<PAGE>
--------------------------------------
Annual Report
December 31, 1999
Legg Mason
Global
Trust, Inc.
International Equity Trust
Europe Fund
Navigator Class
[Legg Mason Funds Logo]
The Art of Investing/SM/
--------------------------------------
<PAGE>
To Our Shareholders,
We are pleased to provide you with Legg Mason Global Trust's annual report for
the Navigator Class of the International Equity Trust and Europe Fund ("Funds")
for the year ended December 31, 1999.
With this report, we welcome the Europe Fund and its shareholders to the Legg
Mason Family of Funds. The Europe Fund, formerly a series of the Bartlett
Capital Trust, reorganized as a Legg Mason Fund on October 5, 1999, following
the approval given by its shareholders at a special meeting held on September
23, 1999.
Beginning on the next page, the portfolio managers responsible for the Funds'
portfolios discuss results for 1999 and the investment outlook. The Funds' total
returns for various periods ending December 31, 1999, are shown later in this
report. For each of the Funds, we remind you that historical performance is not
indicative of future results, and the principal value of our holdings will
continue to fluctuate so that shares, when redeemed, may be worth more or less
than their original cost.
PricewaterhouseCoopers LLP, Global Trust's independent accountants, has
completed its annual examination, and audited financial statements for the
fiscal year ended December 31, 1999, are included in this report.
The Board of Directors approved long-term capital gains distributions of
$0.865 and $2.08 per share to shareholders of International Equity Trust and
Europe Fund, respectively, which were paid on November 26, 1999, to shareholders
of record on November 23, 1999.
We are pleased to report that Legg Mason has made a seamless transition into
the new century. Our critical internal and external systems are operating free
of Y2K disruptions. Internal and external operations, including the Fund's
custodian and transfer agency, are running smoothly, and Fund shareholders are
receiving uninterrupted account maintenance and transaction support.
Sincerely,
/s/ Edward A. Taber, III
------------------------
Edward A. Taber, III
President
February 7, 2000
<PAGE>
Portfolio Managers' Comments
International Equity Trust
Performance
For the year, the total return for the Navigator Class of the International
Equity Trust was +21.7% on an NAV basis, compared with +27.0% for the MSCI EAFE
Index. For the second half of 1999, the return for the Fund was +19.6% on an NAV
basis, compared with +22.1% for the index.
The Fund's shortfall for the year compared with the benchmark was due to the
average underweight in Japan during the period and the underweight in the large,
expensive momentum-driven telecommunications and technology stocks. Clearly, by
year end, investing for "growth at any price" had become a global phenomenon.
The Japanese market returned +61.8% in 1999. The Fund began the year with a
weighting of only 8% in Japan, compared with 21% for the MSCIEAFEIndex. At that
time, we found Japanese stocks unattractive compared with other opportunities.
As the effect of government stimulation in Japan began upgrading the economic
numbers, we began to selectively increase the weight in that market. With the
continued convergence of good news in Japan over the year, especially positive
earnings expectations revisions, we continued to find attractive opportunities.
For the year, stock selection in Japan was positive. At year-end 1999, the
Fund's weight in Japan was in line with the benchmark, 30.4% compared with
27.4%.
The Fund's underweight in the U.K. (which was up only +12.5%) and positive
stock selection in that market helped the relative return for the year. In
addition, the Fund's exposure to emerging markets, although minimal, added
value.
Our model for stock selection provides a balance among value, growth,
expectations and technical factors. In the momentum-driven environment of 1999,
only the short-term-oriented technical and expectations components of our model
had a positive spread top to bottom, while the growth and value factors did not.
We did not change our stock selection process to capture what we believed was a
short-lived market environment. We can't predict market conditions but, over the
long term, we believe our balanced model is the best approach for stock
selection.
Market Overview
Japan remains top-rated, with positive expectations and technical rankings.
The necessary structural reforms are taking place and provide the basis for a
sustained, long-term recovery. Ownership of the market has broadened, away from
the majority ownership of cross-holdings by banks and corporations to more
dominant holdings by institutions (roughly 40%). Ignoring currency fluctuations,
we are beginning to see sustainable operating profit growth coming through in
many sectors of the economy. More importantly, corporate restructuring is now
the dynamic driver that is re-rating equities. We expect the market to broaden
from its fixation on technology to focus more on domestic recovery. We believe
Japan remains a good long-term story.
The continental European region can be described as fair value, with
valuations slightly below average when compared to the rest of EAFE.
Fortunately, the slight overvaluation is offset by positive funds flows and
better-than-average earnings estimate revisions. In 1999, the pace of
restructuring and mergers picked up. Over the longer run, the outlook for
European companies is bright.
2
<PAGE>
Portfolio Managers' Comments -- Continued
International Equity Trust -- Continued
The United Kingdom remains our lowest rated region, with all rankings either
negative or neutral. Continued interest rate increases and a strong British
pound relative to the Euro have put a damper on relative attractiveness. The
economy, particularly consumption, has been strong, and the U.K. Monetary Policy
Committee has been vigilant in increasing interest rates to dampen inflation.
Consumption in 1999 was strong, and there are few signs of lessening. Interest
rate concerns will be the primary driver of market expectations for 2000. With
the entry of Wal-Mart and e-tailing growth, consumer prices and retail margins
will remain under pressure. Despite our current low rating, we continue to find
individual stock opportunities in the region.
Strategy
We emphasize stock selection with a secondary focus on country and regional
selection. Our disciplined investment process remains oriented towards long-term
measures of value and growth. Our stock selection process ranks stocks daily
across earnings growth, cash flow, expectations, traditional value and technical
measures. We customize stock selection by market or region, based on which
attributes are most predictive of excess return. We maintain a balance among
size, sector and country for the Fund within Japan, continental Europe, the U.K.
and the smaller regions through the combination of sector scoring and portfolio
construction rules.
Looking ahead, the Fund, oriented towards fundamental measures of both value
and growth, has a lower forward P/E than its benchmark, 17.9x compared with
25.7x, and a two-year growth rate in line with the index, 20.5% compared with
21.5%.
Batterymarch Financial Management, Inc.
February 2, 2000
3
<PAGE>
Portfolio Managers' Comments
Europe Fund
The Fund had a relatively good year, outperforming the MSCI Europe Index
benchmark's return of +15.89% with its total return of +25.49% on Navigator
Class shares. The Fund benefited from an exposure to Europe's better managed and
performing businesses, measured on a global basis, including the likes of Nokia
and Vodafone Airtouch, but also from those companies where evidence of tangible
restructuring was more obvious. While general concern has been expressed about
the lack of breadth in global markets generally, and particularly European
equity markets, the converse advantage is that good performing franchises have
been more obviously rewarded in share price terms rather than being lost in the
crowd. Nevertheless, the performance the Fund achieved has come from the
overall portfolio, rather than a concentration in a few individual holdings, and
with this in mind we remain confident in the Fund's future prospects.
Our last annual report ended on an optimistic note. World markets had
recovered from their third quarter 1998 debt-inspired lows, and panic had been
avoided. Concerted Central Bank easing initiated by the U.S. Federal Reserve,
and followed in the U.K. and Europe, appeared to have solved or at least
sidelined events that had previously taken on cataclysmic proportions. Investors
in Europe had the added excitement, although some would say burden, of the debut
of the Euro. The fanfare greeting the new currency, however, was to prove overly
enthusiastic, and since January the currency has only looked one way: down. The
weakness of the Euro was indicative of the problems that beset Europe for the
first six months of the year. Economic growth in Europe remained sluggish when
compared to the U.S., and the evidence of a slight recovery was overshadowed by
the strong rebounds in Asian economies and stock markets. The new European club
also experienced some teething troubles as individual countries sought to
promote their nationals to positions of prominence, causing some angst.
Despite the generally mixed picture, European equity markets continued to make
some headway during the first six months, although dollar returns were trimmed
by the declining currency. Relative returns were disappointing by international
comparisons. However, the bottom-up themes of restructuring and mergers and
acquisitions activity, which we have mentioned in previous reports, continued to
gather momentum. The newly created single marketplace forced competition on some
domestic franchises that had previously been protected by national boundaries,
while our largest corporates faced ever-toughening global competition. Corporate
restructuring was not just a fashionable theme to which business leaders paid
lip service, but an actual necessity. However, by the second half of the year
the picture was looking a little brighter. The early signs of economic recovery,
evident in the first half, were starting to come through far more. The weaker
currency, once seen as a negative, then started to have a beneficial impact on
the Fund's performance. The greater trading competitiveness that virtual dollar
parity afforded Europe's exporters translated into better industrial production
and confidence, while the consumer side of the market continued in a more
buoyant mood. Having entered the year with interest rates on a downward trend
and the threat of recession on the agenda, we leave the millennium with rates
firming and growth forecasts above trend. The European markets responded to this
better climate, moving strongly ahead to record new highs at the end of the
year.
4
<PAGE>
Portfolio Managers' Comments -- Continued
Europe Fund -- Continued
As well as the generally better environment, the pace of corporate
restructuring increased significantly in the second half of the year with the
telecommunications sector and related areas leading the way. The first
significant deal involved Olivetti acquiring Telecom Italia through its
subsidiary Tecnost. This proved to be the first in a series of landmark deals,
proving that the new market denied protection to domestic franchises. Later in
the year Vodafone, which had already acquired Airtouch in the U.S., launched the
largest ever hostile bid to buy Mannesmann in Germany. This was in response to
Mannesmann's acquisition of Orange, the third-placed U.K. wireless operator,
with the strategic logic of creating the first truly global mobile telephony
group in this exciting area. Mobile telephony and the related areas are one of
the few sectors in which Europe excels. Witness the fact that at the year end
Nokia, the Finnish handset mobile and infrastructure company, became Europe's
largest market capitalised company, and the mobile penetration model is lead by
the European example.
The financial sector proved a close second in terms of dealmaking. Banco
Santander proved to be the consolidator in the Iberian Peninsula, while the
battle still rages for the ownership of National Westminster Bank in the U.K.
Both the Royal Bank of Scotland and the Bank of Scotland are jockeying for
ownership and the deal will be concluded in the New Year. This will continue to
be an ongoing theme throughout Europe, and the increasing openness of the market
will encourage international entrants into this exciting arena.
Outlook
Looking into the next millennium, the picture in Europe looks relatively
robust. Growth appears to be back on course, and the markets are well supported
by the underlying theme of restructuring. European companies are still some way
behind their U.S. peer group in terms of efficiency, which in itself should
allow for further catch-up in terms of performance. Increasingly, European
companies are being recognised as leading players in a global landscape rather
than just their domestic location, and also the European investment map is being
defined more by sector than by country. We remain confident that our
concentration on Europe's quality growth situations will reward investors
further in performance terms, and that Europe's credentials as a diversifying
asset class for the dollar-based investor are intact.
Lombard Odier International Portfolio Management
February 4, 2000
5
<PAGE>
Performance Information
Legg Mason Global Trust, Inc.
Performance Comparison of a $50,000 Investment as of December 31, 1999
The returns shown are based on historical results and are not intended to
indicate future performance. Total return measures investment performance in
terms of appreciation or depreciation in a Fund's net asset value per share,
plus dividends and any capital gain distributions. It assumes that dividends
and distributions were reinvested at the time they were paid. The investment
return and principal value of an investment in each of these Funds will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost. Average annual returns tend to smooth out
variations in a Fund's return, so that they differ from actual year-to-year
results. No adjustments have been made for any income taxes payable by
shareholders.
The following graphs compare each Fund's total returns against that of the
most closely matched broad-based securities market index. The lines
illustrate the cumulative total return of an initial $50,000 investment for
the periods indicated. The line for each Fund represents the total return
after deducting all Fund investment management and other administrative
expenses and the transaction costs of buying and selling securities. The line
representing the securities market index for each Fund does not include any
transaction costs associated with buying and selling securities in the index
or other administrative expenses.
International Equity and Europe Fund have two authorized classes of shares:
Primary Class and Navigator Class. Europe Fund has an additional authorized
class of shares: Class A. Information about the Primary Class and Class A,
offered to retail investors, is contained in a separate report to the
shareholders of these classes.
International Equity Trust -- Navigator Class
<TABLE>
<CAPTION>
-------------------------------------------------------------
Cumulative Average Annual
Total Return Total Return
-------------------------------------------------------------
<S> <C> <C>
One Year +21.69% +21.69%
Life of Class/+/ +10.22 +6.05
-------------------------------------------------------------
/+/Inception Date --May 5, 1998
-------------------------------------------------------------
</TABLE>
[GRAPH APPEARS HERE -- SEE PLOT POINTS BELOW]
International Equity Trust -- Navigator Class MSCI EAFE Index/(1)/
5/5/98 $50,000 $50,000
$49,015 $50,135
$39,268 $43,010
12/31/98 $45,291 $51,895
$45,111 $52,615
$46,087 $53,955
$47,790 $56,320
12/31/99 $55,112 $65,885
6
<PAGE>
Performance Information -- Continued
Europe Fund -- Navigator Class
- -------------------------------------------------------
Cumulative Average Annual
Total Return Total Return
- -------------------------------------------------------
One Year +25.49% +25.49%
Life of Class/+/ +87.35 +30.41
- -------------------------------------------------------
/+/Inception Date --August 21, 1997
[GRAPH APPEARS HERE -- SEE PLOT POINTS BELOW]
Europe Fund -- Navigator Class MSCI Europe Index/(2)/
8/21/97 $50,000 $50,000
$52,690 $54,850
12/97 $52,382 $54,890
$65,862 $66,035
$69,468 $69,430
$60,468 $59,420
12/98 $74,649 $70,545
$74,438 $69,060
$73,435 $68,845
$74,279 $69,650
12/99 $93,675 $81,760
/(1)/The Morgan Stanley Capital International (MSCI) Europe, Australia and the
Far East (EAFE) Index is an unmanaged index based on share prices of
approximately 1,100 companies listed on stock exchanges around the world.
Twenty countries are included in the index's portfolio. Index returns are
for the periods beginning April 30, 1998.
/(2)/The Morgan Stanley Capital International (MSCI)Europe Index is a broad-
based, unmanaged index based on the share prices of common stocks in each
of fourteen European countries. Index returns are for the periods beginning
August 31, 1997.
7
<PAGE>
Industry Diversification
Legg Mason Global Trust, Inc.
December 31, 1999
International Equity Trust
% of Net
Assets Value
- --------------------------------------------------------------
(000)
Aerospace 0.4% $ 1,074
Automotive 5.3 15,595
Beverages 1.1 3,172
Chemicals 2.3 6,845
Construction 3.9 11,509
Diversified 5.3 15,571
Drugs, Cosmetics & Health 3.9 11,455
Electrical 0.5 1,516
Electronics 15.0 44,367
Financial 21.2 62,399
Food, Beverage and Tobacco 1.8 5,297
Machinery & Equipment 4.1 12,199
Metal Products 1.9 5,715
Metal Producers 2.0 5,875
Miscellaneous 3.7 10,892
Oil, Gas, Coal & Related 6.0 17,625
Other 0.4 1,251
Paper 2.2 6,389
Printing & Publishing 0.8 2,434
Recreation 1.1 3,364
Retailers 1.3 3,728
Tobacco 0.2 670
Transportation 1.1 3,274
Utilities 11.8 34,915
Short-Term Investments 2.9 8,693
----- --------
Total Investment Portfolio 100.2 295,824
Other Assets Less Liabilities (0.2) (538)
----- --------
Net Assets 100.0% $295,286
----- --------
Europe Fund
% of Net
Assets Value
- --------------------------------------------------------------
(000)
Aerospace 1.6% $ 2,122
Automotive 1.2 1,578
Banking 11.0 14,988
Computer Services 7.7 10,474
Diversified 10.0 13,572
Electronics 5.8 7,855
Finance 2.8 3,867
General Industry 3.8 5,205
Insurance 6.6 8,972
Miscellaneous Manufacturing 1.5 1,989
Miscellaneous Services 1.4 1,909
Oil & Gas 8.6 11,665
Pharmaceuticals & Health Care 9.0 12,145
Publishing 1.3 1,753
RetailSales 4.4 5,983
Telecommunications 19.5 26,522
Transportation 1.1 1,505
Short-Term Investments 1.7 2,289
----- --------
Total Investment Portfolio 99.0 134,393
Other Assets Less Liabilities 1.0 1,295
----- --------
Net Assets 100.0% $135,688
----- --------
8
<PAGE>
Statement of Net Assets
Legg Mason Global Trust, Inc.
December 31, 1999
(Amounts in Thousands)
International Equity Trust
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks and Equity Interests -- 97.2%
Argentina -- 0.3%
Banco de Galicia y Buenos Aires S.A. de C.V. 171 $ 852
--------
Australia -- 3.0%
Amcor Ltd. 193 904
Australia & New Zealand Banking Group Limited 137 1,000
Commonwealth Bank of Australia 42 720
CSR Limited 288 699
Newcrest Mining Limited 190 648/A/
North Limited 593 1,398
Orica Limited 91 492
Pioneer International Limited 235 708
Qantas Airways Limited 499 1,244
WMC Limited 180 994
--------
8,807
--------
Belgium -- 1.0%
Dexia 5 739/A/
Dexia - Strip VVPR 5 N.M./A/
Kredietbank-Bankverein AG 40 2,129
--------
2,868
--------
Brazil -- 0.5%
Tele Norte Leste Participacoes S.A. ADR 63 1,601/A/
--------
Canada -- 1.6%
Anderson Exploration Ltd. 107 1,274/A/
Bank of Nova Scotia 19 404
Canadian Natural Resources Ltd. 8 200/A/
Dofasco Inc. 64 1,271
Renaissance Energy Ltd. 111 1,115/A/
Sears Canada Inc. 1 39
Stelco Inc. 49 367
--------
4,670
--------
Denmark -- 0.7%
Tele Danmark A/S 28 2,058
--------
Finland -- 0.9%
Nokia Oyj 15 2,684/A/
--------
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------
<S> <C> <C>
France -- 9.6%
Assurances Generales de France 5 $ 271
Axa 6 836/A/
Banque Nationale de Paris 21 1,956
Ciments Francais 19 1,304
Compagnie de Saint-Gobain 9 1,636
France Telecom S.A. 14 1,825
Lagardere S.C.A. 22 1,197
Pechiney SA 25 1,794
Pernod-Ricard SA 35 1,980
PSA Peugeot Citroen 9 2,112
Renault SA 17 805
SEITA 40 1,791
Societe Generale 9 2,001
Suez Lyonnaise des Eaux 20 3,237/A/
Suez Lyonnaise des Eaux - Strip 20 N.M./A/
Total Fina SA 35 4,663
Vivendi 12 1,048
--------
28,456
--------
Germany -- 6.9%
Allianz AG 2 722/A/
BASF AG 48 2,453
Bayer AG 32 1,503
DaimlerChrysler AG 19 1,446/A/
Deutsche Bank AG 28 2,340
Deutsche Pfrandbrief-und Hypothekenbank AG 18 1,372
Deutsche Telekom AG 28 2,008
EM. TV & Merchandising AG 17 1,109/A/
HypoVereinsbank 3 225
Metallgesellschaft AG 54 1,085
Preussag Ag 39 2,161
Siemens AG 31 3,970
--------
20,394
--------
Hong Kong -- 2.4%
HSBC Holdings plc 100 1,402
Hutchison Whampoa Limited 118 1,715
New World Development Company Ltd. 656 1,477
Peregrine Investment Holdings Limited 256 N.M./A,B/
Swire Pacific Ltd. 415 2,451
--------
7,045
--------
</TABLE>
10
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
International Equity Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------
<S> <C> <C>
India -- 0.1%
ITC Limited GDR 16 $ 310/C/
--------
Indonesia -- 0.3%
PT Indah Kiat Pulp & Paper Corporation Tbk 2,245 883
--------
Ireland -- 0.4%
Kerry Group Plc 94 1,127/A/
--------
Italy -- 3.8%
Banca Agricola Mantovana 7 66/A/
ENI SpA 485 2,668/A/
Fiat SpA 29 831/A/
Finmeccanica S.p.A. 1,234 1,626/A/
Italgas S.p.A. 231 875/A/
Olivetti S.p.A. 867 2,509/A/
Rolo Banca 1473 40 785/A/
Telecom Italia Mobile (TIM) SpA 103 1,155/A/
Telecom Italia SpA 52 733/A/
--------
11,248
--------
Japan -- 30.4%
Asahi Chemical Industry Co., Ltd. 197 1,012
Canon, Inc. 70 2,782
Chubu Electric Power Co., Inc. 112 1,819/A/
Chugai Pharmceutical Co., Ltd. 97 1,049
Credit Saison Co., Ltd. 32 554/A/
Dai Nippon Printing Co., Ltd. 84 1,340
DAITO TRUST CONSTRUCTION CO., LTD. 43 475/A/
Daiwa Securities Group Inc. 230 3,600
Denso Corporation 74 1,767
Ebara Corporation 94 1,049
Eisai Company, Ltd. 42 811
Fujitsu Limited 112 5,108/A/
Furukawa Electric Co. 144 2,185
Hitachi Ltd. 199 3,194
Honda Motor Co., Ltd. 16 595
Japan Radio Co., Ltd. 39 378
Japan Tobacco, Inc. N.M. 352/A/
Kao Corporation 56 1,598
Kawasaki Kisen Kaisha Ltd. 572 851
Kirin Brewery Company, Ltd. 56 589
Kishu Paper Co., Ltd. 10 16
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------
<S> <C> <C>
Japan -- Continued
Kyocera Corporation 17 $ 4,409/A/
Marubeni Corporation 234 982
Maruzen Showa Unyu Co., Ltd. 6 11
Matsushita Electric Industrial Company, Ltd. 39 1,080
Mitsubishi Corporation 81 625
Mitsubishi Electric Corporation 108 698
Mitsubishi Rayon Company, Ltd. 538 1,306
Mitsui O.S.K. Lines 189 318
Murata Manufacturing Co., Ltd. 13 3,054
NAMCO LTD. 19 1,231/A/
NEC Corporation 37 882
Nippon Steel Corporation 406 950
Nippon Telegraph & Telephone Corporation (NTT) N.M. 3,134/A/
NTT Mobile Communications Network, Inc. N.M. 3,077/A/
Rengo Co., Ltd. 120 617
Ricoh Company, Ltd. 72 1,357
Rinnai Corporation 2 45
Rohm Company Ltd. 8 3,289
Sankyo Company, Ltd. 9 666/A/
Secom Co., Ltd. 7 771
Sharp Corporation 47 1,203
Shin-Etsu Chemical Co., Ltd. 10 431
Shinki Co., Ltd. 32 781/A/
Shionogi & Co., Ltd. 71 862
Sony Corporation 15 4,508/A/
Sumitomo Forestry Company 11 85/A/
Sumitomo Rubber Industries, Ltd. 87 385
Taisho Pharmaceutical Company, Ltd. 45 1,321/A/
Takeda Chemical Industries 47 2,323
The Bank of Fukuoka, Ltd. 84 583/A/
The Bank of Iwate, Ltd. N.M. 1/A/
The Bank of Tokyo-Mitsubishi, Ltd. 198 2,760/A/
The Nikko Securities Co., Ltd. 40 506
The Sakura Bank, Ltd. 42 243
The Sumitomo Bank, Ltd. 188 2,574
The Tokai Bank Ltd. 102 643
The Tokio Marine & Fire Insurance Co., Ltd. 30 351/A/
TODA CORPORATION 63 242
Tokyo Electric Power 34 917/A/
TOSHIBA CORPORATION 200 1,527/A/
Tostem Corporation 28 503
</TABLE>
12
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
International Equity Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------
<S> <C> <C>
Japan -- Continued
Toyota Motor Corporation 114 $ 5,523
Yamaha Motor Co., Ltd. 47 326
Yamanouchi Pharmaceutical Co., Ltd. 17 594/A/
Yamazaki Baking Co., Ltd. 57 619
Yokohama Rubber 140 275
--------
89,712
--------
Mexico -- 0.9%
ALFA, S.A. 308 1,446
Cemex SA de CV 121 677
Fomento Economico Mexicano, S.A. de C.V. 135 603/A/
--------
2,726
--------
Netherlands -- 5.3%
ABN AMRO Holding NV 103 2,568
AEGON N.V. 10 966
ASM Lithography Holding N.V. 7 745/A/
CSM NV 51 1,091/A/
IHC Caland N.V. 9 314
ING Groep N.V. 54 3,233
Koninklijke (Royal) Philips Electronics N.V. 5 721
Royal Dutch Petroleum Company 74 4,554
Unilever NV 20 1,111
VIB N.V. 13 362
--------
15,665
--------
Portugal -- 0.4%
Cimpor-Cimentos de Portugal, SGPS, SA 79 1,311/A/
--------
Singapore -- 2.7%
DBS Land Limited 498 980
DelGro Corporation Limited 237 733/A/
Jardine Strategic Holdings Limited 122 243
Oversea-Chinese Banking Corporation Ltd. 154 1,412/A/
Overseas Union Bank Ltd. 403 2,360/A/
TIBS Holdings Limited 97 112/A/
United Overseas Bank Ltd. 226 1,996
--------
7,836
--------
South Korea -- 1.0%
Hana Bank 38 295
Korea Electric Power Corporation 15 453/A/
Pohang Iron & Steel Company Ltd. 1 83/A/
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------
<S> <C> <C>
South Korea -- Continued
Samsung Electronics 8 $ 1,893
Samsung Fire & Marine Insurance 6 199/A/
Samsung Fire & Marine Insurance - Rights 1 10/A/
--------
2,933
--------
Spain -- 2.9%
Banco Bilbao Vizcaya S.A. 62 880
Banco Santander Central Hispano, SA 111 1,257
Fomento do Construcciones y Contratas S.A. 47 953
Hidroelectrica del Cantabrico, SA 62 872/A/
Iberdrola S.A. 84 1,170
Repsol-YPF, S.A. 97 2,256/A/
Telefonica S.A. 53 1,329
--------
8,717
--------
Sweden -- 2.6%
Electrolux AB 59 1,471
Mo och Domsjo AB 33 1,178
Sandvik AB 36 1,140
Svenska Cellulosa AB 65 1,919
Volvo AB 73 1,890
--------
7,598
--------
Switzerland -- 5.0%
Credit Suisse Group 15 2,952
Julius Baer Holding Ltd. N.M. 680
Nestle SA 1 1,356
Novartis 1 1,020/A/
Roche Holding AG N.M. 368/A/
Schweizerische Rueckversicherungs-Gesellschaft 1 1,921
Swisscom AG 5 1,921/A/
UBS AG 4 1,188/A/
Valora Holding AG 5 1,284
Zurich Allied AG 4 2,067/A/
--------
14,757
--------
Thailand -- 0.9%
Bangkok Bank Public Company Limited 498 1,256
The Siam Cement Public Company Limited 44 1,446
--------
2,702
--------
</TABLE>
14
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
International Equity Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------
<S> <C> <C>
Turkey -- 1.4%
Aksigorta A.S. 20,193 $ 1,229
Alcatel Teletas Telekomunikasyon Endustri ve
Ticaret A.S. 2,213 490/A/
Dogan Sirketler Grubu Holding A.S. 27,536 812/A/
Eregli Demir ve Celik Fabrikalari T.A.S. 15,501 643
Koc Holding A.S. 5,712 1,053
--------
4,227
--------
United Kingdom -- 12.2%
Arjo Wiggins Appleton p.l.c. 241 812
ARM Holdings plc 44 2,941/A/
AstraZeneca Group plc 25 1,047
Baltimore Technologies plc 4 338/A/
Barclays PLC 72 2,072
Bowthorpe plc 45 787
BP Amoco plc 91 921
Britax International plc 126 242
British Telecommunications plc 198 4,796
Centrica plc 712 2,068/A/
Cookson Group plc 147 592
Enterprise Inns plc 54 355/A/
George Wimpey plc 597 1,070
Glaxo Wellcome plc 16 448
Glynwed International plc 192 744
Henlys Group plc 12 85/A/
Independent Insurance Group plc 12 53/A/
Lex Service plc 182 1,094
Logica plc 68 1,765
Millennium & Copthorne Hotels plc 75 462/A/
National Westminster Bank PLC 40 859
Pilkington plc 179 244
Rolls-Royce plc 310 1,078
Royal Bank of Scotland Group plc 69 1,229
Severn Trent plc 37 371
Signet Group plc 727 770/A/
The Mayflower Corporation plc 83 291/A/
The Sage Group plc 221 2,706/A/
Trinity Mirror plc 102 1,090
Vodafone Group plc 548 2,731
W.H. Smith Group plc 24 186
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------
<S> <C> <C>
United Kingdom -- Continued
William Morrison Supermarkets plc 449 $ 964/A/
Wolseley plc 96 733
--------
35,944
--------
Total Common Stocks and Equity Interests
(Identified Cost -- $238,580) 287,131
------------------------------------------------------------------------------
Repurchase Agreement -- 3.0%
Bank of America
3.10%, dated 12/31/99, to be repurchased at $8,696
on 1/3/00 (Collateral: $10,230 Freddie Mac mortgage-
backed securities, 6%, due 9/1/28, value $9,695)
(Identified Cost -- $8,693) $ 8,693 8,693
------------------------------------------------------------------------------
Total Investments -- 100.2% (Identified Cost -- $247,273) 295,824
Other Assets Less Liabilities -- (0.2)% (538)
--------
Net assets consisting of:
Accumulated paid-in capital applicable to:
20,746 Primary Class shares outstanding $244,122
4 Navigator Class shares outstanding 50
Overdistributions of net investment income (1,029)
Accumulated net realized gain/(loss) on investments
and currency transactions 3,549
Unrealized appreciation/(depreciation) of investments
and currency transactions 48,594
--------
Net assets -- 100.0% $295,286
========
Net asset value per share:
Primary Class $14.23
======
Navigator Class $14.26
======
------------------------------------------------------------------------------
</TABLE>
/A/Non-income producing.
/B/In bankruptcy proceedings.
/C/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. These securities represent 0.1% of net
assets.
N.M. - Not meaningful.
See notes to financial statements.
16
<PAGE>
Statement of Net Assets
Legg Mason Global Trust, Inc.
December 31, 1999
(Amounts in Thousands)
Europe Fund
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks and Equity Interests -- 91.1%
Finland -- 4.0%
Nokia Oyj 30 $ 5,386
---------
France -- 17.3%
Aventis S.A. 57 3,291
Axa 25 3,498
Banque Nationale de Paris 27 2,505
Elf Aquitaine SA N.M. N.M.
France Telecom S.A. 22 2,858
Societe Generale 8 1,824/A/
STMicroelectronics 16 2,519
Total Fina SA 32 4,284
Vivendi 30 2,670
---------
23,449
---------
Germany -- 8.6%
BASF AG 54 2,765
Epcos AG 25 1,872/A/
Mannesmann AG 22 5,205
Preussag AG 34 1,913
---------
11,755
---------
Greece -- 1.1%
Alpha Credit Bank 19 1,493
---------
Ireland -- 3.6%
Allied Irish Banks plc 122 1,383
Anglo Irish Bank Corporation plc 635 1,478
CRH plc 92 1,989
---------
4,850
---------
Italy -- 3.7%
Tecnost SpA 753 2,843/A/
Unicredito Italiano SpA 444 2,181
---------
5,024
---------
Netherlands -- 9.5%
AEGON N.V. 29 2,846
Equant 8 942/A/
Getronics NV 28 2,228/A/
Koninklijke (Royal) Philips Electronics N.V. 25 3,464
Koninklijke Ahold NV 56 1,656
VNU NV 33 1,753
---------
12,889
---------
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Portugal -- 1.7%
Portugal Telecom S.A. 207 $ 2,276
---------
Spain -- 2.3%
Telefonica S.A. 127 3,184/A/
---------
Sweden -- 6.4%
Hennes & Mauritz AB 50 1,660
Skandia Forsakrings AB 87 2,629
Telefonaktienbolaget LM Ericsson 69 4,452
---------
8,741
---------
Switzerland -- 5.8%
Adecco SA 2 1,909
Credit Suisse Group 11 2,116
Roche Holding AG 50 3,869
---------
7,894
---------
United Kingdom -- 27.1%
BP Amoco Plc 510 5,148
British Aerospace PLC 323 2,122
British Telecommunications plc 190 4,594
Glaxo Wellcome plc 92 2,608
Granada Group plc 172 1,732
Hays plc 163 2,600
Kingfisher plc 240 2,666
National Westminster Bank PLC 69 1,491
Royal Bank of Scotland Group plc 113 2,007
Shell Transport & Trading Company 269 2,234
SmithKline Beecham Plc 187 2,376
Stagecoach Holdings plc 586 1,505
Vodafone Group plc 757 3,773
WPP Group plc 121 1,892
---------
36,748
---------
Total Common Stocks and Equity Interests (Identified Cost -- $93,134) 123,689
-----------------------------------------------------------------------------------------------------
Preferred Shares -- 6.2%
Germany -- 6.2%
Marschollek, Lautenschlaeger und Partner AG 8 2,375
Porsche AG 1 1,578
SAP AG 7 4,462
---------
Total Preferred Shares (Identified Cost -- $6,341) 8,415
-----------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
Europe Fund -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement -- 1.7%
State Street Bank & Trust Company
2.50%, dated 12/31/99, to be repurchased at $2,289
on 1/3/00 (Collateral:$2,315 U.S. Treasury Inflation-
Indexed Securities, 3.63%, due 1/15/08, value $2,471)
(Identified Cost -- $2,289) $ 2,289 $ 2,289
-----------------------------------------------------------------------------------------------------
Total Investments -- 99.0% (Identified Cost -- $101,764) 134,393
Other Assets Less Liabilities -- 1.0% 1,295
---------
NET ASSETS CONSISTING OF:
Accumulated paid-in capital applicable to:
2,038 Primary Class shares outstanding $51,943
2,741 Class A shares outstanding 45,193
14 Navigator Class shares outstanding (668)
Accumulated net investment income/(loss) (257)
Accumulated net realized gain/(loss) on investments and
foreign currency transactions 6,868
Unrealized appreciation/(depreciation) of investments and
foreign currency transactions 32,609
-------
NET ASSETS -- 100.0% $ 135,688
=========
NET ASSET VALUE PER SHARE:
PRIMARY CLASS $27.90
======
CLASS A $28.61
======
NAVIGATOR CLASS $28.73
======
MAXIMUM OFFERING PRICE PER SHARE:
(NET ASSET VALUE PLUS SALES CHARGE OF 4.75% OF OFFERING PRICE)
CLASS A $30.04
======
-----------------------------------------------------------------------------------------------------
</TABLE>
/A/ Non-income producing.
N.M. - Not meaningful.
See notes to financial statements.
19
<PAGE>
Statement of Operations
Legg Mason Global Trust, Inc.
(Amounts in Thousands)
<TABLE>
<CAPTION>
Year Ended 12/31/99
----------------------------------------------------
International
Equity Europe
Trust Fund
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Interest $ 263 $ 77
Dividends 5,803 1,587
Less foreign tax withheld (732) (121)
------- -------
Total income 5,334 1,543
------- -------
Expenses:
Management fee 1,932 1,084
Distribution and service fees 2,575 609
Transfer agent and shareholder servicing expense 262 73
Audit and legal fees 59 56
Custodian fees 558 274
Directors' fees 11 32
Organization expense 14 72
Registration fees 15 58
Reports to shareholders 51 23
Other expenses 14 16
------- -------
5,491 2,297
Less fees waived -- --
------- -------
Total expenses, net of waivers 5,491 2,297
------- -------
NET INVESTMENT INCOME/(LOSS) (157) (754)
------- -------
Net Realized and Unrealized Gain/(Loss) on Investments:
Realized gain/(loss) on:
Investments, options and futures 39,978 20,942
Foreign currency transactions (264) (3,164)
------- -------
39,714 17,778
------- -------
Change in unrealized appreciation/(depreciation) of:
Investments, options and futures 10,677 10,212
Assets and liabilities denominated in foreign currencies 75 (6)
------- -------
10,752 10,206
------- -------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS 50,466 27,984
-----------------------------------------------------------------------------------------------------------
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS $50,309 $27,230
-----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
20
<PAGE>
Statements of Changes in Net Assets
Legg Mason Global Trust, Inc.
(Amounts in Thousands)
<TABLE>
<CAPTION>
International
Equity Europe
Trust Fund
------------------------- ----------------------------
Years Ended Years Ended
12/31/99 12/31/98 12/31/99 12/31/98
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Change in Net Assets:
Net investment income/(loss) $ (157) $ 144 $ (754) $ (179)
Net realized gain/(loss) on investments, options,
futures and foreign currency transactions 39,714 (9,181) 17,778 13,074
Change in unrealized appreciation/(depreciation)
of investments, options, futures and assets and
liabilities denominated in foreign currencies 10,752 25,859 10,206 10,360
---------------------------------------------------------------------------------------------------------------
Change in net assets resulting from operations 50,309 16,822 27,230 23,255
Distributions to shareholders:
From net investment income:
Primary Class (992) (2,768) (132) (355)
Class A N/A N/A (166) (862)
Navigator Class (1) (1) (1) (4)
In excess of net investment income:
Primary Class -- -- -- --
From net realized gain on investments:
Primary Class (16,590) -- (3,892) (4,213)
Class A N/A N/A (5,428) (8,621)
Navigator Class (3) -- (27) (31)
Change in net assets from Fund share transactions:
Primary Class 3,997 16,808 17,600 34,008
Class A N/A N/A 10,439 (3,590)
Navigator Class -- 50 87 (10,189)
---------------------------------------------------------------------------------------------------------------
Change in net assets 36,720 30,911 45,710 29,398
Net Assets:
Beginning of year 258,566 227,655 89,978 60,580
---------------------------------------------------------------------------------------------------------------
End of year $295,286 $258,566 $135,688 $89,978
---------------------------------------------------------------------------------------------------------------
Under/(over) distributed
net investment income $ (1,029) $ (4,570) $ (257) $ (836)
---------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
21
<PAGE>
Financial Highlights
Legg Mason Global Trust, Inc.
Contained below is per share operating performance data for a
Navigator Class 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>
Investment Operations Distributions:
----------------------------------------- --------------------------------------
Net Realized and
Unrealized Gain
(Loss) on Invest- From
Net Asset Net ments, Options, Total From Net Net Asset
Value, Investment Futures and From Net Realized Value,
Beginning Income Foreign Currency Investment Investment Gain on Total End of
of Period (Loss) Transactions Operations Income Investments Distributions Period
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
International Equity Trust
Year Ended Dec. 31,
1999 $12.64 $0.11 $2.52 $ 2.63 $(.14) $ (.87) $(1.01) $14.26
Period Ended Dec. 31,
1998/A/ 14.21 .10 (1.44) (1.34) (.23) -- $ (.23) $12.64
Europe Fund/B/
Years Ended Dec. 31,
1999 $24.78 $(.03) $ 6.15 $6.12 $(.07) $(2.10) $(2.17) $28.73
1998 21.01 .22/C/ 8.37 8.59 (.51) (4.31) (4.82) 24.78
1997/D/ 25.61 (.04)/C/ 1.27 1.23 -- (5.83) (5.83) 21.01
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------
Net
Investment Net Assets,
Expenses Income (Loss) Portfolio End of
Total to Average to Average Turnover Period
Return Net Assets Net Assets Rate (in thousands)
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
International Equity Trust
Year Ended Dec. 31,
1999 21.69% 1.25% 0.82% 148% $ 50
Period Ended Dec. 31,
1998/A/ (9.42)%/E/ 1.04%/F/ 1.17%/F/ 72%/F/ 45
Europe Fund/B/
Years Ended Dec. 31,
1999 25.49% 1.52% (.10)% 93% $ 389
1998 42.5% 1.55%/C/ 1.31%/C/ 103% 247
1997/D/ 4.9%/E/ 1.31%/C,F/ (.60)%/C,F/ 123% 8,025
---------------------------------------------------------------------------------------------
</TABLE>
/A/ For the period May 5, 1998 (commencement of sale of Navigator shares)
to December 31, 1998.
/B/ The financial information for Europe Fund
Navigator Class for the years ended December 31, 1997 and 1998, is
for Bartlett Europe Fund Class Y. The financial information for the year
ended December 31, 1999, is for the Legg Mason Europe Fund and the
Bartlett Europe Fund Class Y.
/C/ Net of fees waived pursuant to a voluntary expense limitation of 1.50%
until April 30, 1998; and 1.60% indefinitely. If no fees had been
waived, the annualized ratio of expenses to average daily net assets for
each period would have been as follows:1998, 1.63%; 1997, 1.49%.
/D/ For the period August 21, 1997 (commencement of operations of this
class) to December 31, 1997.
/E/ Not annualized.
/F/ Annualized.
See notes to financial statements.
22
<PAGE>
Notes to Financial Statements
Legg Mason Global Trust, Inc.
(Amounts in Thousands)
-----------------------------------------------------------------------------
1. Significant Accounting Policies:
The Legg Mason Global Trust, Inc. ("Corporation"), consisting of the
Global Income Trust ("Global Income"), the International Equity Trust
("International Equity"), the Emerging Markets Trust ("Emerging Markets") and
the Europe Fund ("Europe Fund") (each a "Fund"), is registered under the
Investment Company Act of 1940, as amended, as an open-end investment
company. International Equity, Emerging Markets and Europe Fund are
diversified; Global Income is non-diversified.
Each Fund consists of at least two classes of shares: Primary Class,
offered since April 15, 1993, for Global Income; since February 17, 1995, for
International Equity; since May 28, 1996, for Emerging Markets; and since
July 23, 1997, for Europe Fund; and Navigator Class, offered to certain
institutional investors since May 5, 1998, for International Equity and since
August 21, 1997, for Europe Fund. The Navigator Class of Global Income and
Emerging Markets has not commenced operations. Europe Fund has an additional
class of shares: Class A. Information about the PrimaryClass and Class A,
offered to retail investors, is contained in a separate report to the
shareholders of these classes. The income and expenses of International
Equity and Europe Fund are allocated proportionately to the two and three
classes of shares, respectively, based on daily net assets, except for Rule
12b-1 distribution fees, which are charged only on Primary Class shares, and
with respect to Europe Fund, PrimaryClass and Class A shares, and transfer
agent and shareholder servicing expenses, which are determined separately for
each class.
On October 5, 1999, Europe Fund, which had no previous operating history,
acquired all of the assets and assumed the liabilities of Bartlett Europe
Fund. On July 21, 1997, Bartlett Europe Fund, which had no previous operating
history, acquired the assets and assumed the liabilities of Worldwide Value
Fund, Inc. Prior to July 21, 1997, Worldwide Value Fund, Inc. was a closed-
end registered investment company whose single class of shares traded on the
New York StockExchange ("NYSE").
Security Valuation
Each Fund's securities are valued on the basis of market quotations or,
lacking such quotations, at fair value as determined under the guidance of
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. Each Fund will value its foreign securities in U.S. dollars on the
basis of the then-prevailing exchange rates.
Foreign Currency Translation
The books and records of the Funds 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 Distributions to Shareholders
Interest income and expenses are recorded on the accrual basis. Bond
premiums are amortized for financial reporting and federal income tax
purposes. Bond discounts, other than original issue and zero-coupon bonds,
are not amortized. Dividend income and distributions to shareholders are
allocated at the class level and are recorded on the ex-dividend date.
Dividends from net investment income, if available, will be paid annually for
International Equity and Europe Fund. Net capital gain distributions, which
are calculated at
23
<PAGE>
-----------------------------------------------------------------------------
the composite level, are declared and paid after the end of the tax year in
which the gain is realized. At December 31, 1999, there were no dividends or
capital gain distributions payable for either of the Funds. Distributions are
determined in accordance with federal income tax regulations, which may
differ from those determined in accordance with generally accepted accounting
principles; accordingly, periodic reclassifications are made within a Fund's
capital accounts to reflect income and gains available for distribution under
federal income tax regulations.
Security Transactions
Security transactions are recorded on the trade date. Realized gains and
losses from security transactions are reported on an identified cost basis
for both financial reporting and federal income tax purposes. At December 31,
1999, there were no receivables for securities sold or payables for
securities purchased for either Fund.
Deferred Organizational Expense
Deferred organizational expenses of $71 for International Equity and $210
for Europe Fund are being amortized on a straight-line basis not to exceed 5
years, beginning on the date each respective Fund began operations. Legg
Mason Fund Adviser, Inc. ("LMFA"), the Funds' investment manager, has agreed
that in the event it redeems any of its shares during such period, it will
reimburse the Fund for any unamortized organization costs in the same
proportion as the number of shares to be redeemed bears to the number of
shares that were initially purchased by LMFA and remain outstanding at the
time of redemption.
Federal Income Taxes
No provision for federal income or excise taxes is required since each
Fund intends to qualify, or to continue to qualify, as a regulated investment
company and distribute substantially all of its taxable income to its
shareholders.
Foreign Taxes
Each Fund is subject to foreign income taxes imposed by certain countries
in which it invests. Foreign income taxes are accrued by each Fund and
withheld from dividend and interest income.
Gains realized upon disposition of Indian, Malaysian and Thai securities
held by each Fund are subject to capital gains tax in those countries. The
tax on realized gains is paid prior to repatriation of sales proceeds.
Use of Estimates
Preparation of the financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
2. Investment Transactions:
For the year ended December 31, 1999, investment transactions (excluding
short-term investments) were as follows:
<TABLE>
<CAPTION>
Purchases Proceeds From Sales
--------------------------------- ---------------------------------
U.S. Gov't. Securities Other U.S. Gov't. Securities Other
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
International Equity -- $368,379 -- $385,812
Europe Fund -- 116,702 -- 98,611
</TABLE>
24
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
At December 31, 1999, cost, gross unrealized appreciation and gross
unrealized depreciation based on the cost of securities for federal income
tax purposes for each Fund were as follows:
<TABLE>
<CAPTION>
Net
Appreciation/
Cost Appreciation Depreciation (Depreciation)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
International Equity $248,346 $57,598 $(10,120) $47,478
Europe Fund 101,780 34,727 (2,114) 32,613
</TABLE>
The Funds had no capital loss carryforwards.
3. 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 Funds' 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. The Funds' investment advisers review
the value of the collateral and the creditworthiness of those banks and
dealers with which the Funds enter into repurchase agreements to evaluate
potential risks.
4. Options and Futures:
As part of their investment programs, Europe Fund and International Equity
may utilize options and futures to a limited extent. Options may be written
(sold) or purchased by the Funds. When a Fund purchases a put or call option,
the premium paid is recorded as an investment and its value is marked-to-
market daily. When a Fund writes a call or put option, an amount equal to the
premium received by the Fund is recorded as a liability and its value is
marked-to-market daily.
When options, whether written or purchased, expire, are exercised or are
closed (by entering into a closing purchase or sale transaction), the Fund
realizes a gain or loss as described in the chart below:
<TABLE>
<CAPTION>
<S> <C>
Purchased option: Impact on the Fund:
The option expires Realize a loss in the amount of the cost of the option.
- ----------------------------------------------------------------------------------------------------------------
The option is closed through a Realize a gain or loss depending on whether the proceeds from the
closing sale transaction closing sale transaction are greater or less than the cost of the option.
- ----------------------------------------------------------------------------------------------------------------
The Fund exercises a call option The cost of the security purchased through the exercise of the option
will be increased by the premium originally paid to purchase the option.
- ----------------------------------------------------------------------------------------------------------------
The Fund exercises a put option Realize a gain or loss from the sale of the underlying security. The
proceeds of that sale will be reduced by the premium originally paid
to purchase the put option.
- ----------------------------------------------------------------------------------------------------------------
Written option: Impact on the Fund:
The option expires Realize a gain equal to the amount of the premium received.
- ----------------------------------------------------------------------------------------------------------------
The option is closed through a Realize a gain or loss without regard to any unrealized gain or loss on
closing purchase transaction the underlying security and eliminate the option liability. The Fund
will realize a loss in this transaction if the cost of the closing pur-
chase exceeds the premium received when the option was written.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------
A written call option is exercised Realize a gain or loss from the sale of the underlying security. The
by the option purchaser proceeds of that sale will be increased by the premium originally
received when the option was written.
- ----------------------------------------------------------------------------------------------------------------
A written put option is exercised The amount of the premium originally received will reduce the cost
by the option purchaser of the security that the Fund purchased when the option was exercised.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
The risk associated with purchasing options is limited to the premium
originally paid. Options written by a Fund involve, to varying degrees, risk
of loss in excess of the option value reflected in the statement of net
assets. The risk in writing a covered call option is that a Fund may forego
the opportunity of profit if the market price of the underlying security
increases and the option is exercised. The risk in writing a put option is
that a Fund may incur a loss if the market price of the underlying security
decreases and the option is exercised. In addition, there is the risk a Fund
may not be able to enter into a closing transaction because of an illiquid
secondary market or, for over-the-counter options, because of the
counterparty's inability to perform.
There was no activity in call and put options during the year ended
December 31, 1999.
Upon entering into a futures contract, the Fund is required to deposit
with the broker an amount of cash or cash equivalents equal to a certain
percentage of the contract amount. This is known as the "initial margin."
Subsequent payments ("variation margin") are made or received by the Fund
each day, depending on the daily fluctuation in the value of the contract.
The daily changes in contract value are recorded as unrealized gains or
losses and the Fund recognizes a realized gain or loss when the contract is
closed. Futures contracts are valued daily at the settlement price
established by the board of trade or exchange on which they are traded.
The Funds enter into futures contracts as a hedge against anticipated
changes in interest rates. There are several risks in connection with the use
of futures contracts as a hedging device. Futures contracts involve, to
varying degrees, the risk of loss in excess of amounts reflected in the
financial statements. The change in the value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in the value of the hedged instruments. In
addition, there is the risk that a Fund may not be able to enter into a
closing transaction because of an illiquid secondary market.
5. Financial Instruments:
Emerging Market Securities
Each Fund has investments in securities denominated in the currencies of
emerging market countries, as well as in securities issued by companies
located in emerging market countries. Future economic or political
developments could adversely affect the liquidity or value, or both, of such
securities.
Forward Currency Exchange Contracts
As part of its investment program, each Fund may utilize forward currency
exchange contracts. The nature and risks of these financial instruments and
the reasons for using them are set forth more fully in the Corporation's
prospectus and statement of additional information.
Forward foreign currency contracts are marked-to-market daily using
foreign currency exchange rates supplied by an independent pricing service.
The change in a contract's market value is recorded by a Fund as an
unrealized gain or loss. When the contract is closed or delivery is taken,
the Fund records a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it
was closed.
The use of forward foreign currency contracts does not eliminate
fluctuations in the underlying prices of the Fund's securities, but it does
establish a rate of exchange that can be achieved in the future. These
forward foreign currency contracts involve market risk in excess of amounts
reflected in the financial
26
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
statements. Although forward foreign currency contracts used for hedging
purposes limit the risk of loss due to a decline in the value of the hedged
currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Funds could be exposed to
risks if the counterparties to the contracts are unable to meet the terms of
their contracts. Each Fund's adviser will enter into forward foreign currency
contracts only with parties approved by the Board of Directors because there
is a risk of loss to the Funds if the counterparties do not complete the
transaction.
At December 31, 1999, open forward currency exchange contracts were as
follows:
<TABLE>
<CAPTION>
International Equity:
Contract to
Settlement ----------------------------------------- Unrealized
Date Receive Deliver Gain/(Loss)
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
02/08/00 USD 2,587 EUR 2,478 $ 82
02/08/00 EUR 2,478 USD 2,526 (21)
----
$ 61
====
</TABLE>
Euro Conversion
On January 1, 1999, the Euro became the official currency of the countries
in the European Economic and Monetary Union (EEMU). EEMU member countries
include Austria, Belgium, Finland, France, Germany, Ireland, Italy,
Luxembourg, the Netherlands, Portugal and Spain. Government bonds issued by
member countries were redenominated into Euro on January 1, 1999.
Corporations based in member countries have until 2002 to redenominate their
existing bonds. New issuances of corporate and government bonds from member
countries will be denominated in Euro. The redenomination into Euro has not
had and is not expected to have a material impact on the Funds' operations.
6. Transactions With Affiliates:
Each Fund has a management agreement with LMFA. Pursuant to their
respective agreements, LMFA provides the Funds with management and
administrative services for which each Fund pays a fee, computed daily and
payable monthly, at annual rates of each Fund's average daily net assets.
LMFA has agreed to waive its fees to the extent each Fund's expenses
(exclusive of taxes, interest, brokerage and extraordinary expenses) exceed
during any month certain annual rates. The following chart shows annual rates
of management fees; expense limits and their expiration dates; management
fees waived; and management fees payable for each Fund:
<TABLE>
<CAPTION>
Year Ended
December 31, 1999 At December 31, 1999
---------------------------------------------
Management Management
Management Expense Expense Limitation Fees Fees
Fund Fee Limitation Expiration Date Waived Payable
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
International Equity
--Primary Class 0.75% 2.25% Indefinite $ -- $175
--Navigator Class 0.75% 1.25% Indefinite -- N.M.*
Europe Fund
--Primary Class 1.00% 2.60% May 1, 2000 -- 46
--Class A 1.00% 1.85% May 1, 2000 -- 64
--Navigator Class 1.00% 1.60% May 1, 2000 -- N.M.*
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*N.M. - Not meaningful.
27
<PAGE>
----------------------------------------------------------------------------
Batterymarch Financial Management, Inc. ("Batterymarch") serves as
investment adviser to International Equity. Batterymarch is responsible for
the actual investment activity of the Fund. LMFA pays Batterymarch a fee for
its services at an annual rate equal to 66-2/3% of the fee received by LMFA
from International Equity.
Lombard Odier International Portfolio Management Limited ("Lombard Odier")
serves as investment sub-adviser to Europe Fund. LMFApays Lombard Odier a fee
for its services at an annual rate equal to 60% of the fee actually paid to
LMFA by the Fund (net of any waivers).
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,
1999, the Fund paid Bartlett &Co. a fee equal to 1% of its average net
assets.
Worldwide had an administration contract with LMFA for which LMFAreceived
fromWorldwide a monthly fee at an annual rate of .20% of Worldwide's net
assets, based on the net assets on the last business day of each month. This
rate was reduced on net asset values in excess of $100 million.
On July 15, 1997, the shareholders of the Bartlett Europe Fund
(predecessor to Europe Fund) approved an Investment Management and
AdministrationAgreement ("Agreement"). Under the Agreement, the Adviser
received for its services an advisory fee, computed daily and payable
monthly, at 1.00% of the Fund's average daily net assets.
Legg Mason Wood Walker, Incorporated ("Legg Mason"), a member of the NYSE,
serves as distributor of the Funds. Legg Mason receives an annual
distribution fee and an annual service fee based on each Fund's respective
Class's average daily net assets, calculated daily and payable monthly, as
follows:
<TABLE>
<CAPTION>
At December 31, 1999
------------------------
Distribution Service Distribution and Service
Fee Fee Fees Payable
-----------------------------------------------------------------------------
<S> <C> <C> <C>
International Equity
Primary Class 0.75% 0.25% $233
Europe Fund
Primary Class 0.75 0.25 46
Class A -- 0.25 16
</TABLE>
Legg Mason also has an agreement with the Funds' transfer agent to assist
with certain of its duties. For this assistance, the transfer agent paid
Legg Mason the following amounts for the year ended December 31, 1999:
International Equity, $84; and Europe Fund $18.
LMFA, Batterymarch and Legg Mason are corporate affiliates and are wholly
owned subsidiaries of Legg Mason, Inc.
7. Line of Credit:
The Funds, along with certain other Legg Mason Funds, participate in a
$200 million line of credit ("Credit Agreement") to be utilized as an
emergency source of cash in the event of unanticipated, large redemption
requests by shareholders. Pursuant to the Credit Agreement, each
participating Fund is liable only for principal and interest payments related
to borrowings made by that Fund. Borrowings under the line of credit bear
interest at prevailing short-term interest rates. For the year ended December
31, 1999, the Funds had no borrowings under the line of credit.
28
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
8. Acquisition of Bartlett Europe Fund and Reorganization of Worldwide Value
Fund, Inc.:
On October 5, 1999,Europe Fund, a series of Legg MasonGlobalTrust, Inc.
which had no previous operating history, acquired all the net assets of the
Bartlett Europe Fund, a series of Bartlett Capital Trust, an open-end
management investment company, pursuant to a plan of reorganization approved
byBartlett Europe Fund shareholders onSeptember 23, 1999.
On July 18, 1997, Bartlett Europe Fund, a series of the Bartlett Capital
Trust, acquired all the net assets of Worldwide Value Fund, Inc. pursuant to
a plan of reorganization approved byWorldwide's shareholders on April 30,
1997. The acquisition was accomplished by a tax-free exchange of 3,357 shares
of Worldwide (valued at $88,660) outstanding on July 18, 1997. The net assets
of Worldwide ($88,660, including $18,092 of unrealized appreciation and
$12,991 of undistributed net capital gain) were merged into the newly-created
Bartlett Europe Fund. Prior to the reorganization, Worldwide Value Fund, Inc.
was a closed-end mutual fund whose shares traded on the NYSE.
9. Fund Share Transactions:
At December 31, 1999, there were 1,375,000 shares authorized at $.001 par
value for all portfolios of the Corporation. Share transactions were as
follows:
<TABLE>
<CAPTION>
Reinvestment
Sold of Distributions Repurchased Net Change
--------------- ---------------- ------------------- -------------------
Shares Amount Shares Amount Shares Amount Shares Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
International Equity
--Primary Class
Year Ended Dec. 31, 1999 4,502 $58,763 1,330 $17,182 (5,540) $(71,948) 292 $ 3,997
Year Ended Dec. 31, 1998 5,900 77,550 221 2,717 (4,995) (63,459) 1,126 16,808
--Navigator Class
Year Ended Dec. 31, 1999 -- $ -- -- $ -- -- $ -- -- $ --
May 5, 1998/A/ to Dec. 31, 1998 4 50 -- -- -- -- 4 50
Europe Fund
--Primary Class
Year Ended Dec. 31, 1999 1,158 $28,649 157 $ 3,876 (602) $(14,925) 713 $ 17,600
Year Ended Dec. 31, 1998 1,279 33,629 194 4,541 (162) (4,162) 1,311 34,008
--Class A
Year Ended Dec. 31, 1999 1,804 $45,451 186 $ 4,735 (1,567) $(39,747) 423 $ 10,439
Year Ended Dec. 31, 1998 415 10,886 253 6,156 (842) (20,632) (174) (3,590)
--Navigator Class
Year Ended Dec. 31, 1999 3 $ 64 1 $ 28 N.M. $ (5) 4 $ 87
Year Ended Dec. 31, 1998 9 219 1 35 (382) (10,443) (372) (10,189)
</TABLE>
-----------
/A/ Commencement of sale of Navigator Class shares.
29
<PAGE>
Report of Independent Accountants
To the Shareholders and Directors of Legg Mason Global Trust, Inc.:
In our opinion, the accompanying statements of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
International Equity Trust and Europe Fund (two of the four portfolios
comprising the Navigator Class of the Legg Mason Global Trust, Inc., hereafter
referred to as the "Funds") at December 31, 1999, and the results of their
operations, the changes in their net assets and the financial highlights for
each of the fiscal periods presented, in conformity with accounting principles
generally accepted in the United States. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at December
31, 1999, by correspondence with custodians and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
February 10, 2000
<PAGE>
Investment Advisers
For Global Income Trust: For Europe Fund:
Western Asset Management Company Legg Mason Fund Adviser, Inc.
Pasadena, CA Baltimore, MD
For International Equity and
Emerging Markets Trusts:
Batterymarch Financial Management, Inc.
Boston, MA
Investment Sub-Adviser
For Europe Fund: For Global Income Trust:
Lombard Odier International Portfolio Western Asset Global
Management Management, Ltd.
London, England London, England
Investment Manager
Legg Mason Fund Adviser, Inc.
Baltimore, MD
Board of Directors
John F. Curley, Jr., Chairman
Edward A. Taber, III, President
Richard G. Gilmore
Arnold L. Lehman
Dr. Jill E. McGovern
G. Peter O'Brien
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 LLP
Washington, D.C.
Independent Accountants
PricewaterhouseCoopers LLP
Baltimore, MD
This report is not to be distributed unless preceded or accompanied by a
prospectus.
Legg Mason Wood Walker, Incorporated
-----------------------------------------
100 Light Street
P.O. Box 1476, Baltimore, MD 21203-1476
410 o 539 o 0000
LMF-042
2/00
