Dear Shareholders:
- --------------------------------------------------------------------------------
The performance of the core Asian stock markets was lackluster during the
second quarter returning some of the gains made in the first quarter. Lexington
Crosby Small Cap Asia Growth Fund was up 15.2%* for the six month period ended
June 30, 1996, compared to a rise of 10.6% for the unmanaged Morgan Stanley
Capital International All Country Far East Combined ex-Japan Index.
Strong performances were recorded by the smaller and peripheral bourses such
as the Philippines, Taiwan, Shenzhen 'B' and India. Hong Kong, Indonesia and
Shanghai rose by 0.6%, 1.5% and 2.3%, respectively, while Malaysia shed 1.1%,
Singapore 3.6% and Thailand 3.3%. The Korean and 'H' share markets dropped 6.1%
and 5.6%, respectively. The weakness in the stock markets is partly attributed
to the reduction in their weightings in the MSCI EMF indices, but more
importantly, to domestic concerns.
For example, the performance of the Hong Kong stock market was hampered by
fears of higher interest rates in the U.S., given Hong Kong's high sensitivity
to rate moves by the Federal Reserve. In Malaysia, the imposition of various
stringent monetary guidelines by Bank Negara triggered profit-taking. The
Singapore stock market was adversely affected by the introduction of property
measures aimed at speculators, as well as fears of a decelerating economy on the
back of slower demand for electronics and related products.
Meanwhile, the Philippines bourse maintained its strong performance with a
12.9% gain over the first quarter, as the result of continually improving
economic fundamentals and active foreign institutional inflows. The 'B' shares
in Shenzhen rose 40.5% on speculation that the government would allow local
Chinese investors to own 'B' shares and the government's subsequent ruling that
this would not be permitted. The Taiwan Weighted Index increased by 30.4% as a
result of improvements in cross-straits relations and the announcement of the
inclusion of Taiwan in the regional Morgan Stanley Capital International
indices.
The Australian stock market started the second quarter on a strong note,
supported by a rally in commodity stocks. However, subsequent profit-taking and
year-end tax loss selling in June resulted in a quarter-on-quarter gain of only
0.7%.
During the second quarter, the Fund's significant overweight position in
Indonesia was reduced from 15.0% to 10.5% as profit was taken in holdings which
had outperformed substantially and which we believed had become overvalued
relative to their earnings growth. Other significant shifts in asset allocation
included an increase in the Fund's exposure to the 'B' share stock markets, from
2.7% to 4.8%. Meanwhile, we took advantage of the weakness in the Thailand
bourse to increase weightings, bringing the Fund's holdings to 7.3% from 4.9%.
The strength in the Philippines and Malaysian stock markets led us to trim the
Fund's holdings in these countries.
Outlook and Strategy
The decision by the U.S. FOMC at the July 3rd meeting to maintain the
current level of the federal funds rate temporarily relieved fears of an
imminent increase in interest rates. However,
1
<PAGE>
the subsequent release of stronger than expected jobs data has led to
expectations of a 25 to 50 basis points rate rise over the next two months.
While the risk remains on the upside, many economists do not believe the Fed
will increase interest rates for the rest of this year since inflation is low
and there are no signs that the lower unemployment numbers have pushed wages or
employment costs to levels which would cause inflation. In addition, the U.S.
economy should, over the next few months, benefit from reduced oil prices and
lower import prices on the back of the strength in the U.S. dollar. The U.S.
economy is also likely to start showing signs of moderating growth in the third
quarter, which is in line with slower credit growth as the result of higher
mortgage rates and corporate borrowing costs.
Stable interest rates are likely to result in continuing liquidity inflows
into Asia, as overseas investors focus on its strong economic fundamentals,
which are underpinned by liberalization policies and the region's strong
dynamics. We believe that interest rate trends in Asia in the long-term will,
increasingly, be driven by domestic factors. The Asian region is expected to
enjoy improved liquidity for the rest of 1996, as these governments, with the
exception of Malaysia, are projected to lower interest rates as property
speculation activities abate, inflation remains steady, and selective sectors of
the economies show signs of slowing growth. Furthermore, dividend payments in
most stock markets in the region in 1996 and 1997 are projected to exceed new
issues, thereby creating additional liquidity.
In view of the expected favorable liquidity conditions and the strong
fundamentals of the Asian economies, we continue to favor investments in the
region. Our stock selection will generally remain defensive and we will ensure
that our active stock selection strategy and investment criteria is applied
stringently. We are less sanguine on the outlook for the Australian stock
market, given its tight monetary policy. The Fund's investments in this country
will be used as a source of cash should additional attractive investments in the
other Asian markets arise.
We expect to maintain the Fund's overweight exposure in Hong Kong,
Singapore, Indonesia, the Philippines, China and India, although significant
overweight positions in Hong Kong and Indonesia will continue to be reduced. The
Fund's weighting in Thailand will be increased, while investments in Korea and
Taiwan will be added, where possible. Meanwhile, we will continue to trim the
Fund's exposure in Malaysia, where further monetary tightening is expected for
the rest of 1996.
Sincerely,
Nigel Webber Christina Lam Robert M. DeMichele
Portfolio Manager Portfolio Manager President
July, 1996 July, 1996 July, 1996
*12.74% is the since commencement (7/3/95) average annual standard total return
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 their original cost. Total return represents past
performance.
2
<PAGE>
Lexington Crosby Small Cap Asia Growth Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited)
(Left Column)
Number of Value
Shares Security (Note 1)
- ------------------------------------------------------------------
COMMON STOCKS: 92.6%
Australia: 3.8%
123,000 Delta Gold NL1 ....................... $ 314,323
172,250 Great Central Mines NL1 .............. 471,332
-----------
785,655
-----------
China: 4.8%
619,000 China International Marine
Containers, Ltd. "B"1 .............. 535,813
960,000 Shanghai Refrigerator Compressor
Company. Ltd. ...................... 443,520
-----------
979,333
-----------
Hong Kong: 32.3%
74,000 Cheung Kong (Holdings), Ltd. ......... 532,997
820,000 China Hong Kong Photo Productions1 ... 468,785
784,000 China Resources Enterprise, Ltd. ..... 552,027
1,200,000 Founder Hong Kong, Ltd.1 ............. 499,987
378,000 Giordano International, Ltd. ......... 366,270
960,000 Guangnan Holdings .................... 573,629
3,300,000 Harbin Power Equipment
Company, Ltd. ..................... 494,560
81,000 Hutchinson Whampoa, Ltd.1 ............ 509,638
900,000 Ka Wah Bank 299,411
276,000 Liu Chong Hing Bank, Ltd. ............ 376,192
111,000 New World Development
Company, Ltd.1 .................... 514,832
50,000 Swire Pacific, Ltd. "A" .............. 427,960
1,570,000 Texwinca Holdings, Ltd.1 ............. 502,022
221,000 Varitronix International, Ltd.1 ...... 461,119
-----------
6,579,429
-----------
India: 5.0%
35,500 Ashok Leyland, Ltd.1 ................. 492,740
18,000 Indian Hotels Company, Ltd.1 ......... 516,420
-----------
1,009,160
-----------
Indonesia: 10.4%
513,000 PT Asahimas Flat Glass ............... 540,348
333,000 PT Citra Marga Nusaphala Persada1 .... 508,233
336,000 PT Lippo Karawaci1 ................... 516,423
52,440 PT Mulia Industrindo1 ................ 34,381
374,000 PT Steady Safe1 ...................... 514,532
-----------
2,113,917
-----------
Malaysia: 12.7%
108,000 Ekran Bhd1 ........................... 411,470
50,000 Gadek (Malaysia) Bhd ................. 294,766
25,000 Gadek (Malaysia) Bhd (Warrants)1 ..... 52,637
425,000 Intiplus Bhd1 ........................ 417,586
246,000 MBM Resources Bhd .................... 471,578
152,000 Pan Pacific Asia Bhd ................. 469,380
162,000 Peladang Kimia Bhd ................... 467,777
-----------
2,585,194
-----------
(Right Column)
Number of Value
Shares Security (Note 1)
- ------------------------------------------------------------------
Philippines: 6.0%
2,160,000 Aboitiz Equity Ventures, Inc.1 ....... $ 404,897
429,500 Bacntan Cement1 ...................... 328,615
1,250,000 Republic Glass Holdings
Corporation1 ....................... 478,194
-----------
1,211,706
-----------
Singapore: 10.3%
420,000 CSA Holdings, Ltd. ................... 413,837
39,400 Fraser & Neave, Ltd.1 ................ 407,769
30,000 Oversea-Chinese Banking
Corporation, Ltd. .................. 350,890
3,000 Oversea-Chinese Banking
Corporation, Ltd. (Warrants)1 ...... 24,031
713,000 Roly International Holdings1 ......... 459,885
520,000 Seksun Precision Engineering, Ltd. ... 434,961
-----------
2,091,373
-----------
Thailand: 7.3%
71,900 K.R. Precision Public Company, Ltd.1 . 509,748
110,000 Krung Thai Bank Public
Company, Ltd.1 ..................... 515,578
187,000 Robinson Department Store Public
Company, Ltd.1 ..................... 464,020
-----------
1,489,346
-----------
TOTAL COMMON STOCK
(Cost $17,858,731) ................. 18,845,113
-----------
CALL WARRANTS: 0.8%
TAIWAN: 0.8%
3,500 NRI Taiwan Call Warrant1
due 01/05/97 (cost $107,170) ....... 164,815
-----------
TOTAL INVESTMENTS: 93.4%
(cost $17,965,901(d)) (Note 1) .... 19,009,928
Other assets in excess of
liabilities: 6.6% .................. 1,347,133
-----------
TOTAL NET ASSETS: 100.0%
(equivalent to $11.24 per share on
1,811,415 shares outstanding) ...... $20,357,061
===========
1 Non-income producing security.
(d) Aggregate cost for Federal income tax purposes is identical.
3
<PAGE>
Lexington Crosby Small Cap Asia Growth Fund, Inc.
Statement of Net Assets
(Including the Portfolio of Investments)
June 30, 1996 (unaudited) (continued)
- -------------------------------------------------------------------------------
At June 30, 1996, the composition of the Fund's net assets by industry
concentration was as follows:
Aerospace / Engineering ....... 2.1%
Banking ....................... 6.3%
Capital Equipment ............ 7.4%
Consumer-Non Durable Goods .... 6.7%
Electrical and Electronics .... 6.7%
Financial Services ............ 10.4%
Gold Mining.................... 1.6%
Materials ..................... 11.0%
Merchandising ................. 2.3%
Metals and Mining ............. 2.4%
Multi-Industry ................ 14.0%
Real Estate ................... 7.9%
Retail ........................ 1.8%
Services ...................... 9.9%
Trade ......................... 2.9%
Other assets .................. 6.6%
-----
Total Net Assets 100.0%
=====
Lexington Crosby Small Cap Asia Growth Fund, Inc.
Statement of Assets and Liabilities
June 30, 1996 (unaudited)
Assets
Investments in securities, at value (cost $17,965,901) (Note 1) ... $19,009,928
Cash .............................................................. 3,645,585
Receivable for investment securities sold ......................... 684,483
Receivable for shares sold ........................................ 176,802
Dividends and interest receivable ................................. 35,942
Deferred organization expenses, net (Note 1) ...................... 64,681
-----------
Total Assets ................................................ 23,617,421
-----------
Liabilities
Due to Lexington Management Corporation (Note 2) .................. 19,947
Payable for investment securities purchased ....................... 3,124,211
Payable for shares redeemed ....................................... 14,178
Accrued expenses .................................................. 34,823
Other liabilities ................................................. 67,201
-----------
Total Liabilities ........................................... 3,260,360
-----------
Net Assets (equivalent to $11.24 per share on 1,811,415
shares outstanding) (Note 3) .................................... $20,357,061
===========
Net Assets consist of:
Capital stock-authorized 1,000,000,000 shares,
$.001 par value per share ..................................... $ 1,811
Additional paid-in capital ...................................... 18,961,121
Accumulated deficit (Note 1) .................................... (20,681)
Accumulated net realized gain on investments and
foreign currency holdings (Note 1) ............................ 369,945
Unrealized appreciation of investments and
foreign currency holdings ..................................... 1,044,865
-----------
Net Assets .................................................. $20,357,061
===========
The Notes to Financial Statements are an integral part of these statements.
4
<PAGE>
(LEFT COLUMN)
Lexington Crosby Small Cap
Asia Growth Fund, Inc.
Statement of Operations
Six months ended June 30, 1996 (unaudited)
Investment Income
Dividends ................................... $ 135,333
Interest .................................... 26,234
----------
161,567
Less: foreign tax expense ................... 8,437
----------
Total investment income ............... $ 153,130
Expenses
Investment advisory fee (Note 2) .......... 84,975
Printing and mailing expenses ............. 33,750
Custodian fees ............................ 26,295
Transfer agent and shareholder
servicing expense (Note 2) .............. 14,500
Registration fees ......................... 12,048
Directors' fees and expenses .............. 7,755
Professional fees ......................... 6,737
Amortization of deferred
organization expenses (Note 1) .......... 6,721
Accounting expenses (Note 2) .............. 5,994
Other expenses ............................ 9,884
----------
Total expenses .......................... 208,659
Less: expenses recovered
under contract with
investment advisor
(Note 2) ........................ 36,717 171,942
---------- ---------
Net investment loss ................... (18,812)
Realized and Unrealized Gain
(Loss) on Investments (Note 4)
Net realized gain (loss) on:
Investments ............................. 612,025
Foreign currency
transactions .......................... (17,608)
----------
Net realized gain ..................... 594,417
Net change in unrealized
appreciation on:
Investments ............................. 915,489
Foreign currency translations
of other assets and liabilities ....... (326)
----------
Net change in unrealized
appreciation ...................... 915,163
---------
Net realized and unrealized
gain .............................. 1,509,580
---------
Increase in Net Assets
Resulting from Operations ................. $1,490,768
==========
(RIGHT COLUMN)
Lexington Crosby Small Cap
Asia Growth Fund, Inc.
Statements of Changes in Net Assets
Six months July 3, 1995
ended (commencement
June 30, of operations) to
1996 December 31,
(unaudited) 1995
----------- ----------
Net investment income (loss) .................. $ (18,812) $ 14,754
Net realized gain (loss) from
investment and foreign
currency transactions ....................... 594,417 (222,515)
Change in unrealized appreciation
of investments and foreign
currency translations ....................... 915,163 129,702
----------- ----------
Increase (decrease) in net
assets resulting from
operations ............................ 1,490,768 (78,059)
Distributions to shareholders from net
investment income ........................... - (18,581)
Increase in net assets from capital
share transactions (Note 3) ................. 9,930,329 9,032,604
----------- ----------
Net increase in net assets .............. 11,421,097 8,935,964
Net Assets:
Beginning of period
(including accumulated
deficit of $20,681 and
distributions in excess
of net investment income
of $1,869, respectively) .................... 8,935,964 -
----------- ----------
End of period ................................. $20,357,061 $8,935,964
=========== ==========
The Notes to Financial Statements are an integral part of these statements.
5
<PAGE>
Lexington Crosby Small Cap Asia Growth Fund, Inc.
Notes to Financial Statements
June 30, 1996 (unaudited) and December 31, 1995
1. Significant Accounting Policies
Lexington Crosby Small Cap Asia Growth 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 capital appreciation through investment in common stocks and
equivalents of companies domiciled in the Asia region with a market
capitalization of less than $1 billion. The Fund commenced operations on July 3,
1995. 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 price 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 a 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 $67,351
have been deferred and are being amortized on a straight-line basis over five
years.
6
<PAGE>
Lexington Crosby Small Cap Asia Growth 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 the rate of 1.25% of average daily net assets. In connection with
providing investment advisory services, LMC has entered into a sub-advisory
contract with Crosby Asset Management (U.S.), Ltd. ("Crosby") under which Crosby
provides the Fund with investment management services. Pursuant to the terms of
the sub-advisory contract between LMC and Crosby, LMC pays Crosby a monthly
sub-advisory fee at the annual rate of 0.625% of the Fund's average daily net
assets. LMC agreed to voluntarily limit the total expenses of the Fund
(excluding interest, taxes, brokerage commissions and extraordinary expenses but
including management fee and operating expenses) to an annual rate of 1.75% of
the Fund's average net assets through April 30, 1996. Thereafter, the investment
advisory contract provides that the total annual expenses of the Fund 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. The investment advisory fee and expense reimbursement are
set forth in the statement of operations.
The Fund also reimburses LMC for certain expenses, including accounting and
shareholder servicing costs of $11,159 which are incurred by the Fund, but paid
by LMC.
3. Capital Stock
Transactions in capital stock were as follows:
Six months ended July 3, 1995
June 30, 1996 (commencement of operations)
(unaudited) to December 31, 1995
--------------------- --------------------------
Shares Amount Shares Amount
----- ----- ------ ------
Shares sold ................. 1,374,080 $15,223,64 1,003,607 $9,916,274
Shares issued on reinvestment
of dividends .............. - - 1,372 13,320
--------- ----------- --------- ----------
1,374,080 15,223,640 1,004,979 9,929,594
Shares redeemed ............. (478,453) (5,293,311) (89,191) (896,990)
--------- ----------- --------- ----------
Net increase ................ 895,627 $ 9,930,329 915,788 $9,032,604
========= =========== ========= ==========
4. 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 $ 20,464,180
and $ 10,369,449, respectively.
At June 30, 1996, the 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
$1,527,407 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 $482,542.
5. Investment and Concentration 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
economic 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 the result of the potential inability of
counterparties to meet the terms of their contracts.
7
<PAGE>
Lexington Crosby Small Cap Asia Growth Fund, Inc.
Financial Highlights
Selected per share data for a share outstanding throughout the period:
<TABLE>
<CAPTION>
July 3, 1995
Six months (commence-
ended ment of opera-
June 30, tions) to
1996 December 31,
(unaudited) 1995
------ ------
<S> <C> <C>
Net asset value, beginning of period ............................... $ 9.76 $10.00
------ ------
Income (loss) from investment operations:
Net investment income (loss) ................................... (0.01) 0.02
Net realized and unrealized gain (loss) on investments and
foreign currency transactions ................................ 1.49 (0.24)
------ ------
Total income (loss) from investment operations ................. 1.48 (0.22)
------ ------
Less distributions:
Dividends from net investment income ........................... - (0.02)
------ ------
Net asset value, end of period ..................................... $11.24 $ 9.76
====== ======
Total return ....................................................... 32.93%* (4.39)%*
Ratio to average net assets:
Expenses, before reimbursement or waiver ....................... 3.07%* 3.51%*
Expenses, net of reimbursement or waiver ....................... 2.53%* 1.75%*
Net investment loss, before reimbursement or waiver ............ (0.82%)* (1.24)%*
Net investment income (loss) ................................... (0.28%)* 0.52%*
Portfolio turnover rate ............................................ 159.38% 40.22%*
Average commissions paid on equity security transactions** ......... $0.01 -
Net assets at end of period (000's omitted) ........................ $20,357 $8,936
<FN>
*Annualized
**In accordance with recent SEC disclosure guidelines, average commissions are
calculated for the current period and not for the prior period.
</FN>
</TABLE>
8
<PAGE>
(RIGHT COLUMN)
The Lexington Group of
No Load Investment Companies
Lexington Worldwide Emerging Markets Fund, Inc.-Seeks long-term growth of
capital primarily through investment in equity securities of companies domiciled
in, or doing business in, emerging countries and emerging markets.
Lexington Troika Dialog Russia Fund, Inc.-Seeks long term capital appreciation
through investments primarily in equity securities of Russian companies.
Lexington Global Fund, Inc.-Seeks long-term growth of capital primarily through
investment in common stocks of companies domiciled in foreign countries and the
United States.
Lexington International Fund, Inc.-Seeks long-term growth of capital through
investment in companies domiciled in foreign countries.
Lexington Crosby Small Cap Asia Growth Fund, Inc.-Seeks long-term capital
appreciation through investment in companies domiciled in the Asia Region with a
market capitalization of less than $1 billion.
Lexington Ramirez Global Income Fund-Seeks high current income. Capital
appreciation is a secondary objective. The Fund invests in a combination of
foreign and domestic high-yield, lower rated debt securities.
Lexington Goldfund, Inc.-Seeks capital appreciation through investment in gold
bullion and shares of gold mining companies.
Lexington Growth and Income Fund, Inc.-Seeks capital appreciation over the
long-term through investments in the stocks of large, ably managed and well
financed companies.
Lexington Corporate Leaders Trust Fund-Seeks capital growth and reasonable
income through investment in an equal number of shares of an established list of
American blue chip corporations.
Lexington SmallCap Value Fund, Inc.-Seeks long-term capital appreciation through
investment in common stocks of companies domiciled in the United States with a
market capitalization of less than $1 billion.
Lexington Convertible Securities Fund-Seeks total return by providing capital
appreciation, current income and conservation of capital through investments in
a diversified portfolio of securities convertible into shares of common stock.
Lexington GNMA Income Fund, Inc.-Seeks to achieve a high level of current
income, consistent with liquidity and safety of principal, through investment
primarily in mortgage-backed GNMA ("Ginnie Mae") certificates that are
guaranteed as to the timely payment of principal and interest by the United
States Government.
Lexington Money Market Trust-Seeks a high level of current income consistent
with preservation of capital and liquidity through investments in interest
bearing short-term money market instruments.
Lexington Tax Free Money Fund, Inc.-Seeks current income exempt from Federal
income taxes while maintaining stability of principal, liquidity and
preservation of capital.
For more complete information about any of the Lexington Funds and a prospectus
which includes management fee and expenses call the distributor toll-free at
1-800-526-0056. Read the prospectus carefully before you invest or send money.
(LEFT COLUMN)
LEXINGTON
INVESTOR SERVICES
- -------------------------------------------------------------------------------
As a Lexington shareholder, you should be aware of the many services available
to you.
No Load-The Lexington Funds are no load funds. That is, investments and
redemptions are made without any sales charges, commissions or redemption fees.
--------------
Free Telephone Exchange-Investments in the Lexington Funds may be exchanged for
shares of a different Lexington Fund at any time.
--------------
Check Writing Privileges-Lexington Money Market Trust and Lexington Tax Free
Money Fund permit investors immediate access to their funds with check writing
for withdrawals from their account.
--------------
Tax Sheltered Plans-IRA, Keogh, Pension, and Profit Sharing Prototype Plans are
available to qualified individuals. These plans offer investment flexibility
through the Share Exchange Service, simplified record keeping, convenience and
investment supervision.
--------------
Custodial Accounts for Minors-Investments may be made on behalf of minors under
the Uniform Gifts to Minors Act currently in effect in all states.
--------------
Systematic Withdrawal Plan-An investor may elect to receive a fixed amount from
his or her account each month or quarter, subject to certain minimums.
--------------
Complete Record Keeping-A statement is provided for every transaction in
addition to a year-end statement with tax information.
9
<PAGE>
Left Column
Lexington
Crosby Small Cap Asia Growth Fund, Inc.
Investment Adviser
- -------------------------------------------------------
LEXINGTON MANAGEMENT CORPORATION
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
Sub-Adviser
- -------------------------------------------------------
CROSBY ASSET MANAGEMENT (US), INC.
c/o Crosby Asset Management (Hong Kong) Limited
27th Floor, Two Pacific Place
88 Queensway
Hong Kong
Distributor
- -------------------------------------------------------
LEXINGTON FUNDS DISTRIBUTOR, INC.
P.O. Box 1515
Park 80 West Plaza Two
Saddle Brook, New Jersey 07663
-----------------------------------------
All shareholder requests for services of
any kind should be sent to:
Transfer Agent
-----------------------------------------
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
-----------------------------------------
- -------------------------------------------------------
(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
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This report has been prepared for the information of the shareholders of
Lexington Crosby Small Cap Asia Growth 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.
Right Column
LEXINGTON
LEXINGTON
CROSBY
SMALL CAP
ASIA GROWTH
FUND, INC.
(filled box)
Seeks long-term capital
appreciation through investment
in companies domiciled in the Asia
Region with a market capitalization
of less than $1 billion.
(filled box)
SEMI-ANNUAL REPORT
JUNE 30, 1996
The Lexington Group
of No Load
Investment Companies
