<PAGE>
[GRAPHIC] Semi-Annual
Report
June 30, 2000
(unaudited)
Pilgrim Mutual Funds
PILGRIM
GLOBAL TECHNOLOGY
FUND, INC.
----------------------------------------------------
Investment Objective: Long-term Capital Appreciation
<PAGE>
Chairman's Message
-------------------------------------------------------------------------------
Dear Shareholders:
Welcome to the Pilgrim Mutual Funds family. We are pleased to present the
Semi-Annual Report for Pilgrim Global Technology Fund, Inc. (formerly
Lexington Global Technology Fund, Inc.).
On July 26, 2000, ReliaStar Financial Corp. ("ReliaStar") acquired Lexington
Management Corporation and all of its subsidiaries. In conjunction with the
acquisition, Pilgrim Investments, Inc., a subsidiary of ReliaStar, was
appointed to the role of Investment Adviser to the Fund. As a shareholder in
the Pilgrim family of funds, you now have access to more funds with varying
investment objectives. As a Lexington Fund shareholder as of July 26th, you
can now exchange into any Pilgrim Fund A shares without paying a sales load.
Our fund family has 41 varying types of mutual funds which provide more core
investment choices for the serious investor. We believe that the key to
success is matching quality core investments to the individual needs of
investors. Core investments are the foundation of every portfolio and the
basis of other important investment decisions. Pilgrim prides itself on
providing a family of core investments designed to help you reach your
financial goals. Our goal is for every investor to have a successful
investment experienceSM.
If you have any questions regarding your account, or any other Pilgrim Fund
you can access, please call us at 800-992-0180 or visit our website at
www.pilgrimfunds.com.
Sincerely,
/s/ Robert W. Stallings
Robert W. Stallings
Chairman and Chief Executive Officer
Pilgrim Group, Inc.
August, 2000
<PAGE>
Dear Shareholders:
-------------------------------------------------------------------------------
During the second quarter the Pilgrim Global Technology Fund, Inc. (formerly
Lexington Global Technology Fund, Inc.) declined 18.57%,* underperforming the
decline in the unmanaged Pacific Stock Exchange Technology Index of 5.21%. For
the year through June 30th, the Fund gained 4.8%* versus a gain of 13.3% in
the PSE Tech Index. The Fund's underperformance was due to relatively high
weighting in smaller companies as well as exposure to Japan's OTC market.
The market environment changed significantly during the second quarter.
Enthusiasm for tech stocks turned sharply from mid-March, as the gradual
tightening of liquidity by central banks took effect. Rapid re-assessment of
risk led to a divergence within the technology sector between established
companies and the more conceptual, capital-dependent players. Smaller, less
liquid stocks fell dramatically, while companies with nearer-term
profitability became the area of focus. Many of the weaker names then failed
to rally as the IPO market came to a standstill. Especially in the consumer
internet area, venture capital funding began to dry up.
Relative safety during the quarter was in large-cap technology leaders.
Large semiconductor equipment companies as well as chipmakers held up well
with continued news of strong demand. Leading telecom equipment producers also
outperformed. While service operators were hurt by the cost of third
generation licences, equipment makers benefited from continuing strong capital
spending.
Going forward, the primary aim is to avoid excessive risk while maintaining
diversified exposure to technology. To this end, we cut back some of the
largest positions and added names like Ericsson, Philips and Telefonica. These
positions raise non-US allocation and help to lower volatility, given that
they are established and financially strong companies. Ability to finance
growth is an increasingly important characteristic in technology companies.
As you are aware, Lexington Global Asset Managers, Inc., the parent company
of Lexington Management Corporation was acquired by ReliaStar Financial Corp.
(NYSE:RLR) the parent company of Pilgrim Investments, Inc., an investment
management and mutual fund company with $17 billion of assets under
management.
On May 1, ReliaStar announced that it agreed to be acquired by ING Groep
N.V. ("ING Group") in a transaction that, subject to certain approvals, is
expected to close in the third quarter of this year. ING Group is a global
financial institution that is active in the field of insurance, banking, and
asset management in more than 60 countries.
We wish to thank you for your continued support.
Sincerely,
/s/ Alan H. Wapnick /s/ Alan H. Wapnick
Richard T. Saler Alan H. Wapnick
Portfolio Manager Portfolio Manager
August, 2000 August, 2000
*9.58% is the since commencement (12/27/99) average annual standard total
return, respectively, for the period ended June 30, 2000. Investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than at original cost.
International investing has special risks, including currency fluctuations and
political instability. Investing in technology related companies may be
subject to a higher degree of risk and volatility due to their concentration
in a specific industry.
1
<PAGE>
Pilgrim Global Technology Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
Number
of Value
Shares Security (Note 1)
--------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS: 90.2%
Finland: 2.7%
7,100 Sonera Corporation....................................... $ 324,986
-----------
France: 3.5%
6,400 Alcatel (ADR)............................................ 425,600
-----------
Germany: 4.3%
499 Adlink Internet Media AG/1/.............................. 5,644
4,000 Elmos Semiconductor AG................................... 207,055
4,000 Infineon Technologies AG/1/.............................. 318,252
-----------
530,951
-----------
Hong Kong: 0.9%
200,000 Yuxing Infotech Holdings, Ltd./1/........................ 109,685
-----------
Israel: 0.6%
2,500 Orckit Communications, Ltd./1/........................... 75,000
-----------
Japan: 24.0%
5,250 Capcom Company, Ltd. .................................... 169,208
1,400 Citizen Electronics Company, Ltd. ....................... 153,495
10,000 Crayfish Company, Ltd. (ADR)/1/.......................... 69,375
12,000 Fujitsu, Ltd. ........................................... 416,251
600 Hikari Tsushin, Inc. .................................... 24,669
9,000 Matsushita Electronics................................... 233,929
28,000 Mitsubishi Electronics................................... 303,814
13 NTT Data Corporation..................................... 133,930
13 NTT Docomo, Inc. ........................................ 352,642
600 Softbank Corporation..................................... 81,662
3,800 Sony Corporation......................................... 355,572
5,000 Square Company, Ltd. .................................... 369,560
2,000 Tokyo Electron, Ltd. .................................... 274,476
-----------
2,938,583
-----------
Netherlands: 5.4%
6,500 Koninklijke (Royal) Philips Electronics N.V. ............ 307,803
8,000 United Pan-Europe Communications N.V./1/................. 210,046
12,000 World Online International NV/1/......................... 144,939
-----------
662,788
-----------
Portugal: 3.3%
2,000 Impresa-Sociedade Gestora de Participacoes, S.A./1/...... 22,048
9,667 ParaRede, SGPS SA/1/..................................... 62,828
48,335 ParaRede, SGPS SA (Rights)/1/............................ 314,140
-----------
399,016
-----------
</TABLE>
<TABLE>
<CAPTION>
Number
of Value
Shares Security (Note 1)
-------------------------------------------------------------------------------
<C> <S> <C>
South Korea: 5.1%
5,000 Korea Telecom Corporation (ADR)/1/...................... $ 241,875
47,900 Mirae Company (ADR)/1/.................................. 384,697
-----------
626,572
-----------
Spain: 2.6%
14,500 Telefonica S.A./1/...................................... 312,740
-----------
Sweden: 2.4%
14,800 Telefonaktiebolaget LM Ericsson AB...................... 294,457
-----------
Switzerland: 2.6%
9,000 Swisscom AG............................................. 317,250
-----------
Taiwan: 1.6%
5,120 Taiwan Semiconductor Manufacturing Company, Ltd.
(ADR)/1/............................................... 198,400
-----------
United Kingdom: 5.3%
26,000 Flag Telecom Holdings, Ltd./1/.......................... 388,375
65,200 Vodafone AirTouch plc/1/................................ 263,546
-----------
651,921
-----------
United States: 25.9%
1,500 Agilent Technologies, Inc./1/........................... 110,625
4,500 Caliper Technologies Corporation/1/..................... 206,859
2,500 Conexant Systems, Inc./1/............................... 121,797
4,000 Electronic Arts, Inc./1/................................ 291,875
6,300 Entrust Technologies Inc./1/............................ 522,506
7,900 Intersil Holding Corporation/1/......................... 426,600
20,000 Litronic, Inc./1/....................................... 178,125
6,000 Lucent Technologies, Inc................................ 355,500
9,000 Motient Corporation/1/.................................. 141,469
500 New Focus, Inc./1/...................................... 41,250
4,000 Phone.com, Inc./1/...................................... 260,875
25,000 Saflink Corporation/1/.................................. 69,531
5,900 Vitesse Semiconductor Corporation/1/.................... 434,203
-----------
3,161,215
-----------
TOTAL INVESTMENTS: 90.2%
(cost $12,577,782+) (Note 1)........................... 11,029,164
Other assets in excess of liabilities: 9.8%............. 1,197,175
-----------
TOTAL NET ASSETS: 100.0%
(equivalent to $10.48 per share on 1,166,544 shares
outstanding)........................................... $12,226,339
===========
</TABLE>
--------
/1/Non-income producing security.
ADR--American Depository Receipt.
+ Aggregate cost for Federal income tax purposes is identical.
2
<PAGE>
Pilgrim Global Technology Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 2000 (unaudited) (continued)
At June 30, 2000, the composition of the Fund's net assets by industry
concentration was as follows
<TABLE>
<S> <C>
Biotechnology............. 1.7%
Capital Equipment......... 5.6
Computer Software......... 3.1
Consumer Durable Goods.... 7.3
Electrical & Electronics.. 7.9
Internet.................. 9.8
</TABLE>
<TABLE>
<S> <C>
Media................... 0.2%
Semiconductor........... 15.4
Services................ 2.6
Software................ 6.0
Telecommunications...... 30.6
Other assets............ 9.8
-----
Total Net Assets........ 100.0%
=====
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
3
<PAGE>
Pilgrim Global Technology Fund, Inc.
Statement of Assets and Liabilities
June 30, 2000 (unaudited)
<TABLE>
<S> <C>
Assets
Investments, at value (cost $12,577,782) (Note 1)................ $11,029,164
Cash............................................................. 1,291,631
Due from Lexington Management Corporation (Note 2)............... 65,848
Dividends and interest receivable................................ 8,138
Other receivables................................................ 18
-----------
Total Assets.................................................. 12,394,799
-----------
Liabilities
Payable for investment securities purchased...................... 46,333
Payable for fund shares redeemed................................. 5,114
Accrued expenses................................................. 117,013
-----------
Total Liabilities............................................. 168,460
-----------
Net Assets (equivalent to $10.48 per share on 1,166,544 shares
outstanding) (Note 4)........................................... $12,226,339
===========
Net Assets consist of:
Capital stock -- authorized 1,000,000,000 shares, $.001 par value
per share....................................................... $ 1,167
Additional paid-in-capital....................................... 13,537,684
Accumulated net investment loss.................................. (83,016)
Accumulated net realized gain on investments and foreign currency
transactions.................................................... 319,288
Unrealized depreciation of investments and foreign currency
translation of other assets and liabilities..................... (1,548,784)
-----------
Total Net Assets.............................................. $12,226,339
===========
</TABLE>
Pilgrim Global Technology Fund, Inc.
Statement of Operations
Six months ended June 30, 2000 (unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Dividends............................................ $ 14,082
Interest............................................. 23,279
----------
37,361
Less: foreign tax expense............................ 2,546
----------
Total investment income.............................. $ 34,815
Expenses
Investment advisory fee (Note 2)..................... 58,755
Directors' fees and expenses......................... 98,467
Transfer agent and shareholder servicing expenses
(Note 2)............................................ 18,067
Registration fees.................................... 17,405
Printing and mailing expenses........................ 16,922
Custodian expenses................................... 15,011
Audit fees........................................... 10,194
Professional fees.................................... 8,499
Computer processing fees............................. 4,342
Accounting expenses (Note 2)......................... 2,093
Other expenses....................................... 9,532
----------
Total expenses....................................... 259,287
Less: expenses recovered under contract with
investment adviser (Note 2)....................... 130,347
redemption fee proceeds (Note 3).................. 11,109
----------
Net expenses......................................... 117,831
-----------
Net investment loss.................................. (83,016)
Realized and Unrealized Gain (Loss) on Investments
(Note 5)
Net realized gain (loss) on:
Investments.......................................... 319,312
Foreign currency transactions........................ (24)
----------
Net realized gain.................................. 319,288
Net change in unrealized
appreciation of:
Investments.......................................... (1,548,618)
Foreign currency translation of other assets and
liabilities......................................... (166)
----------
Net change in unrealized appreciation.............. (1,548,784)
-----------
Net realized and unrealized loss...................... (1,229,496)
-----------
Decrease in Net Assets resulting from Operations...... $(1,312,512)
===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
4
<PAGE>
Pilgrim Global Technology Fund, Inc.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six months ended
June 30, 2000
(unaudited)
----------------
<S> <C>
Operations:
Net investment loss........................................... $ (83,016)
Net realized gain from investments and foreign currency
transactions................................................. 319,288
Net change in unrealized appreciation of investments and
foreign currency translation................................. (1,548,784)
-----------
Net decrease in net assets resulting from operations........ (1,312,512)
-----------
Capital Share Transactions: (Note 4)
Proceeds from sale of shares.................................. 14,918,172
Cost of shares redeemed....................................... (1,479,321)
-----------
Net increase in net assets from capital share transactions.. 13,438,851
-----------
Net increase in net assets.................................... 12,126,339
Net Assets:
Beginning of period........................................... 100,000
-----------
End of period (including accumulated net investment loss of
$83,016)..................................................... $12,226,339
===========
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
5
<PAGE>
Pilgrim Global Technology Fund, Inc.
Notes to Financial Statements
June 30, 2000 (unaudited) and December 31, 1999
1.Significant Accounting Policies
Pilgrim Global Technology Fund, Inc. (formerly Lexington Global Technology
Fund, Inc.) (the "Fund") is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek long-term growth of capital. The Fund's
commencement of operations was December 27, 1999 with the investment of its
initial capital. The following is a summary of significant accounting policies
followed by the Fund in the preparation of its financial statements:
Investments Securities transactions are accounted for on a trade date
basis. Realized gains and losses from investment transactions are reported on
the identified cost basis. Securities traded on a recognized stock exchange
are valued at the last sales price reported by the exchange on which the
securities are traded. If no sales price is recorded, the mean between the
last bid and asked prices is used. Securities traded on the over-the-counter
market are valued at the mean between the last current bid and asked prices.
Short-term securities having a maturity of 60 days or less are stated at
amortized cost, which approximates market value. Securities for which market
quotations are not readily available and other assets are valued by Fund
management in good faith under the direction of the Fund's Board of Directors.
All investments quoted in foreign currencies are valued in U.S. dollars on the
basis of the foreign currency exchange rates prevailing at the close of
business. Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income, adjusted for amortization of premiums
and accretion of discounts, is accrued as earned.
Foreign Currency Transactions Foreign currencies (and receivables and
payables denominated in foreign currencies) are translated into U.S. dollar
amounts at current exchange rates. Translation gains or losses resulting from
changes in exchange rates and realized gains and losses on the settlement of
foreign currency transactions are reported in the statement of operations. In
addition, the Fund may enter into forward foreign exchange contracts in order
to hedge against foreign currency risk in the purchase or sale of securities
denominated in foreign currency. The Fund may also enter into such contracts
to hedge against changes in foreign currency exchange rates on portfolio
positions. These contracts are marked to market daily, by recognizing the
difference between the contract exchange rate and the current market rate as
unrealized gains or losses. Realized gains or losses are recognized when
contracts are closed and are reported in the statement of operations.
The Fund authorizes its custodian to place and maintain equity securities in a
segregated account of the Fund having a value equal to the aggregate amount of
the Fund's commitments under forward foreign currency contracts entered into
with respect to position hedges. There were no forward foreign currency
contracts outstanding at June 30, 2000.
Federal Income Taxes It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to "regulated investment
companies" and to distribute all of its taxable income to its shareholders.
Therefore, no provision for Federal income taxes is required.
Distributions Dividends from net investment income and net realized capital
gains are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. The character of income and gains
to be distributed are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles.
6
<PAGE>
Pilgrim Global Technology Fund, Inc.
Notes to Financial Statements
June 30, 2000 (unaudited) and December 31, 1999 (continued)
1.Significant Accounting Policies (continued)
Use of Estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
2.Investment Advisory Fee and Other Transactions with Affiliate
The Fund paid an investment advisory fee to Lexington Management Corporation
("LMC") at the rate of 1.25% of average daily net assets. In connection with
providing investment advisory services, LMC had entered into a sub-advisory
contract with Stratos Advisors, Inc.("Stratos") under which Stratos provided
the Fund with investment management services. Pursuant to the terms of the
sub-advisory contract between LMC and Stratos, LMC paid Stratos a monthly sub-
advisory fee at the annual rate of 0.625% of the Fund's average daily net
assets. Effective June 7, 2000, LMC terminated the sub-advisory contract with
Stratos. For 2000, the adviser has agreed to voluntarily limit the total
expenses of the Fund (excluding interest, taxes, brokerage commissions and
extraordinary expenses but including management fee and operating expenses) to
an annual rate of 2.50% of the Fund's average net assets. Total reimbursement
was $130,347 for the six months ended June 30, 2000, and is set forth in the
statement of operations.
The Fund also reimbursed LMC for certain expenses, including accounting and
shareholder servicing costs of $4,309 which were incurred by the Fund, but
paid by LMC.
3.Redemption Fee
A fee is charged on the redemption of shares equal to 2% of the redemption
price of shares of the Fund held less than 90 days that are being redeemed.
Redemption fee proceeds will be applied to the Fund's aggregate expenses
allocable to providing custody and redemption services, including transfer
agent fees, postage, printing, telephone costs and employment costs relating
to the handling and processing of redemptions. Any excess fee proceeds will be
added to the Fund's capital. Total redemption fee proceeds for the six months
ended June 30, 2000 were $11,109. The amount available for offset against Fund
expenses was $11,109 and is set forth in the statement of operations.
4.Capital Stock
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Six months ended Year ended
June 30, 2000 December 31,
(unaudited) 1999
---------------------- ---------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold............................. 1,288,942 $14,918,171 10,000 $100,000
Shares redeemed......................... (132,398) (1,479,320) -- --
--------- ----------- ------ --------
Net increase............................ 1,156,544 $13,438,851 10,000 $100,000
========= =========== ====== ========
</TABLE>
7
<PAGE>
Pilgrim Global Technology Fund, Inc.
Notes to Financial Statements
June 30, 2000 (unaudited) and December 31, 1999 (continued)
5.Investment Transactions
The cost of purchases and proceeds from sales of securities for the six months
ended June 30, 2000, excluding short-term securities, were $26,841,728 and
$14,583,259, respectively.
At June 30, 2000, the aggregate gross unrealized appreciation for all
securities in which there is an excess of value over tax cost amounted to
$1,189,242 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $2,735,026.
6.Investment and Concentration Risks
The Fund's investments in foreign securities may involve risks not present in
domestic investments. Since foreign securities may be denominated in a foreign
currency and involve settlement and pay interest or dividends in foreign
currencies, changes in the relationship of these foreign currencies to the
U.S. dollar can significantly affect the value of the investments and earnings
of the Fund. Foreign investments may also subject the Fund to foreign
government exchange restrictions, expropriation, taxation or other political,
social or economic developments, all of which could affect the market and/or
credit risk of the investments.
In addition to the risks described above, risks may arise from forward foreign
currency contracts as the result of the potential inability of counterparties
to meet the terms of their contracts.
To the extent any future capital gains are offset by these losses, such gains
may not be distributed to shareholders.
7.Subsequent Events
Effective on July 26, 2000, Lexington Global Asset Managers, Inc. was acquired
by ReliaStar Financial Corp. ("ReliaStar"). In conjunction with the
acquisition and following approval by the Fund's Board of Directors and
shareholders, Pilgrim Investments, Inc., an indirect, wholly owned subsidiary
of Reliastar, was appointed to the role of investment adviser to the Fund
effective July 26, 2000. Pilgrim Securities, Inc., also an indirect, wholly
owned subsidiary of Reliastar, was appointed distributor to the Fund on that
date as well.
On May 1, 2000, ReliaStar Financial Corp. (NYSE:RLR), the indirect parent
company of Pilgrim Investments, Inc., Adviser to the Funds, and Pilgrim
Securities, Inc., Distributor to the Funds, entered into an agreement under
which it will be acquired by ING Groep N.V. (NYSE:ING). ING Groep N.V. is a
global financial institution active in the field of insurance, banking, and
asset management in more than 60 countries, with almost 90,000 employees.
Completion of the acquisition is contingent upon, among other things, approval
by the Directors/Trustees of the Pilgrim Funds and certain shareholder and
regulatory approvals. The closing of the acquisition is expected to occur
during the third quarter of 2000.
8
<PAGE>
Pilgrim Global Technology Fund, Inc.
Financial Highlights
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
Six months ended
June 30, 2000
(unaudited)
----------------
<S> <C>
Net asset value, beginning of period.......................... $10.00
------
Income (loss) from investment operations:
Net investment loss.......................................... (0.07)
Net realized and unrealized gain on investments and foreign
currencies.................................................. 0.55
------
Total income from investment operations....................... 0.48
------
Net asset value, end of period................................ $10.48
======
Total return.................................................. 9.86%*
Ratio to average net assets:
Expenses, before reimbursement and redemption fee proceeds... 5.50%*
Expenses, net of reimbursement and redemption fee proceeds... 2.50%*
Net investment loss, before reimbursement and redemption fee
proceeds.................................................... (4.76)%*
Net investment loss.......................................... (1.76)%*
Portfolio turnover rate....................................... 312.27%*
Net assets, end of period (000's omitted)..................... $12,226
</TABLE>
--------
* Annualized.
9
<PAGE>
PILGRIM GLOBAL TECHNOLOGY
FUND, INC.
Investment Adviser All Shareholder requests for services of
Pilgrim Investments, Inc. any kind should be sent to:
40 North Central Avenue
Suite 1200 Transfer Agent
Phoenix, Arizona 85004-4408 Lexington Funds
c/o DST Systems, Inc.
Distributor P.O. Box 219368
Pilgrim Securities, Inc. Kansas City, Missouri 64121-6368
40 North Central Avenue
Suite 1200 Or call toll free
Phoenix, Arizona 85004-4408 Service and Sales: 1-800-526-0056
www.lexingtonfunds.com
This report has been prepared for the information of the shareholders of Pilgrim
Global Technology Fund, Inc. and is authorized for distribution to the public
only if it is accompanied or preceded by a currently effective prospectus which
sets forth expenses and other material information. LEX282-SAR6/00
