-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RojByIYO9Hq4fh2B4hr3/LrWuFjFJQy5LgjvC+RnzSp+KJRn5h9CZgfLwqU9/knv lFC7rGTobfTL33p4/d1AuQ== 0000816153-03-000007.txt : 20030228 0000816153-03-000007.hdr.sgml : 20030228 20030228115955 ACCESSION NUMBER: 0000816153-03-000007 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030228 EFFECTIVENESS DATE: 20030228 FILER: COMPANY DATA: COMPANY CONFORMED NAME: THORNBURG INVESTMENT TRUST CENTRAL INDEX KEY: 0000816153 IRS NUMBER: 061158764 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05201 FILM NUMBER: 03585267 BUSINESS ADDRESS: STREET 1: 119 E MARCY ST STREET 2: SUITE 202 CITY: SANTA FE STATE: NM ZIP: 87501 BUSINESS PHONE: 5059840200 MAIL ADDRESS: STREET 1: 119 EAST MARCY ST STREET 2: SUITE 202 CITY: SANTA FE STATE: NM ZIP: 87501 FORMER COMPANY: FORMER CONFORMED NAME: LIMITED TERM TRUST DATE OF NAME CHANGE: 19870816 FORMER COMPANY: FORMER CONFORMED NAME: THORNBURG INCOME TRUST DATE OF NAME CHANGE: 19920703 N-30D 1 ny301202.txt SEMI ANNUAL ENDED 12-31-02 Thornburg New York Intermediate Municipal Fund Semi-Annual Report December 31, 2002 Thornburg New York Intermediate Municipal Fund ALL DATA AS OF 12/31/02 Fund facts Thornburg New York Intermediate Municipal Fund Thornburg New York Intermediate Municipal Fund A Shares Annualized Distribution Rate 4.00% SEC Yield 2.36% Taxable Equiv. Yield 4.32% NAV $12.82 Max. Offering Price $13.08 Total returns (Annual Average - After Subtracting Maximum Sales Charge) One Year 4.71% Three Years 6.08% Since Inception 5.07% Inception Date 9/5/97 Taxable equivalent yield assumes a 38.6% marginal federal tax rate, a 6.85% New York State tax rate, and a 4.25% New York City tax rate. The investment return and principal value of an investment in the fund will fluctuate so that, when redeemed, an investor's shares may be worth more or less than their original cost. Maximum sales charge of the Fund's Class A Shares is 2.00%. The data quoted represent past performance and may not be construed as a guarantee of future results. The distribution rate is calculated by taking the sum of the previous 30 days of distribution factors and dividing this sum by the ending NAV. The value is then annualized to arrive at the 30-day distribution yield. The yield is calculated on a periodic basis and is subject to change depending on the fund's NAV and current distributions. Letter to shareholders Thornburg New York Intermediate Municipal Fund January 17, 2003 Dear Fellow Shareholder: I am pleased to present the semi-annual report for the Thornburg New York Intermediate Fund. The net asset value of the A shares increased by 19 cents to $12.82 during the six-month period ending December 31, 2002. If you were with us for the entire period, you received dividends of 27.8 cents per share. If you reinvested dividends, you received 28.0 cents per share. 2002 was the third consecutive year of excellent performance for high quality short and intermediate municipal bonds. Interest rates on five-year AAA rated municipal bonds fell by 1.17% over the course of the year, pushing up the market price of most of the bonds in the Fund. Longer-term bonds also benefited from falling interest rates, but to a lesser extent. The Fund's trailing returns are very competitive with those of longer-term funds that typically take more interest-rate risk than the Fund does. We believe that 2003 may prove to be somewhat more challenging. While the U.S. economy is currently sluggish at best, interest rates are at 41-year lows, tax cuts are probably going to accelerate, and the Federal government is increasing spending substantially. All of this should eventually lead to a more vibrant economy and higher interest rates, barring a prolonged war with Iraq or other major outside shock. We have therefore begun shortening durations and building more defensiveness into the fund, after extending slightly in October. If interest rates do rise, the market price of most bonds will decline. Remember, though, that short and intermediate bonds, like those in the Thornburg Intermediate New York Fund, should not decline in price as much as long-term bonds. Furthermore, as the bonds in the Fund move closer to maturity, they will recover much, if not all, of their lost value. Most importantly, if interest rates go up we will be able to replace bonds as they mature with higher yielding bonds, which will increase the funds' returns over time. Thus, even though short-term market values may be negatively impacted, laddered portfolios can benefit from rising interest rates over longer periods of time. Your Thornburg Intermediate New York Fund is a laddered portfolio of 55 municipal obligations from all over New York. All of the bonds are rated A or better by one of the major rating agencies. Today, your fund's weighted average maturity is 7.8 years. We always keep it to 10 years or less. As you know, we "ladder" the maturity dates of the bonds in your portfolio so that some of the bonds are scheduled to mature during each of the coming years. The following chart describes the percentages of your fund's bond portfolio maturing in each of the coming years: % of portfolio Cumulative % maturing within maturing by end of 2 years = 10% years = 10% 2 to 4 years = 12% 2 to 4 years = 22% 4 to 6 years = 14% 4 to 6 years = 36% 6 to 8 years = 9% 6 to 8 years = 45% 8 to 10 years = 12% 8 to 10 years = 57% 10 to 12 years = 13% 10 to 12 years = 70% 12 to 14 years = 10% 12 to 14 years = 80% 14 to 16 years = 3% 14 to 16 years = 83% 16 to 18 years = 11% 16 to 18 years = 94% 18 to 20 years = 6% Over 20 Years = 100% Percentages can and do vary. Data as of 12/31/02. After years of operating surpluses, the City and State of New York are currently going through a severe fiscal crisis. State personal income tax revenues are down 15% in the current fiscal year while pension, Medicaid, and other expenses are going up. Past budget deficits have been balanced through one-time measures such as tapping reserve funds and securitizing tobacco settlement receivables. Strong steps have been taken to control expenses and balance the 2003 and 2004 budgets, but more must be done. We are watching closely for signs of revenue improvement or another solution, but in the meantime we are keeping credit quality very high. Currently 58% of the Fund is rated AAA and 100% is rated A or better by Moody's or Standard and Poor's. Municipal bond supply is likely to be down somewhat from last years' record $352 billion. A reduced supply of bonds plus the fact that municipal bond yields are relatively high when compared to treasury bonds should provide some additional support for the municipal bond market. However, some of this support is being counterbalanced by the president's proposal to eliminate individual income taxes on some corporate dividends. We do not believe that the president's proposal will be enacted in its present form. If it is, we do not believe that dividend-paying equities will attract large numbers of traditional municipal bond investors because of the fundamental difference between a stock dividend (which can be eliminated or reduced easily) and the interest payment on a bond (which is a contractual obligation). Also, there is no promise that you will get your principal back when you invest in a stock. Nevertheless, we do believe the President's proposal, if passed, will make equities somewhat more attractive relative to all types of bonds. Yields on money market funds have dropped significantly. As of early February, the average taxable money market fund was yielding 0.81%. If you are an investor in the 35% federal tax bracket, that leaves you with only 0.49% after state and federal taxes! To see how your fund has performed relative to the money market fund averages, turn to the back of this report. Over the years, our practice of laddering a diversified portfolio of short and intermediate maturity municipal bonds has allowed your fund to perform well in varying interest rate environments. Thank you for investing in the Thornburg Intermediate New York Fund. Sincerely, George Strickland Portfolio Manager Statements of assets and liabilities Thornburg New York Intermediate Municipal Fund December 31, 2002 (Unaudited) ASSETS Investments at value (cost $33,628,020) ..................... $ 36,021,406 Cash ........................................................ 179,647 Receivable for investments sold ............................. 270,000 Receivable for fund shares sold ............................. 71,089 Interest receivable ......................................... 488,766 Prepaid expenses and other assets ........................... 111,725 Total Assets ....................................... 37,142,633 LIABILITIES ................................................. Payable for investments purchased 1,119,170 Payable for fund shares redeemed ............................ 115,649 Accounts payable and accrued expenses ....................... 55,363 Payable to investment advisor (Note 3) ...................... 123,078 Dividends payable ........................................... 45,103 Total Liabilities .................................. 1,458,363 NET ASSETS .................................................. $ 35,684,270 NET ASSETS CONSIST OF: ...................................... Net unrealized appreciation 2,393,386 Accumulated net realized loss ...................... (2,829) Net capital paid in on shares of beneficial interest 33,293,713 $ 35,684,270 NET ASSET VALUE: ............................................ Class A Shares: Net asset value and redemption price per share ($35,684,270 applicable to 2,784,301 shares of beneficial interest outstanding - Note 4) $ 12.82 Maximum sales charge, 2.00% of offering price ........................................... 0.26 Maximum Offering Price Per Share ............................ $ 13.08 See notes to financial statements. Statement of operations Thornburg New York Intermediate Municipal Fund Six Months Ended December 31, 2002 (Unaudited) INVESTMENT INCOME: Interest income (net of premium amortized of $86,539) ..... $ 842,321 EXPENSES: Investment advisory fees (Note 3) ......................... 86,092 Administration fees (Note 3) .............................. 21,523 Service fees (Note 3) ..................................... 42,185 Transfer agent fees ....................................... 17,826 Custodian fees ............................................ 15,883 Professional fees ......................................... 9,393 Accounting fees ........................................... 1,558 Trustee fees .............................................. 368 Other expenses ............................................ 3,881 Total Expenses .......................... 198,709 Less: Expenses reimbursed by investment advisor (Note 3) (48,530) Fees paid indirectly (Note 3) ............................. (357) Net Expenses ............................ 149,822 Net Investment Income ................... 692,499 REALIZED AND UNREALIZED GAIN (LOSS) ....................... ON INVESTMENTS (Note 5) Net realized loss on investments sold ..................... (3,149) Increase in unrealized appreciation of investments ........ 535,342 Net Realized and Unrealized Gain on Investments ..................... 532,193 Net Increase in Net Assets Resulting From Operations ......................... $ 1,224,692 See notes to financial statements. Statements of changes in net assets Thornburg New York Intermediate Municipal Fund
(Unaudited) Six Months Ended Year Ended December 31, 2002 June 30, 2002 INCREASE (DECREASE) IN NET ASSETS FROM: OPERATIONS: Net investment income .................................. $ 692,499 $ 1,233,097 Net realized gain (loss) on investments sold ........... (3,149) 83,913 Increase in unrealized appreciation of investments ..... 535,342 62,767 Net Increase in Net Assets Resulting from Operations .................................................. 1,224,692 1,379,777 DIVIDENDS TO SHAREHOLDERS: From net investment income Class A Shares ..................................... (692,499) (1,233,097) From realized gains Class A Shares ..................................... (52,639) 0 FUND SHARE TRANSACTIONS (Note 4): Class A Shares .............................................. 3,129,046 6,074,393 Net Increase in Net Assets ......................... 3,608,600 6,221,073 NET ASSETS: Beginning of period ......................................... 32,075,670 25,854,597 End of period ...................................... $ 35,684,270 $ 32,075,670
See notes to financial statements. Notes to financial statements Thornburg New York Intermediate Municipal Fund December 31, 2002 Note 1 - Organization Thornburg New York Intermediate Municipal Fund (the "Fund"), is a series of Thornburg Investment Trust (the "Trust"). The Trust is organized as a Massachusetts business trust under a Declaration of Trust dated June 3, 1987 and is registered as a diversified, open-end management investment company under the Investment Company Act of 1940, as amended. The Trust is currently issuing nine series of shares of beneficial interest in addition to those of the Fund: Thornburg Florida Intermediate Municipal Fund, Thornburg New Mexico Intermediate Municipal Fund, Thornburg Intermediate Municipal Fund, Thornburg Limited Term U.S. Government Fund, Thornburg Limited Term Income Fund, Thornburg Value Fund, Thornburg International Value Fund Thornburg Core Growth Fund and Thornburg Investment Income Builder Fund. Each series is considered to be a separate entity for financial reporting and tax purposes. The Fund's investment objective is to obtain as high a level of current income exempt from Federal income tax as is consistent with the preservation of capital. The Fund will also invest primarily in municipal obligations within the state of New York, with the objective of having interest dividends paid to its shareholders exempt from any individual income taxes. Additionally, the Fund will seek to have dividends paid to its individual shareholders exempt from New York City income taxes. Note 2 - Significant Accounting Policies Significant accounting policies of the Fund are as follows: Valuation of Investments: In determining net asset value, the Fund utilizes an independent pricing service approved by the Trustees. Debt investment securities have a primary market over the counter and are valued on the basis of valuations furnished by the pricing service. The pricing service values portfolio securities at quoted bid prices, or at the yield equivalents when quotations are not readily available. Securities for which quotations are not readily available are valued at fair value as determined by the pricing service using methods which include consideration of yields or prices of municipal obligations of comparable quality, type of issue, coupon, maturity, and rating; indications as to value from dealers and general market conditions. The valuation procedures used by the pricing service and the portfolio valuations received by the Trust are reviewed by the officers of the Fund under the general supervision of the Trustees. Short-term obligations having remaining maturities of 60 days or less are valued at amortized cost, which approximates value. Federal Income Taxes: It is the policy of the Trust to comply with the provisions of the Internal Revenue Code applicable to "regulated investment companies" and to distribute all of its taxable (if any) and tax exempt income to its shareholders. Therefore no provision for Federal income tax is required. Dividends paid by the Fund for the period ended December 31, 2002 represent exempt interest dividends, which are excludable by shareholders from gross income for Federal income tax purposes. Unutilized tax basis capital losses may be carried forward to offset realized gains in future years. To the extent such carryforwards are used, capital gain distributions may be reduced to the extent provided by regulations. When-Issued and Delayed Delivery Transactions: The Fund may engage in when-issued or delayed delivery transactions. To the extent the Fund engages in such transactions, it will do so for the purpose of acquiring portfolio securities consistent with its investment objectives and not for the purpose of investment leverage or to speculate on interest rate changes. At the time the Fund makes a commitment to purchase a security for the Fund, on a when-issued basis, it will record the transaction and reflect the value in determining the Fund's net asset value. When effecting such transactions, assets of the Fund of an amount sufficient to make payment for the portfolio securities to be purchased will be segregated on the Fund's records on the trade date. Securities purchased on a when-issued or delayed delivery basis do not earn interest until the settlement date. Dividends: Net investment income of the Fund is declared daily as a dividend on shares for which the Fund has received payment. Dividends are paid monthly and are reinvested in additional shares of the Fund at net asset value per share at the close of business on the dividend payment date, or at the shareholder's option, paid in cash. Net capital gains, to the extent available, will be distributed at least annually. General: Securities transactions are accounted for on a trade date basis. Interest income is accrued as earned. Premiums and original issue discounts on securities purchased are amortized over the life of the respective securities. Realized gains and losses from the sale of securities are recorded on an identified cost basis. Expenses common to all Funds are allocated among the Funds comprising the Trust based upon their relative net asset values or other appropriate allocation methods. Use of Estimates: The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Note 3 - Investment Advisory Fee and Other Transactions With Affiliates Pursuant to an investment advisory agreement, Thornburg Investment Management, Inc. (the "Adviser") serves as the investment adviser and performs services for which the fees are payable at the end of each month. For the period ended December 31, 2002, these fees were payable at annual rates ranging from 1/2 of 1% to 11/40 of 1% of the average daily net assets of the Fund. The Trust entered into an Administrative Services Agreement with the Adviser, whereby the Adviser will perform certain administrative services for the shareholders and for which fees will be payable at an annual rate of up to 1/8 of 1% of the average daily net assets. For the period ended December 31, 2002 the Adviser voluntarily waived investment advisory fees of $48,530. The Trust has an underwriting agreement with Thornburg Securities Corporation (the "Distributor"), which acts as the Distributor of Fund shares. For the period ended December 31, 2002, the Distributor has advised the Fund that it earned commissions aggregating $11 from the sale of Class A shares. Pursuant to a Service Plan, under Rule 12b-1 of the Investment Company Act of 1940, the Trust may reimburse to the Adviser an amount not to exceed 1/4 of 1% per annum of the Fund's average net assets for payments made by the Adviser to securities dealers and other financial institutions to obtain various shareholder related services. The Adviser may pay out of its own funds additional expenses for distribution of the Fund's shares. The Fund has an agreement with the custodian bank to indirectly pay a portion of the custodian's fees through credits earned by the Fund's cash on deposit with the bank. This deposit agreement is an alternative to overnight investments. Custodial fees have been adjusted to reflect amounts that would have been paid without this agreement, with a corresponding adjustment reflected as fees paid indirectly in the statements of operations. For the period ended December 31, 2002, the fees paid indirectly were $357. Certain officers and trustees of the Trust are also officers and/or directors of the Adviser and Distributor. The compensation of unaffiliated trustees is borne by the Trust. Note 4 - Shares of Beneficial Interest At December 31, 2002 there were an unlimited number of shares of beneficial interest authorized. Transactions in shares of beneficial interest were as follows:
Six months Ended Year Ended December 31, 2002 June 30, 2002 Shares Amount Shares Amount Class A Shares Shares sold 506,083 $ 6,462,099 702,418 $ 8,885,460 Shares issued to shareholders in reinvestment of distributions 33,211 $ 424,122 60,133 $ 759,542 Shares repurchased (295,033) $ (3,757,175) (283,204) $ (3,570,609) Net Increase 244,261 $ 3,129,046 479,347 $ 6,074,393
Note 5 - Securities Transactions For the period ended December 31, 2002 the Fund had purchase and sale transactions (excluding short-term securities) of $6,670,395 and $2,653,921, respectively. Note 6 - Income Taxes At December 31, 2002, information on the tax components of capital is as follows: Cost of investments for tax purposes $ 33,628,020 Gross tax unrealized appreciation 2,393,763 Gross tax unrealized depreciation (376) Net tax unrealized appreciation on investments $ 2,393,386 Unutilized tax basis capital losses may be carried forward to offset realized gains in future years. To the extent such carryforwards are used, capital gain distributions may be reduced to the extent provided by regulations. Financial highlights Thornburg New York Intermediate Municipal Fund
Six Months Ended Year Ended December 31, 2002 June 30, 2002 2002 2001 2000 1999 1998(a) Class A Shares: Per Share Performance (for a share outstanding throughout the period) Net asset value, beginning of period $ 12.63 $ 12.55 $ 12.16 $ 12.36 $ 12.71 $ 12.50 Income from investment operations: Net investment income 0.26 0.54 0.62 0.64 0.64 0.52 Net realized and unrealized gain (loss) on investments 0.21 0.08 0.39 (0.20) (0.33) 0.21 Total from investment operations 0.47 0.62 1.01 0.44 0.31 0.73 Less dividends from: Net investment income (0.26) (0.54) (0.62) (0.64) (0.64) (0.52) Realized capital gains (0.02) - - - (0.02) - Change in net asset value 0.19 0.08 0.39 (0.20) (0.35) 0.21 Net asset value, end of period $ 12.82 $ 12.63 $ 12.55 $ 12.16 $ 12.36 $ 12.71 Total return (b) 3.58% 5.05% 8.44% 3.65% 2.38% 5.92% Ratios/Supplemental Data Ratios to average net assets: Net investment income 4.02%(c) 4.29% 4.95% 5.23% 5.00% 4.99%(c) Expenses, after expense reductions 0.87%(c) 0.87% 0.87% 0.76% 0.75% 0.78%(c) Expenses, before expense reductions 1.15%(c) 1.09% 1.13% 1.15% 1.16% 1.19%(c) Portfolio turnover rate 8.11% 17.66% 21.96% 19.02% 9.06% 42.26% Net assets at end of period (000) $ 35,684 $ 32,076 $ 25,855 $ 24,365 $ 24,633 $ 25,472 (a) Sales of Class A Shares commenced on September 5, 1997. (b) Sales loads are not reflected in computing total return, which is not annualized for periods less than one year. (c) Annualized
Schedule of Investments Thornburg New York Intermediate Municipal Fund CUSIPS: CLASS A - 885-215-665 NASDAQ SYMBOLS: CLASS A - THNYX 465,000 Amherst Industrial Development Agency Civic Facility Revenue, 5.75% due NR/A $504,153 4/1/2015 (Insured: ACA) 700,000 Bethlehem Central School District General Obligation, 7.10% due Aaa/AAA 829,171 11/1/2006 (Insured: AMBAC) 1,000,000 Brookhaven Industrial Development Agency Civic Facility Revenue, 4.375% A2/BBB+ 1,050,250 due 11/1/2031 put 11/1/2006 (Methodist Retirement Community Project; LOC: Northfork Bank) 215,000 Canastota Central School District General Obligation, 7.10% due Baa2/NR 252,593 6/15/2007 (ETM)* 205,000 Canastota Central School District General Obligation, 7.10% due Baa2/NR 244,557 6/15/2008 (ETM)* 1,000,000 Dutchess County Industrial Development Agency, 6.05% due 11/1/2019 NR/AA 1,086,350 (Kaatsbaan Dance Center Project; Guaranty: Dyson Foundation) 550,000 Guam Power Authority Revenue Series A, 6.625% due 10/1/2014 NR/AAA 611,611 pre-refunded 10/1/2004 @ 102 1,000,000 Hempstead Town Ind Dev Agency Resources Recovery Revenue, 5.00% due A3/BBB 1,040,150 12/1/2010 (American Ref-Fuel Project) 785,000 Long Island Power Authority Electric Systems Revenue General Series A, Aaa/AAA 912,735 6.00% due 12/1/2007 (Insured: AMBAC) 880,000 Monroe County Ind Dev Agency Revenue, 6.45% due 2/1/2014 (Civic Aa1/NR 943,536 Facility - DePaul Community Facility Project; Insured: Sonyma) 530,000 Nassau Health Care Corp., 6.00% due 8/1/2011 (Insured: FSA) Aaa/AAA 620,519 300,000 New York Adjusted Subseries E-3, 1.50% due 8/1/2023 VMIG1/A1+ 300,000 600,000 New York City General Obligation, 1.50% due 8/1/2020 put 01/02/2003 VMIG1/A1+ 600,000 (daily demand notes) 1,000,000 New York City General Obligation Series B, 7.20% due 8/15/2008 A2/A 1,104,910 pre-refunded 8/15/2004 @ 101 250,000 New York City General Obligation Series B-1, 7.30% due 8/15/2010 Aaa/A 276,662 pre-refunded 8/15/2004 @ 101 400,000 New York City Municipal Water Finance Authority, 1.50% due 6/15/2024 VMIG1/A1+ 400,000 put 01/02/2003 (daily demand notes) 1,000,000 New York City Municipal Water Finance Authority Series B, 5.75% due Aaa/AAA 1,018,200 6/15/2013 (ETM)* 400,000 New York City Refunding Series H, 1.50% due 8/1/2014 (Insured: FSA) VMIG1/A1+ 400,000 1,365,000 New York City Transitional Refunding Future Tax Secured C, 5.25% due Aaa/AAA 1,496,258 8/1/2016 (Insured: AMBAC) 920,000 New York City Trust Cultural Resources Revenue, 5.75% due 7/1/2014 NR/A 1,005,864 (Museum of American Folk Art Project; Insured: ACA) 1,000,000 New York Dormitory Authority Lease Revenue Series A, 5.25% due Aaa/AAA 1,107,190 8/15/2013 (Insured: FSA) 500,000 New York Dormitory Authority Revenue, 7.35% due 8/1/2029 (Jewish NR/AAA 551,105 Geriatric Project; Insured: FHA) 295,000 New York Dormitory Authority Revenues, 4.00% due 7/1/2005 (New York NR/A+ 295,549 Medical College Project; LOC: Fleet National Bank) 350,000 New York Dormitory Authority Revenues, 5.25% due 7/1/2010 (Insured: NR/AA 392,917 Asset Guaranty) 370,000 New York Dormitory Authority Revenues, 5.25% due 7/1/2011 (Insured: NR/AA 414,363 Asset Guaranty) 280,000 New York Dormitory Authority Revenues Capital Appreciation, 0% due Aaa/AAA 250,191 7/1/2005 (Insured: FSA) 1,115,000 New York Dormitory Authority Revenues Mental Health Services Facilities Aaa/AAA 1,213,845 Improvement A, 5.50% due 2/15/2019 (Insured: MBIA) 250,000 New York Dormitory Authority Revenues Refunding, 5.50% due 2/15/2003 Aaa/AAA 251,320 (Insured: FSA) 1,000,000 New York Dormitory Authority Revenues Refunding, 6.10% due 7/1/2019 Aa1/NR 1,124,920 (Ryan Clinton Community Health Center Project; Insured: Sonyma Mortgage) 1,000,000 New York Dormitory Authority Revenues Series B, 5.25% due 11/15/2026 Aaa/AAA 1,112,970 put 5/15/2012 (Insured: AMBAC) 30,000 New York Environmental Facilities Corp. PCR Water Revolving Fund Series Aa2/AA- 30,154 B, 7.50% due 3/15/2011 600,000 New York Environmental Facilities Corp. PCR Water Revolving Fund Series Aaa/AAA 657,408 E, 6.875% due 6/15/2014 refunded 6/01/2004 @ 101.5 400,000 New York Environmental Facilities Corp. PCR Water Revolving Fund Series Aaa/AAA 436,708 E, 6.875% due 6/15/2014 500,000 New York General Obligation, 9.875% due 11/15/2005 A2/AA 610,515 665,000 New York Housing Finance Service Series A, 6.375% due 9/15/2015 A3/AAA 784,135 pre-refunded 9/15/2007 @ 100 85,000 New York Housing Finance Service Unrefunded Balance Series A, 6.375% A3/AA- 95,972 due 9/15/2015 70,000 New York Medical Care Facilities Finance Agency Revenue, 6.125% due Aa2/AA 73,332 2/15/2014 (Insured: FHA) 500,000 New York Medical Care Facilities Finance Agency Revenue Series A, 6.85% Aaa/AAA 566,540 due 2/15/2017 pre-refunded 2/15/2005 @ 102 (Brookdale Hospital Medical Center Project) 500,000 New York Medical Care Facilities Finance Agency Revenue Series A, 6.80% Aaa/AAA 566,015 due 2/15/2020 pre-refunded 2/15/2005 @ 102 (New York Downtown Hospital Project) 665,000 New York Mortgage Agency Revenue, 5.85% due 10/1/2017 Aaa/NR 719,064 1,000,000 New York Mortgage Agency Revenue Series 29-B, 6.45% due 4/1/2015 Aa1/NR 1,022,590 1,000,000 New York Series G, 6.75% due 2/1/2009 (Insured: MBIA) Aaa/AAA 1,197,050 1,000,000 New York State Dormitory Authority Revenues, 5.50% due 3/15/2012 NR/AA 1,140,290 80,000 New York State Medical Care Facilities Finance Agency Revenue, 6.125% Aa2/AA 83,254 due 2/15/2014 pre-refunded 2/15/2004 @ 102 (Insured: FHA) 300,000 New York State Mortgage Agency Revenue Series 70, 5.375% due 10/1/2017 Aa2/NR 313,710 2,000,000 New York Urban Development Corp. Correctional Facilities Revenue, 0% A3/AA- 1,698,900 due 1/1/2008 1,505,000 Newark Wayne Community Hospital Revenue Series B, 5.875% due 1/15/2033 Aaa/AAA 1,537,914 (Insured: AMBAC) 355,000 Oneida County Industrial Development Agency Revenue, 6.00% due 1/1/2010 NR/AA 411,111 (Insured: Asset Guaranty) 450,000 Oneida County Industrial Development Agency Revenue, 6.10% due 6/1/2020 Aa3/NR 487,472 (Civic Facility Presbyterian Home Project; LOC: HSBC Bank USA) 750,000 Port Chester Industrial Development Agency Refunding, 4.75% due NR/AAA 793,522 7/1/2031 put 7/1/2011 @ 100 (American Foundation Project; FNMA Collateralized) 100,000 Southampton Village General Obligation Series B, 7.60% due 9/1/2003 Aaa/AAA 104,218 (Insured: MBIA) 210,000 Utica Industrial Development Agency Civic Facility Revenue, 5.25% due Aa3/NR 229,333 7/15/2016 (Munson Williams Proctor Institute Project) 625,000 Valley Central School District Montgomery, 7.15% due 6/15/2007 Aaa/AAA 749,087 (Insured: AMBAC) 165,000 Watkins Glen Central School District, 7.25% due 6/15/2004 (Insured: Aaa/AAA 178,931 MBIA) 110,000 Waverly General Obligation, 9.05% due 6/15/2004 (Insured: MBIA) (ETM)* Aaa/AAA 122,293 TOTAL INVESTMENTS (Cost $33,628,020) $ 36,021,407 +Credit ratings are unaudited. *Escrowed to maturity See notes to financial statements.
Index Comparisons Thornburg New York Intermediate Municipal Fund December 31, 2002 INTERMEDIATE NEW YORK FUND Index Comparison The chart at the right compares performance of Intermediate New York Fund, the Merrill Lynch Municipal Bond (7-12 year) Index and the Consumer Price Index, for the periods ending December 31, 2002. On December 31, 2002, the weighted average securities ratings of the Index and the Fund were AA and AA+, respectively, and the weighted average portfolio maturities of the Index and the Fund were 9.5 years and 7.8 years, respectively. Past performance of the Index and the Fund may not be indicative of future performance. The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. Class A Average Annual Total Returns (at max. offering price) (ending 12/31/02) One year: 4.71% Three years: 6.08% From inception (9/5/97): 5.07% ML Muni 7-12 yrs Fund A Shares CPI
Trustees and Officers Thornburg New York Intermediate Municipal Fund Name, Address Position(s) Term of Principal Number of Other and Age (1) Held with Office Occupation(s) Portfolios Directorships Fund (2) and During Past in Fund Held by Length of 5 Years Complex Trustee or Time Overseen Nominee for Served by Trustee(2) Trustee Interested Trustees Garrett Chairman Trustee CEO, Chairman and controlling Eleven None Thornburg, of Trustees (3) Since shareholder of Thornburg 57 1987 (4) Investment Management, Inc. (investment adviser) and Thornburg Securities Corporation (securities dealer); Chairman of Thornburg Limited Term Municipal Fund, Inc. (registered investment company); CEO and Chairman of Thornburg Mortgage, Inc. (real estate investment trust); Chairman of Thornburg Mortgage Advisory Corporation (investment manager to Thornburg Mortgage, Inc.). Brian J. McMahon, Trustee, Trustee President and Managing Director Nine None 47 President, Since of Thornburg Investment Assistant 2001; Management, Inc.; President Secretary (5) President of Thornburg Limited Term Since 1997 Municipal Fund, Inc. (4)(6) Independent Trustees David A. Ater, Trustee Trustee Principal in Ater & Ater Nine Director of 54 since Associates, Santa Fe, New Thornburg 1994 (4) Mexico (developer, planner Mortgage, Inc. and broker of residential and (real estate commercial real estate); owner, investment trust) developer and broker for various real estate projects. David D. Chase, Trustee Trustee Chairman, President and CEO Eleven Director of 60 since of general partner of Vestor Thornburg 2001 (4) Partners, LP, Santa Fe, NM Limited Term (private equity fund); Chairman Municipal Fund, and CEO of Vestor Holdings, Inc. (registered Inc., Santa Fe, NM (merchant investment bank). company) Forrest S. Smith, Trustee Trustee Attorney in private practice Nine None 69 since and shareholder, Catron, Catron 1987 (4) & Sawtell (law firm), Santa Fe, NM. James W. Weyhrauch, Trustee Trustee Executive Vice President and Nine None 41 since Director, Nambe Mills, Inc. 1996 (4) (manufacturer) Santa Fe, NM. Officers of the Fund (who are not Trustees) (7) Dawn B. Fischer, Secretary; Secretary Vice President, Secretary and N/A N/A 56 Assistant and Managing Director, Thornburg Treasurer Assistant Investment Management, Inc.; Treasurer Secretary, Thornburg Limited Term Since 1987 Municipal Fund, Inc.; Secretary, (6) Thornburg Securities Corporation; Vice President, Daily Tax Free Income Fund, Inc. (registered investment company). Steven J. Bohlin, Vice President; Vice Vice President and Managing N/A N/A 45 Treasurer President Director of Thornburg Investment Since 1987; Management, Inc.; Vice President Treasurer of Thornburg Limited Term Since 1989 Municipal Fund, Inc. (6) George T.Strickland,Vice President Vice Vice President and Managing N/A N/A 40 President Director of Thornburg Investment Since 1999 Management, Inc.; Vice President (6) of Thornburg Limited Term Municipal Fund, Inc. William V. Fries, Vice President Vice Managing Director of N/A N/A 63 President Thornburg Investment Since 1995 Management, Inc. (6) Leigh Moiola, Vice President Vice Vice President and Managing N/A N/A 36 President Director of Thornburg Investment Since 2001 Management, Inc.; Vice President (6) of Thornburg Limited Term Municipal Fund, Inc. Kenneth Ziesenheim, Vice President Vice Managing Director of Thornburg N/A N/A 48 President Investment Management, Inc.; Since 1995 President of Thornburg Securities (6) Corporation; Vice President of Thornburg Limited Term Municipal Fund, Inc. Alexander Motola, Vice President Vice Managing Director of Thornburg N/A N/A 33 President Investment Management, Inc. Since 2001 since 2000; Vice President of (6) Thornburg Limited Term Municipal Fund, Inc. since 2001; Portfolio Manager, Insight Capital Research & Management, Inc., Walnut Creek, California 1995-2000. Dale Van Scoyk, Vice President Vice Account Manager for Thornburg N/A N/A 57 President Investment Management, Inc. Since 1998 since 1997, and Vice President (6) and Managing Director since 1999; Vice President of Thornburg Limited Term Municipal Fund, Inc. since 1999; National Account Manager for Heartland Funds 1993-1997. Wendy Trevisani, Vice President Vice Associate of Thornburg Investment N/A N/A 33 President Management, Inc. since 1999 and Since 1999 Vice President since 2000; Vice (6) President of Thornburg Limited Term Municipal Fund, Inc. 1999-2002; Sales Representative, Salomon Smith Barney 1996-1999. Joshua Gonze, Vice President Vice Associate (and since 1999 a N/A N/A 41 President Vice President of Thornburg Since 2001 Investment Management, Inc.); (6) Vice President of Thornburg Limited Term Municipal Fund, Inc. Since 2001; Associate Director, Corporate Credit Ratings, Standard & Poor's Corporation 1994-1996. Brad Kinkelaar, Vice President Vice Assistant Portfolio Manager of N/A N/A 36 President Thornburg Investment Management, Since 2001 Inc. since 1999; Vice President (6) of Thornburg Limited Term Municipal Fund, Inc. 2001-2002; Equity Investment Analyst, State Farm Insurance Companies 1996-1999. Kerry Lee, Vice President Vice Associate of Thornburg Investment N/A N/A 35 President Management, Inc.; Vice President Since 1999 of Thornburg Limited Term (6) Municipal Fund, Inc. 1999-2002 and Assistant Vice President 1998-1999. (1) Each person's address is 119 East Marcy Street, Santa Fe, New Mexico 87501. (2) The Fund is one of ten separate investment "funds" or "portfolios" of Thornburg Investment Trust (the "Trust"), organized as a Massachusetts business trust. The Trust currently has nine active funds, which are considered for certain regulatory purposes as parts of a "fund complex" with the two funds of Thornburg Limited Term Municipal Fund, Inc. Thornburg Investment Management, Inc. is the investment adviser to, and manages, the eleven funds of the Trust and Thornburg Limited Term Municipal Fund, Inc. (3) Mr. Thornburg is considered an "interested" Trustee under the Investment Company Act of 1940 because he is a director and controlling shareholder of Thornburg Investment Management, Inc. the investment adviser to the nine active funds of the Trust, and is the sole director and controlling shareholder of Thornburg Securities Corporation, the distributor of shares for the Trust. (4) Each Trustee serves in office until the election and qualification of a successor. (5) Mr. McMahon is considered an "interested" Trustee because he is the president of Thornburg Investment Management, Inc. (6) The Trust's president, secretary and treasurer each serves a one-year term or until the election and qualification of a successor; each other officer serves at the pleasure of the Trustees. (7) Assistant vice presidents, assistant secretaries and assistant treasurers are not shown. The Fund's Statement of Additional Information includes additional information about the Trustees and is available, without charge and upon request by calling 1-800-847-0200
Thornburg NEW YORK INTERMEDIATE MUNICIPAL FUND- A shares Outperformed Tax-Exempt Money Market Funds Investors sometimes ask us to compare New York Intermediate Municipal Fund to money market fund returns. These investments have certain differences, and investors in New York Intermediate Municipal Fund took more risk than money market fund investors to earn their higher returns. Return from a hypothetical $100,000 investment 9/5/97 (inception of Fund) through 12/31/02 (after sales charges and fund expenses) CDA Wiesenberger InvestmentView Tax-Exempt Money Market Average $14,210 Thornburg New York Intermediate Municipal Fund (after capital gains taxes) $29.920 Investment Manager Thornburg Investment Management, Inc. 119 East Marcy Street Santa Fe, New Mexico 87501 800.847.0200 Principal Underwriter Thornburg Securities Corporation 119 East Marcy Street Santa Fe, New Mexico 87501 800.847.0200 www.thornburg.com This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus, which includes information regarding the Fund's objectives and policies, experience of its management, marketability of shares, and other information. Performance data quoted represent past performance and do not guarantee future results. -----END PRIVACY-ENHANCED MESSAGE-----