================================================================================
DEAR PARTICIPATION HOLDERS:
We are pleased to report the payment of $0.12 per participation from
dividend income for the six-month period ended June 30, 1998. In addition we are
able to report distributions per participation of $0.26 from realized security
gains and $0.17 from return of capital. The Trust appreciated by 11.58% for the
period compared with a rise of 12.11% for the average growth and income Fund as
reported by Lipper Analytical Services, Inc. and a rise of 14.1% for the
unmanaged Dow Jones Industrial Average with dividends reinvested. The realized
security gains and return of capital component are primarily attributable to the
sale of shares received as a result of a stock split for Lucent Technologies,
Inc.
The returns came despite a background of collapsing Asian economies and the
resultant heightened concern for U.S. corporate earnings growth. That the stock
market has done as well as it has in the face of virtually flat corporate
earnings says much about the other positive forces underpinning stock prices.
These include low inflation and interest rates, liquidity and strong inflows
into equity mutual funds.
The Trust was most affected during the period by weakness in the energy
sector due to decade low oil prices and underperformance by its holdings in
railroads. As we move into the second half of 1998, we expect oil prices to firm
up as the impact of production cuts and greater demand for oil begins to take
hold. Also the Trust's holdings in railroads continues to underperform as Union
Pacific Corporation seeks to end one of the worst railroad traffic jams in U.S.
history. The problems began last year when Union Pacific absorbed its former
competition Southern Pacific Railroad. We expect the gridlock in the rail system
to improve in the second half of 1998. This will be good news for Burlington
Northern Santa Fe as well.
On June 1, 1998 the Trust Indenture was amended to eliminate the
requirement to sell shares received by the Trust as the result of a "Stock
Split." Previously, such shares were sold and the proceeds distributed to
Participation Holders as a cash dividend. By not selling these shares, the Trust
is able to maintain the same capital weighting in the security and effectively
eliminate capital gains distributions attributable to the splits. The Trust
which has a buy and hold investment strategy will become even more tax
efficient. This represents a substantial benefit to investors.
The U.S. economy is demonstrating tremendous resilience. With strong growth
continuing despite the recession in Asia, rising wages and a very tight labor
market, the Federal Reserve could see the need to raise interest rates later in
the year.
Sincerely,
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
LAWRENCE KANTOR ROBERT M. DEMICHELE
Portfolio Manager Chairman of the Board
July, 1998 LEXINGTON MANAGEMENT CORPORATION
July, 1998
* 17.65%, 19.42% and 16.84% are the one, five and ten year average annual
standard total returns, respectively, for the period ended June 30, 1998.
Investment return and principal value of an investment will fluctuate so that
an investor's participations, when redeemed, may be worth more or less at
their original cost. Total return represents past performance.
================================================================================
<PAGE>
[GRAPHIC OMITTED]
- --------------------------------------------------------------------------------
IF YOU HAD INVESTED $10,000 571|M/2 YEARS AGO. . .
[GRAPHIC OMITTED]
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $10,000
WITH INCOME DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
REINVESTED
The table on the following page covers the period from March 16, 1941 to June
30, 1998. This period was one of generally rising common stock prices. The
results shown should not be considered as a representation of the dividends and
other distributions which may be realized from an investment made in the Trust
today. A program of the type illustrated does not assure a profit or protect
against depreciation in declining markets.
Long-term investments in industry, such as Lexington Corporate Leaders Trust
Fund, tend to move with the basic inflationary trend and offer your dollars an
opportunity to grow.
2
<PAGE>
LEXINGTON CORPORATE LEADERS TRUST FUND
================================================================================
The cumulative cost figure represents the initial investment of $10,000 plus the
cumulative amount of dividends reinvested. Dividends and other distributions
were assumed to have been reinvested in additional participations at the
reinvestment price. The value of participations "Initially Acquired" includes
the value of additional participations created as a result of the reinvestment
of that portion of the semi-annual distributions representing "A Return of
Capital" (the proceeds from securities sold representing the cost of securities
sold, and other principal transactions). No adjustment has been made for any
income taxes payable by Holders on dividends or other distributions reinvested
in additional participations.
The dollar amounts of distributions from realized gains (determined at the
Trust level) reinvested in additional participations were: 1941-None; 1942-None;
1943-None; 1944-$3; 1945-$450; 1946-None; 1947-$44; 1948-$338; 1949-None;
1950-$283; 1951-$796; 1952-$185; 1953-$10; 1954-$812; 1955-$474; 1956-$4,347;
1957-$48; 1958-$17; 1959-$3,032; 1960-$2,371; 1961-$2,118; 1962-$2,749;
1963-$735; 1964-$3,138; 1965-$9,035; 1966-$1,077; 1967-$48; 1968-$4,121;
1969-$102; 1970-$644; 1971-$1,862; 1972-$2,300; 1973-None; 1974-None;
1975-None; 1976-$5,071; 1977-$4,161; 1978-None; 1979-None; 1980-$5,182;
1981-$31,473; 1982-None; 1983-$18,602; 1984-$8,258; 1985-$39,496; 1986-$64,138;
1987-$69,182; 1988-$49,350; 1989-$99,410; 1990-$148,727; 1991-$39,773;
1992-$52,819; 1993-$46,262; 1994-$160,296; 1995-$7,696; 1996-$62,612;
1997-$664,104; 1998-83,389; Total-$1,701,140.
- --------------------------------------------------------------------------------
VALUE OF PARTICIPATIONS
<TABLE>
<CAPTION>
CUMULATIVE COST
AMOUNT OF OF PARTICIPATIONS CUMULATIVE
DIVIDENDS PURCHASED COST
YEAR REINVESTED THROUGH INCLUDING
ENDED SEMI- REINVESTMENT REINVESTED
DEC. 31 ANNUALLY OF DIVIDENDS DIVIDENDS
- --------------------------------------------------------
<S> <C> <C> <C>
1941* -- -- $ 10,000
1942 -- -- 10,000
1943 $ 190 $ 190 10,190
1944 192 382 10,382
1945 215 597 10,597
1946 187 784 10,784
1947 370 1,154 11,154
1948 513 1,668 11,668
1949 509 2,177 12,177
1950 804 2,980 12,980
1951 1,012 3,992 13,992
1952 1,054 5,046 15,046
1953 1,217 6,263 16,263
1954 1,378 7,641 17,641
1955 1,599 9,240 19,240
1956 1,790 11,030 21,030
1957 1,910 12,940 22,940
1958 2,134 15,075 25,075
1959 2,184 17,258 27,258
1960 2,416 19,674 29,674
1961 2,697 22,371 32,371
1962 2,926 25,296 35,296
1963 3,243 28,540 38,540
1964 3,553 32,093 42,093
1965 3,855 35,948 45,948
1966 4,571 40,519 50,519
1967 5,060 45,579 55,579
1968 5,573 51,153 61,153
1969 5,915 57,068 67,068
1970 6,009 63,077 73,077
1971 6,190 69,267 79,267
1972 6,585 75,852 85,852
1973 7,371 83,223 93,223
1974 8,196 91,419 101,419
1975 9,139 100,557 110,557
1976 9,666 110,223 120,223
1977 11,237 121,460 131,460
1978 13,283 134,743 144,743
1979 15,804 150,547 160,547
1980 19,369 169,916 179,916
1981 21,822 191,738 201,738
1982 24,452 216,190 226,190
1983 25,923 242,114 252,114
1984 28,926 271,040 281,040
1985 31,808 302,848 312,848
1986 39,216 342,064 352,064
1987 40,394 382,458 392,458
1988 71,268 453,726 463,726
1989 45,103 498,829 508,829
1990 51,303 550,132 560,132
1991 55,828 605,960 615,960
1992 55,460 661,420 671,420
1993 54,505 715,925 725,925
1994 60,332 776,257 786,257
1995 61,329 837,586 847,586
1996 64,546 902,132 912,132
1997 71,379 973,511 983,511
1998 36,463 1,009,974 1,019,974
<CAPTION>
PURCHASED THROUGH PURCHASED
REINVESTMENT OF THROUGH NUMBER
YEAR DISTRIBUTIONS FROM REINVESTMENT NET OF
ENDED INITIALLY REALIZED GAINS OF DIVIDENDS ASSET PARTICI-
DEC. 31 ACQUIRED (CUMULATIVE) SUB-TOTAL (CUMULATIVE) VALUE PATIONS
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1941* $ 8,799 -- $ 8,799 -- $ 8,799 566
1942 9,613 -- 9,613 -- 9,613 584
1943 10,809 -- 10,809 $ 188 10,997 601
1944 11,983 $ 3 11,986 402 12,388 620
1945 14,709 464 15,173 682 15,855 693
1946 13,961 430 14,391 816 15,207 716
1947 14,639 447 15,086 1,141 16,227 824
1948 14,840 718 15,558 1,480 17,038 989
1949 17,113 701 17,814 1,968 19,782 1,176
1950 19,871 994 20,865 2,779 23,644 1,392
1951 21,659 1,756 23,415 3,674 27,089 1,652
1952 24,356 2,016 26,372 4,901 31,273 1,845
1953 24,849 2,030 26,879 6,149 33,028 1,945
1954 33,779 3,476 37,255 9,475 46,730 2,117
1955 39,164 4,398 43,562 12,349 55,911 2,243
1956 38,511 7,051 45,562 10,475 56,037 3,123
1957 36,268 6,574 42,842 11,496 54,338 3,269
1958 48,925 8,778 57,703 17,710 75,413 3,406
1959 55,426 11,821 67,247 19,992 87,239 3,906
1960 55,782 12,653 68,435 19,772 88,207 4,562
1961 67,126 16,993 84,119 25,757 109,876 4,881
1962 62,396 17,033 79,429 24,446 103,875 5,541
1963 71,467 19,863 91,330 30,711 122,041 5,803
1964 83,001 24,049 107,050 35,865 142,915 6,452
1965 92,523 30,246 122,769 35,623 158,392 8,066
1966 74,713 24,491 99,204 31,774 130,978 8,606
1967 83,121 27,090 110,211 40,165 150,376 8,948
1968 89,160 32,157 121,317 46,879 168,196 9,710
1969 75,017 26,979 101,996 44,536 146,532 10,115
1970 82,621 28,564 111,185 52,500 163,685 10,957
1971 93,454 32,126 125,580 61,694 187,274 11,856
1972 108,913 38,484 147,397 75,949 223,346 12,605
1973 93,151 32,729 125,880 71,868 197,748 13,123
1974 68,448 22,864 91,312 57,376 148,688 14,124
1975 91,498 30,474 121,972 85,413 207,385 14,781
1976 115,461 37,963 153,424 101,306 254,730 16,914
1977 108,466 35,919 144,385 96,397 240,782 18,898
1978 110,210 34,687 144,897 105,738 250,635 20,370
1979 139,110 34,774 173,884 121,307 295,191 23,931
1980 173,026 47,488 220,514 165,362 385,876 26,181
1981 163,070 62,645 225,715 140,698 366,413 33,836
1982 191,554 69,992 261,546 183,359 444,905 36,772
1983 235,913 91,870 327,783 218,649 546,432 42,757
1984 250,855 91,476 342,331 226,566 568,897 49,375
1985 333,623 145,913 479,536 293,217 772,753 58,251
1986 408,170 212,840 621,010 342,608 963,618 69,711
1987 412,599 241,185 653,784 326,728 980,512 83,847
1988 470,438 297,425 767,863 407,155 1,175,018 97,918
1989 583,494 438,476 1,021,970 509,512 1,531,482 111,950
1990 552,346 473,992 1,026,338 440,810 1,467,148 139,330
1991 654,372 558,392 1,212,764 539,190 1,751,954 152,079
1992 700,391 619,341 1,319,732 600,946 1,920,678 165,291
1993 814,945 727,611 1,542,556 715,658 2,258,214 176,699
1994 832,095 759,684 1,591,779 649,069 2,240,848 213,211
1995 1,207,794 998,228 2,206,022 913,513 3,119,535 227,040
1996 1,452,214 1,232,426 2,684,640 1,134,598 3,819,238 237,959
1997 1,794,519 1,785,369 3,579,888 1,121,302 4,701,190 315,940
1998 1,990,546 2,009,140 3,999,686 1,245,932 5,245,618 326,830
</TABLE>
- --------------------------------------------------------------------------------
*FROM MARCH 16, 1941.
NOTE--DURING 1990 ALL SALES CHARGES WERE ELIMINATED. THE ABOVE TABLE REFLECTS
THE CHANGE TO A "NO LOAD" STATUS AS IF IT WERE IN EFFECT FOR THE ENTIRE PERIOD
SHOWN.
THE AMOUNTS SHOWN AS DIVIDENDS FOR PERIODS AFTER OCTOBER 31, 1988 INCLUDE
INTEREST INCOME FROM THE INVESTMENT OF AMOUNTS DEPOSITED IN THE DISTRIBUTIVE
FUND.
3
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1998
================================================================================
<TABLE>
<S> <C>
ASSETS
Investments at market quotations, common stocks
(identified cost $381,232,898) ....................................... $523,758,605
Cash (substantially all of which was invested
in additional units of common stocks on July 1, 1998) ............... 16,687,003
Receivable for investments sold ....................................... 1,447,060
Subscriptions receivable ............................................. 676,402
Receivable for accrued dividends and interest ........................ 659,938
------------
Total assets ................................................... 543,229,008
------------
LIABILITIES
Distribution payable ................................................... 2,021,018
Payable for participations redeemed .................................... 966,996
Accrued expenses ...................................................... 177,363
------------
Total liabilities ................................................ 3,165,377
------------
NET ASSETS
Balance applicable to 33,647,369 participations outstanding (Note 6) ... $540,063,631
============
Computation of public offering price:
Net asset value, offering and redemption price per participation
(net assets divided by participations outstanding) .................. $ 16.05
============
</TABLE>
See Notes to Financial Statements
================================================================================
4
<PAGE>
================================================================================
STATEMENT OF INVESTMENTS JUNE 30, 1998
================================================================================
<TABLE>
<CAPTION>
NUMBER OF MARKET
SECURITIES SHARES COST VALUE
- -------------------------------------------------------- --------- ------------- ------------
<S> <C> <C> <C>
CONSUMER PRODUCTS: (16.0%)
Eastman Kodak Co. .................................... 373,500 $ 23,526,441 $ 27,288,844
Fortune Brands, Inc. ................................. 373,500 10,912,492 14,356,406
Gallaher Group PLC .................................... 373,500 6,133,385 8,170,312
Proctor & Gamble Co. ................................. 373,500 22,788,930 34,011,844
------------ ------------
63,361,248 83,827,406
------------ ------------
OIL INTERNATIONAL: (16.5%)
Chevron Corp. .......................................... 373,500 22,040,428 31,023,844
Exxon Corp. .......................................... 373,500 18,191,836 26,635,219
Mobil Corp. .......................................... 373,500 23,356,230 28,619,437
------------ ------------
63,588,494 86,278,500
------------ ------------
CHEMICAL & FERTILIZERS: (9.1%)
DuPont (E.I.) de Nemours & Co., Inc. .................. 373,500 18,070,184 27,872,437
Union Carbide Corp. .................................... 373,500 13,462,827 19,935,562
------------ ------------
31,533,011 47,807,999
------------ ------------
ELECTRICAL EQUIPMENT: (6.5%)
General Electric Co. ................................. 373,500 18,765,485 33,988,500
------------ ------------
BROADCASTING: (2.3%)
CBS Corp. (formerly Westinghouse Electric Corp.) ...... 373,500 7,748,913 11,858,625
------------ ------------
RETAILING: (5.7%)
Sears, Roebuck & Co. ................................. 373,500 14,688,096 22,806,844
Venator Group, Inc. (formerly Woolworth Corp.)* ...... 373,500 7,997,455 7,143,187
------------ ------------
22,685,551 29,950,031
------------ ------------
UTILITIES: (8.4%)
Ameren Corp. (formerly Union Electric Co.) ............ 373,500 14,221,529 14,846,625
Consolidated Edison, Inc. (formerly Consolidated ......
Edison Co., of NY, Inc.) .............................. 373,500 11,593,978 17,204,344
Pacific Gas & Electric Co. ........................... 373,500 9,955,910 11,788,594
------------ ------------
35,771,417 43,839,563
------------ ------------
RAILROADS: (8.0%)
Burlington Northern Santa Fe ........................... 260,614 21,583,260 25,589,037
Union Pacific Corp. .................................... 373,500 18,796,812 16,480,688
------------ ------------
40,380,072 42,069,725
------------ ------------
ENERGY: (9.5%)
Columbia Energy Group ................................. 561,750 18,534,117 31,247,344
Union Pacific Resources Group, Inc. .................. 332,267 8,093,243 5,835,439
USX Marathon Group .................................... 373,500 9,089,724 12,815,719
------------ ------------
35,717,084 49,898,502
------------ ------------
MISC. INDUSTRIAL: (6.5%)
Allied Signal Corp. .................................... 373,500 13,593,291 16,574,063
Praxair, Inc. .......................................... 373,500 13,239,691 17,484,469
------------ ------------
26,832,982 34,058,532
------------ ------------
COMMUNICATIONS: (7.2%)
AT&T Corp. ............................................. 373,500 14,782,558 21,336,188
Lucent Technologies, Inc. .............................. 194,760 7,603,388 16,201,597
------------ ------------
22,385,946 37,537,785
------------ ------------
FINANCIAL: (4.3%)
Travelers Group, Inc. ................................. 373,500 12,462,695 22,643,437
------------ ------------
Total Investments (100%) ........................... $381,232,898 $523,758,605
============ ============
</TABLE>
* Non Income producing
See Notes to Financial Statements
================================================================================
5
<PAGE>
================================================================================
STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1998
================================================================================
Investment Income:
Income:
Dividends (Net of $45,170 tax expense) ......... $5,376,067
Interest ....................................... 84,722
----------
Total income .......................................... $ 5,460,789
Expenses:
Sponsor's administrative fee (Note 4) ......... 1,071,844
Professional fees .............................. 37,729
Trustee's fee (Note 4) ........................ 5,000
Custody fees and other services (Note 4) ...... 86,343
Transfer agent fees ........................... 381,203
Printing, mailing and sundry .................. 109,986
Registration and filing fees .................. 67,780
----------
Total expenses .......................................... 1,759,885
-----------
Net investment income ................................. 3,700,904
-----------
Realized and Unrealized Gain on Investments:
Net realized gain from securities transactions ............ 32,185,163
Unrealized appreciation of investments
for the period .......................................... 22,874,227
-----------
Net gain on investments .............................. 55,059,390
-----------
Net increase in net assets from operations ............... $58,760,294
===========
See Notes to Financial Statements
================================================================================
6
<PAGE>
================================================================================
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1998 1997
------------ -------------
<S> <C> <C>
Income and Distributable Fund:
Additions:
Net investment income ....................................... $ 3,700,904 $ 8,592,239
Realized gains from sale of securities,
other than sale of stock units ........................... 8,884,899 78,524,385
------------ ------------
12,585,803 87,116,624
------------ ------------
Deductions:
Paid on account of participations redeemed .................. 379,601 3,336,384
Semi-annual distributions (Note 3(a))
Paid in cash ............................................. 1,385,460 8,469,406
Reinvested, below ....................................... 11,004,956 75,189,280
------------ ------------
12,770,017 86,995,070
------------ ------------
Net change in income and distributable fund .................. (184,214) 121,554
------------ ------------
Principal Account:
Additions:
Payments received on sale of participations ............... 43,291,098 180,924,862
Semi-annual distributions reinvested, above ............... 11,004,956 75,189,280
Realized gains on sale of stock units ..................... 23,300,264 14,066,369
Unrealized (appreciation) depreciation of investments ...... 22,874,227 (4,605,627)
------------ ------------
100,470,545 265,574,884
------------ ------------
Deductions:
Paid on account of participations redeemed .................. 85,256,400 126,965,570
Semi-annual distributions of principal (Note 3(b)) ......... 634,897 5,357,404
------------ ------------
85,891,297 132,322,974
------------ ------------
Net change in principal account ........................... 14,579,248 133,251,910
------------ ------------
Net assets at beginning of period:
Income and distributable fund ................................. 666,787 545,233
Principal account ............................................. 525,001,810 391,749,900
------------ ------------
525,668,597 392,295,133
------------ ------------
Net assets at end of period:
Income and distributable fund ................................. 482,573 666,787
Principal account ............................................. 539,581,058 525,001,810
------------ ------------
$540,063,631 $525,668,597
============ ============
</TABLE>
See Notes to Financial Statements
================================================================================
7
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION
Lexington Corporate Leaders Trust Fund (the "Trust") is an unincorporated
Unit Investment Trust registered as such with the Securities and Exchange
Commission. The Trust commenced operations in 1941 as a series of Corporate
Leaders Trust Fund which was created under a Trust Indenture dated November 18,
1935. Effective June 1, 1998 the amended and restated trust indenture of
Lexington Corporate Leaders Trust Fund was further amended to require that
shares of common stock received by the Trust as a result of stock splits be
retained as assets of the trust fund.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements:
(a) Valuation of securities-Investments are stated at value based on the
last sale price on the principal exchange on which the security is traded prior
to the time the Trust's assets are valued. Investments for which no sale is
reported, or which are traded over-the-counter, are valued at the mean between
bid and asked prices. Short term securities with 60 days or less to maturity are
valued at amortized cost.
(b) Income taxes-No provision for Federal income taxes is made since the
Trust, under applicable provisions of the Internal Revenue Code, is a Grantor
Trust and all its income is taxable to the Holders of participations.
(c) Other-Investment transactions are recorded on the trade date basis.
Dividend income is recorded on the ex-dividend date. Interest income is accrued
as earned.
(d) Accounting estimates-The preparation of financial statements in
accordance 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 amounts of income
and expense during the reporting period. Actual results could differ from those
estimates.
NOTE 3. DISTRIBUTIONS
(a) During the six months ended June 30, 1998 the distributions from net
investment income were $0.11541 per participation and, from realized gains, were
$0.26394 per participation.
(b) The amount shown does not reflect the reinvestment, if any, of that
portion from the sale of securities (other than stock units) representing the
cost of the securities sold which is distributed and then reinvested in
additional participations. In addition, any gain on the sale of stock units to
provide funds for the redemption of participations is non-distributable and
remains a part of the principal account. During the six months ended June 30,
1998, the distributions from return of capital were $0.17385 per participation.
NOTE 4. TRUSTEE AND SPONSOR FEES
State Street Bank and Trust Company (the "Trustee") receives an annual
Trustee fee, as well as fees for acting as custodian and for providing portfolio
accounting and record keeping services, which aggregated $91,343 for the six
months ended June 30, 1998. The Trust pays an administrative fee to Lexington
Management Corporation (Sponsor) equal, on an annual basis, to 0.40% of the
average daily net assets of the Trust.
NOTE 5. INVESTMENT TRANSACTIONS
During the six months ended June 30, 1998, the cost of purchases and
proceeds of sales of investment securities, other than short-term obligations,
were $51,160,345 and $57,492,373, respectively.
The cost of investment securities as well as realized security gains and
losses are based on the identified cost basis. The cost of investments for
Federal income taxes is the same as that reported in the Trust's financial
statements.
As of June 30, 1998, net unrealized appreciation of portfolio securities
was $142,525,707, comprised of unrealized appreciation of $147,953,903 and
unrealized depreciation of $5,428,196.
NOTE 6. SOURCE OF NET ASSETS
As of June 30, 1998, the Trust's net assets were comprised of the following
amounts:
<TABLE>
<S> <C>
Net amounts paid in and reinvested by Holders net of terminations and return of capital $316,971,211
payments
Cumulative amount of non-distributable realized gains retained in Principal Account ...... 80,084,140
Unrealized appreciation in value of securities .......................................... 142,525,707
------------
Principal account ..................................................................... 539,581,058
Income and distributable fund ......................................................... 482,573
------------
Total net assets ..................................................................... $540,063,631
============
</TABLE>
================================================================================
8
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
NOTE 7. PARTICIPATIONS ISSUED AND REDEEMED
During the periods indicated, participations were issued and redeemed as
follows:
<TABLE>
<CAPTION>
NUMBER OF PARTICIPATIONS
------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1998 1997
---------------- ---------------
<S> <C> <C>
Issued on payments from Holders ........................... 2,750,534 10,808,038
Issued on reinvestment of dividends and distributions ...... 1,000,521 7,968,673
Redeemed ................................................... (5,434,864) (7,892,774)
---------- ----------
Net increase ............................................. (1,683,809) 10,883,937
========== ==========
</TABLE>
NOTE 8. SELECTED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED DECEMBER 31,
ENDED ---------------------------------------------------------------
SELECTED DATA PER PARTICIPATION JUNE 30,
OUTSTANDING THROUGHOUT THE PERIOD: 1998 1997 1996 1995 1994 1993
- ---------------------------------------------- ---------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $ 14.88 $ 16.05 $ 13.74 $ 10.51 $ 12.78 $ 11.62
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income ..................... 0.11 0.27 0.28 0.28 0.31 0.33
Net realized and unrealized gain
(loss) on investments ..................... 1.63 3.45 2.79 3.82 (0.45) 1.71
-------- -------- -------- -------- -------- --------
Total from investment operations ............ 1.74 3.72 3.07 4.10 (0.14) 2.04
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ...... (0.12) (0.28) (0.28) (0.28) (0.32) (0.33)
Distributions from net realized gains ...... (0.26) (2.60) (0.28) (0.03) (0.90) (0.28)
Distributions from income and realized gains
included in terminations .................. (0.01) (0.11) (0.02) (0.02) (0.01) --
Distributions from capital .................. (0.18) (1.90) (0.18) (0.54) (0.90) (0.27)
-------- -------- -------- -------- -------- --------
Total distributions ........................ (0.57) (4.89) (0.76) (0.87) (2.13) (0.88)
-------- -------- -------- -------- -------- --------
Change in net asset value for the period ... 1.17 (1.17) 2.31 3.23 (2.27) 1.16
-------- -------- -------- -------- -------- --------
Net asset value at end of period ............ $ 16.05 $ 14.88 $ 16.05 $ 13.74 $ 10.51 $ 12.78
======== ======== ======== ======== ======== ========
Total return ................................. 23.35%* 23.09% 22.43% 39.21% (0.77%) 17.57%
Ratios/Supplemental Data:
Net Assets, end of period (000) ............ $540,064 $525,669 $392,295 $256,467 $156,286 $147,181
Ratios to average net asset of:
Expenses .................................... 0.66%* 0.62% 0.63% 0.58% 0.62% 0.57%
Net investment income ..................... 1.39%* 1.76% 2.05% 2.57% 2.84% 2.78%
</TABLE>
*annualized
================================================================================
9
<PAGE>
================================================================================
INDEPENDENT AUDITOR'S REPORT
================================================================================
To the Participation Holders of
Lexington Corporate Leaders Trust Fund
We have audited the accompanying statement of assets and liabilities,
including the statement of investments of Lexington Corporate Leaders Trust Fund
as of June 30, 1998, and the related statements of operations, changes in net
assets and the selected financial information for the periods indicated in the
accompanying financial statements. These financial statements and selected
financial information are the responsibility of the management of the Trust. Our
responsibility is to express an opinion on these financial statements and
selected financial information based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and selected
financial information are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of June 30, 1998, by correspondence with State Street Bank and Trust
Company, Trustee. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and selected financial information
referred to above present fairly, in all material respects, the financial
position of Lexington Corporate Leaders Trust Fund as of June 30, 1998, and the
results of its operations, the changes in its net assets and the selected
financial information for the periods indicated, in conformity with generally
accepted accounting principles.
[GRAPHIC OMITTED]
New York, New York
July 10, 1998
================================================================================
10
<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 CORPORATE LEADERS 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 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.
*Redemptions on shares of Lexington Troika Dialog Russia Fund, Inc. held less
than 365 days are subject to a redemption fee of 2% of the redemption proceeds.
<PAGE>
TRUSTEE
- -------------------------------------------------------------------
STATE STREET BANK AND TRUST COMPANY
225 Franklin Street
Boston, Massachusetts 02110
AUDITORS
- -------------------------------------------------------------------
MCGLADREY & PULLEN, LLP
555 Fifth Avenue
New York, New York 10017
SPONSOR
- -------------------------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
TRANSFER AGENT
- -------------------------------------------------------------------
STATE STREET BANK AND TRUST COMPANY
c/o National Financial Data Services
City Center Square
P.O. Box 419648
Kansas City, Missouri 64141-6648
-------------------------------------------------
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 o Account Balances o Exchanges o
Last Transactions o Total Return o
Duplicate Statements
- -------------------------------------------------------------------
THIS REPORT HAS BEEN PREPARED FOR THE INFORMATION OF THE PARTICIPATION HOLDERS
OF LEXINGTON CORPORATE LEADERS TRUST FUND 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.
-----------------------
LEXINGTON
-----------------------
[GRAPHIC OMITTED]
LEXINGTON
CORPORATE
LEADERS
TRUST
FUND
--------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 1998
The Lexington Group
of
Investment Companies
