<PAGE>
Semi-Annual Report
June 30, 2000
Legg Mason
Global
Trust, Inc.
International Equity Trust
Europe Fund
Navigator Class
[LEGG MASON FUNDS Logo]
The Art of Investing(SM)
<PAGE>
To Our Shareholders,
We are pleased to provide you with Legg Mason Global Trust's semi-annual
report for the Navigator Class of the International Equity Trust and Europe Fund
("Funds") for the six months ended June 30, 2000.
Beginning on the next page, the portfolio managers responsible for the Funds'
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. We remind you that, as always, 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.
Sincerely,
/s/ Edward A. Taber, III
-------------------------
Edward A. Taber, III
President
August 9, 2000
<PAGE>
Portfolio Managers' Comments
International Equity Trust
Performance
For the year to date, the International Equity Trust return was -7.3% 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.
2
<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
3
<PAGE>
Portfolio Managers' Comments
Europe Fund
Market Overview
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.
4
<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
5
<PAGE>
Performance Information
Legg Mason Global Trust, Inc.
Total Returns for One Year 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 Primary
Class and Class A, offered to retail investors, is contained in a separate
report to its shareholders.
The Funds' total returns as of June 30, 2000, were as follows:
<TABLE>
<CAPTION>
International
Equity Trust Europe Fund
---------------------------------------------------------------
<S> <C> <C>
Average Annual Total Return
Navigator Class:
One Year +10.91% +18.46%
Life of Class* +1.03 +21.34
Cumulative Total Return
Navigator Class:
One Year +10.91% +18.46%
Life of Class* +2.23 +73.99
---------------------------------------------------------------
</TABLE>
* Navigator Class inception dates are:
International Equity Trust -- May 5, 1998
Europe Fund -- August 21, 1997
6
<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>
7
<PAGE>
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>
8
<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>
9
<PAGE>
<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>
10
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
International Equity Trust -- Continued
<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>
11
<PAGE>
<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>
12
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
International Equity Trust -- Continued
<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>
13
<PAGE>
<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>
14
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
International Equity Trust -- Continued
<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.
15
<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>
16
<PAGE>
Statement of Net Assets -- Continued
Legg Mason Global Trust, Inc.
Europe Fund-- Continued
<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>
17
<PAGE>
<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.
18
<PAGE>
Statements of Operations
Legg Mason Global Trust, Inc.
(Amounts in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended 6/30/00
------------------------------------
International
Equity Europe
Trust Fund
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Interest $ 121 $ 28
Dividends 2,687 906
Less foreign tax withheld (425) (87)
-------- --------
Total income 2,383 847
-------- --------
Expenses:
Management fee 1,003 647
Distribution and service fees 1,336 387
Transfer agent and shareholder servicing expense 130 41
Audit and legal fees 29 23
Custodian fee 282 150
Directors' fees 8 6
Organization expense -- 35
Registration fees 12 30
Reports to shareholders 31 22
Other expenses 5 26
-------- --------
Total expenses 2,836 1,367
-------- --------
Net Investment Income/(Loss) (453) (520)
-------- --------
Net Realized and Unrealized Gain/(Loss) on Investments:
Realized gain/(loss) on:
Investments and futures sold 10,174 4,613
Foreign currency transactions 136 (34)
-------- --------
10,310 4,579
-------- --------
Change in unrealized appreciation/(depreciation) of:
Investments and futures (31,902) (12,747)
Assets and liabilities denominated in foreign
currencies (312) (1)
-------- --------
(32,214) (12,748)
------------------------------------------------------------------------------------------------------------------------
Net Realized and Unrealized Gain/(Loss) on Investments (21,904) (8,169)
------------------------------------------------------------------------------------------------------------------------
Change in Net Assets Resulting From Operations $(22,357) $ (8,689)
------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
19
<PAGE>
Statements of Changes in Net Assets
Legg Mason Global Trust, Inc.
(Amounts in Thousands)
<TABLE>
<CAPTION>
International
Equity Europe
Trust Fund
------------------------- ---------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
6/30/00 12/31/99 6/30/00 12/31/99
-------------------------------------------------------------------------------------------------------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Change in Net Assets:
Net investment income/(loss) $ (453) $ (157) $ (520) $ (754)
Net realized gain/(loss) on investments, options, futures
and foreign currency transactions 10,310 39,714 4,579 17,778
Change in unrealized appreciation/(depreciation) of
investments, options, futures and assets and liabilities
denominated in foreign currencies (32,214) 10,752 (12,748) 10,206
-------------------------------------------------------------------------------------------------------------------------------
Change in net assets resulting from operations (22,357) 50,309 (8,689) 27,230
Distributions to shareholders:
From net investment income:
Primary Class -- (992) -- (132)
Class A N/A N/A -- (166)
Navigator Class -- (1) -- (1)
From net realized gain on investments:
Primary Class (3,645) (16,590) (3,471) (3,892)
Class A N/A N/A (3,533) (5,428)
Navigator Class (1) (3) (23) (27)
Change in net assets from Fund share transactions:
Primary Class (15,298) 3,997 11,200 17,600
Class A N/A N/A (10,306) 10,439
Navigator Class (1) -- 82 87
-------------------------------------------------------------------------------------------------------------------------------
Change in net assets (41,302) 36,720 (14,740) 45,710
Net Assets:
Beginning of period 295,286 258,566 135,688 89,978
-------------------------------------------------------------------------------------------------------------------------------
End of period $253,984 $295,286 $120,948 $135,688
-------------------------------------------------------------------------------------------------------------------------------
Under/(over) distributed net investment income $ (1,482) $ (1,029) $ (774) $ (257)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
20
<PAGE>
Financial Highlights
Legg Mason Global Trust, Inc.
Contained below is per share operating performance data for a Navigator
Class share of common stock outstanding, total investment return, ratios to
average net assets and other supplemental data. This information has been
derived from information provided in the financial statements.
<TABLE>
<CAPTION>
Investment Operations Distributions:
----------------------------------------- ------------------------------------------
Net Realized and
Unrealized Gain/
(Loss) on Invest- From
Net Asset Net ments, Options, Total From Net
Value, Investment Futures and From Net Realized
Beginning Income/ Foreign Currency Investment Investment Gain on Total
of Period (Loss) Transactions Operations Income Investments Distributions
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
International Equity Trust
Six Months Ended
June 30, 2000* $14.26 $ .04 $(1.07) $(1.03) $ -- $ (.19) $ (.19)
Year Ended Dec. 31,
1999 12.64 .11 2.52 2.63 (.14) (.87) (1.01)
Period Ended Dec. 31,
1998/A/ 14.21 .10 (1.44) (1.34) (.23) -- (.23)
Europe Fund/B/
Six Months Ended
June 30, 2000* $28.73 $(.02) $(1.96) $(1.98) $ -- $(1.47) $(1.47)
Years Ended Dec. 31,
1999 24.78 (.03) 6.15 6.12 (.07) (2.10) (2.17)
1998 21.01 .22/C/ 8.37 8.59 (.51) (4.31) (4.82)
Period Ended Dec. 31,
1997/D/ 25.61 (.04)/C/ 1.27 1.23 -- (5.83) (5.83)
-------------------------------------------------------------------------------------------------------------------------------
<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 Net Assets Net Assets Rate (in thousands)
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
International Equity Trust
Six Months Ended
June 30, 2000* $13.04 (7.26)%/E/ 1.15%/F/ .65%/F/ 157%/F/ $ 45
Year Ended Dec. 31,
1999 14.26 21.69% 1.25% .82% 148% 50
Period Ended Dec. 31,
1998/A/ 12.64 (9.42)%/E/ 1.04%/F/ 1.17%/F/ 72%/F/ 45
Europe Fund/B/
Six Months Ended
June 30, 2000* $25.28 (7.13)%/E/ 1.49%/F/ (.13)%/F/ 165%/F/ $ 412
Years Ended Dec. 31,
1999 28.73 25.49% 1.52% (.10)% 93% 389
1998 24.78 42.5% 1.55%/C/ 1.31%/C/ 103% 247
Period Ended Dec. 31,
1997/D/ 21.01 4.9%/E/ 1.31%/C,F/ (.60)%/C,F/ 123% 8,025
------------------------------------------------------------------------------------------------------------------------
</TABLE>
/A/ For the period May 5, 1998 (commencement of sale of Navigator shares)
to December 31, 1998.
/B/ The financial information for Europe Fund Navigator Class for the years
ended December 31, 1997 and 1998, is for Bartlett Europe Fund Class Y.
The financial information for the year ended December 31, 1999, is for
the Legg Mason Europe Fund and the Bartlett Europe Fund Class Y.
/C/ Net of fees waived pursuant to a voluntary expense limitation of 1.50%
until April 30, 1998; and 1.60% 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, 1.63%; 1997, 1.49%.
/D/ For the period August 21, 1997 (commencement of operations of this
class) to December 31, 1997.
/E/ Not annualized.
/F/ Annualized.
* Unaudited.
See notes to financial statements.
21
<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 Primary Class and Class A, offered to retail
investors, is contained in a separate report to the shareholders of these
classes. The income and expenses of International Equity 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.
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.
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
22
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
annually for International Equity 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
either of the Funds. Distributions are determined in accordance with federal
income tax regulations, which may differ from those determined in accordance
with generally accepted accounting principles; accordingly, periodic
reclassifications are made within a Fund's capital accounts to reflect income
and gains available for distribution under federal income tax regulations.
Security Transactions
Security transactions are recorded on the trade date. Realized gains and
losses from security transactions are reported on an identified cost basis
for both financial reporting and federal income tax purposes. At 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
-------------------------------------------------------------------
International Equity $12,537 $12,073
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.
Use of Estimates
Preparation of the financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
2. Investment Transactions:
For the six months ended June 30, 2000, investment transactions (excluding
short-term investments) were as follows:
Purchases Proceeds From Sales
-------------------------------------------------------------
International Equity $204,830 $218,810
Europe Fund 104,412 107,213
23
<PAGE>
-----------------------------------------------------------------------------
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>
International Equity $236,415 $29,205 $(12,596) $16,609
Europe Fund 101,287 24,589 (4,728) 19,861
</TABLE>
The Funds 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 its investment program, Europe Fund may utilize options and
futures. International Equity 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.
When options, whether written or purchased, expire, are exercised or are
closed (by entering into a closing purchase or sale transaction), the Fund
realizes a gain or loss as described in the chart below:
<TABLE>
<CAPTION>
<S> <C>
Purchased option: Impact on the Fund:
The option expires Realize a loss in the amount of the cost of the option.
------------------------------------------------------------------------------------------------------------------------------
The option is closed through a Realize a gain or loss depending on whether the proceeds from the closing sale
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>
24
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
The risk associated with purchasing options is limited to the premium
originally paid. Options written by a Fund involve, to varying degrees, risk
of loss in excess of the option value reflected in the statement of net
assets. The risk in writing a covered call option is that a Fund may forego
the opportunity of profit if the market price of the underlying security
increases and the option is exercised. The risk in writing a put option is
that a Fund may incur a loss if the market price of the underlying security
decreases and the option is exercised. In addition, there is the risk a Fund
may not be able to enter into a closing transaction because of an illiquid
secondary market or, for over-the-counter options, because of the
counterparty's inability to perform.
There was no activity in call or put options during the six months ended
June 30, 2000.
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.
5. Financial Instruments:
Emerging Market Securities
Each Fund has investments in securities denominated in the currencies of
emerging market countries, as well as in securities issued by companies
located in emerging market countries. Future economic or political
developments could adversely affect the liquidity or value, or both, of such
securities.
Forward Currency Exchange Contracts
As part of their investment programs, 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.
25
<PAGE>
-----------------------------------------------------------------------------
At June 30, 2000, open forward currency exchange contracts were as
follows:
<TABLE>
<CAPTION>
International Equity:
Contract to
Settlement ----------------------------------------------- Unrealized
Date Receive Deliver Gain/(Loss)
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
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)
=====
</TABLE>
Euro Conversion
On January 1, 1999, the euro became the official currency of the countries
in the European Economic and Monetary Union (EEMU). EEMU member countries
include Austria, Belgium, Finland, France, Germany, Ireland, Italy,
Luxembourg, the Netherlands, Portugal and Spain. Government bonds issued by
member countries were redenominated into euro on January 1, 1999.
Corporations based in member countries have until 2002 to redenominate their
existing bonds. New issuances of corporate and government bonds from member
countries will be denominated in euro. The redenomination into euro has not
had, and is not expected to have, a material impact on the Funds' operations.
6. Transactions With Affiliates:
Each Fund has a management agreement with LMFA. Pursuant to their
respective agreements, LMFA provides the Funds with management and
administrative services for which each Fund pays a fee, computed daily and
payable monthly, at annual rates of each Fund's average daily net assets.
LMFA has agreed to waive its fees to the extent each Fund's expenses
(exclusive of taxes, interest, brokerage and extraordinary expenses) exceed
during any month certain annual rates. The following chart shows annual rates
of management fees; expense limits and their expiration dates; management
fees waived; and management fees payable for each Fund:
<TABLE>
<CAPTION>
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>
International Equity
--Primary Class 0.75% 2.25% Indefinitely $ -- $158
--Navigator Class 0.75% 1.25% Indefinitely -- N.M.
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.
26
<PAGE>
Notes to Financial Statements -- Continued
Legg Mason Global Trust, Inc.
-----------------------------------------------------------------------------
Batterymarch Financial Management, Inc. ("Batterymarch") serves as
investment adviser to International Equity. Batterymarch is responsible for
the actual investment activity of the Fund. LMFA pays Batterymarch a fee for
its services at an annual rate equal to 66-2/3% of the fee received by LMFA
from International Equity.
Lombard Odier International Portfolio Management Limited ("Lombard Odier")
serves as investment sub-adviser to Europe Fund. 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
respective Class's average daily net assets, calculated daily and payable
monthly as follows:
<TABLE>
<CAPTION>
At June 30, 2000
------------------------
Distribution Service Distribution and Service
Fee Fee Fees Payable
---------------------------------------------------------------------------
<S> <C> <C> <C>
International Equity
Primary Class 0.75 0.25 $211
Europe Fund
Primary Class 0.75 0.25 51
Class A -- 0.25 13
</TABLE>
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:
International Equity, $31; and Europe Fund, $11.
LMFA, Batterymarch 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.
27
<PAGE>
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8. Acquisition of Bartlett Europe Fund and Reorganization of Worldwide Value
Fund, Inc.:
On October 5, 1999,Europe Fund, a series of Legg Mason GlobalTrust, 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 onSeptember 23, 1999.
On July 18, 1997, Bartlett Europe Fund, a series of the Bartlett Capital
Trust, acquired all the net assets of Worldwide Value Fund, Inc. pursuant to
a plan of reorganization approved byWorldwide's shareholders on April 30,
1997. The acquisition was accomplished by a tax-free exchange of 3,357 shares
of Worldwide (valued at $88,660) outstanding on July 18, 1997. The net assets
of Worldwide ($88,660, including $18,092 of unrealized appreciation and
$12,991 of undistributed net capital gain) were merged into the newly-created
Bartlett Europe Fund. Prior to the reorganization, Worldwide was a closed-end
mutual fund whose shares traded on the NYSE.
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>
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 -- -- -- -- -- -- -- --
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>
28
<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]
The Art of Investing(SM)
<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
