-----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, VrQw6se/MoxmohysrPjm6OPgd9k5ENmbzNwT3YCYKVvBZEn+6PAmNsC9nbrKeqe0 8pXvb+seuXbS5fHC6YnYug== 0000927016-01-504037.txt : 20020412 0000927016-01-504037.hdr.sgml : 20020412 ACCESSION NUMBER: 0000927016-01-504037 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOOMIS SAYLES FUNDS CENTRAL INDEX KEY: 0000872649 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 043113285 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-06241 FILM NUMBER: 1802499 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CENTER CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6173103609 MAIL ADDRESS: STREET 1: ONE FINANCIAL CENTER CITY: BOSTON STATE: MA ZIP: 02111 N-30D 1 dn30d.txt LOOMIS SAYLES FUNDS [GRAPHIC] [GRAPHIC] [Graphic] EQUITY LOOMIS SAYLES AGGRESSIVE GROWTH FUND LOOMIS SAYLES EMERGING MARKETS FUND LOOMIS SAYLES GLOBAL TECHNOLOGY FUND LOOMIS SAYLES GROWTH FUND LOOMIS SAYLES INTERNATIONAL EQUITY FUND LOOMIS SAYLES RESEARCH FUND LOOMIS SAYLES SMALL CAP GROWTH FUND LOOMIS SAYLES SMALL CAP VALUE FUND LOOMIS SAYLES VALUE FUND (formerly Loomis Sayles Core Value Fund) LOOMIS SAYLES WORLDWIDE FUND [LOGO] Loomis Sayles Funds ANNUAL REPORT SEPTEMBER 30, 2001 TABLE OF CONTENTS Corporate Overview 1 Letter from the President 2 Economic and Market Overview 4 Institutional Class Average Annual Returns vs. Lipper Category Average and Lipper Category Index 6 Fund and Manager Reviews 8 Portfolio of Investments 28 Statements of Assets and Liabilities 70 Statements of Operations 72 Statements of Changes in Net Assets 74 Financial Highlights 84 Notes to Financial Statements 106 Report of Independent Accountants 119 2001 U.S. Tax and Distribution Information to Shareholders 120 Supplemental Information 121
CORPORATE OVERVIEW LOOMIS SAYLES FUNDS Loomis Sayles Funds is a Boston-based family of predominantly no-load mutual funds advised by Loomis, Sayles & Company, L.P. From the outset, Loomis Sayles has recognized the importance of maintaining an environment that provides our portfolio managers with the independence they need to perform effectively. This culture has enabled us to consistently attract talented investment professionals to our ranks -- to achieve the best possible results for our shareholders. In concert with one of the largest and most experienced staff of career analysts and economists in the industry today, Loomis Sayles' portfolio managers take the lead in uncovering investment opportunities in the ever-changing global markets. PHONE 800-626-9390 FOR INFORMATION ABOUT: . Establishing an account . Account procedures and status . Exchanges . Shareholder services PHONE 800-633-3330 FOR ALL OTHER FUND INFORMATION: To request any of the following, press the number 1 Automated account balances, last transaction, and distribution information 2 Speak to a customer service representative regarding an existing account 3 Net asset values and yields 4 Speak to a marketing representative 5 Advisory and broker/dealer services 6 Institutional and high net worth operations, trading and client services As always, we are interested in your comments and in answering any questions. For more complete information about any of the Loomis Sayles Funds, including charges and expenses, please call Loomis Sayles Distributors, L.P. for a free prospectus at 800-633-3330 Monday through Friday, 8:45 a.m. to 4:45 p.m. EST or visit www.loomissayles.com. Read it carefully before you invest or send money. [Graphic] Loomis Sayles Equity Funds 1 LETTER FROM THE PRESIDENT [PHOTO] Dear Shareholders: DANIEL J. FUSS Uncertainty and nervousness characterized the financial markets President and and the economy throughout the fiscal year. And, as the period Portfolio Manager drew to a close, the horrifying events of September 11 intensified these sentiments. One of the most important factors driving the securities markets over the last two decades has been peace among developed nations. As defense spending declined, the government's share of total economic activity gradually shrunk. This freed up capital and resources for the private economy, resulting in higher equity prices, lower interest rates and a gradual decline in the inflation rate. The nation's economy flourished.
With peace disrupted, this very supportive influence now has ended. Thus, a key underpinning for favorable market trends has been removed, and it obviously has implications for investors. Nevertheless, the implications may be no greater than in previous periods of unrest that I have witnessed during my 40-plus years in this industry. We at Loomis Sayles believe we can meet the challenges ahead, as long as we focus on disciplined principles and strategies that have been successful over time. Fundamental research has been the cornerstone of our investment philosophy since 1926 and continues to drive our investment-selection process. We believe research and the active management it supports offer excellent opportunities for attractive long-term investment performance, especially now. Throughout our firm's 75-year history, it has been our experience that actively managed stock and bond funds often excel after periods of market instability and uncertainty. Active managers--supported by a powerful research effort--can exploit market inefficiencies and volatility. Over time, the ability to take advantage of such market opportunities can prove extremely rewarding. A classic investment principle also demonstrated its validity during the past year--the need for broad portfolio diversification. Different asset classes and investment styles offer varying degrees of risk and reward, and they often respond differently to changing market and economic factors. As such, we believe the best way to achieve attractive long-term return potential is to invest in a mix of stock and bond mutual funds, both international and domestic, appropriate to your goals and risk tolerance. That way, you will be more likely to participate in market rallies and outperform in market downturns. We encourage you to remain committed to your investment plan and focus on performance generated over time--not returns realized in a single quarter or even in a single year. As an investor, it is crucial to maintain a long-term perspective, as it often takes several years for investments to realize their true and full potential. We appreciate your ongoing confidence in Loomis Sayles Funds, as we continue to fulfill our commitment to helping you realize your investment goals. Sincerely, /s/ Daniel J. Fuss Daniel J. Fuss President Loomis Sayles Funds [Graphic] Loomis Sayles Equity Funds 3 ECONOMIC AND MARKET OVERVIEW Annual Report for the Period Ended September 30, 2001 Stock Market Review After a twelve-month period (March 2000 - March 2001) in which the S&P 500 Index lost 22.00 percent of its value and the NASDAQ Index was down nearly 70.00 percent, the second quarter of 2001 gave some indication that the worst was over, and that the U.S. stock market was set for a recovery. Economic news was mixed, with positive signs coming from certain consumer sectors (housing, retail, consumer confidence) offsetting weaker signals being emitted by business (declining growth rates, reduced capital investments and expenditures). Unemployment, while above the recent lows of the past two years, was still comfortably below 5.00 percent. Inflation was well under control, with annualized rates running around 2.70 percent. For the second quarter, the S&P 500 Index (a good proxy for large company stocks) responded by going up 5.85 percent, and the Russell 2000 Index (a comparable measure of small company stocks) rose 14.26 percent, which could often be seen as a good year. But as if on a schedule, once the books were closed on the second quarter, the equity markets decided to reflect the bad news more than the good. As company after company either reported or warned of earnings weakness in July and August, the markets reverted back to their late-2000 form, with double-digit losses being felt in influential sectors such as consumer cyclicals, financial services, and technology. By September 10, the S&P 500 Index was down over 10.00 percent for the quarter, and the Russell 2000 Index had fallen nearly 14.00 percent. There is nothing that we can say about the events of September 11 that has not already been said. Both the psychological and economic effects of the terrorist attacks are going to be felt for a long time. The New York Stock Exchange was closed for four days, and when trading resumed, the market was characterized by high volatility, mostly on the down side, with all major indices falling 4.00-8.00 percent in the last two weeks of the third quarter. Pockets of strength, which could be found in the market, became more easily identifiable. Good relative returns could be found in traditional safe havens such as healthcare and food and beverage stocks, as well as defense contractors and telecommunications companies (perhaps in anticipation of an increase in teleconferencing and telecommuting in the business world). Stocks that suffered the most were those with the most aggressive growth expectations, highest historical price volatility, and lowest dividend payouts. The losses have not been confined to the U.S. markets, given the ever-increasing correlations among major world economies. While Japan and Germany have both held up reasonably well since the attacks, the EAFE Index still lost 14.00 percent of its value in the third quarter alone, and the numbers would have been worse had it not been for a 10-week stretch from early July to mid-September when the Euro gained 11.00 percent in value against the dollar. Bond Market Review Bonds have always been sensitive to two factors--economic strength and interest rates. In many cases, the two forces work in opposition (interest rates fall in a weak economy), and the resulting impact on the bond market is like a tug-of-war. In the six months ending September 30, 2001, the battle was won by interest rates, meaning that lower-quality debt instruments, which are more subject to economic influences, under-performed high-quality securities, which are more sensitive to interest rate changes. Twelve months ago, fixed income markets experienced an uncommon phenomenon known as an "inverted curve", which simply means that yields being paid on short- term securities are higher than those being paid on long-term securities. This is generally perceived as a leading indicator of economic (and subsequently capital market) weakness, for two reasons. First, the high yields on cash and similar instruments make them appealing places to store money. And second, banks, which borrow at short-term rates and lend at long-term rates, become more reluctant to make loans, thereby having a tightened effect on the money supply and market liquidity. This condition existed through the end of November 2000. The last two times the yield curve was inverted--the spring of 1989 and the summer of 1982--economic recessions followed approximately one year later. Alan Greenspan and the Federal Reserve Board of Governors have done their best to give the economy a boost by making money cheaper to borrow. The Federal discount rate, which began the year at 6.00 percent, was down to 2.50 percent by the end of September, thanks to eight separate rate cuts, five of which occurred since April 1. The Federal Reserve Board, however, can only exercise control over the short end of the yield curve; free market forces control the rest of the maturity spectrum, where most borrowing and lending takes place. Subsequently, the Federal Reserve Board is finding out, much like Japan's Ministry of Finance has seen, that its ability to influence the economy through short-term rate cuts is becoming increasingly limited. Japan's discount rate is effectively zero, yet tight lending standards and general pessimism have failed to stimulate loan demand as much as the Ministry may have hoped. Washington also tried to give the economy a boost in July 2001 with the issuance of tax rebate checks. This was the most immediately visible effect of lower tax rates, and is intended to shift more of the economy's purchasing power into the hands of private consumers, who have shown the greatest resistance to slowdown lately. Consumer confidence, however, was in a sharp decline, presumably due to the bear market and rising unemployment, even before September 11. Every sector of the investment grade bond market turned in double-digit returns over the last twelve months. Leading the way were bonds issued by foreign governments, single-A and AA-rated corporate bonds, and "seasoned" long bonds (issued prior to the year 2000 but still more than ten years from maturity) issued by the U.S. Treasury or government agencies. The catalyst for these high returns was the fact that the U.S. Treasury was using surplus revenues to buy back long bonds that it had issued in past years. Falling interest rates suppressed returns for fixed-rate mortgage securities somewhat, as homeowners paid off high-interest loans and refinanced into lower-interest loans. However, asset-backed bonds, which are similar in their potential for fluctuating prepayment rates, did well in the second half of the past year, as general economic weakness saw more debtors willing to just make minimum payments on their loans, prefering to hold their cash as a buffer against more adversity. Lagging well behind all of these sectors were high yield bonds, which trade more on their credit strength than on changes in interest rates. The universe of non-investment grade bonds was down more than 5% as a whole, with only those issues rated BB showing any positive return as a group. Most major foreign governments joined forces with the U.S. in cutting their interest rates in mid-September, as they too were faced with the now-inevitable prospect of recession. The eleven countries that make up "Euroland" (using the Euro as a common currency) had an aggregate GDP growth rate of only 0.20 percent in the second quarter, which was the weakest growth in eight years. [Graphic] Loomis Sayles Equity Funds 5 INSTITUTIONAL CLASS AVERAGE ANNUAL RETURNS VS. LIPPER CATEGORY AVERAGE AND LIPPER CATEGORY INDEX/(1)/ FOR THE PERIODS ENDED SEPTEMBER 30, 2001
- ----------------------------------------------------------------------------------------------- SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(2)(3) - ----------------------------------------------------------------------------------------------- LOOMIS SAYLES AGGRESSIVE GROWTH FUND -71.12% 12.30% NA NA 10.24% Lipper Mid-Cap Growth Funds Average -46.88% 6.75% NA NA 4.18% Rank 395/405 64/266 NA NA 34/188 Percentile 98 24 NA NA 18 Lipper Mid-Cap Growth Funds Index -48.39% 6.71% NA NA 4.12% LOOMIS SAYLES EMERGING MARKETS FUND -45.43% NA NA NA -10.48% Lipper Emerging Markets Funds Average -32.16% NA NA NA -16.01% Rank 183/184 NA NA NA 119/171 Percentile 99 NA NA NA 70 Lipper Emerging Markets Funds Index -31.61% NA NA NA -16.52% LOOMIS SAYLES GLOBAL TECHNOLOGY FUND -75.59% NA NA NA -50.49% Lipper Science and Technology Funds Average -69.58% NA NA NA -49.49% Rank 231/336 NA NA NA 97/178 Percentile 69 NA NA NA 55 Lipper Science and Technology Funds Index -67.80% NA NA NA -47.01% LOOMIS SAYLES GROWTH FUND -50.83% -2.13% 2.58% 7.22% 8.36% Lipper Large-Cap Growth Funds Average -43.77% -0.86% 6.01% 9.79% 9.81% Rank 648/817 331/508 242/300 76/91 75/91 Percentile 80 66 81 83 82 Lipper Large-Cap Growth Funds Index -45.68% -3.05% 5.73% 10.15% 10.02% LOOMIS SAYLES INTERNATIONAL EQUITY FUND -34.45% 5.14% 3.41% 6.16% 6.28% Lipper International Funds Average -30.93% -0.13% 1.02% 5.41% 5.34% Rank 490/713 61/525 73/332 20/55 18/53 Percentile 69 12 22 36 34 Lipper International Funds Index -28.60% 0.33% 2.14% 5.95% 5.93%
Note: Past performance is no guarantee of future performance. Average annual returns assume reinvestment of dividends and capital gains distributions. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. /(1)/Lipper Category Average total return represents the average annual total return for all funds in each fund's corresponding investment category as determined by Lipper Inc. The Lipper Category Index total return represents the average annual total return of 30 funds, or 10 funds for the Lipper Emerging Markets Funds Index, Lipper Global Flexible Portfolio Funds Index and Lipper Science and Technology Funds Index in each fund's corresponding investment category as determined by Lipper. Rankings are based on the total return of each fund for the period relative to the total return of all funds in that fund's corresponding investment category. It is not possible to invest directly in an index. Source: Lipper, Inc.
- -------------------------------------------------------------------------------------------------- SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(2)(3) - -------------------------------------------------------------------------------------------------- LOOMIS SAYLES RESEARCH FUND -34.68% NA NA NA -27.32% Lipper Large-Cap Core Funds Average -27.41% NA NA NA -23.13% Rank 613/667 NA NA NA 525/660 Percentile 92 NA NA NA 80 Lipper Large-Cap Core Funds Index -27.89% NA NA NA -23.66% LOOMIS SAYLES SMALL CAP GROWTH FUND -65.17% -1.49% NA NA -0.18% Lipper Small-Cap Growth Funds Average -38.23% 9.47% NA NA 4.34% Rank 343/347 218/252 NA NA 126/167 Percentile 99 87 NA NA 75 Lipper Small-Cap Growth Funds Index -40.72% 9.07% NA NA 3.51% LOOMIS SAYLES SMALL CAP VALUE FUND 3.87% 12.23% 10.39% 14.24% 15.18% Lipper Small-Cap Value Funds Average 4.47% 11.38% 9.18% 12.03% 12.19% Rank 145/260 81/193 39/102 7/30 6/29 Percentile 56 42 38 23 20 Lipper Small-Cap Value Funds Index 2.33% 9.21% 8.69% 11.55% 11.71% LOOMIS SAYLES VALUE FUND -7.05% 2.10% 7.48% 11.03% 10.86% Lipper Large-Cap Value Funds Average -12.32% 3.82% 8.21% 11.29% 11.37% Rank 59/281 135/199 82/141 26/47 30/46 Percentile 21 68 58 55 64 Lipper Large-Cap Value Funds Index -15.60% 3.84% 9.19% 11.99% 12.04% LOOMIS SAYLES WORLDWIDE FUND -15.03% 16.75% 9.18% NA 9.12% Lipper Global Flexible Portfolio Funds Average -17.10% 3.38% 5.67% NA 5.52% Rank 32/89 2/81 6/54 NA 5/48 Percentile 36 3 11 NA 11 Lipper Global Flexible Portfolio Funds Index -17.21% 4.65% 5.64% NA 5.74%
/(2)/Actual Inception Dates: Aggressive Growth Fund December 31, 1996 Emerging Markets Fund November 9, 1999 Global Technology Fund January 31, 2000 Growth Fund May 16, 1991 International Equity Fund May 10, 1991 Research Fund July 31, 2000 Small Cap Growth Fund December 31, 1996 Small Cap Value Fund May 13, 1991 Value Fund May 13, 1991 Worldwide Fund May 1, 1996
/(3)/Lipper index and ranking performance data is reported only as of month end. For each Fund with an inception date other than at month end, Lipper index data is reported as of the month end closest to the Fund's inception date (e.g., for a Fund with an inception date of November 9, 1999, index performance data is reported as of October 31, 1999). Lipper ranking data is reported as of the month end following the Fund's inception date. [Graphic] Loomis Sayles Equity Funds 7 FUND AND MANAGER REVIEW [PHOTO] [PHOTO] Loomis Sayles Aggressive Growth Fund CHRISTOPHER R. ELY DAVID L. SMITH Key Fund Facts Objective| Long-term capital growth Strategy| Invests primarily in stocks with market capitalization falling within the capitalization range of the Russell Midcap Growth Index [PHOTO] Fund Inception Date| 12/31/96 PHILIP C. FINE Commencement of Operations of Class| Institutional: 1/2/97; Retail: 1/2/97; Admin: 7/31/00 Expense Ratio| Institutional: 1.00%; Retail: 1.25%; Admin: 1.50% Total Net Assets (all classes)| $60.2 Million
- --------------------------------------------------------- PERFORMANCE For the one-year period ended September 30, 2001, the Institutional, Retail and Admin classes of the Aggressive Growth Fund returned -71.12%, -71.21% and - -71.26%, respectively, compared to the -51.77% return for the Fund's benchmark, the Russell Midcap Growth Index. The total return for the Lipper Mid-Cap Growth Funds Average was -46.88% for the same period. PORTFOLIO REVIEW Throughout the year we sought to remain true to the Fund's style to invest generally in emerging growth stocks. This policy constrained performance relative to some of the Fund's peers. More important was the impact of poor stock selection and the Fund's overweight position in technology issues. In retrospect, we clearly underestimated the velocity and depth of the economic downturn and maintained an overly aggressive investment posture. As such, the Fund had a higher degree of volatility than its benchmark, which hurt performance during this bear market. Stable growth stocks in more defensive industries, such as health care, generated the best relative performance for the Fund during the year. In particular, the Fund enjoyed positive results from specialty pharmaceuticals, health care services and biotechnology stocks during the year. Technology was the weakest sector, hurt by the combination of high price/earnings multiples and decelerating earnings. PORTFOLIO POSITIONING Our objective is to differentiate between fundamentally sound companies whose growth has slowed due to macroeconomic conditions and those that have under-performed for company-specific reasons. The silver lining in this current downturn is we believe that some terrific growth companies have been marked down to the point where valuations are quite compelling. We have attempted to take advantage of this scenario to strike a more equitable balance between companies with highly visible growth prospects, such as health care companies, and those whose growth is more leveraged to a turn in the economic cycle, including technology names. /s/ Christopher Ely /s/ David L. Smith /s/ Phillip Fine Christopher R. Ely David L. Smith Philip C. Fine AVERAGE ANNUAL RETURNS-PERIODS ENDED SEPTEMBER 30, 2001
- ---------------------------------------------------------------------------------- SINCE 1 YEAR 3 YEARS INCEPTION(a) - ---------------------------------------------------------------------------------- LOOMIS SAYLES AGGRESSIVE GROWTH FUND (INSTITUTIONAL) -71.12% 12.30% 10.24% LOOMIS SAYLES AGGRESSIVE GROWTH FUND (RETAIL) -71.21% 11.97% 9.93% LOOMIS SAYLES AGGRESSIVE GROWTH FUND (ADMIN)/(b)/ -71.26% 11.48% 9.41% Lipper Mid-Cap Growth Funds Index/(c)/ -48.39% 6.71% 4.12% Lipper Multi-Cap Growth Funds Index/(c)/ -49.06% 0.42% 4.61% Russell Midcap Growth Index/(d)/ -51.77% 2.00% 4.13%
CUMULATIVE PERFORMANCE/(e)/--12/31/96 TO 9/30/01 [CHART]
Lipper Multi-Cap Loomis Sayles Aggressive Russell Midcap Lipper Mid-Cap Growth Growth Funds Index Growth Fund Growth Index Funds Index 12/31/1996 10000 10000 10000 10000 01/31/97 10480 10620 10443 10256 02/28/97 10191 10290 10213 9574 03/31/97 9665 9630 9635 8846 04/30/97 9971 9740 9872 8769 05/31/97 10817 10620 10756 9912 06/30/97 11223 10720 11054 10329 07/31/97 12257 11810 12112 10960 08/31/97 11921 11540 11994 10929 09/30/97 12675 12570 12601 11712 10/31/97 12115 12290 11970 11056 11/30/97 12191 11910 12096 10879 12/31/97 12295 12265 12254 11134 01/31/98 12349 11625 12033 10923 02/28/98 13376 12553 13165 11851 03/31/98 14029 12980 13717 12465 04/30/98 14191 13322 13903 12519 05/31/98 13652 12724 13331 11789 06/30/98 14354 13375 13708 12332 07/31/98 14004 12692 13121 11511 08/31/98 11412 10119 10617 9029 09/30/98 12234 11219 11420 9971 10/31/98 12922 11977 12261 10338 11/30/98 13821 12073 13088 11123 12/31/98 15344 13680 14443 12558 01/31/99 16287 13813 14876 13181 02/28/99 15438 13537 14149 12158 03/31/99 16317 17363 14937 13024 4/30/1999 16713 18248 15617 13559 5/31/1999 16391 18923 15416 13502 6/30/1999 17537 21400 16493 14590 7/31/1999 17142 21234 15968 14391 8/31/1999 16970 22473 15802 14318 9/30/1999 16873 22207 15667 14736 10/31/1999 18062 27803 16879 16039 11/30/1999 19510 32629 18626 18050 12/31/1999 22456 40738 21851 21816 1/31/2000 22229 41880 21847 21441 2/29/2000 25782 56943 26440 26814 3/31/2000 25681 51718 26467 24927 04/30/2000 23528 46828 23898 21639 05/31/2000 21941 42110 22156 19693 06/30/2000 24117 48073 24507 22754 07/31/2000 23360 46932 22955 21810 08/31/2000 25890 55547 26417 24662 09/30/2000 24317 55028 25125 23477 10/31/2000 22905 46678 23406 21579 11/30/2000 19153 34943 18320 17066 12/31/2000 19750 38459 19284 18296 1/31/2001 20150 35283 20386 18545 2/28/2001 17201 27549 16860 15763 3/31/2001 15357 23577 14447 14091 4/30/2001 17232 27444 16855 15948 5/31/2001 17139 26166 16776 16080 6/30/2001 16834 25370 16784 16017 7/31/2001 15925 22838 15652 15175 8/31/2001 14551 19944 14518 14158 9/30/2001 12388 15890 12119 12116
Foreign investments involve special risks including greater economic, political and currency fluctuation risks, which may be even greater in emerging markets. In addition, foreign countries may have different accounting standards than those of the U.S., which may adversely affect the value of the Fund. Small and mid-cap stocks may be more volatile and subject to wider value fluctuations than larger, more established companies. The secondary market of small and mid-cap stocks may be less liquid, or harder to sell, which could also adversely impact the Fund's value. Note: Past performance is no guarantee of future performance. Average annual returns assume reinvestment of dividends and capital gains distributions. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. (a)Inception date of the Institutional and Retail Classes of shares is December 31, 1996. Inception date of the Admin Class of shares is July 31, 2000. (b)Performance shown for periods prior to the inception date of the Admin Class (July 31, 2000) represents the performance of the Institutional Class of shares during the periods shown adjusted to reflect the current levels of management and 12b-1 fees payable by the respective Class of shares. (c)The Lipper Mid-Cap Growth Funds Index is an equally weighted unmanaged index of typically the 30 largest mutual funds within the mid-cap growth funds investment objective. The Lipper Multi-Cap Growth Funds Index is an equally weighted unmanaged index of typically the 30 largest mutual funds within the multi-cap growth funds investment objective. Returns are adjusted for the reinvestment of capital gains distributions and income dividends. It is not possible to invest directly in an index. Source: Lipper Inc. (d)The Russell Midcap Growth Index is an unmanaged index which measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. The Index returns have not been lowered for ongoing management and operating expenses applicable to mutual fund investments. It is not possible to invest directly in an index. (e)Cumulative performance is shown for the Institutional Class of shares. Performance of the Retail and Admin Classes of shares would, due to the higher fees paid by the Retail and Admin Classes of shares, be lower. [Graphic] Loomis Sayles Equity Funds 9 FUND AND MANAGER REVIEW [PHOTO] [PHOTO] Loomis Sayles Emerging Markets Fund ESWAR MENON ALEXANDER MUROMCEW Key Fund Facts Objective| Long-term capital growth Strategy| Invests primarily in stocks of issuers located in countries with emerging securities markets Fund Inception Date| 11/9/99 [PHOTO] Commencement of Operations of Class| JOHN TRIBOLET Institutional: 11/9/99; Retail: 5/9/00 Expense Ratio| Institutional: 2.25%; Retail: 2.50% Total Net Assets (all classes)| $1.8 Million
- --------------------------------------------------------- PERFORMANCE For the one-year period ended September 30, 2001, the Institutional and Retail classes of the Emerging Markets Fund returned -45.43% and -45.66%, respectively, compared to the -33.16% return for the Fund's benchmark, the Morgan Stanley Capital International Emerging Markets Free (MSCI EMF) Index GD. The total return for the Lipper Emerging Markets Funds Average was -32.16% for the same period. PORTFOLIO REVIEW The year was a challenging one for growth companies and the Fund. In particular, technology companies continued to decline in 2001, with no signs of immediate recovery. We attribute the Fund's relative under-performance to an overweight position in the information technology sector and to poor stock selection in the telecommunications services sector. From a country perspective, overweight positions in Singapore and Israel, an underweight in Malaysia, and poor stock selection in Brazil, India and Mexico had the largest negative effects on the Fund during the year. PORTFOLIO POSITIONING We believe that the portfolio is well diversified from a country and sector standpoint, with large underweights in Malaysia and Taiwan and the energy and materials sectors and overweights in India and Israel and the financial and information technology sectors. We believe that the short-term emerging market outlook remains volatile and fragile, but long-term prospects are favorable, due to solid U.S. and European monetary and fiscal policies, including the already enacted U.S. tax deduction; continuing Japanese reforms; and increasing free trade. We feel that near term, foreign markets potentially may hold up better than the U.S. market, because we feel that foreign markets should be less affected by the slowing demand resulting from the September 11 attacks. In addition, we believe that there may be a positive currency effect, with monies flowing out of the U.S. dollar and into other currencies. /s/ Eswar Menon /s/ Alexander Moromcew /s/ John Tribolet Eswar Menon Alexander Muromcew John Tribolet AVERAGE ANNUAL RETURNS-PERIODS ENDED SEPTEMBER 30, 2001
---------------------------------------------------------------------------- SINCE 1 YEAR INCEPTION(a) ---------------------------------------------------------------------------- LOOMIS SAYLES EMERGING MARKETS FUND (INSTITUTIONAL) -45.43% -10.48% LOOMIS SAYLES EMERGING MARKETS FUND (RETAIL)/(b)/ -45.66% -10.84% Lipper Emerging Markets Funds Index/(c)/ -31.61% -16.52% Morgan Stanley Capital International EMF Index GD/(d)/ -33.16% -19.67%
CUMULATIVE PERFORMANCE/(e)/--11/9/99 TO 9/30/01 [CHART]
Lipper Emerging Loomis Sayles Morgan Stanley Capital Markets Fund Index Emerging Markets Fund International EMF Index GD 11/9/1999 10000 10000 10000 11/30/1999 11103 13290 10897 12/31/1999 13054 17190 12282 1/31/2000 12902 16360 12356 2/29/2000 13286 20570 12519 3/31/2000 13326 21250 12580 04/30/2000 11876 17430 11387 05/31/2000 11244 15400 10917 06/30/2000 11801 16400 11301 07/31/2000 11320 15700 10720 08/31/2000 11437 16600 10773 09/30/2000 10344 14860 9832 10/31/2000 9572 13860 9119 11/30/2000 8706 11514 8322 12/31/2000 9021 12229 8523 1/31/2001 10066 13641 9693 2/28/2001 9285 11943 8933 3/31/2001 8400 10184 8057 4/30/2001 8829 11289 8455 5/31/2001 9071 11238 8556 6/30/2001 8913 11013 8381 7/31/2001 8360 10328 7851 8/31/2001 8251 9735 7774 9/30/2001 7074 8109 6571
Foreign investments involve special risks including greater economic, political and currency fluctuation risks, which may be even greater in emerging markets. In addition, foreign countries may have different accounting standards than those of the U.S., which may adversely affect the value of the Funds. Note: Past performance is no guarantee of future performance. Average annual returns assume reinvestment of dividends and capital gains distributions. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. (a)Inception date of the Institutional Class of shares is November 9, 1999. Since Lipper Emerging Markets Funds Index and Morgan Stanley Capital International EMF Index GD performance data is not available coincident with the Fund's inception date, comparative performance is presented from the month end closest to the Fund's inception date (October 31, 1999). Inception date of the Retail Class of shares is May 9, 2000. (b)Performance shown for the period prior to the inception date of the Retail Class (May 9, 2000) represents the performance of the Institutional Class of shares during the period shown, adjusted to reflect the current fee payable by the respective class of shares (i.e. a .25% 12b-1 fee). (c)The Lipper Emerging Markets Funds Index is an equally weighted unmanaged index of typically the 10 largest mutual funds within the emerging markets funds investment objective. Returns are adjusted for the reinvestment of capital gains distributions and income dividends. It is not possible to invest directly in an index. Source: Lipper Inc. (d)The Morgan Stanley Capital International EMF Index GD is an unmanaged regional index comprised of 26 emerging market countries, with gross dividends reinvested. The Index returns have not been reduced for ongoing management and operating expenses applicable to mutual funds. It is not possible to invest directly in an index. (e)Cumulative performance is shown for the Institutional Class of shares. Since index performance data is not available coincident with the Fund's inception date, the beginning value of the index is the value as of the month end closest to the Fund's inception date (October 31, 1999). Performance of the Retail Class of shares would, due to the higher fees paid by the Retail Class of shares, be lower. [Graphic] Loomis Sayles Equity Funds 11 FUND AND MANAGER REVIEW [PHOTO] [PHOTO] Loomis Sayles Global Technology Fund CHRISTOPHER R. ELY ESWAR MENON Key Fund Facts Objective| Long-term capital growth Strategy| Invests in stocks of technology companies located in the United States or abroad
Fund Inception Date| 1/31/00 Commencement of Operations of Class| Institutional: 1/31/00; Retail: 1/31/00 Expense Ratio| Institutional: 1.50%; Retail: 1.75% Total Net Assets (all classes)| $2.0 Million - --------------------------------------------------------- PERFORMANCE For the one-year period ended September 30, 2001, the Institutional and Retail classes of the Global Technology Fund returned -75.59% and -75.62%, respectively, compared to the -28.14% return for the Fund's benchmark, the Morgan Stanley Capital International World Index ND. The total return for the Lipper Science & Technology Funds Average was -69.58% for the same period. PORTFOLIO REVIEW The past year remained dismal for growth investors and particularly grim for technology fans. Since the spring of 2000, technology companies throughout the world have suffered earnings disappointments and downgrades and have experienced sharp stock price declines. The dramatically slowing economy along with the ongoing collapse of Internet names and a significant tightening of the capital markets turned what had been a sharp correction into a severe bear market. Given the difficult environment for technology, there were many losers in the portfolio. And although the portfolio is diversified across a number of technology focused industries, the declines were widespread. We eliminated several technology stocks due to poor fundamental performance and after considering the difficult environment. In particular, we reduced exposure to information technology due to continued revenue and earnings shortfalls, primarily in the software sector. Nevertheless, we maintained an overweight position in information technology, and this overweight, combined with poor stock performances in the sector, accounted for much of the Fund's relative underperformance. We also reduced the portfolio's weighting in Japan, as we took profits on many stocks that had rallied due to the Japanese prime minister's revitalization plans. From a country perspective, holdings in Canada, France, India, Israel and Singapore were negative influences on performance. PORTFOLIO POSITIONING We believe that the portfolio is well diversified from a country and sector standpoint, with large under-weightings in Japan, Germany and the United Kingdom and in the telecommunications services sector. We will strive to continue to focus on high-quality technology firms that we believe are leaders in their market niches. We believe that these companies will drive the Fund's performance once this current storm subsides. /s/ Christopher Ely /s/ Eswar Menon Christopher R. Ely Eswar Menon AVERAGE ANNUAL RETURNS-PERIODS ENDED SEPTEMBER 30, 2001
- ----------------------------------------------------------------------------------------------- SINCE 1 YEAR INCEPTION(a) - ----------------------------------------------------------------------------------------------- LOOMIS SAYLES GLOBAL TECHNOLOGY FUND (INSTITUTIONAL) -75.59% -50.49% LOOMIS SAYLES GLOBAL TECHNOLOGY FUND (RETAIL) -75.62% -50.78% Lipper Science and Technology Funds Index/(b)/ -67.80% -47.01% Morgan Stanley Capital International World Index ND/(c)/ -28.14% -18.89% Morgan Stanley Capital International Information Technology Index GD/(d)/ -62.78% -48.18%
CUMULATIVE PERFORMANCE/(e)/--1/31/00 TO 9/30/01 [CHART]
Lipper Science & Loomis Sayles Global Morgan Stanley Morgan Stanley Capital Technology Technology Fund Capital International International Information Fund Index World Index ND Technology GD 1/31/2000 10000 10000 10000 10000 2/29/2000 12694 13520 10026 11168 3/31/2000 12307 14110 10717 11819 04/30/2000 10870 12130 10263 10874 05/31/2000 9559 10880 10002 9769 06/30/2000 11008 12740 10338 10724 07/31/2000 10425 11740 10045 10066 08/31/2000 12007 13690 10371 11027 09/30/2000 10776 12700 9818 8984 10/31/2000 9594 10790 9652 8296 11/30/2000 7121 7820 9065 6844 12/31/2000 7047 8330 9211 6273 1/31/2001 7761 8410 9392 7093 2/28/2001 5738 6090 8598 5190 3/31/2001 4898 4790 8027 4575 4/30/2001 5854 5620 8619 5359 5/31/2001 5581 5260 8506 5055 6/30/2001 5489 5080 8239 4929 7/31/2001 5049 4530 8128 4626 8/31/2001 4418 3870 7737 4035 9/30/2001 3470 3100 7054 3342
Foreign investments involve special risks including greater economic, political and currency fluctuation risks, which may be even greater in emerging markets. In addition, foreign countries may have different accounting standards than those of the U.S., which may adversely affect the value of the Fund. The Fund concentrates its investments in the technology sector, which may perform differently and be more or less volatile than the market as a whole, and accordingly, that sector may be more susceptible to economic, business or other developments, all of which may impact the value of the Fund. Note: Past performance is no guarantee of future performance. Average annual returns assume reinvestment of dividends and capital gains distributions. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. (a)Inception date of the Institutional and Retail Class of shares is January 31, 2000. (b)The Lipper Science & Technology Funds Index is an equally weighted unmanaged index of typically the 10 largest mutual funds within the science & technology funds investment objective. Returns are adjusted for the reinvestment of capital gains distributions and income dividends. It is not possible to invest directly in an index. Source: Lipper Inc. (c)The Morgan Stanley Capital International World Index ND is an unmanaged regional index comprised of 22 developed market countries, with net dividends reinvested (net of foreign withholding tax). The Index returns have not been reduced for ongoing management and operating expenses applicable to mutual funds. It is not possible to invest directly in an index. (d)The Morgan Stanley Capital International Information Technology Index GD, is an unmanaged regional and sectorial index comprised of 22 developed market countries, with gross dividends reinvested. It is not possible to invest directly in an index. (e)Cumulative performance is shown for the Institutional Class of shares. Performance of the Retail Class of shares would, due to the higher fees paid by the Retail Class of shares, be lower. [Graphic] Loomis Sayles Equity Funds 13 FUND AND MANAGER REVIEW [PHOTO] [PHOTO] Loomis Sayles Growth Fund MARK B. BARIBEAU PAMELA N. CZEKANSKI Key Fund Facts Objective| Long-term growth of capital Strategy| Invests in stocks with large market capitalization [PHOTO] Fund Inception Date| 5/16/91 RICHARD SKAGGS Commencement of Operations of Class| Institutional: 5/16/91; Retail: 1/2/97; Admin: 7/31/00 Expense Ratio| Institutional: 0.85%; Retail: 1.10%; Admin: 1.35% Total Net Assets (all classes)| $22.2 Million
- --------------------------------------------------------- PERFORMANCE For the one-year period ended September 30, 2001, the Institutional, Retail and Admin classes of the Growth Fund returned -50.83%, -50.90% and -50.94%, respectively, compared to the -26.63% return for the Fund's benchmark, the Standard & Poor's 500 Index. The total return for the Lipper Large-Cap Growth Funds Average was -43.77% for the same period. PORTFOLIO REVIEW Large-cap growth stocks declined significantly during the 12-month period, led by the dramatic drop in technology stock prices. Earnings disappointments, weakening revenue growth, and credit problems throughout the technology sector contributed to the downturn. In addition, profit outlooks deteriorated due to an economy on the brink of recession. Given this activity, we reduced the Fund's overall technology weighting, but the aggressive nature of the technology holdings we held and the subsequent earnings losses those holdings experienced hurt the Fund's relative performance. In addition to reducing the Fund's technology weighting, we also cut back on exposure to financial services, energy, utilities and consumer discretionary stocks. The fallout from the September 11 terrorist attacks disrupted the consumer discretionary sector, one of the Fund's strongest. In particular, retail stocks posted negative results in the third quarter of calendar 2001--the first time the sector showed negative performance this year. On the bright side, the sharp market correction allowed us to take advantage of good value opportunities. In general, we limited our purchases to companies with strong earnings visibility, ranging from household products companies to Internet names. We also explored opportunities among insurers, as we feel it appears that a major new pricing cycle for property/casualty and reinsurance companies should benefit the industry going forward. PORTFOLIO POSITIONING We will continue to focus on identifying companies that we believe can emerge from this downturn and lead their industries when growth resumes. As such, we've altered our strategy to reflect the persistent weakness in the economy and the reported corporate profits growth for more cyclically sensitive companies. /s/ Mark Baribeau /s/ Pamela N. Czekanski /s/ Richard Skaggs Mark B. Baribeau Pamela N. Czekanski Richard Skaggs AVERAGE ANNUAL RETURNS-PERIODS ENDED SEPTEMBER 30, 2001
- ---------------------------------------------------------------------------------------- SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(a) - ---------------------------------------------------------------------------------------- LOOMIS SAYLES GROWTH FUND (INSTITUTIONAL) -50.83% -2.13% 2.58% 7.22% 8.36% LOOMIS SAYLES GROWTH FUND (RETAIL)/(b)/ -50.90% -2.35% 2.35% 7.10% 8.24% LOOMIS SAYLES GROWTH FUND (ADMIN)/(b)/ -50.94% -2.95% 1.86% 6.71% 7.86% Lipper Large-Cap Growth Funds Index/(c)/ -45.68% -3.05% 5.73% 10.15% 10.02% S&P 500 Index/(d)/ -26.63% 2.03% 10.22% 12.70% 12.32%
CUMULATIVE PERFORMANCE/(e)/ --5/16/91 TO 9/30/01 [CHART]
Lipper Large-Cap Loomis Sayles S&P 500 Growth Funds Index Growth Fund Index 5/16/1991 10000 10000 10000 6/30/1991 9455 10660 9542 7/31/1991 9974 11640 9987 8/31/1991 10313 12146 10223 9/30/1991 10207 12340 10052 10/31/1991 10369 12760 10187 11/30/1991 9999 11963 9777 12/31/1991 11190 13421 10895 1/31/1992 11171 13198 10692 2/29/1992 11242 13332 10830 3/31/1992 10865 12382 10620 4/30/1992 10811 11778 10932 5/31/1992 10927 12237 10985 6/30/1992 10608 11812 10822 7/31/1992 10993 12270 11264 8/31/1992 10800 12035 11033 9/30/1992 10994 12214 11163 10/31/1992 11216 12874 11201 11/30/1992 11788 13566 11583 12/31/1992 11961 13924 11725 1/31/1993 12012 14080 11823 2/28/1993 11795 13924 11984 3/31/1993 12170 14293 12237 4/30/1993 11795 13857 11941 5/31/1993 12240 14583 12261 6/30/1993 12338 14673 12297 7/31/1993 12254 14662 12247 8/31/1993 12763 15310 12712 9/30/1993 12954 15489 12614 10/31/1993 13102 15522 12875 11/30/1993 12837 14896 12753 12/31/1993 13236 15220 12907 1/31/1994 13718 15769 13346 2/28/1994 13496 15196 12983 3/31/1994 12835 14624 12417 4/30/1994 12897 14752 12577 5/31/1994 12975 14787 12783 6/30/1994 12491 14063 12470 7/31/1994 12850 14542 12879 8/31/1994 13508 15033 13407 9/30/1994 13187 14659 13079 10/31/1994 13524 15231 13373 11/30/1994 13026 14530 12886 12/31/1994 13127 14665 13077 1/31/1995 13229 14840 13416 2/28/1995 13685 15239 13939 3/31/1995 14073 15650 14351 4/30/1995 14457 15849 14773 5/31/1995 14935 16354 15364 6/30/1995 15698 17421 15720 7/31/1995 16552 18243 16242 8/31/1995 16644 18665 16283 9/30/1995 17262 19134 16970 10/31/1995 17164 18970 16909 11/30/1995 17704 19404 17651 12/31/1995 17711 19197 17991 1/31/1996 18232 19172 18603 2/29/1996 18642 19788 18776 3/31/1996 18651 19813 18957 4/30/1996 19094 20957 19236 5/31/1996 19658 21498 19733 6/30/1996 19481 21536 19808 7/31/1996 18438 19587 18933 8/31/1996 18991 20417 19332 9/30/1996 20313 21811 20421 10/31/1996 20566 22700 20983 11/30/1996 21896 23655 22569 12/31/1996 21352 23011 22122 1/31/1997 22706 25048 23504 2/28/1997 22380 23661 23688 3/31/1997 21233 22257 22715 4/30/1997 22398 22069 24071 5/31/1997 23918 24243 25537 6/30/1997 24920 25031 26683 7/31/1997 27301 27565 28804 8/31/1997 25812 26945 27190 9/30/1997 27238 29336 28679 10/31/1997 26292 29035 27721 11/30/1997 26877 28149 29005 12/31/1997 27244 28650 29503 1/31/1998 27726 27470 29829 2/28/1998 29843 29467 31981 3/31/1998 31232 30487 33619 4/30/1998 31755 31372 33957 5/31/1998 31045 30102 33373 6/30/1998 32822 31463 34729 7/31/1998 32806 29762 34359 8/31/1998 27449 23796 29399 9/30/1998 29446 26427 31274 10/31/1998 31345 28242 33818 11/30/1998 33497 28423 35870 12/31/1998 37180 32336 37934 1/31/1999 39594 33327 39521 2/28/1999 37968 31964 38292 3/31/1999 40127 34844 39826 4/30/1999 40264 35309 41367 5/31/1999 38930 34318 40390 6/30/1999 41636 36765 42636 7/31/1999 40329 35154 41300 8/31/1999 40338 35402 41096 9/30/1999 39928 34597 39969 10/31/1999 42990 37229 42499 11/30/1999 45115 39806 43372 12/31/1999 50125 46088 45917 1/31/2000 48113 44274 43609 2/29/2000 50644 49817 42784 3/31/2000 54198 51160 46968 4/30/2000 50004 47096 45555 5/31/2000 47126 43972 44621 6/30/2000 50242 48372 45721 7/31/2000 49224 47935 45006 8/31/2000 53482 53109 47801 9/30/2000 49403 50388 45278 10/31/2000 46791 46592 45086 11/30/2000 40513 38622 41532 12/31/2000 40261 38657 41735 1/31/2001 41433 37590 43216 2/28/2001 35018 33109 39275 3/31/2001 31380 30229 36787 4/30/2001 34749 32505 39646 5/31/2001 34485 31438 39912 6/30/2001 33491 31047 38940 7/31/2001 32291 29695 38557 8/31/2001 29836 27419 36143 9/30/2001 26836 24774 33221
Note: Past performance is no guarantee of future performance. Average annual returns assume reinvestment of dividends and capital gains distributions. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. (a)Inception date of the Institutional Class of shares is May 16, 1991. Since Lipper Large-Cap Growth Funds Index and S&P 500 Index performance data is not available coincident with the Fund's inception date, comparative performance is presented from the month end closest to the Fund's inception date (May 31, 1991). Inception dates of the Retail and Admin Classes of shares are December 31, 1996 and July 31, 2000, respectively. (b)Performance shown for periods prior to the inception date of the Retail Class (December 31, 1996) and the Admin Class (July 31, 2000) represents the performance of the Institutional Class of shares during the periods shown, adjusted to reflect the current levels of management and 12b-1 fees payable by the respective classes of shares. (c)The Lipper Large-Cap Growth Funds Index is an equally weighted unmanaged index of typically the 30 largest mutual funds within the large-cap growth funds investment objective. Returns are adjusted for the reinvestment of capital gains distributions and income dividends. It is not possible to invest directly in an index. Source: Lipper Inc. (d)S&P 500 Index is a capitalization-weighted, unmanaged total return index comprised of 500 widely held common stocks, representing industrial, utility, transportation, and financial companies traded on the New York Stock Exchange, the American Stock Exchange and in the over-the-counter market. The Index returns have not been reduced for ongoing management and operating expenses applicable to mutual fund investments. It is not possible to invest directly in an index. (e)Cumulative performance is shown for the Institutional Class of shares. Since index performance data is not available coincident with the Fund's inception date, the beginning value of the index is the value as of the month end closest to the Fund's inception date (May 31, 1991). Performance of the Retail and Admin Classes of shares would, due to the higher fees paid by the Retail and Admin Classes of shares, be lower. [Graphic] Loomis Sayles Equity Funds 15 FUND AND MANAGER REVIEW [PHOTO] [PHOTO] Loomis Sayles International Equity Fund ESWAR MENON ALEXANDER MUROMCEW Key Fund Facts Objective| High total investment return Strategy| Invests primarily in stocks of companies organized or head-quartered outside of the United States [PHOTO] Fund Inception Date| 5/10/91 JOHN TRIBOLET Commencement of Operations of Class| Institutional: 5/10/91; Retail: 1/2/97; Admin: 7/31/00 Expense Ratio| Institutional: 1.00%; Retail: 1.25%; Admin: 1.50% Total Net Assets (all classes)| $57.9 Million
- --------------------------------------------------------- PERFORMANCE For the one-year period ended September 30, 2001, the Institutional, Retail and Admin classes of the International Equity Fund returned -34.45%, -34.73%, and - -34.75%, respectively. The Fund's benchmark, the Morgan Stanley Capital International EAFE Index ND returned -28.53% for the period. The total return for the Lipper International Funds Average was -30.93% for the same period. PORTFOLIO REVIEW Although interest rates in the United States and elsewhere declined significantly during the year, stock markets around the world did not respond positively, as recession fears and earning disappointments gripped the markets. For the most part, performance among international stocks mimicked that of U.S. stocks, with growth stocks declining more than value stocks. In particular, technology stocks suffered sharp losses throughout the period. Investors looked for earnings visibility and very low risk, which the technology sector could not offer. Any hints of disappointments or trouble for a stock or sector caused investors to flee. In addition, prior to the September 11 terrorist attacks, the continued strength of the U.S. dollar relative to the euro and the yen was a negative factor for U.S. investors. After September 11, the U.S. dollar weakened as monies flowed out of the United States on concerns of impending military conflict and the struggling U.S. economy. The Fund's underperformance was generally due to an overweight position and poor stock selection in the information technology sector. From a country perspective, holdings in Japan, Germany and the United Kingdom had the largest negative effect on the Fund's one-year performance. PORTFOLIO POSITIONING The Fund remains invested in what we believe are the best growth stocks in the developed and emerging countries. We believe that it is well diversified among countries and industries, with large underweights in Japan, Germany and the United Kingdom and in the consumer discretionary and information technology sectors. The largest sector exposures in the Fund are financials and health care, which we expect to do relatively well in the challenging environment ahead. /s/ Eswar Menon /s/ Alexander Moromcew /s/ John Tribolet Eswar Menon Alexander Muromcew John Tribolet AVERAGE ANNUAL RETURNS-PERIODS ENDED SEPTEMBER 30, 2001
- ------------------------------------------------------------------------------------------------------ SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(a) - ------------------------------------------------------------------------------------------------------ LOOMIS SAYLES INTERNATIONAL EQUITY FUND (INSTITUTIONAL) -34.45% 5.14% 3.41% 6.16% 6.28% LOOMIS SAYLES INTERNATIONAL EQUITY FUND (RETAIL)/(b)/ -34.73% 4.77% 3.09% 6.00% 6.13% LOOMIS SAYLES INTERNATIONAL EQUITY FUND (ADMIN)/(b)/ -34.75% 4.29% 2.61% 5.50% 5.64% Lipper International Funds Index/(c)/ -28.60% 0.33% 2.14% 5.95% 5.93% Morgan Stanley Capital International-EAFE Index ND/(d)/ -28.53% -1.16% -0.14% 3.93% 3.93%
CUMULATIVE PERFORMANCE/(e)/--5/10/91 TO 9/30/01 [CHART]
Lipper International Loomis Sayles International MSCI EAFE Funds Index Equity Fund Index ND 5/10/1991 10000 10000 10000 5/31/1991 10132 10000 10105 6/30/1991 9605 9460 9363 7/31/1991 10029 9960 9822 8/31/1991 9936 9980 9623 9/30/1991 10222 10360 10165 10/31/1991 10264 10280 10309 11/30/1991 9897 9980 9828 12/31/1991 10361 10366 10336 1/31/1992 10474 10649 10115 2/29/1992 10490 10992 9753 3/31/1992 10150 10831 9109 4/30/1992 10417 10962 9152 5/31/1992 10940 11416 9764 6/30/1992 10607 11214 9302 7/31/1992 10211 10966 9064 8/31/1992 10260 10774 9632 9/30/1992 10042 10531 9442 10/31/1992 9744 9713 8947 11/30/1992 9796 9713 9031 12/31/1992 9917 9839 9077 1/31/1993 9954 10094 9076 2/28/1993 10177 10359 9350 3/31/1993 10767 10768 10166 4/30/1993 11325 11074 11130 5/31/1993 11587 11421 11365 6/30/1993 11359 10992 11188 7/31/1993 11719 11176 11580 8/31/1993 12495 12237 12205 9/30/1993 12448 12135 11930 10/31/1993 13063 12931 12298 11/30/1993 12545 12676 11223 12/31/1993 13803 13631 12033 1/31/1994 14663 14540 13050 2/28/1994 14310 14170 13014 3/31/1994 13655 13641 12454 4/30/1994 14017 13779 12982 5/31/1994 13996 13568 12908 6/30/1994 13775 13420 13090 7/31/1994 14199 13789 13216 8/31/1994 14690 13853 13529 9/30/1994 14311 13641 13103 10/31/1994 14567 13684 13539 11/30/1994 13887 13282 12888 12/31/1994 13702 13391 12969 1/31/1995 13022 13137 12471 2/28/1995 13019 13506 12435 3/31/1995 13361 13679 13211 4/30/1995 13852 14337 13707 5/31/1995 13989 14798 13544 6/30/1995 14042 14764 13307 7/31/1995 14814 15156 14135 8/31/1995 14563 14487 13596 9/30/1995 14807 14775 13861 10/31/1995 14499 14475 13489 11/30/1995 14650 14348 13864 12/31/1995 15075 14560 14423 1/31/1996 15431 15047 14482 2/29/1996 15497 15197 14531 3/31/1996 15739 15222 14839 4/30/1996 16252 15647 15271 5/31/1996 16234 15584 14990 6/30/1996 16382 15722 15074 7/31/1996 15829 15347 14634 8/31/1996 16036 15634 14666 9/30/1996 16394 15931 15055 10/31/1996 16329 16193 14901 11/30/1996 17097 16894 15494 12/31/1996 17250 17225 15295 1/31/1997 17272 17329 14759 2/28/1997 17584 17212 15001 3/31/1997 17677 17277 15055 4/30/1997 17754 17251 15135 5/31/1997 18755 18088 16120 6/30/1997 19656 18874 17009 7/31/1997 20287 19485 17284 8/31/1997 18824 17787 15993 9/30/1997 20032 18981 16889 10/31/1997 18512 17349 15591 11/30/1997 18356 16978 15432 12/31/1997 18500 17055 15567 1/31/1998 18948 17735 16279 2/28/1998 20150 18851 17323 3/31/1998 21245 19787 17856 4/30/1998 21571 19832 17998 5/31/1998 21614 19304 17910 6/30/1998 21425 18565 18046 7/31/1998 21754 18851 18229 8/31/1998 18624 16693 15971 9/30/1998 18045 16210 15481 10/31/1998 19372 17297 17095 11/30/1998 20342 18142 17971 12/31/1998 20843 18645 18679 1/31/1999 20969 18629 18624 2/28/1999 20430 17761 18180 3/31/1999 21110 18040 18939 4/30/1999 22093 18784 19707 5/31/1999 21272 18195 18692 6/30/1999 22281 19157 19421 7/31/1999 22779 20041 19998 8/31/1999 22959 20475 20071 9/30/1999 23033 21390 20273 10/31/1999 23836 23081 21032 11/30/1999 25585 28336 21763 12/31/1999 28728 35466 23716 1/31/2000 27046 33831 22209 2/29/2000 28831 39891 22807 3/31/2000 28906 36869 23691 4/30/2000 27072 32494 22445 5/31/2000 26328 29984 21896 6/30/2000 27547 31255 22753 7/31/2000 26654 29241 21799 8/31/2000 27105 30149 21988 9/30/2000 25526 28746 20917 10/31/2000 24659 26269 20423 11/30/2000 23618 24593 19657 12/31/2000 24500 25632 20356 1/31/2001 24644 25615 20346 2/28/2001 22915 23260 18820 3/31/2001 21304 21337 17566 4/30/2001 22599 22480 18786 5/31/2001 22052 22203 18123 6/30/2001 21429 21839 17382 7/31/2001 20872 21216 17066 8/31/2001 20454 20610 16633 9/30/2001 18225 18842 14949
Foreign investments involve special risks including greater economic, political and currency fluctuation risks, which may be even greater in emerging markets. In addition, foreign countries may have different accounting standards than those of the U.S., which may adversely affect the value of the Fund. Note: Past performance is no guarantee of future performance. Average annual returns assume reinvestment of dividends and capital gains distributions. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. (a)Inception date of the Institutional Class of shares is May 10, 1991. Since Lipper International Funds Index and Morgan Stanley Capital International-EAFE Index ND performance data is not available coincident with the Fund's inception date, comparative performance is presented from the month end closest to the Fund's inception date (April 30, 1991). Inception dates of the Retail and Admin Classes of shares are December 31, 1996 and July 31, 2000, respectively. (b)Performance shown for periods prior to the inception date of the Retail Class (December 31, 1996) and Admin Class (July 31, 2000) represents the performance of the Institutional Class of shares during the periods shown, adjusted to reflect the current levels of management and 12b-1 fees payable by the respective classes of shares. (c)The Lipper International Funds Index is an equally weighted unmanaged index of typically the 30 largest mutual funds within the international funds investment objective. Returns are adjusted for the reinvestment of capital gains distributions and income dividends. It is not possible to invest directly in an index. Source: Lipper Inc. (d)Morgan Stanley Capital International-EAFE Index ND is an unmanaged index, which is a capitalization-weighted average of the performance of over 900 securities listed on the stock exchange of 20 countries in Europe, Australasia and the Far East. The index reflects reinvestment of dividends, net of withholding taxes. The Index returns have not been reduced for ongoing management and operating expenses applicable to mutual fund investments. It is not possible to invest directly in an index. (e)Cumulative performance is shown for the Institutional Class of shares. Since index performance data is not available coincident with the Fund's inception date, the beginning value of the index is the value as of the month end closest to the Fund's inception date (April 30, 1991). Performance of the Retail and Admin Classes of shares would, due to the higher fees paid by the Retail and Admin classes of shares, be lower. [Graphic] Loomis Sayles Equity Funds 17 FUND AND MANAGER REVIEW Loomis Sayles Research Fund [PHOTO] Key Fund Facts LAURIANN KLOPPENBURG Objective| Long-term capital growth Strategy| Invests primarily in stocks with large capitalization Fund Inception Date| 7/31/00
Commencement of Operations of Class| Institutional: 7/31/00 Expense Ratio| Institutional: 1.15% Total Net Assets| $4.2 Million - --------------------------------------------------------- PERFORMANCE For the one-year period ended September 30, 2001, the Institutional class of the Research Fund returned -34.68%, compared to the -26.63% return for the Fund's benchmark, the S&P 500 Index. The total return for the Lipper Large-Cap Core Funds Average was -27.41% for the same period. PORTFOLIO REVIEW For most of the year the U.S. stock market limped along, trying to overcome a negative economic headwind. Emerging signs of improvement were beginning to appear when the terrible events of September 11 occurred. After that, shock, fear and uncertainty pulled the economy and the market into a tailspin. By the end of the fiscal year, the U.S. economy most likely had slipped into recession, with our view recovery unlikely until sometime in 2002. The Fund was conservatively positioned throughout the year. But in the spring, we had started moving into stocks positioned to be early beneficiaries of the economic recovery we originally expected for late 2001 or early 2002. We found many such stocks in the consumer cyclicals sector, offering favorable valuations and fairly resilient earnings streams. In hindsight, we positioned the Fund for a stronger economy than actually developed. Our first jolt occurred at the end of 2000, when technology spending and demand turned down dramatically, costing the Fund some relative performance in the first half of the fiscal year. We adjusted the portfolio accordingly and developed a new, more defensive strategy in early 2001, which served us relatively well. Nevertheless, on a one-year basis, the Fund did not entirely recover from the underperformance generated by our technology holdings earlier in the year. What's more, most sectors were leaning toward recovery when they were jolted by the events of September 11. PORTFOLIO POSITIONING We believe that the market is likely to remain volatile as it tries to anticipate an eventual recovery while coping with ongoing weakness. Although this makes for a challenging climate, we feel that it should be an environment that rewards a research-based investment approach such as ours--whereby we build the portfolio stock by stock, industry by industry and sector by sector. To that end, we've purchased consumer discretionary stocks that we believe offer relatively resilient earnings streams and balance the Fund's cyclical names. We also have added exposure to the defense industry, as defense companies offer historically strong fundamentals and the added benefit of low sensitivity to the economy. In the financial sector, we have added to the property/casualty insurance industry due to growing demand and pricing strength. /s/ Lauriann Kloppenburg Lauriann Kloppenburg AVERAGE ANNUAL RETURNS-PERIODS ENDED SEPTEMBER 30, 2001
----------------------------------------------------------------- SINCE 1 YEAR INCEPTION(a) ----------------------------------------------------------------- LOOMIS SAYLES RESEARCH FUND (INSTITUTIONAL) -34.68% -27.32% Lipper Large-Cap Core Funds Index/(b)/ -27.89% -23.66% S&P 500 Index/(c)/ -26.63% -22.91%
CUMULATIVE PERFORMANCE--7/31/00 TO 9/30/01 [CHART]
Loomis Sayles S&P 500 Index Lipper Large Cap Research Fund Core Funds Index 7/31/2000 10000 10000 10000 8/31/2000 10940 10621 10690 9/30/2000 10540 10060 10121 10/31/2000 10110 10018 10003 11/30/2000 8704 9228 9124 12/31/2000 9046 9273 9235 1/31/2001 9156 9602 9497 2/28/2001 8151 8727 8613 3/31/2001 7659 8174 8084 4/30/2001 8312 8809 8699 5/31/2001 8382 8868 8748 6/30/2001 8242 8652 8515 7/31/2001 8010 8567 8392 8/31/2001 7548 8031 7898 9/30/2001 6885 7381 7298
Note: Past Performance is no guarantee of future performance. Average annual returns assume reinvestment of dividends and capital gains distributions. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. (a)Inception date of the Institutional Class of shares is July 31, 2000. (b)The Lipper Large-Cap Core Funds Index is an equally weighted unmanaged index of typically the 30 largest mutual funds within the large-cap core funds investment objective. Returns are adjusted for the reinvestment of capital gains distributions and income dividends. It is not possible to invest directly in an index Source: Lipper Inc. (c)S&P 500 Index is a capitalization-weighted, unmanaged total return index comprised of 500 widely held common stocks, representing industrial, utility, transportation, and financial companies traded on the New York Stock Exchange, the American Stock Exchange and in the over-the-counter market. The index returns have not been reduced for ongoing management and operating expenses applicable to mutual fund investments. It is not possible to invest directly in an index. [Graphic] Loomis Sayles Equity Funds 19 FUND AND MANAGER REVIEW [PHOTO] [PHOTO] Loomis Sayles Small Cap Growth Fund CHRISTOPHER R. ELY DAVID L. SMITH Key Fund Facts Objective| Long-term capital growth Strategy| Invests in stocks with market capitalizations falling within the capitalization range of the Russell 2000 Growth Index [PHOTO] Fund Inception Date| 12/31/96 PHILIP C. FINE Commencement of Operations of Class| Institutional: 1/2/97; Retail: 1/2/97; Admin: 7/31/00 Expense Ratio| Institutional: 0.99%; Retail: 1.25%; Admin: 1.50% Total Net Assets (all classes)| $175.9 Million
- --------------------------------------------------------- PERFORMANCE For the one-year period ended September 30, 2001, the Institutional, Retail and Admin classes of the Small Cap Growth Fund returned -65.17%, -65.27% and - -65.29%, respectively, compared to the -42.59% return for the Fund's benchmark, the Russell 2000 Growth Index. The total return for the Lipper Small Cap Growth Funds Average and the Russell 2000 Index were -38.23% and -21.21%, respectively for the same period. PORTFOLIO REVIEW The weakening U.S. economy resulted in earnings disappointments and negative revisions and kept small-cap growth stocks deep in the doldrums throughout the year. Given this climate, we reduced exposure to some of the most economically sensitive issues and stocks with very high multiples. In their place, we purchased consumer cyclical and financial services stocks, where we expected interest rate cuts to contribute to earnings growth and better investor sentiment. We also increased exposure to more stable growth industries, including health care services, in light of the economic uncertainty. Throughout the fiscal year, the Fund's overweight positions in technology and other economically sensitive sectors hurt the Fund's absolute and relative returns. The final quarter of the fiscal year was the worst quarter for equity markets since the market crash of 1987, and much of the Fund's underperformance occurred in this quarter. Aggressive growth stocks remained out of favor with investors worried over the effects of the terrorist attacks on an already weak economy, future profits and the overall outlook for stocks. PORTFOLIO POSITIONING The Fund remains fully invested in a diversified portfolio of small-cap growth companies. In light of the events of September 11, we have reduced exposure to companies directly related to travel and tourism, and we increased the Fund's exposure to energy, given the military action in Central Asia and possible disruption of oil supplies from that region. Although we have reduced exposure to technology and other cyclical sectors, they remain significant components of the Fund. Despite the likelihood of an economic recession, we believe the government's response of monetary ease and fiscal stimulus should put the economy back on a growth track soon. As such, we want to keep the Fund positioned to participate in what we expect will be a robust economic recovery. /s/ Christopher Ely /s/ David L. Smith /s/ Phillip Fine Christopher R. Ely David L. Smith Philip C. Fine AVERAGE ANNUAL RETURNS-PERIODS ENDED SEPTEMBER 30, 2001
- --------------------------------------------------------------------------------- SINCE 1 YEAR 3 YEARS INCEPTION(a) - --------------------------------------------------------------------------------- LOOMIS SAYLES SMALL CAP GROWTH FUND (INSTITUTIONAL) -65.17% -1.49% -0.18% LOOMIS SAYLES SMALL CAP GROWTH FUND (RETAIL) -65.27% -1.77% -0.44% LOOMIS SAYLES SMALL CAP GROWTH FUND (ADMIN)/(b)/ -65.29% -2.21% -0.83% Lipper Small-Cap Growth Funds Index/(c)/ -40.72% 9.07% 3.51% Lipper Mid-Cap Growth Funds Index/(c)/ -48.39% 6.71% 4.12% Russell 2000 Growth Index/(d)/ -42.59% -0.42% -1.90% Russell 2000 Index/(e)/ -21.21% 5.00% 3.67%
CUMULATIVE PERFORMANCE/(f)/--12/31/96 to 9/30/01 [CHART]
Lipper Mid-Cap Loomis Sayles Small Russell 2000 Lipper Small-Cap Russell 2000 Growth Funds Index Cap Growth Fund Growth Index Growth Funds Index Index 12/31/1996 10000 10000 10000 10000 10000 1/31/1997 10256 10260 10250 10232 10200 2/28/1997 9574 9500 9631 9493 9952 3/31/1997 8846 8510 8951 8808 9483 4/30/1997 8769 8350 8848 8677 9509 5/31/1997 9912 9710 10177 9881 10567 6/30/1997 10329 10280 10523 10409 11020 7/31/1997 10960 11110 11062 11036 11533 8/31/1997 10929 11300 11394 11211 11797 9/30/1997 11712 12550 12303 12155 12660 10/31/1997 11056 11670 11564 11533 12104 11/30/1997 10879 11540 11288 11273 12026 12/31/1997 11134 11943 11295 11123 12236 1/31/1998 10923 11552 11144 10957 12043 2/28/1998 11851 12808 12128 11843 12934 3/31/1998 12465 13388 12636 12379 13467 4/30/1998 12519 13209 12714 12469 13541 5/31/1998 11789 12101 11790 11587 12812 6/30/1998 12332 13282 11911 11926 12839 7/31/1998 11511 11974 10916 11029 11800 8/31/1998 9029 9273 8396 8620 9508 9/30/1998 9971 10371 9247 9081 10253 10/31/1998 10338 10782 9730 9439 10671 11/30/1998 11123 12132 10485 10207 11230 12/31/1998 12558 14179 11433 11230 11925 1/31/1999 13181 14591 11948 11501 12083 2/28/1999 12158 13673 10855 10395 11104 3/31/1999 13024 14717 11241 10865 11278 4/30/1999 13559 14854 12234 11289 12288 5/31/1999 13502 14580 12253 11350 12468 6/30/1999 14590 16764 12899 12413 13032 7/31/1999 14391 16268 12500 12369 12674 8/31/1999 14318 16743 12033 12195 12205 9/30/1999 14736 17661 12265 12637 12208 10/31/1999 16039 19929 12579 13374 12257 11/30/1999 18050 22039 13909 15062 12989 12/31/1999 21816 27198 16360 18099 14459 1/31/2000 21441 26702 16208 17910 14227 2/29/2000 26814 36355 19979 23158 16577 3/31/2000 24927 31544 17879 21340 15484 4/30/2000 21639 29012 16074 18702 14552 5/31/2000 19693 25088 14666 17173 13704 6/30/2000 22754 28063 16561 20197 14898 7/31/2000 21810 25183 15141 18883 14419 8/31/2000 24662 29403 16734 20914 15519 9/30/2000 23477 28464 15903 19879 15063 10/31/2000 21578 25679 14612 18387 14391 11/30/2000 17066 19052 11959 15256 12913 12/31/2000 18296 22260 12691 16605 14022 1/31/2001 18545 21253 13718 17111 14753 2/28/2001 15763 16545 11837 14921 13785 3/31/2001 14091 14081 10761 13471 13110 4/30/2001 15948 16676 12079 14926 14136 5/31/2001 16080 16216 12358 15330 14483 6/30/2001 16017 16611 12695 15717 14983 7/31/2001 15175 14267 11612 14841 14172 8/31/2001 14158 12658 10887 13962 13715 9/30/2001 12116 9915 9130 11783 11868
Foreign investments involve special risks including greater economic, political and currency fluctuation risks, which may be even greater in emerging markets. In addition, foreign countries may have different accounting standards than those of the U.S., which may adversely affect the value of the Fund. Small and mid-cap stocks may be more volatile and subject to wider value fluctuations than larger, more established companies. The secondary market of small and mid-cap stocks may be less liquid, or harder to sell, which could also adversely impact the Fund's value. Note: Past Performance is no guarantee of future performance. Average annual returns assume reinvestment of dividends and capital gains distributions. The investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. (a)Inception date of the Institutional and Retail Classes of shares is December 31, 1996. Inception date of the Admin Class of shares is July 31, 2000. (b)Performance shown for periods prior to the inception date of the Admin Class (July 31, 2000) represents the performance of the Institutional Class of shares during the periods shown, adjusted to reflect the current levels of management and 12b-1 fees payable by the respective class of shares. (c)The Lipper Small-Cap Growth Funds Index is an equally weighted unmanaged index of typically the 30 largest mutual funds within the small-cap growth funds investment objective. The Lipper Mid-Cap Growth Funds Index is an equally weighted unmanaged index of typically the 30 largest mutual funds within the mid-cap growth funds investment objective. Returns are adjusted for the reinvestment of capital gains distributions and income dividends. It is not possible to invest directly in an index. Source: Lipper, Inc. (d)The Russell 2000 Growth Index is an unmanaged index comprised of those Russell 2000 securities with a greater than average growth orientation. The index returns have not been lowered for ongoing management and operating expenses applicable to mutual fund investments. It is not possible to invest directly in an index. (e)Russell 2000 Index is an unmanaged index comprised of the 2000 smallest companies in the Russell 3000 Index (a broad market index), representing approximately 8% of the Russell 3000 total market capitalization. The Index returns have not been reduced for ongoing management and operating expenses applicable to mutual fund investments. It is not possible to invest directly in an index. (f)Cumulative performance is shown for the Institutional Class of shares. Performance of the Retail and Admin Classes of shares would, due to the higher fees paid by the Retail and Admin Classes of shares, be lower. [Graphic] Loomis Sayles Equity Funds 21 FUND AND MANAGER REVIEW [PHOTO] [PHOTO] Loomis Sayles Small Cap Value Fund JOSEPH R. GATZ DANIEL G. THELEN Key Fund Facts Objective| Long-term capital growth Strategy| Invests primarily in stocks with market capitalization falling within the capitalization range of the Russell 2000 Index
Fund Inception Date| 5/13/91 Commencement of Operations of Class| Institutional: 5/13/91; Retail: 1/2/97; Admin: 1/2/98 Expense Ratio| Institutional: 0.98%; Retail: 1.22%; Admin: 1.50% Total Net Assets (all Classes)| $329.5 Million - --------------------------------------------------------- PERFORMANCE For the one-year period ended September 30, 2001, the Institutional, Retail and Admin classes of the Small Cap Value Fund returned 3.87%, 3.61% and 3.30%, respectively, compared to the -21.21% return for the Fund's benchmark, the Russell 2000 Index. The total return for the Lipper Small Cap Value Funds Average and the Russell 2000 Value Index were 4.47% and 5.61%, respectively for the same period. PORTFOLIO REVIEW Overall, the small cap value arena was the lone bright spot in an otherwise dismal stock market troubled by a weakening economy and earnings disappointments. Investors found attractive valuations and reasonable earnings expectations among small cap value stocks. The Fund benefited nicely from the declining interest rate environment and the portfolio's overweight position in the consumer discretionary sector and its exposure to the financial services sector. Nevertheless, neither the small cap sector nor the Fund was immune to the events of the third calendar quarter of 2001. Market conditions weakened dramatically, particularly after the terrorist attacks of September 11, and small cap value stocks were impacted along with the rest of the market. The Fund's emphasis on quality companies with above-average earnings visibility proved beneficial during the third quarter of 2000 by helping to insulate the portfolio somewhat from reductions in earnings forecasts for many economic sectors. The Fund's outperformance against the Russell 2000 Index was due to favorable stock selection, particularly in the consumer discretionary sector. The Fund also benefited from merger and acquisition activities. The Fund's relative underperformance against the Russell 2000 Value Index primarily was due to market events early in the period. Specifically, in late 2000 and early 2001 positive returns in the small cap value area were fairly concentrated in a narrow range of very small companies, many of which we considered to be of below-average quality. In the months following, a reversal of that trend contributed to the Fund's improving performance. PORTFOLIO POSITIONING The atrocities of September 11 increase the likelihood that companies will reduce their earnings estimates further in the coming weeks and months. The Fund's quality orientation and continued emphasis on earnings visibility appear appropriate for such an environment. /s/ Joseph R. Gatz /s/ Daniel G.Thelen Joseph R. Gatz Daniel G. Thelen AVERAGE ANNUAL RETURNS-PERIODS ENDED SEPTEMBER 30, 2001
- -------------------------------------------------------------------------------------------- SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(a) - -------------------------------------------------------------------------------------------- LOOMIS SAYLES SMALL CAP VALUE FUND (INSTITUTIONAL) 3.87% 12.23% 10.39% 14.24% 15.18% LOOMIS SAYLES SMALL CAP VALUE FUND (RETAIL)/(b)/ 3.61% 11.93% 10.10% 14.09% 15.03% LOOMIS SAYLES SMALL CAP VALUE FUND (ADMIN)/(b)/ 3.30% 11.60% 9.66% 13.69% 14.63% Lipper Small-Cap Value Funds Index/(c)/ 2.33% 9.21% 8.69% 11.55% 11.71% Russell 2000 Index/(d)/ -21.21% 5.00% 4.54% 10.01% 10.27% Russell 2000 Value Index/(e)/ 5.61% 8.84% 9.91% 13.34% 13.73%
CUMULATIVE PERFORMANCE/(f)/--5/13/91 to 9/30/01 [CHART]
Lipper Small-Cap Loomis Sayles Small Russell 2000 Russell 2000 Value Funds Index Cap Value Fund Index Value Index 4/30/1991 10000 10000 10000 10000 5/31/1991 10356 10220 10477 10442 6/30/1991 9994 9860 9866 9953 7/31/1991 10250 10640 10213 10212 8/31/1991 10494 11450 10591 10522 9/30/1991 10621 11460 10674 10534 10/31/1991 10922 11690 10956 10654 11/30/1991 10512 11400 10449 10222 12/31/1991 11388 13048 11286 10884 1/31/1992 12093 14374 12200 11795 2/29/1992 12533 15179 12556 12358 3/31/1992 12319 14364 12131 12223 4/30/1992 12096 13633 11706 12054 5/31/1992 12233 13654 11862 12382 6/30/1992 11806 12463 11301 11981 7/31/1992 12226 12807 11694 12432 8/31/1992 11939 12390 11364 12190 9/30/1992 12082 12525 11626 12420 10/31/1992 12206 12922 11996 12710 11/30/1992 13016 14155 12914 13496 12/31/1992 13404 14759 13364 14056 1/31/1993 13861 15435 13816 14801 2/28/1993 13758 15080 13497 14861 3/31/1993 14109 15710 13935 15424 4/30/1993 13770 15309 13552 15054 5/31/1993 14124 15962 14152 15527 6/30/1993 14118 16042 14240 15674 7/31/1993 14248 16432 14437 15943 8/31/1993 14692 17314 15061 16567 9/30/1993 15036 18105 15486 16964 10/31/1993 15452 18506 15884 17352 11/30/1993 15158 17887 15361 16900 12/31/1993 15558 18401 15887 17397 1/31/1994 16134 18792 16385 18018 2/28/1994 16115 18505 16325 17966 3/31/1994 15576 17438 15463 17160 4/30/1994 15636 17242 15555 17329 5/31/1994 15698 16982 15381 17304 6/30/1994 15356 16578 14858 16853 7/31/1994 15476 16669 15103 17164 8/31/1994 16040 17451 15944 17839 9/30/1994 15992 17438 15891 17650 10/31/1994 15972 17320 15828 17327 11/30/1994 15306 16630 15189 16628 12/31/1994 15448 16873 15597 17129 1/31/1995 15618 16925 15400 17045 2/28/1995 16087 17582 16041 17675 3/31/1995 16202 18002 16317 17763 4/30/1995 16587 18054 16680 18291 5/31/1995 16905 18422 16967 18683 6/30/1995 17458 18921 17847 19321 7/31/1995 18216 20182 18875 20026 8/31/1995 18449 21153 19265 20621 9/30/1995 18764 21547 19609 20929 10/31/1995 17972 20431 18732 20093 11/30/1995 18529 21416 19519 20892 12/31/1995 18755 22302 20034 21539 1/31/1996 19000 22331 20013 21682 2/29/1996 19378 23451 20636 22021 3/31/1996 19754 23989 21057 22484 4/30/1996 20433 25415 22182 23097 5/31/1996 21108 26463 23057 23682 6/30/1996 20696 25837 22110 23402 7/31/1996 19530 24382 20179 22158 8/31/1996 20350 25604 21350 23120 9/30/1996 20885 26468 22185 23751 10/31/1996 21032 26857 21843 24026 11/30/1996 21904 28140 22743 25319 12/31/1996 22547 29070 23339 26141 1/31/1997 23035 29589 23805 26543 2/28/1997 23059 29204 23228 26795 3/31/1997 22509 28569 22132 26076 4/30/1997 22501 28302 22194 26460 5/31/1997 24524 31377 24663 28566 6/30/1997 25788 32848 25720 30012 7/31/1997 27113 34730 26917 31271 8/31/1997 27707 35457 27533 31768 9/30/1997 29512 37569 29548 33880 10/31/1997 28690 36386 28250 32959 11/30/1997 28494 36251 28067 33320 12/31/1997 29042 36626 28559 34450 1/31/1998 28518 35819 28107 33826 2/28/1998 30318 38357 30186 35871 3/31/1998 31651 40068 31431 37326 4/30/1998 31964 39891 31604 37511 5/31/1998 30829 38180 29902 36183 6/30/1998 30258 37688 29965 35978 7/31/1998 28237 35249 27539 33160 8/31/1998 23476 29210 22192 27967 9/30/1998 24327 30685 23929 29547 10/31/1998 25213 32298 24904 30424 11/30/1998 26334 34128 26209 31247 12/31/1998 27093 36230 27831 32227 1/31/1999 26369 34533 28201 31496 2/28/1999 24539 32096 25917 29345 3/31/1999 24239 32116 26321 29103 4/30/1999 26470 34732 28680 31760 5/31/1999 27413 35432 29099 32736 6/30/1999 28673 37069 30415 33922 7/31/1999 28356 36610 29580 33117 8/31/1999 27190 35392 28485 31906 9/30/1999 26497 34613 28492 31268 10/31/1999 25775 34273 28607 30643 11/30/1999 26428 34985 30315 30801 12/31/1999 27605 36365 33747 31748 1/31/2000 26554 35015 33205 30918 2/29/2000 27326 37490 38688 32807 3/31/2000 28600 39617 36137 32961 4/30/2000 28417 39699 33963 33156 5/31/2000 28176 38001 31983 32650 6/30/2000 28974 39249 34771 33604 7/31/2000 29239 39903 33653 34724 8/31/2000 31051 42399 36220 36276 9/30/2000 30965 41764 35156 36071 10/31/2000 30682 42542 33586 35943 11/30/2000 29465 41175 30139 35211 12/31/2000 32050 44799 32727 38994 1/31/2001 33556 46042 34431 40071 2/28/2001 33169 44864 32172 40015 3/31/2001 32844 43250 30598 39373 4/30/2001 34523 45628 32992 41196 5/31/2001 36218 46958 33803 42255 6/30/2001 37020 48790 34970 43955 7/31/2001 36526 49074 33077 42970 8/31/2001 36140 48507 32009 42821 9/30/2001 31686 43381 27700 38094
Foreign investments involve special risks including greater economic, political and currency fluctuation risks, which may be even greater in emerging markets. In addition, foreign countries may have different accounting standards than those of the U.S., which may adversely affect the value of the Fund. Small and mid-cap stocks may be more volatile and subject to wider value fluctuations than larger, more established companies. The secondary market of small and mid-cap stocks may be less liquid, or harder to sell, which could also adversely impact the Fund's value. Note: Past performance is no guarantee of future performance. Average annual returns assume reinvestment of dividends and capital gains distributions. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. (a)Inception date of the Institutional Class of shares is May 13, 1991. Since the Lipper Small-Cap Value Funds Index, Russell 2000 Index and Russell 2000 Value Index performance data is not available coincident with the Fund's inception date, comparative performance is presented from the month end closest to the Fund's inception date (April 30, 1991). Inception dates of the Retail and Admin Classes of shares are December 31, 1996 and January 2, 1998, respectively. (b)Performance shown for periods prior to the inception date of the Retail Class (December 31, 1996) and Admin Class (January 2, 1998) represents the performance of the Institutional Class of shares during the periods shown, adjusted to reflect the current levels of management and 12b-1 fees payable by the respective classes of shares. (c)The Lipper Small-Cap Value Funds Index is an equally weighted unmanaged index of typically the 30 largest mutual funds within the small-cap value funds investment objective. Returns are adjusted for the reinvestment of capital gains distributions and income dividends. It is not possible to invest directly in an index. Source: Lipper Inc. (d)Russell 2000 Index is an unmanaged index comprised of the 2,000 smallest companies in the Russell 3000 Index (a broad market index), representing approximately 8% of the Russell 3000 total market capitalization. The index returns have not been reduced for ongoing management and operating expenses applicable to mutual fund investments. It is not possible to invest directly in an index. (e)Russell 2000 Value Index measures the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Index returns have not been reduced for ongoing management and operating expenses applicable to mutual fund investments. It is not possible to invest directly in an index. (f)Cumulative performance is shown for the Institutional Class of shares. Since index performance data is not available coincident with the Fund's inception date, the beginning value of the index is the value as of the month end closest to the Fund's inception date (April 30, 1991). Performance of the Retail and Admin Classes of shares would, due to the higher fees paid by the Retail and Admin Classes of shares, be lower. [Graphic] Loomis Sayles Equity Funds 23 FUND AND MANAGER REVIEW [PHOTO] [PHOTO] Loomis Sayles Value Fund (formerly Loomis Sayles Core Value Fund) Warren Koontz Tricia Mills Key Fund Facts Objective| Long-term growth of capital and income Strategy| Invests in stocks considered to be undervalued in relation to the issuer's earnings, dividends, assets and growth prospects
[PHOTO] Fund Inception Date| 5/13/91 Jeffrey Wardlow Commencement of Operations of Class| Institutional: 5/13/91 Expense Ratio| Institutional: 0.85% Total Net Assets| $39.5 Million
- --------------------------------------------------------- PERFORMANCE For the one-year period ended September 30, 2001, the Institutional class of the Value Fund returned -7.05%, compared to the -26.63% return for the Fund's benchmark, the Standard & Poor's 500 Index. The total return for the Lipper Large-Cap Value Funds Average was -12.32% for the same period. PORTFOLIO REVIEW In general, value stocks avoided the large-scale declines experienced by the various growth sectors during the year. With concerns about a slowing economy and earnings outlooks, investors retreated to stocks that offered good valuations and other defensive qualities. Nevertheless, large-cap value stocks followed the general market trend and retreated significantly during the third calendar quarter of 2001, primarily due to the events of September 11. Although we made some adjustments to the portfolio after the attacks, we did not feel the need to make wholesale changes. With the economic recovery likely pushed back, we reduced the weighting in consumer discretionary stocks and added to the energy and utilities sectors. We also sold or reduced some of the more financially leveraged holdings in favor of companies with stronger balance sheets. The Fund's good performance relative to its benchmark and peer group primarily was due to favorable stock selection during the 12-month period. In addition, our sector-weight decisions provided a small positive impact on relative performance. PORTFOLIO POSITIONING We believe that there are many attractive values in today's market, but we feel that the market is likely to react more to the war on terrorism than to typical stock fundamentals. In this environment, we are trying to maintain a balance between defensive and offensive stocks. We have held on to many of our cyclical holdings, which we feel should perform very well if there are positive developments on the economic or terrorism fronts. We also have a number of high-quality companies that we believe should perform more defensively if there is further market turbulence ahead. /s/ Warren Koontz /s/ Tricia Mills /s/ Jeffrey Wardlow Warren Koontz Tricia Mills Jeffrey W. Wardlow AVERAGE ANNUAL RETURNS-PERIODS ENDED SEPTEMBER 30, 2001
- --------------------------------------------------------------------------------------- SINCE 1 YEAR 3 YEARS 5 YEARS 10 YEARS INCEPTION(a) - --------------------------------------------------------------------------------------- LOOMIS SAYLES VALUE FUND (INSTITUTIONAL) -7.05% 2.10% 7.48% 11.03% 10.86% Lipper Large-Cap Value Funds Index/(b)/ -15.60% 3.84% 9.19% 11.99% 12.04% Lipper Multi-Cap Value Funds Index/(b)/ -6.04% 6.24% 8.89% 11.71% 11.75% S&P 500 Index/(c)/ -26.63% 2.03% 10.22% 12.70% 12.67%
CUMULATIVE PERFORMANCE--5/13/91 to 9/30/01 [CHART]
Lipper Multi-Cap Loomis Sayles S & P 500 Lipper Large-Cap Value Funds Index Value Fund Index Value Funds Index 5/13/1991 10000 10000 10000 10000 5/31/1991 10,394 10,550 10,431 10,418 6/30/1991 9,953 9,950 9,953 9,894 7/31/1991 10,347 10,280 10,417 10,354 8/31/1991 10,562 10,530 10,664 10,608 9/30/1991 10,508 10,250 10,485 10,528 10/31/1991 10,686 10,290 10,626 10,727 11/30/1991 10,274 9,620 10,198 10,277 12/31/1991 11,215 10,715 11,364 11,389 1/31/1992 11,238 11,061 11,153 11,305 2/29/1992 11,464 11,295 11,297 11,509 3/31/1992 11,253 11,031 11,077 11,251 4/30/1992 11,416 11,285 11,403 11,458 5/31/1992 11,542 11,305 11,459 11,547 6/30/1992 11,393 11,061 11,288 11,293 7/31/1992 11,739 11,508 11,749 11,732 8/31/1992 11,532 11,173 11,509 11,492 9/30/1992 11,715 11,254 11,644 11,627 10/31/1992 11,769 11,356 11,684 11,706 11/30/1992 12,224 11,986 12,082 12,187 12/31/1992 12,479 12,226 12,230 12,374 1/31/1993 12,694 12,502 12,333 12,516 2/28/1993 12,762 12,618 12,501 12,638 3/31/1993 13,144 12,852 12,764 13,006 4/30/1993 12,893 12,512 12,456 12,763 5/31/1993 13,196 12,788 12,789 13,108 6/30/1993 13,285 12,777 12,827 13,167 7/31/1993 13,372 12,682 12,775 13,129 8/31/1993 13,904 13,191 13,260 13,660 9/30/1993 13,895 13,117 13,158 13,709 10/31/1993 14,103 13,403 13,430 13,945 11/30/1993 13,849 13,212 13,302 13,723 12/31/1993 14,192 13,678 13,463 14,016 1/31/1994 14,652 14,204 13,921 14,473 2/28/1994 14,372 14,062 13,543 14,125 3/31/1994 13,801 13,481 12,952 13,538 4/30/1994 13,986 13,755 13,119 13,707 5/31/1994 14,143 13,908 13,334 13,904 6/30/1994 13,885 13,481 13,007 13,569 7/31/1994 14,259 13,952 13,434 13,965 8/31/1994 14,813 14,566 13,985 14,531 9/30/1994 14,488 14,062 13,643 14,153 10/31/1994 14,637 14,040 13,949 14,385 11/30/1994 14,077 13,383 13,441 13,884 12/31/1994 14,207 13,558 13,641 14,042 1/31/1995 14,427 13,845 13,995 14,294 2/28/1995 15,007 14,604 14,540 14,826 3/31/1995 15,349 14,994 14,969 15,174 4/30/1995 15,739 15,557 15,410 15,615 5/31/1995 16,317 16,224 16,026 16,194 6/30/1995 16,617 16,339 16,398 16,545 7/31/1995 17,227 16,970 16,942 17,068 8/31/1995 17,411 17,062 16,984 17,172 9/30/1995 17,894 17,602 17,701 17,788 10/31/1995 17,577 17,166 17,638 17,646 11/30/1995 18,324 17,947 18,412 18,411 12/31/1995 18,613 18,334 18,767 18,709 1/31/1996 19,184 18,875 19,405 19,285 2/29/1996 19,467 19,039 19,586 19,501 3/31/1996 19,693 19,240 19,774 19,712 4/30/1996 19,997 19,240 20,065 19,980 5/31/1996 20,323 19,605 20,584 20,351 6/30/1996 20,185 19,643 20,661 20,362 7/31/1996 19,366 18,925 19,749 19,564 8/31/1996 19,964 19,378 20,165 20,072 9/30/1996 20,780 20,344 21,301 21,056 10/31/1996 21,186 20,899 21,888 21,500 11/30/1996 22,585 22,358 23,542 23,040 12/31/1996 22,520 22,214 23,076 22,651 1/31/1997 23,359 23,382 24,517 23,794 2/28/1997 23,641 23,538 24,709 23,984 3/31/1997 22,900 22,741 23,694 23,068 4/30/1997 23,532 23,538 25,109 24,094 5/31/1997 25,020 24,962 26,637 25,483 6/30/1997 25,984 26,187 27,833 26,546 7/31/1997 27,894 28,473 30,046 28,547 8/31/1997 27,276 27,574 28,362 27,325 9/30/1997 28,580 28,981 29,915 28,724 10/31/1997 27,389 27,907 28,916 27,857 11/30/1997 27,971 28,734 30,255 28,771 12/31/1997 28,580 28,703 30,774 29,100 1/31/1998 28,514 28,768 31,115 29,142 2/28/1998 30,476 30,672 33,359 31,059 3/31/1998 31,846 31,599 35,068 32,439 4/30/1998 32,025 31,859 35,420 32,769 5/31/1998 31,315 31,306 34,811 32,212 6/30/1998 31,282 31,257 36,226 32,814 7/31/1998 30,072 29,858 35,840 32,245 8/31/1998 25,471 25,660 30,666 27,844 9/30/1998 26,526 27,417 32,622 29,183 10/31/1998 28,709 29,744 35,276 31,520 11/30/1998 29,949 30,769 37,416 33,128 12/31/1998 30,445 31,728 39,569 34,408 1/31/1999 30,553 31,654 41,224 34,980 2/28/1999 29,841 30,720 39,943 34,179 3/31/1999 30,665 31,838 41,542 35,217 4/30/1999 33,392 34,127 43,150 37,292 5/31/1999 33,218 33,926 42,130 36,655 6/30/1999 34,288 34,787 44,474 38,271 7/31/1999 33,121 33,505 43,080 37,185 8/31/1999 31,980 32,094 42,867 36,507 9/30/1999 30,601 30,299 41,692 35,157 10/31/1999 31,548 31,435 44,330 36,850 11/30/1999 31,534 31,237 45,241 36,978 12/31/1999 32,253 31,306 47,896 38,117 1/31/2000 30,862 29,957 45,489 36,506 2/29/2000 29,238 27,549 44,628 34,971 3/31/2000 32,329 30,331 48,993 38,173 4/30/2000 32,268 30,206 47,519 37,748 5/31/2000 32,716 30,725 46,544 37,776 6/30/2000 32,006 29,998 47,691 37,359 7/31/2000 32,277 29,874 46,946 37,190 8/31/2000 34,325 31,888 49,862 39,343 9/30/2000 33,849 31,389 47,229 38,721 10/31/2000 34,655 32,573 47,030 39,031 11/30/2000 33,376 31,867 43,322 37,358 12/31/2000 35,361 33,607 43,534 38,862 1/31/2001 36,697 34,047 45,078 39,185 2/28/2001 35,693 33,124 40,968 37,297 3/31/2001 34,442 31,885 38,373 35,847 4/30/2001 36,674 33,418 41,355 37,878 5/31/2001 37,486 33,963 41,632 38,488 6/30/2001 36,852 33,376 40,619 37,442 7/31/2001 36,804 33,103 40,219 37,187 8/31/2001 35,437 31,864 37,701 35,445 9/30/2001 31,806 29,178 34,653 32,679
Note: Past performance is no guarantee of future performance. Average annual returns assumes reinvestment of dividends and capital gains distributions. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. (a)Inception date of the Institutional Class of shares is May 13, 1991. Since Lipper Multi-Cap Value Funds Index, Lipper Large-Cap Value Funds Index and S&P 500 Index performance data is not available coincident with the Fund's inception date, comparative performance is presented from the month end closest to the Fund's inception date (April 30, 1991). (b)The Lipper Large-Cap Value Funds Index is an equally weighted unmanaged index of typically the 30 largest mutual funds within the large-cap value funds investment objective. The Lipper Multi-Cap Value Funds Index is an equally weighted unmanaged index of typically the 30 largest mutual funds within the multi-cap value funds investment objective. Returns are adjusted for the reinvestment of capital gains distributions and income dividends. It is not possible to invest directly in an index. Source: Lipper Inc. (c)S&P 500 Index is a capitalization-weighted, unmanaged total return index comprised of 500 widely held common stocks, representing industrial, utility, transportation, and financial companies traded on the New York Stock Exchange, the American Stock Exchange and in the over-the-counter market. The Index returns have not been reduced for ongoing management and operating expenses applicable to mutual fund investments. It is not possible to invest directly in an index. [Graphic] Loomis Sayles Equity Funds 25 FUND AND MANAGER REVIEW [PHOTO] [PHOTO] [PHOTO] Loomis Sayles Worldwide Fund DANIEL J. FUSS DAVID ROLLEY ALEXANDER MUROMCEW Key Fund Facts [PHOTO] [PHOTO] [PHOTO] Objective| High total investment return QUENTIN P. FAULKNER ESWAR MENON JOHN TRIBOLET Strategy| Invests in U.S. and foreign equity and debt securities Fund Inception Date| 5/1/96 Commencement of Operations of Class| Institutional: 5/1/96
Expense Ratio| Institutional: 1.00% Total Net Assets| $8.5 Million - --------------------------------------------------------- PERFORMANCE For the one-year period ended September 30, 2001, the Institutional class of the Worldwide Fund posted a total return of -15.03%, compared to the -26.63% total return for the Fund's benchmark, the Standard & Poor's 500 Index. The total return for the Lipper Global Flexible Portfolio Funds Average was -17.10% for the same period. PORTFOLIO REVIEW The worldwide economic slowdown led to earnings disappointments and valuation concerns. In particular, the technology sector suffered steep declines as the market worked off the excesses from the sector's unprecedented run. In general, investment-grade bonds benefited from a slowing economy and a declining interest rate environment. High-yield bonds, though, had a difficult year due to earnings troubles and a rising default rate. The second half of the fiscal year, we decided to make the Fund's foreign and domestic equity weightings approximately 25% each, as we felt the U.S. economy was closer to a recovery than most of the world. The Fund's U.S. equity component outperformed its benchmark for the year, primarily due to a large cash position and the Fund being substantially under-weighted in technology. The Fund's international equity component out-performed its benchmark due to stock selection and the Fund's underweight position in technology sector. The Fund's domestic and global bonds underperformed primarily due to a significant commitment to high-yield bonds and the Fund's overweight position in the U.S. dollar. PORTFOLIO POSITIONING We have made the U.S. equity segment modestly more defensive by reducing cyclicals and establishing positions in defense and real estate investment trusts (REITs). We also are keeping cash at a high level. We added a defensive tilt to the international equity component, with increased weightings in financial services and health care issues and a reduced weighting in energy and industrials issues. In the domestic bond segment, we remain focused on corporate bonds selling at a discount. With our global bonds, we have shifted significantly to non-U.S. dollar holdings, mainly by adding euro-denominated bonds. /s/ Daniel J. Fuss /s/ David Rolley /s/ Alexander Moromcew Daniel J.Fuss David Rolley Alexander Muromcew /s/ Quentin Faulkner /s/ Eswar Menon /s/ John Tribolet Quentin P. Faulkner Eswar Menon John Tribolet AVERAGE ANNUAL RETURNS-PERIODS ENDED SEPTEMBER 30, 2001
- --------------------------------------------------------------------------------------- SINCE 1 YEAR 3 YEARS 5 YEARS INCEPTION(a) - --------------------------------------------------------------------------------------- LOOMIS SAYLES WORLDWIDE FUND (INSTITUTIONAL) -15.03% 16.75% 9.18% 9.12% Lipper Global Flexible Portfolio Funds Index/(b)/ -17.21% 4.65% 5.64% 5.74% S&P 500 Index/(c)/ -26.63% 2.03% 10.22% 10.61%
CUMULATIVE PERFORMANCE--5/1/96 to 9/30/01 [CHART]
Lipper Global Flexible Loomis Sayles S & P 500 Portfolio Funds Index Worldwide Fund Index 5/1/1996 10000 10000 10000 5/31/1996 10,063 10,090 10,258 6/30/1996 10,105 10,120 10,297 7/31/1996 9,859 9,780 9,842 8/31/1996 10,004 10,020 10,050 9/30/1996 10,285 10,340 10,616 10/31/1996 10,412 10,540 10,908 11/30/1996 10,855 11,050 11,733 12/31/1996 10,870 10,924 11,500 1/31/1997 11,071 10,924 12,219 2/28/1997 11,135 10,944 12,314 3/31/1997 10,953 10,924 11,808 4/30/1997 11,060 11,027 12,513 5/31/1997 11,526 11,345 13,275 6/30/1997 11,848 11,479 13,871 7/31/1997 12,336 12,093 14,974 8/31/1997 11,982 11,803 14,135 9/30/1997 12,492 12,270 14,909 10/31/1997 12,049 11,564 14,411 11/30/1997 12,087 11,575 15,078 12/31/1997 12,190 11,308 15,337 1/31/1998 12,220 11,652 15,507 2/28/1998 12,771 12,363 16,625 3/31/1998 13,200 12,477 17,477 4/30/1998 13,316 12,317 17,652 5/31/1998 13,202 11,789 17,349 6/30/1998 13,198 11,296 18,054 7/31/1998 13,063 11,296 17,861 8/31/1998 11,617 10,092 15,283 9/30/1998 11,803 10,081 16,258 10/31/1998 12,420 10,803 17,580 11/30/1998 12,976 11,445 18,647 12/31/1998 13,287 11,645 19,720 1/31/1999 13,444 11,807 20,545 2/28/1999 13,117 11,582 19,906 3/31/1999 13,544 11,945 20,703 4/30/1999 14,272 12,447 21,504 5/31/1999 14,045 12,509 20,996 6/30/1999 14,565 12,798 22,164 7/31/1999 14,555 13,036 21,470 8/31/1999 14,504 12,986 21,364 9/30/1999 14,425 12,885 20,778 10/31/1999 14,717 13,387 22,093 11/30/1999 15,234 15,481 22,547 12/31/1999 16,258 18,688 23,870 1/31/2000 15,926 18,051 22,670 2/29/2000 16,812 20,626 22,241 3/31/2000 16,731 20,314 24,416 4/30/2000 16,171 19,392 23,682 5/31/2000 15,917 18,932 23,196 6/30/2000 16,487 19,514 23,768 7/31/2000 16,284 18,877 23,396 8/31/2000 16,839 19,406 24,849 9/30/2000 16,342 18,877 23,538 10/31/2000 16,025 17,983 23,438 11/30/2000 15,406 17,074 21,590 12/31/2000 16,030 17,857 21,696 1/31/2001 16,237 18,008 22,466 2/28/2001 15,418 17,554 20,417 3/31/2001 14,658 16,741 19,124 4/30/2001 15,405 17,025 20,610 5/31/2001 15,287 17,289 20,748 6/30/2001 15,064 17,157 20,243 7/31/2001 14,851 16,968 20,044 8/31/2001 14,484 16,873 18,789 9/30/2001 13,529 16,041 17,270
Foreign investments involve special risks including greater economic, political and currency fluctuation risks, which may be even greater in emerging markets. In addition, foreign countries may have different accounting standards than those of the U.S., which may adversely affect the value of the Fund. Note: Past performance is no guarantee of future performance. Average annual returns assume reinvestment of dividends and capital gains distributions. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data reflects certain fee waivers and reimbursements. Without such waivers, performance and rankings would be lower. (a)Inception date of the Institutional Class of shares is May 1, 1996. Since Lipper Global Flexible Portfolio Funds Index and S&P 500 Index performance data is not available coincident with the Fund's inception date, comparative performance is presented from the month end closest to the Fund's inception date (April 30, 1996). (b)The Lipper Global Flexible Portfolio Funds Index is an equally weighted unmanaged index of typically the 10 largest mutual funds within the global flexible portfolio funds investment objective. Returns are adjusted for the reinvestment of capital gains distributions and income dividends. It is not possible to invest directly in an index. Source: Lipper Inc. (c)S&P 500 Index is a capitalization-weighted, unmanaged total return index comprised of 500 widely held common stocks, representing industrial, utility, transportation, and financial companies traded on the New York Stock Exchange, the American Stock Exchange and in the over-the-counter market. The Index returns have not been reduced for ongoing management and operating expenses applicable to mutual fund investments. It is not possible to invest directly in an index. [Graphic] Loomis Sayles Equity Funds 27 Loomis Sayles Aggressive Growth Fund PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - ------------------------------------------------------------------ COMMON STOCKS - 98.4% of net assets BROADCASTING--1.6% Cox Radio, Inc. Class A* 47,200 $ 952,024 ---------- BUSINESS SERVICES--1.6% ChoicePoint, Inc.* 22,900 953,556 ---------- CHEMICALS--SPECIALTY--2.2% Cabot Microelectronics Corp.* 27,200 1,314,032 ---------- COMMUNICATIONS EQUIPMENT--3.0% Brocade Communications Systems, Inc.* 42,900 601,887 Finisar Corp.* 100,100 396,396 QLogic Corp.* 41,400 786,600 ---------- 1,784,883 ---------- COMPUTER SERVICES--5.4% Affiliated Computer Services, Inc. Class A* 14,100 1,147,881 EarthLink, Inc.* 66,600 1,014,318 SunGard Data Systems, Inc.* 45,700 1,068,009 ---------- 3,230,208 ---------- COMPUTER SOFTWARE--12.2% Advent Software, Inc.* 24,100 907,365 Citrix Systems, Inc.* 35,100 694,980 Electronic Arts, Inc.* 25,500 1,164,585 Intuit, Inc.* 32,700 1,170,660 Macrovision Corp.* 31,000 880,710 THQ, Inc.* 24,800 1,070,120 VeriSign, Inc.* 34,900 1,462,310 ---------- 7,350,730 ---------- EDUCATION--2.5% Apollo Group, Inc. Class A* 35,600 1,496,268 ---------- ELECTRONIC COMPONENTS--SEMICONDUCTORS--12.6% Broadcom Corp. Class A* 34,000 690,200 Cree Research, Inc.* 39,500 583,810 Integrated Device Technology, Inc.* 49,100 987,892 Intersil Corp. Class A* 47,600 1,328,992 Marvell Technology Group Ltd.* 53,100 761,985 NVIDIA Corp.* 30,200 829,594 RF Micro Devices, Inc.* 71,100 1,180,260 Semtech Corp.* 43,200 1,226,016 ---------- 7,588,749 ---------- FINANCIAL SERVICES--2.1% Investors Financial Services Corp. 22,200 1,279,608 ---------- HEALTHCARE--BIOTECHNOLOGY--13.0% Abgenix, Inc.* 29,800 676,460 COR Therapeutics, Inc.* 23,700 536,331
Loomis Sayles Aggressive Growth Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ------------------------------------------------------------ COMMON STOCKS - continued HEALTHCARE--BIOTECHNOLOGY--CONTINUED Gilead Sciences, Inc.* 20,000 $1,123,400 Human Genome Sciences, Inc.* 21,500 664,565 ICOS Corp.* 18,500 910,385 IDEC Pharmaceuticals Corp.* 19,700 976,529 ImClone Systems, Inc.* 10,800 610,740 Invitrogen Corp.* 17,300 1,137,648 MedImmune, Inc.* 17,700 630,651 Protein Design Labs, Inc.* 12,400 585,652 ---------- 7,852,361 ---------- HEALTHCARE--DRUGS--9.7% Barr Laboratories, Inc.* 14,700 1,162,182 Biovail Corp.* 25,200 1,169,280 Cephalon, Inc.* 10,100 503,788 King Pharmaceuticals, Inc.* 44,266 1,856,959 Mylan Laboratories, Inc. 34,700 1,131,914 ---------- 5,824,123 ---------- HEALTHCARE--MEDICAL TECHNOLOGY--3.1% Cytyc Corp.* 69,500 1,863,295 ---------- HEALTHCARE--SERVICES--9.4% Express Scripts, Inc. Class A* 30,000 1,659,600 Laboratory Corp. of America Holdings* 19,800 1,600,830 LifePoint Hospitals, Inc.* 26,400 1,161,600 Quest Diagnostics, Inc.* 19,600 1,209,320 ---------- 5,631,350 ---------- INSURANCE--4.0% Arthur J. Gallagher & Co. 27,700 937,645 Lincoln National Corp. 31,800 1,482,834 ---------- 2,420,479 ---------- MACHINERY--1.4% KLA-Tencor Corp.* 27,600 871,608 ---------- OIL & GAS EXPLORATION--3.1% Murphy Oil Corp. 13,900 1,005,804 Ocean Energy, Inc. 53,600 873,680 ---------- 1,879,484 ---------- RETAIL--SPECIALTY--8.4% Best Buy Co., Inc.* 18,800 854,460 Blockbuster, Inc. Class A 57,900 1,268,010 CDW Computer Centers, Inc.* 33,200 1,201,176 Coach, Inc.* 31,600 837,716 Williams-Sonoma, Inc.* 37,400 890,494 ---------- 5,051,856 ----------
[Graphic] Loomis Sayles Equity Funds 29 Loomis Sayles Aggressive Growth Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - ------------------------------------------------------------------------------------- COMMON STOCKS - continued TELECOMMUNICATIONS--WIRELESS--1.6% Triton PCS Holdings, Inc. Class A* 25,000 $ 950,000 ----------- UTILITIES--1.5% Calpine Corp.* 40,000 912,400 ----------- TOTAL COMMON STOCKS (Identified Cost $77,171,745) 59,207,014 ----------- Face Amount - ------------------------------------------------------------------------------------- SHORT-TERM INVESTMENT - 1.4% of net assets Repurchase Agreement with State Street Corp., dated 9/28/01 at 2.000% to be repurchased at $858,143 on 10/01/01 collateralized by $545,000 U.S Treasury Bond, 13.250% due 05/15/14 with a value of $876,631 $858,000 858,000 ----------- TOTAL SHORT-TERM INVESTMENT (Identified Cost $858,000) 858,000 ----------- TOTAL INVESTMENTS--99.8% (IDENTIFIED COST $78,029,745)@ 60,065,014 Cash and Other Assets, Less Liabilities--0.2% 144,118 ----------- NET ASSETS--100% $60,209,132 ===========
+ See Note 1. * Non-income producing security @ At September 30, 2001, the net unrealized depreciation on investments based on cost of $78,399,096 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value were $2,458,348 and $20,792,430, respectively, resulting in net unrealized depreciation of $18,334,082. See accompanying notes to financial statements. Loomis Sayles Emerging Markets Fund PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - ----------------------------------------------------------------------------------- COMMON STOCKS - 100.9% of net assets BRAZIL--4.9% Companhia Paranaense de Energia-Copel ADR 3,900 $ 22,815 Embraer-Empresa Brasileria de Aeronautica SA ADR 2,558 32,615 Tele Norte Leste Participacoes SA ADR 3,700 33,485 ---------- 88,915 ---------- CROATIA--2.9% Zagrebacka Banka d.d. GDR 2,800 53,900 ---------- HONG KONG--2.3% China Mobile (Hong Kong) Ltd.* 13,500 42,839 ---------- HUNGARY--3.4% OTP Bank 1,300 62,661 ---------- INDIA--16.7% Dr. Reddy's Laboratories Ltd. ADR* 3,700 82,325 HDFC Bank Ltd. ADR* 3,700 51,060 Infosys Technologies Ltd. ADR 950 32,119 State Bank of India GDR 5,600 42,112 Videsh Sanchar Nigam Ltd. ADR 4,400 41,712 Wipro Ltd. ADR 2,700 57,240 ---------- 306,568 ---------- INDONESIA--2.1% PT Gudang Garam Tbk 36,500 37,600 ---------- ISRAEL--8.2% Check Point Software Technologies Ltd.* 1,450 31,929 Comverse Technology, Inc.* 1,700 34,816 Mercury Interactive Corp.* 900 17,136 Teva Pharmaceutical Industries Ltd. ADR 1,100 66,495 ---------- 150,376 ---------- MEXICO--11.6% America Movil SA de CV, Series L ADR 2,700 40,041 Corporacion Interamericana de Entretenimiento SA, Series B* 26,700 53,327 Grupo Modelo SA de CV, Series C 15,400 33,510 Grupo Televisa SA ADR* 1,300 37,310 Telefonos de Mexico SA ADR 1,500 48,435 ---------- 212,623 ---------- PHILIPPINES--2.2% Ayala Land, Inc. 483,000 40,446 ---------- RUSSIA--1.1% Norilsk Nickel ADR* 1,500 19,425 ---------- SINGAPORE--6.4% Datacraft Asia Ltd. 11,440 37,523 Frontline Technologies Corp. Ltd.* 253,000 40,806 Venture Manufacturing (Singapore) Ltd. 8,000 39,614 ---------- 117,943 ----------
[Graphic] Loomis Sayles Equity Funds 31 Loomis Sayles Emerging Markets Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - ---------------------------------------------------------------------- COMMON STOCKS - continued SOUTH AFRICA--6.4% Anglo American Plc 5,100 $ 61,332 Standard Bank Investment Corp. Ltd. 16,300 55,833 ----------- 117,165 ----------- SOUTH KOREA--23.1% Cheil Jedang Corp. 800 23,252 H&CB 3,527 75,733 Humax Co. Ltd. 4,800 69,939 Hyundai Motor Co. Ltd. 2,900 37,362 LG Home Shopping, Inc. 1,700 55,928 Samsung Electronics 460 49,386 Samsung Securities Co. Ltd. 2,600 56,725 SK Telecom Co. Ltd. 350 55,828 ----------- 424,153 ----------- TAIWAN--4.1% Asustek Computer, Inc. 13,750 41,238 Taiwan Semiconductor Manufacturing Co. Ltd. 25,200 34,101 ----------- 75,339 ----------- THAILAND--5.5% Advanced Info Service 5,000 53,495 Bangkok Bank Public Co. Ltd.* 51,800 47,155 ----------- 100,650 ----------- TOTAL COMMON STOCKS (Identified Cost $2,604,567) 1,850,603 ----------- TOTAL INVESTMENTS--100.9% (IDENTIFIED COST $2,604,567)@ 1,850,603 Liabilities, Less Cash and Other Assets--(0.9%) (16,988) ----------- NET ASSETS--100% $ 1,833,615 ===========
+ See Note 1. * Non-income producing security @ At September 30, 2001, the net unrealized depreciation on investments based on cost of $2,638,460 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value were $59,957 and $848,325, respectively, resulting in net unrealized depreciation of $788,368. Key to Abbreviations: ADR: American Depositary Receipt GDR: Global Depositary Receipt Loomis Sayles Emerging Markets Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001 TEN LARGEST SECTOR HOLDINGS AT SEPTEMBER 30, 2001 AS A PERCENTAGE OF NET ASSETS Telecommunications 15.0% Banks/Savings & Loans 10.5% Computer Software 9.4% Banking & Finance 8.1% Healthcare--Drugs 8.1% Computer Services 6.4% Financial Services 5.7% Communications Equipment 3.8% Mining 3.3% Retail--Specialty 3.1%
See accompanying notes to financial statements. [Graphic] Loomis Sayles Equity Funds 33 Loomis Sayles Global Technology Fund PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ------------------------------------------------------------------ COMMON STOCKS - 93.3% of net assets CHEMICALS--SPECIALTY--1.0% Cabot Microelectronics Corp.* 400 $ 19,324 ----------- COMMERCIAL SERVICES--0.8% FreeMarkets, Inc.* 1,550 16,399 ----------- COMMUNICATIONS EQUIPMENT--11.0% APT Satellite Holdings Ltd. 97,000 29,226 Emulex Corp.* 1,300 12,363 Humax Co. Ltd. 3,300 48,083 JDS Uniphase Corp.* 6,100 38,552 Nokia Oyj 2,400 39,205 ONI Systems Corp.* 2,800 11,284 QUALCOMM, Inc.* 550 26,147 Sonus Networks, Inc.* 4,050 12,150 ----------- 217,010 ----------- COMPUTER HARDWARE--3.3% Asustek Computer, Inc. 9,000 26,992 Dell Computer Corp.* 1,050 19,457 EMC Corp. 1,600 18,800 ----------- 65,249 ----------- COMPUTER SERVICES--10.9% Celestica, Inc.* 1,500 40,558 Datacraft Asia Ltd. 13,040 42,771 Frontline Technologies Corp. Ltd.* 287,000 46,289 Itochu Techno-Science Corp. 500 33,932 Radware Ltd.* 2,600 22,698 Venture Manufacturing (Singapore) Ltd. 6,000 29,711 ----------- 215,959 ----------- COMPUTER SOFTWARE--21.6% BEA Systems, Inc.* 1,150 11,029 Centra Software, Inc.* 350 2,996 Check Point Software Technologies Ltd.* 1,450 31,929 Citrix Systems, Inc.* 500 9,900 Comverse Technology, Inc.* 1,200 24,576 Infosys Technologies Ltd. ADR 800 27,048 Intuit, Inc.* 650 23,270 Macrovision Corp.* 550 15,625 Mercury Interactive Corp.* 800 15,232 Microsoft Corp.* 500 25,585 NCsoft Corp. 600 43,252 Nippon System Development Co. Ltd. 600 26,978 Quest Software, Inc.* 1,150 13,317 Software AG 900 33,736 Stellent, Inc.* 1,500 21,600 VeriSign, Inc.* 700 29,330 Veritas Software Corp.* 1,000 18,440 WebEx Communications, Inc.* 1,000 21,240 Wipro Ltd. ADR 1,500 31,800 ----------- 426,883 ----------- DIVERSIFIED OPERATIONS--2.0% Groupe Bruxelles Lambert SA 800 38,950 -----------
Loomis Sayles Global Technology Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + --------------------------------------------------------------------- COMMON STOCKS - continued ELECTRONIC COMPONENTS--10.0% Elec & Eltek International Co. Ltd. 11,000 $ 27,390 FEI Co.* 600 13,050 Flextronics International Ltd.* 1,900 31,426 Hon Hai Precision Industry Co. Ltd. 8,000 25,268 Olympus Optical Co. Ltd. 3,000 42,153 Samsung Electronics 330 35,429 Surface Mount Technology (Holdings) Ltd.* 113,000 23,661 ----------- 198,377 ----------- ELECTRONIC COMPONENTS--SEMICONDUCTORS--8.9% Broadcom Corp. Class A* 600 12,180 Genesis Microchip, Inc.* 1,100 30,954 Integrated Device Technology, Inc.* 900 18,108 Marvell Technology Group Ltd.* 1,050 15,068 RF Micro Devices, Inc.* 1,200 19,920 Semtech Corp.* 500 14,190 Silicon Laboratories, Inc.* 1,400 19,306 STMicroelectronics NV 1,400 30,086 Virage Logic Corp.* 1,450 15,848 ----------- 175,660 ----------- HEALTHCARE--BIOTECHNOLOGY--6.1% Celltech Group Plc* 2,700 27,508 Human Genome Sciences, Inc.* 500 15,455 ICOS Corp.* 450 22,144 Myriad Genetics, Inc.* 550 16,852 Serono SA 2,100 39,858 ----------- 121,817 ----------- HEALTHCARE--DRUGS--5.6% Biovail Corp.* 1,400 64,960 CSL Ltd. 1,400 31,128 Taro Pharmaceutical Industries Ltd.* 400 14,064 ----------- 110,152 ----------- HEALTHCARE--MEDICAL SUPPLIES--3.0% Cochlear Ltd. 2,550 58,779 ----------- MACHINERY--2.1% ASM Lithography Holding NV* 800 8,968 KLA-Tencor Corp.* 550 17,369 Novellus Systems, Inc.* 550 15,708 ----------- 42,045 ----------- MEDIA & ENTERTAINMENT--3.0% Vivendi Universal SA 1,300 60,159 ----------- OFFICE EQUIPMENT--1.4% Canon, Inc. 1,000 27,431 ----------- TELECOMMUNICATIONS--1.8% BCE Emergis, Inc.* 900 16,613 British Telecommunications Plc 3,700 18,494 ----------- 35,107 -----------
[Graphic] Loomis Sayles Equity Funds 35 Loomis Sayles Global Technology Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - ------------------------------------------------------------------------------------------ COMMON STOCKS - continued TELECOMMUNICATIONS--WIRELESS--0.8% Nextel Communications, Inc. Class A* 1,950 $ 16,848 ----------- TOTAL COMMON STOCKS (Identified Cost $2,856,769) 1,846,149 ----------- Face Amount - ------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENT - 6.8% of net assets Repurchase Agreement with State Street Corp., dated 9/28/01 at 2.000% to be repurchased at $135,023 on 10/01/01 collateralized by $120,000 U.S. Treasury Note, 7.875% due 11/15/04 with a value of $139,350 $135,000 135,000 ----------- TOTAL SHORT-TERM INVESTMENT (Identified Cost $135,000) 135,000 ----------- TOTAL INVESTMENTS--100.1% (IDENTIFIED COST $2,991,769)@ 1,981,149 Liabilities, Less Cash and Other Assets--(0.1%) (2,619) ----------- NET ASSETS--100% $ 1,978,530 ===========
+ See Note 1. * Non-income producing security @ At September 30, 2001, the net unrealized depreciation on investments based on cost of $3,118,542 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value were $31,788 and $1,169,181, respectively, resulting in net unrealized depreciation of $1,137,393. Key to Abbreviations: ADR: American Depositary Receipt TEN LARGEST COUNTRY HOLDINGS AT SEPTEMBER 30, 2001 AS A PERCENTAGE OF NET ASSETS United States 33.5% Canada 8.1% Singapore 7.4% Japan 6.6% Israel 5.5% France 4.6% Australia 4.5% South Korea 4.2% India 3.0% Hong Kong 2.7%
See accompanying notes to financial statements. Loomis Sayles Growth Fund PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - ------------------------------------------------------------------- COMMON STOCKS - 98.6% of net assets ADVERTISING--1.9% Omnicom Group, Inc. 6,600 $ 428,340 ------------ AUTO & RELATED--1.3% Harley-Davidson, Inc. 7,200 291,600 ------------ COMMERCIAL SERVICES--2.8% eBay, Inc.* 13,400 613,050 ------------ COMMUNICATIONS EQUIPMENT--1.7% Cisco Systems, Inc.* 31,500 383,670 ------------ COMPUTER HARDWARE--2.6% International Business Machines Corp. 6,100 563,030 ------------ COMPUTER SERVICES--2.1% Affiliated Computer Services, Inc. Class A* 1,700 138,397 SunGard Data Systems, Inc.* 14,200 331,854 ------------ 470,251 ------------ COMPUTER SOFTWARE--6.0% Citrix Systems, Inc.* 11,700 231,660 Microsoft Corp.* 10,500 537,285 VeriSign, Inc.* 13,600 569,840 ------------ 1,338,785 ------------ DATA PROCESSING SERVICES--2.7% First Data Corp. 10,400 605,904 ------------ DIVERSIFIED OPERATIONS--6.1% General Electric Co. 20,700 770,040 Tyco International Ltd. 12,800 582,400 ------------ 1,352,440 ------------ ELECTRONIC COMPONENTS--SEMICONDUCTORS--5.0% Analog Devices, Inc.* 6,600 215,820 Intel Corp. 9,600 196,224 NVIDIA Corp.* 17,200 472,484 Texas Instruments, Inc. 9,100 227,318 ------------ 1,111,846 ------------ FINANCIAL SERVICES--12.5% Bank of America Corp. 8,300 484,720 Concord EFS, Inc.* 12,100 592,295 Household International, Inc. 5,800 327,004 Moody's Corp. 19,000 703,000 USA Education, Inc. 8,100 671,571 ------------ 2,778,590 ------------ FOOD & BEVERAGE--5.6% Kraft Foods, Inc. Class A 14,800 508,676 PepsiCo, Inc. 15,200 737,200 ------------ 1,245,876 ------------ GOVERNMENT AGENCIES--3.9% Federal Home Loan Mortgage Corp. 13,100 851,500 ------------
[Graphic] Loomis Sayles Equity Funds 37 Loomis Sayles Growth Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ----------------------------------------------------------- COMMON STOCKS - continued HEALTHCARE--DRUGS--11.1% Abbott Laboratories 8,300 $ 430,355 Forest Laboratories, Inc.* 9,000 649,260 Johnson & Johnson 16,700 925,180 King Pharmaceuticals, Inc.* 10,933 458,639 ------------ 2,463,434 ------------ HEALTHCARE--PRODUCTS--8.4% Amerisource Corp.* 7,600 539,220 Baxter International, Inc. 13,600 748,680 Stryker Corp. 11,000 581,900 ------------ 1,869,800 ------------ HEALTHCARE--SERVICES--8.6% Cardinal Health, Inc. 9,150 676,643 Quest Diagnostics, Inc.* 8,600 530,620 Tenet Healthcare Corp.* 11,600 691,940 ------------ 1,899,203 ------------ HOLDING COMPANIES--DIVERSIFIED--2.0% Berkshire Hathaway, Inc. Class B* 189 440,370 ------------ INSURANCE--2.3% American International Group, Inc. 6,500 507,000 ------------ MACHINERY--1.2% KLA-Tencor Corp.* 4,000 126,320 Novellus Systems, Inc.* 4,500 128,520 ------------ 254,840 ------------ OIL & GAS--2.3% Chevron Corp. 6,100 516,975 ------------ RETAIL--GENERAL--1.6% Family Dollar Stores, Inc. 12,800 352,256 ------------ RETAIL--SPECIALTY--6.9% Bed Bath & Beyond, Inc.* 9,400 239,324 Best Buy Co., Inc.* 14,700 668,115 Lowe's Cos., Inc. 19,700 623,505 ------------ 1,530,944 ------------ TOTAL COMMON STOCKS (Identified Cost $23,479,772) 21,869,704 ------------
Loomis Sayles Growth Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Face Amount Value + - --------------------------------------------------------------------------------------- SHORT-TERM INVESTMENT - 4.0% of net assets Repurchase Agreement with State Street Corp., dated 9/28/01 at 2.000% to be repurchased at $888,148 on 10/01/01 collateralized by $780,000 U.S Treasury Note, 7.875% due 11/15/04 with a value of $905,775 $888,000 $ 888,000 ----------- TOTAL SHORT-TERM INVESTMENT (Identified Cost $888,000) 888,000 ----------- TOTAL INVESTMENTS--102.6% (IDENTIFIED COST $24,367,772)@ 22,757,704 Liabilities, Less Cash and Other Assets--(2.6%) (579,545) ----------- NET ASSETS--100% $22,178,159 ===========
+ See Note 1. * Non-income producing security @ At September 30, 2001, the net unrealized depreciation on investments based on cost of $24,512,642 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value were $807,515 and $2,562,453, respectively, resulting in net unrealized depreciation of $1,754,938. See accompanying notes to financial statements. [Graphic] Loomis Sayles Equity Funds 39 Loomis Sayles International Equity Fund PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - -------------------------------------------------------------------------- COMMON STOCKS - 97.8% of net assets AUSTRALIA--6.2% Coca-Cola Amatil Ltd. 201,000 $ 542,859 Foster's Brewing Group Ltd. 261,200 644,721 Macquarie Infrastructure Group 232,900 391,693 Mayne Nickless Ltd. 141,600 495,200 Rio Tinto Ltd. 38,800 599,763 Wesfarmers Ltd. 43,600 639,670 Westpac Banking Corp. Ltd. 44,800 294,511 ------------ 3,608,417 ------------ BELGIUM--1.2% Interbrew 28,300 718,548 ------------ BRAZIL--0.5% Embraer-Empresa Brasileria de Aeronautica SA ADR 21,349 272,200 ------------ CANADA--7.6% Biovail Corp.* 11,200 517,731 Canadian Pacific Ltd. 18,900 606,543 Celestica, Inc.* 10,700 289,317 Manulife Financial Corp. 13,300 348,249 Petro-Canada 23,400 577,443 Precision Drilling Corp.* 18,800 397,619 Royal Bank of Canada 15,500 472,597 Sun Life Financial Services of Canada 17,900 359,201 TransCanada PipeLines Ltd. 65,200 839,772 ------------ 4,408,472 ------------ DENMARK--4.0% Danske Bank 47,100 737,703 Novo Nordisk A/S Series B 38,100 1,580,429 ------------ 2,318,132 ------------ FINLAND--0.5% Nokia Oyj 19,000 310,372 ------------ FRANCE--12.1% Aventis SA 10,900 826,298 Carrefour SA 13,500 649,912 Orange SA* 104,900 763,714 Sanofi-Synthelabo SA 11,900 774,316 STMicroelectronics NV 17,200 369,628 Technip 6,413 807,660 Thales SA 15,232 554,475 Total Fina SA Class B 6,730 903,383 Vivendi Environnement 18,200 704,255 Vivendi Universal SA 14,600 675,630 ------------ 7,029,271 ------------ GERMANY--2.3% Allianz AG 3,000 677,077 Muenchener Rueckversicherungs-Gesellschaft AG 2,600 668,432 ------------ 1,345,509 ------------
Loomis Sayles International Equity Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - ------------------------------------------------------------------- COMMON STOCKS - CONTINUED HONG KONG--2.7% China Mobile (Hong Kong) Ltd.* 72,000 $ 228,476 CNOOC Ltd. 623,000 619,046 Huaneng Power International, Inc. 1,274,000 718,713 ------------ 1,566,235 ------------ INDIA--1.4% Dr. Reddy's Laboratories Ltd. ADR* 35,100 780,975 ------------ IRELAND--6.0% Anglo Irish Bank Corp. Plc 218,900 649,424 Bank of Ireland* 71,200 564,369 Elan Corp. Plc ADR* 25,900 1,254,855 Galen Holdings Plc ADR 17,800 679,960 Ryanair Holdings Plc* 41,300 337,138 ------------ 3,485,746 ------------ ISRAEL--1.0% Amdocs Ltd.* 3,700 98,605 Teva Pharmaceutical Industries Ltd. ADR 7,600 459,420 ------------ 558,025 ------------ ITALY--2.7% ENI Spa 63,050 782,071 Riunione Adriatica di Sicurta Spa 62,700 753,193 ------------ 1,535,264 ------------ JAPAN--12.9% Canon, Inc. 11,000 301,736 Daiwa House Industry Co. Ltd. 66,000 481,671 FamilyMart Co. Ltd. 27,500 532,883 Honda Motor Co. Ltd. 14,600 473,970 JGC Corp. 2,000 14,563 Matsumotokiyoshi Co. Ltd. 12,200 510,679 Mitsubishi Pharma Corp. 47,000 559,852 Mitsui Fudosan Co. Ltd. 57,000 650,281 Nintendo Co. Ltd. 3,000 430,585 Nishimatsu Construction Co. Ltd. 167,000 757,881 Nissan Motor Co. Ltd. 91,000 379,389 Onward Kashiyama Co. Ltd. 47,000 508,993 Orix Corp. 6,800 567,570 Shohkoh Fund & Co. Ltd. 6,360 640,215 Takefuji Corp. 8,400 662,360 ------------ 7,472,628 ------------ NETHERLANDS--5.0% ASM Lithography Holding NV* 8,700 97,527 Fortis (NL) NV 40,415 986,431 Heineken NV 9,600 363,612
[Graphic] Loomis Sayles Equity Funds 41 Loomis Sayles International Equity Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ------------------------------------------------------------- COMMON STOCKS - CONTINUED NETHERLANDS--CONTINUED ING Groep NV 30,100 $ 806,161 Koninklijke (Ahold) NV 23,600 655,054 ------------ 2,908,785 ------------ PORTUGAL--1.8% Portugal Telecom SGPS SA 141,510 1,027,673 ------------ SOUTH AFRICA--1.3% Anglo American Plc 27,800 334,318 Standard Bank Investment Corp. Ltd. 126,300 432,623 ------------ 766,941 ------------ SOUTH KOREA--0.9% Samsung Electronics 2,300 246,933 Samsung Securities Co. Ltd. 12,470 272,064 ------------ 518,997 ------------ SPAIN--2.8% Endesa SA 21,700 336,705 Grupo Ferrovial SA 43,200 758,763 Telefonica SA 46,954 518,748 ------------ 1,614,216 ------------ SWITZERLAND--4.4% Nestle SA* 3,400 724,790 Synthes-Stratec, Inc. 1,600 1,047,949 UBS AG* 16,200 756,747 ------------ 2,529,486 ------------ UNITED KINGDOM--20.5% Allied Domecq Plc 127,700 711,527 Billiton Plc 124,500 512,036 BP Amoco Plc 148,400 1,226,116 British Telecommunications Plc 153,700 768,271 Capita Group Plc 130,200 706,316 Centrica Plc 185,800 581,817 Compass Group Plc 114,600 799,433 Diageo Plc 68,700 721,640 GlaxoSmithKline Plc 31,000 875,033 Reed International Plc 73,700 608,385 Royal Bank of Scotland Group Plc 61,200 1,347,798 Shire Pharmaceutical Group Plc* 112,300 1,518,900 Tesco Plc 240,300 904,389 Vodafone Group Plc 276,640 610,053 ------------ 11,891,714 ------------ TOTAL COMMON STOCKS (Identified Cost $61,777,981) 56,667,606 ------------
Loomis Sayles International Equity Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Face Amount Value + - --------------------------------------------------------------------------------------- SHORT-TERM INVESTMENT - 0.5% OF NET ASSETS Repurchase Agreement with State Street Corp., dated 9/28/01 at 2.000% to be repurchased at $291,049 on 10/01/01 collateralized by $260,000 U.S Treasury Note, 7.875% due 11/15/04 with a value of $301,925 $291,000 $ 291,000 ----------- TOTAL SHORT-TERM INVESTMENT (Identified Cost $291,000) 291,000 ----------- TOTAL INVESTMENTS--98.3% (IDENTIFIED COST $62,068,981)@ 56,958,606 Cash and Other Assets, Less Liabilities--1.7% 971,642 ----------- NET ASSETS--100% $57,930,248 ===========
+ See Note 1. * Non-income producing security @ At September 30, 2001, the net unrealized depreciation on investments based on cost of $62,575,711 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value were $2,066,118 and $7,683,223, respectively, resulting in net unrealized depreciation of $5,617,105. Key to Abbreviations: ADR:American Depositary Receipt TEN LARGEST SECTOR HOLDINGS AT SEPTEMBER 30, 2001 AS A PERCENTAGE OF NET ASSETS Healthcare--Drugs 14.8% Financial Services 9.9% Food & Beverage 8.6% Telecommunications 6.9% Oil & Gas 6.7% Banking & Finance 6.7% Building & Construction 4.8% Insurance 3.7% Retail--Food & Drug 3.6% Healthcare--Medical Technology 2.2%
See accompanying notes to financial statements. [Graphic] Loomis Sayles Equity Funds 43 Loomis Sayles Research Fund PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ------------------------------------------------------------------- COMMON STOCKS - 97.4% of net assets AEROSPACE/DEFENSE--1.0% Boeing Co. 1,200 $ 40,200 ----------- BUILDING MATERIALS--2.0% Masco Corp. 4,125 84,315 ----------- CHEMICALS--1.7% Air Products & Chemicals, Inc. 1,875 72,337 ----------- COMMUNICATIONS EQUIPMENT--2.7% Cisco Systems, Inc.* 2,500 30,450 Nokia Oyj ADR 2,875 44,994 Research In Motion Ltd.* 2,525 40,602 ----------- 116,046 ----------- COMPUTER HARDWARE--1.2% International Business Machines Corp. 550 50,765 ----------- COMPUTER SERVICES--0.9% SunGard Data Systems, Inc.* 1,675 39,145 ----------- COMPUTER SOFTWARE--4.1% Microsoft Corp.* 2,825 144,555 VERITAS Software Corp.* 1,700 31,348 ----------- 175,903 ----------- CONSUMER PRODUCTS--2.4% Avon Products, Inc. 925 42,781 Procter & Gamble Co. 825 60,052 ----------- 102,833 ----------- DIVERSIFIED OPERATIONS--4.5% General Electric Co. 2,350 87,420 Tyco International Ltd. 2,275 103,512 ----------- 190,932 ----------- ELECTRONIC COMPONENTS--SEMICONDUCTORS--4.2% Intel Corp. 2,050 41,902 Maxim Integrated Products, Inc.* 1,225 42,802 NVIDIA Corp.* 1,650 45,325 Texas Instruments, Inc. 1,900 47,462 ----------- 177,491 ----------- FINANCIAL SERVICES--14.3% Bank of America Corp. 1,525 89,060 Citigroup, Inc. 3,641 147,460 Concord EFS, Inc.* 1,025 50,174 FleetBoston Financial Corp. 2,175 79,931 Household International, Inc. 850 47,923 Lehman Brothers Holdings, Inc. 1,100 62,535 U.S. Bancorp 3,225 71,531 USA Education, Inc. 725 60,110 ----------- 608,724 -----------
Loomis Sayles Research Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + --------------------------------------------------------- COMMON STOCKS - continued FOOD & BEVERAGE--3.6% Anheuser-Busch Cos., Inc. 1,800 $ 75,384 PepsiCo, Inc. 900 43,650 SYSCO Corp. 1,350 34,479 ----------- 153,513 ----------- GOVERNMENT AGENCIES--1.5% Federal Home Loan Mortgage Corp. 950 61,750 ----------- HEALTHCARE--BIOTECHNOLOGY--1.0% ICOS Corp.* 900 44,289 ----------- HEALTHCARE--DRUGS--10.4% Abbott Laboratories 1,150 59,627 Allergan, Inc. 600 39,780 Forest Laboratories, Inc.* 725 52,302 Johnson & Johnson 2,225 123,265 Pfizer, Inc. 4,100 164,410 ----------- 439,384 ----------- HEALTHCARE--PRODUCTS--2.7% Baxter International, Inc. 1,200 66,060 Biomet, Inc. 1,700 49,725 ----------- 115,785 ----------- HEALTHCARE--SERVICES--1.3% Cardinal Health, Inc. 750 55,463 ----------- HOUSING & BUILDING MATERIALS--1.0% Leggett & Platt, Inc. 2,225 43,388 ----------- INSURANCE--3.5% Ace Ltd. 1,950 56,296 American International Group, Inc. 1,175 91,650 ----------- 147,946 ----------- MACHINERY--1.8% Danaher Corp. 1,625 76,667 ----------- MEDIA & ENTERTAINMENT--4.1% Cox Communications, Inc. Class A* 2,075 86,631 McGraw-Hill Cos., Inc. 1,475 85,845 ----------- 172,476 ----------- METALS & MINING--0.9% Alcoa, Inc. 1,175 36,437 ----------- NATURAL GAS--1.2% El Paso Corp. 1,205 50,068 ----------- OIL & GAS DRILLING EQUIPMENT--0.7% Nabors Industries, Inc.* 1,375 28,834 -----------
[Graphic] Loomis Sayles Equity Funds 45 Loomis Sayles Research Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + -------------------------------------------------------------------- COMMON STOCKS - continued OIL & GAS--MAJOR INTEGRATED--5.9% Conoco, Inc. Class B 1,150 $ 29,141 Exxon Mobil Corp. 4,100 161,540 Texaco, Inc. 950 61,750 ----------- 252,431 ----------- RESTAURANTS--1.0% McDonald's Corp. 1,575 42,746 ----------- RETAIL--SPECIALTY--2.1% Best Buy Co., Inc. * 1,050 47,722 CDW Computer Centers, Inc. * 1,100 39,798 ----------- 87,520 ----------- TELECOMMUNICATIONS--6.7% AT&T Corp. 2,300 44,390 BellSouth Corp. 1,850 76,867 CenturyTel, Inc. 1,850 61,975 Qwest Communications International, Inc. 1,950 32,565 Sprint Corp. 2,875 69,029 ----------- 284,826 ----------- TEXTILE & APPAREL--3.8% Jones Apparel Group, Inc. * 2,625 66,911 NIKE, Inc. Class B 2,000 93,620 ----------- 160,531 ----------- TOBACCO--2.9% Philip Morris Cos., Inc. 2,575 124,347 ----------- UTILITIES--2.3% Entergy Corp. 2,800 99,568 ----------- TOTAL COMMON STOCKS (Identified Cost $4,501,692) 4,136,660 ----------- TOTAL INVESTMENTS--97.4% (IDENTIFIED COST $4,501,692)@ 4,136,660 Cash and Other Assets, Less Liabilities--2.6% 108,281 ----------- NET ASSETS--100% $ 4,244,941 ===========
+ See Note 1. * Non-income producing security @ At September 30, 2001, the net unrealized depreciation on investments based on cost of $4,668,457 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value were $104,714 and $636,511, respectively, resulting in net unrealized depreciation of $531,797. Key to Abbreviation: ADR: American Depositary Receipt See accompanying notes to financial statements. Loomis Sayles Small Cap Growth Fund PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + --------------------------------------------------------------------------- COMMON STOCKS - 98.0% of net assets BANKS/SAVINGS & LOANS--2.4% New York Community Bancorp, Inc. 179,775 $ 4,172,578 ------------- BROADCASTING--3.6% Entercom Communications Corp.* 114,900 3,906,600 Radio One, Inc. Class D* 212,800 2,455,712 ------------- 6,362,312 ------------- BUSINESS SERVICES--7.7% Administaff, Inc.* 68,900 1,791,400 ChoicePoint, Inc.* 153,225 6,380,289 Corporate Executive Board Co.* 142,200 3,708,576 Global Payments, Inc. 56,200 1,652,280 ------------- 13,532,545 ------------- CHEMICALS--SPECIALTY--1.6% Cabot Microelectronics Corp.* 59,600 2,879,276 ------------- COMMERCIAL SERVICES--0.6% FreeMarkets, Inc.* 97,200 1,028,376 ------------- COMMUNICATIONS EQUIPMENT--3.8% Emulex Corp.* 183,800 1,747,938 Finisar Corp.* 302,100 1,196,316 Polycom, Inc.* 156,400 3,811,468 ------------- 6,755,722 ------------- COMPUTER SERVICES--2.6% Manhattan Associates, Inc.* 166,000 2,815,360 Perot Systems Corp. Class A* 113,200 1,828,180 ------------- 4,643,540 ------------- COMPUTER SOFTWARE--6.5% Advent Software, Inc.* 51,000 1,920,150 Echelon Corp.* 120,000 1,497,600 Macrovision Corp.* 93,450 2,654,914 Stellent, Inc.* 155,050 2,232,720 THQ, Inc.* 73,200 3,158,580 ------------- 11,463,964 ------------- EDUCATION--1.4% Career Education Corp.* 43,300 2,381,500 ------------- ELECTRICAL EQUIPMENT--2.0% AstroPower, Inc.* 59,200 2,042,992 Varian Semiconductor Equipment Associates, Inc.* 58,500 1,512,225 ------------- 3,555,217 ------------- ELECTRONIC COMPONENTS--4.1% FEI Co.* 99,000 2,153,250 Intermagnetics General Corp. 106,194 2,470,072 Plexus Corp.* 111,800 2,636,244 ------------- 7,259,566 -------------
[Graphic] Loomis Sayles Equity Funds 47 Loomis Sayles Small Cap Growth Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + -------------------------------------------------------------------------- COMMON STOCKS - continued ELECTRONIC COMPONENTS--SEMICONDUCTORS--10.9% Alpha Industries, Inc.* 124,500 $ 2,411,565 Cree Research, Inc.* 114,200 1,687,876 Cymer, Inc.* 96,400 1,614,700 GlobeSpan, Inc.* 231,000 2,088,240 Kopin Corp.* 202,600 2,113,118 Marvell Technology Group Ltd.* 163,400 2,344,790 Microsemi Corp.* 158,800 4,136,740 Power Integrations, Inc.* 153,200 2,791,304 ------------- 19,188,333 ------------- ENVIRONMENTAL SERVICES--1.3% Tetra Tech, Inc.* 106,100 2,344,810 ------------- FINANCIAL SERVICES--3.8% Investors Financial Services Corp. 78,900 4,547,796 Metris Cos., Inc. 86,000 2,128,500 ------------- 6,676,296 ------------- HEALTHCARE--BIOTECHNOLOGY--8.6% Abgenix, Inc.* 82,700 1,877,290 Alkermes, Inc.* 79,300 1,552,694 Charles River Laboratories International, Inc.* 49,000 1,733,130 Exelixis, Inc.* 115,500 1,323,630 Integra LifeSciences Holdings* 103,700 2,864,194 Myriad Genetics, Inc.* 59,100 1,810,824 Trimeris, Inc.* 66,500 2,334,150 Tularik, Inc.* 87,900 1,619,118 ------------- 15,115,030 ------------- HEALTHCARE--DRUGS--10.7% Barr Laboratories, Inc.* 81,800 6,467,108 CIMA Labs, Inc.* 44,800 2,721,600 Covance, Inc.* 166,300 2,978,433 Kos Pharmaceuticals, Inc.* 68,400 1,904,940 Medicis Pharmaceutical Corp. Class A* 67,650 3,381,147 OSI Pharmaceuticals, Inc.* 40,700 1,322,750 ------------- 18,775,978 ------------- HEALTHCARE--PRODUCTS--2.0% ArthroCare Corp.* 112,400 2,203,040 SurModics, Inc.* 30,700 1,226,465 ------------- 3,429,505 ------------- HEALTHCARE--SERVICES--7.7% Accredo Health, Inc.* 34,500 1,255,800 AdvancePCS* 74,250 5,329,665 Pharmaceutical Product Development, Inc.* 92,700 2,715,183 Province Health Care, Inc.* 88,600 3,255,164 Specialty Laboratories, Inc.* 34,000 935,000 ------------- 13,490,812 -------------
Loomis Sayles Small Cap Growth Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - -------------------------------------------------------------------------------------------- COMMON STOCKS - continued INSURANCE--2.1% HCC Insurance Holdings, Inc. 141,100 $ 3,710,930 ------------- OIL & GAS DRILLING EQUIPMENT--1.5% Hanover Compressor Co.* 123,800 2,679,032 ------------- OIL & GAS EXPLORATION--3.2% Pogo Producing Co. 76,900 1,807,150 Spinnaker Exploration Co.* 56,800 2,009,584 Vintage Petroleum, Inc. 107,900 1,710,215 ------------- 5,526,949 ------------- RESTAURANTS--1.8% The Cheesecake Factory, Inc.* 129,625 3,104,519 ------------- RETAIL--GENERAL--1.0% 99 Cents Only Stores* 55,700 1,801,895 ------------- RETAIL--SPECIALTY--6.2% AnnTaylor Stores Corp.* 83,300 1,825,936 bebe stores, Inc.* 124,500 1,874,970 Hot Topic, Inc.* 100,400 2,520,040 O'Reilly Automotive, Inc.* 163,200 4,675,680 ------------- 10,896,626 ------------- TELECOMMUNICATIONS--WIRELESS--0.9% US Unwired, Inc. Class A* 157,400 1,597,610 ------------- TOTAL COMMON STOCKS (Identified Cost $221,573,781) 172,372,921 ------------- Face Amount - -------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENT - 3.1% of net assets Repurchase Agreement with State Street Corp., dated 9/28/01 at 2.000% to be repurchased at $5,520,920 on 10/01/01 collateralized by $4,850,000 U.S. Treasury Note, 7.875% due 11/15/04 with a value of $5,632,063 $5,520,000 5,520,000 ------------- TOTAL SHORT-TERM INVESTMENT (Identified Cost $5,520,000) 5,520,000 ------------- TOTAL INVESTMENTS--101.1% (IDENTIFIED COST $227,093,781)@ 177,892,921 Liabilities, Less Cash and Other Assets--(1.1%) (1,955,787) ------------- NET ASSETS--100% $ 175,937,134 =============
[Graphic] Loomis Sayles Equity Funds 49 Loomis Sayles Small Cap Growth Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001 + See Note 1. * Non-income producing security @ At September 30, 2001, the net unrealized depreciation on investments based on cost of $227,375,501 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value were $7,552,211 and $57,034,791, respectively, resulting in net unrealized depreciation of $49,482,580. See accompanying notes to financial statements. Loomis Sayles Small Cap Value Fund PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value+ ----------------------------------------------------------------------- COMMON STOCKS - 93.9% of net assets AEROSPACE/DEFENSE--1.3% AAR Corp. 128,400 $ 1,028,484 Alliant Techsystems, Inc.* 27,000 2,311,200 Ladish Co., Inc.* 121,500 965,925 -------------- 4,305,609 -------------- AUTO & RELATED--0.8% Gentex Corp.* 58,400 1,395,176 Lear Corp.* 44,400 1,199,688 -------------- 2,594,864 -------------- BANKS/SAVINGS & LOANS--8.6% Astoria Financial Corp. 23,900 1,416,314 City National Corp. 32,000 1,380,800 Colonial BancGroup, Inc. 177,400 2,270,720 Commercial Federal Corp. 71,350 1,731,665 CVB Financial Corp. 70,200 1,509,300 Downey Financial Corp. 63,400 2,797,842 East West Bancorp, Inc. 128,300 3,000,937 First Midwest Bancorp, Inc. 88,600 2,992,908 Mississippi Valley Bancshares, Inc. 65,800 2,500,400 New York Community Bancorp, Inc. 128,250 2,976,682 Port Financial Corp. 60,200 1,437,576 Republic Bancorp, Inc. 185,400 2,653,074 Wilmington Trust Corp. 30,100 1,661,520 -------------- 28,329,738 -------------- BROADCASTING--1.8% A. H. Belo Corp. Series A 112,000 1,796,480 Crown Media Holdings, Inc. Class A* 143,900 1,474,975 Westwood One, Inc.* 126,200 2,807,950 -------------- 6,079,405 -------------- BUILDING & CONSTRUCTION--0.5% Insituform Technologies, Inc. Class A* 104,600 1,783,430 -------------- BUSINESS SERVICES--1.7% Global Payments, Inc. 96,600 2,840,040 MAXIMUS, Inc.* 38,900 1,545,497 NCO Group, Inc.* 91,900 1,257,192 -------------- 5,642,729 -------------- CHEMICALS--SPECIALTY--4.5% Cambrex Corp. 35,600 1,193,668 Cuno, Inc.* 33,800 937,950 Cytec Industries, Inc.* 44,800 1,037,120 Ferro Corp. 137,600 3,189,568 Olin Corp. 113,200 1,664,040 Omnova Solutions, Inc. 325,100 2,031,875 Spartech Corp. 106,000 2,192,080
[Graphic] Loomis Sayles Equity Funds 51 Loomis Sayles Small Cap Value Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ------------------------------------------------------------------------------ COMMON STOCKS - continued CHEMICALS--SPECIALTY--CONTINUED The Valspar Corp. 73,600 $ 2,461,184 -------------- 14,707,485 -------------- COMMERCIAL SERVICES--4.9% ADVO, Inc.* 131,300 4,464,200 Arbitron, Inc.* 34,900 912,984 Harte-Hanks, Inc. 81,000 1,752,840 Hughes Supply, Inc. 69,600 1,552,080 Pegasus Solutions, Inc.* 155,500 1,303,090 R.H. Donnelley Corp.* 165,300 4,317,636 Viad Corp. 89,400 1,714,692 -------------- 16,017,522 -------------- COMMUNICATIONS EQUIPMENT--0.3% Advanced Fibre Communications, Inc.* 76,200 1,113,282 -------------- COMPUTER HARDWARE--0.9% Maxtor Corp.* 380,000 1,356,600 National Instruments Corp.* 61,800 1,617,306 -------------- 2,973,906 -------------- COMPUTER SERVICES--1.2% Manhattan Associates, Inc.* 27,400 464,704 ProQuest Co.* 30,900 1,016,610 SunGard Data Systems, Inc.* 102,600 2,397,762 -------------- 3,879,076 -------------- COMPUTER SOFTWARE--1.4% Actuate Corp.* 281,900 1,181,161 Ascential Software Corp.* 413,500 1,364,550 Progress Software Corp.* 99,300 1,389,207 Transaction Systems Architects, Inc. Class A* 122,600 769,928 -------------- 4,704,846 -------------- CONSUMER PRODUCTS--1.1% Fossil, Inc.* 99,000 1,555,290 Scotts Co.* 64,000 2,182,400 -------------- 3,737,690 -------------- ELECTRICAL EQUIPMENT--0.8% AMETEK, Inc. 101,500 2,667,420 -------------- ELECTRONIC COMPONENTS--3.1% Brooks Automation, Inc.* 55,000 1,462,450 DSP Group, Inc.* 124,000 2,473,800 Eletronics For Imaging, Inc.* 157,600 2,565,728 Photronics, Inc.* 75,100 1,385,595 Technitrol, Inc. 107,400 2,395,020 -------------- 10,282,593 --------------
Loomis Sayles Small Cap Value Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ---------------------------------------------------------------------------- COMMON STOCKS - continued ELECTRONIC COMPONENTS--SEMICONDUCTORS--1.1% Microsemi Corp.* 89,000 $ 2,318,450 TriQuint Semiconductor, Inc.* 88,500 1,415,115 -------------- 3,733,565 -------------- ENVIRONMENTAL SERVICES--0.7% American States Water Co. 64,500 2,386,500 -------------- FINANCIAL SERVICES--5.1% Affiliated Managers Group, Inc.* 39,000 2,215,590 Allied Capital Corp. 96,400 2,193,100 American Capital Strategies Ltd. 105,300 2,884,167 Boston Private Financial Holdings, Inc. 62,000 1,209,620 DVI, Inc.* 54,000 917,460 Federated Investors, Inc. Class B 114,700 3,395,120 Investment Technology Group, Inc.* 25,700 1,426,093 Jefferies Group, Inc. 30,300 999,900 Metris Cos., Inc. 67,500 1,670,625 -------------- 16,911,675 -------------- FOOD--PACKAGED & MISCELLANEOUS--2.0% Corn Products International, Inc. 89,500 2,571,335 Hormel Foods Corp. 122,900 2,902,898 Ralcorp Holdings, Inc.* 55,300 1,076,138 -------------- 6,550,371 -------------- FOREST & PAPER PRODUCTS--0.8% Boise Cascade Corp. 84,900 2,504,550 -------------- FREIGHT TRANSPORTATION--1.9% GATX Corp. 75,800 2,549,912 USFreightways Corp. 62,100 1,946,214 Yellow Corp.* 79,700 1,621,098 -------------- 6,117,224 -------------- HEALTHCARE--BIOTECHNOLOGY--0.8% Tularik, Inc.* 133,700 2,462,754 -------------- HEALTHCARE--DRUGS--1.9% Alpharma, Inc. Class A 103,300 2,975,040 Medicis Pharmaceutical Corp. Class A* 66,400 3,318,672 -------------- 6,293,712 -------------- HEALTHCARE--MEDICAL TECHNOLOGY--5.0% Beckman Coulter, Inc. 105,400 4,663,950 IDEXX Laboratories, Inc.* 104,100 2,432,817 Steris Corp.* 99,900 1,964,034 Varian Medical Systems, Inc.* 55,500 3,560,325 Ventana Medical Systems, Inc.* 53,300 1,089,452 Wilson Greatbatch Technologies, Inc.* 92,900 2,721,970 -------------- 16,432,548 --------------
[Graphic] Loomis Sayles Equity Funds 53 Loomis Sayles Small Cap Value Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ---------------------------------------------------------------- COMMON STOCKS - continued HEALTHCARE--PRODUCTS--3.1% Henry Schein, Inc.* 48,100 $ 1,856,660 Natus Medical, Inc.* 108,900 833,085 Sybron Dental Specialties, Inc.* 154,700 2,877,420 The Cooper Cos., Inc. 48,600 2,279,340 Vascular Solutions, Inc.* 81,100 143,547 Wright Medical Group, Inc.* 128,200 2,171,708 -------------- 10,161,760 -------------- HEALTHCARE--SERVICES--2.3% Hooper Holmes, Inc. 248,400 1,550,016 Manor Care, Inc.* 106,600 2,995,460 Omnicare, Inc. 134,300 2,931,769 -------------- 7,477,245 -------------- HOME BUILDERS--0.8% D.R. Horton, Inc. 121,730 2,539,288 -------------- HOME PRODUCTS--2.0% Furniture Brands International, Inc.* 142,000 2,766,160 Mohawk Industries, Inc.* 107,000 3,932,250 -------------- 6,698,410 -------------- INSURANCE--4.0% American Financial Group, Inc. 85,900 1,906,980 AmerUs Group Co. 92,700 3,263,040 Annuity and Life Re (Holdings) Ltd. 59,800 2,030,210 Arthur J. Gallagher & Co. 84,100 2,846,785 Protective Life Corp. 59,400 1,722,600 The First American Financial Corp. 72,900 1,476,225 -------------- 13,245,840 -------------- LODGING & HOTEL--0.0% MeriStar Hospitality Corp. 14,500 152,975 -------------- MACHINERY--0.7% Flowserve Corp.* 42,500 839,375 Joy Global, Inc.* 87,500 1,299,375 -------------- 2,138,750 -------------- MANUFACTURING--3.7% AptarGroup, Inc. 82,700 2,629,860 Crane Co. 90,200 1,977,184 Harman International Industries, Inc. 49,700 1,664,950 Mueller Industries, Inc.* 92,300 2,649,010 National Service Industries, Inc. 97,900 2,021,635 SPX Corp.* 15,200 1,260,080 -------------- 12,202,719 -------------- MEDIA & ENTERTAINMENT--0.3% The E.W. Scripps Co. Class A 16,700 1,017,197 --------------
Loomis Sayles Small Cap Value Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + -------------------------------------------------------------- COMMON STOCKS - continued METALS--0.5% Reliance Steel & Aluminum Co. 72,400 $ 1,720,224 -------------- METALS & MINING--0.8% Quanex Corp. 62,800 1,450,680 Worthington Industries, Inc. 98,000 1,102,500 -------------- 2,553,180 -------------- NETWORKING PRODUCTS--0.5% Black Box Corp.* 39,400 1,657,952 -------------- OFFICE EQUIPMENT--0.5% School Specialty, Inc.* 50,300 1,537,168 -------------- OIL & GAS DRILLING EQUIPMENT--1.0% Atwood Oceanics, Inc.* 57,700 1,500,200 Hydril Co.* 88,200 1,228,626 Veritas DGC, Inc.* 55,800 622,170 -------------- 3,350,996 -------------- OIL & GAS EXPLORATION--1.0% Penn Virginia Corp. 58,000 1,632,700 Remington Oil & Gas Corp.* 117,300 1,535,457 -------------- 3,168,157 -------------- PUBLISHING--0.8% John Wiley & Son, Inc. Class A 121,750 2,542,140 -------------- REAL ESTATE INVESTMENT TRUSTS--4.5% Bedford Property Investors, Inc. 68,300 1,382,392 CarrAmerica Realty Corp. 73,600 2,205,056 Corporate Office Properties Trust 118,800 1,294,920 Glimcher Realty Trust 81,800 1,323,524 Liberty Property Trust 107,300 3,078,437 Prentiss Properties Trust 88,500 2,433,750 Reckson Associates Realty Corp. 131,300 3,170,895 -------------- 14,888,974 -------------- RESTAURANTS--1.8% AFC Enterprises, Inc.* 106,300 2,168,520 CEC Entertainment, Inc.* 57,200 1,950,520 Darden Restaurants, Inc. 46,300 1,215,375 IHOP Corp.* 18,000 471,600 -------------- 5,806,015 -------------- RETAIL--FOOD & DRUG--0.6% Ruddick Corp. 76,400 1,168,920 Sonic Corp.* 30,550 926,276 -------------- 2,095,196 -------------- RETAIL--GENERAL--0.6% Michaels Stores, Inc.* 57,000 2,082,780 --------------
[Graphic] Loomis Sayles Equity Funds 55 Loomis Sayles Small Cap Value Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ------------------------------------------------------------------------------ COMMON STOCKS - continued RETAIL--SPECIALTY--4.9% Casey's General Stores, Inc. 174,000 $ 2,068,860 Cole National Corp.* 117,200 1,555,244 Linens 'n Things, Inc.* 49,200 914,136 Pacific Sunwear of California, Inc.* 102,600 1,410,750 Pier 1 Imports, Inc. 292,600 2,428,580 Ross Stores, Inc. 92,300 2,699,775 The Wet Seal, Inc.* 101,100 1,861,251 Too, Inc.* 40,900 858,491 Zale Corp.* 82,400 2,181,952 -------------- 15,979,039 -------------- TELECOMMUNICATIONS--1.0% ADTRAN, Inc.* 71,900 1,373,290 Commonwealth Telephone Enterprises, Inc.* 54,100 1,988,175 -------------- 3,361,465 -------------- TEXTILE & APPAREL--1.0% Liz Claiborne, Inc. 54,200 2,043,340 Russell Corp. 101,200 1,389,476 -------------- 3,432,816 -------------- UTILITIES--5.3% AGL Resources, Inc. 65,400 1,306,038 Alliant Energy Corp. 93,000 2,910,900 Energy East Corp. 155,700 3,131,127 MDU Resources Group, Inc. 96,800 2,262,216 New Jersey Resources Corp. 54,300 2,400,603 NSTAR 36,700 1,537,730 Vectren Corp. 172,700 3,866,753 -------------- 17,415,367 -------------- TOTAL COMMON STOCKS (Identified Cost $300,576,755) 309,438,147 -------------- Face Amount ------------------------------------------------------------------------------ SHORT-TERM INVESTMENT - 6.5% OF NET ASSETS Commercial Paper--6.5% Prudential Funding Corp., 2.850%, 10/01/01 $21,332,000 21,332,000 -------------- TOTAL SHORT-TERM INVESTMENT (Identified Cost $21,332,000) 21,332,000 -------------- TOTAL INVESTMENTS--100.4% (IDENTIFIED COST $321,908,755)@ 330,770,147 Liabilities, Less Cash and Other Assets--(0.4%) (1,316,127) -------------- NET ASSETS--100% $ 329,454,020 ==============
Loomis Sayles Small Cap Value Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001 + See Note 1. * Non-income producing security @ At September 30, 2001, the net unrealized appreciation on investments based on cost of $322,709,378 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value were $36,646,636 and $28,585,867, respectively, resulting in net unrealized appreciation of $8,060,769. See accompanying notes to financial statements. [Graphic] Loomis Sayles Equity Funds 57 Loomis Sayles Value Fund PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - ----------------------------------------------------------------- COMMON STOCKS - 94.7% of net assets AEROSPACE/DEFENSE--2.7% General Dynamics Corp. 11,900 $ 1,051,008 ------------- AUTO & RELATED--0.9% Lear Corp.* 13,900 375,578 ------------- BANKS/SAVINGS & LOANS--1.8% Washington Mutual, Inc. 18,900 727,272 ------------- BROADCASTING--0.7% Comcast Corp. Class A* 8,100 290,547 ------------- CHEMICALS--MAJOR--2.4% Dow Chemical Co. 12,800 419,328 Praxair, Inc. 12,300 516,600 ------------- 935,928 ------------- COMMUNICATIONS EQUIPMENT--2.1% ADC Telecommunications, Inc.* 63,500 221,615 Motorola, Inc. 39,500 616,200 ------------- 837,815 ------------- COMPUTER HARDWARE--1.5% Apple Computer, Inc.* 25,900 401,709 Compaq Computer Corp. 22,900 190,299 ------------- 592,008 ------------- COMPUTER SERVICES--0.8% SunGard Data Systems, Inc.* 14,100 329,517 ------------- COMPUTER SOFTWARE--1.8% Cadence Design Systems, Inc.* 18,000 299,700 Symantec Corp.* 11,700 405,639 ------------- 705,339 ------------- DATA PROCESSING SERVICES--2.0% First Data Corp. 13,500 786,510 ------------- DIVERSIFIED OPERATIONS--2.4% Honeywell International, Inc. 14,300 377,520 Tyco International Ltd. 12,500 568,750 ------------- 946,270 ------------- ELECTRONIC MEASURING INSTRUMENTS--0.9% Agilent Technologies, Inc.* 17,500 342,125 ------------- ENTERTAINMENT--2.2% Carnival Corp. 15,000 330,300 Walt Disney Co. 30,100 560,462 ------------- 890,762 ------------- FINANCIAL SERVICES--15.9% Bank of America Corp. 17,300 1,010,320 Citigroup, Inc. 43,233 1,750,936
Loomis Sayles Value Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ---------------------------------------------------------------- COMMON STOCKS - continued FINANCIAL SERVICES--CONTINUED FleetBoston Financial Corp. 17,300 $ 635,775 Household International, Inc. 7,100 400,298 J.P. Morgan Chase & Co. 15,786 539,092 Merrill Lynch & Co., Inc. 6,100 247,660 U.S. Bancorp 34,800 771,864 Wells Fargo & Co. 20,700 920,115 ------------- 6,276,060 ------------- FOOD & BEVERAGE--1.2% Anheuser-Busch Cos., Inc. 11,000 460,680 ------------- FOREST & PAPER PRODUCTS--2.4% Bowater, Inc. 9,200 404,984 International Paper Co. 16,000 556,800 ------------- 961,784 ------------- GOVERNMENT AGENCIES--1.8% Federal National Mortgage Association 8,900 712,534 ------------- HEALTHCARE--DRUGS--3.1% Johnson & Johnson 12,000 664,800 Merck & Co., Inc. 8,500 566,100 ------------- 1,230,900 ------------- HEALTHCARE--SERVICES--1.1% Tenet Healthcare Corp.* 7,600 453,340 ------------- HOUSING & BUILDING MATERIALS--0.9% Leggett & Platt, Inc. 18,700 364,650 ------------- INSURANCE--6.8% Ace Ltd. 11,500 332,005 Allmerica Financial Corp. 6,400 287,040 Allstate Corp. 11,300 422,055 American International Group, Inc. 5,300 413,400 Lincoln National Corp. 15,500 722,765 XL Capital Ltd. Class A 6,500 513,500 ------------- 2,690,765 ------------- MACHINERY--0.7% Caterpillar, Inc. 6,200 277,760 ------------- MEDIA & ENTERTAINMENT--1.1% McGraw-Hill Cos., Inc. 7,200 419,040 ------------- NATURAL GAS--1.4% El Paso Corp. 13,140 545,967 ------------- OIL & GAS DRILLING EQUIPMENT--1.7% BJ Services Co.* 17,200 305,988 Santa Fe International Corp. 16,900 359,125 ------------- 665,113 -------------
[Graphic] Loomis Sayles Equity Funds 59 Loomis Sayles Value Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ------------------------------------------------------------------- COMMON STOCKS - continued OIL & GAS--MAJOR INTEGRATED--8.3% BP Amoco Plc ADR 17,300 $ 850,641 Exxon Mobil Corp. 39,000 1,536,600 Texaco, Inc. 14,000 910,000 ------------- 3,297,241 ------------- PUBLISHING--2.1% Gannett Co., Inc. 6,400 384,704 Knight-Ridder, Inc. 8,100 452,385 ------------- 837,089 ------------- RESTAURANTS--1.8% McDonald's Corp. 26,200 711,068 ------------- RETAIL--FOOD & DRUG--0.8% Kroger Co.* 12,500 308,000 ------------- RETAIL--GENERAL--1.4% Federated Department Stores, Inc.* 19,700 555,540 ------------- SECURITIES--1.1% Morgan Stanley Dean Witter & Co. 9,000 417,150 ------------- TELECOMMUNICATIONS--8.1% AT&T Corp. 28,000 540,400 BellSouth Corp. 15,800 656,490 Qwest Communications International, Inc. 26,200 437,540 Sprint Corp. 33,500 804,335 Verizon Communications, Inc. 13,900 752,129 ------------- 3,190,894 ------------- TEXTILE & APPAREL--2.6% Jones Apparel Group, Inc.* 19,700 502,153 NIKE, Inc. Class B 11,600 542,996 ------------- 1,045,149 ------------- TOBACCO--1.7% Philip Morris Cos., Inc. 13,900 671,231 ------------- UTILITIES--1.8% Entergy Corp. 19,700 700,532 ------------- UTILITIES--ELECTRIC--2.1% FirstEnergy Corp. 23,100 830,445 ------------- WASTE MANAGEMENT--2.6% Waste Management, Inc. 39,200 1,048,209 ------------- TOTAL COMMON STOCKS (Identified Cost $39,030,033) 37,481,820 -------------
Loomis Sayles Value Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Face Amount Value + -------------------------------------------------------------------------- SHORT-TERM INVESTMENT - 2.5% of net assets COMMERCIAL PAPER--2.5% Citicorp, 3.300%, 10/01/01 $979,000 $ 979,000 ----------- TOTAL SHORT-TERM INVESTMENT (Identified Cost $979,000) 979,000 ----------- TOTAL INVESTMENTS--97.2% (IDENTIFIED COST $40,009,033)@ 38,460,820 Cash and Other Assets, Less Liabilities--2.8% 1,088,030 ----------- NET ASSETS--100% $39,548,850 ===========
+ See Note 1. * Non-income producing security @ At September 30, 2001, the net unrealized depreciation on investments based on cost of $40,072,373 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value were $2,457,723 and $4,069,276, respectively, resulting in net unrealized depreciation of $1,611,553. Key to Abbreviations: ADR: American Depositary Receipt See accompanying notes to financial statements.- [Graphic] Loomis Sayles Equity Funds 61 Loomis Sayles Worldwide Fund PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Face Amount Value + - ----------------------------------------------------------------------------------------- BONDS AND NOTES - 47.1% of net assets NON-CONVERTIBLE BONDS--39.3% AUSTRALIA--1.2% Queensland Treasury, 8.000%, 9/14/07 AUD 100,000 $ 55,948 South Australia Government Finance Authority, Zero Coupon Bond, 12/21/15 220,000 44,970 ------------ 100,918 ------------ BRAZIL--1.6% Republic of Brazil, 11.000%, 8/17/40 USD 215,000 140,019 ------------ CANADA--0.3% Rogers Cablesystems Ltd., 9.650%, 1/15/14 CAD 40,000 25,865 ------------ CHILE--0.6% Empresa Nacional de Electricidad SA, Series B, 8.500%, 4/01/09 USD 50,000 51,120 ------------ ECUADOR--0.6% Republic of Ecuador, 12.000%, 11/15/12 144A 75,000 49,125 ------------ GERMANY--3.1% Bayerische Vereinsbank, 6.000%, 1/23/06 EUR 110,000 106,618 Eurohypo AG--Europaeische Hypothekenbank der Deutschen Bank, 4.000%, 2/01/07 180,000 159,839 ------------ 266,457 ------------ KOREA--0.6% Cho Hung Bank Co. Ltd., 11.500%, 4/01/10 144A USD 25,000 25,625 Hanvit Bank, 12.750%, 3/01/10 144A 25,000 26,188 ------------ 51,813 ------------ MEXICO--2.4% Petroleos Mexicanos, 8.625%, 12/01/23 144A 115,000 103,500 United Mexican States, 8.300%, 8/15/31 110,000 97,900 ------------ 201,400 ------------ NETHERLANDS--1.0% Koninklijke (Royal) KPN NV, 4.750%, 11/05/08 EUR 70,000 43,582 PTC International Finance BV, 0.000%, 7/01/07 (step to 10.750% on 7/01/02)# USD 60,000 45,000 ------------ 88,582 ------------ PANAMA--1.0% Republic of Panama, 4.750%, 7/17/14 96,296 84,459 ------------ PERU--0.7% Republic of Peru, 4.000%, 3/07/17 (step to 4.500% on 3/07/03)# 90,000 57,717 ------------ PHILIPPINES--1.0% Republic of Philippines, 10.625%, 3/16/25 105,000 85,050 ------------ SOUTH AFRICA--1.2% Republic of South Africa, 13.500%, 9/15/15 ZAR 800,000 106,288 ------------
Loomis Sayles Worldwide Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Face Amount Value + - -------------------------------------------------------------------------------------------- BONDS AND NOTES - continued SUPRANATIONAL--0.3% European Investment Bank, 9.250%, 7/05/02 HUF 7,350,000 $ 25,761 ------------ SWEDEN--0.3% Government of Sweden, 5.250%, 3/15/11 SEK 245,000 22,767 ------------ UNITED STATES--23.4% Borden, Inc., 7.875%, 2/15/23 USD 150,000 100,575 Boston Celtics Ltd., 6.000%, 6/30/38 90,000 50,963 Chesapeake Energy Corp., Series B, 7.875%, 3/15/04 100,000 95,750 Columbia/HCA Healthcare Corp., 7.050%, 12/01/27 50,000 44,000 Columbia/HCA Healthcare Corp., 7.190%, 11/15/15 50,000 46,250 Dana Corp., 9.000%, 8/15/11 144A EUR 100,000 81,801 Dillon Read Structured Finance Corp., Series A, 6.660%, 8/15/10 USD 134,792 105,138 Federal Home Loan Mortgage Corp., 5.000%, 1/15/12 EUR 200,000 180,680 Fort James Corp., 4.750%, 6/29/04 USD 50,000 43,925 Hyperion Telecommunications, Inc., Series B, 13.000%, 4/15/03 150,000 67,500 International Paper Co., 6.875%, 11/01/23 125,000 115,307 J.C. Penney Co., Inc., 7.125%, 11/15/23 75,000 56,313 Lear Corp., 8.125%, 4/01/08 144A EUR 50,000 42,355 Level 3 Communications, Inc., 0.000%, 3/15/10 (step to 12.875% on 03/15/05)# USD 125,000 25,000 Nextlink Communications Inc., 0.000%, 12/01/09 (step to 12.125% on 12/01/04)# 200,000 15,000 NTL Communications Corp., Series B, 0.000%, 4/15/09 (step to 9.750% on 4/15/04)# GBP 75,000 28,666 NTL Communications Corp., Series B, 0.000%, 11/15/09 (step to 11.500% on 11/15/04)# USD 300,000 68,167 Philip Morris Cos., Inc., 7.750%, 1/15/27 125,000 129,156 Pioneer Natural Resources Co., 7.200%, 1/15/28 175,000 140,437 R & B Falcon Corp., Series B, 7.375%, 4/15/18 75,000 73,657 Raytheon Co., 6.400%, 12/15/18 150,000 134,245 RCN Corp., 0.000%, 10/15/07 (step to 11.125% on 10/15/02)# 325,000 74,750 Sprint Capital Corp., 6.875%, 11/15/28 25,000 22,418 Teligent, Inc., 0.000%, 3/01/08 (step to 11.500% on 3/01/03)#^ 150,000 375 TRW, Inc., 6.650%, 1/15/28 100,000 82,312 US West Capital Funding, Inc., 6.875%, 7/15/28 50,000 42,816 Woolworth Corp., 8.500%, 1/15/22 150,000 126,128 ------------ 1,993,684 ------------ TOTAL NON-CONVERTIBLE BONDS (Identified Cost $3,981,562) 3,351,025 ------------
[Graphic] Loomis Sayles Equity Funds 63 Loomis Sayles Worldwide Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Face Amount Value + ----------------------------------------------------------------------------- BONDS AND NOTES - continued CONVERTIBLE BONDS--7.8% CAYMAN ISLAND--1.4% FLI Capital Cayman, 6.250%, 2/01/02 USD 100,000 $ 115,750 ------------ HONG KONG--1.4% Bangkok Bank Public Co. Ltd., 4.589%, 3/03/04 220,000 119,350 ------------ SOUTH KOREA--1.0% Ssangyong Oil Refining Co., Inc., 3.000%, 12/31/04 100,000 87,000 ------------ UNITED KINGDOM--0.2% Colt Telecom Group Plc, 2.000%, 12/16/06 EUR 40,000 14,179 ------------ UNITED STATES--3.8% Analog Devices, Inc., 4.750%, 10/01/05 USD 50,000 45,937 Builders Transportation, Inc., 8.000%, 8/15/05^ 95,000 119 CML Group, Inc., 5.500%, 1/15/03^ 150,000 94 Exide Corp., 2.900%, 12/15/05 144A 50,000 16,750 Loews Corp., 3.125%, 9/15/07 150,000 127,740 Thermedics, Inc., Zero Coupon Bond, 6/01/03 100,000 88,000 Thermo Electron Corp., 4.250%, 1/01/03 144A 50,000 48,950 ------------ 327,590 ------------ TOTAL CONVERTIBLE BONDS (Identified Cost $903,030) 663,869 ------------ TOTAL BONDS AND NOTES (Identified Cost $4,884,592) 4,014,894 ------------ Shares ----------------------------------------------------------------------------- COMMON STOCKS--40.6% of net assets AUSTRALIA--3.0% Austereo Group Ltd. 44,400 43,792 Boral Ltd. 27,700 40,161 Coal & Allied Industries Ltd. 3,200 36,296 Coca-Cola Amatil Ltd. 12,100 32,580 CSL Ltd. 1,300 28,817 Origin Energy Ltd. 20,900 31,230 The International Wine Investment 29,900 40,549 ------------ 253,425 ------------ CANADA--2.5% Biovail Corp.* 1,500 69,600 Canadian Hunter Exploration Ltd.* 2,000 46,025 Cott Corp.* 2,700 40,481 Finning International, Inc. 3,600 41,765 Norske Skog Canada Ltd. 5,500 20,328 ------------ 218,199 ------------
Loomis Sayles Worldwide Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ----------------------------------------------------------------- COMMON STOCKS - continued DENMARK--0.6% Novo Nordisk A/S Series B 1,300 $ 53,858 ------------ FRANCE--0.7% Vivendi Universal SA 1,300 60,083 ------------ GERMANY--0.5% Allianz AG 200 45,081 ------------ HONG KONG--1.4% Denway Motors Ltd. 104,000 27,669 Huaneng Power International, Inc. 92,000 51,901 Yanzhou Coal Mining Co. Ltd. 122,000 36,759 ------------ 116,329 ------------ INDIA--0.3% Wipro Ltd. ADR 1,100 23,320 ------------ IRELAND--1.9% Anglo Irish Bank Corp. Plc 18,096 53,618 Elan Corp. Plc ADR* 1,400 67,830 Ryanair Holdings Plc* 5,200 42,395 ------------ 163,843 ------------ ISRAEL--0.3% Mercury Interactive Corp.* 500 9,520 Taro Pharmaceutical Industries Ltd.* 600 21,096 ------------ 30,616 ------------ JAPAN--5.5% Eneserve Corp. 1,500 48,000 Hokuto Corp. 960 39,405 Kappa Create Co. Ltd. 900 47,497 Keihin Electric Express Railway Co. Ltd. 10,000 39,791 Sotoh Co. Ltd. 13,000 50,639 Sumitomo Realty & Development Co. Ltd. 6,000 41,818 Tokyo Style Co. Ltd. 4,000 38,165 Tokyu Corp. 8,000 36,323 Toppan Forms Co. Ltd. 2,200 45,244 United Arrows Ltd. 1,200 36,691 Yoshinoya D&C Co. Ltd. 28 42,220 ------------ 465,793 ------------ NETHERLANDS--1.1% ING Groep NV 1,800 48,148 Koninklijke (Ahold) NV 1,800 49,899 ------------ 98,047 ------------ PORTUGAL--0.5% Portugal Telecom SGPS SA 5,800 42,068 ------------ SINGAPORE--0.5% Parkway Holdings Ltd. 73,000 40,108 ------------ SWITZERLAND--0.8% Synthes-Stratec, Inc. 100 65,359 ------------
[Graphic] Loomis Sayles Equity Funds 65 Loomis Sayles Worldwide Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + ------------------------------------------------------------- COMMON STOCKS - continued UNITED KINGDOM--2.8% British Telecommunications Plc 4,500 $ 22,492 Compass Group Plc 7,300 50,920 Shire Pharmaceutical Group Plc* 3,700 50,040 Tesco Plc 15,200 57,203 Vodafone Group Plc 24,800 54,686 ------------ 235,341 ------------ UNITED STATES--18.2% Ace Ltd. 1,400 40,418 AFLAC, Inc. 1,900 51,300 AstroPower, Inc.* 550 18,981 AT&T Corp. 2,400 46,320 Baxter International, Inc. 1,250 68,812 BellSouth Corp. 1,500 62,325 BorgWarner, Inc. 800 32,240 Bristol Myers Squibb Co. 750 41,670 Burlington Northern Santa Fe Corp. 1,900 50,825 Dell Computer Corp.* 2,200 40,766 Devon Energy Corp. 1,000 34,400 Dominion Resources, Inc. 750 44,512 Duke Realty Corp. 1,350 31,982 Equity Residential Properties Trust 700 40,880 Exelon Corp. 750 33,450 Forest Laboratories, Inc.* 500 36,070 General Dynamics Corp. 550 48,576 Homestake Mining Co. 4,200 39,060 Intel Corp. 2,050 41,902 International Business Machines Corp. 800 73,840 International Paper Co. 1,100 38,280 Johnson & Johnson 900 49,860 Kerr-McGee Corp. 700 36,337 Lucent Technologies, Inc. 8,500 48,705 Maxim Integrated Products, Inc.* 1,150 40,181 McDonald's Corp. 1,600 43,424 Minnesota Mining & Manufacturing Co. 450 44,280 Newmont Mining Corp. 3,100 73,160 PepsiCo, Inc. 1,400 67,900 Stryker Corp. 650 34,385 SYSCO Corp. 1,750 44,695 The Gillette Co. 1,600 47,680 TXU Corp. 1,250 57,900 Whole Foods Market, Inc.* 1,400 43,974 ------------ 1,549,090 ------------ TOTAL COMMON STOCKS (Identified Cost $3,736,779) 3,460,560 ------------
Loomis Sayles Worldwide Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001
Shares Value + - -------------------------------------------------------------------------------------------------- PREFERRED STOCKS - 1.5% of net assets NON-CONVERTIBLE PREFERRED STOCKS--0.5% UNITED STATES--0.5% Highwoods Properties, Inc., Series B, 8.000% 750 $ 16,762 ProLogis Trust, Series D, 7.920% 1,000 22,650 ------------ 39,412 ------------ TOTAL NON-CONVERTIBLE PREFERRED STOCKS (Identified Cost $32,244) 39,412 ------------ CONVERTIBLE PREFERRED STOCKS--1.0% UNITED STATES--1.0% Dynegy, Inc., 4.700% 100 3,500 Entergy Arkansas Capital I, 8.500% 250 6,250 Equity Residential Properties Trust, 7.250% 500 12,715 Owens Corning, 6.500%^ 3,250 4,469 Philippine Long Distance Telephone Co., $3.50 GDS 2,500 61,000 ------------ 87,934 ------------ TOTAL CONVERTIBLE PREFERRED STOCKS (Identified Cost $219,370) 87,934 ------------ TOTAL PREFERRED STOCKS (Identified Cost $251,614) 127,346 ------------ Face Amount - -------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENT - 10.7% of net assets Repurchase Agreement with State Street Corp., dated 9/28/01 at 2.000% to be repurchased at $917,153 on 10/01/01 collateralized by $605,000 U.S Treasury Bond, 10.625% due 08/15/15 with a value of $940,142 USD 917,000 917,000 ------------ TOTAL SHORT-TERM INVESTMENT (Identified Cost $917,000) 917,000 ------------ TOTAL INVESTMENTS--99.9% (IDENTIFIED COST $9,789,985)@ 8,519,800 Cash and Other Assets, Less Liabilities--0.1% 8,614 ------------ NET ASSETS--100% $8,528,414 ============
[Graphic] Loomis Sayles Equity Funds 67 Loomis Sayles Worldwide Fund (continued) PORTFOLIO OF INVESTMENTS--AS OF SEPTEMBER 30, 2001 + See Note 1. 144A Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. # Step Bond: Coupon is zero or below market rate for an initial period and then increases at a specified date and rate. /\ Security in default * Non-income producing security. @ At September 30, 2001, the net unrealized depreciation on investments based on cost of $9,791,855 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all securities in which there is an excess of value over tax cost and aggregate gross unrealized depreciation for all securities in which there is an excess of tax cost over value were $348,587 and $1,620,642, respectively, resulting in net unrealized depreciation of $1,272,055. Key to Abbreviations: ADR: American Depositary Receipt AUD: Australian Dollar CAD: Canadian Dollar EUR: Euro GBP: Great British Pound GDS: Global Depositary Security HUF: Hungarian Forint SEK: Swedish Krona USD: United States Dollar ZAR: South African Rand TEN LARGEST SECTOR HOLDINGS AT SEPTEMBER 30, 2001 AS A PERCENTAGE OF NET ASSETS Foreign Government/Agency 8.7% Telecommunications 7.6% Banking & Finance 5.1% Healthcare--Drugs 4.1% Oil & Gas 4.0% Financial Services 3.6% Retail--General 3.4% Auto & Related 3.3% Insurance 3.1% Forest & Paper Products 2.6%
See accompanying notes to financial statements. [This Page Intentionally Left Blank] [Graphic] Loomis Sayles Equity Funds 69 Statements of Assets and Liabilities SEPTEMBER 30, 2001
EMERGING GLOBAL AGGRESSIVE MARKETS TECHNOLOGY GROWTH GROWTH FUND FUND FUND FUND - --------------------------------------------------------------------------------------------- Assets Investments at value $ 59,207,014 $1,850,603 $ 1,846,149 $ 21,869,704 Repurchase agreement at value 858,000 0 135,000 888,000 Cash 870 0 15,524 253 Foreign currency at value 0 5,332 88,900 0 Receivable for: Fund shares sold 183,035 0 50 0 Securities sold 495,397 44,532 35,988 711,577 Dividends, interest and other 5,132 12,990 729 8,357 Due from the adviser 27,766 11,828 18,410 14,033 ------------ ---------- ----------- ------------ 60,777,214 1,925,285 2,140,750 23,491,924 ------------ ---------- ----------- ------------ Liabilities Payable for: Securities purchased 318,887 4,394 78,150 1,222,735 Fund shares redeemed 118,362 0 0 19,414 Foreign taxes 0 630 31 0 Due to Custodian 0 33,875 0 0 Accrued expenses: Management fees 41,439 2,198 1,825 9,364 Trustees' fees 1,500 1,500 1,500 1,500 Administrative fees 10,626 865 1,382 2,865 12b-1 fees 10,606 9 110 112 Other 66,662 48,199 79,222 57,775 ------------ ---------- ----------- ------------ 568,082 91,670 162,220 1,313,765 ------------ ---------- ----------- ------------ Net Assets $ 60,209,132 $1,833,615 $ 1,978,530 $ 22,178,159 ============ ========== =========== ============ Net Assets consist of: Capital paid in $170,600,637 $3,539,130 $11,124,016 $ 39,167,287 Undistributed net investment income 0 0 (75) 0 Accumulated net realized gain (loss) (92,426,774) (951,027) (8,135,178) (15,379,060) Unrealized appreciation (depreciation) on: Investments (17,964,731) (754,475) (1,010,620) (1,610,068) Foreign currency translations 0 (13) 387 0 ------------ ---------- ----------- ------------ Net Assets $ 60,209,132 $1,833,615 $ 1,978,530 $ 22,178,159 ============ ========== =========== ============ Institutional Class: Net assets $ 16,346,914 $1,793,949 $ 1,506,893 $ 21,652,737 Shares of beneficial interest outstanding, no par value 1,205,521 226,336 485,382 5,119,572 Net asset value and redemption price $ 13.56 $ 7.93 $ 3.10 $ 4.23 Retail Class: Net assets $ 41,456,406 $ 39,666 $ 471,637 $ 517,875 Shares of beneficial interest outstanding, no par value 3,092,244 5,040 153,703 125,687 Net asset value and redemption price $ 13.41 $ 7.87 $ 3.07 $ 4.12 Admin Class: Net assets $ 2,405,812 -- -- $ 7,547 Shares of beneficial interest outstanding, no par value 179,783 -- -- 1,837 Net asset value and redemption price $ 13.38 -- -- $ 4.11 Identified cost of investments $ 78,029,745 $2,604,567 $ 2,991,769 $ 24,367,772 Cost of foreign currency 0 $ 5,345 $ 89,400 0
See accompanying notes to financial statements.
INTERNATIONAL RESEARCH SMALL CAP SMALL CAP VALUE WORLDWIDE EQUITY FUND FUND GROWTH FUND VALUE FUND FUND FUND - --------------------------------------------------------------------------------- $ 56,667,606 $ 4,136,660 $ 172,372,921 $330,770,147 $38,460,820 $ 7,602,800 291,000 0 5,520,000 0 0 917,000 981 76,119 117,424 2,227 912 767 1,288,390 0 0 0 0 48,146 1,173,508 140,000 2,100,242 612,971 694,634 0 1,191,831 84,031 733,234 3,182,680 882,264 224,104 148,424 5,164 14,375 522,958 44,688 93,479 42,044 6,003 7,874 3,120 4,139 9,178 - ------------ ----------- ------------- ------------ ----------- ----------- 60,803,784 4,447,977 180,866,070 335,094,103 40,087,457 8,895,474 - ------------ ----------- ------------- ------------ ----------- ----------- 758,913 46,761 4,482,182 4,236,757 451,383 315,260 1,972,531 115,269 207,112 1,019,576 21,104 1,836 10,482 0 0 0 0 880 0 0 0 0 0 0 37,502 2,769 118,929 211,596 16,383 5,348 1,500 1,500 1,500 1,500 1,500 1,500 5,615 230 13,027 20,162 2,819 1,021 1,350 0 11,746 27,962 0 0 85,643 36,507 94,440 122,530 45,418 41,215 - ------------ ----------- ------------- ------------ ----------- ----------- 2,873,536 203,036 4,928,936 5,640,083 538,607 367,060 - ------------ ----------- ------------- ------------ ----------- ----------- $ 57,930,248 $ 4,244,941 $ 175,937,134 $329,454,020 $39,548,850 $ 8,528,414 ============ =========== ============= ============ =========== =========== $ 88,616,079 $ 5,808,449 $ 373,674,574 $283,610,324 $40,003,281 $10,457,449 153,646 3,111 0 1,284,871 366,602 639,718 (25,722,528) (1,201,587) (148,536,580) 35,697,433 727,180 (1,298,443) (5,110,375) (365,032) (49,200,860) 8,861,392 (1,548,213) (1,270,185) (6,574) 0 0 0 0 (125) - ------------ ----------- ------------- ------------ ----------- ----------- $ 57,930,248 $ 4,244,941 $ 175,937,134 $329,454,020 $39,548,850 $ 8,528,414 ============ =========== ============= ============ =========== =========== $ 54,079,995 $ 4,244,941 $ 124,478,933 $215,439,123 $39,548,850 $ 8,528,414 5,630,197 619,455 14,091,065 10,833,367 2,844,261 1,005,240 $ 9.61 $ 6.85 $ 8.83 $ 19.89 $ 13.90 $ 8.48 $ 2,793,193 -- $ 50,197,360 $ 97,543,761 -- -- 293,989 -- 5,754,026 4,913,286 -- -- $ 9.50 -- $ 8.72 $ 19.85 -- -- $ 1,057,060 -- $ 1,260,841 $ 16,471,136 -- -- 111,382 -- 144,680 831,732 -- -- $ 9.49 -- $ 8.71 $ 19.80 -- -- $ 62,068,981 $ 4,501,692 $ 227,093,781 $321,908,755 $40,009,033 $ 9,789,985 $ 1,299,041 $ 0 $ 0 $ 0 $ 0 $ 48,639
[Graphic] Loomis Sayles Equity Funds 71 Statements of Operations FOR THE YEAR ENDED SEPTEMBER 30, 2001
EMERGING GLOBAL AGGRESSIVE MARKETS TECHNOLOGY GROWTH GROWTH FUND FUND FUND FUND - ------------------------------------------------------------------------------------------------------- Investment Income Dividends* $ 125,163 $ 41,045 $ 9,240 $ 152,948 Interest 146,150 4,799 15,292 59,612 ------------- ----------- ----------- ------------ Total income 271,313 45,844 24,532 212,560 ------------- ----------- ----------- ------------ Expenses Management fees 841,823 35,582 60,149 156,460 12b-1 fees (Retail Class) 193,147 88 5,049 1,832 12b-1 fees (Admin Class) 3,432 0 0 59 Shareholder service fees (Admin Class) 3,432 0 0 59 Trustees' fees and expenses 7,060 7,136 6,119 7,060 Administrative fees 98,632 7,432 11,139 34,952 Custodian and accounting fees 80,380 73,014 78,920 65,954 Transfer Agent fees (Institutional Class) 29,688 26,746 26,926 29,545 Transfer Agent fees (Retail Class) 54,773 18,537 23,364 19,890 Transfer Agent fees (Admin Class) 17,941 0 0 15,730 Audit and tax services fees 29,619 26,280 23,836 30,088 Registration fees 53,892 23,740 33,405 37,840 Printing fees 50,732 1,293 9,238 11,724 Legal fees 8,888 13,322 8,562 8,543 Other expenses 7,313 5,586 10,016 6,075 ------------- ----------- ----------- ------------ Total expenses 1,480,752 238,756 296,723 425,811 Less expenses waived and reimbursed by the investment adviser (159,741) (174,619) (201,450) (157,879) ------------- ----------- ----------- ------------ Net expenses 1,321,011 64,137 95,273 267,932 ------------- ----------- ----------- ------------ Net investment income (loss) (1,049,698) (18,293) (70,741) (55,372) ------------- ----------- ----------- ------------ Net Realized Gain (Loss) on: Investments (92,417,186) (951,027) (6,618,915) (15,329,994) Foreign currency transactions 0 (12,189) (8,483) 0 ------------- ----------- ----------- ------------ Total net realized gain (loss) (92,417,186) (963,216) (6,627,398) (15,329,994) ------------- ----------- ----------- ------------ Change in Unrealized Appreciation (Depreciation) on: Investments (51,727,302) (721,410) (2,242,195) (7,943,411) Foreign currency translations 0 (13) (1,830) 0 ------------- ----------- ----------- ------------ Total net change in unrealized appreciation (depreciation) (51,727,302) (721,423) (2,244,025) (7,943,411) ------------- ----------- ----------- ------------ Total net realized gain (loss) and change in unrealized appreciation (depreciation) (144,144,488) (1,684,639) (8,871,423) (23,273,405) ------------- ----------- ----------- ------------ Net Increase (Decrease) in Net Assets from Operations $(145,194,186) $(1,702,932) $(8,942,164) $(23,328,777) ============= =========== =========== ============
* Net of foreign withholding taxes of $2,887, $1,431, $132,038, $112, $2,692 and $6,338 for the Emerging Markets, Global Technology, International Equity, Research, Value and Worldwide Funds, respectively. See accompanying notes to financial statements.
INTERNATIONAL RESEARCH SMALL CAP SMALL CAP VALUE WORLDWIDE EQUITY FUND FUND GROWTH FUND VALUE FUND FUND FUND - ---------------------------------------------------------------------------------- $ 1,005,247 $ 46,878 $ 194,605 $ 4,731,023 $ 671,724 $ 83,751 157,748 2,055 461,186 1,163,082 57,312 660,634 - ------------ ----------- ------------- ------------ ----------- ----------- 1,162,995 48,933 655,791 5,894,105 729,036 744,385 - ------------ ----------- ------------- ------------ ----------- ----------- 648,883 29,669 1,988,585 2,552,007 211,736 70,873 13,597 0 176,150 243,388 149 438 2,208 0 1,984 36,571 0 0 2,208 0 1,984 36,571 0 0 7,057 7,344 7,060 7,060 7,057 7,057 73,367 2,576 208,632 252,851 31,696 8,544 256,398 55,432 111,596 124,260 53,369 75,793 33,730 20,018 61,904 93,093 32,001 22,584 23,757 0 33,072 28,155 3,990 3,927 1,354 0 16,255 22,145 0 0 36,665 7,632 31,619 37,178 25,759 26,846 53,111 29,130 77,702 55,270 15,877 15,415 38,199 3,388 103,943 139,337 13,791 2,156 12,206 7,084 9,670 9,787 7,606 7,891 7,121 6,142 9,963 12,198 6,364 5,938 - ------------ ----------- ------------- ------------ ----------- ----------- 1,209,861 168,415 2,840,119 3,649,871 409,395 247,462 (326,673) (122,922) (24,973) (13,496) (49,301) (152,517) - ------------ ----------- ------------- ------------ ----------- ----------- 883,188 45,493 2,815,146 3,636,375 360,094 94,945 - ------------ ----------- ------------- ------------ ----------- ----------- 279,807 3,440 (2,159,355) 2,257,730 368,942 649,440 - ------------ ----------- ------------- ------------ ----------- ----------- (25,478,911) (1,199,270) (147,559,085) 38,470,453 1,478,436 (1,306,982) (125,034) 0 0 0 0 4,643 - ------------ ----------- ------------- ------------ ----------- ----------- (25,603,945) (1,199,270) (147,559,085) 38,470,453 1,478,436 (1,302,339) - ------------ ----------- ------------- ------------ ----------- ----------- (11,096,633) (443,326) (119,076,924) (29,774,777) (4,952,030) (911,753) (1,437) 0 0 0 0 170 - ------------ ----------- ------------- ------------ ----------- ----------- (11,098,070) (443,326) (119,076,924) (29,774,777) (4,952,030) (911,583) - ------------ ----------- ------------- ------------ ----------- ----------- (36,702,015) (1,642,596) (266,636,009) 8,695,676 (3,473,594) (2,213,922) - ------------ ----------- ------------- ------------ ----------- ----------- $(36,422,208) $(1,639,156) $(268,795,364) $ 10,953,406 $(3,104,652) $(1,564,482) ============ =========== ============= ============ =========== ===========
[Graphic] Loomis Sayles Equity Funds 73 Statements of Changes in Net Assets AGGRESSIVE GROWTH FUND
YEAR ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000 - --------------------------------------------------------------------------------- From Operations Net investment income (loss) $ (1,049,698) $ (507,423) Net realized gain (loss) (92,417,186) 2,866,444 Change in unrealized appreciation (depreciation) (51,727,302) 30,887,655 ------------- ------------ Increase (decrease) in net assets from operations (145,194,186) 33,246,676 ------------- ------------ From Distributions to Shareholders Institutional Class Net realized gain on investments (699,751) (845,221) Retail Class Net realized gain on investments (1,576,504) (95,986) Admin Class Net realized gain on investments (560) 0 ------------- ------------ (2,276,815) (941,207) ------------- ------------ From Capital Share Transactions (Note 6) Increase (decrease) in net assets from capital share transactions 34,492,465 126,398,491 ------------- ------------ Total increase (decrease) in net assets (112,978,536) 158,703,960 Net Assets Beginning of the period 173,187,668 14,483,708 ------------- ------------ End of the period $ 60,209,132 $173,187,668 ============= ============ Undistributed Net Investment Income (Loss) End of the period $ 0 $ 0 ============= ============
See accompanying notes to financial statements. Statements of Changes in Net Assets EMERGING MARKETS FUND
YEAR ENDED PERIOD ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000* - ------------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ (18,293) $ (47,079) Net realized gain (loss) (963,216) 532,918 Change in unrealized appreciation (depreciation) (721,423) (33,065) ----------- ---------- Increase (decrease) in net assets from operations (1,702,932) 452,774 ----------- ---------- From Distributions to Shareholders Institutional Class Net realized gain on investments (69,733) 0 Retail Class Net realized gain on investments (515) 0 ----------- ---------- (70,248) 0 ----------- ---------- From Capital Share Transactions (Note 6) Increase (decrease) in net assets from capital share transactions (102,057) 3,252,573 ----------- ---------- Redemption fees (Note 1H) 3,169 336 ----------- ---------- Total increase (decrease) in net assets (1,872,068) 3,705,683 Net Assets Beginning of the period 3,705,683 0 ----------- ---------- End of the period $ 1,833,615 $3,705,683 =========== ========== Undistributed Net Investment Income (Loss) End of the period $ 0 $ 0 =========== ==========
* Commencement of operations, November 9, 1999. See accompanying notes to financial statements. [Graphic] Loomis Sayles Equity Funds 75 Statements of Changes in Net Assets GLOBAL TECHNOLOGY FUND
YEAR ENDED PERIOD ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000* - ------------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ (70,741) $ (100,588) Net realized gain (loss) (6,627,398) (1,517,731) Change in unrealized appreciation (depreciation) (2,244,025) 1,233,792 ------------ ----------- Increase (decrease) in net assets from operations (8,942,164) (384,527) ------------ ----------- From Capital Shares Transactions (Note 6) Increase (decrease) in net assets from capital share transactions (2,441,612) 13,746,833 ------------ ----------- Total increase (decrease) in net assets (11,383,776) 13,362,306 Net Assets Beginning of the period 13,362,306 0 ------------ ----------- End of the period $ 1,978,530 $13,362,306 ============ =========== Undistributed Net Investment Income (Loss) End of the period $ (75) $ 0 ============ ===========
* Commencement of operations, January 31, 2000. See accompanying notes to financial statements. [Graphic] Loomis Sayles Equity Funds Statements of Changes in Net Assets GROWTH FUND
YEAR ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000 - -------------------------------------------------------------------------------- From Operations Net investment income (loss) $ (55,372) $ (145,463) Net realized gain (loss) (15,329,994) 10,662,518 Change in unrealized appreciation (depreciation) (7,943,411) 3,038,087 ------------ ----------- Increase (decrease) in net assets from operations (23,328,777) 13,555,142 ------------ ----------- From Distributions to Shareholders Institutional Class Net realized gain on investments (10,314,172) (2,609,474) Retail Class Net realized gain on investments (251,072) (57,300) Admin Class Net realized gain on investments (2,927) 0 ------------ ----------- (10,568,171) (2,666,774) ------------ ----------- From Capital Share Transactions (Note 6) Increase (decrease) in net assets from capital share transactions 9,718,739 6,584,274 ------------ ----------- Total increase (decrease) in net assets (24,178,209) 17,472,642 Net Assets Beginning of the period 46,356,368 28,883,726 ------------ ----------- End of the period $ 22,178,159 $46,356,368 ============ =========== Undistributed Net Investment Income (Loss) End of the period $ 0 $ 0 ============ ===========
See accompanying notes to financial statements. 77 Statements of Changes in Net Assets INTERNATIONAL EQUITY FUND
YEAR ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000 - ------------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ 279,807 $ (403,315) Net realized gain (loss) (25,603,945) 29,086,883 Change in unrealized appreciation (depreciation) (11,098,070) (4,596,429) ------------ ------------ Increase (decrease) in net assets from operations (36,422,208) 24,087,139 ------------ ------------ From Distributions to Shareholders Institutional Class Net investment income 0 (549,601) Net realized gain on investments (10,517,451) (5,899,843) Retail Class Net investment income 0 (3,905) Net realized gain on investments (751,093) (59,775) Admin Class Net investment income 0 0 Net realized gain on investments (124,478) 0 ------------ ------------ (11,393,022) (6,513,124) ------------ ------------ From Capital Share Transactions (Note 6) Increase (decrease) in net assets from capital share transactions (7,634,241) 16,129,186 ------------ ------------ Total increase (decrease) in net assets (55,449,471) 33,703,201 Net Assets Beginning of the period 113,379,719 79,676,518 ------------ ------------ End of the period $ 57,930,248 $113,379,719 ============ ============ Undistributed Net Investment Income (Loss) End of the period $ 153,646 $ 0 ============ ============
See accompanying notes to financial statements. Statements of Changes in Net Assets RESEARCH FUND
YEAR ENDED PERIOD ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000* - -------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ 3,440 $ (671) Net realized gain (loss) (1,199,270) 14,798 Change in unrealized appreciation (depreciation) (443,326) 78,294 ----------- ---------- Increase (decrease) in net assets from operations (1,639,156) 92,421 ----------- ---------- From Distributions to Shareholders Institutional Class Net realized gain on investments (16,773) 0 ----------- ---------- (16,773) 0 ----------- ---------- From Capital Share Transactions (Note 6) Increase (decrease) in net assets derived from capital share transactions 2,391,362 3,417,087 ----------- ---------- Total increase (decrease) in net assets 735,433 3,509,508 Net Assets Beginning of the period 3,509,508 0 ----------- ---------- End of the period $ 4,244,941 $3,509,508 =========== ========== Undistributed Net Investment Income (Loss) End of the period $ 3,111 $ 0 =========== ==========
* Commencement of operations, July 31, 2000. See accompanying notes to financial statements. [Graphic] Loomis Sayles Equity Funds 79 Statements of Changes in Net Assets SMALL CAP GROWTH FUND
YEAR ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000 - ---------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ (2,159,355) $ (1,344,505) Net realized gain (loss) (147,559,085) 15,371,710 Change in unrealized appreciation (depreciation) (119,076,924) 47,161,814 -------------- ------------ Increase (decrease) in net assets from operations (268,795,364) 61,189,019 -------------- ------------ From Distributions to Shareholders Institutional Class Net realized gain on investments (10,521,248) 0 Retail Class Net realized gain on investments (3,692,261) 0 Admin Class Net realized gain on investments (31,778) 0 -------------- ------------ (14,245,287) 0 -------------- ------------ From Capital Shares Transactions (Note 6) Increase (decrease) in net assets derived from capital share transactions 127,414,789 183,209,242 -------------- ------------ Total increase (decrease) in net assets (155,625,862) 244,398,261 Net Assets Beginning of the period 331,562,996 87,164,735 -------------- ------------ End of the period $ 175,937,134 $331,562,996 ============== ============ Undistributed Net Investment Income (Loss) End of the period $ 0 $ 0 ============== ============
See accompanying notes to financial statements. Statements of Changes in Net Assets SMALL CAP VALUE FUND
YEAR ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000 - --------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ 2,257,730 $ 2,395,302 Net realized gain (loss) 38,470,453 13,210,026 Change in unrealized appreciation (depreciation) (29,774,777) 49,620,844 ------------ ------------- Increase (decrease) in net assets from operations 10,953,406 65,226,172 ------------ ------------- From Distributions to Shareholders Institutional Class Net investment income (2,264,385) (2,390,731) Net realized gain on investments (11,502,885) (4,531,443) Retail Class Net investment income (660,217) (452,153) Net realized gain on investments (4,498,890) (1,335,295) Admin Class Net investment income (62,922) (14,051) Net realized gain on investments (640,490) (91,184) ------------ ------------- (19,629,789) (8,814,857) ------------ ------------- From Capital Shares Transactions (Note 6) Increase (decrease) in net assets derived from capital share transactions 19,122,826 (119,065,673) ------------ ------------- Total increase (decrease) in net assets 10,446,443 (62,654,358) Net Assets Beginning of the period 319,007,577 381,661,935 ------------ ------------- End of the period $329,454,020 $ 319,007,577 ============ ============= Undistributed Net Investment Income (Loss) End of the period $ 1,284,871 $ 2,339,761 ============ =============
See accompanying notes to financial statements. [Graphic] Loomis Sayles Equity Funds 81 Statements of Changes in Net Assets VALUE FUND
YEAR ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000 - -------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ 368,942 $ 453,860 Net realized gain (loss) 1,478,436 (750,571) Change in unrealized appreciation (depreciation) (4,952,030) 876,221 ----------- ------------ Increase (decrease) in net assets from operations (3,104,652) 579,510 ----------- ------------ From Distributions to Shareholders Institutional Class Net investment income (444,829) (632,043) Net realized gain on investments 0 (7,273,628) Retail Class Net investment income (2,465) (3,284) Net realized gain on investments 0 (52,997) ----------- ------------ (447,294) (7,961,952) ----------- ------------ From Capital Shares Transactions (Note 6) Increase (decrease) in net assets derived from capital share transactions 4,046,560 (20,893,844) ----------- ------------ Total increase (decrease) in net assets 494,614 (28,276,286) Net Assets Beginning of the period 39,054,236 67,330,522 ----------- ------------ End of the period $39,548,850 $ 39,054,236 =========== ============ Undistributed Net Investment Income (Loss) End of the period $ 366,602 $ 444,955 =========== ============
See accompanying notes to financial statements. Statements of Changes in Net Assets WORLDWIDE FUND
YEAR ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000 - ----------------------------------------------------------------------------------------------------- From Operations Net investment income (loss) $ 649,440 $ 410,719 Net realized gain (loss) (1,302,339) 2,610,729 Change in unrealized appreciation (depreciation) (911,583) (93,412) ----------- ----------- Increase (decrease) in net assets from operations (1,564,482) 2,928,036 ----------- ----------- From Distributions to Shareholders Institutional Class Net investment income (321,612) (298,668) Net realized gain on investments (2,297,643) (283,232) Retail Class Net investment income (26,028) (5,792) Net realized gain on investments (205,581) (5,908) ----------- ----------- (2,850,864) (593,600) ----------- ----------- From Capital Shares Transactions (Note 6) Increase (decrease) in net assets from capital share transactions 2,316,862 1,920,513 ----------- ----------- Total increase (decrease) in net assets (2,098,484) 4,254,949 Net Assets Beginning of the period 10,626,898 6,371,949 ----------- ----------- End of the period $ 8,528,414 $10,626,898 =========== =========== Undistributed Net Investment Income (Loss) End of the period $ 639,718 $ 346,942 =========== ===========
See accompanying notes to financial statements. [Graphic] Loomis Sayles Equity Funds 83 Financial Highlights AGGRESSIVE GROWTH FUND
Institutional Class ------------------------------------------------------------- NINE MONTHS ENDED PERIOD ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, ------------------------------- ------------- ------------ 2001 2000 1999 1998 1997* - ------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 47.71 $ 20.08 $ 10.51 $11.49 $10.00 ------- ------- ------- ------ ------ INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) (0.20)(d) (0.26)(d) (0.09)(d) (0.03) (0.03) Net realized and unrealized gain (loss) on investments (33.43) 29.11 10.05 (0.95) 2.26 ------- ------- ------- ------ ------ Total from investment operations (33.63) 28.85 9.96 (0.98) 2.23 ------- ------- ------- ------ ------ LESS DISTRIBUTIONS-- Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 Distributions in excess of net investment income 0.00 0.00 0.00 0.00 (0.12) Distributions from net realized capital gains (0.52) (1.22) (0.39) 0.00 (0.62) ------- ------- ------- ------ ------ Total distributions (0.52) (1.22) (0.39) 0.00 (0.74) ------- ------- ------- ------ ------ Net asset value, end of period $ 13.56 $ 47.71 $ 20.08 $10.51 $11.49 ======= ======= ======= ====== ====== Total return (%)(a) (71.1) 147.8 97.9 (8.5) 22.7 Net assets, end of period (000) $16,347 $62,364 $13,308 $2,073 $1,848 Ratios to average net assets: Net expenses (%)(b)(c) 1.00 1.00 1.00 1.00 1.00 Gross expenses (%)(c) 1.13 1.11 2.96 7.13 9.35 Net investment income (loss) (%)(c) (0.75) (0.66) (0.56) (0.35) (0.38) Portfolio turnover rate (%) 258 191 199 82 174
* From commencement of fund operations on January 2, 1997 through December 31,1997. **From commencement of class operations on July 31, 2000 through September 30, 2000. (a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period.
Retail Class Admin Class - ------------------------------------------------------------- ------------------------ NINE MONTHS ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, - ------------------------------- ------------- ------------ ------------- ------------- 2001 2000 1999 1998 1997* 2001 2000** - -------------------------------------------------------------------------------------------- $ 47.33 $ 19.99 $10.49 $11.49 $10.00 $ 47.31 $40.38 - ------- -------- ------ ------ ------ ------- ------ (0.25)(d) (0.38)(d) (0.14)(d) (0.05) (0.06) (0.26)(d) (0.09)(d) (33.15) 28.94 10.03 (0.95) 2.27 (33.15) 7.02 - ------- -------- ------ ------ ------ ------- ------ (33.40) 28.56 9.89 (1.00) 2.21 (33.41) 6.93 - ------- -------- ------ ------ ------ ------- ------ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (0.10) 0.00 0.00 (0.52) (1.22) (0.39) 0.00 (0.62) (0.52) 0.00 - ------- -------- ------ ------ ------ ------- ------ (0.52) (1.22) (0.39) 0.00 (0.72) (0.52) 0.00 - ------- -------- ------ ------ ------ ------- ------ $ 13.41 $ 47.33 $19.99 $10.49 $11.49 $ 13.38 $47.31 ======= ======== ====== ====== ====== ======= ====== (71.2) 147.0 97.5 (8.7) 22.4 (71.3) 17.2 $41,456 $110,824 $1,175 $ 85 $ 74 $ 2,406 $ 0 1.25 1.25 1.25 1.25 1.25 1.50 1.50 1.37 1.35 9.05 27.97 36.58 2.92 1.60 (1.01) (0.89) (0.80) (0.60) (0.67) (1.35) (1.14) 258 191 199 82 174 258 191
[Graphic] Loomis Sayles Equity Funds 85 Financial Highlights EMERGING MARKETS FUND
Institutional Class Retail Class ----------------------- ----------------------- YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- ------------- ------------- 2001 2000* 2001 2000** - --------------------------------------------------------------------------------------------- Net asset value, beginning of period $14.86 $10.00 $14.81 $16.21 ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) (0.07)(d) (0.22)(d) (0.06)(d) (0.14)(d) Net realized and unrealized gain (loss) on investments (6.57) 5.08 (6.59) (1.26) ------ ------ ------ ------ Total from investment operations (6.64) 4.86 (6.65) (1.40) ------ ------ ------ ------ LESS DISTRIBUTIONS-- Distributions from net realized capital gains (0.29) 0.00 (0.29) 0.00 ------ ------ ------ ------ Net asset value, end of period $ 7.93 $14.86 $ 7.87 $14.81 ====== ====== ====== ====== Total return (%)(a) (45.4) 48.6 (45.7) (8.6) Net assets, end of period (000) $1,794 $3,679 $ 40 $ 27 Ratios to average net assets: Net expenses (%)(b)(c) 2.25 2.25 2.50 2.50 Gross expenses (%)(c) 7.75 6.20 59.44 70.10 Net investment income (loss) (%)(c) (0.64) (1.46) (0.56) (2.20) Portfolio turnover rate (%) 177 134 177 134
* From commencement of fund operations on November 9, 1999 through September 30, 2000. **From commencement of class operations on May 9, 2000 through September 30, 2000. (a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share investment income has been determined on the basis of the weighted average number of shares outstanding during the period. Financial Highlights GLOBAL TECHNOLOGY FUND
Institutional Class Retail Class -------------------------- -------------------------- YEAR ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- ------------- ------------- 2001 2000* 2001 2000* - -------------------------------------------------------------------------------------------- Net asset value, beginning of period $12.70 $10.00 $12.59 $10.00 ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) (0.07)(d) (0.08) (0.10)(d) (0.11) Net realized and unrealized gain (loss) on investments (9.53) 2.78 (9.42) 2.70 ------ ------ ------ ------ Total from investment operations (9.60) 2.70 (9.52) 2.59 ------ ------ ------ ------ Net asset value, end of period $ 3.10 $12.70 $ 3.07 $12.59 ====== ====== ====== ====== Total return (%)(a) (75.6) 27.0 (75.6) 25.9 Net assets, end of period (000) $1,507 $7,678 $ 472 $5,685 Ratios to average net assets: Net expenses (%)(b)(c) 1.50 1.50 1.75 1.75 Gross expenses (%)(c) 4.73 3.37 5.33 3.44 Net investment income (loss) (%)(c) (1.09) (1.13) (1.36) (1.40) Portfolio turnover rate (%) 239 181 239 181
* From commencement of fund operations on January 31, 2000 through September 30, 2000. (a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share investment income has been determined on the basis of the weighted average number of shares outstanding during the period. [Graphic] Loomis Sayles Equity Funds 87 Financial Highlights GROWTH FUND
Institutional Class ------------------------------------------ NINE MONTHS YEAR ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------------- ------------- 2001 2000 1999 1998 - ------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 15.00 $ 11.17 $ 11.65 $ 12.63 ------- ------- ------- ------- INCOME (LOSS) FROM INVESTMENT OPERATIONS-- Net investment income (loss) (0.02)(d) (0.05) (0.04) (0.03) Net realized and unrealized gain (loss) on investments (7.42) 4.90 3.01 (0.95) ------- ------- ------- ------- Total from investment operations (7.44) 4.85 2.97 (0.98) ------- ------- ------- ------- LESS DISTRIBUTIONS-- Distributions from net realized capital gains (3.33) (1.02) (3.45) 0.00 ------- ------- ------- ------- Net asset value, end of period $ 4.23 $ 15.00 $ 11.17 $ 11.65 ======= ======= ======= ======= Total return (%)(a) (50.8) 45.6 30.9 (7.8) Net assets, end of period (000) $21,653 $45,328 $28,235 $24,663 Ratios to average net assets: Net expenses (%)(b)(c) 0.85 0.85 0.85 0.85 Gross expenses (%)(c) 1.24 1.01 1.18 1.02 Net investment income (loss) (%)(c) (0.17) (0.36) (0.40) (0.32) Portfolio turnover rate (%) 281 203 164 118
(a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share investment income has been determined on the basis of the weighted average number of shares outstanding during the period.
Institutional Class Retail Class ------------------ ------------------------- YEAR ENDED YEAR ENDED DECEMBER 31, SEPTEMBER 30, ------------------ ------------------------- 1997 1996 2001 2000 1999 ----------------------------------------------- $ 13.44 $ 15.27 $14.80 $11.06 $11.59 ------- ------- ------ ------ ------ (0.04) (0.07) (0.04)(d) (0.07) (0.06) 3.17 3.08 (7.31) 4.83 2.98 ------- ------- ------ ------ ------ 3.13 3.01 (7.35) 4.76 2.92 ------- ------- ------ ------ ------ (3.94) (4.84) (3.33) (1.02) (3.45) ------- ------- ------ ------ ------ $ 12.63 $ 13.44 $ 4.12 $14.80 $11.06 ======= ======= ====== ====== ====== 24.5 19.9 (50.9) 45.3 30.6 $32,149 $39,497 $ 518 $1,028 $ 649 0.85 1.10 1.10 1.10 1.10 0.98 1.10 4.11 3.29 4.43 (0.26) (0.47) (0.42) (0.61) (0.65) 116 99 281 203 164
[Graphic] Loomis Sayles Equity Funds 89 Financial Highlights GROWTH FUND [CONTINUED]
Retail Class Admin Class ------------------------- -------------------------- NINE MONTHS ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, ------------- ------------ ------------- ------------- 1998 1997* 2001 2000** - -------------------------------------------------------------------------------------------------- Net asset value, beginning of period $12.59 $13.44 $14.79 $14.09 ------ ------ ------ ------ INCOME (LOSS) FROM INVESTMENT OPERATIONS-- Net investment income (loss) (0.03) (0.07) (0.08)(d) (0.02) Net realized and unrealized gain (loss) on investments (0.97) 3.16 (7.27) 0.72 ------ ------ ------ ------ Total from investment operations (1.00) 3.09 (7.35) 0.70 ------ ------ ------ ------ LESS DISTRIBUTIONS-- Distributions from net realized capital gains 0.00 (3.94) (3.33) 0.00 ------ ------ ------ ------ Net asset value, end of period $11.59 $12.59 $ 4.11 $14.79 ====== ====== ====== ====== Total return (%)(a) (7.9) 24.2 (50.9) 5.0 Net assets, end of period (000) $ 516 $ 194 $ 8 $ 0 Ratios to average net assets: Net expenses (%)(b)(c) 1.10 1.10 1.35 1.35 Gross expenses (%)(c) 4.74 12.96 68.34 1.50 Net investment income (loss) (%)(c) (0.58) (0.42) (0.94) (0.87) Portfolio turnover rate (%) 118 116 281 203
* From commencement of class operations on January 2, 1997 through December 31, 1997. **From commencement of class operations on July 31, 2000 through September 30, 2000. (a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share investment income has been determined on the basis of the weighted average number of shares outstanding during the period. [This Page Intentionally Left Blank] [Graphic] Loomis Sayles Equity Funds 91 Financial Highlights INTERNATIONAL EQUITY FUND
Institutional Class ------------------------------- YEAR ENDED SEPTEMBER 30, ------------------------------- 2001 2000 1999 - ---------------------------------------------------------------------------------- Net asset value, beginning of period $ 17.41 $ 13.79 $ 10.74 ------- -------- ------- INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) 0.05(d) (0.06)(d) 0.07 Net realized and unrealized gain (loss) on investments (5.91) 4.77 3.31 ------- -------- ------- Total from investment operations (5.86) 4.71 3.38 ------- -------- ------- LESS DISTRIBUTIONS-- Dividends from net investment income 0.00 (0.09) (0.13) Distributions from net realized capital gains (1.94) (1.00) (0.20) ------- -------- ------- Total distributions (1.94) (1.09) (0.33) ------- -------- ------- Net asset value, end of period $ 9.61 $ 17.41 $ 13.79 ======= ======== ======= Total return (%)(a) (34.5) 34.4 32.0 Net assets, end of period (000) $54,080 $107,792 $79,415 Ratios to average net assets: Net expenses (%)(b)(c) 1.00 1.00 1.00 Gross expenses (%)(c) 1.35 1.15 1.22 Net investment income (loss)(%)(c) 0.34 (0.32) 0.53 Portfolio turnover rate (%) 207 226 207
(a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period.
Institutional Class Retail Class ------------------------------------ ---------------------------- NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, YEAR ENDED SEPTEMBER 30, ------------- ---------------------- ---------------------------- 1998 1997 1996 2001 2000 1999 ---------------------------------------------------------------------- $ 11.30 $ 13.16 $ 11.65 $ 17.31 $13.73 $10.70 ------- ------- ------- ------- ------ ------ 0.14 0.15 (d) 0.12 0.02(d) (0.05)(d) 0.05 (0.70) (0.27) 2.01 (5.89) 4.67 3.28 ------- ------- ------- ------- ------ ------ (0.56) (0.12) 2.13 (5.87) 4.62 3.33 ------- ------- ------- ------- ------ ------ 0.00 (0.19) (0.09) 0.00 (0.04) (0.10) 0.00 (1.55) (0.53) (1.94) (1.00) (0.20) ------- ------- ------- ------- ------ ------ 0.00 (1.74) (0.62) (1.94) (1.04) (0.30) ------- ------- ------- ------- ------ ------ $ 10.74 $ 11.30 $ 13.16 $ 9.50 $17.31 $13.73 ======= ======= ======= ======= ====== ====== (5.0) (1.0) 18.3 (34.7) 33.9 31.6 $68,464 $82,188 $90,662 $2,793 $5,588 $ 261 1.00 1.00 1.42 1.25 1.25 1.25 1.18 1.16 1.42 1.99 1.67 12.33 1.49 1.12 0.96 0.13 (0.26) 0.29 96 119 151 207 226 207
[Graphic] Loomis Sayles Equity Funds 93 Financial Highlights INTERNATIONAL EQUITY FUND [CONTINUED]
Retail Class Admin Class ----------------------- ----------------------- NINE MONTHS ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, ------------- ------------ ------------- ------------- 1998 1997* 2001 2000** - -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $11.28 $13.16 $17.30 $17.62 ------ ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) 0.10 0.10(d) 0.02(d) (0.02)(d) Net realized and unrealized gain (loss) on investments (0.68) (0.26) (5.89) (0.30) ------ ------ ------ ------ Total from investment operations (0.58) (0.16) (5.87) (0.32) ------ ------ ------ ------ LESS DISTRIBUTIONS-- Dividends from net investment income 0.00 (0.17) 0.00 0.00 Distributions from net realized capital gains 0.00 (1.55) (1.94) 0.00 ------ ------ ------ ------ Total distributions 0.00 (1.72) (1.94) 0.00 ------ ------ ------ ------ Net asset value, end of period $10.70 $11.28 $ 9.49 $17.30 ====== ====== ====== ====== Total return (%)(a) (5.1) (1.3) (34.8) (1.8) Net assets, end of period (000) $ 150 $ 233 $1,057 $ 0 Ratios to average net assets: Net expenses (%)(b)(c) 1.25 1.25 1.50 1.50 Gross expenses (%)(c) 10.26 16.24 2.01 1.77 Net investment income (loss) (%)(c) 1.16 0.73 0.19 (0.83) Portfolio turnover rate (%) 96 119 207 226
* From commencement of class operations on January 2, 1997 through December 31, 1997. **From commencement of class operations on July 31, 2000 through September 30, 2000. (a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period. Financial Highlights RESEARCH FUND
INSTITUTIONAL CLASS -------------------------- YEAR ENDED PERIOD ENDED SEPTEMBER 30, SEPTEMBER 30, ------------- ------------- 2001 2000 * ----------------------------------------------------------------------------- Net asset value, beginning of period $10.54 $10.00 ------ ------ INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) 0.01(d) 0.00 Net realized and unrealized gain (loss) on investments (3.65) 0.54 ------ ------ Total from investment operations (3.64) 0.54 ------ ------ LESS DISTRIBUTIONS-- Distributions from net realized capital gains (0.05) 0.00 ------ ------ Net asset value, end of period $ 6.85 $10.54 ====== ====== Total return (%)(a) (34.7) 5.4 Net assets, end of period (000) $4,245 $3,510 Ratios to average net assets: Net expenses (%)(b)(c) 1.15 1.15 Gross expenses (%)(c) 4.26 8.02 Net investment income (loss) (%)(c) 0.09 (0.14) Portfolio turnover rate (%) 171 20
* Commencement of fund operations on July 31, 2000 through September 30, 2000. (a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period. [Graphic] Loomis Sayles Equity Funds 95 Financial Highlights SMALL CAP GROWTH FUND
Institutional Class ---------------------------------------------------------- NINE MONTHS ENDED PERIOD ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, --------------------------------- ------------- ------------ 2001 2000 1999 1998 1997* - -------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 26.98 $ 16.74 $ 9.83 $ 11.32 $10.00 -------- -------- ------- ------- ------ INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) (0.12)(d) (0.16)(d) (0.08) (0.02) (0.07)(d) Net realized and unrealized gain (loss) on investments (17.06) 10.40 6.99 (1.47) 1.99 -------- -------- ------- ------- ------ Total from investment operations (17.18) 10.24 6.91 (1.49) 1.92 -------- -------- ------- ------- ------ LESS DISTRIBUTIONS-- Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 Distributions in excess of net investment income 0.00 0.00 0.00 0.00 (0.01) Distributions from net realized capital gains (0.97) 0.00 0.00 0.00 0.00 Distributions in excess of net realized capital gains 0.00 0.00 0.00 0.00 (0.59) -------- -------- ------- ------- ------ Total distributions (0.97) 0.00 0.00 0.00 (0.60) -------- -------- ------- ------- ------ Net asset value, end of period $ 8.83 $ 26.98 $ 16.74 $ 9.83 $11.32 ======== ======== ======= ======= ====== Total return (%)(a) (65.2) 61.2 70.3 (13.2) 19.4 Net assets, end of period (000) $124,479 $262,147 $81,132 $17,174 $3,893 Ratios to average net assets: Net expenses (%)(b)(c) 0.99 0.92 1.00 1.00 1.00 Gross expenses (%)(c) 0.99 0.92 1.11 2.15 5.81 Net investment income (loss) (%)(c) (0.74) (0.62) (0.80) (0.53) (0.65) Portfolio turnover rate (%) 140 170 163 116 211
* From commencement of fund operations on January 2, 1997 through December 31, 1997. ** From commencement of class operations on July 31, 2000 through September 30, 2000. (a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period.
Retail Class Admin Class - ------------------------------------------------------- ------------------------ NINE MONTHS ENDED PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, - ------------------------------ ------------- ------------ ------------- ------------- 2001 2000 1999 1998 1997* 2001 2000** - ----------------------------------------------------------------------------------------- $ 26.74 $ 16.65 $ 9.80 $11.30 $10.00 $ 26.73 $23.67 - ------- ------- ------ ------ ------ ------- ------ (0.15)(d) (0.24)(d) (0.08) (0.08) (0.10)(d) (0.17)(d) (0.05)(d) (16.90) 10.33 6.93 (1.42) 1.99 (16.88) 3.11 - ------- ------- ------ ------ ------ ------- ------ (17.05) 10.09 6.85 (1.50) 1.89 (17.05) 3.06 - ------- ------- ------ ------ ------ ------- ------ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (0.97) 0.00 0.00 0.00 0.00 (0.97) 0.00 0.00 0.00 0.00 0.00 (0.59) 0.00 0.00 - ------- ------- ------ ------ ------ ------- ------ (0.97) 0.00 0.00 0.00 (0.59) (0.97) 0.00 - ------- ------- ------ ------ ------ ------- ------ $ 8.72 $ 26.74 $16.65 $ 9.80 $11.30 $ 8.71 $26.73 ======= ======= ====== ====== ====== ======= ====== (65.3) 60.6 69.9 (13.3) 19.2 (65.3) 12.9 $50,197 $69,416 $6,032 $1,057 $1,139 $ 1,261 $ 0 1.25 1.23 1.25 1.25 1.25 1.50 1.50 1.26 1.23 1.80 3.70 7.82 3.56 1.50 (1.01) (0.92) (1.04) (0.80) (0.94) (1.29) (1.16) 140 170 163 116 211 140 170
[Graphic] Loomis Sayles Equity Funds 97 Financial Highlights SMALL CAP VALUE FUND
Institutional Class -------------------------------- YEAR ENDED SEPTEMBER 30, -------------------------------- 2001 2000 1999 - -------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 20.42 $ 17.33 $ 15.60 -------- -------- -------- INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) 0.16 (d) 0.14(d) 0.16 Net realized and unrealized gain (loss) on investments 0.60 3.36 1.83 -------- -------- -------- Total from investment operations 0.76 3.50 1.99 -------- -------- -------- LESS DISTRIBUTIONS-- Dividends from net investment income (0.20) (0.14) (0.12) Distributions from net realized capital gains (1.09) (0.27) (0.14) -------- -------- -------- Total distributions (1.29) (0.41) (0.26) -------- -------- -------- Net asset value, end of period $ 19.89 $ 20.42 $ 17.33 ======== ======== ======== Total return (%)(a) 3.9 20.7 12.8 Net assets, end of period (000) $215,439 $214,919 $301,496 Ratios to average net assets: Net expenses (%)(b)(c) 0.98 0.93 0.90 Gross expenses (%)(c) 0.98 0.93 0.90 Net investment income (loss) (%)(c) 0.76 0.76 0.87 Portfolio turnover rate (%) 98 102 113
(a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period.
Institutional Class Retail Class -------------------------------- ----------------------------- NINE MONTHS ENDED YEAR ENDED YEAR ENDED SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, ------------- ------------------ ----------------------------- 1998 1997 1996 2001 2000 1999 ----------------------------------------------------------------- $ 18.62 $ 17.39 $ 15.33 $ 20.38 $ 17.28 $ 15.57 -------- -------- -------- ------- ------- ------- 0.12 0.17 0.11 0.11 (d) 0.10 (d) 0.09 (3.14) 4.26 4.47 0.60 3.36 1.84 -------- -------- -------- ------- ------- ------- (3.02) 4.43 4.58 0.71 3.46 1.93 -------- -------- -------- ------- ------- ------- 0.00 (0.15) (0.11) (0.15) (0.09) (0.08) 0.00 (3.05) (2.41) (1.09) (0.27) (0.14) -------- -------- -------- ------- ------- ------- 0.00 (3.20) (2.52) (1.24) (0.36) (0.22) -------- -------- -------- ------- ------- ------- $ 15.60 $ 18.62 $ 17.39 $ 19.85 $ 20.38 $ 17.28 ======== ======== ======== ======= ======= ======= (16.2) 26.0 30.4 3.6 20.4 12.4 $296,116 $245,177 $163.625 $97,544 $92,698 $75,302 0.92 0.94 1.19 1.22 1.17 1.20 0.92 0.94 1.19 1.22 1.17 1.20 1.04 0.97 0.80 0.51 0.53 0.57 78 94 73 98 102 113
[Graphic] Loomis Sayles Equity Funds 99 Financial Highlights SMALL CAP VALUE FUND [CONTINUED]
Retail Class ----------------------- NINE MONTHS ENDED PERIOD ENDED SEPTEMBER 30, DECEMBER 31, ------------- ------------ 1998 1997* - ------------------------------------------------------------------------------------- Net asset value, beginning of period $ 18.62 $ 17.39 ------- ------- INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) 0.10 0.15 (d) Net realized and unrealized gain (loss) on investments (3.15) 4.21 ------- ------- Total from investment operations (3.05) 4.36 ------- ------- LESS DISTRIBUTIONS-- Dividends from net investment income 0.00 (0.08) Distributions from net realized capital gains 0.00 (3.05) ------- ------- Total distributions 0.00 (3.13) ------- ------- Net asset value, end of period $ 15.57 $ 18.62 ======= ======= Total return (%)(a) (16.4) 25.6 Net assets, end of period (000) $54,060 $34,353 Ratios to average net assets: Net expenses (%)(b)(c) 1.19 1.25 Gross expenses (%)(c) 1.19 1.35 Net investment income (loss) (%)(c) 0.79 0.79 Portfolio turnover rate (%) 78 94
* From commencement of class operations on January 2, 1997 through December 31, 1997. **From commencement of class operations on January 2, 1998 through September 30, 1998. (a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period.
Admin Class ------------------------------------------ PERIOD ENDED YEAR ENDED SEPTEMBER 30, SEPTEMBER 30, ---------------------------- ------------- 2001 2000 1999 1998** -------------------------------------------- $ 20.34 $ 17.24 $15.54 $18.62 ------- ------- ------ ------ 0.05 (d) 0.04 (d) 0.04 0.03 0.60 3.37 1.83 (3.11) ------- ------- ------ ------ 0.65 3.41 1.87 (3.08) ------- ------- ------ ------ (0.10) (0.04) (0.03) 0.00 (1.09) (0.27) (0.14) 0.00 ------- ------- ------ ------ (1.19) (0.31) (0.17) 0.00 ------- ------- ------ ------ $ 19.80 $ 20.34 $17.24 $15.54 ======= ======= ====== ====== 3.3 20.1 12.0 (16.5) $16,471 $11,391 $4,863 $1,046 1.50 1.50 1.50 1.50 1.59 1.68 1.70 3.99 0.23 0.21 0.30 0.95 98 102 113 78
[Graphic] Loomis Sayles Equity Funds 101 Financial Highlights VALUE FUND
Institutional Class --------------------------- YEAR ENDED SEPTEMBER 30, --------------------------- 2001 2000 1999 - --------------------------------------------------------------------------------------- Net asset value, beginning of period $ 15.12 $ 16.54 $ 16.85 ------- ------- ------- INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) 0.14 (d) 0.17 0.22 Net realized and unrealized gain (loss) on investments (1.19) 0.41 1.53 ------- ------- ------- Total from investment operations (1.05) 0.58 1.75 ------- ------- ------- LESS DISTRIBUTIONS-- Dividends from net investment income (0.17) (0.15) (0.24) Distributions from net realized capital gains 0.00 (1.85) (1.82) ------- ------- ------- Total distributions (0.17) (2.00) (2.06) ------- ------- ------- Net asset value, end of period $ 13.90 $ 15.12 $ 16.54 ======= ======= ======= Total return (%)(a) (7.1) 3.6 10.5 Net assets, end of period (000) $39,549 $38,792 $66,726 Ratios to average net assets: Net expenses (%)(b)(c) 0.85 0.85 0.78 Gross expenses (%)(c) 0.96 0.89 0.78 Net investment income (loss) (%)(c) 0.87 0.87 1.20 Portfolio turnover rate (%) 90 73 59
(a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period.
Institutional Class - ------------------------------------ NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31, - ------------- ---------------------- 1998 1997 1996 - --------------------------------------- $ 17.64 $ 15.60 $ 14.57 ------- ------- ------- 0.18 0.18 0.22 (0.97) 4.32 2.83 ------- ------- ------- (0.79) 4.50 3.05 ------- ------- ------- 0.00 (0.19) (0.22) 0.00 (2.27) (1.80) ------- ------- ------- 0.00 (2.46) (2.02) ------- ------- ------- $ 16.85 $ 17.64 $ 15.60 ======= ======= ======= (4.5) 29.2 21.2 $66,928 $63,303 $43,715 0.79 0.84 1.13 0.79 0.84 1.13 1.36 1.12 1.44 49 64 58
[Graphic] Loomis Sayles Equity Funds 103 Financial Highlights WORLDWIDE FUND
Institutional Class -------------------------- YEAR ENDED SEPTEMBER 30, -------------------------- 2001 2000 1999 - -------------------------------------------------------------------------------------- Net asset value, beginning of period $13.93 $10.28 $ 8.79 ------ ------ ------ INCOME FROM INVESTMENT OPERATIONS-- Net investment income (loss) 0.65(d) 0.58(d) 0.50 Net realized and unrealized gain (loss) on investments (2.44) 4.02 1.82 ------ ------ ------ Total from investment operations (1.79) 4.60 2.32 ------ ------ ------ LESS DISTRIBUTIONS-- Dividends from net investment income (0.35) (0.48) (0.44) Distributions from net realized capital gains (3.31) (0.47) (0.39) ------ ------ ------ Total distributions (3.66) (0.95) (0.83) ------ ------ ------ Net asset value, end of period $ 8.48 $13.93 $10.28 ====== ====== ====== Total return (%)(a) (15.0) 46.5 27.8 Net assets, end of period (000) $8,528 $9,748 $6,233 Ratios to average net assets: Net expenses (%)(b)(c) 1.00 1.00 1.00 Gross expenses (%)(c) 2.58 2.48 3.46 Net investment income (loss) (%)(c) 6.85 4.26 5.07 Portfolio turnover rate (%) 160 183 165
* From commencement of class operations on May 1, 1996 through December 31, 1996. (a)Total returns would have been lower had the adviser not reduced its advisory fees and/or borne other operating expenses. Periods less than one year are not annualized. (b)The adviser has agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement the Fund's ratio of operating expenses would have been higher. (c)Annualized for periods less than one year. (d)Per share net investment income has been determined on the basis of the weighted average number of shares outstanding during the period.
Institutional Class - -------------------------------------- NINE MONTHS ENDED YEAR ENDED PERIOD ENDED SEPTEMBER 30, DECEMBER 31, DECEMBER 31, - ------------- ------------ ------------ 1998 1997 1996* - ---------------------------------------- $ 9.86 $10.63 $10.00 ------ ------ ------ 0.33 0.47 0.30 (1.40) (0.10) 0.63 ------ ------ ------ (1.07) 0.37 0.93 ------ ------ ------ 0.00 (0.47) (0.30) 0.00 (0.67) 0.00 ------ ------ ------ 0.00 (1.14) (0.30) ------ ------ ------ $ 8.79 $ 9.86 $10.63 ====== ====== ====== (10.9) 3.5 9.2 $4,907 $5,597 $5,189 1.00 1.00 1.00 3.28 2.62 3.72 4.37 3.89 4.62 93 134 76
[Graphic] Loomis Sayles Equity Funds 105 Notes to Financial Statements SEPTEMBER 30, 2001 1. Loomis Sayles Funds is comprised of predominantly no-load mutual funds (the "Funds"). Each Fund is a series of Loomis Sayles Funds (the "Trust"). The Trust is a diversified, open-end management investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the "1940 Act") and organized as a Massachusetts business trust on February 20, 1991. The Trust is authorized to issue an unlimited number of full and fractional shares of beneficial interest in multiple series. Each Fund is separately managed and has its own investment objective and policies. Loomis, Sayles & Company, L.P. ("Loomis Sayles") is the investment adviser of each Fund. The Trust consists of the following Funds:
FIXED INCOME FUNDS EQUITY FUNDS - ------------------ ------------ Loomis Sayles Bond Fund Loomis Sayles Aggressive Growth Fund Loomis Sayles Global Bond Fund Loomis Sayles Emerging Markets Fund Loomis Sayles High Yield Fund Loomis Sayles Global Technology Fund Loomis Sayles Intermediate Maturity Bond Fund Loomis Sayles Growth Fund Loomis Sayles Investment Grade Bond Fund Loomis Sayles International Equity Fund Loomis Sayles Managed Bond Fund Loomis Sayles Research Fund Loomis Sayles Short-Term Bond Fund Loomis Sayles Small Cap Growth Fund Loomis Sayles U.S. Government Securities Fund Loomis Sayles Small Cap Value Fund Loomis Sayles Value Fund (formerly Loomis Sayles Core Value Fund) Loomis Sayles Worldwide Fund
The financial statements of the Fixed Income Funds are presented separately. Effective February 1, 2001, the name of the Loomis Sayles Core Value Fund changed to the Loomis Sayles Value Fund. The Value Fund and Worldwide Fund Retail Class Shares were reclassified into Institutional Shares on December 18, 2000. The Funds ceased offering the Retail Class Shares on October 2, 2000. The Equity Funds (excluding the Research Fund, Value Fund and Worldwide Fund) offer Institutional and Retail Class shares. The Research, Value and Worldwide Funds offer Institutional Class shares. The Aggressive Growth, Growth, International Equity, Small Cap Growth, and Small Cap Value Funds also offer Admin Class shares. Each class of shares has an equal pro rata interest in the assets of the relevant fund and general voting privileges. Institutional, Retail and Admin Classes differ with respect to distribution and certain other class-specific expenses and expense reductions. Notes to Financial Statements (continued) SEPTEMBER 30, 2001 The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Equity Funds: A. Security Valuation| Equity securities for which quotations are readily available are valued at their last sale price on the exchange or markets where primarily traded or, if there is no reported sale during the day, at the closing bid price. Long-term debt securities for which quotations are readily available are valued by a pricing service, approved by the Board of Trustees, which generally uses the most recent bid prices in the principal market in which such securities are normally traded. Short-term securities with a remaining maturity of 60 days or less are valued at amortized cost, which approximates fair value. Other securities for which quotations are not readily available (including restricted securities, if any) are valued primarily using dealer supplied quotations or at their fair values as determined in good faith under the general supervision of the Board of Trustees. B. Repurchase Agreement| The Funds may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, the Funds take possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the Funds to resell, the obligation at an agreed-upon price and time. This arrangement results in a fixed rate of return that is not subject to market fluctuations during the Funds' holding period. The Funds, through their custodian, receive delivery of the underlying securities collateralizing repurchase agreements. It is the Funds' policy that the market value of the collateral be at least equal to 102% of the repurchase price including accrued interest. These securities are marked-to-market daily. Loomis Sayles is responsible for determining that the value of the collateral is at all times at least equal to 102% of the repurchase price including accrued interest. In connection with transactions in repurchase agreements, if the seller defaults and the value of the collateral declines or if the seller enters into insolvency proceedings, realization of the collateral by the Funds may be delayed or limited. C. Foreign Currency Translation and Foreign Investments| The books and records of each of the Funds (including those Funds that invest in foreign investments) are maintained in U.S. dollars. The value of investments, currencies and other assets and liabilities denominated in currencies other than U.S. dollars is translated into U.S. dollars based upon foreign exchange rates prevailing at the end of each day. Purchases and sales of investments, income and expenses are translated at prevailing exchange rates on the respective dates of such transactions. The results of operations resulting from changes in foreign exchange rates on investments are not isolated from fluctuations arising from changes in market prices of investments held. All such fluctuations are included with net realized and unrealized gain or loss on investments. [Graphic] Loomis Sayles Equity Funds 107 Notes to Financial Statements (continued) SEPTEMBER 30, 2001 Net realized gains and losses on foreign currency transactions represent net gains and losses from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and the differences between the amounts of dividends, interest and foreign withholding taxes recorded on the Funds' books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities, other than investments in securities at fiscal year-end, resulting from changes in exchange rates. Certain funds use foreign currency exchange contracts to facilitate transactions in foreign-denominated investments. Losses may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms. Each Fund may purchase investments of foreign issuers. Investing in securities of foreign companies and foreign governments involves special risks and considerations not typically associated with investing in U.S. companies and securities of the U.S. government. These risks include revaluation of currencies and the risk of appropriation. Moreover, the markets for securities of many foreign companies and foreign governments and their markets may be less liquid and the prices of such securities may be more volatile than those of securities of comparable U.S. companies and the U.S. government. D. Forward Foreign Currency Exchange Contracts| Each Fund that may invest in foreign investments may enter into forward foreign currency exchange contracts to protect its investments against changes in future foreign exchange rates. A forward foreign currency exchange contract is an agreement between two parties to buy or sell currency at a set price on a future date. The market value of the contracts will fluctuate with changes in currency exchange rates. The contracts are marked-to-market daily using the forward currency exchange rates and the changes in market values are recorded as unrealized appreciation (depreciation) on foreign currency translations in the Funds' Statements of Assets and Liabilities. Realized gain or loss is recognized when a contract is closed equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed and recorded as realized gain (loss) on foreign currency transactions in the Funds' Statements of Operations. Risks may arise upon entering into forward foreign currency exchange contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. At September 30, 2001, there were no open forward foreign currency exchange contracts. E. Security Transactions, Related Investment Income and Expenses| Security transactions are accounted for on the trade date (the date the buy or sell is Notes to Financial Statements (continued) SEPTEMBER 30, 2001 executed). Dividend income is recorded on the ex-dividend date or, in the case of dividend income on foreign securities, on the ex-dividend date or when the Fund becomes aware of its declaration, net of foreign withholding taxes, where applicable. Interest income is recorded on the accrual basis and increased by the accretion of discount. Included in interest income on the Growth and Small Cap Value Funds' Statements of Operations is other income of $14,030 and $70,099, respectively, from litigation settlements. In determining net gain or loss on securities sold, the cost of securities is determined on the identified cost basis. Most expenses of the Trust can be directly attributed to a particular Fund. Expenses which cannot be directly attributed are apportioned among the Funds based upon relative net assets. Investment income, realized and unrealized gains and losses, and the common expenses of a Fund are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. F. Federal Income Taxes| Each Fund is a separate entity for federal income tax purposes. Each Fund intends to meet the requirements of the Internal Revenue Code applicable to regulated investment companies, and to distribute to its shareholders all of its net investment income and any net realized capital gains. Accordingly, no provision for federal income tax or excise tax has been made. The capital loss carryforwards are intended to be used to offset future capital gains. At September 30, 2001, the following Funds had available capital loss carryforwards:
FUND AMOUNT EXPIRES ---- ------ ------- Aggressive Growth Fund $3,211,673 2009 Emerging Markets Fund 309,076 2009 Global Technology Fund 1,473,624 2008 394,314 2009 Growth Fund 523,423 2009 International Equity Fund 6,918,472 2009 Research Fund 89,477 2009 Small Cap Growth Fund 4,346,866 2009 Worldwide Fund 238,412 2009
The Funds elected to defer net capital losses, noted below, as having been incurred in the following fiscal year. FUND AMOUNT ---- ------ Aggressive Growth Fund $88,845,750 Emerging Markets Fund 608,058 Global Technology Fund 6,140,467 Growth Fund 14,710,768 International Equity Fund 18,297,326 Research Fund 945,345 Small Cap Growth Fund 143,907,994 Worldwide Fund 1,058,161 [Graphic] Loomis Sayles Equity Funds 109 Notes to Financial Statements (continued) SEPTEMBER 30, 2001 G. Dividends and Distributions to Shareholders| Each Fund pays its net investment income to shareholders annually. Distributions from net realized capital gains are declared and paid on an annual basis by all of the Funds. Income and capital gains distributions, if any, are determined in accordance with Federal income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences, which may result in reclassifications to a Fund's capital accounts to reflect income and gains available for distribution, are primarily due to differing book and tax treatments for litigation proceeds, forward foreign currency transactions, non-deductible organization costs, deferred losses due to wash sales, excise tax regulations and net operating losses. Some of these classifications may include temporary book and tax basis differences that will reverse in subsequent periods. Distributions to shareholders are recorded on the ex-dividend date. H. Redemption Fees| Shares held in Emerging Markets Fund less than one year are subject to a redemption fee equal to 2% of the amount redeemed. 2. Portfolio Security Transactions| The cost of purchases and proceeds from sales and maturities of securities other than short term investments for each Fund for the year ended September 30, 2001 were as follows:
FUND PURCHASES SALES - ---- --------- ----- Aggressive Growth Fund... $319,613,658 $285,570,650 Emerging Markets Fund.... 4,986,387 4,767,991 Global Technology Fund... 13,940,473 16,385,837 Growth Fund.............. 86,051,718 85,884,145 International Equity Fund 169,575,032 182,156,402 Research Fund............ 9,024,183 6,760,573 Small Cap Growth Fund.... 481,136,478 356,745,391 Small Cap Value Fund..... 313,927,094 315,094,085 Value Fund............... 39,717,309 37,470,119 Worldwide Fund........... 13,289,105 13,391,178
Purchases and sales of long-term U.S. Government securities occurred in the Worldwide Fund and totaled $182,541 and $0, respectively. Notes to Financial Statements (continued) SEPTEMBER 30, 2001 3. Management Fees and Other Transactions with Affiliates| During the year ended September 30, 2001, the Funds incurred management fees payable to Loomis Sayles. Separate management agreements for each Fund in effect during the year ended September 30, 2001 provided for fees at the following annual percentage rate of each Fund's average daily net assets indicated below. Loomis Sayles has contractually agreed, until February 1, 2002, to reduce its advisory fees and/or bear other expenses, to the extent necessary to limit the total operating expenses of the Funds, to the following percentage rate of each Fund's average daily net assets:
MAXIMUM EXPENSE RATIOS -------------------------- MANAGEMENT INSTITUTIONAL RETAIL ADMIN FUND FEES CLASS CLASS CLASS ---- ---------- ------------- ------ ----- Aggressive Growth Fund... 0.75% 1.00% 1.25% 1.50% Emerging Markets Fund.... 1.25% 2.25% 2.50% -- Global Technology Fund... 1.00% 1.50% 1.75% -- Growth Fund.............. 0.50% 0.85% 1.10% 1.35% International Equity Fund 0.75% 1.00% 1.25% 1.50% Research Fund............ 0.75% 1.15% -- -- Small Cap Growth Fund.... 0.75% 1.00% 1.25% 1.50% Small Cap Value Fund..... 0.75% 1.00% 1.25% 1.50% Value Fund............... 0.50% 0.85% -- -- Worldwide Fund........... 0.75% 1.00% -- --
Certain officers and employees of Loomis Sayles are also officers or Trustees of the Trust. Loomis Sayles' general partner is indirectly owned by CDC IXIS Asset Management North America, L.P, whose general partner is indirectly owned by CDC IXIS Asset Management SA ("CDC IXIS"). CDC IXIS is part of the Caisse des Depots et Consignations group. Retail and Admin Class shares are subject to distribution fees payable to Loomis Sayles Distributors L.P. (the "Distributor"), a subsidiary of Loomis Sayles at an annual rate of 0.25% of the relevant class' average net assets, pursuant to distribution plans adopted in accordance with Rule 12b-1 under the Investment Company Act of 1940. Admin Class shares may pay an administrative fee at an annual rate of up to 0.25% of the average daily net assets attributable to Admin Class shares to securities dealers or financial intermediaries for providing personal service and account maintenance for their customers who hold such shares. Retail and Admin Class shares have exclusive voting rights with respect to their distribution plans. The Institutional and Retail Class shares of the Funds may pay sub-transfer agency fees to brokers and other shareholder representatives with respect to such shares held in omnibus accounts by brokers or representatives for the benefit of their customers. These fees will not exceed the amounts that the Funds would expect to pay to the Fund's transfer agent if a transfer agent were to hold their customers' Fund shares directly. As of September 30, 2001, the following amounts were incurred under this arrangement:
AMOUNTS FUND SHARE CLASS PAID - ---- ----------- ---- Aggressive Growth Fund Institutional Class $ 488 Small Cap Growth Fund Institutional Class 27,458 Small Cap Value Fund Institutional Class 27,078
[Graphic] Loomis Sayles Equity Funds 111 Notes to Financial Statements (continued) SEPTEMBER 30, 2001 Loomis Sayles charges the Funds an administrative fee related to Loomis Sayles' performance of certain accounting and administrative services. As of September 30, 2001, the following amounts were incurred by the Funds:
FUND AMOUNT - ---- ------ Aggressive Growth Fund... $ 36,273 Emerging Markets Fund.... 951 Global Technology Fund... 2,131 Growth Fund.............. 10,516 International Equity Fund 29,088 Research Fund............ 1,466 Small Cap Growth Fund.... 86,308 Small Cap Value Fund..... 110,469 Value Fund............... 13,809 Worldwide Fund........... 3,115
A. Trustees Fees and Expenses| The Trust does not pay any compensation directly to its officers or Trustees who are directors, officers or employees of Loomis Sayles, CDC IXIS Asset Management North America or their affiliates. Each independent Trustee is compensated by the Trust on behalf of each Fund at the rate of $1,250 per Fund per year, plus travel expenses for each meeting attended. B. Shareholders| At September 30, 2001, Loomis, Sayles & Company, L.P. Funded Pension Plan and Trust ("Pension Plan") and the Loomis, Sayles & Company, L.P. Employees' Profit Sharing Retirement and Loomis Sayles Employees' Money Purchase Plan ("Defined Contribution Plans") held shares of beneficial interest in the Funds as follows:
DEFINED PENSION CONTRIBUTION FUND PLAN PLANS - ---- ---- ----- Aggressive Growth Fund... 113,677 513,385 Emerging Markets Fund.... 0 35,810 Global Technology Fund... 114,679 38,987 Growth Fund.............. 452,097 1,897,656 International Equity Fund 749,679 471,926 Research Fund............ 0 237,491 Small Cap Growth Fund.... 234,766 444,533 Small Cap Value Fund..... 438,629 673,019 Value Fund............... 407,561 620,448 Worldwide Fund........... 756,647 164,170
Notes to Financial Statements (continued) SEPTEMBER 30, 2001 4. Beneficial Interest| The following Funds have shareholders, each owning beneficially or of record 10% or more of the shares outstanding of a Fund as of September 30, 2001. The total percentage of the shares of each Fund held by such shareholders were as follows.
10% OR GREATER SHAREHOLDERS --------------------------- # OF % OF FUND SHAREHOLDERS SHARES HELD - ---- ------------ ----------- Emerging Markets Fund. 1 44% Global Technology Fund 1 16% Research Fund......... 1 32%
5. Line of Credit| The Trust has entered into an agreement which enables each Fund to borrow under a $25 million unsecured line of credit. Borrowings will be made solely to temporarily finance the repurchase of capital shares. Interest is charged to each participating Fund based on its borrowings at a rate per annum equal to the Federal Funds rate plus 0.45%. In addition, a commitment fee of 0.08% per annum, payable at the end of each calendar quarter, is accrued by the Trust and apportioned among the Funds based on each Fund's average daily unused portion of the line of credit. During the year ended September 30, 2001, the Funds had no borrowings under the agreement. 6. Capital Share Transactions| The tables below summarize the transactions in Fund shares for the periods indicated:
LOOMIS SAYLES AGGRESSIVE GROWTH FUND ------------------------------------------------- YEAR ENDED PERIOD ENDED SEPTEMBER 30, 2001 SEPTEMBER 30, 2000 ------------------------ ----------------------- SHARES AMOUNT SHARES AMOUNT Institutional Class Shares ------ ------ ------ ------ Issued from the sale of shares 503,193 $ 15,133,873 1,166,171 $ 47,463,571 Issued in connection with the reinvestment of distributions 19,999 653,953 29,485 838,267 Redeemed...................... (624,749) (17,425,276) (551,296) (21,548,500) ---------- ------------ --------- ------------ Net change.................... (101,557) $ (1,637,450) 644,360 $ 26,753,338 ========== ============ ========= ============ SHARES AMOUNT SHARES AMOUNT Retail Class Shares ------ ------ ------ ------ Issued from the sale of shares 3,084,098 $ 88,904,887 2,659,678 $115,539,153 Issued in connection with the reinvestment of distributions 47,308 1,532,767 3,146 89,009 Redeemed...................... (2,380,773) (57,952,729) (380,017) (15,983,199) ---------- ------------ --------- ------------ Net change.................... 750,633 $ 32,484,925 2,282,807 $ 99,644,963 ========== ============ ========= ============ SHARES AMOUNT SHARES* AMOUNT* Admin Class Shares ------ ------ ------- ------- Issued from the sale of shares 199,331 $ 4,028,681 5 $ 190 Issued in connection with the reinvestment of distributions 17 560 0 0 Redeemed...................... (19,570) (384,251) 0 0 ---------- ------------ --------- ------------ Net change.................... 179,778 $ 3,644,990 5 $ 190 ========== ============ ========= ============ *From July 31, 2000 (commencement of class operations)
[Graphic] Loomis Sayles Equity Funds 113 Notes To Financial Statements (continued) SEPTEMBER 30, 2001
LOOMIS SAYLES EMERGING MARKETS FUND --------------------------------------- YEAR ENDED PERIOD ENDED SEPTEMBER 30, 2001 SEPTEMBER 30, 2000 ------------------ ------------------- SHARES AMOUNT SHARES* AMOUNT* Institutional Class Shares ------ ------ ------- ------- Issued from the sale of shares............... 32,243 $ 374,035 258,695 $3,406,250 Issued in connection with the reinvestment of distributions............................... 4,847 61,504 0 0 Redeemed..................................... (58,300) (573,120) (11,149) (183,893) ------- --------- ------- ---------- Net change................................... (21,210) $(137,581) 247,546 $3,222,357 ======= ========= ======= ========== SHARES AMOUNT SHARES** AMOUNT** Retail Class Shares ------ ------ -------- -------- Issued from the sale of shares............... 3,240 $ 35,500 1,799 $ 30,216 Issued in connection with the reinvestment of distributions............................... 41 514 0 0 Redeemed..................................... (40) (490) 0 0 ------- --------- ------- ---------- Net change................................... 3,241 $ 35,524 1,799 $ 30,216 ======= ========= ======= ==========
*From November 9, 1999 (commencement of operations). ** FromMay 9, 2000 (commencement of class operations).
LOOMIS SAYLES GLOBAL TECHNOLOGY FUND -------------------------------------------- YEAR ENDED PERIOD ENDED SEPTEMBER 30, 2001 SEPTEMBER 30, 2000 --------------------- --------------------- SHARES AMOUNT SHARES* AMOUNT* Institutional Class Shares ------ ------ ------- ------- Issued from the sale of shares 310,690 $ 2,334,085 730,784 $ 9,373,436 Redeemed...................... (429,954) (2,704,726) (126,138) (1,727,964) -------- ----------- -------- ----------- Net change.................... (119,264) $ (370,641) 604,646 $ 7,645,472 -------- ----------- -------- ----------- SHARES AMOUNT SHARES* AMOUNT* Retail Class Shares -------- ----------- -------- ----------- Issued from the sale of shares 15,292 $ 137,666 766,007 $10,212,388 Redeemed...................... (313,099) (2,208,637) (314,497) (4,111,027) -------- ----------- -------- ----------- Net change.................... (297,807) $(2,070,971) 451,510 $ 6,101,361 ======== =========== ======== ===========
*From January 31, 2000 (commencement of class operations). Notes to Financial Statements (continued) SEPTEMBER 30, 2001
LOOMIS SAYLES GROWTH FUND --------------------------------------------- YEAR ENDED PERIOD ENDED SEPTEMBER 30, 2001 SEPTEMBER 30, 2000 ---------------------- --------------------- SHARES AMOUNT SHARES AMOUNT Institutional Class Shares ------ ------ ------ ------ Issued from the sale of shares 651,050 $ 6,494,438 982,589 $13,739,510 Issued in connection with the reinvestment of distributions 2,179,515 10,238,087 213,234 2,582,261 Redeemed...................... (733,732) (7,301,916) (701,344) (9,865,685) --------- ----------- -------- ----------- Net change.................... 2,096,833 $ 9,430,609 494,479 $ 6,456,086 ========= =========== ======== =========== SHARES AMOUNT SHARES AMOUNT Retail Class Shares --------- ----------- -------- ----------- Issued from the sale of shares 11,389 $ 129,212 30,092 $ 403,759 Issued in connection with the reinvestment of distributions 55,005 251,023 4,783 57,295 Redeemed...................... (10,144) (95,683) (24,121) (333,030) --------- ----------- -------- ----------- Net change.................... 56,250 $ 284,552 10,754 $ 128,024 ========= =========== ======== =========== SHARES AMOUNT SHARES* AMOUNT* Admin Class Shares --------- ----------- -------- ----------- Issued from the sale of shares 46,571 $ 392,224 11 $ 164 Issued in connection with the reinvestment of distributions 731 2,927 0 0 Redeemed...................... (45,476) (391,573) 0 0 --------- ----------- -------- ----------- Net change.................... 1,826 $ 3,578 11 $ 164 ========= =========== ======== ===========
*From July 31, 2000 (commencement of class operations).
LOOMIS SAYLES INTERNATIONAL EQUITY FUND --------------------------------------------------- YEAR ENDED PERIOD ENDED SEPTEMBER 30, 2001 SEPTEMBER 30, 2000 ------------------------ ------------------------- SHARES AMOUNT SHARES AMOUNT Institutional Class Shares ---------- ------------ ---------- ------------- Issued from the sale of shares 1,783,647 $ 24,075,338 6,141,651 $ 121,233,754 Issued in connection with the reinvestment of distributions 840,092 9,211,872 293,954 4,952,186 Redeemed...................... (3,186,426) (42,536,690) (6,000,308) (118,835,898) ---------- ------------ ---------- ------------- Net change.................... (562,687) $ (9,249,480) 435,297 $ 7,350,042 ========== ============ ========== ============= SHARES AMOUNT SHARES AMOUNT Retail Class Shares ---------- ------------ ---------- ------------- Issued from the sale of shares 1,189,335 $ 15,346,150 2,020,471 $ 41,452,169 Issued in connection with the reinvestment of distributions................ 68,198 712,905 3,717 62,151 Redeemed...................... (1,286,338) (16,003,181) (1,720,414) (32,735,343) ---------- ------------ ---------- ------------- Net change.................... (28,805) $ 55,874 303,774 $ 8,778,977 ========== ============ ========== ============= SHARES AMOUNT SHARES* AMOUNT* Admin Class Shares ---------- ------------ ---------- ------------- Issued from the sale of shares 124,822 $ 1,767,944 10 $ 167 Issued in connection with the reinvestment of distributions 13,396 124,478 0 0 Redeemed...................... (26,846) (333,057) 0 0 ---------- ------------ ---------- ------------- Net change.................... 111,372 $ 1,559,365 10 $ 167 ========== ============ ========== =============
*From July 31, 2000 (commencement of class operations) [Graphic] Loomis Sayles Equity Funds 115 Notes to Financial Statements (continued) SEPTEMBER 30, 2001
LOOMIS SAYLES RESEARCH FUND ---------------------------------------------- YEAR ENDED PERIOD ENDED SEPTEMBER 30, 2001 SEPTEMBER 30, 2000 ----------------------- --------------------- SHARES AMOUNT SHARES* AMOUNT* Institutional Class Shares ------- ------------- ------- ------------- Issued from the sale of shares 418,621 $ 3,371,934 332,974 $ 3,417,087 Issued in connection with the reinvestment of distributions................ 1,853 16,773 0 0 Redeemed...................... (133,993) (997,345) 0 0 -------- ------------- ------- ------------- Net change.................... 286,481 $ 2,391,362 332,974 $ 3,417,087 ======== ============= ======= =============
*From July 31, 2000 (commencement of operations).
LOOMIS SAYLES SMALL CAP GROWTH FUND -------------------------------------------------- YEAR ENDED PERIOD ENDED SEPTEMBER 30, 2001 SEPTEMBER 30, 2000 ------------------------ ------------------------ SHARES AMOUNT SHARES AMOUNT Institutional Class Shares ------ ------ ------ ------ Issued from the sale of shares 8,257,954 $129,009,973 6,544,949 $168,973,667 Issued in connection with the reinvestment of distributions................ 607,824 8,867,281 0 0 Redeemed...................... (4,490,271) (67,346,115) (1,674,604) (44,399,753) ---------- ------------ ---------- ------------ Net change.................... 4,375,507 $ 70,531,139 4,870,345 $124,573,914 ========== ============ ========== ============ SHARES AMOUNT SHARES AMOUNT Retail Class Shares ------ ------ ------ ------ Issued from the sale of shares 5,683,465 $ 95,293,818 2,592,120 $ 68,236,170 Issued in connection with the reinvestment of distributions................ 262,109 3,619,447 0 0 Redeemed...................... (2,787,519) (44,140,825) (358,545) (9,601,016) ---------- ------------ ---------- ------------ Net change.................... 3,158,055 $ 54,772,440 2,233,575 $ 58,635,154 ========== ============ ========== ============ SHARES AMOUNT SHARES* AMOUNT* Admin Class Shares ------ ------ ------- ------- Issued from the sale of shares 152,572 $ 2,226,158 7 $ 174 Issued in connection with the reinvestment of distributions................ 3,623 31,778 0 0 Redeemed...................... (11,522) (146,726) 0 0 ---------- ------------ ---------- ------------ Net change.................... 144,673 $ 2,111,210 7 $ 174 ========== ============ ========== ============
*From July 31, 2000 (commencement of class operations). Notes to Financial Statements (continued) SEPTEMBER 30, 2001
LOOMIS SAYLES SMALL CAP VALUE FUND ---------------------------------------------------- YEAR ENDED YEAR ENDED SEPTEMBER 30, 2001 SEPTEMBER 30, 2000 ------------------------ -------------------------- SHARES AMOUNT SHARES AMOUNT Institutional Class Shares.... ------ ------ ------ ------ Issued from the sale of shares 2,733,253 $ 57,274,299 3,190,066 $ 59,944,936 Issued in connection with the. reinvestment of distributions. 686,673 13,425,888 375,284 6,439,674 Redeemed...................... (3,111,125) (65,038,822) (10,440,533) (193,537,135) ---------- ------------ ----------- ------------- Net change.................... 308,801 $ 5,661,365 (6,875,183) $(127,152,525) ========== ============ =========== ============= SHARES AMOUNT SHARES AMOUNT Retail Class Shares........... ------ ------ ------ ------ Issued from the sale of shares 2,687,149 $ 56,114,946 2,528,175 $ 45,649,528 Issued in connection with the reinvestment of distributions................ 263,247 5,136,298 102,820 1,765,489 Redeemed...................... (2,584,614) (53,473,174) (2,440,517) (44,447,741) ---------- ------------ ----------- ------------- Net change.................... 365,782 $ 7,778,070 190,478 $ 2,967,276 ========== ============ =========== ============= SHARES AMOUNT SHARES AMOUNT Admin Class Shares............ ------ ------ ------ ------ Issued from the sale of shares 556,390 $ 11,675,978 398,777 $ 7,378,041 Issued in connection with the reinvestment of distributions................ 23,780 462,909 3,646 62,683 Redeemed...................... (308,550) (6,455,496) (124,340) (2,321,148) ---------- ------------ ----------- ------------- Net change.................... 271,620 $ 5,683,391 278,083 $ 5,119,576 ========== ============ =========== =============
LOOMIS SAYLES VALUE FUND ----------------------------------------------- YEAR ENDED YEAR ENDED SEPTEMBER 30, 2001 SEPTEMBER 30, 2000 --------------------- ------------------------ SHARES AMOUNT SHARES AMOUNT Institutional Class Shares ------ ------ ------ ------ Issued from the sale of shares.... 713,679 $11,027,548 550,258 $ 8,139,639 Issued from the closing of Retail Class Shares.............. 18,520 286,694 0 0 Issued in connection with the reinvestment of distributions.................... 25,561 400,025 491,545 7,448,228 Redeemed.......................... (478,437) (7,399,204) (2,510,635) (36,184,566) -------- ----------- ---------- ------------ Net change........................ 279,323 $ 4,315,063 (1,468,832) $(20,596,699) ======== =========== ========== ============ SHARES* AMOUNT* SHARES AMOUNT Retail Class Shares ------- ------- ------ ------ Issued from the sale of shares.... 2,369 $ 36,500 15,686 $ 235,566 Issued in connection with the reinvestment of distributions.................... 158 2,465 3,702 55,887 Redeemed.......................... (1,349) (20,774) (38,705) (588,598) Redeemed from the closing of Retail Class Shares........... (18,556) (286,694) 0 0 -------- ----------- ---------- ------------ Net change........................ (17,378) $ (268,503) (19,317) $ (297,145) ======== =========== ========== ============
*The Value Fund Retail Class liquidated on December 18, 2000. [Graphic] Loomis Sayles Equity Funds 117 Notes to Financial Statements (continued) SEPTEMBER 30, 2001
LOOMIS SAYLES WORLDWIDE FUND ---------------------------------------- YEAR ENDED YEAR ENDED SEPTEMBER 30, 2001 SEPTEMBER 30, 2000 ------------------- ------------------- SHARES AMOUNT SHARES AMOUNT Institutional Class Shares ------ ------ ------ ------ Issued from the sale of shares... 45,880 $ 429,514 74,658 $1,047,957 Issued from the closing of Retail Class Shares.................... 83,837 780,527 0 0 Issued in connection with the reinvestment of distributions... 274,557 2,619,237 48,902 580,451 Redeemed......................... (98,649) (924,695) (30,118) (413,407) ------- ---------- ------- ---------- Net change....................... 305,625 $2,904,583 93,442 $1,215,001 ======= ========== ======= ========== SHARES* AMOUNT* SHARES AMOUNT Retail Class Shares ------- ------- ------ ------ Issued from the sale of shares... 8,045 $ 91,281 56,422 $ 799,135 Issued in connection with the reinvestment of distributions... 24,389 231,591 989 11,700 Redeemed......................... (11,679) (130,066) (7,661) (105,323) Redeemed from the closing of Retail Class Shares............. (84,018) (780,527) 0 0 ------- ---------- ------- ---------- Net change....................... (63,263) $ (587,721) 49,750 $ 705,512 ======= ========== ======= ==========
*The Worldwide Fund Retail Class liquidated on December 18, 2000. 7. Change in Accounting Principle| In November 2000, the American Institute of Certified Public Accountants (AICPA) issued a revised AICPA Audit and Accounting Guide, Audits of Investment Companies (the "Guide"), which is effective for fiscal years beginning after December 15, 2000. The revised Guide will require funds to amortize premiums and discounts for fixed-income securities. Upon initial adoption, the Funds will be required to adjust the cost of its fixed-income securities by the cumulative amount of amortization that would have been recognized had the amortization been in effect from the purchase date of each holding. Adopting this accounting principle will not affect the Funds' net asset values, but will change the classification of certain amounts between interest income and realized and unrealized gain/loss. Report of Independent Accountants To the Board of Trustees and Shareholders of the Loomis Sayles Equity Funds: In our opinion, the accompanying statements of assets and liabilities, including the portfolios of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Loomis Sayles Equity Funds (consisting of the Loomis Sayles Aggressive Growth Fund, Emerging Markets Fund, Global Technology Fund, Growth Fund, International Equity Fund, Research Fund, Small Cap Growth Fund, Small Cap Value Fund, Value Fund (formerly Core Value Fund) and Worldwide Fund) (collectively, the "Funds") at September 30, 2001, the results of each of their operations for the year then ended, the changes in each of their net assets and the financial highlights for each of the periods indicated therein, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at September 30, 2001 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Boston, Massachusetts November 16, 2001 [Graphic] Loomis Sayles Equity Funds 119 2001 U.S. Tax and Distribution Information to Shareholders (Unaudited) Foreign Tax Credits| The International Equity Fund has made an election under Internal Revenue Code Section 853 to pass through foreign taxes paid by the Fund to its shareholders. For the year ended September 30, 2001, the total amount of foreign taxes that will be passed through to shareholders and the foreign source income for information reporting purposes will be $129,557 and $1,137,286, respectively. Capital Gains Distributions| Pursuant to Internal Revenue Section 852(b), the following Funds paid distributions, which have been designated as capital gains distributions for the fiscal year ended September 30, 2001:
FUND DOLLAR AMOUNT ---- ------------- Aggressive Growth Fund $ 1,989,045 Growth Fund 5,102,260 International Equity Fund 1,787,621 Small Cap Growth Fund 14,245,287 Small Cap Value Fund 887,997 Worldwide Fund 252,333
Corporate Dividends Received Deduction| For the fiscal year ended September 30, 2001, a percentage of dividends distributed by the Funds listed below qualify for the dividends received deduction for corporate shareholders. These percentages are as follows:
QUALIFYING FUND PERCENTAGE ---- ---------- Research Fund 59.17% Small Cap Value Fund 20.39% Value Fund 100.00% Worldwide Fund 2.50%
120 Supplemental Information LOOMIS SAYLES RESEARCH FUND (THE "FUND") SUPPLEMENT DATED NOVEMBER 30, 2001 TO THE EQUITY FUNDS PROSPECTUS DATED FEBRUARY 1, 2001 The Board of Trustees of Loomis Sayles Funds (the "Board") has approved, the creation of a new Retail Class of shares of the Fund. Retail Class shares of the Fund will be identical to Retail Class shares of the other Loomis Sayles Funds with respect to procedures for purchase, redemption or exchange, and will be subject to a distribution fee at an annual rate of up to 0.25% of the net assets attributable to the Fund's Retail Class shares. In addition, the Board recently approved an amendment to the Fund's advisory agreement lowering the advisory fee to 0.50% of the Fund's net assets. As a result of these changes, the following information replaces the information for the Loomis Sayles Research Fund in the "Table of Annual Fund Operating Expenses" on page 25 of the prospectus: ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
TOTAL FEE ANNUAL WAIVER/ MANAGEMENT DISTRIBUTION OTHER OPERATING REIMBURSE- NET LOOMIS SAYLES FUND/CLASS FEE FEE EXPENSES EXPENSES MENT EXPENSES - ---------------------------------------------------------------------------------------- RESEARCH FUND* Institutional Class 0.50% None 2.70% 3.20% 2.35% 0.85% Retail Class 0.50% 0.25% 4.03% 4.78% 3.68% 1.10%
EXAMPLE
FUND/CLASS 1 YEAR 3 YEARS 5 YEARS 10 YEARS -------------------------------------------------------------- LOOMIS SAYLES RESEARCH FUND** Institutional Class $ 87 $ 765 N/A N/A Retail Class $112 $1,108
* Other expenses for the Research Fund are based on estimated amounts for the current fiscal year. ** Expenses shown for each Class include the fee waiver/reimbursement for the first year of each period. The following information replaces the column regarding the Loomis Sayles Research Fund on page 37 of the prospectus.
MANAGEMENT FUND FEE --------------------------------------- Loomis Sayles Research Fund 0.50%***
***Reflects a contractual reduction effective November 30, 2001. Prior to that date, the management fee rate was 0.75%. [Graphic] Loomis Sayles Equity Funds 121 [LOGO] Loomis Sayles LOOMIS SAYLES FUNDS One Financial Center Boston, MA 02111 Telephone: (800) 633-3330 www.loomissayles.com -----END PRIVACY-ENHANCED MESSAGE-----