DEAR SHAREHOLDERS:
- --------------------------------------------------------------------------------
The Lexington Global Corporate Leaders Fund performed well in 1998. For
the year the Fund returned 19.06%* versus 14.3% for the average global fund,
according to Lipper, Inc. For the fourth quarter the Fund advanced 16.8%
against an industry average 1.4% according to Lipper Inc. The unmanaged Morgan
Stanley Capital International World Index beat most managers with a 24.8% gain
on the year, and 21.1% for the fourth quarter.
Strong performance can be attributed to the Fund's defensive posture in
the difficult third quarter. Large weightings in tobacco and pharmaceutical
stocks held up well in declining markets. Technology stocks in the U.S. and
Europe also performed well throughout most of the year.
Stocks in the United States and Europe continue to motor ahead. Large
company equities continue to dramatically outperform small companies, as vast
amounts of liquidity can more easily be put to use in big stocks. The growth of
index funds has also been a major contributor to this phenomenon. Risk is
mounting as investors are exceedingly bullish. The global economy remains weak
due to excess capacity and high debt levels. The U.S. economy remains the sole
engine for the world economy. Consumption continues to propel the economy
forward but this is not sustainable. U.S. savings have now turned negative as
spending exceeds income. High consumer confidence due to low unemployment and
high stock prices continues to support spending.
The corporate sector has also been on a spending binge as private fixed
investment continues to grow rapidly while corporate profits have weakened.
Ultimately the U.S. consumer will have to save more and companies will have to
slow spending. A U.S. economic slowdown will put further pressure on the global
economy as the U.S. has been the buyer of last resort. The European picture is
mixed. The manufacturing sector remains weak in Europe as it does in the United
States. However, consumption remains moderate. A U.S. economic slowdown would
probably tip Europe closer toward recession. Another issue for Europe is the
birth of the Euro.
On January 1, 1999 the Euro was born. Eleven European nations have formed
one currency with the U.K., Denmark and Sweden opting out. The Euro will be the
first challenge to the dollar since World War II. There are many potential
ramifications to the Euro and its impact on equity prices. However, the markets
have had years to adjust and in fact have benefitted by sharp falls in interest
rates. One single currency will allow companies to be more efficient and plan
with greater certainty. Conversely, pricing will be more transparent which
could pressure profit margins in certain industries. Lexington Management
Corporation, the Fund's advisor, will continue to monitor events in Europe to
identify the corporate leaders under this new currency. However, events are
unpredictable and it is possible negative news on the Euro could have a
material impact on the Fund's performance. Elsewhere, Japan continues to
struggle in recession. Debt levels have reached alarming levels with all
solutions looking painful. Until corporate Japan gets serious about enhancing
shareholder value through restructuring, Japanese stocks will be unattractive
on a long-term view.
The Fund invests in leading companies on a global basis. The Portfolio is
well diversified by region with the bulk invested in the United States, Europe
and Japan and focuses on sectors such as consumer non-durables, cyclicals and
energy. In summary, the Portfolio takes a long-term view with
1
<PAGE>
globally leading companies throughout the world. On a short-term basis relative
performance may prove volatile; with a portfolio quality companies enjoying low
turnover, long-term performance should be enhanced.
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
February, 1999 February, 1999 February, 1999
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC. AND
THE UNMANAGED MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX
[THE FOLLOWING TABLE REPRESENTS A CHART IN THE PRINTED REPORT]
Year Lexington Global MSCI
Corporate Leaders
Fund, Inc.
===========================================
12/31/88 $10,000 $10,000
12/31/89 $12,510 $11,660
12/31/90 $10,415 $ 9,679
12/31/91 $12,034 $11,449
12/31/92 $11,607 $10,856
12/31/93 $15,308 $13,294
12/31/94 $15,590 $13,969
12/31/95 $17,257 $16,863
12/31/96 $20,093 $19,136
12/31/97 $21,478 $22,152
12/31/98 $25,574 $27,646
- --------------------------------------------------------------------------------
Average Annual Standard Total Returns
for the Period Ended 12/31/98
-------------------------------------
FUND/INDEX 1 YEAR 5 YEAR 10 YEAR
---------- ------ ------ -------
Lexington Global 19.06% 10.81% 9.84%
Corporate Leaders Fund
MSCI-World Index 24.80% 15.77% 10.70%
- --------------------------------------------------------------------------------
The graph, prepared in accordance with SEC regulations, compares a $10,000
investment in the Fund with a similar investment in the Morgan Stanley Capital
International World Index ("MSCI-World Index"). Results for the Fund and the
MSCI-World Index include the reinvestment of all dividend and capital gain
distributions. 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.
*19.06%, 10.81% and 9.84%% are the one, five and ten year average annual
standard total returns, respectiely, for the period ended December 31, 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.
2
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
December 31, 1998
<TABLE>
<CAPTION>
NUMBER
OF VALUE
SHARES SECURITY (NOTE 1)
================= ========================================= ================
<S> <C> <C>
COMMON STOCKS: 97.5%
CANADA: 1.5%
9,200 Four Seasons Hotels, Inc. ............... $ 269,541
----------
DENMARK: 1.1%
1,500 Tele Danmark A/S ........................ 202,456
----------
FRANCE: 8.9%
3,430 Axa-UAP ................................. 497,368
7,400 Schlumberger, Ltd. - NY Shares .......... 341,325
5,800 SEITA ................................... 363,408
1,500 Vivendi ................................. 389,366
----------
1,591,467
----------
GERMANY: 4.2%
2,211 DaimlerChrysler AG1 ..................... 218,375
5,800 Deutsche Bank AG ........................ 341,448
2,300 Volkswagen AG ........................... 183,666
----------
743,489
----------
JAPAN: 10.7%
19,000 Asahi Diamond Industries Company,
Ltd. .................................... 94,666
4,200 Doutor Coffee Company, Ltd.2 ............ 139,632
8,000 Ito-Yokado Company, Ltd.2 ............... 560,301
24,000 National House Industrial Company, Ltd. . 204,474
4,800 Rinnai Corporation ...................... 84,088
4,900 Sony Corporation ........................ 357,520
12,000 Tokyo Electron, Ltd. .................... 456,397
----------
1,897,078
----------
NETHERLANDS: 7.9%
2,000 Aegon NV ................................ 245,755
9,800 Koninklijke Ahold NV .................... 362,408
3,100 Koninklijke KPN NV ...................... 155,275
6,000 Royal Dutch Petroleum ................... 298,934
4,200 Unilever NV - NY Shares ................. 348,338
----------
1,410,710
----------
SPAIN: 1.7%
11,700 Tabacalera S.A. ......................... 300,156
----------
SWEDEN: 1.9%
44,939 Swedish Match AB ........................ 163,555
7,500 Telefonaktiebolaget LM Ericsson
"Class B" ............................... 178,582
----------
342,137
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF VALUE
SHARES SECURITY (NOTE 1)
================= ========================================= ================
<S> <C> <C>
SWITZERLAND: 8.4%
174 Nestle AG ............................... $ 378,789
210 Novartis AG ............................. 412,819
29 Roche Holding AG ........................ 353,874
1,110 UBS AG .................................. 341,046
----------
1,486,528
----------
UNITED KINGDOM: 10.7%
20,500 British Petroleum Company plc ........... 306,118
24,400 British Telecommunications plc .......... 367,603
37,300 Diageo plc .............................. 424,488
25,400 Rio Tinto plc ........................... 295,401
26,300 SmithKline Beecham plc .................. 367,566
8,900 Vodafone Group plc ...................... 144,524
----------
1,905,700
----------
UNITED STATES: 40.5%
4,700 Aluminum Company of America ............. 350,444
3,300 American Express Company ................ 337,425
6,500 American Home Products Corporation....... 366,031
3,400 American International Group, Inc. ...... 328,525
3,900 Cisco Systems, Inc.1 .................... 362,091
6,600 Citigroup, Inc. ......................... 326,700
4,400 Exxon Corporation ....................... 321,750
3,500 General Electric Company ................ 357,219
2,700 Intel Corporation ....................... 320,034
4,100 Johnson and Johnson ..................... 343,888
3,300 Lucent Technologies, Inc. ............... 363,000
4,600 McDonald's Corporation .................. 352,475
2,400 Microsoft Corporation1 .................. 332,475
4,800 Morgan Stanley Dean Witter and
Company ................................. 340,800
2,800 Pfizer, Inc. ............................ 351,225
6,200 Philip Morris Companies, Inc. ........... 331,700
3,700 Procter & Gamble Company ................ 337,856
5,100 The Coca-Cola Company ................... 341,062
4,600 The Interpublic Group of Companies,
Inc. .................................... 366,850
10,700 The Walt Disney Company ................. 321,000
4,300 Wal-Mart Stores, Inc. ................... 350,181
----------
7,202,731
----------
TOTAL COMMON STOCKS
(cost $14,695,495)....................... 17,351,993
----------
</TABLE>
3
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
December 31, 1998 (continued)
<TABLE>
<CAPTION>
NUMBER
OF VALUE
SHARES SECURITY (NOTE 1)
=========== ============================================= ==============
<S> <C> <C>
PREFERRED STOCKS: 2.0%
GERMANY: 2.0%
1,300 Rhoen-Klinikum AG ........................... $132,690
480 SAP AG ...................................... 229,175
----------
TOTAL PREFERRED STOCKS
(cost $381,647).............................. 361,865
----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER
OF VALUE
SHARES SECURITY (NOTE 1)
=========== ============================================= ==============
<S> <C> <C>
TOTAL INVESTMENTS: 99.5%
(cost $15,077,142+) (Note 1)................. $17,713,858
Other assets in excess of liabilities: 0.5%.. 88,694
-------------
TOTAL NET ASSETS: 100.0%
(equivalent to $9.46 per share on
1,881,000 shares outstanding) ............... $17,802,552
=============
</TABLE>
1 Non-income producing security.
2 Some or all of this security is segregated for forward foreign currency
contracts (Notes 1 and 6).
+ Aggregate cost for Federal income tax purposes is $15,084,166.
------------------------------------------
At December 31, 1998, the composition of the Fund's net assets by industry was
as follows:
<TABLE>
<S> <C>
Banking ....................... 3.8%
Beverages ..................... 1.9
Capital Equipment ............. 3.1
Construction & Housing ........ 1.1
Consumer Durable Goods ........ 4.7
Consumer Non-durable Goods..... 16.2
</TABLE>
<TABLE>
<S> <C>
Electrical & Electronics ...... 7.7%
Energy Sources ................ 5.2
Financial Services ............ 11.7
Health & Personal Care ........ 13.1
Materials ..................... 3.6
Merchandising ................. 4.8
</TABLE>
<TABLE>
<S> <C>
Restaurants ................... 2.0%
Services ...................... 10.8
Telecommunications ............ 7.9
Tobacco ....................... 1.9
Other Assets .................. 0.5
-----
Total Net Assets ............. 100.0%
=====
</TABLE>
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
December 31, 1998
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $15,077,142) (Note 1) ........................................ $17,713,858
Cash ..................................................................................... 383,055
Receivable for investment securities sold ................................................ 23
Receivable for shares sold ............................................................... 9,381
Dividends and interest receivable ........................................................ 14,083
Foreign taxes recoverable ................................................................ 13,698
-----------
Total Assets .......................................................................... 18,134,098
-----------
LIABILITIES
Due to Lexington Management Corporation (Note 2) ......................................... 14,705
Payable for shares redeemed .............................................................. 53,295
Distributions payable .................................................................... 144,966
Accrued expenses ......................................................................... 44,371
Unrealized loss on open forward contracts (Note 6) ....................................... 74,209
-----------
Total Liabilities ..................................................................... 331,546
-----------
NET ASSETS (equivalent to $9.46 per share on 1,881,000 shares outstanding) (Note 3) ...... $17,802,552
===========
NET ASSETS consist of:
Capital stock-authorized 1,000,000,000
shares, $.001 par value per share ....................................................... $ 1,881
Additional paid-in capital (Note 1) ...................................................... 14,842,252
Undistributed net investment income (Note 1) ............................................. 334,184
Accumulated net realized gain on investments and foreign currency transactions (Note 1) .. 60,932
Unrealized appreciation of investments and foreign currency translation of other assets
and
liabilities ............................................................................. 2,563,303
-----------
TOTAL NET ASSETS ..................................................................... $17,802,552
===========
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
5
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
STATEMENT OF OPERATIONS
Year ended December 31, 1998
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends ................................................................ $ 431,713
Interest ................................................................. 132,802
----------
564,515
Less: foreign tax expense ................................................ 50,589
----------
Total investment income .............................................. $ 513,926
EXPENSES
Investment advisory fee (Note 2) ...................................... 249,933
Custodian expenses .................................................... 70,505
Transfer agent and shareholder servicing expenses (Note 2) ............ 50,424
Professional fees ..................................................... 38,359
Printing and mailing expenses ......................................... 35,256
Accounting expenses (Note 2) .......................................... 24,176
Registration fees ..................................................... 18,769
Directors' fees and expenses .......................................... 17,760
Computer processing fees .............................................. 7,103
Other expenses ........................................................ 16,576
----------
Total expenses ....................................................... 528,861
----------
Net investment loss ................................................. (14,935)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 4)
Net realized gain on:
Investments ........................................................... 5,303,730
Foreign currency transactions ........................................ 121,618
----------
Net realized gain ................................................... 5,425,348
Net change in unrealized appreciation (depreciation) on:
Investments .......................................................... 429,305
Foreign currency translation of other assets and liabilities ......... (197,890)
----------
Net change in unrealized appreciation (depreciation) ................ 231,415
----------
Net realized and unrealized gain ................................... 5,656,763
----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ......................... $5,641,828
==========
</TABLE>
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
Years ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
1998 1997
---------------- ---------------
<S> <C> <C>
Net investment income (loss) .............................................. $ (14,935) $ 86,901
Net realized gain from investments and foreign currency transactions 5,425,348 4,064,311
Net change in unrealized appreciation (depreciation) of investments
and foreign currency translation ......................................... 231,415 (1,492,431)
------------- ------------
Increase in net assets resulting from operations ....................... 5,641,828 2,658,781
Distributions to shareholders from net investment income (Note 1) ......... (1,176,896) (262,905)
Distributions to shareholders from net realized gains from security
transactions (Note 1) .................................................... (3,427,660) (4,011,033)
Decrease in net assets from capital share transactions (Note 3) ........... (18,320,015) (523,031)
------------- ------------
Net decrease in net assets ............................................. (17,282,743) (2,138,188)
NET ASSETS:
Beginning of period ...................................................... 35,085,295 37,223,483
------------- ------------
End of period (including undistributed net investment income of
$334,184, and distributions in excess of net investment income
of $38,192 in 1998 and 1997, respectively)............................... $ 17,802,552 $ 35,085,295
============= ============
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
7
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 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.
The Fund authorizes its custodian to place and maintain equity securities in a
segregated account of the Fund having a value equal to the aggregate amount of
the Fund's commitments under forward foreign currency contracts entered into
with respect to position hedges.
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, 1998,
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.
8
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997 (continued)
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
USE OF ESTIMATES The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities 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 year
ended December 31, 1998.
The Fund reimburses LMC for certain expenses, including accounting and
shareholder servicing costs of $54,686 that are incurred by the Fund, but paid
by LMC.
3. CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Year ended
December 31, 1998 December 31, 1997
---------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Shares Amount Shares Amount
------ ------- ----- ------
Shares sold ........................................ 417,735 $ 4,884,051 216,204 $ 2,635,131
Shares issued on reinvestment of dividends ......... 459,871 4,402,616 388,677 4,071,820
--------- ------------- -------- ------------
877,606 9,286,667 604,881 6,706,951
Shares redeemed .................................... (2,311,185) (27,606,682) (589,982) (7,229,982)
---------- ------------- -------- ------------
Net increase (decrease) ............................ (1,433,579) $ (18,320,015) 14,899 $ (523,031)
========== ============= ======== ============
</TABLE>
4. INVESTMENT TRANSACTIONS
The cost of purchases and proceeds from sales of securities for the year ended
December 31, 1998, excluding short-term securities, were $31,953,973 and
$51,457,543 respectively.
At December 31, 1998, the aggregate gross unrealized appreciation for all
securities in which there is an excess of value over tax cost amounted to
$2,745,301 and aggregate gross unrealized depreciation for all securities in
which there is an excess of tax cost over value amounted to $115,609.
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.
9
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997 (continued)
6. FORWARD FOREIGN EXCHANGE CONTRACT
At December 31, 1998, the Fund was committed to sell foreign currency under the
following forward foreign exchange contract:
<TABLE>
<CAPTION>
Contract
Amount Contract Unrealized
Settlement (Local Amount Loss at
Contract Date Currency) (U.S. Dollar) Value December 31, 1998
- ---------------------- ------------ ------------ --------------- ----------- ------------------
<S> <C> <C> <C> <C> <C>
Japanese Yen ......... 03/15/99 61,798,412 $473,116 $547,325 $(74,209)
========
</TABLE>
7. TAX INFORMATION (UNAUDITED)
The following tax information represents the designation of various tax
benefits relating to the year ended December 31, 1998:
The percentage of investment company taxable income distributions to
shareholders eligible for the dividends received deduction available to certain
corporate shareholders is 4.12%.
Net foreign source income received by the Fund from sources within foreign
countries and possessions of the United States was $0.2702 per share
(representing a total of $395,740). The total amount of "qualifying" taxes paid
by the Fund to such countries was $0.0345 per share (representing a total of
$50,589).
The percentage of ordinary income distributions paid by the Fund derived from
agency and direct obligations of the United States government were as follows:
<TABLE>
<S> <C>
U.S. Treasury .................................. 1.95%
Federal Home Loan Bank ......................... 0.48
Federal Home Loan Mortgage Corporation ......... 1.41
Federal National Mortgage Association .......... 0.01
</TABLE>
The Fund designates $3,427,660, whether taken in shares or cash, as 20%
long-term capital gain distributions.
10
<PAGE>
LEXINGTON GLOBAL CORPORATE LEADERS FUND, INC.
FINANCIAL HIGHLIGHTS
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------------------------------------------
1998 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 ............................ 0.99 0.03 0.01 0.09 0.02
Net realized and unrealized gain on investments
and foreign currency transactions ............... 1.02 0.73 1.84 1.10 0.23
-------- ------- ------- ------- -------
Total income from investment operations ........... 2.01 0.76 1.85 1.19 0.25
-------- ------- ------- ------- -------
Less distributions:
Distributions from net investment income ......... ( 0.80) ( 0.09) ( 0.16) ( 0.29) -
Distributions in excess of net investment
income (temporary book-tax difference) .......... - - - ( 0.13) -
Distributions from net realized gains ............ ( 2.34) ( 1.36) ( 1.73) ( 0.62) ( 2.46)
Distributions in excess of net realized
gains (temporary book-tax difference) ........... - - - - ( 0.13)
-------- -------- -------- -------- -------
Total distributions ............................... ( 3.14) ( 1.45) ( 1.89) ( 1.04) ( 2.59)
-------- -------- -------- -------- -------
Net asset value, end of period .................... $ 9.46 $ 10.59 $ 11.28 $ 11.32 $ 11.17
======== ======== ======== ======== =======
Total return ...................................... 19.06% 6.90% 16.43% 10.69% 1.84%
Ratio to average net assets:
Expenses ......................................... 2.12% 1.75% 1.90% 1.67% 1.61%
Net investment income (loss) ..................... (0.06)% 0.23% 0.11% 0.48% 0.14%
Portfolio turnover rate ........................... 137.33% 117.48% 128.05% 166.35% 83.40%
Net assets, end of period (000's omitted) ......... $ 17,803 $ 35,085 $ 37,223 $ 53,614 $67,392
</TABLE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
The Board of Directors and Shareholders
Lexington Global Corporate Leaders Fund, Inc.:
We have audited the accompanying statement of net assets (including the
portfolio of investments) and assets and liabilities of Lexington Global
Corporate Leaders Fund, Inc. as of December 31, 1998, and the related statement
of operations for the year then ended, the statements of changes in net assets
for each of the years in the two-year period then ended and the financial
highlights for each of the years in the five-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1998, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Lexington Global Corporate Leaders Fund, Inc. as of December 31, 1998, the
results of its operations for the year then ended, the changes in its net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the five-year period then ended,
in conformity with generally accepted accounting principles.
KPMG LLP
New York, New York
February 19, 1999
11
<PAGE>
LEXINGTON
GLOBAL CORPORATE LEADERS FUND, INC.
INVESTMENT ADVISER
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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 International 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.
[LOGO]
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LEXINGTON
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[GRAPHIC]
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LEXINGTON
GLOBAL CORPORATE
LEADERS
FUND, INC.
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Seeks long-term growth of capital,
primarily through investment in
common stocks of companies
domiciled in foreign countries
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ANNUAL REPORT
DECEMBER 31, 1998
The Lexington Group
of No Load
Investment Companies
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