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ANCHOR
CAPITAL
ACCUMULATION
TRUST
ANNUAL REPORT
DECEMBER 31, 1996
<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
Assets:
Investments at quoted market value (cost $7,814,439;
see Schedule of Investments, Notes 1, 2, & 5)....... $11,839,351
Cash ................................................ 529,544
Dividends and interest receivable.................... 11,110
Other assets......................................... 2,033
-----------
Total assets..................................... 12,382,038
-----------
Liabilities:
Payable for capital shares redeemed.................. 256
Accrued expenses and other liabilities (Note 3 )..... 28,466
-----------
Total liabilities................................ 28,722
-----------
Net Assets:
Capital stock (unlimited shares authorized at $1.00 par
value, 7,671,922
amount paid in on 469,703 shares outstanding) (Note 1)
Accumulated undistributed net investment income...... 1,026,944
Accumulated realized loss from security transactions,
net.......................................................(370,462)
Net unrealized appreciation in value of investments
(Note 2)............................................. 4,024,912
-----------
Net assets (equivalent to $26.30 per share, based
on 469,703 capital shares outstanding)............. $12,353,316
===========
<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
STATEMENT OF OPERATIONS
DECEMBER 31, 1996
Income:
Dividends........................................... $105,646
Interest............................................ 88,074
-----------
Total income..................................... 193,720
-----------
Expenses:
Management fees, net (Note 3)....................... 91,717
Pricing and bookkeeping fees (Note 4)............... 12,500
Legal fees.......................................... 8,000
Audit and accounting fees........................... 10,000
Trustees' fees and expenses......................... 3,000
Transfer fees (Note 4).............................. 4,087
Custodian fees...................................... 1,000
Other expenses...................................... 3,889
-----------
Total expenses................................... 134,193
-----------
Net investment income................................ 59,527
-----------
Realized and unrealized gain on investments:
Realized gain on investments-net................... 302,080
Increase in net unrealized appreciation in investments 1,322,968
-----------
Net gain on investments.......................... 1,625,048
===========
Net increase in net assets resulting from operations. $1,684,575
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<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
December 31, December 31,
1996 1995
----------------------------
From operations:
Net investment income................... $ 59,527 $ 95,890
Realized gain on investments, net....... 302,080 103,278
Increase in net unrealized
appreciation in investments............ 1,322,968 1,577,424
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Net increase in net assets resulting
from operations..................... 1,684,575 1,776,592
------------ -----------
Distributions to shareholders:
From net investment income
($0.13 per share in 1996 and $0.19 (59,676) (99,642)
per share in 1995).......................
From net realized gain on investments
($0.09 per share in 1996 and $0.62 (42,766) (325,178)
per share in 1995).......................
------------ -----------
Total distributions to shareholders.. (102,442) (424,820)
------------ -----------
From capital share transactions:
Number of Shares
1996 1995
--------- ---------
Proceeds from sale of
shares.............. 14,010 136,220 337,104 2,954,044
Shares issued to
share-
holders in 101,117 423,429
distributions 3,844 18,474
reinvested..........
Cost of shares (87,492) (7,599) (2,099,429) (171,022)
redeemed..............--------- ------- ---------- --------
Increase (decrease)
in net assets resulting
from capital share
transactions........... (69,638) 147,095 (1,661,208) 3,206,451
========= ========= ------------ -----------
Net increase (decrease) in net assets.... (79,075) 4,558,223
Net assets:
Beginning of period.................... 12,432,391 7,874,168
============= ============
End of period (including undistributed
net investment income of $1,026,944 and
$1,027,094, respectively).......... $12,353,316 $12,432,391
============= ============
<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
SELECTED PER SHARE DATA AND RATIOS
(for a share outstanding throughout each period)
Year Ended December 31,
1996 1995 1994 1993 1992
-----------------------------------------------
Investment income.... $ 1.33 $ (1.17) $ 3.49 $ 0.05 $ 0.29
Expenses, net........ 0.92 (0.64) 2.10 0.03 0.17
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Net investment income 0.41 (0.53) 1.39 0.02 0.12
(loss)...............
Net realized and
unrealized
gain (loss) on
investments.......... 3.06 4.32 (1.72) (0.47) 1.60
Distributions to
shareholders:
From net investment
income............. (0.13) (0.19) (0.23) (0.17) (0.31)
From net realized
gain on investments.. (0.09) (0.62) (0.04) (2.11) (2.48)
----------------------------------------------
Net increase(decrease)
in net asset value... 3.25 2.98 (0.60) (2.73) (1.07)
Net asset value:
Beginning of period. 23.05 20.07 20.67 23.40 24.47
==============================================
End of period....... $26.30 $23.05 $20.07 $20.67 $23.40
==============================================
Ratio of expenses to
average net assets.. 1.10% 1.11% 1.10% 1.10% 1.08%
Ratio of net
investment income
to average net assets... 0.49% 0.92% 0.73% 0.65% 0.73%
Portfolio turnover... 0.21 0.40 0.63 0.84 0.74
Number of shares out-
standing at end of
period............... 469,703 539,341 392,246 702,040 643,571
<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
Value
Quantity (Note 1)
COMMON STOCKS -- 83.86%
Advertising Industry -- 2.33%
6,000 The Interpublic Group of Companies Incorporated $ 288,000
Canadian Energy Industry -- 8.24%
15,000 Renaissance Energy Limited..................... 514,800
15,000 Talisman Energy Limited.......................
502,800
----------
1,017,600
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Chemicals, Basic -- 4.86%
11,000 Amgen Incorporated............................. 600,875
----------
Chemicals, Diversified -- 5.19%
25,000 Pall Corporation............................... 640,616
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Computer Industry -- 3.35%
8,000 Hewlett-Packard Company........................ 414,000
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Coal/Alternate Energy Industry -- 4.01%
15,000 CalEnergy Company Incorporated................. 495,000
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Drug Industry -- 6.86%
17,000 Biochem Pharma, Incorporated................... 847,875
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Electrical Equipment Industry --4.80%
6,000 Emerson Electric Company....................... 592,500
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Food and Beverage Industry -- 4.74%
11,500 J.M. Smucker Company Class A................... 202,688
9,647 Tootsie Roll Industries, Incorporated.......... 383,468
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586,156
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<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1996
(Continued)
Value
Quantity (Note 1)
Food Wholesalers Industry -- 2.17%
8,000 Sysco Corporation.............................. 268,000
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Funeral Services Industry -- 3.68%
16,000 Service Corporation International.............. 454,000
----------
Industrial Services Industry -- 5.02%
20,000 Equifax, Incorporated.......................... 620,000
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Insurance (Diversified) Industry -- 5.32%
6,000 American International Group Incorporated...... 657,750
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Life Insurance Industry -- 5.35%
15,375 AFLAC, Incorporated............................ 661,125
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Medical Supplies Industry -- 12.65%
12,000 Abbott Laboratories............................ 622,500
12,000 Fresenius Medical Care Incorporated, ADR....... 337,500
20,000 Stryker Corporation............................ 602,500
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1,562,500
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Office Equipment & Supplies Industry -- 2.83%
10,000 Wallace Computer Services Incorporated......... 350,000
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Oilfield Sevices/Equipment Industry -- 2.46%
3,000 Schlumberger Limited........................... 303,750
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Total common stocks (cost $6,334,835).......... 10,359,747
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U.S. TREASURY BILLS -- 11.98%.
$1,500,00Treasury Bill, 5.01% yield, maturing 2/27/97 1,479,604
(at cost)...................................... ----------
Total investments (cost $7,814,439)............ 11,839,351
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CASH & OTHER ASSETS, LESS LIABILITIES -- 4.16%.......... 513,965
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Total Net Assets............................... $12,353,316
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<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. Significant accounting policies:
Anchor Capital Accumulation Trust, a Massachusetts business trust (the "Trust"),
is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end investment management company. The following is a
summary of significant accounting policies followed by the Trust which are in
conformity with those generally accepted in the investment company industry.
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 revenues and expenses during the reporting period.
Actual results could differ from those estimates. A. Investment securities--
Security transactions are recorded
on the date the investments are purchased or sold. Each day, at noon,
securities traded on national security exchanges are valued at the last sale
price on the primary exchange on which they are listed, or if there has been
no sale by noon, at the current bid price. Other securities for which market
quotations are readily available are valued at the last known sales price,
or, if unavailable, the known current bid price which most nearly represents
current market value. Temporary cash investments are stated at cost, which
approximates market value. Dividend income is recorded on the ex-dividend
date and interest income is recorded on the accrual basis. Gains and losses
from sales of investments are calculated using the "identified cost" method
for both financial reporting and federal income tax purposes.
B. Income Taxes-- The Trust has elected to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and
to distribute each year all of its taxable income to its shareholders. No
provision for federal income taxes is necessary since the Trust intends to
qualify for and elect the special tax treatment afforded a "regulated
investment company" under subchapter M of the Internal Revenue Code.
C. Capital Stock-- The Trust records the sales and redemptions
of its capital stock on trade date.
2. Tax basis of investments:
At December 31, 1996, the total cost of investments for federal income tax
purposes was identical to the total cost on a financial reporting basis.
Aggregate gross unrealized appreciation in investments in which there was an
excess of market value over tax cost was $4,049,950. Aggregate gross
unrealized depreciation in investments in which there was an excess of tax
cost over market value was $25,038. Net unrealized appreciation in
investments at December 31, 1996 was $4,024,912.
3. Investment advisory service agreements:
The investment advisory contract with Anchor Investment Management
Corporation (the "investment adviser") provides that the Trust will pay the
adviser a fee for investment advice based on 3/4 of 1% per annum of average
daily net assets. At December 31, 1996, investment advisory fees of $7,801
were due which were included in "Accrued expenses and other liabilities" in
the accompanying Statement of Assets and Liabilities. David Y. Williams, a
Trustee of the Trust, is President and a Director of the Investment Adviser.
<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
(Continued)
4. Certain transactions:
Anchor Investment Management Corporation provides transfer agent services for
the Trust. Fees earned by Anchor Investment Management Corporation for
transfer agent services for the year ended December 31, 1996 were $4,087.
Certain officers and trustees of the Trust are directors and/or officers of
the investment adviser and distributor. Meeschaert & Co., Inc. the Trust's
distributor, received $8,725 in brokerage commissions during the the year
ended December 31, 1996. Fees earned by Anchor Investment Management
Corporation for expenses related to daily pricing of the Trust shares and for
bookkeeping services for the the year ended December 31, 1996 were $12,500.
5. Purchases and sales:
Aggregate cost of purchases and the proceeds from sales and maturities on
investments for the year ended December 31, 1996 were:
Cost of securities acquired:
U.S. Government and investments backed by
such securities........................... $5,429,279
Other investments....................... 2,127,194
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$7,556,473
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Proceeds from sales and maturities:
U.S. Government and investments backed by
such securities........................... $ 7,112,408
Other investments....................... 2,514,029
=============
$ 9,626,437
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<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Trustees of Anchor Capital
Accumulation Trust:
We have audited the accompanying statement of assets and liabilities of Anchor
Capital Accumulation Trust (a Massachusetts business trust), including the
schedule of investments, as of December 31, 1996, the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the selected per share data
and ratios for each of the five years in the period then ended. These financial
statements and per share data and ratios are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and per share data and ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and per share data
and ratios are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and selected per share data and ratios
referred to above present fairly, in all material respects, the financial
position of Anchor Capital Accumulation Trust as of December 31, 1996, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the selected per share
data and ratios for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
LIVINGSTON & HAYNES, P.C.
Wellesley, Massachusetts,
January 17, 1997.
<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
OFFICERS AND TRUSTEES
DAVID W.C. PUTNAM Chairman
Chairman, Board of Directors, F.L. Putnam and Trustee
Investment Management Corporation
President and Director, F.L. Putnam
Securities Company Incorporated
J. STEPHEN PUTNAM Vice President and
President, Robert Thomas Securities Treasurer
SPENCER H. LE MENAGER Secretary
President, Equity Inc. and Trustee
MAURICE A. DONAHUE Trustee
Director and Professor, Institute for
Governmental Services and
Walsh-Saltonstall Professor of Practical
Politics, University of Massachusetts
DAVID Y. WILLIAMS President
President and Director, Meeschaert & Co., and Trustee
Inc.,
President and Director, Anchor Investment
Management Corporation
<PAGE>
ANCHOR CAPITAL ACCUMULATION TRUST
INVESTMENT ADVISER AND TRANSFER AGENT
Anchor Investment Management Corporation
2717 Furlong Rd., Doylestown, Pennsylvania 18901
(215) 794-2980
DISTRIBUTOR
Meeschaert & Co., Inc.
2717 Furlong Rd., Doylestown, Pennsylvania 18901
CUSTODIAN
Investors Bank & Trust Company
89 South Street, Boston, Massachusetts 02111
INDEPENDENT PUBLIC ACCOUNTANT
Livingston & Haynes, P.C.
40 Grove St., Wellesley, Massachusetts 02181
LEGAL COUNSEL
Yukevich, Blume, Marchetti & Zangrilli
One Gateway Center, Pittsburgh, Pennsylvania 15222
