Dear Shareholders:
- -------------------------------------------------------------------------------
The Lexington Global Fund enjoyed a solid second quarter appreciating 5.5%.*
For the first half of 1996 the Fund has returned 11.8%* with net dividends
reinvested. These numbers compare favorably to the average global fund which
achieved returns of 4.6% for the second quarter and 10.6% during the first half,
according to Lipper Analytical Services, Inc. The unmanaged Morgan Stanley
Capital International World Index advanced 2.9% during the second quarter and
7.1% for the first half.
Lexington Global Fund achieved above average returns due to several factors.
Although only 4% of the Fund, Eastern European stocks enjoyed strong returns
during the quarter. Strong growth in the region combined with attractive
valuations is finally drawing investors' attention to the region. The recent
presidential election victory in Russia by President Boris Yeltsin was also key
in improving the outlook for Russia and Eastern Europe as well. Japanese stock
selection was strong as the Fund avoided financial stocks and focused on better
performing cyclicals and smaller growth stocks. Hedging part of the portfolio
back into dollars also proved mildly beneficial. Finally, the U.S. portion of
the portfolio performed well which in part made up for an underweighting of U.S.
equities. On the negative side, Italian equities starred with a 13.4% return for
the quarter as favorable elections led to a rally in stocks and bonds, however,
due to an underweighting in Italy, the Fund only mildly participated.
The U.S. economy clearly accelerated during the second quarter. Employment
growth has been well ahead of expectations and unemployment now stands at only
5.3%. Early signs of wage inflation portends a need for Federal Reserve monetary
tightening. U.S. equities have managed to advance over 10% during the first half
despite 30 year bond yields rising from 6.0% to 7.2% during the same time span.
U.S. equities benefitted from massive inflows into stock mutual funds as $121
billion flowed into U.S. stock funds in the first five months of 1996. The
record for cash inflows was $130 billion but that was for the full year of 1993.
Elsewhere, Japanese growth accelerated sharply as GDP for the second quarter
rose 12.7% which was the highest rate in two decades. The Japanese economy is
finally showing signs of life due to aggressive monetary ease by the Bank of
Japan, heavy fiscal expenditures of $130 billion, and a weak yen which is
stimulating exports. If growth can be maintained Japanese corporate profits will
rise rapidly, however, the Bank of Japan is likely to begin raising interest
rates which would be negative for world liquidity. European growth remains weak
due to double digit unemployment. Companies are following the American example
of restructuring but this costs jobs as they are moved out of high cost
countries such as Germany and into low cost regions such as Eastern Europe.
Despite structural economic weakness, European growth is likely to improve
somewhat in the second half of 1996 due to loose monetary policy by European
central banks, and a better export outlook due to a stronger U.S. economy and
dollar. In conclusion, world growth is likely to accelerate in the second half
of 1996 and into 1997. This may have a negative effect on world equity markets
which have benefitted from powerful monetary stimulus.
1
<PAGE>
The Lexington Global Fund is positioned for stronger economic growth. The Fund
remains heavily underweight U.S. equities as the market is overvalued in a
rising interest rate environment. Cash levels have also been raised to around
10% as a correction should provide some attractive buying opportunities.
European equity selection is geared toward companies restructuring such as
Daimler Benz and Hoechst in Germany. The Fund is slightly overweight Japanese
equities as profits look set for continued strong growth. However, due to strong
returns over the past year, some positions have been sold. In Japan, stock
selection remains biased toward cyclicals and growth stocks as well as weak yen
beneficiaries. Japanese banks continue to be avoided. The emerging markets
portion of the Fund is overweight Eastern Europe as its exciting prospects
continue to unfold. The Asian markets have a low representation due to poor
valuation and interest rates which move in tandem with U.S. rates. Finally, due
to a 10% cash position in U.S. dollars and a strong rally in the U.S. dollar,
the Fund has reduced yen hedged positions to just 7% of the Fund. In the long
term we expect the Japanese yen to continue to weaken currency as massive trade
surpluses continue to shrink.
We appreciate your continued support and 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, 1996 July, 1996 July, 1996
*21.52%, 11.57% and 9.57% are the one and five year and since commencement
(3/27/87) average annual standard total returns, respectively, for the period
ended June 30, 1996. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than at their original cost. Total return represents past performance.
2
<PAGE>
(LEFT COLUMN)
Lexington Global Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
COMMON STOCKS: 84.9%
Australia: 0.7%
44,600 QBE Insurance Group, Ltd. ..................... $ 264,771
----------
Austria: 1.0%
5,400 Creditanstalt-Bankverein ...................... 357,146
----------
Brazil: 0.9%
35,500 Aracruz Celulose S.A. (ADR) ................... 337,250
----------
Canada: 1.4%
12,900 Jetform Corporation2 .......................... 242,681
42,000 Noranda Forest, Inc. .......................... 280,267
----------
522,948
----------
Chile: 2.3%
41,700 Antofagasta Holdings Plc ...................... 209,000
24,000 Banco Osorno y La Union (ADR) ................. 324,000
11,000 Santa Isabel S.A. (ADR) ....................... 305,250
----------
838,250
----------
France: 6.4%
4,810 Alcatel Alsthom ............................... 419,479
1,374 Cetelem ....................................... 308,773
9,700 France Growth Fund, Inc. ...................... 99,425
7,400 Lafarge ....................................... 447,723
8,700 SGS-Thomson Microelectronics N.V.2 ............ 305,856
830 Sidel S.A. .................................... 211,027
2,200 Societe Generale de Surveillance
Holding S.A. "B" ............................ 241,857
3,700 Synthelabo .................................... 312,615
----------
2,346,755
----------
Germany: 2.7%
13,700 Continental AG ................................ 222,143
770 Daimler-Benz AG2 .............................. 411,715
2,250 G.M. Pfaff AG2 ................................ 88,623
8,000 Hoechst AG .................................... 270,991
----------
993,472
----------
Greece: 0.7%
4,800 Ergo Bank S.A. ................................ 263,999
----------
Hong Kong: 0.7%
281,000 National Mutual Asia, Ltd. .................... 246,867
----------
Hungary: 1.4%
22,900 OTP Rt. ....................................... 361,314
3,800 Pick Szeged Rt. ............................... 164,437
----------
525,751
----------
(RIGHT COLUMN)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
Indonesia: 1.2%
198,750 PT Kawasan Industrial Jababeka ................ $ 290,520
70,000 PT Semen Cibinong ............................. 157,997
----------
448,517
----------
Ireland: 2.5%
56,400 Allied Irish Banks Plc ........................ 293,318
232,600 Jefferson Smurfit Group ....................... 623,392
----------
916,710
----------
Israel: 0.4%
1,800 Koor Industries, Ltd.2 ........................ 152,531
----------
Italy: 1.0%
22,300 Bulgari SpA ................................... 355,884
----------
Japan: 17.7%
27,000 Amada Company, Ltd. ............................ 290,693
9,000 Amway Japan, Ltd. ............................. 451,642
6,000 CSK Corporation ............................... 178,467
5,000 H.I.S. Company, Ltd. .......................... 304,288
40,000 Hino Motors, Ltd. ............................. 416,058
80,000 Kawasaki Steel Corporation .................... 288,321
45,000 Komatsu Forklift Company, Ltd. ................ 326,414
5,200 Maruco Company, Ltd. .......................... 467,336
17,000 Matsushita Electric Industrial
Company, Ltd. ............................... 316,423
23,000 Matsushita Refrigeration
Company, Ltd. ............................... 180,055
21,000 Matsuzakaya Company, Ltd. ..................... 256,753
40,000 Mazda Motor2 .................................. 198,905
70,000 Mitsui Engineering & Shipbuilding2 ............ 213,321
110 NTT Data Communications Systems
Corporation ................................. 329,197
14,000 National House Industrial
Corporation ................................. 218,432
40,000 Nippon Chemi-Con Corporation .................. 278,467
79,000 Nippon Steel Corporation ...................... 271,022
13,000 Nitto Denko Corporation ....................... 228,923
4,500 Paris Miki, Inc. .............................. 209,398
2,000 Ryohin Keikaku Company, Ltd. .................. 180,292
6,000 Sony Corporation .............................. 394,708
15,000 Sumitomo Forestry Company ..................... 218,978
21,000 Yamato Kogyo Company, Ltd. .................... 251,004
----------
6,469,097
----------
Malaysia: 0.8%
58,000 Malaysian Assurance Alliance Bhd .............. 307,038
----------
Mexico: 1.3%
52,200 Tubos De Acero De Mexico S.A. (ADR) ........... 492,638
----------
3
<PAGE>
(LEFT COLUMN)
Lexington Global Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
Netherlands: 1.2%
13,120 Philips Electronics N.V. ...................... $ 426,323
----------
New Zealand: 2.1%
296,300 Brierley Investments, Ltd. .................... 280,338
127,200 Carter Holt Harvey, Ltd. ...................... 290,404
61,200 Fisher & Paykel Industries, Ltd. .............. 196,368
----------
767,110
----------
Norway: 2.1%
50,900 Fokus Banken AS2 .............................. 277,196
33,100 Saga Petroleum AS ............................. 486,293
----------
763,489
----------
Philippines: 1.6%
365,000 C & P Homes, Inc. ............................. 317,665
682,500 Filinvest Land, Inc.2 ......................... 280,676
----------
598,341
----------
Poland: 2.8%
9,136 Bank Rozwoju Eksportu S.A. .................... 238,670
11,300 Debica S.A.2 .................................. 274,413
35,961 Elektrim Towarzystwo Handlowe S.A.2 ........... 295,066
1,964 Wedel S.A.2 ................................... 88,162
1,875 Zaklady Piwowarski w Zywcu S.A.2 .............. 144,878
----------
1,041,189
----------
Portugal: 1.2%
16,400 Portugal Telecom S.A.2 ........................ 428,641
----------
Russia: 0.8%
7,200 LUKoil Holdings of Russia (ADR) ............... 303,624
----------
South Africa: 0.6%
5,100 Rustenburg Platinum Holdings, Ltd. ............ 79,540
8,454 Rustenburg Platinum Holdings,
Ltd. (ADR)2 ................................. 131,778
----------
211,318
----------
Spain: 1.8%
8,700 Repsol S.A. ................................... 302,211
18,900 Telefonica de Espana .......................... 347,789
----------
650,000
----------
(RIGHT COLUMN)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
Sweden: 0.5%
3,900 Astra AB ...................................... $ 172,319
----------
Switzerland: 2.9%
370 Nestle S.A. ................................... 422,072
58 Roche Holdings AG ............................. 441,933
205 Union Bank of Switzerland ..................... 200,467
----------
1,064,472
----------
Thailand: 0.7%
45,000 Krung Thai Bank Public Company,
Ltd. ........................................ 210,918
4,000 Total Access Communication Plc1 ............... 34,000
----------
244,918
----------
United Kingdom: 5.5%
245,300 Aegis Group Plc2 .............................. 199,832
19,500 Bluebird Toys Plc ............................. 70,501
64,300 British Telecommunications Plc ................ 345,219
33,100 D.F.S. Furniture Company Plc .................. 284,541
54,600 Grand Metropolitan ............................ 361,766
15,100 RTZ Corporation Plc ........................... 223,294
136,800 Tomkins Plc ................................... 514,761
----------
1,999,914
----------
United States: 18.0%
1,600 AMR Corporation2 .............................. 145,600
2,600 AlliedSignal, Inc. ............................ 148,525
2,400 Aluminum Company of America ................... 137,700
3,200 American Express Company ...................... 142,800
1,600 American International Group .................. 157,800
900 BJ Services Company2 .......................... 31,612
2,700 BMC Software, Inc. ............................ 160,988
2,100 Becton, Dickinson & Company ................... 168,525
1,900 Boeing Company ................................ 165,537
3,200 Boise Cascade Corporation ..................... 117,200
4,100 Borders Group, Inc.2 .......................... 132,225
2,900 Boston Scientific Corporation2 ................ 130,500
3,100 Cisco Systems, Inc.2 .......................... 175,731
1,300 Citicorp ...................................... 107,413
2,000 Colgate-Palmolive Company ..................... 169,500
1,500 Computer Associates International,
Inc. ........................................ 106,875
4,400 Conseco, Inc. ................................. 176,000
3,000 Crown Cork & Seal Company, Inc. ............... 135,000
2,600 Diamond Offshore Drilling, Inc.2 .............. 148,850
4
<PAGE>
(LEFT COLUMN)
Lexington Global Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- -------------------------------------------------------------------------------
United States (continued)
3,400 Dover Corporation ............................. $ 156,825
4,900 Ecolab, Inc. .................................. 161,700
2,300 Eli Lilly & Company ........................... 149,500
2,000 Fluor Corporation ............................. 130,750
5,700 Gap, Inc. ..................................... 183,113
2,100 Hershey Foods Corporation ..................... 154,087
3,000 Honeywell, Inc. ............................... 163,500
2,000 Intel Corporation ............................. 146,875
2,800 Johnson & Johnson ............................. 138,600
2,000 Lockheed Martin Corporation ................... 168,000
1,300 Mobil Corporation ............................. 145,763
1,900 NationsBank Corporation ....................... 156,987
1,400 Nike, Inc. .................................... 143,850
5,000 PepsiCo, Inc. ................................. 176,875
1,600 Procter & Gamble Company ...................... 145,000
2,300 Ralston-Ralston Purina Group .................. 147,488
2,300 Raytheon Company .............................. 118,738
5,400 Safeway, Inc.2 ................................ 178,200
1,800 Schlumberger, Ltd. ............................ 151,650
2,700 Service Corporation International ............. 155,250
11,300 Teleport Communications Group,
Inc.2 ....................................... 214,700
3,500 Union Carbide Corporation ..................... 139,125
4,000 WMX Technologies, Inc. ........................ 131,000
3,000 Warner-Lambert Company ........................ 165,000
2,000 Willamette Industries, Inc. ................... 118,750
2,000 Williams Companies, Inc. ...................... 99,000
----------
6,598,707
----------
Total Common Stocks
(cost $27,630,125) ......................... $31,109,989
----------
(RIGHT COLUMN)
Number of
Shares of
Principal Value
Amount Security (Note 1)
- -------------------------------------------------------------------------------
Preferred Stock: 3.6%
Austria: 0.8%
7,000 Bank Austria AG .............................. 289,925
----------
Germany: 2.8%
2,050 SAP AG ....................................... 303,738
844 Sto AG ....................................... 421,085
6,400 Fielmann AG2 ................................. 306,703
----------
1,031,526
----------
Total Preferred Stock
(cost $1,343,482) .......................... 1,321,451
----------
Short Term Investments: 10.9%
$4,000,000 Federal Home Loan Bank
5.27%, due 7/05/96
(cost $3,997,658) .......................... 3,997,658
----------
Total Investments: 99.4%
(cost $32,971,265\'86) (Note 1) ............ 36,429,098
Other assets in excess of liabilites:
0.6% ....................................... 203,283
----------
Total Net Assets: 100.0%
(equivalent to $12.65 per share on
2,896,101 shares outstanding) .............. 36,632,381
==========
1Restricted securities (Note 7).
2Non-income producing securities.
ADR - American Depository Receipt.
+Aggregate cost for Federal income tax purposes is identical.
----------------------------------
At June 30, 1996, the composition of the Fund's net assets by industry was as
follows:
Col. 1
Banking ................... 8.6%
Capital Equipment ......... 7.9%
Construction & Housing .... 1.5%
Consumer-Durable Goods .... 8.2%
Consumer-Non Durable
Goods ................... 7.2%
Electrical And Electronics 5.4%
Energy Sources ............ 4.1%
Col. 2
Financial Services ........ 6.0%
Health & Personal Care .... 4.6%
Materials ................. 14.2%
Merchandising ............. 5.5%
Metals And Mining ......... 0.2%
Multi-Industry ............ 3.8%
Col. 3
Real Estate ............... 1.6%
Services .................. 4.8%
Telecommunications ........ 3.7%
Trade ..................... 0.8%
Transportation ............ 0.4%
Other assets in excess of
liabilities ............. 11.5%
-----
100.0%
The Notes to Financial Statements are an integral part of this statement.
5
<PAGE>
Lexington Global Fund, Inc.
Statement of Assets and Liabilities
June 30, 1996 (unaudited)
Assets
Investments, at value (cost $32,971,265) (Note 1) ............... $36,429,098
Cash ............................................................ 57,485
Receivable for investment securities sold ....................... 360,114
Receivable for shares sold ...................................... 6,546
Dividends and interest receivable ............................... 70,929
Foreign taxes recoverable ....................................... 49,210
Unrealized gain on open forward contracts (Note 6) .............. 103,378
------------
Total Assets .............................................. 37,076,760
------------
Liabilities
Due to Lexington Management Corporation (Note 2) ................ 28,787
Payable for investment securities purchased ..................... 368,199
Payable for shares redeemed ..................................... 1,326
Accrued expenses ................................................ 46,067
------------
Total Liabilities ......................................... 444,379
------------
Net Assets (equivalent to $12.65 per share on
2,896,101 shares outstanding) (Note 3) ....................... $36,632,381
============
Net Assets consist of:
Capital stock-authorized 1,000,000,000 shares,
$.001 par value per share ....................................... $ 2,896
Additional paid-in capital (Note 1) ............................. 28,564,278
Distributions in excess of net investment income (Note 1) ....... (472,918)
Accumulated net realized gain on investments and
foreign currency holdings (Note 1) ............................ 4,978,970
Net unrealized appreciation of investments and foreign
currency holdings ............................................. 3,559,155
------------
Total Net Assets ................................................ $36,632,381
============
The Notes to Financial Statements are an integral part of this statement.
6
<PAGE>
Lexington Global Fund, Inc.
Statement of Operations
Six months ended June 30, 1996 (unaudited)
Investment Income
Dividends ...................................... $ 442,491
Interest ....................................... 68,194
-----------
510,685
Less: foreign tax expense ...................... 49,301
-----------
Total Investment income $ 461,384
Expenses
Investment advisory fee (Note 2) ............. 206,850
Custodian fees ............................... 65,913
Transfer agent and shareholder
servicing expense (Note 2) ................. 32,836
Printing and mailing expenses ................ 25,469
Accounting expenses (Note 2) ................. 18,314
Professional fees ............................ 14,128
Registration fees ............................ 12,319
Directors' fees .............................. 6,405
Other expenses ............................... 17,359
-----------
Total expenses ........................... 399,593
----------
Net investment income .............. 61,791
Realized and Unrealized Gain (Loss) on Investments (Note 4)
Net realized gain on:
Investments ................................ 3,943,527
Foreign currency transactions .............. 1,004,787
-----------
Net realized gain ........................ 4,948,314
Net change in unrealized appreciation on:
Investments ................................ (455,122)
Foreign currency translations of other
assets and liabilities ................... 105,434
-----------
Net change in unrealized appreciation ...... (349,688)
----------
Net realized and unrealized gain ......... 4,598,626
----------
Increase in Net Assets Resulting from Operations $4,660,417
==========
The Notes to Financial Statements are an integral part of this statement.
7
<PAGE>
Lexington Global Fund, Inc.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six months
ended Year ended
June, 30, 1996 December 31,
(unaudited) 1995
-------------- ------------
<S> <C> <C>
Net investment income ................................................................. $ 61,791 $ 280,577
Net realized gain from investments and foreign currency transactions .................. 4,948,314 3,775,954
Change in unrealized appreciation of investments and foreign currency translations .... (349,688) 1,614,187
----------- -----------
Increase in net assets resulting from operations .................................. 4,660,417 5,670,718
Distributions to shareholders from net investment income .............................. - (1,284,116)
Distributions to shareholders in excess of net investment income (Note 1) ............. - (576,895)
Distributions to shareholders from net realized gains ................................. - (2,751,490)
Decrease in net assets from capital share transactions (Note 3) ....................... (21,642,242) (14,836,260)
----------- -----------
Net decrease in net assets ........................................................ (16,981,825) (13,778,043)
Net Assets:
Beginning of period ................................................................. 53,614,206 67,392,249
----------- -----------
End of period ....................................................................... $36,632,381 $53,614,206
=========== ===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
8
<PAGE>
Lexington Global Fund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995
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 Fund's investment objective is to seek long-term growth of capital
primarily through investment in common stock of companies domiciled in foreign
countries and the United States. The following is a summary of significant
accounting policies followed by the Fund in the preparation of its financial
statements:
Investments Security transactions are accounted for on a trade date basis.
Realized gains and losses from investment transactions are reported on the
identified cost basis. Securities traded on a recognized stock exchange are
valued at the last sales price reported by the exchange on which the securities
are traded. If no sales price is recorded, the mean between the last bid and
asked prices is used. Securities traded on the over-the-counter market are
valued at the mean between the last current bid and asked price. Short-term
securities having maturity of 60 days or less are stated at amortized cost,
which approximates market value. Securities for which market quotations are not
readily available and other assets are valued by Fund management in good faith
under the direction of the Fund's Board of Directors. All investments quoted in
foreign currencies are valued in U.S. dollars on the basis of the foreign
currency exchange rates prevailing at the close of business. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income, adjusted for amortization of premiums and accretion of discounts, is
accrued as earned.
Foreign Currency Transactions Foreign currencies (and receivables and
payables denominated in foreign currencies) are translated into U.S. dollar
amounts at current exchange rates. Translation gains or losses resulting from
changes in exchange rates and realized gains and losses on the settlement of
foreign currency transactions are reported in the statement of operations. In
addition, the Fund may enter into forward foreign exchange contracts in order to
hedge against foreign currency risk in the purchase or sale of securities
denominated in foreign currency. The Fund may also enter into such contracts to
hedge against changes in foreign currency exchange rates on portfolio positions.
These contracts are marked to market daily, by recognizing the difference
between the contract exchange rate and the current market rate as unrealized
gains or losses. Realized gains or losses are recognized when contracts are
closed and are reported in the statement of operations.
Federal Income Taxes It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to "regulated investment companies" and
to distribute all of its taxable income to its shareholders. Therefore, no
provision for Federal income taxes is required.
Distributions The character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. At December 31, 1995 reclassifications
were made to the Fund's capital accounts to reflect permanent book/tax
differences and income and gains available for distributions under income tax
regulations. Net investment income, net realized gains and net assets were not
affected by this change.
2. Investment Advisory Fee and Other Transactions with Affiliate
The Fund pays an investment advisory fee to Lexington Management Corporation
("LMC") at an annual rate of 1.00% of the Fund's average daily net assets. The
investment advisory contract provides that the total annual expenses of the Fund
(including management fees, but excluding interest, taxes, brokerage 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, 1996.
The Fund also reimbursed LMC for certain expenses, including accounting and
shareholder servicing costs of $37,639 which are incurred by the Fund, but paid
by LMC.
9
<PAGE>
Lexington Global Fund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995 (continued)
3. Capital Stock
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Six months ended
June 30, 1996 Year ended
(unaudited) December 31, 1995
--------------------------------------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold 162,489 $ 1,941,882 357,460 $ 4,001,451
Shares issued to shareholders on reinvest-
ment of dividends - - 326,079 3,690,927
---------- ------------ ---------- ------------
162,489 1,941,882 683,539 7,692,378
Shares redeemed (2,000,791) (23,584,124) (1,984,366) (22,528,638)
---------- ------------ ---------- ------------
Net decrease (1,838,302) $(21,642,242) (1,300,827) $(14,836,260)
========== ============ ========== ============
</TABLE>
4. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales of securities for the six
months ended June 30, 1996, excluding short-term securities, were $ 22,213,612
and $ 47,116,865 respectively.
At June 30, 1996, the 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
$4,443,783 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $884,628.
5. Investment and Concentration Risks
The Fund's investments in foreign securities may involve risks not present
in domestic investments. Since foreign securities may be denominated in a
foreign currency and involve settlement and pay interest or dividends in foreign
currencies, changes in the relationship of these foreign currencies to the U.S.
dollar can significantly affect the value of the investments and earnings of the
Fund. Foreign investments may also subject the Fund to foreign government
exchange restrictions, expropriation, taxation or other political, social or
economic developments, all of which could affect the market and/or credit risk
of the investments.
In addition to the risks described above, risks may arise from forward
foreign currency contracts as a result of the potential inability of
counterparties to meet the terms of their contracts.
6. Forward Foreign Exchange Contracts
At June 30, 1996, the Fund was committed to sell foreign currencies under
the following forward foreign exchange contracts:
<TABLE>
<CAPTION>
Unrealized
Settlement Contract Contract Current Gain at
Security Date Amount Rate Rate 6/30/96
-------- ---------- -------- -------- ------- -----------
<S> <C> <C> <C> <C> <C>
Japanese Yen ..... 07/08/96 $1,131,022 102.915 109.68 $ 69,761
Japanese Yen ..... 10/11/96 1,463,766 105.695 108.16 33,360
Japanese Yen ..... 01/06/96 76,521 106.460 106.82 257
--------
$103,378
========
</TABLE>
7. Restricted Securities
The following security was purchased under Rule 144A of the Securities Act
of 1933 and, unless registered under the Act or exempted from registration, may
be sold only to qualified institutional investors.
Acquisition Average Cost Market % of Net
Security Date Per Share Value Assets
- -------- ----------- ------------ ------ --------
Total Access
Communications Plc ........ 9/28/95 $6.52 $34,000 0.09%
Pursuant to guidelines adopted by the Fund's Board of Directors, these
unregistered securities have been deemed to be illiquid. The Fund currently
limits investment in illiquid securities to 15% of the Fund's net assets, at
market value, at the time of purchase, but, pursuant to state regulations, the
Fund's investment in such securities is effectively limited to 10%.
10
<PAGE>
Lexington Global 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, 1996 ----------------------------------------
(unaudited) 1995 1994 1993 1992
------------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ................ $11.32 $11.17 $13.51 $11.09 $11.57
------ ------ ------ ------ ------
Income from investment operations:
Net investment income .............. (.05) .09 .02 .06 .06
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions .... 1.38 1.10 .23 3.47 (.47)
------ ------ ------ ------ ------
Total from investment operations
income (loss) .................... 1.33 1.19 .25 3.53 (.41)
------ ------ ------ ------ ------
Less distributions:
Distributions from net investment
income ........................... - (.29) - (.06) (.07)
Distributions in excess of
net investment income
(temporary book-tax
difference) ...................... - (.13) - - -
Distributions from net realized
gains ............................ - (.62) (2.46) (1.05) -
Distributions in excess of
net realized gains
(temporary book-tax
difference) ...................... - - (.13) - -
------ ------ ------ ------ ------
Total distributions .......... - (1.04) (2.59) (1.11) (.07)
------ ------ ------ ------ ------
Net asset value, end of period ....... $12.65 $11.32 $11.17 $13.51 $11.09
====== ====== ====== ====== ======
Total return ......................... 25.10%* 10.69% 1.84% 31.88% (3.55%)
Ratio to average net assets:
Expenses ........................... 1.93%* 1.67% 1.61% 1.49% 1.52%
Net investment income .............. .30%* .48% .14% .52% .55%
Portfolio turnover rate .............. 114.66%* 166.35% 83.40% 84.61% 81.38%
Average commision paid on
equity security transactions** ..... $0.03 - - - -
Net assets at end of period .......... $36,632 $53,614 $67,392 $87,313 $50,298
<FN>
*Annualized
**In accordance with recent SEC disclosure guidelines, average commissions are
calculated for the current period and not for prior periods.
</FN>
</TABLE>
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, 1996
The Lexington Group
of No Load
Investment Companies
- -----------------------------------------------------------
