Capitalization Exposure Key Portfolio Attributes

Thornburg Developing
World Fund
SEPTEMBER 30, 2014
Investment Strategy
Key Portfolio Attributes
Capitalization Exposure
The Fund invests at least 80% of its
assets in equity securities and debt
obligations of developing country
issuers. A developing country issuer
is a company or sovereign entity
that is domiciled or otherwise tied
economically to one or more developing countries. The Fund portfolio
is diversified to include basic value
stocks, companies with consistent
earnings, and emerging franchises.
Portfolio P/E Trailing 12 months*
20.6x
Portfolio Price to Cash Flow*
14.7x
Portfolio Price to Book Value*
3.9x
Median Market Cap*
Small 22.5%
$4.8 B
3-Yr Beta (A shares vs. MSCI EM Index)*
0.83
Holdings
Mid 28.9%
78
Fund Assets
$3.1 B
Cash
6.5%
Large 48.7%
* Source: FactSet
Investment Objective
Small Cap (< $2.5 B); Mid Cap ($2.5–10 B); Large Cap (> $10 B)
The Fund seeks long-term capital
appreciation. There is no guarantee
that the Fund will meet its objectives.
Lewis Kaufman, cfa
1 YR
3 YRS
SINCE
INCEPTION
Without sales charge
-0.69%
4.73%
14.21%
9.75%
With sales charge
-5.15%
0.00%
12.47%
8.71%
Without sales charge
-1.26%
3.98%
13.38%
9.01%
With sales charge
-2.25%
2.98%
13.38%
9.01%
-0.41%
5.20%
14.80%
10.35%
2.43%
4.30%
7.19%
3.21%
C Shares (Incep: 12/16/09)
Portfolio Baskets
Basic Value
31.1%
Consistent Earners
26.9%
Cash
YTD
A Shares (Incep: 12/16/09)
Portfolio Manager
Emerging Franchises
Average Annual Total Returns (as of 9/30/14)
35.5%
6.5%
Basic Value: financially sound companies with
well-established businesses
Consistent Earners: c ompanies which normally
exhibit steady earnings growth, cashflow characteristics and/or dividend growth
Emerging Franchises: c ompanies in the process
of establishing a leading position in a product,
service or market
I Shares (Incep: 12/16/09)
MSCI Emerging Markets Index (Since 12/16/09)
Returns for less than one year are not annualized.
P­ erformance data shown represents past performance and is no guarantee of future results. Investment return and principal value
will fluctuate so shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower
or higher than quoted. For performance current to the most recent month end, visit thornburg.com or call 877-215-1330. The maximum sales charge for the Fund’s A shares is 4.50%. C shares include a 1% contingent deferred sales charge (CDSC) for the first
year only. There is no up-front sales charge for class I shares. The total annual fund operating expenses are as follows: A shares,
1.59%; C shares, 2.40%; I shares, 1.22%. Thornburg Investment Management and/or Thornburg Securities Corporation have contractually agreed to waive fees and reimburse expenses through at least February 1, 2015, for some of the share classes, resulting in net expense ratios of the following: C shares, 2.38%; I shares, 1.09%. For more detailed information on fund expenses and
waivers/reimbursements please see the fund’s prospectus.
Hypothetical Growth of $10,000
$20000
The Fund may invest in shares of companies
through initial public offerings (IPOs). IPOs have
the potential to produce substantial gains and
there is no assurance that the Fund will have continued access to profitable IPOs. As Fund assets
grow, the impact of IPO investments on performance may decline.
$17500
$15000
A Shares
MSCI EM Index
$14,911
$11,632
$12500
$10000
$7500
$5000
$2500
$0
Dec-16-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12
Dec-12
Jun-13
Dec-13
Sep-14
The Hypothetical Growth of $10,000 graph reflects reinvestment of dividends and capital gains, if any, as well as all fees and expenses.
Symbols and Cusips
A Shares
C Shares
I Shares
THDAX
THDCX
THDIX
885-216-408
885-216-507
885-216-606
Important Information
Investments in the Fund carry risks, including possible loss of
principal. Special risks may be associated with investments
outside the United States, especially in emerging markets,
including currency fluctuations, illiquidity, volatility, and political
and economic risk. Investments in small capitalization companies may increase the risk of greater price fluctuations.
Investments in the Fund are not FDIC insured, nor are they
deposits of or guaranteed by a bank or any other entity.
Class I shares may not be available to all investors. Minimum
investments for the I share class may be higher than those for
other classes.
The views expressed are subject to change. Under no circumstances does the information contained within represent a recommendation to buy or sell any security.
Portfolio attributes and holdings can and do vary.
Charts may not add up to 100% due to rounding.
Before investing, carefully consider the Fund’s
investment goals, risks, charges, and
expenses. For a prospectus or summary prospectus containing this and other information,
contact your financial advisor or visit thornburg.com. Read it carefully before investing.
Top Ten Equity Positions
Top Ten Industries
(as of 8/31/14)
(as of 9/30/14)
Siam Commercial Bank plc
2.8%
Software & Services
15.5%
Facebook, Inc.
2.8%
Consumer Services
14.2%
Qualicorp SA
2.7%
Banks
13.8%
Industrial and Commercial Bank of China Ltd.
2.6%
Food & Staples Retailing
5.4%
Visa, Inc.
2.6%
Food, Bev. and Tobacco
5.1%
Galaxy Entertainment Group Ltd.
2.5%
Transportation
5.1%
Kroton Educacional S.A.
2.4%
Energy
4.6%
Mediatek, Inc.
2.3%
Consumer Durables
4.2%
Airports of Thailand Public Company Ltd.
2.2%
Retailing
3.9%
Al Tayyar Travel Group
2.2%
Diversified Financials
3.6%
Top Ten Countries
(as of 9/30/14)
China
15.2%
Thailand
5.4%
United States
11.9%
Mexico
5.2%
Brazil
11.9%
Philippines
5.0%
India
8.2%
Indonesia
4.1%
Taiwan
6.0%
Russia
Emerging Markets Exposure
Highlights from the Quarter
■■
During the third quarter of 2014, the Thornburg Developing World Fund returned
negative 5.82% (for the A shares without sales charge) versus negative 3.50% for the
MSCI Emerging Markets Index. For the 12-month period ended September 30, 2014,
the fund returned positive 4.73% versus positive 4.30% for the index.
■■
While negative returns for the quarter suggest a difficult market environment, the
MSCI Emerging Markets Index in fact rose 5.58% between June 30 and September
3, continuing its bounce from February 2014 lows. It proceeded to surrender these
gains with an 8.51% decline in the final 27 days of the quarter, as renewed dollar
strength returned investor attention to generally deteriorating emerging-market fundamentals and lingering imbalances. Over this same 27-day period, Brazil, Turkey, and
South Africa declined 20.0%, 13.0%, and 10.7% in dollar terms, respectively.
■■
As we reflect on the 22.4% rise in emerging markets from the February lows to the
September highs, it is hard to argue that emerging-markets (EM) fundamentals are
markedly better today than they were then. While policy momentum (i.e., higher
­interest rates) from substantial but troubled EM constituents such as Brazil, Russia,
and South Africa is encouraging in that it helps to address current imbalances, it must
also be said that this momentum is very much anti-growth.
■■
While our upside participation in this particular updraft has been disappointing, it is
worth noting that the Thornburg Developing World Fund outperformed substantially
from the September highs on a relative basis as markets declined (negative 5.58%,
versus negative 8.51% for the MSCI Emerging Markets Index). Moreover, while our
one-year record reflects only modest outperformance in relative terms, it has come
with substantially less volatility than index returns. We remain focused on delivering a
portfolio that can create per-share value over a market cycle while mitigating volatility
for shareholders.
Glossary
Betais a measure of market-related risk. Less than one
means the portfolio is less volatile than the index, while greater than one indicates more volatility than the index.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure
equity market performance of emerging markets. The MSCI
Emerging Markets Index consists of the following 23 emerging
market country indices: Brazil, Chile, China, Colombia, Czech
Republic, Egypt, Greece, Hungary, India, Indonesia, Korea,
Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia,
South Africa, Taiwan, Thailand, Turkey, and United Arab
Emirates.
4.0%
83.1%
Indices do not take into account fees and expenses. Investors
cannot make direct investments in an index.
Please visit thornburg.com/funds for commentary on individual fund holdings.
Thornburg Securities Corporation, Distributor
2300 North Ridgetop Road
Santa Fe, New Mexico 87506
10/22/14
877.215.1330TH2146