Legg Mason Investors Trust NCSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-07692

Name of Registrant: Legg Mason Investors Trust, Inc.

Address of Principal Executive Offices: 100 Light Street, Baltimore, MD 21202

Name and address of agent for service:

Richard M. Wachterman, Esq.
Legg Mason & Co., LLC
100 Light Street
Baltimore, MD 21202

Registrant’s telephone number, including area code: (410) 539-0000

Date of fiscal year-end: March 31, 2007

Date of reporting period: September 30, 2006

Item 1. Report to Shareholders.

Semi-Annual Report to Shareholders


		Legg Mason Investors Trust, Inc. September 30, 2006

Semi-Annual Report to Shareholders 1

To Our Shareholders

We are pleased to provide you with Legg Mason Investors Trust’s semi-annual report for American Leading Companies Trust, Balanced Trust, Financial Services Fund and U.S. Small-Capitalization Value Trust, for the six months ended September 30, 2006.

Total returns during various periods ended September 30, 2006 are:


	Total Return^A
	3 Months		1 Year


American Leading Companies Trust
Primary Class		+3.96%		+5.50%
Institutional Class		+4.22%		+6.57%
S&P 500 Stock Composite Index^B		+5.67%		+10.79%
Lipper Large-Cap Value Funds Index^C		+5.81%		+12.59%

Balanced Trust
Primary Class		+2.68%		+4.43%
Financial Intermediary Class		+2.72%		+4.87%
Institutional Class		+2.82%		+4.96%
Lehman Intermediate Government/Credit Bond Index^D		+3.20%		+3.55%
Lipper Balanced Fund Index^E		+3.88%		+8.02%

Financial Services Fund
Primary Class		+5.34%		+12.43%
Financial Intermediary Class		+5.54%		+13.31%
Lipper Financial Services Fund Index^F		+5.32%		+15.61%

U.S. Small-Capitalization Value Trust
Primary Class		+1.31%		+5.17%
Institutional Class		+1.65%		+6.33%
Russell 2000 Index^G		+0.44%		+9.92%

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information for the Primary Class please visit www.leggmasonfunds.com; for the Financial Intermediary and Institutional Classes please call 1-888-425-6432. The investment return and principal value of the Funds will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions. Performance would have been lower if fees had not been waived in various periods. Performance figures for periods shorter than one year represent cumulative figures and are not annualized.

2 Semi-Annual Report to Shareholders

Information about each of the Fund’s performance over longer periods of time is shown in the respective Performance Information sections within this report. For more information about the Fund share classes included in the report, please contact your financial advisor.

The Board of Directors approved the following ordinary income dividends: $0.019 per share of Balanced Trust’s Primary Class, $0.033 per share of Balanced Trust’s Financial Intermediary Class and $0.043 per share of Balanced Trust’s Institutional Class, payable on August 18, 2006, to shareholders of record on August 16, 2006.

Many Primary Class shareholders invest regularly in Fund shares on a dollar cost averaging basis. Most do so by authorizing automatic, monthly transfers of $50 or more from their bank checking or brokerage accounts. Dollar cost averaging is a convenient and sensible way to invest, as it encourages continued purchases over time regardless of fluctuating price levels. Of course, it does not ensure a profit nor protect against declines in the value of your investment. Your financial advisor will be happy to help you establish a dollar cost averaging account should you wish to do so.

Sincerely,

Mark R. Fetting

President

October 23, 2006


^A		Total return measures investment performance in terms of appreciation or depreciation in net asset value per share plus dividends and capital gain distributions. It assumes that dividends and distributions were reinvested at the time they were paid. No adjustment has been made for any income taxes payable by shareholders. Past performance does not predict future performance.

^B		S&P 500 Stock Composite Index — A market capitalization-weighted index, composed of 500 widely held common stocks, that is generally considered representative of the U.S. stock market. It is not possible to invest in an index.

^C		Lipper Large-Cap Value Funds Index — An index comprised of the 30 largest funds in the Lipper universe of 520 large-cap value funds.

^D		Lehman Intermediate U.S. Government/Credit Bond Index — A total return index consisting of investment grade corporate debt issues as well as debt issues of U.S. government agencies and the U.S. Treasury. The debt issues all maintain maturities within a range of 1 to 10 years.

^E		Lipper Balanced Fund Index — An index comprised of the 30 largest funds in the Lipper universe of 796 balanced funds.

^F		Lipper Financial Services Fund Index — An index comprised of the 10 largest funds in the Lipper universe of 131 financial services funds.

^G		Russell 2000 Index — An unmanaged index comprised of the 2,000 smallest companies of the 3,000 largest U.S. companies based on market capitalization.

Semi-Annual Report to Shareholders 3

Expense Example

American Leading Companies Trust

As a shareholder of the Fund, you incur ongoing costs, including management fees, distribution and service (12b-1) fees on Primary Class shares, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested on April 1, 2006, and held through September 30, 2006.

Actual Expenses

The first line for each class in the table below provides information about actual account values and actual expenses for each class. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During the Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each class in the table below provides information about hypothetical account values and hypothetical expenses based on the relevant class’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the class’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples for the relevant class that appear in the shareholder reports of other funds.


	Beginning		Ending		Expenses Paid^A
	Account		Account		During the
	Value		Value		Period
	4/1/06		9/30/06		4/1/06 to 9/30/06

Primary Class:
Actual	$	1,000.00	$	999.20	$	9.20
Hypothetical (5% return before expenses)		1,000.00		1,015.87		9.27
Institutional Class:
Actual	$	1,000.00	$	1,004.60	$	4.02
Hypothetical (5% return before expenses)		1,000.00		1,021.06		4.05

^A These calculations are based on expenses incurred in the most recent fiscal half-year. The dollar amount shown as “Expenses Paid” is equal to the annualized expense ratios of 1.84% and 0.80% for the Primary Class and Institutional Class respectively, multiplied by the average values over the period, multiplied by the number of days in the most recent fiscal half-year (183) and divided by 365.

4 Semi-Annual Report to Shareholders

Performance Information

American Leading Companies Trust

The graphs on the following pages compare the Fund’s total returns to that of a closely matched broad-based securities market index. The graphs illustrate the cumulative total return of an initial $10,000 investment in the Primary Class and an initial $1,000,000 investment in the Institutional Class, for the periods indicated. The lines for the Fund represent the total return after deducting all Fund investment management and other administrative expenses and the transaction costs of buying and selling securities. The lines representing the securities market index do not include any transaction costs associated with buying and selling securities in the index or other administrative expenses. Both the Fund’s results and the index’s results assume reinvestment of all dividends and distributions.

Total return measures investment performance in terms of appreciation or depreciation in a fund’s net asset value per share, plus dividends and any capital gain distributions. It assumes that dividends and distributions were reinvested at the time they were paid. Average annual returns tend to smooth out variations in a fund’s return, so that they differ from actual year-to-year results.

Semi-Annual Report to Shareholders 5

Growth of a $10,000 Investment — Primary Class

(AMERICAN LEADING COMPANIES TRUST GRAPH)

Periods Ended September 30, 2006


	Cumulative		Average Annual
	Total Return		Total Return
One Year		+5.50%		+5.50%
Five Years		+47.39%		+8.07%
Ten Years		+129.68%		+8.67%

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information please visit www.leggmasonfunds.com. The investment return and principal value of the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions. Performance would have been lower if fees had not been waived in various periods.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

6 Semi-Annual Report to Shareholders

Performance Information — Continued

Growth of a $1,000,000 Investment — Institutional Class

Periods Ended September 30, 2006


	Cumulative		Average Annual
	Total Return		Total Return
One Year		+6.57%		+6.57%
Five Years		+55.25%		+9.20%
Life of Class*		+36.13%		+6.00%
* Inception date: June 14, 2001

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information please call 1-888-425-6432. The investment return and principal value of the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions. Performance would have been lower if fees had not been waived in various periods.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

^A Index returns are for periods beginning May 31, 2001.

Semi-Annual Report to Shareholders 7

Portfolio Composition (As of September 30, 2006)^B

(As a percentage of the portfolio)

Top Ten Holdings (As of September 30, 2006)


	% of
Security	Net Assets

J.P. Morgan Chase & Co.		4.5%
Altria Group, Inc.		3.9%
UnitedHealth Group Incorporated		3.9%
Tyco International Ltd.		3.6%
WellPoint Inc.		3.2%
Citigroup Inc.		3.0%
Sprint Nextel Corporation		2.9%
American International Group, Inc.		2.6%
Lloyds TSB Group plc		2.5%
Pulte Homes, Inc.		2.5%

^BThe Fund is actively managed. As a result, the composition of its portfolio holdings and sectors is subject to change at any time.

8 Semi-Annual Report to Shareholders

Performance Information — Continued

Selected Portfolio Performance^C


Strongest performers for the quarter ended September 30, 2006^D

1.	Symantec Corporation	+36.9%
2.	The TJX Companies, Inc.	+23.0%
3.	Pfizer Inc.	+21.9%
4.	Lockheed Martin Corporation	+20.4%
5.	The DIRECTV Group, Inc.	+19.3%
6.	Microsoft Corporation	+17.8%
7.	Hewlett-Packard Company	+16.1%
8.	Morgan Stanley	+15.8%
9.	Merrill Lynch & Co., Inc.	+12.8%
10.	XL Capital Ltd.	+12.7%


Weakest performers for the quarter ended September 30, 2006^D

1.	Yahoo! Inc.	–23.4%
2.	Newmont Mining Corporation	–19.1%
3.	United States Steel Corporation	–17.5%
4.	Amazon.com, Inc.	–17.0%
5.	Baker Hughes Incorporated	–16.5%
6.	Sprint Nextel Corporation	–14.1%
7.	Alcoa Inc.	–12.9%
8.	Boston Scientific Corporation	–12.2%
9.	Caterpillar Inc.	–11.3%
10.	Transocean Inc.	–8.8%

Portfolio Changes


Securities added during the quarter		Securities sold during the quarter
None		Duke Energy Corporation
		Eastman Kodak Company
		Liberty Media Holding Corp – Interactive

^C Individual security performance is measured by the change in the security’s price; for stocks, dividends are assumed to be reinvested at the time they were paid.

^D Securities held for the entire quarter.

Semi-Annual Report to Shareholders 9

Portfolio of Investments

American Leading Companies Trust

September 30, 2006 (Unaudited)

(Amounts in Thousands)


	Shares/Par		Value

Common Stocks and Equity Interests — 99.8%
Consumer Discretionary — 16.8%
Household Durables — 4.7%
Centex Corporation		300	$	15,786
Koninklijke (Royal) Philips Electronics N.V. – ADR		63		2,206
Pulte Homes, Inc.		600		19,116

				37,108

Internet and Catalog Retail — 4.6%
Amazon.com, Inc.		425		13,651	^A
Expedia, Inc.		625		9,800	^A
IAC/InterActiveCorp		425		12,223	^A

				35,674

Media — 3.4%
The DIRECTV Group, Inc.		900		17,712	^A
Time Warner Inc.		480		8,750

				26,462

Specialty Retail — 4.1%
The Home Depot, Inc.		400		14,508
The TJX Companies, Inc.		630		17,659

				32,167

Consumer Staples — 5.8%
Beverages — 1.0%
The Pepsi Bottling Group, Inc.		225		7,987


Food and Staples Retailing — 0.7%
Wal-Mart Stores, Inc.		100		4,932


Household Products — 0.2%
Kimberly-Clark Corporation		25		1,634

10 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

American Leading Companies Trust — Continued


	Shares/Par		Value

Consumer Staples — Continued

Tobacco — 3.9%
Altria Group, Inc.		400	$	30,620

Energy — 4.1%
Energy Equipment and Services — 0.9%
Baker Hughes Incorporated		36		2,455
Transocean Inc.		60		4,394	^A

				6,849

Oil, Gas and Consumable Fuels — 3.2%
Anadarko Petroleum Corporation		134		5,873
Apache Corporation		97		6,131
Devon Energy Corporation		150		9,473
Exxon Mobil Corporation		30		2,013
Royal Dutch Shell PLC		24		1,586

				25,076

Financials — 23.4%
Capital Markets — 1.3%
Merrill Lynch & Co., Inc.		70		5,475
Morgan Stanley		70		5,104

				10,579

Commercial Banks — 2.5%
Lloyds TSB Group plc		1,950		19,691


Diversified Financial Services — 9.8%
Bank of America Corporation		343		18,396
Citigroup Inc.		465		23,097
J.P. Morgan Chase & Co.		752		35,314

				76,807

Insurance — 5.5%
American International Group, Inc.		300		19,878
The St. Paul Travelers Companies, Inc.		300		14,067
XL Capital Ltd.		127		8,711

				42,656

Semi-Annual Report to Shareholders 11


	Shares/Par		Value

Financials — Continued

Thrifts and Mortgage Finance — 4.3%
Countrywide Financial Corporation		450	$	15,768
MGIC Investment Corporation		75		4,498
Washington Mutual, Inc.		300		13,041

				33,307

Health Care — 13.6%
Health Care Equipment and Supplies — 1.0%
Boston Scientific Corporation		550		8,134	^A


Health Care Providers and Services — 9.1%
Health Net Inc.		370		16,102	^A
UnitedHealth Group Incorporated		616		30,292
WellPoint Inc.		323		24,880	^A

				71,274

Pharmaceuticals — 3.5%
Johnson & Johnson		180		11,689
Pfizer Inc.		540		15,315

				27,004

Industrials — 10.5%
Aerospace and Defense — 4.2%
General Dynamics Corporation		216		15,481
Lockheed Martin Corporation		200		17,212

				32,693

Industrial Conglomerates — 5.1%
General Electric Company		340		12,002
Tyco International Ltd.		1,000		27,990

				39,992

Machinery — 1.2%
Caterpillar Inc.		60		3,948
Deere & Company		60		5,034

				8,982

12 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

American Leading Companies Trust — Continued


	Shares/Par		Value

Information Technology — 18.3%
Communications Equipment — 2.2%
Nokia Oyj – ADR		875	$	17,229


Computers and Peripherals — 4.9%
Dell Inc.		550		12,562	^A
Hewlett-Packard Company		350		12,841
International Business Machines Corporation		152		12,455

				37,858

Internet Software and Services — 3.1%
eBay Inc.		400		11,344	^A
Yahoo! Inc.		510		12,893	^A

				24,237

IT Services — 1.0%
Accenture Ltd.		250		7,928


Semiconductors and Semiconductor Equipment — 4.2%
Applied Materials, Inc.		550		9,751
Intel Corporation		800		16,456
Texas Instruments Incorporated		200		6,650

				32,857

Software — 2.9%
Microsoft Corporation		405		11,069
Symantec Corporation		550		11,704	^A

				22,773

Materials — 2.2%
Metals and Mining — 2.2%
Alcoa Inc.		100		2,804
Newmont Mining Corporation		115		4,916
United States Steel Corporation		160		9,229

				16,949

Semi-Annual Report to Shareholders 13


	Shares/Par		Value

Telecommunication Services — 4.1%
Wireless Telecommunication Services — 4.1%
ALLTEL Corporation		180	$	9,990
Sprint Nextel Corporation		1,300		22,295

				32,285

Utilities — 1.0%
Multi-Utilities — 1.0%
Dominion Resources, Inc.		100		7,649


Total Common Stocks and Equity Interests (Identified Cost — $519,745)				779,393


Repurchase Agreements — 0.2%

Bank of America 5.32%, dated 9/29/06, to be repurchased at $639 on 10/2/06 (Collateral: $615 Federal Home Loan Bank bonds, 5.5%, due 7/15/36, value $655)	$	639		639

Goldman Sachs Group, Inc. 5.29%, dated 9/29/06, to be repurchased at $639 on 10/2/06 (Collateral: $659 Fannie Mae bonds, 5.5%, due 4/1/36, value $656)		639		639


Total Repurchase Agreements (Identified Cost — $1,278)				1,278


Total Investments — 100.0% (Identified Cost — $521,023)				780,671
Other Assets Less Liabilities — N.M.				142


Net Assets —100.0%			$	780,813

^A Non-income producing.

ADR — American Depository Receipt.

N.M. — Not meaning

See notes to financial statements.

14 Semi-Annual Report to Shareholders

Statement of Assets and Liabilities

American Leading Companies Trust

September 30, 2006 (Unaudited)

(Amounts in Thousands)


Assets:
Investment securities at market value (Identified Cost – $519,745)			$	779,393
Short-term securities at value (Identified Cost – $1,278)				1,278
Receivable for fund shares sold				684
Receivable for securities sold				1,576
Interest and dividends receivable				939
Foreign tax receivable				2
Other assets				7

Total assets				783,879
Liabilities:
Payable for fund shares repurchased	$	1,937
Accrued management fee		448
Accrued distribution fee		614
Accrued expenses		67

Total liabilities				3,066

Net Assets			$	780,813

Net assets consist of:
Accumulated paid-in capital applicable to:
31,121 Primary Class shares outstanding			$	471,121
1,205 Institutional Class shares outstanding				22,069
Accumulated net investment loss				(950	)
Undistributed net realized gain on investments				28,933
Unrealized appreciation of investments				259,640

Net Assets			$	780,813

Net Asset Value Per Share:
Primary Class			$	24.12

Institutional Class			$	24.93

See notes to financial statements.

Semi-Annual Report to Shareholders 15

Statement of Operations

American Leading Companies Trust

For the Six Months Ended September 30, 2006 (Unaudited)

(Amounts in Thousands)


Investment Income:
Dividends	$	5,778	^A
Interest		268

Total income				$	6,046

Expenses:
Management fees		2,730
Distribution and service fees:
Primary Class		3,707
Audit and legal fees		24
Custodian fees		63
Directors’ fees and expenses		26
Registration fees		24
Reports to shareholders		101
Transfer agent and shareholder servicing expense:
Primary Class		260
Institutional Class		7
Other expenses		15

		6,957
Less: Compensating balance credits		—	^B

Total expenses					6,957

Net Investment Loss					(911	)

Net Realized and Unrealized Gain/(Loss) on Investments:
Realized gain on investments		29,075	^C
Change in unrealized appreciation/(depreciation) of investments		(28,714	)

Net Realized and Unrealized Gain on Investments					361


Change in Net Assets Resulting From Operations				$	(550	)

^A Net of foreign taxes withheld of $6.

^B Amount less than $1.

^C See Note 1, Commission Recapture, in the notes to financial statements.

See notes to financial statements.

16 Semi-Annual Report to Shareholders

Statement of Changes in Net Assets

American Leading Companies Trust

(Amounts in Thousands)


	For the			For the
	Six Months			Year
	Ended			Ended
	9/30/06			3/31/06

	(Unaudited)
Change in Net Assets:
Net investment income/(loss)	$	(911	)	$	638
Net realized gain on investments		29,075			22,746
Change in unrealized appreciation/(depreciation) of investments		(28,714	)		63,002


Change in net assets resulting from operations		(550	)		86,386
Distributions to shareholders:
From net investment income:
Primary Class		(442	)		—
Institutional Class		(122	)		(91	)
From net realized gain on investments:
Primary Class		(12,811	)		—
Institutional Class		(671	)		—
Change in net assets from Fund share transactions:
Primary Class		6,971			21,783
Institutional Class		(10,668	)		15,623


Change in net assets		(18,293	)		123,701
Net Assets:
Beginning of period		799,106			675,405


End of period	$	780,813		$	799,106


Under/(over) distributions of net investment income	$	(950	)	$	525

See notes to financial statements.

Semi-Annual Report to Shareholders 17

Financial Highlights

American Leading Companies Trust

Contained below is per share operating performance data for a share of common stock outstanding, total investment return, ratios to average net assets and other supplemental data. This information has been derived from information provided in the financial statements.

Primary Class:


	Six Months
	Ended
	September 30,			Years Ended March 31,
	2006			2006		2005			2004			2003		2002

	(Unaudited)

Net asset value, beginning of period		$24.59			$21.85		$19.85			$14.54			$18.13		$18.28


Investment operations:
Net investment income/(loss)		(.03)			.01		—	^A		.01			(.01)		(.08)
Net realized and unrealized gain/(loss) on investments		(.02)			2.73		2.01			5.30			(3.58)		(.07)


Total from investment operations		(.05)			2.74		2.01			5.31			(3.59)		(.15)


Distributions:
From net investment income		(.01)			—		(.01)			—	^B		—		—
From net realized gain on investments		(.41)			—		—			—			—		—


Total distributions		(.42)			—		(.01)			—			—		—


Net asset value, end of period		$24.12			$24.59		$21.85			$19.85			$14.54		$18.13


Total return		(.08)%	^C		12.54%		10.12%			36.54%			(19.80)%		(.82)%

Ratios to Average Net Assets:^D
Total expenses		1.84%	^E		1.86%		1.88%			1.90%			1.92%		1.93%
Expenses net of waivers, if any		1.84%	^E		1.86%		1.88%			1.90%			1.92%		1.93%
Expenses net of all reductions		1.84%	^E		1.86%		1.88%			1.90%			1.92%		1.93%
Net investment income/(loss)		(.28)%	^E		.04%		(.01)%			.05%			(.05)%		(.47)%

Supplemental Data:
Portfolio turnover rate		10.9%	^C		14.3%		19.4%			19.6%			19.0%		22.7%

Net assets, end of period (in thousands)		$750,779			$757,630		$654,019			$585,295			$410,331		$551,061

^A $(.001) per share.

^B $(.003) per share.

^C Not annualized.


^D	Total expenses reflects operating expenses prior to any voluntary expense waivers and/or compensating balance credits. Expenses net of waivers reflects total expenses before compensating balance credits but net of any voluntary expense waivers. Expenses net of all reductions reflects expenses less any compensating balance credits and/or voluntary expense waivers.

^E Annualized.

See notes to financial statements.

18 Semi-Annual Report to Shareholders

Financial Highlights — Continued

Institutional Class:


	Six Months
	Ended
	September 30,			Years Ended March 31,
	2006			2006		2005		2004		2003		2002^F

	(Unaudited)
Net asset value, beginning of period		$25.33			$22.34		$20.28		$14.83		$18.27		$19.08


Investment operations:
Net investment income		.16			.22		.21		.20		.15		.09
Net realized and unrealized gain/(loss) on investments		(.07)			2.82		2.06		5.42		(3.59)		(.90)


Total from investment operations		.09			3.04		2.27		5.62		(3.44)		(.81)


Distributions:
From net investment income		(.08)			(.05)		(.21)		(.17)		—		—
From net realized gain on investments		(.41)			—		—		—		—		—


Total distributions		(.49)			(.05)		(.21)		(.17)		—		—


Net asset value, end of period		$24.93			$25.33		$22.34		$20.28		$14.83		$18.27


Total return		.46%	^C		13.63%		11.21%		37.96%		(18.83)%		(4.25)%	^C

Ratios to Average Net Assets:^D
Total expenses		.80%	^E		.84%		.90%		.85%		.87%		.87%	^E
Expenses net of waivers, if any		.80%	^E		.84%		.90%		.85%		.87%		.87%	^E
Expenses net of all reductions		.80%	^E		.84%		.90%		.85%		.87%		.87%	^E
Net investment income		.75%	^E		1.09%		.99%		1.14%		1.02%		.62%	^E

Supplemental Data:
Portfolio turnover rate		10.9%	^C		14.3%		19.4%		19.6%		19.0%		22.7%	^C
Net assets, end of period (in thousands)		$30,034			$41,476		$21,386		$16,996		$8,729		$9,649

^F For the period June 14, 2001 to March 31, 2002.

See notes to financial statements.

Semi-Annual Report to Shareholders 19

Expense Example

Balanced Trust

As a shareholder of the Fund, you incur ongoing costs, including management fees, distribution and service (12b-1) fees on Primary and Financial Intermediary Class shares, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested on April 1, 2006, and held through September 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning		Ending		Expenses Paid^A
	Account		Account		During the
	Value		Value		Period
	4/1/06		9/30/06		4/1/06 to 9/30/06

Primary Class
Actual	$	1,000.00	$	1,017.00	$	9.35
Hypothetical (5% return before expenses)		1,000.00		1,015.79		9.35
Financial Intermediary Class
Actual	$	1,000.00	$	1,018.90	$	6.83
Hypothetical (5% return before expenses)		1,000.00		1,018.30		6.83
Institutional Class
Actual	$	1,000.00	$	1,020.50	$	5.57
Hypothetical (5% return before expenses)		1,000.00		1,019.55		5.57

^A These calculations are based on expenses incurred in the most recent fiscal half-year. The dollar amount shown as “Expenses Paid” is equal to the annualized expense ratios of 1.85%, 1.35% and 1.10% for the Primary Class, Financial Intermediary Class and Institutional Class respectively, multiplied by the average values over the period, multiplied by the number of days in the most recent fiscal half-year (183) and divided by 365.

20 Semi-Annual Report to Shareholders

Performance Information

Balanced Trust

The graphs on the following pages compare the Fund’s total returns to that of two closely matched broad-based securities market indices. The graphs illustrate the cumulative total return of an initial $10,000 investment in the Primary Class and an initial $1,000,000 investment in each of the Financial Intermediary or Institutional Classes, for the periods indicated. The lines for the Fund represent the total return after deducting all Fund investment management and other administrative expenses and the transaction costs of buying and selling securities. The lines representing each securities market index do not include any transaction costs associated with buying and selling securities in the indices or other administrative expenses. Both the Fund’s results and the indices’ results assume reinvestment of all dividends and distributions.

Semi-Annual Report to Shareholders 21

Growth of a $10,000 Investment — Primary Class

Periods Ended September 30, 2006


	Cumulative		Average Annual
	Total Return		Total Return
One Year		+4.43%		+4.43%
Five Years		+25.86%		+4.71%
Life of Class*		+53.08%		+4.35%
* Inception date: October 1, 1996

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information please visit www.leggmasonfunds.com. The investment return and principal value of the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions. Performance would have been lower if fees had not been waived in various periods.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

^A Index returns are for periods beginning September 30, 1996.

22 Semi-Annual Report to Shareholders

Performance Information — Continued

Growth of a $1,000,000 Investment — Financial Intermediary Class

Periods Ended September 30, 2006


	Cumulative		Average Annual
	Total Return		Total Return
One Year		+4.87%		+4.87%
Five Years		+28.91%		+5.21%
Life of Class*		+23.65%		+3.90%
* Inception date: March 16, 2001

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information please call 1-888-425-6432. The investment return and principal value of the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions. Performance would have been lower if fees had not been waived in various periods.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

^B Index returns are for periods beginning March 31, 2001.

Semi-Annual Report to Shareholders 23

Growth of a $1,000,000 Investment — Institutional Class

Periods Ended September 30, 2006


	Cumulative		Average Annual
	Total Return		Total Return
One Year		+4.96%		+4.96%
Five Years		+30.32%		+5.44%
Life of Class*		+25.21%		+4.14%
* Inception date: March 16, 2001

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information please call 1-888-425-6432. The investment return and principal value of the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions. Performance would have been lower if fees had not been waived in various periods.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

24 Semi-Annual Report to Shareholders

Performance Information — Continued

Portfolio Composition (As of September 30, 2006)^C(As a percentage of the portfolio)

Top Ten Holdings (As of September 30, 2006)


	% of
Security	Net Assets

United States Treasury Notes, 3.375% due 11/15/08		2.8%
Citigroup Inc.		2.3%
Fannie Mae		2.2%
Kansas City Southern		2.2%
Questar Corporation		2.2%
Target Corporation		2.1%
Praxair, Inc.		2.0%
EnCana Corp.		1.9%
United States Treasury Notes, 4.25% due 1/15/11		1.9%
Lincoln National Corporation		1.8%

^C The Fund is actively managed. As a result, the composition of its portfolio holdings and sectors is subject to change at any time.

Semi-Annual Report to Shareholders 25

Selected Portfolio Performance^D


Strongest performers for the quarter ended September 30, 2006^E

1.	Microsoft Corporation	+17.8%
2.	Cisco Systems, Inc.	+17.7%
3.	Fannie Mae	+16.9%
4.	McDonald’s Corporation	+16.4%
5.	Target Corporation	+13.3%
6.	The Goldman Sachs Group, Inc.	+12.7%
7.	Abbott Laboratories	+12.1%
8.	Lincoln National Corporation	+10.7%
9.	SYSCO Corporation	+10.1%
10.	Praxair, Inc.	+10.0%


Weakest performers for the quarter ended September 30, 2006^E

1.	Norfolk Southern Corporation	−16.9%
2.	Nabors Industries, Ltd.	−12.0%
3.	EnCana Corp.	−11.1%
4.	Rio Tinto plc – ADR	−8.9%
5.	Capital One Financial Corporation	−7.9%
6.	National-Oilwell Varco Inc.	−7.5%
7.	Lowe’s Companies, Inc.	−7.3%
8.	Dell Inc.	−6.6%
9.	BP plc – ADR	−5.0%
10.	Schlumberger Limited	−4.5%

^D Individual security performance is measured by the change in the security’s price; for stocks, dividends are assumed to be reinvested at the time they were paid.

^E Securities held for the entire quarter.

26 Semi-Annual Report to Shareholders

Performance Information — Continued

Portfolio Changes


Securities added during the quarter		Securities sold during the quarter
Freddie Mac, 4.625%, 5/28/13 Freddie Mac, 5.5%, 9/15/11 Illinois Tool Works Inc. United States Treasury Notes, 4.25%, 1/15/11 United States Treasury Notes, 4.50%, 11/15/15 United Technologies Corporation		Dover Corporation Fannie Mae, 5.50%, 10/1/34 Government National Mortgage Association, 6.00%, 1/15/29 Government National Mortgage Association, 6.00%, 2/15/29 Government National Mortgage Association, 6.00%, 1/15/34 Government National Mortgage Association, 5.50%, 6/15/34 STERIS Corporation United States Treasury Notes, 3.25%, 8/15/07 Wal-Mart Stores, Inc.

Semi-Annual Report to Shareholders 27

Portfolio of Investments

Balanced Trust

September 30, 2006 (Unaudited)

(Amounts in Thousands)


	Shares/Par		Value

Common Stocks and Equity Interests — 65.6%
Consumer Discretionary — 6.9%
Hotels, Restaurants and Leisure — 1.5%
McDonald’s Corporation		20	$	783


Media — 0.9%
The Walt Disney Company		15		476


Multi-Line Retail — 2.1%
Target Corporation		20		1,116


Office Equipment and Supplies — 1.2%
CANON Inc.		12		643


Specialty Retail — 1.2%
Lowe’s Companies, Inc.		22		617

Consumer Staples — 5.8%
Beverages — 1.8%
PepsiCo, Inc.		15		946


Food and Staples Retailing — 1.2%
SYSCO Corporation		19		622


Household Products — 1.7%
Kimberly-Clark Corporation		14		902


Personal Products — 1.1%
Avon Products, Inc.		19		580

28 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

Balanced Trust — Continued


	Shares/Par		Value

Energy — 9.4%
Energy Equipment and Services — 4.7%
Nabors Industries, Ltd.		29	$	848	^A
National-Oilwell Varco Inc.		13		767	^A
Schlumberger Limited		14		856

				2,471

Oil, Gas & Consumable Fuels — 4.7%
BP plc – ADR		10		682
ChevronTexaco Corporation		12		791
EnCana Corp.		22		1,009

				2,482

Financials — 11.2%
Capital Markets — 1.6%
The Goldman Sachs Group, Inc.		5		846


Consumer Finance — 1.5%
Capital One Financial Corporation		10		786


Diversified Financial Services — 2.3%
Citigroup Inc.		24		1,197


Insurance — 1.8%
Lincoln National Corporation		15		956


Thrifts and Mortgage Finance — 4.0%
Fannie Mae		21		1,180
The PMI Group, Inc.		21		933

				2,113

Semi-Annual Report to Shareholders 29


	Shares/Par		Value

Health Care — 10.0%
Biotechnology — 4.1%
Amgen Inc.		11	$	751	^A
MedImmune, Inc.		24		698	^A
Medtronic, Inc.		15		715

				2,164

Health Care Equipment and Supplies — 2.7%
Biomet, Inc.		21		683
DENTSPLY International Inc.		13		385
Kyphon Inc.		10		359	^A

				1,427

Pharmaceuticals — 3.2%
Abbott Laboratories		12		563
Johnson & Johnson		10		643
Teva Pharmaceutical Industries Ltd. – ADR		14		491

				1,697

Industrials — 8.2%
Aerospace/Defense — 2.4%
L-3 Communications Holdings, Inc.		10		752
United Technologies Corporation		8		526

				1,278


Industrial Conglomerates — 1.4%
General Electric Company		21		734


Machinery — 1.0%
Illinois Tool Works Inc.		11		512


Road and Rail — 3.4%
Kansas City Southern		42		1,158	^A
Norfolk Southern Corporation		14		621

				1,779

30 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

Balanced Trust — Continued


	Shares/Par		Value

Information Technology — 9.0%
Communications Equipment — 2.7%
Cisco Systems, Inc.		33	$	750	^A
Nokia Oyj – ADR		35		689

				1,439


Computers and Peripherals — 1.5%
Dell Inc.		34		777	^A


Semiconductors and Semiconductor Equipment — 3.0%
Applied Materials, Inc.		35		612
Intel Corporation		46		946

				1,558

Software — 1.8%
Microsoft Corporation		35		956


Materials — 3.0%
Chemicals — 2.0%
Praxair, Inc.		17		1,029


Metals and Mining — 1.0%
Rio Tinto plc – ADR		3		531


Utilities — 2.1%
Gas Utilities — 2.1%
Questar Corporation		14		1,137

Total Common Stocks and Equity Interests (Identified Cost — $27,249)				34,554

Semi-Annual Report to Shareholders 31


		Maturity	Shares/
	Rate	Date	Par		Value

Corporate Bonds and Notes — 13.5%
Aerospace and Defense — 0.9%
General Dynamics Corporation	4.500%	8/15/10	$	500	$	489


Capital Markets — 0.9%
Merrill Lynch & Co., Inc.	3.700%	4/21/08		500		489


Commercial Banks — 0.6%
Bank of America Corporation	5.125%	11/15/14		330		326


Computers and Peripherals — 0.7%
International Business Machines Corporation	3.800%	2/1/08		350		343


Diversified Financial Services — 1.5%
Citigroup Inc.	3.500%	2/1/08		350		342
First Data Corporation	3.375%	8/1/08		475		460

						802

Electric — 0.9%
General Electric Company	5.000%	2/1/13		450		445

Finance — 3.5%
American Express Credit Corporation	3.000%	5/16/08		575		556
Caterpillar Financial Services Corporation	4.300%	6/1/10		500		486

32 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

Balanced Trust — Continued


		Maturity	Shares/
	Rate	Date	Par		Value

Finance — Continued

John Deere Capital Corporation	3.900%	1/15/08	$	350	$	344
SLM Corporation	6.440%	1/31/14		500		479	^B

						1,865

Food and Staples Retailing — 2.7%
Kroger Company	6.750%	4/15/12		400		420
Safeway Inc.	4.800%	7/16/07		525		522
Wal-Mart Stores, Inc.	4.550%	5/1/13		475		458

						1,400

Oil and Gas — 0.9%
Pacific Gas and Electric Company	4.200%	3/1/11		500		480


Pharmaceuticals — 0.9%
Abbott Laboratories	3.750%	3/15/11		500		472

Total Corporate Bonds and Notes (Identified Cost — $7,251)						7,111


U.S. Government and Agency Obligations — 18.5%
Fixed Rate Securities — 16.9%
Fannie Mae	3.250%	2/15/09		750		722
Fannie Mae	3.875%	2/15/10		250		242
Fannie Mae	4.625%	10/15/14		200		196
Federal Farm Credit Bank	3.750%	4/9/10		475		457
Freddie Mac	3.160%	5/7/07		500		494
Freddie Mac	3.625%	9/15/08		250		244
Freddie Mac	4.500%	11/15/12		350		342
Freddie Mac	4.625%	5/28/13		500		483
Freddie Mac	5.500%	9/15/11		800		820
United States Treasury Notes	3.375%	11/15/08		1,500		1,461
United States Treasury Notes	3.625%	7/15/09		900		877

Semi-Annual Report to Shareholders 33


		Maturity	Shares/
	Rate	Date	Par		Value

Fixed Rate Securities — Continued
United States Treasury Notes	4.000%	2/15/14	$	550	$	529
United States Treasury Notes	4.250%	10/15/10		300		296
United States Treasury Notes	4.250%	1/15/11		1,000		986
United States Treasury Notes	4.375%	11/15/08		500		497
United States Treasury Notes	4.500%	11/15/15		250		247

						8,893


Stripped Securities — 0.7%
United States Treasury STRIPS	0.000%	5/15/13		525		388	^C


Treasury Inflation-Indexed Securities — 0.9%
United States Treasury Inflation-Protected Security	2.000%	1/15/14		496		486	^D

Total U.S. Government and Agency Obligations (Identified Cost — $9,892)						9,767


U.S. Government Agency Mortgage-Backed Securities — 1.8%
Fixed Rate Securities — 1.8%
Fannie Mae	5.000%	7/1/18 to
		1/1/36		823		800
Government National Mortgage Association	7.000%	2/15/28
		to 12/15/31		143		148

Total U.S. Government Agency Mortgage- Backed Securities (Identified Cost — $958)						948

34 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

Balanced Trust — Continued


	Shares/Par		Value

Repurchase Agreements — 0.7%
Bank of America
5.32%, dated 9/29/06, to be repurchased at $189 on 10/2/06 (Collateral: $195 Freddie Mac notes, 4.75%, due 1/19/16, value $193)	$	189	$	189

Goldman Sachs Group, Inc.
5.29%, dated 9/29/06, to be repurchased at $189 on 10/2/06 (Collateral: $195 Fannie Mae bonds, 5.5%, due 4/1/36, value $193)		189		189

Total Repurchase Agreements (Identified Cost — $378)				378


Total Investments — 100.1% (Identified Cost — $45,728)				52,758
Other Assets Less Liabilities — (0.1)%				(27	)


Net Assets — 100.0%			$	52,731

^A Non-income producing.

^B Indexed Security — The rates of interest earned on these securities are tied to the Consumer Price Index or to the London Interbank Offered Rate (“LIBOR”). The coupon rates are the rates as of September 30, 2006.

^C STRIPS — Separate Trading of Registered Interest and Principal of Securities. This is a pre-stripped zero coupon bond that is a direct obligation of the U.S. Treasury.

^D Inflation-Protected Securities — Security whose principal value is adjusted daily or monthly in accordance with changes to the Consumer Price Index for All Urban Consumers. Interest is calculated on the basis of the current adjusted principal value.

ADR — American Depository Receipt.

See notes to financial statements.

Semi-Annual Report to Shareholders 35

Statement of Assets and Liabilities

Balanced Trust

September 30, 2006 (Unaudited)

(Amounts in Thousands)


Assets:
Investment securities at market value (Identified Cost — $45,350)			$	52,380
Short-term securities at value (Identified Cost — $378)				378
Receivable for fund shares sold				31
Dividends and interest receivable				196

Total assets				52,985
Liabilities:
Payable for fund shares repurchased	$	178
Accrued management fee		26
Accrued distribution fee		19
Accrued expenses		31

Total liabilities				254

Net Assets			$	52,731

Net assets consist of:
Accumulated paid-in-capital applicable to:
3,378 Primary Class shares outstanding			$	37,590
476 Financial Intermediary Class shares outstanding				(3,067	)
910 Institutional Class shares outstanding				10,814
Undistributed net investment income				92
Undistributed net realized gain on investments				272
Unrealized appreciation of investments				7,030

Net Assets			$	52,731

Net Asset Value Per Share:
Primary Class				$11.08

Financial Intermediary Class				$11.07

Institutional Class				$11.03

See notes to financial statements.

36 Semi-Annual Report to Shareholders

Statement of Operations

Balanced Trust

For the Six Months Ended September 30, 2006 (Unaudited)

(Amounts in Thousands)


Investment Income:
Dividends	$	220	^A
Interest		462

Total income				$	682
Expenses:
Management fees		203
Distribution and service fees:
Primary Class		144
Financial Intermediary Class		7
Audit and legal fees		21
Custodian fees		27
Directors’ fees and expenses		14
Registration fees		29
Reports to shareholders		27
Transfer agent and shareholder servicing expense:
Primary Class		28
Financial Intermediary Class		2
Institutional Class		1
Other expenses		14

		517
Less: Fees waived		(67	)
Compensating balance credits		—	^B

Total expenses, net of compensating balance credits and fee waivers					450

Net Investment Income					232

Net Realized and Unrealized Gain/(Loss) on Investments:
Realized gain on investments		277
Change in unrealized appreciation/(depreciation) of investments		392

Net Realized and Unrealized Gain on Investments					669


Change in Net Assets Resulting From Operations				$	901

^ANet of foreign taxes withheld of $1.

^BAmount less than $1.

See notes to financial statements.

Semi-Annual Report to Shareholders 37

Statement of Changes in Net Assets

Balanced Trust

(Amounts in Thousands)


	For the			For the
	Six Months			Year
	Ended			Ended
	9/30/06			3/31/06

	(Unaudited)
Change in Net Assets:
Net investment income	$	232		$	492
Net realized gain on investments		277			4,044
Change in unrealized appreciation/(depreciation) of investments		392			488


Change in net assets resulting from operations		901			5,024
Distributions to shareholders:
From net investment income:
Primary Class		(241	)		(248	)
Financial Intermediary Class		(48	)		(208	)
Institutional Class		(106	)		(44	)
From net realized gain on investments:
Primary Class		(1,482	)		(1,947	)
Financial Intermediary Class		(227	)		(772	)
Institutional Class		(383	)		(407	)
Change in net assets from Fund share transactions:
Primary Class		(1,208	)		1,257
Financial Intermediary Class		(958	)		(15,757	)
Institutional Class		329			9,331


Change in net assets		(3,423	)		(3,771	)
Net Assets:
Beginning of period		56,154			59,925


End of period	$	52,731		$	56,154


Undistributed net investment income	$	92		$	255

See notes to financial statements.

38 Semi-Annual Report to Shareholders

Financial Highlights

Balanced Trust

Primary Class:


	Six Months
	Ended
	September 30,			Years Ended March 31,
	2006			2006			2005			2004			2003			2002

	(Unaudited)

Net asset value, beginning of period		$11.41			$11.15			$10.99		$	9.36			$10.97			$11.64


Investment operations:
Net investment income		.04			.07			.08			.10			.13			.11
Net realized and unrealized gain/(loss) on investments		.13			.88			.37			1.66			(1.57)			.02


Total from investment operations		.17			.95			.45			1.76			(1.44)			.13


Distributions:
From net investment income		(.07)			(.08)			(.08)			(.13)			(.10)			(.11)
From net realized gain on investments		(.43)			(.61)			(.21)			—			(.07)			(.69)


Total distributions		(.50)			(.69)			(.29)			(.13)			(.17)			(.80)


Net asset value, end of period		$11.08			$11.41			$11.15		$	10.99			$9.36			$10.97


Total return		1.70	%^A		8.68	%		4.02	%		19.03	%		(13.20)	%		.89	%
Ratios to Average Net Assets:^B
Total expenses		2.13	%^C		2.07	%		2.02	%		1.96	%		2.03	%		2.02	%
Expenses net of waivers, if any		1.85	%^C		1.85	%		1.85	%		1.85	%		1.85	%		1.85	%
Expenses net of all reductions		1.85	%^C		1.85	%		1.85	%		1.85	%		1.85	%		1.85	%
Net investment income		.66	%^C		.64	%		.70	%		.94	%		1.37	%		1.04	%
Supplemental Data:
Portfolio turnover rate		17.5	%^A		23.0	%		42.4	%		42.1	%		29.5	%		55.4	%
Net assets, end of period (in thousands)		$37,416			$39,734			$37,602		$	38,936			$32,914			$36,308

^A Not annualized.


^B	Total expenses reflects operating expenses prior to any voluntary expense waivers and/or compensating balance credits. Expenses net of waivers reflects total expenses before compensating balance credits but net of any voluntary expense waivers. Expenses net of all reductions reflects expenses less any compensating balance credits and/or voluntary expense waivers.

^C Annualized.

See notes to financial statements.

Semi-Annual Report to Shareholders 39

Financial Intermediary Class:


	Six Months
	Ended
	September 30,			Years Ended March 31,
	2006			2006			2005			2004			2003			2002

	(Unaudited)

Net asset value, beginning of period		$11.40			$11.13			$11.00			$9.37		$	10.96			$11.64


Investment operations:
Net investment income		.06			.11			.13			.15			.20			.17
Net realized and unrealized gain/(loss) on investments		.13			.89			.36			1.66			(1.58)			.01


Total from investment operations		.19			1.00			.49			1.81			(1.38)			.18


Distributions:
From net investment income		(.09)			(.12)			(.15)			(.18)			(.14)			(.17)
From net realized gain
on investments		(.43)			(.61)			(.21)			—			(.07)			(.69)


Total distributions		(.52)			(.73)			(.36)			(.18)			(.21)			(.86)


Net asset value, end of period		$11.07			$11.40			$11.13			$11.00		$	9.37			$10.96


Total return		1.89	%^A		9.24	%		4.53	%		19.52	%		(12.72)	%		1.35	%

Ratios to Average Net Assets:^B
Total expenses		1.56	%^C		1.54	%		1.47	%		1.44	%		1.46	%		1.48	%
Expenses net of waivers, if any		1.35	%^C		1.35	%		1.35	%		1.35	%		1.35	%		1.35	%
Expenses net of all reductions		1.35	%^C		1.35	%		1.35	%		1.35	%		1.35	%		1.35	%
Net investment income		1.16	%^C		1.09	%		1.21	%		1.46	%		1.88	%		1.55	%

Supplemental Data:
Portfolio turnover rate		17.5	%^A		23.0	%		42.4	%		42.1	%		29.5	%		55.4	%
Net assets, end of period (in thousands)		$5,273			$6,417			$21,695			$21,812		$	20,182			$26,463

See notes to financial statements.

40 Semi-Annual Report to Shareholders

Financial Highlights — Continued

Balanced Trust — Continued

Institutional Class:


	Six Months
	Ended
	September 30,			Years Ended March 31,
	2006			2006			2005			2004			2003			2002

	(Unaudited)

Net asset value, beginning of period	$	11.37		$	11.13		$	11.01		$	9.38		$	10.98		$	11.64


Investment operations:
Net investment income		.08			.19			.17			.17			.22			.19
Net realized and unrealized gain/(loss) on investments		.13			.81			.36			1.68			(1.59)			.03


Total from investment operations		.21			1.00			.53			1.85			(1.37)			.22


Distributions:
From net investment income		(.12)			(.15)			(.20)			(.22)			(.16)			(.19)
From net realized gain on investments		(.43)			(.61)			(.21)			—			(.07)			(.69)


Total distributions		(.55)			(.76)			(.41)			(.22)			(.23)			(.88)


Net asset value, end of period	$	11.03		$	11.37		$	11.13		$	11.01		$	9.38		$	10.98


Total return		2.05	%^A		9.25	%		4.86	%		19.87	%		(12.58)	%		1.68	%

Ratios to Average Net Assets:^B
Total expenses		1.25	%^C		1.22	%		1.17	%		1.12	%		1.17	%		1.21	%
Expenses net of waivers, if any		1.10	%^C		1.10	%		1.10	%		1.10	%		1.10	%		1.10	%
Expenses net of all reductions		1.10	%^C		1.10	%		1.10	%		1.10	%		1.10	%		1.10	%
Net investment income		1.41	%^C		1.45	%		1.47	%		1.68	%		2.14	%		1.79	%

Supplemental Data:
Portfolio turnover rate		17.5	%^A		23.0	%		42.4	%		42.1	%		29.5	%		55.4	%
Net assets, end of period (in thousands)	$	10,042		$	10,003		$	628		$	499		$	341		$	391

See notes to financial statements.

Semi-Annual Report to Shareholders 41

Expense Example

Financial Services Fund

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning		Ending		Expenses Paid^A
	Account		Account		During the
	Value		Value		Period
	4/1/06		9/30/06		4/1/06 to 9/30/06

Primary Class:
Actual	$	1,000.00	$	1,031.70	$	11.46
Hypothetical (5% return before expenses)		1,000.00		1,013.79		11.36
Financial Intermediary Class:
Actual	$	1,000.00	$	1,035.20	$	7.65
Hypothetical (5% return before expenses)		1,000.00		1,017.55		7.59

^A These calculations are based on expenses incurred in the most recent fiscal half-year. The dollar amount shown as “Expenses Paid” is equal to the annualized expense ratios of 2.25% and 1.50% for the Primary Class and Financial Intermediary Class respectively, multiplied by the average values over the period, multiplied by the number of days in the most recent fiscal half-year (183) and divided by 365.

42 Semi-Annual Report to Shareholders

Performance Information

Financial Services Fund

The graphs on the following pages compare the Fund’s total returns to the S&P 500 Stock Composite Index and the Lipper Financial Services Fund Index. The graphs illustrate the cumulative total return of an initial $10,000 investment in the Primary Class and an initial $1,000,000 investment in the Financial Intermediary Class, for the periods indicated. The lines for the Fund represent the total return after deducting all Fund investment management and other administrative expenses and the transaction costs of buying and selling securities. The lines representing each securities market index do not include any transaction costs associated with buying and selling securities in the indices or other administrative expenses. Both the Fund’s results and the indices’ results assume reinvestment of all dividends and distributions.

Semi-Annual Report to Shareholders 43

Growth of a $10,000 Investment — Primary Class

Periods Ended September 30, 2006


	Cumulative		Average Annual
	Total Return		Total Return
One Year		+12.43%		+12.43%
Five Year		+84.30%		+13.01%
Life of Class*		+103.09%		+9.42%
* Inception date: November 16, 1998

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information please visit www.leggmasonfunds.com. The investment return and principal value of the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions. Performance would have been lower if fees had not been waived in various periods.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

^A Index returns are for periods beginning November 30, 1998.

44 Semi-Annual Report to Shareholders

Performance Information — Continued

Growth of a $1,000,000 Investment — Financial Intermediary Class^B

Periods Ended September 30, 2006


	Cumulative		Average Annual
	Total Return		Total Return
One Year		+13.31%		+13.31%
Five Years		+91.44%		+13.87%
Life of Class*		+115.56%		+10.25%
* Inception date: November 16, 1998

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information please call 1-888-425-6432. The investment return and principal value of the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions. Performance would have been lower if fees had not been waived in various periods.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

^B On July 31, 2004, Class A shares of the Fund were renamed Financial Intermediary Class shares. Class A shares were subject to a maximum initial sales charge of 4.75%. The Financial Intermediary Class does not have an initial sales charge. The returns shown do not reflect the imposition of an initial sales charge.

^C Index returns are for periods beginning November 30, 1998.

Semi-Annual Report to Shareholders 45

Portfolio Composition (As of September 30, 2006)^D(As a percentage of the portfolio)

Top Ten Holdings (As of September 30, 2006)


	% of
Security	Net Assets

Glacier Bancorp, Inc.		3.2%
Texas Regional Bancshares, Inc.		3.2%
North Fork Bancorporation, Inc.		3.0%
Assurant, Inc.		2.8%
Philadelphia Consolidated Holding Corp.		2.7%
Fiserv, Inc.		2.6%
AmerUs Group Co.		2.5%
Cascade Bancorp		2.5%
RLI Corp.		2.4%
Brown & Brown, Inc.		2.4%

^D The Fund is actively managed. As a result, the composition of its portfolio holdings and sectors is subject to change at any time.

46 Semi-Annual Report to Shareholders

Performance Information — Continued

Selected Portfolio Performance ^E


Strongest performers for the quarter ended September 30, 2006^F

1.	Cascade Bancorp	+31.9%
2.	Philadelphia Consolidated Holding Corp.	+30.9%
3.	Online Resources Corporation	+18.5%
4.	Glacier Bancorp, Inc.	+17.4%
5.	AmerUs Group Co.	+16.2%
6.	Hilb, Rogal and Hamilton Company	+14.8%
7.	J.P. Morgan Chase & Co.	+12.7%
8.	Bank of America Corporation	+12.6%
9.	American Safety Insurance Holdings, Ltd.	+10.9%
10.	Lincoln National Corporation	+10.7%


Weakest performers for the quarter ended September 30, 2006^F

1.	CRM Holdings, Ltd.	-28.8%
2.	StanCorp Financial Group, Inc.	-12.3%
3.	Somerset Hills Bancorp	-7.3%
4.	AmericanWest Bancorporation	-6.1%
5.	Hanover Insurance Group Inc.	-6.0%
6.	Gateway Financial Holdings Inc.	-5.5%
7.	Citizens First Bancorp, Inc.	-4.3%
8.	North Fork Bancorporation, Inc.	-4.2%
9.	Financial Federal Corporation	-3.6%
10.	Commercial Bankshares Incorporated	-3.0%

Portfolio Changes


Securities added during the quarter		Securities sold during the quarter
Pacific Continental Corporation		Fidelity Bankshares, Inc. First Horizon National Corporation Harbor Florida Bancshares, Inc. Summit Bancshares, Inc. Summit Bank Corporation

^E Individual security performance is measured by the change in the security’s price; for stocks, dividends are assumed to be reinvested at the time they were paid.

^F Securities held for the entire quarter.

Semi-Annual Report to Shareholders 47

Portfolio of Investments

Financial Services Fund

September 30, 2006 (Unaudited)

(Amounts in Thousands)


	Shares/Par		Value

Common Stocks and Equity Interests — 88.6%
Financials — 84.4%
Banks — 34.9%
Cascade Bancorp		45	$	1,690
Cascade Financial Corporation		63		1,024
Commerce Bancshares, Inc.		30		1,517
Cullen/Frost Bankers, Inc.		20		1,156
First Financial Bankshares, Inc.		20		763
First State Bancorporation		45		1,169
Glacier Bancorp, Inc.		63		2,136
Greater Bay Bancorp		40		1,128
IBERIABANK Corporation		25		1,525
Marshall & Ilsley Corporation		18		861
Mercantile Bankshares Corporation		38		1,360
North Fork Bancorporation, Inc.		70		2,005
Northrim BanCorp Inc.		42		1,109
SunTrust Banks, Inc.		20		1,546
TCF Financial Corporation		50		1,315
Texas Regional Bancshares, Inc.		55		2,115
The Bank Holdings		6		117	^A
Wainwright Bank & Trust Company		84		885

				23,421

Commercial Banks — 14.8%
AmericanWest Bancorporation		50		1,062
Bank of America Corporation		28		1,475
Commercial Bankshares Incorporated		20		713
Epic Bancorp		50		737
First Keystone Corporation		34		674
First Security Group Inc.		25		288
Gateway Financial Holdings Inc.		56		801
Leesport Financial Corporation		2		49
Pacific Continental Corporation		5		95
Riverview Bancorp, Inc.		101		1,368
Somerset Hills Bancorp		48		593
Sussex Bancorp		32		461
TD Banknorth, Inc.		25		708
Zions Bancorporation		12		951

				9,975

48 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

Financial Services Fund — Continued


	Shares/Par		Value

Financials — Continued

Diversified Financial Services — 6.4%
Financial Federal Corporation		23	$	603
Highbury Financial Inc.		150		1,095	^A
J.P. Morgan Chase & Co.		28		1,314
SLM Corporation		25		1,299

				4,311

Insurance — 25.4%
American Safety Insurance Holdings, Ltd.		70		1,281	^A
AmerUs Group Co.		25		1,700
Assurant, Inc.		35		1,869
Brown & Brown, Inc.		52		1,589
CRM Holdings, Ltd.		100		755	^A
Hanover Insurance Group Inc.		22		982
Hilb, Rogal and Hamilton Company		30		1,280
Lincoln National Corporation		25		1,552
Old Republic International Corporation		69		1,523
Philadelphia Consolidated Holding Corp.		45		1,790	^A
RLI Corp.		32		1,625
StanCorp Financial Group, Inc.		25		1,116

				17,062

Savings and Loan Companies — 2.9%
Citizens First Bancorp, Inc.		15		384
United Financial Corp.		29		611
Willow Grove Bancorp, Inc.		60		940

				1,935

Information Technology — 4.2%
Internet Software and Services — 1.6%
Online Resources Corporation		90		1,103	^A


IT Services — 2.6%
Fiserv, Inc.		37		1,742	^A


Total Common Stocks and Equity Interests (Identified Cost — $40,025)				59,549

Semi-Annual Report to Shareholders 49


	Shares/Par		Value

Repurchase Agreements — 11.6%
Bank of America 5.32%, dated 9/29/06, to be repurchased at $3,894 on 10/2/06 (Collateral: $3,865 Federal Home Loan Bank notes, 5.25%, due 9/13/13, value $3,974)	$	3,892	$	3,892

Goldman Sachs Group, Inc. 5.29%, dated 9/29/06, to be repurchased at $3,894 on 10/2/06 (Collateral: $4,008 Fannie Mae bonds, 5.5%, due 4/1/36, value $3,987)		3,892		3,892

Total Repurchase Agreements (Identified Cost — $7,784)				7,784


Total Investments — 100.2% (Identified Cost — $47,809)				67,333
Other Assets Less Liabilities — (0.2)%				(150	)


Net Assets — 100.0%			$	67,183

^A Non-income producing.

See notes to financial statements.

50 Semi-Annual Report to Shareholders

Statement of Assets and Liabilities

Financial Services Fund

September 30, 2006 (Unaudited)

(Amounts in Thousands)


Assets:
Investment securities at market value (Identified Cost — $40,025)			$	59,549
Short-term securities at value (Identified Cost — $7,784)				7,784
Receivable for fund shares sold				15
Dividends and interest receivable				44

Total assets				67,392
Liabilities:
Payable for fund shares repurchased	$	89
Accrued management fee		49
Accrued distribution fee		45
Accrued expenses		26

Total liabilities				209

Net Assets			$	67,183

Net assets consist of:
Accumulated paid-in-capital applicable to:
3,851 Primary Class shares outstanding			$	38,323
582 Financial Intermediary Class shares outstanding				4,690
Accumulated net investment loss				(84	)
Undistributed net realized gain on investments				4,730
Unrealized appreciation of investments				19,524

Net Assets			$	67,183

Net Asset Value Per Share:
Primary Class				$15.00

Financial Intermediary Class				$16.19

See notes to financial statements.

Semi-Annual Report to Shareholders 51

Statement of Operations

Financial Services Fund

For the Six Months Ended September 30, 2006 (Unaudited)

(Amounts in Thousands)


Investment Income:

Dividends	$	551
Interest		96

Total income				$	647

Expenses:

Management fees		333
Distribution and service fees:
Primary Class		285
Financial Intermediary Class		12
Audit and legal fees		18
Custodian fees		22
Directors’ fees and expenses		14
Registration fees		16
Reports to shareholders		23
Transfer agent and shareholder servicing expense:
Primary Class		19
Financial Intermediary Class		1
Other expenses		22

		765
Less: Fees waived		(51	)
Compensating balance credits		—	^A

Total expenses, net of waivers					714

Net Investment Loss					(67	)

Net Realized and Unrealized Gain/(Loss) on Investments:

Realized gain on investments		4,738
Change in unrealized appreciation/(depreciation) of investments		(2,638	)

Net Realized and Unrealized Gain on Investments					2,100


Change in Net Assets Resulting From Operations				$	2,033

^A Amount less than $1.

See notes to financial statements.

52 Semi-Annual Report to Shareholders

Statement of Changes in Net Assets

Financial Services Fund

(Amounts in Thousands)


	For the			For the
	Six Months			Year
	Ended			Ended
	9/30/06			3/31/06

	(Unaudited)
Change in Net Assets:
Net investment loss	$	(67	)	$	(104	)
Net realized gain on investments		4,738			8,887
Change in unrealized appreciation/(depreciation) of investments		(2,638	)		2,106


Change in net assets resulting from operations		2,033			10,889
Distributions to shareholders:
From net realized gain on investments:
Primary Class		(2,728	)		(5,235	)
Financial Intermediary Class		(437	)		(941	)
Change in net assets from Fund share transactions:
Primary Class		(112	)		(1,127	)
Financial Intermediary Class		(635	)		(1,808	)


Change in net assets		(1,879	)		1,778
Net Assets:
Beginning of period		69,062			67,284


End of period	$	67,183		$	69,062


Overdistributions of net investment income	$	(84	)	$	(17	)

See notes to financial statements.

Semi-Annual Report to Shareholders 53

Financial Highlights

Financial Services Fund

Primary Class:


	Six Months
	Ended
	September 30,			Years Ended March 31,
	2006			2006			2005			2004			2003			2002

	(Unaudited)
Net asset value, beginning of period		$15.29			$14.32			$15.44			$11.20		$	12.51			$11.02


Investment operations:
Net investment loss		(.02)			(.04)			(.07)			(.08)			(.08)			(.09)
Net realized and unrealized gain/(loss) on investments		.46			2.44			1.10			4.58			(1.23)			1.58


Total from investment operations		.44			2.40			1.03			4.50			(1.31)			1.49


Distributions:
From net realized gain on investments		(.73)			(1.43)			(2.15)			(.26)			—			—


Total distributions		(.73)			(1.43)			(2.15)			(.26)			—			—


Net asset value, end of period		$15.00			$15.29			$14.32			$15.44		$	11.20			$12.51


Total return		3.17	%^A		17.22	%		6.89	%		40.27	%		(10.47)	%		13.52	%

Ratios to Average Net Assets:^B
Total expenses		2.41	%^C		2.36	%		2.38	%		2.35	%		2.46	%		2.44	%
Expenses net of waivers, if any		2.25	%^C		2.25	%		2.25	%		2.25	%		2.25	%		2.25	%
Expenses net of all reductions		2.25	%^C		2.25	%		2.25	%		2.25	%		2.25	%		2.25	%
Net investment income		(.31)	%^C		(.27)	%		(.50)	%		(.58)	%		(.64)	%		(.69)	%

Supplemental Data:
Portfolio turnover rate		5.9	%^A		24.8	%		28.3	%		29.6	%		38.2	%		28.9	%
Net assets, end of period (in thousands)		$57,755			$58,859			$56,139			$57,398		$	40,367			$45,473

^A Not annualized.


^B	Total expenses reflects operating expenses prior to any voluntary expense waivers and/or compensating balance credits. Expenses net of waivers reflects total expenses before compensating balance credits but net of any voluntary expense waivers. Expenses net of all reductions reflects expenses less any compensating balance credits and/or voluntary expense waivers.

^C	Annualized

See notes to financial statements.

54 Semi-Annual Report to Shareholders

Financial Highlights — Continued

Financial Services Fund

Financial Intermediary Class (formerly Class A shares):


	Six Months
	Ended
	September 30,			Years Ended March 31,
	2006			2006		2005		2004			2003			2002

	(Unaudited)

Net asset value, beginning of period		$16.39			$15.14		$16.10		$11.58			$12.84			$11.22


Investment operations:
Net investment income		.06			.11		.04		.03			.01			.02
Net realized and unrealized gain/(loss) on investments		.47			2.57		1.15		4.75			(1.27)			1.60


Total from investment operations		.53			2.68		1.19		4.78			(1.26)			1.62


Distributions:
From net realized gain on investments		(.73)			(1.43)		(2.15)		(.26)			—			—


Total distributions		(.73)			(1.43)		(2.15)		(.26)			—			—


Net asset value, end of period		$16.19			$16.39		$15.14		$16.10			$11.58			$12.84


Total return		3.52%	^A		18.16%		7.65%		41.37%	^D		(9.81)%	^D		14.44%	^D

Ratios to Average Net Assets:^B
Total expenses		1.61%	^C		1.58%		1.59%		1.55%			1.65%			1.64%
Expenses net of waivers, if any		1.50%	^C		1.50%		1.50%		1.50%			1.50%			1.50%
Expenses net of all reductions		1.50%	^C		1.50%		1.50%		1.50%			1.50%			1.50%
Net investment income		.44%	^C		.47%		.24%		.17%			.12%			.07%

Supplemental Data:
Portfolio turnover rate		5.9%	^A		24.8%		28.3%		29.6%			38.2%			28.9%
Net assets, end of period (in thousands)		$9,428			$10,203		$11,145		$11,793			$9,154			$9,960

^D Excluding sales charge applicable to Class A shares. Sales charges were eliminated beginning July 31, 2004.

See notes to financial statements.

Semi-Annual Report to Shareholders 55

Expense Example

U.S. Small-Capitalization Value Trust

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning		Ending		Expenses Paid^A
	Account		Account		During the
	Value		Value		Period
	4/1/06		9/30/06		4/1/06 to 9/30/06


Primary Class
Actual	$	1,000.00	$	985.00	$	9.95
Hypothetical (5% return before expenses)		1,000.00		1,015.04		10.10
Institutional Class
Actual	$	1,000.00	$	990.20	$	4.94
Hypothetical (5% return before expenses)		1,000.00		1,020.10		5.01

^AThese calculations are based on expenses incurred in the most recent fiscal half-year. The dollar amount shown as “Expenses Paid” is equal to the annualized expense ratios of 2.00% and 0.99% for the Primary Class and Institutional Class respectively, multiplied by the average values over the period, multiplied by the number of days in the most recent fiscal half-year (183) and divided by 365.

56 Semi-Annual Report to Shareholders

Performance Information

U.S. Small-Capitalization Value Trust

Semi-Annual Report to Shareholders 57

Growth of a $10,000 Investment — Primary Class

[U.S. SMALL-CAPITALIZATION VALUE TRUST GRAPH]

Periods Ended September 30, 2006


	Cumulative		Average Annual
	Total Return		Total Return
One Year		+5.17%		+5.17%
Five Years		+101.19%		+15.01%
Life of Class*		+84.47%		+7.66%
* Inception date: June 15, 1998

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information please visit www.leggmasonfunds.com. The investment return and principal value of the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions. Performance would have been lower if fees had not been waived in various periods.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

^A Index returns are for periods beginning May 31, 1998.

58 Semi-Annual Report to Shareholders

Performance Information — Continued

Growth of a $1,000,000 Investment — Institutional Class

Periods Ended September 30, 2006


	Cumulative		Average Annual
	Total Return		Total Return
One Year		+6.33%		+6.33%
Five Years		+112.35%		+16.25%
Life of Class*		+102.61%		+8.90%
* Inception date: June 19, 1998

The performance data quoted represents past performance and does not guarantee future results. The performance stated may have been due to extraordinary market conditions, which may not be duplicated in the future. Current performance may be lower or higher than the performance data quoted. To obtain the most recent month-end performance information please call 1-888-425-6432. The investment return and principal value of the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Calculations assume reinvestment of dividends and capital gain distributions. Performance would have been lower if fees had not been waived in various periods.

The graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

^B Index returns are for periods beginning June 30, 1998.

Semi-Annual Report to Shareholders 59

Portfolio Composition (As of September 30, 2006)^C

(As a percentage of the portfolio)

(U.S. SMALL-CAP VALUE TRUST SECTOR PIE CHART)

Top Ten Holdings (As of September 30, 2006)


	% of
Security	Net Assets

IndyMac Bancorp, Inc.		1.7%
AmerUs Group Co.		1.6%
Odyssey Re Holdings Corp.		1.4%
The Commerce Group, Inc.		1.4%
Jack in the Box Inc.		1.2%
United Auto Group, Inc.		1.1%
SkyWest, Inc.		1.1%
Downey Financial Corp.		1.1%
WPS Resources Corporation		1.1%
WGL Holdings Inc.		1.1%

^C The Fund is actively managed. As a result, the composition of its portfolio holdings and sectors is subject to change at any time.

60 Semi-Annual Report to Shareholders

Performance Information^D — Continued

Selected Portfolio Performance^E


Strongest performers for the quarter ended September 30, 2006^F

1.	Ingles Markets, Incorporated	+56.7%
2.	Gold Kist Inc.	+55.9%
3.	Summa Industries	+50.9%
4.	Key Tronic Corporation	+50.1%
5.	The Talbots, Inc.	+48.6%
6.	TESSCO Technologies Incorporated	+46.9%
7.	Featherlite, Inc.	+43.4%
8.	PETCO Animal Supplies, Inc.	+40.1%
9.	Covansys Corporation	+36.4%
10.	Meadowbrook Insurance Group, Inc.	+35.3%


Weakest performers for the quarter ended September 30, 2006^F

1.	Journal Register Company	–36.6%
2.	Wilsons The Leather Experts Inc.	–35.5%
3.	Spectrum Brands, Inc.	–34.7%
4.	Franklin Electronic Publishers	–33.6%
5.	Mexco Energy Corporation	–33.2%
6.	OmniVision Technologies, Inc.	–32.4%
7.	Aftermarket Technology Corp.	–28.5%
8.	Taylor Capital Group, Inc.	–27.4%
9.	Dynamics Research Corporation	–26.7%
10.	Levitt Corporation	–26.4%

^D Portfolio changes are not reported for U.S. Small-Cap due to the Fund’s high volume of trading.

^E Individual security performance is measured by the change in the security’s price; for stocks, dividends are assumed to be reinvested at the time they were paid.

^F Securities held for the entire quarter.

Semi-Annual Report to Shareholders 61

Portfolio of Investments

U.S. Small-Capitalization Value Trust

September 30, 2006 (Unaudited)

(Amounts in Thousands)


	Shares/Par		Value

Common Stocks and Equity Interests — 98.3%
Auto and Transportation — 8.6%
ABX Air, Inc.		56	$	316	^A
Accuride Corporation		24		264	^A
Aftermarket Technology Corp.		36		645	^A
American Axle & Manufacturing Holdings, Inc.		74		1,235
ArvinMeritor, Inc.		118		1,682
Asbury Automotive Group Inc.		48		989
Bandag, Incorporated		15		624
Bandag, Incorporated – Class A		12		403
Bristow Group, Inc.		17		598	^A
Commercial Vehicle Group, Inc.		22		431	^A
Con-way Inc.		7		323
Dorman Products, Inc.		11		115	^A
ExpressJet Holdings, Inc.		91		599	^A
Featherlite, Inc.		11		72	^A
GulfMark Offshore, Inc.		13		427	^A
Mesa Air Group Inc.		61		469	^A
Modine Manufacturing Company		24		581
Navistar International Corporation		60		1,544	^A
Polaris Industries Inc.		24		1,000
RailAmerica, Inc.		28		309	^A
Republic Airways Holdings Inc.		45		691	^A
SkyWest, Inc.		107		2,616
Supreme Industries, Inc.		14		94
Swift Transportation Co., Inc.		23		553	^A
The Goodyear Tire & Rubber Company		65		947	^A
TRW Automotive Holdings Corp.		35		847	^A
Wabash National Corporation		33		448
Werner Enterprises, Inc.		21		397
YRC Worldwide, Inc.		33		1,222	^A

				20,441

Consumer Discretionary — 22.0%
American Greetings Corporation		89		2,053
Bakers Footwear Group, Inc.		7		87	^A

62 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

U.S. Small-Capitalization Value Trust — Continued


	Shares/Par		Value

Consumer Discretionary — Continued

Belo Corp.		20	$	323
Big 5 Sporting Goods Corporation		24		550
BJ’s Wholesale Club, Inc.		65		1,905	^A
Blyth, Inc.		54		1,321
Borders Group, Inc.		53		1,073
Brown Shoe Company, Inc.		13		450
Cadmus Communications Corporation		4		64
Career Education Corporation		11		250	^A
CBRL Group, Inc.		28		1,116
CEC Entertainment Inc.		5		151	^A
Charming Shoppes, Inc.		60		858	^A
Chromcraft Revington, Inc.		10		101	^A
Claire’s Stores, Inc.		14		400
Columbia Sportswear Company		20		1,133	^A
Conn’s, Inc.		15		309	^A
Convergys Corporation		30		626	^A
CSS Industries, Inc.		18		523
EarthLink, Inc.		159		1,153	^A
Elizabeth Arden, Inc.		9		152	^A
Ethan Allen Interiors Inc.		46		1,591
Finlay Enterprises, Inc.		18		119	^A
Flexsteel Industries, Inc.		5		62
Franklin Electronic Publishers		2		3	^A
Frisch’s Restaurants, Inc.		6		142
Furniture Brands International, Inc.		82		1,563
Genesco Inc.		38		1,320	^A
Global Imaging Systems, Inc.		1		27	^A
Group 1 Automotive, Inc.		42		2,071
Handleman Company		34		254
Hartmarx Corporation		35		235	^A
Hastings Entertainment, Inc.		19		129	^A
Hooker Furniture Corporation		9		136
IKON Office Solutions, Inc.		54		724
InfoSpace, Inc.		19		354	^A
Jack in the Box Inc.		54		2,813	^A
JAKKS Pacific, Inc.		35		615	^A

Semi-Annual Report to Shareholders 63


	Shares/Par		Value

Consumer Discretionary — Continued

Jos. A. Bank Clothiers, Inc.		4	$	120	^A
Journal Register Company		30		168
K-Swiss Inc.		23		679
Labor Ready, Inc.		20		315	^A
Lakeland Industries, Inc.		4		44	^A
Landry’s Restaurants, Inc.		7		214
Lenox Group, Inc.		12		71	^A
Lithia Motors, Inc.		22		534
MarineMax, Inc.		14		344	^A
Mity Enterprises, Inc.		5		89	^A
New York & Company, Inc.		13		169	^A
Pacific Sunwear of California, Inc.		52		787	^A
Perry Ellis International, Inc.		9		287	^A
PETCO Animal Supplies, Inc.		28		811	^A
Pre-Paid Legal Services, Inc.		10		389
Rent-A-Center, Inc.		64		1,886	^A
REX Stores Corporation		17		244	^A
Rocky Brands, Inc		4		42	^A
Ruby Tuesday, Inc.		6		166
Ryan’s Restaurant Group Inc.		27		422	^A
Saga Communications, Inc.		4		32	^A
Schiff Nutrition International, Inc.		11		75	^A
Scholastic Corporation		5		140	^A
Sonic Automotive, Inc.		51		1,175
Spectrum Brands, Inc.		55		464	^A
Speedway Motorsports, Inc.		18		641
Stage Stores, Inc.		45		1,313
Stanley Furniture Company, Inc.		16		350
Steinway Musical Instruments, Inc.		1		25	^A
Strattec Security Corporation		6		237	^A
Tempur-Pedic International Inc.		90		1,540	^A
The Buckle, Inc.		2		91
The Finish Line, Inc.		31		387
The Steak n Shake Company		6		108	^A
The Talbots, Inc.		25		684
The Timberland Company		55		1,594	^A

64 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

U.S. Small-Capitalization Value Trust — Continued


	Shares/Par		Value

Consumer Discretionary — Continued

The Yankee Candle Company, Inc.		26	$	770
Tuesday Morning Corporation		46		633
Tupperware Corporation		79		1,543
UniFirst Corporation		7		206
United Auto Group, Inc.		114		2,677
United Stationers Inc.		4		177	^A
Valassis Communications, Inc.		5		85	^A
Vertrue Incorporated		15		606	^A
Wilsons The Leather Experts Inc.		16		42	^A
Zale Corporation		81		2,239	^A

				52,371

Consumer Staples — 3.3%
Chiquita Brands International, Inc.		71		943
Del Monte Foods Company		207		2,162
Ingles Markets, Incorporated		9		243
M&F Worldwide Corp.		12		182	^A
Maui Land & Pineapple Company, Inc.		4		110	^A
Nash-Finch Company		14		332
Premium Standard Farms, Inc.		19		366
Ruddick Corporation		79		2,067
Smart & Final Inc.		2		36	^A
The J. M. Smucker Company		6		288
Universal Corporation		31		1,121

				7,850

Energy — 2.5%
Alon USA Energy, Inc.		1		18
Brigham Exploration Company		48		327	^A
Encore Acquisition Company		36		876	^A
Energen Corporation		4		147
Energy Partners, Ltd.		13		330	^A
Forest Oil Corporation		14		449	^A
Mexco Energy Corporation		1		8	^A
Pogo Producing Company		7		278
Stone Energy Corporation		46		1,878	^A
The Houston Exploration Company		24		1,335	^A

Semi-Annual Report to Shareholders 65


	Shares/Par		Value

Energy — Continued

The Meridian Resource Corporation		92	$	282	^A
The Oilgear Company		2		26	^A

				5,954

Financials — 37.0%
21st Century Insurance Group		65		976
ACE Cash Express, Inc.		18		529	^A
Advanta Corp.		15		499
Affirmative Insurance Holdings, Inc.		15		221
Alfa Corporation		58		1,005
American Equity Investment Life Holding Company		55		671
American National Bankshares Inc.		10		227
AmerUs Group Co.		54		3,700
Anchor BanCorp Wisconsin, Inc.		37		1,048
Argonaut Group, Inc.		28		884	^A
Arrow Financial Corporation		11		276
Asset Acceptance Capital Corp.		40		642	^A
BancFirst Corporation		13		600
BancorpSouth, Inc.		16		455
Bristol West Holdings Inc.		29		423
California First National Bancorp		7		100
Camden National Corporation		12		478
Chemical Financial Corporation		40		1,201
Chittenden Corporation		7		186
Citizens Banking Corporation		29		754
CNA Surety Corporation		45		899	^A
Columbia Banking System, Inc.		24		765
Community Bank System, Inc.		31		678
Community Trust Bancorp, Inc.		25		932
Corus Bankshares, Inc.		72		1,619
Delphi Financial Group, Inc.		61		2,438
Deluxe Corporation		67		1,146
Dime Community Bancshares		13		197
Direct General Corporation		34		458
Donegal Group Inc. – Class A		7		149
Donegal Group Inc. – Class B		4		66

66 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

U.S. Small-Capitalization Value Trust — Continued


	Shares/Par		Value

Financials — Continued

Downey Financial Corp.		39	$	2,595
Electro Rent Corporation		3		46	^A
F.N.B. Corporation		60		991
FBL Financial Group, Inc.		47		1,586
First Bancorp		7		146
First Community Bancshares, Inc.		12		387
First Financial Corporation		0.2		6
First Financial Holdings, Inc.		19		647
First Financial Service Corporation		6		173
First M&F Corporation		11		198
First Mutual Bancshares, Inc.		6		162
First Place Financial Corp.		16		353
First United Corporation		8		175
Firstbank Corporation		1		27
FirstFed Financial Corp.		26		1,480	^A
Flagstar Bancorp, Inc.		42		615
Flushing Financial Corporation		32		567
FNB Corp.		7		127
FNB Corporation		12		432
Franklin Bank Corporation		23		457	^A
Fremont General Corporation		107		1,496
German American Bancorp		10		141
Great American Financial Resources, Inc.		39		810
Greater Bay Bancorp		13		378
Hanover Insurance Group Inc		23		1,035
Harleysville Group Inc.		19		647
Harleysville National Corporation		12		241
Harrington West Financial Group, Inc.		8		126
HMN Financial, Inc.		6		209
Horace Mann Educators Corporation		45		856
IBERIABANK Corporation		6		358
IndyMac Bancorp, Inc.		97		3,988
Infinity Property & Casualty Corporation		35		1,427
Integra Bank Corporation		5		119
International Bancshares Corporation		23		681
Interpool, Inc.		30		663

Semi-Annual Report to Shareholders 67


	Shares/Par		Value

Financials — Continued

Intersections Inc.		17	$	158	^A
ITLA Capital Corporation		7		392
John H. Harland Company		45		1,637
Lakeland Financial Corporation		11		263
LandAmerica Financial Group, Inc.		29		1,895
MAF Bancorp, Inc.		35		1,448
MainSource Financial Group, Inc.		16		265
Marlin Business Services Corp.		10		203	^A
MBT Financial Corp.		2		34
Meadowbrook Insurance Group, Inc.		48		537	^A
Merchants Bancshares, Inc.		4		99
National Western Life Insurance Company		4		897	^A
NBT Bancorp Inc.		36		829
NCO Group, Inc.		0.1		2	^A
North Central Bancshares, Inc.		2		93
North Valley Bancorp		11		198
Northrim BanCorp Inc.		9		225
Nymagic, Inc.		8		263
OceanFirst Financial Corp.		13		277
Odyssey Re Holdings Corp.		101		3,405
Ohio Casualty Corporation		55		1,427
Old Point Financial Corporation		2		46
Oriental Financial Group Inc.		26		305
PAB Bankshares, Inc.		14		272
Park National Corporation		2		210
Parkvale Financial Corporation		9		279
Penns Woods Bancorp, Inc.		5		179
Peoples Bancorp Inc.		18		518
PFF Bancorp, Inc.		23		859
Presidential Life Corporation		33		743
ProCentury Corp.		12		186
Provident Bankshares Corporation		24		896
Renasant Corporation		12		324
Republic Bancorp, Inc.		119		1,584
Republic First Bancorp, Inc.		13		176	^A
S&T Bancorp, Inc.		8		260

68 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

U.S. Small-Capitalization Value Trust — Continued


	Shares/Par		Value

Financials — Continued

Safety Insurance Group, Inc.		27	$	1,294
Sierra Bancorp		6		186
Simmons First National Corporation		8		244
Sky Financial Group, Inc.		6		142
Southwest Bancorp, Inc.		11		274
StanCorp Financial Group, Inc.		14		625
Stewart Information Services Corporation		29		991
Susquehanna Bancshares, Inc.		22		535
SWS Group, Inc.		8		189
Taylor Capital Group, Inc.		6		164
The Commerce Group, Inc.		113		3,402
The Midland Company		18		765
The Phoenix Companies, Inc.		19		270
Timberland Bancorp, Inc.		6		225
Triad Guaranty Inc.		20		1,021	^A
TriCo Bancshares		14		335
Trustmark Corporation		63		1,990
Unico American Corporation		5		54	^A
United Bankshares, Inc.		18		666
United Community Financial Corp.		32		396
United Fire & Casualty Company		15		457
United Rentals, Inc.		6		139	^A
United Security Bancshares, Inc.		6		162
Univest Corporation of Pennsylvania		10		292
Washington Banking Company		6		106
Washington Federal, Inc.		41		912
Webster Financial Corporation		11		513
West Coast Bancorp		13		397
World Acceptance Corporation		23		990	^A
WSFS Financial Corporation		4		249
Yadkin Valley Financial Corporation		6		96

				88,032

Health Care — 2.2%
Apria Healthcare Group Inc.		71		1,402	^A
Atrion Corporation		2		139

Semi-Annual Report to Shareholders 69


	Shares/Par		Value

Health Care — Continued

Cantel Medical Corp.		17	$	240	^A
Kindred Healthcare, Inc.		50		1,490	^A
LifePoint Hospitals, Inc.		21		735	^A
Magellan Health Services, Inc.		20		856	^A
National Home Health Care Corp.		11		112
National Medical Health Card Systems, Inc.		4		54	^A
Nutraceutical International Corporation		7		101	^A

				5,129

Materials — 6.6%
Ameron International Corporation		15		963
Barnes Group Inc.		19		341
Bluegreen Corporation		36		416	^A
BlueLinx Holdings Inc.		27		252
Building Materials Holding Corporation		47		1,228
Cytec Industries Inc.		1		50
Ennis Business Forms, Inc.		17		357
Georgia Gulf Corporation		33		905
Gibraltar Industries Inc.		38		851
Gold Kist Inc.		9		193	^A
GrafTech International Ltd.		90		527	^A
Griffon Corporation		4		84	^A
Hercules Incorporated		9		134	^A
Key Tronic Corporation		11		62	^A
Lennox International Inc.		41		932
Louisiana-Pacific Corporation		39		739
NN Inc.		18		210
Northwest Pipe Company		7		211	^A
Olin Corporation		77		1,180
PolyOne Corporation		122		1,014	^A
Silgan Holdings Inc.		30		1,127
Simpson Manufacturing Co., Inc.		7		195
The Timken Company		12		369
U.S. Concrete, Inc.		28		182	^A
UAP Holding Corp.		9		190
Universal Forest Products, Inc.		17		853

70 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

U.S. Small-Capitalization Value Trust — Continued


	Shares/Par		Value

Materials — Continued

USEC Inc.		10	$	98
Worthington Industries, Inc.		117		1,993

				15,656

Miscellaneous — 0.6%
FMC Corporation		18		1,121
Gehl Company		7		182	^A
Hawkins, Inc.		4		57

				1,360

Producer Durables — 4.3%
AGCO Corporation		85		2,152	^A
Astec Industries, Inc.		9		220	^A
Beazer Homes USA, Inc.		5		191
Blount International, Inc.		1		7	^A
Briggs & Stratton Corporation		67		1,838
Cohu, Inc.		25		447
Craftmade International, Inc.		9		149
Ducommun Incorporated		8		144	^A
ElkCorp		26		709
Headwaters Incorporated		31		714	^A
Kennametal Inc.		11		600
Kulicke and Soffa Industries, Inc.		41		365	^A
Levitt Corporation		13		158
Photronics, Inc.		27		380	^A
Plantronics, Inc.		34		601
Sigmatron International, Inc.		5		41	^A
Standard Pacific Corp.		1		19
Standex International Corporation		21		580
Summa Industries		7		96
Technology Research Corporation		1		5
United Industrial Corporation		7		396
WCI Communities, Inc.		4		66	^A
WesBanco, Inc.		15		427

				10,305

Semi-Annual Report to Shareholders 71


	Shares/Par		Value

Technology — 2.9%
ADDvantage Technologies Group, Inc.		0.4	$	2	^A
Agilysys, Inc.		15		204
Applix, Inc.		6		50	^A
Bell Microproducts Inc.		30		156	^A
Covansys Corporation		24		418	^A
Dataram Corporation		11		51
Dynamics Research Corporation		12		122	^A
Hutchinson Technology Incorporated		12		252	^A
InterVideo Inc.		10		132	^A
Journal Communications, Inc.		48		540
OmniVision Technologies, Inc.		38		547	^A
PAR Technology Corporation		9		85	^A
PortalPlayer Inc.		5		59	^A
Sensient Technologies Corporation		78		1,519
SpectraLink Corporation		13		103
SYNNEX Corporation		38		879	^A
TESSCO Technologies Incorporated		7		206	^A
TSR, Inc.		7		29
United Online, Inc.		108		1,309
Westell Technologies, Inc.		73		153	^A
Wireless Telecom Group, Inc.		40		90

				6,906

Utilities — 8.3%
Atmos Energy Corporation		37		1,065
Cleco Corporation		22		560
Commonwealth Telephone Enterprises, Inc.		23		965
Duquesne Light Holdings Inc.		12		240
Great Plains Energy Incorporated		73		2,261
Green Mountain Power Corporation		5		180
HickoryTech Corporation		14		95
Iowa Telecommunications Services Incorporated		33		659
New Jersey Resources Corporation		18		863
Nicor Inc.		3		111
North Pittsburgh Systems, Inc.		2		40
Northeast Utilities		8		195

72 Semi-Annual Report to Shareholders

Portfolio of Investments — Continued

U.S. Small-Capitalization Value Trust — Continued


	Shares/Par		Value

Utilities — Continued

Otter Tail Corporation		5	$	135
Peoples Energy Corporation		22		874
Premiere Global Services, Inc.		63		545	^A
Puget Energy, Inc.		79		1,798
South Jersey Industries, Inc.		26		781
The Laclede Group, Inc.		23		725
Vectren Corporation		44		1,184
Westar Energy, Inc.		63		1,486
WGL Holdings Inc.		80		2,517
WPS Resources Corporation		51		2,551

				19,830

Total Common Stocks and Equity Interests (Identified Cost — $194,278)				233,834


Repurchase Agreements — 1.6%
Bank of America 5.32%, dated 9/29/06, to be repurchased at $1,969 on 10/2/06 (Collateral: $2,025 Freddie Mac notes, 4.75%, due 1/19/16, value $2,014)	$	1,968		1,968

Goldman Sachs Group, Inc. 5.29%, dated 9/29/06, to be repurchased at $1,969 on 10/2/06 (Collateral: $2,027 Fannie Mae bonds, 5.5%, due 4/1/36, value $2,017)		1,968		1,968

Total Repurchase Agreements (Identified Cost — $3,936)				3,936


Total Investments — 99.9% (Identified Cost — $198,214)				237,770
Other Assets Less Liabilities — 0.1%				195


Net Assets — 100.0%			$	237,965

^A Non-income producing.

See notes to financial statements.

Semi-Annual Report to Shareholders 73

Statement of Assets and Liabilities

U.S. Small-Capitalization Value Trust

September 30, 2006 (Unaudited)

(Amounts in Thousands)


Assets:
Investment securities at market value (Identified Cost — $194,278)			$	233,834
Short-term securities at value (Identified Cost — $3,936)				3,936
Receivable for fund shares sold				146
Receivable for securities sold				770
Dividend and interest receivable				281

Total assets				238,967
Liabilities:
Payable for fund shares repurchased	$	552
Payable for securities purchased		53
Accrued management fee		156
Accrued distribution fee		165
Accrued expenses		76

Total liabilities				1,002

Net Assets			$	237,965

Net assets consist of:
Accumulated paid-in-capital applicable to:
15,050 Primary Class shares outstanding			$	152,971
1,871 Institutional Class shares outstanding				26,001
Accumulated net investment loss				(75	)
Undistributed net realized gain on investments				19,512
Unrealized appreciation of investments				39,556

Net Assets			$	237,965

Net Asset Value Per Share:
Primary Class				$13.89

Institutional Class				$15.43

See notes to financial statements.

74 Semi-Annual Report to Shareholders

Statement of Operations

U.S. Small-Capitalization Value Trust

For the Six Months Ended September 30, 2006 (Unaudited)

(Amounts in Thousands)


Investment Income:
Dividends	$	2,147
Interest		159

Total income				$	2,306

Expenses:
Management fees		997
Distribution and service fees: Primary Class		1,094
Audit and legal fees		22
Custodian fees		46
Directors’ fees and expenses		26
Registration fees		18
Reports to shareholders		52
Transfer agent and shareholder servicing expense:
Primary Class		98
Institutional Class		8
Other expenses		39

		2,400
Less: Fees waived		(43	)
Compensating balance credits		(1	)

Total expenses, net of waivers					2,356

Net Investment Loss					(50	)

Net Realized and Unrealized Gain/(Loss) on Investments:
Realized gain on investments		19,516
Change in unrealized appreciation/(depreciation) of investments		(23,700	)

Net Realized and Unrealized Loss on Investments					(4,184	)


Change in Net Assets Resulting From Operations				$	(4,234	)

See notes to financial statements.

Semi-Annual Report to Shareholders 75

Statement of Changes in Net Assets

U.S. Small-Capitalization Value Trust

(Amounts in Thousands)


	For the			For the
	Six Months			Year
	Ended			Ended
	9/30/06			3/31/06

	(Unaudited)
Change in Net Assets:
Net investment loss	$	(50	)	$	(771	)
Net realized gain on investments		19,516			20,770
Change in unrealized appreciation/(depreciation) of investments		(23,700	)		11,437


Change in net assets resulting from operations		(4,234	)		31,436
Distributions to shareholders:
From net realized gain on investments:
Primary Class		(6,103	)		(26,565	)
Institutional Class		(856	)		(2,504	)
Change in net assets from Fund share transactions:
Primary Class		(13,087	)		(11,723	)
Institutional Class		(5,813	)		20,346


Change in net assets		(30,093	)		10,990
Net Assets:
Beginning of period		268,058			257,068


End of period	$	237,965		$	268,058


Overdistributions of net investment income	$	(75	)	$	(25	)

See notes to financial statements.

76 Semi-Annual Report to Shareholders

Financial Highlights

U.S. Small-Capitalization Value Trust

Primary Class:


	Six Months
	Ended
	September 30,			Years Ended March 31,
	2006			2006			2005			2004			2003			2002

	(Unaudited)

Net asset value, beginning of period		$14.51			$14.43			$14.52			$ 8.93			$11.73			$ 9.05


Investment operations:
Net investment loss		(.01)			(.06)			(.05)			(.07)			(.06)			(.06)
Net realized and unrealized gain/(loss) on investments		(.22)			1.77			1.38			5.75			(2.74)			2.74


Total from investment operations		(.23)			1.71			1.33			5.68			(2.80)			2.68


Distributions:
From net realized gain on investments		(.39)			(1.63)			(1.42)			(.09)			—			—


Total distributions		(.39)			(1.63)			(1.42)			(.09)			—			—


Net asset value, end of period		$13.89			$14.51			$14.43			$14.52			$ 8.93			$11.73


Total return		(1.50)	%^A		12.63	%		9.67	%		63.71	%		(23.87)	%		29.61	%

Ratios to Average Net Assets:^B
Total expenses		2.04	%^C		2.01	%		2.00	%		2.05	%		2.13	%		2.24	%
Expenses net of waivers, if any		2.00	%^C		2.00	%		2.00	%		2.00	%		2.00	%		2.00	%
Expenses net of all reductions		2.00	%^C		2.00	%		2.00	%		2.00	%		2.00	%		2.00	%
Net investment income		(.17)	%^C		(.40)	%		(.39)	%		(.61)	%		(.52)	%		(.82)	%
Supplemental Data:
Portfolio turnover rate		16.3	%^A		30.9	%		46.7	%		44.3	%		61.0	%		32.1	%
Net assets, end of period (in thousands)		$209,105			$232,061			$242,719			$226,351			$144,447			$182,201

^ANot annualized.


^B	Total expenses reflects operating expenses prior to any voluntary expense waivers and/or compensating balance credits. Expenses net of waivers reflects total expenses before compensating balance credits but net of any voluntary expense waivers. Expenses net of all reductions reflects expenses less any compensating balance credits and/or voluntary expense waivers.

^CAnnualized.

See notes to financial statements.

Semi-Annual Report to Shareholders 77

Institutional Class:


	Six Months
	Ended
	September 30,			Years Ended March 31,
	2006			2006			2005			2004			2003			2002

	(Unaudited)

Net asset value, beginning of period		$15.99			$15.59			$15.39			$ 9.36			$12.16			$ 9.30


Investment operations:
Net investment income/(loss)		.11			—^D			.09			.05			.05			(.02)
Net realized and unrealized gain(loss) on investments		(.28)			2.03			1.53			6.07			(2.85)			2.88


Total from investment operations		(.17)			2.03			1.62			6.12			(2.80)			2.86


Distributions:
From net realized gain on investments		(.39)			(1.63)			(1.42)			(.09)			—			—


Total distributions		(.39)			(1.63)			(1.42)			(.09)			—			—


Net asset value, end of period		$15.43			$15.99			$15.59			$15.39			$9.36			$12.16


Total return		(.98)	%^A		13.81	%		11.06	%		65.49	%		(23.03)	%		30.75	%

Ratios to Average Net Assets:^B
Total expenses		1.00	%^C		.98	%		.93	%		.98	%		1.05	%		1.20	%
Expenses net of waivers, if any		1.00	%^C		.98	%		.93	%		.98	%		1.00	%		1.00	%
Expenses net of all reductions		.99	%^C		.98	%		.93	%		.98	%		1.00	%		1.00	%
Net investment income		.83	%^C		.66	%		.69	%		.41	%		.50	%		.18	%

Supplemental Data:
Portfolio turnover rate		16.3	%^A		30.9	%		46.7	%		44.3	%		61.0	%		32.1	%
Net assets, end of period (in thousands)		$28,860			$35,997			$14,349			$10,351			$5,589			$5,529


^D	$(.001) per share

See notes to financial statements.

78 Semi-Annual Report to Shareholders

Notes to Financial Statements

Legg Mason Investors Trust, Inc.

(Amounts in Thousands) (Unaudited)

1. Organization and Significant Accounting Policies:

The Legg Mason Investors Trust, Inc. (“Corporation”), consisting of American Leading Companies Trust (“American Leading Companies”), Balanced Trust (“Balanced Trust”), Financial Services Fund (“Financial Services”) and U.S. Small-Capitalization Value Trust (“U.S. Small-Cap”) (each a “Fund”), is registered under the Investment Company Act of 1940, as amended (“1940 Act”), as an open-end, diversified investment company.

Each Fund offers Primary Class and Institutional Class shares. The Institutional Class of Financial Services is not currently active. American Leading Companies, Balanced Trust and Financial Services also offer an additional class of shares: Financial Intermediary Class. The Financial Intermediary Class of American Leading Companies is not currently active. The Financial Intermediary Class of Financial Services was formerly known as Class A. Effective September 1, 2006, both classes of U.S. Small-Cap were closed to new investors. The income and expenses of the Funds are allocated proportionately to each class of shares based on daily net assets, except for Rule 12b-1 distribution and service fees, which are charged only on Primary Class and Financial Intermediary Class shares, and transfer agent and shareholder servicing expenses, which are determined separately for each class.

Preparation of the 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 is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements:

Security Valuation

Equity securities traded on national securities exchanges are valued at the last quoted sales price, except securities traded on the Nasdaq Stock Market, Inc. (“NASDAQ”) which are valued in accordance with the NASDAQ Official Closing Price. Over the counter securities are valued at the mean between the latest bid and asked prices as furnished by dealers who make markets in such securities or by an independent pricing service. Fixed income securities for which market quotations are readily available are valued at current market value.

Each Fund’s securities are valued on the basis of available market quotations or, lacking such quotations, at fair value as determined under policies approved by and under the general oversight of the Board of Directors. In determining fair value, all relevant qualitative and quantitative factors available are considered. These factors are subject to change over time and are reviewed periodically. Each Fund may use fair value pricing instead of market quotations to value one or more securities if the Fund believes that, because of special circumstances, doing so would more accurately reflect the prices the Fund would expect to realize on the current sale of those securities. Further, because of the inherent uncertainty of valuation, those estimated values may differ significantly from quoted or published values or from the values that would

Semi-Annual Report to Shareholders 79

have been used had a ready market for the investments existed, and the differences could be material. At September 30, 2006, there were no fair valued securities for any of the Funds.

Security Transactions

Security transactions are accounted for as of the trade date. Realized gains and losses from security transactions are reported on an identified cost basis for both financial reporting and federal income tax purposes.

For the six months ended September 30, 2006, investment transactions (excluding short-term investments and U.S. government securities) were:


	Purchases	Proceeds From Sales

American Leading Companies	$84,461	$	89,755
Balanced Trust	6,040		5,896
Financial Services	3,681		13,161
U.S. Small-Cap	40,397		54,926

Transactions in U.S. government securities for Balanced Trust were purchases of $3,294 and proceeds from sales of $5,677. There were no transactions in U.S. government securities for the other Funds.

Foreign Currency Translation

Assets and liabilities initially expressed in non-U.S. currencies are translated into U.S. dollars using currency exchange rates determined prior to the close of trading on the New York Stock Exchange, usually at 2:00 p.m. Eastern time. Purchases and sales of securities and income and expenses are translated into U.S. dollars at the prevailing market rates on the dates of such transactions. The effects of changes in non-U.S. currency exchange rates on investment securities and other assets and liabilities are included with the net realized and unrealized gain or loss on investment securities.

Repurchase Agreements

The Funds may engage in repurchase agreement transactions. Under the terms of a typical repurchase agreement, a fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and a fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during a fund’s holding period. This arrangement results in a fixed rate of return that is not subject to market fluctuations during the fund’s holding period. The value of the collateral is at all times at least equal to the total amount of the repurchase obligation, including interest. In the event of counterparty default, a fund has the right to use the collateral to satisfy the terms of the repurchase agreement. However, there could be potential loss to the fund in the event the fund is delayed or prevented from exercising its

80 Semi-Annual Report to Shareholders

Notes to Financial Statements — Continued

Legg Mason Investors Trust, Inc. — Continued

right to dispose of the collateral securities, including the risk of a possible decline in the value of the collateral securities during the period in which the fund seeks to assert its rights. The Funds’ investment advisers review the value of the collateral and the creditworthiness of those banks and dealers with which the Funds enter into repurchase agreements to evaluate potential risks.

Compensating Balance Credits

The Funds have an arrangement with their custodian bank, whereby a portion of the custodian’s fee is paid indirectly by credits earned on the Funds’ cash on deposit with the bank. This deposit arrangement is an alternative to purchasing overnight investments.

Commission Recapture

American Leading Companies has entered into a directed brokerage agreement with State Street Bank. Under the agreement, State Street Bank will rebate to the Fund a percentage of commissions generated by the Fund. Such payments are included with realized gain/(loss) on investment transactions. During the six months ended September 30, 2006, no commissions were recaptured by the Fund.

Investment Income and Distributions to Shareholders

Interest income and expenses are recorded on the accrual basis. Bond premiums and discounts are amortized for financial reporting and federal income tax purposes. Dividend income is recorded on the ex-dividend date. Dividends from net investment income, if available, are determined at the class level and paid annually for American Leading Companies, Financial Services and U.S. Small-Cap, and quarterly for Balanced Trust. Distributions from net realized gains, which are calculated at the Fund level, are declared and paid annually in June, if available. An additional distribution may be made in December, to the extent necessary, in order to comply with federal excise tax requirements.

Other

In the normal course of business, the Funds enter into contracts that provide general indemnifications. Each Fund’s maximum exposure under these arrangements is dependent on claims that may be made against that Fund in the future and, therefore, cannot be estimated; however, based on experience, the risk of material loss from such claims is considered remote.

2. Federal Income Taxes:

No provision for federal income or excise taxes is required since each Fund intends to continue to qualify as a regulated investment company and distribute substantially all of its taxable income and capital gains to its shareholders. Because federal income tax regulations differ from accounting principles generally accepted in the United States of America, income and capital gain distributions determined in accordance with tax regulations may differ from

Semi-Annual Report to Shareholders 81

net investment income and realized gains recognized for financial reporting purposes. Accordingly, the character of distributions and composition of net assets for tax purposes may differ from those reflected in the accompanying financial statements. The amount and character of tax-basis distributions and composition of net assets are finalized at fiscal year-end; accordingly, tax-basis balances have not been determined as of September 30, 2006.

The Funds intend to retain realized capital gains that may be offset against available capital loss carryforwards for federal income tax purposes. There were no unused capital loss carryforwards for federal income tax purposes at March 31, 2006, for any of the funds.

3. Transactions With Affiliates:

American Leading Companies has an investment advisory and management agreement with Legg Mason Capital Management, Inc. (“LMCM”). Pursuant to the agreement, LMCM provides American Leading Companies with investment advisory, management and administrative services for which the Fund pays a fee, computed daily and payable monthly, at an annual rate of the Fund’s average daily net assets.

Balanced Trust, Financial Services and U.S. Small-Cap have management agreements with Legg Mason Fund Adviser, Inc. (“LMFA”). Pursuant to their respective agreements, LMFA provides these Funds with management and administrative services for which these Funds pay a fee, computed daily and payable monthly, at an annual rate of each Fund’s average daily net assets.

The following chart summarizes the management fees for each of the Funds:


				Six Months Ended
				September 30,
				2006
	Management			Management Fee
Fund	Fee		Asset Breakpoint	Waived

American Leading Companies		0.70%	up to $2 billion	$	—
		0.65%	in excess of $2 billion
Balanced Trust		0.75%	all asset levels		39
Financial Services		1.00%	up to $100 million
		0.75%	$100 million – $1 billion		35
		0.65%	in excess of $1 billion
U.S. Small-Cap		0.85%	up to $100 million
		0.75%	$100 million – $1 billion		—
		0.65%	in excess of $1 billion

82 Semi-Annual Report to Shareholders

Notes to Financial Statements — Continued

Legg Mason Investors Trust, Inc. — Continued

LMCM and LMFA have voluntarily agreed to waive their fees in any month to the extent a Fund’s expenses (exclusive of taxes, interest, brokerage and extraordinary expenses) exceed during that month certain annual rates of that Fund’s average daily net assets until August 1, 2007.

The following chart summarizes the expense limitations for each of the Funds:

Financial

Primary Class

Intermediary Class

Institutional Class

Fund

Expense Limitation

American Leading Companies

1.95%

N/A

0.95%

Balanced Trust

1.85%

1.35%

1.10%

Financial Services

2.25%

1.50%

N/A

U.S. Small-Cap

2.00%

N/A

1.00%

Barrett Associates, Inc. (“Barrett”), serves as investment adviser to Financial Services. Barrett is responsible for the actual investment activity of the Fund. LMFA pays Barrett a fee for its services, computed daily and payable monthly, at an annual rate of 60% of the fee received by LMFA.

Bartlett & Co. (“Bartlett”) serves as investment adviser to Balanced Trust. Bartlett is responsible for the actual investment activity of the Fund. LMFA pays Bartlett a fee for its services, computed daily and payable monthly, at an annual rate equal to 662/3% of the fee received by LMFA.

Brandywine Global Investment Management, LLC (“Brandywine”) serves as investment adviser to U.S. Small-Cap. Brandywine is responsible for the actual investment activity of the Fund. LMFA pays Brandywine a fee for its services, computed daily and payable monthly, at an annual rate equal to 58.8% of the fee received by LMFA. Prior to May 1, 2006, Brandywine Global Investment Management, LLC was known as Brandywine Asset Management, LLC.

N/A — Not applicable.

Semi-Annual Report to Shareholders 83

Legg Mason Investor Services, LLC (“LMIS”), serves as the Funds’ distributor. LMIS receives an annual distribution fee and an annual service fee based on each Fund’s Primary Class’s (and with respect to Financial Services and Balanced Trust, Financial Intermediary Class’s) average daily net assets, computed daily and payable monthly as follows:


					Six Months Ended
					September 30,
					2006
					Distribution and
	Distribution		Service		Service Fees
Fund	Fee		Fee		Voluntarily Waived

American Leading Companies
Primary Class		0.75%		0.25%	$	—
Balanced Trust
Primary Class		0.50%		0.25%		26
Financial Intermediary Class		N/A		0.25%		2
Financial Services
Primary Class		0.75%		0.25%		16
Financial Intermediary Class		N/A		0.25%		—
U.S. Small-Cap
Primary Class		0.75%		0.25%		43

LMFA serves as administrator to American Leading Companies under an administrative services agreement with LMCM. For LMFA’s services to American Leading Companies, LMCM (not the Fund) pays LMFA a fee, calculated daily and payable monthly, of 0.05% of the average daily net assets of the Fund.

LM Fund Services, Inc. (“LMFS”), a registered transfer agent, has an agreement with the Funds’ transfer agent to assist it with some of its duties. For this assistance, the transfer agent paid LMFS the following amounts during the six months ended September 30, 2006: American Leading Companies, $64; Balanced Trust, $7; Financial Services, $66; and U.S. Small-Cap, $21.

LMCM, LMFA, Barrett, Bartlett, Brandywine, LMIS, and LMFS are wholly owned subsidiaries and corporate affiliates of Legg Mason, Inc.

Under a Deferred Compensation Plan (the “Plan”), directors may elect to defer receipt of all or a specified portion of their compensation. A participating director may select one or more funds in which his or her deferred director’s fees will be deemed to be invested. Deferred amounts remain in the fund until distributed in accordance with the Plan.

4. Line of Credit:

The Funds, along with certain other Legg Mason Funds, participate in a $400 million line of credit (“Credit Agreement”) to be used for temporary or emergency purposes. Pursuant to the Credit Agreement, each participating Fund is liable only for principal and interest payments

84 Semi-Annual Report to Shareholders

Notes to Financial Statements — Continued

Legg Mason Investors Trust, Inc. — Continued

related to borrowings made by that Fund. Borrowings under the Credit Agreement bear interest at a rate equal to the prevailing federal funds rate plus the federal funds rate margin. The Funds made no borrowings under the Credit Agreement during the six months ended September 30, 2006.

5. Fund Share Transactions:

At September 30, 2006, there were 250,000, 375,000, 125,000, and 50,000 shares authorized at $.001 par value for the Primary Classes of American Leading Companies, Balanced Trust, Financial Services and U.S. Small-Cap, respectively. At September 30, 2006, there were 100,000, 125,000, 225,000 and 100,000 shares authorized at $.001 par value for the Financial Intermediary classes of American Leading Companies, Balanced Trust, Financial Services and U.S. Small-Cap, respectively. At September 30, 2006, there were 250,000, 125,000, 125,000 and 50,000 shares authorized at $.001 par value for the Institutional Classes of American Leading Companies, Balanced Trust, Financial Services and U.S. Small-Cap, respectively. Share transactions are detailed below:


	American Leading Companies Trust
	Primary Class						Institutional Class
	Six Months			Year			Six Months			Year
	Ended			Ended			Ended			Ended
	9/30/06			3/31/06			9/30/06			3/31/06

Shares:
Sold		2,141			5,760			205			1,352
Reinvestment of Distributions		562			—			33			4
Repurchased		(2,392	)		(4,883	)		(670	)		(676	)

Net Change		311			877			(432	)		680

Amount:
Sold	$	50,935		$	135,444		$	4,995		$	32,073
Reinvestment of Distributions		12,821			—			780			91
Repurchased		(56,785	)		(113,661	)		(16,443	)		(16,541	)

Net Change	$	6,971		$	21,783		$	(10,668	)	$	15,623

Semi-Annual Report to Shareholders 85


	Balanced Trust
							Financial
	Primary Class						Intermediary Class						Institutional Class
	Six Months			Year			Six Months			Year			Six Months			Year
	Ended			Ended			Ended			Ended			Ended			Ended
	9/30/06			3/31/06			9/30/06			3/31/06			9/30/06			3/31/06

Shares:
Sold		322			1,048			20			116			30			1,327
Reinvestment of Distributions		156			190			15			85			46			40
Repurchased		(582	)		(1,129	)		(122	)		(1,587	)		(46	)		(543	)

Net Change		(104	)		109			(87	)		(1,386	)		30			824

Amount:
Sold	$	3,579		$	11,918		$	217		$	1,313		$	337		$	15,040
Reinvestment of Distributions		1,670			2,139			168			957			488			451
Repurchased		(6,457	)		(12,800	)		(1,343	)		(18,027	)		(496	)		(6,160	)

Net Change	$	(1,208	)	$	1,257		$	(958	)	$	(15,757	)	$	329		$	9,331


	Financial Services Fund
							Financial
	Primary Class						Intermediary Class
	Six Months			Year			Six Months			Year
	Ended			Ended			Ended			Ended
	9/30/06			3/31/06			9/30/06			3/31/06

Shares:
Sold		160			283			8			24
Reinvestment of Distributions		189			346			5			20
Repurchased		(347	)		(701	)		(54	)		(157	)

Net Change		2			(72	)		(41	)		(113	)

Amount:
Sold	$	2,374		$	4,208		$	141		$	370
Reinvestment of Distributions		2,660			5,094			77			312
Repurchased		(5,146	)		(10,429	)		(853	)		(2,490	)

Net Change	$	(112	)	$	(1,127	)	$	(635	)	$	(1,808	)

86 Semi-Annual Report to Shareholders

Notes to Financial Statements — Continued

Legg Mason Investors Trust, Inc. — Continued


	U.S. Small-Cap Value Trust
	Primary Class						Institutional Class
	Six Months			Year			Six Months			Year
	Ended			Ended			Ended			Ended
	9/30/06			3/31/06			9/30/06			3/31/06

Shares:
Sold		721			1,984			247			2,081
Reinvestment of Distributions		446			1,848			58			165
Repurchased		(2,110	)		(4,656	)		(686	)		(914	)

Net Change		(943	)		(824	)		(381	)		1,332

Amount:
Sold	$	10,111		$	28,071		$	3,801		$	31,880
Reinvestment of Distributions		5,947			25,913			856			2,504
Repurchased		(29,145	)		(65,707	)		(10,470	)		(14,038	)

Net Change	$	(13,087	)	$	(11,723	)	$	(5,813	)	$	20,346

6. Recent Accounting Pronouncements

During June 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation 48 (“FIN 48” or the “Interpretation”), Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement 109. FIN 48 supplements FASB Statement 109, Accounting for Income Taxes and prescribes a comprehensive model for how a fund should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the fund has taken or expects to take on a tax return. FIN 48 requires that the tax effects of a position be recognized only if it is “more likely than not” to be sustained based solely on its technical merits. Management must be able to conclude that the tax law, regulations, case law, and other objective information regarding the technical merits sufficiently support the position’s sustainability with a likelihood of more than 50 percent. FIN 48 is effective for fiscal periods beginning after December 15, 2006. At adoption, the financial statements must be adjusted to reflect only those tax positions that are more likely than not to be sustained as of the adoption date.

On September 20, 2006, the FASB released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years, beginning after November 15, 2007 and interim periods within those fiscal years.

Semi-Annual Report to Shareholders 87

At this time, management is evaluating the implications of FIN 48 and FAS 157 and their impact on the financial statements has not yet been determined.

88 Semi-Annual Report to Shareholders

Notes to Financial Statements — Continued

Legg Mason Investors Trust, Inc. — Continued

Subsequent Events


1.	Shareholder Meeting

A Special Meeting of Shareholders was held on November 20, 2006, to approve an Agreement and Plan of Reorganization (“Reorganization”) of Legg Mason Investors Trust, Inc. with respect to its series Legg Mason Balanced Trust (“Fund”) whereby the Fund would transfer all of its assets and liabilities to Legg Mason Partners Capital and Income Fund, a series of Legg Mason Partners Income Funds. The Reorganization was approved by Fund shareholders. It is anticipated that the Reorganization will be effected by March 31, 2007.

Shareholder Meeting Results (share amounts are not in thousands):


Affirmative	2,669,662.964	shares	54.80	%
Against	78,211.073	shares	1.61	%
Abstain	53,554.331	shares	1.10	%


2.	Reorganization

The Board of Directors of Legg Mason Investors Trust, Inc. approved subject to shareholder approval, an Agreement and Plan of Reorganization (“Reorganization”) with respect to its series Legg Mason Financial Services Fund (“Fund”) whereby the Fund would transfer all of its assets and liabilities to Legg Mason Partners Financial Services Fund, a series of Legg Mason Partners Sector Series, Inc. A special meeting of shareholders is scheduled for December 20, 2006, and, if approved by shareholders, it is anticipated that the proposed Reorganization will be effected by March 31, 2007.

Fund Information 89

Investment Managers


	For American Leading Companies Trust:


	Legg Mason Capital Management, Inc.
	Baltimore, MD


	For Balanced Trust, Financial Services Fund, and U.S. Small-Cap Value Trust:


	Legg Mason Fund Adviser, Inc.
	Baltimore, MD

Investment Advisers


	For American Leading Companies Trust:


	Legg Mason Capital Management, Inc.
	Baltimore, MD


	For Balanced Trust:


	Bartlett & Co.
	Cincinnati, OH


	For Financial Services Fund:


	Barrett Associates, Inc.
	New York, NY


	For U.S. Small-Cap Value Trust:


	Brandywine Global Investment Management, LLC
	Philadelphia, PA

Board of Directors


	John F. Curley, Jr., Chairman Mark R. Fetting, President Dr. Ruby P. Hearn Arnold L. Lehman Robin J.W. Masters Dr. Jill E. McGovern Arthur S. Mehlman G. Peter O’Brien S. Ford Rowan Robert M. Tarola

Officers


	Marie K. Karpinski, Vice President and Chief Financial Officer Gregory T. Merz, Vice President and Chief Legal Officer Amy M. Olmert, Vice President and Chief Compliance Officer Wm. Shane Hughes, Treasurer Richard M. Wachterman, Secretary

Transfer and Shareholder Servicing Agent


	Boston Financial Data Services Braintree, MA

Custodian


	State Street Bank & Trust Company Boston, MA

Counsel


	Kirkpatrick & Lockhart Nicholson Graham LLP Washington, DC

Independent Registered Public Accounting Firm


	PricewaterhouseCoopers LLP Baltimore, MD

About the Legg Mason Funds


Equity Funds American Leading Companies Trust Classic Valuation Fund Growth Trust Special Investment Trust U.S. Small-Capitalization Value Trust Value Trust Specialty Funds Balanced Trust Financial Services Fund Opportunity Trust Global Funds Emerging Markets Trust Global Income Trust International Equity Trust Taxable Bond Funds Core Bond Fund High Yield Portfolio Investment Grade Income Portfolio Limited Duration Bond Portfolio T ax-Free Bond Funds Maryland Tax-Free Income Trust Pennsylvania Tax-Free Income Trust Tax-Free Intermediate-Term Income Trust		Legg Mason, Inc., based in Baltimore, Maryland, has built its reputation, at least in part, on the success of the Legg Mason Funds, introduced in 1979. The primary purpose of our funds is to enable investors to diversify their portfolios across various asset classes and, consequently, enjoy the stability and growth prospects generally associated with diversification. The success of our funds is contingent on the experience, discipline, and acumen of our fund managers. We believe the quality of our managers is crucial to investment success. Unlike many firms, which focus on a particular asset class or the fluctuations of the market, at Legg Mason we focus on providing a collection of top-notch managers in all the major asset classes. Information about the policies and procedures that each Fund uses to determine how to vote proxies relating to its portfolio securities is contained in the Statement of Additional Infor mation, available without charge upon request by calling 1-800-822-5544 or on the Securities and Exchange Commission’s (“SEC”) website (http://www.sec.gov). Information regarding how each Fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is also available on the SEC’s website or through the Legg Mason Funds’ website at www.leggmason.com/funds/about/aboutlmf.asp#Results. Each Fund files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. You may obtain a free copy of each Fund’s portfolio holdings as filed on Form N-Q, by contacting each Fund at the appropriate phone number, address or website listed below. Additionally, each Fund’s Form 0;N-Q is available on the SEC’s website (http://www.sec.gov) or may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information about the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

This report must be preceded or accompanied by a free prospectus. Investors should consider each Fund’s investment objectives risks, charges, and expenses carefully before investing. The prospectus contains this and other important information about each Fund. Please read the prospectus carefully before investing.


Legg Mason Funds For Primary Class Shareholders c/o BFDS P.O. Box 55214 Boston, MA 02205-8504 800-822-5544 www.leggmasonfunds.com		Legg Mason Investor Services-Institutional For FI and I Class Shareholders c/o BFDS, P.O. Box 8037 Boston, MA 02206-8037 888-425-6432 www.lminstitutionalfunds.com

Legg Mason Investor Services, LLC, Distributor

A Legg Mason, Inc. Subsidiary

LMF-013 (9/06)

Item 2. Code of Ethics.

Not applicable for semiannual reports.

Item 3. Audit Committee Financial Expert.

Not applicable for semiannual reports.

Item 4. Principal Accountant Fees and Services.

Not applicable for semiannual reports.

Item 5. Audit Committee of Listed Registrants.

The Registrant is not a listed issuer as defined in Rule 10A-3 under the Securities Exchange Act of 1934.

Item 6. Schedule of Investments

The schedule of investments in securities of unaffiliated issuers is included as part of the report to shareholders filed under Item 1 of this Form.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 11. Controls and Procedures.

(a) The Registrant’s principal executive and principal financial officers have concluded, based on their evaluation of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) as of a date within 90 days of the filing date of this report that the Registrant’s disclosure controls and procedures are effective, and that the disclosure controls and procedures are reasonably designed to ensure that the information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that information required to be disclosed is properly communicated to the Registrant’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding the required disclosures.

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12. Exhibits.

	(a) (1)		Not applicable for semiannual reports.

	(a) (2)		Separate certifications for the Registrant’s principal executive officer and principal financial officer are attached.

	(b)		Separate certifications for the Registrant’s principal executive officer and principal financial officer are attached.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Legg Mason Investors Trust, Inc.

By:		/s/ Mark R. Fetting

Mark R. Fetting President, Legg Mason Investors Trust, Inc.

Date:		November 21, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By:		/s/ Mark R. Fetting

Mark R. Fetting President, Legg Mason Investors Trust, Inc.

Date:		November 21, 2006


By:		/s/ Marie K. Karpinski

Marie K. Karpinski Vice President and Chief Financial Officer, Legg Mason Investors Trust, Inc.

Date:		November 20, 2006

Legg Mason Investors Trust Inactive N-CSRSCertified semi-annual shareholder report (management investment company)