<PAGE>
[GRAPHIC]
Semi-Annual
Report
June 30, 2000
(unaudited)
Pilgrim Mutual Funds
PILGRIM
WORLDWIDE EMERGING
MARKETS FUND, INC.
----------------------------------------------------
Investment Objective: Long-term Capital Appreciation
<PAGE>
Chairman's Message
-------------------------------------------------------------------------------
Dear Shareholders:
Welcome to the Pilgrim Mutual Funds family. We are pleased to present the
Semi-Annual Report for Pilgrim Worldwide Emerging Markets Fund, Inc. (formerly
Lexington Worldwide Emerging Markets Fund, Inc.).
On July 26, 2000, ReliaStar Financial Corp. ("ReliaStar") acquired Lexington
Management Corporation and all of its subsidiaries. In conjunction with the
acquisition, Pilgrim Investments, Inc., a subsidiary of ReliaStar, was
appointed to the role of Investment Adviser to the Fund. As a shareholder in
the Pilgrim family of funds, you now have access to more funds with varying
investment objectives. As a Lexington Fund shareholder 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>
Dear Shareholders:
-------------------------------------------------------------------------------
During the second quarter the Pilgrim Worldwide Emerging Markets Fund, Inc.
(formerly Lexington Worldwide Emerging Markets Fund, Inc.) declined 31.37%,*
underperforming the 10.8%** decline in the unmanaged MSCI Emerging Markets
Free Index. For the year through June 30th, the Fund declined 21.32%* against
a decline of 9.0%** in the MSCI EMF Index. Exposure to the technology sector
explains most of this underperformance. The Fund's relatively heavy weightings
in Korea and India, and underweight positions in Latin America also negatively
affected relative performance.
The market environment changed significantly during the second quarter.
Enthusiasm for tech stocks turned sharply from mid-March, as the gradual
tightening of liquidity by central banks began to take effect. Most emerging
market economies continued to recover, but the correction in the technology,
media and telecommunications (TMT) sector outweighed the positive effects of
economic growth. Rapid re-assessment of risk led to a divergence within the
technology sector between established companies and the more conceptual,
capital-dependent players. Smaller, less liquid stocks fell dramatically,
while companies with financial strength and nearer-term profitability quickly
became the area of focus. Many of these weaker names failed to rally late in
the quarter, where a number of the larger semiconductor and telecom companies
rebounded from their lows.
Most market bond yields are determined by adding a country premium to the US
Treasury yield. Since risk spreads rose sharply early in the year, the
resulting rate rises in emerging markets were particularly burdensome.
Coinciding with the technology correction, this made for a difficult quarter.
Of the larger markets, only China and Israel showed gains, while Taiwan,
Turkey and Greece were down in double-digit percent terms.
Looking forward to the year's second half, the managers believe world GDP
growth will be slowing. While this environment has its risks for emerging
markets generally, a more benign interest rate scenario should benefit Latin
America and other areas that have been out of favor. The managers will seek to
lower the volatility of the Fund by reducing large overweight positions in
Korea and India, and adding to Mexico, Brazil and other markets. Technology
positions will be reduced as well, in seeking greater industry
diversification.
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.
1
<PAGE>
We wish to thank you for your continued support.
Sincerely,
/s/ Richard T. Saler
Richard T. Saler
Portfolio Manager
August, 2000
*34.14%, 1.78%, and 5.00% are the one, five, and ten year average annual
standard total returns, respectively, for the period ended June 30, 2000.
Prior to June 17, 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. Investing in emerging markets, rather
than established markets, has special risks, including currency fluctuations
and political instability. There is no guarantee that the Fund can achieve its
objective.
**All country and regional returns are from the corresponding Morgan Stanley
Capital International Indices. Returns are dollar based with net dividends
reinvested.
2
<PAGE>
Pilgrim Worldwide Emerging Markets Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 2000 (unaudited)
<TABLE>
<CAPTION>
Number of Value
Shares Security (Note 1)
-------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS: 79.3%
Brazil: 6.6%
169,400,000 Centrais Eletricas Brasileiras S.A. ............... $ 3,474,486
100,000 Embratel Participacoes S.A. (ADR).................. 2,362,500
50,000 Tele Norte Leste Participacoes S.A. (ADR).......... 1,181,250
25,000 Telesp Celular Participacoes S.A. (ADR)............ 1,121,875
------------
8,140,111
------------
Greece: 2.4%
74,700 Alpha Bank S.A. ................................... 2,958,934
------------
Hong Kong: 4.3%
24,500,000 China Star Entertainment, Ltd. .................... 1,131,490
7,605,000 Yuxing Infotech Holdings, Ltd. .................... 4,170,781
------------
5,302,271
------------
Hungary: 0.7%
140,000 Uproar, Ltd./1/ ................................... 879,026
------------
India: 10.3%
59,511 BFL Software, Ltd. ................................ 679,491
100 Dsq Software, Ltd. ................................ 2,128
216,600 Fujitsu ICIM/1/ ................................... 1,210,013
125,850 HCL Technologies, Ltd. ............................ 3,629,759
50,000 Satyam Computer Services, Ltd. .................... 3,338,068
1,000 Silverline Industries, Ltd. ....................... 9,733
42,400 Television Eighteen India, Ltd. ................... 576,758
120,000 Videsh Sanchar Nigam, Ltd. ........................ 3,249,890
------------
12,695,840
------------
Indonesia: 0.3%
55,500 PT Telekomunikasi Indonesia (ADR).................. 385,031
------------
Israel: 1.2%
48,500 Orckit Communications, Ltd./1/ .................... 1,455,000
------------
Mexico: 13.9%
739,000 Cemex S.A. de C.V. CPO............................. 3,464,818
171,900 Coca-Cola Femsa S.A.(ADR).......................... 3,244,613
781,000 Grupo Financiero Banamex Accival, S.A. de C.V. O
shares............................................ 3,284,851
15,910 TV Azteca S.A. de C.V. (ADR)/2/ ................... 209,813
254,500 TV Azteca S.A. de C.V. (ADR)....................... 3,356,219
1,557,000 Wal-Mart de Mexico S.A. de C.V. ................... 3,653,969
------------
17,214,283
------------
</TABLE>
<TABLE>
<CAPTION>
Number of Value
Shares Security (Note 1)
--------------------------------------------------------------------------------
<C> <S> <C>
Portugal: 5.3%
1,005,995 ParaRede, SGPS SA Rights............................ $ 6,538,196
------------
Russia: 1.0%
212,500 Moscow Telephone Systems/1/ ........................ 1,275,000
------------
Singapore: 1.9%
90,000 ST Assembly Test Services, Ltd. (ADR)............... 2,323,125
------------
South Africa: 5.0%
500,000 Dimension Data Holdings, Ltd./1/ ................... 4,137,306
671,900 Ixchange Technology Holdings, Ltd./1/ .............. 1,313,123
2,649,000 Metropolis Transactive Holdings, Ltd. .............. 429,793
5,100,000 Paradigm Capital Holdings, Ltd./1/ ................. 285,850
2,085,100 Union Alliance Media, Ltd./1/ ...................... 83,038
------------
6,249,110
------------
South Korea: 11.6%
526,837 C&TEL Company, Ltd. ................................ 1,025,334
40,264 Dreamline Corporation............................... 1,108,626
74,000 Hyundai Electronics Industries Company/1/ .......... 1,460,105
137,000 Korea Electric Power Corporation.................... 4,251,345
55,000 Korea Telecom Corporation (ADR)..................... 2,660,625
67,450 LG Electronics...................................... 1,887,410
16,000 LG Information & Communication, Ltd. ............... 899,741
264,300 Mirae Company....................................... 1,077,360
836 Telson Electronics Company, Ltd. ................... 8,885
18,788 Tongyang Merchant Bank Bond......................... 6,740
------------
14,386,171
------------
Taiwan: 3.1%
269,982 Cosmo Electronics Corporation....................... 674,977
2,855,000 RF-Link System, Inc. ............................... 926,978
754,000 Winbond Electronics Corporation..................... 2,178,837
------------
3,780,792
------------
Thailand: 1.3%
3,493,293 K.R. Precision Public Company, Ltd./1/ ............. 1,647,623
------------
</TABLE>
3
<PAGE>
Pilgrim Worldwide Emerging Markets Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 2000 (unaudited) (continued)
<TABLE>
<CAPTION>
Number of Value
Shares Security (Note 1)
-------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (continued):
Turkey: 8.6%
60,000,000 Akbank T.A.S. ..................................... $ 464,400
16,438,000 Alcatel Teletas Telekomunikasyon Endustri ve
Ticaret A.S. ..................................... 3,579,210
12,000,000 Arcelik A.S. ...................................... 590,280
28,200,000 Beko Elektronik A.S. .............................. 477,708
40,600,000 Dogan Sirketler Grubu Holding A.S. ................ 982,114
192,758,000 Dogan Yayin Holdings............................... 3,265,321
4,000,000 Logo Yazilim....................................... 419,360
7,400,000 Netas Northern Electric Telekomunikasyon A.S. ..... 823,546
------------
10,601,939
------------
United Kingdom: 1.8%
149,000 Flag Telecom Holdings, Ltd. (ADR).................. 2,225,688
------------
TOTAL COMMON STOCKS
(cost $107,502,491)............................... 98,058,140
------------
PREFERRED STOCK: 2.8%
Brazil: 2.8%
401,500,000 Banco Bradesco S.A. (cost $3,110,863).............. 3,494,304
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount Security (Note 1)
-------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS: 13.3%
Other U.S. Government Obligation: 13.3%
$16,400,000 Federal Home Loan Bank (cost $16,394,096).......... $ 16,394,096
------------
TOTAL INVESTMENTS: 95.4%
(cost $127,007,450+) (Note 1)..................... 117,946,540
Other assets in excess of liabilities: 4.6%........ 5,718,171
------------
TOTAL NET ASSETS: 100.0%
(equivalent to $11.88 per share on 10,410,493
shares outstanding)............................... $123,664,711
============
</TABLE>
--------
/1/Non-income producing security.
/2/Restricted security.
ADR--American Depository Receipt.
+ Aggregate cost for Federal income tax purposes is $127,478,622.
At June 30, 2000, the composition of the Fund's net assets by industry
concentration was as follows:
<TABLE>
<S> <C>
Banking................... 8.3%
Computer Software......... 13.9
Consumer Durable.......... 2.0
Consumer Non-durable...... 5.6
Electrical & Electronics.. 9.4
Financial Services........ 0.2
Internet.................. 4.9
Materials................. 2.8
</TABLE>
<TABLE>
<S> <C>
Media.................... 7.0%
Multi-industry........... 0.8
Semiconductor............ 3.1
Services................. 0.8
Telecommunications....... 17.1
Utilities................ 6.2
Other assets............. 17.9
-----
Total Net Assets........ 100.0%
=====
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
4
<PAGE>
Pilgrim Worldwide Emerging Markets Fund, Inc.
Statement of Assets and Liabilities
June 30, 2000 (unaudited)
<TABLE>
<S> <C>
Assets
Investments, at value (cost $127,007,450) (Note 1).............. $117,946,540
Cash............................................................ 85,529
Foreign currency (cost $42,064)................................. 40,383
Receivable for investment securities sold....................... 6,954,497
Receivable for fund shares sold................................. 304,287
Dividends and interest receivable............................... 126,552
Other receivables............................................... 7,267
------------
Total Assets................................................. 125,465,055
------------
Liabilities
Due to Lexington Management Corporation (Note 2)................ 104,869
Payable for investment securities purchased..................... 964,336
Payable for fund shares redeemed................................ 544,533
Accrued expenses................................................ 186,606
------------
Total Liabilities............................................ 1,800,344
------------
Net Assets (equivalent to $11.88 per share on 10,410,493 shares
outstanding) (Note 4).......................................... $123,664,711
============
Net Assets consist of:
Capital stock -- authorized 1,000,000,000 shares, $.001 par
value per share................................................ $ 10,410,493
Additional paid-in-capital...................................... 135,392,289
Accumulated net investment loss................................. (4,735,856)
Accumulated net realized loss on investments and foreign
currency transactions.......................................... (8,336,213)
Unrealized depreciation of investments and foreign currency
translations of other assets and liabilities................... (9,066,002)
------------
Total Net Assets............................................. $123,664,711
============
</TABLE>
Pilgrim Worldwide Emerging Markets Fund, Inc.
Statement of Operations
Six months ended June 30, 2000 (unaudited)
<TABLE>
<S> <C> <C>
Investment Income
Dividends......................................... $ 399,526
Interest.......................................... 132,097
------------
531,623
Less: foreign tax expense......................... 3,585,088
------------
Total investment loss............................. $ (3,053,465)
Expenses
Investment advisory fee (Note 2).................. 831,346
Custodian expenses................................ 197,847
Distribution expenses (Note 3).................... 177,836
Transfer agent and shareholder servicing expenses
(Note 2)......................................... 104,723
Directors' fees and expenses...................... 97,610
Accounting expenses (Note 2)...................... 58,725
Printing and mailing expenses..................... 29,089
Registration fees................................. 12,944
Audit fees........................................ 12,807
Computer processing fees.......................... 10,201
Professional fees................................. 5,681
Other expenses.................................... 24,349
------------
Total expenses.................................... 1,563,158
------------
Net investment loss............................... (4,616,623)
Realized and Unrealized Gain (Loss) on Investments
(Note 5)
Net realized gain (loss) on:
Investments....................................... 28,587,940
Foreign currency transactions..................... (393,513)
------------
Net realized gain............................... 28,194,427
Net change in unrealized depreciation of:
Investments....................................... (51,180,365)
Foreign currency translation of other assets and
liabilities...................................... (5,092)
------------
Net change in unrealized depreciation........... (51,185,457)
------------
Net realized and unrealized loss................ (22,991,030)
------------
Decrease in Net Assets resulting from Operations... $(27,607,653)
============
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
5
<PAGE>
Pilgrim Worldwide Emerging Markets Fund, Inc.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six months ended
June 30, 2000 Year ended
(unaudited) December 31, 1999
---------------- -----------------
<S> <C> <C>
Operations:
Net investment loss........................ $ (4,616,623) $ (519,679)
Net realized gain from investments and
foreign currency transactions............. 28,194,427 8,022,065
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency translation...................... (51,185,457) 60,956,572
------------ ------------
Net increase (decrease) in net assets
resulting from operations............... (27,607,653) 68,458,958
------------ ------------
Distributions to Shareholders: (Note 1)
Distributions to shareholders from net
investment income......................... -- (286,571)
------------ ------------
Capital Share Transactions: (Note 4)
Proceeds from sale of shares............... 184,073,117 99,235,547
Reinvested dividends and distributions..... -- 268,725
Cost of shares repurchased................. (187,794,523) (78,005,927)
------------ ------------
Net increase (decrease) from capital
share transactions...................... (3,721,406) 21,498,345
------------ ------------
Net increase (decrease) in net assets...... (31,329,059) 89,670,732
Net Assets:
Beginning of period........................ 154,993,770 65,323,038
------------ ------------
End of period (including accumulated net
investment loss of $4,735,856 and $119,233
in 2000 and 1999, respectively)........... $123,664,711 $154,993,770
============ ============
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
6
<PAGE>
Pilgrim Worldwide Emerging Markets Fund, Inc.
Notes to Financial Statements
June 30, 2000 (unaudited) and December 31, 1999
1. Significant Accounting Policies
Pilgrim Worldwide Emerging Markets Fund, Inc. (formerly 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 prices.
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.
The Fund authorizes its custodian to place and maintain equity securities in a
segregated account of the Fund having a value equal to the aggregate amount of
the Fund's commitments under forward foreign currency contracts entered into
with respect to position hedges. There are no forward foreign currency
contracts outstanding at June 30, 2000.
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, 1999, reclassifications were made to the Fund's capital accounts to
7
<PAGE>
Pilgrim Worldwide Emerging Markets Fund, Inc.
Notes to Financial Statements
June 30, 2000 (unaudited) and December 31, 1999 (continued)
1. Significant Accounting Policies (continued)
reflect permanent book/tax differences and income and gains available for
distribution under income tax regulations. Net investment income, net realized
gains and net assets were not affected by this change.
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 and
disclosure of contingent 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 paid an investment advisory fee to Lexington Management Corporation
("LMC") at an annual rate of 1.00% of the Fund's average daily net assets. In
connection with providing investment advisory services, LMC had entered into a
sub-advisory contract with Stratos Advisors, Inc. ("Stratos") under which
Stratos provided the Fund with investment management services. Pursuant to the
terms of the sub-advisory contract between LMC and Stratos, LMC paid Stratos a
monthly sub-advisory fee at the annual rate of 0.35% of the Fund's average
daily net assets. Effective June 7, 2000, LMC terminated the sub-advisory
contract with Stratos. For 2000, the adviser has agreed to voluntarily limit
the total expenses of the Fund, (including management fees, but excluding
interest, taxes, brokerage commissions 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, 2000.
The Fund reimbursed LMC for certain expenses, including accounting and
shareholder servicing costs of $120,006 which were incurred by the Fund, but
paid by LMC.
3. Distribution Plan
The Fund had a Distribution Plan (the "Plan") which allowed payments to
finance activities associated with the distribution of the Fund's shares. The
Plan provided that the Fund may pay distribution fees on a reimbursement
basis, including payments to Lexington Funds Distributor, Inc. (LFD), the
Fund's distributor, in amounts not exceeding 0.25% per annum of the Fund's
average daily net assets. Total distribution expenses for the six months ended
June 30, 2000 were $177,836 and are set forth in the statement of operations.
4. Capital Stock
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Six months ended
June 30, 2000 Year ended
(unaudited) December 31, 1999
-------------------------- ------------------------
Shares Amount Shares Amount
----------- ------------- ---------- ------------
<S> <C> <C> <C> <C>
Shares sold............. 11,708,678 $ 184,073,117 9,845,634 $ 99,235,547
Shares issued on
reinvestment of
dividends.............. -- -- 29,543 268,725
----------- ------------- ---------- ------------
11,708,678 184,073,117 9,875,177 99,504,272
Shares redeemed......... (11,559,570) (187,794,523) (8,770,026) (78,005,927)
----------- ------------- ---------- ------------
Net increase
(decrease)............. 149,108 $ (3,721,406) 1,105,151 $ 21,498,345
=========== ============= ========== ============
</TABLE>
8
<PAGE>
Pilgrim Worldwide Emerging Markets Fund, Inc.
Notes to Financial Statements
June 30, 2000 (unaudited) and December 31, 1999 (continued)
5. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales of securities for the six months
ended June 30, 2000, excluding short-term securities, were $253,368,855 and
$255,940,169, respectively.
At June 30, 2000, the aggregate gross unrealized appreciation for all
securities in which there is an excess of value over tax cost amounted to
$17,894,267 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $27,426,349.
6. 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.
7. Restricted Security
The following security was purchased under Rule 144A of the Securities Act of
1933 or issued in private placements and, unless registered under the Act or
exempted from registration, may be sold only to qualified institutional
investors. Pursuant to guidelines adopted by the Fund's Board of Directors,
this unregistered security has been deemed to be illiquid. The Fund currently
limits investment in illiquid securities to 15% of the Fund's net assets, at
market value.
<TABLE>
<CAPTION>
Acquisition Market Percent of
Security Date Shares Value Net Assets
-------- ----------- ------ -------- ----------
<S> <C> <C> <C> <C>
TV Azteca S.A. de C.V. (ADR)............. 07/02/99 15,910 $209,813 0.17%
======== ====
</TABLE>
8. Subsequent Events
Effective on July 26, 2000, Lexington Global Asset Managers, Inc. was acquired
by ReliaStar Financial Corp. ("ReliaStar"). In conjunction with the
acquisition and following approval by the Fund's Board of Directors and
shareholders, Pilgrim Investments, Inc., an indirect, wholly owned subsidiary
of ReliaStar, was appointed to the role of investment adviser to the Fund
effective July 26, 2000. Pilgrim Securities, Inc., also an indirect, wholly
owned subsidiary of ReliaStar, was appointed distributor to the Fund on that
date as well.
On May 1, 2000, ReliaStar Financial Corp. (NYSE:RLR), the indirect parent
company of Pilgrim Investments, Inc., Adviser to the Funds, and Pilgrim
Securities, Inc., Distributor to the Funds, 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.
9
<PAGE>
Pilgrim Worldwide Emerging Markets Fund, Inc.
Financial Highlights
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
Six months ended Year ended December 31,
June 30, 2000 --------------------------------------
(unaudited) 1999 1998 1997 1996
---------------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $15.10 $ 7.13 $10.18 $11.49 $10.70
------ ------ ------ ------ ------
Income from investment
operations:
Net investment income
(loss)................ (0.44) (0.05) 0.12 0.01 --
Net realized and
unrealized gain (loss)
on investments and
foreign currencies.... (2.78) 8.05 (3.08) (1.32) 0.79
------- ------- ------- ------- ------
Total income (loss) from
investment operations.. (3.22) 8.00 (2.96) (1.31) 0.79
------- ------- ------- ------- ------
Less distributions:
Dividends from net
investment income..... -- (0.03) (0.09) -- --
------- ------- ------- ------ ------
Net asset value, end of
period................. $11.88 $15.10 $ 7.13 $10.18 $11.49
====== ====== ====== ====== ======
Total return............ (38.26)%* 112.58% (29.06)% (11.40)% 7.38%
Ratio to average net
assets:
Expenses, net of
reimbursement......... 1.88%* 2.00% 1.85% 1.82% 1.76%
Net investment income
(loss)................ (5.55)%* (0.66)% 1.14% 0.09% (0.01)%
Portfolio turnover
rate................... 343.64%* 184.39% 107.19% 112.05% 86.26%
Net assets, end of
period (000's
omitted)............... $123,665 $154,994 $65,323 $137,686 $254,673
</TABLE>
--------
* Annualized.
10
<PAGE>
PILGRIM WORLDWIDE EMERGING
MARKETS FUND, INC.
Investment Adviser
Pilgrim Investments, Inc.
40 North Central Avenue
Suite 1200
Phoenix, Arizona 85004-4408
Distributor
Pilgrim Securities, Inc.
40 North Central Avenue
Suite 1200
Phoenix, Arizona 85004-4408
www.lexingtonfunds.com
All Shareholder requests for services of
any kind should be sent to:
Transfer Agent
Lexington Funds
c/o DST Systems, Inc.
P.O. Box 219368
Kansas City, Missouri 64121-6368
Or call toll free
Service and Sales: 1-800-526-0056
This report has been prepared for the information of the shareholders of Pilgrim
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. LEX273-SAR6/00
