LEXINGTON
LEXINGTON
MONEY
MARKET
TRUST
- --------------------------------------------------------------------------------
Seeks a high level of current
income consistent with preservation
of capital and liquidity through
investments in interest bearing
short term money market
instruments.
- --------------------------------------------------------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 1997
The Lexington Group
of No Load
Investment Companies
<PAGE>
DEAR SHAREHOLDERS:
- --------------------------------------------------------------------------------
Money market yields showed little change during the first half of 1997.
The annualized yield of the Lexington Money Market Trust was about 4.5%* in the
first six months of the year. The small hike in the Federal Funds rate to 5.5%
in February had minimal impact on other money market yields as most investors
saw no risk of a sustained increase in monetary restraint by the Federal
Reserve. Shareholders should anticipate a stable dividend payout during the
remainder of 1997.
Strong economic growth has not produced the kind of inflationary pressures
which would prompt the Federal Reserve to raise interest rates. After the first
quarter 5.9% gain in Gross Domestic Product and the drop in the unemployment
rate to 4.8%, economists warned of increased inflation risk. Perhaps these risks
prompted the 25 basis point increase in the Federal Funds rate in February.
Nonetheless, inflation has been moribund. In fact, the recently released
Producer Price Index for June showed a 0.1% decrease in the price level, the
sixth consecutive monthly decline. The current PPI Index is lower than it was a
year ago, indicating deflation.
A number of factors probably account for the low level of inflation. These
include the strength of the U.S. dollar, excess labor and production capacity
outside the U.S., and reduced inflationary expectations of domestic consumers.
Accordingly, businesses have little power to raise prices. While some modest
uptick in the rate of inflation is likely in the second half of 1997, the
year-on-year change in the Consumer Price Index is likely to remain below 2.5%
We think there is some risk of lower monthly market rates by year end.
Clearly, the Federal Reserve would have every reason to act quickly if economic
growth shows signs of softening. Current rates of inflation, commodity price
changes, and monetary growth seem more consistent with a recesssion than the
boom we are now experiencing. Accordingly, we are increasing the average
maturity of the Trust's portfolio to lock in today's interest rates. At the end
of June, the Trust's maturity was 49 days versus 26 days at the start of the
year. This extension was achieved through the purchase of U.S. Treasury bills
and government agency obligations. These securities now account for 11% of the
Trust's holdings. The remainder of the portfolio consists of top-rated
commercial paper and variable rate demand notes.
Sincerely,
/s/ Denis P. Jamison /s/ Robert M. DeMichele
- ------------------------------- -------------------------------
Denis P. Jamison Robert M. DeMichele
Portfolio Manager President
August, 1997 August, 1997
*The average annual yield for the seven day period ended June 30, 1997 was
4.66%. Shares of the Fund are not insured or guaranteed by the U.S. Government
and there can be no assurance that the Fund will be able to maintain a stable
net asset value of $1.00 per share.
<PAGE>
LEXINGTON MONEY MARKET TRUST
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1997 (unaudited)
<TABLE>
<CAPTION>
Yield to
Maturity
Principal Maturity on Date of Value
Amount Security Date Purchase (Note 1)
- ---------------------------------------------------------------------------------------------
COMMERCIAL PAPER: 83.7%
<C> <C> <C> <C> <C>
$ 400,000 American Express Credit Corporation ... 07/08/97 5.64% $ 399,571
1,400,000 American Express Credit Corporation ... 07/10/97 5.51 1,398,072
1,800,000 American Express Credit Corporation ... 07/31/97 5.65 1,791,690
4,000,000 Ameritech Corporation ................. 08/22/97 5.64 3,968,164
4,000,000 Avnet, Inc. ........................... 07/16/97 5.66 3,990,750
4,200,000 Engelhard Corporation ................. 07/15/97 5.81 4,190,772
4,000,000 Florida Power Corporation ............. 07/23/97 5.64 3,986,482
1,100,000 Ford Motor Credit Corporation ......... 07/14/97 5.65 1,097,803
200,000 Ford Motor Credit Corporation ......... 07/21/97 5.68 199,384
700,000 Ford Motor Credit Corporation ......... 07/21/97 5.66 697,838
1,300,000 Ford Motor Credit Corporation ......... 07/22/97 5.67 1,295,791
600,000 Ford Motor Credit Corporation ......... 08/12/97 5.67 596,122
4,000,000 Gannett Company ....................... 08/15/97 5.63 3,972,500
3,200,000 General Electric Capital Corporation .. 07/28/97 5.66 3,186,704
700,000 General Electric Capital Corporation .. 08/04/97 5.66 696,337
1,800,000 Goldman Sachs Group ................... 07/08/97 5.74 1,798,023
2,200,000 Goldman Sachs Group ................... 07/09/97 5.66 2,197,287
2,400,000 Hasbro, Inc. .......................... 07/18/97 5.78 2,393,631
3,000,000 IBMCredit Corporation ................. 07/11/97 5.61 2,995,417
1,950,000 Kellogg Company ....................... 07/11/97 5.60 1,947,020
4,000,000 McGraw Hill ........................... 09/23/97 5.71 3,948,200
3,800,000 Merrill Lynch & Company, Inc. ......... 07/03/97 5.64 3,798,833
3,800,000 MetLife Funding, Inc. ................. 07/01/97 5.68 3,800,000
1,300,000 South Carolina Electric ............... 07/17/97 5.62 1,296,810
3,800,000 Tampa Electric Company ................ 07/28/97 5.62 3,784,268
1,500,000 USAA Capital Corporation .............. 07/17/97 5.52 1,496,320
2,500,000 USAA Capital Corporation .............. 08/28/97 5.67 2,477,686
2,500,000 U.S. Central Credit ................... 07/18/97 5.65 2,493,483
1,500,000 Winn-Dixie Stores, Inc. ............... 08/19/97 5.68 1,488,669
2,500,000 Winn-Dixie Stores, Inc. ............... 09/11/97 5.55 2,472,250
2,700,000 Xerox Corporation ..................... 07/07/97 5.65 2,697,512
1,300,000 Xerox Corporation ..................... 07/25/97 5.64 1,295,216
----------
TOTAL COMMERCIAL PAPER (cost $73,848,605) 73,848,605
----------
</TABLE>
<PAGE>
LEXINGTON MONEY MARKET TRUST
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1997 (unaudited)(continued)
<TABLE>
<CAPTION>
Yield to
Maturity
Principal Maturity on Date of Value
Amount Security Date Purchase (Note 1)
- ---------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
ADJUSTABLE RATE NOTE: 4.0%
$3,500,000 Community Health System, Inc. Series A
First Union National Bank*
(cost $3,500,000) ...................... 10/01/03 5.95% $3,500,000
----------
----------
U.S. GOVERNMENT OBLIGATION: 7.9%
700,000 Treasury Bills ........................ 03/05/98 5.78 673,680
200,000 Treasury Bills ........................ 03/05/98 5.72 192,563
1,700,000 Treasury Bills ........................ 03/05/98 5.69 1,637,248
1,400,000 Treasury Bills ........................ 02/05/98 5.62 1,354,606
600,000 Treasury Bills ........................ 01/08/98 5.63 583,049
900,000 Treasury Bills ........................ 01/08/98 5.56 874,884
1,700,000 Treasury Bills ........................ 01/08/98 5.53 1,652,648
----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(cost $6,968,678) 6,968,678
----------
OTHER U.S. GOVERNMENT OBLIGATIONS: 3.3%
3,000,000 Federal Home Loan Bank Bond
(cost $2,985,506) ..................... 02/13/98 6.04% 2,985,506
-----------
TOTAL INVESTMENTS: 98.9% (cost $87,302,789+) 87,302,789
Other assets in excess of liabilities: 1.1% 926,837
-----------
TOTAL NET ASSETS: 100.0% (equivalent to $1.00
per share on 88,229,626 shares outstanding) $88,229,626
===========
*Seven day demand Floating Rate Note.
+Aggregate cost for Federal income tax purposes is identical.
</TABLE>
<PAGE>
LEXINGTON MONEY MARKET TRUST
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (unaudited)
ASSETS
Investments, at value (cost $87,302,789) (Note 1) ............ $87,302,789
Cash ......................................................... 137,492
Receivable for shares sold ................................... 1,081,679
Dividends and interest receivable ............................ 75,597
-----------
Total Assets ........................................... 88,597,557
-----------
LIABILITIES
Due to Lexington Management Corporation (Note 2) ............. 25,700
Payable for shares redeemed .................................. 254,896
Accrued expenses ............................................. 87,335
-----------
Total Liabilities ...................................... 367,931
-----------
NET ASSETS (equivalent to $1.00 per share on
88,229,626 shares outstanding)(Note 3) .................. $88,229,626
===========
NET ASSETS consist of:
Capital stock-- authorized 1,000,000,000 shares,
$.10 par value per share ................................ $ 8,822,964
Paid-in capital-- unlimited authorized shares of
beneficial interest at no par value ..................... 79,406,662
-----------
Total Net Assets ....................................... $88,229,626
===========
LEXINGTON MONEY MARKET TRUST
STATEMENT OF OPERATIONS
Six months ended June 30, 1997 (unaudited)
INVESTMENT INCOME
INTEREST INCOME ..................................................... $2,475,041
EXPENSES
Investment advisory fee (Note 2) ................. $224,436
Transfer agent and shareholder
servicing expense (Note 2) .................. 102,265
Printing and mailing expenses .................... 39,149
Accounting expenses (Note 2) ..................... 34,209
Registration fees ................................ 18,725
Professional fees ................................ 12,670
Computer processing fees ......................... 8,688
Custodian expense ................................ 8,507
Directors' fees and expenses ..................... 6,750
Other expenses ................................... 23,061
-------
Total expenses .............................. 478,460
Less: expenses recovered under
contract with investment adviser (Note 2) . 28,979 449,481
-------- ----------
Net investment income .................................... 2,025,560
----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................... $2,025,560
==========
The Notes to Financial Statements
are an integral part of these statements.
<PAGE>
LEXINGTON MONEY MARKET TRUST
STATEMENT OF CHANGES IN NET ASSETS
Six months ended Year ended
June 30, 1997 December 31,
(unaudited) 1996
----------- -----------
Net investment income .................. $ 2,025,560 $ 4,279,666
Distributions to shareholders from
net investment income ............. (2,025,560) (4,279,666)
Increase (decrease) from capital
share transactions (Note 3) ....... (9,296,767) 8,740,435
----------- -----------
Net increase (decrease) in net assets .. (9,296,767) 8,740,435
NET ASSETS
Beginning of period .............. 97,526,393 88,785,958
----------- -----------
End of period .................... $88,229,626 $97,526,393
=========== ===========
The Notes to Financial Statements
are an integral part of these statements.
LEXINGTON MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (unaudited) and December 31, 1996
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 Trust's investment objective is to seek a high level of current
income from short-term investments as is consistent with the preservation of
capital and liquidity. The following is a summary of significant accounting
policies followed by the Trust in the preparation of its financial statements:
INVESTMENTS 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 is required.
DIVIDENDS Dividends are declared daily from the total of net investment
income and net realized gain (loss) on investments.
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 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 Trust pays an investment advisory fee to Lexington Management Corporation
("LMC") at an annual rate of 0.50% of the Trust's average daily net assets up to
$500 million and 0.45% 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 1.0% of
the Trust's average daily net assets. Reimbursement for the six months ended
June 30, 1997 amounted to $28,979 and is set forth in the statement of
operations.
<PAGE>
LEXINGTON MONEY MARKET TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (unaudited) and December 31, 1996 (continued)
The Trust reimbursed LMC for certain expenses, including accounting and
shareholder servicing costs of $73,124 which are incurred by the Trust, but paid
by LMC.
3. SHARES OF BENEFICIAL INTEREST
Transactions (at $1.00 per share) in shares were as follows:
Six months ended Year ended
June 30, 1997 December 31,
(unaudited) 1996
----------- -----------
Shares sold ............................ 47,198,798 159,959,288
Shares issued to shareholders
on reinvestment of dividends ......... 1,861,608 3,877,797
------------ ------------
49,060,406 163,837,085
Shares redeemed ........................ (58,357,173) (155,096,650)
------------ ------------
Net increase (decrease) ................ (9,296,767) 8,740,435
============ ============
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, 1997, this
compensating balance amounted to $101,100 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
Six months ended For the year ended December 31,
June 30, 1997 ------------------------------------------------------------
(unaudited) 1996 1995 1994 1993
---------- -------- -------- -------- --------
<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 0.0224 0.0441 0.0495 0.0330 0.0230
Less distributions:
Distributions from net investment income (0.0224) (0.0441) (0.0495) (0.0330) (0.0230)
------- ------- ------- ------- -------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= =======
Total return 4.56%* 4.50% 5.06% 3.35% 2.32%
Ratio to average net assets:
Expenses, before reimbursement
or waivers 1.06%* 1.04% 1.08% 1.02% 1.00%
Expenses, net of reimbursement
or waivers 1.00%* 1.00% 1.00% 1.00% 1.00%
Net investment income,
before reimbursement or waivers 4.44%* 4.37% 4.87% 3.30% 2.30%
Net investment income, 4.50%* 4.41% 4.95% 3.32% 2.30%
Net assets, end of period (000's omitted) $88,230 $97,526 $88,786 $111,805 $94,718
* Annualized
</TABLE>
<PAGE>
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 permits 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.
THE LEXINGTON GROUP OF
NO LOAD INVESTMENT COMPANIES
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 TROIKA DIALOG RUSSIA FUND, INC.--Seeks long-term capital appreciation
through investments primarily in the equity securities of Russian companies.
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 SMALLCAP VALUE FUND, INC.--Seeks long-term capital appreciation
through investment in common stocks of companies domiciled in the United States
with a market capitalization of less than $1 billion.
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 MONEY MARKET TRUST--Seeks a high level of current income consistent
with preservation of capital and liquidity through investments in interest
bearing short-term money market instruments.
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.
<PAGE>
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, Missori 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 o Account Balances o Exchanges o
Last Transactions o Total Return o 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.
