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ANCHOR
CAPITAL
ACCUMULATION
TRUST
ANNUAL REPORT
JUNE 30, 1998
(Unaudited)
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ANCHOR CAPITAL ACCUMULATION TRUST
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STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
(Unaudited)
Assets:
Investments at quoted market value (cost $8,647,500 ;
see Schedule of Investments, Notes 1, 2, & 5)................. $14,394,807
Cash ......................................................... 23,084
Dividends and interest receivable.............................. 10,857
Other assets................................................... 1,769
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Total assets.............................................. 14,430,517
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Liabilities:
Payable for capital shares redeemed............................ 90,485
Accrued expenses and other liabilities (Note 3 )............... 23,009
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Total liabilities......................................... 113,494
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Net Assets:
Capital stock (unlimited shares authorized at $1.00 par value,
amount paid in on 452,231 shares outstanding) (Note 1)........ 7,168,206
Accumulated undistributed net investment income (Note 1)....... 1,038,605
Accumulated realized gain from security transactions, net (Note 1) 362,905
Net unrealized appreciation in value of investments (Note 2)... 5,747,307
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Net assets (equivalent to $31.66 per share, based on
452,231 capital shares outstanding)...................... $14,317,023
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ANCHOR CAPITAL ACCUMULATION TRUST
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STATEMENT OF OPERATIONS
JUNE 30, 1998
(Unaudited)
Income:
Dividends..................................................... $ 51,601
Interest...................................................... 32,583
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Total income.............................................. 84,184
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Expenses:
Management fees, net (Note 3)................................. 52,212
Pricing and bookkeeping fees (Note 4)......................... 7,032
Legal fees.................................................... 4,399
Audit and accounting fees..................................... 3,498
Custodian fees................................................ 1,575
Trustees' fees and expenses................................... 1,499
Transfer fees (Note 4)........................................ 2,249
Other expenses................................................ 3,055
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Total expenses............................................ 75,519
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Net investment income.......................................... 8,665
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Realized and unrealized gain on investments:
Realized gain on investments-net............................. 733,383
Increase in net unrealized appreciation in investments....... 543,727
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Net gain on investments................................... 1,277,110
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Net increase in net assets resulting from operations........... $ 1,285,775
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ANCHOR CAPITAL ACCUMULATION TRUST
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STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
June 30, 1998 December 31,
(Unaudited) 1997
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From operations:
Net investment income........................... $ 8,665 $ 36,588
Realized gain on investments, net............... 733,383 352,026
Increase in net unrealized
appreciation in investments.................... 543,727 1,178,668
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Net increase in net assets resulting
from operations............................ 1,285,775 1,567,282
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Distributions to shareholders:
From net investment income
($0.07 per share in 1997)................... -- (33,607)
From net realized gain on investments
($0.79 per share in 1997).................... -- (352,026)
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Total distributions to shareholders......... -- (385,633)
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From capital share transactions:
Number of Shares
1998 1997
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Proceeds from sale of
shares.................. 16 14,010 492 174,800
Shares issued to share-
holders in distributions
reinvested.............. -- 381,819
-- 3,844
Cost of shares redeemed.. (9,036) (87,492) (278,932) (781,896)
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Decrease in net
assets resulting from
capital (9,020) (69,638) (278,440) (225,277)
share transactions......
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Net increase (decrease) in net assets............ 1,007,335 956,372
Net assets:
Beginning of period............................ 13,309,688 12,353,316
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End of period (including undistributed
net investment income of $1,038,605 and
$1,029,940, respectively).................. $ 14,317,023 $ 13,309,688
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ANCHOR CAPITAL ACCUMULATION TRUST
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CONSOLIDATED SELECTED PER SHARE DATA AND RATIOS
(for a share outstanding throughout each period)
Six Months
Ended
June 30, Year Ended December 31,
1998
(Unaudited) 1997 1996 1995 1994
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Investment income........ $ 0.62 $ 0.59 $ 1.33 $ (1.17) $ 3.49
Expenses, net............ 0.56 0.47 0.92 (0.64) 2.10
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Net investment income
(loss)................... 0.06 0.12 0.41 (0.53) 1.39
Net realized and
unrealized
gain (loss) on
investments.............. 2.74 3.30 3.06 4.32 (1.72)
Distributions to
shareholders:
From net investment
income................ 0.00 (0.07) (0.13) (0.19) (0.23)
From net realized gain
on investments........ 0.00 (0.79) (0.09) (0.62) (0.04)
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Net increase (decrease)
in net asset value...... 2.80 2.56 3.25 2.98 (0.60)
Net asset value:
Beginning of period..... 28.86 26.30 23.05 20.07 20.67
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End of period........... $31.66 $28.86 $26.30 $23.05 $20.07
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Ratio of expenses to
average net assets...... 1.07% 1.15% 1.10% 1.11% 1.10%
Ratio of net investment
income to average net
assets................... 0.12% 0.28% 0.49% 0.92% 0.73%
Portfolio turnover....... 0.19 0.04 0.21 0.40 0.63
Average commission rate
paid..................... 0.0622 0.0800 0.0650 0.0400 0.0606
Number of shares out-
standing at end of period 452,231 461,251 469,703 539,341 392,246
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SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(Unaudited)
Value
Quantity (Note 1)
COMMON STOCKS -- 95.61%
Advertising Industry -- 3.85%
9,000 Interpublic Group Of Companies Incorporated..............$ 550,692
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Airline Industry -- 2.91%
5,000 AMR Corporation.......................................... 416,875
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Banking Industry -- 3.04%
7,000 Bank of New York Company Incorporated.................... 435,750
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Computer & Peripherals Industry -- 8.27%
7,500 Cisco Systems Incorporated............................... 695,625
8,000 Hewlett Packard Company.................................. 488,000
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1,183,625
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Computer Software & Services Industry -- 4.99%
8,000 Baan Company NV.......................................... 287,000
16,000 Parametric Technology Corporation........................ 428,000
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715,000
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Diversified Companies Industry -- 4.95%
16,000 Service Corporation International........................ 709,008
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Drug Industry -- 7.25%
11,000 Amgen Incorporated....................................... 723,250
12,500 Genzyme Corporation...................................... 314,850
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1,038,100
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Electrical Equipment Industry -- 5.03%
12,000 Emerson Electric Company................................. 720,756
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Food Processing Industry -- 5.81%
10,234 Tootsie Roll Industries Incorporated..................... 831,512
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Food Wholesalers Industry -- 2.85%
16,000 Sysco Corporation........................................ 408,000
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SCHEDULE OF INVESTMENTS
JUNE 30, 1998
(Unaudited)
(Continued)
Value
Quantity (Note 1)
Industrial Services Industry -- 5.15%
20,000 Equifax Incorporated..................................... 737,500
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Insurance (Diversified) Industry -- 8.98%
9,000 American International Group Incorporated................ 1,285,875
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Insurance (Life) Industry -- 6.69%
30,750 Aflac Incorporated....................................... 957,094
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Medical Supplies Industry -- 19.28%
24,000 Abbott Laboratories...................................... 990,000
20,000 Fresenius Medical Care Incorporated...................... 417,500
8,000 Johnson & Johnson........................................ 592,000
20,000 Stryker Corporation...................................... 761,260
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2,760,760
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Office Equipment & Supplies Industry -- 3.69%
10,000 Staples Incorporated..................................... 293,750
10,000 Wallace Computer Services Incorporated................... 234,380
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528,130
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Oilfield Services/Equipment Industry -- 2.87%
6,000 Schlumberger Limited..................................... 410,628
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Total common stocks (cost $7,941,998)....................13,689,305
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U.S. TREASURY BILLS -- 4.93%.
$715,000 Treasury Bill, 4.93% yield, maturing 08/06/98 (at cost).. 705,502
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Total investments (cost $8,647,500)......................14,394,807
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CASH & OTHER ASSETS, LESS LIABILITIES -- (0.54)%................. (77,784)
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Total Net Assets.........................................$14,317,023
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
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. Options are valued in the same manner.
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. Income
and capital gains distributions are determined in accordance with federal
tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences
are permanent, such amounts are reclassified within the capital accounts
based on their federal tax basis treatment; temporary differences do not
require such reclassification.
C. Capital Stock-- The Trust records the sales and redemptions of its
capital stock on trade date.
2. Tax basis of investments:
At June 30, 1998, 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 $6,089,540. Aggregate gross
unrealized depreciation in investments in which there was an excess of tax
cost over market value was $342,233. Net unrealized appreciation in
investments at June 30, 1998 was $5,747,307.
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
(Unaudited)
(Continued)
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 June 30, 1998, investment advisory fees of $8,421 were
due and 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.
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 six months ended June 30, 1998 were $2,249.
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 $9,830 in brokerage commissions during the six months
ended June 30, 1998. Fees earned by Anchor Investment Management Corporation
for expenses related to daily pricing of the Trust shares and for bookkeeping
services for the six months ended June 30, 1998 were $7,032.
5. Purchases and sales:
Aggregate cost of purchases and the proceeds from sales and maturities on
investments for six months ended June 30, 1998 were:
Cost of securities acquired:
U.S. Government and investments backed by such
securities......................................... $ 2,614,847
Other investments................................ 2,649,508
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$ 5,264,335
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Proceeds from sales and maturities:
U.S. Government and investments backed by such
securities......................................... $ 2,601,610
Other investments................................ 2,420,030
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$ 5,021,640
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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
ERNIE BUTLER Trustee
President, I.E. Butler Securities
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., Inc., and Trustee
President and Director, Anchor Investment
Management Corporation
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INVESTMENT ADVISER, ADMINISTRATOR AND TRANSFER AGENT
Anchor Investment Management Corporation
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
(508) 831-1171
DISTRIBUTOR
Meeschaert & Co., Inc.
579 Pleasant St., Suite 4, Paxton, Massachusetts 01612
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
Thorp Reed & Armstrong
One Riverfront Center, Pittsburgh, Pennsylvania 15222
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