Dear Shareholders:
The Lexington Global Fund appreciated by 2.9%* during the second quarter.
This compares to a return of 3.8% for the unmanaged Morgan Stanley World Index
for the same period. The average global fund appreciated 7.2% during the second
quarter according to Lipper Analytical Services, Inc. For the first six months
of 1995, the Lexington Global Fund returned 1.8%, while the unmanaged Morgan
Stanley World Index provided an 8.2% return. The average global fund is up 7.5%
for the first six months.
The Lexington Global Fund underperformed its peers during the second quarter
due to several factors. The U.S. market rose 9.2% during the quarter and the
Fund's underweighting of U.S. equities hurt performance. Technology stocks were
the star performers during the quarter. Electronic component and instrument
stocks were up 23.2%, while data processing stocks returned 12.7%. The Lexington
Global Fund held less technology stocks than its peer group. Finally, the
Fund's 20% hedged position on foreign currencies prevented the Fund from reaping
additional benefits from further dollar weakness.
Global equities performed well during the second quarter due to the effects
of a slowing U.S. economy. Interest rate hikes by the Federal Reserve finally
began to slow the economy as both auto and housing sales slumped. In fact, the
slowdown in the U.S. economy was more pronounced and rapid than most investors
had expected. This led to a powerful global bond rally which was particularly
strong in the U.S. as ten year government bond yields fell 1.05% to 6.25%.
European bonds also enjoyed a strong rally while Japanese bond yields collapsed
.85% to just 3.7%. Not surprisingly, equities performed well as world bond
yields fell. The Japanese economy continued to struggle as secular problems such
as a weak banking system and bloated employment levels were exacerbated by a
strong yen. Despite a strong bond market, Japanese stocks fell 6.5%. Both
European and emerging markets generally performed well as slower world growth
fueled bonds and stocks.
Looking toward the second half of 1995 we expect the U.S. economy to
strengthen. Lower interest rates should spur renewed interest in housing and
perhaps autos. Inventory levels should be at more normal levels and thus prevent
a further drag on the economy. The U.S. economy is also benefiting from a
renewed competitive vigor among U.S. corporations. U.S. companies are now
extremely competitive due to years of cost cutting and restructuring. Growth
industries such as computers, biotechnology, and multimedia are dominated by the
U.S. so the outlook is bright. In the short term a strengthening U.S. economy
would weaken the bond market and probably stocks. We believe the long term
outlook for U.S. equities remains bright but expect better entry levels as U.S.
bond yields rise on signs of economic strength. Europe will benefit from a
pickup in the U.S. economy but further restructuring and strong currencies will
keep growth low at under 3%. This should allow the Bundesbank to cut interest
rates which will provide support for European markets. Emerging markets are at
relatively attractive valuations but are vulnerable to a correction when the
U.S. market falls. Japanese stocks remain unattractive long term until companies
get serious about cutting costs in the form of reducing labor. After a recent
visit to Japan we find this
1
<PAGE>
unlikely to happen in the immediate future. Finally, we remain bullish on the
dollar, particularly against the yen. Signs of U.S. economic strength, a further
cut in German interest rates, and a continuing fall in Japan's trade surplus
should combine for a stronger dollar by the end of 1995.
The Lexington Global Fund will probably not see dramatic changes in country
weighting in the second half of 1995. We believe it will be a stock picker's
market and the focus will be on individual stocks. We will continue to look for
quality managements which have an ability to grow a business. Stock selection
will continue to be based on a long term view of a company's prospects and
applying our valuation criteria. The Fund will continue to hedge a portion of
the portfolio back into dollars as we expect a strong U.S. currency.
Also included in this semi-annual report to shareholders is a summary of the
results of the shareholder meeting held on April 19, 1995. All of the proposals
were approved by majority of shareholders.
We appreciate your continued support and would welcome the opportunity to
discuss any questions you may have about your investment.
Sincerely,
Richard T. Saler Alan H. Wapnick Robert M. DeMichele
Portfolio Manager Portfolio Manager President
July, 1995 July, 1995 July, 1995
*0.98%, 5.66% and 8.20% are the one and five year and since inception (3/27/87)
average annual standard total returns, respectively, for the period ended June
30, 1995. Investment return and principal value of an investment will fluctuate
so that an investor's shares, when redeemed, may be worth more or less than at
their original cost. Total return represents past performance.
2
<PAGE>
Results of Annual Meeting of Shareholders held April 19, 1995 (unaudited)
Total Outstanding Shares as of February 1, 1995: 5,798,734
<TABLE>
1. Directors elected: Robert M. DeMichele, Beverley C. Duer, Barbara R. Evans, Lawrence Kantor, Donald B.
Miller, Francis Olmsted, John G. Preston, Margaret W. Russell, Philip C. Smith and Francis A. Sunderland
<CAPTION>
Votes For Votes Against Votes Abstained
--------- ------------- ---------------
<S> <C> <C> <C>
2. Selection of KPMG Peat Marwick LLP as Independent
Auditors.................................................. 5,112,329 17,703 43,438
3. Amendment of fundamental restriction concerning
senior securities......................................... 4,451,509 29,216 52,089
4. Amendment to fundamental restriction concerning
borrowing................................................. 4,434,074 47,731 51,010
5. Elimination of fundamental restriction concerning its
ability to pledge, mortgage or hypothecate................ 4,431,772 48,269 52,773
6. Amendment to fundamental restriction concerning
underwriting.............................................. 4,455,211 28,515 49,100
7. Amendment to fundamental restriction concerning real
estate.................................................... 4,450,803 31,037 50,974
8. Amendment to fundamental restriction concerning
lending................................................... 4,445,293 37,842 49,680
9. Elimination of fundamental restriction concerning joint
trading accounts.......................................... 4,448,392 35,384 49,037
10. Amendment to fundamental restriction concerning
commodities............................................... 4,430,159 50,708 51,948
11. Elimination of fundamental restriction concerning
margin and short sales.................................... 4,427,926 51,448 53,440
12. Amendment to fundamental restriction concerning
concentration............................................. 4,453,423 26,615 52,776
13. Separation of fundamental restriction concerning
diversification and securities of affiliates.............. 4,450,911 29,182 52,821
14. Eliminination of fundamental restriction concerning
securities of other investment companies.................. 4,454,503 25,045 53,265
15. Elimination of fundamental restriction concerning
securities of issuers in operation less than three
(3) years................................................. 4,440,327 39,100 53,388
16. Elimination of fundamental restriction concerning
investment for control.................................... 4,443,204 37,905 51,705
17. Elimination of fundamental restriction concerning
warrants.................................................. 4,438,568 40,581 53,666
18. Elimination of fundamental restriction concerning
restricted and illiquid securities........................ 4,430,252 48,883 53,679
19. Elimination of fundamental restriction concerning
investment in oil, gas and minerals....................... 4,443,542 36,696 52,041
</TABLE>
3
<PAGE>
Lexington Global Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1995 (unaudited)
(Left Column)
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------
Australia: 2.0%
77,000 QBE Insurance Group Ltd. ................ $ 306,195
122,100 TABcorp Holdings Ltd. ................... 252,306
33,400 TABcorp Holdings Ltd. (ADR)1 ............ 684,700
1,243,201
Canada: 1.5%
42,300 Canadian Pacific Ltd. ................... 728,114
134,700 Markborough Properties, Inc.* ........... 185,489
913,603
Chile: 0.9%
38,200 Banco Osorno y La Union (ADR) ........... 530,025
Denmark: 1.0%
5,740 Novo-Nordisk A.S. ....................... 608,703
Finland: 1.1%
21,400 Huhtamaki Group "I" ..................... 702,330
France: 5.6%
9,200 Banque Nationale de Paris ............... 444,517
3,844 Cetelem ................................. 595,292
1,800 Comptoirs Modernes ...................... 555,647
2,920 Ecco S.A. ............................... 458,832
39,400 France Growth Fund, Inc. ................ 403,850
200 Grand Optical Photoservice .............. 18,500
700 Groupe Danone ........................... 117,944
4,800 Groupe SEB S.A. ......................... 534,215
3,880 Havas ................................... 307,644
3,436,441
Germany: 5.0%
840 AVA Allgemeine Handelsgelesschaft
der Verbraucher AG .................... 328,291
4,790 Continental AG .......................... 696,122
8,700 Deutsche Bank AG ........................ 423,130
740 Douglas Holding AG ...................... 278,551
148 Fag Kugelfischer Georg Schaefer
Kommanditgesellschaft Auf Aktien* ....... 20,191
5,700 G.M. Pfaff AG ........................... 639,430
560 Moebel Walther AG ....................... 283,709
624 Sto AG .................................. 392,005
3,061,429
Hong Kong: 6.3%
181,000 Dao Heng Bank Group Ltd. ................ 552,100
45,000 HSBC Holdings Plc ....................... 577,258
62,000 Johnson Electric Holdings Ltd. .......... 125,009
486,000 Peregrine Investment Holdings Ltd. ...... 690,965
318,500 Semi-Tech (Global) Ltd. ................. 512,515
498,000 Shun Tak Holdings Ltd. .................. 395,852
81,000 Sun Hung Kai Properties Ltd. ............ 599,360
143,000 Wharf (Holdings) Ltd. ................... 466,687
3,919,746
(Right Column)
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------
Indonesia: 1.0%
148,500 PT Argha Karya Prima
Industries ............................ $ 110,074
92,000 PT Astra International .................. 163,253
63,200 PT Bank International Indonesia ......... 195,193
81,000 PT Kawasan Industries Jababeka .......... 160,108
---------
628,628
---------
Ireland: 2.0%
92,300 Allied Irish Banks Plc .................. 438,791
933,100 Waterford Wedgewood ..................... 795,408
---------
1,234,199
---------
Israel: 2.3%
310 Africa-lsrael Investments Ltd.* ......... 371,476
50,400 Clal Industries Ltd.* ................... 299,700
25,100 First Israel Fund, Inc.* ................ 298,062
5,320 Koor Industries Ltd. .................... 454,105
---------
1,423,343
---------
Japan: 13.1%
10,000 Acom Company, Ltd. ...................... 289,427
62,000 Japan Vilene Company, Ltd. .............. 362,551
39,000 Joshin Denki Company, Ltd. .............. 446,899
21,000 Komatsu Forklift Company, Ltd. .......... 116,597
55,000 Makino Milling Machine Company,
Ltd.* ................................. 319,669
37,000 Matsushita Electric Industrial
Company, Ltd .......................... 576,963
37,000 Matsushita Refrigeration Company ........ 260,945
14,000 Matsuzakaya Company, Ltd. ............... 142,232
32,000 Mitsubishi Estate Company, Ltd.* ........ 361,015
19,000 Mori Seiki Company, Ltd. ................ 338,924
60,000 NEC Corporation ......................... 658,476
64,000 Nippon Chemi-Con Corporation* ........... 350,053
10,000 Nissen Company, Ltd. .................... 301,241
60,000 NOK Corporation ......................... 414,649
27,000 NTN Corporation ......................... 159,481
43,000 Okasan Securities Company, Ltd. ......... 165,600
6,000 Rohm Company, Ltd. ...................... 310,455
20,000 Royal Company, Ltd. ..................... 278,796
55,000 Sansui Electric Company, Ltd.* .......... 118,902
26,000 Shinobu Food Products
Company, Ltd. ......................... 247,254
12,000 Sony Corporation ........................ 576,964
24,000 Sumitomo Trust & Banking
Company, Ltd. ......................... 292,026
18,000 Tokyo Electron Ltd. ..................... 616,657
34,000 Wacoal Corporation ...................... 421,737
---------
8,127,513
---------
4
<PAGE>
Lexington Global Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1995 (unaudited) (continued)
(Left Column)
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------
Malaysia: 1.2%
69,000 Commerce Asset Holdings Bhd ............. $ 353,919
113,000 Land & General Holdings Bhd ............. 377,903
----------
731,822
----------
Mexico: 0.5%
61,100 Tubos De Acero De Mexico S.A.
(ADR)* ................................ 301,681
Netherlands: 3.5%
66,400 Elsevier N.V. ........................... 784,961
6,100 Royal Dutch Petroleum Company ........... 745,555
4,900 Unilever N.V. ........................... 638,140
----------
2,168,656
----------
New Zealand: 2.1%
532,200 Brierley Investments Ltd. ............... 401,725
57,400 Ceramco Corporation Ltd. ................ 97,775
170,100 Fisher & Paykel Industries Ltd. ......... 499,958
94,400 Independent Newspaper Ltd. .............. 293,226
----------
1,292,684
----------
Norway: 1.6%
14,300 Petroleum Geo - Services A.S.
(ADR)* ................................. 413,806
42,000 Saga Petroleum A.S. ..................... 596,862
----------
1,010,668
----------
Philippines: 1.2%
993,000 Filinvest Land Inc.* .................... 288,277
841,320 Universal Robina Corporation ............ 429,077
----------
717,354
----------
Portugal: 0.7%
23,200 Portugal Telecom S.A.* .................. 444,627
----------
Singapore: 1.8%
299,000 Comfort Group Ltd.* ..................... 235,517
29,000 Fraser & Neave Ltd. ..................... 334,336
57,000 United Overseas Bank Ltd.* .............. 538,776
----------
1,108,629
----------
South Africa: 0.5%
10,300 Rustenburg Platinum Holdings
Ltd. (ADR) ............................ 212,441
9,000 Samancor Ltd. (ADR) ..................... 117,564
----------
330,005
----------
Spain: 1.1%
4,708 Corporacion Mapfre ...................... 231,797
13,800 Repsol S.A. ............................. 435,068
----------
666,865
----------
(Right Column)
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------
Switzerland: 2.2%
450 Nestle AG ............................... $ 469,296
505 Union Bank of Switzerland ............... 524,020
640 Winterthur Schweizerische
Versicherungs-Gesellschaft ............ 385,213
----------
1,378,529
----------
United Kingdom: 4.8%
75,000 Aegis Group Plc* ........................ 33,762
81,400 Antofagasta Holdings Plc ................ 418,966
95,300 B.A.T. Industries Plc ................... 730,449
74,000 D. F. S. Furniture Company Plc .......... 356,115
36,200 RTZ Corporation Plc ..................... 473,015
113,100 Takare Plc .............................. 346,032
27,000 Takare Plc1 ............................. 82,608
144,200 Tomkins Plc ............................. 517,011
----------
2,957,958
----------
United States: 28.3%
5,600 Air Products and Chemicals, Inc. ........ 312,200
29,100 Albemarle Corporation ................... 454,688
15,900 Boatmen's Bancshares, Inc ............... 559,481
4,800 Boeing Company .......................... 300,600
27,700 Borders Group, Inc.* .................... 398,188
6,200 Burlington Northern, Inc. ............... 392,925
8,800 Burlington Resources, Inc. .............. 324,500
14,400 Capital One Financial Corporation ....... 280,800
11,200 Centex Corporation ...................... 316,400
8,300 Chevron Corporation ..................... 386,987
3,500 Colgate-Palmolive Company ............... 255,937
9,000 CPC International, Inc. ................. 555,750
10,000 Dana Corporation ........................ 286,250
5,500 Du Pont (E.l.) De Nemours &
Company ............................... 378,125
10,900 Duracell International, Inc. ............ 471,425
13,700 Firstar Corporation ..................... 460,663
10,700 Fluor Corporation ....................... 556,400
6,300 Forest Laboratories, Inc.* .............. 279,562
6,500 General Electric Company ................ 366,437
10,500 Goodyear Tire and Rubber Co. ............ 433,125
7,000 IllinoisTool Works, Inc. ................ 385,000
8,700 Ingersoll-Rand Company .................. 332,775
13,400 Jetform Corporation* .................... 220,262
21,700 Kaufman & Broad Home Corporation ........ 314,650
16,100 Lowe's Companies, Inc. .................. 480,987
14,000 May Department Stores Company ........... 582,750
3,900 McGraw-Hill Companies, Inc. ............. 295,912
13,000 Motorola, Inc. .......................... 872,625
14,500 Nabisco Holdings Corporation ............ 391,500
6,100 PepsiCo, Inc. ........................... 278,312
13,300 Pitney-Bowes, Inc. ...................... 510,387
3,000 Procter & Gamble Company ................ 215,625
5
<PAGE>
Lexington Global Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1995 (unaudited) (continued)
(Left Column)
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------
United States (continued)
13,400 Pulte Corporation ....................... $ 375,200
19,300 Ryland Group, Inc. ...................... 311,213
9,600 Schlumberger, Ltd. ...................... 596,400
27,200 Signet Banking Corporation .............. 595,000
52 Shawmut National Corporation
(Warrants)* ............................ 513
8,200 Texaco, Inc. ............................ 538,126
13,400 Toys "R" Us, Inc.* ...................... 391,951
11,300 Trinity Industries, Inc. ................ 375,726
13,200 UJB Financial Corporation ............... 400,951
12,500 USX-U.S. Steel Group, Inc. .............. 429,688
(Right Column)
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------
3,700 Walt Disney Company ..................... $ 205,813
23,000 Wal-Mart Stores, Inc. ................... 615,250
----------
17,487,059
----------
TOTAL INVESTMENTS: 91.3%
(cost $53,135,382(D)) (Note 1) ........ 56,425,698
Other assets in excess of liabilities:
8.7% .................................. 5,389,137
----------
TOTAL NET ASSETS: 100.0%
(equivalent to $11.37 per share on
5,436,479 shares outstanding) ......... $61,814,835
===========
At June 30, 1995, the composition of the Fund's net assets by industry
concentration was as follows:
(Left Column)
Banking ...................... 11.6%
Capital Equipment ............ 8.5%
Consumer Durable ............. 12.0%
Consumer Nondurable .......... 12.4%
Electrical and Electronics ... 2.9%
Energy ....................... 2.0%
(Center Column)
Energy Sources ............... 3.6%
Financial Services ........... 4.3%
Healthcare ................... 1.0%
Materials .................... 5.2%
Merchandising ................ 6.9%
Multi-Industry ............... 6.8%
(Right Column)
Real Estate .................. 2.6%
Services ..................... 9.5%
Telecommunications ........... 0.7%
Transportation ............... 1.3%
Other net assets ............. 8.7%
-----
Total Net Assets 100.0%
=====
ADR-American Depository Receipt.
*Non-lncome producing securities.
1Restricted Securities.
(D)Aggregate cost for Federal income tax purposes is identical.
The Notes to Financial Statements are an integral part of this statement.
6
<PAGE>
Lexington Global Fund, Inc.
Statement of Assets and Liabilities
June 30, 1995 (unaudited)
<TABLE>
Assets
<S> <C>
Investments in securities, at value (cost $53,135,382) (Note 1) ....................... $56,425,698
Cash .................................................................................. 3,282,678
Receivable for investment securities sold ............................................. 2,366,717
Receivable for shares sold ............................................................ 4,497
Dividends and interest receivable ..................................................... 77,080
Foreign taxes recoverable ............................................................. 142,072
-----------
Total Assets 62,298,742
-----------
Liabilities
Due to Lexington Management Corporation (Note 2) ...................................... 54,439
Payable for investment securities purchased ........................................... 240,481
Payable for shares redeemed ........................................................... 24,237
Unrealized loss on open forward contracts (Note 6) .................................... 71,446
Accrued expenses ...................................................................... 93,304
-----------
Total Liabilities 483,907
-----------
Net Assets (equivalent to $11.37 per share on 5,436,479 shares outstanding) (Note 3) .. $61,814,835
===========
Net Assets consist of:
Capital stock-authorized 1,000,000,000 shares,
$.001 par value per share ........................................................... $ 5,436
Additional paid-in capital ............................................................ 58,917,108
Undistributed net investment income ................................................... 238,473
Accumulated net realized loss on investments and foreign currency holdings ............ (574,612)
Net unrealized appreciation of investments and foreign currency holdings .............. 3,228,430
-----------
$61,814,835
===========
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
7
<PAGE>
(Left Column)
Lexington Global Fund, Inc.
Statement of Operations
Six months ended June 30, 1995 (unaudited)
(Left Column)
Investment Income
Dividends ............................. $ 714,669
Interest .............................. 113,171
----------
827,840
Less: foreign tax expense ............. 67,921
----------
Investment income ............... 759,919
---------
Expenses
Investment advisory fee (Note 2) .... 310,158
Accounting and shareholder services
expenses (Note 2) ................. 52,734
Custodian and transfer agent expenses 68,912
Printing and mailing ................ 32,184
Directors' fees and expenses ........ 6,806
Audit and legal ..................... 18,514
Registration fees ................... 11,606
Computer expense .................... 7,018
Other expenses ...................... 13,514
----------
Total expenses .................... 521,446
---------
Net investment income ........... 238,473
Realized and Unrealized Gain (Loss)
on Investments (Note 4)
Realized loss on investments and foreign currency
transactions (excluding short-term securities):
Proceeds from sales ............. 48,606,468
Cost of securities sold ......... 48,843,160
----------
Net realized loss (236,692)
Unrealized appreciation of investments
and foreign currency holdings:
End of period ..................... 3,228,430
Beginning of period ............... 2,294,656
----------
Change during period ............ 933,774
---------
Net realized and unrealized gain
on investments and foreign
currency holdings ........... 697,082
---------
Increase in Net Assets Resulting
from Operations ..................... $935,555
=========
(Right Column)
Lexington Global Fund, Inc.
Statements of Changes in Net Assets
Six months Year
ended ended
June 30, 1995 December 31,
(unaudited) 1994
------------- ------------
Net investment income $ 238,473 $ 109,218
Net realized gain (loss) from investments
and foreign currency transactions (236,692) 12,203,208
Increase (decrease) in unrealized
appreciation of investments and
foreign currency holdings 933,774 (11,085,660)
----------- -----------
Net increase in net assets
resulting from operations 935,555 1,226,766
Distributions to shareholders from
net realized gains - (12,203,208)
Distributions to shareholders in
excess of net realized gains (Note 1) - (645,274)
Decrease in net assets from capital
share transactions (Note 3) (6,512,969) (8,299,468)
----------- -----------
Net decrease in net assets (5,577,414) (19,921,184)
Net Assets:
Beginning of period 67,392,249 87,313,433
----------- -----------
End of period (including undistributed
net investment income of $238,473
and $0, respectively) (Note 1) $61,814,835 $67,392,249
=========== ===========
The Notes to Financial Statements are an integral part of these statements.
8
<PAGE>
Lexington Global Fund, Inc.
Notes to Financial Statements
June 30, 1995 (unaudited) and December 31, 1994
1. Significant Accounting Policies
Lexington Global Fund, Inc. (the "Fund") is an open end diversified management
investment company registered under the Investment Company Act of 1940, as
amended. The following is a summary of significant accounting policies followed
by the Fund in the preparation of its financial statements:
Securities Security transactions are accounted for on a trade date basis.
Realized gains and losses from security transactions are reported on the
identified cost basis. Investments are stated at market value based on closing
prices reported by the exchange on which the securities are traded on the last
business day of the period or, for over-the-counter securities, at the average
between bid and asked prices, except for short-term securities which are stated
at amortized cost, which approximates market value. Securities for which market
quotations are not readily available and other assets are valued at fair value
as determined by management and approved in good faith 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. Dividends and distributions to shareholders are recorded on
the ex-dividend date. Interest income 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
settled and are reported in the statement of operations.
Distributions Effective January 1, 1993, the Fund adopted Statement of
Positon 93-2: Determination, Disclosure and Financial Statement Presentation of
Income, Capital Gain and Return of Capital Distributions by Investment
Companies. As of December 31, 1994, book and tax basis differences amounting to
$14,279 have been reclassified from additional paid-in capital to accumulated
realized gains on investments. In addition, $158,473 was reclassified from
undistributed net investment income to accumulated net realized gain on
investments. Distributions in excess of net realized gain on investments and
foreign currency holdings reflect temporary book-tax differences arising from
losses resulting from wash sales and the tax treatment of unrealized gains on
forward foreign exchange contracts.
Federal Income Taxes It is the Fund's intention 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 has been made.
2. Investment Advisory Fee and Other Transactions with Affiliate
The Fund pays an investment advisory fee to Lexington Management Corporation
("LMC") at the rate of 1% of average daily net assets. The investment advisory
contract provides that the total annual expenses of the Fund (including
management fees, but excluding interest, taxes, brokerage commissions and
extraordinary expenses) will not exceed the level of expenses which the Fund is
permitted to bear under the most restrictive expense limitation imposed by any
state in which shares of the Fund are offered for sale. No reimbursement was
required for the six months ended June 30, 1995.
The Fund also reimburses LMC for certain expenses, including accounting and
shareholder servicing costs, which are incurred by the Fund, but paid by LMC.
9
<PAGE>
Lexington Global Fund, Inc.
Notes to Financial Statements
June 30, 1995 (unaudited) and December 31, 1994 (continued)
3. Capital Stock
Transactions in capital stock were as follows:
Six months ended
June 30, 1995 Year ended
(unaudited) December 31, 1994
----------------------- -------------------------
Shares Amount Shares Amount
---------- ----------- ---------- ------------
Shares sold............... 275,468 $ 3,022,987 2,384,324 $ 33,526,089
Shares issued to share-
holders on reinvest-
ment of dividends....... - - 1,105,090 12,355,393
---------- ----------- ---------- ------------
275,468 3,022,987 3,489,414 45,881,482
Shares redeemed........... (874,219) (9,535,956) (3,916,491) (54,180,950)
---------- ----------- ---------- ------------
Net decrease.............. (598,751) $(6,512,969) (427,077) $ (8,299,468)
========== =========== ========== ============
4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales of securities for the six months
ended June 30, 1995, excluding short term securities, were $43,510,345 and
$48,606,468, respectively.
At June 30, 1995, 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 $5,020,885 and
aggregate gross unrealized depreciation for all securities and foreign currency
holdings in which there is an excess of tax cost over value amounted to
$1,792,455.
5. Investment 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 the result of the potential inability of counterparties to
meet the terms of their contracts.
6. Forward Foreign Exchange Contracts
At June 30, 1995, the Fund was committed to sell foreign currencies under the
following forward foreign exchange contracts:
Unrealized
Gain
Settlement Contract Contract Current (Loss) at
Currency Date Amount Rate Rate 6/30/95
-------- -------- --------- ------ ------ --------
Danish Krone ........... 10/19/95 2,494,078 5.4200 5.4099 $ (859)
Deutsche Mark .......... 10/18/95 1,155,032 1.3891 1.3765 (7,611)
Deutsche Mark .......... 10/19/95 1,343,022 1.3607 1.3764 11,258
Deutsche Mark .......... 10/19/95 676,560 1.3793 1.3764 (1,034)
Dutch Guilder .......... 10/19/95 1,419,799 1.5450 1.5409 (2,445)
French Franc ........... 10/19/95 2,937,065 4.8860 4.8550 (3,838)
French Franc ........... 11/15/95 5,145,920 5.0544 4.8575 (41,269)
French Franc ........... 11/24/95 4,521,899 5.1513 4.8584 (52,922)
Japanese Yen ........... 10/11/95 166,866,125 82.0400 83.5330 36,353
Japanese Yen ........... 11/15/95 213,115,290 83.7300 83.1293 (18,392)
Swiss Franc ............ 10/19/95 522,924 1.1177 1.1404 9,313
--------
$(71,446)
========
10
<PAGE>
Lexington Global Fund, Inc.
Financial Highlights
Selected per share data for a share outstanding throughout the period:
Six months
ended Year ended December 31,
June 30, 1995 -------------------------------
(unaudited) 1994 1993 1992 1991
----------- ---- ---- ---- ----
Net asset value,
beginning of period ............. $11.17 $13.51 $11.09 $11.57 $10.26
------ ------ ------ ------ ------
Income (loss) from investment
operations:
Net investment income ........... .04 .02 .06 .06 .09
Net realized and unrealized gain
(loss) on investments ......... .16 .23 3.47 (.47) 1.50
------ ------ ------ ------ ------
Total income (loss) from
investment operations ......... .20 .25 3.53 (.41) 1.59
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment
income ........................ - - (.06) (.07) (.08)
Distributions from net realized
capital gains ................. - (2.46) (1.05) - (.20)
Distributions in excess of
net realized capital gains
(Temporary book-tax
difference) ................. - (.13) - - -
------ ------ ------ ------ ------
Total distributions ....... - (2.59) (1.11) (.07) (.28)
------ ------ ------ ------ ------
Net asset value, end of period .... $11.37 $11.17 $13.51 $11.09 $11.57
====== ====== ====== ====== ======
Total return ...................... 3.63%* 1.84% 31.88% (3.55%) 15.55%
Ratio to average net assets
Expenses ........................ 1.68%* 1.61% 1.49% 1.52% 1.57%
Net investment income ........... .77%* .14% .52% .55% .79%
Portfolio turnover ................ 155.09%* 83.40% 84.61% 81.38% 75.71%
Net assets at end of period
(000's omitted) ................. $61,815 $67,392 $87,313 $50,298 $53,886
*Annualized
11
<PAGE>
(Left Column)
Lexington
Global Fund, Inc.
Investment Adviser
- -----------------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Distributor
- -----------------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
---------------------------------------------
All shareholder requests for services of
any kind should be sent to:
Transfer Agent
----------------------------------------
STATE STREET BANK AND
TRUST COMPANY
c/o National Financial Data Services
1004 Baltimore
Kansas City, Missouri 64105
Or call toll free:
Service and Sales: 1-800-526-0056
24 Hour Account Information:
1-800-526-0052
---------------------------------------------
- ------------------------------------------------------------
(800) 526-0052
"LEXLINE"
24 hour toll-free telephone access to your
Lexington Fund account
Price/Yield * Account Balances * Exchanges *
Last Transactions * Total Return * Duplicate Statements
- ------------------------------------------------------------
This report has been prepared for the information of the
shareholders of Lexington Global Fund, Inc. and is
authorized for distribution to the public only if it is
accompanied or preceded by a currently effective prospectus
which sets forth expenses and other material information.
(Right Column)
---------------------------------------
LEXINGTON
---------------------------------------
---------------------------------------
LEXINGTON
GLOBAL
FUND, INC.
(filled box)
Seeks long-term growth of capital,
primarily through investment in
common stocks of companies
domiciled in foreign countries and
the United States.
(filled box)
SEMI-ANNUAL REPORT
JUNE 30, 1995
The Lexington Group
of No Load
Investment Companies
--------------------------------------
