<PAGE>
Investment Advisers
For Global Income Trust:
Western Asset Management Company
Pasadena, CA
For International Equity and
Emerging Markets:
Batterymarch Financial Management, Inc.
Boston, MA
For Europe Fund:
Legg Mason Fund Adviser, Inc.
Baltimore, MD
Investment Sub-Advisers
For Global Income Trust:
Western Asset Management Company Limited
London, England
For Europe Fund:
Lombard Odier International Portfolio
Management
London, England
Investment Manager
Legg Mason Fund Adviser, Inc.
Baltimore, MD
Board of Directors
John F. Curley, Jr., Chairman
Edward A. Taber, III, President
Nelson A. Diaz
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 . 539 . 0000
LMF-042
8/00
Semi-Annual Report
June 30, 2000
Legg Mason
Global
Trust, Inc.
Global Income Trust
International Equity Trust
Emerging Markets Trust
Europe Fund
Primary Class and
Class A
[LEGG
MASON
FUNDS
Logo]
The Art of Investing(SM)
<PAGE>
To Our Shareholders,
We are pleased to provide you with the semi-annual report for the Legg Mason
Global Trust, comprised of the Global Income Trust, International Equity Trust,
Emerging Markets Trust and Europe Fund, for the six months ended June 30, 2000.
Beginning on the next page, the portfolio managers responsible for the Global
Trust portfolios discuss results for the first half of 2000 and the investment
outlook. The Funds' total returns in various periods since their inceptions are
shown later in this report. For each of our 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.
We hope you will consider using the Trust for investments of additional funds
as they become available. Some shareholders have chosen to regularly add to
their investment in the Funds by authorizing automatic, monthly transfers from
their bank checking or Legg Mason accounts. Your Financial Advisor will be happy
to help you make these arrangements if you would like to purchase additional
shares in this convenient manner.
Sincerely,
/s/ Edward A. Taber, III
-------------------------
Edward A. Taber, III
President
August 9, 2000
<PAGE>
Portfolio Managers' Comments
Global Income Trust
Market Overview
Global fixed income markets have had a roller coaster ride in the first six
months of 2000. Government markets, especially in the U.S., rebounded strongly
after yields soared early in the year. Emerging markets too have performed well,
albeit with a lot of volatility. By contrast, corporate sectors, especially in
the below investment grade sector globally, have lagged as interest rate,
economic and relative supply worries weighed on the sector. The U.S. dollar
remained strong against both European and Japanese currencies for most of the
first half of the year.
The liquidity injected into the U.S. economy towards the end of 1999 as a
contingency against Year 2000 computer bug worries fueled exceptionally strong
growth, with two major consequences: the resumption of Federal Reserve
tightening after a two-month hiatus, and the decision by the U.S. Treasury to
significantly curtail Treasury issuance given surging tax revenues. While the
rate environment was initially poorly received by the Treasury market, the
prospect of declining issuance severely inverted the yield curve as longer-dated
yields fell. European bonds followed a similar profile with a weak euro, firming
oil prices and strong monetary growth triggering the start of a tightening cycle
by the European Central Bank ("ECB"). With signs of broader-based recovery,
rates were raised four times to 4.25%. Nonetheless, a benign core inflation rate
and soaring tax revenues supported an uneven decline in government yields.
Japanese bonds remained in a very tight range all year, lagging other government
markets as stronger economic growth balanced weak equity markets and the threat
of an end to the Bank of Japan's zero rate policy.
By contrast, fears of worsening credit quality as the Fed tightened, and
rising swaps rates due to the curve inversion, depressed corporate bond returns,
especially at the longer end. The decline in liquidity as uncertainty grew over
future Treasury issuance served to increase volatility levels in the sector.
U.S. high yield bonds further suffered from a large and sustained period of
outflows from high yield funds in favour of equities and concerns over rising
default rates. In Europe, concerns over declining credit quality and fears of
significantly higher supply weighed on both the investment grade (especially in
the U.K.) and high yield sectors, especially in the dominant telecoms sector
where yields reached record highs of 12%.
Firming global growth conditions and stronger commodity prices supported
emerging market debt. Structural improvements in select countries such as Mexico
and Brazil and a successful rescheduling of defaulted Russian debt have buoyed
the market overall. Nonetheless, rising correlations with volatile U.S. equity
markets and swap spreads and persistent fears of a "hard landing" for the U.S.
economy have kept volatility levels high in the sector.
The dollar remained immune to volatility in capital markets and a ballooning
current account and trade deficit, benefiting from strong capital flows
especially out of Europe and consistent selling of Japanese equities by
international investors. The euro's disappointing performance reflected the
disappointment with the ECB's response to euro weakness and the unwinding of
long positions after the failure of the euro to capitalise on U.S. equity
weakness. The adoption of a more hawkish stance by the ECB and evidence of
weaker relative growth in the U.S. have helped support a modest recovery since
May.
2
<PAGE>
Fund Performance
Performance this year has been disappointing, given the emphasis on non-
government sectors globally and the weakness in foreign currencies. Recent
recoveries in both areas have boosted returns, especially from emerging and
corporate sectors. The Fund posted a -4.54% return for the six months ended June
30, 2000, compared to +0.03% for the Salomon World Government Bond Index.
The exposure to the mortgage sector was comparatively neutral relative to
Treasuries, but the diversification to Danish mortgages was a positive factor.
On the sovereign side, exposure to Greek and Hungarian markets also
contributed positively to performance as convergence prospects improved over the
year, with Greece's confirmation as the next member of the European Monetary
Union ("EMU"). The Fund also benefited from its lack of exposure to Japanese
bonds, given their lacklustre performance this year.
Market Commentary and Outlook
U.S. monetary conditions are tight, and weak commodity prices, ex-oil, are
declining. With the U.S. economy showing some signs of slowing, it is unlikely
the Fed will tighten more than expected. Firm European economies and the gradual
recovery in Japan will put pressure on rates, but this is largely discounted.
Low core global inflation and signs of a peaking in growth momentum should
underpin bond markets.
The Fund will seek to maintain a moderately long duration exposure in
anticipation of declining interest rates. The Fund will continue to emphasize
non-government sectors, increasing further the core allocation to non-investment
grade sectors.
Wide spreads and the prospect for further U.S. yield curve disinversion are
likely to outweigh the risks of continued swaps volatility and lower government
yields. The AAA mortgage sector should act as a diversifying strategy to the
general aggressive stance towards high yielding sectors.
The Fund will maintain its core exposure to the mortgage sector, emphasizing
issues with low prepayment risk such as current coupons, seasoned issues and AAA
commercial loans. We will also rotate between European and U.S. mortgage sectors
as value emerges.
Although weaker U.S. growth expectations, high scarcity premia for Treasuries
and tight money cloud the outlook for credit spreads, distressed spread levels
in U.S. investment grade corporates likely overcompensate investors for these
risks. European corporates' improved valuations, especially for shorter
maturities at the lower credit range, now offer better compensation for higher
supply and credit event risk. Corporate restructuring in Europe and Japan should
further add support to the sector.
The Fund will maintain its overweight exposure to investment grade corporate
bonds in both the U.S. and Europe. We will also seek to further add to euro
credits on wider spreads or evidence of effective U.S. monetary ease and
lessening uncertainty over the telecom sector.
3
<PAGE>
Portfolio Managers' Comments -- Continued
Global Income Trust -- Continued
Since economic and inflation fundamentals remain basically sound, the high
yields and relatively wide spreads available in the high yield sector in both
the U.S. and Europe promise strong total returns even as default rates creep
higher. At current yields of 12% the euro sector offers excellent value,
discounting excessively high default rates. With financing needs rising,
especially for telecom borrowers in Europe, greater market tiering warrants
prudent issue selection. We shall maintain a moderately aggressive strategy to
the high yield sector, adding selectively to issuers in the U.S. and Europe with
high single-B average quality.
The combination of significant structural reforms in select economies and
today's distressed level of spreads continues to give emerging markets
attractive appeal. Firming world trade levels and prospects for better liquidity
should also support the sector.
The Fund will continue to take a significant exposure to the emerging markets
sector in the more robust emerging economies, while seeking to further diversify
exposure across Asia, Latin America and Africa in both hard and local currency
investments.
In the Eurozone, firmer economic growth is fueling pessimistic expectations
for higher official rates. While the ECB will continue to raise rates, with core
inflation well below 2% bond yields are likely to decline from current levels
and the euro should find support.
Greek, Polish and Norwegian markets offer attractive spreads to core markets.
Greek entry to the EMU is still not fully discounted and Poland's improving
inflation and current account trends should gradually outweigh political
worries, while in Norway high yield solid long-term fundamentals compensate for
near-term concerns over generous wage settlements and rate hikes.
The Fund will hold exposure in select sovereign issues in Scandinavia and
Eastern European markets as they offer attractive yield premia over underlying
government bonds. Focus will continue on 10-year benchmark bonds in Greece in
anticipation of further yield convergence as end-2000 EMU entry nears. The Fund
will retain exposure to euro-linked currencies in anticipation of euro recovery
in the coming months, but will seek opportunities to reduce exposure to the
Japanese yen over time.
Western Asset Management Company
August 1, 2000
4
<PAGE>
Portfolio Managers' Comments
International Equity Trust
Performance
For the year to date, the International Equity Trust return was -7.7% on an
NAV basis, compared with -4.1% for the Morgan Stanley Capital International
(MSCI) Europe, Australia, Far East (EAFE) Index.
Despite strong stock selection in continental Europe, the Fund's underweight
in the region was a key contributor to the Fund's relative underperformance.
Among the EAFE's larger regions, Europe outperformed the benchmark, declining
just -0.9%. In contrast, both the U.K. and Japan underperformed the EAFE Index;
the Fund's underweighted positions helped the relative return, as did positive
stock selection in the U.K.
As the year began, international investors continued to favor the high
momentum stocks of late 1999 -- technology and telephone stocks -- many of which
we found overvalued. In March, these stocks retreated significantly.
As the international markets returned to a more fundamentally-driven
investment environment, our stock selection, which provides a balance among
value, growth, expectations and technical factors, improved. By the end of the
period, investors preferred quality of earnings and predictable cash flows.
Looking ahead, the Fund is well positioned in companies with these
characteristics.
Market Overview
The surprise in continental Europe was growth. GDP growth was strong year-on-
year and industrial production improved. Inflation was low and unemployment
still high, but trending down. The weak euro was additional fuel for export
growth. Our regional rating for Europe improved in June, driven by above-
average scores for both money flow and growth. The Fund ended the period with a
weighting of 46.3% in the region, compared with 47.8% for the index.
The U.K. remained expensive relative to the index on a growth-to-P/E basis.
Expectations of economic activity slowed. The Central Bank has done its work;
the tightening cycle of short-term interest rate increases is expected to slow
as both wage inflation and house prices have peaked. Looking ahead, a weaker
sterling should benefit exports as over half of earnings come from offshore, but
further weakening may prompt defensive rate hikes. The Fund's weight was 17.6%,
compared with 19.5% for the index.
Japan's outlook deteriorated. There were signs of corporate-driven growth and
increased capital spending in several sectors, but business activity overall was
in a negative trend. Consumer spending (over 60% of the economy) did not
strengthen, although it is expected to improve as incomes rise. An improving
economy would provide the opportunity to increase rates above zero, but the weak
LDP election win has limited the position of the government to act. The yen
strengthened to 105, driven by expectations of economic recovery and higher
rates. This level, stronger than companies expected, will be negative for
reported earnings of major export companies next quarter. A looming rate
increase would hurt stock performance and dampen hopes for a solid recovery.
GDP growth is expected to be below 2% in 2000. The Fund's weight was 25.5%,
compared with 26.8% for the index.
5
<PAGE>
Portfolio Managers' Comments -- Continued
International Equity Trust -- Continued
The small regions -- the Resource Countries (Australia, New Zealand and
Canada) and Asia ex-Japan -- were trading at attractive valuations compared with
the benchmark, with better scores than the large regions. The score for Asia
ex-Japan was driven by both growth and external demand; the combined EPS growth
expectation for Hong Kong and Singapore was over 25%. The score for the
resource-based economies was boosted by positive funds flows and estimate
revisions, due in part to the energy sector.
Strategy
We believe the key to added value is a disciplined investment process that
incorporates rigorous stock selection and effective risk control. We emphasize
stock selection with a secondary focus on regions. Our stock selection process
ranks stocks daily across earnings growth, cash flow, expectations, traditional
value and technical measures. To add value, the process must be customized by
region and industry sector. We maintain a balance among size, sector and region
for the Fund within Japan, continental Europe, the U.K., Asia ex-Japan and the
Resource Countries through the combination of sector scoring and portfolio
construction rules. As a result, the Fund is well diversified across the
regions and industries.
In summary, growth rates for the MSCI EAFE markets are attractive relative to
the U.S., and the outlook for earnings for international companies is improving,
particularly in Europe. Looking ahead, the Fund is more attractively valued
than the index and has a higher growth rate, with a forward P/E ratio of 20.7x
compared with 23.2x for the index, and a two-year growth rate of 22.2% compared
with 21.9% for the index.
Batterymarch Financial Management, Inc.
August 3, 2000
DJIA 10706.58
6
<PAGE>
Portfolio Managers' Comments
Emerging Markets Trust
Performance
For the year to date, the Legg Mason Emerging Markets Trust return was -4.2%
on an NAV basis, compared with -8.0% for the Morgan Stanley Capital
International ("MSCI") Emerging Markets Free ("EMF")Index.
The Fund benefited from both positive stock selection and country allocations.
Within Asia, stock selection was positive in China, Korea, Taiwan and Malaysia;
in addition, the Fund's allocations in these markets relative to the index added
value. In Latin America, positive stock selection and the decision to
overweight Brazil and Mexico helped the relative return.
The record swings in the U.S. market during the year to date reverberated
globally. The decline in emerging markets stock prices which began in the first
quarter continued into May, closely tracking the performance of the NASDAQ
Composite Index. Most heavily affected were technology and telecommunications
stocks. Such indiscriminate selling diminished as U.S. rate concerns eased
later in the period.
Toward the end of May, many oversold emerging markets technology and
telecommunications stocks began to recover to previous price levels, and many of
the larger markets began significant rallies, including China, Brazil, South
Korea, India and finally, Mexico.
Market Commentary
Within Latin America, Mexico and Brazil, being more correlated with the U.S.,
rallied accordingly as U.S. rate concerns eased late in the period. The
fundamentals in both countries continued to improve, despite global volatility.
Mexico cleared a hurdle in July when the opposition candidate was elected
President, ending the 70-year rule of the PRI. Investors, hoping only for a
clean election with no post-election tensions, were rewarded with the victory of
the market-friendly Vincente Fox. Mexico still trades at a discount in the
region, despite investment grade status and increasing integration with the U.S.
In Brazil, interest rates returned to their downward trajectory, inflation is
under control, and fiscal efforts at controlling the deficit are ongoing.
Despite positive macro developments, valuations remain attractive. Liquidity
remains important, especially if risk aversion reoccurs. We prefer to stay out
of the smaller Latin American markets due to liquidity concerns and political
uncertainties.
Most Asian markets participated in the correction, driven by the NASDAQ
decline and led by technology and telecommunications stocks, particularly India
and Taiwan with their higher concentrations in technology stocks. Although
Korea is also largely represented by technology and telecommunications stocks,
cheaper valuations offered protection. In contrast, China had a positive return
for the period amid signs of a broad-based economic recovery. Asia overall made
further progress in economic recovery with increased intra-regional trade and
economic integration. Valuations of Asian markets are attractive compared with
global valuations, and we find many individual Asian companies enjoying very
high growth rates.
7
<PAGE>
Portfolio Managers' Comments -- Continued
Emerging Markets Trust -- Continued
Strategy
Our investment strategy is to seek well-managed, high quality companies which
are expected to participate in the eventual economic growth of emerging markets,
at reasonable prices.
In selecting stocks, we research our universe of stocks for attractive growth
opportunities at reasonable valuations and use proprietary measures of growth
and valuation that we tailor to each market. We use both fundamental analysis
(review of management, competitive resources, market position and financial
condition to develop qualitative stock opinions) and quantitative valuation
(earnings expectations, growth, valuation and technical factors).
The Fund is well diversified across sectors and markets. The Fund's forward
P/E of 9.5x is lower than the 12.4x benchmark's forward P/E and our two-year
growth rate is higher, 27.9% compared with 26.5% for the benchmark.
Looking forward, the emerging markets index has a growth-to-P/E ratio of 1.8x,
which is very attractive compared with other investment alternatives. The
Fund's growth-to-P/E ratio is even more attractive, at 2.8x.
Batterymarch Financial Management, Inc.
August 3, 2000
DJIA 10706.58
8
<PAGE>
Portfolio Managers' Comments
Europe Fund
The strong momentum that greeted the new millennium continued into the first
few weeks of January with Europe's broad technology area ("TMT") at the
vanguard, maintaining last year's correlation with the NASDAQ. However, the
party atmosphere soon gave way to a bout of depression, as potential monetary
tightening loomed large in investors' minds. While the U.S. had continued to
power ahead in growth terms for much of the past decade, Europe remained
relatively soft. Signs that Europe was gathering economic momentum focused
thoughts on global pricing pressures. The market's pessimism proved short lived
as America Online announced the takeover of Time Warner, giving renewed vigour
to the TMT sectors. Technology investors took heart as AOL seemingly confirmed
the dominance of New World over Old. Later examples, such as Charles Schwab's
acquisition of U.S. Trust, reinforced this view again. The gap in valuation
between the two categories stretched even further, despite the already
exaggerated differential at the start of the year.
The bubble burst in early March. Interest rates across the major markets,
with the notable exception of Japan, rose to stave off the increasing
inflationary threat. Europe had not only accelerating economic growth to
contend with, but also the continued decline in the value of the euro. The
currency, greeted enthusiastically at birth, has been in a tailspin since, and
the trend continued into this year. From its inception high of 1.18 versus $1,
the low point equated to .88 versus $1, a fall of some 25%. Confirmation of the
European Central Bank's action coupled with stronger European growth appears to
have put a floor under the currency for the time being.
Equity markets reacted alike across the world and Europe's highflying
technology area took a beating. The biggest losers were the e-business and
Internet-related models. It is perhaps worth drawing a distinction between the
nature of the U.S. and European technology groupings. The direct Internet
exposure is not nearly as significant in Europe as it is in the U.S. Europe's
technology area focuses more on the mobile telephony chain from service
suppliers to infrastructure companies. We believe that this is a sector in
which Europe has a distinct global competitive advantage. In wireless supply
Vodafone AirTouch stands out, following the acquisition of Mannesmann, as a
global winner, while Nokia, Ericsson, et al., remain at the forefront of
wireless Internet convergence. Corporate performance continues to show strong
momentum in the sector and M&A activity is adding support. Vodafone's
successful acquisition of Mannesemann proved to be the largest ever aggressive
takeover. Five years ago such a move would have been most unlikely, given the
nationalistic nature of most of Europe's domestic markets. The new single
market and currency, allied to the increasing globalisation of sectors and
marketplaces, has allowed the emergence of global champions in Europe.
Moreover, the power of shareholders within Europe has increased substantially in
deciding the outcome of such transactions.
Another encouraging aspect within Europe has been the relaxation of corporate
taxation, particularly in Germany. Here, the company tax regime has been
particularly punitive in the past, while recent amendments could enable the
unlocking of considerable value so far lost within the German financial sector
and increase the level of corporate activity. Personal taxation has also become
more lenient and recent legislation will encourage increased personal pension
provision.
9
<PAGE>
Portfolio Managers' Comments -- Continued
Europe Fund -- Continued
In terms of investment activity, the Fund has been relatively quiet, despite
the very high levels of volitility in the markets. On the most extreme days the
intraday price movements meant liquidity was low and dealing therefore
difficult. The top conviction positions in the Fund are therefore little
changed, and whilst their share prices have proved difficult to predict on a
daily basis, the medium-term fundamentals are very much intact. Corporate
results estimates have edged up generally in Europe given the improving economy,
and the portfolio has enjoyed a similar experience. We have maintained our
growth stance, concentrating on our key investment tenets of strong management
and visible earnings, which we believe to be the main drivers of stock
performance over the medium term, and look to the future with confidence.
Lombard Odier International Portfolio Management
August 7, 2000
DJIA 10867.01
10
<PAGE>
Performance Information
Legg Mason Global Trust, Inc.
Total Returns for One Year, Five Years and Life of Class, as of June 30, 2000
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 adjustment has been made for any income taxes payable by
shareholders.
Each Fund has two authorized classes of shares: Primary Class and Navigator
Class. Europe Fund also offers Class A shares. Information about Navigator
Class, offered only to certain institutional investors, is contained in a
separate report to its shareholders.
The Funds' total returns as of June 30, 2000, were as follows:
<TABLE>
<CAPTION>
Europe Fund
-----------------------------------
Global International Emerging Including Excluding
Income Equity Markets Maximum Maximum
Trust Trust Trust Sales Charge/A/ Sales Charge/A/
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Average Annual Total Return
Primary Class:
One Year +1.13% +9.99% +28.82% N/A +17.26%
Five Years +2.84 +8.27 -- N/A --
Life of Class/B/ +4.71 +8.47 +7.54 N/A +18.00
Class A:
One Year N/A N/A N/A +12.56% +18.16%
Five Years N/A N/A N/A +21.48 +22.66
Life of Class/C/ N/A N/A N/A +9.69 +10.08
Cumulative Total Return
Primary Class:
One Year +1.13% +9.99% +28.82% N/A +17.26%
Five Years +15.04 +48.80 -- N/A --
Life of Class/B/ +39.36 +54.75 +34.63 N/A +62.68
Class A:
One Year N/A N/A N/A +12.56% +18.16%
Five Years N/A N/A N/A +164.53 +177.71
Life of Class/C/ N/A N/A N/A +260.89 +278.94
-----------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Class A shares are subject to a front-end sales charge which varies
depending on the purchase amount.The maximum charge is 4.75% and it is
reduced as the purchase amount increases. See the prospectus for
additional information.
/B/ Primary Class inception dates are:
Global Income Trust--April 15, 1993
International Equity Trust--February 17, 1995
Emerging Markets Trust--May 28, 1996
Europe Fund--July 23, 1997
/C/ Europe Fund Class A inception date is August 19, 1986.
11
<PAGE>
Industry Diversification
Legg Mason Global Trust, Inc.
June 30, 2000 (Unaudited)
International Equity Trust
<TABLE>
<CAPTION>
% of Net Market
Assets Value
--------------------------------------------------------
(000)
<S> <C> <C>
Aerospace & Defense 1.4% $ 3,507
Air Freight & Couriers 0.6 1,448
Airlines 0.4 1,009
Auto Components 0.2 486
Automobiles 3.5 8,869
Banks 9.4 23,961
Beverages 0.5 1,262
Biotechnology 0.4 1,102
Chemicals 2.6 6,615
Commercial Services &
Distribution 1.4 3,637
Communications Equipment 7.7 19,517
Computers & Peripherals 2.4 6,000
Construction & Engineering 1.2 3,087
Containers & Packaging 0.4 963
Diversified Financials 4.0 10,250
Diversified Telecommunication
Services 9.8 24,932
Electric Utilities 2.0 5,029
Electrical Equipment 1.8 4,460
Electronic Equipment &
Instruments 1.3 3,321
Food & Drug Retail 0.3 693
Food Products 2.6 6,653
Gas Utilities 2.3 5,844
Health Care Equipment &
Supplies 0.9 2,198
Hotels, Restaurants & Leisure 0.2 625
Household Durables 2.1 5,328
<CAPTION>
% of Net Market
Assets Value
--------------------------------------------------------
(000)
<S> <C> <C>
Household Products 0.7% $ 1,711
Industrial Conglomerates 1.7 4,312
Insurance 4.8 12,294
IT Consulting & Services 0.6 1,613
Leisure Equipment & Products 0.4 1,022
Machinery 0.8 2,101
Media 0.5 1,290
Metals & Mining 1.3 3,241
Multiline Retail 0.2 504
Office Electronics 1.4 3,515
Oil & Gas 6.1 15,471
Paper & Forest Products 1.2 2,989
Pharmaceuticals 7.6 19,388
Real Estate 0.2 587
Semiconductor Equipment &
Products 4.0 10,089
Software 0.5 1,397
Specialty Apparel 0.3 675
Textiles & Apparel 1.1 2,733
Tobacco 1.0 2,483
Trading Companies &
Distributors 0.9 2,332
Wireless Telecommunication
Services 4.0 10,070
Short-Term Investments 0.9 2,411
---- --------
Total Investment Portfolio 99.6 253,024
Other Assets Less Liabilities 0.4 960
----- --------
Net Assets 100.0% $253,984
===== ========
</TABLE>
12
<PAGE>
Emerging Markets Trust
<TABLE>
<CAPTION>
% of Net Market
Assets Value
--------------------------------------------------------
(000)
<S> <C> <C>
Aerospace & Defense 0.7% $ 828
Automobiles 1.8 2,138
Banks 8.3 9,804
Beverages 2.3 2,673
Chemicals 0.3 406
Communications Equipment 8.4 10,009
Computers & Peripherals 3.3 3,940
Construction Materials 1.1 1,297
Diversified Financials 3.5 4,147
Electric Utilities 2.8 3,300
Electronic Equipment &
Instruments 0.8 901
Food Products N.M. 29
Hotel, Restaurant & Leisure 1.4 1,701
Household Durables 3.3 3,875
Industrial Conglomerates 2.7 3,157
Insurance N.M. 37
IT Consulting & Services 0.7 772
Marine 0.7 836
Media 2.7 3,181
Metals & Mining 4.5 5,363
Multiline Retail 2.1 2,524
Oil & Gas 5.3 6,307
Paper & Forest Products 2.0 2,361
Pharmaceuticals 0.3 366
Real Estate 0.4 495
Semiconductor Equipment &
Products 12.9 15,345
Software 2.6 3,049
Diversified Telecommunication
Services 14.1 16,723
Tobacco 0.4 471
Transportation Infrastructure 0.4 415
Wireless Communication
Services 8.0 9,498
Short-Term Investments 2.1 2,445
----- --------
Total Investment Portfolio 99.9 118,393
Other Assets Less Liabilities 0.1 137
----- --------
Net Assets 100.0% $118,530
===== ========
</TABLE>
---------
N.M. -- Not meaningful.
Europe Fund
<TABLE>
<CAPTION>
% of Net Market
Assets Value
--------------------------------------------------------
(000)
<S> <C> <C>
Automotive 1.1% $ 1,350
Banking 10.3 12,446
Computer Services 9.4 11,386
Diversified 9.0 10,915
Electronics 9.6 11,542
Finance 5.8 7,012
Human Resources 1.6 1,888
Insurance 5.4 6,511
Miscellaneous Manufacturing 3.7 4,515
Oil & Gas 8.8 10,678
Pharmaceuticals & Health Care 6.9 8,375
Publishing 1.5 1,764
Retail Sales 2.0 2,425
Telecommunications 25.1 30,341
----- --------
Total Investment Portfolio 100.2 121,148
Other Assets Less Liabilities (0.2) (200)
----- --------
Net Assets 100.0% $120,948
===== ========
</TABLE>
13
<PAGE>
Statement of Net Assets
Legg Mason Global Trust, Inc.
June 30, 2000 (Unaudited)
(Amounts in Thousands)
Global Income Trust
<TABLE>
<CAPTION>
Maturity
Rate Date Par/A/ Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Long-Term Securities -- 98.3%
British Sterling -- 11.7%
Corporate Bonds and Notes -- 11.7%
Auto Parts and Equipment -- 0.9%
GKN plc 6.750% 10/28/19 450 $ 645
-------
Banking and Finance -- 5.6%
Bank of Scotland Capital Funding 8.117% 5/31/10 120 181/B/
Ford Motor Credit Company 7.250% 2/22/05 500 764
Gala Group Holdings PLC 12.00% 6/1/10 220 343/C/
Lehman Brothers Holdings plc 6.950% 6/22/04 450 669
National Westminster Bank 7.125% 10/5/22 500 750
Unique Publishing Finance Co PLC 6.542% 3/30/21 400 570
Welcome Break Financial PLC 8.284% 9/1/17 400 677
-------
3,954
-------
Cable -- 0.6%
NTL Incorporated 0.000% 4/1/08 500 461/B/
-------
Diversified Services -- 0.6%
Luxfer Holdings PLC 10.125% 5/1/09 300 418
-------
Food, Beverage and Tobacco -- 1.0%
Gallaher Group 6.625% 5/21/09 500 698
-------
Insurance -- 0.8%
Prudential plc 5.875% 5/11/29 400 547
-------
Media and Entertainment -- 0.8%
Carlton Communications plc 5.625% 3/2/09 400 537
-------
Telecommunications -- 1.4%
Nippon Telegraph and Telephone
Corporation 7.375% 12/2/03 450 694
Telewest PLC 9.875% 2/1/10 230 331
-------
1,025
-------
Total British Sterling 8,285
--------------------------------------------------------------------------------------------------------------------------
Danish Krone -- 4.5%
Corporate Bonds and Notes -- 4.5%
Banking and Finance -- 4.5%
Nykredit 6.000% 10/1/29 13,078 1,533
Nykredit 7.000% 10/1/32 9,975 1,224
Unikredit Realkredit 6.000% 10/1/29 3,830 449
-------
Total Danish Krone 3,206
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Maturity
Rate Date Par/A/ Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Euro -- 6.7%
Corporate Bonds and Notes -- 5.9%
Banking and Finance -- 1.8%
Lloyds Bank PLC 5.625% 7/15/49 1,500 $ 1,300
-------
Chemicals -- 1.0%
Huntsman ICI Chemicals 10.125% 7/1/09 600 577
Ineos Acrylics Finance PLC 10.250% 5/15/10 120 118/C/
-------
695
-------
Computers (Software/Services) -- 0.5%
Netia Holdings II B V 13.500% 6/15/09 400 382
-------
Finance -- 1.1%
International Leasing Finance
Corporation 4.125% 7/12/04 850 761
-------
Telecommunications -- 1.1%
United Pan-Europe
Communications N.V. 10.875% 8/1/09 450 366
Viatel Incorporated 11.500% 3/15/09 500 394
-------
760
-------
Transportation Services -- 0.4%
CHC Helicopter Corporation 11.750% 7/15/07 300 298/C/
-------
Total Corporate Bonds and Notes 4,196
-------
Foreign Government Obligations -- 0.8%
Fixed-Rate Securities -- 0.8%
Federal Republic of Germany 5.625% 1/4/28 550 532
-------
Total Euro 4,728
--------------------------------------------------------------------------------------------------------------------------
Greek Drachma -- 2.8%
Foreign Government Obligations -- 2.8%
Fixed-Rate Securities -- 2.8%
Hellenic Republic 6.300% 1/29/09 450,000 1,291
Hellenic Republic 6.500% 10/22/19 240,000 694
-------
Total Greek Drachma 1,985
--------------------------------------------------------------------------------------------------------------------------
Hungarian Forint -- 1.0%
Foreign Government Obligations -- 1.0%
Fixed-Rate Securities -- 1.0%
Republic of Hungary 12.500% 4/12/02 85,000 324
Republic of Hungary 10.000% 4/12/03 100,000 375
-------
Total Hungarian Forint 699
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
Global Income Trust -- Continued
<TABLE>
<CAPTION>
Maturity
Rate Date Par/A/ Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New Zealand Dollar -- 1.0%
Foreign Government Obligations -- 1.0%
Fixed-Rate Securities -- 1.0%
New Zealand 7.000% 7/15/09 1,450 $ 689
--------------------------------------------------------------------------------------------------------------------------
Norwegian Krone -- 2.1%
Foreign Government Obligations -- 2.1%
Fixed-Rate Securities -- 2.1%
Kingdom of Norway 5.500% 5/15/09 13,000 1,446
--------------------------------------------------------------------------------------------------------------------------
Polish Zloty -- 3.2%
Foreign Government Obligations -- 3.2%
Fixed-Rate Securities -- 3.2%
Republic of Poland 8.500% 10/12/04 11,600 2,122
Republic of Poland 8.500% 2/12/05 800 148
-------
Total Polish Zloty 2,270
--------------------------------------------------------------------------------------------------------------------------
South African Rand -- 0.4%
Foreign Government Obligations -- 0.4%
Fixed-Rate Securities -- 0.4%
Republic of South Africa 13.000% 8/31/10 1,800 248
--------------------------------------------------------------------------------------------------------------------------
Swedish Krona -- 1.1%
Foreign Corporate Bonds -- 1.1%
Banking and Finance -- 1.1%
Statens Bostadsfinansier AB 5.500% 10/15/03 7,000 783
--------------------------------------------------------------------------------------------------------------------------
Turkish Lira -- 2.0%
Foreign Government Obligations -- 2.0%
Fixed-Rate Securities -- 2.0%
Republic of Turkey 72.000% 10/3/01 390,000,000 874
Republic of Turkey 72.000% 10/3/01 250,000,000 560
-------
Total Turkish Lira 1,434
--------------------------------------------------------------------------------------------------------------------------
United States Dollar -- 61.8%
Corporate Bonds and Notes -- 24.2%
Aerospace/Defense -- 0.4%
Lockheed Martin Corporation 8.500% 12/1/29 300 306
-------
Auto Parts and Equipment -- 1.7%
J. L. French Automotive Casting 11.500% 6/1/09 100 91
Tenneco Automotive Inc. 11.625% 10/15/09 250 222
TRW Inc. 7.750% 6/1/29 1,000 903
-------
1,216
-------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Maturity
Rate Date Par/A/ Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Corporate Bonds and Notes -- Continued
Banking and Finance -- 4.6%
Associates Corporation of
North America 5.800% 4/20/04 750 $ 702
Banque De Tunisie 8.250% 9/19/27 1,000 875/D/
Bayerische Hypotheken-und
Wechsel-Bank AG 8.741% 6/30/31 30 28/C,D/
Dresdner Funding Trust I 8.151% 6/30/31 40 34/C/
IBJ Preferred Capital Corp. LLC 8.790% 12/29/49 500 454/B,C/
Lehman Brothers Holdings Inc. 6.625% 4/1/04 500 477
SB Treasury Company LLC 9.400% 12/29/49 500 489/B,C/
The Bank of Tokyo-Mitsubishi, Ltd. 8.400% 4/15/10 225 227/D/
-------
3,286
-------
Building Materials -- 0.3%
American Standard Companies, Inc. 8.250% 6/1/09 250 241
-------
Cable -- 0.7%
Adelphia Communications Corporation 7.875% 5/1/09 250 211
Charter Communication Holdings LLC 8.625% 4/1/09 125 110
Classic Cable Incorporated 9.375% 8/1/09 50 44
Classic Cable Incorporated 10.500% 3/1/10 75 69
CSC Holdings Inc. 8.125% 7/15/09 30 29
-------
463
-------
Chemicals -- 1.7%
Dow Chemical Company 7.375% 11/1/29 950 921
Lyondell Chemical Company 9.625% 5/1/07 250 248
-------
1,169
-------
Electric -- 0.2%
CMS Energy Corporation 7.500% 1/15/09 125 111
-------
Electronics -- 0.2%
Flextronics International Ltd. 9.875% 7/1/10 125 126/C,D/
-------
Energy -- 0.3%
P&L Coal Holdings Corp. 9.625% 5/15/08 250 233
-------
Environmental Services -- 0.7%
Allied Waste North America
Incorporated 10.000% 8/1/09 200 169
Waste Management Inc. 7.000% 7/15/28 450 351
-------
520
-------
Food, Beverage and Tobacco -- 1.4%
J. Seagram & Sons 7.600% 12/15/28 1,000 955
-------
</TABLE>
17
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
Global Income Trust-- Continued
<TABLE>
<CAPTION>
Maturity
Rate Date Par/A/ Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Corporate Bonds and Notes -- Continued
Gas and Pipeline Utilities -- 1.1%
Occidental Petroleum Corporation 8.450% 2/15/29 750 $ 768
-------
Health Care (Hospital Management) -- 0.2%
Tenet Healthcare Corporation 8.125% 12/1/08 125 114
-------
Industrial Services -- 0.4%
Blount International Inc. 13.000% 8/1/09 250 255
-------
Media -- 1.7%
News America Holdings Incorporated 8.500% 2/23/25 860 884
Time Warner, Inc. 6.625% 5/15/29 400 330
-------
1,214
-------
Oil and Gas -- 0.9%
Conoco Inc. 5.900% 4/15/04 700 668
-------
Retail -- 1.0%
Wal-Mart Stores Inc. 6.875% 8/10/09 750 733
-------
Telecommunications -- 4.0%
Deutsche Telekom International
Finance BV 8.250% 6/15/30 700 700/D/
Global Crossing Holdings Limited 9.500% 11/15/09 250 241/D/
Grupo Iusacell S.A. de C.V. 14.250% 12/1/06 250 262/D/
IMPSAT Fiber Networks Inc. 13.750% 2/15/05 300 268/C/
Lucent Technologies Inc. 6.450% 3/15/29 500 438
Metromedia Fiber Network Inc. 10.000% 12/15/09 250 248
NEXTLINK Communications, Inc. 10.750% 6/1/09 250 248
Verio Inc. 10.625% 11/15/09 250 278/C/
VoiceStream Wireless Corporation 0.000% 11/15/09 111 114/B/
-------
2,797
-------
Transportation -- 1.5%
Avis Group Holdings, Inc. 11.000% 5/1/09 250 262
Union Pacific Corporation 6.625% 2/1/29 1,000 832
-------
1,094
-------
Utilities -- 1.2%
Korea Electric Power Corporation 7.750% 4/1/13 930 862/D/
-------
Total Corporate Bonds and Notes 17,131
-------
Asset-Backed Securities -- 0.5%
Fixed-Rate Securities -- 0.4%
Contimortgage Home Equity Loan Trust 6.420% 4/25/14 288 286
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Maturity
Rate Date Par/A/ Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asset-Backed Securities -- Continued
Indexed Securities -- 0.1%
SLM Student Loan Trust 1998-2 6.484% 4/25/07 52 $ 52/E/
-------
Total Asset-Backed Securities 338
-------
Mortgage-Backed Securities -- 0.3%
Stripped Securities -- 0.3%
GMAC Commercial Mortgage
Security Incorporated 1.025% 7/15/09 7,900 226/C,F(1)/
-------
U.S. Government and Agency Obligations -- 4.1%
Fixed-Rate Securities -- 1.6%
Fannie Mae 7.250% 1/15/10 130 131
Fannie Mae 6.210% 8/6/38 60 53
Freddie Mac 6.625% 9/15/09 450 435
Freddie Mac 6.750% 9/15/29 200 191
Tennessee Valley Authority 5.375% 11/13/08 170 151
Tennessee Valley Authority 6.750% 11/1/25 140 135
-------
1,096
-------
Indexed Securities -- 2.2%
United States Treasury Inflation-
Indexed Security 3.625% 1/15/08 436 423/G/
United States Treasury Inflation-
Indexed Security 3.875% 4/15/29 1,166 1,162/G/
-------
1,585
-------
Stripped Securities -- 0.3%
United States Treasury Bonds 0.000% 11/15/21 730 198/F(2)/
-------
Total U.S. Government and Agency Obligations 2,879
-------
U.S. Government Agency Mortgage-Backed Securities -- 17.4%
Fixed-Rate Securities -- 16.1%
Fannie Mae 6.500% 5/1/29 1,663 1,570
Fannie Mae 6.500% 7/1/29 675 637
Fannie Mae 7.500% 7/15/29 500 493/H/
Fannie Mae 6.500% 12/1/29 995 938
Fannie Mae 6.500% 1/1/30 996 939
Fannie Mae 6.500% 2/1/30 995 939
Fannie Mae 7.500% 2/1/30 2,964 2,922
Freddie Mac 6.500% 8/1/29 2,367 2,234
Government National Mortgage Association 7.000% 8/15/28 200 194
Government National Mortgage Association 7.000% 7/15/29 500 486/H/
-------
11,352
-------
</TABLE>
19
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
Global Income Trust -- Continued
<TABLE>
<CAPTION>
Maturity
Rate Date Par/A/ Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government Agency Mortgage-Backed Securities -- Continued
Stripped Securities -- 1.3%
Resolution Funding Corporation 0.000% 10/15/19 3,200 $ 919/F(2)/
Resolution Funding Corporation 0.000% 4/15/30 90 15/F(2)/
-------
934
-------
Total U.S. Government Agency Mortgage-Backed Securities 12,286
Foreign Government Obligations -- 15.3%
Fixed-Rate Securities -- 12.5%
Argentine Republic 0.000% 10/15/02 40 32/D,I/
Argentine Republic 0.000% 10/15/04 130 79/D,I/
Argentine Republic 11.375% 3/15/10 620 565/D/
Argentine Republic 11.750% 6/15/15 20 18/D/
Federative Republic of Brazil 7.375% 4/15/09 285 238/B,D/
Federative Republic of Brazil 8.000% 4/15/14 776 571/D,J/
Republic of Colombia 9.750% 4/23/09 450 396/D/
Republic of Colombia 11.750% 2/25/20 600 490/D/
Republic of Panama 4.250% 7/17/14 200 160/B,D/
Republic of Panama 7.063% 7/17/16 738 607/D,J/
Republic of Peru 4.500% 3/7/17 50 33/B,D/
Republic of Peru 4.500% 3/7/17 785 523/B,D/
Republic of Poland 6.000% 10/27/14 210 188/B,D/
Republic of South Korea 8.875% 4/15/08 70 72/D/
Republic of the Philippines 9.875% 1/15/19 440 357/D/
Republic of the Philippines 9.500% 10/21/24 325 304/D/
Republic of the Philippines 10.625% 3/16/25 200 171/D/
Republic of Turkey 11.875% 1/15/30 350 374/C,D/
State of Qatar 9.750% 6/15/30 1,000 989/C,D/
United Mexican States 10.375% 2/17/09 580 618/D/
United Mexican States 11.500% 5/15/26 1,535 1,821/D/
United Mexican States 11.500% 5/15/26 200 240/D/
-------
8,846
-------
Indexed Securities -- 2.8%
Argentine Republic 7.375% 3/31/05 62 56/D,E/
Kingdom of Morocco 7.750% 1/1/09 1,001 895/D,E/
Kingdom of Morocco 7.750% 1/1/09 110 99/D,E/
Republic of Bulgaria 7.063% 7/28/11 1,175 942/D,E/
Vnesheconombank 7.938% 12/15/15 25 8/C,D,E,K/
-------
2,000
-------
Total Foreign Government Obligations 10,846
-------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Par/A/ Value
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Warrants -- N.M.
Firstcom Corporation 18wts $ N.M.
-------
Total United States Dollar 43,706
-------
Total Long-Term Securities (Identified Cost -- $71,246) 69,479
--------------------------------------------------------------------------------------------------------------------------
Short-Term Securities -- 0.4%
Options Purchased -- 0.1%
Eurodollar Futures Call, October 2000, Strike Price $92.75 41/L/ 33
-------
Repurchase Agreements -- 0.3%
Lehman Brothers, Inc.
6.60%, dated 6/30/00, to be repurchased at $144 on 7/3/00
(Collateral: $160 Federal Home Loan Bank Notes, 6.72%,
due 3/10/14, value $147) $144 144
Merrill Lynch Government Securities, Inc.
6.55%, dated 6/30/00, to be repurchased at $100 on 7/3/00
(Collateral: $105 Federal Home Loan Bank Notes, 5.36%,
due 9/28/05, value $105) 100 100
-------
244
-------
Total Short-Term Securities (Identified Cost -- $287) 277
--------------------------------------------------------------------------------------------------------------------------
Total Investments -- 98.7% (Identified Cost -- $71,533) 69,756
Other Assets Less Liabilities -- 1.3% 932
-------
Net assets consisting of:
Accumulated paid-in capital applicable to
8,224 shares outstanding $83,546
Under/(over) distributed net investment income (1,347)
Accumulated net realized gain/(loss) on investments
and currency transactions (9,758)
Unrealized appreciation/(depreciation) of investments
and currency transactions (1,753)
-------
Net assets -- 100.0% $70,688
=======
Net asset value per share $8.60
=====
</TABLE>
21
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
Global Income Trust -- Continued
<TABLE>
<CAPTION>
Expiration Actual Appreciation/
Date Contracts (Depreciation)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Options Written/M/
Eurodollar Futures Call, Strike Price $93.25 October 2000 12 $ 5
Eurodollar Futures Call, Strike Price $93.50 October 2000 4 1
U.S. Treasury Bond Futures Put, Strike Price $94 September 2000 13 5
-----
$ 11
-----
Futures Contracts Written/M/
U.S. Treasury Bond Futures September 2000 27 $ (22)
U.S. Treasury Bond Futures September 2000 27 4
-----
$(18)
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Securities are grouped by the currencies in which they were issued, and
the par values are also in the issuance currency.
/B/ Stepped-coupon security -- A security with a predetermined schedule of
interest or dividend rate changes.
/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
5.31% of net assets.
/D/ Yankee Bond -- A dollar-denominated bond issued in the U.S. by foreign
entities.
/E/ Indexed Security -- The rates of interest earned on these securities are
tied to the London Interbank Offered Rate (LIBOR), Consumer Price Index
(CPI), or the One-Year Treasury Constant Maturity Rate.
/F/ Stripped Security -- Security with interest-only or principal-only
payment streams, denoted by (1) or (2), respectively. For interest-only
securities, the amount shown as principal is the notional balance used to
calculate the amount of interest due.
/G/ U.S. Treasury Inflation-Indexed Security -- U.S. Treasury security whose
principal value is adjusted daily in accordance with changes in the
Consumer Price Index. Interest is calculated on the basis of the current
adjusted principal value.
/H/ When-issued security -- Security purchased on a delayed delivery basis.
Final settlement amount and maturity date have not yet been announced.
/I/ Zero-coupon bond -- A bond with no periodic interest payments which is
sold at such a discount as to produce a current yield to maturity.
/J/ Front-Loaded Interest Reduction Bond (FLIRB) -- Security pays a portion
of the coupon in cash and a portion is capitalized as an increase in par
value.
/K/ Bond is in default at June 30, 2000.
/L/ Actual number of contracts.
/M/ Options and futures are described in more detail in the notes to
financial statements.
N.M. -- Not meaningful.
See notes to financial statements.
22
<PAGE>
Statement of Net Assets
Legg Mason Global Trust, Inc.
June 30, 2000 (Unaudited)
(Amounts in Thousands)
International Equity Trust
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock and Equity Interests -- 98.7%
Argentina -- 0.2%
Banco de Galicia y Buenos Aires S.A. de C.V. 108 $ 404
--------
Australia -- 1.2%
Australia & New Zealand Banking Group Limited 78 594
Newcrest Mining Limited 76 206/A/
Qantas Airways Limited 499 1,008
Westfield Trust 302 586
Woolworths Limited 188 692/A/
--------
3,086
--------
Belgium -- 0.1%
Agfa Gevaert NV 13 289
Suez Lyonnaise des Eaux - Strip 20 N.M./A/
--------
289
--------
Brazil -- 0.4%
Tele Norte Leste Participacoes S.A. ADR 40 951/A/
--------
Canada -- 1.2%
Bank of Nova Scotia 23 559
BCE Emergis Inc. 7 421/A/
Bombardier Inc. 38 1,032
Canadian Natural Resources Ltd. 25 721/A/
Dofasco Inc. 22 354
Stelco Inc. 2 7
--------
3,094
--------
Denmark -- 0.3%
Vestas Wind Systems A/S 20 731/A/
--------
Finland -- 2.9%
Nokia Oyj 138 7,052/A/
Stonesoft Oyj 13 205/A/
--------
7,257
--------
France -- 10.8%
Alcatel 34 2,197
Axa 17 2,725/A/
BNP Paribas SA 22 2,069
Credit Lyonnais 21 1,003/A/
Dexia - Strip VVPR 5 N.M./A/
France Telecom S.A. 27 3,802
Pechiney SA 25 1,047
Pernod-Ricard SA 7 386
</TABLE>
23
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
International Equity Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
France -- Continued
PSA Peugeot Citroen 9 $ 1,866
Publicis SA 1 272
Rhodia SA 57 956/A/
Sagem SA 1 586
SEITA 40 1,659
Societe Generale 34 2,069
STMicroelectronics 39 2,426/A/
Total Fina SA 16 2,397
Usinor SA 34 417
Vivendi SA 17 1,501
--------
27,378
--------
Germany -- 5.4%
Allianz AG 7 2,658/A/
Deutsche Pfrandbrief-und Hypothekenbank AG 7 748
Deutsche Telekom AG 77 4,413
EM. TV & Merchandising AG 17 1,013/A/
Muenchener Rueckversicherungs-Gesellschaft AG 5 1,712
Siemens AG 19 2,926
Singulus Technologies AG 6 326/A/
--------
13,796
--------
Hong Kong -- 2.8%
Brilliance China Automotive Holdings Limited ADR 48 834
China Mobile (Hong Kong) Limited 105 926/A/
Citic Pacific Ltd. 210 1,102
Dao Heng Bank Group Ltd. 319 1,412
First Pacific Company Limited 873 297/A/
Hutchison Whampoa Limited 113 1,424
Peregrine Investment Holdings Limited 256 N.M./A,B/
Swire Pacific Ltd. 184 1,075
--------
7,070
--------
Ireland -- 0.5%
Kerry Group Plc 94 1,229/A/
--------
Italy -- 4.7%
Assicurazioni Generali 65 2,221/A/
Banca Agricola Mantovana 7 55/A/
Benetton Group S.p.A. 229 479/A/
ENI SpA 375 2,168/A/
Fiat S.p.A. 23 594/A/
Telecom Italia SpA 199 2,732/A/
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Italy -- Continued
Telecom Italia Mobile (TIM) SpA 292 $ 2,978/A/
UniCredito Italiano S.p.A. 141 676/A/
--------
11,903
--------
Japan -- 25.5%
Benesse Corporation 11 790/A/
Canon, Inc. 40 1,990
Chubu Electric Power Company, Incorporated 48 860/A/
Chugai Pharmaceutical Co., Ltd. 97 1,833
Citizen Watch Co., Ltd. 163 1,573
Credit Saison Co., Ltd. 32 737/A/
DAIKIN INDUSTRIES, LTD. 38 883/A/
DAITO TRUST CONSTRUCTION CO., LTD. 43 703/A/
Daiwa Securities Group Inc. 145 1,913
Denso Corporation 16 389
Eisai Company, Ltd. 42 1,351
Fuji Heavy Industries Ltd. 204 1,480
Fujitsu Limited 22 761/A/
HONDA MOTOR CO., LTD. 30 1,021
Kao Corporation 56 1,710
Kawasaki Steel Corporation 248 355
Keyence Corporation 2 693
Kishu Paper Co., Ltd. 10 19
Kyocera Corporation 2 339/A/
Marubeni Corporation 234 805
Matsushita Electric Industrial Company Ltd. 25 648
Mitsubishi Chemical Corporation 180 738
Mitsubishi Corporation 81 732
Mitsubishi ELectric Corporation 106 1,147
Mitsubishi Rayon Company, Ltd. 538 1,638
MITSUI & CO., LTD. 104 794
Mitsui Chemicals, Inc. 39 272
Murata Manufacturing Co., Ltd. 11 1,578
NEC Corporation 77 2,417
Nintendo Co., Ltd. 3 436/A/
Nippon Steel Corporation 406 853
Nippon Telegraph & Telephone Corporation (NTT) N.M. 2,658/A/
OJI PAPER CO., LTD. 121 832/A/
OLYMPUS OPTICAL CO., LTD. 38 681
Rengo Co., Ltd. 24 130
Ricoh Company, Ltd. 72 1,523
Rohm Company Ltd. 6 1,753
</TABLE>
25
<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
Sankyo Company, Ltd. 13 $ 583/A/
SANYO ELECTRIC CO., LTD. 75 674
Secom Co., Ltd. 7 511
Sharp Corporation 47 831
Shin-Etsu Chemical Co., Ltd. 6 304
Sony Corporation 13 1,222/A/
Sumitomo Forestry Company 11 74/A/
Sumitomo Rubber Industries, Ltd. 16 96
Taisho Pharmaceutical Company, Ltd. 45 1,612/A/
Takeda Chemical Industries 48 3,149
TEIJIN LIMITED 110 536
The Bank of Iwate, Ltd. N.M. 1/A/
The Bank of Tokyo-Mitsubishi, Ltd. 21 254/A/
The Chiba Bank, Ltd. 89 351
The Nomura Securities Co., Ltd. 61 1,492/A/
The Sakura Bank, Ltd. 42 290
The Tokai Bank Ltd. 102 503
Tokyo Electric Power 34 833/A/
TOKYO SEIMITSU CO., LTD. 8 1,071/A/
TOSHIBA CORPORATION 250 2,820/A/
TOSOH CORPORATION 124 625
Toyota Motor Corporation 58 2,640
YAKULT HONSHA CO., LTD 163 2,165
Yamaha Motor Co., Ltd. 47 430
Yamanouchi Pharmaceutical Co., Ltd. 23 1,255/A/
YASKAWA Electric Corporation 115 1,373/A/
--------
64,730
--------
Malaysia -- 0.2%
Genting Berhad 170 626
--------
Mexico -- 0.3%
Fomento Economico Mexicano, S.A. de C.V. 135 576/A/
Fomento Economico Mexicano, S.A. de C.V. ADR 7 301
--------
877
--------
Netherlands -- 7.3%
Aegon N.V. 34 1,195
Buhrmann NV 58 1,644/A/
CSM NV 51 1,005/A/
Dsm N.V. 48 1,540/A/
IHC Caland N.V. 4 204
ING Groep N.V. 42 2,825
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Netherlands -- Continued
Koninklijke (Royal) Philips Electronics N.V. 62 $ 2,905
Koninklijke Numico N.V. 16 759/A/
Koninklijke Numico N.V. - Coupons 16 8/A/
KPN NV 40 1,794
Royal Dutch Petroleum Company 52 3,257
TNT Post Group NV 54 1,446
--------
18,582
--------
Portugal -- 0.5%
Portugal Telecom SA 104 1,166
--------
Russia -- 0.2%
Surgutneftegaz ADR 48 633
--------
Saudi Arabia -- 0.2%
ABSA Group Limited 153 578
--------
Singapore -- 2.0%
Overseas Union Bank Ltd. 268 1,040/A/
Singapore Technologies Engineering Ltd 942 1,385/A/
Total Access Communication Public Company Limited 242 973/A/
United Overseas Bank Ltd. 146 957
Venture Manufacturing (Singapore) Ltd. 70 713
--------
5,068
--------
South Korea -- 0.4%
Samsung Electronics 3 1,019
Samsung Fire & Marine Insurance N.M. 13/A/
--------
1,032
--------
Spain -- 4.4%
Acciona SA 39 1,496/A/
Banco Santander Central Hispano, SA 72 756
Fomento do Construcciones y Contratas S.A. 47 884
Gas Natural SDG, S.A. 93 1,671/A/
Hidroelectrica del Cantabrico, SA 62 1,298/A/
Repsol-YPF, S.A. 97 1,937/A/
Telefonica S.A. 140 3,014
--------
11,056
--------
Sweden -- 3.4%
Electrolux AB 59 905
Holmen AB 33 726
</TABLE>
27
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
International Equity Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sweden -- Continued
OM Gruppen AB 11 $ 487/A/
Skandia Forsakrings AB 16 433
Svenska Cellulosa AB 65 1,231
Telefonaktiebolaget LM Ericsson AB 242 4,788/A/
--------
8,570
--------
Switzerland -- 6.0%
ABB Ltd. 22 2,579/A/
Adecco SA 1 688
Compagnie Financiere Richemont AG N.M. 822
Credit Suisse Group 11 2,119
Nestle SA 1 1,481
Novartis AG 2 2,804/A/
Roche Holding AG N.M. 1,499/A/
The Swatch Group AG 3 678
UBS AG 17 2,549/A/
--------
15,219
--------
Thailand -- 0.2%
Bangkok Bank Public Company Limited 498 610
--------
United Kingdom -- 17.6%
Alliance & Leicester plc 21 183/A/
Arjo Wiggins Appleton p.l.c. 241 936
ARM Holdings plc 218 2,330/A/
AstraZeneca Group plc 57 2,647
Barclays PLC 69 1,720
BG Group plc 279 1,803/A/
BP Amoco Plc 454 4,356
British Telecommunications plc 149 1,923
Celltech Group 57 1,104/A/
Centrica plc 712 2,376/A/
CGNU PLC 77 1,277
Cookson Group plc 88 295
George Wimpey plc 597 1,045
Glaxo Wellcome plc 51 1,475
Glynwed International plc 192 688
Henlys Group plc 12 69/A/
Lloyds TSB Group plc 163 1,541
Logica plc 68 1,616
Marconi plc 128 1,668
Next Plc 58 505
Rolls-Royce plc 310 1,101
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
United Kingdom -- Continued
Scottish & Southern Energy plc 222 $ 2,039
Signet Group plc 727 608/A/
Smith & Nephew plc 412 1,520
SmithKline Beecham Plc 135 1,770
Standard Chartered plc 75 928
The Sage Group plc 121 979/A/
Vodafone AirTouch PLC 1,529 6,176
--------
44,678
--------
Total Common Stocks and Equity Interests (Identified Cost -- $234,004) 250,613
------------------------------------------------------------------------------------------------------------------
Repurchase Agreements -- 0.9%
Bank of America
6.82%, dated 6/30/00, to be repurchased at $1,206 on 7/3/00
(Collateral: $1,351 Freddie Mac mortgage-backed securities,
6.00%, due 9/1/28, value $1,243) $ 1,205 1,205
Goldman, Sachs & Company
6.82%, dated 6/30/00, to be repurchased at $1,206 on 7/3/00
(Collateral: $1,221 Fannie Mae mortgage-backed securities,
8.50%, due 10/1/28, value $1,251) 1,206 1,206
--------
Total Repurchase Agreements (Identified Cost -- $2,411) 2,411
------------------------------------------------------------------------------------------------------------------
Total Investments -- 99.6% (Identified Cost -- $236,415) 253,024
Other assets less liabilities -- 0.4% 960
--------
Net assets consisting of:
Accumulated paid-in capital applicable to:
19,609 Primary Class shares outstanding $228,824
3 Navigator Class shares outstanding 49
Accumulated net investment income/(loss) (1,482)
Accumulated net realized gain/(loss) on investments
and foreign currency transactions 10,214
Accumulated appreciation/(depreciation) of investments
and foreign currency transactions 16,379
--------
Net assets -- 100.0% $253,984
========
Net asset value per share:
Primary Class $12.95
======
Navigator Class $13.04
======
------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Non-income producing.
/B/ In bankruptcy proceedings.
N.M. -- Not meaningful.
See notes to financial statements.
29
<PAGE>
Statement of Net Assets
Legg Mason Global Trust, Inc.
June 30, 2000 (Unaudited)
(Amounts in Thousands)
Emerging Markets Trust
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock and Equity Interests -- 92.1%
Brazil -- 8.0%
Companhia Vale do Rio Doce 7 $ 180
Embratel Participacoes S.A. 59,900 1,116
Petroleo Brasileiro S.A. 122 3,584
Tele Celular Sul Participacoes S.A. 41,500 146
Tele Centro Oeste Celular Participacoes S.A. 40,200 157
Tele Centro Sul Participacoes S.A. ADR 14 986/A/
Tele Nordeste Celular Participacoes S.A. 121,800 330
Tele Norte Leste Participacoes S.A. ADR 64 1,521/A/
Tele Norte Leste Participacoes S.A. (Telemar) 43,140 837
Votorantim Celulose e Papel S.A. ADR 34 623
--------
9,480
--------
China -- 2.7%
China Unicom Limited 250 527/A/
Great Wall Technology Co., Ltd. 500 346
Jiangxi Copper Company Ltd. 5,000 430/A/
Konka Group Co., Ltd. 1,000 1,030
Shenyang Public Utility Holdings Company Limited 3,388 452/A/
Shenzhen Expressway Company Limited GDR 3,000 416/B/
--------
3,201
--------
Egypt -- 0.8%
Egyptian Company for Mobile Service (MobiNil) 30 976/A/
International Food Egypt 5 29/A/
--------
1,005
--------
Greece -- 1.5%
Alpha Credit Bank 23 892
Hellenic Telecommunications Organization SA (OTE) 38 920
--------
1,812
--------
Hong Kong -- 7.7%
Bank Of East Asia, Ltd. 250 584
Brilliance China Automotive Holdings Limited 4,050 696
Brilliance China Automotive Holdings Limited ADR 83 1,445
China Mobile (Hong Kong) Limited 500 4,410/A/
China Pharmaceutical Enterprise and Investment Corporation Limited 3,000 366
China Pharmaceutical Enterprise and Investment Corporation Limited - Warrants 95 2/A/
Guangdong Brewery Holdings Limited 5,000 179
GZI Transport Limited 1,500 219
Legend Holdings Limited 500 484
TCL International Holdings Limited 2,000 731/A/
--------
9,116
--------
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Hungary -- 0.3%
Synergon Information Systems GDR 43 $ 391/A,B/
--------
India -- 8.9%
Global Tele-Systems Limited 65 1,949
HDFC Bank Ltd. 100 570
Himachal Futuristic Communications, Ltd. 125 3,975
Housing Development Finance Corporation Ltd. 70 876
Vikas WSP Limited N.M. 3
VisualSoft (India) Limited 12 1,917
Zee Telefilms Ltd. 130 1,305
--------
10,595
--------
Indonesia -- 1.4%
PT Hanjaya Mandala Sampoerna Tbk 325 472
PT Lippo Bank Tbk 18,921 270/A/
PT Lippo Bank Tbk - Certificates 12,460 N.M./A/
PT Lippo Bank Tbk - Warrants 12,460 N.M./A/
PT Ramayana Lestari Sentosa Tbk 764 489
PT Telekomunikasi Indonesia 1,315 462
--------
1,693
--------
Israel -- 0.8%
Bank Hapoalim 1 2
Makhteshim-Agan Industries Ltd. N.M. N.M./A/
NICE Systems Ltd. ADR 12 900/A/
--------
902
--------
Malaysia -- 5.6%
AMMB Holdings Berhad 350 1,170
Arab Malaysian Finance Berhad 1,078 1,259/A/
Commerce Asset-Holding Berhad 191 553
Lingui Developments Berhad 470 322
Magnum Corporation Berhad 1,300 766
Malaysian Pacific Industries Berhad 86 883
Resorts World Berhad 234 640
Sime Darby Bhd 802 1,030
--------
6,623
--------
</TABLE>
31
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
Emerging Markets Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mexico -- 12.1%
Alfa, S.A. 105 $ 240/A/
Carso Global Telecom 476 1,359/A/
Cemex SA de CV N.M. N.M.
Cemex SA de CV ADR 55 1,290/A/
Cemex SA de CV ADR - Warrants 3 9/A/
Consorcio Ara, S.A. de C.V. 360 424/A/
Controladora Comercial Mexicana S.A. de C.V. 445 416/A/
Corporation GEO, S.A. de C.V. 44 72/A/
Fomento Economico Mexicana, SA de C.V. ADR 40 1,735
Grupo Financiero Banamex Accival, SA de CV (Banacci) 450 1,892/A/
Grupo Financiero Bancomer, S.A. de C.V. 620 315/A/
Grupo Televisa S.A. ADR 27 1,882/A/
Telefonos de Mexico SA ADR 22 1,257
Telefonos de Mexico SA de CV (Telmex) 1,102 3,145
Wal-Mart de Mexico SA de CV 132 304/A/
--------
14,340
--------
Namibia -- 0.6%
Namibian Minerals Corporation 204 738/A/
--------
Philippines -- 0.7%
First Philippine Holdings Corporation 858 446
Manila Electric Company 251 369
--------
815
--------
Poland -- 1.7%
Orbis S.A. 38 297/A/
Softbank S.A. 22 1,137
Telekomunikacja Polska S.A. 81 583
--------
2,017
--------
Russia -- 0.9%
OAO LUKoil ADR 5 236
RAO Unified Energy Systems ADR 70 791
--------
1,027
--------
Singapore -- 1.2%
Total Access Communication Public Company Limited 356 1,431/A/
--------
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
South Africa -- 5.1%
ABSA Group Limited 290 $ 1,098
Anglo American plc 14 651
Impala Platinum Holdings Limited 17 639
Rembrandt Group Limited 161 1,550
Sappi Limited 112 842
Sasol Limited 193 1,295
--------
6,075
--------
South Korea -- 16.0%
Hyundai Electronics Industries Co., Ltd. 80 1,579/A/
Korea Electric Power Corporation 40 1,241
Korea Telecom Corporation 20 1,761
Korea Telecom Corporation ADR 16 755
Pohang Iron & Steel Company Ltd. 3 219
Samsung Electronics 25 8,341
Samsung Fire & Marine Insurance 1 37
Shinsegae Department Store Company 30 1,318
SK Telecom Co., Ltd. 8 2,455
Ssangyong Oil Refining Company Ltd. 50 1,202
--------
18,908
--------
Taiwan -- 9.1%
Asustek Computer Inc. 204 1,687
China Development Industrial Bank Inc. 500 667/A/
D-Link Corporation 403 943
Evergreen Marine Corporation 800 620/A/
Formosa Chemicals & Fibre Corporation 315 404
Hon Hai Precision Industry Co., Ltd 100 905/A/
Inventec Co., Ltd 240 492
Macronix International Co., Ltd. 226 566/A/
Siliconware Precision Industries Company ADR 50 463/A/
Systex Corporation GDR 17 179/A,B/
Taiwan Semiconductor Manufacturing Company 641 3,044/A/
United Microelectronics Corporation, Ltd. 180 501/A/
Yuanta Securities Corporation 288 345/A/
--------
10,816
--------
Thailand -- 1.2%
Bangkok Bank Public Company Limited 600 735/A/
Shin Corporations Public Company Limited 125 656/A/
--------
1,391
--------
</TABLE>
33
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
Emerging Markets Trust -- Continued
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Turkey -- 4.1%
Dogan Sirketler Grubu Holding A.S. 45,000 $ 1,088/A/
Netas Northern Electric Telekomunikasyon A.S. 15,120 1,682
Vestel Electronik Sanayi ve Ticaret A.S. 7,000 2,115/A/
--------
4,885
--------
United States -- 1.7%
Global TeleSystems Group, Inc. 38 456/A/
UTStarcom, Inc. 50 1,519/A/
--------
1,975
--------
Total Common Stock and Equity Interests (Identified Cost -- $86,286) 109,236
--------------------------------------------------------------------------------------------------------------------
Preferred Shares -- 5.7%
Brazil -- 5.6%
Companhia Cervejaria Brahma ADR 45 762
Companhia Paranaense de Energia-Copel ADR 53 490
Companhia Vale do Rio Doce 46 1,298
Companhia Vale do Rio Doce - Rights 11 N.M./A/
Empresa Brasileira de Aeronautica S.A. 145 829
Gerdau S.A. 99,210 1,210
IKPC - Industrias Klabin de Papel e Celulose S.A. 690 577
Itausa - Investimentos Itau S.A. 1,489 1,445
--------
6,611
--------
Thailand -- 0.1%
Siam Commercial Bank Public Company Limited - Warrants 860 101/A/
--------
Total Preferred Shares (Identified Cost -- $5,006) 6,712
--------------------------------------------------------------------------------------------------------------------
Repurchase Agreements -- 2.1%
Goldman, Sachs & Company
6.82%, dated 6/30/00, to be repurchased at $2,446 on 7/3/00
(Collateral: $2,477 Fannie Mae mortgage-backed securities,
8.50%, due 10/1/28, value $2,538) (Identified Cost -- $2,445) $2,445 2,445
--------------------------------------------------------------------------------------------------------------------
Total Investments -- 99.9% (Identified Cost -- $93,737) 118,393
Other Assets Less Liabilities -- 0.1% 137
--------
Net assets -- 100.0% $118,530
========
</TABLE>
34
<PAGE>
<TABLE>
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net assets consisting of:
Accumulated paid-in capital applicable to
8,841 shares outstanding $103,724
Accumulated net investment income/(loss) (1,452)
Accumulated net realized gain/(loss) on investments
and currency transactions (7,339)
Unrealized appreciation/(depreciation) of investments
and currency transactions 23,597
--------
Net assets -- 100.0% $118,530
========
Net asset value per share $13.41
======
--------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Non-income producing.
/B/ 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 0.8%
of net assets.
ADR - American Depository Receipt.
GDR - Global Depository Receipt.
N.M. - Not meaningful.
See notes to financial statements.
35
<PAGE>
Statement of Net Assets
Legg Mason Global Trust, Inc.
June 30, 2000 (Unaudited)
(Amounts in Thousands)
Europe Fund
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock and Equity Interests -- 94.0%
Finland -- 5.0%
Nokia Oyj 118 $ 6,027
--------
France -- 15.5%
Air Liquide SA 18 2,343
Alcatel 41 2,676
Axa 22 3,434
BNP Paribus SA 20 1,925
Dassault Systemes S.A. 24 2,229
STMicroelectronics 32 2,016
Total Fina SA 27 4,123
--------
18,746
--------
Germany -- 7.2%
Adidas-Salomon AG 44 2,425
Deutsche Bank AG 30 2,472
Epcos AG 15 1,499/A/
Infineon Technologies AG 29 2,323/A/
--------
8,719
--------
Greece -- 1.4%
Alpha Credit Bank 41 1,628
--------
Italy -- 5.4%
Bipop-Carire SpA 252 1,983
Seat Pagine Gialle SpA 511 1,764
Tecnost SpA 753 2,838/A/
--------
6,585
--------
Netherlands -- 7.1%
Heineken NV 36 2,173
Koninklijke (Royal) Philips Electronics N.V. 81 3,800
KPN NV 58 2,585
KPN NV - Rights 20 N.M.
--------
8,558
--------
Spain -- 4.1%
Banco Santander Central Hispano, SA 180 1,898
Telefonica S.A. 141 3,036/A/
--------
4,934
--------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
Shares/Par Value
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Sweden -- 7.3%
Skandia Forsakrings AB 116 $ 3,076
Telefonaktiebolaget LM Ericsson AB 292 5,780
--------
8,856
--------
Switzerland -- 7.4%
ABB Ltd. 16 1,880
Adecco SA 2 1,888
Credit Suisse Group 13 2,542
Serono SA 3 2,678
--------
8,988
--------
United Kingdom -- 33.6%
ARM Holdings plc 178 1,903/A/
Barclays PLC 85 2,105
BP Amoco Plc 683 6,555
Cable & Wireless plc 168 2,851
Glaxo Wellcome plc 195 5,697
Hays plc 472 2,629
Logica plc 109 2,584
Pearson plc 83 2,628
Reuters Group PLC 118 2,014
3i Group PLC 124 2,558
Vodafone AirTouch PLC 1,828 7,386
WPP Group plc 121 1,763
--------
40,673
--------
Total Common Stock and Equity Interests (Identified Cost -- $96,252) 113,714
--------------------------------------------------------------------------------------------------------------------
Preferred Shares -- 6.2%
Germany -- 6.2%
Marschollek, Lautenschlaeger und Partner AG 5 2,349
Porsche AG N.M. 1,350
SAP AG 20 3,735
--------
Total Preferred Shares (Identified Cost -- $5,035) 7,434
--------------------------------------------------------------------------------------------------------------------
Total Investments -- 100.2% (Identified Cost -- $101,287) 121,148
Other Assets Less Liabilities -- (0.2)% (200)
--------
Net assets -- 100.0% $120,948
========
</TABLE>
37
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
Europe Fund -- Continued
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
<S> <C>
Net assets consisting of:
Accumulated paid-in capital applicable to:
2,444 Primary Class shares outstanding $ 63,143
2,422 Class A shares outstanding 34,887
16 Navigator Class shares outstanding (586)
Accumulated net investment income/(loss) (774)
Accumulated net realized gain/(loss) on investments
and currency transactions 4,417
Accumulated appreciation/(depreciation) of investments
and currency transactions 19,861
--------
Net assets -- 100.0% $120,948
========
Net asset value per share:
Primary Class $24.39
======
Class A $25.15
======
Navigator Class $25.28
======
Maximum offering price per share:
Class A (net asset value plus sales charge of 4.75% of offering price) $26.40
======
--------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Non-income producing.
N.M. -- Not meaningful.
See notes to financial statements.
38
<PAGE>
Statements of Operations
Legg Mason Global Trust, Inc.
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended 6/30/00
-----------------------------------------------------------
Global International Emerging
Income Equity Markets Europe
Trust Trust Trust Fund
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Interest $ 3,224 $ 121 $ 76 $ 28
Dividends -- 2,687 879 906
Less foreign tax withheld (69) (425) (74) (87)
------- -------- -------- --------
Total income 3,155 2,383 881 847
------- -------- -------- --------
Expenses:
Management fee 288 1,003 616 647
Distribution and service fees 288 1,336 616 387
Transfer agent and shareholder servicing expense 27 130 51 41
Audit and legal fees 20 29 27 23
Custodian fee 87 282 234 150
Directors' fees 3 8 4 6
Organization expense -- -- 7 35
Registration fees 7 12 17 30
Reports to shareholders 7 31 17 22
Other expenses 2 5 1 26
------- -------- -------- --------
729 2,836 1,590 1,367
Less fees waived -- -- (51) --
------- -------- -------- --------
Total expenses, net of waivers 729 2,836 1,539 1,367
------- -------- -------- --------
Net Investment Income/(Loss) 2,426 (453) (658) (520)
------- -------- -------- --------
Net Realized and Unrealized Gain/(Loss) on Investments:
Realized gain/(loss) on:
Investments, options and futures (887) 10,174 9,859 4,613
Foreign currency transactions (3,555) 136 (87) (34)
------- -------- -------- --------
(4,442) 10,310 9,772 4,579
------- -------- -------- --------
Change in unrealized appreciation/
(depreciation) of:
Investments, options and futures (1,848) (31,902) (15,509) (12,747)
Assets and liabilities denominated in foreign
currencies (25) (312) 7 (1)
------- -------- -------- --------
(1,873) (32,214) (15,502) (12,748)
---------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/(Loss) on
Investments (6,315) (21,904) (5,730) (8,169)
---------------------------------------------------------------------------------------------------------------
Change in Net Assets Resulting From Operations $(3,889) $(22,357) $ (6,388) $ (8,689)
---------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
39
<PAGE>
Statements of Changes in Net Assets
Legg Mason Global Trust, Inc.
(Amounts in Thousands)
<TABLE>
<CAPTION>
Global International Emerging
Income Equity Markets Europe
Trust Trust Trust Fund
-------------------- -------------------- -------------------- --------------------
Six Months Year Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended Ended Ended
6/30/00 12/31/99 6/30/00 12/31/99 6/30/00 12/31/99 6/30/00 12/31/99
--------------------------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Change in Net Assets:
Net investment income/(loss) $ 2,426 $ 4,717 $ (453) $ (157) $ (658) $ (716) $ (520) $ (754)
Net realized gain/(loss) on
investments, options, futures
and foreign currency
transactions (4,442) (7,997) 10,310 39,714 9,772 5,241 4,579 17,778
Change in unrealized
appreciation/(depreciation) of
investments, options, futures
and assets and liabilities
denominated in foreign
currencies (1,873) (1,184) (32,214) 10,752 (15,502) 46,417 (12,748) 10,206
--------------------------------------------------------------------------------------------------------------------------------
Change in net assets resulting
from operations (3,889) (4,464) (22,357) 50,309 (6,388) 50,942 (8,689) 27,230
Distributions to shareholders:
From net investment income:
Primary Class (2,259) (657) -- (992) -- -- -- (132)
Class A N/A N/A N/A N/A N/A N/A -- (166)
Navigator Class N/A N/A -- (1) N/A N/A -- (1)
In excess of net investment
income:
Primary Class -- (4,035) -- -- -- -- -- --
From net realized gain on
investments:
Primary Class -- (881) (3,645) (16,590) -- -- (3,471) (3,892)
Class A N/A N/A N/A N/A N/A N/A (3,533) (5,428)
Navigator Class N/A N/A (1) (3) N/A N/A (23) (27)
Change in net assets from Fund
share transactions:
Primary Class (9,798) (24,134) (15,298) 3,997 4,160 27,475 11,200 17,600
Class A N/A N/A N/A N/A N/A N/A (10,306) 10,439
Navigator Class N/A N/A (1) -- N/A N/A 82 87
--------------------------------------------------------------------------------------------------------------------------------
Change in net assets (15,946) (34,171) (41,302) 36,720 (2,228) 78,417 (14,740) 45,710
Net Assets:
Beginning of period 86,634 120,805 295,286 258,566 120,758 42,341 135,688 89,978
--------------------------------------------------------------------------------------------------------------------------------
End of period $ 70,688 $ 86,634 $253,984 $295,286 $118,530 $120,758 $120,948 $135,688
--------------------------------------------------------------------------------------------------------------------------------
Under/(over) distributed
net investment income $ (1,347) $ (1,514) $ (1,482) $ (1,029) $ (1,452) $ (794) $ (774) $ (257)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
40
<PAGE>
Financial Highlights
Legg Mason Global Trust, Inc.
Contained below is per share operating performance data for a Primary Class
share and, with respect to Europe Fund, for a Class A share of common stock
outstanding, total investment return, ratios to average net assets and other
supplemental data. This information has been derived from information
provided in the financial statements.
<TABLE>
<CAPTION>
Investment Operations Distributions
------------------------------------- -----------------------------------------------------------
Net Realized and
Unrealized Gain/
(Loss) on Invest- From In Excess
Net Asset Net ments, Options, Total From In Excess Net of Net
Value, Investment Futures and From Net of Net Realized Realized
Beginning Income/ Foreign Currency Investment Investment Investment Gain on Gain on Total
of Period (Loss) Transactions Operations Income Income Investments Investments Distributions
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Global Income Trust
--Primary Class
Six Months Ended
June 30, 2000* $ 9.28 $.26 $ (.68) $ (.42) $ (.26) $ -- $ -- $ -- $ (.26)
Years Ended Dec. 31,
1999 10.14 .40 (.74) (.34) (.01) (.43) (.08) -- (.52)
1998 9.60 .37 .70 1.07 (.47) -- (.06) -- (.53)
1997 10.41 .54 (.71) (.17) (.48) (.05) (.11) -- (.64)
1996 10.33 .59 .21 .80 (.62) -- (.10) -- (.72)
1995 9.54 .63 1.32 1.95 (1.16) -- -- -- (1.16)
International Equity Trust
--Primary Class
Six Months Ended
June 30, 2000* $14.23 $(.03) $(1.06) $(1.09) $ -- $ -- $(.19) $ -- $ (.19)
Years Ended Dec. 31,
1999 12.64 -- 2.51 2.51 (.05) -- (.87) -- (.92)
1998 11.78 .01 .99 1.00 (.14) -- -- -- (.14)
1997 12.09 .02 .19 .21 (.08) -- (.44) -- (.52)
1996 10.70 .02/D/ 1.74 1.76 (.05) -- (.32) -- (.37)
1995/E/ 10.00 .04/D/ .77 .81 (.04) -- -- (.07) (.11)
Emerging Markets Trust
--Primary Class
Six Months Ended
June 30, 2000* $14.00 $(.07)/F/ $ (.52) $ (.59) $ -- $ -- $ -- $ -- $ --
Years Ended Dec. 31,
1999 6.96 (.08)/F/ 7.12 7.04 -- -- -- -- --
1998 9.85 .01/F/ (2.90) (2.89) -- -- -- -- --
1997 10.51 (.02)/F/ (.63) (.65) (.01) -- -- -- (.01)
1996/G/ 10.00 (.03)/F/ .57 .54 (.03) -- -- -- (.03)
--------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------------------
Net
Net Asset Investment Net Assets,
Value, Expenses Income/(Loss) Portfolio End of
End of Total to Average to Average Turnover Period
Period Return/A/ Net Assets Net Assets Rate (in thousands)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Income Trust
--Primary Class
Six Months Ended
June 30, 2000* $ 8.60 (4.54)%/B/ 1.90%/C/ 6.48%/C/ 213%/C/ $ 70,688
Years Ended Dec. 31,
1999 9.28 (3.23)% 1.90% 4.58% 354% 86,634
1998 10.14 11.50% 1.87% 4.51% 288% 120,805
1997 9.60 (1.69)% 1.86% 5.39% 241% 136,732
1996 10.41 8.22% 1.86% 5.80% 172% 161,549
1995 10.33 20.80% 1.81% 5.72% 169% 153,954
International Equity Trust
--Primary Class
Six Months Ended
June 30, 2000* $12.95 (7.69)%/B/ 2.12%/C/ (.34)%/C/ 157%/C/ $253,939
Years Ended Dec. 31,
1999 14.23 20.58% 2.13% (.06)% 148% 295,236
1998 12.64 8.49% 2.14% .06% 72% 258,521
1997 11.78 1.76% 2.17% .17% 59% 227,655
1996 12.09 16.49% 2.25%/D/ .21%/D/ 83% 167,926
1995/E/ 10.70 8.11%/B/ 2.25%/C,D/ .52%/C,D/ 58%/C/ 65,947
Emerging Markets Trust
--Primary Class
Six Months Ended
June 30, 2000* $13.41 (4.21)%/B/ 2.50%/C,F/ (1.07)%/C,F/ 119%/C/ $118,530
Years Ended Dec. 31,
1999 14.00 101.15% 2.50%/F/ (1.06)%/F/ 123% 120,758
1998 6.96 (29.34)% 2.50%/F/ .09%/F/ 76% 42,341
1997 9.85 (6.18)% 2.50%/F/ (.76)%/F/ 63% 65,302
1996/G/ 10.51 5.40%/B/ 2.50%/C,F/ (.68)%/C,F/ 46%/C/ 21,206
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
41
<PAGE>
Financial Highlights -- Continued
Legg Mason Global Trust, Inc.
<TABLE>
<CAPTION>
Investment Operations Distributions
------------------------------------- -----------------------------------------------------------
Net Realized and
Unrealized Gain/
(Loss) on Invest- From In Excess
Net Asset Net ments, Options, Total From In Excess Net of Net
Value, Investment Futures and From Net of Net Realized Realized
Beginning Income/ Foreign Currency Investment Investment Investment Gain on Gain on Total
of Period (Loss) Transactions Operations Income Income Investments Investments Distributions
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Europe Fund/H/
--Primary Class
Six Months Ended
June 30, 2000* $27.90 $(.14) $(1.90) $(2.04) $ -- $ -- $(1.47) $ -- $(1.47)
Years Ended Dec. 31,
1999 24.39 (.29)/I/ 5.97 5.68 (.07) -- (2.10) -- (2.17)
1998 20.86 .11/J/ 8.09 8.20 (.36) -- (4.31) -- (4.67)
1997/K/ 26.56 (.10)/J/ .23 .13 -- -- (5.83) -- (5.83)
--Class A
Six Months Ended
June 30, 2000* $28.61 $(.07) $(1.92) $(1.99) $ -- $ -- $(1.47) $ -- $(1.47)
Years Ended Dec. 31,
1999 24.77 (.09)/I/ 6.10 6.01 (.07) -- (2.10) -- (2.17)
1998 20.97 .02/L/ 8.52 8.54 (.43) -- (4.31) -- (4.74)
1997 24.24 (.05)/L/ 4.11 4.06 -- -- (7.33) -- (7.33)
1996 21.13 .02 6.34 6.36 -- -- (3.25) -- (3.25)
1995 17.68 .01 3.50 3.51 (.06) -- -- -- (.06)
--------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------------------------
Net
Net Asset Investment Net Assets,
Value, Expenses Income/(Loss) Portfolio End of
End of Total to Average to Average Turnover Period
Period Return/A/ Net Assets Net Assets Rate (in thousands)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Europe Fund/H/
--Primary Class
Six Months Ended
June 30, 2000* $24.39 (7.56)%/B/ 2.53%/C/ (1.18)%/C/ 165%/C/ $59,614
Years Ended Dec. 31,
1999 27.90 24.44% 2.58% (1.15)% 93% 56,871
1998 24.39 40.48% 2.51%/J/ (1.15)%/J/ 103% 32,325
1997/K/ 20.86 .68%/B/ 2.50%/J,C/ (1.79)%/J,C/ 123%/C/ 302
--Class A
Six Months Ended
June 30, 2000* $25.15 (7.20)%/B/ 1.75%/C/ (.48)%/C/ 165%/C/ $60,922
Years Ended Dec. 31,
1999 28.61 25.41% 1.79% (.38)% 93% 78,429
1998 24.77 41.85% 1.81%/L/ (.10)%/L/ 103% 57,406
1997 20.97 17.52% 1.90%/L/ (.12)%/L/ 123% 52,253
1996 24.24 31.53% 2.00% .10% 109% 70,991
1995 21.13 19.90% 2.10% .10% 148% 62,249
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ Excluding sales charge for Europe Fund's Class A shares.
/B/ Not annualized.
/C/ Annualized.
/D/ Net of fees waived by LMFA pursuant to a voluntary expense limitation of
2.25% until April 30, 2001. If no fees had been waived by LMFA, 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%.
/E/ For the period February 17, 1995 (commencement of operations) to December
31, 1995.
/F/ Net of fees waived by LMFA pursuant to a voluntary expense limitation of
2.50% until April 30, 2001. If no fees had been waived by LMFA, the
annualized ratio of expenses to average daily net assets for each period
would have been as follows: for the six months ended June 30, 2000,
2.58%; 1999, 2.75%; 1998, 2.78%; 1997, 2.86%; and 1996, 3.71%.
/G/ For the period May 28, 1996 (commencement of operations) to December 31,
1996.
/H/ The financial information for Europe Fund Class A shares for the years
ended December 31, 1995 and 1996, is for the Worldwide Value Fund,
Bartlett Europe Fund's and Legg Mason Europe Fund's predecessor. The
financial information for the year ended December 31, 1997, is for
Bartlett Europe Fund and Worldwide Value Fund. The financial information
for the year ended December 31, 1998, is for the Bartlett Europe Fund.
The financial information for the year ended December 31, 1999, is for
the Legg Mason Europe Fund and the Bartlett Europe Fund.
/I/ Computed using average monthly shares outstanding.
/J/ Net of fees waived pursuant to a voluntary expense limitation of 2.50%
until April 30, 1998; and 2.60% until April 30, 2001. 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, 2.59%; 1997, 2.68%.
/K/ For the period July 23, 1997 (commencement of operations) to December 31,
1997.
/L/ The expense ratio shown reflects both the operations of Worldwide Value
Fund,Bartlett Europe Fund's predecessor, prior to its merger with
Bartlett Europe Fund on July 21, 1997, and Bartlett Europe Fund's
operations throughDecember 31, 1997. For the period July 21 to December
31, 1997, the Fund's annualized expense ratio was 1.71%, net of fees
waived pursuant to a voluntary expense limitation of 1.75% until April
30, 1998; and 1.85% until April 30, 2001. 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, 1.89%; 1997, 2.08%.
* Unaudited
See notes to financial statements.
42
<PAGE>
Notes to Financial Statements
Legg Mason Global Trust, Inc.
(Amounts in Thousands) (Unaudited)
-----------------------------------------------------------------------------
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 also offers Class
A shares. Information about Navigator Class is contained in a separate
report to its shareholders. The income and expenses of International Equity
are allocated proportionately to the two classes of shares based on daily net
assets, except for Rule 12b-1 distribution fees, which are charged only on
Primary Class shares, and transfer agent and shareholder servicing expenses,
which are determined separately for each class. The income and expenses of
Europe Fund are allocated proportionately among the three classes of shares
based on average daily net assets, except for Rule 12b-1 fees, which are
charged only on Primary 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. ("Worldwide"). Prior to July 21, 1997, Worldwide 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.
Most securities held by Global Income are valued on the basis of
valuations furnished by an independent 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. Fixed income securities with 60 days
or less remaining to maturity are valued using the amortized cost method,
which approximates current market value.
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 dates 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.
43
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
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 monthly for
Global Income, and annually for International Equity, Emerging Markets and
Europe Fund. Net capital gain distributions, which are calculated at the
composite level, are declared and paid after the end of the tax year in which
the gain is realized. At June 30, 2000, there were no dividends or capital
gain distributions payable for any 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 June 30,
2000, receivables for securities sold and payables for securities purchased
for each Fund were as follows:
Receivable for Payable for
Securities Sold Securities Purchased
----------------------------------------------------------------------
Global Income $ 2,079 $ 2,856
International Equity 12,537 12,073
Emerging Markets -- 382
Europe Fund -- 686
Deferred Organizational Expense
Deferred organizational expenses of $73 for Emerging Markets 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 Fund's 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 which 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 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. As of
June 30, 2000, there was a deferred tax liability of $1,060 accrued on
unrealized net capital gains in Emerging Markets.
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.
44
<PAGE>
-----------------------------------------------------------------------------
2. Investment Transactions:
For the six months ended June 30, 2000, 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>
Global Income $43,020 $ 37,433 $46,481 $ 48,988
International Equity -- 204,830 -- 218,810
Emerging Markets -- 64,790 -- 60,923
Europe Fund -- 104,412 -- 107,213
</TABLE>
At June 30, 2000, 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>
Global Income $ 71,533 $ 908 $ (2,685) $(1,777)
International Equity 236,415 29,205 (12,596) 16,609
Emerging Markets 93,737 30,530 (5,874) 24,656
Europe Fund 101,287 24,589 (4,728) 19,861
</TABLE>
Unused capital loss carryforwards for federal income tax purposes at June
30, 2000, were as follows: Emerging Markets Trust, $17,084 which expires in
December 2006, and Global Income, $4,319 which expires in December 2007.
International Equity and Europe Fund have 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, Global Income and Europe Fund may
utilize options and futures. International Equity and Emerging Markets may
also utilize options and futures to a limited extent. Options may be written
(sold) or purchased by these 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.
45
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
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>
<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
closing sale transaction 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 the
closing purchase transaction underlying security and eliminate the option liability. The Fund will realize a
loss in this transaction if the cost of the closing purchase exceeds the premium
received when the option was written.
-------------------------------------------------------------------------------------------------------------------------------
A written call option is exercised Realize a gain or loss from the sale of the underlying security. The proceeds of that
by the option purchaser 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 of the security
by the option purchaser that the Fund purchased when the option was exercised.
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Activity in call and put options during the six months ended June 30,
2000, was as follows:
<TABLE>
<CAPTION>
Calls Puts
--------------------- ---------------------
Actual Actual
Global Income Contracts Premiums Contracts Premiums
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Options Outstanding December 31, 1999 65 $ 54 27 $ 19
Options Written 146 79 119 71
Options Closed (159) (104) (92) (61)
Options Expired (28) (14) (39) (19)
Options Exercised (8) (8) (2) --
---------------------------------------------------------------------------------------------
Options Outstanding June 30, 2000 16 $ 7 13 $ 10
=============================================================================================
</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.
46
<PAGE>
-----------------------------------------------------------------------------
Upon entering into a futures contract, the Fund is required to deposit
with the broker cash or cash equivalents in an amount 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.
There were open futures contracts at June 30, 2000, only for Global
Income.
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 and, with respect to Global Income, by
governments of 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 a 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 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.
47
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
At June 30, 2000, open forward currency exchange contracts were as
follows:
Global Income:
Contract to
Settlement ----------------------------------------- Unrealized
Date Receive Deliver Gain/(Loss)
---------------------------------------------------------------------------
07/05/00 EUR 298 USD 285 $ (1)
07/21/00 EUR 1,400 USD 1,344 (9)
07/21/00 GBP 752 USD 1,137 1
07/21/00 USD 6,826 GBP 4,551 (63)
07/21/00 JPY 2,720,010 USD 25,220 521
07/21/00 USD 9,051 JPY 969,962 (130)
08/14/00 EUR 1,262 USD 1,215 (7)
08/14/00 USD 1,220 EUR 1,303 (28)
08/14/00 NOK 9,484 USD 1,089 16
08/14/00 USD 1,054 NOK 9,484 (51)
08/14/00 PLN 5,424 USD 1,220 9
08/14/00 USD 3,534 PLN 16,409 (180)
08/14/00 USD 230 ZAR 1,639 (10)
09/18/00 CHF 8,212 USD 6,164 27
09/18/00 USD 1,820 CHF 2,960 (8)
09/18/00 EUR 21,710 USD 20,846 (18)
09/18/00 USD 11,605 EUR 12,106 (8)
09/18/00 USD 694 NZD 1,472 4
10/18/00 EUR 2,300 USD 2,217 (7)
10/18/00 USD 2,217 DKK 17,305 (5)
-----
$ 53
=====
International Equity:
Contract to
Settlement ----------------------------------------- Unrealized
Date Receive Deliver Gain/(Loss)
---------------------------------------------------------------------------
07/27/00 EUR 5,786 USD 5,475 $ 59
07/27/00 USD 5,268 EUR 5,786 (266)
08/09/00 JPY 284,219 USD 2,677 (52)
08/09/00 USD 2,646 JPY 284,219 21
-----
$(238)
=====
48
<PAGE>
-----------------------------------------------------------------------------
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>
Six Months Ended
June 30, 2000 At June 30, 2000
---------------- ----------------
Management Management
Management Expense Expense Limitation Fees Fees
Fund Fee Limitation Expiration Date Waived Payable
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Global Income
--Primary Class 0.75% 1.90% April 30, 2001 $-- $ 44
International Equity
--Primary Class 0.75% 2.25% April 30, 2001 -- 158
--Navigator Class 0.75% 1.25% April 30, 2001 -- N.M.
Emerging Markets
--Primary Class 1.00% 2.50% April 30, 2001 51 87
Europe Fund
--Primary Class 1.00% 2.60% April 30, 2001 -- 51
--Class A 1.00% 1.85% April 30, 2001 -- 52
--Navigator Class 1.00% 1.60% April 30, 2001 -- N.M.
</TABLE>
----------
N.M. -- Not meaningful.
49
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
Western Asset Management Company ("WAM") serves as investment adviser to
Global Income. WAM is responsible for the actual investment activity of the
Fund, for which LMFA pays a fee at an annual rate equal to 53 1/3% of the fee
received by LMFA from Global Income.
Western Asset Management Company Limited ("WAML") serves as investment
sub-adviser to Global Income. WAM (not the Fund) pays WAMLa fee at an annual
rate equal to 26 2/3% of the fee received by WAM from LMFA. LMFA pays WAML a
sub-administration fee at an annual rate equal to 13 1/3% of the fee received
by LMFA from Global Income.
Batterymarch Financial Management, Inc. ("Batterymarch") serves as
investment adviser to International Equity and Emerging Markets. Batterymarch
is responsible for the actual investment activity of these Funds. 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 and 75% of the fee received
from Emerging Markets.
Lombard Odier International Portfolio Management Limited ("Lombard Odier")
serves as investment sub-adviser to Europe Fund. LMFA pays 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 (see Note 8), 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 LMFA received
from Worldwide 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
Administration Agreement ("Agreement"). Under the Agreement, the Adviser
received for its services an advisory fee, computed daily and payable
monthly, at 1.00% of the Bartlett Europe Fund's average daily net assets.
Legg Mason Wood Walker, Incorporated ("Legg Mason"), a member of the New
York Stock Exchange, serves as distributor of the Funds. Legg Mason receives
an annual distribution fee and an annual service fee based on each Fund's
Primary Class's average daily net assets, calculated daily and payable
monthly as follows:
At June 30, 2000
------------------------
Distribution Service Distribution and Service
Fee Fee Fees Payable
-----------------------------------------------------------------------------
Global Income
Primary Class 0.50% 0.25% $ 44
International Equity
Primary Class 0.75 0.25 211
Emerging Markets
Primary Class 0.75 0.25 95
Europe Fund
Primary Class 0.75 0.25 51
Class A -- 0.25 13
50
<PAGE>
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Legg Mason also has an agreement with the Funds' transfer agent to assist
with some of its duties. For this assistance, the transfer agent paid Legg
Mason the following amounts for the six months ended June 30, 2000: Global
Income, $13; International Equity, $31; Emerging Markets, $17; and Europe
Fund, $11.
LMFA, Batterymarch, WAM, WAML and Legg Mason are corporate affiliates and
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 Credit Agreement bear
interest at prevailing short-term interest rates. For the six months ended
June 30, 2000, the Funds had no borrowings under the Credit Agreement.
8. Acquisition of Bartlett Europe Fund and Reorganization of Worldwide Value
Fund, Inc.:
On October 5, 1999,Europe Fund, a series of Legg Mason Global Trust, 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
by Bartlett Europe Fund shareholders on September 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 by Worldwide'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 was a closed-end
mutual fund whose shares traded on the NYSE.
51
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
9. Fund Share Transactions:
At June 30, 2000, 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>
Global Income
--Primary Class
Six Months Ended June 30, 2000 358 $ 3,178 229 $ 2,008 (1,695) $(14,984) (1,108) $ (9,798)
Year Ended Dec. 31, 1999 1,244 11,828 545 5,064 (4,370) (41,026) (2,581) (24,134)
International Equity
--Primary Class
Six Months Ended June 30, 2000 1,658 $22,306 272 $ 3,553 (3,067) $(41,157) (1,137) $(15,298)
Year Ended Dec. 31, 1999 4,502 58,763 1,330 17,182 (5,540) (71,948) 292 3,997
--Navigator Class
Six Months Ended June 30, 2000 -- $ -- -- $ -- (1) $ (1) (1) $ (1)
Year Ended Dec. 31, 1999 -- -- -- -- -- -- -- --
Emerging Markets
--Primary Class
Six Months Ended June 30, 2000 2,509 $35,893 -- $ -- (2,292) $(31,733) 217 $ 4,160
Year Ended Dec. 31, 1999 4,066 41,341 -- -- (1,528) (13,866) 2,538 27,475
Europe Fund
--Primary Class
Six Months Ended June 30, 2000 607 $16,726 131 $ 3,383 (332) $ (8,909) 406 $ 11,200
Year Ended Dec. 31, 1999 1,158 28,649 157 3,876 (602) (14,925) 713 17,600
--Class A
Six Months Ended June 30, 2000 1,863 $51,270 113 $ 3,007 (2,295) $(64,583) (319) $(10,306)
Year Ended Dec. 31, 1999 1,804 45,451 186 4,735 (1,567) (39,747) 423 10,439
--Navigator Class
Six Months Ended June 30, 2000 1 $ 61 1 $ 23 N.M. $ (2) 2 $ 82
Year Ended Dec. 31, 1999 3 64 1 28 N.M. (5) 4 87
</TABLE>
52
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<PAGE>
Legg Mason offers a wide range of mutual funds to meet investors' varying
financial needs and investment goals. The funds are listed below:
Equity Funds: Specialty Funds:
Value Trust, Inc. Market Neutral Trust
Special Investment Trust, Inc. Balanced Trust
Total Return Trust, Inc. Financial Services Fund
American Leading Companies Opportunity Trust
Trust
Classic Valuation Fund
Focus Trust, Inc.
U.S. Small-Capitalization
Value Trust
Global Funds: Taxable Bond Funds:
Global Income Trust U.S. Government Intermediate-Term
Europe Fund Portfolio
International Equity Trust Investment Grade Income Portfolio
Emerging Markets Trust High Yield Portfolio
Tax-Free Bond Funds: Money Market Funds:
Tax-Free Intermediate-Term U.S. Government Money Market
Income Trust Portfolio
Maryland Tax-Free Income Trust Cash Reserve Trust
Pennsylvania Tax-Free Income Trust Tax Exempt Trust, Inc.
For information on the specific risks, charges, and expenses associated with any
Legg Mason fund, please consult a Legg Mason Financial Advisor for a prospectus.
Read it carefully before investing or sending money.
[LEGG MASON FUNDS LOGO]
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