DEAR SHAREHOLDERS:
- --------------------------------------------------------------------------------
The Lexington Global Corporate Leaders Fund declined .9%* during the second
quarter. The Fund has advanced 13.4%* through the first half of 1998. According
to Lipper Analytical Services, Inc., the average global fund returned .3% and
14.0% for the last three and six month periods, respectively. The unmanaged
Morgan Stanley World Index appreciated 2.0% for the latest quarter and 16.6%
during the first six months of the year.
Underperformance can be attributed to three primary factors. The United
Kingdom in which the Fund is overweight, declined 2% as earnings disappointments
accelerated and inflation fears forced the Bank of England to raise base rates.
U.S. equities advanced 3.3%, however, on a relative basis the Fund is
underweight U.S. stocks. Finally, large company stocks continue to outperform
small company equities despite the better value offered by smaller stocks.
Shock waves from Asia continue to be felt around the world. Producers of
goods and commodities have suffered while consumers have benefited. The U.S.
economy is finally showing signs of slowing, particularly in the manufacturing
sector. However, due to low unemployment, rising stock prices and low interest
rates, the American consumer remains strong. Earnings growth has weakened with
earnings now growing at a low single digit rate. U.S. profits are likely to
remain under pressure due to a strong dollar, rising wage pressure, and
weakening demand overseas. Most companies are unable to pass on rising cost
pressures by raising prices. European economies have generally improved although
it remains a mixed bag. The U.K. appears headed for a recession. The yield curve
is inverted due to continued interest rate hikes by the Bank of England. A
strong currency has damaged the manufacturing sector, which is now in recession.
Due to low unemployment the consumer is holding up the front end of the economy
although recent retail sales suggest a slowing here as well.
On the European continent the news is somewhat better. Unemployment remains
high but is finally showing signs of improving. Consumption has also picked up
perhaps due to rising stock prices and falling unemployment. However, the export
sector, which has been the driver of most of the growth, may now be catching
Asian flu. Europe is likely to have its growth recovery muted due to weakening
demand elsewhere, particularly Asia and other emerging regions. Asia remains and
will continue to be the primary trouble spot. Many Asian economies have seen
demand collapse. GDP is falling at a double digit pace in places like Indonesia.
A solution will be difficult to find and will take considerable time. Certainly,
Japan remains an important variable. The Japanese economy is suffering its worst
recession since the Second World War. The economy is fundamentally sick due to
the massive bad loans held by Japanese banks. Recent signs of greater political
resolve to address the economic problems are cause for some optimism. However, a
solution will not reverse trends overnight. As evidenced by the U.S. in the
early 1990s, it can take several years to recover from a banking problem.
Japan's problems go beyond the banks and are more severe than any the U.S. had
to face. World growth is decelerating and this trend should continue. Interest
rates are likely to stay low while corporate profits face increasing pressure.
The focus on stock selection remains with companies which are able to meet
investor earnings expectations. Defensive issues such as drugs, and food will be
less affected by global economic slowing than manufacturing sectors. Europe
remains attractive due to corporate restructuring; however, given strong price
moves and potentially slower economic activity the risk is rising. Given the
poor profit outlook for U.S. equities, an underweight position will be
maintained. Finally, despite its economic woes, the best value can be found in
Japan. The focus in Japan remains on cash rich companies trading at deep
discounts to book value. Although the Japanese economy is unlikely to recover
soon, current prices of some equities suggest much of the bad news is
discounted. Further positive political developments or news of serious corporate
restructuring could provide substantial returns in selected cheap Japanese
stocks.
Sincerely,
/s/Richard T. Saler /s/Alan H. Wapnick /s/Robert M. DeMichele
- ------------------- ------------------ ----------------------
Richard T. Saler Alan H. Wapnick Robert M. DeMichele
Portfolio Manager Portfolio Manager President
August, 1998 August, 1998 August, 1998
* 8.10%, 12.68% and 9.77% are the one, five and ten year average annual standard
total returns, respectively, for the period ended June 30, 1998. 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.
1
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1998 (unaudited)
NUMBER
OF VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS: 89.7%
AUSTRALIA: 1.1%
124,000 Telstra Corporation, Ltd ..................... $ 317,897
-----------
AUSTRIA: 2.7%
3,810 Boehler - Uddeholm AG ........................ 251,720
2,000 Wienerberger Baustoffindustrie AG ............ 483,817
-----------
735,537
-----------
BERMUDA: 0.4%
1,400 EXCEL, Ltd ................................... 108,938
-----------
CANADA: 4.6%
5,200 Hudson's Bay Company ......................... 119,167
21,900 Imax Corporation1 ............................ 496,856
7,800 Loewen Group, Inc ............................ 210,600
49,715 Yogen Fruz World-Wide, Inc.1 ................. 442,875
-----------
1,269,498
-----------
FRANCE: 9.5%
1,940 Alcatel Alsthom .............................. 394,993
4,870 Axa-UAP ...................................... 547,731
2,550 Banque Nationale de Paris .................... 208,352
7,800 Elf Aquitaine S.A. (ADR) ..................... 553,800
5,300 GrandVision S.A .............................. 176,198
3,720 Sidel S.A .................................... 270,723
2,060 Vivendi ...................................... 439,869
-----------
2,591,666
-----------
GERMANY: 6.7%
640 Allianz AG ................................... 213,270
7,000 Deutsche Bank AG ............................. 591,789
11,400 Hoechst AG ................................... 573,147
1,800 Rhoen-Klinikum AG-Vorzugsakt ................. 178,002
3,900 VEBA AG ...................................... 262,192
-----------
1,818,400
-----------
GREECE: 2.0%
2,200 Alpha Credit Bank ............................ 178,332
10,000 Hellenic Tellecommunication
Organization S.A ........................... 256,343
18,940 Michaniki S.A ................................ 99,592
-----------
534,267
-----------
HONG KONG: 0.4%
247,000 JCG Holdings, Ltd ............................ 68,535
69,000 Mandarin Oriental International, Ltd ......... 39,330
-----------
107,865
-----------
IRELAND: 3.8%
16,800 Allied Irish Banks Plc ....................... 242,534
9,100 Elan Corporation Plc1 ........................ 585,244
28,000 Ryanair Holdings Plc1 ........................ 198,401
-----------
1,026,179
-----------
ISRAEL: 1.8%
13,600 Teva Pharmaceutical
Industries, Ltd. (ADR) ..................... 478,550
-----------
ITALY: 0.9%
33,400 Telecom Italia SpA ........................... 244,024
-----------
JAPAN: 5.3%
6,600 Amway Japan, Ltd ............................. 69,907
27,000 Asahi Diamond Industries Company, Ltd. ....... 121,591
3,600 Benesse Corporation .......................... 125,806
25,000 Bunka Shutter Company, Ltd ................... 69,352
5,800 Doutor Coffee Company, Ltd ................... 147,941
13,000 Mos Food Service, Inc ........................ 154,556
34,000 National House Industrial Company, Ltd. ...... 260,417
3,700 Paris Miki, Inc .............................. 48,548
43,000 Sakura Bank, Ltd ............................. 111,539
48,000 Snow Brand Milk Products Company, Ltd. ....... 145,261
3,700 Tiemco, Ltd .................................. 34,658
8,600 York-Benimaru Company, Ltd ................... 161,732
-----------
1,451,308
-----------
NETHERLANDS: 1.0%
3,400 Unilever NV .................................. 268,388
-----------
NORWAY: 2.0%
20,700 Saga Petroleum AS ............................ 318,315
25,100 Storebrand ASA1 .............................. 222,427
-----------
540,742
-----------
PHILIPPINES: 0.2%
1,016,500 C & P Homes, Inc.1 ........................... 51,191
-----------
2
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1998 (unaudited) (continued)
NUMBER
OF VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------
PORTUGAL: 0.8%
8,400 Espirito Santo Financial Group (ADR) ......... $ 204,750
-----------
SINGAPORE: 0.6%
48,000 Cerebos Pacific, Ltd ......................... 62,504
35,000 Keppel Fels, Ltd ............................. 104,618
-----------
167,122
-----------
SWEDEN: 3.5%
32,500 Castellum AB ................................. 383,075
8,900 Skandinaviska Enskilda Banken ................ 152,333
125,539 Swedish Match AB ............................. 417,154
-----------
952,562
-----------
SWITZERLAND: 5.7%
154 Nestle AG .................................... 329,562
328 Novartis AG .................................. 545,798
300 Rentenanstalt-Societe Suisse
Assurances Vie ............................. 253,954
22 Roche Holding AG ............................. 216,039
212 Saurer AG1 ................................... 216,639
-----------
1,561,992
-----------
UNITED KINGDOM: 15.5%
207,100 Aegis Group Plc .............................. 333,452
20,500 Cadbury Schweppes Plc ........................ 317,244
26,900 Capita Group Plc ............................. 231,370
23,600 D.F.S. Furniture Company Plc ................. 77,769
112,000 George Wimpey Plc ............................ 217,706
10,200 Glaxo Welcome Plc ............................ 306,166
18,400 Harvey Nichols Plc ........................... 72,299
11,700 J.D. Wetherspoon Plc ......................... 57,100
14,000 Oriflame International S.A ................... 103,948
8,300 PizzaExpress Plc ............................. 118,682
54,500 Polypipe Plc ................................. 132,308
24,219 Provident Financial Plc ...................... 379,848
40,600 Regent Inns Plc .............................. 128,031
30,000 Rio Tinto Plc ................................ 337,871
17,800 Royal Bank of Scotland Group Plc ............. 308,873
36,100 SmithKline Beecham Plc ....................... 440,603
47,100 Tomkins Plc .................................. 255,602
32,500 Vodafone Group Plc ........................... 412,391
-----------
4,231,263
-----------
UNITED STATES: 21.2%
4,400 Ace, Ltd ..................................... 171,600
3,300 BJ Services Company1 ......................... 95,906
1,400 Bristol-Myers Squibb Company ................. 160,912
2,100 Cardinal Health, Inc ......................... 196,875
4,700 Caribiner International, Inc.1 ............... 82,250
5,400 Comcast Corporation .......................... 219,206
1,900 Computer Associates International, Inc. ...... 105,569
2,800 Costco Companies, Inc.1 ...................... 176,662
3,200 Cymer, Inc.1 ................................. 51,800
4,300 Ecolab, Inc. ................................. 133,300
5,400 EMC Corporation1 ............................. 241,988
1,500 Emerson Electric Company ..................... 90,563
1,500 Exxon Corporation ............................ 106,969
2,200 Federal National Mortgage Association ........ 133,650
2,300 Fort James Corporation ....................... 102,350
1,800 Gannett Company, Inc ......................... 127,912
3,600 Gap, Inc ..................................... 221,850
6,400 Global Industries, Ltd.1 ..................... 107,800
1,700 Home Depot, Inc .............................. 141,206
2,450 Ingersoll-Rand Company ....................... 107,953
2,000 International Paper Company .................. 86,000
2,850 Marsh & McLennan Companies, Inc .............. 172,247
2,600 Martin Marietta Materials, Inc ............... 117,000
2,400 Medtronic, Inc ............................... 153,000
2,800 NAC Re Corporation ........................... 149,450
2,200 NationsBank Corporation ...................... 168,300
2,100 Network Associates, Inc.1 .................... 100,472
4,900 Norwest Corporation .......................... 183,138
2,900 PepsiCo, Inc ................................. 119,444
900 Pfizer, Inc .................................. 97,819
2,500 Pitney Bowes, Inc ............................ 120,312
1,500 Procter & Gamble Company ..................... 136,594
3,900 Safeway, Inc.1 ............................... 158,681
2,000 Sara Lee Corporation ......................... 111,875
2,500 Sealed Air Corporation1 ...................... 91,875
5,200 Sungard Data Systems, Inc.1 .................. 199,550
4,800 The TJX Companies, Inc ....................... 115,800
1,400 The Walt Disney Company ...................... 147,087
4,700 The Williams Companies. Inc .................. 158,625
4,800 Tyco International, Ltd ...................... 302,400
2,100 Union Planters Corporation ................... 123,506
-----------
5,789,496
-----------
TOTAL COMMON STOCKS
(cost $21,188,731) ......................... 24,451,635
-----------
3
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1998 (unaudited) (continued)
NUMBER
OF VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------
PREFERRED STOCKS: 1.7%
GERMANY: 0.8%
584 Sto AG ....................................... $ 218,713
-----------
ITALY: 0.9%
104,000 Fiat SpA ..................................... 256,321
-----------
TOTAL PREFERRED STOCKS
(cost $581,620) ............................ 475,034
-----------
PRINCIPAL
AMOUNT
- ----------
U.S. GOVERNMENT OBLIGATIONS: 7.2%
$2,059,000 U.S. Strip Bond, 0.00%, due 02/15/23 ......... 508,635
6,000,000 U.S. Strip Bond, 0.00%, due 05/15/23 ......... 1,461,300
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(cost $1,877,838) .......................... 1,969,935
-----------
TOTAL INVESTMENTS: 98.6%
(cost $23,648,189+) (Note 1) ............... $26,896,604
Other assets in excess of
liabilities: 1.4% .......................... 350,574
-----------
TOTAL NET ASSETS: 100.0%
(equivalent to $12.01 per share on
2,268,249 shares outstanding) .............. $27,247,178
===========
1 Non-income producing security.
ADR - American Depository Receipt.
+ Aggregate cost for Federal income tax purposes is $23,804,872.
- --------------------------------------------------------------------------------
At June 30, 1998, the composition of the Fund's net assets by industry was as
follows:
Banking............................... 7.8%
Capital Equipment..................... 6.3
Construction & Housing ............... 2.6
Consumer-Durable Goods................ 1.9
Consumer-Non durable Goods............ 8.9
Electrical & Electronics ............. 1.8
Energy Sources........................ 4.5
Financial Services.................... 9.6
Health & Personal Care................ 12.3
Materials............................. 7.5
Merchandising......................... 6.9
Multi-Industry........................ 2.0
Real Estate........................... 1.6
Services.............................. 11.1
Telecommunications.................... 5.9
Transportation........................ 0.7
U.S Government Obligations............ 7.2
Other Assets ......................... 1.4
-----
Total Net Assets...................... 100.0%
=====
The Notes to Financial Statements are an integral part of this statement.
4
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998 (unaudited)
ASSETS
Investments, at value (cost $23,648,189) (Note 1) ............ $26,896,604
Cash ......................................................... 461,158
Receivable for investment securities sold .................... 362,800
Dividends and interest receivable ............................ 28,384
Foreign taxes recoverable .................................... 16,069
Unrealized gain on open forward contracts (Note 6) ........... 7,488
-----------
Total Assets ............................................. 27,772,503
-----------
LIABILITIES
Due to Lexington Management Corporation (Note 2) ............. 22,566
Payable for investment securities purchased .................. 406,797
Payable for shares redeemed .................................. 70,859
Accrued expenses ............................................. 25,103
-----------
Total Liabilities ........................................ 525,325
-----------
NET ASSETS (equivalent to $12.01 per share on
2,268,249 shares outstanding) (Note 3) ................... $27,247,178
===========
NET ASSETS consist of:
Capital stock--authorized 1,000,000,000
shares, $.001 par value per share ......................... $ 2,268
Additional paid-in capital ................................... 20,559,164
Undistributed net investment income .......................... 43,004
Accumulated net realized gain on investments
and foreign currency holdings ............................ 3,387,794
Unrealized appreciation on investments
and foreign currency holdings ............................ 3,254,948
-----------
TOTAL NET ASSETS ......................................... $27,247,178
===========
The Notes to Financial Statements are an integral part of this statement.
5
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
STATEMENT OF OPERATIONS
Six months ended June 30, 1998 (unaudited)
INVESTMENT INCOME
Dividends ........................................ $ 337,558
Interest ......................................... 88,840
----------
426,398
Less: foreign tax expense ........................ 40,546
----------
Total investment income ....................... $ 385,852
EXPENSES
Investment advisory fee (Note 2) .............. 159,117
Custodian expenses ............................ 40,001
Transfer agent and shareholder
servicing expenses (Note 2) ................ 27,346
Printing and mailing expenses ................. 20,559
Accounting expenses (Note 2) .................. 17,245
Professional fees ............................. 11,606
Registration fees ............................. 9,323
Directors' fees and expenses .................. 8,581
Computer processing fees ...................... 3,423
Other expenses ................................ 7,455
----------
Total expenses ................................ 304,656
----------
Net investment income ......................... 81,196
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 4)
Net realized gain on:
Investments .................................... 3,663,010
Foreign currency transactions .................. 97,333
----------
Net realized gain ............................ 3,760,343
Net change in unrealized appreciation on:
Investments .................................... 1,041,004
Foreign currency translation of other
assets and liabilities ....................... (117,944)
----------
Net change in unrealized appreciation .......... 923,060
----------
Net realized and unrealized gain ................. 4,683,403
----------
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................ $4,764,599
==========
The Notes to Financial Statements are an integral part of this statement.
6
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED
1998 DECEMBER 31,
(UNAUDITED) 1997
------------ ------------
<S> <C> <C>
Net investment income ...................................................................... $ 81,196 $ 86,901
Net realized gain from investments and foreign currency transactions ....................... 3,760,343 4,064,311
Net change in unrealized appreciation of investments and
foreign currency translation ............................................................. 923,060 (1,492,431)
------------ ------------
Increase in net assets resulting from operations ..................................... 4,764,599 2,658,781
Distributions to shareholders from net investment income ................................... -- (262,905)
Distributions to shareholders from net realized gains from security transactions ........... --
(4,011,033)
Decrease in net assets from capital share transactions (Note 3) ............................ (12,602,716) (523,031)
------------ ------------
Net decrease in net assets ........................................................... (7,838,117) (2,138,188)
NET ASSETS:
Beginning of period ...................................................................... 35,085,295 37,223,483
------------ ------------
End of period (including undistributed net investment income of
$43,004 and distributions in excess of net investment income of
$38,192, 1998 and 1997, respectively) .................................................. $ 27,247,178 $ 35,085,295
============ ============
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
7
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998 (unaudited) and December 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
Lexington Global Corporate Leaders Fund, Inc. (the "Fund") (formerly known
as Lexington Global Fund, Inc.) 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 Securities transactions are accounted for on a trade date
basis. Realized gains and losses from investment transactions are reported on
the identified cost basis. Securities traded on a recognized stock exchange are
valued at the last sales price reported by the exchange on which the securities
are traded. If no sales price is recorded, the mean between the last bid and
asked prices is used. Securities traded on the over-the-counter market are
valued at the mean between the last current bid and asked prices. Short-term
securities having a maturity of 60 days or less are stated at amortized cost,
which approximates market value. Securities for which market quotations are not
readily available and other assets are valued by Fund management in good faith
under the direction of the Fund's Board of Directors. All investments quoted in
foreign currencies are valued in U.S. dollars on the basis of the foreign
currency exchange rates prevailing at the close of business. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income, adjusted for amortization of premiums and accretion of discounts, is
accrued as earned.
FOREIGN CURRENCY TRANSACTIONS Foreign currencies (and receivables and
payables denominated in foreign currencies) are translated into U.S. dollar
amounts at current exchange rates. Translation gains or losses resulting from
changes in exchange rates and realized gains and losses on the settlement of
foreign currency transactions are reported in the statement of operations. In
addition, the Fund may enter into forward foreign exchange contracts in order to
hedge against foreign currency risk in the purchase or sale of securities
denominated in foreign currency. The Fund may also enter into such contracts to
hedge against changes in foreign currency exchange rates on portfolio positions.
These contracts are marked to market daily, by recognizing the difference
between the contract exchange rate and the current market rate as unrealized
gains or losses. Realized gains or losses are recognized when contracts are
closed and are reported in the statement of operations.
FEDERAL INCOME TAXES It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to "regulated investment
companies" and to distribute all of its taxable income to its shareholders.
Therefore, no provision for Federal income taxes is required.
DISTRIBUTIONS Dividends from net investment income and net realized
capital gains are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. The character of income and gains to
be distributed are determined in accordance with income tax regulations that may
differ from generally accepted accounting principles. At December 31, 1997,
reclassifications were made to the Fund's capital accounts to reflect permanent
book/tax differences and income and gains available for distribution under
income tax regulations. Net investment income, net realized gains and net assets
were not affected by this change.
USE OF ESTIMATES The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results could
differ from those estimates.
2. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATE
The Fund pays an investment advisory fee to Lexington Management
Corporation ("LMC") at an annual rate of 1.00% of the Fund's average daily net
assets. For 1998, LMC has voluntarily agreed to limit the total expenses of the
Fund (including management fees, but excluding interest, taxes, brokerage
commissions and extraordinary expenses) to an annual rate of 2.50% of the Fund's
average daily net assets. No reimbursement was required for the six months ended
June 30, 1998.
The Fund reimburses LMC for certain expenses, including accounting and
shareholder servicing costs of $30,758 that are incurred by the Fund, but paid
by LMC.
8
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998 (unaudited) and December 31, 1997 (continued)
3. CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Six months ended
June 30, 1998 Year ended
(unaudited) December 31, 1997
--------------------------- -------------------------
Shares Amount Shares Amount
---------- ------------ -------- ----------
<S> <C> <C> <C> <C>
Shares sold ..................................... 278,348 $ 3,261,399 216,204 $ 2,635,131
Shares issued on reinvestment of dividends ...... -- -- 388,677 4,071,820
---------- ------------ -------- ----------
278,348 3,261,399 604,881 6,706,951
Shares redeemed ................................. (1,324,678) (15,864,115) (589,982) (7,229,982)
---------- ------------ -------- ----------
Net increase (decrease) ......................... (1,046,330) $(12,602,716) 14,899 $ (523,031)
========== ============ ======== ==========
</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, 1998, excluding short-term securities, were $17,470,748
and $26,745,650 respectively.
At June 30, 1998, the aggregate gross unrealized appreciation for all
securities in which there is an excess of value over tax cost amounted to
$4,844,010 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $1,752,278.
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, 1998, the Fund was committed to sell foreign currencies under
the following forward foreign exchange contracts:
<TABLE>
<CAPTION>
Contract
Amount Contract Unrealized
Settlement (Local Amount Gain (Loss) at
Contract Date Currency) (U.S. Dollar) Value June 30, 1998
-------- ---------- --------- ------------- ---------- --------------
<S> <C> <C> <C> <C> <C>
United Kingdom Pounds 10/06/98 855,757 $1,413,240 $1,420,642 $(7,402)
Australian Dollar 11/05/98 380,028 247,321 235,590 11,731
Canadian Dollar 11/30/98 645,837 444,515 441,356 3,159
-------
$ 7,488
=======
</TABLE>
9
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
FINANCIAL HIGHLIGHTS
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
Six months
ended
June 30, Year ended December 31,
1998 ----------------------------------------------------
(unaudited) 1997 1996 1995 1994
-------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period ...................... $ 10.59 $ 11.28 $ 11.32 $ 11.17 $ 13.51
-------- -------- -------- -------- -------
Income from investment operations:
Net investment income .................... 0.03 0.03 0.01 0.09 0.023
Net realized and unrealized gain
on investments and foreign
currency transactions .................. 1.39 0.73 1.84 1.10 0.23
-------- -------- -------- -------- -------
Total income from
investment operations .................. 1.42 0.76 1.85 1.19 0.25
-------- -------- -------- -------- -------
Less distributions:
Dividends from net investment income ..... -- (0.09) (0.16) (0.29) --
Distributions in excess of
net investment income
(temporary book-tax
difference) ............................ -- -- -- (0.13) --
Distributions from net realized gains .... -- (1.36) (1.73) (0.62) (2.46)
Distributions in excess of net
realized gains (temporary
book-tax difference) ................... -- -- -- -- (0.13)
-------- -------- -------- -------- -------
Total distributions ................ -- (1.45) (1.89) (1.04) (2.59)
-------- -------- -------- -------- -------
Net asset value, end of period ............. $ 12.01 $ 10.59 $ 11.28 $ 11.32 $ 11.17
======== ======== ======== ======== =======
Total return ............................... 27.09%* 6.90% 16.43% 10.69% 1.84%
Ratio to average net assets:
Expenses ................................. 1.91%* 1.75% 1.90% 1.67% 1.61%
Net investment income .................... 0.51%* 0.23% 0.11% 0.48% 0.14%
Portfolio turnover rate .................... 119.05%* 117.48% 128.05% 166.35% 83.40%
Average commission paid on equity
security transactions** .............. $ 0.02 $ 0.01 $ 0.03 -- --
Net assets, end of period
(000's omitted) .......................... $ 27,247 $ 35,085 $ 37,223 $ 53,614 $67,392
</TABLE>
* Annualized.
** In accordance with SECdisclosure guidelines, the average commissions are
calculated for the periods beginning with the year ended December 31, 1996,
but not for prior periods.
10
<PAGE>
LEXINGTON
INVESTOR SERVICES
- --------------------------------------------------------------------------------
AS A LEXINGTON SHAREHOLDER, YOU SHOULD BE AWARE OF THE MANY SERVICES AVAILABLE
TO YOU.
NO LOAD--The Lexington Funds are no load funds. That is, investments and
redemptions are made without any sales charges, commissions or redemption fees.*
----------
FREE TELEPHONE EXCHANGE--Investments in the Lexington Funds may be exchanged for
shares of a different Lexington Fund at any time.
----------
CHECK WRITING PRIVILEGES--Lexington Money Market Trust permits investors
immediate access to their funds with check writing for withdrawals from their
account.
----------
TAX SHELTERED PLANS--IRA, Keogh, Pension, and Profit Sharing Prototype Plans are
available to qualified individuals. These plans offer investment flexibility
through the Share Exchange Service, simplified record keeping, convenience and
investment supervision.
----------
CUSTODIAL ACCOUNTS FOR MINORS--Investments may be made on behalf of minors under
the Uniform Gifts to Minors Act currently in effect in all states.
----------
SYSTEMATIC WITHDRAWAL PLAN--An investor may elect to receive a fixed amount from
his or her account each month or quarter, subject to certain minimums.
----------
COMPLETE RECORD KEEPING--A statement is provided for every transaction in
addition to a year-end statement with tax information.
THE LEXINGTON GROUP OF
NO LOAD INVESTMENT COMPANIES
LEXINGTON WORLDWIDE EMERGING MARKETS FUND, INC.--Seeks long-term growth of
capital primarily through investment in equity securities of companies domiciled
in, or doing business in, emerging countries and emerging markets.
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.--Seeks long-term growth of capital
primarily through investment in common stocks of companies domiciled in foreign
countries and the United States.
LEXINGTON INTERNATIONAL FUND, INC.--Seeks long-term growth of capital through
investment in companies domiciled in foreign countries.
LEXINGTON TROIKA DIALOG RUSSIA FUND, INC.--Seeks long-term capital appreciation
through investments primarily in the equity securities of Russian companies.
LEXINGTON CROSBY SMALL CAP ASIA GROWTH FUND, INC. --Seeks long-term capital
appreciation through investment in companies domiciled in the Asia Region with a
market capitalization of less than $1 billion.
LEXINGTON RAMIREZ GLOBAL INCOME FUND--Seeks high current income. Capital
appreciation is a secondary objective. The Fund invests in a combination of
foreign and domestic high-yield, lower rated debt securities.
LEXINGTON GOLDFUND, INC.--Seeks capital appreciation through investment in gold
bullion and shares of gold mining companies.
LEXINGTON GROWTH AND INCOME FUND, INC.--Seeks capital appreciation over the
long-term through investments in the stocks of large, ably managed and well
financed companies.
LEXINGTON CORPORATE LEADERS TRUST FUND--Seeks capital growth and reasonable
income through investment in an equal number of shares of an established list of
American blue chip corporations.
LEXINGTON SMALLCAP FUND, INC.--Seeks long-term capital appreciation through
investment in common stocks of companies domiciled in the United States with a
market capitalization of less than $1 billion.
LEXINGTON CONVERTIBLE SECURITIES FUND--Seeks total return by providing capital
appreciation, current income and conservation of capital through investments in
a diversified portfolio of securities convertible into shares of common stock.
LEXINGTON GNMA INCOME FUND, INC.--Seeks to achieve a high level of current
income, consistent with liquidity and safety of principal, through investment
primarily in mortgage-backed GNMA ("Ginnie Mae") certificates that are
guaranteed as to the timely payment of principal and interest by the United
States Government.
LEXINGTON MONEY MARKET TRUST--Seeks a high level of current income consistent
with preservation of capital and liquidity through investments in interest
bearing short-term money market instruments.
For more complete information about any of the Lexington Funds and a prospectus
which includes management fee and expenses call the distributor toll-free at
1-800-526-0056. Read the prospectus carefully before you invest or send money.
*Redemptions on shares of Lexington Troika Dialog Russia Fund, Inc. held less
than 365 days are subject to a redemption fee of 2% of the redemption proceeds.
<PAGE>
LEXINGTON
GLOBAL CORPORATE LEADERS FUND, INC.
INVESTMENT ADVISER
- --------------------------------------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
DISTRIBUTOR
- --------------------------------------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
========================================
ALL SHAREHOLDER REQUESTS FOR SERVICES OF
ANY KIND SHOULD BE SENT TO:
TRANSFER AGENT
- ----------------------------------------
STATE STREET BANK AND
TRUST COMPANY
c/o National Financial Data Services
1004 Baltimore
Kansas City, Missouri 64105
OR CALL TOLL FREE:
SERVICE AND SALES: 1-800-526-0056
24 HOUR ACCOUNT INFORMATION:
1-800-526-0052
========================================
- --------------------------------------------------------------------------------
(800) 526-0052
"LEXLINE"
24 hour toll-free telephone access to your
Lexington Fund account
Price/Yield o Account Balances o Exchanges o
Last Transactions o Total Return o Duplicate Statements
- --------------------------------------------------------------------------------
This report has been prepared for the information of the shareholders of
Lexington Global Corporate Leaders Fund, Inc. and is authorized for distribution
to the public only if it is accompanied or preceded by a currently effective
prospectus which sets forth expenses and other material information.
================================================================================
LEXINGTON
[LOGO]
LEXINGTON
GLOBAL
CORPORATE
LEADERS
FUND, INC.
------------
Seeks long-term growth of capital,
primarily through investment in
common stocks of companies
domiciled in foreign countries
and the United States.
------------
SEMI-ANNUAL REPORT
JUNE 30, 1998
The Lexington Group
of No Load
Investment Companies
================================================================================
