shareholders).

Except as set forth above, the trustees shall continue to hold office and may
appoint successor trustees. Voting rights are not cumulative.

No amendment may be made to the Declaration of Trust without the affirmative
vote of a majority of the outstanding shares of the Trust, except (i) to change
the Trust's name or to cure technical problems in the Declaration of Trust and
(ii) to establish, change, or eliminate the par value of any shares (currently
all shares have no par value).

SHAREHOLDER AND TRUSTEE LIABILITY

Under Massachusetts law shareholders could, under certain circumstances, be
held personally liable for the obligations of the Fund of which they are
shareholders. However, the Declaration of Trust disclaims shareholder liability
for acts or obligations of each Fund and requires that notice of such
disclaimer be given in each agreement, obligation, or instrument entered into
or executed by the Trust or the trustees. The Declaration of Trust provides for
indemnification out of Fund property for all loss and expense of any
shareholder held personally liable for the obligations of the Fund. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is considered remote since it is limited to circumstances in which
the disclaimer is inoperative and the Fund itself would be unable to meet its
obligations.

The Declaration of Trust further provides that the trustees will not be
liable for errors of judgment or mistakes of fact or law. However, nothing in
the Declaration of Trust protects a trustee against any liability to which the
trustee would otherwise be subject by reason of willful misfeasance,

26
<PAGE>

bad faith, gross negligence, or reckless disregard of the duties involved in
the conduct of his office. The By-Laws of the Trust provide for indemnification
by the Trust of the trustees and officers of the Trust except with respect to
any matter as to which any such person did not act in good faith in the
reasonable belief that such action was in or not opposed to the best interests
of the Trust. No officer or trustee may be indemnified against any liability to
the Trust or the Trust's shareholders to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office.

HOW TO BUY SHARES

The procedures for purchasing shares of each Fund are summarized in the
Prospectuses under "General Information-How to Purchase Shares."

NET ASSET VALUE

The net asset value of the shares of each Fund is determined by dividing that
Fund's total net assets (the excess of its assets over its liabilities) by the
total number of shares of the Fund outstanding and rounding to the nearest
cent. Such determination is made as of the close of regular trading on the New
York Stock Exchange (generally 4:00 p.m. Eastern time) on each day on which
that Exchange is open for unrestricted trading, and no less frequently than
once daily on each day during which there is sufficient trading in a Fund's
portfolio securities that the value of that Fund's shares might be materially
affected. During the 12 months following the date of this Statement of
Additional Information, the New York Stock Exchange is expected to be closed on
the following weekdays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, and Christmas Day. Equity securities listed on an established
securities exchange or on the Nasdaq National Market System are normally valued
at their last sale price on the exchange where primarily traded or, if there is
no reported sale during the day, and in the case of over-the-counter securities
not so listed, 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. Long-term debt securities are valued by a pricing service, which
determines valuations of normal institutional-size trading units of long-term
debt securities. Such valuations are determined using methods based on market
transactions for comparable securities and on various relationships between
securities that are generally recognized by institutional traders. Other
securities for which current market quotations are not readily available and
all other assets are valued at fair value as determined in good faith by the
Board of Trustees on the basis of dealer-supplied quotations or otherwise,
although the actual calculations may be made by persons acting pursuant to the
direction of the board.

Generally, trading in foreign securities markets is substantially completed
each day at various times prior to the close of regular trading on the New York
Stock Exchange. Occasionally, events affecting the value of foreign fixed
income securities and of equity securities of non-U.S. issuers not traded on a
U.S. exchange may occur between the completion of substantial trading of such
securities for the day and the close of regular trading on the New York Stock
Exchange, which events will not be reflected in the computation of the Fund's
net asset value. If events materially affecting the value of any Fund's
portfolio securities occur during such period, then these securities may be
valued at their fair value as determined in good faith by or in accordance with
procedures approved by the trustees.

27
<PAGE>

SHAREHOLDER SERVICES

OPEN ACCOUNTS

A shareholder's investment in any Fund is automatically credited to an open
account maintained for the shareholder by the Trust. Certificates representing
shares are issued only upon written request to the Trust but are not issued for
fractional shares. Following each transaction in the account, a shareholder
will receive an account statement disclosing the current balance of shares
owned and the details of recent transactions in the account. After the close of
each fiscal year the Trust will send each shareholder a statement providing
federal tax information on dividends and distributions paid to the shareholder
during the year. This should be retained as a permanent record. Shareholders
will be charged a fee for duplicate information.

The open account system permits the purchase of full and fractional shares
and, by making the issuance and delivery of certificates representing shares
unnecessary, eliminates the problems of handling and safekeeping certificates,
and the cost and inconvenience of replacing lost, stolen, mutilated, or
destroyed certificates.

The costs of maintaining the open account system are borne by the Trust, and
no direct charges are made to shareholders. Although the Trust has no present
intention of making such direct charges to shareholders, it reserves the right
to do so. Shareholders will receive notice before any such charges are made.

REDEMPTIONS

The procedures for redemption of Fund shares are summarized in the
Prospectuses under "General Information--How to Redeem Shares."

If a shareholder selects the telephone redemption service in the manner
described in the next paragraph, Fund shares may be redeemed by making a
telephone call directly to the Trust at 888-226-9699. When a telephone
redemption request is received, the proceeds are generally wired to the bank
account previously chosen by the shareholder. Telephone redemption requests
must be received by the Trust prior to the close of regular trading on the New
York Stock Exchange on a day when the Exchange is open for business. Requests
made after that time or on a day when the New York Stock Exchange is not open
for business cannot be accepted by the Trust, and a new request will be
necessary.

In order to redeem shares by telephone, a shareholder either must select this
service when completing the Fund application or must do so subsequently in
writing. When selecting the service, a shareholder must designate a bank
account to which the redemption proceeds should be wired. Any change in the
bank account so designated must be made by furnishing to the Trust a written
request. Telephone redemptions may be made only if an investor's bank is a
member of the Federal Reserve System or has a correspondent bank that is a
member of the System. If the account is with a savings bank, it must have only
one correspondent bank that is a member of the System. The Trust is not
responsible for the authenticity of withdrawal instructions received by
telephone.

The redemption price will be the net asset value per share next determined
after the redemption request and any necessary special documentation are
received by the Trust in proper form. Proceeds resulting from a written
redemption request will normally be mailed to the

28
<PAGE>

shareholder within seven days after receipt of a request in good order.
Telephonic redemption proceeds will normally be wired on the first business day
following receipt of a proper redemption request. In those cases where a
shareholder has recently purchased shares by check and the check was received
less than fifteen days prior to the redemption request, the Fund may withhold
redemption proceeds until the check has cleared.

A redemption constitutes a sale of the shares for federal income tax purposes
on which the investor may realize a long-term or short-term capital gain or
loss. See "Income Dividends, Capital Gain Distributions and Tax Status."

INCOME DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAX STATUS

As described in the Prospectuses under "Dividends and Distributions," it is
the policy of each Fund to pay its shareholders, as dividends, substantially
all net investment income and to distribute annually all net realized capital
gains, if any, after offsetting any capital loss carryovers.

Income dividends and capital gain distributions are payable in full and
fractional shares of the particular Fund based upon the net asset value
determined as of the close of regular trading on the New York Stock Exchange on
the record date for each dividend or distribution. Shareholders, however, may
elect to receive their income dividends or capital gain distributions, or both,
in cash. The election may be made at any time by submitting a written request
directly to the Trust. In order for a change to be in effect for any dividend
or distribution, it must be received by the Trust on or before the record date
for such dividend or distribution.

As required by federal law, detailed federal tax information will be
furnished to each shareholder for each calendar year on or before January 31 of
the succeeding year.

The Internal Revenue Service ("IRS") requires any Fund to withhold 31% of any
redemption proceeds and of any income dividends and capital gain distributions
in the following situations:

. If you do not provide a correct, certified taxpayer identification number
to the Fund.

. If the IRS notifies the Fund that you have underreported your income in
the past and thus are subject to backup withholding.

. If you fail to certify to the Fund that you are not subject to such
backup withholding.

Each Fund intends to qualify each year as a regulated investment company
under Subchapter M of the Code. In order to qualify as such and to qualify for
the favorable tax treatment accorded regulated investment companies and their
shareholders, each Fund must, among other things, (i) derive at least 90% of
its gross income from dividends, interest, payments with respect to certain
securities loans, gains from the sale of securities or foreign currencies, or
other income (including, but not limited to, gains from options, futures, or
forward contracts) derived with respect to its business of investing in such
stock, securities, or currencies; (ii) distribute with respect to each taxable
year at least 90% of the sum of its taxable net investment income, its tax-
exempt income, and the excess, if any, of net short-term capital gains over net
long-term capital losses for such year; and (iii) diversify its holdings so
that at the end of each fiscal quarter (a) at least 50% of the value of its
assets is invested in cash, U.S. Government securities, securities of other
regulated investment companies, and other securities of issuers that represent,
with respect to each issuer, no more than

29
<PAGE>

5% of the value of the Fund's assets and 10% of the outstanding voting
securities of such issue and (b) not more than 25% of the value of its assets
is invested in the securities (other than those of the U.S. government or other
regulated investment companies) of any one issuer or of two or more issuers
that the Fund controls and that are engaged in the same, similar, or related
trades and businesses. To the extent it qualifies for treatment as a regulated
investment company, a Fund will not be subject to federal income tax on income
paid to its shareholders in the form of dividends or capital gain
distributions.

An excise tax at the rate of 4% will be imposed on the excess, if any, of
each Fund's "required distribution" over its actual distributions in any
calendar year. Generally, the "required distribution" is 98% of the Fund's
ordinary income for the calendar year plus 98% of its capital gain net income
recognized during the one-year period ending on October 31 (or December 31, if
the Fund so elects) plus undistributed amounts from prior years. Each Fund
intends to make distributions sufficient to avoid imposition of the excise tax.
Distributions declared by a Fund during October, November, or December to
shareholders of record on a date in any such month and paid by the Fund during
the following January will be treated for federal tax purposes as paid by the
Fund and received by shareholders on December 31 of the year in which they were
declared.

Shareholders of each Fund will be subject to federal income taxes on
distributions made by the Fund (other than "exempt-interest dividends" paid by
the Loomis Sayles California Tax-Free Income Fund, as described in its
Prospectus) whether received in cash or additional shares of the Fund.
Distributions by each Fund of net income and short-term capital gains, if any,
will be taxable to shareholders as ordinary income. Distributions designated by
a Fund as deriving from net gains on securities held for more than one year
will be taxable to shareholders as long-term capital gains, without regard to
how long the shareholder has held shares of the Fund. Long-term capital gains
will generally be taxed at a federal income tax rate of 20% to shareholders who
are individuals. However, for taxable years beginning after December 31, 2000,
the maximum capital gain tax rates for capital assets (including Fund shares)
held by a non-corporate sharesholder for more than 5 years will be 8% and 18%
(rather than 10% and 20%). The 18% rate applies only to assets the holding
period for which begins after December 31, 2000 (including by way of an
election to mark the asset to the market, and to pay the tax on any gain
thereon, as of January 2, 2001). The mark-to-market election may be
disadvantageous from a federal tax perspective, and shareholders should consult
their tax advisers before making such an election.

Dividends and distributions on a Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur for shares purchased at a time when a
Fund's net asset value reflects gains that are either unrealized or realized
but not distributed. Such realized gains may be required to be distributed even
when a Fund's net asset value also reflects unrealized losses.

Each Fund may be eligible to make an election under Section 853 of the Code
so that its shareholders will be able to claim a credit or deduction on their
income tax returns for, and will be required to treat as part of the amounts
distributed to them, their pro rata portion of qualified taxes paid by the
relevant Fund to foreign countries. The ability of shareholders of the Fund to
claim a foreign tax credit is subject to certain limitations imposed by Section
904 of the Code, which in general limits the amount of foreign tax that may be
used to reduce a shareholder's U.S. tax liability to that amount of U.S. tax
that would be imposed on the amount and type of income for which the

30
<PAGE>

foreign tax was paid. In addition, a shareholder must hold shares of the Fund
(without protection from risk of loss) on the ex-dividend date and for at least
16 days during the 30-day period beginning on the date that is 15 days before
the ex-dividend date in order to be eligible to claim a foreign credit for his
or her share of these foreign taxes. A shareholder who for U.S. income tax
purposes claims a foreign tax credit in respect of Fund distributions may not
claim a deduction for foreign taxes paid by the Fund, regardless of whether the
shareholder itemizes deductions. Also, under Section 63 of the Code, no
deduction for foreign taxes may be claimed by shareholders who do not itemize
deductions on their federal income tax returns. It should also be noted that a
tax-exempt shareholder, like other shareholders, will be required to treat as
part of the amounts distributed to it a pro rata portion of the income taxes
paid by the Fund to foreign countries. However, that income will generally be
exempt from United States taxation by virtue of such shareholder's tax-exempt
status, and such a shareholder will not be entitled to either a tax credit or a
deduction with respect to such income.

Each Fund's transactions, if any, in foreign currencies are likely to result
in a difference between the Fund's book income and taxable income. This
difference may cause a portion of the Fund's income distributions to constitute
a return of capital for tax purposes or require the Fund to make distributions
exceeding book income to avoid excise tax liability and to qualify as a
regulated investment company.

Investment by a Fund in "passive foreign investment companies" could subject
the Fund to U.S. federal income tax or other charge on the proceeds from the
sale of its investment in such a company; however, this tax can be avoided by
making an election to mark such investments to market annually or to treat the
passive foreign investment company as a "qualified electing fund."

If a Fund engages in hedging transactions, including hedging transactions in
options, futures contracts, and straddles, or other similar transactions, it
will be subject to special tax rules (including constructive sale, mark-to-
market, straddle, wash sale, and short sale rules), the effect of which may be
to accelerate income to the Fund, defer losses to the Fund, cause adjustments
in the holding periods of the Fund's securities, or convert short-term capital
losses into long-term capital losses. These rules could therefore affect the
amount, timing, and character of distributions to shareholders. Each Fund will
endeavor to make any available elections pertaining to such transactions in a
manner believed to be in the best interests of the Fund.

A Fund's investment in securities issued at a discount and certain other
obligations will (and investments in securities purchased at a discount may)
require the Fund to accrue and distribute income not yet received. In such
cases, a Fund may be required to sell assets (including when it is not
advantageous to do so) to generate the cash necessary to distribute as
dividends to its shareholders all of its income and gains and therefore to
eliminate any tax liability at the Fund level.

Generally a Fund may designate dividends eligible for the dividends-received
deduction only to the extent that such dividends are derived from dividends
paid to the Fund with respect to which the Fund could have taken the dividends-
received deduction if it had been a regular corporation. The dividends-received
deduction is not available to non-corporate shareholders, Subchapter S
corporations, or corporations that do not hold their shares for at least 46
days during the 90-day period beginning on the date that is 45 days before the
ex-dividend date. The dividends-received deduction also is not available with
respect to dividends derived from a Fund's investment in foreign securities or
REITs.

31
<PAGE>

Redemptions of each Fund's shares are taxable events, and, accordingly,
shareholders may realize gains and losses on these transactions. In general,
any gain realized upon a taxable disposition of shares will be treated as long-
term capital gain if the shares have been held for more than one year.
Otherwise the gain on the sale or redemption of Fund shares will be treated as
short-term capital gain. However, if a shareholder sells Fund shares at a loss
within six months after purchasing the shares, the loss will be disallowed, in
the case of the Loomis Sayles California Tax-Free Income Fund, to the extent of
any exempt-interest dividends received by the shareholder and will be treated
as a long-term capital loss, in the case of all the Funds, to the extent of any
long-term capital gain distributions received by the shareholder. Furthermore,
no loss will be allowed on the sale of Fund shares to the extent the
shareholder acquired other shares of the same Fund within 30 days prior to the
sale of the loss shares or 30 days after such sale.

The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and regulations currently in effect. For the complete
provisions, reference should be made to the pertinent Code sections and
regulations. The Code and regulations are subject to change by legislative or
administrative action.

Dividends and distributions also may be subject to foreign, state, and local
taxes. Shareholders are urged to consult their tax advisers regarding specific
questions as to federal, state, foreign, or local taxes.

The foregoing discussion relates solely to U.S. federal income tax law. Non-
U.S. investors should consult their tax advisers concerning the tax
consequences of ownership of shares of the Fund, including the possibility that
distributions may be subject to a 30% United States withholding tax (or a
reduced rate of withholding provided by treaty). The IRS recently revised its
regulations affecting the application to foreign investors of the back-up
withholding tax rules. The new regulations will generally be effective for
payments made on or after January 1, 2001 (although transition rules will
apply). In some circumstances, the new rules will increase the certification
and filing requirements imposed on foreign investors in order to qualify for
exemption from the 31% back-up withholding tax and for reduced withholding tax
rates under income tax treaties. Foreign investors in each Fund should consult
their advisers with respect to the potential application of these new
regulations.

32
<PAGE>

FINANCIAL STATEMENTS

The financial statements of each Fund included in the Trust's 2000 Annual
Report, filed with the SEC on November , 2000, are incorporated by reference
to such Report.

CALCULATION OF YIELD AND TOTAL RETURN

Yield. Yield with respect to a Fund will be computed by dividing the Fund's
net investment income for a recent 30-day period by the maximum offering price
(reduced by any undeclared earned income expected to be paid shortly as a
dividend) on the last trading day of that period. Net investment income will
reflect amortization of any market value premium or discount of fixed income
securities (except for obligations backed by mortgages or other assets) and may
include recognition of a pro rata portion of the stated dividend rate of
dividend-paying portfolio securities. The Funds' yields will vary from time to
time depending upon market conditions, the composition of the Funds' portfolios
and operating expenses of the Trust allocated to each Fund. These factors, and
possible differences in the methods used in calculating yield, should be
considered when comparing a Fund's yield to yields published for other
investment companies and other investment vehicles. Yield should also be
considered relative to changes in the value of the Fund's shares and to the
relative risks associated with the investment objectives and policies of the
Fund.

At any time in the future, yields may be higher or lower than past yields,
and there can be no assurance that any historical results will continue.

Investors in the Funds are specifically advised that the net asset value per
share of each Fund may vary, just as yields for each Fund may vary. An
investor's focus on yield to the exclusion of the consideration of the value of
shares of a Fund may result in the investor's misunderstanding the total return
he or she may derive from that Fund.

Total Return. Total Return with respect to a Fund is a measure of the change
in value of an investment in such Fund over the period covered and assumes that
any dividends or capital gain distributions are reinvested immediately, rather
than paid to the investor in cash. The formula for total return used herein
includes four steps: (1) adding to the total number of shares purchased through
a hypothetical $1,000 investment in the Fund all additional shares that would
have been purchased if all dividends and distributions paid or distributed
during the period had been immediately reinvested; (2) calculating the value of
the hypothetical initial investment of $1,000 as of the end of the period by
multiplying the total number of shares owned at the end of the period by the
net asset value per share on the last trading day of the period; (3) assuming
redemption at the end of the period; and (4) dividing the resulting account
value by the initial $1,000 investment.

PERFORMANCE COMPARISONS

Yield and Total Return. Each Fund may from time to time include its total
return information in advertisements or in information furnished to present or
prospective shareholders. Each of the Loomis Sayles California Tax-Free Income
Fund, the Loomis Sayles Core Fixed Income Fund, the Loomis Sayles Fixed Income
Fund, the Loomis Sayles High Yield Fixed Income Fund, the Loomis Sayles
Intermediate Duration Fixed Income Fund, and the Loomis Sayles Investment Grade
Fixed

33
<PAGE>

Income Fund may from time to time include the yield and/or total return of its
shares in advertisements or information furnished to present or prospective
shareholders. Each Fund may from time to time include in advertisements or
information furnished to present or prospective shareholders (i) the ranking of
performance figures relative to such figures for groups of mutual funds
categorized by Lipper Analytical Services, Inc. or Standard & Poor's Micropal,
Inc. as having similar investment objectives, (ii) the rating assigned to the
Fund by Morningstar, Inc. based on the Fund's risk-adjusted or straight
performance relative to other mutual funds in its broad investment class,
and/or (iii) the ranking of performance figures relative to such figures for
mutual funds in its general investment category as determined by
CDA/Weisenberger's Management Results.

Volatility. Each Fund may quote various measures of its volatility and
benchmark correlation. In addition, a Fund may compare these measures to those
of other funds and indices. Measures of volatility seek to compare a Fund's
historical share price fluctuations or total returns to those of a benchmark.
Measures of benchmark correlation indicate the extent to which a Fund's returns
change in ways similar to those of the benchmark. All measures of volatility
and correlation are calculated using averages of historical data. Each Fund may
utilize charts and graphs to present its volatility and average annual total
return. Each Fund may also discuss or illustrate examples of interest rate
sensitivity.

Lipper Inc. distributes mutual fund rankings monthly. The rankings are based
on total return performance calculated by Lipper, generally reflecting changes
in net asset value adjusted for reinvestment of capital gains and income
dividends. They do not reflect deduction of any sales charges. Lipper rankings
cover a variety of performance periods, including, but not limited to, year-to-
date, 1-year, 5-year, and 10-year performance. Lipper classifies mutual funds
by [investment objective and asset category.]

Standard & Poor's Micropal, Inc. distributes mutual fund rankings weekly and
monthly. The rankings are based upon performance calculated by Standard &
Poor's Micropal, generally reflecting changes in net asset value that can be
adjusted for the reinvestment of capital gains and dividends. If deemed
appropriate by the user, performance can also reflect deductions for sales
charges. Standard & Poor's Micropal rankings cover a variety of performance
periods, including, but not limited to, year-to-date, 1-year, 5-year, and 10-
year performance. Standard & Poor's Micropal classifies mutual funds by
investment objective and asset category.

Morningstar, Inc. distributes mutual fund ratings monthly. The ratings are
divided into five groups: highest, above average, neutral, below average and
lowest. They represent a fund's historical risk/reward ratio relative to other
funds in its broad investment class as determined by Morningstar, Inc.
Morningstar ratings cover a variety of performance periods, including 3-year,
5-year, 10-year, and overall performance. The performance factor for the
overall rating is a weighted-average return performance (if available)
reflecting deduction of expenses and sales charges. Performance is adjusted
using quantitative techniques to reflect the risk profile of the fund. The
ratings are derived from a purely quantitative system that does not utilize the
subjective criteria customarily employed by rating agencies such as Standard &
Poor's and Moody's Investors Service, Inc.

Standard & Poor's Select Funds are funds selected by Standard & Poor's that
have demonstrated above-average absolute and volatility-adjusted returns
relative to funds with the same investment style, along with having investment
management attributes that are consistent with the fund's investment style.
Select Fund designation is based on a six-month moving average of three years
of

34
<PAGE>

absolute and volatility-adjusted performance. A Select Fund designation does
not address the market risk, credit risk, or counterparty risk of a fund, nor
does it address a fund's suitability as a counterparty or obligor.

Value Line Investment Survey is an investment advisory service that ranks
approximately 1,700 stocks for "timeliness" and safety. Using a computerized
model based on earnings momentum, Value Line projects which stocks will have
the best or worst relative price performance over the next 6 to 12 months. In
addition, each stock is assigned a risk rating, which identifies the volatility
of a stock's price behavior relative to the market average. The service also
ranks all major industry groups for timeliness.

CDA/Weisenberger's Management Results publishes mutual fund rankings and is
distributed monthly. The rankings are based entirely on total return calculated
by Weisenberger for periods such as year-to-date, 1-year, 3-year, 5-year, and
10-year. Mutual funds are ranked in general categories (e.g., international
bond, international equity, municipal bond, and maximum capital gain).
Weisenberger rankings do not reflect deduction of sales charges or fees.

Performance information may also be used to compare the performance of the
Fund to certain widely acknowledged standards or indices for stock and bond
market performance, such as those listed below.

Consumer Price Index. The Consumer Price Index, published by the U.S. Bureau
of Labor Statistics, is a statistical measure of changes, over time, in the
prices of goods and services in major expenditure groups.

Dow Jones Industrial Average. The Dow Jones Industrial Average is a market
value-weighted and unmanaged index of 30 large industrial stocks.

Lehman Brothers Government/Corporate Bond Index. The Lehman Brothers
Government/Corporate Bond Index is an index of publicly issued U.S. Treasury
obligations, debt obligations of U.S. government agencies (excluding mortgage-
backed securities), fixed-rate, non-convertible, investment-grade corporate
debt securities, and U.S. dollar-denominated, SEC-registered non-convertible
debt issued by foreign governmental entities or international agencies used as
a general measure of the performance of fixed-income securities.

Lehman Brothers Government/Corporate Intermediate Bond Index. The Lehman
Brothers Government/Corporate Intermediate Bond Index consists of those bonds
held within the Lehman Brothers Government/Corporate Bond Index that have an
average maturity of 1-10 years.

Lehman Brothers 1-3 Year Government Index. The Index consists of fixed rate
debt issues of the U.S. government or its agencies rated investment grade or
higher with at least one year maturity and an outstanding par value of at least
$100 million for U.S. government issues.

Lehman Brothers Government Bond Index. The Lehman Brothers Government Bond
Index is composed of all publicly issued, non-convertible, domestic debt of the
U.S. government or any of its agencies or quasi-federal corporations, or
corporate debt guaranteed by the U.S. government.

35
<PAGE>

Lehman Brothers Municipal Bond Index. The Lehman Brothers Municipal Bond
Index is computed from the prices of approximately 21,000 bonds consisting of
roughly 30% revenue bonds, 30% government obligation bonds, 27% insured bonds,
and 13% pre-refunded bonds.

MSCI-EAFE Index. The MSCI-EAFE Index contains over 1,000 stocks from 20
different countries with Japan (approximately 50%), the United Kingdom, France,
and Germany being the most heavily weighted.

MSCI-EAFE ex-Japan Index. The MSCI-EAFE ex-Japan Index consists of all stocks
contained in the MSCI-EAFE Index, other than stocks from Japan.

Merrill Lynch Domestic Master Index. The Merrill Lynch Domestic Master Index
is comprised of U.S. investment grade fixed income securities. The Index
includes U.S. Treasury Notes and Bonds, U.S. Agency securities, mortgage pass-
through securities, and corporate securities.

Merrill Lynch High Yield Master Index. The Merrill Lynch High Yield Master
Index consists of fixed-rate, coupon-bearing bonds with an outstanding par that
is greater than or equal to $50 million, a maturity range greater than or equal
to one year, and a rating of less than BBB/Baa3 but not in default.

Russell 2000 Index. The Russell 2000 Index is comprised of the 2,000 smallest
companies included in the Russell 3000 Index, which represents approximately
98% of the U.S. equity market.

Salomon Brothers World Government Bond Index. The Salomon Brothers World
Government Bond Index includes a broad range of institutionally traded fixed-
rate government securities issued by the national governments of 17 countries,
including the United States. The index generally excludes floating- or
variable-rate bonds, securities aimed principally at non-institutional
investors (such as U.S. Savings Bonds), and private-placement type securities.

Standard & Poor's/Barra Growth Index. The Standard & Poor's/Barra Growth
Index is constructed by ranking the securities in the S&P 500 by price-to-book
ratio and including the securities with the highest price-to-book ratios that
represent approximately half of the market capitalization of the S&P 500.

Standard & Poor's/Barra Value Index. The Standard & Poor's/Barra Value Index
is constructed by ranking the securities in the S&P 500 by price-to-book ratio
and including the securities with the lowest price-to-book ratios that
represent approximately half of the market capitalization of the S&P 500.

Standard & Poor's ("S&P") Mid-Cap 400 Index. The S&P Mid-Cap 400 Index
consists of 400 domestic stocks chosen for market size, liquidity, and industry
group representation. It is market-weighted (stock price times shares
outstanding) with each stock affecting the index in proportion to its value.
The index is comprised of industrial, utility, financial, and transportation
stocks, in size order.

Standard & Poor's 500 Composite Stock Price Index (The "S&P 500"). The S&P
500 is a market value-weighted and unmanaged index showing the changes in the
aggregate market value of 500 stocks relative to the base period 1941-43. The
S&P 500 is composed almost entirely of

36
<PAGE>

common stocks of companies listed on the New York Stock Exchange, although the
common stocks of a few companies listed on the American Stock Exchange or
traded over-the-counter are included. The 500 companies represented include 400
industrial, 60 transportation, and 40 financial services concerns. The S&P 500
represents about 80% of the market value of all issues traded on the New York
Stock Exchange. The S&P 500 is the most common index for the overall U.S. stock
market.

From time to time, articles about the Funds regarding performance, rankings,
and other characteristics of the Funds may appear in publications including,
but not limited to, the publications included in Appendix A. In particular,
some or all of these publications may publish their own rankings or performance
reviews of mutual funds, including the Funds. References to or reprints of such
articles may be used in the Funds' promotional literature. References to
articles regarding personnel of Loomis Sayles who have portfolio management
responsibility may also be used in the Funds' promotional literature. For
additional information about the Funds' advertising and promotional literature,
see Appendix B.

37
<PAGE>

PERFORMANCE DATA*

The manner in which total return and yield of the Funds will be calculated
for public use is described above. The table summarizes the calculation of
total return and yield for the Funds, where applicable, (i) for the one-year
period ended September 30, 2000, (ii) for the three-year period ended September
30, 2000, (iii) for the five-year period ended September 30, 2000, (iv) from
modified inception through September 30, 2000, and (v) from actual inception
(as listed below) through September 30, 2000.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------------------------------
CURRENT FOR THE FOR THE FOR THE FROM
SEC ONE-YEAR THREE-YEAR FIVE-YEAR MODIFIED FROM ACTUAL
YIELD PERIOD PERIOD PERIOD INCEPTION** INCEPTION***
AT ENDED ENDED ENDED THROUGH THROUGH
FUND 9/30/00 9/30/00 9/30/00 9/30/00 9/30/00 9/30/00
---- ------- -------- ---------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Loomis Sayles California
Tax-Free Income Fund...
Loomis Sayles Core Fixed
Income Fund............
Loomis Sayles Fixed
Income Fund............
Loomis Sayles High Yield
Fixed Income Fund......
Loomis Sayles
Intermediate Duration
Fixed Income Fund......
Loomis Sayles Mid Cap
Growth Fund............ N/A N/A N/A N/A N/A N/A
Loomis Sayles Investment
Grade Fixed Income
Fund...................
Loomis Sayles Provident
Fund...................
Loomis Sayles Small
Company Growth Fund....
Loomis Sayles Small
Company Value Fund.....
</TABLE>
-----------------
* Performance (for other than the one-year period for the Loomis Sayles
Fixed Income Fund) would have been lower if a portion of the management fee
had not been waived by Loomis Sayles. In the absence of this limitation,
actual yield and total return would have been as follows:

38
<PAGE>

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
--------------------------------------------------------------
CURRENT FOR THE FOR THE FOR THE FROM
SEC ONE-YEAR THREE-YEAR FIVE-YEAR MODIFIED FROM ACTUAL
YIELD PERIOD PERIOD PERIOD INCEPTION** INCEPTION***
AT ENDED ENDED ENDED THROUGH THROUGH
FUND 9/30/00 9/30/00 9/30/00 9/30/00 9/30/00 9/30/00
---- ------- -------- ---------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Loomis Sayles California
Tax-Free Income Fund...
Loomis Sayles Core Fixed
Income 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...................
Loomis Sayles Mid Cap
Growth Fund............ N/A N/A N/A N/A N/A N/A
Loomis Sayles Provident
Fund...................
Loomis Sayles Small
Company Growth Fund....
Loomis Sayles Small
Company Value Fund.....
</TABLE>
-----------------
** Modified inception dates are as follows:

<TABLE>
<S> <C>
Loomis Sayles Core Fixed Income Fund......................... April 30, 1996
Loomis Sayles Fixed Income Fund.............................. January 31, 1995
Loomis Sayles High Yield Fixed Income Fund................... June 30, 1996
Loomis Sayles Intermediate Duration Fixed Income Fund........ January 31, 1998
Loomis Sayles Small Company Growth Fund...................... May 31, 1999
</TABLE>

*** Actual Inception Dates:

<TABLE>
<S> <C>
Loomis Sayles California Tax-Free Income Fund................ June 1, 1995
Loomis Sayles Core Fixed Income Fund......................... April 24, 1996
Loomis Sayles Fixed Income Fund.............................. January 17, 1995
Loomis Sayles High Yield Fixed Income Fund................... June 5, 1996
Loomis Sayles Intermediate Duration Fixed Income Fund........ January 28, 1998
Loomis Sayles Investment Grade Fixed Income Fund............. July 1, 1994
Loomis Sayles Mid Cap Growth Fund............................ March , 2001
Loomis Sayles Provident Fund................................. October 1, 1995
Loomis Sayles Small Company Growth Fund...................... May 7, 1999
Loomis Sayles Small Company Value Fund....................... June 30, 1999
</TABLE>

39
<PAGE>

APPENDIX A

PUBLICATIONS AND OUTLETS THAT MAY CONTAIN FUND INFORMATION

ABC and affiliates Financial News Network
Adam Smith's Money World Financial Planning
America Online Financial Planning on Wall
Anchorage Daily News Street
Atlanta Constitution Financial Research Corp.
Atlanta Journal Financial Services Week
Arizona Republic Financial World
Austin American Statesman Fitch Insights
Baltimore Sun Forbes
Bank Investment Marketing Fort Worth Star-Telegram
Barron's Fortune
Bergen County Record (NJ) Fox Network and affiliates
Bloomberg Business News Fund Action
Bond Buyer Fund Decoder
Boston Business Journal Global Finance
Boston Globe (the) Guarantor
Boston Herald Hartford Courant
Broker World Houston Chronicle
Business Radio Network INC
Business Week Indianapolis Star
CBS and affiliates Individual Investor
CDA Investment Technologies Institutional Investor
CFO International Herald Tribune
Changing Times Internet
Chicago Sun Times Investment Advisor
Chicago Tribune Investment Company Institute
Christian Science Monitor Investment Dealers Digest
Christian Science Monitor News Investment Profiles
Service Investment Vision
Cincinnati Enquirer Investor's Daily
Cincinnati Post IRA Reporter
CNBC Journal of Commerce
CNN Kansas City Star
Columbus Dispatch KCMO (Kansas City)
CompuServe KOA-AM (Denver)
Dallas Morning News LA Times
Dallas Times-Herald Leckey, Andrew (syndicated
Denver Post column)
Des Moines Register Life Association News
Detroit Free Press Lifetime Channel
Donoghues Money Fund Report Miami Herald
Dorfman, Dan (syndicated column) Milwaukee Sentinel
Dow Jones News Service Money Magazine
Economist Money Maker
FACS of the Week Money Management Letter
Fee Adviser Morningstar
Mutual Fund Market News

40
<PAGE>

Mutual Funds Magazine San Jose Mercury
National Public Radio Seattle Post-Intelligencer
National Underwriter Seattle Times
NBC and affiliates Securities Industry Management
New England Business Smart Money
New England Cable News St. Louis Post Dispatch
New Orleans Times-Picayune St. Petersburg Times
New York Daily News Standard & Poor's Outlook
New York Times Standard & Poor's Stock Guide
Newark Star Ledger Stanger's Investment Advisor
Newsday Stockbroker's Register
Newsweek Strategic Insight
Nightly Business Report Tampa Tribune
Orange County Register Time
Orlando Sentinel Tobias, Andrew (syndicated
Palm Beach Post column)
Pension World Toledo Blade
Pensions and Investments UP
Personal Investor US News and World Report
Philadelphia Inquirer USA Today
Porter, Sylvia (syndicated USA TV Network
column) Value Line
Portland Oregonian Wall Street Journal
Prodigy Wall Street Letter
Public Broadcasting Service Wall Street Week
Quinn, Jane Bryant (syndicated Washington Post
column) WBZ
Registered Representative WBZ-TV
Research Magazine WCVB-TV
Resource WEEI
Reuters WHDH
Rocky Mountain News Worcester Telegram
Rukeyser's Business (syndicated World Wide Web
column) Worth Magazine
Sacramento Bee WRKO
San Diego Tribune
San Francisco Chronicle
San Francisco Examiner

41
<PAGE>

APPENDIX B

ADVERTISING AND PROMOTIONAL LITERATURE

A total return figure or modified inception date that more accurately
compares a Fund's performance with other measures of investment return such as
data published by Lipper Analytical Services, Inc. or with the performance of
any other index.

Hypothetical calculations of a Fund's aggregate total return for a period of
time assuming the investment of a particular investment in shares of a Fund and
assuming the reinvestment of all dividends and distributions.

Discussions and/or illustrations of the potential investment goals of a
prospective investor, investment management strategies, techniques, policies or
investment suitability of a Fund (such as value investing, market timing,
dollar cost averaging, asset allocation, constant ratio transfer, automatic
account rebalancing, and the advantages and disadvantages of investing in tax-
deferred and taxable investments).

Discussions of economic conditions, the relationship between sectors of the
economy and the economy as a whole, various securities markets, the effects of
inflation, sources of information, economic models, forecasts, data services
utilized, consulted or considered in the course of providing advisory or other
services, as well as historical performance of various asset classes, including
but not limited to, stocks, bonds and Treasury securities.

A summary of the substance of information contained in shareholder reports
(including the investment composition of a Fund by investment, industry sector
and country weighting), as well as the views of Loomis Sayles as to current
market, economic, trade and interest rate trends, legislative, regulatory and
monetary developments, investment strategies and related matters believed to be
of relevance to a Fund. This information may be updated as of a current date
(such as the date of the performance data, if any).

Charts, graphs or drawings which compare the investment objective, return
potential, relative stability and/or growth possibilities of the Funds and/or
other mutual funds, or illustrate the potential risks and rewards of investment
in various investment vehicles, including but not limited to, stocks, bonds,
Treasury securities and shares of a Fund and/or other mutual funds.

A discussion of certain attributes or benefits to be derived by an investment
in a Fund and/or other mutual funds, shareholder profiles and hypothetical
investor scenarios, timely information on financial management, tax and
retirement planning and investment alternatives to certificates of deposit and
other financial instruments.

Inclusion of symbols, headlines or other material which highlight or
summarize the information discussed in more detail therein.

Specific and general references to industry statistics regarding 401(k) and
retirement plans including historical information and industry trends and
forecasts regarding the growth of assets, numbers of plans, funding vehicles,
participants, sponsors, and other demographic data relating to plans,
participants and sponsors, third party and other administrators, benefits
consultants, and firms with whom Loomis Sayles may or may not have a
relationship.

Specific and general reference to comparative ratings, rankings, and other
forms of evaluation as well as statistics regarding the Funds as 401(k) or
retirement plan funding vehicles produced by industry authorities, research
organizations, and publications.

42
<PAGE>

In addition, Loomis Sayles Investment Trust's advertising and promotional
material may include, but is not limited to, discussions of the following
information:

Loomis Sayles Investment Trust's participation in wrap fee and no
transaction fee programs

Loomis Sayles Investment Trust's and Loomis, Sayles & Company, L.P.'s
website

Loomis Sayles Publications, including fact sheets for each Fund

Characteristics of Loomis Sayles, including the number and locations of
its offices, its investment practices and clients, and assets under
management

Specific and general investment philosophies, strategies, processes, and
techniques

Specific and general sources of information, economic models, forecasts,
and data services utilized, consulted, or considered in the course of
providing advisory or other services

Industry conferences at which Loomis Sayles participates

Current capitalization, levels of profitability and other financial
information

Identification of portfolio managers, researchers, economists,
principals, and other staff members and employees and descriptions of
Loomis Sayles' resources devoted to such staff

The specific credentials of the above individuals, including but not
limited to previous employment, current and past positions, titles and
duties performed, industry experience, educational background and degrees,
awards, and honors

The types of clients Loomis Sayles advises and specific identification
of, and general reference to, current individual, corporate, and
institutional clients, including pension and profit sharing plans

Current and historical statistics relating to:

--total dollar amount of assets managed

--Loomis Sayles assets managed in total and by Fund

--the growth of assets

--asset types managed

Loomis Sayles tag line--"Listening Harder, Delivering More"--and statements
that and examples of how Loomis Sayles Investment Trust listens to its clients
and works hard to deliver results that exceed their expectations.

43
<PAGE>

PART C. OTHER INFORMATION

ITEM 23. EXHIBITS

(a) Agreement and Declaration of Trust. (1)

(b) By-Laws. (1)

(d)(1) Investment Advisory Agreement between the Registrant, on behalf of its
Loomis Sayles California Tax-Free Income Fund, and Loomis, Sayles &
Company, L.P. to be filed by amendment.

(d)(2) Investment Advisory Agreement between the Registrant, on behalf of its
Loomis Sayles Core Fixed Income Fund, and Loomis, Sayles & Company, L.P.
to be filed by amendment.

(d)(3) Investment Advisory Agreement between the Registrant, on behalf of its
Loomis Sayles Provident Fund and Loomis, Sayles & Company, L.P. to be
filed by amendment.

(d)(4) Investment Advisory Agreement between the Registrant, on behalf of its
Loomis Sayles Fixed Income Fund, and Loomis, Sayles & Company, L.P. to be
filed by amendment.

(d)(5) Investment Advisory Agreement between the Registrant, on behalf of its
Loomis Sayles High Yield Fixed Income Fund, and Loomis, Sayles & Company,
L.P. to be filed by amendment.

(d)(6) Investment Advisory Agreement between the Registrant, on behalf of its
Loomis, Sayles Intermediate Duration Fund, and Loomis, Sayles & Company,
L.P. to be filed by amendment.

(d)(7) Investment Advisory Agreement between the Registrant, on behalf of its
Loomis Sayles Investment Grade Fixed Income Fund, and Loomis, Sayles &
Company, L.P. to be filed by amendment.

(d)(8) Investment Advisory Agreement between the Registrant, on behalf of its
Loomis Sayles Small Company Growth Fund, and Loomis, Sayles & Company,
L.P. to be filed by amendment.

(d)(9) Investment Advisory Agreement between the Registrant, on behalf of its
Loomis Sayles Small Company Value Fund, and Loomis, Sayles & Company,
L.P. to be filed by amendment.

(d)(10)Investment Advisory Agreement between the Registrant, on behalf of its
Loomis Sayles Mid-Cap Growth Fund, and Loomis, Sayles & Company, L.P. to
be filed by amendment.

(e) Not Applicable.

(f) Not Applicable.

(g)(1) Custodian Agreement. (1)

(g)(2) Form of Letter Agreement between the Registrant and State Street Bank and
Trust Company

-1-
<PAGE>

relating to the applicability of the Custodian Agreement and Transfer
Agency and Service Agreement to Loomis Sayles Small Company Growth Fund.
(4)

(g)(3) Form of Letter Agreement between the Registrant and State Street Bank and
Trust Company relating to the applicability of the Custodian Agreement
and Transfer Agency and Service Agreement to Loomis Sayles Small Company
Value Fund. (4)

(g)(4) Form of Letter Agreement relating to Custodian Agreement for Loomis
Sayles California Tax-Free Income Fund. (4)

(g)(5) Form of Letter Agreement relating to Custodian Agreement for Loomis
Sayles Core Fixed Income Fund, Loomis Sayles High Yield Fixed Income
Fund, and Loomis Sayles Intermediate Duration Fixed Income Fund. (4)

(g)(6) Form of Letter Agreement relating to Custodian Agreement for Loomis
Sayles Provident Fund to be filed by amendment.

(g)(7) Form of Agreement relating to the custodian Agreement for Loomis Sayles
Mid Cap Growth Fund to be filed by amendment.

(h)(1) Form of Transfer Agency Agreement. (1)

(h)(2) See Exhibit (g)(2) for Form of Letter Agreement between the Registrant
and State Street Bank and Trust Company relating to the applicability of
the Transfer Agency and Service Agreement to Loomis Sayles Small Company
Growth Fund.

(h)(3) See Exhibit (g)(3) for Form of Letter Agreement between the Registrant
and State Street Bank and Trust Company relating to the applicability of
the Transfer Agency and Service Agreement to Loomis Sayles Small Company
Value Fund.

(h)(4) Transfer Agency Agreement relating to Loomis Sayles Fixed Income Fund to
be filed by amendment.

(h)(5) Form of Letter Agreement relating to Loomis Sayles Mid Cap Growth Fund to
be filed by amendment.

(i) Opinion and Consent of Counsel to be filed by amendment.

(j) Consent of PricewaterhouseCoopers LLP to be filed by amendment.

(k) Not applicable.

(l) Not applicable.

(m) Not applicable.

(n) Not applicable.

(o)(1) Power of Attorney for Daniel J. Fuss. (2)

(o)(2) Powers of Attorney for Charles J. Finlayson and Timothy J. Hunt. (3)

(p)(1) Code of Ethics of Loomis, Sayles & Company, L.P. (5)

(p)(2) Code of Ethics of the Registrant. (5)

-----------------------------------------------

(1) Incorporated by reference to the Exhibit to Post-Effective Amendment
No. 2 to the Registrant's Registration Statement under the Securities Act
of 1933 filed with the SEC on April 21, 1998.

(2) Incorporated by reference to the Exhibit to Post-Effective Amendment
No. 1 to the Registrant's Registration Statement under the Securities Act
of 1933 filed with the SEC on September 5, 1997.

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<PAGE>

(3) Incorporated by reference to the Exhibit to Post-Effective Amendment
No. 6 to the Registrant's Registration Statement under the Securities Act
of 1933 filed with the SEC on November 19, 1999.

(4) Incorporated by reference to the Exhibit to Post-Effective Amendment
No. 8 to the Registrant's Registration Statement under the Securities Act
of 1933 filed with the SEC on January 26, 2000.

(5) Incorporated by reference to the Exhibit to Post Effective Amendment No.
9 to the Registrant's Registration Statement under the Securities Act of
1933 filed with the SEC on November 29, 2000.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

Not Applicable.

ITEM 25. INDEMNIFICATION

Article VIII of the Registrant's Agreement and Declaration of Trust (Exhibit (a)
hereto) and Article 4 of the Registrant's By-Laws (Exhibit (b) hereto) provide
for indemnification of its trustees and officers. The effect of these provisions
is to provide indemnification for each of the Registrant's trustees and officers
against liabilities and counsel fees reasonably incurred in connection with the
defense of any legal proceeding in which such trustee or officer may be involved
by reason of being or having been a trustee or officer, except with respect to
any matter as to which such trustee or officer shall have been adjudicated not
to have acted in good faith and in the reasonable belief that such trustee's or
officer's action was in the best interest of the Registrant, and except that no
trustee or officer shall be indemnified against any liability to the Registrant
or its shareholders to which such trustee or officer otherwise would be subject
by reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such trustee's or officer's
office.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

Loomis, Sayles & Company, L.P., ("Loomis Sayles"), the investment advisor of the
Registrant, provides investment advice to the nineteen series of the Loomis
Sayles Funds, six series of Nvest Funds Trust I, one series of Nvest Funds Trust
II, and one series of New England Zenith Funds, all of which are registered
investment companies, and to other registered investment companies,
organizations, and individuals.

The sole general partner of Loomis Sayles is Loomis, Sayles & Company, Inc., One
Financial Center, Boston, Massachusetts 02111.

ITEM 27. PRINCIPAL UNDERWRITERS

Not applicable.

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ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

The following companies maintain possession of the documents required by the
specified rules:

(a) Registrant
Rule 31a-1(b)(4), (9), (10), (11)
Rule 31a-2(a)

(b) State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Rule 31a - 1(a)
Rule 31a - 1(b)(1), (2), (3),
(5), (6), (7), (8) Rule
31a-2(a)

ITEM 29. MANAGEMENT SERVICES

Not applicable.

ITEM 30. UNDERTAKINGS

Not applicable.

* * * * * * * * * * * * * * * * * * * *

NOTICE

A copy of the Agreement and Declaration of Trust of the Registrant is on
file with the Secretary of The Commonwealth of Massachusetts and the Clerk of
the City of Boston, and notice is hereby given that this Registration Statement
has been executed on behalf of the Registrant by an officer of the Registrant as
an officer and not individually and by its Trustees as trustees and not
individually and that the obligations of or arising out of this Registration
Statement are not binding upon any of the Trustees, officers, or shareholders
individually but are binding only upon the assets and property of the
Registrant.

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<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this amendment to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, The Commonwealth
of Massachusetts, on the 19/th/ day of December, 2000.

LOOMIS SAYLES INVESTMENT TRUST

By: /s/ Daniel J. Fuss
------------------------------------
Daniel J. Fuss, President

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this amendment to the Registration Statement of
the Registrant has been signed below by the following persons in the capacities
and on the dates indicated.

SIGNATURE TITLE DATE

/s/ Daniel J. Fuss President December 19, 2000
-----------------------------
Daniel J. Fuss*

/s/ Charles J. Finlayson Trustee December 19, 2000
-----------------------------
Charles J. Finlayson*

/s/ Timothy J. Hunt Trustee December 19, 2000
-----------------------------
Timothy J. Hunt*

*By: /s/ Mark W. Holland
---------------------------------
Mark W. Holland,
Attorney-in-Fact
December 19, 2000

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