<PAGE> 1
- ---------------------
DEAR ANCHOR SERIES TRUST INVESTOR:
Results during the first half of the Anchor Series Trust's
fiscal year (ending June 30, 1997) were strong on both an
absolute basis and relative to similar funds. Equity markets
provided investors with strongly positive returns for the past
six months, both in the U.S. (the S&P 500 returned 20.6%) and
internationally (MSCI EAFE returned 11.4%). Bond markets were
also modestly positive for the six months ended June 30, 1997
with the Lehman Aggregate up 3.1%. The Anchor Series Trust
equity and fixed income portfolios generally outperformed in
these rising markets. The Anchor Series Trust serves as the
underlying investment for the ICAP II Variable Annuity issued by
Anchor National Life Insurance Company and, in New York, by
First SunAmerica Life Insurance Company.
The following information from Wellington Management Company,
LLP ("Wellington Management"), the sub-adviser for the Anchor
Series Trust, should give you some insight into the markets over
the past six months and how conditions affected the performance
of the underlying investments.
ECONOMIC OVERVIEW
Driving U.S. markets is an economy that continues to post
solid growth with low inflation, expanding corporate profits and
relatively stable interest rates. This is a very constructive
environment for financial markets and one that we believe can
endure over the next year or so. One of the key factors in the
strength of the stock markets is continued earnings growth. We
continue to see sustainable earnings growth and estimate the S&P
500 operating earnings to grow 11% this year and an additional
9% in 1998. Underpinning this excellent earnings environment is
our assumption of moderate domestic demand growth coupled with a
continued focus on cost control and productivity by U.S.
corporations. We believe the Federal Reserve is likely to hold
rates steady at the next meeting. Nevertheless, chances are good
that at least one more rate hike is in the offing -- insurance
against potential wage pressures and "irrational exuberance" in
the stock market. In any event, we continue to stress that there
is no need for aggressive Fed tightening. In real terms the
Federal Funds Rate has risen from 2% at year end 1996 to 3.3%
currently, which by historical standards already puts us in a
moderately restrictive mode. Solid growth, low inflation, rising
corporate profits and minimal interest rate risk will continue
to characterize the U.S. economic and financial landscape in the
quarters ahead. This is an impressive combination for the
seventh year of an economic expansion. Given the general lack of
imbalances in our economy, this expansion has the potential to
be the longest in post-war history. The major industrialized
economies outside the U.S. are all poised to grow 2%-3% in the
year ahead as well, and inflation looks well behaved globally.
Within this context, Wellington Management provides the
following investment comments for each of the twelve Anchor
Series Trust portfolios in the ICAP II Variable Annuity for the
six months ended June 30, 1997.
EQUITY PORTFOLIOS
The Growth and Income Portfolio seeks high current income and
long-term capital appreciation through investment in common
stocks and convertible securities. The portfolio benefited from
its focus on large-capitalization U.S. stocks during the first
six months, providing investors with a 19.2% return, placing it
in the top quartile of similar growth and income variable
annuity funds, as measured by Lipper Analytical, and
---------------------
1
<PAGE> 2
- ---------------------
narrowly trailing the S&P 500's return of 20.6%. As of June 30,
the portfolio was positioned as follows: 19% in finance; 14% in
healthcare; 11% in information technology; and 12% in consumer
staples. The portfolio was 90% invested in common stocks, 8% in
convertible securities and 2% in cash equivalents.
The Growth Portfolio seeks capital appreciation through
investments in larger and medium-sized companies that have
records of above-average growth and continued prospects for
solid growth in the future. The portfolio invests in
high-quality companies across the range of market
capitalization. The Growth Portfolio provided an 18.4% return in
the first six months of 1997, placing it in the top quartile of
similar growth variable annuity funds, as measured by Lipper
Analytical, which on average returned 13.6% over this time
period. The Growth Portfolio modestly trailed the S&P 500 return
of 20.6%. The portfolio on June 30 was positioned with 89% of
assets invested in stocks which are above $1 billion in market
capitalization (including 63% which are above $10 billion in
capitalization) while the remaining 11% of investments are below
$1 billion in market capitalization. Major sector concentrations
were as follows: 18% in information technology; 17% in finance;
14% in the industrial and commercial sector; and 13% in
healthcare.
The Capital Appreciation Portfolio seeks long-term capital
appreciation through investments in growth equity securities
that are widely diversified by industry and company. These
securities will generally consist of a great proportion of
smaller companies that may be newer and less seasoned, or that
represent new or changing industries. The Capital Appreciation
Portfolio provided investors with a 10.3% return for the first
six months of 1997, ahead of the Lipper Capital Appreciation
category average return of 9.7%. These results were in line with
smaller capitalization indices such as the Russell 2000, which
provided a 10.2% return for the first six months of the year.
The portfolio was invested at the end of June in the following
sectors: 28% in information technology; 14% in healthcare; 13%
in information and entertainment; and 11% in consumer
discretionary. In terms of market capitalization, 28% of the
portfolio was larger than $5 billion, 47% of the portfolio was
between $1 billion and $5 billion, and 25% was below $1 billion.
The Foreign Securities Portfolio seeks long-term capital
appreciation through investment in a diversified portfolio of
equity securities issued by foreign companies and denominated in
foreign currencies. The Foreign Securities Portfolio provided
investors with a 9.1% return for the first six months of 1997,
below the Lipper competitive group as well as the MSCI benchmark
(MSCI All Country Free Ex-US) which returned 12.1% and 12.7%,
respectively. MSCI EAFE returned 11.4%. The primary cause for
this lag in the portfolio's relative performance was an
overweight position and security selection in several Pacific
Basin countries, including Singapore and Thailand, together with
having avoided certain well-performing securities in the Hong
Kong market. In Europe, which accounted for 48% of assets at the
end of June, the portfolio was hurt recently by investments in
French banks. In Japan, which accounted for 24% of assets, the
portfolio's underweight relative to the MSCI indices added to
returns.
The Natural Resources Portfolio seeks to outpace inflation
through investments in natural resource companies around the
world. The portfolio met its objective, providing a 1.6% return
in the first six months of 1997, ahead of the seasonally
adjusted Consumer Price Index (CPI) rise of 1.4% for the first
six months, as well as placing the portfolio ahead of the Lipper
average of similar natural resource variable annuity portfolios,
which had a return of -1.3% during this time period. Investments
in paper stocks have
- ---------------------
2
<PAGE> 3
- ---------------------
been additive to returns while the gold commitment (a declared
area of concentration for this fund requiring a 25% minimum
weighting) held back returns. The portfolio on June 30 was
composed of 33% energy, 11% paper and forest products, and 48%
metals and minerals including fulfilling the prospectus
requirement of 25% in gold-related industries.
FIXED INCOME PORTFOLIOS
The Money Market Portfolio provided a 2.46% return, identical
to the IBC All Taxable Average (formerly IBC/Donoghue All
Taxable Average), which is the average net performance of all
the money market mutual funds included in IBC's All Taxable
Category. The Federal Reserve has left short term interest rates
anchored at 5.50% since its last rate move in March. Going
forward, we believe the Federal Reserve is unlikely to move
short term interest rates soon. The toughest issue facing the
fixed income market now is deciding whether the economic cycle
has turned, or if it has temporarily slowed following an
extremely robust period. We are inclined to think of the
slowdown as temporary given the high levels of employment and
confidence, which should translate into renewed consumer
spending. This makes us cautious on the market following the
recent sharp decline in yields. On June 30, the portfolio had a
weighted average maturity of 37 days.
The Government and Quality Bond Portfolio seeks to provide
relatively high current income, liquidity and security of
principal. The Government and Quality Bond Portfolio provided
investors with a 2.9% return for the six months ended June 30,
1997, slightly outperforming the Lipper average of similar
General U.S. Government variable annuity funds, which returned
2.7% and slightly lagging (after all fund expenses) the Lehman
Aggregate return of 3.1%. The portfolio at the end of June had
an effective duration of 6.0 years, compared to 4.7 years for
the Lehman Aggregate. Portfolio holdings were diversified by
sectors as follows: 25% in U.S. Treasury and agency securities,
43% in mortgage-backed securities, 27% in investment grade
corporate bonds, 5% in cash equivalents.
The Fixed Income Portfolio seeks to generate a high level of
current income that is, at the same time, consistent with
preservation of principal through investments in corporate bonds
and U.S. Government securities. For the six months ended June
30, 1997, the Fixed Income Portfolio returned 3.2%, ahead of the
Lehman Government/ Corporate Index, which returned 2.7%, and
slightly ahead of the Lipper average of similar Corporate Debt
BBB variable annuity funds, which returned 3.1%. The portfolio
was positioned at the end of June with an effective duration of
5.2 years, compared to 5.1 years for the Lehman
Government/Corporate Index. In terms of sector exposure, the
portfolio was invested as follows: 30% in investment grade
corporate bonds; 28% in U.S. Treasury and agency securities; 21%
in mortgage-backed securities; 16% in high yield corporate
bonds; and 5% in U.S. Dollar denominated international bonds.
The High Yield Portfolio seeks to provide high current income
and capital appreciation by investing in corporate bonds rated
BBB/Baa or lower. The High Yield Portfolio provided investors
with a 5.6% return for the first six months of 1997, slightly
below the Lehman High Yield average return of 5.8% and the
Lipper average of high yield variable annuity funds, which
returned 6.1%. On June 30, the portfolio comprised 1% in Baa and
split-rated securities, 18% in Ba rated securities, 77% in
B-rated securities, and 4% below B or unrated. In terms of
sector weighting, the largest areas of investment were 13% in
metals, 9% in basic industries, and 10% in media and
entertainment.
---------------------
3
<PAGE> 4
- ---------------------
The Target '98 Portfolio is structured to mature in November
of 1998. Given this approaching date, the portfolio provided
investors with a return of 2.5% for the first six months of
1997, in line with Treasury bonds of a year and a half duration.
The portfolio remained fully invested at the end of June with
87% in zero coupon bonds and the remainder in corporate bonds.
BALANCED PORTFOLIOS
The Multi-Asset Portfolio seeks to provide investors with
long-term total investment return consistent with moderate
investment risk. The portfolio achieves this mandate through a
weighting of approximately 60% in U.S. core equities and 40% in
U.S. investment grade bonds. The Multi-Asset Portfolio returned
13.9% for the first six months of 1997, outperforming the Lipper
Flexible Variable Annuity category, which returned 10.4%. We
believe the portfolio's returns were benefited by strong U.S.
stock selection as well as a policy mix that emphasized large
capitalization U.S. stocks. The portfolio at the end of June was
composed of 59% equities, 36% fixed-income securities, and 5%
cash equivalents.
The Strategic Multi-Asset Portfolio seeks to obtain high
long-term total investment return through investment in U.S.
stocks, foreign stocks, aggressive stocks and fixed income
securities. The Strategic Multi-Asset Portfolio provided
investors with a 11.1% return for the six months ended June 30,
1997. These results were well ahead of the Lipper Global
Variable Annuity category, which returned 10.0% over the same
period. The recent outperformance we believe is a function of
strong U.S. equity returns -- in the core large-cap U.S. piece
in particular. The asset allocation at the end of June was as
follows: 24% core U.S. equities; 15% aggressive stocks; 33%
international stocks; 24% fixed-income securities; and 4% cash
equivalents.
This concludes the overview from Wellington Management
Company. We look forward to reporting to you once again in six
months' time, and we appreciate the confidence you place in us
with your retirement assets.
Sincerely,
/s/ ELI BROAD
---------------------------------
Eli Broad
Chairman and Chief Executive Officer,
Anchor National Life Insurance Company
First SunAmerica Life Insurance Company
August 25, 1997
-------------------------------
Note: All performance figures quoted are for the Anchor Series
Trust. They do not reflect fees and charges associated with the
variable annuity. Past performance is no guarantee of future
results.
Investments in stocks and bonds are subject to risk, including
stock market and interest rate fluctuations. Investments in
non-U.S. stocks and bonds are subject to additional risks,
including fluctuations, political and social instability,
differing securities regulations and accounting standards and
limited public information. High-yield bonds tend to be subject
to greater price swings than higher-rated bonds and, of course,
payment of interest and principal is not assured. Mortgage-
backed securities are subject to prepayment, which can result in
reinvestment of principal at lower yields. Investments in
securities related to gold or other precious metals and minerals
are considered speculative and are impacted by a host of
worldwide economic, financial and political factors. Money
market instruments generally offer stability and income, but an
investment in these securities is not guaranteed by the U.S.
government or any other entity.
- ---------------------
4
<PAGE> 5
- ---------------------
ANCHOR SERIES TRUST
MONEY MARKET PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM SECURITIES -- 98.5% AMOUNT VALUE
<S> <C> <C>
----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
ASSET BACKED SECURITIES -- 4.0%
SMM Trust 5.74% due 8/04/97(1)
(cost $3,000,000)................................................... $ 3,000,000 $ 3,000,000
-----------
BANK NOTES -- 11.3%
Bank of Tokyo-Mitsubishi 5.94% due 11/17/97........................... 2,500,000 2,500,140
First National Bank of Boston 5.69% due 10/14/97...................... 2,000,000 2,000,000
Societe Generale 5.88% due 11/24/97................................... 2,000,000 2,000,197
Wilmington Trust Co. 5.90% due 11/19/97............................... 2,000,000 2,000,000
-----------
TOTAL BANK NOTES (cost $8,500,337).................................... 8,500,337
-----------
COMMERCIAL PAPER -- 60.6%
AC Acquisition Holding Co. 5.56% due 7/11/97.......................... 2,500,000 2,496,139
Associates Corp. of North America 5.60% due 8/25/97................... 2,000,000 1,982,889
BCI Funding Corp. 5.57% due 9/15/97................................... 2,200,000 2,174,130
Centric Funding Corp. 5.50% due 7/21/97............................... 1,980,000 1,973,862
Clipper Receivables Corp. 5.55% due 7/09/97........................... 2,500,000 2,496,917
Corporate Receivables Corp. 6.30% due 7/01/97......................... 2,800,000 2,800,000
Electricite de France 5.35% due 7/07/97............................... 2,000,000 1,998,217
General Motors Acceptance Corp. 5.39% due 7/15/97..................... 1,300,000 1,297,275
General Motors Acceptance Corp. 5.80% due 11/10/97.................... 1,200,000 1,174,480
Generale Bank 5.37% due 7/08/97....................................... 2,000,000 1,997,912
Goldman Sachs Group L.P. 5.55% due 7/11/97............................ 2,500,000 2,496,146
Greenwich Funding Corp. 5.56% due 7/09/97............................. 2,688,000 2,684,679
Hitachi America Ltd. 5.58% due 10/16/97............................... 2,500,000 2,458,537
Merrill Lynch & Co., Inc. 5.55% due 7/07/97........................... 2,000,000 1,998,150
Montana Blanc Capital Corp. 5.55% due 7/08/97......................... 2,500,000 2,497,302
Morgan Stanley Group, Inc. 5.58% due 7/21/97.......................... 2,000,000 1,993,800
National Bank of Canada 5.41% due 7/21/97............................. 2,300,000 2,293,087
New Center Asset Trust 5.28% due 8/13/97.............................. 2,000,000 1,987,387
Quebec (Province of) 5.58% due 8/21/97................................ 2,000,000 1,984,190
Rank Xerox Capital Europe PLC 5.55% due 7/17/97....................... 2,500,000 2,493,833
Toshiba America, Inc. 5.37% due 7/30/97............................... 2,200,000 2,190,483
-----------
TOTAL COMMERCIAL PAPER (cost $45,469,415)............................. 45,469,415
-----------
CORPORATE SHORT-TERM NOTES -- 9.3%
Bank of America National Association 5.65% due 7/16/97(1)............. 3,000,000 2,998,851
Bank One Columbus 5.52% due 7/15/97(1)................................ 2,000,000 1,998,860
Peoples Security Life Insurance Co. 5.98% due 8/01/97(1).............. 2,000,000 2,000,000
-----------
TOTAL CORPORATE SHORT-TERM NOTES (cost $6,997,711).................... 6,997,711
-----------
U.S. GOVERNMENT & AGENCIES -- 13.3%
Student Loan Marketing Association 5.20% due 7/15/97(1)
(cost $10,000,000).................................................. 10,000,000 10,000,000
-----------
TOTAL SHORT-TERM SECURITIES (cost $73,967,463)........................ 73,967,463
-----------
</TABLE>
---------------------
5
<PAGE> 6
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT -- 1.1% AMOUNT VALUE
<S> <C> <C>
----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
Joint Repurchase Agreement Account (Note 3)
(cost $805,000)..................................................... $ 805,000 $ 805,000
-----------
TOTAL INVESTMENTS -- (cost $74,772,463) 99.6% 74,772,463
Other assets less liabilities -- 0.4 285,695
------ -----------
NET ASSETS -- 100.0% $75,058,158
====== ===========
</TABLE>
-----------------------------
(1) Variable rate security -- the rate reflected is as of June 30,
1997; maturity date reflects next reset date
See Notes to Financial Statements
- ---------------------
6
<PAGE> 7
- ---------------------
ANCHOR SERIES TRUST
FIXED INCOME PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES -- 98.0% AMOUNT VALUE
<S> <C> <C>
----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
AEROSPACE & MILITARY TECHNOLOGY -- 0.7%
Howmet Corp. 10.00% 2003............................................... $ 50,000 $ 54,000
K&F Industries, Inc. 10.38% 2004....................................... 30,000 31,800
Moog, Inc. 10.00% 2006................................................. 50,000 52,000
------------
137,800
------------
CABLE -- 2.8%
Cablevision Systems Corp. 9.25% 2005................................... 15,000 15,450
Comcast Cable Communications 8.50% 2027*............................... 150,000 162,478
Lenfest Communications, Inc. 8.38% 2005................................ 25,000 24,625
Marcus Cable Operating Co. L.P. zero coupon 2004(1).................... 45,000 39,150
Rifkin Acquisitions Partners L.P. 11.13% 2006.......................... 40,000 42,200
Tele-Communications, Inc. 9.25% 2002................................... 250,000 268,255
------------
552,158
------------
CHEMICALS -- 0.7%
Astor Corp. 10.50% 2006................................................ 10,000 10,537
Harris Chemical North America, Inc. 10.25% 2001........................ 25,000 26,000
Pioneer Americas Acquisition Corp. 9.25% 2007*......................... 10,000 9,863
Rexene Corp. 11.75% 2004............................................... 50,000 57,562
Texas Petrochemicals Corp. 11.13% 2006................................. 25,000 27,000
------------
130,962
------------
COMMUNICATIONS & MEDIA -- 5.0%
Benedek Communications Corp. zero coupon 2006(1)....................... 35,000 21,350
Bellsouth Telecommunications 6.25% 2003................................ 500,000 489,205
Chancellor Radio Broadcasting Co. 9.38% 2004........................... 10,000 10,250
EchoStar DBS Corp. 12.50% 2002*........................................ 25,000 24,750
Jacor Communications Co. 8.75% 2007*................................... 10,000 9,850
MobileMedia Corp. 9.38% 2007+(3)....................................... 50,000 8,250
News America Holdings, Inc. 9.25% 2013................................. 300,000 334,491
Plitt Theaters, Inc. 10.88% 2004....................................... 25,000 26,500
Sun Media Corp. 9.50% 2007*............................................ 5,000 5,056
Von Hoffmann Press, Inc. 10.38% 2007*.................................. 5,000 5,219
World Color Press, Inc. 9.13% 2003..................................... 20,000 20,400
Young Broadcasting, Inc. 9.00% 2006.................................... 25,000 24,750
------------
980,071
------------
CONSUMER DISCRETIONARY -- 3.7%
Collins & Aikman Corp. 11.50% 2006..................................... 25,000 28,125
Ford Motor Co. 9.00% 2001.............................................. 500,000 540,180
Hayes Wheels International, Inc. 11.00% 2006........................... 25,000 27,500
Key Plastics, Inc. 10.25% 2007*........................................ 15,000 15,750
Kinder Care Learning Centers, Inc. 9.50% 2009.......................... 10,000 9,725
LDM Technologies, Inc. 10.75% 2007..................................... 20,000 21,200
Lear Corp. 9.50% 2006.................................................. 35,000 37,275
Standard Pacific Corp. 8.50% 2007...................................... 15,000 15,000
Walbro Corp. 9.88% 2005................................................ 20,000 20,500
------------
715,255
------------
</TABLE>
---------------------
7
<PAGE> 8
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (continued) AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER STAPLES -- 0.1%
Revlon Worldwide Corp. zero coupon 2001+*.............................. $ 40,000 $ 27,100
------------
ENERGY -- 1.3%
Cross Timbers Oil Co. 9.25% 2007....................................... 30,000 30,975
Plains Resources, Inc. 10.25% 2006..................................... 50,000 53,000
YPF Sociedad Anonima 8.00% 2004........................................ 160,000 162,992
------------
246,967
------------
FINANCE -- 18.1%
Abbey National First Capital 8.20% 2004................................ 500,000 532,715
Amerus Capital I 8.85% 2027............................................ 150,000 155,132
Banponce Financial Corp. 6.75% 2001.................................... 300,000 298,572
Credit National 7.00% 2005............................................. 190,000 182,044
Dime Capital Trust I 9.33% 2027........................................ 150,000 156,208
Japan Finance Corp. Municipal Enterprises 9.13% 2000................... 400,000 427,532
KFW International Finance, Inc. 9.13% 2001............................. 400,000 434,124
Ohio National Life Insurance Co. 8.50% 2026*........................... 200,000 203,492
Olympic Financial Ltd. 11.50% 2007..................................... 15,000 15,300
Security Benefit Life Co. 8.75% 2016................................... 200,000 207,986
Sun Canada Financial Co. 7.25% 2015*................................... 300,000 281,961
United States Bancorp Oregon 7.50% 2026................................ 400,000 415,568
US West Capital Funding, Inc. 6.95% 2037............................... 250,000 249,452
------------
3,560,086
------------
GAMING -- 0.2%
Trump Atlantic City Associates 11.25% 2006............................. 30,000 29,325
------------
GROCERY -- 0.1%
Homeland Stores, Inc. 10.00% 2003...................................... 20,000 19,188
------------
HEALTHCARE -- 2.9%
Allegiance Corp. 7.00% 2026............................................ 350,000 349,716
Owens & Minor, Inc. 10.88% 2006........................................ 50,000 55,750
Quorum Health Group, Inc. 8.75% 2005................................... 50,000 51,750
Tenet Healthcare Corp. 7.88% 2003...................................... 120,000 120,300
------------
577,516
------------
INDUSTRIAL & COMMERCIAL -- 3.8%
Cabot Safety Acquisition Corp. 12.50% 2005............................. 25,000 27,500
Cincinnati Milacron, Inc. 7.88% 2000................................... 150,000 152,522
Clark Schwebel, Inc. 10.50% 2006(2).................................... 10,000 10,800
Columbia University Trustees 8.62% 2001................................ 500,000 531,665
International Wire Group, Inc. 11.75% 2005*............................ 15,000 16,275
Neenah Corp. 11.13% 2007............................................... 10,000 10,613
Pierce Leahy Corp. 9.13% 2007.......................................... 5,000 5,000
------------
754,375
------------
INFORMATION TECHNOLOGY -- 0.5%
Advanced Micro Devices, Inc. 11.00% 2003............................... 25,000 27,844
Bell & Howell Co. zero coupon 2005(1).................................. 20,000 16,000
Comcast Cellular Holdings, Inc. 9.50% 2007*............................ 15,000 15,075
Fairchild Semiconductor Corp. 10.13% 2007*............................. 15,000 15,900
Teleport Communications Group zero coupon 2007(1)...................... 40,000 28,850
------------
103,669
------------
METALS & MINERALS -- 0.6%
A.K. Steel Corp. 9.13% 2006............................................ 15,000 15,300
Acindar Industria Argentina de Aceros SA 11.25% 2004................... 10,000 10,563
Armco, Inc. 9.38% 2000................................................. 50,000 51,625
</TABLE>
- ---------------------
8
<PAGE> 9
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (continued) AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
METALS & MINERALS (continued)
Echo Bay Mines Ltd. 11.00% 2027........................................ $ 15,000 $ 15,037
NS Group, Inc. 13.50% 2003............................................. 25,000 28,250
------------
120,775
------------
NON-U.S. GOVERNMENT OBLIGATIONS -- 1.3%
Republic of Argentina 11.00% 2006...................................... 230,000 256,968
------------
PAPER PRODUCTS -- 0.8%
Container Corp. of America 9.75% 2003.................................. 50,000 52,500
S.D. Warren Co. 12.00% 2004............................................ 50,000 55,500
Sheffield Steel Corp. 12.00% 2001...................................... 5,000 4,944
Silgan Holdings Corp. 9.00% 2009*...................................... 10,000 10,100
Tembec Finance Corp. 9.88% 2005........................................ 30,000 30,900
------------
153,944
------------
RETAIL -- 1.2%
Guitar Center Management Co., Inc. 11.00% 2006......................... 17,000 18,615
Penney (J.C.) Co., Inc. 7.40% 2037..................................... 200,000 205,850
------------
224,465
------------
U.S. GOVERNMENT & AGENCIES -- 48.2%
Federal Home Loan Mortgage Corp. 6.00% 2003............................ 494,541 480,324
Federal Home Loan Mortgage Corp. 6.50% 2024............................ 861,848 831,140
Federal Home Loan Mortgage Corp. 7.00% 2004 - 2025..................... 1,397,716 1,383,293
Federal Home Loan Participation 11.00% 2000............................ 6,875 7,348
Government National Mortgage Association 7.00% 2023.................... 486,370 479,989
Government National Mortgage Association 7.50% 2022 - 2023............. 847,009 853,659
Government National Mortgage Association 10.00% 2000................... 22,525 23,257
Government National Mortgage Association 11.25% 1998................... 2,949 3,082
Government National Mortgage Association 13.25% 1999................... 1,304 1,364
United States Treasury Bonds 10.75% 2003............................... 700,000 840,658
United States Treasury Bonds 11.88% 2003............................... 1,000,000 1,278,590
United States Treasury Bonds 12.00% 2013............................... 1,975,000 2,780,128
United States Treasury Notes 7.13% 1999................................ 500,000 510,235
------------
9,473,067
------------
UTILITIES -- 6.0%
Cleveland Electric Illuminating Co. 7.19% 2000*........................ 160,000 160,459
Niagara Mohawk Power Corp. 5.88% 2002.................................. 750,000 714,816
NRG Energy, Inc. 7.50% 2007*........................................... 100,000 100,212
WorldCom, Inc. 7.55% 2004.............................................. 200,000 203,744
------------
1,179,231
------------
TOTAL INVESTMENT SECURITIES (cost $19,219,155)......................... 19,242,922
------------
</TABLE>
---------------------
9
<PAGE> 10
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT -- 0.4% AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (Note 3) (cost $75,000)........... $ 75,000 $ 75,000
------------
TOTAL INVESTMENTS -- (cost $19,294,155) 98.4% 19,317,922
Other assets less liabilities -- 1.6 319,632
------ ------------
NET ASSETS -- 100.0% $19,637,554
===== ============
</TABLE>
-----------------------------
+ Non-income producing securities
* Resale restricted to qualified institutional buyers
(1) Represents a zero-coupon bond which will convert to an
interest-bearing security at a later date
(2) Fair valued security; see Note 2
(3) Issuer of the security has filed for bankruptcy and interest
payments are in default
See Notes to Financial Statements
- ---------------------
10
<PAGE> 11
- ---------------------
ANCHOR SERIES TRUST
GOVERNMENT & QUALITY BOND
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES -- 95.2% AMOUNT VALUE
<S> <C> <C>
----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
FINANCE -- 11.7%
CS First Boston Corp. 7.24% 2029(1).................................. $ 5,000,000 $ 5,048,500
General Electric Capital Corp. 7.50% 2035............................ 5,000,000 5,112,600
General Reinsurance Corp. 9.00% 2009................................. 5,000,000 5,773,150
Morgan (J.P.) & Co., Inc. 6.25% 2005................................. 5,000,000 4,745,000
Stanford University 6.88% 2024....................................... 5,000,000 4,701,700
-------------
25,380,950
-------------
INDUSTRIAL & COMMERCIAL -- 2.5%
Postal Square L.P. 8.95% 2022........................................ 4,785,950 5,489,963
-------------
INFORMATION & ENTERTAINMENT -- 1.9%
McDonald's Corp. 7.05% 2025.......................................... 4,370,000 4,141,292
-------------
MUNICIPAL BONDS -- 0.4%
New Jersey Economic Development Authority, Series A 7.43% 2029....... 910,000 907,133
-------------
NON-U.S. GOVERNMENT OBLIGATIONS -- 1.3%
British Columbia Province Canada 6.50% 2026.......................... 3,125,000 2,833,531
-------------
RETAIL -- 2.2%
Wal-Mart Stores, Inc. 6.75% 2023..................................... 5,000,000 4,663,200
-------------
TRANSPORTATION -- 2.6%
United Parcel Service of America, Inc. 8.38% 2020.................... 5,000,000 5,590,350
-------------
U.S. GOVERNMENT & AGENCIES -- 68.0%
Federal Home Loan Mortgage Corp. 6.00% 2008 - 2011................... 8,844,508 8,561,575
Federal Home Loan Mortgage Corp. 6.50% 2011.......................... 13,147,597 12,939,963
Federal Home Loan Mortgage Corp. 7.00% 2010 - 2011................... 18,138,183 18,141,958
Federal Home Loan Mortgage Corp. 7.29% 2004.......................... 20,000,000 19,856,200
Federal Home Loan Mortgage Corp. 14.75% 2010......................... 139,622 166,454
Federal National Mortgage Association 7.00% 2010 - 2011.............. 6,416,031 6,414,293
Government National Mortgage Association 6.50% TBA................... 8,241,288 7,883,287
Government National Mortgage Association 7.00% 2009 - 2012........... 9,679,995 9,714,883
Government National Mortgage Association 7.50% 2022.................. 7,416,305 7,478,825
Government National Mortgage Association 10.00% 2013 - 2017.......... 2,353,195 2,568,226
Government National Mortgage Association 11.50% 2014................. 19,313 21,864
Government National Mortgage Association 12.00% 1999 - 2016.......... 119,804 128,719
Government National Mortgage Association 12.75% 2014................. 79,354 91,158
Government National Mortgage Association 13.25% 1999 - 2014.......... 20,071 22,833
Government National Mortgage Association 13.50% 2014................. 8,681 10,349
Government National Mortgage Association 13.75% 2014................. 1,417 1,627
United States Treasury Bonds 7.63% 2022.............................. 25,000,000 27,230,500
</TABLE>
---------------------
11
<PAGE> 12
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (continued) AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT & AGENCIES (continued)
United States Treasury Notes 5.88% 1998.............................. $10,000,000 $ 10,010,900
United States Treasury Notes 6.63% 2002.............................. 16,000,000 16,144,960
-------------
147,388,574
-------------
UTILITIES -- 4.6%
Hydro Quebec Electric 8.40% 2022..................................... 5,000,000 5,409,900
US West Communications, Inc. 6.88% 2033.............................. 5,000,000 4,432,500
-------------
9,842,400
-------------
TOTAL INVESTMENT SECURITIES (cost $208,030,592)...................... 206,237,393
-------------
<CAPTION>
REPURCHASE AGREEMENT -- 2.4%
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (Note 3) (cost $5,190,000)........ 5,190,000 5,190,000
-------------
TOTAL INVESTMENTS -- (cost $213,220,592) 97.6% 211,427,393
Other assets less liabilities -- 2.4 5,200,760
----- ------------
NET ASSETS -- 100.0% $216,628,153
===== =============
</TABLE>
-----------------------------
(1) Fair valued security; see Note 2
TBA - Securities purchased on a forward commitment basis with an
approximate principal amount and no definitive maturity
date. The actual principal amount and maturity date will be
determined upon settlement.
See Notes to Financial Statements
- ---------------------
12
<PAGE> 13
- ---------------------
ANCHOR SERIES TRUST
HIGH YIELD PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES -- 91.5% AMOUNT VALUE
<S> <C> <C>
----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
AEROSPACE & MILITARY TECHNOLOGY -- 6.7%
Howmet Corp. 10.00% 2003.............................................. $ 470,000 $ 507,600
K&F Industries, Inc. 10.38% 2004...................................... 250,000 265,000
K&F Industries, Inc. 11.88% 2003...................................... 105,000 111,169
Moog, Inc. 10.00% 2006................................................ 655,000 681,200
Northrop Grumman Corp. 9.38% 2024..................................... 150,000 164,620
Rohr, Inc. 11.63% 2003................................................ 500,000 557,500
Wyman-Gordon Co. 10.75% 2003.......................................... 500,000 535,000
------------
2,822,089
------------
CABLE -- 3.5%
Cablevision Systems Corp. 9.25% 2005.................................. 350,000 360,500
Comcast Corp. 9.38% 2005.............................................. 150,000 157,500
Marcus Cable Operating Co. L.P. zero coupon 2004(1)................... 350,000 304,500
Rifkin Acquisitions Partners L.P. 11.13% 2006......................... 350,000 369,250
Videotron Ltd. 10.25% 2002............................................ 250,000 265,000
------------
1,456,750
------------
CHEMICALS -- 5.5%
Acetex Corp. 9.75% 2003............................................... 500,000 507,186
Agriculture Minerals & Chemicals 10.75% 2003.......................... 500,000 541,250
Astor Corp. 10.50% 2006............................................... 400,000 421,500
Pioneer Americas Acquisition Corp. 9.25% 2007*........................ 130,000 128,213
Rexene Corp. 11.75% 2004.............................................. 250,000 287,813
Sterling Chemicals, Inc. 11.75% 2006.................................. 150,000 162,000
Texas Petrochemicals Corp. 11.13% 2006................................ 250,000 270,000
------------
2,317,962
------------
COMMUNICATIONS & MEDIA -- 9.0%
Big Flower Press Holdings 10.75% 2003................................. 170,000 182,324
Chancellor Radio Broadcasting Co. 9.38% 2004.......................... 350,000 358,750
EchoStar DBS Corp. 12.50% 2002*....................................... 325,000 321,750
Granite Broadcasting Corp. 12.75% 2002................................ 100,000 107,000
Jacor Communications Co. 8.75% 2007*.................................. 150,000 147,750
Jacor Communications Co. 9.75% 2006................................... 350,000 364,000
MobileMedia Corp. 9.38% 2007+(3)...................................... 500,000 82,500
Plitt Theaters, Inc. 10.88% 2004...................................... 250,000 265,000
Sun Media Corp. 9.50% 2007*........................................... 100,000 101,125
Unisys Corp. 12.00% 2003.............................................. 500,000 546,250
World Color Press, Inc. 9.13% 2003.................................... 750,000 765,000
Young Broadcasting, Inc. 11.75% 2004.................................. 500,000 552,500
------------
3,793,949
------------
</TABLE>
---------------------
13
<PAGE> 14
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (continued) AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER DISCRETIONARY -- 7.5%
Collins & Aikman Corp. 11.50% 2006.................................... $ 350,000 $ 393,750
Delco Remy International, Inc. 10.63% 2006*........................... 350,000 369,250
Federal Mogul Corp. 8.80% 2007........................................ 250,000 259,528
Hayes Wheels International, Inc. 11.00% 2006.......................... 135,000 148,500
Johnstown America Industries, Inc. 11.75% 2005(2)..................... 500,000 522,500
Key Plastics, Inc. 10.25% 2007*....................................... 350,000 367,500
Kinder Care Learning Centers, Inc. 9.50% 2009......................... 195,000 189,638
LDM Technologies, Inc. 10.75% 2007.................................... 165,000 174,900
Lear Seating Corp. 8.25% 2002......................................... 250,000 253,750
Standard Pacific Corp. 8.50% 2007..................................... 230,000 230,000
Walbro Corp. 9.88% 2005............................................... 250,000 256,250
------------
3,165,566
------------
CONSUMER STAPLES -- 2.2%
PMI Acquisition Corp. 10.25% 2003..................................... 150,000 156,750
Sweetheart Cup, Inc. 10.50% 2003...................................... 250,000 253,750
Westpoint Stevens, Inc. 8.75% 2001.................................... 500,000 515,000
------------
925,500
------------
ENERGY -- 4.7%
Cross Timbers Oil Co. 9.25% 2007...................................... 250,000 258,125
Falcon Drilling Co. 8.88% 2003........................................ 250,000 253,125
Flores & Rucks, Inc. 9.75% 2006....................................... 150,000 156,750
McDermott J. Ray SA 9.38% 2006........................................ 250,000 253,750
Plains Resources, Inc. 10.25% 2006.................................... 350,000 371,000
Pride Petroleum Services, Inc. 9.38% 2007............................. 120,000 125,400
Santa Fe Energy Resources 11.00% 2004................................. 500,000 545,000
------------
1,963,150
------------
FINANCE -- 2.8%
Dime Bancorp, Inc. 10.50% 2005........................................ 500,000 542,500
Navistar Financial Corp. 9.00% 2002*.................................. 290,000 298,338
Olympic Financial Ltd. 11.50% 2007.................................... 350,000 357,000
------------
1,197,838
------------
GAMING -- 1.1%
GB Property Funding Corp. 10.88% 2004................................. 250,000 222,500
Trump Atlantic City Associates 11.25% 2006............................ 250,000 244,375
------------
466,875
------------
GROCERY -- 1.7%
Dominick's Finer Foods, Inc. 10.88% 2005.............................. 225,000 248,625
Homeland Stores, Inc. 10.00% 2003+.................................... 500,000 479,688
------------
728,313
------------
HEALTHCARE -- 3.7%
Dade International, Inc. 11.13% 2006.................................. 190,000 211,850
Genesis Health Ventures, Inc. 9.25% 2006.............................. 30,000 30,300
Genesis Health Ventures, Inc. 9.75% 2005.............................. 225,000 232,875
Integrated Health Services, Inc. 9.50% 2007*.......................... 200,000 204,500
Leiner Health Products Group 9.63% 2007*.............................. 40,000 40,500
Owens & Minor, Inc. 10.88% 2006....................................... 350,000 390,250
Packard Bioscience, Inc. 9.38% 2007*.................................. 250,000 250,000
Quorum Health Group, Inc. 8.75% 2005.................................. 175,000 181,125
------------
1,541,400
------------
INDUSTRIAL & COMMERCIAL -- 8.9%
Cabot Safety Acquisition Corp. 12.50% 2005............................ 350,000 385,000
Clark Schwebel, Inc. 10.50% 2006(2)................................... 325,000 351,000
Essex Group, Inc. 10.00% 2003......................................... 650,000 684,125
Graphic Controls Corp. 12.00% 2005(2)................................. 225,000 248,625
Great Lakes Carbon Corp. 10.00% 2006.................................. 500,000 532,500
</TABLE>
- ---------------------
14
<PAGE> 15
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (continued) AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL & COMMERCIAL (continued)
International Wire Group, Inc. 11.75% 2005*........................... $ 455,000 $ 493,675
Neenah Corp. 11.13% 2007*............................................. 250,000 265,313
Pierce Leahy Corp. 9.13% 2007......................................... 110,000 110,000
Roller Bearing Co. America, Inc. 9.63% 2007*.......................... 155,000 156,938
Specialty Equipment Cos., Inc. 11.38% 2003............................ 250,000 272,500
UCAR Global Enterprises, Inc. 12.00% 2005............................. 200,000 225,000
------------
3,724,676
------------
INFORMATION TECHNOLOGY -- 5.4%
Advanced Micro Devices, Inc. 11.00% 2003.............................. 250,000 278,438
Comcast Cellular Holdings, Inc. 9.50% 2007*........................... 150,000 150,750
Bell & Howell Co. zero coupon 2005(1)................................. 1,000,000 800,000
Bell & Howell Co. zero coupon 2000.................................... 250,000 257,813
Fairchild Semiconductor Corp. 10.13% 2007*............................ 500,000 530,000
Teleport Communications Group zero coupon 2007(1)..................... 350,000 252,438
------------
2,269,439
------------
METALS & MINERALS -- 13.1%
A.K. Steel Corp. 9.13% 2006........................................... 500,000 510,000
A.K. Steel Corp. 10.75% 2004.......................................... 350,000 376,250
Acindar Industria Argentina de Aceros SA 11.25% 2004.................. 500,000 528,124
Amtrol, Inc. 10.63% 2006.............................................. 350,000 366,624
Armco, Inc. 9.38% 2000................................................ 750,000 774,375
Associated Materials, Inc. 11.50% 2003................................ 235,000 249,981
Bethlehem Steel Corp. 10.38% 2003..................................... 350,000 364,000
Commonwealth Aluminum Corp. 10.75% 2006............................... 500,000 520,000
CSN Iron SA 9.13% 2007*............................................... 285,000 277,163
Echo Bay Mines Ltd. 11.00% 2027....................................... 350,000 350,875
NS Group, Inc. 13.50% 2003............................................ 500,000 585,000
Weirton Steel Corp. 10.88% 1999....................................... 300,000 313,500
Weirton Steel Corp. 11.38% 2004....................................... 250,000 267,500
------------
5,483,392
------------
NON-U.S. GOVERNMENT OBLIGATIONS -- 1.1%
Republic of Argentina 11.38% 2017..................................... 250,000 278,468
Republic of Brazil 6.00% 2013......................................... 250,000 192,813
------------
471,281
------------
PAPER PRODUCTS -- 10.5%
Aracruz Celulose SA 10.38% 2002+*..................................... 255,000 270,300
Bahia Sul Celulose SA 10.63% 2004..................................... 250,000 260,000
Calmar Inc. Delaware 11.50% 2005...................................... 180,000 194,850
Container Corp. of America 9.75% 2003................................. 500,000 525,000
Container Corp. of America 11.25% 2004................................ 600,000 648,000
Doman Industries Ltd. 8.75% 2004...................................... 500,000 482,500
Fonda Group, Inc. 9.50% 2007.......................................... 250,000 240,000
S.D. Warren Co. 12.00% 2004........................................... 400,000 444,000
Sheffield Steel Corp. 12.00% 2001..................................... 60,000 59,325
Silgan Corp. 11.75% 2002.............................................. 150,000 159,750
Silgan Holdings Corp. 9.00% 2009*..................................... 750,000 757,500
Silgan Holdings Corp. 13.25% 2006(2).................................. 80,715 91,410
Tembec Finance Corp. 9.88% 2005....................................... 250,000 257,500
------------
4,390,135
------------
RETAIL -- 0.9%
Guitar Center Management Co., Inc. 11.00% 2006*....................... 333,000 364,635
------------
</TABLE>
---------------------
15
<PAGE> 16
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (continued) AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES -- 3.2%
CMS Energy Corp. 8.13% 2002........................................... $ 350,000 $ 353,409
El Paso Electric Co. 8.90% 2006....................................... 250,000 266,033
First PV Funding Corp. 10.15% 2016.................................... 164,000 172,861
Texas-New Mexico Power Co. 10.75% 2003................................ 500,000 540,624
------------
1,332,927
------------
TOTAL BONDS & NOTES (cost $37,176,086)................................ 38,415,877
------------
COMMON STOCK -- 0.1% SHARES
----------------------------------------------------------------------------------------------------
INDUSTRIAL & COMMERCIAL -- 0.1%
Triangle Wire And Cable, Inc.+*(2)(5)
(cost $330,000)..................................................... 31,667 31,667
------------
PREFERRED STOCK -- 2.3%
----------------------------------------------------------------------------------------------------
COMMUNICATIONS & MEDIA -- 0.6%
Granite Broadcasting Corp. 12.75%*(4)................................. 255 250,537
------------
FINANCE -- 1.7%
California Federal Bank Los Angeles, Series B 10.625%................. 2,500 275,625
Chevy Chase Preferred Capital Corp., Series A 10.375%................. 8,285 439,105
------------
714,730
------------
TOTAL PREFERRED STOCK (cost $929,149)................................. 965,267
------------
CONVERTIBLE PREFERRED STOCK -- 0.4%
----------------------------------------------------------------------------------------------------
AEROSPACE & MILITARY TECHNOLOGY -- 0.4%
Loral Space & Communication Ltd., Series C 6.00%*
(cost $187,250)..................................................... 3,500 173,469
------------
WARRANTS -- 0.0%+
----------------------------------------------------------------------------------------------------
COMMUNICATIONS & MEDIA -- 0.0%
Benedek Communications Corp. 7/01/07(2)
(cost $13,800)...................................................... 2,000 4,000
------------
TOTAL INVESTMENT SECURITIES (cost $38,636,285)........................ 39,590,280
------------
</TABLE>
- ---------------------
16
<PAGE> 17
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT -- 3.3% AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (Note 3) (cost $1,390,000)......... $ 1,390,000 $ 1,390,000
-----------
TOTAL INVESTMENTS --
(cost $40,026,285) 97.6% 40,980,280
Other assets less liabilities -- 2.4 1,001,282
----- -----------
NET ASSETS -- 100.0% $41,981,562
===== ===========
</TABLE>
-----------------------------
+ Non-income producing securities
* Resale restricted to qualified institutional buyers
(1) Represents a zero-coupon bond which will convert to an
interest-bearing security at a later date
(2) Fair valued security; see Note 2
(3) Issuer of the security has filed for bankruptcy and interest
payments are in default
(4) PIK ("Payment-in-kind") payment made with additional
securities in lieu of cash
(5) At June 30, 1997 the portfolio held restricted securities
amounting to 0.1% of net assets. The portfolio will not bear
any costs, including those involved in registration under the
Securities Act of 1933, in connection with the disposition of
the security:
<TABLE>
<CAPTION>
VALUATION
DATE OF UNIT AS OF
DESCRIPTION ACQUISITION SHARES COST 06/30/97
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Triangle Wire and Cable, Inc. 3/21/94 10,556 $ 10.716654 $1.00
Triangle Wire and Cable, Inc. 3/24/94 21,111 10.273080 1.00
-----------
31,667
======
</TABLE>
See Notes to Financial Statements
---------------------
17
<PAGE> 18
- ---------------------
ANCHOR SERIES TRUST
TARGET '98 PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES -- 96.3% AMOUNT VALUE
<S> <C> <C>
----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
FINANCE -- 2.3%
United Virginia Bankshares, Inc. 8.63% 1998............................ $ 200,000 $ 203,862
------------
SUPRANATIONALS -- 5.8%
International Bank For Reconstruction & Development zero coupon 1998... 550,000 522,035
------------
U.S. GOVERNMENT & AGENCIES -- 81.2%
Federal Judiciary Office Building zero coupon 1998..................... 1,000,000 936,410
Federal National Mortgage Association zero coupon 1998................. 1,500,000 1,403,789
Government Trust Certificates Series 3D zero coupon 1998............... 1,000,000 922,010
Government Trust Certificates Series T zero coupon 1998................ 2,600,000 2,397,226
Tennessee Valley Authority zero coupon 1998............................ 500,000 458,160
Treasury Investment Growth Receipts zero coupon 1998................... 500,000 461,000
United States Treasury Note Strip Prior zero coupon 1998............... 700,000 645,841
------------
7,224,436
------------
UTILITIES -- 7.0%
Michigan Bell Telephone Co. 9.25% 1998................................. 300,000 312,303
Virginia Electric & Power Co. 9.38% 1998............................... 300,000 308,535
------------
620,838
------------
TOTAL INVESTMENT SECURITIES (cost $8,394,881).......................... 8,571,171
------------
<CAPTION>
REPURCHASE AGREEMENT -- 3.8%
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (Note 3)
(cost $335,000)...................................................... 335,000 335,000
------------
TOTAL INVESTMENTS -- (cost $8,729,881) 100.1% 8,906,171
Liabilities in excess of other assets -- (0.1) (7,025)
------ ------------
NET ASSETS -- 100.0% $ 8,899,146
====== =============
</TABLE>
-----------------------------
See Notes to Financial Statements
- ---------------------
18
<PAGE> 19
- ---------------------
ANCHOR SERIES TRUST
GROWTH AND INCOME
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 89.6% SHARES VALUE
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CONSUMER DISCRETIONARY -- 6.8%
Apparel & Textiles -- 0.9%
Nike, Inc., Class B.................................................. 6,000 $ 350,250
Retail -- 5.9%
CVS Corp. ........................................................... 11,000 563,750
Mercantile Stores Co., Inc. ......................................... 7,200 453,150
Saks Holdings, Inc.+................................................. 13,000 325,000
Sears, Roebuck & Co. ................................................ 10,000 537,500
Wal-Mart Stores, Inc. ............................................... 18,000 608,625
---------
2,838,275
---------
CONSUMER STAPLES -- 11.7%
Food, Beverage & Tobacco -- 2.4%
PepsiCo, Inc. ....................................................... 12,000 450,750
Sara Lee Corp. ...................................................... 14,000 582,750
Household Products -- 9.3%
Colgate-Palmolive Co. ............................................... 8,000 522,000
Estee Lauder Cos., Inc., Class A..................................... 8,900 447,225
Gillette Co. ........................................................ 7,000 663,250
Kimberly-Clark Corp. ................................................ 14,000 696,500
Procter & Gamble Co. ................................................ 6,000 847,500
Revlon, Inc., Class A+............................................... 14,000 725,375
---------
4,935,350
---------
ENERGY -- 9.8%
Energy Services -- 2.7%
Fluor Corp. ......................................................... 9,000 496,687
Schlumberger Ltd. ................................................... 5,000 625,000
Energy Sources -- 7.1%
Amoco Corp. ......................................................... 6,000 521,625
Chevron Corp. ....................................................... 6,000 443,625
Exxon Corp. ......................................................... 12,000 738,000
Royal Dutch Petroleum Co., NY Registry Shares........................ 10,000 543,750
Union Pacific Resources Group, Inc. ................................. 14,234 354,071
Unocal Corp. ........................................................ 10,000 388,125
---------
4,110,883
---------
FINANCE -- 16.7%
Banks -- 5.5%
Citicorp............................................................. 5,000 602,812
First Bank Systems, Inc. ............................................ 7,000 597,625
First Union Corp. ................................................... 7,500 693,750
Wachovia Corp. ...................................................... 7,000 408,188
Financial Services -- 3.7%
American Express Co. ................................................ 11,000 819,500
Federal National Mortgage Association................................ 17,000 741,625
</TABLE>
---------------------
19
<PAGE> 20
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE (continued)
Insurance -- 7.5%
Ace Ltd. ............................................................ 10,000 $ 738,750
Allstate Corp. ...................................................... 11,000 803,000
American International Group, Inc. .................................. 6,000 896,250
Marsh & McLennan Cos., Inc. ......................................... 10,000 713,750
---------
7,015,250
---------
HEALTHCARE -- 12.6%
Drugs -- 9.9%
American Home Products Corp. ........................................ 10,000 765,000
Bristol-Myers Squibb Co. ............................................ 8,000 648,000
Pfizer, Inc. ........................................................ 7,000 836,500
Pharmacia & Upjohn, Inc. ............................................ 14,000 486,500
Warner-Lambert Co. .................................................. 7,500 931,875
Zeneca Group PLC ADR................................................. 5,000 495,625
Health Services -- 1.1%
Columbia/HCA Healthcare Corp. ....................................... 12,000 471,750
Medical Products -- 1.6%
Abbott Laboratories, Inc. ........................................... 10,000 667,500
---------
5,302,750
---------
INDUSTRIAL & COMMERCIAL -- 9.1%
Aerospace & Military Technology -- 2.7%
Boeing Co. .......................................................... 10,000 530,625
United Technologies Corp. ........................................... 7,400 614,200
Electrical Equipment -- 2.8%
General Electric Co. ................................................ 18,000 1,176,750
Machinery -- 1.3%
Caterpillar, Inc. ................................................... 5,000 536,875
Multi Industry -- 1.0%
Minnesota Mining & Manufacturing Co. ................................ 4,000 408,000
Transportation -- 1.3%
Union Pacific Corp. ................................................. 8,000 564,000
---------
3,830,450
---------
INFORMATION & ENTERTAINMENT -- 6.2%
Broadcasting & Media -- 3.6%
Gannett Co., Inc. ................................................... 9,000 888,750
Scripps (E.W) Co., Class A........................................... 15,000 624,375
Leisure & Tourism -- 2.6%
McDonald's Corp. .................................................... 13,000 628,063
Mirage Resorts, Inc.+................................................ 18,000 454,500
---------
2,595,688
---------
INFORMATION TECHNOLOGY -- 8.5%
Communication Equipment -- 3.2%
Cisco Systems, Inc.+................................................. 10,000 671,250
Motorola, Inc. ...................................................... 9,000 684,000
Computers & Business Equipment -- 4.2%
EMC Corp.+........................................................... 12,000 468,000
International Business Machines Corp. ............................... 7,400 667,387
Xerox Corp. ......................................................... 8,000 631,000
</TABLE>
- ---------------------
20
<PAGE> 21
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
INFORMATION TECHNOLOGY (continued)
Software -- 1.1%
Computer Sciences Corp.+............................................. 6,000 $ 432,750
---------
3,554,387
---------
MATERIALS -- 5.8%
Chemicals -- 2.9%
Air Products & Chemicals, Inc. ...................................... 9,000 731,250
du Pont (E.I.) de Nemours & Co. ..................................... 8,000 503,000
Metals & Minerals -- 1.6%
Phelps Dodge Corp. .................................................. 8,000 681,500
Paper Products -- 1.3%
Crown, Cork & Seal, Inc. ............................................ 10,000 534,375
---------
2,450,125
---------
UTILITIES -- 2.4%
Telephone -- 2.4%
AT&T Corp. .......................................................... 11,000 385,688
SBC Communications, Inc. ............................................ 10,000 618,750
---------
1,004,438
---------
TOTAL COMMON STOCK (cost $28,249,927)................................ 37,637,596
---------
<CAPTION>
CONVERTIBLE PREFERRED STOCK -- 2.0%
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
INFORMATION & ENTERTAINMENT -- 1.0%
Broadcasting & Media -- 1.0%
Cablevision Systems Corp., Series I 8.50%............................ 15,000 406,875
---------
INFORMATION TECHNOLOGY -- 1.0%
Software -- 1.0%
Microsoft Corp., Series A $2.20...................................... 5,000 435,000
---------
TOTAL CONVERTIBLE PREFERRED STOCK (cost $789,966).................... 841,875
---------
<CAPTION>
PRINCIPAL
CONVERTIBLE BONDS -- 6.1% AMOUNT
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER DISCRETIONARY -- 1.1%
Retail -- 1.1%
Home Depot, Inc. 3.25% 2001.......................................... $ 400,000 458,000
---------
FINANCE -- 2.2%
Financial Services -- 2.2%
First Financial Management Corp. 5.00% 1999.......................... 450,000 910,125
---------
HEALTHCARE -- 1.5%
Health Services -- 1.5%
Tenet Healthcare Corp. 6.00% 2005.................................... 500,000 632,500
---------
</TABLE>
---------------------
21
<PAGE> 22
<TABLE>
<CAPTION>
PRINCIPAL
CONVERTIBLE BONDS (continued) AMOUNT VALUE
<S> <C> <C>
--------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
INFORMATION TECHNOLOGY -- 1.3%
Electronics -- 1.3%
Analog Devices, Inc. 3.50% 2000...................................... $ 400,000 $ 567,500
---------
TOTAL CONVERTIBLE BONDS (cost $2,160,028)............................ 2,568,125
---------
TOTAL INVESTMENT SECURITIES (cost $31,199,921)....................... 41,047,596
---------
REPURCHASE AGREEMENT -- 2.7%
--------------------------------------------------------------------------------------------------------
Joint Repurchase Agreement Account (Note 3)
(cost $1,145,000).................................................. 1,145,000 1,145,000
---------
TOTAL INVESTMENTS -- (cost $32,344,921) 100.4% 42,192,596
Liabilities in excess of other assets -- (0.4) (181,758)
------ ---------
NET ASSETS -- 100.0% $ 42,010,838
====== =========
</TABLE>
-----------------------------
+ Non-income producing securities
ADR - American Depository Receipts
See Notes to Financial Statements
- ---------------------
22
<PAGE> 23
- ---------------------
ANCHOR SERIES TRUST
FOREIGN SECURITIES
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 93.8% SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
ARGENTINA -- 0.7%
Banco de Galicia y Buenos Aires SA de CV (Finance)..................... 25,000 $ 166,276
Banco de Galicia y Buenos Aires SA de CV, Class B ADR (Finance)........ 7,400 195,175
-----------
361,451
-----------
AUSTRALIA -- 3.7%
Amcor Ltd. (Materials)................................................. 63,964 425,399
Boral Ltd. (Materials)................................................. 43,173 136,059
Broken Hill Proprietary Co., Ltd. (Materials).......................... 37,178 547,419
Crown Ltd. (Information & Entertainment)............................... 93,397 150,346
Goodman Fielder Wattie Ltd. (Consumer Staples)......................... 110,492 162,833
Pioneer International Ltd. (Materials)+................................ 90,000 348,249
-----------
1,770,305
-----------
AUSTRIA -- 0.7%
OMV AG (Energy)........................................................ 2,780 356,106
-----------
BELGIUM -- 0.5%
Credit Dexia/Communal Holding (Finance)+*.............................. 2,167 232,781
-----------
BRAZIL -- 0.8%
Aracruz Celulose ADR (Materials)....................................... 5,900 120,212
Centrais Eletricas Brasileiras SA ADR (Utilities)+..................... 4,500 125,819
Compania De Minas Buenaventura SA, Series B ADR (Energy)............... 6,100 120,094
-----------
366,125
-----------
CANADA -- 2.4%
Alcan Aluminum Ltd. (Materials)........................................ 5,200 178,486
Canadian Imperial Bank Toronto (Finance)............................... 7,800 196,560
Canadian Pacific Ltd. (Industrial & Commercial)+*...................... 22,400 637,474
Canwest Global Communications (Information Technology)................. 10,400 154,050
-----------
1,166,570
-----------
CHILE -- 1.1%
Embotelladora Andina SA, Class A (Consumer Staples).................... 3,700 79,319
Embotelladora Andina SA, Class B (Consumer Staples).................... 7,400 158,637
Enersis SA ADR (Utilities)............................................. 7,700 273,831
-----------
511,787
-----------
DENMARK -- 2.4%
Tele Danmark A/S, Class B ADR (Utilities).............................. 11,900 310,887
Unidanmark A/S (Finance)............................................... 14,900 837,016
-----------
1,147,903
-----------
</TABLE>
---------------------
23
<PAGE> 24
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
FINLAND -- 2.7%
Kesko (Consumer Discretionary)......................................... 20,450 $ 288,275
Metsa-Serla Oy, Class B (Materials).................................... 47,500 386,933
Nokia Corp., Class A ADR (Information Technology)...................... 4,900 361,375
Rauma Oy (Industrial & Commercial)..................................... 12,000 274,999
-----------
1,311,582
-----------
FRANCE -- 8.5%
Assurance General de France (Finance)+*................................ 15,000 479,351
Banque Nationale de Paris (Finance).................................... 11,900 490,442
Compagnie de St. Gobain (Materials).................................... 2,097 305,806
Credit Commerce France (Finance)....................................... 6,520 276,257
Elf Aquitaine SA (Energy).............................................. 2,900 312,863
Havas SA (Information & Entertainment)................................. 5,589 402,767
Peugeot SA (Consumer Discretionary).................................... 2,930 283,193
Remy Cointreau SA (Consumer Staples)................................... 7,600 182,476
Rhone-Poulenc SA (Healthcare).......................................... 12,330 503,548
Societe Generale (Finance)............................................. 4,186 467,272
Total SA, Series B (Energy)............................................ 3,956 399,861
-----------
4,103,836
-----------
GERMANY -- 3.8%
Bayer AG (Healthcare).................................................. 9,900 380,424
Degussa AG (Materials)................................................. 3,500 185,224
Karstadt AG (Consumer Discretionary)................................... 1,200 427,269
Lufthansa AG (Information & Entertainment)............................. 16,600 318,371
Mannesmann AG (Industrial & Commercial)................................ 800 356,402
Metallgesellschaft (Industrial & Commercial)+.......................... 8,800 183,155
-----------
1,850,845
-----------
HONG KONG -- 3.5%
Hutchison Whampoa Ltd. (Industrial & Commercial)....................... 60,000 518,890
Hysan Development Co., Ltd. (Real Estate).............................. 64,000 188,763
New World Development Co., Ltd. (Real Estate).......................... 15,000 89,451
Sun Hung Kai Properties Ltd. (Real Estate)............................. 25,100 302,115
Swire Pacific Ltd., Class A (Real Estate).............................. 55,000 495,172
Tingyi Holding Co. (Consumer Staples).................................. 486,000 121,072
-----------
1,715,463
-----------
INDIA -- 0.4%
Ranbaxy Laboratories Ltd. (Healthcare)................................. 3,300 77,550
State Bank of India GDR (Finance)*..................................... 4,500 119,250
-----------
196,800
-----------
INDONESIA -- 1.4%
PT Kalbe Farma alien shares (Healthcare)............................... 180,000 240,543
PT Indonesian Satellite Corp. ADR (Utilities)+......................... 7,400 221,537
PT Jaya Real Property alien shares (Real Estate)....................... 154,000 207,381
-----------
669,461
-----------
IRELAND -- 1.7%
Allied Irish Banks PLC (Finance)....................................... 21,419 163,364
Bank of Ireland (Finance).............................................. 1,500 16,692
Jefferson Smurfit Group (Materials)+................................... 215,000 619,409
-----------
799,465
-----------
</TABLE>
- ---------------------
24
<PAGE> 25
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
ITALY -- 3.7%
Arnaldo Mondadori Edit (Information & Entertainment)................... 43,700 $ 252,496
Fiat SpA (Consumer Discretionary)...................................... 164,000 590,549
First British Columbia San Paolo (Finance)............................. 11,700 85,294
Instituto Bancario San Polotorono (Finance)*........................... 41,000 298,893
STET (Utilities)....................................................... 94,000 547,550
-----------
1,774,782
-----------
JAPAN -- 23.5%
Aisin Seiki Co., Ltd. (Consumer Discretionary)......................... 34,000 519,107
Asahi Organic Chemical Co., Ltd. (Industrial & Commercial)............. 9,000 46,563
Dai Nippon Printing Co., Ltd. (Information & Entertainment)............ 10,000 225,964
Daibiru Corp. (Real Estate)............................................ 3,000 36,119
Eisai Co., Ltd. (Healthcare)........................................... 23,000 435,439
Exedy Corp. (Consumer Discretionary)................................... 12,000 152,853
Fuji Machine Manufacturing Co. (Industrial & Commercial)............... 14,000 506,892
Fukuda Denshi (Healthcare)............................................. 6,000 123,015
Hitachi Ltd. (Information Technology)+................................. 22,000 245,681
JGC Corp. (Industrial & Commercial).................................... 40,000 275,694
Kyudenko Corp. (Industrial & Commercial)............................... 15,000 126,418
Mabuchi Motor Co., Ltd. (Industrial & Commercial)...................... 10,000 580,178
Maruichi Steel Tube (Energy)........................................... 26,000 430,989
Matsumotokiyoshi (Consumer Discretionary).............................. 7,600 322,247
Matsushita Electric Industrial Co., Ltd. (Information Technology)+..... 32,000 644,914
Mazda Motor Corp. (Consumer Discretionary)............................. 93,000 324,551
Meiwa Estate Co. (Real Estate)+........................................ 4,000 87,245
Mitsubishi Heavy Industries Ltd. (Industrial & Commercial)............. 55,000 421,785
Murata Manufacturing Co., Ltd. (Information Technology)................ 12,000 477,404
Namco (Information & Entertainment).................................... 14,600 563,008
NGK Spark Plug Co., Ltd. (Industrial & Commercial)..................... 45,000 490,752
Nikko Securities Co., Ltd. (Finance)................................... 44,000 270,633
Nippon Express Co., Ltd. (Industrial & Commercial)..................... 50,000 399,145
Nippon Television Network (Information & Entertainment)................ 1,260 505,671
Okumura Corp. (Consumer Discretionary)................................. 30,000 158,873
Royal Ltd. (Consumer Discretionary).................................... 900 18,923
Sakura Bank Ltd. (Finance)............................................. 69,000 528,546
Sanwa Bank Ltd. (Finance).............................................. 14,000 207,643
Sawako Corp. (Consumer Discretionary).................................. 5,000 90,735
Shimachu Co. (Consumer Discretionary).................................. 9,700 291,118
Sony Music Entertainment, Inc. (Information & Entertainment)........... 9,300 435,709
Square Co., Ltd. (Information Technology).............................. 4,200 207,032
Sumitomo Rubber Industries Ltd. (Consumer Discretionary)............... 56,000 376,688
Tokyo Steel Manufacturing Co. (Materials).............................. 8,400 93,806
Toyo Ink Manufacturing Co. (Materials)................................. 87,000 347,636
Yamato Kogyo Co. (Materials)........................................... 46,000 453,499
-----------
11,422,475
-----------
MALAYSIA -- 1.2%
Bumi Armada Bhd (Industrial & Commercial).............................. 770 1,891
Land & General Bhd (Real Estate)+...................................... 70,000 80,428
Renong Bhd (Industrial & Commercial)+.................................. 60,000 78,447
Resorts World Bhd (Information & Entertainment)........................ 43,000 129,477
Sime Darby Bhd (Industrial & Commercial)............................... 78,000 259,588
Sungei Way Holdings Bhd (Multi-Industry)*.............................. 23,000 43,376
-----------
593,207
-----------
</TABLE>
---------------------
25
<PAGE> 26
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
MEXICO -- 2.6%
Cemex SA de CV (Materials)............................................. 50,000 $ 217,049
Corporacion GEO SA de CV, Class B (Consumer Discretionary)+............ 32,000 184,410
Fomento Economico Mexicano SA de CV (Consumer Staples)................. 31,000 184,498
Grupo Financiero Bancomer SA de CV, Series B (Finance)................. 330,000 158,616
Grupo Televisa SA de CV (Information & Entertainment).................. 8,100 123,322
Kimberly-Clark de Mexico SA de CV, Class A (Materials)................. 70,000 281,850
Panamerican Beverages, Inc., Class A ADR (Consumer Staples)............ 3,700 121,638
-----------
1,271,383
-----------
NETHERLANDS -- 3.1%
Akzo Nobel NV (Materials).............................................. 2,720 372,755
Internationale Nederlanden Groep NV (Finance).......................... 14,765 680,744
PolyGram NV (Information & Entertainment).............................. 8,400 440,776
-----------
1,494,275
-----------
NEW ZEALAND -- 1.2%
Air New Zealand Ltd., Class B (Information & Entertainment)+........... 34,561 105,640
Brierley Investments Ltd. (Finance)+................................... 128,000 125,199
Carter Holt Harvey Ltd. (Materials).................................... 139,000 359,724
-----------
590,563
-----------
NORWAY -- 1.2%
Nycomed ASA, Series A (Healthcare)+.................................... 20,000 294,712
Saga Petroleum ASA, Series A (Energy).................................. 15,000 284,478
-----------
579,190
-----------
PHILIPPINES -- 0.4%
Philipino Telephone Corp. (Utilities).................................. 100,000 50,235
Philippine Long Distance Telephone Co. ADR (Utilities)................. 2,000 128,500
-----------
178,735
-----------
SINGAPORE -- 2.3%
Development Bank of Singapore Ltd. alien shares (Finance).............. 25,250 317,899
Keppel Corp., Ltd. (Industrial & Commercial)........................... 46,000 204,309
Keppel Corp., Ltd., Class A (Industrial & Commercial).................. 11,500 49,871
Keppel Fels Ltd. (Energy).............................................. 66,000 223,431
Keppel Land Ltd. (Real Estate)......................................... 50,000 132,895
United Overseas Bank Ltd. alien shares (Finance)....................... 20,000 205,637
-----------
1,134,042
-----------
SOUTH KOREA -- 0.5%
Chosun Brewery Co., Ltd. (Consumer Staples)............................ 3,020 78,901
Hanwha Chemical (Materials)............................................ 7,353 57,963
Samsung Fire & Marine Insurance (Finance)+............................. 130 48,829
Shinsegae Department Street (Consumer Discretionary)................... 2,000 78,829
-----------
264,522
-----------
SPAIN -- 0.6%
Empresa Nacional de Electricidad SA (Utilities)........................ 1,700 142,715
Telefonica de Espana SA (Utilities).................................... 4,600 132,989
-----------
275,704
-----------
SWEDEN -- 2.2%
Nordbanken AB (Finance)................................................ 10,190 343,816
Pharmacia & Upjohn, Inc. (Healthcare).................................. 18,100 610,704
Sparbanken Sverige AB (Finance)........................................ 5,760 128,075
-----------
1,082,595
-----------
</TABLE>
- ---------------------
26
<PAGE> 27
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
SWITZERLAND -- 1.8%
Ciba Specialty Chemicals AG (Healthcare)+.............................. 80 $ 7,397
Gebrueder Sulzer AG (Consumer Staples)+................................ 660 565,069
Nestle SA (Consumer Staples)........................................... 233 307,368
-----------
879,834
-----------
THAILAND -- 0.5%
Land & House PCL alien shares (Real Estate)+........................... 20,000 41,691
Siam City Cement PCL alien shares (Materials).......................... 18,000 72,959
Siam Commercial Bank PCL alien shares (Finance)........................ 30,000 122,756
-----------
237,406
-----------
UNITED KINGDOM -- 14.7%
Amersham International PLC (Healthcare)................................ 300 7,994
Associated British Foods PLC (Consumer Staples)........................ 67,800 583,731
Bass PLC (Consumer Staples)............................................ 17,700 216,058
BOC Group PLC (Materials).............................................. 22,700 394,467
Boots Co. PLC (Consumer Discretionary)................................. 45,000 527,942
British Petroleum Co. PLC (Energy)..................................... 5,500 68,419
British Telecommunications PLC (Utilities)............................. 45,000 334,226
BTR PLC (Industrial & Commercial)...................................... 110,000 376,441
Burmah Castrol PLC (Energy)............................................ 23,500 397,607
Carlton Communications PLC (Information & Entertainment)............... 50,000 423,403
Centrica PLC (Utilities)+.............................................. 340,000 413,449
Cookson Group PLC (Information Technology)............................. 122,307 427,724
De La Rue PLC (Materials).............................................. 38,258 237,642
Guinness PLC (Consumer Discretionary).................................. 61,000 597,310
National Grid Group PLC (Utilities).................................... 54,270 196,116
PowerGen PLC (Utilities)............................................... 34,113 405,612
Rank Group PLC (Information & Entertainment)........................... 66,000 418,207
Reckitt & Colman PLC (Consumer Staples)................................ 27,010 403,469
Royal & Sun Alliance Insurance Group PLC (Finance)..................... 33,181 245,338
Sainsbury (J.) PLC (Consumer Discretionary)............................ 80,647 488,858
-----------
7,164,013
-----------
TOTAL COMMON STOCK (cost $41,306,667).................................. 45,503,206
-----------
PREFERRED STOCK -- 2.4%
----------------------------------------------------------------------------------------------------
BRAZIL -- 1.3%
Banco Itau SA (Finance)+............................................... 166,000 92,980
Companhia Energetica de Minas Gerais (Utilities)....................... 1,819,000 93,776
Centrais Electricas Brasileiras SA-Electrobras, Series B (Utilities)... 5,000 2,982
Companhia Vale Rio Doce, Class B (Materials)........................... 5,500 0
Companhia Paranaense de Energia, Class B (Utilities)................... 10,955,600 203,532
Petroleo Brasileiros SA (Energy)....................................... 853,000 236,919
-----------
630,189
-----------
GERMANY -- 0.7%
Hornbach Holding AG (Consumer Discretionary)........................... 3,900 330,944
-----------
VENEZUELA -- 0.4%
Quilmes Industrial Quinsa Societe ADR (Consumer Staples)............... 18,300 212,737
-----------
TOTAL PREFERRED STOCK (cost $944,246).................................. 1,173,870
-----------
TOTAL INVESTMENT SECURITIES (cost $42,250,913)......................... 46,677,076
-----------
</TABLE>
---------------------
27
<PAGE> 28
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT -- 4.4% AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (Note 3)
(cost $2,160,000).................................................... $2,160,000 $ 2,160,000
-----------
TOTAL INVESTMENTS --
(cost $44,410,913) 100.6% 48,837,076
Liabilities in excess of other assets -- (0.6) (302,039)
------ -----------
NET ASSETS -- 100.0% $48,535,037
===== ===========
</TABLE>
-----------------------------
+ Non-income producing securities
* Resale restricted to qualified institutional buyers
ADR - American Depository Receipts
GDR - Global Depository Receipts
See Notes to Financial Statements
28
<PAGE> 29
- ---------------------
ANCHOR SERIES TRUST
GROWTH PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 97.9% SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CONSUMER DISCRETIONARY -- 9.4%
Automotive -- 1.5%
Ford Motor Co. ....................................................... 67,000 $ 2,529,250
Goodyear Tire & Rubber Co. ........................................... 38,500 2,437,531
Harley-Davidson, Inc. ................................................ 28,000 1,342,250
Retail -- 7.9%
Arbor Drugs, Inc. .................................................... 124,500 2,505,563
Barnes & Noble, Inc.+................................................. 79,000 3,397,000
CVS Corp. ............................................................ 33,000 1,691,250
Dayton Hudson Corp. .................................................. 95,000 5,052,812
Ethan Allen Interiors, Inc. .......................................... 25,000 1,425,000
Home Depot, Inc. ..................................................... 86,000 5,928,625
Office Max, Inc.+..................................................... 138,000 1,992,375
Saks Holdings, Inc.+.................................................. 87,000 2,175,000
Sears, Roebuck & Co. ................................................. 77,500 4,165,625
Wal-Mart Stores, Inc. ................................................ 160,000 5,410,000
-------------
40,052,281
-------------
CONSUMER STAPLES -- 7.0%
Food, Beverage & Tobacco -- 3.6%
General Mills, Inc. .................................................. 45,000 2,930,625
PepsiCo, Inc. ........................................................ 82,500 3,098,906
Philip Morris Cos., Inc. ............................................. 94,000 4,171,250
Sara Lee Corp. ....................................................... 120,600 5,019,975
Household Products -- 3.4%
Bush Boake Allen, Inc.+............................................... 65,000 2,023,125
Estee Lauder Cos., Inc., Class A...................................... 37,300 1,874,325
Kimberly-Clark Corp. ................................................. 75,600 3,761,100
Procter & Gamble Co. ................................................. 49,000 6,921,250
-------------
29,800,556
-------------
ENERGY -- 5.6%
Energy Services -- 1.1%
Santa Fe International Corp.+......................................... 11,700 397,800
Schlumberger Ltd. .................................................... 35,000 4,375,000
Energy Sources -- 4.5%
Amoco Corp. .......................................................... 77,000 6,694,187
Barrett Resources Corp.+.............................................. 9,700 290,394
Chevron Corp. ........................................................ 75,000 5,545,313
Exxon Corp. .......................................................... 77,400 4,760,100
Union Pacific Resources Group, Inc. .................................. 70,418 1,751,648
-------------
23,814,442
-------------
FINANCE -- 16.7%
Banks -- 5.9%
Associated Banc Corp. ................................................ 49,200 1,943,400
Citicorp.............................................................. 34,000 4,099,125
First Commercial Corp. ............................................... 39,322 1,617,117
First Union Corp. .................................................... 63,000 5,827,500
Mercantile Bankshares Corp. .......................................... 33,000 1,320,000
</TABLE>
---------------------
29
<PAGE> 30
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE (continued)
Banks (continued)
NationsBank Corp. .................................................... 73,000 $ 4,708,500
Pacific Century Financial Corp. ...................................... 39,000 1,803,750
State Street Boston Corp. ............................................ 44,800 2,072,000
Wilmington Trust Corp. ............................................... 35,000 1,601,250
Financial Services -- 3.8%
American Express Co. ................................................. 81,000 6,034,500
Federal National Mortgage Association................................. 144,000 6,282,000
Morgan Stanley, Dean Witter, Discover & Co. .......................... 92,400 3,978,975
Insurance -- 7.0%
Ace Co., Ltd. ........................................................ 57,000 4,210,875
Allstate Corp. ....................................................... 84,600 6,175,800
American International Group, Inc. ................................... 47,500 7,095,313
Frontier Insurance Group, Inc. ....................................... 51,100 3,308,725
Reinsurance Group America, Inc. ...................................... 30,500 1,753,750
Travelers Group, Inc. ................................................ 110,000 6,936,875
-------------
70,769,455
-------------
HEALTHCARE -- 13.1%
Drugs -- 7.8%
American Home Products Corp. ......................................... 20,000 1,530,000
Cognizant Corp. ...................................................... 5,100 206,550
Genzyme Corp.+........................................................ 67,000 1,859,250
Johnson & Johnson Co. ................................................ 15,000 965,625
Merck & Co., Inc. .................................................... 35,000 3,622,500
Pfizer, Inc. ......................................................... 54,000 6,453,000
Pharmacia & Upjohn, Inc. ............................................. 80,000 2,780,000
Rhone-Poulenc Rorer, Inc. ............................................ 69,400 6,306,725
Warner-Lambert Co. ................................................... 48,000 5,964,000
Zeneca Group PLC ADR.................................................. 34,000 3,370,250
Health Services -- 2.6%
Columbia/HCA Healthcare Corp. ........................................ 75,000 2,948,437
Shared Medical Systems Corp. ......................................... 55,000 2,970,000
Tenet Healthcare Corp.+............................................... 70,000 2,069,375
United Healthcare Corp. .............................................. 58,800 3,057,600
Medical Products -- 2.7%
Abbott Laboratories, Inc. ............................................ 90,000 6,007,500
Biomet, Inc. ......................................................... 100,000 1,862,500
Life Technologies, Inc. .............................................. 77,000 2,136,750
Nellcor Puritan Bennett, Inc.+........................................ 89,000 1,613,125
-------------
55,723,187
-------------
INDUSTRIAL & COMMERCIAL -- 13.9%
Aerospace & Military Technology -- 2.7%
Boeing Co. ........................................................... 104,000 5,518,500
General Motors Corp., Class H ........................................ 40,000 2,310,000
United Technologies Corp. ............................................ 44,000 3,652,000
Business Services -- 3.4%
Avnet, Inc. .......................................................... 19,500 1,121,250
Dames & Moore, Inc. .................................................. 100,000 1,237,500
Foster Wheeler Corp. ................................................. 100,000 4,050,000
G & K Services, Inc. ................................................. 71,500 2,663,375
Ionics, Inc. ......................................................... 32,000 1,456,000
Metromail Corp.+...................................................... 101,000 2,499,750
Tetra Tech, Inc.+..................................................... 60,000 1,447,500
</TABLE>
- ---------------------
30
<PAGE> 31
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL & COMMERCIAL (continued)
Electrical Equipment -- 3.7%
General Electric Co. ................................................. 128,000 $ 8,368,000
Hubbell, Inc. ........................................................ 94,000 4,136,000
Littelfuse, Inc.+..................................................... 118,000 3,333,500
Machinery -- 1.6%
Caterpillar, Inc. .................................................... 38,000 4,080,250
Donaldson Co., Inc. .................................................. 55,000 2,090,000
MSC Industrial Direct, Inc., Class A+................................. 15,000 601,875
Multi-Industry -- 1.2%
Minnesota Mining & Manufacturing Co. ................................. 49,000 4,998,000
Transportation -- 1.3%
Air Express International Corp. ...................................... 61,000 2,424,750
Union Pacific Corp. .................................................. 43,000 3,031,500
-------------
59,019,750
-------------
INFORMATION & ENTERTAINMENT -- 5.1%
Broadcasting & Media -- 1.7%
ADVO, Inc.+........................................................... 105,000 1,706,250
Gannett Co., Inc. .................................................... 55,000 5,431,250
Entertainment Products -- 0.3%
Speedway Motorsports, Inc.+........................................... 65,000 1,413,750
Leisure & Tourism -- 3.1%
Landry's Seafood Restaurants, Inc.+................................... 38,000 874,000
McDonald's Corp. ..................................................... 98,000 4,734,625
Mirage Resorts, Inc.+................................................. 130,000 3,282,500
Southwest Airlines Co. ............................................... 165,000 4,269,375
-------------
21,711,750
-------------
INFORMATION TECHNOLOGY -- 17.7%
Communication Equipment -- 3.4%
Andrew Corp.+......................................................... 50,000 1,406,250
Cisco Systems, Inc.+.................................................. 90,000 6,041,250
General Instrument Corp.+............................................. 60,000 1,500,000
Lucent Technologies, Inc. ............................................ 34,167 2,462,159
Motorola, Inc. ....................................................... 40,000 3,040,000
Computers & Business Equipment -- 2.7%
Adaptec, Inc.+........................................................ 52,600 1,827,850
EMC Corp.+............................................................ 84,000 3,276,000
Hewlett-Packard Co. .................................................. 77,000 4,312,000
International Business Machines Corp. ................................ 24,000 2,164,500
Electronics -- 3.7%
AMP, Inc. ............................................................ 81,000 3,381,750
Analog Devices, Inc.+................................................. 110,000 2,921,875
Dallas Semiconductor Corp. ........................................... 50,000 1,962,500
Intel Corp. .......................................................... 35,000 4,963,438
Maxim Integrated Products, Inc.+...................................... 45,000 2,559,375
Software -- 7.9%
American Management Systems, Inc.+.................................... 88,000 2,354,000
Automatic Data Processing, Inc. ...................................... 112,000 5,264,000
BISYS Group, Inc.+.................................................... 45,500 1,899,625
Cognos, Inc.+......................................................... 43,000 1,338,375
Computer Sciences Corp.+.............................................. 18,000 1,298,250
DST Systems, Inc.+.................................................... 59,000 1,965,438
First Data Corp. ..................................................... 79,000 3,471,062
</TABLE>
---------------------
31
<PAGE> 32
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
INFORMATION TECHNOLOGY (continued)
Software (continued)
Microsoft Corp.+...................................................... 45,000 $ 5,686,875
Policy Management Systems Corp.+...................................... 52,000 2,444,000
Sterling Commerce, Inc.+.............................................. 35,000 1,150,625
Sterling Software, Inc.+.............................................. 78,000 2,437,500
Synopsys, Inc.+....................................................... 45,000 1,653,750
Systems & Computer Technology Corp.+.................................. 94,000 2,514,500
-------------
75,296,947
-------------
MATERIALS -- 6.3%
Chemicals -- 2.5%
du Pont (E.I.) de Nemours & Co. ...................................... 72,000 4,527,000
Engelhard Corp. ...................................................... 149,925 3,139,055
Minerals Technologies, Inc. .......................................... 47,000 1,762,500
Schulman A., Inc. .................................................... 53,000 1,305,125
Metals & Minerals -- 1.9%
Aluminum Co. of America............................................... 44,000 3,316,500
Phelps Dodge Corp. ................................................... 36,400 3,100,825
UCAR International, Inc.+............................................. 33,000 1,509,750
Paper Products -- 1.9%
Bemis Co., Inc. ...................................................... 26,000 1,124,500
Crown, Cork & Seal, Inc. ............................................. 45,000 2,404,687
International Paper Co. .............................................. 92,000 4,467,750
-------------
26,657,692
-------------
UTILITIES -- 3.1%
Telephone -- 3.1%
AT&T Corp. ........................................................... 90,000 3,155,625
Century Telephone Enterprises, Inc. .................................. 41,000 1,381,188
Qwest Communications International, Inc.+............................. 5,300 144,425
SBC Communications, Inc. ............................................. 106,000 6,558,750
WorldCom, Inc.+....................................................... 55,000 1,760,000
-------------
12,999,988
-------------
TOTAL INVESTMENT SECURITIES (cost $286,657,257)....................... 415,846,048
-------------
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT -- 2.0% AMOUNT
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (Note 3) (cost $8,260,000)......... $8,260,000 8,260,000
-------------
TOTAL INVESTMENTS --
(cost $294,917,257) 99.9% 424,106,048
Other assets less liabilities -- 0.1 512,227
----- ------------
NET ASSETS -- 100.0% $424,618,275
===== ============
</TABLE>
-----------------------------
+ Non-income producing securities
ADR - American Depository Receipts
See Notes to Financial Statements
- ---------------------
32
<PAGE> 33
- ---------------------
ANCHOR SERIES TRUST
CAPITAL APPRECIATION
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 92.7% SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER DISCRETIONARY -- 10.5%
Apparel & Textiles -- 0.9%
Tommy Hilfiger Corp.+................................................ 140,000 $ 5,626,250
Retail -- 9.6%
Barnes & Noble, Inc.+................................................ 275,000 11,825,000
Bed Bath & Beyond, Inc.+............................................. 375,000 11,390,625
Gadzooks, Inc.+...................................................... 139,700 2,724,150
Gymboree Corp.+...................................................... 200,000 4,800,000
Home Depot, Inc...................................................... 130,000 8,961,875
Hot Topic, Inc.+..................................................... 58,100 1,307,250
Linens' N Things, Inc.+.............................................. 118,800 3,519,450
Mercantile Stores Co., Inc........................................... 200,000 12,587,500
Saks Holdings, Inc.+................................................. 225,000 5,625,000
-------------
68,367,100
-------------
CONSUMER STAPLES -- 1.3%
Food, Beverage & Tobacco -- 0.4%
General Cigar Holdings, Inc., Class A+............................... 92,500 2,722,969
Household Products -- 0.9%
Revlon, Inc., Class A+............................................... 110,000 5,699,375
-------------
8,422,344
-------------
ENERGY -- 6.9%
Energy Services -- 5.5%
ENSCO International, Inc.+........................................... 170,000 8,967,500
Santa Fe International Corp.+........................................ 150,900 5,130,600
Transocean Offshore, Inc............................................. 303,619 22,050,330
Energy Sources -- 1.4%
Unocal Corp.......................................................... 115,000 4,463,437
Vastar Resources, Inc................................................ 130,000 4,558,125
-------------
45,169,992
-------------
FINANCE -- 9.6%
Financial Services -- 4.1%
Interra Financial, Inc............................................... 80,000 3,355,000
Legg Mason, Inc...................................................... 140,000 7,533,750
McDonald & Co. Investments, Inc...................................... 85,000 3,899,375
Morgan Keegan, Inc................................................... 233,500 4,640,813
Piper Jaffray Cos., Inc.............................................. 260,000 5,330,000
Raymond James Financial, Inc......................................... 75,000 2,053,125
Insurance -- 5.5%
Ace Co., Ltd......................................................... 250,000 18,468,750
Allstate Corp........................................................ 175,000 12,775,000
Transatlantic Holdings, Inc.......................................... 45,000 4,466,250
-------------
62,522,063
-------------
</TABLE>
---------------------
33
<PAGE> 34
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE -- 14.4%
Drugs -- 6.4%
Eisai Co., Ltd....................................................... 480,000 $ 9,087,420
Genzyme Corp.+....................................................... 440,000 12,210,000
Immunex Corp.+....................................................... 209,300 7,587,125
Rhone-Poulenc Rorer, Inc............................................. 140,000 12,722,500
Health Services -- 6.6%
Beverly Enterprises, Inc.+........................................... 500,000 8,125,000
Columbia/HCA Healthcare Corp......................................... 280,000 11,007,500
IDX Systems Corp.+................................................... 90,000 3,105,000
Magellan Health Services, Inc.+...................................... 200,000 5,900,000
Vencor, Inc.+........................................................ 350,000 14,787,500
Medical Products -- 1.4%
Biomet, Inc.......................................................... 350,000 6,518,750
Heartstream, Inc.+................................................... 140,000 1,225,000
Physio-Control International Corp.+.................................. 115,000 1,725,000
-------------
94,000,795
-------------
INDUSTRIAL & COMMERCIAL -- 9.3%
Aerospace & Military Technology -- 4.2%
General Motors Corp., Class H........................................ 50,000 2,887,500
Gulfstream Aerospace Corp.+.......................................... 280,000 8,260,000
Loral Space & Communications Corp.+.................................. 225,000 3,375,000
Precision Castparts Corp............................................. 215,000 12,819,375
Business Services -- 2.7%
American Residential Services, Inc.+................................. 150,000 3,487,500
Pierce Leahy Corp.................................................... 24,600 442,800
Republic Industries, Inc.+*.......................................... 320,700 7,977,412
Service Experts, Inc.+............................................... 124,900 3,060,050
West TeleServices Corp.+............................................. 175,000 2,581,250
Electrical Equipment -- 1.1%
Generale Cable Corp.+................................................ 282,900 7,249,313
Transportation -- 1.3%
Pittston Burlington Co............................................... 175,000 4,921,875
Werner Enterprises, Inc.............................................. 200,000 3,875,000
-------------
60,937,075
-------------
INFORMATION & ENTERTAINMENT -- 13.1%
Broadcasting & Media -- 13.1%
American Radio Systems Corp., Class A+............................... 274,500 10,945,687
CanWest Global Communications Corp. ................................. 200,000 2,962,500
Central European Media Enterprises Ltd., Class A+.................... 140,000 3,640,000
Gaylord Entertainment Co., Class A................................... 7,300 168,356
Jacor Communications, Inc.+.......................................... 225,000 8,606,250
Lamar Advertising Co., Class A....................................... 110,000 2,805,000
LodgeNet Entertainment Corp.+........................................ 181,100 1,811,000
Metro Networks, Inc.+................................................ 200,000 4,850,000
Outdoor Systems, Inc.+............................................... 191,950 7,342,088
Pulitzer Publishing Co............................................... 92,766 4,916,598
Scripps (E.W.) Co., Class A.......................................... 70,000 2,913,750
TCI Satellite Entertainment, Inc., Class A+.......................... 175,000 1,378,125
</TABLE>
- ---------------------
34
<PAGE> 35
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
INFORMATION & ENTERTAINMENT (continued)
Broadcasting & Media (continued)
Tele-Communications Liberty Media Group, Class A+.................... 735,000 $ 17,456,250
Universal Outdoor Holdings, Inc. .................................... 131,000 4,568,625
Viacom, Inc., Class A+............................................... 11,200 329,700
Viacom, Inc., Class B+............................................... 249,861 7,495,830
Young Broadcasting, Inc., Class A+................................... 100,000 3,250,000
-------------
85,439,759
-------------
INFORMATION TECHNOLOGY -- 27.6%
Communication Equipment -- 5.3%
APT Satellite Holdings Ltd. ADR+..................................... 215,000 2,714,375
Gilat Satellite Networks Ltd.+....................................... 135,000 4,488,750
Larscom, Inc., Class A+.............................................. 150,000 1,612,500
Natural Microsystems Corp.+.......................................... 90,000 3,240,000
Nokia Corp., Class A ADR............................................. 165,000 12,168,750
NTL, Inc.+........................................................... 146,666 3,648,317
Scitex Corp. Ltd. ................................................... 218,800 1,928,175
Teledata Communications, Inc.+....................................... 78,500 2,698,437
VideoServer, Inc.+................................................... 150,000 1,987,500
Computers & Business Equipment -- 2.8%
Adaptec, Inc.+....................................................... 190,000 6,602,500
EMC Corp.+........................................................... 300,000 11,700,000
Electronics -- 4.1%
Analog Devices, Inc.+................................................ 350,000 9,296,875
Peak International Ltd.+............................................. 83,400 1,000,800
Philips Electronics NV ADR........................................... 165,000 11,859,375
Xilinx, Inc.+........................................................ 100,000 4,906,250
Software -- 15.4%
BA Merchants Services, Inc., Class A+................................ 225,000 4,289,063
BISYS Group, Inc.+................................................... 240,000 10,020,000
BMC Software, Inc. .................................................. 170,000 9,413,750
Cadence Design Systems, Inc.+........................................ 415,000 13,902,500
Cognos, Inc.+........................................................ 250,000 7,781,250
Computer Sciences Corp.+............................................. 135,000 9,736,875
DST Systems, Inc.+................................................... 250,000 8,328,125
First Data Corp...................................................... 235,000 10,325,312
Parametric Technology Corp.+......................................... 193,400 8,231,587
Policy Management Systems Corp.+..................................... 75,000 3,525,000
Rational Software Corp.+............................................. 150,000 2,521,875
Sterling Commerce, Inc.+............................................. 88,964 2,924,692
Sterling Software, Inc.+............................................. 300,000 9,375,000
-------------
180,227,633
-------------
TOTAL COMMON STOCK (cost $471,785,810)............................... 605,086,761
-------------
<CAPTION>
PREFERRED STOCK -- 0.1%
<S> <C> <C>
----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
INFORMATION & ENTERTAINMENT -- 0.1%
Broadcasting & Media -- 0.1%
News Corp., Ltd. ADR (cost $868,645)................................. 50,000 781,250
-------------
TOTAL INVESTMENT SECURITIES (cost $472,654,455)...................... 605,868,011
-------------
</TABLE>
---------------------
35
<PAGE> 36
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT -- 6.7% AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
Joint Repurchase Agreement Account (Note 3)
(cost $43,745,000)................................................. $43,745,000 $ 43,745,000
-------------
TOTAL INVESTMENTS --
(cost $516,399,455) 99.5% 649,613,011
Other assets less liabilities -- 0.5 3,356,127
------ -------------
NET ASSETS -- 100.0% $652,969,138
==============
======
</TABLE>
-----------------------------
+ Non-income producing securities
* Resale restricted to qualified institutional buyers
ADR - American Depository Receipts
See Notes to Financial Statements
- ---------------------
36
<PAGE> 37
- ---------------------
ANCHOR SERIES TRUST
NATURAL RESOURCES
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 91.1% SHARES VALUE
<S> <C> <C>
----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
ENERGY -- 32.6%
Energy Sources -- 32.6%
Alberta Energy Co., Ltd. .............................................. 40,000 $ 1,006,553
Amerada Hess Corp. .................................................... 24,390 1,355,169
Anadarko Petroleum Corp. .............................................. 10,000 600,000
Barrett Resources Corp.+............................................... 30,000 898,125
Chevron Corp. ......................................................... 20,000 1,478,750
Elan Energy, Inc.+..................................................... 16,000 115,283
Enron Oil & Gas Co. ................................................... 20,600 373,375
Imperial Oil Ltd. ..................................................... 20,000 1,027,500
Norsk Hydro ASA ADR.................................................... 30,000 1,625,625
Northstar Energy Corp.+................................................ 30,000 260,690
PanCanadian Petroleum Ltd. ............................................ 60,000 1,260,002
Poco Petroleum Ltd.+................................................... 60,000 608,277
Pogo Producing Co. .................................................... 15,000 580,313
Talisman Energy, Inc.+................................................. 27,000 830,950
Total SA ADR........................................................... 23,193 1,174,146
Ultramar Diamond Shamrock Corp.+....................................... 20,200 659,025
Unocal Corp. .......................................................... 14,020 544,151
Vastar Resources, Inc. ................................................ 30,000 1,051,875
YPF Sociedad Anonima, Class D ADR...................................... 38,000 1,168,500
-----------
16,618,309
-----------
MATERIALS -- 58.5%
Metals & Minerals -- 47.5%
Agnico Eagle Mines Ltd. ............................................... 32,000 308,000
Alumax, Inc.+.......................................................... 20,200 766,338
Aluminum Co. of America................................................ 17,600 1,326,600
Amax Gold, Inc.+....................................................... 94,000 575,750
Barrick Gold Corp. .................................................... 70,000 1,540,000
British Steel PLC ADR.................................................. 19,000 479,750
Broken Hill Proprietary Co., Ltd. ADR.................................. 20,000 595,000
Carbide/Graphite Group, Inc.+.......................................... 42,100 978,825
Century Aluminum Co. .................................................. 17,800 260,325
EASCO, Inc. ........................................................... 59,000 575,250
Freeport-McMoRan Copper & Gold, Inc., Class A.......................... 62,900 1,839,825
Freeport-McMoRan Copper & Gold, Inc., Class B.......................... 10,000 294,375
Hecla Mining Co.+...................................................... 17,300 92,988
Homestake Mining Co. .................................................. 79,685 1,040,885
Lukens, Inc. .......................................................... 52,000 978,250
Newcrest Mining Ltd. .................................................. 95,953 265,338
Newmont Gold Co. ...................................................... 22,600 902,587
Newmont Mining Corp. .................................................. 88,150 3,437,850
Normandy Mining Ltd. .................................................. 626,155 705,093
Phelps Dodge Corp. .................................................... 21,500 1,831,531
Placer Dome, Inc. ..................................................... 90,000 1,473,750
RTZ Corp. PLC.......................................................... 30,083 524,268
Titanium Metals Corp.+................................................. 38,000 1,201,750
</TABLE>
---------------------
37
<PAGE> 38
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
MATERIALS (continued)
Metals & Minerals (continued)
TVX Gold, Inc.+........................................................ 133,000 $ 706,563
UCAR International, Inc.+.............................................. 20,750 949,312
Western Mining Corp. Holdings Ltd. .................................... 81,824 516,351
Paper Products -- 11.0%
Bowater, Inc. ......................................................... 14,000 647,500
International Paper Co. ............................................... 15,000 728,437
Longview Fibre Co. .................................................... 30,000 498,750
Temple-Inland, Inc. ................................................... 14,500 783,000
Weyerhaeuser Co. ...................................................... 30,000 1,560,000
Willamette Industries, Inc. ........................................... 20,000 1,400,000
-----------
29,784,241
-----------
TOTAL INVESTMENT SECURITIES (cost $41,889,786)......................... 46,402,550
-----------
PRINCIPAL
REPURCHASE AGREEMENT -- 10.1% AMOUNT
----------------------------------------------------------------------------------------------------
Joint Repurchase Agreement Account (Note 3)
(cost $5,175,000).................................................... $5,175,000 5,175,000
-----------
TOTAL INVESTMENTS -- (cost $47,064,786) 101.2% 51,577,550
Liabilities in excess of other assets -- (1.2) (626,098)
------ -----------
NET ASSETS -- 100.0% $50,951,452
===========
======
</TABLE>
-----------------------------
+ Non-income producing securities
ADR - American Depository Receipts
See Notes to Financial Statements
- ---------------------
38
<PAGE> 39
- ---------------------
ANCHOR SERIES TRUST
MULTI-ASSET PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 59.4% SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER DISCRETIONARY -- 6.0%
Apparel & Textiles -- 0.7%
Nike, Inc., Class B................................................... 17,000 $ 992,375
Retail -- 5.3%
CVS Corp. ............................................................ 28,000 1,435,000
Home Depot, Inc. ..................................................... 20,000 1,378,750
Saks Holdings, Inc.+.................................................. 43,000 1,075,000
Sears, Roebuck & Co. ................................................. 27,000 1,451,250
Toys R Us, Inc.+...................................................... 40,000 1,400,000
Wal-Mart Stores, Inc. ................................................ 45,000 1,521,562
-------------
9,253,937
-------------
CONSUMER STAPLES -- 5.1%
Food, Beverage & Tobacco -- 0.8%
Sara Lee Corp. ....................................................... 30,000 1,248,750
Household Products -- 4.3%
Estee Lauder Cos., Inc., Class A...................................... 24,000 1,206,000
Gillette Co. ......................................................... 20,000 1,895,000
Kimberly-Clark Corp. ................................................. 30,000 1,492,500
Procter & Gamble Co. ................................................. 15,000 2,118,750
-------------
7,961,000
-------------
ENERGY -- 5.8%
Energy Services -- 1.7%
Fluor Corp. .......................................................... 20,000 1,103,750
Schlumberger Ltd. .................................................... 12,000 1,500,000
Energy Sources -- 4.1%
Amoco Corp. .......................................................... 17,000 1,477,937
Chevron Corp. ........................................................ 15,000 1,109,063
Exxon Corp. .......................................................... 27,000 1,660,500
Union Pacific Resources Group, Inc. .................................. 37,000 920,375
Unocal Corp. ......................................................... 30,000 1,164,375
-------------
8,936,000
-------------
FINANCE -- 9.4%
Banks -- 2.9%
Citicorp.............................................................. 12,000 1,446,750
First Bank Systems, Inc. ............................................. 22,000 1,878,250
First Union Corp. .................................................... 13,000 1,202,500
Financial Services -- 2.9%
American Express Co. ................................................. 25,000 1,862,500
Federal National Mortgage Association................................. 33,000 1,439,625
Merrill Lynch & Co., Inc. ............................................ 20,000 1,192,500
Insurance -- 3.6%
Allstate Corp. ....................................................... 30,000 2,190,000
American International Group, Inc. ................................... 13,000 1,941,875
Marsh & McLennan Cos., Inc. .......................................... 20,000 1,427,500
-------------
14,581,500
-------------
</TABLE>
---------------------
39
<PAGE> 40
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE -- 10.0%
Drugs -- 7.0%
American Home Products Corp. ......................................... 25,000 $ 1,912,500
Bristol-Myers Squibb Co. ............................................. 20,000 1,620,000
Johnson & Johnson Co. ................................................ 26,000 1,673,750
Merck & Co., Inc. .................................................... 10,000 1,035,000
Pfizer, Inc. ......................................................... 13,000 1,553,500
Pharmacia & Upjohn, Inc. ............................................. 35,000 1,216,250
Warner-Lambert Co. ................................................... 15,000 1,863,750
Health Services -- 1.7%
Columbia/HCA Healthcare Corp. ........................................ 30,000 1,179,375
United Healthcare Corp. .............................................. 27,000 1,404,000
Medical Products -- 1.3%
Abbott Laboratories, Inc. ............................................ 30,000 2,002,500
-------------
15,460,625
-------------
INDUSTRIAL & COMMERCIAL -- 7.1%
Aerospace & Military Technology -- 1.8%
Boeing Co. ........................................................... 24,000 1,273,500
United Technologies Corp. ............................................ 18,000 1,494,000
Electrical Equipment -- 2.5%
General Electric Co. ................................................. 60,000 3,922,500
Machinery -- 0.8%
Caterpillar, Inc. .................................................... 11,000 1,181,125
Multi-Industry -- 1.0%
Minnesota Mining & Manufacturing Co. ................................. 16,000 1,632,000
Transportation -- 1.0%
Union Pacific Corp. .................................................. 22,000 1,551,000
-------------
11,054,125
-------------
INFORMATION & ENTERTAINMENT -- 3.2%
Broadcasting & Media -- 1.3%
Gannett Co., Inc. .................................................... 20,000 1,975,000
Leisure & Tourism -- 1.9%
McDonald's Corp. ..................................................... 40,000 1,932,500
Mirage Resorts, Inc.+................................................. 40,000 1,010,000
-------------
4,917,500
-------------
INFORMATION TECHNOLOGY -- 9.3%
Communication Equipment -- 2.8%
Cisco Systems, Inc.+.................................................. 25,000 1,678,125
Lucent Technologies, Inc. ............................................ 12,315 887,450
Motorola, Inc. ....................................................... 23,000 1,748,000
Computers & Business Equipment -- 2.2%
International Business Machines Corp. ................................ 16,000 1,443,000
Xerox Corp. .......................................................... 25,000 1,971,875
Electronics -- 1.4%
Analog Devices, Inc.+................................................. 45,000 1,195,312
EMC Corp.+............................................................ 25,000 975,000
Software -- 2.9%
Computer Sciences Corp.+.............................................. 20,000 1,442,500
First Data Corp. ..................................................... 36,000 1,581,750
Microsoft Corp.+...................................................... 12,000 1,516,500
-------------
14,439,512
-------------
</TABLE>
- ---------------------
40
<PAGE> 41
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
MATERIALS -- 2.5%
Chemicals -- 0.8%
du Pont (E.I.) de Nemours & Co. ...................................... 20,000 $ 1,257,500
Paper Products -- 0.9%
Crown, Cork & Seal, Inc. ............................................. 24,000 1,282,500
Metals & Minerals -- 0.8%
Phelps Dodge Corp. ................................................... 15,000 1,277,813
-------------
3,817,813
-------------
UTILITIES -- 1.0%
Telephone -- 1.0%
SBC Communications, Inc. ............................................. 25,000 1,546,875
-------------
TOTAL COMMON STOCK (cost $64,213,685)................................. 91,968,887
-------------
<CAPTION>
PRINCIPAL
BONDS & NOTES -- 35.6% AMOUNT
----------------------------------------------------------------------------------------------------
<S> <C> <C>
ENERGY -- 1.0%
Husky Oil Ltd. 7.13% 2006............................................. $1,000,000 988,390
Mobil Oil Corp. 9.17% 2000............................................ 457,500 476,143
-------------
1,464,533
-------------
FINANCE -- 5.6%
Bank of Boston Corp. 6.63% 2004....................................... 1,500,000 1,466,430
Bankers Trust New York Corp. 8.25% 2005............................... 1,000,000 1,061,852
Citicorp 6.75% 2005................................................... 1,500,000 1,476,135
First Financial Caribbean Corp. 7.84% 2006............................ 450,000 453,847
Fleet Mortgage Group, Inc. 6.50% 2000................................. 1,000,000 997,090
General Motors Acceptance Corp. 5.63% 2001............................ 1,000,000 963,660
IBM Credit Receivables Lease Asset Master Trust 4.55% 2000............ 178,346 177,316
Lumbermans Mutual Casualty Co. 9.15% 2026*............................ 1,000,000 1,097,110
Security Benefit Life Co. 8.75% 2016*................................. 1,000,000 1,039,930
-------------
8,733,370
-------------
INDUSTRIAL & COMMERCIAL -- 2.7%
Niagara Mohawk Power Corp. 5.88% 2002................................. 1,250,000 1,191,359
Northrop Grumman Corp. 8.63% 2004..................................... 1,000,000 1,076,360
Philips Electronics NV 7.20% 2026..................................... 1,000,000 1,003,920
TCI Communications, Inc. 6.88% 2006................................... 1,000,000 945,830
-------------
4,217,469
-------------
NON-U.S. GOVERNMENT OBLIGATIONS -- 1.1%
Quebec Province Canada 8.80% 2003..................................... 1,500,000 1,632,345
-------------
U.S. GOVERNMENT & AGENCIES -- 23.9%
Federal Home Loan Mortgage Corp. 6.50% 2010-2026...................... 9,926,109 9,628,836
Federal Home Loan Mortgage Corp. 7.00% 2011........................... 2,604,013 2,606,321
Federal Home Loan Mortgage Corp. 8.50% 2001........................... 1,289,876 1,317,743
Government National Mortgage Association 6.50% TBA.................... 4,237,346 4,053,275
United States Treasury Bonds 7.63% 2022@.............................. 5,000,000 5,446,100
United States Treasury Bonds 10.38% 2012.............................. 3,000,000 3,808,110
United States Treasury Notes 6.63% 2002............................... 7,000,000 7,063,420
United States Treasury Notes 7.00% 2006............................... 3,000,000 3,086,250
-------------
37,010,055
-------------
</TABLE>
---------------------
41
<PAGE> 42
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (continued) AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES -- 1.3%
Korea Telecom 7.63% 2007.............................................. $1,000,000 $ 1,009,980
United States West Capital Funding, Inc. 7.30% 2007................... 1,000,000 1,000,880
-------------
2,010,860
-------------
TOTAL BONDS & NOTES (cost $55,112,966)................................ 55,068,632
-------------
TOTAL INVESTMENT SECURITIES (cost $119,326,651)....................... 147,037,519
-------------
SHORT-TERM SECURITIES -- 0.2%
----------------------------------------------------------------------------------------------------
U.S. GOVERNMENT -- 0.2%
United States Treasury Bills 5.80% due 12/4/97@
(cost $268,003)................................................... 275,000 268,887
-------------
REPURCHASE AGREEMENT -- 3.3%
----------------------------------------------------------------------------------------------------
Joint Repurchase Agreement Account@ (Note 3)
(cost $5,110,000)................................................... 5,110,000 5,110,000
-------------
TOTAL INVESTMENTS --
(cost $124,704,654) 98.5% 152,416,406
Other assets less liabilities -- 1.5 2,338,317
------ -------------
NET ASSETS -- 100.0% $154,754,723
===== =============
</TABLE>
-----------------------------
+ Non-income producing securities
* Resale restricted to qualified institutional buyers
ADR - American Depository Receipts
TBA - Securities purchased on a forward commitment basis with an
approximate principal amount and no definitive maturity
date. The actual principal amount and maturity date will be
determined upon settlement.
@ The security or a portion thereof represents collateral for the
following open futures contracts:
<TABLE>
<CAPTION>
OPEN FUTURES CONTRACTS
--------------------------------------------------------------------------------------------------------------
UNREALIZED
NUMBER OF EXPIRATION VALUE AT VALUE AS OF APPRECIATION/
CONTRACTS DESCRIPTION DATE TRADE DATE JUNE 30, 1997 DEPRECIATION
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11 Short Standard & Poor's 500 Index September 1997 $5,007,854 $ 4,896,375 $(111,479)
41 Long U.S. 10 Year Note September 1997 4,421,594 4,422,875 1,281
------------
Net Unrealized Depreciation................................................... $(110,198)
============
</TABLE>
See Notes to Financial Statements
- ---------------------
42
<PAGE> 43
- ---------------------
ANCHOR SERIES TRUST
STRATEGIC MULTI-ASSET
PORTFOLIO INVESTMENT PORTFOLIO -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK -- 39.1% SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL APPRECIATION -- 15.3%
Aerospace & Military Technology -- 0.6%
Gulfstream Aerospace Corp.+............................................ 4,500 $ 132,750
Precision Castparts Corp............................................... 3,200 190,800
Apparel & Textiles -- 0.1%
Tommy Hilfiger Corp.+.................................................. 1,500 60,281
Broadcasting & Media -- 2.7%
American Radio Systems Corp., Class A+................................. 4,000 159,500
CanWest Global Communications Corp..................................... 2,741 40,606
Central European Media Enterprises Ltd., Class A+...................... 3,500 91,000
Gaylord Entertainment Co., Class A..................................... 100 2,306
Jacor Communications, Inc.+............................................ 5,500 210,375
LodgeNet Entertainment Corp.+.......................................... 7,100 71,000
Metro Networks, Inc.+.................................................. 5,500 133,375
Outdoor Systems, Inc.+................................................. 4,000 153,000
Pulitzer Publishing Co................................................. 2,000 106,000
Scripps (E.W.) Co., Class A............................................ 1,500 62,438
TCI Satellite Entertainment, Inc., Class A+............................ 6,000 47,250
Tele-Communications Liberty Media Group, Inc., Class A+................ 9,500 225,625
Universal Outdoor Holdings, Inc........................................ 3,000 104,625
Viacom, Inc., Class A+................................................. 320 9,420
Viacom, Inc., Class B+................................................. 2,924 87,720
Young Broadcasting, Inc., Class A+..................................... 2,000 65,000
Business Services -- 0.9%
American Residential Services, Inc.+................................... 5,500 127,875
Comfort Systems USA, Inc.+............................................. 4,700 73,438
Pierce Leahy Corp...................................................... 30,000 30,000
Republic Industries, Inc.+*............................................ 4,000 99,500
Service Experts, Inc.+................................................. 4,000 98,000
West TeleServices Corp.+............................................... 5,000 73,750
Communication Equipment -- 1.3%
Cisco Systems, Inc.+................................................... 2,500 167,812
Gilat Satellite Networks Ltd.+......................................... 3,500 116,375
Larscom Inc., Class A.................................................. 6,000 64,500
Nokia Corp., Class A ADR............................................... 2,518 185,725
NTL, Inc.+............................................................. 3,000 74,625
Scitex Corp. Ltd....................................................... 10,000 88,125
VideoServer, Inc.+..................................................... 3,500 46,375
Computers & Business Equipment -- 0.3%
Adaptec, Inc.+......................................................... 2,000 69,500
EMC Corp.+............................................................. 2,500 97,500
Drugs -- 1.1%
Eisai Co., Ltd......................................................... 6,010 113,781
Genzyme Corp.+......................................................... 7,000 194,250
Immunex Corp.+......................................................... 3,400 123,250
Rhone-Poulenc Rorer, Inc............................................... 2,500 227,187
</TABLE>
---------------------
43
<PAGE> 44
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL APPRECIATION (continued)
Electrical Equipment -- 0.2%
Generale Cable Corp.+.................................................. 4,000 $ 102,500
Electronics -- 0.2%
Philips Electronics NV ADR............................................. 2,000 143,750
Energy Services -- 0.9%
ENSCO International, Inc.+............................................. 3,000 158,250
Santa Fe International Corp.+.......................................... 2,000 68,000
Transocean Offshore, Inc............................................... 3,889 282,439
Energy Sources -- 0.4%
Unocal Corp............................................................ 3,916 152,000
Vastar Resources, Inc.................................................. 2,000 70,125
Financial Services -- 0.9%
Interra Financial, Inc................................................. 1,800 75,487
Legg Mason, Inc........................................................ 1,000 53,813
McDonald & Co. Investments, Inc........................................ 1,500 68,812
Morgan Keegan, Inc..................................................... 7,000 139,125
Piper Jaffray Cos., Inc................................................ 8,500 174,250
Food, Beverage & Tobacco -- 0.1%
General Cigar Holdings, Inc., Class A+................................. 2,000 58,875
Health Services -- 0.8%
Beverly Enterprises, Inc.+............................................. 6,000 97,500
Columbia/HCA Healthcare Corp........................................... 3,040 119,500
Magellan Health Services, Inc.+........................................ 2,000 59,000
Vencor, Inc.+.......................................................... 5,000 211,250
Household Products -- 0.1%
Revlon, Inc., Class A+................................................. 1,000 51,813
Insurance -- 0.8%
Ace Ltd................................................................ 3,500 258,563
Allstate Corp.......................................................... 2,500 182,500
Medical Products -- 0.6%
Biomet, Inc............................................................ 3,500 65,188
Sulzer AG.............................................................. 300 256,849
Retail -- 1.0%
Barnes & Noble, Inc.+.................................................. 2,500 107,500
Bed Bath & Beyond, Inc.+............................................... 5,500 167,062
Hot Topic, Inc.+....................................................... 3,600 81,000
Linens' N Things, Inc.+................................................ 1,700 50,363
Mercantile Stores Co., Inc............................................. 2,500 157,344
Saks Holdings, Inc.+................................................... 1,500 37,500
Software -- 2.1%
BA Merchants Services, Inc., Class A+.................................. 4,000 76,250
BISYS Group, Inc.+..................................................... 3,500 146,125
BMC Software, Inc.+.................................................... 4,000 221,500
Cadence Design Systems, Inc.+.......................................... 4,000 134,000
Cognos, Inc.+.......................................................... 4,000 124,500
Computer Sciences Corp.+............................................... 1,205 86,925
DST Systems, Inc.+..................................................... 5,000 166,562
Parametric Technology Corp.+........................................... 2,000 85,125
Policy Management Systems Corp.+....................................... 1,500 70,500
Sterling Software, Inc.+............................................... 4,000 125,000
</TABLE>
- ---------------------
44
<PAGE> 45
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL APPRECIATION (continued)
Transportation -- 0.2%
Pittston Bulington Co.................................................. 1,000 $ 28,125
Werner Enterprises, Inc................................................ 5,000 96,875
------------
8,836,484
------------
CORE EQUITY -- 23.8%
Aerospace & Military Technology -- 0.7%
Boeing Co.............................................................. 4,000 212,250
United Technologies Corp............................................... 2,500 207,500
Apparel & Textiles -- 0.2%
Nike, Inc., Class B.................................................... 2,500 145,938
Banks -- 1.2%
Citicorp............................................................... 2,000 241,125
First Bank Systems, Inc................................................ 3,400 290,275
First Union Corp....................................................... 2,000 185,000
Broadcasting & Media -- 0.5%
Gannett Co., Inc....................................................... 3,000 296,250
Business Services -- 0.3%
Fluor Corp............................................................. 3,000 165,563
Chemicals -- 0.3%
du Pont (E.I.) de Nemours & Co......................................... 3,000 188,625
Communication Equipment -- 0.7%
Lucent Technologies, Inc. ............................................. 2,138 154,070
Motorola, Inc. ........................................................ 3,000 228,000
Computers & Business Equipment -- 1.1%
EMC Corp.+............................................................. 4,000 156,000
International Business Machines Corp................................... 2,600 234,487
Xerox Corp............................................................. 3,000 236,625
Drugs -- 2.9%
American Home Products Corp............................................ 3,500 267,750
Bristol-Myers Squibb Co................................................ 2,500 202,500
Johnson & Johnson Co................................................... 4,000 257,500
Merck & Co., Inc....................................................... 2,000 207,000
Pfizer, Inc............................................................ 2,000 239,000
Pharmacia & Upjohn, Inc................................................ 6,000 208,500
Warner-Lambert Co...................................................... 2,200 273,350
Electrical Equipment -- 1.0%
General Electric Co.................................................... 9,000 588,375
Electronics -- 0.4%
Analog Devices, Inc.+.................................................. 8,000 212,500
Energy Services -- 0.4%
Schlumberger Ltd. ADR.................................................. 2,000 250,000
Energy Sources -- 1.7%
Amoco Corp............................................................. 2,600 226,037
Chevron Corp........................................................... 3,000 221,812
Exxon Corp............................................................. 3,500 215,250
Union Pacific Resources Group, Inc..................................... 5,800 144,275
Unocal Corp............................................................ 5,084 197,313
</TABLE>
---------------------
45
<PAGE> 46
<TABLE>
<CAPTION>
COMMON STOCK (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CORE EQUITY (continued)
Financial Services -- 1.2%
American Express Co.................................................... 3,500 $ 260,750
Federal National Mortgage Association.................................. 4,500 196,312
Merrill Lynch & Co., Inc............................................... 4,000 238,500
Food, Beverage & Tobacco -- 0.5%
Sara Lee Corp.......................................................... 6,500 270,562
Health Services -- 0.7%
Columbia/HCA Healthcare Corp........................................... 4,960 195,000
United Healthcare Corp................................................. 4,000 208,000
Household Products -- 1.6%
Estee Lauder Cos., Inc., Class A....................................... 4,000 201,000
Gillette Co............................................................ 2,000 189,500
Kimberly-Clark Corp.................................................... 5,000 248,750
Procter & Gamble Co.................................................... 2,000 282,500
Insurance -- 1.4%
Allstate Corp.......................................................... 4,500 328,500
American International Group, Inc...................................... 2,000 298,750
Marsh & McLennan Cos., Inc............................................. 2,600 185,575
Leisure & Tourism -- 0.8%
McDonald's Corp........................................................ 6,000 289,875
Mirage Resorts, Inc.+.................................................. 8,000 202,000
Machinery -- 0.3%
Caterpillar, Inc....................................................... 1,500 161,063
Medical Products -- 0.5%
Abbott Laboratories, Inc............................................... 4,500 300,375
Metals & Minerals -- 0.4%
Phelps Dodge Corp...................................................... 2,500 212,969
Multi-industry -- 0.3%
Minnesota Mining & Manufacturing Co.................................... 1,600 163,200
Paper Products -- 0.4%
Crown, Cork & Seal, Inc................................................ 4,000 213,750
Retail -- 2.2%
CVS Corp............................................................... 5,000 256,250
Home Depot, Inc........................................................ 2,800 193,025
Saks Holdings, Inc.+................................................... 7,000 175,000
Sears, Roebuck & Co.................................................... 4,000 215,000
Toys R Us, Inc.+....................................................... 6,000 210,000
Wal-Mart Stores, Inc................................................... 7,000 236,687
Software -- 1.3%
Computer Sciences Corp.+............................................... 2,995 216,000
First Data Corp........................................................ 6,000 263,625
Microsoft Corp.+....................................................... 2,000 252,750
Telephone -- 0.4%
SBC Communications, Inc................................................ 4,000 247,500
Transportation -- 0.4%
Union Pacific Corp..................................................... 3,000 211,500
------------
13,777,138
------------
TOTAL COMMON STOCK (cost $16,378,748).................................. 22,613,622
------------
</TABLE>
- ---------------------
46
<PAGE> 47
<TABLE>
<CAPTION>
PREFERRED STOCK -- 0.8% SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CAPITAL APPRECIATION -- 0.1%
Financial Services -- 0.1%
Chevy Chase Preferred Capital Corp., Series A.......................... 1,655 $ 87,715
------------
BRAZIL -- 0.5%
Banks -- 0.1%
Banco Itau SA+......................................................... 66,000 36,968
Electric Utilities -- 0.1%
Companhia Energetica de Minas Geruis................................... 717,000 36,964
Energy Sources -- 0.3%
Companhia Paranaense de Energia, Class B............................... 4,807,500 89,313
Petroleo Brasileiros SA................................................ 353,000 98,045
Metals & Minerals -- 0.0%
Companhia Vale Rio Doce, Class B....................................... 2,000 0
------------
261,290
------------
GERMANY -- 0.2%
Retail -- 0.2%
Hornbach Holding AG.................................................... 1,400 118,801
------------
TOTAL PREFERRED STOCK (cost $369,881).................................. 467,806
------------
<CAPTION>
PRINCIPAL
BONDS & NOTES -- 23.1% AMOUNT
----------------------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE & MILITARY TECHNOLOGY -- 0.9%
K&F Industries, Inc. 10.38% 2004....................................... $ 25,000 26,500
Moog, Inc. 10.00% 2006................................................. 50,000 52,000
Northrop Grumman Corp. 9.38% 2024...................................... 200,000 219,494
Rohr, Inc. 11.63% 2003................................................. 125,000 139,375
Standard Pacific Corp. New 8.50% 2007.................................. 70,000 70,000
------------
507,369
------------
CABLE -- 0.3%
Cablevision Systems Corp. 9.25% 2005................................... 100,000 103,000
Tele-Communications, Inc. 9.25% 2023................................... 100,000 104,238
------------
207,238
------------
CHEMICALS -- 0.2%
Pioneer Americas Acquisition Corp. 9.25% 2007*......................... 55,000 54,244
Sterling Chemicals, Inc. 11.75% 2006................................... 25,000 27,000
Texas Petrochemicals Corp. 11.13% 2006................................. 35,000 37,800
------------
119,044
------------
COMMUNICATIONS & MEDIA -- 0.5%
Chancellor Radio Broadcasting Co. 9.25% 2007*.......................... 55,000 15,375
Muzak L.P. 10.00% 2003................................................. 100,000 104,875
Young Broadcasting, Inc. 9.00% 2006.................................... 50,000 49,500
Young Broadcasting, Inc. 11.75% 2004................................... 100,000 110,500
------------
280,250
------------
CONSUMER DISCRETIONARY -- 0.8%
Collins & Aikman Corp. 11.50% 2006..................................... 100,000 112,500
Hayes Wheels International, Inc. 11.00% 2006........................... 25,000 27,500
Key Plastics, Inc. 10.25% 2007*........................................ 100,000 105,000
Kinder Care Learning Centers, Inc. 9.50% 2009.......................... 35,000 34,037
Lear Corp. 9.50% 2006.................................................. 150,000 159,750
------------
438,787
------------
</TABLE>
---------------------
47
<PAGE> 48
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (continued) AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER STAPLES -- 0.2%
Sweetheart Cup, Inc. 10.50% 2003....................................... $ 100,000 $ 101,500
------------
ENERGY -- 1.1%
Mesa Operating Co. 10.63% 2006......................................... 25,000 28,375
Phillips Petroleum Co. 9.18% 2021...................................... 250,000 270,510
Plains Resources, Inc. 10.25% 2006..................................... 45,000 47,700
Pride Petroleum Services, Inc. 9.38% 2007.............................. 30,000 31,350
Santa Fe Energy Resources 11.00% 2004.................................. 150,000 163,500
Transportadora De Gas 10.25% 2001...................................... 100,000 108,875
------------
650,310
------------
FINANCE -- 0.5%
Dime Bancorp 10.50% 2005............................................... 100,000 108,500
First Nationwide Parent Holdings 12.50% 2003........................... 100,000 111,500
Navistar Financial Corp. 9.00% 2002*................................... 85,000 87,444
------------
307,444
------------
HEALTHCARE -- 0.1%
Leiner Health Products Group 9.63% 2007*............................... 10,000 10,125
Owens & Minor, Inc. 10.88% 2006........................................ 60,000 66,900
------------
77,025
------------
INDUSTRIAL & COMMERCIAL -- 0.7%
Cabot Safety Acquisition Corp. 12.50% 2005............................. 100,000 110,000
Exide Corp. 10.75% 2002................................................ 100,000 105,000
Graphic Controls Corp. 12.00% 2005(1).................................. 50,000 55,250
International Wire Group, Inc. 11.75% 2005*............................ 90,000 97,650
Mettler Toledo Holdings, Inc. 9.75% 2006............................... 15,000 15,750
Roller Bearing Co. America, Inc. 9.63% 2007*........................... 50,000 50,625
------------
434,275
------------
INFORMATION & ENTERTAINMENT -- 0.5%
Big Flower Press Holdings 10.75% 2003.................................. 75,000 80,438
EchoStar DBS Corp. 12.50% 2002*........................................ 45,000 44,550
MCI Communications Corp. 7.13% 2000.................................... 90,000 91,368
Rifkin Acquisitions Partners L.P. 11.13% 2006.......................... 50,000 52,750
------------
269,106
------------
MATERIALS -- 1.5%
A.K. Steel Corp. 9.13% 2006............................................ 155,000 158,100
A.K. Steel Corp. 10.75% 2004........................................... 100,000 107,500
Acindar Industria Argentina de Acero SA 11.25% 2004.................... 55,000 58,094
Armco, Inc. 9.38% 2000................................................. 275,000 276,375
CSN Iron SA 9.13% 2007*................................................ 100,000 97,250
Owens Illinois, Inc. 8.10% 2007........................................ 40,000 40,791
Weirton Steel Corp. 11.38% 2004........................................ 100,000 107,000
------------
845,110
------------
NON-U.S. GOVERNMENT OBLIGATIONS -- 0.5%
British Columbia Province Canada 6.50% 2026............................ 150,000 136,009
Republic of Argentina 8.38% 2003....................................... 150,000 151,875
------------
287,884
------------
PAPER PRODUCTS -- 1.1%
Container Corp. of America 10.75% 2002................................. 225,000 243,000
Rexene Corp. 11.75% 2004............................................... 25,000 28,781
S.D. Warren Co. 12.00% 2004............................................ 100,000 111,000
Silgan Holdings Corp. 9.00% 2009*...................................... 250,000 252,500
------------
635,281
------------
</TABLE>
- ---------------------
48
<PAGE> 49
<TABLE>
<CAPTION>
PRINCIPAL
BONDS & NOTES (continued) AMOUNT VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
RETAIL -- 0.1%
Guitar Center Management Co., Inc. 11.00% 2006*........................ $ 33,000 $ 36,135
------------
U.S. GOVERNMENT & AGENCIES -- 13.7%
Government National Mortgage Association 6.00% 2009.................... 166,462 161,988
Government National Mortgage Association 6.50% 2008-2009............... 1,188,134 1,174,946
Government National Mortgage Association 7.50% 2022-2024............... 635,060 639,553
Government National Mortgage Association 8.50% 2024.................... 330,874 344,731
United States Treasury Bonds 5.88% 2004@............................... 250,000 242,227
United States Treasury Bonds 6.25% 2023@............................... 200,000 185,156
United States Treasury Bonds 9.25% 2016................................ 150,000 187,664
United States Treasury Notes 5.63% 2000................................ 250,000 244,883
United States Treasury Notes 6.25% 2003@............................... 750,000 744,143
United States Treasury Notes 6.50% 2006................................ 500,000 497,890
United States Treasury Notes 7.25% 2004................................ 100,000 104,250
United States Treasury Notes 7.50% 2001@............................... 750,000 781,522
United States Treasury Notes 7.75% 1999................................ 500,000 517,420
United States Treasury Notes 7.88% 1999-2004@.......................... 1,250,000 1,328,010
United States Treasury Notes 8.50% 2000................................ 750,000 791,017
------------
7,945,400
------------
UTILITIES -- 0.4%
El Paso Electric Co. 8.90% 2006........................................ 215,000 228,788
------------
TOTAL BONDS & NOTES (cost $12,699,640)................................. 13,370,946
------------
<CAPTION>
RIGHTS -- 0.0%+
----------------------------------------------------------------------------------------------------
<S> <C> <C>
THAILAND -- 0.0%
Land & House PCL alien shares zero coupon 6/27/97 (Real Estate)
(cost $0).......................................................... 3,000 5,096
------------
<CAPTION>
FOREIGN SECURITIES -- 32.5% SHARES
----------------------------------------------------------------------------------------------------
<S> <C> <C>
ARGENTINA -- 0.2%
Banco de Galicia y Buenos Aires SA de CV (Finance)..................... 10,300 68,506
Banco de Galicia y Buenos Aires SA de CV, Class B ADR (Finance)........ 1,500 39,562
------------
108,068
------------
AUSTRALIA -- 1.5%
Amcor Ltd. (Materials)................................................. 17,446 116,026
Boral Ltd. (Materials)................................................. 42,152 132,841
Broken Hill Proprietary Co., Ltd. (Materials).......................... 17,687 260,428
Crown Ltd. (Information & Entertainment)............................... 39,158 63,035
Goodman Fielder Wattie Ltd. (Consumer Staples)......................... 91,072 134,214
Pioneer International Ltd. (Materials)+................................ 40,000 154,778
------------
861,322
------------
AUSTRIA -- 0.2%
OMV AG (Energy)........................................................ 870 111,443
------------
BELGIUM -- 0.2%
Credit Dexia/Communal Holding (Finance)+*.............................. 1,072 115,155
------------
</TABLE>
---------------------
49
<PAGE> 50
<TABLE>
<CAPTION>
FOREIGN SECURITIES (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
BRAZIL -- 0.4%
Aracruz Celulose ADR (Materials)....................................... 2,500 $ 50,938
Centrais Eletricas Brasileiras SA-ELECTROBRAS ADR (Utilities)+......... 2,750 76,889
Telecomunicacoes Brasileras SA (Utilities)............................. 920,000 124,769
------------
252,596
------------
CANADA -- 0.8%
Alcan Aluminum Ltd. (Materials)........................................ 2,000 68,649
Canadian Imperial Bank Toronto (Finance)............................... 3,100 78,120
Canadian Pacific Ltd. (Industrial & Commercial)+....................... 9,000 256,128
CanWest Global Communications (Information Technology)................. 4,159 61,600
------------
464,497
------------
CHILE -- 0.3%
Embotelladora Andina SA, Class A (Consumer Staples).................... 1,500 32,156
Embotelladora Andina SA, Class B (Consumer Staples).................... 3,000 64,313
Enersis SA ADR (Utilities)............................................. 2,900 103,131
------------
199,600
------------
DENMARK -- 0.8%
Tele Danmark A/S, Class B ADR (Utilities).............................. 4,800 125,400
Unidanmark A/S (Finance)............................................... 5,450 306,157
------------
431,557
------------
FINLAND -- 0.8%
Kesko (Consumer Discretionary)......................................... 8,700 122,640
Metsa Serla Oy, Class B (Materials).................................... 15,500 126,263
Nokia Corp., Class A ADR (Information Technology)...................... 1,782 131,400
Rauma Oy (Industrial & Commercial)..................................... 4,000 91,666
------------
471,969
------------
FRANCE -- 3.0%
Assurance General de France (Finance)+*................................ 6,700 214,110
Banque Nationale de Paris (Finance).................................... 5,500 226,675
Compagnie de St. Gobain (Materials).................................... 781 113,893
Credit Commerce France (Finance)....................................... 2,580 109,316
Elf Aquitaine SA (Energy).............................................. 1,200 129,460
Havas SA (Information & Entertainment)................................. 2,226 160,415
Peugeot SA (Consumer Discretionary).................................... 1,200 115,984
Remy Cointreau SA (Consumer Staples)................................... 3,000 72,030
Rhone-Poulenc SA (Healthcare).......................................... 5,424 221,512
Societe Generale (Finance)............................................. 1,766 197,134
Total SA, Series B (Energy)............................................ 1,852 187,195
------------
1,747,724
------------
GERMANY -- 1.4%
Bayer AG (Healthcare).................................................. 3,900 149,864
Degussa AG (Materials)................................................. 1,500 79,382
Karstadt AG (Consumer Discretionary)................................... 520 185,150
Lufthansa AG (Information & Entertainment)............................. 6,600 126,581
Mannesmann AG (Industrial & Commercial)................................ 262 116,721
Metallgesellschaft (Industrial & Commercial)+.......................... 8,050 167,545
------------
825,243
------------
</TABLE>
- ---------------------
50
<PAGE> 51
<TABLE>
<CAPTION>
FOREIGN SECURITIES (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
HONG KONG -- 1.4%
Hutchison Whampoa Ltd. (Industrial & Commercial)....................... 21,000 $ 181,612
Hysan Development Co., Ltd. (Real Estate).............................. 25,000 73,735
Peak International Ltd. (Information Technology)+...................... 16,600 199,200
Sun Hung Kai Properties Ltd. (Real Estate)............................. 9,900 119,161
Swire Pacific Ltd., Class A (Real Estate).............................. 19,000 171,059
Tingyi Holding Co. (Consumer Staples).................................. 200,000 49,824
------------
794,591
------------
INDIA -- 0.1%
Ranbaxy Laboratories Ltd. (Healthcare)................................. 1,300 30,550
State Bank India GDR (Finance)*........................................ 1,700 45,050
------------
75,600
------------
INDONESIA -- 0.5%
PT Kalbe Farma alien shares (Healthcare)............................... 73,000 97,553
PT Indonesian Satellite Corp. ADR (Utilities)+*........................ 3,000 89,813
PT Jaya Real Property (Real Estate).................................... 78,000 105,037
------------
292,403
------------
IRELAND -- 0.5%
Allied Irish Banks PLC (Finance)....................................... 4,610 35,161
Bank of Ireland (Finance).............................................. 900 10,015
Jefferson Smurfit Group (Materials)+................................... 77,000 221,835
------------
267,011
------------
ITALY -- 1.2%
Arnaldo Mondadori Edit (Information & Entertainment)................... 12,900 74,535
Fiat SpA (Consumer Discretionary)...................................... 67,000 241,261
First British Columbia San Paolo (Finance)............................. 4,700 34,264
Instituto Bancario San Polotorono (Finance)*........................... 16,200 118,099
STET (Utilities)....................................................... 38,500 224,263
------------
692,422
------------
JAPAN -- 7.6%
Aisin Seiki Co., Ltd. (Consumer Discretionary)......................... 14,000 213,750
Asahi Organic Chemical Co., Ltd. (Industrial & Commercial)............. 8,000 41,389
Dai Nippon Printing Co., Ltd. (Information & Entertainment)............ 4,000 90,386
Daibiru Corp. (Real Estate)............................................ 2,000 24,079
Eisai Co., Ltd. (Healthcare)........................................... 8,990 170,201
Exedy Corp. (Consumer Discretionary)................................... 5,000 63,689
Fuji Machine Manufacturing Co. (Industrial & Commercial)............... 5,000 181,033
Fukuda Denshi (Healthcare)............................................. 3,000 61,508
Hitachi Ltd. (Information Technology)+................................. 9,000 100,506
JGC Corp. (Industrial & Commercial).................................... 14,000 96,493
Kyudenko Corp. (Industrial & Commercial)............................... 5,000 42,139
Mabuchi Motor Co., Ltd. (Industrial & Commercial)...................... 4,000 232,071
Maruichi Steel Tube (Energy)........................................... 7,000 116,036
Matsumotokiyoshi (Consumer Discretionary).............................. 3,000 127,203
Matsushita Electric Industrial Co., Ltd. (Information Technology)+..... 11,000 221,689
Mazda Motor Corp. (Consumer Discretionary)............................. 37,000 129,122
Meiwa Estate Co. (Real Estate)+........................................ 1,000 21,811
Mitsubishi Heavy Industries Ltd. (Industrial & Commercial)............. 20,000 153,376
Murata Manufacturing Co., Ltd. (Information Technology)................ 2,000 79,567
Namco (Information & Entertainment).................................... 6,000 231,373
NGK Spark Plug Co., Ltd. (Industrial & Commercial)..................... 18,000 196,301
Nikko Securities Co., Ltd. (Finance)................................... 19,000 116,864
Nippon Express Co., Ltd. (Industrial & Commercial)..................... 14,000 111,761
Nippon Television Network (Information & Entertainment)................ 500 200,663
Okumura Corp. (Consumer Discretionary)................................. 10,000 52,958
Royal Ltd. (Consumer Discretionary).................................... 300 6,308
Sakura Bank Ltd. (Finance)............................................. 27,000 206,822
</TABLE>
---------------------
51
<PAGE> 52
<TABLE>
<CAPTION>
FOREIGN SECURITIES (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
JAPAN (continued)
Sanwa Bank Ltd. (Finance).............................................. 5,000 $ 74,158
Sawako Corp. (Consumer Discretionary).................................. 2,000 36,294
Shimachu Co. (Consumer Discretionary).................................. 5,000 150,061
Sony Music Entertainment, Inc. (Information & Entertainment)........... 5,000 234,252
Square Co., Ltd. (Information Technology).............................. 2,000 98,587
Sumitomo Rubber Industries Ltd. (Consumer Discretionary)............... 24,000 161,438
Tokyo Steel Manufacturing Co. (Materials).............................. 4,500 50,253
Toyo Ink Manufacturing Co. (Materials)................................. 30,000 119,874
Yamato Kogyo Co. (Materials)........................................... 19,000 187,315
------------
4,401,330
------------
LUXEMBOURG -- 0.2%
Quilmes Industrial SA (Consumer Staples)............................... 7,300 84,862
------------
MALAYSIA -- 0.5%
Bumi Armada Bhd (Industrial & Commercial).............................. 440 1,081
Land & General Bhd (Finance)+.......................................... 40,000 45,959
Renong Bhd (Industrial & Commercial)+.................................. 20,000 26,149
Resorts World Bhd (Information & Entertainment)........................ 34,000 102,377
Sime Darby Bhd (Industrial & Commercial)............................... 31,000 103,170
Sungei Way Holdings (Materials)........................................ 17,000 32,060
------------
310,796
------------
MEXICO -- 0.9%
Cemex SA de CV (Materials)............................................. 20,000 86,820
Corporacion GEO SA de CV, Class B (Consumer Discretionary)+............ 15,700 90,476
Fomento Economico Mexicano SA de CV (Consumer Staples)................. 14,000 83,322
Grupo Financiero Bancomer SA de CV, Series B (Finance)................. 140,000 67,292
Grupo Televisa SA de CV (Information & Entertainment).................. 3,200 48,720
Kimberly-Clark de Mexico SA de CV, Class A (Materials)................. 20,000 80,528
Panamerican Beverages, Inc., Class A ADR (Consumer Staples)............ 1,500 49,312
------------
506,470
------------
NETHERLANDS -- 1.1%
Akzo Nobel NV (Materials).............................................. 1,110 152,117
Internationale Nederlanden Groep NV (Finance).......................... 5,632 259,665
PolyGram NV (Information & Entertainment).............................. 4,000 209,893
------------
621,675
------------
NEW ZEALAND -- 0.5%
Air New Zealand Ltd., Class B (Information & Entertainment)+........... 13,366 40,855
Brierley Investments Ltd. (Finance)+................................... 51,000 49,884
Carter Holt Harvey Ltd. (Materials).................................... 65,000 168,216
------------
258,955
------------
NORWAY -- 0.5%
Nycomed ASA, Series A (Healthcare)+.................................... 11,615 171,154
Saga Petroleum ASA, Series A (Energy).................................. 5,400 102,412
------------
273,566
------------
PERU -- 0.1%
Compania De Minas Buenaventura SA, Series B ADR (Materials)............ 2,800 55,125
------------
PHILIPPINES -- 0.2%
Philipino Telephone (Utilities)........................................ 40,000 20,094
Philippine Long Distance Telephone Co. ADR (Utilities)................. 1,000 64,250
------------
84,344
------------
</TABLE>
- ---------------------
52
<PAGE> 53
<TABLE>
<CAPTION>
FOREIGN SECURITIES (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
SINGAPORE -- 0.8%
Development Bank of Singapore Ltd. alien shares (Finance).............. 9,500 $ 119,605
Keppel Corp., Ltd. (Industrial & Commercial)........................... 28,000 124,362
Keppel Corp., Ltd., Class A (Industrial & Commercial).................. 7,000 30,356
Keppel Fels Ltd. (Energy).............................................. 20,000 67,707
Keppel Land Ltd. (Real Estate)......................................... 20,000 53,158
United Overseas Bank Ltd. alien shares (Finance)....................... 9,000 92,537
------------
487,725
------------
SOUTH KOREA -- 0.2%
Chosun Brewery Co., Ltd. (Consumer Staples)............................ 3,020 78,901
Hanwha Chemical (Materials)............................................ 2,101 16,562
Shinsegae Department Street (Consumer Discretionary)................... 600 23,648
------------
119,111
------------
SPAIN -- 0.2%
Empresa Nacional de Electricidad SA (Utilities)........................ 750 62,962
Telefonica de Espana SA (Utilities).................................... 2,100 60,713
------------
123,675
------------
SWEDEN -- 0.7%
Nordbanken AB (Finance)................................................ 4,040 136,312
Pharmacia & Upjohn, Inc. (Healthcare).................................. 6,700 226,062
Sparbanken Sverige AB (Finance)........................................ 2,400 53,364
------------
415,738
------------
SWITZERLAND -- 0.2%
Ciba Specialty Chemicals AG (Healthcare)+.............................. 30 2,774
Nestle SA (Consumer Staples)........................................... 95 125,322
------------
128,096
------------
THAILAND -- 0.1%
Land & House PCL alien shares (Real Estate)+........................... 3,000 6,254
Siam City Cement PCL alien shares (Materials).......................... 2,000 8,106
Siam Commercial Bank PCL alien shares (Finance)........................ 10,000 40,919
------------
55,279
------------
UNITED KINGDOM -- 5.4%
Amersham International PLC (Healthcare)................................ 1,600 42,632
Associated British Foods PLC (Consumer Staples)........................ 27,200 234,181
Bank of Scotland (Finance)............................................. 20,000 128,561
Bass PLC (Consumer Staples)............................................ 7,000 85,447
BOC Group PLC (Materials).............................................. 9,500 165,085
Boots Co. PLC (Consumer Discretionary)................................. 16,900 198,272
British Petroleum Co. PLC (Energy)..................................... 2,200 27,368
British Telecommunications PLC (Utilities)............................. 21,000 155,972
BTR PLC (Industrial & Commercial)...................................... 43,000 147,154
Burmah Castrol PLC (Energy)............................................ 9,600 162,427
Carlton Communications PLC (Information & Entertainment)............... 20,500 173,595
Centrica PLC (Utilities)+.............................................. 143,900 174,935
Cookson Group PLC (Information Technology)............................. 50,961 178,217
</TABLE>
---------------------
53
<PAGE> 54
<TABLE>
<CAPTION>
FOREIGN SECURITIES (continued) SHARES VALUE
----------------------------------------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM (continued)
De La Rue PLC (Materials).............................................. 20,258 $ 125,834
Guinness PLC (Consumer Staples)........................................ 24,000 235,007
National Grid Group PLC (Utilities).................................... 20,100 72,635
PowerGen PLC (Utilities)............................................... 14,665 174,371
Rank Group PLC (Information & Entertainment)........................... 26,000 164,748
Reckitt & Colman PLC (Consumer Staples)................................ 13,457 201,017
Royal & Sun Alliance Insurance Group PLC (Finance)..................... 16,254 120,181
Sainsbury (J.) PLC (Consumer Discretionary)............................ 30,043 182,112
------------
3,149,751
------------
TOTAL FOREIGN SECURITIES (cost $16,534,939)............................ 18,787,699
------------
TOTAL INVESTMENT SECURITIES (cost $45,983,208)......................... 55,245,169
------------
PRINCIPAL
SHORT-TERM SECURITIES -- 0.3% AMOUNT
----------------------------------------------------------------------------------------------------
United States Treasury Bills 5.26% due 12/4/97 @
(cost $171,163)...................................................... $ 175,000 171,163
------------
REPURCHASE AGREEMENT -- 3.7%
----------------------------------------------------------------------------------------------------
Joint Repurchase Agreement Account @ (Note 3)
(cost $2,160,000).................................................... 2,160,000 2,160,000
------------
TOTAL INVESTMENTS --
(cost $48,314,371) 99.5% 57,576,332
Other assets less liabilities -- 0.5 267,630
------ -----------
NET ASSETS -- 100.0% $57,843,962
====== ===========
</TABLE>
-----------------------------
+ Non-income producing securities
* Resale restricted to qualified institutional buyers
ADR -- American Depository Receipts
(1) Fair valued security; see Note 2
@ The security or a portion thereof represents collateral for the
following open futures contracts:
<TABLE>
<CAPTION>
OPEN FUTURES CONTRACTS
-------------------------------------------------------------------------------------------------------------
VALUE AS
OF
NUMBER OF EXPIRATION VALUE AT JUNE 30, UNREALIZED
CONTRACTS DESCRIPTION DATE TRADE DATE 1997 DEPRECIATION
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5 Short Russell 2000 Index................. September 1997 $2,984,887 $2,991,750 $ (6,863)
27 Long U.S. 10 Year Note.................. September 1997 2,892,108 2,912,625 (20,517)
--------
Net Unrealized Depreciation................................................................ $(27,380)
========
</TABLE>
See Notes to Financial Statements
- ---------------------
54
<PAGE> 55
[THIS PAGE INTENTIONALLY LEFT BLANK]
---------------------
55
<PAGE> 56
- ---------------------
ANCHOR SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MONEY FIXED GOVERNMENT &
MARKET INCOME QUALITY BOND HIGH YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities, at value*.............................. $ -- $19,242,922 $206,237,393 $39,590,280
Short-term securities*........................................ 73,967,463 -- -- --
Repurchase agreements (cost equals market).................... 805,000 75,000 5,190,000 1,390,000
Cash.......................................................... 4,242 202 2,779 --
Foreign currency.............................................. -- -- -- --
Receivables for --
Fund shares sold............................................ 749,423 795 628,274 2,180
Dividends and accrued interest.............................. 117,106 347,720 2,459,125 948,404
Sales of investments........................................ -- 36,927 2,690,529 791,847
Variation margin on futures contracts....................... -- -- -- --
Foreign currency contracts.................................. -- -- -- --
Prepaid expenses.............................................. 19,126 8,518 43,446 9,249
----------------------------------------------------------
75,662,360 19,712,084 217,251,546 42,731,960
----------------------------------------------------------
LIABILITIES:
Payables for --
Fund shares redeemed........................................ 536,262 1,976 443,491 218,620
Management fees............................................. 31,381 10,153 110,804 23,797
Purchases of investments.................................... -- 42,945 -- 458,778
Foreign currency contracts.................................. -- -- -- --
Variation margin on futures contracts....................... -- -- -- --
Other accrued expenses........................................ 36,559 19,456 69,098 28,347
Due to custodian bank......................................... -- -- -- 20,856
----------------------------------------------------------
604,202 74,530 623,393 750,398
----------------------------------------------------------
NET ASSETS:................................................... $75,058,158 $19,637,554 $216,628,153 $41,981,562
==========================================================
Shares of beneficial interest outstanding (unlimited shares
authorized)................................................. 75,058,158 1,430,752 15,411,622 4,741,443
Net asset value per share..................................... $ 1.00 $ 13.73 $ 14.06 $ 8.85
==========================================================
COMPOSITION OF NET ASSETS:
Capital paid in............................................... $75,058,158 19,446,772 197,031,123 48,318,628
Accumulated undistributed net investment income............... 2,155 2,372,728 20,755,722 5,850,173
Accumulated undistributed net realized gain (loss) on
investments, futures contracts and foreign currency......... (2,155) (2,205,713) 634,507 (13,141,234)
Unrealized appreciation (depreciation) of investments......... -- 23,767 (1,793,199) 953,995
Unrealized foreign exchange loss on other assets and
liabilities................................................. -- -- -- --
Unrealized depreciation on futures contracts.................. -- -- -- --
----------------------------------------------------------
$75,058,158 $19,637,554 $216,628,153 $41,981,562
==========================================================
---------------
*Cost
Investment securities........................................ $ -- $19,219,155 $208,030,592 $38,636,285
==========================================================
Short-term securities........................................ $73,967,463 $ -- $ -- $ --
==========================================================
</TABLE>
See Notes to Financial Statements
- ---------------------
56
<PAGE> 57
- ---------------------
<TABLE>
<CAPTION>
GROWTH AND FOREIGN CAPITAL NATURAL STRATEGIC
TARGET '98 INCOME SECURITIES GROWTH APPRECIATION RESOURCES MULTI-ASSET MULTI-ASSET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$8,571,171 $41,047,596 $46,677,076 $415,846,048 $605,868,011 $46,402,550 $147,037,519 $55,245,169
-- -- -- -- -- -- 268,887 171,163
335,000 1,145,000 2,160,000 8,260,000 43,745,000 5,175,000 5,110,000 2,160,000
2,672 1,217 -- 4,956 4,556 1,770 2,476 4,704
-- -- 63,924 -- -- -- -- 21,224
380 41,909 7,990 511,621 1,374,885 470,520 31,247 24,040
9,587 54,889 317,090 329,834 204,085 87,297 829,077 367,099
-- 212,473 422,489 839,694 6,484,696 -- 1,672,451 562,783
-- -- -- -- -- -- 22,481 --
-- -- 989,811 -- -- -- -- 374,323
805 3,360 4,150 42,171 17,784 2,413 29,281 13,948
--------------------------------------------------------------------------------------------------------------------------
8,919,615 42,506,444 50,642,530 425,834,324 657,699,017 52,139,550 155,003,419 58,944,453
--------------------------------------------------------------------------------------------------------------------------
390 170,326 5,594 741,426 843,947 8,130 58,050 80,310
4,639 23,530 35,663 246,445 337,886 31,393 126,581 47,340
-- 273,556 963,241 152,310 3,443,482 1,109,650 -- 494,144
-- -- 987,856 -- -- -- -- 373,713
-- -- 140 -- -- -- 34,776
15,440 28,194 112,708 75,868 104,564 38,925 64,065 70,208
-- -- 2,291 -- -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
20,469 495,606 2,107,493 1,216,049 4,729,879 1,188,098 248,696 1,100,491
--------------------------------------------------------------------------------------------------------------------------
$8,899,146 $42,010,838 $48,535,037 $424,618,275 $652,969,138 $50,951,452 $154,754,723 $57,843,962
==========================================================================================================================
744,151 2,593,252 3,438,306 15,470,413 21,136,866 2,972,378 10,181,685 4,264,471
$ 11.96 $ 16.20 $ 14.12 $ 27.45 $ 30.89 $ 17.14 $ 15.20 $ 13.56
==========================================================================================================================
7,840,772 30,734,886 37,105,244 231,598,875 431,488,601 41,878,278 83,451,927 32,398,167
1,138,878 1,065,716 1,327,779 4,269,791 1,574,881 832,740 5,918,916 1,826,018
(256,794) 362,561 5,679,062 59,560,818 86,696,477 3,730,042 37,782,326 14,386,133
176,290 9,847,675 4,426,163 129,188,791 133,213,556 4,512,764 27,711,752 9,261,961
-- -- (3,211) -- (4,377) (2,372) -- (937)
-- -- -- -- -- -- (110,198) (27,380)
--------------------------------------------------------------------------------------------------------------------------
$8,899,146 $42,010,838 $48,535,037 $424,618,275 $652,969,138 $50,951,452 $154,754,723 $57,843,962
==========================================================================================================================
$8,394,881 $31,199,921 $42,250,913 $286,657,257 $472,654,455 $41,889,786 $119,326,651 $45,983,208
==========================================================================================================================
$ -- $ -- $ -- $ -- $ -- $ -- $ 268,003 $ 171,163
==========================================================================================================================
</TABLE>
---------------------
57
<PAGE> 58
- ---------------------
ANCHOR SERIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GOVERNMENT &
MONEY MARKET FIXED INCOME QUALITY BOND HIGH YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest........................................................ $2,196,735 $ 801,861 $7,563,985 $ 1,973,416
Dividends....................................................... -- -- -- 50,137
---------------------------------------------------------
Total income*............................................ 2,196,735 801,861 7,563,985 2,023,553
---------------------------------------------------------
Expenses:
Investment management fees...................................... 197,784 63,976 670,674 145,547
Custodian fees.................................................. 14,955 19,565 57,790 25,275
Audit and tax consulting fees................................... 8,490 4,805 16,270 5,990
Trustees' fees.................................................. 2,761 885 7,298 1,418
Legal fees...................................................... 1,185 280 2,370 --
Reports to investors............................................ 1,120 280 6,205 560
Insurance expense............................................... 610 148 1,430 299
Other expenses.................................................. 1,441 298 3,164 1,109
---------------------------------------------------------
Total expenses........................................... 228,346 90,237 765,201 180,198
---------------------------------------------------------
Net investment income............................................. 1,968,389 711,624 6,798,784 1,843,355
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCIES:
Net realized gain (loss) on investments........................... -- (155,547) (7,580) 956,670
Net realized foreign exchange gain (loss) on other assets and
liabilities..................................................... -- -- -- --
Net realized gain on futures contracts............................ -- -- -- --
Change in unrealized appreciation/depreciation of investments..... -- 66,703 (748,619) (483,282)
Change in unrealized foreign exchange gain/loss on other assets
and liabilities................................................. -- -- -- --
Change in unrealized appreciation/depreciation on futures
contracts....................................................... -- -- -- --
---------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign
currencies...................................................... -- (88,844) (756,199) 473,388
---------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $1,968,389 $ 622,780 $6,042,585 $ 2,316,743
=========================================================
---------------
* Net of foreign withholding taxes on interest and dividends
of:............................................................. $ -- $ -- $ -- $ --
=========================================================
</TABLE>
See Notes to Financial Statements
- ---------------------
58
<PAGE> 59
<TABLE>
<CAPTION>
TARGET GROWTH AND FOREIGN CAPITAL NATURAL STRATEGIC
'98 INCOME SECURITIES GROWTH APPRECIATION RESOURCES MULTI-ASSET MULTI-ASSET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$367,484 $ 59,949 $ 83,287 $ 148,634 $ 1,608,182 $ 136,504 $ 1,969,465 $ 589,258
-- 300,105 602,428 2,550,890 1,011,984 385,852 637,093 375,916
------------------------------------------------------------------------------------------------------------
367,484 360,054 685,715 2,699,524 2,620,166 522,356 2,606,558 965,174
------------------------------------------------------------------------------------------------------------
29,505 126,923 207,029 1,376,759 1,895,041 179,172 742,794 280,578
10,580 16,700 108,260 58,155 94,395 24,285 39,670 98,795
3,835 5,365 6,400 24,070 37,495 6,615 11,960 6,615
228 1,117 2,070 11,961 17,387 1,410 5,058 1,838
280 625 625 3,555 5,925 905 1,810 905
-- -- 840 9,975 20,535 2,500 2,520 1,120
72 194 308 2,065 2,988 266 974 371
201 1,148 1,569 2,833 5,825 457 2,595 1,654
------------------------------------------------------------------------------------------------------------
44,701 152,072 327,101 1,489,373 2,079,591 215,610 807,381 391,876
------------------------------------------------------------------------------------------------------------
322,783 207,982 358,614 1,210,151 540,575 306,746 1,799,177 573,298
------------------------------------------------------------------------------------------------------------
(4,091) 443,630 1,776,924 14,683,075 22,021,688 666,252 17,598,215 4,967,200
-- -- (192,469) -- (2,512) (186) 58 937
-- -- 324,458 -- 1,527,540 -- -- --
(89,723) 5,835,125 1,853,173 49,371,888 35,104,058 (223,058) 101,309 475,296
-- -- (15,745) -- (4,149) (2,129) 14 (1,360)
-- -- (28,021) -- (393,750) -- (110,198) (27,380)
------------------------------------------------------------------------------------------------------------
(93,814) 6,278,755 3,718,320 64,054,963 58,252,875 440,879 17,589,398 5,414,693
------------------------------------------------------------------------------------------------------------
$228,969 $6,486,737 $4,076,934 $65,265,114 $58,793,450 $ 747,625 $19,388,575 $5,987,991
============================================================================================================
$ -- $ 2,740 $ 94,852 $ 11,493 $ 22,560 $ 18,594 $ 917 $ 39,775
============================================================================================================
</TABLE>
---------------------
59
<PAGE> 60
- ---------------------
ANCHOR SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
GOVERNMENT &
MONEY MARKET FIXED INCOME QUALITY BOND HIGH YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income...................................... $ 1,968,389 $ 711,624 $ 6,798,784 $ 1,843,355
Net realized gain (loss) on investments.................... -- (155,547) (7,580) 956,670
Net realized foreign exchange gain (loss) on other assets
and liabilities.......................................... -- -- -- --
Net realized gain on futures contracts..................... -- -- -- --
Change in unrealized appreciation/depreciation of
investments.............................................. -- 66,703 (748,619) (483,282)
Change in unrealized foreign exchange gain/loss on other
assets and liabilities................................... -- -- -- --
Change in unrealized appreciation/depreciation on futures
contracts................................................ -- -- -- --
-------------------------------------------------------------
Net increase in net assets resulting from operations....... 1,968,389 622,780 6,042,585 2,316,743
-------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income....................... (1,968,389) -- -- --
-------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold.................................. 88,885,751 703,202 33,988,138 13,618,479
Proceeds from shares issued for reinvestment of dividends
and distributions........................................ 1,968,389 -- -- --
Cost of shares repurchased................................. (89,796,635) (4,431,430) (45,005,647) (19,640,380)
-------------------------------------------------------------
Net increase (decrease) in net assets resulting from
capital share transactions............................... 1,057,505 (3,728,228) (11,017,509) (6,021,901)
-------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS.................... 1,057,505 (3,105,448) (4,974,924) (3,705,158)
NET ASSETS:
Beginning of period........................................ 74,000,653 22,743,002 221,603,077 45,686,720
-------------------------------------------------------------
End of period.............................................. $ 75,058,158 $ 19,637,554 $216,628,153 $ 41,981,562
===========================================================
---------------
Accumulated undistributed net investment income............ $ 2,155 $ 2,372,728 $ 20,755,722 $ 5,850,173
===========================================================
Shares issued and repurchased:
Sold....................................................... 88,885,751 52,351 2,480,796 1,589,035
Issued in reinvestment of dividends and distributions...... 1,968,389 -- -- --
Repurchased................................................ (89,796,635) (331,170) (3,278,934) (2,297,731)
-------------------------------------------------------------
Net increase (decrease).................................... 1,057,505 (278,819) (798,138) (708,696)
===========================================================
</TABLE>
See Notes to Financial Statements
- ---------------------
60
<PAGE> 61
<TABLE>
<CAPTION>
GROWTH AND FOREIGN CAPITAL NATURAL
TARGET '98 INCOME SECURITIES GROWTH APPRECIATION RESOURCES MULTI-ASSET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 322,783 $ 207,982 $ 358,614 $ 1,210,151 $ 540,575 $ 306,746 $ 1,799,177
(4,091) 443,630 1,776,924 14,683,075 22,021,688 666,252 17,598,215
-- -- (192,469) -- (2,512) (186) 58
-- -- 324,458 -- 1,527,540 -- --
(89,723) 5,835,125 1,853,173 49,371,888 35,104,058 (223,058) 101,309
-- -- (15,745) -- (4,149) (2,129) 14
-- -- (28,021) -- (393,750) -- (110,198)
-----------------------------------------------------------------------------------------------------------------
228,969 6,486,737 4,076,934 65,265,114 58,793,450 747,625 19,388,575
-----------------------------------------------------------------------------------------------------------------
-- -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------
281,495 8,995,455 7,436,482 77,445,242 268,689,469 17,329,699 10,085,896
-- -- -- -- -- -- --
(1,782,859) (6,936,627) (11,014,068) (84,694,408) (242,186,086) (12,455,073) (25,338,609)
-----------------------------------------------------------------------------------------------------------------
(1,501,364) 2,058,828 (3,577,586) (7,249,166) 26,503,383 4,874,626 (15,252,713)
-----------------------------------------------------------------------------------------------------------------
(1,272,395) 8,545,565 499,348 58,015,948 85,296,833 5,622,251 4,135,862
10,171,541 33,465,273 $ 48,035,689 366,602,327 567,672,305 45,329,201 150,618,861
-----------------------------------------------------------------------------------------------------------------
$ 8,899,146 $42,010,838 $ 48,535,037 $424,618,275 $ 652,969,138 $ 50,951,452 $154,754,723
=================================================================================================================
$ 1,138,878 $ 1,065,716 $ 1,327,779 $ 4,269,791 $ 1,574,881 $ 832,740 $ 5,918,916
=================================================================================================================
23,828 610,495 573,941 3,116,537 9,502,322 1,023,303 705,648
-- -- -- -- -- -- --
(151,187) (480,054) (847,983) (3,451,559) (8,640,717) (738,463) (1,806,277)
-----------------------------------------------------------------------------------------------------------------
(127,359) 130,441 (274,042) (335,022) 861,605 284,840 (1,100,629)
=================================================================================================================
<CAPTION>
STRATEGIC
MULTI-ASSET
PORTFOLIO
-------------------------
<S> <C>
$ 573,298
4,967,200
937
--
475,296
(1,360)
(27,380)
-----------
5,987,991
-----------
--
-----------
1,940,577
--
(7,828,840)
-----------
(5,888,263)
-----------
99,728
57,744,234
$57,843,962
===========
$ 1,826,018
===========
153,092
--
(621,491)
-----------
(468,399)
===========
</TABLE>
---------------------
61
<PAGE> 62
- ---------------------
ANCHOR SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
GOVERNMENT &
MONEY MARKET FIXED INCOME QUALITY BOND HIGH YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income..................................... $ 4,225,419 $ 1,655,779 $ 14,041,082 $ 3,933,675
Net realized gain on investments.......................... -- 462,470 585,700 696,575
Net realized foreign exchange gain (loss) on other assets
and liabilities......................................... -- -- -- --
Net realized gain (loss) on futures contracts............. -- -- -- --
Change in unrealized appreciation/depreciation
on investments.......................................... -- (1,654,211) (7,904,999) 392,992
Change in unrealized foreign exchange gain/loss on other
assets and liabilities.................................. -- -- -- --
Change in unrealized appreciation/depreciation on futures
contracts............................................... -- -- -- --
--------------------------------------------------------------
Net increase in net assets resulting from operations...... 4,225,419 464,038 6,721,783 5,023,242
--------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS PAID TO SHAREHOLDERS:
Distributions from capital gains.......................... -- -- (460,000) --
Dividends from net investment income...................... (4,225,419) (1,900,000) (14,120,000) (4,670,000)
--------------------------------------------------------------
Total dividends........................................... (4,225,419) (1,900,000) (14,580,000) (4,670,000)
--------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold................................. 159,314,533 2,345,220 101,230,555 27,871,250
Proceeds from shares issued for reinvestment of dividends
and distributions....................................... 4,225,419 1,900,000 14,580,000 4,670,000
Cost of shares repurchased................................ (183,230,982) (8,041,058) (111,927,989) (34,024,510)
--------------------------------------------------------------
Net increase (decrease) in net assets resulting from
capital share transactions.............................. (19,691,030) (3,795,838) 3,882,566 (1,483,260)
--------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS................... (19,691,030) (5,231,800) (3,975,651) (1,130,018)
NET ASSETS:
Beginning of period....................................... 93,691,683 27,974,802 225,578,728 46,816,738
--------------------------------------------------------------
End of period............................................. $ 74,000,653 $ 22,743,002 $221,603,077 $ 45,686,720
============================================================
---------------
Accumulated undistributed net investment income........... $ 2,155 $ 1,661,104 $ 13,956,938 $ 4,006,818
============================================================
Shares issued and repurchased:
Sold...................................................... 159,314,533 171,519 7,327,912 3,270,396
Issued in reinvestment of dividends and distributions..... 4,225,419 149,137 1,115,532 586,683
Repurchased............................................... (183,230,982) (587,362) (8,086,708) (4,025,306)
--------------------------------------------------------------
Net increase (decrease)................................... (19,691,030) (266,706) 356,736 (168,227)
============================================================
</TABLE>
See Notes to Financial Statements
- ---------------------
62
<PAGE> 63
<TABLE>
<CAPTION>
GROWTH AND FOREIGN CAPITAL NATURAL
TARGET '98 INCOME SECURITIES GROWTH APPRECIATION RESOURCES MULTI-ASSET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 754,372 $ 797,787 $ 609,646 $ 3,079,449 $ 1,049,647 $ 539,303 $ 4,073,653
70,306 1,459,904 6,115,742 44,948,751 63,266,968 3,314,738 20,265,945
-- -- (43,558) -- 2,560 1,145 (44)
-- -- 414,564 -- (34,322) -- --
(419,896) 3,455,775 (1,580,975) 24,747,361 29,785,509 901,030 (4,163,250)
-- (19) (17,987) -- (860) (512) (6)
-- -- (16,205) -- 393,750 -- --
-------------------------------------------------------------------------------------------------------------------
404,782 5,713,447 5,481,227 72,775,561 94,463,252 4,755,704 20,176,298
-------------------------------------------------------------------------------------------------------------------
-- -- -- (13,940,000) (16,280,000) (585,000) (9,825,000)
(1,210,000) (1,745,000) (810,000) (1,545,000) (935,000) (340,000) (5,330,000)
-------------------------------------------------------------------------------------------------------------------
(1,210,000) (1,745,000) (810,000) (15,485,000) (17,215,000) (925,000) (15,155,000)
-------------------------------------------------------------------------------------------------------------------
997,281 7,391,151 22,606,509 179,335,720 517,761,626 47,430,602 11,595,717
1,210,000 1,745,000 810,000 15,485,000 17,215,000 925,000 15,155,000
(4,004,707) (11,647,598) (33,661,510) (193,366,398) (400,770,612) (35,798,476) (49,395,962)
-------------------------------------------------------------------------------------------------------------------
(1,797,426) (2,511,447) (10,245,001) 1,454,322 134,206,014 12,557,126 (22,645,245)
-------------------------------------------------------------------------------------------------------------------
(2,602,644) 1,457,000 (5,573,774) 58,744,883 211,454,266 16,387,830 (17,623,947)
12,774,185 32,008,273 53,609,463 307,857,444 356,218,039 28,941,371 168,242,808
-------------------------------------------------------------------------------------------------------------------
$10,171,541 $ 33,465,273 $ 48,035,689 $ 366,602,327 $ 567,672,305 $ 45,329,201 $150,618,861
===================================================================================================================
$ 816,095 $ 857,047 $ 969,165 $ 3,059,640 $ 1,034,306 $ 525,994 $ 4,119,739
===================================================================================================================
80,381 574,026 1,828,894 8,416,003 19,407,178 2,907,359 874,874
106,327 140,273 66,942 740,555 644,274 58,213 1,220,209
(325,577) (916,670) (2,721,124) (9,155,873) (15,116,927) (2,192,057) (3,714,000)
-------------------------------------------------------------------------------------------------------------------
(138,869) (202,371) (825,288) 685 4,934,525 773,515 (1,618,917)
===================================================================================================================
<CAPTION>
STRATEGIC
MULTI-ASSET
PORTFOLIO
--------------------------------------
<S> <C>
$ 1,208,923
9,506,288
8,710
--
(2,438,293)
(1,533)
--
------------
8,284,095
------------
(3,785,000)
(1,800,000)
------------
(5,585,000)
------------
4,456,606
5,585,000
(19,022,327)
------------
(8,980,721)
------------
(6,281,626)
64,025,860
------------
$ 57,744,234
============
$ 1,252,720
============
366,240
490,773
(1,560,019)
------------
(703,006)
============
</TABLE>
---------------------
63
<PAGE> 64
- ---------------------
ANCHOR SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE 1. ORGANIZATION: Anchor Series Trust (the "Trust") was organized as a
business trust under the laws of the Commonwealth of Massachusetts on August 26,
1983. The Trust is registered under the Investment Company Act of 1940, as
amended, as an open-end diversified management investment company. Shares of the
portfolios are issued and redeemed only in connection with investments in and
payments under variable annuity contracts and variable life insurance policies
("Variable Contracts") of Anchor National Life Insurance Company, First
SunAmerica Life Insurance Company, Phoenix Mutual Life Insurance Company and
Presidential Life Insurance Company (the "Life Companies"). Effective February
29, 1996, the Convertible Securities Portfolio changed its name to the Growth
and Income Portfolio.
The investment objectives for each portfolio are as follows:
The Money Market Portfolio seeks current income consistent with stability of
principal through investment in a diversified portfolio of money market
instruments maturing in 397 days or less.
The Fixed Income Portfolio seeks a high level of current income consistent with
preservation of capital and invests primarily in investment grade, fixed income
securities.
The Government & Quality Bond Portfolio seeks relatively high current income,
liquidity and security of principal.
The High Yield Portfolio seeks to produce high current income and secondarily
seeks capital appreciation by investing in high-yielding, high-risk, income
producing corporate bonds.
The Target '98 Portfolio seeks a predictable compounded investment return for
the specified time period, consistent with preservation of capital, by investing
primarily in zero coupon securities and current interest-bearing, investment
grade debt obligations which are issued by the U.S. Government, its agencies and
instrumentalities, and both domestic and foreign companies. The portfolios are
scheduled to terminate operations in 1998.
The Growth and Income Portfolio seeks to provide high current income and
long-term capital appreciation by investing primarily in securities that provide
the potential for growth and offer income, such as dividend-paying stocks and
securities convertible into common stock.
The Foreign Securities Portfolio seeks long-term capital appreciation through
investment primarily in equity securities issued by foreign companies.
The Growth Portfolio seeks capital appreciation primarily through investments in
growth equity securities.
The Capital Appreciation Portfolio seeks long-term capital appreciation by
investing in growth equity securities which are widely diversified by industry
and company.
The Natural Resources Portfolio seeks a total return through investment
primarily in equity securities of U.S. or foreign companies which are expected
to provide favorable returns in periods of rising inflation.
The Multi-Asset Portfolio seeks long-term total investment return consistent
with moderate investment risk by investing in equity securities, convertible
securities, investment grade fixed income securities and money market
securities.
The Strategic Multi-Asset Portfolio seeks high long-term total investment return
by investing in equity securities, aggressive growth equity securities,
international equity securities, investment grade bonds, high-yield, high-risk
bonds and money market instruments.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES: The preparation of financial
statements in accordance with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. Following is a summary of significant accounting policies
consistently followed by the Trust in the preparation of its financial
statements.
SECURITY VALUATIONS: Stocks are stated at value based upon closing sales prices
reported on recognized securities exchanges or, for listed securities having no
sales reported and for unlisted securities, upon last-reported bid prices.
Bonds, debentures, and other long-term debt securities are valued at prices
obtained for the day of valuation from a bond pricing service of a major dealer
in bonds when such prices are available; however, in circumstances where the
investment adviser deems it appropriate to do so, an over-the-counter or
exchange quotation at the mean of representative bid or asked prices may be
used. Securities traded primarily on securities exchanges outside the United
States are valued at the last sale price on such exchanges on the day of
valuation, or if there is no sale on the day of valuation, at the last reported
bid price. If a security's price is available from more than one foreign
exchange, a portfolio uses the exchange that is the primary market for the
security. Except for the Money Market Portfolio, short-term securities with
original or remaining maturities in excess of 60 days are valued at the mean of
their quoted bid and ask prices. Discounts or premiums on short-term securities
with 60 days or less to maturity are amortized to maturity. Discounts and
premiums are determined based upon the cost of the securities to the Trust if
acquired within 60 days of maturity or, if already held by the
- ---------------------
64
<PAGE> 65
Trust on the 60th day, are amortized to maturity based on the value determined
on the 61st day. Securities for which quotations are not readily available are
valued at fair value as determined in good faith under the direction of the
Trust's Trustees.
For the Money Market Portfolio, securities are valued at amortized cost, which
approximates market value. The amortized cost method involves valuing a security
at its cost on the date of purchase and thereafter assuming a constant
amortization to maturity of any discount or premium.
REPURCHASE AGREEMENTS: The Trust's custodian takes possession of the collateral
pledged for investments in repurchase agreements. The underlying collateral is
valued daily on a mark-to-market basis to assure that the value, including
accrued interest, is at least 102% of the repurchase price. In the event of
default of the obligation to repurchase, the Trust has the right to liquidate
the collateral and apply the proceeds in satisfaction of the obligation. If the
seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Trust may be delayed or limited.
FOREIGN CURRENCY TRANSLATION: The books and records of the Trust are maintained
in U.S. dollars.
Market value of investment securities are translated into U.S. dollars at the
prevailing rate of exchange on the valuation date.
Assets and liabilities denominated in foreign currencies and commitments under
forward foreign currency contracts ("forward contracts") are translated into
U.S. dollars at the mean of the quoted bid and asked prices of such currencies
against the U.S. dollar. Purchases and sales of portfolio securities are
translated at the rate of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated at rates of exchange prevailing when
earned or incurred.
The Trust does not isolate that portion of the results of operations arising
as a result of changes in the foreign exchange rates from the changes in the
market prices of securities held at fiscal year-end. The Trust does not isolate
the effect of changes in foreign exchange rates from the changes in the market
prices of portfolio securities sold during the year.
Realized foreign exchange gain (loss) on other assets and liabilities and
change in unrealized foreign exchange gain (loss) on other assets and
liabilities include realized foreign exchange gains and losses from currency
gains or losses realized between the trade and settlement dates of securities
transactions, the difference between the amounts of interest, dividends,
discount and foreign withholding taxes recorded on the Trust's books and the
U.S. dollar equivalent amounts actually received or paid and changes in the
unrealized foreign exchange gains and losses relating to other assets and
liabilities arising as a result of changes in the exchange rate.
FORWARD FOREIGN CURRENCY CONTRACTS: Certain portfolios may enter into forward
contracts to attempt to protect securities and related receivables and payables
against changes in future foreign exchange rates. A forward contract is an
agreement between two parties to buy or sell currency at a set price on a future
date. The market value of the contract will fluctuate with changes in currency
exchange rates. The contract is marked-to-market daily using the forward rate
and the change in market value is recorded by the portfolio as unrealized gain
or loss. Upon settlement date, the portfolio records either realized gains or
losses when the contract is closed equal to the difference between the value of
the contract at the time it was opened and the value at the time it was closed.
Risks may arise upon entering into these contracts from the potential inability
of counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
Forward contracts involve elements of risk in excess of the amount reflected in
the Statement of Assets and Liabilities. A portfolio bears the risk of an
unfavorable change in the foreign exchange rate underlying the forward contract.
FUTURES CONTRACTS: A futures contract is an agreement between two parties to
buy or sell a financial instrument at a set price on a future date. Upon
entering into such a contract the Trust is required to pledge to the broker an
amount of cash or U.S. government securities equal to the minimum "initial
margin" requirements of the exchange on which the futures contract is traded.
The contract amount reflects the extent of a portfolio's exposure in these
financial instruments. A portfolio's participation in the futures markets
involves certain risks, including imperfect correlation between movements in the
price of futures contracts and movements in the price of the securities hedged
or used for cover. The Trust's activities in futures contracts are conducted
through regulated exchanges which do not result in counterparty credit risks.
Pursuant to a contract the portfolios agree to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the contract. Such
receipts or payments are known as "variation margin" and are recorded by the
portfolios as unrealized appreciation or depreciation. When a contract is
closed, the portfolios record a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at the
time it was closed.
SECURITIES TRANSACTIONS, DIVIDENDS, INVESTMENT INCOME AND EXPENSES: Securities
transactions are accounted for as of the trade date. Interest income is accrued
daily except when collection is not expected. Dividend income is recorded on the
ex-dividend date except for certain dividends from foreign securities which are
recorded as soon as the Fund is informed after the ex-dividend date. The Trust
does not amortize premiums or accrete discounts on fixed income securities,
other than short-term securities, except those original issue discounts for
which amortization is required for federal income tax purposes; gains and losses
realized upon the sale of such securities are based on their identified cost.
Portfolios which earn foreign income and capital gains may be subject to
foreign withholding taxes at various rates.
Common expenses incurred by the Trust are allocated among the portfolios based
upon relative net assets. In all other respects, expenses are charged to each
portfolio as incurred on a specific identification basis.
The Trust records dividends and distributions to its shareholders on the
ex-dividend date.
---------------------
65
<PAGE> 66
The amount of dividends and distributions from net investment income and net
realized capital gains are determined and presented in accordance with federal
income tax regulations, which may differ from generally accepted accounting
principles. These "book/tax" differences are either considered temporary or
permanent in nature. To the extent these differences are permanent in nature,
such amounts are reclassified within the capital accounts based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions which exceed net investment income and net realized
capital gains for financial reporting purposes but not for tax purposes are
reported as dividends in excess of net investment income or distributions in
excess of net realized capital gains. To the extent distributions exceed current
and accumulated earnings and profits for federal income tax purposes, they are
reported as distributions of paid-in capital. Net investment income/loss, net
realized gain/loss, and net assets are not affected.
For the year ended December 31, 1996, the reclassification arising from
book/tax differences resulted in increases (decreases) to the components of net
assets as follows:
<TABLE>
<CAPTION>
ACCUMULATED ACCUMULATED
UNDISTRIBUTED UNDISTRIBUTED PAID
NET REALIZED NET REALIZED IN
INCOME/LOSS GAIN/LOSS CAPITAL
<S> <C> <C> <C>
-------------------------------------------------
Money Market Portfolio.................................................. $ 1,434 $ (1,434) $ --
Fixed Income Portfolio.................................................. 19,301 100,286 (119,587)
Government & Quality Bond Portfolio..................................... (66,029) 66,029 --
High Yield Portfolio.................................................... 84,375 (84,375) --
Target '98 Portfolio.................................................... 68,559 (68,559) --
Growth and Income Portfolio............................................. 70,049 (70,049) --
Foreign Securities Portfolio*........................................... 430,836 (427,736) (3,100)
Growth Portfolio........................................................ -- -- --
Capital Appreciation Portfolio.......................................... 904 (904) --
Natural Resources Portfolio............................................. 1,145 (1,145) --
Multi-Asset Portfolio................................................... 60,766 (60,767) 1
Strategic Multi-Asset Portfolio......................................... 82,020 (80,453) (1,567)
</TABLE>
* Reclassification is primarily due to deferring book/tax treatments for foreign
currency transactions.
NOTE 3. JOINT REPURCHASE AGREEMENT ACCOUNT: The Trust along with other
affiliated registered investment companies, transfers uninvested cash balances
into a single joint account, the daily aggregate balance of which is invested in
one or more repurchase agreements collateralized by U.S. Treasury or federal
agency obligations. As of June 30, 1997, each participating portfolio had a
percentage of an undivided interest in the repurchase agreement in the joint
account in which it participates. The balance in the joint repo account at June
30, 1997 and the related repurchase agreement and collateral is as follows:
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT DESCRIPTION AMOUNT
---------------------------------------------------------------------------------------- ------------
<S> <C>
Lehman Brothers, Inc. Repurchase Agreement
6.00% dated 6/30/97, repurchase price $76,067,676
due 7/1/97 collateralized by $89,905,000 U.S. Treasury
Strip due 2/15/06, approximate aggregate value $79,508,012.............................. $ 76,055,000
=============
</TABLE>
<TABLE>
<CAPTION>
LEHMAN
% OF UNDIVIDED INTEREST OWNED BY EACH PORTFOLIO BROTHERS
----------------------------------------------------------------------------------------------------------------
<S> <C>
Money Market Portfolio............................................................................ 1.1%
Fixed Income Portfolio............................................................................ 0.1%
Government & Quality Bond Portfolio............................................................... 6.8%
High Yield Portfolio.............................................................................. 1.8%
Target '98 Portfolio.............................................................................. 0.4%
Growth and Income Portfolio....................................................................... 1.5%
Foreign Securities Portfolio...................................................................... 2.9%
Growth Portfolio.................................................................................. 10.9%
Capital Appreciation Portfolio.................................................................... 57.5%
Natural Resources Portfolio....................................................................... 6.8%
Multi-Asset Portfolio............................................................................. 6.7%
Strategic Multi-Asset Portfolio................................................................... 2.8%
------
99.3%
======
</TABLE>
NOTE 4. FEDERAL INCOME TAXES: It is each portfolio's policy to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable net income to shareholders.
Therefore, no federal income tax provision is required. Each portfolio is
considered a separate entity for tax purposes.
- ---------------------
66
<PAGE> 67
At June 30, 1997, the cost of investment securities, including short-term
securities and aggregate gross unrealized gain (loss) for each portfolio were as
follows:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE
GROSS GROSS UNREALIZED CAPITAL
UNREALIZED UNREALIZED GAIN (LOSS) COST OF LOSS
GAIN LOSS NET INVESTMENTS CARRYOVER EXPIRATION
<S> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------
Money Market Portfolio............ $ -- $ -- $ -- $ 74,772,463 $ -- --*
Fixed Income Portfolio............ 206,300 (182,533) 23,767 19,294,155 1,990,561 1997-2002
Government & Quality Bond
Portfolio....................... 2,035,085 (3,828,284) (1,793,199) 213,220,592 -- --*
High Yield Portfolio.............. 1,706,605 (752,610) 953,995 40,026,285 14,097,904 1997-2003
Target '98 Portfolio.............. 213,311 (37,021) 176,290 8,729,881 252,703 2002-2003
Growth and Income Portfolio....... 10,324,080 (476,405) 9,847,675 32,344,921 -- --*
Foreign Securities Portfolio...... 6,759,910 (2,333,747) 4,426,163 44,410,913 -- --
Growth Portfolio.................. 131,743,278 (2,554,487) 129,188,791 294,917,257 -- --
Capital Appreciation Portfolio.... 146,670,892 (13,457,336) 133,213,556 516,399,455 -- --**
Natural Resources Portfolio....... 6,625,280 (2,112,516) 4,512,764 47,064,786 -- --**
Multi-Asset Portfolio............. 29,142,829 (1,431,077) 27,711,752 124,704,654 -- --
Strategic Multi-Asset Portfolio... 10,448,411 (1,186,450) 9,261,961 48,314,371 -- --**
</TABLE>
The Fixed Income, High Yield, Target '98, Growth and Income and Foreign
Securities portfolios utilized capital loss carryovers of $502,774, $598,763,
$1,747, $1,470,924 and $2,275,439, respectively, to partially offset the
portfolios' net taxable gains realized and recognized in the year ended December
31, 1996. In addition $180,609 of prior year capital loss carryover for the
Fixed Income Portfolio expired as of December 31, 1996.
* Post 10/31 Capital Loss Deferrals: Money Market $2,155, Government & Quality
Bond $140,639, and Growth and Income $82,551.
** Post 10/31 Foreign Exchange Loss Deferrals: Capital Appreciation $101,
Natural Resources $754 and Strategic Multi-Asset $6,846.
NOTE 5. INVESTMENT MANAGEMENT AGREEMENTS: The Trust has entered into an
Investment Advisory and Management Agreement (the "Management Agreement") with
SunAmerica Asset Management Corp. ("SAAMCo") with respect to each portfolio.
SAAMCo serves as manager for each of the portfolios. The Management Agreements
provide that SAAMCo shall act as investment adviser to the Trust; manage the
Trust's investments; administer its business affairs; furnish offices, necessary
facilities and equipment; provide clerical, bookkeeping and administrative
services; and permit any of its officers or employees to serve, without
compensation, as trustees or officers of the Trust, if duly elected to such
positions.
The Trust pays SAAMCo a monthly fee calculated daily at the following annual
percentages of each portfolio's average daily net assets:
<TABLE>
<CAPTION>
AVERAGE DAILY MANAGEMENT
PORTFOLIO NET ASSETS FEE
- --------------------------------------------------------
<S> <C> <C>
Money Market $0-$150 million .500%
> $150 million .475%
> $250 million .450%
> $500 million .425%
Government & Quality
Bond/ $0-$200 million .625%
Fixed Income > $200 million .575%
> $500 million .500%
High Yield $0-$250 million .700%
> $250 million .575%
> $500 million .500%
Target '98 $0-$100 million .625%
> $100 million .570%
> $250 million .525%
> $500 million .500%
Growth and Income $0-$100 million .700%
> $100 million .650%
> $250 million .600%
> $500 million .575%
<CAPTION>
AVERAGE DAILY MANAGEMENT
PORTFOLIO NET ASSETS FEE
- --------------------------------------------------------
<S> <C> <C>
Foreign Securities $0-$100 million .900%
> $100 million .825%
> $250 million .750%
> $500 million .700%
Growth $0-$250 million .750%
> $250 million .675%
> $500 million .600%
Capital Appreciation $0-$100 million .750%
> $100 million .675%
> $250 million .625%
> $500 million .600%
Natural Resources > $0 .750%
Strategic Multi-Asset/ $0-$200 million 1.000%
Multi-Asset > $200 million .875%
> $500 million .800%
</TABLE>
---------------------
67
<PAGE> 68
SAAMCO has entered into Subadvisory Agreements (the "Subadvisory Agreement")
with Wellington Management Company ("WMC") to manage the investments of each
portfolio.
The portion of the investment advisory fees received by SAAMCo which are paid
to WMC are as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY WMC
PORTFOLIO NET ASSETS ALLOCATION
- --------------------------------------------------------
<S> <C> <C>
Money Market $0-$500 million .075%
> $500 million .020%
Government & Quality
Bond/ $0-$ 50 million .225%
Fixed Income > $ 50 million .125%
> $100 million .100%
High Yield $0-$ 50 million .300%
> $ 50 million .225%
> $150 million .175%
> $500 million .150%
Target '98 $0-$ 50 million .225%
> $ 50 million .150%
> $100 million .100%
> $500 million .050%
Growth/ $0-$ 50 million .325%
Growth and Income > $ 50 million .225%
> $150 million .200%
> $500 million .150%
<CAPTION>
AVERAGE DAILY WMC
PORTFOLIO NET ASSETS ALLOCATION
- --------------------------------------------------------
<S> <C> <C>
Foreign Securities $0-$ 50 million .400%
> $ 50 million .275%
> $150 million .200%
> $500 million .150%
Capital Appreciation $0-$ 50 million .375%
> $ 50 million .275%
> $150 million .200%
> $500 million .150%
Natural Resources $0-$ 50 million .350%
> $ 50 million .250%
> $150 million .200%
> $500 million .150%
Multi-Asset $0-$ 50 million .250%
> $ 50 million .175%
> $150 million .150%
Strategic Multi-Asset $0-$ 50 million .300%
> $ 50 million .200%
> $150 million .175%
> $500 million .150%
</TABLE>
For the six months ended June 30, 1997, SAAMCo received fees of $5,915,782
from the Trust, of which SAAMCo informed the Trust that $4,137,965 was retained
and $1,777,817 was allocated to WMC.
NOTE 6. SECURITIES TRANSACTIONS: The portfolios had the following purchases and
sales of long-term securities for the six months ended June 30, 1997:
<TABLE>
<CAPTION>
MONEY GOVERNMENT & GROWTH
MARKET FIXED INCOME QUALITY BOND HIGH YIELD TARGET '98 AND INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------
Purchases.............................. $ -- $ 7,273,262 $ 64,349,979 $19,086,065 $ -- $ 8,964,224
Sales.................................. -- 9,882,032 54,321,660 23,786,455 1,535,103 6,940,900
U.S. Government Securities included
above were as follows:
Purchases of U.S. Government
Securities........................... -- 3,344,099 52,277,652 -- -- --
Sales of U.S. Government Securities.... -- 7,405,846 48,087,563 -- 467,830 --
<CAPTION>
FOREIGN CAPITAL NATURAL STRATEGIC
SECURITIES GROWTH APPRECIATION RESOURCES MULTI-ASSET MULTI-ASSET
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Purchases.............................. $18,161,365 $ 54,634,957 $248,853,468 $12,516,699 $ 42,567,762 $17,402,776
Sales.................................. 18,131,509 63,631,745 176,051,738 6,622,290 58,766,703 22,952,863
U.S. Government Securities included
above were as follows:
Purchases of U.S. Government
Securities........................... -- -- -- -- 12,439,172 241,094
Sales of U.S. Government Securities.... -- -- -- -- 6,559,371 312,754
</TABLE>
- ---------------------
68
<PAGE> 69
NOTE 7. TRANSACTIONS WITH AFFILIATES: The Trust has executed purchases and
sales of securities through Royal Alliance Associates, Inc., SunAmerica
Securities, Inc., and Advantage Capital Corp., which are broker/dealers
affiliated with SAAMCo. For the six months ended June 30, 1997, the following
portfolios of the Trust paid brokerage commissions to these affiliate companies
of:
<TABLE>
<CAPTION>
AMOUNT
------
<S> <C>
Growth Portfolio................................................................ $ 250
Capital Appreciation Portfolio.................................................. 1,500
------
$1,750
======
</TABLE>
NOTE 8. TRUSTEES RETIREMENT PLAN: The Trustees (and Directors) of the
SunAmerica Family of Mutual Funds have adopted the SunAmerica Disinterested
Trustees' and Directors' Retirement Plan (the "Retirement Plan") effective
January 1, 1993 for the unaffiliated Trustees. The Retirement Plan provides
generally that if an unaffiliated Trustee who has at least 10 years of
consecutive service as a Disinterested Trustee of any of the SunAmerica mutual
funds (an "Eligible Trustee") retires after reaching age 60 but before age 70 or
dies while a Trustee, such person will be eligible to receive a retirement or
death benefit from each SunAmerica mutual fund with respect to which he or she
is an Eligible Trustee. As of each birthday, prior to the 70th birthday, but in
no event for a period greater than 10 years, each Eligible Trustee will be
credited with an amount equal to 50% of his or her regular fees (excluding
committee fees) for services as a Disinterested Trustee of each SunAmerica
mutual fund for the calendar year in which such birthday occurs. In addition, an
amount equal to 8.5% of any amounts credited under the preceding clause during
prior years, is added to each Eligible Trustee's account until such Eligible
Trustee reaches his or her 70th birthday. An Eligible Trustee may receive
benefits payable under the Retirement Plan, at his or her election, either in
one lump sum or in up to fifteen annual installments. As of June 30, 1997, the
Trust had accrued $104,591 for the Retirement Plan, which is included in accrued
expenses on the Statement of Assets and Liabilities and for the six months ended
June 30, 1997, expensed $18,491 for the Retirement Plan, which is included in
Trustee fees and expenses on the Statement of Operations.
---------------------
69
<PAGE> 70
- ---------------------
ANCHOR SERIES TRUST
FINANCIAL HIGHLIGHTS*
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET DIVIDENDS DIVIDENDS
REALIZED TOTAL DECLARED FROM NET
NET ASSET NET & UNREALIZED FROM FROM NET REALIZED NET ASSET
VALUE INVEST- GAIN (LOSS) INVEST- INVEST- GAIN ON VALUE
PERIOD BEGINNING MENT ON MENT MENT INVEST- END OF TOTAL
ENDED OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME MENTS PERIOD RETURN**
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market Portfolio
12/31/93 $ 1.00 $ 0.02 $ -- $ 0.02 $ (0.02) $ -- $ 1.00 2.0%
12/31/94 1.00 0.04 -- 0.04 (0.04) -- 1.00 3.8
12/31/95 1.00 0.05 -- 0.05 (0.05) -- 1.00 5.6
12/31/96 1.00 0.05 -- 0.05 (0.05) -- 1.00 5.0
06/30/97# 1.00 0.03 -- 0.03 (0.03) -- 1.00 2.5
Fixed Income Portfolio
12/31/93 14.31 0.95 0.19 1.14 (0.91) -- 14.54 8.0
12/31/94 14.54 0.89 (1.36) (0.47) (1.17) -- 12.90 (3.2)
12/31/95 12.90 0.90 1.52 2.42 (1.16) -- 14.16 19.2
12/31/96 14.16 0.93 (0.64) 0.29 (1.15) -- 13.30 2.4
06/30/97# 13.30 0.46 (0.03) 0.43 -- -- 13.73 3.2
Government & Quality Bond Portfolio
12/31/93 13.93 0.90 0.25 1.15 (0.86) -- 14.22 8.3
12/31/94 14.22 0.86 (1.30) (0.44) (0.73) (0.19) 12.86 (3.1)
12/31/95 12.86 0.90 1.55 2.45 (1.08) -- 14.23 19.4
12/31/96 14.23 0.87 (0.50) 0.37 (0.90) (0.03) 13.67 2.9
06/30/97# 13.67 0.43 (0.04) 0.39 -- -- 14.06 2.9
High Yield Portfolio
12/31/93 8.39 0.79 0.79 1.58 (0.54) -- 9.43 19.1
12/31/94 9.43 0.15 (0.56) (0.41) (1.15) -- 7.87 (4.5)
12/31/95 7.87 0.77 0.67 1.44 (0.98) -- 8.33 18.8
12/31/96 8.33 0.74 0.19 0.93 (0.88) -- 8.38 11.7
06/30/97# 8.38 0.37 0.10 0.47 -- -- 8.85 5.6
Target '98 Portfolio
12/31/93 13.57 0.82 0.71 1.53 (0.93) (0.23) 13.94 11.2
12/31/94 13.94 0.83 (1.39) (0.56) (1.11) (0.07) 12.20 (4.1)
12/31/95 12.20 0.86 0.88 1.74 (1.30) -- 12.64 14.6
12/31/96 12.64 0.81 (0.37) 0.44 (1.41) -- 11.67 3.7
06/30/97# 11.67 0.40 (0.11) 0.29 -- -- 11.96 2.5
Growth and Income Portfolio
12/31/93 12.49 0.61 2.11 2.72 (0.55) (0.08) 14.58 22.0
12/31/94 14.58 0.66 (1.96) (1.30) (0.52) (1.20) 11.56 (9.7)
12/31/95 11.56 0.61 1.29 1.90 (0.83) (0.62) 12.01 16.6
12/31/96+ 12.01 0.33 2.02 2.35 (0.77) -- 13.59 20.2
06/30/97# 13.59 0.08 2.53 2.61 -- -- 16.20 19.2
<CAPTION>
NET RATIO OF NET
ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME PORTFOLIO AVERAGE
PERIOD PERIOD TO AVERAGE TO AVERAGE TURNOVER COMMISSION
ENDED (000'S) NET ASSETS NET ASSETS RATE PER SHARE@
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Money Market Portfolio
12/31/93 $ 99,309 0.6% 2.7% %-- $ NA
12/31/94 126,004 0.6 3.8 -- NA
12/31/95 93,692 0.6 5.5 -- NA
12/31/96 74,001 0.6 4.9 -- NA
06/30/97# 75,058 0.6+ 5.0+ -- NA
Fixed Income Portfolio
12/31/93 41,116 0.8 6.3 45.9 NA
12/31/94 28,582 0.8 6.5 56.5 NA
12/31/95 27,975 0.8 6.5 76.7 NA
12/31/96 22,743 0.8 6.8 77.9 NA
06/30/97# 19,638 0.9+ 7.0+ 36.2 .0500
Government & Quality Bond Portfolio
12/31/93 264,660 0.7 6.2 93.2 NA
12/31/94 232,530 0.7 6.4 117.6 NA
12/31/95 225,579 0.7 6.5 135.2 NA
12/31/96 221,603 0.7 6.3 106.7 NA
06/30/97# 216,628 0.7+ 6.3+ 26.8 NA
High Yield Portfolio
12/31/93 79,303 0.9 8.5 121.1 NA
12/31/94 48,057 0.9 9.0 97.9 NA
12/31/95 46,817 0.9 9.2 68.1 NA
12/31/96 45,687 0.9 8.8 58.0 NA
06/30/97# 41,982 0.9+ 8.9+ 48.1 .0600
Target '98 Portfolio
12/31/93 20,500 0.9 5.7 20.8 NA
12/31/94 19,194 0.8 6.5 9.2 NA
12/31/95 12,774 0.9 6.7 38.6 NA
12/31/96 10,172 0.9 6.5 -- NA
06/30/97# 8,899 0.9+ 6.8+ -- NA
Growth and Income Portfolio
12/31/93 41,555 0.9 4.4 86.2 NA
12/31/94 34,995 0.9 4.9 50.7 NA
12/31/95 32,008 0.9 5.2 88.8 NA
12/31/96+ 33,465 0.9 2.5 108.5 .0477
06/30/97# 42,011 0.8+ 1.2+ 19.4 .0505
</TABLE>
- ---------------
* Selected data for a share of beneficial interest outstanding throughout each
period (calculated based upon average shares outstanding)
** Does not reflect expenses that apply to the separate accounts of Anchor
National Life Insurance Company, First SunAmerica Life Insurance Company,
Phoenix Mutual Life Insurance Company and Presidential Life Insurance
Company. If such expenses had been included, total return would have been
lower for each period presented.
@ The average commission per share is derived by taking the Agency commissions
paid on equity securities trades and dividing by the number of shares
purchased and sold. This information was not required to be disclosed prior
to 1996.
+ Prior to March 1, 1996, the portfolio was invested primarily in convertible
debt securities. After that date, the portfolio primarily invests in common
stock.
# Unaudited
+ Annualized
- ---------------------
70
<PAGE> 71
- ---------------------
ANCHOR SERIES TRUST
FINANCIAL HIGHLIGHTS* -- (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET DIVIDENDS DIVIDENDS
REALIZED TOTAL DECLARED FROM NET
NET ASSET NET & UNREALIZED FROM FROM NET REALIZED NET ASSET
VALUE INVEST- GAIN (LOSS) INVEST- INVEST- GAIN ON VALUE
PERIOD BEGINNING MENT ON MENT MENT INVEST- END OF TOTAL
ENDED OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME MENTS PERIOD RETURN**
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Foreign Securities Portfolio
12/31/93 $ 8.47 $ 0.05 $ 2.50 $ 2.55 $ (0.09) $ -- $ 10.93 30.2%
12/31/94 10.93 0.11 (0.46) (0.35) (0.03) -- 10.55 (3.2)
12/31/95 10.55 0.13 1.19 1.32 (0.05) (0.01) 11.81 12.6
12/31/96 11.81 0.15 1.19 1.34 (0.21) -- 12.94 11.5
06/30/97# 12.94 0.10 1.08 1.18 -- -- 14.12 9.1
Growth Portfolio
12/31/93 21.67 0.05 1.60 1.65 (0.08) (0.92) 22.32 7.8
12/31/94 22.32 0.05 (1.03) (0.98) (0.05) (3.11) 18.18 (4.7)
12/31/95 18.18 0.11 4.62 4.73 (0.05) (3.38) 19.48 26.3
12/31/96 19.48 0.20 4.57 4.77 (0.11) (0.95) 23.19 25.0
06/30/97# 23.19 0.08 4.18 4.26 -- -- 27.45 18.4
Capital Appreciation Portfolio
12/31/93 17.75 (0.03) 3.73 3.70 (0.01) (1.16) 20.28 21.1
12/31/94 20.28 (0.02) (0.71) (0.73) -- (2.04) 17.51 (3.8)
12/31/95 17.51 0.06 6.00 6.06 (0.15) (0.20) 23.22 34.6
12/31/96 23.22 0.06 5.73 5.79 (0.06) (0.95) 28.00 25.1
06/30/97# 28.00 0.03 2.86 2.89 -- -- 30.89 10.3
Natural Resources Portfolio
12/31/93 9.93 0.15 3.42 3.57 (0.17) -- 13.33 36.2
12/31/94 13.33 0.23 (0.09) 0.14 (0.09) (0.09) 13.29 1.0
12/31/95 13.29 0.18 2.15 2.33 (0.21) (0.29) 15.12 17.5
12/31/96 15.12 0.22 1.89 2.11 (0.13) (0.23) 16.87 14.1
06/30/97# 16.87 0.11 0.16 0.27 -- -- 17.14 1.6
Multi-Asset Portfolio
12/31/93 13.79 0.36 0.63 0.99 (0.44) (0.46) 13.88 7.3
12/31/94 13.88 0.39 (0.60) (0.21) (0.47) (1.49) 11.71 (1.7)
12/31/95 11.71 0.40 2.47 2.87 (0.49) (1.05) 13.04 24.9
12/31/96 13.04 0.35 1.36 1.71 (0.49) (0.91) 13.35 13.9
06/30/97# 13.35 0.17 1.68 1.85 -- -- 15.20 13.9
Strategic Multi-Asset Portfolio
12/31/93 12.45 0.21 1.68 1.89 (0.28) -- 14.06 15.3
12/31/94 14.06 0.24 (0.53) (0.29) (0.20) (2.28) 11.29 (2.6)
12/31/95 11.29 0.32 2.18 2.50 (0.23) (1.78) 11.78 22.8
12/31/96 11.78 0.25 1.41 1.66 (0.40) (0.84) 12.20 14.8
06/30/97# 12.20 0.13 1.23 1.36 -- -- 13.56 11.1
<CAPTION>
NET RATIO OF NET
ASSETS RATIO OF INVESTMENT
END OF EXPENSES INCOME (LOSS) PORTFOLIO AVERAGE
PERIOD PERIOD TO AVERAGE TO AVERAGE TURNOVER COMMISSION
ENDED (000'S) NET ASSETS NET ASSETS RATE PER SHARE@
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Foreign Securities Portfolio
12/31/93 $ 72,579 1.3% 0.5% 47.7% $ NA
12/31/94 68,641 1.2 1.0 73.9 NA
12/31/95 53,609 1.2 1.2 33.0 NA
12/31/96 48,036 1.4 1.2 74.3 .0062
06/30/97# 48,535 1.4+ 1.6+ 41.8 .0054
Growth Portfolio
12/31/93 311,050 0.9 0.2 66.3 NA
12/31/94 246,149 0.8 0.2 74.8 NA
12/31/95 307,857 0.9 0.6 92.1 NA
12/31/96 366,602 0.8 0.9 51.7 .0515
06/30/97# 424,618 0.8+ 0.6+ 14.5 .0517
Capital Appreciation Portfolio
12/31/93 182,515 0.9 (0.2) 111.2 NA
12/31/94 229,544 0.8 (0.1) 64.0 NA
12/31/95 356,218 0.8 0.3 60.1 NA
12/31/96 567,672 0.8 0.2 69.2 .0517
06/30/97# 652,969 0.7+ 0.2+ 33.5 .0550
Natural Resources Portfolio
12/31/93 18,255 1.1 1.3 34.5 NA
12/31/94 21,230 1.0 1.7 36.0 NA
12/31/95 28,941 1.0 1.3 32.0 NA
12/31/96 45,329 0.9 1.3 52.5 .0409
06/30/97# 50,951 0.9+ 1.3+ 15.3 .0360
Multi-Asset Portfolio
12/31/93 208,900 1.1 2.6 48.2 NA
12/31/94 164,159 1.1 3.0 82.5 NA
12/31/95 168,243 1.1 3.2 85.9 NA
12/31/96 150,619 1.1 2.6 64.1 .0517
06/30/97# 154,755 1.1+ 2.4+ 29.5 .0537
Strategic Multi-Asset Portfolio
12/31/93 76,466 1.3 1.2 73.9 NA
12/31/94 65,357 1.3 1.8 63.7 NA
12/31/95 64,026 1.3 2.7 36.9 NA
12/31/96 57,744 1.4 2.0 51.3 .0064
06/30/97# 57,844 1.4+ 2.0+ 31.8 .0069
</TABLE>
- ---------------
* Selected data for a share of beneficial interest outstanding throughout each
period (calculated based upon average shares outstanding)
** Does not reflect expenses that apply to the separate accounts of Anchor
National Life Insurance Company, First SunAmerica Life Insurance Company,
Phoenix Mutual Life Insurance Company and Presidential Life Insurance
Company. If such expenses had been included, total return would have been
lower for each period presented.
@ The average commission per share is derived by taking the Agency commissions
paid on equity securities trades and dividing by the number of shares
purchased and sold. This information was not required to be disclosed prior
to 1996.
# Unaudited
+ Annualized
---------------------
71
