Mutual Funds

OVERVIEW PERFORMANCE MONTHLY CHARACTERISTICS QUARTERLY CHARACTERISTICS

Intermediate Duration Bond Fund

Effective 5/28/10, the fund, formerly named the Intermediate Duration Fixed Income Fund, changed its name and investment strategy.

The Intermediate Duration Bond Fund seeks to generate superior, long-term, risk-adjusted investment performance relative to the Barclays Capital US Intermediate Government/Credit Bond Index

Portfolio Management

Neil Burke
Rick Raczkowski
Cliff Rowe, CFA

Total Fund Assets (as of 10/31/2011): $64.8 million

Lipper Category: Intermediate Investment Grade Debt Funds

Morningstar Category: Intermediate-Term Bond

Primary Benchmark: Barclays Capital US Intermediate Government/Credit Bond Index

Goal: Seeks above-average total return

Strategy Highlights

Fund aims to add value through strong security selection and sector allocation while seeking to minimize risk
Emphasis on fundamental credit research to add value versus Treasurys in favorable market environments
Looks to add value from all major sectors of the fixed income markets including mortgage-, commercial- and asset-backed securities

Investment Strategy

At purchase securities must be rated investment grade
Weighted average duration of the portfolio is generally 2-5 years, and is managed within a close range to the index
Fund is 100% US dollar

About Risk

Mutual funds that invest in bonds can lose their value as interest rates rise and bond prices usually fall; investor can lose principal
High yield securities are subject to a high degree of market and credit risk. In addition, the secondary market for these securities may lack liquidity which, in turn may adversely affect the value of these securities and the value of the fund
Foreign investments involve special risks including greater economic, political and currency fluctuation risks, which may be even greater in emerging markets

FUND FACTS as of 10/31/2011

Intermediate Duration Bond Fund (R-Class)
Ticker	LSDRX
Fund Inception	1/28/1998
Class Inception	5/28/2010
CUSIP	543495725
Minimum Initial Investment¹	$2,500
Gross Expense Ratio²	1.61%
Net Expense Ratio²	0.65%
Net Asset Value as of 10/31/2011	10.58
30-Day SEC Yield as of 10/31/2011	1.53%
Unsubsidized 30-Day SEC Yield as of 10/31/2011	1.14%
Fact Sheet	Prospectus
Commentary	Fund Report
Fund Application

Intermediate Duration Bond Fund (I-Class)

Ticker	LSDIX
Fund Inception	1/28/1998
Class Inception	1/28/1998
CUSIP	543495709
Minimum Initial Investment¹	$100,000
Gross Expense Ratio²	0.73%
Net Expense Ratio²	0.40%
Net Asset Value as of 10/31/2011	10.56
30-Day SEC Yield as of 10/31/2011	1.78%
Unsubsidized 30-Day SEC Yield as of 10/31/2011	1.55%
Fact Sheet	Prospectus
Commentary	Fund Report
Fund Application

Unsubsidized 30-day SEC yield is calculated using the gross expenses of the fund. Gross expenses do not include any fee waivers or reimbursement.

Investment return and principal value may fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Performance data quoted represents past performance and current returns may be higher or lower. Past performance is no guarantee of future results.

¹ For further detail regarding Minimum Initial Investment, please see the fund prospectus.

² Unlike net expense ratio, gross expense ratio does not reflect any potential reimbursement/waiver of expenses, if any, as stated in the most recent Fund prospectus. Fund expenses and expense reductions are subject to change. Expense reductions are contractual; Class I shares are set to expire 1/31/2012, Class R on 1/31/2012 . Investors should consult the most recent prospectus for more detailed information.

The Barclays Capital US Intermediate Government/Credit Bond Index includes securities which have a remaining maturity of 1-10 years and includes Treasuries (public obligations of the US Treasury that have remaining maturities of more than one year) and agencies (publicly issued debt of US Government agencies, quasi-federal corporations and corporate or foreign debt guaranteed by the US Government), as well as other publicly issued investment grade corporate and non-corporate debentures that meet specified maturity, liquidity, and quality requirements. Indexes are unmanaged, do not incur fees and it is not possible to invest directly in an index.

Before investing, consider the fund's investment objectives, risks, charges, and expenses. You may obtain a prospectus or a summary prospectus, if available, containing this and other information on this web site. Read it carefully.

Primary Benchmark: Barclays Capital US Intermediate Government/Credit Bond Index

Year-to-Date Performance as of 12/5/2011

	R Class	I Class
	4.52%	4.76%

Month-End Performance as of 10/31/2011

Cumulative Total Return	R Class	I Class	Index	Lipper Average
3 month	0.99%	0.95%	1.25%	1.17%
Year-to-date	4.68%	4.80%	5.24%	5.53%

Average Annualized Total Return	R Class	I Class	Index	Lipper Average
1 Year	3.04%	3.20%	3.22%	3.94%
3 Years	11.74%	11.93%	7.63%	10.30%
5 Years	6.61%	6.84%	5.87%	5.57%
10 Years	5.08%	5.37%	4.98%	4.87%

Quarter-End Performance as of 9/30/2011

Cumulative Total Return	R Class	I Class	Index	Lipper Average
3 month	1.79%	1.86%	2.39%	1.90%
Year-to-date	4.15%	4.35%	4.92%	4.76%

Average Annualized Total Return	R Class	I Class	Index	Lipper Average
1 Year	3.00%	3.26%	3.40%	3.77%
3 Years	9.95%	10.17%	7.02%	8.56%
5 Years	6.63%	6.87%	5.92%	5.64%
10 Years	5.16%	5.46%	5.12%	5.00%

Gross Expense Ratio:(R) 1.61%, (I) 0.73%; Net Expense Ratio: (R) 0.65%, (I) 0.40% Expense reductions are contractual and expire on 01/31/12.

Lipper Rankings as of 10/31/2011

	R Class	I Class
1 Year	481/597	467/597
3 Years	N/A	112/510
5 Years	N/A	84/410
10 Years	N/A	95/285
Lipper Category: Intermediate Investment Grade Debt Funds

Morningstar Rankings as of 9/30/2011

	R Class	I Class
1 Year	869/1180	813/1180
3 Years	N/A	201/1026
5 Years	N/A	161/862
10 Years	N/A	203/568
Morningstar Category: Intermediate-Term Bond

Lipper and Morningstar rankings are based on total returns calculated by each ranking entity. Rankings do not take into account sales charges, if applicable, but include reinvestment of dividends and capital gains, if any.

Prior to the inception of Retail Class shares (5/28/10), performance is that of Institutional Class shares, restated to reflect the higher net expenses of Retail Class shares.

Total return assumes reinvestment of dividends and capital gains distributions, if any.

Performance data shown represents past performance and is no guarantee of future results. Investment return and value will vary and you may have a gain or loss when shares are sold. Current performance may be lower or higher than quoted. For most recent month-end performance, visit loomisayles.com. Performance for other share classes will be greater or less than shown based on differences in fees and sales charges. You may not invest directly in an index. Performance for periods less than one year is cumulative, not annualized. Returns reflect changes in share price and reinvestment of dividends and capital gains, if any.

Lipper Analytical Services Inc., a Thomson Reuters Company, is a nationally recognized organization that provides performance information for mutual funds. Copyright 2010 � Reuters. All rights reserved. Any copying, republication or redistribution of Lipper content is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

� 2010 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.

Before investing, consider the fund's investment objectives, risks, charges, and expenses. You may obtain a prospectus or a summary prospectus, if available, containing this and other information on this web site. Read it carefully.

Monthly as of 10/31/2011

Characteristics
Number of Issues	197
Average Maturity	4.67
Weighted Average Duration	3.86
Annual Turnover (9/30/2011)	83%

Currency Distribution
U S Dollars	100.00%

Duration Distribution
Less than 1 Yr.	7.45%
1 to 3 Yrs.	30.28%
3 to 5 Yrs.	30.66%
5 to 7 Yrs.	12.02%
7 to 10 Yrs.	14.12%
10 Yrs. or more	0.77%
Other	0.00%
Cash & Equiv	4.71%

Top Ten Holdings as of 10/31/2011	% Assets
U S TREASURY NOTES	5.0%
U S TREASURY NOTES	4.5%
U S TREASURY NOTES	3.8%
U S TREASURY NOTES	3.6%
U S TREASURY NOTES	3.5%
U S TREASURY NOTES	3.1%
U S TREASURY NOTES	2.7%
NGN 2010-R3 1A	1.8%
U S TREASURY BILLS	1.6%
U S TREASURY NOTES	1.4%
Total	31.0%

Click here for complete holdings

Sector Distribution
Investment Grade Credit	43.05%
US Treasury	30.45%
MBS	8.06%
CMBS	7.98%
ABS	6.16%
High Yield Credit	0.89%
US Agency	0.28%
Cash & Equivalents	3.11%

Country Distribution
United States	94.50%
United Kingdom	1.84%
Canada	1.19%
Luxembourg	0.81%
Netherlands	0.53%
Norway	0.47%
Mexico	0.40%
Ireland	0.25%
Other	0.00%

Maturity Distribution
Less than 1 Yr.	2.57%
1 to 3 Yrs.	26.95%
3 to 5 Yrs.	26.22%
5 to 7 Yrs.	19.26%
7 to 10 Yrs.	18.89%
10 Yrs. or more	1.40%
Other	0.00%
Cash & Equiv	4.71%

Credit Quality
Govt/Agency	36.97%
Aaa	12.32%
Aa	8.79%
A	22.05%
Baa	14.39%
Ba	0.63%
B	0.00%
Caa & Lower	0.13%
Not Rated	0.00%
Cash & Equiv	4.71%

Credit Quality reflects the highest credit rating assigned to individual holdings of the fund among Moody's, S&P or Fitch; ratings are subject to change. The Fund's shares are not rated by any rating agency and no credit rating for Fund shares is implied.

Cash & Equivalents reflects unsettled trades, fees and derivatives. Negative Cash & Equivalents reflects the market value of future trade commitments for the fund. In the Sector, Duration and Maturity distributions, the calculations are based on the specific traits of each security related to that distribution, which can result in variations of the Cash & Equivalents weightings.

Due to rounding, quality, maturity, sector, currency, country and duration totals may not equal 100.00%.

Before investing, consider the fund's investment objectives, risks, charges, and expenses. You may obtain a prospectus or a summary prospectus, if available, containing this and other information on this web site. Read it carefully.

Quarterly as of 9/30/2011

Characteristics	Fund	Index
Number of Issues	193	3998
Average Maturity	4.91	4.31
Weighted Average Duration	4.03	3.88
Annual Turnover (9/30/2011)	83%

Currency Distribution	Fund	Index
U S Dollars	100.00%	100.00%

Duration Distribution	Fund	Index
Less than 1 Yr.	7.83%	3.02%
1 to 3 Yrs.	32.23%	38.94%
3 to 5 Yrs.	26.07%	27.99%
5 to 7 Yrs.	13.03%	18.70%
7 to 10 Yrs.	17.23%	11.36%
10 Yrs. or more	0.79%	0.00%
Other	0.00%	0.00%
Cash & Equiv	2.82%	0.00%

Top Ten Holdings as of 9/30/2011	% Assets
U S TREASURY NOTES	7.2%
U S TREASURY NOTES	4.1%
U S TREASURY NOTES	3.9%
U S TREASURY NOTES	3.8%
U S TREASURY NOTES	3.3%
U S TREASURY NOTES	3.0%
NGN 2010-R3 1A	1.9%
U S TREASURY NOTES	1.6%
FHLMC K013 A2	1.3%
AT&T INC	1.0%
Total	31.0%

Sector Distribution	Fund	Index
Investment Grade Credit	44.56%	34.82%
US Treasury	28.95%	54.74%
MBS	8.90%	0.00%
CMBS	6.88%	0.00%
ABS	6.64%	0.00%
High Yield Credit	0.94%	0.00%
US Agency	0.31%	10.45%
Cash & Equivalents	2.82%	0.00%

Country Distribution	Fund	Index
United States	94.70%	90.31%
United Kingdom	1.95%	1.22%
Luxembourg	0.85%	0.11%
Canada	0.74%	1.84%
Netherlands	0.57%	0.33%
Norway	0.50%	0.16%
Mexico	0.43%	0.50%
Ireland	0.26%	0.00%
Other	0.00%	5.53%

Maturity Distribution	Fund	Index
Less than 1 Yr.	2.56%	1.13%
1 to 3 Yrs.	29.44%	37.95%
3 to 5 Yrs.	22.35%	25.39%
5 to 7 Yrs.	19.25%	17.01%
7 to 10 Yrs.	22.14%	18.53%
10 Yrs. or more	1.44%	0.00%
Other	0.00%	0.00%
Cash & Equiv	2.82%	0.00%

Credit Quality	Fund	Index
Govt/Agency	37.90%	67.61%
Aaa	11.58%	1.96%
Aa	8.36%	6.33%
A	23.26%	13.37%
Baa	15.25%	10.73%
Ba	0.68%	0.00%
B	0.00%	0.00%
Caa & Lower	0.14%	0.00%
Not Rated	0.00%	0.00%
Cash & Equiv	2.82%	0.00%

Credit Quality reflects the highest credit rating assigned to individual holdings of the fund among Moody's, S&P or Fitch; ratings are subject to change. The Fund's shares are not rated by any rating agency and no credit rating for Fund shares is implied.

Cash & Equivalents reflects unsettled trades, fees and derivatives. Negative Cash & Equivalents reflects the market value of future trade commitments for the fund. In the Sector, Duration and Maturity distributions, the calculations are based on the specific traits of each security related to that distribution, which can result in variations of the Cash & Equivalents weightings.

Due to rounding, quality, maturity, sector, currency, country and duration totals may not equal 100.00%.

Before investing, consider the fund's investment objectives, risks, charges, and expenses. You may obtain a prospectus or a summary prospectus, if available, containing this and other information on this web site. Read it carefully.