NAVIGATOR GLOBAL FUNDS:
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NAVIGATOR CLASS OF LEGG MASON GLOBAL INCOME TRUST
NAVIGATOR CLASS OF LEGG MASON INTERNATIONAL EQUITY TRUST
NAVIGATOR CLASS OF LEGG MASON EMERGING MARKETS TRUST
NAVIGATOR CLASS OF LEGG MASON EUROPE FUND
NAVIGATOR SHARES PROSPECTUS October 5, 1999
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LEGG
MASON
FUND
HOW TO INVEST (SM)
As with all mutual funds, the Securities and Exchange Commission has not
passed upon the adequacy of this prospectus, nor has it approved or
disapproved these securities. It is a criminal offense to state otherwise.
<PAGE>
TABLE OF CONTENTS
ABOUT THE FUNDS:
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<TABLE>
<S> <C>
1 Investment objectives
5 Principal risks
8 Performance
12 Fees and expenses of the funds
13 Management
</TABLE>
ABOUT YOUR INVESTMENT:
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<TABLE>
<S> <C>
15 How to invest
16 How to sell your shares
17 Account policies
18 Services for investors
19 Dividends and taxes
20 Financial highlights
</TABLE>
<PAGE>
LEGG MASON GLOBAL TRUST, INC.
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INVESTMENT OBJECTIVES
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GLOBAL INCOME TRUST
INVESTMENT OBJECTIVE: Capital appreciation and current income in order
to achieve an attractive total return consistent with prudent investment
risk.
PRINCIPAL INVESTMENT STRATEGIES:
The fund invests at least 75% of its total assets in fixed income
securities rated investment grade by Moody's Investor's Service, Inc. or
Standard & Poor's or, if unrated by Moody's or S&P, judged by Western
Asset Management Company, the fund's adviser, to be of comparable
quality. The types of fixed income securities in which the fund may
invest include:
o U.S. and foreign investment grade corporate debt securities
o U.S. and foreign high-yielding corporate debt securities
(including those commonly known as "junk bonds")
o sovereign debt obligations of developed nations
o sovereign debt obligations of emerging market countries
o mortgage-related and asset-backed securities
The fund will maintain a minimum of 25% of its total assets in debt
securities issued or guaranteed by the U.S. Government or foreign
governments, their agencies, instrumentalities or political
subdivisions. The debt securities in which the fund may invest, and the
average maturity of the fund's portfolio, may be of any maturity. The
fund may invest in corporate fixed income securities rated as low as C
by Moody's or D by S&P or in nonrated securities deemed by the adviser
to be of comparable quality.
Under normal circumstances, the fund will invest no more than 40% of its
total assets in any one country other than the United States. There is
no other limit on the percentage of assets that may be invested in any
one country or currency.
Up to an aggregate of 25% of the fund's assets may be invested in below
investment grade securities of foreign and domestic issuers, loans of
banks and other financial institutions (which may be below investment
grade), convertible securities, and common and preferred stock.
The adviser has a number of proprietary tools which attempt to define
the interrelationship between bond markets, sectors and maturities.
Target ranges and prices are established as part of the adviser's
strategy process, monitored daily and re-balanced if necessary as
dictated by macroeconomic or company-specific events. This ongoing
screening drives the adviser's discipline for buying, selling or holding
any securities or currency positions. The adviser deviates from the
discipline only if exceptional circumstances disrupt the orderly
functioning of the markets. The adviser's management style favors
"sector rotation," which may result in high portfolio turnover.
The adviser sells securities when they have realized what the adviser
believes is their potential value or when the adviser believes that they
are not likely to achieve that value in a reasonable period of time.
For temporary defensive purposes, the fund may borrow money or invest
without limit in cash and U.S. dollar-denominated money market
instruments, including repurchase agreements. The fund may not achieve
its investment objective when so invested.
Legg Mason Global Trust
1
<PAGE>
INTERNATIONAL EQUITY TRUST
INVESTMENT OBJECTIVE: Maximum long-term total return.
PRINCIPAL INVESTMENT STRATEGIES:
Batterymarch Financial Management, Inc., the fund's adviser, currently
intends to invest substantially all of the fund's assets in non-U.S.
equity securities.
The primary focus of the adviser is stock selection, with a secondary
focus on country allocation. The adviser uses a bottom-up, quantitative
stock selection process for the developed markets portion of the fund's
portfolio. The cornerstone of this process is a proprietary stock
selection model that ranks the 2,800 stocks in the fund's principal
investable universe by relative attractiveness on a daily basis. The
quantitative factors within this model are intended to measure growth,
value, fundamental expectations and technical indicators (I.E., supply
and demand). Because the same quantitative factors are not effective
across all markets due to individual market characteristics, the adviser
adjusts the stock selection model to include factors that its research
indicates are effective, eliminating factors that are not valid in a
particular market. The adviser runs the stock selection model and
re-balances the portfolio daily, purchasing all stocks ranked "buys" by
the model and selling all stocks ranked "sells." Stocks are sold when
the original reason for purchase no longer pertains, the fundamentals
have deteriorated or portfolio re-balancing warrants.
Country allocation for the developed markets portion of the fund is
based on rankings generated by the adviser's proprietary country model.
The adviser examines securities from over 20 international stock
markets, with emphasis on several of the largest: Japan, the United
Kingdom, France, Canada and Germany.
The fund may invest up to 35% of its total assets in emerging market
securities. The adviser's investment strategy for the emerging markets
portion of the fund represents a distinctive combination of tested
quantitative methodology and traditional fundamental analysis. The
emerging markets allocation focuses on higher quality, dominant
companies which the adviser believes to have strong growth prospects and
reasonable valuations. Country allocation for the emerging markets
portion of the portfolio also combines quantitative and fundamental
approaches.
The fund's investment portfolio will normally be diversified across a
broad range of industries and across a number of countries, consistent
with the objective of maximum total return. The adviser may also seek to
enhance portfolio returns through active currency hedging strategies.
More than 25% of the fund's total assets may be denominated in a single
currency or invested in securities of issuers located in a single
country.
When cash is temporarily available, or for temporary defensive purposes
when the adviser believes such action is warranted by abnormal market or
economic situations, the fund may invest without limit in cash and U.S.
dollar-denominated money market instruments, including repurchase
agreements of domestic issuers. Such securities will be rated investment
grade or, if unrated, judged by the fund's adviser to be of comparable
quality. The fund may not achieve its investment objective when so
invested.
2
Legg Mason Global Trust
<PAGE>
EMERGING MARKETS TRUST
INVESTMENT OBJECTIVE: Long-term capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES:
Batterymarch Financial Management, Inc., the fund's adviser, intends to
invest substantially all of the fund's assets in equity securities and
convertible securities of emerging markets issuers.
The fund intends to invest in Asia, Latin America, the Indian
Subcontinent, Southern and Eastern Europe, the Middle East and Africa,
although it may not invest in all these markets at all times and may not
invest in any particular market when it deems investment in that country
or region to be inadvisable.
More than 25% of the fund's total assets may be denominated in a single
currency or invested in securities of issuers located in a single
country.
The adviser focuses on higher quality, dominant emerging markets
companies which the adviser believes to have strong growth prospects and
reasonable valuations, selected from a principal investable universe of
approximately 1,000 stocks. The adviser's emerging markets investment
strategy represents a distinctive combination of quantitative
methodology and traditional fundamental analysis. Traditional
"on-the-ground" fundamental research is combined by the adviser with
tested quantitative valuation disciplines in those markets where
reliable data are available. In determining country allocation, the
adviser also merges quantitative and fundamental approaches. In markets
with reliable historical data, buy and sell decisions are driven by a
combination of quantitative valuations and the adviser's fundamental
opinions. Stocks are sold when the original reason for purchase no
longer pertains, the fundamentals have deteriorated or portfolio
re-balancing warrants.
When cash is temporarily available, or for temporary defensive purposes
when the adviser believes such action is warranted by abnormal market or
economic situations, the fund may invest without limit in cash and U.S.
dollar-denominated money market instruments, including repurchase
agreements of domestic issuers. Such securities will be rated investment
grade or, if unrated, judged by the adviser to be of comparable quality.
The fund may not achieve its investment objective when so invested.
Legg Mason Global Trust
3
<PAGE>
EUROPE FUND
INVESTMENT OBJECTIVE: Long-term growth of capital.
PRINCIPAL INVESTMENT STRATEGIES:
Lombard Odier International Portfolio Management Limited, the fund's
adviser, under normal circumstances invests substantially all of the
fund's assets in equity securities of European issuers that it believes
offer above-average potential for capital appreciation. Such securities
include common and preferred stocks, convertible securities, rights and
warrants. The sub-adviser focuses on relatively larger capitalized
issuers with good earnings, growth potential and strong management.
A smaller portion of the fund's assets may be invested in fixed income
securities such as obligations of foreign or domestic governments,
government agencies or municipalities, and obligations of foreign or
domestic companies. The sub-adviser will invest in such securities for
potential capital appreciation.
Securities in the fund's portfolio may be sold when they attain certain
price targets or when better opportunities arise. Sell decisions also
are affected by the level of subscriptions and redemptions of shares of
the fund. The sub-adviser's investment technique may result in high
portfolio turnover.
For temporary defensive purposes, the fund may hold all or a portion of
its total assets in money market instruments, cash equivalents,
short-term government and corporate obligations or repurchase
agreements. The fund may not achieve its investment objective when so
invested.
4
Legg Mason Global Trust
<PAGE>
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PRINCIPAL RISKS
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IN GENERAL:
As with all mutual funds, an investment in any of these funds is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency; investors can lose money by investing in
the funds. There is no assurance that a fund will meet its investment
objective. The principal risks of investing in the funds are described
below.
MARKET RISK:
International Equity Trust, Emerging Markets Trust and Europe Fund
invest primarily in foreign equity securities. Prices of equity
securities generally fluctuate more than those of other securities. A
fund may experience a substantial or complete loss on an individual
stock. Market risk may affect a single issuer, industry or section of
the economy or may affect the market as a whole.
FOREIGN SECURITIES RISK:
Investments in foreign securities (including those denominated in U.S.
dollars) involve certain risks not typically associated with investments
in domestic issuers. The values of foreign securities are subject to
economic and political developments in the countries and regions where
the companies operate, such as changes in economic or monetary policies,
and to changes in exchange rates. Values may also be affected by foreign
tax laws and restrictions on receiving the investment proceeds from a
foreign country. Some foreign governments have defaulted on principal
and interest payments.
In general, less information is publicly available about foreign
companies than about U.S. companies. Foreign companies are generally not
subject to the same accounting, auditing and financial reporting
standards as are U.S. companies. Transactions in foreign securities may
be subject to less efficient settlement practices, including extended
clearance and settlement periods. Foreign stock markets may be less
liquid and less regulated than U.S. stock markets.
Some securities issued by foreign governments or their subdivisions,
agencies and instrumentalities may not be backed by the full faith and
credit of the foreign government. Even where a security is backed by the
full faith and credit of a foreign government, it may be difficult for a
fund to pursue its rights against a foreign government in that country's
courts.
EMERGING MARKETS RISK:
The risks of foreign investment are greater for investments in emerging
markets. Emerging market countries typically have economic and political
systems that are less fully developed, and can be expected to be less
stable, than those of more advanced countries. Low trading volumes may
result in a lack of liquidity and in price volatility. Emerging market
countries may have policies that restrict investment by foreigners, or
that prevent foreign investors from withdrawing their money at will.
Because each of the funds may invest a significant amount of its total
assets in emerging market securities, investors should be able to
tolerate sudden, sometimes substantial fluctuations in the value of
their investments. An investment in any fund that invests in emerging
market securities should be considered speculative.
CURRENCY RISK:
Because each of the funds invests significantly in securities
denominated in foreign currencies, the funds may incur currency
conversion costs, and may be favorably or unfavorably affected by
changes in the rates of exchange between those currencies and the U.S.
dollar. Currency exchange rates can be volatile and affected by, among
other factors, the general economics of a country, the actions of the
U.S. and foreign governments or central banks, the imposition of
currency controls, and speculation. A security may be denominated in a
currency that is different from the currency where the issuer is
domiciled.
Legg Mason Global Trust
5
<PAGE>
The funds may from time to time hedge a portion of their currency risk,
using currency futures, forwards, or options. However, these instruments
may not always work as intended, and in specific cases a fund may be
worse off than if it had not used a hedging instrument. For most
emerging market currencies, there are no suitable hedging instruments
available.
The conversion of certain European currencies into the Euro began on
January 1, 1999, and is expected to continue into 2002. Full
implementation of the Euro may be delayed and difficulties with the
conversion may significantly impact European capital markets, resulting
in increased volatility in world capital markets. Individual issuers may
suffer substantial losses if they or their suppliers are not adequately
prepared for the transition.
CONCENTRATION AND NONDIVERSIFICATION:
Europe Fund invests primarily in securities of European issuers. A fund
concentrating a significant portion of its investment in a single region
will be more susceptible to factors adversely affecting issuers within
that region than would a less concentrated portfolio of securities.
European issuers are subject to the special risks in that region,
including risks related to the introduction of the Euro and the
potential for difficulties in its acceptance, and the emergence of more
unified economic and financial governance in the European Monetary Union
("EMU") countries.
Global Income is a nondiversified fund. The percentage of its assets
invested in any single issuer is not limited by the Investment Company
Act of 1940. When the fund's assets are invested in the securities of a
limited number of issuers, the value of its shares will be more
susceptible to any single economic, political or regulatory event than
shares of a diversified fund.
RISKS OF FIXED INCOME SECURITIES:
Global Income invests substantially all of its assets in fixed income
securities. Europe Fund may invest up to 35% of its total assets in
fixed income securities. International Equity Trust and Emerging Markets
Trust may also invest in fixed income securities to a lesser extent.
INTEREST RATE RISK -
Fixed income securities are subject to interest rate risk, which is the
possibility that the market prices of the funds' investments may decline
due to an increase in market interest rates. Generally, the longer the
maturity of a fixed income security, the greater is the effect on its
value when rates increase.
Certain securities pay interest at variable or floating rates. Variable
rate securities reset at specified intervals, while floating rate
securities reset whenever there is a change in a specified index rate.
In most cases, these reset provisions reduce the effect of market
interest rates on the value of the security. However, some securities do
not track the underlying index directly, but reset based on formulas
that can produce an effect similar to leveraging; others may provide for
interest payments that vary inversely with market rates. The market
prices of these securities may fluctuate significantly when interest
rates change.
CREDIT RISK -
Fixed income securities are also subject to credit risk, I.E., the risk
that an issuer of securities will be unable to pay principal and
interest when due, or that the value of the security will suffer because
investors believe the issuer is less able to pay. This is broadly gauged
by the credit ratings of the securities in which each fund invests.
However, ratings are only the opinions of the agencies issuing them and
are not absolute guarantees as to quality.
Moody's considers debt securities rated in the lowest investment grade
category (Baa) to have speculative characteristics. Debt securities
rated below investment grade are deemed by the ratings agencies to be
speculative and may involve major risk or exposure to adverse
conditions. Those in the lowest rating categories may involve a
substantial risk of default or may be in default. Changes in economic
conditions or developments regarding the individual issuer are more
likely to cause price volatility and weaken the capacity of such
securities to make principal and interest payments than is the case for
higher-grade debt securities.
6
Legg Mason Global Trust
<PAGE>
CALL RISK -
Many fixed income securities, especially those issued at high interest
rates, provide that the issuer may repay them early. Issuers often
exercise this right when interest rates are low. Accordingly, holders of
callable securities may not benefit fully from the increase in value
that other fixed income securities experience when rates decline.
Furthermore, the fund reinvests the proceeds of the payoff at current
yields, which are lower than those paid by the security that was called.
INVESTMENT MODELS:
The proprietary models used by the advisers to evaluate securities
markets are based on the advisers' understanding of the interplay of
market factors and do not assure successful investment. The markets, or
the prices of individual securities, may be affected by factors not
foreseen in developing the models.
YEAR 2000:
Like other mutual funds (and most organizations around the world), the
funds could be adversely affected by computer problems related to the
year 2000. These could interfere with the operations of each fund, its
adviser, distributor or sub-adviser, or could impact companies in which
the funds invest. The year 2000 poses an even greater risk for foreign
securities than for other securities in which the funds invest.
While no one knows if these problems will have any impact on the funds
or on financial markets in general, the adviser and its affiliates are
taking steps to protect fund investors. These include efforts to
determine that the problems will not directly affect the systems used by
major service providers.
Whether these steps will be effective can only be known for certain in
the year 2000.
PORTFOLIO TURNOVER:
Global Income and Europe Fund each may have an annual portfolio turnover
rate significantly in excess of 100%. High turnover rates can result in
increased trading costs and higher levels of realized capital gains.
Legg Mason Global Trust
7
<PAGE>
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PERFORMANCE
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The information below provides an indication of the risks of investing
in a fund by showing changes in the fund's performance from year to
year. Annual returns assume reinvestment of dividends and distributions.
Historical performance of a fund does not necessarily indicate what will
happen in the future. As of the date of this prospectus, the Navigator
Classes of Global Income and Emerging Markets have not yet commenced
operations; the Navigator Classes of International Equity and Europe
Fund commenced operations on May 5, 1998, and August 21, 1997,
respectively. The returns presented for Global Income, Emerging Markets
and International Equity are for the funds' Primary Class shares, which
are not offered in this prospectus. Navigator Class and Primary Class
shares are invested in the same portfolio of securities, and the annual
returns for each class of shares would differ only to the extent that
the Navigator Class would pay lower expenses, and therefore would have
higher returns.
GLOBAL INCOME TRUST -- PRIMARY CLASS
YEAR BY YEAR TOTAL RETURN AS OF DECEMBER 31 OF EACH YEAR (%)
[BAR CHART APPEARS HERE]
1994 1995 1996 1997 1998
(1.40) 20.80 8.22 (1.69) 11.50
DURING THE LAST FIVE CALENDAR YEARS
OF PRIMARY CLASS:
<TABLE>
<S> <C> <C>
QUARTER ENDED TOTAL RETURN
- ------------------- ------------------- -------------------
BEST QUARTER MARCH 31, 1995 +7.86%
WORST QUARTER MARCH 31, 1999 -4.75%
</TABLE>
In the following table, average annual total returns as of December 31,
1998, are compared with the Salomon Brothers World Government Bond
Index.
<TABLE>
<S> <C> <C> <C>
1 YEAR 5 YEARS LIFE OF CLASS
- ------------------------------------ ------------ ----------- --------------------
GLOBAL INCOME -- PRIMARY CLASS +11.50% +7.16% +7.45%(a)
SALOMON BROTHERS WORLD
GOVERNMENT BOND INDEX +15.31% +7.85% +7.87%(b)
</TABLE>
(a) April 15, 1993 (commencement of operations of Primary Class) to
December 31, 1998.
(b) For the period April 30, 1993 to December 31, 1998.
8
Legg Mason Global Trust
<PAGE>
INTERNATIONAL EQUITY TRUST -- PRIMARY CLASS
YEAR BY YEAR TOTAL RETURN AS OF DECEMBER 31 OF EACH YEAR (%)
[BAR CHART APPEARS HERE]
1996 1997 1998
16.49 1.76 8.49
DURING THE LAST THREE CALENDAR YEARS
OF PRIMARY CLASS:
<TABLE>
<S> <C> <C>
QUARTER ENDED TOTAL RETURN
- ------------------- --------------------- -------------------
BEST QUARTER MARCH 31, 1998 +15.07%
WORST QUARTER SEPTEMBER 30, 1998 -15.17%
</TABLE>
In the following table, average annual total returns as of December 31,
1998, are compared with the Morgan Stanley Capital International Europe,
Australia and the Far East (MSCI EAFE) Index, which is an unmanaged
index of common stocks of foreign companies.
<TABLE>
<S> <C> <C>
1 YEAR LIFE OF CLASS
- --------------------------------------------------- ------------ ----------------------
INTERNATIONAL EQUITY TRUST -- PRIMARY CLASS +8.49% +8.88% (a)
INTERNATIONAL EQUITY TRUST -- NAVIGATOR CLASS N/A -9.42%(b)
MSCI EAFE INDEX +20.00% +11.18%(c)
</TABLE>
(a) February 17, 1995 (commencement of operations of Primary Class) to
December 31, 1998.
(b) May 5, 1998 (commencement of operations of Navigator Class) to
December 31, 1998. The cumulative return presented in the table is based
only on an eight-month period and therefore is not necessarily
representative of how the fund will perform over time.
(c) For the period February 28, 1995 to December 31, 1998.
Legg Mason Global Trust
9
<PAGE>
EMERGING MARKETS TRUST -- PRIMARY CLASS
YEAR BY YEAR TOTAL RETURN AS OF DECEMBER 31 OF EACH YEAR (%)
[BAR CHART APPEARS HERE]
1997 1998
(6.18) (29.34)
DURING THE LAST TWO CALENDAR YEARS
OF PRIMARY CLASS:
<TABLE>
<S> <C> <C>
QUARTER ENDED TOTAL RETURN
- ------------------- ----------------------- -------------------
BEST QUARTER DECEMBER 31, 1998 +16.19%
WORST QUARTER SEPTEMBER 30, 1998 -28.18%
</TABLE>
In the following table, average annual total returns as of December 31,
1998, are compared with the Morgan Stanley Capital International
Emerging Markets Free (MSCI EM Free) Index.
<TABLE>
<S> <C> <C>
1 YEAR LIFE OF CLASS
- --------------------------------------------- ------------- ----------------------
EMERGING MARKETS TRUST -- PRIMARY CLASS -29.34% -12.89%(a)
MSCI EM FREE INDEX -25.34% -16.07%(b)
</TABLE>
(a) May 28, 1996 (commencement of operations of Primary Class) to
December 31, 1998.
(b) For the period May 31, 1996 to December 31, 1998.
10
Legg Mason Global Trust
<PAGE>
EUROPE FUND -- NAVIGATOR CLASS
YEAR BY YEAR TOTAL RETURN AS OF DECEMBER 31 OF EACH YEAR (%)
[BAR CHART APPEARS HERE]
1998
42.51
DURING 1998:
<TABLE>
<S> <C> <C>
QUARTER ENDED TOTAL RETURN
- ------------------- ----------------------- -------------------
BEST QUARTER MARCH 31, 1998 +25.71%
WORST QUARTER SEPTEMBER 30, 1998 -12.96%
</TABLE>
In the following table, average annual total returns as of December 31,
1998, are compared with the Morgan Stanley Capital International (MSCI)
Europe Index, a broad-based, unmanaged index based on the share prices
of common stocks in different European countries. The countries included
in this index are Austria, Belgium, Denmark, Finland, France, Germany,
Ireland, Italy, the Netherlands, Norway, Spain, Sweden, Switzerland and
the U.K.
<TABLE>
<S> <C> <C>
1 YEAR LIFE OF CLASS
- ------------------------------------ ------------- ---------------------
EUROPE FUND -- NAVIGATOR CLASS +42.51% +34.07%(a)
MSCI EUROPE INDEX +28.53% +22.26%(b)
</TABLE>
(a) August 21, 1997 (commencement of operations of Navigator Class) to
December 31, 1998.
(b) The index's return is for the period July 31, 1997 to December 31,
1998.
Legg Mason Global Trust
11
<PAGE>
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FEES AND EXPENSES OF THE FUNDS
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The tables below describe the fees and expenses you will incur directly
or indirectly as an investor in a fund. Each fund pays operating
expenses directly out of its assets, so they will lower that fund's
share price and dividends. Other expenses include transfer agency,
custody, professional and registration fees. Emerging Markets imposes a
2% redemption fee on all redemptions, including exchanges, of fund
shares held for less than one year.
The fees shown are current fees, and the expenses shown are based on
expenses for the fiscal year ended December 31, 1998. The fees and
expenses are calculated as a percentage of average net assets.
<TABLE>
<S> <C>
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
- -------------------------------------------------------------
EMERGING MARKETS TRUST REDEMPTION FEE 2.00%*
</TABLE>
* Proceeds of shares redeemed or exchanged within one year of purchase
will be subject to a 2% redemption fee. The fee is paid directly to the
fund and not to the manager or distributor.
<TABLE>
<S> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
- ---------------------------------------------------------------------------------------------
GLOBAL INTERNATIONAL EMERGING
INCOME EQUITY MARKETS EUROPE
NAVIGATOR CLASS SHARES OF: TRUST TRUST TRUST FUND
- -------------------------------- ------ ------ ------ ------
MANAGEMENT FEES (a) 0.75% 0.75% 1.00% 1.00%
DISTRIBUTION AND SERVICE
(12B-1) FEES NONE NONE NONE NONE
OTHER EXPENSES 0.37% 0.29% 0.78% 0.63%
- -------------------------------- ------ ------ ------ ------
TOTAL ANNUAL FUND OPERATING
EXPENSES (a) 1.12% 1.04% 1.78% 1.63%
</TABLE>
(a) Legg Mason Fund Adviser, Inc., as manager/investment adviser, has a
voluntary agreement to waive fees so that Navigator Class expenses
(exclusive of taxes, interest, brokerage and extraordinary expenses) do
not exceed annual rates of each fund's average daily net assets
attributable to Navigator shares as follows: for Global Income, 1.15%
indefinitely; for International Equity, 1.25% indefinitely; for Emerging
Markets, 1.50% until May 1, 2000; and for Europe Fund, 1.60% until May
1, 2000. These voluntary waivers may be terminated at any time. With
these waivers, management fees and total annual fund operating expenses
for the fiscal year ended December 31, 1998, were 0.72% and 1.50%,
respectively, for Emerging Markets, and 0.92% and 1.55%, respectively,
for Europe Fund. No fee waivers were necessary for Global Income and
International Equity.
EXAMPLE:
This example helps you compare the cost of investing in a fund with the
cost of investing in other mutual funds. Although your actual costs may
be higher or lower, you would pay the following expenses on a $10,000
investment in a fund, assuming (1) a 5% return each year, (2) the fund's
operating expenses remain the same as shown in the table above, and (3)
that you redeem all of your shares at the end of the time periods shown.
<TABLE>
<S> <C> <C> <C> <C>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------------------------- ---------- ----------- ----------- -----------
GLOBAL INCOME TRUST $ 114 $ 356 $ 617 $ 1,363
INTERNATIONAL EQUITY TRUST $ 106 $ 331 $ 574 $ 1,271
EMERGING MARKETS TRUST $ 387 $ 560 $ 964 $ 2,095
EMERGING MARKETS TRUST
(ASSUMING NO REDEMPTION) $ 181 $ 560 $ 964 $ 2,095
EUROPE FUND $ 166 $ 514 $ 887 $ 1,933
</TABLE>
12
Legg Mason Global Trust
<PAGE>
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MANAGEMENT
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MANAGERS AND INVESTMENT ADVISERS:
Legg Mason Fund Adviser, Inc., 100 Light Street, Baltimore, Maryland
21202, is the manager of the funds. The manager is responsible for
investment management and administrative services and for overseeing the
funds' relationships with outside service providers, such as the
custodian, transfer agent, accountants, and lawyers.
For its services during the fiscal year ended December 31, 1998, each
fund paid the manager a percentage of its average daily net assets as
follows:
<TABLE>
<S> <C>
GLOBAL INCOME TRUST 0.75%
INTERNATIONAL EQUITY TRUST 0.75%
EMERGING MARKETS TRUST 0.72%
</TABLE>
Prior to October 6, 1999, Bartlett & Co. served as Europe Fund's manager
under compensation arrangements substantially similar to those with the
current manager. For its services during the fiscal year ended December
31, 1998, the fund paid Bartlett & Co. a fee equal to 0.92% of its
average net assets.
Legg Mason Fund Adviser acts as manager or adviser to investment
companies with aggregate assets of $19.6 billion as of August 31, 1999.
Batterymarch Financial Management, Inc., 200 Clarendon Street, Boston,
Massachusetts 02116, is investment adviser to International Equity Trust
and Emerging Markets Trust. The adviser is responsible for the actual
investment management of these funds, which includes making investment
decisions and placing orders to buy or sell a particular security.
The manager pays Batterymarch a monthly fee of 66 2/3% of the fee it
receives from International Equity Trust and a monthly fee of 75% of the
fee it receives from Emerging Markets Trust. Fees paid to the adviser
are net of any waivers.
Batterymarch acts as investment adviser to institutional accounts, such
as corporate pension plans, mutual funds and endowment funds, as well as
to individual investors. Total assets under management by Batterymarch
were approximately $5.6 billion as of August 31, 1999.
Western Asset Management Company, 117 East Colorado Boulevard, Pasadena,
California 91105, is investment adviser to Global Income Trust. The
adviser is responsible for the actual investment management of the fund,
which includes making investment decisions and placing orders to buy or
sell a particular security. The manager pays Western Asset Management a
monthly fee of 53 1/3% of the fee it receives from Global Income Trust,
net of any waivers.
Western Asset Management acts as investment adviser to investment
companies and private accounts with aggregate assets of $56.7 billion as
of August 31, 1999.
Western Asset Global Management Limited, 155 Bishopgate, London,
England, serves as investment sub-adviser to Global Income Trust. The
sub-adviser is responsible for providing research and analytical and
trading support for the fund's investment programs, as well as
exercising investment discretion for part of the portfolio, subject to
the supervision of Western Asset Management Company and Legg Mason Fund
Adviser.
For its services and for expenses borne by Western Asset Global under
its sub-advisory agreement, the adviser pays the sub-adviser a fee at an
annual rate of 0.20% of the fund's average daily net assets, net of any
waivers. The manager also pays the sub-adviser a sub-administration fee
at an annual rate of 0.10% of the fund's average daily net assets, net
of any waivers, for certain administrative services performed.
Western Asset Global renders investment advice to institutional, private
and commingled fund portfolios with assets of over $3.9 billion as of
August 31, 1999. Western Asset Global has managed global fixed income
assets for U.S. and non-U.S. clients since 1984.
Lombard Odier International Portfolio Management Limited, Norfolk House,
13 Southampton Place, London, England, serves as investment sub-adviser
to Europe Fund. For its services, Lombard Odier receives a monthly fee
from Legg Mason Fund Adviser equal to 60% of the fee actually paid to
Legg Mason Fund Adviser by the fund (net
Legg Mason Global Trust
13
<PAGE>
of any waivers). Lombard Odier specializes in advising and managing
investment portfolios for institutional clients and mutual funds.
Lombard Odier is an indirect wholly owned subsidiary of Lombard Odier &
Cie, a Swiss private bank.
PORTFOLIO MANAGEMENT:
Batterymarch investment teams have been responsible for the day-to-day
management of International Equity Trust and Emerging Markets Trust
since their inception.
An investment committee at Western Asset Management is responsible for
the day-to-day management of Global Income Trust.
Neil Worsley and William Lovering are responsible for co-managing Europe
Fund. Mr. Worsley has been Director and Senior Investment Manager of
Lombard Odier since June 1, 1996. Prior thereto, he was an Assistant
Director and Senior Fund Manager. He joined Lombard Odier in 1990. Mr.
Lovering has been Assistant Director of Lombard Odier since June 1,
1996. Prior thereto, he was a Senior Fund Manager. He joined the firm in
1994. Previously, Mr. Lovering was employed at Arbuthnot Latham
Investment Management.
DISTRIBUTOR OF THE FUNDS' SHARES:
Legg Mason Wood Walker, Incorporated, 100 Light Street, Baltimore,
Maryland 21202, is the distributor of each fund's shares pursuant to an
Underwriting Agreement with each fund. The Underwriting Agreement
obligates Legg Mason to pay certain expenses in connection with offering
fund shares, including compensation to its financial advisors; the
printing and distribution of prospectuses, statements of additional
information, and shareholder reports (after these have been printed and
mailed to existing shareholders at the fund's expense); supplementary
sales literature; and advertising materials.
Legg Mason and Legg Mason Fund Adviser may pay others out of their own
assets to support the distribution of Navigator Class shares and
shareholder servicing.
Legg Mason Fund Adviser, Batterymarch, Western Asset Management, Western
Asset Global and the distributor are wholly owned subsidiaries of Legg
Mason, Inc., a financial services holding company.
14
Legg Mason Global Trust
<PAGE>
[GRAPHIC APPEARS HERE]
HOW TO INVEST
----------------------------------------------------------------------------
Navigator Class shares are currently offered for sale only to:
o Institutional clients of Legg Mason Trust Company ("Institutional
Clients") for which they exercise discretionary investment
management responsibility and accounts of the customers with such
Institutional Clients ("Customers").
o Qualified retirement plans managed on a discretionary basis and
having net assets of at least $200 million.
o Clients of Bartlett & Co. who, as of December 19, 1996, were
shareholders of Bartlett Short Term Bond Fund or Bartlett Fixed
Income Fund and for whom Bartlett acts as an ERISA fiduciary.
o Any qualified retirement plan of Legg Mason, Inc. or of any of
its affiliates.
o Certain institutions who were clients of Fairfield Group, Inc. as
of February 28, 1999, for investment of their own monies and
monies for which they act in a fiduciary capacity.
o Shareholders of Class Y shares of Bartlett Europe Fund or
Bartlett Financial Services Fund on
October 5, 1999.
Eligible investors may purchase Navigator shares through a brokerage
account at Legg Mason. The minimum initial investment is $50,000 and the
minimum for each purchase of additional shares is $100. Institutional
Clients may set different minimums for their Customers' investments in
accounts invested in Navigator shares.
Customers of certain Institutional Clients that have omnibus accounts
with the fund's transfer agent can purchase shares through those
institutions. The distributor may pay such Institutional Clients for
account servicing. Institutional Clients may charge their Customers for
services provided in connection with the purchase and redemption of
shares. Information concerning these services and any applicable charges
will be provided by the Institutional Clients. This prospectus should by
read by Customers in connection with any such information received by
Institutional Clients. Any such fees, charges or requirements imposed by
Institutional Clients will be in addition to the fees and requirements
of this prospectus.
Certain institutions that have agreements with Legg Mason or the funds
may be authorized to accept purchase and redemption orders on their
behalf. Once the authorized institution accepts the order, you will
receive the next determined net asset value. You should consult with
your institution to determine the time by which it must receive your
order to get that day's share price. It is the institution's
responsibility to transmit your order to the funds in a timely fashion.
Purchase orders received by Legg Mason before the close of the New York
Stock Exchange (normally 4:00 p.m., Eastern time) will be processed at
the fund's net asset value as of the close of the Exchange on that day.
Orders received after the close of the Exchange will be processed at the
fund's net asset value as of the close of the Exchange on the next day
the Exchange is open. Payment must be made within three business days to
the selling organization.
You will begin to earn dividends on shares of Global Income as of
settlement date, which is normally the third business day after your
order is placed.
Legg Mason Global Trust
15
<PAGE>
[GRAPHIC APPEARS HERE]
HOW TO SELL YOUR SHARES
----------------------------------------------------------------------------
To redeem your shares by telephone:
o Call 1-800-822-5544
Please have available the number of shares (or dollar amount) to be
redeemed and the account number.
The funds will follow reasonable procedures to ensure the validity of
any telephone redemption request, such as requesting identifying
information from callers or employing identification numbers. Unless you
specify that you do not wish to have telephone redemption privileges,
you may be held responsible for any fraudulent telephone order.
Customers of Institutional Clients may redeem only in accordance with
instructions and limitations pertaining to their account at the
institution.
Redemption orders received by Legg Mason before the close of the
Exchange will be transmitted to the funds' transfer agent. The order
will be processed at that day's net asset value. Redemption orders
received by Legg Mason after the close of the Exchange will be processed
at the closing net asset value on the next day the Exchange is open.
Your order will be processed promptly and you will generally receive the
proceeds by mail to the name and address on the account registration
within a week. You may also have your telephone redemption requests paid
by a direct wire to a previously designated domestic commercial bank
account.
Payment of the proceeds of redemptions of shares that were recently
purchased by check or acquired through reinvestment of dividends on such
shares may be delayed for up to 10 days from the purchase date in order
to allow for the check to clear.
EMERGING MARKETS TRUST REDEMPTION FEE:
The fund is intended for long-term investors. Short-term "market timers"
who engage in frequent purchases and redemptions affect the fund's
investment planning and create additional transaction costs. For this
reason, the fund imposes a 2% redemption fee on all redemptions,
including exchanges, of fund shares held for less than one year. The fee
will be paid directly to the fund to help offset the costs imposed on it
by short-term trading in emerging markets.
The fund will use the "first-in, first-out" method to determine the
one-year holding period. The date of redemption or exchange will be
compared with the earliest purchase date of shares held in the account.
The fee will not apply to any shares purchased through reinvestment of
dividends or other distributions or to shares held in retirement plans;
however, it will apply to shares held in IRA accounts (including
IRA-based plans) and to shares purchased through automatic investment
plans.
16
Legg Mason Global Trust
<PAGE>
[GRAPHIC APPEARS HERE]
ACCOUNT POLICIES
----------------------------------------------------------------------------
CALCULATION OF NET ASSET VALUE:
Net asset value per Navigator Class share is determined daily as of the
close of the New York Stock Exchange (normally 4 p.m., Eastern time), on
every day the Exchange is open. To calculate each fund's Navigator share
price, the fund's assets attributable to Navigator shares are valued and
totaled, liabilities attributable to Navigator shares are subtracted,
and the resulting net assets are divided by the number of Navigator
shares outstanding. Each fund's securities are valued on the basis of
market quotations or, lacking such quotations, at fair value as
determined under procedures adopted by the Board of Directors.
Securities for which market quotations are readily available are valued
at the last sale price of the day for a comparable position or, in the
absence of any such sales, the last available bid price for a comparable
position. Where a security is traded on more than one market, which may
include foreign markets, the securities are generally valued on the
market considered by each fund's adviser to be the primary market.
Securities with remaining maturities of 60 days or less are valued at
amortized cost.
Each fund will value its foreign securities in U.S. dollars on the basis
of the then-prevailing exchange rates. Most securities held by Global
Income are valued on the basis of valuations furnished by a service
which utilizes both dealer-supplied valuations and electronic data
processing techniques which take into account appropriate factors such
as institutional-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics
and other data.
OTHER:
Fund shares may not be held in, or transferred to, an account with any
firm that does not have an agreement with Legg Mason or its affiliates.
Each fund reserves the right to:
o Reject any order for shares or suspend the offering of shares for
a period of time.
o Change its minimum investment amounts.
o Delay sending out redemption proceeds for up to seven days. The
funds expect to use this authority only in cases of very large
redemptions, excessive trading or during unusual market
conditions. The funds may delay redemptions beyond seven days, or
suspend redemptions, only as permitted by the SEC.
Legg Mason Global Trust
17
<PAGE>
[GRAPHIC APPEARS HERE]
SERVICES FOR INVESTORS
----------------------------------------------------------------------------
CONFIRMATIONS AND ACCOUNT STATEMENTS:
Confirmations will be sent to Institutional Clients after each
transaction involving Navigator shares, and will include the total
number of shares being held by the transfer agent. The transfer agent
will send confirmations of each purchase and redemption transaction
(except a reinvestment of dividends or capital gain distributions).
Beneficial ownership of shares by Customer accounts will be recorded by
the Institutional Client and reflected in their regular account
statements.
EXCHANGE PRIVILEGE:
Navigator shares of the funds may be exchanged for Navigator shares of
any of the other Legg Mason funds or the Legg Mason money market funds,
provided these funds are eligible for sale in your state of residence.
You can request an exchange in writing or by phone. Be sure to read the
current prospectus for any fund into which you are exchanging.
Other than the redemption fee imposed on exchanges of Emerging Markets,
there is currently no fee for exchanges; however, you may be subject to
a sales charge when exchanging into a fund that has one. An exchange of
a fund's shares will be treated as a sale of the shares and any gain on
the transaction may be subject to tax.
Each fund reserves the right to:
o Terminate or limit the exchange privilege of any shareholder who
makes more than four exchanges from the fund in one calendar year.
o Terminate or modify the exchange privilege after 60 days' written
notice to shareholders.
Some Institutional Clients may not offer all of the Navigator funds for
exchange.
18
Legg Mason Global Trust
<PAGE>
[GRAPHIC APPEARS HERE]
DIVIDENDS AND TAXES
----------------------------------------------------------------------------
Global Income declares and pays dividends from its net investment income
monthly. International Equity, Emerging Markets and Europe Fund each
declares and pays these dividends on an annual basis.
Distributions of substantially all net capital gain (the excess of net
long-term capital gain over net short-term capital loss) and any net
realized gains from foreign currency transactions generally are declared
and paid after the end of the tax year in which the gain is realized. A
second distribution of net capital gain may be necessary in some years
to avoid imposition of a federal excise tax.
Dividends and other distributions will be automatically reinvested in
additional Navigator shares of the fund, unless you elect to receive
your dividends in cash. To change your election, you must notify the
fund at least 10 days before the next dividend and/or other distribution
is to be paid.
If a shareholder has elected to receive dividends and/or distributions
in cash and the postal or other delivery service is unable to deliver
checks to the shareholder's address of record, such shareholder's
distribution option will automatically be converted to having all
dividends and other distributions reinvested in additional shares. No
interest will accrue on amounts represented by uncashed distribution or
redemption checks.
Fund dividends and other distributions are taxable to investors (other
than retirement plans and other tax-exempt investors) whether received
in cash or reinvested in additional Navigator shares of the fund.
Dividends of net investment income and any net short-term capital gains
will be taxable as ordinary income. Distributions of a fund's net
capital gain will be taxable as long-term capital gain, regardless of
how long you have held your fund shares.
The sale or exchange of fund shares may result in a taxable gain or
loss, depending on whether the proceeds are more or less than the cost
of your shares.
Each fund's dividend and interest income, and gains realized from
disposition of foreign securities, may be subject to income, withholding
or other taxes imposed by foreign countries and U.S. possessions.
A tax statement will be sent to each investor at the end of each year
detailing the tax status of your distributions.
Each fund will withhold 31% of all dividends, capital gain distributions
and redemption proceeds payable to individuals and certain other
noncorporate shareholders who do not provide the fund with a valid
taxpayer identification number. Each fund will also withhold 31% of all
dividends and capital gain distributions payable to such shareholders
who are otherwise subject to backup withholding.
Because each investor's tax situation is different, please consult your
tax adviser about federal, state and local tax considerations.
Legg Mason Global Trust
19
<PAGE>
[GRAPHIC APPEARS HERE]
FINANCIAL HIGHLIGHTS
----------------------------------------------------------------------------
The following financial highlights table is intended to help you
understand each fund's financial performance for the past five years or
since inception. Total return represents the rate that an investor would
have earned (or lost) on an investment in a fund, assuming reinvestment
of all dividends and distributions. The information for all periods
other than January 1, 1999 through June 30, 1999, has been audited by
the funds' independent accountants, PricewaterhouseCoopers LLP, whose
report, along with the funds' financial statements, is incorporated by
reference into the Statement of Additional Information (see back cover)
and is included in the annual report. The annual report is available
upon request by calling toll-free 1-800-822-5544.
<TABLE>
<S> <C> <C> <C> <C>
GLOBAL INCOME, INTERNATIONAL EQUITY AND EMERGING MARKETS
INCOME FROM
INVESTMENT OPERATIONS
----------------------------------------------------------
NET REALIZED &
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS,
OPTIONS, FUTURES
FOR THE NET ASSET NET AND FOREIGN TOTAL FROM
YEARS ENDED VALUE, INVESTMENT CURRENCY INVESTMENT
DEC. 31, BEGINNING OF YEAR INCOME TRANSACTIONS OPERATIONS
- ------------------------------------------------------------------------------------------------
GLOBAL INCOME TRUST -- PRIMARY CLASS:
6/30/99* $ 10.14 $ .18 $ (1.04) $ (.86)
1998 9.60 .37 .70 1.07
1997 10.41 .54 (.71) (.17)
1996 10.33 .59 .21 .80
1995 9.54 .63 1.32 1.95
1994 10.27 .57(a) (.71) (.14)
- ------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY TRUST -- PRIMARY CLASS:
6/30/99* $ 12.64 $ .04 $ .11 $ .15
1998 11.78 .01 .99 1.00
1997 12.09 .02 .19 .21
1996 10.70 .02(b) 1.74 1.76
1995 (c) 10.00 .04(b) .77 .81
- ------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY TRUST -- NAVIGATOR CLASS:
6/30/99* $ 12.64 $ .12 $ .10 $ .22
1998 (d) 14.21 .10 (1.44) (1.34)
- ------------------------------------------------------------------------------------------------
EMERGING MARKETS TRUST -- PRIMARY CLASS:
6/30/99* $ 6.96 $ (.01)(e) $ 3.47 $ 3.46
1998 9.85 .01 (e) (2.90) (2.89)
1997 10.51 (.02)(e) (.63) (.65)
1996 (f) 10.00 (.03)(e) .57 .54
</TABLE>
20
Legg Mason Global Trust
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
DISTRIBUTIONS
- ------------------------------------------------------------------------------------------------------
IN EXCESS
IN EXCESS FROM NET OF NET
FOR THE FROM NET OF NET REALIZED REALIZED NET ASSET
YEARS ENDED INVESTMENT INVESTMENT GAIN ON GAIN ON TOTAL VALUE,
DEC. 31, INCOME INCOME INVESTMENTS INVESTMENTS DISTRIBUTIONS END OF YEAR
- ------------------------------------------------------------------------------------------------------
GLOBAL INCOME TRUST -- PRIMARY CLASS:
6/30/99* $ (.16) $ -- $ (.08) $ -- $ (.24) $ 9.04
1998 (.47) -- (.06) -- (.53) 10.14
1997 (.48) (.05) (.11) -- (.64) 9.60
1996 (.62) -- (.10) -- (.72) 10.41
1995 (1.16) -- -- -- (1.16) 10.33
1994 (.59) -- -- -- (.59) 9.54
- ------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY TRUST -- PRIMARY CLASS:
6/30/99* $ (.05) $ -- $ -- $ -- $ (.05) $ 12.74
1998 (.14) -- -- -- (.14) 12.64
1997 (.08) -- (.44) -- (.52) 11.78
1996 (.05) -- (.32) -- (.37) 12.09
1995 (c) (.04) -- -- (.07) (.11) 10.70
- ------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY TRUST -- NAVIGATOR CLASS:
6/30/99* $ (.14) $ -- $ -- $ -- $ (.14) $ 12.72
1998 (d) (.23) -- -- -- (.23) 12.64
- ------------------------------------------------------------------------------------------------------
EMERGING MARKETS TRUST -- PRIMARY CLASS:
6/30/99* $ -- $ -- $ -- $ -- $ -- $ 10.42
1998 -- -- -- -- -- 6.96
1997 (.01) -- -- -- (.01) 9.85
1996 (f) (.03) -- -- -- (.03) 10.51
- ------------------------------------------------------------------------------------------------------
</TABLE>
Legg Mason Global Trust
21
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------------------------------------------------------
NET INVESTMENT
EXPENSES INCOME (LOSS)
FOR THE TO AVERAGE TO AVERAGE PORTFOLIO NET ASSETS,
YEARS ENDED TOTAL RETURN NET ASSETS NET ASSETS TURNOVER RATE END OF YEAR
DEC. 31, (%) (%) (%) (%) (000)
- ---------------------------------------------------------------------------------------------------------------------
GLOBAL INCOME TRUST -- PRIMARY CLASS:
6/30/99* (8.65)(g) 1.87(h) 4.01(h) 314(h) $ 98,872
1998 11.50 1.87 4.51 288 120,805
1997 (1.69) 1.86 5.39 241 136,732
1996 8.22 1.86 5.80 172 161,549
1995 20.80 1.81 5.72 169 153,954
1994 (1.40) 1.34(a) 5.71 127 145,415
- ---------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY TRUST -- PRIMARY CLASS:
6/30/99* 1.19(g) 2.14(h) .78(h) 138(h) $ 253,699
1998 8.49 2.14 .06 72 258,521
1997 1.76 2.17 .17 59 227,655
1996 16.49 2.25(b) .21(b) 83 167,926
1995 (c) 8.11(g) 2.25(b,h) .52(b,h) 58(h) 65,947
- ---------------------------------------------------------------------------------------------------------------------
INTERNATIONAL EQUITY TRUST -- NAVIGATOR CLASS:
6/30/99* 1.76(g) 1.04(h) 1.90(h) 138(h) $ 45
1998 (d) (9.42)(g) 1.04(h) 1.17(h) 72(h) 45
- ---------------------------------------------------------------------------------------------------------------------
EMERGING MARKETS TRUST -- PRIMARY CLASS:
6/30/99* 49.57(g) 2.50(e,h) (.38)(e,h) 165(h) $ 74,060
1998 (29.34) 2.50(e) .09(e) 76 42,341
1997 (6.18) 2.50(e) (.76)(e) 63 65,302
1996 (a) 5.40(g) 2.50(e,h) (.68)(e,h) 46(h) 21,206
</TABLE>
(a) Net of fees waived by the manager for expenses in excess of voluntary
expense limitations of 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%
indefinitely. If no fees had been waived by the manager, the annualized
ratio of expenses to average daily net assets for 1994 would have been
1.82%.
(b) Net of fees waived by the manager for expenses in excess of voluntary
expense limitation of 2.25%. If no fees had been waived by the manager,
the annualized ratio of expenses to average daily net assets for each
period would have been as follows: 1996, 2.32%; and 1995, 2.91%.
(c) For the period February 17, 1995 (commencement of operations) to December
31, 1995.
(d) May 5, 1998 (commencement of operations of Navigator Class) to December
31, 1998.
(e) Net of fees waived by the manager for expenses in excess of a voluntary
expense limitation of 2.5%. If no fees had been waived by the manager, the
annualized ratio of expenses to average daily net assets would have been
as follows: for the six months ended June 30, 1999, 2.99%; 1998, 2.78%;
1997, 2.86%; and 1996; 3.71%.
(f) May 28, 1996 (commencement of operations) to December 31, 1996.
(g) Not annualized.
(h) Annualized.
* Unaudited. For the period January 1, 1999 to June 30, 1999.
22
Legg Mason Global Trust
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
EUROPE FUND
INCOME FROM INVESTMENT OPERATIONS
------------------------------------------------------------------------------
NET REALIZED &
FOR THE NET ASSET NET UNREALIZED GAIN TOTAL FROM
YEARS ENDED VALUE, INVESTMENT (LOSS) ON INVESTMENT
DEC. 31, BEGINNING OF YEAR INCOME INVESTMENTS OPERATIONS
------------------------------------------------------------------------------------------------
NAVIGATOR CLASS:
6/30/99* $ 24.78 $ .36 $ (.65) $ (.29)
1998 21.01 .22 (a) 8.37 8.59
1997 (b) 25.61 (.04)(a) 1.27 1.23
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
DISTRIBUTIONS
- -------------------------------------------------------------------------
FOR THE FROM NET FROM NET NET ASSET
YEARS ENDED INVESTMENT REALIZED TOTAL VALUE,
DEC. 31, INCOME GAINS DISTRIBUTIONS END OF YEAR
- -------------------------------------------------------------------------
NAVIGATOR CLASS:
6/30/99* $ (.07) $ (.02) $ (.09) $ 24.40
1998 (.51) (4.31) (4.82) 24.78
1997 (b) -- (5.83) (5.83) 21.01
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA
------------------------------------------------------------------------------------------------------
NET INVESTMENT
EXPENSES INCOME (LOSS)
FOR THE TO AVERAGE TO AVERAGE PORTFOLIO NET ASSETS,
YEARS ENDED TOTAL RETURN NET ASSETS NET ASSETS TURNOVER RATE END OF YEAR
DEC. 31, (%) (%) (%) (%) (000)
- ----------------------------------------------------------------------------------------------------------------------
NAVIGATOR CLASS:
6/30/99* (1.6)(c) 1.51(d) .53(d) 81(d) $ 309
1998 42.5 1.55(a) 1.31(a) 103 247
1997 (b) 4.9(c,e) 1.31(a,d) (.60)(a,d) 123 8,025
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Net of fees waived pursuant to a voluntary expense limitation of 1.5%
until April 30, 1998, and 1.6% until May 1, 2000. If no fees had been
waived, the annualized ratio of expenses to average daily net assets would
have been: 1998, 1.63%; and 1997, 1.49%.
(b) August 21, 1997 (commencement of operations of Navigator Class) to
December 31, 1997.
(c) Not annualized.
(d) Annualized.
(e) Prior to July 21, 1997, total return for Worldwide Value Fund, a
closed-end fund, was calculated using market value per share.
* Unaudited. For the period January 1, 1999 to June 30, 1999.
Legg Mason Global Trust
23
<PAGE>
LEGG MASON GLOBAL TRUST, INC.
---------------------------------------------------------------------
The following additional information about the funds is available upon
request and without charge:
STATEMENT OF ADDITIONAL INFORMATION (SAI) - The SAI is filed with the
Securities and Exchange Commission (SEC) and is incorporated by
reference into (is considered part of) the prospectus. The SAI provides
additional details about each fund and its policies.
ANNUAL AND SEMI-ANNUAL REPORTS - additional information about each
fund's investments is available in the funds' annual and semi-annual
reports to shareholders. These reports provide detailed information
about each fund's portfolio holdings and operating results.
TO REQUEST THE SAI OR ANY REPORTS TO SHAREHOLDERS, OR TO OBTAIN MORE
INFORMATION:
- call toll-free 1-800-822-5544
- visit us on the Internet via http://www.leggmason.com
- write to us at: Legg Mason Wood Walker, Incorporated
100 Light Street, P.O. Box 1476
Baltimore, Maryland 21203-1476
Information about the funds, including the SAI, can be reviewed and
copied at the SEC's public reference room in Washington, D.C. (phone
1-800-SEC-0330). Reports and other information about the fund are
available on the SEC's Internet site at http://www.sec.gov. Investors
may also write to: SEC, Public Reference Section, Washington, D.C.
20549-6009. The SEC charges a fee for making copies.
LMF-159 SEC file number 811-7418
