[ ASTRA LOGO ]
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUSTS SEMI-ANNUAL REPORT
June 20, 1996
Dear Shareholder:
The Trusts' performance during the past six months was heavily influenced by
real and expected changes in U.S. interest rates, mortgage prepayments, and
mortgage defaults. The Trusts' fiscal year began in the midst of the U.S.
Federal Reserve's attempt to stimulate economic growth through decreases in the
Fed Funds rate. As a result, both short-term and long-term interest rates
dropped. However, beginning in late December 1995, long-term interest rates
began to rise as investors' perception of future economic growth increased in
conjunction with concerns of rising inflation brought about by an increase in
the price of gold as well as other commodities. During the six months ended
April 30, 1996, the U.S. two year treasury yield increased from 5.61% to 5.98%,
an increase of 37 basis points, while the U.S. thirty year treasury yield
increased from 6.33% to 6.84%, an increase of 51 basis points. Additionally,
during the last month of 1995, the Trusts were somewhat hampered by credit and
default risk on the balance of single-family, subordinated mortgage securities
in the portfolio primarily backed by Southern California real estate.
The Astra family of funds continues its recovery from a turbulent two year
period which saw its funds impacted by unforeseen events such as rapid changes
in U.S. interest rates, a prolonged recession of the California economy, and the
devaluation of the Mexican Peso. Since late 1995, we have attempted to improve
the performance of all Astra funds by focusing on a core holding of securities
which management believes offer less price volatility while still providing
relatively attractive returns. Over the last six months, the Adjustable U.S.
Government Securities Trusts have improved their performance relative to the
past two years. The Trust has improved its NAV stability by investing in
higher-quality agency issues. As previously mentioned in past correspondence,
the Investment Committee ('the Committee'), led by new members, completed an
exhaustive review of all subordinated mortgage securities held in the portfolio.
Upon identifying those particular securities which the Committee believed might
cause additional credit and/or default problems in the future, the Committee
implemented a liquidation process designed to maximize retention of shareholder
value. At this point, the majority of subordinated mortgage securities held by
the Trusts are multi-family mortgages located in New York and New Jersey. The
liquidation process was completed in December 1995.
Currently, the Committee plans to take advantage of the relatively stable price
performance of annually resetting adjustable-rate Agency mortgages. However, as
the Trusts have experienced an increase in the rate of redemptions, a portion of
its assets will be invested in short-term U.S. government securities which has
the effect of reducing yield.
On behalf of Astra, we want to thank you for giving us the opportunity to help
you achieve your financial goals and objectives.
Sincerely,
Astra Management Corporation
- ------------------
Astra Adjustable U.S. Government Securities Trusts invest all investable assets
in the Astra Institutional Adjustable U.S. Government Securities Portfolio. The
Portfolio seeks to achieve its investment objective by investing at least 65% of
its assets in adjustable-rate mortgage (ARM) securities which are issued or
guaranteed by the U.S. Government, its agencies or instrumentalities ('U.S.
Government Mortgage Securities'). The Portfolio invests the remainder of its
assets generally in mortgage securities that are issued or sponsored by
commercial banks, savings and loan associations, mortgage bankers or other
financial institutions, that have no government guarantee and that are senior or
subordinated to other mortgage securities arising out of the same pool of
mortgages ('Multi-Class Residential Mortgage Securities'). The portion of assets
invested in Subordinated Residential Mortgage Securities may entail greater risk
than the portion invested in senior Mortgage Securities or U.S. Government
Mortgage Securities.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE. INVESTMENT RETURN AND THE
PRINCIPAL VALUE OF AN INVESTMENT IN THE TRUST WILL FLUCTUATE. SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
<PAGE>
TABLE OF CONTENTS
- ------------------------------
ASTRA ADJUSTABLE U.S GOVERNMENT SECURITIES TRUST I
Statement of Assets and Liabilities................................... 3
Statement of Operations............................................... 3
Statement of Changes in Net Assets.................................... 4
Financial Highlights.................................................. 5
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I-A
Statement of Assets and Liabilities................................... 6
Statement of Operations............................................... 6
Statement of Changes in Net Assets.................................... 7
Financial Highlights.................................................. 8
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST II
Statement of Assets and Liabilities................................... 9
Statement of Operations............................................... 9
Statement of Changes in Net Assets.................................... 10
Financial Highlights.................................................. 11
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST IV
Statement of Assets and Liabilities................................... 12
Statement of Operations............................................... 12
Statement of Changes in Net Assets.................................... 13
Financial Highlights.................................................. 14
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUSTS
Notes to Financial Statements......................................... 15
ASTRA INSTITUTIONAL ADJUSTABLE U.S. GOVERNMENT SECURITIES PORTFOLIO
Portfolio of Investments.............................................. 20
Statement of Assets and Liabilities................................... 21
Statement of Operations............................................... 21
Statement of Changes in Net Assets.................................... 22
Financial Highlights.................................................. 23
Notes to Financial Statements......................................... 24
- ------
2
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- --------------------------------
<TABLE>
ASSETS:
<S> <C>
Investments in securities at value* (identified cost $79,829,915) (Notes 1, 2A and 3)........... $ 64,984,128
Dividends receivable from Portfolio............................................................. 399,260
Prepaid expenses................................................................................ 46,392
Other assets.................................................................................... 46,082
------------
Total Assets................................................................................ 65,475,862
------------
LIABILITIES:
Payable for capital stock redeemed.............................................................. 429,601
Accrued expenses................................................................................ 209,771
------------
Total Liabilities........................................................................... 639,372
------------
NET ASSETS........................................................................................ $ 64,836,490
------------
------------
Net asset value per share ($64,836,490/11,857,346 shares) (Note 6)................................ $ 5.47
============
At April 30, 1996 the components of net assets were as follows:
Paid-in capital................................................................................. $145,050,943
Accumulated net realized loss on investments.................................................... (65,195,539)
Accumulated net investment deficit.............................................................. (173,127)
Net unrealized depreciation of investments...................................................... (14,845,787)
------------
Net Assets.................................................................................. $ 64,836,490
============
</TABLE>
- ------------------
* Investments of Astra Adjustable U.S. Government Securities Trust I consist
entirely of 843,502 shares of Astra Institutional Adjustable Rate Securities
Portfolio. Cost for Federal income tax purposes is $79,829,915. See Notes 1
and 2A.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
INVESTMENT INCOME:
<S> <C>
INCOME:
Dividends from Portfolio...................................................................... $ 2,712,420
--------------
EXPENSES:
Distribution expenses (Note 4A)............................................................... 395,774
Shareholder servicing costs................................................................... 161,000
Insurance expense............................................................................. 47,780
Administrative servicing costs (Note 5)....................................................... 39,577
Professional fees............................................................................. 38,587
Amortization of organization expense (Note 2D)................................................ 17,099
Reports to shareholders....................................................................... 15,288
Trustees' fees................................................................................ 13,638
Registration fees............................................................................. 11,180
Miscellaneous expense......................................................................... 4,197
--------------
Total expenses.............................................................................. 744,120
--------------
Net investment income.................................................................... 1,968,300
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments.............................................................. (8,019,877)
Net change in unrealized depreciation of investments.......................................... 6,614,147
--------------
Net loss on investments..................................................................... (1,405,730)
--------------
Net increase in net assets resulting from operations..................................... $ 562,570
==============
</TABLE>
See Notes to Trusts' Financial Statements
- ------
3
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
OPERATIONS:
<S> <C> <C>
Net investment income...................................................... $ 1,968,300 $ 6,883,140
Net realized loss on investments........................................... (8,019,877) (40,720,703)
Net change in unrealized depreciation of investments....................... 6,614,147 13,232,526
---------------- ----------------
Net increase (decrease) in net assets resulting from operations............ 562,570 (20,605,037)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($0.144 and $0.254 per share,
respectively)............................................................ (2,141,427) (7,287,333)
Distributions from paid-in capital ($0.037 per share)...................... -- (1,050,656)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets derived from the net change in the number of
outstanding shares (a)................................................... (28,498,527) (185,528,148)
---------------- ----------------
Total decrease in net assets........................................... (30,077,384) (214,471,174)
Net assets at the beginning of the period.................................... 94,913,874 309,385,048
---------------- ----------------
NET ASSETS at the end of period (including accumulated net investment deficit
of $173,127 and $0, respectively).......................................... $ 64,836,490 $ 94,913,874
================ ===============
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 (UNAUDITED) OCTOBER 31, 1995
----------------------------- --------------------------------
SHARES VALUE SHARES VALUE
------------ --------------- -------------- ----------------
<S> <C> <C> <C> <C>
Shares sold.................................... 50,656 $ 282,006 168,878 $ 965,700
Shares issued in reinvestment of distributions
to shareholders.............................. 199,585 1,104,919 755,068 4,387,623
Shares repurchased............................. (5,401,615) (29,885,452) (32,491,157) (190,881,471)
------------ --------------- -------------- ----------------
Net decrease................................. (5,151,374) $ (28,498,527) (31,567,211) $ (185,528,148)
============ =============== ============== ================
</TABLE>
See Notes to Trusts' Financial Statements
------
4
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
FEBRUARY 21,
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, 1991* TO
APRIL 30, 1996 ----------------------------------------------------- OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992 1991
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning
of period................ $ 5.580 $ 6.370 $ 7.150 $ 7.290 $ 7.370 $ 7.350
-------- --------- --------- --------- --------- ------------
Income (loss) from
investment operations--
Net investment income.... 0.129 0.246 (c) 0.270 0.364 0.850 0.400
Net realized and
unrealized
gain (loss) on
investments............ (0.095) (0.745)(c) (0.715) (0.055) 0.007 0.030
-------- --------- --------- --------- --------- ------------
Total from investment
operations......... 0.034 (0.499) (0.445) 0.309 0.857 0.430
-------- --------- --------- --------- --------- ------------
Less distributions--
Distributions from net
investment income...... 0.144 0.254 0.321 0.418 0.850 0.400
Distributions from
paid-in capital........ -- 0.037 0.014 0.031 0.087 0.010
-------- --------- --------- --------- --------- ------------
Total
distributions...... 0.144 0.291 0.335 0.449 0.937 0.410
-------- --------- --------- --------- --------- ------------
Net asset value, end of
period................... $ 5.470 $ 5.580 $ 6.370 $ 7.150 $ 7.290 $ 7.370
TOTAL RETURN (D)........... 0.61% (8.28%) (6.43%) 4.34% 6.55% 8.79%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)........... $ 64,836 $ 94,914 $ 309,385 $ 675,810 $ 783,527 $ 385,195
Ratio to average net
assets--
Expenses................. 1.88%(a)(b) 1.55%(b) 1.22%(b) 1.29%(b) 1.32%(b) 1.88%(a)
Net investment income.... 4.97%(a) 4.28% 3.92% 4.91% 6.57% 7.43%(a)
Portfolio turnover rate.... 3% 3% 3% 3% 8% 107%
</TABLE>
- ------------------
* Commencement of operations
(a) Annualized
(b) Ratio of expenses to average net assets excludes 0.88%(a), 0.86%, 0.62%,
0.61% and 0.64%(a), respectively, of expenses of the Portfolio, which
reduced dividends paid to Trust I.
(c) Based upon average shares outstanding throughout the period.
(d) Calculated without the deduction of sales charges
See Notes to Trusts' Financial Statements
- ------
5
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I-A
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
ASSETS:
<S> <C>
Investments in securities at value* (identified cost $58,712,917) (Notes 1, 2A and 3)............ $ 47,275,876
Receivable for capital stock subscribed.......................................................... 2,000
Dividends receivable from Portfolio.............................................................. 288,588
Deferred organization expense (net of accumulated amortization of $77,096) (Note 2D)............. 10,221
Prepaid expenses................................................................................. 27,610
------------
Total Assets................................................................................. 47,604,295
------------
LIABILITIES:
Payable for capital stock redeemed............................................................... 140,477
Accrued expenses................................................................................. 170,787
------------
Total Liabilities............................................................................ 311,264
------------
NET ASSETS......................................................................................... $ 47,293,031
============
Net asset value per share ($47,293,301/8,610,205 shares) (Note 6).................................. $ 5.49
============
At April 30, 1996 the components of net assets were as follows:
Paid-in capital.................................................................................. $ 96,426,438
Accumulated net realized loss on investments..................................................... (37,577,763)
Accumulated net investment deficit............................................................... (118,603)
Net unrealized depreciation of investments....................................................... (11,437,041)
------------
Net Assets................................................................................... $ 47,293,031
============
</TABLE>
- ------------------
* Investments of Astra Adjustable U.S. Government Securities Trust I-A consist
entirely of 613,647 shares of Astra Institutional Adjustable U.S. Government
Securities Portfolio. Cost for Federal income tax purposes is $58,712,917.
See Notes 1 and 2A.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
INVESTMENT INCOME:
<S> <C>
INCOME:
Dividends from Portfolio....................................................................... $ 1,920,584
-----------
EXPENSES:
Distribution expenses (Note 4A)................................................................ 280,215
Shareholder servicing costs.................................................................... 99,459
Insurance expense.............................................................................. 32,361
Administrative servicing costs (Note 5)........................................................ 28,022
Professional fees.............................................................................. 24,003
Trustees' fees................................................................................. 9,450
Registration fees.............................................................................. 8,897
Reports to shareholders........................................................................ 8,453
Amortization of organization expense (Note 2D)................................................. 7,121
Miscellaneous expense.......................................................................... 3,128
-----------
Total expenses............................................................................... 501,109
-----------
Net investment income..................................................................... 1,419,475
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments............................................................... (5,207,249)
Net change in unrealized depreciation of investments........................................... 4,199,820
-----------
Net loss on investments...................................................................... (1,007,429)
-----------
Net increase in net assets resulting from operations...................................... $ 412,046
============
</TABLE>
See Notes to Trusts' Financial Statements
- ------
6
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I-A
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 1,419,475 $ 4,301,319
Net realized loss on investments........................................... (5,207,249) (22,801,404)
Net change in unrealized depreciation of investments....................... 4,199,820 6,044,252
---------------- ----------------
Net increase (decrease) in net assets resulting from operations............ 412,046 (12,455,833)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($0.147 and $0.252 per share,
respectively)............................................................ (1,538,078) (4,521,595)
Distributions from paid-in capital ($0.033 per share)...................... -- (590,146)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets derived from the net change in the number of
outstanding shares (a)................................................... (17,461,561) (104,061,756)
---------------- ----------------
Total decrease in net assets........................................... (18,587,593) (121,629,330)
Net assets at the beginning of the period.................................... 65,880,624 187,509,954
---------------- ----------------
NET ASSETS at the end of the period (including accumulated net investment
deficit of $118,603 and $0, respectively).................................. $ 47,293,031 $ 65,880,624
=============== ===============
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 (UNAUDITED) OCTOBER 31, 1995
----------------------------- --------------------------------
SHARES VALUE SHARES VALUE
------------ --------------- -------------- ----------------
<S> <C> <C> <C> <C>
Shares sold.................................... 77,071 $ 432,030 519,411 $ 3,050,567
Shares issued in reinvestment of distributions
to shareholders.............................. 138,771 771,494 446,584 2,597,827
Shares repurchased............................. (3,359,842) (18,665,085) (18,589,063) (109,710,150)
------------ --------------- -------------- ----------------
Net decrease................................. (3,144,000) $ (17,461,561) (17,623,068) $ (104,061,756)
============ =============== ============== ================
</TABLE>
See Notes to Trusts' Financial Statements
- ------
7
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I-A
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
MAY 19, 1992
(COMMENCEMENT OF
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, OPERATIONS) TO
APRIL 30, 1996 ------------------------------------------ OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992
----------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of
period..................... $ 5.600 $ 6.380 $ 7.180 $ 7.310 $ 7.340
---------- ------- -------- -------- ---------
Income (loss) from investment
operations--
Net investment income . . . 0.133 0.246(e) 0.256 0.355 0.207
Net realized and unrealized
loss on investments...... (0.096) (0.741(e) (0.726) (0.041) (0.004
---------- ------- -------- -------- ---------
Total from investment
operations.......... 0.037 (0.495) (0.470) 0.314 0.203
---------- ------- -------- -------- ---------
Less distributions--
Distributions from net
investment income........ 0.147 0.252 0.308 0.410 0.207
Distributions from paid-in
capital.................. -- 0.033 0.022 0.034 0.026
---------- ------- -------- -------- ---------
Total distributions.... 0.147 0.285 0.330 0.444 0.233
---------- ------- -------- -------- ---------
Net asset value, end of
period..................... $ 5.490 $ 5.600 $ 6.380 $ 7.180 $ 7.310
========== ======= ======== ======== =========
TOTAL RETURN (f)............. 0.66% (7.79%) (6.77%) 4.53% 6.16%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)................. $47,293 $65,881 $187,510 $378,912 $ 220,256
Ratio to average net assets--
Expenses................... 1.79%(a)(b) 1.58%(b) 1.42%(b) 1.21%(b) 1.36%(a)(b)(c)
Net investment income...... 5.07%(a) 4.27% 3.68% 4.81% 5.59%(a)(d)
Portfolio turnover rate...... 4% 3% 3% 1% 0%
</TABLE>
- ------------------
(a) Annualized
(b) Ratio of expenses to average net assets excludes 0.88%(a), 0.86%, 0.62%,
0.61% and 0.64%(a), respectively, of expenses of the Portfolio, which
reduced dividends paid to Trust I-A.
(c) Ratio of expenses to average net assets prior to expense waivers was
1.39%(a).
(d) Ratio of net investment income to average net assets prior to expense
waivers was 5.56% (a).
(e) Based upon average shares outstanding throughout the period.
(f) Calculated without the deduction of sales charges.
See Notes to Trusts' Financial Statements
- ------
8
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST II
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
ASSETS:
<S> <C>
Investments in securities at value* (identified cost $4,465,343) (Notes 1, 2A and 3).............. $ 3,835,598
Dividends receivable from Portfolio............................................................... 23,585
Deferred organization expense (net of accumulated amortization of $81,470) (Note 2D).............. 10,965
Prepaid expenses.................................................................................. 3,943
------------
Total Assets.................................................................................. 3,874,091
------------
LIABILITIES:
Payable for capital stock redeemed................................................................ 11,594
Accrued expenses.................................................................................. 24,607
------------
Total Liabilities............................................................................. 36,201
------------
NET ASSETS.......................................................................................... $ 3,837,890
============
COMPUTATION OF OFFERING PRICE:
Net asset value and redemption price per share ($3,837,890/691,590 shares)........................ $ 5.55
============
Offering price per share (100/97 of $5.55) (a).................................................... $ 5.72
============
(a) On investments of $100,000 or more the offering price is reduced.
At April 30, 1996 the components of net assets were as follows:
Paid-in capital................................................................................... $ 8,726,662
Accumulated net realized loss on investments...................................................... (4,244,440)
Accumulated net investment deficit................................................................ (14,587)
Net unrealized depreciation of investments........................................................ (629,745)
------------
Net Assets.................................................................................... $ 3,837,890
============
</TABLE>
- ------------------
* Investments of Astra Adjustable U.S. Government Securities Trust II consist
entirely of 49,787 shares of Astra Institutional Adjustable U.S. Government
Securities Portfolio. Cost for Federal income tax purposes is $4,465,343. See
Notes 1 and 2A.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
INVESTMENT INCOME:
<S> <C>
INCOME:
Dividends from Portfolio........................................................................ $ 155,000
------------
EXPENSES:
Shareholder servicing costs..................................................................... 10,224
Amortization of organization expense (Note 2D).................................................. 9,305
Registration fees............................................................................... 6,782
Distribution expenses (Note 4B)................................................................. 5,670
Insurance expense............................................................................... 2,646
Professional fees............................................................................... 2,630
Administrative servicing costs (Note 5)......................................................... 2,269
Miscellaneous expense........................................................................... 902
Trustees' fees.................................................................................. 657
Reports to shareholders......................................................................... 621
------------
Total expenses................................................................................ 41,706
------------
Net investment income...................................................................... 113,294
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments................................................................ (313,448)
Net change in unrealized depreciation of investments............................................ 232,016
------------
Net loss on investments....................................................................... (81,432)
------------
Net increase in net assets resulting from operations....................................... $ 31,862
============
</TABLE>
See Notes to Trusts' Financial Statements
- ------
9
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST II
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 113,294 $ 320,624
Net realized loss on investments........................................... (313,448) (1,281,838)
Net change in unrealized depreciation of investments....................... 232,016 139,950
---------------- ----------------
Net increase (decrease) in net assets resulting from operations............ 31,862 (821,264)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($0.154 and $0.260 per share,
respectively)............................................................ (127,881) (339,005)
Distributions from paid-in capital ($0.042 per share)...................... -- (55,052)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets derived from the net change in the number of
outstanding shares (a)................................................... (1,199,664) (6,009,841)
---------------- ----------------
Total decrease in net assets........................................... (1,295,683) (7,225,162)
Net assets at the beginning of the period.................................... 5,133,573 12,358,735
---------------- ----------------
NET ASSETS at the end of the period (including accumulated net investment
deficit of $14,587 and $0, respectively)................................... $ 3,837,890 $ 5,133,573
================ ================
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 (UNAUDITED) OCTOBER 31, 1995
-------------------------- ----------------------------
SHARES VALUE SHARES VALUE
---------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
Shares sold............................................ 18,565 $ 103,547 68,732 $ 404,493
Shares issued in reinvestment of
distributions to shareholders........................ 16,028 90,077 45,988 270,443
Shares repurchased..................................... (248,301) (1,393,288) (1,119,210) (6,684,777)
---------- -------------- ------------ --------------
Net decrease......................................... (213,708) $ (1,199,664) (1,004,490) $ (6,009,841)
========== ============== ============ ==============
</TABLE>
See Notes to Trusts' Financial Statements
- ------
10
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
NOVEMBER 27, 1991
(COMMENCEMENT OF
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, OPERATIONS) TO
APRIL 30, 1996 -------------------------------------------- OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992
----------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period........................ $ 5.670 $ 6.470 $ 7.240 $ 7.320 $ 7.350
------- --------- --------- --------- ----------
Income (loss) from investment
operations--
Net investment income......... 0.133 0.251(e) 0.293 0.410 0.505
Net realized and unrealized
loss on investments......... (0.099) (0.749(e) (0.730) (0.044) (0.033)
------- --------- --------- --------- ----------
Total from investment
operations............. 0.034 (0.498) (0.437) 0.366 0.472
------- --------- --------- --------- ----------
Less distributions--
Distributions from net
investment income........... 0.154 0.260 0.303 0.415 0.502
Distributions from realized
gains on investments........ -- -- -- 0.003 --
Distributions from paid-in
capital..................... -- 0.042 0.030 0.028 --
------- --------- --------- --------- ----------
Total distributions....... 0.154 0.302 0.333 0.446 0.502
------- --------- --------- --------- ----------
Net asset value, end of period.. $ 5.550 $ 5.670 $ 6.470 $ 7.240 $ 7.320
======= ========= ========= ========= ==========
TOTAL RETURN (f)................ 0.60% (7.74%) (6.25%) 5.12% 7.13%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands).................... $ 3,838 $ 5,134 $ 12,359 $ 99,888 $ 88,901
Ratio to average net assets--
Expenses...................... 1.84%(a)(b) 1.57%(b) 0.76%(b) 0.51%(b) 0.57%(a)(b)(c)
Net investment income......... 5.00%(a) 4.27% 4.27% 5.57% 7.09%(a)(d)
Portfolio turnover rate......... 6% 7% 12% 79% 97%
</TABLE>
- ------------------
(a) Annualized
(b) Ratio of expenses to average net assets excludes 0.88%(a), 0.86%, 0.62%,
0.61% and 0.64%(a), respectively, of expenses of the Portfolio, which
reduced dividends paid to Trust II.
(c) Ratio of expenses to average net assets prior to expense waivers was
0.59%(a).
(d) Ratio of net investment income to average net assets prior to expense
waivers was 7.07%(a).
(e) Based upon average shares outstanding throughout the period.
(f) Calculated without the deduction of sales charges.
See Notes to Trusts' Financial Statements
- ------
11
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST IV
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
ASSETS:
<S> <C>
Investments in securities at value* (identified cost $2,586,738) (Notes 1, 2A and 3).............. $ 2,137,874
Dividends receivable from Portfolio............................................................... 12,917
Deferred organization expense (net of accumulated amortization of $31,535) (Note 2D).............. 21,210
Prepaid expenses.................................................................................. 7,468
------------
Total Assets.................................................................................. 2,179,469
------------
LIABILITIES:
Accrued expenses.................................................................................. 22,524
------------
NET ASSETS.......................................................................................... $ 2,156,945
============
Net asset value per share ($2,156,945/390,891 shares) (Note 6)...................................... $ 5.52
============
At April 30, 1996 the components of net assets were as follows:
Paid-in capital................................................................................... $ 6,768,690
Accumulated net realized loss on investments...................................................... (4,153,216)
Accumulated net investment deficit................................................................ (9,665)
Net unrealized depreciation of investments........................................................ (448,864)
------------
Net Assets.................................................................................... $ 2,156,945
============
</TABLE>
- ------------------
* Investments of Astra Adjustable U.S. Government Securities Trust IV consist
entirely of 27,750 shares of Astra Institutional Adjustable U.S. Government
Securities Portfolio. Cost for Federal income tax purposes is $2,586,738. See
Notes 1 and 2A.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
INVESTMENT INCOME:
<S> <C>
INCOME:
Dividends from Portfolio........................................................................ $ 84,301
------------
EXPENSES:
Distribution expenses (Note 4B)................................................................. 7,390
Registration fees............................................................................... 6,997
Amortization of organization expense (Note 2D).................................................. 5,249
Shareholder servicing costs..................................................................... 3,815
Professional fees............................................................................... 2,006
Insurance expense............................................................................... 1,629
Administrative servicing costs (Note 5)......................................................... 1,233
Reports to shareholders......................................................................... 1,131
Miscellaneous expense........................................................................... 767
Trustees' fees.................................................................................. 314
------------
Total expenses................................................................................ 30,531
------------
Net investment income...................................................................... 53,770
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments................................................................ (214,371)
Net change in unrealized depreciation of investments............................................ 169,437
------------
Net loss on investments....................................................................... (44,934)
------------
Net increase in net assets resulting from operations....................................... $ 8,836
============
</TABLE>
See Notes to Trusts' Financial Statements
- ------
12
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST IV
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 53,770 $ 197,855
Net realized loss on investments........................................... (214,371) (1,626,315)
Net change in unrealized depreciation of investments....................... 169,437 691,045
--------------- ---------------
Net increase (decrease) in net assets resulting from operations............ 8,836 (737,415)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($0.139 and $0.218 per share,
respectively)............................................................ (63,435) (208,389)
Distributions from paid-in capital ($0.087 per share)...................... -- (82,655)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets derived from the net change in the number of
outstanding shares (a)................................................... (659,100) (8,666,396)
--------------- ---------------
Total decrease in net assets........................................... (713,699) (9,694,855)
Net assets at the beginning of the period.................................... 2,870,644 12,565,499
--------------- ---------------
NET ASSETS at the end of the period (including accumulated net investment
deficit of $9,665 and $0, respectively).................................... $ 2,156,945 $ 2,870,644
============== ==============
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 (UNAUDITED) OCTOBER 31, 1995
-------------------------- ----------------------------
SHARES VALUE SHARES VALUE
---------- -------------- ------------ --------------
<S> <C> <C> <C> <C>
Shares sold............................................ -- $ -- 28,558 $ 169,566
Shares issued in reinvestment of
distributions to shareholders........................ 5,918 33,107 30,623 181,378
Shares repurchased..................................... (123,803) (692,207) (1,481,273) (9,017,340)
---------- -------------- ------------ --------------
Net decrease......................................... (117,885) $ (659,100) (1,422,092) $ (8,666,396)
========== ============== ============ ==============
</TABLE>
See Notes to Trusts' Financial Statements
- ------
13
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST IV
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
MAY 7, 1993
COMMENCEMENT OF
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, OPERATIONS) TO
APRIL 30, 1996 ---------------------- OCTOBER 31,
(UNAUDITED) 1995 1994 1993
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period......... $ 5.640 $ 6.510 $ 7.310 $ 7.350
------- --------- ----------- ----------
Income (loss) from investment operations--
Net investment income...................... 0.114 0.211 (e) 0.300 0.171
Net realized and unrealized loss on
investments.............................. (0.095) (0.776)(e) (0.764) (0.025)
------- --------- ---------- ----------
Total from investment operations....... 0.019 (0.565) (0.464) 0.146
------- --------- ---------- ----------
Less distributions--
Distributions from net investment
income................................... 0.139 0.218 0.302 0.172
Distributions from paid-in capital......... -- 0.087 0.034 0.014
------- --------- ---------- ----------
Total distributions.................... 0.139 0.305 0.336 0.186
------- --------- ---------- ----------
Net asset value, end of period............... $ 5.520 $ 5.640 $ 6.510 $ 7.310
------- --------- ---------- ----------
------- --------- ---------- ----------
TOTAL RETURN (f)............................. 0.33% (8.75%) (6.57%) 4.11% (a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $ 2,157 $ 2,871 $ 12,565 $ 78,145
Ratio to average net assets--
Expenses................................... 2.48% (a)(b) 2.19% (b)(c) 0.85% (b)(c) 0.45% (a)(b)(c)
Net investment income...................... 4.37% (a) 3.64% (d) 4.23% (d) 4.71% (a)(d)
Portfolio turnover rate...................... 3% 6% 21% 3%
</TABLE>
- ------------------
(a) Annualized
(b) Ratio of expenses to average net assets excludes 0.88%(a), 0.86%, 0.62% and
0.61%, respectively, of expenses of the Portfolio, which reduced dividends
paid to Trust IV.
(c) Ratio of expenses to average net assets prior to expense waivers were 2.22%,
1.06% and 0.76%(a), respectively.
(d) Ratio of net investment income to average net assets prior to expense
waivers were 3.61%, 4.02% and 4.40%(a), respectively.
(e) Based upon average shares outstanding throughout the period.
(f) Calculated without the deduction of sales charges.
See Notes to Trusts' Financial Statements
- ------
14
<PAGE>
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUSTS
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
NOTE 1--ORGANIZATION
Astra Strategic Investment Series (the 'Company') is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. On September 15, 1994 the Company's shareholders approved a change in
the Company's Declaration of Trust to permit the creation of additional classes
of shares of each of the Trust's series. Currently, the Company has authorized
an unlimited number of shares of beneficial interest without par value and at
April 30, 1996 offered a single class of shares in eight series: Astra
Adjustable Rate Securities Trust I, I-A, II and IV (collectively, the 'Astra
Adjustable Rate Securities Trusts'), Astra Adjustable U.S. Government Securities
Trust I, I-A, II and IV (collectively, the 'Astra Adjustable U.S. Government
Securities Trusts' or the 'Trusts'), all of which are non-diversified series.
The value of the Trusts' investment in shares of Astra Institutional Adjustable
U.S. Government Securities Portfolio (the 'Portfolio'), a non-diversified series
of Astra Institutional Securities Trust ('AIST'), reflects their proportionate
interest in the net assets of the Portfolio. The financial statements of the
Portfolio, including the portfolio of investments, are included in this report
and should be read in conjunction with the financial statements of the Trusts.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
A. SECURITY VALUATION. The investment policy of the Trusts is to invest in
shares of the Portfolio. Shares of the Portfolio held by the Trusts are
valued at the net asset value then determined by the Portfolio. A valuation
committee of the Board of Trustees of AIST is responsible for establishing
security valuation policies, reviewing the valuation of portfolio
securities, monitoring the level of illiquid securities and reviewing
liquidity determinations for securities held by the Portfolio. AIST
considers to be illiquid all securities which cannot be disposed of within
seven days in the ordinary course of business at approximately the amount
at which the Portfolio values the security. Additionally, interest rate
swap contracts, interest-only and principal-only mortgage backed
securities, and special hazard certificates are treated as illiquid
securities in accordance with Securities and Exchange Commission policy.
Liquid securities are valued primarily using prices provided by independent
pricing services which use prices provided by market-makers or estimates of
market values obtained from yield and other data relating to instruments or
securities with similar characteristics, and secondarily based upon market
quotations and/or other available information. Securities for which
reliable market information or pricing service quotes are not readily
available, including illiquid securities, are valued at fair value as
determined in good faith by, or under procedures established by, the Board
of Trustees of AIST, which procedures may include the delegation of certain
responsibilities regarding valuation to Astra Management Corporation (the
'Manager'). The Manager reports, as necessary, to the Trustees of AIST
regarding portfolio valuation determinations.
Short-term securities with less than sixty days remaining to maturity when
acquired by the Portfolio are valued on an amortized cost basis by the
Portfolio when the Trustees of AIST have determined that amortized cost is
fair value.
- ------
15
<PAGE>
B. FEDERAL INCOME TAXES. The Trusts intend to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and
to distribute all of their taxable income to their shareholders. Therefore,
no Federal income tax provision is required.
C. SECURITY TRANSACTIONS, INCOME AND DISTRIBUTIONS. As is common in the
industry, security transactions of the Portfolio and Trusts are accounted
for on the trade date. Interest income on adjustable rate mortgage
securities is recorded on the accrual basis at current interest rates.
Dividends to shareholders of the Portfolio from net investment income are
declared daily and paid or reinvested monthly. Dividends to Shareholders of
the Trusts from net investment income are declared and paid or reinvested
monthly. Prior to May 1, 1995 dividends to shareholders of the Trusts from
net investment income were declared daily and paid or reinvested monthly.
Discounts and premiums on Portfolio debt securities are amortized in
accordance with the provisions of the Internal Revenue Code.
D. DEFERRED ORGANIZATION EXPENSES. All of the expenses incurred in connection
with the organization of the Trusts are being borne ratably by the Trusts
and are being amortized on a straight-line basis over periods of five years
from the date of commencement of operations.
NOTE 3--INVESTMENTS
At April 30, 1996 the Portfolio held subordinated residential and derivative
mortgage securities which the Valuation Committee of the Board of Trustees of
AIST has determined to be illiquid. These securities are valued at $1,081,345
(representing 0.9% of the Portfolio's net assets). The fair value of these
securities is determined under procedures approved by the Board of Trustees of
AIST in the absence of readily ascertainable market values.
For the six months ended April 30, 1996 the cost of purchases and the proceeds
from sales of investments in the Portfolio were as follows:
<TABLE>
<S> <C> <C>
PURCHASES SALES
------------- --------------
Trust I............... $ 2,736,282 $ 31,595,986
Trust I-A............. 1,986,590 19,744,038
Trust II.............. 252,680 1,479,582
Trust IV.............. 84,437 846,003
</TABLE>
At October 31, 1995 the Trusts had capital loss carryforwards for federal income
tax purposes as follows:
<TABLE>
<S> <C> <C>
CAPITAL LOSS EXPIRES
CARRYFORWARD OCTOBER 31,
-------------- -------------
Trust I................. $ 534,000 1999
14,000 2000
7,926,000 2002
48,702,000 2003
--------------
$ 57,176,000
--------------
--------------
Trust I-A............... $ 4,253,000 2002
28,118,000 2003
--------------
$ 32,371,000
--------------
--------------
Trust II................ $ 2,284,000 2002
1,647,000 2003
--------------
$ 3,931,000
--------------
--------------
Trust IV................ $ 1,896,000 2002
2,043,000 2003
--------------
$ 3,939,000
--------------
--------------
</TABLE>
NOTE 4--DISTRIBUTION PLANS
A. TRUST I AND TRUST I-A DISTRIBUTION PLANS. Trust I and Trust I-A have
adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act (the
'Distribution Plans'), whereby they will provide daily compensation to
Astra Fund Distributors Corp., the Trusts' principal underwriter (the
'Principal Underwriter') in the form of sales commissions equal to 4% of
the amount received by Trust I for each share sold and 5% of the amount
received by Trust I-A for each share sold (excluding reinvestment of
dividends and distributions) plus an interest
- ------
16
<PAGE>
fee calculated by applying the rate of 1% over prime rate to the
outstanding balance of Uncovered Distribution Charges. Daily compensation
payments will be made monthly and are limited to an annual rate of 0.75% of
each Trust's daily net assets. During the six months ended April 30, 1996
the Principal Underwriter earned daily compensation of $296,831 from Trust
I and $210,161 from Trust I-A. At April 30, 1996 Uncovered Distribution
Charges (cumulative sales commissions and interest fees reduced by
cumulative daily compensation and contingent deferred sales charges paid to
the Principal Underwriter) were $11,299,858 for Trust I and $9,507,693 for
Trust I-A.
On August 5, 1994 the shareholders of Trust I and Trust I-A approved
changes to their respective distribution plans to provide a method by which
a proportionate amount of Uncovered Distribution Charges will be
transferred from the Trusts upon exchanges to other mutual funds for which
Astra Fund Distributions Corp. serves as Principal Underwriter and which
have substantially the same contingent deferred sales charge structure and
distribution plan.
Pursuant to the requirements of the Securities and Exchange Commission the
daily compensation (sales commission) payments to the Principal Underwriter
pursuant to the Distribution Plan must be reflected as operating expenses
of Trust I and Trust I-A. For periods through December 31, 1994 these
payments were treated as capital transactions and were not deducted for
Federal income tax purposes.
The Distribution Plans also provide for monthly payments to the Principal
Underwriter of a trail or maintenance fee in an amount equal to an annual
rate of 0.25% of the daily net assets of Trust I and Trust I-A. During the
six months ended April 30, 1996 the Principal Underwriter earned
maintenance fees of $98,943 from Trust I and $70,054 from Trust I-A.
B. TRUST II AND TRUST IV DISTRIBUTION PLANS. Trust II and Trust IV have
adopted distribution plans pursuant to rule 12b-1 under the 1940 Act (the
'Distribution Plans'), whereby Trust II may pay up to a maximum annual rate
of 0.25% of its average daily net assets and Trust IV may pay up to a
maximum annual rate of 0.60% of its average daily net assets to the
Principal Underwriter as reimbursement for expenses incurred in the
distribution of the shares of Trust II and Trust IV. Pursuant to the
Distribution Plans, the Principal Underwriter is entitled to reimbursement
each month (up to a maximum of 0.25% of Trust II's daily net assets and
0.60% of Trust IV's daily net assets) for its actual expenses incurred in
the distribution and promotion of Trust II's and Trust IV's shares,
including the printing of prospectuses used for sales purposes,
advertisements, expenses of preparation and printing of sales literature,
and other distribution related expenses, including any distribution or
service fees paid to security dealers and others who have executed a
distribution or service agreement with the Principal Underwriter. The
Distribution Plans provide that the Principal Underwriter may include as
distribution expenses a portion of its overhead expenses directly
attributable to the Distribution of Trust II's and Trust IV's shares,
including personnel and out-of-pocket costs. The Distribution Plans permit
the Principal Underwriter to carryforward for a maximum of three years
(without carrying charges) distribution expenses covered by the
Distribution Plans for which it has not yet received reimbursement. At
April 30, 1996, the Principal Underwriter had incurred $1,199,795 of
distribution expenses in excess of amounts currently reimbursable by Trust
II and $674,535 of distribution expenses in excess of amounts currently
reimbursable by Trust IV. During the six months ended April 30, 1996, the
Principal Underwriter received distribution expense reimbursements of
$5,670 from Trust II and
- ------
17
<PAGE>
$7,390 from Trust IV. Distribution expenses incurred by the Principal
Underwriter included $581 and $316 for the salaries and related costs of
certain of its employees involved in the sales of Trust II's and Trust IV's
shares, respectively.
NOTE 5-- INVESTMENT MANAGEMENT FEE AND OTHER
TRANSACTIONS WITH AFFILIATES
The Trusts invest substantially all of their assets in the Portfolio, which has
the same investment objective as each of the Trusts. The Trustees of AIST
establish the Portfolio's investment policies and supervise and review the
operations and management of the Portfolio. For furnishing the Portfolio with
investment advice and investment management and administrative services with
respect to the Portfolio's assets, including making specific recommendations as
to the purchase and sale of portfolio securities, furnishing requisite office
space and personnel, and in general supervising and managing the Portfolio's
investments subject to the ultimate supervision and direction of AIST's
Trustees, the Manager is paid monthly a fee equal to 0.55% per annum of the
first $500 million of average daily net assets of the Portfolio. The annual rate
is reduced to 0.50% on net assets from $500 million to $1 billion and to 0.45%
on net assets over $1 billion. The management fees paid by the Portfolio to the
Manager are expenses of the Portfolio and reduce the net investment income
available for distribution by the Portfolio to the Trusts. The Manager has
agreed to reimburse the Portfolio and Trusts to the extent required so that the
aggregate expenses do not exceed the expense limitations applicable under the
securities laws or regulations of those states or jurisdictions in which the
Trusts' shares are registered or qualified for sale. Currently, the most
restrictive of such expense limitations would require the Manager to reimburse
the Portfolio and Trusts to the extent required so that the Portfolio's and
Trust's expenses, as described above, for any fiscal year do not exceed 2.50% of
the first $30 million of average net assets, 2.00% of the next $70 million of
average net assets and 1.50% of the remaining average net assets. The amount of
any such required reimbursement, however, is limited to the management fees paid
by the Portfolio to the Manager. Expenses for purposes of these expenses
limitations include the management fee, but exclude distribution expenses,
brokerage commissions and fees, taxes, interest and extraordinary expenses such
as litigation paid or incurred by the Trusts or the Portfolio.
The Trusts have retained Atlas Holdings Group Inc. (the 'Administrator') to
provide administration for the Trusts pursuant to an administration agreement.
These administrative services include supervising the preparation and filing of
all documents required for compliance by the Trusts with applicable laws and
regulations, supervising the maintenance of books and records and other general
and administrative responsibilities. For providing these services the
Administrator receives a fee equal to 0.10% of each Trust's average daily net
assets.
Certain officers and trustees of the Company are also officers and/or
directors/trustees of AIST, the Administrator, the Manager, and the Principal
Underwriter.
NOTE 6--EARLY WITHDRAWAL CHARGES
Shares of Trust I, Trust I-A and Trust IV which are redeemed may be subject to a
contingent deferred sales charge. The contingent deferred sales charge is not
imposed on shares acquired through the reinvestment of dividends and
distributions or on the appreciation of the value of shares acquired over their
purchase price. Redemption proceeds are applied first against shares not subject
to the contingent deferred sales charge for purposes of calculating such charge.
The contingent deferred sales charges are paid by the redeeming shareholder to
the Principal Underwriter at the time of redemption. The contingent deferred
sales charges for Trust I and Trust I-A are imposed at the rate of 4% for
redemptions in the first year after purchase, declining to 3%, 2%, and 1% in the
second, third and fourth years, respectively. The contingent deferred sales
charges for Trust IV are imposed at the rate of 0.25% of redemptions within 3
months of the date of purchase. During the six months ended April 30, 1996 the
Principal
- ------
18
<PAGE>
Underwriter received contingent deferred sales charges of $75,927 from
redemptions of Trust I shares, $209,011 from redemptions of Trust I-A shares,
and $-0- from redemptions of Trust IV shares.
NOTE 7--LEGAL MATTERS
Between December 1994 and July 1995, various complaints have been filed by
certain shareholders of the Astra Adjustable U.S. Government Securities Trusts
and the Astra Adjustable Rate Securities Trusts (collectively, the 'Astra
Trusts') in the United States District Court for the Central District of
California and in the Superior Court for the State of California against the
Company and certain of its officers and trustees, AIST and certain of its
officers and trustees, Astra Management Corporation, Astra Fund Distributors
Corporation, and, Atlas Holdings Group Inc. and its principal stockholder and
certain of its employees. These complaints have been consolidated in the United
States District Court for the Central District of California in the matter
referred to as 'In re Pilgrim Securities Litigation.'
The complaints allege violations of the Securities Act of 1993 and the
Investment Company Act of 1940 relating principally to disclosure concerning
pricing and liquidity of portfolio securities held by the Portfolios of AIST.
The complaints seek relief measured by the consideration each shareholder paid
for shares of the Astra Trusts with interest thereon, less the amount of income
received thereon, or in the event the shareholder no longer owns such shares,
for damages, plus interest. Management of the Company believes the complaints
are without merit and intents, and has been advised that each of the other
defendants intends, to vigorously defend these actions. The ultimate outcome of
these matters, however, cannot presently be determined and accordingly the Astra
Trusts have made no provision for any losses which may result from settlement of
these complaints.
- ------
19
<PAGE>
ASTRA INSTITUTIONAL ADJUSTABLE U.S. GOVERNMENT SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS AS OF APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<CAPTION>
MARKET
PRINCIPAL INTEREST VALUE
AMOUNT RATE* MATURITY (NOTE 2A)
- ------------ --------- --------- -------------
<S> <C> <C> <C> <C>
ADJUSTABLE RATE MORTGAGE SECURITIES: 87.5%
U.S. GOVERNMENT AGENCY SECURITIES: 86.5%
$ 4,841,162 Federal Home Loan Mtge. Corp., Pool 845249............. 8.031% 11/01/22 $ 4,947,086
8,125,020 Federal National Mtge. Assoc., Pool 124666............. 7.711% 01/01/23 8,312,911
4,616,385 Federal National Mtge. Assoc., Pool 124862............. 7.353% 05/01/23 4,726,024
6,489,384 Federal National Mtge. Assoc., Pool 124870............. 7.376% 05/01/23 6,619,172
5,502,139 Federal National Mtge. Assoc., Pool 172905............. 6.650% 07/01/22 5,512,455
5,558,302 Federal National Mtge. Assoc., Pool 264864............. 7.494% 01/01/24 5,693,785
7,117,703 Government National Mtge. Assoc., Pool 8443............ 6.500% 06/20/24 7,202,226
4,677,097 Government National Mtge. Assoc., Pool 8730............ 7.500% 10/20/25 4,785,255
2,451,277 Government National Mtge. Assoc., Pool 8756............ 7.500% 11/20/25 2,507,963
9,826,863 Government National Mtge. Assoc., Pool 8770............ 6.500% 12/20/25 9,906,755
2,347,188 Government National Mtge. Assoc., Pool 8778............ 7.500% 12/20/25 2,401,467
6,760,334 Government National Mtge. Assoc., Pool 8790............ 6.000% 01/20/26 6,730,758
19,465,147 Government National Mtge. Assoc., Pool 8792............ 6.500% 01/01/26 19,562,473
7,812,201 Government National Mtge. Assoc., Pool 8793............ 7.000% 01/20/26 7,948,915
5,413,002 Government National Mtge. Assoc., Pool 8818............ 7.000% 01/20/26 5,507,730
-------------
Total U.S. Government Agencies......................... 102,364,975
-------------
SUBORDINATED RESIDENTIAL MORTGAGE SECURITIES: 1.0%
11,603,158(R) (I) Coast Federal Savings Bank 1991-1................ 1.551% 06/01/20 1,081,345
5,190,086(R) Coast Federal Savings Bank 1991-2, Class B-1......... 1.022% 11/25/21 5,177
15,975,236(R) Paine Webber Acceptance Corp 1991-1, Class B......... 0.854% 02/21/21 21,934
-------------
Total Subordinated Residential Mortgage
Securities....................................... 1,108,456
-------------
Total Adjustable Rate Mortgage Securities (Cost
$133,771,929).................................... 103,473,431
-------------
FIXED RATE MORTGAGE SECURITIES: 7.9%
SUBORDINATED RESIDENTIAL MORTGAGE SECURITIES: 7.9%
7,968,857(R) Citibank NA Multifamily 1992-1, Class B.............. 8.625% 04/20/00 4,621,300
7,771,780(R) USGI Capital Markets Group Inc, Multi Family 1992-1.. 8.500% 09/30/07 4,694,115
-------------
Total Fixed Rate Mortgage Securities (Cost
$12,944,005)..................................... 9,315,415
-------------
SHORT-TERM SECURITIES: 4.7%
U.S. GOVERNMENT AGENCY DISCOUNT NOTES: 4.7%
5,575,000 Federal Home Loan Mtge. Corp. (Cost $5,575,000)........ 5.300% 05/01/96 5,575,000
-------------
Total Investments in Securities
(Cost $152,290,934).............................. 100.1% 118,363,846
Liabilities in Excess of Other Assets-Net.............. (0.1%) (79,278)
--------- -------------
Total Net Assets....................................... 100.0% $ 118,284,568
--------- -------------
--------- -------------
</TABLE>
- ------------------
(R) Restricted securities (See Note 3).
(l) Illiquid securities
* Rates shown are as of April 30, 1996. Interest rates on adjustable rate
mortgage securities reset periodically.
** Cost for Federal income tax purposes is $152,290,934 and net unrealized
depreciation consists of:
<TABLE>
<S> <C> <C>
Gross Unrealized Appreciation........................................ $2,224
Gross Unrealized Depreciation........................................ (33,929,312)
--------------
Net Unrealized Depreciation.......................................... $(33,927,088)
--------------
--------------
</TABLE>
See Notes to Financial Statements
- ------
20
<PAGE>
ASTRA INSTITUTIONAL ADJUSTABLE U.S. GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities at value (identified cost $152,290,934) (Notes 2A and 3).............. $ 118,363,846
Cash............................................................................................ 3,158
Receivables:
Interest...................................................................................... 854,960
Principal repayments.......................................................................... 313,599
Securities sold............................................................................... 6,878,716
Deferred organization expense (net of accumulated amortization of $74,752) (Note 2E)............ 8,451
--------------
Total Assets................................................................................ 126,422,730
--------------
LIABILITIES:
Payable for securities purchased................................................................ 7,226,990
Accrued expenses................................................................................ 186,521
Distribution payable to Trusts.................................................................. 724,651
--------------
Total Liabilities........................................................................... 8,138,162
--------------
NET ASSETS........................................................................................ $ 118,284,568
--------------
--------------
Net asset value per share ($118,284,568/1,535,348 shares) (Note 6)................................ $ 77.04
--------------
--------------
At April 30, 1996 the components of net assets were as follows:
Paid-in capital................................................................................. $ 258,423,512
Accumulated net realized loss on investments.................................................... (106,324,256)
Undistributed net investment income............................................................. 112,400
Net unrealized depreciation of investments...................................................... (33,927,088)
--------------
Net Assets.................................................................................. $ 118,284,568
--------------
--------------
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
INCOME:
Interest...................................................................................... $ 5,668,177
--------------
EXPENSES:
Investment management fee (Note 4)............................................................ 396,821
Recordkeeping fees............................................................................ 159,953
Custody fees.................................................................................. 35,800
Professional fees............................................................................. 29,530
Amortization of organization expense (Note 2E)................................................ 7,645
Miscellaneous................................................................................. 2,978
--------------
Total expenses.............................................................................. 632,727
--------------
Net investment income.................................................................... 5,035,450
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments.............................................................. (11,293,267)
Net change in unrealized depreciation of investments.......................................... 8,629,322
--------------
Net loss on investments..................................................................... (2,663,945)
--------------
Net increase in net assets resulting from operations..................................... $ 2,371,505
--------------
--------------
</TABLE>
See Notes to Financial Statements
- ------
21
<PAGE>
ASTRA INSTITUTIONAL ADJUSTABLE U.S. GOVERNMENT SECURITIES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS --------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 5,035,450 $ 20,135,511
Net realized loss on investments........................................... (11,293,267) (62,035,769)
Net change in unrealized depreciation of investments....................... 8,629,322 10,936,142
---------------- ----------------
Net increase (decrease) in net assets resulting from operations............ 2,371,505 (30,964,116)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($2.652 and $4.828
per share, respectively)................................................. (4,937,938) (16,286,136)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets derived from the net change in
the number of outstanding shares (a)..................................... (51,741,460) (315,510,221)
---------------- ----------------
Total decrease in net assets........................................... (54,307,893) (362,760,473)
Net assets at the beginning of the period.................................... 172,592,461 535,352,934
---------------- ----------------
NET ASSETS at the end of the period (including undistributed
net investment income of $112,400 and $14,888, respectively)............... $ 118,284,568 $ 172,592,461
---------------- ----------------
---------------- ----------------
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 (UNAUDITED) OCTOBER 31, 1995
--------------------------- ------------------------------
SHARES VALUE SHARES VALUE
---------- --------------- ------------ ----------------
<S> <C> <C> <C> <C>
Shares sold....................................... 2,338 $ 180,845 12,991 $ 1,294,478
Shares issued in reinvestment of
distributions to shareholders................... 63,343 4,950,982 105,611 8,569,781
Shares repurchased................................ (728,896) (56,873,287) (3,958,690) (325,374,480)
---------- --------------- ------------ ----------------
Net decrease.................................... (663,215) $ (51,741,460) (3,840,088) $ (315,510,221)
---------- --------------- ------------ ----------------
---------- --------------- ------------ ----------------
</TABLE>
See Notes to Trusts' Financial Statements
------
22
<PAGE>
ASTRA INSTITUTIONAL ADJUSTABLE U.S. GOVERNMENT SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
NOVEMBER 27, 1991
(COMMENCEMENT OF
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, OPERATIONS) TO
APRIL 30, 1996 ------------------------------------ OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992
---------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period.......................... $ 78.500 $ 88.650 $ 98.410 $ 99.600 $ 100.000
---------- --------- ---------- ------------ ------------
Income (loss) from investment
operations--
Net investment income........... 2.718 5.750(b) 5.890 6.040 7.539
Net realized and unrealized loss
on investments................ (1.526) (11.072)(b) (10.864) (0.601) (0.419)
---------- --------- ---------- ------------ ------------
Total from investment
operations............... 1.192 (5.322) (4.974) 5.439 7.120
---------- --------- ---------- ------------ ------------
Less distributions--
Distributions from net
investment income............. 2.652 4.828 4.786 6.061 7.520
Distributions from paid-in
capital....................... -- -- -- 0.568
---------- --------- ---------- ------------ ------------
Total distributions......... 2.652 4.828 4.786 6.629 7.520
---------- --------- ---------- ------------ ------------
Net asset value, end of period.... $ 77.040 $ 78.500 $ 88.650 $ 98.410 $ 99.600
========== ========== ========== ============ ============
TOTAL RETURN...................... 1.51% (6.00%) (5.25%) 5.62% 7.80% (a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)...................... $ 118,285 $ 172,592 $ 535,353 $ 1,294,248 $ 1,111,565
Ratio to average net assets--
Expenses........................ 0.88%(a) 0.86% 0.62% 0.61% 0.64% (a)
Net investment income........... 6.98%(a) 7.14% 6.17% 6.66% 7.90% (a)
Portfolio turnover rate........... 192% 108% 83% 87% 152%
</TABLE>
- ------------------
(a) Annualized
(b) Based upon average shares outstanding throughout the period.
See Notes to Financial Statements
- ------
23
<PAGE>
ASTRA INSTITUTIONAL ADJUSTABLE U.S. GOVERNMENT SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
NOTE 1--ORGANIZATION
Astra Institutional Securities Trust (the 'Company') is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Company was organized as a Massachusetts Business Trust on
September 4, 1991 with an unlimited number of shares of beneficial interest
without par value. The Company offers shares in two non-diversified series,
Astra Institutional Adjustable U.S. Government Securities Portfolio (the
'Portfolio') and Astra Institutional Adjustable Rate Securities Portfolio. The
Portfolio is structured to serve as the investment vehicle for four affiliated
open-end management investment companies: Astra Adjustable U.S. Government
Securities Trust I, I-A, II and IV (collectively, the 'Trusts'). The Trusts
invest substantially all of their net assets in the Portfolio, which has the
same investment objective as that of the Trusts.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
A. SECURITY VALUATION. A valuation committee of the Board of Trustees is
responsible for establishing security valuation policies, reviewing the
valuation of portfolio securities, monitoring the level of illiquid
securities and reviewing liquidity determinations. The Company considers to
be illiquid all securities which cannot be disposed of within seven days in
the ordinary course of business at approximately the amount at which the
Portfolio values the security. Additionally, interest rate swap contracts,
interest-only and principal-only mortgage backed securities, and special
hazard certificates are treated as illiquid securities in accordance with
Securities and Exchange Commission policy. Liquid securities are valued
primarily using prices provided by independent pricing services which use
prices provided by market-makers or estimates of market values obtained
from yield and other data relating to instruments or securities with
similar characteristics, and secondarily based upon market quotations
and/or other available information. Securities for which reliable market
information or pricing service quotes are not readily available, including
illiquid securities, are valued at fair value as determined in good faith
by, or under procedures established by, the Board of Trustees, which
procedures may include the delegation of certain responsibilities regarding
valuation to Astra Management Corporation (the 'Manager'). The Manager
reports, as necessary, to the Trustees of the Company regarding portfolio
valuation determinations. Short-term securities with less than sixty days
remaining to maturity when acquired by the Portfolio will be valued on an
amortized cost basis by the Portfolio when the Board of Trustees has
determined that amortized cost is fair value.
B. FEDERAL INCOME TAXES. The Portfolio intends 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 Federal income tax provision is required.
C. SECURITY TRANSACTIONS, INCOME AND DISTRIBUTIONS. As is common in the
industry, security transactions are accounted for on the trade date.
Interest income on adjustable rate mortgage securities is recorded on the
accrual basis at current interest rates. Dividends to shareholders from net
investment income are declared daily and paid or reinvested monthly.
Discounts and premiums on debt securities are amortized in accordance with
the provisions of the Internal Revenue Code.
- ------
24
<PAGE>
D. INTEREST RATE SWAP CONTRACTS. The Portfolio may enter into interest rate
swap contracts as a hedging technique. Interest rate swap contracts are
marked-to-market daily using market quotations or independent pricing
services. The change in market value is recorded by the Portfolio as an
unrealized gain or loss. Interest income (expense) is accrued daily on the
contract's notional amount and applicable interest rates. Interest rate
swap contracts may expose the Portfolio to risks resulting from
unanticipated movements in interest rates or the failure of the
counterparty to the agreement to perform in accordance with the terms of
the contract.
E. DEFERRED ORGANIZATION EXPENSES. All of the Portfolio's expenses in
connection with its organization are being borne by the Portfolio and will
be amortized on a straight-line basis over a period of five years.
NOTE 3--INVESTMENTS
For the six months ended April 30, 1996, the cost of purchases and the proceeds
from sales of investments and principal repayments, excluding short-term
securities, aggregated $263,023,040 and $281,587,637, respectively.
On April 30, 1996, the Portfolio held restricted securities (i.e., securities
which may not be publicly sold without registration under the Federal Securities
Act of 1933 (the ' '33 Act') or without an exemption under the '33 Act). The
valuation committee of the Board has reviewed the trading markets for certain of
the Portfolio's restricted securities and has determined that they are liquid
and readily marketable. At April 30, 1996 other restricted securities having a
market value of $1,081,345, representing 0.9% of the Portfolio's net assets have
been determined to be illiquid. On April 30, 1996, and on the acquisition dates
of the restricted securities, there were no market quotations available for
unrestricted securities of the same class. Dates of acquisition and costs of
restricted securities are as follows:
<TABLE>
<CAPTION>
PRINCIPAL DATE(S) OF
AMOUNT ACQUISITION COST
- ------------- ----------------------- -------------
<S> <C> <C> <C>
$ 7,968,857 Citibank NA Multifamily 1992-1, Class B................ 03/25/92 $ 6,870,768
11,603,158 Coast Federal Savings Bank 1991-1...................... 06/27/91 TO 08/02/91 10,422,480
5,190,086 Coast Federal Savings Bank 1991-2, Class B-1........... 12/04/91 4,392,775
15,975,236 PaineWebber Mortgage Acceptance Corp 1991-1, Class B... 10/24/91 TO 12/11/91 15,903,834
7,771,780 USGI Capital Markets Group Inc, Multi Family
1992-1............................................... 09/28/92 6,073,237
-------------
Total restricted securities (Market Value of
$10,423,871 was 8.8% of net assets at
April 30, 1996)...................................... $ 43,663,094
=============
</TABLE>
As of April 30, 1996 U.S. Government Securities with a value of $32,296,642
were placed in a separate account at the Custodian Bank to cover certain
purchases of securities made on a delayed delivery basis.
At October 31, 1995 the Portfolio had a capital loss carryforward for
Federal income tax purposes of $95,031,000 of which $6,618,000 expires in 2000,
$4,385,000 in 2001, $25,842,000 in 2002, and 58,186,000 in 2003.
- ------
25
<PAGE>
NOTE 4-- INVESTMENT MANAGEMENT FEE AND OTHER
TRANSACTIONS WITH AFFILIATES
The Manager provides the Portfolio with investment management and administrative
services under an Investment Management Agreement. The Manager furnishes all
investment advice, office space and salaries of personnel needed by the
Portfolio, except those involved with record-keeping, daily net asset value
calculations, placing orders for the execution of portfolio transactions,
shareholder servicing, and maintaining registration of shares under state
securities laws. As compensation for its services, the Manager is paid monthly a
fee which is equal to the annual rate of 0.55% of the first $500 million of
average daily net assets, 0.50% on net assets from $500 million to $1 billion
and 0.45% on net assets over $1 billion. The Manager has agreed to reimburse the
Portfolio and Trusts to the extent required so that the aggregate expenses do
not exceed the expense limitations applicable to the Portfolio and Trusts under
the securities laws or regulations of those states or jurisdictions in which the
Trusts' shares are registered or qualified for sale. Currently, the most
restrictive of such expense limitations would require the Manager to reimburse
the Portfolio and Trusts to the extent required so that the Portfolio's and
Trusts' expenses, as described above, for any fiscal year do not exceed 2 1/2%
of the first $30 million of average daily net assets, 2% of the next $70 million
of average net assets and 1 1/2% of the remaining average net assets. The amount
of any such required reimbursement is limited to the management fees paid by the
Portfolio to the Manager. Expenses for purposes of this expense limitation
include the management fee, but exclude distribution expenses, brokerage
commissions and fees, taxes, interest and extraordinary expenses such as
litigation, paid or incurred by the Portfolio or Trusts.
Certain officers and trustees of the Company are also officers and/or directors
of the Trusts and the Manager.
NOTE 5--LEGAL MATTERS
Between December 1994 and July 1995, various complaints have been filed by
certain shareholders of Astra Adjustable U.S. Government Securities Trusts I,
I-A, II, III and IV and Astra Adjustable Rate Securities Trusts I, I-A, II, III
and IV (collectively, the 'Astra Trusts') in the United States District Court
for the Central District of California and in the Superior Court for the State
of California against the Company and certain of its officers and trustees, the
Astra Trusts and certain of their officers and trustees, Astra Management
Corporation, Astra Fund Distributors Corporation, and, Atlas Holdings Group Inc.
and its principal stockholder and certain of its employees. These complaints
have been consolidated in the United States District Court for the Central
District of California in the matter referred to as 'In re Pilgrim Securities
Litigation.'
The complaints allege violations of the Securities Act of 1933 and the
Investment Company Act of 1940 relating principally to disclosure concerning
pricing and liquidity of portfolio securities held by the two Portfolios of the
Company. The complaints seek relief measured by the consideration each
shareholder paid for shares of the Astra Trusts with interest thereon, less the
amount of income received thereon, or in the event the shareholder no longer
owns such shares, for damages, plus interest. Management of the Company believes
the complaints are without merit and intents, and has been advised that each of
the other defendants intends, to vigorously defend these actions. The ultimate
outcome of these matters, however, cannot presently be determined and
accordingly the Portfolios have made no provision for any losses which may
result from settlement of these complaints.
- ------
26
<PAGE>
ASTRA GROUP
FAMILY OF FUNDS
- ------------------------------
ADJUSTABLE-INCOME FUNDS
- ------------------------------
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I-A
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST II
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST IV
ASTRA ADJUSTABLE RATE SECURITIES TRUST I
ASTRA ADJUSTABLE RATE SECURITIES TRUST I-A
ASTRA ADJUSTABLE RATE SECURITIES TRUST II
ASTRA ADJUSTABLE RATE SECURITIES TRUST IV
FIXED-INCOME FUNDS
- ------------------------------
ASTRA ALL-AMERICAS GOVERNMENT INCOME TRUST
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND I
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND II
- ------------------
Prospectuses containing more complete information about the Funds, including
charges and expenses, may be obtained from Astra Fund Distributors Corp. Read
the Prospectus carefully before you invest or send money.
- ------
27
<PAGE>
- ------------------------------------------
750 B Street
Suite 2350
San Diego, CA 92101
- ------------------------------------------
ASTRA ADJUSTABLE U.S.
GOVERNMENT SECURITIES
I, I-A, II, IV
Investment Manager
Astra Management Corp.
750 B Street
Suite 2350
San Diego, CA 92101
1-619-238-7100
Principal Underwriter
Astra Fund Distributors Corp.
750 B Street
Suite 2350
San Diego, CA 92101
1-800-219-1080
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419174
Kansas City, Missouri 64141
1-800-441-7267
Transfer Agent
Investors Fiduciary Trust Company
c/o DST Systems, Inc.
P.O. Box 419174
Kansas City, Missouri 64141
This report is submitted for the general information of the shareholders of
the Trusts. It is not authorized for distribution to prospective investors in
the Trusts unless preceded or accompanied by an effective prospectus which
includes details regarding the Trusts' objectives, policies, sales commissions
and other information.
USG 696 10.5 AST 606112
ASTRA
ARM
FUNDS
Semi-Annual Report
April 30, 1996
ASTRA ADJUSTABLE
U.S. GOVERNMENT SECURITIES
TRUSTS I, I-A, II, IV
[ASTRA LOGO]
ASTRA
<PAGE>
[ ASTRA LOGO ]
ASTRA ADJUSTABLE RATE SECURITIES TRUSTS SEMI-ANNUAL REPORT
June 20, 1996
Dear Shareholder:
The Trusts' performance during the past six months was heavily influenced by
real and expected changes in U.S. interest rates, mortgage prepayments, and
mortgage defaults. The Trusts' fiscal year began in the midst of the U.S.
Federal Reserve's attempt to stimulate economic growth through decreases in the
Fed Funds rate. As a result, both short-term and long-term interest rates
dropped. However, beginning in late December 1995, long-term interest rates
began to rise as investors' perception of future economic growth increased in
conjunction with concerns of rising inflation brought about by an increase in
the price of gold as well as other commodities. During the six months ended
April 30, 1996, the U.S. two year treasury yield increased from 5.61% to 5.98%,
an increase of 37 basis points, while the U.S. thirty year treasury yield
increased from 6.33% to 6.84%, an increase of 51 basis points. Additionally,
during the last month of 1995, the Trusts were hampered by credit and default
risk on the balance of single-family, subordinated mortgage securities in the
portfolio primarily backed by Southern California real estate.
The Astra family of funds continues its recovery from a turbulent two year
period which saw its funds impacted by unforeseen events such as rapid changes
in U.S. interest rates, a prolonged recession of the California economy, and the
devaluation of the Mexican Peso. Since late 1995, we have attempted to improve
the performance of all Astra funds by focusing on a core holding of securities
which management believes offer less price volatility while still providing
relatively attractive returns. Over the last six months, the Adjustable Rate
Securities Trusts have somewhat improved their performance relative to the past
two years. The Trust has attempted to stabilize NAV by investing in
higher-quality agency issues. As previously mentioned in past correspondence,
the Investment Committee ('the Committee'), led by new members, completed an
exhaustive review of all subordinated mortgage securities held in the portfolio.
Upon identifying those particular securities which the Committee believed might
cause additional credit and/or default problems in the future, the Committee
implemented a liquidation process designed to maximize retention of shareholder
value. At this point, the Trusts hold less than 1% in subordinated mortgage
securities. The liquidation process was completed in December 1995.
Currently, the Committee plans to take advantage of the relatively stable price
performance of annually resetting adjustable-rate Agency mortgages. However, as
the Trusts have experienced an increase in the rate of redemptions, a portion of
its assets will be invested in short-term U.S. government securities which has
the effect of reducing yield.
On behalf of Astra, we want to thank you for giving us the opportunity to help
you achieve your financial goals and objectives.
Sincerely,
Astra Management Corporation
- ------------------
Astra Adjustable Rate Securities Trusts invest all investable assets in the
Astra Institutional Adjustable Rate Securities Portfolio. The Portfolio seeks to
achieve its investment objective by investing at least 65% of its assets in
adjustable-rate mortgage (ARM) securities. A majority of the Portfolio's assets
may be invested in ARM securities that are issued or sponsored by commercial
banks, savings and loan associations, mortgage bankers or other financial
institutions, that have no government guarantee and that are senior or
subordinated to other mortgage securities arising out of the same pool of
mortgages. The Portfolio invests the remainder of its assets in (i) mortgage
securities which are issued or guaranteed by the U.S. Government, its agencies
or instrumentalities, or which are collateralized by or represent an interest in
U.S. Government mortgage securities and (ii) certain other mortgage securities.
PERFORMANCE DATA REPRESENTS PAST PERFORMANCE. INVESTMENT RETURN AND THE
PRINCIPAL VALUE OF AN INVESTMENT IN THE TRUST WILL FLUCTUATE. SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
<PAGE>
TABLE OF CONTENTS
- ------------------------------
ASTRA ADJUSTABLE RATE SECURITIES TRUST I
Statement of Assets and Liabilities...................................... 3
Statement of Operations.................................................. 3
Statement of Changes in Net Assets....................................... 4
Financial Highlights..................................................... 5
ASTRA ADJUSTABLE RATE SECURITIES TRUST I-A
Statement of Assets and Liabilities...................................... 6
Statement of Operations.................................................. 6
Statement of Changes in Net Assets....................................... 7
Financial Highlights..................................................... 8
ASTRA ADJUSTABLE RATE SECURITIES TRUST II
Statement of Assets and Liabilities...................................... 9
Statement of Operations.................................................. 9
Statement of Changes in Net Assets....................................... 10
Financial Highlights..................................................... 11
ASTRA ADJUSTABLE RATE SECURITIES TRUST IV
Statement of Assets and Liabilities...................................... 12
Statement of Operations.................................................. 12
Statement of Changes in Net Assets....................................... 13
Financial Highlights..................................................... 14
ASTRA ADJUSTABLE RATE SECURITIES TRUSTS
Notes to Financial Statements............................................ 15
ASTRA INSTITUTIONAL ADJUSTABLE RATE SECURITIES PORTFOLIO
Portfolio of Investments................................................. 20
Statement of Assets and Liabilities...................................... 21
Statement of Operations.................................................. 21
Statement of Changes in Net Assets....................................... 22
Financial Highlights..................................................... 23
Notes to Financial Statements............................................ 24
- ------
2
<PAGE>
<TABLE>
<CAPTION>
ASTRA ADJUSTABLE RATE SECURITIES TRUST I
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
--------------------------------
<S> <C>
ASSETS:
Investments in securities at value* (identified cost $5,142,734) (Notes 1 and 2A)................ $ 2,728,847
Dividends receivable from Portfolio.............................................................. 13,188
Deferred organization expense (net of accumulated amortization of $68,823) (Note 2D)............. 9,579
Prepaid expenses................................................................................. 4,826
-------------
Total Assets................................................................................. 2,756,440
-------------
LIABILITIES:
Payable for capital stock redeemed............................................................... 36,430
Accrued expenses................................................................................. 48,658
-------------
Total Liabilities............................................................................ 85,088
-------------
NET ASSETS......................................................................................... $ 2,671,352
-------------
-------------
Net asset value per share ($2,671,352/872,865 shares) (Note 6)..................................... $ 3.06
-------------
-------------
At April 30, 1996 the components of net assets were as follows:
Paid-in capital.................................................................................. $ 22,666,607
Accumulated net realized loss on investments..................................................... (17,534,349)
Accumulated net investment deficit............................................................... (47,019)
Net unrealized depreciation of investments....................................................... (2,413,887)
-------------
Net Assets................................................................................... $ 2,671,352
-------------
-------------
</TABLE>
- ------------------
* Investments of Astra Adjustable Rate Securities Trust I consist entirely of
59,570 shares of Astra Institutional Adjustable Rate Securities Portfolio.
Cost for Federal income tax purposes is $5,142,734. See Notes 1 and 2A.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
INCOME:
Dividends from Portfolio....................................................................... $ 124,979
Other (Note 4A)................................................................................ 11,661
-------------
Total Income................................................................................. 136,640
-------------
EXPENSES:
Shareholders servicing costs................................................................... 9,894
Amortization of organization expense (Note 2D)................................................. 8,017
Professional fees.............................................................................. 4,834
Distribution expenses (Note 4A)................................................................ 4,485
Registration fees.............................................................................. 3,977
Insurance expense.............................................................................. 3,258
Administrative servicing costs (Note 5)........................................................ 1,794
Reports to shareholders........................................................................ 1,395
Miscellaneous expense.......................................................................... 711
Trustees' fees................................................................................. 440
-------------
Total expenses............................................................................... 38,805
-------------
Net investment income..................................................................... 97,835
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments............................................................... (2,278,201)
Net change in unrealized depreciation of investments........................................... 2,076,294
-------------
Net loss on investments...................................................................... (201,907)
-------------
Net decrease in net assets resulting from operations...................................... $ (104,072)
-------------
-------------
</TABLE>
See Notes to Trusts' Financial Statements
- ------
3
<PAGE>
<TABLE>
<CAPTION>
ASTRA ADJUSTABLE RATE SECURITIES TRUST I
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------
SIX MONTHS ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 97,835 $ 761,180
Net realized loss on investments........................................... (2,278,201) (14,118,255)
Net change in unrealized depreciation of investments....................... 2,076,294 1,774,675
---------------- ----------------
Net decrease in net assets resulting from operations....................... (104,072) (11,582,400)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($0.114 and $0.260 per share,
respectively)............................................................ (144,854) (897,466)
Distributions from paid-in capital ($0.108 per share)...................... -- (373,209)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets derived from the net change in the number of
outstanding shares (a)................................................... (1,883,842) (42,151,566)
---------------- ----------------
Total decrease in net assets........................................... (2,132,768) (55,004,641)
Net assets at the beginning of the period.................................... 4,804,120 59,808,761
---------------- ----------------
NET ASSETS at the end of the period (including accumulated net investment
deficit of $47,019 and $0, respectively)................................... $ 2,671,352 $ 4,804,120
================ ===============
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 (UNAUDITED) OCTOBER 31, 1995
-------------------------- -----------------------------
SHARES VALUE SHARES VALUE
---------- -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold.......................................... -- $ -- 61,778 $ 362,064
Shares issued in reinvestment of distributions to
shareholders....................................... 14,690 46,603 79,584 387,089
Shares repurchased................................... (615,895) (1,930,445) (7,917,358) (42,900,719)
---------- -------------- ------------ ---------------
Net decrease....................................... (601,205) $ (1,883,842) (7,775,996) $ (42,151,566)
---------- -------------- ------------ ---------------
---------- -------------- ------------ ---------------
</TABLE>
See Notes to Trusts' Financial Statements
- ------
4
<PAGE>
ASTRA ADJUSTABLE RATE SECURITIES TRUST I
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
NOVEMBER 27, 1991
(COMMENCEMENT OF
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, OPERATIONS) TO
APRIL 30, 1996 ------------------------------------ OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992
---------------- ---- ---- ---- ----------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period........................ $ 3.260 $ 6.470 $ 7.210 $ 7.250 $ 7.350
--------- --------- --------- --------- ----------
Income (loss) from investment
operations--
Net investment income......... 0.085 (e) 0.224 (e) 0.357 0.475 0.524
Net realized and unrealized
loss on investments......... (0.171)(e) (3.066)(e) (0.688) (0.002) (0.052)
--------- --------- --------- --------- ----------
Total from investment
operations................ (0.086) (2.842) (0.331) 0.473 0.472
--------- --------- --------- --------- ----------
Less distributions--
Distributions from net
investment income........... 0.114 0.260 0.409 0.513 0.524
Distributions from paid-in
capital..................... -- 0.108 -- -- 0.048
--------- --------- --------- --------- ----------
Total distributions......... 0.114 0.368 0.409 0.513 0.572
--------- --------- --------- --------- ----------
Net asset value, end of
period........................ $ 3.060 $ 3.260 $ 6.470 $ 7.210 $ 7.250
========= ========= ========= ========= ==========
TOTAL RETURN (f)................ (2.70%) (45.38%) (4.85%) 6.74% 7.18%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands).................... $ 2,671 $ 4,804 $ 59,809 $ 63,121 $ 53,187
Ratio to average net assets--
Expenses...................... 2.16%(a)(b) 1.32%(b) 1.34%(b) 1.36%(b) 1.38%(a)(b)(c)
Net investment income......... 5.45%(a) 4.68% 5.02% 6.59% 7.63%(a)(d)
Portfolio turnover rate......... 5% 9% 30% 7% 4%
</TABLE>
- ------------------
(a) Annualized
(b) Ratio of expenses to average net assets excludes 1.00% (a), 1.09%, 0.76%,
0.76% and 0.76%(a), respectively, of expenses of the Portfolio, which
reduced dividends paid to Trust I.
(c) Ratio of expenses to average net assets prior to expense waivers was
1.46%(a).
(d) Ratio of net investment income to average net assets prior to expense
waivers was 7.55%(a).
(e) Based upon average shares outstanding throughout the period.
(f) Calculated without the deduction of sales charges.
See Notes to Trusts' Financial Statements
- ------
5
<PAGE>
ASTRA ADJUSTABLE RATE SECURITIES TRUST I-A
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities at value* (identified cost $16,614,488) (Notes 1 and 2A)............... $ 8,453,038
Dividends receivable from Portfolio.............................................................. 40,393
Deferred organization expense (net of accumulated amortization of $43,132) (Note 2D)............. 6,539
Prepaid expenses................................................................................. 8,581
-------------
Total Assets.............................................................................. 8,508,551
-------------
LIABILITIES:
Payable for capital stock redeemed............................................................... 60,791
Accrued expenses................................................................................. 106,724
-------------
Total Liabilities......................................................................... 167,515
-------------
NET ASSETS......................................................................................... $ 8,341,036
-------------
-------------
Net asset value per share ($8,341,036/2,714,264 shares) (Note 6)................................... $ 3.07
-------------
-------------
At April 30, 1996 the components of net assets were as follows:
Paid-in capital.................................................................................. $ 63,130,827
Accumulated net realized loss on investments..................................................... (46,485,299)
Accumulated net investment deficit............................................................... (143,042)
Net unrealized depreciation of investments....................................................... (8,161,450)
-------------
Net Assets................................................................................... $ 8,341,036
-------------
-------------
</TABLE>
- ------------------
* Investments of Astra Adjustable Rate Securities Trust I-A consist entirely of
184,527 shares of Astra Institutional Adjustable Rate Securities Portfolio.
Cost for Federal income tax purposes is $16,614,488. See Notes 1 and 2A.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
INCOME:
Dividends from Portfolio....................................................................... $378,942
-------------
EXPENSES:
Distribution expenses (Note 4A)................................................................ 54,270
Shareholders servicing costs................................................................... 29,299
Insurance expense.............................................................................. 9,606
Professional fees.............................................................................. 7,227
Administrative servicing costs (Note 5)........................................................ 5,427
Reports to shareholders........................................................................ 4,552
Registration fees.............................................................................. 4,361
Amortization of organization expense (Note 2D)................................................. 4,185
Trustees' fees................................................................................. 1,429
Miscellaneous.................................................................................. 1,044
-------------
Total expenses............................................................................ 121,400
-------------
Net investment income................................................................... 257,542
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments............................................................... (6,072,043)
Net change in unrealized depreciation of investments........................................... 5,450,536
-------------
Net loss on investments................................................................... (621,507)
-------------
Net decrease in net assets resulting from operations.................................... $(363,965)
=============
</TABLE>
See Notes to Trusts' Financial Statements
- ------
6
<PAGE>
ASTRA ADJUSTABLE RATE SECURITIES TRUST I-A
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 257,542 $ 1,644,712
Net realized loss on investments........................................... (6,072,043) (37,656,821)
Net change in unrealized depreciation of investments....................... 5,450,536 2,368,536
--------------- ---------------
Net decrease in net assets resulting from operations....................... (363,965) (33,643,573)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($0.105 and $0.184 per share,
respectively)........................................................... (400,584) (1,838,392)
Distributions from paid-in capital ($0.163 per share)...................... -- (1,634,558)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets derived from the net change in the number of
outstanding shares (a).................................................. (5,219,939) (102,359,995)
--------------- ---------------
Total decrease in net assets.......................................... (5,984,488) (139,476,518)
Net assets at the beginning of the period.................................... 14,325,524 153,802,042
--------------- ---------------
NET ASSETS at the end of the period (including accumulated net investment
deficit of $143,042 and $0, respectively).................................. $ 8,341,036 $ 14,325,524
=============== ===============
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 (UNAUDITED) OCTOBER 31, 1995
---------------------------- --------------------------------
SHARES VALUE SHARES VALUE
------------ -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Shares sold..................................... -- $ -- 286,384 $ 1,691,969
Shares issued in reinvestment of distributions
to shareholders............................... 39,693 127,566 284,239 1,316,939
Shares repurchased.............................. (1,693,231) (5,347,505) (19,919,439) (105,368,903)
------------ -------------- -------------- ----------------
Net decrease.................................. (1,653,538) $ (5,219,939) (19,348,816) $ (102,359,995)
============ ============== ============== ================
</TABLE>
See Notes to Trusts' Financial Statements
- ------
7
<PAGE>
ASTRA ADJUSTABLE RATE SECURITIES TRUST I-A
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
MAY 19, 1992
(COMMENCEMENT OF
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, OPERATIONS) TO
APRIL 30, 1996 -------------------------------------- OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992
----------------- --------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of
period..................... $ 3.280 $ 6.490 $ 7.240 $ 7.260 $ 7.290
--------- --------- ---------- ---------- ----------
Income (loss) from investment
operations--
Net investment
income................... 0.074 (e) 0.169 (e) 0.348 0.474 0.252
Net realized and unrealized
gain (loss) on
investments.............. (0.179)(e) (3.032)(e) (0.694) 0.018 (0.004)
--------- --------- ---------- ---------- ----------
Total from investment
operations............. (0.105) (2.863) (0.346) 0.492 0.248
--------- --------- ---------- ---------- ----------
Less distributions--
Distributions from net
investment income........ 0.105 0.184 0.404 0.512 0.252
Distributions from paid-in
capital.................. -- 0.163 -- -- 0.026
--------- --------- ---------- ---------- ----------
Total distributions...... 0.105 0.347 0.404 0.512 0.278
--------- --------- ---------- ---------- ----------
Net asset value, end of
period..................... $ 3.070 $ 3.280 $ 6.490 $ 7.240 $ 7.260
========= ========= ========== ========== ==========
TOTAL RETURN (f)......... (3.27%) (45.46%) (5.05%) 7.01% 7.63%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)................. $ 8,341 $ 14,326 $ 153,802 $ 178,769 $ 57,311
Ratio to average net assets--
Expenses................... 2.24%(a)(b) 1.76%(b) 1.43%(b) 1.14%(b)(c) 1.18%(a)(b)
Net investment
income................... 4.75%(a) 3.51% 4.88% 6.40% 6.86%(a)(d)
Portfolio turnover rate...... 4% 4% 23% 0% 0%
</TABLE>
- ------------------
(a) Annualized
(b) Ratio of expenses to average net assets excludes 1.00%(a), 1.09%, 0.76%,
0.76% and 0.76%(a), respectively, of expenses of the Portfolio, which
reduced dividends paid to Trust I-A.
(c) Ratio of expenses to average net assets prior to expense waivers was 1.16%
and 1.28%(a).
(d) Ratio of net investment income to average net assets prior to expense
waivers was 6.38% and 6.76%(a), respectively.
(e) Based upon average shares outstanding throughout the period.
(f) Calculated without the deduction of sales charges.
See Notes to Trusts' Financial Statements
- ------
8
<PAGE>
ASTRA ADJUSTABLE RATE SECURITIES TRUST II
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities at value* (identified cost $2,389,370) (Notes 1 and 2A)................ $ 1,287,223
Dividends receivable from Portfolio.............................................................. 5,971
Deferred organization expense (net of accumulated amortization of $66,989) (Note 2D)............. 8,554
Prepaid expenses................................................................................. 4,321
-------------
Total Assets................................................................................. 1,306,069
-------------
LIABILITIES:
Payable for capital stock redeemed............................................................... 47,818
Accrued expenses................................................................................. 16,829
-------------
Total Liabilities............................................................................ 64,647
-------------
NET ASSETS......................................................................................... $ 1,241,422
=============
COMPUTATION OF OFFERING PRICE:
Net asset value per share ($1,241,422/397,092 shares)............................................ $ 3.13
=============
Offering price per share (100/97 of $3.13)(a).................................................... $ 3.23
=============
(a) On investments of $100,000 or more the offering price is reduced.
At April 30, 1996 the components of net assets were as follows:
Paid-in capital.................................................................................. 10,537,180
Accumulated net realized loss on investments..................................................... (8,145,206)
Accumulated net investment deficit............................................................... (48,405)
Net unrealized depreciation of investments....................................................... (1,102,147)
-------------
Net Assets................................................................................... $ 1,241,422
=============
</TABLE>
- ------------------
* Investments of Astra Adjustable Rate Securities Trust II consist entirely of
28,100 shares of Astra Institutional Adjustable Rate Securities Portfolio.
Cost for Federal income tax purposes is $2,389,370. See Notes 1 and 2A.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
INCOME:
Dividends from Portfolio....................................................................... $ 110,042
-------------
EXPENSES:
Amortization of organization expense (Note 2D)................................................. 7,354
Shareholders servicing costs................................................................... 6,268
Registration fees.............................................................................. 4,779
Distribution expenses (Note 4B)................................................................ 4,052
Professional fees.............................................................................. 2,888
Insurance expense.............................................................................. 2,533
Administrative servicing costs (Note 5)........................................................ 1,621
Reports to shareholders........................................................................ 1,254
Miscellaneous expense.......................................................................... 882
Trustees' fees................................................................................. 475
-------------
Total expenses............................................................................... 32,106
-------------
Net investment income..................................................................... 77,936
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments............................................................... (3,064,707)
Net change in unrealized depreciation of investments........................................... 2,879,345
-------------
Net loss on investments...................................................................... (185,362)
-------------
Net decrease in net assets resulting from operations...................................... $ (107,426)
=============
</TABLE>
See Notes to Trusts' Financial Statements
- ------
9
<PAGE>
<TABLE>
<CAPTION>
ASTRA ADJUSTABLE RATE SECURITIES TRUST II
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------
SIX MONTHS ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 77,936 $ 297,562
Net realized loss on investments........................................... (3,064,707) (3,997,087)
Net change in unrealized depreciation of investments....................... 2,879,345 (1,875,278)
---------------- ----------------
Net decrease in net assets resulting from operations....................... (107,426) (5,574,803)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($0.114 and $0.192 per share,
respectively)............................................................ (126,341) (347,695)
Distributions from paid-in capital ($0.193 per share)...................... -- (348,497)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets derived from the net change in the number of
outstanding shares (a)................................................... (2,586,871) (10,447,746)
---------------- ----------------
Total decrease in net assets........................................... (2,820,638) (16,718,741)
Net assets at the beginning of the period.................................... 4,062,060 20,780,801
--------------- ---------------
NET ASSETS at the end of the period (including accumulated net investment
deficit of $48,405 and $0, respectively)................................... $ 1,241,422 $ 4,062,060
=============== ===============
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 (UNAUDITED) OCTOBER 31, 1995
-------------------------- -----------------------------
SHARES VALUE SHARES VALUE
---------- -------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold....................................... -- $ -- 9,197 $ 54,958
Shares issued in reinvestment of
distributions to shareholders................... 10,384 33,749 46,165 222,295
Shares repurchased................................ (828,820) (2,620,620) (1,980,374) (10,724,999)
---------- -------------- ------------ ---------------
Net decrease.................................... (818,436) $ (2,586,871) (1,925,012) $ (10,447,746)
========== ============== ============ ===============
</TABLE>
See Notes to Trusts' Financial Statements
------
10
<PAGE>
ASTRA ADJUSTABLE RATE SECURITIES TRUST II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
DECEMBER 2, 1991
(COMMENCEMENT OF
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, OPERATIONS) TO
APRIL 30, 1996 -------------------------------------- OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992
----------------- --------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period......................... $ 3.340 $ 6.620 $ 7.320 $ 7.300 $ 7.350
--------- --------- --------- --------- ----------
Income (loss) from investment
operations--
Net investment income........ 0.082(e) 0.168 (e) 0.407 0.509 0.577
Net realized and unrealized
gain (loss) on
investments................ (0.178)(e) (3.063)(e) (0.701) 0.017 (0.050)
--------- --------- --------- --------- ----------
Total from investment
operations.............. (0.096) (2.895) (0.294) 0.526 0.527
--------- --------- --------- --------- ----------
Less distributions--
Distributions from net
investment income............ 0.114 0.192 0.405 0.504 0.577
Distribution from realized
gains on investments......... -- -- 0.001 0.002 --
Distributions from paid-in
capital...................... -- 0.193 -- -- --
--------- --------- --------- --------- ----------
Total distributions.......... 0.114 0.385 0.406 0.506 0.577
--------- --------- --------- --------- ----------
Net asset value, end of
period......................... $ 3.130 $ 3.340 $ 6.620 $ 7.320 $ 7.300
========= ========= ========= ========= ==========
TOTAL RETURN (f)................. (2.94%) (45.20%) (4.25%) 7.45% 8.14%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in
thousands)..................... $ 1,241 $ 4,062 $ 20,781 $ 59,092 $ 27,511
Ratio to average net assets--
Expenses....................... 1.98%(a)(b) 1.03%(b) 0.59%(b) 0.63%(b)(c) 0.64%(a)(b)(c)
Net investment income.......... 4.81%(a) 3.46% 5.67% 6.90% 8.22%(a)(d)
Portfolio turnover rate.......... 4% 4% 64% 97% 63%
</TABLE>
- ------------------
(a) Annualized
(b) Ratio of expenses to average net assets excludes 1.00%(a), 1.09%, 0.76%,
0.76% and 0.76%(a), respectively, of expenses of the Portfolio, which
reduced dividends paid to Trust II.
(c) Ratio of expenses to average net assets prior to expense waivers was
0.84%(a).
(d) Ratio of net investment income to average net assets prior to expense
waivers was 8.02%(a).
(e) Based upon average shares outstanding throughout the period.
(f) Calculated without the deduction of sales charges.
See Notes to Trusts' Financial Statements
- ------
11
<PAGE>
ASTRA ADJUSTABLE RATE SECURITIES TRUST IV
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities at value* (identified cost $5,407,525) (Notes 1 and 2A)................ $ 2,803,065
Dividends receivable from Portfolio.............................................................. 13,166
Deferred organization expense (net of accumulated amortization of $30,976) (Note 2D)............. 20,891
Prepaid expenses................................................................................. 4,075
-------------
Total Assets................................................................................. 2,841,197
-------------
LIABILITIES:
Accrued expenses................................................................................. 19,034
-------------
NET ASSETS......................................................................................... $ 2,822,163
-------------
-------------
Net asset value per share ($2,822,163/901,840 shares) (Note 6)..................................... $ 3.13
-------------
-------------
At April 30, 1996 the components of net assets were as follows:
Paid-in capital.................................................................................. $ 31,297,008
Accumulated net realized loss on investments..................................................... (25,824,372)
Accumulated net investment deficit............................................................... (46,013)
Net unrealized depreciation of investments....................................................... (2,604,460)
-------------
Net Assets................................................................................... $ 2,822,163
=============
</TABLE>
- ------------------
* Investments of Astra Adjustable Rate Securities Trust IV consist entirely of
61,190 shares of Astra Institutional Adjustable Rate Securities Portfolio.
Cost for Federal income tax purposes is $5,407,525. See Notes 1 and 2A.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
INCOME:
Dividends from Portfolio....................................................................... $ 119,612
-------------
EXPENSES:
Distribution expenses (Note 4B)................................................................ 10,241
Shareholder servicing costs.................................................................... 4,128
Registration fees.............................................................................. 3,687
Amortization of organization expense (Note 2D)................................................. 5,170
Professional fees.............................................................................. 3,015
Insurance expense.............................................................................. 3,263
Administrative servicing costs (Note 5)........................................................ 1,707
Reports to shareholders........................................................................ 1,010
Miscellaneous.................................................................................. 619
Trustees' fees................................................................................. 352
-------------
Total expenses............................................................................... 33,192
-------------
Net investment income..................................................................... 86,420
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments............................................................... (1,874,548)
Net change in unrealized depreciation of investments........................................... 1,676,028
-------------
Net loss on investments...................................................................... (198,520)
-------------
Net decrease in net assets resulting from operations...................................... $ (112,100)
=============
</TABLE>
See Notes to Trusts' Financial Statements
- ------
12
<PAGE>
ASTRA ADJUSTABLE RATE SECURITIES TRUST IV
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 86,420 $ 858,115
Net realized loss on investments........................................... (1,874,548) (19,194,377)
Net change in unrealized depreciation of investments....................... 1,676,028 3,619,765
---------------- ----------------
Net decrease in net assets resulting from operations....................... (112,100) (14,716,497)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($0.112 and $0.211 per share,
respectively)............................................................ (132,433) (877,272)
Distributions from paid-in capital ($0.166 per share)...................... -- (686,694)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets derived from the net change in the number of
outstanding shares (a)................................................... (1,476,635) (56,587,157)
---------------- ----------------
Total decrease in net assets........................................... (1,721,168) (72,867,620)
Net assets at the beginning of the period.................................... 4,543,331 77,410,951
---------------- ----------------
NET ASSETS at the end of the period (including accumulated net investment
deficit of $46,013 and $0, respectively)................................... $ 2,822,163 $ 4,543,331
================ ================
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 (UNAUDITED) OCTOBER 31, 1995
---------------------------- --------------------------------
SHARES VALUE SHARES VALUE
------------ -------------- -------------- ----------------
<S> <C> <C> <C> <C>
Shares sold..................................... -- $ -- 158,416 $ 926,395
Shares issued in reinvestment of distributions
to shareholders............................... 18,623 61,107 98,614 463,587
Shares repurchased.............................. (477,610) (1,537,742) (10,481,720) (57,977,139)
------------ -------------- -------------- ----------------
Net decrease.................................. (458,987) $ (1,476,635) (10,224,690) $ (56,587,157)
============ ============== ============== ================
</TABLE>
See Notes to Trusts' Financial Statements
------
13
<PAGE>
ASTRA ADJUSTABLE RATE SECURITIES TRUST IV
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
MAY 7, 1993
(COMMENCEMENT OF
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, OPERATIONS) TO
APRIL 30,1996 ------------------------ OCTOBER 31,
(UNAUDITED) 1995 1994 1993
------------- --------- --------- ----------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period......... $ 3.340 $ 6.680 $ 7.400 $ 7.350
--------- --------- --------- ------------
Income (loss) from investment operations--
Net investment income...................... 0.080(e) 0.210 (e) 0.415 0.208
Net realized and unrealized gain (loss) on
investments.............................. (0.178)(e) (3.173)(e) (0.728) 0.050
--------- --------- (0.313) 0.258
--------- --------- --------- ------------
Less distributions--
Distributions from net investment
income................................... 0.112 0.211 0.407 0.208
Distributions from paid-in capital......... -- 0.166 -- --
--------- --------- --------- ------------
Total distributions...................... 0.112 0.377 0.407 0.208
--------- --------- --------- ------------
Net asset value, end of period............... $ 3.130 $ 3.340 $ 6.680 $ 7.400
========= ========= ========= ============
TOTAL RETURN(f).............................. (3.00%) (45.78%) (4.47%) 7.28%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands)..... $ 2,822 $ 4,543 $ 77,411 $ 126,708
Ratio to average net assets--
Expenses................................... 1.94%(a)(b) 1.37%(b)(c) 0.65%(b)(c) 0.50%(a)(b)(c)
Net investment income...................... 5.06%(a) 4.26%(d) 5.58%(d) 5.56%(a)(d)
Portfolio turnover rate...................... 5% 3% 70% 0%
</TABLE>
- ------------------
(a) Annualized
(b) Ratio of expenses to average net assets excludes 1.00%(a), 1.09%, 0.76% and
0.76%(a), respectively, of expenses of the Portfolio, which reduced
dividends paid to Trust IV.
(c) Ratio of expenses to average net assets prior to expense waivers was 1.42%,
0.86% and 0.75%(a), respectively.
(d) Ratio of net investment income to average net assets prior to expense
waivers was 4.20%, 5.37% and 5.31%(a), respectively.
(e) Based upon average shares outstanding throughout the period.
(f) Calculated without the deduction of sales charges.
See Notes to Trusts' Financial Statements
- ------
14
<PAGE>
ASTRA ADJUSTABLE RATE SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
NOTE 1--ORGANIZATION
Astra Strategic Investment Series (the 'Company') is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. On September 15, 1994 the Company's shareholders approved a change in
the Company's Declaration of Trust to permit the creation of additional classes
of shares of each of the Trust's series. Currently, the Company has authorized
an unlimited number of shares of beneficial interest without par value and at
April 30, 1996 had outstanding a single class of shares in eight series: Astra
Adjustable Rate Securities Trust I, I-A, II and IV (collectively, the 'Astra
Adjustable Rate Securities Trusts' or the 'Trusts'), Astra Adjustable U.S.
Government Securities Trust I, I-A, II and IV (collectively, the 'Astra
Adjustable U.S. Government Securities Trusts'), all of which are non-diversified
series. Effective March 1, 1995, the Trusts discontinued the public offering of
their shares.
The value of the Trusts' investment in shares of Astra Institutional Adjustable
Rate Securities Portfolio (the 'Portfolio'), a non-diversified series of Astra
Institutional Securities Trust ('AIST'), reflects their proportionate interest
in the net assets of the Portfolio. The financial statements of the Portfolio,
including the portfolio of investments, are included in this report and should
be read in conjunction with the financial statements of the Trusts.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
A. SECURITY VALUATION. The investment policy of the Trusts is to invest in
shares of the Portfolio. Shares of the Portfolio held by the Trusts are
valued at the net asset value then determined by the Portfolio. A valuation
committee of the Board of Trustees of AIST is responsible for establishing
security valuation policies, reviewing the valuation of portfolio
securities, monitoring the level of illiquid securities and reviewing
liquidity determinations for securities held by the Portfolio. AIST
considers to be illiquid all securities which cannot be disposed of within
seven days in the ordinary course of business at approximately the amount
at which the Portfolio values the security. Additionally, interest rate
swap contracts, interest-only and principal-only mortgage backed
securities, and special hazard certificates are treated as illiquid
securities in accordance with Securities and Exchange Commission policy.
Liquid securities are valued primarily using prices provided by independent
pricing services which use prices provided by market-markers or estimates
of market values obtained from yield and other data relating to instruments
or securities with similar characteristics, and secondarily based upon
market quotations and/or other available information. Securities for which
reliable market information or pricing service quotes are not readily
available, including illiquid securities, are valued at fair value as
determined in good faith by, or under procedures established by, the Board
of Trustees of AIST which procedures may include the delegation of certain
responsibilities regarding valuation to Astra Management Corporation (the
'Manager'). The Manager reports, as necessary, to the Trustees of AIST
regarding portfolio valuation determinations.
Short-term securities with less than sixty days remaining to maturity when
acquired by the Portfolio are valued on an amortized cost basis by the
Portfolio when the Trustees of AIST have determined that amortized cost is
fair value.
- ------
15
<PAGE>
B. FEDERAL INCOME TAXES. The Trusts intend to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and
to distribute all of their taxable income to their shareholders. Therefore,
no Federal income tax provision is required.
C. SECURITY TRANSACTIONS, INCOME AND DISTRIBUTIONS. As is common in the
industry, security transactions of the Portfolio and Trusts are accounted
for on the trade date. Interest income on adjustable rate mortgage
securities is recorded on the accrual basis at current interest rates.
Dividends to shareholders of the Portfolio from net investment income are
declared daily and reinvested monthly.
Dividends to shareholders of the Trusts from net investment income are
declared and paid or reinvested monthly. Discounts and premiums on
Portfolio debt securities are amortized in accordance with the provisions
of the Internal Revenue Code.
D. DEFERRED ORGANIZATION EXPENSES. All of the expenses incurred in connection
with the organization of the Trusts are being borne ratably by the Trusts
and are being amortized on a straight-line basis over periods of five years
from the date of commencement of operations.
NOTE 3--INVESTMENTS
For the six months ended April 30, 1996, the cost of purchases and the proceeds
from sales of investments in the Portfolio were as follows:
PURCHASES SALES
----------- -------------
Trust I................... $ 184,675 $ 2,111,386
Trust I-A................. 426,922 5,650,886
Trust II.................. 113,013 2,712,160
Trust IV.................. 167,483 1,804,405
At October 31, 1995 the Trusts had capital loss carryforwards for federal income
tax purposes as follows:
CAPITAL LOSS EXPIRES
CARRYFORWARD OCTOBER 31,
-------------- -------------
Trust I................. $ 15,256,000 2003
--------------
--------------
Trust I-A............... $ 54,000 2002
40,359,000 2003
--------------
$ 40,413,000
--------------
--------------
Trust II................ $ 665,000 2002
4,415,000 2003
--------------
$ 5,080,000
--------------
--------------
Trust IV................ $ 1,212,000 2002
22,738,000 2003
--------------
$ 23,950,000
--------------
--------------
NOTE 4--DISTRIBUTION PLANS
A. TRUST I AND TRUST I-A DISTRIBUTION PLANS. Trust I and Trust I-A have
adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act (the
'Distribution Plans'), whereby they will provide daily compensation to
Astra Fund (formerly Pilgrim) Distributors Corp., the Trusts' principal
underwriter (the 'Principal Underwriter') in the form of sales commissions
equal to 4% of the amount received by Trust I for each share sold and 5% of
the amount received by Trust I-A for each share sold (excluding
reinvestment of dividends and distributions) plus an interest fee
calculated by applying the rate of 1% over prime rate to the outstanding
balance of Uncovered Distribution Charges. Daily compensation payments will
be made monthly and are limited to an annual rate of 0.75% of each Trust's
daily net assets. During the six months ended April 30, 1996, the Principal
Underwriter earned daily compensation of $40,703 from Trust I-A. At April
30, 1996, Uncovered Distribution Charges (cumulative sales commissions and
interest fees reduced by cumulative daily compensation and contingent
deferred sales
- ------
16
<PAGE>
charges paid to the Principal Underwriter) were $3,176,374
for Trust I-A.
On November 1, 1994, Trust I had no Uncovered Distribution Charges pursuant
to the Distribution Plan and, accordingly, discontinued the accrual of
daily compensation payments. The Distribution Plan also contains provisions
which contractually obligate the Principal Underwriter to reimburse Trust
I, to the extent it has collected contingent deferred sales charges from
redeeming shareholders when there were no such Uncovered Distribution
Charges, for Trust I's pro rata share of the Portfolio's investment
management fee. This management fee is calculated at .65% of the
Portfolio's average daily net assets. During the six months ended April 30,
1996, such reimbursement amounted to $11,661 which is included in other
income in the accompanying financial statements of Trust I.
On August 5, 1994, the shareholders of Trust I and Trust I-A approved
changes to their respective distribution plans to provide a method by which
a proportionate amount of Uncovered Distribution Charges will be
transferred from the Trusts upon exchanges to other mutual funds for which
Astra Fund Distributors Corp. serves as Principal Underwriter and which
have substantially the same contingent deferred sales charge structure and
distribution plan.
Pursuant to the requirements of the Securities and Exchange Commission the
daily compensation (sales commission) payments to the Principal Underwriter
pursuant to the Distribution Plan must be reflected as operating expenses
of Trust I and Trust I-A. For periods through December 31, 1994, these
payments were treated as capital transactions and were not deductible for
Federal income tax purposes.
The Distribution Plans also provide for monthly payments to the Principal
Underwriter of a trail or maintenance fee in an amount equal to an annual
rate of 0.25% of the daily net assets of Trust I and Trust I-A. During the
six months ended April 30, 1996, the Principal Underwriter earned
maintenance fees of $4,485 from Trust I and $13,567 from Trust I-A.
B. TRUST II AND TRUST IV DISTRIBUTION PLANS. Trust II and Trust IV have
adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act (the
'Distribution Plans'), whereby Trust II may pay up to a maximum annual rate
of 0.25% of its average daily net assets and Trust IV may pay up to a
maximum annual rate of 0.60% of its average daily net assets to the
Principal Underwriter as reimbursement for expenses incurred in the
distribution of the shares of Trust II and Trust IV. Pursuant to the
Distribution Plans, the Principal Underwriter is entitled to reimbursement
each month (up to a maximum of 0.25% of Trust II's daily net assets and
0.60% of Trust IV's daily net assets) for its actual expenses incurred in
the distribution and promotion of Trust II's and Trust IV's shares,
including the printing of prospectuses used for sales purposes,
advertisements, expenses of preparation and printing of sales literature,
and other distribution related expenses, including any distribution or
service fees paid to security dealers and others who have executed a
distribution or service agreement with the Principal Underwriter. The
Distribution Plans provide that the Principal Underwriter may include as
distribution expenses a portion of its overhead expenses directly
attributable to the distribution of Trust II's and Trust IV's shares,
including personnel and out-of-pocket costs. The Distribution Plans permit
the Principal Underwriter to carryforward for a maximum of three years
(without carrying charges) distribution expenses covered by the
Distribution Plans for which it has not yet received reimbursement. At
April 30, 1996, the Principal Underwriter had incurred $1,127,632 of
distribution expenses in excess of amounts currently reimbursable by
- ------
17
<PAGE>
Trust II and $1,471,168 of distribution expenses in excess of amounts
currently reimbursable by Trust IV. During the six months ended April 30,
1996, the Principal Underwriter received distribution expense
reimbursements of $4,052 from Trust II and $10,241 from Trust IV.
Distribution expenses incurred by the Principal Underwriter included $406
and $432 for the salaries and related costs of certain of its employees
involved in the sales of Trust II's and Trust IV's shares, respectively.
NOTE 5--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Trusts invest substantially all of their assets in the Portfolio, which has
the same investment objective as each of the Trusts. The Trustees of AIST
establish the Portfolio's investment policies and supervise and review the
operations and management of the Portfolio. For furnishing the Portfolio with
investment advice and investment management and administrative services with
respect to the Portfolio's assets, including making specific recommendations as
to the purchase and the sale of portfolio securities, furnishing requisite
office space and personnel, and in general supervising and managing the
Portfolio's investments subject to the ultimate supervision and direction of
AIST's Trustees, the Manager is paid monthly a fee equal to 0.65% per annum of
the first $500 million of average daily net assets of the Portfolio. The annual
rate is reduced to 0.60% on net assets from $500 million to $1 billion and to
0.55% on net assets over $1 billion. The management fees paid by the Portfolio
to the Manager are expenses of the Portfolio and reduce the net investment
income available for distribution by the Portfolio to the Trusts. The Manager
has agreed to reimburse the Portfolio and Trusts to the extent required so that
the aggregate expenses do not exceed the expense limitations applicable under
the securities laws or regulations of those states or jurisdictions in which the
Trusts' shares are registered or qualified for sale. Currently, the most
restrictive of such expense limitations would require the Manager to reimburse
the Portfolio and Trusts to the extent required so that the Portfolio's and
Trusts expenses, as described above, for any fiscal year do not exceed 2.50% of
the first $30 million of average net assets, 2.00% of the next $70 million of
average net assets and 1.50% of the remaining average net assets. The amount of
any such required reimbursement, however, is limited to the management fees paid
by the Portfolio to the Manager. Expenses for purposes of these expense
limitations include the management fee, but exclude distribution expenses,
brokerage commissions and fees, taxes, interest and extraordinary expenses such
as litigation paid or incurred by the Trusts or the Portfolio.
The Trusts have retained Atlas Holdings Group Inc. (The 'Administrator') to
provide administration for the Trusts pursuant to an administration agreement.
These administrative services include supervising the preparation and filing of
all documents required for compliance by the Trusts with applicable laws and
regulations, supervising the maintenance of books and records and other general
and administrative responsibilities. For providing these services the
Administrator receives a fee equal to 0.10% of each Trust's average daily net
assets.
Certain officers and trustees of the Company are also officers and/or
directors/trustees of AIST, the Administrator, the Manager, and the Principal
Underwriter.
NOTE 6--EARLY WITHDRAWAL CHARGES
Shares of Trust I, Trust I-A and Trust IV which are redeemed may be subject to a
contingent deferred sales charge. The contingent deferred sales charge is not
imposed on shares acquired through the reinvestment of dividends and
distributions or on the appreciation of the value of shares acquired over their
purchase price. Redemption proceeds are applied first against shares not subject
to the contingent deferred sales charge for purposes of calculating such charge.
The contingent deferred sales charges are paid by the redeeming shareholder to
the Principal Underwriter at the time of redemption. The contingent deferred
sales charges for Trust I and Trust I-A are imposed at the rate of 4% for
redemptions in the first year after
- ------
18
<PAGE>
purchase, declining to 3%, 2%, and 1% in the second, third and fourth years,
respectively. The contingent deferred sales charges for Trust IV are imposed at
the rate of 0.25% of redemptions within 3 months of the date of purchase. During
the six months ended April 30, 1996, the Principal Underwriter received
contingent deferred sales charges of $81,822 from redemptions of Trust I-A
shares, and $-0- from redemptions of Trust IV shares.
NOTE 7--LEGAL MATTERS
Between December 1994 and July 1995, various complaints have been filed by
certain shareholders of the Astra Adjustable Rate Securities Trusts and the
Astra Adjustable U.S. Government Securities Trusts (collectively, the 'Astra
Trusts') in the United States District Court for the Central District of
California and in the Superior Court for the State of California against the
Company and certain of its officers and trustees, AIST and certain of its
officers and trustees, Astra Management Corporation, Astra Fund Distributors
Corporation, and, Atlas Holdings Group Inc. and its principal stockholder and
certain of its employees. These complaints have been consolidated in the United
States District Court for the Central District of California in the matter
referred to as 'In re Pilgrim Securities Litigation.'
The complaints allege violations of the Securities Act of 1933 and the
Investment Company Act of 1940 relating principally to disclosure concerning
pricing and liquidity of portfolio securities held by the Portfolios of AIST.
The complaints seek relief measured by the consideration each shareholder paid
for shares of the Astra Trusts and interest thereon, less the amount of income
received thereon, or in the event the shareholder no longer owns such shares,
for damages, plus interest. Management of the Company believes the complaints
are without merit and intends, and has been advised that each of the other
defendants intends, to vigorously defend these actions. The ultimate outcome of
these matters, however, cannot presently be determined and accordingly the Astra
Trusts have made no provision for any losses which may result from settlement of
these complaints.
- ------
19
<PAGE>
ASTRA INSTITUTIONAL ADJUSTABLE RATE SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS AS OF APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<CAPTION>
MARKET
PRINCIPAL INTEREST VALUE
AMOUNT RATE* MATURITY (NOTE 2A)
- ------------ --------- --------- -------------
<S> <C> <C> <C> <C>
ADJUSTABLE RATE MORTGAGE SECURITIES: 84.6%
U.S. GOVERNMENT AGENCY SECURITIES: 84.6%
$ 970,509 Federal Home Loan Mtge. Corp., Pool 845249............. 8.031% 11/01/22 $ 991,744
943,713 Federal National Mtge. Assoc., Pool 124666............. 7.711% 01/01/23 965,536
1,020,694 Federal National Mtge. Assoc., Pool 124862............. 7.353% 05/01/23 1,044,935
1,034,390 Federal National Mtge. Assoc., Pool 124870............. 7.376% 05/01/23 1,055,078
1,389,576 Federal National Mtge. Assoc., Pool 264864............. 7.494% 01/01/24 1,423,447
1,890,186 Government National Mtge. Assoc., Pool 8443............ 6.500% 06/20/24 1,912,632
2,982,284 Government National Mtge. Assoc., Pool 8770............ 6.500% 12/20/25 3,006,530
2,495,859 Government National Mtge. Assoc., Pool 8793............ 7.000% 01/20/26 2,539,536
-------------
Total U.S. Government Agency Securities................ 12,939,438
-------------
SUBORDINATED RESIDENTIAL MORTGAGE SECURITIES: 0.0%
1,553,330(R) Coast Federal Bank 1991-2, Class B-1................... 1.022% 11/25/21 1,549
612,666(R) Paine Webber Mortgage Acceptance Corp. 1991-1, Class
B.................................................... 0.854% 02/21/21 841
-------------
Total Subordinated Residential Mortgage Securities..... 2,390
-------------
Total Adjustable Rate Mortgage Securities (Cost
$14,918,578)..................................... 12,941,828
-------------
SHORT-TERM SECURITIES: 31.2%
U.S. GOVERNMENT & AGENCY OBLIGATIONS: 31.2%
500,000 U.S. Treasury Note..................................... 5.250% 12/31/97 494,400
4,290,000 Federal Home Loan Mtge. Corp. Discount Note............ 5.300% 05/01/96 4,290,000
-------------
Total Short-Term Securities (Cost $4,790,138).......... 4,784,400
-------------
Total Investments In Securities (Cost $19,708,716)..... 115.8% 17,726,228
Liabilities in Excess of Other Assets--Net............. (15.8%) (2,423,135)
--------- -------------
Total Net Assets....................................... 100.0% $ 15,303,093
========= =============
</TABLE>
- ------------------
(R) Restricted securities (See Note 3).
* Rates shown are as of April 30, 1996. Interest rates on adjustable rate
mortgage securities reset periodically.
** Cost for Federal income tax purposes is $19,708,716 and net unrealized
depreciation consists of:
<TABLE>
<S> <C> <C>
Gross Unrealized Appreciation......................................... $ 1,370
Gross Unrealized Depreciation......................................... (1,983,858)
-------------
Net Unrealized Depreciation........................................... $ (1,982,488)
=============
</TABLE>
See Notes to Financial Statements
- ------
20
<PAGE>
ASTRA INSTITUTIONAL ADJUSTABLE RATE SECURITIES PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities at value (identified cost $19,708,716) (Note 2A)...................... $ 17,726,228
Cash............................................................................................ 3,379
Receivables:
Interest...................................................................................... 125,735
Principal repayments.......................................................................... 69,728
Securities sold............................................................................... 2,045,939
Deferred organization expense (net of accumulated amortization of $41,782) (Note 2E)............ 4,948
--------------
Total Assets.................................................................................. 19,975,957
--------------
LIABILITIES:
Payable for securities purchased................................................................ 4,468,156
Distribution payable to Trusts.................................................................. 72,860
Accrued expenses................................................................................ 131,848
--------------
Total Liabilities............................................................................. 4,672,864
--------------
NET ASSETS........................................................................................ $ 15,303,093
==============
Net asset value per share ($15,303,093/334,061 shares)............................................ $ 45.81
==============
At April 30, 1996 the components of net assets were as follows:
Paid-in capital................................................................................. $ 130,691,217
Accumulated net realized loss on investments.................................................... (113,435,534)
Undistributed net investment income............................................................. 29,898
Net unrealized depreciation of investments...................................................... (1,982,488)
--------------
Net Assets.................................................................................... $ 15,303,093
==============
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
- ------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
INCOME:
Interest....................................................................................... $ 872,889
-------------
EXPENSES:
Investment management fee (Note 4)............................................................. 69,316
Recordkeeping fees............................................................................. 18,225
Custody fees................................................................................... 7,795
Professional fees.............................................................................. 5,139
Amortization of organization expense (Note 2E)................................................. 4,601
Miscellaneous.................................................................................. 1,195
-------------
Total expenses............................................................................... 106,271
-------------
Net investment income..................................................................... 766,618
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments............................................................... (12,456,897)
Net change in unrealized depreciation of investments........................................... 11,216,958
-------------
Net loss on investments...................................................................... (1,239,939)
-------------
Net decrease in net assets resulting from operations...................................... $ (473,321)
=============
</TABLE>
See Notes to Financial Statements
- ------
21
<PAGE>
ASTRA INSTITUTIONAL ADJUSTABLE RATE SECURITIES PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1996 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1995
---------------- ----------------
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 766,618 $ 8,581,527
Net realized loss on investments........................................... (12,456,897) (85,991,915)
Net change in unrealized depreciation of investments....................... 11,216,958 11,674,390
-------------- --------------
Net decrease in net assets resulting from operations....................... (473,321) (65,735,998)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income ($1.542 and $2.545 per share,
respectively)........................................................... (736,720) (4,981,182)
Distributions from paid-in capital ($0.316 per share)...................... -- (619,391)
CAPITAL SHARE TRANSACTIONS:
Net decrease in net assets derived from the net change in the number of
outstanding shares (a).................................................. (11,653,765) (234,382,963)
-------------- --------------
Total decrease in net assets.......................................... (12,863,806) (305,719,534)
Net assets at the beginning of the period.................................... 28,166,899 333,886,433
-------------- --------------
NET ASSETS at the end of the period.......................................... $ 15,303,093 $ 28,166,899
============== ==============
</TABLE>
- ------------------
(a) A summary of capital share transactions is as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1996 (UNAUDITED) OCTOBER 31, 1995
--------------------------- ------------------------------
SHARES VALUE SHARES VALUE
---------- --------------- ------------ ----------------
<S> <C> <C> <C> <C>
Shares sold....................................... 6,121 $ 288,787 25,199 $ 2,037,744
Shares issued in payment of distributions to
shareholders.................................... 14,100 661,738 48,815 3,084,153
Shares repurchased................................ (270,180) (12,604,290) (3,211,688) (239,504,860)
---------- --------------- ------------ ----------------
Net decrease.................................... (249,959) $ (11,653,765) (3,137,674) $ (234,382,963)
========== =============== ============ ================
</TABLE>
See Notes to Financial Statements
- ------
22
<PAGE>
ASTRA INSTITUTIONAL ADJUSTABLE RATE SECURITIES PORTFOLIO
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------
<TABLE>
<CAPTION>
NOVEMBER 22, 1991
(COMMENCEMENT OF
SIX MONTHS ENDED YEAR ENDED OCTOBER 31, OPERATIONS) TO
APRIL 30, 1996 --------------------------------- OCTOBER 31,
(UNAUDITED) 1995 1994 1993 1992
---------------- --------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning
of period................. $ 48.230 $ 89.710 $ 99.040 $ 99.050 $ 100.000
---------------- --------- ---------- ---------- ------------------
Income (loss) from
investment operations--
Net investment
income.................. 1.684(d) 6.049(d) 6.460 7.804 8.606
Net realized and
unrealized loss on
investments............. (2.562)(d) (44.668)(d) (9.750) (0.004) (0.950)
---------------- --------- ---------- ---------- ------------------
Total from investment
operations............ (0.878) (38.619) (3.290) 7.800 7.656
---------------- --------- ---------- ---------- ------------------
Less distributions--
Distributions from net
investment income....... 1.542 2.545 6.040 7.810 8.606
Distributions from paid-in
capital................. -- 0.316 -- -- --
---------------- --------- ---------- ---------- ------------------
Total distributions..... 1.542 2.861 6.040 7.810 8.606
---------------- --------- ---------- ---------- ------------------
Net asset value, end of
period.................. $ 45.810 $ 48.230 $ 89.710 $ 99.040 $ 99.050
================ ========= ========== ========== ==================
TOTAL RETURN................ (1.88%) (44.04%) (3.56%) 8.14% 8.51%(a)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(in thousands)............ $ 15,303 $ 28,167 $ 333,886 $ 455,802 $ 156,682
Ratio to average net
assets--
Expenses.................. 1.00%(a) 1.09% 0.76% 0.76% 0.76%(a)(b)
Net investment income..... 7.19%(a) 8.87% 6.55% 7.61% 9.14%(a)(c)
Portfolio turnover rate..... 174% 45% 61% 107% 254%
</TABLE>
- ------------------
(a) Annualized
(b) Ratio of expenses to average net assets prior to expense waivers was
0.79%(a).
(c) Ratio of net investment income to average net assets prior to expense
waivers was 9.11%(a).
(d) Based upon average shares outstanding throughout the period.
See Notes to Financial Statements
- ------
23
<PAGE>
ASTRA INSTITUTIONAL ADJUSTABLE RATE SECURITIES PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1996 (UNAUDITED)
- ------------------------------
NOTE 1--ORGANIZATION
Astra Institutional Securities Trust (the 'Company') is registered under the
Investment Company Act of 1940, as amended, as an open-end management investment
company. The Company was organized as a Massachusetts Business Trust on
September 4, 1991 with an unlimited number of shares of beneficial interest
without par value. The Company offers shares in two non-diversified series,
Astra Institutional Adjustable Rate Securities Portfolio (the 'Portfolio') and
Astra Institutional Adjustable U.S. Government Securities Portfolio. The
Portfolio is structured to serve as the investment vehicle for four affiliated
open-end management investment companies: Astra Adjustable Rate Securities Trust
I, I-A, II and IV (collectively, the 'Trusts'). The Trusts invest substantially
all of their net assets in the Portfolio, which has the same investment
objectives as that of the Trusts.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
A. SECURITY VALUATION. A valuation committee of the Board of Trustees is
responsible for establishing security valuation policies, reviewing the
valuation of portfolio securities, monitoring the level of illiquid
securities and reviewing liquidity determinations. The Company considers to
be illiquid all securities which cannot be disposed of within seven days in
the ordinary course of business at approximately the amount at which the
Portfolio values the security. Additionally, interest rate swap contracts,
interest-only and principal-only mortgage backed securities, and special
hazard certificates are treated as illiquid securities in accordance with
Securities and Exchange Commission policy. Liquid securities are valued
primarily using prices provided by independent pricing services which use
prices provided by market-makers or estimates of market values obtained
from yield and other data relating to instruments or securities with
similar characteristics, and secondarily based upon market quotation and/or
other available information. Securities for which reliable market
information or pricing service quotes are not readily available, including
illiquid securities, are valued at fair value as determined in good faith
by, or under procedures established by, the Board of Trustees, which
procedures may include the delegation of certain responsibilities regarding
valuation to Astra Management Corporation (the 'Manager'). The Manager
reports, as necessary, to the Trustees of the Company regarding portfolio
valuation determinations. Short-term securities with less than sixty days
remaining to maturity when acquired by the Portfolio are valued on an
amortized cost basis by the Portfolio when the Board of Trustees has
determined that amortized cost is fair value.
B. FEDERAL INCOME TAXES. The Portfolio intends 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 Federal income tax provision is required.
C. SECURITY TRANSACTIONS, INCOME AND DISTRIBUTIONS. As is common in the
industry, security transactions are accounted for on the trade date.
Interest income on adjustable rate mortgage securities is recorded on the
accrual basis at current interest rates. Dividends to shareholders from net
investment income are declared daily and paid or reinvested monthly.
Discounts and premiums on debt securities are amortized in accordance with
the provisions of the Internal Revenue Code.
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D. INTEREST RATE SWAP CONTRACTS. The Portfolio may enter into interest rate
swap contracts as a hedging technique. Interest rate swap contracts are
marked-to-market daily using market quotations or independent pricing
services. The change in market value is recorded by the Portfolio as an
unrealized gain or loss. Interest income (expense) is accrued daily on the
contract's notional amount and applicable interest rates.
Interest rate swap contracts may expose the Portfolio to risks resulting
from unanticipated movements in interest rates or the failure of the
counterparty to the agreement to perform in accordance with the terms of
the contract.
E. DEFERRED ORGANIZATION EXPENSES. All of the Portfolio's expenses in
connection with its organization are being borne by the Portfolio and are
amortized on a straight-line basis over a period of five years.
NOTE 3--INVESTMENTS
For the six months ended April 30, 1996, the cost of purchases and the proceeds
from sales of investments and principal repayments, excluding short-term
securities, aggregated $34,332,728 and $42,722,845, respectively.
At October 31, 1995, the Portfolio had a capital loss carryforward for Federal
income tax purposes of $100,979,000 of which $221,000 expires in 2000,
$3,271,000 in 2001, $15,105,000 in 2002 and $82,382,000 in 2003.
NOTE 4--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Manager provides the Portfolio with investment management and administrative
services under an Investment Management Agreement. The Manager furnishes all
investment advice, office space and salaries of personnel needed by the
Portfolio, except those involved with record-keeping, daily net asset value
calculations, placing orders for the execution of portfolio transactions,
shareholder servicing, and maintaining registration of shares under state
securities laws. As compensation for its services, the Manager is paid monthly a
fee which is equal to the annual rate of 0.65% of the first $500 million of
average daily net assets, 0.60% on net assets from $500 million to $1 billion
and 0.55% on net assets over $1 billion.
The Manager has agreed to reimburse the Portfolio and Trusts to the extent
required so that the aggregate expenses do not exceed the expense limitations
applicable to the Portfolio and Trust under the securities laws or regulations
of those states or jurisdictions in which the Trusts' shares are registered or
qualified for sale. Currently, the most restrictive of such expense limitations
would require the Manager to reimburse the Portfolio and Trusts to the extent
required so that the Portfolio's and Trusts' expenses, as described above, for
any fiscal year do not exceed 2 1/2% of the first $30 million of average daily
net assets, 2% of the next 70 million of average net assets and 1 1/2% of the
remaining average net assets. The amount of any such required reimbursement is
limited to the management fees paid by the Portfolio to the Manager. Expenses
for purposes of this expense limitation include the management fee, but exclude
distribution expenses, brokerage commissions and fees, taxes, interest and
extraordinary expenses such as litigation, paid or incurred by the Portfolio or
Trusts.
Certain officers and trustees of the Company are also officers and/or
trustees/directors of the Trusts and the Manager.
NOTE 5--LEGAL MATTERS
Between December 1994 and May 1995, various complaints have been filed by
certain shareholders of Astra Adjustable U.S. Government Securities Trusts I,
I-A, II, III, and IV and Astra Adjustable Rate Securities Trusts I, I-A, II,
III, and IV (collectively, the 'Astra Trusts') in the United States District
Court for the Central District of California and in the Superior Court for the
State of California against the Company and certain of its officers and
trustees, the Astra Trusts and certain of their officers and trustees, Astra
Management Corporation, Astra Fund Distributors
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<PAGE>
Corporation, and Atlas Holding Group Inc. and its principal stockholder and
certain of its employees. These complaints have been consolidated in the United
States District Court for the Central District of California in the matter
referred to as 'In re Pilgrim Securities Litigation.'
The complaints allege violations of the Securities Act of 1933 and the
Investment Company Act of 1940 relating principally to disclosure concerning
pricing and liquidity of portfolio securities held by the two Portfolios of the
Company. The complaints seek relief measured by the consideration each
shareholder paid for shares of the Astra Trusts with interest thereon, less the
amount of income received thereon, or in the event the shareholder no longer
owns such shares, for damages, plus interest. Management of the Company believes
the complaints are without merit and intends, and has been advised that each of
the other defendants intends, to vigorously defend these actions. The ultimate
outcome of these matters, however, cannot presently be determined and
accordingly the Portfolios have made no provision for any losses which may
result from settlement of these complaints.
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<PAGE>
ASTRA GROUP
FAMILY OF FUNDS
- ------------------------------
ADJUSTABLE-INCOME FUNDS
- ------------------------------
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST I-A
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST II
ASTRA ADJUSTABLE U.S. GOVERNMENT SECURITIES TRUST IV
ASTRA ADJUSTABLE RATE SECURITIES TRUST I
ASTRA ADJUSTABLE RATE SECURITIES TRUST I-A
ASTRA ADJUSTABLE RATE SECURITIES TRUST II
ASTRA ADJUSTABLE RATE SECURITIES TRUST IV
FIXED-INCOME FUNDS
- ------------------------------
ASTRA ALL-AMERICAS GOVERNMENT INCOME TRUST
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND I
ASTRA SHORT-TERM MULTI-MARKET INCOME FUND II
- ------------------
Prospectuses containing more complete information about the Funds, including
charges and expenses, may be obtained from Astra Fund Distributors Corp. Read
the Prospectus carefully before you invest or send money.
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27
<PAGE>
- -------------------------------
750 B Street
Suite 2350
San Diego, CA 92101
- -------------------------------
ASTRA ADJUSTABLE U.S.
RATE SECURITIES TRUSTS
I, I-A, II, IV
Investment Manager
Astra Management Corp.
750 B Street
Suite 2350
San Diego, CA 92101
1-619-238-7100
Principal Underwriter
Astra Fund Distributors Corp.
750 B Street
Suite 2350
San Diego, CA 92101
1-800-219-1080
Shareholder Servicing Agent
DST Systems, Inc.
P.O. Box 419174
Kansas City, Missouri 64141
1-800-441-7267
Transfer Agent
Investors Fiduciary Trust Company
c/o DST Systems, Inc.
P.O. Box 419174
Kansas City, Missouri 64141
This report is submitted for the general information of the
shareholders of the Trusts. It is not authorized for distribution
to prospective investors in the Trusts unless preceded or
accompanied by an effective prospectus which includes details
regarding the Trusts' objectives, policies, sales commissions and
other information.
AARST 696 3 AST 606113
ASTRA
ARM
FUNDS
SEMI-ANNUAL REPORT
APRIL 30, 1996
ASTRA ADJUSTABLE
RATE SECURITIES TRUSTS
I, I-A, II, IV
[LOGO]
ASTRA
