<PAGE>
Semi-Annual
Report
[GRAPHIC]
June 30, 2000
================================================================================
Pilgrim Mutual Funds
================================================================================
PILGRIM
CORPORATE LEADERS
TRUST FUND
--------------------------------------------------
Investment Objective: Long-term Growth of Capital
and Income
<PAGE>
Chairman's Message
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Dear Shareholders:
Welcome to the Pilgrim Mutual Funds family. We are pleased to present the
Semi-Annual Report for Pilgrim Corporate Leaders Trust Fund (formerly
Lexington Corporate Leaders Trust Fund).
On July 26, 2000, ReliaStar Financial Corp. ("ReliaStar") acquired Lexington
Global Asset Managers, Inc. and all of its subsidiaries. In conjunction with
the acquisition, Pilgrim Investments, Inc., a subsidiary of ReliaStar, was
appointed to the role of Sponsor to the Trust. As a participation holder in
the Pilgrim family of funds, you now have access to more funds with varying
investment objectives. As a Lexington Fund participation holder as of July
26th, you can now exchange into any Pilgrim Fund A shares without paying a
sales load.
Our fund family has 41 varying types of mutual funds which provide more core
investment choices for the serious investor. We believe that the key to
success is matching quality core investments to the individual needs of
investors. Core investments are the foundation of every portfolio and the
basis of other important investment decisions. Pilgrim prides itself on
providing a family of core investments designed to help you reach your
financial goals. Our goal is for every investor to have a successful
investment experienceSM.
If you have any questions regarding your account, or any other Pilgrim Fund
you can access, please call us at 800-992-0180 or visit our website at
www.pilgrimfunds.com.
Sincerely,
/s/ Robert W. Stallings
Robert W. Stallings
Chairman and Chief Executive Officer
Pilgrim Group, Inc.
August, 2000
<PAGE>
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Dear Participation Holders:
The Pilgrim Corporate Leaders Trust Fund (formerly Lexington Corporate
Leaders Trust Fund) generated a total return of (9.71)%* for the six months
ended June 30, 2000. This compares to a total return of (1.65)% for the large-
cap value universe monitored by Lipper, Inc. and to a total return of (4.07)%
for the unmanaged Standard & Poor's Barra Value Index.
Portfolio Review
During the first half of 2000, rising interest rates and signs of an
economic slowdown led to an increase in market volatility. Although these
factors have affected different sectors of the market to varying degrees,
value stocks have once again underperformed both growth stocks and the general
market. Against this generally negative backdrop, several of the fund's
holdings suffered from company-specific bad news.
Procter & Gamble's shares were hit particularly hard in the face of
disappointing earnings and major changes in its top management. In an effort
to become more competitive, P&G began a series of efforts to reorganize its
business and management in order to get new products to market more quickly;
however, the company now concedes that it moved too far too fast, damaging its
core businesses in the process. So, although this company remains one of the
best and biggest consumer products companies in the world, its turnaround will
take longer than expected. In the telecommunications sector, two of the
portfolios holdings turned in poor returns in the first half. AT&T has been
hurt by declining market share in its traditional businesses and its new
businesses have not yet grown enough to offset these declines. Nevertheless,
this telecommunications giant should produce better returns in the years ahead
as its newer businesses (including recent acquisitions in cable services)
begin to grow. Lucent Technologies (which was formed from the systems and
technologies businesses of AT&T) has turned in poor returns this year,
reflecting revenues and earnings disappointments. However, this company, which
is destined to be a continuing major presence in the technology field, has
recently begun to record better revenue figures and we expect its returns to
improve. Honeywell's shares have also performed poorly to date this year.
However, this company, formed from the December 1999 merger of Allied-Signal
and Honeywell, has reported good operating results this year and is expected
to continue to show good results over the near and medium terms.
On the positive side, several of the fund's holdings performed very well
during the first half. Venator, the world's largest athletic retailer and the
owner of such brands as Foot Locker, has been experiencing strong growth in
sales and market share. Not only is this sales growth expected to continue,
the company has been emphasizing higher margin products, which should
contribute to further earnings growth. Union Pacific, the largest railroad in
the U.S., has been experiencing strong traffic volume growth this year and is
expected to continue to experience strong growth. At the same time, it is
emphasizing increased efficiency and service improvements, which should
contribute to continued positive returns over the near and medium terms.
Although still in the midst of streamlining operations, Citigroup, formed by
the merger of Citicorp and Travelers, has been recording exceptional operating
results in 2000. Given its presence in growing markets and the expected
efficiencies resulting from further cost controls, this large financial
services conglomerate should continue to deliver superior operating results
over the next few years.
Market Outlook
As we look forward, the signs of an economic slowdown appear to be
broadening. Growth over most sectors is expected to slow. Nevertheless, the
U.S. economy remains strong, which bodes well for the global economy. Earnings
growth should continue, but at lower rates, which in turn could lower expected
returns from stocks in the near term.
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1
<PAGE>
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On the positive side, an end to anticipated rate increases by the Federal
Reserve should provide support to the equity markets. Returns from stocks in
the U.S. are expected to remain positive; however they should be well below
the 20% annual gains over the past five years.
Strong worldwide growth improves the earnings outlook for many of the
companies in our portfolio. Furthermore, we expect continued benefit from some
of the recently merged companies in the portfolio as well as from some of the
core corporate leaders such as General Electric. In an environment of more
modest stock returns, we expect the yields from the financially strong
utilities in the portfolio to provide some support to overall returns.
Over the long term, we are quite confident about the prospects for the
Pilgrim Corporate Leaders Trust Fund. As investors adjust to more rational
return expectations in the equity markets, we expect the overlooked value
stocks, such as those contained in the Fund, to provide better returns over
the long term. 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.
As you are aware, Lexington Global Asset Managers, Inc., the parent company
of Lexington Management Corporation was acquired by ReliaStar Financial Corp.
(NYSE:RLR) the parent company of Pilgrim Investments, Inc., an investment
management and mutual fund company with $17 billion of assets under
management.
On May 1, ReliaStar announced that it agreed to be acquired by ING Groep
N.V. ("ING Group") in a transaction that, subject to certain approvals, is
expected to close in the third quarter of this year. ING Group is a global
financial institution that is active in the field of insurance, banking, and
asset management in more than 60 countries.
We wish to thank you for your continued support.
Sincerely,
/s/ RICHARD M. HISEY
RICHARD M. HISEY
Portfolio Manager
August, 2000
* (8.90)%, 14.72% and 13.29% are the one, five and ten annual standard total
returns, respectively, for the period ended June 30, 2000. 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 at
their original cost. Total return represents past performance and is not
predictive of future results.
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2
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If you had invested $10,000 59 1/2 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 June
30, 2000. 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 Pilgrim Corporate Leaders Trust
Fund, tend to move with the basic inflationary trend and offer your dollars an
opportunity to grow.
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3
<PAGE>
PILGRIM CORPORATE LEADERS TRUST FUND
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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; June 30, 2000--$13,178; Total--$1,765,448.
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<TABLE>
<CAPTION>
VALUE OF PARTICIPATIONS
Cumulative
Cost of
Amount of Participations Cumulative Purchased Through Purchased
Dividends Purchased Cost Reinvestment of Through Number
Year Reinvested Through Including Distributions from Reinvestment Net of
Ended Semi- Reinvestment Reinvested Initially Realized Gains of Dividends Asset Partici-
Dec. 31 Annually of Dividends Dividends Acquired (Cumulative) Sub-Total (Cumulative) Value pations
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1941* -- -- $ 10,000 $ 8,799 -- $ 8,799 -- $ 8,799 566
1942 -- -- 10,000 9,613 -- 9,613 -- 9,613 584
1943 $ 190 $ 190 10,190 10,809 -- 10,809 $ 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 12,980 19,871 994 20,865 2,779 23,644 1,392
1951 1,012 3,992 13,992 21,659 1,756 23,415 3,674 27,089 1,652
1952 1,054 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
June 30, 2000 41,968 1,166,478 1,176,478 1,967,841 1,991,591 3,959,432 1,345,523 5,304,955 343,585
</TABLE>
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* 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
<PAGE>
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STATEMENT OF ASSETS AND LIABILITIES June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets
Investments at market quotations, common stocks
(identified cost $306,891,167).................................. $361,856,666
Cash............................................................. 5,285,362
Subscriptions receivable......................................... 134,567
Receivable for accrued dividends................................. 490,652
------------
Total assets............................................... 367,767,247
------------
Liabilities
Distribution payable............................................. 641,045
Payable for participations redeemed.............................. 542,822
Accrued expenses................................................. 125,844
------------
Total liabilities.......................................... 1,309,711
------------
Net Assets
Balance applicable to 23,738,885 participations outstanding (Note
6).............................................................. $366,457,536
============
Computation of public offering price:
Net asset value, offering and redemption price per participation
(net assets divided by participations outstanding)............. $ 15.44
============
</TABLE>
The accompanying notes form an integral part of these financial statements.
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5
<PAGE>
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STATEMENT OF INVESTMENTS June 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Market
Securities Shares Cost Value
------------------------------------------- --------- ------------ ------------
<S> <C> <C> <C>
Consumer Products: (11.6%)
Eastman Kodak Co. ......................... 260,300 $ 19,118,546 $ 15,487,850
Fortune Brands, Inc. ...................... 260,300 8,645,436 6,003,169
Gallaher Group PLC......................... 260,300 4,868,359 5,580,181
Proctor & Gamble Co. ...................... 260,300 18,803,926 14,902,175
------------ ------------
51,436,267 41,973,375
------------ ------------
Oil International: (18.3%)
Chevron Corp. ............................. 260,300 17,816,346 22,076,694
Exxon Mobil Corp. ......................... 562,200 30,169,748 44,132,700
------------ ------------
47,986,094 66,209,394
------------ ------------
Chemical & Fertilizers: (6.7%)
DuPont (E.I.) de Nemours & Co. ............ 260,300 14,638,099 11,388,125
Union Carbide Corp. ....................... 260,300 11,916,627 12,884,850
------------ ------------
26,554,726 24,272,975
------------ ------------
Electrical Equipment: (11.7%)
General Electric Co. ...................... 796,100 16,383,885 42,193,300
------------ ------------
16,383,885 42,193,300
------------ ------------
Broadcasting: (4.9%)
Viacom Inc. Class B*....................... 260,300 5,722,301 17,749,206
------------ ------------
5,722,301 17,749,206
------------ ------------
Retailing: (3.1%)
Sears, Roebuck & Co. ...................... 260,300 12,614,281 8,492,288
Venator Group, Inc.*....................... 260,300 5,135,015 2,668,075
------------ ------------
17,749,296 11,160,363
------------ ------------
Utilities: (6.3%)
Consolidated Edison Co. NY................. 260,300 8,662,589 7,711,388
PG & E..................................... 260,300 6,801,746 6,409,888
Ameren Corp. .............................. 260,300 10,348,209 8,785,125
------------ ------------
25,812,544 22,906,401
------------ ------------
Railroads: (6.8%)
Burlington Northern Santa Fe............... 648,042 19,260,751 14,864,462
Union Pac Corp. ........................... 260,300 15,003,592 9,679,906
------------ ------------
34,264,343 24,544,368
------------ ------------
Energy: (11.3%)
Columbia Energy Group...................... 448,550 17,102,456 29,436,094
Union Pacific Res Group Inc. .............. 219,067 5,484,798 4,819,474
USX Marathon Group......................... 260,300 6,985,009 6,523,769
------------ ------------
29,572,263 40,779,337
------------ ------------
Misc. Industrial: (5.1%)
Honeywell International.................... 260,300 10,671,711 8,768,856
Praxair Inc. .............................. 260,300 11,941,409 9,744,981
------------ ------------
22,613,120 18,513,837
------------ ------------
Communications: (7.3%)
AT&T Corp. ................................ 419,200 12,143,743 13,257,200
Lucent Technologies, Inc. ................. 222,120 5,428,368 13,160,610
------------ ------------
17,572,111 26,417,810
------------ ------------
Financial: (6.9%)
CitiGroup Inc. ............................ 417,200 11,224,217 25,136,300
------------ ------------
11,224,217 25,136,300
------------ ------------
Total Investments (100.00%)................ $306,891,167 $361,856,666
------------ ------------
</TABLE>
* Non Income producing
The accompanying notes form an integral part of these financial statements.
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6
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STATEMENT OF OPERATIONS Six Months Ended June 30, 2000
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<TABLE>
<S> <C>
Investment income:
Income:
Dividends (net of $27,677 tax expense)......................... $ 4,189,411
Interest....................................................... 40,723
------------
Total income.................................................. 4,230,134
------------
Expenses:
Sponsor's administrative fee (Note 4)........................... 793,894
Professional fees............................................... 47,253
Trustee's fee (Note 4).......................................... 5,833
Custody fees and other services (Note 4)........................ 99,286
Transfer agent fees............................................. 226,989
Printing, mailing and sundry.................................... 48,049
Registration and filing fees.................................... 20,417
------------
Total expenses................................................ 1,241,721
------------
Net investment income......................................... 2,988,413
------------
Realized and unrealized gain/(loss) on investments:
Net realized gain from securities transactions.................. 21,422,606
Unrealized depreciation of investments for the period........... (67,895,280)
------------
Net loss on investments....................................... (46,472,674)
------------
Net decrease in net assets from operations.................... $(43,484,261)
============
</TABLE>
The accompanying notes form an integral part of these financial statements.
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7
<PAGE>
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STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, December 31,
2000 1999
---------------- ------------
<S> <C> <C>
Income and Distributable Fund:
Additions:
Net investment income........................ $ 2,988,413 $ 6,656,513
Realized gains from sale of securities,
other than sale of stock units.............. 984,674 4,133,398
------------ ------------
3,973,087 10,789,911
------------ ------------
Deductions:
Paid on account of participations redeemed... 302,520 414,733
Semi-annual distributions (Note 3(a))
Paid in cash.............................. 578,342 1,392,270
Reinvested, below......................... 3,240,086 9,067,257
------------ ------------
4,120,948 10,874,260
------------ ------------
Net change in income and distributable fund.. (147,861) (84,349)
------------ ------------
Principal Account:
Additions:
Payments received on sale of participations.. 23,108,178 40,626,909
Semi-annual distributions reinvested, above.. 3,240,086 9,067,257
Realized gains on sale of stock units........ 20,437,932 31,967,826
Unrealized appreciation (depreciation) of
investments................................. (67,895,280) 16,587,948
------------ ------------
(21,109,084) 98,249,940
------------ ------------
Deductions:
Paid on account of participations redeemed... 76,218,665 118,815,387
Semi-annual distributions of principal (Note
3(b))....................................... 62,289 549,286
------------ ------------
76,280,954 119,364,673
------------ ------------
Net change in principal account.............. (97,390,038) (21,114,733)
------------ ------------
Net assets at beginning of period:
Income and distributable fund................... 512,667 597,016
Principal account............................... 463,482,768 484,597,501
------------ ------------
463,995,435 485,194,517
------------ ------------
Net assets at end of period:
Income and distributable fund................... 364,806 512,667
Principal account............................... 366,092,730 463,482,768
------------ ------------
$366,457,536 $463,995,435
============ ============
</TABLE>
The accompanying notes form an integral part of these financial statements.
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8
<PAGE>
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NOTES TO FINANCIAL STATEMENTS
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Note 1. Nature of Business and Basis of Presentation
Pilgrim Corporate Leaders Trust Fund (formerly 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 six months ended June 30, 2000 the distributions from net
investment income were $0.12357 per participation and, from realized gains
were $0.03880 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,
2000, the distributions from return of capital were $0.01749 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 $105,119
for the six months ended June 30, 2000. The Trust paid 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, 2000, the proceeds of sales of
investment securities, other than short-term obligations, were $51,757,835.
Purchases of securities during the period were $7,080,181.
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, 2000, net unrealized appreciation of portfolio securities was
$54,965,499, comprised of unrealized appreciation of $92,831,085 and
unrealized depreciation of $37,865,586.
Note 6. Source of Net Assets
As of June 30, 2000, 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 payments.................... $156,006,182
Cumulative amount of non-distributable realized gains retained
in principal account........................................... 155,121,049
Unrealized appreciation in value of securities.................. 54,965,499
------------
Principal account............................................... 366,092,730
Income and distributable fund................................... 364,806
------------
Total net assets............................................... $366,457,536
============
</TABLE>
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9
<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, 2000 December 31, 1999
---------------- -----------------
<S> <C> <C>
Issued on payments from holders............ 1,423,467 2,391,797
Issued on reinvestment of dividends and
distributions............................. 232,551 724,515
Redeemed................................... (4,735,926) (7,202,045)
---------- ----------
Net (decrease)........................... (3,079,908) (4,085,733)
========== ==========
</TABLE>
Note 8. Subsequent Events
Effective on July 26, 2000, Lexington Global Asset Managers, Inc., the parent
of Lexington Management Corporation, Inc. was acquired by ReliaStar Financial
Corp. ("ReliaStar"). In conjunction with the acquisition and following
approval by the Trustee, Pilgrim Investments, Inc., an indirect, wholly owned
subsidiary of ReliaStar, was appointed to the role of Sponsor to the Trust
effective July 26, 2000 and the Trust changed its name to Pilgrim Corporate
Leaders Trust Fund.
On May 1, 2000, ReliaStar Financial Corp. (NYSE:RLR), the indirect parent
company of Pilgrim Investments, Inc., entered into an agreement under which it
will be acquired by ING Groep N.V. (NYSE:ING). ING Groep N.V. is a global
financial institution active in the field of insurance, banking, and asset
management in more than 60 countries, with almost 90,000 employees. Completion
of the acquisition is contingent upon, among other things, approval by the
Directors/Trustees of the Pilgrim Funds and certain shareholder and regulatory
approvals. The closing of the acquisition is expected to occur during the
third quarter of 2000.
-------------------------------------------------------------------------------
10
<PAGE>
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS-(Continued)
--------------------------------------------------------------------------------
Note 9. Selected Financial Information
<TABLE>
<CAPTION>
Years Ended December 31,
Six Months Ended -------------------------------------------
June 30, 1999 1998 1997 1996 1995
2000 ------- ------- ------- ------- -------
Selected Data Per
Participation
outstanding throughout
the period:
----------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 17.30 $ 15.70 $ 14.88 $ 16.05 $ 13.74 $ 10.51
------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income.. 0.12 0.24 0.23 0.27 0.28 0.28
Net realized and
unrealized gain (loss)
on investments........ (1.79) 1.92 1.28 3.45 2.79 3.82
------- ------- ------- ------- ------- -------
Total from investment
operations............. (1.67) 2.16 1.51 3.72 3.07 4.10
------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net
investment income..... (0.12) (0.24) (0.23) (0.28) (0.28) (0.28)
Distributions from net
realized gains........ (0.04) (0.15) (0.26) (2.60) (0.28) (0.03)
Distributions from
income and realized
gains included in
terminations.......... (0.01) (0.02) (0.02) (0.11) (0.02) (0.02)
Distributions from
capital............... (0.02) (0.15) (0.18) (1.90) (0.18) (0.54)
------- ------- ------- ------- ------- -------
Total distributions..... (0.19) (0.56) (0.69) (4.89) (0.76) (0.87)
------- ------- ------- ------- ------- -------
Change in net asset
value for the period... (1.86) 1.60 0.82 (1.17) 2.31 3.23
------- ------- ------- ------- ------- -------
Net asset value at end
of period.............. $ 15.44 $ 17.30 $ 15.70 $ 14.88 $ 16.05 $ 13.74
======= ======= ======= ======= ======= =======
Total return............ (9.71)%* 13.68% 9.94% 23.09% 22.43% 39.21%
Ratios/supplemental data
Net assets, end of
period (000)........... $366,457 $463,995 $485,195 $525,669 $392,295 $256,467
Ratios to average net
asset of:
Expenses............... 0.63%** 0.61% 0.65% 0.62% 0.63% 0.58%
Net investment income.. 1.51%** 1.41% 1.46% 1.76% 2.05% 2.57%
</TABLE>
*Unannualized
**Annualized
--------------------------------------------------------------------------------
11
<PAGE>
-------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
-------------------------------------------------------------------------------
To the Participation Holders of
Pilgrim 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 Pilgrim
Corporate Leaders Trust Fund, (formerly Lexington Corporate Leaders Trust
Fund), (the "Trust") at June 30, 2000, the results of its operations for the
six months then ended and the changes in its net assets and the selected
financial information for the six months then ended and for the year ended
December 31, 1999, 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 audits. We conducted our
audits 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 audits, which included confirmation of
securities at June 30, 2000 by correspondence with the custodian, provide a
reasonable basis for the opinion expressed above. The selected financial
information for each of the four years in the period ended December 31, 1998,
were audited by other independent accountants whose report dated January 7,
1999 was unqualified.
PricewaterhouseCoopers LLP
New York, New York
July 13, 2000, except as to Note 8,
which is as of July 26, 2000.
-------------------------------------------------------------------------------
12
<PAGE>
PILGRIM CORPORATE LEADERS
TRUST FUND
Trustee
State Street Bank and All Shareholder requests for
Trust Company services of any kind should be sent
225 Franklin Street to:
Boston, Massachusetts 02110
Auditors Transfer Agent
PricewaterhouseCoopers LLP Lexington Funds
1177 Avenue of the Americas c/o DST Systems, Inc.
New York, New York 10036 P.O. Box 219368
Kansas City, Missouri 64121-6368
Sponsor Or call toll free Service and Sales:
Pilgrim Investments, Inc. 1-800-526-0056
40 North Central Avenue
Suite 1200
Phoenix, Arizona 85004-4408
This report has been prepared for the information of the Participation Holders
of Pilgrim 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-
SAR6/00
