1st Quarter 2018

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Volatility has returned to equity markets after an extended period of calm. During the first quarter, we saw U.S. markets rally nearly 10%, then decline 10%, then rally 10% and decline 10% again. Lots of noise but not much progress. Late cycle economic worries are starting to creep into investors' minds as interest-rate hikes will eventually have a tightening effect and we may be starting to see the beginning of wage inflation, which is generally a reliable indicator of the end of a cycle. Geopolitical risks are also ramping with a full-blown trade war a possibility and increased conflict in the Middle East a reality.

Performance

Thornburg Core Growth Fund returned 6.05% (I shares) in the first quarter of 2018, outperforming the Russell 3000 Growth Index return of 1.48% in the period.

The Core Growth portfolio has weathered the volatile beginning of the year quite well so far. The market was pretty mixed with the consumer discretionary and information technology sectors solidly positive to start the year, but the staples, energy, and materials sectors all declining. Our performance was driven more by individual stocks than by our sector exposures. The sectors that drove our outperformance were information technology, health care, and consumer discretionary. Our weights are similar to the benchmark but the performance of our stocks was better. This is not unusual for us, given the concentrated nature of our portfolio.

Leading contributors to performance for the quarter included Netflix, Inc., online real estate listing business Zillow Group, Inc., medical device company DexCom, Inc., Amazon.com, Inc., and Wix.com Ltd., which provides website development solutions.

Amazon and Netflix continued to deliver very strong fundamental results as their well-publicized businesses grow at a high rate.

Over the last few years, Zillow has consolidated the real estate listing market and is in the early stages of monetizing its dominant position.

Wix posted strong quarterly results, growing sales and earnings above market expectations.

DexCom had a bounce-back quarter after concerns around competition brought the stock down during the second half of 2017. DexCom makes a glucose monitoring system for diabetes patients that we believe is the best on the market and will remain so for the foreseeable future.

Principal detractors from performance this quarter were cable and broadband provider Comcast Corp., Facebook, Inc., Monster Beverage Corp. which primarily sells energy drinks, nitrogen and phosphate fertilizer manufacturer CF Industries Holdings, Inc., and Walmart Inc.

After several quarters of subscriber growth surprising positively, quarterly results were disappointing for Comcast. Its interest in acquiring Sky, the U.K. satellite TV company, also seemed to rattle investor confidence.

Sales at Monster Beverage decelerated during the quarter, but we are still excited about the long-term trends in the global energy-drink category.

Facebook shares fell as the company faced scrutiny over data usage and privacy issues.

After strong stock performance in 2017, CF Industries hit a few bumps to start the year. The stock reacts to near-term nitrogen price changes, which can have speculative drivers. We believe over time nitrogen prices will trend higher due to pent up demand, limited supply, and lower exports coming out of China.

Walmart's stock declined after a disappointing quarter for its e-commerce segment. Although it is still a very small piece of the company's overall business, it seems to dominate investor mindshare and drive sentiment.

Outlook

We remain optimistic that global growth can continue to be broad-based and above trend, but we do see a moderation in momentum. Although there are few, if any, overall winners in a trade conflict, we do expect the companies we own in this portfolio to be relatively more insulated in such an event due to the nature of the robust business models with sustainable competitive advantages and secular growth themes we favor.

As always, we do not attempt to time markets or geopolitical events, but rather take a long-term, disciplined approach to investing. Through our fundamentally driven process, we seek to capture the most compelling, high-quality growth stocks.

Thank you for investing alongside us in Thornburg Core Growth Fund.

Performance 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, see the mutual funds performance page or call 877-215-1330. The maximum sales charge for the Fund’s A shares is 4.50%.

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