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SIGNATURE PETER CORNIOTES
TITLE ASSISTANT SECRETARY
KPMG Peat Marwick LLP
345 Park Avenue
New York, NY 10154
The Board of Directors and Shareholders
Lexington Strategic Investments Fund:
In planning and performing our audit of the financial statements of
the Lexington Strategic Investments Fund for the year ended June 30,
1996, we considered its internal control structure, including
procedures for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form N-SAR,
not to provide assurance on the internal control structure.
The management of Lexington Strategic Investments Fund is responsible
for establishing and maintaining an internal control structure. In
fulfilling this responsibility, estimates and judgments by management
are required to assess the expected benefits and related costs of
internal control structure policies and procedures. Two of the
objectives of an internal control structure are to provide management
with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and
transactions are executed in accordance with management's authorization
and recorded properly to permit preparation of financial statements in
conformity with generally accepted accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and may not be detected. Also,
projection of any evaluation of the structure to future periods is
subject to the risk that it may become inadequate because of changes
in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure
that might be material weaknesses under standards established by the
American Institute of Certified Public Accountants. A material
weakness is a condition in which the design or operation of the
specific internal control structure elements does not reduce to a
relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving the
internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined
above as of June 30, 1996.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
/s/ KPMG Peat Marwick LLP
New York, New York
August 1, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
The Schedule contains summary financial information extracted from annual
audited financial statements dated June 30, 1996 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 51,911,055
<INVESTMENTS-AT-VALUE> 56,486,278
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</TABLE>
