(Left Column)
Dear Shareholders:
-------------------------------------------------------------------------------
Money market yields were relatively high during the first half of 1995.
Beginning in the Spring of 1994, the Federal Reserve steadily pushed short term
interest rates higher. This effort was designed to slow economic growth and
reduce the risk of higher inflation. The Federal Funds rate-the interest rate
banks charge each other for overnight loans-increased from 3% to about 6% by
March, 1995. The Federal Funds rate is "the" basic money market interest rate.
Money market fund investors earned between 5% and 6% during the first half of
1995. The Lexington Money Market Trust returned 5.14%*. Given the 3% inflation
level that prevailed during the period, this was an excellent real rate of
return.
Now, the Federal Reserve has placed us firmly on the interest rate downslope.
The economic reports for the second quarter of 1995 clearly indicate that the
economy has slowed. In fact, many forecasters predict a decline in Gross
Domestic Product (GDP) for the period. So, the Fed responded by lowering short
term interest rates by one-quarter of a percentage point in early July to 5.75%.
Historically, the Federal Reserve has not been quick to reverse course.
Investors should anticipate stable to lower money market yields in the months
ahead.
The market already discounts a fairly rapid decline in interest rates. For
example, one-year U.S. Treasury bills now yield about a tenth of a percentage
point less than three-month Treasury bills. On average, these longer-dated
securities provided higher yields than their shorter cousins by 50 basis points.
We see a much slower and more muted decline in interest rates than is
anticipated by the market. So, we are
(Right Column)
keeping the average maturity of the Lexington Money Market Trust relatively
short to take advantage of the higher returns on one and two month investments.
At the close of the June quarter, the Trust's average maturity was 17 days.
We don't expect interest rates to fall to their 1993 lows. Then, Federal Funds
held at 3% for nearly a year. Such a return today would be inconsistent with:
(1) the current 3%-plus inflation; (2) the relatively high employment and
capacity utilization levels; and, (3) the low value of the U.S. Dollar compared
with that of the Yen and the Deutschemark. Many economists now predict short
term interest rates will be 5% or lower by year end. (That would imply 4% to
4.5% yields from most money market mutual funds.) We think the decline in yields
will be more modest especially if economic growth recovers during the second
half of this year.
We appreciate your continued support and welcome the opportunity to discuss
any questions you may have about your investment.
Sincerely,
Denis P. Jamison Robert M. DeMichele
Portfolio Manager President
July, 1995 July, 1995
*The average annual yield for the seven day period ended June 30, 1995 was
5.02%. Shares of the Trust are not insured or guaranteed by the U.S. Government
and there can be no assurance that the Trust will be able to maintain a stable
net asset value of $1.00 per share.
1
<PAGE>
Lexington Money Market Trust
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
Yield to
Maturity
Principal Maturity on Date of Value
Amount Security Date Purchase (Note 1)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMERCIAL PAPER: 78.1%
$1,600,000 American Express Credit Corporation ........................... 07/17/95 6.07% $ 1,595,790
1,600,000 American Express Credit Corporation ........................... 07/24/95 6.05 1,593,938
1,200,000 Ameritech Corporation ......................................... 07/28/95 6.51 1,194,393
1,200,000 Anheuser Busch Company ........................................ 07/12/95 6.01 1,197,840
2,200,000 Coca Cola Company ............................................. 07/14/95 5.94 2,195,376
3,400,000 Commercial Credit Corporation ................................. 07/18/95 6.03 3,390,479
4,000,000 Echlin Inc. ................................................... 07/20/95 6.06 3,987,439
2,300,000 Ford Motor Credit Corporation ................................. 07/28/95 6.08 2,289,702
1,200,000 General Electric Capital Corporation .......................... 07/03/95 6.06 1,199,604
2,800,000 General Electric Capital Corporation .......................... 07/19/95 5.98 2,791,796
2,000,000 H.J. Heinz Company ............................................ 07/27/95 6.00 1,991,507
2,000,000 H.J. Heinz Company ............................................ 08/01/95 6.03 1,989,822
4,000,000 Hercules Inc. ................................................. 07/03/95 5.99 3,998,693
3,100,000 Indianapolis Power & Light Company ............................ 07/07/95 5.99 3,096,962
4,000,000 J.C. Penney Funding Inc. ...................................... 07/05/95 6.07 3,997,360
4,000,000 John Deere Capital Corporation ................................ 07/31/95 6.04 3,980,267
3,800,000 KN Energy Inc. ................................................ 07/26/95 6.14 3,784,088
4,000,000 Michigan Underground Storage Tank
Financial Assurance Authority ............................... 07/10/95 6.27 3,993,880
4,000,000 Pepsico Inc. .................................................. 07/07/95 6.04 3,996,053
2,500,000 Procter & Gamble Company ...................................... 07/11/95 6.03 2,495,903
4,000,000 Prudential Funding Corporation ................................ 07/26/95 6.05 3,983,528
2,400,000 Tampa Electric Company ........................................ 07/11/95 6.06 2,396,033
3,200,000 Toys "R" Us Inc. .............................................. 07/12/95 6.02 3,194,221
2,900,000 USAA Capital Corporation ...................................... 07/14/95 6.03 2,893,800
1,300,000 Xerox Corporation ............................................. 07/21/95 6.03 1,295,732
2,700,000 Xerox Corporation ............................................. 07/25/95 6.05 2,689,326
-----------
TOTAL COMMERCIAL PAPER (cost $ 71,213,532) .................... 71,213,532
-----------
ADJUSTABLE RATE NOTES: 9.5%
4,500,000 Baylis Group Partnership Series '92 Societe Generale* ......... 01/01/10 4.60 4,500,000
4,200,000 Community Health System, Inc. Series A
First Union National Bank* .................................. 10/01/03 4.65 4,200,000
-----------
TOTAL ADJUSTABLE RATE NOTES (cost $8,700,000) ................. 8,700,000
-----------
</TABLE>
2
<PAGE>
Lexington Money Market Trust
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1995 (unaudited) (continued)
<TABLE>
<CAPTION>
Yield to
Maturity
Principal Maturity on Date of Value
Amount Security Date Purchase (Note 1)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS: 3.6%
$ 200,000 Treasury Bills ................................................ 07/06/95 6.35% $ 199,824
100,000 Treasury Bills ................................................ 08/10/95 6.35 99,323
700,000 Treasury Bills ................................................ 08/24/95 5.42 694,425
2,300,000 Treasury Bills ................................................ 08/24/95 5.79 2,280,542
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(cost $3,274,114) 3,274,114
-----------
OTHER U.S. GOVERNMENT OBLIGATION: 2.4%
2,200,000 Federal Home Loan Mortgage Corporation
(cost $2,187,928) ........................................... 08/04/95 5.94 2,187,928
-----------
YANKEE CERTIFICATE OF DEPOSIT: 4.4%
4,000,000 Bayerische Vereinsbank, New York Branch
(cost $4,000,000) ........................................... 07/13/95 6.01 4,000,000
-----------
TOTAL INVESTMENTS: 98.0% (cost $89,375,574(D) 89,375,574
Other assets in excess of liabilities: 2.0% 1,787,126
-----------
TOTAL NET ASSETS: 100.0% (equivalent to
$1.00 per share on 91,162,700 shares outstanding) ........... $91,162,700
===========
<FN>
*Seven day demand Floating Rate Note.
(D)Aggregate cost for Federal income tax purposes is identical.
</FN>
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
3
<PAGE>
Lexington Money Market Trust
Statement of Assets and Liabilities
June 30, 1995 (unaudited)
<TABLE>
<S> <C>
Assets
Investments, at value (cost $89,375,574) (Note 1) ............................... $89,375,574
Cash (Note 4) ................................................................... 267,534
Receivable for shares sold ...................................................... 2,049,185
Interest receivable ............................................................. 58,816
-----------
Total Assets ........................................................ 91,751,109
-----------
Liabilities
Due to Lexington Management Corporation (Note 2) ................................ 17,291
Payable for shares redeemed ..................................................... 482,666
Accrued expenses ................................................................ 88,452
-----------
Total Liabilities ................................................... 588,409
-----------
Net Assets (equivalent to $1.00 per share on 91,162,700 shares outstanding)
(Note 3) ...................................................................... $91,162,700
===========
Net Assets consist of:
Shares of beneficial interest-$.10 par value .................................... $ 9,116,270
Additional paid-in capital ...................................................... 82,046,430
-----------
Net Assets .......................................................... $91,162,700
===========
</TABLE>
Lexington Money Market Trust
Statement of Operations
Six months ended June 30, 1995 (unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Interest income ...................................................... $ 3,006,574
Expenses
Investment advisory fee (Note 2) ............................... $247,888
Accounting and shareholder services expense (Note 2) ........... 92,065
Custodian and transfer agent expenses .......................... 98,175
Printing and mailing ........................................... 42,940
Directors' fees and expenses ................................... 5,650
Audit and Legal ................................................ 12,106
Registration fees .............................................. 18,705
Computer processing fees ....................................... 8,310
Other expenses ................................................. 26,156
--------
Total expenses ........................................ 551,995
Less: expenses recovered under contract with
investment adviser (Note 2) ......................... 55,890 496,105
-------- -----------
Net investment income ................................. 2,510,469
-----------
Increase in Net Assets Resulting from Operations ..................... $ 2,510,469
===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
4
<PAGE>
Lexington Money Market Trust
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six months
ended
June 30, 1995 Year ended
(unaudited) December 31, 1994
------------ ------------
<S> <C> <C>
Net investment income .................................................. $ 2,510,469 $ 3,344,928
Dividends to shareholders from net investment income ................... (2,510,469) (3,344,928)
Increase (decrease) in net assets from share transactions (Note 3) ..... (20,642,029) 17,086,315
------------ ------------
Net increase (decrease) in net assets .................................. (20,642,029) 17,086,315
Net Assets
Beginning of period ................................................ 111,804,729 94,718,414
------------ ------------
End of period ...................................................... $ 91,162,700 $111,804,729
============ ============
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
Lexington Money Market Trust
Notes to Financial Statements
June 30, 1995 (unaudited) and December 31, 1994
1. Significant Accounting Policies
Lexington Money Market Trust (the "Trust") is an open end diversified management
investment company registered under the Investment Company Act of 1940, as
amended. The following is a summary of significant accounting policies followed
by the Trust in the preparation of its financial statements:
Securities Security transactions are accounted for on a trade date basis.
Investments are valued at amortized cost, which approximates market value. Under
this valuation method, a portfolio instrument is valued at cost and any discount
or premium is amortized on a constant basis to the maturity of the instrument.
Interest income is accrued as earned.
Federal Income Taxes It is the Trust's intention 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 has been made.
Dividends Dividends are declared daily from net investment income and net
realized gain (loss) on investments.
2. Investment Advisory Fees and Other Transactions with Affiliate
The Trust pays an investment advisory fee to Lexington Management Corporation
(LMC) at the annual rate of 0.50% of that portion of the Trust's average daily
net assets up to $500 million and .45% of its average daily net assets in excess
of $500 million. LMC is required to reimburse the Trust for any expenses,
including the investment adviser's fee but excluding interest and taxes, in
excess of 1% of the Trust's average daily net assets. Reimbursement for the six
months ended June 30, 1995 amounted to $55,890 and is set forth in the statement
of operations.
The Trust also reimburses LMC for certain expenses, including accounting and
shareholder servicing costs, which are incurred by the Trust but paid by LMC.
5
<PAGE>
Lexington Money Market Trust
Notes to Financial Statements
June 30, 1995 (unaudited) and December 31, 1994 (continued)
3. Shares of Beneficial Interest
Transactions (at $1.00 per share) in shares were as follows:
Six months
ended Year ended
June 30, 1995 December 31,
(unaudited) 1994
------------ ------------
Shares sold 81,565,419 205,550,508
Shares issued to shareholders
on reinvestment of dividends 2,290,122 3,096,009
------------ ------------
83,855,541 208,646,517
Shares redeemed (104,497,570) (191,560,202)
------------ ------------
Net increase (decrease) (20,642,029) 17,086,315
============ ============
4. Cash
In order to facilitate the clearing process for redemptions by check, the Trust
maintains a compensating balance with its transfer agent. At June 30, 1995, this
compensating balance amounted to $210,000 and is included in cash in the
statement of assets and liabilities.
------------
Lexington Money Market Trust
Financial Highlights
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
Six months
ended Year ended December 31,
June 30, 1995 -----------------------------------------------------
(unaudited) 1994 1993 1992 1991
--------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income ..................... 0.0252 0.0330 0.0230 0.0299 0.0532
Less distributions:
Dividends from net investment income ...... (0.0252) (0.0330) (0.0230) (0.0299) (0.0532)
------- ------- ------- ------- -------
Net asset value, end of period .............. $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total return ................................ 5.14%* 3.35% 2.32% 3.03% 5.45%
Ratio to average net assets:
Expenses, before reimbursement .......... 1.11%* 1.02% 1.00% 1.03% 1.02%
Expenses, net of reimbursement .......... 1.00%* 1.00% 1.00% 1.00% 1.00%
Net investment income,
before reimbursement .................. 4.95%* 3.30% 2.30% 2.99% 5.35%
Net investment income,
including reimbursement ............... 5.06%* 3.32% 2.30% 3.02% 5.37%
Net assets, end of period (000's omitted) ... $91,163 $111,805 $94,718 $111,453 $143,137
<FN>
*Annualized
</FN>
</TABLE>
6
<PAGE>
(Right Column)
The Lexington Group of
No Load Investment Companies
Investment objectives range from growth and income to high yield and liquidity
in money market instruments. Selection depends on the investor's current
financial objectives and the degree of risk one is willing to assume.
Lexington Worldwide Emerging Markets Fund, Inc.-Seeks long-term growth of
capital primarily through investment in equity securities of companies domiciled
in, or doing business in, emerging countries and emerging markets.
Lexington Global Fund, Inc.-Seeks long-term growth of capital primarily through
investment in common stocks of companies domiciled in foreign countries and the
United States.
Lexington International Fund, Inc.-Seeks long-term growth of capital through
investment in companies domiciled in foreign countries.
Lexington Crosby Small Cap Asia Growth Fund, Inc.-Seeks long-term capital
appreciation through investment in companies domiciled in the Asia Region with a
market capitalization of less than $1 billion.
Lexington Ramirez Global Income Fund-Seeks high current income. Capital
appreciation is a secondary objective. The Fund invests in a combination of
foreign and domestic high-yield, lower rated debt securities.
Lexington Goldfund, Inc.-Seeks capital appreciation through investment in gold
bullion and shares of gold mining companies.
Lexington Growth and Income Fund, Inc.-Seeks capital appreciation over the
long-term through investments in the stocks of large, ably managed and well
financed companies.
Lexington Corporate Leaders Trust Fund-Seeks capital growth and reasonable
income through investment in an equal number of shares of an established list of
American blue chip corporations.
Lexington Convertible Securities Fund-Seeks total return by providing capital
appreciation, current income and conservation of capital through investments in
a diversified portfolio of securities convertible into shares of common stock.
Lexington GNMA Income Fund, Inc.-Seeks to achieve a high level of current
income, consistent with liquidity and safety of principal, through investment
primarily in mortgage-backed GNMA (``Ginnie Mae") certificates that are
guaranteed as to the timely payment of principal and interest by the United
States Government.
Lexington Short-Intermediate Government Securities Fund, Inc.-Seeks current
income as is consistent with the preservation of capital by investing in a
portfolio of U.S. Government Securities with a dollar-weighted average maturity
in its portfolio in a range of two to five years.
Lexington Tax Free Money Fund, Inc.-Seeks current income exempt from Federal
income taxes while maintaining stability of principal, liquidity and
preservation of capital.
For more complete information about any of the Lexington Funds and a prospectus
which includes management fee and expenses call the distributor toll-free at
1-800-526-0056. Read the prospectus carefully before you invest or send money.
7
(Left Column)
LEXINGTON
INVESTOR SERVICES
--------------------------------------------------------------------------------
As a Lexington shareholder, you should be aware of the many services available
to you.
No Load-The Lexington Funds are no load funds. That is, investments and
redemptions are made without any sales charges, commissions or redemption fees.
------------
Free Telephone Exchange-Investments in the Lexington Funds may be exchanged for
shares of a different Lexington Fund at any time.
------------
Check Writing Privileges-Lexington Money Market Trust, Lexington Tax Free Money
Fund and Lexington Short-Intermediate Government Securities Fund permit
investors immediate access to their funds with check writing for withdrawals
from their account.
------------
Tax Sheltered Plans-IRA, Keogh, Pension, and Profit Sharing Prototype Plans are
available to qualified individuals. These plans offer investment flexibility
through the Share Exchange Service, simplified record keeping, convenience and
investment supervision.
------------
Custodial Accounts for Minors-Investments may be made on behalf of minors under
the Uniform Gifts to Minors Act currently in effect in all states.
------------
Systematic Withdrawal Plan-An investor may elect to receive a fixed amount from
his or her account each month or quarter, subject to certain minimums.
------------
Complete Record Keeping-A statement is provided for every transaction in
addition to a year-end statement with tax information.
<PAGE>
(Left Column)
Lexington
Money Market Trust
Investment Adviser
--------------------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Distributor
--------------------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
---------------------------------------------
All shareholder requests for services of
any kind should be sent to:
Transfer Agent
---------------------------------------------
STATE STREET BANK AND
TRUST COMPANY
c/o National Financial Data Services
1004 Baltimore
Kansas City, Missouri 64105
Or call toll free:
Service and Sales: 1-800-526-0056
24 Hour Account Information:
1-800-526-0052
---------------------------------------------
--------------------------------------------------------------
(800) 526-0052
"LEXLINE"
24 hour toll-free telephone access to your
Lexington Fund account
Price/Yield * Account Balances * Exchanges *
Last Transactions * Total Return * Duplicate Statements
--------------------------------------------------------------
This report has been prepared for the information of the
shareholders of Lexington Money Market Trust 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.
(Right Column)
LEXINGTON
-------------------------------------------------
LEXINGTON
MONEY
MARKET
TRUST
(filled box)
Seeks a high level of current
income consistent with preservation
of capital and liquidity through
investments in interest bearing
short term money market
instruments.
(filled box)
SEMI-ANNUAL REPORT
JUNE 30, 1995
The Lexington Group
of No Load
Investment Companies
-------------------------------------------------
