DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
Lexington Crosby Small Cap Asia Growth Fund declined by 29.18%* for the
six month period ended June 30, 1998 as compared to the unmanaged Morgan Stanley
Capital International All Country Far East ex-Japan index over the same period
which declined by 33.0%. The average Asia fund as reported by Lipper Analytical
Services, Inc. declined by 23.69%.
Bourses in Southeast Asia suffered again in the second quarter of the
year, adversely affected by a combination of continuing regional deflation,
social unrest in Indonesia, and the growing signs of a rapid deterioration in
Japan's economy. The pressure on the Yen against the U.S. Dollar sparked fears
that further significant declines will undermine recovery in the Asian economies
and trigger further instability in their currencies.
Among the countries that the Fund invests in, Thailand suffered the most
during the quarter, with share prices shedding 41.8% and the Baht losing 7.9%,
as economic woes deepened and investors worried about the recapitalization of
the country's banking sector. Malaysia shed 34.5% and the Ringgit lost 12.6%
clouded by a rise in policy risk and concerns over instability in the banking
system as the economy heads for a hard landing. Korea was down 34.4%, but the
Won remained steady despite the fall in the Yen. The Singapore bourse lost 32.8%
and the currency weakened 17.0%, with the currency easing 4.3%, as the result of
uncertainties in the electronics sector.
The Australian stock market, which had been relatively resilient since
the onset of Asia's financial crisis, fell 2.8% as earnings continue to be
downgraded in the wake of the regional turmoil. The Australian Dollar
depreciated 6.5% during the quarter, broadly consistent with the falls in
commodity prices and the Japanese Yen.
ECONOMIC OUTLOOK AND STRATEGY
During the quarter, the cash level of the Fund was raised to 18.0%, from
12.6% at the end of the March quarter. This was achieved through sales of
investments in Australia, Hong Kong, Malaysia, China and Singapore.
The recent financial crisis should spell the end of the era of
over-investment in Asia. The system is currently undergoing a major adjustment
phase, which focuses on the gradual deleveraging of balance sheets and cost
deflation, rather than through a sharp turnaround in demand. The recession in
Japan is a major drag on demand recovery in the region. Decisive action to
tackle Japan's chronic banking crisis and weak domestic demand is clearly
imperative. Japan accounts for between 12%-20% of Asia's exports. It is also a
major competitor within the region. Imports from the region have fallen
substantially 10.4% year-on-year for Thailand, 13.8% for Singapore, 21.4% for
Malaysia and 28.0% for Indonesia in the three months ended April 1998.
Unless economic growth in Japan recovers in the near term, which is
unlikely, export growth for Southeast Asia is expected to remain anemic for the
remainder of this year. The demand for Asian exports is therefore highly
dependent on continuing consumption in the US, and a recovery materializing in
Europe. Beijing's efforts to boost China's domestic demand through a combination
of infrastructure spending, private sector construction, and further monetary
easing, is still to bear fruit. Finally, the tapering off in electronics demand
will pose an added strain on Southeast Asian exports, given the region's high
reliance on the sector. Singapore and Malaysia are particularly vulnerable to
adverse trends in the electronics cycle.
1
<PAGE>
Meanwhile, both the governments and corporations in the region are
actively seeking to restore their liquidity balance. The following has been
evident throughout Asia:
1. Capital expenditure has been dramatically reduced.
2. Manufacturers have shortened their receivable days and slowed
production to reduce inventory levels.
3. Banks have shortened the tenure of their asset base to expand interest
margins and tightened their lending policies to improve the quality of
their loan portfolio.
4. Property developers have acted swiftly to liquidate their projects to
repay expensive debts.
All of the above acts, which restore cash flow, will inevitably cause a
short-term contraction in GDP, but should allow the economies to come out of the
current crisis with stronger fundamentals. With a less leveraged corporate
sector and more stable banks, earnings volatility would fall, paving the way for
an upward re-rating in the future.
We continue to believe that as long as the Yen does not weaken
significantly further, the Renminbi will not be substantially devalued in the
near term, and hence set off a further round of competitive devaluation.
Conditions for reduced currency volatility are now being gradually established,
as the governments in the regions recognize that the stabilization of exchange
rates remains the top policy priority. External trade balances have recorded
impressive surpluses--an annualized 10% of GDP for Thailand, 13% for Malaysia
and nearly 30% for Indonesia. The banking system has stopped providing new
credit, which will eventually shrink the supply of currency. Therefore, it is
not inconceivable that currencies in the region will stabilize, and some initial
lowering of interest rates by the end this year or early next year should be
evident across the region.
In terms of strategy, the Fund has overweight positions in China, Korea
and Thailand. We will continue to target quality, fundamentally attractive,
well-managed stocks in Asia, which are focusing on the creation of shareholder
value in the longer term.
Sincerely,
/s/Christina Lam /s/Simon C.N. Thompson /s/Robert M. DeMichele
- ---------------- ---------------------- ----------------------
Christina Lam Simon C.N. Thompson Robert M. DeMichele
Portfolio Manager Portfolio Manager President
August, 1998 August, 1998 August, 1998
*-64.74 and -20.59 are the one year and since commencement (7/3/95) average
annual standard total returns, respectively, for the period ended June 30, 1998.
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 and is not predictive of
future results.
2
<PAGE>
LEXINGTON CROSBY SMALL CAP ASIA GROWTH FUND, INC.
STATEMENT OF NET ASSETS
(INCLUDING THE PORTFOLIO OF INVESTMENTS)
June 30, 1998 (unaudited)
NUMBER OF VALUE
SHARES SECURITY (NOTE 1)
- --------------------------------------------------------------------------------
COMMON STOCKS: 81.7%
AUSTRALIA: 5.3%
205,000 National Foods, Ltd. ............................. $ 350,370
194,000 Prime Television, Ltd. ........................... 284,717
----------
635,087
----------
CHINA: 12.3%
1,470,000 China Shipping Development
Company, Ltd.1 ................................ 166,947
638,600 Shandong Chenming Paper
Holdings, Ltd.1 ............................... 264,141
2,700,000 Shanghai Petrochemical Company, Ltd. ............. 303,152
1,479,000 Shanghai Tyre & Rubber
Company, Ltd.1 ................................ 239,598
300,000 Shenzhen Fangda Company, Ltd.1 ................... 221,460
2,500,000 Yizheng Chemical Fibre Company, Ltd.1 ............ 274,244
----------
1,469,542
----------
HONG KONG: 28.2%
200,000 Cheung Kong Infrastructure Holdings .............. 378,134
1,300,000 China Foods Holdings, Ltd. ....................... 343,934
850,000 China Resources Beijing Land ..................... 274,244
230,000 China Telecom (Hong Kong)1 ....................... 399,235
756,000 Founder Hong Kong, Ltd. ......................... 321,969
350,000 Guangdong Kelon Electrical
Holdings Company, Ltd. ........................... 275,535
62,000 Hutchison Whampoa, Ltd. .......................... 327,260
167,000 New World Development
Company, Ltd. ................................. 323,285
145,000 Shanghai Industrial Holdings, Ltd. ............... 341,514
440,000 Tianjin Development Holdings, Ltd.1 .............. 374,779
----------
3,359,889
----------
MALAYSIA: 4.0%
676,000 IJM Corporation Bhd1 ............................. 179,289
440,000 Technology Resources Industries Bhd1 ............. 302,351
----------
481,640
----------
PHILIPPINES: 0.9%
3,354,000 Asian Terminals, Inc.1 ........................... $ 112,604
----------
SINGAPORE: 8.9%
1,286,000 Informatics Holdings, Ltd.1 ...................... 293,054
1,165,000 MMI Holdings, Ltd.1 .............................. 234,451
122,000 Overseas Union Bank, Ltd. ........................ 267,183
39,108 Singapore Press Holdings, Ltd. ................... 261,572
----------
1,056,260
----------
SOUTH KOREA: 8.4%
12,800 Nong Shim Company, Ltd.1 ......................... 553,765
22,800 Youngone Corporation1 ............................ 446,700
----------
1,000,465
----------
TAIWAN: 10.9%
160,000 China Development Corporation1 ................... 370,192
225,000 Delpha Construction Company, Ltd.1 ............... 294,670
168,000 Taiwan Liton Electronic Company, Ltd. ............ 337,364
140,650 Taiwan Semiconductor
Manufacturing Company1 ........................... 290,629
----------
1,292,855
----------
THAILAND: 2.8%
1,735,000 Krung Thai Bank Public Company, Ltd.1 ............ 229,692
113,500 Thai Farmers Bank Public
Company, Ltd.1 ............................... 99,950
----------
329,642
----------
TOTAL INVESTMENTS: 81.7%
(cost $16,451,692 )(Note 1) ................... 9,737,984
Other assets in excess
of liabilities:18.3% .......................... 2,182,429
-----------
TOTAL NET ASSETS: 100.0%
(equivalent to $5.00 per share on
2,383,133 shares outstanding) ................. $11,920,413
===========
1 Non-income producing security.
+ Aggregate cost for Federal income tax purposes is $16,480,212.
----------------------
At June 30, 1998, the composition of the Fund's net assets by industry
concentration was as follows:
Banking .......................................... 5.0%
Capital Equipment ................................ 2.7
Construction &Housing ............................ 4.7
Consumer Durable Goods ........................... 4.3
Consumer Nondurable Goods ........................ 13.4
Electrical & Electronics ......................... 7.2
Financial Services ............................... 2.7
Materials ........................................ 12.7
Multi-Industry ................................... 3.1
Real Estate ...................................... 7.5
Services ......................................... 11.1
Telecommunications ............................... 5.9
Transportation ................................... 1.4
Other assets ..................................... 18.3
-----
Total Net Assets ............................... 100.0%
======
The Notes to Financial Statements are an integral part of this statement.
3
<PAGE>
LEXINGTON CROSBY SMALL CAP ASIA GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998 (unaudited)
ASSETS
Investments, at value (cost $16,451,692) (Note 1) ............ $ 9,737,984
Cash ......................................................... 2,054,984
Due from Lexington Management Corporation (Note 2) ........... 6,049
Receivable for shares sold ................................... 126,939
Dividends and interest receivable ............................ 49,817
Deferred organization expense, net (Note 1) .................. 29,200
-----------
Total Assets .................................... 12,004,973
-----------
LIABILITIES
Payable for shares redeemed .................................. 65,480
Accrued expenses ............................................. 19,080
-----------
Total Liabilities ............................... 84,560
-----------
NET ASSETS (equivalent to $5.00 per share on 2,383,133
shares outstanding) (Note 3) ............................. $11,920,413
===========
NET ASSETS consist of:
Capital stock--authorized 1,000,000,000 shares,
$.001 par value per share .................................. $ 2,383
Additional paid-in capital ................................... 26,820,127
Accumulated deficit .......................................... (64,686)
Accumulated net realized loss on investments
and foreign currency transactions .......................... (8,123,703)
Unrealized depreciation on investments and
foreign currency holdings .................................. (6,713,708)
-----------
TOTAL NET ASSETS ................................ $11,920,413
===========
The Notes to Financial Statements are an integral part of this statement.
4
<PAGE>
LEXINGTON CROSBY SMALL CAP
ASIA GROWTH FUND, INC.
STATEMENT OF OPERATIONS
Six months ended June 30, 1998 (unaudited)
INVESTMENT INCOME
Dividends ........................................ $ 160,271
Interest ......................................... 36,606
-----------
196,877
Less: foreign tax expense ........................ 4,623
-----------
Total investment income .................. $ 192,254
EXPENSES
Investment advisory fee (Note 2) .............. 99,769
Transfer agent and shareholder
servicing expenses (Note 2) ................. 27,536
Custodian expenses ............................ 19,748
Registration fees ............................. 18,144
Printing and mailing expenses ................. 16,247
Professional fees ............................. 8,929
Directors' fees and expenses .................. 7,991
Accounting expenses (Note 2) .................. 7,403
Amortization of deferred organization
costs (Note 1) .............................. 5,745
Computer processing fees ...................... 3,794
Other expenses ................................ 4,474
-----------
Total expenses .............................. 219,780
Less: expenses recovered
under contract with investment
adviser (Note 2) ............................ 20,234 199,546
------------ -----------
Net investment loss ...................... (7,292)
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 4)
Net realized loss on:
Investments .............................. (5,473,426)
Foreign currency
transactions ........................... (52,137)
-----------
Net realized loss ...................... (5,525,563)
Net change in unrealized
depreciation on:
Investments ................................. 632,422
Foreign currency translation of
other assets and liabilities .............. 368
------------
Net change in unrealized
depreciation ............................. 632,790
-----------
Net realized and unrealized loss ....... (4,892,773)
-----------
DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS ...................... $(4,900,065)
===========
LEXINGTON CROSBY SMALL CAP
ASIA GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997
------------- ------------
Net investment loss .................... $ (7,292) $ (103,305)
Net realized loss from
investments and foreign
currency transactions ............... (5,525,563) (2,260,494)
Net change in unrealized
depreciation on investments
and foreign currency translations ... 632,790 (11,521,491)
----------- -----------
Decrease in net assets
resulting from
operations ................... (4,900,065) (13,885,290)
Increase in net assets from capital
share transactions (Note 3) ......... 2,953,616 3,955,680
----------- -----------
Net decrease in net assets ..... (1,946,449) (9,929,610)
NET ASSETS:
Beginning of period ................. 13,866,862 23,796,472
----------- -----------
End of period (including
accumulated deficit of $64,686
and $57,394, 1998 and 1997,
respectively) ..................... $11,920,413 $13,866,862
=========== ===========
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, 1998 (unaudited) and December 31, 1997
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 Securities 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 prices. 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. There were no forward
foreign exchange contracts outstanding at June 30, 1998.
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 Dividends from net investment income and net realized capital
gains are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. 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, 1997,
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, 1998 (unaudited) And December 31, 1997 (continued)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
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. For 1998, LMC has 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 2.50%
of the Fund's average net assets. Total reimbursement was $20,234 for the six
months ended June 30, 1998, and is set forth in the statement of operations.
The Fund also reimburses LMC for certain expenses, including accounting and
shareholder servicing costs of $15,217 which are incurred by the Fund, but
paid by LMC.
3. CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
Six months ended
June 30, 1998 Year ended
(unaudited) December 31, 1997
-------------------- --------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold ........................................ 3,354,443 $22,198,317 6,779,615 $83,723,229
Shares redeemed .................................... (2,936,558) (19,244,701) (6,757,851) (79,767,549)
--------- ---------- --------- ----------
Net increase ....................................... 417,885 $ 2,953,616 21,764 $3,955,680
========= =========== ========= ==========
</TABLE>
4. PURCHASES AND SALES OF INVESTMENT SECURITIES
The cost of purchases and proceeds from sales of securities for the six months
ended June 30, 1998, excluding short-term securities, were $16,979,429 and
$15,968,985 respectively.
At June 30, 1998, the aggregate gross unrealized appreciation for all securities
in which there is an excess of value over tax cost amounted to $268,525 and
aggregate gross unrealized depreciation for all securities in which there is an
excess of tax cost over value amounted to $7,010,753.
7
<PAGE>
LEXINGTON CROSBY SMALL CAP ASIA GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998 (unaudited) And December 31, 1997 (continued)
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.
8
<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
Year ended (commencement
Six months ended December 31, of operations) to
June 30, 1998 ------------------------ December 31,
(unaudited) 1997 1996 1995
---------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................ $ 7.06 $ 12.24 $ 9.76 $10.00
------- ------- ------- ------
Income (loss) from investment operations:
Net investment income (loss) ................................ -- (0.05) (0.05) 0.02
Net realized and unrealized gain (loss)
on investments and
foreign currency transactions .......................... (2.06) (5.13) 2.54 (0.24)
------- ------- ------- ------
Total income (loss) from
investment operations .................................. (2.06) (5.18) 2.49 (0.22)
------- ------- ------- ------
Less distributions:
Distributions from net
investment income ...................................... -- -- -- (0.02)
Distributions in excess of
net investment income
(temporary book-tax difference) .......................... -- -- (0.01) --
------- ------- ------- ------
Net asset value, end of period .................................. $ 5.00 $ 7.06 $ 12.24 $ 9.76
------- ------- ------- ------
Total return .................................................... (50.13)%* (42.32)% 25.50% (4.39)%*
Ratio to average net assets:
Expenses, before reimbursement
or waivers ................................................ 2.75%* 2.30% 2.64% 3.51%*
Expenses, net of reimbursement
or waivers ................................................ 2.50%* 2.30% 2.42% 1.75%*
Net investment loss, before
reimbursement or waivers .................................. (0.34)%* (0.32)% (0.86)% (1.24)%*
Net investment income (loss) ................................ (0.09)%* (0.32)% (0.64)% 0.52%*
Portfolio turnover rate ......................................... 234.55%* 187.41% 176.49% 40.22%*
Average commissions paid on equitysecurity transactions** ....... -- $ 0.005 -- --
Net assets, end of period (000's omitted) ....................... $11,920 $13,867 $23,796 $8,936
======= ======= ======= ======
</TABLE>
* Annualized.
** The average commission paid on equity security transactions for the six
months ended June 30, 1998 and for the year ended December 31, 1996 was less
than $0.005 per share of securities purchased and sold. In accordance with
SEC disclosure guidelines, the average commissions paid on equity security
transactions are calculated for the periods beginning with the year ended
December 31, 1996, but not for prior periods.
9
<PAGE>
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 permits 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.
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 GLOBAL CORPORATE LEADERS 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 TROIKA DIALOG RUSSIA FUND, INC.--Seeks long-term capital appreciation
through investments primarily in the equity securities of Russian companies.
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 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.
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.
*Redemptions on shares of Lexington Troika Dialog Russian Fund, Inc. held less
than 365 days are subject to a redemption fee of 2% of the redemption proceeds.
10
<PAGE>
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
32/F Asia Pacific Finance Tower
Citibank Plaza
3 Garden Road, Central 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 o Account Balances o Exchanges o
Last Transactions o Total Return o Duplicate Statements
- --------------------------------------------------------------------------------
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
currentlyeffective prospectus which sets forth expenses and other material
information.
LEXINGTON
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.
SEMI-ANNUAL REPORT
JUNE 30, 1998
The Lexington Group
of No Load
Investment Companies
