Dear Shareholders:
- --------------------------------------------------------------------------------
The second half of 1996 was very rewarding for our shareholders. While the
first half of 1996 provided a total return of 3.8%*, the second half's strong
performance brought the total return of the Fund for the year up to 13.3%*. This
compares very favorably with the unmanaged Salomon Brothers World Government
Bond Index which returned 3.6% for the year (in U.S. dollar terms), 0.2% for a
ten year U.S. Treasury Bill held for all of 1996 and 10.4% for the average fund
in the Lipper Global Fixed Income category according to Lipper Analytical
Services, Inc.
The second half of 1996 saw an acceleration of the trends which we spoke
about in our last letter. Yields in peripheral European countries (Spain, Italy
and Portugal) which had fallen approximately 1% in the first half of the year
declined a further 2% in the second half. Restrictive fiscal policies by these
governments brought about by their desire not to be left out of the European
Monetary Union combined with rapidly declining inflation produced these dramatic
declines in yields. While there is still room for this trend to continue, we
believe the majority of this convergence of yields with "core" Europe is coming
to an end.
Emerging market debt also continued its good performance. With the strongest
concentration of economic growth in the world, the credit quality of many
emerging market countries and companies is increasing and should continue on
that path in 1997.
One of the differences in the second half of 1996 versus the first half is
that the dollar bloc (which includes Australia, Canada, New Zealand and the
U.S.) also performed very well. Interest rates which had increased in these
countries in the first half on the back of a poor U.S. market, reversed their
upward trend. While longer term rates in the U.S. managed to decline slightly,
yields in the rest of the dollar bloc fell substantially, on the order of 1% to
1.5%. Recognition of the continued trend of low inflation in these countries was
the main contributing factor to the decline in yields.
Looking ahead to 1997, we believe that the most rewarding investments will
be those that seek out improving credit quality situations, both on the country
and company level. In particular, the return of strong growth to Latin America
should provide fertile ground for many of these opportunities. We thank you for
your support and look forward to the challenges of the new year.
Sincerely,
Maria Fiorini Ramirez Denis P. Jamison Robert M. DeMichele
Portfolio Manager Portfolio Manager President
February, 1997 February, 1997 February, 1997
1
<PAGE>
CHART/BEGIN
Printed version of this shareholder report contains a
graphic chart indicating the comparison of change in
value of a $10,000 investment in Lexington Ramirez
Global Income Fund and the unmanaged Lehman Brothers
Global Bond Index from 12/31/94 through 12/31/96.
CHART/END
*13.33%, 8.49%, and 7.64% are the one and five year and since inception
(7/10/86) average annual standard total returns, respectively, for the period
ended December 31, 1996. Prior to December 31, 1994, the Fund operated under a
different name and investment objecitve. 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.
2
<PAGE>
Lexington Ramirez Global Income Fund
Statement of Net Assets
(Including the Portfolio of Investments)
December 31, 1996 (unaudited)
Principal Value
Amount Security (Note 1)
- --------------------------------------------------------------------------------
LONG-TERM DEBENTURES: 77.5%
Government Obligations: 54.4%
Argentina: 5.8%
750,000 Republic of Argentina
9.25%, due 2/23/01 ........................... $ 764,062
1,500,000 Republic of Argentina
5.25%, due 3/31/23 ........................... 946,875
-----------
1,710,937
-----------
Australia: 5.2%
930,000 *Commonwealth of Australia
9.00%, due 09/15/04 .......................... 811,982
940,000 *New South Wales
Treasury Corporation
6.50%, due 05/01/06 .......................... 691,537
-----------
1,503,519
-----------
Costa Rica: 2.5%
900,000 Banco Costa Rica
6.25%, due 05/21/10 .......................... 715,500
-----------
Dominican Republic: 3.1%
1,200,000 Central Bank of Dominican
Republic
6.375%, due 08/30/24 ......................... 915,000
-----------
Greece: 4.7%
330,000,000 *Hellenic Republic
14.00%, due 10/23/03 ......................... 1,356,462
-----------
Hungary: 4.3%
200,000,000 *Government of Hungary
21.00%, due 10/24/99 ......................... 1,262,480
-----------
Ireland: 5.9%
1,000,000 *Government of Ireland
6.50%, due 10/18/01 .......................... 1,720,439
-----------
Jordan: 3.6%
1,750,000 Kingdom of Jordan
4.00%, due 12/23/23 .......................... 1,036,875
-----------
Kazakhstan: 3.4%
1,000,000 Republic of Kazakhstan
9.25%, due 12/20/99 .......................... 1,000,001
-----------
New Zealand: 2.8%
1,150,000 *New Zealand Government
6.50%, due 02/15/00 .......................... 800,893
-----------
Poland: 3.0%
2,680,000 *Government of Poland
16.00%, due 10/12/98 ......................... 883,022
-----------
Portugal: 5.7%
110,000,000 *Obrig Do Tes Medio Prazo
11.875%, due 02/23/00 ........................ 844,416
-----------
100,000,000 *Obrig Do Tes Medio Prazo
11.875%, due 02/23/05 ........................ 824,420
-----------
1,668,836
-----------
(right column)
Principal Value
Amount Security (Note 1)
- --------------------------------------------------------------------------------
South Africa: 1.8%
1,100,000 *Electricity Supply Commission
11.00%, due 06/01/08 ......................... $ 172,173
2,000,000 *Republic of South Africa
12.00%, due 02/28/05 ......................... 349,692
-----------
521,865
-----------
Spain: 2.6%
80,000,000 *Bonos Y Oblig
Del Estado
10.15%, due 01/31/06 .......................... 750,643
-----------
Total Government Obligations
(Cost $15,249,770) ............................ 15,846,472
-----------
Corporate Bonds: 23.1%
Canada: 6.9%
1,000,000 CHC Helicopter
11.50%, due 07/15/02 .......................... 1,025,000
500,000 *Roger's Communication, Inc.
10.50%, due 02/14/06 .......................... 380,803
700,000 *Stelco, Inc.
10.40%, due 11/30/09 .......................... 603,628
-----------
2,009,431
-----------
Czech Republic: 3.5%
12,500,000 *CEZ, A.S.
11.30%, due 06/06/05 .......................... 464,044
14,800,000 *Skofin S.R.O., A.S.
11.625%, due 02/09/98 ......................... 546,275
-----------
1,010,319
-----------
Denmark: 6.0%
5,500,000 *Nykredit
7.00%, due 10/01/26 ........................... 877,832
5,500,000 *Realkredit Danmark
7.00%, due 10/01/26 ........................... 873,916
-----------
1,751,748
-----------
Thailand: 2.5%
17,500,000 *Italian-Thai Development
Company
12.50%, due 10/11/05 .......................... 734,912
-----------
United States: 4.2%
750,000 Chiquita Brands International, Inc.
10.25%, due 11/01/06 .......................... 802,500
250,000 Clark Material Handling Company
10.75%, due 11/15/06 .......................... 261,250
204,288 DLJ Mortgage Acceptance
7.25%, due 9/25/11** .......................... 148,804
-----------
1,212,554
-----------
Total Corporate Bonds
(Cost $6,513,554) ............................. 6,718,964
-----------
TOTAL LONG-TERM DEBENTURES
(Cost $21,763,324) ............................ 22,565,436
-----------
3
<PAGE>
Lexington Ramirez Global Income Fund
Statement of Net Assets
(Including the Portfolio of Investments)
December 31, 1996 (continued)(unaudited)
Principal Value
Amount Security (Note 1)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS: 20.0%
Greece: 3.7%
175,000,000 *Hellenic Treasury Bills
0%, due 01/31/97 .............................. $ 702,390
100,000,000 *Hellenic Treasury Bills
0%, due 05/31/97 .............................. 385,909
-----------
1,088,299
-----------
Indonesia: 3.2%
1,600,000,000 *Asia Pulp & Paper
0%, due 04/29/97 .............................. 645,108
700,000,000 *Chase Manhattan Bank
IDR Time Deposit
14.00%, due 1/16/97 ........................... 296,296
-----------
941,404
-----------
Mexico: 3.4%
8,000,000 *Cetes
0%, due 2/20/97 ............................... 978,965
-----------
New Zealand: 3.4%
1,400,000 *New Zealand Government
Treasury Bills
0%, due 1/15/97 ............................... 985,914
-----------
Slovakia: 2.7%
25,000,000 *European Bank for Research
& Development
12.50%, due 08/19/97 .......................... 782,567
-----------
(right column)
Principal Value
Amount Security (Note 1)
- --------------------------------------------------------------------------------
Turkey: 1.3%
50,000,000,000 *Government of Turkey
Treasury Bills
0%, due 4/09/97 ............................... $ 381,332
-----------
United States: 2.3%
700,000 U.S. Treasury Bills
5.155%, due 12/11/97 .......................... 665,518
-----------
Total Short-Term Investments
(cost $5,924,865) ............................. 5,823,999
-----------
Call Options in Currency:
1,400,000 *Written Call Option on New
Zealand Dollar strike price
.713 NZD expires 1/13/97
(premium $5,530) (Note 8) ..................... (1,610)
-----------
Total Investments: 97.5%
(cost $27,688,189+) (Note 1) ............... 28,387,825
Other assets in excess of
liabilities: 2.5% ............................. 721,995
-----------
Total Net Assets: 100%
(equivalent to $11.22 per share
on 2,594,444 shares outstanding) .............. $29,109,820
===========
*Principal amount represents local currency.
**Restricted Security (Note 9).
+Aggregate cost for Federal income tax purposes is identical.
The Notes to Financial Statements are an integral part of this statement.
4
<PAGE>
Lexington Ramirez Global Income Fund
Statement of Assets and Liabilities
December 31, 1996
Assets
<TABLE>
<S> <C>
Investments, at value (cost $27,688,189) (Note 1) ............................................ $28,387,825
Cash ......................................................................................... 72,570
Receivable for investment securities sold .................................................... 89,375
Receivable for shares sold ................................................................... 233,960
Dividends and interest receivable ............................................................ 713,512
Unrealized gain on open forward contracts (Note 7) ........................................... 19,668
-----------
Total Assets ......................................................................... $29,516,910
-----------
Liabilities
Due to Lexington Management Corporation (Note 2) ............................................. 22,500
Payable for shares redeemed .................................................................. 232,128
Distributions payable ........................................................................ 107,377
Accrued expenses ............................................................................. 45,085
-----------
Total Liabilities .................................................................... 407,090
-----------
Net Assets (equivalent to $11.22 per share on 2,594,444 shares outstanding) (Note 4) ......... $29,109,820
===========
Net Assets consist of:
Additional paid-in capital (Note 1) .......................................................... 28,286,038
Distributions in excess of net investment income (Note 1) .................................... (86,311)
Accumulated net realized gain on investments and foreign currency transactions (Note 1) ...... 192,017
Unrealized appreciation on investments and foreign currency transactions ..................... 718,076
-----------
Total Net Assets ..................................................................... $29,109,820
===========
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
5
<PAGE>
Lexington Ramirez Global Income Fund
Statement of Operations
Years ended December 31, 1996
<TABLE>
Investment Income
<S> <C> <C>
Interest ................................................................. $2,106,538
Less: foreign tax expense ................................................ 25,200
----------
Total investment income .......................................... $2,081,338
Expenses
Investment advisory fee (Note 2) ......................................... 175,988
Printing and mailing expenses ............................................ 55,988
Distribution expense (Note 3) ............................................ 43,997
Registration fees ........................................................ 25,558
Custodian fees ........................................................... 23,158
Professional fees ........................................................ 21,556
Transfer agent and shareholder services expense (Note 2) ................. 20,870
Directors' fees and expenses ............................................. 15,488
Accounting expenses (Note 2) ............................................. 12,686
Computer processing fees ................................................. 5,922
Other expenses ........................................................... 9,446
----------
Total expenses ................................................... 410,657
Less: expenses recovered under contract
with investment adviser (Note 2) ............................... (145,984) 264,673
---------- ----------
Net investment income ............................................ 1,816,665
Realized and Unrealized Gain (Loss) on Investments (Note 5)
Net realized gain (loss) on:
Investments .......................................................... 583,537
Foreign currency transactions ........................................ (389,687)
----------
Net realized gain ................................................ 193,850
Net change in unrealized appreciation/depreciation on:
Investments .......................................................... 207,852
Foreign currency translation of other assets and liabilities ......... 14,433
----------
Net change in unrealized appreciation ............................ 222,285
----------
Net realized and unrealized gain ............................. 416,135
----------
Increase in Net Assets Resulting from Operations ............................. $2,232,800
==========
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
6
<PAGE>
Lexington Ramirez Global Income Fund
Statements of Changes in Net Assets
Years ended December 31, 1996 and 1995
1996 1995
----------- -----------
Net investment income ............................... $ 1,816,665 $ 959,352
Net realized gain on investments and
foreign currency transactions ................... 193,850 331,370
Net change in unrealized appreciation of
investments and foreign currency translations ..... 222,285 492,391
----------- -----------
Increase in net assets resulting from operations .... 2,232,800 1,783,113
Distributions to shareholders from net
investment income ................................. (1,529,914) (901,633)
Distributions to shareholders from net realized
gains from security transactions .................. (92,247) -
Increase in net assets from capital share
transactions (Note 4) ............................. 16,244,449 1,022,692
----------- -----------
Net increase in net assets .......................... 16,855,088 1,904,172
Net Assets
Beginning of period ................................. 12,254,732 10,350,560
----------- -----------
End of period (including distributions in excess
of net investment income of $86,311 and
undistributed net investment income of
$16,186, respectively) ............................ $29,109,820 $12,254,732
=========== ===========
The Notes to Financial Statements are an integral part of these statements.
7
<PAGE>
Lexington Ramirez Global Income Fund
Notes to Financial Statements
December 31, 1996 and 1995
1. Significant Accounting Policies
Lexington Ramirez Global Income 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 high
current income. Capital appreciation is a secondary objective. 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. Long-term debt obligations held by the Fund are valued at
the mean of representative quoted bid and asked prices for such securities or,
if such prices are not available, at prices for securities of comparable
maturity, quality and type; however, when LMC deems it appropriate, prices
obtained for the day of valuation from a bond pricing service will be used.
Short-term debt investments are amortized to maturity based on their cost,
adjusted for foreign exchange translation and market fluctuations. Equity
securities are valued at the last sale price on the exchange or in the principal
OTC market in which such securities are traded, as of the close of business on
the day the securities are being valued, lacking any sales, at the last
available bid price. Securities for which market quotations are not readily
available and other assets are valued at fair value as determined by management
in good faith and approved by the 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 are normally declared and
paid quarterly and dividends from net realized capital gains are normally
declared and paid annually. However, 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.
8
<PAGE>
Lexington Ramirez Global Income Fund
Notes to Financial Statements
December 31, 1996 and 1995 (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. In
connection with providing investment advisory services, LMC has entered into a
sub-advisory contract with MFR Advisors Inc. ("MFR") under which MFR provides
the Fund with investment management services. Pursuant to the terms of the
sub-advisory contract between LMC and MFR, LMC pays MFR a monthly sub-advisory
fee at the annual rate of .50% of the Fund's average daily net assets over $15
million. LMC has agreed to voluntarily limit the total expenses of the Fund
(excluding interest, taxes, brokerage commissions and extraordinary expenses but
including management fee and operating expenses) to an annual rate of 1.50% of
the Fund's average net assets through December 31, 1997 or such later date as
may be determined by LMC. The investment advisory fee and expense reimbursement
are set forth in the statement of operations.
The Fund also reimbursed LMC for certain expenses, including accounting and
shareholder servicing costs of $22,160, which were incurred by the Fund, but
paid by LMC.
3. Distribution Plan
The Fund has adopted a Distribution Plan (the "Plan") which allows payments to
finance activities associated with the distribution of the Fund's shares. The
Plan provides 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 year ended December 31,
1996 were $43,997 and are set forth in the statement of operations.
4. Capital Stock
Transactions in capital stock were as follows:
Year ended Year ended
December 31, 1996 December 31, 1995
---------------------- ----------------------
Shares Amount Shares Amount
------ ------ ------ ------
Shares sold ................... 2,090,482 $23,291,607 356,354 $3,788,187
Shares issued on reinvestment
of dividends ................ 119,710 1,308,206 72,344 755,680
--------- ----------- ------- ----------
2,210,192 24,599,813 428,698 4,543,867
Shares redeemed ............... (755,281) (8,355,364) (345,326) (3,521,175)
--------- ----------- ------- ----------
Net increase .................. 1,454,911 $16,244,449 83,372 $1,022,692
========= =========== ======= ==========
9
<PAGE>
Lexington Ramirez Global Income Fund
Notes to Financial Statements
December 31, 1996 and 1995 (continued)
5. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales of securities for the year ended
December 31, 1996, excluding short-term securities, were $21,471,435 and
$9,717,270, respectively.
At December 31, 1996, the aggregate gross unrealized appreciation for all
securities in which there is an excess of value over tax cost amounted to
$1,172,971 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $454,895.
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
exchange contracts as the result of the potential inability of counterparties to
meet the terms of their contracts.
7. Forward Foreign Exchange Contracts
At December 31, 1996, the Fund was committed to sell foreign currencies under
the following forward foreign exchange contracts:
Unrealized
Settlement Contract Contract Current Gain at
Security Date Amount Rate Rate 12/31/96
-------- ---------- -------- -------- ------- ----------
Canadian Dollar ........... 1/31/97 $ 896,861 1.3380 1.3680 $19,668
=======
8. Option Contracts
When the Fund writes a call option, an amount equal to the premium received by
the Fund is recorded as a liability, the value of which is marked-to-market
daily. When a written option expires, the Fund realizes a gain equal to the
amount of the premium received. When the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or loss if the cost of the closing
purchase transaction exceeds the premium received when the option was sold)
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is eliminated. When a written call option
is exercised the cost of the security sold will be decreased by the premium
originally received. The risk in writing a covered call option is that the Fund
gives up the opportunity to participate in any increase in the price of the
underlying security beyond the exercise price.
10
<PAGE>
Lexington Ramirez Global Income Fund
Notes to Financial Statements
December 31, 1996 and 1995 (continued)
8. Option Contracts (continued)
The following written call option transactions occurred during the period ended
December 31, 1996:
Number of
Premiums Contracts
------------ ----------
Options written outstanding at December 31, 1995 ....... $ - 0
Options written during the period ended
December 31, 1996 .................................... 78,629 12
Options cancelled in closing purchase transactions ..... (26,458) (6)
Options expired ........................................ (46,641) (5)
------- ---
Options written, outstanding at December 31, 1996 ...... $ 5,530 1
======= ===
9. 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 Principal Market % of Net
Security Date Amount Average Cost Value Assets
- -------- ----------- --------- ------------ ------ --------
DLJ Mortgage Acceptance .. 10/25/96 204,288 $0.74 $ 148,804 0.51%
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.
11
<PAGE>
Lexington Ramirez Global Income Fund
Financial Highlights
Selected per share data for a share outstanding throughout the period:
Year ended December 31,
------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Net asset value, beginning
of period $10.75 $ 9.80 $10.95 $10.39 $10.35
------ ------ ------ ------ ------
Income (loss) from investment
operations:
Net investment income 1.01 .96 .46 .53 .61
Net realized and unrealized gain
(loss) from investments and
foreign currency transactions .36 .95 (1.16) .58 .04
------ ------ ------ ------ ------
Total income (loss) from investment
operations 1.37 1.91 (.70) 1.11 .65
------ ------ ------ ------ ------
Less distributions:
Distributions from net investment
income (.86) (.96) (.45) (.55) (.61)
Distributions from net realized
gains (.04) - - - -
------ ------ ------ ------ ------
Total distributions (.90) (.96) (.45) (.55) (.61)
------ ------ ------ ------ ------
Net asset value, end of period $11.22 $10.75 $ 9.80 $10.95 $10.39
====== ====== ====== ====== ======
Total return 13.33% 20.10% (6.52%) 10.90% 6.51%
Ratios to average net assets:
Expenses, before reimbursement
or waiver 2.33% 3.07% 1.80% 1.44% 1.54%
Expenses, net of reimbursement
or waiver 1.50% 2.75% 1.50% 1.44% 1.50%
Net investment income, before
reimbursement or waiver 9.49% 9.48% 4.18% 4.83% 5.88%
Net investment income 10.32% 9.80% 4.48% 4.83% 5.92%
Portfolio turnover 71.83% 164.72% 10.20% 31.06% 31.24%
Net assets, end of period
(000's omitted) $29,110 $12,255 $10,351 $14,576 $13,085
12
<PAGE>
Independent Auditors' Report
The Board of Trustees and Shareholders
Lexington Ramirez Global Income Fund:
We have audited the accompanying statements of net assets (including the
portfolio of investments) and assets and liabilities of Lexington Ramirez Global
Income Fund as of December 31, 1996, the related statement of operations for the
year then ended, the statements of changes in net assets for each of the years
in the two-year period then ended, and the financial highlights for each of the
years in the five-year period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian. As to securities sold
but not delivered, we performed other appropriate auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Lexington Ramirez Global Income Fund as of December 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the years in the five-year period then ended, in conformity with
generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
February 14, 1997
13
<PAGE>
Lexington
Ramirez Global Income Fund, Inc.
Investment Adviser
- ----------------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Sub-Adviser
- ----------------------------------------------------------
MFR ADVISORS, INC.
Liberty Plaza
46th Floor
New York, New York 10006
Distributor
- ----------------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
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All shareholder requests for services of
any kind should be sent to:
Transfer Agent
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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
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(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
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This report has been prepared for the information of
the shareholders of Lexington Ramirez Global Income Fund
and is authorized for distribution to the public only if
it is accompanied or preceded by a currently effective
prospectus which sets forth expenses and other material
information.
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LEXINGTON
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LEXINGTON
RAMIREZ
GLOBAL
INCOME
FUND
(filled box)
(filled box)Quarterly dividends
(filled box)Capital appreciation potential
(filled box)Free telephone exchange
privilege
(filled box)No sales charge
(filled box)
ANNUAL REPORT
DECEMBER 31, 1996
The Lexington Group
of No Load
Investment Companies
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