<PAGE>
INVESTMENT ADVISER
Legg Mason Fund Adviser, Inc.
Baltimore, MD
INVESTMENT SUB-ADVISER
Western Asset Management Company
Pasadena, CA
BOARD OF DIRECTORS
John F. Curley, Jr., Chairman
Edward A. Taber, III, President
Richard G. Gilmore
Charles F. Haugh
Arnold L. Lehman
Dr. Jill E. McGovern
T. A. Rodgers
TRANSFER AND SHAREHOLDER SERVICING AGENT
Boston Financial Data Services
Boston, MA
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
COUNSEL
Kirkpatrick & Lockhart
Washington, D.C.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
Baltimore, MD
THIS REPORT IS NOT TO BE DISTRIBUTED UNLESS PRECEDED OR
ACCOMPANIED BY A PROSPECTUS.
LEGG MASON WOOD WALKER, INCORPORATED
111 South Calvert Street
P.O. Box 1476, Baltimore, MD 21203-1476
410 (Bullet) 539 (Bullet) 0000
(recycle logo) PRINTED ON RECYCLED PAPER
LMF-042
REPORT TO SHAREHOLDERS
FOR THE SIX MONTHS ENDED
JUNE 30, 1995
THE
LEGG MASON
GLOBAL
GOVERNMENT
TRUST
PUTTING YOUR FUTURE FIRST
(Legg Mason logo)
<PAGE>
TO OUR SHAREHOLDERS,
The Legg Mason Global Government Trust's net asset value increased
from $9.54 to $10.69 per share in the six months ended June 30, 1995.
As of June 30, 1995, the weighted average maturity of the Fund's
investment portfolio was 7.3 years and its annualized yield for the
past 30 days was 6.78%.
The Fund seeks to provide capital appreciation and income in order
to achieve a competitive total return by investing primarily in a
global portfolio of high quality debt securities of the U.S. and
foreign governments. The Fund is required to invest a minimum of 75%
of its assets in government debt obligations, as well as a minimum of
75% of its assets in investment grade securities. As of June 30, 1995,
the securities held in the portfolio were categorized as follows:
<TABLE>
<S> <C>
Government 79.7%
Non-Government 20.3
Investment Grade 79.5%
Non-Investment Grade 20.5
</TABLE>
On the following page, Keith J. Gardner, the Fund's portfolio
manager, reviews the portfolio's structure and performance, and
comments on the investment outlook for global bonds.
Investments in global bonds should be considered a core part of
any well diversified investment portfolio. We hope you will consider
using the Global Government Trust for investments of additional funds
as they become available. Some shareholders regularly add to their
investments in the Fund by authorizing automatic, monthly transfers
from their bank checking accounts or Legg Mason money market funds.
Your Investment Executive will be happy to help you make these
arrangements if you would like to purchase additional shares in this
convenient manner.
Sincerely,
(signature)
Edward A. Taber, III
President
August 3, 1995
<PAGE>
PORTFOLIO MANAGER'S COMMENTS
Global bond markets posted extraordinary gains in the first half of
this year, after suffering through a very weak market last year. Bond
markets rallied across the globe, and a continuation of strong performance
by foreign currencies relative to the US dollar also added to the
portfolio's gains.
THE US MARKET reversed last year's trend of rising bond yields, and
was one of the best performing markets, in local currency terms. The
30-year benchmark Treasury bond, which rose by 150 basis points in yield
last year, fell by over 160 basis points in the first half of this year
(100 basis points = 1%). The change in sentiment was driven by a change in
Fed policy: last year's series of rate hikes ended because projections for
future growth were reduced.
EUROPEAN MARKETS also posted sharp gains, due to rallying bond markets
and appreciating currencies. Economic projections were pared down, and an
expected tightening by the German central bank did not materialize. The
core European markets were the strongest performers as the market punished
high yielding markets (Italy, Spain, Sweden) for their high deficits, and
in some cases, their political uncertainties.
THE JAPANESE MARKET was the best performer in the first half as a
strong bond market was accompanied by a surging yen. Economic activity
suffered a sharp decline and inflation was negligible. THE AUSTRALIAN BOND
MARKET performed well, but a declining Australian dollar made it the worst
performing market for a US dollar-based investor.
EMERGING MARKET BONDS were on a roller coaster in the first half.
Repercussions from the Mexican peso devaluation in December carried over
into the first quarter as bond prices moved sharply lower. However,
confidence returned to the market in the second quarter, with the market
posting gains of over 20%. At this point, Mexico appears to have survived
the liquidity crisis brought on by the devaluation. An impressive
adjustment has been made to reorient the economy toward the export sector,
resulting in a sharp improvement in the current account balance. The
economy is, however, experiencing extreme pain and much work is still
necessary to get the country back on its feet. Medium to long-term
prospects are felt to be constructive for the markets, although volatility
is expected to continue in the near term.
Negative sentiment toward THE US DOLLAR continued into the new year.
It suffered sharp declines in the first quarter, but has finally shown
some signs of stability by settling into a trading range in the second
quarter.
The Global Government Trust provided a total return of +15.08% in the
first half. This compared very favorably with the performance of
competitor funds. The Fund did however, underperform its benchmark over
the period as the Salomon Brothers World Government Bond Index gain
16.85%. The underperformance was due to the Fund's emerging market
holdings, which are not part of the benchmark.
Keith J. Gardner
August 3, 1995
2
<PAGE>
STATEMENT OF NET ASSETS
LEGG MASON GLOBAL TRUST , INC.
GLOBAL GOVERNMENT TRUST
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
(Amounts in Thousands) Amount Value
<S> <C> <C> <C>
LONG-TERM DEBT SECURITIES(A) -- 96.3%
British Sterling -- 9.8%
United Kingdom Conversion
Stock
9.5% 10/25/04 GBP 6,500 $ 10,984
United Kingdom Treasury Stock
7.25% 3/30/98 1,500 2,349
Vnesheconombank Loan 3,500 1,643(F,G)
14,976
Canadian Dollar -- 2.4%
Government of Canada
7.75% 9/1/99 CAD 2,000 1,470
10.25% 2/1/04 1,000 832
6.5% 6/1/04 2,000 1,323
3,625
Czech Crown -- 4.7%
Ceska Sporitelna A/S
14.375% 1/27/01 CSK 175,000 7,227
Danish Krone -- 6.3%
Kingdom of Denmark
9% 11/15/00 DKK 26,000 4,989
8% 3/15/06 26,000 4,573
9,562
French Franc -- 3.7%
Bons du Tresor a Taux Fixe et
Interet Annuel
9% 11/12/95 FRF 17,000 3,529
Mexico Par
6.63% 12/31/19 10,000 1,114
Republic of Ivory Coast
Restructured Loan 23,304 757(F,G)
Unstructured Loan 9,200 299(F,G)
5,699
German Mark -- 14.5%
Deutsche Bundesrepublic
8% 7/22/02 DEM 21,000 16,083
6% 6/20/16 10,000 6,052
22,135
Italian Lira -- 3.2%
Buoni del Tesoro Poliennali
8.5% 8/1/99 ITL 9,000,000 4,858
</TABLE>
<TABLE>
<CAPTION>
Principal
(Amounts in Thousands) Amount Value
<S> <C> <C> <C>
Japanese Yen -- 20.0%
Credit Foncier de France
4.75% 8/9/02 JPY 500,000 $ 6,569
Government of Japan #145
5.5% 3/20/02 1,100,000 15,226
Kingdom of Belgium
6% 12/16/98 650,000 8,755
30,550
United States Dollar --31.7%
Currency Exchange-Linked
Securities(B) -- 13.2%
Bayerische Landesbank
Chilean Peso-Linked CD
15.1% 7/19/95 USD 5,000 5,595
Internationale Nederlanden
(U.S.) Corporation
Slovakian Koruna-Linked
Note
16.5%(H) 5/30/96 3,827 3,529
Morgan Guaranty Trust
Indonesian Rupiah-Linked
CD
14.1%(H) 12/1/95 3,429 3,153
Morgan Guaranty Trust
Thai Baht-Linked CD
10.3%(H) 8/10/95 2,000 2,012
12.5%(H) 9/20/95 1,000 982
Bancomex Slovak Crown-
Indexed Debt Security
0%(I) 10/2/95 5,000 4,835(J)
20,106
Emerging Markets -- 13.8%
Argentina Bonds del Tesoro(C)
6.0625% 9/1/97
Indexed to 3-month LIBOR 3,000 1,470
Argentina Bonos de Consolidacion
Previsionales(C)
6.0625% 4/1/01
Indexed to 1-month LIBOR 2,000 1,091
Argentina Discount Bond(C)
6.875% 3/31/23
Indexed to 6-month LIBOR 2,000 1,152
Argentina Floating Rate
Bond(C)
7.3125% 3/31/05
Indexed to 6-month LIBOR 4,000 2,460
</TABLE>
3
<PAGE>
STATEMENT OF NET ASSETS -- CONTINUED
LEGG MASON GLOBAL TRUST, INC.
GLOBAL GOVERNMENT TRUST
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Principal
(Amounts in Thousands) Amount Value
<S> <C> <C> <C>
Emerging Markets -- Continued
Argentina Par Bonds
5%(E) 3/31/23 USD 4,000 $ 1,900
Celulosa Arauco Company
7.25% 6/11/98 1,950 1,945
Kingdom of Morocco
7.375%(D) 1/1/09 6,000 3,517
Mexico Par -- Series A & B
6.25% 12/31/19 5,000 3,044(K)
Republic of Ecuador
3% 2/28/25 3,000 968
Republic of Poland
Discount
Bond
7.125%(D) 10/27/24 2,000 1,532
Republic of Venezuela
9% 5/27/96 1,500 1,448
United Mexican States
9.5% 7/16/01 762 491
21,018
U.S. Government Obligations -- 4.7%
United States Treasury
Notes
4.75% 9/30/98 6,000 5,797
5.75% 8/15/03 1,500 1,456
7,253
Total Long-term Debt
Securities
(Identified
Cost -- $143,202) 147,009
</TABLE>
<TABLE>
<CAPTION>
Principal
(Amount in Thousands) Amount Value
<S> <C> <C>
REPURCHASE AGREEMENT -- 0.5%
State Street Bank and Trust
Company, N.A.
3% dated 6/30/95, to be
repurchased at $740 on 7/3/95
(Collateral: $695 United States
Treasury Bonds, 7.25% due
5/15/16, value $743)
(Identified Cost -- $740) $ 740 $ 740
Total Investments -- 96.8%
(Identified Cost -- $143,942) 147,749
Other Assets Less
Liabilities -- 3.2% 4,819
NET ASSETS CONSISTING OF:
Accumulated paid-in capital
applicable to 14,270 shares
outstanding 144,014
Undistributed net investment
income 1,957
Undistributed net realized gain on
investments, forward currency
contracts, options and currency
translations 3,054
Unrealized appreciation of
investments, forward currency
contracts, options and currency
translations 3,543
NET ASSETS -- 100.0% $ 152,568
NET ASSET VALUE PER SHARE $10.69
</TABLE>
(A) LISTED BY CURRENCY DENOMINATION.
(B) TOTAL MATURITY VALUE IS LINKED TO THE INDICATED EXCHANGE RATE.
(C) INDEXED SECURITY -- THE RATE OF INTEREST EARNED ON EACH SECURITY IS
TIED TO THE LONDON INTERBANK OFFERED RATE (LIBOR)
INDEX. THE COUPON RATE FOR EACH IS THE RATE AS OF JUNE 30, 1995.
(D) THE RATE SHOWN IS THE RATE AS OF JUNE 30, 1995.
(E) STEP-UP SECURITY -- A SECURITY WHOSE INTEREST RATE INCREASES AT
SPECIFIED TIMES OVER THE LIFE OF THE SECURITY. THIS
SECURITY'S COUPON INCREASES 0.25% ANNUALLY UNTIL MARCH 31, 1999,
AND THEREAFTER REMAINS FIXED AT 6% UNTIL MATURITY.
(F) ILLIQUID SECURITY -- A SECURITY THAT CANNOT BE DISPOSED OF
WITHIN SEVEN DAYS FOR APPROXIMATELY THE PRICE AT WHICH THE
FUND VALUES IT.
(G) NON-INCOME PRODUCING -- ISSUER IS IN DEFAULT OF INTEREST AND
PRINCIPAL PAYMENTS.
(H) YIELD-TO-MATURITY.
(I) ZERO-COUPON BOND -- A BOND WITH NO PERIODIC INTEREST PAYMENTS
WHICH IS SOLD AT SUCH A DISCOUNT AS TO PRODUCE A CURRENT
YIELD-TO-MATURITY.
(J) RULE 144A SECURITY -- A SECURITY PURCHASED PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT OF 1933 WHICH MAY NOT BE RESOLD SUBJECT
TO THAT RULE EXCEPT TO QUALIFIED INSTITUTIONAL BUYERS.
(K) COLLATERAL TO COVER OPTION WRITTEN.
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
STATEMENT OF OPERATIONS
LEGG MASON GLOBAL TRUST, INC.
GLOBAL GOVERNMENT TRUST
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in Thousands)
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 5,876
EXPENSES:
Investment advisory fee $ 548
Distribution and service fees 548
Custodian fee 90
Transfer agent and shareholder servicing expense 52
Legal and audit fees 41
Registration fees 27
Organization expense 13
Reports to shareholders 6
Directors' fees 4
Other expenses 6
Total expenses 1,335
NET INVESTMENT INCOME 4,541
NET REALIZED AND UNREALIZED GAIN (LOSS):
Realized Gain (Loss):
Investments (168)
Foreign currency transactions 7,282
Unrealized Gain (Loss):
Investments 9,102
Assets and liabilities denominated in foreign currencies (104)
NET REALIZED AND UNREALIZED GAIN 16,112
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $20,653
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
LEGG MASON GLOBAL TRUST , INC.
GLOBAL GOVERNMENT TRUST
<TABLE>
<CAPTION>
For the Six
Months Ended For the
June 30, Year Ended
(Amounts in Thousands) 1995 December 31, 1994
(Unaudited)
<S> <C> <C>
CHANGE IN NET ASSETS:
Net investment income $ 4,541 $ 9,092
Net realized gain (loss) on investments and foreign currency transactions 7,114 (3,081)
Change in unrealized appreciation of investments and assets and liabilities
denominated in foreign currency 8,998 (8,607)
Change in net assets resulting from operations 20,653 (2,596)
Distributions to shareholders from net investment income (3,933) (9,402)
Change in net assets from Fund share transactions (9,567) (3,659)
Change in net assets 7,153 (15,657)
NET ASSETS:
Beginning of period 145,415 161,072
End of period (including undistributed net investment income of $1,957 and $1,349,
respectively) $152,568 $ 145,415
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
FINANCIAL HIGHLIGHTS
LEGG MASON GLOBAL TRUST, INC.
GLOBAL GOVERNMENT TRUST
Contained below is per share operating performance data for a share of
common stock outstanding, total investment return, ratios to average net
assets and other supplemental data. This information has been derived from
information provided in the financial statements.
<TABLE>
<CAPTION>
For the Six For the Years
Months Ended Ended December 31,
June 30, 1995 1994 1993(A)
(Unaudited)
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $9.54 $10.27 $10.00
Net investment income(B) 0.31 0.57 0.36
Net realized and unrealized gain (loss) on investments,
forward currency contracts, options and currency
translations 1.11 (0.71) 0.31
Total from investment operations 1.42 (0.14) 0.67
Distributions to shareholders from:
Net investment income (0.27) (0.59) (0.36)
Net realized gain on investments -- -- (0.04)
Total distributions (0.27) (0.59) (0.40)
Net asset value, end of period $10.69 $9.54 $10.27
Total return 15.1%(C) (1.4)% 6.8%(C)
RATIOS/SUPPLEMENTAL DATA:
Ratios to average net assets:
Expenses(B) 1.8%(D) 1.3% 0.3%(D)
Net investment income(B) 6.2%(D) 5.7% 5.4%(D)
Portfolio turnover rate 162.6%(D) 127.0% 127.8%(D)
Net assets, end of period (in thousands) $152,568 $145,415 $161,072
</TABLE>
(A) FOR THE PERIOD APRIL 15, 1993 (COMMENCEMENT OF OPERATIONS) TO
DECEMBER 31, 1993.
(B) NET OF FEES WAIVED AND REIMBURSEMENTS MADE BY THE MANAGER
FOR EXPENSES IN EXCESS OF VOLUNTARY EXPENSE LIMITATIONS AS
FOLLOWS: 0.2% UNTIL SEPTEMBER 30, 1993; 0.35% UNTIL DECEMBER
31, 1993; 0.5% UNTIL JANUARY 31, 1994; 0.7% UNTIL
FEBRUARY 28, 1994; 0.9% UNTIL MARCH 31, 1994; 1.1% UNTIL
APRIL 30, 1994; 1.3% UNTIL MAY 31, 1994; 1.5% UNTIL JUNE 30,
1994; 1.7% UNTIL JULY 31, 1994; AND 1.9% UNTIL DECEMBER 31, 1995.
(C) NOT ANNUALIZED.
(D) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
LEGG MASON GLOBAL TRUST, INC.
GLOBAL GOVERNMENT TRUST
(Amounts in Thousands) (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES:
The Legg Mason Global Trust, Inc. ("Corporation"), consisting of the
Global Government Trust ("Fund") and the Global Equity Trust, is
registered under the Investment Company Act of 1940, as amended, as an
open-end, diversified investment company. The financial statements of the
other portfolio of the Corporation is included in a separate report to
shareholders.
Security Valuation
Portfolio securities are valued based upon market quotations. When
market quotations are not readily available, securities are valued based
on prices received from recognized broker-dealers in the same or similar
securities. The amortized cost method of valuation is used for debt
obligations with 60 days or less remaining to maturity.
Currency Translations
The books and records of the Fund are maintained in U.S. dollars.
Foreign currency amounts are translated into U.S. dollars on the following
basis:
(i) market value of investment securities, assets and liabilities at
the closing daily rate of exchange, and
(ii) purchases and sales of investment securities, interest income and
expenses at the rate of exchange prevailing on the respective
date of such transactions.
The effect of changes in foreign exchange rates on realized and
unrealized security gains or losses is reflected as a component of such
gains or losses.
Investment Income and Dividends to Shareholders
Income and expenses are recorded on the accrual basis. Dividends are
declared and paid monthly. Dividends payable are recorded on the dividend
ex-date. Bond premium is amortized using the yield-to-maturity method for
financial reporting and tax purposes. Bond discount, other than original
issue, is not amortized.
Security Transactions
Security transactions are recorded on the trade date. Realized gains
and losses from security transactions are reported on an identified cost
basis.
Deferred Organizational Expense
Deferred organizational expenses of $128 are being amortized on a
straight-line basis over 5 years beginning on the date operations began.
Federal Income Taxes
No provision for federal income or excise taxes is required since the
Fund intends to continue to qualify as a regulated investment company and
distribute all of its taxable income to its shareholders.
2. FINANCIAL INSTRUMENTS:
As part of the Fund's investment program, the Fund may utilize forward
currency exchange contracts and repurchase agreements. The nature and
risks of these financial instruments and the reasons for using them are
set forth more fully in the Fund's Prospectus and Statement of Additional
Information.
Emerging Markets
The Fund has investments in securities denominated in the currencies
of emerging market countries, as well as in securities issued by
governments of emerging market countries. Future economic or political
developments could adversely affect the liquidity or value, or both, of
such securities.
Repurchase Agreements
All repurchase agreements are fully collateralized by obligations
issued by the U.S. government or its agencies and such collateral is in
the possession of the Fund's custodian. The value of such collateral
includes accrued interest. Risks arise from the possible delay in recovery
or potential loss of rights in the collateral should the issuer of the
repurchase agreement fail financially.
Forward Currency Exchange Contracts
The Fund may enter into foreign forward currency exchange contracts to
hedge against adverse changes in the relationship of the U.S. dollar to
foreign currencies. Risks arise from the possible inability of
counterparties to meet the terms of their contracts and from movements in
currency values. Forward currency contracts are valued using the forward
rate. As of June 30, 1995 the Fund had entered into the following currency
contracts:
8
<PAGE>
(Amounts in Thousands)
<TABLE>
<CAPTION>
Settlement Unrealized
Contracts to Buy Date Loss
<S> <C> <C>
10,000 Deutschmarks 7/31/95 $(86)
5,000 Canadian Dollars 7/31/95 (7)
$(93)
</TABLE>
3. OPTION TRANSACTIONS:
A call option written gives the option holder the right to purchase
the underlying security at a specified price until a specified date. A put
option written gives the option holder the right to sell the underlying
security at a specified price until a specified date. Risks arise from the
possible illiquidity of the options market and from movements in security
values. Call and put options written by the Fund and related premiums
received during the six months were as follows:
<TABLE>
<CAPTION>
Calls Puts
Face Face
Amount Premiums Amount Premiums
<S> <C> <C> <C> <C>
Options outstanding
January 1, 1995 -- $ -- -- $ --
Options written 10,000 109 10,000 100
Options closed (5,000) (58) (5,000) (50)
Options exercised -- -- (5,000) (50)
Options outstanding
June 30, 1995 5,000 $ 51 -- --
</TABLE>
The written option outstanding and related appreciation as of June 30,
1995 were as follows:
<TABLE>
<CAPTION>
Face Net
Amount Appreciation
<S> <C> <C>
Call Option Written
Mexico Par 6.25%
July 95 Strike Price $55 5,000 $239
</TABLE>
4. INVESTMENT TRANSACTIONS:
Investment transactions for the six months ended June 30, 1995,
(excluding short-term securities) were as follows:
<TABLE>
<S> <C>
Purchases $ 107,564
Proceeds from sales 109,138
</TABLE>
At June 30, 1995, the cost of securities for federal income tax
purposes was $143,950. Aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost was $8,056
and aggregate gross unrealized depreciation for all securities in which
there was an excess of tax cost over value was $4,256. The Fund has unused
capital loss carryforwards for federal income tax purposes of $2,943 which
expire in 2002.
5. FUND SHARE TRANSACTIONS:
At June 30, 1995, there were 1,000,000 shares authorized at $.001 par
value for all portfolios of the Corporation (including the Fund).
Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
For the Six For the Year
Months Ended Ended
June 30, 1995 December 31, 1994
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Sold 1,112 $ 11,368 5,165 $ 51,645
Reinvestment of
distributions 341 3,458 872 8,584
Repurchased (2,426) (24,393) (6,471) (63,888)
Net change (973) $ (9,567) (434) $ (3,659)
</TABLE>
6. TRANSACTIONS WITH AFFILIATES:
The Fund has an investment advisory and management agreement with Legg
Mason Fund Adviser, Inc. ("Adviser"), a corporate affiliate of Legg Mason
Wood Walker, Incorporated ("Legg Mason"), a member of the New York Stock
Exchange and the distributor for the Fund. Under this agreement, the
Adviser provides the Fund with investment advisory, management and
administrative services for which the Fund pays a fee at an annual rate of
0.75% of average daily net assets of the Fund. At June 30, 1995, $95 was
due to the Adviser.
Western Asset Management Company ("Sub-adviser"), a corporate
affiliate of the Adviser and Legg Mason, serves as investment adviser to
the Fund. The Sub-adviser is responsible for the actual investment
activity of the Fund, for which the Adviser pays a fee at an annual rate
equal to 40% of the fee received by the Adviser.
Legg Mason, as distributor of the Fund, receives an annual
distribution fee of 0.50% and an annual service fee of 0.25% of the Fund's
average daily net assets, calculated daily and payable
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
LEGG MASON GLOBAL TRUST, INC.
GLOBAL GOVERNMENT TRUST
(Amounts in Thousands) (Unaudited)
monthly. Legg Mason and the Adviser have voluntarily agreed to waive their
fees and to reimburse the Fund for its expenses (exclusive of taxes,
interest, brokerage and extraordinary expenses) in excess of the following
rates of the Fund's average net assets: 0.50% of the Fund's average net
assets until January 31, 1994; 0.70% until February 28, 1994; 0.90% until
March 31, 1994; 1.10% until April 30, 1994; 1.30% until May 31, 1994;
1.50% until June 30, 1994; 1.70% until July 31, 1994; and thereafter,
1.90% until December 31, 1995. At June 30, 1995, distribution and service
fees of $95 were due to the distributor.
Legg Mason also has an agreement with the Fund's transfer agent to
assist with certain of its duties. For this assistance, Legg Mason was
paid $16 by the transfer agent for the six months ended June 30, 1995.
10
