Dear Shareholders:
- -------------------------------------------------------------------------------
For the first half of 1996 the Lexington Worldwide Emerging Markets Fund
returned 13.4%* compared to 14.7% for the average emerging markets fund
monitored by Lipper Analytical Services, Inc. For the same period the unmanaged
Morgan Stanley Emerging Markets Free Index is lagging actively managed
portfolios with a return of 9.3%.
Poorly performing markets in Greece, South Korea, South Africa, and Israel,
all markets in which Lexington Worldwide Emerging Markets Fund has significant
holdings, were primarily the cause of the Fund's weak performance in the second
quarter. The Fund was also disadvantaged by a slight underweighting in the
strongly performing Latin American region. On a positive note, the Eastern
European markets continued to provide shareholders with strong gains during the
quarter. For example, Polish equities advanced 13.6% during the quarter.
Emerging market returns varied widely during the second quarter. Latin
American markets as a region were the best. Argentina advanced 14.4%, Brazil
14.0%, and Chile 9.3% to lead the pack. The star performer, however, was
Venezuela with a whopping 39.5% return. Venezuela's gains came off extremely
depressed levels as its economy is in financial crisis. A reluctant President
Caldera is finally embracing IMF restructuring plans and this has propelled the
market. In general Latin America has benefitted from investor perceptions that
the worst of the financial crisis is over in the region and growth is on the
way. In Mexico, greater economic optimism has allowed the Mexican peso to
appreciate in real terms. The strength of the peso has enabled Mexican interest
rates to fall dramatically. Falling interest rates combined with a strong U.S.
stock market, where many Mexican stocks trade, have propelled Mexican equities.
Future gains may prove more difficult, particularly if U.S. rates rise.
Valuation levels are now certainly less attractive as well. Asian equities did
not perform particularly well during the second quarter. Taiwan was an exception
with a gain of 36.6% after a dismal first quarter. Tensions with the Chinese
government subsided after the Taiwanese elections and this soothed investor
fears. Taiwan stocks were also helped by obtaining a heavier weighting in the
unmanaged Morgan Stanley Emerging Markets Free Index. Growth throughout much of
the Asian region is slowing. Exports have clearly slowed down probably due to
both cyclical and secular factors. Due to strong currencies and high wage gains
over the years, many industries in Asia are losing the competitive advantages
they once had. Finally, although growth in the region will remain above the
developed world, it is a story well known by investors and as a result stocks
are generally expensive. Stock selection in Asia is becoming more critical than
ever. Eastern Europe continues to attract more investor interest. Polish GDP is
growing at 6% per annum as foreign direct investment continues to
1
<PAGE>
accelerate. Western European companies as well as American firms are looking to
produce goods in Eastern Europe due to low labor costs. Eastern Europe also
provides a geographic advantage by lying between Western Europe, Russia, and
Asia.
The second half of 1996 will be challenging. We expect U.S. interest rates
to rise as growth stays strong. Rising U.S. rates, followed later by rising
Japanese interest rates will put an end to the favorable liquidity environment
global equities have enjoyed. Latin and Asian stocks will be most vulnerable to
a hike in U.S. rates due to currency linkages to the U.S. dollar. The Lexington
Worldwide Emerging Markets Fund has sought investments in regions with lower
correlations to the U.S. market. As a result, holdings in Eastern Europe, South
Korea, and Greece should perform well on a relative basis should world interest
rates rise. The Fund also retains 5% in South African gold shares which should
benefit as inflationary fears are stirred from stronger global growth. Cash
positions have been raised to 10% to take advantage of any buying opportunities
that may develop. The Fund continues to have overweight positions in Eastern
Europe, including Russia. Valuation levels are compelling, foreign direct
investment is accelerating, and the recent election of Boris Yeltsin shows most
Russians favor reform. Greece may be a sleeper market. Inflation has now fallen
below 9% and a new pro-reform government has solidified power. Stocks in Greece
are cheap so the risk/reward ratio is compelling. Although we currently don't
favor Latin America or Asia, the Fund still provides substantial exposure to
these regions. The long-term outlook remains favorable and exciting companies
such as Santa Isabel in Chile or Filinvest Land in the Philippines can still be
found.
We would like to take this opportunity to thank our shareholders for their
support and we look forward to rewarding them in the long-term with the
investment opportunities provided by emerging markets.
Sincerely,
Richard T. Saler Robert M. DeMichele
Portfolio Manager President
July, 199 July, 1996
*9.70%, 10.51% and 8.39% are the one, five and ten year average annual standard
total returns, respectively, for the period ended June 30, 1996. Investment
return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than at their
original cost. Total return represents past performance.
2
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
COMMON STOCKS: 88.3%
ARGENTINA: 0.9%
1,013,000 Sociedad Comercial del Plata S.A. ............... $ 3,131,579
------------
BRAZIL: 8.5%
379,400 Aracruz Celulose S.A. (ADR) ..................... 3,604,300
8,750,000 Brasmotor S.A. (Preferred shares) ............... 2,867,479
8,940,000 Cia Tecidos Norte De Mina (Preferred shares) .... 3,526,398
216,800 Compania Vale Do Rio Doce (ADR)
(Preferred shares) ........................... 4,340,076
118,570,000 Lojas Americanas S.A. ........................... 2,356,282
67,836,000 Telecomunicacoes Brasileiras S.A. ............... 4,851,703
20,100,000 Telecomunicacoes de Sao Paulo S.A. .............. 4,324,734
2,160,057,000 Usinas Siderurgicas de Minas Gerais S.A. ........ 2,323,798
------------
28,194,770
------------
CHILE: 6.1%
864,000 Antofagasta Holdings Plc ........................ 4,330,360
159,100 Banco O'Higgins (ADR) ........................... 3,838,288
199,300 Banco Osorno y La Union (ADR) ................... 2,690,550
136,800 Madeco, S.A. (ADR) .............................. 3,847,500
138,800 Maderas y Sinteticos Sociedad Anonima
S.A. (ADR) .................................... 2,463,700
110,000 Santa Isabel S.A. (ADR) ......................... 3,052,501
------------
20,222,899
------------
COLUMBIA: 0.2
40,300 Banco Ganadero S.A. (ADR) ....................... 785,850
------------
CZECH REPUBLIC: 1.0%
26,580 SPT Telekon AS2 ................................. 3,241,934
------------
GREECE: 4.9%
160,100 Delta Dairy S.A. (Preferred shares) ............. 1,289,253
94,500 Ergo Bank S.A. .................................. 5,197,480
89,900 Hellenic Bottling Company S.A. .................. 2,981,616
205,900 Michaniki S.A. .................................. 2,388,819
91,300 Titan Cement Company ............................ 4,506,069
------------
16,363,237
------------
HONG KONG: 1.6%
3,548,000 China Hong Kong Photo Productions ............... 2,028,358
3,744,000 Founder Hong Kong, Ltd. ......................... 1,559,960
4,982,000 Golden Harvest Entertainment, Ltd. .............. 1,802,227
------------
5,390,545
3
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
HUNGARY: 2.5%
42,000 EGIS Rt. ........................................ $ 2,509,487
82,520 Pick Szeged Rt. ................................. 3,570,867
45,700 Richter Gedeon Rt. .............................. 2,327,442
------------
8,407,796
------------
INDIA: 3.2%
82,100 Bajaj Auto, Ltd.2 ............................... 3,140,325
102,100 Hindalco Industries, Ltd.2 ...................... 3,879,800
392,100 The India Fund, Inc. ............................ 3,626,925
------------
10,647,050
------------
INDONESIA: 3.1%
2,804,000 PT Hero Supermarket ............................. 2,772,657
391,000 PT Modern Photo Film Company .................... 1,680,997
1,166,000 PT Semen Cibinong ............................... 2,631,771
583,000 PT Semen Gresik ................................. 1,698,119
2,038,000 PT Sinar Mas Agro Resources Agricultural
Production and Technology Corporation ........ 1,489,510
------------
10,273,054
------------
ISRAEL: 3.3%
790 Africa-lsrael Investments, Ltd.2 ................ 744,346
162,600 First Israel Fund, Inc. ......................... 1,869,900
38,740 Koor Industries, Ltd. ........................... 3,282,805
366,336 Osem Investment, Ltd. ........................... 2,156,534
74,300 Teva Pharmaceutical Industries, Ltd. (ADR) ...... 2,818,756
------------
10,872,341
------------
MALAYSIA: 5.3%
980,000 Berjaya Singer Bhd .............................. 1,013,996
1,245,000 Cement Industries of Malaysia Bhd ............... 4,194,105
800,000 IOI Properties Bhd .............................. 2,518,548
480,000 Malaysian Assurance Alliance Bhd ................ 2,541,007
499,000 New Straits Times Press Bhd ..................... 2,601,564
1,005,000 Sungei Way Holdings Bhd ......................... 4,715,661
------------
17,584,881
------------
MEXICO: 5.0%
209,500 Grupo Casa Autrey, S.A. de C.V. (ADR) ........... 4,504,250
3,565,000 Grupo Industrial Maseco S.A. de C.V. ............ 3,722,452
127,300 Grupo Televisa S.A. (ADR) ....................... 3,914,475
477,500 Tubos De Acero De Mexico S.A. (ADR)2 ............ 4,506,406
------------
16,647,583
------------
4
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
PAKISTAN: 0.6%
313,700 Pakistan Investment Fund, Inc. .................. $ 2,117,475
------------
PHILIPPINES: 6.3%
2,034,700 Ayala Land, Inc. "B" ............................ 3,658,412
17,228,250 Filinvest Land, Inc.2 ........................... 7,085,068
3,124,850 International Container Terminal Service, Inc. .. 2,121,886
363,000 Manila Electric Company "B" ..................... 3,818,860
7,862,000 Universal Robina Corporation .................... 4,210,712
------------
20,894,938
------------
POLAND: 9.2%
211,500 Bank Rozwoju Eksportu S.A. ...................... 5,525,241
116,100 Debica S.A. ..................................... 2,819,413
806,280 Elektrim Towarzystwo Handlowe S.A. .............. 6,615,661
29,803 Gorazdze S.A. ................................... 778,576
1,401,000 Mostostal-Export S.A. ........................... 4,794,061
447,900 Polifarb Cieszyn Wroclaw S.A. ................... 2,274,273
297,600 Stomil Olsztyn S.A.2 ............................ 4,150,063
47,400 Zaklady Piwowarski w Zywcu S.A. ................. 3,662,521
------------
30,619,809
------------
PORTUGAL: 1.9%
58,000 Banco Comercial Portugues ....................... 685,185
215,100 Portugal Telecom S.A. ........................... 5,621,994
------------
6,307,179
------------
RUSSIA: 2.8%
829,700 Lukoil Holdings2 ................................ 9,126,700
------------
SINGAPORE: 3.5%
855,000 Far East Levingston Shipbuilding, Ltd. .......... 4,727,440
233,000 Jurong Engineering, Ltd. ........................ 819,225
313,000 Keppel Corporation, Ltd. ........................ 2,618,133
147,000 Oversea-Chinese Banking Corporation, Ltd. ....... 1,719,359
243,000 Overseas Union Bank, Ltd. ....................... 1,670,873
------------
11,555,030
------------
SOUTH AFRICA: 6.5%
63,500 Anglo American Corporation of South
Africa, Ltd. (ADR) ........................... 4,016,375
245,609 Anglo American Platinum (ADR)2 .................. 1,531,374
344,600 Driefontein Consolidated, Ltd. .................. 4,618,022
171,200 Free State Consolidated Gold Mines, Ltd. ........ 1,611,922
145,000 Kloof Gold Mining Company, Ltd. ................. 1,373,614
85,300 Liberty Life Association of Africa .............. 2,746,470
226,063 Rustenburg Platinum Holdings, Ltd. (ADR) ........ 3,523,780
25,600 Vaal Reefs Exploration & Mining Company, Ltd. ... 2,090,943
------------
21,512,500
------------
5
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
SOUTH KOREA: 4.9%
100,000 Cho Hung Bank ................................... $ 1,054,254
248,500 Daewoo Heavy Industries ......................... 2,108,113
43,500 Hyundai Motor Company, Ltd. ..................... 1,641,307
202 Kia Motors Corporation2 ......................... 3,377
116,600 Korea Electric Power Corporation ................ 4,025,647
22,409 Korea Long Term Credit Bank ..................... 580,258
49,950 Pohang Iron & Steel Company, Ltd. ............... 3,134,963
20,200 Pohang Iron & Steel Company, Ltd. (ADR) ......... 492,375
27,100 Samsung Electronics Company ..................... 2,275,598
26,062 Sung Shin Cement Industrial Company, Ltd. ....... 787,323
------------
16,103,215
------------
TAIWAN: 1.9%
256,125 Taiwan Fund, Inc. ............................... 6,147,000
------------
THAILAND: 3.2%
129,000 Bangkok Bank, Ltd. .............................. 1,747,844
436,000 Krung Thai Bank Public Company, Ltd. ............ 2,043,562
310,000 Matichon Public Company, Ltd. ................... 2,393,162
180,000 Siam City Cement Company, Ltd. .................. 2,268,699
34,000 The Siam Cement Public Company, Ltd. ............ 1,668,597
41,400 Total Access Communication Plc1 ................. 351,900
------------
10,473,764
------------
VENEZUELA: 1.9%
451,440 Ceramanic Carobobo (ADR) ........................ 461,913
414,580 Mantex S.A. (ADR) ............................... 2,739,628
139,399 Mavesa S.A. (ADR)1 .............................. 552,703
545,850 Mavesa S.A. (ADR) ............................... 2,164,241
------------
5,918,485
------------
TOTAL COMMON STOCKS (cost $270,620,983) ......... 292,539,614
------------
6
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
Number of
Shares or
Principal Value
Amount Security (Note 1)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 10.1%
$13,500,000 Federal Home Loan Bank, 5.27%, due 07/05/96 ....... $ 13,492,095
10,000,000 Federal National Mortgage Association, 5.28%,
due 07/30/96 ................................... 9,957,467
10,000,000 U.S. Treasury Bills, 5.03%, due 07/11/96 .......... 9,982,000
------------
TOTAL SHORT-TERM INVESTMENTS (cost $33,435,951) ... 33,431,562
------------
TOTAL INVESTMENTS: 98.4% (cost $304,056,934+)
(Note 1) ....................................... 325,971,176
Other assets in excess of liabilities: 1.6% ....... 5,225,571
------------
TOTAL NET ASSETS: 100.0% (equivalent to $12.13
per share on 27,305,237 shares outstanding) .... $331,196,747
============
1Restricted securities. (Note 6)
2Non-income producing securities.
ADR-American Depository Receipt.
+Aggregate cost for Federal income tax purposes is identical.
------------------------
At June 30, 1996, the composition of the Fund's net assets by industry
concentration was as follows:
Left Column
Banking .......................... 8.2%
Capital Equipment ................ 7.2%
Construction and Housing ......... 1.0%
Consumer (Durables) .............. 5.1%
Consumer (Non-Durables) .......... 7.8%
Electrical and Electronics ....... 0.7%
Energy Sources ................... 2.8%
Financial Services ............... 1.6%
Gold ............................. 2.9%
Health & Personal Care ........... 3.7%
Right Column
Materials ....................... 16.9%
Merchandising ................... 2.5%
Multi-Industry .................. 9.4%
Real Estate ..................... 4.0%
Services ........................ 4.5%
Telecommunications .............. 5.6%
Trade ........................... 2.0%
U.S. Government Obligations ..... 10.1%
Utilities ....................... 2.4%
Other assets .................... 1.6%
-----
Net Assets ................... 100.0%
=====
7
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Statement of Assets and Liabilities
June 30, 1996 (unaudited)
Assets
Investments, at value (cost $304,056,934) (Note 1) .............. $325,971,176
Cash ............................................................ 1,222,375
Foreign currencies, at value (cost $799,435) .................... 799,094
Receivable for investment securities sold ....................... 4,387,279
Receivable for shares sold ...................................... 1,102,166
Dividends and interest receivable ............................... 623,071
Foreign taxes recoverable ....................................... 16,996
------------
Total Assets .............................................. 334,122,157
------------
Liabilities
Due to Lexington Management Corporation (Note 2) ................ 261,450
Payable for investment securities purchased ..................... 1,367,272
Payable for shares redeemed ..................................... 769,857
Accrued expenses ................................................ 526,831
------------
Total Liabilities ......................................... 2,925,410
------------
Net Assets (equivalent to $12.13 per share
on 27,305,237 shares outstanding) (Note 3) ................... $331,196,747
============
Net Assets consist of:
Capital stock-authorized 100,000,000 shares, $1.00
par value per share .......................................... $ 27,305,237
Additional paid-in capital (Note 1) ............................. 305,847,986
Undistributed net investment income (Note 1) .................... 223,970
Accumulated net realized loss on investments and foreign
currency holdings (Note 1) ................................... (24,085,954)
Net unrealized appreciation of investments and foreign
currency holdings ............................................ 21,905,508
------------
$331,196,747
============
The Notes to Financial Statements are an integral part of this statement.
8
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Statement of Operations
Six months ended June 30, 1996 (unaudited)
Investment Income
Income
Dividends ........................................ $ 3,664,033
Interest ......................................... 514,692
-----------
4,178,725
Less: Foreign tax expense ........................ 512,943
-----------
Total investment income ....................... 3,665,782
Expenses
Investment advisory fee (Note 2) ................. 1,709,656
Transfer agent and shareholder servicing
expense (Note 2) .............................. 509,612
Custodian fees ................................... 415,454
Accounting expenses (Note 2) ..................... 129,278
Printing and mailing expenses .................... 80,093
Registration fees ................................ 47,468
Professional fees ................................ 26,208
Directors' fees .................................. 7,308
Other expenses ................................... 96,614
----------
Total expenses ................................ 3,021,691
-----------
Net investment income ...................... 644,091
-----------
Realized and Unrealized Gain (Loss) on Investments
(Note 5)
Net realized gain (loss) on:
Investments ................................. 11,938,269
Foreign currency transactions ............... (163,958)
-----------
Net realized gain on investments ......... 11,774,311
Net change in unrealized appreciation
(depreciation) on:
Investments ................................. 24,903,164
Foreign currency translation of other assets
and liabilities ........................... (7,109)
-----------
Net change in unrealized appreciation ..... 24,896,055
-----------
Net realized and unrealized gain .......... 36,670,366
-----------
Increase in Net Assets Resulting from Operations .... $37,314,457
===========
The Notes to Financial Statements are an integral part of this statement.
9
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Statements of Changes in Net Assets
Years ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
Six months
ended Year ended
June 30, 1996 December 31,
(unaudited) 1995
------------ ------------
<S> <C> <C>
Net investment income ........................................... $ 644,091 $ 1,973,177
Net realized gain (loss) from investments and
foreign currency transactions ................................. 11,774,311 (33,750,839)
Change in unrealized appreciation (depreciation) of
investments and foreign currency translations ................. 24,896,055 16,901,196
------------ ------------
Increase (decrease) in net assets resulting from operations . 37,314,457 (14,876,466)
Distributions to shareholders from net investment income ........ - (1,973,177)
Distributions to shareholders in excess of net
investment income (Note 1) .................................... - (195,271)
Distributions to shareholders from net realized gains from
security transactions ......................................... - (9,702)
Increase (decrease) in net assets from
capital share transactions (Note 3) ........................... 28,337,837 (5,982,120)
------------ ------------
Net increase (decrease) in net assets ..................... 65,652,294 (23,036,736)
Net Assets
Beginning of period ............................................. 265,544,453 288,581,189
------------ ------------
End of period (including undistributed net investment income of
$223,970 and distributions in excess of net investment
income of $420,121, respectively) ............................. $331,196,747 $265,544,453
============ ============
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
10
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995
1. Significant Accounting Policies
Lexington Worldwide Emerging Markets Fund, Inc. (the "Fund") is an open-end
diversified management investment company registered under the Investment
Company Act of 1940, as amended. The Fund's investment objective is to seek
long-term growth of capital primarily through investment in equity securities
domiciled in, or doing business in, emerging countries and emerging markets. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements:
Investments Security transactions are accounted for on a trade date basis.
Realized gains and losses from investment transactions are reported on the
identified cost basis. Securities traded on a recognized stock exchange are
valued at the last sales price reported by the exchange on which the securities
are traded. If no sales price is recorded, the mean between the last bid and
asked prices is used. Securities traded on the over-the-counter market are
valued at the mean between the last current bid and asked price. Short-term
securities having a maturity of 60 days or less are stated at amortized cost,
which approximates market value. Securities for which market quotations are not
readily available and other assets are valued by Fund management in good faith
under the direction of the Fund's Board of Directors. All investments quoted in
foreign currencies are valued in U.S. dollars on the basis of the foreign
currency exchange rates prevailing at the close of business. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income, adjusted for amortization of premiums and accretion of discounts, is
accrued as earned.
Foreign Currency Transactions Foreign currencies (and receivables and
payables denominated in foreign currencies) are translated into U.S. dollar
amounts at current exchange rates. Translation gains or losses resulting from
changes in exchange rates and realized gains and losses on the settlement of
foreign currency transactions are reported in the statement of operations. In
addition, the Fund may enter into forward foreign exchange contracts in order to
hedge against foreign currency risk in the purchase or sale of securities
denominated in foreign currency. The Fund may also enter into such contracts to
hedge against changes in foreign currency exchange rates on portfolio positions.
These contracts are marked to market daily, by recognizing the difference
between the contract exchange rate and the current market rate as unrealized
gains or losses. Realized gains or losses are recognized when contracts are
closed and are reported in the statement of operations.
Federal Income Taxes It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to "regulated investment companies" and
to distribute all of its taxable income to its shareholders. Therefore, no
provision for Federal income taxes is required.
Distributions The character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. At December 31, 1995 reclassifications
were made to the Fund's capital accounts to reflect permanent book/tax
differences and income and gains available for distributions under income tax
regulations. Net investment income, net realized gains and net assets were not
affected by this change.
11
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995 (continued)
2. Investment Advisory Fee and Other Transactions with Affiliate
The Fund pays an investment advisory fee to Lexington Management Corporation
("LMC") at an annual rate of 1.00% of the Fund's average daily net assets. The
investment advisory contract provides that the total annual expenses of the Fund
(including management fees, but excluding interest, taxes, brokerage commission
and extraordinary expenses) will not exceed the level of expenses which the Fund
is permitted to bear under the most restrictive expense limitation imposed by
any state in which shares of the Fund are offered for sale. No reimbursement was
required for the six months ended June 30, 1996.
The Fund also reimbursed LMC for certain expenses, including accounting and
shareholder servicing costs of $270,270 which are incurred by the Fund, but paid
by LMC.
3. Capital Stock
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Six months ended
June 30, 1996 Year ended
(unaudited) December 31, 1995
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold .................................... 17,199,267 $202,978,974 22,479,065 $242,654,550
Shares issued to shareholders on reinvestment
of dividends ................................... - - 183,411 1,963,204
---------- ------------ ---------- ------------
17,199,267 202,978,974 22,662,476 244,617,754
Shares redeemed ................................ (14,720,081) (174,641,137) (23,001,849) (250,599,874)
---------- ------------ ---------- ------------
Net increase (decrease) ...................... 2,479,186 $ 28,337,837 (339,373) $ (5,982,120)
========== ============ ========== ============
</TABLE>
4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales of securities for the six months
ended June 30, 1996, excluding short-term securities, were $132,714,210 and
$130,317,315, respectively.
At June 30, 1996 aggregate gross unrealized appreciation for all securities and
foreign currency holdings (including foreign currency receivables and payables)
in which there is an excess of value over tax cost amounted to $49,768,968 and
aggregate gross unrealized depreciation for all securities in which there is an
excess of tax cost over value amounted to $27,863,460.
5. Investment and Concentration Risks
The Fund's investments in foreign securities may involve risks not present in
domestic investments. Since foreign securities may be denominated in a foreign
currency and involve settlement and pay interest or dividends in foreign
currencies, changes in the relationship of these foreign currencies to the U.S.
dollar can significantly affect the value of the investments and earnings of the
Fund. Foreign investments may also subject the Fund to foreign government
exchange restrictions, expropriation, taxation or other political, social or
economic developments, all of which could affect the market and/or credit risk
of the investments.
In addition to the risks described above, risks may arise from forward foreign
currency contracts as a result of the potential inability of counterparties to
meet the terms of their contracts.
12
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995 (continued)
6. Restricted Securities
The following securities were purchased under Rule 144A of the Securities Act of
1933 and, unless registered under the Act or exempted from registration, may be
sold only to qualified institutional investors.
Acquisition Average Cost Market % of Net
Security Date Per Share Value Assets
- -------- ----------- ------------ ------ --------
Mavesa S.A. (ADR) ....... 2-15-94 $7.21 $552,703 .17%
Total Access
Communication Plc ....... 1-15-96 $7.23 351,900 .11%
-------- ----
$904,603 .28%
-------- ----
Pursuant to guidelines adopted by the Fund's Board of Directors, these
unregistered securities have been deemed to be illiquid. The Fund currently
limits investment in illiquid securities to 15% of the Fund's net assets, at
market value, at the time of purchase, but, pursuant to state regulations, the
Fund's investment in such securities is effectively limited to 10%.
13
<PAGE>
Lexington Worldwide Emerging Markets Fund, Inc.
Financial Highlights
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
Six months
ended
June 30, 1996 Year ended December 31,
----------------------------------------
(unaudited) 1995 1994 1993 1992
--------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $10.70 $11.47 $13.96 $ 8.66 $ 9.03
------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income (loss) ............................. .03 .08 (.01) .05 .07
Net realized and unrealized gain
(loss) on investments and foreign currency
transactions .......................................... 1.40 (.76) (1.92) 5.43 .27
------ ------ ------ ------ ------
Total income (loss) from investment operations ........... 1.43 (.68) (1.93) 5.48 .34
------ ------ ------ ------- ------
Less distributions:
Dividends from net investment income ..................... - (.08) - (.01) (.11)
Distributions in excess of net investment income
(temporary book-tax difference) ....................... - (.01) - - -
Distributions from capital gains ......................... - - (.47) (.17) (.60)
Distributions in excess of capital gains (temporary
book-tax difference) .................................. - - (.09) - -
------ ------ ------ ------ ------
Total distributions ...................................... - (.09) (.56) (.18) (.71)
------ ------ ------ ------ ------
Net asset value, end of period ........................... $12.13 $10.70 $11.47 $13.96 $ 8.66
====== ====== ====== ====== ======
Total return ............................................. 28.77%* (5.93%) (13.81%) 63.37% 3.77%
Ratio to average net assets:
Expenses ............................................... 1.77%* 1.88% 1.65% 1.64% 1.89%
Net investment income .................................. .38%* .70% (.06%) .21% .75%
Portfolio turnover ....................................... 82.76%* 92.85% 79.56% 38.35% 91.27%
Average commission paid on equity security
transactions** ........................................ - - - - -
Net assets at end of period (000's omitted) .............. $331,197 $265,544 $288,581 $230,473 $30,021
<FN>
- -----------
**Annualized **The average commission paid on equity security transactions for
the six months ended June 30, 1996 is less than $0.005 per share of securities
purchased and sold. In accordance with recent SEC disclosure guidelines, average
commissions are calculated for the current period and not for prior periods.
</FN>
</TABLE>
14
<PAGE>
Right Column
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 Troika Dialog Russia Fund, Inc.-Seeks long term capital appreciation
through investments primarily in equity securities of Russian companies.
Lexington Global Fund, Inc.-Seeks long-term growth of capital primarily through
investment in common stocks of companies domiciled in foreign countries and the
United States.
Lexington International Fund, Inc.-Seeks long-term growth of capital through
investment in companies domiciled in foreign countries.
Lexington Crosby Small Cap Asia Growth Fund, Inc.-Seeks long-term capital
appreciation through investment in companies domiciled in the Asia Region with a
market capitalization of less than $1 billion.
Lexington Ramirez Global Income Fund-Seeks high current income. Capital
appreciation is a secondary objective. The Fund invests in a combination of
foreign and domestic high-yield, lower rated debt securities.
Lexington Goldfund, Inc.-Seeks capital appreciation through investment in gold
bullion and shares of gold mining companies.
Lexington Growth and Income Fund, Inc.-Seeks capital appreciation over the
long-term through investments in the stocks of large, ably managed and well
financed companies.
Lexington Corporate Leaders Trust Fund-Seeks capital growth and reasonable
income through investment in an equal number of shares of an established list of
American blue chip corporations.
Lexington SmallCap Value Fund, Inc.-Seeks long-term capital appreciation through
investment in common stocks of companies domiciled in the United States with a
market capitalization of less than $1 billion.
Lexington Convertible Securities Fund-Seeks total return by providing capital
appreciation, current income and conservation of capital through investments in
a diversified portfolio of securities convertible into shares of common stock.
Lexington GNMA Income Fund, Inc.-Seeks to achieve a high level of current
income, consistent with liquidity and safety of principal, through investment
primarily in mortgage-backed GNMA ("Ginnie Mae") certificates that are
guaranteed as to the timely payment of principal and interest by the United
States Government.
Lexington Money Market Trust-Seeks a high level of current income consistent
with preservation of capital and liquidity through investments in interest
bearing short-term money market instruments.
Lexington Tax Free Money Fund, Inc.-Seeks current income exempt from Federal
income taxes while maintaining stability of principal, liquidity and
preservation of capital.
Left Column
LEXINGTON
INVESTOR SERVICES
- --------------------------------------------------------------------------------
As a Lexington shareholder, you should be aware of the many services available
to you.
-------------
No Load-The Lexington Funds are no load funds. That is, investments and
redemptions are made without any sales charges, commissions or redemption fees.
-------------
Free Telephone Exchange-Investments in the Lexington Funds may be exchanged for
shares of a different Lexington Fund at any time.
-------------
Check Writing Privileges-Lexington Money Market Trust and Lexington Tax Free
Money Fund permit investors immediate access to their funds with check writing
for withdrawals from their account.
-------------
Tax Sheltered Plans-IRA, Keogh, Pension, and Profit Sharing Prototype Plans are
available to qualified individuals. These plans offer investment flexibility
through the Share Exchange Service, simplified record keeping, convenience and
investment supervision.
-------------
Custodial Accounts for Minors-Investments may be made on behalf of minors under
the Uniform Gifts to Minors Act currently in effect in all states.
-------------
Systematic Withdrawal Plan-An investor may elect to receive a fixed amount from
his or her account each month or quarter, subject to certain minimums.
-------------
Complete Record Keeping-A statement is provided for every transaction in
addition to a year-end statement with tax information.
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.
15
<PAGE>
Left Column
Lexington
Worldwide Emerging Markets Fund, Inc.
Investment Adviser
- -----------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Distributor
- -----------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
- ----------------------------------------
All shareholder requests for services
of any kind should be sent to:
Transfer Agent
- ----------------------------------------
STATE STREET BANK AND
TRUST COMPANY
c/o National Financial Data Services
1004 Baltimore
Kansas City, Missouri 64105
Or call toll free:
Service and Sales: 1-800-526-0056
24 Hour Account Information:
1-800-526-0052
- ----------------------------------------
-----------------------------------------------------
(800) 526-0052
"LEXLINE"
24 hour toll-free telephone access to your
Lexington Fund account
Price/Yield * Account Balances * Exchanges *
Last Transactions * Total Return * Duplicate Statements
-------------------------------------------------------
This report has been prepared for the information of the shareholders of
Lexington Worldwide Emerging Markets Fund, Inc. and is authorized for
distribution to the public only if it is accompanied or preceded by a currently
effective prospectus which sets forth expenses and other material information.
Right Column
-----------
LEXINGTON
-----------
----------------------------------
LEXINGTON
WORLDWIDE
EMERGING
MARKETS
FUND, INC.
(filled box)
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.
(filled box)
SEMI-ANNUAL REPORT
JUNE 30, 1996
The Lexington Group
of No Load
Investment Companies
----------------------------------
