DEAR SHAREHOLDERS:
- --------------------------------------------------------------------------------
The Lexington Worldwide Emerging Markets Fund appreciated 6.4%* during the
second quarter and 14.2%* for the six month period through June. According to
Lipper Analytical Services, Inc. the average emerging markets fund advanced
10.5% for the quarter and 21.0% for the first half of the year. The unmanaged
Morgan Stanley Emerging Market Free Index** posted gains of 8.6% for the quarter
and 17.7% during the first half.
Most emerging markets have been strong performers in 1997 with the
exception of Southeast Asia. Russia has been the best of the best with a first
half gain of 117.8%. The Latin American region provided the best regional
returns, advancing 40.8% through June. Brazil, with a gain of 54.1%, was the
strongest performer in the Latin region. Thailand was the worst market with a
loss of 35.7%. The Philippines and Malaysia each lost over 11% during the first
half. Despite relatively large positions in Russia and Greece, the Fund
underperformed its peers due to several factors. Asian holdings in Malaysia,
Singapore, and the Philippines hurt performance in the second quarter as
concerns over the banking and property sectors led to rising interest rates and
falling stock prices. Positions in these markets were greatly reduced but
performance did suffer. Although only slightly underweight in Latin America, the
Fund's holdings were too defensive for the region which was, and is,
experiencing an economic recovery. There were positive results as well. Russian
stocks in the Fund provided big returns as did Greek equities. Greek stocks
advanced 44% during the first half as interest rates continued to fall with
inflation. Greek equities had performed poorly in 1996 and offered excellent
value heading into 1997.
The current environment remains positive for emerging market equities with
Southeast Asia being the primary exception. Latin American equities have been
among the star performers in 1997. A combination of rising economic activity,
falling inflation and interest rates, plus economic reform has propelled
equities to sharp gains. Brazilian equities rose 54.1% during the first half.
The largest companies such as Telebras enjoyed the strongest gains as investors
bet on further economic reform in utilities. Mexican stocks lagged Brazil but
still gained 30.0%. A stronger than expected economic recovery, attractive
valuation levels, and falling interest rates were the main contributors to the
market. The outlook for the region remains positive although the sharp
outperformance of Brazil dictates that better opportunities lie in Mexico and
perhaps Argentina. While Latin stocks have advanced sharply, many Asian equities
have continued to decline. Years of heavy capital inflows and currencies tied to
the U.S. dollar have led to excesses in property, banks, and the industrial
sector. Thailand has the greatest problems in the region. The Thai market
declined 35.7% during the first half of 1997. A recent devaluation of the Thai
Baht has left the corporate sector in a precarious state as Thai companies had
borrowed $80 billion in foreign loans. The cost of these loans has now risen as
a result of the devaluation. Economic pain and adjustment will take some time to
work through the economies of these countries. The short term outlook will
likely see continued high interest rates and weak currencies, ultimately, as
investors become even more negative. Opportunities will increase in this region
if one takes a 2-3 year view.
The Lexington Worldwide Emerging Markets Fund is overweight in Latin
America. Mexico, with a 13% weighting is the largest holding. We expect strong
profit momentum and continued falls in inflation. Brazilian equities have
1
<PAGE>
performed exceptionally well and as a result we are taking some profits. Chilean
holdings should continue to benefit as that economy slows and interest rates
fall. Holdings in Asia, outside of Hong Kong and China remain very low. As
Southeast Asia continues to fall we have increased our focus on this region as
we expect good value to emerge. Hong Kong stocks with a heavy concentration of
Chinese business continue to perform well and valuations are still attractive.
Elsewhere, the Fund has over 6% in Russian equities which have risen well over
100%. Russia is being further integrated into the investment community. The
Russian market is currently being fueled by a flood of western cash and hopes
that President Yeltsin's reformed minded government can succeed. Volatility in
Russia is very high; however, the long term outlook does offer substantial
upside even from current levels. Finally, Greek equities have been reduced to 3%
of the Fund as a first half rise of 44.0% has made Greek stocks less attractive.
Sincerely,
/s/Richard T. Saler /s/Robert M. DeMichele
-------------------- ----------------------
Richard T. Saler Robert M. DeMichele
Portfolio Manager President
August, 1997 August, 1997
*8.16%, 9.98% and 7.16% are the one, five and ten year average annual standard
total returns, respectively, for the period ended June 30, 1997. Prior to
June 1991, the Fund operated under a different name and investment objective.
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 and is not predictive
of future results.
**All country and regional returns are from the corresponding Morgan Stanley
Capital International Indicies. Returns are dollar based with net dividends
reinvested.
2
<PAGE>
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1997 (unaudited)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
COMMON STOCKS: 98.4%
ARGENTINA: 5.2%
110,800 Banco Frances del Rio de la Plata S.A.2 ....... $ 3,601,000
687,310 Perez Companc S.A. ............................ 5,519,764
112,600 Telefonica de Argentina S. A. (ADR) ........... 3,898,775
-----------
13,019,539
-----------
BRAZIL: 12.2%
284,700 Aracruz Celulose S.A. (ADR) ................... 5,800,763
6,340,000 Banco Itau S.A. (Preferred shares) ............ 3,621,854
46,610,000 CESP--Companhia Energetica de Sao Paulo
(Preferred shares)2 ......................... 3,117,297
6,790,000 Cia Tecidos Norte De Mina (Preferred shares) .. 2,649,023
3,690,000 Companhia Cervejaria Brahma (Preferred shares) 2,827,788
6,270,000 Light--Servicos de Electricidade S.A. ......... 3,028,569
9,693,000 Petroleo Brasileiro S.A. (Preferred shares) ... 2,656,115
298,500 Riograndense Telecom (Preferred shares)2 ...... 451,958
10,631 Riograndense Telecom (Rights)2 ................ 2,434
21,110,000 Telecomunicacoes Brasileiras S.A. ............. 3,206,067
10,480,000 Telecomunicacoes de Sa Paulo S.A. ............. 3,407,187
-----------
30,769,055
-----------
CHILE: 7.6%
581,200 Antofagasta Holdings Plc ...................... 4,435,030
268,400 Banco Santander (ADR) ......................... 3,958,900
151,700 Empresa Nacional Electricidad S.A. (ADR) ...... 3,422,731
129,200 Enersis S.A. .................................. 4,594,675
173,800 Maderas y Sinteticos Sociedad Anonima S.A. (ADR) 2,889,425
----------
19,300,761
----------
COLOMBIA: 1.0%
95,600 Banco Ganadero S.A. (ADR) ..................... 2,497,550
----------
CZECH REPUBLIC: 1.0%
24,780 SPT Telekon AS2 ............................... 2,600,207
----------
3
<PAGE>
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1997 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
GREECE: 2.9%
160,100 Delta Dairy S.A. (Preferred shares) ............ $ 1,394,101
113,000 Hellenic Tellecommunication Organization S.A. .. 2,655,481
12,126 Hellenic Tellecommunication Organization S.A.
(Rights)2 .................................... 19,881
277,200 Michaniki S.A. ................................. 2,100,688
23,400 Titan Cement Company ........................... 1,155,208
-----------
7,325,359
-----------
HONG KONG: 7.2%
4,492,800 Founder Hong Kong, Ltd. ........................ 3,044,578
5,432,000 Glorious Sun Enterprises ....................... 2,576,723
3,396,000 JCG Holdings, Ltd. ............................. 2,739,671
900,000 Jiangsu Expressway Company, Ltd.1,2 ............ 319,467
4,120,000 Moulin International Holding, .................. 3,004,667
52,900 Nu Skin Asia Pacific, Inc.2 .................... 1,401,850
5,150,000 Qingling Motors Company ........................ 2,658,997
10,385,000 Tingyi (Cayman Islands) Holding Company ........ 2,587,108
----------
18,333,061
----------
HUNGARY: 1.0%
62,500 Zalakeramia Rt. ................................ 2,421,121
----------
INDIA: 6.9%
175,400 Hindalco Industries, Ltd. ...................... 4,791,649
452,200 Hindustan Petroleum Corporation, Ltd.2 ......... 5,734,598
342,400 Videsh Sanchar Nigam, Ltd.1,2 .................. 7,104,800
----------
17,631,047
----------
INDONESIA: 5.3%
1,745,000 PT Fiskar Agung Perkasa2 ....................... 2,816,831
2,412,000 PT Ramayana Lestari Sentosa2 ................... 6,943,861
2,375,000 PT Tambang Timah ............................... 3,687,281
----------
13,447,973
----------
ISRAEL: 1.4%
54,300 Teva Pharmaceutical Industries, Ltd. (ADR) ..... 3,519,319
----------
4
<PAGE>
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1997 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
MALAYSIA: 3.8%
445,200 Hong Leong Credit Bhd .............................. $1,658,032
37,100 Hong Leong Credit Bhd (Rights)2 .................... 36,747
1,628,000 Magnum Corporation Bhd ............................. 2,451,026
300,000 Sungei Way Holdings Bhd ............................ 565,768
1,451,000 Tanjong Plc2 ....................................... 5,001,458
----------
9,713,031
----------
MEXICO: 10.7%
686,300 Cemex S.A. de C.V. "B"2 ............................ 3,338,960
1,805,000 Cifra S.A. de C.V .................................. 2,881,822
142,600 Grupo Casa Autrey, S.A. de C.V. (ADR) .............. 2,896,563
1,890,400 Grupo Financiero Banamex2 .......................... 4,848,084
111,000 Grupo Imsa S.A. de C.V ............................. 2,997,000
2,908,900 Grupo Industrial Maseco S.A. de C.V ................ 3,174,204
71,500 Grupo Televisa S.A. (ADR)2 ......................... 2,171,813
64,500 Telefonos de Mexico S.A ............................ 3,079,875
168,900 Vitro Sociedad Anonima (ADR) ....................... 1,900,125
----------
27,288,446
----------
PAKISTAN: 0.6%
313,700 Pakistan Investment Fund2 .......................... 1,646,925
----------
PERU: 1.0%
99,700 Telefonica del Peru S.A. (ADR) ..................... 2,610,894
----------
PHILIPPINES: 4.2%
7,819,000 C & P Homes, Inc. .................................. 2,934,792
7,851,000 Fortune Cement Corporation ......................... 1,905,004
2,834,425 International Container Terminal Service, Inc.2 .... 1,450,740
535,270 Manila Electric Company "B" ........................ 2,638,196
4,867,000 Universal Robina Corporation ....................... 1,771,428
----------
10,700,160
----------
5
<PAGE>
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1997 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
POLAND: 3.4%
89,164 Debica S.A ....................................... $1,831,442
385,480 Elektrim Towarzystwo Handlowe S.A ................ 3,354,809
359,100 Polifarb Cieszyn Wroclaw S.A.2 ................... 1,824,869
170,200 Stomil Olsztyn S.A.2 ............................. 1,631,436
----------
8,642,556
----------
PORTUGAL: 1.1%
72,100 Portugal Telecom S.A ............................. 2,912,054
----------
RUSSIA: 6.8%
262,100 LUKoil Holdings of Russia2 ....................... 5,145,023
1,292,800 Rostelekom2 ...................................... 5,016,064
19,869,000 Unified Energy System2 ........................... 7,152,840
----------
17,313,927
----------
SINGAPORE: 3.3%
821,000 Jardine Strategic Holdings, Ltd. ................. 3,103,380
41,050 Jardine Strategic Holdings, Ltd. (Warrants)2 ..... 1,847
1,623,600 Want Want Holdings2 .............................. 5,390,352
----------
8,495,579
----------
SOUTH AFRICA: 1.4%
128,700 Liberty Life Association of Africa, Ltd. ......... 3,490,997
----------
SOUTH KOREA: 1.1%
30,700 Samsung Electronics Company....................... 2,437,329
448 Samsung Electronics Company (Rights)2 ............ 12,108
4,920 Suheung Capsule2 ................................. 318,027
----------
2,767,464
----------
TAIWAN: 3.0%
306,125 Taiwan Fund, Inc. ................................ 7,729,656
----------
THAILAND: 1.2%
268,000 BEC World Public Company ......................... 2,296,699
310,000 Matichon Public Company, Ltd. .................... 718,008
----------
3,014,707
----------
6
<PAGE>
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1997 (unaudited) (continued)
Number of
Shares or Value
Principal Amount Security (Note 1)
- --------------------------------------------------------------------------------
TURKEY: 3.4%
32,376,871 Akbank T.A.S ..................................... $ 2,784,411
23,196,000 Arcelik A.S ...................................... 3,131,460
5,533,000 Eregli Demir Ve Celik Fabrikalari T.A.S .......... 924,011
1,969,000 Petkim Petrokimya Holding ........................ 677,336
6,519,442 Petrol Ofisi A.S ................................. 1,232,175
------------
8,749,393
------------
VENEZUELA: 1.7%
102,300 Compania Anonima Nacional
Telefonos de Venezuela (ADR)2 ................. 4,411,688
------------
TOTAL COMMON STOCKS (cost $224,156,096) .......... 250,352,469
------------
SHORT-TERM INVESTMENTS: 0.3%
$ 900,000 U.S. Treasury Bills 5.16%, Due 12/11/97
(cost $878,888) ................................. 878,922
-----------
TOTAL INVESTMENTS: 98.7%
(cost $225,034,984+) (Note 1) .................. 251,231,391
Other assets in excess of liabilities: 1.3% ...... 3,366,391
-----------
TOTAL NET ASSETS: 100.0% (equivalent to $13.12
per share on 19,409,472 shares outstanding) .... $254,597,782
============
1Restricted Securities (Note 6).
2Non-income producing securities.
ADR--American Depository Receipt.
+Aggregate cost for Federal income tax purposes is $225,036,258.
--------------------------------
At June 30, 1997, the composition of the Fund's net assets by industry
concentration was as follows:
Banking .................................................... 9.4%
Capital Equipment .......................................... 1.2
Construction and Housing ................................... 2.0
Consumer (Durables) ........................................ 4.8
Consumer (Non-Durables) .................................... 7.8
Electrical and Electronics ................................. 1.0
Energy Sources ............................................. 8.7
Financial Services ......................................... 3.1
Health & Personal Care ..................................... 3.2
Materials .................................................. 14.8
Merchandising .............................................. 4.9
Multi-Industry ............................................. 8.8
Services ................................................... 5.1
Telecommunications ......................................... 15.2
Trade ...................................................... 1.3
Transportation ............................................. 0.1
U.S. Government Obligations ................................ 0.3
Utilities .................................................. 7.0
Other Assets ............................................... 1.3
-----
Total Net Assets ........................................... 100.0%
=====
7
<PAGE>
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (unaudited)
ASSETS
Investments at value (cost $225,034,984) (Note 1) .............. $251,231,391
Cash ........................................................... 242,280
Receivable for investment securities sold ...................... 5,307,112
Receivable for shares sold ..................................... 645,259
Dividends and interest receivable .............................. 689,445
Foreign taxes recoverable ...................................... 24,038
------------
Total Assets .............................................. 258,139,525
------------
LIABILITIES
Due to Lexington Management Corporation (Note 2) ............... 223,255
Payable for shares redeemed .................................... 2,858,055
Accrued expenses ................................. ............. 460,433
------------
Total Liabilities ......................................... 3,541,743
------------
NET ASSETS (equivalent to $13.12 per share
on 19,409,472 shares outstanding) (Note 3) ................... $254,597,782
============
NET ASSETS consist of:
Capital stock--authorized 100,000,000 shares,
$1.00 par value per share .................................. $ 19,409,472
Additional paid-in capital (Note 1) ............................ 217,682,431
Undistributed net investment income (Note 1) ................... 903,673
Accumulated net realized loss on investments
and foreign currency transactions (Note 1) ..................... (9,604,890)
Net unrealized appreciation of investments
and foreign currency transactions .............................. 26,207,096
------------
$254,597,782
============
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, 1997 (unaudited)
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C> <C>
Dividends ................................................. $ 3,181,900
Interest .................................................. 537,634
------------
3,719,534
Less: Foreign tax expense ................................. 306,175
------------
Total investment income ............................. $ 3,413,359
Expenses
Investment advisory fee (Note 2) .................... 1,378,197
Transfer agent and shareholder
services expense (Note 2) ...................... 419,749
Custodian fees ...................................... 332,256
Accounting expenses (Note 2) ........................ 112,053
Printing and mailing expenses ....................... 83,058
Registration fees ................................... 29,684
Professional fees ................................... 27,459
Computer processing fees ............................ 8,516
Directors' fees and expenses ........................ 7,774
Other expenses ...................................... 54,198
------------
Total expenses ................................. 2,452,944
------------
Net investment income ..................... 960,415
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 4)
Net realized gain (loss) on:
Investments .................................... 17,868,337
Foreign currency transactions .................. (147,761)
------------
Net realized gain ......................................... 17,720,576
Net change in unrealized appreciation (depreciation) on:
Investments .................................... 16,625,432
Foreign currency translation of
other assets and liabilities ............... 14,833
------------
Net change in unrealized appreciation ..... 16,640,265
------------
Net realized and unrealized gain .......... 34,360,841
------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .......... $ 35,321,256
============
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
9
<PAGE>
LEXINGTON WORLDWIDE EMERGING MARKET FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six months
ended Year ended
June 30, 1997 December 31,
(unaudited) 1996
----------- -----------
<S> <C> <C>
Net investment income (loss) ............................................. $ 960,415 $ (18,395)
Net realized gain on investments and
foreign currency transactions .......................................... 17,720,576 7,337,532
Net change in unrealized appreciation on
investments and foreign currency transactions ....................... 16,640,265 12,557,378
----------- -----------
Increase in net assets resulting from operations .................. 35,321,256 19,876,515
Decrease in net assets from capital share transactions (Note 3) .......... (35,396,280) (30,748,162)
----------- -----------
Net decrease in net assets ................................ (75,024) (10,871,647)
NET ASSETS
Beginning of period ...................................................... 254,672,806 265,544,453
----------- -----------
End of period (including undistributed net investment income of
$903,673 and distributions in excess of net investment
income of $56,742, respectively) .................................... $254,597,782 $254,672,806
============ ============
</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, 1997 (unaudited) and December 31, 1996
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 Dividends from net investment income and net realized capital
gains are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. 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, 1996,
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, 1997 (unaudited)
and December 31, 1996 (continued)
USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
2. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATE
The 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. For 1997, LMC has agreeed to voluntarily limit the total expenses of the
fund (including management fees, but excluding interest, taxes, brokerage
commission and extraordinary expenses) to an annual rate of 2.50% of the Fund's
average daily net assets. No reimbursement was required for the six months ended
June 30, 1997.
The Fund reimbursed LMC for certain expenses, including accounting and
shareholder servicing costs of $238,965 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, 1997 Year ended
(unaudited) December 31, 1996
------------------------- -------------------------
Shares Amount Shares Amount
------------ ---------- --------- ------------
<S> <C> <C> <C> <C>
Shares sold ........................ 8,666,819 $108,327,707 22,719,087 $266,562,359
Shares redeemed .................... (11,418,582) (143,723,987) (25,383,903) (297,310,521)
--------- ----------- --------- -----------
Net decrease ..................... (2,751,763) $(35,396,280) (2,664,816) $(30,748,162)
========= =========== ========= ===========
</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, 1997, excluding short-term securities, were $176,564,761 and
$215,195,135, respectively.
At June 30, 1997 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
$39,421,716 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $13,214,620.
12
<PAGE>
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (unaudited) and December 31, 1996 (continued)
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.
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.
<TABLE>
<CAPTION>
Acquisition Average Cost Market % of Net
Security Date Shares Per Share Value Assets
- ------- --------- -------- ---------- ------ -------
<S> <C> <C> <C> <C> <C>
Jiangsu Expressway
Company, Ltd. ...................... 6/24/97 900,000 $ 0.41 $ 319,467 0.13%
VideshSanchar Nigam, Ltd. ............ 3/24/97 342,400 $17.09 7,104,800 2.79%
--------- -----
$7,424,267 2.92%
========= =====
</TABLE>
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.
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, 1997 Year ended December 31,
------------------------------------------
(unaudited) 1996 1995 1994 1993
---------- ---- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.49 $10.70 $11.47 $13.96 $ 8.66
------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment income (loss) ........................ 0.05 -- 0.08 (0.01) 0.05
Net realized and unrealized gain
(loss) on investments and foreign currency
transactions ...................................... 1.58 0.79 (0.76) (1.92) 5.43
------ ------ ------ ------ ------
Total income (loss) from investment operations ........ 1.63 0.79 (0.68) (1.93) 5.48
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income ................ -- -- (0.08) -- (0.01)
Distributions in excess of net investment income
(temporary book-tax difference) ................... -- -- (0.01) -- --
Distributions from net realized gains ............... -- -- -- (0.47) (0.17)
Distributions in excess of net realized gains
(temporary book-tax difference) ................... -- -- -- (0.09) --
------ ------ ------ ------ ------
Total distributions ................................... -- -- (0.09) (0.56) (0.18)
------ ------ ------ ------ ------
Net asset value, end of period ........................ $13.12 $11.49 $10.70 $11.47 $13.96
====== ====== ====== ====== ======
Total return .......................................... 30.67%* 7.38% (5.93%) (13.81%) 63.37%
Ratio to average net assets:
Expenses ............................................ 1.78%* 1.76% 1.88% 1.65% 1.64%
Net investment income (loss) ........................ 0.70%* (0.01%) .70% (0.06%) 0.21%
Portfolio turnover rate ............................... 139.44%* 86.26% 92.85% 79.56% 38.35%
Average commission paid on equity
security transactions** ............................ -- -- -- -- --
Net assets at end of period
(000's omitted) .................................... $254,598 $254,673 $265,544 $288,581 $230,473
</TABLE>
- --------------
* Annualized
** The average commission paid on equity security transactions for the six
months ended June 30, 1997 and the year ended December 31, 1996 is less than
$0.005 per share of securities purchased and sold. In accordance with SEC
disclosure guidelines, average commissions are calculated beginning with the
year ended December 31, 1996, but not for prior periods.
14
<PAGE>
LEXINGTON INVESTOR SERVICES
- --------------------------------------------------------------------------------
AS A LEXINGTON SHAREHOLDER, YOU SHOULD BE AWARE OF THE MANY SERVICES AVAILABLE
TO YOU.
NO LOAD--The Lexington Funds are no load funds. That is, investments and
redemptions are made without any sales charges, commissions or redemption fees.
----------------
FREE TELEPHONE EXCHANGE--Investments in the Lexington Funds may be exchanged for
shares of a different Lexington Fund at any time.
----------------
CHECK WRITING PRIVILEGES--Lexington Money Market Trust permits investors
immediate access to their funds with check writing for withdrawals from their
account.
----------------
TAX SHELTERED PLANS--IRA, Keogh, Pension, and Profit Sharing Prototype Plans are
available to qualified individuals. These plans offer investment flexibility
through the Share Exchange Service, simplified record keeping, convenience and
investment supervision.
----------------
CUSTODIAL ACCOUNTS FOR MINORS--Investments may be made on behalf of minors under
the Uniform Gifts to Minors Act currently in effect in all states.
----------------
SYSTEMATIC WITHDRAWAL PLAN--An investor may elect to receive a fixed amount from
his or her account each month or quarter, subject to certain minimums.
----------------
COMPLETE RECORD KEEPING--A statement is provided for every transaction in
addition to a year-end statement with tax information.
THE LEXINGTON GROUP OF
NO LOAD INVESTMENT COMPANIES
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.--Seeks long-term growth of
capital primarily through investment in equity securities of companies domiciled
in, or doing business in, emerging countries and emerging markets.
LEXINGTON GLOBAL FUND, INC.--Seeks long-term growth of capital primarily through
investment in common stocks of companies domiciled in foreign countries and the
United States.
LEXINGTON INTERNATIONAL FUND, INC.--Seeks long-term growth of capital through
investment in companies domiciled in foreign countries.
LEXINGTON TROIKA DIALOG RUSSIA FUND, INC.--Seeks long-term capital appreciation
through investments primarily in the equity securities of Russian companies.
LEXINGTON CROSBY SMALL CAP ASIA GROWTH FUND, INC. --Seeks long-term capital
appreciation through investment in companies domiciled in the Asia Region with a
market capitalization of less than $1 billion.
LEXINGTON RAMIREZ GLOBAL INCOME FUND--Seeks high current income. Capital
appreciation is a secondary objective. The Fund invests in a combination of
foreign and domestic high-yield, lower rated debt securities.
LEXINGTON GOLDFUND, INC.--Seeks capital appreciation through investment in gold
bullion and shares of gold mining companies.
LEXINGTON GROWTH AND INCOME FUND, INC.--Seeks capital appreciation over the
long-term through investments in the stocks of large, ably managed and well
financed companies.
LEXINGTON CORPORATE LEADERS TRUST FUND--Seeks capital growth and reasonable
income through investment in an equal number of shares of an established list of
American blue chip corporations.
LEXINGTON SMALLCAP VALUE FUND, INC.--Seeks long-term capital appreciation
through investment in common stocks of companies domiciled in the United States
with a market capitalization of less than $1 billion.
LEXINGTON CONVERTIBLE SECURITIES FUND--Seeks total return by providing capital
appreciation, current income and conservation of capital through investments in
a diversified portfolio of securities convertible into shares of common stock.
LEXINGTON GNMA INCOME FUND, INC.--Seeks to achieve a high level of current
income, consistent with liquidity and safety of principal, through investment
primarily in mortgage-backed GNMA ("Ginnie Mae") certificates that are
guaranteed as to the timely payment of principal and interest by the United
States Government.
LEXINGTON MONEY MARKET TRUST--Seeks a high level of current income consistent
with preservation of capital and liquidity through investments in interest
bearing short-term money market instruments.
For more complete information about any of the Lexington Funds and a prospectus
which includes management fee and expenses call the distributor toll-free at
1-800-526-0057. Read the prospectus carefully before you invest or send money.
<PAGE>
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 o Account Balances o Exchanges o
Last Transactions o Total Return o Duplicate Statements
- --------------------------------------------------------------------------------
This report has been prepared for the information of the shareholders of
Lexington 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.
- --------------------------------------------------------------------------------
LEXINGTON
- --------------------------------------------------------------------------------
================================================================================
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.
----------------
SEMI-ANNUAL REPORT
JUNE 30, 1997
The Lexington Group
of NO LOAD
Investment Companies
================================================================================
