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Annual Report
December 31, 1999
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| Lexington Global and
Domestic No-Load Mutual Funds
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| [GRAPHIC] |
LEXINGTON |
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CORPORATE LEADERS |
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TRUST FUND |
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Investment Objective: Long-term Capital Growth and
Income |
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| Lexington Funds
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| Providing Global
SolutionsSM
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[LOGO]
LEXINGTONSM
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Dear Participation Holders:
The Lexington
Corporate Leaders Trust Fund generated a total return of 13.68%* in 1999,
which compares favorably to an increase of 11.26% for the large-cap value
universe monitored by Lipper, Inc. and to an increase of 12.72% for the
unmanaged Standard & Poor’s Barra Value Index.
Portfolio Review
The bull market in
U.S. stocks continued unabated in 1999. The most important macroeconomic
influence on stocks during the year was the very positive combination of
strong real economic growth and impressive earnings gains, without any
commensurate increase in inflation. However, not all stocks benefited from
this positive environment. In fact, nearly half the stocks in the S&P
500 were actually down for the year with only a small number of stocks
generating most of the positive returns.
The Fund’s
return for the year also reflects a broad mix of returns. Merger activity
was a significant influence on the positive side. Portfolio holdings in the
oil and gas sector benefited from a doubling of the price of oil in 1999 and
from the merger of Exxon and Mobil. Holdings in financial services also did
well in 1999. Citigroup made substantial headway in post-merger expense
reduction during the year and we expect that to continue in 2000. GE
Capital, the financial services arm of General Electric, now accounts for
about one-third of pre-tax profits at GE and this number is likely to
increase as this unit continues to perform well. The operating environment
for GE’s other businesses also remains favorable, leading us to expect
continued strong earnings growth over the near term. CBS (formerly
Westinghouse Electric) is the Fund’s singular holding in
media/broadcasting. The stock performed well in 1999, especially after the
announcement that it is to be acquired by Viacom in one of the largest media
mergers ever. The Fund’s holdings in the Chemicals sector both did well
in 1999. Union Carbide’s pending merger into Dow Chemical gave Union
Carbide’s stock a substantial lift in 1999. The proposed merger would
present numerous cost-cutting opportunities for the combined entity. The Fund
’s other holding in the Chemicals sector, DuPont, also performed well
during the year and is also in the midst of restructuring. The company
finished spinning off its former oil subsidiary, Conoco, during 1999 in
order to focus on its higher-growth, higher margin businesses such as
biotechnology. Lucent Technologies, one of the world’s leading
designers, developers, and manufacturers of telecommunications systems and
software gives the Fund additional exposure to the technology sector. The
stock has performed extremely well since being spun off from AT&T in
1996.
Offsetting these
gains were the fund’s holdings in utilities, railroads, and consumer
products. Although our holdings in utilities include financially strong
companies such as Consolidated Edison, which pay higher dividends than other
sectors, utilities as a class simply do not perform as well in bull markets.
However, the stability of this sector adds protection in down markets. Our
largest holding in railroads, Burlington Northern, continues to suffer from
congestion in the Powder River Basin, due to low coal prices. As a result of
weakening revenues, the company has begun to reorganize its business and
institute cost-cutting measures. At the same time, it has implemented a
share buyback program. All of these measures should lead to better future
price performance. Our largest exposure to the consumer products sector,
Procter & Gamble performed well in 1999, although recent speculation
related to acquisition activity temporarily hurt the stock price. In
contrast, our second largest holding, Eastman Kodak, did not perform as well
due to soft revenues and high costs. However, management has made cost
reduction an integral part of its long-term strategy and the revenue outlook
is strengthening. We therefore believe that earnings could show significant
improvement in the near-term.
Market Outlook
We expect the
macroeconomic environment to remain generally favorable for the equity
market in the year ahead. World economic growth continues to be strong and
is now being driven by virtually all regions of the world. Strong
worldwide growth improves the earnings outlook for many of the companies in
our portfolio. Furthermore, we believe that the merger activity noted above
will provide additional earnings improvement for many of these companies.
Since many of these companies are currently selling at much more reasonable
valuations than many of the “tech” companies, we are therefore
quite optimistic about the future prospects for the Fund. The major risk to
our outlook is a jump in inflation. A further significant rise in the price
of oil for example, while helping our oil holdings, could cause the Federal
Reserve to significantly increase interest rates. On the other hand, if
Central Banks act too aggressively and lead the world into recession, this
too could pose a risk to our outlook.
However, over the
long term, we are quite confident about the prospects for the Lexington
Corporate Leaders Trust Fund, regardless of the short-term macroeconomic
situation. Since its creation in 1935, the Fund’s consistent “buy
and hold” discipline in American “blue-chip” companies has
allowed investors to benefit from the dynamic growth potential historically
offered by such equity investments. At the same time, style drift, portfolio
turnover, and expenses of the Fund are all kept to a minimum.
We appreciate the
support of our participation holders and would be happy to respond to any
questions or comments you may have. Please feel free to call us at
1-800-526-0056 or visit our website at
www.lexingtonfunds.com.
| /s/ Richard M.
Hisey |
/s/ Robert M.
DeMichele |
| RICHARD M. HISEY |
ROBERT M.
DeMICHELE
|
| Portfolio Manager |
Chairman of the
Board
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| February, 2000 |
LEXINGTON
MANAGEMENT
CORPORATION
|
*
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13.68%,
21.26% and 14.39% are the one, five and ten year average annual standard
total returns, respectively, for the period ended December 31, 1999.
Investment return and principal value of an investment will fluctuate so
that an investor’s participations, when redeemed, may be worth more
or less than their original cost. Total return represents past performance
and is not predictive of future results.There is no guarantee that the
Fund can achieve its objective.
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2
Lexington Corporate Leaders Trust Fund
Portfolio Summary as of December 31, 1999
Asset Allocation
Common Stocks 97.6%
Cash & Cash Equivalents 2.4%
[BAR GRAPH]
Top Sector Holdings
Oil International 16.3%
Consumer Products 14.7%
Electrical Equipment 10.2%
Communications 9.4%
Energy 9.1%
If you had invested $10,000 59 years ago . .
.
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 December 31, 1999. 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.
3
LEXINGTON CORPORATE LEADERS TRUST FUND
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; 1999
—$51,130; Total—$1,752,270.
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VALUE OF
PARTICIPATIONS |
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Year
Ended
Dec. 31 |
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Amount of
Dividends
Reinvested
Semi-
Annually |
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Cumulative
Cost of
Participations
Purchased
Through
Reinvestment
of Dividends |
|
Cumulative
Cost
Including
Reinvested
Dividends |
|
Initially
Acquired |
|
Purchased Through
Reinvestment of
Distributions from
Realized Gains
(Cumulative) |
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Sub-Total |
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Purchased
Through
Reinvestment
of Dividends
(Cumulative) |
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Net
Asset
Value |
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Number
of
Partici-
pations |
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| 1941* |
|
— |
|
— |
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$ 10,000 |
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$ 8,799 |
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— |
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$ 8,799 |
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— |
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$ 8,799 |
|
566 |
| 1942 |
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— |
|
— |
|
10,000 |
|
9,613 |
|
— |
|
9,613 |
|
— |
|
9,613 |
|
584 |
| 1943 |
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$ 190 |
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$
190 |
|
10,190 |
|
10,809 |
|
— |
|
10,809 |
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$
188 |
|
10,997 |
|
601 |
| 1944 |
|
192 |
|
382 |
|
10,382 |
|
11,983 |
|
$
3 |
|
11,986 |
|
402 |
|
12,388 |
|
620 |
| 1945 |
|
215 |
|
597 |
|
10,597 |
|
14,709 |
|
464 |
|
15,173 |
|
682 |
|
15,855 |
|
693 |
| 1946 |
|
187 |
|
784 |
|
10,784 |
|
13,961 |
|
430 |
|
14,391 |
|
816 |
|
15,207 |
|
716 |
| 1947 |
|
370 |
|
1,154 |
|
11,154 |
|
14,639 |
|
447 |
|
15,086 |
|
1,141 |
|
16,227 |
|
824 |
| 1948 |
|
513 |
|
1,668 |
|
11,668 |
|
14,840 |
|
718 |
|
15,558 |
|
1,480 |
|
17,038 |
|
989 |
| 1949 |
|
509 |
|
2,177 |
|
12,177 |
|
17,113 |
|
701 |
|
17,814 |
|
1,968 |
|
19,782 |
|
1,176 |
| 1950 |
|
804 |
|
2,980 |
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12,980 |
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19,871 |
|
994 |
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20,865 |
|
2,779 |
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23,644 |
|
1,392 |
| 1951 |
|
1,012 |
|
3,992 |
|
13,992 |
|
21,659 |
|
1,756 |
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23,415 |
|
3,674 |
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27,089 |
|
1,652 |
| 1952 |
|
1,054 |
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5,046 |
|
15,046 |
|
24,356 |
|
2,016 |
|
26,372 |
|
4,901 |
|
31,273 |
|
1,845 |
| 1953 |
|
1,217 |
|
6,263 |
|
16,263 |
|
24,849 |
|
2,030 |
|
26,879 |
|
6,149 |
|
33,028 |
|
1,945 |
| 1954 |
|
1,378 |
|
7,641 |
|
17,641 |
|
33,779 |
|
3,476 |
|
37,255 |
|
9,475 |
|
46,730 |
|
2,117 |
| 1955 |
|
1,599 |
|
9,240 |
|
19,240 |
|
39,164 |
|
4,398 |
|
43,562 |
|
12,349 |
|
55,911 |
|
2,243 |
| 1956 |
|
1,790 |
|
11,030 |
|
21,030 |
|
38,511 |
|
7,051 |
|
45,562 |
|
10,475 |
|
56,037 |
|
3,123 |
| 1957 |
|
1,910 |
|
12,940 |
|
22,940 |
|
36,268 |
|
6,574 |
|
42,842 |
|
11,496 |
|
54,338 |
|
3,269 |
| 1958 |
|
2,134 |
|
15,075 |
|
25,075 |
|
48,925 |
|
8,778 |
|
57,703 |
|
17,710 |
|
75,413 |
|
3,406 |
| 1959 |
|
2,184 |
|
17,258 |
|
27,258 |
|
55,426 |
|
11,821 |
|
67,247 |
|
19,992 |
|
87,239 |
|
3,906 |
| 1960 |
|
2,416 |
|
19,674 |
|
29,674 |
|
55,782 |
|
12,653 |
|
68,435 |
|
19,772 |
|
88,207 |
|
4,562 |
| 1961 |
|
2,697 |
|
22,371 |
|
32,371 |
|
67,126 |
|
16,993 |
|
84,119 |
|
25,757 |
|
109,876 |
|
4,881 |
| 1962 |
|
2,926 |
|
25,296 |
|
35,296 |
|
62,396 |
|
17,033 |
|
79,429 |
|
24,446 |
|
103,875 |
|
5,541 |
| 1963 |
|
3,243 |
|
28,540 |
|
38,540 |
|
71,467 |
|
19,863 |
|
91,330 |
|
30,711 |
|
122,041 |
|
5,803 |
| 1964 |
|
3,553 |
|
32,093 |
|
42,093 |
|
83,001 |
|
24,049 |
|
107,050 |
|
35,865 |
|
142,915 |
|
6,452 |
| 1965 |
|
3,855 |
|
35,948 |
|
45,948 |
|
92,523 |
|
30,246 |
|
122,769 |
|
35,623 |
|
158,392 |
|
8,066 |
| 1966 |
|
4,571 |
|
40,519 |
|
50,519 |
|
74,713 |
|
24,491 |
|
99,204 |
|
31,774 |
|
130,978 |
|
8,606 |
| 1967 |
|
5,060 |
|
45,579 |
|
55,579 |
|
83,121 |
|
27,090 |
|
110,211 |
|
40,165 |
|
150,376 |
|
8,948 |
| 1968 |
|
5,573 |
|
51,153 |
|
61,153 |
|
89,160 |
|
32,157 |
|
121,317 |
|
46,879 |
|
168,196 |
|
9,710 |
| 1969 |
|
5,915 |
|
57,068 |
|
67,068 |
|
75,017 |
|
26,979 |
|
101,996 |
|
44,536 |
|
146,532 |
|
10,115 |
| 1970 |
|
6,009 |
|
63,077 |
|
73,077 |
|
82,621 |
|
28,564 |
|
111,185 |
|
52,500 |
|
163,685 |
|
10,957 |
| 1971 |
|
6,190 |
|
69,267 |
|
79,267 |
|
93,454 |
|
32,126 |
|
125,580 |
|
61,694 |
|
187,274 |
|
11,856 |
| 1972 |
|
6,585 |
|
75,852 |
|
85,852 |
|
108,913 |
|
38,484 |
|
147,397 |
|
75,949 |
|
223,346 |
|
12,605 |
| 1973 |
|
7,371 |
|
83,223 |
|
93,223 |
|
93,151 |
|
32,729 |
|
125,880 |
|
71,868 |
|
197,748 |
|
13,123 |
| 1974 |
|
8,196 |
|
91,419 |
|
101,419 |
|
68,448 |
|
22,864 |
|
91,312 |
|
57,376 |
|
148,688 |
|
14,124 |
| 1975 |
|
9,139 |
|
100,557 |
|
110,557 |
|
91,498 |
|
30,474 |
|
121,972 |
|
85,413 |
|
207,385 |
|
14,781 |
| 1976 |
|
9,666 |
|
110,223 |
|
120,223 |
|
115,461 |
|
37,963 |
|
153,424 |
|
101,306 |
|
254,730 |
|
16,914 |
| 1977 |
|
11,237 |
|
121,460 |
|
131,460 |
|
108,466 |
|
35,919 |
|
144,385 |
|
96,397 |
|
240,782 |
|
18,898 |
| 1978 |
|
13,283 |
|
134,743 |
|
144,743 |
|
110,210 |
|
34,687 |
|
144,897 |
|
105,738 |
|
250,635 |
|
20,370 |
| 1979 |
|
15,804 |
|
150,547 |
|
160,547 |
|
139,110 |
|
34,774 |
|
173,884 |
|
121,307 |
|
295,191 |
|
23,931 |
| 1980 |
|
19,369 |
|
169,916 |
|
179,916 |
|
173,026 |
|
47,488 |
|
220,514 |
|
165,362 |
|
385,876 |
|
26,181 |
| 1981 |
|
21,822 |
|
191,738 |
|
201,738 |
|
163,070 |
|
62,645 |
|
225,715 |
|
140,698 |
|
366,413 |
|
33,836 |
| 1982 |
|
24,452 |
|
216,190 |
|
226,190 |
|
191,554 |
|
69,992 |
|
261,546 |
|
183,359 |
|
444,905 |
|
36,772 |
| 1983 |
|
25,923 |
|
242,114 |
|
252,114 |
|
235,913 |
|
91,870 |
|
327,783 |
|
218,649 |
|
546,432 |
|
42,757 |
| 1984 |
|
28,926 |
|
271,040 |
|
281,040 |
|
250,855 |
|
91,476 |
|
342,331 |
|
226,566 |
|
568,897 |
|
49,375 |
| 1985 |
|
31,808 |
|
302,848 |
|
312,848 |
|
333,623 |
|
145,913 |
|
479,536 |
|
293,217 |
|
772,753 |
|
58,251 |
| 1986 |
|
39,216 |
|
342,064 |
|
352,064 |
|
408,170 |
|
212,840 |
|
621,010 |
|
342,608 |
|
963,618 |
|
69,711 |
| 1987 |
|
40,394 |
|
382,458 |
|
392,458 |
|
412,599 |
|
241,185 |
|
653,784 |
|
326,728 |
|
980,512 |
|
83,847 |
| 1988 |
|
71,268 |
|
453,726 |
|
463,726 |
|
470,438 |
|
297,425 |
|
767,863 |
|
407,155 |
|
1,175,018 |
|
97,918 |
| 1989 |
|
45,103 |
|
498,829 |
|
508,829 |
|
583,494 |
|
438,476 |
|
1,021,970 |
|
509,512 |
|
1,531,482 |
|
111,950 |
| 1990 |
|
51,303 |
|
550,132 |
|
560,132 |
|
552,346 |
|
473,992 |
|
1,026,338 |
|
440,810 |
|
1,467,148 |
|
139,330 |
| 1991 |
|
55,828 |
|
605,960 |
|
615,960 |
|
654,372 |
|
558,392 |
|
1,212,764 |
|
539,190 |
|
1,751,954 |
|
152,079 |
| 1992 |
|
55,460 |
|
661,420 |
|
671,420 |
|
700,391 |
|
619,341 |
|
1,319,732 |
|
600,946 |
|
1,920,678 |
|
165,291 |
| 1993 |
|
54,505 |
|
715,925 |
|
725,925 |
|
814,945 |
|
727,611 |
|
1,542,556 |
|
715,658 |
|
2,258,214 |
|
176,699 |
| 1994 |
|
60,332 |
|
776,257 |
|
786,257 |
|
832,095 |
|
759,684 |
|
1,591,779 |
|
649,069 |
|
2,240,848 |
|
213,211 |
| 1995 |
|
61,329 |
|
837,586 |
|
847,586 |
|
1,207,794 |
|
998,228 |
|
2,206,022 |
|
913,513 |
|
3,119,535 |
|
227,040 |
| 1996 |
|
64,546 |
|
902,132 |
|
912,132 |
|
1,452,214 |
|
1,232,426 |
|
2,684,640 |
|
1,134,598 |
|
3,819,238 |
|
237,959 |
| 1997 |
|
71,379 |
|
973,511 |
|
983,511 |
|
1,794,519 |
|
1,785,369 |
|
3,579,888 |
|
1,121,302 |
|
4,701,190 |
|
315,940 |
| 1998 |
|
72,385 |
|
1,045,896 |
|
1,055,896 |
|
1,948,610 |
|
1,965,327 |
|
3,913,937 |
|
1,254,684 |
|
5,168,621 |
|
329,211 |
| 1999 |
|
78,614 |
|
1,124,210 |
|
1,134,210 |
|
2,198,244 |
|
2,216,745 |
|
4,414,989 |
|
1,460,590 |
|
5,875,579 |
|
339,629 |
| |
* 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.
4
STATEMENT OF ASSETS AND
LIABILITIES December 31, 1999
| Assets |
Investments at market
quotations, common stocks
(identified cost $330,146,215) |
|
$453,006,994 |
| Cash |
|
12,283,354 |
| Subscriptions
receivable |
|
379,148 |
| Receivable for accrued
dividends |
|
671,212 |
| |
|
|
|
Total assets |
|
466,340,708 |
| |
|
|
| Liabilities |
| Distribution
payable |
|
1,513,906 |
| Payable for participations
redeemed |
|
672,824 |
| Accrued
expenses |
|
158,543 |
| |
|
|
|
Total liabilities |
|
2,345,273 |
| |
|
|
|
|
| Net
Assets |
| Balance applicable to
26,818,793 participations outstanding (Note 6) |
|
$463,995,435 |
| |
|
|
|
|
| Computation of public
offering price: |
Net asset value, offering and redemption price per participation
(net assets
divided by participations outstanding) |
|
$
17.30 |
| |
|
|
The accompanying notes form an integral part of these financial
statements.
5
STATEMENT OF
INVESTMENTS December 31, 1999
Securities
|
|
Number of
Shares
|
|
Cost
|
|
Market
Value
|
| Consumer Products:
(14.7%) |
|
|
|
|
|
|
| Eastman Kodak Co.
|
|
297,200 |
|
$ 20,999,070 |
|
$ 19,689,500 |
| Fortune Brands, Inc.
|
|
297,200 |
|
9,446,426 |
|
9,826,175 |
| Gallaher Group
PLC |
|
297,200 |
|
5,327,727 |
|
4,569,450 |
| Procter & Gamble Co.
|
|
297,200 |
|
20,285,477 |
|
32,561,975 |
| |
|
|
|
|
|
|
|
|
|
|
|
56,058,700 |
|
66,647,100 |
| |
|
|
|
|
|
|
| Oil International:
(16.3%) |
|
|
|
|
|
|
| Chevron Corp.
|
|
297,200 |
|
19,239,757 |
|
25,744,950 |
| Exxon Mobil Corp.
|
|
599,100 |
|
31,559,754 |
|
48,264,994 |
| |
|
|
|
|
|
|
|
|
|
|
|
50,799,511 |
|
74,009,944 |
| |
|
|
|
|
|
|
| Chemical &
Fertilizers: (8.7%) |
|
|
|
|
|
|
| DuPont (E.I.) de Nemours
& Co., Inc. |
|
297,200 |
|
15,954,096 |
|
19,578,050 |
| Union Carbide Corp.
|
|
297,200 |
|
12,807,570 |
|
19,838,100 |
| |
|
|
|
|
|
|
|
|
|
|
|
28,761,666 |
|
39,416,150 |
| |
|
|
|
|
|
|
| Electrical Equipment:
(10.2%) |
|
|
|
|
|
|
| General Electric Co.
|
|
297,200 |
|
17,014,730 |
|
45,991,700 |
| |
|
|
|
|
|
|
| Broadcasting:
(4.2%) |
|
|
|
|
|
|
| CBS Corp.* |
|
297,200 |
|
6,279,220 |
|
19,002,225 |
| |
|
|
|
|
|
|
| Retailing:
(2.5%) |
|
|
|
|
|
|
| Sears, Roebuck & Co.
|
|
297,200 |
|
13,606,042 |
|
9,046,025 |
| Venator Group,
Inc.* |
|
297,200 |
|
5,770,338 |
|
2,080,400 |
| |
|
|
|
|
|
|
|
|
|
|
|
19,376,380 |
|
11,126,425 |
| |
|
|
|
|
|
|
| Utilities:
(5.8%) |
|
|
|
|
|
|
| Ameren Corp.
|
|
297,200 |
|
11,629,982 |
|
9,733,300 |
| Consolidated Edison, Inc.
|
|
297,200 |
|
9,624,012 |
|
10,253,400 |
| Pacific Gas &
Electric Co. |
|
297,200 |
|
7,755,463 |
|
6,092,600 |
| |
|
|
|
|
|
|
|
|
|
|
|
29,009,457 |
|
26,079,300 |
| |
|
|
|
|
|
|
| Railroads:
(6.5%) |
|
|
|
|
|
|
| Burlington Northern
Santa Fe |
|
684,942 |
|
20,203,666 |
|
16,609,843 |
| Union Pacific Corp.
|
|
297,200 |
|
16,311,167 |
|
12,965,350 |
| |
|
|
|
|
|
|
|
|
|
|
|
36,514,833 |
|
29,575,193 |
| |
|
|
|
|
|
|
| Energy:
(9.1%) |
|
|
|
|
|
|
| Columbia Energy
Group |
|
485,450 |
|
17,467,431 |
|
30,704,713 |
| Union Pacific Resources
Group, Inc. |
|
255,967 |
|
6,445,217 |
|
3,263,579 |
| USX Marathon
Group |
|
297,200 |
|
7,600,814 |
|
7,337,125 |
| |
|
|
|
|
|
|
|
|
|
|
|
31,513,462 |
|
41,305,417 |
| |
|
|
|
|
|
|
| Misc. Industrial:
(7.1%) |
|
|
|
|
|
|
| Honeywell International
Corp. |
|
297,200 |
|
11,771,100 |
|
17,144,725 |
| Praxair, Inc.
|
|
297,200 |
|
12,575,032 |
|
14,952,875 |
| |
|
|
|
|
|
|
|
|
|
|
|
24,346,132 |
|
32,097,600 |
| |
|
|
|
|
|
|
| Communications:
(9.4%) |
|
|
|
|
|
|
| AT&T Corp.
|
|
456,100 |
|
12,923,760 |
|
23,147,075 |
| Lucent Technologies, Inc.
|
|
259,020 |
|
6,016,973 |
|
19,377,934 |
| |
|
|
|
|
|
|
|
|
|
|
|
18,940,733 |
|
42,525,009 |
| |
|
|
|
|
|
|
| Financial:
(5.5%) |
|
|
|
|
|
|
| CitiGroup, Inc.
|
|
454,100 |
|
11,531,391 |
|
25,230,931 |
| |
|
|
|
|
|
|
|
Total Investments (100%) |
|
|
|
$330,146,215 |
|
$453,006,994 |
| |
|
|
|
|
|
|
The accompanying notes form an integral part of these financial
statements.
6
STATEMENT OF OPERATIONS
Year Ended December 31, 1999
| Investment
income: |
|
|
|
Income: |
|
|
|
Dividends (net of $63,737 tax
expense) |
|
$ 9,452,773 |
|
Interest |
|
63,255 |
| |
|
|
|
Total
income |
|
9,516,028 |
| |
|
|
| Expenses: |
|
|
|
Sponsor’s administrative fee (Note 4) |
|
1,887,832 |
|
Professional fees |
|
72,960 |
|
Trustee’s fee (Note 4) |
|
9,167 |
|
Custody fees and other services (Note 4) |
|
136,368 |
|
Transfer agent fees |
|
588,831 |
|
Printing, mailing and sundry |
|
138,730 |
|
Registration and filing fees |
|
25,627 |
| |
|
|
|
Total
expenses |
|
2,859,515 |
| |
|
|
|
Net investment income |
|
6,656,513 |
| |
|
|
| Realized and unrealized
gain on investments: |
|
|
|
Net realized gain from securities transactions |
|
36,101,224 |
|
Unrealized appreciation of investments for the period |
|
16,587,948 |
| |
|
|
|
Net gain on investments |
|
52,689,172 |
| |
|
|
|
Net
increase in net assets from operations |
|
$59,345,685 |
| |
|
|
The accompanying notes form an integral part of these financial
statements.
7
STATEMENT OF CHANGES IN
NET ASSETS
| |
|
Year Ended
December 31,
1999
|
|
Year Ended
December 31,
1998
|
| Income and Distributable
Fund: |
|
|
|
|
|
|
|
Additions: |
|
|
|
|
|
|
|
Net
investment income |
|
$ 6,656,513 |
|
|
$ 7,463,661 |
|
Realized gains from sale of securities,
other than sale of stock
units |
|
4,133,398 |
|
|
8,884,899 |
|
| |
|
|
|
|
|
|
|
|
|
10,789,911 |
|
|
16,348,560 |
|
| |
|
|
|
|
|
|
|
Deductions: |
|
|
|
|
|
|
|
Paid
on account of participations redeemed |
|
414,733 |
|
|
648,862 |
|
|
Semi-annual distributions (Note 3(a)) |
|
|
|
|
|
|
|
Paid in cash |
|
1,392,270 |
|
|
1,783,831 |
|
|
Reinvested, below |
|
9,067,257 |
|
|
13,985,638 |
|
| |
|
|
|
|
|
|
|
|
|
10,874,260 |
|
|
16,418,331 |
|
| |
|
|
|
|
|
|
|
Net
change in income and distributable fund |
|
(84,349 |
) |
|
(69,771 |
) |
| |
|
|
|
|
|
|
| Principal
Account: |
|
|
|
|
|
|
|
Additions: |
|
|
|
|
|
|
|
Payments received on sale of participations |
|
40,626,909 |
|
|
73,930,270 |
|
|
Semi-annual distributions reinvested, above |
|
9,067,257 |
|
|
13,985,638 |
|
|
Realized gains on sale of stock units |
|
31,967,826 |
|
|
45,931,415 |
|
|
Unrealized appreciation (depreciation) of investments |
|
16,587,948 |
|
|
(13,378,650 |
) |
| |
|
|
|
|
|
|
|
|
|
98,249,940 |
|
|
120,468,673 |
|
| |
|
|
|
|
|
|
|
Deductions: |
|
|
|
|
|
|
|
Paid
on account of participations redeemed |
|
118,815,387 |
|
|
160,221,771 |
|
|
Semi-annual distributions of principal (Note 3(b)) |
|
549,286 |
|
|
651,211 |
|
| |
|
|
|
|
|
|
|
|
|
119,364,673 |
|
|
160,872,982 |
|
| |
|
|
|
|
|
|
|
Net
change in principal account |
|
(21,114,733 |
) |
|
(40,404,309 |
) |
| |
|
|
|
|
|
|
| Net assets at beginning
of period: |
|
|
|
|
|
|
| Income and distributable
fund |
|
597,016 |
|
|
666,787 |
|
| Principal
account |
|
484,597,501 |
|
|
525,001,810 |
|
| |
|
|
|
|
|
|
|
|
|
485,194,517 |
|
|
525,668,597 |
|
| |
|
|
|
|
|
|
| Net assets at end of
period: |
|
|
|
|
|
|
| Income and distributable
fund |
|
512,667 |
|
|
597,016 |
|
| Principal
account |
|
463,482,768 |
|
|
484,597,501 |
|
| |
|
|
|
|
|
|
|
|
|
$463,995,435 |
|
|
$485,194,517 |
|
| |
|
|
|
|
|
|
The accompanying notes form an integral part of these financial
statements.
8
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.
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 accounting principles generally accepted in the United
States 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 year ended December 31, 1999 the distributions from net
investment income were $0.23796 per participation and, from realized gains
were $0.15424 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
year ended December 31, 1999, the distributions from return of capital
were $0.15409 per participation.
Effective June 1,
1998 the Trust amended its Trust indenture requiring that additional
shares of common stock received as a result of a stock split shall remain
assets of the Trust.
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 $145,535 for the
year ended December 31, 1999. 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 year
ended December 31, 1999, the proceeds of sales of investment securities,
other than short-term obligations, were $81,987,609. There were no
purchases of securities during the period.
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 December 31,
1999, net unrealized appreciation of portfolio securities was
$122,860,779, comprised of unrealized appreciation of $147,123,093 and
unrealized depreciation of $24,262,314.
Note 6. Source of Net Assets
As of December 31,
1999, the Trust’s net assets were comprised of the following
amounts:
|
Net amounts paid in and reinvested
by holders net of terminations and return of capital payments |
|
$205,938,872 |
|
Cumulative amount of
non-distributable realized gains retained in principal
account |
|
134,683,117 |
|
Unrealized appreciation in value of
securities |
|
122,860,779 |
| |
|
|
|
Principal account |
|
463,482,768 |
|
Income and distributable
fund |
|
512,667 |
| |
|
|
|
Total
net assets |
|
$463,995,435 |
| |
|
|
9
NOTES TO FINANCIAL
STATEMENTS-(Continued)
Note 7. Participations Issued and Redeemed
During the periods
indicated, participations were issued and redeemed as follows:
| |
|
Number of
Participations
|
| |
|
Year Ended
December 31, 1999
|
|
Year Ended
December 31, 1998
|
| Issued on payments from
holders |
|
2,391,797 |
|
|
4,778,866 |
|
| Issued on reinvestment
of dividends and distributions |
|
724,515 |
|
|
1,198,055 |
|
| Redeemed |
|
(7,202,045 |
) |
|
(10,403,573 |
) |
| |
|
|
|
|
|
|
|
Net (decrease) |
|
(4,085,733 |
) |
|
(4,426,652 |
) |
| |
|
|
|
|
|
|
Note 8. Selected Financial Information
Selected Data Per
Participation
outstanding throughout the period:
|
|
Years Ended December
31,
|
| |
1999
|
|
1998
|
|
1997
|
|
1996
|
|
1995
|
| Net asset value,
beginning of period |
|
$ 15.70 |
|
|
$ 14.88 |
|
|
$ 16.05 |
|
|
$ 13.74 |
|
|
$ 10.51 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income from investment
operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.24 |
|
|
0.23 |
|
|
0.27 |
|
|
0.28 |
|
|
0.28 |
|
|
Net realized and unrealized gain (loss) on investments |
|
1.92 |
|
|
1.28 |
|
|
3.45 |
|
|
2.79 |
|
|
3.82 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total from investment
operations |
|
2.16 |
|
|
1.51 |
|
|
3.72 |
|
|
3.07 |
|
|
4.10 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Less
distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income |
|
(0.24 |
) |
|
(0.23 |
) |
|
(0.28 |
) |
|
(0.28 |
) |
|
(0.28 |
) |
|
Distributions from net realized gains |
|
(0.15 |
) |
|
(0.26 |
) |
|
(2.60 |
) |
|
(0.28 |
) |
|
(0.03 |
) |
Distributions from income and realized gains included in
terminations |
|
(0.02 |
) |
|
(0.02 |
) |
|
(0.11 |
) |
|
(0.02 |
) |
|
(0.02 |
) |
|
Distributions from capital |
|
(0.15 |
) |
|
(0.18 |
) |
|
(1.90 |
) |
|
(0.18 |
) |
|
(0.54 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total
distributions |
|
(0.56 |
) |
|
(0.69 |
) |
|
(4.89 |
) |
|
(0.76 |
) |
|
(0.87 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Change in net asset
value for the period |
|
1.60 |
|
|
0.82 |
|
|
(1.17 |
) |
|
2.31 |
|
|
3.23 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net asset value at end
of period |
|
$ 17.30 |
|
|
$ 15.70 |
|
|
$ 14.88 |
|
|
$ 16.05 |
|
|
$ 13.74 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total return |
|
13.68 |
% |
|
9.94 |
% |
|
23.09 |
% |
|
22.43 |
% |
|
39.21 |
% |
| |
| Ratios/supplemental
data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net assets, end of
period (000) |
|
$463,99 |
5 |
|
$485,19 |
5 |
|
$525,66 |
9 |
|
$392,29 |
5 |
|
$256,46 |
7 |
| Ratios to average net
asset of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
0.61 |
% |
|
0.65 |
% |
|
0.62 |
% |
|
0.63 |
% |
|
0.58 |
% |
|
Net investment income |
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1.41 |
% |
|
1.46 |
% |
|
1.76 |
% |
|
2.05 |
% |
|
2.57 |
% |
10
REPORT OF INDEPENDENT
ACCOUNTANTS
To the Participation Holders of
Lexington Corporate Leaders Trust Fund
In our opinion, the
accompanying statement of assets and liabilities, including the statement
of investments, and the related statements of operations and of changes in
net assets and the selected financial information present fairly, in all
material respects, the financial position of Lexington Corporate Leaders
Trust Fund (the “Trust”) at December 31, 1999, and the results
of its operations, the changes in its net assets and the selected
financial information for the year then ended, in conformity with
accounting principles generally accepted in the United States. These
financial statements and selected financial information (hereafter
referred to as “financial statements”) are the responsibility of
the Trust’s management; our responsibility is to express an opinion
on these financial statements based on our audit. We conducted our audit
of these financial statements in accordance with auditing standards
generally accepted in the United States which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that
our audit, which included confirmation of securities at December 31, 1999
by correspondence with the custodian, provides a reasonable basis for the
opinion expressed above. The financial statements for the year ended
December 31, 1998, including the selected financial information for each
of the four years in the period then ended, were audited by other
independent accountants whose report dated January 7, 1999 expressed an
unqualified opinion on those financial statements.
PricewaterhouseCoopers LLP
New York, New York
January 7, 2000
11
CHANGE IN INDEPENDENT
ACCOUNTANTS
On August 13,
1999, McGladrey & Pullen, LLP (“McGladrey”) resigned as
independent auditors of the Trust pursuant to an agreement by
PricewaterhouseCoopers LLP (“PwC”) to acquire McGladrey’s
investment company practice. The McGladrey partners and professionals
serving the Trust at the time of the acquisition joined PwC.
The reports of
McGladrey on the financial statements of the Trust during the past two
fiscal years contained no adverse opinion or disclaimer of opinion, and
were not qualified or modified as to uncertainty, audit scope or
accounting principles.
In connection with
its audits for the two most recent fiscal years and through August 13,
1999, there were no disagreements with McGladrey on any matter of
accounting principle or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of McGladrey would have caused it to make reference to the
subject matter of disagreement in connection with its report.
On August 13, 1999,
the Trust, with the approval of its Sponsor and Trustee engaged PwC as its
independent auditors.
12
Lexington®
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Mutual
Funds
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| Global •
International
Lexington Global Corporate Leaders Fund seeks long-term growth of
capital primarily through investment in a diversified portfolio of blue
chip securities domiciled in foreign countries and the U.S. that
represent "corporate leaders" in their respective
industries.
Lexington International Fund seeks long- term growth of
capital through investment in common stocks of companies domiciled in
foreign countries.
Lexington Worldwide Emerging Markets Fund 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 Troika Dialog Russia Fund seeks long-term capital
appreciation through investment primarily in the equity securities of
Russian companies.
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Lexington Small Cap Asia
Growth Fund seeks long-term capital appreciation through investment
in companies domiciled in the Asia Region with a market capitalization
of less than $1 billion.
Lexington Global Technology Fund seeks long-term growth of
capital. The Fund is designed to provide investors with a simple way to
invest in technology and information infrastructure companies located
throughout the world.
Lexington 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.
Domestic •
Lexington Corporate Leaders Trust Fund seeks long-term capital growth
and income. Portfolio assets are invested primarily in an equal number
of shares of an established list of American "blue-chip"
corporations. |
|
Lexington Growth and
Income Fund seeks long-term appreciation of capital through
investment in the common stocks of large, ably managed and well financed
companies.
Lexington GNMA Income Fund seeks a high level of current monthly
income through investment in mortgage-backed GNMA Certificates that are
guaranteed as to the timely payment of principal and interest by the
U.S. Government.
Lexington Money Market Trust seeks current income from short-term
investments as is consistent with preservation of capital and liquidity.
Precious Metals •
Lexington Goldfund seeks capital appreciation by providing a careful
mix of gold bullion and gold mining shares with assets diversified
throughout the world.
Lexington Silver Fund seeks long-term growth of capital by
investing in established silver-related companies throughout the world.
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| Lexington website •
www.lexingtonfunds.com
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[LOGO]
LEXINGTONSM
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| Website features
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- Online Account
Access
- Fund Pricing and Performance
- Site Links -
Morningstar
CNBC
Wall Street Journal
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- Meet the Managers
- News/Reviews
- Resource Center
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|
1-800-526-0056
www.lexingtonfunds.com
Lexington Funds - Providing Global
SolutionsSM
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LEXINGTON CORPORATE LEADERS
TRUST FUND |
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| Trustee
State Street Bank and
Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Auditors
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
Sponsor
Lexington Management Corporation
Park 80 West - Plaza Two
Saddle Brook, New Jersey 07663
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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
330 West Ninth Street
Kansas City, Missouri 64105
Or call Lexington Shareholder
Services at: 1-800-526-0056
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LEXLINE 800-526-0052
24-hour toll-free telephone access
to your Lexington Fund account(s)
where you can obtain the
following:
- Price/Yield
- Account Balances
- Exchanges
- Last Transactions
- Total Return
- Duplicate Statements
www.lexingtonfunds.com
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| 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.
LEX268-AR12/99 |
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The Lexington Funds
Park 80 West - Plaza Two
Saddle Brook, New Jersey 07663
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PRSRT STD
U.S. Postage
Paid
Lexington
Management Corp
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