Dear Shareholders:
- --------------------------------------------------------------------------------
The Lexington International Fund enjoyed a solid second quarter appreciating
5.79%*. For the first half of 1996 the Fund had a total return of 11.98%*. These
numbers compare favorably to the average international fund which achieved
returns of 3.49% for the second quarter and 8.02% during the first half,
according to Lipper Analytical Services, Inc. The unmanaged Morgan Stanley
Capital International EAFE Index advanced 1.6% during the second quarter and
4.5% for the first half.
Lexington International Fund achieved above average returns due to several
factors. Although amounting to only 5% of the Fund, Eastern European stocks
enjoyed strong returns during the quarter. Strong growth in the region combined
with attractive valuations is finally drawing investors' attention to the
region. The recent presidential election victory in Russia by President Boris
Yeltsin was also key in improving the outlook for Russia and Eastern Europe as
well. Japanese stock selection was strong as the Fund avoided financial stocks
and focused on better performing cyclicals and smaller growth stocks. Hedging
part of the portfolio back into dollars also proved mildly beneficial. On the
negative side, Italian equities returned an impressive 13.4% for the quarter as
favorable elections led to a rally in stocks and bonds; however, due to an
underweighting in Italy, the Fund only mildly participated.
The U.S. economy clearly accelerated during the second quarter. Employment
growth has been well ahead of expectations and unemployment now stands at only
5.3%. Early signs of wage inflation portends a need for Federal Reserve monetary
tightening. U.S. equities have managed to advance over 10% during the first half
despite 30 year bond yields rising from 6.0% to 7.2% during the same time span.
U.S. equities benefitted from massive inflows into stock mutual funds as $121
billion flowed into U.S. stock funds in the first five months of 1996. The
record for cash inflows was $130 billion but that was for the full year of 1993.
Elsewhere, Japanese growth accelerated sharply as GDP for the second quarter
rose 12.7% which was the highest rate in two decades. The Japanese economy is
finally showing signs of life due to aggressive monetary easing by the Bank of
Japan, heavy fiscal expenditures of $130 billion, and a weak yen which is
stimulating exports. If growth can be maintained Japanese corporate profits will
rise rapidly; however, the Bank of Japan is likely to begin raising interest
rates which would be negative for world liquidity. European growth remains weak
due to double digit unemployment. Companies are following the American example
of restructuring but this costs jobs as they are moved out of high cost
countries such as Germany and into low cost regions such as Eastern Europe.
Despite structural economic weakness, European growth is likely to improve
somewhat in the second half of 1996 due to loose monetary policy by European
central banks, and a better export outlook due to a stronger U.S. economy and
dollar. In
1
<PAGE>
conclusion, world growth is likely to accelerate in the second half of 1996 and
into 1997. This may have a negative effect on world equity markets which have
benefitted from powerful monetary stimulus.
The Lexington International Fund is positioned for stronger economic
growth. European equity selection has favored cheap cyclicals and restructuring
companies such as Daimler Benz and Hoechst in Germany. The Fund is slightly
overweight Japanese equities as profits look set for continued strong growth.
However, due to strong returns over the past year, some positions have been
sold. In Japan, stock selection remains biased toward cyclicals and growth
stocks as well as weak yen beneficiaries. Japanese banks continue to be avoided.
The emerging markets portion of the Fund is overweight Eastern Europe as its
exciting prospects continue to unfold. The Asian markets have a low
representation due to poor valuation and interest rates which move in tandem
with U.S. rates. Stocks which have exceeded our price targets have been sold as
these will be most vulnerable as interest rates rise. The Fund has approximately
10% cash to take advantage of a buying opportunity as markets correct. Finally,
due to a 10% cash position in U.S. dollars and a strong rally in the U.S.
dollar, the Fund has reduced yen hedged positions to just 10% of the Fund. In
the long term we expect the Japanese yen to continue to weaken as its massive
trade surplus continues to shrink.
We appreciate your continued support and welcome the opportunity to discuss
any questions you may have about your investment.
Sincerely,
Richard T. Saler Robert M. DeMichele
Portfolio Manager President
July, 1996 July, 1996
*21.37% and 9.50% are the one year and since commencement (1/3/94) average
annual standard total returns, respectively, for the period ended June 30, 1996.
Investment return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than at their
original cost. Total return represents past performance.
2
<PAGE>
(LEFT COLUMN)
Lexington International Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited)
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------------
COMMON STOCKS: 87.7%
Australia: 0.9%
27,300 QBE Insurance Group, Ltd. ............. $ 162,068
----------
Austria: 2.0%
4,300 Bank Austria AG ....................... 178,097
3,000 Creditanstalt-Bankverein .............. 198,414
----------
376,511
----------
Brazil: 1.1%
22,000 Aracruz Celulose S.A. (ADR) ........... 209,000
----------
Canada: 1.5%
6,200 Jetform Corporation ................... 116,638
25,900 Noranda Forest, Inc. .................. 172,831
----------
289,469
----------
Chile: 2.9%
27,850 Antofagasta Holdings Plc .............. 139,584
16,000 Banco Osorno y La Union (ADR) ......... 216,000
7,000 Santa Isabel S.A. (ADR) ............... 194,250
----------
549,834
----------
France: 8.4%
2,580 Alcatel Alsthom ....................... 225,001
797 Cetelem ............................... 179,106
9,400 France Growth Fund, Inc. .............. 96,350
5,000 Dassault Systems S.A. ................. 155,625
4,700 Lafarge ............................... 284,365
5,800 SGS-Thomson Microelectronics N.V.1 .... 203,905
480 Sidel S.A. ............................ 122,039
1,550 Societe Generale de Surveillance
Holding S.A. "B" .................... 170,399
1,700 Synthelabo ............................ 143,634
----------
1,580,424
----------
Germany: 5.7%
7,300 Continental AG ........................ 118,368
480 Daimler-Benz AG1 ...................... 256,653
2,900 Fielmann AG (Preferred shares) ........ 138,975
1,320 G.M. Pfaff AG1 ........................ 51,992
5,100 Hoechst AG ............................ 172,757
1,070 SAP AG (Preferred shares) ............. 158,537
346 Sto AG (Preferred shares) ............. 172,625
----------
1,069,907
----------
Greece: 1.1%
3,800 Ergo Bank S.A. ........................ 208,999
----------
Hong Kong: 0.8%
173,000 National Mutual Asia, Ltd. ............ 151,986
----------
(RIGHT COLUMN)
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------------
Hungary: 1.4%
11,300 OTP Rt. ............................... $ 178,290
2,000 Pick Szeged Rt. ....................... 86,546
----------
264,836
----------
Indonesia: 1.7%
143,250 PT Kawasan Industrial Jababeka ........ 209,394
51,000 PT Semen Cibinong ..................... 115,112
----------
324,506
----------
Ireland: 2.5%
34,800 Allied Irish Banks Plc ................ 180,984
108,800 Jefferson Smurfit Group ............... 291,595
----------
472,579
----------
Israel: 0.6%
1,240 Koor Industries, Ltd.1 ................ 105,077
----------
Italy: 0.9%
10,400 Bulgari SpA ........................... 165,973
----------
Japan: 25.4%
15,000 Amada Company, Ltd. ................... 161,496
6,000 Amway Japan, Ltd. ..................... 301,095
3,000 CSK Corporation ....................... 89,234
3,000 H.I.S. Company, Ltd. .................. 182,573
25,000 Hino Motors, Ltd. ..................... 260,037
79,000 Kawasaki Steel Corporation ............ 284,717
29,000 Komatsu Forklift Company, Ltd. ........ 210,355
3,300 Maruco Company, Ltd. .................. 296,578
10,000 Matsushita Electric Industrial
Company, Ltd. ........................ 186,131
14,000 Matsushita Refrigeration
Company, Ltd. ........................ 109,599
17,000 Matsuzakaya Company, Ltd. ............. 207,847
32,000 Mazda Motor1 .......................... 159,124
79,000 Mitsui Engineering & Shipbuilding1 .... 240,748
9 NTT Data Communications Systems
Corporation .......................... 269,343
9,000 National House Industrial
Corporation .......................... 140,420
30,000 Nippon Chemi-Con Corporation .......... 208,850
81,000 Nippon Steel Corporation .............. 277,883
10,000 Nitto Denko Corporation ............... 176,095
2,900 Paris Miki, Inc. ...................... 134,945
3,000 Ryohin Keikaku Company, Ltd. .......... 270,438
3,800 Sony Corporation ...................... 249,982
11,000 Sumitomo Forestry Company ............. 160,584
19,000 Yamato Kogyo Company, Ltd. ............ 227,099
----------
4,805,173
----------
3
<PAGE>
(LEFT COLUMN)
Lexington International Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------------
Malaysia: 1.1%
38,000 Malaysian Assurance Alliance Bhd ...... $ 201,163
----------
Mexico: 1.5%
30,600 Tubos De Acero De Mexico S.A. (ADR) ... 288,788
----------
Netherlands: 1.1%
6,280 Philips Electronics N.V. .............. 204,063
----------
New Zealand: 2.5%
198,800 Brierley Investments, Ltd. ............ 188,090
78,600 Carter Holt Harvey, Ltd. .............. 179,448
35,100 Fisher & Paykel Industries, Ltd. ...... 112,622
----------
480,160
----------
Norway: 2.1%
35,500 Fokus Banken A.S.1 .................... 193,330
13,800 Saga Petroleum A.S. ................... 202,744
----------
396,074
----------
Philippines: 1.9%
211,000 C & P Homes, Inc. ..................... 183,636
420,450 Filinvest Land, Inc.1 ................. 172,909
----------
356,545
----------
Poland: 3.6%
5,05 Bank Rozwoju Eksportu S.A. ............ 132,083
8,00 Debica S.A.1 .......................... 213,702
20,62 Elektrim Towarzystwo Handlowe S.A.1 ... 169,617
1,246 Wedel S.A.1 ........................... 55,932
1,340 Zaklady Piwowarski w Zywcu S.A.1 ...... 103,540
----------
674,874
----------
Portugal: 1.8%
12,700 Portugal Telecom S.A.1 ................ 331,936
----------
Russia: 0.8%
3,800 LUKoil Holdings of Russia (ADR) ....... 160,246
----------
South Africa: 0.7%
3,300 Rustenburg Platinum Holdings, Ltd. .... 51,467
5,388 Rustenburg Platinum Holdings, Ltd.
(ADR) ................................ 83,986
----------
135,453
----------
(RIGHT COLUMN)
Number of Value
Shares Security (Note 1)
- ----------------------------------------------------------------------
Spain: 2.2%
5,800 Repsol S.A. ........................... $ 201,474
12,000 Telefonica de Espana .................. 220,818
----------
422,292
----------
Sweden: 0.7%
2,890 Astra AB .............................. 127,693
----------
Switzerland: 3.4%
180 Nestle S.A. ........................... 205,332
37 Roche Holding AG ...................... 281,923
150 Union Bank of Switzerland ............. 146,683
----------
633,938
----------
Thailand: 0.7%
26,000 Krung Thai Bank Public
Company, Ltd. ........................ 121,864
2,300 Total Access Communications Plc2 ...... 19,550
----------
141,414
----------
United Kingdom: 6.7%
149,600 Aegis Group Plc1 ...................... 121,871
9,700 Bluebird Toys Plc ..................... 35,070
32,600 British Telecommunications Plc ........ 175,025
17,700 D.F.S. Furniture Company Plc .......... 152,157
27,600 Grand Metropolitan Plc ................ 182,870
12,060 RTZ Corporation Plc ................... 178,340
112,500 Tomkins Plc ........................... 423,323
----------
1,268,656
----------
TOTAL INVESTMENTS: 87.7%
(cost $14,988,503\'86) (Note 1) ...... 16,559,637
Other assets in excess
of liabilities: 12.3% ................ 2,326,454
----------
TOTAL NET ASSETS: 100.0%
(equivalent to $11.87 per share on
1,590,996 shares outstanding) ........ $18,886,091
===========
1Non-income producing security.
2Restricted security. (Note 8).
ADR-American Depository Receipt.
(d)Aggregate cost for Federal income tax purposes is identical.
At June 30, 1996, the composition of the Fund's net assets by industry
concentration was as follows:
COLUMN 1
Banking ....................................... 10.2%
Capital Equipment ............................. 7.6
Construction & Housing ........................ 1.7
Consumer durable ............................. 8.8
Consumer non durable ......................... 5.1
Electric & Electronics ........................ 5.9
Energy Sources ................................ 3.0
COLUMN 2
Financial Services ........................... 4.9%
Health & PersonalCare ......................... 2.9
Materials ..................................... 16.5
Merchandising ................................. 5.8
Metals and Mining ........................... 0.3
Multi-industry ................................ 5.0
Real Estate ................................... 2.0
COLUMN 3
Services ...................................... 3.1%
Telecommunications ............................ 4.0
Trade ......................................... 0.9
Other assets .................................. 12.3
-----
Total Net Assets 100.0%
=====
The Notes to Financial Statements are an integral part of this statement.
4
<PAGE>
Lexington International Fund, Inc.
Statement of Assets and Liabilities
June 30, 1996 (unaudited)
Assets
Investments, at value (cost $14,988,503) (Note 1) ................ $16,559,637
Cash ............................................................. 2,202,527
Receivable for investment securities sold ........................ 204,145
Receivable for shares sold ....................................... 35,273
Dividends and interest receivable ................................ 38,727
Foreign taxes recoverable ........................................ 25,478
Unrealized gain on open forward contracts (Note 7) ............... 69,951
Deferred organization expenses, net (Note 1) ..................... 27,144
-----------
Total Assets ............................................... 19,162,882
-----------
Liabilities
Due to Lexington Management Corporation (Note 2) ................. 15,079
Payable for investment securities purchased ...................... 208,339
Payable for shares redeemed ...................................... 1,428
Accrued expenses ................................................. 51,945
-----------
Total Liabilities .......................................... 276,791
-----------
Net Assets (equivalent to $11.87 per share on
1,590,996 shares outstanding) (Note 4) . ....................... $18,886,091
===========
Net Assets consist of:
Capital stock-authorized 1,000,000,000 shares,
$.001 par value per share ....................................... $ 1,591
Additional paid-in capital (Note 1) .............................. 15,644,561
Accumulated deficit (Note 1) ..................................... (182,397)
Accumulated net realized gains on investments
and foreign currency holdings (Note 1) .......................... 1,781,702
Unrealized appreciation of investments and
foreign currency holdings ....................................... 1,640,634
-----------
Total Net Assets ........................................... $18,886,091
===========
The Notes to Financial Statements are an integral part of this statement.
5
<PAGE>
<TABLE>
<CAPTION>
Lexington International Fund, Inc.
Statement of Operations
Six months ended June 30, 1996 (unaudited)
<S> <C> <C>
Investment Income
Dividends .......................................................... $ 232,517
Interest ........................................................... 32,099
----------
................................................................... 264,616
Less: foreign tax expense .......................................... 31,603
----------
Total investment income ......................................... 233,013
Expenses
Investment advisory fee (Note 2) .................................. 97,040
Custodian fees .................................................... 46,858
Distribution expenses (Note 3) .................................... 24,084
Printing and mailing .............................................. 14,179
Transfer agent and shareholder servicing
expenses (Note 2) ................................................. 14,167
Registration fees ................................................. 9,099
Accounting expense (Note 2) ....................................... 8,384
Directors' fees and expenses ...................................... 7,056
Professional fees ................................................. 7,024
Amortization of organization costs (Note 1) ....................... 4,769
Other expenses .................................................... 9,901
----------
Total expenses .................................................. 242,561
----------
Net investment loss ............................................ (9,548)
Realized and Unrealized Gain on Investments (Note 5)
Net realized gain on:
Investments ..................................................... 1,244,938
Foreign currency transactions ................................... 477,220
----------
Net realized gain .............................................. 1,722,158
Net change in unrealized appreciation on :
Investments ..................................................... 548,165
Foreign currency translations of other assets and liabilities ... (69,499)
----------
Net change in unrealized appreciation .......................... 478,666
----------
Net realized and unrealized gain ............................... 2,200,824
----------
Increase in Net Assets Resulting from Operations ................... $2,191,276
==========
</TABLE>
The Notes to Financial Statements are an integral part of this statement.
6
<PAGE>
<TABLE>
<CAPTION>
Lexington International Fund, Inc.
Statements of Changes in Net Assets
Six months
ended Year ended
June 30, 1996 December 31,
(unaudited) 1995
------------ -----------
<S> <C> <C>
Net investment loss .............................................. $(9,548) $(20,029)
Net realized gain from investments and foreign
currency transactions ........................................... 1,722,158 511,634
Increase in unrealized appreciation of investments and
foreign currency translations ................................... 478,666 500,347
------------ -----------
Increase in net assets resulting from operations .............. 2,191,276 991,952
Distributions to shareholders from net investment income ......... - (398,985)
Distributions to shareholders in excess
of net investment income (Note 1) ............................... - (172,849)
Distributions to shareholders from net
realized gains from security transactions ....................... - (33,076)
Decrease in net assets from capital share transactions (Note 4) .. (1,159,824) (375,760)
------------ -----------
Net increase in net assets .................................... 1,031,452 11,282
Net Assets:
Beginning of period ............................................. 17,854,639 17,843,357
------------ -----------
End of period (including accumlated deficit
of $182,397 and distributions in excess of
net investment income of $172,849, respectively) ................ $18,886,091 $17,854,639
============ ===========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
7
<PAGE>
Lexington International Fund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995
1. Significant Accounting Policies
Lexington International Fund, Inc. (the "Fund") is an open-end diversified
management investment company registered under the Investment Company Act of
1940, as amended. The Fund's investment objective is to seek long-term growth of
capital through investment in common stocks and equivalents of companies
domiciled in foreign countries. The following is a summary of significant
accounting policies followed by the Fund in the preparation of its financial
statements:
Investments Security transactions are accounted for on a trade date basis.
Realized gains and losses from investment transactions are reported on the
identified cost basis. Securities traded on a recognized stock exchange are
valued at the last sales price reported by the exchange on which the securities
are traded. If no sales price is recorded, the mean between the last bid and
asked prices is used. Securities traded on the over-the-counter market are
valued at the mean between the last current bid and asked price. Short-term
securities having maturity of 60 days or less are stated at amortized cost,
which approximates market value. Securities for which market quotations are not
readily available and other assets are valued by Fund management in good faith
under the direction of the Fund's Board of Directors. All investments quoted in
foreign currencies are valued in U.S. dollars on the basis of the foreign
currency exchange rates prevailing at the close of business. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Interest
income, adjusted for amortization of premiums and accretion of discounts, is
accrued as earned.
Foreign Currency Transactions Foreign currencies (and receivables and
payables denominated in foreign currencies) are translated into U.S. dollar
amounts at current exchange rates. Translation gains or losses resulting from
changes in exchange rates and realized gains and losses on the settlement of
foreign currency transactions are reported in the statement of operations. In
addition, the Fund may enter into forward foreign exchange contracts in order to
hedge against foreign currency risk in the purchase or sale of securities
denominated in foreign currency. The Fund may also enter into such contracts to
hedge against changes in foreign currency exchange rates on portfolio positions.
These contracts are marked to market daily, by recognizing the difference
between the contract exchange rate and the current market rate as unrealized
gains or losses. Realized gains or losses are recognized when contracts are
closed and are reported in the statement of operations.
Federal Income Taxes It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to "regulated investment companies" and
to distribute all of its taxable income to its shareholders. Therefore, no
provision for Federal income taxes is required.
Distributions The character of income and gains to be distributed are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. At December 31, 1995 reclassifications
were made to the Fund's capital accounts to reflect permanent book/tax
differences and income and gains available for distributions under income tax
regulations. Net investment income, net realized gains and net assets were not
affected by this change.
Deferred Organization Expenses Organization expenses aggregating $48,067
have been deferred and are being amortized on a straight-line basis over five
years.
8
<PAGE>
Lexington International Fund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995 (continued)
2. Investment Advisory Fee and Other Transactions with Affiliate
The Fund pays an investment advisory fee to Lexington Management Corporation
("LMC") at an annual rate of 1.00% of the Fund's average daily net assets. The
investment advisory contract provides that the total annual expenses of the Fund
(including management fees, but excluding interest, taxes, brokerage commissions
and extraordinary expenses) will not exceed the level of expenses which the Fund
is permitted to bear under the most restrictive expense limitation imposed by
any state in which shares of the Fund are offered for sale. No reimbursement was
required for the six months ended June 30, 1996.
The Fund also reimburses LMC for certain expenses, including accounting and
shareholder servicing costs of $17,589, which are incurred by the Fund, but paid
by LMC.
3. Distribution Plan
The Fund has a distribution plan (the "Plan") which allows payments to finance
activities associated with the distribution of the Fund's shares. The Plan
provides that the Fund may pay distribution fees on a reimbursement basis,
including payments to Lexington Fund Distributors, Inc. ("LFD"), the Fund's
distributor, in amounts not exceeding 0.25% per annum of the Fund's average
daily net assets. Total distribution expenses for the six months ended June 30,
1996 were $24,084 and are set forth in the statement of operations.
<TABLE>
<CAPTION>
4. Capital Stock
Transactions in capital stock were as follows: Six months ended
June 30, 1996 Year ended
(unaudited) December 31, 1995
-------------------- -----------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 248,994 $2,764,826 179,998 $1,853,463
Shares issued on reinvestment
of dividends - - 39,453 417,018
------- ---------- ------- ----------
248,994 2,764,826 219,451 2,270,481
Shares redeemed (343,125) (3,924,650) (255,544) (2,646,241)
------- ---------- ------- ----------
Net decrease (94,131) $(1,159,824) (36,093) $(375,760)
======= ========== ======= ==========
</TABLE>
5. Purchases and Sales of Investment Securities
The cost of purchases and proceeds from sales of securities for the six months
ended June 30, 1996, excluding short term securities, were $9,022,164 and
$10,536,105, respectively.
At June 30, 1996, aggregate gross unrealized appreciation for all securities and
foreign currency holdings (including foreign currency receivables and payables)
in which there is an excess of value over tax cost amounted to $2,118,177 and
aggregate gross unrealized depreciation for all securities and foreign currency
holdings in which there is an excess of tax cost over value amounted to
$477,543.
9
<PAGE>
Lexington International Fund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995 (continued)
6. Investment Risks
The Fund's investments in foreign securities may involve risks not present in
domestic investments. Since foreign securities may be denominated in a foreign
currency and involve settlement and pay interest or dividends in foreign
currencies, changes in the relationship of these foreign currencies to the U.S.
dollar can significantly affect the value of the investments and earnings of the
Fund. Foreign investments may also subject the Fund to foreign government
exchange restrictions, expropriation, taxation or other political, social or
ecnomic developments, all of which could affect the market and/or credit risk of
the investments.
In addition to the risks described above, risks may arise from forward foreign
currency contracts as a result of the potential inability of counterparties to
meet the terms of their contracts.
7. Forward Foreign Exchange Contracts
At June 30, 1996, the Fund was committed to sell foreign currencies under the
following forward foreign exchange contracts:
Unrealized
Settlement Contract Contract Current Gain at
Security Date Amount Rate Rate 6/30/96
-------- ---------- -------- -------- ------- ----------
Japanese Yen .... 07/08/96 $ 659,596 102.915 109.680 $40,684
Japanese Yen .... 09/10/96 180,674 105.350 108.620 5,439
Japanese Yen .... 10/11/96 1,035,841 105.695 108.160 23,607
Japanese Yen .... 01/06/97 65,525 106.460 106.820 221
-------
$69,951
=======
8. Restricted Securities
The following security was were purchased under Rule 144A of the Securities Act
of 1933 and, unless registered under the Act or exempted from registration, may
be sold only to qualified institutional investors.
Acquisition Average cost Market % of Net
Security Date per share Value Assets
-------- ----------- ------------ ------ --------
Total Access
Communicatons Plc ........ 09/28/95 $7.55 $19,550 0.10%
Pursuant to guidelines adopted by the Fund's Board of Directors, these
unregistered securities have been deemed to be illiquid. The Fund currently
limits investment in illiquid securities to 15% of the Fund's net assets, at
market value, at the time of purchase, but, pursuant to state regulations, the
Fund's investment in such securities is effectively limited to 10%.
10
<PAGE>
Lexington International Fund, Inc.
Financial Highlights
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
Six months
ended Year ended December 31,
June 30, 1996 -----------------------
(unaudited) 1995 1994
------------- ---- ----
<S> <C> <C> <C>
Net asset value, beginning of period ................................... $10.60 $10.37 $10.00
------ ------ ------
Income (loss) from investment operations:
Net investment loss .................................................. (0.01) (0.01) (0.08)
Net realized and unrealized gain on investments and foreign
currency holdings .................................................. 1.28 0.61 0.67
------ ------ ------
Total income from investment operations .............................. 1.27 0.60 0.59
------ ------ ------
Less distributions:
Dividends in excess of net investment income (temporary book-
tax difference) .................................................... - (0.35) -
Distributions from net realized capital gains ........................ - (0.02) (0.10)
Distributions in excess of net realized capital gains
(temporary book-tax difference) .................................... - - (0.12)
------ ------ ------
Total distributions .................................................. _ (0.37) (0.22)
------ ------ ------
Net asset value, end of period ......................................... $11.87 $10.60 $10.37
------ ------ ------
Total return ........................................................... 25.62%* 5.77% 5.87%
Ratio to average net assets:
Expenses ............................................................. 2.50%* 2.46% 2.39%
Net investment loss .................................................. (0.10%)* (0.12%) (0.94%)
Portfolio turnover rate ................................................ 102.97%* 137.72% 100.10%
Average commissions paid on equity security transactions ............... $0.02 - -
Net assets at end of period (000's omitted) ............................ $18,886 $17,855 $17,843
</TABLE>
*Annualized.
11
<PAGE>
Lexington
International Fund, Inc.
Investment Adviser
________________________________________________________
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Distributor
________________________________________________________
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
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All shareholder requests for services of
any kind should be sent to:
Transfer Agent
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STATE STREET BANK AND
TRUST COMPANY
c/o National Financial Data Services
1004 Baltimore
Kansas City, Missouri 64105
Or call toll free:
Service and Sales: 1-800-526-0056
24 Hour Account Information:
1-800-526-0052
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__________________________________________________________
(800) 526-0052
"LEXLINE"
24 hour toll-free telephone access to your
Lexington Fund account
Price/Yield * Account Balances * Exchanges *
Last Transactions * Total Return * Duplicate Statements
__________________________________________________________
This report has been prepared for the information of
the shareholders of Lexington International Fund, Inc.
and is authorized for distribution to the public only if
it is accompanied or preceded by a currently effective
prospectus which sets forth expenses and other
material information.
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LEXINGTON
LEXINGTON
INTERNATIONAL
FUND, INC.
_______________ X ______________
Seeks long-term growth of capital,
primarily through investment in
common stocks of companies
domiciled in foreign countries.
_______________ X ______________
SEMI-ANNUAL REPORT
JUNE 30, 1996
The Lexington Group
of No Load
Investment Companies
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